Castle

Report to:
CASTLE RESOURCES INC.
Preliminary Economic Assessment

of the Granduc Copper Project,
Northern British Columbia
Document No. 1256370100-REP-R0002-03
1256370100-REP-R0002-03

Report to:
CASTLE RESOURCES INC.
PRELIMINARY ECONOMIC ASSESSMENT

OF THE GRANDUC COPPER PROJECT,
NORTHERN BRITISH COLUMBIA
EFFECTIVE DATE: FEBRUARY 28, 2013
Prepared by Robert Morrison, Ph.D., MAusIMM (CP), P.Geo.

Cam McKinnon, P.Eng.
Garth Liukko, P.Eng.
Dharshan Kesavanathan, P.Eng.
Andre Gagnon, P.Eng.
Sabry Abdel Hafez, Ph.D., P.Eng.
Monica Danon-Schaffer, Ph.D., P.Eng.
Mike McLaughlin, P.Eng.
TS/vc Jacques Ouellet, Ph.D., P.Eng.
Suite 900, 330 Bay Street, Toronto, Ontario M5H 2S8

Phone: 416-368-9080 Fax: 416-368-1963
1256370100-REP-R0002-03

REVISION HISTORY
REV. PREPARED BY REVIEWED BY APPROVED BY

NO ISSUE DATE AND DATE AND DATE AND DATE DESCRIPTION OF REVISION
00 2013/03/19 All QPs Toby Sharpe Toby Sharpe Draft to Client
(see cover page)
01 2013/03/27 All QPs Toby Sharpe Toby Sharpe Draft to Client
(see cover page)
All QPs Toby Sharpe Toby Sharpe Sections 20, 22, and 25 to Client
02 2013/04/05
(see cover page)
All QPs Toby Sharpe Toby Sharpe Final Report
03 2013/04/12
(see cover page)
1256370100-REP-R0002-03
TABLE OF CONTENTS
1.0 SUMMARY ......................................................................................................... 1-1

1.1 INTRODUCTION ...................................................................................................... 1-1
1.2 PROPERTY DESCRIPTION ........................................................................................ 1-2
1.3 HISTORY ............................................................................................................... 1-3
1.4 GEOLOGICAL SETTING AND MINERALIZATION ............................................................ 1-3
1.5 EXPLORATION AND DRILLING .................................................................................. 1-4
1.6 MINERAL RESOURCE ESTIMATE .............................................................................. 1-4
1.7 MINERAL PROCESSING AND METALLURGICAL TESTING .............................................. 1-8
1.8 MINING METHODS ............................................................................................... 1-10
1.9 RECOVERY METHODS........................................................................................... 1-10
1.10 PROJECT INFRASTRUCTURE ................................................................................... 1-12
1.10.1 TAILINGS STORAGE FACILITY ................................................................. 1-15
1.11 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ........... 1-15
1.12 CAPITAL AND OPERATING COST ESTIMATES ............................................................ 1-16
1.12.1 CAPITAL COST ESTIMATE....................................................................... 1-16
1.12.2 OPERATING COST ESTIMATE.................................................................. 1-18
1.13 ECONOMIC ANALYSIS ........................................................................................... 1-18
1.14 RECOMMENDATIONS ............................................................................................ 1-19
2.0 INTRODUCTION ................................................................................................. 2-1
2.1 TERMS OF REFERENCE AND PURPOSE OF REPORT .................................................... 2-1
2.1.1 UNITS OF MEASUREMENT ....................................................................... 2-2
3.0 RELIANCE ON OTHER EXPERTS........................................................................ 3-1
4.0 PROPERTY DESCRIPTION AND LOCATION ....................................................... 4-1
4.1 LOCATION ............................................................................................................. 4-1
4.2 PROPERTY DESCRIPTION ........................................................................................ 4-5
4.3 PROPERTY AGREEMENTS........................................................................................ 4-9
4.4 ENVIRONMENTAL LIABILITIES .................................................................................. 4-9
4.5 REGULATORY REQUIREMENTS ................................................................................. 4-9
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY................................................................................................. 5-1
5.1 ACCESSIBILITY ....................................................................................................... 5-1
5.2 CLIMATE ............................................................................................................... 5-1
5.3 INFRASTRUCTURE AND LOCAL RESOURCES ............................................................... 5-1
5.4 PHYSIOGRAPHY ..................................................................................................... 5-2
i 1256370100-REP-R0002-03

6.0 HISTORY ............................................................................................................ 6-1
6.1 DRILLING .............................................................................................................. 6-2
6.2 MINE PRODUCTION ................................................................................................ 6-3
6.3 EXPLORATION PROGRAMS 2005 TO 2006 ............................................................. 6-5
6.3.1 2005 .................................................................................................. 6-5
6.3.2 2006 .................................................................................................. 6-5
6.4 COORDINATE SYSTEMS AND TOPOGRAPHY ............................................................... 6-8
6.4.1 COORDINATE SYSTEMS ........................................................................... 6-8
6.4.2 TOPOGRAPHY ........................................................................................ 6-8
7.0 GEOLOGICAL SETTING AND MINERALIZATION ................................................ 7-1
7.1 REGIONAL GEOLOGY .............................................................................................. 7-1
7.2 LOCAL GEOLOGY.................................................................................................... 7-2
7.2.1 STRATIGRAPHY ...................................................................................... 7-7
7.2.2 INTRUSIONS .......................................................................................... 7-7
7.2.3 STRUCTURE ........................................................................................... 7-7
7.3 PROPERTY GEOLOGY.............................................................................................. 7-8
7.3.1 STRATIGRAPHY ...................................................................................... 7-8
7.4 MINERALIZATION ................................................................................................. 7-11
7.4.1 GRANDUC DEPOSIT .............................................................................. 7-13
7.4.2 NORTH ZONE....................................................................................... 7-14
7.4.3 SOUTH ZONE ....................................................................................... 7-14
8.0 DEPOSIT TYPES ................................................................................................. 8-1
9.0 EXPLORATION ................................................................................................... 9-1
10.0 DRILLING ......................................................................................................... 10-1
10.1 SUMMARY .......................................................................................................... 10-1
10.2 CASTLE RESOURCES INC. DRILLING ....................................................................... 10-2
10.2.1 2010 DRILL PROGRAM ....................................................................... 10-2
10.2.2 2011 DRILL PROGRAM ....................................................................... 10-2
10.2.3 2012 DRILL PROGRAM ....................................................................... 10-3
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY...................................... 11-1
11.1 HISTORICAL SAMPLING......................................................................................... 11-1
11.2 2005 AND 2006 BELL COPPER SAMPLING .......................................................... 11-1
11.2.1 SAMPLE SECURITY ............................................................................... 11-1
11.2.2 CHAIN OF CUSTODY .............................................................................. 11-1
11.2.3 FIELD BLANKS ..................................................................................... 11-2
11.2.4 CERTIFIED STANDARDS......................................................................... 11-2
11.2.5 FIELD DUPLICATES ............................................................................... 11-2
11.2.6 LAB DUPLICATES .................................................................................. 11-2
11.3 CASTLE SAMPLE PREPARATION AND ANALYSES ....................................................... 11-2
11.3.1 2010 TO 2011 ECO TECH/ALS .......................................................... 11-3
11.3.2 2012 AGAT LABORATORIES ................................................................ 11-4
11.4 SPECIFIC GRAVITY DATA ....................................................................................... 11-6
11.5 MAGNETITE DATA ................................................................................................ 11-6
ii 1256370100-REP-R0002-03

11.5.1 DAVIS TUBE MAGNETIC SEPARATION...................................................... 11-6
11.5.2 LITHIUM BORATE FUSION WITH AN XRF FINISH........................................ 11-6
11.5.3 SATMAGAN MAGNETITE ANALYSIS.......................................................... 11-7
11.5.4 BULK X-RAY DIFFRACTION MINERALOGY ................................................. 11-7
11.6 QA/QC PROGRAMS ............................................................................................. 11-7
11.6.1 2010 TO 2011 QUALITY CONTROL PROCEDURES .................................. 11-7
11.6.2 2012 QUALITY CONTROL PROCEDURES ................................................. 11-8
11.6.3 QA/QC RESULTS................................................................................. 11-8
11.7 QP OPINION...................................................................................................... 11-14
12.0 DATA VERIFICATION ........................................................................................ 12-1
12.1 PRE-2012 DATA................................................................................................. 12-1
12.2 2012 DRILL DATA .............................................................................................. 12-3
12.3 MAGNETITE RE-ASSAYING ..................................................................................... 12-5
12.3.1 RESULTS ............................................................................................. 12-5
12.4 TETRA TECH SITE VISITS ....................................................................................... 12-5
12.4.1 SITE VISIT JULY 18 AND 19, 2012 ....................................................... 12-5
12.4.2 SITE VISIT AUGUST 14 AND 15, 2012 .................................................. 12-7
12.5 REVIEW OF PREVIOUS STUDIES ............................................................................. 12-9
12.6 QP OPINION........................................................................................................ 12-9
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING .............................. 13-1
13.1 METALLURGICAL TEST WORK REVIEW.................................................................... 13-2
13.1.1 INTRODUCTION .................................................................................... 13-2
13.1.2 2011 TEST WORK .............................................................................. 13-2
13.1.3 2012 TEST WORK ............................................................................ 13-10
13.1.4 HISTORICAL PROCESS DESCRIPTION .................................................... 13-19
14.0 MINERAL RESOURCE ESTIMATES .................................................................. 14-1
14.1 INTRODUCTION .................................................................................................... 14-1
14.2 GEOLOGICAL INTERPRETATION .............................................................................. 14-1
14.3 DATA .................................................................................................................. 14-2
14.4 EXPLORATORY DATA ANALYSIS .............................................................................. 14-2
14.4.1 RAW STATISTICS .................................................................................. 14-2
14.4.2 OUTLIER MANAGEMENT AND CAPPING STRATEGY .................................... 14-3
14.4.3 DRILLHOLE COMPOSITING..................................................................... 14-6
14.4.4 WIREFRAMING ..................................................................................... 14-7
14.4.5 CONTACT PROFILES ............................................................................ 14-10
14.4.6 RESULTS ........................................................................................... 14-11
14.5 DENSITY ........................................................................................................... 14-15
14.6 SPATIAL ANALYSIS ............................................................................................. 14-16
14.6.1 VARIOGRAPHY.................................................................................... 14-16
14.7 INTERPOLATION PLAN......................................................................................... 14-19
14.7.1 ESTIMATION PARAMETER FILES ........................................................... 14-19
14.7.2 SEARCH AND SAMPLE PARAMETER FILES ............................................. 14-19
14.7.3 VARIOGRAPHY PARAMETER FILES ........................................................ 14-20
14.8 CONDITIONAL SIMULATION.................................................................................. 14-24
iii 1256370100-REP-R0002-03

14.8.1 GOLD AND SILVER ESTIMATION ........................................................... 14-24
14.8.2 MAGNETITE ESTIMATION ..................................................................... 14-24
14.9 RESOURCE BLOCK MODEL ................................................................................. 14-25
14.9.1 CONFIGURATION ................................................................................ 14-25
14.9.2 CELL ATTRIBUTES .............................................................................. 14-25
14.9.3 INTERPOLATION ................................................................................. 14-26
14.10 MODEL VALIDATION ........................................................................................... 14-27
14.10.1 STATISTICS ........................................................................................ 14-27
14.10.2 SECTIONS ......................................................................................... 14-33
14.10.3 SWATH PLOTS ................................................................................... 14-34
14.11 MINERAL RESOURCE CLASSIFICATION .................................................................. 14-38
14.11.1 GRANDUC MEASURED RESOURCE CLASSIFICATION ................................ 14-38
14.11.2 GRANDUC INDICATED RESOURCE CLASSIFICATION ................................. 14-39
14.11.3 GRANDUC INFERRED MINERAL RESOURCE CLASSIFICATION.................... 14-40
14.12 MINERAL RESOURCE TABULATION ....................................................................... 14-40
14.13 CUT-OFFS ......................................................................................................... 14-40
14.13.1 RESOURCE TABLES ............................................................................ 14-41
14.13.2 GRADE-TONNAGE CURVES .................................................................. 14-44
14.14 COMPARISONS WITH PREVIOUS RESOURCE MODELS ............................................. 14-50
15.0 MINERAL RESERVE ESTIMATES ..................................................................... 15-1
16.0 MINING METHODS .......................................................................................... 16-1
16.1 OVERVIEW .......................................................................................................... 16-1
16.2 GEOTECHNICAL EVALUATION ................................................................................. 16-1
16.2.1 CONSULTANT REPORTS ........................................................................ 16-1
16.2.2 GROUND SUPPORT............................................................................... 16-2
16.2.3 GEOMECHANICAL ASPECTS OF MINING ................................................... 16-3
16.2.4 GEOTECHNICAL MONITORING ................................................................ 16-3
16.3 MINE DESIGN AND ACCESS .................................................................................. 16-3
16.3.1 CUT-OFF GRADE CALCULATION .............................................................. 16-4
16.3.2 SUB-LEVEL CAVE MINING...................................................................... 16-4
16.3.3 CONVENTIONAL BOREHOLE OPEN STOPE MINING.................................... 16-5
16.3.4 MINING SEQUENCE .............................................................................. 16-6
16.4 MINING METHODS ............................................................................................... 16-7
16.4.1 TIDE TUNNEL (800 M LEVEL) ............................................................... 16-7
16.4.2 LEDUC DRAINAGE TUNNEL .................................................................... 16-8
16.4.3 1,100 M LEVEL ADIT ........................................................................... 16-8
16.4.4 MAIN ZONE RAMP SYSTEM ................................................................... 16-8
16.4.5 NORTH ZONE RAMP SYSTEM ................................................................ 16-8
16.4.6 SUB-LEVEL EXTRACTION HEADINGS........................................................ 16-8
16.4.7 STOPE ACCESS CROSS-CUTS ................................................................. 16-8
16.4.8 SILLS AND DRILL ROOMS...................................................................... 16-9
16.4.9 VENTILATION RAISES ............................................................................ 16-9
16.4.10 RESOURCE AND WASTE PASSES ............................................................ 16-9
16.4.11 CRUSHER STATION, RESOURCE/WASTE BINS AND TRAIN LOAD OUTS ....... 16-9
16.4.12 UNDERGROUND MOBILE EQUIPMENT FLEET ........................................... 16-9
16.5 MINE FIXED EQUIPMENT .................................................................................... 16-10
iv 1256370100-REP-R0002-03

16.5.1 MINE BACKFILL ................................................................................. 16-10
16.6 MINE VENTILATION AND SECONDARY EGRESS ...................................................... 16-11
16.6.1 VENTILATION DESIGN ......................................................................... 16-11
16.7 UNDERGROUND MINE SERVICES ......................................................................... 16-11
16.7.1 MINE POWER .................................................................................... 16-11
16.7.2 COMPRESSED AIR .............................................................................. 16-11
16.7.3 COMMUNICATIONS ............................................................................. 16-12
16.7.4 MINE WATER SUPPLY ......................................................................... 16-12
16.7.5 MINE DEWATERING ............................................................................ 16-12
16.7.6 SUPPLY STORAGE .............................................................................. 16-12
16.7.7 POWDER AND DETONATOR MAGAZINES ................................................ 16-13
16.7.8 FUEL STORAGE AND DISTRIBUTION ...................................................... 16-13
16.7.9 CENTRAL BLASTING............................................................................ 16-13
16.7.10 EQUIPMENT MAINTENANCE ................................................................. 16-13
16.8 UNDERGROUND MINE WORKFORCE .................................................................... 16-13
16.8.1 CASTLE RESOURCES PERSONNEL ........................................................ 16-13
16.8.2 CONTRACTOR PERSONNEL .................................................................. 16-14
16.9 DEVELOPMENT AND PRODUCTION SCHEDULES ..................................................... 16-14
16.9.1 GENERAL SCHEDULING ASSUMPTIONS ................................................. 16-14
16.9.2 DEVELOPMENT SCHEDULE .................................................................. 16-14
16.9.3 PRODUCTION SCHEDULE..................................................................... 16-15
17.0 RECOVERY METHODS ..................................................................................... 17-1
17.1 BASE CASE ......................................................................................................... 17-1
17.1.1 FLOWSHEET DEVELOPMENT .................................................................. 17-1
17.1.2 PLANT DESIGN .................................................................................... 17-2
17.1.3 PROCESS PLANT DESCRIPTION .............................................................. 17-4
17.2 ALTERNATE CASE................................................................................................. 17-6
17.3 RISKS AND OPPORTUNITY ..................................................................................... 17-7
18.0 PROJECT INFRASTRUCTURE ........................................................................... 18-1
18.1 TAILINGS STORAGE FACILITY ................................................................................. 18-4
18.1.1 GENERAL ............................................................................................ 18-4
18.1.2 GENERAL SITE CONDITIONS .................................................................. 18-5
18.1.3 DESIGN BASIS AND OPERATING CRITERIA ............................................... 18-6
18.1.4 TAILINGS STORAGE FACILITY DESIGN ..................................................... 18-7
18.1.5 CONSTRUCTION MATERIALS .................................................................. 18-8
18.1.6 INSTRUMENTATION AND MONITORING .................................................... 18-9
18.1.7 SEEPAGE COLLECTION AND RECYCLE ..................................................... 18-9
18.1.8 CLOSURE ............................................................................................ 18-9
18.2 MAIN SITE BUILDING ......................................................................................... 18-10
18.3 PERMANENT CAMP ............................................................................................ 18-10
18.4 FUEL STORAGE AND DISTRIBUTION ...................................................................... 18-11
18.5 WATER SUPPLY AND DISTRIBUTION ..................................................................... 18-11
18.6 WASTE MANAGEMENT ....................................................................................... 18-12
18.7 ROADS, SHIPPING AND LOGISTICS ....................................................................... 18-12
18.7.1 OFF-SITE ACCESS ROAD...................................................................... 18-12
v 1256370100-REP-R0002-03

18.7.2 ON-SITE ACCESS ROADS ..................................................................... 18-14
18.7.3 SHIPPING AND LOGISTICS ................................................................... 18-14
18.8 POWER SUPPLY AND DISTRIBUTION ..................................................................... 18-17
18.8.1 OFF-SITE POWER SUPPLY ................................................................... 18-17
18.8.2 ON-SITE POWER DISTRIBUTION............................................................ 18-17
18.9 SURFACE WATER MANAGEMENT ......................................................................... 18-17
19.0 MARKET STUDIES AND CONTRACTS .............................................................. 19-1
19.1 COPPER CONCENTRATE ........................................................................................ 19-1
19.1.1 SUPPLY – DEMAND BALANCE................................................................ 19-1
19.1.2 PRICE FORECASTS ............................................................................... 19-2
19.1.3 TREATMENT AND REFINING CHARGES AND CONCENTRATE SHIPPING ......... 19-3
19.2 MAGNETITE ......................................................................................................... 19-4
19.2.1 STEEL INDUSTRY.................................................................................. 19-4
19.2.2 HEAVY MEDIA SEPARATION ................................................................... 19-5
20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY
IMPACT ............................................................................................................ 20-1
20.1 ENVIRONMENTAL STUDIES .................................................................................... 20-1
20.2 WATER MONITORING ........................................................................................... 20-1
20.2.1 WATERSHEDS ...................................................................................... 20-1
20.2.2 SURFACE WATER AND SEDIMENT QUALITY .............................................. 20-1
20.2.3 HYDROLOGY ........................................................................................ 20-2
20.2.4 HYDROGEOLOGY AND GROUNDWATER QUALITY ....................................... 20-2
20.2.5 TAILINGS AND WATER MANAGEMENT ..................................................... 20-2
20.2.6 WASTE MANAGEMENT .......................................................................... 20-3
20.3 AIR EMISSIONS CONTROL ..................................................................................... 20-3
20.4 NOISE ................................................................................................................ 20-4
20.5 PERMITTING ........................................................................................................ 20-4
20.6 MINE CLOSURE ................................................................................................... 20-6
20.6.1 UNDERGROUND MINE AND GRANDUC TUNNEL ........................................ 20-7
20.6.2 PLANT COMPLEX AND ANCILLARY INFRASTRUCTURE................................. 20-7
20.6.3 UPPER LEDUC RIVER VALLEY INFRASTRUCTURE ...................................... 20-7
20.6.4 TAILINGS STORAGE FACILITY ................................................................. 20-8
20.6.5 TRANSMISSION LINE INTERTIE ............................................................... 20-8
20.6.6 GRANDUC ROAD .................................................................................. 20-8
20.6.7 POST CLOSURE MONITORING ................................................................ 20-8
20.7 SOCIAL AND COMMUNITY REQUIREMENTS .............................................................. 20-9
20.7.1 ENGAGEMENT AND CONSULTATION ........................................................ 20-9
20.7.2 HERITAGE RESOURCES ....................................................................... 20-10
20.7.3 SOCIAL, ECONOMIC, AND HEALTH ENVIRONMENTS ................................ 20-10
21.0 CAPITAL AND OPERATING COST ESTIMATES ................................................. 21-1
21.1 SUMMARY .......................................................................................................... 21-1
21.2 CAPITAL COST ESTIMATE ...................................................................................... 21-1
21.2.1 SUMMARY OF CAPITAL COSTS ............................................................... 21-1
21.2.2 ESTIMATE BASE DATE AND VALIDITY ...................................................... 21-2
21.2.3 CAPITAL COST ORGANIZATION ............................................................... 21-3
vi 1256370100-REP-R0002-03

21.2.4 DIRECT COSTS ..................................................................................... 21-3
21.2.5 INDIRECT COSTS .................................................................................. 21-3
21.2.6 OWNER’S COSTS ................................................................................. 21-4
21.2.7 CONTINGENCIES .................................................................................. 21-4
21.2.8 CAPITAL COSTS EXCLUSIONS ................................................................. 21-4
21.2.9 ESTIMATING METHODOLOGY ................................................................. 21-4
21.2.10 RESPONSIBILITY................................................................................... 21-5
21.2.11 CAPITAL COST BREAKDOWN .................................................................. 21-5
21.3 OPERATING COST ESTIMATE ................................................................................. 21-8
21.3.1 MINE OPERATING COSTS ...................................................................... 21-9
21.3.2 PROCESSING OPERATING COSTS ......................................................... 21-11
21.3.3 G&A OPERATING COSTS..................................................................... 21-13
21.3.4 TSF OPERATING COSTS ...................................................................... 21-13
21.3.5 ENVIRONMENTAL MONITORING OPERATING COSTS................................ 21-14
22.0 ECONOMIC ANALYSIS ..................................................................................... 22-1
22.1 PRE-TAX MODEL .................................................................................................. 22-2
22.1.1 METAL PRODUCTION IN FINANCIAL MODEL ............................................. 22-2
22.1.2 FINANCIAL EVALUATIONS....................................................................... 22-2
22.2 OPERATING SCENARIOS........................................................................................ 22-3
22.3 SENSITIVITY ANALYSIS .......................................................................................... 22-4
22.4 POST-TAX FINANCIAL ANALYSIS ............................................................................. 22-6
22.4.1 CANADIAN FEDERAL AND BC PROVINCIAL INCOME TAX REGIME ................ 22-6
22.4.2 BC MINERAL TAX REGIME .................................................................... 22-7
22.5 ROYALTIES .......................................................................................................... 22-8
22.6 SMELTER AND MARKETING TERMS........................................................................ 22-8
22.7 TRANSPORTATION LOGISTICS ................................................................................ 22-9
22.7.1 INSURANCE ......................................................................................... 22-9
22.7.2 OWNERS REPRESENTATION AND MARKETING ......................................... 22-9
22.7.3 CONCENTRATE/MAGNETITE LOSSES ...................................................... 22-9
23.0 ADJACENT PROPERTIES ................................................................................. 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION ................................................ 24-1
25.0 INTERPRETATIONS AND CONCLUSIONS ........................................................ 25-1
25.1 MINERAL RESOURCE ESTIMATE ............................................................................ 25-1
25.2 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................ 25-2
25.3 MINING .............................................................................................................. 25-2
25.5 INFRASTRUCTURE ................................................................................................ 25-4
25.6 ENVIRONMENTAL ................................................................................................. 25-5
26.0 RECOMMENDATIONS ..................................................................................... 26-1
26.1 INTRODUCTION .................................................................................................... 26-1
26.2 GEOLOGY............................................................................................................ 26-1
26.2.1 PHASE I .............................................................................................. 26-1
26.2.2 PHASE II ............................................................................................. 26-2
vii 1256370100-REP-R0002-03

26.3 MINERAL PROCESSING......................................................................................... 26-2
26.5 INFRASTRUCTURE ................................................................................................ 26-3
26.7 MINING .............................................................................................................. 26-4
26.8 ENVIRONMENTAL ................................................................................................. 26-5
26.9 RECOMMENDED COSTS SUMMARY ........................................................................ 26-5
27.0 REFERENCES .................................................................................................. 27-1
27.1 GEOLOGY............................................................................................................ 27-1
27.2 METALLURGY AND PROCESS ................................................................................. 27-2
27.3 ENVIRONMENTAL ................................................................................................. 27-2
27.5 MARKET STUDIES AND FINANCIALS ....................................................................... 27-3
LIST OF APPENDICES
APPENDIX A CERTIFICATES OF QUALIFED PERSONS

APPENDIX B MINING SCHEDULES
APPENDIX C CASH FLOW
LIST OF TABLES
Table 1.1 General Project Information......................................................................................... 1-1

Table 1.2 Measured Resource for the Granduc Copper Deposit Main Zone ............................ 1-5
Table 1.3 Indicated Resource for the Granduc Copper Deposit Main Zone.............................. 1-6
Table 1.4 Inferred Resource for the Granduc Copper Deposit Main Zone ................................ 1-6
Table 1.5 Inferred Resource for the Granduc Copper Deposit North Zone ............................... 1-7
Table 1.6 Measured and Indicated Resource for the Granduc Copper Deposit ....................... 1-7
Table 1.7 Inferred Resource for the Granduc Copper Deposit ................................................... 1-8
Table 1.8 Inferred Magnetite Resource for the Granduc Copper Deposit at CuEq ≥0.8% ....... 1-8
Table 1.9 Initial Capital Cost Summary...................................................................................... 1-17
Table 1.10 Sustaining Capital Cost Summary ............................................................................. 1-17
Table 1.11 Operating Cost Summary ........................................................................................... 1-18
Table 2.1 Summary of QPs ........................................................................................................... 2-1
Table 4.1 Castle Granduc Crown Mineral Claims ........................................................................ 4-5
Table 4.2 Castle Granduc British Columbia Mineral Tenures List ............................................. 4-7
Table 6.1 Documented Production at Granduc Mine, 1971 to 1984 ....................................... 6-4
Table 10.1 Summary of Granduc Drilling by Company and Year ............................................... 10-1
Table 11.1 Eco Tech/ALS Assay Detection Limits ....................................................................... 11-4
viii 1256370100-REP-R0002-03

Table 11.2 AGAT Laboratories Detection Limits .......................................................................... 11-5
Table 11.3 2012 Granduc Drill Program Analytical Quality Control Data .................................. 11-8
Table 12.1 Drillholes Removed from Database (Located Incorrectly) ....................................... 12-3
Table 12.2 Drillholes Edited to Match Geo-referenced Historical Sections and Paper
Drill Logs ..................................................................................................................... 12-3
Table 12.3 2012 Drillholes with Corrected Z Collar Values ........................................................ 12-4
Table 13.1 Documented Production at Granduc Mine – 1971 to 1984 ................................... 13-1
Table 13.2 Chemical Content Data .............................................................................................. 13-3
Table 13.3 Ore Hardness Data ..................................................................................................... 13-4
Table 13.4 Summary of Locked Cycle Flotation Test Results..................................................... 13-8
Table 13.5 Final Concentrate Minor Element Data ..................................................................... 13-8
Table 13.6 Summary of Davis Tube Test Results........................................................................ 13-9
Table 13.7 Mineral Content of the Sample............................................................................... 13-11
Table 13.8 Mineral Fragmentation of the Sample ................................................................... 13-12
Table 14.1 Granduc Deposit – Raw Drillhole Statistics .............................................................. 14-2
Table 14.2 Copper Summary Statistics of Capped and Composited Drillhole Data,
by Domain as a Function of Cu% ............................................................................ 14-12
Table 14.3 Gold Summary Statistics of Capped and Composited Drillhole Data,
by Domain as a Function of Au g/t ......................................................................... 14-13
Table 14.4 Silver Summary Statistics of Capped and Composited Drillhole Data,
by Domain as a Function of Ag g/t ......................................................................... 14-14
Table 14.5 Average Density by Domain .................................................................................... 14-15
Table 14.6 Copper Variogram Parameter File .......................................................................... 14-21
Table 14.7 Gold Variogram Parameter File .............................................................................. 14-22
Table 14.8 Silver Variogram Parameter File ............................................................................. 14-23
Table 14.9 Block Model Configuration ...................................................................................... 14-25
Table 14.10 List of Cell Attributes in Block Model...................................................................... 14-25
Table 14.11 All Block Model Statistics for Copper, Weighted to Block Tonnage,
as a Function of Cu% ............................................................................................... 14-28
Table 14.12 All Block Model Statistics for Gold, Weighted to Block Tonnage,
as a Function of Au g/t ............................................................................................ 14-28
Table 14.13 All Block Model Statistics for Silver, Weighted to Block Tonnage,
as a Function of Ag g/t ............................................................................................ 14-29
Table 14.14 All Block Model Statistics for Density, Weighted to Block Tonnage,
as a Function of tonnes per m3 .............................................................................. 14-29
Table 14.15 Un-mined Block Model Statistics for Copper, Weighted to Block Tonnage,
as a Function of Cu% ............................................................................................... 14-30
Table 14.16 Un-mined Block Model Statistics for Gold, Weighted to Block Tonnage,
as a Function of Au g/t ............................................................................................ 14-30
Table 14.17 Un-mined Block Model Statistics for Silver, Weighted to Block Tonnage,
as a Function of Ag g/t ............................................................................................ 14-31
Table 14.18 Un-mined Block Model Statistics for Density, Weighted to Block Tonnage,
Table 14.19 Un-mined Block Model Statistics for Magnetite, Weighted to Block Tonnage,
Table 14.20 Metal Price and Recovery Parameters for Copper Equivalent Calculation .......... 14-41
Table 14.21 Measured Resource for the Granduc Copper Deposit Main Zone ....................... 14-42
Table 14.22 Indicated Resource for the Granduc Copper Deposit Main Zone......................... 14-42
Table 14.23 Inferred Resource for the Granduc Copper Deposit Main Zone ........................... 14-42
Table 14.24 Inferred Resource for the Granduc Copper Deposit North Zone .......................... 14-43
Table 14.25 Measured and Indicated Resource for the Granduc Copper Deposit .................. 14-43
Table 14.26 Inferred Resource for the Granduc Copper Deposit .............................................. 14-44
ix 1256370100-REP-R0002-03

Table 14.27 Inferred Magnetite Resource for the Granduc Copper Deposit at
CuEq >= 0.8% .......................................................................................................... 14-44
Table 16.1 Recommended Ground Support for Mine Development.......................................... 16-2
Table 16.2 Sub-level Cave Stope Design Parameters................................................................. 16-5
Table 16.3 Borehole Open Stope Design Parameters ................................................................ 16-6
Table 16.4 Granduc Underground Mine Mobile Equipment Fleet........................................... 16-10
Table 16.5 Granduc Mine Underground Workforce Summary ................................................ 16-14
Table 17.1 Major Design Criteria.................................................................................................. 17-3
Table 18.1 Design Basis Criteria .................................................................................................. 18-6
Table 18.2 Summary of Tailings Storage Facility ........................................................................ 18-8
Table 19.1 Estimated HMS Logistics Costs ................................................................................. 19-6
Table 20.1 Preliminary List of BC Government Authorizations, Licenses and/or Permits........ 20-5
Table 20.2 Preliminary List of Federal Government Authorizations, Licenses
and/or Permits ........................................................................................................... 20-6
Table 21.1 Initial Capital Cost Summary...................................................................................... 21-2
Table 21.2 Sustaining Capital Cost Summary ............................................................................. 21-2
Table 21.3 Mining Capital Cost Breakdown ($ million) ............................................................... 21-5
Table 21.4 Processing Capital Cost Breakdown (Base Case) ($ million) ................................... 21-6
Table 21.5 Processing Capital Cost Breakdown (Alternate Case) ($ million) ............................ 21-6
Table 21.6 TSF Capital Cost Breakdown (Base Case) ($ million) ............................................... 21-6
Table 21.7 TSF Capital Cost Breakdown (Alternative Case) ($ million) ..................................... 21-7
Table 21.8 Infrastructure Capital Cost Breakdown ($ million) ................................................... 21-7
Table 21.9 Indirect Capital Cost Breakdown ($ million) ............................................................. 21-7
Table 21.10 Owner’s Capital Cost Breakdown ($ million)............................................................. 21-8
Table 21.11 Contingency Capital Cost Breakdown (Base Case) ($ million)................................. 21-8
Table 21.12 Contingency Capital Cost Breakdown (Alternative Case) ($ million) ....................... 21-8
Table 21.13 Closure Capital Cost Breakdown ($ million) ............................................................. 21-8
Table 21.14 Operating Cost Summary ........................................................................................... 21-9
Table 21.15 Mining Operating Costs .............................................................................................. 21-9
Table 21.16 Mining Manpower Schedule ................................................................................... 21-10
Table 21.17 Processing Plant Operating Cost – Copper Concentrate (LOM) ........................... 21-11
Table 21.18 Processing Plant Manpower – Copper Concentrate (Annually) ............................ 21-12
Table 21.19 Processing Plant Operating Cost – Magnetite Concentrate (LOM) ...................... 21-12
Table 21.20 Processing Plant Manpower – Magnetite Concentrate (Annually) ....................... 21-13
Table 21.21 G&A Operating Costs ............................................................................................... 21-13
Table 21.22 TSF Operating Costs ................................................................................................ 21-14
Table 22.1 Metal Production from Granduc Copper Project....................................................... 22-2
Table 22.2 Summary of Pre-tax NPV, IRR and Payback by Scenario ......................................... 22-4
Table 22.3 Components of the Various Taxes (Base Case) ........................................................ 22-8
Table 22.4 Summary of Base Case Post-tax Financial Results .................................................. 22-8
Table 25.1 NI 43-101 Copper, Gold and Silver Mineral Resources ........................................... 25-1
Table 25.2 NI 43-101 Magnetite Mineral Resources at CuEq ≥0.8%........................................ 25-1
Table 26.1 Recommended Future Work Cost ............................................................................. 26-5
x 1256370100-REP-R0002-03

LIST OF FIGURES
Figure 1.1 Property Location Map ................................................................................................. 1-2

Figure 1.2 Base Case Mill Flowsheet .......................................................................................... 1-12
Figure 1.3 General Site Layout .................................................................................................... 1-14
Figure 4.1 Location of Property ..................................................................................................... 4-2
Figure 4.2 Castle Granduc Property – Land Tenure .................................................................... 4-3
Figure 4.3 Castle Granduc Property – Crown Granted Mineral Claims ....................................... 4-4
Figure 6.1 Generalized Long Section of the Granduc Mine ......................................................... 6-2
Figure 6.2 Granduc Airborne Magnetics Map ............................................................................... 6-6
Figure 6.3 Granduc Electromagnetic Anomalies Map.................................................................. 6-7
Figure 7.1 Regional Geology of the Stewart Complex .................................................................. 7-2
Figure 7.2 Local Geology of the Granduc Property ....................................................................... 7-3
Figure 7.3 Property Geology, Granduc North Sheet ..................................................................... 7-4
Figure 7.4 Property Geology, Granduc South Sheet ..................................................................... 7-5
Figure 7.5 Legend for Property Geology Maps ............................................................................. 7-6
Figure 7.6 Granduc Deposit – B1 Orebody: Massive Pyrrhotite-Chalcopyrite-Pyrite
in a Strongly Foliated Calcareous, Chloritic Mafic Tuff ............................................. 7-12
Figure 7.7 Granduc Deposit – B1 Orebody: F2 Fold Closure in Massive Sulphides ................. 7-12
Figure 7.8 Granduc Deposit – B1 Orebody: Remobilized Pyrrhotite-Chalcopyrite
with Brecciated Tuff/Chert ......................................................................................... 7-13
Figure 10.1 Plan Map of Granduc Drillholes by Year.................................................................... 10-4
Figure 11.1 Granduc 2012 Field Blank Performance .................................................................. 11-9
Figure 11.2 Granduc 2012 Drill Program – OREAS 50c Cu Results ........................................ 11-10
Figure 11.3 Granduc 2012 Drill Program – OREAS 50c Au Results ........................................ 11-11
Figure 11.4 Granduc 2012 Drill Program – OREAS 153a Cu Results...................................... 11-11
Figure 11.5 Granduc 2012 Drill Program – OREAS 153a Au Results ...................................... 11-12
Figure 11.6 Granduc 2012 Drill Program – OREAS 54Pa Cu Results ...................................... 11-12
Figure 11.7 Granduc 2012 Drill Program – OREAS 54Pa Au Results ...................................... 11-13
Figure 11.8 Granduc 2012 Drill Program – OREAS 96 Cu Results .......................................... 11-13
Figure 11.9 Granduc 2012 Drill Program – Bias Chart for Field Duplicate Assays ................. 11-14
Figure 12.1 3D View Looking North at Section 12100N (3D Drillholes in Yellow) ..................... 12-2
Figure 12.2 Tide Tunnel Camp – Access to Tide Tunnel and Historical Mill Facility .................. 12-6
Figure 12.3 106 Cross-cut Drift, 2600 Level – Cu-Sulphide Mineralization ............................... 12-6
Figure 12.4 Leduc Exploration Camp ............................................................................................ 12-7
Figure 12.5 Diamond Drill Location and Service Tent .................................................................. 12-8
Figure 12.6 Core Logging Tent at the Leduc Camp ...................................................................... 12-8
Figure 12.7 Granduc Copper Mine – 2810 Portal Access ........................................................... 12-9
Figure 13.1 Test Parameters and Flowsheets .............................................................................. 13-5
Figure 13.2 Open Circuit Flotation Test Results ........................................................................... 13-7
Figure 13.3 Test Parameters and Flowsheets ........................................................................... 13-13
Figure 13.4 Summary of Rougher Flotation and Magnetic Separation Tests .......................... 13-14
Figure 13.5 Summary of Cleaner Test Conditions and Results ................................................ 13-16
Figure 13.6 Summary of Locked Cycle Flotation Test 20 ......................................................... 13-18
Figure 14.1 Copper Log Histogram of Raw Drillhole Data ........................................................... 14-4
Figure 14.2 Gold Log Histogram of Raw Drillhole Data ................................................................ 14-5
Figure 14.3 Silver Log Histogram of Raw Drillhole Data .............................................................. 14-6
Figure 14.4 Sample Length Histogram of Raw Drillhole Data ..................................................... 14-7
Figure 14.5 3D Plan View of High-grade Wireframes (~3 km strike length) ............................... 14-9
Figure 14.6 Granduc Contact Profile – Domain 100................................................................. 14-10
xi 1256370100-REP-R0002-03

Figure 14.7 Granduc Contact Profile – Domain 501................................................................. 14-11
Figure 14.8 Specific Gravity Histogram of Raw Drillhole Data .................................................. 14-15
Figure 14.9 Copper Downhole Variogram for Domain 501....................................................... 14-17
Figure 14.10 Copper Variogram for Domain 501 ........................................................................ 14-18
Figure 14.11 Section 6230800N Showing Block Model and Composite Copper
Grades Looking North ............................................................................................. 14-33
Figure 14.12 Swath Plot Copper Grade Estimation – Easting .................................................... 14-35
Figure 14.13 Swath Plot Copper Grade Estimation - Northing .................................................... 14-36
Figure 14.14 Swath Plot Copper Grade Estimation - Elevation................................................... 14-37
Figure 14.15 Long-section Looking East – Granduc Block Model Classification
(~3 km strike length) ............................................................................................... 14-39
Figure 14.16 Grade-Tonnage Curve for Measured + Indicated Resources................................ 14-45
Figure 14.17 Grade-Tonnage Curve for Total Inferred Resources .............................................. 14-46
Figure 14.18 Grade-Tonnage Curve for Main Zone Inferred Resources .................................... 14-47
Figure 14.19 Grade-Tonnage Curve for North Zone Inferred Resources ................................... 14-48
Figure 14.20 Grade-Tonnage Curve for Inferred Magnetite Resource
(at a 0.8% CuEq Cut-off) .......................................................................................... 14-49
Figure 16.1 Granduc Mine – Longitudinal View............................................................................ 16-4
Figure 16.2 Longitudinal SLC Mining – Section View ................................................................... 16-5
Figure 16.3 Conventional BHOS – Section View........................................................................... 16-6
Figure 17.1 Base Case Mill Flowsheet .......................................................................................... 17-2
Figure 17.2 Alternate Case Mill Flowsheet ................................................................................... 17-7
Figure 18.1 Plant Site General Layout .......................................................................................... 18-2
Figure 18.2 Project General Arrangement .................................................................................... 18-3
Figure 18.3 TSF General Arrangement .......................................................................................... 18-5
Figure 18.4 Mine Access Route .................................................................................................. 18-13
Figure 18.5 SBT Site .................................................................................................................... 18-16
Figure 19.1 Copper Supply Gap ..................................................................................................... 19-2
Figure 19.2 Rolling Three-year Copper Price................................................................................. 19-3
Figure 22.1 Pre-tax Undiscounted Annual and Cumulative Cash Flow ....................................... 22-3
Figure 22.2 Sensitivity Analysis of Base Case Pre-tax NPV at 8% Discount Rate ....................... 22-5
Figure 22.3 Sensitivity Analysis of Pre-tax Base Case IRR ........................................................... 22-6
GLOSSARY
UNITS OF MEASURE
above mean sea level ..................................................................................................................................... amsl
acre .................................................................................................................................................................. ac
ampere............................................................................................................................................................. A
annum (year) ................................................................................................................................................... a
billion ............................................................................................................................................................... B
billion tonnes ................................................................................................................................................... Bt
billion years ago .............................................................................................................................................. Ga
British thermal unit ......................................................................................................................................... BTU
centimetre ....................................................................................................................................................... cm
xii 1256370100-REP-R0002-03

cubic centimetre.............................................................................................................................................. cm3
cubic feet per minute ...................................................................................................................................... cfm
cubic feet per second...................................................................................................................................... ft3/s
cubic foot ......................................................................................................................................................... ft3
cubic inch......................................................................................................................................................... in3
cubic metre ...................................................................................................................................................... m3
cubic yard ........................................................................................................................................................ yd3
Coefficients of Variation .................................................................................................................................. CVs
day.................................................................................................................................................................... d
days per week.................................................................................................................................................. d/wk
days per year (annum) .................................................................................................................................... d/a
dead weight tonnes ......................................................................................................................................... DWT
decibel adjusted .............................................................................................................................................. dBa
decibel ............................................................................................................................................................. dB
degree .............................................................................................................................................................. °
degrees Celsius ............................................................................................................................................... °C
diameter .......................................................................................................................................................... ø
dollar (American) ............................................................................................................................................. US$
dollar (Canadian) ............................................................................................................................................. Cdn$
dry metric ton .................................................................................................................................................. dmt
foot ................................................................................................................................................................... ft
gallon ............................................................................................................................................................... gal
gallons per minute (US) .................................................................................................................................. gpm
Gigajoule .......................................................................................................................................................... GJ
gigapascal ........................................................................................................................................................ GPa
gigawatt ........................................................................................................................................................... GW
gram ................................................................................................................................................................. g
grams per litre ................................................................................................................................................. g/L
grams per tonne .............................................................................................................................................. g/t
greater than ..................................................................................................................................................... >
hectare (10,000 m2) ....................................................................................................................................... ha
hertz ................................................................................................................................................................. Hz
horsepower ...................................................................................................................................................... hp
hour .................................................................................................................................................................. h
hours per day ................................................................................................................................................... h/d
hours per week ................................................................................................................................................ h/wk
hours per year ................................................................................................................................................. h/a
inch .................................................................................................................................................................. in
kilo (thousand)................................................................................................................................................. k
kilogram ........................................................................................................................................................... kg
kilograms per cubic metre .............................................................................................................................. kg/m3
kilograms per hour .......................................................................................................................................... kg/h
kilograms per square metre ........................................................................................................................... kg/m2
kilometre .......................................................................................................................................................... km
kilometres per hour ......................................................................................................................................... km/h
kilopascal ......................................................................................................................................................... kPa
kilotonne .......................................................................................................................................................... kt
xiii 1256370100-REP-R0002-03

kilovolt.............................................................................................................................................................. kV
kilovolt-ampere ................................................................................................................................................ kVA
kilovolts ............................................................................................................................................................ kV
kilowatt ............................................................................................................................................................ kW
kilowatt hour .................................................................................................................................................... kWh
kilowatt hours per tonne ................................................................................................................................. kWh/t
kilowatt hours per year ................................................................................................................................... kWh/a
less than .......................................................................................................................................................... <
litre ................................................................................................................................................................... L
litres per minute .............................................................................................................................................. L/m
megabytes per second .................................................................................................................................... Mb/s
megapascal ..................................................................................................................................................... MPa
megavolt-ampere ............................................................................................................................................ MVA
megawatt ......................................................................................................................................................... MW
metre................................................................................................................................................................ m
metres above sea level .................................................................................................................................. masl
metres Baltic sea level .................................................................................................................................... mbsl
metres per minute........................................................................................................................................... m/min
metres per second .......................................................................................................................................... m/s
microns ............................................................................................................................................................ µm
milligram .......................................................................................................................................................... mg
milligrams per litre .......................................................................................................................................... mg/L
millilitre ............................................................................................................................................................ mL
millimetre ......................................................................................................................................................... mm
million .............................................................................................................................................................. M
million bank cubic metres............................................................................................................................... Mbm3
million bank cubic metres per annum ........................................................................................................... Mbm3/a
million tonnes .................................................................................................................................................. Mt
minute (plane angle) ....................................................................................................................................... '
minute (time) ................................................................................................................................................... min
month ............................................................................................................................................................... mo
ounce ............................................................................................................................................................... oz
pascal............................................................................................................................................................... Pa
centipoise ........................................................................................................................................................ mPa·s
parts per million .............................................................................................................................................. ppm
parts per billion ............................................................................................................................................... ppb
percent ............................................................................................................................................................. %
pound(s) ........................................................................................................................................................... lb
pounds per square inch .................................................................................................................................. psi
revolutions per minute .................................................................................................................................... rpm
second (plane angle) ....................................................................................................................................... "
second (time)................................................................................................................................................... s
short ton (2,000 lb) ......................................................................................................................................... st
short tons per day ........................................................................................................................................... st/d
short tons per year .......................................................................................................................................... st/a
specific gravity ................................................................................................................................................. SG
square centimetre ........................................................................................................................................... cm2
xiv 1256370100-REP-R0002-03

square foot ...................................................................................................................................................... ft2
square inch ...................................................................................................................................................... in2
square kilometre ............................................................................................................................................. km2
square metre ................................................................................................................................................... m2
three-dimensional ........................................................................................................................................... 3D
tonne (1,000 kg) (metric ton) ......................................................................................................................... t
tonnes per day ................................................................................................................................................. t/d
tonnes per hour ............................................................................................................................................... t/h
tonnes per year ............................................................................................................................................... t/a
tonnes seconds per hour metre cubed .......................................................................................................... ts/hm3
volt ................................................................................................................................................................... V
week ................................................................................................................................................................. wk
weight/weight .................................................................................................................................................. w/w
wet metric ton.................................................................................................................................................. wmt
ABBREVIATIONS AND ACRONYMS

acid rock drainage .......................................................................................................................................... ARD
Acme Analytical Laboratories Ltd. .................................................................................................................. AcmeLabs
Activation Laboratories Ltd. ............................................................................................................................ ActLabs
AGAT Laboratories Ltd. ................................................................................................................................... AGAT
archaeological impact assessment................................................................................................................ AIA
archaeological overview assessment ............................................................................................................ AOA
Association of Cost Engineering International ............................................................................................... AACE
atomic absorption spectroscopy .................................................................................................................... AAS
atomic emission spectroscopy ....................................................................................................................... AES
Bandstra Transportation Systems Ltd. .......................................................................................................... Bandstra
Bell Copper Corporation.................................................................................................................................. Bell Copper
Bond abrasion index ....................................................................................................................................... Ai
Bond ball work index ....................................................................................................................................... BWi
borehole open stoping .................................................................................................................................... BHOS
British Columbia Environmental Assessment Act ......................................................................................... BCEAA
British Columbia Geographic System ............................................................................................................. BCGS
British Columbia .............................................................................................................................................. BC
Canadian Development Expense ................................................................................................................... CDE
Canadian Environmental Assessment Act ..................................................................................................... CEAA
Canadian Exploration Expense ....................................................................................................................... CEE
Canadian Institute of Mining, Metallurgy, and Petroleum ............................................................................ CIM
capital cost estimate....................................................................................................................................... CAPEX
Castle Resources Inc. ..................................................................................................................................... Castle
copper equivalent ........................................................................................................................................... CuEq
cost and freight ............................................................................................................................................... CFR
CRU Strategies ................................................................................................................................................ CRUS
Cumulative Expenditures Account ................................................................................................................. CEA
cumulative net cash flow ................................................................................................................................ CNCF
Cumulative Tax Credit Account....................................................................................................................... CTCA
xv 1256370100-REP-R0002-03

cut-off grade .................................................................................................................................................... COG
Davis Magnetic Tube Tester ........................................................................................................................... DT
Department of Environmental Conservation ................................................................................................. DEC
Department of Fish and Game ....................................................................................................................... F&G
Department of Natural Resources ................................................................................................................. DNR
Department of Transportation and Public Facilities...................................................................................... DOT&PF
digital terrain models ...................................................................................................................................... DTMs
engineering, procurement and construction management .......................................................................... EPCM
environmental assessment certificate........................................................................................................... EAC
Environmental Assessment Office ................................................................................................................. EAO
environmental impact statement ................................................................................................................... EIS
Environmental Management Plan .................................................................................................................. EMP
Fisheries and Oceans Canada........................................................................................................................ DFO
G&T Metallurgy Services Ltd. ......................................................................................................................... G&T
general and administrative ............................................................................................................................. G&A
global positioning system ............................................................................................................................... GPS
Granduc Mine Project ..................................................................................................................................... the Project
Granduc Property ............................................................................................................................................ the Property
heating, ventilation, and air conditioning ...................................................................................................... HVAC
heavy media separation ................................................................................................................................. HMS
inductively coupled plasma ............................................................................................................................ ICP
internal rate of return ..................................................................................................................................... IRR
International Organization for Standardization ............................................................................................. ISO
inverse distance squared ............................................................................................................................... ID2
Kriging Efficiency ............................................................................................................................................. KE
life-of-mine ....................................................................................................................................................... LOM
light detection and ranging ............................................................................................................................. LiDAR
load-haul-dump ............................................................................................................................................... LHD
London Metal Exchange ................................................................................................................................. LME
Long Lake Hydro Project ................................................................................................................................. LLHP
metal leaching ................................................................................................................................................. ML
Metal Mining Effluent Regulations ................................................................................................................. MMER
methyl isobutyl carbinol .................................................................................................................................. MIBC
Ministry of Environment .................................................................................................................................. MOE
Ministry of Forests, Lands, and Natural Resource Operations ..................................................................... MFLNRO
Ministry of Health ............................................................................................................................................ MOH
Ministry of Mines, Energy and Natural Gas ................................................................................................... MEM
Ministry of Transportation and Infrastructure ............................................................................................... MTI
National Instrument 43-101 .......................................................................................................................... NI 43-101
nearest neighbour ........................................................................................................................................... NN
net cash flow ................................................................................................................................................... NCF
net present value ............................................................................................................................................ NPV
net smelter royalty .......................................................................................................................................... NSR
nitrogen oxides ................................................................................................................................................ NOx
non-potentially acid generating ...................................................................................................................... NPAG
North American Datum ................................................................................................................................... NAD
North American Free Trade Agreement ......................................................................................................... NAFTA
xvi 1256370100-REP-R0002-03

North American Topographic Sheet ............................................................................................................... NTS
operating cost estimate .................................................................................................................................. OPEX
optical emission spectrometry ....................................................................................................................... OES
ordinary kriging................................................................................................................................................ OK
particulate matter ........................................................................................................................................... PM
potassium amyl xanthate ............................................................................................................................... PAX
potentially acid generating ............................................................................................................................. PAG
PricewaterhouseCoopers LLP ......................................................................................................................... PwC
project description .......................................................................................................................................... PD
Qualified Person .............................................................................................................................................. QP
quality assurance ............................................................................................................................................ QA
quality control .................................................................................................................................................. QC
recommended practices ................................................................................................................................. RPs
run-of-mine ...................................................................................................................................................... ROM
SAG mill comminution..................................................................................................................................... SMC
semi-autogenous grinding .............................................................................................................................. SAG
Sequential Gaussian Simulation .................................................................................................................... SGS
SRK Consulting (Canada) Inc. ........................................................................................................................ SRK
Standards Council of Canada ......................................................................................................................... SCC
Stewart Bulk Terminals ................................................................................................................................... SBT
sub-level cave .................................................................................................................................................. SLC
sulphur oxides ................................................................................................................................................. SOx
tailings storage facility .................................................................................................................................... TSF
theoretical slope of regression ....................................................................................................................... ZZ*
total suspended solids .................................................................................................................................... TSS
treatment and refining charges...................................................................................................................... TC/RCs
Universal Transverse Mercator ...................................................................................................................... UTM
US Forest Service ............................................................................................................................................ USFS
volatile organic compounds............................................................................................................................ VOCs
volcanogenic massive sulphide...................................................................................................................... VMS
waste rock storage facility .............................................................................................................................. WRSF
Work Breakdown Structure ............................................................................................................................ WBS
x-ray diffraction................................................................................................................................................ XRD
x-ray fluorescence ........................................................................................................................................... XRF
ELEMENTS AND CHEMICAL SYMBOLS

aluminum ........................................................................................................................................................ Al
antimony .......................................................................................................................................................... Sb
arsenic ............................................................................................................................................................. As
barium ............................................................................................................................................................. Ba
beryllium .......................................................................................................................................................... Be
bismuth ............................................................................................................................................................ Bi
boron................................................................................................................................................................ B
cadmium .......................................................................................................................................................... Cd
calcium ............................................................................................................................................................ Ca
cerium .............................................................................................................................................................. Ce
chromium ........................................................................................................................................................ Cr
xvii 1256370100-REP-R0002-03

cobalt ............................................................................................................................................................... Co
copper .............................................................................................................................................................. Cu
gallium ............................................................................................................................................................. Ga
gold .................................................................................................................................................................. Au
indium .............................................................................................................................................................. In
iron oxide (hematite) ....................................................................................................................................... Fe2O3
iron ................................................................................................................................................................... Fe
iron ................................................................................................................................................................... Fe
lanthanum ....................................................................................................................................................... La
lead .................................................................................................................................................................. Pb
lithium .............................................................................................................................................................. Li
magnesium ...................................................................................................................................................... Mg
manganese ...................................................................................................................................................... Mn
mercury ............................................................................................................................................................ Hg
molybdeum ...................................................................................................................................................... Mo
nickel ............................................................................................................................................................... Ni
phosphorus...................................................................................................................................................... P
potassium ........................................................................................................................................................ K
rubidium .......................................................................................................................................................... Rb
scandium ......................................................................................................................................................... Sc
selenium .......................................................................................................................................................... Se
silver ................................................................................................................................................................ Ag
sodium ............................................................................................................................................................. Na
strontium ......................................................................................................................................................... Sr
sulphur ............................................................................................................................................................. S
tantalum .......................................................................................................................................................... Ta
tellurium .......................................................................................................................................................... Te
thallium ............................................................................................................................................................ Tl
thorium ............................................................................................................................................................ Th
tin ..................................................................................................................................................................... Sn
titanium ........................................................................................................................................................... Ti
tungsten........................................................................................................................................................... W
uranium ........................................................................................................................................................... U
vanadium ......................................................................................................................................................... V
yttrium.............................................................................................................................................................. Y
zinc ................................................................................................................................................................... Zn
zirconium ......................................................................................................................................................... Zr
xviii 1256370100-REP-R0002-03

1.0 SUMMARY
1.1 INTRODUCTION
Castle Resources Inc. (Castle) retained Tetra Tech to prepare a National Instrument 43-
101 (NI 43-101) technical report and preliminary economic assessment (PEA) for the
Granduc Mine Project (the Project). The Granduc Property (the Property) is located in
northwest British Columbia (BC), approximately 52 km north of Stewart, BC.
The Project is an underground copper, silver, and gold mine with processing facilities that
will use some existing infrastructure in place from the historical mine operations, as well
as new infrastructure. Mineralized material will be processed up to a maximum
production rate of 8,500 t/d, or 3.1 Mt/a, over a 15-year mine life. Preliminary test work
also suggests that it may be feasible to produce a heavy media and/or steel grade
magnetite concentrate.
The effective date of this report is February 28, 2013; the effective date of the resource
estimate is December 12, 2012.
General information for the Project is summarized in Table 1.1.
Table 1.1 General Project Information
Description Unit Amount
Estimated Mineral Resources (Measured + Indicated) Mt 11.32
Estimated Mineral Resources (Inferred) Mt 44.63
Life-of-mine (LOM) years 15
Milling Rate (peak) t/d 8,500
Total Project Capital Cost Cdn$ million 499
Average Overall Operating Cost Cdn$/t milled 39.78
Pre-tax Net Present Value (NPV) at an 8% Discount Rate Cdn$ million 392
Pre-tax Internal Rate of Return (IRR) % 20.9
Pre-tax Payback Period years 4
Note: Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Inferred mineral resources have a high degree of uncertainty as to their existence, and a great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of
an Inferred Resource will ever be upgraded to a higher category.
All dollar figures presented are stated in Canadian dollars unless otherwise noted.
Castle Resources Inc. 1-1 1256370100-REP-R0002-03

Preliminary Economic Assessment of the Granduc Copper
Project, Northern British Columbia

1.2 PROPERTY DESCRIPTION
The Property is located in northwestern BC, Canada, approximately 52 km northwest of
Stewart, BC and Hyder, Alaska. It is located on North American Topographic Sheet (NTS)
Map 104B/1E, 1W and 8W and is centered approximately at 130°20’ west and 56°15’
north.
Figure 1.1 shows the location of the Property.
Figure 1.1 Property Location Map
130’00 W
N
37
Tide Lake
Camp
Granduc Road
Glacier Highway
66’00N
37a
Granduc Property
Hyder Stewart
A LA S KA B R I TI SH
37 COLU MBI A
Revillagigedo
Island
Ketchikan
16
16
Smithers
Kilometres
0
Dixon 20 40 60
Terrace
Entrance
Prince
Rupert
16
Property
Cities, Towns
Roads / Highways
International boundary Kitimat


The Property comprises two groups of mineral tenures:
 Sixty-four Crown Granted mineral claims that total 1,090.97 ha in area, all
located in the Skeena Mining Division
 Thirty BC mineral claims that total 12,590.86 ha registered to Castle (BC
Mineral Tenure Client Number 248521).
The Property was acquired from Bell Copper Corporation (Bell Copper) in 2010. All claims
and tenures comprising the Property are 100% owned by Castle, subject to pre-existing
royalties. Several different tenures on the Property are subject to net smelter return
(NSR) royalties.
1.3 HISTORY
Mineralization on Granduc Mountain was first reported in 1931, and copper showings
were subsequently staked in 1951. Granby Mining Company acquired the Property in
1952 and conducted surface and underground work as Granduc Mines Ltd., focusing on
identification of a mineable resource.
Newmont Mining Corporation Ltd. entered into a financing agreement with Granby Mining
Company in 1963; mine development commenced in 1965 with the construction of the
Granduc Tunnel from the plant site westward to the underground mine workings.
Production began in 1971 at a production rate of 2,000 t/d, and in 1973 reached
7,000 t/d. The ore body was mined using sublevel caving methods until 1978, and was
then modified to target higher-grade ore. It was acquired by Esso Minerals Canada in
1979. However, sustained low copper prices led to closure of the mine in 1984 and
reverted to ownership with Granduc Mines Ltd. (a subsidiary of Hecla Mining Company).
Following mine closure, surface infrastructure in the mill area was removed, development
areas were re-contoured and reclaimed, underground mine workings were allowed to
flood, and the entrance to the Granduc Tunnel was closed.
Castle acquired sole ownership of the Project in 2010, and has since conducted
approximately 63,000 m of additional exploration drilling at the Property.
1.4 GEOLOGICAL SETTING AND MINERALIZATION
The Granduc deposit straddles the South Unuk shear zone, which marks the boundary
between Upper Triassic Stuhini metavolcanic and metasedimentary rocks to the west,
and the mainly volcanic rocks of the Lower to Middle Jurassic Hazelton Group to the east.
The deposit is largely hosted by sheared rocks of the western Triassic series. It has been
interpreted as a Besshi-type volcanogenic massive sulphide (VMS) copper deposit.
The deposit itself consists of multiple high-grade massive and semi-massive sulphide
lenses that have undergone varying amounts of deformation. These are divided into a
Main Zone and a North Zone. Previous mining was only performed on the Main Zone.


1.5 EXPLORATION AND DRILLING
The Property was discovered in 1931, and was explored up until 1968, when mining
activities began. During mining, exploration continued in an effort to increase reserves
as well as better understand the Property. The mine closed in 1984 and since then has
been explored intermittently. Castle acquired the Property in 2010 and has run a
summer/fall drill program every year. In 2012, Castle drilled more than 22 km of drill
core in both the South and North Zones.
1.6 MINERAL RESOURCE ESTIMATE
Tetra Tech has estimated a new NI 43-101 compliant mineral resource for the Granduc
copper deposit. The resource estimate was completed by Robert Morrison, Ph.D.,
MAusIMM (CP), P.Geo., an independent Qualified Person (QP) as defined in NI 43-101.
The effective date of this resource estimate is December 12, 2012.
The Granduc mineral resource tabulation (Measured, Indicated and Inferred) is reported
in metric tonnes (1 t = 1,000 kg), grades are in copper (%), gold (g/t), silver (g/t), and
magnetite (%). Gold and silver metals are reported as troy ounces. Copper metal is
reported as imperial pounds. Magnetite metal is reported as metric tonnes. Density is
reported as specific gravity (i.e. t/m3).
The Granduc copper deposit is comprised of both a Main Zone and a North Zone. The
Main Zone consists of Measured, Indicated, and Inferred Resources, while the North
Zone consists of an Inferred Resource. The resource estimate was prepared using
Datamine™ Studio 3 (v. 3.21.7164.0) software. The estimate was conducted utilizing
wireframes to domain high- and low-grade sections of the deposit, and ordinary kriging
(OK) to interpolate grade for copper, gold, and silver. Density was also estimated using
inverse distance squared (ID2) estimation. For reporting purposes, a copper equivalent
(CuEq) grade was calculated using the following parameters:
 copper price = US$3.60/lb

 gold price = US$1,260.00/oz with a gold recovery of 88%
 silver price = US$28.00/oz with a silver recovery of 68%.
Historically mined sections of the deposit were removed from the current resource using
a wireframe generated from historical documentation of the limits of mining. Wireframes
were also generated from digital contours provided by Castle to constrain the deposit to
topography and glacial ice-depth.
The Granduc deposit mineral resources were classified according to the Canadian
Institute of Mining, Metallurgy, and Petroleum (CIM) Definition Standards for Mineral
Resources and Mineral Reserves. For classification, consideration was given to drillhole
and assay density, statistics and results of variography and related search volumes,
confidence in the source data, confidence in the geological modeling, and mining history.


Wireframe boundaries were generated in order to classify the Measured and Indicated
portions of the deposit.
In addition to the December 12, 2012 copper, gold, and silver resource estimate, Tetra
Tech estimated a new NI 43-101 mineral resource for magnetite at the Granduc deposit,
with an effective date of February 28, 2013. This estimation utilized existing iron assays,
a strong iron-magnetite correlation, and recently conducted magnetite assays. The
magnetite grades were estimated, as data density and availability allowed, into
approximately 70% of the existing copper domains of the deposit. The remaining 30% of
the copper resource did not have the necessary magnetite data to support estimation at
this time, and represents an opportunity for future increases in the magnetite resource.
In accordance with CIM standards, the magnetite estimation for the Granduc Copper
deposit is classified entirely as an Inferred Resource.
Table 1.2 to Table 1.8 show the mineral resources of the Granduc copper deposit’s Main
and North Zones.
Table 1.2 Measured Resource for the Granduc Copper Deposit Main Zone
CuEq
Resource Cut-off Density Tonnes Cu Au Ag Cu Au Ag
Category (%) (t/m3) (Mt) (Mlb) (oz) (oz) (%) (g/t) (g/t)
Measured 0.4 2.94 5.21 180.2 28,452 2,278,368 1.57 0.17 13.6
0.6 2.94 5.20 180.1 28,400 2,276,287 1.57 0.17 13.6
0.8 2.94 5.16 179.6 28,208 2,266,080 1.58 0.17 13.7
1.0 2.94 5.07 178.1 27,769 2,236,112 1.59 0.17 13.7
1.2 2.94 4.81 172.7 26,422 2,132,407 1.63 0.17 13.8
1.4 2.93 4.13 155.8 22,939 1,849,381 1.71 0.17 13.9
1.6 2.93 3.15 127.4 17,708 1,419,946 1.84 0.18 14.0
1.8 2.93 2.10 92.7 12,006 948,783 2.00 0.18 14.1
2.0 2.92 1.34 64.3 7,789 602,454 2.18 0.18 14.0


Table 1.3 Indicated Resource for the Granduc Copper Deposit Main Zone
CuEq
Indicated 0.4 2.95 6.23 189.1 33,596 2,272,311 1.38 0.17 11.4
0.6 2.95 6.22 189.0 33,559 2,270,418 1.38 0.17 11.4
0.8 2.95 6.16 188.2 33,241 2,250,397 1.39 0.17 11.4
1.0 2.95 5.96 185.0 32,227 2,183,541 1.41 0.17 11.4
1.2 2.95 5.43 174.0 29,376 1,992,071 1.45 0.17 11.4
1.4 2.94 3.94 136.2 21,421 1,491,492 1.57 0.17 11.8
1.6 2.94 2.28 87.9 12,510 870,679 1.75 0.17 11.9
1.8 2.92 1.23 53.0 6,819 454,691 1.96 0.17 11.5
2.0 2.90 0.67 32.1 3,720 240,727 2.17 0.17 11.2
Table 1.4 Inferred Resource for the Granduc Copper Deposit Main Zone
CuEq
Inferred 0.2 2.91 129.66 1,585.4 170,303 13,075,475 0.56 0.04 3.1
0.4 3.01 42.68 1,074.0 170,289 13,074,148 1.14 0.12 9.5
0.6 3.04 32.39 967.9 170,251 13,070,601 1.36 0.16 12.6
0.8 3.05 30.52 940.3 169,666 13,032,863 1.40 0.17 13.3
1.0 3.05 29.46 921.5 166,275 12,832,741 1.42 0.18 13.5
1.2 3.05 26.82 866.4 152,723 11,803,411 1.47 0.18 13.7
1.4 3.03 20.38 707.6 117,914 9,141,987 1.58 0.18 14.0
1.6 3.02 14.00 523.5 82,567 6,413,947 1.70 0.18 14.3
1.8 3.02 7.39 305.5 44,184 3,473,320 1.88 0.19 14.6
2.0 3.01 3.66 167.0 22,011 1,755,792 2.07 0.19 14.9


Table 1.5 Inferred Resource for the Granduc Copper Deposit North Zone
CuEq
Inferred 0.2 2.94 34.97 567.5 118,104 3,143,941 0.74 0.11 2.8
0.4 3.03 14.68 470.7 98,072 2,392,577 1.45 0.21 5.1
0.6 3.03 14.27 466.7 97,539 2,374,319 1.48 0.21 5.2
0.8 3.03 14.11 464.4 97,315 2,362,709 1.49 0.22 5.2
1.0 3.03 14.00 462.5 96,801 2,340,696 1.50 0.22 5.2
1.2 3.04 12.37 426.5 89,041 2,077,206 1.56 0.22 5.2
1.4 3.05 10.18 369.8 77,505 1,729,422 1.65 0.24 5.3
1.6 3.06 7.28 283.0 58,229 1,230,933 1.76 0.25 5.3
1.8 3.08 4.09 176.2 32,217 671,020 1.95 0.25 5.1
2.0 3.11 2.33 110.1 17,145 370,246 2.14 0.23 4.9
Table 1.6 Measured and Indicated Resource for the Granduc Copper Deposit
CuEq
Measured + 0.4 2.94 11.44 369.2 62,048 4,550,679 1.46 0.17 12.4
Indicated 0.6 2.94 11.42 369.1 61,959 4,546,705 1.47 0.17 12.4
0.8 2.94 11.32 367.7 61,449 4,516,477 1.47 0.17 12.4
1.0 2.94 11.04 363.1 59,996 4,419,653 1.49 0.17 12.5
1.2 2.94 10.24 346.6 55,798 4,124,478 1.54 0.17 12.5
1.4 2.94 8.07 292.0 44,360 3,340,873 1.64 0.17 12.9
1.6 2.93 5.43 215.4 30,219 2,290,625 1.80 0.17 13.1
1.8 2.92 3.33 145.7 18,825 1,403,474 1.99 0.18 13.1
2.0 2.92 2.01 96.4 11,510 843,181 2.18 0.18 13.1


Table 1.7 Inferred Resource for the Granduc Copper Deposit
CuEq
Inferred 0.2 2.92 164.62 2,152.9 288,407 16,219,415 0.59 0.05 3.1
0.4 3.01 57.36 1,544.7 268,361 15,466,725 1.22 0.15 8.4
0.6 3.04 46.66 1,434.6 267,790 15,444,919 1.40 0.18 10.3
0.8 3.04 44.63 1,404.7 266,982 15,395,572 1.43 0.19 10.7
1.0 3.05 43.46 1,383.9 263,076 15,173,437 1.44 0.19 10.9
1.2 3.05 39.19 1,292.9 241,764 13,880,617 1.50 0.19 11.0
1.4 3.04 30.56 1,077.4 195,419 10,871,409 1.60 0.20 11.1
1.6 3.03 21.28 806.6 140,797 7,644,879 1.72 0.21 11.2
1.8 3.04 11.48 481.7 76,401 4,144,340 1.90 0.21 11.2
2.0 3.05 5.99 277.1 39,156 2,126,038 2.10 0.20 11.0
Table 1.8 Inferred Magnetite Resource for the Granduc Copper Deposit at CuEq ≥0.8%
Magnetite
Resource Cut-off Density Tonnes Magnetite Magnetite
Category (%) (t/m3) (Mt) (kt) (%)
Inferred 1.0 3.03 38.8 4,968 12.8
2.0 3.03 38.1 4,958 13.0
2.8 3.03 37.1 4,934 13.3
3.0 3.03 36.8 4,925 13.4
4.0 3.03 34.5 4,844 14.0
5.0 3.03 31.5 4,707 14.9
10.0 3.07 19.7 3,890 19.7
15.0 3.09 16.2 3,448 21.3
20.0 3.14 9.2 2,198 23.9
1.7 MINERAL PROCESSING AND METALLURGICAL TESTING
Over 15 Mt of ore was processed and approximately 180,000 t of copper was produced
at the Granduc Mine from 1971 to 1984. The estimated average head grade of copper
was approximately 1.29%. Approximately 95% of the feed copper was recovered to a
final concentrate. When the mine was shutdown in 1984, the Granduc processing facility
was removed and reclaimed and no facilities, except the mill foundations, remain on site.
ALS Metallurgy (formerly G&T Metallurgy Services Ltd. (G&T)) in Kamloops, BC, conducted
two metallurgical testing programs between 2011 and 2012, on samples representative
of the Main Zone. While the objective of the 2011 program was to conduct a preliminary
assessment and develop a processing flowsheet for the Granduc sample, the 2012
program was aimed at investigating the potential for recovering magnetite.


A global composite was constructed for the program which assayed at approximately
1.5% copper, 0.2 g/t gold, and 9 g/t silver. Grindability tests indicated the sample to be
relatively soft in respect to breakage in a ball mill (Bond ball work index (BWi) of
11.7 kWh/t), but moderately hard in terms of breakage in a semi-autogenous grinding
(SAG) mill (derived A*b value was 37.5, while the t10 at 1 kWh/t value was 28.7). The
sample was also of low abrasivity (Bond abrasion index (Ai) measured at 0.1234). These
results are amenable with the Project’s presumed low electricity costs. From a limited
number of open circuit rougher and cleaner flotation tests, a primary grind sizing
targeting a nominal 160 µm K80 and a regrind discharge sizing targeting a nominal
20 µm K80 were selected for locked cycle testing. The reagent consumption was low, as
the locked cycle tests were conducted at natural pH, and required less than 10 g/t
potassium amyl xanthate (PAX) collector, and less than 85 g/t methyl isobutyl carbinol
(MIBC) frother.
Results from duplicate locked cycle flotation tests indicated that, on average, after three
stages of cleaning, and using a nominal primary grind size of 160 µm K80 and a nominal
regrind size of 20 µm K80, approximately 92% of the feed copper, 66% of the feed gold,
and 91% of the feed silver was recovered to a copper concentrate containing
approximately 30% copper, 2.8 g/t gold, and 189 g/t silver. After two stages of cleaning,
the slightly better performing of the two locked cycle flotation test showed that
approximately 95% of the feed copper, 79% of the feed gold, and 91% of the feed silver
could be recovered into a final concentrate containing approximately 27% copper, 2.7 g/t
gold, and 177 g/t silver. There were no concentrations of deleterious elements that were
found to be above typical levels that would hinder the marketability of the copper
concentrate.
A mineralogical analyses of the sample by optical microscopy indicated that magnetite

accounted for approximately 21% of the feed mass in the sample. At the nominal
flotation feed size of 167 µm K80, the mineralogical analysis suggested that magnetite
was approximately 40% liberated. Approximately 48% of the magnetite particles were
locked with non-sulphide gangue, 10% locked with chalcopyrite, and the rest locked with
pyrrhotite, pyrite, and in multiphase. This fragmentation data would suggest that the
sample would need to be ground finer to achieve a high grade magnetite concentrate.
Without any further regrinding, Davis tube magnetic concentrates assayed between 52
and 57% iron, and between 1.2 and 1.5% sulphur. With regrinding, a magnetite
concentrate grading about 68% iron, 1.5% sulphur, and 0.03% copper was produced.
The regrind discharge sizing for the test that produced this result was measured at about
19% retained upon a 38 µm screen.
With an aggressive bulk sulphide flotation flowsheet and a two-stage magnetic

separation procedure, with a regrind size of 41 µm K80, the highest grade magnetite
concentrate contained approximately 70% iron and 0.4% sulphur. This is a higher level
of sulphur than normally accepted by the steel industry and would incur penalties, though
these would likely be offset by premium for the high iron content.


There is an additional opportunity for magnetite to be produced as heavy media for the
North American coal industry. A market study suggests the realized price for this product
may be significantly higher than that for product sold to the steel industry.
1.8 MINING METHODS
The Project comprises two resource zones, the largest of which is the Main Zone, located
in the immediate vicinity of the old mine workings. The second resource zone, the North
Zone, is an extension of the Main Zone. Mining of the Main Zone will take priority over
the North Zone in the development and production schedules, to achieve a sustainable,
peak production rate as early in the LOM as possible. The total diluted, mineable
resource in both areas is 40.28 Mt, which will result in an overall LOM of 15 years, with a
peak sustained mining rate of 8,500 t/d (3.1 Mt/a).
The sub-level cave (SLC) mining method is the preferred method for the Project. This
method will account for approximately 80% of all mining. The remaining material will be
mined using the borehole open stoping (BHOS) method. The combination of both of
these methods will result maximum recovery of the economic resource on the Property.
The underground mine will be primarily accessed via the 17 km tide tunnel located at a
nominal elevation of 800 m. All workers and materials will be transported to the mine by
rail in this heading using personnel and flat train cars. All major mine infrastructure,
including the underground garage, shops, and offices will be located on the 800 m Level,
along with the underground crusher, transfer conveyor, and resource and waste bins.
The resource handling system at Granduc will vary by zone and area, but in general, the
resource will first be mucked from the stopes to nearby resource passes and then loaded
into haulage trucks by chute. Then, all resource will be transported to the coarse
resource bin dump points on the 800 m Level. This bin will feed the underground
crusher on the 760 m Level, from where it will be moved to the train loading bins by
transfer conveyor. Trains will then move the resource from the underground loading
stations to surface via the tide tunnel, where it will be transported to the mill feed
stockpile.
1.9 RECOVERY METHODS
The concentrator will be located at surface approximately 17 km from the Granduc
deposit. The concentrator will process the mineralized material at a nominal rate of
8,500 t/d with an availability of 92% (365 d/a), for a total expected plant feed production
of 3,102,500 t/a.
There are two proposed cases:
 Base Case: production of a copper concentrate (with silver/gold credits) and a



 Alternative Case: production of a copper concentrate (with silver/gold credits)
with no magnetite concentration.
The process flowsheet for the base case (Figure 1.2) includes SAG, conventional
flotation, and magnetic separation circuits. Concentrate dewatering will include
thickening followed by pressure filtration for the copper concentrate, and rotary disk
filtration plus rotary drying for the magnetite concentrate. The concentrates will likely
then be trucked 52 km by road to a marine load out facility near Stewart, BC, where they
will be transferred to their selected markets.
While the alternate case would reduce the mill footprint, simplify the process flowsheet,
and lower both operating and capital costs, it would also not allow for any potential of
added profit from production of a magnetite concentrate.
Some of the foreseen potential risks of the Project include:
 Area weather conditions – may result in the fluctuation of annual plant

availability.
 Primary grinding circuit efficiency – The throughput and overall mill efficiency
may be negatively affected if target grind sizes are not met in the primary
grinding circuit; accordingly, it will be important to ensure that pre-crushed mill
feed meets its target product size.
 Magnetite feed grades – variable feed grades may render the magnetite circuit
inefficient. The circuit could be bypassed if significantly lower magnetite
recoveries are observed.
 The response of ancillary Granduc zones to the flowsheet – no recent
metallurgical test work on other zones has been completed to date. Response
may be worse than Main Zone.
Some of the foreseen potential opportunities of the Project include:
 The selected primary grinding circuit – reduces the mill foot print without a loss
in efficiency.
 Magnetite feed grades – variable feed grades may increase the value of the
 The response of ancillary Granduc zones to the flowsheet – no recent
metallurgical test work on other zones has been completed to date. Response
may be better than Main Zone.
 Target grind sizes – optimization test work may suggest coarser target grind
sizes would improve overall mill efficiency and lower project costs.
 Copper concentrate moisture content – lower moisture content would reduce
storage and shipping costs.


Figure 1.2 Base Case Mill Flowsheet
Rougher Flotation
Cyclone
Cluster
Sag Mill
Scavenger Flotation
Crushed Plant
Feed
Stockpile Pump
Magnetic
Drum
Regrind Mill
1st Cleaner 1st Cleaner

Flotation Scavenger Flotation Regrind Mill
Pump
2nd Cleaner
Flotation
Thickener Thickener
Disk Filter
Pressure
Filter
Dryer
Copper Tailings Pond Magnetite

Concentrate Concentrate
1.10 PROJECT INFRASTRUCTURE
The Project site is currently accessible via Highway 37A from Stewart, BC to Hyder, Alaska
then by the existing Granduc Road which terminates at the Project site (Figure 1.3). The
Granduc Road is comprised of segments within Canada (BC) and the US (Alaska). From
the Canada/US border, east of Hyder, the Granduc Road follows an 18 km route through
Alaska to the Canada/US border. From this location, the remaining 29 km is within BC
and continues north to the Project site. This route will be used during all phases of
Project development to transport personnel, equipment, and supplies between Stewart
and the Project site. The road will also be used to transport of copper and magnetite
concentrate via truck to Stewart Bulk Terminals (SBT) for shipment to destination


markets in Asia. To enable safe, efficient, year-round access to the Project site, sections
of the route will require upgrade.
At the mine site, buildings to support the administrative and operational functions of the
Project include the mine dry, administration area, assay laboratory, surface maintenance
shop and warehouse, all housed within a single structure, as an extension of the process
plant. The purpose in limiting the number and extent of surface structures is to optimize
operational and logistical efficiencies given the high snow loads experienced in the
Project area.
Additional surface facilities on site will include an electrical substation, fuel storage and
distribution area, a road maintenance yard as well as a permanent accommodations
camp to house 225 personnel. On-site access and secondary roads will be included to
provide access around the plant and accommodation complexes.
Power supply to support the Project’s anticipated production level load of 25 MW is

proposed to be provided via an interconnection to the planned Long Lake Hydro Project
(LLHP) powerhouse under development by Regional Power Corporation. A 138 kV tie-in is
proposed at the Long Lake substation; the power transmission line route will largely
follow the existing Granduc Road, allowing for easier construction and maintenance
access, running north to the Project site. The proposed 138 kV power transmission line
corridor will be approximately 23 km long, plus an allowance for isolated protection for
snow avalanches.
Site services to support operations include a fresh water supply to be drawn from
groundwater sources. The fresh water drawn from the intake system will be collected in
an above grade storage water tank and distributed for potable water feed, process
makeup, firewater, and general use water. Other ancillary site services include treatment
of sewage at the plant and accommodations areas, collection, and management of
surface water runoff on site, management of domestic waste via incineration, as well as
a service vehicle fleet for the maintenance of roads and other surface infrastructure
components.


Figure 1.3 General Site Layout
130° 20' 00" W 130° 10' 00" W 130° 00' 00" W
N
56° 15' 00" N
Berend
on Gla
cier
Waste Rock Plant Site Mitre

Mountain Betty
Storage Facility Glacier
STEWART
MOUNTAINS
Summit Basin TSF Bear River

Ridge
Granduc
So
ut
h Underground Tunnel
Summit
Mine Workings Basin
Le
Access Road
du
c
Gl
Granduc Road
ac
ier
Divide
Lake
Current Seasonal
Flooding Extent
56° 10' 00" N
Salmon
Glacier
Mount
Dilworth
Mount
Kilometres Bayard
Mount
Lindeborg
0 2 4 6
Long
Lake
Proposed
Silver
Transmission Line Corridor Lakes
Highway 37A
Mineral Claim 407212
Infrastructure Area
56° 05' 00" N
Summit Basin Tailings Corridor Slate
RIVER
Mountain
Existing
BEAR
Secondary (Gravel) Road
Glacier
Granduc Tunnel
Lake
Long Lake
Granduc Road
Powerhouse Site

Preliminary Economic Assessment of the Granduc Copper Project,

1.10.1 TAILINGS STORAGE FACILITY
The principal design objectives for the tailings storage facility (TSF) are to ensure
protection of the regional groundwater and surface waters both during operations and in
the long-term (after closure), and to achieve effective reclamation at mine closure. The
TSF design is based on an 8,500 t/d underground operation over a period of 16 years.
The proposed TSF is located approximately 4 km north of the Salmon Glacier within the
Summit Basin.
The tailings produced from the mineral process will be transferred by pipeline to the TSF
for deposition. Tailings will be deposited in two cross-valley impoundments located south
of the plant complex. The plant complex will produce two types of tailings of which one is
considered to be non-potentially acid generating (NPAG) while the other is considered to
be potentially acid generating (PAG). The TSF is designed to store 36.9 Mt of tailings
(32.5 Mt NPAG and 4.4 Mt PAG) for the base case. For the alternative case, the TSF will
be required to store approximately 38.6 Mt of tailings (34.2 Mt NPAG and 4.4 Mt PAG).
PAG tailings will be deposited in a fully double-lined facility located approximately 1.5 km
southeast of the plant complex. NPAG tailings will be deposited in an unlined facility
located immediately downstream of the PAG tailings storage area.
The TSF will be connected to the plant complex by a linear corridor for the tailings and
reclaim pipelines, access road, and power supply. A reclaim barge will be located within
the NPAG tailings impoundment area of the TSF and a pipeline will be used to transport
reclaim water from the TSF to the plant complex.
The TSF starter embankment will be constructed during the pre-production phase and is
sized to store the estimated volume of tailings produced during the first year of
operation, plus the supernatant pond volume with allowances for wave run-up protection,
post-seismic settlement, sloping beaches and storm storage. The TSF embankments will
be constructed in stages with each stage providing the required capacity for the period
until the next stage is complete. The final configuration of the TSF allows for storage of
the NPAG and PAG tailings, plus the estimated supernatant pond volume and freeboard
allowances for storm storage and wave run-up protection.
1.11 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT
No previous environmental studies have been conducted for this Project. The Project is
subject to review under the British Columbia Environmental Assessment Act (BCEAA) and
the Canadian Environmental Assessment Act (CEAA) 2012. The review process is likely
to be co-led by the BC Environmental Assessment Office (EAO) and the Canadian
Environmental Assessment Agency. If the Project is approved, an environmental
assessment certificate (EAC) and Federal Ministerial Decision on the significance of the
Project, in addition to determination of enforceable conditions for mitigation and follow-
up, will be required to proceed with permitting.
Following environmental approvals, various authorizations, licenses, and permits will be

required from provincial and federal government agencies. A preliminary list of provincial


and federal government requirements are provided in Section 20.0. These will be further
scoped during discussions with government agencies during the pre-application stage of
the environmental assessment process.
Consultation and engagement activities on the Project with government, First Nations,
and stakeholders began in 2011. The preliminary list of project stakeholders likely to
have an interest in the Project, and whether early stage engagement or consultation
activities have been initiated, is provided in Section 20.0. Consultation and/or
engagement activities with these stakeholders have primarily been in the form of face-to-
face meetings, telephone conversations, and email communications.
Section 20.0 provides a summary of initial interests and issues that have been identified
to date by Aboriginal groups potentially affected by the Project.
The proposed Project has the potential to affect the biophysical, social, economic,
cultural, and health environments. Baseline data collection and assessment of project-
related effects will be completed, in addition to potential avoidance or mitigation
measures. Consultation will be undertaken with potentially affected First Nations,
communities, public, and stakeholders as relevant to the proposed Project.
1.12 CAPITAL AND OPERATING COST ESTIMATES
1.12.1 CAPITAL COST ESTIMATE
The total estimated initial capital cost for the design, construction, and installation and
commissioning for all facilities and equipment is $499 million for the base case. The
base case assumes that the Project will produce copper concentrate (with gold and silver
credit) and metallurgical magnetite.
In addition to the base case, Tetra Tech evaluated an alternate case that assumed that
no magnetite will be produced and the Project will produce copper concentrate (with gold
and silver credit) only. The total estimated pre-production cost for the alternative case is
$490 million. Closure expenses and working capital costs have been excluded from the
capital cost estimate and are included in the financial analysis provided in Section 22.0.
Closure expenses are expected to total $20 million.
A summary of the initial capital cost is provided in Table 1.9 for the base case and
alternative case. A summary of the sustaining capital cost for the base case and
alternative case is shown in Table 1.10.


Table 1.9 Initial Capital Cost Summary
Initial Capital ($ million)
Base Case Alternative
Level 1 (Copper + Case
No. Description Magnetite Steel) (Copper Only)
Direct Capital Costs
1 Mining 168.7 168.7
2 Processing Plant 67.7 60.2
3 TSF 27.8 27.8
4 Infrastructure and Services 70.7 70.7
Total Direct Capital 334.9 327.4
Indirect, Owners, Provisions Capital Costs
5 Indirect Capital Cost 77.9 77.9
6 Owner's Cost 16.3 16.3
7 Contingency 69.9 68.4
Total Indirect, Owner's, Contingency 164.1 162.6
Total Initial Capital Cost 499.0 490.0
Table 1.10 Sustaining Capital Cost Summary
Sustaining Capital ($ million)
Base Case Alternative
1 Mining 179.9 179.9
3 TSF 33.1 33.2
Total Sustaining Capital Cost 241.2 241.3


1.12.2 OPERATING COST ESTIMATE
The total LOM operating cost is estimated to average $39.78/t milled for the base case
and $38.89/t milled for the alternative case. The estimate includes mining, processing,
general and administrative (G&A), tailings management, and environmental monitoring
costs.
Operating costs over the LOM are estimated at $1,635.4 million for the base case and
$1,599.4 million for the alternative case (excluding sensitivities). The operating cost
summary is tabulated in Table 1.11.
Table 1.11 Operating Cost Summary
Base Case Alternative Case
Unit Cost Unit Cost
Description ($/t milled) ($/t milled)
Mining 23.76 23.76
Processing (Copper Concentrate) 7.66 7.66
Processing (Magnetite Concentrate) 0.89 0.00
G&A 6.52 6.52
TSF 0.85 0.85
Environmental 0.10 0.10
Total Operating Cost 39.78 38.89
1.13 ECONOMIC ANALYSIS
Tetra Tech conducted an economic evaluation of the Project, which incorporates all the
relevant capital, operating, working, and sustaining costs. The evaluation was based on
a pre-tax financial model and was calculated in Canadian dollars. All costs and revenues
are assumed to occur in the middle of the year. For the LOM and 40 Mt mineable
reserves, the following pre-tax financial parameters were calculated for the base case:
 20.9% IRR
 4.0-year payback on $499 million initial capital
 $392 million NPV at an 8% discount rate.
Castle commissioned PricewaterhouseCoopers LLP (PwC) in Toronto, ON to prepare a tax

model for the post-tax economic evaluation of the Project with the inclusion of applicable
income and mining taxes (see Section 22.0).
The following post-tax financial parameters were calculated for the base case:
 17.8% IRR


The base case uses the three-year trailing average prices, as of December 31, 2012, for
copper, gold, and silver of US$3.65/lb, US$1,480/oz, and US$28/oz, respectively.
Based on a marketing study performed by CRU Strategies (CRUS) (2012a and 2012b),
the price of metallurgical magnetite was $122/t. The base case exchange rate was set
at US$0.99:Cdn$1.00.
Sensitivity analyses were developed to evaluate the sensitivity of project economics to

the key parameters. The Project NPV is most sensitive to copper price and exchange rate
followed by operating costs and initial capital. The Project IRR is most sensitive to
exchange rate and copper price followed by initial capital and operating costs. Both NPV
and IRR are less sensitive to gold, silver, and magnetite prices.
1.14 RECOMMENDATIONS
Based on the work carried out in this PEA and the resultant economic evaluation, this
study should be followed by further technical and economic studies leading to a
prefeasibility study, in order to further assess the economic viability of the Project.
Recommended activities for geology, mineral processing, mining operations, project

infrastructure, tailings management, and environmental planning and assessment are
provided in Section 26.0.


2.0 INTRODUCTION
Castle is a mineral resource company based in Toronto, Ontario. It is a publicly listed and
Canadian-registered company. Castle is listed on the TSXV under the symbol CRI.
Castle’s head office is located at 20 Victoria Street, 8th Floor, Toronto, Ontario, M5C 2N8.
The sole focus of Castle at this time is the exploration and development of the Granduc
copper deposit, a past-producing mine.
This technical report and PEA is on the Granduc Copper Project located in northwestern
BC, situated approximately 52 km northwest of Stewart, BC.
2.1 TERMS OF REFERENCE AND PURPOSE OF REPORT
Tetra Tech was retained by Castle to produce a NI 43-101 technical report and PEA on
the Project. This technical report conforms to the standards set out in NI 43-101
Standards and Disclosure for Mineral Projects and has been prepared in accordance with
Form 43-101F1.
A summary of the QPs responsible for this report is provided in Table 2.1. The following
QPs conducted site visits of the Property:
 Robert Sinclair Morrison, Ph.D., MAusIMM (CP), P.Geo. conducted a site visit
from August 14 to 15, 2012.
 Andre Gagnon, P.Eng., conducted a site visit from May 28 to 31, 2012.
 Garth Liukko, P.Eng., conducted a site visit from May 28 to 31, 2012.
Table 2.1 Summary of QPs
Report Section Company QP
1.0 Summary Tetra Tech Sign-off by Section
2.0 Introduction Tetra Tech Mike McLaughlin, P.Eng.
3.0 Reliance on Other Experts Tetra Tech Mike McLaughlin, P.Eng.
4.0 Property Description and Location Tetra Tech Robert Sinclair Morrison,
Ph.D., MAusIMM (CP), P.Geo.
5.0 Accessibility, Climate, Local Resources, Tetra Tech Robert Sinclair Morrison,
Infrastructure, and Physiography Ph.D., MAusIMM (CP), P.Geo.
6.0 History Tetra Tech Robert Sinclair Morrison,
7.0 Geological Setting and Mineralization Tetra Tech Robert Sinclair Morrison,
table continues…


Report Section Company QP
8.0 Deposit Types Tetra Tech Robert Sinclair Morrison,
9.0 Exploration Tetra Tech Robert Sinclair Morrison,
10.0 Drilling Tetra Tech Robert Sinclair Morrison,
11.0 Sample Preparation, Analyses, and Tetra Tech Robert Sinclair Morrison,
Security Ph.D., MAusIMM (CP), P.Geo.
12.0 Data Verification Tetra Tech Robert Sinclair Morrison,
13.0 Mineral Processing and Metallurgical Tetra Tech Cameron McKinnon, P.Eng.
Testing
14.0 Mineral Resource Estimates Tetra Tech Robert Sinclair Morrison,
15.0 Mineral Reserve Estimates Tetra Tech Garth Liukko, P.Eng.
16.0 Mining Methods Tetra Tech Garth Liukko, P.Eng.
Jacques Ouellet, Ph.D., P.Eng.
17.0 Recovery Methods Tetra Tech Cameron McKinnon, P.Eng.
18.0 Infrastructure Tetra Tech Dharshan Kesavanathan, P.Eng.
Andre Gagnon, P.Eng.
19.0 Market Studies and Contracts Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng.
20.0 Environmental Studies, Permitting, and Tetra Tech Monica Danon-Shaffer, Ph.D., P.Eng.
Social or Community Impact
21.0 Capital and Operating Costs Tetra Tech Mike McLaughlin, P.Eng.
22.0 Economic Analysis Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng.
23.0 Adjacent Properties Tetra Tech Robert Sinclair Morrison,
24.0 Other Relevant Data and Information Tetra Tech Mike McLaughlin, P.Eng.
25.0 Interpretation and Conclusions Tetra Tech Sign-off by Section
26.0 Recommendations Tetra Tech Sign-off by Section
27.0 References Tetra Tech Sign-off by Section
2.1.1 UNITS OF MEASUREMENT
All units of measurement in this technical report and resource estimate are in metric,
unless otherwise stated.
The monetary units are in Canadian dollars, unless otherwise stated.


3.0 RELIANCE ON OTHER EXPERTS
The QPs who prepared this report relied on information provided by experts who are not
QPs. The relevant QPs believe that it is reasonable to rely on these experts, based on the
assumption that the experts have the necessary education, professional designations,
and relevant experience on matters relevant to the technical report
 Robert Sinclair Morrison, Ph.D., MAusIMM (CP), P.Geo., relied upon Brad
Leonard, P.Geo., Exploration Manager at Castle, for information and matters
relating to property agreements (Section 4.3), environmental liabilities (Section
4.4), regulatory requirements (Section 4.5), and Crown Granted claims rights
(Sections 4.1 and 4.2). The reliance is based on personal communications with
Mr. Leonard confirming information.
 Sabry Abdel Hafez, Ph.D., P.Eng., relied on CRU Strategies (CRUS) concerning
copper concentrate and magnetite marketing terms and logistics relevant to this
technical report. The reliance is based on a letter to Castle entitled “Release
Letter regarding CRU Strategies report, CS Reference number: 430576, January
2013” and dated January 11, 2013 and a supplementary letter to Castle
Resources Inc. dated February 19, 2013.
 Sabry Adbel Hafez, Ph.D., P.Eng., also relied on PwC concerning tax matters
relevant to this report. The reliance is based on a letter to Castle entitled
“Assistance with insert and review of the income and mineral tax portions of the
economic analysis prepared by Tetra Tech WEI Inc. ("Tetra Tech") in connection
with the PEA Study Report (the "Report") on Castle Resources' ("Castle") Granduc
Mine (the "Project")” and dated March 18, 2013.


4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
The Property is located in northwestern BC, Canada, approximately 52 km northwest of
Stewart, BC and Hyder, Alaska. It is located on North American Topographic Sheet (NTS)
Map 104B/1E, 1W and 8W and is centered approximately at 130° 20' west and 56° 15'
north.
Castle holds subsurface rights to 30 mineral claims that total 12,590.86 ha and 64
Crown granted mineral claims that total 1,090.97 ha in the Project area. Existing and
proposed Project components in the upper Leduc River watershed and surface
infrastructure and facilities associated with mineral claim 407212 are within Castle’s
mineral tenure area. Six mineral claims owned by other tenure holders’ overlap with
portions of the Granduc Tunnel. Figure 4.1 shows the location of the Property; Figure 4.2
and Figure 4.3 show the Property’s BC mineral claims and Crown granted mineral claims.


Figure 4.1 Location of Property
130’00 W
N
37
Tide Lake
Camp
Granduc Road
Glacier Highway
66’00N
37a
Granduc Property
Hyder Stewart
A LA S KA BRITISH
37 COLU MBI A
Revillagigedo
Island
Ketchikan
16
16
Smithers
Kilometres
0
Dixon 20 40 60
Terrace
Entrance
Prince
Rupert
16
Property
Cities, Towns
Roads / Highways
International boundary Kitimat


Figure 4.2 Castle Granduc Property – Land Tenure
420000
6234000
N
415486 415487
407212
415488 415489
527164
517191
508887
415482 415483
508826
508890 508892
508705 527314
508888
527299
508898 415484 415485
508775
508889
527315
508777
899271
508891 508703
Kilometres
0 2 4 6
508777
508893 508894
Crown GrantedClaims
BC MiningTenures


Figure 4.3 Castle Granduc Property – Crown Granted Mineral Claims
415000 417000 419000
6234000
L6616 N
L6697
L6696
L6591 L6695
L6592
L6590
L6694
L6589
L6586 L6585
L6588 L6597
6232000
L6591 L6592 L6583

L6584
L6580
L6579 L6578 L6577 L6615
L6573 L6614
L6574 L6575 L6576
L6613
L6598 L6570
L6569 L6568 L6612
L6510
L6599
6230000
L6566
11
L66
L6567
L6658
L6602
L6565 L6564
7
65
L6
L6562
8
L6563
65
L6603
L6
L6621
L6666 L6672 L6601
5
65
L6
L6665 L6620
L6600
4
65
L6617
L6
L6664
L6619
6228000
L6661 L6618 Metres

L6663
0 500 1000 1500
L6670
North Zone
South Zone
Granduc Crown Granted
Claims


4.2 PROPERTY DESCRIPTION
The Property comprises two groups of overlapping mineral tenures. These tenures
include a contiguous block of 64 Crown Granted mineral claims that total 1,090.97 ha,
which overlaps some of the 30 BC mineral claim titles which cover 12,590.86 ha. The
area of the Crown Claims will reduce the actual area of the overlapping BC mining claims.
The Granduc Mine lies on BC mining claims 527314, 527164, 527315 (with the
drainage tunnel terminating in claim 508705 and the tide tunnel extending east across
claims 508775, 508898, 508828, 415484, 415485, 415483, 517191, 508890, and
508892). The mine also lies on Crown Granted Mineral Claims L.6584, L.6578, L.6577,
L.6575, L.6576, L.6570, L.6569, L.6568, L.6586, and L.6567 (with the drainage tunnel
extending through L.6574 and 6573, and the tide tunnel extending through L.6675,
L.6612, L.6613, and L.6614). Table 4.1 and Table 4.2 list the claims and mineral
tenures referred to above.
Table 4.1 Castle Granduc Crown Mineral Claims
Lot Land Lot NTS BCGS Area
Number Number District Name Map Map (ha)
1 6562 CASSIAR V.K. NO. 13 104B01W 104B029 18.18
2 6563 CASSIAR V.K. NO. 14 104B01W 104B029 18.18
3 6564 CASSIAR V.K. NO. 12 104B01W 104B029 18.18
4 6565 CASSIAR V.K. NO. 11 104B01W 104B029 18.18
5 6566 CASSIAR V.K. NO. 9 104B01W 104B029 19.59
6 6567 CASSIAR V.K. NO. 10 104B01W 104B029 19.17
7 6568 CASSIAR VAUGHN K. NO.5 104B01W 104B029 20.40
9 6570 CASSIAR GRANDUC FR. 104B01W 104B029 14.28
10 6573 CASSIAR GRANDUC NO.1 104B01W 104B029 17.20
14 6577 CASSIAR LOLA NO.2 104B01W 104B029 20.90
26 6589 CASSIAR MC Q NO.2 104B01W 104B029 19.85
table continues…


Lot Land Lot NTS BCGS Area
Number Number District Name Map Map (ha)
29 6592 CASSIAR MC Q 104B01W 104B029 20.90
30 6593 CASSIAR AUDRO NO.3 104B01W 104B029 2.57
35 6598 CASSIAR SOLAR NO. 8 104B01W 104B029 13.67
36 6599 CASSIAR BLUE NO.4 104B01W 104B029 20.56
37 6600 CASSIAR FANNY NO.1 104B01W 104B029 18.10
38 6601 CASSIAR FANNY NO.2 104B01W 104B029 20.90
39 6602 CASSIAR DAL FRACTION 104B01W 104B029 14.90
40 6603 CASSIAR BRYCE FRACTION 104B01W 104B029 13.68
41 6610 CASSIAR MARG NO.2 104B01W 104B029 11.80
42 6611 CASSIAR BLEND NO.4 104B01W 104B029 16.80
46 6615 CASSIAR BENT FRAC 104B01W 104B029 18.11
47 6616 CASSIAR MCQ NO.4 104B01W 104B029 9.01
48 6617 CASSIAR VAUGHN K NO. 4 104B01W 104B029 20.90
52 6621 CASSIAR BELLE NO.3 104B01W 104B029 7.43
53 6654 CASSIAR REX NO. 10 FRACTION 104B01W 104B029 9.69
58 6663 CASSIAR REX NO.1 104B01W 104B029 20.90
59 6664 CASSIAR REX NO.2 104B01W 104B029 20.90
Total Crown Claims 1,090.97
Note: BCGS – British Columbia Geographic System


Table 4.2 Castle Granduc British Columbia Mineral Tenures List
Tenure Claim Owner Map Issue Good To Area
Number Name (%) Number Date Date Status (ha)
407212 GD4 248521 (100%) 104B030 2003/Dec/13 2013/Dec/13 GOOD 150.0000
415482 TON-1 248521 (100%) 104B029 2004/Nov/09 2016/Mar/01 GOOD 500.0000
415483 TON-2 248521 (100%) 104B029 2004/Nov/09 2016/Mar/01 GOOD 500.0000
415484 TON-3 248521 (100%) 104B029 2004/Nov/09 2016/Mar/01 GOOD 500.0000
415485 TON-4 248521 (100%) 104B029 2004/Nov/09 2016/Mar/01 GOOD 500.0000
415486 PEARSON 1 248521 (100%) 104B029 2004/Nov/08 2016/Mar/01 GOOD 500.0000
508703 - 248521 (100%) 104B 2005/Mar/10 2016/Mar/01 GOOD 1,062.3730
508705 - 248521 (100%) 104B 2005/Mar/10 2016/Mar/01 GOOD 953.4870
508775 - 248521 (100%) 104B 2005/Mar/11 2016/Mar/01 GOOD 143.9760
508777 - 248521 (100%) 104B 2005/Mar/11 2016/Mar/01 GOOD 360.0980
508828 - 248521 (100%) 104B 2005/Mar/11 2016/Mar/01 GOOD 899.3060
508887 LEDUC SILVER NW 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 431.6140
508888 LEDUC SILVER W1 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 431.7970
508889 LEDUC SILVER W2 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 431.9810
508890 TUNNEL 1 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 449.7220
508891 LEDUC SILVER SW1 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 432.1650
508892 TUNNEL 2 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 449.7240
508893 LEDUC SILVER SW2 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 450.3690
508894 LEDUC SILVER S 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 450.3620
508895 LEDUC SILVER SE 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 360.2390
508898 - 248521 (100%) 104B 2005/Mar/14 2016/Mar/01 GOOD 377.9260
517191 AGE 248521 (100%) 104B 2005/Jul/12 2016/Mar/01 GOOD 89.9450
table continues…


Tenure Claim Owner Map Issue Good To Area
Number Name (%) Number Date Date Status (ha)
527164 ESKAY GOLD 248521 (100%) 104B 2006/Feb/06 2016/Mar/01 GOOD 17.9950
527299 LUDUC MINERALS 248521 (100%) 104B 2006/Feb/08 2016/Mar/01 GOOD 53.9900
527314 GRANDUC NORTH 248521 (100%) 104B 2006/Feb/09 2016/Mar/01 GOOD 413.7820
527315 GRANDUC SOUTH 248521 (100%) 104B 2006/Feb/09 2016/Mar/01 GOOD 162.0160
899271 TROJAN1 248521 (100%) 104B 2011/Sep/22 2013/Sep/22 GOOD 17.9914
Total British Columbia Mineral Claims 12,590.8584


4.3 PROPERTY AGREEMENTS
All claims and tenures comprising the Property, and listed in Table 4.1 and Table 4.2, are
100% owned by Castle, subject to pre-existing royalties. The Property was acquired from
Bell Copper in 2010. Several different tenures on the Property are subject to NSRs.
The Property is subject to a 2% NSR, payable to Glencairn Gold Corporation, now Central
Sun Mining Inc., which is a subsidiary company of B2Gold Corp. The NSRs can be
purchased by Castle for $500,000 for the first 1% and $1 million for the remaining 1%.
Teuton Resources Corp. will retain a 1.5% NSR on the Silver Leduc parcel and on Bell
Copper’s four claims to the north of the Silver Leduc claims (415486, 415487, 415488,
and 415489). The Granduc Crown Granted claims are excluded from the NSR
agreement.
The Granduc Crown Granted claims are subject to an annual royalty payment of $50,000
comprising cash and shares. The cash component of the advance royalty will be
$25,000 and the share component will be $25,000 payable in common shares to be
calculated as the average price of the shares of Castle over the previous 10 trading days
prior to the annual December 31 payment date.
4.4 ENVIRONMENTAL LIABILITIES
Tetra Tech is not aware of any material environmental liabilities to which the Property is
subject.
4.5 REGULATORY REQUIREMENTS
Castle has stated that the taxes are fully paid on the Crown Granted claims and that the
titles are in good standing. According to Castle and the BC Mineral Title Office website
database, the mineral tenures are all in good standing as of the effective date of this
report.
To drill exploration holes on the Property, exploration permits and bonds must be
obtained. Tetra Tech understands that Castle had applied for and received all required
permits for the now-completed 2012 summer drilling program.
Crown Granted claims include the right to employ the surface over these Crown Grants
for mine access as well as mine and mill facilities. To rehabilitate the Granduc/Tide
Tunnel (Granduc is the common name for the tunnel and Tide Tunnel is the legal name)
and Summit Lake road access (also known as Granduc Road), right-of-way permits must
be obtained. Tetra Tech understands that Castle holds statutory right-of-way permit (for
50 years, renewable for another 30 years; disposition #890476) for access to the
Granduc/Tide Tunnel, which has been rehabilitated over the course of 2011/2012.
The Crown Grants are within the District of Stewart, BC, and as such any surface
improvements are subject to district taxes.


5.0 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
5.1 ACCESSIBILITY
Stewart, BC has a population of approximately 500, and is located at the head of the
Portland Canal, approximately 52 km northwest of the Property. Stewart is accessible via
the Glacier Highway (BC Highway 37A), a spur-off of the Stewart-Cassiar Highway (BC
Highway 37). Stewart is also accessible by floatplane or small airplane charter (from
Terrace or Prince Rupert) or by helicopter charter.
Terrace, BC, is located 301 km southeast by road of Stewart, via Highways 37A, 37, and
16 (Trans-Canada Highway).
Rail service on the Yellowhead Railway is available from Kitwanga, which is located at the
junction of Highway 37 (i.e. Trans-Canada) and the BC Highway 16, approximately
213 km by road to the southeast of Stewart.
Historical access to the Property is via an all-weather road from the communities of
Stewart, BC, and Hyder, Alaska to the former mill site north of Summit Lake (also referred
to as Tide Lake). From there, a 17 km long access tunnel (i.e. the Tide Tunnel or Granduc
Tunnel) and electric tram provided access from the mill to the mine operations
(McGuigan and Harrison 2010).
5.2 CLIMATE
The Property has a northern coastal mountain climate. The area near Stewart
experienced an average of 1,842 mm of precipitation per year between 1975 to 2000,
much of it as snow (in late October until April), and an average yearly temperature of 6°C,
over the same time period (Environment Canada 2012).
5.3 INFRASTRUCTURE AND LOCAL RESOURCES
Electrical transmission lines provide electrical service to Stewart, BC; these lines have
been extended to within approximately 25 km of the old mill site. Stewart has existing
and proposed storage and ship loading facilities capable of handling Panamax-size dry
cargo ships. The harbour is ice-free year round. Stewart also has a 5,000 ft paved
airstrip, which is capable of handling small prop-driven planes or business jets. Prince


Rupert, located approximately 180 km south of Stewart and is accessible by ocean-going
vessel via the Portland Inlet and Hecate Strait, and has the deepest ice-free natural
harbour in North America. Prince Rupert is also connected to the CN Railway (McGuigan
and Harrison 2010).
5.4 PHYSIOGRAPHY
The Property is located within the Coast Mountains of BC. The Coast Mountains are part
of the Pacific Ring of Fire; the ring of volcanoes and associated mountains around the
Pacific Ocean. The northernmost subdivision of the Coast Mountains is the Boundary
Ranges, spanning the BC-Alaska border and northwards into Yukon. The Boundary
Ranges include several large ice-fields, and the Property is located in the southernmost
part of the Boundary Ranges.
The topography of the Property is mountainous, with elevations ranging from 700 to
2,000 masl. As such, rugged snow- and ice-capped ridges and mountains dominate the
landscape, with steep-walled glacial valleys. In winter, there is significant snow and ice
coverage. The most prominent glaciers on the Property are the North and South Leduc
Glaciers.
The Property is dominated by alpine tundra. Alpine tundra is a type of natural region or
biome that does not contain trees because it is at high altitude. Vegetation consists
mostly of subalpine and alpine dwarf shrubbery, giving way to hemlock groves at lower
elevations (Ostensoe 1967). Alpine tundra transitions to subalpine forests below the tree
line.


6.0 HISTORY
The following description of the Property’s history is quoted from McGuigan and Harrison
(2010).
Mineralization was first discovered on Granduc Mountain by Wendell, Dawson and W.

Fromholz in 1931. E. Kvale and T.J. McQuillan staked the copper showings in 1951 for
Helicopter Exploration Company Ltd. Granby Mining Company acquired the Property in
1952 and completed surface and underground exploration work under their newly
formed company, Granduc Mines Ltd. Newmont Mining Corporation Ltd. entered into
an agreement with Granby in 1953 whereby Newmont would finance mine
development. Mine development commenced in the early 1960s with production in
1968 at a mine/mill capacity of 2000 tpd. Between 1970 and 1978, the Granduc ore
body was mined by Newmont using sublevel caving mining methods.
The Granduc mine was acquired in 1979 by Esso Minerals Canada (Canada Wide
Mines division) and operated until closure in May, 1984. After purchasing the Property
in 1979, Esso began converting to a new mining method referred to as “slot and mass
blast”. The initial results achieved by the method fell short of those achieved in the
past with sublevel caving. Continued improvements, however, yielded stope recoveries
significantly superior to sub-level caving and significantly less dilution. After closure,
the Property was returned to Granduc Mines Ltd., then a subsidiary of Hecla Mining
Company (“Hecla”).
Exploration on the Property during the period 1974 to 1984 focused primarily on
extending copper mineralization along strike north and south of the mine, in areas east
of the Granduc fault. Work during that time discovered the North Zone, located about
3 km north of the main mine workings [Figure 6.1]. No copper mineralization has been
discovered west of the Granduc fault on Granduc Mountain.


Figure 6.1 Generalized Long Section of the Granduc Mine
16000’ N 12000’ N 8000’ N
Looking Eastward
6000’ASL
Snow and Ice
Rake of F Zone-Granduc Fault Intersection
F2
4000’ASL
55°
Zone 1 F2(assumed)
NORTH
ZONE Mined Out
SOUTH
Zone 2 ZONE
2600 South Leduc
2000’ASL
Glacier
2100
Plunge of F2 folds
Projection is facing eastward No.2 Shaft
Granduc Massive Sulphide Deposits
A Zone B2 Zone F Zone
C Zone Cu Mineralization
B Zone
(NorthZone)
Note: The Main Zone is represented in Figure 6.1 as mineralization immediately proximal to “mined out”
area on long section.
Source: Adapted from McGuigan and Harrison (2010)
In 1991, a small surface exploration program was funded by Hecla. The program
focused on several surface mineralized zones on the Property and comprised surface
sampling and mapping by Cambria Geological Ltd. (“Cambria”).
In 1993, Hecla financed a field program that retained Cambria to conduct additional
mapping and sampling. Cambria conducted the work and in addition, supervised the
funding of the Mineral Deposits Research Unit (“MDRU”) of the University of BC to
conduct structural mapping, geochronology and lithogeochemistry of the Property
(Dawson, et al, 1994). One author (McGuigan) of this report supervised the 1991 and
1993 programs. Granduc Mines Ltd. passed into the ownership of Glencairn Gold
Corporation, but no work was done on the Property.
In 2005, Bell Copper acquired the Property, initially under Option from Glencairn Gold
Corporation, now Central Sun Mining Inc., which is now a subsidiary company of
B2Gold Corp. Bell Copper conducted field exploration and diamond drilling programs
in the summer seasons of 2005 and 2006. Bell Copper is now the 100% owner of the
Property.
6.1 DRILLING
The first drilling on the deposit began in 1931. Exploration drilling continued until 1968,
the results of which led to the development of the Granduc Mine. Definition drilling was
performed from 1968 to 1970, when the mine opened. Production and exploration
drilling continued both from surface and underground throughout the mine life until
closure in 1984. After 1984 there was a fire in the mine office, and many of the mine


records and drill logs were destroyed. A complete count of all historical drilling is
therefore not available. Available information has been gleaned from remaining records,
including some drill logs, hand-drawn mine sections and plans, and stored drill core. The
drilling that can be confirmed to have occurred prior to 2005 consists of more than
2,012 holes, with a total meterage of more than 148,000 m.
6.2 MINE PRODUCTION
The following description of the mine production from 1971 to 1984 is taken from
Johnson (2012).
After exploration on the Granduc property, between 1931 and 1964, a decision was
made to begin significant development of the deposit. A road was built connecting
Stewart BC to the Tide Lake concentrator and construction was begun on the 17 km
access tunnel, or “Tide Tunnel.”
The Tide Tunnel access was a monumental task. Construction began in 1965 and the
tunnel was completed in 1968. Production at the Granduc Mine started in November
1970 (Schmidt and Tyler, 1983) with the first concentrate shipped in January 1971.
The mine was operated by the Granduc Operating Company, a subsidiary of Newmont
Mining Corporation.
The mine operated from approximately 1970 through until 1977, when it was shut
down for approximately three years. The Granduc Mine was purchased by Esso
Minerals Canada in 1978, even while Newmont was dismantling the site. By May of
1979, Esso decided to rehabilitate the site and re-start mining operations. The site
was operated under the name Canada Wide Mines Ltd., with production resuming in
September 1980. Approximately 2.0 million tons of ore was delineated for mining by
1983, however most of the remaining delineated material was deemed uneconomic
and the mine began to plan for closure a second time. The mine was decommissioned
in early 1984 due to high costs and low copper prices. Esso immediately began
decommissioning the site and by late 1984 nearly all infrastructure and equipment
had been removed. (Walker, 1985)
Mining methods included sublevel caving between 1970 and 1977 and a slot and
mass blasting during Esso’s operation of the mine (Schmidt & Tyler, 1984). The mine
processed approximately 15 million tonnes of ore and produced approximately
180,000 tonnes of copper over approximately 10 years of production. Average head-
feed grade of approximately 1.29% copper and processing was estimated to have
achieved 95% copper recovery. Average precious metal production included 0.13
grams per tonne (“g/t”) gold and 8 g/t silver (Minfile, 2011). Copper concentrates
were shipped from the concentrator to Stewart BC; from which they were shipped to
markets in Japan [Table 6.1].


Table 6.1 Documented Production at Granduc Mine, 1971 to 1984
Production Tonnes Tonnes Grams Kilograms
Year Mined Milled Commodity Recovered Recovered
1984 352,630 352,630 Silver 3,944,057 -
Gold 55,771 -
Copper - 5,602,592
1983 1,031,805 1,031,805 Silver 7,950,859 -
Gold 133,273 -
Copper - 11,925,042
1982 500,335 500,335 Silver 3,606,800 -
Gold 52,627 -
Copper - 5,380,913
1981 613,936 613,936 Silver 4,850,000 -
Gold 75,283 -
Copper - 7,626,025
1978 722,782 741,648 Silver 9,056,914 -
Gold 160,460 -
Copper - 14,780,100
1977 1,252,362 1,252,362 Silver 8,631,953 -
Gold 130,011 -
Copper - 13,262,755
1976 1,315,905 1,315,905 Silver 10,373,566 -
Gold 154,800 -
Copper - 15,569,210
1975 1,499,585 1,499,585 Silver 9,604,482 -
Gold 162,606 -
Copper - 16,222,977
1974 2,457,307 2,457,307 Silver 19,216,895 -
Gold 315,198 -
Copper - 29,055,142
1973 2,538,242 2,538,242 Silver 20,259,654 -
Gold 342,257 -
Copper - 31,548,799
1972 1,881,151 1,895,884 Silver 13,570,114 -
Gold 229,820 -
Copper - 21,702,538
1971 1,359,730 1,359,730 Silver 12,983,667 -
Gold 187,955 -
Copper - 17,467,617
Total 15,525,770 15,559,369 Silver 124,048,961 -
Gold 2,000,061 -
Copper - 190,143,710
Source: Johnson (2012)


6.3 EXPLORATION PROGRAMS 2005 TO 2006
Following Bell Copper’s acquisition of the Property in 2005, field exploration programs
were conducted in 2005 and 2006. The following is summarized from McGuigan and
Harrison (2010).
6.3.1 2005
Bell Copper conducted a limited diamond-drilling program and an airborne geophysical
survey. Work accomplished included:
 diamond drilling in five holes, totalling 2,087.62 m, at the south extension of the
main mineralized horizons of the Granduc Mine, under the north side of the
South Leduc Glacier
 AeroTEM II surveys, for 1,206 line km comprising magnetic and AeroTEM II
helicopter electromagnetic system (the results of which are depicted in Figure
6.2 and Figure 6.3).
6.3.2 2006
Bell Copper conducted a limited diamond-drilling program and surface prospecting. The
work included:
 prospecting in the area recommended by McGuigan (2005), where massive

sulphide boulders were discovered on the north side of Granduc Mountain; due
to glacial melting, this area was exposed and the discovery was termed the “JK
Zone”
 diamond drilling in 12 holes, totalling 3,927.84 m, at the south side of the
South Leduc Glacier and under the South Zone.
This work was supervised by Bell Copper employees.


Figure 6.2 Granduc Airborne Magnetics Map
415000 420000
N
6235000
Granduc
Mt.
#
D
6230000
Fault
Gra nduc
nT
55497 56376 56481 56584 60624
Metres
0 500 1000 1500 2000 2500
Source: McGuigan and Harrison (2010)


Figure 6.3 Granduc Electromagnetic Anomalies Map
415000 420000
6235000 N
Granduc
Mt.
#
D
6230000
Conductor Picks Classification
0-1S
1-5S
5-10S
10-20S
Fault
>20S
Gra nduc
Metres
0 750 1500 2250 3000 3750


6.4 COORDINATE SYSTEMS AND TOPOGRAPHY
6.4.1 COORDINATE SYSTEMS
Before Bell Copper’s work in the mid-2000s, most, if not all, work was completed using a
local mine grid. This grid was a Cartesian imperial grid (with measurements in feet), and
was generally aligned nearly north-south, with an occasional slight clockwise rotation.
During initial exploration, development, and mining, all coordinates would have been
measured using traditional line-of-sight techniques. Further discussion of the mine grid
as it pertains to the current database can be found in Section 11.0.
6.4.2 TOPOGRAPHY
Existing topographic models are legacies of past compilations based on historical work.
Castle inherited them from their predecessors when the Property was acquired in 2010.
Johnson (2012) noted as follows:
Topographic surfaces have been captured at several stages in the 1980’s and mid
2000’s. These data appear to be compiled from ortho-rectified surface photos. There
are currently at least two incarnations of surfaces data compiled in the form of 2m and
5m contours. There is a noted elevation difference for the glacier associated with the
two datasets, presumably due to significant melting of the ice-mass.
Further discussion of the topographic surfaces and their accuracy is found in Section
11.0.


7.0 GEOLOGICAL SETTING AND
MINERALIZATION
7.1 REGIONAL GEOLOGY
The following is a synopsis from Grove (1986), which summarizes the regional geology of
the Stewart Complex.
The Granduc deposit occurs within the Unuk River-Salmon River-Anyox map-area includes
part of the contact of the eastern Coast Plutonic Complex with the west-central margin of
the successor Bowser Basin. Sedimentary, volcanic, and metamorphic rocks bordering
the Coast Plutonic Complex range in age from Middle Triassic to Quaternary and are
referred to as the Stewart Complex (Figure 7.1).
Within the Stewart Complex, Upper Triassic rocks are found only along the Iskut-Unuk
River section. The Upper Triassic strata are predominantly green epiclastic volcanic
units. These include volcanic breccias, marbles, sandstones, and siltstones which form
prominent horizons near the top of at least a 900 m sequence and are overlain in the
area by sedimentary, volcanic, and green epiclastic volcanic rocks of the Jurassic
Hazelton Group.
The Betty Creek Formation is overlain conformably to disconformably by the upper Middle
Jurassic, mainly marine, thinly bedded Salmon River Formation, which includes
siltstones, greywackes and minor volcanic units. The Salmon River Formation is in turn
overlain by the marine Nass Formation which forms most of the outcrops in the western
Bowser Basin. Elsewhere in the Bowser Basin the Nass Formation and its equivalents
are overlain by significant thicknesses of marine to continental sedimentary rocks of
Cretaceous or Tertiary age called the Skeena Group.
The west side of the study area is dominated by the Coast Plutonic Complex. The plutons
of this extensive belt are known to include Middle Jurassic and Tertiary intrusions. The
map-area granodiorite is flanked by numerous smaller satellite diapiric and tadpole-like
plutons named the Skeena intrusions. Along the undulating main contact of the Coast
Plutonic Complex a number of prominent re-entrants are marked by the presence of
gneisses, migmatites and some pegmatites.
Deformational metamorphism is important and formed cataclasite and shear zones that
are largely restricted to competent Triassic and Lower Jurassic rocks. The shear zones
are generally accompanied by extensive, weathered alteration zones.


Figure 7.1 Regional Geology of the Stewart Complex
131° 00’ 130° 00’ 129° 00’ 128° 00’ 127° 00’ 126° 00’
57° 00’
SK
N
EE
OW NA
M
DO EEG OU
M EE NT
E AI
NS
Ta
ylo
Ri rA
tch nt
ie icl
An in
e
tic
lin
Granduc Mine e
E D
56° 00’
Aie
Stewart
zia
din
Hin
ge
NA
SS
BA
SIN
A B
C
NA
SS
RA
NG
ES
55° 00’
SedimentsVolcanics Main Features

A Wrangell - Revillagigedo Belt
Miles
Stewart Assemblage - Upper Jurassic (undivided)
Sustut Assemblage - Upper Jurassic and Tertiary (undivided) B Coast Plutonic Complex 0 8 16 24
Paleozoic (and younger - undivided) C Bowser Basin
Tertiary and Recent Volcanics D OminecaCrystalline Belt
Bowser Assemblage - Midle Jurassic to Upper Jurassic (undivided) E Bear River Uplift
Wrangell - Revillagigedo Metamorphics
Intrusives
Coast - undivided
Omineco - Topley - undivided
Skeena - undivided
Dyke Swarms - undivided
Source: Adapted from Grove (1986)
7.2 LOCAL GEOLOGY
The remainder of this section has been summarized from a report by Johnson (2012),
which is itself a compilation of McGuigan and Harrison (2010).
Stratified rocks exposed on Granduc Mountain and to the north are subdivided into the
western and eastern series, which are separated by the north-northwest striking South
Unuk shear zone. Western series rocks consist of foliated, greenschist facies
metavolcanic and metasedimentary rocks and include the Granduc Mine series, units
lying north of the North Leduc Glacier and units in the hanging wall of the Granduc Fault
on Granduc Mountain (Figure 7.2 and Figure 7.3). These rocks belong to the Upper
Triassic Stuhini Group. Eastern series rocks are much less deformed, mainly volcanic
and belong to the Lower to Middle Jurassic Hazelton Group. The pre-tectonic Late
Triassic Bucke Glacier stock and syenite sills or dykes intrude western series rocks and
the post-tectonic Eocene Lee Brant pluton.


Figure 7.2 Local Geology of the Granduc Property
415000 420000
2
425000 430000
2200
000
1700
1600
21
1400
0
1300
1400 14 1500 1500
1400
14
16
1500
160
00
1800
150
00 180
20 900
00
150
1800
1600
80
2100
180
0
00
lJHU
1
1900
2100
0
1500
0
0
1600 1700 2000
0
1200
15
17
21
1500
1600
1800
00
19
900
00 1
00
N
1600
00
1600
00
2000 1700
18
160
18
18
17 00 1600
1700
00 18 000
00 00 16
00
60
2000
16
2200
0
0 17
21
00
Eg
1100
1800
00
00
mJHvb
00
19
00
00
18 00
17
1600
2
00
1500
00
1900
17
1700
20
14
00
18
1700
00
20
1000
00
2000
2000
23
TrBG
2
00
00
1900
2200 000
1200 1300
00
1700
1500
21 1800
21
00 1900
2200
18
1700
1600
210
1700
1800
0
2000
lJHva
210
1800
20
2000
0
1400
19
1500
00
220
uTrSsv
00
2300
2000
00
22 1700
800
1500
1600
0 18
00
180
00
2200
00
17 1900
1000
1700
16
800
00
1600
1800
1800
23
17 00 1800
140
00 00
2200 1700
2300
1700
19 20
0
00 1600
22 2000
0
1000
1800
1100
210
2200
1900
0
1600 200 1500
00 2200
Eg 18 1400
900
17 1900 1300
1600
2100
1800
1000
16 00
Glacier
11 2000
1700
6235000
1100 00 00
13
1200 1200
00
90
1100
18
19
1900
00
20
1500
00
1400
140
0
1300
1500 1800
1400 1300
140
00
00
16
00
1
1500
22
0
15
0
00
15
14 00
1700
170
00
1400
1800
00 2100
16
2200
1600
2000
1500
1600
1700
180
00
170 0
Eg 1400
18
20
lJHva
16
12
Glacier 00
1900
0
2100
Leduc 1300
00
17 20
00
1700
00
00 1100
1200
TrBG 1200
220
1500
150
1800
00 0
21 1500
0
1600
1300
TrBG1500
16
00
2000
00
00
1600
1900
1600
Eg 10
19
2200
170
140
1400
00 0 0
110
0
17 00
00
1500
1600 16 1700 00
rth
00
1600
15
14
19
16 00
16
19
00
2100
00
200
00
17
No
18 20
15 1600
1600
24
0
2100
1500
00 00
150
0
1400
2000
0
2200
2100
00
0
1800
uTrSsv
1900
2100
2300
2200
1700
2000
22
1600
1200
1500 0
00
16
1800
1500
2000
1400
00
uTrSsv
1600
lJHB2200
140
2000
1300 1500
1000
1400
EJTCS
1600
0
1300
1700
1700
1 80
1300
900
22
1900
1600
230 0
16
00
2100
220
1400
00
0
19 2000 on 00
2100
uTrSsv Granduc 18 00 Locati 18
2000 2 00
2000
l
00
lJHva Tunne EJTCS
1600
2100 0
1700
uTrSsv Approx
1700
1800
2200
1100
Mine 00 22
1800
1600 22 00
180
uTrSsv mJHvb
1700 1
00
19
1800
0
00
800
2200
16
Mackie
700
1500
0
D
90
16
18 0
19
900
1800
00
00
00
So 1900 2000
70
2200
800 1900
uTrSsv
800
ut
12
1800
6230000
1600
00
h
uTrSsv
1500 1600
2000
700 900 1 1600
00
10 40
1700
800 00 0
Legend
16
11
10
00
0
900
1700
12 0 90
600
Le
00 0
00
16
1300
1800
11 1700 19
2000
1700 1800 1900

900
00
Regional Geology - Stratigraphic unit
du
1800 00
140
700
800 900 100
1900
1200 1500
c
1700
0 700 0
0
60
1000
16 0
700
19
uTrSsv
1400
1200
00
0
100
1800
lJHva
10
90 1100
00
Eg 15 0 Coast Plutonic
2100 0
15
00
2100
21
700
190
1800
uTrSsv
800
00
1500
800
1800
c Fa ult
0
0 Complex(?)
1700
1200
2100
22
2000
00
1600
1600
800
1900 800
120
1100
1400
17
2100
15 0
1500
lJHva
160 00 1 1800
0
1600
14 0
EBo 14 00 Boundary
1200
Stock
2200 210
00
900
1
130
1300 0
1100
0 70 160
0
140
1300
Gla 00
0
1500
0
Gr an du
0
220
150
1800
lJHU
0
1700
90
1600
1800
1100
11
0
1900
150
1400
1400
cier
00
0
1800
1700
TrBG Bucke Glacier Stock
0
00
22
0
1600
190
18
2100
1100
150
1600
1800
00
1600
2000
0
1700
0
00
0
14
1200
lJHva
00 60
17
210
1800
22
15 1
1500
2200
2300 1700
00
1500
1300
uTrSsv Stuhini Group

1800
1200
2200
15
1600
EBo
180
00
170
13
0
1000
mJHvb 2100
2200
00
18 190 1700
2000
0
00
Hazelton Group -
161000
0 18
EBo
21 00 1600
1300
1000
16
00
2
2000
2
lJHU
0
1500 1600
1700
19 000
1500
2000
00
190
1400
00
170 17
18
1600 00 00 22
Unuk River Formation 1500
0
0
15
1300
00
1700
130 1700
00
1400
16 18 0 1600
1600
70 0
00 00
Hazelton Group -
1500
1700 2000
mJHvb
1400
1800
1900
Frank
1700
0
1900 1700 170
Salmon River 14
0
1500
160
0
150
1200
180 19 0
Kilometres
1600
11
1400
0
1700
00
1700
00 16 00
20
1600
1500 00
15
21
00
00
EBo Hazelton Group - 1100
150 0
EBo
1800
17
00
lJHB
2000
1300
EBo
00
6225000
1600
0
16
130
1700
1900
12
1700
18
Betty Creek 0 Formation
1900
00
lJHva
00 1300
1500
1600 00
00 13 120
00
16
0
1400
15
1610400
00 17
00
1 40
0 1 2 31700 4
23
17
00
00
1500
0
16 900
20 2200
18
00
1900
1300
19
00
00
00
Regional Faults
00
1800
21
13
1600
00
1800
17
1600
1
160
1300
2200
1400
1400
1800
1600
22
17
0
1900
0
1700
2000
1500
00
1900
200
2000
1900
170
00
2100
EJTCS
0


Figure 7.3 Property Geology, Granduc North Sheet
416000 417000 418000
00
15
9
N 3p2 1500
9 JK Zone 00
16
14 0 0
1700
2006-8 00
2006-9 J 17
J
!. J 2006-12
00
2006-11
16
JJ
00
6233000
16
2006-10
4w
5pc
1400
5pc
0
1 70
2p1 9
5v1
1800
5w 5ss 19
00
1900
5v2
1800
1900
5w2
2000
00
5cb
14
5w2
5p2 5p2
2100
5p3 10qd 5c Granduc

5p3 2p1
Mtn.#
3 5pc
6v
2100
10qd
210
Grand
0
6v
4w North Zone
6t
6232000
uc Fau
16 0 0
Fa
ult
lt
6t1 2600 Level
5p1
3w1 Exploration Adit
10qd
6p
6t 1900 20
6t 5p3
0 0
6t
Eastern Limit So
6w3 6t
16
1v
00
6w2 Bo
15
un
00
6t 2p1 da
6v 6t ry 18
00
6p Cr
ow
nG
6v 4w
1700
ra n
uth
6v 3v te d
6t
Unuk Shear Zo
12 Cl
00
a im
24 7w s
75 10
00
Dr 6w3
1700
a in
6231000
ag 2v
eT
un 4w
ne 3t
ne
l 2p4
90
Fault
0
6v 3p2 3v
11
0 0 Tide Tunnel
16
80
00
0
17
00
8v 2p1
7w 6v
800 6w3
3p1
Granduc Mine
So 2600 Level
14
uth
00
11
t
aul
Le
0
1500
0
du 4w 2p1
rn F
3c 2005-1 2005-2 1v
c
800
J J
J
ste
!. !. !.2005-3J J 2005-5
We
6v
6230000
!. 2005-4
6v 3v 2p1
Metres
6v
Gl
ac
12
90 10
13
ie
00
0 00
00
0 10 6v
250 500 750 r
00
!. J !. J
2006-5 J 2006-1


Figure 7.4 Property Geology, Granduc South Sheet
416000 417000 418000
6t
6232000
21
1600
00
N 5p1 Fau
North Zone
6t1 lt 2600 Level
3w1 Exploration Adit
10qd
21
00
6t 20
6t 5p3
0 0
6w3 6t
6t
16
00
6w2 Bo
15
un
00
6t da 1900
6v 6t ry 18
00
6p Cr
ow
nG
6v 17 00
ra n
6v te d
6t
12 Cl
00 14
0 aim
24 7w 0
s
75 10
00
Dr
17 0 0
ain
6231000
ag 2v
eT 4w
un
ne 3t
1800
l 6w3 2p4
90
Fault
0
6v 3p2
11
0 Tide Tunnel
0
3v
16
80
00
0
17
00
7w
800 6w3 3p1
Granduc Mine
So 2600 Level
14
ut h
00
11
t
aul
Le
1500
8v
0
du
rn F
3c 2005-1 2005-2 1v
8v
c J
J J
ste
!. !. !.2005-3J J 2005-5
We
2p1
6230000
!. 2005-4
6v 3p2
3v
4w Gl
ac
12
10
13
ier
00
00
00
90
2006-2
!. J!.2006-5 2006-1
0
J J
90
0
12
6v
10
00 one
90
00
3w2
0
ar Z
3w2
!. 2006-4
She
2p1
0
J
90
13 00
nuk
1100
3p2
hU
1v
14
out
00
3w2
it S
1100
1400
10
00
Lim
1200
tern
1 00 0
South Zo ne
6229000
2006-7 10
0
.! J 0
Eas
11
1300
1400
J 2006-6
00
00
10
3p2
Goss
Granduc Fault
10
00
1 20
0
3w2 3c
1300
11
Metres
0 0
1500
15 00
1 60 0
14 0 0
0 250 500 750


Figure 7.5 Legend for Property Geology Maps
Cretaceous And/Or Younger R o c k s O f U n c e r t a in F a c in g A n d P o s i t io n In U n i t 5 ( 5 p e t o 5 w a ) :

Early Cretaceous And/Or Younger
Post Kinematic Intrusions (10qd, 10di): 5pe Green bedded argillite, black pyritic argillite
Light gre y, fine to medium grained quartz 5cd L i g h t g r e y l i m e s t o n e , l o c a l l e n s e s o f t u ff a c e o u s r o c k

10qd
diorite dike with chilled margins
Light brown and grey laminated siliceous argillite;
5pc
Late Triassic minor foliated green volcanic rock
9 Bucke Glacier Intrusions 5cb Dark grey graphitic limestone

Monzodiorite and diorite stocks and sills. G r e y s i l i c e o u s w a c k e ; f o l i a t e d t u ff , p l a g i o c l a s e - b e a r i n g
5wa
Co-eval with Upper Triassic Volcanic Rocks andesite; minor argillite
Tria s s ic A n d /O r O ld e r W e st ern F a u lt
"Hanging Wall, Upper Volcaniclastic Sequence" (8v): " H a n g in g Wa ll, G a s h Tu ff S e q u e n c e " (4 w to 4 w 1 ):
Green foliated volcanics; feldspar and augite- Light green to greenish-grey phyllitic wacke, locally
8v 4w
bearing andesite flows, green foliated tu ff calcareous
Light greenish-yellow to grey massive carbonate, grades
" H a n g i n g W a l l , S i li c e o u s W a c k e " ( 7 w ) : 4c
laterally into a calcareous wacke of unit
Light grey to brown bedded siliceous wacke,
7w 4q L i g h t g r e e n t u ff a c e o u s s a n d s t o n e
some pyritic clots
" H a n g in g W a ll, M a f ic W a c k e S e q u e n c e " ( 6 w 3 t o 6 p ) : 4w1 Light green well bedded, foliated fine grained wacke
Dark grey phyllite and wacke, minor sulphidic argillite,

6w3 Granduc Fault
siliceous wacke, and feldspar porphyry flows near top
"Mine Series" (3w2 to 3v):
6c L i g h t p u r p l i s h - g r e y c a l c a r e o u s t u ff a n d l i m e s t o n e D a r k g r e e n l a p i l l i t u ff , c h e r t p e b b l e c o n g l o m e r a t e w i t h
3w2
D a rk g re e n , g re y, a n d p u rp le , m e d iu m to fin e a black calcareous matrix; minor dark green foliated volcanics
6w2
g ra in e d wacke
3w1 Green chloritic phyllite, wacke; minor calcareous horizons
6s Bedded cream feldspathic arenite
Granduc Limestone: Light grey to dark grey graphitic
3c
Cream to light green laminated chert and l i m e s t o n e , l o c a l m a r g i n a l c a l c a r e o u s t u ff
6t
siliceous argillite; grades laterally into B la ck, g re y, a n d w hite la m in ate d ch e rt a n d s ilice o u s
3t
6t1 Laminated white chert horizon wacke
Black argillite chip conglomerate, black pyritic argillite;
D a r k g r e e n , f o l i a t e d a m p h i b o l e - b e a r i n g t u ff , 3p2
6v minor magnetite-rich horizons, and cream and brown wacke
characterized by very thin white stringers
G ra y, fo lia te d tuff a n d w a cke ; L a m in a te d c h ert, 3p1 L i g h t g r e y b e d d e d t u ff a c e o u s a r g i l l i t e
6w1
minor argillite
Green to black volcanic, and volcaniclastic rocks, dark
6p Light green, bedded argillite, minor black argillite grey and green phyllite, green foliated wacke; minor cream
3v
laminated chert. Augite and/or feldspar-bearing flows at
" H a n g in g Wall, Va rie d S e q u e n ce " (5 p 3 to 5 v 1 ): or near the base of the unit
Light green and grey siliceous argillite, black "Upper Footwall Sequence" (2p to 2p1):
5p3
pyritic argillite
Light green bedded argillite, local calcareous 2p Dark grey to green argillite; minor volcanic rocks
5p2
horizons
2ss L i g h t b r o w n t u ff a c e o u s s a n d s t o n e
5c Light grey to black limestone
L ig h t b ro w n to d a rk g re y, w e ll be d d e d s ilice o u s 2p4 Rusty weathering, black pyritic argillite

5p1
a r g il l i t e D a r k g r e e n , t u ff a c e o u s a r g i l l i t e ; m i n o r a u g i t e - b e a r i n g
2v
5w2 Grey siliceous argillite, locally well bedded andesite flows
D a rk g re y, m a g n e tite -b e a rin g ca lca re o u s arg illite ; lo ca l
Dark green foliated volcanic rocks; fine, green 2p3
5v2 pyrite and chalcopyrite (?) bearing zones
acicular amphibole locally present
2p2 Dark grey bedded siliceous argillite
5w1 Light grey siliceous wacke
Green siliceous phyllite; minor calcareous horizons,
L ig h t g re y to cre a m , tu ffa ce o u s sa n d sto n e w ith 2p1
5ss some lenses of epidote
a m e d ia l felsite unit
5v1 Green chloritic schist "Lower Footwall Sequence" (1v to 1f):
1v D a r k g r e y - g r e e n a u g i t e - b e a r i n g a n d e s i t e f l o w s ; m i n o r t u ff
1t L i g h t g r e y s i l i c e o u s w a c k e ; m i n o r b r e c c i a a n d t u ff
1f G re en to g re y lith ic tu ff + /- a u g ite p h e n o cryst, a n de s ite tuff


7.2.1 STRATIGRAPHY
WESTERN SERIES (UPPER TRIASSIC STUHINI GROUP)

Western series foliated schist, phyllite, marble and gneiss crop out east of the South
Unuk River where they form a north-northwest striking and steeply dipping unit. North of
Granduc Mountain, the western series is subdivided into schists, argillites, marbles and
gneiss.
EASTERN SERIES (LOWER TO MIDDLE JURASSIC HAZELTON GROUP)

Eastern series rocks form a northwest trending package of heterolithic intermediate
volcanic breccia, conglomerates, dacitic tuffs, homolithic breccia and andesitic pillowed
flows and breccias. They are separated from western series rocks by the South Unuk
shear zone on the west, and are bounded by the Frank Mackie Glacier on the east.
7.2.2 INTRUSIONS
Bucke Glacier hornblende-biotite diorite to monzodiorite stock (circa 220 to 223 Ma)
forms a northwesterly elongate body (approximately 10 km long by 2 km wide) in western
series rocks north of Granduc Mountain. The stock is parallel to subparallel to regional
foliation, and the stock is foliated itself, however, to a lesser degree than the enclosing
western series rocks).
Lee Brant undeformed hornblende-biotite quartz monzonite stock (circa 55.6 +2 Ma)
forms a large stock in eastern series rocks north of Divelbliss Creek.
Weakly foliated syenite sills (and minor dykes) form north-northwesterly regional foliation-
parallel elongate bodies (less than 1.5 km long and 10s of metres thick) in western
series rocks north of Granduc Mountain.
7.2.3 STRUCTURE
FOLDING
Surface mapping on Granduc Mountain by Klepacki and Read (1981) identified four
phases of folding. The earliest deformation is characterized by minor isoclinal folds (F1)
that plunge shallow to the southeast in the northern part of the map, and to the
southwest in the southern part of the map. Second phase deformation is characterized
by tight to open, minor to major folds (F2) that verge to the east. Axial planes of F2 folds
strike north-northeasterly and dip steeply east or west. F2 fold axes plunge steeply north
in the northern part of the map, and steeply south in the southern part of the map. Lewis
(1994) attributes S1 foliation, F1 and F2 folds on Granduc Mountain to progressive
deformation associated with the South Unuk shear zone. The South Unuk shear zone is
several km wide and has dominantly a sinistral sense of displacement.
Third phase deformation produced small open folds. F3 axial planes strike east to
northeasterly and dip shallow to moderately south. They are best developed in the Gash


Banded Tuff Unit (Unit 4) and appear to be spatially related to the Granduc and Western
faults.
FAULTING
The HFK fault mapped by McGuigan and Marr (1979) may represent the southern
continuation of the South Unuk shear zone mapped north of Granduc Mountain. The
South Unuk shear zone separates deformed Late Triassic western series (Stuhini Group)
rocks in the west, that host the Granduc deposit, from less deformed Early to Middle
Jurassic eastern series (Hazelton Group) rocks in the east.
Younger faults include the Granduc and Western faults. These faults strike northerly and
dip moderately to steeply west. Analysis of the data by Klepacki and Read (1981) shows
the Granduc and Western faults record movement in a right-lateral, strike slip sense, with
approximately 4 km of displacement, in total, across the two fault structures. Right
lateral movement cross-cuts and displaces late quartz diorite dykes in the Granduc Mine
series lithologies and the Hangingwall series.
7.3 PROPERTY GEOLOGY
The following brief description of stratigraphy, structure, and mineralization is based
mainly on mapping by McGuigan and Marr (1979) and Klepacki and Read (1981), Lewis
(1994) and re-logging selected drillholes (Dawson et al 1994).
The detailed map of the lithologies cannot be present herein, due to the size format of
the current NI 43-101 standard. The reader is referred to McGuigan (2005) for the
details of the local surface mine geology.
7.3.1 STRATIGRAPHY
Previous surface mapping on the Property by McGuigan and Marr (1979) outlined
three major rock assemblages: (i) Hangingwall series, (ii) Mine series, and (iii) the
Footwall series—all of which are part of the western series rock assemblage. These
assemblages were further subdivided by Klepacki and Read (1981) into 47 map
lithologic units. Rapid facies changes, faulting and folding makes correlation of
individual units difficult.
The western series rocks on Granduc Mountain are an assemblage of volcanic and
sedimentary rocks approximately 1,500 m thick; the exact thickness is difficult to
determine because of likely stratigraphic repetition, due to folding and faulting.
Footwall series rocks consist of pillowed and massive andesite to basalt flows which
are overlain by flow breccias, crystal and lithic andesite tuff. Mine series rocks are
cyclic mafic tuffs and chemical sediments that include chert, magnetite iron formation
and sulphides. Hangingwall series rocks consist of siliceous and mafic wacke followed
by andesite tuff, argillite, siltstone and limestone.


FOOTWALL SERIES (UNITS 1 AND 2)
Lower Footwall sequence
Footwall series rocks have been divided into a Lower Footwall and an Upper Footwall
sequence. The Lower Footwall sequence consists mainly of augite phyric andesite
flows (1v), siliceous wacke (1w), and augite phyric andesite tuff (1t). These units are
locally calcareous and contain rare disseminated magnetite, pyrrhotite and
chalcopyrite. A thin ultramafic horizon consists of dunite, talc-chlorite schist and
chlorite-serpentine schist; locally it marks the western fringe of the Lower Footwall
sequence.
Upper Footwall sequence
The Upper Footwall sequence is distinctly more sedimentary and thinner bedded than
the Lower Footwall sequence. It consists of argillite (2p2-5), phyllite (2p1), tuffaceous
sandstone (2ss), and tuffaceous argillite and minor augite phyric andesite flows (2v).
Locally, units are calcareous and contain disseminated magnetite, pyrrhotite and
chalcopyrite.
Mine series (Unit 3)
Mine series rocks consist primarily of interbedded tuff (3v1-2), chert (3c), and minor
chloritic+calcareous wacke (3w1), argillite (3p1-2) and the Granduc limestone (3l).
Mine series rocks were subdivided by McGuigan and Tucker (1981) into the: (i) Lower
Mine unit, (ii) Middle Mine unit, and (iii) the Upper Mine unit. They are separated by
faults of small displacement. The three units each represent similar cycles of argillite,
siltstone, mafic tuff deposition, marked by an interval of exhalative mineralization
comprised of massive sulphide, graphite- and tourmaline-bearing chert and magnetite
iron formation.
These units are not distinguished on the surface map included in this report, as the
contacts are defined only in detailed underground mapping.
Lower Mine Unit
The Lower Mine unit is at the same stratigraphic level as the B1 and possibly the F ore
body. The unit has a limited strike extent and does not extend north of 12000 N on
surface. It consists of laminated brown chert at its base, succeeded by interbedded
amphibolitic tuff, chert, and biotitic feldspar phyric dacite tuff (probably a mafic tuff,
see the Section on Lithogeochemistry). The tuffs contain disseminated magnetite,
pyrrhotite and chalcopyrite. The top of the unit consists of laminated brown chert. The
B1 ore body consists of massive pyrrhotite, chalcopyrite within an interval of chert and
magnetite iron formation (see the section on Mineralization).
Middle Mine Unit
The Middle Mine unit corresponds to the same stratigraphic level as the C and B2 ore
bodies. Surface exposures are limited due to overburden and surface cave from


underground mining. Underground, the unit consists of a lower tuff, a middle course
chert marker, and an upper thinly laminated chert and tuff unit. Minor disseminated
magnetite, pyrrhotite and chalcopyrite occur throughout the unit. It is separated from
the Lower Mine unit by a minor fault (0.3 m fault gouge). The C and B2 ore bodies are
comprised of cherty magnetite iron formations.
Upper Mine Unit
The Upper Mine unit corresponds to the same stratigraphic level as the A ore bodies
underground. The unit consists of equal amounts of interbedded tuff and laminated
brown chert. Tuff decreases northward where chert and fine grained siliciclastics
predominate. Tuffaceous sulphide-bearing magnetite iron formation (1.5 - 3.0 m thick)
occurs near the top of the formation.
Granduc Limestone
Granduc limestone overlies the Upper Mine unit. It consists of grey to black tuffaceous
limestone and calcareous-chloritic dacite tuff. The unit grades upward into thick
bedded feldspar phyric ash and lapilli tuff that is locally calcareous. The top of the unit
is locally cut by the Granduc fault.
Hangingwall series (Units 4 to 8)
Hangingwall series rocks are separated from the underlying Mine series by the
Granduc fault [Figure 7.4]. The unit has been subdivided into the: (i) Gash Banded Tuff
sequence, (ii) Varied sequence, (iii) Siliceous Wacke sequence, and (iv) Upper Volcanic
sequence.
Gash Banded Tuff
Gash Banded Tuff sequence crops out mainly between the Granduc and Western faults
[Figure 7.3 and Figure 7.4]. It consists of tuffaceous sandstone (4t), wacke (4w1-2),
and massive limestone (4l). Fine carbonate veinlets are abundant in many of the
sandstone and wacke beds, and are likely related to carbonate formation in
extensional fractures adjacent to F3 folds and shears.
Varied sequence
Varied sequence is separated from the underlying Gash Banded Tuff sequence by the
Western fault [Figure 7.3 and Figure 7.4]. The sequence consists of a heterogeneous
package of thinly bedded sediments and volcanic rocks. In decreasing order of
abundance, they include argillite (5p1-6), siliceous wacke (5w1-2), foliated andesite
volcanics (5v12), tuffaceous sandstone (5ss) and limestone (5c). Facing indicators
throughout this unit are right-way up.
Mafic Wacke sequence
Mafic Wacke sequence conformably overlies the Varied sequence [Figure 7.3 and
Figure 7.4]. It consists of dark green wacke (6w1-3), argillite (6p), foliated amphibole


phyric tuff (6v), calcareous tuff and limestone (6t), chert (6c1-2) and feldspathic
arenite (6s).
Siliceous Wacke
Siliceous Wacke sequence is separated from the underlying Mafic Wacke by a thin
basal limestone [Figure 7.3 and Figure 7.4]. The rest of the unit is a relatively
homogeneous fine to medium grained siliceous wacke (7w) that contains rare pyrite
clots.
Upper Volcanic sequence
Upper Volcanic sequence conformably overlies the Siliceous Wacke sequence [Figure
7.3 and Figure 7.4]. It consists of foliated feldspar and augite phyric andesite flows
and tuffs (8v), and white to black chert (8c).
7.4 MINERALIZATION
The following is an excerpt from McGuigan (2005).
The principle copper-silver bearing volcanogenic massive sulphide zones on the

Granduc property are located in a north-south trending, steeply westward dipping
strata of Unit 3 (Mine Series) and Unit 2, part of the Late Triassic Western series
(Stuhini Group) [Figure 7.3 and Figure 7.4]. Syngenetic mineralization consists of
sulphides pyrrhotite, chalcopyrite, pyrite, rare sphalerite and galena-and magnetite iron
formation hosted within chert and pyroclastic rocks of the Granduc Mine series.
Subsequent deformation has remobilized and recrystallized the sulphides as
disseminations, layers that parallel foliation, and crosscutting breccia zones along
transpositional shear surfaces. Three major mineralized zones have been identified-
North zone, Granduc deposit and South zone [Figure 7.4].


Figure 7.6 Granduc Deposit – B1 Orebody: Massive Pyrrhotite‐Chalcopyrite‐Pyrite in a
Strongly Foliated Calcareous, Chloritic Mafic Tuff
Source: McGuigan (2005)
Figure 7.7 Granduc Deposit – B1 Orebody: F2 Fold Closure in Massive Sulphides


Figure 7.8 Granduc Deposit – B1 Orebody: Remobilized Pyrrhotite‐Chalcopyrite with
Brecciated Tuff/Chert
7.4.1 GRANDUC DEPOSIT
Granduc deposit consists of a number of individual orebodies-A, B1, B2, C and F-that
are structurally controlled by south plunging F2 folds [Figure 7.7]. The A, B1 and F
orebodies average 1.9% Cu, while the B2 and C orebodies average 1.3% and 1.7% Cu,
respectively. The deposit is separated into a northern and southern block that is
separated by a weakly mineralized to barren zone. Both the northern block and the
southern block are parts of the Main Zone of mineralization referred to in this report.
The F orebody lies in the northern block (north of 11 300 N at the 2600 level) while all
others lie in the southern block. Mineralization is essentially stratabound, however
deformation has caused sulphide remobilization resulting locally in cross-cutting
relationships. It consists of varying proportions of chalcopyrite, pyrrhotite, magnetite,
minor pyrite, and rare sphalerite and galena.
Structurally modified sulphides form an important part of the B1, B2, C and F
orebodies. The thickest parts of those bodies plunge in fold closures with an average
F2 fold axis orientation of 55° towards 230°. The average axial plane measurement
was 0200/700W (McGuigan and Tucker, 1981). Minor folds, and displacement across
chloritic slip surfaces (transpositional slips) indicate a dominance of left lateral
displacement of the sulphide and the sulphide bearing, cherty, magnetite-rich mafic
tuffs.


7.4.2 NORTH ZONE
North zone is between 14 600N and 15 800N on the Granduc mine grid,
approximately 1.5 km north of the Granduc Mine [Figure 7.3]. Mineralization was first
intersected in surface drill hole 153-1 by Newmont Ltd. in 1977. Assays from this hole
[over the intervals 529.5 m to 540.0 m and 558.3 m to 566.85 m were 1.39% (10.14
m true thickness) and 3.29% (8.28 m true thickness), respectively] were 1.39% Cu
over 10.7 m and 3.29% Cu over 8.7 m. These intersections led to a surface diamond
drilling program (approximately 7 620 m in nine drill holes) by Esso Minerals Canada
Ltd. in 1980 and 1982. Two separate mineralized zones were identified in the Upper
Footwall series (Unit 2).
7.4.3 SOUTH ZONE
South zone is between 6 000 and 5 000N, approximately 1.5 km south of the Granduc
Mine [Figure 7.4]. Granduc Mines Ltd. explored this area in 1961 and completed a
152 m adit and a number of surface and underground drill holes. Drill hole 250
intersected two zones assaying 3.84% Cu over the interval 143.7 m to 157.8 m (4.13
m true thickness) and 3.27% Cu over the interval 204 m to 211.5 m (7.32 m true
thickness). Mineralization is hosted in volcanic conglomerate thought to be the facies
equivalents of the Granduc Mine series.


8.0 DEPOSIT TYPES
The deposit type of the Property has been well established through extensive previous
work. The best description available is the following excerpt from McGuigan and Harrison
(2010), which Tetra Tech has found to be of continued relevance.
The principle exploration target on the Property is for volcanogenic massive sulphide
(VMS) deposits of the Besshi-type. Besshi-type deposits are named after deposits on
the southern Japanese island of Shikoku – Slack, 1993). The descriptive model name
for this class of deposit is the mafic-siliclastic VMS.
Besshi VMS sulphide mineralization consists predominantly of iron sulphides (pyrite

and/or pyrrhotite), with lesser chalcopyrite; sphalerite may or may not be present.
Besshi deposits can contain highly varied and complex sulphide mineralogy, including
arsenopyrite, galena, bornite, tetrahedrite-tennantite, cobaltite, stannite and
molybdenite. Quartz (chert), tourmaline, carbonate, albite, sericite, chlorite and
amphibole can be found as gangue minerals in the deposits. Barite is usually absent,
but other chemical sedimentary rocks (chert, carbonates or oxide-facies iron beds)
and/or magnetite may be associated.
The Besshi massive sulphide deposits are stratiform and tabular. The massive
sulphides may be finely or coarsely layered or massive and can be finely interlaminated
with chert, tuff, calcareous sediment, and magnetite; the sulphide lenses can be just
several metres thick but can extend for several kilometres. Chloritic alteration haloes
are commonly in the host rocks surrounding the sulphide horizons, a relic of pre-
deformational alteration. Other alteration minerals that may occur are quartz,
carbonate, pyrite, sericite and graphite. Locally, tourmaline can be distinctly abundant.
Crosscutting the massive sulphide horizons, there may be veins of recrystallised pyrite
and/or chalcopyrite, opened and filled when the horizons were deformed. In highly
deformed environments, sulphides may be thickened in fold closures, and remobilized
into axial plane shears.
The sulphide horizons generally occur in thick sequences of marine sedimentary rocks,
ranging from black shale to arkose to greywacke. The clastic hosts themselves are
generally finely laminated sedimentary rocks, possibly turbidites. There can also be
tuffaceous interlayers. The clastic sediments are typically graphitic.
There are usually no felsic volcanic rocks present, though flows, and sub-volcanic sills
of basalt are often present in the sequence of sediments. The basalts have a tholeiitic
composition.
The host rocks, mineralogy and chemistry of Besshi deposits lie along a continuum
between sedimentary-exhalative deposits and copper-zinc massive sulphides. The


deposits are the products of hydrothermal exhalation at vent sites (“black smokers“) or
hydrothermal brine pools that formed on the seafloor depressions after exhalation.
Some replacement mineralization of sub-seafloor clastic sedimentary rocks by sulphur-
bearing hydrothermal fluids is postulated.
Besshi-type volcanogenic massive sulphide (VMS) deposits range in size from under a
million to 300 million tonnes and grade between 0.64% and 3.3% copper. The Besshi
deposits themselves contain 30 million tonnes of 2.5% copper and 0.3% zinc, plus 7
grams per tonne silver and 0.2 gram gold per tonne. The largest Besshi deposit in the
world is the Windy Craggy, in northwestern British Columbia, which contains between
210 and 320 million tonnes grading 1.66% copper, 0.09% cobalt, 3.5 grams silver per
tonne and 0.2 gram [sic] gold per tonne.
Besshi-type deposits appear to have formed in a variety of tectonic environments, from

oceanic crust to early-forming rift basins in continental plates. The host rocks are
thick, terrigenous clastic sedimentary sequences with lesser volumes of tholeiitic mafic
magmatism. It has been suggested that the size of the deposit reflects the volume of
mafic volcanic rocks in the ore-forming system; the more mafic volcanic rocks that
occur in the basinal stratigraphy, the more copper there may be in the exhalative
sulphide body.


9.0 EXPLORATION
Castle acquired the Property from Bell Copper in 2010, and has completed an
exploration drilling program in each following year (2010, 2011, and 2012). The
exploration programs conducted before the acquisition are discussed in Section 6.0. All
drilling performed during these three exploration programs is discussed in Section 10.0.
Castle has performed only light prospecting work in addition to the drilling exploration
work. No geophysical, geochemical, or mapping surveys have been conducted since
Castle acquired the Property in 2010.


10.0 DRILLING
10.1 SUMMARY
Table 10.1 displays the distribution of drilling by company and year.
Table 10.1 Summary of Granduc Drilling by Company and Year
Number of Total Metres
Company Years Zone Holes (m)
Various 1931 to 1984 Mostly Main Zone 2,012+ 148,000.00+
Bell 2005 South Zone 5 2,090.62
2006 South Zone 6 2,431.47
North Zone 6 1,496.37
Castle 2010 Main Zone 18 8,263.33
2011 Main Zone 31 19,380.62
South Zone 20 7,881.36
North Zone 6 2,961.00
2012 South Zone 14 6,522.35
North Zone 26 15,817.70
All All All 2,144+ 214,845.00+
Because the historical datasets are incomplete, certain aspects of the drillholes may be
unknown, including drilling company and year, core size, and geological logs. Close to
700 of the pre-2005 drillholes have been stored by Castle in their Stewart, BC core
storage yard. Castle has re-sampled all or a portion of 156 drillholes.
The historical drillholes have been compiled into a Microsoft Access® database. This
database includes collar surveys, downhole surveys, and assay data (where available).
No geological logs have been compiled at this time.
Data compilation has been an ongoing process conducted by several companies since
the mine closure in 1984. The bulk of the compilation work was conducted by Bell
Copper, Cambria Geosciences Inc., and Castle, from paper drill logs, as well as hand-
drawn plans and sections.


10.2 CASTLE RESOURCES INC. DRILLING
10.2.1 2010 DRILL PROGRAM
Castle completed 18 drillholes (GD10-01 through GD10-18) in the summer/fall of 2010,
which produced a total length of 8,263.33 m of drill core.
Drill collars were sighted in the field using a Garmin handheld global positioning system
(GPS) (Universal Transverse Mercator (UTM) Zone 9, North American Datum (NAD) 83).
Drill pads were built over the collar site, and a helicopter-supported drill was mobilized on
top.
After the hole was drilled and the drill rig removed, collars were resurveyed using a
handheld GPS. A differential GPS was not available during this field season.
Downhole surveys were completed using a Reflex™ FlexIT downhole survey instrument at
30 ft intervals. The FlexIT is a magnetic survey tool, which is susceptible to external
magnetic fields. It collects azimuth, dip, and magnetic intensity measurements for each
survey point. The data was post-processed to eliminate erroneous azimuth values.
During drilling, core was regularly transported to camp via helicopter. All core was
photographed, and all core that was recovered was geologically and geotechnically
logged before sampling was completed.
All holes were drilled from surface; all collars were located west of the deposit.
Core recovery was reported at 90 to 95% in the mineralized zones; lower recoveries were
noted in the hanging wall fault zones.
Castle completed 57 drillholes (GD11-01 through GD11-054, and GD11-NZ-001 through
GD11-NZ-003B), during the summer of 2011, which produced a total length of
30,222.98 m of drill core.
Drill collars were sighted in the field using a Garmin handheld GPS (UTM Zone 9, NAD
83). Drill pads were built over the collar site, and a helicopter supported drill was
mobilized on top.
After the hole was drilled and the drill rig removed, collars were resurveyed using a
licensed surveyor from Smithers, BC. The surveyor also resurveyed as many 2010 collars
as were available.
Downhole surveys were completed using a Reflex™ Gyro gyroscopic downhole survey
instrument, commonly at 5 m intervals. The instrument collected azimuth and dip
measurements for each survey point. The instrument utilizes a gyroscope for directional
change and is therefore not susceptible to external magnetic fields.


During drilling, core was regularly transported to camp via helicopter. All core was
photographed, and all core that was recovered was geologically and geotechnically
When the 2011 drill program was complete, all core from the 2010 and 2011 drill
programs was moved to the Castle core storage yard in Stewart, BC.
All holes were drilled from surface; all collars were located west of the deposit.
Core recovery was reported at 85 to 95% in the mineralized zones, with lower recoveries
Castle completed 40 drillholes (GD12-001 through GD12-017B, and GD12-NZ-001
through GD12-NZ-025) during the summer and fall of 2012, which produced a total
length of 22,340.05 m of drill core.
Drill collars were sighted in the field using a Garmin handheld GPS (UTM Zone 9, NAD
83). Drill pads were built over the collar site, and a helicopter-supported drill was
mobilized on top. A Reflex™ APS differential GPS unit was used to verify coordinates and
azimuth of hole prior to drilling. The APS is a True North measurement tool and is
accurate to 0.5°. It fits on a mount into the casing or drill rods with different
attachments for varying diameters.
After the hole was drilled and the drill rig removed, collars were resurveyed using the
Reflex™ APS differential GPS. Collar azimuths and dips were also measured from casing
using the APS unit.
Downhole surveys were completed using a Reflex™ Gyro gyroscopic downhole survey
instrument, commonly at 5 m intervals. The instrument collected azimuth and dip
measurements for each survey point. The instrument utilizes a gyroscope for directional
change and is therefore not susceptible to external magnetic fields.
During drilling, core was regularly transported to camp via helicopter. Photographs of all
core was taken, and all core that was recovered was geologically and geotechnically
Drill core from the 2012 drill program was periodically moved to the Castle core storage
yard in Stewart, BC; once drilling activities were complete, all remaining drill core was
transferred to the yard.
All holes were drilled from surface; all collars were located west of the deposit. Core
recovery was reported at 85 to 95% in the mineralized zones; lower recoveries were
Figure 10.1 shows the deposit drillholes, by year.


Figure 10.1 Plan Map of Granduc Drillholes by Year


11.0 SAMPLE PREPARATION, ANALYSES AND
SECURITY
11.1 HISTORICAL SAMPLING
Tetra Tech is not aware of any records outlining the sampling procedures of the Project by
historical operators from discovery until 1984. During mining, an in-house mine assay
laboratory completed most assays. Although the existing database largely contains only
copper assays for this time period, there is an indication in historical reports that
assaying was completed for zinc, lead, gold, and silver from time to time. The procedures
and methods are unknown at this time.
Review of the historic drill core stored at Castle’s Stewart, BC storage yard indicates that
core was typically split lengthwise in half, with one half sent for assay and the other half
archived in the core box. The majority of samples are 1.5 m in length or less. It is
evident from the sampled intervals that only materials containing visible sulphide
minerals were sampled.
11.2 2005 AND 2006 BELL COPPER SAMPLING
During the 2005 and 2006 drill programs while the Property was owned by Bell Copper, a
rigorous quality assurance (QA)/quality control (QC) program was implemented, including:
sample security measures, chain of custody documentation, field blanks, certified
standards, field duplicates, and lab duplicates. Samples were assayed at Acme
Analytical Laboratories Ltd. (AcmeLabs) in Vancouver, BC.
11.2.1 SAMPLE SECURITY
Samples were assigned sequential numbers, and individually bagged and sealed. All
sampling was documented on Microsoft Excel® spreadsheet logs, as well as sample tags
left in the core boxes.
11.2.2 CHAIN OF CUSTODY
Samples were shipped in batches. Batches were collected into sealed rice bags.
Logbooks of batch preparation were maintained, and email or telephone receipt
confirmation was requested from the laboratory.


11.2.3 FIELD BLANKS
The first sample in every batch, as well as every 25th sample, was a field blank. These
were collected on-site from unmineralized intervals.
11.2.4 CERTIFIED STANDARDS
Certified standards were inserted at a rate of one standard per 25 samples, and bagged
and labeled as regular samples. Standards used were:
 GD-1 Pulp (Granduc matrix-matched certified standard)

 GD-3 Pulp (Granduc matrix-matched certified standard)
 SF-2t Pulp (ACME lab standard)
 G-1 Pulp (ACME lab standard).
11.2.5 FIELD DUPLICATES
Both halves of split core were submitted at a rate of one duplicate core sample per 25
samples.
11.2.6 LAB DUPLICATES
AcmeLabs was asked to make both split and pulp duplicates at a rate of one duplicate
per 25 samples.
11.3 CASTLE SAMPLE PREPARATION AND ANALYSES
All aspects of sampling, handling, and dispatching of samples to the assay laboratory was
conducted or supervised by qualified geologists, under the direction of Brad Leonard,
P.Geo., Exploration Manager for Castle.
All core was photographed and logged for geological, geotechnical, and structural
features prior to sampling.
Drill core was cut lengthwise with a diamond saw, or split with a mechanical splitter
(predominantly splitter); samples were collected from the half core, which left half core
for reference. Typically sample lengths were 1 m in mineralized zones and 2 m in weakly
mineralized intervals. All rock types were sampled where visual mineralization could be
identified. Geologists marked out sample intervals, typically sampling continuously
across the mineralized zones, and included shoulder samples outside of the visual
mineralization. Care was taken to split the core perpendicularly to the sulphide
mineralization orientation.


11.3.1 2010 TO 2011 ECO TECH/ALS
As previously reported in Johnson (2012):
All samples submitted for assaying are sealed in individual plastic bags on site and
shipped in sealed sacks by helicopter and truck to the [Eco Tech Laboratories Ltd.] Eco
Tech/ALS in Stewart BC, Canada, which is located only 40 km from the site. Pulps
were created in Stewart and then shipped to Kamloops or Vancouver for analysis. All
sample pulps and rejects are currently stored at a secure storage location in Stewart
BC.
During the 2010-2011 drilling programs Castle used on primary laboratory, Eco Tech,
for preparing and assaying all core samples collected on the Granduc Project. During
the 2011 program, Eco Tech was purchased by the ALS Group (“ALS”), a large
worldwide laboratory company. ALS continued to operate the Stewart based
preparation facility in a similar fashion to Eco Tech. Pulp analysis moved from the Eco
Tech Kamloops analytical facility to the Vancouver based ALS facility during the
program.
The Eco Tech Laboratory is part of the Stewart Group, a global assay group and now
part of ALS. The geochemical and assay division participates in round robin
evaluations run by Geostats and CANMET. Eco Tech is registered for ISO 9001:2008
by KIWA International (TGA-ZM-13-96-00) for the “provision of assay, geochemical and
environmental analytical services”. The laboratory operates an extensive quality
control/quality assurance program, which covers all stages of the analytical process
from sample preparation through to sample digestion and instrumental finish and
reporting. All work is supervised by a BC certified assayer.
ALS Minerals is the leading full-service provider of analytical geochemistry services for
the global mining industry. With over 60 laboratories located in key mining districts on
six continents, ALS Minerals provides unparalleled global coverage for a mobile
industry that seeks consistent reliability and quality in the analytical work that is so
vital to success. At Eco Tech/ALS, core samples were prepared using industry
standard preparation procedures. After reception, samples were organized into
batches and weighed. The entire sample was then crushed, split and pulverized as
follows; fine crush entire sample to >70 percent passing two millimetres (-10 mesh),
split off 250 gram (“g”) subsample and pulverize split to >95 percent passing -140
mesh screen.
All core samples submitted to Eco Tech/ALS were assayed for:
 gold, using a fire assay procedure on a 30 g sub-sample with atomic absorption

spectroscopy (AAS) finish
 a suite of 33 elements using a single acid aqua regia digestion and inductively
coupled plasma (ICP)-atomic emission spectroscopy (AES) on a 0.5 g sub-
sample. High-grade and over-limit analyses were analyzed using the same
single acid aqua regia digestions with either an AAS or AES finish.


The Eco Tech lower detection limits are summarized in Table 11.1 (Johnson 2012).
Acme Labs (“Acme”) was used for umpire pulp duplicate analysis. The analysis
techniques selected for the duplicate analyses are similar to those used by Eco Tech
and ALS. Acme is ISO 9001:2008 accredited for geochemical analysis.
Table 11.1 Eco Tech/ALS Assay Detection Limits
Multi-element ICP-AES Analysis
Element Unit LDL Element Unit LDL
Ag ppm 0.5 Mn ppm 5
Al* % 0.01 Mo ppm 1
As ppm 5 Na* % 0.01
Ba* ppm 2 Ni ppm 1
Be* ppm 1 P % 0.001
Bi ppm 5 Pb ppm 3
Ca* % 0.01 S* % 0.01
Cd ppm 1 Sb ppm 5
Co ppm 1 Sn* ppm 5
Cr* ppm 2 Sr* ppm 2
Cu ppm 2 Ti* ppm 10
Fe* % 0.01 U ppm 5
Hg ppm 5 V ppm 2
K* % 0.01 W* ppm 5
La* ppm 2 Y* ppm 1
Li* ppm 2 Zn ppm 2
Mg* % 0.01 - - -
Au ppb 30 Fire Assay (Au2-30)
11.3.2 2012 AGAT LABORATORIES
All samples submitted for assay were sealed in individual plastic bags on-site, and
shipped in sealed rice bags via helicopter twice per week to the Tide Tunnel camp, or on
occasion directly to Stewart when space permitted. At the Tide Tunnel camp, samples
were stored in a secured sea-can, and then transported by Castle personnel to Stewart.
Upon arrival in Stewart, they are received by Castle personnel, verified to be complete,
and signed over to Bandstra Transportation Systems Ltd. (Bandstra). Bandstra
transports the samples via highway to AGAT Laboratories Ltd. (AGAT) in Terrace, BC,
where AGAT personnel sign for the shipment. A chain-of-custody document was created
to ensure these procedures were followed.
AGAT is a highly specialized, Canadian-based company that provides laboratory services

worldwide. They offer specialized geochemical and assaying services for the mineral
exploration industries. Their mining geochemistry laboratory is accredited to


International Organization for Standardization (ISO) 17025 by the Standards Council of
Canada (SCC).
All of AGAT’s sample preparation facilities are also accredited to the ISO 17025 standard.
AGAT prepared the Castle 2012 samples as follows:
 drying
 75% crush to 2 mm
 split to 250 g samples
 85% pulverized to 75 µm
 screened.
Elements were analyzed by first solubilizing the target elements using an aqua regia
digest, then finishing with ICP-optical emission spectrometry (OES) (Table 11.2). For base
metals over-limit, a second AAS finish was executed. For gold, samples were processed
using fire assay, with an ICP-OES finish. If over-limit, they were re-processed using a
gravimetric finish. Oxides were analyzed using lithium borate fusion with an ICP-OES
finish, and a sodium peroxide fusion with an ICP-OES finish. Finally, specific gravity was
measured using a pycnometer.
Table 11.2 AGAT Laboratories Detection Limits
Multi-element ICP-OES Analysis
Reported Reported
Element Unit Detection Limit Element Unit Detection Limit
Ag ppm 0.2 Mo ppm 0.5
Al % 0.01 Na % 0.01
As ppm 1 Ni ppm 0.5
Au ppm 0.001 P ppm 10
B ppm 5 Pb ppm 0.5
Ba ppm 1 Rb ppm 10
Be ppm 0.5 S % 0.005
Bi ppm 1 Sb ppm 1
Ca % 0.01 Sc ppm 0.5
Cd ppm 0.5 Se ppm 10
Ce ppm 1 Sn ppm 5
Co ppm 0.5 Sr ppm 0.5
Cr ppm 0.5 Ta ppm 10
Cu ppm 0.5 Te ppm 10
Fe % 0.01 Th ppm 5
Ga ppm 5 Ti % 0.01
Hg ppm 1 Tl ppm 5
In ppm 1 U ppm 5
K % 0.01 V ppm 0.5
table continues…


Multi-element ICP-OES Analysis
Reported Reported
Element Unit Detection Limit Element Unit Detection Limit
La ppm 1 W ppm 2
Li ppm 1 Y ppm 1
Mg % 0.01 Zn ppm 0.5
Mn ppm 1 Zr ppm 5
11.4 SPECIFIC GRAVITY DATA
Beginning in late 2010, Castle measured all samples for specific gravity. Initially, both in-
house and external measurements were conducted. Both used a differential weight of
10 to 20 cm samples within air and water. The laboratory measurements were made
using wax-sealed samples; the in-house measurements were not. During the re-sampling
procedure, specific gravity measurements were taken for historic core as well. There is
also a subset of the historic drill data that does contain specific gravity data. In 2012,
specific gravity data was measured by the laboratory using a pycnometer.
11.5 MAGNETITE DATA
To facilitate magnetite estimation, a small re-analysis program was undertaken in the fall
of 2012. Tetra Tech selected 125 samples. These samples were shipped to AGAT to
undergo the analyses outlined in the following sections.
11.5.1 DAVIS TUBE MAGNETIC SEPARATION
The Davis Magnetic Tube Tester utilizes an extremely powerful electromagnet and an
agitator to separate magnetic particles from non-magnetic particles. The resulting
magnetic concentrate can then be weighed to determine a weight-percentage of
magnetic material in the original sample. Concentrates from the Davis Tube testing are
then analyzed by Lithium Borate Fusion.
11.5.2 LITHIUM BORATE FUSION WITH AN XRF FINISH
Lithium Borate Fusion is a strong fusion technique consisting of adding a mixture of
lithium metaborate and tetraborate to the sample, heating it to molten, and then
digesting it in a weak nitric acid solution. This technique is particularly suitable for
dissolving acidic oxides. It was performed on the initial un-separated samples as well as
the Davis Tube separated magnetic and non-magnetic concentrates. The x-ray
fluorescence (XRF) finish provides analytical results for 15 oxides, including Fe2O3.


11.5.3 SATMAGAN MAGNETITE ANALYSIS
Satmagan measures the total magnetic moment of the analyzed sample to obtain an
accurate measure of the magnetite content. The analysis achieves this by measuring the
force acting upon the sample in a magnetic field with a spatial gradient. The analysis is
ideally used on a sample with only one magnetic component, but can also be applied to
mixtures of magnetic components to estimate dominant concentrations and/or dominant
specific magnetic moments.
11.5.4 BULK X‐RAY DIFFRACTION MINERALOGY
X-ray diffraction (XRD) analysis provides precise identification of mineralogical
compositions and is a semi-quantitative analysis of the rock composition (bulk fraction)
and an analysis of the clay fraction.
11.6 QA/QC PROGRAMS
Castle has applied QA/QC programs throughout its exploration activities in an effort to
meet industry best practices. All exploration activities—surveying, drilling, logging,
sampling, sample shipment, assaying, and database management—have been
supervised by appropriately qualified geologists.
More specifically, analytical QA/QC procedures include both internal and external quality
control measures.
11.6.1 2010 TO 2011 QUALITY CONTROL PROCEDURES
The following is an excerpt from Johnson (2012).
Eco Tech implemented internal laboratory measures consisting of inserting quality

control samples (blanks and certified reference materials and duplicate pulp) within
each batch of samples submitted for assaying.
CRI also implemented external analytical quality control measures. According to CRI’s
procedures;
This included inserting QC samples (blanks and certified reference standards) with
each batch of core drilling samples. CRI inserted blanks at a frequency of one in 20
samples and standards at a frequency of one in every 35 samples. CRI routinely
inserted duplicate samples of quartered core with each batch at a frequency of one
duplicate every 50 samples. Pulp duplicates were completed at a frequency of one
duplicate for every 50 samples, with the duplicate sent to an umpire laboratory Acme
for similar analysis.
Blank material is locally derived quartzite material, which is relatively devoid of copper,
gold and silver mineralization. The reference standard material used by CRI was a
combination of certified reference standards and non-certified standards.


11.6.2 2012 QUALITY CONTROL PROCEDURES
AGAT implements internal laboratory quality assurance measures. Regular insertion of
quality control samples, including blanks, duplicates, and certified reference materials,
was performed during analysis of each batch of samples.
Castle also implements their own quality assurance using quality control samples. The
following is a breakdown of the quality control procedures:
 One blank was inserted for every 20 samples, followed by a mineralized- to

strongly-mineralized sample. The blanks comprised field blanks derived from a
granite boulder field on the South Leduc Glacier, which were visually inspected
for the presence of sulphides.
 Three reference standards were inserted for every 35 samples. The reference
standards consisted of three references: Oreas 50c, Oreas 153a, and Oreas
54p. A fourth standard, Oreas 96, was inserted in each hole.
 Referee samples were taken every 50th sample. The lab was instructed to
create two pulps, and provide one pulp back to Castle to be analyzed at the
Activation Laboratories Ltd. (ActLabs) lab in Stewart, BC.
 Duplicate samples were inserted every 50th sample. Duplicates consisted of
quartered core from the same interval inserted in two adjacent samples.
11.6.3 QA/QC RESULTS
Insertion rates for QA/QC samples roughly correspond to Castle’s sample procedures
(see Table 11.3). As noted by SRK, a 5% insertion rate would be preferable for standards
as well as duplicates.
Table 11.3 2012 Granduc Drill Program Analytical Quality Control Data
2012 Core (%)
Sample Count 7,123 -
Blanks 388 5
Standards 228 3
STD 153a 65 -
STD 50c 69 -
STD 54p 58 -
STD 96 36 -
Field Duplicates 145 2
Pulp Duplicates 118 2
Total QC Samples 879 12


FIELD BLANKS
Field blanks are used to monitor contamination during sample preparation at the lab,
and therefore should be relatively void of the elements of interest. As in 2010 and 2011,
the field blanks consistently returned copper values. There does not appear to be a bias
or trend to the data; therefore, as in 2010 and 2011, the copper values are probably
background values inherent in the blank material.
Also as in 2010 and 2011, the average copper value in the blanks is only approximately
22 ppm, which is several orders of magnitude below the resource cut-off of 0.8%. This is
not a particular cause for concern, but it may be preferable in this case to acquire a
reference blank that would truly test for lab contamination. Figure 11.1 displays the
2012 field blank results.
As in 2010 and 2011, the blanks consistently returned below-detection limit for both
silver and gold. Overall, the performance of the blanks is satisfactory for this level of
study.
Figure 11.1 Granduc 2012 Field Blank Performance
REFERENCE STANDARDS
In 2012, Castle utilized four reference standards: OREAS 50c, OREAS 153a, OREAS 54Pa
and OREAS 96. The first three standards are for copper and gold, with the following
expected grades:


 0.742%, 0.712%, 1.55% for copper
 0.836 ppm, 0.311 ppm, and 2.9 ppm for gold.
The fourth standard was used only for copper, with an expected grade of 3.91%.
The performance of the standards for copper was sub-par. For OREAS 50c, 46% of the
results were outside of two standard deviations. For OREAS 153a, 30% were outside two
standard deviations. For OREAS 54Pa, 41% were outside two standard deviations. For
OREAS 96, 27% of the results were outside two standard deviations. Gold results were
more encouraging: 13%, 16%, and 14%, respectively, falling outside of two standard
deviations.
Despite the high failure rates, there does not appear to be any bias or trend in the data;
this indicates that the lab results were accurate, despite an apparent lack of precision.
Tetra Tech recommends that Castle to monitor these standard results more carefully, and
ask the lab to re-run any failures. This may be a result of the lab’s preparation, and
should be addressed with them directly.
Figure 11.2 to Figure 11.8 show the results for the four reference standards used in
Castle’s 2012 drill program.
Figure 11.2 Granduc 2012 Drill Program – OREAS 50c Cu Results


Figure 11.3 Granduc 2012 Drill Program – OREAS 50c Au Results
Figure 11.4 Granduc 2012 Drill Program – OREAS 153a Cu Results


Figure 11.5 Granduc 2012 Drill Program – OREAS 153a Au Results
Figure 11.6 Granduc 2012 Drill Program – OREAS 54Pa Cu Results


Figure 11.7 Granduc 2012 Drill Program – OREAS 54Pa Au Results
Figure 11.8 Granduc 2012 Drill Program – OREAS 96 Cu Results


DUPLICATES
Castle employs both a field duplicate (quarter split core) as well as a check pulp
duplicate. The former are run as consecutive samples at the primary assay lab, the latter
is prepared at the primary assay lab, with pulps being returned to Castle for analysis at a
competing lab.
Due to the inherent heterogeneity of the material at the Property, duplicates are prone to
imprecision. This is especially true of the quarter split field duplicates. Figure 11.9
displays a scatter of the original versus field duplicate for the 2012 drill season.
Although there is a slight bias to lower values at higher copper grades, what is most
evident from this scatter is that not enough duplicates were taken at elevated copper
grades, giving an insufficient amount of data for comparison. The results are perfectly
reasonable under the circumstances.
Figure 11.9 Granduc 2012 Drill Program – Bias Chart for Field Duplicate Assays
11.7 QP OPINION
The report authors agree that the sample preparation, security, and analytical procedures
meet industry best practice and are adequate for the purposes of this technical report.


12.0 DATA VERIFICATION
12.1 PRE‐2012 DATA
To validate the collar, assay and downhole survey database, 105 drillholes
(approximately 5% of the database) were randomly selected for verification. These
drillholes were verified against the original paper logs, digital logs, downhole survey files,
and assay certificates (where available). Forty percent of the holes, representing 42% of
the historical subset of the randomly chosen holes, did not have corresponding paper
logs. Many of these documents would have been lost in a fire that occurred after the
mine was closed in 1984. Where paper logs were unavailable, drillholes were verified
against the original mine sections in Datamine™ Studio 3.
Data entry errors were found to be approximately 8 to 10% for collar locations, 2 to 5%
for downhole surveys, and less than 1% for assay results. Most of these errors occurred
in the historical subset of the data, and were related to the conversion of imperial data to
metric, or mine grid to UTM grid. Errors in the survey data that occurred in more recent
drilling were a result of the systematic removal of highly magnetic intervals, which is
considered good practice to reduce the effect of magnetic rocks on the sensitivity of
magnetic downhole survey tools.
Due to the nature of the historical database, errors of this frequency are not uncommon;
however they do represent unnecessary error. Tetra Tech geo-referenced and imported
72 scanned historical paper sections and plans for validation purposes to mitigate these
errors. Tetra Tech then completed an extensive visual validation of all historical drilling
using these plans and sections, to check historical data for hole numbers, locations, and
downhole surveys. In many cases, assay validation was also possible as mineralized
intervals were frequently marked on the sections. Figure 12.1 is a 3D “snapshot” that
demonstrates the validation process.


Figure 12.1 3D View Looking North at Section 12100N (3D Drillholes in Yellow)


As a result of this process, data from 45 holes was removed from the database (Table
12.1), and data from 28 separate holes were edited (Table 12.2) to match sections,
plans, and scanned historical paper logs. Removed holes were predominantly located in
the Main Zone, where the abundance of drill data allowed for removal without losing data
integrity and density. The edited holes were predominantly located in the North Zone,
where the lower density of drill data facilitated a need for as many historical drillholes as
possible.
Table 12.1 Drillholes Removed from Database (Located Incorrectly)
101-72 119-64 254
106-50 123-38 260
106-58 125-42 281
106-91 126-10 292
110 126-13 311
114 126-42 320-5
114-2S 127-15 348-2
115-12 128 354-34
115-53A 147-2 94
115-8 160 97-1S
116-20 161 AC2
116-27A 165 AC230-55
117-16 184 AP110-20
117-9C 228 AP2
119-58 242 GD11-036A
Table 12.2 Drillholes Edited to Match Geo‐referenced Historical Sections and Paper Drill
Logs
136-1 146-5 153-1 244
142-1 146-6 153-2A 246
142-2 146-7 153-3 247
146-1 146-8 153-4 248
146-2 147-1A 158-2A 249
146-3 147-1B 189 262
146-4 147-1C 243 270
12.2 2012 DRILL DATA
Tetra Tech executed a complete validation of all 2012 drill data. This validation included
comparing original logs to the database for collar information, geological logs, assays,
and downhole surveys, as well as a thorough check of the QA/QC program for this drill
campaign.


COLLAR INFORMATION
For the 2012 drilling program, Castle utilized Flairbase Inc.’s Corelog for logging. This
means that the database is merely an export from the Corelog database. All information
in the database perfectly matches that entered into Corelog. Drill collar location
information can be verified against the original digital exports from the Reflex™ APS GPS
unit. This data matches that in the database 100%. Owing to the mountainous terrain,
vertical accuracy of any GPS measurement (differential or otherwise) can be quite low, so
the Z collar values were validated against the digital terrain model in Datamine™ Studio 3.
It was found that 18 holes had erroneous Z values with differences from the terrain
model of greater than 10 m (see Table 12.3). These values were corrected to match the
terrain. Any holes drilled on the South Leduc Glacier were not corrected, as the terrain
model is not up-to-date where the glacier is concerned.
Table 12.3 2012 Drillholes with Corrected Z Collar Values
GD12-004A GD12-NZ-016
GD12-NZ-002 GD12-NZ-017
GD12-NZ-003 GD12-NZ-018
GD12-NZ-007 GD12-NZ-019
GD12-NZ-009 GD12-NZ-021
GD12-NZ-011 GD12-NZ-022
GD12-NZ-013 GD12-NZ-023
GD12-NZ-014 GD12-NZ-024
GD12-NZ-015 GD12-NZ-025
GEOLOGICAL LOGS
All geological logs perfectly match the original Corelog database.
ASSAYS
Assays were validated against the original lab issued certificates and Microsoft Excel®
files. One hundred percent of the assays in the database match those on the certificates.
DOWNHOLE SURVEYS
Downhole surveys were validated against the original digital exports from the Reflex™
Gyro gyroscopic downhole survey tool. Of the 40 holes drilled in 2012, 10 of them were
either missing the original survey files, or had data that did not match the original survey
files. Discussions with Castle indicate that re-surveying had been completed on many of
these holes and that the re-surveyed data files were misplaced and cannot be located.
The differences do not exceed 3%, except in holes GD12-005A and GD12-009. Since
GD12-005A did not intersect mineralization and was to the south of the mineralized
domains, it was not of further issue. Hole GD12-009 was checked carefully against the
intersection of mineralization with the mineralized domains, and the location of the
mineralization in this hole matches what would be expected based on the surrounding


information. It is suggested that in future drill campaigns Castle revises its retrieval and
storage of downhole survey data, so that this problem is not repeated.
12.3 MAGNETITE RE‐ASSAYING
Results from the magnetite analyses were not entered into the database by Castle but
were sent to Tetra Tech for integration with the existing drillhole database. Verification
was done on the results by comparing iron values in the new data (recalculated from
Fe2O3 results) to the original iron assays. Allowing for deviation due to the heterogeneity
of the sample intervals, the results corresponded extremely well, with a correlation of
0.98.
12.3.1 RESULTS
In the Granduc database, as with all exploration/mining databases, there are errors,
particularly in the historical dataset. Tetra Tech has taken measures to mitigate the
effect of these errors on the estimation process. For the purposes of this technical report
and resource estimation, the database is satisfactory.
12.4 TETRA TECH SITE VISITS
Tetra Tech performed two site visits to Castle’s Stewart, BC operations and the Granduc
Mine/Leduc Exploration Camp. Due to the historical mining of the deposit, it was not
necessary to take check assay samples, as current drilling results have the same ore
characteristics and grades.
12.4.1 SITE VISIT JULY 18 AND 19, 2012
Scott Zellerer, P.Geo., visited Castle’s offices in Stewart on July 18, 2012 and flew via
helicopter to the Tide Tunnel camp (Figure 12.2). Access to the underground mine is via
a 17 km tunnel from the Tide Tunnel camp west under mountains and glaciers. The
tunnel has been rehabilitated, so that access via Kubota or similar mine vehicles is
possible. The mine itself has limited access since much of the workings have not been
rehabilitated to date. The purpose of visiting the underground mine was to investigate
the potential of the mineralization to be domained into higher- and lower-grade portions.
It was quite evident that this would indeed be possible, as evidenced in Figure 12.3. This
confirmed the sharp nature of the boundary between high- and low-grades as inferred
from preliminary analysis of the drill data.


Figure 12.2 Tide Tunnel Camp – Access to Tide Tunnel and Historical Mill Facility
Figure 12.3 106 Cross‐cut Drift, 2600 Level – Cu‐Sulphide Mineralization
On July 19, 2012, weather prevented a visit to the Leduc exploration camp. Instead, a
visit was made to Castle’s core storage at More Core Diamond Drilling Services’ yard.
During this visit, numerous holes were investigated to check visible sulphides against
assay results. This included both historical drillholes, as well as recently drilled Castle
core from the 2010 and 2011 programs.
Due to the weather and time restrictions, a follow-up visit was planned for later in the
season.


12.4.2 SITE VISIT AUGUST 14 AND 15, 2012
Robert Morrison, Ph.D., MAusIMM (CP), P.Geo., visited Castle’s Leduc Exploration Camp,
the underground workings of the Granduc Mine, and Castle’s Stewart office on August 14
and 15, 2012. He also visited the AGAT lab facility in Terrace where Castle has their core
samples assayed.
LEDUC EXPLORATION CAMP

The Leduc Exploration camp (Figure 12.4) is located approximately 40 km northwest of
the town of Stewart, British Columbia. It is also approximately 18 km west of the Tide
Tunnel Camp, where the entrance to the Tide Tunnel resides. Access to the Leduc Camp
is via helicopter, or through the mine via the Tide Tunnel.
During this site visit, core drilling, logging, and sampling practices were investigated and
confirmed to follow those outlined in Section 11.0. QA/QC practices were also
confirmed. Drilling takes place on the mountains as well as on the glaciers (Figure 12.5).
It is common for more than one hole to be drilled from a drill pad. Core is slung by
helicopter to the camp, where it is logged and sampled (Figure 12.6). Afterwards, core
samples and core are transported via helicopter to the Tide Tunnel Camp, for transport
back to Stewart.
Figure 12.4 Leduc Exploration Camp


Figure 12.5 Diamond Drill Location and Service Tent
Figure 12.6 Core Logging Tent at the Leduc Camp


GRANDUC COPPER MINE
The Granduc Mine was accessed via the 2810 portal (Figure 12.7), and an investigation
was made on the 2600 Level of the mine. Ground conditions and ventilation were
satisfactory. Structural and stratigraphic controls for mineralization were investigated to
facilitate understanding of the deposit to aide in estimation.
Figure 12.7 Granduc Copper Mine – 2810 Portal Access
12.5 REVIEW OF PREVIOUS STUDIES
Early in 2012, SRK Consulting (Canada) Inc. (SRK) completed a NI 43-101 report on the
Property and performed extensive data validation of the deposit (see Johnson (2012)).
Tetra Tech reviewed all previous data validation prior to commencing internal verification
of the database.
In general, Tetra Tech’s data verification validates and supports the data verification work
completed previously by SRK on the Granduc deposit.
12.6 QP OPINION
The current QP agrees that the data is adequate for the purposes used in the technical
report.


13.0 MINERAL PROCESSING AND
METALLURGICAL TESTING
From 1971 to 1984 Granduc Mine produced over 15 Mt of ore and approximately
180,000 t of copper. The estimated average head grade of copper was approximately
1.29%. Approximately 95% of the feed copper was recovered to a final concentrate. In
1984, with the shutdown of the mine, the Granduc processing facility was removed and
reclaimed and no facilities, except the mill foundations, remain on site. Table 13.1
summarizes the documented production at the Granduc Mine.
Table 13.1 Documented Production at Granduc Mine – 1971 to 1984
Ag Au Cu Milled Ag Grade Au Grade Cu Grade
Year (g) (g) (kg) (t) (g/t) (g/t) (Cu %)
1971 12,983,667 187,955 17,467,617 1,359,730 9.55 0.14 1.28
1972 13,570,114 229,820 21,702,538 1,895,884 7.16 0.12 1.14
1973 20,259,654 342,257 31,548,799 2,538,242 7.98 0.13 1.24
1974 19,216,895 315,198 29,055,142 2,457,307 7.82 0.13 1.18
1975 9,604,482 162,606 16,222,977 1,499,585 6.40 0.11 1.08
1976 10,373,566 154,800 15,569,210 1,315,905 7.88 0.12 1.18
1977 8,631,953 130,011 13,262,755 1,252,362 6.89 0.10 1.06
1978 9,056,914 160,460 14,780,100 741,648 12.21 0.22 1.99
1979 - - - - - - -
1980 - - - - - - -
1981 4,850,000 75,283 7,626,025 613,936 7.90 0.12 1.24
1982 3,606,800 52,627 5,380,913 500,335 7.21 0.11 1.08
1983 7,950,859 133,273 11,925,042 1,031,805 7.71 0.13 1.16
1984 3,944,057 55,771 5,602,592 352,630 11.18 0.16 1.59
Total 124,049,000 2,000,000 190,144,000 1,559,000 7.97 0.13 1.22
The details of the historic processing from the Granduc concentrator will be discussed in
this section, as well as the test results from recently conducted metallurgical testing
programs of drill samples from the current Granduc property.


13.1 METALLURGICAL TEST WORK REVIEW
13.1.1 INTRODUCTION
The Project consists of several mineralization zones which include the Main, North, and
South Zones. The Main Zone makes up more than 80% of the Property, and therefore
was the zone selected for metallurgical testing.
The key valuable metals in the mineralization of the Project are copper, gold, and silver.
There is also a significant amount of magnetite in some areas of the Main Zone.
Since 2011 there have been two metallurgical testing programs conducted, both by ALS
Metallurgy (formerly G&T) in Kamloops, BC.
 2011 Test Work – KM3062, Preliminary Metallurgical Assessment of the

Granduc Project.
 2012 Test Work – KM3503, Metallurgical Assessment of the Granduc Project.
Tetra Tech has reviewed the test work and the summary of the results can be found in
the following sections.
13.1.2 2011 TEST WORK
In September 2011, ALS Metallurgy (formerly G&T) completed a preliminary metallurgical
test program on samples from the Project with the objective to support this PEA report.
The samples tested in the program were meant to be representative of the Granduc Main
Zone. All of the samples received were used in the construction of a global composite
sample, which indicated a copper feed grade of approximately 1.5% and gold and silver
feed grades of approximately 0.2 and 9 g/t respectively. These head grades are very
similar to the average head grades processed at the Granduc Mine from 1971 to 1984.
While ore hardness tests indicated that the sample was relatively soft in respect to
breakage in a ball mill (BWi of 11.7 kwh/t), results also showed the sample was
moderately hard in terms of breakage in a SAG mill (derived A*b value was 37.5, while
the t10 at 1 kWh/t value was 28.7). The sample was also of low abrasivity (Ai measured
at 0.1234).
From a limited number of open circuit rougher and cleaner flotation tests, a primary grind
sizing targeting a nominal 160 µm K80 and a regrind discharge sizing targeting a nominal
20 µm K80 were selected for locked cycle testing. The reagent consumption was low, as
the locked cycle tests were conducted at natural pH, and required less than 10 g/t PAX
collector, and less than 85 g/t MIBC frother.
Results from duplicate locked cycle flotation tests indicated that, on average, after three
stages of cleaning, approximately 92% of the feed copper was recovered to a copper
concentrate containing 30% copper. The average feed gold and silver recovery to the


copper concentrate from both tests was approximately 66 and 91%, respectively,
containing approximately 2.8 g/t gold and 189 g/t silver.
The slightly better performing of the two locked cycle flotation tests indicated that after
two stages of cleaning, approximately 95% of the feed copper, 79% of the feed gold, and
91% of the feed silver was recovered into a final concentrate containing approximately
27% copper, 2.7 g/t gold, and 177 g/t silver.
Concentrations of deleterious elements appeared to be below typical smelter penalty

thresholds.
ALS Metallurgy recommended that further metallurgical and mineralogical test work be
conducted to optimize flotation parameters, particularly the primary and regrind mill
discharge sizes.
A summary of the activities performed in this metallurgical test program is provided in the
following subsections.
PROPERTIES OF THE FEED

The samples used in this program were received by ALS Metallurgy on July 11, 2011 and
consisted of 29 half core samples representing the Granduc Main Zone and had a total
estimated weight of approximately 171 kg. These samples were selected from
mineralized core intervals from three drillholes (GD11-003, GD11-004, and GD11-006)
located in the Main Zone. Drillhole GD11-003 represented 65% of the composite and
drillhole GD11-006 represented 26% of the composite with only 9% contributed from
drillhole GD11-004.
A master composite sample was created using all of the samples received, and labelled
“Main Zone Composite 1”. The head assays of the sample are shown in Table 13.2.
Table 13.2 Chemical Content Data
Element for Assay (% or g/t)
Sample Name Cu Fe S Ag Au
Master Zone Composite 1 1.47 18.7 3.17 9 0.16
Note: Au and Ag are reported in g/t, all others are reported in %.
Assaying of the Master Zone Composite 1 sample measured copper, gold, and silver
head grades of approximately 1.5%, 0.2 g/t, and 9 g/t, respectively. The iron and sulphur
contents of the sample was 18.7 and 3.17% respectively, which would imply that most of
the sulphur present in the sample is associated with copper, likely as chalcopyrite. The
assays also suggest that the pyrite content in the sample is likely low.
Ore hardness testing of the sample included BWi, Ai, and SAG mill comminution (SMC)
tests. Results from these tests are shown in Table 13.3.


Table 13.3 Ore Hardness Data
BWi SMC A*b SMC t10 @
Sample Name (kWh/t) Ai value 1 kWh/t value
Master Zone Composite 1 11.7 0.1234 37.5 28.7
On the basis of the BWi test, the sample tested can be considered soft, at 11.7kwh/t.
The value measured from the Ai test was approximately 0.12, which indicates the sample
to be of low abrasivity.
SMC test results indicate the sample to be moderately hard in terms of breakage in a
SAG mill. The data was generated by JKTech Pty Ld. and shows the A*b value of the
sample was 37.5 and the t10 at 1 kWh/t was 28.7.
TEST PARAMETERS AND FLOWSHEETS

The metallurgical tests consisted of five open circuit rougher flotation tests, two open
circuit cleaner tests, and two locked cycle flotation tests. There was also one Davis Tube
magnetic separation test conducted on a tailings product from of the flotation tests to
assess the potential to recover a magnetic concentrate.
In the rougher flotation tests, the effect of primary grind sizing was investigated. For
these tests the flotation feed was ground to sizes ranging between 112 to 189 µm K80.
Except for one test in the program, all tests were conducted at natural pH. The test which
examined a higher pH of 10.0 did not show any significant improvement in overall
metallurgical performance.
PAX was used as the sulphide mineral collector. The dosages required for the tests were
low, and did not exceed an addition of more than 9 g/t in any of the tests.
MIBC was used as the frother in all tests and reagent additions ranged from 15 to 45 g/t
in the rougher circuit and 16 to 60 g/t in the cleaner circuit in all tests.
In the open circuit cleaner and locked cycle flotation tests, the rougher concentrates were
reground to sizes ranging between 16 and 32 µm K80.
The flowsheet and test parameters used in the metallurgical test program are shown in
Figure 13.1.


Figure 13.1 Test Parameters and Flowsheets
Note: The copper rougher tail from Test 8 was subjected to a Davis Tube test.


OPEN CIRCUIT FLOTATION TEST RESULTS
The feed copper recovery to the rougher concentrate in all tests ranged between 95 to
98% containing 10 to 15% of the feed mass. The rougher concentrate also recovered
between 90 to 95% of the feed gold and silver.
While a primary grind size of 160 µm K80 was chosen to conduct the locked cycle
flotation tests, a coarser grind size closer to 200 µm K80 may be more efficient for
processing the Granduc sample.
After three stages of cleaning, the results from the two open circuit cleaner tests
indicated that approximately 90% of the feed copper was recovered to a final concentrate
containing approximately 30% copper. Increasing the fineness of the reground rougher
concentrate from about 32 to 18 µm K80 improved the final concentrate grade by about
5%.
Though a nominal target of 20 µm K80 was chosen to conduct the locked cycle flotation
tests, further open circuit cleaner tests should be conducted to confirm an optimal
regrind size.
The results from all of the open circuit flotation tests are presented in Figure 13.2.


Figure 13.2 Open Circuit Flotation Test Results
LOCKED CYCLE FLOTATION TEST RESULTS

The results from the two locked cycle flotation tests with three stages of cleaning showed
that, on average, approximately 92% of the feed copper, 66% of the feed gold, and 86%
of the feed silver was recovered to a final concentrate containing approximately 30%
copper, 2.8 g/t gold, and 189 g/t silver.


The results from the locked cycle flotation tests are illustrated and summarized in Table
13.4.
Table 13.4 Summary of Locked Cycle Flotation Test Results
Weight Assay (% or g/t) Distribution (%)
Product g % Cu Fe S Ag Au Cu Fe S Ag Au
Test 8
Flotation Feed 192.5 100 1.50 21.0 3.00 10.1 0.18 100 100 100 100 100
Copper Concentrate 413.5 4.8 29.1 31.8 35.0 189 2.78 93.0 7.3 55.9 89.9 74.9
Copper 1st Cleaner Tails 3,413.0 10.3 0.68 21.4 9.23 6.55 0.31 4.6 10.5 31.6 6.7 17.7
Copper Rougher Tails - 84.9 0.04 20.3 0.44 0.40 0.02 2.4 82.2 12.4 3.4 7.4
Test 10
Flotation Feed 3,991.0 100 1.49 19.5 2.63 9.8 0.21 100 100 100 100 100
Copper Concentrate 169.9 4.3 31.6 29.2 31.5 189 2.81 90.4 6.4 51 81.9 57.5
Copper 1st Cleaner Tails 362.4 9.1 1.03 22.0 9.84 10.1 0.55 6.3 10.3 34 9.3 24
Copper Rougher Tails 3,458.7 86.7 0.06 18.7 0.45 1.00 0.04 3.3 83.4 15 8.8 18.6
Note: Gold and silver assays are reported in g/t, all others reported in %.
The feed mass recovery to the rougher concentrate was approximately 2% lower in the
second locked cycle test, which may be an explanation for the some of the lower final
concentrate metal recoveries.
After two stages of cleaning, the metallurgical performance was still good. In the better
performing test (Test 8), approximately 95% of the feed copper, 79% of the feed gold,
and 91% of the feed silver was recovered into a final concentrate containing
approximately 27% copper, 2.7 g/t gold, and 177 g/t silver.
A subsample of the final concentrate from Test 8 was analyzed to determine the quality
of the concentrate. Results from the analysis would suggest the concentrate to not have
any elements that would hinder its marketing potential. The results from the analysis are
shown in Table 13.5.
Table 13.5 Final Concentrate Minor Element Data
Test 8 -
Copper
Concentrate
Mineral Symbol Unit IV & V
Aluminum Al % 0.22
Antimony Sb % 0.002
Arsenic As g/t 181
Bismuth Bi g/t <20
Cadmium Cd g/t 52
Calcium Ca % <.001
Carbon C % 0.08
table continues…


Test 8 -
Copper
Concentrate
Mineral Symbol Unit IV & V
Cobalt Co g/t 376
Copper Cu % 29.1
Fluorine F g/t 57
Gold Au g/t 2.78
Iron Fe % 31.8
Lead Pb % 0.42
Magnesium Mg % 0.017
Manganese Mn % 0.004
Mercury Hg g/t 2
Molybdenum Mo % 0.057
Nickel Ni g/t 182
Palladium Pd g/t <10
Phosphorus P g/t 100
Platinum Pt g/t <10
Selenium Se g/t 85
Silicon Si % 1.17
Sulphur S % 35
Silver Ag g/t 189
Zinc Zn % 1.08
DAVIS TUBE MAGNETIC SEPARATION TEST RESULTS

Results from the lone Davis tube magnetic separation test conducted on a subsample of
flotation tailings from the Test 8 locked cycle test showed that approximately 27% of the
flotation tailings mass, 78% of the iron in the flotation tailings, and 98% of the sulphur in
the flotation tailings were recovered to a magnetic concentrate containing 57% iron and
1.3% sulphur. The results from this test are summarized in Table 13.6.
Table 13.6 Summary of Davis Tube Test Results
Weight Assay (% or g/t) Distribution (%)
Product g % Cu Fe S Cu Fe S
Magnetite Concentrate 7.8 26.6 0.06 57.3 1.32 39.7 78.0 98.0
Magnetic Tail 21.5 73.4 0.03 5.8 0.01 21.7 10.5 2.0
Feed 29.3 100 0.04 19.5 0.36 100 100 100
Note: Au and Ag assays are reported in g/t, all others reported in %.
ALS Metallurgy recommended that further test work be conducted to investigate the
potential for sulphur reduction in the magnetic concentrate, and thus a test program was
conducted in August 2012 to explore this matter. The details and results of this study
are discussed in Section 13.1.3.


13.1.3 2012 TEST WORK
In November 2012, ALS Metallurgy (formerly G&T) completed a metallurgical test
program on samples from the Project with the objective to investigate the potential to
produce a saleable magnetite concentrate from flotation rougher tailings and further
support this PEA report. The program also investigated what the effect of a bulk sulphide
rougher flotation circuit would have on overall metallurgical performance.
The samples tested in the program were the same as the ones tested in the 2011 test
program, which were meant to be representative of the Granduc Main Zone.
A mineralogical analyses of the sample conducted using optical microscopy indicated

that magnetite accounted for approximately 21% of the feed mass.
The mineralogical study, which was conducted at a nominal flotation feed size of 167 µm
K80, also indicated that at this particle size, magnetite was approximately 40% liberated.
Approximately 48% of the magnetite particles were locked with non-sulphide gangue,
10% locked with chalcopyrite, and the rest locked with pyrrhotite, pyrite, and in
multiphase. This fragmentation data would suggest that the sample would need to be
ground finer to achieve a high grade magnetite concentrate.
Two flotation flowsheets were examined in the program. The first type was the low
reagent dosage, low mass recovery, cheap and effective flowsheet established in the
2011 test program, while the second flowsheet used high reagent dosages and
aggressive flotation techniques to significantly increase the sulphide mass recovery to
the rougher concentrate.
Davis tube magnetic separation testing of the copper rougher tailings in the less
aggressive flowsheet without any further regrinding produced magnetite concentrates
assaying between 52 and 57% iron, and between 1.2 and 1.5% sulphur. When a regrind
stage was introduced, a magnetite concentrate grading about 68% iron, 1.5% sulphur,
and 0.03% copper was achieved. The regrind discharge sizing for the test that produced
this result was measured at about 19% retained upon a 38 µm screen.
With the aggressive bulk rougher flotation flowsheet and a two-stage magnetic
separation procedure, with a regrind size of 41 µm K80, the highest grade magnetite
concentrate contained approximately 70% iron and 0.4% sulphur. This is a higher
sulphur content than normally accepted by the steel industry and would result in smelter
penalties, but this would likely be offset by the premium for the high iron content.
Without the benefit of producing a magnetite concentrate with little sulphide impurity,
there may not be an advantage to using the aggressive bulk flotation flowsheet, as it
would be more expensive with not a significant improvement in overall metallurgical
performance. Alternatively, there would be an opportunity for the magnetite concentrate
to be recovered and marketed as heavy media, which is commonly used in the coal
industry.


A summary of the activities performed in this metallurgical test program is provided in the
following subsections.
PROPERTIES OF THE FEED

The samples tested in this program were the same samples used in the previous test
program conducted in 2011, received by ALS Metallurgy on July 11, 2011 and consisted
of 29 half core samples representing the Granduc Main Zone.
Mineralogical analysis of the sample was conducted both by using QEMSCAN Bulk
Mineral Analysis as well an optical count procedure on the flotation feed sample, sized at
167 µm K80, which provided mineral content and liberation estimates.
The magnetite content in the sample was measured at approximately 21% by the point
counting method, and 19% by QEMSCAN. QEMSCAN has been known to not be the most
reliable tool to identify magnetite content, and therefore the point counting measure may
be a more accurate estimate.
Magnetite in the sample was approximately 40% liberated, with the remaining magnetite
particles being locked with non-sulphide gangue (approximately 48%), chalcopyrite
(10%), and pyrite, pyrrhotite, and in multiphase.
The results from these analyses are summarized in Table 13.7 and Table 13.8.
Table 13.7 Mineral Content of the Sample
Mass
Mineral (%)
Chalcopyrite 4.6
Galena <0.1
Sphalerite 0.20
Pyrrhotite 2.3
Pyrite 1.3
Magnetite 21.1
Quartz 25.1
Micas 11.7
Feldspars 11.4
Amphibole 10.2
Epidote 6.3
Calcite 2.2
Other Gangue 3.7
Notes: 1Micas includes Biotite/Phlogopite and Muscovite
2Feldspars includes Feldspar Albite, K-Feldspar and Plagioclase Feldspar
3Calcite includes trace amounts of Ankerite
4Epidote includes Chlorite
5Garnet includes Grossular, Almandine and Andradite
6Other Gangue includes Sphene, Kaolinitie, Tourmaline, Garnet, Grossular, Almandine, Andradite,
and trace amounts of Olivine, Talc, Spinel and unresolved mineral species


Table 13.8 Mineral Fragmentation of the Sample
Mineral Liberation – Two Dimensions (167 um K80)
Binary
Component Cs Sp Py Ma Gn
Liberated 52 59 48 40 86
Binary – Cs 24 9 10 5
Binary – Sp 1 1 0 0
Binary – Py 3 2 1 1
Binary – Ma 6 1 2 7
Binary – Gn 28 5 16 75
Multiphase 9 38 24 2 1
TEST PARAMETERS AND FLOWSHEETS

The metallurgical tests in this program consisted of six open circuit rougher flotation
tests, two open circuit cleaner tests, two locked cycle flotation tests, and 13 magnetic
separation tests. Two flotation flowsheets were examined. The first flotation circuit was
the flowsheet established in the 2011 program and the second involved a bulk sulphide
flotation in the rougher circuit with very aggressive flotation conditions1. While single
stage magnetic separation tests were conducted with a Davis tube, a magnetic drum was
also used in tests where two stages of magnetic separation were performed. Figure 13.3
illustrates the two different types of flowsheets examined in this program.
1 The ALS report refers to the aggressive sulphide flotation flowsheet as a pyrite circuit.


Figure 13.3 Test Parameters and Flowsheets
Note: Pyrite rougher tail from Test 7 used as magnetic drum feed in Test 8.
ROUGHER FLOTATION TEST RESULTS

There were six rougher flotation tests performed in the program.
At primary grind sizes ranging from 118 to 196 µm K80, approximately 94 to 99% of the
feed copper was recovered into a rougher concentrate containing approximately 13 to
15% of the feed mass. The bulk sulphide rougher flotation flowsheet increased the
percentage of feed copper and sulphur recovery by 3 and 10%, respectively.
Results from Davis tube magnetic separation tests on copper rougher tailings showed
that a magnetic concentrate could be produced containing between 52 and 57% iron and
between 1.2 and 1.5% sulphur. Two-stage magnetic separation tests improved the
magnetite concentrate grade to approximately 63% iron and about 0.4% sulphur.


The results from these tests are summarized in Figure 13.4.
Figure 13.4 Summary of Rougher Flotation and Magnetic Separation Tests
CLEANER FLOTATION TEST RESULTS

There were two cleaner flotation tests carried out in this test program in an effort to
investigate the effect of overall metallurgical performance by combining the rougher
tailings with the cleaner tailings using the more aggressive bulk sulphide flotation
flowsheet.


Test results showed that the increase of PAX addition in the “pyrite” circuit and in the
copper cleaning stages increased overall copper recovery by about 4%, but with a
decrease of 3% in final concentrate grade.
Two-stage magnetic separation test results indicated that with a regrind between 41 and
47 µm K80, a magnetite concentrate grade could be produced containing approximately
70% iron and 0.4% sulphur. This is a higher level of sulphur than normally accepted by
the steel industry and would incur penalties, though these would likely be offset by
premium for the high iron content.
The cleaner flotation test conditions and results are summarized in Figure 13.5.


Figure 13.5 Summary of Cleaner Test Conditions and Results
LOCKED CYCLE TEST FLOTATION TEST RESULTS

There were two locked cycle flotation tests conducted in this program. The first flowsheet
included the bulk sulphide rougher circuit, while the second test reflected the flowsheet
from the 2011 test program and the client’s request for only two stages of cleaning.


Results from the first test with the “pyrite” circuit did not show a significant improvement
in overall metallurgical performance. The comparable results from the locked cycle tests
conducted in the previous program without the bulk sulphide rougher circuit showed an
increase in approximately 1% feed copper recovery, but also a drop of approximately 1%
in concentrate copper grade.
Some of the products from the second locked cycle test were used for environmental
analyses; therefore some weights were estimated. It was estimated that approximately
94% of the feed copper was recovered into a final concentrate containing about 25%
copper.
Two-stage magnetic separation of the combined cleaner and rougher tailings products,
with a measured discharge sizing of 19% retaining above a 38 µm screen, produced a
magnetic concentrate containing 68% iron, 1.5% sulphur, and 0.03% copper. There is
opportunity for this concentrate grade to be marketed for the heavy media industry.
The results from this final locked cycle tests are summarized in Figure 13.6.


Figure 13.6 Summary of Locked Cycle Flotation Test 20


13.1.4 HISTORICAL PROCESS DESCRIPTION
The following process plant description details the process used at the Granduc
concentrator when the mine was in operation. The information was extracted from the
Stewart BC website (http://www.stewartbc.com/granduc.htm.), as of March 2013.
MILLING
The concentrator at Granduc was impressive, if only for its sheer size. The building
was 240 feet wide and 442 feet in horizontal length and, in addition to
concentrating facilities, also contained the general and engineering offices, the
miners' dry, machine and repair shops, warehouse, receiving facilities, and
laboratories.
The building was built on the side of a steep hill dipping at about a 25-degree angle
and vertical difference between the top and bottom of the structure was 150 feet.
Some idea of the immensity of just this part of the entire Granduc project was to be
gained by the casual statistic that 10,000 cubic yards of concrete were poured for
building and machinery foundations and elevated slabs within the building. It was
also worth noting that while in the office section of the building no noise or vibration
was evident.
One of the more important studies in design was given to the type of roof for the
massive structure. Remembering that snowfall could and did reach 860 inches it
was important that the roof of the building act as an immense snow slide - to avoid
any build-up by shedding snow continuously. The design therefore was essentially a
sandwich panel constructed of fiberglass insulation between corrugated metal
sheathing heated by the natural convection of the warm air in the building. The
application of the design has proven to be eminently successful during winters of
heavy snow and frigid temperatures.
FINE CRUSHING
During its journey from the underground ore pocket a total of 10 conveyors were
used to carry the selected mill feed to fine-ore and pebble-storage bins.
As the minus 6-in. ore reached the top of the concentrator building a Tyler double-
deck vibrating secondary feed screen scalps plus 4-in. material as feed to the 7-ft.
Symons heavy duty secondary cone-crusher and a middle cut for pebble-grinding
media. Minus 2-in. undersize passed to a fine-ore screen from which the over 1-in.
coarse fraction goes to the 7-ft. Symons tertiary cone-crusher and the minus I-in. to
fine-ore storage. Secondary-crusher discharge is screened to yield tertiary-crusher
feed and fine ore and tertiary- crusher discharge is directly to fine-ore storage. The
pebble- material bin has a capacity of 2260 tons and the three fine- ore bins each
have a capacity of 3600 tons.
The tertiary crusher was operating in open circuit but provision was made for a
closed circuit whenever required in the future. As in the rest of the plant, electrical,


electronic, and mechanical 'control apparatus plays an important role in the smooth
running of the crushing section. For instance, each conveyor could be operated
from start/stop buttons mounted locally and on the fine-crushing control room
console; each conveyor was shut down in the event of a plugged discharge-chute
condition with sensing done by a mercury-tilt switch; each conveyor is equipped with
emergency stop-pull cords; all start pushbuttons have latch relays and no
opportunities were provided for jogging, interlocks require the immediate
downstream conveyor to be running before a conveyor could be energized. Belting
was supplied by a Japanese manufacturer and was equipped with 3-roll, 35-degree
trough, carrier idlers, and flat-return idlers by Hewitt-Robins.
GRINDING SECTION
The grinding section consisted of two rod mills, each 10 ft. by 16 ft., and three
pebble mills, each 12 ft.-6 in. by 18 ft. Each mill was driven through an air clutch by
a 1000 h.p. 4000 volt synchronous motor.
All the units were supplied by Dominion Engineering Works of Montreal. Provision
was made for the installation of another pebble mill when capacity was expanded to
9000 tons per day. Liners were chrome-moly and manganese steel supplied by
Esco Limited.
This section took up one 68-ft. bay across the full 240- ft. width of the concentrator
building. Equipment layout was based on two independent grinding lines. Each rod
mill operated in open circuit feeding into the pebble mills which were operating in
closed circuit with the classifying cyclones. Recirculating load was set at 400%.
Processing a feed consisting of 8% pebbles, 4-in. by 2-in., and 92% rod-mill
discharge, minus 6-in. mesh, the pebble mills will yield a flotation feed of 5% plus
65 mesh, and 64% minus 200 mesh.
Again, in the grinding section, one was struck by the high degree of control
instrumentation
FLOTATION
The flotation machines, all Galigher " Agitairs", occupied one 5O-ft. section across
the full width of the mill building. A narrow 20-ft. service bay separated it from the
fine-grinding section with the concentrator's main control room overlooking the
flotation cells.
The flotation design called for the installation of a total of 144 cells supplied by the
Galigher company. All were in place except for two 12-cell rougher banks which will
not be installed until the decision is made to expand to the 9000- t.p.d. level.
There were two lines, operating independently of each other, of 48 rougher cells
each of 6O-cu.-ft. capacity; eight cleaner cells of 40-cu.-ft. capacity; and four re-
cleaner cells each with 40-cu.-ft. capacity.


From a process standpoint a 7-ft. by 13-ft. regrind ball-mill is part of the flotation
section although it had been installed in the grinding bay.
As mentioned above, cells were arranged flow-wise in two entirely independent

sections except for the regrind mill which handles combined rougher concentrate
streams. The mill operated in closed circuit with three regrind cyclones. The
overflow, containing 17% solids and 85% minus 325 mesh, was again split and fed
to two cleaner-recleaner circuits. The rougher tails were discharged below the
concentrator. Re- cleaner concentrate, 30% solids, flows by gravity to the thickener
THICKENER
The thickener operated in a 70-ft.-diameter steel tank with concrete bottom and had
a heavy-duty mechanism, a torque-relief lifting device that allowed the rake to be
raised approximately three feet thus allowing a surge-storage capacity of 1000 tons
of concentrate in the tank itself.
The thickener was located just outside the concentrator building on the west side.
During construction of the tank, consideration was given to the problems of snow
and ice building up on the foam during the severe weather conditions of the winter.
To cope with this situation an overflow launder is not used. Instead a 6-in. bustle
pipe was installed around the tank at 6 in. inside the shell and at a depth of 3 ft.
below normal liquid level, or 42 in. below the top of the tank. Clarified liquor was
drawn off through eight I Y2-in. holes in the underside of the pipe which had a single
6-in. connection to the overflow box mounted on the outer tank wall. The box was
provided with an adjustable [wire].
Foam was constantly agitated into a foam-snow mixture about two feet thick. This
thickness tended to stabilize because the bottom was continually melting as fresh
snow was added on top. The frozen cap, being a highly-aerated foam- snow-ice
mixture continued to float and allowed clear overflow to be withdrawn through the
bustle pipe.
A foam baffle, 50 ft. dia. by 2 ft. high, was also installed to contain the foam towards
the centre of the thickener and ensure that when the foam breaks down into solids
the finer particles were not swept into the peripheral bustle pipe.
The extra free-board for the bustle pipe arrangement plus a design requirement for
the 3-ft. surge storage results in 17-ft.-high thickener tanks -about six feet more
than a standard 70-ft. unit.
An overflow tank, 5 ft. dia. by 7 ft. high, was located inside the concentrator
building near the west wall and is fed by gravity from the thickener overflow box.
Reclaimed water from the overflow was pumped to the rod-mill discharge launder.


Filter
Underflow from the thickener was pumped to an Eimco " Agidisc", 8 ft., 10 in. in
diameter with eight discs, located on the flotation pump floor. The filter was
designed to produce a cake of not more than 11% moisture content.
Dryer
After removal from the filter discs, the cake falls through a discharge chute to a
short horizontal conveyor which fed into the dryer.
This unit was a rotary dryer and with the heating unit and all auxiliaries were
purchased as a package from Koppers Inc., Hardinge Company Division. Dryer unit
specifications call for the unit to handle a maximum of 600 t.p.d. of filter cake with
13% moisture and deliver a dried product not exceeding 5% moisture.
The dryer itself was a Ruggles-Coles XH-12 unit, 80 in. in diameter and 40 ft. long.
Speed of dryer rotation is 5.3 r.p.m. with the axis inclined at about 2.5 degrees.
Four shell knockers were provided. Feed was delivered from the filter via a rubber
chute to a screw feeder which, as it injected the filtered material into the dryer, also
functioned at the same time as an air lock.
The heater was a Peabody horizontal direct-fired unit, 5 ft. dia. and 14 ft. long. Fuel
used was No.6 fuel oil fired by a mechanical-atomizing forced-draft-register burner
complete with electric ignitor.
Principle of the drying operation was as follows: The heater had two independent air
intakes from separate fans; one supplied combustion air through the burner register
to support oil combustion in the inner chamber; the other supplied quench air
through the annulus to mix with the hot combustion gases in the furnace-exit throat.
Quench-air volume is modulated by automatic-damper control to maintain the
desired exit-gas temperature which in this application is the inlet-gas temperature
for the dryer.
The heater was rated at 10 B. T .U .per hr. net output with exit gas at 1800°F and
burns 595 Ib. per hr. of No.6 fuel oil.
The gas stream which exited from the dryer at about 190 degrees was passed
successively through a 9-ft.-diam. low- velocity dry cyclone and then through a wet-
cyclone scrubber before being exhausted to the atmosphere.
Concentrate Storage
The concentrate left the dryer via a three-conveyor system over weighing apparatus
and then to the storage area. The first conveyor, from the dryer, was short, about
18 ft. long, thence to the transfer conveyor, 144 feet long and fire- resistant (the
concentrate is at 135°F) and to the concentrate- storage conveyor, 159 feet long,


which distributed the load over the storage area by a Hewitt-Robins travelling
tripper.
The storage area was a rectangular concrete box, 28 ft. wide and 160 ft. long with a
live capacity of some 9000 tons.
Reclamation of the stored concentrate was by a 3-drum slusher hoist and scraper.
Scraper travel was about 230 feet and slusher operation was from a control room
on the north side of the bay and directly alongside the discharge point.
Reclaimed concentrate falls through a grizzly into a 25- ton hopper which was
partially mounted on two Asea TGPH- 10 load cells. Reclaim and load-out functions
were handled by one operator in the control room.
Concentrate Haulage
Trucks being used on the 60-mile round-trip-concentrate haulage to the storage and
shipping facility at Stewart are Kenworth double-unit L W 924's, hauling 25-ton
Columbia semi-trailer units. There are three compartments in the trailer units -a
side-dump centre section holding about 25 tons of concentrate and two end tanks
used to backhaul fuel oil and other commodities for the mill operation. It took about
four hours to make the round trip and at the maximum- design rate of 600 tons of
concentrate per day would require 24 such round trips each day. Fuel oil demands
at the property were about 170 tons per day.”
A new process flowsheet, discussed in Section 17.0, has been proposed for the Property.
This new process flowsheet will be aimed to improve mill efficiency over the historic mill
site, including a reduction in mill building footprint, equipment, and labour. The mill site’s
considerably low power cost as well as the mineralized material’s excellent metallurgical
performance make the new process flowsheet attractive and viable.


14.0 MINERAL RESOURCE ESTIMATES
For the purposes of this mineral resource estimate, Tetra Tech used Datamine™ Studio 3
(v. 3.21.7164.0) resource software to analyze data, create associated wireframes of
mineralization, and subsequent block modelling and grade interpolation.
14.1 INTRODUCTION
The following sections outline the NI 43-101 compliant resource estimate for the
Property. The effective date of this resource estimate is December 12, 2012. The
following sections describe and discuss the Granduc deposit resource estimate. The
resource estimate includes:
 a review of geological and assay data provided by Castle

 geological interpretation and domaining of the mineralization
 application of the interpretation in the form of designed domain wireframes
 an assessment of the data with respect to the different geological domains
 construction and configuration of a suitable block model
 interpolations of attributes (grade, density, etc.) into cells of the block model
 verification and validation of the interpolations
 reporting on the respective mineral inventory.
In addition to the previously reported resource estimate described above, an additional

estimation for magnetite has been performed for use in this report. The magnetite
estimation was performed using the same geological domaining as the existing model. It
is discussed further in the following sections.
14.2 GEOLOGICAL INTERPRETATION
The geology of the Granduc deposit has been described by McGuigan (2005). It has
been recognized as a Besshi-type VMS deposit of Early Jurassic Period (circa 186.8 Ma).
Galley et al. (2007) noted that the Granduc deposit represents an example of a large
tonnage VMS deposit.


14.3 DATA
Data was provided by Castle as both a Microsoft Access® database (.mdb file) and as a
series of comma separated (.csv) text files to replicate diamond drillhole collar, survey,
geology and assay data. After separate verification and validation, all data were imported
into Datamine™ software and resurveyed to create an appropriate drillhole file for
geological interpretation and grade estimation.
Castle also provided critical wireframes to assist in modeling the deposit. As required,
these wireframes were imported and verified in Datamine™ prior to implementation into
the block model. These wireframes include, but are not limited to:
 surface topography, digital terrain models (DTMs)

 South Leduc Glacier inferred depth DTM
 grade-shell domain wireframes
 interpreted structures, mostly large-scale faults
 digitized underground workings.
Castle also provided scanned historical paper sections and plans, which included
geological interpretations of the position, and extent of individual units. These were also
imported into Datamine™ as geo-referenced surfaces, and were used as a guide in
developing an independent interpretation by Tetra Tech of the main zones of mineralization
for the resource estimate. The final mineralization model employed in the Granduc
resource model was designed, developed, and verified by Tetra Tech.
14.4 EXPLORATORY DATA ANALYSIS
The following discussion describes the data used in the Granduc resource estimate. It
outlines the data statistics for respective domains, and the methodology used to identify
and control the influence of outlier data and compositing data to maintain consistency in
the estimation process.
14.4.1 RAW STATISTICS
Table 14.1 displays the raw statistics for the Project.
Table 14.1 Granduc Deposit – Raw Drillhole Statistics
Field FCupct FAuppm FAgppm FFepct Length sg_value
No. of Records 77,662 77,662 77,662 77,662 77,662 77,662
No. of Samples 59,330 25,773 25,773 25,773 77,662 9,258
No. of Missing 18,332 51,889 51,889 51,889 - 68,404
Minimum 0.00 0.00 0.05 0.3 0.00 1.07
table continues…


Field FCupct FAuppm FAgppm FFepct Length sg_value
Maximum 39.00 74.50 1139.90 57.6 411.48 5.33
Range 39.00 74.50 1139.85 57.3 411.48 4.26
Mean 0.78 0.07 3.85 7.33 2.77 2.85
Variance 1.63 0.43 134.51 35.61 58.86 0.04
Standard Deviation 1.28 0.66 11.60 5.97 7.67 0.21
Standard Error 0.00 0.00 0.08 0.04 0.03 0.00
Skewness 4.68 96.72 45.44 2.73 19.65 1.62
Kurtosis 55.51 10683.14 4066.28 10.1 658.56 9.72
14.4.2 OUTLIER MANAGEMENT AND CAPPING STRATEGY
For sample outlier population management, the entire dataset was considered. The
paragenesis of the deposit did not differ between domains. Furthermore, the entire
dataset provided sufficient samples to adequately interrogate the statistics for capping
(or “top-cutting”). Histograms and lognormal plots were used to identify outlier sample
populations. These populations were subsequently confirmed not to form independent
volumetrically discrete high-grade domains. A synopsis of this management strategy is
discussed in the following subsections.
COPPER
The main copper mineral in the Granduc deposit is chalcopyrite, which is an iron-copper
sulphide comprising 34.6% copper, 30.4% iron, and 35% sulphur. As massive sulphides
are a common component of Granduc mineralization, it is reasonable to expect some
sample grades that are close to, but do not exceed, 35% copper. The raw sample
drillhole data recorded one sample with 39% copper. The next highest sample grade was
24.05% copper (Figure 14.1). Therefore, a 24% copper cap has been applied to bring the
39% copper sample to 24%.


Figure 14.1 Copper Log Histogram of Raw Drillhole Data
GOLD
The raw data for gold in the deposit shows several outliers (Figure 14.2). In order to
manage these abnormally high grades, a cap was set at 3 ppm, where the continuity of
the distribution begins to break down.


Figure 14.2 Gold Log Histogram of Raw Drillhole Data
SILVER
The raw data for silver in the deposit shows several outliers (Figure 14.3). In order to
manage these abnormally high grades, a cap was set at 90 ppm where the continuity of
the distribution begins to break down.


Figure 14.3 Silver Log Histogram of Raw Drillhole Data
IRON
The raw data for iron did not indicate the need for capping. Since iron was to be
estimated only for correlation to magnetite, Tetra Tech maintained the integrity of the
original dataset.
14.4.3 DRILLHOLE COMPOSITING
The majority of raw sample lengths used for assaying measured 1.5 m in length. Figure
14.4 illustrates the descriptive statistics of the sample lengths.


Figure 14.4 Sample Length Histogram of Raw Drillhole Data
To capture most of the sample lengths into a consistent composite, while maintaining
sufficient resolution and maximizing the number of composited samples available for
grade interpolation (especially in a narrow layered massive sulphide environment), a
composite length of 1.5 m was used in this resource estimate. Compositing honoured
the domain boundaries.
14.4.4 WIREFRAMING
The mineralized domains were modeled using wireframes in Datamine™. These
wireframes were used to define the limits of interpolated and extrapolated blocks in the
resource model. They were based on interpreted geological contacts between the low-
grade mineralization (wall rock with minor stringers) and the high-grade mineralization
(semi-massive and massive sulphides and stringers). A wireframe was also modelled to
represent the boundary between the low-grade domain and the no-grade surrounding
wall rock; however this boundary was partially based on the sampling extents, and not
purely geological boundaries.
These wireframes depict separate mineralization surfaces (or domains) which supersede
the mineralized surfaces in the Main Zone as defined by McGuigan (2005) (e.g. individual
orebodies A, B1, B2, C and F). The Main Zone footwall mineralized positions are
represented by domains 501 and 502, with 501 being furthest positioned into the
footwall (east). The main hanging wall mineralized positions are represented by domains
100 and 200, with domain 100 furthest in the hanging-wall (west). Smaller mineralized
surfaces between the hanging-wall and footwall positions were also wireframes
separately and form domains 503-505.


In the North Zone, there are two main positions of mineralization, forming domains 10
and 20. Smaller mineralized surfaces are wireframed separately. These are numbered
according to their relative position (west to east) from 9 to 13 (associated with the west
mineralized surface in domain 10), and 21 and 22 (associated with the east mineralized
surface in domain 20).
Any rock falling outside the designated mineralized wireframes (either mineralized or
barren) was assigned domain 90 in the Main Zone. Any rock falling outside the
designated mineralized wireframes (either mineralized or barren) was assigned domain
91 in the North Zone.
Mineralization wireframes are displayed in Figure 14.5.


Figure 14.5 3D Plan View of High‐grade Wireframes (~3 km strike length)


14.4.5 CONTACT PROFILES
In order to establish that the interpreted geological domains represented real boundaries
in terms of copper grade, contact profiles were generated for all of the high-grade
mineralized domains. These compared copper grades between the mineralized
(wireframed) surfaces in contrast to the surrounding barren or partially mineralized rock
(domains 90 or 91). Examples of these profiles are shown in Figure 14.6 and Figure
14.7. All domains display a good break between high and low grade.
Figure 14.6 Granduc Contact Profile – Domain 100


Figure 14.7 Granduc Contact Profile – Domain 501
14.4.6 RESULTS
The summary statistics of the domained, capped and composited drillhole sample
dataset used in the Granduc resource estimate is presented in Table 14.2 to Table 14.4.


Table 14.2 Copper Summary Statistics of Capped and Composited Drillhole Data, by Domain as a Function of Cu%
Domain
9 10 11 12 13 20 21 22 90 91 100 200 501 502 503 504 505

No. of Records 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415
No. of Samples 15 139 18 45 5 141 23 25 65,838 11,267 2,582 10,135 2,178 2,370 87 403 76
No. of Missing 95,400 95,276 95,397 95,370 95,410 95,274 95,392 95,390 29,577 84,148 92,833 85,280 93,237 93,045 95,328 95,012 95,339
Minimum 0.58 0.51 0.00 0.00 0.93 0.00 0.44 0.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Maximum 1.60 4.10 2.30 4.52 2.20 5.47 2.73 3.50 15.01 2.72 9.68 24.00 9.72 15.25 3.28 14.00 6.00
Range 1.02 3.59 2.30 4.52 1.27 5.47 2.29 3.09 15.01 2.72 9.68 24.00 9.72 15.25 3.28 14.00 6.00
Mean 1.04 1.37 1.06 1.67 1.52 1.59 1.19 1.63 0.15 0.04 1.70 1.57 1.63 1.66 1.18 1.55 2.42
Variance 0.08 0.34 0.42 0.87 0.17 0.78 0.23 0.92 0.18 0.02 2.20 2.35 1.63 1.92 0.53 2.22 2.42
Standard 0.28 0.58 0.65 0.93 0.42 0.88 0.48 0.96 0.42 0.13 1.48 1.53 1.28 1.39 0.73 1.49 1.56
Deviation
Standard Error 0.06 0.04 0.12 0.11 0.16 0.06 0.08 0.15 0.00 0.00 0.02 0.01 0.02 0.02 0.06 0.06 0.14
Skewness 0.37 1.61 0.07 1.14 -0.06 1.74 1.87 0.80 9.16 6.28 1.47 3.37 1.87 2.34 0.52 3.28 0.49
Kurtosis -0.78 3.76 -0.50 0.89 -1.11 3.96 3.23 -0.94 152.86 63.81 2.75 26.62 5.56 9.78 -0.03 19.23 -0.61

Preliminary Economic Assessment of the Granduc Copper Project, Northern British
Columbia

Table 14.3 Gold Summary Statistics of Capped and Composited Drillhole Data, by Domain as a Function of Au g/t
Domain
9 10 11 12 13 20 21 22 90 91 100 200 501 502 503 504 505
No. of Records 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415
No. of Samples 10 61 9 37 4 38 12 22 7,293 3,922 420 493 856 593 29 187 30
No. of Missing 95,405 95,354 95,406 95,378 95,411 95,377 95,403 95,393 88,122 91,493 94,995 94,922 94,559 94,822 95,386 95,228 95,385
Minimum 0.05 0.05 0.09 0.02 0.08 0.06 0.04 0.06 0.00 0.00 0.02 0.01 0.00 0.00 0.03 0.01 0.02
Maximum 0.19 0.61 0.30 0.83 0.18 1.59 0.34 0.54 1.86 0.91 2.00 1.58 2.92 1.62 0.70 1.80 0.61
Range 0.14 0.55 0.21 0.81 0.11 1.53 0.29 0.48 1.86 0.90 1.99 1.58 2.92 1.62 0.67 1.79 0.59
Mean 0.10 0.17 0.17 0.20 0.12 0.30 0.17 0.21 0.04 0.01 0.18 0.17 0.19 0.18 0.16 0.19 0.23
Variance 0.00 0.02 0.01 0.02 0.00 0.13 0.01 0.02 0.01 0.00 0.03 0.02 0.05 0.04 0.02 0.04 0.03
Standard 0.04 0.13 0.08 0.15 0.03 0.36 0.08 0.14 0.08 0.03 0.16 0.15 0.22 0.20 0.14 0.21 0.17
Deviation
Standard Error 0.01 0.01 0.02 0.02 0.01 0.05 0.02 0.02 0.00 0.00 0.01 0.01 0.01 0.01 0.02 0.01 0.02
Skewness 0.77 2.22 0.84 2.38 0.64 2.70 0.63 1.19 10.44 9.96 4.40 3.43 5.52 3.59 2.43 3.80 0.69
Kurtosis -0.47 4.57 -0.95 7.16 -0.31 6.21 -0.28 0.07 167.26 212.35 39.53 21.61 48.19 17.28 6.48 20.21 -0.43

Columbia

Table 14.4 Silver Summary Statistics of Capped and Composited Drillhole Data, by Domain as a Function of Ag g/t
Domain
9 10 11 12 13 20 21 22 90 91 100 200 501 502 503 504 505
No. of Records 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415 95,415
No. of Samples 10 61 9 37 4 38 12 22 7,293 3,922 420 493 856 593 29 187 30
No. of Missing 95,405 95,354 95,406 95,378 95,411 95,377 95,403 95,393 88,122 91,493 94,995 94,922 94,559 94,822 95,386 95,228 95,385
Minimum 0.25 0.10 3.50 0.10 7.20 0.39 0.10 1.70 0.05 0.10 0.10 0.10 0.09 0.10 2.02 0.26 4.41
Maximum 7.90 19.80 29.20 15.15 15.70 15.54 12.03 19.83 66.11 67.44 58.96 50.20 90.00 89.80 35.37 74.00 39.69
Range 7.65 19.70 25.70 15.05 8.50 15.14 11.93 18.13 66.06 67.34 58.86 50.10 89.91 89.70 33.35 73.74 35.29
Mean 3.11 4.01 10.31 4.61 11.73 5.44 5.24 6.56 2.35 0.85 6.95 10.47 15.92 16.60 16.52 15.85 20.63
Variance 6.30 10.97 67.20 16.39 16.29 15.95 14.34 22.61 14.76 5.55 31.94 56.13 141.24 178.30 72.40 119.85 103.89
Standard 2.51 3.31 8.20 4.05 4.04 3.99 3.79 4.76 3.84 2.36 5.65 7.49 11.88 13.35 8.51 10.95 10.19
Deviation
Standard Error 0.63 0.35 2.22 0.54 1.72 0.53 0.90 0.82 0.04 0.03 0.23 0.28 0.33 0.45 1.30 0.65 1.51
Skewness 0.97 1.90 1.33 1.25 -0.17 0.90 0.51 1.69 5.43 14.38 2.74 1.28 1.78 1.79 0.40 1.77 0.29
Kurtosis -0.34 5.50 0.35 0.67 -1.95 0.05 -0.64 2.04 51.54 313.47 17.13 2.27 5.94 4.70 -0.63 5.26 -0.91

Columbia

14.5 DENSITY
Density (specific gravity recorded as tonnes per cubic metre) measurements were
completed on 9,259 drill core samples. The histogram and summary statistics for these
measurements are shown in Figure 14.8. Due to the extreme lower range of specific
gravity values, a lower limit of 1.8 was set, and results below this value were removed
from the dataset. There are eight measurements with specific gravity below 1.8.
Figure 14.8 Specific Gravity Histogram of Raw Drillhole Data
Where possible, the density model for the Granduc deposit was estimated to the block
model by means of inverse distance squared (ID2) interpolation method, while
maintaining domain boundaries (i.e. massive sulphide rock has a higher density than
non-mineralized rock). Any cells that were not estimated by this method were assigned
the average value of that domain (or where too few specific gravity measurements exist,
the high-grade domains were given a value of 3.00), as per Table 14.5.
Table 14.5 Average Density by Domain
Mean Specific
Domain Gravity
100 2.93
200 2.97
501 2.99
502 3.11
503 3.00
table continues…


Mean Specific
Domain Gravity
504 3.15
505 3.00
90 2.84
9 3.00
10 3.03
11-13, 20-22 3.00
91 2.86
14.6 SPATIAL ANALYSIS
14.6.1 VARIOGRAPHY
A separate variography was performed in all domains for each metal, with the exception
of domains 91, 9, 11, 12, 13, 21, and 22 in the North Zone. Domain 91 is the North
Zone low-grade domain; it was assigned the same variography as the Main Zone low-
grade domain (domain 90). The other domains did not contain enough samples to
perform proper variography. Domains 9, 11, 12 and 13 were assigned the same
parameters as domain 10, and domains 21 and 22 were assigned the same parameters
as domain 20, based on the geometry and proximity of the domains.
Examples of variography, including both experimental and modelled variograms, are

presented for copper in domain 501 as Figure 14.9 and Figure 14.10. A complete set of
variograms can be found in Appendix C.


Figure 14.9 Copper Downhole Variogram for Domain 501

Columbia

Figure 14.10 Copper Variogram for Domain 501

Columbia

14.7 INTERPOLATION PLAN
For block model estimation in Datamine™ software, three separate parameter files are
required:
 an estimation parameter file

 a search and sample selection parameter file
 a variography parameter file.
Estimation also included the calculation of the Kriging Variance, the Lagrange Multiplier
and the F-Function. These calculations were undertaken in order to calculate the
theoretical slope of regression (ZZ*) and the Kriging Efficiency (KE). Both ZZ* and KE are
used to evaluate the quality of the OK estimate, and ZZ* in particular was used to assist
in the determine resource classification.
14.7.1 ESTIMATION PARAMETER FILES
The estimation parameter file defines the estimation domains used (e.g. domain 501 and
503), estimation variables (e.g. copper and silver), and estimation method (e.g. OK, ID2,
and nearest neighbour (NN)). All these estimation methods are industry standards for
grade interpolation, with OK commonly used in preference to other methods for reporting
purposes. While this report utilized OK for estimating all metals, ID2 is used for density.
Other interpolation (i.e. ID2, NN) methods are used specifically for model validation.
14.7.2 SEARCH AND SAMPLE PARAMETER FILES
The search and sample parameter file dictates the conditions for a successful cell
interpolation of grade. It specifies the sample search ellipse parameters including size
and orientation. In this case, they reflect the results of domain and element variography.
In particular, the search radii represent the variography ranges to maximum experimental
variance (i.e. sill = 1) in each of the major directions. Orientations were recoded as a
function of degree of rotation around axes in the order of Z, then Y, and then X.
This parameter file also states the number of samples required for a successful
interpolation based on the search pass. The first search pass volume represents the
ellipse formed by the radii assigned by the maximum variographical ranges. The second
search pass is twice the radii, and the third pass is four times the radii. The minimum
and maximum number of samples is specified for a successful interpolation. In the first
pass, a maximum of 16 composited samples was required for a successful interpolation
and a minimum of 12 samples. The second pass was slightly reduced to 12 and 8, and
the third pass to 8 and 4. In all cases, the maximum number of samples which can be
used from a single drillhole was limited to three.


14.7.3 VARIOGRAPHY PARAMETER FILES
The variography parameter file specifies the nugget (intrinsic sample variance), structure
ranges, and orientations for respective structure variance for each of the estimated
metals. No variography was undertaken for density. The variography parameter file is
tabulated in Table 14.6 to Table 14.8.


Table 14.6 Copper Variogram Parameter File
VREFNUM 1 2 3 4 5 6 7 8 9 10
VDESC 90 cu 100 cu 200 cu 501 cu 502 cu 503 cu 504 cu 505 cu nz10cu nz20cu
VANGLE1 256.02 256.02 256.02 0 256.02 256.02 256.02 256.02 113.22 122.13
VANGLE2 -53.41 -53.41 -53.41 58 -53.41 -53.41 -53.41 -53.41 -27.18 -40.24
VANGLE3 51.06 51.06 51.06 0 51.06 51.06 51.06 51.06 -62.79 -57.81
VAXIS1 3 3 3 3 3 3 3 3 3 3
VAXIS2 2 2 2 2 2 2 2 2 2 2
VAXIS3 1 1 1 1 1 1 1 1 1 1
NUGGET 0.05 0.6 0.4 0.6 0.6 0.405 0.6 0.1 0.3 0.1
ST1 1 1 1 1 1 1 1 1 1 1
ST1PAR1 15 31 32 7 52 12 31 13 87 93
ST1PAR2 16 16 17 17 39 26 23 28 92 111
ST1PAR3 4 4 5 4 13 10 4 2 9 4
ST1PAR4 0.395 0.287 0.371 0.055 0.205 0.595 0.074 0.126 0.7 0.9
ST2 1 1 1 1 1 0 1 1 0 0
ST2PAR1 31 50 52 60 194 0 74 16 0 0
ST2PAR2 29 31 110 24 67 0 37 49 0 0
ST2PAR3 14 23 40 11 21 0 5 6 0 0
ST2PAR4 0.555 0.113 0.229 0.345 0.195 0 0.326 0.774 0 0

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Table 14.7 Gold Variogram Parameter File
VREFNUM 90 100 200 501 502 503 504 505 10 20
VDESC 90 au 100 au 200 au 501 au 502 au 503 au 504 au 505 au au_nz10 au_nz20
VANGLE1 256.02 256.02 256.02 256.02 121.2 149.68 256.02 0 0 0
VANGLE2 -53.41 -53.41 -53.41 -53.41 -27.62 25.76 -53.41 0 0 0
VANGLE3 51.06 51.06 51.06 51.06 115.01 96.07 51.06 0 0 0
VAXIS1 3 3 3 3 3 3 3 0 0 0
VAXIS2 2 2 2 2 2 2 2 0 0 0
VAXIS3 1 1 1 1 1 1 1 0 0 0
NUGGET 0.36 0.3 0.2 0.1 0.24 0.2 0.1 0.1 0.28 0.442
ST1 1 1 1 1 1 1 1 1 1 1
ST1PAR1 51 50 24 8 11 3 58 5 3 6
ST1PAR2 55 61 28 25 32 40 33 5 3 6
ST1PAR3 18 2 5 2 5 18 5 5 3 6
ST1PAR4 0.64 0.369 0.8 0.251 0.76 0.645 0.482 0.496 0.598 0.19
ST2 0 1 0 1 0 1 1 1 1 1
ST2PAR1 0 50 0 33 0 3 58 20 20 42
ST2PAR2 0 196 0 39 0 100 101 20 20 42
ST2PAR3 0 6 0 4 0 18 5 20 20 42
ST2PAR4 0 0.331 0 0.649 0 0.155 0.418 0.404 0.122 0.368

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Table 14.8 Silver Variogram Parameter File
VREFNUM 90 100 200 501 502 503 504 505 10 20
VDESC 90 ag ag 100 ag 200 ag 501 ag 502 ag 503 ag 504 ag 505 ag_nz10 ag_nz20
VANGLE1 256.02 256.02 256.02 256.02 256.02 0 256.02 0 0 0
VANGLE2 -53.41 -53.41 -53.41 -53.41 -53.41 0 -53.41 0 0 0
VANGLE3 51.06 51.06 51.06 51.06 51.06 0 51.06 0 0 0
VAXIS1 3 3 3 3 3 0 3 0 0 0
VAXIS2 2 2 2 2 2 0 2 0 0 0
VAXIS3 1 1 1 1 1 0 1 0 0 0
NUGGET 0.26 0.15 0.17 0.096 0.15 0.2 0.05 0.24 0.5 0.45
ST1 1 1 1 1 1 1 1 1 1 1
ST1PAR1 16 62 45 48 42 3 22 6 4 3
ST1PAR2 8 227 47 27 11 3 24 6 4 3
ST1PAR3 5 7 13 4 9 3 7 6 4 3
ST1PAR4 0.42 0.85 0.83 0.791 0.85 0.484 0.95 0.322 0.109 0.439
ST2 1 0 0 1 0 1 0 1 1 1
ST2PAR1 37 0 0 300 0 22 0 24 54 10
ST2PAR2 22 0 0 38 0 22 0 24 54 10
ST2PAR3 10 0 0 25 0 22 0 24 54 10
ST2PAR4 0.32 0 0 0.113 0 0.197 0 0.438 0.391 0.111
ST3 0 0 0 0 0 1 0 0 0 0
ST3PAR1 0 0 0 0 0 71 0 0 0 0
ST3PAR2 0 0 0 0 0 71 0 0 0 0
ST3PAR3 0 0 0 0 0 71 0 0 0 0
ST3PAR4 0 0 0 0 0 0.119 0 0 0 0

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14.8 CONDITIONAL SIMULATION
14.8.1 GOLD AND SILVER ESTIMATION
Traditional OK could not estimate into all of the cells in the Main Zone domains, because
of the significantly fewer gold and silver assays than copper assays. In order to complete
the estimation, a conditional simulation was performed on the gold and silver grades,
utilizing their correlation with copper. The available simulation algorithm in Datamine™ is
Sequential Gaussian Simulation (SGS). A variant of SGS that employs collocated co-
kriging is used here. This method integrates both the dominant data (copper) and co-
simulates multiple variables (gold and silver). This utilizes the correlation coefficient
between the dominant data and the two secondary variables.
For a full description of the conditional simulation process utilized for this model, see
Appendix C. Upon completion, the simulated grades were integrated into the previously
estimated OK grades. Any gold or silver OK grades that fell outside of the first search
pass were replaced with the SGS grades.
14.8.2 MAGNETITE ESTIMATION
Total iron, but not magnetite, was regularly assayed. Therefore, to estimate magnetite, it
was necessary to conduct a targeted re-assaying program to collect enough data to
correlate magnetite to the existing iron results. Based on the available data, only the four
primary domains (i.e. 100, 200, 501 and 502) were estimated for magnetite. A full
description of the sampling methodology and statistical analysis of the iron and
magnetite data is provided in Section 11.5 and Appendix C.
Because of the paucity of magnetite data, a combination of conditional simulation and

co-located co-kriging was used to estimate magnetite. To facilitate the co-kriging, iron
estimation was performed using traditional OK. Once the relationship between iron and
magnetite values in the re-assayed samples was analyzed, it was necessary to perform a
transformation to the original iron values, because of what is inferred to be the influence
of high-sulphide content samples. This transformation was applied to both the drillhole
data, as well as the OK iron estimated blocks.
A SGS, in the form of multiple realizations, was undertaken on each of the respective
domains. Each realization represented an equi-probable estimate, based on available
magnetite data, the estimated iron data, the magnetite-iron correlation coefficient and
the iron variography. The final magnetite value was calculated as the average of the
realizations (i.e. “E-type” SGS model). Once the simulation was completed and validated,
the estimated magnetite values were added to the existing model, so that grade-tonnage
calculations could be performed in relation to the other estimated metals.


14.9 RESOURCE BLOCK MODEL
14.9.1 CONFIGURATION
The Datamine™ block model is oriented with the model origin at the lower left hand
corner (bottom southwest) where all dimensions are in metres. Cell and sub-cell sizes
configuration was designed to reflect minimum mining widths and heights. The block
model configuration is recorded in Table 14.9. Sub-cells were used to define the
topographic surface and the base of overburden. Sub-cells were restricted in size to be
no smaller than 1 m by 1 m by 1 m.
Table 14.9 Block Model Configuration
Easting Northing Elevation
(m) (m) (m)
Origin 415,800 6,229,300 -250
Parent Cell 5 10 10
Number of Parent cells 330 305 215
Minimum Sub-cell 1 1 1
Number of Sub-cells per Parent Cell 5 10 10
14.9.2 CELL ATTRIBUTES
Categorical and deterministic variables for the cells of the block model are tabulated in
Table 14.10. Categorical variables include, but are not limited to, rock type (fresh rock,
overburden and mineralization domains, resource classification (rescat) and mining
status (mstatus). Deterministic variables include, but are not limited to copper, silver,
and gold grade estimation. Density has both deterministic (estimated) and categorical
(assigned) values.
Table 14.10 List of Cell Attributes in Block Model
Name Description Type Association
IJK Unique Parent Cell Code Integer Assigned
DOMAIN Domains 9-505 Integer Assigned
XC Cell Centroid (x) Variable Assigned
YC Cell Centroid (y) Variable Assigned
ZC Cell Centroid (z) Variable Assigned
XINC Cell Length (x) Variable Assigned
YINC Cell Width (y) Variable Assigned
ZINC Cell Height (z) Variable Assigned
RESCAT Resource Classification (1-3) Integer Assigned
STATUS Mined (1) or Not Mined (0) Integer Assigned
DENSITY Specific Gravity (ID2) Variable Estimated
table continues…


Name Description Type Association
cu_ok Cu Grade (OK) Variable Estimated
cu_id Cu Grade (ID2) Variable Estimated
cu_nn Cu Grade (NN) Variable Estimated
F Cu (F-Function) Variable Estimated
LG Cu (LaGrange Multiplier) Variable Estimated
CU_NS Number of Samples for Estimate (Cu) Integer Calculated
CU_SV Search Estimate Pass (1-3) (Cu) Integer Calculated
KV Cu Kriging Variance Variable Calculated
AgOK Ag Grade (OK) Variable Estimated
AgID Ag Grade (ID2) Variable Estimated
AgNN Ag Grade (NN) Variable Estimated
NS_AG Number of Samples for Estimate (Ag) Integer Calculated
SV_AG Search Estimate Pass (1-3) (Ag) Integer Calculated
AuOK Au Grade (OK) Variable Estimated
AuID Au Grade (ID2) Variable Estimated
AuNN Au Grade (NN) Variable Estimated
NS_AU Number of Samples for Estimate (Au) Integer Calculated
SV_AU Search Estimate Pass (1-3) (Au) Integer Calculated
au_ok Final Au grade with SGS integrated Variable Estimated
ag_ok Final Ag grade with SGS integrated Variable Estimated
cu_eq CuEq (Cu + Au + Ag) Variable Calculated
BV Cu Block Variance Variable Calculated
KE Cu Kriging Efficiency Variable Calculated
ZZ Cu Theoretical Slope of Regression Variable Calculated
BL_T Block Tonnage Variable Calculated
XMORIG Block Model Origin (x) Integer Assigned
YMORIG Block Model Origin (y) Integer Assigned
ZMORIG Block Model Origin (z) Integer Assigned
NX Number of Cells (x) Integer Assigned
NY Number of Cells (y) Integer Assigned
NZ Number of Cells (z) Integer Assigned
14.9.3 INTERPOLATION
Block model interpolation utilized OK for estimation of copper grades. Silver and gold
grades were interpolated throughout cells which had copper grades allocated by means
of conditional simulation (co-kriging). Density interpolation employed ID2, while both ID2
and NN were used for block model validation purposes.
The following discusses the results of the interpolation, both in terms of block model
validation (Section 14.10) and in tabulation of the mineral (metal) inventory (Section
14.11).


14.10 MODEL VALIDATION
14.10.1 STATISTICS
Block model statistics for all elements and density of the block model are tabulated in
Table 14.11 to Table 14.19, both for the total modelled resource and the un-mined
portion of the modelled resource. The statistics are reported as a function of the
interpreted mineralization domains.


Table 14.11 All Block Model Statistics for Copper, Weighted to Block Tonnage, as a Function of Cu%
Domain 9 10 11 12 13 20 21 22 91 90 100 200 501 502 503 504 505
Minimum 0.90 0.72 0.22 0.58 1.16 0.71 1.00 0.90 0.00 0.00 0.29 0.15 0.42 0.42 0.62 0.68 1.20
Maximum 1.38 2.81 1.76 3.17 1.90 3.31 1.95 2.86 1.18 6.41 5.13 11.62 5.20 5.29 1.81 4.15 4.20
Range 0.48 2.09 1.54 2.58 0.75 2.60 0.95 1.96 1.21 6.41 4.85 11.47 4.77 4.87 1.20 3.47 3.00
Mean 1.12 1.38 0.93 1.76 1.57 1.59 1.29 1.68 0.04 0.12 1.47 1.59 1.52 1.45 1.12 1.55 2.38
Variance 0.00 0.12 0.04 0.20 0.01 0.10 0.02 0.12 0.00 0.02 0.26 0.36 0.16 0.26 0.05 0.24 0.33
Standard Deviation 0.07 0.35 0.20 0.44 0.11 0.32 0.14 0.34 0.05 0.13 0.51 0.60 0.41 0.51 0.22 0.49 0.57
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness 0.42 0.94 -0.02 0.43 -1.03 1.51 1.66 0.54 2.91 3.73 1.24 1.94 1.60 1.78 1.01 1.54 0.75
Kurtosis 0.88 0.54 2.73 -0.21 3.87 3.35 5.23 0.16 26.03 59.28 2.55 11.68 6.91 4.84 1.39 3.71 0.52
Table 14.12 All Block Model Statistics for Gold, Weighted to Block Tonnage, as a Function of Au g/t
Domain 9 10 11 12 13 20 21 22 100 200 501 502 503 504 505
Minimum 0.09 0.08 0.12 0.08 0.10 0.09 0.14 0.13 0.04 0.04 0.02 0.02 0.09 0.04 0.09
Maximum 0.15 0.39 0.22 0.30 0.14 0.75 0.23 0.30 0.45 0.58 0.63 0.50 0.28 0.78 0.33
Range 0.07 0.32 0.10 0.22 0.04 0.66 0.09 0.17 0.41 0.53 0.60 0.48 0.19 0.74 0.24
Mean 0.11 0.17 0.15 0.22 0.12 0.27 0.17 0.22 0.17 0.16 0.19 0.16 0.14 0.18 0.17
Variance 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00
Standard Deviation 0.01 0.05 0.02 0.05 0.01 0.09 0.02 0.03 0.02 0.02 0.03 0.03 0.04 0.08 0.05
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness -1.09 1.68 -0.09 -0.58 -0.29 0.21 -0.11 -0.21 2.08 3.26 1.00 1.76 1.51 2.89 0.77
Kurtosis 0.91 4.32 -1.40 -1.09 -0.66 -0.38 -0.77 -1.14 15.95 59.64 7.24 14.03 2.87 11.98 0.20

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Table 14.13 All Block Model Statistics for Silver, Weighted to Block Tonnage, as a Function of Ag g/t
Domain 9 10 11 12 13 20 21 22 100 200 501 502 503 504 505
Minimum 2.82 1.44 7.15 2.29 9.76 0.80 3.42 2.68 1.23 2.28 1.78 2.10 8.80 5.54 13.57
Maximum 5.42 7.72 15.09 11.47 12.91 12.41 7.76 14.01 26.22 24.72 60.32 47.84 18.48 46.88 27.62
Range 2.61 6.28 7.94 9.18 3.15 11.62 4.33 11.33 24.98 22.44 58.54 45.74 9.68 41.34 14.05
Mean 3.92 4.61 9.46 4.90 11.45 5.54 5.69 6.48 10.30 12.65 15.17 15.34 14.24 15.70 18.72
Variance 0.11 0.93 0.68 1.82 0.23 0.83 0.62 1.69 16.91 8.30 5.28 7.55 7.41 27.20 6.21
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01
Skewness 0.48 -0.27 3.24 1.30 -0.63 0.39 1.11 -0.92 0.25 -0.34 0.83 0.97 -0.18 1.36 0.06
Kurtosis 3.09 -0.11 16.94 2.37 2.76 15.49 0.62 6.78 -1.63 -1.47 14.12 7.00 -1.40 2.84 0.39
Table 14.14 All Block Model Statistics for Density, Weighted to Block Tonnage, as a Function of tonnes per m3
Domain 10 12 91 90 100 200 501 502 503 504 505
Minimum 2.88 3.14 2.64 1.80 2.64 2.64 2.59 2.61 2.90 2.80 2.87
Maximum 3.06 3.73 3.05 4.32 4.18 3.61 4.01 4.33 4.11 3.71 3.48
Range 0.18 0.59 0.40 3.11 1.54 0.98 1.42 1.72 1.21 0.91 0.61
Mean 2.97 3.55 2.87 2.83 2.97 2.97 3.00 3.18 3.36 3.11 3.01
Variance 0.00 0.00 0.00 0.01 0.02 0.01 0.01 0.05 0.05 0.03 0.01
Standard Deviation 0.03 0.04 0.04 0.11 0.15 0.08 0.12 0.22 0.23 0.16 0.11
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness -0.32 -2.55 0.42 3.04 1.45 0.49 1.85 0.65 0.81 1.10 2.48
Kurtosis -1.22 17.95 4.14 25.47 4.52 2.46 9.13 0.27 0.54 1.15 5.84

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Table 14.15 Un‐mined Block Model Statistics for Copper, Weighted to Block Tonnage, as a Function of Cu%
Domain 9 10 11 12 13 20 21 22 90 91 100 200 501 502 503 504 505
Minimum 0.90 0.72 0.22 0.58 1.16 0.71 1.00 0.90 0.00 0.00 0.29 0.15 0.42 0.42 0.62 0.68 1.20
Maximum 1.38 2.81 1.76 3.17 1.90 3.31 1.95 2.86 6.41 1.18 5.13 11.62 5.20 5.29 1.81 4.15 4.20
Range 0.48 2.09 1.54 2.58 0.75 2.60 0.95 1.96 6.41 1.21 4.85 11.47 4.77 4.87 1.20 3.47 3.00
Mean 1.12 1.38 0.93 1.76 1.57 1.59 1.29 1.68 0.12 0.04 1.47 1.59 1.52 1.45 1.12 1.55 2.38
Variance 0.00 0.12 0.04 0.20 0.01 0.10 0.02 0.12 0.02 0.00 0.26 0.36 0.16 0.26 0.05 0.24 0.33
Standard Deviation 0.07 0.35 0.20 0.44 0.11 0.32 0.14 0.34 0.13 0.05 0.51 0.60 0.41 0.51 0.22 0.49 0.57
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness 0.42 0.94 -0.02 0.43 -1.03 1.51 1.66 0.54 3.73 2.91 1.24 1.94 1.60 1.78 1.01 1.54 0.75
Kurtosis 0.88 0.54 2.73 -0.21 3.87 3.35 5.23 0.16 59.28 26.03 2.55 11.68 6.91 4.84 1.39 3.71 0.52
Table 14.16 Un‐mined Block Model Statistics for Gold, Weighted to Block Tonnage, as a Function of Au g/t
Domain 9 10 11 12 13 20 21 22 100 200 501 502 503 504 505
Minimum 0.09 0.08 0.12 0.08 0.10 0.09 0.14 0.13 0.04 0.04 0.02 0.02 0.09 0.04 0.09
Maximum 0.15 0.39 0.22 0.30 0.14 0.75 0.23 0.30 0.45 0.58 0.63 0.50 0.28 0.78 0.33
Range 0.07 0.32 0.10 0.22 0.04 0.66 0.09 0.17 0.41 0.53 0.60 0.48 0.19 0.74 0.24
Mean 0.11 0.17 0.15 0.22 0.12 0.27 0.17 0.22 0.17 0.16 0.19 0.16 0.14 0.18 0.17
Variance 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness -1.09 1.68 -0.09 -0.58 -0.29 0.21 -0.11 -0.21 2.08 3.26 1.00 1.76 1.51 2.89 0.77
Kurtosis 0.91 4.32 -1.40 -1.09 -0.66 -0.38 -0.77 -1.14 15.95 59.64 7.24 14.03 2.87 11.98 0.20

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Table 14.17 Un‐mined Block Model Statistics for Silver, Weighted to Block Tonnage, as a Function of Ag g/t
Domain 9 10 11 12 13 20 21 22 100 200 501 502 503 504 505
Minimum 2.82 1.44 7.15 2.29 9.76 0.80 3.42 2.68 1.23 2.28 1.78 2.10 8.80 5.54 13.57
Maximum 5.42 7.72 15.09 11.47 12.91 12.41 7.76 14.01 26.22 24.72 60.32 47.84 18.48 46.88 27.62
Range 2.61 6.28 7.94 9.18 3.15 11.62 4.33 11.33 24.98 22.44 58.54 45.74 9.68 41.34 14.05
Mean 3.92 4.61 9.46 4.90 11.45 5.54 5.69 6.48 10.30 12.65 15.17 15.34 14.24 15.70 18.72
Variance 0.11 0.93 0.68 1.82 0.23 0.83 0.62 1.69 16.91 8.30 5.28 7.55 7.41 27.20 6.21
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01
Skewness 0.48 -0.27 3.24 1.30 -0.63 0.39 1.11 -0.92 0.25 -0.34 0.83 0.97 -0.18 1.36 0.06
Kurtosis 3.09 -0.11 16.94 2.37 2.76 15.49 0.62 6.78 -1.63 -1.47 14.12 7.00 -1.40 2.84 0.39
Table 14.18 Un‐mined Block Model Statistics for Density, Weighted to Block Tonnage, as a Function of tonnes per m3
Domain 10 12 90 91 100 200 501 502 503 504 505
Minimum 2.88 3.14 1.22 2.64 2.64 2.64 2.59 2.61 2.90 2.80 2.87
Maximum 3.06 3.73 4.32 3.05 4.18 3.61 4.01 4.33 4.11 3.71 3.48
Range 0.18 0.59 3.11 0.40 1.54 0.98 1.42 1.72 1.21 0.91 0.61
Mean 2.97 3.55 2.83 2.87 2.97 2.97 3.00 3.18 3.36 3.11 3.01
Variance 0.00 0.00 0.01 0.00 0.02 0.01 0.01 0.05 0.05 0.03 0.01
Standard Deviation 0.03 0.04 0.11 0.04 0.15 0.08 0.12 0.22 0.23 0.16 0.11
Standard Error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Skewness -0.32 -2.55 3.04 0.42 1.45 0.49 1.85 0.65 0.81 1.10 2.48
Kurtosis -1.22 17.95 25.47 4.14 4.52 2.46 9.13 0.27 0.54 1.15 5.84

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Table 14.19 Un‐mined Block Model Statistics for Magnetite, Weighted to Block Tonnage, as a Function of tonnes per m3
Domain 100 200 501 502
Minimum 0 2.63 0 0.69
Maximum 55.18 36.82 26.8 43.92
Range 55.18 34.19 26.8 43.23
Mean 12.78 19.54 5.83 21.22
Variance 68.81 9.05 5.19 31.3
Standard Deviation 8.3 3.01 2.28 5.59
Standard Error 0 0 0 0
Skewness 0.89 -0.33 0.64 0.09
Kurtosis 0.82 2.17 2.86 0.62

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14.10.2 SECTIONS
The results of the grade interpolation were visually confirmed against corresponding
cross-sections and plan views. Figure 14.11 depicts the block model grades against the
composited and capped drillhole grades used in the resource estimation. These sections
confirmed good correlation between modeled grade and composited drillhole assay.
Figure 14.11 Section 6230800N Showing Block Model and Composite Copper Grades
Looking North


14.10.3 SWATH PLOTS
Swath plots are used to visually compare the differences and similarities in the estimated
grades between the different estimators (OK, ID2, and NN). The search and sample
estimation parameter file used for ID2 and NN estimation was the same as that of the OK
estimation. Results are presented below for the copper estimation in the form of average
grades recorded across eastings, northings, and elevations.
Figure 14.12 to Figure 14.14 depict the results of the swath plots. Note that for the
purposes of these plots, the Main Zone and the North Zone were not separated. All
mineralization was considered as a single domain.


Figure 14.12 Swath Plot Copper Grade Estimation – Easting

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Figure 14.13 Swath Plot Copper Grade Estimation ‐ Northing

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Figure 14.14 Swath Plot Copper Grade Estimation ‐ Elevation

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In general, it can be concluded that there is good correlation between OK and ID2 grade
interpolators. The NN interpolation will always be problematic as there is no averaging of
grades. It should also be noted that variability along the margins of the deposit, where
there is less sample support, is inevitable.
14.11 MINERAL RESOURCE CLASSIFICATION
Mineral resource classification is commonly a function of, but not limited to:
 geological confidence
 grade continuity
 mineralization continuity
 data density
 surface and/or underground exposure
 variography
 KE or Kriging Variance
 ZZ*.
A brief survey of recent technical reports submitted on SEDAR has revealed that there is
no single set of standards which are applied to resource classification. However,
estimation sample search passes, especially as a function of variography, are commonly
employed to more definitively assign resource classification. The Granduc deposit differs
from many other reported deposits because portions of it have been mined. Accordingly,
there is a wealth of geological and assay data on this deposit which would not be
available in un-mined deposits. Therefore, there is higher confidence in the geological
controls and continuity of mineralization.
The Granduc deposit is classified in accordance with CIM standards (CIM 2010).
14.11.1 GRANDUC MEASURED RESOURCE CLASSIFICATION
With respect to the Granduc deposit model, the Measured Mineral Resource is defined
as the volume of mineralization most proximal to the previously mined areas, and that
which has been sampled by close-spaced grade-control drilling. This volume was visually
defined from drillhole traces on a north-south section and extrapolated both east and
west to form a closed volume. This definition adheres to the CIM guidelines by having
physical access to mineralization through underground workings, by having confident
controls on geology and mineralization through underground mapping, and by being
defined by close-spaced (approximately 15 m along strike) drillholes.
This volume extends to a maximum of 145 m below the mined-out workings where there
is sufficient drill-control data to support the classification. It also extends to a maximum
of 90 m to the south using similar arguments.


Only domains 100, 200, 501 and 502 were in part classified as Measured using this
defined volume. Other domains (9 to 13, 20 to 22, 90 to 91, 503 to 505) were assigned
Inferred status only. Figure 14.15 depicts the classification scheme for the Granduc
deposit.
Figure 14.15 Long‐section Looking East – Granduc Block Model Classification (~3 km strike
length)
14.11.2 GRANDUC INDICATED RESOURCE CLASSIFICATION
The Granduc Indicated Resource classification was initially calculated as a function of
domain-respective copper variography and copper estimation search pass, as this
represents an industry-standard approach to assigning Indicated category.
The search passes are controlled by copper variography orientation and ranges to the sill
of the data. The first search pass conforms to the orientation and ranges to the sill of the
respective domain data.
Like the Measured Resource, only domains 100, 200, 501 and 502 were considered for
applying an Indicated inventory. Indicated Resource drillhole spacing in respective
domains corresponds to 40 to 60 m centres along strike. However, as respective domain
variography differed (and associated search volumes), the Indicated volume differed as
well.
It was not considered ideal to have separate Indicated volumes for each domain. Thus a
single volume was chosen on the basis of data density, KE, ZZ*, and combined first-pass


search volumes, to create a single outline to which Indicated resource classification could
be assigned to domains 100, 200, 501 and 502.
In general, the average KE increases by an order of magnitude from Inferred to

Measured, indicating elevated confidence of the estimate and justifying an increases
resource category. These results are also reflected in ZZ* (Indicated to Measured: 0.08
to 0.46, 0.27 to 0.79, 0.05 to 0.50 and 0.32 to 0.91 for domains 100 to 502
respectively).
14.11.3 GRANDUC INFERRED MINERAL RESOURCE CLASSIFICATION
With respect to the Granduc deposit model, the Inferred Mineral Resource is defined as
the volume of mineralization more distal to the Indicated Mineral Resource, yet occurs
within the domain wireframes. The Inferred Resource takes in consideration geological
continuity to extrapolate these mineralized positions. Distance between drillholes in the
Inferred Resource range from 60 to 260 m with the average spacing around 100 m. The
smaller mineralized positions (domains 503 to 505 inclusive) were assigned Inferred
status due to the paucity of drill holes defining these wireframes. The North Zone
domains also contained less drilling continuity and were entirely classified as Inferred.
Domain 90 was also assigned Inferred status as any mineralized positions are not well
supported by drilling.
14.12 MINERAL RESOURCE TABULATION
in metric tonnes (1 t = 1,000 kg), grades are in copper (%), gold (g/t), and silver (g/t).
Gold and silver metals are reported as troy ounces. Copper metal is reported as imperial
pounds. Density is reported as specific gravity (i.e. t/m3).
14.13 CUT‐OFFS
Mineral resources for the Granduc deposit were classified under the 2010 CIM Definition
Standards for Mineral Resources and Mineral Reserves by application of copper
equivalent cut-offs which reflect commodity prices. The copper equivalent cut-offs
represent the total metal content (i.e. copper + gold + silver) expressed as copper.
Copper equivalent is calculated as a function of metal price (in US dollars) and metal
recovery for gold and silver only. As this is reported as an in situ resource, no copper
recovery is calculated. The metal price and recovery parameters used to determine
copper equivalent is shown in Table 14.20.


Table 14.20 Metal Price and Recovery Parameters for Copper Equivalent Calculation
Metal Price Updated Recovery
Metal (US$) (%)
Copper 3.60/lb n/a – in situ resource
Gold 1,260.00/oz 88
Silver 28.00/oz 68
The following calculation is used to convert the OK grades (i.e., cu_ok, au_ok, ag_ok) for
each metal (copper, gold and silver) within each interpolated cell into a copper
equivalent. Metal prices and recoveries are based on the parameters in Table 14.20. No
recoveries are applied for copper as it is reported as an in situ resource.
 Cu_1 = (cu_ok*22.0462*3.60)
 Cu_2 = (au_ok*0.88/31.1035*1260.00)
 Cu_3 = (ag_ok*0.68/31.1035*28.00)
 Cu_4 = Cu_1+Cu_2+Cu_3
 CuEq = (Cu_4/3.60/22.0462).
The single cut-off grade used to report the total resources is that which most likely
represents the grade which would be used to distinguish between ore (mill feed) and
waste in the active mining environment. This cut-off grade is estimated to be 0.8%
copper equivalent.
in metric tonnes (1 t = 1,000 kg), grades are in copper (%), gold (g/t), and silver (g/t).
Gold and silver metals are reported as troy ounces. Copper metal is reported as imperial
pounds. Density is reported as specific gravity (i.e. t/m3).
14.13.1 RESOURCE TABLES
Table 14.21 to Table 14.27 show the Granduc Main and North Zone mineral resources.
The magnetite resource only includes those parts of the resource for which magnetite
was estimated. Magnetite was not estimated for the remainder of the blocks (including
all 14.11 Mt of the North Zone above 0.8% CuEq cut-off, as well as 0.28 Mt Measured
and Indicated and 2.48 Mt Inferred in the Main Zone above 0.8% CuEq cut-off) and
therefore could not be included. This does not indicate that these blocks do not contain
enough magnetite to estimate, only that there is insufficient data at this time to facilitate
an estimation.


Table 14.21 Measured Resource for the Granduc Copper Deposit Main Zone
CuEq
Measured 0.4 2.94 5.21 180.2 28,452 2,278,368 1.57 0.17 13.6
0.6 2.94 5.20 180.1 28,400 2,276,287 1.57 0.17 13.6
0.8 2.94 5.16 179.6 28,208 2,266,080 1.58 0.17 13.7
1.0 2.94 5.07 178.1 27,769 2,236,112 1.59 0.17 13.7
1.2 2.94 4.81 172.7 26,422 2,132,407 1.63 0.17 13.8
1.4 2.93 4.13 155.8 22,939 1,849,381 1.71 0.17 13.9
1.6 2.93 3.15 127.4 17,708 1,419,946 1.84 0.18 14.0
1.8 2.93 2.10 92.7 12,006 948,783 2.00 0.18 14.1
2.0 2.92 1.34 64.3 7,789 602,454 2.18 0.18 14.0
Table 14.22 Indicated Resource for the Granduc Copper Deposit Main Zone
CuEq
Indicated 0.4 2.95 6.23 189.1 33,596 2,272,311 1.38 0.17 11.4
0.6 2.95 6.22 189.0 33,559 2,270,418 1.38 0.17 11.4
0.8 2.95 6.16 188.2 33,241 2,250,397 1.39 0.17 11.4
1.0 2.95 5.96 185.0 32,227 2,183,541 1.41 0.17 11.4
1.2 2.95 5.43 174.0 29,376 1,992,071 1.45 0.17 11.4
1.4 2.94 3.94 136.2 21,421 1,491,492 1.57 0.17 11.8
1.6 2.94 2.28 87.9 12,510 870,679 1.75 0.17 11.9
1.8 2.92 1.23 53.0 6,819 454,691 1.96 0.17 11.5
2.0 2.90 0.67 32.1 3,720 240,727 2.17 0.17 11.2
Table 14.23 Inferred Resource for the Granduc Copper Deposit Main Zone
CuEq
Inferred 0.2 2.91 129.66 1,585.4 170,303 13,075,475 0.56 0.04 3.1
0.4 3.01 42.68 1,074.0 170,289 13,074,148 1.14 0.12 9.5
0.6 3.04 32.39 967.9 170,251 13,070,601 1.36 0.16 12.6
0.8 3.05 30.52 940.3 169,666 13,032,863 1.40 0.17 13.3
1.0 3.05 29.46 921.5 166,275 12,832,741 1.42 0.18 13.5
1.2 3.05 26.82 866.4 152,723 11,803,411 1.47 0.18 13.7
1.4 3.03 20.38 707.6 117,914 9,141,987 1.58 0.18 14.0
1.6 3.02 14.00 523.5 82,567 6,413,947 1.70 0.18 14.3
1.8 3.02 7.39 305.5 44,184 3,473,320 1.88 0.19 14.6
2.0 3.01 3.66 167.0 22,011 1,755,792 2.07 0.19 14.9


Table 14.24 Inferred Resource for the Granduc Copper Deposit North Zone
CuEq
Inferred 0.2 2.94 34.97 567.5 118,104 3,143,941 0.74 0.11 2.8
0.4 3.03 14.68 470.7 98,072 2,392,577 1.45 0.21 5.1
0.6 3.03 14.27 466.7 97,539 2,374,319 1.48 0.21 5.2
0.8 3.03 14.11 464.4 97,315 2,362,709 1.49 0.22 5.2
1.0 3.03 14.00 462.5 96,801 2,340,696 1.50 0.22 5.2
1.2 3.04 12.37 426.5 89,041 2,077,206 1.56 0.22 5.2
1.4 3.05 10.18 369.8 77,505 1,729,422 1.65 0.24 5.3
1.6 3.06 7.28 283.0 58,229 1,230,933 1.76 0.25 5.3
1.8 3.08 4.09 176.2 32,217 671,020 1.95 0.25 5.1
2.0 3.11 2.33 110.1 17,145 370,246 2.14 0.23 4.9
Table 14.25 Measured and Indicated Resource for the Granduc Copper Deposit
CuEq
Measured + 0.4 2.94 11.44 369.2 62,048 4,550,679 1.46 0.17 12.4
Indicated 0.6 2.94 11.42 369.1 61,959 4,546,705 1.47 0.17 12.4
0.8 2.94 11.32 367.7 61,449 4,516,477 1.47 0.17 12.4
1.0 2.94 11.04 363.1 59,996 4,419,653 1.49 0.17 12.5
1.2 2.94 10.24 346.6 55,798 4,124,478 1.54 0.17 12.5
1.4 2.94 8.07 292.0 44,360 3,340,873 1.64 0.17 12.9
1.6 2.93 5.43 215.4 30,219 2,290,625 1.80 0.17 13.1
1.8 2.92 3.33 145.7 18,825 1,403,474 1.99 0.18 13.1
2.0 2.92 2.01 96.4 11,510 843,181 2.18 0.18 13.1


Table 14.26 Inferred Resource for the Granduc Copper Deposit
CuEq
Inferred 0.2 2.92 164.62 2,152.9 288,407 16,219,415 0.59 0.05 3.1
0.4 3.01 57.36 1,544.7 268,361 15,466,725 1.22 0.15 8.4
0.6 3.04 46.66 1,434.6 267,790 15,444,919 1.40 0.18 10.3
0.8 3.04 44.63 1,404.7 266,982 15,395,572 1.43 0.19 10.7
1.0 3.05 43.46 1,383.9 263,076 15,173,437 1.44 0.19 10.9
1.2 3.05 39.19 1,292.9 241,764 13,880,617 1.50 0.19 11.0
1.4 3.04 30.56 1,077.4 195,419 10,871,409 1.60 0.20 11.1
1.6 3.03 21.28 806.6 140,797 7,644,879 1.72 0.21 11.2
1.8 3.04 11.48 481.7 76,401 4,144,340 1.90 0.21 11.2
2.0 3.05 5.99 277.1 39,156 2,126,038 2.10 0.20 11.0
Table 14.27 Inferred Magnetite Resource for the Granduc Copper Deposit at CuEq >= 0.8%
Magnetite
Resource Cut-off Density Tonnes Magnetite Magnetite
Category (%) (t/m3) (Mt) (Kt) (%)
Inferred 1.0 3.03 38.8 4,968 12.8
2.0 3.03 38.1 4,958 13.0
2.8 3.03 37.1 4,934 13.3
3.0 3.03 36.8 4,925 13.4
4.0 3.03 34.5 4,844 14.0
5.0 3.03 31.5 4,707 14.9
10.0 3.07 19.7 3,890 19.7
15.0 3.09 16.2 3,448 21.3
20.0 3.14 9.2 2,198 23.9
14.13.2 GRADE‐TONNAGE CURVES
Figure 14.16 to Figure 14.20 depict the grade-tonnage curves for the Granduc Main and
North Zone mineral resources. These provide a graphic synopsis of the mineral
resources.


Figure 14.16 Grade‐Tonnage Curve for Measured + Indicated Resources

Columbia

Figure 14.17 Grade‐Tonnage Curve for Total Inferred Resources

Columbia

Figure 14.18 Grade‐Tonnage Curve for Main Zone Inferred Resources

Columbia

Figure 14.19 Grade‐Tonnage Curve for North Zone Inferred Resources

Columbia

Figure 14.20 Grade‐Tonnage Curve for Inferred Magnetite Resource (at a 0.8% CuEq Cut‐off)

Columbia

14.14 COMPARISONS WITH PREVIOUS RESOURCE MODELS
The previous Granduc resource estimate and associated model were completed by SRK
in 2012 (Johnson 2012). SRK reported the total resource in reference to net smelter
return cut-offs. The Tetra Tech model in this report refers to cut-offs in terms of copper
equivalent, and not net smelter return. Furthermore, SRK employed automated software
to generate model wireframes of respective mineralization domains. This model utilizes
direct manual geological interpretations to construct domain-specific wireframes. Thus,
direct comparisons between the two models are invalid.


15.0 MINERAL RESERVE ESTIMATES
A mineral reserve is the economically mineable part of a Measured or Indicated Mineral

Resource. A mineral reserve has not been estimated for the Project as part of this PEA.


16.0 MINING METHODS
16.1 OVERVIEW
The Project comprises two resource zones, the largest of which is the Main Zone, located
in the immediate vicinity of the old mine workings. The second resource zone is the
North Zone, which is an extension of the Main Zone. The total diluted, mineable resource
in both areas is 40.28 Mt, which will result in an overall LOM of 15 years, with a peak
sustained mining rate of 8,500 t/d (or, 3.1 Mt/a).
The SLC mining method is preferred for the Project. This method will account for
approximately 80% of all mining. The remaining material will be mined using the BHOS
method. The combination of both of these methods will result in maximum recovery of
the economic resource on the Property.
Main Zone mining will take priority over that of the North Zone in the development and
production schedules, to achieve a sustainable, peak production rate as early in the LOM
as possible.
rail in this heading using personnel and flat train cars. All major mine infrastructure,
including the underground garage, shops and offices will be located on the 800 m Level,
along with the underground crusher, transfer conveyor, and resource and waste bins.
The resource handling system at Granduc will vary by zone and area, but in general, the
resource will first be mucked from the stopes to nearby resource passes and then loaded
in to haulage trucks by chute. Then, all resource will be transported to the coarse
resource bin dump points on the 800 m Level. This bin will feed the underground
crusher on the 760 m Level, from where it will be moved to the train loading bins by
transfer conveyor. Trains will then move the resource from the underground loading
stations to surface via the tide tunnel, where it will be transported to the mill feed
stockpile.
16.2 GEOTECHNICAL EVALUATION
16.2.1 CONSULTANT REPORTS
Selection of the appropriate mining method and optimization of the mine design requires
a thorough understanding of the geology and rock mass properties. Characterization of
the rock mass involves collecting structural data, field observations and measurements
as well as drilling log data and rock testing. A rock engineer analyzes this information


and develops a set of design parameters and recommendations guiding the mining
engineer in the mine design process. Using the results of this evaluation, the rock
engineer recommends excavation methods and ground support that will conduct to a
safe mine design that will minimize project risks.
In the case of this project, there was no historical geotechnical reference data available,
since the Granduc Mine closed many years ago. Tetra Tech personnel did visit the site
and underground mine to visually examine the in situ conditions and some drill core
samples. The understanding from historic operations and field observations provided
some confidence in developing the design recommendations. As no specific on-site
geotechnical investigations were performed by Tetra Tech, the amount of information
available limits the level of this study. Accordingly, the mine design developed by Tetra
Tech incorporates only scoping-level information, based on the limited available
geotechnical information.
16.2.2 GROUND SUPPORT
Table 16.1 summarizes the Tetra Tech ground support recommendations for the Granduc
Mine.
Table 16.1 Recommended Ground Support for Mine Development
Support Geomechanical Profile 1 Profile 2 Ramp
Types Domains (4.0 m by 4.0 m) (5.0 m by 5.0 m) (8.7 m by 4.5 m)
Primary Domain A Spot Bolting as Spot Bolting as 2.4 m long #6
Support (Footwall) required (2.4 m required (2.4 m Rebars 1.0 m by
RMR from 60 to 85 (Good to Very long #6 Rebars) long #6 Rebars) 1.0 m pattern
Good) and Q values of 10 to 100
(Good to Very Good)
Domain B 2.4 m long #6 2.4 m long #6 Not Applicable
(Transition) Rebars 1.5 m by Rebars 1.5 m by
RMR from 40 to 60 (Fair) and Q 1.5 m pattern 1.5 m pattern
values of 1 to 10 (Poor to Good)
Domain C 2.4 m long #6 2.4 m long #6 Not Applicable
(Mineralized zone) Rebars 1.5 m by Rebars 1.5 m by
RMR from 20 to 40 (Very Poor) and 1.5 m pattern 1.5 m pattern
Q values of 0.1 to 1 (Very Poor)
Additional All Domains Install wire mesh, Install wire mesh, 5.0 m long cable
Support additional bolts, additional bolts, bolts 2.0 m by
or shotcrete as or shotcrete as 2.0 m pattern and
required required Install wire mesh,
additional bolts, or
shotcrete as
required


16.2.3 GEOMECHANICAL ASPECTS OF MINING
A large portion of the Granduc Main mineralized zone deposit lies underneath the South
Leduc glacier, including areas that will be mined with the SLC mining method. Although it
is impossible to prevent the caved hanging wall area from eventually propagating to
surface, Tetra Tech decided that a 100 m thick crown pillar left under the glacier should
be sufficient to delay this propagation until after the deposit is mined out. All stopes and
development were therefore removed from the mine plan in this area as it was accepted
that none of it would be recoverable. Further geotechnical investigations and analyses
must be conducted in the area to be able to properly assess the implications of mining
underneath the South Leduc Glacier.
16.2.4 GEOTECHNICAL MONITORING
Considering the lack of any geotechnical or field data, no geotechnical monitoring
program has been developed. A complete geotechnical investigation program is required
for any future stage of the Project. Such a program will require field mapping and
geotechnical drilling. The drill core will be subjected to a detailed core logging exercise to
assess rock quality, and collect structural data. Core samples will be selected and a
comprehensive laboratory program implemented to obtain the intact rock properties.
16.3 MINE DESIGN AND ACCESS
The primary mining method that will be used at Granduc is SLC mining and it accounts
for approximately 80% of overall stope production. In areas where the mineralization was
not large or continuous enough it was decided to use BHOS mining methods to increase
overall resource recovery in the mine (Figure 16.1).


Figure 16.1 Granduc Mine – Longitudinal View
1800 Elev.
1400 Elev.
1000 Elev.
600 Elev.
200 Elev.
Metres
0 200 400 600 800
16.3.1 CUT‐OFF GRADE CALCULATION
The original derivation of the mine cut-off grade (COG) was performed by Mr. David
Penswick, a consultant to Castle, using typical assumed numbers that were initially,
partially supplied by Tetra Tech; the COG calculations and results were later verified by
Tetra Tech engineering personnel. The original incremental COGs were calculated to be
0.41% CuEq grade for SLC mining and 0.59% CuEq grade for BHOS mining. Anton Von
Wielligh of ABB Global Mining was subsequently retained by Castle to produce stope
shells and associated basic development designs using mineral stope optimizer and
mine design software at the given COGs. The resulting information was evaluated in a
detailed Microsoft Excel® cost model by Mr. Penswick and the process was repeated
multiple times until the overall project cash flow was maximized. The COG that achieved
maximum cash flow were 1.2% CuEq in the Main Zone and 1.0% CuEq in the North Zone.
The associated final optimized stope shells were sent to Tetra Tech to prepare the mine
designs and ultimately, the underground mine cost and revenue estimates.
16.3.2 SUB‐LEVEL CAVE MINING
Granduc Mine was historically mined using SLC mining methods. Although it was not
possible to locate old mine records and therefore use actual data for outlining the
expected SLC parameters, there were many technical papers written in the 1970s that


were specific to the SLC methods used at Granduc. The parameters that were used for
the stope designs in this study are based on the historical data contained in these papers
and are listed in Table 16.2. A longitudinal view of SLC mining is shown in Figure 16.2.
Table 16.2 Sub‐level Cave Stope Design Parameters
Units of
Parameter Value Measure Notes
Panel Width 300 m -
Panel Height Variable n/a Panel height equal to vertical extent of mineralized zone
Stope Width Variable n/a Stope width equal to local resource width
Stope Length Variable n/a 150 m maximum (50% of panel width)
Stope Height 20 m Sub-level spacing
Mining External Dilution - Average 25 % -
Mining Recovery - Average 90 % -
Figure 16.2 Longitudinal SLC Mining – Section View
MATERIAL
Hatch - In Situ Material

Hatch - Blasted Material
Hatch - Caved Rock
16.3.3 CONVENTIONAL BOREHOLE OPEN STOPE MINING
Middling or discontinuous stope areas will be mined using conventional BHOS mining,
primarily to increase overall resource recovery, and to allow as much development waste
as possible to remain underground by disposing of it directly in stope voids.
All borehole stopes will be accessed longitudinally from centrally located cross-cut drifts.
A single sill drift/drill room will be driven in all such areas up to a mineralized width of
20 m, after which twin longitudinal mineralized sill drifts will be required.
The majority of the borehole stopes will be mined using downholes. However, uphole
mining may be used to recover material in areas that will not require fill, that are less


than 20 m in height and do not have upper drill room accesses. The Main Zone remnant
stopes are included in this latter category.
The design parameters used for the Granduc BHOS stopes are listed in Table 16.3. A
longitudinal view of BHOS is shown in Figure 16.3.
Table 16.3 Borehole Open Stope Design Parameters
Units of
Parameter Value Measure Notes
Stope Width Variable - Stope width equal to local resource width
Stope Length 20 m Total mineable length before backfilling required
Mining External Dilution - Average 12 % -
Mining Recovery - Average 95 % -
Figure 16.3 Conventional BHOS – Section View
MATERIAL
Hatch - In Situ Material

Hatch - Blasted Material
Hatch - Backfilled Waste Rock
16.3.4 MINING SEQUENCE
The general mining sequence for both the Main and North zones will follow procedures
typical for the selected mining methods. The largest tonnage mining area at Granduc is
the Main Zone footwall SLC zone; this zone was therefore given priority in the mining
schedules wherever possible. Conversely, the development and production schedules
were delayed in the North Zone so that mining would not begin there until the Main Zone
was unable to support the nominal mine production rate of 8,500 t/d on its own.
The general mining sequence in the SLC areas is from the top to the bottom of the panel
and from the outer extremities inwards to the central cross-cut access. In BHOS mining
areas the general mining sequence is from the bottom to the top of the panel, with
stopes retreating laterally from the outside extremities towards the central cross-cut
access.


The overall mining philosophy employed in the sequencing of the Granduc Main Zone
deposit is to:
1. mine the remnant BHOS stopes between 670 and 1,050 m Levels from
rehabilitated headings in the old mine workings
2. mine the hanging wall SLC stope panels from 770 to 470 m Level
3. mine the middling BHOS stopes from 390 to 790 m Level
4. mine the footwall SLC stope panels from 830 to -10 m Level.
Although mining of the hanging wall SLC stopes will be completed before the footwall SLC
panels, mining will begin slightly sooner in the latter due to differences in starting
elevations between zones.
The Main Zone footwall SLC stopes will be lagged behind the hanging wall SLC stopes by
a minimum of one sub-level in the production schedule. This accounts for the loss of the
cross-cut accesses to the Main Zone hanging wall SLC panels once the footwall SLC
panels have been mined out. Tetra Tech also assumed that a temporary resource pillar
will remain in place around the access cross-cuts in the footwall SLC stopes until the
middling BHOS stopes were completely mined out. A total of approximately 2 Mt of
material will be lost from the overall mine schedule if it is found in subsequent
geotechnical investigations that it is not possible to safely maintain a pillar through the
footwall SLC panels. It was assumed that 50% of the resource contained in the BHOS
remnant stopes would be recoverable.
The North Zone mining plan sequence follows the same basic logic as that of the Main
Zone. The general mining sequence in the North Zone is:
1. mine the central BHOS stopes between 660 m and 1,040 m Levels
2. mine the SLC north panel between 1,020 m and 760 m Levels
3. mine the north FW BHOS stopes between 740 m and 1,160 m Levels
4. mine the north HW BHOS stopes between 880 m and 1,280 m Levels
5. mine the SLC south panel between 1,080 m and 660 m Levels.
As previously discussed, it is possible to mine the north hanging wall and footwall
borehole stope areas concurrently since the lateral separation between the two is
sufficient for this purpose.
16.4 MINING METHODS
16.4.1 TIDE TUNNEL (800 M LEVEL)


rail in this heading using personnel and flat train cars. All mineralized material, waste,
and backfill will be transported using standard ore cars.
16.4.2 LEDUC DRAINAGE TUNNEL
The Leduc drainage tunnel will be used to direct mine effluent to surface.
16.4.3 1,100 M LEVEL ADIT
The 1,100 m level adit and tunnel system will be used as the main mine air intake level.
A ventilation raise will transfer fresh air from this level to the main zone fresh air raise
system. In the North Zone a ventilation drift will be driven from the rehabilitated 1,100 m
level to the North Zone fresh air raise system to provide a pathway for intake air.
16.4.4 MAIN ZONE RAMP SYSTEM
The Main Zone ramp will extend from 830 masl elevation to -10 masl elevation. The
ramp will be driven 8.7 m wide by 5.4 m high from 470 m elevation to 830 m elevation in
order to accommodate the anticipated heavy two way traffic. The ramp will be driven
5.3 m wide by 5.4 m high below 470 m level due to reduced production and truck traffic
between those horizons. In order to facilitate the heavy truck traffic that will be required
to maintain the mine production rate. The Main Zone ramp access system was optimized
for truck traffic through the implementation long straightaways and large radius curves in
the design at the expense of additional lateral sub-level development.
16.4.5 NORTH ZONE RAMP SYSTEM
The North Zone ramp will extend up to the 1,280 m Level and down to the 660 m Level
from the 800 m Level and will be entirely driven at 5.3 m wide by 5.4 m high.
16.4.6 SUB‐LEVEL EXTRACTION HEADINGS
The nominal sub-level spacing will be 20 vertical metres for the SLC stopes. Conversely,
the longhole stopes will be accessed every 40 vertical metres from the SLC stope cross-
cut accesses. The 5.3 m wide by 5.4 m high extraction drifts will all be driven in the
footwall and will be located a minimum of 30 m from the footwall resource contact.
16.4.7 STOPE ACCESS CROSS‐CUTS
The access cross-cuts will be driven perpendicular to the local resource body strike at
5.3 m wide by 5.4 m high. The spacing between adjacent cross-cuts will be a maximum
of 300 m.


16.4.8 SILLS AND DRILL ROOMS
All drill rooms will be longitudinally oriented and will be driven from the cross-cut
accesses. It was assumed for this study that all sill drifts would be driven at 4.7 m wide
by 4.4 m high.
16.4.9 VENTILATION RAISES
All primary ventilation raises will be 7 m in diameter. Smaller secondary intake and
exhaust ventilation raises will be tied into these raises and extend the overall system to
all mining areas to establish flow through ventilation circuits in required areas.
16.4.10 RESOURCE AND WASTE PASSES
Resource pass systems will be established throughout most of the Main and North zones.
In order to reduce vertical haulage distances and optimize truck haulage, resource pass
raise sections will be driven in 80 m increments in the Main Zone and truck chutes will be
installed at the bottom of each leg as required in the schedule. The truck chutes will be
installed in a leapfrog manner in the mine schedule to eliminate delays that would occur
while waiting for a single chute to be torn out and reinstalled. The uppermost chute will
be relocated to the second next resource pass leg once the resource horizons it was
servicing are depleted.
In the North Zone, a single resource pass will be driven from the top of the resource zone
to 800 m Level where a single truck load out chute will be installed. Finger raises will be
driven in to the resource pass on each sub-level for the resource dumps.
Waste passes will not be required in the mine since all development muck will be loaded
directly into trucks for haulage to either the waste bin dump point located on 800 m
Level or to available open BHOS.
16.4.11 CRUSHER STATION, RESOURCE/WASTE BINS AND TRAIN LOAD OUTS
It was assumed that the old Granduc crusher on 760 m Level, bins, conveyors, and train
load out excavations would be rehabilitated and re-equipped with new equipment.
However, it was not possible to inspect any of the existing material handling
infrastructure on the site visit and accordingly, it was impossible to estimate the true cost
of this work to any great degree of accuracy. Additional inspection and investigation of
the entire train material handling system must be performed to be able to estimate
actual required costs associated with these infrastructure items, in particular the
excavations themselves.
16.4.12 UNDERGROUND MOBILE EQUIPMENT FLEET
The composition of the underground mobile equipment fleet is based on first principle
calculations using manufacturer supplied productivity data and/or historical data when
available. The existence of multiple production headings and short primary haulage


distances on each major mining sub-level will allow peak load-haul-dump (LHD) utilization
due to virtually constant muck availability. Production drill utilization will be similarly high
due to the large number of adjacent stopes. The trucking fleet productivity was optimized
through the addition of mineralized material pass and truck chute systems located
directly off of double wide ramp sections in the highest tonnage mining areas below
800 m Level. The anticipated total fleet composition throughout the Granduc mine life is
shown in Table 16.4.
Table 16.4 Granduc Underground Mine Mobile Equipment Fleet
Year 2016 2017 2018 2019 2020 2021 2022 2023 2024
LHDs 4 7 10 10 10 11 11 11 11
Jumbos 3 6 6 6 6 7 7 7 7
Production Drills 1 1 4 4 4 4 4 4 4
Trucks 2 3 5 8 8 10 11 12 11
Other 21 34 39 38 38 38 38 37 37
Total 31 51 64 66 66 70 71 71 70
Year 2025 2026 2027 2028 2029 2030 2031 2032 -
LHDs 11 13 8 7 5 4 3 3 -
Jumbos 7 6 3 2 1 - - - -
Production Drills 4 5 5 5 4 4 3 3 -
Trucks 11 9 9 9 8 7 8 6 -
Other 37 35 29 26 19 20 16 12 -
Total 70 68 54 49 37 35 30 24 -
16.5 MINE FIXED EQUIPMENT
16.5.1 MINE BACKFILL
The vast majority of borehole stopes will require cemented backfill and the bulk of the
backfill will consist of development waste material. Cement slurry will be mixed in a
portable colloidal type batch plant and will be added to the development waste loaded in
trucks by using spray bars temporarily installed in a drift near the dump point. It has
been assumed that an average of 5% of binder will be added to all of the backfill waste.
Development waste will be transported from the active development faces directly to
open stopes wherever possible, with any additional waste going to surface via the tide
tunnel train. A total of 5.6 Mt of development waste will be produced by the underground
development, with 2.4 Mt going directly to available stope voids. The remaining 3.2 Mt of
waste that cannot be placed directly into open stopes will be sent to the surface waste
stockpile by train and approximately 2.2 Mt will be returned underground by train for
placement as backfill within the mined out stope voids by truck. There will be a
permanent surface waste stockpile of 1.0 Mt remaining at the end of the mine life. This
material, however, may also be used for the TSF or other surface construction since it will
be non-acid generating.


16.6 MINE VENTILATION AND SECONDARY EGRESS
16.6.1 VENTILATION DESIGN
The Granduc Mine ventilation operating costs and designs are based on the final mobile
equipment schedule of the mine. Air requirements for each of the Main and North Zones
were determined on a quarterly basis and system snapshots were created in the two
quarters where peak air requirements were identified in either zone. These two cases
were subsequently analyzed in VNetPC 2007 and the results were used to size the main
ventilation fans.
The mine will employ a pull type ventilation system; the main exhaust fans will be located
on 710 m Level in the Main Zone and on 1,280 m Level in the North Zone. Three
970 kW fans arranged in parallel will be required to move a maximum of 580 m3/s of air
through the Main Zone workings. In the North Zone, two 400 kW parallel fans will move a
maximum of 337 m3/s of air. Each of the main exhaust fan set-ups will require a switch
room to house the required power and control equipment.
All main ventilation fans will be equipped with variable frequency drives and dampers in
order to optimize the overall ventilation system power consumption by varying the
handled air volumes according to ventilation requirements in either zone. Ventilation
doors and regulators will be installed as appropriate to direct air to the proper areas. The
main air movers will be operated on a ventilation-on-demand basis, meaning that the
operating parameters of the main fans will be controlled from one or more remote
locations. All other ventilation equipment will be operated conventionally and will not be
automated.
The main air intake for the mine will be the reconditioned 1,100 m Level. Diesel fired
burners will be installed near the 1,100 m Level adit entrance to heat the intake air.
16.7 UNDERGROUND MINE SERVICES
16.7.1 MINE POWER
The total estimated underground power load at Granduc is 6.4 MW. This figure is based
on a peak anticipated, installed underground power load of 5.32 MW with the addition of
a 20% safety factor. The main mine feeder cable will be located in the 17 km long tide
tunnel drift.
The main underground substation will be centrally located on 800 m Level. Power will be
distributed to the North and Main Zone mining areas with portable transformers.
16.7.2 COMPRESSED AIR
A new 754 cfm air compressor will be located in the rehabilitated compressor station on
800 m Level. It will be tied in to the new mine compressed air system.


16.7.3 COMMUNICATIONS
Primary underground mine communications will be via leaky feeder. In addition, a fibre
optic system will be installed for data communications.
16.7.4 MINE WATER SUPPLY
Process water will be supplied to the mine from the mill site.
16.7.5 MINE DEWATERING
The mine dewatering system will consist of two main double compartment sump stations
located in the Main Zone. Both will pump clarified water to 755 m elevation, which will
subsequently free flow by gravity out of the Leduc drainage tunnel. Each main sump
system will have a separate pump column. Hydrological investigations have indicated
that the mine effluent will be highly diluted by the expected water inflow and therefore
would not require additional treatment since the effluent is expected to meet all relevant
regulations. All main sump stations will be equipped with a spare pump to prevent
downtime and/or flooding in the event of major mechanical breakdowns of the
operational pumps.
The uppermost main sump station will be constructed on 470 m Level and will be
situated near the Leduc glacier pillar limit. The local mine layout and pumping
equipment will be designed to intercept as much of the sub glacial runoff groundwater as
possible. This pumping system has been designed to collect and handle 100 m3/h of
water.
The second, lower sump will be located on the -10 m Level and is also designed to pump
100 m3/h. It will handle all groundwater produced in the main zone below the upper
main sump horizon as well as any water produced from mining activities.
Dewatering of the mining areas and ramps will consist of catchment sumps in each of the
main sub-level accesses that will collect water from the stoping areas and main ramps.
Drain holes will be drilled between adjacent levels to transfer water to the next lower
sump, where it will eventually end up in one of the main sumps.
The North Zone will not require a full dewatering system since the majority of the zone
will be above the 800 m Level. As in the Main Zone, catchment sumps will be
established on each sub-level with all water inflow above 800 m Level being transferred
to the main dewatering circuit by way of gravity. A pump will be installed in the lowermost
sub-level catchment sump on the 660 m Level to transfer mine waste water to the main
mine effluent stream on the 800 m Level.
16.7.6 SUPPLY STORAGE
Sufficient supply storage will be required in all areas to minimize the logistical difficulties
that will be encountered when moving materials underground via the 17 km long tide
tunnel. Several large laydown areas and rail car sidings will be constructed near the


underground train switching station to minimize interference with the resource and waste
handling schedules. A parts warehouse will be built near the underground garage and
office complex to store spare parts and consumables. In addition, small storage cut-outs
will be driven on each sub-level for temporary storage of all supplies and consumables
used in production and development activities. Almost all materials and consumables
will be transported underground on flat cars.
16.7.7 POWDER AND DETONATOR MAGAZINES
Two permanent powder and cap magazines will be constructed on or near the 800 m
Level in the Granduc Mine. The first will be located in the Main Zone while the second
will be located in the North Zone. All explosives and detonators will be transported
underground on pallets or, in the case of emulsion explosives, in bulk containers.
16.7.8 FUEL STORAGE AND DISTRIBUTION
Fuel will be transported to the underground laydown areas by rail in fuel bladders and
transferred to specific fuelling stations by boom truck. Three mobile equipment fuelling
stations will be constructed; one in the garage/workshop area, one in the Main Zone and
one in the North Zone. SatStat® fuelling and lube equipment will be installed in each of
these stations. An additional diesel fuel storage facility will be constructed by the diesel
fired fresh air intake heaters.
16.7.9 CENTRAL BLASTING
Central blasting will be done from the underground office complex.
16.7.10 EQUIPMENT MAINTENANCE
The maximum number of pieces of diesel mobile equipment that will be underground at
Granduc is approximately 70 units, including all development, production, and support
equipment. All mobile equipment repairs and maintenance must be performed
underground due to the difficulty in moving anything in or out of the mine via rail.
Therefore, a fully equipped, ten bay underground garage will be required to service the
underground mobile equipment fleet.
16.8 UNDERGROUND MINE WORKFORCE
16.8.1 CASTLE RESOURCES PERSONNEL
All production, maintenance, and staff personnel at Granduc Mine will be directly
employed by Castle. In addition, the majority of the underground development crews will
also be comprised of company personnel. The peak underground on site workforce will
be composed of 263 people. The total employed workforce will be approximately 490
people. This results in an overall workforce productivity of 11,600 tonnes per man year.
The workforce composition is outlined in Table 16.5.


Table 16.5 Granduc Mine Underground Workforce Summary
Personnel Hours
Hourly Mining Personnel
Mine Development 35
Mine Production 20
Underground Mine Support 32
Underground Maintenance 24
Total Hourly Personnel per Shift 111
Total Hourly Personnel per Day 222
Staff Mining Personnel
Mining 15
Maintenance 7
Engineering/Geology 19
Total Staff 41
16.8.2 CONTRACTOR PERSONNEL
Contractor personnel will be retained for capital development and major mine
infrastructure construction tasks. A total of two contractor development crews will be
required full time on site for the first six quarters of the mine development plan whereas
contractor construction crews will only be on site as required.
16.9 DEVELOPMENT AND PRODUCTION SCHEDULES
16.9.1 GENERAL SCHEDULING ASSUMPTIONS
All development and production schedules are based on 360 work days per year, or 90
days per quarter, and two 11-hour shifts per day. All development and production work
tasks were scheduled by quarter.
16.9.2 DEVELOPMENT SCHEDULE
All contactor and company development advance rates were set at 4 m/d in single face
development such as the ramp and 6 m/d when two or more faces were available to a
crew. These advance rates are based on industry standards and first principle
calculations.
It was assumed that Castle would perform all identified, necessary underground
rehabilitation work on their current budget prior to beginning the work outlined in the
proposed development plan. Therefore, these future sunk costs were not included in the
mining estimate. The complete Main and North development schedules can be found in
Appendix B


16.9.3 PRODUCTION SCHEDULE
The peak resource production rate at Granduc, including resource development, was set
at 8,500 t/d. The significant amount of development resource produced during the first
13 years of the mine schedule will contribute up to 2,000 t/d of resource to overall mine
production, thereby lessening the pressure on stoping areas until a steady operating
state has been established.
It was assumed that each available draw point would be able to produce an average of
500 t of resources per day. Conversely, the peak production rate per LHD machine was
set at 2,000 t/d to estimate production mobile equipment fleet requirements. This was
achieved by limiting primary stope mucking distances to less than 150 m and by having
multiple full draw points available per LHD. This information was used to estimate the
average production rates on each mining horizon in the production schedules.
The complete mine production schedules can be found in Appendix B.


The concentrator will be located approximately 17 km from the Granduc deposit, and will
process mineralized material at a nominal rate of 8,500 t/d, with an availability of 92%
(365 d/a). A rail line that passes through a 17 km tide haulage tunnel will supply mined
material to the concentrator.
The following two process cases identify the types of concentrates which may be
produced at the facility:
 base case: a copper concentrate (with silver/gold credits) and a magnetite

concentrate.
 alternative case: a copper concentrate (with silver/gold credits) and no
17.1 BASE CASE
The process design for the base case was developed to produce a copper concentrate
with payable gold and silver credits, as well as a magnetite concentrate. The process will
include SAG, conventional flotation, and magnetic separation. Concentrate dewatering
will include conventional thickening, followed by pressure filtration for the copper
concentrate, and rotary disk filtration followed by rotary drying for the magnetite
concentrate. The concentrates will likely then be trucked 52 km by road to a marine load
out facility near Stewart, BC, where they will be transferred to their selected markets.
17.1.1 FLOWSHEET DEVELOPMENT
The mill flowsheet is based on test work conducted at ALS Metallurgy in 2011 and 2012
(Section 13.0), combined with engineering experience. The process plant will consist of
the following major unit operations:
 primary grinding
 rougher flotation
 scavenger flotation
 regrinding
 cleaner flotation
 magnetic separation
 concentrate thickening
 pressure filtration (copper concentrate)


 rotary disk filtration (magnetite concentrate)
 drying (magnetite concentrate)
 tailings thickening.
The simplified process flowsheet is shown in Figure 17.1.
Figure 17.1 Base Case Mill Flowsheet
Rougher Flotation
Cyclone
Cluster
Sag Mill
Scavenger Flotation
Crushed Plant
Feed
Stockpile Pump
Magnetic
Drum
Regrind Mill

Flotation Scavenger Flotation Regrind Mill
Pump
2nd Cleaner
Flotation
Thickener Thickener
Disk Filter
Pressure
Filter
Dryer
Copper Tailings Pond Magnetite

Concentrate Concentrate
17.1.2 PLANT DESIGN
The concentrator has been designed to process 8,500 t/d equivalent to 3,102,500 t/a.
The major criteria used in the design are summarized in Table 17.1.


Table 17.1 Major Design Criteria
Criteria Unit Value
Plant Availability/Utilization
Overall Plant Feed t/a 3,102,500
Overall Plant Feed t/d 8,500
Plant Availability % 92
Design Plant Feed t/d 9,239
Design Plant Feed t/h 385
Mineralized Material Characteristics/Production
Copper Head Grade % 1.5
Gold Head Grade g/t 0.18
Silver Head Grade g/t 10
Magnetite Head Grade % 13.3
Copper Concentrate Copper Recovery % 95
Copper Concentrate Copper Grade % 27
Copper Concentrate Gold Recovery % 79
Copper Concentrate Gold Grade g/t 2.7
Copper Concentrate Silver Recovery % 92
Copper Concentrate Silver Grade g/t 177
Magnetite Concentrate Magnetite Recovery % 61
Magnetite Concentrate Iron Grade % 68
Magnetite Concentrate Sulphur Grade % 1.5
Grinding/Flotation/Magnetic Separation
SAG Mill Feed Size, F80 mm 300
SAG Mill Product Size, P80 µm 160
Bond Ball Work Index kWh/t 11.7
Bond Abrasion Index, Ai 0.12
JK Parameters
A - 66.9
B - 0.56
Axb - 37.5
t10 @ 1 kWh/t - 28.7
Mia kWh/t 20.1
Mic kWh/t 8
Mih kWh/t 15.5
ta - 0.31
Rougher Concentrate Mass Recovery % 15
Rougher Concentrate Regrind Size, P80 µm 20
Cleaner Concentrate Mass Recovery % 5
Magnetic Separation on Rougher Tailings - 2-Stage Separation - Magnetic Drums
Magnetic Separation 1st Stage Concentrate Regrind Size, P80 µm 40
table continues…


Criteria Unit Value
Concentrate Dewatering
Copper Concentrate Thickening type Conventional
Copper Concentrate Filtration type Pressure
Copper Concentrate Moisture Content % 12
Magnetite Concentrate Thickening type Conventional
Magnetite Concentrate Filtration type Rotary Disk
Magnetite Concentrate Drying type Rotary
Magnetite Concentrate Moisture Content % 5
Tailings Thickening type Conventional
Tailings Thickening U/F Density % 60
The process plant is designed to operate on the basis of two 12-hour shifts per day, with
an assumed availability of 92%. These availabilities will allow for any potential in
increase in processing rate, sufficient downtime for scheduled and unscheduled
maintenance of equipment, and potential weather interruptions.
17.1.3 PROCESS PLANT DESCRIPTION
PRIMARY GRINDING
The primary grinding circuit will consist of a 30" diameter SAG mill in closed circuit with a
vibrating screen and classifying hydrocyclones. The grinding will be conducted at a wet
nominal rate of 385 t/h and target a product size of 160 µm K80 which will be fed to the
flotation circuit.
The design of the SAG mill requires a low aspect ratio, similar to SAG mills which typically
operate in South Africa and Australia. While this design is contrary to conventional North
American SAG ”pancake” mills, which have a high aspect ratio and usually operate in two
stages including a ball mill circuit, it is important to note that this design has been proven
to process material efficiently and effectively. It is pertinent that the top size of the
mineralized material fed to the SAG mill does not exceed 300 mm for the target product
size to be met.
FLOTATION
The ground milled pulp will be subjected to flotation to recover a copper concentrate with
payable gold and silver. The flotation circuit will include rougher, scavenger, and cleaner
cells. The entire flotation process will be conducted at natural pH with the addition of
PAX as collector and MIBC as frother.
The rougher concentrate will recover approximately 15% of the feed mass. This material
along with the material recovered in the scavenger concentrate will be combined and
sent to a regrinding circuit. The target product size of the regrind mill is approximately
25 µm K80. This regrind mill will likely be a Vertimill® or ISAMill to efficiently achieve the
target product size. The reground concentrate will be fed to a cleaner circuit, consisting


of two cleaning stages. Approximately 5% of the initial mill feed mass will be recovered in
the final copper concentrate. The concentrate produced will be sample automatically
prior to any dewatering procedures.
Tailings from the rougher and scavenger flotation streams will be combined sent to the
magnetic separation circuit for magnetite recovery. The tailings from the 1st cleaner
scavenger stream will be combined with tailings from magnetic separation and fed to a
conventional tailings thickener.
MAGNETIC SEPARATION
The magnetic separation circuit will operate in two stages. The feed to the circuit will
come from the flotation rougher tailings stream at a sizing of approximately 160 µm K80,
and will be fed to a series of five magnetic drums. While the tailings from this 1st
magnetic separation stage will report to the tailings thickener, the concentrate will be
subjected to regrinding in a ball mill, targeting a size of approximately 40 µm K80. The
reground product will then be fed to one more magnetic separation drum. The
concentrate produced will be sampled automatically prior to any dewatering procedures.
The tailings from the 2nd stage of magnetic separation will be combined with the tailings
from the 1st stage of magnetic separation and the tailings from the 1st cleaner scavenger
stream to be fed to a conventional tailings thickener.
CONCENTRATE HANDLING
Both the copper and magnetite concentrates will be treated in a conventional
concentrate thickener. Flocculant will be added to the thickener feed wells to aid the
settling process. The thickened concentrates will be pumped to concentrate stock tanks.
The underflow densities will be approximately 60% solids. The concentrate stock tanks
will be agitated tanks which serve as the feed tanks for the filtering process. The
pressure-type filter will be used for further concentrate dewatering for the copper
concentrate circuit, while a rotary disk filter will serve for the magnetite concentrate
circuit. The filter press will dewater the copper concentrate to produce a final
concentrate with a moisture content of approximately 12%, while after the magnetite
concentrate is filtered in a rotary disk filter, drying of the concentrate in a rotary gas fired
dryer will produce a concentrate with a moisture content of approximately 5%. The
filtrates will be returned to the concentrate thickeners. The filter press solids will be
discharged to the concentrate stockpiles which are able to stock the concentrates for
several days. The concentrates will be loaded on trucks and transported to a marine load
out facility near Stewart, BC, where they will be transferred to their selected markets.
Thickener overflow solution from the concentrate thickeners will be collected and
recycled.
TAILINGS HANDLING
The 1st cleaner scavenger flotation tailings will be combined with 1st and 2nd stage
magnetic separation tailings and thickened in a conventional tailings thickener.
Flocculant will be added to the thickener feed wells to aid the settling process. The


underflow densities will be approximately 60% solids. This material will be pumped at a
rate of approximately 93 t/h and transferred by pipeline and deposited in the site’s TSF.
The thickener overflow solution from the tailings thickeners will be collected and
recycled.
REAGENT HANDLING AND STORAGE

Various chemical reagents will be added to the process slurry streams to facilitate the
processes. These reagents used in the process will include:
 flotation: PAX, MIBC

 thickeners: flocculants.
The preparation of the various reagents will require:
 a bulk handling system

 mixing and holding tanks
 metering pumps
 a flocculant preparation facility
 eye-wash and safety showers
 applicable safety equipment.
The chemical reagents will be added to the grinding and flotation circuits to modify the
mineral particle surfaces and enhance the floatability of the valuable mineral particles
into the concentrate products.
Fresh water will be used for the making up or for the dilution of PAX that will be supplied
in powder/solid form. The strength of the reagent solution will be approximately 20%.
This solution will be stored in a holding tank and added to the addition points of the
flotation circuit using metering pumps.
Liquid reagents, such as MIBC, will not be diluted and will be pumped directly from the
bulk containers to the points of addition using metering pumps. Flocculant will be
prepared in the standard manner as a dilulte solution of less than 0.1% solution strength.
This will be further diluted in the thickener feed well.
The storage tanks will be equipped with level indicators and instrumentation to ensure
that spills do not occur during normal operation. Appropriate ventilation, fire and safety
protection, and Material Safety Data Sheet stations will be provided at the facility.
17.2 ALTERNATE CASE
The process will produce a copper concentrate with payable gold and silver credits and
without production of a magnetite concentrate. This case is identical to the base case,


but excludes all items included in the magnetic circuit. Figure 17.2 illustrates the
simplified process flowsheet for the alternate case.
Figure 17.2 Alternate Case Mill Flowsheet
Rougher Flotation
Cyclone
Cluster
Sag Mill
Scavenger Flotation
Crushed Plant
Feed
Stockpile Pump
Regrind Mill

Flotation ScavengerFlotation
Pump
2nd Cleaner
Flotation
Thickener
Pressure Filter
Copper
Concentrate Tailings Pond
Some of the advantages of the alternate case over the base case are that the alternate
case would reduce the mill footprint, simplify the process flowsheet, and lower both the
total operating and capital costs. The reduction of the above items is likely to increase
the efficiency and effectiveness of the process as a whole, but also remove any potential
of added profit from production of a magnetite concentrate.
17.3 RISKS AND OPPORTUNITY
Due to the location of the proposed Granduc mining and milling site, weather may cause
plant availability to fluctuate in any given year.


The throughput and overall mill efficiency may be negatively affected if target grind sizes
are not met in the primary grinding circuit; accordingly, it will be important to ensure that
pre-crushed mill feed meets its target product size. This primary grinding circuit has the
potential to be as efficient as conventional SAG milling circuits used in North America
without requiring the associated large mill foot print.
The base case has more marketing potential over the alternate case, but also adds
complexity to the flowsheet, increases the mill footprint, and increases the capital and
operating costs.
Since the zones within the Granduc deposit contain a variable amount of feed magnetite,
there is potential for production of the magnetite concentrate to increase in value, but
also decrease. The magnetite circuit could be bypassed if it is observed that the
mineralized material did not contain a significant amount of magnetite.
No metallurgical test work has been conducted on samples from the North and South
zones, and though these zones only make up less than 20% of the whole deposit, there is
no certainty to how the mineralized material from these zones will respond to the
flowsheet from either case.
Primary and regrind mill sizes have not been optimized, as only preliminary test work has
been completed to date. There is opportunity to significantly reduce project costs if it is
determined through optimization work that target grind sizes should be coarser.
There is also potential that the moisture content of the copper concentrate would actually
be lower than 12% after pressure filtration. A lower moisture content would reduce
storage and shipping costs significantly.
Other potential positives concerning the mill design plan include a labour complement
that works normal shifts and reside in town, and lower power consumption due to the
relatively soft mineralized material which coupled with the low price of electricity results
in very low energy costs, and low reagent consumption due to the mineralized material’s
excellent response to the process flowsheet.


18.0 PROJECT INFRASTRUCTURE
The Project site is located in northwestern BC approximately 52 km north by road of

Stewart, BC. The Project is a redevelopment of a past-producing underground copper,
gold, and silver mine. The Project area is situated in steep, mountainous terrain, with
elevations ranging from 700 to 2,200 masl; local watersheds are dominated by valley
glaciation.
Surface infrastructure and service requirements to support the mining and processing
operations are summarized in the following sections. Infrastructure requirements are
based on the base case, which includes the production of both copper and magnetite
concentrate. The Project will utilize both existing infrastructure from the historical mining
operations, as well as new infrastructure:
 administrative and mine dry complex

 surface maintenance shop and warehouse
 assay lab
 accommodations camp complex and ancillary facilities
 fuel storage and distribution
 water supply and distribution
 surface water management
 sewage and waste management
 off-site power supply and on-site distribution
 TSF
 waste rock storage facility
 road maintenance yard
 on-site roads interconnecting facilities
 off-site access road
 off-site marine load out facility.
A general layout of the Project is shown in Figure 18.1. The general arrangement of the
plant site is presented in Figure 18.2.


Figure 18.1 Plant Site General Layout
130° 10' 00" W 130° 00' 00" W
56° 15' 00" N

N BERENDON
Beredon
LAKE Lake
Mineral Claim
407212 Permanent Camp
Berendon Glacier
Road Maintenance
Yard and Lay Down Substation
Area Fuel
Process Plant Storage
Including
56° 10' 00" N
Administration Stockpiles
Mine Dry Shop
and Warehouse
Granduc Road
Tailings Thickner
Granduc
Tunnel Transmission
Line
Metres
56° 05' 00" N
0 100 200 300 400


Figure 18.2 Project General Arrangement
130° 20' 00" W 130° 10' 00" W 130° 00' 00" W
N
56° 15' 00" N
Berend
on Gla
cier
Waste Rock Plant Site Mitre

Mountain Betty
Storage Facility Glacier
STEWART
MOUNTAINS
Summit Basin TSF Bear River

Ridge
Granduc
So
ut
h Underground Tunnel
Summit
Mine Workings Basin
Le
Access Road
du
c
Gl
Granduc Road
ac
ier
Divide
Lake
Current Seasonal
Flooding Extent
56° 10' 00" N
Salmon
Glacier
Mount
Dilworth
Mount
Kilometres Bayard
Mount
Lindeborg
0 2 4 6
Long
Lake
Proposed
Silver
Transmission Line Corridor Lakes
Highway 37A
Mineral Claim 407212
Infrastructure Area
56° 05' 00" N
Summit Basin Tailings Corridor Slate
RIVER
Mountain
Existing
BEAR
Secondary (Gravel) Road
Glacier
Granduc Tunnel
Lake
Long Lake
Granduc Road
Powerhouse Site

Preliminary Economic Assessment of the Granduc Copper Project, Northern
British Columbia

18.1 TAILINGS STORAGE FACILITY
18.1.1 GENERAL
The principal design objectives for the TSF are to ensure protection of the regional
groundwater and surface waters both during operations and in the long-term (after
closure), and to achieve effective reclamation at mine closure. Several tailings
management alternatives were considered. The preferred location of the TSF was
selected over other sites within the Project area (shown in Figure 18.1), because of its
proximity to the plant complex and the presence of historical tailings deposited within the
proposed impoundment area.
The design of the TSF takes into account the following requirements:
 to provide permanent, secure, and total confinement of all tailings material

within an engineered storage facility
 to control, collect, and remove free draining liquids from the tailings during
operations for recycling as process water, to the maximum extent possible
 to monitor all aspects of the facility to ensure performance goals are achieved
and design criteria and assumptions are met
 to stage development of the facility over the life of the Project.
The location of the TSF within Summit Basin is shown on Figure 18.3.


Figure 18.3 TSF General Arrangement
130° 10' 00" W 130° 00' 00" W
56° 15' 00" N

N
Plant Complex Tailings

Pipeline
PAG Tailings
Storage Area
PAG Embankment
Reclaim
Pipeline
NPAG Tailings
Storage Area
56° 10' 00" N
Approx. Water Reclaim Barge

Catchment Area
NPAG Embankment
Seepage Collection
Sediment Control
Pond
Metres
56° 05' 00" N
0 200 400 500
18.1.2 GENERAL SITE CONDITIONS
Very little information is known about the foundation conditions within Summit Basin,
where the TSF will be located. No site-specific geotechnical or hydrogeological
investigations have yet been completed. Prefeasibility-level geotechnical and
hydrogeological site investigations are recommended to confirm the assumptions used to
develop the conceptual TSF design.


The TSF will be located within a glaciated setting along a narrow point of Summit Basin.
The TSF will be situated as far north in the basin as possible, to maximize the distance
between the facility and the Salmon Glacier. A glaciological study is recommended at the
next design stage to analyze the associated risks and predict the future behavior of
Summit Glacier including the expected extent of Summit Basin filling.
The Project is located in an area of northwestern BC known as the “Golden Triangle”,

where the presence of geohazards is extensive (Martin 2011). A detailed geohazard
assessment is recommended in future design studies to identify and characterize
potential geohazards that could impact the TSF and auxiliary facilities.
The coastal mountain ranges of BC are susceptible to significant seismic hazard

(Martin 2011). A probabilistic seismic hazard analysis was conducted using the Natural
Resources Canada (NRCan) “2005 National Building Code Seismic Hazard Calculation”
to provide seismic ground motion parameters. The study area has a 10% chance of
exceeding a peak ground acceleration of 0.06 g in 50 years (equivalent to an earthquake
with a 1-in-475-year return period producing a peak ground acceleration of 0.06 g). This
indicates a low seismic hazard for this site. A detailed seismic hazard assessment for the
proposed TSF site is recommended at the next level of design.
18.1.3 DESIGN BASIS AND OPERATING CRITERIA
The TSF is designed to store 36.9 Mt of tailings (32.5 Mt NPAG, 4.4 Mt PAG) for the base
case with a maximum processing plant throughput of 8,500 t/d over a period of 16
years. For the alternative case, the TSF will be required to store approximately 39 Mt of
tailings (i.e. 34.2 Mt NPAG, 4.4 Mt PAG).
No geotechnical tailings test results were available when Tetra Tech prepared the
conceptual design of the TSF. Tailings are expected to be primarily fine- to medium-
grained. The in situ dry density of the tailings is assumed to be 1.4 t/m3. A summary of
the design basis and operating criteria for the TSF is presented in Table 18.1.
Table 18.1 Design Basis Criteria
Item Design Criteria

Project Location  50 km north of Stewart, BC
Mine Production  total material milled = 40.3 Mt
 maximum throughput = 8,500 t/d
 mine life = 16 years (plus pre-production)
Concentrate (base case)  total concentrate (copper and magnetite) produced = 3.4 Mt
Tailings (base case)  total tailings production = 36.9 Mt
 total NPAG tailings = 32.5 Mt
 total PAG tailings = 4.4 Mt
 average in situ dry density (final) = 1.4 t/m3
table continues…


Item Design Criteria
Operational Criteria  zero discharge of process water
 supernatant and seepage water recycled for re-use in mill
process
 store 32.5 Mt of tailings and supernatant water in NPAG area
 store 4.4 Mt of tailings and supernatant water in PAG area
Embankment Crest Widths  minimum 10 m during ongoing raises and at closure for NPAG
and PAG embankments
Design Freeboard  5 m for storm storage and wave run-up protection
Seepage Control Measures  NPAG area = zoned earthfill embankment with low permeability
soil core zone
 PAG area = fully double lined embankment and impoundment
area
 prevent adverse downstream water quality impacts by collecting
and recycling seepage as necessary
Starter Embankments  one-year storage capacity for both NPAG and PAG tailings
Embankment Fill Materials  local borrow sources
 NPAG embankment = zoned earthfill/rockfill embankment
 PAG embankment = earthfill/rockfill embankment with double
high-density polyethylene (HDPE) lined upstream slope and
impoundment area
Tailings Distribution  separate tailings pipelines from the plant complex for NPAG and
PAG tailings
 tailings distribution from several discharge points along both
embankments
 tailings pumping required
Reclaim System  floating barge pump-station in TSF that pumps to a shore based
reclaim pump station
 reclaim pipeline to plant complex
18.1.4 TAILINGS STORAGE FACILITY DESIGN
The TSF design includes a series of embankments that contain the NPAG and PAG
tailings in connected “stair-step” cross-valley impoundments (Vick 1990). The TSF will
establish storage capacity for PAG and NPAG tailings through two embankments within
the Summit Basin. The embankments will be developed in stages throughout the life of
the Project. The PAG area of the TSF will be fully lined with two layers of HDPE liner and a
drainage layer in between. The embankment required for the PAG facility will be sloped
at 3H:1V on the upstream slope to facilitate liner placement and 2H:1V on the
downstream slope. The impoundment area will be graded so that any seepage through
the first liner will be collected in a permeable layer and report to a sump. Water collected
in this sump will be pumped through a pipe in the face of the embankment and back into
the impoundment area.


The NPAG area of the TSF will be located immediately downstream of the PAG area. The
NPAG area of the TSF will be unlined, and will comprise one embankment raised by the
downstream construction method with 2H:1V upstream and downstream slopes, 5 m
minimum freeboard and a 10 m minimum dam crest width. This embankment will
include a low permeability soil layer with underlying filter/transition drainage layers on
the upstream face.
The base case characteristics of the TSF, including embankment size, impoundment
storage capacity and estimated embankment volumes, are summarized in Table 18.2.
For the alternative case, the TSF is required to store approximately 1.7 Mt of additional
NPAG tailing, which will result in a 2 m increase in the NPAG embankment final crest
elevation. The PAG tailings facility will remain the same, since the quantity of PAG tailings
for both the base and alternative cases is assumed similar.
Table 18.2 Summary of Tailings Storage Facility
NPAG Area PAG Area

Description Starter Final Starter Final
Unit Embankment Embankment Embankment Embankment
Tailings Impoundment Storage Volume Mm3 4.85 30.32 0.81 4.91
Approximate Dam Crest Elevation masl 788 822 802 826
Approximate Foundation Elevation masl 767 765 779 779
Maximum Dam Height m 21 57 23 47
Embankment Volume Mm3 0.13 1.91 0.82 1.60
Estimated Freeboard Allowance m 5 5 5 5
Storage Efficiency Ratio ‐ 38 16 1 3
Tailings Impoundment Footprint km2 0.41 0.91 0.07 0.21
Tailings will be deposited as conventional slurry and discharged from spigots located
along the two embankment crests. Reclaim water from the NPAG tailings impoundment
area will be achieved via a floating reclaim barge with pumps.
18.1.5 CONSTRUCTION MATERIALS
Borrow sources will be required for construction of the TSF embankments,
tailings/reclaim pipeline beds and access roads. The TSF embankments will require
sources for different gradations of blasted rockfill, sand and gravel, and potentially silt or
clay materials. A quarry for rockfill can potentially be developed within or close to the
selected TSF footprint. Studies should be conducted in the next design phase to identify
potential use of mine waste rock and local borrow sites for materials with physical and
geochemical properties acceptable for construction.
Because the TSF is located in a glaciated area, Tetra Tech assumed that there will be a
reasonable supply of glacial and alluvial materials that can be sourced from a natural
earth quarry. These materials will be used to construct the low permeability soil layers
and filter zones.


18.1.6 INSTRUMENTATION AND MONITORING
Geotechnical instrumentation will be installed in the tailings embankment and foundation
during construction and over the life of the Project. The instrumentation will monitor
embankment performance and identify problem conditions during the construction and
operation.
Groundwater monitoring/recovery wells will be installed at appropriate locations along

the downstream toe of the embankment for the NPAG and PAG tailings storage areas.
The wells will recover samples to monitor water quality of the seepage through the
embankments and foundation areas.
18.1.7 SEEPAGE COLLECTION AND RECYCLE
The PAG area of the TSF will be double-lined with a HDPE liner to prevent seepage
through the PAG tailings facility foundation and embankment. Seepage water losses
from the NPAG area of the TSF will be collected in seepage interception systems located
downstream of the NPAG embankment. Intercepted seepage will be conveyed to
collection sumps/ponds from where it will be pumped back into the TSF. Special design
provisions to minimize seepage losses include the installation of a seepage cut-off
beneath the NPAG embankment, a seepage interception and recovery system and
contingency measures for groundwater recovery and recycle. Wells will be located
downstream of the facility for groundwater monitoring and will double as pump-back
wells, if required.
18.1.8 CLOSURE
The post-closure objectives for the TSF will be to meet effluent quality requirements, and
to prevent exceedance of water quality objectives in receiving streams as a result of
water release through surface discharge and groundwater seepage. TSF closure design
is a stable final configuration that addresses these considerations. Current concepts for
the final configuration and reclamation of the TSF include:
 exposed sub-aerial NPAG tailings beaches that will be re-vegetated to the extent
feasible
 storage of PAG tailings under permanently saturated conditions, likely including
a water cover over most of the tailings impoundment area
 rock covered dam(s) with discharge via a permanent spillway to ensure long-
term geotechnical stability under extreme runoff conditions.
The tailings and reclaim pipelines, and associated water management structures, will be
removed at closure. Where possible, materials will be salvaged and recycled, sold, or
donated. Materials that cannot be recycled or reused will be disposed of in an approved
manner.


The TSF power line will be dismantled, and the structures and materials, where feasible,
removed for reuse, recycling or appropriate disposal. The access/maintenance road will
be de-compacted, re-contoured, and reclaimed.
18.2 MAIN SITE BUILDING
The main site building will be located at the plant complex, and will consist of a single
structure that will house the process plant, surface shop, warehouse, administration
office, mine dry, and assay lab. Limiting the number and extent of surface structures
optimizes operational and logistical efficiencies, given the high snow loads experienced in
the Project area.
Site preparation for the plant complex area will consist of clearing and grubbing of areas
that will accommodate the surface facility. Sites will be levelled and graded only in
construction areas. Cut-and-fill methods will be used to create large, level areas as
required. For the purposes of this study, Tetra Tech assumed:
 An average of 100 mm of topsoil will be required.

 Fifteen percent of excavated material is unsuitable.
 Twenty-five percent of excavated material is in rock, 50% of which will be
rippable rock with the remaining rock requiring the application of drilling and
blasting methods.
The plant site areas will require a geotechnical investigation in future phases of the
project to determine the suitability of the proposed locations and the types of material
that will be encountered.
The main process equipment will be housed in a structural steel building with metal wall
cladding and a standing seam metal roof, complete with overhead cranes, electrical
rooms, heating, ventilation, and air conditioning (HVAC) system, storages, laboratory,
toilets, and offices. The building will contain a single roofline with a focus on avoiding
snow buildup. Additional details on the process plant can be found in Section 17.0.
A vehicle workshop and warehouse will be included as an extension to the process plant,
and will include a light vehicle repair bay, wash bay, welding bay, warehousing and
parking facilities for emergency vehicles. A two-story administration/admin area will be
located adjacent to the warehouse area to house offices, workstations, training room as
well as men’s and women’s dry facilities. Other support areas will also be include within
the main site building, including an assay laboratory, mechanical room and compressor
room as well as a first aid room.
18.3 PERMANENT CAMP
The permanent accommodation camp will be built with modular units to house up to 225
personnel at a time. The camp will initially accommodate part of the workforce during


the construction phase then largely support the underground mining crews during the
operations phase of the Project.
The underground mining operation is proposed to be executed in a 12-hour shift

schedule, with an 11-hour work day and 30 minute travel time (each way) to the
underground workings via the Granduc tunnel. With a 12-hour shift schedule, a daily
commute to and from the neighboring town of Stewart, BC would not be conducive to
good operations. Therefore, camp accommodations will be provided on site for the
underground crew. It is assumed the remaining plant personnel are able will commute to
and from Stewart.
The camp complex will consist of two-story dormitory, with standard “jack and jill” style
rooms containing a double bed and a semi-private bathroom. The camp’s core complex
will house the kitchen and dining complex, recreational facilities, fitness room, laundry
facilities and office facilities. Arctic corridors (or equivalent) will be utilized to connect the
camp complex to the main plant complex.
18.4 FUEL STORAGE AND DISTRIBUTION
Fuel for mobile equipment, including the underground mine fleet, and surface vehicles
and road maintenance equipment vehicle fleet, will be supplied from above-grade diesel
fuel and gasoline storage tanks located at the plant complex. Fuel will also be required
for back-up generators that will supply emergency power in case of any grid power
interruptions.
One 400 m3 diesel storage tank and one 35 m3 gasoline storage tank will provide
sufficient storage of at least 7 days of operation. The fuel storage system will be located
in a contained area to control fuel spills, and will include loading and dispensing
equipment.
A seven-day supply of propane will also be in included for heating of the process plant
and ancillary buildings.
18.5 WATER SUPPLY AND DISTRIBUTION
Supply of fresh water is assumed to be will be drawn from groundwater sources, via two
wells located within the Project site, one which will be operational and one standby. A
freshwater tank will be located at the camp complex and will be distributed by pumps for
potable water feed, gland seal water, reagents makeup, and for general use. Process
water requirements are primarily expected be met with reclaim water via the TSF, where
feasible, with freshwater used to supplement as required. A portion of the freshwater
tank will also be allocated for firewater use.
The feasibility of utilizing groundwater as a water supply source should be further

reviewed during future phases of the Project with respect to sustainability of yield, water
quality, as well as environmental and permitting considerations. A water supply trade-off


study may be considered between alternate surface water supply options and
groundwater aquifers.
Fresh water for potable water use will be treated via multimedia filtration and
disinfection. The potable treatment will be sized to treat 80 m3/d, based on a peak site
population of approximately 400 personnel. Treated water will be distributed in a piping
ring to serve all potable water users in the plant and camp complexes.
The plant and camp complexes will also be provided with a common fire protection
system which will consist of a freshwater tank, pumping system and a buried fire main.
The firewater pumping arrangement will typically consist of three pumps—one diesel
driven, one electric driven, and one electric jockey pump to maintain the pressure in the
system. In addition, all buildings will be equipped with hose cabinets and supplemented
with hand held fire extinguishers of two typesgeneral purpose extinguishers for inside
plant areas and dry type extinguishers for inside electrical and control rooms.
18.6 WASTE MANAGEMENT
Sewage generated at the camp complex and plant complex will be collected via an
underground sanitary sewer network to a common location where it will be treated by an
above-grade sewage treatment plant. The plant will be sized to treat an average flow rate
of 3 m3/h, based on a peak site population of 400. Treated sewage is expected to be
discharged to the environment with the opportunity to recover the effluent as makeup
water once the process plant comes online. Sludge generated as a by-product of the
treatment of sewage will be disposed off-site by a licensed contractor.
Domestic solid waste generated over the course of the Project is proposed to be
incinerated on site, as per typical mining operations in northern BC. Domestic waste
generated during the operations phase is approximated to be 0.8 t/d based on an
expected workforce of 400.
Hazardous and non-hazardous industrial solid wastes such as tires, waste lumber, scrap
metals, plastics, and electrical wastes will be collected and sorted prior to off-site
removal by a qualified local contractor for recycling and/or disposed at an appropriate
facility. Hazardous liquid wastes such as laboratory chemical wastes and paints will be
collected and temporarily stored on site, with final disposal off site by a licensed
contractor. No long-term, on-site waste storage areas have been included as part of the
Project.
18.7 ROADS, SHIPPING AND LOGISTICS
18.7.1 OFF‐SITE ACCESS ROAD
then by the existing Granduc Road which terminates at the Project site (Figure 18.4). The
Granduc Road is comprised of segments within Canada (BC) and the US (Alaska) and


generally described as steep and winding. From the Canada/US border, east of Hyder,
the Granduc Road follows an 18 km route through Alaska to the Canada/US border.
From this location, the remaining 29 km is within BC and continues north to the Project
site.
Figure 18.4 Mine Access Route

130’00 W
Mt.
Jancowski
Be
N
Granduc ll -
Glacier Irv
Mine 37 in
g
Summit Ri
ve
Lake r
Mt.
Salmon Glacier Patullo Meziadin
Junction
37a
Bear
Glacier
Strohn
66’00N
Premier Lake
Mine Mt. 37
Meziadin
Mt. Strohn Lake
Disraeli
Na
ss
Stewart
Riv
er
Hyder Cambria
Icefield
Kilometres
KA
0 10 20 30
M H
A
AS
LU IS
BI
AL
T
CO RI
B
Cities, Towns
Roads / Highways
Granduc Road
International boundary
This route will be used during all phases of Project development to transport personnel,
equipment, and supplies between Stewart and the Project site. To enable safe, efficient,
year-round access to the Project site, sections of the route will require upgrade.
Within the US, a 5 km segment of the Granduc Road from Hyder to Fish Creek is a two
lane gravel road. The Alaska Department of Transportation and Public Facilities
(DOT&PF) are currently in the process of improving this segment of road; plans include
paving in 2013. North of Fish Creek the Granduc Road narrows (generally 5 to 8 m
running surface width) for most of its length to the border. Some sections along this
segment have pullouts and the road surface width has been widened to allow for two-way
traffic. Alaska DOT&PF have advised Castle that the road has not been upgraded for
heavy haul vehicles and that load limits will likely apply when using the US segment of
the Granduc Road. The BC segment of the Granduc Road is owned and administered by
the District of Stewart and is expected to require upgrades. Possible work may to include
improvements in horizontal and vertical alignment to maintain desired road gradients


and widening of some sections. Safety in design will also be taken into consideration
with locations for pull-outs, as required, adequate sight distances and protection barriers.
A cost allowance for the work has been included as part of this study, with specific design
criteria to be further developed at the next phase of the Project, upon availability of
additional data, including field reconnaissance, collection, and review of geotechnical
information and GPS survey.
Allowances have been also included for the control of geohazards (e.g. snow avalanches,
landslides, etc.) and a snow clearing program. An assessment of the risks and
mitigations with respect to geohazards will be required in the next phase of the Project.
18.7.2 ON‐SITE ACCESS ROADS
On-site access roads will be required to provide access to and around the plant complex,
camp complex, TSF, waste rock storage facility (WRSF) and other ancillary site
infrastructure. All on-site roads will be gravel surfaced, ranging from 5 m in width for
services roads, up to 12 m in width for the main access roads. The main and secondary
roads will be limited to maximum allowable grade of 7%. Drainage ditches will be
included to facilitate transfer of storm water runoff to the storm water collection network.
Approximately 1.6 km of main on-site, secondary, and service roadways will be required
to interconnect the site facilities.
18.7.3 SHIPPING AND LOGISTICS
The logistical initiatives required for the construction and operations phases of the
Project include:
 facilitating the delivery of fuel, other operating supplies and consumables,

maintenance items, repair and replacement parts, freight, and personnel
 supporting the execution and delivery of contracted services.
The following modes of transport are available for the Project:
 road
 rail
 barge
 port facilities
 air freight.
ROAD
There is a number of regional, long-haul and heavy-haul trucking companies that are
capable of providing service for the Project from all shipping points in North America and
Mexico. Access via road would be through the town of Stewart which is located at the


end of Highway 37A. Highway 37A connects to BC Highway 37 (Stewart-Cassiar
Highway).
RAIL
Rail transport could be viable, particularly for cargo that would be sourced from locations
in the eastern regions of North America or Mexico. Rail service is available by CN Rail to
either Kitwanga or Smithers. Cargo would be unloaded for subsequent movement via
truck to site. CN Rail crosses the continent east-west and north-south, serving ports on
the Atlantic, Pacific and Gulf coasts with links to all three North American Free Trade
Agreement (NAFTA) nations. CN Rail operates in eight Canadian Provinces and 16 US
States with connections to numerous points in North America.
BARGE
Barge service is available from either Port Metro Vancouver or Prince Rupert to the Port
of Stewart. In addition to the current Stewart Bulk Terminal operation, there are plans
underway to construct and operate a new multi-purpose facility called Stewart World Port
which will include a roll-on/roll-off cargo ramp capable of accommodating 6,000 t barges
and 200 t loads. The advantages of this mode include the opportunity to consolidate and
ship large amounts of cargo as well as the potential for moving oversized or heavy
components in order to minimize highway travel and bypass any limitations due to
bridges, tunnels, or over-passes.
PORT FACILITIES
Cargo arriving from Asia could be directed to terminals in either Port Metro Vancouver or
Prince Rupert. Consideration will be given to whether the cargo arrives in containers or in
break-bulk form.
AIR FREIGHT
Chartered air freight service is available to the town of Stewart which has a 3,900 ft
paved airstrip capable of handling prop-driven aircraft.
For the purposes of this study, all logistical requirements to support the operations are
assumed to be met by road transport via Stewart and surrounding areas.
Transport of copper and magnetite concentrate will be by truck via the Granduc Road to
SBT for shipment to destination markets in Asia. SBT is a privately owned and operated
marine load out facility located in Stewart, BC. The facility is currently used for storage
and load out of concentrates from Huckleberry Mine in BC, and Wolverine Mine in Yukon.
An aerial photograph of the terminal and site is provided in Figure 18.5.


Figure 18.5 SBT Site
Shipping Berth
Storage Shed No. 2
Site Office
Ship Loader
ve
5A
Storage Shed No. 1
Metres
0 50 100 150
Both of the terminal’s on-site sheds are equipped with elevated truck dump platforms
and approach ramps. The elevated platforms provide a physical separation between the
trucks and the storage area. The platforms in both sheds are designed to handle side-
dump trailers. Storage Shed No. 1 is dedicated to Yukon Zinc and under contract to
2015, while Storage Shed No. 2 is dedicated to Imperial Metals which has extended their
mine’s operation until 2021.
SBT is planning a major expansion to the site, storage capacity, and ship loading system
with the intention of increasing throughput of the terminal due to the many active
projects located in the vicinity of Stewart. Currently, SBT has an agreement with Imperial
Metals to build a storage shed for the Red Chris project and have signed an agreement
with Copper Fox Metals Inc. to potentially handle concentrates from the Schaft Creek
project.
A potential alternative for the Project is Stewart World Porta new business venture
intent on constructing and operating a multipurpose port facility in the town of Stewart,
BC. The Port will support shipments of mineral concentrates, containers, break-bulk,
barge and roll-on/roll-off cargo. The main aspects of the Port will include a traveling ship
loader with a capacity to load 1,400 t/h, two bulk concentrate sheds and two ship berths


that would be capable of accommodating both Panamax and Handymax vessels. Other
features will include a ramp capable of accommodating 6,000 t barges and 200 t loads
and a bypass road to keep truck traffic away from the town site.
For the purposes of this study, terminal handling rates were based on utilizing SBT,
details of which are outlined in Section 19.0, including receiving and unloading of trucks,
storage and loading to ocean vessels. A capital cost allowance has been included for the
expansion at SBT to accommodate the storage required.
18.8 POWER SUPPLY AND DISTRIBUTION
18.8.1 OFF‐SITE POWER SUPPLY
The production level load for the Project, at a mill throughput of 8,500 t/d, is estimated
to be approximately 25 MW for the base case project. A negligible change in electrical
load is expected between the base case and the alternative case.
Electrical power to the Project is proposed to be provided via an interconnection to the

planned LLHP powerhouse under development by Regional Power Corporation. A 138 kV
tie-in is proposed at the Long Lake substation, with the power transmission line route
largely following the existing Granduc Road, allowing for easier construction and
maintenance access, running north to the Project site (Figure 18.2). The proposed
138 kV power transmission line corridor is approximated to be 23 km in length, with
allowance for isolated protection for snow avalanches. Sections of the transmission
route will be refined in future phases of the Project pending the availability of addition
data including a light detection and ranging (LiDAR) survey and a geohazard analysis.
The feasibility of the transmission line intertie at the Long Lake substation will also be
subject to the successful completion of the LLHP powerhouse, and transition into
operations. Alternate power options may be evaluated in future phases of the Project
should the LLHP powerhouse option become non-viable.
18.8.2 ON‐SITE POWER DISTRIBUTION
The incoming 138 kV overhead transmission line will tie into the main substation at the
plant complex, which will contain circuit breakers, disconnects, and step down
transformers. Site power will be distributed at 25 kV to the underground mining
operations, plant complex, camp complex, and TSF. In-plant emergency diesel
generators will be located near areas with critical loads.
18.9 SURFACE WATER MANAGEMENT
Management of surface water, within the boundaries of the Project’s site surface
infrastructure footprint, is based around current industry best management practices to:
 control surface water runoff in order to prevent pollution of clean or non-

impacted water resources


 control erosion of the site to limit sediment runoff that may impact receiving
waters.
Surface runoff that will come in contact with the main plant complex, camp complex, and
the other plant site facilities, such as the non-PAG WRSF, will be collected via a series of
ditches and channels to a sedimentation pond. The purpose of the sedimentation pond
is to provide sufficient detention to reduce the total suspended solids (TSS)
concentration in the contact water prior to discharge to the environment.
It is assumed that runoff from the non-PAG WRSF and graded surfaces of the plant/camp
complex pose a low risk with respect to the potential for metal leaching and acidic runoff.
Therefore, the only contaminant of concern considered in the surface runoff requiring
treatment in the sedimentation pond is TSS, with the target objective as per the Metal
Mining Effluent Regulations (MMER), BC water quality guidelines and the Alaska state
water quality guidelines. Further investigation will be required to in future phases to
establish if additional levels of treatment may be required to meet regulatory limits.
As per typical best design practices, the collection ditches will be required to convey the
1-in-100 year, 24 hour storm event. Sedimentation ponds will be required to detain the
1-in-10 year, 24 hour storm event.
Where feasible, surface water runoff from undisturbed catchments within the plant
boundaries will be conveyed in diversion channels, to divert away as much
uncontaminated water as possible, and minimize surplus water volume in the water
management circuit. Diverted freshwater will be returned back to natural drainage
channels further downstream of the impact areas.
Due to an existing underground drainage divide, water from the existing underground
mine currently drains west to the North Leduc River via the 2475 drainage portal
(maximum flooding elevation) to the North Leduc River and Granduc Tunnel water
drainage reports to the upper Bowser River via the East Culvert. It is expected that during
operations a new water management system will be required for the underground mine
and the Granduc Tunnel. Dependent on maximum flooding elevation during operations,
it is possible that drainage from the underground mine will report to surface via the 2475
portal, other existing portal and/or by natural drainage pathways to the North Leduc
River. Tunnel water drainage will likely continue to be discharged via the East Culvert to
the upper Bowser River.
Additional details of the underground dewatering approach and water quality

management are described in Section 16.7.5.


19.0 MARKET STUDIES AND CONTRACTS
Castle commissioned CRUS to complete a market study (CRUS 2012; 2013) for both
copper and magnetite. The CRUS study specifically excluded copper, gold and silver price
forecasts. The following sections summarize the CRUS study, and provide Castle’s view
on price forecasts.
19.1 COPPER CONCENTRATE
19.1.1 SUPPLY – DEMAND BALANCE
CRUS forecasts that between 2012 and 2017, demand for refined copper will increase
4.5% per year, from 19.6 to 24.4 Mt. Over 60% of this increase will come from China;
strong growth is also forecast for India, Japan, and the Middle East. During this time
frame, growth in the mine supply of copper contained in is expected to average 5.1%,
from 16.5 to 21.1 Mt. However, existing operations are only expected to supply 30% of
the growth in output (to 18.4 Mt, for a growth rate of 2.2% per year). The remaining 70%
of growth (representing 2.7 Mt/a by 2017) is expected to come from new projects.
In the longer term, CRUS forecast that growth in demand will moderate to 2.4% per year,
resulting in demand of 29.3 Mt by 2025. This rate of demand will outstrip currently
identified projects, by an aggregate of 1.4 Mt (Figure 19.1).


Figure 19.1 Copper Supply Gap
Forecast Supply Gap of 1.4 Mt by 2025
25,000
22,500
20,000
17,500
15,000
Mt
12,500
10,000
7,500
5,000
2,500
0
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Years
Existing mines Firm projects Probable projects
Possible projects Prospects New exploration
Required Production
19.1.2 PRICE FORECASTS
Long-term price assumptions for copper, along with by-product silver and gold, have been
based on the three-year rolling average.
Figure 19.2 illustrates that the rolling three-year average price for copper as of December
31, 2012 was US$3.67/lb. For purposes of the financial evaluation of the Project, this
has been rounded down to $3.65/lb.


Figure 19.2 Rolling Three‐year Copper Price
$4.80
$4.60
$4.40
$4.20
$4.00
‐
$3.80
$3.60
$3.40
$3.20
$3.00
$2.80
Jan‐10 Apr‐10 Jul‐10 Oct‐10 Jan‐11 Apr‐11 Jul‐11 Oct‐11 Jan‐12 Apr‐12 Jul‐12 Oct‐12
Cu ‐ LME cash Average

Note: *Average between London Metal Exchange (LME) three-month buyers and sellers
The rolling three-year average prices for silver and gold as of December 31, 2012 were
as follows:
 silver = US$28.77/oz (actual) rounded to US$28/oz in the evaluation

 gold = US$1,486.20 (actual) rounded to US$1,480/oz in the evaluation.
19.1.3 TREATMENT AND REFINING CHARGES AND CONCENTRATE SHIPPING
Contractual terms for treatment and refining charges (TC/RCs) for 2012 were $63/t
concentrate and $0.063/lb copper. These are expected to increase by 5.7% per year in
the medium term as smelters compensate for declining concentrate grades. CRUS
forecasts that rates will reach $83/t concentrate and $0.083/lb copper (in real,
December 2012 terms) by 2017.
The financial evaluation of the Project assumes that TC/RCs will remain constant at
these rates in the longer term.
Copper concentrate from the Project is expected to have low levels of impurities. In
particular, arsenic levels are expected to be less than 0.02%, or more than an order of
magnitude lower than the limit generally set by smelters. Historically, the mine achieved
a recovery of copper to concentrate of approximately 95% for a concentrate grading 29%
copper and was paid for 96.5% of contained copper.


Castle investigated the impact of improving concentrator recovery by reducing the
concentrate grade (which in practice would entail eliminating the last stage of cleaning).
Test work results indicated that a 96% recovery could be achieved with a 25%
concentrate grade. However, CRUS advised that the payables for this concentrate would
drop slightly, to 96.0%. At current copper prices, it is more economic to continue
producing a higher-grade concentrate; CRUS 2013 assumed a 95% recovery and 27%
concentrate grade, with associated payables of 96.5%. This assumption should be re-
evaluated during the next stage of work if the forecasted copper price changes materially.
The grade of by-products in copper concentrate are expected to average approximately

200 g/t silver and 2 g/t gold. With these grades, CRUS expects to see a payability of
90% for both by-product metals, although other sources suggest a possible payability as
high as 92% may be possible. CRUS consequently assumped a 91% payability for the
purposes of this evaluation.
Refining costs are expected to be $0.35/oz for silver and $5.00/oz for gold.
Shipping cost of copper concentrate from BC to a possible market in North China is

estimated at $30.5/dmt.
19.2 MAGNETITE
19.2.1 STEEL INDUSTRY
The base case for the magnetite scenario assumes that all production from the Project
would be sold to a pelletizing operation in China.
CRUS (2013) reported that 2011 global production of crude steel was 1,490 Mt, which
required 1,730 Mt iron ore feed. Iron ore feed comes in three forms: fines (62% of the
total), lump (run-of-mine (ROM) mineralized material – 13% of the total) and pellets (25%
of the total).
Magnetite from the Project would be used for pellets. The bulk of pellets are produced at
various mine sites; the current (2011) market for imported pellet feed is 54 Mt. Of this,
74% is consumed by China while a further 13% went to Bahrain. The Netherlands,
Oman, Mexico, and Japan imported lower quantities.
Iron ore is currently priced based on a single benchmark, the Platts IODEX marker for
62% iron sinter fines, cost and freight (CFR) Qingdao, China. There is a premium for
certain types of mineralized material, such as iron mineralized material that has an iron
content above 62%, and for magnetite mineralogy (as it generates heat in the steel
making process). There are penalties for factors such as sulphur content above the
benchmark rate of 0.1%.
The current (Q4 2012) benchmark price of $122/t has been adjusted by the following
forecast premia and penalties/deductions:


 premium for 69% iron content = US$12/t
 premium for magnetite mineralogy = US$5/t
 penalty for sulphur content = US$9/t
 cost of transport from mine site to Stewart, BC (including port charges) = $24/t
 cost of ocean shipping = US$31/t.
The net impact of these premia and penalties/additional costs reduces the benchmark
by $47/t, to $75/t. This rate is further reduced by 7% for traders to place the product.
The final net-back rate is therefore US$70/t.
19.2.2 HEAVY MEDIA SEPARATION
CRUS investigated the potential sale of magnetite to customers who use it for heavy
media separation (HMS).
Magnetite is used for HMS by the coal, potash, and tin industries. The assessment of the
potential market for Granduc magnetite focused on the largest of these industries: coal
washing. Magnetite used in coal washing is finely ground (i.e. 80% of the total product
between 10 to 45 μm) and then mixed with water. ROM coal is then added to the
mixture, with low-density coal floating and the heavier waste materials sinking. The
magnetite concentrate is recovered using magnetic separators and recycled, with some
unavoidable losses.
CRUS surveyed North American coal producers. Mines representing 88% of total 2010
coal production (639 Mt of 726 Mt) were contacted. Of these, mines representing
523 Mt, or 72%, responded. This sample indicated that approximately 24% of coal was
produced using HMS and that the average consumption of magnetite was 0.9 kg/t coal.
Extrapolating these results to total North American production implies a current market of
157 kt magnetite. In the event that consumption at mines that did not respond varies
significantly from those that did, the annual market could range from 113 to 294 kt.
Due to the cost of transport, the market for Granduc magnetite would likely be restricted
to BC and Alberta in Canada, and the Powder River Basin (Wyoming and Montana) in the
US. Mines in this target market that responded to the survey currently consume 72 kt/a
magnetite and extrapolating results from these mines to the entire regional population of
mines could increase the current market to 130 kt/a. Castle considers this to be a
conservative estimate as key Canadian producers in BC are believed to be considering
expansion.
Limited information is available regarding product pricing. The CRUS survey obtained
delivered prices from four coal companies; these ranged from $250 to $368/t, including
transport. A logistics study conducted by Tetra Tech found the following costs for
transporting magnetite by a combination of road and rail:


 to Tumbler Ridge, BC (600 km) = $49.00/t
 to Elk Valley, BC (1,300 km) = $108.69/t.
The unit rate for both options approximates 0.08/t multiplied by the number of
kilometres that the magnetite is transported. Table 19.1 summarizes how this unit rate
has been applied to the potential market to arrive at an average cost of transporting
magnetite to customers.
Table 19.1 Estimated HMS Logistics Costs
Consumtion Distance
Mine Owner Location (t) (km) Status*
Grande Cache Grande Cashe Alberta 4,200 800 Confirmed
Fording River Teck BC 50,000 1,300 Confirmed
Eagle Butte Alpha Natural Resources Wyoming 13,000 2,200 Confirmed
Bull Mountains Signal Peak Montana 4,400 1,900 Possible
Prairie Ops Sherritt Saskatechewan 23,071 1,600 Possible
Mountain Ops Sherritt Alberta 2,837 900 Possible
Bucksin White Energy Wyoming 15,534 2,200 Possible
Wyodak Wyodak Mine Wyoming 3,608 2,200 Possible
Absaloka Westmoreland Coal Montana 3,327 2,000 Possible
Kemmerer Westmoreland Coal Wyoming 2,896 2,200 Possible
Black Butte Black Butte Coal Wyoming 1,903 2,200 Possible
Jim Bridger Pacific International Wyoming 1,213 2,200 Possible
Perry Creek Walter Energy BC 1,006 600 Possible
Trend Peace River Coal BC 778 600 Possible
Total/Average - - 127,770 1,627 -
Unit Rate for Transportation ($/t x km) 0.084
Average Transport Cost ($/t) 136
Note: *Confirmed mines responded to CRUS survey, possible mines have been extrapolated
CRUS made the following assumptions in its estimation of the potential contribution from
HMS:
 Maximum HMS sales by Granduc = 100 kt/a. (Under this scenario, magnetite
would be preferentially sold to the HMS industry and only excess production
(beyond 100 kt/a) would be sold to the steel industry.
 Average price received = $250/t magnetite (lowest cost data point from survey).
 Average logistics cost = $136/t.
The net revenue per tonne is therefore $114/t of magnetite.


20.0 ENVIRONMENTAL STUDIES, PERMITTING
AND SOCIAL OR COMMUNITY IMPACT
20.1 ENVIRONMENTAL STUDIES
To Tetra Tech’s knowledge, no historical environmental studies have been completed.
20.2 WATER MONITORING
20.2.1 WATERSHEDS
The Project has existing and proposed components that are within and/or draining to the
Leduc, Salmon and Bowser River watersheds. The Leduc and Salmon Rivers are
transboundary with Alaska, and the Bowser River is a tributary of the Nass River. A brief
summary of each watershed is provided below.
 The Leduc River is comprised of the North and South Leduc Rivers and crosses
the Canada/US border approximately 6 km downstream of the historical
underground mine. Catchment size for the North and South Leduc Rivers are
38 and 23 km2, respectively. The system is highly dynamic and exhibits a wide
range of seasonal flows.
 The Bowser River watershed is located entirely within BC and flows north from
Berendon Lake. The drainage area reporting to the Bowser River at Berendon
Lake is approximately 58 m2. There are four small lakes located at glacier toes
along the Bowser River between its headwaters and Bowser Lake, and more
than 10 glacially headed tributaries that contribute to mainstem flows.
 The Salmon Glacier and Summit Lake (self-draining ice-dammed lake) are
recognized as the origins of the Salmon River. The Salmon River crosses the
Canada/US border approximately 5 km downstream of the south toe of the
Salmon Glacier, and reaches its tidal confluence further downstream near
Hyder, Alaska.
Monitoring of discharges from the underground mine via the 2475 portal to the Leduc
River and the tide tunnel via the East Culvert to the Bowser River are also components of
the water monitoring program.
20.2.2 SURFACE WATER AND SEDIMENT QUALITY
Surface water monitoring studies have been carried out in the Leduc, Salmon and
Bowser River watersheds since 2011 to assess spatial and temporal variability in water


and sediment chemistry at locations up-gradient (control) and down-gradient (exposure)
of existing and future mine-related discharges. The data collected from this program will
be used for mine and water management facility design and planning, as well as provide
the basis for effects assessment and establishment of long-term monitoring program for
the Project.
20.2.3 HYDROLOGY
Twenty-three active and inactive hydrometric stations have been identified within an
approximate 100 km radius of the Project. Project-specific baseline studies began in
2011 and the program currently includes nine comprehensive monitoring stations and
three spot flow sites. Stations were established to monitoring existing underground mine
discharge, as well as control and receiving sites relative to existing and proposed project
components.
A hydrologic assessment of seasonal and inter-annual variability in flows, through

regional watershed analysis and site-specific monitoring, will be completed in close
association with the meteorology program. The climate and hydrology data will be used
to develop the site water balance for the Project.
20.2.4 HYDROGEOLOGY AND GROUNDWATER QUALITY
There is no existing hydrogeologic data for the Project. Groundwater conditions
associated with project infrastructure will be assessed as they relate to physical and
chemical characteristics. This assessment will rely on data from site-specific
investigations and underground monitoring. The hydrogeology program will coincide with
geotechnical site investigations associated with facility design and planning.
20.2.5 TAILINGS AND WATER MANAGEMENT
The tailings produced from the mineral process will be transferred by pipeline and
deposited in the TSF.
The TSF for the Project is described in Section 18.0, including the design basis and TSF
design in Section 18.1.3 and 18.1.4, respectively.
The conceptual design indicates that tailings from the plant complex will be pumped to
the TSF via pipeline as slurry with most tailings placed sub-aqueously within the
impoundment. Sub-aerial placement of NPAG as beaches upstream of dam faces may
be part of the facility closure design.
A reclaim barge will be located within the TSF impoundment basin, and a reclaim pipeline
will be used to transport make-up water from the TSF to the plant complex. Alternately,
other sources of water for process plant start-up, which may include groundwater or local
surface water sources will be investigated.
Options to divert freshwater contact and non-contact water flows associated with the
proposed TSF are under evaluation. Options may be limited due to climatic and terrain


factors. Further assessment will be completed and presented in subsequent pre-
feasibility level studies.
20.2.6 WASTE MANAGEMENT
WASTE ROCK
It is estimated that approximately 5.198 Mt of waste rock will be produced based on the
current mine plan. Waste rock produced from underground mining will have various
uses. It will: a) remain underground; b) be disposed in the WSRF (NPAG only); c) be used
for construction purposes where geochemically and physically suitable; and/or d) be
potentially within the TSF (under evaluation). Of the waste rock produced, it is expected
that up to a maximum of 2.1 Mt will require disposal at surface.
Waste rock will be handled in accordance with the ML/ARD Environmental Management
Plan (EMP) that will be developed for the Project based on environmental geochemistry
and water quality prediction and assessment work. Depending on the geochemistry
assessment work and the ML/ARD EMP, it is expected that most of the waste rock will be
used as backfill for the blasthole open stoping method.
HAZARDOUS WASTE MANAGEMENT

Hazardous wastes will be removed from site and disposed of in an approved facility or by
other means in accordance with applicable legislation.
Soils contaminated with hydrocarbons will be excavated and treated at an on-site land
farm. Once treated, the soils will be disposed in a manner approved under applicable
provincial legislation.
NON-HAZARDOUS WASTE MANAGEMENT

Unsalvageable non-hazardous materials will be disposed of in an approved manner,
which may include underground disposal or disposal at an approved facility. Concrete
foundations from building structures will remain in place, and be buried to the extent
feasible with stockpiled or salvaged soils or other geochemically suitable surficial
materials. Because the pre-development area primarily comprises exposed bedrock or is
covered with waste rock from historical mining operations, available undisturbed soils are
limited in proximity to the plant complex.
20.3 AIR EMISSIONS CONTROL
The Project is located in a remote area of BC; most project components are located more
than 25 km from the nearest human habitation (i.e., Stewart, BC and Hyder, Alaska). The
only known air emissions in the Project vicinity are fugitive dust from vehicles using
Granduc Road, in the summertime when the road is dry. Industrial activities in the
Stewart and Hyder area are primarily limited to ship loading, a quarry, and sand and
gravel operations; there are no existing heavy industrial sources of air emissions.


Key air emission sources and activities for the Project will include vehicle and equipment
use for transportation and excavation, and handling, loading and stockpiling activities at
the plant complex. These activities will result in fugitive dust and combustion emissions
both at the mine site and along the gravel section of the Granduc Road. Other air
emission sources and activities will include the incinerator for the camp, the use of back-
up power generators if/when needed, emissions, haulage, and waste rock deposition.
Air emissions will occur during the construction, operation, and closure phases of the
Project. Much of the air emissions will occur underground, and surface fugitive dust are
expected to be significantly mitigated by snow cover through much of the year and the
high-precipitation environment.
Air emissions from Project activities will include particulate matter (PM), nitrogen oxides
(NOx), sulphur oxides (SOx), and greenhouse gases (i.e. nitrogen dioxide and carbon
dioxide). There is the potential for low levels of volatile organic compounds (VOCs) from
incomplete combustion and trace elements associated with PM and diesel constituents.
20.4 NOISE
There are no existing industrial or anthropogenic sources of noise in the proximity to the
Project beyond seasonal vehicular use and noise associated with construction of the
Long Lake Hydro Project. Most noise sources associated with the mine site will be
located within the underground mine, Granduc Tunnel, or will be fully enclosed within the
plant complex.
20.5 PERMITTING
The Project is subject to review under the BCEAA and the CEAA 2012. The review
process is likely to be co-led by the BC EAO and the Canadian Environmental Assessment
Agency. If the Project is approved, an EAC and Federal Ministerial Decision on the
significance of the Project, in addition to determination of enforceable conditions for
mitigation and follow-up, will be required to proceed with permitting.
Following environmental approval, various authorizations, licenses and permits will be

required from provincial and federal government agencies. A preliminary list of provincial
and federal government requirements are provided in Table 20.1 and Table 20.2,
respectively.


Table 20.1 Preliminary List of BC Government Authorizations, Licenses and/or Permits
Authorization, License or Permit Legislation Agency
Site Investigations (Pre‐Application Stage)
Work Permit BC Land Act, RSBC 1996, c.245 BC MFLNRO
Notice of Work BC Mines Act, RSBC 1996, c. 293 BC MEM
Inspection Permit BC Heritage Conservation Act, RSBC 1996, BC MFLNRO
c.187
Investigation Permit BC Heritage Conservation Act, RSBC 1996, c. BC MFLNRO
187
Fish Collection Permit BC Wildlife Act, RSBC 1996, c.488 BC MFLNRO
Major Mine Development
Environmental Assessment Certificate BC Environmental Assessment Act, SBC BC EAO
2002, c.43
Permit Approving Mine Plan and BC Mines Act, RSBC 1996, c.293, s.10 BC MEM
Reclamation Program
Mining Lease BC Mineral Tenure Act, RSBC 1996, c.292 BC MEM
License of Occupation BC Land Act, RSBC 1996, c.245 BC MFLNRO
Effluent Discharge Permit BC Environmental Management Act, SBC BC MOE
2003, c.53
Air Discharge Permit BC Environmental Management Act, SBC BC MOE
2003, c. 53
Water License BC Water Act, RSBC 1996, c.483 BC MFLNRO
Occupant License to Cut BC Forest Act, RSBC 1996, c.157 BC MFLNRO
Explosives Storage and Use Permit (for BC Mines Act, RSBC 1996, c.293 BC MEM
the purposes of mining)
Ministers Certificate BC Railway Act, RSBC 1996, c.395 BC MTI
Safety Management System document BC Railway Safety Act, RSBC 2004, c.8 BC MTI
approval
Railway Operating Permit BC Railway Safety Act, RSBC 2004, c.8 BC MTI
Camp Operations Permit BC Health Act, RSBC 1996, c.179 BC Ministry of Health
Notes: BC MFLNRO – BC Ministry of Forests, Lands, and Natural Resource Operations
BC MOE – BC Ministry of the Environment
BC MTI – BC Ministry of Transportation
A preliminary list of federal authorizations, licenses or permits that may be required for
the Project is provided in Table 20.2.


Table 20.2 Preliminary List of Federal Government Authorizations, Licenses and/or
Permits
Authorization, License or Permit Legislation Agency
Site Investigations (Pre‐Application Stage)
Permit for Scientific License Fisheries Act, RSC 1985, c.F-14 DFO
Major Mine Development
Ministerial Decision Canadian Environmental Assessment Act, SC Canadian Environmental
2012, c.19, s.52 Assessment Agency
Compliance and Reporting MMER, SOR/ 2002-222; Fisheries Act, RSC DFO
1985, c.F-14)
Explosives User Magazine License Explosives Act, RSC 1985, c.E-19 NRCan
(Type U)
Transportation of Dangerous Goods Transportation of Dangerous Goods Regulations Transport Canada
Permit (including amendments, SOR/2012-245;
Transportation of Dangerous Goods Act, SC
1992, c.34
License for Radio Frequencies Radio Communications Act, RSC 1985, c.R- 2 Industry Canada
Requirements for authorizations or approvals, if any, under the Species At Risk Act, SC
2002, c.29; Migratory Birds Convention Act, SC 1994, c. 22; and International River
Improvements Act, RSC 1985, c.I‐20 will be determined in consultation with Environment
Canada. It is not expected that authorizations under Navigable Waters Protection Act,
RSC 1985, c.N‐22, or Section 35 of the Fisheries Act, RSC 1985, c.F‐14 will be required.
An amendment to Schedule 2 of the MMER, SOR/2002‐222, is not expected given the
location of the proposed TSF in the northern portion of Summit Basin. Health Canada
may have potential interest in the Project related to air quality and noise, as well as
country foods, potable water, and sewage.
20.6 MINE CLOSURE
A reclamation plan will be developed for the Project. At minimum, the reclamation plan
will include the applicable items identified in the published guidance “Application
Requirements for a Permit Approving the Mine Plan and Reclamation Program Pursuant
to the Mines Act (R.S.B.C. 1996 C.293, March 1998)” (BC MEM, 1998) or as otherwise
directed by BC MEM. The reclamation plan will also consider Nisga’a Nation, First Nation,
and stakeholder priorities.
Based on the current Project design, the key reclamation units that will likely be used for
the development of the reclamation plan are:
 the underground mine and Granduc Tunnel

 the plant complex and surface ancillary infrastructure
 Upper Leduc River mine-related infrastructure
 the TSF and associated linear infrastructure


 the transmission line intertie
 Granduc Road.
Preliminary concepts for each of these components are provided in the following
subsections, which concludes with a description of post-closure monitoring.
20.6.1 UNDERGROUND MINE AND GRANDUC TUNNEL
Closure of the mine and the Granduc Tunnel will be implemented in accordance with
legislative requirements, and will be consistent with the approved closure plan for the
Project. Key activities during decommissioning and closure will involve:
 removal of equipment and materials

 closure of the mine access portals (except for those required for drainage and
post-closure monitoring)
 closure of the Granduc Tunnel east portal
 discontinuation of mine dewatering, to allow for underground mine flooding.
20.6.2 PLANT COMPLEX AND ANCILLARY INFRASTRUCTURE
The plant complex (e.g. process plant, workshop, maintenance shop, warehouse,
administration offices, mine dry, and assay lab) and ancillary surface infrastructure
(crushed ore stockpiles, concentrate storage, camp complex, fuel storage, re-fuelling
station, road maintenance yard) will be dismantled or demolished at closure. Non-
hazardous salvageable materials will be removed from site; sold, donated, or disposed of
in accordance with applicable legislation. Hazardous wastes will be removed from site
and disposed of in an approved facility or by other means in accordance with applicable
legislation.
Any soils contaminated with hydrocarbons will be excavated and treated at an on-site
land farm. Once treated, the soils will be disposed of in a manner approved under
applicable legislation.
On completion of decommissioning of the Project site, disturbed areas will be

recontoured and reclaimed in accordance with reclamation plan.
20.6.3 UPPER LEDUC RIVER VALLEY INFRASTRUCTURE
The WRSF in the upper Leduc River valley will be recontoured, covered with stockpiled
soils/sub-soils, and re-vegetated with native plant species. Reclamation planning for this
facility will target establishment of post-mine vegetation consistent with pre-development
vegetation cover. The associated haul roads will be de-compacted, recontoured, and
reclaimed in a similar manner to the WRSF.


20.6.4 TAILINGS STORAGE FACILITY
The post-closure objective for the TSF will be to meet effluent quality requirements, and
to prevent exceedances of water quality objectives in receiving streams as a result of
water release through surface discharge and seepage. Best management practices will
be implemented to mitigate ARD and minimize the potential for ML. Current concepts for
the final configuration and reclamation of the TSF include:
 exposed sub-aerial NPAG tailings beaches will be re-vegetated to the extent

feasible
 PAG tailings will be stored under permanently saturated conditions, likely with a
water cover over most of the tailings impoundment area
 rock covered dam(s) with discharge via a permanent spillway for geotechnical
stability and long-term maintenance of saturated conditions.
The tailings and reclaim pipelines, and associated water management structures, will be
removed at closure. Where possible, materials will be salvaged and recycled, sold, or
donated. Materials that cannot be recycled or reused will be disposed of in an approved
manner.
The TSF power line will be dismantled, and the structures and materials, where feasible,
removed for reuse, recycling or appropriate disposal. The access/maintenance road will
be de-compacted, recontoured, and reclaimed.
20.6.5 TRANSMISSION LINE INTERTIE
The transmission line intertie with the Long Lake Hydro Project may be shared by multiple
users, and accordingly may become the responsibility of another user after the Granduc
Project closes. If Castle is the only user, the transmission line intertie will likely be
decommissioned and removed at closure; the power line will be dismantled, and the
structures and materials removed. Where feasible, materials will be salvaged and
recycled, sold or donated for reuse. Materials that cannot be recycled or reused will be
disposed of in an approved manner.
20.6.6 GRANDUC ROAD
Following decommissioning and closure, operational road use constraints on the Granduc
Road will likely no longer apply. Assuming that the road will remain under the jurisdiction
of the District of Stewart, the municipality will continue to oversee use of the road. It is
expected that road improvements made for the Project will remain in place to support
other road users, projects or companies operating in the region.
20.6.7 POST CLOSURE MONITORING
A conceptual program for post-closure monitoring will be included in the EAC/EIS
Application. The monitoring program will likely include:


 monitoring of surface effluent discharges or seepage from the underground
mine and tunnel, the TSF, and the WRSF
 environmental effects monitoring of the aquatic receiving environment, in
accordance with MMER and other regulatory requirements (i.e., fish and fish
habitat, benthos, toxicity, water quality, sediment quality)
 inspections of dams and water management structures by qualified persons as
required.
20.7 SOCIAL AND COMMUNITY REQUIREMENTS
20.7.1 ENGAGEMENT AND CONSULTATION
Castle has had a presence in the Stewart area since 2010, and has a seasonal field
office in the community that allows for easy access to information on ongoing exploration
activities and other aspects of the Project. Preliminary engagement activities with First
Nations, government agencies, local communities and stakeholders began in 2011 and
will continue as the Project advances.
Castle is aware that components of the Project overlap with the Nass Area of the Nisga’a
Final Agreement, and the Project is within the asserted traditional territory of Skii km Lax
Ha. Engagement activities were initiated in early 2011 with both Nisga’a Nation and Skii
km Lax Ha and have focused on early stages of the Project and the environmental
assessment process. Castle will continue to engage and consult with First Nations to
develop long-term relationships built on mutual trust, respect and understanding.
Castle has had ongoing discussions with BC Government since 2010 primarily related to
the Project’s exploration program, requirements for environmental assessment under
BCEAA, input into technical aspects of environmental baseline studies, updates on the
Project, and tenure for the Project. These discussions will continue as the Project
advances.
Preliminary discussion with Government of Canada agencies on the Project was initiated
in 2011. Meetings and communications have continued with Canadian Environmental
Assessment Agency, primarily related to updates on the Project, the federal review
process, reviewability of Project and requirements under CEAA 2012. Consultation with
other federal agencies will be expanded and ongoing.
USA and Alaska state agencies were originally contacted in 2011 and provided with an
introduction to the Project and an overview of planned baseline studies for that year. In
2012, Castle met with Alaska state agencies to discuss key aspects of the project relative
to their interests and engagement in the environmental assessment process.
Consultation with USA/Alaska agencies will be expanded following entry into the
environmental assessment process.
Preliminary consultation with various project stakeholders, primarily related to project

infrastructure requirements, has been initiated. Consultation with the broader


stakeholder groups will be expanded following formal entry into the environmental
assessment process.
20.7.2 HERITAGE RESOURCES
No archaeological or heritage site investigations have been undertaken for the Project.
An archaeological overview assessment (AOA) and archaeological impact assessment
(AIA) will likely be required to identify potential archaeological or heritage sites within the
Project area, and if identified, to assess project-related effects on archaeological or
heritage sites.
20.7.3 SOCIAL, ECONOMIC, AND HEALTH ENVIRONMENTS
The Project has the potential to affect social, economic, cultural, and health
environments for local and regional communities. Baseline data collection and an
assessment of project-related effects will be completed, in addition to identification of
potential avoidance or mitigation measures related to the socio-economic environment.
Consultation will be undertaken with potentially affected communities, as relevant.


21.0 CAPITAL AND OPERATING COST
ESTIMATES
21.1 SUMMARY
Tetra Tech developed a capital cost estimate and operating cost estimate for the Project,
based on the findings of this study. All dollar figures presented in the capital and
operating cost estimates are stated in Canadian dollars unless otherwise noted.
The capital cost estimate for the base case scenario that includes both copper and
magnetite concentrate production is expected to be $499 million. The capital cost
estimate for the alternative case scenario that includes only copper production is
expected to be $490 million.
The operating cost is estimated to be $39.78/t milled for base case and $38.89/t milled
for the alternate case. The capital and operating costs have been prepared to be within
an accuracy range of ±35%.
21.2 CAPITAL COST ESTIMATE
21.2.1 SUMMARY OF CAPITAL COSTS
The capital cost estimate is comprised of initial capital which are costs incurred before
production begins. The capital costs include direct, indirect and owner’s costs. Closure
costs and working capital costs have been excluded from the capital cost estimate and
are included in the financial analysis provided in Section 22.0.
The total initial capital cost for the design, construction, and installation and
commissioning for all facilities and equipment is $499 million for the base case. The
base case assumes that the Project will produce copper concentrate (with gold and silver
credit) and metallurgical magnetite.
In addition to the base case, Tetra Tech evaluated an alternate case that assumed no
production of magnetite, and that the Project will produce copper concentrate only (with
gold and silver credit). The total estimated pre-production cost for the alternative case is
$490 million. A closure bond is estimated to be $20 million for each scenario, to be paid
over a five year period beginning in the year of start-up. This estimate is not included in
the capital cost summary provided below.
A summary of the initial capital cost for the base and alternative cases is provided in
Table 21.1. The sustaining capital cost summary is shown in Table 21.2.

Table 21.1 Initial Capital Cost Summary
Initial Capital ($ million)
WBS Base Case Alternative
1 Mining 168.7 168.7
3 TSF 27.8 27.8
Total Initial Capital Cost 499.0 490.0
Note: WBS – work breakdown structure
Table 21.2 Sustaining Capital Cost Summary
Sustaining Capital ($ million)
WBS Base Case Alternative
1 Mining 179.9 179.9
3 TSF 33.1 33.2
Total Sustaining Capital Cost 241.2 241.3
21.2.2 ESTIMATE BASE DATE AND VALIDITY
This capital cost estimate was prepared with a base date of February 28, 2013 and does
not include any escalation beyond that date.

21.2.3 CAPITAL COST ORGANIZATION
The estimate consists of four main elements:
 direct costs
 indirect costs
 Owner’s costs
 contingencies.
21.2.4 DIRECT COSTS
The Project direct costs breakdown consists of the following major category descriptions:
 mining
 processing plant
 TSF
 infrastructure and services.
QUANTITY DEVELOPMENT
All quantities were derived from the site general arrangement drawing, process design
criteria, process flow diagrams, and equipment lists. No contingency has been built into
the estimate for quantities.
PRICING
Tetra Tech’s equipment cost estimates are based on in-house data or pricing from recent
similar projects. Unit costs for construction were derived from historical projects in the
same area and applied to estimate quantities where applicable.
21.2.5 INDIRECT COSTS
The Project indirect costs breakdown consists of the following major category
descriptions:
 engineering, procurement, construction and management (EPCM): based on

percentages of the direct costs (processing plant, TSF, Infrastructure and mining
equipment)
 temporary facilities equipment and services: based on estimate
 first fills: based on percentage of processing plant
 commissioning and initial spares: based on percentage of equipment
 freight: based on percentage of material and equipment required at site.

21.2.6 OWNER’S COSTS
The Owner’s costs breakdown consists of the following major category descriptions:
 construction management team

 staff start-up and commissioning
 approvals
 recruitment and training.
21.2.7 CONTINGENCIES
The overall contingency for the Project excludes scope changes, force majeure,
escalation and currency fluctuations. The estimate was based on a percentage of direct
capital (20% of fixed mining equipment, processing, TSF, infrastructure as well as 10% of
mobile equipment and manpower), and indirect and Owners costs (at 8% of each).
21.2.8 CAPITAL COSTS EXCLUSIONS
The following items were excluded from the estimate:
 working or deferred capital

 financing costs
 refundable taxes and duties
 land acquisition
 currency fluctuations
 lost time due to severe weather conditions
 lost time due to force majeure
 additional costs for accelerated or decelerated deliveries of equipment,
materials, or services resultant from a change in project schedule
 warehouse inventories, other than those supplied in initial fills
 any project sunk costs (studies, exploration programs, etc.)
 mine reclamation costs (will be sunk cost)
 escalation costs.
21.2.9 ESTIMATING METHODOLOGY
The following steps were followed to create this estimate:
 define a WBS

 research labour costs based on projects in the same region, and apply scaling
and factoring accordingly
 review pricing for select equipment and materials from similar projects
 factoring cost for commissioning, capital spares, and freight
 factoring costs for detail design, procurement and construction management
required to perform these services
 define currency exchange rate
 define an estimate base date.
21.2.10 RESPONSIBILITY
Tetra Tech was responsible for the cost estimates associated with process, layout and
general arrangement, plant infrastructure, underground mining, piping, process plant,
tailings, and environmental monitoring. Tetra Tech also assembled the overall estimate.
Castle provided supporting information for environmental permitting requirements and
closure costs.
21.2.11 CAPITAL COST BREAKDOWN
Capital costs at a Level 2 WBS are presented in Table 21.3 to Table 21.13 for the areas
of mining, processing, TSF, infrastructure, indirects, Owner’s, contingency, and closure for
the base case. Alternative case costs are shown where appropriate.
Table 21.3 Mining Capital Cost Breakdown ($ million)
WBS Level Pre-
2 No. Description production Sustaining Total
10 Underground Development
17.2 43.7 60.9
(Contractor and Company Direct + Manpower)
11 Underground Development
1.9 24.9 26.8
(Capital Development Parts and Material)
12 Mobile Equipment 29.2 100.4 129.5
13 Fixed Equipment and Infrastructure 50.6 10.9 61.5
14 Pre-production Mining Cost 69.8 - 69.8
Total Mining Capital Costs 168.7 179.9 348.6

Table 21.4 Processing Capital Cost Breakdown (Base Case) ($ million)
WBS Level Pre-
20 Grinding 13.6 - 13.6
21 Flotation 3.2 - 3.2
22 Thickening 1.5 - 1.5
23 Filtration 0.7 - 0.7
24 Other Equipment (Conveyors and Pumps) 2.2 - 2.2
25 Magnetite Plant (Base Case Only) 7.5 - 7.5
26 On-site Infrastructure 39.0 - 39.0
Total Processing (Base Case) Capital Costs 67.7 - 67.7
Table 21.5 Processing Capital Cost Breakdown (Alternate Case) ($ million)
WBS Level Pre-
20 Grinding 13.6 - 13.6
21 Flotation 3.2 - 3.2
22 Thickening 1.5 - 1.5
23 Filtration 0.7 - 0.7
24 Other Equipment (Conveyors and Pumps) 2.2 - 2.2
25 Magnetite Plant (Base Case Only) 0.0 - 0.0
26 On-site Infrastructure 39.0 - 39.0
Total Processing (Alternative Case) Capital Costs 60.2 - 60.2
Table 21.6 TSF Capital Cost Breakdown (Base Case) ($ million)
WBS Level Pre-
30 Embankment Construction 12.4 27.8 40.2
31 General Site Works 2.0 0.0 2.0
32 Tailings Pipe Works 6.5 3.6 10.1
33 Reclaim Pipe Words 5.8 1.1 6.9
34 Seepage Control 0.5 0.0 0.5
35 Instrumentation 0.6 0.6 1.2
Total TSF (Base Case) Capital Costs 27.8 33.1 60.9

Table 21.7 TSF Capital Cost Breakdown (Alternative Case) ($ million)
WBS Level Pre-
30 Embankment Construction 12.4 27.9 40.3
31 General Site Works 2.0 0.0 2.0
32 Tailings Pipe Works 6.5 3.6 10.1
33 Reclaim Pipe Words 5.8 1.1 6.9
34 Seepage Control 0.5 0.0 0.5
35 Instrumentation 0.6 0.6 1.2
Total TSF (Alternative Case) Capital Costs 27.8 33.2 61.0
Table 21.8 Infrastructure Capital Cost Breakdown ($ million)
WBS Level Pre-
40 Off-site Development 6.0 - 6.0
41 Site Development and Access 6.2 - 6.2
42 Buildings 18.2 - 18.2
43 Fuel Storage and Distribution 0.3 - 0.3
44 Power Supply and Distribution
32.2 - 32.2
(On- and Off-site)
45 Utilities and Services 7.8 - 7.8
Total Infrastructure Capital Costs 70.7 - 70.7
Table 21.9 Indirect Capital Cost Breakdown ($ million)
WBS Level Pre-
50 EPCM 29.0 - 29.0
51 Temporary Facilities, Equipment and Services 24.7 - 24.7
52 First Fills 0.2 - 0.2
53 Spares – Commissioning and Capital 16.0 - 16.0
54 Freight 8.0 - 8.0
Total Indirect Capital Costs 77.9 - 77.9

Table 21.10 Owner’s Capital Cost Breakdown ($ million)
WBS Level Pre-
60 Construction Management Team 1.3 - 1.3
61 Staff Start-up and Commissioning 10.0 - 10.0
62 Approvals 1.0 - 1.0
63 Recruiting/Training 4.0 - 4.0
Total Owner’s Capital Costs 16.3 - 16.3
Table 21.11 Contingency Capital Cost Breakdown (Base Case) ($ million)
WBS Level Pre-
70 Contingency (Approximately 20% of Direct
69.9 28.2 98.1
Capital, 8% of Indirect and Owner’s Capital)
Total Contingency (Base Case) Capital Costs 69.9 28.2 98.1
Table 21.12 Contingency Capital Cost Breakdown (Alternative Case) ($ million)
WBS Level Pre-
70 Contingency (Approximately 20% of Direct
68.4 28.2 96.6
Capital, 8% of Indirect and Owner’s Capital)
Total Contingency (Alternative Case) Capital Costs 68.4 28.2 96.6
Table 21.13 Closure Capital Cost Breakdown ($ million)
WBS Level Pre-
80 Environmental Closure Bond 4.0 16.0 20.0
81 Environmental Capital Works - 0.3 0.3
Total Closure Capital Costs 4.0 16.3 20.3
Note: Closure costs are shown here as reference only as they are considered in the financial model and
excluded from the capital cost total.
21.3 OPERATING COST ESTIMATE
The total LOM unit operating cost estimate for the base case is $39.78/t milled,
including mining, processing, G&A, TSF, and environmental monitoring. This is based on
an estimated 40,283 kt processed over the LOM. For the alternative case, the operating
costs are estimated at $38.89/t milled due to the exclusion of the magnetitie circuit.
Operating costs over the LOM are estimated at $1,635.4 million for the base case and at
$1,599.4 for the alternative case (excluding sensitivities). The base case and alternative
operating unit cost estimates are summarized in Table 21.14.

Table 21.14 Operating Cost Summary
Base Case Alternative Case
Unit Cost Unit Cost
Description ($/t milled) ($/t milled)
Mining 23.76 23.76
Processing (Copper Concentrate) 7.66 7.66
Processing (Magnetite Concentrate) 0.89 0.00
G&A 6.52 6.52
TSF 0.85 0.85
Environmental 0.10 0.10
Total Operating Cost 39.78 38.89
21.3.1 MINE OPERATING COSTS
Mine operating costs over the LOM (off-site and on-site) are estimated to be
$957.0 million. Pre-production operating costs are included in the mine capital cost
estimate are not included in this table. Table 21.15 outlines the mine operating costs.
Table 21.15 Mining Operating Costs
LOM
Operating Unit Cost
Cost ($/t
Description Inclusions ($000) milled)
Underground Development Company Direct Costs 82,197 2.04
Underground Development Equipment Operating Costs 58,211 1.45
Underground Development Manpower 81,466 2.02
Underground Production Mobile Equipment Operating Costs 173,727 4.31
Underground Production Manpower 81,466 2.02
Underground Production SLC – Materials and Consumables 18,092 0.45
Underground Production BHS – Materials and Consumables 12,913 0.32
Support Maintenance Labour 33,254 0.83
Support Staff Labour 104,352 2.59
Mobile Equipment Support Equipment Parts and Consumables 104,093 2.58
Mobile Equipment Truck Parts and Consumables 58,987 1.46
Mine Ventilation Power - Main Fans 10,007 0.25
Mine Ventilation Main Fans - Parts and Consumables 5,158 0.13
Mine Ventilation Auxiliary Fans - Power 8,425 0.21
Mine Ventilation Auxiliary Fans - Parts and Consumables 9,444 0.23
Mine Ventilation Heating Fuel 47,950 1.19
Conveyor and Crusher Materials and Consumables 6,711 0.17
Tide Tunnel Train Materials and Consumables 10,524 0.26
Dewatering Materials and Consumables 916 0.02
Process Water Materials and Consumables 986 0.02
table continues…

LOM
Operating Unit Cost
Cost ($/t
Description Inclusions ($000) milled)
Compressed Air Materials and Consumables 390 0.01
Fuel Stations Materials and Consumables 638 0.02
Latrines Materials and Consumables 156 0.00
Chutes, Grizzlies and Bins Materials and Consumables 1,446 0.04
Lunchroom and Refuge Materials and Consumables 462 0.01
Concrete/Shotcrete Plant Materials and Consumables 366 0.01
Electricity Materials and Consumables (No Ventilation) 8,811 0.22
Mine Backfill – Plant Maintenance Plant Maintenance 1,500 0.04
Mine Backfill – Plant Maintenance Binder 10,803 0.27
Mine Backfill – Plant Maintenance Aggregate 23,535 0.58
Total 956,986 23.76
The mine will be operated on two 11-hour shifts per day, 360 d/a, and will be shut down
5 d/a. The mine will operate 8,008 h/a.
Labourers will work on a 2-week-on, 2-week-off shift rotation; mine staff will work on a 4-
day-on, 3-day-off rotation. Table 21.16 lists the manpower for the underground mine
operation and maintenance during peak operations (i.e. Year 4).
Labour rates from other similar Tetra Tech projects in the area were used for the
purposes of the operating cost estimate. Tetra Tech’s rate includes all anticipated
overhead costs, such as health benefits, overtime, and training. The manpower schedule
is provided in Table 21.16.
Table 21.16 Mining Manpower Schedule
Headcount in
Position Peak Production
Manpower – Hourly
Development 35
Production 20
Support 32
Total Mining 87
Maintenance 24
Total Hourly per Shift 111
Total Hourly per Day 222
Manpower – Staff
Underground Mining
General Manager 1
Mine Superintendent 1
table continues…

Headcount in
Position Peak Production
Mine General Foreman 2
Front Line Supervision 9
Safety Supervisor/Training 1
Mine Trainer 1
Underground Maintenance
Maintenance Superintendent 1
Maintenance General Foreman 2
Front Line Supervision 3
Maintenance Planner 1
Engineering/Geology
Technical Superintendent 1
Senior Engineer 2
Ventilation/Project Engineer 1
Geotechnical Engineer 1
Mine Technologist/Surveyors 6
General Clerks 1
Chief Geologist 1
Senior Geologist 2
Geological Technicians 4
Total Staff 41
Total Underground Manpower (Peak) 263
Total Mining Operation Workforce 490
Manpower Staying in Stewart (Average) 41
Camp Requirements (Maximum) 242
21.3.2 PROCESSING OPERATING COSTS
PROCESSING PLANT – COPPER

Table 21.17 outlines the plant operating cost over the LOM for copper concentrate.
Table 21.18 outlines the plant labour costs annually.
Table 21.17 Processing Plant Operating Cost – Copper Concentrate (LOM)
LOM Cost Unit Cost
Description ($000) ($/t milled)
Labour 129,179 3.21
Reagents and Consumables 125,856 3.12
Power and Utilities 53,427 1.33
Total 308,462 7.66

Table 21.18 Processing Plant Manpower – Copper Concentrate (Annually)
Annual Cost Total Annual
per Person Cost
Position Workers/Day ($) ($000)
Hourly Personnel Requirements
Control Room Operators 4 121,143 485
Crusher Operators 4 111,048 444
Grinding Operators 4 111,048 444
Flotation Operators 4 111,048 444
Filter Operators 4 111,048 444
Assayers 4 111,048 444
Samplers 4 100,953 404
Labourers 16 100,953 1,615
Mechanics 8 121,143 969
Electricians 8 141,334 1,131
Subtotal 60 - 6,824
Salaried Personnel Requirements
Mill Superintendent 1 222,096 222
General Foreman 1 161,524 162
Maintenance Foreman 2 141,334 283
Senior Metallurgist 1 181,715 182
Metallurgist 2 161,524 323
Process Technician 2 121,143 242
Instrument Technician 3 141,334 424
Process Foreman 4 141,334 565
Subtotal 16 - 2,403
Total 76 - 9,227
PROCESSING PLANT – MAGNETITE

Table 21.19 outlines the plant operating cost over the LOM for magnetite concentrate.
Table 21.20 outlines the plant labour costs annually.
Table 21.19 Processing Plant Operating Cost – Magnetite Concentrate (LOM)
Cost Unit Cost
Labour 6,219 0.15
Reagents and Consumables 6,684 0.17
Power and Utilities 23,059 0.57
Total 35,962 0.89

Table 21.20 Processing Plant Manpower – Magnetite Concentrate (Annually)
Annual Cost Total Annual
per Person Cost
Position Workers/Day ($) ($)
Filter Operators 4 111,048 444,192
Total 4 - 444,192
21.3.3 G&A OPERATING COSTS
G&A costs represent costs incurred by the mine that are not directly associated with mine
production or processing. Employee roles that are included in the G&A costs include
management, financial, engineering, geology support, purchasing, health, safety and the
environment, and administration. The G&A costs over the LOM have been estimated at
$294.8 million according to the breakdown as shown in Table 21.21.
Table 21.21 G&A Operating Costs
Typical
Annual Cost Total Cost LOM Cost Unit Cost
Description ($000) ($000) ($000) ($/t milled)
Labour 7,100 113,600 99,400 2.47
G&A Expense 2,600 41,600 36,400 0.90
Fuel 1,043 16,374 14,601 0.36
Camp Operation Costs 3,550 56,701 52,735 1.31
Power 1,085 17,037 15,192 0.38
Maintenance 3,104 48,725 43,449 1.08
Permitting 50 800 700 0.02
Total - 294,837 262,478 6.52
21.3.4 TSF OPERATING COSTS
The current estimated operating cost for the TSF is based on power consumption by the
various pumping systems, labour for maintaining and moving pipelines, maintenance,
and replacement pumps and pipelines.
For tailings and water delivery systems, 6 to 12% of the capital expenditures per year
have been assumed for maintenance and replacement of depreciable items, depending
on the complexity and anticipated wear on the system. This allowance is inclusive of all
pipe works and pump systems, regardless of the use, and includes for labour. A single
labour allowance has been assumed for the facilities. Electrical power costs are
estimated on the power requirements for the pumps. The unit cost assumed for power is
$0.05/kWh.
The operating costs over the LOM operating period are estimated at $34.4 million, and
as presented in Table 21.22.

Table 21.22 TSF Operating Costs
Cost Unit Cost
Labour 3,109 0.08
Pipeline and Pumps 22,050 0.55
Power 9,198 0.23
Total 34,357 0.85
Note: Same for base and alternative cases
21.3.5 ENVIRONMENTAL MONITORING OPERATING COSTS
The costs associated with environmental monitoring over the LOM—including performing
quarterly sampling and monitoring of the eight to ten monitoring wells—are expected to
be $4.8 million. Post-production environmental costs are expected to be $4.2 million,
resulting in unit operating costs of $0.10/t milled.

22.0 ECONOMIC ANALYSIS
A PEA should not be considered a prefeasibility or feasibility study, as the economics and
technical viability of the Project have not been demonstrated at this time. The PEA is
preliminary in nature and includes Inferred Mineral Resources that are considered too
speculative geologically to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves. Furthermore, there is no certainty
that the conclusions or results as reported in the PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
Tetra Tech conducted an economic evaluation of the Project, which incorporated all the
relevant capital, operating, working and sustaining costs. The evaluation was based on a
pre-tax financial model, and was calculated in Canadian dollars. All costs and revenues
are assumed to occur in the middle of the year.
For the 15-year LOM and 40 Mt mineable reserves, the following pre-tax financial
parameters were calculated for the base case:
 20.9% IRR
Castle commissioned PwC in Toronto, ON to prepare a tax model for the post-tax
economic evaluation of the Project, which includes applicable income and mining taxes
(see Section 22.4).
The following post-tax financial parameters were calculated for the base case:
 17.8% IRR
The base case uses the three-year trailing average prices (December 31, 2012) for
copper, gold and silver of US$3.65/lb, US$1,480/oz and US$28/oz, respectively. Based
on a marketing study performed by CRUS (2012a and 2012b), the price of metallurgical
magnetite was US$122/t. The base case exchange rate was set at US$0.99:Cdn$1.00.
Sensitivity analyses were developed to evaluate the sensitivity of the Project economics
to the key parameters.


22.1 PRE‐TAX MODEL
22.1.1 METAL PRODUCTION IN FINANCIAL MODEL
The revenues projected in the cash flow model were based on the average metal values
indicated in Table 22.1.
Table 22.1 Metal Production from Granduc Copper Project
Item Years 1 to 10 LOM

Total Tonnes to Mill ('000) 30,515 40,283
Mine Life (years) - 15
Annual Tonnes to Mill ('000) 3,052 2,686
Average Grade
Copper (%) 1.15 1.16
Gold (g/t) 0.14 0.14
Silver (g/t) 9.50 8.99
Magnetite (%) 8.06 7.06
Total Production
Copper ('000 lb) 733,647 976,564
Gold ('000 oz) 113 148
Silver ('000 oz) 8,549 10,673
Magnetite ('000 dmt) 2,206 2,553
Average Annual Production
Copper ('000 lb) 73,365 65,104
Gold ('000 oz) 11 10
Silver ('000 oz) 855 712
Magnetite ('000 dmt) 221 170
22.1.2 FINANCIAL EVALUATIONS
The production schedule has been incorporated into the 100% equity pre-tax financial
model to develop annual recovered metal production from the relationships of tonnage
processed, head grades, and recoveries.
Metal revenues were calculated based on metal prices. Operating costs for mining,
processing, G&A, and off-site charges (smelting, transportation, and royalties) areas were
compiled to determine the overall operating cost, which was deducted from the revenues
to derive annual operating cash flow (net revenue).
Initial and sustaining capital costs have been incorporated on a year-by-year basis over
the LOM, and deducted from the net revenue to determine the net cash flow before
taxes. Initial capital expenditures include costs accumulated prior to first production of
concentrates; sustaining capital includes expenditures for mining and processing


additions, replacement of equipment, tailing embankment construction, water treatment,
and environmental/closure costs.
The financial analysis used three months of the on-site operating cost as working capital
cost. The working capital is recovered at the end of the mine life. Reclamation costs
were estimated to be $20 million. All costs and revenues are assumed to occur in the
middle of the year.
The annual cash flow is illustrated in Figure 22.1. The full cash flow table is located in
Appendix C.
Figure 22.1 Pre‐tax Undiscounted Annual and Cumulative Cash Flow
400 2,000
300 1,500
Cumulative Cash Flow (CDN$M)
Annual Cash Flow (CDN$M)
200 1,000
100 500
0 0
(6) (5) (4) (3) (2) (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
(100) (500)
Production year
(200) (1,000)
(300) (1,500)
NCF CNCF
Note: NCF = net cash flow; CNCF = cumulative net cash flow
22.2 OPERATING SCENARIOS
The base case assumes that the Project will produce copper concentrate (with gold and
silver credit) and metallurgical magnetite. In addition to the base case, Tetra Tech
evaluated an alternate case that assumed that no magnetite will be produced and the
Project will produce copper concentrate (with gold and silver credit) only.
The pre-tax financial model was established on a 100% equity basis, excluding debt
financing and loan interest charges. All costs and revenues are assumed to occur in the
middle of the year. The financial outcomes have been tabulated for NPV, IRR, payback of
capital, and cash operating cost per pound of payable copper. Discount rates of 5%, 8%,
10% and 12% were applied to all scenarios. The results are presented in Table 22.2.


Table 22.2 Summary of Pre‐tax NPV, IRR and Payback by Scenario
Base Alternate
Item Unit Case Case
Metal Prices
Copper US$/lb 3.65
Gold US$/oz 1,480.00
Silver US$/oz 28.00
Metallurgical Magnetite US$/t 122.00
Exchange Rate US$:Cdn$ 0.99
Economic Results
Net Cash Flow $ million 1,363 1,240
NPV (at 5%) $ million 633 559
IRR % 20.9 19.2
Payback years 4.0 4.4
Net Discounted Value, Q1 2016 (at 8%) $ million 494 424
Gross Cash Operating Cost/lb Cu Payable $/lb 2.06 2.06
Net Cash Operating Cost/lb Cu Payable $/lb 1.38 1.57
Note: Gross cash operating cost does not account for by-product credits while the net cash operating cost
accounts for by-product credit.
22.3 SENSITIVITY ANALYSIS
Sensitivity analyses were carried out on the following parameters:
 copper price
 gold price
 silver price
 metallurgical magnetite price
 exchange rate
 initial capital expenditure
 on-site operating costs.
The analyses are presented graphically as financial outcomes in terms of NPV and IRR.
The Project NPV is most sensitive to copper price and exchange rate followed by
operating costs and initial capital. The Project IRR is most sensitive to exchange rate and
copper price followed by initial capital and operating costs. Both NPV and IRR are less
sensitive to gold, silver and magnetite prices. The NPV and IRR sensitivities are shown in
Figure 22.2 and Figure 22.3.


Figure 22.2 Sensitivity Analysis of Base Case Pre‐tax NPV at 8% Discount Rate
900
800
NPV@8% Discount Rate (CDN$M) 700
600
500
400
300
200
100
0
‐100‐30% ‐20% ‐10% 0% 10% 20% 30%
% Change from Base Case
Copper price Metallurgical Magneteite price
Gold price Silver price
Exchange rate Capital costs
Operating costs


Figure 22.3 Sensitivity Analysis of Pre‐tax Base Case IRR
45%
40%
35%
Internal Rate of Return (%)
30%
25%
20%
15%
10%
5%
0%
‐30% ‐20% ‐10% 0% 10% 20% 30%
% Change from Base Case
Copper price Metallurgical Magnetite price
Gold price Silver price
Exchange rate Capital costs
Operating costs
22.4 POST‐TAX FINANCIAL ANALYSIS
Castle commissioned PwC in Toronto, Ontario to prepare a tax model for the post-tax
economic evaluation of the Project with the inclusion of applicable income and mining
taxes.
The following general tax regime was recognized as applicable at the time of report
writing.
22.4.1 CANADIAN FEDERAL AND BC PROVINCIAL INCOME TAX REGIME
Federal and BC provincial income taxes are calculated using the currently enacted
corporate rate of 15% for federal and the recently announced corporate tax rate of 11%
for BC. Please note that at the date of this report, the BC corporate tax rate of 11% was
not enacted, but is expected to be enacted in due course.


For both federal and provincial income tax purposes, capital expenditures are
accumulated in pools that can be deducted against mine income at different rates,
depending on the type of capital expenditure.
Resource property acquisition costs, and the costs of mine shafts, main haulage ways
and other underground workings incurred after the mine came into production, are
accumulated in the cumulative Canadian development expense (CDE) pool. The CDE
pool is amortized against income at the rate of 30% on a declining balance basis.
Most pre-production mine exploration and development expenditures are accumulated in

the cumulative Canadian Exploration Expense (CEE) pool. One hundred percent of the
CEE pool is generally deductible, to the extent of taxable income from the mine.
Depreciable fixed assets purchased prior to the commencement of commercial

production are accumulated in a capital cost allowance pool (Class 41(a)) and are
generally amortized at a rate ranging from 25 to 100% on a declining balance basis, to
the extent of taxable income from the mine.
All other fixed assets purchased after the commencement of commercial production are
accumulated in Class 41(b) and are amortized at the rate of 25% on a declining balance
basis.
22.4.2 BC MINERAL TAX REGIME
The BC Mineral Tax regime is a two tier tax regime, with a 2% tax and a 13% tax.
The 2% tax is assessed on “net current proceeds”, which is defined as gross revenue
from the mine less mine operating expenditures. Hedging income and losses, royalties
and financing costs are excluded from operating expenditures. The 2% tax is
accumulated in a Cumulative Tax Credit Account (CTCA) and is fully creditable against the
13% tax.
All capital expenditures, both mine development costs and fixed asset purchases, are
accumulated in the Cumulative Expenditures Account (CEA), which is amortized at the
rate of 100% against the 13% tax.
The 13% tax is assessed on “net revenue”, which is defined as gross revenue from the
mine, less mine operating expenditures, less any accumulated CEA balance. As such, the
13% tax is not assessed until all pre-production capital expenditures have been
amortized.
Notional interest of 125% of the prevailing federal bank rate is calculated annually on
any unused CEA and CTCA balances and is added to these pools.
The BC Mineral Tax is deductible for federal and provincial income tax purposes.


At the long-term metal prices used for this study, total estimated taxes payable on the
Project profits are $382 million over the 15-year mine life. The components of the
various taxes that will be payable are shown in Table 22.3.
Table 22.3 Components of the Various Taxes (Base Case)
LOM Amount
Tax Component ($ million)
Corporate Tax (Federal) 209
Corporate Tax (Provincial) 130
Provincial Resource Tax 42
Total Taxes 382
Base case post-tax financial results are summarized in Table 22.4.
Table 22.4 Summary of Base Case Post‐tax Financial Results
Description Unit Value

NCF $ million 981
NPV (at 5%) $ million 435
IRR % 17.8
Payback years 4.2
Net Discounted Value, Q1 2016 (at 8%) $ million 322
22.5 ROYALTIES
It was assumed the existing royalty would be bought down prior to the start of
construction. This cost ($1.1 million) would be considered sunk and has therefore been
excluded from the financial analysis.
22.6 SMELTER AND MARKETING TERMS
In the absence of letters of interest or letters of intent from potential smelters or buyers
of concentrate, CRUS (2012; 2013; 2013a) has provided smelter and marketing terms
for delivery of copper concentrate and magnetite to Asian markets.
Copper concentrate contracts will generally include payment terms as follows:


 Copper – pay 100% of content less 1.0 unit at the London Metal Exchange
(LME) price for Grade A copper less a refining charge of US$0.083/accountable
lb.
 Gold – pay 91% on the gold content less a refining charge of US$5/accountable
troy oz.
 Silver – pay 91% on the silver content less a refining charge of
US$0.35/accountable troy oz.
 Treatment Charge – US$83/dmt of concentrate delivered.
 Penalty Charge – No penalty was applied.
CRUS provided the following magnetite marketing terms:
 Metallurgical Magnetite – base price is US$122/t plus a US$12/t iron premium

and $5/t mineralogy premium minus US$9/t penalty for sulphur content.
22.7 TRANSPORTATION LOGISTICS
The copper concentrate, containing approximately 12% moisture, will be trucked to
Stewart and exported via SBT to the Asian copper smelters. Metallurgical magnetite,
containing 5% moisture, will also be exported via SBT to Asian markets. For both copper
concentrate and metallurgical magnetite, trucking cost is $5.56/wmt, port cost is
$18/wmt and ocean freight cost as estimated by CRUS is US$31/dmt.
22.7.1 INSURANCE
An insurance rate of 0.15% was applied to the provisional invoice value.
22.7.2 OWNERS REPRESENTATION AND MARKETING
For copper concentrate representation and marketing cost is assumed to be
US$2.5/wmt. For metallurgical magnetite representation and marketing cost is
US$5/wmt.
22.7.3 CONCENTRATE/MAGNETITE LOSSES
An overall loss of 0.42% was applied to the tonnage of concentrate/magnetite produced.


23.0 ADJACENT PROPERTIES
There are no material adjacent properties from a resource perspective. From an active
mining perspective, the Property is located in a region of BC populated with current
mining operations. However, these operations are not considered relevant to this report.


24.0 OTHER RELEVANT DATA AND
INFORMATION
There is no other relevant data or information to add to this technical report.


25.0 INTERPRETATIONS AND CONCLUSIONS
25.1 MINERAL RESOURCE ESTIMATE
Castle asked Tetra Tech to estimate an updated mineral resource on the Granduc
deposit.
The mineral resource consists of two zones: the Main Zone and the North Zone. Each
zone consists of multiple high-grade domains representing steeply-dipping lenses of a
Besshi-type VMS deposit. These lenses were modelled utilizing multiple hanging wall and
footwall wireframes. Each domain was interpolated separately.
The work encompassed in this report models and estimates grade in mineralized lenses
broken into multiple domains of both the Main and North Zones. All modelling was
completed using Datamine™ software, employing a series of wireframes. Models and
estimates are based on surface and underground drillhole data. The mineral resources
within this report utilize a combined copper, gold, and silver cut-off, reported as a copper
equivalent.
Table 25.1 summarizes the copper, gold, and silver mineral resources for the Granduc
deposit, effective December 12, 2012. Table 25.2 summarizes the magnetite mineral
resources for the Granduc deposit.
Table 25.1 NI 43‐101 Copper, Gold and Silver Mineral Resources
CuEq
Resource Cut-off Tonnes Cu Au Ag
Category (%) (Mt) (%) (g/t) (g/t)
Measured + Indicated 0.8 11.32 1.47 0.17 12.4
Main Zone Inferred 0.8 30.52 1.40 0.17 13.3
North Zone Inferred 0.8 14.11 1.49 0.21 5.2
Inferred 0.8 44.63 1.43 0.19 10.7
Indicated 0.8 5.16 1.58 0.17 13.7
Measured 0.8 6.16 1.39 0.17 11.4
Table 25.2 NI 43‐101 Magnetite Mineral Resources at CuEq ≥0.8%
Magnetite
Resource Cut-off Tonnes Magnetite
Category (%) (Mt) (%)
Main Zone Inferred 2.8 37.1 13.3


25.2 MINERAL PROCESSING AND METALLURGICAL TESTING
ALS Metallurgy (formerly G&T) in Kamloops, BC conducted two metallurgical testing
programs between 2011 and 2012 on samples representative of the Main Zone. The
samples tested in the program had head assays of 1.5% copper, 0.2 g/t gold and 9 g/t
silver.
Ore hardness tests indicated that the sample was relatively soft in respect to breakage in
a ball mill, but moderately hard in terms of breakage in a SAG mill. The Project’s
electricity cost is considered to be low, at approximately Cdn$0.05/kWh; therefore the
mineralized material’s relative hardness should not have a significant effect on power
cost.
After two stages of cleaning, a locked cycle flotation test showed that approximately 95%
of the feed copper, 79% of the feed gold, and 91% of the feed silver could be recovered
into a final concentrate containing approximately 27% copper, 2.7 g/t gold, and 177 g/t
silver. Analysis of the concentrate indicated that there were no deleterious elements
above typical smelter penalty levels.
A mineralogy analysis of the sample estimated the magnetite content to be approximately

21%. At the nominal rougher flotation feed size of 167 µm K80, the mineralogical
analysis suggested that magnetite was approximately 40% liberated. This fragmentation
data would suggest that the sample would need to be further ground to achieve a high
grade magnetite concentrate.
Without any further regrinding, testing indicated that Davis tube magnetic concentrates
assayed between 52 and 57% iron, and between 1.2 and 1.5% sulphur. Regrinding to
approximately 40 µm K80, a magnetite concentrate grading about 68% iron, 1.5%
sulphur, and 0.03% copper was produced.
With an aggressive bulk sulphide flotation flowsheet and a two-stage magnetic

separation procedure, with a regrind size of approximately 40 µm K80, the highest grade
magnetite concentrate contained approximately 70% iron and 0.4% sulphur. This is a
higher level of sulphur than normally accepted by the steel industry and would incur
penalties, though these would likely be offset by premium for the high iron content.
25.3 MINING
The Granduc mine is capable of sustaining the planned production rate of 8,500 t/d of
resource for 9 ¼ years of the 15-year LOM. This production rate includes mineral
resource obtained from development activities, and is independent of the production
ramp-up and ramp- down periods typical for underground mines.


The FW SLC area in the Main Zone contains almost half of the presently defined overall
resource on the property. Therefore, mining activities for this zone were prioritized in the
development and production schedules as much as possible to maintain the longest
possible peak production period.
The South Leduc Glacier will present several significant challenges to the mining of up to
a third of the Main Zone. Tetra Tech assumed that a 100 m thick crown pillar under the
glacier will delay surface subsidence until after mine closure; this must be verified by
geotechnical studies.
The majority of the development waste produced in the mine will be placed in open
stopes as cemented rockfill. However, approximately 4.6 Mt of the total 5.6 Mt of waste
will need to be sent to a temporary surface waste stockpile; only 3.1 Mt of this material
will be returned underground for use as backfill. The remaining 1.5 Mt will need to be
permanently stored on surface.
There will be no viable way to move mobile equipment to surface maintenance facilities
once it has been assembled underground; therefore it is extremely important that
adequate attention be paid to the underground mobile equipment service facilities during
the design stage.
The concentrator will be located approximately 17 km from the Granduc deposit. The
concentrator will process the mineralized material at a nominal rate of 8,500 t/d with an
availability of 92% (365 d/a), for a total expected plant feed production of 3,102,500 t/a.
There are two proposed cases for plant production:
 base case: production of a copper concentrate (with silver/gold credits) and a

 alternative case: production of a copper concentrate (with silver/gold credits)
with no magnetite concentration.
The process flowsheet for the base case includes SAG, conventional flotation, and
magnetic separation circuits. Concentrate dewatering will include thickening followed by
pressure filtration for the copper concentrate, and rotary disk filtration plus rotary drying
for the magnetite concentrate. The concentrates will likely then be trucked 52 km by
road to a marine load out facility near Stewart, BC, where they will be transferred to their
selected markets.
While the alternate case would reduce the mill footprint, simplify the process flowsheet,
and lower both operating and capital costs, it would also not allow for any potential of
added profit from production of a magnetite concentrate.
Some of the foreseen potential risks of the Project include:


 Certain area weather conditions may result in the fluctuation of annual plant
availability.
 The throughput and overall mill efficiency may be negatively affected if target
grind sizes are not met in the primary grinding circuit; accordingly, it will be
important to ensure that pre-crushed mill feed meets its target product size
 Variable magnetite feed grades may render the magnetite circuit inefficient. The
circuit could be bypassed if significantly lower magnetite recoveries are
observed.
 No recent metallurgical test work on any other Granduc zones has been
completed to date. The processing response to the flowsheet may be poorer
than that of the Main Zone.
Some of the foreseen potential opportunities of the Project include:
 The selected primary grinding circuit reduces the mill foot print without a loss in
efficiency.
 Variable magnetite feed grades may increase the value of the magnetite
concentrate.
 Optimization test work may suggest that coarser target grind sizes would
improve overall mill efficiency and lower project costs.
 Lower copper concentrate moisture content would reduce storage and shipping
costs.
25.5 INFRASTRUCTURE
The Project will require construction of a number of key infrastructure components to
support the planned production facilities. The following key infrastructure and service
requirements were identified and a preliminary evaluation was performed to put the mine
back into production:
 administrative and mine dry complex

 surface maintenance shop and warehouse
 assay lab
 accommodations camp complex and ancillary facilities
 fuel storage and distribution
 water supply and distribution
 surface water management
 sewage and waste management
 off-site power supply and on-site distribution
 TSF


 on-site roads interconnecting facilities
 off-site access road
 off-site marine load out facility.
then by the existing Granduc Road which terminates at the Project site. This route will be
used during all phases of project development to transport personnel, equipment, and
supplies between Stewart and the Project site. The road will also be used to transport
copper and magnetite concentrate via truck to SBT for shipment to destination markets
in Asia. To enable safe, efficient, year-round access to the Project site, sections of the
route will require upgrade.
Power supply to support the Project’s anticipated production level load of 25 MW is

proposed to be provided via an interconnection to the planned LLHP under development
by Regional Power Corporation. A 138 kV tie-in is proposed at the Long Lake substation,
with the power transmission line route largely following the existing Granduc Road,
allowing for easier construction and maintenance access, running north to the Project
site. The proposed 138 kV power transmission line corridor is approximated to be 23 km
in length, with allowance for isolated protection for snow avalanches.
Further evaluation is recommended around key infrastructure components, including the

off-site access road, power supply to the site and off-site port facilities.
25.6 ENVIRONMENTAL
Components of the Project are within the boundaries of the Nass Area as defined under
the Nisga’a Final Agreement, and within the asserted traditional territory of Skii km Lax
Ha. Engagement and consultation activities have been initiated and will continue as the
Project advances.
A thorough assessment of geochemical characteristics of mine waste and tailings will

need to be conducted. In addition to completion of environmental baseline studies, such
as fish and aquatic biota, vegetation, soils, wildlife and habitat, and other studies
required to characterize the biophysical environment will be needed.
Freshwater diversion options for surface facilities areas will be evaluated. It will be
important to understand the site hydrology and water balance for determining how to
recycle, reuse and/or manage water for the Project as well as understanding water
quality and flows in receiving waters, including those transboundary between Canada and
the US.
The TSF will be sized, designed, and managed to ensure integrity of the facility during
LOM and following closure. Waste rock will be handled in accordance with the ML/ARD
EMP that will be developed for the Project based on environmental geochemistry and
water quality prediction and assessment work. Hazardous and non-hazardous waste will
be handled in accordance with applicable regulations.


A reclamation and closure plan will be developed for the Project that meets the
requirements of the BC Mines Act and Health, Safety and Reclamation Code for Mines in
BC. The reclamation and closure plan will also consider Nisga’a Nation, First Nation, and
stakeholder priorities.
A qualitative assessment of air quality effects is likely to be completed for the Project.
Worker health and safety will be an important component of the assessment, as well as
identification of appropriate mitigation measures to minimize any potential effects.
As the Project is subject to review under BCEAA and CEAA 2012, the review process is
likely to be co-led by the BC EAO and CEA Agency. If the Project is approved, an EAC and
Federal Ministerial Decision will be required prior to permitting. Requirements for
authorizations, permits, or approvals under provincial and federal legislation will be
confirmed in consultation with the responsible agencies.


26.0 RECOMMENDATIONS
26.1 INTRODUCTION
The approximate cost for completion of the work through to the end of the prefeasibility
phase is expected to be $91 million. A description of recommended work and cost
estimate by discipline are presented in the following sections.
26.2 GEOLOGY
In Tetra Tech’s opinion, further compilation, rehabilitation and exploration work is
warranted on the Property.
26.2.1 PHASE I
The focus of Phase I of these recommendations is to establish underground headings—
either rehabilitated historic headings, or newly driven headings—to be used as a platform
for underground exploration and resource upgrading. This would significantly reduce
drilling difficulties and increase confidence of surveying the results, especially with
respect to the North Zone. In this phase, the emphasis should be placed on converting
near-mine Inferred Resources to Indicated, so that a greater resource base could be
utilized in mine planning.
It would also be beneficial to rehabilitate as much of the mine as possible so as to

properly survey the voids and headings, and in order to estimate how much material has
been removed and from where.
Where possible, a compilation of historical geological logging information should be

completed.
Further magnetite sampling should be conducted in historical and previous Castle

drillholes in order to add confidence to subsequent magnetite estimations. In all new
drilling, all samples should be routinely assayed for magnetite.
For this and all future work on the Property, a differential GPS system with a stationary
base station is recommended. This would aide in reducing the uncertainty in the
elevation (Z) values obtained using regular or differential GPS units without a base
station, which have been noted to be off as much as 40 m in this terrain.
Exploration drilling in this phase should focus on extending the Inferred Resources at
depth and immediately adjacent to known intercepts, or by converting with confidence
near-mine Inferred Resources to Indicated status.


Surface drilling costs are estimated at approximately $350/m. Thus a 700 m drillhole
would cost $245,000. Twenty surface drillholes should be budgeted for 2013 at a cost
of approximately $5 million. Mine rehabilitation and development of exploration drives
require considerable investment. For Phase I, it is recommended that $11 million be
allotted to re-establish the mine to an operating entity. Finally $1 million needs to be
invested into detailed surface mapping and surface sampling. Costs associated with
infrastructure and project support for the program would require $3 million. The total
cost for Phase I is $20 million.
26.2.2 PHASE II
The focus of Phase II is to expand the resources further to the north and south. This
phase would focus on the results from the electromagnetic work performed while Bell
Copper operated the Project (Section 6.2).
As with Phase I, the bulk of the expenditures in Phase II should focus on mine
rehabilitation (approximately $8 million). This would be with the intention of
commencement of ore production and establishment of new underground positions for
exploration and grade control drilling. If possible, $4 million could be allotted to
underground drilling. As with the previous year, surface drilling (20 holes) requires
$5 million. Costs associated with infrastructure and project support for the program
would require $3 million. The total cost for Phase II is $20 million.
26.3 MINERAL PROCESSING
Tetra Tech recommends that a prefeasibility metallurgical testing program be conducted
on samples from the Property. The objective of this test work program would be to
optimize the process flowsheet for the Granduc Main Zone, and examine the feed
properties and response of the other Granduc zones under the optimal conditions. The
primary focus of the test work should be to establish an optimized primary and regrind
size in the flotation circuit, but also aim to optimize the flotation reagent dosage and
mass recoveries. Downstream tests for thickening and filtration purposes should also be
conducted and assessed. The costs to complete the metallurgical test program will likely
range from approximately $100,000 to $150,000 depending on the lab chosen and the
extent of testing required. The timeline to complete the test program is typically three to
six months depending on lab availability.
Tetra Tech recommends that once prefeasibility and optimization test work is completed
(as described in the mineral processing recommendations), a more detailed process
flowsheet and process design criteria should be established. A simulation software, such
as IDEAS or SYSCad should be used to model the mill flowsheet, including water and
mass balances, chemical reactions and energy balances, and particle size distributions,
which should help troubleshoot and improve the concentrator’s overall efficiency.


26.5 INFRASTRUCTURE
To support the infrastructure design at a prefeasibility level, Tetra Tech recommends:
 a prefeasibility-level power supply study, including transmission line corridor

evaluation, voltage level selection, conductor size selection, structure selection,
right-of-way and clearing requirements, substations and connection the Long
Lake Hydro Powerhouse Project
 a site-wide geotechnical investigation for initial borehole drilling and surface test
pits
 a topographic survey with a contour interval of a minimum of 2 m
 an avalanche hazard assessment, risk analysis and mitigation for the mine site
area, power transmission line alignment and off-site access road to the Project
site
 a prefeasibility-level Granduc road upgrade study, including locating and
surveying the preliminary road centreline, design of horizontal and vertical
alignment to avoid or mitigate impacts of geohazards, earthwork quantity
estimation and construction costs
 assessment of existing and planned off-site port facilities, including the
evaluation of upgrade and capital cost requirements
 prefeasibility-level site surface infrastructure and services design, including site
buildings, fuel storage and distribution, on-site roads, power distribution, water
supply and distribution, surface water management, and the management of
waste
The estimate cost to complete this recommended work is approximately $400,000.
For the next level of TSF design, Tetra Tech makes the following recommendations:
 Geotechnical and hydrogeological site investigations (e.g. mapping, drilling,

geophysics, test pits, and associated geotechnical and geochemical laboratory
testing) should be completed to confirm the assumptions used to develop the
conceptual designs presented in this report.
 Borrow studies to identify specific locations and characterize potential areas for
rockfill, granular filters, and low permeability soils will be completed. This will
include surface mapping, drilling, test pitting, and geotechnical and geochemical
laboratory testing.
 Glaciological study on the future behavior of Summit Glacier including expected
extent of Lake Basin filling and expected frequency of future jokulhlaups.
 A seismic hazard assessment for the proposed TSF site should be conducted.


 Geotechnical and geochemical laboratory testing on representative samples of
each type of tailings should be completed.
 Embankment slope stability and seepage analyses once geotechnical site
investigations and laboratory testing are complete.
 A detailed geohazard assessment should be completed to identify and
characterize potential geohazards and risks that may impact the TSF and
auxiliary facilities.
 Hydrologic flood routing to determine storage capacity for storm events and to
size emergency spillways.
The estimated cost to complete this recommended work is approximately $400,000.
26.7 MINING
Tetra Tech recommends the following activities related to mining:
 Perform a full hydrogeological study to determine the expected mine water

inflow. This will be required to design and estimate costs for the new mine
dewatering system. Estimate cost of $300,000 to complete.
 Perform a full geotechnical study to outline required ground support systems,
stope geometry and sequencing and any minimum pillar sizes, particularly the
crown pillar located immediately beneath the South Leduc Glacier. This work
will also be required to evaluate the viability of maintaining a temporary central
pillar through the footwall SLC stoping areas in the main zone. Estimate cost of
$300,000 to complete.
 Rehabilitate and/or enlarge identified, existing mine workings prior to the start
of the new mine development program. This will be required to implement the
primary mine ventilation system. Estimate cost of $40 million to complete.
 Evaluate the historical crusher, conveyor and bin equipment and excavations to
assess their suitability and condition with respect to the new mine plan. It was
assumed that the existing excavations would require little to no rehabilitation or
modification prior to installing all new equipment. Cost of inspection to be
insignificant to cost of new system design.
 Simulation studies should be conducted on the trucking, stope mucking and rail
haulage systems, to be able to fine tune the mine production rates in various
areas. This data will subsequently be used to determine the actual size of the
required mobile equipment fleet as well as all other mine infrastructure. In
addition, the logistics of efficiently moving all personnel, materials,
consumables, and equipment in to the mine will be paramount in achieving the
targeted production rates. Estimate cost of $300,000 to complete.
 The total estimated cost, including contingency, for the above work is expected
to be total $50 million.


26.8 ENVIRONMENTAL
It is recommended that Castle continue with the environmental baseline studies required
for environmental assessment and permitting. During prefeasibility level studies,
environmental baseline data collected will be used for relevant project facilities design,
environmental assessment, and permitting activities.
26.9 RECOMMENDED COSTS SUMMARY
Table 26.1 summarizes the recommended costs for future work of the Project.
Table 26.1 Recommended Future Work Cost
Cost
Description ($ million)
Geology 40
Mineral Processing 0.10 – 0.15
Infrastructure 0.4
TSF 0.4
Mining 50
Environmental 0.16 – 0.20
Total $91


27.0 REFERENCES
27.1 GEOLOGY
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), 2010: CIM Standards for
Mineral Resources and Mineral Reserves, Definitions and Guidelines: Canadian
Institute of Mining, Metallurgy and Petroleum, November 2010,
http://www.cim.org/UserFiles/File/CIM_DEFINITON_STANDARDS_Nov_2010.pdf.
Grove, Edward W. (1986). Geology and Mineral Deposits of the Unuk River-Salmon River-
Anyox Area. British Columbia Ministry of Energy, Mines and Petroleum Resources,
Bulletin 63, December 1986.
Johnson, Michael D. (2012). Independent Technical Report for the Granduc Copper
Project, BC, Canada. SRK Consulting (Canada) Inc., prepared for Castle Resources
Inc., April 5, 2012.
Marsh, Timothy (2006). Granduc JK Zone – Drilling Complete and Trenching Assays. Bell
Resources Corporation News Release, October 25, 2006.
Marsh, Timothy M. (2006). Airborne Electromagnetic and Magnetic Survey of the Greater
Granduc Mine Area. Bell Resources Corporation, accessed on the ARIS system
(aris.empr.gov.bc.ca) assessment report #28167.
McGuigan, P., Harrison, D. (2010). Technical Report, Granduc Property, Northwestern

British Columbia, Canada. Cambria Geosciences, Vancouver, BC.
McGuigan, P.J. (2005). Granduc Property, Northwestern BC, Canada - Technical Report
for Bell Resources Corporation. Unpublished company report.
Melnyk, W. (1991). Geological and Geochemical Report on the Granduc Property.

Company reports for Granduc Mines Ltd. (N.P.L.) by Cambria Geological Ltd.
Unpublished company report.
Minfile, No104B1 Cu1. (2011) Granduc, Leduc, Vaughn K., Edna May. BC Ministry of
Energy, minfile.gov.bc.ca.
Ostensoe, Erik A. (1967). Prospecting Possibilities of A Portion Of Northwestern British

Columbia – A Report to Granduc Mines, Limited. Unpublished company report, 46
pages.
Schmidt, W., Tyler, P., and Dereniwski, T. (1983). Economic Potential at Granduc.
Unpublished company report, 63 pages.


Walker, M.R. (1985). The Salvage, Reclamation and Abandonment of the Granduc Mine -
Proceedings of the 9th Annual British Columbia Mine Reclamation Symposium in
Kamloops, BC, 1985. The Technical and Research Committee on Reclamation.
Wasteneys, H. (2007). Technical Report on Diamond Drilling and Geochemistry at

Granduc. Bell Resources Corporation, accessed on ARIS system
(aris.empr.gov.bc.ca) assessment report # 28912.
WEBSITES
Environment Canada:
http://climate.weatheroffice.gc.ca/climate_normals/results_e.html?stnID=434&lang
=e&dCode=1&StationName=STEWART&SearchType=Contains&province=ALL&provB
ut=&month1=0&month2=12 (accessed December 13, 2012)
27.2 METALLURGY AND PROCESS
Johnson, Michael D. (2012). Independent Technical Report for the Granduc Copper
Project, BC, Canada. SRK Consulting (Canada) Inc., prepared for Castle Resources
Inc., April 5, 2012.
27.3 ENVIRONMENTAL
Castle Resources Inc. (2012). Granduc Copper Project – Project Description. December
2012.
Castle Resources Inc. (2013). Granduc Copper Project – Project Description Executive
Summary. Version 0.0. January 2013.
McGuigan, P., Harrison, D. (2010). Technical Report, Granduc Property, Northwestern

British Columbia, Canada. Cambria Geosciences, Vancouver, BC. 2010.
Martin, T. E. (2011). Mine Waste Management in Wet, Mountainous Terrain: Some British
Columbia Perspectives, Part I – Setting, Past, and Present. Proceedings Tailings and
Mine Waste 2011, Vancouver, BC.
Vick, S.G. (1990). Planning, Design and Analysis of Tailings Dams. Bitech Publishers
Limited.


27.5 MARKET STUDIES AND FINANCIALS
CRU Strategies (CRUS). 2012. Granduc Copper Project Market Study. CS Reference
Number 430576. Prepared for Castle Resources Inc., Canada. DRAFT. December
2012.
CRU Strategies (CRUS). 2013. Granduc Copper Project Market Study. CS Reference
Number 430576. Prepared for Castle Resources Inc., Canada. FINAL. January
2013.
CRU Strategies (CRUS). 2013a. Letter to David Penswick at Castle Resources regarding
freight estimate. February, 19, 2012.
Tetra Tech (2012a). Granduc Mine (PEA) Shipping Costs – Copper Concentrates.
Document No. 1256370300-MEM-R0001-00. November 30, 2012.
Tetra Tech (2012b). Granduc Mine (PEA) Shipping Costs – Magnetite Concentrates.
Document No. 1256370300-MEM-R0002-00. December 18, 2012.


APPENDIX A
CERTIFICATES OF QUALI FIED PERSONS

ANDRE C. GAGNON, P.ENG.
I, Andre C. Gagnon, P.Eng., of Toronto, Ontario, do hereby certify:
 I am a Geotechnical Engineer with Tetra Tech WEI Inc. with a business address at 900-330 Bay
Street, Toronto, Ontario, M5H 2S8.
 This certificate applies to the technical report entitled Preliminary Economic Assessment of the
Granduc Copper Project, Northern British Columbia, dated February 28, 2013 (the “Technical
Report”).
 I am a graduate of Queen’s University (Bachelor of Applied Science, Geological Engineering,
2006). I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia, License #35793 and the Association of Professional
Engineers of Ontario, License #100173442. My relevant experience with respect to tailings
storage facility design includes six years of experience and work for the following projects:
Prosperity Project, BC; Casino Project, YK; Aley Project, BC; Magino Project; ON. I am a “Qualified
Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was May 28 and 29, 2012 for two days.
 I am responsible for Sections 1.10.1, 18.1, 26.6, and 27.4 of the Technical Report.
 I am independent of Castle Resources Inc. as defined by Section 1.5 of the Instrument.
 I have no prior involvement with the Property that is the subject of the Technical Report.
 I have read the Instrument and the sections of the Technical Report that I am responsible for
have been prepared in compliance with the Instrument.
 As of the date of this certificate, to the best of my knowledge, information and belief, the
sections of the Technical Report that I am responsible for contain all scientific and technical
information that is required to be disclosed to make the Technical Report not misleading.
Signed and dated this 12th day of April, 2013 at Toronto, Ontario.
“Original document signed and sealed by

Andre C. Gagnon, P.Eng.”
Andre C. Gagnon, P.Eng.
Geotechnical Engineer
Tetra Tech WEI Inc.
CAMERON MCKINNON, P.ENG.
I, Cameron McKinnon, P.Eng., of Saskatoon, Saskatchewan, do hereby certify:
 I am a Manager of Process with Tetra Tech WEI Inc. with a business address at Suite 110, 410
22nd Street East, Saskatoon, Saskatchewan, S7K 5T6.
Report”).
 I am a graduate of McGill University (B.Eng. Metallurgical Engineering, 1995). I am a member in
good standing of the Association of Professional Engineers and Geoscientists of Saskatchewan,
License #10971. My relevant experience includes 16 years experience in mineral processing.
This includes experience in copper, zinc, lead, gold, silver, uranium and potash processing. I am
a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I did not complete a personal inspection of the Property.
 I am responsible for Sections 1.7, 1.9, 13.0, 17.0, 25.2, 25.4, 26.3, 26.4, and 27.2 of the
Technical Report.
Signed and dated this 12th day of April, 2013 at Saskatoon, Saskatchewan.

Cameron McKinnon, P.Eng.”
Cameron McKinnon, P.Eng.
Manager of Process
Tetra Tech WEI Inc.
DHARSHAN KESAVANATHAN, P.ENG.
I, Dharshan Kesavanathan, P.Eng., of Mississauga, Ontario, do hereby certify:
 I am a Manager, Private Sector Water with Tetra Tech WEI Inc. with a business address at 6835A
Century Avenue, Mississauga, Ontario, L5N 2L2.
Report”).
 I am a graduate of the University of Guelph (B.Sc. Eng. Environmental Engineering, 2001). I am
a member in good standing of the Association of Professional Engineers of Ontario, License
#100074871. My relevant experience includes 11 years of experience in environmental and
infrastructure design, as well as project delivery and implementation, primarily for the heavy
industrial sector. Areas of specialization include site civil development as well as water
management and treatment for the mining and metallurgical industries. I am a “Qualified
Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I am responsible for Sections 1.10 (except 1.10.1), 18.0 (except 18.1), 25.5, and 26.5 of the
Technical Report.
Signed and dated this 12th day of April, 2013 at Mississauga, Ontario.

Dharshan Kesavanathan, P.Eng.”
Dharshan Kesavanathan, P.Eng.
Manager, Private Sector Water
Tetra Tech WEI Inc.
GARTH LIUKKO, P.ENG.
I, Garth Liukko, P.Eng., of Sudbury, Ontario, do hereby certify:
 I am a Senior Mining Engineer, currently residing at 3221 Percy Avenue, Val Caron, Ontario. I
was employed until March 12, 2013 with Tetra Tech WEI Inc. with a business address at Suite
101, 957 Cambrian Heights, Sudbury, Ontario, P3C 5M6
Report”).
 I am a graduate of Laurentian University (Bachelor of Engineering, 1991). I am a member in
good standing of the Association of Professional Engineers of Ontario, License #90533399. My
relevant experience includes more than 20 years in underground mine planning, design and
evaluation. I have extensive experience in mine production, ventilation and backfill systems,
scheduling, design and operation. I am a “Qualified Person” for the purposes of National
Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was May 28 to 31, 2012.
 I am responsible for Sections 1.8, 15.0, 16.0 (except 16.2), 25.3, and 26.7 of the Technical
Report.
Signed and dated this 12th day of April, 2013 at Val Caron, Ontario.

Garth Liukko, P.Eng.”
Garth Liukko, P.Eng.
Senior Mining Engineer
JACQUES OUELLET, PH.D., P.ENG.
I, Jacques Ouellet, Ph.D., P.Eng., of Vancouver, British Columbia, do hereby certify:
 I am a Divisional Manager Mining Engineering with Tetra Tech WEI Inc. with a business address
at 800-555 West Hastings Street, Vancouver, British Columbia, V6B 1M1.
Report”).
 I am a graduate of Laval University (B.Sc.A. Geological Engineering, 1983) and École
Polytechnique (M.A.Sc. Mineral Engineering, 1986 and Ph.D. Mineral Engineering, 1992). I am a
member in good standing of the Association of Professional Engineers and Geoscientists of
British Columbia (#38385), Association of Professional Engineers and Geoscientists of
Saskatchewan (#15140), I’Order des ingénieurs du Quebec (#38331), and the Association of
Professional Engineers of Yukon (#2013). My relevant experience includes 25 years in various
mining projects, studies, and designs mainly in North America, both in underground and open pit
mining. I am a “Qualified Person” for the purposes of National Instrument 43-01 (the
“Instrument”).
 I have not completed a personal inspection of the Property that is the subject of this Technical
Report.
 I am responsible for Section 16.2 of the Technical Report.

Jacques Ouellet, Ph.D., P.Eng.”
Jacques Ouellet, Ph.D., P.Eng.
Divisional Manager Mining Engineering
Tetra Tech WEI Inc.
MIKE MCLAUGHLIN, P.ENG.
I, Mike McLaughlin, P.Eng., of Barrie, Ontario, do hereby certify:
 I am a Project Manager with Tetra Tech WEI Inc. with a business address at Suite 900, 300 Bay
Street, Toronto, Ontario, M5H 2S8.
Report”).
 I am a graduate of McMaster University (B.Eng. in Mechanical Engineering, 1990). I am a
member in good standing of the Association of Professional Engineers of Ontario, License
#100084932. My relevant experience includes more than 14 years of engineering experience,
successfully managing projects involving front end mining resource models and economic
evaluation studies. I am a “Qualified Person” for the purposes of National Instrument 43-101
(the “Instrument”).
 I am responsible for Sections 1.1, 1.12, 1.14, 2.0, 3.0, 21.0, 24.0, 26.1, and 26.8 of the
Technical Report.

Mike McLaughlin, P.Eng.”
Mike McLaughlin, P.Eng.
Project Manager
Tetra Tech WEI Inc.
MONICA DANON‐SCHAFFER, PH.D., P.ENG.
I, Monica Danon-Schaffer, Ph.D., P.Eng., of Vancouver, British Columbia, do hereby certify:
 I am a Manager, Environmental and Sustainable Development with Tetra Tech WEI Inc. with a
business address at Suite 800, 555 West Hastings Street, Vancouver, British Columbia, V6B
1M1.
Report”).
 I am a graduate of the University of British Columbia (Ph.D, Chemical and Biological Engineering,
2010), University of British Columbia (M.Eng. Civil Engineering, 1993), and the Universidad
Iberoamericana (B.Sc. Chemical Engineering, 1988). I am a member in good standing of the
Association of Professional Engineers and Geoscientists of British Columbia (#22768), the
Association of Professional Engineers of Ontario (#100045213), the Association of Professional
Engineers and Geoscientists of Saskatchewan (#20307), the Association of Professional
Engineers of Yukon (#1655), and Northwest Territories/Nunavut Association of Professional
Engineers and Geoscientists (#L2018). My relevant experience includes preparation of
environmental risk assessments, evaluation of Equator Principles, environmental health and
safety compliance audits and due diligence at mines, mine waste and management. I am a
“Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I am responsible for Sections 1.11, 20.0, 25.6, 26.8, and 27.3 of the Technical Report.
Signed and dated this 12th day of April, 2013 at Vancouver, British Columbia.

Monica Danon-Schaffer, Ph.D., P.Eng.”
Monica Danon-Schaffer, Ph.D., P.Eng.
Manager, Environmental and Sustainable Development
Tetra Tech WEI Inc.
ROBERT SINCLAIR MORRISON, PH.D., MAUSIMM (CP), P.GEO.
I, Robert Sinclair Morrison, Ph.D., MAusIMM (CP), P.Geo., of Toronto, Ontario, do hereby certify:
 I am a Lead Resource Geologist with Tetra Tech WEI Inc. with a business address at Suite 900,
300 Bay Street, Toronto, Ontario, M5H 2S8.
Report”).
 I am a graduate of Acadia University (B.Sc., 1981) and the Unversity of Adelaide (Ph.D., 1990). I
am a member in good standing of the Australasian Institute of Mining and Metallurgy, License
#11212, and I am registered as a Chartered Professional in Geology with the Australasian
Institute of Mining and Metallurgy since 2004. I am a member in good standing of the
Association of Professional Geoscientists of Ontario, License #1839 since 2010. My relevant
experience with respect to deposit geology, ore body modelling and resource estimation includes
10 years with WMC Resources and Gold Fields Ltd as an Extensional Exploration Geologist,
Senior Project Geologist, Resource Evaluation Geologist and Senior Resource Evaluation
Geologist at the St Ives Gold Mine. I am a “Qualified Person” for the purposes of National
 My most recent personal inspection of the Property was August 14 to 15, 2012.
 I am responsible for Sections 1.2, 1.3, 1.4, 1.5, 1.6, 4.0, 5.0, 6.0, 7.0, 8.0, 9.0, 10.0, 11.0,
12.0, 14.0, 23.0, 25.1, 26.2, and 27.1 of the Technical Report.

Robert Sinclair Morrison,
Ph.D., MAusIMM (CP), P.Geo.”
Robert Sinclair Morrison, Ph.D., MAusIMM (CP), P.Geo.
Lead Resource Geologist
Tetra Tech WEI Inc.
SABRY ABDEL HAFEZ, PH.D., P.ENG.
I, Sabry Abdel Hafez, Ph.D., P.Eng., of Vancouver, British Columbia, do hereby certify:
 I am a Senior Mining Engineer with Tetra Tech WEI Inc. with a business address at Suite 800,
555 West Hastings Street, Vancouver, British Columbia, V6B 1M1.
Report”).
 I am a graduate of Assiut University (B.Sc Mining Engineering, 1991; M.Sc. in Mining
Engineering, 1996; Ph.D. in Mineral Economics, 2000). I am a member in good standing of the
Association of Professional Engineers and Geoscientists of British Columbia, License #34975.
My relevant experience is in mine evaluation. I have more than 19 years of experience in the
evaluation of mining projects, advanced financial analysis, and mine planning and optimization.
My capabilities range from the conventional mine planning and evaluation to the advanced
simulation-based techniques that incorporate both market and geological uncertainties. I have
been involved in the technical studies of several base metals, gold, coal, and aggregate mining
projects in Canada and abroad. I am a “Qualified Person” for the purposes of National
 I am responsible for Sections 1.13, 19.0, 22.0, and 27.5 of the Technical Report.
Signed and dated this 12th day of April, 2013 at Vancouver, British Columbia.

Sabry Abdel Hafez, Ph.D., P.Eng.”
Sabry Abdel Hafez, Ph.D., P.Eng.
Senior Mining Engineer
Tetra Tech WEI Inc.
APPENDIX B
MINING SCHEDULES
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Client Castle Resources Inc.
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90
Year/Q 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3
Mine Schedule Period Data Mine D Q ‐12 ‐11 ‐10 ‐9 ‐8 ‐7 ‐6 ‐5 ‐4 ‐3 ‐2 ‐1 1 2 3
Development Schedule Summary Abs Q 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Waste Development
Advance (m) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 900
Tonnage (t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 100,821
Broken Volume (m^3) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 37,341
Ore Development
Advance (m) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Tonnage (t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Broken Volume (m^3) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
All Development
Advance (m) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 900
Tonnage (t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 100,821
Broken Volume (m^3) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 37,341
Waste Development
Advance (m/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10
Tonnage (t/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,120
Broken Volume (m^3/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 415
Ore Development
Advance (m/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Tonnage (t/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Broken Volume (m^3/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Raises
Advance (m/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 38
Tonnage (t/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,334
Broken Volume (m^3/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,605
All Development
Advance (m/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 10
Tonnage (t/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,120
Broken Volume (m^3/d) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 415
Development Metal Grades Cu 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ag ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Au ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Magnetite ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Schedule Summary
Waste ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 105,155
Ore ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company / Contractor Development Distribution
Capital / Operating Split (% Capital Devt/ Total Devt) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 77%
Contractor Devt Split (% Contractor/Total Crews) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 100%
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 900
Company Advance Direct Mining Cost Only $ 922.82 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Costs
Total Development Cost $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 4,617,900
Capital Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 3,560,914
Operating Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 1,056,986
Raises $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 115,862
Production Schedule Summary
Zone Method Unit Cost
Main Zone HW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
FW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Remnant BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC South $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500
Tonnes per Quarter ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 45,000
Production Metal Grades Cu (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50%
Ag (g/t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6.2
Au (g/t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 0.1
Magnetite (kg/t) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2.0
Production Costs SLC Mining $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
BHOS / AVOCA Mining $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 87,750
Overall Ore Schedule Summary
Total Ore Production Per Quarter ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 45,000
Per Day ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500.00
Metal Grades Cu 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50%
Ag ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6.16
Au ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 0.07
Magnetite ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2.03
Waste Balance
Volumes
Development Waste (Broken) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 54,525
Mined BHOS Stopes ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Waste Directly to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Waste to Surface Stockpile ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 54,525
Surface Waste to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Doc ID 1256370100‐CAL‐R0003‐00 Mill Start
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90
Year/Q 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
Mine Schedule Period Data Mine D Q 4 5 6 7 8 9 10 11 12 13 14 15 16
Development Schedule Summary Abs Q 16 17 18 19 20 21 22 23 24 25 26 27 28
Waste Development
Advance (m) 1,440 1,980 1,980 1,620 1,080 900 1,080 1,080 1,440 1,080 1,620 2,160 1,980
Tonnage (t) 149,667 193,223 197,585 141,356 91,802 96,132 100,035 91,802 149,503 97,254 137,702 191,782 193,168
Broken Volume (m^3) 55,432 71,564 73,180 52,354 34,001 35,604 37,050 34,001 55,371 36,020 51,001 71,031 71,544
Ore Development
Advance (m) ‐ 540 1,080 1,620 2,160 2,160 2,160 2,160 1,620 2,160 1,620 1,080 1,080
Tonnage (t) ‐ 36,852 73,704 110,555 147,407 147,407 147,407 147,407 110,555 147,407 110,555 73,704 73,704
Broken Volume (m^3) ‐ 12,284 24,568 36,852 49,136 49,136 49,136 49,136 36,852 49,136 36,852 24,568 24,568
All Development
Advance (m) 1,440 2,520 3,060 3,240 3,240 3,060 3,240 3,240 3,060 3,240 3,240 3,240 3,060
Tonnage (t) 149,667 230,074 271,288 251,911 239,209 243,539 247,442 239,209 260,058 244,661 248,258 265,486 266,872
Broken Volume (m^3) 55,432 83,848 97,747 89,206 83,136 84,740 86,186 83,136 92,223 85,156 87,853 95,598 96,112
Waste Development
Advance (m/d) 16 22 22 18 12 10 12 12 16 12 18 24 22
Tonnage (t/d) 1,663 2,147 2,195 1,571 1,020 1,068 1,112 1,020 1,661 1,081 1,530 2,131 2,146
Broken Volume (m^3/d) 616 795 813 582 378 396 412 378 615 400 567 789 795
Ore Development
Advance (m/d) ‐ 6 12 18 24 24 24 24 18 24 18 12 12
Tonnage (t/d) ‐ 409 819 1,228 1,638 1,638 1,638 1,638 1,228 1,638 1,228 819 819
Broken Volume (m^3/d) ‐ 136 273 409 546 546 546 546 409 546 409 273 273
Raises
Advance (m/d) 270 42 208 ‐ 42 ‐ ‐ 42 ‐ 85 42 ‐ 82
Tonnage (t/d) 30,793 4,790 23,722 ‐ 4,790 ‐ ‐ 4,790 ‐ 6,311 4,790 ‐ 9,352
Broken Volume (m^3/d) 11,405 1,774 8,786 ‐ 1,774 ‐ ‐ 1,774 ‐ 2,338 1,774 ‐ 3,464
All Development
Advance (m/d) 16 28 34 36 36 34 36 36 34 36 36 36 34
Tonnage (t/d) 1,663 2,556 3,014 2,799 2,658 2,706 2,749 2,658 2,890 2,718 2,758 2,950 2,965
Broken Volume (m^3/d) 616 932 1,086 991 924 942 958 924 1,025 946 976 1,062 1,068
Development Metal Grades Cu 0.00% 1.44% 1.51% 1.48% 1.46% 1.45% 1.37% 1.35% 1.34% 1.31% 1.30% 1.28% 1.28%
Ag ‐ 12.25 12.70 12.45 12.34 12.31 12.00 11.98 11.99 12.07 11.62 11.28 11.28
Au ‐ 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15
Magnetite ‐ 11.28 10.26 10.29 10.32 10.26 10.49 10.40 10.26 10.81 11.64 12.92 12.92
Waste 285,615 483,627 704,934 846,290 942,882 1,039,013 1,139,049 1,235,640 1,385,143 1,488,709 1,631,201 1,822,984 2,025,504
Ore ‐ 36,852 110,555 221,111 368,518 515,925 663,332 810,739 921,294 1,068,701 1,179,256 1,252,960 1,326,663
Capital / Operating Split (% Capital Devt/ Total Devt) 72% 49% 38% 32% 8% 14% 32% 26% 21% 25% 42% 28% 40%
Contractor Devt Split (% Contractor/Total Crews) 67% 40% 33% 33% 33% 0% 0% 0% 0% 0% 0% 0% 0%
Contractor Advance All In Cost $ 5,131 960 1,008 1,020 1,080 1,080 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 480 1,512 2,040 2,160 2,160 3,060 3,240 3,240 3,060 3,240 3,240 3,240 3,060
Development Costs
Total Development Cost $ 5,368,713 $ 6,567,349 $ 7,116,169 $ 7,534,767 $ 7,534,767 $ 2,823,823 $ 2,989,931 $ 2,989,931 $ 2,823,823 $ 2,989,931 $ 2,989,931 $ 2,989,931 $ 2,823,823
Capital Development $ 3,884,860 $ 3,236,765 $ 2,669,726 $ 2,418,567 $ 611,618 $ 401,426 $ 944,966 $ 777,013 $ 582,298 $ 750,251 $ 1,264,261 $ 831,459 $ 1,130,452
Operating Development $ 1,483,853 $ 3,330,584 $ 4,446,443 $ 5,116,200 $ 6,923,149 $ 2,422,398 $ 2,044,965 $ 2,212,918 $ 2,241,525 $ 2,239,680 $ 1,725,670 $ 2,158,472 $ 1,693,371
Raises $ 823,230 $ 128,058 $ 634,192 $ ‐ $ 128,058 $ ‐ $ ‐ $ 128,058 $ ‐ $ 78,200 $ 128,058 $ ‐ $ 250,018
Main Zone HW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,272 2,862 3,151 3,437 2,686
FW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ 3,212 4,000 4,000 4,000 4,000 4,000 4,000 4,000
BHOS $ 1.95 ‐ ‐ 165 ‐ 736 ‐ 381 424 ‐ ‐ 135 247 995
Remnant BHOS $ 1.95 500 500 500 502 111 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC South $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day 500 500 665 502 847 3,212 4,381 4,424 7,272 6,862 7,286 7,684 7,681
Tonnes per Quarter 45,000 45,000 59,850 45,158 76,230 289,080 394,290 398,160 654,480 617,580 655,740 691,560 691,290
Production Metal Grades Cu (%) 0.50% 0.50% 0.68% 0.50% 1.12% 1.10% 1.11% 1.11% 1.08% 1.08% 1.09% 1.09% 1.10%
Ag (g/t) 6.2 6.2 6.7 6.2 8.0 11.1 10.9 10.9 9.6 9.7 9.6 9.5 9.6
Au (g/t) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Magnetite (kg/t) 2.0 2.0 5.2 2.0 13.0 8.3 8.8 8.9 8.5 8.5 8.6 8.7 9.3
Production Costs SLC Mining $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 187,902.00 $ 234,000.00 $ 234,000.00 $ 425,412.00 $ 401,427.00 $ 418,333.50 $ 435,064.50 $ 391,131.00
BHOS / AVOCA Mining $ 87,750 $ 87,750 $ 116,708 $ 88,059 $ 148,649 $ ‐ $ 66,866 $ 74,412 $ ‐ $ ‐ $ 23,693 $ 43,349 $ 174,623
Total Ore Production Per Quarter 45,000 81,852 133,554 155,714 223,637 436,487 541,697 545,567 765,035 764,987 766,295 765,264 764,994
Per Day 500.00 909.46 1,483.93 1,730.15 2,484.86 4,849.86 6,018.86 6,061.86 8,500.39 8,499.86 8,514.39 8,502.93 8,499.93
Metal Grades Cu 0.50% 0.92% 1.14% 1.19% 1.35% 1.22% 1.18% 1.17% 1.12% 1.13% 1.12% 1.11% 1.12%
Ag 6.16 8.90 10.01 10.63 10.86 11.53 11.19 11.16 9.92 10.15 9.87 9.66 9.72
Au 0.07 0.11 0.12 0.13 0.14 0.14 0.14 0.14 0.13 0.13 0.13 0.13 0.13
Magnetite 2.03 6.19 7.97 7.89 11.23 8.94 9.27 9.28 8.78 8.96 9.07 9.14 9.65
Waste Balance
Volumes
Development Waste (Broken) 93,572 102,673 114,752 73,296 50,084 49,846 51,870 50,084 77,520 53,701 73,885 99,443 105,010
Mined BHOS Stopes ‐ ‐ 4,950 ‐ 22,080 ‐ 11,430 12,720 ‐ ‐ 4,050 7,410 29,850
Development Waste Directly to Stopes as Backfill ‐ ‐ 4,950 ‐ 22,080 ‐ 11,430 12,720 ‐ ‐ 4,050 7,410 29,850
Development Waste to Surface Stockpile 93,572 102,673 109,802 73,296 28,004 49,846 40,440 37,364 77,520 53,701 69,835 92,033 75,160
Surface Waste to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90
Waste Development
Advance (m) 1,080 1,080 1,080 899 540 540 1,620 1,260 1,620 1,440 2,160 1,291 1,620
Tonnage (t) 91,802 94,364 91,802 80,397 47,700 46,664 137,702 107,102 137,702 122,402 183,603 109,737 137,702
Broken Volume (m^3) 34,001 34,950 34,001 29,777 17,667 17,283 51,001 39,667 51,001 45,334 68,001 40,643 51,001
Ore Development
Advance (m) 2,160 2,160 2,160 2,161 2,700 2,700 2,160 2,160 2,160 2,160 1,620 2,129 2,160
Tonnage (t) 147,407 147,407 147,407 147,475 184,259 184,259 147,407 147,407 147,407 147,407 110,555 145,291 147,407
Broken Volume (m^3) 49,136 49,136 49,136 49,158 61,420 61,420 49,136 49,136 49,136 49,136 36,852 48,430 49,136
All Development
Advance (m) 3,240 3,240 3,240 3,060 3,240 3,240 3,780 3,420 3,780 3,600 3,780 3,420 3,780
Tonnage (t) 239,209 241,771 239,209 227,872 231,959 230,923 285,109 254,509 285,109 269,809 294,158 255,028 285,109
Broken Volume (m^3) 83,136 84,085 83,136 78,935 79,086 78,703 100,137 88,803 100,137 94,470 104,853 89,074 100,137
Waste Development
Advance (m/d) 12 12 12 10 6 6 18 14 18 16 24 14 18
Tonnage (t/d) 1,020 1,048 1,020 893 530 518 1,530 1,190 1,530 1,360 2,040 1,219 1,530
Broken Volume (m^3/d) 378 388 378 331 196 192 567 441 567 504 756 452 567
Ore Development
Advance (m/d) 24 24 24 24 30 30 24 24 24 24 18 24 24
Tonnage (t/d) 1,638 1,638 1,638 1,639 2,047 2,047 1,638 1,638 1,638 1,638 1,228 1,614 1,638
Broken Volume (m^3/d) 546 546 546 546 682 682 546 546 546 546 409 538 546
Raises
Advance (m/d) ‐ ‐ 84 ‐ ‐ 84 ‐ ‐ 84 ‐ 307 230 115
Tonnage (t/d) ‐ ‐ 9,580 ‐ ‐ 9,580 ‐ ‐ 9,580 ‐ 15,803 10,514 7,440
Broken Volume (m^3/d) ‐ ‐ 3,548 ‐ ‐ 3,548 ‐ ‐ 3,548 ‐ 5,853 3,894 2,756
All Development
Advance (m/d) 36 36 36 34 36 36 42 38 42 40 42 38 42
Tonnage (t/d) 2,658 2,686 2,658 2,532 2,577 2,566 3,168 2,828 3,168 2,998 3,268 2,834 3,168
Broken Volume (m^3/d) 924 934 924 877 879 874 1,113 987 1,113 1,050 1,165 990 1,113
Ag 11.28 11.28 11.29 11.31 11.35 11.35 11.59 11.70 11.86 12.40 13.13 13.54 13.71
Au 0.15 0.15 0.15 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.17 0.17 0.17
Magnetite 13.39 13.39 13.65 14.13 14.49 14.49 14.93 15.06 15.15 14.79 13.69 12.42 11.96
Waste 2,117,305 2,211,670 2,313,051 2,393,448 2,441,148 2,497,392 2,635,095 2,742,196 2,889,479 3,011,881 3,211,287 3,331,537 3,476,679
Ore 1,474,070 1,621,477 1,768,884 1,916,360 2,100,619 2,284,877 2,432,284 2,579,691 2,727,098 2,874,506 2,985,061 3,130,352 3,277,759
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 3,240 3,240 3,240 3,060 3,240 3,240 3,780 3,420 3,780 3,600 3,780 3,420 3,780
Development Costs
Capital Development $ 711,493 $ 526,006 $ 498,322 $ 410,654 $ 75,671 $ 498,322 $ 1,014,177 $ 1,162,751 $ 934,815 $ 1,238,422 $ 1,272,566 $ 970,805 $ 1,176,593
Raises $ ‐ $ ‐ $ 256,116 $ ‐ $ ‐ $ 256,116 $ ‐ $ ‐ $ 256,116 $ ‐ $ 337,863 $ 211,850 $ 173,900
Main Zone HW SLC $ 0.65 1,862 1,862 1,776 1,867 2,453 1,043 1,939 2,764 2,998 3,000 3,000 3,000 3,000
FW SLC $ 0.65 5,000 5,000 3,645 4,051 4,000 5,410 4,020 3,235 3,864 3,862 4,272 3,886 2,502
BHOS $ 1.95 ‐ ‐ 1,439 424 ‐ ‐ 903 863 ‐ ‐ ‐ ‐ 1,360
Remnant BHOS $ 1.95 ‐ ‐ 2 519 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC South $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day 6,862 6,862 6,862 6,861 6,453 6,453 6,862 6,862 6,862 6,862 7,272 6,886 6,862
Ag (g/t) 10.2 10.2 9.6 9.6 9.8 10.6 9.8 9.4 9.6 9.6 9.7 9.6 9.1
Au (g/t) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Magnetite (kg/t) 8.4 8.4 9.8 8.3 8.5 8.4 9.3 9.3 8.5 8.5 8.5 8.5 9.8
Production Costs SLC Mining $ 401,427.00 $ 401,427.00 $ 317,128.50 $ 346,203.00 $ 377,500.50 $ 377,500.50 $ 348,601.50 $ 350,941.50 $ 401,427.00 $ 401,427.00 $ 425,412.00 $ 402,831.00 $ 321,867.00
BHOS / AVOCA Mining $ ‐ $ ‐ $ 252,896 $ 165,497 $ ‐ $ ‐ $ 158,477 $ 151,457 $ ‐ $ ‐ $ ‐ $ ‐ $ 238,680
Per Day 8,499.86 8,499.86 8,499.86 8,499.61 8,500.32 8,500.32 8,499.86 8,499.86 8,499.86 8,499.86 8,500.39 8,500.35 8,499.86
Metal Grades Cu 1.12% 1.12% 1.14% 1.09% 1.12% 1.13% 1.13% 1.13% 1.12% 1.12% 1.11% 1.13% 1.15%
Ag 10.40 10.40 9.96 9.96 10.18 10.76 10.13 9.82 10.05 10.15 10.20 10.37 9.95
Au 0.13 0.13 0.13 0.13 0.14 0.14 0.13 0.13 0.13 0.14 0.13 0.14 0.14
Magnetite 9.38 9.38 10.50 9.46 9.94 9.84 10.36 10.42 9.80 9.73 9.26 9.26 10.21
Waste Balance
Volumes
Mined BHOS Stopes ‐ ‐ 43,170 12,720 ‐ ‐ 27,090 25,890 ‐ ‐ ‐ ‐ 40,800
Development Waste Directly to Stopes as Backfill ‐ ‐ 43,170 12,720 ‐ ‐ 27,090 25,890 ‐ ‐ ‐ ‐ 40,800
Development Waste to Surface Stockpile 47,601 48,930 9,398 28,967 24,733 29,164 44,311 29,644 76,369 63,468 103,396 62,352 34,459
Surface Waste to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90
Waste Development
Advance (m) 1,284 1,440 1,440 900 1,800 1,260 1,980 1,080 2,100 1,080 942 896 360
Tonnage (t) 109,142 122,402 122,402 76,501 153,003 107,102 168,303 91,802 178,503 91,802 80,071 76,161 30,601
Broken Volume (m^3) 40,423 45,334 45,334 28,334 56,668 39,667 62,334 34,001 66,112 34,001 29,656 28,208 11,334
Ore Development
Advance (m) 2,136 2,160 2,340 2,700 1,620 2,160 1,620 2,700 1,140 2,160 2,298 1,401 1,620
Tonnage (t) 145,769 147,407 159,691 184,259 110,555 147,407 110,555 184,259 77,798 147,407 156,825 95,610 110,555
Broken Volume (m^3) 48,590 49,136 53,230 61,420 36,852 49,136 36,852 61,420 25,933 49,136 52,275 31,870 36,852
All Development
Advance (m) 3,420 3,600 3,780 3,600 3,420 3,420 3,600 3,780 3,240 3,240 3,240 2,297 1,980
Tonnage (t) 254,911 269,809 282,093 260,760 263,558 254,509 278,858 276,060 256,301 239,209 236,896 171,771 141,156
Broken Volume (m^3) 89,013 94,470 98,564 89,753 93,519 88,803 99,186 95,420 92,045 83,136 81,931 60,078 48,185
Waste Development
Advance (m/d) 14 16 16 10 20 14 22 12 23 12 10 10 4
Tonnage (t/d) 1,213 1,360 1,360 850 1,700 1,190 1,870 1,020 1,983 1,020 890 846 340
Broken Volume (m^3/d) 449 504 504 315 630 441 693 378 735 378 330 313 126
Ore Development
Advance (m/d) 24 24 26 30 18 24 18 30 13 24 26 16 18
Tonnage (t/d) 1,620 1,638 1,774 2,047 1,228 1,638 1,228 2,047 864 1,638 1,742 1,062 1,228
Broken Volume (m^3/d) 540 546 591 682 409 546 409 682 288 546 581 354 409
Raises
Advance (m/d) 90 198 252 50 50 50 270 135 ‐ ‐ ‐ 256 155
Tonnage (t/d) 8,672 22,582 19,921 5,702 5,702 5,702 9,400 3,609 ‐ ‐ ‐ 29,196 17,677
Broken Volume (m^3/d) 3,212 8,364 7,378 2,112 2,112 2,112 3,482 1,337 ‐ ‐ ‐ 10,813 6,547
All Development
Advance (m/d) 38 40 42 40 38 38 40 42 36 36 36 26 22
Tonnage (t/d) 2,832 2,998 3,134 2,897 2,928 2,828 3,098 3,067 2,848 2,658 2,632 1,909 1,568
Broken Volume (m^3/d) 989 1,050 1,095 997 1,039 987 1,102 1,060 1,023 924 910 668 535
Ag 14.27 11.95 11.94 9.94 10.06 11.21 7.69 10.51 9.95 9.41 8.17 5.57 4.59
Au 0.17 0.17 0.17 0.18 0.18 0.18 0.20 0.19 0.20 0.18 0.18 0.20 0.19
Magnetite 10.29 7.20 6.90 5.09 5.08 4.93 2.10 3.78 3.42 2.73 2.00 0.42 ‐
Waste 3,594,493 3,739,477 3,881,800 3,964,004 4,122,709 4,235,513 4,413,216 4,508,626 4,687,129 4,778,930 4,859,001 4,964,359 5,012,637
Ore 3,423,529 3,570,936 3,730,627 3,914,885 4,025,441 4,172,848 4,283,403 4,467,662 4,545,460 4,692,867 4,849,692 4,945,301 5,055,857
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 3,420 3,600 3,780 3,600 3,420 3,420 3,600 3,780 3,240 3,240 3,240 2,297 1,980
Development Costs
Capital Development $ 1,052,013 $ 1,102,768 $ 1,191,358 $ 747,483 $ 1,520,804 $ 1,033,556 $ 1,553,103 $ 675,503 $ 1,590,938 $ 506,627 $ 663,506 $ 312,835 $ 332,215
Raises $ 189,250 $ 603,702 $ 493,729 $ 152,450 $ 152,450 $ 152,450 $ 157,075 $ 44,550 $ ‐ $ ‐ $ ‐ $ 780,544 $ 472,595
Main Zone HW SLC $ 0.65 1,647 1,493 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
FW SLC $ 0.65 4,402 4,324 5,123 3,453 3,683 3,228 3,272 4,000 3,767 4,000 4,000 4,000 4,000
BHOS $ 1.95 831 1,045 1,603 3,000 3,000 3,000 3,000 2,000 2,000 1,497 ‐ ‐ ‐
Remnant BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ 589 634 1,000 453 1,869 1,365 1,758 1,438 1,272
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC South $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,000 2,000 2,000
All Production Tonnes per Day 6,880 6,862 6,726 6,453 7,272 6,862 7,272 6,453 7,636 6,862 6,758 7,438 7,272
Ag (g/t) 10.0 9.9 10.5 9.8 9.4 9.3 9.1 9.8 8.8 9.3 8.5 8.1 8.1
Au (g/t) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.2 0.2 0.2
Magnetite (kg/t) 9.2 9.4 9.8 11.2 10.2 10.3 9.8 9.7 7.9 8.0 4.9 4.4 4.5
Production Costs SLC Mining $ 353,866.50 $ 340,294.50 $ 299,695.50 $ 202,000.50 $ 215,455.50 $ 188,838.00 $ 191,412.00 $ 234,000.00 $ 220,369.50 $ 234,000.00 $ 292,500.00 $ 351,000.00 $ 351,000.00
BHOS / AVOCA Mining $ 145,841 $ 183,398 $ 281,327 $ 526,500 $ 629,870 $ 637,767 $ 702,000 $ 430,502 $ 679,010 $ 502,281 $ 308,529 $ 252,369 $ 223,236
Per Day 8,499.66 8,499.86 8,500.34 8,500.32 8,500.39 8,499.86 8,500.39 8,500.32 8,500.42 8,499.86 8,500.50 8,500.33 8,500.39
Metal Grades Cu 1.16% 1.16% 1.18% 1.21% 1.19% 1.22% 1.20% 1.23% 1.18% 1.20% 1.18% 1.14% 1.13%
Ag 10.78 10.33 10.76 9.84 9.54 9.67 8.89 9.98 8.96 9.29 8.41 7.75 7.62
Au 0.14 0.14 0.14 0.14 0.14 0.15 0.15 0.15 0.16 0.15 0.18 0.19 0.19
Magnetite 9.39 8.95 9.18 9.75 9.48 9.26 8.65 8.24 7.45 6.99 4.30 3.94 3.89
Waste Balance
Volumes
Mined BHOS Stopes 24,930 31,350 48,090 90,000 107,670 109,020 120,000 73,590 116,070 85,860 52,740 43,140 38,160
Development Waste Directly to Stopes as Backfill 24,930 31,350 48,090 42,624 82,291 58,491 92,142 49,472 92,557 47,601 41,518 43,140 25,033
Development Waste to Surface Stockpile 36,159 43,827 25,707 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 11,490 ‐
Surface Waste to Stopes as Backfill ‐ ‐ ‐ 47,376 25,379 50,529 27,858 24,118 23,513 38,259 11,222 ‐ 13,127
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90 90
Year/Q 2026Q3 2026Q4 2027Q1 2027Q2 2027Q3 2027Q4 2028Q1 2028Q2 2028Q3 2028Q4 2029Q1 2029Q2 2029Q3 2029Q4
Mine Schedule Period Data Mine D Q 43 44 45 46 47 48 49 50 51 52 53 54 55 56
Development Schedule Summary Abs Q 55 56 57 58 59 60 61 62 63 64 65 66 67 68
Waste Development
Advance (m) 1,440 831 587 900 782 ‐ 447 536 ‐ ‐ ‐ ‐ ‐ ‐
Tonnage (t) 122,402 70,636 49,896 76,501 66,471 ‐ 37,996 45,561 ‐ ‐ ‐ ‐ ‐ ‐
Broken Volume (m^3) 45,334 26,162 18,480 28,334 24,619 ‐ 14,072 16,874 ‐ ‐ ‐ ‐ ‐ ‐
Ore Development
Advance (m) ‐ 789 1,033 540 658 1,080 453 544 540 540 488 ‐ ‐ ‐
Tonnage (t) ‐ 53,845 70,496 36,852 44,905 73,704 30,915 37,125 36,852 36,852 33,303 ‐ ‐ ‐
Broken Volume (m^3) ‐ 17,948 23,499 12,284 14,968 24,568 10,305 12,375 12,284 12,284 11,101 ‐ ‐ ‐
All Development
Advance (m) 1,440 1,620 1,620 1,440 1,440 1,080 900 1,080 540 540 488 ‐ ‐ ‐
Tonnage (t) 122,402 124,481 120,392 113,353 111,376 73,704 68,910 82,685 36,852 36,852 33,303 ‐ ‐ ‐
Broken Volume (m^3) 45,334 44,110 41,979 40,618 39,587 24,568 24,377 29,249 12,284 12,284 11,101 ‐ ‐ ‐
Waste Development
Advance (m/d) 16 9 7 10 9 ‐ 5 6 ‐ ‐ ‐ ‐ ‐ ‐
Tonnage (t/d) 1,360 785 554 850 739 ‐ 422 506 ‐ ‐ ‐ ‐ ‐ ‐
Broken Volume (m^3/d) 504 291 205 315 274 ‐ 156 187 ‐ ‐ ‐ ‐ ‐ ‐
Ore Development
Advance (m/d) ‐ 9 11 6 7 12 5 6 6 6 5 ‐ ‐ ‐
Tonnage (t/d) ‐ 598 783 409 499 819 343 412 409 409 370 ‐ ‐ ‐
Broken Volume (m^3/d) ‐ 199 261 136 166 273 114 137 136 136 123 ‐ ‐ ‐
Raises
Advance (m/d) ‐ ‐ 256 197 256 ‐ ‐ 526 270 60 ‐ ‐ ‐ ‐
Tonnage (t/d) ‐ ‐ 29,196 18,800 6,843 ‐ ‐ 37,636 30,793 6,843 ‐ ‐ ‐ ‐
Broken Volume (m^3/d) ‐ ‐ 10,813 6,963 2,534 ‐ ‐ 13,939 11,405 2,534 ‐ ‐ ‐ ‐
All Development
Advance (m/d) 16 18 18 16 16 12 10 12 6 6 5 ‐ ‐ ‐
Tonnage (t/d) 1,360 1,383 1,338 1,259 1,238 819 766 919 409 409 370 ‐ ‐ ‐
Broken Volume (m^3/d) 504 490 466 451 440 273 271 325 136 136 123 ‐ ‐ ‐
Development Metal Grades Cu 0.00% 1.17% 1.21% 1.24% 1.25% 1.37% 1.45% 1.50% 1.51% 1.50% 1.45% 0.00% 0.00% 0.00%
Ag ‐ 4.56 4.25 3.73 3.77 3.94 3.76 3.55 3.55 3.48 3.36 ‐ ‐ ‐
Au ‐ 0.14 0.15 0.15 0.14 0.16 0.17 0.17 0.17 0.17 0.18 ‐ ‐ ‐
Magnetite ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Waste 5,135,039 5,205,675 5,284,767 5,380,069 5,453,382 5,453,382 5,491,378 5,574,575 5,605,368 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211
Ore 5,055,857 5,109,701 5,180,197 5,217,049 5,261,954 5,335,657 5,366,572 5,403,696 5,440,548 5,477,400 5,510,703 5,510,703 5,510,703 5,510,703
Capital / Operating Split (% Capital Devt/ Total Devt) 90% 7% 28% 45% 44% 0% 47% 41% 0% 0% 0% 0% 0% 0%
Contractor Devt Split (% Contractor/Total Crews) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 1,440 1,620 1,620 1,440 1,440 1,080 900 1,080 540 540 488 ‐ ‐ ‐
Development Costs
Total Development Cost $ 1,328,858 $ 1,494,965 $ 1,494,965 $ 1,328,858 $ 1,328,858 $ 996,644 $ 830,536 $ 996,644 $ 498,322 $ 498,322 $ 450,335 $ ‐ $ ‐ $ ‐
Capital Development $ 1,196,895 $ 111,661 $ 411,577 $ 599,832 $ 585,067 $ ‐ $ 394,043 $ 405,117 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Operating Development $ 131,963 $ 1,383,304 $ 1,083,388 $ 729,026 $ 743,791 $ 996,644 $ 436,493 $ 591,526 $ 498,322 $ 498,322 $ 450,335 $ ‐ $ ‐ $ ‐
Raises $ ‐ $ ‐ $ 780,544 $ 486,455 $ 84,480 $ ‐ $ ‐ $ 907,710 $ 823,230 $ 182,940 $ ‐ $ ‐ $ ‐ $ ‐
Main Zone HW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
FW SLC $ 0.65 4,000 4,000 4,000 4,000 4,000 4,000 4,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Remnant BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 981 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 278 ‐ 795 ‐ ‐ ‐ 187 179 ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 1,241 1,274 1,176 1,270 1,448 1,690 1,414 1,200 1,200 1,200 1,000 1,200 1,200 1,200
SLC South $ 0.65 ‐ 628 704 1,449 1,853 1,291 1,556 2,191 1,938 2,000 2,000 2,000 2,000 2,000
SLC North $ 0.65 2,000 2,000 1,042 1,372 700 700 1,000 1,000 309 ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day 8,500 7,902 7,717 8,091 8,001 7,681 8,157 7,570 6,447 6,200 6,000 6,200 6,200 6,200
Tonnes per Quarter 765,000 711,180 694,530 728,190 720,090 691,290 734,130 681,300 580,230 558,000 540,000 558,000 558,000 558,000
Production Metal Grades Cu (%) 1.13% 1.14% 1.14% 1.16% 1.17% 1.17% 1.16% 1.18% 1.19% 1.19% 1.19% 1.19% 1.19% 1.19%
Ag (g/t) 7.5 7.6 7.8 7.5 7.6 7.7 7.5 6.9 7.3 7.4 7.5 7.4 7.4 7.4
Au (g/t) 0.2 0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1
Magnetite (kg/t) 3.9 4.2 4.3 4.1 4.1 4.3 4.1 3.3 3.8 4.0 4.1 4.0 4.0 4.0
Production Costs SLC Mining $ 351,000.00 $ 387,738.00 $ 336,141.00 $ 399,028.50 $ 383,350.50 $ 350,473.50 $ 383,526.00 $ 362,173.50 $ 306,949.50 $ 292,500.00 $ 292,500.00 $ 292,500.00 $ 292,500.00 $ 292,500.00
BHOS / AVOCA Mining $ 438,750 $ 223,587 $ 345,911 $ 222,885 $ 254,124 $ 296,595 $ 280,976 $ 242,015 $ 210,600 $ 210,600 $ 175,500 $ 210,600 $ 210,600 $ 210,600
Total Ore Production Per Quarter 765,000 765,025 765,026 765,042 764,995 764,994 765,045 718,425 617,082 594,852 573,303 558,000 558,000 558,000
Per Day 8,500.00 8,500.27 8,500.29 8,500.46 8,499.94 8,499.93 8,500.49 7,982.50 6,856.46 6,609.46 6,370.03 6,200.00 6,200.00 6,200.00
Metal Grades Cu 1.13% 1.15% 1.14% 1.16% 1.18% 1.19% 1.18% 1.20% 1.21% 1.21% 1.20% 1.19% 1.19% 1.19%
Ag 7.49 7.42 7.43 7.35 7.33 7.33 7.36 6.68 7.08 7.18 7.30 7.42 7.42 7.42
Au 0.18 0.17 0.16 0.16 0.15 0.15 0.15 0.16 0.15 0.14 0.14 0.14 0.14 0.14
Magnetite 3.89 3.89 3.89 3.89 3.89 3.89 3.89 3.10 3.61 3.75 3.89 4.00 4.00 4.00
Waste Balance
Volumes
Development Waste (Broken) 63,468 36,626 41,011 49,416 38,015 ‐ 19,701 43,139 15,967 3,548 ‐ ‐ ‐ ‐
Mined BHOS Stopes 75,000 38,220 59,130 38,100 43,440 50,700 48,030 41,370 36,000 36,000 30,000 36,000 36,000 36,000
Development Waste Directly to Stopes as Backfill 63,468 36,626 41,011 38,100 38,015 ‐ 19,701 41,370 15,967 3,548 ‐ ‐ ‐ ‐
Development Waste to Surface Stockpile ‐ ‐ ‐ 11,316 ‐ ‐ ‐ 1,769 ‐ ‐ ‐ ‐ ‐ ‐
Surface Waste to Stopes as Backfill 11,532 1,594 18,119 ‐ 5,425 50,700 28,329 ‐ 20,033 32,452 30,000 36,000 36,000 36,000
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90
Year/Q 2030Q1 2030Q2 2030Q3 2030Q4 2031Q1 2031Q2 2031Q3 2031Q4 2032Q1 2032Q2 2032Q3 2032Q4 2033Q1 2033Q2 2033Q3 2033Q4 2034Q1 2034Q2
Mine Schedule Period Data Mine D Q 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74
Development Schedule Summary Abs Q 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
Waste Development
Advance (m) ‐ ‐ ‐
Tonnage (t) ‐ ‐ ‐
Broken Volume (m^3) ‐ ‐ ‐
Ore Development
All Development
Waste Development
Advance (m/d) ‐ ‐ ‐
Tonnage (t/d) ‐ ‐ ‐
Broken Volume (m^3/d) ‐ ‐ ‐
Ore Development
Raises
All Development
Development Metal Grades Cu 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ag ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Au ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Magnetite ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Waste 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211
Ore 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703
Capital / Operating Split (% Capital Devt/ Total Devt) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Contractor Devt Split (% Contractor/Total Crews) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Costs
Total Development Cost $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Capital Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Operating Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Raises $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Main Zone HW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
FW SLC $ 0.65 3,000 3,000 3,000 3,000 3,000 2,000 2,000 2,000 2,000 2,000 1,000 1,000 ‐ ‐ ‐ ‐ ‐ ‐
BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Remnant BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 80 ‐
SLC South $ 0.65 2,000 1,990 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 215 ‐ ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day 6,200 6,190 5,200 5,200 5,200 4,200 4,200 4,200 4,200 4,200 2,415 2,200 1,200 1,200 1,200 1,200 80 ‐
Tonnes per Quarter 558,000 557,100 468,000 468,000 468,000 378,000 378,000 378,000 378,000 378,000 217,350 198,000 108,000 108,000 108,000 108,000 7,200 ‐
Production Metal Grades Cu (%) 1.19% 1.19% 1.17% 1.17% 1.17% 1.19% 1.19% 1.19% 1.19% 1.19% 1.20% 1.19% 1.26% 1.26% 1.26% 1.26% 1.26% 0.00%
Ag (g/t) 7.4 7.4 8.1 8.1 8.1 7.3 7.3 7.3 7.3 7.3 6.8 7.1 3.7 3.7 3.7 3.7 3.7 ‐
Au (g/t) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 ‐
Magnetite (kg/t) 4.0 4.0 4.8 4.8 4.8 3.9 3.9 3.9 3.9 3.9 3.4 3.8 ‐ ‐ ‐ ‐ ‐ ‐
Production Costs SLC Mining $ 292,500.00 $ 291,915.00 $ 234,000.00 $ 234,000.00 $ 234,000.00 $ 175,500.00 $ 175,500.00 $ 175,500.00 $ 175,500.00 $ 175,500.00 $ 71,077.50 $ 58,500.00 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
BHOS / AVOCA Mining $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 210,600 $ 14,040 $ ‐
Total Ore Production Per Quarter 558,000 557,100 468,000 468,000 468,000 378,000 378,000 378,000 378,000 378,000 217,350 198,000 108,000 108,000 108,000 108,000 7,200 ‐
Per Day 6,200.00 6,190.00 5,200.00 5,200.00 5,200.00 4,200.00 4,200.00 4,200.00 4,200.00 4,200.00 2,415.00 2,200.00 1,200.00 1,200.00 1,200.00 1,200.00 80.00 ‐
Metal Grades Cu 1.19% 1.19% 1.17% 1.17% 1.17% 1.19% 1.19% 1.19% 1.19% 1.19% 1.20% 1.19% 1.26% 1.26% 1.26% 1.26% 1.26% 0.00%
Ag 7.42 7.43 8.07 8.07 8.07 7.34 7.34 7.34 7.34 7.34 6.82 7.09 3.72 3.72 3.72 3.72 3.72 ‐
Au 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.15 0.15 0.15 0.15 0.15 ‐
Magnetite 4.00 4.00 4.77 4.77 4.77 3.93 3.93 3.93 3.93 3.93 3.42 3.75 ‐ ‐ ‐ ‐ ‐ ‐
Waste Balance
Volumes
Development Waste (Broken) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Mined BHOS Stopes 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 2,400 ‐
Development Waste Directly to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Development Waste to Surface Stockpile ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Surface Waste to Stopes as Backfill 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 2,400 ‐
Doc ID 1256370100‐CAL‐R0003‐00
Revision 0
Project Granduc PEA
Work By G.Liukko
Date 28‐Feb‐13
Days 90 90 90 90 90 90
Year/Q 2034Q3 2034Q4 2035Q1 2035Q2 2035Q3 2035Q4
Mine Schedule Period Data Mine D Q 75 76 77 78 79 80
Development Schedule Summary Abs Q 87 88 89 90 91 92
Waste Development
Advance (m)
Tonnage (t)
Broken Volume (m^3)
Ore Development
Advance (m)
Tonnage (t)
Broken Volume (m^3)
All Development
Advance (m)
Tonnage (t)
Broken Volume (m^3)
Waste Development
Advance (m/d)
Tonnage (t/d)
Broken Volume (m^3/d)
Ore Development
Advance (m/d)
Tonnage (t/d)
Raises
Advance (m/d)
Tonnage (t/d)
All Development
Advance (m/d)
Tonnage (t/d)
Development Metal Grades Cu 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ag ‐ ‐ ‐ ‐ ‐ ‐
Au ‐ ‐ ‐ ‐ ‐ ‐
Magnetite ‐ ‐ ‐ ‐ ‐ ‐
Waste 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211 5,612,211
Ore 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703 5,510,703
Capital / Operating Split (% Capital Devt/ Total Devt) 0% 0% 0% 0% 0% 0%
Contractor Devt Split (% Contractor/Total Crews) 0% 0% 0% 0% 0% 0%
Contractor Advance All In Cost $ 5,131 ‐ ‐ ‐ ‐ ‐ ‐
Company Advance Direct Mining Cost Only $ 922.82 ‐ ‐ ‐ ‐ ‐ ‐
Development Costs
Total Development Cost $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Capital Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Operating Development $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Raises $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Main Zone HW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐
FW SLC $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐
BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐
Remnant BHOS $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐
North Zone BHOS Central $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐
BHOS North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐
AVOCA North $ 1.95 ‐ ‐ ‐ ‐ ‐ ‐
SLC South $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐
SLC North $ 0.65 ‐ ‐ ‐ ‐ ‐ ‐
All Production Tonnes per Day ‐ ‐ ‐ ‐ ‐ ‐
Tonnes per Quarter ‐ ‐ ‐ ‐ ‐ ‐
Production Metal Grades Cu (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ag (g/t) ‐ ‐ ‐ ‐ ‐ ‐
Au (g/t) ‐ ‐ ‐ ‐ ‐ ‐
Magnetite (kg/t) ‐ ‐ ‐ ‐ ‐ ‐
Production Costs SLC Mining $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐

BHOS / AVOCA Mining $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Total Ore Production Per Quarter ‐ ‐ ‐ ‐ ‐ ‐
Per Day ‐ ‐ ‐ ‐ ‐ ‐
Metal Grades Cu 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ag ‐ ‐ ‐ ‐ ‐ ‐
Au ‐ ‐ ‐ ‐ ‐ ‐
Magnetite ‐ ‐ ‐ ‐ ‐ ‐
Waste Balance
Volumes
Development Waste (Broken) ‐ ‐ ‐ ‐ ‐ ‐
Mined BHOS Stopes ‐ ‐ ‐ ‐ ‐ ‐
Development Waste Directly to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐
Development Waste to Surface Stockpile ‐ ‐ ‐ ‐ ‐ ‐
Surface Waste to Stopes as Backfill ‐ ‐ ‐ ‐ ‐ ‐
Doc ID
Revision Development Unit Rates
Client Castle Resources Inc. Company $ 3,500
Project Granduc PEA Contractor $ 5,200
Work By G.Liukko Mining Parameters
Date Swell Factor 40%
Main Zone Development Schedule
Level Elevation Heading Dimensions Length Area Volume Overbreak Area Insitu Vol. Ore? S.G. Tonnage Broken Vol. t/m Adv. Rate
Width (m) Height (m) (m) (m^2) (m^3) (%) (m^2) (m^3) (1/0) (t/m^3) (t) (m^3) (m/day)
830 Ramp 8.7 5.4 ‐ 47.0 ‐ 10% 52 ‐ ‐ 2.7 ‐ ‐ ‐ 4
Ramp Access 8.7 5.4 47 47.0 2,219 10% 52 2,441 ‐ 2.7 6,592 3,418 140 4
FW Accesses 5.3 5.4 53 28.6 1,503 10% 31 1,653 ‐ 2.7 4,463 2,314 85 4
Cross Cuts 5.3 5.4 21 28.6 588 10% 31 647 ‐ 2.7 1,747 906 85 4
Raise Accesses 5.3 5.4 19 28.6 544 10% 31 598 ‐ 2.7 1,615 837 85 6
Sills 4.7 4.4 217 20.7 4,494 10% 23 4,943 1 3.0 14,830 6,921 68 6
810 Ramp 8.7 5.4 159 47.0 7,464 10% 52 8,210 ‐ 2.7 22,168 11,494 140 4
Ramp Access 8.7 5.4 47 47.0 2,227 10% 52 2,450 ‐ 2.7 6,614 3,430 140 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 4
Cross Cuts 5.3 5.4 28 28.6 795 10% 31 875 ‐ 2.7 2,361 1,224 85 4
Raise Accesses 5.3 5.4 16 28.6 458 10% 31 504 ‐ 2.7 1,360 705 85 6
Sills 4.7 4.4 277 20.7 5,725 10% 23 6,298 1 3.0 18,894 8,817 68 6
790 Ramp 8.7 5.4 77 47.0 3,612 10% 52 3,973 ‐ 2.7 10,727 5,562 140 4
Ramp Access 8.7 5.4 47 47.0 2,227 10% 52 2,450 ‐ 2.7 6,614 3,430 140 4
FW Accesses 5.3 5.4 224 28.6 6,410 10% 31 7,051 ‐ 2.7 19,038 9,872 85 6
Cross Cuts 5.3 5.4 206 28.6 5,907 10% 31 6,497 ‐ 2.7 17,543 9,096 85 4
Raise Accesses 5.3 5.4 24 28.6 679 10% 31 747 ‐ 2.7 2,018 1,046 85 6
Sills 4.7 4.4 349 20.7 7,218 10% 23 7,940 1 3.0 23,820 11,116 68 6
770 Ramp 8.7 5.4 139 47.0 6,523 10% 52 7,175 ‐ 2.7 19,372 10,045 140 4
Ramp Access 8.7 5.4 104 47.0 4,866 10% 52 5,353 ‐ 2.7 14,453 7,494 140 4
FW Accesses 5.3 5.4 453 28.6 12,977 10% 31 14,275 ‐ 2.7 38,542 19,985 85 6
Cross Cuts 5.3 5.4 523 28.6 14,968 10% 31 16,465 ‐ 2.7 44,456 23,051 85 6
Raise Accesses 5.3 5.4 54 28.6 1,559 10% 31 1,715 ‐ 2.7 4,632 2,402 85 6
Sills 4.7 4.4 2,157 20.7 44,613 10% 23 49,074 1 3.0 147,221 68,703 68 6
750 Ramp 8.7 5.4 152 47.0 7,138 10% 52 7,851 ‐ 2.7 21,199 10,992 140 4
Ramp Access 8.7 5.4 75 47.0 3,505 10% 52 3,855 ‐ 2.7 10,410 5,398 140 4
FW Accesses 5.3 5.4 89 28.6 2,543 10% 31 2,798 ‐ 2.7 7,554 3,917 85 6
Cross Cuts 5.3 5.4 527 28.6 15,081 10% 31 16,590 ‐ 2.7 44,792 23,225 85 6
Raise Accesses 5.3 5.4 88 28.6 2,527 10% 31 2,780 ‐ 2.7 7,505 3,892 85 6
Sills 4.7 4.4 2,181 20.7 45,098 10% 23 49,608 1 3.0 148,824 69,451 68 6
730 Ramp 8.7 5.4 153 47.0 7,192 10% 52 7,911 ‐ 2.7 21,361 11,076 140 4
Ramp Access 8.7 5.4 47 47.0 2,215 10% 52 2,437 ‐ 2.7 6,579 3,411 140 4
FW Accesses 5.3 5.4 342 28.6 9,796 10% 31 10,776 ‐ 2.7 29,094 15,086 85 6
Cross Cuts 5.3 5.4 594 28.6 16,994 10% 31 18,693 ‐ 2.7 50,472 26,170 85 6
Raise Accesses 5.3 5.4 114 28.6 3,275 10% 31 3,603 ‐ 2.7 9,728 5,044 85 6
Sills 4.7 4.4 2,006 20.7 41,490 10% 23 45,639 1 3.0 136,918 63,895 68 6
710 Ramp 8.7 5.4 144 47.0 6,784 10% 52 7,462 ‐ 2.7 20,147 10,447 140 4
Ramp Access 8.7 5.4 50 47.0 2,349 10% 52 2,584 ‐ 2.7 6,977 3,617 140 4
FW Accesses 5.3 5.4 404 28.6 11,552 10% 31 12,707 ‐ 2.7 34,310 17,790 85 6
Cross Cuts 5.3 5.4 481 28.6 13,766 10% 31 15,143 ‐ 2.7 40,886 21,200 85 6
Raise Accesses 5.3 5.4 59 28.6 1,695 10% 31 1,864 ‐ 2.7 5,034 2,610 85 6
Sills 4.7 4.4 2,359 20.7 48,786 10% 23 53,665 1 3.0 160,994 75,130 68 6
690 Ramp 8.7 5.4 139 47.0 6,527 10% 52 7,180 ‐ 2.7 19,386 10,052 140 4
Ramp Access 8.7 5.4 106 47.0 4,973 10% 52 5,470 ‐ 2.7 14,769 7,658 140 4
FW Accesses 5.3 5.4 389 28.6 11,128 10% 31 12,240 ‐ 2.7 33,049 17,137 85 6
Cross Cuts 5.3 5.4 522 28.6 14,945 10% 31 16,440 ‐ 2.7 44,387 23,015 85 6
Raise Accesses 5.3 5.4 42 28.6 1,195 10% 31 1,314 ‐ 2.7 3,549 1,840 85 6
Sills 4.7 4.4 2,175 20.7 44,982 10% 23 49,480 1 3.0 148,441 69,272 68 6
670 Ramp 8.7 5.4 153 47.0 7,203 10% 52 7,923 ‐ 2.7 21,392 11,092 140 4
Ramp Access 8.7 5.4 91 47.0 4,258 10% 52 4,684 ‐ 2.7 12,647 6,558 140 4
FW Accesses 5.3 5.4 566 28.6 16,211 10% 31 17,832 ‐ 2.7 48,147 24,965 85 6
Cross Cuts 5.3 5.4 566 28.6 16,186 10% 31 17,805 ‐ 2.7 48,073 24,927 85 6
Raise Accesses 5.3 5.4 33 28.6 944 10% 31 1,039 ‐ 2.7 2,805 1,454 85 6
Sills 4.7 4.4 2,228 20.7 46,080 10% 23 50,688 1 3.0 152,063 70,963 68 6
650 Ramp 8.7 5.4 154 47.0 7,217 10% 52 7,939 ‐ 2.7 21,435 11,114 140 4
Ramp Access 8.7 5.4 47 47.0 2,216 10% 52 2,438 ‐ 2.7 6,582 3,413 140 4
FW Accesses 5.3 5.4 616 28.6 17,628 10% 31 19,391 ‐ 2.7 52,356 27,148 85 6
Cross Cuts 5.3 5.4 673 28.6 19,260 10% 31 21,186 ‐ 2.7 57,202 29,660 85 6
Raise Accesses 5.3 5.4 16 28.6 459 10% 31 505 ‐ 2.7 1,365 708 85 6
Sills 4.7 4.4 2,424 20.7 50,130 10% 23 55,143 1 3.0 165,430 77,201 68 6
630 Ramp 8.7 5.4 144 47.0 6,784 10% 52 7,462 ‐ 2.7 20,147 10,447 140 4
Ramp Access 8.7 5.4 47 47.0 2,230 10% 52 2,454 ‐ 2.7 6,625 3,435 140 4
FW Accesses 5.3 5.4 849 28.6 24,288 10% 31 26,717 ‐ 2.7 72,136 37,404 85 6
Cross Cuts 5.3 5.4 760 28.6 21,757 10% 31 23,933 ‐ 2.7 64,619 33,506 85 6
Raise Accesses 5.3 5.4 62 28.6 1,787 10% 31 1,965 ‐ 2.7 5,306 2,751 85 6
Sills 4.7 4.4 2,964 20.7 61,295 10% 23 67,424 1 3.0 202,272 94,394 68 6
610 Ramp 8.7 5.4 139 47.0 6,543 10% 52 7,197 ‐ 2.7 19,432 10,076 140 4
Ramp Access 8.7 5.4 104 47.0 4,902 10% 52 5,392 ‐ 2.7 14,559 7,549 140 4
FW Accesses 5.3 5.4 850 28.6 24,336 10% 31 26,770 ‐ 2.7 72,278 37,477 85 6
Cross Cuts 5.3 5.4 505 28.6 14,445 10% 31 15,890 ‐ 2.7 42,902 22,246 85 6
Raise Accesses 5.3 5.4 46 28.6 1,310 10% 31 1,441 ‐ 2.7 3,891 2,017 85 6
Sills 4.7 4.4 3,226 20.7 66,721 10% 23 73,393 1 3.0 220,179 102,750 68 6
590 Ramp 8.7 5.4 154 47.0 7,233 10% 52 7,956 ‐ 2.7 21,481 11,138 140 4
Ramp Access 8.7 5.4 95 47.0 4,463 10% 52 4,909 ‐ 2.7 13,255 6,873 140 4
FW Accesses 5.3 5.4 846 28.6 24,215 10% 31 26,636 ‐ 2.7 71,918 37,291 85 6
Cross Cuts 5.3 5.4 864 28.6 24,741 10% 31 27,215 ‐ 2.7 73,481 38,101 85 6
Raise Accesses 5.3 5.4 83 28.6 2,372 10% 31 2,610 ‐ 2.7 7,046 3,654 85 6
Sills 4.7 4.4 3,327 20.7 68,812 10% 23 75,693 1 3.0 227,080 105,971 68 6
570 Ramp 8.7 5.4 154 47.0 7,224 10% 52 7,947 ‐ 2.7 21,456 11,125 140 4
Ramp Access 8.7 5.4 48 47.0 2,237 10% 52 2,461 ‐ 2.7 6,643 3,445 140 4
FW Accesses 5.3 5.4 866 28.6 24,779 10% 31 27,257 ‐ 2.7 73,594 38,160 85 6
Cross Cuts 5.3 5.4 712 28.6 20,384 10% 31 22,423 ‐ 2.7 60,542 31,392 85 6
Raise Accesses 5.3 5.4 29 28.6 826 10% 31 908 ‐ 2.7 2,453 1,272 85 6
Sills 4.7 4.4 3,324 20.7 68,745 10% 23 75,620 1 3.0 226,859 105,868 68 6
550 Ramp 8.7 5.4 144 47.0 6,784 10% 52 7,462 ‐ 2.7 20,147 10,447 140 4
Ramp Access 8.7 5.4 ‐ 47.0 ‐ 10% 52 ‐ ‐ 2.7 ‐ ‐ ‐ 4
FW Accesses 5.3 5.4 901 28.6 25,781 10% 31 28,359 ‐ 2.7 76,571 39,703 85 6
Cross Cuts 5.3 5.4 726 28.6 20,775 10% 31 22,852 ‐ 2.7 61,700 31,993 85 6
Raise Accesses 5.3 5.4 49 28.6 1,404 10% 31 1,544 ‐ 2.7 4,168 2,161 85 6
Sills 4.7 4.4 3,306 20.7 68,374 10% 23 75,211 1 3.0 225,633 105,295 68 6
530 Ramp 8.7 5.4 132 47.0 6,185 10% 52 6,804 ‐ 2.7 18,371 9,526 140 4
Ramp Access 8.7 5.4 150 47.0 7,049 10% 52 7,754 ‐ 2.7 20,937 10,856 140 4
FW Accesses 5.3 5.4 912 28.6 26,106 10% 31 28,716 ‐ 2.7 77,534 40,203 85 6
Cross Cuts 5.3 5.4 760 28.6 21,758 10% 31 23,934 ‐ 2.7 64,621 33,507 85 6
Raise Accesses 5.3 5.4 37 28.6 1,051 10% 31 1,156 ‐ 2.7 3,120 1,618 85 6
Sills 4.7 4.4 3,337 20.7 69,005 10% 23 75,906 1 3.0 227,718 106,268 68 6
510 Ramp 8.7 5.4 152 47.0 7,144 10% 52 7,858 ‐ 2.7 21,216 11,001 140 4
Ramp Access 8.7 5.4 96 47.0 4,506 10% 52 4,957 ‐ 2.7 13,383 6,939 140 4
FW Accesses 5.3 5.4 914 28.6 26,166 10% 31 28,782 ‐ 2.7 77,713 40,295 85 6
Cross Cuts 5.3 5.4 832 28.6 23,821 10% 31 26,203 ‐ 2.7 70,748 36,684 85 6
Raise Accesses 5.3 5.4 64 28.6 1,837 10% 31 2,021 ‐ 2.7 5,456 2,829 85 6
Sills 4.7 4.4 3,127 20.7 64,662 10% 23 71,128 1 3.0 213,384 99,579 68 6
490 Ramp 8.7 5.4 160 47.0 7,534 10% 52 8,287 ‐ 2.7 22,375 11,602 140 4
Ramp Access 8.7 5.4 47 47.0 2,227 10% 52 2,450 ‐ 2.7 6,615 3,430 140 4
FW Accesses 5.3 5.4 760 28.6 21,758 10% 31 23,934 ‐ 2.7 64,621 33,507 85 6
Cross Cuts 5.3 5.4 641 28.6 18,354 10% 31 20,189 ‐ 2.7 54,511 28,265 85 6
Raise Accesses 5.3 5.4 49 28.6 1,400 10% 31 1,540 ‐ 2.7 4,158 2,156 85 6
Sills 4.7 4.4 2,322 20.7 48,020 10% 23 52,822 1 3.0 158,465 73,950 68 6
470 Ramp 8.7 5.4 144 47.0 6,784 10% 52 7,462 ‐ 2.7 20,147 10,447 140 4
Ramp Access 8.7 5.4 47 47.0 2,227 10% 52 2,450 ‐ 2.7 6,615 3,430 140 4
FW Accesses 5.3 5.4 761 28.6 21,767 10% 31 23,944 ‐ 2.7 64,648 33,521 85 6
Cross Cuts 5.3 5.4 521 28.6 14,923 10% 31 16,415 ‐ 2.7 44,321 22,981 85 6
Raise Accesses 5.3 5.4 42 28.6 1,203 10% 31 1,323 ‐ 2.7 3,572 1,852 85 6
Sills 4.7 4.4 2,339 20.7 48,360 10% 23 53,196 1 3.0 159,589 74,475 68 6
450 Ramp 5.3 5.4 135 28.6 3,878 10% 31 4,265 ‐ 2.7 11,517 5,972 85 4
Ramp Access 5.3 5.4 107 28.6 3,056 10% 31 3,362 ‐ 2.7 9,076 4,706 85 4
FW Accesses 5.3 5.4 758 28.6 21,703 10% 31 23,873 ‐ 2.7 64,458 33,423 85 6
Cross Cuts 5.3 5.4 583 28.6 16,681 10% 31 18,349 ‐ 2.7 49,543 25,689 85 6
Raise Accesses 5.3 5.4 41 28.6 1,174 10% 31 1,291 ‐ 2.7 3,487 1,808 85 6
Sills 4.7 4.4 1,758 20.7 36,355 10% 23 39,991 1 3.0 119,972 55,987 68 6
430 Ramp 5.3 5.4 151 28.6 4,330 10% 31 4,763 ‐ 2.7 12,859 6,668 85 4
Ramp Access 5.3 5.4 99 28.6 2,821 10% 31 3,103 ‐ 2.7 8,377 4,344 85 4
FW Accesses 5.3 5.4 695 28.6 19,902
W
Cross Cuts 5.3 5.4 37 28.6 1,060 10% 31 1,166 ‐ 2.7 3,149 1,633 85 6
Raise Accesses 5.3 5.4 35 28.6 989 10% 31 1,088 ‐ 2.7 2,938 1,524 85 6
Sills 4.7 4.4 464 20.7 9,591 10% 23 10,550 1 3.0 31,649 14,770 68 6
50 Ramp 5.3 5.4 139 28.6 3,979 10% 31 4,377 ‐ 2.7 11,819 6,128 85 4
Ramp Access 5.3 5.4 47 28.6 1,359 10% 31 1,495 ‐ 2.7 4,036 2,093 85 4
FW Accesses 5.3 5.4 121 28.6 3,449 10% 31 3,794 ‐ 2.7 10,244 5,312 85 6
Cross Cuts 5.3 5.4 36 28.6 1,027 10% 31 1,129 ‐ 2.7 3,049 1,581 85 6
Raise Accesses 5.3 5.4 26 28.6 755 10% 31 831 ‐ 2.7 2,243 1,163 85 6
Sills 4.7 4.4 430 20.7 8,895 10% 23 9,785 1 3.0 29,354 13,698 68 6
30 Ramp 5.3 5.4 145 28.6 4,158 10% 31 4,573 ‐ 2.7 12,348 6,403 85 4
Ramp Access 5.3 5.4 47 28.6 1,359 10% 31 1,495 ‐ 2.7 4,036 2,093 85 4
FW Accesses 5.3 5.4 81 28.6 2,307 10% 31 2,538 ‐ 2.7 6,852 3,553 85 6
Cross Cuts 5.3 5.4 34 28.6 983 10% 31 1,082 ‐ 2.7 2,920 1,514 85 6
Raise Accesses 5.3 5.4 33 28.6 944 10% 31 1,039 ‐ 2.7 2,805 1,454 85 6
Sills 4.7 4.4 392 20.7 8,107 10% 23 8,918 1 3.0 26,755 12,485 68 6
10 Ramp 5.3 5.4 221 28.6 6,325 10% 31 6,957 ‐ 2.7 18,785 9,740 85 4
Ramp Access 5.3 5.4 85 28.6 2,423 10% 31 2,665 ‐ 2.7 7,195 3,731 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 4 28.6 124 10% 31 137 ‐ 2.7 370 192 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 352 20.7 7,279 10% 23 8,007 1 3.0 24,022 11,210 68 6
‐10 Ramp 5.3 5.4 95 28.6 2,714 10% 31 2,985 ‐ 2.7 8,059 4,179 85 4
Ramp Access 5.3 5.4 50 28.6 1,431 10% 31 1,574 ‐ 2.7 4,250 2,204 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 154 20.7 3,185 10% 23 3,503 1 3.0 10,509 4,904 68 6
102,389 2,501,865 2,752,052 4,296,894 7,860,229 3,852,873
Raises
Main Zone Development Schedule
Bottom El. Top El. Heading Dimensions Length Area Volume Overbreak Area Insitu Vol. Ore? S.G. Tonnage Broken Vol. t/m Adv. Rate
790 1100 FAR 7 (dia.) 308 38.4 11,827 10% 42.24 13,010 0 2.7 35,127 18,214 114 5
710 898 (surface) RAR 7 (dia.) 208 38.4 7,987 10% 42.24 8,786 0 2.7 23,722 12,300 114 5
630 710 RAR 5 5 85 25 2,125 10% 27.5 2,338 0 2.7 6,311 3,273 74 5
430 790 FAR 7 (dia.) 380 38.4 14,592 10% 42.24 16,051 0 2.7 43,338 22,472 114 5
430 630 RAR 7 (dia.) 209 38.4 8,026 10% 42.24 8,828 0 2.7 23,836 12,359 114 5
390 430 FAR 5 5 40 25 1,000 10% 27.5 1,100 0 2.7 2,970 1,540 74 5
30 430 RAR 7 (dia.) 425 38.4 16,320 10% 42.24 17,952 0 2.7 48,470 25,133 114 5
30 390 Ore/Waste pass 3 3 380 9 3,420 10% 9.9 3,762 0 2.7 10,157 5,267 27 5
390 830 Ore/Waste pass 3 3 465 9 4,185 10% 9.9 4,604 0 2.7 12,429 6,445 27 5
Doc ID
Revision Development Unit Rates
Client Castle Resources Inc. Company $ 3,500
Project Granduc PEA Contractor $ 5,200
Work By G.Liukko Mining Parameters
Date Swell Factor 40%
North Zone Development Schedule
1280 Ramp 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 4
Ramp Access 5.3 5.4 114 28.6 3,276 10% 31 3,604 ‐ 2.7 9,731 5,046 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 57 28.6 1,635 10% 31 1,799 ‐ 2.7 4,857 2,518 85 6
Raise Accesses 5.3 5.4 50 28.6 1,431 10% 31 1,574 ‐ 2.7 4,250 2,204 85 6
Sills 4.7 4.4 519 20.7 10,732 10% 23 11,805 1 3.0 35,414 16,527 68 6
1260 Ramp 5.3 5.4 146 28.6 4,188 10% 31 4,607 ‐ 2.7 12,440 6,450 85 4
Ramp Access 5.3 5.4 122 28.6 3,482 10% 31 3,830 ‐ 2.7 10,341 5,362 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 20 28.6 574 10% 31 632 ‐ 2.7 1,706 884 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 575 20.7 11,882 10% 23 13,071 1 3.0 39,212 18,299 68 6
1240 Ramp 5.3 5.4 145 28.6 4,142 10% 31 4,556 ‐ 2.7 12,302 6,379 85 4
Ramp Access 5.3 5.4 53 28.6 1,517 10% 31 1,669 ‐ 2.7 4,505 2,336 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 20 28.6 579 10% 31 637 ‐ 2.7 1,720 892 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 536 20.7 11,092 10% 23 12,201 1 3.0 36,602 17,081 68 6
1220 Ramp 5.3 5.4 144 28.6 4,132 10% 31 4,546 ‐ 2.7 12,274 6,364 85 4
Ramp Access 5.3 5.4 67 28.6 1,928 10% 31 2,121 ‐ 2.7 5,727 2,970 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 20 28.6 582 10% 31 640 ‐ 2.7 1,728 896 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 551 20.7 11,385 10% 23 12,523 1 3.0 37,569 17,532 68 6
1200 Ramp 5.3 5.4 143 28.6 4,100 10% 31 4,510 ‐ 2.7 12,177 6,314 85 4
Ramp Access 5.3 5.4 124 28.6 3,551 10% 31 3,907 ‐ 2.7 10,548 5,469 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 52 28.6 1,500 10% 31 1,650 ‐ 2.7 4,454 2,309 85 6
Raise Accesses 5.3 5.4 24 28.6 687 10% 31 756 ‐ 2.7 2,040 1,058 85 6
Sills 4.7 4.4 510 20.7 10,553 10% 23 11,608 1 3.0 34,825 16,251 68 6
1180 Ramp 5.3 5.4 147 28.6 4,218 10% 31 4,640 ‐ 2.7 12,529 6,496 85 4
Ramp Access 5.3 5.4 102 28.6 2,919 10% 31 3,211 ‐ 2.7 8,670 4,496 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 76 28.6 2,176 10% 31 2,394 ‐ 2.7 6,463 3,351 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 486 20.7 10,056 10% 23 11,061 1 3.0 33,184 15,486 68 6
1160 Ramp 5.3 5.4 145 28.6 4,150 10% 31 4,565 ‐ 2.7 12,326 6,391 85 4
Ramp Access 5.3 5.4 49 28.6 1,402 10% 31 1,543 ‐ 2.7 4,165 2,160 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 20 28.6 585 10% 31 644 ‐ 2.7 1,738 901 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 543 20.7 11,235 10% 23 12,359 1 3.0 37,077 17,303 68 6
1140 Ramp 5.3 5.4 144 28.6 4,132 10% 31 4,546 ‐ 2.7 12,274 6,364 85 4
Ramp Access 5.3 5.4 75 28.6 2,158 10% 31 2,374 ‐ 2.7 6,409 3,323 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 90 28.6 2,575 10% 31 2,832 ‐ 2.7 7,646 3,965 85 6
Raise Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Sills 4.7 4.4 562 20.7 11,623 10% 23 12,785 1 3.0 38,354 17,899 68 6
1120 Ramp 5.3 5.4 145 28.6 4,154 10% 31 4,569 ‐ 2.7 12,337 6,397 85 4
Ramp Access 5.3 5.4 131 28.6 3,739 10% 31 4,112 ‐ 2.7 11,104 5,757 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 160 28.6 4,565 10% 31 5,022 ‐ 2.7 13,559 7,030 85 6
Raise Accesses 5.3 5.4 26 28.6 744 10% 31 819 ‐ 2.7 2,210 1,146 85 6
Sills 4.7 4.4 536 20.7 11,084 10% 23 12,193 1 3.0 36,578 17,070 68 6
1100 Ramp 5.3 5.4 149 28.6 4,265 10% 31 4,691 ‐ 2.7 12,666 6,567 85 4
Ramp Access 5.3 5.4 188 28.6 5,390 10% 31 5,929 ‐ 2.7 16,009 8,301 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 141 28.6 4,026 10% 31 4,429 ‐ 2.7 11,957 6,200 85 6
Raise Accesses 5.3 5.4 288 28.6 8,236 10% 31 9,060 ‐ 2.7 24,462 12,684 85 6
Sills 4.7 4.4 501 20.7 10,362 10% 23 11,398 1 3.0 34,194 15,957 68 6
1080 Ramp 5.3 5.4 145 28.6 4,161 10% 31 4,577 ‐ 2.7 12,358 6,408 85 4
Ramp Access 5.3 5.4 47 28.6 1,359 10% 31 1,495 ‐ 2.7 4,038 2,094 85 4
FW Accesses 5.3 5.4 ‐ 28.6 ‐ 10% 31 ‐ ‐ 2.7 ‐ ‐ ‐ 6
Cross Cuts 5.3 5.4 471 28.6 13,476 10% 31 14,823 ‐ 2.7 40,023 20,752 85 6
Raise Accesses 5.3 5.4 33 28.6 947 10% 31 1,042 ‐ 2.7 2,813 1,459 85 6
Sills 4.7 4.4 532 20.7 11,012 10% 23 12,113 1 3.0 36,339 16,958 68 6
1060 Ramp 5.3 5.4 154 28.6 4,409 10% 31 4,850 ‐ 2.7 13,095 6,790 85 4
Ramp Access 5.3 5.4 48 28.6 1,359 10% 31 1,495 ‐ 2.7 4,038 2,094 85 4
FW Accesses 5.3 5.4 447 28.6 12,790 10% 31 14,069 ‐ 2.7 37,985 19,696 85 6
Cross Cuts 5.3 5.4 178 28.6 5,096 10% 31 5,606 ‐ 2.7 15,135 7,848 85 6
Raise Accesses 5.3 5.4 34 28.6 973 10% 31 1,070 ‐ 2.7 2,890 1,499 85 6
Sills 4.7 4.4 410 20.7 8,470 10% 23 9,317 1 3.0 27,951 13,044 68 6
1040 Ramp 5.3 5.4 156 28.6 4,464 10% 31 4,910 ‐ 2.7 13,257 6,874 85 4
Ramp Access 5.3 5.4 48 28.6 1,359 10% 31 1,495 ‐ 2.7 4,038 2,094 85 4
FW Accesses 5.3 5.4 394 28.6 11,273 10% 31 12,401 ‐ 2.7 33,482 17,361 85 6
Cross Cuts 5.3 5.4 204 28.6 5,847 10% 31 6,432 ‐ 2.7 17,365 9,004 85 6
Raise Accesses 5.3 5.4 10 28.6 286 10% 31 315 ‐ 2.7 850 441 85 6
Sills 4.7 4.4 379 20.7 7,841 10% 23 8,625 1 3.0 25,874 12,075 68 6
1020 Ramp 5.3 5.4 145 28.6 4,136 10% 31 4,550 ‐ 2.7 12,284 6,369 85 4
Ramp Access 5.3 5.4 102 28.6 2,910 10% 31 3,201 ‐ 2.7 8,642 4,481 85 4
FW Accesses 5.3 5.4 567 28.6 16,225 10% 31 17,847 ‐ 2.7 48,187 24,986 85 6
Cross Cuts 5.3 5.4 247 28.6 7,058 10% 31 7,764 ‐ 2.7 20,963 10,870 85 6
Raise Accesses 5.3 5.4 10 28.6 288 10% 31 317 ‐ 2.7 855 443 85 6
Sills 4.7 4.4 566 20.7 11,701 10% 23 12,871 1 3.0 38,614 18,020 68 6
1000 Ramp 5.3 5.4 146 28.6 4,173 10% 31 4,591 ‐ 2.7 12,394 6,427 85 4
Ramp Access 5.3 5.4 85 28.6 2,425 10% 31 2,668 ‐ 2.7 7,203 3,735 85 4
FW Accesses 5.3 5.4 499 28.6 14,285 10% 31 15,713 ‐ 2.7 42,426 21,998 85 6
Cross Cuts 5.3 5.4 189 28.6 5,411 10% 31 5,952 ‐ 2.7 16,071 8,333 85 6
Raise Accesses 5.3 5.4 34 28.6 976 10% 31 1,074 ‐ 2.7 2,899 1,503 85 6
Sills 4.7 4.4 607 20.7 12,562 10% 23 13,818 1 3.0 41,454 19,345 68 6
980 Ramp 5.3 5.4 145 28.6 4,138 10% 31 4,552 ‐ 2.7 12,290 6,373 85 4
Ramp Access 5.3 5.4 35 28.6 1,002 10% 31 1,102 ‐ 2.7 2,976 1,543 85 4
FW Accesses 5.3 5.4 466 28.6 13,343 10% 31 14,677 ‐ 2.7 39,629 20,548 85 6
Cross Cuts 5.3 5.4 253 28.6 7,251 10% 31 7,976 ‐ 2.7 21,535 11,166 85 6
Raise Accesses 5.3 5.4 34 28.6 977 10% 31 1,075 ‐ 2.7 2,901 1,504 85 6
Sills 4.7 4.4 686 20.7 14,196 10% 23 15,616 1 3.0 46,848 21,862 68 6
960 Ramp 5.3 5.4 144 28.6 4,132 10% 31 4,546 ‐ 2.7 12,274 6,364 85 4
Ramp Access 5.3 5.4 48 28.6 1,359 10% 31 1,495 ‐ 2.7 4,038 2,094 85 4
FW Accesses 5.3 5.4 421 28.6 12,044 10% 31 13,248 ‐ 2.7 35,770 18,547 85 6
Cross Cuts 5.3 5.4 304 28.6 8,708 10% 31 9,579 ‐ 2.7 25,864 13,411 85 6
Raise Accesses 5.3 5.4 10 28.6 291 10% 31 320 ‐ 2.7 864 448 85 6
Sills 4.7 4.4 767 20.7 15,864 10% 23 17,450 1 3.0 52,351 24,431 68 6
940 Ramp 5.3 5.4 145 28.6 4,136 10% 31 4,550 ‐ 2.7 12,285 6,370 85 4
Ramp Access 5.3 5.4 106 28.6 3,046 10% 31 3,350 ‐ 2.7 9,046 4,690 85 4
FW Accesses 5.3 5.4 518 28.6 14,832 10% 31 16,315 ‐ 2.7 44,051 22,841 85 6
Cross Cuts 5.3 5.4 315 28.6 9,013 10% 31 9,914 ‐ 2.7 26,767 13,879 85 6
Raise Accesses 5.3 5.4 10 28.6 287 10% 31 315 ‐ 2.7 851 441 85 6
Sills 4.7 4.4 876 20.7 18,114 10% 23 19,925 1 3.0 59,775 27,895 68 6
920 Ramp 5.3 5.4 146 28.6 4,176 10% 31 4,593 ‐ 2.7 12,402 6,431 85 4
Ramp Access 5.3 5.4 81 28.6 2,308 10% 31 2,539 ‐ 2.7 6,856 3,555 85 4
FW Accesses 5.3 5.4 505 28.6 14,445 10% 31 15,890 ‐ 2.7 42,903 22,246 85 6
Cross Cuts 5.3 5.4 306 28.6 8,744 10% 31 9,618 ‐ 2.7 25,969 13,465 85 6
Raise Accesses 5.3 5.4 35 28.6 988 10% 31 1,087 ‐ 2.7 2,935 1,522 85 6
Sills 4.7 4.4 851 20.7 17,589 10% 23 19,348 1 3.0 58,043 27,087 68 6
900 Ramp 5.3 5.4 145 28.6 4,137 10% 31 4,551 ‐ 2.7 12,287 6,371 85 4
Ramp Access 5.3 5.4 35 28.6 1,006 10% 31 1,107 ‐ 2.7 2,989 1,550 85 4
FW Accesses 5.3 5.4 370 28.6 10,603 10% 31 11,663 ‐ 2.7 31,490 16,328 85 6
Cross Cuts 5.3 5.4 348 28.6 9,961 10% 31 10,957 ‐ 2.7 29,583 15,339 85 6
Raise Accesses 5.3 5.4 34 28.6 982 10% 31 1,081 ‐ 2.7 2,918 1,513 85 6
Sills 4.7 4.4 824 20.7 17,038 10% 23 18,742 1 3.0 56,226 26,239 68 6
880 Ramp 5.3 5.4 144 28.6 4,132 10% 31 4,546 ‐ 2.7 12,274 6,364 85 4
Ramp Access 5.3 5.4 47 28.6 1,359 10% 31 1,495 ‐ 2.7 4,038 2,094 85 4
FW Accesses 5.3 5.4 342 28.6 9,800 10% 31 10,780 ‐ 2.7 29,106 15,092 85 6
Cross Cuts 5.3 5.4 198 28.6 5,669 10% 31 6,236 ‐ 2.7 16,836 8,730 85 6
Raise Accesses 5.3 5.4 11 28.6 301 10% 31 332 ‐ 2.7 895 464 85 6
Sills 4.7 4.4 723 20.7 14,953 10% 23 16,449 1 3.0 49,346 23,028 68 6
860 Ramp 5.3 5.4 145 28.6 4,145 10% 31 4,559 ‐ 2.7 12,310 6,383 85 4
Ramp Access 5.3 5.4 99 28.6 2,836 10% 31 3,119 ‐ 2.7 8,422 4,367 85 4
FW Accesses 5.3 5.4 336 28.6 9,625 10% 31 10,588 ‐ 2.7 28,587 14,823 85 6
Cross Cuts 5.3 5.4 159 28.6 4,551 10% 31 5,006 ‐ 2.7 13,517
W
W
W
APPENDIX C
CASH FLOW
Calendar 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Project year 0.50 1.50 2.50 3.50 4.50 5.50 6.50 7.50 8.50 9.50 10.50 11.50 12.50 13.50 14.50 15.50 16.50 17.50 18.50 19.50 20.50
LOM Production year -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Metal Prices
Cu $US/lb 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65 3.65
Magnetite Metallurgical $US/tonne 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00
Au $US/oz 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00 1,480.00
Ag $US/oz 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00 28.00
FOREX $US/$CDN 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99 0.99
Mine Production
Ore kt 40,283 0 0 0 0 0 2,974 3,062 3,060 3,060 3,060 3,060 3,060 3,060 3,060 3,060 2,695 2,247 2,051 1,602 1,171 0
Ore Grade
Cu % 1.160% 0.000% 0.000% 0.000% 0.000% 0.000% 1.151% 1.118% 1.119% 1.128% 1.119% 1.161% 1.204% 1.198% 1.138% 1.168% 1.196% 1.194% 1.182% 1.185% 1.191% 0.000%
Fe % 7.06% 0.000% 0.000% 0.000% 0.000% 0.000% 8.811% 9.204% 9.682% 10.137% 9.514% 9.432% 9.286% 6.747% 3.900% 3.887% 3.585% 3.969% 4.349% 4.176% 3.808% 0.000%
Au g/t 0.144 0.000 0.000 0.000 0.000 0.000 0.133 0.132 0.134 0.135 0.135 0.138 0.146 0.160 0.179 0.153 0.150 0.139 0.138 0.139 0.140 0.000
Ag g/t 8.987 0.000 0.000 0.000 0.000 0.000 10.585 9.849 10.179 10.223 10.191 10.456 9.485 9.158 7.568 7.361 7.074 7.393 7.719 7.550 7.200 0.000
Payable Metal
Cu Concentrate
Cu klbs 936,841 0 0 0 0 0 68,650 68,607 68,674 69,182 68,630 71,205 73,896 73,479 69,791 71,691 64,627 53,793 48,606 38,046 27,964 0
Au in Cu Con koz 134 0 0 0 0 0 9 9 9 10 10 10 10 11 13 11 9 7 7 5 4 0
Ag in Cu Con koz 9,672 0 0 0 0 0 841 806 832 836 833 855 775 749 619 602 509 444 423 323 225 0
Magnetite-Metallurgical Concentrate kdmt 2,542 0 0 0 0 0 234 252 265 277 260 258 254 184 107 106 86 80 80 60 40 0
Income Statement
Gross Revenue
Cu Concentrate
Cu 000$US 3,419,469 0 0 0 0 0 250,574 250,415 250,660 252,515 250,498 259,897 269,720 268,200 254,738 261,672 235,890 196,345 177,411 138,869 102,067 0
Au 000$US 198,577 0 0 0 0 0 13,495 13,825 13,994 14,193 14,136 14,437 15,335 16,771 18,791 16,080 13,866 10,719 9,722 7,615 5,598 0
Ag 000$US 270,805 0 0 0 0 0 23,545 22,556 23,300 23,402 23,328 23,934 21,711 20,963 17,325 16,850 14,262 12,429 11,843 9,048 6,309 0
Total Cu Concentrate 000$US 3,888,852 0 0 0 0 0 287,614 286,796 287,953 290,110 287,962 298,268 306,766 305,934 290,853 294,602 264,019 219,492 198,976 155,531 113,974 0
Magnetite-Metallurgical Concentrate 000$US 330,433 0 0 0 0 0 30,425 32,722 34,406 36,023 33,809 33,516 32,999 23,977 13,858 13,812 11,222 10,359 10,359 7,769 5,179 0
Gross Revenue 000$US 4,219,285 0 0 0 0 0 318,039 319,518 322,359 326,133 321,771 331,784 339,765 329,911 304,711 308,414 275,241 229,851 209,335 163,300 119,153 0
Treatment, Smelting & Refining 000$US 215,921 0 0 0 0 0 15,865 15,844 15,869 15,986 15,860 16,451 17,035 16,936 16,063 16,478 14,841 12,357 11,173 8,743 6,422 0
Transportation, Insurance and Representation 000$US 282,354 0 0 0 0 0 23,782 24,918 25,765 26,633 25,463 25,641 25,719 21,183 15,688 15,898 13,718 11,924 11,272 8,654 6,096 0
NSR 000$US 3,721,010 0 0 0 0 0 278,392 278,756 280,725 283,514 280,448 289,692 297,011 291,792 272,961 276,038 246,682 205,570 186,890 145,903 106,635 0
Operating Costs - On-site
Mining 000$US 947,416 0 0 0 0 0 59,571 68,435 71,530 73,265 74,682 79,285 83,225 80,328 73,507 71,072 66,121 44,750 38,403 35,629 27,613 0
Processing, Cu Con 000$US 305,378 0 0 0 0 0 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 21,813 0 0
Processing, Magnetite 000$US 35,602 0 0 0 0 0 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 2,543 0 0
Site services 000$US 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
G&A 000$US 259,853 0 0 0 0 0 18,757 19,041 19,041 19,182 19,324 19,324 19,395 19,273 18,737 18,383 17,776 17,493 17,108 17,017 0 0
Tailings 000$US 34,014 0 0 0 0 0 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 2,430 0 0
Environmental monitoring 000$US 4,158 0 0 0 0 0 297 297 297 297 297 297 297 297 297 297 297 297 297 297 0 0
Operating Costs - On-Site 000$US 1,586,421 0 0 0 0 0 105,411 114,558 117,653 119,530 121,089 125,691 129,702 126,684 119,326 116,537 110,979 89,325 82,593 79,729 27,613 0
Operating Cash Flow 000$US 2,134,588 0 0 0 0 0 172,981 164,198 163,072 163,984 159,359 164,001 167,309 165,108 153,634 159,501 135,702 116,245 104,297 66,175 79,022 0
Capital Costs
Initial 000$US 494,006 0 0 0 275,608 218,397 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Sustaining 000$US 238,780 0 0 0 0 0 33,318 14,197 15,047 22,604 35,393 22,522 24,439 13,453 19,760 13,403 7,424 5,946 6,357 0 4,917 0
Pre-production operating cost 000$US 32,629 0 0 0 14,753 17,877 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Working capital 000$US 0 0 0 0 0 0 26,353 2,287 774 469 390 1,151 1,003 -755 -1,839 -697 -1,390 -5,414 -1,683 -716 -19,932 0
Closure Total Capital Cost 000$US 20,048 0 0 0 0 3,960 3,960 3,960 3,960 3,960 0 0 0 0 0 0 0 0 0 0 248 0
Total Capital Costs 000$US 785,462 0 0 0 290,361 240,234 63,631 20,444 19,780 27,033 35,783 23,673 25,441 12,698 17,921 12,705 6,035 533 4,674 -716 -14,767 0
Pre-tax Net Cash Flow (NCF) 000$US 1,349,126 0 0 0 -290,361 -240,234 109,350 143,754 143,291 136,951 123,577 140,328 141,868 152,410 135,713 146,795 129,668 115,712 99,623 66,891 93,789 0
000$CDN 1,362,754 0 0 0 -293,294 -242,661 110,454 145,206 144,739 138,335 124,825 141,745 143,301 153,950 137,084 148,278 130,978 116,881 100,629 67,567 94,737 0
Income and Mining Taxes 000$US 378,016 0 0 0 -6,837 -13,785 3,320 2,940 3,182 33,673 39,007 39,705 40,190 40,079 37,129 39,173 33,060 28,613 25,637 15,903 19,631 -2,606
000$CDN 381,834 0 0 0 -6,906 -13,924 3,353 2,970 3,214 34,014 39,401 40,106 40,596 40,484 37,504 39,568 33,394 28,902 25,896 16,064 19,830 -2,633
Post-tax Net Cash Flow (NCF) 000$US 971,110 0 0 0 -283,524 -226,450 106,030 140,814 140,109 103,278 84,570 100,623 101,678 112,331 98,584 107,623 96,608 87,100 73,985 50,988 74,158 2,606
000$CDN 980,920 0 0 0 -286,388 -228,737 107,101 142,236 141,524 104,321 85,424 101,639 102,705 113,466 99,580 108,710 97,584 87,980 74,732 51,503 74,907 2,633
IRR 17.80%

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CASTLE RESOURCES INC.

Preliminary Economic Assessment

CASTLE RESOURCES INC.

PRELIMINARY ECONOMIC ASSESSMENT

EFFECTIVE DATE: FEBRUARY 28, 2013

Prepared by Robert Morrison, Ph.D., MAusIMM (CP), P.Geo.

Suite 900, 330 Bay Street, Toronto, Ontario M5H 2S8

REV. PREPARED BY REVIEWED BY APPROVED BY

1.0 SUMMARY ......................................................................................................... 1-1

APPENDIX A CERTIFICATES OF QUALIFED PERSONS

Table 1.1 General Project Information......................................................................................... 1-1

Figure 1.1 Property Location Map ................................................................................................. 1-2

ABBREVIATIONS AND ACRONYMS

ELEMENTS AND CHEMICAL SYMBOLS

General information for the Project is summarized in Table 1.1.

Castle Resources Inc. 1-1 1256370100-REP-R0002-03

Figure 1.1 shows the location of the Property.

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 copper price = US$3.60/lb

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A mineralogical analyses of the sample by optical microscopy indicated that magnetite

With an aggressive bulk sulphide flotation flowsheet and a two-stage magnetic

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There are two proposed cases:

 Base Case: production of a copper concentrate (with silver/gold credits) and a

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Some of the foreseen potential risks of the Project include:

 Area weather conditions – may result in the fluctuation of annual plant

Some of the foreseen potential opportunities of the Project include:

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1st Cleaner 1st Cleaner

Copper Tailings Pond Magnetite

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Power supply to support the Project’s anticipated production level load of 25 MW is

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Waste Rock Plant Site Mitre

Summit Basin TSF Bear River

Summit Basin Tailings Corridor Slate

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Following environmental approvals, various authorizations, licenses, and permits will be

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Castle commissioned PricewaterhouseCoopers LLP (PwC) in Toronto, ON to prepare a tax

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Sensitivity analyses were developed to evaluate the sensitivity of project economics to

Recommended activities for geology, mineral processing, mining operations, project

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The monetary units are in Canadian dollars, unless otherwise stated.

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L6591 L6592 L6583

L6661 L6618 Metres