US Copper Production Targeted for Q4, 2019

Mineral Reserves

Pumpkin Hollow Mineral Reserves

Proven and Probable mineral reserves are the economically-mineable portions of the Measured and Indicated Mineral Resources as demonstrated in a Feasibility Study.

As disclosed in a Technical Report developed in accordance with NI43-101 and filed on SEDAR on November 29, 2017, the Pumpkin Hollow Mineral Reserves are reported in respect of two mutually-exclusive development scenarios:

  • Case A: a 5,000 tpd Underground Project; and ,
  • Case B:  a 70,000 tpd Integrated Project with ore feed from both open pit and underground mining.

The Proven and Probable Mineral Reserves at Pumpkin Hollow, as announced in the November 20, 2017 press release and disclosed in the NI 43-101 Technical Report filed on SEDAR on November 29, 2017, with an effective date of September 15, 2017, are summarized below:

Case A: Underground Project - Mineral Reserves

With respect to the Underground Project (Case A) in the PFS, the mineral reserves for the East and E2 deposits were developed from the deposits’ Measured and Indicated Mineral Resources after the application of a net smelter return (“NSR”) cut-off grade of $46/ton Minable Shape Optimizer (MSO) was conducted on the mining block models. The results generated from MSO were utilized for generating detailed and refined crosscut and stope designs within Deswik CAD.

The Mineral Reserves reflect the transverse mining method, primary and secondary stope sequence along with the use of cemented paste fill, unconsolidated paste fill and rock fill within the respective stope sequencing. Dilution and mine loss percentage estimates have been applied in the Reserves. Stope dilutions range between 2.5% and 10% and stope recoveries range between 95% and 96%.

The Underground Project mineral reserves are not additive to the Integrated Project Mineral Reserves.

Mineral Reserves - Eastern Underground Deposits (East and E2)
 OreCopperGoldSilverContained  CopperContained  GoldContained  SilverCopper Equiv.
Classification000's tons%Oz./tonOz./ton000s lbs.Ozs.Ozs.%
Proven7,4001.850.0070.144273,80051,0001,064,0002.01
Probable16,5001.470.0060.138485,100102,0002,269,0001.61
Total23,9001.590.0060.139758,900153,0003,333,0001.74

The independent Qualified Person for the Underground Project Mineral Reserves is Neil Schunke P.Eng. of Mining Plus. The effective date of the Underground Project Mineral Reserves is July 2017. 

Notes:

  1. Totals may not add due to rounding.
  2. Copper equivalency calculations are based on $3.00 per pound for copper, $1,343 per ounce gold and $19.86 per ounce silver, and metallurgical recoveries of 92%, 78% and 70% for copper, gold and silver, respectively.

Case B Integrated Project - Mineral Reserves

The mineral reserves summarized below were disclosed in the November 2017 NI43-101 Technical Report as filed on SEDAR with an effective date of September 15, 2017 and reflect the various mining and operating assumptions detailed in that report. The mineral reserves and mine plans for the open pit deposits were determined using cutoff grades developed by Tetra Tech as appropriate for the mining method and costs associated with the deposits. For the Western deposit open pits the mineral reserves, mining method, and costs associated with the deposit were developed by Tetra Tech. The breakeven copper cutoff grades used were 0.156% and 0.159% for the North and South deposits respectively. Metal prices for the open pit copper, gold and silver assumed were $3.15/lb, $1,200/oz. and $18/oz. respectively. Tetra Tech is the independent Qualified Person who is responsible for the western deposit mineral reserve estimate.

The Integrated Project mineral reserves are not additive to the Underground Project mineral reserves.

Mineral Reserves North & South - Open Pit Deposits
 OreCopperGoldSilverContained  CopperContained  GoldContained  SilverCopper Equiv.
Classification000's tons%Oz./tonOz./ton000s lbs.Ozs.Ozs.%
North        
Proven122,4030.4790.0010.0561,173,000175,0006,862,0000.513
Probable178,2410.4220.0010.0511,505,000178,0009,097,0000.448
  Total300,6440.4450.0010.0532,678,000353,00015,959,0000.471
South        
Proven143,1170.3280.0010.038938,000143,0005,438,0000.351
Probable95,5240.3120.0010.027595,00096,0002,579,0000.333
   Total238,6410.3210.0010.0331,533,000239,0008,017,0000.343
Total North & South        
Proven265,5200.400.0010.0462,111,000318,00012,300,0000.425
Probable273,7650.380.0010.0432,100,000274,00011,676,0000.408
   Total539,2850.390.0010.0444,211,000592,00023,976,0000.414
         
Mineral Reserves - Eastern Underground Deposits
 OreCopperGoldSilverContained  CopperContained  GoldContained  SilverCopper Equiv.
Classification000's tons%Oz./tonOz./ton000s lbs.Ozs.Ozs.%
Proven8,9231.590.0060.124283,00054,0001,106,0001.71
Probable23,6801.170.0050.109556,000116,0002,581,0001.28
  Total32,6031.290.0050.113839,000170,0003,687,0001.39
Mineral Reserves North & South - Open Pit & Eastern Underground Deposits
 OreCopperGoldSilverContained  CopperContained  GoldContained  SilverCopper Equiv.
Classification000's tons%Oz./tonOz./ton000s lbs.Ozs.Ozs.%
Proven274,4430.440.0010.0492,394,000372,00013,406,0000.467
Probable297,4450.450.0010.0482,656,000390,00014,257,0000.477
  Total571,8880.440.0010.0485,050,000762,00027,663,0000.472

The independent Qualified Persons for the Integrated Project Mineral Reserves are Ed Lips, P.Eng of TetraTech for the open pit and Mel Lawson RM SME, of Stantec for the underground. Tables may not add due to rounding.

Notes:

  1. Totals may not add due to rounding.
  2. Mineral reserves are as of an effective date of September 15, 2017
  3. The copper equivalency was determined using $3.00 per pound for copper, $1,30 per ounce gold and $17 per ounce silverand metallurgical recoveries of 89.3%, 67.3% and 56.3% for copper, gold and silver respectively.

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