Discover, Develop, Operate

Red Chris Mine

Mineral Resource & Mineral Reserve Estimates

In February 2012 an updated Red Chris Report was completed, intended to guide development of the project within its current Provincial and Federal Approval framework. The 2012 Red Chris Report indicates an after tax internal rate of return (IRR) of 15.7% at metal prices of US$2.20/lb copper and US$900/oz gold and a capital cost of $443 million. The 2012 Red Chris Report uses the mining envelope, mining rate and metal recovery estimates used in the 2004 Red Chris Report.

Highlights of the 2012 Red Chris Report

  • Reserves of over 301.5 million tonnes grading 0.359% copper and 0.274 g/t gold provide for a 28 year project life at a milling rate of 30,000 tonnes per day.
  • The Red Chris orebody is exposed at surface resulting in a comparatively limited pre-production phase of only four months during which 1.8 million tonnes of rock and overburden would be relocated.
  • Recovered metal in concentrate would total 2.08 billion lbs copper and 1.324 million oz gold.
  • Capital cost is estimated at CDN$443 million.
  • At monthly average metal prices of US$2.20/lb copper, US$900/oz gold, US$12.00/oz silver, and exchange rate of CDN$1.00 to US$0.90 the project IRR after tax is 15.7%. Project payback is 4.58 years and projected life of mine production cost per pound of copper taking silver and gold as credit, is US$1.22.
  • At the January 2012 monthly average metal prices of US$3.65/lb copper, US$1656.09/oz gold, US$30.78/oz silver, and an exchange rate of CDN$1.00 to US$0.986, the project IRR after tax is 38.8%. The project payback is 1.81 years and projected life of mine production cost per pound of copper taking silver and gold as credit, is US$0.96.

Total Red Chris Mineral Resource [Feb 2012; amended & restated Sept 2015]

The original resource estimate published on Feb. 14, 2012 was constrained by a series of Copper Equivalent grade shells, within a wire frame digital solid constructed around the three mineralized deposit domains. The resource was amended and restated in September of 2015 with the re-release of the 2012 Red Chris Report. The amended and restated Resource is based on a combination of an Open Pit and Block Cave constrained Resource used to demonstrate “reasonable prospects of economic extraction” as referred to in Instrument NI 43-101. The 2012 Technical Report also includes a full description of the exploration drilling data used, modeling and estimation method, and the sampling, assaying and QA/QC (quality assurance/quality control) procedures.

Total Red Chris Mineral Resource [Feb 2012; amended & restated Sept 2015]

Red Chris 2012 Total Open Pit/Block Cave Resource Estimate(1)
Material Class Ore Millions Tonnes *Mill Head Value $/tonne Insitu Grades
**CopperEquiv.(%) Copper(%) Gold(g/t) Silver(g/t)
MEASURED 830.7 $25.13 0.57 0.36 0.36 1.17
INDICATED 203.0 $18.55 0.47 0.30 0.29 1.01
M&I 1,034.7 $23.84 0.56 0.35 0.35 1.14
INFERRED 787.1 $18.65 0.48 0.29 0.32 1.04

Open Pit Mineral Resource [Feb 2012; amended & restated Sept 2015]

The open pit part of the Resource was defined utilizing MineSight’s Computer Software Lerch-Grossman pit optimization routine. MineSight’s computer programs and the Lerch-Grossman algorithm are acknowledged within the mining industry as creditable tools for this purpose. Key pit specific inputs into the Lerch-Grossman program were:

  • Pit slope angle = 42 degrees - which is the average pit slope of the currently approved pit.
  • Waste Mining costs of $ 1.872 per tonne for the 1470 elevation bench.
  • An additional cost of $.052 per tonne was added to for each 15 meter bench below the 1470 elevation for increased haulage costs.
  • Ore Mining Costs of $ 1.787 per tonne for the 1470 elevation bench.
  • An additional cost of $.044 per tonne was added to for each 15 meter bench below the 1470 elevation for increased haulage costs.
  • No capital costs were included for replacement or additional mine equipment fleet purchases.
  • A portion of the East side of the pit was constrained by approximately 100 meters to preserve the current crusher installation.

Open Pit Mineral Resource [Feb 2012; amended & restated Sept 2015]

Red Chris 2012 Upper Resource from Open Pit(1)
Material Class Material Type *Cut-Off
Mill Head Value ($)
Ore Millions Tonnes *Mill Head
Value $/tonne
Insitu Grades
**Copper Equivalent (%) Copper (%) Gold (g/t) Silver (g/t)
Measured Stockpile $0.00 6.0 $0.95 0.15 0.11 0.07 0.48
Mill Feed $1.50 676.4 $19.10 0.48 0.32 0.27 1.04
Sub-total 682.4 $18.94 0.48 0.31 0.27 1.04
Indicated Stockpile $0.00 0.8 $0.93 0.15 0.11 0.07 0.46
Mill Feed $1.50 164.7 $14.91 0.42 0.27 0.24 0.91
Sub-total 165.5 $14.84 0.41 0.27 0.24 0.90
Inferred Stockpile $0.00 20.1 $0.65 0.16 0.08 0.14 1.06
Mill Feed $1.50 377.2 $14.23 0.41 0.25 0.26 0.92
Sub-total 397.3 $13.54 0.40 0.24 0.26 0.93
MEASURED 682.4 $18.94 0.48 0.31 0.27 1.04
INDICATED 165.5 $14.84 0.41 0.27 0.24 0.90
M&I 847.9 $18.14 0.47 0.31 0.27 1.01
INFERRED 397.3 $13.54 0.40 0.24 0.26 0.93
Waste Rock 2,407.3
Over Burden 121.0
Strip ratio 2.0

Underground Mineral Resource [Feb 2012; amended & restated Sept 2015]

The vertical orientation of the Red Chris Deposit, coupled with its very large size makes the Deep Red Chris Mineralization attractive to mining by underground block caving methods. The Underground Mineral Resource includes three blocks economically favorable to underground mining by block caving. The three blocks are clipped to the bottom of the open pit discussed above. The key mining parameters used to define those underground mineral resource blocks which have a reasonable prospect of economic extraction are

  • all-in mine development capital cost of $ 7.94 per tonne.
  • operating cost of $8.96 per tonne.
  • Therefore the targeted mineralization was required to have:
  • Mill Head Value greater than $16.90 per tonne for the chosen block cave volumes.
  • Mill Head Value greater than $8.96 per tonne operating cut-off grade at the draw points.
  • average Mill Head Value of all Block Cave Measured & Indicated tonnes is $49.86/t, and Block Cave Inferred tonnes is $23.85/t.
Red Chris 2012 Lower Resource from Block Cave Including Planed Dilution(1)
Material
Class
Material Type Cut-Off Mill Head
Value ($)
Ore Millions
Tonnes
*Mill Head
Value
$/tonne
Insitu Grades
**Copper Equivalent (%) Copper (%) Gold (g/t) Silver (g/t)
Measured Mineralized Dilution $0.00 2.9 $6.83 0.28 0.17 0.17 0.82
Draw Point Cut Off $8.96 20.6 $13.60 0.40 0.25 0.25 1.10
Targeted Ore $16.90 124.8 $61.33 1.12 0.61 0.85 1.91
Sub-total 148.4 $53.62 1.00 0.55 0.75 1.78
Indicated Mineralized Dilution $0.00 0.6 $7.50 0.29 0.19 0.17 0.84
Draw Point Cut Off $8.96 7.3 $13.94 0.41 0.25 0.26 1.17
Targeted Ore $16.90 29.6 $40.73 0.83 0.48 0.57 1.59
Sub-total 37.5 $34.98 0.74 0.43 0.50 1.50
Inferred Waste Dilution -$6.40 64.6 -$4.81 0.04 0.02 0.03 0.22
Mineralized Dilution $0.00 18.7 $6.15 0.27 0.16 0.17 0.73
Draw Point Cut Off $8.96 63.2 $13.38 0.40 0.25 0.25 0.98
Targeted Ore $16.90 243.4 $35.52 0.76 0.45 0.52 1.47
Sub-total 389.8 $23.85 0.56 0.33 0.38 1.15
MEASURED 148.4 $53.62 1.00 0.55 0.75 1.78
INDICATED 37.5 $34.98 0.74 0.43 0.50 1.50
M&I 185.8 $49.86 0.95 0.53 0.70 1.72
INFERRED 389.8 $23.85 0.56 0.33 0.38 1.15

(1)

*Mill Head Value is a calculation of the value of material mined, in Canadian dollars per metric tonne, once it reaches the Crusher Pocket. This includes all downstream costs from the crusher forward, including: Milling / Concentrate handling and transportation / Treatment and refining / Royalties / Sustaining capital / Administration and head office overhead costs. Large capital costs associated with expansions, such as mining fleet additions, or replacements are not included. See table 17.24 in the Technical report available on this site for metal recovery formulas, costs and parameters used to calculate this value.

**Copper Equivalent % = [Copper Grade (%) + (.60415 * Gold Grade (g/t))]; based copper/ gold price ratio at Copper - $3.50 /lb, Gold $ 1450/oz.

Greg Gillstrom, P.Eng, Senior Geological Engineer, Imperial Metals Corporation, designated the Qualified Person as defined under National Instrument 43-101 for the resource calculation.

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