Resources and Reserves
The mineral resource estimate (Table 2) was updated and classified using logic consistent with the Canadian Institute of Mining and Metallurgy ("CIM") definitions referred to in National Instrument 43-101 into Measured, Indicated, and Inferred Mineral Resources. The mineral resource estimate was developed using industry-accepted methods with GEMS software in blocks sized 5 m x 5 m x 4 m. For the purpose of resource estimation, all assay intervals within the mineralized units were composited to two metres and grades were capped prior to estimation. Zinc was capped at 30%, lead and copper at 10%, gold at 25 g/t and silver at 600 g/t for the resource estimate.
Table 2. Tulsequah Chief Mineral Resources (Inclusive of Mineral Reserves) as of March 15, 2012
----------------------------------------------------------------------------Category Tonnes Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t)----------------------------------------------------------------------------Indicated 6.75Mt 1.19 1.10 5.89 2.40 85----------------------------------------------------------------------------Inferred 0.20Mt 0.67 0.76 4.02 1.81 62----------------------------------------------------------------------------1. $100/tonne Equivalent cut-off used.2. Cut-off grades are based on a price of US$1,275 per ounce of gold, US$21 per ounce for silver, US$1.10 per pound for zinc and lead and US$3.25 for copper and recoveries of 81.8% for gold, 79.5% for silver, 87.8% for copper, 44.5% for lead and 88% for zinc.3. Qualified Person for resource estimate is Gilles Arseneau, P.Geo. of SRK Consulting (Canada) Inc.4. The Resources are inclusive of the Mineral Reserves stated in Table 3.
The reserve estimate is summarized in Table 3 below. The probable reserve totals 6.45 Mt of minable material.
Table 3. Tulsequah Chief Mineral Reserves
----------------------------------------------------------------------------Category Tonnes Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t)----------------------------------------------------------------------------Probable 6.45Mt 1.12 1.04 5.59 2.30 81.38----------------------------------------------------------------------------1. Mineral reserves are reported based on underground mining above a US$125/tonne Equivalent cut-off.
Cut-off grades are based on a price of US$1,350 per ounce of gold, US$22 per ounce for silver, US$1.10 per pound for zinc and lead and US$3.10 for copper and recoveries of 81.8% for gold, 79.5% for silver, 87.8% for copper, 44.5% for lead and 88% for zinc.
The Underground Mine
A new underground mine, adjacent to and beneath old workings that were previously operated by Cominco Ltd. from 1951-57, will be developed through the existing 5200 and 5400 Level adits and will be used as the primary access to the mine for all personnel, mine services, equipment and supplies.
The new mine will operate as a ramp-entry truck haulage operation via a spiral ramp that will be developed to a vertical depth of 750 meters with mining levels located at 30-meter vertical intervals. Sub-level stoping will be the primary mining method with a minor amount of mechanized cut-and-fill stoping. Paste backfill and unconsolidated loose waste rock will be used for replacement of mined voids for both methods. Where backfill walls will be exposed by future adjacent mining, additional cement will be added to the paste backfill for strength.
