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Johnny Lee Deposit Mineral Resource Estimate
The Johnny Lee Deposit (Fig. 3) consists of two zones - an Upper Zone and a Lower Zone. The drill hole database that was used to estimate the Johnny Lee Deposit Mineral resource consists of 136 drill holes totaling 37,530.3 metres (123,130 feet), all containing one or more intercepts of significant mineralization. Of these, 106 drill holes, representing 23,704.5 metres (77,770 feet) of drilling, were used to estimate the Johnny Lee Deposit Upper Zone resource. In addition, 47 of the 136 holes were used to estimate the Johnny Lee Deposit Lower Zone resource. Further, 17 of the 136 holes were used to estimate both Upper Zone and Lower Zone resources. Mineralization occurs as lenses of high grade copper, primarily chalcopyrite which is hosted within thicker and more extensive massive pyritic sulfide lenses, all of which are contained in un-mineralized shale and carbonate country rock. Zone boundaries are either faults and/or diminishing copper grades. Mike Lechner, president of Resource Modeling Inc., provided the new resource estimate as reported in a news release dated November 1, 2012.
Black Butte Copper Mineral Resource Estimate as of March 12, 2013Table 1 - Undiluted Measured and Indicated ("M&I") Resources at Black Butte Copper Project, MT, USA----------------------------------------------------------------------------UNDILUTED MEASURED RESOURCES - Johnny Lee Deposit---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal ------------------------------------------------------- Cu Cu Co Ag Cutoff Tonnes Cu Co Au Ag Lbs Lbs Au Ozs (%) (000) (%) (%) (g/t) (g/t) (Millions) (Millions) Ozs (000)----------------------------------------------------------------------------Upper Zone 1.60 2,659 2.99 0.118 0.007 16.3 175 6.9 598 1,393--------------------------------------------------------------------------------------------------------------------------------------------------------UNDILUTED INDICATED RESOURCES - Johnny Lee and Lowry Deposits---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal ------------------------------------------------- Cu Co Cu Lbs Lbs Ag Cutoff Tonnes Cu Co Au Ag (Mill- (Mill- Au Ozs (%) (000) (%) (%) (g/t) (g/t) ions) ions) Ozs (000)----------------------------------------------------------------------------Johnny Lee- Upper Zone 1.60 6,520 2.770.125 0.009 15.5 398 18.0 1,887 3,249----------------------------------------------------------------------------Johnny Lee - Lower Zone 1.50 2,387 6.400.033 0.304 4.5 337 1.7 23,330 345----------------------------------------------------------------------------Lowry - Middle Zone 1.6 4,099 2.94 0.10 0.006 15.1 266 9.0 800 1,990----------------------------------------------------------------------------TOTAL 13,006 3.49 0.10 0.062 13.4 1,001 28.7 26,017 5,584--------------------------------------------------------------------------------------------------------------------------------------------------------UNDILUTED MEASURED AND INDICATED RESOURCES - Johnny Lee and Lowry Deposits---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal ------------------------------------------------- Cu Co Lbs Lbs Ag Tonnes Cu Co Au Ag (Mill- (Mill- Au Ozs (000) (%) (%) (g/t) (g/t) ions) ions) Ozs (000)----------------------------------------------------------------------------Johnny Lee Upper and Lower Zones 11,566 3.57 0.100 0.069 13.4 910 26.6 25,815 4,987----------------------------------------------------------------------------Lowry Middle 4,099 2.94 0.100 0.006 15.1 266 9.0 800 1,990----------------------------------------------------------------------------TOTAL 15,655 3.40 0.10 0.053 13.9 1,176 35.6 26,615 6,977----------------------------------------------------------------------------Table 2 - Undiluted Inferred Resources at Black Butte Copper Project, MT, USA----------------------------------------------------------------------------UNDILUTED INFERRED RESOURCES - Johnny Lee Deposit---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal -------------------------------------------------------- Cu Cu Co Ag Cutoff Tonnes Cu Co Au Ag Lbs Lbs Au Ozs (%) (000) (%) (%) (g/t) (g/t) (Millions) (Millions) Ozs (000)----------------------------------------------------------------------------Upper Zone 1.60 1,255 2.520.102 0.008 15.2 70 2.8 323 613----------------------------------------------------------------------------Lower Zone 1.50 205 5.330.025 0.207 4.1 24 0.1 1,364 27----------------------------------------------------------------------------TOTAL 1,460 2.910.092 0.036 13.6 94 2.9 1,687 640--------------------------------------------------------------------------------------------------------------------------------------------------------UNDILUTED INFERRED RESOURCES - Lowry Deposit---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal ------------------------------------------------------ Cu Cu Co Ag Cutoff Tonnes Cu Co Au Ag Lbs Lbs Au Ozs (%) (000) (%) (%) (g/t) (g/t) (Millions) (Millions) Ozs (000)----------------------------------------------------------------------------Middle Zone 1.60 801 2.58 0.10 0.008 14.1 46 2 200 363----------------------------------------------------------------------------TOTAL 801 2.58 0.10 0.008 14.1 46 2 200 363--------------------------------------------------------------------------------------------------------------------------------------------------------UNDILUTED INFERRED RESOURCES - Johnny Lee and Lowry Deposits---------------------------------------------------------------------------- Estimated Metal Grades Estimated Contained Metal ---------------------------------------------------------- Ag Tonnes Cu Co Au Ag Cu Lbs Co Lbs Au Ozs (000) (%) (%) (g/t) (g/t) (Millions) (Millions) Ozs (000)----------------------------------------------------------------------------Johnny Lee 1,460 2.91 0.092 0.036 13.6 94 2.9 1,687 640----------------------------------------------------------------------------Lowry 801 2.58 0.10 0.008 14.1 46 2.0 200 363----------------------------------------------------------------------------GRAND TOTAL 2,261 2.80 0.09 0.026 13.8 140 4.9 1.887 1,003----------------------------------------------------------------------------Notes:1. Mineral resources have been classified according to the "CIM Standards onMineral Resources and Reserves: Definitions and Guidelines" (November 2010).The PEA contained herein is preliminary in nature and includes inferredMineral resources that are considered too speculative geologically to havethe economic considerations applied to them that would enable them to becategorized as Mineral reserves and there is no certainty that the PEA willbe realized.2. It cannot be assumed that all or any part of an Inferred resource will beupgraded to an Indicated resource, or that an Indicated Mineral resourcewill be upgraded to a Measured resource, as a result of continuedexploration. Mineral resources are not Mineral reserves and do not havedemonstrated economic viability. There is no certainty that all or any partof the Mineral resources will be converted into Mineral reserves. Mineralresources are global in situ totals.3. For the Johnny Lee Deposit Upper Zone, cutoff grade calculation is basedon assumed metal prices of US$2.75/lb for copper and an 81% recovery. Amining cost of US$59.00/tonne, processing costs of US$16.00/Tonne, and G&Acosts of US$5.00/tonne were assumed to form the basis for the resource cut-off determination. For the Johnny Lee Deposit Lower Zone, cutoff gradecalculation is based on an assumed metal price of US$2.75/lb. for copper andan 84% Cu recovery. A mining cost of US$50/tonne, processing costs ofUS$16/tonne, G&A costs of US$5.00/tonne, and refining costs ofUS$5.53/tonne, were assumed to form the basis for the resource cut-offdetermination. For the Lowry Deposit Middle Zone,, the 1.6% Cu cutoff gradecalculation is based on an assumed metal price of US$2.75/lb. for copper andan 81% Cu recovery. A mining cost of US$57/tonne, processing costs of US$16/tonne, and G&A costs of US$5.00/tonne were assumed to form the basis forthe resource cut-off determination. Note: these costs differ from those usedfor the cash flow model in the PEA.4. Mineral resource tonnage and contained metal quantities have been roundedto reflect the accuracy of the estimate, and thus the numbers may not sumdue to rounding.
