Tetra Tech's PEA incorporates a January 23, 2013 NI 43-101 compliant mineral resource estimate and model for the Baptiste deposit developed by Caracle Creek International Consulting Inc. (see First Point's February 6, 2013 news release). The resource estimate is shown below in Table 1.
Table 1: Baptiste Deposit Mineral Resource Estimate(i):Category Tonnes(ii) Davis Tube Recoverable Nickel Content -------------------------------------------------- (% Ni) (Tonnes) (Pounds)Indicated 1,159,510,000 0.124 1,437,800 3,169,700,000Inferred 870,400,000 0.125 1,088,000 2,398,600,000
(i) Note: Reported at a cut-off grade of 0.06% Davis Tube Recoverable ("DTR") nickel. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(ii) Ore Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant digits.
The PEA is based on 925 million tonnes of mineralized resources constrained by a GEMCOM Whittle pit, using a conservative overall operating cost, while allowing for 8% mine dilution, 82% process recovery and engineering 45 degree pit slopes and a life-of-mine stripping ratio of 0.17:1.
Table 2 below sets out the tonnage and grade of material mined and processed that form the basis for Tetra Tech's economic assessment based on 40 million tonnes per year being mined over the life of mine ("LOM").
Table 2: Tonnage of Mineralized Material Mined and Processed as a Basis for the PEATonnes Nickel Content -------------------------------------------- (% Ni) (Tonnes) (Pounds)925,268,000 0.118 1,094,000 2,411,100,000
It should be noted that approximately 21% of the tonnage of the material that forms the basis of the PEA is derived from inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.
The Baptiste deposit remains open along strike in both directions, to the southeast in the higher-grade south-central area and at depth over the entire system providing future potential to significantly increase the size of the resource. Further drilling to determine the extent of the higher-grade mineralization in the southeast area is recommended by Caracle Creek. The limited amount of exploration drilling on the Decar property completed to date also clearly indicates there is substantial potential for additional discoveries.
The potential for additional similar nickel-iron alloy mineralization at Decar is illustrated by limited drilling on the Sidney and Target B prospects in 2010 and 2011, respectively. The Sidney target area is located 3 kilometres north of Baptiste on a broad ridge at approximately 600 metres higher elevation. The Sidney target currently measures 500 by 400 metres by surface mapping and is open to the northwest and southeast, where it is covered by overburden. Sidney was drilled with two holes in 2010 that intersected a previously reported 0.129% nickel-in-alloy across 163 metres in the lower half of hole 10SID-09 and 0.143% nickel-in-alloy across 282 metres in hole 10SID-10 (see First Point's news release dated October 19, 2010).