As outlined in the above tables, at a 4% combined lead/zinc grade the indicated resource has increased by 34% and the inferred resource has increased by 24% since the 2012 resource estimation was calculated.
Exploration, development and capital expenditures on the property were $6.1 million compared to $9.9 million in 2011.
OUTLOOK FOR 2013
OPERATIONS, EARNINGS AND CASH FLOW
Base and precious metals production allocable to Imperial in 2013 from the Mount Polley, Huckleberry and Sterling mines is anticipated to be 58.5 million pounds copper, 54,600 ounces gold and 195,000 ounces silver. Cash flow from the Company's operations and the corporate line of credit funded the exploration and development programs of 2012. Additional financing will be required in 2013 to fund accelerating expenditures at Red Chris. Management plans to finance a large part of the Red Chris development costs through a debt facility to minimize equity dilution.
Cash flow protection for 2013 is supported by derivative instruments that will see the Company receive certain minimum average copper prices and exchange rates as disclosed under the heading Derivative Instruments. However, the quarterly revenues will fluctuate depending on copper and gold prices, the US Dollar/CDN Dollar exchange rate, and the timing of concentrate sales which is dependent on concentrate production and the availability and scheduling of transportation.
Exploration in 2013 will be limited in scope and focus on exploration at our existing mining operations: Mount Polley, Huckleberry and Sterling. Ongoing exploration at Mount Polley will continue to focus on defining underground higher grade mineralization at the Boundary zone, and further testing of the mineralized zones in the vicinity of the Springer pit. Ruddock Creek exploration will be funded by Imperial and the joint venture partners. Underground development and drilling at Sterling will continue in the 144 zone. The Company continues to evaluate exploration opportunities both on currently owned properties and new prospects.
At Mount Polley the focus will be on increasing mining productivity to ensure the stripping required to access the deeper Springer ore is completed in a timely and cost effective manner. The first underground stoping operations in the Boundary zone are expected to begin this year. Mount Polley is expected to produce 38.5 million pounds copper, 43,000 ounces gold and 100,000 ounces silver in 2013.
At Huckleberry the focus will be the completion and commissioning of the new tailings storage facility (TMF3). Huckleberry is expected to produce 40.0 million pounds copper, 3,200 ounces gold and 190,000 ounces silver in 2013.
Engineering at Red Chris was 81% complete as of February 28, 2013. In 2013 the focus on-site will be the erection of the mill building and to have the structure enclosed by October 2013. This will enable the installation of equipment inside the building to proceed during the winter of 2013-2014 and start commissioning in May 2014. Key to meeting this schedule will be the completion of the 287kV Northwest Transmission Line (NTL) from Skeena substation to Bob Quinn, and a 93 kilometre extension from Bob Quinn to Tatogga (NTL Extension). Further to an agreement recently signed by the Company and BC Hydro, the NTL Extension will be constructed by a subsidiary of Imperial. Upon completion, the NTL Extension will be acquired by BC Hydro. That portion of the costs which exceeds $52.0 million will be borne by Imperial as its contribution to the NTL Extension in order to make the 287kV service connection to the Red Chris mine. The expected in service date for both the NTL Extension and the NTL is May 31, 2014. Construction of the NTL Extension will commence upon receipt of required permits.
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