Mineralization of the Project is part of the volcanogenic massive sulphide (VMS), or volcanic-hosted massive sulphide (VHMS) spectrum of deposits. The Kutcho deposits are VMS deposits of the Kuroko type or felsic volcaniclastic depending upon the classification scheme. Mineralization is related to felsic volcanism in island arc or back-arc tectonic settings. Perhaps the most significant feature of VMS deposits from an exploration perspective is their tendency to occur in clusters. The Property contains three known Kuroko-type volcanogenic massive sulphide (VMS) deposits. They are aligned in a westerly plunging linear trend and from east to west they are called the Main, Sumac, and Esso deposits.

Mineralization occurs as three deposits along a 3.5 km trend. Sulphide minerals occur in a series of massive sulphide lenses and include pyrite, sphalerite, chalcopyrite, bornite, minor chalcocite, and trace tennantite, galena, digenite, djurleite, and idaite. Gangue minerals include quartz, dolomite, ankerite, sericite, gypsum, and anhydrite.

The three deposits form a westerly plunging linear trend, termed the Main, Sumac, and Esso deposits from east to west. The Main deposit comes to surface at its eastern end, whereas the Esso deposit occurs at depths about 400 m below surface,

Main Deposit
The Main deposit has an elliptical, lenticular shape with approximate dimensions of 1,600 m long, 500 m wide (down-dip), and approaching 40 m in true thickness in some areas. The long axis of the deposit plunges to the west at about 12°, just slightly less than the regional fold axes. The deposit is conformable with stratigraphy, dipping moderately to the north. There is a gentle warping of the deposit, such that the dip of the deposit changes from east to west and north to south. The shallowest dip (about 40°) occurs at the south-eastern edge and becomes progressively steeper (to about 60°) at the north-western edge. In general, the up-dip edge of the sulphide lens is narrow and pinches out, whereas the down-dip edge is thicker and interlayered with tuffaceous rock. Sulphide mineralogy of the deposit is relatively simple, consisting of pyrite, chalcopyrite, sphalerite, and bornite, with minor sulphide minerals chalcocite, tetrahedrite, digenite (and related minerals), galena, idaite, hessite, and electrum. Gangue minerals include quartz, dolomite, ankerite, sericite, gypsum, and anhydrite. The deposit appears to have formed from three hydrothermal-depositional cycles that began with barren pyrite at the base and grade into a copper-rich middle and zinc-rich top. Depositional cycles are commonly separated by layers of exhalative quartz and/or carbonate and minor volcanic ash. However, continued hydrothermal activity resulted in sulphide-replacement mineralization.

Sumac Deposit
The Sumac is located approximately 550 m west of the Main deposit, is nearly continuous with the Esso deposit and sits within a local depression relative to the Main and Esso deposits. A total of 20 drill holes at approximately 100 m spacing define the Sumac deposit. Better intercepts include 1.45% Cu, 2.56% Zn, and 23.7 g/t Ag over 26.1 m, 1.37% Cu, 1.9% Zn, and 26.2 g/t Ag over 23.4 m, and 1.94% Cu, 2.66% Zn, and 43.2 g/t Ag over 10.1 m. The Sumac deposit is finely banded but massive and competent, containing the highest sulphide content (>90%) of the three deposits. Alteration of the host stratigraphy around it is very similar to that of the Main and Esso deposits. The Sumac deposit is not fully delineated with drilling at present but with current knowledge can be described as having an elongated lens shape that commences close to surface near the Sumac Creek, with a strike length of approximately 800 m x 300 m in the dip plane and is up to 25 m in true thickness but averages approximately 12 m thick.

Esso Deposit
The Esso deposit is the deepest and most westerly massive sulphide lens and lies between 350 m and 650 m below the surface. It was discovered by following the westward trend of mineralization down plunge beyond the Main and Sumac deposit areas. The Esso deposit has an elongated lens shape with a strike length of approximately 900 m x 400 m in the dip plane and is up to 25 m in true thickness but averages approximately 12 m thick. Mineralization at the Esso deposit tends to be higher grade than at the Main or Sumac deposits and shows similar mineral zonation with copper or zinc in layers or zones, as well as zonation in thickness and grade from the central deposit area. Although the copper and zinc grades tend to be higher at Esso, the deposit contains significantly lower overall sulphide concentrations compared to the Main and Sumac deposits. Alteration at Esso is similar to the Main deposit, where sericite alteration of feldspars in the hanging wall is gradational from very weak at distances up to 50 m stratigraphically above to deposit, to very intense in proximity to the sulphide zone.

Other Mineralization
Other zones of mineralization include the footwall zone (FWZ), the hangingwall zone (HWZ) and the Jenn Area. The FWZ occurs approximately 120 m stratigraphically below the Main deposit and slightly up-dip and to the east of the centre of the Main deposit. The FWZ is relatively narrow, at 2–5 m thick, and relatively zinc-rich. The mineralization was only systematically drilled up to the historical Esso-Sumac property boundary, but several drill holes by SML (and more recently WKM) demonstrate that the FWZ does not extend for significant distances to the west and down-dip of its current position. The HWZ is a narrow band of relatively low-grade mineralization that occurs within 1–2 m to up to 15 m stratigraphically above the Main deposit. The HWZ is interpreted over a strike length of 1,300 m x 400 m on the dip plane and is often only 1–3 m in thickness.

Open pit mining is expected to be by conventional front-end loader and truck whereas underground mining will be done using longitudinal long-hole open stoping (LLHOS) methods.

Open pit mining of the Main deposit is expected to commence during the construction period and ramp up over a two-year period before reaching an estimated average steady production rate of 1.8 Mtpa of ore at the end of Year 1. The open pit has an estimated eight-year life with a total of 14.5 Mt of ore mined at an average strip ratio of 5.6:1. The open pit is mined in two phases, Phase 1 and Phase 2. Direct processing of higher-grade ore and stockpiling of lower-grade ore (for processing at the end of the mine life) is a significant component of the mine plan. Phase 1 waste is used in construction of the TMF embankment and excess is placed into a waste rock dump (WRD) alongside the pit. The WRD will separately store PAG (Potentially acid generating) and nPAG (not potentially acid generating) material. Once Phase 1 of the open pit mine is complete, Phase 2 PAG waste is backfilled directly into the void and excess is placed on WRD (mostly nPAG). A significant portion of the WRD (all the PAG rock component) rehandled into the Phase 2 void at the end of open pit mining operations. Including pre-production and ore/waste rehandling periods, the open pit life is 12.5 years.

The open pit mining equipment is planned to move up to 40,000tpd. The truck fleet comprises up to eight 90-tonne class rigid body dump trucks. Ore and waste loading will be by two 10 m3 wheel loaders and a 4 m3 tracked excavator. A 7 m3 wheel loader will be oxidized for ROM stockpile rehandling. Blast hole drilling by two down-the-hole hammer drill rigs will be completed on 5 m bench intervals for mixed ore and waste and 10 m benches for waste. Ancillary equipment will support the open pit mining operation, site surface activities and maintenance of the various access roads.

A single portal provides access to both the Main and Esso deposits. The time between first commencement on the underground portal and first ore mining is short at around nine months. The first ore is accessed from the Main deposit at 340 m from the portal entrance. The access ramp then spirals to access additional mining levels before splitting to access Main ore further to the east and also driving west to the Esso deposit. The ramps would be utilized to haul ore and waste to the surface, backfill from the surface to the stopes and to provide access for personnel, equipment, materials, and services. Additionally, the ramps form part of the mine dewatering and air ventilation circuit. The Main underground mine is located beneath the Main open pit and is separated from it by a 25 m wide crown pillar. The top of the Esso deposit is approximately 400 m below surface and is accessed by an 1,800 m connecting ramp extending from the Main ramp system. Further ramps are required to access the production stopes in the Main and Esso mines. The total ramp length for both mines are anticipated to be 5,437 m.

Underground mining of both the Main and Esso deposits is expected to be by longitudinal long-hole open stoping (LLHOS). The stopes will be backfilled using cemented rock fill (mostly ore sorter reject from the processing plant) and are planned to utilize temporary rib pillars and cable bolting as primary stope support measures. The underground portion of the Main deposit is expected to have a three-year mine life, extending from Year -1 to Year 2. Total ore production from Main underground is estimated to be 0.6 Mt and is planned to be mined at an average rate of 600 tpd although it on a quarterly basis it peaks at about 900 tpd. Underground mining of the Main deposit finishes early in the life of the open pit. Consequently, there is minimal interference between the two operations. The 25 m crown pillar is not planned for recovery.

Production from the Esso deposit is expected to commence in Year 2 and ramp up to full production in the following year. Total projected ore production from Esso is 2.2 Mt at a steady state ore production rate of 0.3 Mtpa or 860 tpd. At these production rates, the mine life for Esso is estimated at nine years excluding pre-production which adds a further two years. Esso ore contains higher average grades of copper and zinc than the Main deposit. Consequently, even with the higher cost of underground mining ore production from Esso is scheduled as early as possible.

Crushing Operations
The ROM material will feed a dump pocket via a stationary grizzly (800 mm x 800 mm) at an average rate of 268 tph. Grizzly oversize will be broken by a rock breaker. Grizzly undersize will be discharged to a dump hopper and fed via a vibrating grizzly feeder to the primary jaw crusher (132 kW) with a closed size setting (CSS) of 85 mm. The primary circuit product size will be approximately eighty percent passing (P80) 95 mm. The jaw crusher discharge and vibrating grizzly undersize combine on the jaw crusher discharge conveyor that feeds the primary screen feed conveyor.

The primary screen feed conveyor feeds the primary double deck screen (1.8 m x 6.1 m). Three size fractions will be produced from the screen: +75 mm, -75 mm +25 mm and -25 mm. The oversize (+75 mm) will be sent to a cone crusher and the middle and undersize fractions combine to feed the secondary double deck screen. The oversize material feeds the cone crusher feed conveyor and discharges into the cone crusher feed bin. A pan feeder under the bin will feed the cone crusher (132 kW). The cone crusher CSS is set at 40 mm with a product P80 of approximately 50 mm. The cone crusher discharges onto a transfer conveyor and then onto the primary screen feed conveyor.

The primary double deck screen middle and undersize fractions feed the secondary double deck screen (1.8 m x 6.1 m). The screen decks divide the material into three sizes: +25 mm, -25 mm +12.5 mm and -12.5 mm. The oversize material (+25 mm) will feed the coarse ore sorter and the middle size material (-25 mm +12.5 mm) will feed the fine ore sorter. The secondary screen undersize will discharge onto the crushed ore bin feed conveyor. This fine and coarse ore sorter product will also discharge onto this conveyor once the sorting of ore grade material and waste is complete. Two streams will be produced from the crushing and ore sorting circuits. The crushed ore, secondary screen undersize and ore sorter product, will feed an 1,800-tonne bin and the ore sorter waste will feed a 730-tonne bin. The crushed ore will be reclaimed from the bin by two belt feeders to feed the SAG mill feed conveyor. The waste discharged into the bin will be removed by trucks.

Grinding Circuit Operations
The crushed ore will be reclaimed from the crushed ore bin by two belt feeders at a controlled rate of 178 tph to feed the semi autogenous grinding (SAG) mill. Reclaimed material from the crushed ore bin at a feed size F80 of approximately 50 mm will feed a 6.1 m diameter x 3.0 m long, 2,000 kW SAG mill, with a variable frequency drive (VFD) to control the speed, via the SAG mill feed conveyor. A belt-scale on the feed conveyor will monitor feed rate. The SAG mill will operate with 100% circulating load in closed circuit with the cyclone cluster. Process water will be added to the SAG mill to maintain the slurry charge in the mill at a constant density of 72%. Ground slurry from the SAG mill will flow through a trommel to the SAG mill pump box to feed a cyclone cluster.

The SAG mill pump box slurry will be pumped to 4 place-380 mm cyclones (three operating) for classification. The coarse cyclone undersize will flow by gravity back to the SAG mill to combine with the crushed ore new feed. The cyclone overflow with a T80 transfer size in the range of 600 µm will flow to the secondary grinding circuit. Secondary grinding will take place in a 5.0 m diameter x 7.6 m long, 3,250 kW ball mill supplied with a VFD. The ball mill will operate with a 300% circulating load in closed circuit with a cyclone cluster. The ball mill, at a target density of 70%, will discharge through a trommel into the ball mill pump box and pumped to the ball mill grinding cyclones. The cyclone cluster consists of eight place-380 mm cyclones (five operating). The cyclone underflow will report back to the ball mill and combine with the SAG mill grinding cyclone overflow. The cyclone overflow will be directed to the copper flotation circuit at a target P80 of 55 µm and 35% solids. Steel balls will be used as the grinding media. Zinc sulphate will be added to the ball mill pump box.

Process Design Criteria
Conceptual design criteria for major equipment of the 4,500 tpd crushing and ore sorting circuits, and the 3,940 tpd grinding and flotation circuits.

Process Description
A 4,500 tpd crushing plant for the Project to process the volcanogenic massive sulphide (VMS) mineralization is proposed. The crushing plant will operate at 70% availability. The process plant is assumed to operate 365 days per year at 92% availability at a rate of 3,940 tpd after the ore sorting circuit. The plant feed will be crushed, sorted to remove low grade material, ground and then sequentially subjected to copper and zinc flotation. The metals contributing to revenue in the produced concentrates are copper, zinc, gold, and silver. The zinc tailings will be pumped to the TMF for disposal. The copper and zinc concentrates will be thickened and dewatered before loading onto semi trailer trucks. Precious metals will be contained in and shipped with the copper and zinc co ........