The mineral deposit type at the Florence Copper site is an extensive, Laramide type of porphyry copper deposit consisting of a large core of copper sulfide mineralization underlying a zone of copper oxide mineralization. The central portion of the deposit is overlain by approximately 400 feet of flat-lying conglomerate and alluvial material that contains a fine-grained silt and clay interbed. The oxide and sulfide zones are separated from one another by a transition zone ranging on average from 0 to 55 feet in thickness. The depth and grade of the sulfide zone renders it currently uneconomic to mine by conventional mining methods. The impermeability and mineralization of the sulfide zone renders it uneconomic for ISCR methods.

Approximately 71% of the oxide mineralization is hosted by a Precambrian quartz monzonite and 26% by Tertiary granodiorite porphyry. The remaining igneous rocks associated with the deposit are Precambrian diabase and Tertiary andesite, latite, dacite, basalt, and aplite. The deposit occurs in a structural horst block, which is bounded on the east and west by grabens and is controlled by normal faults trending north to northwest.

The deposit type is a typical southwestern U.S. porphyry copper deposit. The United States Geological Survey classification of the porphyry copper mineralization at the Florence deposit is model 21a (porphyry Cu-Mo). This model type is described as stockwork veinlets of quartz, chalcopyrite, and molybdenite in or near a porphyritic intrusion with rock types of porphyritic tonalite to monzogranite stocks and breccia pipes intrusive into batholithic, volcanic or sedimentary rocks. The typical mineralogy consists of chalcopyrite, pyrite, and molybdenite, with peripheral vein or replacement deposits with chalcopyrite, sphalerite, galena, and gold, with outermost zone of veins of Cu-AgSb-sulfides, barite, and gold. Typical alteration consists of quartz, K-feldspar, biotite, chlorite, and anhydrite (potassic alteration) grading outward to propylitic alteration. Late white mica and clay (phyllic) alteration may form capping or outer zones or may affect the entire deposit.

The mineralized zones consist of an iron-enriched leached cap, an oxide zone, and an underlying sulfide zone. In most instances, the transition from the copper silicates and oxides to the sulfide zone is quite abrupt. A majority of the copper oxide mineralization is located along fracture surfaces, but chrysocolla and copper-bearing clay minerals also replace feldspar minerals in the granodiorite porphyry and quartz monzonite. A barren or very low-grade zone, dominated by iron oxide and clay minerals, caps some portions of the top of bedrock especially in the western area. The mineralization on the eastern periphery of the deposit is typical of most Arizona porphyry copper deposits. The thickness of the oxide zone ranges from 40 feet to 1,000 feet, and has an average thickness of 400 feet. The top of the oxide zone begins below 400-425 feet of alluvial and basin- fill material. The lateral extent of mineralization in plan is approximately 3,500 feet across in an east-west direction and from 1,500 feet to over 3,000 feet across in a north-south direction.

The main type of mineralization is oxide with underlying sulfide separated by a transition oxidation zone. The underlying sulfide zone, because of its depth, low permeability, and relatively non-soluble mineralogy, is not favorable to develop by ISCR methods.

Mineralization in the oxide zone consists of chrysocolla, “copper wad,” tenorite, cuprite, native copper, and trace azurite, and brochantite. The majority of the copper occurs as chrysocolla in veins and fracture fillings, while the remainder occurs as copper-bearing clays in fracture fillings and former plagioclase sites. The fracturecontrolled mineralogy within the Florence deposit indicates that copper is not adsorbed onto the clay surfaces, but rather the copper resides in the octahedral site of the clays. The “copper wad” appears to be an amorphous mix of manganese, iron, and copper oxides that occurs as dendrites, spots, and irregular coatings on fracture surfaces. Cuprite occurs locally smeared out along goethite/hematite-coated fracture surfaces; the chalcotrichite variety of cuprite is also present on fractures or vugs, sometimes intergrown with native copper crystals.

The main hypogene sulfide minerals are chalcopyrite, pyrite, and molybdenite with minor chalcocite and covellite. Supergene chalcocite coats pyrite and chalcocite and dusts fracture surfaces. The supergene chalcocite blanket is very thin and irregular (zero to 50 feet). In most instances, the transition from the copper silicates and oxides to the sulfide zone is quite abrupt.

In general, the grade of oxide mineralization is very similar to that of the primary sulfide mineralization. The overall grade of the oxide and sulfide mineralization is approximately 0.36% TCu and 0.27% TCu, respectively.

Hydrothermal alteration accompanied the intrusion and cooling of the Tertiary granodiorite porphyry stocks and dikes into the Precambrian quartz monzonite. Alteration in the granodiorite porphyry is primarily veinlet-controlled, whereas alteration in the quartz monzonite encompasses all three styles; pervasive, selectively pervasive, and veinlet-controlled. Potassic alteration (quartz- orthoclase-biotite-sericite) is the dominant alteration assemblage. Salmon-colored, secondary orthoclase replaces primary orthoclase phenocrysts, rims quartz ± biotite veins, and occurs as pervasive orthoclase flooding. Shreddy, secondary brown biotite replaces plagioclase and matrix feldspars, and occurs in biotite-sulfide veinlets.

A sericitic (quartz-sericite-pyrite) alteration zone surrounds the potassic zone and is especially evident in the deep portions of the sulfide mineralization. Fine-grained sericite selectively replaces plagioclase, orthoclase, and biotite, and forms thin alteration selvages along quartz ±sulfide veins. Propylitic (calcite-chlorite-epidote) alteration is visible in mafic dike rocks and is reported in exploration holes fringing the deposit.

The most noticeable feature in the oxide mineralized material zone is a late-stage argillic alteration assemblage consisting of montmorillonite - kaolinite ± illite ± halloysite. The conversion of sericite to clay minerals in plagioclase phenocrysts and along fracture surfaces is selectively pervasive. X-ray diffraction analyses indicated the clay is primarily a mixture of calcium-montmorillonite and kaolinite. These clay-altered plagioclase sites were favorable loci for remobilized copper generated from natural insitu leaching.

Florence Copper is located in a serviced area within the town of Florence, Arizona. The site has, or has access in close proximity, to the supporting infrastructure required for the planned ISCR operations including road access, rail access, power, water and natural gas.

The mining method proposed for the Florence Copper Project (FCP) is the in-situ copper recovery (ISCR) method.

In-situ recovery extracts the target element or mineral in a deposit by passing a process solution containing a lixiviant through the mineral deposit, and consequently does not require many of the activities typically associated with mining.

The ISCR process selected for the FCP involves the installation of injection and recovery wells to pass a weak sulfuric acid solution, called raffinate, through targeted portions of the mineral deposit. The raffinate passes through natural fractures and voids in the deposit and dissolves the copper mineralization. The copper laden solution, known as pregnant leach solution (“PLS”), is collected in recovery wells where it is pumped to the surface for processing by solvent extraction and electrowinning (“SX/EW”). The SX/EW plant selectively removes copper from the PLS producing raffinate solution to be recirculated to the well field and copper cathode product.

Sweep efficiency is a term used to define the percentage of the mineralized material body contacted by injected solutions within a given injection and recovery well spacing and pattern under purely advective flow conditions. Sweep efficiency varies based on a combination of formation hydrologic properties, well spacing, and well layout pattern. The well layout for the FCP uses a five-spot well pattern. The five-spot pattern will be arranged with one injection well at the center, and four recovery wells at the corners of each square cell.

The FCP well field spacing will be 100 feet from injection to injection well and recovery to recovery well yielding a distance of approximately 70 feet between injection and recovery wells. Florence Copper will refine the estimated sweep efficiency based on operational data obtained from the operation of the PTF.

Florence Copper will utilize solvent extraction (“SX”) and electrowinning (“EW”) to recover copper from the pregnant leach solution (“PLS”) produced in the ISCR well field. A water treatment plant will be employed to recycle water used for rinsing completed portions of the ISCR well field to minimize site water use.

The PLS and raffinate ponds are located east of the well field. The ponds are designed with 10 hours of retention time to provide operational flexibility for both the SX Plant and the ISCR well field. The process ponds are designed with a double high density polyethylene liner system in accordance with BADCT standards. The Raffinate Pond is equipped with a pumping system to deliver raffinate to the well field and the PLS Pond is equipped with a pumping system to feed PLS to the SX plant.

The SX plant is located to the east of the process ponds and consists of four reverse-flow mixer- settlers and associated facilities. The plant is designed to handle a ........