The mineral deposit type being investigated at the Perry Creek Mine is bituminous coal that occurs in consistent seams of mineable thickness in sedimentary rock formations. The coal seams were deposited in an alluvial deltaic environment and therefore vary somewhat in thickness and ash content.

The rock formations on the Property are folded and faulted due to post-depositional tectonic activity. The Perry Creek structure consists of a broad, open fold with a dip of less than 30º and exhibits no evidence of significant faulting. The Perry Creek Area is therefore of Moderate geology type, as defined under GSC 88-21.

The geologic model being applied in the investigation is similar to any bedded sedimentary deposit model. The coal seams are prevalent and continuous in the Gates Formation. The Gates Formation occurs over a relative large region and the seams under investigation were mined at large open pit mines nearby.

The mineralized zones encountered on the Property contain low- to medium-volatile bituminous grade coal seams that, with standard processing to remove impurities, will yield coking coal suitable for use in steel making.

In the Perry Creek Area, the mineralized zone occurs within an area measuring approximately 3 km wide and 3.5 km along strike. Within this area, four main coal seams have been identified as E Seam, F Seam, G Seam, and J Seam, in descending stratigraphic order. The seams are continuous over the area.

Open pit mining began at Perry Creek Mine in 2006. Mining was stopped due to low coal prices and the mine was placed on Care and Maintenance in 2014. In 2016, Perry Creek was purchased by Conuma Coal Resources Ltd., and production at the Perry Creek (Wolverine) mine was resumed late in 2016.

The mine plan and production schedule is based on a pit shell developed under the criteria of WCCC coal pricing and exchange rate forecasts. The remainder of the Perry Creek Mine reserve has been scheduled to produce 2.1 million tones per year of coking coal product. The operation is planned to continue to use surface open pit mining methods utilizing shovels, trucks and ancillary equipment. The mine utilizes standard open pit mining equipment that is primarily diesel fuel-powered, with one electric powered cable shovel on site. The remainder of the equipment includes hydraulic shovels and backhoes for waste stripping and coal mining, rotary drills for waste drilling and blasting, rear-dump off-highway mine trucks and standard auxiliary equipment such as dozers, graders, fuel and lube trucks, maintenance trucks and other items.

Previous owners commissioned independent coal laboratories to perform standard washability testing on coal core samples and bulk samples to estimate product yields and for process plant design. The coal washability tests were performed following ASTM standards for coal testing.

Based on these data, the Perry Creek seams have caking (swelling and plastic) properties that identify the coals as being of metallurgical quality.

Hard Coking Coal from Wolverine is washed at its plant on-site and then trucked to the Brule mine, where it is transferred by rail to the Willow Creek mine for washing, and then to Prince Rupert for shipping.

The coal preparation plant flow sheet uses standard coal processing equipment including heavy media cyclones for coarse coal, water only cyclones and spirals for intermediate sizes and flotation for fine coal recovery.