The Copperstone deposit is a mid-Tertiary, detachment fault related gold deposit. Mineralization is predominantly controlled by the northwest trending shallow angle Copperstone fault and shear zone. These structures are not confined to any lithologic unit, although the majority of the mineralization is hosted in quartz latite porphyry. Breccia textures as well as chloritization, silicification, and hematite and specularite flooding are reliable indications of gold mineralization.

The Copperstone deposit is presently best described as a mid-Tertiary, detachment-fault related gold deposit. Detachment faults are low-angle (up to 30°) normal faults of regional extent that have accommodated significant regional extension by upward movement of the foot-wall (lower-plate) producing horizontal displacements on the order of tens of kilometers. Common features of these faults are supracrustal rocks in the upper-plate on top of lower-plate rocks that were once at middle and lower crustal depths, mylonitization in lower plate rocks that are cut by the brittle detachment fault, and listric and planar normal faults bounding half-graben basins in the upper plate (Davis and Lister, 1988).

Gold mineralization at Copperstone occurs in the hanging wall of the Moon Mountain detachment fault, which has not been penetrated in drilling to date. Gold mineralization is largely restricted to the immediate vicinity of the Copperstone fault (also referred to as the Copperstone shear or the Copperstone structure), a moderately northeast-dipping, semi-planar zone of shear which is interpreted as a listric splay of the Moon Mountain detachment, and which has hosted the bulk of the gold historically produced from the Copperstone mine. The Copperstone fault strikes about N30° to 60°W and dips from 20° to 50° to the northeast. The associated brecciated fault zone ranges from 45 ft to 180 ft in width with characteristic fault gouge, multiphase breccia textures, shear fabric, and intense fracture sets across this width (MDA, 2000).

The Copperstone fault appears to be a brittle deformation feature situated within the extremely deformed upper plate volcanic sequence. The fault presents strong evidence of shearing, with schistose textures and conjugate sets of planar and curved faults indicated by fault gouge. Brecciation is observable in the open pit, as are steeply northeast dipping, northwest-striking fractures and narrow shear zones. Mineralization is known to occur in association with both the primary Copperstone listric fault as well as high-angle, secondary fault structures. All mineralization appears to be cut off at the southeastern edge of the pit by a northeaststriking fault that dips to the southeast. Most of the fractures in the volcanic sequence are highly irregular and discontinuous, but the Copperstone structure has remained a dependable target for exploration and mining.

Mineralization in the A, B, and C zones occurs along the primary Copperstone fault as well secondary structures within the zone of shear. Underground mapping has shown a number of steeper northwesttrending faults and fractures that localize alteration and mineralization in and around quartz-Fe oxide+/-Cu oxide veins. Observations show that where such high-angle structures intersect the low-angle (Copperstone fault) structures, a favorable site is prepared. Where the Copperstone listric fault is disrupted, a dilatant zone may occur, resulting in higher grade and thickness of the gold mineralization.

A mechanized cut and fill mining method is planned to extract the Copperstone deposit.

The mining method proposed for the Copperstone Project is a mechanized cut and fill using Cemented Rock Fil (CRF). Cut and fill was chosen for its flexibility in effectively mining low vein dip angles. The method also minimizes the amount of dilution during mining by careful geological and management control of the mining.

Cut and fill stoping involves accessing the ore from a main ramp. The initial stope access is driven down grade to the waste/ore contact and then extended through the mineralization to the hanging wall contact. Once the hanging wall has been located, longitudinal panels are mined perpendicular to the access drift, along strike, to the stope ends. The cut and fill design is based on 12 ft. high stopes. The 12 ft. height was chosen primarily to reduce dilution and to improve ground conditions but still allow for the proposed equipment to fit inside the stope. In narrow orebody areas that are inclined at 38°, a significant amount of waste will be generated at the hanging wall and footwall contacts in order to recover all the ore. This percentage of waste in narrow areas increases as a function of the stope height. As the ore width increases, the percentage dilution reduces significantly. A reduction in the amount of waste mined was achieved by implementing a shanty back of 60° on the stope hangingwall. Hangingwall instability can be a problem in shanty back stopes where bed separation can cause failures, this problem can be exacerbated with greater stope heights. Ground support will have to be installed quickly on the hangingwall in order minimize stability issues with the stope back.

Orebody width varies considerably over the property and total stope widths range between 8.9 ft and 95 ft wide, the average total stope width is 21 ft. Where stope widths exceed 16 ft. horizontally, it will be necessary to extract multiple side- by-side drifts (passes) on each cut in order to limit the mining span. After stopes are split into the required drift passes the average actual mining width is 11.7 ft. Up to six passes will be required but the majority of the stopes, approximate 89%, will be one and two pass stopes. Stope lengths average approximately 100 ft, with a few extending beyond 400 ft.

During ore mining, each stope is calculated to produce at a rate of 168 tpd. In order to meet the required total mine ore production of 600 tpd 3.5 stopes will have to be in production at all times. Based on the required backfill time, development and unanticipated delays a total of 6 active faces were scheduled at a time. The 168 t/d rate is based on two 10-hour shifts cycling a round/day.

The underground ore production requirement of 600 tpd on average is used to develop the production schedule. The nominal stope heading size will be 12 ft. high x 10 ft. wide. This heading size will allow the engineering design team and the ore control geology group the flexibility to maximize the gold grade from the underground mine. The mining cycle involves drilling, blasting, mucking and ground control cycle.

Kerr Mines and HRC contracted Resource Development Inc (RDi) to carry out new metallurgical testing for the Copperstone deposit, confirm prior metallurgical testwork, and evaluate processing options from an economic perspective. Tests were completed for 3 process options: 1) flotation producing a gold concentrate, 2) flotation with leaching of gold concentrate, and 3) whole ore leaching. Options 2 and 3 produce a doré bar as a final saleable product. The ability to produce a doré bar is considerably advantageous versus sale of a gold concentrate from an offtake revenue perspective. Testing also focused on confirming Bond ball work indexes and density values. The test work results indicated a 97% recovery of gold, while the other processes were 88% to 90% recovery. Based upon economic and technical analysis, whole ore leaching was chosen as the best processing option for the Copperstone deposit. The WOL process can also be readily modified to incorporate SART process to produce copper a ........