The Wellgreen Deposit is hosted in the Quill Creek Complex, one of a number of mafic-ultramafic sills that are enriched in nickel-copper-PGM mineralization that outcrop within the Kluane Ultramafic Belt of the Wrangellia Terrane in southwestern Yukon. The sills which form the Kluane mafic-ultramafic complex are thought to be part of a sub-volcanic system that feed the Nikolai Formation flood basalts and have been compared to the Noril’sk Deposit in Russia.

Property Geology
The Wellgreen Deposit occurs within, and along, the lower margin of an Upper Triassic (Kluane) ultramafic-mafic body, within the Quill Creek Complex. This assemblage of mafic-ultramafic rocks is 20 km long and closely intrudes along the contact between the Station Creek and Hasen Creek formations. The main mass of the Quill Creek Complex, the Wellgreen Deposit, and Quill intrusions, is 4.7 km long and up to 1 km wide.

The Wellgreen Deposit portion of the Quill Creek Complex consists of a main intrusion and an associated group of upright to locally overturned, steeply south dipping sills.

Mineralization
Mineralization on the Project occurs dominantly within the Quill Creek Complex except for a small portion at the contact within the metasedimentary host rocks. This serpentinized, ultramaficgabbroic body intrudes the Pennsylvanian-Permian sedimentary and volcanic rocks of the Station Creek and Hasen Creek formations. The main zone of mineralization has a strike length of 1.7 km and thickness ranges from 20 m on the western end to almost 300 m at the eastern end. Drilling intercepts have indicated the mineralization ranges in depth from several metres at the west of the deposit to over 500 m at the eastern side. Discontinuous massive and semi-massive sulphide zones are significantly thinner (centimeters to a few metres), are located near the footwall contact and transition into disseminated sulfide zones above. Historic exploration and development programs defined two main zones of gabbro-hosted massive and disseminated sulphide mineralization known as the East Zone and West Zone. These zones have since been determined to be contiguous and have been further broken up and now are known as the Far East, East, West, and Far West Zones with the connecting Central Zone.

Far East Zone
The Far East Zone represents the easternmost part of the Wellgreen Deposit intrusion. The zone lies between 578250E and Arid Creek, at approximately 578750E. In both the current East and Far East Zones, historic exploration efforts focused on defining massive sulfide horizons and lenses near the contact between the Project Intrusion and Hasen Creek metasedimentary rocks and as such this contact is very well defined. This sedimentary contact was historically interpreted to be the steeply dipping southern footwall to mineralization based on the data available at the time, but more recent work in the East Zone showed the sedimentary contact was a wedge of metasedimentary rocks in a much larger ultramafic body. This change in understanding the nature of the sedimentary contact was demonstrated in the Far East Zone by drill holes 154, 160, and 165.

The typical steeply-dipping lithological sequence of peridotite, clinopyroxenite, and gabbro with massive sulphide is very well defined in the Far East Zone. The core of the Far East Zone shows a sulphide-rich, clinopyroxenite, and gabbro/skarn horizon with a second clinopyroxenite and gabbro enriched zone at the lower contact with the metasediments.

In the easternmost portion of the Far East Zone, all lithologies exhibit a similar sub-horizontal dip to the symmetrical sequence further west: peridotite transitioning to clinopyroxenite, and gabbro with skarn units and massive sulphide immediately prior to the basal contact with Station Creek volcaniclastics and Hasen Creek metasedimentary rocks. This lower sequence is interpreted to be contiguous with the basal sequence observed 350 m farther to the west. In addition, the footwedge pinches out to the east such that in the upper portion of the intrusion, the various contact proximal lithologies are absent.

East Zone
The East Zone lies between 577900E and 578250E and was historically explored for massive sulphide at the footwall contact. As mentioned above, this zone was the first in which the change in the footwall contacts’ orientation was observed in drill core. The peridotite-clinopyroxenite-gabbro sequence is observed to wrap around the base of the wedge in the East Zone. The historic East Zone (current East and Far East Zones combined) was mined by Hudson-Yukon in 1972 and 1973, and approximately 171,652 t of mineralized material was extracted.

Central Zone
The Central Zone lies between 577500E and 577900E. The eastern portion of the zone is similar to the East Zone whereby well-mineralized peridotite gradationally transitions to clinopyroxenite and gabbro, and units are observed near the contact with dominantly Hasen Creek metasedimentary rocks. The western portion of the Central Zone exhibits a sub-horizontal, symmetrical, mineralized unit similar to that intersected at depth in the Far East Zone. Additional drilling will be required to test whether the higher-grade, sub-horizontal, mineralization intersected in the Central Zone connects with that in the East and Far East zones. This represents a high priority exploration target, and currently is the least drilled zone on the Project.

West Zone
The West Zone lies between 577120E and 577500E. Similar to the western portion of the Central Zone, well-mineralized peridotite overlies a comparatively thick package of clinopyroxenite and gabbro with significant semi-massive and massive sulphide zones.

Far West Zone
The Far West Zone lies between 576720E and 577120E, and the northern part of the zone is interpreted to be a branching sill from the main Project intrusion. This sill is generally zoned outwards, well mineralized in the centre, grading from peridotite to clinopyroxenite and gabbro towards the contact with the metasedimentary country rocks. Grades in the Far West Zone are significantly elevated starting at surface with high sulphide content.

North Arm Zone
The North Arm Zone is located in the east-central portion of a narrow 1,200 m long sill, positioned approximately 150 m below the main Project intrusion. It was discovered by Hudson-Yukon in the 1950s and explored in 1987 with three drill holes by All-North. All of these drill holes intersected mineralization. The geology of this zone is similar to both the East and West Zones. Mineralization consists of massive sulphide lenses, disseminated sulphide in gabbro and clinopyroxenite, and fracture fillings in footwall Hasen Creek metasedimentary rocks. The North Arm Zone was tested in 1988 and 2005 by limited drilling and was determined to have a subvertical dip. The information collected to-date suggests the North Arm Zone is relatively narrow in comparison with the main Project body at surface, but it does represent a prospective area of nickel-copper mineralization that warrants further work and may be contiguous with the main Project intrusion at depth towards the eastern end of the deposit.

The Wellgreen deposit is amenable to large scale open pit mining with portions of high grade zones at depth having potential for extraction by underground mining methods.

Open Pit
SNC-Lavalin Inc. (SNC) evaluated the open pit potential of the Property at a mill feed rate of 25,000 t/day increasing to 50,000 t/day in Year 6. The ultimate pit for the 2015 PEA base case is scheduled to be phased into four preliminary pushbacks. Mining cut-offs and stockpiling grades would be established for each pushback to target higher-grade mill feed.

Mill feed is planned to be hauled directly to the crusher and low grade material would be hauled to the long term stockpile and processed at the end of the mine life. Waste rock is planned to be hauled to the 1540 dump and the tailings management facility (TMF).

The pre-stripping period is scheduled to be one year in duration and provides the necessary construction materials for the tailings dam and other surface infrastructure facilities.

Underground Mining
The objective of the underground mine planning was to provide high grade mill feed early in the life of mine plan. The underground mining is planned to come from zones that would otherwise not be mined until late in the 2015 PEA base case mine plan or with the Stage 5 pit that is considered to be an opportunity in the 2015 PEA and is not part of the base case.

The underground mine design takes advantage of existing level development, ventilation and vertical development. The underground mine is scheduled to provide feed to the mill starting in year three of production with a relatively low capital requirement.

The current study reviewed the following four underground mining methods:
• Shrinkage mining: eliminated due to geotechnical concerns. These openings would affect open pit mining, which was scheduled to operate concurrently with the underground activities;
• Block caving: considered as an alternative to a Stage 5 open pit scenario;
• Open stoping with backfill: chosen for those blocks amenable to bulk mining; and
• Post pillar cut and fill: chosen for shallow dipping, high grade mineralization zones.

This study assumes that the lateral development and the post pillar cut and fill production mining would be completed by one contractor who would provide his own mobile equipment. This contractor would also be responsible for the remote mucking of the open stope. A second contractor is planned to be used for drilling and blasting the open stopes and installing the ground support cable bolting. The second contractor would be required to provide his own mobile equipment and grouting pumps.

Open Stoping
Sublevels will be developed at intervals of 15 to 20 m, depending on the mineralization geometry. The sublevel sill drifts will be 5 m high and initially 5 m wide and then slashed to the mineralization boundaries. The minerals sublevels will provide access for drilling, blasting, ground support and mineral mucking.

Normally in transverse stopes, the width will be over 20 m to footwall by 30 m length and 20 m high with a cycle time of 109 days, including hydraulic fill with an average of 400 t/d of muck per stope.

Blasthole drilling will use top hammer drills to drill 15 to 20 m long up holes from the extraction sill drift and, on other occasions, down holes from the upper sill to the lower extraction level. The maximum length of up holes is 20 m.

Down holes are projected to be 4.5” diameter, while the up holes are projected to be 3” diameter. The blast holes are drilled on a 2.5 m burden by 2.0 m spacing pattern and will be charged with EMMULSION and high explosive boosters and initiated with NONEL caps. A 0.50 kg/tonne powder factor has been assumed for LH blasting.

The broken mineral will be mucked from the bottom of the stope by remote control Load Haul Dump units (LHDs), loaded into trucks and hauled to surface. The mined out stopes will then be backfilled.

Mechanized Post Pillar Cut & Fill
Stope LH4v2 is planned to be extracted using mechanized Post Pillar Cut and Fill (MCF) mining because this mineralized zone is a high grade shallower dipping area.

MCF is a lower productivity, higher cost mining method than open stoping, but provides highly selective mining with minimal dilution. Stopes can be sized with irregular backs and walls to match the mineral boundaries.

Drilling will be done by a two-boom electric hydraulic jumbo with an advanced rig control system that provides high quality drilling and blasting techniques that improves ground control and minimizes dilution. Each blast is projected to be four metres in length. After each blast, the area will be washed and scaled as well as bolted by a mechanical bolter fitted with a water scaler. Bolting will be with six foot rebar and Superswellex as secondary support when required.

The broken mineral will then be mucked with LHDs into trucks and hauled to surface. The completed five metre high stope is then filled with hydraulic backfill or development waste. The last three feet of the pour is completed using engineered cemented fill to ensure that the next cut is established on a stable floor.

Once mining of the initial lift is completed, the ramp will access the next cut down and lift bench. The mined out area will then be filled with waste rock and hydraulic fill. To start the next lift, the access ramp would be slashed (breasted) at an appropriate gradient, up to plus 17%, to gain required elevation. The breasted waste rock would be left in place and is used as a ramp. Once the ramp is re-established, Post Pillar Cut and Fill mining would begin again working off of the waste rock backfill.

Haulage will be done with 50 t capacity trucks up the main decline to surface.

Post Pillar Cut and Fill requires a sufficient number of headings to attain a high production rate and efficient cycling of drill & blast, muck, scale/bolt/screen. In addition, the pillars from each cut must be positioned over the previous cuts to maintain maximum strength. Shotcrete posts will be utilized on an as required basis with appropriate instrumentation that monitors total load on the post.

Underground Access
Primary underground access will be through the existing mine portal using the existing level that will be re-conditioned for travelling and movement of material. All new lateral development ramps will be 5.5 m high and 5 m wide. The ramps will be driven at 18% to the bottom of the mine and will interconnect with other mineralization zones and old level workings. Small internal ramps will be driven, connecting old working and the mineralization zones.

- subscription is required.

The current project plan begins with a 25,000 t/d nominal mill utilizing conventional crushing. Crushing is planned to be in three stages with a primary gyratory crusher, a secondary cone crusher and a tertiary cone crusher in closed circuit with a screen. The circuit would produce a feed for two single stage ball mills operating in parallel.

Metal recovery is designed to be by bulk flotation followed by concentrate regrind and cleaning. In addition, a magnetic separation circuit on the rougher flotation tailings, followed by regrind and flotation cleaning would be used. A final bulk concentrate for sale planned to be produced. Regrind is proposed to be done by small ball mills or alternately stirred media mills. Concentrate for sale would be thickened, filtered and trucked off site. Tailings would be thickened and pumped to the tailings management facility.

In the sixth year, mill capacity is scheduled to be doubled to 50,000 t/d. The recovery process would remain the same. Increased capacity would be accomplished by twinning most of the circuit.

Description (25,000 t/d production phase)
Rougher Flotation
Rougher flotation will be via a bank of four 300 cubic meter tank cells. This will provide the 24 minutes retention time and a carrying capacity of less than 1 mtph/m². This is considered conservative and hence the circuit will be able to respond well if feed grade increases. Each cell will draw 300 kW. Total flotation concentrate tonnages have been calculated using a head grade of 0.5% nickel and 0.5% copper with 80% recovery of both. This assures that the subsequent equipment will not be undersized. Total flotation tailings tonnages have been calculated using a head grade of 0.2% nickel and 0.2% copper with 60% recovery of both to assure that downstream equipment will not be undersized. Using these criteria for design purposes, the mass flow to flotation concentrate is 165 mtph (279 m³/hr), and the mass flow to flotation tailings is 1,030 mtph (2,784 m³/hr).

Magnetic Separation
Magnetic separation units have not yet been sized for the project. It is anticipated that four units per line will be needed. It is estimated that the units will draw 50 kW each. Magnetic separation tails (non-magnetic material) will be directed to final tails. The design mass flow for magnetic separation is the case where rougher concentrate mass is at a minimum. This results in a magnetic concentrate mass flow of 124 mtph (216 m³/hr). Magnetic concentrate (magnetic material) will be reground. Testing to determine the optimum grind size has not yet been completed. For design purposes, 40 microns with a work index of 19.0 has been used. This will require a 4.1 m x 5.1 m ball mill drawing 1,200 kW.

Magnetic Concentrate Flotation
Magnetic concentrate will be floated in four 20 m³ tank cells drawing 20 kW each.

Regrind
Magnetic concentrate and bulk rougher concentrate will be reground in a 400 kW tower mill.

Cleaner Flotation
Cleaner flotation will be in three stages. The tails from the first cleaner are final tails. Each subsequent stage may return to the previous stage or to the magnetic concentrate flotation feed. Each stage will consist of four 10 m³ tank cells (total of 12) drawing 10 kW each.

Dewatering
Testing to confirm dewatering equipment sizes has not yet been completed. An allocation of 500 kW for dewatering equipment is added to the equipment list. This includes thickening, vacuum filtration and ancillary equipment. The estimated mass of concentrate to be dewatered is 2.5% of the fresh feed or 27.4 mtph (48.0 m³/hr). At this time, a thickener diameter of 30 meters will be used. This is considered conservative.