The MacArthur deposit is a supergene enriched, oxidized porphyry copper system. Although the porphyry system likely developed in near-vertical geometry, regional studies by Proffett and Dilles (1984) suggest the MacArthur area is tilted westerly approximately 60 to 90 degrees from its original vertical position and extended to the east so that the map view is actually a structural cross section. The original northwest strike of the near vertical porphyry dikes resulted in a northerly dip of the structures with the post mineral tilting.

Copper mineralization has been identified across nearly the entire area investigated by Quaterra’s drilling program at MacArthur and gives every indication of extending well beyond. As currently defined by drilling, copper mineralization covers an area of approximately two square miles as defined by drill holes on 500 feet to 250 feet spacing north of the MacArthur pit to approximately 150 feet spacing within the pit.

Oxide, chalcocite, and primary copper mineralization is hosted in both granodiorite and quartz monzonite, and in quartz biotite-hornblende (quartz monzonite) porphyry dikes all of middle Jurassic age. An insignificant percentage of oxide copper is also hosted in northwest striking andesite dikes that make up less than approximately one to two percent of the host rocks on the property. Fracturing and favorable ground preparation supplied the passage ways for the copper to migrate.

Copper oxide minerals are exposed throughout Quaterra’s MacArthur property, in MacArthur pit walls as primarily green and greenish-blue chrysocolla CuSiO3·2H20 along with black neotocite, aka copper wad (Cu, Fe, Mn) SiO2, with very minor azurite Cu3(OH2)(CO3) and malachite Cu2(OH2)CO3, while tenorite (CuO) was identified with the electron microprobe (Schmidt, 1996). Copper-enriched limonite was identified by Anaconda as the mineral delafossite (CuFeO2). Chalcocite has been identified in drill holes below and north of the MacArthur pit and in drilling throughout the property. The sulfides digenite (Cu9S5) and covellite (CuS) have been identified petrographically in drill cuttings. Bornite (Cu5FeS4) has also been identified petrographically in the Gallagher area. The oxide copper mineralization is fracture controlled, coating joint and fracture surfaces and within shears and faults. Both green and black copper oxides are frequently found on 1-5 millimeter fractures, as coatings and selvages and may be mixed with limonite. The fractures trend overall N60°W to N80°W (bearing 300° to 280° azimuth) and generally dip to the north. Limited turquoise is found on the property, mainly in small veinlets. On a minor scale, oxide copper mineralization replaces feldspar phenocrysts in the igneous host units, favoring andesite.

A significant amount of chalcocite has been intersected in drill holes. Chalcocite is seen on drill chips or drill core coating pyrite and replacing chalcopyrite as tiny, blackish “dustings” and thin to thick coatings, strongest when occurring on and near the MacArthur fault. Chalcopyrite is present as disseminations and veinlets, with or without chalcocite. As much of the historic and current drilling was stopped at shallow (<400 to 500 foot) depths, the scope and extent of chalcopyrite mineralization has not been fully defined.

Both copper oxide and chalcocite mineralization occur over approximately 10,000 feet east-west by 5,000 feet north-south. Copper oxides are structurally controlled coating fractures, joint surfaces, and developed as green or black “streaks” within shears and faults over several feet. Oxide mineralization occurs as tabular, flat-lying shapes extending with good continuity 150 feet below surface and less continuously up to 600 feet below surface. Chalcocite mineralization in tabular geometry ranges to 50 feet or more in thickness, mixed with or below oxide mineralization.

Mining of the MacArthur deposit will be done by open pit methods utilizing a traditional drill, blast, load and haul sequence.

Approximately 271 million tons of mineralized material will be mined over the life of mine with an average waste to mineralized material ratio of 0.90. There are three final pits consisting of the main MacArthur pit, the North pit and Gallagher pit. Mining will start in the main MacArthur pit and progress to the North pit, then to Gallagher pit and ending at the outer limits of the main MacArthur pit in the last phase.

The process facilities planned for the MacArthur Copper Project include a ROM heap leach facility to recover copper in a leach solution, and a solvent extraction and electrowinning (SX/EW) facility to recover the copper from the leach solution and produce a cathode quality copper for sale. Also included is a sulfur burning sulfuric acid plant with a power plant to generate electrical power from the waste heat produced from the combustion of sulfur. Other facilities include solution ponds, water and power distribution, and infrastructure to support the facilities.

MacArthur mineralized material will be mined from open benches, loaded into mine haul trucks, transported directly to the heap leach pad and stacked. The mineralized material will be dumped on the leach pad and irrigated with an acidified leach solution (raffinate). Raffinate will be pumped from the raffinate pond through a pipeline and distribution network to drip emitters which will distribute the leach solution t ........