The Carmacks copper-gold deposit is similar to the Minto deposit, located 50 km to the northwest (Sinclair, 1976; Pearson, 1977), except that the Minto deposit is flat lying and primarily a sulphide deposit. A number of theories for the genesis of the Carmacks deposit have been postulated over the years and by different operators. Evidence from the 2006 and 2007 drilling campaigns suggests the deposit was formed by assimilation of older, copper-bearing volcano-sedimentary rocks into the Jurassic Granite Batholith. These “rafts” of mineralized rock would have been variably metamorphosed, and in places completely assimilated into the granodiorite. The volcano-sedimentary rafts would tend to pull apart along bedding planes forming large tabular sheets as observed in the No. 1, 7, 7A, 8, 12 and 13 zones. Evidence suggests the sulphide mineralization has been re-mobilized out of the rafts into the surrounding granodiorite and in some locations the sulphur has been driven off leaving native copper in the granodiorite matrix. At a later time, when the upper parts of the batholith where eroded and the gneiss was exposed to the atmosphere and meteoric waters, the sulphide mineralization began to oxidize and precipitate as the oxide minerals.

The majority of the copper found in oxide portions of the No. 1, No. 4, No. 7 and No. 7A Zones are in the form of the secondary minerals malachite, cuprite, azurite and tenorite (copper limonite) with very minor other secondary copper minerals (covellite, digenite, djurlite). Other secondary minerals include limonite, goethite, specular hematite and gypsum. Primary copper mineralization is restricted to bornite and chalcopyrite. Other primary minerals include magnetite, gold, molybdenite, native bismuth, bismuthinite, arsenopyrite, pyrite, pyrrhotite and carbonate. Molybdenite, visible gold, native bismuth, bismuthinite, and arsenopyrite occur rarely.

Alteration minerals that could be considered strictly related to the mineralizing event rather than weathering or dyke intrusion are not recognizable. Epidotization and potassium feldspathization are obviously related to pegmatite dyke intrusion which is a post-mineralization event. Clay (montmorillonite type) and sericite development are clearly weathering products. Silica introduction, usually as narrow veinlets, is not common and may be related to aplite dyking or metasomatism. Chloritization of mafics, biotitization of hornblende, rare garnets, carbonate, and possibly anhydrite all appear related to metasomatism and assimilation of precursor rocks to the gneissic units.

The upper 250 m of the No. 1 Zone is oxidized. Within the oxidized area, pyrite is virtually absent and pyrrhotite is absent. Weathering has resulted in 1% to 3% pore space and the rock is quite permeable. Secondary copper and iron minerals line and in-fill cavities, form both irregular and coliform masses, fill fractures, and rim sulphides. Primary sulphide minerals and magnetite are disseminated and form narrow massive bands or heavy disseminations in bands. Non-copper sulphides are not common in the weathered zone and are usually intergrown or associated with each other when they do occur. They most commonly occur in hematite but also occur in copper sulphides and in the gangue minerals. Gypsum occurs as microveinlets. Carbonate occurs as pervasive matter, irregular patches or microveinlets, not commonly, but on the order of 1% where present. Gold occurs as native grains, most commonly in cavities with limonite or in limonite adjacent to sulphides, but also in malachite, plagioclase, chlorite and rarely in quartz grains. Gold is rarely greater than 5 microns in size.

Secondary copper mineralization does not appear to be preferential to a particular rock type. In the north half of the No. 1 Zone, copper mineralization forms high and low grade zones that are reasonably consistent both along strike and down dip and these zones transcend lithologic boundaries. Higher grades tend to form a footwall zone while lower grades form a hanging wall zone.

Primary mineralization, below the zone of oxidation comprises chalcopyrite, bornite, molybdenite, magnetite, pyrite and pyrrhotite. Primary copper mineralization appears to be zoned from bornite on the north to chalcopyrite and finally to pyrite and pyrrhotite on the south. Narrow veinlets of anhydride were found in the deepest drill hole.

The Carmacks Project will be developed as an open-pit mine. The mine will be operated year round but may temporarily suspend ore stacking operations when winter temperatures are extreme. The mine will use a conventional spread of mining equipment, the main units comprising 10.5 m3 hydraulic excavators, 11.5 m3 loaders and 91-tonne haul trucks.

The copper and gold recovery process was designed on the basis of 4,860 t/d with average head grades of 0.98% Cu and 0.435 g/t Au.

A jaw crushing plant will operate at a nominal crushing rate of 312 t/h, 16 hours a day for 365 days per year. The process plant will operate 24 hours per day for 365 days per year with a plant availability of 92% and a processing rate of 220 t/h. The copper will be leached with sulphuric acid, recovered in a solvent extraction / electrowinning circuit (SX-EW) and shipped as cathode copper. The copper circuit tailings is leached in CIL tanks and the carbon is processed in a 2 t/d carbon ADR plant for gold extraction and the production of gold doré. This process will achieve an estimated recovery of 85.2% Cu and 84.4% Au.

The mineralized material processing facilities will include the following unit operations:

- Crushing and mineralized material Handling:
- Primary Crushing: A vibrating grizzly screen and jaw crusher in open circuit, producing a final product P80 of approximately 114 mm; and
- Fine Mineralized material Stockpile: 5,000 t fine mineralized material stockpile and reclaim feeders;

- Process plant:
- Primary Grinding: a SAG mill operating in closed circuit with a cyclone cluster, producing a final product P80 of approximately 664 µm;
- Copper Leaching and Recovery: a pre-leach thickener, six copper leach tanks, four counter current decantation (CCD) thickeners and an SX-EW circuit; and
- Gold Leaching: 6 – CIL tanks, an ADR plant and cyanide destruction.

Tailings management: tailings filtration, load-out and dry stack at the tailings management facility.