The Hushamu and Red Dog Deposits host porphyry copper-gold mineralization similar in grade, and in the case of Hushamu size, to the past producing Island Copper Mine located approximately 30 km to the east. Over the life of the operation, Island Copper produced 345 million metric tonnes of ore with average grades of 0.41% copper, 0.017% molybdenum, 0.19 g/t gold and 1.4 g/t silver (Perelló et al., 1995).

Mineralization identified at Hushamu and Red Dog is best characterized as calcalkalic porphyry deposit type. Calcalkalic porphyry deposits commonly form in sub-circular zones of brecciated and hydrothermally altered rock in and around the apex of a quartz diorite to quartz monzonite stock. The style of mineralization is largely dependent on depth of formation. Deposits developed in relatively high-level, subvolcanic environments are commonly associated with multiple dyke and breccia phases. However, deposits formed at greater depth are more often associated with broad zones of faulting in plutonic rocks (Pantelyev, 1995). The deposits form as concentrations of quartz, quartzsulphide and sulphide veinlets and stockworks and as sulphide disseminations in broad potassic and phyllic alteration zones. They are commonly surrounded by a halo of propylitic alteration. The principal economic minerals are chalcopyrite, molybdenite, lesser bornite and trace gold or electrum. Pyrite is an important constituent, particularly in the propylitic alteration zone.

Five major lithologic units are noted on the Hushamu property; massive andesite, diorite, quartz-feldspar porphyry, hydrothermal breccia, and late breccia. The massive andesite can be further broken down into an amygdaloidal unit, a feldspar-phyric unit and a tuffaceous unit and is the host rock to most of the porphyry alteration and mineralization (Halle and Halle, 2012).

The quartz-feldspar porphyry sub-volcanic occurs as dikes and irregular bodies at the southern edge of the northwest-trending diorite stocks, and can be traced northwest along the Hushamu valley, where they are truncated by the West Fault. They are characterized by coarse, subhedral quartz and feldspar phenocrysts set in a very finegrained matrix, often with diorite and/or andesite inclusions. The unit is weakly altered, pyritized, and locally mineralized. This unit was historically believed to be co-magmatic with Bonanza Group volcanics and thus responsible for Cu-Au-Mo mineralization (Nixon, 2006). Halle and Halle (2012) did not find evidence to support this assertion during re-logging of Hushamu core.

The Bonanza Volcanic rocks in the deposit area have undergone intense hydrothermal fluid brecciation that has completely altered and/or obliterated the original rock textures. The resultant hydrothermal breccia was cross-cut by later, vertically oriented, decimetre-scale phreato-magmatic intrusive breccia bodies. The resultant silica-clay alteration assemblages from both events are observed in drill core to overprint earlier chlorite-magnetite alteration. The juxtaposition of this advanced argillic alteration phase onto an earlier chloritic phase can be explained by a “telescoping model” suggested by Perello (1992), occurring during uplift and erosion of active hydrothermal systems. The most extreme and texturally destructive variety of this alteration/lithology appears to dip shallowly to the northeast.

The oldest rocks exposed on the Red Dog property are the lower Jurassic age Bonanza Group. These rocks underlie most of the southern portion of the property and prior to alteration were dominantly of andesitic to basaltic andesitic composition. Most of the volcanic rocks are auto brecciated flows, tuff-breccia and much lesser fine tuffs and very fine-grained sills. Due to later alteration and the general monotonous makeup of the Bonanza Group rocks, subdivision of the volcanic package is problematic and conclusive bedding attitudes are difficult to distinguish at the scale of current property mapping. Based on mapping by Nixon et al. (2006) the Bonanza Group rocks in the area of Red Dog dip gently to the southwest.

The Red Dog intrusive is invariably porphyritic ranging from crowded (>50% phenocrysts) to sparse porphyritic texture (<25% phenocrysts) depending on the distance from its contact with the Bonanza Group rocks and dyke thickness. Where little altered, it consists of tabular phenocrysts of plagioclase to 4 mm, lesser fine-grained hornblende and rounded quartz phenocrysts in a fine grained felted matrix of the same minerals. The rock contains less than 10% potassium feldspar and best fits the tonalite composition. The contact of the main Red Dog Intrusion with the Bonanza Group is near vertical in the eastern part of the property; however, west of the prominent gully separating the main part of Red Dog Mountain and Red Dog Knoll, the contact is a southwest dipping fault based on drill results reported by J.B. Richards (1991) and the 2016 drilling.

The second intrusion is referred to as the Rose Porphyry, named for its distinctive pale greyish pink colour. It is characterized by its coarse porphyritic texture of rounded quartz eyes and medium to coarse grained feldspar in a felsic groundmass of the same minerals. Any original mafic minerals are altered to sericite and chlorite. Quartz vein stockworks are developed throughout and the rock is well to moderately mineralized with magnetite, chalcopyrite, pyrite and lesser molybdenite. It has been observed in contact with the Quartz Magnetite Breccia with contacts often brecciated and obscured by intense silicification. The relationship between the Rose Porphyry and the Red Dog Intrusions is unclear and requires further study. The Rose Porphyry may represent a phase of the Red Dog intrusions that is intermediate in age between the main stock and the younger Red Dog Porphyry dykes or be related to another intrusion not present within the near surface of the deposit.

A third intrusion occurs in the southeastern part of the property. The rock is given the generic name Feldspar Porphyry as it is ubiquitously altered and occurs as a white to pale grey coloured rock comprised of tabular, 2 to 3 mm plagioclase phenocrysts in a fine grained felsic ground mass. The mafic minerals, which form both 1-2 mm phenocrysts and part of the groundmass are completely altered to chlorite. Fine grained disseminated pyrite forms about 3% and is often oxidized to limonite. Quartz forms about 5% of the rock and is confined to the matrix. Based on the low potassium feldspar content, the rock is classified as a diorite porphyry.

The fourth intrusion is in the western part of the property on the flank of Red Dog Mountain. It forms a small stock-like body that may extend to the southeast under the hill based on reported historical drill results by J.B. Richards (1990, 1991). The intrusion is a medium grained hypidiomorphic granular textured quartz monzonite. It is the least altered of the intrusions and appears to postdate the mineralization. It has characteristic pink colour due to hematization of the potassium feldspar. The contact between the quartz monzonite and the Red Dog Intrusion is covered by Quaternary Sedimentary rocks and thus the relationship between the two intrusions is unclear. It may be that the fault identified in historical drilling separating the Bonanza Group from the Red Dog Intrusion also separates the quartz monzonite from the Red Dog Intrusion.

The fifth and youngest of the youngest intrusions are the basalt dykes that for the most part trend westerly and are near vertical to steeply dipping both to the north and south. They are rarely more than three metres thick. The basalt dykes, which are very fine grained and dark grey to black in colour, are of uncertain age, but cut all rock types. They are not common, and are volumetrically unimportant at Red Dog.

The mine plan was developed to mine Red Dog concurrently with Hushamu in the early years of the mine life until Red Dog Resources were depleted. The assumed processing rate is 75,000 t/d. The overall mining rate peaks at 64 million t/a in the initial years, averaging 54 million t/a over the first 12 years of the total mine life of 22 years.

The Hushamu and Red Dog open pits will be conventional truck and shovel operations utilizing 220 tonne class trucks and electric hydraulic front shovels and rotary drills. The bench height at Hushama will be 15 m and at Red Dog it will be 10 m. Road allowances have been made to 34 m width. Single benching has been applied at Hushamu and double benching has been applied at Red Dog. Geotechnical berms of 20 m width have been located on the high wall at Hushamu. Primary crushers will be located adjacent to each pit. Ore will be conveyed to the plant site at Hushamu.

The crest of the pit is at 645 m elevation and the pit bottom is -20 m elevation. The overall high wall slope is 42 degrees. The overall final pit dimensions are 2,300 m in length by 1,275 m in width.

The pit design bottom is at 240 m elevation and the pit crest is at 440 m elevation. Overall dimensions are 780 m length by 470 m width. Access to the pit will be from the east where the primary crusher will be located. This pit will be developed in a single phase.

The Hushamu open pit will be developed in 4 phases. A haulage road will remain in the high wall to access the subsequent development phase to the south.

This expansion is radial about the Starter Pit expanding the pit in all directions and to depth. This pit phase reaches the final wall on the north leaving an access road allowance of 40 m width.

Waste rock will be placed in construction and storage within the Mine Waste Storage Facility (MWSF). A low-grade stockpile will be located at the pit rim on the northwest side of Hushamu. An overburden stockpile will be located adjacent to the low-grade stockpile for use in reclamation of the MWSF at the end of the mine life.

The following items summarize the process operations required to extract copper, gold and molybdenum from the NorthIsle mineralized material:

- Reducing the size of the ore from Run-of-Mine (ROM) to minus 200 mm using a primary gyratory crusher.

- Stockpiling primary crushed ore from both the Hushamu and Red Dog deposits and then reclaiming it with feeders and conveyor belts.

- Grinding of the ore in a semi-autogenous (SAG) mill - ball mill circuit prior to processing in a flotation circuit. The SAG mill will operate in closed circuit with a trommel screen and pebble crushers (SABC circuit). The ball mills will operate in closed circuit with hydrocyclones to deliver a product size of 100 microns to the flotation circuit.

The North Island Copper and Gold Project (the “Project”) will consist of an open pit mine, mineralized material processing facility, and miscellaneous infrastructure and support facilities. The Project is located approximately 27 km west of Port Hardy, British Columbia, Canada, along the north shore of Holberg Inlet in Northern Vancouver Island. Copper, gold and molybdenum mineralized material will be mined.

The Project mineralized material facility will produce copper/gold and molybdenum concentrates. The nominal capacity of the mineralized material processing facility is 75,000 dry metric tonnes per day (dmtpd) or 27,375,000 dry metric tonnes per year (dmtpy). The plant capacity will fluctuate according to the hardness of the mineralized material type being milled, up to a maximum of 84,000 tonnes per day (t/d) when soft mineralized material is being milled.

Sufficient mineralized material is available for approximately 22 years at this production rate. ........