Copper mineralization occurs as an intrusive-related deposit within the Contact batholith and is observed in quartz veins within structural zones and in the surrounding granodiorite. The copper content is highest in the quartz veins, particularly where chalcocite is present, but grades outward into granodiorite where copper minerals occur in quartz veinlets, fracture coatings and disseminations. Mineralization is in the form of tenorite, chrysocolla and cuprite, and lesser chalcocite and covellite. Oxidation is observed to depths of 2,000 feet in drilling.

The model for mineralization at the Project is a porphyry copper system. Although a porphyry copper deposit has not been discovered in the area, the mineralization present is consistent with a porphyry copper model.

Porphyry copper systems involve the shallow emplacement of calc-alkaline multi-phase batholiths. These systems are commonly located in arcs associated with subduction and are also emplaced during extension following an orogeny

Ore production will be by conventional open pit mining methods. The primary mining equipment selected consists of rotary blast hole drills, 19.5 cubic yard hydraulic shovels, and 150 ton haul trucks, supported by track dozers and other ancillary equipment. Drilling will be in 20-foot high benches, double benched with 25-foot wide catch benches on final slopes. Blasting will utilize ammonium nitrate-fuel oil (ANFO) supplemented with emulsion for explosives as most blast holes are expected to be dry. The ore will be hauled by trucks to the crushing area east of the pit, and then conveyed to the heap leach pad south of the pit. Material below the cut-off grade will be hauled by trucks to the waste rock storage facility north of the pit.

The open pit is designed and mined in three phases in order to maximize the grade during the initial years and to balance the required waste stripping over time. Mining in Phase 1 begins at the west end of the ultimate pit, between bench elevations 5,400 feet and 6,200 feet ASL, and progresses eastward to a final pit depth at elevation 4,940 feet ASL. When fully mined, the ultimate pit as planned extends 8,300 feet in length from west to east, and 2,800 feet in width from north to south.

Ore production is planned to vary up to 57,000 tons per day (18.9 million tons per year) in order to maintain a consistent copper production of 50 million pounds per year from the SX-EW plant. Total mine production of ore and waste will re ........

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