The white smoker deposit model is proposed for the Nash Creek deposit, in contract to a traditional black smoker deposit. These deposits types are described below.

Known seafloor ore deposit types include volcanogenic massive sulphide deposits (“VMS”), volcanogenic hosted massive sulphide deposits (“VHMS”), epithermal, porphyry, metalliferous mud, manganese nodules, placer gold, and placer diamonds, that have geochemical associations controlled by tectonic setting, volcanic substrates, and temperature-dependent solubility controls (Gemmell and Piercy, 2016). VMS deposits in particular form on, or below, the ocean floor and are typically associated with volcanic and/or sedimentary rocks. The deposits often have a strong metal zonation, seen as the segregation of various metal-bearing sulphides throughout a deposit. In general, copper sulphide (chalcopyrite) forms in the central (or higher temperature) parts of the deposit, such as in the stockwork and vent-proximal sulphide lenses. Gold concentrations can often be highest in these copper-rich zones. The massive or semi-massive accumulations of sulphide minerals form lens-like or tabular bodies parallel to stratigraphy or bedding (Foran Mining, 2015).

Sulphide mineralization at Nash Creek includes pyrite, sphalerite, galena and minor chalcopyrite. Silver consistently accompanies the sulphides, possibly the result of argentiferous galena or presence of a silver rich sulphosalt. Sulphide concentrations of potential economic interest occur as: 1) stratabound and/or laterally continuous zones of matrix filling or replacement style mineralization within coarse to fine grained pyroclastic deposits of both mafic and felsic affinity; 2) fracture filling, stringer or vein arrays mainly within competent flow units or flow breccia; and 3) discrete breccia zones (e.g., flow breccia, autobrecciation, etc.). Strong intraclast chlorite mineralization is associated with concentrations of zinc and lead in the brecciated mafic rocks.

Moderate to intense clay alteration and silicification are common in the mineralized zones and broader zones of strong carbonate, hematite and potassium alteration occur in footwall, and occasionally hangingwall, to mineralized host rocks. Mineralization occurs as multiple stacked zones of laterally extensive pyroclastic units and flow top rubble zones which are cross cut locally by north, northeast and northwest trending structures that may have acted as pathways for mineralized hydrothermal fluids (Cullen and Barr, 2005).

Four zones hosting stratabound mineralization have been identified on the Nash Creek Property by previous workers. These four zones are, roughly from north to south, the MacMillan, Hickey and Hayes zones and to the east, the Central Zone. Drilling completed by Callinex in 2017 has extended the Hickey Zone to the north.

Mineral resource estimates have been stated for the Hickey and Hayes zones.

The Nash Creek and Superjack mineral deposits have demonstrated strong potential to become economically viable conventional open pits using standard hard rock mining methods producing an average of 3,900 tpd over a LOM of 10 years when combined into a single project. The mine product could potentially be processed in a DMS pre-concentration plant followed by a flotation operation to generate saleable zinc and lead concentrates.

The mine plan for the Nash Creek Property has an approximate ten-year production life with total on-site process plant capacity of approximately 1.4 Mt per year.

Conventional three stage crushing will reduce the ‘run-of-mine’ (“ROM”) material to a size that will be suitable for pre-concentration in a DMS plant. The size and design of the DMS facility has not been completed yet and will be subject to the results of future test work on sample ROM material. This study assumes that the lower grade 50% of the process plant feed will be separated and rejected as waste in the DMS facility, with acceptable metal losses.

The resulting DMS concentrate will be reduced in size in a ball mill to a P80 of approximately 70 microns. From there, it will be directed to a rougher-scavenger flotation circuit that will produce a zinc and a lead rougher concentrate. Cleaner flotation circuits will upgrade both concentrates to a marketable grade. The concentrates will subsequently be thickened and filtered for shipment to suitable smelters. Silver in the process plant feed is expected to partially deport equally to both zinc and lead concentrates.

P&E investigated the potential of off-site processing of the DMS plant product at a conceptual off-site toll processing facility. Initial indications suggest that whereas this option is viable and financially attractive, the option of processing the material on site is shown to be more attractive and achievable along with the potential to leverage the considerable exploration upside of Callinex’s district-scale land package.