The Copperwood Project consists of sediment- hosted stratiform copper deposits. Such deposits consist of copper and copper-iron sulfide minerals hosted by siliciclastic rocks in which a relatively thin (typically less than 3 m thick) copper-bearing zone is mostly conformable with stratification of the host sedimentary rocks. Copper occurs as disseminations and veins.

Mineralization
Mineralization is hosted within two sedimentary sequences termed the Lower Copper Bearing Sequence (“LCBS”) and Upper Copper Bearing Sequence (“UCBS”) at the base of the Nonesuch Formation.

The LCBS is composed of the Domino, Red Massive and the Gray Laminated units.

The UCBS is composed of the Upper Transition, Thinly, Brown Massive and Upper Zone of Values units.

The Domino is the main mineralized subunit, averaging 1.6 m in thickness, but thinning to about 0.5 m on the eastern edge of the Copperwood Deposit. Copper assays at Copperwood are remarkably consistent within individual units with mean copper grades of 2.58 wt.%, 0.39 wt.%, and 1.32 wt.% for the Domino, Red Massive and Gray Laminated subunits, respectively. The Red Laminated demonstrates a localized 1% increase in copper grades occurring at the base of the unit adjacent to the Gray Laminated. Silver is also present, with mean grades of 5.5 g/t.

Chalcocite is the only observed copper sulfide- bearing mineral at Copperwood, occurring principally as disseminations within shale and siltstone. Individual disseminated grains of chalcocite are most commonly very fine-grained, approximately 5 to 50 microns (“µ:) in diameter. Chalcocite occurs as free grains and as complex grains where it appears to have replaced pyrite grains, as evidenced by remnant patchy domains of an iron oxide mineral (probably hematite). In the highest-grade samples, located in the top 0.3 m of Domino subunit, chalcocite occurs as layers that are parallel to laminations in the rock. These layers are usually less than 2 mm thick. Occasionally, ovoids of chalcocite occur that are up to 3 mm in their long axis. They possibly result from the replacement of organic carbon.

There is an overall negative correlation with the degree of oxidation of the host rock within the LCBS and the abundance of chalcocite within the LCBS. The dark-gray to gray colored Domino subunit has the highest copper grades; the medium to light-gray-colored Gray Laminated has medium copper grades; and, the redbrown colored Red Massive has distinctly the lowest copper grades.

Grade profiles for each of the LCBS units show that there is a natural break in the grade profile, at approximately 1 wt.% copper. The 1 wt.% copper grade is a natural cut-off and is extensively used in Zambian and other African sediment-hosted copper deposits, where most intercepts grade a few tenths of a percent copper above or below the mineralized interval and well over 1 wt.% copper inside the mineralized interval.

The UCBS hosts the same style of chalcocite mineralization as the LCBS, but contains trace to no chalcocite mineralization the western, thicker part of the Deposit. The copper grade gradually increases towards the center of the Western Syncline and Section 6 contains an UCBS grade of 0.5 to 0.8 wt.% copper. The UCBS becomes more mineralized in Section 5 and has a copper grade greater than 1.0 wt.% in the eastern half of the section where the thickness of the UCBS ranges from 2.5 to 3.2 m. Here the copper grades are greater than 1.5 wt.%, 3.0 wt.%, 0.3 wt.%, and 0.9 wt.% for the Upper Transition, Thinly, Brown Massive, and Upper Zone of Values subunits, respectively. The Upper Transition and Thinly units are of economic interest and were the focus of the resource estimate.

The proposed mining method for the Copperwood Project is conventional drill and blast room- and-pillar given the relatively sub-horizontal orebody that varies in thickness from 1.6 m to 3.7 m.

The method consists of the extraction of a series of entries and cross-cuts in the ore leaving pillars in place to support the back. The entries cross cuts and pillars are sized using a geotechnical analysis of the rock, and experience from other mines sharing similar ground conditions.

The Project’s mining equipment consists of a low-profile two-boom electric-hydraulic jumbo for drilling. A one-boom electric-hydraulic low-profile bolter is considered for the installation of ground support. A load haul dump (“LHD”) unit with a 10 t (6 yd3 ) capacity is planned for ore removal from the face and transport of the broken ore to a rock breaker- loading point. A rock breaker will reduce the size of larger particles in the blasted ore, which will be placed on a belt conveyor and transported to the surface crushed ore storage bins from which the mill is fed.

Main accesses and haulage of ore from certain distant working areas are developed using 30 t underground mining trucks to transport the ore to the rock breaker or to the surface stockpile. A mix of ANFO and emulsion explosives are used for blasting to reduce the excavation overbreak. The rooms are mined with a single pass approach, such that the pillars will immediately have their final dimensions. This approach is recommended for better control and better productivity.

The mine is comprised of two sectors; the Eastern part and the Western part. The Western part contains higher grades and a thicker mineralized zone. For these reasons, mining will begin in the western part. The mining direction will generally follow the dip of the orebody, but in some areas the dip is too steep to follow. In the areas where the dip is too steep, the mining will be done at an angle to the dip direction.

Based on geotechnical information and mineralization geometry, an underground room- and-pillar method is selected for the Copperwood deposit. This mining method allows for both a good ore selectivity and productivity. However, a series of pillars are left in place to provide roof stability. The mining design was based on a mining rate of approximatively 2.4 Mt/yr. The underground access and infrastructure development were designed to support the mining method and size based on mining equipment and production rate requirements.

Mining Parameters.
The basic operational assumptions are summarized as follows:
• Minimum mining height 2.1 m (limited by the equipment);
• Maximum mining height 5.8 m;
• Average mining height 2.5 m;
• Average mining height western sector 2.81 m;
• Average mining height eastern sector 2.21 m;
• Cut-off grade 1% Cu;
• Annual production – 2.4 Mt;
• Entry drift (main access) and room and pillar width 6.1 m;
• Lake Superior horizontal protection 30 m;
• Surface pillar 25 m;
• Old test mine pillar 10m;
• Fresh air raise 5 m;
• East exhaust air raise 5 m;
• West exhaust air raise 4 m;
• Conveyor maximum optimal distance to the face heading 250 m;
• Minimum of 12 rooms per operating panel.

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The process plant design for the Copperwood Project is based on a metallurgical flowsheet designed to produce copper concentrate. The flowsheet is based on well proven unit operations in the industry.

The process plant has been designed for a throughput of 6,600 mtpd (dry). The overall flowsheet includes the following steps:
- Crushed ore reclaim;
- Grinding and classification;
- Rougher flotation;
- Rougher concentrate regrind;
- Cleaner flotation, using three stages of cleaning;
-Concentrate thickening and filtration;
-Tailings disposal.

Crushed Ore Reclaim.
Crushed ore from the underground mine will be conveyed to a crushed ore transfer conveyor equipped with a weightometer. This conveyor will discharge onto a bidirectional/reversible conveyor which in turn feeds the crushed ore bins. The two crushed ore bins will be equipped with two pan feeders, each to reclaim material to feed the SAG mill feed conveyor. The conveyor ........