The Johnny Lee copper deposit is hosted by Mesoproterozoic sedimentary rocks of the Newland Formation of the Belt Supergroup that were deposited in a portion of the Belt-Purcell basin referred to as the Helena Embayment. The Newland Formation comprises shale, carbonaceous shale, calcareous shale, dolomite, conglomerate, sedimentary breccia and, bedded-pyrite massive sulphide (massive sulphide) that was deposited along the fault controlled, northern margin of the Helena Embayment.

Copper mineralization at the Johnny Lee deposit is hosted by two massive sulphide units that occur at different stratigraphic levels within the sedimentary succession. These units are referred to as the Upper Sulphide Zone (USZ) and Lower Sulphide Zone (LSZ). Copper mineralization of economic significance in the USZ and LSZ is developed sub-parallel to bedding in the massive sulphide but is localized and mineralization is interpreted to have formed subsequent to the formation of the host units. In places, economically significant copper mineralization extends into the clastic sediment units above, below, and interbedded with the massive sulphide.

The zone of greater than 0.25% copper mineralization in the USZ is referred to as the Upper Copper Zone (UCZ). The UCZ is gently folded by a WNW plunging syncline-anticline pair such that its strike is variable and its dip ranges from 0° to 20°. The northeastern part of the UCZ outcrops and is oxidized to a depth of 13 meters (m) below surface (most of this oxidized mineralization is located on the McGuire parcel which is excluded from the Black Butte project). Within the SRA mineral tenure, the UCZ occurs at depths of 40 to 210 m below surface.

The UCZ is truncated in the north by the VVFZ and is transected and displaced by Fault 1 which divides the UCZ into Eastern and Western blocks. The UCZ Western block has plan dimensions of 1,000 m long by 440 m wide and a thickness that ranges from 4 to 45 m. The UCZ in the Eastern Block has plan dimensions of 950 m long by 140 to 185 m wide and a thickness that ranges from 5 to 37 m. Within the zone of more than 0.25% copper mineralization, the UCZ contains one to six, stacked bedding, sub- parallel zones of more than 1.2% copper mineralization that range in thickness from 1 m to 12 m.

Primary copper mineralization in the UCZ occurs as copper sulphides (chalcopyrite, tennantite, bornite and cuprian-siegenite) that texturally overprint early framboidal or melnikovite textured pyrite. Copper sulphide grain size and liberation characteristics in the UCZ are a function of both host lithofacies variation and the amount of progressive hydrothermal remobilization that has occurred. The northern part of the UCZ generally experienced stronger hydrothermal remobilization and exhibits coarse grained, well-liberated copper sulphides, and recrystallized euhedral pyrite. The southern part of the UCZ is generally characterized by fine grained copper sulphides that are interstitial to early pyrite. Heterogeneous hydrothermal activity, and preferential replacement of atolltextured pyrite, in the southern part of the UCZ has created localized zones of coarse grained, well-liberated copper sulphide.

The intersection zone of Fault 1 and a bedding sub-parallel, brittle-ductile shear zone has resulted in enhanced fracturing and has allowed localized water ingress into the UCZ, below the local level of surficial oxidation. Primary copper sulphides in this zone have been supergene altered to chalcocite, covellite, and secondary bornite.

Arsenic in the UCZ occurs in tennantite, arcasite, and pyrite. The concentrations of these minerals in the UCZ is highly variable.

Within the LSZ, a deeper copper mineralization zone is termed the Lower Copper Zone (LCZ). The LCZ is situated below the UCZ, at depths of 340 to 520 m below surface. Mineralization occurs in three lenses representing copper grades greater than 2%, that occur at the same stratigraphic level, termed the West, Central, and East lenses. These lenses are truncated to the south by the VVFZ. The three LCZ lenses strike east-west and dip to the south at 15°to 30°, the variable dip resultant from gentle folding during Laramide orogenesis. The East lens has a strike length of 450 m, a downdip extent that ranges from 45 to 250 m and a thickness that ranges from 1 to 15 m. The Central lens has a strike length of 360 m a down- dip extent that ranges from 35 to 270 m and a thickness that ranges from 1 to 8 m. The West lens has a strike length of 350 m, a down-dip extent that ranges from 45 to 200 m and a thickness that ranges from 1 to 6 m.

The LCZ has been subject to a significantly higher intensity of hydrothermal activity compared with the UCZ. Pyrite in the LCZ is predominantly crystalline, although minor relict, fine-grained partially recrystallized framboidal or melnikovite pyrite occurs. Copper mineralization in the LCZ is almost entirely hosted by chalcopyrite that is coarse-grained in comparison with the northern part of the UCZ. Trace amounts of tennantite are rarely observed, typically interstitial to early pyrite. Arsenic concentrations in the LCZ are considered minor.

The Johnny Lee deposit is considered a hybrid SEDEX (sedimentary exhalative sulphide) – SCC (sediment-hosted stratabound copper) deposit. It is likely that current fault architecture represents reactivated, basin rift and transform fault architecture, the intersections of which formed feeder structures for mineralizing hydrothermal fluids during basin evolution.

The preliminary mine design developed for the PEA provided access to both the UCZ and LCZ from a single portal, three main ramps and one decline. The drift-and-fill mining method was selected for mining of both the LCZ and UCZ due to the shallow dip and generally narrow width of the mineralized zones. No geotechnical study of the Johnny Lee deposit was completed for the PEA.

Subsequent to the PEA, Mine Design Engineering were contracted by SRA to complete a geotechnical study of the Johnny Lee deposit (Kalenchuk et al, 2015). The study highlighted that the rock mass quality in the USZ and LSZ were expected to be poor to fair and that very poor rock mass quality was expected in the VVFZ. The study concluded that the Johnny Lee deposit is well suited to drift and fill mining (Kalenchuk et al, 2013).

The metallurgical flow sheet developed during the PEA and used to design the metallurgical plant envisaged passing the mill feed through a jaw crusher to 125 mm K80 and then grinding to 38µm K80 in a SAG/ball mill/tower mill circuit. The ground material would then be processed using copper rougher flotation followed by rougher concentrate regrinding in stirred mills to 8µm K80. The reground copper rougher flotation concentrate would then be upgraded by three stages of cleaner flotation. It was envisaged that the final cleaner flotation concentrate would contain on average 23.5% copper and be thickened and filtered before being shipped to smelters. Copper rougher flotation tailings, together with copper cleaner scavenger tailings were planned to be used for paste-fill or delivered to the tailings storage facility (Winckers et al, 2013). During the development of the MOP application, subsequent to the PEA, the tailings storage facility was comprehensively redesigned as a doublelined, cemented tailings storage facility.