The sulphide mineral deposits are associated with the ultramafic intrusions within the Pipe Formation, which is part of the Opswagan Group. The sulphide deposits occur as disseminated sulphides within the ultramafics, massive sulphide veins and lenses within the ultramafic and along the contact of the ultramafic with the Pipe Formation, and as massive sulphide veins and lenses within the Pipe Formation. All mineral reserves are contained within the latter two deposit types.

The stratigraphy at the Thompson Mine is overturned and dips 65 degrees to the west. The Archean Gneisses are located in the Thompson Mine hanging wall. Unconformably overlying the gneisses are quartzite, schist, nickel mineralization, calcareous marbles and iron formation. Amphibolite dykes and pegmatites crosscut all lithologies. Ultramafic bodies (locally called peridotite) are associated with the nickel mineralization in areas of Thompson Mine. The majority of sulphide mineralization at the Birchtree Mine is Ultramafic Associated Deposits.

Deposits are generally classified as to their spatial relationship of the mineralization to ultramafic bodies:

Metasedimentary Hosted Deposits
The structurally controlled dilation sulphide matrix mineralized zones are contained within the P2 Schist. Inclusions of wall rocks and ultramafics are common in the massive sulphide. The mineralization is linear and more predictable with widths ranging from 0.3 m to 60 m. Pinch and swell structures are common. The majority of Thompson Mine orebodies fall in under this category.

Ultramafic Associated Deposits
The sulphide mineralized zones tends to concentrate between the footwall or hanging wall rocks and the ultramafic, although it is not uncommon for the ore to completely encompass the ultramafic. The Birchtree Mine 84 Orebody can generally be described as brecciated ultramafic within a sulphide matrix. The ultramafic inclusions, which are randomly distributed, range from centimetres to hundreds of metres in size.

At Pipe 2, mineralization consists of ultramafic associated disseminations, net textured sulphides, semi-massive segregations, and as semi-massive to massive veins and breccias. The sulphide zones extend along strike and dip from the ultramafic host into sediment hosted veins, pods and lenses of massive and breccia sulphide.

Sulphides
The massive sulphides contain inclusions of ultramafics and sediments. On average, massive sulphide consists of 90% pyrrhotite, 10% pentlandite and less than 1% chalcopyrite. Cobalt is contained within the pentlandite.

PGE Mineralization
Recent exploration data from the 1D Lower orebody at Thompson Mine indicates elevated platinum group element levels associated with remobilized, metasediment hosted, sulphide ores. The evaluation of the PGE potential of the TNB is now a part of Vale exploration approach. Several studies are currently underway to better understand PGE mineralization and distribution within ultramafic associated and metasediment hosted sulphide ores.

A positive Pd to Ni correlation exhibited in the 1D Lower data is beneficial in identifying and quantifying the potential PD resource within current ore zones. Data acquisition and evaluation of the PGE potential of metasediment hosted 108 and 109 Orebodies at Birchtree is currently underway.

Birchtree Orebodies
The Birchtree Mine comprises the following orebodies and are illustrated on Figure 2-5.
* 84 – The 84 orebody is a breccia which wraps a large ultramafic. It is at the south end of the mine. The ore is located on the footwall side of the ore. The ore zone is up to 300 ft (100 m) wide. The south side of the ultramafic generally has higher grades than the north end. The orebody has been truncated and displaced by the 609 and the 906 faults. This orebody is the major producer at Birchtree Mine. The orebody has been mined out above the 906 fault.

* 85 – The 85 orebody is the down-dip extension of the 84 Orebody below, and offset by, the 609 Fault. It is also hosted in ultramafic.

* 108/109 – The 108/109 is a linear shear structure that ranges in width from 10 to 60 ft (3 to 18.2 m). There is a change in direction in the orebody that creates a widening of the ore zone. The grade increases around the bend and to the north of the change of direction.

* 124 - The 124 orebody wraps the northern ultramafic. The ore is interstitial through the edges of the ultramafic. It is 20 to 200 ft (6.1 to 61 m) wide. It has a higher grade than the other ultramafic ore deposits within the mine. This orebody has been mined up to 30 ft (9.1 m) below 300 Level.

Mining methods primarily use Vertical Block Mining (VBM), a Slot-Slash Method, with vertical blocks averaging 100 ft in height, and Cut and Fill mining. The ore is crushed underground to -15 cm and shipped to the concentrator.

Integrated mining, milling, smelting and refining operations to process ore into finished nickel with a nominal capacity of 38,000 metric tons of refined nickel per year.

Local concentrate is combined with nickel concentrate from the Voisey’s Bay operations for smelting and refining to high quality nickel plate product. The Company expects to decommission one of the two furnaces in Thompson in 2017 and the other in 2018. The Company also expects to cease processing Voisey’s Bay feed in Thompson during the year of 2017 and plans to send the majority of the feed from Thompson to be refined in Long Harbour and Sudbury. The Company intends to phase out smelting and refining activities in Thompson by 2018, due primarily to the capital costs associated with the federal sulfur dioxide emission limits defined under the pollution prevention plan under the Canadian Environmental Protection Act (CEPA), as well as to declining feed availability.