Since the Graphite One Project graphite deposit occurs in a quartz-granite-biotite-sillimanite schist, which is a high grade metamorphic rock, the Graphite Creek mineralization is considered to be of a Flake Graphite Type Mineralization.

The Kigluaik Group consists of amphibolite and granulite facies metamorphic rocks and is therefore divided into two sub-groups, an upper and lower assemblage. Amphibolite grade upper Kigluaik Group schist is exposed on the southern flanks of the Kigluaik mountain range. Pelitic gneiss samples from the upper section of the Kigluaik group have been dated using Rb/Sr to ~735 Ma (Bunker et al., 1979). The basal Kigluaik Group contains granulite grade schist and gneiss, and is exposed on north flank of the mountains. These rocks have no direct counterparts in the adjacent mountain ranges and are believed to represent the deepest crustal rocks exposed in northwestern Alaska (Miller, 1994). The lower Kigluaik Group comprises coarse marble, quartzo-feldspathic gneiss, schist and gneiss of mafic and ultramafic composition, graphite rich schist, and garnet lherzolite.

The Graphite Creek graphite deposit is located on the north side of the Kigluaik Mountains (at about 230 m elevation). More specifically, the graphitic schist occurs on the upslope and footwall surface trace of the reactivated Kigluaik normal fault. The Kigluaik Fault generally strikes at approximately azimuth 250º and dips 75º to the north over a distance of approximately 35 km. Contemporary movement on this fault has uplifted the rugged and youthful Kigluaik Mountains to the south and down thrown the lowlands of the Imuruk Basin to the north (Hudson and Plafker, 1978).

Graphite occurs as high-grade massive to semi-massive segregations and disseminations within amphibolite facies metasedimentary rocks, primarily biotite-quartz schist with zones of sillimanite-garnet-biotite- quartz schist. Based on their apparent association with the Kigluaik Fault, the graphite-bearing schist units strike subparallel to the mountain front and dip north between 40° and 75°.

There are two distinctive graphite-bearing schist intervals at Graphite Creek. The first is sillimanite-garnet-biotite-quartz schist that contains coarse, semi-massive and massive graphite segregations and disseminated graphite. The other interval unit is biotite-quartz schist that typi-quartz schist is the principal host to higher grade graphite and makes up two distinctive layers in the metasedimentary sequence along the north flank of the Kigluaik Mountains. A third potential horizon is defined by ‘pods’ of sillimanite-garnet- biotite-quartz schist. The position of these layers is most likely structurally controlled; that is a folded unit with the third pod-like layer forming in this style as uppermost erosional features (T.Hudson, personal communication, 2012). Hence, shallow-dipping erosional remnants of the southern-most third layer makes up a few discontinuous perched masses at higher elevations. The sillimanite-garnet-biotite-quartz schist layers strike obliquely to the mountain front and dip northwards at 40° to 80°.

The sillimanite-garnet-biotite-quartz schist typically is fine to coarse grained, weathers grey, has a wavy and crenulated schistosity, garnet porphyroblasts (up to 2 cm across), and augen-shaped quartz grains. Discontinuous segregations (lenses and streaks) of coarse high-grade graphite, from centimeters to a few meters thick, are common. These highgrade graphite lenses in the sillimanite-garnet-biotite- quartz-schist have up to 60% coarse, crystalline graphite and were no doubt the sources of hand sorted graphite produced in the early 1900’s. Disseminated flakes of graphite, up to 1 mm or more across, make up several percent of the rock.

The biotite-quartz schist is fine-grained, weathers a rusty ochre colour and has regular layering with individual layers commonly 3 to 10 cm thick. Graphite occurs as disseminated flakes up to about 1 mm across and can make up several percent of the rock. Higher grade graphite-rich layers, varying from 3 to 25 cm in width are present, but are not as common as in the sillimanite-garnet-biotite-quartz schist.

The mining methodology is planned as a truck and shovel operation mining along several contiguous, en-echelon, pits starting at the outcrop and progressing in the down dip direction. This method of mining allows the maximum flexibility as the equipment is highly mobile and can be moved between the active mining pits to offer the most economic extraction of the material and allow the mining engineers a high degree of flexibility in mining the resource-bearing material in a manner which allows the delivery of a consistent grade to the processing plant.

The mining operation would be conducted along 4 active benches: Bench 1 – Overburden extraction, Bench 2 – Mining of Lode 1, Bench 3 – Extraction of Inter-burden, and Bench 4 – Mining of Lode 2/3. As mining progresses with time, the benches will proceed along the outcrop surface and will also continue to mine to depth in the down dip direction.

Bench 1: This initial bench will remove the non-graphite bearing material from the surface down to the top of the graphite-bearing Lode 1. The mining involved with this bench will remove the non-graphite bearing material situated from the topographic surface down to the top of the graphite-bearing Lode 1. As this bench will initiate at the outcrop, the initial bench will be thin, but will increase in volume as the land surface rises and the natural dip of the graphite mineralization progresses to greater depths. It is noted that the topsoil extracted from this zone will be saved for later cover of the reclaimed mine area. Initially the material extracted from Bench 1 will be stockpiled near or adjacent to Bench 1 at a site defined as suitable by geotechnical testing. Generally, this stockpile is located as close to the initial cut as possible to minimize trucking costs. It is noted that as the initial phases of Bench 1 are in an area with a relatively thin layer of overburden, this stockpile will be of minimal size. As mining progresses, the material extracted below the topsoil and above Lode 1 will be trucked to the previously mined area below Bench 4 and the material dumped back into the existing open cut.

Bench 2: This bench entails the mining of the graphite material identified within Lode 1. Over the course of mining the thickness of the bench will vary within the vertical dimensions of the graphite mineralization body, but will not increase or decrease in any progressive pattern. As such, the truck and shovel methodology proposed offers the optimal mining process to effectively extract the material without including significant dilution from the non-graphite bearing overburden or interburden. The material extracted from Bench 2 will be trucked to the mineral processing area for further treatment.

Bench 3: This bench will entail the extraction of the non-graphite bearing interburden between the bottom of Lode 1 and the top of Lode 2. The thickness of this interburden zone is variable. As a result, the boundary between the bottom of Lode 1 and the top of Lode 2 will need to be carefully defined by the mine staff and care must be taken to assure that the extraction of the barren interburden material does not include significant extraction of the graphite bearing material from the top of Lode 2. Material from this bench will be trucked to a previously mined area below Bench 4 and the material dumped back into the existing open cut.

Bench 4: This bench entails the mining of Lodes 2 and 3 as a single unit. As noted before, the non-graphite bearing inter-burden between these two lodes is quite small and variable and, as such, does not lend itself to a dedicated mining horizon. During the mining of Bench 4 it is expected that the mine staff will identify larger zones of non-graphite bearing rock within the bench cut and extract this material for disposal rather than including it in the mill feed extracted from the bench. The non-graphite bearing material will be trucked to a previously mined area below Bench 4 and the material dumped back into the existing open cut. The graphite-bearing material extracted from Bench 4 will be trucked to the mineral processing area for further treatment.

To effectively follow the mine plan outlined above, the optimal method of surface mining will be to conduct what is termed a “truck and shovel” type operation. This method of mining is characterized by its flexibility in mining mineralized bodies of variable thickness and its ability to operate in a multi-pit situation. The material to be moved (whether mill feed material or waste rock) is first blasted to loosen and break up the material. The loosened material is then scooped up by large volume shovels and deposited in large trucks, which transport the material to the mill feed treatment area or to the waste rock dump area.

Grades of graphite mineralization would be closely monitored during production drilling, and production rates in the individual benches would be adjusted to meet operational and millfeed requirements. The basic mine concept presumes that each of the four benches outlined above will have a large shovel and at least two trucks available for material haulage.

Pit optimizations do not include individual benches or ramp design. For the pit size, production requirements, and recommended equipment fleet, TRU considers mining of 10 to 12 m benches in two cuts and development of an 18 m wide ramp, including ditches and safety berm, to be appropriate for the open pit operations. The ramp should be designed with a maximum 10% gradient with the exit appropriately located to minimize transport distances to the mill and the waste rock dumps. Industry average pit slope angles are assumed at this stage of planning.

An estimate of the overburden ratio was generated by analyzing the cross sections generated during the modelling process, and estimating the final pit slope angle. Based upon these assessments it is estimated that the overburden ratio for this project ranges between 2:1 and 4:1. For all subsequent discussion, a value for the overburden ratio was selected to be a conservative 3:1.

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The Mineral Processing Plant has been designed on the basis of producing 60,000 tpy graphite concentrate grading 95% Cg (graphite content). The annual feed rate of run-of-mine material grading 7% Cg to the Plant is 1,018,000 tpy. Recovery of graphite during mineral processing is assumed under optimized conditions to reach 80%.

Once received at the Mineral Processing Plant, the graphite mineralization is processed through the following unit operations:

- Two stages of crushing
- Initial grinding followed by conventional cell rougher flotation and cleaner flotation
- Multiple sequences of grinding/polishing with column flotation to progressively upgrade the concentrate to 95% Cg that is pressure filtered and pneumatically dried.

Crushed material from the storage bins is conveyed to the primary grinding circuit which at full capacity will consist of five rod mills operating in parallel. The rod mill is in closed circuit with cyclones where the ov ........