The Pegmont lead-zinc deposit is a body of stratiform lead-zinc sulphides contained within a metamorphosed silicate facies BIF. It is considered to be an example of a BHT deposit.

Pegmont is enveloped by a variable but large volume of late or postorogenic fracture/vein- controlled alteration. Williams et al identified two stages of alteration. Stage 1 veins typically are composed of quartz ± K feldspar ± tourmaline ± biotite ± rutile ± ilmenite associated with K feldspar ± muscovite ± tourmaline, or biotite ± muscovite ± garnet alteration. Stage 2 quartz ± chlorite ± calcite ± ferroan dolomite ± hematite ± sulphide veins are associated with fine-grained muscovite (illite-phengite) + chlorite ± carbonate alteration.

A largest amphibolite (hornblende-plagioclase) body is poorly exposed in sub-crop on the edge of the mining lease, called the “Lease Amphibolite”, it is a flay lying, highly continuous body that transgresses the BIF without any apparent displacement. The Lease Amphibolite displays textural zoning, which may reflect chilled margins and compositional layering. The southeast edge of Zone 3 is defined where the amphibolite intersects the Lens B BIF, to the southeast of this the Lease Amphibolite is below the BIF's and to the northwest it is above the BIF's. Drill data density in the Lease Amphibolite is less than the mineralization.

The Squirrel Hills Granite, part of the Williams Batholith, is over 100 km north-south and up to 25 km w ........

The Pegmont project includes three resources consisting of the BHZ, the Main Zones (Zones 1- 5), and the Bridge Zone. The BHZ can be developed as an open pit, the Main Zone can be developed as a combination of open pit and underground, and the Bridge Zone is an underground resource.

AMC (AMC Mining Consultants (Canada) Ltd) developed the Mineral Resource block models for the Main Zone and BHZ for evaluation of the open pit mining potential. The block models are proportional models, containing a field for ore percent and waste percent, with block dimensions of 5 m in the X (east) direction by 5 m in the Y (north) direction by 5 m in the Z (vertical) direction for the Main Zone, and 2.5 m in X by 2 m in Y by 2.5 m in Z direction for the BHZ.

AMC proposes to mine the open pits using a conventional truck and excavator mining method. AMC has assumed that a 10 m bench height would be adopted for waste rock, and that mineralized material will be mined in 2.5 m flitches to increase mining selectivity. Mining of mineralized material will occur using a hydraulic excavator in backhoe configuration (example: Komatsu PC1250). Hydraulic excavators in front-shovel configuration (example: Komatsu PC2000) will be used in areas of bulk waste rock to increase the rate of mining in waste rock and reduce operating costs.

The average productivity of the PC1250 excavators in blasted mineralized material is expected to be approximately 1,080 t/op hr. The productivit ........

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