The Scully Deposit mineralization style is a deposit typical of the Superior-Lake type of Iron Formations.

The Scully Mine lies within the Labrador Trough in Western Labrador. The Sokoman Formation is an iron formation that consists of three (3) iron bearing formations, named the Upper, Middle and Lower Iron Formations. The Sokoman Formation is more than 300 m thick near the Scully Mine and has been subjected to two (2) episodes of folding and metamorphism during the Hudsonian and Grenville orogenies, resulting in a complex structural pattern in the Wabush Area. The younger Menihek and Shabagamo Formations and the older Denault, Attikamagen, and Wishart Formations all outcrop in the vicinity of the mine site. The mineral deposit that defines the Scully Mine consists of folded and faulted stratigraphic beds of iron-bearing units within the regional Sokoman Iron Formation.

Mineralization
The ore minerals are hematite (specularite), magnetite, and martite. The waste minerals are quartz and hydrated iron oxides such as limonite and goethite. Manganese oxides also occur in bands or are disseminated throughout the iron-bearing units.

All units are overlain unconformably by glacial till (overburden) and underlying the Lower Member is a silicate-rich iron formation known as the Basal Silicates (considered the footwall waste unit). Unfolded, the average thickness of the formation is about 800 feet. Each member is split up into separate numeric sub-members, which reflect the changes in ore characteristics (mineralogy, hardness, manganese abundance).

Basal Silicates
Near surface, the basal silicates comprise narrow bands of quartz, limonite and goethite, with pyrolusite in bands running parallel to the bedding. Characteristically, these have high iron assays with very low weight recovery. Fresh samples from drill holes show a layered quartz-amphibole assemblage. Green biotite and chlorite are also common, and garnets become more abundant near the base of the member.

Lower Member Ore
This is generally a hard, dense, blue quartz-hematite rock, with little or no limonite (except where fibrous silicates along the bedding planes of the ore are altered). The ore is distinctly banded with segregation of hematite, magnetite and quartz. Magnetite is common, increasing toward the base of the unit. Vugs are rare and abundant manganese oxides occur in bands and disseminated throughout the ore. Near the base, the layers of hematite and magnetite give way to an amphibole assemblage, which near the surface has altered to limonite. The unit is characterized by intermediate iron and iron unit recovery values. The Lower Member contains an internal thick interbed of limonite-rich ore which presents low weight recoveries .

Middle Quartzite
This is a narrow but persistent band of quartzite which runs the entire length of the orebody. Iron minerals, including limonite and goethite, and more rarely hematite, and pyrolusite fill lenses, joints and cracks. Because of its distinct lithology, this horizon has been widely used as a marker horizon in the structural interpretation of the orebody.

Middle Member
This is invariably a coarse-grained, blue specularite-quartz rock. Hematite often makes up more than 50 percent by weight of the rock. The ore is usually soft and friable, breaking down to constituent grains on drying. This is normally explained by intense weathering and removal of silica. Elsewhere, similar leaching of the ores at Knob Lake (O’Leary, 1972) is demonstrated in part by the presence of depressions and crevices filled with lacustrine clays and argillite and containing fossil plants of Cretaceous age. Evidence of leaching of this nature on a similar scale is not found at Wabush Mine.

The magnetite content of the member is low but increases rapidly toward the base. Manganese is present as earthy pyrolusite in small vugs which vary in size from half a cm to 5 cm diameter. It also occurs disseminated through the ore, as distinct bands and included in the hematite and magnetite grains, both as separate mineral phases and in solution in the hematite and magnetite crystals. The ore is noticeably banded and has a sub micaceous high lustre. Hematite and quartz are often completely segregated into bands. Massive, hard, mixed quartz-hematite bands, with a pink hue, are also common. Hematite in this association is non-micaceous and has a dull lustre. Hematite and quartz are cemented by a fine-grained magnetite matrix. The nature of the contact between Middle Member ore and the Middle Quartzite varies, but there is often a layer of limonite-rich, oxidized ore known as sub-unit 34 which is sometimes considered waste.

Upper Member
This lies immediately beneath the hanging-wall carbonaceous quartzite and is a quartz-goethite-limonite rock with varying amounts of magnetite and specularite. Quartz grains are stained with limonite, giving this member a dirty brown appearance, and bands of colloidal goethite up to 15 cm wide are relatively common. The Upper Member varies from a hard-fine-grained through coarse grained and friable to a soft earthy variety. It is thought that the limonite coatings of quartz grains have been produced by weathering near surface. The member is characterized by low iron and a poor weight recovery, making it the least attractive of the three (3) ore members.

Tacora Resources Inc. (“Tacora”) has been in production at the site since June of 2019.

The operation consists of a conventional surface mining method using an owner mining approach with electric and diesel hydraulic shovels, mine trucks and electric drills. Tacora had purchased the loading and drilling fleet in anticipation of the mine restart.

Producing a LOM plan targets a production rate of about 6 Mtpy of iron ore concentrate with a crude ore feed to the concentrator averaging 18 Mtpy or about 3 Mtpy per grinding line.

Mine Designs
The open pit area measures approximately 5.4 km in the east-west direction and 2.1 km in the north-south direction. Mining of the Tacora open pit is planned with three distinct pits: Boot Pit, Center Pit and East Pit. The Center Pit is further divided into three stand-alone sub-pits / sectors: Center Pit West, Center Pit South, and Center Pit East. All Pits contain varying degrees of historical mining. Currently, mining is taking place in the Boot Pit and Center Pit West.

The final design pit contains 477.9 Mt of ore at an average grade of 34.88% Fe, 2.61% Mn and 5.54% SAT. This mineral reserve is sufficient for a 27-year mine life with possibilities for expansion at higher iron ore prices and with the conversion of inferred resources to measured and indicated resources. A total of 868.8 Mt of ore and waste is to be mined for an overall strip ratio of 0.82:1.

The batter angles vary from 50 to 65 degrees based on a final 12 to 24 m bench height. The DOM2 domain contains single 12 m benches while all other zones allow for 24 m double benches.

Overburden and Waste Rock Storage
A total of 390.9 Mt of waste material will be mined throughout the LOM. Waste rock storage is planned in depleted pits and in conventional waste storage area (dumps) outside of pits. Dumping has already taken place in some of the surface dumps. The historical amount of material already dumped in each waste location is unknown and not included in this report. In the early years of the project, waste material will be stored to the south of the pits on waste dumps South and South West and inside the West Extension in-pit dump. Later, as the Project expands to the East, the North Dump will become active. Once the East Pit West is depleted, waste material will be stored in this pit allowing for lower haulage costs and a reduced environmental impact. The North West dump is used for waste rock coming from Center Pit West and Boot Pit in the later years of the Project.

The waste dumps located outside of the pits are mostly designed above historic waste storage locations. The new waste dumps are built in 12 m stacks with 14 m catch benches allowing for rehabilitation when filled to maximum capacity. A 40 m distance was kept from the base of the new waste dumps to the limit of the historic ones upon which they are built. This distance was kept to allow for drainage infrastructures around the new waste dumps.

Ore stockpiles are located to the East adjacent to the crusher location. The total stockpile capacity is 11.0 Mt, which is greater than the stockpile requirements of 9.5 Mt.

Mine Production Schedule
The mine production schedule is completed on a quarterly basis during the first year (2021) and on an annual basis thereafter. There is a ramp up period over the Year 2021, after which it is expected that the mill will proceed at the design capacity of 6 Mt of concentrate per year. The mine ramp-up period lasts a total of 12 months which is planned to upgrade and commission the processing facilities.

The objective of the LOM plan is to maximize the discounted operating cash flow of the Project subject to various constraints:
• Supply 18 Mtpy of crude ore to the plant to produce 6 Mtpy of iron ore concentrate.
• Supply ore to the plant subject to the contaminant level constraints.
• Limit the mining rate to approximately 36 Mtpy.
• Limit the vertical drop down rate to 5 benches per phase per year.

The peak mining rate is 36 Mt mined and 39.3 Mt moved in Year 2035. The average mining rate is 33.0 Mtpy during operations.

Drilling and Blasting
Drill and blast specifications are established to effectively single pass drill and blast a 12 m bench. For this bench height a 349 mm (13¾ in.) blast holes size is used on a 9.25 m burden by 9.25 m spacing with 1.8 m of sub-drill. This blast hole size has been used in the past and production blasting was the same in all areas of the mine with a typical blast involving about 65 holes and about 220 kt per blast. The current blasts typically exceed 1.0 Mt.

The rotary drill rigs currently in use by the project (1x 49 HR electric and 1x CAT MD6640 electric) have a hole size range of 251 mm to 406 mm.

Blasting is accomplished with a high energy bulk emulsion with a density of 1.2 kg/m3 to generate a powder factor of 0.30 kg/t for ore and 0.27 kg/t for waste. Blast holes are initiated with electronic detonators and primed with 450 g boosters. The bulk emulsion product is a gas sensitized pumped emulsion blend specifically designed for use in wet blasting applications.

The average drill productivity for the production rigs is estimated at 19.4 m/h with an instantaneous penetration rate of 43 m/h. The overall drilling productivity includes time lost in the cycle when the rig is not drilling such as move time between holes, moves between patterns, drill bit changes, etc. The average drilling productivity inclusive of a 5% redrill factor is estimated at 4,794 t/h in ore and 4,046 t/h in waste due to the different material densities.

Blasting activities are outsourced to an explosives provider who is responsible for supplying and delivering bulk explosives in the hole. The mine engineering department is responsible for designing blast patterns and relaying hole information to the drills via the wireless network.

Final wall blasting practices will be very similar to production blasting and will not involve pre split holes. Pre-split blasting practices are not recommended due to the incompetent nature of the rock mass. The spacing on the back holes will be reduced and all back row holes will be drilled without subgrade with a lighter charge and no stemming. Along the wall, there will typically be only one hole fired per delay. The final wall blast will be carried out as trim blasts with no more than four rows deep and blasting to a free face.

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For the remainder of 2021, the availability and mill throughput will be gradually increased as modifications of the equipment and process are implemented. The modifications should be completed by the end of 2021 so that in 2022 onward, the concentrate production target could be met.

The Scully concentrator process flowsheet consists of a crushing and grinding circuit followed by a wet gravity separation circuit and finally, a dry concentration circuit to reduce the manganese and silica concentrations

Wet Concentration and Tails Thickener
The first stage of the wet concentration circuit is made of 160 rougher spirals per line supplied by Mineral Technologies in 1998. The spiral concentrate is processed in hydrosizers where the lighter waste material is removed from the denser iron-ore concentrate through the use of a concurrent upflow of water through a bed of concentrate. A total of twelve (12) 7-foot square Linatex hydrosizers (2 by line) were installed in 1 ........