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NI 43-101 Resource |
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| Resource Estimate |
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| The January 2009 resource statement was prepared by SRK Consulting (Canada) Inc. ("SRK") and includes 8.5 million tonnes in the measured and indicated categories and 1.17 million tonnes inferred category. This includes open pit |
| resources of 4.66 MT measured of 3.64% zinc and 2.04 g/t gold, 1.26 MT indicated of 5.63% zinc and 4.03 g/t gold, and |
| 620,000 tonnes inferred at 2.46% zinc and 3.68 g/t gold and underground resources consisting of 1.06 MT measured at 9.23% zinc, 1.51 MT indicated at 9.11% zinc, and 550,000 tonnes inferred at 6.62% zinc. |
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| An additional 9.1 million tonnes of mineralization below cut-off grade was identified and estimated that did not qualify as mineral resource. |
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| The open pit mineral resources are reported at an average NSR cut-off of US$20 and comprise a substantial tonnage (5.92 million tonnes measured and indicated) and 620,000 tonnes inferred that is potentially minable by surface methods. The underground mineral resources, reported with an average NSR cut-off of US$62 (assuming underground mining costs estimated at US$43 per tonne), show excellent zinc grade, over 9%, in the indicated measured and indicated category. |
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Table 1. Mineral Resource Statement (i) for the Back Forty Deposit, Michigan,
U.S.A. SRK Consulting,
January 12, 2009. |
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Grade |
Contained |
| Classification |
Tonnage
[t] |
Gold
[g/t] |
Zinc
[%] |
Silver
[g/t] |
Copper
[%] |
Lead
[%] |
Gold
[1000 oz] |
Zinc
[M lbs] |
Silver
[1000 oz] |
Copper
[M lbs] |
Lead
[M lbs] |
| Open Pit Resources (ii) |
| Measured |
4,660,000 |
2.04 |
3.64 |
29.2 |
0.68 |
0.08 |
305 |
374 |
4,380 |
70 |
8 |
Indicated |
1,260,000 |
4.03 |
5.63 |
47.3 |
0.37 |
0.30 |
160 |
156 |
1,872 |
10 |
8 |
| Meas.+ Ind |
5,920,000 |
2.46 |
4.06 |
33.1 |
0.61 |
0.13 |
465 |
530 |
6,252 |
80 |
16 |
| Inferred |
620,000 |
3.68 |
2.46 |
46.5 |
0.15 |
0.44 |
74 |
34 |
921 |
2 |
6 |
| Underground Resources (iii) |
| Measured |
1,060,000 |
1.21 |
9.23 |
26.5 |
0.39 |
0.86 |
41 |
216 |
904 |
9 |
20 |
Indicated |
1,510,000 |
1.51 |
9.11 |
24.0 |
0.19 |
0.47 |
74 |
303 |
1,163 |
6 |
16 |
| Meas.+ Ind |
2,580,000 |
1.39 |
9.16 |
25 |
0.28 |
0.63 |
115 |
521 |
2,067 |
16 |
36 |
| Inferred |
550,000 |
2.03 |
6.62 |
36.4 |
0.28 |
0.67 |
36 |
80 |
643 |
3 |
8 |
| Combined Open Pit and Underground |
| Meas.+ Ind |
8,500,000 |
2.13 |
5.61 |
30.6 |
0.51 |
0.28 |
580 |
1,051 |
8,319 |
96 |
52 |
| Total Inferred |
1,170,000 |
2.90 |
4.42 |
41.7 |
0.21 |
0.55 |
110 |
114 |
1,564 |
5 |
14 |
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| (i) Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$0.79 per pound zinc, US$1.89 per pound copper, US$0.55 per pound lead, US$678 per troy ounce gold and US$10 per troy ounce silver. Metallurgical recoveries were determined and used for each of eight metallurgical domains determined for the deposit. |
| (ii) Cut off grades for each of eight metallurgical domains based on NSR values, average cut-off grade for open pit resource contained within an optimized pit shell US$20. |
| (iii) Cut off grades were determined for each of eight metallurgical domains based on NSR values, average cut-off grade for underground resources outside of an optimized pit shell is US$62. |
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| A previous NI 43-101 compliant resource published in March of 2007 contained a measured plus indicated 6.64 million tonnes at 5.32% zinc, 2.28 g/t gold, 28.8 g/t silver, and 0.52% copper and 1.75 million tonnes inferred at 2.61% zinc, 2.82 g/t gold, 32.4 g/t silver, and 0.15% copper. This resource did not use NSR parameters to determine the prospect for economic extraction. |
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| The new mineral resource statement places the Back Forty Deposit in the top 20th percentile in terms of size and contained zinc when compared to 137 Canadian VMS deposits with reported production and reserves, and in the top 10 percent of deposits in terms of contained gold in the mineral resource. When compared to published geologic tonnages for 846 VMS deposits worldwide, Back Forty ranks in the top 18 percent for size, the top 16 percent for contained zinc, and the top 10 percent for |
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| contained gold (Source: Geological Survey of Canada, Mineral Deposits of Canada: Synthesis of Mineral Deposits Knowledge, Volcanogenic-Associated Massive Sulfide Deposits, Appendix 1). |
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| The quantities of material offering reasonable prospects for economic extraction by open pit were determined using Mintec's Minesight and the Lerchs-Grossman optimizing algorithm, which evaluates the profitability of each resource block based on its NSR value. The optimization parameters are based on ongoing scoping studies for the project as well as by survey of similar deposits. Metal price assumptions are as follows: US$0.79 per pound zinc, US$1.89 per pound copper, US$0.55 per pound lead, US$678 per troy ounce gold and US$10 per troy ounce silver. |
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| The drill hole database used for grade estimation consists of approximately 5,170 assay intervals from 336 diamond drill holes. Metal grades were estimated using an ordinary kriging estimator and two or three estimation runs for each domain. Block model validation indicates the ordinary kriging resource estimate for the Back Forty Project is reasonable and appropriate. |
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Aquila measured specific gravity for approximately 293 sampled intervals using a weight in air and weight in water methodology. On a sub-domain basis, a linear regression was developed to correlate measured specific gravity with sulfur assays. This relationship was then used to assign a specific gravity value for those intervals with sulfur assays, but without specific gravity measurement.
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Resource By Metallurgical Domain and Zone |
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Further analysis of the Back Forty Deposit divided the resource in terms of metallurgy. Metallurgical studies of the Back Forty Deposit conducted by G&T Metallurgical Services Ltd. of Kamloops, B.C., released in 2008, defined eight metallurgical domains based on the dominant economic minerals and metal recovery method that correspond to the different mineralized zones. For example, higher grade zinc zones, such as the Main Zone massive sulfide, were separated from high gold-low base metal zones, e.g. the 90 Zone. The resource block model was then sub-divided into one of these eight metallurgical sub-domains to determine an appropriate NSR value for each resource block. |
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The results, shown in Tables 2 and 3, allow a comparison of where metals are residing at the Back Forty Deposit. The open pit measured and indicated resource of 5.92 million tonnes can thus be viewed as a combination of 3.39 million tonnes (measured and indicated) of higher grade zinc material (6.29% zinc), 1.24 million tonnes (measured and indicated) of copper-rich resource (1.81% copper) and a further 620,000 tonnes (measured and indicated) of high grade gold zones averaging 6.5 g/t gold plus Stringer and Tuff Zone materials. The underground resource consists largely of zinc-rich Main Zone (in the South Limb) and Pinwheel massive sulfide with accessory material contributed by the Tuff, Stringer, and PM Zones. |
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Table 2. Open Pit Mineral Resources - Metallurgical Domains and Zones |
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| Met Domain/Zone |
Cut-off
[US$NSR] |
Tonnes |
Gold
g/t |
Silver
g/t |
Copper
% |
Lead
% |
Zinc
% |
| Massive Sulfide (Main Zone) |
Measured + Indicated |
19 |
3,390,000 |
2.00 |
15.7 |
0.3 |
0.09 |
6.29 |
Inferred |
19 |
100,000 |
1.94 |
16.2 |
0.21 |
0.21 |
9.22 |
| Massive Sulfide (Tuff Zone) |
Measured + Indicated |
19 |
90,000 |
1.92 |
108.7 |
0.10 |
2.92 |
10.81 |
Inferred |
19 |
30,000 |
1.53 |
94.8 |
0.07 |
2.8 |
11.41 |
| Massive Sulfide (Pinwheel Zone) |
Measured + Indicated |
19 |
1,240,000 |
1.85 |
62.1 |
1.81 |
0.06 |
0.97 |
Inferred |
19 |
10,000 |
1.20 |
123.4 |
0.45 |
0.14 |
2.00 |
| Stringer Sulfide (Stringer Zone) |
Measured + Indicated |
19 |
580,000 |
2.19 |
10.4 |
0.26 |
0.05 |
0.76 |
Inferred |
19 |
170,000 |
2.39 |
9.9 |
0.27 |
0.05 |
0.71 |
| Oxide (Pinwheel Gossan) |
Measured + Indicated |
29 |
200,000 |
7.83 |
153.8 |
0.99 |
0.07 |
0.01 |
Inferred |
29 |
0 |
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| Oxide (East Gossan) |
Measured + Indicated |
24 |
80,000 |
17.98 |
7.5 |
0.04 |
0.02 |
0.01 |
Inferred |
24 |
0 |
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| Gold (90 Gold Zone) |
Measured + Indicated |
24 |
340,000 |
3.05 |
53.8 |
0.02 |
0.17 |
0.25 |
Inferred |
24 |
150,000 |
2.86 |
70.4 |
0.02 |
0.23 |
0.50 |
| Gold (PM Gold Zone) |
Measured + Indicated |
|
0 |
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Inferred |
24 |
160,000 |
7.46 |
68.1 |
0.12 |
0.78 |
0.3 |
| Totals |
Measured + Indicated |
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5,920,000 |
2.46 |
33.1 |
0.61 |
0.13 |
4.06 |
Inferred |
|
620,000 |
3.68 |
46.5 |
0.15 |
0.44 |
2.46 |
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| Table 3. Underground Mineral Resources- Metallurgical Domains and Zones |
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| Met Domain/Zone |
Cut-off
[US$NSR] |
Tonnes |
Gold
g/t |
Silver
g/t |
Copper
% |
Lead
% |
Zinc
% |
| Massive Sulfide (Main Zone) |
Measured + Indicated |
62 |
1,410,000 |
1.57 |
20.7 |
0.22 |
0.29 |
8.93 |
Inferred |
62 |
370,000 |
1.69 |
29 |
0.34 |
0.42 |
6.7 |
| Massive Sulfide (Tuff Zone) |
Measured + Indicated |
62 |
160,000 |
1.28 |
52.3 |
0.06 |
1.97 |
9.63 |
Inferred |
62 |
100,000 |
1.49 |
36.3 |
0.05 |
1.73 |
8.41 |
| Massive Sulfide (Pinwheel Zone) |
Measured + Indicated |
62 |
980,000 |
1.02 |
26.8 |
0.4 |
0.91 |
9.65 |
Inferred |
62 |
40,000 |
0.53 |
88.4 |
0.42 |
0.16 |
7.52 |
| Stringer Sulfide (Stringer Zone) |
Measured + Indicated |
62 |
30,000 |
5.36 |
21.2 |
0.11 |
0.19 |
1.35 |
Inferred |
62 |
10,000 |
5.57 |
10.9 |
0.12 |
0.11 |
1.94 |
| Gold (PM Gold Zone) |
Measured + Indicated |
67 |
0 |
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Inferred |
67 |
30,000 |
8.8 |
66.3 |
0.10 |
1.00 |
0.06 |
| Totals |
Measured + Indicated |
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2,580,000 |
1.39 |
25.0 |
0.28 |
0.63 |
9.16 |
Inferred |
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550,000 |
2.03 |
36.4 |
0.28 |
0.67 |
6.62 |
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The mineral resources are reported in accordance with Canadian Securities Administrators’ National Instrument 43-101 and have been estimated in conformity with generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserve. The resource estimate was completed by G. David Keller, P.Geo. (APGO #1235) an independent qualified person as this term is defined in National Instrument 43-101. The effective date of this resource estimate is January 12, 2009. |
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