Report to:
Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada
Document No. 1195890100-REP-R0001-01
1195890100-REP-R0001-01 Report to:
MAGINO PROPERTY PRELIMINARY ECONOMIC ASSESSMENT AND TECHNICAL REPORT, ONTARIO, CANADA
EFFECTIVE DATE:FEBRUARY 3, 2012
Prepared by Les Corradine, P.Eng. Todd Kanhai, P.Eng. Cris Wright, P.E. Hassan Ghaffari, P.Eng. Sabry Abdel Hafez, Ph.D., P.Eng. Andrew Ross, MSc., P.Geo., CP, FAusIMM Graham Wilkins, P.Eng. Scott Martin, P.Eng. Charles Hunt, P.Eng., M.Sc.
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Suite 800, 555 West Hastings Street, Vancouver, British Columbia V6B 1M1 Phone: 604-408-3788 Fax: 604-408-3722
1195890100-REP-R0001-01 REVISION HISTORY
REV. PREPARED BY REVIEWED BY APPROVED BY NO ISSUE DATE AND DATE AND DATE AND DATE DESCRIPTION OF REVISION January 26, 00 All QPs Les Corradine Les Corradine Draft to Client for review. 2012 February 3, 01 All QPs Les Corradine Les Corradine Final to Client. 2012
1195890100-REP-R0001-01 TABLE OF CONTENTS
1.0 SUMMARY ...... 1-1 1.1 INTRODUCTION ...... 1-1 1.2 PROPERTY LOCATION AND DESCRIPTION ...... 1-1 1.3 GEOLOGY AND MINERALIZATION ...... 1-2 1.4 MINERAL RESOURCE ESTIMATE ...... 1-2 1.5 MINING ...... 1-4 1.6 METALLURGY ...... 1-5 1.7 ENVIRONMENTAL ...... 1-6 1.8 INFRASTRUCTURE ...... 1-6 1.9 CAPITAL AND OPERATING COSTS ...... 1-6 1.10 ECONOMIC ANALYSIS ...... 1-7 1.11 CONCLUSION ...... 1-7 2.0 INTRODUCTION ...... 2-1 3.0 RELIANCE ON OTHER EXPERTS ...... 3-1 4.0 PROPERTY DESCRIPTION AND LOCATION ...... 4-1 4.1 LOCATION ...... 4-1 4.2 STATUS OF MINING TITLES ...... 4-2 4.3 ENVIRONMENTAL MATTERS ...... 4-6 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 5-1 5.1 ACCESSIBILITY ...... 5-1 5.2 CLIMATE ...... 5-1 5.3 LOCAL RESOURCES ...... 5-1 5.4 INFRASTRUCTURE ...... 5-1 5.5 PHYSIOGRAPHY ...... 5-2 6.0 HISTORY ...... 6-1 6.1 PRIOR TO THE 1950S ...... 6-1 6.2 1972-1996: MCNELLEN RESOURCES AND MUSCOCHO EXPLORATIONS ...... 6-3 6.2.1 COMMENTS ON DRILLING AND CORE SAMPLING ...... 6-7 6.2.2 COMMENTS ON ANALYTICAL LABORATORY ...... 6-7 6.3 1996-2010 GOLDEN GOOSE ...... 6-7 6.3.1 1996 ...... 6-7 6.3.2 1997 ...... 6-7 6.3.3 1998-1999 ...... 6-10
i 1195890100-REP-R0001-01 6.3.4 2000 ...... 6-10 6.3.5 2001 ...... 6-11 6.3.6 2002 ...... 6-11 6.3.7 2004 ...... 6-12 6.3.8 2006 ...... 6-12 6.3.9 2007 ...... 6-13 6.3.10 2008 ...... 6-14 6.3.11 2009 ...... 6-15 6.3.12 2010 ...... 6-15 6.3.13 SUMMARY ...... 6-16 7.0 GEOLOGICAL SETTING AND MINERALIZATION ...... 7-1 7.1 THE ARCHEAN SUPERIOR PROVINCE ...... 7-1 7.2 THE WAWA SUBPROVINCE ...... 7-1 7.3 THE MICHIPICOTEN GREENSTONE BELT ...... 7-4 7.4 THE GEOLOGY OF THE MAGINO MINE AREA ...... 7-6 7.5 GOLD MINERALIZATION ...... 7-8 7.6 STRUCTURES ASSOCIATED WITH GOLD MINERALIZATION ...... 7-10 7.7 CURRENT VIEW ON MINERALIZATION CONTROLS AND IDENTIFICATION OF MINERALIZED MATERIAL ZONES ...... 7-11 8.0 DEPOSIT TYPES ...... 8-1 9.0 EXPLORATION ...... 9-1 9.1 GOULD GOLD PROPERTY ...... 9-1 10.0 DRILLING ...... 10-1 10.1 PRODIGY DRILLING ...... 10-1 10.1.1 TYPE AND EXTENT ...... 10-1 10.1.2 PROCEDURES FOLLOWED ...... 10-2 10.1.3 RELEVANT RESULTS ...... 10-2 10.1.4 FACTORS THAT COULD MATERIALLY IMPACT THE ACCURACY AND RELIABILITY OF THE RESULTS ...... 10-17 10.1.5 DRILL PLAN ...... 10-17 10.1.6 EXAMPLES OF DRILL SECTIONS ...... 10-18 11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 11-1 11.1 SAMPLING METHOD AND APPROACH ...... 11-1 11.2 SAMPLE PREPARATION METHODS AND QUALITY CONTROL MEASURES EMPLOYED BEFORE DISPATCH OF SAMPLES ...... 11-2 11.2.1 2009-2010 GOLDEN GOOSE PROGRAM ...... 11-2 11.2.2 2010-2011 KODIAK AND PRODIGY PROGRAM ...... 11-2 11.2.3 STATEMENT ...... 11-3 11.3 ANALYTICAL LABORATORIES ...... 11-4 11.3.1 ACCURASSAY LABORATORIES ...... 11-4 11.3.2 ALS CHEMEX ...... 11-4 11.4 SAMPLE SPLITTING AND REDUCTION ...... 11-4 11.4.1 ACCURASSAY LABORATORIES ...... 11-4
ii 1195890100-REP-R0001-01 11.4.2 ALS CHEMEX ...... 11-5 11.5 ANALYTICAL PROCEDURES ...... 11-5 11.5.1 ACCURASSAY LABORATORIES ...... 11-5 11.5.2 ALS CHEMEX ...... 11-5 11.6 QUALITY CONTROL ...... 11-6 11.6.1 2009-2010 GOLDEN GOOSE PROGRAM ...... 11-6 11.6.2 ACCURASSAY LABORATORIES ...... 11-7 11.6.3 2010 KODIAK SAMPLING PROGRAM ...... 11-7 11.7 PRODIGY QA/QC FOR 2011 ...... 11-8 11.8 SPECIFIC GRAVITY DETERMINATIONS...... 11-24 11.9 SNOWDEN’S OPINION ON THE 2011 SAMPLE PREPARATION,SECURITY AND ANALYTICAL PROCEDURES ...... 11-24 12.0 DATA VERIFICATION ...... 12-1 12.1 SITE VERIFICATION ...... 12-4 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ...... 13-1 13.1 LAKEFIELD RESEARCH –OCTOBER 1997 ...... 13-1 13.3 G&T METALLURGICAL SERVICES LTD.–SEPTEMBER 2011 ...... 13-5 13.4 STARKEY &ASSOCIATES INC.–OCTOBER 2011 ...... 13-6 14.0 MINERAL RESOURCE ESTIMATES ...... 14-1 14.1 SUMMARY ...... 14-1 14.2 DISCLOSURE ...... 14-1 14.2.1 KNOWN ISSUES THAT MATERIALLY AFFECT MINERAL RESOURCES ...... 14-2 14.3 ASSUMPTIONS,METHODS AND PARAMETERS ...... 14-5 14.3.1 DATA PROVIDED ...... 14-5 14.3.2 GEOLOGICAL INTERPRETATION AND MODELLING ...... 14-8 14.3.3 COMPOSITING OF ASSAY INTERVALS ...... 14-8 14.3.4 CONSIDERATION OF GRADE OUTLIERS AND ESTIMATION METHOD ...... 14-11 14.3.5 VARIOGRAM ANALYSIS ...... 14-12 14.3.6 ESTABLISHMENT OF BLOCK MODELS ...... 14-14 14.3.7 GRADE INTERPOLATION PARAMETERS ...... 14-14 14.3.8 DENSITY ASSIGNMENT ...... 14-15 14.3.9 PRIOR MINING ...... 14-15 14.3.10 RESOURCE CLASSIFICATION...... 14-15 14.3.11 RESOURCE REPORTING ...... 14-16 15.0 MINERAL RESERVE ESTIMATES ...... 15-1 16.0 MINING METHODS ...... 16-1 16.1 INTRODUCTION ...... 16-1 16.2 MINING METHOD ...... 16-1 16.3 MINING CRITERIA ...... 16-2 16.4 MINE PRODUCTION SCHEDULE ...... 16-4 16.5 GOLD PRODUCTION SCHEDULE ...... 16-14 16.6 HAUL ROADS ...... 16-15
iii 1195890100-REP-R0001-01 16.7 EQUIPMENT ...... 16-15 17.0 RECOVERY METHODS ...... 17-1 17.1 PROCESS DESCRIPTION ...... 17-1 18.0 INFRASTRUCTURE ...... 18-1 18.1 INTRODUCTION ...... 18-1 18.2 OFF SITE INFRASTRUCTURE ...... 18-1 18.2.1 ACCESS ROADS ...... 18-1 18.3 ON SITE INFRASTRUCTURE ...... 18-4 18.3.1 MINE HAUL ROAD AND SERVICE ROADS ...... 18-4 18.4 TAILINGS DISPOSAL ...... 18-4 18.4.1 TAILINGS STORAGE FACILITY ...... 18-4 18.5 POWER ...... 18-7 18.6 GEOCHEMICAL ...... 18-8 19.0 MARKET STUDIES AND CONTRACTS ...... 19-1 19.1 MARKET STUDIES ...... 19-1 19.2 CONTRACTS ...... 19-1 19.2.1 DETAILED ENGINEERING ...... 19-1 19.2.2 PROCUREMENT ...... 19-1 19.2.3 CONSTRUCTION MANAGEMENT ...... 19-2 20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ...... 20-1 20.1 ENVIRONMENTAL COMPONENTS ...... 20-1 20.2 ENVIRONMENTAL CONSIDERATIONS ...... 20-1 20.2.1 LEGISLATIVE FRAMEWORK ...... 20-1 20.2.2 ENVIRONMENTAL SETTING ...... 20-3 20.2.3 PUBLIC AND ABORIGINAL PEOPLES CONSULTATION AND PARTICIPATION ...... 20-6 20.2.4 CLOSURE AND RECLAMATION ...... 20-7 21.0 CAPITAL AND OPERATING COSTS ...... 21-1 21.1 BASIS OF ESTIMATE ...... 21-1 21.1.1 INTRODUCTION ...... 21-1 21.1.2 PROJECT DESCRIPTION ...... 21-1 21.1.3 ESTIMATE ...... 21-1 21.1.4 ESTIMATE APPROACH ...... 21-2 21.1.5 ESTIMATE STRUCTURE ...... 21-4 21.1.6 ELEMENTS OF COSTS ...... 21-6 21.1.7 QUALIFICATIONS AND EXCLUSIONS ...... 21-9 21.2 PROCESS EQUIPMENT CAPITAL COSTS ...... 21-10 21.3 PROCESS OPERATING COSTS ...... 21-11 21.4 TAILINGS CAPITAL COST ESTIMATE SUMMARY ...... 21-11 21.5 TAILINGS OPERATING COST ESTIMATE SUMMARY ...... 21-13 21.6 MINING EQUIPMENT CAPITAL COSTS ...... 21-14 21.7 MINING EQUIPMENT OPERATING COSTS ...... 21-16
iv 1195890100-REP-R0001-01 22.0 ECONOMIC ANALYSIS ...... 22-1 22.1 INTRODUCTION ...... 22-1 22.2 PRE-TAX MODEL ...... 22-1 22.2.1 MINE/METAL PRODUCTION IN FINANCIAL MODEL ...... 22-1 22.2.2 BASIS OF FINANCIAL EVALUATIONS ...... 22-2 22.3 SUMMARY OF FINANCIAL RESULTS...... 22-3 22.4 SENSITIVITY ANALYSIS ...... 22-4 22.5 ROYALTIES ...... 22-6 22.6 SMELTER TERMS ...... 22-6 22.7 TRANSPORTATION LOGISTICS ...... 22-6 22.7.1 INSURANCE...... 22-6 22.7.2 OWNERS REPRESENTATION ...... 22-7 22.7.3 LOSSES ...... 22-7 23.0 ADJACENT PROPERTIES ...... 23-1 24.0 OTHER RELEVANT DATA AND INFORMATION ...... 24-1 25.0 INTERPRETATION AND CONCLUSIONS ...... 25-1 25.1 MINERAL RESOURCE ...... 25-1 25.2 MINERAL RESERVES ...... 25-2 25.3 MINING ...... 25-2 25.4 ENVIRONMENTAL ...... 25-3 25.5 GEOTECHNICAL ...... 25-3 26.0 RECOMMENDATIONS ...... 26-1 26.1 GEOLOGY ...... 26-1 26.2 ENVIRONMENTAL ...... 26-2 26.3 METALLURGY ...... 26-2 26.4 MINING ...... 26-3 26.5 GEOTECHNICAL ...... 26-3 27.0 REFERENCES ...... 27-1 28.0 CERTIFICATES OF QUALIFIED PERSONS ...... 28-1
v 1195890100-REP-R0001-01 LIST OF TABLES
Table 1.1 Indicated Mineral Resource Estimate – November 2011 ...... 1-4 Table 1.2 Inferred Mineral Resource Estimate – November 2011 ...... 1-4 Table 1.3 Summary of Estimate ...... 1-6 Table 2.1 Summary of QPs ...... 2-1 Table 4.1 Description of Mining Title Types in Ontario ...... 4-3 Table 6.1 Historical Tonnages and Grades Estimated for the Magino Joint Venture Gold Project of McNellen Resources1 ...... 6-4 Table 6.2 Historical Summary...... 6-17 Table 10.1 Prodigy Drilling Details...... 10-1 Table 10.2 Prodigy Drillhole Mineralization Intersect Results ...... 10-2 Table 13.1 Lakefield Research (1997) – Gravity Separation Test Results ...... 13-2 Table 13.2 Lakefield Research (1997) – Cyanidation Results ...... 13-2 Table 13.3 Lakefield Research (1997) – Heap Leach Results...... 13-3 Table 13.4 KCA (1999) – Summary of Column Leach Tests ...... 13-4 Table 13.5 KCA (1999) – Summary of Bottle Leach Tests ...... 13-4 Table 13.6 G&T (September 2011) – Test Results ...... 13-6 Table 13.7 Starkey (October 2011) – Summary of SAGDesign Test Work Results and Calculated Parameters ...... 13-7 Table 13.8 Starkey (October 2011) – Summary of Calculated Mill Sizes and Grinding Equipment ...... 13-8 Table 14.1 Indicated Mineral Resource Estimate – November 2011 ...... 14-1 Table 14.2 Inferred Mineral Resource Estimate – November 2011 ...... 14-1 Table 14.3 Prodigy Density Data ...... 14-2 Table 14.4 Statistics for all 5 m Composites ...... 14-9 Table 14.5 Statistics for Mineralized Composites ...... 14-10 Table 14.6 Variography by Domain ...... 14-13 Table 14.7 Indicated Mineral Resource Reported for a Range of Cut-off Grades ...... 14-16 Table 14.8 Inferred Resource Reported for a Range of Cut-off Grades ...... 14-17 Table 16.1 Mine Production Schedule ...... 16-1 Table 16.2 Pit Optimization Parameters ...... 16-2 Table 16.3 Mine Production Schedule by Classification ...... 16-5 Table 16.4 Detailed Mine Production Schedule – Year 1 ...... 16-5 Table 16.5 Detailed Mine Production Schedule – Year 2 ...... 16-6 Table 16.6 Detailed Mine Production Schedule – Year 3 ...... 16-6 Table 16.7 Detailed Mine Production Schedule – Year 4 ...... 16-7 Table 16.8 Detailed Mine Production Schedule – Year 5 ...... 16-7 Table 16.9 Detailed Mine Production Schedule – Year 6 ...... 16-8 Table 16.10 Detailed Mine Production Schedule – Year 7 ...... 16-9 Table 16.11 Detailed Mine Production Schedule – Year 8 ...... 16-10 Table 16.12 Detailed Mine Production Schedule – Year 9 ...... 16-11 Table 16.13 Detailed Mine Production Schedule – Year 10 ...... 16-12 Table 16.14 Detailed Mine Production Schedule – Year 11 ...... 16-13 Table 16.15 Gold Production Schedule ...... 16-14 Table 16.16 Gold Production Schedule by Classification ...... 16-14 Table 16.17 Equipment List ...... 16-15 Table 17.1 Process Design Criteria ...... 17-4 Table 17.2 Major Equipment List ...... 17-5
vi 1195890100-REP-R0001-01 Table 18.1 Summary of Tailings Storage Facility ...... 18-5 Table 20.1 Preliminary List of Provincial Authorizations, Licences and Permits ...... 20-2 Table 20.2 Preliminary List of Federal Authorizations, Licences, and Permits ...... 20-3 Table 21.1 Summary of Estimate ...... 21-1 Table 21.2 Exchange Rates ...... 21-2 Table 21.3 WBS Facility – Area & Sub-area Numbers ...... 21-4 Table 21.4 Major Process Equipment List ...... 21-10 Table 21.5 Process Operating Costs ...... 21-11 Table 21.6 Estimated Capital Costs for TSF ...... 21-12 Table 21.7 Estimated Operating Costs for TSF ...... 21-13 Table 21.8 Mining Equipment List ...... 21-14 Table 21.9 Mining Fleet by Year ...... 21-15 Table 21.10 Mining Capital and Sustaining Costs by Year ('000) ...... 21-16 Table 21.11 Mining Operating Costs ...... 21-17 Table 22.1 Metal Production from the Magino Project ...... 22-2 Table 22.2 Summary of Pre-tax Financial Results (all figures are in Cdn$) ...... 22-4
LIST OF FIGURES
Figure 4.1 Location Map of the Magino Property in Ontario ...... 4-2 Figure 4.2 Claim Map of the Magino Property ...... 4-4 Figure 5.1 Topography and Accessibility of the Magino Property ...... 5-3 Figure 7.1 Tectonic Subdivisions of the Superior Province within Northern Ontario ...... 7-2 Figure 7.2 Major Geological Elements of the Eastern Wawa Subprovince ...... 7-3 Figure 7.3 Mineral Belts in the Michipicoten-Shebandowan Region of the Wawa Subprovince ...... 7-4 Figure 7.4 Geology of the Magino Mine Area ...... 7-7 Figure 7.5 Historical G Zone in the 24+75E Drift ...... 7-9 Figure 7.6 Gold Bearing Veins on the Face of the 23+80E Drift ...... 7-10 Figure 8.1 Schematic Diagram Illustrating the Inferred Crustal Levels of Gold Deposition ...... 8-1 Figure 8.2 Schematic Diagram Illustrating the Setting of Greenstone-Hosted Quartz Carbonate Vein Deposits ...... 8-2 Figure 8.3 Location of the Goudreau Lake Deformation Zone ...... 8-3 Figure 10.1 Plan View of Prodigy Drillhole Locations ...... 10-18 Figure 10.2 Drill Cross Section 300SW ...... 10-19 Figure 10.3 Drill Cross Section 1375SW ...... 10-20 Figure 10.4 Drill Cross Section 1180SW ...... 10-21 Figure 11.1 Gold Assays for Coarse Blank Inserted by Prodigy ...... 11-9 Figure 11.2 Gold Assays for Standard CDN-BL-7 ...... 11-10 Figure 11.3 Gold Assays for Standard CDN-GS-1F ...... 11-11 Figure 11.4 Gold Assays for Standard CDN-GS-2E ...... 11-12 Figure 11.5 Gold Assays for Standard CDN-GS-30B ...... 11-13 Figure 11.6 Gold Assays for Standard CDN-GS-2G ...... 11-14 Figure 11.7 Gold Assays for Standard CDN-GS-1G ...... 11-15 Figure 11.8 Gold Assays for Standard CDN-GS-1P5C ...... 11-16 Figure 11.9 Gold Assays for Standard CDN-GS-2E ...... 11-17
vii 1195890100-REP-R0001-01 Figure 11.10 Gold Assays for Standard CDN-GS-2G ...... 11-18 Figure 11.11 Gold Assays for Standard CDN-GS-3G ...... 11-19 Figure 11.12 Gold Assays for Standard CDN-GS-4B ...... 11-20 Figure 11.13 Gold Assays for Standard CDN-GS-7B ...... 11-21 Figure 11.14 Gold Assays for Standard CDN-GS-P2 ...... 11-22 Figure 11.15 Gold Assays for Standard CDN-GS-P4A ...... 11-23 Figure 13.1 G&T (September 2011) – Test Flowsheet ...... 13-5 Figure 14.1 Comparison of Declustered Composites – Surface Drilling Versus Underground Drilling Less Than 50 m Total Length ...... 14-3 Figure 14.2 Comparison of Declustered Composites – Surface Drilling Versus Underground Drilling Greater Than 50 m Total Length ...... 14-4 Figure 14.3 Distribution of Underground Drillholes...... 14-7 Figure 14.4 Distribution of Surface Drillholes ...... 14-8 Figure 14.5 Log Histogram of all 5 m Composites ...... 14-10 Figure 14.6 Log Histogram of 5 m Gold Composites for Mineralized Zones ...... 14-11 Figure 14.7 Log Probability Plot Indicating Mixed Populations ...... 14-12 Figure 17.1 Overall Magino Block Flow Diagram ...... 17-2 Figure 18.1 Road and Railway Network Associated with the Magino Property ...... 18-3 Figure 18.2 TSF Preliminary Site Plan ...... 18-6 Figure 22.1 Undiscounted Annual and Cumulative Net Cash Flow ...... 22-3 Figure 22.2 NPV Sensitivity Analysis ...... 22-5 Figure 22.3 IRR Sensitivity Analysis ...... 22-5 Figure 22.4 Payback Period Sensitivity Analysis ...... 22-6
GLOSSARY
UNITS OF MEASURE Above mean sea level ...... amsl Acre ...... ac Ampere ...... A Annum (year) ...... a Billion ...... B Billion tonnes ...... Bt Billion years ago ...... Ga British thermal unit ...... BTU Centimetre ...... cm Cubic centimetre ...... cm3 Cubic feet per minute ...... cfm Cubic feet per second ...... ft3/s Cubic foot ...... ft3 Cubic inch ...... in3 Cubic metre ...... m3 Cubic yard ...... yd3 Coefficients of Variation ...... CVs
viii 1195890100-REP-R0001-01 Day ...... d Days per week ...... d/wk Days per year (annum) ...... d/a Dead weight tonnes ...... DWT Decibel adjusted ...... dBa Decibel ...... dB Degree ...... ° Degrees Celsius ...... °C Diameter ...... ø Dollar (American) ...... US$ Dollar (Canadian) ...... Cdn$ Dry metric ton ...... dmt Foot ...... ft Gallon ...... gal Gallons per minute (US)...... gpm Gigajoule ...... GJ Gigapascal ...... GPa Gigawatt ...... GW Gram ...... g Grams per litre ...... g/L Grams per tonne ...... g/t Greater than ...... > Hectare (10,000 m2) ...... ha Hertz ...... Hz Horsepower ...... hp Hour ...... h Hours per day ...... h/d Hours per week ...... h/wk Hours per year ...... h/a Inch ...... " Kilo (thousand) ...... k Kilogram ...... kg Kilograms per cubic metre ...... kg/m3 Kilograms per hour ...... kg/h Kilograms per square metre ...... kg/m2 Kilometre ...... km Kilometres per hour ...... km/h Kilopascal ...... kPa Kilotonne ...... kt Kilovolt ...... kV Kilovolt-ampere ...... kVA Kilovolts...... kV Kilowatt ...... kW Kilowatt hour ...... kWh Kilowatt hours per tonne (metric ton) ...... kWh/t Kilowatt hours per year ...... kWh/a
ix 1195890100-REP-R0001-01 Less than ...... < Litre ...... L Litres per minute ...... L/m Megabytes per second ...... Mb/s Megapascal ...... MPa Megavolt-ampere ...... MVA Megawatt ...... MW Metre ...... m Metres above sea level ...... masl Metres Baltic sea level ...... mbsl Metres per minute ...... m/min Metres per second ...... m/s Metric ton (tonne) ...... t Microns ...... µm Milligram ...... mg Milligrams per litre ...... mg/L Millilitre ...... mL Millimetre ...... mm Million ...... M Million bank cubic metres ...... Mbm3 Million bank cubic metres per annum ...... Mbm3/a Million tonnes ...... Mt Minute (plane angle) ...... ' Minute (time) ...... min Month ...... mo Ounce ...... oz Pascal ...... Pa Centipoise ...... mPa·s Parts per million ...... ppm Parts per billion ...... ppb Percent...... % Pound(s) ...... lb Pounds per square inch ...... psi Revolutions per minute ...... rpm Second (plane angle) ...... " Second (time) ...... s Specific gravity ...... SG Square centimetre ...... cm2 Square foot ...... ft2 Square inch ...... in2 Square kilometre ...... km2 Square metre ...... m2 Thousand tonnes ...... kt Three Dimensional ...... 3D Three Dimensional Model ...... 3DM Ton (2,000 lb) ...... ton
x 1195890100-REP-R0001-01 Tonne (1,000 kg) ...... t Tonnes per day ...... t/d Tonnes per hour ...... t/h Tonnes per year ...... t/a Tonnes seconds per hour metre cubed ...... ts/hm3 Volt ...... V Week ...... wk Weight/weight ...... w/w Wet metric ton ...... wmt Year (annum) ...... a
ABBREVIATIONS AND ACRONYMS Acid rock drainage ...... ARD Algoma Power Inc...... API AMEC Earth & Environmental ...... AMEC Annual Information Form ...... AIF Atomic absorption spectroscopy ...... AAS Atomic absorption ...... AA BLM Bharti Engineering Ltd...... BLM Bharti Bond Ball Mill Work Index ...... BWI Calcium oxide ...... CaO Canadian Environmental Assessment Act ...... CEAA Canadian Institute of Mining, Metallurgy and Petroleum ...... CIM Carbon-in-leach ...... CIL Carbon-in-pulp ...... CIP Cavendish Investing Ltd...... Cavendish Certified reference materials ...... CRMs Diamond drillholes ...... DDHs Digital global positioning system ...... DGPS EBA, A Tetra Tech Company ...... EBA Engineering and procurement ...... EP Engineering, procurement and construction management...... EPCM Environmental assessment...... EA Fire assay ...... FA Front-end loaders ...... FELs G&T Metallurgical Services Ltd...... G&T General and administrative ...... G&A Global positioning system ...... GPS Gold ...... Au Golden Goose Resources Incorporated...... Golden Goose Golder Associates Ltd...... Golder Harmonized sales tax ...... HST In-pit crushing and conveying ...... IPCC Internal rate of return ...... IRR International Organization for Standardization ...... ISO
xi 1195890100-REP-R0001-01 International System of Units ...... SI Kappes, Cassiday & Associates ...... KCA Kodiak Exploration Limited ...... Kodiak Laboratory Information Management System ...... LIMS Lerchs-Grossman ...... LG Life of mine ...... LOM McNellen Resources Inc...... McNellen Resources Memorandum of Understanding ...... MOU Ministry of Northern Development and Mines ...... MNDM Ministry of Northern Development, Mines and Forestry ...... MNDMF Muscocho Explorations Ltd...... Muscocho Explorations Mutual Disclosure Agreement ...... MDA National Instrument 43-101 ...... NI 43-101 National Topography System ...... NTS Net present value ...... NPV Net smelter return ...... NSR Notice of Project Status ...... NOPS Ontario Ministry of Natural Resources ...... MNR Ordinary kriging ...... OK Pearson, Hofman and Associates Ltd...... PHA Permit to take water ...... PTTW Preliminary Economic Assessment ...... PEA Prodigy Gold Incorporated ...... Prodigy Qualified persons ...... QPs Quality assurance/quality control ...... QA/QC Quality control ...... QC Reddick Consulting Inc...... Reddick Reduced level ...... RL Rock quality designation ...... RQD Run-of-mine ...... ROM Semi-autogenous grinding ...... SAG Silver ...... Ag Snowden Mining Industry Consultants Inc...... Snowden Sodium cyanide ...... NaCN Specific gravity ...... SG Standards Council of Canada ...... SCC Starkey & Associates Inc...... Starkey Swastika Laboratories Ltd...... Swastika Laboratories Tailings storage facility ...... TSF the Magino Project ...... the Project Toronto Stock Exchange Venture ...... TSXV Troy ounces ...... tr. oz Universal Transverse Mercator ...... UTM Visible Gold ...... VG Wardrop, a Tetra Tech Company ...... Tetra Tech
xii 1195890100-REP-R0001-01 1.0 SUMMARY
1.1 INTRODUCTION
Prodigy Gold Incorporated (Prodigy), commissioned Wardrop, a Tetra Tech Company (Tetra Tech) to produce a National Instrument 43-101 (NI 43-101) Preliminary Economic Assessment (PEA) and Technical Report on the Magino Project (the Project), located approximately 40 km northeast of the town of Wawa, Ontario, Canada. The purpose of this PEA is to provide an update to the February 2011 resource estimate, and to supersede the PEA produced in April 2011.
In September 2011, Snowden Mining Industry Consultants Inc. (Snowden) was requested by Prodigy to complete an updated mineral resource estimate for the Project in compliance with NI 43-101 and Form 43-101F1. Prodigy was formed in January 2011 by the unification of Kodiak Exploration Limited (Kodiak) and Golden Goose Resources Incorporated (Golden Goose).
Land Manager Mr. Randy Sedore confirmed that the issuer’s wholly-owned (i.e., 100% Registered Ownership) land holdings forming the Magino property comprise seven patented mining claims (mining and surface rights), four leased mining claims, and 66 unpatented mining claims with a combined area of 5,131.180 ac (2,076.515 ha). Additionally, on February 9, 2011 Prodigy announced that it had signed an option agreement with MPH Resources Corp. (MPH Resources) that allows Prodigy to earn up to a 100% interest in the 128 ha Gould Gold property located adjacent to the Magino property.
1.2 PROPERTY L OCATION AND D ESCRIPTION
The Magino property is approximately 40 km northeast of the town of Wawa, Ontario, Canada, in Finan Township, which falls within the Sault Ste. Marie mining district of Ontario. The Project is approximately 14 km southeast of the town of Dubreuilville; the Project consists of an underground mine that was active between 1988 and 1992, and processed 768,678 t at a recovered grade of 0.137 troy ounce per tonne (tr. oz/t) gold (Au) to produce 105,543 troy ounces (tr. oz) of gold. Since the closure of the underground mine, Golden Goose, a wholly owned subsidiary of Prodigy, conducted several studies that evaluated the feasibility of re-commencing underground operations and/or commencing open pit operations.
Prodigy Gold Incorporated 1-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 1.3 GEOLOGY AND M INERALIZATION
The Magino property is located within the Michipicoten greenstone belt of the Archean Superior Province. The Michipicoten greenstone belt is a structurally and stratigraphically complex assemblage of volcanic, sedimentary and intrusive rocks that were metamorphosed to greenschist and amphibolites facies. Several suites of plutonic rocks ranging in composition from gabbro to monzogranite and syenite occur in and around the Michipicoten greenstone belt. The Magino property is situated in the Goudreau-Lochalsh gold district of the Wawa gold camp. Supracrustal rocks in the Goudreau-Lochalsh district consist of Cycle 2 felsic to intermediate pyroclastic metavolcanics capped by pyrite-bearing ironstone. To the north are pillowed, massive and schistose, mafic to intermediate metavolcanics and minor intercalations of Cycle 3 mafic pyroclastic rock. Several medium- to coarse-grained quartz dioritic to dioritic sills and/or dikes intrude all metavolcanic rocks.
Gold mineralization at the former Magino mine is dominantly hosted by the Webb Lake stock, which intrudes Cycle 3 mafic volcanic rocks. The Webb Lake stock is a felsic intrusion interpreted as a trondhjemite, but continues to be called a granodiorite in mine terminology. The long axis of the Webb Lake stock is parallel to the regional supracrustal rock stratigraphy. The Webb Lake stock is ENE-striking and has a steep northerly dip. The granodiorite (trondhjemite) contains 5 to 10% veins of carbonate, quartz, tourmaline and pyrite in various orientations.
Prodigy is currently focusing its evaluation on zones of low-grade, gold-bearing quartz-sericite-pyrite mineralization that include narrow higher-grade gold-bearing veins, the target of former underground mining. Prodigy commenced a surface drilling program in early 2011 to in-fill and replace earlier sample data. The database used for the current study update (this report) includes this recent drilling information.
1.4 MINERAL R ESOURCE E STIMATE
The region of interest covers 1,350 m of the 075° trending Webb Lake granodiorite stock and the alteration zones that aggregate up to 300 m width, and dip steeply to depths of up to 600 m. At Magino the Webb Lake stock is covered by up to 30 m thickness of fluvio-glacial material. The felsic and mafic volcanic country rock surrounding the stock does contain examples of low grade mineralization encountered by drilling, however the main focus remains the broad low-grade alteration zones within the stock. A late-stage diabase dyke transects the stock.
The database provided to Snowden by Prodigy on September 16, 2011 contains 512 surface diamond drillholes (DDHs) (for a total of 103,491 m; average length 202 m) and 980 underground DDHs (for a total of 60,345 m; average length 62 m).
Ninety-four surface drillholes were completed in the period from 1997 to 2009 and comprise HQ and NQ diameter core. All underground drillholes were completed in the period 1986 to 1991 and are dominated by AQ diameter core with some BQ
Prodigy Gold Incorporated 1-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada diameter core clearly clustered around the underground workings and, in some cases subsequently stoped out. Since the sample volumes of the underground drill cores are markedly less than the surface drill cores, and because of potential bias contained within some samples, Snowden elected to use only the assays from the surface drillholes and those underground drill holes relatively unbiased for the grade estimates. The underground DDHs retained for the resource estimates comprised 484 drillholes for a total of 48,896 m, average length 100 m. Assay information from all of the underground drill cores however was used to develop the geological interpretation of the mineralized bodies.
A Vulcan block model with cell dimensions of 10 m (X), 10 m (Y) and 5 m (Z) was coded to reflect the surface topography, base of overburden, Webb Lake granodiorite contacts, domain solids, and the late stage diabase dyke. A 3D wireframe model of the underground development and stopes was stored as percent volumes in the block model to ensure that the reported mineral resource estimates are depleted for prior mining. The Prodigy geologists have interpreted 17 structural domains to identify the zones of mineralization in the drill cores.
Gold grades were estimated from 5 m length-weighted uncut composites into the interpreted mineralized blocks by ordinary kriging (OK), using parameters established from analysis of domain variography. The impact of clustered high gold grades was controlled by using a combination of “sample per hole” restrictions, octant search and maximum distance extrapolation restrictions for grades above 22 g/t Au. Minimum/maximum numbers of composites used for estimation were set to 3/14 per block. Discretization was set to 2 x 2 x 1.
Density factors of 2.72 (specific gravity (SG)) were assigned to granodiorite and mafic to felsic country rock based on approximately 2,300 new SG determinations of core specimens by Prodigy.
A conceptual pit shell was developed by Snowden using Whittle software in order to identify those parts of the block model that have reasonable prospects for eventual economic extraction. Parameters used were: 52° (overall pit slope); Cdn$1.25/t mining cost; Cdn$1,500/oz gold price; 95% process recovery; Cdn$7/t process cost. Mineralized blocks that lie within the conceptual pit shell have been classified as either Indicated or Inferred Mineral Resource estimates. Blocks lying outside the conceptual pit were left unclassified and have not been reported. Geostatistical parameters from the kriging system were used to identify regions of better confidence estimates.
Snowden has applied an Inferred classification to blocks in the mineral resource that lie within low confidence regions and below 150 m and within the limit of the conceptual pit shell.
Above a depth from surface of 150 m, resource blocks that lie within greater confidence regions have been classified as Indicated resource blocks. Snowden has not classified any Measured blocks after considering the uncertainty in geological
Prodigy Gold Incorporated 1-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada interpretation and extent of the underground workings, the high nugget environment, short ranges of gold grade continuity, use of assigned densities and the current drill spacing. Snowden notes that Prodigy has an ongoing drill program to in-fill the existing drill pattern.
Mineral resource estimates for the Magino property are reported in categories of Indicated and Inferred, in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (CIM Code), as follows:
Table 1.1 Indicated Mineral Resource Estimate – November 2011
Reporting Cut-off Grade Tonnes Grade Gold Gold Category CIM Code (g/t Au) Density (‘000) (g/t Au) ('000 g) ('000 oz) Indicated 0.35 2.72 67,555 1.00 67,690.5 2,176.3
Table 1.2 Inferred Mineral Resource Estimate – November 2011
Reporting Cut-off Grade Tonnes Grade Gold Gold Category CIM Code (g/t Au) Density (‘000) (g/t Au) ('000 g) ('000 oz) Inferred 0.35 2.72 54,242 0.99 53,537.3 1,721.2
In the above mineral resource tables there may be inconsistencies due to rounding. Estimates are rounded since the figures are not precise calculations.
There are no Mineral Reserves reported in this technical report. 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.
1.5 MINING
A block model of the Magino Mineral Resource was provided by Snowden. For the purposes of determining if mining the Mineral Resource is viable, all Indicated and Inferred Resources are considered consistent enough to be mineable.
After mining criteria are applied, 74.2 Mt of mill feed grading 1.15 g/t remain. Using an open pit mining method with front-end loaders (FELs) and off-highway dump trucks, a mine life of just over 10 years was developed with mine production rates of 7.3 Mt/a, 20,000 t/d, of mill feed and 15.3 Mt/a, 42,000 t/d, waste. For the life of mine (LOM), 2,751,000 tr. oz of gold are produced. The mine will operate 24 h/d, 365 d/a.
Prodigy Gold Incorporated 1-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 1.6 METALLURGY
Two historical metallurgical test reports are available from the Lakefield Research work from 1997 and the Kappes, Cassiday & Associates (KCA) work from 1999.
The Lakefield Research work (1997) was part of a pre-feasibility study prepared by BLM Bharti Engineering Ltd. (BLM Bharti) for Golden Goose for a 2.6 Mt/a open pit mine and leach plant. The Lakefield Research work encompasses gravity separation, cyanidation, and heap leach test work on drill core and bulk samples which were taken by BLM Bharti as representative samples for the future operation. Bottle roll tests indicated that after a 48 h leach, 95% of the gold can be leached with cyanide at a grind of 80% passing 74 µm. The Bond Ball Mill Work Index (BWI) for the samples provided was an average of 12.7 kWh/t.
The KCA study (1999) utilized drill core samples selected by Golden Goose for heap leach and cyanidation test work. This work further illustrated that this ore was better suited for cyanidation as opposed to heap leach. At a crushed size of 9.5 mm, the gold recovery averaged approximately 49.5% for the Mafic Volcanics and 56% for the Granodiorite samples. At a grind of 150 µm and leaching for 48 h, the average cyanidation gold recovery was 95%.
More recent test work was completed by G&T Metallurgical Services Ltd. (G&T) and Starkey & Associates Inc. (Starkey) in the fall of 2011.
The G&T work (September 2011) used drill core samples selected by Prodigy as variability samples. They were subjected to gravity separation and the tail from gravity separation was subjected to cyanidation. The overall gold recovery of a grind of 80% passing 75 µm from gravity separation and 48 h cyanidation was 92%. This represents an average 33% gold recovery by gravity separation.
The Starkey test work used four samples of drill core to determine if the samples were amenable to semi-autogenous grinding (SAG). The test work determined a
WSAG = 11.50 kWh/t (hard ore for SAG) and BWI = 15.91 kWh/t (moderate to hard ore for Ball Mill). The work also sized a SAG mill which is 10.363 m (34 ft) in diameter and 5.004 m (16.4 ft) equivalent grinding length. This will require an 11,600 kW twin pinion variable speed synchronous motor (5,800 kW per pinion). Two 6.096 m diameter (20 ft) ball mills which are 8.731 m (27.5 ft) long will also be required driven by two 5,700 kW single pinion fixed speed motors.
Based on the previous and recent test work programs, for this study a throughput of 20,000 t/d will be fed to a SAG, ball mill, and hydrocyclone circuit. The hydrocyclone overflow will then be subjected to a conventional cyanide leach, carbon-in-pulp (CIP) circuit, with elution of the carbon, electrowinning of the pregnant solution, and smelting/refining of the gold. The assumed head grade is 1.10 g/t and the assumed gold recovery by cyanidation is 92%.
Prodigy Gold Incorporated 1-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 1.7 ENVIRONMENTAL
Baseline studies for various environmental disciplines were initiated in the fall of 2011 and are in the preliminary stages of data collection, which will continue into 2012. The primary assumption for this PEA report is that the mine design as currently proposed is acceptable and can be permitted under both provincial and federal Acts and Regulations.
1.8 INFRASTRUCTURE
Based on the resource estimate report a conceptual open pit mine and a CIP process plant (mill) design with tailings storage facility (TSF) has been completed. The construction of the process plant with an office/maintenance/warehouse complex will be built in a period of 18 to 24 mo before the start of operation. Mining of the open pit will be started a year ahead of operation to provide waste to build the tailings dams.
The tailings dam will be built in stages. The starter dam will be built for the TSF to hold the first two years of tailings and the dam will be raised annually from Year 2 to Year 7 of operation.
Sections of the off-site power line will be upgraded by Algoma Power Inc. (API), the local power supplier.
1.9 CAPITAL AND O PERATING C OSTS
Table 1.3 summarizes the estimate for the Project. All costs in this report are shown in Canadian dollars unless otherwise stated.
Table 1.3 Summary of Estimate
Construction Process Major Labour Materials Equipment Equipment Total Area Area ($) ($) ($) ($) ($) Direct Works 10 Overall Site 1,167,410 20,545,150 424,222 525,250 22,662,032 20 Open Pit Mining 205,275 8,062,559 126,750 - 8,394,584 30 Ore Handling 3,787,452 3,105,861 205,361 7,179,945 14,278,619 40 Process 55,122,480 60,302,614 3,517,895 41,900,729 160,843,718 50 Tailings and Water 3,583,687 2,070,000 4,554,000 - 10,207,687 Management 70 On-site Infrastructure 11,816,673 15,266,024 6,680,386 3,980,980 37,744,063 Direct Works Subtotal 75,682,977 109,352,208 15,508,614 53,586,904 254,130,703 table continues…
Prodigy Gold Incorporated 1-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Construction Process Major Labour Materials Equipment Equipment Total Area Area ($) ($) ($) ($) ($) Indirect Works 91 Indirects 4,968,000 65,252,705 - - 70,220,705 98 Owner’s Costs - 11,435,882 - - 11,435,882 99 Contingency - 69,790,594 - - 69,790,594 Indirect Works Subtotal 4,968,000 146,479,181 - - 151,447,181 Total 80,650,977 255,831,389 15,508,614 53,586,904 405,577,884
1.10 ECONOMIC A NALYSIS
Tetra Tech prepared an economic evaluation of the Project’s updated PEA based on a pre-tax financial model.
Tetra Tech’s long-term consensus metal prices and exchange rate (as of October 27, 2011) used in the base case were as follows:
gold: US$1,200.00/oz exchange rate: $1.00:$0.93 (Cdn$:US$).
The pre-tax financial results were as follows:
36.4% internal rate of return (IRR) 1.9 year payback Cdn$939 million net present value (NPV) at 5% discount rate and Cdn$709 million at 8% discount rate.
Sensitivity analyses were conducted to analyze the sensitivity of the project merit measures (NPV, IRR and payback periods) to the main inputs.
1.11 CONCLUSION
The results of the financial analysis indicate that there is potential to develop the Magino property to a profitable 20,000 t/d open pit gold mine. This PEA is based on a combination of Indicated and Inferred Resources, and some of the information will have to be updated. More exploration and metallurgical test work will have to be completed to confirm the potential of this property.
Prodigy Gold Incorporated 1-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 2.0 INTRODUCTION
Tetra Tech, in collaboration with Snowden and EBA, A Tetra Tech Company (EBA), prepared this technical report on the Magino property in general accordance with the guidelines provided in NI 43-101 Standards of Disclosure for Mineral Projects.
A summary of qualified persons (QPs) responsible for each section of this report is provided in Table 2.1.
Table 2.1 Summary of QPs
Report Section Company QP 1.0 Summary All Sign off by Section 2.0 Introduction Tetra Tech Les Corradine, P.Eng. 3.0 Reliance on Other Experts Tetra Tech Les Corradine, P.Eng. 4.0 Property Description and Location Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 5.0 Accessibility, Climate, Local Resources, Snowden Andrew Ross, MSc., P.Geo., Infrastructure and Physiography CP, FAusIMM 6.0 History Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 7.0 Geological Setting and Mineralization Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 8.0 Deposit Types Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 9.0 Exploration Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 10.0 Drilling Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 11.0 Sample Preparation, Analyses, and Security Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 12.0 Data Verification Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 13.0 Mineral Processing and Metallurgical Testing Tetra Tech Todd Kanhai, P.Eng. 14.0 Mineral Resource Estimates Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 15.0 Mineral Reserve Estimates Tetra Tech Cris Wright, P.E. 16.0 Mining Methods Tetra Tech Cris Wright, P.E. 17.0 Recovery Methods Tetra Tech Todd Kanhai, P.Eng. table continues…
Prodigy Gold Incorporated 2-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Report Section Company QP 18.0 Infrastructure 18.1 Introduction Tetra Tech Les Corradine, P.Eng. 18.2 Off Site Infrastructure Tetra Tech Les Corradine, P.Eng. 18.2.1 Access Roads EBA Graham Wilkins, P.Eng. 18.3 On Site Infrastructure EBA Graham Wilkins, P.Eng. 18.4 Tailings Disposal EBA Scott Martin, P.Eng. 18.5 Power Tetra Tech Les Corradine, P.Eng. 18.6 Geochemical Tetra Tech Scott Martin, P.Eng. 19.0 Market Studies and Contracts Tetra Tech Les Corradine, P.Eng. 20.0 Environmental Studies, Permitting and Tetra Tech Les Corradine, P.Eng. Social or Community Impact 21.0 Capital and Operating Costs 21.1 Basis of Estimate Tetra Tech Hassan Ghaffari, P.Eng. 21.2 Process Equipment Capital Costs Tetra Tech Todd Kanhai, P.Eng. 21.3 Process Operating Costs Tetra Tech Todd Kanhai, P.Eng. 21.4 Tailings Capital Cost Estimate Tetra Tech Hassan Ghaffari, P.Eng. Summary 21.5 Tailings Operating Cost Estimate Tetra Tech Hassan Ghaffari, P.Eng. Summary 21.6 Mining Equipment Capital Costs Tetra Tech Cris Wright, P.E. 21.7 Mining Equipment Operating Costs Tetra Tech Cris Wright, P.E. 22.0 Economic Analysis Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng. 23.0 Adjacent Properties Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 24.0 Other Relevant Data and Information Snowden Andrew Ross, MSc., P.Geo., CP, FAusIMM 25.0 Interpretations and Conclusions All Sign off by Section 26.0 Recommendations All Sign off by Section 27.0 References All Sign off by Section
Prodigy Gold Incorporated 2-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 3.0 RELIANCE ON OTHER EXPERTS
Tetra Tech followed standard professional procedures in preparing the contents of this report. Data used in this report has been verified where possible and Tetra Tech has no reason to believe that the data was not collected in a professional manner.
Technical data provided by Prodigy for use by Tetra Tech in this technical report is the result of work conducted, supervised, and/or verified by Prodigy professional staff or their consultants.
Tetra Tech has not independently verified the legal status or title of the claims or exploration permits, and has not investigated the legality of any of the underlying agreement(s) that may exist concerning the property.
The QPs who prepared this report relied on information provided by the following experts who are not QPs:
Mr. Randy Sedore, of Golden Goose, for matters relating to mineral titles held by Prodigy’s subsidiary, Golden Goose in Section 4.0.
Ms. Tania Perzoff, of EBA, for matters relating to environmental studies, permitting and social or community impact in Sections 1.0, 20.0 and 25.0 to 27.0.
Prodigy Gold Incorporated 3-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
The Magino property is approximately 40 km northeast of the town of Wawa, Ontario, on the National Topography System (NTS) map sheet 42C/08 (see Figure 4.1). The project is located in Finan Township, which falls within the Sault Ste. Marie mining district of Ontario. The Magino mine is approximately 14 km southeast of the town of Dubreuilville. The approximate Universal Transverse Mercator (UTM) coordinates for the geographic centre of the property are 685900E, 5351800N (Zone 16, NAD 83). The approximate position of the Magino mine is 689000E, 5351000N.
Prodigy Gold Incorporated 4-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 4.1 Location Map of the Magino Property in Ontario
4.2 STATUS OF M INING T ITLES
Mr. Randy Sedore acts as the Land Manager for Golden Goose (a subsidiary of the issuer) with regards to the exploration and mining lands that form the Magino property (see Figure 4.2). He confirmed on December 15, 2011 that the issuer’s wholly owned (i.e., 100% Registered Ownership) land holdings forming the Magino property comprise seven patented mining claims (mining and surface rights), four leased mining claims, and 66 unpatented mining claims with a combined area of 5,131,18 ac (2,076.515 ha).
Prodigy Gold Incorporated 4-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada The four leased mining claims are contiguous and consist of seven mining titles (SSM 581948 to 581953 and SSM 722481) (see Table 4.1). Golden Goose owns the mining and surface rights on these leased mining claims, except mining title SSM 722481 for which Golden Goose owns only the mining rights.
The mineralized area hosting the underground workings is located just north of Webb Lake near the southeastern corner of the property (see Figure 4.2).
Table 4.1 Description of Mining Title Types in Ontario
Mining Titles Associated Rights Unpatented Mining Claims Exploration for mineral substances Right to subsurface only Work required for renewal of right Leased Mining Claims 20-year period No obligation or work required Payment of annual fee Surface rights limited to mining activities Patented Mining Claims For life No obligation or work required Payment of annual fee Surface rights limited to mining activities Reference: Turcotte, B., and Pelletier, C., May 2009
Prodigy Gold Incorporated 4-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 4.2 Claim Map of the Magino Property
Prodigy Gold Incorporated 4-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada On November 1, 1985, an agreement was reached between Cavendish Investing Ltd. (Cavendish) and Muscocho Explorations Ltd. (Muscocho Explorations). At the time, Cavendish and McNellen Resources Inc. (McNellen Resources), formerly Rico Copper (1966) Inc., each owned a 50% interest in the Magino property.
The agreement stipulated that Muscocho Explorations would purchase all of Cavendish’s right, title and interest in and to the joint venture with McNellen, and that Cavendish would retain a 10% royalty of Muscocho Explorations’ share of net profits derived from its participation in the joint venture. The agreement further stipulated that if Muscocho Explorations assigns any or all part of its interest in the joint venture to another party or parties, it will cause the assignee(s) of such interest to enter into an agreement with Cavendish under which such assignee(s) will assume all of Muscocho Explorations’ obligations under the terms of the agreement, including the payment of said royalty to Cavendish.
Net profits for the purposes of the above paragraph shall mean the monies received by Muscocho Explorations from its interest in the joint venture after Cavendish has paid Muscocho Explorations for all its costs incidental to the joint venture incurred before and after the closing date of the agreement.
In 1996, three companies – Muscocho Explorations, McNellen Resources and Flanagan McAdam Resources Inc. – combined to form Golden Goose, which emerged with a 100% interest in the Magino property. Golden Goose thus became an assignee of Muscocho Explorations’ obligation to pay Cavendish a 10% royalty for its share of the net profits, after reimbursement of all costs incurred by Muscocho Explorations since November 1985. Prodigy cannot reasonably estimate the likelihood of a royalty being paid, nor the amount.
On August 31, 2010, Kodiak and Golden Goose announced a definitive merger agreement and plan of arrangement dated August 30, 2010, whereby Kodiak would acquire all of the issued and outstanding shares of Golden Goose. The arrangement effectively combined the assets of both companies on a consolidated basis, with Golden Goose becoming a wholly-owned subsidiary of Kodiak.
On January 4, 2011, Prodigy announced that it was the named unification of Kodiak and Golden Goose.
On February 9, 2011, Prodigy announced that it had signed an option agreement with MPH Resources allowing Prodigy to earn up to a 100% interest in the 128 ha Gould gold property, adjacent to the Magino property. The option property is identified as numbers 4218037 and 4218038 in Figure 4.2.
Prodigy has advised that the terms of the option agreement, subject to the Toronto Stock Exchange Venture (TSXV) approval, are as follows:
Prodigy will pay MPH Resources $10,000 and issue to MPH Resources 50,000 common shares of Prodigy following acceptance by the TSXV of this transaction.
Prodigy Gold Incorporated 4-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Prodigy can earn a 60% interest in the property within two years of TSXV approval by paying MPH Resources an additional $35,000, issuing MPH Resources an additional 150,000 shares and incurring expenditures of $250,000. Prodigy can earn a 100% interest in the property within three years of TSXV approval by paying MPH Resources an additional $25,000 ($70,000 in aggregate), issuing MPH Resources an additional 200,000 Shares (400,000 shares in aggregate), incurring additional expenditures of $500,000 ($750,000 in aggregate) and granting MPH Resources a net smelter return (NSR) royalty of 1%, which may be repurchased for $1,000,000. The property is subject to an additional 2% NSR royalty held by prior owners, half of which may be acquired for $1,000,000.
4.3 ENVIRONMENTAL M ATTERS
Golden Goose retained AMEC Earth & Environmental (AMEC), a division of AMEC Americas Limited, to carry out a dam safety inspection of the tailings dams at the Magino mine (Yong et al., 2008). The inspection was conducted in accordance with guidelines applicable to structures in Ontario, and also took into account the site’s closure plan requirements and the recommendations provided in AMEC’s previous dam safety inspection report (AMEC, 2002). With the exception of some requirements for erosion protection maintenance, all three dams appeared to be in stable condition with no visible signs of distress or instability. The conditions of the dams are not expected to change because the tailings are no longer being discharged to the primary pond.
Since 1992, the site has been kept on a care and maintenance basis (temporary suspension) during which time the issuer pursued financing opportunities that could potentially lead to the resumption of mining operations. Personnel remained on-site to provide security and ensure compliance with the Certificate of Approval (#4-0115- 88-896) and other environmental requirements. In 1996, the mine was authorized to reduce sampling frequency as long as the mine was not operational. Once the mine reactivates, the frequencies specified in the Certificate of Approval must be re- implemented.
The annual toxicity sample for the Rainbow Trout 96-hour LC50 bioassay toxicity test was collected from the secondary polishing pond in June 2009.
Water was no longer being pumped from the mine, so the mine water settling pond was dry and sampling the pond was not required.
A detailed mine site characterization was completed for the Magino mine as part of the mine closure plan. The original plan, “Magino Mine Closure Plan – Muscocho Explorations Limited”, was prepared in October 1992 by Environmental Applications Group Limited (Young and Simms, 1992). It was revised in 1993 by HBT AGRA Limited (Young and Simms, 1993). The mine site characterization is part of the
Prodigy Gold Incorporated 4-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada February 2003 amendment “Closure Plan – Amendment No.1, Golden Goose Resources Inc., Magino Mine Site” (Dyck and Bleiker, 2003). The changes in the amendment are in accordance with the requirements laid out in Part VII of the Ontario Mining Act and have been formatted as per Ontario Regulation 240/00 and the associated Mine Rehabilitation Code of Ontario. In 2010 AMEC conducted a hydro-geological study for Golden Goose (McBride, T.I. and Duckworth, P., 2010).
On September 29, 2011, Prodigy announced that it had signed an agreement with EBA to provide environmental baseline studies at Magino.
In addition, the following will be required if mining operations resume:
A Certificate of Authorization for Air under the Environmental Protection Act, Regulation 346.
A permit to take water (PTTW) for dewatering of the mine.
A PTTW from Webb Lake.
Waste Generator Registration from the Ontario Ministry of Environment (MOE), for waste generated on site such as oils, solvents, etc.
A NOPS must be submitted to change the current status of the mine from Temporary Suspension to Advanced Exploration or Mine Production status under Regulation 240/00. In addition, an NOPS must be submitted to the Ministry of Labour.
A First Nations Consultation must be held with any First Nations potentially affected by the project. Such consultations would address a requirement in Ontario's mining regulations, as well as various requirements for other approvals. The project lies within the Finan and Jacobson townships. The Michipicoten and Missanabie Cree First Nations will have to be apprised and the consultation process initiated. The Métis Nation of Ontario should also be consulted.
Prodigy Gold Incorporated 4-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 ACCESSIBILITY
The Magino mine is located in Finan Township, approximately 40 km northeast of Wawa, Ontario. The Magino mine can be accessed via a 14-km, all-weather gravel road (Chemin Goudreau) west of Dubreuilville (Figure 5.1), which is located on Highway 519, 30 km east of the junction of Highway 17 and Highway 519. This junction is approximately 40 km north of Wawa on Highway 17.
5.2 CLIMATE
The mean annual temperature for the area is slightly above the freezing point at 1°C. The average July temperature is 20°C and the average January temperature is -15°C. The average annual precipitation is 650 mm with rainfall highest in September, averaging 90 mm. Snow typically falls from October to May, but the peak is from November to March when the monthly average reaches 30 mm.
5.3 LOCAL R ESOURCES
The area is well serviced by mining and milling industries. The town of Dubreuilville, population 900, is the closest service community. The Island Gold mine (operated by Richmont) is 1.5 km east of the Magino mine, and the Eagle River mine (Wesdome Gold Mines) is 80 km to the west. The Hemlo operations (Barrick Gold Corp) are located approximately 150 km to the northwest. General labour and experienced workers are readily available in Wawa, Sault Ste. Marie and Thunder Bay.
5.4 INFRASTRUCTURE
The Magino mine is also connected to the rail sidings of Lochalsh (14 km to the east, Canadian Pacific Railway) and Goudreau (7 km to the west, Algoma Central Railway) by means of a gravel road. A 44 kV power line extends from Goudreau to Lochalsh and currently services the Magino mine. Most of the former surface buildings have been dismantled, and only the electrical and carpenter shops remain
Prodigy Gold Incorporated 5-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada in service. The underground workings have been flooded since the early 1990s and are sealed to prevent entry.
5.5 PHYSIOGRAPHY
The Magino mine is located in the geological Wawa Subprovince of the Canadian Shield. The topography of the area is characterized by low ridges and hills (up to 50 m of relief), flanked by generally flat areas of glacial outwash, swamps and numerous lakes and bogs.
Prodigy Gold Incorporated 5-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 5.1 Topography and Accessibility of the Magino Property
Prodigy Gold Incorporated 5-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 6.0 HISTORY
6.1 PRIOR TO THE 1950S
The area around the towns of Goudreau and Lochalsh has been prospected for many years. The discovery of iron mineralized material around the turn of the 20th century in the Michipicoten area southwest of Wawa led to a search for similar deposits along the iron ranges further north. In places, the iron formations near Goudreau were found to contain pyrite in sufficient quantity to form the basis of a mining industry of considerable importance at one time. Between 1916 and 1919, about 250,000 t of pyrite were produced, but a lack of markets for sulphuric acid at the close of World War I led to the abandonment of the mines and the dismantling of the acid plants that had been erected two miles east of Goudreau.
Gold was discovered in 1918 near Goudreau, and prospecting and mining have continued since then, being particularly active from the mid-1920s to the beginning of World War II. Available records show that gold production from the Goudreau area was somewhat sporadic.
In the fall of 1917, D.J. McCarthy and W.J. Webb of Sault Ste. Marie staked the current patented claims for pyrite after Rand Consolidated and Nichols Chemical Company started their operations in the district. Gold was discovered on the property on what is now claim 2050. Between then and 1925, when McCarthy-Webb Goudreau Mines Limited (McCarthy-Webb Goudreau Mines) was formed to take over and develop the claim group, two shallow shafts or pits had been sunk and some stripping and 1,100 ft (335.3 m) of surface diamond drilling had also been completed.
Between 1925 and 1933, McCarthy-Webb Goudreau Mines excavated test pits and trenches on the property while trying to interest major companies. One such company was Consolidated Mining and Smelting Company, which drilled an unknown number of metres in five surface holes. McCarthy-Webb Goudreau Mines constructed and operated a small test mill with a daily capacity of 25 t. In 1934, this mill processed 421 t of mineralized material and extracted 144 oz of gold for a recovered gold grade of 0.342 oz/ton (11.7 g/t).
In 1935, Algoma Summit started underground development by sinking an inclined shaft at -33° on the Grey Vein to a vertical depth of 100 ft (30.5 m). During 1936, a 500 t/d mill was constructed, consisting of amalgamation and flotation sections. According to the existing records, underground development was minor.
Prodigy Gold Incorporated 6-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada A report written in 1937 by consulting mining engineer, M.C.H. Little, states that extremely poor mining practices were in effect throughout the initial production stage, resulting in a significant amount of over-break in the stopes (dilution up to 100 to 200%), and the processing of substantial amounts of waste rock derived from development drifting and cross-cutting. Poor production planning also resulted in the initial mill feed coming from low-grade sections of the D-Zone where ground conditions were exceptionally poor as a result of the hanging wall felsite. Once the D-Zone open cut was abandoned, mill recoveries improved, though it only operated at 25% efficiency.
Between April and August 1937, the Algoma Summit mill processed 26,801 t of mineralized material from the open pit. The grade was 0.042 oz/ton (1.44 g/t) and 1,125 oz of gold were extracted. Gold recovery in the mill was about 79%. At the end of August 1937, production from the open pit was abandoned and mineralized material came only from underground stopes.
Production continued through to 1938 when the inclined shaft was deepened to a vertical depth of 200 ft. Algoma Summit apparently developed and mined some stopes in the A-Zone and D-Zone, but mining conditions did not improve that year. Toward the end of 1938, control of the property passed to a newly formed company called Magino Gold Mines Ltd (Magino Gold Mines). The company quickly began a detailed underground exploration program consisting of diamond drilling, mapping, sampling and drifting in an effort to develop a proven mineralized material reserve inventory. From 1934 to 1939, the company drilled 23 underground DDHs totalling 4,190 ft (1,277 m). From 1938 to 1940, Algoma Summit and Magino Gold Mines drifted 3,613 ft (1,101 m) and cross-cut 945 ft (288 m) on the first level, and drifted 2,248 ft (685 m) and cross-cut 757 ft (230 m) on the second level. In 1939 and 1940, Magino Gold Mines drilled 42 underground DDHs totalling 2,124 ft (647 m).
Just before Magino Gold Mines acquired the property, the M. J. O’Brien interests, who operated the nearby Cline gold mine, drilled a series of holes east of the mill buildings and discovered a new gold zone referred to as the E-Zone. Monthly reports from 1940 referred to these drillholes. By the late 1940s, Magino was unable to obtain the financing needed to continue mineralized material development, and there was undoubtedly a growing shortage of workers and supplies due to wartime rationing. As a consequence, the mine was closed and the mill sold in 1942. Between 1934 and 1939, 116,627 t were milled with a grade recovery of 0.075 oz/ton (2.57 g/t) for a total of 8,776 oz.
Prodigy Gold Incorporated 6-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 6.2 1972-1996: MC N ELLEN R ESOURCES AND M USCOCHO E XPLORATIONS
The Magino property lay dormant until 1972 when Mr. C. McNellen of Toronto carried out a privately financed six-hole drilling program totalling 2,000 ft (610 m).
The property remained idle until 1981 when Rico Copper (1966) Limited (later renamed McNellen Resources) conducted a diamond drilling program to evaluate the depth continuity of the A-Zone and B-Zone, and the lateral continuity of the E-Zone. A total of 6,915 ft (2,107 m) was drilled in 16 holes.
McNellen Resources entered into a joint venture with Cavendish Investing Ltd (Cavendish) on September 25, 1981. Under the terms of the agreement, Cavendish could earn an undivided 50% interest in the property by spending Cdn$900,000 on the property. Work on the property started on October 6, 1981. Surface facilities were installed and dewatering of the underground workings dewatered. Pumping started on November 26, 1981 and was completed on January 21, 1982.
S. L. MacDougall O.L.S. of Sault Ste. Marie conducted a surface survey in 1981. The surface drillholes from the 1981 summer drilling were tied into several surface triangulation points and the old mill foundation. A sun-shot was taken to determine true north. The underground workings were resurveyed and the survey carried to surface and tied into the surface survey. A channel sampling program was carried out on both levels. Channel samples were cut into the drift backs using a stoping machine and a power air hammer. A total of 1,723 individual samples were collected. Seventy-five test holes, 20 ft long (6.1 m), were drilled into the drift walls. Sludge samples were assayed. Cuttings were collected every 2.5 ft (0.76 m) for a total of 600 samples. A total of 8,581 ft (2,615 m) of 42 AQ holes were completed underground. Old core was re-logged and re sampled.
During the fall of 1982, a total of 6,798 ft (2,072 m) of surface drilling was completed in 38 holes. Old drill core was re-logged and about 683 new samples were taken, revealing a number of “mineralized material-grade” intersections. Magnetic, electromagnetic and geological surveys were also carried out on the Magino property.
In 1983, James Wade Engineer Ltd (James Wade) was contracted by McNellen Resources to prepare a pre-feasibility study for the Magino Joint Venture Gold Project. James Wade calculated a mineral inventory estimate over a minimum of 4.0 ft (1.2 m) and at two “cut back” levels for high-grade assays. Table 6.1 presents the reported tonnages and grades.
Prodigy Gold Incorporated 6-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 6.1 Historical Tonnages and Grades Estimated for the Magino Joint Venture Gold Project of McNellen Resources1
Grades Cut Grades Cut Classification Short Tons to 2 oz to 1 oz Proven 17,091 0.220 0.168 Probable 151,876 0.214 0.176 Possible 120,913 0.190 0.163 Inferred 70,623 0.150 0.142 Proven + Probable 168,967 0.215 0.175 Note: 1. Resources and/or reserves reported are historical. These historical “resources” and/or “reserves” should not be relied upon because it is unlikely they conform to current NI 43- 101 criteria or to CIM Definition Standards, and they have not been verified to determine their relevance or reliability. They are included in this section for illustrative purposes only and should not be disclosed out of context.
James Wade concluded that the 1983 mineral inventory was insufficient to support a viable independent mining and milling operation on the property given the gold prices of the early 1980s. The report also stated that reserves of three-quarters to one million tons would be required to support this scale of mining using a mill with a capacity of 500 tons/d.
At the request of Prophet Resources Ltd and June Resources Inc., Mr. Donald A. Bourne, a professional engineer and consulting geologist, carried out a re- assessment and evaluation of the Magino gold mine in 1984. The mineral inventory was evaluated at 228,734 tons1 grading 0.35 oz/ton (12.0 g/t) Au to a vertical depth of 400 ft (122 m) and over a minimum mining width of 4.0 ft (1.20 m). The “cut back” level for high-grade assays was 2 oz. Prior to a production decision and in order to progress to a proper feasibility study, Mr. Bourne recommended a program of 18,000 ft (5,485 m) of surface diamond drilling. From 5 July to 19 September, 1984, McNellen Resources completed 5,122 ft (1,561 m) of surface diamond drilling in 25 holes on the Magino property without Prophet Resources Ltd or June Resources Inc.
Muscocho Explorations Ltd acquired a 50% interest in the property from Cavendish Resources in the fall of 1985. From September to December, they carried out a surface drilling program west of the main mine workings. During this period, 29 DDHs were completed on the Magino property for a total of 16,441 ft (5,011 m). The objective of the program was to delineate the gold-bearing zones outlined by McNellen Resources in 1984.
1 Resources and/or reserves are historical. These historical “resources” and/or “reserves” should not be relied upon because it is unlikely they conform to currently NI 43-101 criteria or to CIM Definition Standards, and they have not been verified to determine their relevance or reliability. They are included in this section for illustrative purposes only and should not be disclosed out of context.
Prodigy Gold Incorporated 6-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Surface drilling continued in 1986. During the period of June 1986 to December 1986, 64 DDHs (BQ diameter) were drilled on the Magino property for a total of 12,372 ft (3,771 m). Exploratory underground development started in June. A ramp was collared at 25+00 E, 5+50 S. From June to December 1986, 3,075 ft (937 m) of underground advances were completed, consisting of 1,900 ft (579 m) of ramp, 755 ft (230 m) of crosscut (the crosscut was established on line 20+50 E), and 420 ft (128 m) of drifting.
Five drift headings were driven on three potential mineralized material zones, 200 ft (61 m) below surface. The haulage ramp was collared south of the granodiorite stock, and the dimensions were 10 ft (3.28 m) by 16 ft (4.9 m). The best drift results, based on face sampling, included 0.298 oz/ton (10.2 g/t) over an 8.0 ft (2.62 m) horizontal width along a strike length of 120 ft (35.50 m), and 0.25 oz/ton (8.57 g/t) over a 4.0 ft (1.31 m) horizontal width along a strike length of 50 ft (16.4 m). A total of 5,508 ft (1,679 m) of underground drilling in 12 DDHs (AQ diameter), completed from the ramp, helped delineate eight potential mineralized material zones (A through H) east of the crosscut between sections 2070E and 2450E. Estimated property-wide “inferred reserves”, as of the end of 1986, stood at 1,926,645 tons grading 0.251 oz/ton (8.61 g/t) to the 500 ft level. These reserves were derived from four laterally contiguous zones: Mine, North-east, West and West Extension (Bourne et al, 1987).
Sample processing and assaying was conducted on-site from 1986 (Magino JV 1986 Year End report).
With a few exceptions, the drillholes were sampled in their entirety. Samples were analysed for gold either by atomic absorption (AA) or fire assay (FA) methods, or by both methods if the primary AA value was greater than 800 ppb Au (0.8 g/t Au). Onsite assaying was done on 20 g pulp by AA and where the value exceeded 800 ppb then the coarse reject fraction was re-assayed using a 1 assay-ton gravimetric FA. The reject was crushed to 3/8”. Consequently obtaining a representative split of discrete particles of gold was not likely (Perkins, 1997).
Mining and construction of a mill with a capacity of 400 tons per day started in 1987. Surface drilling continued early in 1987. From January 1987 to December 1987, 92 DDHs (BQ diameter) were drilled on the Magino property for a total of 54,359 ft (16,569 m). An additional 51,330 ft (15,645 m) were drilled underground from drifts in 187 DDHs (AQ diameter). Underground development was also carried out.
The first gold bar was poured in June of 1988 and production began in October of 1988. From February 1988 to December 1988, Muscocho and McNellen drilled 213 underground DDHs totalling 57,434 ft (17,506 m). Between January 1988 and June 1988, nine surface holes were completed for a total of 19,545 ft (5,957 m). Underground development and mining work was also carried out.
There was no surface drilling in 1989, although 53,493 ft (16,305 m) were drilled underground from drifts in 293 DDHs. Underground development and mining work
Prodigy Gold Incorporated 6-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada was also carried out. By the end of December 1989, the mine had processed 202,764 tons of mineralized material, which returned 29,350 oz of gold for an average recovered grade of 0.145 oz/ton (4.97 g/t). From 1988 to 1989, mining was mainly accomplished by shrinkage stoping, which produced an average grade of 0.20 oz/ton (6.86 g/t) Au. In 1989, mill throughput was increased to 640 tons per day and production was mainly from long-hole stopes at an average grade of 0.12 oz/ton (4.11 g/t). The reduced mining cost for the long-hole stopes was offset by substantial dilution, with a resultant increase in the cost per ounce mined.
In 1990, underground drilling amounted to 15,178 ft (4,626 m) in 166 holes, compared to only 1,081 ft (329 m) in 13 holes in 1991. There was no surface drilling in either year, although underground development and mining work continued.
Neither underground nor surface drilling was carried out in 1992. The 650 ft ramp was driven down to a depth of 685 ft (back elevation), and work was started to open up the exploration/mining level. Almost 1,100 ft of exploration drifting and cross cutting was carried out. Several rounds of the 650 ft exploration drift were mucked to the mill. The 680 ft level was ready for further detailed exploration, which was considered necessary if it was to be established as the future source of mill feed. The mine closed in mid-1992 due to high operating costs, and the underground workings were allowed to flood. From 1988 to 1992, the Magino mine processed 768,678 tons at a recovered grade of 0.137 oz/ton (4.70 g/t) Au to produce 105,543 oz of gold.
The total production from 28 shrinkage stopes was 177,486 tons with a grade of 0.217 oz/ton on (38,572 oz). The total production from 34 long-hole stopes was 371,285 tons with a grade of 0.118 oz/ton on (43,938 oz). Three stopes were mined using a combination of long-hole and shrinkage methods, producing 53,766 tons with a grade of 0.177 oz/ton on (9,534 oz). Essentially, the excess dilution within long- hole stopes seemed to be a major factor in the reduced grades from these stopes (Nielsen, 1995). The average long-hole stope had a width in excess of 10 ft (3.28 m). The lower operating costs of the long-hole mining method were not sufficient to offset the dilution factor (Nielsen, 1995).
In February 1995, Muscocho Explorations Ltd requested that R. Bruce Graham and Associates Ltd carry out a technical review of the Magino mine property. Conclusions released by the author, F. W. Nielsen, included:
the mining methods resulted in excessive dilution on the relatively narrow, high-grade zones and veins the zones which were thought to join up, both along strike and up and down dip, were in fact discontinuous there are no proven reserves left in the underground mine workings there remain numerous narrow, high-grade drill intersections, indicating that a similar mineralized environment occurs throughout the Webb Lake granodiorite, especially at depth.
Prodigy Gold Incorporated 6-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 6.2.1 COMMENTS ON DRILLING AND CORE SAMPLING
Drill logs for the period do not always describe the core diameter. Where this information is recorded it is clear that surface drilling was generally BQ diameter and underground drilling was either BQ or AQ diameter (though several drillhole cores are recorded as EX).
Surface and underground BQ core, when originally split, was with a mechanical splitter which would result in many broken fragments and poor sample representativity (Bloom, 2009).
Drill logs often indicate that underground core was either, sampled in its entirety, or split. It is likely that BQ core was either split or sampled entirely, and that AQ and EX core was sampled entirely.
6.2.2 COMMENTS ON ANALYTICAL LABORATORY
There currently is no documentation to confirm the quality of sample processing and analytical determinations performed by the Magino mine assay laboratory during the period of mine operations (late 1980s to early 1990s).
In 1997, it was considered that sample assaying procedure used at the mine was not standard industry practice and studies indicated that a rigorous check assay program was required (Perkins, 1997).
Accordingly, several studies were undertaken in the Golden Goose period to understand whether sample representativity and analytical bias is an issue for the deposit, which is characterized by coarse gold mineralization. There is no comprehensive documentation to address this issue.
6.3 1996-2010 GOLDEN G OOSE
6.3.1 1996
In 1996, Golden Goose obtained the Magino mine property through an amalgamation of Muscocho Explorations, Flanagan McAdams Resources Inc. and McNellen Resources. In that same year, BLM Bharti conducted a property review that evaluated the potential for both underground and open-pit mining (BLM Bharti, 1996).
6.3.2 1997
In early 1997, a drill core re-sampling program was carried out to determine the reliability of previous drill assay results. A stripping program with structural mapping was completed on July 17, 1997, to determine the orientation and continuity of gold bearing veins.
Prodigy Gold Incorporated 6-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada DRILLING
In 1997, 10 DDHs totalling 2,087.5 m were drilled from April 1 to 25 by Chibougamau Diamond Drilling Ltd of Chibougamau, Québec (Nielsen, 1997). The holes were drilled to:
verify the potential of the mine area for hosting large-tonnage, low-grade gold mineralization amenable to open-pit mining determine the distribution of gold mineralization twin previous holes and determine the repeatability of assay results establish a sampling protocol.
All holes were drilled from north to south (N180° Az) on baseline-cut grid lines turned off a surveyed base line that was established in late 1996. The locations of the holes were determined using the Magino mine grid. All recovered core was NQ diameter. After each hole was completed, a Van Ruth plug was inserted in the bedrock below the bottom of the casing, and the top of the hole cemented. The casing was left in all holes. All drill core from this program is stored in tagged core boxes at the mine site. Several important objectives were set for the April 1997 program, with positive results. Firstly, the program confirmed the nature of the Magino mine mineralization and demonstrated that low-grade mineralization (0.5 g/t Au or higher), amenable to open-pit mining, occurs throughout the previously mined areas. Secondly, the new drillholes were used to determine sampling and assaying protocols for any future work.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
In 1997, 5% of the original pulps and 5% of the coarse rejects were checked by Swastika Laboratories Ltd. (Swastika Laboratories) of Swastika, Ontario. Golden Goose did not insert any standards or blanks. Another total of 87 pulps were sent to another laboratory (ALS Chemex) for an independent check (Nielsen, 1997).
MINERAL PROCESSING AND METALLURGICAL TEST ORK
Samples from diamond drillholes and rock samples from the stripped areas were sent to Lakefield Research for gravity, column leach, bottle roll and BWI testing to develop metallurgical mill process flow sheets (Perkins, 1999a).
BLM Bharti conducted a metallurgical research program as part of their 1997 preliminary feasibility study on the Magino gold property. The main results and conclusions provided below were extracted from the report (BLM Bharti, 1997):
Based on excellent standard leaching results, a carbon-in-leach (CIL) process was chosen for the Magino mineralized material.
Prodigy Gold Incorporated 6-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Drill core and surface bulk samples were tested at Lakefield Research. The drill core samples were higher grade material representing the main mineralized material types to be processed. Gold recoveries for future operations were determined using a blended mill feed of drill core and surface sample mineralized material. Bottle roll tests show that the material has an excellent dissolution rate of 97.8% in cyanide solution at a grind of 84% at -200 mesh. The cyanide and lime additions were found to be low relative to the majority of gold leaching applications. An overall dissolution of 96.4% can be expected, even when including a 25% blend of surface mineralized material at 92% extraction. Consequently, an overall gold recovery of 95% should be attainable. Column leaching tests indicated that heap leaching is not economical. Recoveries were very low even after 35 to 42 d of leaching. Gravity separation did not lead to high grades in the concentrate, the highest test result being 1.64%. A higher grade is generally desired to minimize direct smelting costs.
GEOCHEMISTRY AND GEOPHYSICAL SURVEYS
A baseline study was completed to evaluate the usefulness of geochemical sampling in future surface exploration. Quantec Consulting Inc. carried out an induced polarization-resistivity survey over the Webb Lake granodiorite on a local cut-and- picketed survey grid (non-UTM reference). The line separation was 400 ft and the station interval 100 ft. In all, 15.4 miles (24.8 km) were surveyed. The gradient and dipole-dipole induced polarization (IP)-resistivity results for the Magino property identified potential chargeability and resistivity signatures relating to subsurface geology, including possible lithological discriminations, concordant and discordant fault-fracture structures, geochemical alteration, and weak concentrations of disseminated mineralization potentially associated with auriferous quartz- and carbonate-altered faults, fractures or shear zones.
SAMPLE AND ASSAY DATABASE
A digital database that included imported archived diamond drillhole information was compiled for the property, and digital solids were created for the purposes of computer-based modelling. The underground workings, including both long-hole and shrinkage stopes, were modelled using Gemcom software. A block model was created for resource evaluation purposes.
ECONOMIC ANALYSIS
A scoping study was performed to determine the economic viability of the project using the block model data and estimated costs for commissioning and operating an
Prodigy Gold Incorporated 6-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada open-pit mine with a mill throughput of 7,500 t/d (Pearson, Hofman and Associates Ltd. (PHA), 1997). The scoping study indicated that at a gold price of US$350/oz and a cut-off grade of 0.025 oz/ton Au, the property had combined proven and probable reserves of 20.5 million short tons at an overall average grade of 0.050 oz/ton Au (18.6 Mt at 1.7 g/t Au) . Discounted cash flow indicators from that study showed a pre-tax IRR of 11.3% and a NPV of Cdn$32 million at a 5% discount rate. The decline in the gold price to the US$265 to 275 level in the late 1990s obviously nullified these economic analyses.
6.3.3 1998-1999
MINERAL PROCESSING AND METALLURGICAL TEST ORK
In August 1998, two bulk samples representing two rock types; mafic volcanics and granodiorite, were amassed from the 1997 diamond drill core and sent to KCA for further metallurgical column leach testing. The average head grade was 0.88 g/t Au for the mafic volcanics and 0.96 g/t Au for the granodiorite (KCA, 1999). Column testing indicated an expected field recovery of 45% Au for the mafic volcanics and 51% for the granodiorite mineralized material when crushed to -9.5 mm. Gold recovery increased from 80 to 84% with crushing to -1.70 mm.
6.3.4 2000
ADDITIONAL SAMPLING
In May of 2000, F. W. Nielsen of Golden Goose asked Reddick Consulting Inc. (Reddick) to carry out a program that would assist their re-evaluation of the Magino mine property. There were two separate components to the work. The first was a review of the digital DDH database to determine where un-sampled and/or missing core occurred in the central part of deposit. This was followed by retrieving the archived core for those intervals and having them assayed to determine background gold levels for un-sampled lengths of core.
DRILLING
The second component involved the drilling of 19 large diameter DDHs (HQ diameter) in the central part of the deposit to
assist with grade determination in areas subject to underground mining provide new baseline data to aid with grade reconciliation determine if there was variability in assay data as a function of sample size.
Dominik Drilling of Timmins, Ontario, was awarded the drill contract in 2000. Drilling ran from September 30 to October 18 (Reddick, 2001a). A total of 1,231 m was
Prodigy Gold Incorporated 6-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada drilled, producing 1,196 m of recovered core. The core was logged and sampled on the site. Drill collars were located by clearing out and re-chaining the parts of the grid lines that had been turned off the surveyed baseline established by Golden Goose in 1996. All drill cores from this program core is stored in tagged core boxes at the mine site. The 2000 drill program was designed to test the central part of the property to help reconcile grade estimates in the main mine area where stoping has removed some of the mineralization. There were two main considerations in designing the 2000 drill program. Firstly, in order to provide an even spatial distribution of samples, the holes were laid out in the most regular pattern possible. Secondly, only large diameter holes (HQ) were drilled and only one quarter of the core was archived to obtain the most representative samples possible.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
In 2000, Golden Goose randomly inserted diabase samples in the shipped samples as blanks. In addition, Swastika Laboratories reported on their internal blanks, which they use for their own quality assurance/quality control (QA/QC) purposes. To determine the variation introduced by sub sampling, every 25th sample had a check assay done on the original pulp and a second pulp was split from the coarse reject fraction for a third assay. Swastika Laboratories also performed many additional random checks. Golden Goose did not insert any standards. None of the samples assayed by Swastika Laboratories were sent for independent verification at another laboratory (Reddick, 2001b).
A total of 1,231 m was drilled. The results of the 2000 drilling program, as well as the re-sampling program, helped to establish a mean grade of 0.015 oz/ton Au for un- sampled core from the central 1,000 ft (305 m) of the deposit. It also provided information on the existence of a significant percentage of granodiorite in the main part of the deposit at a grade considered sufficient for a low-grade, large-tonnage mining operation (0.06 to 0.10 oz/ton).
6.3.5 2001
In 2001, Reddick re-evaluated the variography and interpolation techniques to produce a revised resource estimate based on the inclusion of data obtained in 2000. Taking into account past production, the total Measured Resource when applying a cut-off grade of 0.05 oz/ton was estimated at approximately 5.8 Mt at a grade of 0.09 oz/ton Au. These resources were estimated for an open-pit operation.
6.3.6 2002
DRILLING
In 2002, Golden Goose conducted a 17-hole diamond drilling program (2,743 m) under the supervision of Reddick. The holes were mostly drilled west of the mine area and did not identify significant mineralization.
Prodigy Gold Incorporated 6-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Dominik Drilling of Timmins, Ontario, was awarded the drill contract in 2002. Drilling ran from May 12 to June 12, 2002 (Reddick, 2002). A total of 2,743 m was drilled with 2,508 m of core recovered. Drill collars were located on the grid established by Golden Goose in 1996 and 1997. The core was logged and sampled on the site. All drill cores from this program are stored in tagged core boxes at the mine site. The 2002 drill program tested targets along the gold trend in the mine area; these targets were in the vicinity of anomalous results obtained during earlier drilling of the Lovell Lake and North Plug Granodiorite intrusions, and the previously undrilled Southern Granodiorite. The best mineralization from the 2002 drilling program was in DDHs near the mine area.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
In 2002, Golden Goose inserted 17 diabase samples in the shipped samples as blanks. As in 2000, Swastika Laboratories reported their internal blanks. Check assays were performed on random pulps, as were checks of a second pulp split from the coarse reject fraction. None of the assayed samples were sent for independent verification at another laboratory (Reddick, 2002).
6.3.7 2004
RESOURCE ESTIMATE
In 2004, a NI 43-101 technical report by Snowden and Reddick reviewed the 2001 block model resource estimate to determine its suitability for use in scoping studies involving pit optimization (Burns and Reddick, 2004). Reddick concluded that for a potential open pit mine based on a cut-off grade of 0.04 oz/ton, the 2004 combined Measured and Indicated Mineral Resource at the Magino mine was 7.295 Mt grading 0.075 oz/ton Au after subtracting historical production.
6.3.8 2006
DRILLING
In 2006, 18 NQ DDHs were completed for a total of 8,055 m. The holes identified a very robust system of gold mineralization with numerous intersections greater than 100 g/t Au, and clearly demonstrated the down-dip continuity of the mineralization, which remained open at depth and along strike. The deepest intersection of the diamond drill program was 440 m below surface (Hole 06-12), and mineralization was still open.
The 2006 drill contract was awarded to Bradley Brothers Drilling of Rouyn-Noranda, Québec. Drilling ran from February 9 to April 11, producing 11 NQ DDHs totalling 4,802 m. Another four holes totalling 1,866 m were drilled from June 9 to July 1.
Prodigy Gold Incorporated 6-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Three other holes totalling 1,387 m were drilled from November 23 to December 12. The core was logged and sampled at the mine site. All drill core from this program is stored in tagged core boxes at the mine site. The 2006 drilling program was designed to target mineralization below historical workings from a depth of 130 to 400 m below surface and within the range of a future extended decline access.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
In 2006, the Golden Goose QA/QC program consisted of 189 un-mineralized mafic volcanic samples inserted as blanks to check for cross-contamination. In addition, 177 core duplicates were assayed at ALS Chemex in Thunder Bay to monitor sample variability. Golden Goose did not insert any standards. A selection of 115 master pulps were sent to a secondary laboratory (Swastika Laboratories) for check assays (Waldie, 2006). For the assay range from 0 to 100 g/t Au, the correlation coefficient was 0.983.
From 1997 to 2006, Golden Goose did not detect any significant variation between subsamples.
ANALYTICAL LABORATORY
In 2006 core samples were sent to the ALS Chemex laboratory at Thunder Bay, Ontario. The sample preparation process was as follows:
sample log-in received sample weighing crush with 90% passing 2 mm crushing – quality control test split sample with riffle splitter pulverize 1,000 g to 85% passing 75 µm pulverizing – quality control test
Gold analysis conformed to Code Au-AA24 with a 50 g charge for fire assay followed by AA finish. “Mineralized material” grade results were re-assayed according to Code Au-AA26.
6.3.9 2007
DRILLING
Golden Goose drilled 14 NQ DDHs on the Magino property for a total of 9,239 m. The drilling program was originally designed to outline and extend multiple known
Prodigy Gold Incorporated 6-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada gold zones from 150 to 400 m below surface, below the historical Magino mine workings.
Bradley Brothers Drilling was awarded the drill contract in 2007. Drilling ran from January 6 to December 17. Fourteen NQ DDHs were completed totalling 9,836 m. The core was logged and sampled at the mine site. All drill core from this program is stored in tagged core boxes at the mine site. The 14 DDHs identified a gold system with numerous intersections and clearly demonstrated the continuity of the mineralization, which remains open at depth and along strike.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
In 2007, samples were assayed at Accurassay Laboratories in Thunder Bay, Ontario. Golden Goose did not establish a QA/QC protocol for samples from the 2007 drilling program, nor did the company double-check the results using a second laboratory. Independent consultants InnovExplo of Val-d'Or, Québec asked Golden Goose to send assayed samples for independent verification at ALS Chemex in Thunder Bay, Ontario. In all, 363 pulps from the 2007 program were sent, and InnovExplo’s analysis of the results from this second laboratory revealed no bias in the original data obtained from Accurassay.
6.3.10 2008
RESOURCE ESTIMATE
In 2008, InnovExplo completed a Mineral Resource Estimate for the Magino gold mine below the old mine workings (i.e. below the 650 m level) that was published as a NI 43-101 technical report (Turcotte and Pelletier, 2008). Specifically, InnovExplo’s mandate was to prepare a resource estimate from a depth of 200 to 600 m. The resulting resources could only be classified as Inferred as per CIM standards and guidelines for reporting mineral resources and reserves. The total estimated Inferred Resources were 3,755,600 t grading 5.94 g/t Au for a total of 717,227 oz of gold (cut- off at 3 g/t Au). The highlight of this resource estimate was the addition of a large portion of Inferred Resources below the old workings of the Magino mine (i.e., below the 650 m level). This upgrade was possible due to the results from the 2006-2007 diamond drilling program, the most recent drill program at that time. This additional information increased the number of mineralized zones.
EXPLORATION POTENTIAL
InnovExplo also performed an exhaustive compilation of the entire Magino property to identify new regional exploration targets for diamond drilling and stripping. It was concluded that there is potential for gold mineralization in granodiorite, gabbro/diorite and volcanic rocks throughout the Magino property. InnovExplo constructed a geological compilation map showing all historical exploration work on the Magino property. The compilation work encompassed all previous geological mapping,
Prodigy Gold Incorporated 6-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada trenching, diamond drilling, surface sampling, geophysical surveying, geochemical surveying, etc., and all historical mineral occurrences.
SURFACE SAMPLING
In July 2008, Golden Goose carried out stripping and channel sampling in the vicinity of the southern contact of the Webb Lake granodiorite stock and adjacent volcanic rocks (Golden Goose news release dated October 28, 2008). The stripped area lays over the old mine workings and consists of seven small strippings totalling 2,790 m2. The purpose of the work was to enhance the understanding of structural controls on gold deposition. A total of 78 channel samples were collected from the stripped areas. The best results for the stripping and channel sampling program were: 19.85 g/t Au over 0.5 m, and 17.59 g/t Au over 1.0 m.
6.3.11 2009
GEOCHEMISTRY AND GEOPHYSICAL SURVEYS
In 2009, Gestion Aline Leclerc Inc. of Val-d’Or, Québec, performed a geochemical field survey from September 18 to 21, 2009. A total of 661 humus samples were collected and assayed for gold and 48 other elements. Two grids were established with lines spaced 100 m apart. Grid locations were established with a hand-held global positioning system (GPS). One sample was collected every 25 m. That same autumn, D/C Géophysique of Val d’Or, Québec, carried out a ground magnetic survey from September 26 to October 10, 2009. A total of 75 km was surveyed on a grid of 42 lines spaced 50 m apart.
RESOURCE ESTIMATE
InnovExplo reported that the Magino mine has Measured and Indicated Resources of 2,091,900 tons grading 6.74 g/t Au for a total of 453,189 oz. Total Inferred Resources were reported as 5,828,800 tons grading 6.29 g/t Au for a total of 1,178,124 oz at a cut-off grade of 3.0 g/t Au, as published in a technical report in compliance with NI 43-101 and Form 43-101F1 (Turcotte and Pelletier, 2009).
6.3.12 2010
DRILLING
From November 15, 2009 to March 1, 2010, Golden Goose conducted a 14-hole diamond drilling program totalling 4,012 m. Most of the holes were drilled in volcanic rocks south of the mine area and succeeded in identifying some significant gold mineralization.
Prodigy Gold Incorporated 6-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Bradley Brothers Drilling was awarded the drill contract in 2009-2010. Drilling ran from November 15, 2009 to March 30, 2010. Fourteen NQ DDHs were completed totalling 4,012 m. The core was logged and sampled at the mine site.
All drill core from this program is stored in tagged core boxes at the mine site. The overall objective of the 2009-2010 drilling program was to discover new mineralized zones in volcanic rocks on the Magino property, south of the mine area. The 14 DDHs identified some gold intersections and clearly demonstrated the possibility of increasing the gold resources in the volcanic rocks south of the mine area, which remain open at depth and along strike.
SAMPLING AND ANALYTICAL QUALITY ASSURANCE QUALITY CONTROL
A QA/QC control program was active during the Golden Goose 2009-2010 diamond drilling program on the Magino property. The objectives of the QA/QC program were to monitor and document the quality and integrity of the sampling procedure, sample preparation, and assaying. Using a series of quality control samples, Golden Goose’s protocol stipulates that the entire sampling, sample preparation and assaying process be monitored and evaluated for:
The integrity of field sampling and sample shipment by monitoring field blank results and sample shipment procedures. The possible contamination during sample preparation or the assaying process by monitoring the results of field blank standards submitted as regular samples, and by monitoring laboratory analytical blank standard results. The suitability of crushing/splitting/pulverization sizes by measuring the precision of coarse and pulp duplicate samples. The level of assaying accuracy by using external and internal (laboratory) certified reference standards and by assaying blind certified reference standards in each batch of samples.
The laboratory inserted one coarse crush duplicate sample split, selected at random, into each 10-sample sub-batch. Three certified reference materials (CRMs) with different grades, all from Rocklabs in New Zealand, were used for QA/QC. One field blank standard was prepared using “barren” rock from the project site, or other potentially “barren” material. One of the three CRMs, or one blank, was included in each batch of 50 samples shipped by the Golden Goose geologist.
6.3.13 SUMMARY
The exploration and mining history of Magino is summarized in Table 6.2.
Prodigy Gold Incorporated 6-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 6.2 Historical Summary
Year Company Work Description Results References
1917 McCarthy-Webb development of claim group to Goudreau Mines sinking of two shallow shafts or pits discovery of gold Bourne et al., 1983 1924 Ltd 335 m of surface diamond drilling 1925 McCarthy-Webb test pits and trenching to Goudreau Mines - Bourne et al., 1983 1932 Ltd five surface DDHs Consolidated 1933 Mining and diamond drilling 421 t of mineralized material milled to Bourne et al., 1983 Smelting 1934 construction of mill 144 oz of gold extracted Company inclined shaft sunk at 33° 1935 47,785 t of mineralized material Algoma Summit sublevel at 100 ft (30.5 m); 1st level at 176 ft to milled Bourne et al., 1983 Gold Mines (53.6 m); 2nd level at 374 ft (114 m) 1937 2,274 oz of gold extracted underground diamond drilling nd 1938 inclined shaft sunk to 2 level at 374 ft (114 m) 68,421 t of mineralized material Algoma Summit to underground diamond drilling milled Bourne et al., 1983 Gold Mines 1939 drifting 6,049 oz of gold extracted 1939 Magino Gold detailed underground exploration program discovery of a new gold zone to Bourne et al., 1983 Mines 1942 mine closed 309 oz of gold from clean-up of mill surface diamond drilling: 6 DDHs (AS-72-01 to AS- many new “mineralized material- 1972 Mr. C. McNellen Bourne et al., 1983 72-06) totalling 2,000 ft (610 m) grade” intersections Rico Copper surface diamond drilling: 16 DDHs (S-81-1 to S-81- many new “mineralized material- 1981 Bourne et al., 1983 (1966) Ltd 16) totalling 6,915 ft (2,107 m) grade” intersections table continues…
Prodigy Gold Incorporated 6-17 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References surfaces facilities installed underground workings dewatered and resurveyed channel sampling McNellen 1981 test hole drilling Resources many new “mineralized material- to Bourne et al., 1983 Cavendish 75 test holes totalling 1,500 ft (457 m) grade” intersections 1982 surface diamond drilling: 38 DDHs (SS-1 to SS-37A) totalling 6,798 ft (2,072 m) underground drilling: 42 DDHs (U1-1 to U1-11; U2-1 to U2-31) totalling 8,581 ft (2,615 m) McNellen Mongeau, 1982 Resources magnetic and electromagnetic surveys no electromagnetic conductors 1982 Parbery and Mongeau, Cavendish geological survey magnetic anomalies 1982 Resources Ltd McNellen pre-feasibility study 1983 Resources project not viable Bourne et al., 1983 mineral inventory estimation Cavendish McNellen Resources Inc. pre-feasibility study Cavendish mineral inventory estimation Bourne, 1984 1984 Prophet new gold-bearing zones found Sutherland, 1987 Resources Ltd durface diamond drilling: 25 DDHs (JJ-1 to JJ-24) totalling 5,122 ft (1,561 m) June Resources Inc. McNellen surface diamond drilling Resources 1985 29 DDHs (MAG-85-01 to MAG-85-29) totalling four mineralized zones outlined Sutherland, 1987 Muscocho 16,441 ft (5,011 m) Explorations table continues…
Prodigy Gold Incorporated 6-18 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References surface diamond drilling: 64 DDHs (S-86-01to S-86- best drift results: 0.298 oz/ton over McNellen 55; S-86-57 to S-86-65) totalling 12,372 ft (3,771 m) 8.0 ft horizontal width along strike Muscocho Explorations, Resources underground diamond drilling: 12 DDHs (U-86-01 to length of 120 ft (35.50 m) 1987 1986 Muscocho U-86-12) totalling 5,508 ft (1,679 m) DDH S-86-014 intersected Sutherland, 1987 DDH Explorations ramp collared 0.624 oz/ton over 13.0 ft (21.38 g/t logs underground development Au over 3.96 m) surface diamond drilling: 92 DDHs (S-87-001 to S- 87-079; S-87-201 to S-87-211) totalling 54,359 ft McNellen (16,369 m) Resources DDH S-87-045 intersected 1987 underground diamond drilling: 187 DDHs (U- 87-001 0.708 oz/ton over 14.2 ft (24.29 g/t DDH logs Muscocho to U-87-118; U-87-120 to U-87-186) totalling Au over 4.33 m) Explorations 51,330 ft (15,645 m) Underground development surface diamond drilling 9 DDHs (S-88-001 to S-88-009) totalling 54,359 ft (16,369 m) McNellen Resources underground diamond drilling: 213 DDHs (U-88-001 DDH S-88-001 intersected 1988 to U-88-064; U-88-072 to U-88-151; U-88-155 to U- 0.371 oz/ton over 31.0 ft (12.73 g/t DDH logs Muscocho 88-166; U-88-171 to U-88-207; U-88-219 to U-88- Au over 9.45 m) Explorations 232; U-88-240 to U-88-245) totalling 57,434 ft (17,506 m) underground development and mining work table continues…
Prodigy Gold Incorporated 6-19 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References DDH U-89-043 intersected 0.257 oz/ton over 6.0 ft (8.81 g/t Au underground diamond drilling: 293 DDHs (U-89-001 over 1.83 m) to U-89-090; U-89-092 to U-89-116; U-89-118 to U- DDH U-89-061 intersected 89-142; U-89-147 to U-89-64; U-89-168 to U-89- McNellen 0.244 oz/ton over 9.4 ft (8.37 g/t Au 169; U-89-171; U-89-173 to U-89-176; U-89-179 to Resources over 2.87 m) 1989 U-89-188; U-89-190 to U-89-192; U-89-194 to U-89- DDH logs Muscocho 196; U-89-198 to U-89-200; U-89-204 to U-89-237; DDH U-89-159 intersected Explorations U-89-238 to U-89-248; U-89-251 to U-89-315) 2.283 oz/ton over 3.4 ft (78.27 g/t Au totalling 53,493 ft (16,305 m) over 1.02 m) underground development and mining work DDH U-89-163 intersected 0.30 oz/ton over 24.8 ft (10.29 g/t Au over 7.56 m) underground diamond drilling: 166 DDHs (U-90-001 McNellen to U-90-015; U-90-017 to U-90-019; U-90-021 to U- Resources 90-023; U-90-025 to U-90-092; U-90-101 to U-90- DDH U-90-080 intersected 1990 0.21 oz/ton over 10.3 ft (7.21 g/t Au DDH logs Muscocho 127; U-90-129 to U-90-178) totalling 15,178 ft over 3.14 m) Explorations (4,626 m) underground development and mining work McNellen underground diamond drilling: 13 DDHs (U-91-001 Resources DDH U-91-008 intersected 1991 to U-91-013) totalling 1,081 ft (329 m) 0.243 oz/ton over 9.70 ft (8.32 g/t Au DDH logs Muscocho underground development and mining work over 2.96 m) Explorations
McNellen no underground and surface diamond drilling Resources Muschocho Explorations, 1992 underground development and mining work - Muscocho 1992 Explorations the 650 ft ramp was driven to a depth of 685 ft table continues…
Prodigy Gold Incorporated 6-20 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References 768,678 t processed production of 105,543 oz of gold 28 shrinkage stopes totalling 177,486 t with a grade of McNellen 0.217 oz/ton (38,572 oz) 1988 McBride, 1991 Resources to mining production 34 long-hole stopes totalling Nielsen, 1995 Muscocho 371,285 t with a grade of 1992 Perkins, 1999 Explorations 0.118 oz/ton (43,938 oz) three combined long-hole and shrinkage stopes totalling 53,766 t with a grade of 0.177 oz/ton (9,534 oz) McNellen Resources 1995 technical review of the Magino mine property - Nielsen, 1995 Muscocho Explorations acquisition of Magino mine BLM Bharti 1996 1996 Golden Goose evaluation of potential for both underground and - Reddick 1996a open-pit mining Reddick 1996b table continues…
Prodigy Gold Incorporated 6-21 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References
check sampling program Nielsen, 1997 geochemical study for surface exploration Perkins, 1997 IP survey of Webb Lake granodiorite PHA, 1997 Hall et al., 1997 surface diamond drilling Wilson, 1997 10 DDHs (S-97-01 to S-97-10) totalling 2,087 m DDH S-97-05 intersected 18.57 g/t 1997 Golden Goose BLME, 1997 stripping, mapping and channel sampling Au over 7.00 m Analytical Solutions Ltd, structural study 1997 creation of a digital database in Gemcom software Reddick, 1999 creation of a block model for resource evaluation Perkins, 1999 scoping study Reddick, 2000 Reddick, 1999 1998 Golden Goose two bulk samples - Perkins, 1999 Measured Resources: 5.8 Mt 2000 surface diamond drilling grading 0.09 oz/ton Au Reddick, 2001a to Golden Goose 19 DDHs (00-01 to 00-18) totalling 1,231 m DDH 00-02 intersected 9.54 g/t Au Reddick, 2001b 2001 revised resource estimate over 3.65 m surface diamond drilling DDH 02-02 intersected 12.89 g/t Au 2002 Golden Goose Reddick, 2002 17 DDHs (00-02 to 02-17) totalling 2,743 m over 0.67 m Measured and Indicated Resources: 2004 Golden Goose review of mineral resources Burns and Reddick, 2004 7.295 Mt grading 0.075 oz/ton Au surface diamond drilling DDH 06-14 intersected 7.29 g/t Au 2006 Golden Goose Waldie, 2006 18 DDHs (06-01 to 06-15; 2006-16 to 2006-17) over 5.4 m totalling 8,055 m surface diamond drilling DDH 2007-30 intersected 7.94 g/t 2007 Golden Goose DDH logs 14 DDHs (2007-17 to 2007-30) totalling 9,239 m Au over 2.9 m table continues…
Prodigy Gold Incorporated 6-22 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Company Work Description Results References Inferred Resources: 3,775 Mt technical report and mineral resource estimate grading 5.94 g/t (717,227 oz) below Turcotte and Pelletier, the old workings 2008 press release from 2008 Golden Goose stripping and channel sampling best channel sampling results: Golden Goose: October compilation of the entire Magino property 19.85 g/t over 0.5 m and 17.59 g/t 28, 2008 over 1.0 m geochemical field survey (humus) Leclerc and Fleury, 2009 2009 some gold anomalies (humus) ground magnetic survey (75 km) news release from to Golden Goose some magnetic anomalies 14 DDHs (2009-01 to 2009-08; 2010-01 to 2010-06) Golden Goose: March 2010 some significant gold mineralization totalling 4,012 m 30, 2010
Prodigy Gold Incorporated 6-23 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 THE A RCHEAN S UPERIOR P ROVINCE
The Archean Superior Craton forms the core of the North American continent and is surrounded and truncated on all sides by Proterozoic orogens, the collisional zones along which elements of the Precambrian Canadian Shield were amalgamated (Hoffman, 1988 and 1989). The Superior Province represents 2 Mkm2 of this craton that is free of significant post-Archean cover rocks and deformation (Card and Poulsen, 1998). Tectonic stability has prevailed since circa 2.6 Ga in large parts of the Superior Province (Percival, 2007). The rocks of this Province are mainly Meso- archean and Neo-archean in age and have been significantly affected by post- Archean deformation only along the boundaries marked by Proterozoic orogens, such as the Trans-Hudson and Grenville orogens, or along major internal fault zones, such as the Kapuskasing Structural Zone. The rest of the Superior Province has remained stable since the end of the Archean (Goodwin et al., 1972).
Proterozoic and younger activity is limited to rifting along the margins, emplacement of numerous mafic dyke swarms (Buchan and Ernst, 2004), compressional reactivation, and large scale rotation at circa 1.9 Ga, and failed rifting at circa 1.1 Ga. With the exception of the northwest and northeast Superior margins that were pervasively deformed and metamorphosed at 1.9 to 1.8 Ga, the craton has escaped ductile deformation. A first order feature of the Superior Province is its linear subprovinces of distinctive lithological and structural character, accentuated by subparallel boundary faults (e.g. Card and Ciesielski, 1986). Trends in the Superior Province are generally easterly in the south, westerly to north-westerly in the northwest, and north-westerly in the northeast (Figure 7.1). The southern Superior Province (to latitude 52°N) is a major source of mineral wealth. Owing to its potential for base metals, gold and other commodities, the Superior Province continues to attract mineral exploration in both established and frontier regions.
7.2 THE W AWA S UBPROVINCE
The Magino property is located in the Wawa Subprovince (Figure 7.2). Most geologists accept a correlation between the Wawa and Abitibi terranes across the transverse Kapuskasing uplift (Percival, 2007). Volcanism appears to have begun with the 2.89 to 2.88 Ga Hawk assemblages. The 2.745 Ga Wawa assemblage and the 2.72 Ga Greenwater and Manitouwadge assemblages reflect oceanic settings. Volcanogenic massive sulphide deposits in the Wawa terrane have similar ages of
Prodigy Gold Incorporated 7-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 2.72 Ga (Corfu and Stott, 1986; Williams et al., 1991; Sage et al, 1996a and b). Polat and Kerrich (1999) reported a variety of oceanic magma types from the Schreiber belt and interpreted the belt as a tectonic mélange (Polat et al., 1998; Polat and Kerrich, 1999 and 2001). Relatively late-stage volcanism at circa 2.695 Ga (Carfish assemblage) took place during D1 thrusting. Subsequent calc-alkalic to alkali magmatism (circa 2.689 Ga; Corfu and Stott, 1996) and associated coarse clastic sedimentation (less than 2.689 Ga) was followed by the emplacement of sanukitoid plutons (2.685 to 2.68 Ga) and dextral transpressive D2 deformation.
Figure 7.1 Tectonic Subdivisions of the Superior Province within Northern Ontario
Source: Stott et al., 2007
Prodigy Gold Incorporated 7-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 7.2 Major Geological Elements of the Eastern Wawa Subprovince
Source: Card and Poulsen, 1998
Mineralization occurs in two main regions: the Michipicoten-Mishubishu belt in the Wawa area and the Shebandowan-Schreiber belt to the west (Percival, 2007). The Michipicoten-Mishubishu belt contains mainly iron and gold deposits with some nickel and copper-vein deposits (Figure 7.3). Iron deposits are in oxide-, sulphide- and carbonate-facies iron formations that lie stratigraphically above the 2.74 to 2.735 Ga Wawa assemblage. Gold deposits in this region occur within veins associated with shear zones in plutonic rocks of variable composition and age.
The Shebandowan-Schreiber belt hosts important deposits of gold, iron and base metals (volcanic-hosted massive sulphide deposits; e.g., Manitouwadge) (Peterson and Zaleski, 1999; Zaleski et al., 1999), as well as intrusion-hosted nickel deposits. The most significant is the Hemlo gold camp, a large disseminated deposit (Muir, 2003) in a strongly deformed, circa 2.693 to 2.685 Ga volcano-sedimentary sequence (Davis and Lin, 2003). Gold was deposited during D2 sinistral wrench deformation between 2.680 and 2.677 Ga, likely from fluids derived from granitoid rocks.
Prodigy Gold Incorporated 7-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 7.3 Mineral Belts in the Michipicoten-Shebandowan Region of the Wawa Subprovince
Source: Card and Poulsen, 1998
7.3 THE M ICHIPICOTEN G REENSTONE B ELT
The Magino mine is located within the Michipicoten greenstone belt (Figure 7.2 and Figure 7.3). This belt, including the adjacent Gamitagama and Mishubishu greenstone belts, is one of the key localities with respect to the Superior Province (Wawa Subprovince) geology, partly because of the importance of its Algoma-type iron formations, partly because many important concepts of greenstone belt geology are based there, and partly because it contains a record of volcanism, sedimentation and plutonism that spans at least 240 Ma of Archean time (Card and Poulsen, 1998).
The Michipicoten greenstone belt is a structurally and stratigraphically complex assemblage of volcanic, sedimentary and intrusive rocks that were metamorphosed to greenschist and amphibolite facies (Attoh, 1981; Williams et al., 1991). To the east and south, the Michipicoten greenstone belt and satellite Gamitagama greenstone belt are bounded by plutonic rocks of the Wawa gneiss domain, mainly tonalite gneiss with abundant granitic intrusions (Card and Poulsen, 1998). The northeastern Wawa Subprovince consists of similar gneissic and plutonic rocks along with the small Saganash Lake and Kabinakagami Lake greenstone belts. At the eastern edge of the Michipicoten greenstone belt, a Meso-archean sequence (Cycle 1) of basalt and komatiite, overlain by calc-alkaline tuff, is intruded by the 2888 Ma Hawk granite and 2881 Ma felsic sills (Sage, 1994; Card and Poulsen, 1998). This
Prodigy Gold Incorporated 7-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada sequence is in contact with 2747 Ma tonalite gneiss cut by 2698 Ma intrusions of the Whitefish Lake batholith. The Meso-archean rocks may represent a basement to the younger volcanic succession (Jackson and Sutcliffe, 1990). The Meso-archean and Neo-archean supracrustal rocks form at least three mafic-felsic cycles with intercalated sediments, notably the thick Helen iron formation that caps the lower cycle and consists of a lower siderite member, a middle pyritic carbonate member, and upper chert-carbonate and black-shale members (Goodwin, 1962; Sage, 1987; Sage, 1994). Cycle 2 is a 2749 to 2746 Ma and 2729 Ma sequence consisting of tholeiitic basalt and andesite overlain by calc-alkaline dacite and rhyolite (Sage, 1994; Card and Poulsen, 1998). The upper volcanic cycle (Cycle 3), which is separated from the lower cycles by the Doré conglomerate containing tonalite clasts as young as 2698 Ma, consists of tholeiitic basalt with minor komatiite, capped by 2701 to 2691 Ma calc-alkaline felsic volcanic and clastic sedimentary rocks that include wacke, arkose, polymictic conglomerate and oligomictic quartz conglomerate (Sage, 1994; Card and Poulsen, 1998). Detrital zircons from the sedimentary rocks are as young as 2680 Ma (Corfu and Sage, 1992), demonstrating that these sediments, like similar sequences in the Abitibi greenstone belt, were deposited following major volcanism. The petrography of the wacke units indicates that they were derived from bimodal mafic-felsic volcanic sequences (Ayres, 1983).
Several suites of plutonic rocks ranging in composition from gabbro to monzogranite and syenite occur in and around the Michipicoten greenstone belt. Early tonalite, trondhjemite and granodiorite plutons with ages of 2747 to 2737 Ma, 2729 to 2721 Ma and 2698 to 2693 Ma, respectively – similar to the ages of the main volcanic cycles – are probably syn volcanic and have characteristics consistent with derivation from melting of basaltic sources (Card and Poulsen, 1998).
The rocks of the Michipicoten and Gamitagama greenstone belts have been repeatedly deformed and metamorphosed under low-pressure, greenschist to lower amphibolite facies conditions (Ayres, 1969, 1983; Studemeister, 1983; McGill and Shrady, 1986; Arias and Helmstaedt, 1990; McGill, 1992; Sage, 1993 and 1994). Early structures include major recumbent folds, thrusts and associated cleavages (Card and Poulsen, 1998). Later superimposed upright folds are accompanied by steep cleavages. The latest structures include northeast-trending shear zones that host auriferous vein systems (Heather, 1989) and northerly-trending sinistral faults.
The Michipicoten-Mishubishu mineral belt is dominated by iron and gold deposits (Figure 7.3); lesser prospects include nickel sulphide and copper-vein deposits. Iron formation deposits are widely distributed in this region. Gold deposits also typify the Michipicoten-Mishubishu mineral belt. Most of these occur in a linear zone extending west-southwest from Renabie in the east, through the Goudreau-Lochalsh area, to Mishubishu Lake. Although the gold deposits of this area occur in a terrane with extensive iron formations, they display a remarkable association with altered shear zones and plutonic rocks regardless of composition or age (Studemeister, 1985; Studemeister and Kilias, 1987; Arias and Heather, 1987; Heather and Arias, 1987 and 1992).
Prodigy Gold Incorporated 7-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 7.4 THE G EOLOGY OF THE M AGINO M INE A REA
The Magino mine is situated in the Goudreau-Lochalsh gold district of the Wawa gold camp. The geology of the Goudreau-Lochalsh gold district has been mapped by Sage and published over a ten-year period (Sage 1983, 1984, 1985, 1987a, 1993, 1993a, 1993b, 1993c and 1993d). Supracrustal rocks in the Goudreau-Lochalsh district consist of Cycle 2 felsic to intermediate pyroclastic metavolcanics capped by pyrite-bearing ironstone. To the north are pillowed, massive and schistose, mafic to intermediate metavolcanics and minor intercalations of Cycle 3 mafic pyroclastic rock. Several medium- to coarse-grained quartz dioritic to dioritic sills and/or dikes intrude all metavolcanic rocks.
Gold mineralization at the Magino mine is dominantly hosted by the Webb Lake stock (Deevy, 1994), which intrudes isoclinally folded Cycle 3 mafic volcanic rocks (Sage, 1993). The Webb Lake stock is a felsic intrusion interpreted by Sage (1993, 1994) as a trondhjemite, but continues to be called a granodiorite in mine terminology and by mine geologists.
The long axis of the Webb Lake stock is parallel to the regional supracrustal rock stratigraphy (Sage, 1993; 1994). The Webb Lake stock is ENE-striking and has a steep northerly dip (Deevy, 1992 and 1994). Its surface expression is at least 1,800 m long and up to 300 m wide. The aureole rocks of the Webb Lake stock are predominately mafic volcanic rocks (Deevy, 1992 and 1994). The southern contact is quite linear and regular, consisting mostly of dark green mafic rocks. The northern contact is quite irregular and there is interfingering of granodiorite (trondhjemite) and aureole rocks. The granodiorite (trondhjemite) is medium- to coarse-grained, green- grey, moderately hard, non-magnetic and massive (Sutherland, 1987). It is locally foliated and hydrothermally altered, and has been affected by greenschist facies metamorphism. The granodiorite (trondhjemite) contains 5 to 10% veins of carbonate, quartz, tourmaline and pyrite in various orientations. Approximately 5% of the igneous rock contains healed faults and fractures, generally filled with chlorite and carbonate. They may correspond to the late, north trending, 45°-dipping, carbonate-filled faults observed underground (Sutherland, 1987).
Some lithologies occur within the granodiorite. In mine terminology, these are “felsites”, “mafics” and “intermediates” (Deevy, 1992 and 1994). “Grey felsite” is the oldest of the three and possibly predates gold mineralization. It is predominately a medium to dark grey aphanitic body about 0.30 to 1.20 m thick that can be traced from one end of the mine to the other. Grey felsite may not in fact be an intrusive in its own right, but rather cataclastized granodiorite (trondhjemite) (Deevy, 1992). “Pink felsite” and “brown felsite” postdate gold mineralization. They are both fine- grained rocks of quartz-feldspar porphyry composition. They vary from a few centimetres to 3.5 m wide and can be traced for a hundred metres or more both laterally and vertically.
The “mafics” may be either dykes or xenoliths. They are dark green in colour, generally strongly foliated, and are of similar composition to the aureole mafic rocks
Prodigy Gold Incorporated 7-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada (Deevy, 1992 and 1994). These mafic rafts or dykes are up to 6 m wide (Bourne et al., 1987). The “intermediates” are much more limited in extent and have the texture of a crystal tuff. They are probably true xenoliths within the granodiorite. Both the mafic and intermediate xenoliths/dykes pre-date gold mineralization (Deevy, 1992 and 1994). See Figure 7.4 below.
Figure 7.4 Geology of the Magino Mine Area
Source: adapted and modified from Sage 1990, 1993b, 1993c and 1993d
Several diabase dykes up to 12 m wide, of probable Keweenawan age, strike north- north west and cut all rock types (Bourne et al., 1987). Diamond drilling east of the diabase dyke marking the eastern limit of underground workings in the “old mine” indicates that the granodiorite(trondhjemite)-metavolcanic contact has been offset by approximately 50 ft (15 m), and that the dip of the contact at this location is vertical instead of 65° to the north as is found west of the dyke. Bourne et al. (1987) believe the diabase dyke intruded a pre-existing fault zone along which movement was mainly rotational in nature (sinistral displacement), which would explain both the apparent horizontal offset and the marked change in dip. The horizontal distance between mineralized zones across this structure exceeds that shown for the displacement of the stock’s margins on mine plans (Nielsen, 1997). This suggests that if displacement entirely post-dates mineralization, it must have been oblique, or alternatively, the zones on either side of the diabase are not related (Nielsen, 1997).
The granodiorite (trondhjemite) intrusion is cut by numerous shear zones related to the Goudreau Lake Deformation Zone and it is on these shear-hosted gold-bearing quartz veins that the Magino mine occurs (Sage, 1994). The portion of the intrusion north of the deformation zone hosts the gold mineralization and is more deformed than the southern portion. The Goudreau Lake Deformation Zone is a major contact
Prodigy Gold Incorporated 7-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada between Cycle 2 to the south and Cycle 3 to the north. In the Magino mine area, the Goudreau Lake Deformation Zone consists of a 070°-striking, ductile-brittle zone sub-parallel to dextral oblique-slip high-strain zones developed within strongly altered and deformed, felsic to intermediate metavolcanic rocks (Heather and Arias, 1992).
7.5 GOLD M INERALIZATION
Gold mineralization at the Magino gold mine occurs within the Webb Lake granodiorite (trondhjemite) stock. The Webb Lake stock underwent variable metasomatic alteration during deformation and gold mineralization (Heather and Arias, 1992). Distinct haloes of quartz-sericite-pyrite with minor iron-carbonate and hematite alteration are observed adjacent to the quartz vein systems. Alteration of the Webb Lake stock outside the gold-bearing zones is manifested by a chlorite- albite-quartz-tourmaline-calcite assemblage (Heather and Arias, 1992). Locally present within the stock are lenticular chlorite-schist zones that represent either strongly foliated mafic metavolcanic xenoliths or a chlorite-altered felsic intrusion (Heather and Arias, 1992).
Gold mineralization occurs in several sub-parallel high-strain zones striking 070° to 080° within the Webb Lake stock and within mafic metavolcanic rocks immediately along the northern margin of the stock (Heather and Arias, 1992). Deevy (1992 and 1994) distinguished and described two types of mineralized material shoots, namely “zones” and “veins”. The “zones” are usually 2 to 4.5 m wide and have a strike length of 25 to 70 m. They consist of foliated, bleached and silica-flooded granodiorite (trondhjemite). The zones are folded in places, which produces mineable widths of up to 10.5 m. The “zones” dip at about the same angle as the foliation and have a vertical plunge. The vertical continuity of the “zones” is at a vertical to horizontal ratio of 2.5:1 (Deevy, 1994). Weak bleaching and silica flooding are the distinguishing features of the “zones” (Deevy, 1994). Silica flooding consists of incipient pale gray quartz replacing the foliated granodiorite. Gold content is directly related to the amount of silica flooding (Deevy, 1994).
The “veins” consist of discrete pale grey to pale green to almost white quartz veins varying in width from a few to 45 cm. They have a strike length of several to 35 m. Gold values are distributed erratically within the veins, but overall grades are quite high. The veins are folded in places, with gold concentrated in the fold noses (Deevy, 1992 and 1994). Vertical continuity of the “veins” is similar to that of the “zones”, and the plunge is also vertical.
Native gold occurs in zones of pervasive silicification and in narrow (i.e., less than 1 to 20 cm wide) quartz veins that form complex systems 1 to 3 m wide. Gold occurs within both quartz veins and foliated and altered wall rocks, but the better gold grades are in the veins (1987 pers. comm. with T. Deevy, Magino mine geologist, as cited in Heather and Arias, 1992). Finely disseminated leaf-like visible gold was observed in numerous quartz veins in diamond drill cores and in drift backs on the second level (Koskitalo, 1983). The gold tends to form plates or leaves along
Prodigy Gold Incorporated 7-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada fractures in quartz rather than coarse nuggets. The quartz hosting the gold tends to be fine-grained and dull milky grey (Koskitalo, 1983). Up to 10% disseminated pyrite is also present, most commonly found in alteration haloes around the gold-bearing quartz veins (Heather and Arias, 1992). See Figure 7.5 below.
Figure 7.5 Historical G Zone in the 24+75E Drift
The granodiorite (trondhjemite) is sericitized, carbonatized, silicified and chloritized. Gold bearing quartz veins have diffuse boundaries. Photographed area is 50 cm across (from Sutherland, 1987). See Figure 7.6 below.
Prodigy Gold Incorporated 7-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 7.6 Gold Bearing Veins on the Face of the 23+80E Drift
Note: the vein spacing and sericite alteration selvage along the vein contact. Centre vein is 15 cm wide (from Sutherland, 1987).
7.6 STRUCTURES A SSOCIATED WITH G OLD M INERALIZATION
There is a strong structural control on the gold-bearing quartz vein system within the Webb Lake stock. The system consists of several main 070°- to 075°-striking high- strain zones, which in turn consist of subsidiary, parallel 070°- to 075°-striking mineralized zones (Heather and Aria, 1992). The zones are also parallel to the regional schistosity in this area, which strikes 070°. Individual quartz veins are localized within narrow, secondary, brittle-ductile shear fractures with the following documented attitudes and apparent horizontal displacements (Heather and Arias, 1992):
080° to 090° / 65°N, ductile, dextral (oblique-slip) 045° to 055° / 70°N, ductile (?).
A strongly developed foliation defined by elongated feldspar and aligned sericite has been observed wrapping asymptotically into the narrow shear fractures (Heather and Arias, 1992). These shear-fractures appear to splay off each other, with the 085° set being dominant. Surface outcrops show no obvious crosscutting relationships between these two sets of shear-fractures, suggesting synchronous development (Heather and Arias, 1992). Underground, however, it was reported by Magino’s mine geologist T. Deevy that the 055° set is part of a conjugate set of post-mineralized
Prodigy Gold Incorporated 7-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada material faults (1991 pers. comm. cited in Heather and Arias, 1992). Locally, the veins are better developed within the 085°-striking fracture set than in the 055° set. Some of the auriferous high-strain zones comprise two or more obliquely-oriented auriferous vein structures (e.g., the 070° striking high-strain zone containing 085°- and 050°-striking veins) (Heather and Arias, 1992).
Underground at the Magino mine, mine geologist T. Deevy noted that raise-mining on a single quartz vein structure revealed that the vein rolls from a dip of 80° to 60° and back to 80° over a vertical distance of roughly 15 m. He also noted that the best gold grades are found at the intersections between vein-bearing shear fractures with different orientations (1987 pers. comm. cited in Heather and Arias, 1992). The plunge of the Magino mineralization is sub-vertical and parallel to measured elongation lineations defined by stretched feldspar crystals (Heather and Arias, 1992).
The brittle-ductile shear fractures and associated veins are consistently off-set by a few centimetres along brittle fractures with the following attitudes and apparent horizontal displacements (Heather and Arias, 1992):
190° (010°) / 85°W, brittle, sinistral 310° (130°) 67°N, brittle, dextral.
North-striking late tourmaline-quartz veins cut both the Webb Lake stock and aforementioned gold-bearing quartz vein systems (Heather and Arias, 1992). Zones of intense tourmaline-quartz fracture-filling, flooding and brecciation are locally present within the Webb Lake stock. This late tourmaline-quartz mineralization uses the pre-existing fracture network in the rock. The tourmaline-quartz fracture-fillings and veins can contain anomalous gold values, especially where they cut an earlier gold-bearing quartz vein.
7.7 CURRENT V IEW ON M INERALIZATION C ONTROLS AND I DENTIFICATION OF M INERALIZED M ATERIAL Z ONES
The mineralization of the Magino mine is associated with varying amounts of alteration to the Webb Lake Stock. This variation is marked by five progressive levels of alteration/deformation described below. In general; alteration levels are marked by increasing amount of foliation, sericite alteration, silicification (veining, flooding, pervasive silicification) and pyrite mineralization. Carbonatization is also apparent, but it is poorly understood if variation from calcite to ankerite is associated with higher gold grades. In areas such as the northeast zone it is also suggested that the focus, or central and most highly altered portion of the ”zone” is associated with dolomite alteration, however this needs more study.
Prodigy Gold Incorporated 7-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Generally four levels of alteration to Webb Lake Stock ranodiorite are recognized, as follows:
1. Granodiorite: Relatively unaltered, coarse grained, equigranular quartz – plagioclase – chlorite +/- carbonate with typically more than 10% chlorite, network texture, no planar fabric is observed. 2. Weakly Altered Granodiorite: Weakly developed planar fabric (foliation) caused by the alignment of sericite/chlorite grains, unit is finer grained than “Network Granodiorite” however relict texture can still be interpreted. Quartz +/- carbonate +/- tourmaline veining varies from 1 to 2%, pyrite mineralization is elevated in places but generally less than 0.5%. 3. Moderately Altered Granodiorite: Well developed planar fabric (foliation) caused by alignment of sericite/chlorite grains which make up more than 20% of the rock. This planar sericite/chlorite alignment is referred to as “Sericite Lace”. Dependent on amount of chlorite this rock has a light green to light grey – grey colour. The unit is finer grained than weakly altered granodiorite, with rounded quartz crystals. Quartz +/- carbonate +/- tourmaline veining varies from 2 to 5%, pyrite mineralization is elevated in places but generally 0.5 to 1%. 4. Strongly Altered Granodiorite: Well developed planar fabric (foliation) caused by alignment of sericite/chlorite/quartz grains which make up more than 80% of the rock, the remaining constituent being quartz +/- carbonate +/- tourmaline veining. Visible gold is most commonly observed in this alteration, and the presence of visible gold is believed to be dependent on amount of smokey grey quartz veining/flooding (i.e. silica in the system at that locality). Gold bearing grey (altered) quartz veins are typically sub- parallel to foliation, millimetre-centimetre in scale with some five to ten grey quartz flooded zones. The rock has a green and more often a light tan – pink coloration, remnant intrusive texture is completely destroyed. Remnant quartz phenocrysts are often augen shape and appear isolated in the sericite matrix.
Visible gold is nearly always observed within silica (most typically small veinlets of smokey grey quartz). Gold emplacement within the moderate to strong altered zones is somewhat erratic due to the anastomosing nature of silica (quartz vein/flooding emplacement). As veins are typically less than 5 cm in thickness and pinch and swell in nature or are anastamosing, it is not realistic to model continuity amongst the individual veins. The more broadly altered zones which contain the erratic quartz units are more continuous in nature and can be modeled more readily.
The logging of the current Prodigy drill program is focussed on describing foliation, sericite alteration, silica (quartz veining), pyrite mineralization and Visible Gold (VG) mineralization.
It is understood that historic logging and some mapping of the Magino deposit was focused on identifying several ”types” (or compositional phases) of granodiorite. It is
Prodigy Gold Incorporated 7-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada because of this interpretation, that Prodigy’s geologists believe the past geological interpretation was forced into a model where the central portion of the stock was considered a more mafic ‘phase’ and then there were ring shaped outer phases, with a more felsic (and more calcic trondjhemite) phase along the contacts. Prodigy’s interpretation consists of sigmoidal cross-cutting zones which are folded (drag) in places and offset. To some extent, the historic phases were described similarly to the varying amounts of alteration/deformation that are now observed, however the phases were described primarily utilizing compositional differences, ignoring most alteration/deformation variations, and so the historic geologic logging data is not as useful for modelling, beyond the use for general lithology (i.e. granodiorite or metavolcanic).
Prodigy Gold Incorporated 7-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 8.0 DEPOSIT TYPES
Lode gold deposits (gold from bedrock sources: see Figure 8.1) occur dominantly in terranes with an abundance of volcanic and clastic sedimentary rocks of low to medium metamorphic grade (Poulsen, 1996). The Magino mine is an orogenic gold occurrence related to longitudinal shear zones (greenstone-hosted quartz-carbonate vein deposit). Greenstone-hosted quartz-carbonate vein deposits are a subtype of lode-gold deposits (Poulsen et al., 2000). They correspond to structurally controlled, complex epigenetic deposits hosted in deformed metamorphosed terranes (Dubé and Gosselin, 2007).
Figure 8.1 Schematic Diagram Illustrating the Inferred Crustal Levels of Gold Deposition
Source: Dubé et al., 2001; Poulsen et al., 2000
Prodigy Gold Incorporated 8-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Greenstone-hosted quartz-carbonate vein deposits consist of simple to complex networks of gold-bearing, laminated quartz-carbonate fault-fill veins in moderately to steeply dipping, compressional brittle-ductile shear zones and faults with locally associated shallow-dipping extensional veins and hydrothermal breccias. They are hosted by greenschist to locally amphibolite-facies metamorphic rocks of dominantly mafic composition and formed at intermediate depth in the crust (5 to 10 km). They are distributed along major compressional to transtensional crustal-scale fault zones in deformed greenstone terranes of all ages, but are more abundant and significant, in terms of total gold content, in Archean terranes. Greenstone hosted quartz- carbonate veins are thought to represent a major component of the greenstone deposit clan (Figure 8.1) (Dubé and Gosselin, 2007). They can co-exist regionally with iron-formation-hosted vein and disseminated deposits, as well as with turbidite- hosted quartz-carbonate vein deposits (Figure 8.2).
Figure 8.2 Schematic Diagram Illustrating the Setting of Greenstone-Hosted Quartz Carbonate Vein Deposits
Source: Poulsen et al., 2000
The main gangue minerals are quartz and carbonate, with variable amounts of white micas, chlorite, scheelite and tourmaline. The sulphide minerals typically constitute less than 10% of the ore. The main ore minerals are native gold with pyrite, pyrrhotite and chalcopyrite without significant vertical zoning (Dubé and Gosselin, 2007).
The Magino gold deposit lies within the Goudreau Lake Deformation Zone, a major contact between Cycle 2 felsic to intermediate pyroclastic metavolcanic rocks to the south and Cycle 3 massive pillowed mafic metavolcanic rocks to the north (Heather and Arias, 1992). The Goudreau Lake Deformation Zone appears to be spatially related to a large, regionally mappable intrusive sheet. This rigid meta-intrusive body deformed in a brittle manner relative to the enclosing mafic metavolcanic rocks, thus
Prodigy Gold Incorporated 8-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada acting as a competency contrast and thereby focusing the strain and associated mineralization (Heather and Arias, 1992).
In the Magino gold deposit area, the Goudreau Lake Deformation Zone (Figure 8.3) is characterized as a 1- to 2-km wide, 070°-striking zone of subparallel ductile and brittle-ductile high-strain zones (Heather and Arias, 1992). Gold mineralization occurs in these high-strain zones.
At the regional scale, there is no readily discernible alteration pattern directly related to gold mineralization. However, rocks within the Goudreau Lake Deformation Zone are slightly more altered relative to the rest of the supracrustal rocks in the Michipicoten Greenstone Belt. This suggests that hydrothermal fluids were preferentially focused into regional deformation zones (Heather and Arias, 1992).
Regionally, two types of gold mineralization have been recognized in the Magino gold mine area (Heather and Arias, 1992): (1) quartz veins hosted by brittle and brittle-ductile high strain zones; (2) brittle fault-hosted breccia-style mineralization.
Figure 8.3 Location of the Goudreau Lake Deformation Zone
Source: adapted and modified from Heather and Arias, 1992
Prodigy Gold Incorporated 8-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 9.0 EXPLORATION
In August 2010, Kodiak announced an agreement with Golden Goose to evaluate the Magino gold property.
Since that announcement, Kodiak has conducted a review of the geological and exploration data, and recompiled the drillhole and assay database in metric units. In addition, Kodiak has undertaken sampling of previously un-sampled intervals of drill core from the 2006 program, and submitted these for assaying at independent analytical laboratories.
The intervals of core that had been previously sampled by Golden Goose were visually mineralized and/or altered and interpreted as vein structures that might be amenable to underground mining. The intervening altered intervals were regarded as disseminated mineralization, and were not the focus of Golden Goose’s recent program. They remained un-sampled.
In response to higher prevailing gold prices in 2010, Kodiak considered that Magino’s disseminated mineralization meant the Project could be evaluated as an open-pit mine.
In addition to the further sampling on existing drill core, Prodigy has conducted surface diamond core drilling throughout 2011 and this program is described in Section 10.0.
Details of pre-Prodigy exploration other than drilling undertaken at the Magino property are presented in Section 6.0.
9.1 GOULD G OLD P ROPERTY
The Gould gold property covers an extensive sequence of gabbroic intrusive and metavolcanic rocks along a prospective structural trend that is parallel to the Magino gold deposit. There is no information from this property contained in the database that was provided to Snowden.
Prodigy Gold Incorporated 9-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 10.0 DRILLING
Prodigy commenced an in-fill drilling program at Magino in January 2011. Assays from the drilling conducted from January 2011 until approximately mid-September 2011 are included in the mineral resource estimate reported in this report. Assays from drilling undertaken by Prodigy after mid-September 2011 have not been included in the updated resource report. Details of pre-Prodigy drilling are provided in Section 6.0.
10.1 PRODIGY D RILLING
10.1.1 TYPE AND EXTENT
In late 2010, Prodigy designed a 20,000 m diamond core drilling program on the wholly-owned Magino mine property. The drilling program, designed to in-fill and expand the existing resource, started on January 4, 2011. In May 2011, Prodigy announced a doubling of the drill program to approximately 45,000 m. The program was carried out by various rigs from two contractors: Northstar Drilling, who completed 42 drillholes, and Discovery Drilling, who completed 85 drillholes by mid- September.
Information used in the resource estimate update includes 29,755.84 m of drilling from 127 Prodigy drillholes. Core diameters are: HQ in five holes; NQ in 81 holes; and NQ2 in 41 holes.
The drill rigs are conventional wireline machines operated by experienced drilling companies. Due to the proximity of underground workings several holes were commenced as HQ diameter and were reduced to NQ diameter on intersecting the workings. Details of the Prodigy drillholes are provided in Table 10.1.
Table 10.1 Prodigy Drilling Details
Minimum Maximum Average Item Total (m) (m) (m) Number of drillholes 127 50 length 710 length 234 length Collar easting - 688171 east 689375 east - Collar northing - 53508541 north 535081643 north - Collar elevation - 388 RL 406 RL - Note: RL = reduced level
Prodigy Gold Incorporated 10-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 10.1.2 PROCEDURES FOLLOWED
Drillholes are located and set-up so that, as much as possible, the drillholes are perpendicular to the strike and dip of the mineralized zones at Magino. Drillhole collar locations are surveyed to 1 cm accuracy using digital global positioning system (DGPS) instruments, and drillhole paths are typically surveyed at 3 m intervals using a multishot instrument. Eighteen drillhole paths were surveyed at intervals of 20 to 50 m using a single shot instrument, and three drillhole paths remained unsurveyed.
Drill core at Magino is boxed, covered, and sealed at the drill rig and moved to the Prodigy logging and sample preparation facilities by Prodigy personnel. The core is then split down the centre using a typical table fed circular rock saw normally at one- metre intervals.
Core from this drilling is currently stored next to the company’s core shed facilities north of the town of Dubreuilville, Ontario.
10.1.3 RELEVANT RESULTS
Results from Prodigy’s core drilling program were reported in five news releases during 2011 (May 18, June 20, August 4, August 30 and September 27).
Table 10.2 provides a summary of mineralization intercepts from Prodigy’s drilling program. The records are composited intervals where the cut-off grade is 0.35 g/t Au over a minimum length of 5 m. Composited intervals can include up to 5 m of assays below 0.35 g/t Au. The estimated true thickness reflects 76% of the downhole drill length.
Table 10.2 Prodigy Drillhole Mineralization Intersect Results
Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-001 68.0 73.6 5.6 4.3 0.31 MA11-001 82.8 115.0 32.2 24.5 0.35 MA11-001 127.9 197.7 69.8 53.0 0.88 MA11-001 204.0 212.0 8.0 6.1 0.45 MA11-001 218.0 229.0 11.0 8.4 0.43 MA11-001 250.0 260.0 10.0 7.6 0.55 MA11-001 267.0 272.0 5.0 3.8 0.52 MA11-001 282.0 294.4 12.4 9.4 1.05 MA11-001 301.0 318.3 17.3 13.1 0.35 MA11-001 338.2 359.0 20.8 15.8 1.15 MA11-001 365.0 401.0 36.0 27.4 1.11 MA11-001 470.0 479.0 9.0 6.8 2.26 table continues…
Prodigy Gold Incorporated 10-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-001 485.0 490.0 5.0 3.8 0.64 MA11-002 0.0 0.0 0.0 0.0 0.00 MA11-003 128.0 145.0 17.0 12.9 1.68 MA11-003 163.0 175.0 12.0 9.1 0.81 MA11-003 182.0 223.0 41.0 31.2 1.52 MA11-003 230.0 240.0 10.0 7.6 0.30 MA11-003 312.0 321.0 9.0 6.8 0.60 MA11-004 125.0 228.0 103.0 78.3 2.09 MA11-004 237.0 248.0 11.0 8.4 0.50 MA11-004 255.0 272.4 17.4 13.2 1.10 MA11-004 306.6 317.0 10.4 7.9 27.14 MA11-004 334.0 340.0 6.0 4.6 1.70 MA11-004 511.0 526.0 15.0 11.4 0.32 MA11-004 545.0 558.0 13.0 9.9 0.48 MA11-004 572.0 594.0 22.0 16.7 0.39 MA11-004 610.0 623.0 13.0 9.9 2.99 MA11-004 635.0 655.0 20.0 15.2 0.45 MA11-004 681.0 703.0 22.0 16.7 2.00 MA11-005 113.0 122.0 9.0 6.8 0.20 MA11-005 156.0 161.0 5.0 3.8 1.20 MA11-005 171.0 176.0 5.0 3.8 0.69 MA11-005 201.0 207.4 6.4 4.8 1.32 MA11-005 226.0 241.0 15.0 11.4 0.40 MA11-005 252.0 259.0 7.0 5.3 1.48 MA11-005 265.0 274.0 9.0 6.8 0.61 MA11-005 321.0 331.0 10.0 7.6 6.92 MA11-005 362.0 409.0 47.0 35.7 1.49 MA11-006 131.0 244.7 113.7 86.4 1.69 MA11-006 259.0 266.0 7.0 5.3 0.46 MA11-006 295.0 301.0 6.0 4.6 1.87 MA11-006 404.0 426.0 22.0 16.7 0.35 MA11-006 446.0 459.0 13.0 9.9 0.38 MA11-006 594.0 603.0 9.0 6.8 0.90 MA11-006 614.0 634.0 20.0 15.2 0.63 MA11-006 640.0 652.0 11.0 8.4 0.76 MA11-007 79.0 86.0 7.0 5.3 1.00 MA11-007 121.0 145.0 24.0 18.2 0.50 MA11-007 153.0 158.0 5.0 3.8 0.43 MA11-007 168.0 173.0 5.0 3.8 7.94 MA11-007 208.0 238.0 30.0 22.8 0.57 table continues…
Prodigy Gold Incorporated 10-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-007 255.0 260.0 5.0 3.8 0.43 MA11-007 285.0 290.0 5.0 3.8 2.37 MA11-007 320.8 328.0 7.2 5.5 0.21 MA11-007 366.0 372.0 6.0 4.6 5.23 MA11-008 48.0 62.0 14.0 10.6 0.58 MA11-008 71.0 90.0 19.0 14.4 1.16 MA11-008 106.0 131.0 25.0 19.0 0.81 MA11-008 164.0 169.0 5.0 3.8 0.35 MA11-008 219.0 232.0 13.0 9.9 0.72 MA11-008 244.5 252.0 7.5 5.7 0.34 MA11-008 306.0 334.0 28.0 21.3 2.05 MA11-008 363.0 369.0 6.0 4.6 0.47 MA11-008 385.0 412.0 27.0 20.5 0.45 MA11-008 422.0 429.0 7.0 5.3 0.19 MA11-008 439.0 451.0 12.0 9.1 1.55 MA11-008 458.0 470.0 12.0 9.1 0.44 MA11-008 477.0 508.0 31.0 23.6 0.78 MA11-008 538.0 560.9 22.9 17.4 2.35 MA11-008 575.0 591.0 16.0 12.2 1.06 MA11-008 600.7 612.0 11.4 8.6 0.82 MA11-008 629.0 635.0 6.0 4.6 0.21 MA11-008 643.0 654.0 11.0 8.4 1.03 MA11-009 30.4 36.0 5.6 4.3 0.97 MA11-009 104.0 122.0 18.0 13.7 0.41 MA11-009 138.0 181.0 43.0 32.7 0.74 MA11-009 187.0 198.0 11.0 8.4 2.22 MA11-009 239.0 312.0 73.0 55.5 1.30 MA11-009 319.0 326.0 7.0 5.3 2.11 MA11-009 333.0 338.0 5.0 3.8 0.82 MA11-009 348.0 370.0 22.0 16.7 0.50 MA11-009 401.0 420.0 19.0 14.4 2.31 MA11-009 465.0 477.0 12.0 9.1 0.20 MA11-009 505.0 513.0 8.0 6.1 1.09 MA11-010 45.0 55.0 10.0 7.6 0.26 MA11-010 78.0 93.0 15.0 11.4 0.17 MA11-010 118.0 127.0 9.0 6.8 0.84 MA11-010 163.0 173.0 10.0 7.6 0.58 MA11-010 184.0 211.0 27.0 20.5 1.78 MA11-010 225.0 235.0 10.0 7.6 0.34 MA11-010 270.0 280.0 10.0 7.6 0.33 table continues…
Prodigy Gold Incorporated 10-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-011 9.0 18.0 9.0 6.8 0.33 MA11-011 37.0 45.0 8.0 6.1 0.33 MA11-012 20.0 26.0 6.0 4.6 0.45 MA11-012 49.0 65.0 16.0 12.2 2.88 MA11-012 86.0 99.0 13.0 9.9 0.60 MA11-012 105.9 125.0 19.1 14.5 1.43 MA11-012 133.0 143.3 10.3 7.8 3.02 MA11-012 164.0 194.0 30.0 22.8 0.79 MA11-013 50.0 55.0 5.0 3.8 5.57 MA11-013 61.0 80.0 19.0 14.4 0.35 MA11-013 92.0 100.0 8.0 6.1 1.59 MA11-014 31.0 39.0 8.0 6.1 1.11 MA11-014 56.0 82.0 26.0 19.8 1.88 MA11-014 89.0 98.0 9.0 6.8 0.41 MA11-014 106.0 123.0 17.0 12.9 0.43 MA11-014 136.0 143.0 7.0 5.3 5.87 MA11-015 20.0 61.0 41.0 31.2 0.60 MA11-016 11.0 16.0 5.0 3.8 0.39 MA11-016 50.0 66.0 16.0 12.2 0.73 MA11-016 80.0 86.0 6.0 4.6 0.38 MA11-016 101.0 109.0 8.0 6.1 0.74 MA11-016 129.0 154.0 25.0 19.0 0.49 MA11-016 162.0 170.0 8.0 6.1 0.47 MA11-016 182.0 191.0 9.0 6.8 2.86 MA11-017 9.0 19.0 10.0 7.6 2.25 MA11-017 29.0 36.0 7.0 5.3 2.59 MA11-017 42.0 65.0 23.0 17.5 0.71 MA11-017 79.0 86.0 7.0 5.3 0.62 MA11-018 36.0 45.0 9.0 6.8 0.41 MA11-018 54.0 61.0 7.0 5.3 0.75 MA11-018 76.0 98.0 22.0 16.7 0.63 MA11-018 107.0 117.0 10.0 7.6 0.38 MA11-018 179.0 198.0 19.0 14.4 0.95 MA11-018 204.0 218.0 14.0 10.6 0.33 MA11-018 236.0 248.0 12.0 9.1 0.52 MA11-018 374.0 386.0 12.0 9.1 2.36 MA11-019 29.0 45.0 16.0 12.2 0.52 MA11-019 88.0 104.0 16.0 12.2 1.16 MA11-020 189.0 201.0 12.0 9.1 0.57 MA11-020 230.0 259.0 29.0 22.0 0.51 table continues…
Prodigy Gold Incorporated 10-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-020 266.0 279.0 13.0 9.9 2.04 MA11-020 299.0 308.0 9.0 6.8 0.60 MA11-021 6.2 26.0 19.8 15.0 4.44 MA11-022 26.0 69.0 43.0 32.7 0.81 MA11-022 76.0 87.0 11.0 8.4 0.68 MA11-023 249.0 255.0 6.0 4.6 1.59 MA11-023 282.0 294.0 12.0 9.1 0.99 MA11-023 387.0 402.0 15.0 11.4 0.56 MA11-023 416.0 431.0 15.0 11.4 0.49 MA11-024 20.0 37.0 17.0 12.9 0.61 MA11-024 49.0 54.0 5.0 3.8 3.70 MA11-024 75.0 104.0 29.0 22.0 0.96 MA11-024 118.0 124.0 6.0 4.6 1.06 MA11-025 15.0 24.0 9.0 6.8 1.94 MA11-025 40.0 48.0 8.0 6.1 0.27 MA11-025 66.0 83.0 17.0 12.9 0.42 MA11-025 104.0 111.0 7.0 5.3 2.42 MA11-025 121.0 135.0 14.0 10.6 1.38 MA11-025 186.0 193.0 7.0 5.3 0.25 MA11-026 12.0 20.0 8.0 6.1 1.30 MA11-026 26.0 59.0 32.0 24.3 1.05 MA11-026 77.0 89.0 12.0 9.1 1.10 MA11-027 20.0 32.0 12.0 9.1 0.34 MA11-027 64.0 85.0 21.0 16.0 0.49 MA11-027 98.0 104.0 6.0 4.6 2.80 MA11-027 114.0 132.0 18.0 13.7 0.82 MA11-027 144.0 160.0 16.0 12.2 0.57 MA11-028 77.0 97.0 20.0 15.2 0.62 MA11-028 115.7 127.0 11.4 8.6 0.50 MA11-028 136.0 150.0 14.0 10.6 0.54 MA11-028 156.0 164.0 8.0 6.1 0.22 MA11-028 170.0 196.0 26.0 19.8 0.87 MA11-028 213.0 225.5 12.5 9.5 0.42 MA11-029 0.0 0.0 0.0 0.0 0.00 MA11-030 16.0 21.0 5.0 3.8 2.33 MA11-030 32.2 38.0 5.8 4.4 0.82 MA11-030 46.0 53.0 7.0 5.3 0.42 MA11-030 169.0 176.0 7.0 5.3 4.96 MA11-030 183.0 193.0 10.0 7.6 1.55 MA11-030 200.0 208.0 8.0 6.1 0.70 table continues…
Prodigy Gold Incorporated 10-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-031 71.0 77.0 6.0 4.6 0.35 MA11-031 90.0 100.0 10.0 7.6 0.31 MA11-032 4.6 32.0 27.4 20.8 0.88 MA11-032 38.0 72.0 34.0 25.8 0.63 MA11-033 11.0 16.0 5.0 3.8 0.19 MA11-034 37.0 54.0 17.0 12.9 0.80 MA11-034 84.0 91.3 7.3 5.5 0.73 MA11-034 105.0 136.0 31.0 23.6 1.19 MA11-035 0.0 0.0 0.0 0.0 0.00 MA11-036 60.0 65.0 5.0 3.8 0.34 MA11-036 120.0 125.0 5.0 3.8 0.42 MA11-036 160.7 179.0 18.4 13.9 0.46 MA11-036 187.0 194.0 7.0 5.3 2.02 MA11-036 217.7 228.0 10.3 7.8 0.34 MA11-037 13.1 31.0 17.9 13.6 0.75 MA11-037 54.0 94.0 40.0 30.4 1.10 MA11-038 32.0 44.0 12.1 9.2 0.51 MA11-039 21.0 28.0 7.0 5.3 0.54 MA11-039 35.0 54.0 19.0 14.4 0.32 MA11-039 71.0 78.0 7.0 5.3 0.66 MA11-039 88.0 94.0 6.0 4.6 0.26 MA11-039 112.0 135.0 23.0 17.5 0.56 MA11-039 159.0 167.0 8.0 6.1 0.39 MA11-039 187.0 194.0 7.0 5.3 0.39 MA11-039 205.0 211.0 6.0 4.6 0.76 MA11-039 250.0 258.0 8.0 6.1 0.29 MA11-039 313.8 324.0 10.3 7.8 0.30 MA11-040 34.0 41.0 7.0 5.3 0.21 MA11-040 106.0 117.0 11.0 8.4 0.63 MA11-040 166.0 181.0 15.0 11.4 0.49 MA11-040 188.0 223.0 35.0 26.6 1.23 MA11-041 21.0 51.0 30.0 22.8 1.57 MA11-041 68.0 78.0 10.0 7.6 0.16 MA11-041 86.0 104.0 18.0 13.7 1.08 MA11-042 6.0 13.0 7.0 5.3 0.36 MA11-042 21.0 45.0 24.0 18.2 0.79 MA11-042 53.0 97.0 44.0 33.4 1.56 MA11-042 123.0 137.0 14.0 10.6 2.71 MA11-043 30.3 51.0 20.7 15.7 0.42 MA11-043 81.0 100.0 19.0 14.4 0.47 table continues…
Prodigy Gold Incorporated 10-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-043 118.0 128.0 10.0 7.6 0.74 MA11-043 147.0 157.0 10.0 7.6 0.62 MA11-043 166.0 171.0 5.0 3.8 0.39 MA11-043 182.0 188.0 6.0 4.6 0.37 MA11-043 197.0 219.0 22.0 16.7 0.79 MA11-043 225.0 230.0 5.0 3.8 0.99 MA11-043 236.0 255.0 19.0 14.4 0.70 MA11-044 10.0 38.0 28.0 21.3 0.60 MA11-044 44.0 54.0 10.0 7.6 0.47 MA11-045 14.0 51.0 37.0 28.1 0.42 MA11-045 61.0 66.7 5.7 4.3 4.07 MA11-045 72.0 97.0 25.0 19.0 0.47 MA11-045 108.0 113.0 5.0 3.8 0.79 MA11-045 140.0 146.0 6.0 4.6 0.24 MA11-046 18.0 24.0 6.0 4.6 0.21 MA11-046 61.0 85.0 24.0 18.2 0.62 MA11-046 91.0 130.0 39.0 29.6 0.59 MA11-046 136.0 143.0 7.0 5.3 0.37 MA11-047 20.0 35.0 15.0 11.4 0.40 MA11-048 15.0 46.0 31.0 23.6 0.49 MA11-048 55.0 72.0 17.0 12.9 0.51 MA11-049 65.0 77.0 12.0 9.1 3.85 MA11-049 84.0 91.0 7.0 5.3 1.47 MA11-049 98.0 106.0 8.0 6.1 0.35 MA11-049 129.0 159.0 30.0 22.8 0.88 MA11-050 59.0 74.0 15.0 11.4 0.39 MA11-050 140.0 187.0 47.0 35.7 0.55 MA11-050 211.5 247.0 35.5 27.0 0.43 MA11-050 270.0 292.0 22.0 16.7 0.75 MA11-050 298.0 330.0 32.0 24.3 0.70 MA11-050 340.0 349.0 9.0 6.8 1.16 MA11-050 357.0 365.0 8.0 6.1 0.83 MA11-050 376.0 383.0 7.0 5.3 0.57 MA11-051 24.0 35.0 11.0 8.4 0.39 MA11-051 75.0 80.0 5.0 3.8 0.40 MA11-051 99.0 120.0 21.0 16.0 0.39 MA11-051 141.0 148.0 7.0 5.3 0.58 MA11-051 201.0 212.0 11.0 8.4 0.80 MA11-051 229.0 238.0 9.0 6.8 0.31 MA11-051 253.0 258.0 5.0 3.8 0.53 table continues…
Prodigy Gold Incorporated 10-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-052 23.0 37.0 14.0 10.6 1.35 MA11-052 53.0 61.0 8.0 6.1 0.37 MA11-053 35.0 45.0 10.0 7.6 0.73 MA11-053 70.0 76.0 6.0 4.6 0.18 MA11-053 84.0 104.0 20.0 15.2 0.54 MA11-054 26.0 70.0 44.0 33.4 1.19 MA11-054 79.0 120.0 41.0 31.2 0.52 MA11-055 69.0 74.0 5.0 3.8 1.78 MA11-055 116.0 196.0 80.0 60.8 1.46 MA11-055 211.0 222.0 11.0 8.4 0.64 MA11-055 246.0 277.0 31.0 23.6 2.58 MA11-056 31.6 98.0 66.4 50.5 1.41 MA11-056 120.0 130.0 10.0 7.6 0.59 MA11-057 118.0 123.0 5.0 3.8 0.20 MA11-057 146.0 158.0 12.0 9.1 0.27 MA11-057 167.0 182.0 15.0 11.4 1.38 MA11-057 199.0 208.0 9.0 6.8 1.51 MA11-057 214.0 234.0 20.0 15.2 0.27 MA11-057 250.0 294.0 44.0 33.4 1.31 MA11-057 310.0 316.0 6.0 4.6 0.31 MA11-057 325.0 338.0 13.0 9.9 0.55 MA11-058 5.0 10.0 5.0 3.8 3.02 MA11-058 17.0 28.0 11.0 8.4 0.36 MA11-059 5.0 33.0 28.0 21.3 0.38 MA11-059 53.0 79.4 24.0 18.2 1.20 MA11-060 20.0 60.0 40.0 30.4 1.19 MA11-060 87.0 92.0 5.0 3.8 1.04 MA11-060 99.0 107.0 8.0 6.1 1.06 MA11-060 113.0 128.0 15.0 11.4 0.46 MA11-061 8.4 16.3 7.9 6.0 1.23 MA11-061 41.5 50.9 9.4 7.1 0.59 MA11-061 59.0 70.0 11.0 8.4 0.35 MA11-061 78.0 86.0 8.0 6.1 0.36 MA11-061 99.0 149.0 50.0 38.0 1.08 MA11-061 163.0 168.0 5.0 3.8 0.43 MA11-061 184.0 192.0 8.0 6.1 2.20 MA11-061 277.0 296.0 19.0 14.4 0.49 MA11-061 340.0 346.0 6.0 4.6 3.18 MA11-061 363.0 377.0 14.0 10.6 0.54 MA11-061 383.0 388.0 5.0 3.8 0.29 table continues…
Prodigy Gold Incorporated 10-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-061 394.0 400.0 6.0 4.6 1.87 MA11-062 22.0 32.0 10.0 7.6 0.46 MA11-062 43.0 64.0 21.0 16.0 0.62 MA11-062 73.0 85.0 12.0 9.1 0.73 MA11-063 71.1 77.0 5.9 4.5 1.58 MA11-063 118.0 142.0 24.0 18.2 1.08 MA11-063 165.0 189.0 24.0 18.2 1.15 MA11-064 9.2 27.0 17.9 13.6 0.59 MA11-064 54.0 63.0 9.0 6.8 0.97 MA11-064 109.0 128.0 19.0 14.4 0.73 MA11-064 175.0 190.0 15.0 11.4 2.96 MA11-065 45.0 77.0 32.0 24.3 0.55 MA11-065 96.0 112.0 16.0 12.2 0.36 MA11-065 141.0 169.0 28.0 21.3 0.33 MA11-066 29.0 34.0 5.0 3.8 2.63 MA11-067 0.0 0.0 0.0 0.0 0.00 MA11-068 12.5 30.0 17.5 13.3 0.28 MA11-068 93.0 98.0 5.0 3.8 2.04 MA11-069 12.0 21.0 9.0 6.8 1.36 MA11-069 47.0 59.0 12.0 9.1 0.46 MA11-069 74.0 87.9 13.9 10.6 0.74 MA11-069 94.0 99.0 5.0 3.8 3.19 MA11-070 21.0 30.0 9.0 6.8 2.15 MA11-070 43.0 54.0 11.0 8.4 1.41 MA11-070 78.0 94.0 16.0 12.2 0.56 MA11-071 24.0 67.0 43.0 32.7 0.46 MA11-072 52.0 59.0 7.0 5.3 0.71 MA11-072 97.0 102.0 5.0 3.8 0.90 MA11-072 109.0 137.0 28.0 21.3 0.76 MA11-073 113.0 120.0 7.0 5.3 0.23 MA11-073 137.5 161.0 23.5 17.9 0.63 MA11-073 190.0 207.0 17.0 12.9 0.77 MA11-073 219.0 226.0 7.0 5.3 0.35 MA11-073 233.0 243.0 10.0 7.6 0.99 MA11-073 250.0 280.0 30.0 22.8 1.80 MA11-074 51.0 67.0 16.0 12.2 0.69 MA11-074 116.0 148.0 32.0 24.3 0.86 MA11-074 167.0 175.0 8.0 6.1 1.83 MA11-075 43.0 77.0 34.0 25.8 0.66 MA11-076 5.5 17.0 11.5 8.7 0.58 table continues…
Prodigy Gold Incorporated 10-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-076 41.0 52.0 11.0 8.4 0.68 MA11-076 69.0 98.0 29.0 22.0 0.37 MA11-076 104.0 116.0 12.0 9.1 0.42 MA11-076 132.0 137.0 5.0 3.8 1.17 MA11-077 70.0 76.8 6.8 5.1 0.37 MA11-077 82.9 96.0 13.2 10.0 0.31 MA11-077 105.0 124.0 19.0 14.4 0.33 MA11-077 144.0 201.0 57.0 43.3 1.33 MA11-077 261.0 271.0 10.0 7.6 0.87 MA11-077 290.0 295.8 5.8 4.4 0.19 MA11-078 26.0 104.0 78.0 59.3 0.94 MA11-078 142.0 157.0 15.0 11.4 0.33 MA11-078 166.0 181.0 15.0 11.4 0.46 MA11-078 188.0 203.0 15.0 11.4 1.35 MA11-078 253.0 261.0 8.0 6.1 0.41 MA11-078 278.0 288.0 10.0 7.6 0.25 MA11-078 323.0 336.0 13.0 9.9 0.38 MA11-078 352.0 359.0 7.0 5.3 0.25 MA11-078 378.0 385.0 7.0 5.3 0.83 MA11-079 21.0 73.0 52.0 39.5 0.64 MA11-080 14.0 50.0 36.0 27.4 1.55 MA11-081 106.0 132.0 26.0 19.8 0.63 MA11-081 154.0 161.0 7.0 5.3 0.29 MA11-081 173.0 182.0 9.0 6.8 0.29 MA11-081 203.0 221.0 18.0 13.7 2.01 MA11-081 227.0 254.0 27.0 20.5 1.90 MA11-081 328.0 335.0 7.0 5.3 1.78 MA11-082 15.0 31.0 15.0 11.4 0.66 MA11-082 50.0 58.0 7.0 5.3 0.60 MA11-082 119.0 146.0 25.0 19.0 0.30 MA11-082 166.0 174.0 8.0 6.1 6.31 MA11-082 180.0 192.0 12.0 9.1 0.55 MA11-082 225.0 236.0 8.0 6.1 1.07 MA11-082 311.0 320.0 9.0 6.8 1.12 MA11-083 166.0 234.0 68.0 51.7 1.88 MA11-083 257.0 325.0 68.0 51.7 0.69 MA11-083 436.0 453.0 17.0 12.9 1.47 MA11-084 25.0 57.0 32.0 24.3 0.52 MA11-084 65.0 79.0 14.0 10.6 1.13 MA11-084 93.0 138.0 45.0 34.2 0.78 table continues…
Prodigy Gold Incorporated 10-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-084 175.0 183.0 8.0 6.1 0.46 MA11-084 205.0 211.0 5.0 3.8 0.27 MA11-085 31.0 46.0 15.0 11.4 0.44 MA11-086 11.0 24.0 13.0 9.9 0.65 MA11-087 22.0 28.0 6.0 4.6 0.76 MA11-087 66.0 71.0 5.0 3.8 0.25 MA11-087 77.0 87.0 10.0 7.6 0.36 MA11-088 53.0 58.0 5.0 3.8 0.44 MA11-088 83.0 106.7 23.7 18.0 0.32 MA11-088 121.0 129.0 8.0 6.1 0.26 MA11-088 146.0 151.0 5.0 3.8 8.47 MA11-088 167.3 175.0 7.7 5.9 0.83 MA11-088 192.0 200.0 8.0 6.1 3.63 MA11-088 237.0 247.0 10.0 7.6 0.45 MA11-088 271.0 281.0 10.0 7.6 0.45 MA11-089 34.0 98.0 64.0 48.6 0.66 MA11-089 121.0 126.0 5.0 3.8 0.42 MA11-089 139.0 155.0 16.0 12.2 1.20 MA11-089 168.0 173.0 5.0 3.8 0.39 MA11-089 191.3 197.0 5.7 4.3 4.11 MA11-089 226.0 246.0 20.0 15.2 0.67 MA11-089 260.0 269.0 9.0 6.8 0.30 MA11-090 37.0 50.0 13.0 9.9 1.17 MA11-090 96.0 103.0 7.0 5.3 0.41 MA11-090 111.0 125.0 14.0 10.6 0.66 MA11-090 175.0 231.0 56.0 42.6 0.49 MA11-090 241.0 247.0 6.0 4.6 1.29 MA11-091 71.0 85.0 14.0 10.6 1.67 MA11-091 91.0 98.0 7.0 5.3 0.46 MA11-091 107.0 150.0 43.0 32.7 0.37 MA11-091 158.0 166.0 8.0 6.1 0.60 MA11-091 177.0 209.0 32.0 24.3 1.05 MA11-091 224.0 302.0 77.0 58.5 1.14 MA11-091 386.0 393.0 7.0 5.3 0.26 MA11-091 413.0 420.0 7.0 5.3 0.49 MA11-092 57.0 64.0 7.0 5.3 0.33 MA11-092 78.0 99.0 21.0 16.0 1.10 MA11-092 192.0 200.0 8.0 6.1 0.25 MA11-092 207.0 213.0 6.0 4.6 1.29 MA11-092 222.0 270.0 48.0 36.5 0.80 table continues…
Prodigy Gold Incorporated 10-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-092 298.0 303.0 5.0 3.8 3.73 MA11-092 311.0 318.0 7.0 5.3 0.19 MA11-093 18.0 42.0 24.0 18.2 0.27 MA11-093 51.0 63.5 12.5 9.5 0.51 MA11-093 87.0 111.0 24.0 18.2 0.50 MA11-093 144.0 156.0 12.0 9.1 0.22 MA11-093 239.0 254.0 15.0 11.4 7.68 MA11-094 75.0 97.0 22.0 16.7 1.35 MA11-094 168.0 176.0 8.0 6.1 0.78 MA11-094 187.0 208.0 21.0 16.0 0.46 MA11-094 218.0 227.0 9.0 6.8 0.42 MA11-094 233.0 254.0 19.0 14.4 1.09 MA11-094 285.0 296.0 11.0 8.4 0.79 MA11-095 47.0 53.8 6.8 5.2 0.36 MA11-095 59.0 76.0 17.0 12.9 0.91 MA11-095 97.0 112.0 13.0 9.9 2.47 MA11-095 119.0 136.0 17.0 12.9 0.61 MA11-095A 53.0 74.0 18.0 13.7 0.48 MA11-095A 80.0 109.0 29.0 22.0 0.53 MA11-095A 120.0 142.0 22.0 16.7 0.36 MA11-095A 213.0 226.0 13.0 9.9 2.08 MA11-095A 275.0 287.0 12.0 9.1 0.82 MA11-095A 296.0 304.0 8.0 6.1 0.80 MA11-095A 319.0 326.0 7.0 5.3 1.56 MA11-095A 334.0 344.0 10.0 7.6 1.06 MA11-095A 352.0 403.0 47.0 35.7 0.98 MA11-095A 421.0 441.0 20.0 15.2 0.71 MA11-096 148.0 154.0 6.0 4.6 0.33 MA11-096 186.0 194.0 8.0 6.1 0.80 MA11-096 221.0 235.0 14.0 10.6 0.54 MA11-096 251.0 271.0 20.0 15.2 1.03 MA11-096 277.0 285.0 8.0 6.1 0.36 MA11-096 294.0 301.9 7.9 6.0 0.39 MA11-097 12.0 17.0 5.0 3.8 0.20 MA11-097 80.0 105.0 23.0 17.5 1.79 MA11-098 97.0 193.0 96.0 73.0 1.06 MA11-098 200.4 223.0 22.6 17.2 1.16 MA11-099 57.0 69.0 12.0 9.1 0.55 MA11-099 85.0 142.0 57.0 43.3 0.47 MA11-099 160.0 167.0 7.0 5.3 0.32 table continues…
Prodigy Gold Incorporated 10-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-100 5.0 17.0 12.0 9.1 0.86 MA11-100 32.0 52.0 20.0 15.2 0.68 MA11-100 60.0 69.0 9.0 6.8 0.47 MA11-100 77.0 83.0 6.0 4.6 0.32 MA11-100 101.0 111.0 10.0 7.6 2.98 MA11-101 10.0 32.0 21.0 16.0 0.89 MA11-101 101.0 133.0 32.0 24.3 0.36 MA11-101 140.0 147.0 7.0 5.3 0.43 MA11-101 153.0 158.0 5.0 3.8 0.44 MA11-102 78.0 109.0 31.0 23.6 4.68 MA11-103 22.0 34.0 12.0 9.1 0.59 MA11-103 42.0 49.0 7.0 5.3 0.60 MA11-103 56.0 63.0 7.0 5.3 1.21 MA11-103 74.0 82.0 8.0 6.1 0.38 MA11-104 56.0 61.0 5.0 3.8 0.34 MA11-104 68.0 77.0 9.0 6.8 0.45 MA11-104 83.0 111.0 27.0 20.5 0.48 MA11-104 144.0 154.0 10.0 7.6 0.84 MA11-104 174.0 189.0 15.0 11.4 2.54 MA11-104 197.0 217.0 20.0 15.2 0.46 MA11-104 238.0 243.0 5.0 3.8 0.20 MA11-104 250.0 270.0 20.0 15.2 0.44 MA11-105 22.0 34.0 12.0 9.1 1.38 MA11-105 42.0 66.0 24.0 18.2 6.36 MA11-105 78.0 101.0 21.0 16.0 0.41 MA11-105 116.0 150.0 34.0 25.8 0.76 MA11-106 17.0 32.0 15.0 11.4 0.44 MA11-106 81.0 102.0 21.0 16.0 3.75 MA11-106 114.0 149.0 35.0 26.6 0.91 MA11-106 156.0 192.0 34.0 25.8 0.83 MA11-107 8.5 22.0 13.5 10.3 0.27 MA11-107 92.0 98.0 6.0 4.6 0.31 MA11-107 105.0 110.0 5.0 3.8 0.67 MA11-107 121.0 127.0 6.0 4.6 0.29 MA11-107 167.0 174.0 7.0 5.3 0.43 MA11-107 186.0 208.0 22.0 16.7 2.86 MA11-107 291.0 296.0 5.0 3.8 6.23 MA11-107 319.0 325.0 6.0 4.6 2.61 MA11-107 336.0 357.0 20.0 15.2 1.16 MA11-107 364.0 382.0 18.0 13.7 0.64 table continues…
Prodigy Gold Incorporated 10-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-107 412.7 427.0 14.3 10.9 0.39 MA11-108 22.0 31.0 9.0 6.8 1.01 MA11-108 40.0 49.0 7.0 5.3 2.10 MA11-108 73.0 80.0 7.0 5.3 0.77 MA11-108 87.0 93.0 6.0 4.6 0.23 MA11-109 24.0 35.0 11.0 8.4 0.41 MA11-109 50.0 55.0 5.0 3.8 0.30 MA11-110 45.0 58.0 13.0 9.9 0.32 MA11-110 71.0 95.0 23.0 17.5 0.58 MA11-111 56.0 65.0 9.0 6.8 0.57 MA11-111 82.0 90.0 8.0 6.1 0.60 MA11-112 55.0 63.0 8.0 6.1 0.88 MA11-112 79.0 86.0 7.0 5.3 4.02 MA11-112 96.0 122.0 26.0 19.8 0.38 MA11-112 138.0 146.0 8.0 6.1 0.44 MA11-112 152.0 159.0 7.0 5.3 0.49 MA11-112 165.0 175.0 10.0 7.6 1.35 MA11-112 193.0 201.0 8.0 6.1 1.13 MA11-112 224.0 236.0 12.0 9.1 7.08 MA11-112 246.0 265.0 19.0 14.4 0.65 MA11-112 340.0 345.0 5.0 3.8 0.69 MA11-113 10.0 16.0 6.0 4.6 0.23 MA11-113 24.0 41.0 16.2 12.3 0.88 MA11-113 55.8 73.0 17.2 13.0 0.59 MA11-114 77.0 83.0 6.0 4.6 1.15 MA11-114 103.0 121.0 18.0 13.7 1.01 MA11-114 127.0 137.0 10.0 7.6 1.72 MA11-114 173.0 180.0 7.0 5.3 0.79 MA11-114 203.0 210.0 7.0 5.3 0.86 MA11-115 4.0 30.0 26.0 19.8 0.54 MA11-115 36.0 42.0 6.0 4.6 2.48 MA11-115 51.0 59.0 8.0 6.1 0.80 MA11-115 65.0 78.0 11.0 8.4 2.44 MA11-116 42.0 62.0 20.0 15.2 0.39 MA11-116 91.0 103.0 12.0 9.1 0.30 MA11-116 112.0 122.0 10.0 7.6 0.58 MA11-117 Assays pending - - - MA11-118 108.0 123.0 15.0 11.4 0.78 MA11-118 163.0 180.0 17.0 12.9 0.61 MA11-118 220.0 236.0 16.0 12.2 0.78 table continues…
Prodigy Gold Incorporated 10-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-119 167.0 198.0 31.0 23.6 1.02 MA11-119 204.0 219.0 13.0 9.9 0.51 MA11-119 234.0 251.0 17.0 12.9 0.59 MA11-119 266.0 279.0 12.0 9.1 2.72 MA11-120 41.0 51.0 10.0 7.6 0.99 MA11-120 75.0 99.0 24.0 18.2 0.33 MA11-120 107.0 129.0 22.0 16.7 0.35 MA11-120 237.0 249.0 12.0 9.1 2.10 MA11-120 255.0 265.0 10.0 7.6 0.81 MA11-120 271.0 305.0 34.0 25.8 0.75 MA11-120 324.0 334.0 10.0 7.6 0.30 MA11-120 341.0 381.0 40.0 30.4 1.12 MA11-120 387.0 430.0 43.0 32.7 1.05 MA11-120 452.0 469.0 17.0 12.9 0.64 MA11-120 488.0 505.0 17.0 12.9 0.45 MA11-121 Assays pending - - - MA11-122 268.0 302.0 33.0 25.1 0.92 MA11-122 320.0 325.0 5.0 3.8 0.69 MA11-122 352.0 362.0 10.0 7.6 4.14 MA11-122 374.0 380.0 4.0 3.0 7.98 MA11-123 126.0 147.0 21.0 16.0 0.56 MA11-123 157.0 162.0 5.0 3.8 1.65 MA11-123 176.0 187.0 11.0 8.4 0.45 MA11-123 194.0 199.0 5.0 3.8 0.53 MA11-123 251.0 269.0 18.0 13.7 0.34 MA11-123 276.0 287.0 9.0 6.8 1.00 MA11-123 304.0 309.0 5.0 3.8 0.48 MA11-123 318.0 344.0 24.0 18.2 0.96 MA11-123 351.0 369.0 17.0 12.9 0.52 MA11-123 394.0 401.0 7.0 5.3 0.54 MA11-123 439.0 445.0 5.0 3.8 0.85 MA11-124 Assays pending - - - MA11-125 184.0 279.0 95.0 72.2 1.45 MA11-125 285.0 325.0 38.0 28.9 0.86 MA11-125 342.0 360.2 18.2 13.8 17.24 MA11-125 438.0 443.0 5.0 3.8 0.29 MA11-126 8.0 14.0 6.0 4.6 2.92 MA11-126 23.0 31.0 7.0 5.3 1.01 MA11-126 37.0 87.0 49.0 37.2 1.25 MA11-127 77.0 95.0 17.0 12.9 0.30 table continues…
Prodigy Gold Incorporated 10-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Estimated True From To Length Thickness Au Drillhole (m) (m) (m) (m) (g/t) MA11-127 105.0 125.0 20.0 15.2 0.81 MA11-127 247.0 255.0 8.0 6.1 0.69 MA11-127 272.0 278.0 6.0 4.6 0.64 MA11-127 286.6 298.0 11.4 8.7 1.65 MA11-127 317.0 322.0 5.0 3.8 2.61 MA11-127 337.0 342.0 5.0 3.8 0.69 MA11-127 350.0 360.0 8.0 6.1 1.73 MA11-128 132.0 147.0 15.0 11.4 0.38 MA11-128 212.0 273.0 61.0 46.4 0.41 MA11-128 305.0 348.0 42.0 31.9 0.66 MA11-128 379.0 392.0 13.0 9.9 0.57 MA11-129 Assays pending - - - MA11-130 Assays pending - - - MA11-131 108.0 115.0 7.0 5.3 0.99 MA11-131 121.0 127.0 6.0 4.6 0.62 MA11-131 163.0 184.0 21.0 16.0 0.47 MA11-131 198.0 239.0 39.0 29.6 1.10 MA11-131 257.0 272.0 15.0 11.4 0.96 MA11-131 284.0 300.0 16.0 12.2 0.55 MA11-131 310.0 316.0 6.0 4.6 0.34 MA11-131 322.0 361.0 39.0 29.6 1.06 MA11-131 396.0 410.0 14.0 10.6 0.32 MA11-131 417.0 434.0 17.0 12.9 0.32 MA11-131 462.0 467.0 4.0 3.0 1.60
10.1.4 FACTORS THAT COULD MATERIALLY IMPACT THE ACCURACY AND RELIABILITY OF THE RESULTS
Snowden believes there are no recovery factors that would materially affect sampling. The rock mass is typically tight and recovery information indicates better than 98% core recovery in the granodiorite stock. Core recoveries can be affected in proximity to underground workings.
10.1.5 DRILL PLAN
Figure 10.1 provides the location of Prodigy drillholes as of mid-September 2011. The outlines of the proposed pit and expansion pit shown in this figure are now superseded.
Prodigy Gold Incorporated 10-17 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 10.1 Plan View of Prodigy Drillhole Locations
10.1.6 EXAMPLES OF DRILL SECTIONS
Figure 10.2 to Figure 10.4 illustrate representative examples of drill sections through the Magino mineral deposit. Depictions of a PEA pit outline in these figures are now superseded.
Prodigy Gold Incorporated 10-18 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 10.2 Drill Cross Section 300SW
Prodigy Gold Incorporated 10-19 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 10.3 Drill Cross Section 1375SW
Note: This section is at the extreme southwest end of the existing resource model as shown by the limited number of resource blocks in the section. Also, only a tiny portion of the proposed open pit, less than 30 m in depth, cuts through the section. Virtually the entire 300 m vertical extent of gold mineralization identified in drilling is higher grade than the resource cut-off grade and is highlighted by thick intervals of good grade mineralization in drillhole MA11-122. The Magino gold deposit is open at depth and along strike southwest of this section.
Prodigy Gold Incorporated 10-20 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 10.4 Drill Cross Section 1180SW
Prodigy Gold Incorporated 10-21 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 SAMPLING M ETHOD AND A PPROACH
Sampling at Magino has been carried out through drill core sampling and underground channel sampling. The current database contains no verified channel sample data and therefore this sample type has not been used in the current study.
Details of pre-Prodigy sampling programs are provided in Section 6.0.
Drill core programs were conducted from both surface and underground during the operating mine period, between 1988 and 1992. Drill core sizes included AQ, EXT (both 27 mm diameter), BQ (36.5 mm), NQ (47.6 mm) and HQ (63.5 mm).
Surface drilling has included BQ, NQ and HQ coring, while underground drilling has included AQ, EXT and BQ coring.
Records are incomplete for the underground drilling and some of the early surface drilling, but they indicate that underground core was either sampled whole, or split or sawn. It is assumed that 27 mm core was sampled whole, and it is reported that BQ was either sampled whole or split/sawn. Surface drill core was either split or sawn prior to sampling.
Coarse grained (“nuggety”) gold mineralization is a feature of the Magino deposit. Consequently it has been noted by previous mineral resource estimators that samples of small-diameter core are likely to be unrepresentative, however no recent study has been undertaken to establish what is an acceptable minimum sample volume.
In Snowden’s opinion, half-sawn NQ core is the minimum core diameter recommended for sampling of this deposit type. Apart from HQ coring in 2000, Golden Goose and Prodigy have maintained this standard. Snowden recommends that Prodigy continues to re-drill certain altered zones with NQ, where earlier pre- Golden Goose coring was BQ diameter or smaller.
Prodigy Gold Incorporated 11-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 11.2 SAMPLE P REPARATION M ETHODS AND Q UALITY C ONTROL M EASURES E MPLOYED B EFORE D ISPATCH OF S AMPLES
11.2.1 2009-2010 GOLDEN GOOSE PROGRAM
Turcotte et al (2010) describe the process as follows. Minor edits have been made for spelling, grammar and consistency.
The drill core sampling method and approach was established by Golden Goose and verified by their geologist Gilles Provost, P.Geo. Turcotte et al (2010) found no indication of anything in the drilling, core handling and sampling procedures, or in the sampling methods and approach that could have had a negative impact on the reliability of the reported assay results.
Drill core sections were selected for sampling and assaying based on the presence of sulphide mineralization or visible gold and quartz veins.
After being examined and described (logged), the core was sampled according to an established protocol. First, the core of the selected section was cut in half with a core splitter, with one half put aside for eventual shipment to the laboratory. The second half of the core was then put back in its place in the core box and a tag bearing the same number was placed at the beginning of sawed core halves forming the selected sampled length. The metallic bowls, core splitter and work table were cleaned thoroughly before proceeding to the next sample. Each bag, after being closed and tied, was placed with about 20 other samples into a larger bag for shipment.
Trans-Provincial Freight Carriers Ltd came to the mine site, picked up the larger bags, and shipped them to Accurassay Laboratories in Thunder Bay, Ontario.
11.2.2 2010-2011 KODIAK AND PRODIGY PROGRAM
In the latter half of 2010 Kodiak identified sections of core from the 2006 drill program that had not been sampled, and undertook the following process to effect the sampling.
Core that was to be sampled was first logged by the geologist, and a cut line is drawn on the core, perpendicular to the dominant structural fabric. The core was cut into halves by a Kodiak employee, using a table-fed circular diamond saw; one-half of the core sent for analysis and the remaining half was labelled and retained in core boxes for future reference. Core cutting was supervised by the geologist logging core who ensured that a sequence of blanks, duplicates and standards was followed. Sampling occurred at 1 m intervals, or less to account for lithological contacts.
Prodigy Gold Incorporated 11-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Zones of low core recovery were noted, but rare due to the competency of the rock mass. The half core selected for analysis was always taken from one side; without regard for the presence of visible gold, in order to reduce sampling bias. The sampled half core was placed into clean, new transparent plastic sample bags with one pre-printed sample tag (since laboratories use an internal numbering system). The sample bags were rolled and sealed with staples. A metal tag was stapled in the core tray along with the meterage represented by the sample. The sample tag was also printed on the remaining sample card in the booklets, and once all tags have been used the booklets are stored in the core logging facility. The sealed sample bags were placed in rice sacks in sequence for shipment to the laboratory. A copy of the sample submittal form was returned to the project geologist/project manager after being stamped by the receiving laboratory. Samples were transported by Kodiak personnel or collected by the laboratories directly from the project. If a third party transportation company was used, the number or rice sacks was accounted for and sealed with a numbered sealing tie. The number of bags was controlled by the laboratory to ensure they were not tampered with. The same procedures applied to the 2011 Prodigy program.
11.2.3 STATEMENT
The 2010 and 2011 drilling programs were conducted under the supervision of employees of Golden Goose, Kodiak and Prodigy. Employees of these companies undertook sampling of the core, under the supervision of staff QPs and this is normal industry practice.
Gilles Provost, P.Geo. and Quentin Browne, P.Geo., were the QPs for site activities in 2010. Tom Pollock, P.Geo. is the QP for 2011.
Following transport of half core samples to the analytical laboratory, all sample handling, reduction, splitting and analysis were conducted by independent registered companies and their employees.
Prodigy Gold Incorporated 11-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 11.3 ANALYTICAL L ABORATORIES
11.3.1 ACCURASSAY LABORATORIES
Accurassay Laboratories is located in Thunder Bay, Ontario. Accurassay’s methods are accredited to International Organization for Standardization (ISO) 17025 by the Standards Council of Canada (SCC). Accurassay Laboratories is an independent, privately owned company with 30 years of experience in mineral analysis in Canada.
11.3.2 ALS CHEMEX
ALS Chemex is a division of ALS Laboratory Group, itself owned by the publically listed Campbell Brothers Limited company (in Australia).
ALS Chemex has a sample preparation facility located in, Timmins, Ontario. Prepared samples were shipped from Timmins to the ALS Chemex laboratory in Val D’Or, Quebec. ALS Chemex laboratories are registered to ISO 9001:2008 certification, and analytical facilities have received ISO 17025 accreditations for specific laboratory procedures.
ALS Chemex commenced processing of Prodigy’s Magino samples on June 21, 2010.
11.4 SAMPLE S PLITTING AND R EDUCTION
11.4.1 ACCURASSAY LABORATORIES
Turcotte et al (2010) described the sample splitting and reduction process as follows. Minor edits have been made for spelling, grammar and consistency.
Upon arrival at Accurassay Laboratories, rock samples are entered into the Laboratory Information Management System (LIMS). Samples are then dried, if necessary, and jaw crushed to approximately eight mesh. A 250 to 500 g subsample is taken and pulverized to 90% at 150 mesh, and then matted to ensure homogeneity. Silica sand is used to clean out the pulverizing dishes between each sample to prevent cross-contamination. The homogenized sample is then sent to the fire assay laboratory or the wet chemistry laboratory, depending on the analysis required.
Prodigy Gold Incorporated 11-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 11.4.2 ALS CHEMEX
Upon arrival at the Timmins sample preparation facility, samples were entered into the LIMS. The average sample weight of split drill core is 2.2 kg. After drying, samples are crushed using a terminator jaw crusher such that 70% of material passes 2 mm. Crushed material is then riffle split and 1 kg is pulverized such that 85% of material passes 75 µm. An extra 1 kg pulp is created for every tenth sample, for check analysis.
In the year ending March 30, 2011, ALS Chemex has processed 5,843 drill core samples from Magino.
11.5 ANALYTICAL P ROCEDURES
11.5.1 ACCURASSAY LABORATORIES
Turcotte et al (2010) describe the analytical procedures as follows. Minor edits have been made for spelling, grammar and consistency.
For precious metal analysis (gold, platinum, palladium, and/or rhodium), the sample is mixed with a lead-based flux and fused for 1 h and 15 min. A silver solution is added to each sample prior to fusion, producing a button that contains lead from the flux, the added silver and any precious metals from the sample. The button is placed in a cupelling furnace where all the lead is absorbed by the cupel, and a silver bead containing all the gold, platinum and palladium remains in the cupel. The cupel is then removed from the furnace and allowed to cool. Once the cupel is sufficiently cooled, the silver bead is placed in a labelled test tube and digested using aqua regia. The samples are bulked up with 1.0 mL of distilled de-ionized water and 1.0 mL of 1% digested lanthanum solution. The samples are allowed to cool before mixing to ensure proper homogeneity in the solution. Once the samples are settled, they are analyzed for gold, platinum and palladium using atomic absorption spectroscopy (AAS). The AAS unit is calibrated for each element using the appropriate ISO 9002 certified standards in an air-acetylene flame. The AAS results are checked by a technician, forwarded to data entry by means of electronic transfer, and a certificate produced. The Laboratory Manager checks the data, validates the certificates, and issues the results in the format requested by the client.
11.5.2 ALS CHEMEX
Gold analysis is by way of fire assay of a 30 or 50 g pulp subsample. All samples are first subject to procedure Au-AA23 which uses AAS. Any sample that returns grades higher than 1 g/t Au is re-assayed with a gravimetric finish, per procedure Au- GRA21.
Prodigy Gold Incorporated 11-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Details below are sourced from ALS Chemex. Minor edits have been made for spelling, grammar and consistency.
Fire Assay-Gravimetric Procedure for Ore Grade Samples
Gravimetric methods involve the use of balances to weigh the element of interest, either in its pure elemental form or as a chemical compound. One of the most common gravimetric determinations is that of gold and silver following a fire assay fusion cupellation. The precious metal bead that remains following cupellation is an alloy of silver and gold. Weighing this bead will give the total weight of silver and gold. If the bead is then treated with dilute nitric acid, it is possible to remove the silver quantitatively. The residual mass consists of pure gold which can then be weighed separately, thus allowing the silver to be determined by difference. The balances used for this purpose are microbalances capable of weighing to the nearest microgram (one millionth of a gram). Analysis of bullion for gold, silver and base metal content is another common procedure. The classical technique for determining gold is the fire assay fusion followed by cupellation and a gravimetric finish (method codes Au- GRA21, Au-GRA22 and Au-GRA24).This is still the preferred procedure for the analysis of high grade ores. There is no upper quantitative limit applied for these procedures but clients should note that the detection limit is significantly higher than for procedures that use spectroscopic measurement techniques.
Fire Assay-Atomic Absorption procedures for Low to Medium Grade Ore Samples
The method involves fire assay collection followed by cupellation, dissolution of the precious metal prill and a preconcentration solvent extraction step. The final determination is by flame AAS, providing a detection limit of 5 ppb.
11.6 QUALITY C ONTROL
11.6.1 2009-2010 GOLDEN GOOSE PROGRAM
Turcotte et al (2010) describe the quality control (QC) process as follows. Minor edits have been made for spelling, grammar and consistency.
A quality control program was present for the Golden Goose 2009-2010 diamond drilling program on the Magino property. The objectives of the quality control program were to monitor and document the quality and integrity of the sampling procedure, sample preparation, and assaying. Using a series of quality control samples, Golden Goose’s protocol stipulates that the entire sampling, sample preparation and assaying process be monitored and evaluated for:
Prodigy Gold Incorporated 11-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada the integrity of field sampling and sample shipment by monitoring field blank results and sample shipment procedures possible contamination during sample preparation or the assaying process by monitoring the results of field blank standards submitted as regular samples, and by monitoring laboratory analytical blank standard results the suitability of crushing/splitting/pulverization sizes by measuring the precision of coarse and pulp duplicate samples the level of assaying accuracy by using external and internal (laboratory) CRMs and by assaying blind certified reference standards in each batch of samples. The laboratory inserted one coarse crush duplicate sample split, selected at random, into each 10-sample sub-batch. Three CRMs with different grades, all from Rocklabs in New Zealand, were used for quality control. One field blank standard was prepared using “barren” rock from the project site, or other potentially “barren” material. One of the three CRMs, or one blank, was included in each batch of 50 samples shipped by the Golden Goose geologist.
11.6.2 ACCURASSAY LABORATORIES
Turcotte et al (2010) describe the process as follows. Minor edits have been made for spelling, grammar and consistency.
Accurassay Laboratories employs an internal quality control system that tracks certified reference materials and in-house quality assurance standards. Accurassay Laboratories uses a combination of reference materials, including reference materials purchased from CANMET, standards created in-house by Accurassay Laboratories (and tested by round robin with laboratories across Canada), and ISO-certified calibration standards purchased from suppliers. Should any of the standards fall outside the warning limits (+/- 2SD), re-assays are performed on 10% of the samples analyzed in the same batch, and the re- assay values are compared with the original values. If the values from the re- assays match the original assays, the data is certified; if they do not match, the entire batch is re-assayed. Should any of the standards fall outside the control limit (+/- 3SD), all the assay values are rejected and all samples in that batch are re-assayed.
11.6.3 2010 KODIAK SAMPLING PROGRAM
Until September 2010, the protocol described in Section 11.2.2 continued. Since that time, each batch of 20 samples included one coarse reject, one pulp duplicate, one CRM and one coarse blank.
Prodigy Gold Incorporated 11-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Should any of the standards fall outside the warning limits (+/- 2SD), re-assays are performed on ten of the samples analyzed in the same batch around the position of the standard, and the re-assay values are compared with the original values. If the values from the re-assays match the original assays, the data is certified; if they do not match, the entire batch is re-assayed. Should any of the standards fall outside the control limit (+/- 3SD), all the assay values are rejected and all samples in that batch are re-assayed.
11.7 PRODIGY QA/QC FOR 2011
Prodigy collates and monitors all quality control data through Maxwell Geosciences Data Shed and QA/QC Reporter softwares on a batch basis.
Results for blank and standard assays are presented below. Prodigy has advised the author that re-assays have been requested for instances where CRM assays fall outside of the control lines (blue).
Prodigy Gold Incorporated 11-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.1 Gold Assays for Coarse Blank Inserted by Prodigy
Prodigy Gold Incorporated 11-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.2 Gold Assays for Standard CDN-BL-7
Prodigy Gold Incorporated 11-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.3 Gold Assays for Standard CDN-GS-1F
Prodigy Gold Incorporated 11-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.4 Gold Assays for Standard CDN-GS-2E
Prodigy Gold Incorporated 11-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.5 Gold Assays for Standard CDN-GS-30B
Prodigy Gold Incorporated 11-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.6 Gold Assays for Standard CDN-GS-2G
Prodigy Gold Incorporated 11-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.7 Gold Assays for Standard CDN-GS-1G
Prodigy Gold Incorporated 11-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.8 Gold Assays for Standard CDN-GS-1P5C
Prodigy Gold Incorporated 11-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.9 Gold Assays for Standard CDN-GS-2E
Prodigy Gold Incorporated 11-17 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.10 Gold Assays for Standard CDN-GS-2G
Prodigy Gold Incorporated 11-18 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.11 Gold Assays for Standard CDN-GS-3G
Prodigy Gold Incorporated 11-19 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.12 Gold Assays for Standard CDN-GS-4B
Prodigy Gold Incorporated 11-20 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.13 Gold Assays for Standard CDN-GS-7B
Prodigy Gold Incorporated 11-21 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.14 Gold Assays for Standard CDN-GS-P2
Prodigy Gold Incorporated 11-22 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 11.15 Gold Assays for Standard CDN-GS-P4A
Prodigy Gold Incorporated 11-23 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Assays are performed on an extra split sample to monitor precision. Results for 30 “repeats” show that precision is within acceptable limits for the grade range from 0 to 10 g/t Au for 70% of samples tested. Thus far there are insufficient results for the grade range from 10 to 50 g/t Au.
11.8 SPECIFIC G RAVITY D ETERMINATIONS
On April 11, 2008, Golden Goose received 12 SG analysis determinations from Accurassay Laboratories of Thunder Bay, Ontario. The samples were analyzed by pycnometer using pulverized core.
During 2011, Prodigy has undertaken 2,268 SG determinations using the immersion method at its core shed in Dubreuilville, Ontario. Solid full core samples between approximately 10 and 15 cm in length were taken at approximately 3 m intervals regardless of composition. Samples were weighed using a RADWAG model PS 1200/C/2 digital balance. Samples were first weighed dry and then weighed in distilled de-ionised water by suspension ensuring the entire sample was submerged (Simpson 2011).
As part of the QA/QC program, Prodigy selected 49 samples from its dataset for SG analysis checks at ALS Chemex. The check determinations indicated that Prodigy’s determinations were acceptable.
11.9 SNOWDEN’ S O PINION ON THE 2011 SAMPLE P REPARATION, S ECURITY AND A NALYTICAL P ROCEDURES
Procedures undertaken in 2011 have been under the supervision and security of the issuer’s QPs, as far as drill core sampling prior to dispatch. Laboratory sample reduction and analytical procedures have been conducted by independent accredited companies with acceptable practices.
Prodigy ensures quality control is monitored through the insertion of blanks, certified reference materials and duplicates for the ongoing 2011 drill campaign.
Prodigy Gold Incorporated 11-24 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 12.0 DATA VERIFICATION
Since the introduction of NI 43-101 in 2000, the Magino drilling and sampling database has been re-compiled from first principles, updated as necessary and reported as verified by independent QPs on several occasions, as follows:
2000 (Reddick, 2001b) 2002 (Reddick, 2002) 2004 (Burns & Reddick, 2004) 2008 (Turcotte & Pelletier, 2008) 2009 (Turcotte & Pelletier, 2009).
The current drilling and sampling database is an update of the 2008 recompilation by Turcotte & Pelletier, with the addition of data by Prodigy. In the 2008 exercise, Turcotte & Pelletier conducted the following (excerpted from Turcotte et al (2010). Minor edits have been made for spelling, grammar and consistency.
The purpose of an earlier mine site visit by author Carl Pelletier in December 2007 was to conduct a general review of the site. The visit was led by Gilles Provost of Golden Goose, field geologist for the Magino project. Carl Pelletier reviewed some of the mineralized zones from five Golden Goose diamond drill holes. Sample tags were still present in the core boxes and it was possible to validate sample numbers and gold grades for each of the samples in the mineralized zones. Not all of the diamond drill core was stored on the mine site, and some holes were therefore not available for verification. Geological logging was generally done using the standard logging codes for the Magino mine (i.e., the geological legend). These codes are amenable to management in a computer database.
The result was coded lithological and mineralogical descriptors and brief descriptive columns. Unfortunately, the mine’s geological legend did not provide any codes for alteration, structural elements or mineralization, and the resulting level of detail is barely adequate for basic interpretation, especially in logs before 2000. Structural geology logging was also inadequate prior to 2000 (e.g., shears are observed but their orientations are consistently missing), but descriptions by geologists from 2000 to 2007 are more detailed. Many of the original paper logs and/or copies of logs are present at the Magino mine site. Paper logs for all surface and underground DDHs from 1981 to 2010 were available for consultation. Only partial DDH information is available before 1981 (typically location and assays). No geotechnical logging was performed;
Prodigy Gold Incorporated 12-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada therefore none of the DDH logs have records of fracture frequency or rock quality designation (RQD).
The data supplied by Golden Goose for the Magino mine were in the form of a GeoticLog and Gemcom software database. The Gemcom software database came from the technical report published by Snowden in 2004 (Burns and Reddick, 2004).
Snowden used this database to produce resource estimation work in compliance with NI 43-101. The GeoticLog software database only contained data for Golden Goose’s last DDHs carried out in 2006-2010. InnovExplo transferred the GeoticLog software data into a Gemcom software database, and validated and corrected the data.
InnovExplo carefully reviewed the database before generating cross-sections and carrying out the mineral resource estimate. The integrity of the database was checked by Bruno Turcotte and Pierre Gauthier of InnovExplo. All surface and underground DDHs were retained. The drilling database consists of 1,286 DDHs totalling 124,118 m. Only the 2006 to 2010 DDH casings were surveyed in the field using a Sokkia GPS.
Measurement precision and position accuracies were ±5 cm. Casings of earlier DDHs were surveyed with traditional surveying equipment using the mine grid or a small GPS. Coordinates for pre-2006 surface DDHs and all underground DDHs are preserved as handwritten entries on summary log sheets. The data from location and orientation surveys for DDHs from 1972 to 2007 were checked by Pierre Gauthier (InnovExplo) using available summary log sheets and old cross-sections. Many mistakes were found and corrected by InnovExplo personnel. Generally, both tropari and acid tests were done for surface holes, but only acid tests were performed for underground holes. All drilling data are available as a computer database (Excel and Gemcom software).
InnovExplo went to the Magino mine site to recover all historical information from past mining operations. Most of the information was available on paper, such as longitudinal sections, cross-sections and level plans showing geological mapping and channel sampling. InnovExplo also recovered information from old back-up (Bernouilly) disks containing data from a 1991 survey of the ramp, drifts and stopes. More recent information from 1991 to 1993 was not found.
All assays from the drilling database were verified by Bruno Turcotte and Pierre Gauthier of InnovExplo. In all, they reviewed 136,953 samples with assay certificates and/or log sheets. Unfortunately, there are no original assay certificates remaining for a large number of DDHs, specifically between 1972 and 1991, and as such, the gold assay results are preserved only as handwritten entries on log sheets. A lot of missing assay data was found on log sheets and old drilling reports on the Ministry of Northern Development and Mines (MNDM) website (http://www.mndm.gov.on.ca/mines/default_e.asp).
Prodigy Gold Incorporated 12-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada InnovExplo calculated an average gold value (g/t Au) for each sample with one or more re-assays. InnovExplo used these average gold values when calculating the mineral resource estimate. All assays from the drilling database are now available in a computer database (Excel and Gemcom software).
InnovExplo geologists noticed that the mine grid on the old set of cross-sections was not oriented for optimum geological interpretation. Using the information on geological maps from several levels, they adjusted the direction to create a new grid and generate another set of cross-sections, which were used to produce a new geological interpretation. InnovExplo oriented these cross-sections to be as perpendicular as possible to the auriferous structures. The resulting trend for the set is N075°, with each cross-section oriented at N345°.
Channel samples were taken from each development for grade control purposes. The channel sampling in drifts was mapped out on a mapping sheet. Sample locations were drawn on the sheet (scale 1’’ = 20’) with the length (ft) and gold grade (oz/t) indicated. There were no geological descriptions for the samples, and the channel sampling data were not provided in a computer database. In addition, data were not available for all levels, sublevels and raises, although the majority of the samples were present on the mapping sheet.
The Gemcom software database containing old mine working data was obtained from the technical report published by Snowden in 2004 (Burns and Reddick, 2004). This database was reviewed by Serge Morin of InnovExplo before generating the new cross-sections and carrying out the mineral resource estimate. Missing data were found on old plans stored at the Magino mine site. Length data were missing for some drifts and sublevels, raises and stopes, as were numerous assay results. When missing information was found, it was added to the Gemcom software database. Unfortunately, InnovExplo was unable to find the survey data for many of the raises. Consequently, the information for many raises is not present in the Gemcom software database.
Lastly, InnovExplo discovered a survey error on one back plug at the start of the ramp. This error displaces the old mine workings by about 1 to 5 m in plan and elevation. Consequently, the current survey coordinates for underground drillholes are not accurate.
In December 2010, Snowden restored the 2004 Snowden Gemcom database that is archived in Snowden’s office in Vancouver, and conducted cross-checks with the 2008 InnovExplo Gemcom database and finally with the Gemcom database supplied by Prodigy.
In September 2011, Prodigy provided Snowden with an updated Gemcom database, for the November resource estimate update. Internal validation and integrity checks were conducted on the database submitted to Snowden by Prodigy.
Prodigy Gold Incorporated 12-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 12.1 SITE V ERIFICATION
In February and August 2011, Snowden visited the site and inspected drill core laid out for the 2011 drilling program currently underway for Prodigy. The following items were verified:
locations of drill rigs and operation, however operations were suspended due to a driller’s accident cross-check of Prodigy drill logs with drill core core handling, storage and security core logging process, alignment, recovery, mark-up and core sawing, sampling insertion of blanks and CRMs core farm at the mine site where Prodigy are conducting an inventory, for subsequent re-sampling consideration density measurements using water displacement weighing method cross-check of low grade and high grade assays against alteration and visible gold in drill core review of drill logs and assay sheets at the mine office.
Snowden has not undertaken a complete data verification study, however sufficient checks have been completed and the Magino drilling and sampling data is suitable to use in estimating a mineral resource to support a PEA.
Prodigy Gold Incorporated 12-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
Historical and current metallurgical test work programs have been carried out for the Magino property. Below is a list of the reports from these test programs.
Lakefield Research’s “An Investigation of The Recovery of Gold from Magino Project Samples – October 1997” KCA’s “Magino Project Report of Metallurgical Tests – January 1999” G&T’s “Gravity Concentration/Cyanide Leaching on Variability Samples from the Magino Deposit – September 2011” Starkey’s “Magino Project SAGDesign Comminution Analysis and Mill Design”.
It should be noted that these test programs were undertaken prior to the review by Tetra Tech. The sections below review the data presented in each of these test reports and how this data has been used in the PEA design of the flowsheet for the processing plant.
13.1 LAKEFIELD R ESEARCH –OCTOBER 1997
Lakefield Research had been asked to complete a metallurgical test program in support of a prefeasibility study being carried out by BLM Bharti for Golden Goose. The study proposed a 2.6 t/a open pit mine and a leach plant, the Lakefield Research test report was entitled “An Investigation of the Recovery of Gold from Magino Project Samples – October 1997.” The Lakefield Research work tested gravity separation, cyanidation, and heap leaching. Drill core and bulk samples were selected by BLM Bharti for this test work and were deemed by BLM Bharti to be representative of the future operations.
The BWI tests were completed and an average BWI of 12.7 kWh/t was determined.
The gravity separation work by Lakefield Research showed moderate gold recoveries for the samples tested. Table 13.1 below is a tabulation of the heap leach results from Lakefield Research. The tests were carried out on two composites at similar grind size. The gravity separation test exhibited reasonable gravity gold recoveries.
Prodigy Gold Incorporated 13-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 13.1 Lakefield Research (1997) – Gravity Separation Test Results
Test -200 Mesh Weight Assay Distribution No. Composite (%) Product (%) (g/t Au) (% Au) G1 1 72 Mozley Conc 0.016 1636 24.0 Mozley Tail +150M 0.059 206 11.3 Mozley Tail -150M 0.88 29.8 24.1 Knelson Conc 0.95 67.6 59.4 Knelson Tail 99.05 0.44 40.6 Head (calc) 100.00 1.08 100.0 G2 2 54 Mozley Conc 0.051 781 55.8 Mozley Tail +150M 0.28 10.5 4.1 Mozley Tail -150M 0.63 21.1 18.5 Knelson Conc 0.96 58.7 78.3 Knelson Tail 99.04 0.16 21.7 Head (calc) 100.00 0.72 100.0
The test work also encompassed gold cyanidation. These 48 h bottle roll leach tests were used to determine the effect of the fineness of grind on the gold recovery. The test results are shown below in Table 13.2.
Table 13.2 Lakefield Research (1997) – Cyanidation Results
Reagent Consumption Extraction (kg/t) (%, Au) Test -200 Mesh NaCN Residue Head No. Composite (%) (g/L) NaCN CaO 24 h 48 h (g/t Au) (g/t Au) CN1 1 84 1.0 0.30 0.48 85 97.8 0.03 1.34 CN3 1 72 0.5 0.13 0.46 75 92.2 0.08 1.03 CN5 1 60 0.5 0.13 0.50 71 92.6 0.07 0.95 CN2 2 84 1.0 0.37 0.57 83 92.0 0.06 0.75 CN4 2 72 0.5 0.15 0.48 81 95.6 0.04 0.90 CN6 2 59 0.5 0.14 0.51 77 93.4 0.05 0.76 Note: NaCN = sodium cyanide, CaO = calcium oxide
The residue gold assays are low which shows that the cyanide leach was effective for both sample composites. The average cyanidation gold recovery for Composite 1 is 94.2% and 93.7% for Composite 2.
Heap leach tests were also carried out using column leach and carbon columns. The test results are presented in Table 13.3 below.
Prodigy Gold Incorporated 13-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 13.3 Lakefield Research (1997) – Heap Leach Results
Reagent Consumption Recovery (kg/t) (% Au) Test Feed Residue Head No. Composite Size NaCN CaO 1 h 3 h 7 h 14 h 21 h 28 h 35 h 42 h (g/t Au) (g/t Au) HL1 1 -12 mm 1.37 0.46 17.3 27.3 36.7 45.8 51.1 55.2 58.4 60.7 0.28 0.75 HL2 1 -12 mm 1.31 0.53 10.0 19.0 25.5 35.5 40.5 43.6 46.1 47.9 0.42 0.84 HL3 1 -6 mesh 0.98 0.59 6.9 19.1 29.8 40.2 45.450.3 52.9 55.1 0.38 0.88 HL4 2 -6 mesh 0.96 0.59 6.5 20.7 35.6 52.1 59.7 63.3 66.1 68.1 0.21 0.71
Prodigy Gold Incorporated 13-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 13.2 KAPPES,CASSIDAY &ASSOCIATES–JANUARY 1999
The test report from KCA was entitled, “Magino Project Report of Metallurgical Tests – January 1999.” The test work from KCA was performed on drill core selected by Golden Goose from the Magino site which represented the Mafic Volcanics and the Granodiorite area. These samples were used for column leach and bottle roll tests. The Mafic Volcanics average gold head grade was 1.08 g/t and 1.32 g/t for the Granodiorite samples.
The column leach results are presented in Table 13.4 below. The results show that even at the finer 9.5 mm crushed size the gold recovery from the column leach is low (e.g. 53%).
Table 13.4 KCA (1999) – Summary of Column Leach Tests
KCA KCA Crush Calculated Sample Test Magino Size Days Head Recovery Recovery No. No. ID (mm) Leach (g/t Au) (g/t Au) (%) 27088 A 27120 Mafic Volcanics -22.4 63 0.94 0.35 37.2 27088 B 27123 Mafic Volcanics -9.5 63 1.60 0.79 49.5 27089 B 27126 Granodiorite -22.4 63 1.72 0.56 32.5 27088 C 27129 Granodiorite -9.5 63 1.41 0.79 56.0 - - Average -22.4 63 - - 34.9 - - Average -9.5 63 - - 52.8
The results from the bottle roll tests were more promising and are presented below in Table 13.5. The average gold recovery at a grind size of 150 µm was 95%.
Table 13.5 KCA (1999) – Summary of Bottle Leach Tests
KCA KCA Crush Calculated Average Metal Sample Test Magino Size Head Tail Extracted Days No. No. ID (mm) (g/t Au) (g/t Au) (% Au) Leaching 27088 27116 A Mafic -0.150 0.73 0.05 93.2 2 Volcanics 27088 B 27116 C Mafic -9.500 0.85 0.54 36.5 4 Volcanics 27089 27116 B Granodiorite -0.150 1.57 0.05 96.8 2 27089 C 27185 A Granodiorite -9.500 1.61 1.12 30.4 4 - - Average -0.150 - - 95.0 2 - - Average -9.500 - - 33.5 4
Prodigy Gold Incorporated 13-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 13.3 G&T METALLURGICAL S ERVICES L TD.–SEPTEMBER 2011
G&T completed test work in September 2011, on drill core variability samples supplied to them by Prodigy. The results from this test work are in the report entitled, “Gravity Concentration/Cyanide Leaching on Variability Samples from the Magino Deposit (KM3024).”
The sample was submitted to gravity concentration by a Knelson concentrator and the Knelson tailings were subjected to 48 h bottle roll tests (cyanidation). The primary grind for all of the feed for the test work was 80% passing 75 µm with an average feed head grade of 1.0 g/t (ranging from 0.1 to 6 g/t). Target sodium cyanide concentration for the bottle roll tests was 250 ppm. The test flowsheet is illustrated below in Figure 13.1.
Figure 13.1 G&T (September 2011) – Test Flowsheet
The test results from the gravity concentration and the cyanidation are presented below in Table 13.6. The gold head grade varied considerably. The average overall gold extraction is 92% using gravity separation and a 48 h cyanide leach. The average reagent consumption was also very low at 0.02 kg/t of cyanide and 0.67 kg/t for lime.
Prodigy Gold Incorporated 13-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 13.6 G&T (September 2011) – Test Results
Reagent Pan Cyanide Overall Consumption Concentrate Extraction Extraction Feed (kg/t) Au Ag Au Ag Au Ag Au Test Sample (%) (%) (%) (%) (%) (%) (g/t) NaCN Lime 1/22 876501 23 4 61 46 70 48 0.26 0.04 0.72 2/23 876502 12 1 58 18 63 19 0.07 <0.01 0.74 3/11 876503 44 3 96 39 98 41 5.20 0.04 0.88 4/24 876504 29 8 94 31 96 37 0.36 0.02 0.68 5/25 876505 20 7 85 63 88 66 0.68 <0.01 0.86 6/26 876506 21 1 88 10 90 11 0.18 0.02 0.46 7/27 876507 27 2 92 6 94 57 1.46 <0.01 0.46 8/28 876508 35 1 91 71 94 71 0.15 0.02 0.56 9/29 876509 22 3 88 35 91 37 1.14 0.02 0.62 10/30 876510 11 1 84 52 86 52 0.52 <0.01 0.76 12/31 876511 34 17 98 97 99 98 5.99 <0.01 0.68 13/32 876512 30 6 94 30 96 34 0.25 <0.01 0.48 14/33 876513 58 13 98 91 99 92 0.56 0.02 0.8 15/34 876514 75 11 94 30 99 38 0.22 <0.01 0.68 16/35 876515 60 30 91 74 96 82 0.81 0.02 0.74 17/36 876516 50 4 80 30 90 33 0.13 0.02 0.84 18/37 876517 44 7 98 56 99 59 1.55 0.02 0.6 19/38 876518 6 1 96 10 97 11 0.10 0.02 0.66 20/39 876519 39 2 95 24 97 25 0.08 0.02 0.66 24/40 876520 20 2 97 22 97 24 0.13 <0.01 0.58 Average - 33 6 89 44 92 47 0.99 0.02 0.67 Note: Ag = silver
13.4 STARKEY &ASSOCIATES I NC.–OCTOBER 2011
Four drill core samples were supplied to Starkey in order to complete preliminary sizing of the comminution circuit. The test results were presented in their report entitled, “Magino Project SAGDesign Comminution Analysis and Mill Design (S88)”.
Table 13.7 summarizes the results of the “SAGDesign” test work. The average SAG
Power Index (WSAG) was determined to be 11.50 kWh/t and the BWI was determined to be 15.91 kWh/t. According to Starkey’s database, the WSAG indicates that the samples were considered hard ore competency for SAG milling and the BWI was considered moderate to hard competency for ball mill grinding.
Prodigy Gold Incorporated 13-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 13.7 Starkey (October 2011) – Summary of SAGDesign Test Work Results and Calculated Parameters
Project Identification SAGDesign Test Work Results Calculated Parameters
Calc WSAG SAG Dis. Calc Total SG to Bond Macro/ WBM to WT to Sample Sample Solids 1.77 mm BWI Micro P80 P80 No. Description (g/cm3) (kWh/t) (kWh/t) Ratio (kWh/t) (kWh/t) 1 876286 2.64 11.76 16.97 0.69 15.61 27.36 2 876282 2.67 11.15 13.71 0.81 12.61 23.76 3 876283 2.87 10.96 13.73 0.80 12.63 23.59 4 876284 2.86 11.25 14.85 0.76 13.66 24.91 Average 2.76 11.28 14.81 0.77 13.63 24.91 Design Data 2.76 11.50 15.91 0.72 14.63 26.14
Table 13.8 presents six case studies which Starkey used to determine the comminution circuit sizes. The text in red (i.e. Case 3a) is the selected scenario for the grinding mill sizing. The mill sizes selected by Starkey were based on a 17,500 t/d throughput. A pebble crusher was also suggested for increasing the throughput to 20,000 t/d in the future. Starkey advised that the pebble crusher would not be required for start-up.
The SAG mill size selected was a 10.363 m (34 ft) in diameter and 5.004 m (16.4 ft) equivalent grinding length. This was calculated to require an 11,600 kW twin pinion variable speed synchronous motor (5,800 kW per pinion). Two 6.096 m diameter (20 ft) ball mills which are 8.731 m (27.5 ft) long would also be required, along with two 5,700 kW single pinion fixed speed motors to drive the ball mills.
The report indicated that the four samples tested were sufficient for a preliminary sizing of equipment, but a larger representative sample should be used before any procurement strategies are considered.
Prodigy Gold Incorporated 13-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 13.8 Starkey (October 2011) – Summary of Calculated Mill Sizes and Grinding Equipment
Disch. Motor Installed Diam. ID EGL Aspect Drive D80 Calc. Req. Feed Rate Equipment Quantity (ft) (ft) Ratio (% Crit.) RPM (µm) (kW) kW HP (t/h – kt/d) Case 1a: 17.5 kt/d SAG mill + ball mill circuit, F80 = 152 mm, T80 = 1,700 µm (base case), 75th percentile ore hardness Crusher 0 SAG Mill 1 34.0 16.9 2.02 75 9.9 1,700 10,715 11,900 15,958 784.1 Ball Mill 1 24.0 31.6 1.32 75 11.9 74 10,294 10,300 13,812 17.5 Total Installed Power 21,010 22,200 29,770 Case 1b: 17.5 kt/d SAG mill + 2 ball mills circuit, F80 = 152 mm, T80 = 1,700 µm (base case), 75th percentile ore hardness Crusher 0 SAG Mill 1 34.0 16.9 2.02 75 9.9 1,700 10,715 11,900 15,958 784.1 Ball Mill 2 20.0 26.1 1.31 75 13.0 74 5,343 5,400 7,241 17.5 Total Installed Power 21,401 22,700 30,441 Case 2a: 20 kt/d SAG mill + ball mill circuit, F80 = 152 mm, T80 = 1,700 µm (base case), 75th percentile ore hardness Crusher 0 SAG Mill 1 36.0 16.7 2.16 75 9.6 1700 12,246 13,600 18,238 898.1 Ball Mill 1 24.0 36.1 1.50 75 11.9 74 11,765 11,800 15,824 20.0 Total Installed Power 24,011 25,400 34,061 Case 2b: 20 kt/d SAG mill + 2 ball mills circuit, F80 = 152 mm, T80 = 1,700 µm (base case), 75th percentile ore hardness Crusher 0 SAG Mill 1 36.0 16.7 2.16 75 9.6 1700 12,246 13,600 18,238 896.1 Ball Mill 2 20.0 29.9 1.49 75 13.0 74 6,106 6,200 8,314 20.0 Total Installed Power 24,459 26,000 34,866 table continues…
Prodigy Gold Incorporated 13-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Disch. Motor Installed Diam. ID EGL Aspect Drive D80 Calc. Req. Feed Rate Equipment Quantity (ft) (ft) Ratio (% Crit.) RPM (µm) (kW) kW HP (t/h – kt/d) Case 3a: 20 kt/d SABC circuit with 2 ball mills, F80 = 152 mm, T80 = 1,000 µm, 75th percentile ore hardness Recommended Design Crusher 1 600 805 SAG Mill 1 34.0 16.4 2.07 75 9.9 1,000 10,432 11,600 15,556 896.1 Ball Mill 2 20.0 27.5 1.37 75 13.0 74 5,617 5,700 7,644 20.0 Total Installed Power 21,667 23,600 31,648 Case 3b: Calc t/d start-up with 1 SAG mill + 2 ball mills (Case 2a mill sizes), F80 = 152 mm, T80 = 2,233 µm, 75th percentile hardness Crusher 0 SAG Mill 1 34.0 16.4 2.07 75 9.9 2,233 10,432 11,600 15,556 797.4 Ball Mill 2 20.0 27.5 1.37 75 13.0 74 5,617 5,700 7,644 17.8 Total Installed Power 21,666 2,300 30,843
Prodigy Gold Incorporated 13-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Hard samples were used in the grinding studies, to enhance the level of confidence in the comminution analysis. The quantity of samples and selection seem to be representative for a PEA study. The 10 m diameter SAG mill and the two 6 m diameter ball mills will be used for this study.
Based on the test results from the three leach programs, there does not appear to be any “preg-robbers” present in the samples that were tested. The samples have been taken from the random areas of the deposit highlighting the Mafic Volcanics and Granodiorite in the selections. The gold extraction by cyanide leaching has centered around 92% gold recovery for the three cyanidation test programs. This will be the assumed recovery for the PEA design. With the absence of preg-robbers, the design will be a CIP conventional flowsheet (Figure 17.1) together with a conventional carbon elution, electrowinning, and gold smelting/refining process.
Prodigy Gold Incorporated 13-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 14.0 MINERAL RESOURCE ESTIMATES
14.1 SUMMARY
Mineral resource estimates for the Magino property are reported in categories of Indicated and Inferred, in accordance with the CIM Definition Standards – For Mineral Resources and Mineral Reserves (CIM Code), as follows:
Table 14.1 Indicated Mineral Resource Estimate – November 2011
Reporting Cut-off Grade Tonnes Grade Gold Gold Category CIM Code (g/t Au) Density ('000) (g/t Au) ('000 g) ('000 oz) Indicated 0.35 2.72 67,555 1.00 67,690.5 2,176.3
Table 14.2 Inferred Mineral Resource Estimate – November 2011
Reporting Cut-off Grade Tonnes Grade Gold Gold Category CIM Code (g/t Au) Density ('000) (g/t Au) ('000 g) ('000 oz) Inferred 0.35 2.72 54,242 0.99 53,537.3 1,721.2
There may be inconsistences in the estimate tables, because the estimates are rounded since the figures are not precise calculations.
There are no Mineral Reserves provided in this report. 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.
14.2 DISCLOSURE
Mineral resources reported in Section 14.0 were prepared by the W. A. Dzick, Principal Consultant, an employee of Snowden under the supervision of the author who is an employee of Snowden.
Prodigy Gold Incorporated 14-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 14.2.1 KNOWN ISSUES THAT MATERIALLY AFFECT MINERAL RESOURCES
Snowden is not aware of any permitting, legal, title, taxation, socio-economic, and marketing or political issues that could materially affect the mineral resource estimates.
There are a number of items that will require addressing by Prodigy in order to update the mineral resource estimates for use in feasibility studies. These are discussed below.
LITHOLOGICAL RECORDS,INTERPRETATION OF ALTERATION ZONES AND VEIN STRUCTURES
The current database has incomplete and inconsistent records for lithology and alteration. A revised 3D interpretation of quartz-sericite-pyrite alteration zones and mineralised veins will be required for future mineral resource estimates.
The identification of 17 structural zones has allowed the deposit to be subdomained for local estimation purposes.
DENSITY MEASUREMENTS
A tonnage factor of 2.72 g/cm3 for granodiorite is used in reporting of mineral resource estimates. The February 2011 tonnage factor of 2.82 g/cm3 used in the February 2011 resource estimate was based on laboratory density determinations for ten samples (Turcotte, B., and Pelletier, C., 2009). Prodigy have since made approximately 700 additional determinations at site that indicate a lower tonnage factor of 2.72 for the Webb Lake stock, however the determinations require confirmation under laboratory conditions (Table 14.3).
Table 14.3 Prodigy Density Data
No. Average of SG Lithology Samples Value Mafic Meta-volcanics 68 2.81 Intermediate Meta-volcanics 34 2.78 Chemical Meta-sediments 23 3.03 Synvolcanic Felsic to Intermediate Intrusive 513 2.71 Felsic to Intermediate Intrusive 5 2.71 Mafic Intrusive 12 2.81 Diabase Dyke 60 3.01 Quartz Vein 1 2.64
Prodigy Gold Incorporated 14-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada HISTORICAL DATA
There are uncertainties in respect of pre-Golden Goose historical data that remain unverifiable (Section 6.0). The current estimates have not incorporated any of the sample grades from underground channel and core drilling of less than 50 m, as these sample groups have a potential bias. The potential for bias exists because descriptions of mine laboratory sample preparation and quality control methods in the period 1988 to 1992 do not conform to current industry standards and the small diameter core samples obtained from underground drilling would appear to be unrepresentative as well.
A comparison was made between underground drillholes less than 50 m total length and greater than 50 m total length and surface drillhole assay data after compositing to 5 m intervals (Figure 14.1 and Figure 14.2). The data was de-clustered within a region measuring 650 m east by 600 m north, and occurring within 295 m and 165 m relative elevations. The study indicated that the less than 50 m total length underground drilled composites were approximately 30% higher in grade than the surface drilled composites and the greater than 50 m total length underground drilled composites exhibited much less potential bias (Dzick, 2011).
Figure 14.1 Comparison of Declustered Composites – Surface Drilling Versus Underground Drilling Less Than 50 m Total Length
Prodigy Gold Incorporated 14-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.2 Comparison of Declustered Composites – Surface Drilling Versus Underground Drilling Greater Than 50 m Total Length
The lithological information from underground core drill logs, however is relevant and was used for geological interpretation.
Many historic (pre-dating Golden Goose) surface drillholes with adequate core diameter remain in the database and are incorporated into the mineral resource estimates. Intervals from these holes have been subjected to re-sampling and assaying, however this task is incomplete. Prodigy has embarked on an in-fill drilling and sampling program and it is expected that much of the historic assay information will be superseded for use in subsequent feasibility studies.
Prior resource estimates for Magino have included a component of the Measured category. No Measured resources are currently categorized by Snowden to reflect the uncertainties described previously.
Prodigy Gold Incorporated 14-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 14.3 ASSUMPTIONS,METHODS AND P ARAMETERS
The estimates were prepared in the following steps:
1. data validation – described in Section 12.0 Data Verification 2. data preparation – this and subsequent steps are summarized below 3. exploratory data analysis of gold data 4. geological interpretation and modelling 5. establishment of block models 6. compositing of assay intervals 7. consideration of grade outliers 8. variogram analysis 9. derivation of kriging plan 10. grade interpolation of gold values 11. deduction for prior mined volume 12. classification of estimates with respect to CIM Definition Standards 13. resource tabulation and resource reporting.
14.3.1 DATA PROVIDED
Prodigy focused its geological and resource evaluation program on assessment of the wide zones of quartz-pyrite-sericite altered granodiorite that host the former underground mine workings at Magino. Throughout 2011, Prodigy has re-logged existing core, taken samples of previously intact core to provide fuller coverage of sampling throughout the alteration zones, and updated the drillhole and sample database accordingly to ensure consistency.
For the purpose of this report, specific areas of the deposit were identified as uniquely similar in alteration, mineralization, structure as well as level of dissemination versus narrow, high-grade mineralization. Seventeen individual 3D solid domains were created utilizing lithology, sericite alteration, foliation information and assay information obtained from the 2011 drill campaign. Prodigy geologists believe these interpretations are accurately identifying areas in the deposit which contain similar style mineralization, in particular the northeast zone, the central zone and the southwest zone. Zones were created using Gemcom software by drawing rings in 25 m spaced cross sections and then connecting those rings to create 3D solids. The zones were more readily identified where more information was available from the current drilling campaign. Extension of these zones was carried across historic drilling information by utilizing grade to identify continuation of the interpreted zone. Detailed alteration modelling was not possible due to the lack of digitized data from historic drilling.
Prodigy Gold Incorporated 14-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada The database used by the author contains 512 surface DDHs (for a total of 103,491 m; average length 202 m) and 980 underground DDHs (for a total of 60,345 m; average length 62 m) (Figure 14.3 and Figure 14.4).
Ninety-four surface drillholes were completed in the period from 1997 to 2010 and comprise HQ and NQ diameter core. All underground drillholes were completed in the period 1984 to 1991 and are dominated by AQ diameter core with some BQ diameter core, clearly clustered around the underground workings and, in some cases subsequently stoped out. Since the sample volumes of the short underground drill cores are markedly less than the surface and longer underground drill cores, the author elected to use only the assays from the surface and longer underground drillholes in the grade estimates. The underground DDHs retained for the resource estimates comprised 484 drillholes for a total of 48,896 m, average length 100 m. Assay information from all the underground drill cores however was used to develop the geological interpretation through a categorical indicator method.
Prodigy also provided geological interpretations in the form of wireframes for the major rock units at Magino, as follows:
overburden Webb Lake granodiorite stock, and internal synvolcanic felsic and intermediate sills late stage diabase dyke.
Wireframes for the surface topography and underground mining areas were also provided.
Prodigy Gold Incorporated 14-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.3 Distribution of Underground Drillholes
Prodigy Gold Incorporated 14-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.4 Distribution of Surface Drillholes
14.3.2 GEOLOGICAL INTERPRETATION AND MODELLING
The area of interest covers 1,350 m parallel to the Goudreau deformation zone. The 075° trending Webb Lake granodiorite stock and the alteration zones that aggregate up to 300 m wide, dip steeply to depths of up to 600 m. At Magino the Webb Lake stock is covered by up to 30 m thickness of fluvio-glacial material. The felsic and mafic volcanic country rock surrounding the stock does contain examples of low grade mineralization encountered by drilling, however the main focus remains the broad low-grade alteration zones. A late stage diabase dyke transects the stock.
14.3.3 COMPOSITING OF ASSAY INTERVALS
The dominant sample interval is 1 m. A 5 m composite length interval was applied for compositing underground and surface cored drillholes used for resource estimation. Unsampled intervals within the mineralized zones were assigned a zero grade during the compositing process.
Basic statistics for gold composites are presented in Table 14.4 and Figure 14.5. Basic statistics for the composites located within the mineralized zones as modelled in this section are presented in Table 14.5 and Figure 14.6.
Prodigy Gold Incorporated 14-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada This subset was subsequently used for grade estimation.
Table 14.4 Statistics for all 5 m Composites
Coefficient of No. of Minimum Maximum Mean Variation Samples (g/t Au) (g/t Au) (g/t Au) (%) 28,342 0.0 355.83 0.74 4.24 Distribution (%) g/t Au 10.0 0.02 20.0 0.06 30.0 0.10 40.0 0.16 50.0 0.23 60.0 0.34 70.0 0.50 80.0 0.77 90.0 1.45 95.0 2.73 97.5 4.93 99.0 10.11
Prodigy Gold Incorporated 14-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.5 Log Histogram of all 5 m Composites
Table 14.5 Statistics for Mineralized Composites
Coefficient of No. of Minimum Maximum Mean Variation Samples (g/t Au) (g/t Au) (g/t Au) (%) 23,900 0.0 355.8 0.82 4.03 Distribution (%) g/t Au 10.0 0.04 20.0 0.09 30.0 0.15 40.0 0.20 50.0 0.29 60.0 0.39 70.0 0.57 80.0 0.87 90.0 1.65 95.0 3.10 97.5 5.60 99.0 11.47
Prodigy Gold Incorporated 14-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.6 Log Histogram of 5 m Gold Composites for Mineralized Zones
14.3.4 CONSIDERATION OF GRADE OUTLIERS AND ESTIMATION METHOD
Assay populations from gold deposits are generally skewed and contain high grade outliers that can introduce bias to mineral resource estimates. Estimation practice is to use grade caps or top cuts when using estimation methods such as inverse distance weighting or ordinary kriging (OK).
In the Magino case, the zones of mineralization are characterized by mixing of background low grade disseminated regions and higher grade vein styles (Figure 14.7). Snowden elected to use a distance grade capping strategy to address the mixed grade populations and grade outliers.
The impact of high gold grade outliers was controlled by using restricted search dimensions; a combination of “sample per hole” restrictions; octant search and maximum distance extrapolation restrictions for grades above 22 g/t Au. Grades were not capped further.
Prodigy Gold Incorporated 14-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 14.7 Log Probability Plot Indicating Mixed Populations
14.3.5 VARIOGRAM ANALYSIS
Grade continuity across each structural domain was investigated using variogram analysis in Snowden’s Supervisor software. Experimental variograms were modelled for each of the 17 structural domains and the granodiorite stock. For the few domains that lacked sample density for meaningful variography the granodiorite results were used. The spherical model parameters that were fitted to the variograms are provided in Table 14.6.
Prodigy Gold Incorporated 14-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 14.6 Variography by Domain
Angle 1 Angle 2 Angle 3 X Y Z Component – Rotation Rotation Rotation Range 1 Range 2 Range 3 Domain Increment (°) (°) (°) (m) (m) (m) C0 – 0.66 --- llsh1 C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 C0 – 0.66 --- llsh2 C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 C0 – 0.69 --- bend C1 – 0.29-30.0 0.0 114.0 21.5 14.5 22.5 C2 – 0.02 114.0 151.0 155.0 C0 – 0.42 --- c1 C1 – 0.440.0 90.0 -90.0 20.0 18.0 16.0 C2 – 0.13 183.0 480.0 187.0 C0 – 0.85 --- c2 C1 – 0.1439.5 22.5 134.0 19.5 30.0 31.0 C2 – 0.01 82.0 83.5 53.0 C0 – 0.84 --- n C1 – 0.1080.0 -44.0 -104.0 80.5 22.5 15.0 C2 – 0.06 126.5 115.5 233.0 C0 – 0.84 --- n1 C1 – 0.1080.0 -44.0 -104.0 81.0 23.0 15.0 C2 – 0.06 127.0 116.0 233.0 C0 – 0.81 --- nc C1 – 0.1410.0 -14.0 69.0 33.0 23.0 36.0 C2 – 0.04 250.0 187.0 298.0 C0 – 0.66 --- nc1 C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 C0 – 0.66 --- nc2 C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 C0 – 0.66 --- ne C1 – 0.2659.5 -19.0 -106.0 31.0 73.5 24.0 C2 – 0.08 146.0 250.0 157.0 C0 – 0.66 --- rich C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 table continues…
Prodigy Gold Incorporated 14-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Angle 1 Angle 2 Angle 3 X Y Z Component – Rotation Rotation Rotation Range 1 Range 2 Range 3 Domain Increment (°) (°) (°) (m) (m) (m) C0 – 0.42 --- se C1 – 0.5360.0 -5.0 19.0 12.5 6.5 17.5 C2 – 0.05 203.0 34.0 158.0 C0 – 0.78 --- sw C1 – 0.19174.0 26.0 24.0 42.5 54.0 35.5 C2 – 0.04 488.5 278.5 239.5 C0 – 0.66 --- sw1 C1 – 0.3226.5 -17.0 -169.5 80.0 100.0 50.0 C2 – 0.03 300.0 300.0 100.0 C0 – 0.73 --- sw2 C1 – 0.24155.0 -10.0 -2.0 14.5 20.0 16.0 C2 – 0.03 83.0 86.5 203.0 C0 – 0.36 --- sw3 C1 – 0.49357.0 -13.0 59.0 7.0 8.0 8.0 C2 – 0.15 163.5 71.5 198.5
14.3.6 ESTABLISHMENT OF BLOCK MODELS
A Vulcan bmf Project block model with cell dimensions of 10 m (X) 10 m (Y) 5 m (Z) was coded to reflect the surface topography, base of overburden, Webb Lake granodiorite contacts, late stage diabase dyke, and the 17 domain solids.
14.3.7 GRADE INTERPOLATION PARAMETERS
Gold grades were interpolated from 5 m length-weighted uncut composites into the domain solids by OK, using parameters established from the variographic analyses (Table 14.6).
The interpolation was controlled by:
minimum/maximum numbers of composites: set to 3/20 per block discretization: 2 x 2 x 1 m octant search type maximum samples per octant: 4 minimum number of octants: 2 maximum number of composites per hole: 2 high yield limit threshold value: 22 g/t Au
Prodigy Gold Incorporated 14-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada high yield limit ellipse: 60 x 12.5 x 35 m search ellipse: 170 x 25 x 120 m.
14.3.8 DENSITY ASSIGNMENT
A density factor of 2.72 was assigned to all blocks, based upon 2,268 SG determinations.
14.3.9 PRIOR MINING
A 3D wireframe model of the underground development and stopes was stored as percent volumes in the block model to ensure that the reported mineral resource estimates are depleted for prior mining.
14.3.10 RESOURCE CLASSIFICATION
The resource classification definitions used for this estimate are those published by the CIM in their document “CIM Definition Standards”.
Measured Mineral Resource: that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Indicated Mineral Resource: that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Inferred Mineral Resource: that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Prodigy Gold Incorporated 14-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada In order to identify those blocks in the Vulcan block model that could reasonably be considered as a mineral resource, the block model was filtered by a conceptual pit shell wireframe. A conceptual pit shell was developed using Whittle software in order to identify those parts of the block model that have reasonable prospects for eventual economic extraction. Parameters used were: 52° (overall pit slope); Cdn$1.25/t mining cost; Cdn$1,500/oz gold price; 95% process recovery; Cdn$7/t process cost.
The blocks occurring within the conceptual pit shell were classified as either Indicated or Inferred. Mineralized blocks lying outside the pit shell are too low grade and lack geological continuity to be considered as part of a mineral resource estimate.
After considering the distribution of composites in the deeper parts of the pit shell through the examination of geostatistical parameters from the kriging system, the author constructed a Vulcan solid for classification purposes. An Inferred Classification applies to all blocks in the mineral resource that lie beyond depths of 150 m but within the limit of the conceptual pit shell.
Above 150 m, resource blocks that lie within the search ellipse and have been estimated by at least 12 samples have been classified as Indicated Resource blocks. Snowden has not classified any Measured blocks after considering the uncertainty in geological interpretation, the high nugget environment, short ranges of gold grade continuity, and the use of assigned densities and the current drill spacing.
14.3.11 RESOURCE REPORTING
The mineral resource estimates are reported for a range of cut-off grades in Table 14.7 and Table 14.8. A gold cut-off grade of 0.35 g/t Au for mineral resource reporting is recommended as it reflects the parameters used in the pit shell construction and is reasonable, given that there are existing open pit operations in similar geological terrains in Québec that are currently reported at cut-off grades of 0.30 to 0.32 g/t Au.
Table 14.7 Indicated Mineral Resource Reported for a Range of Cut-off Grades
Reporting Cut-off Grade Tonnes Grade Gold Gold (g/t Au) ('000) (g/t Au) ('000 g) ('000 oz) 2.00 5,562 3.36 18,704.5 601.3 1.50 10,345 2.60 26,928.0 865.7 1.00 20,779 1.91 39,603.9 1,273.3 0.75 31,730 1.55 49,086.0 1,578.2 0.50 50,056 1.21 60,367.0 1,940.8 0.35 67,555 1.00 67,690.0 2,176.3
Prodigy Gold Incorporated 14-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 14.8 Inferred Resource Reported for a Range of Cut-off Grades
Reporting Cut-off Grade Tonnes Grade Gold Gold (g/t Au) ('000) (g/t Au) ('000 g) ('000 oz) 2.00 4,272 3.47 14,834.8 476.9 1.50 7,345 2.74 20,096.3 646.1 1.00 15,897 1.91 30,411.8 977.7 0.75 25,072 1.53 38,335.5 1232.5 0.50 40,464 1.10 47,747.9 1535.1 0.35 54,242 0.99 53,537.3 1721.2
Prodigy Gold Incorporated 14-17 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 15.0 MINERAL RESERVE ESTIMATES
As there is no supporting pre-feasibility study, no Measured or Indicated Resources are categorized as Mineral Reserves as defined by NI 43-101 regulations.
Prodigy Gold Incorporated 15-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 16.0 MINING METHODS
16.1 INTRODUCTION
Snowden provided a block model of the Magino mineral resource. After mining criteria were applied, 74.2 Mt of mill feed grading 1.15 g/t remained. Table 16.1 shows the mine production schedule for the life of the Project.
Table 16.1 Mine Production Schedule
Stripping Mill Feed Mill Feed Waste Total Ratio Grade Year ('000 t) ('000 t) ('000 t) (waste/mill) (g/t) 1 7,284.3 14,044.3 21,328.5 1.9 1.57 2 7,279.9 15,262.6 22,542.5 2.1 0.99 3 7,282.2 14,416.6 21,698.8 2.0 1.08 4 7,281.7 15,581.6 22,863.0 2.1 1.02 5 7,286.2 16,919.2 24,205.4 2.3 1.04 6 7,278.1 16,889.0 24,167.0 2.3 0.98 7 7,287.8 16,675.9 23,963.7 2.3 0.83 8 7,278.1 16,992.5 24,270.6 2.3 1.04 9 7,286.3 16,382.9 23,669.2 2.2 1.19 10 7,273.9 9,069.3 16,343.2 1.2 1.61 11 1,415.1 271.3 1,686.4 0.2 2.06 Total 74,233.5 152,504.8 22,6738.3 2.1 1.15
16.2 MINING M ETHOD
Tetra Tech selected surface mining using the open pit method, for several reasons.
The mineral resource begins at the outcrop. There is no overburden to be removed in order to access the mineral resource.
The gold in the mineral resource is disseminated throughout the structure. High- grade gold ore was mined historically using a stope-and-fill underground method and left behind the low-grade mill feed that will be mined using this bulk method.
FELs and trucks are used for the flexibility of mining from many working faces in order to provide a blended, consistent grade to the mill.
Prodigy Gold Incorporated 16-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada The strength of the rock in the mineralized material body does not lend itself to caving underground methods.
16.3 MINING C RITERIA
The mineral resource block model was imported into CAE Mining’s NPV Scheduler and was “reblocked” from 10 x 10 x 5 m to 20 x 20 x 10 m to shorten the time required to generate an economic model, ultimate pit, push backs and schedule.
The results of a Golder Associates Ltd. (Golder) geotechnical study in September 2011 were incorporated through importation of six slope regions or polygons that had associated pit wall angles (see Table 16.2).
Nested pits using the Lerchs-Grossman (LG) algorithm were generated resulting in a selection of pits from which to choose the final or ultimate pit limits. The parameters used to develop the ultimate pit are shown in Table 16.2.
Table 16.2 Pit Optimization Parameters
Parameters Items Units US$ Cdn$ Value Source Exchange Rate Cdn$ to US$ Cdn$/US$ 0.927 1.000 - Fred Mason, Prodigy – December 13, 2011 email Discount Rate - % - - 5.0 Fred Mason, Prodigy – December 13, 2011 email Production Rate - t/d milled - - 20,000 Fred Mason, Prodigy – December 13, 2011 email Metal Price Gold US$/oz 1,200 - - LT Metal Consensus Forecast – Q3 2011 Metal Recovery Gold % - - 95.0 Todd Kanhai, Tetra Tech – December 2011 table continues…
Prodigy Gold Incorporated 16-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Parameters Items Units US$ Cdn$ Value Source Operating Cost Mining Cdn$/t - 1.13 - Cris Wright, Tetra (Mineralized mined Tech – December material or 15, 2011 LOM Waste) calculations Added Haul Lift Cdn$/t - 0.01 - Fred Mason, from Depth mined Prodigy – December 13, 2011 email Stockpile Cdn$/t - - - No stockpile per Rehandle mined Fred Mason, (Mineralized Prodigy – December material) 2011 Processing Cdn$/t - 13.00 - Fred Mason, mined Prodigy – December 13, 2011 email General & Cdn$/t - 1.00 - Fred Mason, Administrative mined Prodigy – December (G&A) 13, 2011 email Tailings Cdn$/t - 1.00 - Fred Mason, mined Prodigy – December 13, 2011 email Block Model Imported Block m - - 10 x Wally Dzick, Model (BM) 10 x 5 Snowden – November 2011 delivered Scheduled Model - m - - 20 x Cris Wright, Tetra 20 x Tech – December 10 2011 Density Mineralized t/m3 - - 2.72 Wally Dzick, material Snowden – November 2011 delivered Waste t/m3 - - 2.72 Wally Dzick, Snowden – November 2011 delivered Dike t/m3 - - 3.02 Wally Dzick, Snowden – November 2011 delivered Underground t/m3 - - 0.01 Wally Dzick, Workings Snowden – November 2011 delivered Mining Dilution - % - - 5% Fred Mason, Prodigy – December 13, 2011 email table continues…
Prodigy Gold Incorporated 16-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Parameters Items Units US$ Cdn$ Value Source Mining Recovery - % - - 95 Fred Mason, Prodigy – December 13, 2011 email Minimum Mining - m - - 60 Fred Mason, Width Prodigy – December 13, 2011 email Bench Height - m - - 10 Cris Wright, Tetra Tech – December 2011 Pit Slope Angles Region I – ° - - 51.3 Pit Slope Design, Recommendations Northwest Golder – September 2011. Region II – ° - - 47.9 Pit Slope Design, North Golder – September 2011. Region III – ° - - 54.8 Pit Slope Design, Northeast Golder – September 2011. Region IV – ° - - 47.9 Pit Slope Design, Southeast Golder – September 2011. Region V – ° - - 54.8 Pit Slope Design, Southwest Golder – September 2011.
Tonnages are first diluted by 5% and then mined at a 95% recovery rate.
Data for the pit slope angles were derived from drill holes that are now within the current body of the pit. They do not intersect the pit walls so a new geotechnical study is underway to optimize the pit slope angles for the new open pit. Drill holes will be located at points intersecting the new open pit and structural and hydrogeologic data will be gathered.
16.4 MINE P RODUCTION S CHEDULE
In order to preserve Webb Lake while a permit to mine it is obtained, mining will not commence through it until Year 5 of the schedule. A 30 m buffer zone lies between the open pit and the lake. Mill feed, waste, and stripping ratio were balanced to reduce the maximum number of trucks and loaders required for the mining fleet and to reduce spikes in sustaining capital expenditures.
Table 16.3 shows the degree of confidence of the mill feed by classification. Note the first four years of mine life are mostly in the “Indicated” category.
Prodigy Gold Incorporated 16-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.3 Mine Production Schedule by Classification
Indicated Inferred Mill Feed Mill Feed Total Year ('000 t) ('000 t) ('000 t) 1 7,169.2 115.0 7,284.3 2 7,222.5 57.4 7,279.9 3 7,203.3 78.8 7,282.2 4 7,199.0 82.6 7,281.7 5 5,579.5 1,706.8 7,286.2 6 5,793.0 1,485.1 7,278.1 7 3,394.9 3,892.9 7,287.8 8 2,753.5 4,524.6 7,278.1 9 1,488.5 5,797.8 7,286.3 10 1,256.6 6,017.3 7,273.9 11 1,56.0 1,259.1 1,415.1 Total 49,216.1 25,017.4 74,233.5
After the mineral resource was diluted and recovered, a processing recovery of 95% of the contained gold was incorporated to determine the annual gold production. Table 16.4 through Table 16.14 show the mine production schedule annually by bench.
Table 16.4 Detailed Mine Production Schedule – Year 1
Mill Total Grade Pit Elevation Waste1 Feed2 Material Au3 Au4 Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio5 (ha) 1 400 2,013,330 35,955 2,049,285 2.13 2,458.7 56.0 44.02 2 390 9,083,294 1,648,121 10,731,415 1.36 71,829.6 5.5 - 3 380 944,135 1,307,215 2,251,350 1.39 58,214.7 0.7 - 4 370 688,633 1,124,742 1,813,375 1.49 53,774.9 0.6 - 5 360 511,318 1,079,527 1,590,845 1.59 55,112.8 0.5 - 6 350 334,131 980,124 1,314,255 1.74 54,695.6 0.3 - 7 340 300,335 752,555 1,052,890 1.99 48,046.1 0.4 - 8 330 169,079 356,031 525,110 2.02 23,151.1 0.5 - Subtotal - 14,044,255 7,284,270 21,328,525 1.57 367,283.5 1.9 44.02 Notes: 1. As-mined waste. 2. Diluted with 5% 0.0 g/t material and recovered at a 95% rate. 3. Calculated from the gold recovered in processing. 4. Gold recovered after 5% mining dilution, 95% mining recovery, and 95% processing recovery. 5. Tonnes of waste divided by tonnes of mineralized material.
Prodigy Gold Incorporated 16-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada In Year 1, the open pit takes the mostly accessible high-grade material and excavates waste early to eliminate waste spikes in subsequent years of production. Webb Lake is avoided.
Table 16.5 Detailed Mine Production Schedule – Year 2
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 450,160 - 450,160 - - - 47.61 2 390 905,823 185,177 1,091,000 0.89 5,321 4.9 - 3 380 5,640,504 1,894,186 7,534,690 0.89 54,104 3.0 - 4 370 3,183,789 1,727,611 4,911,400 0.91 50,609 1.8 - 5 360 2,692,442 1,537,883 4,230,325 0.95 46,812 1.8 - 6 350 2,254,843 1,474,397 3,729,240 0.95 44,826 1.5 - 7 340 ------8 330 61,010 258,615 319,625 1.81 15,040 0.2 - 9 320 74,038 202,067 276,105 2.39 15,500 0.4 - Subtotal - 15,262,610 7,279,935 22,542,545 0.99 232,211 2.1 47.61
In Year 2, the open pit develops the benches that were opened up in Year 1. One additional bench is developed and eight different benches are mined. Webb Lake is avoided.
Table 16.6 Detailed Mine Production Schedule – Year 3
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------52.31 2 390 2,078,080 - 2,078,080 - - - - 3 380 3,370,505 14,075 3,384,580 0.57 259 239.5 - 4 370 2,083,591 265,134 2,348,725 0.72 6,145 7.9 - 5 360 ------6 350 116,736 76,394 193,130 1.01 2,492 1.5 - 7 340 2,049,662 1,440,678 3,490,340 0.96 44,507 1.4 - 8 330 1,773,927 1,507,403 32,181,330 0.98 47,678 1.2 - 9 320 1,605,891 1,849,179 3,455,070 1.13 66,896 0.9 - 10 310 1,294,450 1,949,995 3,244,445 1.17 73,184 0.7 - 11 300 43764 179,296 223,060 1.90 10,979 0.2 - Subtotal - 14,416,607 7,282,153 21,698,760 1.08 252,140 2.0 -
In Year 3, the open pit develops two additional benches and nine different benches are mined. Webb Lake is avoided.
Prodigy Gold Incorporated 16-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.7 Detailed Mine Production Schedule – Year 4
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------52.31 2 390 ------3 380 ------4 370 3,019,690 137,610 3,157,300 0.63 2,768 21.9 - 5 360 4,981,597 571,148 5,552,745 0.73 13,417 8.7 - 6 350 4,616,964 684,636 5,301,600 0.76 16,833 6.7 - 7 340 327,726 379,554 707,280 0.89 10,919 0.9 - 8 330 ------9 320 ------10 310 ------11 300 948,329 1,624,571 2,572,900 1.06 55,169 0.6 - 12 290 880,802 1,646,368 2,527,170 1.09 57,745 0.5 13 280 634,271 1,491,664 2,125,935 1.10 52,622 0.4 14 270 171,919 746,106 918,025 1.26 30,337 0.2 Subtotal - 15,581,297 7,281,658 22,862,955 1.02 239,811 2.1 52.31
In Year 4, the open pit develops three additional benches and eight different benches are mined. Webb Lake is avoided.
Table 16.8 Detailed Mine Production Schedule – Year 5
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 1,304,240 - 1,304,240 - - - 62.50 2 390 2,270,740 3,180 2,273,920 1.25 128 714.1 - 3 380 ------4 370 ------5 360 ------6 350 ------7 340 4,103,229 523,016 4,626,245 0.77 12,895 7.8 - 8 330 4,115,318 1,061,432 5,176,750 0.87 29,671 3.9 - 9 320 3,784,511 1,199,004 4,983,515 0.90 34,666 3.2 - 10 310 405,398 580,947 986,345 1.01 18,833 0.7 - 11 300 ------12 290 ------13 280 ------14 270 299,763 703,897 1,003,660 0.98 22,076 0.4 - 15 260 306,388 1,287,852 1,594,240 1.18 48,805 0.2 - table continues…
Prodigy Gold Incorporated 16-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 16 250 213,225 1,118,240 1,331,465 1.22 43,918 0.2 - 17 240 116,347 808,653 925,000 1.24 32,308 0.1 - Subtotal - 16,919,158 7,286,222 24,205,380 1.04 243,301 2.3 62.50
In Year 5, the open pit develops three additional benches and ten different benches are mined. Webb Lake is mined. The final pit limits are reached for Bench 1 at the 400 m level.
Table 16.9 Detailed Mine Production Schedule – Year 6
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 326,400 - 326,400 - - - - 3 380 2,407,332 18,908 2,426,240 1.29 784.65 127.3 - 4 370 2,501,279 44,641 2,545,920 1.07 1,541.54 56.0 - 5 360 2,438906 118,941 2,557,100 0.95 3,600.76 20.6 - 6 350 ------7 340 ------8 330 ------9 320 ------10 310 3,101,516 763,814 3,865,330 0.79 19,441.81 4.1 - 11 300 1,954,421 1,285,084 3,239,505 0.89 36,866.28 1.5 - 12 290 1,829,568 1,332,422 3,161,990 0.88 37,812.11 1.4 - 13 280 1,625,541 1,405,689 3,031,230 0.87 39,125.21 1.2 - 14 270 579,722 664,188 1,243,910 0.84 17,902.74 0.9 - 15 260 ------16 250 ------17 240 ------18 230 67,123 650,957 718,080 1.34 28,025.59 0.1 - 19 220 25,992 482,658 508,650 1.40 21,665.31 0.1 - 20 210 23,444 328,821 352,265 1.33 14,044.63 0.1 - 21 200 7,735 182,685 190,420 1.29 7,564.18 0.0 - Subtotal - 16,888,980 7,278,060 24,167,040 0.98 228,374.88 2.3 62.50
In Year 6, the open pit develops four additional benches and 13 different benches are mined. The final pit limits are reached for Benches 2 to 5 from 390 to 360 m levels.
Prodigy Gold Incorporated 16-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.10 Detailed Mine Production Schedule – Year 7
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 ------3 380 ------4 370 ------5 360 ------6 350 2,537,980 85,000 2,622,980 1.04 2,840 29.9 - 7 340 2,389,267 81,693 2,470,960 1.12 2,955 29.2 - 8 330 2,372,855 44,005 2,416,860 1.62 2,290 53.9 - 9 320 2,355,446 19,544 2,374,990 3.02 1,896 120.5 - 10 310 ------11 300 1,203,916 251,444 1,455,360 0.72 5,788 4.8 - 12 290 8,218 57,062 65,280 1.29 2,370 0.1 - 13 280 ------14 270 811,723 692,267 150,3990 0.80 17,732 1.2 - 15 260 1,365,187 1,342,498 2,707,685 0.78 33,722 1.0 - 16 250 1,212,375 1,351,765 2,564,140 0.79 34,120 0.9 - 17 240 1,071,738 1,321,372 2,393,110 0.82 34,659 0.8 - 18 230 990,935 1,288,975 2,279,910 0.84 34,856 0.8 - 19 220 356,525 752,153 1,108,405 0.85 20,619 0.5 - 20 210 ------21 200 ------Subtotal - 16,675,891 7,287,779 23,963,670 0.83 193,847 2.3 62.50
In Year 7, the open pit develops no additional benches and 12 different benches are mined. The final pit limits are reached for Benches 6 to 9 from 350 to 320 m levels.
Prodigy Gold Incorporated 16-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.11 Detailed Mine Production Schedule – Year 8
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 ------3 380 ------4 370 ------5 360 ------6 350 ------7 340 ------8 330 ------9 320 ------10 310 2,373,765 12,855 2,386,620 3.75 1,550 184.7 - 11 300 2,382,114 5,106 2,387,220 2.42 396 466.5 - 12 290 3,279,087 261,113 3,540,200 0.74 6,203 12.6 - 13 280 3,162,740 374,445 3,537,185 0.90 10,821 8.4 - 14 270 889,496 460,524 1,350,020 0.99 14,740 1.9 - 15 260 755,974 517,586 1,273,560 1.06 17,580 1.5 - 16 250 608,666 566,974 1,175,640 1.10 20,034 1.1 - 17 240 551,626 624,164 1,175,790 1.10 22,125 0.9 - 18 230 461,261 638,069 1,099,330 1.12 22,883 0.7 - 19 220 932,674 1,067,066 1,999,740 1.02 34,905 0.9 - 20 210 1,136,097 1,687,368 2,823,465 0.99 53,709 0.7 - 21 200 458,988 1,062,857 1,521,845 1.13 38,485 0.4 - Subtotal - 16,992,490 7,278,125 24,270,615 1.04 243,402 2.3 62.50
In Year 8, the open pit develops no additional benches and 12 different benches are mined. The final pit limits are reached for Benches 10 to 13 from 310 to 280 m levels.
Prodigy Gold Incorporated 16-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.12 Detailed Mine Production Schedule – Year 9
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 ------3 380 ------4 370 ------5 360 ------6 350 ------7 340 ------8 330 ------9 320 ------10 310 ------11 300 ------12 290 ------13 280 ------14 270 2,180,448 56,402 2,236,850 1.02 1,857 38.7 - 15 260 2,108,654 73,646 2,182,300 0.96 2,274 28.6 - 16 250 2,054,399 118,221 2,172,620 0.86 3,257 17.4 - 17 240 2,018,143 172,172 2,190,315 1.03 5,714 11.7 - 18 230 1,844,561 274,709 2,119,270 1.12 9,860 6.7 - 19 220 1,775,688 342,982 2,118,670 1.20 13,282 5.2 - 20 210 1,345,088 414,842 1,759,930 1.30 17,291 3.2 - 21 200 497,152 451,953 949,105 0.85 12,352 1.1 - 22 190 810,020 1,505,190 2,315,210 1.10 53,287 0.5 - 23 180 611,739 1,150,821 1,762,560 1.16 42,799 0.5 - 24 170 450,342 920,538 1,370,880 1.23 36,260 0.5 - 25 160 300,524 765,716 1,066,240 1.27 31,332 0.4 - 26 150 182,141 503,299 685,440 1.34 21,759 0.4 - 27 140 130,101 359,499 489,600 1.47 16,983 0.4 - 28 130 42,408 99,032 141,440 1.74 5,537 0.4 - 29 120 24,609 51,551 76,160 2.17 3,595 0.5 - 30 110 4,124 17,636 21,760 2.90 1,645 0.2 - 31 100 2,740 8,140 10,880 3.14 822 0.3 - Subtotal - 16,382,883 7,286,347 23,669,230 1.19 279,905 2.2 62.50
In Year 9, the open pit develops ten additional benches and 18 different benches are mined. The final pit limits are reached for Benches 14 to 19 from 270 to 220 m levels.
Prodigy Gold Incorporated 16-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.13 Detailed Mine Production Schedule – Year 10
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 ------3 380 ------4 370 ------5 360 ------6 350 ------7 340 ------8 330 ------9 320 ------10 310 ------11 300 ------12 290 ------13 280 ------14 270 ------15 260 ------16 250 ------17 240 ------18 230 ------19 220 ------20 210 272,000 - 272,000 - - - - 21 200 1,503,858 506,157 2,010,015 1.24 20,160 - 22 190 1,373,717 526,033 1,899,750 1.18 19,994 - 23 180 1,264,592 662,138 1,926,730 1.20 25,558 - 24 170 1,075,884 707,906 1,783,790 1.27 29,018 - 25 160 949,065 747,385 1,696,450 1.44 34,491 - 26 150 755,585 831,165 1,586,750 159 42,571 - 27 140 631,481 768,959 1,400,440 1.75 43,171 - 28 130 489,792 876,658 1,366,450 1.76 49,600 - 29 120 369,278 789,402 1,158,680 1.87 47,766 - 30 110 253,426 672,874 926,300 1.97 42,715 - 31 100 130,601 185,219 315,820 3.74 22,258 - Subtotal - 9,069,281 7,273,894 16,343,175 1.61 377,003 1.2 62.50
In Year 10, the open pit develops no additional benches and 12 different benches are mined. The final pit limits are reached for Benches 20 to 30 from 210 to 110 m levels.
Prodigy Gold Incorporated 16-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 16.14 Detailed Mine Production Schedule – Year 11
Mill Total Grade Pit Elevation Waste Feed Material Au Au Strip Area Bench (m) (t) (t) (t) (g/t) (tr oz) Ratio (ha) 1 400 ------62.50 2 390 ------3 380 ------4 370 ------5 360 ------6 350 ------7 340 ------8 330 ------9 320 ------10 310 ------11 300 ------12 290 ------13 280 ------14 270 ------15 260 ------16 250 ------17 240 ------18 230 ------19 220 ------20 210 ------21 200 ------22 190 ------23 180 ------24 170 ------25 160 ------26 150 ------27 140 ------28 130 ------29 120 ------30 110 ------31 100 49,702 363,738 413,440 1.11 12,924 0.1 - 32 90 116,217 449,543 565,760 2.08 30,038 0.3 - 33 80 65,194 304,726 369,920 2.32 22,724 0.2 - 34 70 28,951 156,009 184,960 2.55 12,782 0.2 - 35 60 9,795 109,885 119,680 3.03 10,688 0.1 - 36 50 1,411 20,349 21,760 5.38 3,522 0.1 - 37 40 27 10,853 10,880 3.58 1,250 0.1 - Subtotal - 271,297 1,415,103 1,686,400 2.06 93,929 0.0 62.50
Total: Year 1 to 11 152,504,750 74,233,545 226,738,295 1.15 2,751,207 2.1 62.50
Prodigy Gold Incorporated 16-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada In Year 11, the open pit will develop six additional benches, and seven different benches will mined. The final pit limits will have been reached.
16.5 GOLD P RODUCTION S CHEDULE
After the mineral resource was diluted and recovered, a processing recovery of 95% of the contained gold was incorporated to determine the annual gold production. Table 16.15 shows the gold production schedule.
Table 16.15 Gold Production Schedule
Year Production ('000 tr oz) 1 367.3 2 232.2 3 252.1 4 239.8 5 243.3 6 228.4 7 193.8 8 243.4 9 279.9 10 377.0 11 93.9 Total 2,751.2
To gain a better understanding of the confidence of the mineral resource, Table 16.16 differentiates the gold production by classification (Indicated, Inferred).
Table 16.16 Gold Production Schedule by Classification
Year Indicated Inferred Production ('000 tr oz) ('000 tr oz) ('000 tr oz) 1 360.5 6.8 367.3 2 230.1 2.1 232.2 3 249.4 2.7 252.1 4 237.2 2.6 239.8 5 175.5 67.8 243.3 6 162.4 65.9 228.4 7 92.5 101.4 193.8 8 90.3 153.1 243.4 9 49.1 230.8 279.9 10 93.4 283.6 377.0 table continues…
Prodigy Gold Incorporated 16-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Year Indicated Inferred Production ('000 tr oz) ('000 tr oz) ('000 tr oz) 11 14.9 79.0 93.9 Total 1,755.3 995.9 2,751.2
It can be seen that early in the mine’s life most gold ounces come from indicated resources while at the end of the mine’s life, at depth, the reverse is true.
16.6 HAUL R OADS
Main haul roads for the Project will be designed 27 m wide to accommodate a 200 t class, off-highway haul truck with two-way traffic. A factor of 3.5 was applied to the width of a CAT 789, which is 7.67 m wide, resulting in a 26.85 m width. Ramps will be at an 8% grade.
16.7 EQUIPMENT
Preliminary equipment selection is complete. Table 16.17 is a list of equipment used at the mine, grouped by function.
Table 16.17 Equipment List
Category Description Quantity Drilling/Blasting Equipment Drills (Primary) Percussion Crawler (4.5"-5.5") 2 Drills (Secondary) Percussion Crawler (2.5"-4.0") 1 ANFO Truck ANFO Truck (1,000 lb/min) 1 Stemming Loader FEL (CAT 914: 1.7-yd3 class) 1 Mining Equipment Front-End Loaders FEL (CAT 994: 25-yd3 class) 2 Haul Trucks Haul Truck (CAT 789: 200-ton class) 5 Support Equipment Wheel Dozers Wheel Dozer (CAT 834H: 15.2-ft blade) 1 Water Truck Water Truck (10,000 gal) 1 Graders Grader (CAT 16M: 16-ft blade) 1 Vibratory Compactor Vibratory Compactor (CAT CP64) 1 Fuel/Lube Truck Fuel/Lube Truck (3,000 gal) 1 Mechanics Service Truck Mechanics Service Truck (F350 4x4 (diesel)) 1 Welding Truck Welder Truck (F350 4x4 (diesel)) 1 Tire Truck Tire Service Truck (with tire manipulator) 1 Rough Terrain Forklift Rough Terrain Forklift (Sellick SD-100) 1 table continues…
Prodigy Gold Incorporated 16-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Category Description Quantity Snow Plow Snow Plow / Sanding Truck (off-road) 1 Waste Rock Dump Equipment Track Dozers (Type 1) Track Dozer (CAT D10T: 17.3-ft SU blade) 2 Shop Equipment Track Dozers (Type 2) Track Dozer (CAT D6K XL: 10.8-ft SU blade) 1 Integrated Tool Carriers Integrated Tool Carrier (CAT IT14G Equivalent) 1 Small Excavator Excavator (1.3-2.1 yd3 class) 1 Mobile Crane Truck-Mounted Hydraulic Crane w/ Telescopic 1 Boom (150 ft/75 ton) Shop Forklift Shop Forklift (Hyster H100XM) 1 Maintenance Management Equipment Records 1 System Miscellaneous Equipment Ambulance Ambulance 1 Crew Cab Trucks Pick-up Truck (1-ton class) 6 Pick-up Trucks Pick-up Truck (3/4-ton class) 12 Mine Pumps Mine Pumps (pit dewatering pumps) 1 Light Plant Light Plant/Towers (four lights) 2 Dispatch System Dispatch System (50 units) 1 Mobile Radios Communication Equipment 50 Safety Equipment Safety Masks, First Aid, etc. 1 Engineering/Geology Computers, Software, Licenses 1 Equipment
The drilling/blasting equipment was selected based on hard material with no permafrost.
Mining equipment was selected based on mobility, flexibility, and excess loader capacity. Five trucks are listed for Year 1, to operate 24 h/d, 7 d/wk, 365 d/a. Scheduled mill feed does not require 24/7/365 operations in the first year. More waste will be moved than necessary to ensure total mine production targets are consistent.
The support equipment was selected to meet maintenance requirements for mining equipment of this size, and to accommodate the 27 m road width. Waste dump equipment was sized to regrade the dump at a 17.0 Mt/a rate. Shop equipment was selected to meet the demands of a 67,000 t/d surface mine and associated equipment.
All remaining equipment is grouped into the “Miscellaneous” category.
Prodigy Gold Incorporated 16-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 17.0 RECOVERY METHODS
17.1 PROCESS D ESCRIPTION
Based on the results of previous test work, there is no indication of refractory properties or major contamination from associated minerals. Tetra Tech therefore selected a conventional crushing circuit with two grinding stages, followed by cyanide leach, and CIP extraction. The gold will be recovered from the carbon by elution, followed by electrowinning and doré smelting. Carbon regeneration has also been included. An overall block flow diagram is provided in Figure 17.1.
The plant is designed to operate 24 h/d, 365 d/a, and process 7 Mt of mineralized material (dry) annually, at a plant availability of 95%. The nominal daily throughput will be 20,000 t of dry material per day; the plant will probably operate on two 12-hour shifts per day, though other options may be considered.
The run-of-mine (ROM) mineralized material will be trucked by mine haulage trucks to the crushing plant and dumped directly to the primary gyratory crusher. The gyratory crusher product will then be conveyed by apron feeder and conveyor to the coarse material stockpile, to provide a continuous feed and eliminate surging. Apron feeders will then draw off the material at a regular rate from below the stockpile and conveyors will deliver the material to the SAG mill feed chute. The material will be ground as a slurry.
The SAG mill product will then be pumped to a splitter box that will feed two hydrocyclone clusters’ feed sumps. These two hydrocyclone clusters and the two ball mills will operate in parallel trains, which will include thickening, cyanidation, and CIP extraction, before rejoining in the tailings feed-box.
Each hydrocyclone cluster will be in closed circuit with a ball mill. The underflow from the hydrocyclones will be delivered to the ball mills for grinding. The overflows from the hydrocyclone clusters will comprise the feed to two 12 tank leach trains operating in parallel. The overflow from the hydrocyclones will be delivered to the leach feed thickeners. The thickener will be used to raise the solids density of the slurry to approximately 50%. Lime will be added in the thickener to raise the pH level to 10.5, which will lower the volatility of the cyanide when it is added to the first leach tank.
The thickener underflow will be pumped over a trash screen to the first tank in the 12-tank leach train. The thickener overflow will be used as process make-up water where required, especially during the winter when recycled water from the tailings dam may be unavailable.
Prodigy Gold Incorporated 17-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 17.1 Overall Magino Block Flow Diagram
Prodigy Gold Incorporated 17-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Sodium cyanide will be added to the first tank for the gold leach, and perhaps to subsequent tanks to maintain a constant extraction rate. The pulp will decant to each subsequent tank until it reaches the 12th tank over the course of 48 h. Once the gold is in solution, it will enter the CIP tanks (six operating and one standby) and will be adsorbed onto the carbon.
Carbon will be prevented from flowing with the slurry by in tank screens that will reverse the carbon flow counter current to the incoming leached pulp. Fresh/reactivated carbon will be fed to the last tank in the CIP train, and a safety screen will extract any broken carbon that escapes through the in tank screens. The undersize (slurry) from the screen will be pumped to the TSF.
Water from the tailings pond that will be recycled for use in the process or water that will be released from the TSF, will report to the cyanide destruction circuit. The size of the water catchment pond at the tailings dam will need to be sized to prevent the catchment pond from freezing solid in winter. Some of the cyanide will be destroyed by exposure to the elements in the TSF, but any outflow from the dam that will not be recycled to the mill will need to be treated in accordance with the approved discharge permit.
The gold-loaded carbon will be pumped from the first CIP tank to the loaded carbon wash screen. The oversize (carbon fraction) from the screen will be pumped to the elution plant and the undersize will be recycled back into the CIP circuit.
In the elution plant, the loaded carbon will be washed with recirculating hydrochloric acid in the wash vessel, neutralized with sodium hydroxide, and then washed with process water prior to being pumped to the loaded carbon holding tank. The neutralized spent wash acid will be pumped to the tailings pond. Historical test work has not identified any recoverable silver in the mineralized material; however if silver recovery becomes an option, then nitric instead of hydrochloric acid will be required.
The loaded carbon will be then pumped into the stripping vessel in the stripping plant. The gold will be stripped from the carbon using a hot caustic-cyanide solution in the stripping vessel. The solution will be maintained at a temperature of 135°C and an internal pressure of 350 kPa. The stripping solution will be heated with a solution heater and heat exchanger, and then pumped into the stripping vessel. The gold laden solution will exit the stripping vessel by passing through the heat exchanger and flowing into the pregnant solution storage tank.
The pregnant solution will be pumped into electrolytic cells where the gold will be plated out on steel wool cathodes (stainless steel anode). The stripped solution will exit the electrolytic cell into a storage tank and reused for the next elution cycle after the cyanide strength is restored.
The gold laden steel wool will be smelted in a tilting crucible with the addition of fluxes, typically sodium borate, sodium carbonate, and silica. The impurities are slagged off and the gold will be poured into doré moulds. The slag will be recycled
Prodigy Gold Incorporated 17-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada back to the gyratory crusher to re-enter the process to minimize gold losses. Depending on the recovered gold purity, the plant will probably recover 4 to 5 koz bars (35 kg each) every week. To reduce the theft risk, Tetra Tech proposes that all of these bars are smelted on the same day in a particular week, and 24 h after the gold residue is removed from the electrowinning cell and has been dried.
The stripped carbon will be regenerated in a 650°C indirectly-fired kiln for 30 min in the absence of air. It will then be cooled in a quench tank. The carbon will be given a final acid wash to ensure that all of the adsorbed gold has been desorbed. Prior to being re-introduced into the CIP circuit, the carbon will be screened to remove any fine carbon which may adsorb gold. If the fines are allowed back into CIP, they would cause gold losses for the process. Fresh carbon will be added to replace attrited carbon after it has been washed and screened to remove any carbon broken in transit.
17.2 PROCESS D ESIGN C RITERIA
The design criteria have been based on the previous laboratory work completed by Lakefield Research and KCA, and recently, G&T and Starkey. The key items have been listed in Table 17.1.
Table 17.1 Process Design Criteria
Criteria Value Throughput Mill Availability 95% Operating Days 350 Annual Throughput 7,000,000 t/a Daily Throughput 20,000 t/d Hourly Throughput 833 t/h Feed Gold Grade 1.10 g/t Mineralized Material Specific Gravity 2.72 t/m3 Grind
SAG Power Index, WSAG 11.28 kWh/t Abrasion Index (Ai) 0.285 SAG Recirculating Load 15% SAG Feed Size -340 mm
SAG Transfer Size, T80 1,000 µm Ball Mill Work Index (BWI) 15.91 kWh/t
Ball Mill Product Size, P80 74 µm Ball Mill Recirculating Load 350% Leach Leach Time 48 h Leach Pulp Solids Density 50% table continues…
Prodigy Gold Incorporated 17-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Criteria Value Cyanide Concentration 0.25 kg/t Lime Addition 1.07 kg/t Pulp pH 10.5 Gold Recovery 92% CIP Carbon Size 6 # x 16 # (mesh) Carbon Requirement 25 kg/m3 pulp Retention Time 1 h per stage Cyanide Destruction Retention Time 1 h Sodium Metabisulphite 14 g/t Copper Sulphate 14 g/t
17.3 MAJOR E QUIPMENT L IST
The major pieces of equipment for the Project that have been used to determine the capital and operating costs are provided in Table 17.2.
Table 17.2 Major Equipment List
Unit Power Equipment Quantity Size (kW/unit) Stockpile Feed Conveyor 1 300 m length x 106.7 cm wide 75 Primary Gyratory Crusher 1 107 cm x 165 cm 300 SAG Mill Feed Conveyor 1 200 m length x 106.7 cm wide 75 SAG Mill and Drive 1 10.3 m diameter x 5.0 m 11,600 Grinding Mill Liner Crane 2 - 56 Ball Mills and Drives 2 6.1 m diameter X 8.7 m length 5,700 Leach Feed Thickeners 2 122 m diameter 56 Leach Tanks and Agitators 12 15 m diameter x 15 m high 150 CIP Tanks with Screens 7 9.8 m diameter x 9.8 m high 150 Gold Elution System 1 5,443 kg capacity 7 Electrowinning Cells 1 3.54 m3 cell - Smelting Furnace 1 129 kg capacity - Carbon Regeneration Kiln 1 181 kg/h 1
An allowance was made for pumps to move slurry and solutions where required. Also, equipment for reagent preparation, storage, and an assay/test laboratory have been included; additional offices and maintenance facilities may be needed for other disciplines. Camp costs were also not included.
Prodigy Gold Incorporated 17-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 17.4 REAGENTS
The reagents used in the different sections of the process are described below.
LEACHING
The primary reagent used in leaching will be sodium cyanide. Traditionally this was prepared on site by dissolving cyanide briquettes in a caustic soda solution. However, the Magino mill will probably be able to purchase pre-mixed cyanide solution in tanker deliveries. Lime will also be required to adjust the pH in the leach to prevent the cyanide from becoming volatile. Prior to the leach, the pulp will be thickened, which will require a flocculant.
CARBON-IN-PULP
Carbon adsorbs the leached gold from solution.
CARBON ASH
Prior to elution of the carbon, it will be washed with hydrochloric acid. The acid will be neutralized by sodium hydroxide, and a scale suppressant added to remove lime scale from the carbon and pipelines.
CYANIDE DESTRUCTION
While some cyanide degradation will occur in the tailings pond, return water which is drawn from the tailings dam for process water and water to be discharged will still require cyanide destruction. A variant of the INCO sulphur dioxide process is being proposed in the design. The sulphur dioxide may be provided by the use of sodium metabisulphite, and copper sulphate will also be used as a catalyst to the reaction.
ELUTION
The gold elution will be carried out using a hot caustic-cyanide solution in the stripping vessel. This will require sodium cyanide as well as sodium hydroxide.
SMELTING
Smelting will require fluxes such as borax, sodium carbonate, and silica flour as well as deionized water for the induction coils.
Prodigy Gold Incorporated 17-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 17.5 PROCESS P LANT
The process plant is located north-west of the pit. It is centrally located close to the pit and the low grade stockpile to optimize the haulage of mill feed from the pit and the low grade stockpile. Both the dump pocket and the primary crusher will be housed in an open structure. The primary and twin secondary grinding circuits, twin leach, twin CIP, elution, and smelting will be housed in a heated building to protect the equipment from the cold winter weather.
Prodigy Gold Incorporated 17-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 18.0 INFRASTRUCTURE
18.1 INTRODUCTION
The Magino property is located in Finan Township within the Algoma District of Ontario, approximately 40 km northeast of Wawa. The Magino mine can be reached by a 14 km all-weather gravel road (Goudreau Road) from the town of Dubreuilville, which is located at the end of Highway 519. Highway 519 connects into the Trans- Canada Highway (Highway 17). Railway sidings are located in the town of Dubreuilville, and appear to connect into a greater railway network.
A 44 kV power line extending from Goudreau to Lochalsh currently services the Magino mine.
18.2 OFF S ITE I NFRASTRUCTURE
All the buildings from the previous underground mining operation have been removed and the tailings ponds completely filled. The mine portal was closed but the 44 kV power line across the property remains in operating condition and currently provides power for the exploration program.
18.2.1 ACCESS ROADS
The Magino property is connected to Highway 17 (Trans-Canada Highway) via Highway 519 and Goudreau Road (Figure 18.1). It is understood that Highway 519 is operated and maintained by Ontario Ministry of Transportation. Goudreau Road is a gravel all-weather road owned by the crown. It is maintained and operated by the Ontario Ministry of Natural Resources (MNR) on an as-needed basis when funding is available. MNR does not plow snow from the road in the winter. Currently the road is used by the neighboring Island Gold Richmont mine, and is open for public use.
EBA collected information on Goudreau Road through telephone conversations with MNR, but has not conducted a field assessment. Since a field assessment has not yet been completed, there are a number of factors regarding the usability of the road which are still unknown. Anticipated additional traffic loadings may necessitate upgrades and additional maintenance, including increased road gravel thickness, bridges and culvert upgrading, etc.
Prodigy Gold Incorporated 18-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada There is an existing railway crossing Goudreau Road in the vicinity of the Township of Dubreuilville. As this is an existing crossing we have assumed that there will not be any operational or functional issues associated with this crossing.
During the mine’s operating period, the road will primarily be used to transport crew, supplies and mine concentrate, through the use of buses, trucks, and armored vehicles. This additional traffic is not expected to exceed 100 vehicles per day, and accordingly will likely not necessitate significant amounts of additional maintenance beyond what is currently being performed.
The MNR has indicated that they would like to establish a memorandum of understanding (MOU) between the MNR and all commercial users of Goudreau Road. The primary purpose for this MOU is to outline maintenance responsibilities between the different commercial users. The introduction of user fees for use of the road by commercial operators is not anticipated at this time.
Prodigy Gold Incorporated 18-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 18.1 Road and Railway Network Associated with the Magino Property
Prodigy Gold Incorporated 18-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 18.3 ON S ITE I NFRASTRUCTURE
18.3.1 MINE HAUL ROAD AND SERVICE ROADS
There are numerous gravel roads within the property built to service previous mining operations and drilling programs. Most of these roads are located within the limits of the proposed pit. New service roads connecting the process plant (mill), the office/ maintenance/warehouse complex and the TSF will be required. A mine haul road will need to be able to accommodate 200 t ore trucks carrying ore from the pit to the primary crusher, waste rock dump and to the tailings area to build the dams. The mine haul road will be designed in accordance with the road design requirements of an appropriate mining act having jurisdiction. The length of the proposed roads has not yet been determined. They are anticipated to be less than 10 km long.
18.4 TAILINGS D ISPOSAL
18.4.1 TAILINGS STORAGE FACILITY
The TSF design is based on a 20,000 t/d open pit operation over a period of 11 years. It will store a total of 74.2 Mt of tailings from a CIP plant. The general arrangement of the TSF is shown on Figure 18.2, along with other major project components.
The proposed TSF is located approximately 600 m northwest of the deposit and 200 m west of the proposed plant site. All of the proposed mine facilities, including the open pit, plant site, waste rock dump, and TSF, are shown on Figure 18.2. Portions of the waste rock dump and TSF footprints extend beyond the current mine claim boundaries. Tetra Tech assumed that Prodigy will lease or purchase these additional lands to accommodate the waste rock dump and TSF.
There will be two mine life stages: a starter stage and a final stage. The starter facility is sized to store the estimated volume of tailings (14.5 Mt) produced in the first two years. The final facility is sized to store the estimated volume of all the tailings produced over the 11-year mine life (74.2 Mt over 11 years) and the dams will be raised annually from Years 2 to 11 of operation. Tetra Tech assumed a tailings dry density of 1.2 t/m3 during Years 1 and 2, 1.3 t/m3 in Year 3 and 1.4 t/m3 in Years 4 through 11. Supernatant water and local run-off will be stored and pumped back to the mill plant throughout the mine life.
Characterization of the mine waste materials is ongoing and a number of assumptions have been made for this conceptual design. Tetra Tech assumed that the tailings chemistry will be benign after it is decyanided. The waste rock is also assumed to be non-reactive and can be used for TSF embankment construction.
Prodigy Gold Incorporated 18-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Embankment volumes were estimated assuming the dam will be raised by the centerline construction method with 2H:1V upstream and 2.5H:1V downstream slopes, 3 m minimum freeboard and a 10 m minimum dam crest width. The characteristics of the TSF, including embankment size, impoundment storage capacity and estimated embankment volume are summarized in Table 18.1.
Table 18.1 Summary of Tailings Storage Facility
Starter Final Descriptions Unit Embankment Embankment Tailings Impoundment Storage Volume (plus pond) Mm3 12.2 56.60 Approximate Dam Crest Elevation masl 434.0 457.00 Approximate Foundation Elevation masl 400.0 400.00 Maximum Dam Height m 34.0 57.00 Embankment Volume Mm3 2.9 10.20 Estimated Supernatant Pond Volume Mm3 0.1 0.30 Storage Efficiency Ratio - 4.2 5.50 Tailings Impoundment Footprint km2 1.1 2.60
The proposed TSF provides sufficient storage capacity for the current mining plan and there is a potential to increase the capacity by raising the embankments.
Prodigy Gold Incorporated 18-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 18.2 TSF Preliminary Site Plan
Prodigy Gold Incorporated 18-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 18.5 POWER
An existing 44 kV power line owned by API is servicing the Magino property. This circuit originates near Highway 101, south of Hawk Junction and provides power to the towns of Hawk Junction, Dubreuilville, Goudreau, Lochalsh and Missiinabie. There is an existing 44 kV voltage regulator in the Hawk Junction area.
The existing line is not adequate to support the operation of the mine. Upgrade of the line between Goudreau and the Magino site with larger conductor and installation of extra capacitor banks or an additional voltage regulator on the 44 kV circuit near Goudreau is required.
An existing 1,000 kVA 44.6 to 4.16 kV main transformer is in operational condition but it will be replaced with a 44.6 to 4.16 kV/600 V main substation for the 20,000 t/d mine. To reduce cable costs, the main new station will be located close to the grinding circuits, where most of the required power will be consumed. On site power will be distributed via overhead 4.16 kV line.
The power supply to the office/warehouse building and mine equipment maintenance building will go through step-down transformers to 600 V/110 V. The power supply to all the site exterior lighting will be at 4.16 kV through single phase pole mounted transformers.
All major motors will be soft-started to reduce the in-rush current, and improve the power factor and harmonic emissions.
In consultation with API, the three options below are to deliver power to the site with the demand for a load of approximately 30 MW at the Magino mine, the following details are possible scenarios.
OPTION 1EXISTING SYSTEM 15 M LOAD ADDITION
API's analysis indicated that the existing single-circuit 44 kV system can accommodate up to approximately 15 MW of additional load. In addition to rebuilding and relocating a portion of the existing 44 kV circuit in the location of the mine site, further upgrades are required upstream of API's system in order to maintain adequate voltage levels for all customers with the additional load. API's estimated total cost for this option is less than $5 million (excluding the customer- owned 44 kV substation to be built at the mine site).
OPTION 2SECOND 44 KVCIRCUIT
Given the existing load on API's 44 kV system, adding an additional 30 MW of load would require the construction of a second 44 kV circuit from the supply point to the Magino site. This amount of load would also require upgrading of upstream
Prodigy Gold Incorporated 18-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada transmission facilities. A very preliminary cost estimate for this option is in the range of $15-20 million.
OPTION 3TRANSMISSION CONNECTION
Given the costs associated with Option 2, a transmission connection may be justified for a load addition in the 30 MW range. As compared to the distribution options above, there would be significant changes in the approvals required prior to construction and therefore the lead-time required for construction. The rate structure would also be different upon connection.
POTENTIAL ADDITIONAL RISKS AND BENEFITS
The above scenarios provide cost estimates for typical construction of distribution line and substation facilities. The estimates are somewhat conservative; they allow typical costs for design, clearing, construction and typical project contingencies. However, the estimates do not however allow for substantial unexpected costs arising from activities such as landowner negotiations for new right of way, environmental assessment studies, land-use permits, transmission/customer system impact assessments or unexpected requirements from an upstream transmitter, etc. These risks are likely to be higher as the proposed load size increases.
The above cost estimates also do not include the benefit arising from the economic evaluation that will be performed prior to entering into a connection agreement. More details on the economic evaluation process can be found in Section 3.2 and Appendix B of the Distribution System Code, available on the Ontario Energy Board website. This evaluation essentially determines how the total costs associated with an expansion will be divided into a "Customer Contribution" and an "Expansion Deposit". The "Customer Contribution" is a non-refundable amount that is payable in full prior to commencement of construction. The "Expansion Deposit" is also payable up-front, but will be partially refunded over each of the first five years, based on the actual load compared to the forecasted load. The "Expansion Deposit" may be in the form of cash, letter of credit, or surety bond.
18.6 GEOCHEMICAL
A waste rock characterization program is currently underway to determine the geochemical characteristics of the waste materials. Similarly, a laboratory testing program on tailings is also underway to determine the physical indices and geochemical properties of the tailings materials. It is recommended to continue the program that is described in Section 25.5 in preparation for a feasibility study.
Prodigy Gold Incorporated 18-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 19.0 MARKET STUDIES AND CONTRACTS
19.1 MARKET S TUDIES
The final product to be produced by the Project is doré gold bars. The gold doré bars will likely be transported to a North American-based precious metals refinery and sold to precious metals traders most likely located in Asia, Europe, and North America.
A more precise projection of marketing terms will be prepared during the feasibility phase of this project.
At this point, Prodigy has not participated in discussions with regards to the market place in respect to the production of gold beyond the Mutual Disclosure Agreement (MDA) and Annual Information Form (AIF) disclosures.
19.2 CONTRACTS
Prodigy currently has contracts with consulting and service companies to complete the feasibility engineering work, environmental work, process test work, exploration drilling, and pit wall slope studies. Currently there are no contracts material to the issuer that are required for property development, including construction, mining, concentrating, smelting, refining, transportation, handling, sales and hedging, and forward sales contracts or arrangements.
19.2.1 DETAILED ENGINEERING
When Prodigy advances the Project to the detailed engineering phase, an engineering firm will be contracted to undertake the detailed engineering. This will include design of the mining, electrical, civil, environmental, process, open pit, and structural elements for the entire mine project.
19.2.2 PROCUREMENT
Procurement of all services, mine equipment, and mill equipment will be completed once the engineering reaches a level to support purchase and contract decisions. Procurement can be handled by the engineering firm as part of an engineering, procurement and construction management (EPCM) agreement or by an independent entity that specializes in project procurement.
Prodigy Gold Incorporated 19-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 19.2.3 CONSTRUCTION MANAGEMENT
Construction management will be required once the decision to construct the mine has been approved. The construction management services can be provided by the engineering firm as part of an EPCM agreement or by an independent entity that specializes in construction management.
Prodigy Gold Incorporated 19-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT
20.1 ENVIRONMENTAL C OMPONENTS
EBA completed a detailed mine site characterization for the Magino mine, as part of the mine closure plan. The original closure plan was prepared in October 1992 by Environmental Applications Group Limited (Young and Simms 1992). It was revised in 1993 by HBT AGRA Limited (Young and Simms 1993). The mine site characterization is part of the February 2003 amendment titled “Closure Plan – Amendment No.1, Golden Goose Resources Inc., Magino Mine Site” (Dyck and Bleiker 2003). The changes in the amendment are in accordance with the requirements set out in Part VII of the Ontario Mining Act, and have been formatted as per Ontario Regulation 240/00 and the associated Mine Rehabilitation Code of Ontario. The 2003 closure plan will require updating to reflect the current site conditions and the required financial assurance for completing mine site rehabilitation.
A Notice of Project Status (NOPS) will be submitted to the government to change the current status of the mine from “Temporary Suspension” to “Advanced Exploration” or “Mine Production” status under Regulation 240/00. A NOPS will also be submitted to the Ministry of Labour.
Aboriginal Peoples potentially affected by the Project must be consulted, in accordance with Ontario's mining regulations, as well as various requirements for other project approvals. The Michipicoten and Missanabie Cree will have to be notified and the consultation process initiated. The Métis Nation of Ontario should also be consulted.
20.2 ENVIRONMENTAL C ONSIDERATIONS
20.2.1 LEGISLATIVE FRAMEWORK
Major development projects, such as mines, require various provincial and federal authorizations, licences, and permits in order to operate. In 2009, the Government of Ontario initiated a “One Window” Coordination Process which facilitates the permitting and approvals process associated with mineral development projects in the province. The objectives of the “One Window” Coordination Process are to
Prodigy Gold Incorporated 20-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada provide a transparent, efficient, and timely process for the review, permitting, and approval of new mineral development projects. The process helps to outline the roles and responsibilities of participating ministries and departments, and also facilitates communication between proponents and government. In this process, the Ministry of Northern Development, Mines, and Forestry (MNDMF) serves as the Lead Ministry, responsible for the coordination of the regulatory process for projects that may involve several ministries or agencies. MNDMF’s role is designed to be complementary, however, and is not intended to displace any other government role.
Several licences, permits, and approvals are likely to be required from both provincial and federal agencies in order to construct, operate, decommission, and close the Project. The lists of approvals and authorizations provided, however, are not comprehensive. It is expected that the list will expand as the Project moves through the regulatory process.
ONTARIO APPROVALS AND AUTHORIZATIONS
Table 20.1 lists the major authorizations, licences, and permits that Prodigy will likely require from various government agencies in Ontario (based on MNDMF 2010a). The list is not comprehensive. The completed environmental and socio-economic baseline studies and the environmental assessment (EA) will provide much of the information required in the applications.
Table 20.1 Preliminary List of Provincial Authorizations, Licences and Permits
Provincial Permit/Approval Associated Legislation Environmental Assessment Approval Ontario Environmental Assessment Act Mining Tenure Mining Act Closure Plan Work Permit (including construction of dams, Lakes and Rivers Improvement Act dykes, or diversions, including tailings dams) Public Lands Act Certificate of Approval – Air and Noise; Industrial Environmental Protection Act Sewage Works Ontario Water Resources Act Permit to Take Water Ontario Water Resources Act Authorization to Collect Fish for Scientific Purposes Fish and Wildlife Conservation Act Building Permit Building Code Act (Section 8) Land Use Permit Public Lands Act Pre-development Review Process Occupational Health and Safety Act Health and Safety Standards for Mines and Mining Plants
Prodigy Gold Incorporated 20-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada FEDERAL APPROVALS AND AUTHORIZATIONS
Various federal approvals will also be required, and are primarily associated with works occurring in the vicinity of water bodies and potential fish habitat. Table 20.2 provides a preliminary list of authorizations, licences, and permits that Prodigy will likely require (based on MNDMF 2010b).
Table 20.2 Preliminary List of Federal Authorizations, Licences, and Permits
Provincial Permit/Approval Associated Legislation Environmental Assessment Approval Canadian Environmental Assessment Act (CEAA) Fish Habitat Authorization (for the Fisheries Act harmful alteration, disruption, or destruction (HADD) of fish habitat) Water Crossings (of a Navigable Water Navigable Water Protection Act Body) Fisheries Act Explosives Licenses Explosives Act Metal Mining Effluent Regulations Canadian Environmental Protection Act Fisheries Act
20.2.2 ENVIRONMENTAL SETTING
CLIMATE AND AIR QUALITY
A new meteorological station was installed in October 2011, northeast of Dubreuiville. The station was configured to continuously record wind speed, wind direction, air temperature, relative humidity, incident solar radiation, barometric pressure, and water-equivalent precipitation, in 15 min intervals. A snow course survey will be conducted in early 2012 to assess the snowpack and determine snow- water equivalent. Relevant meteorological information will then be incorporated into the site water balance.
Dust fall monitoring stations will be installed in 2012 throughout the Project area to establish baseline air quality conditions.
Data generated by the meteorological station, snow course survey, and dust fall monitoring stations will be used to establish baseline climate and air quality conditions, and will be used in the assessment of potential environmental effects that might result from the development of the Project.
TERRAIN AND SOILS
A program to establish baseline terrain and soils conditions within the Project area will be carried out in 2012. The information will contribute to the ecosystems and vegetation program, and forms the basis of material salvage and handling plans, as
Prodigy Gold Incorporated 20-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada well as closure and reclamation plans. The program will be composed of both desktop and field-based studies.
Data collected will be used to establish baseline terrain and soil conditions in the Project area, and will be used in the assessment of potential environmental effects that might result from the development of the Project.
ECOSYSTEMS AND VEGETATION
The ecosystems and plant species present in the Project area will be characterized in 2012 through the conduct of desktop and field-based assessments. The program will include establishing baseline conditions for ecosystems and plant species that are particularly sensitive to disturbance, or are of conservation interest both locally and regionally (e.g., tracked by provincial or federal conservation agencies).
Data collected will be used to establish baseline ecosystem and vegetation conditions in the project area, and will be used in the assessment of potential environmental effects that might result from the development of the Project.
ILDLIFE
A program to establish baseline conditions for terrestrial wildlife species will be conducted in 2012. The program will involve both desktop and field-based assessments and will include identifying the potential presence of species at risk and associated habitat.
Data collected will be used to establish baseline wildlife conditions in the project area, and will be used in the assessment of potential environmental effects that might result from the development of the Project.
FISHERIES,AQUATICS, AND SURFACE ATER QUALITY
A comprehensive program to characterize the biology and chemistry of lakes and streams in the vicinity of proposed project development area was initiated in October 2011. Stream assessments included habitat descriptions, collecting field measurements of pH, conductivity, temperature, and dissolved oxygen, collecting water and sediment samples for laboratory analysis, collecting periphyton and benthic invertebrates for species identification and enumeration, and collecting and releasing fish via electrofishing and/or minnow trapping to characterize species presence.
A total of six stream locations were assessed overall. Juvenile Northern Pearl Dace, Mottled Sculpin, and Brook Stickleback were identified.
Lake assessments included describing littoral and upland habitats, identifying the deepest locations within each lake, collecting field measurements of Secchi depth,
Prodigy Gold Incorporated 20-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada pH, conductivity, temperature, and dissolved oxygen (at two stations within each lake), collecting water and sediment samples, collecting zooplankton and phytoplankton for species identification and enumeration, and collecting fish to characterize species presence. Select fish were sacrificed for the collection of muscle and liver tissue for chemical analyses, as well as for age determination.
Eight waterbodies were assessed overall. Fish species present in the area based on these preliminary investigations include Northern Pearl Dace, Mottled Sculpin, Brook Stickleback, Northern Pike, Yellow Perch, White Sucker, Walleye, and Lake Chub.
The fisheries and aquatics program will continue through 2012. Data collected will be used to establish baseline aquatic conditions in the Project area, and will be used in the assessment of potential environmental effects that might result from the development of the Project.
HYDROLOGY
Seven hydrometric stations were installed in October 2011 and were composed of a pressure transducer and data logger. The stations were strategically placed throughout the Project site to record water flow at locations relevant to the mine design. The flow data from these stations will be used to characterize baseline flows in the area, and will help with the determination of the site water balance.
HYDROGEOLOGY
A preliminary hydrogeological study of the Project area was initiated in August 2009 (AMEC 2010). Six overburden wells were installed to characterize the overburden aquifers and potential relationships to the proposed development, surface sediments, and nearby surface water features.
A characterization of the hydraulic properties of the bedrock aquifer in the vicinity of proposed development areas was also undertaken in August 2009, and included packer testing of three DDHs located within the host rock of the proposed project footprint (AMEC 2010).
Hydrogeological studies will continue into 2012 with the establishment of additional monitoring wells. Data describing groundwater quantity and quality will be used to establish baseline conditions and will also be used in the assessment of potential environmental effects that might result from the development of the Project.
ARCHAEOLOGY
Archaeological investigations will be initiated in 2012 and will be carried out in compliance with the ‘Archaeological Assessment Technical Guidelines’ (1993), Ministry of Culture, Tourism and Recreation, Culture Programs Branch, Archaeology and Heritage Planning.
Prodigy Gold Incorporated 20-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Initial investigations will include a Stage 1 Archaeological Assessment of the Magino property by a certified Archaeological Consultant registered with the Ontario Association of Professional Archaeologists. This work is anticipated to be completed by the end of February to mid-March, pending permitting approval. The research will also follow the guidelines presented in “Engaging Aboriginal Communities in Archaeology” (Government of Ontario 2011).
Subsequent archaeological investigations will include a Stage 2 Assessment on-site assessment, planned for the summer of 2012. This work will also be conducted by a certified Archaeological Consultant registered with the Ontario Association of Professional Archaeologists.
The information will be used to establish baseline archaeological conditions in the project area and will also be used in the assessment of potential environmental effects that might result from the development of the Project.
SOCIO-ECONOMICS
A socio-economic baseline for potentially affected communities and Aboriginal Peoples who fall within the geographic scope of the Project will be developed in 2012. A socio-economic description of the various Project phases (e.g., construction, operations, and closure) will also be developed, particularly with respect to labour requirements. The socio-economic program will also include public and Aboriginal Peoples consultation.
The information will be used to establish baseline socio-economic conditions in the project area and will also be used in the assessment of potential environmental effects that might result from the development of the Project.
20.2.3 PUBLIC AND ABORIGINAL PEOPLES CONSULTATION AND PARTICIPATION
Public consultation is a critical component of the regulatory and permitting process. Prodigy will conduct consultation in accordance with Ontario legislation and regulations (e.g., Draft Guidelines for Ministries on Consultation with Aboriginal Peoples Related to Aboriginal Rights and Treaty Rights, June 2006). The consultation program will include communities and Aboriginal Peoples potentially affected by the Project, including Wawa, Michipicoten, and others as identified by the Regional Supervisor of Mineral Exploration and Development, Ministry of Northern Development and Mines (MNDM), and Government of Ontario. Consultation typically includes meetings with the Mayor and Council, Chief and Council, technical specialists, economic development organizations, stakeholders, and the general public. Various engagement strategies are typically used, including meetings, open houses, newsletters, and notifications.
Additional strategies may be used during Aboriginal consultation, including development of formal consultation protocols, memorandums of understanding, and, potentially, community benefit agreements.
Prodigy Gold Incorporated 20-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 20.2.4 CLOSURE AND RECLAMATION
Closure and reclamation planning will be required for the Project. A conceptual reclamation plan will be developed as part of the effects assessment and permitting process. Reclamation of the Project site will follow guidelines and practices that promote the re-establishment of ecological functionality and the development of self- sustaining plant communities. Where possible, areas will be progressively rehabilitated throughout operations, as well as during the final closure and decommissioning phases.
General reclamation activities are expected to include:
decommissioning of site infrastructure backfilling pits with waste (where applicable) general site preparation in advance of re-vegetation efforts re-vegetation of disturbed areas.
The success of the reclamation program will rely in part on the availability and storage of suitable topsoil materials. A soil handling plan will be developed as part of the conceptual reclamation plan which will identify, amongst other things, candidate areas for soil salvage and potential storage locations.
Prodigy Gold Incorporated 20-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 21.0 CAPITAL AND OPERATING COSTS
21.1 BASIS OF E STIMATE
21.1.1 INTRODUCTION
This purpose of this section is to describe the methodology of the development of the Magino Gold Capital Cost Scoping Estimate. This estimate is a Class 5 estimate prepared in accordance with the AACE International Estimate Classification System. The accuracy of the estimate is -20/+35%.
21.1.2 PROJECT DESCRIPTION
The Project is a Greenfield development of an open pit mine complete with addition of new road access with reroute of existing, processing facilities and truck load-out facilities. (This was previously an operating underground mine.)
The prices and unit rates were used in this scoping study estimate were obtained from previous historical projects or “Cost Mine” data references.
21.1.3 ESTIMATE
Table 21.1 summarizes the estimate for the Project.
Table 21.1 Summary of Estimate
Construction Process Major Labour Materials Equipment Equipment Total Area Area ($) ($) ($) ($) ($) Direct Works 10 Overall Site 1,167,410 20,545,150 424,222 525,250 22,662,032 20 Open Pit Mining 205,275 8,062,559 126,750 - 8,394,584 30 Ore Handling 3,787,452 3,105,861 205,361 7,179,945 14,278,619 40 Process 55,122,480 60,302,614 3,517,895 41,900,729 160,843,718 50 Tailings and Water 3,583,687 2,070,000 4,554,000 - 10,207,687 Management 70 On-site Infrastructure 11,816,673 15,266,024 6,680,386 3,980,980 37,744,063 Direct Works Subtotal 75,682,977 109,352,208 15,508,614 53,586,904 254,130,703 table continues…
Prodigy Gold Incorporated 21-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Construction Process Major Labour Materials Equipment Equipment Total Area Area ($) ($) ($) ($) ($) Indirect Works 91 Indirects 4,968,000 65,252,705 - - 70,220,705 98 Owner’s Costs - 11,435,882 - - 11,435,882 99 Contingency - 69,790,594 - - 69,790,594 Indirect Works Subtotal 4,968,000 146,479,181 - - 151,447,181 Total 80,650,977 255,831,389 15,508,614 53,586,904 405,577,884
21.1.4 ESTIMATE APPROACH
PRICING
This estimate was prepared based on previous historical plant and equipment costs. The estimate, in Canadian dollars, includes all the mechanical process equipment, pre-engineered steel structure, mechanical process piping, freights to a designated marshalling yard, commissioning, training, and start-up spare allowances.
No quotations have been provided for the capital cost estimate for this study.
All equipment and material costs are included as FCA Free Carrier manufacturer plant Incoterms 2010. Other costs such as spares, taxes, duties, freight and packaging are covered in the indirect section of the estimate.
The estimate is based on a preliminary equipment list and other known requirements provided by the client or within Tetra Tech. Complementary costs have been calculated for the process plant, building, equipment (process equipment and conveying system) foundations, on-site infrastructure and off-site infrastructure, as well as mining costs. All other costs were based on in-house experience.
PROJECT CURRENCY AND FOREIGN EXCHANGE
The capital cost estimate is expressed in Canadian dollars. Costs submitted in other currencies are converted to Canadian dollars based on the three year average of foreign exchange rates listed in Table 21.2 below.
Table 21.2 Exchange Rates
Currency Exchange Cdn$1.00 US$0.93 Cdn$1.00 Euro €0.77
Prodigy Gold Incorporated 21-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada DUTIES AND TAXES
Duties and taxes (including harmonized sales tax (HST), refer to exclusions section below) are excluded in the estimate.
MEASUREMENT SYSTEM
International System of Units (SI) measurement system is used in the estimate.
LABOUR RATES AND COSTS
A blended labour rate of Cdn$100.00/h was developed by Tetra Tech, based on the Construction Labour Relation Agreement Ontario and is used throughout the estimate.
The labour rates include:
vacation and statutory holiday pay fringe benefits and payroll burdens overtime and shift premiums small tools consumables personal protection equipment contractor’s overhead and profit.
Travel allowances are included in the construction indirect section.
MAN-HOURS ORK EEK
Tetra Tech assumed a 12 h/d, 7 d/wk work week, and a three-weeks-on and one- week-off rotation.
A productivity factor of 1.2 was applied to the labour portion of the estimate, based on average summer and winter conditions according to in-house data and information provided by local contractors.
FOREIGN EXCHANGE FLUCTUATIONS
The estimate does not include an allowance for foreign exchange fluctuations.
Prodigy Gold Incorporated 21-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 21.1.5 ESTIMATE STRUCTURE
The estimate was assembled and coded with a hierarchical Work Breakdown Structure (WBS) by Area and Section number.
## - ### - ##### - ##.## Facility Area Sub Sequence Area
Table 21.3 lists the WBS Facility – Area & Sub-area numbers.
Table 21.3 WBS Facility – Area & Sub-area Numbers
Level 1 Level 2 Level 3 Major Area Sub-area 10 Overall Site 1010 Site Preparation 101010 Site Preparation 101020 Site Roads 101030 Fencing 1020 Overall Site Electrical 102010 Power Supply and Distribution 102020 Fire Alarm 102030 Yard Lighting 1030 Overall Site Controls and Communications 103010 Control System 103020 Communication 20 Open Pit Mining 2010 Pre-production 201010 Open Pit – Pre-production 2020 Mining Equipment 202010 Open Pit – Mobile Equipment 202020 Open Pit – Fixed Equipment 202030 Open Pit – Engineering Equipment 2030 Mining Facilities 203010 Open Pit – Safety 203020 Open Pit – Explosives Storage 203030 Open Pit – Fuel Storage and Delivery 2040 Mining Dewatering 204010 Open Pit – Dewatering 2050 Mining Electrical and Communication 205010 Open Pit – Electrical 205020 Open Pit – Communication table continues…
Prodigy Gold Incorporated 21-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Level 1 Level 2 Level 3 Major Area Sub-area 30 Ore Handling 3010 Crushing and Stockpile 301010 ROM Stockpile 301020 Primary Crushing 301030 SAG Mills 40 Process 4010 Mill Building 401010 Mill Building and Assay Lab 4020 Grinding and Gravity Concentration 402010 Grinding 402020 Gravity Concentration 4030 Thickening 403010 Concentrate Thickening 4040 Carbon-in-Pulp 404010 CIP Circuit 4050 Carbon Circuit, Electrowinning and Smelting 405010 Carbon Circuit 405020 Electrowinning and Smelting 4060 Detoxification 406010 Detoxification 4070 Reagents 407010 Reagents 50 Tailings and Water Management 5010 Tailings Disposal 501010 Tailings Dam 60 Environmental 6010 Environmental 601010 Environmental 70 On-site Infrastructures 7010 Ancillary Buildings 701010 Warehouse/Truck Shop Truck Wash/Tire Change 701020 Admin/Dry Building/Clinic/ Ambulance Bay 7020 Site Services and Utilities 702010 Plant and Instrument Air 702020 Sewage Collection and Treatment 702030 Process Water 702035 Fire/Fresh Water Storage and Distribution 702040 Fuel Storage Area 702050 Gas Storage Area 7030 Plant Mobile Fleet 703010 Plant Mobile Fleet table continues…
Prodigy Gold Incorporated 21-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Level 1 Level 2 Level 3 Major Area Sub-area 7040 Temporary Services 704010 Temporary Laydown Areas 704020 Construction Camp 704030 Housekeeping and Catering 90 Project Indirects 9010 Project Indirects 901010 Construction Indirects 901020 Spares 901030 Initial Fills 901040 Freight and Logistic 901050 Commissioning and Start-up 901060 EPCM 901070 Vendors 98 Owner’s Costs 9810 Owner’s Costs 981010 Owner’s Costs 99 Contingencies 9910 Contingencies 991010 Contingencies
21.1.6 ELEMENTS OF COSTS
The capital cost estimate includes:
direct costs indirect costs owner’s costs contingency escalation and taxes (not included)
DIRECT COSTS
Direct costs include bulk earthworks, including site preparation, site roads. The earthwork quantities were developed from site plans. The unit rates are based on in- house experience.
Prodigy Gold Incorporated 21-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada MINING
The costs of major support and ancillary mining equipment are based on information provided by Canadian vendors, CostMine’s “Mine and Mill Equipment Costs: An Estimator's Guide 2010”, and previous experience on similar projects.
CONCRETE
Concrete quantities were determined from preliminary engineering design drawings and experience from previous projects of a similar nature. The unit rates for concrete placement and finishing are derived from in-house data from similar projects.
STRUCTURAL STEEL
Steel quantities were determined from preliminary engineering design drawings and experience from previous projects of a similar nature. Unit rates were based on in- house data and experience.
ARCHITECTURAL BUILDINGS
Ancillary on-site infrastructure buildings were factored from in-house data and similar sized projects. Additional allowances were included for interior partitions and finishings, electrical and plumbing installations, furniture and washroom facilities.
CAMP
The estimate includes a permanent 250-man camp including kitchen and recreation facilities on the mine site.
MECHANICAL
All mechanical equipment was based on recent quotes and similar projects.
MECHANICAL PIPING
Building piping costs were factored from similar sized projects.
ELECTRICAL
Electrical costs are based on estimation from Algoma Power supplied from client.
INSTRUMENTATION,COMMUNICATIONS AND SECURITY
Field instruments and bulks costs were factored based on equipment costs.
Prodigy Gold Incorporated 21-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada INDIRECT COSTS
Contractor Construction Indirect Costs
Contractor construction indirect costs were calculated as a percentage of the direct costs.
Initial Fills
An allowance was included for initial fills.
Spares
An allowance was included for commissioning, mining capital, and start-up spares.
Commissioning and Start-up
In some cases, vendor representatives, contractors’ crew and management staff will be required on-site to supervise equipment installation and perform pre-start-up inspections, in order to satisfy equipment performance warranty requirements. Costs associated with this requirement are included in the estimate.
Freight and Logistics
Freight and logistics allowance is calculated on a percentage basis based on Tetra Tech’s recent in-house experience.
Temporary Services
This cost includes a temporary camp service and catering for construction workers.
Engineering and Procurement
Engineering and procurement (EP) costs were calculated as a percentage of direct costs, based on in-house experience.
Construction Management
Construction management allowance was calculated as a percentage of direct costs, based on in-house experience.
Owner’s Costs
Owner’s costs are calculated as a percentage of direct costs.
Prodigy Gold Incorporated 21-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Contingency
Project contingency is based on total direct and indirect costs to meet anticipated undefined costs within the scope of the estimate.
The percentage allowances are based on in-house data from previous similar projects, in consultation with Prodigy.
The Owner’s contingency is not included in this estimate.
There is no provision in the estimate for escalation beyond Q4 2012.
21.1.7 QUALIFICATIONS AND EXCLUSIONS
QUALIFICATIONS
The capital cost estimate assumes that:
concrete aggregate and suitable backfill material will be locally available soil conditions are adequate for foundation bearing pressures construction activities will be continuous, except with respect to the leach facilities.
There are no construction delays due to inadequate supply of bulk materials such as cement, reinforcing steel, structural steel and plate, cable, cable tray, and piping are available when they are required.
EXCLUSIONS
The following are excluded from the estimate:
cost escalation during construction major scope changes financial cost of borrowing/interest during construction schedule delays and associated costs, such as those caused by: - unexpected ground conditions - force majeure - labour disputes - receipt of information beyond the control of engineering, procurement and construction management contractors - schedule recovery or acceleration. taxes not included in estimate
Prodigy Gold Incorporated 21-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada sunk costs research and exploration drilling costs permitting costs force majeure currency fluctuations.
21.2 PROCESS E QUIPMENT C APITAL C OSTS
The process equipment capital costs were derived from the major pieces of process equipment from the equipment list. The major pieces of equipment have been placed in Table 21.4. These are the major pieces that have been used to determine the capital and operating costs.
Table 21.4 Major Process Equipment List
Equipment Quantity Size Stockpile Feed Conveyor 1 300 m length x 106.7 cm wide Primary Gyratory Crusher 1 107 cm x 165 cm SAG Mill Feed Conveyor 1 200 m length x 106.7 cm wide SAG Mill and Drive 1 10.3 m diameter x 5.0 m Grinding Mill Liner Crane 2 - Ball Mills and Drives 2 6.1 m diameter X 8.7 m length Leach Feed Thickeners 2 122 m diameter Leach Tanks and Agitators 12 15 m diameter x 15 m high CIP Tanks with Screens 7 9.8 m diameter x 9.8 m high Gold Elution System 1 5,443 kg capacity Electrowinning Cells 1 3.54 m3 cell Smelting Furnace 1 129 kg capacity Carbon Regeneration Kiln 1 181 kg/h
The costs for these pieces of equipment were compiled from CostMine’s “Mine and Mill Equipment Costs: An Estimator's Guide 2011”, as well as historic data from other projects. Historical pricing was adjusted to 2011 dollars using CostMine cost indices. The CostMine Estimator’s Guides are annual collections of industry prices for equipment costs based on surveys of operating companies and vendors. CostMine equipment costs were also converted to Canadian dollars. Equipment cost estimates were made for process pumping, reagent preparation, and an assay/process laboratory.
Prodigy Gold Incorporated 21-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 21.3 PROCESS O PERATING C OSTS
The operating costs were determined by estimating the quantities of consumables, manpower, and electrical power required on a “per tonne milled” basis. Consumables considered were reagents, supplies (e.g. mechanical, safety, and laboratory), fuel, and electrical power required for ore processing. Pricing for reagents, supplies, and fuel were taken from historical project pricing and CostMine Estimating guides. Costs were adjusted to Canadian dollars and CostMine cost indices for commodities were used to adjust historical pricing to 2011 dollars.
Common industry dosages for reagents were used to calculate the total reagent consumptions. The bond abrasion test work by Starkey, calculated wear rates for liners and grinding media which were used to determine the cost of those supplies. Fuel estimates for the indirect heated kilns for carbon regeneration were calculated to determine the fuel cost. The connected loads for the process equipment were taken from the CostMine Estimator’s Guide except for the grinding mill loads which were determined in the grinding analysis work by Starkey.
The labour cost was determined by compiling a list of the required labour compliment for the process plant. Salaries were taken from InfoMine’s, “Canadian Mine Salaries Wages & Benefits – 2010 Survey Results”. A summary of the consumables, labour, and electrical power costs, as well as the total operating cost, is shown below in Table 21.5. The operating costs are based on a 20,000 t/d mill throughput.
Table 21.5 Process Operating Costs
Milled Annual Cost Percentage ($/t) ($) (%) Electrical Power 3.07 21,495,850 24 Labour 2.02 14,129,319 16 Consumables 7.51 52,591,921 60 Total 12.60 88,217,090 100
21.4 TAILINGS C APITAL C OST E STIMATE S UMMARY
The capital cost estimate has been prepared at the preliminary assessment level with the accuracy of ±40%. The current scope of work included in the capital cost estimate consists of the following:
earthworks and seepage control, including tailing dam site preparation, jet grouting of the top 10 m of the bedrock foundation under the main dam, lining of the starter embankment using geosynthetic materials, embankment construction, ditches and water collection ponds, and an access road
Prodigy Gold Incorporated 21-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada pipeworks and pumping systems including tailings delivery pipelines, water reclaim pipelines, and pumps surface water management including diversion ditches/channels power supply indirect costs.
The capital cost estimate includes the preproduction (initial capital) and sustaining capital for the duration of the mine’s operating life. Since insufficient detail design information was available at the preliminary assessment level, the preproduction capital cost estimate has been based on equipment and material supplies and historical costing data used on mine facility structures. In the sustaining capital cost estimate, the costs for the remaining dam earthworks and pipeworks are projected from Year 3 to Year 11 into the mine’s operating life.
The estimated capital costs for the preproduction phase are Cdn$20.7 million, including indirect costs of Cdn$4.8 million. The estimated sustaining capital cost totals Cdn$14.8 million distributed between Year 3 to Year 11. The total estimated capital expenditures over the 11-year operating period are Cdn$35.5 million. The project capital costs are summarized in Table 21.6 below.
Table 21.6 Estimated Capital Costs for TSF
Pre-production Sustaining Capital Capital Description ($ millions) ($ millions) Dam Site Preparation (clear and strip) 1.3 1.1 Jet Grouting of 1,100 m Main Dam Foundation 2.7 0.0 Embankment Fill Placement 3.7 9.1 Embankment Liner 2.1 0.0 Facility Access Road 0.3 0.0 Tailings Delivery Pipelines 2.0 1.2 Tailings Pumps 1.0 0.0 Water Reclaim Pipelines 0.6 0.0 Water Reclaim Barge and Pumps 1.6 0.0 Surface Water Management (ditches, ponds, and pumps) 0.2 0.0 Power Supply Lines 0.4 0.0 Miscellaneous Construction Indirect (30%) 4.8 3.4 Subtotal 20.7 14.8 Total Capital Costs 35.5
Prodigy Gold Incorporated 21-12 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 21.5 TAILINGS O PERATING C OST E STIMATE S UMMARY
The current estimated operating costs for the tailings management facilities are based on the power consumption by the various pumping systems; labour for maintaining and moving pipelines; maintenance, and replacement of pumps and pipelines and a “miscellaneous“ indirects allowance.
For tailings and water delivery systems, 6 to 12% of the capital expenditures per year have been assumed for maintenance and replacement of depreciable items depending on the complexity and anticipated wear on the system. This allowance is inclusive of all pipeworks and pump systems, regardless of the use, and includes for labour. A single labour allowance has been assumed for the facilities. Electrical power costs are estimated based on the power requirements for the pumps. The unit cost assumed for power is Cdn$0.08/kWh.
A 30% allowance for miscellaneous indirect costs and contingencies has been assumed for operation indirects and for miscellaneous operating cost items. The estimated operating costs over the 11-year operating period are totalled at Cdn$30.8 million. Table 21.7 presents the operating cost breakdown for the tailings storage facility.
Table 21.7 Estimated Operating Costs for TSF
Annual Unit Cost Description Cost ($) Tailings Delivery Line 12% 324,000 Tailings Pumps 8% 80,000 Water Reclaim Pipelines 6% 37,000 Water Reclaim Barge and Pumps 8% 128,000 Seepage Collection Pumps 6% 5,000 Labour (1 person) $85.00/h 372,000 Power (1,720 kW) $0.08/kWh 1,205,000 Operating Contingency 30% 646,000 Total Annual Cost (Cdn$) 2,800,000 Total Operating Cost (11 years) (Cdn$) 30,800,000
Prodigy Gold Incorporated 21-13 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 21.6 MINING E QUIPMENT C APITAL C OSTS
The mining equipment capital costs were derived from the pieces of mining equipment from the equipment list presented in Table 21.8 below.
Table 21.8 Mining Equipment List
Equipment Category Quantity Description
Drills (Primary) 2 Percussion Crawler (4.5 to 5.5") Drills (Secondary) 1 Percussion Crawler (2.5 to 4.0") FELs 2 FEL (CAT 994 – 25 yd3) Haul Trucks 5 Haul Truck (CAT 789 – 200 ton) Track Dozers (Type 1) 2 Track Dozer (CAT D10T - 17.3 ft) Track Dozers (Type 2) 1 Track Dozer (CAT D6K XL - 10.8 ft) Wheel Dozers 1 Wheel Dozer (CAT 834H - 15.2 ft) Graders 1 Grader (CAT 16M – 16 ft) Vibratory Compactor 1 Vibratory Compactor (CAT CP64) Stemming Loader 1 FEL (CAT 914 - 1.7 yd3) Integrated Tool Carriers 1 Integrated Tool Carrier (CAT IT14G equivalent) Small Excavator 1 Excavator (1.3 to 2.1 yd3) Water Truck 1 Water Truck (10,000 gal) ANFO Truck 1 ANFO Truck (1,000 lb/min) Ambulance 1 Ambulance Fuel/Lube Truck 1 Fuel/Lube Truck (3,000 gal) Mechanics Service Truck 1 Mechanics Service Truck (F350 4x4 (diesel)) Welding Truck 1 Welder Truck (F350 4x4 (diesel)) Tire Truck 1 Tire Service Truck (with tire manipulator) Snow Plow 1 Snow Plow/Sanding Truck (off-road) Crew Cab Trucks 6 Pick-up Truck (1 ton) Pick-up Trucks 12 Pick-up Truck (3/4 ton) Truck mounted hydraulic crane with telescopic Mobile Crane 1 boom (150 ft/75 ton) Rough Terrain Forklift 1 Rough Terrain Forklift (Sellick SD-100) Shop Forklift 1 Shop Forklift (Hyster H100XM) Mine Pumps 1 Mine Pumps (pit dewatering pumps) Light Plant 2 Light Plant/Towers (four lights) Dispatch System 1 Dispatch System (50 units) Mobile Radios 50 Communication Equipment Safety Equipment 1 Safety Masks, First Aid, etc. Engineering/Geology Equipment 1 Computers, Softwares, Licenses Maintenance Management 1 Equipment Records System
Prodigy Gold Incorporated 21-14 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada The costs for these pieces of equipment were compiled from Canadian vendors’ quotes in mid-2011 and CostMine’s “Mine and Mill Equipment Costs: An Estimator's Guide 2010”, as well as historic data from other projects. Historical pricing was adjusted to 2011 dollars using CostMine cost indices. CostMine equipment costs were also converted to Canadian dollars.
For most of the selected equipment, the life of the piece equals the life of the mine. Exceptions are the FELs and haul trucks with an equipment life of five years, pick-up trucks with an equipment life of three years, and mine pumps, light plants, and safety equipment with an equipment life of six years.
The mining fleet, FELs/trucks, increases as the open pit gets deeper and haul times increase. Table 21.9 shows the units operating by year.
Table 21.9 Mining Fleet by Year
Quantity of Equipment Year FEL (CAT 994 – 25 yd3) Haul Truck (CAT 789 – 200 ton) -1 2 5 12 5 22 7 32 8 42 10 52 12 62 12 72 13 8 2 14 9 2 14 10 2 10 11 1 2
The initial capital costs are Cdn$45.2 million and are presented in Table 21.10 by year. The spike in sustaining capital in Year 5 is due to the replacement of both loaders and the first five haul trucks along with the addition of two new trucks because of increased haulage times.
Prodigy Gold Incorporated 21-15 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 21.10 Mining Capital and Sustaining Costs by Year ('000)
Capital Sustaining Year Expenditure Capital Total -1 45,202 - 45,202 1- - - 2 - 7,335 7,335 3 - 4,656 4,656 4 - 7,335 7,335 5 - 37,838 37,838 6 - 1,068 1,068 7 - 11,085 11,085 8 - 7,335 7,335 9 - 8,323 8,323 10 - - - 11 - - Total 45,202 84,977 130,179
21.7 MINING E QUIPMENT O PERATING C OSTS
The operating costs were determined by estimating the operating hours and collecting cost data on capital recovery, overhead, overhaul, maintenance, fuel, lube, tires, and parts. These costs comprise a database of costs based on operating hours. Results are presented on a “per tonne mined” and “per tonne milled” basis. Pricing was taken from CostMine’s “Mine and Mill Equipment Costs: An Estimator's Guide 2010”. Costs were adjusted to Canadian dollars and CostMine cost indices for commodities were used to adjust historical pricing to 2011 dollars. The average mining operating costs are Cdn$1.22/t mined and Cdn$3.72/t milled.
The labour cost was not tallied with operating costs and can be found under general and administrative (G&A) costs. A summary broken out by several different categories, as well as the total operating cost, is shown below in Table 21.11. The operating costs are based on a 20,000 t/d mill throughput.
Prodigy Gold Incorporated 21-16 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 21.11 Mining Operating Costs
Unit Costs Category ($/t) Per Tonne Mined Drilling 0.06 Blasting 0.18 Loading 0.15 Hauling 0.64 Auxiliary 0.19 Average Total Cost per Tonne Mined 1.22 Per Tonne Mined Fuel 0.54 Consumables 0.48 Maintenance 0.20 Average Total Cost per Tonne Mined 1.22 Per Tonne Milled Drilling 0.17 Blasting 0.54 Loading 0.46 Hauling 1.96 Auxiliary 0.59 Average Total Cost per Tonne Milled 3.72 Per Tonne Milled Fuel 1.64 Consumables 1.46 Maintenance 0.62 Average Total Cost per Tonne Milled 3.72
Prodigy Gold Incorporated 21-17 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 22.0 ECONOMIC ANALYSIS
22.1 INTRODUCTION
Tetra Tech prepared an economic evaluation of the Project’s updated PEA based on a pre-tax financial model.
Tetra Tech’s long-term consensus metal prices and exchange rate (as of October 27, 2011) used in the base case were as follows:
gold: US$1,200.00/oz exchange rate: $1.00:$0.93 (Cdn$:US$).
The pre-tax financial results were as follows:
36.4% IRR 1.9 year payback Cdn$939 million NPV at 5% discount rate and Cdn$709 million at 8% discount rate.
Sensitivity analyses were conducted to analyze the sensitivity of the project merit measures (NPV, IRR and payback periods) to the main inputs.
22.2 PRE- TAX M ODEL
22.2.1 MINE/METAL PRODUCTION IN FINANCIAL MODEL
The LOM ore tonnages, grades and metal production are indicated in Table 22.1.
Prodigy Gold Incorporated 22-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 22.1 Metal Production from the Magino Project
Description Value Total Tonnes to Mill (‘000) 74,234 Annual Tonnes to Mill (‘000) 6,749 Mine Life (Years) 11 Average Grade Gold (g/t) 1.153 Total Production Gold (‘000 oz) 2,614 Average Annual Production Gold (‘000 oz) 249
22.2.2 BASIS OF FINANCIAL EVALUATIONS
The production schedule was incorporated into the 100% equity pre-tax financial model to develop annual recovered metal production from the relationships of tonnage processed, head grades, and recoveries.
All costs and revenues are assumed to occur at the end of each operating year.
Annual revenues were calculated based on the base case gold price and exchange rate. Unit operating costs for mining, processing, power, fuel, and G&A were applied to annual mined/milled tonnages to determine the overall operating cost, which was deducted from the revenues to derive annual operating cash flow. Since gold will be refined on-site, no third party refining charges are considered and on-site refining costs are included in the cost estimates.
Initial capital costs, sustaining capital as well as working capital have been incorporated on a year-by-year basis over the mine life. Mine reclamation costs are applied to the capital expenditure in the last production year. Capital expenditures are then deducted from the operating cash flow to determine the net cash flow before taxes.
Initial capital expenditures include costs accumulated prior to first production of gold. Pre-production period is assumed to be two years. Sustaining capital includes expenditures for mining and processing additions, replacement of equipment, and tailings embankment construction.
Working capital is assumed to be three months of the annual operating cost and fluctuates from year to year based on the annual cost. The working capital is recovered at the end of the mine life.
A salvage value is not considered for the purposes of this analysis.
Prodigy Gold Incorporated 22-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Mine closure and reclamation is assumed to be Cdn$10 million and will be incurred at the end of the LOM.
The undiscounted annual net cash flows and cumulative net cash flows are illustrated in Figure 22.1.
Figure 22.1 Undiscounted Annual and Cumulative Net Cash Flow
2,000
1,500
1,000
500 NCF CNCF
$CDN million 0 (3)(2)(1)1234567891011 (500)
(1,000) Production year
22.3 SUMMARY OF F INANCIAL R ESULTS
Tetra Tech evaluated the base case using consensus gold price of US$1,200/oz and exchange rate of $1.00:$0.93 (Cdn$:US$).
The pre-tax financial model was established on a 100% equity basis, excluding debt financing and loan interest charges. The financial results are presented in Table 22.2.
Prodigy Gold Incorporated 22-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Table 22.2 Summary of Pre-tax Financial Results (all figures are in Cdn$)
Item Unit Value At-mine revenue $ million 3,372 Operating costs $ million 1,296 Operating cash flow $ million 2,076 Capital expenditure $ million 560 Net cash flow $ million 1,516 NPV (5%) $ million 939 NPV (8%) $ million 709 IRR % 36.4 Payback years 1.9
22.4 SENSITIVITY A NALYSIS
Sensitivity of the project’s NPV, IRR and payback period to the project key variables was investigated. Using the base case as a reference, each of key variables is changed between -30% to 30% at 10% interval while holding the other variables constant. The following are the key variables investigated:
gold price exchange rate capital costs operating costs.
As shown in Figure 22.2, the project NPV in Cdn$ million, calculated at 8% discount, is most sensitive to the exchange rate and, in decreasing order, the price of gold, operating costs, and then capital costs.
Prodigy Gold Incorporated 22-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Figure 22.2 NPV Sensitivity Analysis
1,800 1,600 1,400 1,200 1,000 AuP 800 FOREX 600 NPV, $ millionNPV, $ CAPEX 400 OPEX 200 0 -30% -20% -10% 0% 10% 20% 30% % Change
As shown in Figure 22.3, the project IRR is most sensitive to the exchange rate, followed by gold price, capital costs and operating costs.
Figure 22.3 IRR Sensitivity Analysis
70%
60%
50%
40% AuP FOREX
IRR, % IRR, 30% CAPEX 20% OPEX 10%
0% -30% -20% -10% 0% 10% 20% 30% % Change
Prodigy Gold Incorporated 22-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada As shown in Figure 22.4, the payback period is also most sensitive to the exchange rate, followed by gold price, capital costs and operating costs.
Figure 22.4 Payback Period Sensitivity Analysis
6.0
5.0
4.0 AuP 3.0 FOREX 2.0 CAPEX Payback, years OPEX 1.0
0.0 -30% -20% -10% 0% 10% 20% 30% % Change
22.5 ROYALTIES
No royalties were considered in the financial analysis.
22.6 SMELTER T ERMS
No smelter terms were considered in the financial analysis, since gold refining will occur on-site.
22.7 TRANSPORTATION L OGISTICS
No transportation costs were considered in the financial analysis, since gold refining will occur on-site.
22.7.1 INSURANCE
Insurance was not considered in the financial analysis, since gold refining will occur on-site.
Prodigy Gold Incorporated 22-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 22.7.2 OWNERS REPRESENTATION
Not considered.
22.7.3 LOSSES
Not considered.
Prodigy Gold Incorporated 22-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 23.0 ADJACENT PROPERTIES
There are no material properties adjacent to the property that is the subject of the current technical report.
Prodigy Gold Incorporated 23-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 24.0 OTHER RELEVANT DATA AND INFORMATION
There is no other relevant data and information for inclusion in this report.
Prodigy Gold Incorporated 24-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 25.0 INTERPRETATION AND CONCLUSIONS
25.1 MINERAL R ESOURCE
An updated mineral resource estimate was prepared for Prodigy’s Magino gold property, located near Wawa in Ontario. The Indicated and Inferred estimates are intended for use to update a PEA of an open pit mining scenario.
In the process of preparing the estimates, it was concluded that:
The supplied database included 512 surface DDHs (total of 103,491 m) and 980 underground DDHs (for a total of 60,345 m). Of the underground drillholes, Snowden elected to use only assays in the grade estimates from the longer drillholes and these amounted to 484 drillholes for a total of 48,896 m. All underground drillholes were completed in the period 1984 to 1991 and are dominated by narrow AQ diameter core with some BQ diameter core, clearly clustered around the underground workings as expected and, in some cases subsequently stoped out. Most underground core was sampled in its entirety. Sample volumes of the underground drill cores are markedly less than the surface drill cores and are likely unrepresentative given the incidence of coarse gold. Assays of underground core were performed at the mine laboratory during operations in the period 1987 to 1991, and are unverifiable. Comparisons of underground core assays with surface core assays indicate a potential bias. Subsequent analysis allowed the exclusion of that set of underground drill cores which exhibited the most potential bias. Ninety-four surface drillholes were completed in the period from 1997 to 2010 and comprise HQ and NQ diameter core. Intervals from these holes have been subjected to resampling and assaying, however this task is incomplete. Prodigy has embarked on an in-fill drilling and sampling program and it is expected that much of the historic assay information will be superseded for use in subsequent mineral resource estimates. The geological interpretation used in the resource estimates will require updating to better reflect the distribution of quartz-sericite-pyrite zones and mineralized veins. The mineralized zones were geologically interpreted as structural domains and modelled as 3D solids using Gemcom software. Blocks within these domains were estimated using OK of 5 m composites.
Prodigy Gold Incorporated 25-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada The mineral resource estimates were generated using OK in Vulcan software. Search restrictions were applied to reduce the impact of high grade composites. The resource reporting was constrained by a conceptual pit shell to identify those regions of the model that have reasonable prospects for economic extraction.
25.2 MINERAL R ESERVES
The mineral resource estimate is about half Indicated and half Inferred Resources so no mineral reserves were generated.
As the Project will be surface mining of an historic underground mine, all resources were considered available for mining when economic and mining constraints are applied.
25.3 MINING
The mining constraints and economic values used are considered to be conservative. This was done due to the level of confidence (half Indicated, half Inferred) of the mineral resource.
Since undertaking the original PEA, Golder prepared a further geotechnical analysis based on historical data. The Golder report suggested the pit slope angles could be steepened. These new pit slope angles are used and listed in Section 16.0. A new geotechnical investigation program is currently being undertaken and will form the basis of pit slope designs in a future study. Initial results from this investigation are favourable for further optimizing the pit slope angles.
The open pit yields 74.2 Mt of mill feed over about a 10-year mine life at a grade of 1.15 g/t. Since this project is economically viable with the data that is currently available, it makes sense to continue exploration drilling and move on to more detailed studies like a pre- or feasibility study to obtain a higher level of confidence on the costs to bring the mine into production.
The mineral resource can be mined many different ways using an open pit method. There are opportunities to optimize the schedule based on criteria other that which was provided in this PEA. In this report, mined ore, utilization of the loading equipment, and minimizing the truck fleet through total mined material levelization (i.e. consistent amount of material moved annually) took priority over NPV or produced ounces of gold.
Prodigy Gold Incorporated 25-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 25.4 ENVIRONMENTAL
Based on the proposed mine site layout, a considerable portion of Webb Lake will be affected by mining activities, which will likely trigger a review under the CEAA. It is also likely that the CEAA will apply to the Project based on the proposed production capacity of the mine. Gold mines (other than placer operations) with an ore production capacity of 600 t/d or greater are subject to the Comprehensive Study List Regulations (Part V, Section 16c). Triggering the CEAA under either of these or other scenarios could substantially lengthen the permitting process timeline.
Aboriginal Peoples with interests within the Project area may raise additional socio-economic issues for mine development.
25.5 GEOTECHNICAL
A geotechnical site investigation program is currently underway for the proposed open pit, and further studies describing the process plant, TSF, and waste rock disposal sites will be initiated in 2012 to collect geotechnical and hydrogeological information for feasibility-level engineering design and cost estimates.
The current geotechnical investigation program for the proposed open pit will recover rock core from within the pit walls as proposed in this report, carry out hydrogeological testing of the rock mass especially on the eastern side where the pit encroaches near existing lakes, and install piezometers to measure the existing groundwater surface elevation and associated parameters. These investigations will allow the pit slope walls to be optimized and ideally steepened from those presented within this report.
Prodigy Gold Incorporated 25-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 26.0 RECOMMENDATIONS
26.1 GEOLOGY
Snowden recommends:
Continue an in-fill drilling and sampling program so that all of the historic assay information can be replaced for use in subsequent mineral resource estimates. It will be possible to resample existing core and to ensure QA/QC programs are in place, thus making use of the available historic core. Update the drillhole and sample database with consistent lithogical, alteration and structural records for historic data where possible. Complete a new series of 3D interpretations to map the distribution of quartz-sericite-pyrite alteration and veins. Consider multi-element assays to assist in characterization of alteration zones and geological interpretation. Use the current resource block model for an update of the PEA reported in March 2011. Compile exploration data for the Gould property and develop a budget and schedule for an exploration program. Review and update current domain solids to ensure all mineralized rock is captured within a domain.
The 2003 closure plan will have to be updated to reflect the current site conditions and the required Financial Assurance for completing mine site rehabilitation.
Eventual drill spacing of 25 m or less, confirmed through statistical analysis in a drill hole spacing study, should be considered for categorization of Measured mineral resource estimates, and a bulk sampling program completed to validate this category.
The estimated cost is $1 million.
Prodigy Gold Incorporated 26-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 26.2 ENVIRONMENTAL
The environmental baseline data collection program should be initiated immediately, which includes:
installation of site weather station and stream flow gauges installation of groundwater monitoring wells soil and water sample collection for chemistry testing ARD and ML testing fisheries and aquatic resources study socio-economic assessment.
The estimated cost is $1.5 million.
26.3 METALLURGY
Further metallurgical test work needs to be carried out with samples which are representative of the planned open pit. Trade-off studies will need to be completed to determine the final process routes and then the operating parameters for the chosen route will need to be optimized. A few key items are summarized below.
grindability analysis gold mineralogy CIP versus CIL leach kinetics and carbon adsorption kinetics for the successful carbon process grind versus gold recovery grind with cyanide cyanide destruction dry stacked tailings disposal on the waste rock pile.
It has also been proposed that the historical tailings and waste rock piles may be sources of feed for the mill. A mineralogical study and leach kinetics study will need to be carried out to determine if this is a possibility. This work will need to be completed prior to any further economic analyses (e.g. feasibility study).
The estimated cost is $200,000.
Prodigy Gold Incorporated 26-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 26.4 MINING
It is recommended that a trade study examining the merits of owning or leasing the major mining equipment be performed. There is a difference in priorities between the two choices that impacts how the mine is scheduled. Priority could be given to annually producing the same amount of gold or ore or of total material.
It is recommended a trade study be done to see if in-pit crushing and conveying (IPCC) is a feasible way to mine the pit. There may be an overall cost savings due to lower operating costs at the expense of increased initial capital expenditures.
The estimated cost is $50,000.
26.5 GEOTECHNICAL
It is recommended to continue the program that was described in Section 25.5 in preparation for a feasibility study.
The estimated cost is $750,000.
Prodigy Gold Incorporated 26-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 27.0 REFERENCES
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Prodigy Gold Incorporated 27-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Polat, A, and Kerrich, R., 1999. Formation of an Archean tectonic mélange in the Schreiber-Hemlo greenstone belt, Superior Province, Canada: Implications for Archean subductionaccretion processes. Tectonics, v. 18, p. 733-755.
Polat, A., and Kerrich, R., 2001. Magnesian andesites, Nb-enriched basalts- andesites, and adakites from late Archean 2.7 Ga Wawa greenstone belts, Superior Province, Canada: Implication for late Archean subduction zone petrogenetic processes. Contribution to Mineralogy and Petrology, v. 141, pages 36-52.
Polat, A., Kerrich, R., and Wyman, D., 1998. The late Archean Schreiber-Hemlo and White River-Dayohessarah greenstone belts, Superior Province: Collage of oceanic plateaus, oceanic arcs, and subduction-accretion complexes. Tectonophysics, v. 289, pages 295-326.
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Reddick, J. R., 2001a. The 2000 diamond drilling and sampling program, Magino Mine Property, Wawa Ontario. Report presented to Golden Goose Resources Inc. Prepared by Reddick Consulting Inc. Internal Report. 18 pages.
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Reddick, J. R., 2002. The 2002 diamond drilling and sampling program, Magino Mine Property, Wawa Ontario. Report presented to Golden Goose Resources Inc. Prepared by Reddick Consulting Inc. Internal Report.
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Prodigy Gold Incorporated 27-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Report prepared by Snowden Mining Industry Consultants Inc., CWA Engineers Inc., Knight Piesold Canada. Report published on SEDAR website dated 29 March 2011.
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Sage, R. P., 1993d. Precambrian geology Dunphy Township. Ontario Geological Survey, Open File Map 224, Scale 1: 15 840.
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Sage, R. P., Lightfoot, P. C., and Doherty, W., 1996a. Bimodal cyclical Archean basalts and rhyolites from the Michipicoten(Wawa) greenstone belt, Ontario: Geochemical evidence for magma contributions from asthenospheric mantle and ancient continental lithosphere near southern margin of the Superior Province. Precambrian Research, v. 76, page 119-153.
Prodigy Gold Incorporated 27-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Sage, R. P., Lightfoot, P. C., and Doherty, W., 1996b. Geochemical characteristics of granitoid rocks from within Archean Michipicoten greenstone belt, Wawa Subprovince, Superior Province, Canada: Implications for source regions and tectonic evolution. Precambrian Research, v. 76, page 155-190.
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Studemeister, P. A., 1983. The greenschist facies of an Archean assemblage near Wawa, Ontario. Canadian Journal of Earth Sciences, v. 20, pages 1409-1420.
Studemeister, P. A., 1985. Gold-bearing veins around a felsic stock near Wawa, Ontario: implications for gold exploration; Canadian Institute of Mining and Metallurgy Bulletin, v. 78, pages 43-47.
Studemeister, P. A., and Kilias, S., 1987. Alteration pattern and fluid inclusions of gold bearing quartz veins in Archean trondhjemite near Wawa, Ontario, Canada Economic Geology, v. 82. pages 429-439.
Sutherland, K. S., 1987. Report on the Magino Gold Project. Report commissioned by Muscocho Explorations Ltd. Queen’s University, Kingston, Ontario. Internal Report. 60 pages.
Turcotte, B., and Pelletier, C., 2008. Technical Report and Mineral Resource Estimate for the Magino Mine (according to the Regulation 43-101 and Form 43- 101F1). Report prepared by InnovExplo for Golden Goose Resources Inc. Report published on SEDAR website dated 3 July, 2008. 85 pages.
Turcotte, B., and Pelletier, C., 2009. Technical Report and Mineral Resource Estimate for the Magino Mine (according to Regulation 43-101 and 43-101F1). Report prepared by InnovExplo for Golden Goose Resources Inc. Report published on SEDAR website dated 29 May, 2009. 116 pages.
Turcotte, B., Pelletier, C., and Poirier S., 2010. Technical Report on the Preliminary Economic Assessment prepared by InnovExplo for Golden Goose Resources Inc. Unpublished draft report dated 3 June, 2010. Internal Report, Golden Goose Resources Inc. 176 pages.
Yong, P., Verma, N. S., and Dyck, D., 2008. Magino Mine tailings containment area dam safety inspection 2007. Submitted by AMEC Earth & Environmental. 10 pages.
Prodigy Gold Incorporated 27-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Young, R. and Simms, D. 1992. Magino Mine Closure Plan – Muscocho Explorations Limited. October 1992. Prepared by Environmental Applications Group Limited. 60 pages, plans and appendices.
Young, R. and Simms, D. 1993. Magino Mine Closure Plan – Muscocho Explorations Limited- Revised January 1993. Prepared by HBT AGRA Limited (TC 630). 72 pages, appendices and maps in pocket.
Waldie, C., 2006. Report on the 2006 Diamond Drilling Program, Magino Mine Property, Wawa, Ontario, Canada. Golden Goose Resources Inc. Internal Report. 45 pages.
Williams, H. R., Scott, G. M., Heather, K. B., Muir, T. L., and Sage, R. P., 1991. Wawa Subprovince; in Geology of Ontario, (eds.) P. C. Thurston, H. R. Williams, R. H., Sutcliffe, and G. M. Scott; Ontario Geological Survey, Special Paper 4, pt.1, pages 485 539.
Wilson, B. C., 1997. Structural Geology and Gold on the Magino Mine Property. Report prepared for Golden Goose Resources Inc. Internal Report. 21 pages.
Zaleski, E., van Breemen, O., and Peterson, V. L., 1999. Geological evolution of the Manitouwadge greenstone belt and Wawa-Quetico subprovince boundary, Superior Province, Ontario: Constrained by U-Pb zircon dates of supracrustal and plutonic rocks. Canadian Journal of Earth Sciences, v.36, pages 945-966.
METALLURGY InfoMine USA, Inc., CostMine Division. Mine and Mill Equipment Costs an Estimator's Guide 2011. Spokane Valley Washington, USA.
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Dyck, D. and D. Bleiker. 2003. Closure Plan – Amendment No. 1 – Golden Goose Resources Inc., Magino Mine Site. Prepared by AMEC Earth & Environmental Limited (TC630.01). February 2003. 22 pages, appendices and plan.
Prodigy Gold Incorporated 27-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Government of Ontario. 2011. Engaging Aboriginal Communities in Archaeology. A Draft Technical Bulletin for Consultant Archaeologists in Ontario. Available online at: http://www.mtc.gov.on.ca/en/publications/AbEngageBulletin.pdf
Government of Ontario. 2006. Draft Guidelines for Ministries on Consultation with Aboriginal Peoples Related to Aboriginal Rights and Treaty Rights. Draft report for discussion purposes only. Available online at: http://www.aboriginalaffairs.gov.on.ca/english/policy/draftconsultjune2006.pdf
Government of Ontario. 1993. Archaeological Assessment Technical Guidelines. Report by the Ministry of Culture, Tourism, and Recreation, Cultural Programs Branch, Archaeology and Heritage Planning. Available online at: http://www.mtc.gov.on.ca/en/publications/Archaeological_Technical_Guidelines_ 1993.pdf
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Young, R. and D. Simms. 1992. Magino Mine Closure Plan – Muscocho Explorations Limited. October 1992. Prepared by Environmental Applications Group Limited. 60 pages, plans and appendices.
Young, R. and D. Simms. 1993. Magino Mine Closure Plan – Muscocho Explorations Limited – Revised January 1993. Prepared by HBT AGRA Limited (TC 630). 72 pages, appendices and maps in pocket.
MINING InfoMine USA, Inc., CostMine Division. Mine and Mill Equipment Costs an Estimator's Guide 2010. Spokane Valley Washington, USA.
Prodigy Gold Incorporated 27-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.0 CERTIFICATES OF QUALIFIED PERSONS
28.1 LESLIE C ORRADINE,P.ENG.
I, Leslie Corradine, P.Eng., of Vancouver, British Columbia, do hereby certify:
I am a Senior Project Manager with Tetra Tech WEI Inc. with a business address at #800 – 555 West Hastings Street, Vancouver, British Columbia, V6B 1M1. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of Northumbria University, (B.Sc Engineering (Hons) Mechanical Engineering, 1997). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia, License #165685. My relevant experience is 20 years of experience in industrial, oil and gas, marine and mining projects from concept through operation involving various aspects of engineering and management. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). I did not complete a personal inspection of the Property. I am responsible for Sections 1.7, 1.8, 1.11, 2.0, 3.0, 18.1, 18.2, 18.5, 19.0, 20.0, 25.4, 26.2 and 27.0 (Environmental section only) of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the technical report has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Prodigy Gold Incorporated 28-1 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Signed and dated this 3rd day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Leslie Corradine, P.Eng.” Leslie Corradine, P.Eng. Senior Project Manager Tetra Tech WEI Inc.
Prodigy Gold Incorporated 28-2 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.2 CHRISTOPHER W RIGHT,P.E.
I, Christopher Wright, P.E., of Ferndale, Washington, do hereby certify:
I am a Senior Mining Engineer with Tetra Tech WEI Inc. with a business address at #800 – 555 West Hastings Street, Vancouver, British Columbia, V6B 1M1. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of the Colorado School of Mines, (B.S. Mining Engineering, 1990). I am a member in good standing of the National Society of Professional Engineers (NSPE) and am a registered professional engineer in the state of Ohio #74309. My relevant experience is in mining using surface methods for various commodities, including gold, for more than 20 years. I am a “Qualified Person” for purposes of National Instrument 43- 101 (the “Instrument”). My most recent personal inspection of the Property was November 2, 2011 for one day. I am responsible for Sections 1.5, 15.0, 16.0, 21.5, 21.6, 25.2, 25.3, 26.4 and 27.0 (Mining section only) of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the sections of the Technical Report for which I am responsible have been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the sections of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Signed and dated this 3rd day of February, 2012 at Vancouver, British Columbia
“Original document signed by Christopher Wright, P.E.” Christopher Wright, P.E. Senior Mining Engineer Tetra Tech WEI Inc.
Prodigy Gold Incorporated 28-3 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.3 TODD K ANHAI,P.ENG.
I, Todd Kanhai, P.Eng., of Sudbury, Ontario, do hereby certify:
I am a Metallurgical Engineer with Tetra Tech WEI Inc. with a business address at #101 – 957 Cambrian Heights, Sudbury, Ontario, P3C 5M6. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of Laurentian University, (M. A. Sc., 2000). I am a member in good standing of the Professional Engineers of Ontario, License #90471020. My relevant experience is with previous conceptual, preliminary economic assessment, prefeasibility, and feasibility studies while working with Tetra Tech WEI. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). My most recent personal inspection of the Property was November 2, 2011 for one day. I am responsible for Sections 1.6, 13.0, 17.0, 21.2, 21.3, 26.3 and 27.0 (Metallurgy section only) of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for have been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 3rd day of February, 2012 at Sudbury, Ontario
“Original document signed and sealed by Todd Kanhai, P.Eng.” Todd Kanhai, P.Eng. Metallurgical Engineer Tetra Tech WEI Inc.
Prodigy Gold Incorporated 28-4 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.4 HASSAN G HAFFARI,P.ENG.
I, Hassan Ghaffari, P.Eng., of Vancouver, British Columbia, do hereby certify:
I am a Manager of Metallurgy with Tetra Tech WEI Inc. with a business address at #800 – 555 West Hastings Street, Vancouver, British Columbia, V6B 1M1. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of the University of Tehran (M.A.Sc., Mining Engineering, 1990) and the University of British Columbia (M.A.Sc., Mineral Process Engineering, 2004). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia, License #30408. My relevant experience with respect to mineral process engineering includes 22 years of experience in mining and plant operation, project studies, management, and engineering. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). I did not complete a personal inspection of the Property. I am responsible for Sections 1.9, 21.1, 21.4 and 21.5 of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 3rd day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Hassan Ghaffari, P.Eng.” Hassan Ghaffari, P.Eng. Manager of Metallurgy Tetra Tech WEI Inc.
Prodigy Gold Incorporated 28-5 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.5 SABRY A BDEL H AFEZ,PH .D., P.ENG.
I, Sabry Abdel Hafez, Ph.D., P.Eng., of Vancouver, British Columbia, do hereby certify:
I am a Senior Minerals Economist with Tetra Tech WEI Inc. with a business address at #800 – 555 West Hastings Street, Vancouver, British Columbia, V6B 1M1. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of Assiut University, (B.Sc Mining Engineering, 1991; M.Sc. in Mining Engineering, 1996; Ph.D. in Mineral Economics, 2000). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (#34975). My relevant experience is in mine evaluation. I have more than 19 years of experience in the evaluation of mining projects, advanced financial analysis, and mine planning and optimization. My capabilities range from the conventional mine planning and evaluation to the advanced simulation-based techniques that incorporate both market and geological uncertainties. I have been involved in the technical studies of several base metals, gold, coal, and aggregate mining projects in Canada and abroad. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). I did not complete a personal inspection of the Property. I am responsible for Sections 1.10 and 22.0 of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 3rd day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Sabry Abdel Hafez, Ph.D., P.Eng.” Sabry Abdel Hafez, Ph.D., P.Eng. Senior Minerals Economist Tetra Tech WEI Inc.
Prodigy Gold Incorporated 28-6 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.6 ANDREW F. ROSS,MSC ., P.GEO., CP, FAUSIMM
I, Andrew F. Ross, of Perth, Australia, do hereby certify:
I am a Senior Principal Consultant with Snowden Mining Industry Consultants Inc. with a business address at #600, 1090 West Pender Street, Vancouver, British Columbia, V6E 2N7. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of the University of Adelaide (BSc Honours Degree in Geology, 1972) and James Cook University (MSc Degree in Mining and Exploration Geology, 1985). I am a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy, a member of the Australian Institute of Geoscientists and licensed as a Professional Geoscientist with the Association of Professional Engineers and Geoscientists of British Columbia, License #145711. I have worked as a geologist continuously for a total of 39 years since graduation. I have been involved in resource evaluation consulting for 16 years, including resource estimation of primary gold deposits for at least five years. I have been involved in gold exploration and mining operations for at least five years. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). My most recent personal inspection of the Property was February 23 to 24, 2011 and August 1 to 3, 2011. I am responsible for Sections 1.1 to 1.4, 4.0 to 12.0, 14.0, 23.0, 24.0, 25.1, 26.1 and 27.0 (Geology section only) of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have had prior involvement with the Property that is the subject of the Technical Report. I reviewed the technical report prepared by Burns & Reddick (Snowden, 2004) and authored technical reports in February and March 2011. I have read the Instrument and the parts of the Technical Report that I am responsible for has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Prodigy Gold Incorporated 28-7 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada Signed and dated this 3rd day of February, 2012 at Perth, Australia
“Original document signed and sealed by Andrew F. Ross, MSc., P.Geo., CP, FAusIMM” Andrew F. Ross, MSc., P.Geo., CP, FAusIMM Senior Principal Consultant Snowden Mining Industry Consultants Inc.
Prodigy Gold Incorporated 28-8 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.7 GRAHAM W ILKINS,P.ENG.
I, Graham Wilkins, P.Eng., of Vancouver, British Columbia, do hereby certify:
I am a Project Director with EBA, A Tetra Tech Company with a business address at Oceanic Plaza, 9th Floor, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X2. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of Carleton University (B.Eng. Civil, 1986). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia, License #16255. My relevant experience includes over 20 years of experience in planning, designing, and construction transportation projects in Canada. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). I have not completed a personal inspection of the Property. I am responsible for Sections 18.2.1 and 18.3 of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 2nd day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Graham Wilkins, P.Eng.” Graham Wilkins, P.Eng. Project Director EBA, A Tetra Tech Company
Prodigy Gold Incorporated 28-9 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.8 SCOTT M ARTIN,P.ENG.
I, Scott Martin, P.Eng., of Vancouver, British Columbia, do hereby certify:
I am a Project Director with EBA, A Tetra Tech Company with a business address at #150, 1715 Dickson Avenue, Kelowna, British Columbia, V1Y 9G6. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of The University of British Columbia, (Bachelor of Applied Sciences in Geological Engineering, May 1995). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia, Registration #24984. My relevant experience includes 16 years of geotechnical engineering and over 10 years of mining projects, primarily related to tailings and waste management. I have undertaken assignments for such projects as the Pebble Project, Minto Mine, Mirador Copper, Ketza River Project, Baker Lake Mine and others. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). My most recent personal inspection of the Property was November 22, 2011 for two days. I am responsible for Sections 18.4 and 18.6 of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 3rd day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Scott Martin, P.Eng.” Scott Martin, P.Eng. Project Director EBA, A Tetra Tech Company
Prodigy Gold Incorporated 28-10 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada 28.9 CHARLES H UNT,P.ENG., MSC ., ACSM
I, Charles Hunt, P.Eng., MSc., of Vancouver, British Columbia, do hereby certify:
I am a Senior Geotechnical Engineer with EBA, A Tetra Tech Company with a business address at Oceanic Plaza, 9th Floor, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X2. This certificate applies to the technical report entitled Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada, dated February 3, 2012 (the “Technical Report”). I am a graduate of Camborne School of Mines, Part of Exeter University, (B.Eng., in 1995 & MSc., in 2003). I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia License #148944. My relevant experience is over 16 years in geotechnical engineering, with six years of Canadian experience relevant to open pit geotechnical stability. I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”). I am responsible for Sections 25.5 and 26.5 of the Technical Report. I am independent of Prodigy Gold Incorporated as defined by Section 1.5 of the Instrument. I have no prior involvement with the Property that is the subject of the Technical Report. I have read the Instrument and the parts of the Technical Report that I am responsible for and confirm that this has been prepared in compliance with the Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the parts of the Technical Report that I am responsible for, contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.
Signed and dated this 1st day of February, 2012 at Vancouver, British Columbia
“Original document signed and sealed by Charles Hunt, P.Eng., MSc.” Charles Hunt, P.Eng., MSc. Senior Geotechnical Engineer EBA, A Tetra Tech Company
Prodigy Gold Incorporated 28-11 1195890100-REP-R0001-01 Magino Property Preliminary Economic Assessment and Technical Report, Ontario, Canada