Black Thor, Black Label and Big Daddy Chromite Deposits

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

National Instrument 43-101Technical Report

Black Thor, Black Label and Big Daddy chromite deposits McFaulds Lake Area, Ontario, Canada Porcupine Mining Division, NTS 43D16 Mineral Resource Estimation Technical Report

UTM: Zone 16, 551333m E, 5845928m N, NAD83

Prepared For

Noront Resources Ltd.

Alan Aubut P.Geo.

July 27, 2015

PO Box 304, Nipigon, Ontario, P0T 2J0 Tel: (807) 887-2300 Email: [email protected]

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Table of Contents Table of Contents ...... iii List of Figures ...... vii List of Tables ...... viii 1. Summary ...... 1 1.1. Cautionary Note ...... 3 2. Introduction ...... 4 3. Reliance on Other Experts ...... 5 4. Property Description and Location ...... 8 4.1. Property History and Underlying Agreements ...... 9 4.2. Parties to the Agreements ...... 10 5. Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 11 5.1. Accessibility ...... 11 5.2. Climate ...... 11 5.3. Local resources ...... 11 5.4. Infrastructure ...... 11 5.5. Physiography ...... 12 6. History ...... 13 6.1. General ...... 13 6.2. Discovery history ...... 14 7. Geological Setting and Mineralisation ...... 15 7.1. Regional geology ...... 15 7.1.1. Precambrian Basement Complex ...... 15 7.1.2. Paleozoic Platform Rocks ...... 16 7.1.3. Quaternary Cover ...... 16 7.2. Local Geology ...... 16 7.2.1. Volcanics ...... 17 7.2.2. Ultramafic Rocks ...... 17 7.2.3. Felsic Intrusive Rocks ...... 19 7.2.4. Faulting ...... 19 7.3 Mineralisation ...... 19 7.3.1 Chromite Mineralisation ...... 19 7.3.1.1. Black Thor Chromite Zone ...... 21 7.3.1.2. Black Label Chromite Zone ...... 22 7.3.1.3. Big Daddy Chromite Zone ...... 22 7.3.2 Sulphide Mineralisation ...... 23 7.3.3 Platinum Group Element Mineralisation ...... 23 8. Deposit Types ...... 24 9. Exploration ...... 25 10. Drilling ...... 28 11. Sample Preparation, Analyses and Security...... 29 11.1. QA/QC Procedure ...... 31 12. Data Verification ...... 33 13. Mineral Processing and Metallurgical Testing ...... 34 13.1. Black Thor ...... 34 13.1.1 Grindability Characteristics ...... 34

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13.1.1.1. Bond Ball and Rod Mill Work Index ...... 34 13.1.1.2. Bond Abrasion Index ...... 34 13.1.1.3. Crusher Work Index ...... 34 13.1.2 Tumbling Tests ...... 34 13.1.3 Variability Test Work ...... 34 13.1.3.1. Feed Preparation ...... 35 13.1.3.2. Coarse Processing ...... 35 13.1.3.3. Fines Processing ...... 35 13.1.3.4. Magnetic Separation ...... 36 13.1.3.5. Thickening Test Work ...... 36 13.1.3.6. Filtration Test Work ...... 36 13.1.3.7. Conclusions ...... 36 13.1.4 Mintek Small Scale Smelting Tests ...... 37 13.1.4.1. Part 1 ...... 37 13.1.4.1.1. Scope...... 37 13.1.4.1.2. Findings ...... 37 13.1.4.2. Part 2 ...... 38 13.1.4.2.1. Scope...... 38 13.1.4.2.2. Findings ...... 38 13.1.5 Mintek DC Furnace Pilot Furnace Smelting Test ...... 39 13.1.5.1. Scope ...... 39 13.1.5.2. Findings ...... 39 13.1.6 Rotary Kiln Test ...... 39 13.1.6.1. Scope ...... 39 13.1.6.2. Phase 1 ...... 40 13.1.6.3. Phase 2 ...... 40 13.1.7 Shotting Test ...... 41 13.2. Big Daddy ...... 41 13.2.1 World Industrial Minerals ...... 41 13.2.1.1. Methods Used ...... 41 13.2.1.1. Results ...... 42 13.2.2 SGS Mineral Services Testing ...... 42 13.2.2.1. Methods Used ...... 42 13.2.2.2. Results ...... 42 13.2.3 Xstrata Process Support ...... 44 13.2.3.1. Campaign One (2011) ...... 44 13.2.3.1.1. Crushing and Screening ...... 44 13.2.3.1.1.1 Methods Used ...... 44 13.2.3.1.1.2 Results ...... 44 13.2.3.1.2. Metallurgical Testing ...... 44 13.2.3.1.1.3 Methods Used ...... 44 13.2.3.1.1.4 Results ...... 44 13.2.3.2. Campaign 2 (2013) ...... 45

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13.2.3.2.1. Metallurgical Testing ...... 45 13.2.3.2.2. Results ...... 45 13.3. Discussion ...... 45 14. Mineral Resource and Mineral Reserve Estimates ...... 47 14.1. Mineral Resource Estimation ...... 47 14.1.1. Software Used ...... 47 14.1.2. The Use of Unfolding...... 47 14.1.3. Block Size Determination ...... 47 14.1.4. Nearest Neighbour Model ...... 48 14.1.5. Ordinary Kriging Model ...... 48 14.1.6. Block Model Validation ...... 48 14.1.7. Volume Variance Correction ...... 49 14.1.8. Model Verification ...... 49 14.1.9. Black Thor and Black Label Chromite Deposits ...... 49 14.1.9.1. Specific Gravity ...... 49 14.1.9.2. Geological Domains...... 50 14.1.9.3. Drill Hole Database...... 50 14.1.9.4. Sample Selection ...... 51 14.1.9.5. Compositing ...... 52 14.1.9.6. Exploratory Data Analysis ...... 53 14.1.9.7. Grade Variography ...... 54 14.1.9.8. Nearest Neighbour Model ...... 55 14.1.9.9. Ordinary Kriging Block Model ...... 56 14.1.9.10. Volume Variance Correction ...... 56 14.1.10. Big Daddy Chromite Deposit ...... 57 14.1.10.1. Specific Gravity ...... 57 14.1.10.2. Geological Domains...... 57 14.1.10.3. Drill Hole Database...... 59 14.1.10.4. Sample Selection ...... 60 14.1.10.5. Compositing ...... 60 14.1.10.6. Exploratory Data Analysis ...... 61 14.1.10.7. Grade Variography ...... 63 14.1.10.8. Nearest Neighbour Block Model ...... 64 14.1.10.9. Ordinary Kriging Block Model ...... 65 14.1.10.10. Volume Variance Correction ...... 65 14.2. Mineral Resource Reporting ...... 66 14.2.1. Resource Classification...... 66 14.2.1.1. Determination of Cut-off Grade ...... 67 14.2.1.2. Black Thor chromite deposit ...... 68 14.2.1.2.1. Black Thor Main Domain...... 68 14.2.1.2.2. Black Thor Faulted Domain ...... 68 14.2.1.2.3. Black Label chromite deposit ...... 69 14.2.1.3. Big Daddy chromite deposit ...... 69 14.3.1. Risks and Opportunities ...... 73 14.3.1.1. Risks...... 73

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

14.3.1.2. Opportunities ...... 73 15. Mineral Reserve Estimates ...... 76 16. Mining Methods ...... 77 17. Recovery Methods ...... 78 18. Project Infrastructure ...... 79 19. Market Studies and Contracts...... 80 20. Environmental Studies, Permitting and Social or Community Impact ...... 81 21. Capital and Operating Costs ...... 82 22. Economic Analysis ...... 83 23. Adjacent Properties ...... 84 23.1 Eagle’s Nest Ni-Cu-PGE deposit ...... 84 23.2 Eagle Two Ni-Cu-PGE Occurrence ...... 84 23.3 AT12 Ni-Cu-PGE Occurrence ...... 84 23.4 Blackbird deposits ...... 84 23.5 Black Horse Chromite Deposit ...... 85 23.6 Black Creek Chromite Deposit ...... 85 24. Other Relevant Data and Information ...... 87 25. Interpretation and Conclusions ...... 88 26. Recommendations ...... 89 27. References ...... 90 Certificate of Qualifications ...... 93 Appendix 1 – Summary of Diamond Drilling ...... 94 Appendix 2 – Exploratory Data Analysis ...... 103 Histograms – Black Thor...... 103 Histograms – Big Daddy ...... 104 Scatter Plots – Black Thor ...... 105 Scatter Plots – Big Daddy ...... 107 Appendix 3 – Experimental Variograms and Models ...... 108 Black Thor ...... 108

Cr2O3 108 UCSA 108 UCSB 108 UCSC 109 Pt 109 UCSA 109 UCSB 110 UCSC 110 Pd 111 UCSA 111 UCSB 111 UCSC 112 Big Daddy chromite deposit ...... 113

Cr2O3 113 UCSA 113 UCSB 113 UCSC 114 Appendix 4 – OK Search Parameters Used ...... 115 Black Thor and Black Label ...... 115

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Big Daddy ...... 115 Appendix 5 – Block Model Plans and Sections ...... 116 NN Models Sample Plan views – Black Thor and Black Label chromite deposit ...... 116 NN Models Sample Plan views - Big Daddy chromite deposit ...... 117 OK Models: Sample Plan views – Black Thor and Black Label chromite deposits ...... 118 OK Models: Sample Plan views - Big Daddy chromite deposit ...... 119 NN Model – N-S Sample Sections - Black Thor and Black Label chromite deposits ...... 120 NN Model – N-S Sample Sections - Big Daddy chromite deposit ...... 121 OK Models - N-S Sample Sections – Black Thor and Black Label chromite deposits ...... 122 OK Models - N-S Sample Sections - Big Daddy chromite deposit ...... 123 Appendix 6 - Model Validation ...... 124

Swath Plots - Cr2O3 ...... 124 Black Thor ...... 124 UCSA 124 UCSB 125 UCSC 125 Black Thor Faulted Domain ...... 126 UCSA 126 UCSB 127 UCSC 127 Black Label Domain ...... 128 UCSA 128 UCSB 128 UCSC 129 Big Daddy ...... 130 14.2.1.4. UCSA ...... 130 14.2.1.5. UCSB ...... 130 14.2.1.6. UCSC ...... 131 Appendix 7 – Variance Correction ...... 132 Theory Used ...... 132 Appendix 8 – Resource Classification Definitions ...... 135 Mineral Resource ...... 135 Inferred Mineral Resource ...... 136 Indicated Mineral Resource ...... 136 Measured Mineral Resource...... 137 Modifying Factors ...... 137

List of Figures Figure 4.1 - Map showing the location of the Black Thor, Black Label and Big Daddy chromite deposits. .. 6 Figure 4.2 - Claim map of the McFaulds Lake Area...... 7 Figure 4.3 - Map of Noront Property acquired from Cliffs as of June 24, 2015...... 8 Figure 7.1 - Geological map of the Superior Province showing tectonic domains (from Percival, 2007). . 15 Figure 7.2 - Local Geology of the McFaulds Lake Area...... 17 Figure 7.3 - Generalized stratigraphic column of the Black Thor, Black Label and Big Daddy properties. . 18

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 7.4 - Schematic geological interpretation of the Black Thor, Black Label and Big Daddy properties...... 18 Figure 7.5 - Major Chromite Mineralization Types found at Black Label and Black Thor ...... 20 Figure 9.1 – Plan view of drilling for the Black Thor project. Grid north is 315° Astronomic...... 26 Figure 9.2 – Plan view for the Big Daddy project. Grid north is 330° Astronomic...... 26 Figure 9.3 - Sample cross section (2000E – looking west) for the Black Thor and Black Label Deposits. The orange and blue lines are a slice through the mineral envelopes used to select samples...... 27 Figure 9.4 - Sample cross section (1800E – looking west) for the Big Daddy Deposit. The green line is a slice through the mineral envelope used to select samples...... 27 Figure 13.1 - Cr grade of slag and alloy from the Big Daddy smelting test (Muinonen and Barnes, 2013)...... 45 Figure 14.1 - Isometric view of the geological domains used...... 50

Figure 14.2 - Histogram of Cr2O3 within the Black Thor Main Domain...... 53

Figure 14.3 - Experimental variograms and fitted models for Cr2O3...... 55

Figure 14.4 - Initial Polynomial regression analysis of SG vs. % Cr2O3 for Big Daddy...... 58

Figure 14.5 – A Polynomial regression analysis of SG vs. % Cr2O3 for Big Daddy, after trimming...... 58 Figure 14.6 - Isometric view of the Big Daddy geological domain used...... 59 Figure 14.7 - Histogram of sample length...... 61

Figure 14.8 - Histogram of Cr2O3 for Big Daddy ...... 62

Figure 14.9 - Experimental variograms and fitted models for Big Daddy - Cr2O3...... 65 Figure 14.10 - Chart showing price of common types of Chromite ore (www.mining-bulletin.com)...... 66 Figure 14.11 - Cr2O3 Tonnage-Grade curves for the Black Thor Main domain...... 73 Figure 14.12 - Cr2O3 Tonnage-Grade curves for the Black Thor Faulted domain...... 74 Figure 14.13 - Cr2O3 Tonnage-Grade curves for the Black Label domain...... 74 Figure 14.14 - Cr2O3 Tonnage-Grade curves for the Big Daddy chromite deposit...... 75 Figure 23.1 - Location of the Black Thor, Black Label and Big Daddy chromite deposits and adjacent chromite and Ni-Cu-PGE discoveries...... 86

List of Tables Table 4.1 - Claim status of the Cliffs property acquired by Noront (as of June 24, 2015)...... 9 Table 7.1 – An example of Chromite grades for from the Big Daddy deposit ...... 19 Table 7.2 - Average EMPA chromite crystal compositions from the Black Label, Black Thor, and Kemi deposits...... 22 Table 7.3 - Averaged* Pt and Pd values (ppb) for the Black Thor and Black Label zones...... 23 Table 9.1 – Summary of all diamond drilling done on the Black Thor and Big Daddy projects...... 25

Table 13.1 - Cr2O3 Recoveries for Mass Balance Head Grades based on Heavy Liquid Separation testing...... 37 Table 13.2 - Summary of World Industrial Minerals testing results...... 41 Table 13.3 - SGS Gravity separation recovery results summary...... 43

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Table 13.4 - SGS Recoveries from the various treatment streams...... 43 Table 14.1 - Summary of Holes excluded ...... 52 Table 14.2 - Summary of sample lengths by domain...... 52 Table 14.3 - Summary Univariate Statistics ...... 53 Table 14.4 - Correlation Matrix ...... 54 Table 14.5 - Variogram Model Parameters...... 56 Table 14.6 – NN and OK model summary statistics, before and after variance correction...... 56 Table 14.7 - Summary Univariate Statistics ...... 62 Table 14.8 - Correlation Matrix ...... 63 Table 14.9 - Variogram Model Parameters...... 64 Table 14.10 - Sample file and Nearest Neighbour model summary statistics ...... 65 Table 14.11 - Sample file, Nearest Neighbour and OK model summary statistics, before and after variance correction...... 66 Table 14.12 - Classification of In-Situ Resources for Black Thor (Main and Faulted Domains combined), at different cut-offs...... 70 Table 14.13 - Black Thor Main Domain - Classification of In-Situ Resources, at different cut-offs...... 70 Table 14.14 - Black Thor Faulted Domain - Classification of In-Situ Resources, at different cut-offs...... 71 Table 14.15 - Black Label Domain - Classification of In-Situ Resources, at different cut-offs...... 71 Table 14.16 - Summary of Classification of In-Situ Resources, at different cut-offs, for the Big Daddy chromite deposit ...... 72 Table 26.1 - Proposed Exploration Budget for Infill Drilling ...... 89

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

1. Summary The property is located in North-western Ontario, approximately 280 kilometres north of the town of Nakina. In April of 2015 Noront Muketei Minerals Ltd., a wholly owned subsidiary of Noront Resources Ltd., acquired all assets, properties and interests of Cliffs Chromite Ontario Inc. and Cliffs Chromite Far North Inc. from Cliffs Natural Resources Inc. thus acquiring varying interests in 9 unpatented mining claims totalling 140 units covering approximately 2,240 ha. Of these, 5 are held in a joint venture with Canada Chrome Mining Corporation (30%) and cover the Big Daddy chromite deposit. The other 4 claims cover the Black Thor and Black Label chromite deposits.

The area is underlain by Archean volcanics and ultramafic rocks intruded by a granitoid complex. The chromite deposits are hosted by a multi-phase layered ultramafic intrusion consisting of peridotite, olivine cumulates including dunite, chromite, pyroxenite and gabbro. The chromite mineralisation consists of fine grained disseminated to massive accumulations of chromite grains typically in a peridotite to olivine cumulate matrix. There are multiple layers of significant chromite accumulation.

Exploration to date has consisted of geophysics followed by diamond drilling designed to trace the various chromite zones along strike and down dip. The ultimate objective is to define several chromite deposits that can be economically extracted using a combination of open pit and underground mining techniques.

Using data available as of April 30, 2013, an updated Ordinary Kriged block model was created for the Black Thor and Black Label chromite deposits. And using the drill hole data available as of June 1, 2012, an Ordinary Kriged block model was created for the Big Daddy chromite deposit. A significant proportion of all resources present have a high enough confidence in the estimate that they can be classified as Measured and Indicated Resources with the remainder being Inferred Resources. The following table provides the breakdown based on CIM resource classifications, using a cut-off of 20% Cr2O3.

Using this 20% cut-off, the Black Thor deposit hosts 137.7 million tonnes grading 31.5% Cr2O3 of

Measured and Indicated resources, the Black Label hosts 5.4 million tonnes grading 25.3% Cr2O3 of

Indicated resources and the Big Daddy deposit hosts 29.1 million tonnes at a grade of 31.7% Cr2O3 of Measured and Indicated resources. Preliminary metallurgical testing indicates the chromite mineralisation should be easily upgradable through gravity concentration.

In addition the Black Thor deposit has 26.8 million tonnes at a grade of 29.3 Cr2O3 of Inferred resources,

Black Label has 0.9 million tonnes at a grade of 22.8% Cr2O3 Inferred resources and the Big Daddy has

3.4 million tonnes at a grade of 28.1% Cr2O3 of Inferred resources.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The drill hole spacing for the Black Thor and Big Daddy deposits is typically 50 metres with several off- azimuth holes. As a result there is good confidence in the lateral continuity of the mineralisation to a degree that a significant proportion of the defined resources for those two deposits can be classified as Measured and Indicated Resources at this time.

Classification Tonnes %Cr2O3 (millions) Black Thor Measured Resources 107.6 32.2 Indicated Resources 30.2 28.9 Meas. & Ind. Resources 137.7 31.5 Inferred Resources 26.8 29.3 Black Label Measured Resources - - Indicated Resources 5.4 25.3 Meas. & Ind. Resources 5.4 25.3 Inferred Resources 0.9 22.8 Big Daddy Measured Resources 23.3 32.1 Indicated Resources 5.8 30.1 Meas. & Ind. Resources 29.1 31.7 Inferred Resources 3.4 28.1 Notes: 1. CIM Definition Standards were followed for classification of Mineral Resources. 2. The Mineral Resource estimate uses drill hole data available as of April 30, 2013 for the Black Thor and Black Label deposits and June 3, 2012 for the Big Daddy deposit.

3. The cut-off of 20% Cr2O3 is the same cut-off used for the Kemi deposit as reported by Alapieti et al. (1989). 4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

It is recommended that further drilling be done to infill areas that currently are poorly sampled, and to extend the limits down dip as the mineralisation is still open on this direction. The estimated cost of this program is $3.5 million.

Given the tonnage and grade of the resources for the Black Thor, Black Label, and Big Daddy deposits, as reported, it is the author’s opinion that a preliminary economic assessment (PEA) should be completed prior to conducting any further diamond drilling. The approximate cost for a PEA is estimated to range between $1 and $2 million.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

1.1. Cautionary Note The deeper portions of the volume modelled and the extremities are poorly tested by drilling as a result of the sparse drilling in these areas. As such the poorly sampled areas can only be classified as Inferred Resources. Further infill and deeper drilling is required.

This estimate is effective as of July 27, 2015 and is reflective of all data available as of that date.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

2. Introduction Noront Resources Ltd., through its wholly owned subsidiary Noront Muketei Minerals Ltd. (Noront), acquired Cliffs Chromite Ontario Inc. and Cliffs Chromite Far North Inc. from Cliffs Natural Resources Inc at the end of April 2015. The properties held by these two companies are located in the McFaulds Lake area of Northwestern Ontario. Noront is now the sole owner of the Black Thor and Black Label chromite deposits and is the joint venture partner (70%) with Canada Chrome Mining Corporation (30%) on the Big Daddy chromite deposit. Canada Chrome Mining Corporation is a 100% owned subsidiary of KWG Resources Inc. (KWG).

The purpose of this report is to document the resource estimates for all three chromite deposits acquired from Cliffs. These include the Black Thor, the Black Label and the Big Daddy chromite deposits. This report will support documents which may be required by Canadian regulatory authorities, to better inform shareholders about company activities, and potentially to support possible future financing efforts.

Sibley Basin Group Geological Consulting Services Ltd. (SBG) was retained by Mr. Eric Mosley, Exploration Manager for Noront to prepare this report detailing resource estimates done on all of the properties acquired by Noront from Cliffs.

Alan Aubut, P.Geo., on behalf of SBG, has visited the McFaulds Lake projects that are the subject of this report on several instances. During these visits activities have included viewing drill core from all of the subject properties as well as inspecting logging facilities. The most recent visit was done in March 2014, at a time no active drilling was being conducted. But confirmation was done of some of the staking as well as a fly over of the previously active drilling areas where snow covered drill roads and drill pads were quite evident. As all of the sampling programs have been monitored by reliable and trusted external personnel no additional check samples were deemed necessary.

For sections 11 (Sample Preparation, Analyses and Security) and 12 (Data Verification) the author has relied on the methods, processes and conclusions provided in the report “NI 43-101 Technical Report on the Mineral Resource estimate for the Big Daddy Chromite Deposit, McFaulds Lake Area, James Bay Lowlands, Northern Ontario” as prepared by Micon International Ltd., for Spider Inc. and KWG Resources Inc. in 2010 (Gowans et al, 2010a). This report has also been prepared using public documents.

The author is satisfied that proper sample preparation, analyses and security protocols, which meet CIM best practices guide lines, have been and still are in place. The author is also satisfied that proper QA/QC protocols and methods that meet CIM best practice guidelines have been in place and are still being used. A review of the data by the author showed no issues and as such the data is considered valid, representative and suitable to be used for resource estimation.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

3. Reliance on Other Experts SBG did not rely on any experts that are not considered Qualified Persons under National Instrument 43- 101.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 4.1 - Map showing the location of the Black Thor, Black Label and Big Daddy chromite deposits.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 4.2 - Claim map of the McFaulds Lake Area.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

4. Property Description and Location The Black Thor and Black Label chromite deposits were previously held by Cliffs Natural Resources Inc. (Cliffs) and the Big Daddy chromite deposit was held under a joint venture agreement between KWG Resources (30%) and Cliffs (70%). In April of 2015 Noront Resources, through its wholly owned subsidiary Noront Muketei Minerals Ltd. (Noront), acquired all of the interests previously held by Cliffs.

The property is situated in the Porcupine Mining Division in area BMA 527861 (G-4306) and is located at about UTM 551333m E, 5845928m N, Zone 16, NAD83, and is approximately 80 kilometres east of the community of Webequie (see Figure 4.1). The property consists of 9 unpatented mining claims totalling 140 units covering approximately 2,240 ha (see Figure 4.3). The claim locations are “as staked” and are based on GPS-derived locations of claim posts. The current status of all the claims is presented in Table 4.1. Figure 4.2 shows the property relative to all other claims in the McFaulds Lake area. Currently claims 3011028, 3011027, 3012251 and 3012250 are covered by Exploration Permit PR13-10098 effective from April 19, 2013 to April 18, 2016. There currently is no Exploration Plan in effect.

Figure 4.3 - Map of Noront Property acquired from Cliffs as of June 24, 2015.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

4.1. Property History and Underlying Agreements Claims 3011027, 3011028, 3012250 to 3012253 inclusive were recorded by Richard Nemis (the “Nemis Claims”), on April 22, 2003. On June 17, 2003 Richard Nemis agreed to sell a 100% interest in the Nemis Claims to Freewest Resources Canada Inc. (Freewest). Freewest recorded claims 3008269, 3008793 and 3008268 on August 11, 2003.

Table 4.1 - Claim status of the Cliffs property acquired by Noront (as of June 24, 2015).

Work Total Total Present Work NSR Claim No Units Area Due Date Recorded Req’d Work Reserve Assigned P 3012253 16 256 2020-Apr-22 2003-Apr-22 $6,400 $96,000 $2,733,109 $0 2% P 3012252 16 256 2018-Apr-22 2003-Apr-22 $6,240 $83,360 $0 $0 2% P 3008269 16 256 2018-Aug-11 2003-Aug-11 $6,240 $83,360 $9,429 $72,145 0% P 3008793 12 192 2017-Aug-11 2003-Aug-11 $480 $61,920 $0 $0 0% P 3008268 16 256 2018-Aug-11 2003-Aug-11 $6,240 $83,360 $0 $13,803 0% P 3011027 16 256 2019-Apr-22 2003-Apr-22 $6,400 $ 89,600 $ 895,417 $0 2% P 3011028 16 256 2019-Apr-22 2003-Apr-22 $6,400 $ 89,600 $ 3,361,866 $ 1,959 2% P 3012250 16 256 2019-Apr-22 2003-Apr-22 $6,400 $89,600 $0 $0 2% P 3012251 16 256 2019-Apr-22 2003-Apr-22 $6,400 $89,600 $ 3,132,878 $0 2% 140 2,240 $51,200 $766,400 $10,132,699 $87,907

On December 5, 2005 KWG Resources Inc. (KWG) and Spider Resources Inc. (Spider), as equal partners, entered into an option agreement with Freewest to earn a 50% interest in claims 3012253, 3012252, 3008269, 3008793 and 3008268 along with two single claim units (~32 ha) excised from adjoining Freewest claims 3012250 and 3012251 for exploration expenditures of $1,500,000 by 31 October 2009. On July 21, 2009 KWG purchased half of the 2% Net Smelter Royalty (NSR) that had been retained by Nemis. This 1% NSR royalty was then conveyed to 7207565 Canada Inc., a subsidiary of KWG. This 1% NSR royalty has since been sold to the Anglo Pacific Group. KWG and Spider each earned a 25% interest in the property as of September 10, 2009. On September 10, 2009 Freewest, KWG and Spider amended the original option agreement by allowing KWG and/or Spider to earn an additional 10% interest in the property through annual expenditures of $2,500,000 each within three years ending March 31, 2012 with them earning 3% in each of the first two years and 4% in the last year. This additional 10% would also be earned if one or both parties spent a minimum of $5,000,000 and delivered a positive feasibility study to Freewest by March 31, 2012. In November of 2009 Cliffs Natural Resources (Cliffs) acquired Freewest Resources. Subsequently all interests acquired were transferred to Cliffs Chromite Ontario Ltd. In June, 2010 Cliffs Natural Resources purchased Spider and all interests in the property acquired were transferred to Cliffs Chromite Far North Inc.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

By March 31st of 2012, KWG had completed all of its requirements under the September, 2009 amended agreement to bring their interest to 30% in the property. On April 30, 2015 Noront Muketei Minerals Ltd. (Noront), a wholly owned subsidiary of Noront Resources Ltd., completed the purchase of Cliffs Chromite Ontario Inc. and Cliffs Chromite Far North Inc. from Cliffs Natural Resources Inc.

4.2. Parties to the Agreements KWG Resources Inc. is a junior exploration company in which Cliffs Natural Resources Inc. held an approximately 13.8% interest. Cliffs Natural Resources Inc. had elected not to have board representation.

Cliffs Chromite Far North Inc. was a wholly owned subsidiary of Cliffs Natural Resources Inc. and had as its assets all of the former assets of Spider. Cliffs Chromite Ontario Inc. was a wholly owned subsidiary of Cliffs Natural Resources Inc. and had as its assets all of the former assets of Freewest.

Noront Resources Ltd. is a junior exploration company that acquired all of the interests previously held by Cliffs Chromite Ontario Inc. and Cliffs Chromite Far North Inc., including the approximately 13.8% of the issued and outstanding shares of KWG.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

5. Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1. Accessibility Access to the property is by charter air service, available from Nakina, 280 kilometres to the south- southwest, or Pickle Lake, 295 kilometres to the west-southwest. Access for surface exploration activities such as diamond drilling is by helicopter in the spring, summer and fall. During the winter access is possible using tracked vehicles, including snowmobiles.

During the summer the majority of rivers and creeks in the area are navigable by canoe and/or small motor boats.

The closest all weather road is at Nakina, however there is a winter road system that services the First Nation communities of Marten Falls, Webequie, Lansdowne House, Fort Albany, and Attawapiskat. It is possible that this system can be extended to provide access to the McFaulds Lake area.

5.2. Climate The climate of the James Bay Lowlands area is dominantly a typical continental climate with extreme temperature fluctuations from the winter to summer seasons. But during the summer months this can be moderated by the maritime effects of James and Hudson Bays. Environment Canada records (http://climate.weatheroffice.gc.ca/climateData/canada_e.html) show that summer temperatures range between 10°C and 35°C, with a mean temperature of 13°C in July. Winter temperatures usually range between -10°C and -55°C with an average January temperature of -23°C. Lakes typically freeze-up in mid-October and break-up is usually in mid-April. The region usually receives approximately 610 mm of precipitation per year, with about 1/3 originating as snow during the winter months. On a yearly basis the area averages about 160 days of precipitation per year.

5.3. Local resources Other than stands of timber there are no local resources available on or near the property.

All equipment and supplies have to be air-lifted and directed through the nearby native communities such as Webequie, Marten Falls, Lansdowne House and Attawapiskat. The nearest First Nation community is Webequie. It has a well maintained all season runway, a hospital, a public school, mail and telephone service, as well as a community store and a hotel. Webequie is also accessible during the winter months by a winter road.

5.4. Infrastructure Currently there is no infrastructure in the immediate project area. The closest all weather road is at Nakina, and there is a winter road system that services the nearby First Nation communities of Marten Falls, Webequie, Lansdowne House, Fort Albany, and Attawapiskat. It is possible that this system can be extended to provide access to the McFaulds Lake area. All of the local First Nation communities are serviced by air and have all weather air strips. Power to these First Nation communities is provided by

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits diesel generators while Nakina is connected to the Ontario hydro-electric power grid. Nakina is also the closest terminal on the Canadian National Railway (CNR) system.

5.5. Physiography The project area is located along the western margin of the James Bay Lowlands of Northern Ontario within the Tundra Transition Zone consisting primarily of string bog and muskeg whereby the water table is very near the surface. Average elevation is approximately 170 metres above mean sea level. The property area is predominantly flat muskeg with poor drainage due to the lack of relief. Glacial features are abundant in the area and consist of till deposits, eskers, and drumlins, all of which are typically overlain by marine clays from the Hudson Bay transgression. Currently, the region is still undergoing postglacial uplift at a rate of about 0.4 cm per year (Riley, 2003). The project area is located between the drainage basins of the Attawapiskat and Muketei Rivers. The Muketei River is a tributary of the larger Attawapiskat River that flows eastward into James Bay.

The bog areas consist primarily of sphagnum moss and sedge in various states of decomposition. The southern portion of the property is partially covered by forested areas. Trees are primarily black and white spruce (Picea glauca and mariana), tamarack (Larix laricina), with minor amounts of trembling aspen (Populus tremuloides), balsam poplar (Populus balsamifera) and white birch (Betula papyrifera). In the northern portion of the property, trees are restricted to narrow bands along rivers and creeks and on well drained raised beaches. Willows (Salix) and alders (Alnus) are present along creeks and in poorly drained areas (Tuchscherer et. al., 2009).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

6. History

6.1. General The first geological investigation of the James Bay Lowlands and the McFaulds Lake area was by Robert Bell of the Geological Survey of Canada (GSC). He and his crew traversed and mapped the shores of the Attawapiskat River from James Bay and past the McFaulds Lake area (Bell, 1887). Subsequently, in 1906 and between 1940 and 1965, the GSC and the Ontario Department of Mines (ODM) initiated further regional geological programs aimed at determining the petroleum potential of the Hudson Bay and James Bay sedimentary basins, and determining the potential for hydrocarbons in the Moose River Basin area.

Prior to the 1990’s, the James Bay lowlands were sparsely explored. The few companies doing exploration in the area included Consolidated African Selection Trust (Armstrong et al., 2008) and Monopros Ltd., the Canadian exploration division of Anglo-American DeBeers. Most of the active exploration at that time was restricted to the region near Nakina where access is facilitated by road and train.

Modern day exploration in the McFaulds Lake area only began in the early 1990’s as a result of diamond exploration. In 1989 Monopros Ltd. began exploration near the Attawapiskat kimberlites, which resulted in the discovery of the Victor pipe. The Spider/KWG joint venture resulted in the discovery of the Good Friday and MacFadyen kimberlites in the Attawapiskat cluster, as well as the 5 Kyle kimberlites (Thomas, 2004). This activity led the way for other diamond exploration companies, i.e., Canabrava Diamond Corporation, Condor Diamond Corp., Dumont Nickel Inc., Dia Bras Exploration Inc., Greenstone Exploration Company Ltd., and Navigator Exploration Corp. (Tuchscherer et al, 2009).

In the early 2000’s copper mineralisation was discovered by DeBeers Canada Inc. in the McFaulds Lake area. This discovery was subsequently drill defined by Spider/KWG and named the McFaulds No. 1 volcanogenic massive sulphides (VMS) deposit. Further copper mineralisation was found at the McFaulds No. 3 VMS deposit (Gowans and Murahwi, 2009).

Richard Nemis arranged to have claims staked in the McFaulds Lake area, including the ones hosting the Black Thor, Black Label, and Big Daddy chromite deposits. He optioned the claims to Freewest who then optioned the claims to Spider Resources and KWG Resources in 2005. The first chromite mineralisation found was by Spider/KWG in hole FW-06-03, in 2006.

The discovery of the Eagle One nickel massive sulphide deposit by Noront Resources in 2007 resulted in the most recent staking rush. Over the next two years the Blackbird, Black Creek, Black Thor and Black Label chromite deposits were found.Cliffs Natural Resources purchased Freewest Resources in late 2009 and Spider Resources in 2010, thereby taking ownership of the Black Thor and Black Label chromite deposits, as well as a portion of the Big Daddy chromite deposit. In April 2015, Noront Muketei Minerals purchased all assets and interests from Cliffs in the Black Thor, Black Label, and Big Daddy deposits.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

6.2. Discovery history In April of 2003 John der Weduwen staked claims 3012250 to 3012253 and then transferred 100% to Richard Nemis who then optioned the claims to Freewest Resources Canada Inc. (Freewest). In late July- early August of 2003 Scott Morrison staked claims 3008268, 3008269 and 3008793 and then transferred 100% to Freewest. On August 14, 2003, the property was transferred by Mr. Nemis to Freewest.

Subsequently, Freewest optioned the property to Noront Resources Ltd. in 2005 who in turn, assigned its interest to Probe Metals Ltd. in an accompanying agreement later that year. In March of 2006, Probe drilled three holes targeting airborne and ground geophysical anomalies intersecting magnetite-bearing peridotites with no base-metal sulphide mineralisation. Following the completion of these drill holes, Probe returned the property to Noront in 2006, which later transferred the claims back to Freewest.

In December 2005, Spider Resources and KWG Resources signed an option agreement with Freewest covering claims 3012253, 3012252, 3008269, 3008793 and 3008268. In January of 2006 3 holes were drilled to test various geophysical anomalies. Hole FW-06-03 intersected two bands of massive chromite. The first band, from 153.27m to 154.3m, assayed 34.49% Cr2O3and the second, from 158.8m to 159.65m, assayed 31.97% Cr2O3. It is this zone of chromite mineralisation that is now referred to as the Big Daddy chromite deposit.

Freewest initiated their own exploration program in 2007, following the discovery of the Eagle One Ni- Cu-PGE deposit and the Big Daddy chromite deposit, situated nearby on adjacent claims. The first hole of the drilling program, BT-08-01, intersected 100 m of chromite mineralisation on what was to become the Black Thor Chromite Deposit. Subsequent deeper drilling on the Black Thor resulted in the discovery of the Black Label horizon to the north-west.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

7. Geological Setting and Mineralisation

Figure 7.1 - Geological map of the Superior Province showing tectonic domains (from Percival, 2007).

7.1. Regional geology The James Bay Lowlands regional geology can be subdivided into the following domains: Precambrian Basement Complex, Paleozoic platform rocks, and Quaternary cover.

7.1.1. Precambrian Basement Complex The property is located within the eastern portion of the Molson Lake Domain (MLD) of the Western Superior Province of the Canadian Shield (see Figure 7.1). Age dating has shown that there are two distinct assemblages: the Hayes River assemblage with an age of about 2.8 Ga, and the Oxford Lake assemblage with dates of about 2.7 Ga. Numerous mafic intrusions have been documented in the domain, such as the Big Trout Lake intrusion (Percival, 2007).

The domain is also intruded by numerous plutons of tonalitic, granodioritic, and granitic compositions.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

In the McFaulds Lake area of the James Bay lowlands there is very poor outcrop exposure. As a result an aeromagnetic compilation and geological interpretation map was completed by Stott in 2007. Important geological features observed by Stott (2007) are:

• West- and northwest-trending faults show evidence of right-lateral transcurrent displacement. • Northeast-trending faults show left-lateral displacement. • In the northern half of the Hudson Bay Lowlands area Archean rocks are overprinted by the Trans-Hudson Orogen (ca. 2.0 – 1.8 Ga). • Greenstone belts of the Uchi domain and Oxford-Stull domain merge under the James Bay Lowlands. • The Sachigo subprovince contains a core terrain, i.e., the North Caribou Terrain and “linear granite-greenstone” domains on the south and north flanks, that record outward growth throughout the Neoarchean. • Major dextral transcurrent faults mark the boundary between the Island Lake and Molson Lake domains. • Proterozoic (1.822 and 1.100 Ga) carbonatitic complexes intruded and reactivated these faults. • The area has undergone a doming event. Uplifted lithologies include a regional scale granodioritic gneissic complex to the NW of the property.

7.1.2. Paleozoic Platform Rocks The Paleozoic Platform rocks of the James Bay Lowlands consist primarily of upper Ordovician age (450 Ma to 438 Ma) sedimentary rocks. The sedimentary pile thickens significantly to greater than 100 metres to the east and north but is only intermittently present in the immediate property area. It is comprised mainly of poorly consolidated basal sandstone and mudstone overlain by muddy dolomites and limestones.

7.1.3. Quaternary Cover The area is mantled by a thin, but persistent, layer of glacial and periglacial till and clay deposits.

7.2. Local Geology Because of the limited bedrock exposure not much can be directly inferred about the geology of the property. The overburden varies in thickness from about 3m to 10m. It consists of a mixture of glacial outwash with abundant gravel to cobble sized pieces of unconsolidated tan coloured fossiliferous limestone, granitic rocks, as well as minor ultramafic rocks.

Most of the property geology can be indirectly inferred from the recent diamond drilling campaign and geophysical surveys. From these sources, it is interpreted that the property is underlain by: volcanics, ultramafic rocks and late felsic intrusive rocks (see Figure 7.2).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 7.2 - Local Geology of the McFaulds Lake Area.

7.2.1. Volcanics Volcanic lithologies present are typical of most greenstone belts of the Superior Province. They consist of foliated mafic to felsic volcanic flows and pyroclastic units, with intercalated schist, gabbro, iron- formation, and greywacke.

7.2.2. Ultramafic Rocks The volcanics are intruded by a large multi-cyclic ultramafic complex consisting primarily of dunite, peridotite, chromitite, pyroxenite, gabbro, leucogabbro, and gabbronorite. These lithologies are variably altered, primarily in the form of serpentinization of olivine with talc, tremolite, chlorite, kammererite, stichtite, and magnetite also being present.

Figure 7.3 and Figure 7.4 represent a general stratigraphic column and schematic geologic diagram respectively for the northern part of the property. These are based primarily on current drilling information (Tuchscherer et al., 2009).

The geological package is vertical or dips very steeply towards the SE. In part, it is fully overturned and dips steeply to the NW.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 7.3 - Generalized stratigraphic column of the Black Thor, Black Label and Big Daddy properties.

Figure 7.4 - Schematic geological interpretation of the Black Thor, Black Label and Big Daddy properties.

The lower cycle consists dominantly of peridotite with minor accumulations of olivine adcumulate and chromite. The second cycle shows more differentiation with appreciable enrichment of chromite. The third cycle has a basal zone of significant chromite enrichment. This unit is host to all of the major chromite deposit found in the area including Black Thor, Black Creek, Big Daddy, Black Horse and Blackbird. Overlaying the chromite-rich portions of the complex is a pyroxenite unit that drilling indicates has eroded away portions of the upper chromite horizon (i.e. hole FW-09-26). The pyroxenite

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits horizon is overlain by olivine adcumulates, peridotite and gabbro. The ultramafic complex host to the chromite mineralisation is up to 500 metres thick and has been traced for over 15 kilometres along strike.

7.2.3. Felsic Intrusive Rocks Felsic intrusive rocks, intersected in drilling just to the north-west of the Black Thor, Black Label, and Big Daddy chromite deposits, are comprised mostly of granite and quartz-diorite. The granite is grey-white, coarse-grained, hypidiomorphic and granular, consisting of quartz, feldspar, and biotite crystals. The granite is typically gradational into a quartz-diorite. The contact with the ultramafic and volcanic rocks is sharp and irregular.

7.2.4. Faulting Drilling has intersected faults identified by slickensides, mylonitization, and intense brecciation of the host lithologies. Magnetic and gravity surveys indicate that there are major fault displacements to the northeast and southwest.

7.3 Mineralisation To date the primary type of mineralisation found on the subject properties is chromite. Other types of mineralisation found on the properties include sulphide mineralisation and platinum group element (PGE) mineralisation. The chromite mineralisation is potentially economic and to date 6 major deposits have been found with 5 from the same stratigraphic position: Black Thor, Black Creek, Big Daddy, Black Horse and Blackbird.

Mineralization Cr2O3 Number of analysis Average Cr2O3 Disseminated chromite 1 - 10 % 2721 3.20 Heavily disseminated chromite 10 - 20 % 770 14.55 Banded intermittent chromitite 20 - 30 % 528 24.99 Semi-massive chromitite 30 - 40 % 597 35.36 Massive chromitite 40 - 51 % 472 43.07

Table 7.1 – An example of Chromite grades for from the Big Daddy deposit

7.3.1 Chromite Mineralisation Various types of chromite mineralisation have been observed. Table 7.1 summarises the grades for the various types of chromite mineralisation present as found at the Big Daddy deposit but characteristic of all of the other know deposits.

Table 7.2 (from Scoates, 2009) gives the average compositions of selected chromite crystals from the Black Thor and Black Label deposits based on Electron Microprobe Analysis and compares these to chromite crystals from the Kemi deposit in Finland.

Chromite grain size at both Black Thor and Black Label is generally fine to very-fine-grained, with typical chromite grain sizes on the order of 160-220 µm. Massive chromitite are typically slightly larger being

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits typically in the range of 200-220 µm and when disseminated grains are in the range of 160-190 µm. Grain size within the cataclastic mineralization type is much finer than the ranges listed above. A B

C D

E F

Figure 7.5 - Major Chromite Mineralization Types found at Black Label and Black Thor

There is no measurable chemical variation in chromite grains along strike or down dip within Black Thor

(Karakus, 2010). The average composition of unaltered chromite grains is 52.5% Cr2O3. Mineralization textures identified, shown in Figure 7.5, include:

• Chromite grains free of inclusions, veinlets and surface alteration (Figure 7.5a).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

• Coarse and dense chromite grains with a slight surface alteration (Figure 7.5b).

• Dense/massive chromite with intense fractures or brecciation (cataclastic type) (Figure 7.5c). This mineralization type is largely restricted to Black Thor.

• Altered chromite (Figure 7.5d), commonly associated with disseminated mineralization. Surface alteration is due to leaching of Mg and Al forming Ferri-chromite rims, or in extreme cases magnetite rims. These chromite grains are more magnetic than others and generally contain a lower chrome content.

• Chromite grains with spherical silicate inclusions (Figure 7.5e).

Weathering effects include some deterioration of chromite to Cr-rich chlorite and chamosite adjacent to altered chlorite veinlets in the near-surface environment (Fig. 7.5f).

Interstitial gangue phases are ubiquitous and unless very fine grinding is done it is expected some amount of silicate gangue will accompany any chromite concentrate as either interstitial material within massive (lump) ore, or cumulus silicate grains within disseminated ore.

7.3.1.1. Black Thor Chromite Zone The Black Thor Chromite Zone has been traced over a strike length of 2.6 km. It strikes SW – NE and has an overturned sub-vertical dip towards the NW ranging between 70 and 85 degrees. The zone typically contains two chromitite layers (upper and lower) that can range in thickness from 10’s of meters to over 100 m (i.e. BT-09-37). The layers are separated by a band of disseminated chromite in peridotite/dunite.

Host lithologies consist of serpentinized peridotite, serpentinized dunite, dunite, and peridotite.

Chromite is present as intermittent chromite beds, finely to heavily disseminated chromite in dunite/peridotite, and semi-massive to massive chromitite. Because of its lateral continuity and uniformity the chromite mineralisation was likely deposited in a quiescent magmatic environment. The Black Thor Chromite Zone is typical of most large layered igneous intrusions such as the Kemi deposit in Finland.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Sample 26-173.4 24-247.7 23-315.7 #9 #10 Number BLCZ BTCZ BTCZ Kemi† Kemi† MgO 9.63 8.9 10.08 10.54 9.67

Al2O3 16.77 15.09 15.59 15.43 14.51

SiO2 0.02 0.02 0.04 <0.05 <0.05 CaO 0.01 0.01 0.01 B.D. B.D.

TiO2 0.68 0.43 0.32 0.4 0.41

V2O5 0.2 0.15 0.16 0.11 0.15

Cr2O3 45.64 49.16 50.91 49.03 48.63 MnO 0.18 0.17 0.14 0.3 0.32 FeO** 26.26 25.49 22.02 22.66‡ 24.18‡ NiO 0.01 0.06 0.06 0.11 0.1 Total 99.4 99.48 99.33 98.58 97.97 *Black Label and Black Thor microprobe results from Scoates (2009) **Total Fe as FeO †From Table 2 (Alapieti et al. 1989) ‡Fe O recalculated to FeO and added to the analyzed FeO 2 3

Table 7.2 - Average EMPA chromite crystal compositions from the Black Label, Black Thor, and Kemi deposits.

7.3.1.2. Black Label Chromite Zone The Black Label Chromite Zone has been traced over a strike length of 2.2 km. It is locally cross-cut and interrupted by a pyroxenitic body.

Chromite is generally present as fine to heavily disseminated crystals in peridotite, chromitite bearing magmatic breccias, semi-massive bands and as massive chromitite. Silicate fragments, in the form of rip up clasts and as ovoid blebs have been observed in the zone and indicate the chromite was emplaced in a highly dynamic magmatic environment.

Fine-grained disseminated sulphides are locally associated with the chromitite.

7.3.1.3. Big Daddy Chromite Zone The Big Daddy chromite deposit is the south-west extension of the Black Thor and Black Creek deposits and was the first chromite deposit discovered in the area. The chromite is stratiform and is hosted by a large ultramafic to mafic layered intrusion. Various types of chromite mineralisation have been observed including disseminated chromite (1 to 20% chromite), semi-massive chromite and massive chromite (chromitite). The main chromitite layer is up to 60 metres thick and has been traced on the Big Daddy property over 1.4 kilometres along strike. The chromite is present as small grains typically 100 to 200 µm and hosted typically by peridotite and, in the higher grade portions, by dunite. The grains are present as euhedral chromite, intensely fractured chromite grains, chromite grains with internal gangue veinlets and chromite grains with spherical gangue inclusions (SGS Minerals Services, 2009).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

7.3.2 Sulphide Mineralisation Sulphides are found within dunite, peridotite, pyroxenite, olivine-bearing orthopyroxenite, gabbronorite, and norite. Present too is a magmatic breccia with sub-angular to sub-rounded ultramafic clasts (1 to 10 cm wide) in a peridotite groundmass with sulphides occurring as disseminated grains and blebs, interstitial sulphide, and secondary stringers and veins (< 3 cm thick). The sulphides are composed primarily of, in decreasing abundance, pyrrhotite, chalcopyrite, pyrite, and minor pentlandite.

7.3.3 Platinum Group Element Mineralisation Assays have shown that platinum group element (PGE) mineralisation is associated with sulphide mineralisation and the chromite bearing zones. In general the highest PGE grades correlate with elevated base metals (Cu + Ni), which are bound in sulphide minerals. With regards to the chromite bearing zones, the Black Label chromite zone has a slightly higher PGE content than the Black Thor due to the higher sulphide content. The average PGE content for both the Black Thor and the Black Label zones are shown in Table 7.3.

Mineralized zone Avg. Pt Max Min Avg. Pd Max Min Pt/Pd Black Thor (n = 944) 185 462 5 171 1020 5 1.08 Black Label (n = 122) 155 664 49 287 1320 54 0.54 *averages were calculated from chromitite bearing samples that have a Cr2O3 content > 30%. Table 7.3 - Averaged* Pt and Pd values (ppb) for the Black Thor and Black Label zones.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

8. Deposit Types Various economic mineral deposit types are known to exist in the James Bay Lowlands of Northern Ontario. These include: magmatic Ni-Cu-PGE, magmatic chromite mineralisation, volcanogenic massive sulphide mineralisation and diamonds hosted by kimberlite.

The ultramafic/mafic rocks found on the property have been explored primarily for magmatic chromite mineralisation. Chromite mineralisation occurs as stratiform bands within a large layered intrusion and shows major similarities with the Kemi intrusion of Finland.

At Kemi, chromite is hosted by a layered intrusion composed of peridotite and pyroxenite cumulates with chromite layers. The intrusion is interpreted to be funnel-shaped with the cumulate sequence thickest at the centre. There is a continuous chromite layer that has been traced 15 kilometres along strike and varies in thickness from a few millimetres to as much as 90 metres in the central portion of the intrusion. Using a cut-off of 20% there were 40 million tonnes of open pit reserves grading 26.6%

Cr2O3 with a Cr/Fe ration of 1.53 (Alapieti, et al., 1989).

The Kemi deposit has many similarities to the style of mineralisation on the McFaulds Lake property. It can therefore be used as an analogue when trying to establish a reasonable baseline with which to demonstrate that the Black Thor, Black Label and Big Daddy deposits are potentially economic.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

9. Exploration 2003 – A regional airborne EM and magnetic survey was flown over the McFaulds Lake area by Fugro for Spider/KWG (Murahwi, 2009). 2004 – Ground HLEM, VLF and magnetic surveys were completed over select areas. One 190 metre diamond drill hole was drilled (Murahwi, 2009). Freewest contracted Fugro Geophysics to complete a helicopter-borne airborne geophysical survey in the McFaulds Lake vicinity. 2006 – Three diamond drill holes totalling drilling 804.5 metres were drilled including hole FW- 06-03 which intersected the Big Daddy chromite mineralisation (Murahwi, 2009). 2007 - Freewest had Aeroquest International Limited fly a helicopter-borne Time Domain Electromagnetic System, (AeroTEM II) over what is now the Black Thor Property. 2008 – 19 diamond drill holes totalling 6,112.7 metres were drilled to further test the Big Daddy chromite zone. Freewest had a VTEM survey flown over the McFaulds property, by Geotech Ltd. and drilled 13 diamond drill holes totalling 4,808 metres with the first hole of the program, BT- 08-01, intersecting the Black Thor chromite deposit. 2009-2013 – Ground gravity and magnetic surveys were completed over the chromite deposits and pulse EM surveys were done on the Black Thor property. In 2010 Cliffs took over operatorship of the Black Thor project, and in April 2011, Cliffs assumed the role of operator of the Big Daddy project. A total of 88 diamond drill holes totalling 26,280.53 metres were drilled on the Big Daddy project and 235 diamond drill holes totalling 76,838.95 metres were drilled on the Black Thor project.

A summary of the diamond drilling that has taken place on the two projects is presented in Table 9.1. Surface drilling plan maps for the two projects are shown in Figures 9.1 and 9.2 and sample cross sections in Figures 9.3 and 9.4.

Black Thor Big Daddy Year Metres Num. Holes Year Metres Num. Holes 2008 4,808.00 13 2006 804.50 3 2009 33,138.25 96 2008 6,112.70 19 2010 16,453.70 71 2009 6,878.00 23 2011 11,084.00 32 2010 2,242.00 10 2012 14,381.00 29 2011 11,025.53 35 2013 1,782.00 7 2012 6,135.00 20 Total 81,646.95 248 33,197.73 110

Table 9.1 – Summary of all diamond drilling done on the Black Thor and Big Daddy projects.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 9.1 – Plan view of drilling for the Black Thor project. Grid north is 315° Astronomic.

Figure 9.2 – Plan view for the Big Daddy project. Grid north is 330° Astronomic.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 9.3 - Sample cross section (2000E – looking west) for the Black Thor and Black Label Deposits. The orange and blue lines are a slice through the mineral envelopes used to select samples.

Figure 9.4 - Sample cross section (1800E – looking west) for the Big Daddy Deposit. The green line is a slice through the mineral envelope used to select samples.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

10. Drilling Noront has yet to do any drilling on the property that is the subject of this report.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

11. Sample Preparation, Analyses and Security For the Black Thor and Black Label deposits samples were bagged into batches that consisted of 35 samples. Every batch also included 3 certified reference material standards (OREAS 73A, OREAS 74A, PGMS-8, and SARM 8), 1 field blank composed of barren drill core, and a field duplicate.

One coarse reject and one pulp duplicate also formed part of the Quality Control program, which was split at the laboratory.

All samples were submitted to Activation Labs (Actlabs) of Ancaster, Ontario for analysis. The samples were analyzed for multi-elements using a 4-acid digestion followed by inductively-coupled-plasma (ICP) analysis. Gold, platinum and palladium were assayed by the Fire Assay method on 30 grams of prepared sample. For higher grade chromium analyses (greater than 1%), the samples were originally analyzed by the Instrumental Neutron Activation Analyses (INAA) method wherein they were irradiated in a nuclear reactor prior to final reading. This method yields analyses in percent for elemental chromium, Cr2O3 and elemental iron. Since 2009 the X-ray Fluorescence method using pressed pellets has been used for

Cr2O3 and whole rock analyses. Additional information on the analytical techniques employed can be accessed on the Actlabs website at www.actlabsint.com.

With regards to the chain of custody and security, all samples were handled by Freewest Resources Canada Inc. staff. Samples bags and tarp batch bags were sealed with zip ties. All tarp bags were clearly labelled with the laboratory and the Freewest Thunder Bay exploration office addresses. Samples were flown from the McFaulds exploration camp to Thunder Bay via chartered courier. Once in Thunder Bay, Freewest staff picked up and personally deliver all samples to Actlabs in Thunder Bay. Since acquisition of the project by Cliffs they maintained the same procedures for the Black Thor project.

Gowans et al (2010a) describe the sample preparation, analytical methods and security used for the first 48 holes drilled to test the Big Daddy chromite deposit:

“All on-site at McFaulds Lake sample handling and preparation were carried out by Billiken Management Services under the supervision of Qualified Persons (Lahti and Chance). At no time were employees, officers, directors or agents of Spider, KWG or Freewest involved in the sample selection, preparation and shipping process beyond exercising oversight to ensure that established protocols were being observed.”

All Cr2O3 analyses were carried out by Activation Laboratories Ltd. (Actlabs). Actlabs has been certified (accredited laboratory number 266) by the Standards Council of Canada as a mineral analysis laboratory (Gowans et. al., 2010a). Sample preparation consisted of crushing to minus 10 mesh (1.7 mm), using a riffle splitter to obtain a representative sample (about 500 grams) and then pulverising to at least 95% minus 150 mesh (105 microns) (Gowans et. al., 2010a). Between 2006 and 2008 samples were analyses using ICP following a four acid digestion. Samples with >1% Cr were re-analysed using Instrumental Neutron Activation Analysis (INAA) (Gowans et. al., 2010a).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Beginning in 2009 XRF analysis of fused borate disks was adopted for all Cr analyses as well as other major oxides. Cross check analyses showed that INAA and Fusion –XRF yield the same

result for Cr2O3 (Gowans et. al., 2010a). For security “a chain of custody” was maintained between the core shack and the assay lab. ActLabs would verify that seals were intact and would check all samples against packing slips before entering into their information management system. Independent monitoring was done by T. Armstrong (Gowans et. al., 2010a).

Subsequent work conducted at Big Daddy by KWG Resources and Cliffs Natural Resources utilised the same protocols and lab (Activation Labs). Activation Labs is accredited with the Standards Council of Canada, Health Canada, as well as the National Environmental Accreditation Conference. Activation Labs is independent of KWG.

Cliffs, as the most recent project operator at Big Daddy, has maintained the same security protocols as used by the previous operator, Spider Resources and as described in Gowans et. al. (2010a).

The author is satisfied that proper sample preparation, analyses and security protocols, which meet CIM best practices guide lines, have been and still are in place.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

11.1. QA/QC Procedure For the Black Thor project Freewest implemented a robust quality control and quality assurance (QA/QC) program beginning with the very early stages of the 2008 McFaulds drilling program. The QA/QC program was externally managed by T.J. Armstrong Geological Consulting Inc.

All sample batch inventories were sent via email to T.J. Armstrong Geological Consulting Inc. for validation with the laboratory. All of the samples obtained from the Freewest McFaulds Lake property were sent to Activation Laboratories (Actlabs) in Thunder Bay. Certified reference materials were inserted in every sample batch (standards), as were field blanks, and field duplicates. A typical batch would include 3 standards, a blank sample, a ¼ core sample duplicate, and instructions to the lab to perform fine-crush and pulverized sample duplicates.

The following reference materials have thus far been used in the QA/QC procedure.

The certified standards OREAS 73A and OREAS 74A were purchased from Analytical Solutions Ltd. of Toronto, ON. The material was supplied by Ore Research & Exploration Pty of Australia. The material comprises blended ore from the Cosmos Nickel Mine of Western Australia along with barren ultramafic material. The standard OREAS 73A is certified for Au, Pd, Pt, Cu, and Ni along with 33 other data points (Armstrong 2009). The standard OREAS 74A is certified for Au, Pd, Pt, Cu, and Ni along with 42 other data points (Armstrong 2009).

The reference material PGMS-8 was purchased from, and produced by CDN Resource Labs in Delta, British Columbia. The material originates from the Stillwater Complex of Montana, USA. It is certified for Au, Pd, and Pt and contains 38 data points.

Reference material SARM 8 is distributed by the South African Bureau of Standards (SABS) and is prepared by the Council for Mineral Technology (MINTEK). The material originates from the Basal Zone of the Bushveld Complex and is a spiral concentrate supplied from the Grass Valley Chrome Mine, Potgietersrus, Transvaal, South Africa.

Beginning mid-February 2009, an additional quality control was implemented whereby three samples per batch were sent to Becquerel Labs of Mississauga, ON for cross-check analysis.

Since acquiring the project in late 2009, Cliffs maintained the same protocols and used the services of the same external reviewer, T.J. Armstrong Geological Consulting Inc.

For the Big Daddy project the QA/QC program implemented for the first 48 holes, and subsequently implemented by KWG and Cliffs for all subsequent drilling, is described by Gowans et al (2010a):

“In March, 2009, Spider retained Tracy Armstrong, P. Geo., to institute a comprehensive QA/QC program which was achieved in two parts. First, samples were assigned to specific positions in batches of 35, leaving space for the laboratory to insert internal controls. Company control samples comprised two or three certified standards, a project “blank”, split, coarse reject and pulp duplicates. There were typically six QA/QC samples in each batch of 35.”

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The ActLabs in-house analytical QA/QC procedures include the following: Use of certified reference materials. Routine duplicate analyses. Use of blanks. Participation in round robin analytical exercises.

Subsequent work conducted by KWG Resources and Cliffs Natural Resources have utilised the same QA/QC procedures.

The author is satisfied that proper QA.QC protocols and methods that meet CIM best practice guidelines have been in place and are still being used.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

12. Data Verification For the Black Thor project, assay results were verified internally by Freewest staff and externally by T.J. Armstrong Geological Consulting Inc., and by P&E Mining Consultants Inc. Once the project was acquired by Cliffs they continued with the same verification procedures.

Staff reconciled assay results with sample ID #s.

T.J. Armstrong Geological Consulting Inc. verified the precision and accuracy of the laboratory results, i.e., statistical analyses of standards, blanks, and duplicate results done in order to ensure the laboratory results did not deviate from their norm and that no contaminated results were ever incorporated into the database.

P&E Mining Consultants Inc. performed an additional database verification in order to weed out typos, highlight gaps in sampling, and reconcile assay results with sample logs.

In the case of the Big Daddy project assay results were verified internally by Billiken staff, for the first 48 holes and by Cliffs Natural Resources staff for all subsequent holes.

A review of the data included looking for errors in the database provided and completing an Exploratory Data Analysis looking for irregularities. No issues were found. The author is satisfied with the verification procedures done by other independent reviewers such that no additional verification procedures were required and that the data is considered valid, representative and suitable to be used for resource estimation.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13. Mineral Processing and Metallurgical Testing

13.1. Black Thor Test work that was completed included physical beneficiation tests. Details, summarised below are present in a Prefeasibilty Study done by SNC-Lavalin (2012).

13.1.1 Grindability Characteristics

13.1.1.1. Bond Ball and Rod Mill Work Index The Bond Ball and Rod Mill Index is a measure of the resistance of the material to crushing and grinding. Two high grade samples were subjected to testing by SGS Lakefield. Results indicate that the material is competent and in the medium hardness range.

Additional samples were selected being representative of the four domains known to exist that contain massive chromite and low, moderate and high grade disseminated chromite. With few exceptions the samples were characterised as soft and as hard to very hard. In all cases the test work indicates a resistance to fine breakage (SNC-Lavalin, 2012).

13.1.1.2. Bond Abrasion Index The Bond Abrasion Index is used to determine what steel media to use and associated liner wear in crushers, rod mills, and ball mills. This test work was done by SGS and utilised competent high-grade massive chromite and competent heavily disseminated chromite material from each of the four domains. The indices generally fell in the mildly abrasive range (SNC-Lavalin, 2012).

13.1.1.3. Crusher Work Index Sizing a crusher can be reliable calculated thanks to the Crusher Work Index based on the testwork research done by Fred Chester Bond (1952). According to Bond’s Third Theory of Comminution, the work/energy input is proportional to the new crack tip length created during particle breakage and equivalent to the work represented by the product – the feed.

Samples included heavily disseminated chromite, intermittent chromite, semi-massive chromite and massive chromite as well as samples from the hanging wall and footwall. The testing was done by FL Smidth, in Bethlehem Pennsylvania. The Crusher Index Values range from 3.37 to 8.78 and are all low, indicating low crusher power requirements (SNC-Lavalin, 2012).

13.1.2 Tumbling Tests Nine samples were selected from drill core and used to estimate the potential of concentrate degradation, both in the process plant equipment and when being transported. The testing was done by Cliff’s Technology Group. The results showed little tendency to crumble or to display and friable characteristics (SNC-Lavalin, 2012).

13.1.3 Variability Test Work Mintek, an independent mineral processing and metallurgical engineering firm based in South Africa, completed a series of tests. The initial testing was on one sample of drill core of massive chromite with a

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

head grade of 42.8% Cr2O3, 7.1% SiO2 and with a Cr/Fe ratio of 1.97 with the test work involving coarse processing to produce lump and chip and fines processing on spirals and tables to produce a fines concentrate (SNC-Lavalin, 2012).

Additional samples were then provided for follow-up processing tests to characterise the chromite material with Heavy Liquid Analysis and fines recovery, to develop correlations between feed grade, product yield and chromite recovery and to develop a conceptual flow sheet.

13.1.3.1. Feed Preparation The bulk sample were crushed through 12 mm and screened at 1mm. Screen fractions under (-1mm) were further screened at 75 microns. Appropriate samples were taken from each stream for chemical and size analysis. Chemical analysis was carried out via ICP (Inductively Coupled Plasma Spectrometry) method, which determined the grades of the following elements: Cr, Mg, Al, Si, Ca, Cr, Mn, Fe, Co, Ni, and Cu.

While there were some variances between individual samples, essentially a very similar weight and

Cr2O3 distribution resulted for all bin samples (SNC-Lavalin, 2012).

13.1.3.2. Coarse Processing The -12+1mm (chip) fraction was subjected to sequential Heavy Liquid Separation to both develop washability curves and to simulate the performance of a Dense Medium Separation plant. For the washability curves, separations were carried out at densities ranging from 2.8 to 3.8 g/cm3 at intervals of 0.2 g/cm3. Based on the preliminary results, it was decided to conduct all future HLS tests at a fixed density of 3.4 g/cm3 as the results indicated that the target grade of 43% Cr2O3 would be achieved. This fixed resulted in a highly variable coarse product grade ranging from 33% Cr2O3 to 50% Cr2O3.

The target sinks grade of 43% was not achieved from samples with head grades around 10% Cr2O3. For samples with head grades between 20% and 40% Cr2O3 head grade, the average sinks grade did achieve the target of 42% Cr2O3, but with an equal number of samples being above and below target but with

95% of samples exceeding 38% Cr2O3. Samples exceeding 40% head grade achieved target on all occasions.

Cr:Fe ratio in the sinks increased with increasing head grade, from approx 1.3:1 for ‘bin 1’ samples to 2.2:1 for ‘bin 7’ samples. Silica, conversely, decreased marginally, but variance was considerable: average Cr:Si ratio in the sinks for all bin samples excluding ‘bin 7’ averaged 5:1.

Consistent sinks grades of 42% are more likely to be achieved at a higher cut density – say 3.6 g/cm3, but will result in lower recovery. Limited particle size distributions analysis was carried out (SNC-Lavalin, 2012).

13.1.3.3. Fines Processing Fines (-1mm fraction) were treated in the same manner, to simulate the amenability for treatment in a spiral plant. After screening at 75 µm, 5kg sub-samples of the -1mm +75 µm fraction were treated on a standard Wilfley laboratory shaking table from which performance at the target grade of 42% Cr2O3 was determined. The target grade was set to 42%. A preliminary analysis of the natural fines data indicates

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits that the recovery loss on the tables between a 42% concentrate grade and a 43% concentrate grade is less than 1%.

For Natural Fines there is a clear pattern in that increasing head grade increases mass pull and recovery to a fixed concentrate grade. Except for ‘bin 1’ samples, recoveries exceed 80% with a mass pull from 50% and up.

Tailings grade remained fairly constant, at 10.5% Cr2O3, suggesting this is the ‘unrecoverable’ material – at least at a concentrate grade of 42% Cr2O3. Lowering concentrate grade to 40% Cr2O3 would result in tailing grade decreasing to about 8.5% Cr2O3 with a subsequent (stage) recovery increase (SNC-Lavalin, 2012).

13.1.3.4. Magnetic Separation Sequential low intensity magnetic separation and high intensity magnetic separation test work was carried out on gravity plant tailings, ground to 100% passing 75µm on all Batch 1 samples. Except in the case of the 40% bin samples, target concentrate grade of 42% Cr2O3 could not be achieved, or even approached. Additional circuit recovery achieved on the 40% bin samples was between 3-4%.

The increased capital and operating costs of a magnetic separation plant are not warranted, especially as the plant would only successfully treat the highest grade gravity plant tailings (SNC-Lavalin, 2012).

13.1.3.5. Thickening Test Work Thickening test work was conducted on Batch 3 shaking table tailings and natural slimes, in appropriate ratios for thickening tests. The testing included polymer screening tests, flocculant dosage test work and optimum feedwell density test work through a pilot high rate thickener to determine actual underflow density achievable.

The material tested gave good settling characteristics with improved settling at lower feed densities (SNC-Lavalin, 2012).

13.1.3.6. Filtration Test Work Filtration test work was conducted on shaking table concentrate. The test work was conducted to support the selection of a belt filter technology, with no washing stage. This test work has indicated that belt filter moistures in the range of 5% are achievable, and this will have to be confirmed by vendor test work during the feasibility (SNC-Lavalin, 2012).

13.1.3.7. Conclusions Overall grade recovery curves for Lump, Chip, Fines and Total concentrates were generated for the Pre- feasibility Study. Process plant Cr2O3 recoveries for the range of feed head grades expected as feed to the process plant are shown in Table 13.1 It can be seen that at a target grade of 30% Cr2O3, the estimated overall Cr2O3 recovery is 80% (SNC-Lavalin, 2012).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Head Grade Cr2O3 % 25 30 35 40 Lump 29.0 34.3 38.9 42.5 Chip 20.4 24.1 27.3 29.9 Fines 21.2 21.3 20.5 18.6 Total Conc. 70.6 79.8 86.6 91.0

Table 13.1 - Cr2O3 Recoveries for Mass Balance Head Grades based on Heavy Liquid Separation testing.

13.1.4 Mintek Small Scale Smelting Tests General smelting tests were completed to compare the relative smelting behaviour of the chromite concentrate samples against a standard South African chromite (small scale Pot Tests). This test work was done by Mintek, an independent mineral processing and metallurgical engineering firm based in South Africa. The DC Pilot Furnace Smelting Tests were designed to obtain representative quantitative values for the mass and energy balances for the next phase of the design process.

Chromite was heated and reduced at 1,600°C in small alumina crucibles in the presence of varying amounts of carbon and fluxing agents. The tests were repeated with a representative South African chromite ore to allow a comparison between Black Thor chromite and chromite material with a known behaviour in reduction smelting. All the tests were conducted in a simple muffle furnace arrangement.

13.1.4.1. Part 1

13.1.4.1.1. Scope Qualitative observations of the smelting behaviour of the Black Thor Chromite samples from different deposit locations were made and compared against well known FeCr smelting concentrates.

Since the batch smelting in the small scale pots is not representative of steady state furnace operations (temperature, turbulence, slag or metal tapping), it is not possible to infer an absolute value for Cr recovery, %C and %Si in the alloy, nor the carbon or fluxing requirements. The results are useful to draw comparison against South African chromites and validate the use of key process values from South African ferrochrome operations.

13.1.4.1.2. Findings For all of the samples chosen across the range of the Black Thor deposit, the concentrate behaves very similarly to South African chromites, in the same pot test conditions. In particular, the following similarities and conclusions are noted from the tests:

• It is possible to achieve a very good interface separation between the slag and metal phases at 1,600°C, for the specific slag fluxing conditions used in the test program. The metal liquidus appears to be close to 1,600°C.

• The Black Thor chromite contains lower relative Fe content, due to cation solid substitution in the chromite, so the sum of Cr+Fe is generally lower than SA chromites. This results in a lower relative metal yield in Black Thor chromite smelting, but a higher relative Cr concentration in the

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

metal. It is not clear how this translates into total Cr recovery in the furnace, as the pot test conditions, namely higher slag volume, slag turbulence and slag composition is not representative of furnace conditions. However, the pot tests had no problem reducing over 95% of the total Cr in the pot to the metal phase.

• The net energy requirement is consistent with design expectations of 3.5MWh/t, up to 4.8 MWh/t High Carbon Ferrochrome, when no-preheating or pre-reduction is achieved, and is typical for a High Carbon Ferrochrome production value.

• Cr in alloy ranged from 50% to 60% Cr, which is consistent with the market definition for a High Carbon Ferrochrome, as per the ASTM Standard Specification for Ferrochromium (ASTM A101).

In comparison to South African chromites, the presence of chlorite mineral in the concentrate leads to the formation of hydroxides that are evolved in the range 450°C to 600°C. In the absence of a high temperature preheating step, the hydroxides will report to the furnace off-gas as water vapour and lead to an increase in the %C requirement in furnace, higher furnace off-gas volumes to handle, higher sensible heat losses and higher power requirements.

During the initial pot tests, a slag foaming incident occurred. A second round of pot tests was completed to investigate the foaming incident and ensure it was not endemic to the Black Thor chromite (SNC- Lavalin, 2012).

13.1.4.2. Part 2

13.1.4.2.1. Scope Additional pot test work was done to investigate the foaming mechanism, as well as decrepitation and reactivity tests. A select number of smelting tests, similar to the previous set of pot tests, were run at a higher temperature of 1,700°C to confirm slag liquid formation with less flux addition.

13.1.4.2.2. Findings Foaming of a few pot test samples was attributed to the selection of a low reactivity petroleum coke as the reductant in the lab scale work. Such a reductant is not typically used on large scale chromite reduction because of its low gaseous reactivity, high cost and very small particle size. It was used in the testing because of its high carbon content (99%C) and low contribution of ash to the slag.

An investigation of the mechanism for the foaming found that the chromite metallic product fused together at the typical metal melting temperatures, while there were still significant amounts of unreacted carbon. The fused metal product made the bed impermeable to the reaction product gases, which were forced to escape through the slag. The presence of solid carbon in the newly formed liquid slag surrounding the carbon increased slag viscosity. High slag viscosity lead to slag foaming.

Loss on ignition (LOI) removal was measured using thermogravimetric techniques in an oxidising and reducing environment. LOI removal starts at 600°C and is complete at 900°C. Depending on the amount of silicate gangue minerals present, there is between 1.5% and 3.5% LOI present in the Black Thor chromites. For comparison, the South African chromites have no LOI.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The disintegration tests measured the effect of rapidly heating the Black Thor chromite to 900°C on the resulting particle size distribution change. Up to 16% increase in -2.6mm fines were generated.

The reactivity tests involved taking a pulverised carbon and chromite pressed pellet and rapidly heating to 1250°C and measuring the mass loss. The results were compared against other chromites from around the world with similar Cr:Fe ratio. The Black Thor Chromites have very similar reduction rates to the SA chromites. The Kazak chromite by contrast, showed a very low reaction rate due to a high Mg content.

The additional pot tests showed that a molten slag was possible and good metal and slag separation was possible with less fluxing agent addition, at 1,700°C (SNC-Lavalin, 2012).

13.1.5 Mintek DC Furnace Pilot Furnace Smelting Test

13.1.5.1. Scope The two main objectives of the DC smelting campaign were to:

Confirm at a larger scale the smelting behaviour of the Black Thor chromite demonstrated in the pot tests. Generate steady state operating data for the smelting of the Black Thro chromites.

The parameters to be finalized by the test campaign included chromium recovery to the metal phase, as well as the dust carryover, dust PSD and dust composition associated with the operation of the furnace. Two different slag regimes were tested (an acid and a basic slag regime) in the DC furnace to help optimise the design basis for the furnace.

13.1.5.2. Findings The DC furnace test campaign successfully demonstrated the smelting of the Black Thor chromite and satisfied all of the objectives of the test program.

The tests smelted chromite containing 44% Cr2O3 with a Cr:Fe ratio of 2.1 to produce a 60.7 - 61.6% Hign Carbon Ferrochrome. The Cr recovery to metal was 89.5% overall for the full campaign. The net energy requirement (Specific Energy Consumption) was between 3.93 to 4.53 MWh/t metal.

The metal composition reported is consistent with the requirements of the ASTM standard for a high carbon ferrochrome (SNC-Lavalin, 2012).

13.1.6 Rotary Kiln Test

13.1.6.1. Scope The rotary kiln test work was divided into two distinct steps due to the nature of the experimental and analytical work in each phase and the capabilities of the facilities available for this type of work. The first phase of the rotary kiln work was performed at Kingston Process Metallurgy (KPM) laboratory in Ontario, Canada. The second phase was performed at FL Smidth in Pennsylvania, USA.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13.1.6.2. Phase 1 Lab scale test work objectives included:

• Determine maximum temperature that avoids sintering

• Determine maximum extent of reduction of iron and chromium without excessive sintering of charge.

A maximum bed temperature of 1,250°C was concluded as sufficient to avoid sintering. The test work concluded that the pre-reduction of Black Thor chromite at 1,250°C will result in complete LOI removal and calcination. Total metallization (Cr and Fe) of 6.5% was measured with no sintering.

The lab scale test work also identified that:

• Sintering starts at approximately 1250°C with very light sintering of the sample and becomes more pronounced at 1300°C. After two hours at 1300°C, the sintered product is still easily separated from the crucible and the sample is still powdery. It is expected that in a moving bed in a kiln, the fluidity and porosity of the bed will be maintained at 1300°C.

• Silica encourages the formation of the sinter by forming a fayalite low temperature molten phase that sinters at 1300°C.

• The reduction occurs by typical chromite shrinking core mechanism. Smaller particle size is necessary for higher metallization.

• Very low metallization is achieved, even at 1300°C. Values were around 6% metallization.

• The average metal phase may have contained up to 20% Cr only.

13.1.6.3. Phase 2 Following the successful lab scale work done in Phase 1, pilot scale tests were performed. The findings of the Phase 1 tests were used to finalize the Phase 2 test plan, including the operating temperatures and variations in the feed materials. The tests were performed in a 0.3 m ID x 4.6 m long gas fired rotary kiln, which has been used for several pilot tests that were scaled to successful commercial operations from the test results.

The objective was to confirm sintering temperature/behaviour and define the optimum pre-reduction conditions in a pilot scale rotary kiln.

The tests concluded that the kiln processing of Black Thor chromite can be performed at 1,300°C bed temperatures without significant sintering of fines. Raising the kiln bed temperature to 1,400°C resulted in ring formation. Confirming the findings of the Phase 1 tests, it was also concluded that silica promotes sintering. Metallization results showed total metallization to be less than 1.5% (SNC-Lavalin, 2012).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13.1.7 Shotting Test High carbon ferrochrome from the DC furnace tests was used to complete shotting tests. The main objectives of the test were to determine the requirements to be able to produce a representative shot product and the resulting characteristics of the shot for marketing purposes. The test work confirmed that the metal could be granulated in a shotting system without technical difficulty. Several operational parameters were established. Key outcomes of the test work were:

• Shotting had no effect on metal chemical composition

• Fines (-4.15 mm) was between 10% and 20%

• Low Si metal resulted in porous granules (bulk density 2.38 t/m3)

• High Si metal resulted in dense granules (bulk density 4.0 t/m3)

• Tumble tests showed degradation of approximately 5.6%

The results suggest that granulation of the molten metal can produce a satisfactory final product of between 1 mm and 25 mm (SNC-Lavalin, 2012).

13.2. Big Daddy To date there have been four mineral processing studies done: one by World Industrial Minerals (2008) one by SGS Minerals Services (2009) and two by Xstrata Process Support (Barnes, 2011a and 2011b).

Sample Grade, %Cr2O3 37.4

Floatation Cr2O3 % recovery 27.6 Product Grade, %Cr2O3 43.0

Gravity Cr2O3 % recovery 46.7 Product Grade, %Cr2O3 49.0

Overall Cr2O3 % recovery 74.4 Product Grade, %Cr2O3 46.6

Table 13.2 - Summary of World Industrial Minerals testing results.

13.2.1 World Industrial Minerals

13.2.1.1. Methods Used World Industrial Minerals used quarter splits of 8 samples from two holes (FW-08-05 and FW-08-07).

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

They wet crushed the samples to -70 mesh using a laboratory rod mill and then separated the material using a 140 mesh screen. Material that passed the 140 mesh screen was then passed through a flotation circuit. The over size (+140 mesh) was sent to a gravity circuit.

The floatation separation was done using two approaches:

Flotation of the waste minerals from the chromite using a cationic collector. Desliming and anionic-collector flotation of the chromite from the waste minerals.

The gravity separation process used a laboratory-scale shaking table.

13.2.1.1. Results

The bench testing successfully produced a product that exceeds the minimum 40% Cr2O3 grade threshold that the market prefers. The final concentrate has a Cr:Fe ratio of 2.07. Results of the study are summarised in Table 13.1.

13.2.2 SGS Mineral Services Testing

13.2.2.1. Methods Used SGS Mineral Services completed gravity separation tests on 133 core reject samples divided into 8 metallurgical samples and microprobe work to assess the quality of the chromite grains on 20 samples.

The composite samples used for the gravity test work are: MET2 (17 core samples from hole FW-08-06), MET3 (17 core samples from hole FW-08-23), MET4 (17 core samples from hole FW-08-15), MET5 (16 core samples from hole FW-08-18), MET6 (17samples from hole FW-08-13), MET7 (16 core samples from hole FW-08-22), MET8 (17 core samples from hole FW-08-14), and MET9 (16 core samples from hole FW-08-12). Each metallurgical sample was processed independently of the others.

Sample preparation consisted of the following:

Crushed to -860µm (20 mesh) Split into 3 size fractions: >300 µm, 300-75 µm, <75 µm The two coarser fractions were first processed using low-intensity magnetic separation to remove magnetic iron minerals and then passed over a Wilfey shaking table with the concentrate then processed using a Mozley mineral separator or a superpanner, depending on sample size. Tailing were then ground to -75 µm and then combined with the third fraction. The -75 µm fraction was also first processed using low-intensity magnetic separation to remove magnetic iron minerals and then passed over a Wilfey shaking table followed by the Mozley mineral separator or superpanner.

13.2.2.2. Results

The microprobe work shows that the Cr2O3 content of the chromite grains varies from 43.6% to 51.9% and that the Cr:Fe ratio varies from 1.0 to 1.9.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The results of the gravity separation work are summarised in Table 13.2 which shows grade and recoveries for different product grades. Where product grades could not be attained entries are blank. Entries are also blank where the feed grade was higher than the product grade.

The report made the following conclusions based on the results summarised by Tables 13.2 and 13.3:

Samples 2, 3 and 4 did not attain a high-grade concentrate. The low-grade samples had low recoveries of chromite. For the low grade samples (2, 3 and 4) the low-intensity magnetic separation recovered much of the chromite. For samples 5 through 9 the chromite recovery is proportional to the feed grade. Sample 7 has silicates (talc, chlorite, serpentine) locked with the chromite as coatings, webbing or as fracture filling.

Two samples (6 and 9) were further tested using Dense Media separation and Magnetic separation as two forms of pre-concentration. Neither method proved to be effective.

Feed Grade >45% Cr2O3 Grade >40% Cr2O3 Grade >30% Cr2O3

Assay, % Ratio Cr2O3, % Ratio Cr2O3, % Ratio Cr2O3, % Ratio 1 Sample Cr2O3 Cr:Fe Grade Recov. Cr:Fe Grade Recov. Cr:Fe Grade Recov. Cr:Fe 2 4.42 0.35 32.1 14.5 0.76 3 7.96 0.56 40.6 3.66 1.17 4 12.3 0.76 41.5 21.7 1.22 5 20.4 1.17 45.5 56.7 1.49 43.0 72.7 1.47 32.9 93.5 1.27 6 35.4 1.35 45.2 71.5 1.37 44.4 85.8 1.36 7 42.9 1.88 48.4 88.2 1.88 8 40.0 1.96 47.5 93.6 1.98 9 34.8 1.43 45.1 62.7 1.44 41.6 93.7 1.44

Table 13.3 - SGS Gravity separation recovery results summary.

Feed +75 μ Grav Conc -75 μ Grav Conc Low-Intensity Magn. High-Intensity Magnetics

Assay, % Ratio Cr2O3, % Ratio Cr2O3, % Ratio Cr2O3, % Cr2O3, % Ratio 2 Sample Cr2O3 Cr:Fe Grade Recov. Cr:Fe Grade Recov. Cr:Fe Grade Recov. Grade Recov. Cr:Fe 2 4.42 0.35 37 5.93 0.83 34.8 4.34 0.77 14 56.2 7.05 16.8 0.32 3 7.96 0.56 42.5 1.57 1.28 41.4 1.79 1.09 11.2 92.2 1.96 2.06 0.29 4 12.3 0.76 41.2 11.4 1.26 42.7 7.55 1.19 16.2 65.7 7.2 8.21 0.67 5 20.4 1.17 44.8 22.4 1.47 46.8 25.5 1.49 14.9 7.2 20.5 13.5 1.17 6 35.4 1.35 44.3 35.2 1.36 45.7 41.5 1.37 23 0.32 40.8 8.87 1.37 7 42.9 1.88 49 51.6 1.89 50.3 4.1 1.89 32.5 0.53 47.6 32 1.9 8 40 1.96 47.3 52.9 2.02 51.2 16.9 2.1 28.3 0.63 46.4 23.2 1.88 9 34.8 1.43 46.3 33.2 1.43 47.5 10.7 1.39 28.2 0.78 42 15 1.37

Table 13.4 - SGS Recoveries from the various treatment streams.

1 Cr:Fe is calculated from bulk chemistry and therefore is not indicative of the actual chromite Cr:Fe ratio. 2 Cr:Fe is calculated from bulk chemistry and therefore is not indicative of the actual chromite Cr:Fe ratio.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

13.2.3 Xstrata Process Support

13.2.3.1. Campaign One (2011)

13.2.3.1.1. Crushing and Screening

13.2.3.1.1.1 Methods Used Crushing tests were completed on 400 kg of core samples from the Big Daddy chromite deposit. The test involved a single pass jaw crushing with the jaws set at 1”. The crusher product was then screened at 1” and then a full screen analysis was performed on the median bucket to estimate fines generation (Barnes, 2011b).

13.2.3.1.1.2 Results The sample material was found to be extremely competent with no tendency to friability. Less than 10% of the crushed material was less than 10mm, well below 30% minus 10mm specified for marketable “lumpy” ore, and only 4% converted to minus 6mm fines. It is expected that there should be a high yield of direct shipping grade lumpy chromite ore.

13.2.3.1.2. Metallurgical Testing

13.2.3.1.1.3 Methods Used Using core samples provided by KWG Resources the core was crushed and screened, then spin-riffled to ensure representative samples. A chemical analysis was completed to characterize the sample, followed by thermal analysis, batch smelting tests and thermochemical modelling (Barnes, 2011a).

13.2.3.1.1.4 Results The results indicated that the material is highly reducible considering its high chromium content and, during smelting, produces a high grade alloy at high chromium recovery, providing essential operating parameters are satisfied.

Analysis of the smelting results indicates that a reductant requirement of at least 19.5% Carbon equivalent is required to ensure optimum chromium recovery. The smelting is somewhat less sensitive to the flux addition rate, but 9% CaO equivalent is considered the safe minimum. Smelting temperatures of 1625-1650°C appear optimum for best results.

It was concluded that the Big Daddy deposit can be expected to return chromium recoveries of 92-93% into a high carbon ferrochrome alloy grading around 58-60% Cr, with 6-8% C, 1% Si and the balance being iron.

Smelting power requirements, while subject to issues such as operating conditions, furnace configuration and size and selection of process technology, are relatively modest considering the grade of alloy produced. Based on the various models tested it is estimated power required will be about 3.5 - 3.8 MWh per ton of alloy produced.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

No issues of concern were uncovered either in modelling or during batch smelt testing. Thermal analysis resulted in excellent reducibility even considering the high Cr:Fe ratio in the chromite.

It was concluded that the high grade Bid Daddy chromite should provide an excellent feedstock for smelting to high carbon ferrochrome alloy grading 58-60% Cr.

Figure 13.1 - Cr grade of slag and alloy from the Big Daddy smelting test (Muinonen and Barnes, 2013).

13.2.3.2. Campaign 2 (2013)

13.2.3.2.1. Metallurgical Testing In July of 2013 a second continuous pilot smelting campaign was completed on chromite from Big Daddy using material left over from the previous campaign done in 2011. This material consisted of 3300 kilograms of chromitite, 20% anthracite reductant, 18% limestone and 9% silica flux that was then crushed and blended yielding 4400 kilograms of furnace feed. To this was added additional reductant and flux to provide a recipe of 100 units of chromite, 24 units of reductant, 20 units of limestone and 9 units of silica. This material was then fed into a previously heated stabilised pilot DC arc furnace at a rate of about 100 kilograms per hour (Muinonen and Barnes, 2013).

13.2.3.2.2. Results All of the Big Daddy material was smelted producing 1611 kilograms of alloy and 1809 kilograms of slag. The Cr levels in the alloy and slag are shown in Figure 13.1 along with the associated % recovery of chromium metal (Muinonen and Barnes, 2013).

The results of the smelting test confirmed very high chromium recoveries averaging 96.6%. The alloy grade was between 58 and 59% Cr and was consistently obtained without unduly high operating temperatures or excessive additions of flux and reductant (Muinonen and Barnes, 2013).

13.3. Discussion Before a mineral can be marketed it needs to be separated from the unwanted material (“gangue” or “waste”) and then processed into a marketable form. The purpose of Mineral Processing and

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Metallurgical Testing is to evaluate different methods in an effort to find the most cost effective way of accomplishing these two goals using where possible natural properties such as a density contrast.

For the Black Thor, Black Label and Big Daddy chromite deposits the mineral of interest is the chromite, which has a somewhat higher density than the enclosing rock minerals, and with a final product ideally consisting of ferro-chrome alloy. The latter is due to the fact that chromite is a mixture of chrome and iron, combined with oxygen, the former two of which are integral components in stainless steel.

The tests that have so far been carried out for these chromite deposits have focused on crushing the raw material into more manageable size fractions and the separation of the chromite from the unwanted mineral fractions based on physical property differences such as density or magnetism. From a geological perspective all of the tests conducted to date have been reasonable. The conclusions drawn by the test workers have found that, with the exception of magnetic separation, the chromite rich material from these deposits has good processing characteristics such that separation of the chromite should be relatively easily accomplished using currently available techniques such as conventional crushing followed by gravity separation using several different techniques.

Market studies will still need to be done to determine what the most profitable final product is. These can be one of or a combination of coarse “lump ore”, an agglomeration of finer material into a sinter, both of which can then be sold as an intermediate product, or processing using pyrometalurgical techniques to create a ferro-chrome alloy that can then be delivered directly to stainless steel processing plants. Again, the test work done to date has resulted in favourable results for all of these.

It is the authour’s opinion, based solely on geological and mineralogical principals, that the tests done to date have been reasonable and that, with the exception of magnetic separation, they have resulted in favourable results that have successfully demonstrated that processing should not present any insurmountable challenges.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

14. Mineral Resource and Mineral Reserve Estimates

14.1. Mineral Resource Estimation

14.1.1. Software Used For the Black Thor and Black Label chromite deposits the software used in the modelling process, including data preparation was Datamine Studio 3, Release 3.21.9646.0 and for the Big Daddy it was Datamine Studio 3, Release 3.21.7164.0.

14.1.2. The Use of Unfolding Mineral deposits typically vary in thickness along strike due to the non-uniform nature of the original deposition environment. Primary and secondary structural modifications also produce variations in strike and dip as well as thickness. The Cartesian coordinate system makes modelling of the natural geological chemical distribution within a mineral deposit difficult. To ensure that all interpolation takes place within a given geological domain, the domain is unfolded to a planar slab to make variogram calculation and grade interpolation easier. After interpolation has been carried out the samples are re- arranged to their original positions. This unfolding process first requires the generation of unfold strings that are used by Datamine as a guide. These strings also include between section and within section tag strings to further constrain the unfolding process.

The unfolding routine used is based on a “proportional” concept under which hanging wall and footwall surfaces of the domain are made flat and parallel to one another. The true along strike and down dip distances are retained but the across dip distances are first normalised to the distance across as a proportion of the total distance. Then this normalised value is multiplied by the average thickness of the mineral domain.

After being composited to uniform sample lengths the samples were unfolded using a custom script. Using another custom script the unfold string file was processed further. This routine checks and validates the strings. The composited sample files and the validated unfold string file are then used as input to the Datamine UNFOLD routine. The output files contain the samples in unfolded co-ordinate space. All subsequent processing was done on these files and utilized the new coordinate system consisting of UCSA (User Coordinate System A – across the dip), UCSB (User Coordinate System B – down the dip) and UCSC (User Coordinate System C – along the strike).

14.1.3. Block Size Determination The block size used for resource estimation is usually a function of SMU, or Smallest Mining Unit, and is determined by taking into consideration the type of equipment that may be used during mining as it has a direct impact on the degree of selectivity that can take place. There is no point using a block size smaller than the smallest unit that can be physically mined selectively (usually a blast round). Due to the favourable geometry and relatively low dollar value per unit volume for these deposits, they may be amenable to extraction by open pit or large tonnage underground mining methods, to keep unit costs to a minimum.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Another factor that needs to be considered is the degree of sampling detail. If samples are large and/or spaced far apart a small block size would be inappropriate.

For the Black Thor and Black Label models a block size of 10 metres by 10 metres by 12 metres was used based on engineering recommendations. As it is expected potential future mining at Big Daddy would have the same engineering requirements the same block size was used for Big Daddy.

A custom script was used to create the empty prototype model and then fill it with blocks using the mineral envelopes for each domain wire frame creating 3 sub-models. And then each sub-model was regularised creating FILLVOL and VOIDVOL fields containing the volume for each block inside or outside the mineral domain wire frame.

14.1.4. Nearest Neighbour Model A Nearest Neighbour (NN) estimated model was created for each domain in order to determine the declustered mean for our data. This mean can then be used to validate the kriged global estimates as all methods of estimation should produce essentially the same global mean, if done correctly. The declustered mean is also used in assessing smoothing and, if necessary, calculating a variance correction of the kriged models.

14.1.5. Ordinary Kriging Model The purpose of block modelling is to provide a globally unbiased estimate based on discrete sample data. Geostatistical methods rely on mathematically modelling the autocorrelation of a regionalized variable, using variography. Then using these mathematical models weights are derived. These weights are applied to the samples used to derive the estimates, while at the same time minimizing the estimation variance. A common method of estimation is Ordinary Kriging. It uses the variogram models to initially derive the weights to be used for each estimate but then, to reduce bias, has all weights sum to 1. In addition, Ordinary Kriging does not require that the mean of the data be known.

A custom script was used to actually carry out the Ordinary Kriging process. Each cell in the block model was discretised using a matrix of 3 x 3 x 3 points in the ABC (unfolded) coordinate system. The Kriging functions were interpolated at each discretisation point using the same search volume as the nearest neighbour interpolation, based on the grade variogram results. In case of local low sample density, a nested search was implemented.

14.1.6. Block Model Validation Verification of grade estimation is carried out in two ways: visually, and statistically.

In the case of a visual check, interpolated estimates are loaded into sections and plans along with the original borehole data. Using contrasting colour schemes grades were tested. Any major discrepancy between the original information and the estimated block was analyzed for possible processing error. Sample plans and sections illustrating this visual check are provided in Appendix 5.

Major discrepancies were also looked for between the statistics of the sample composites, nearest neighbour model (declusterised statistics) and the ordinary kriged model. Specific statistics checked

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits include reproduction of the global mean, as established by nearest neighbour modeling, and ensuring that all blocks were estimated. No significant global or local bias was identified.

14.1.7. Volume Variance Correction The “averaging” process that goes on during interpolation within the block model tends to reduce the variance from its original level. Overall the mean for the entire population remains unaffected. However, since a cut-off grade is used to separate the above- and below-cut-off populations, their specific means are now affected due to this homogenization, or smoothing, of individual estimates. The interpolated mean can be lower or higher than the original mean depending upon whether the cut-off grade is above or below the original mean.

Regression methods such as Kriging may result in an over-smoothing or under-smoothing of the grade variability producing a block grade distribution with a variance that is lower or higher than expected. This expected variance can be calculated using Krige’s relationship which states that the dispersion variance for the samples within the deposit is the sum of the dispersion variance of samples within the blocks and the dispersion variance of the blocks within the deposit (for a more detailed explanation see Appendix 7).

14.1.8. Model Verification Validation procedures were carried out on the estimated block models including visually checking the sample file against estimated blocks. The sample grades were found to reasonably match the estimated block grades in the model.

A global statistical comparison of the global means of all estimations method was done. The difference between all the global means was found not to exceed approximately 5%, to be expected if the process was done correctly.

Other statistical checks that were done include the use of Swath plots (see Appendix 6). Swath plots compare the moving average of the mean for both models and the sample file using panels, or “swaths” through the mineral envelope. As this is best done if the data are within a rectilinear volume the unfolded coordinates were used to define the swaths. The result is a curve for each data set. The curves for the models should inter-weave with the sample curve and the two model curves should be sympathetic with one another with no major deviations from one another. No issues were noted.

14.1.9. Black Thor and Black Label Chromite Deposits

14.1.9.1. Specific Gravity Using a total of 3369 specific gravity (SG) measurements a polynomial regression resulted in a formula for SG based on Cr2O3 values (see Eq. 14.1). This polynomial regression has a correlation coefficient of 0.8739 (1.0 being a straight line). The associated regression line closely matches the densest part of the data trend. This formula was used to calculate SG values for all samples in the drill hole files, based on

Cr2O3 content. If no Cr2O3 assay was available SG was set to a default value of 2.766.

�� = 0.0003 ∗ (��2�3) + 0.0167 ∗ (��2�3) + 2.766 Eq. 14.1

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

14.1.9.2. Geological Domains Experienced geologists had coded each rock unit based on core logging description. All of the holes are inclined and most intersected at least some portion of the mineral zone of interest. Construction of the resource block model was controlled by building wire frames that were then used to isolate related samples. No cut-off was used to limit the extent of these mineral envelopes. The envelopes for the mineral domains (see Figure 14.1) extend from an elevation of 165 metres above sea level (the approximate bedrock surface) down to a maximum depth of 600 metres below sea level, just below the deepest drilling to date. The mineralisation is open to depth along its entire strike length. While it is not a geological envelope, the mineral envelope does honour the local geology as much as possible.

A total of 176 holes have been used for this resource estimate out of a total of 234 holes drilled on the property. For a full list of available drill holes see Appendix 1. Holes were excluded because they did not intersect the defined domains, were not assayed and thus could not provide suitable information or were excluded because there were questions as to their location (see Table 14.1 for details). Visual verification, using sections, was conducted.

Figure 14.1 - Isometric view of the geological domains used.

14.1.9.3. Drill Hole Database Core-drilling data was supplied as a Microsoft Excel file that included collar information, assays, lithology information and down hole survey information. The data has been validated by the author. Once validated, this information was imported into Datamine as five tables: a collar file, an assay file, a lithology file, and 2 survey files. Using the Datamine HOLES3D routine 3 desurveyed drill hole files, bt_lg_holes.dm (used for estimating the Black Thor and Black Label deposits and with some holes removed that did not correlate well with others or have no assay values), bt_lg_allholes.dm (no holes were removed) and bt_utm_holes.dm (a copy of bt_lg_hole but in world UTM coordinate space) were created. The drill hole files were last updated on April 30, 2013.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The Datamine desurveying routine, HOLES3D, does a rigorous set of validation checks including checking for duplicate borehole numbers, missing survey data and overlapping sample intervals. If present, it generates a summary report with a list of all errors encountered. No errors were detected and the drill hole files were then used for subsequent steps.

Using UTM coordinates stored in the drill hole file local grid coordinates were calculated. The base relationship between UTM and Local Grid coordinates was established using hole BT-09-105 which has local grid coordinates of 200N and 0W that corresponds to 552240E and 5846939N in UTM coordinates. The local grid is rotated 45° west relative to true north.

A total of five tables (utm_collars.dm, utm_survey1.dm (hole dip and world azimuth readings without collar readings), utm_survey2.dm (collar dip and real world azimuth readings for the hole collars), utm_assays.dm, and utm_lith.dm) were then imported into Datamine. The survey files were combined to make one file, “survey1.dm”.

The collar file was then processed using the Datamine CDTRAN routine to convert UTM coordinates to local coordinates to creating the file “lg_collars.dm”. Similarly the survey file was process to convert hole azimuths from true north to local grid north creating the file “lg_survey.dm”.

In addition a lookup table was used to convert lithology codes to a more simplified set creating the file lith1.dm.

Using the polynomial regression previously determined, the assay table was processed using the

Datamine EXTRA routine to calculate SG values. Where no Cr2O3 values are present SG was set to a default value of 2.766 and Cr2O3 was set to 0. The output file name is assays1.dm.

Using the appropriate collar, survey, assay and lithology files the Datamine process HOLES3D was used to create three de-surveyed 3D drill holes files: bt_utm_holes.dm (in world UTM space), bt_lg_holes.dm and bt_lg_allholes.dm (both in Local Grid space). Only bt_lg_holes.dm was used for grade estimation as it is much easier to work with orthogonal data rather than rotated data.

A visual review of was made of the drill hole file bt_lg_holes.dm and 9 holes that did not have assays were removed. Another 5 holes that did not correlate well with any of the other holes on the respective section were also removed. All, along with other comments are summarized in Table 14.1.

The resultant file, “bt_lg_holes.dm” contains information for 234 drill holes totalling 78,672 metres and with 34,080 samples with Cr2O3 assays. This file was used for collecting samples for estimation of all three domains.

14.1.9.4. Sample Selection Working in cross section, three sets of mineral zone lines, or strings, were defined, one set for each domain. These strings were drawn to enclose the Black Thor Main, Black Thor Faulted and Black Label chromite zones by snapping to the drill holes. The strings from each set were then used to construct a mineral envelope wire frame for that domain. The envelopes extend from 165 metres above mean sea level (approximately the bedrock surface) down to 600 metres below mean sea level, just below the

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits deepest drilling to date. The borehole samples located within the mineral envelopes were captured using a custom script.

BHID No Assays Removed Section Comments Does not correlate with holes BT-09-13 x 1200 BT-09-15 or BT-10-124 Does not correlate with holes BT-09-40 x 500 BT-09-42 or BT-11-189 Does not correlate with hole BT-09-53 x 2800 BT-09-80 Does not correlate with hole BT-10-110 which is supposed to have the same collar BT-10-109 x 2950 position. BT-10-143 x x 700 BT-10-145 x x 750 Does not match hole BT-09-72 BT-11-177 x 3100 on same section. BT-11-201 x x 1000 BT-11-202 x x 1100 BT-11-203 x x 1800 BT-11-204 x x 2300 BT-11-205 x x 2500 BT-12-221 x x 1054 BT-12-222 x x 2914 Table 14.1 - Summary of Holes excluded

Domain # Samples Mean (m) Total (m) Black Thor Main 16972 0.96 16275 Black Thor Faulted 822 0.94 775 Black Label 2568 1.12 2870

Table 14.2 - Summary of sample lengths by domain.

14.1.9.5. Compositing The captured samples all have an average sample length close to 1 metre (see Table 14.2). The geometry of these deposits favours open pit or large tonnage underground mining, although no conclusions on the mine design have yet been made. The block size selected for engineering studies is 10 metres by 10 metres by 12 metres high. As 1 metre represents a multiple of the blocks dimensions and is very close to the average sample length it was settled on as being the most appropriate length when compositing for uniform support.

Composited samples are weighted by Specific Gravity as it is a close approximation of density (mass per unit volume). The samples were composited to standard 1 m intervals using the Datamine process COMPDH. The COMPDH process starts the composites at the beginning of the selected data interval and leaves any remainder at the end of the interval. This results in most holes having one sample with a

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits length less than the established composite length, within each domain. For grade estimation purposes, drill composites are treated like point data (i.e. their length is not used), thus the need to composite to a standard sample length to eliminate any sample bias. And to avoid bias from a very short sample being treated the same as a standard sample any that were less than 40% of the composite length were rejected.

FIELD NSAMPLES MINIMUM MAXIMUM MEAN VARIANCE STANDDEV SKEWNESS KURTOSIS AU (ppb) 13155 0 9038.20 10.96 12530.82 111.94 61.63 4380.64 PT (ppb) 13155 0 844.00 152.31 7125.05 84.41 0.63 1.58 PD (ppb) 13155 0 4990.00 146.90 22018.84 148.39 6.02 114.54 NI (%) 13155 0 1.37 0.12 0.00 0.05 3.00 65.98 CU (%) 13155 0 3.50 0.01 0.00 0.06 37.89 1903.57 CR2O3 (%) 13155 0 51.17 22.24 230.05 15.17 0.10 -1.47 CR (%) 13155 0 35.00 3.13 61.36 7.83 2.52 5.02 FE (%) 13155 0 28.40 11.66 16.70 4.09 0.00 -1.02

Table 14.3 - Summary Univariate Statistics

Figure 14.2 - Histogram of Cr2O3 within the Black Thor Main Domain.

14.1.9.6. Exploratory Data Analysis A review of the composited drill hole samples within the mineral envelopes was done, primarily using GSLib (Deutsch and Journel, 1998) routines to create histograms for all primary elements and X/Y scatter plots of element pairs (see Appendix 2). Features watched for are outliers and irregularities in the element statistics. Univariate summary statistics for all elements are presented in Table 14.3 and a correlation matrix is presented in Table 14.4. For the latter a correlation coefficient of 0.7 or higher indicates a good linear relationship between the bivariate components. A positive coefficient indicates

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits that with increasing concentration of one element there is a sympathetic increase in the other. A negative coefficient indicates that as one element increases the other decreases.

The Cu and Ni assays include several outliers possibly due to rare sulphide mineralisation. The scatter plot of Cu vs. Ni does not indicate any correlation between the two and the correlation matrix (Table 3) confirms this with an extremely low correlation coefficient.

For the precious metals Au is generally very low although there are several outliers: 1.6, 3.0, 3.7, 6.8 and 9.0 g/t. It has a very weak correlation with Cu. Pd and Pt have a weak correlation although both have single outliers of 4.99 ppm and 0.8 ppm respectively. Pt does have a fairly good positive correlation with

Cr2O3.

Cr2O3, the oxide of interest, does not have any spurious values with a maximum value of 51.17%. The histogram for Cr2O3 within the Main Domain (Figure 14.2) is generally a broad positively skewed distribution with relatively equal representation of all fractions from approximately 10% Cr2O3 to about

36% Cr2O3 and with a small peak at around 42%. The correlation matrix shows, as one would expect, a very good relationship with Fe reflecting the composition of chromite.

Exploratory Data Analysis found no issues with the drill hole database that would invalidate their use for resource estimation purposes. But it was obvious from the data that Au, Ni and Cu are too low and show too much scatter and little correlation with Cr2O3 to be considered candidates for estimation.

AU PD PT CU NI CR2O3 CR FE

AU 1 PD 0.0108 1 PT 0.0147 0.6741 1 CU 0.022 -0.035 0.0844 1 NI 0.2665 -0.025 0.0254 0.0254 1 CR2O3 -0.0061 0.6241 0.3316 -0.1214 -0.0564 1 CR -0.0043 -0.013 -0.0218 -0.0737 -0.0406 0.2896 1 FE 0.004 0.5989 0.3522 -0.0605 -0.0214 0.8992 0.0881 1

Table 14.4 - Correlation Matrix

14.1.9.7. Grade Variography Variogram maps do not indicate any significant rotation (plunge) for the chromite mineralisation and the sample variance (~230) is reached at a range of approximately 145 metres in both the along strike and down dip directions. Due to the nature of the drilling, primarily on 50 metre centres, both the along strike and down dip directions are reasonably well defined.

The general lack of elongation in down dip and along strike directions indicates that the variograms are isotropic in the plane of the deposit (similar ranges for the down dip and along strike directions). The lack of a rotation (no plunge to the grade distribution) means that there is no need to accommodate a rotation when calculating directional variograms.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The experimental grade variograms were calculated using a custom script for the unfolded composited Main Domain data set as it is the one best sampled.

The variogram models derived from the last resource estimate (Aubut, 2012) were superimposed on the current data set. Only minor adjustments were required.

There is a reasonable degree of confidence in the curves used to model all three primary variogram directions (see Figure 14.3). The details for each variogram and he model used can be found in Appendix 3.

The ranges derived from the variogram models are shown in Table 14.5.

UCSA

(Across the Dip) UCSB

(Down the Dip) UCSC

(Along the Strike)

Figure 14.3 - Experimental variograms and fitted models for Cr2O3.

14.1.9.8. Nearest Neighbour Model Summary statistics comparing the nearest neighbour models to the sample files are presented in Table 14.6.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

A visual inspection on a section-by-section and plan-by-plan basis comparing the input sample file with the resultant nearest neighbour file showed good correlation with the drill holes and proper spreading of the grade.

Once satisfied they were okay, all sub-models were combined into one model for the Black Thor and Black Label deposits (nn_btbl_model.dm).

Variogram Models – McFauld’s Lake Cr2O3 PD PT

Nugget 23.1 4093 706 1st spherical structure range A 7 7 3 1st spherical structure range B 6 6 3 1st spherical structure range C 16 16 3 1st spherical structure sill 93.6 10992 3102 2nd spherical structure range A 23 28 16 2nd spherical structure range B 21 14 13 2nd spherical structure range C 60 33 13 2nd spherical structure sill 75.1 3840 1799 3rd spherical structure range A 58 50 50 3rd spherical structure range B 145 65 100 3rd spherical structure range C 145 65 100 3rd spherical structure sill 37.3 2560 1290 Total sill 229.1 21485 6897

Table 14.5 - Variogram Model Parameters.

FILENAME FIELD NRECORDSNSAMPLESMINIMUMMAXIMUMMEAN %Diff VARIANCESKEWNESSWGTFIELD BT_MAIN_DATA1UCR2O3 13928 12703 0.01 51.17 22.01 227.9251 0.12 LENGTH NN_BT_MAIN CR2O3 95463 95463 0.01 51.17 21.56 226.6264 0.18 TONNES OK_BTMAIN_CORCR2O3 95463 95463 0.83 58.91 21.51 0% 123.2376 0.56 TONNES SCR2O3 95463 95463 1.42 50.63 21.34 88.3752 0.39 TONNES BT_FLTD_DATA1UCR2O3 780 695 0.01 45.94 25.56 224.3037 -0.28 LENGTH NN_BT_FLTD CR2O3 5009 5009 0.02 45.94 25.09 234.7205 -0.32 TONNES OK_BTFLTD_CORCR2O3 5009 5009 1.32 57.75 24.40 -3% 144.0653 0.31 TONNES SCR2O3 5009 5009 2.72 47.27 24.04 86.2192 0.09 TONNES BL_DATA1U CR2O3 661 537 0.40 42.71 15.97 104.0562 0.64 LENGTH NN_BL_MOD CR2O3 18372 18372 0.40 42.71 13.70 89.7793 1.06 TONNES OK_BL_MOD CR2O3 18372 18372 1.76 43.71 14.11 -3% 37.2742 1.17 TONNES SCR2O3 18372 18372 2.37 37.81 14.11 27.19202 1.03 TONNES

Table 14.6 – NN and OK model summary statistics, before and after variance correction.

14.1.9.9. Ordinary Kriging Block Model As with the Nearest Neighbour models, the three sub-models were estimated and then combined after validation. For the combined model ok_btbl_model.dm 49.6% of the blocks were estimated in the first search, 18.6% in the second and 31.8% in the third. The latter may suffer from poor local estimation and potentially larger conditional bias.

14.1.9.10. Volume Variance Correction Table 14.6 compares the corrected (CR2O3) and uncorrected values (SCR2O3). It can be seen that the variance of each sub-model has been increased and therefore more in line with the expected variance

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits with respect to block size. As should be expected, the mean remains essentially unchanged by the transformation. The smoothing ratios (1.5 – BT Main, 1.75 – BT Fltd and 2.09 - BL) are well within expected limits (<0.5 or >4).

14.1.10. Big Daddy Chromite Deposit

14.1.10.1. Specific Gravity The Big Daddy data set consists of 2216 specific gravity measurements taken using the water immersion method (the weight of a sample when suspended in air is divided by the weight of the same sample when fully immersed in water). Using a polynomial regression on the total of 2216 specific gravity (SG) measurements a best fit line calculated. The results of this polynomial regression for Cr2O3 and SG are shown in Figure 14.4. The resultant formula has a correlation coefficient of 0.9129 yet the regression line could do a better job of matching the densest part of the data trend. As a result the SG values were clipped to 0.3 units above and below this initial trend line and then a new trend line was determined (see Figure 14.5).

This new trend line has a correlation coefficient of 0.9628 and better matches the densest parts of the data set. The resultant formula for this new trend line is:

�� = 0.0003� + 0.0192� + 2.6629 Eq. 14.2

Using this formula SG values were then calculated for all samples in the drill hole file, based on Cr2O3 content. If no Cr2O3 assay was available SG was set to a default value of 2.6629.

14.1.10.2. Geological Domains Experienced geologists had coded each rock unit based on core logging description. All of the holes are inclined and most intersected at least some portion of the mineral zone of interest. Construction of the resource block model was controlled by building wire frames that were then used to isolate related samples. No cut-off was used to limit the extent of these mineral envelopes. The envelope for the mineral domain (see Figure 14.6) extend from an elevation of 169 metres above sea level (the approximate bedrock surface) down to a maximum depth of 319 metres below sea level, a total depth of 488 metres below surface, just below the deepest drilling to date. The mineralisation is open to depth along its entire strike length. While it is not a geological envelope the mineral envelope does honour the local geology as much as possible.

A total of 84 holes have been used for this resource estimate out of a total of 112 holes drilled on the property. Holes were excluded because they did not intersect the mineral zone, were not assayed and thus could not provide suitable information, or were excluded because there were questions as to their location.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Initial data are contained within a set of Microsoft Excel tables and CSV files that were updated with additional assay data June 1, 2012.

The base relationship between UTM and Local Grid coordinates was established using hole FW-09-33.

Scatterplot of CR2O3 vs. SG 4.5

3.5 SG

y = 0.0003x2 + 0.0157x + 2.7183 R² = 0.9129 2.5

2 0 5 10 15 20 25 30 35 40 45 50 %Cr2O3

Figure 14.4 - Initial Polynomial regression analysis of SG vs. % Cr2O3 for Big Daddy.

Scatterplot of CR2O3 vs. SG 4.5

3.5 SG y = 0.0003x2 + 0.0192x + 2.6629 R² = 0.9628 3

2.5

2 0 5 10 15 20 25 30 35 40 45 50 %Cr2O3

Figure 14.5 – A Polynomial regression analysis of SG vs. % Cr2O3 for Big Daddy, after trimming.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 14.6 - Isometric view of the Big Daddy geological domain used.

14.1.10.3. Drill Hole Database Core-drilling data was supplied as Microsoft Excel files and CSV files that included collar information, assays, lithology information and down hole survey information. The data has been validated by the author. Once validated this information was imported into Datamine as five tables: a collar file, an assay file, a lithology file, and 2 survey files. Using the Datamine HOLES3D routine 2 desurveyed drill hole files, bd_lgholes.dm (used for estimating the Big Daddy chromite deposit), and bd_utmholes.dm (for displaying in world UTM coordinate space) were created. The drill hole files were last updated on June 3, 2012.

The Datamine desurveying routine, HOLES3D, does a rigorous set of validation checks including checking for duplicate borehole numbers, missing survey data and overlapping sample intervals. If present, it generates a summary report with a list of all errors encountered. These files were checked to determine if any errors occurred. Once it had been confirmed that no errors were present the drill hole files were then used for subsequent steps.

There were two survey files: one with information just for the collar, and the second for all additional down hole readings. These two survey files were combined to make one file for the local grid workspace and one for the UTM work-space.

The collar file was then processed using the Datamine CDTRAN routine to convert UTM coordinates to local coordinates creating the files “utm_collars.dm” and “lg_collars.dm”. This transformation was done using the relationship that hole FW-09-33 has local grid coordinates of 1500E and 1800N and this corresponds to 551382E and 5845792N in UTM coordinates and that the local grid is rotated 30° west relative to true north.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

As the down hole survey values stored in the database are in world (UTM) space a copy was made such that the azimuths were transformed to local grid space by rotating clockwise 30°. In addition a lookup table was used to convert lithology codes to a more simplified set creating the file “lith.dm”.

Using the polynomial regression previously described, the assay table was processed using EXTRA to calculate SG values. Where no Cr2O3 values are present SG was set to a default value of 2.663 and Cr2O3 was set to 0. The output file name is “assays1.dm”.

Two drill hole files were then created; one in local grid space and the other in world (UTM) space. Using the appropriate collar, survey, assay and lithology files the Datamine process HOLES3D was used to create two de-surveyed 3D drill holes files: “bd_utmholes.dm” and “bd_lgholes.dm”. Only the latter file was used for grade estimation as it is much easier to work with orthogonal data (local grid) rather than rotated data.

A visual review was made of the drill hole file “bd_lgholes.dm” and 9 holes that did not have assays were removed. In addition hole FW-08-19 was removed as it did not correlate with any of the other holes on section 1200. A summary of all of the holes used for this resource estimate are presented in Appendix 1. A surface plan showing hole locations is shown in Figure 9.2 and an example section (1800 East) in Figure 9.4.

The resultant file, “bd_lgholes.dm” contains information for 99 drill holes totalling 30,589 metres and with 6,117 samples with Cr2O3 assays. This file was used for collecting samples for estimation of the Big Daddy Domain.

Some of the earlier holes drilled only have data analysed using INAA (Induced Neutron Activation Analysis) rather than analysed using the more reliable XRF (X-Ray Fluorescence) method, especially for higher grades. Thus XRF data have been used if available and INAA if that data type is the only one present for Cr2O3.

14.1.10.4. Sample Selection Working in cross section a set of mineral zone lines, or strings, was defined for the domain. These strings were drawn to enclose the Big Daddy chromite zones by snapping to the drill holes. The strings from each set were then used to construct a mineral envelope wire frame for the domain (see Figure 14.6). The envelope extends from 169 metres above mean sea level (approximately the bedrock surface) down to 319 metres below mean sea level, just above the deepest drilling to date (this hole did not intersect any chromite mineralisation). The borehole samples located within the mineral envelopes were captured using a custom script.

14.1.10.5. Compositing The captured samples have an average sample length of 1.2 metres (see Figure 14.7). The geometry of this deposit favours open pit or large tonnage underground mining, although no conclusions on the mine design have yet been made. A block size that will allow a reasonable amount of selectivity using these mining methods is approximately 10m x 10m x 12m. As 1 metre represents a multiple of these

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits blocks dimensions and is very close to the average sample length it was settled on as being the most appropriate length when compositing for uniform support.

Figure 14.7 - Histogram of sample length.

Composited samples are weighted by Specific Gravity as it is a close approximation of density (mass per unit volume). The samples were composited to standard 1 metre intervals using the Datamine process COMPDH. The COMPDH process starts the composites at the beginning of the selected data interval and leaves any remainder at the end of the interval. This results in most holes having one sample with a length less than the established composite length, within the domain. For grade estimation purposes, drill composites are treated like point data (i.e. their length is not used), thus the need to composite to a standard sample length to eliminate any sample bias. And to avoid bias from a very short sample being treated the same as a standard sample any that were less than 40% of the composite length were rejected.

14.1.10.6. Exploratory Data Analysis A review of the composited drill hole samples within the mineral envelopes was done, primarily using GSLib routines (Deutsch and Journel, 1998) to create histograms for all primary elements and X/Y scatter plots of element pairs (see Appendix 2). Features watched for are outliers and irregularities in the element statistics. Univariate summary statistics for all elements are presented in Table 14.7 and a correlation matrix is presented in Table 14.8. For the latter a correlation coefficient of 0.7 or higher indicates a good linear relationship between the bivariate components. A positive coefficient indicates that with increasing concentration of one element there is a sympathetic increase in the other. A negative coefficient indicates that as one element increases the other decreases.

The Cu and Ni assays include several outliers possibly due to rare sulphide mineralisation. The scatter plot of Cu vs. Ni does not indicate any correlation between the two and the correlation matrix (Table 14.8) confirms this with an extremely low correlation coefficient.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

For the precious metals Au is generally very low although there are several outliers: 8.8, 4.0, 3.2, 1.5 and 1.2 g/t. Pd and Pt have a weak correlation with one another.

Cr2O3, the oxide of interest, does not have any spurious values with a maximum value of 47.7%. The histogram for Cr2O3 (Figure 14.8) is generally a broad bimodal distribution with relatively equal representation of all fractions from approximately 10% Cr2O3 to about 36% Cr2O3 and with peaks at around 6% and 42%.

Figure 14.8 - Histogram of Cr2O3 for Big Daddy

FIELD NSAMPLES MINIMUM MAXIMUM MEAN VARIANCE STANDDEV SKEWNESS KURTOSIS AU (ppb) 5215 0 1540.00 6.18 534.02 23.11 48.57 3113.83 PT (ppb) 5215 0 1550.00 134.41 14202.61 119.17 1.68 9.85 PD (ppb) 5215 0 3400.00 156.19 46205.33 214.95 4.61 39.97 NI (%) 5215 0 0.60 0.05 0.01 0.07 1.22 1.47 CU (%) 5215 0 2.74 0.02 0.00 0.06 10.75 336.98 CR2O3 (%) 5215 0 47.70 19.62 302.48 17.39 0.25 -1.67

Table 14.7 - Summary Univariate Statistics

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

After being composited to uniform sample lengths, the samples were unfolded using a custom script. Using another custom script the unfold string file was processed further. This routine checks and validates the strings. The composited sample files and the validated unfold string file are then used as input to the Datamine UNFOLD routine. The output files contain the samples in unfolded co-ordinate space. All subsequent processing was done on these files and utilized the new coordinate system consisting of UCSA, UCSB and UCSC (Across the Dip, Down the Dip and Along the Strike).

AU PD PT CU NI CR2O3

AU 1 PD 0.087 1 PT 0.067 0.6587 1 CU 0.526 0.0137 -0.083 1 NI 0.094 0.073 -0.004 -0.100 1 CR2O3 0.023 0.212 0.599 -0.132 -0.073 1 Table 14.8 - Correlation Matrix

14.1.10.7. Grade Variography

Prior to doing grade variography a custom script was used to prepare a variogram map for the Cr2O3 for the Big Daddy domain in order to check for a rotation in the primary direction of anisotropy. Directional variograms were calculated in 15° increments in the unfolded plane of the mineral zone.

The variogram map does not indicate any significant rotation (plunge). The sample variance (~295) is reached at a range of approximately 150 metres down dip (UCSB) and at about 100 metres along strike (UCSC). Due to the nature of the drilling (primarily on 50 metre centres) both directions are reasonably well defined.

The lack of a rotation (no plunge to the mineralisation) means that there is no need to accommodate a rotation when calculating directional variograms.

The experimental grade variograms were calculated for the unfolded composited data sets using a custom script and are shown in Figure 14.9.

Typically, with inclined drilling, the down dip direction of the variogram is usually well defined due to the abundant sampling of the distance spectrum. This is indeed the case for the Big Daddy data set. While it was noted with the variogram map that the sill should be reached at a range of about 150 metres in actual fact it is reached at about 75 metres as the experimental variogram curve is suppressed, likely due to less variance (good continuity of grades) in this direction. While not as clean, the along strike variogram is still reasonably well defined with a range of about 120 metres.

The across dip (across the thickness of the mineral zone) is not as well defined and reflects the nature of the mineralisation in that there are bands of high-grade chromite mixed with bands of low-grade

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits chromite. Even so, there is enough data to have reasonable confidence in the curve used to model this direction. The individual variograms for all 3 directions are shown in Appendix 3.

In summary, there is a reasonable degree of confidence in the curves used to model all three primary variogram directions.

The ranges derived from the variogram models are shown in Table 14.9.

Variogram Models – McFauld’s Lake Cr2O3

Nugget 34.22 1st spherical structure range A 8 1st spherical structure range B 22 1st spherical structure range C 36.66 1st spherical structure sill 71.62 2nd spherical structure range A 14 2nd spherical structure range B 53 2nd spherical structure range C 66 2nd spherical structure sill 68.23 3rd spherical structure range A 28 3rd spherical structure range B 75 3rd spherical structure range C 120 3rd spherical structure sill 120.52 Total sill 294.59

Table 14.9 - Variogram Model Parameters.

14.1.10.8. Nearest Neighbour Block Model A Nearest Neighbour (NN) estimated model was created for the domain in order to determine the declustered mean for our data. This mean can then be used to validate the kriged global estimates as all methods of estimation should produce essentially the same global mean, if done correctly. The declustered mean is also used in assessing smoothing and, if necessary, calculating a variance correction of the kriged models.

Summary statistics comparing the nearest neighbour model to the sample file are presented in Table 14.10.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

The output Big Daddy Nearest Neighbour file name is nn_bd_mod.dm.

Figure 14.9 - Experimental variograms and fitted models for Big Daddy - Cr2O3.

14.1.10.9. Ordinary Kriging Block Model As with the Nearest Neighbour models, the three sub-models were estimated and then combined after validation. For the resultant model, prior to applying a variance correction, ok_bd_mod.dm 57.5% of the blocks were estimated in the first search, 19.5% in the second and 23.0% in the third. The latter may suffer from poor local estimation and potentially larger conditional bias.

14.1.10.10. Volume Variance Correction The “averaging” process that goes on during interpolation within the block model tends to reduce the variance from its original level. Overall the mean for the entire population remains unaffected. However, since a cut-off grade is used to separate the above- and below-cut-off populations, their specific means are now affected due to this homogenization, or smoothing, of individual estimates. The interpolated mean can be lower or higher than the original mean depending upon whether the cut-off grade is above or below the original mean.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

FILENAME FIELD NRECORDSNSAMPLESMINIMUMMAXIMUMMEAN %Diff VARIANCE SKEWNESSWGTFIELD BD_DATA1U CR2O3 6284 6284 0.00 47.70 19.69 295.6883 0.25 LENGTH NN_BD_MOD CR2O3 25548 25548 0.00 47.70 20.49 296.9710 0.16 TONNES OK_BD_MODELCR2O3 25548 25548 0.00 46.52 19.40 -1% 156.7761 0.39 TONNES SCR2O3 25548 25548 0.00 44.08 19.33 138.2244 0.32 TONNES Table 14.11 - Sample file, Nearest Neighbour and OK model summary statistics, before and after variance correction.

Table 14.11 compares the corrected (CR2O3) and uncorrected values (SCR2O3) from the final block model file, ok_bd_model.dm. It can be seen that the variance of each sub-model has been increased and therefore more in line with the expected variance with respect to block size. As should be expected, the mean remains essentially unchanged by the transformation. The smoothing ratio (1.21) is well within expected limits (>0.5 or <4).

Figure 14.10 - Chart showing price of common types of Chromite ore (www.mining-bulletin.com). 14.2. Mineral Resource Reporting

14.2.1. Resource Classification

Classification of resources is all about confidence in the estimate. As the variograms are well defined in all three primary directions for the Black Thor and the Big Daddy deposits we therefore have high confidence in the Kriging equations.

The next factor that needs to be addressed is the quantity and spatial location of the data actually used in the estimation process. To assist in this a nested approach was used whereby the first search utilised a very rigorous set of criteria, any blocks not estimated would then be evaluated by the second search

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits that used somewhat less rigorous criteria and blocks remaining that were not estimated would utilise the third search that used very loose criteria just to ensure that all remaining were estimated. As a result resource classification can be assigned based on which search a block was estimated with. Thus, if estimated during the first search as it has the most rigorous criteria and therefore the highest confidence in the estimate, then these blocks would be classified as Measured Resources. And if estimated during the second search which uses less rigorous criteria for selecting samples then they would be classified as Indicated Resources as it has moderate confidence in the estimate. Those blocks estimated during the third search use the least rigorous criteria and therefore have low confidence in the estimate and would be classified as Inferred Resources.

An octant search (the search ellipsoid is divided into 8 equal segments based on the primary axis planes) was utilised. It is used to reduce spatial bias by ensuring samples are selected all around the point being estimated. The minimum number of octants was set to 5 for the first two searches. But blocks on the edge of the mineral domain would automatically fail to be estimated during the first and second searches even though all other parameters, including minimum number of samples were met. To overcome this issue wireframe surfaces were manually constructed that isolated areas of high over all confidence from areas of moderate confidence from areas of low confidence (measured, indicated and inferred). The blocks were then recoded based on what confidence domain they are within and all subsequent analysis based on these codes.

Prices received for similar types of chromite concentrate currently sell for at least US$150 per tonne; depending on quality (see Figure 14.10). As a general rule of thumb a minimum gross value of approximately $100 per tonne is usually needed for a deposit to be economic for mining using underground methods. If economies of scale can be attained through the application of open pit mining methods the price threshold can be considerably lower.

As it is still very early in the development stage and as mining and processing studies have not yet been finalised it is inappropriate to apply any sort of “mine design” as such would imply that any contained resources can be considered “reserves” and this is not correct and is very misleading. As a result the resources reported here are only blocks above cut-off and have had no mineability criteria in the form of an assumed mining method applied to them. The only constraints used are the application of a series of grade cut-offs and the resource classification based on confidence in the estimate assigned to the blocks.

In all cases the block modelling was constrained by the definition of the respective mineral envelopes, none of which extend any further than approximately 50 metres past the available drilling. For the Black Thor deposit the mineral envelope extends about 755 metres below surface and for the Big Daddy about 490 metres below surface.

See Appendix 8 for resource classification definitions.

14.2.1.1. Determination of Cut-off Grade While a series of cut-offs can be used to generate tonnage and grade curves, which demonstrate the sensitivity to grade, a decision needs to be made on selecting one cut-off for reporting purposes to

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits demonstrate reasonable prospects for economic extraction. An accepted method is to use a cut-off that is currently being used for a similar deposit in a similar location. In the case of chromite deposits they are not very plentiful but there is one deposit, the Kemi chromite deposit in northern Finland (Alapieta et. Al., 1989) that is geologically very similar. In addition at this cut-off the average grade is very similar to material currently available for sale of the open market as illustrated in figure 14.10. For this deposit, using a cut-off of 20% Cr2O3 and applying mine design and processing parameters, they identified open pit reserves of 40 million tonnes grading 26.6% Cr2O3 and with a Cr/Fe ratio of 1.53. Thus this deposit, and the use of a cut-off of 20% Cr2O3, can be used as a baseline to compare with. But it must be understood that a higher average grade than the 26.6% Cr2O3 for the Kemi deposit would be required at the Black Thor, Black Label and Big Daddy deposits to allow for the fact that the Kemi is close to tide water and thus has exceptionally low transportation costs. While the Ring of Fire chromite deposits currently do not have any nearby infrastructure, if and when they are put in place transportation costs will be higher thus requiring a higher net value to the mineralisation that will be mined.

14.2.1.2. Black Thor chromite deposit

Using a 20% cut-off, there are a total of 137.7 million tonnes at a grade of 31.5% Cr2O3 of Measured and Indicated Resources. This average grade is 18% higher than the average grade for the Kemi chromite deposit. There is good confidence in the lateral continuity of the mineralisation and so these resources can be used for a pre-feasibility or feasibility mining study.

Table 14.12 presents tonnes and grade for each Resource Classification using various cut-offs for the Black Thor deposit (Main and Faulted Domains combined).

The Black Thor deposit resource estimate was constructed by modelling each of 2 domains: Main and Faulted.

14.2.1.2.1. Black Thor Main Domain

Using a 20% cut-off, there are a total of 129.8 million tonnes at a grade of 31.5% Cr2O3 of Measured and Indicated Resources within the Black Thor Main Domain. As previously stated, these resources are blocks above cut-off and have had no mineability criteria applied to them.

Table 14.13 presents tonnes and grade for each Resource Classification using various cut-offs for the Main Domain of the Black Thor deposit.

Cr2O3 tonnes-grade curves for the Main Domain deposit are shown in Figure 14.11. Such curves help illustrate the effect of different cut-offs on available resources. The mining and processing methods chosen will determine what proportion can be converted to reserves as these do not take into consideration mineability and dilution.

14.2.1.2.2. Black Thor Faulted Domain

Using a 20% cut-off, there are a total of 7.9 million tonnes at a grade of 30.4% Cr2O3 of Measured and Indicated Resources within the Faulted Domain. As previously stated, these resources are blocks above cut-off and have had no mineability criteria applied to them.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Table 14.14 presents tonnes and grade for each Resource Classification using various cut-offs for the Faulted Domain of the Black Thor deposit.

Cr2O3 tonnes-grade curves for the Faulted Domain deposit are shown in Figure 14.12. Such curves help illustrate the effect of different cut-offs on available resources. The mining and processing methods chosen will determine what proportion can be converted to reserves as these do not take into consideration mineability and dilution.

14.2.1.2.3. Black Label chromite deposit

Using a 20% cut-off, there are a total of 5.4 million tonnes at a grade of 25.3% Cr2O3 of Indicated

Resources and 0.9 million tonnes at a grade of 22.8% Cr2 of Inferred resources within the Black Label Domain. As previously stated, these resources are blocks above cut-off and have had no mineability criteria applied to them.

Table 14.15 presents tonnes and grade for each Resource Classification using various cut-offs for the Black Label domain.

Cr2O3 tonnes-grade curves for the Black Label Domain deposit are shown in Figure 14.13. Such curves help illustrate the effect of different cut-offs on available resources. The mining and processing methods chosen will determine what proportion can be converted to reserves as these do not take into consideration mineability and dilution.

14.2.1.3. Big Daddy chromite deposit

Using a 20% cut-off, there are a total of 29.1 million tonnes at a grade of 31.7% Cr2O3 of Measured and Indicated Resources which should be easily upgradable through gravity concentration. This average grade is 19% higher than the average grade for the Kemi chromite deposit. Prices received for similar types of chromite concentrate currently sell for at least US$150 per tonne; depending on quality (see Figure 14.10). These resources are blocks above cut-off and have had no mineability criteria applied to them.

There is good confidence in the lateral continuity of the mineralisation and so these resources can be used for a pre-feasibility or feasibility mining study. Table 14.16 presents tonnes and grade for each Resource Classification using various cut-offs for the Big Daddy chromite deposit.

Figure 14.14 presents the Cr2O3 tonnes-grade curves for the Big Daddy chromite deposit and helps illustrate the effect of different cut-offs on available resources. The mining and processing methods chosen will determine what proportion can be converted to reserves as these do not take into consideration mineability and dilution.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Classification Tonnes %Cr 2O3 Cut-off (millions) Measured Resources 139.4 28.8 15% Cr2O3 Indicated Resources 42.8 25.5 Meas. & Ind. Resources 182.2 28.1 Inferred Resources 40.8 25.2

Measured Resources 107.6 32.2 20% Cr2O3 Indicated Resources 30.2 28.9 Meas. & Ind. Resources 137.7 31.5 Inferred Resources 26.8 29.3

Measured Resources 78.8 35.7 25% Cr2O3 Indicated Resources 19.9 32.2 Meas. & Ind. Resources 98.7 35.0 Inferred Resources 19.1 32.2

Measured Resources 55.4 39.2 30% Cr2O3 Indicated Resources 11.5 35.8 Meas. & Ind. Resources 67.0 38.6 Inferred Resources 10.5 32.2 Table 14.12 - Classification of In-Situ Resources for Black Thor (Main and Faulted Domains combined), at different cut-offs.

Classification Tonnes % Cr2O3 Cut-off (millions) Measured Resources 132.5 28.9 15% Cr2O3 Indicated Resources 40.1 25.2 Meas. & Ind. Resources 172.6 28.0 Inferred Resources 40.8 25.2

Measured Resources 102.1 32.3 20% Cr2O3 Indicated Resources 27.7 28.8 Meas. & Ind. Resources 129.8 31.5 Inferred Resources 26.8 29.4

Measured Resources 74.9 35.9 25% Cr2O3 Indicated Resources 17.9 32.3 Meas. & Ind. Resources 92.7 35.2 Inferred Resources 19.1 32.2

Measured Resources 52.8 39.4 30% Cr2O3 Indicated Resources 10.3 35.8 Meas. & Ind. Resources 63.1 38.8 Inferred Resources 10.5 36.5 Table 14.13 - Black Thor Main Domain - Classification of In-Situ Resources, at different cut-offs.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Classification Tonnes % Cr2O3 Cut-off (millions) Measured Resources 6.9 27.6 15% Cr2O3 Indicated Resources 2.7 29.8 Meas. & Ind. Resources 9.6 28.2 Inferred Resources

Measured Resources 5.4 30.3 20% Cr2O3 Indicated Resources 2.5 30.6 Meas. & Ind. Resources 7.9 30.4 Inferred Resources

Measured Resources 3.9 33.3 25% Cr2O3 Indicated Resources 2.1 32.2 Meas. & Ind. Resources 6.0 32.9 Inferred Resources

Measured Resources 2.6 36.2 30% Cr2O3 Indicated Resources 1.2 35.1 Meas. & Ind. Resources 3.9 35.9 Inferred Resources Table 14.14 - Black Thor Faulted Domain - Classification of In-Situ Resources, at different cut-offs.

Classification Tonnes % Cr2O3 Cut-off (millions) Measured Resources 15% Cr2O3 Indicated Resources 11.1 21.1 Meas. & Ind. Resources 11.1 21.1 Inferred Resources 3.3 18.6

Measured Resources 20% Cr2O3 Indicated Resources 5.4 25.3 Meas. & Ind. Resources 5.4 25.3 Inferred Resources 0.9 22.8

Measured Resources 25% Cr2O3 Indicated Resources 2.1 29.8 Meas. & Ind. Resources 2.1 29.8 Inferred Resources 0.1 28.3

Measured Resources 30% Cr2O3 Indicated Resources 0.8 33.7 Meas. & Ind. Resources 0.8 33.7 Inferred Resources 0.02 34.6 Table 14.15 - Black Label Domain - Classification of In-Situ Resources, at different cut-offs.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Classification Tonnes %Cr2O3 Cut-off (millions) Measured Resources 29.5 29.0 15% Cr2O3 Indicated Resources 7.9 26.7 Meas. & Ind. Resources 37.4 28.5 Inferred Resources 4.8 25.0

Measured Resources 23.3 32.1 20% Cr2O3 Indicated Resources 5.8 30.1 Meas. & Ind. Resources 29.1 31.7 Inferred Resources 3.4 28.1

Measured Resources 17.6 35.2 25% Cr2O3 Indicated Resources 3.8 34.0 Meas. & Ind. Resources 21.5 35.0 Inferred Resources 1.8 33.3

Measured Resources 12.8 38.1 30% Cr2O3 Indicated Resources 2.6 37.4 Meas. & Ind. Resources 15.4 38.0 Inferred Resources 1.1 37.7

Table 14.16 - Summary of Classification of In-Situ Resources, at different cut-offs, for the Big Daddy chromite deposit

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

14.3.1. Risks and Opportunities

14.3.1.1. Risks While a significant part of the drilling done to date is primarily on 50 metre centres, there are portions, primarily at depth and at the extremities of the deposits where the drilling is too sparse to adequately characterize the mineral continuity within the plane of the chromite mineralisation.

While higher-grade areas exist at depth and along strike they are poorly defined as a result of the sparse drilling in these locations.

Any mineral deposit located in a remote area, such as the Black Thor, Black Label and Big Daddy deposits, absent of any infrastructure is exposed to above average risk of never getting to production if the project is unable to finance, or alternatively government is unwilling to construct, the required infrastructure. Similarly many other issues need to be addressed including native land claims, social- economic demands and environmental requirements. Due to these and many other uncertainties Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability.

14.3.1.2. Opportunities Further drilling down dip and along strike could identify and expand the presence of the chromite- bearing horizons, in particular higher-grade material.

The mineral zones are completely open to depth. Thus there is an excellent opportunity to expand resources significantly with deeper drilling.

250 50.00 Black Thor - Main Domain

Millions Tonnage-Grade Curves

45.00 200

40.00

150 Main - Tonnes(Mea) 35.00 Main - Tonnes(Ind)

Tonnes Main - Tonnes(Mea + Ind) Grade (%Cr2O3) 100 Main - Tonnes(Inf) Main - Grade(Mea) 30.00 Main - Grade(Ind) Main - Grade(Mea + Ind) Main - Grade (Inf) 50 25.00

- 20.00 5 10 15 20 25 30 35 40 45 50 Cut-off (%Cr2O3)

Figure 14.11 - Cr2O3 Tonnage-Grade curves for the Black Thor Main domain.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

12 50.00 Black Thor - Faulted Domain

Millions Tonnage-Grade Curves

10 45.00

8 40.00

Fltd - Mea. - Tonnes 6 35.00 Fltd - Ind - Tonnes

Tonnes Fltd - Mea-Ind - Tonnes

Grade (%Cr2O3) Fltd - Inf - Tonnes Fltd - Mea - Grade 4 30.00 Fltd - Ind - Grade Fltd - Mea-Ind Grade Fltd - Inf - Grade

2 25.00

- 20.00 5 10 15 20 25 30 35 40 45 50 Cut-Off (%Cr2O3)

Figure 14.12 - Cr2O3 Tonnage-Grade curves for the Black Thor Faulted domain.

25 50.00 Black Label

Millions Tonnage-Grade Curves

45.00

40.00

15 35.00 BL - Tonnes (Mea) BL - Tonnes (Ind) Tonnes BL - Tonnes (Mea&Ind)

30.00 Grade (%Cr2O3) BL - Tonnes (Inf) 10 BL - Grade (Mea) BL - Grade (Ind) 25.00 BL - Grade (Mea&Ind) BL - Grade (Inf) 5

20.00

- 15.00 5 10 15 20 25 30 35 40 45 50 Cut-Off (%Cr2O3)

Figure 14.13 - Cr2O3 Tonnage-Grade curves for the Black Label domain.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

50 50.0 Big Daddy Domain

Millions Tonnage-Grade Curves 45

45.0 40

35 40.0

Tonnes(Mea) 25 35.0 Tonnes(Ind) Tonnes Tonnes(Mea + Ind) Grade (%Cr2O3) Tonnes(Inf) 20 Grade(Mea) Grade(Ind) 30.0 Grade(Mea + Ind) 15 Grade (Inf)

10 25.0

- 20.0 5 10 15 20 25 30 35 40 45 50 Cut-off (%Cr2O3)

Figure 14.14 - Cr2O3 Tonnage-Grade curves for the Big Daddy chromite deposit.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

15. Mineral Reserve Estimates Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. Thus there are currently no reserves defined.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

16. Mining Methods Cliffs initiated a Feasibility Study for the Black Thor deposit which included evaluating potential mining methods but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. Since no pre-feasibility or feasibility study has yet been completed for either deposit no decision has yet been made on what mining method will be used.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

17. Recovery Methods Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. Other than the preliminary metallurgical studies identified in section 13 there have not been any milling studies completed and therefore no recovery methods identified.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

18. Project Infrastructure Aside from Noront’s exploration camp, which services all exploration programs and is located a few kilometres west of the project areas, there is no project infrastructure in place as of yet.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

19. Market Studies and Contracts Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. As no mining studies have yet been completed and as a market study would be an integral part of such there is no current market study available or sales contracts signed.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

20. Environmental Studies, Permitting and Social or Community Impact Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. To date, while base line environmental sampling has been undertaken for Black Thor, there have been no environmental studies completed. No permits, beyond the scope of Exploration and Work Permits covering diamond drilling, have been applied for, nor have there been any social or community impact studies done. Exploration Permit # PR-13-10098 is valid until April 18, 2016 and covers the 4 claims comprising the Black Thor property.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

21. Capital and Operating Costs Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit. As no pre- feasibility or feasibility studies have been completed there are no current estimates of capital and operating costs.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

22. Economic Analysis Cliffs initiated a Feasibility Study for the Black Thor deposit but this study has not been completed. And to date no pre-feasibility or feasibility study has been completed on the Big Daddy deposit and so there has not yet been any economic analysis completed for either deposit.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

23. Adjacent Properties There are four deposits and two occurrences of note that are in the vicinity of the property that hosts the Black Thor, Black Label and Big Daddy deposits. These are the Eagle’s Nest nickel-copper-PGE deposit, the Eagle Two nickel-copper-PGE occurrence, the AT12 nickel-copper-PGE occurrence, the Blackbird chromite deposits, the Black Horse chromite deposit and the Black Creek chromite deposit (see Figure 23.1 for locations).

23.1 Eagle’s Nest Ni-Cu-PGE deposit The Eagle’s Nest deposit is a high grade nickel, copper sulphide deposit with associated platinum and palladium. The deposit is a sub-vertically dipping body of massive magmatic sulphide (pyrrhotite, pentlandite, chalcopyrite) in a pipe-like form approximately 200 metres long, up to several tens of metres thick, and at least 1,600 metres deep. A mineral reserve estimate released in 2012, using a cut- off of 0.5% Ni, identified 11.1 million tonnes of Proven and Probable reserves grading 1.68% Ni, 0.87% Cu, 0.89 grams per tonne Pt, 3.09 grams per tonne Pd and 0.18 grams per tonne Au (Burgess, et. al., 2012).

The author has not been able to verify this information.

23.2 Eagle Two Ni-Cu-PGE Occurrence The Eagle Two mineral occurrence is a nickel, copper and PGE sulphide occurrence, discovered in February 2008, that is located 2 kilometres southwest of Eagle’s Nest and is situated within and adjacent to the ultramafic rocks of the Blackbird 1 chromite deposit. The occurrence is potentially hosted by a shear zone that strikes parallel to the contact between the ultramafic rocks and the felsic intrusive host rocks. The mineralisation occurs in a series of veins of pyrrhotite – magnetite – chalcopyrite – pentlandite bearing massive sulphide with variable amounts of talc. Textures in the veins range from massive to brecciated. No resource estimate has been completed for this occurrence.

23.3 AT12 Ni-Cu-PGE Occurrence The AT12 mineral occurrence is a nickel, copper and PGE sulphide occurrence, discovered in July 2008, located 10 kilometres northeast of Eagle’s Nest and 2 kilometres north of the Black Thor and Black Label chromite deposits. The occurrence is situated within a larger ultramafic body that has been delineated by drilling and by a strong north-northeast trending magnetic and conductive anomaly, and that contains pervasive, low grade nickel and copper occurring as finely disseminated pyrrhotite, chalcopyrite and pentlandite. The AT12 mineralisation itself occurs as disseminated to brecciated to net-textured, and locally to massive, sulphides, largely hosted in the northern portions of the ultramafic body. No resource estimate has been completed for this occurrence.

23.4 Blackbird deposits The Blackbird chromite deposits are similar in mineralisation to the Black Thor chromite deposit, but are not as thick. They are located approximately 6.3 kilometres southwest along strike from the Big Daddy deposit, and 9.3 kilometres southwest along strike from the Black Thor deposit. The Blackbird chromite deposits (Blackbird 1 and 2) are hosted by a peridotite unit within a layered mafic to ultramafic body.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Chromite mineralisation is present as disseminated chromite, semi-massive chromite with intercalated olivine crystals, banded chromite interfingered with peridotite and as massive chromite commonly interlayered with dunite and peridotite. Resource estimates have been completed by Micon (Gowans et al, 2010b and Murahwi et al, 2012).

The author has been able to verify this information.

23.5 Black Horse Chromite Deposit The Black Horse chromite deposit (Aubut, 2014) lies to the northeast, and is an extension of, the Blackbird chromite deposit. It is about 6 kilometres southwest of the Big Daddy chromite deposit. It is hosted by the same stratigraphy as the neighbouring chromite deposits consisting of a well fractionated ultramafic body hosting a zone of disseminated to massive chromite up to 100 metres thick within dunite and overlain by pyroxenite.

23.6 Black Creek Chromite Deposit The Black Creek chromite deposit (Murahwi et al, 2011) lies between the Big Daddy chromite deposit to the south west and the Black Thor/Black Label deposits to the north east. It is a faulted extension of the same stratigraphy consisting of a well fractionated ultramafic body hosting a zone of disseminated to massive chromite up to 65 metres thick within dunite and overlain by pyroxenite.

The author has not been able to verify this information.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Figure 23.1 - Location of the Black Thor, Black Label and Big Daddy chromite deposits and adjacent chromite and Ni-Cu- PGE discoveries.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

24. Other Relevant Data and Information Details on drill results and other pertinent information can be found on the following web sites: http://www.kwgresources.com, and http://norontresources.com/.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

25. Interpretation and Conclusions Using industry-standard block modelling techniques resource models have been created for the Black Thor, Black Label and Big Daddy chromite deposits. As it is still very early in the development stage and as mining and processing studies have not yet been finalised it is inappropriate to apply any sort of “mine design” as such would imply that any contained resources can be considered “reserves” and this is not correct and is very misleading. As a result the resources reported here are only blocks above cut- off and have had no mineability criteria applied to them. Querying these models, using a 20% Cr2O3 cut- off, there is a total in-situ Measured and Indicated resources within the Black Thor chromite deposit of

137.7 million tonnes at a grade of 31.5% Cr2O3, at the Black Label there are 5.4 million tonnes grading

25.3% Cr2O3 of Indicated resources and for the Big Daddy chromite deposit there is 29.1 million tonnes grading 31.7% Cr2O3 of Measured and Indicated resources.

In addition the Black Thor deposit has 26.8 million tonnes at a grade of 29.3 Cr2O3 of Inferred resources,

Black Label has 0.9 million tonnes at a grade of 22.8% Cr2O3 Inferred resources and the Big Daddy has

3.4 million tonnes at a grade of 28.1% Cr2O3 of Inferred resources.

The drilling density is such that very well defined variogram curves could be modelled for all three major directions (across the dip, down the dip and along the strike) resulting in a high confidence in the variogram models. The confidence in the estimates is such that a pre-feasibility or feasibility mining study can be done using the data that are classified as Indicated and/or Measured resources.

While a significant part of the drilling done to date is primarily on 50 metre centres, there are portions, primarily at depth and at the extremities of the deposits where the drilling is too sparse to adequately characterize the mineral continuity within the plane of the chromite mineralisation. And higher-grade areas exist at depth and along strike they are poorly defined as a result of the sparse drilling in these locations.

Further drilling down dip and along strike could identify and expand the presence of the chromite- bearing horizons, in particular higher-grade material.

The mineral zones are completely open to depth. Thus there is an excellent opportunity to expand resources significantly with deeper drilling.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

26. Recommendations As all three of the deposits are still open at depth additional drilling is required to extend the limits of the resources down dip.

Table 26.1 presents a budget for a 15,000 metre drilling program that should provide enough information to extend the current resources down to a depth of at least 500 metres below surface for the Big Daddy deposit and 800 metres for the Black Thor deposit.

Item Description Amount Diamond Drilling 15,000m $1,600,000 Fuel Fuel for drilling and other support services $ 550,000 Support Assaying, supplies, transportation, etc. $1,000,000 Contingencies 10% $ 315,000 Total $3,465,000

Table 26.1 - Proposed Exploration Budget for Infill Drilling

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

27. References

Alapieti T. T., Kujanpää J., Lahtinen J. J. and Papunen H. 1989. The Kemi stratiform chromitite deposit, northern Finland; Economic Geology, v. 84, p. 1057-1077.

Armstrong T. 2009. Memorandum: Quality control report for McFaulds project, James Bay Lowlands, Ontario: T.J. Armstrong Geological Consulting Inc., 12 p.

Armstrong T., Puritch E., and Yassa A. 2008. Technical report and resource estimate on the Eagle One deposit, Double Eagle property, McFaulds Lake area, James Bay Lowlands, Ontario, Latitude 52º45’ N, Longitude -86º17’; Report No. 149, P&E Mining Consultants Inc. prepared for Noront Resources Ltd. 129 p.

Aubut, A. 2014. National Instrument 43-101 Technical Report, Big Daddy chromite deposit, McFaulds Lake Area, Ontario, Canada, Porcupine Mining Division, NTS 43D16, Mineral Resource Estimation Revised Technical Report, UTM: Zone 16, 551333m E, 5845928m N, NAD8; KWG Resources Canada Ltd., 74 p.

Barnes, A. 2011a. Big Daddy Metallurgical Testing; Xstrata Process Support, internal report prepared for KWG Resources Inc., 27 p

Barnes, A. 2011b. Crushing and Screening of Big Daddy Chromite core samples for KWG; Xstrata Process Support, internal report prepared for KWG Resources Inc., 12 p

Bell R. 1887. Report on an exploration of portions of the Attawapiskat & Albany Rivers, Lonely Lake to James’ Bay; Montreal, Dawson Brothers 1887, Separate report No 239, Geological Survey of Canada, Part G, Annual Report 1886, 38 p.

Bond, Fred C. (1952), "The third theory of comminution", Transactions of the American Institute of Mining, Metallurgical, and Petroleum Engineers 193: 484–494.

Buck, M., Orava, D.A., Sharpe, C., Leblanc and B., Murahwa, C. 2011. NI 43-101 Technical Report on the Preliminary Economic Assessment of the Big Daddy Chromite Project, McFaulds Lake Area, James Bay Lowlands, Northern Ontario, Canada; NordPro Mine and Project Management Services Ltd., prepared for KWG Resources Inc., 204 p.

Burgess, H., Gowans, R., Jacobs, C., Murahwi, C. And Damjanovic, B. 2012. NI 43-101 Technical Report Feasibility Study, McFaulds Lake Property, Eagle’s Nest Project, James Bay Lowlands, Ontario, Canada; prepared for Noront Resources Ltd, 210 p.

Deutsch, C.V. and Journel, A.G., 1998. GSLIB Geostatistical Software Library and User’s Guide; Oxford University Press, New York. 369 p.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Gowans R. and Murahwi C. 2009. NI 43-101 Technical Report on the Big Daddy chromite deposit and associated Ni-Cu-PGE, McFaulds Lake joint-venture property, James Bay Lowlands, Northern Ontario; Micon International Ltd., prepared for Spider Resources Inc., KWG Resources Inc., and Freewest Resources Inc., 79 p.

Gowans R., Spooner, J., San Martin, A.J. and Murahwi C. 2010a. NI 43-101 Technical Report on the Mineral Resource estimate for the Big Daddy chromite deposit, McFaulds Lake Area, James Bay Lowlands, Northern Ontario; Micon International Ltd., prepared for Spider Inc. and KWG Resources Inc., 170 p.

Gowans R., Spooner, J., San Martin, A.J. and Murahwi C. 2010b. NI 43-101 Technical Report on the Mineral Resource estimate for the Blackbird Chrome Deposits, James Bay Lowlands, Northern Ontario; Micon International Ltd., prepared for Noront Resources Limited, 188 p.

Isaaks, E.H. and Srivastava, R.M., 1989. An Introduction to Applied Geostatistics; the Blackburn Press, New Jersey. 600 p.

Karakus, M., 2010. Ring of Fire, McFaulds Lake, Northern Ontario, Canada, Black Thor and Black Label Chromite Ores; Internal company report for Cliffs Natural Resources.

Muinonen, M. and Barnes, A. 2013. Second Big Daddy Chromite Smelting Campaign, June-July, 2013; Xstrata Process Support, internal report prepared for Cliffs-KWG Joint Venture, 33 p

Murahwi C., San Martin, A.J., and Spooner, J., 2012. Technical Report on the Updated Mineral Resource estimate for the Black Creek Chrome Deposits, McFaulds Lake Area, James Bay Lowlands, Northern Ontario, Canada; Micon International Ltd., prepared for Probe Metals Limited, 135 p.

Murahwi C., San Martin, A.J., Gowans R., and Spooner, J., 2011. Technical Report on the Updated Mineral Resource estimate for the Blackbird Chrome Deposits, McFaulds Lake Property, James Bay Lowlands, Ontario, Canada; Micon International Ltd., prepared for Noront Resources Limited, 177 p.

Palmer D. 2006. Report of diamond drilling, Freewest option double eagle joint-venture project, James Bay Lowlands, Ontario: Probe Metals Ltd., 28 p.

Percival J.A. 2007. Geology and metallogeny of the Superior Province, Canada, in Goodfellow, W.D., ed., Mineral Deposits of Canada: A Synthesis of Major Deposit-Types, District Metallogeny, the Evolution of Geological Provinces, and Exploration Methods; Geological Association of Canada, Mineral Deposits Division, Special Publication No. 5, p. 903-928.

Riley J. L. 2003. Flora of the Hudson Bay Lowlands and its Postglacial Origins; National Research Council of Canada Press, Ottawa, 236 p.

Scoates R.F. 2009. Report on drill core examination of some Black Label and Big Thor chromitite intersections: Freewest Resources Ltd., 37 p.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

SGS Minerals Services. 2009. An Investigation into the Recovery of Chromite and Other Elements from the Big Daddy chromite deposit; prepared for Billiken Management Services Inc. 171 p.

SNC-Lavalin, 2012. Cliffs Chromite Project, Prefeasibility Study – Final Report; prepared for Cliffs Natural Resources, 1247 p.

Stott G. M. 2007. Precambrian geology of the Hudson Bay and James Bay lowlands region interpreted from aeromagnetic data – east sheet; Ontario Geological Survey, Preliminary Map P.3597, scale 1:500,000.

Thomas R.D. 2004. Technical report Spider # 1 and # 3 projects (James Bay joint-venture) James Bay, Ontario; Spider Resources Inc. and KWG resources Inc. 95 p.

Tuchscherer, M.G., Hoy, D., Johnson, M., Shinkle, D., Kruze, R. And Holmes, M. 2009. Fall 2008 to Winter 2009 Technical Drill Report on the Black Thor Chromite Deposit, Black Label Chromite Deposit and Associated Ni-Cu-PGEs; Freewest Resources Canada Inc. internal report, 48 p.

World Industrial Minerals. 2008. Chromite Testing Analyses Report Big Daddy Chromite Occurrence; prepared for KWG/Spider Joint Venture and Billiken Management Services Inc. 59 p.

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Certificate of Qualifications I, Alan James Aubut, do hereby certify the following:

I operate under the business name of Sibley Basin Group Geological Consulting Services Ltd., a company independent of Noront Resources Inc. The business address of Sibley Basin Group Geological Consulting Services Ltd. is:

Sibley Basin Group PO Box 304 300 First St. West Nipigon, ON P0T 2J0 I am the author of this National Instrument 43-101 technical document titled “National Instrument 43-101Technical Report, Big Daddy chromite deposit, McFaulds Lake Area, Ontario, Canada, Porcupine Mining Division, NTS 43D16, Mineral Resource Estimation Technical Report” (the report), and it is effective July 27, 2015. I am a graduate Geologist of Lakehead University, in Thunder Bay, Ontario with the degree of Honours Bachelor of Science, Geology (1977). I am a graduate Geologist of the University of Alberta, in Edmonton, Alberta with the degree of Master of Science, Geology (1979). I hold an Applied Geostatistics Citation through the Faculty of Extension of the University of Alberta, in Edmonton, Alberta. I have been a practicing Geologist since 1979. I have been practicing mineral resource estimation since 2000. o 2000 – 2010: Senior Geologist responsible for resource estimation for Inco/Vale. o 2010 – present: Consulting Geologist specializing in resource estimation. This work experience has included doing multiple resource estimates on the Black Thor and Big Daddy chromite deposits. I am currently a member in good standing of the Association of Professional Geoscientists of Ontario. I am a member of the Society of Economic Geologists. I have read National Instrument 43-101, and confirm that I am a “qualified person” for the purposes of this instrument and that this report has been prepared in compliance with said instrument. I have visited the McFaulds Lake projects that are the subject of this report on several instances with the most recent being March 2014. I take responsibility for all items within this report. I am independent, as defined by Chapter 5 Section 1.5 of NI 43-101, of Noront Resources Inc. and all other parties related to the subject property and do not expect to become an insider, associate or employee of any of the parties. I have previously prepared a technical report detailing a resource estimate for the property. As of July 27, 2015, the report to the best of my knowledge, information and belief contains all scientific and technical information that is required to be disclosed in order to make the report not misleading.

KWG Resources Inc. and Cliffs Chromite Far North Inc. supplied copies of all reports and data available. It was these data that were used for the current project. The resource estimate generated with this data is effective as of July 27, 2015.

Alan Aubut PGeo

July 27, 2015

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 1 – Summary of Diamond Drilling PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BIG DADDY FW-06-02 554031.04 5844203.73 172.40 3000.00 -900.00 197.00 130.00 -50.00 BIG DADDY FW-06-03 551086.49 5845303.84 174.00 1000.00 1525.00 353.50 120.00 -50.00 BIG DADDY FW-06-04 551595.40 5845222.38 170.80 1400.00 1200.00 254.00 120.00 -50.00 BIG DADDY FW-08-05 551048.99 5845368.79 174.70 1000.00 1600.00 327.00 150.00 -50.00 BIG DADDY FW-08-06 550962.38 5845318.79 173.80 900.00 1600.00 384.00 150.00 -50.00 BIG DADDY FW-08-07 551135.59 5845418.79 172.90 1100.00 1600.00 405.70 149.60 -50.00 BIG DADDY FW-08-08 551690.91 5846056.95 171.30 1900.00 1875.00 270.00 150.00 -50.00 BIG DADDY FW-08-09 551690.91 5846056.95 171.60 1900.00 1875.00 176.00 154.80 -73.10 BIG DADDY FW-08-10 551591.90 5845228.45 170.90 1400.00 1207.00 312.00 150.00 -65.00 BIG DADDY FW-08-11 551557.90 5845287.34 170.70 1400.00 1275.00 306.00 150.00 -65.00 BIG DADDY FW-08-12 551110.59 5845462.10 173.10 1100.00 1650.00 354.00 149.90 -50.00 BIG DADDY FW-08-13 551160.59 5845375.49 172.80 1100.00 1550.00 297.00 150.00 -50.00 BIG DADDY FW-08-14 551178.89 5845443.79 173.60 1150.00 1600.00 189.00 150.00 -50.00 BIG DADDY FW-08-15 551153.89 5845487.10 172.10 1150.00 1650.00 240.00 150.00 -50.00 BIG DADDY FW-08-16 551514.35 5844482.77 174.00 960.00 600.00 372.00 315.00 -50.00 BIG DADDY FW-08-17 551514.35 5844482.77 174.00 960.00 600.00 376.00 315.00 -65.00 BIG DADDY FW-08-18 551197.19 5845512.10 171.40 1200.00 1650.00 255.00 150.00 -50.00 BIG DADDY FW-08-19 551172.19 5845555.40 171.80 1200.00 1700.00 273.00 150.00 -50.00 BIG DADDY FW-08-20 551147.19 5845598.70 174.00 1200.00 1750.00 375.00 150.00 -50.00 BIG DADDY FW-08-21 551122.19 5845642.00 172.30 1200.00 1800.00 447.00 150.00 -50.00 BIG DADDY FW-08-22 551208.79 5845692.00 172.20 1300.00 1800.00 330.00 150.00 -50.00 BIG DADDY FW-08-23 551183.79 5845735.30 172.40 1300.00 1850.00 424.00 150.00 -50.00 BIG DADDY FW-09-24 551345.40 5845655.40 171.60 1400.00 1700.00 219.00 150.10 -50.00 BIG DADDY FW-09-25 551295.40 5845742.00 172.00 1400.00 1800.00 339.50 148.60 -50.00 BIG DADDY FW-09-26 551518.60 5845755.40 171.40 1600.00 1700.00 207.00 150.70 -50.00 BIG DADDY FW-09-27 551468.60 5845842.00 171.50 1600.00 1800.00 321.00 150.72 -50.00 BIG DADDY FW-09-28 551669.31 5845894.37 171.00 1800.00 1745.00 207.00 150.70 -50.00 BIG DADDY FW-09-29 551616.81 5845985.30 171.30 1800.00 1850.00 368.00 152.52 -50.93 BIG DADDY FW-09-30 551840.01 5845998.70 170.40 2000.00 1750.00 77.00 153.18 -48.94 BIG DADDY FW-09-31 551790.01 5846085.30 171.10 2000.00 1850.00 339.00 150.50 -50.79 BIG DADDY FW-09-32 551876.62 5846135.30 169.80 2100.00 1850.00 291.50 150.10 -50.00 BIG DADDY FW-09-33 551382.00 5845792.00 172.70 1500.00 1800.00 267.00 150.87 -48.82 BIG DADDY FW-09-34 551245.40 5845828.60 171.80 1400.00 1900.00 468.00 150.30 -47.99 BIG DADDY FW-09-35 551418.60 5845928.60 171.70 1600.00 1900.00 429.00 148.93 -48.03 BIG DADDY FW-09-36 551432.00 5845705.40 172.60 1500.00 1700.00 192.00 152.40 -50.07 BIG DADDY FW-09-37 551258.79 5845605.40 172.20 1300.00 1700.00 171.00 150.40 -50.00 BIG DADDY FW-09-38 551826.62 5846221.90 171.20 2100.00 1950.00 423.00 154.09 -48.71 BIG DADDY FW-09-39 551530.21 5845935.30 171.90 1700.00 1850.00 328.00 150.90 -49.48 BIG DADDY FW-09-40 551580.21 5845848.70 171.20 1700.00 1750.00 175.00 150.00 -50.00 BIG DADDY FW-09-41 551480.21 5846021.90 171.80 1700.00 1950.00 490.50 152.34 -48.61

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BIG DADDY FW-09-42 551753.41 5845948.70 171.00 1900.00 1750.00 133.50 149.23 -50.53 BIG DADDY FW-09-43 551703.41 5846035.30 171.10 1900.00 1850.00 330.00 149.67 -48.42 BIG DADDY FW-09-44 551566.81 5846071.90 171.40 1800.00 1950.00 523.00 149.70 -50.00 BIG DADDY FW-09-45 550907.77 5844213.39 174.00 300.00 670.00 228.00 135.00 -50.00 BIG DADDY FW-09-46 551778.41 5845905.40 171.10 1900.00 1700.00 351.00 329.10 -50.00 BIG DADDY FW-10-47 551555.21 5845892.00 171.20 1700.00 1800.00 177.00 149.10 -50.00 BIG DADDY FW-10-48 551641.81 5845942.00 171.40 1800.00 1800.00 265.00 150.20 -50.00 BIG DADDY FW-10-49 551332.00 5845878.60 172.10 1500.00 1900.00 456.00 150.20 -50.00 BIG DADDY FW-10-50 551728.41 5845992.00 171.20 1900.00 1800.00 265.00 150.60 -50.00 BIG DADDY FW-10-51 551815.01 5846042.00 170.30 2000.00 1800.00 156.00 148.80 -50.00 BIG DADDY FW-10-52 551653.41 5846121.90 171.10 1900.00 1950.00 195.00 150.80 -50.00 BIG DADDY FW-10-53 551901.62 5846092.00 169.50 2100.00 1800.00 182.00 149.30 -50.00 BIG DADDY FW-10-54 551407.00 5845748.70 172.40 1500.00 1750.00 210.00 150.40 -50.00 BIG DADDY FW-10-55 551185.59 5845332.19 173.70 1100.00 1500.00 95.00 153.10 -50.00 BIG DADDY FW-10-56 551149.21 5845535.20 173.30 1170.00 1694.00 241.00 140.70 -50.00 BIG DADDY FW-11-61 551698.00 5845733.00 165.00 1744.16 1590.90 309.00 16.00 -51.00 BIG DADDY FW-11-62 551698.00 5845733.00 172.00 1744.16 1590.90 444.00 16.00 -67.00 BIG DADDY FW-11-63 551948.00 5845514.00 169.19 1851.17 1276.25 650.00 330.00 -45.00 BIG DADDY FW-11-64 551945.47 5845518.17 169.20 1851.07 1281.12 710.00 330.00 -57.00 BIG DADDY FW-11-65 551736.00 5845967.00 168.00 1894.07 1774.55 52.37 150.00 -65.00 BIG DADDY FW-11-65A 551736.00 5845967.00 168.00 1894.07 1774.55 225.00 150.00 -70.00 BIG DADDY FW-11-66 551426.00 5845709.00 173.00 1496.61 1706.12 201.00 150.00 -60.00 BIG DADDY FW-11-67 551426.00 5845709.00 173.00 1496.61 1706.12 201.00 150.00 -65.00 BIG DADDY FW-11-68 551350.00 5845641.00 172.00 1396.79 1685.23 252.00 150.00 -75.13 BIG DADDY FW-11-69 551350.00 5845641.00 172.00 1396.79 1685.23 267.00 150.00 -82.79 BIG DADDY FW-11-70 551204.00 5845499.00 173.00 1199.35 1635.25 216.00 150.00 -70.61 BIG DADDY FW-11-71 551204.00 5845499.00 173.00 1199.35 1635.25 288.00 150.00 -75.00 BIG DADDY FW-11-72 551173.00 5845364.00 172.00 1105.00 1533.84 207.00 150.00 -70.00 BIG DADDY FW-11-73 551698.40 5845732.00 169.60 1744.01 1589.84 291.00 330.05 -45.00 BIG DADDY FW-11-74 551698.40 5845732.00 172.00 1744.01 1589.84 387.00 330.00 -60.44 BIG DADDY FW-11-75 551698.40 5845732.40 167.70 1744.21 1590.18 342.00 283.17 -50.00 BIG DADDY FW-11-76 551698.40 5845732.40 172.00 1744.21 1590.18 390.00 283.17 -64.52 BIG DADDY FW-11-77 551471.00 5845542.00 172.00 1452.08 1538.99 282.00 9.00 -45.00 BIG DADDY FW-11-78 551471.00 5845542.00 172.00 1452.08 1538.99 416.00 9.00 -58.00 BIG DADDY FW-11-79 551472.20 5845541.60 167.30 1452.92 1538.05 231.00 329.46 -42.04 BIG DADDY FW-11-80 551472.20 5845541.60 173.00 1452.92 1538.05 372.00 329.46 -64.70 BIG DADDY FW-11-81 551472.20 5845542.00 169.80 1453.12 1538.39 42.85 283.33 -45.00 BIG DADDY FW-11-81A 551471.00 5845542.00 172.00 1452.08 1538.99 336.00 284.00 -46.26 BIG DADDY FW-11-82 551472.20 5845542.00 172.00 1453.12 1538.39 432.00 283.33 -59.88 BIG DADDY FW-11-83 551168.50 5845055.60 170.70 946.90 1269.01 390.00 329.60 -68.00

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BIG DADDY FW-11-83A 551169.00 5845054.00 173.00 946.54 1267.37 458.00 330.00 -64.04 BIG DADDY FW-11-84 551127.10 5845131.60 171.20 949.05 1355.53 180.00 325.79 -57.57 BIG DADDY FW-11-85 551155.10 5845188.00 171.60 1001.50 1390.37 132.00 329.91 -45.99 BIG DADDY FW-11-86 551239.00 5845144.80 171.40 1052.56 1311.01 345.00 328.93 -57.70 BIG DADDY FW-11-87 551239.00 5845144.80 173.00 1052.56 1311.01 458.70 328.93 -67.98 BIG DADDY FW-11-88 551187.00 5845231.00 173.00 1050.63 1411.66 129.00 330.00 -44.84 BIG DADDY FW-11-89 551274.90 5845192.80 169.70 1107.65 1334.63 436.00 299.02 -60.32 BIG DADDY FW-11-90 551331.10 5845191.20 170.40 1155.52 1305.14 402.00 328.70 -47.58 BIG DADDY FW-11-91 551249.50 5845420.00 170.70 1199.25 1544.09 145.00 328.93 -44.51 BIG DADDY FW-11-92 551352.00 5845352.00 169.20 1254.02 1433.95 405.61 329.02 -62.10 BIG DADDY FW-12-100 551521.30 5845647.60 170.70 1548.44 1605.30 165.00 330.23 -51.24 BIG DADDY FW-12-101 551582.00 5845733.00 170.00 1643.71 1648.90 135.00 330.00 -51.37 BIG DADDY FW-12-102 551957.10 5845890.00 166.00 2047.05 1597.32 285.00 284.60 -46.70 BIG DADDY FW-12-103 551957.10 5845890.00 166.00 2047.05 1597.32 408.00 284.60 -66.24 BIG DADDY FW-12-104 551666.90 5845790.00 170.00 1745.73 1655.82 207.00 329.69 -46.05 BIG DADDY FW-12-105 551767.50 5845819.20 170.00 1847.45 1630.81 222.00 330.75 -44.46 BIG DADDY FW-12-106 551731.30 5845674.00 167.00 1743.50 1523.16 486.00 0.00 -69.08 BIG DADDY FW-12-107 551988.60 5845834.00 170.00 2046.33 1533.07 450.00 329.90 -66.96 BIG DADDY FW-12-108 551903.60 5845979.60 167.00 2045.52 1701.67 117.00 329.50 -47.17 BIG DADDY FW-12-109 552001.10 5845999.60 167.00 2139.96 1670.24 210.00 329.89 -45.55 BIG DADDY FW-12-110 551894.50 5845708.40 167.60 1902.04 1471.35 462.00 329.50 -60.83 BIG DADDY FW-12-111 551731.30 5845675.20 170.00 1744.10 1524.20 444.00 329.90 -66.84 BIG DADDY FW-12-112 551733.10 5845675.20 169.20 1745.66 1523.30 510.00 296.17 -64.88 BIG DADDY FW-12-93 551953.90 5845888.40 166.00 2043.48 1597.53 390.00 6.70 -44.81 BIG DADDY FW-12-94 551953.90 5845888.40 166.00 2043.48 1597.53 426.00 6.70 -57.76 BIG DADDY FW-12-95 551310.80 5845416.80 169.80 1250.74 1510.67 213.00 325.26 -45.00 BIG DADDY FW-12-96 551310.80 5845416.80 169.80 1250.74 1510.67 306.00 325.26 -65.79 BIG DADDY FW-12-97 551954.80 5845887.60 166.00 2043.86 1596.39 231.00 330.06 -45.58 BIG DADDY FW-12-98 551954.80 5845887.60 166.00 2043.86 1596.39 309.00 330.06 -65.80 BIG DADDY FW-12-99 551354.60 5845541.60 168.00 1351.07 1596.85 159.00 329.12 -46.02 BLACK THOR BT-08-01 552753.09 5847709.75 166.83 1107.81 182.19 426.00 140.00 -51.00 BLACK THOR BT-08-02 552539.94 5847623.92 168.21 896.40 272.22 276.00 135.64 -50.00 BLACK THOR BT-08-03 553824.91 5848874.10 164.30 2689.02 247.62 414.00 129.48 -50.00 BLACK THOR BT-08-04 553899.36 5848805.05 164.13 2692.84 146.16 297.00 135.96 -50.00 BLACK THOR BT-08-05 553760.22 5848937.09 164.48 2687.82 337.90 513.00 136.79 -50.00 BLACK THOR BT-08-06 553788.30 5849325.46 165.68 2982.29 592.66 408.00 134.05 -50.00 BLACK THOR BT-08-07 553871.58 5849242.44 165.29 2982.48 475.08 231.00 135.00 -50.00 BLACK THOR BT-08-08 553720.47 5849242.52 165.78 2875.69 581.99 423.00 134.06 -50.00 BLACK THOR BT-08-09 553857.26 5849385.78 165.65 3073.71 586.56 396.00 127.91 -50.00 BLACK THOR BT-08-10 552817.16 5847635.87 166.80 1100.88 84.65 324.00 134.61 -50.00

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-08-11 552729.02 5847577.85 167.24 997.52 105.95 327.00 135.44 -45.00 BLACK THOR BT-08-12 552728.61 5847578.26 167.24 997.53 106.53 404.00 138.03 -65.00 BLACK THOR BT-08-15 552798.53 5847790.12 166.47 1196.77 206.89 369.00 138.66 -45.00 BLACK THOR BT-09-100 552962.22 5848320.04 167.04 1687.23 465.86 396.00 315.03 -50.00 BLACK THOR BT-09-101 553072.12 5848498.88 167.46 1891.39 514.60 564.00 315.00 -51.19 BLACK THOR BT-09-102 552968.29 5848677.15 167.62 1944.03 714.08 238.00 317.89 -50.18 BLACK THOR BT-09-103 553041.88 5848600.71 167.54 1942.02 607.99 396.00 226.60 -50.20 BLACK THOR BT-09-104 553266.10 5849550.97 166.85 2772.51 1121.38 354.00 272.93 -51.63 BLACK THOR BT-09-105 552239.97 5846939.12 168.42 200.07 0.11 300.00 133.06 -46.42 BLACK THOR BT-09-106 552239.91 5846939.18 168.42 200.06 0.20 402.00 127.39 -59.66 BLACK THOR BT-09-107 553843.36 5849271.01 165.40 2982.72 515.23 357.00 238.15 -51.56 BLACK THOR BT-09-13 552869.68 5847719.87 166.24 1197.41 106.91 246.00 135.19 -45.00 BLACK THOR BT-09-14 552974.19 5847896.47 166.15 1396.18 157.88 228.90 136.91 -45.00 BLACK THOR BT-09-16 552973.76 5847896.85 166.15 1396.15 158.45 228.00 128.76 -60.00 BLACK THOR BT-09-17 553235.32 5848198.53 166.56 1794.42 186.82 381.00 126.10 -65.00 BLACK THOR BT-09-18 553235.46 5848198.31 166.56 1794.36 186.57 309.00 128.23 -45.00 BLACK THOR BT-09-19 553373.87 5848341.60 167.63 1993.56 190.02 360.00 127.88 -60.00 BLACK THOR BT-09-20 553374.19 5848341.37 167.63 1993.61 189.63 345.00 133.43 -45.00 BLACK THOR BT-09-21 553113.14 5848038.10 166.23 1594.58 159.78 333.00 128.04 -45.82 BLACK THOR BT-09-22 553042.00 5848108.54 166.47 1594.09 259.89 345.00 137.54 -49.72 BLACK THOR BT-09-23 553495.34 5848502.65 167.18 2193.33 218.01 399.00 131.53 -60.56 BLACK THOR BT-09-24 553495.66 5848502.36 167.21 2193.35 217.58 327.00 134.18 -46.41 BLACK THOR BT-09-25 553526.43 5849166.09 166.20 2684.43 665.15 483.00 133.13 -49.72 BLACK THOR BT-09-26 553247.28 5848746.45 166.91 2190.31 565.81 444.00 135.72 -50.47 BLACK THOR BT-09-27 553247.00 5848746.74 166.91 2190.33 566.21 447.00 130.72 -64.59 BLACK THOR BT-09-28 553699.61 5849134.79 165.88 2784.75 520.55 408.00 132.45 -49.52 BLACK THOR BT-09-29 553272.37 5849131.94 166.72 2480.63 820.65 384.00 133.98 -45.92 BLACK THOR BT-09-30 553032.36 5848395.93 167.22 1790.49 469.92 279.00 136.18 -45.51 BLACK THOR BT-09-31 553031.98 5848396.34 167.22 1790.50 470.48 387.00 132.66 -60.78 BLACK THOR BT-09-32 553602.41 5849353.73 166.14 2870.84 744.10 429.00 130.20 -45.04 BLACK THOR BT-09-33 553969.84 5849008.75 164.08 2886.72 240.35 477.00 134.39 -44.45 BLACK THOR BT-09-34 553182.02 5848529.16 167.38 1990.52 458.30 336.00 134.14 -45.46 BLACK THOR BT-09-35 552590.05 5847435.64 167.58 798.70 103.66 261.00 136.60 -45.24 BLACK THOR BT-09-36 552590.38 5847435.27 167.58 798.67 103.16 456.00 135.87 -60.09 BLACK THOR BT-09-37 553969.08 5849009.42 164.08 2886.66 241.36 555.00 129.60 -59.11 BLACK THOR BT-09-38 553493.23 5849377.00 166.32 2810.09 837.75 393.00 135.84 -49.28 BLACK THOR BT-09-39 553860.95 5849454.58 165.72 3124.97 632.60 408.00 127.65 -48.25 BLACK THOR BT-09-40 552411.63 5847195.86 167.58 502.99 60.26 384.00 129.11 -44.81 BLACK THOR BT-09-41 554194.62 5849067.40 164.35 3087.13 122.88 348.00 124.86 -60.04 BLACK THOR BT-09-42 552411.27 5847196.14 167.58 502.93 60.72 366.00 133.27 -61.47

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-09-43 552752.10 5848673.82 167.64 1788.81 864.60 426.00 135.66 -49.44 BLACK THOR BT-09-44 554206.19 5849057.14 164.23 3088.06 107.44 296.95 134.67 -47.50 BLACK THOR BT-09-45 552587.64 5847437.32 167.58 798.19 106.55 236.00 308.41 -44.74 BLACK THOR BT-09-46 553112.65 5848879.39 167.32 2189.12 755.00 456.00 134.68 -49.84 BLACK THOR BT-09-47 554561.97 5849406.21 163.83 3586.46 102.70 258.00 136.10 -46.10 BLACK THOR BT-09-48 552587.18 5847437.74 167.68 798.16 107.17 248.50 310.84 -60.00 BLACK THOR BT-09-49 553637.83 5848640.83 166.24 2391.79 214.96 333.20 142.93 -45.37 BLACK THOR BT-09-50 553637.17 5848641.40 166.24 2391.73 215.83 321.00 133.26 -59.22 BLACK THOR BT-09-51 553493.39 5848781.72 166.21 2389.28 416.72 50.55 315.57 -45.00 BLACK THOR BT-09-52 553915.05 5848924.97 163.93 2788.73 219.85 372.50 133.27 -45.00 BLACK THOR BT-09-53 553914.83 5848925.17 163.93 2788.72 220.15 432.00 129.24 -58.53 BLACK THOR BT-09-54 553776.04 5848784.58 165.40 2591.16 218.88 456.00 135.27 -46.99 BLACK THOR BT-09-55 553775.74 5848784.86 165.40 2591.15 219.28 444.00 138.57 -59.87 BLACK THOR BT-09-56 554266.32 5848857.46 162.65 2989.38 -76.27 329.00 135.76 -42.57 BLACK THOR BT-09-57 553567.61 5848574.65 166.68 2295.34 217.82 72.00 137.71 -45.00 BLACK THOR BT-09-57A 553567.63 5848574.62 166.68 2295.34 217.78 384.00 135.00 -52.69 BLACK THOR BT-09-58 553567.44 5848574.81 166.70 2295.33 218.05 471.00 141.05 -65.00 BLACK THOR BT-09-59 553428.73 5848429.98 167.62 2094.84 213.73 327.00 135.17 -44.09 BLACK THOR BT-09-60 553428.58 5848430.15 167.62 2094.85 213.95 480.00 136.48 -60.26 BLACK THOR BT-09-61 553200.71 5849352.95 166.92 2586.25 1027.60 311.30 315.69 -45.00 BLACK THOR BT-09-62 553164.61 5849660.10 167.13 2777.91 1270.31 193.00 279.50 -45.69 BLACK THOR BT-09-63 553162.96 5848127.15 166.38 1692.78 187.52 357.00 133.86 -45.00 BLACK THOR BT-09-64 553162.90 5848127.24 166.38 1692.80 187.62 417.00 135.05 -58.87 BLACK THOR BT-09-65 553041.41 5847968.78 166.11 1494.85 161.48 336.00 135.00 -46.52 BLACK THOR BT-09-66 553041.64 5847968.84 166.11 1495.05 161.36 318.40 135.49 -60.70 BLACK THOR BT-09-67 553165.25 5849660.05 167.13 2778.32 1269.82 223.00 279.94 -60.00 BLACK THOR BT-09-68 554295.14 5849670.76 164.55 3584.85 478.44 387.00 98.10 -45.39 BLACK THOR BT-09-69 554022.47 5848959.98 163.23 2889.44 168.65 378.00 134.38 -45.26 BLACK THOR BT-09-70 553304.89 5848271.08 166.86 1894.91 188.93 267.00 129.18 -46.19 BLACK THOR BT-09-71 553304.62 5848271.36 166.86 1894.92 189.32 342.00 129.94 -60.13 BLACK THOR BT-09-72 553950.57 5849297.07 165.21 3076.97 457.85 354.00 133.08 -45.65 BLACK THOR BT-09-73 554019.15 5849028.58 163.75 2935.61 219.50 498.00 135.91 -45.08 BLACK THOR BT-09-74 554018.69 5849028.92 163.75 2935.52 220.07 336.00 133.11 -58.47 BLACK THOR BT-09-75 552696.05 5847472.68 166.45 899.85 54.90 297.00 135.05 -43.81 BLACK THOR BT-09-76 552695.93 5847472.71 166.45 899.79 55.00 24.00 134.12 -60.00 BLACK THOR BT-09-76A 552695.84 5847472.76 166.45 899.76 55.10 315.00 141.11 -63.24 BLACK THOR BT-09-77 552906.10 5847829.74 166.26 1300.86 158.84 307.00 130.94 -51.50 BLACK THOR BT-09-78 552905.97 5847829.94 166.26 1300.90 159.08 294.00 136.12 -66.76 BLACK THOR BT-09-79 553952.79 5848962.05 163.70 2841.64 219.39 483.00 157.08 -45.24 BLACK THOR BT-09-80 553952.50 5848962.63 163.71 2841.84 220.00 420.55 153.87 -57.53

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-09-81 553986.33 5848855.03 163.34 2789.68 119.99 282.00 135.00 -45.34 BLACK THOR BT-09-82 553831.52 5848729.08 165.29 2591.15 140.40 222.00 135.37 -45.57 BLACK THOR BT-09-83 554017.50 5848894.15 164.46 2839.39 125.62 363.00 134.86 -43.56 BLACK THOR BT-09-84 553704.37 5848713.02 165.84 2489.89 218.96 351.00 133.36 -45.00 BLACK THOR BT-09-85 553703.93 5848713.42 165.84 2489.86 219.55 441.00 130.87 -65.85 BLACK THOR BT-09-86 554056.65 5848930.40 163.23 2892.69 123.57 354.00 131.21 -42.68 BLACK THOR BT-09-87 554128.69 5848860.54 162.16 2894.24 23.23 141.00 132.32 -44.33 BLACK THOR BT-09-88 554051.68 5849000.47 163.33 2938.73 176.63 357.00 132.90 -44.48 BLACK THOR BT-09-89 554120.21 5849002.14 163.16 2988.37 129.36 270.00 134.97 -45.26 BLACK THOR BT-09-90 553688.65 5848590.67 166.18 2392.26 143.55 210.25 129.88 -44.78 BLACK THOR BT-09-91 552732.83 5847436.65 166.05 900.37 3.41 150.00 137.02 -45.70 BLACK THOR BT-09-92 552536.29 5847487.94 168.42 797.67 178.65 243.00 309.81 -50.26 BLACK THOR BT-09-93 552931.33 5848495.60 167.51 1789.52 611.84 281.00 317.54 -50.18 BLACK THOR BT-09-94 553605.41 5848538.56 166.79 2296.55 165.57 252.00 128.32 -45.00 BLACK THOR BT-09-95 553997.22 5849530.56 165.60 3275.05 589.96 393.00 133.52 -51.16 BLACK THOR BT-09-96 552625.41 5847400.48 166.55 798.84 53.79 198.00 133.70 -43.68 BLACK THOR BT-09-97 553002.77 5848425.50 167.32 1790.47 511.75 459.15 317.18 -51.73 BLACK THOR BT-09-98 553429.12 5849678.05 166.70 2977.63 1095.96 505.00 257.02 -49.94 BLACK THOR BT-09-99 553074.01 5848355.87 167.10 1791.62 412.14 660.00 317.95 -50.28 BLACK THOR BT-10-108 554090.55 5848963.42 162.92 2940.01 122.95 135.00 130.42 -45.00 BLACK THOR BT-10-109 554025.18 5849025.06 163.65 2937.38 212.75 228.45 135.00 -46.27 BLACK THOR BT-10-110 554025.49 5849024.76 163.65 2937.38 212.32 195.00 135.00 -46.93 BLACK THOR BT-10-111 554054.00 5848933.00 163.19 2892.66 127.28 104.25 135.00 -44.99 BLACK THOR BT-10-112 554312.89 5848956.45 161.90 3092.31 -39.20 219.00 310.98 -46.00 BLACK THOR BT-10-113 553497.83 5848219.76 166.99 1995.06 16.21 270.35 313.78 -45.00 BLACK THOR BT-10-114 553604.91 5848113.05 165.25 1995.32 -134.95 306.00 311.89 -45.83 BLACK THOR BT-10-115 553572.10 5848290.84 167.20 2097.83 13.95 219.00 316.60 -45.00 BLACK THOR BT-10-116 553565.42 5848432.40 167.43 2193.20 118.78 174.00 132.85 -45.89 BLACK THOR BT-10-117 553729.87 5848415.49 166.12 2297.54 -9.46 330.00 307.92 -45.00 BLACK THOR BT-10-118 553853.27 5848574.53 164.34 2497.25 15.74 225.00 307.78 -44.30 BLACK THOR BT-10-119 554056.77 5848786.09 162.61 2790.74 21.44 168.00 130.19 -44.67 BLACK THOR BT-10-120 554052.77 5849067.31 163.86 2986.76 223.12 375.00 141.12 -43.82 BLACK THOR BT-10-121 552730.06 5847296.04 167.23 798.99 -94.06 165.00 315.00 -44.69 BLACK THOR BT-10-122 552869.80 5847438.94 167.18 998.85 -91.82 153.00 313.68 -42.16 BLACK THOR BT-10-123 552873.64 5847582.47 165.81 1103.05 6.95 186.00 137.83 -45.25 BLACK THOR BT-10-124 552985.59 5847603.09 165.56 1196.79 -57.63 168.00 316.40 -46.28 BLACK THOR BT-10-125 552960.39 5847777.41 165.89 1302.24 83.46 144.00 136.21 -44.22 BLACK THOR BT-10-126 553009.16 5847861.28 165.95 1396.03 108.28 129.00 132.13 -45.12 BLACK THOR BT-10-127 553078.19 5847933.67 165.95 1496.03 110.65 164.00 132.99 -45.44 BLACK THOR BT-10-128 553199.70 5848091.95 166.23 1693.87 136.65 159.00 132.92 -43.94

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-10-129 553359.55 5848076.80 166.29 1796.19 12.90 255.00 314.07 -44.21 BLACK THOR BT-10-130 553481.77 5848165.28 166.28 1945.18 -10.95 201.00 313.05 -45.56 BLACK THOR BT-10-131 553482.14 5848164.88 166.28 1945.16 -11.50 318.18 323.80 -60.66 BLACK THOR BT-10-132 553361.78 5848214.66 166.83 1895.25 108.81 156.00 141.29 -41.29 BLACK THOR BT-10-133 553554.15 5848238.17 166.96 2047.90 -10.60 216.00 314.79 -43.43 BLACK THOR BT-10-134 553554.27 5848237.97 166.96 2047.84 -10.82 384.00 315.40 -61.03 BLACK THOR BT-10-135 553624.40 5848309.59 166.90 2148.07 -9.76 291.00 309.37 -43.42 BLACK THOR BT-10-136 553625.03 5848308.99 166.90 2148.10 -10.64 102.00 312.58 -65.87 BLACK THOR BT-10-136B 553625.06 5848308.95 166.90 2148.09 -10.68 345.00 318.10 -65.87 BLACK THOR BT-10-137 553695.35 5848382.00 166.66 2249.44 -8.73 285.00 317.97 -44.51 BLACK THOR BT-10-138 553695.63 5848381.68 166.66 2249.41 -9.16 372.00 316.50 -60.04 BLACK THOR BT-10-139 553743.38 5848465.44 165.69 2342.41 16.31 231.00 312.97 -45.00 BLACK THOR BT-10-140 553743.33 5848465.43 165.69 2342.36 16.34 276.00 315.38 -61.74 BLACK THOR BT-10-141 553818.06 5848542.79 164.86 2449.91 18.19 240.00 316.21 -43.54 BLACK THOR BT-10-142 553818.63 5848542.22 164.96 2449.91 17.38 294.00 313.61 -60.88 BLACK THOR BT-10-143 552593.61 5847292.95 167.11 700.32 0.24 126.00 134.81 -45.00 BLACK THOR BT-10-143B 552591.38 5847295.18 167.09 700.32 3.39 288.00 134.81 -45.00 BLACK THOR BT-10-144 552592.99 5847293.52 167.11 700.29 1.08 234.00 132.75 -60.70 BLACK THOR BT-10-145 552693.95 5847260.09 167.41 748.04 -93.95 88.70 315.26 -45.00 BLACK THOR BT-10-145B 552693.95 5847260.09 167.41 748.04 -93.95 231.00 315.74 -44.06 BLACK THOR BT-10-146 552694.00 5847260.11 167.41 748.08 -93.97 231.00 312.84 -58.83 BLACK THOR BT-10-147 552663.45 5847435.66 166.36 850.62 51.77 216.00 138.20 -46.32 BLACK THOR BT-10-148 552663.07 5847435.98 166.36 850.57 52.27 267.00 137.59 -58.64 BLACK THOR BT-10-149 552737.32 5847500.47 166.47 948.68 45.36 225.00 129.67 -46.14 BLACK THOR BT-10-150 552736.98 5847500.74 166.47 948.63 45.79 276.00 138.04 -58.18 BLACK THOR BT-10-151 552816.55 5847568.16 166.58 1052.57 37.21 207.00 139.10 -46.59 BLACK THOR BT-10-152 552816.17 5847568.52 166.58 1052.56 37.72 234.00 131.67 -59.53 BLACK THOR BT-10-153 552880.13 5847646.83 166.08 1153.15 47.87 252.00 127.55 -47.55 BLACK THOR BT-10-154 552879.71 5847647.22 166.08 1153.13 48.44 207.00 135.26 -61.18 BLACK THOR BT-10-155 552926.55 5847742.45 165.97 1253.59 82.66 231.00 131.69 -46.14 BLACK THOR BT-10-156 552926.22 5847742.74 165.98 1253.56 83.10 216.00 133.37 -58.46 BLACK THOR BT-10-157 552974.44 5847827.28 166.06 1347.44 108.78 204.00 133.15 -44.60 BLACK THOR BT-10-158 552974.21 5847827.57 166.07 1347.48 109.15 174.00 129.27 -59.85 BLACK THOR BT-10-159 553045.02 5847899.99 166.02 1448.76 110.28 213.00 132.18 -44.10 BLACK THOR BT-10-160 553044.89 5847900.07 166.02 1448.72 110.43 168.00 124.49 -58.16 BLACK THOR BT-10-161 553096.96 5847988.70 166.07 1548.21 136.29 153.00 140.06 -44.42 BLACK THOR BT-10-162 553096.76 5847988.84 166.07 1548.17 136.52 204.10 140.13 -58.66 BLACK THOR BT-10-163 553129.34 5848092.43 166.33 1644.45 186.74 201.00 132.71 -44.33 BLACK THOR BT-10-164 553129.11 5848092.69 166.35 1644.48 187.08 216.00 131.78 -60.52 BLACK THOR BT-10-165 553323.92 5848041.04 165.64 1745.71 12.81 261.00 314.37 -45.76

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PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-10-166 553324.55 5848040.53 165.64 1745.79 12.01 276.67 315.16 -59.55 BLACK THOR BT-10-167 553395.11 5848111.44 166.19 1845.83 12.26 252.00 314.18 -45.12 BLACK THOR BT-10-168 553395.50 5848111.12 166.19 1845.88 11.75 231.00 316.66 -59.15 BLACK THOR BT-10-169 553900.92 5848589.94 163.76 2541.83 -7.06 267.00 312.63 -42.63 BLACK THOR BT-10-170 553901.34 5848589.54 163.76 2541.85 -7.64 330.00 317.73 -59.19 BLACK THOR BT-10-171 553970.22 5848662.48 163.84 2642.14 -4.77 234.00 314.04 -44.78 BLACK THOR BT-10-172 553970.53 5848662.17 163.84 2642.13 -5.20 273.00 312.70 -58.98 BLACK THOR BT-10-173 553968.66 5848803.61 163.46 2740.82 96.14 306.00 137.57 -47.78 BLACK THOR BT-10-174 553968.39 5848803.90 163.46 2740.84 96.53 324.00 138.25 -60.95 BLACK THOR BT-10-175 553910.41 5849065.00 164.99 2884.46 322.15 453.00 129.22 -64.88 BLACK THOR BT-11-176 554050.00 5849065.00 163.88 2983.17 223.45 291.00 315.00 -44.32 BLACK THOR BT-11-177 554124.00 5849141.00 164.72 3089.24 224.86 225.00 315.00 -50.95 BLACK THOR BT-11-178 554124.00 5849141.00 164.72 3089.24 224.86 243.00 135.00 -45.00 BLACK THOR BT-11-178B 554124.00 5849141.00 164.72 3089.24 224.86 417.00 135.00 -55.21 BLACK THOR BT-11-179 554262.00 5849138.00 164.06 3184.70 125.16 369.00 315.00 -47.62 BLACK THOR BT-11-180 554334.00 5849208.00 163.82 3285.11 123.74 204.00 311.80 -44.53 BLACK THOR BT-11-181 553120.00 5848161.00 166.53 1686.34 241.83 261.00 315.00 -46.26 BLACK THOR BT-11-182 553275.00 5848300.00 167.07 1894.23 230.52 402.00 315.00 -45.00 BLACK THOR BT-11-183 553356.00 5848498.00 167.53 2091.51 313.25 255.00 313.80 -46.11 BLACK THOR BT-11-184 553510.00 5848625.00 166.66 2290.21 294.16 246.00 313.60 -46.01 BLACK THOR BT-11-185 552356.00 5846691.00 169.97 106.66 -257.39 252.00 315.00 -45.00 BLACK THOR BT-11-186 552402.00 5846784.00 170.06 204.95 -224.15 249.00 315.00 -44.30 BLACK THOR BT-11-187 552476.00 5846854.00 170.07 306.77 -226.98 276.00 314.52 -44.88 BLACK THOR BT-11-188 552555.00 5846913.00 169.83 404.35 -241.12 299.00 315.00 -45.32 BLACK THOR BT-11-189 552600.00 5847013.00 169.44 506.88 -202.23 231.00 315.00 -45.37 BLACK THOR BT-11-190 552658.00 5847085.00 168.91 598.81 -192.33 204.00 312.10 -42.99 BLACK THOR BT-11-191 553980.00 5849135.00 164.61 2983.17 322.44 309.00 135.00 -45.00 BLACK THOR BT-11-192 554450.00 5849500.00 164.40 3573.61 248.19 291.00 135.00 -45.00 BLACK THOR BT-11-193 552356.00 5846691.00 169.97 106.66 -257.39 315.00 315.00 -55.00 BLACK THOR BT-11-194 552556.00 5846634.00 169.75 207.78 -439.11 381.00 315.00 -45.00 BLACK THOR BT-11-195 552679.00 5847768.00 167.20 1096.61 275.77 546.00 127.60 -54.07 BLACK THOR BT-11-196 552601.00 5847840.00 167.62 1092.37 381.84 723.00 126.10 -54.50 BLACK THOR BT-11-197 553426.00 5848566.00 166.99 2189.09 311.83 645.00 125.20 -60.23 BLACK THOR BT-11-198 553351.00 5848640.00 166.82 2188.38 417.19 810.00 127.10 -59.15 BLACK THOR BT-11-199 553632.00 5848780.00 165.95 2486.08 317.49 285.00 130.00 -65.00 BLACK THOR BT-11-199A 553632.00 5848780.00 165.95 2486.08 317.49 717.00 130.00 -69.55 BLACK THOR BT-11-200 553929.00 5849044.00 164.78 2882.76 294.16 684.00 126.00 -66.25 BLACK THOR BT-11-201 552870.00 5847438.00 167.18 998.32 -92.63 135.00 315.00 -45.00 BLACK THOR BT-11-202 552814.00 5847637.00 166.80 1099.44 87.68 201.00 135.00 -50.00 BLACK THOR BT-11-203 553359.00 5848076.00 166.29 1795.23 12.73 102.00 315.00 -45.00

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PROJECT BHID UTM_E UTM_N ELEV LOCAL_X LOCAL_Y LENGTH AZI DIP BLACK THOR BT-11-204 553731.00 5848418.00 166.09 2300.11 -8.49 291.00 315.00 -45.00 BLACK THOR BT-11-205 553701.00 5848712.00 165.87 2486.78 220.62 225.00 135.00 -45.00 BLACK THOR BT-12-206 552747.00 5847840.00 166.69 1195.61 278.60 570.00 129.83 -52.36 BLACK THOR BT-12-207 552747.00 5847840.00 166.69 1195.61 278.60 558.00 129.83 -61.08 BLACK THOR BT-12-208 552864.00 5848004.00 166.51 1394.30 311.83 447.00 129.55 -49.84 BLACK THOR BT-12-209 552866.00 5848003.00 166.51 1395.01 309.71 475.00 129.55 -61.48 BLACK THOR BT-12-210 552806.00 5848061.00 166.78 1393.60 393.15 657.00 130.23 -61.44 BLACK THOR BT-12-211 553000.00 5848148.00 166.65 1592.29 317.49 456.00 130.00 -57.34 BLACK THOR BT-12-212 552944.00 5848204.00 166.87 1592.29 396.69 621.00 129.74 -59.87 BLACK THOR BT-12-213 552944.00 5848204.00 166.87 1592.29 396.69 699.00 129.74 -67.21 BLACK THOR BT-12-214 553132.00 5848300.00 167.01 1793.11 331.63 558.00 129.96 -58.40 BLACK THOR BT-12-215 553059.00 5848371.00 167.15 1791.70 433.46 743.00 129.58 -57.84 BLACK THOR BT-12-216 553295.00 5848417.00 167.57 1991.10 299.11 588.00 130.00 -59.52 BLACK THOR BT-12-217 553241.00 5848477.00 167.51 1995.34 379.72 740.00 130.77 -59.50 BLACK THOR BT-12-218 552924.00 5847248.00 166.38 902.16 -265.17 468.00 310.00 -45.27 BLACK THOR BT-12-219 552483.00 5847678.00 168.39 894.38 350.72 639.00 130.50 -51.00 BLACK THOR BT-12-220 552480.00 5847681.00 168.41 894.38 354.97 595.00 130.50 -59.40 BLACK THOR BT-12-221 552883.00 5847504.00 165.92 1054.18 -55.15 162.00 315.00 -75.00 BLACK THOR BT-12-222 554099.00 5848918.00 162.83 2913.88 84.85 123.00 215.00 -45.00 BLACK THOR BT-12-223 554099.00 5848918.00 162.83 2913.88 84.85 60.00 215.00 -55.00 BLACK THOR BT-12-224 553250.00 5847905.00 165.37 1597.24 -31.11 255.00 315.15 -44.58 BLACK THOR BT-12-225 552813.00 5847918.00 166.68 1297.43 287.09 513.00 130.28 -59.73 BLACK THOR BT-12-226 552813.00 5847918.00 166.68 1297.43 287.09 561.00 130.00 -68.65 BLACK THOR BT-12-227 553072.00 5848214.00 166.72 1689.87 313.25 399.00 130.00 -58.62 BLACK THOR BT-12-228 552924.00 5848085.00 166.59 1494.01 326.68 423.00 130.00 -48.63 BLACK THOR BT-12-229 552975.00 5848310.00 167.00 1689.17 449.72 678.00 130.02 -57.58 BLACK THOR BT-12-230 552869.00 5848140.00 166.78 1494.01 404.47 540.00 129.94 -53.31 BLACK THOR BT-12-231 552869.00 5848140.00 166.78 1494.01 404.47 569.00 129.94 -61.10 BLACK THOR BT-12-232 552973.00 5848312.00 167.00 1689.17 452.55 582.00 130.02 -46.75 BLACK THOR BT-12-233 552870.00 5847439.00 167.18 999.03 -91.92 351.00 150.00 -45.77 BLACK THOR BT-12-234 553605.00 5848113.00 165.25 1995.34 -135.06 351.00 150.00 -43.84 BLACK THOR BT-13-235 553211.00 5848290.00 166.97 1841.90 268.70 279.00 315.25 -46.04 BLACK THOR BT-13-236 553211.00 5848290.00 166.97 1841.90 268.70 357.00 314.56 -67.17 BLACK THOR BT-13-237 553088.00 5848134.00 166.54 1644.62 245.37 225.00 315.23 -44.70 BLACK THOR BT-13-238 553478.00 5848592.00 166.82 2244.25 293.45 285.00 315.00 -45.36 BLACK THOR BT-13-239 553421.00 5848649.00 166.67 2244.25 374.06 141.00 315.00 -44.62 BLACK THOR BT-13-240 553197.70 5848653.00 167.18 2089.18 534.78 315.00 135.46 -44.28 BLACK THOR BT-13-241 552727.50 5847578.00 167.28 996.56 107.13 180.00 314.96 -55.28

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 2 – Exploratory Data Analysis

Histograms – Black Thor

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Histograms – Big Daddy

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Scatter Plots – Black Thor

105

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

106

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Scatter Plots – Big Daddy

107

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 3 – Experimental Variograms and Models

Black Thor

Cr2O3

UCSA

UCSB

108

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSC

UCSA

109

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSB

UCSC

110

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSA

UCSB

111

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSC

112

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Big Daddy chromite deposit

Cr2O3

UCSA

UCSB

113

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSC

114

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 4 – OK Search Parameters Used

Black Thor and Black Label UCSB UCSC UCSA SEARCH OCTANT OCTANT OCTANT OCTANT SAMPLES SAMPLES HOLE PER OCTANTS MINIMUM MINIMUM MINIMUM MINIMUM MAXIMUM MAXIMUM MAXIMUM MAXIMUM NUMBER OF OF NUMBER OF NUMBER OF NUMBER SAMPLES OF SAMPLES PER PER SAMPLES PER SAMPLES MAX. NUMBER NUMBER MAX. METHOD USED? METHOD 1 20 145 145 YES 5 1 4 20 32 6 2 25 220 220 YES 5 1 4 10 32 6 3 30 295 295 NO n/a n/a n/a 10 32 0

UCSA - across the dip UCSB - down the dip UCSC - along the strike Big Daddy UCSB UCSC UCSA SEARCH OCTANT OCTANT OCTANT OCTANT SAMPLES SAMPLES HOLE PER OCTANTS MINIMUM MINIMUM MINIMUM MINIMUM MAXIMUM MAXIMUM MAXIMUM MAXIMUM NUMBER OF OF NUMBER OF NUMBER OF NUMBER SAMPLES OF SAMPLES PER PER SAMPLES PER SAMPLES MAX. NUMBER NUMBER MAX. METHOD USED? METHOD 1 20 75 120 YES 5 1 4 20 32 6 2 25 115 160 YES 5 1 4 10 32 6 3 30 155 200 NO n/a n/a n/a 10 32 0

UCSA - across the dip UCSB - down the dip UCSC - along the strike

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 5 – Block Model Plans and Sections NN Models Sample Plan views – Black Thor and Black Label chromite deposit

116

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

NN Models Sample Plan views - Big Daddy chromite deposit

117

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

OK Models: Sample Plan views – Black Thor and Black Label chromite deposits

118

-80m Level

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

OK Models: Sample Plan views - Big Daddy chromite deposit

119

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NN Model – N-S Sample Sections - Black Thor and Black Label chromite deposits

120

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NN Model – N-S Sample Sections - Big Daddy chromite deposit

121

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

OK Models - N-S Sample Sections – Black Thor and Black Label chromite deposits

122

NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

OK Models - N-S Sample Sections - Big Daddy chromite deposit

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Appendix 6 - Model Validation

Swath Plots - Cr2O3

Black Thor

UCSA

Black Thor Swath Plot - UCSA - Main Domain 30

1_bt_main_data1u 15 Title 2_nn_bt_main 3_ok_btmain_mod 4_Num.Blks. 10

0 107 181 255 329 403 477 551 625 699 773 Title

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

UCSB

Black Thor Swath Plot - UCSB - Main Domain 30

1_bt_main_data1u 15 Title 2_nn_bt_main 3_ok_btmain_mod 4_Num.Blks. 10

0 107 181 255 329 403 477 551 625 699 773 Title

UCSC

Black Thor Swath Plot - UCSC - Main Domain 35

20 1_bt_main_data1u

Title 2_nn_bt_main 15 3_ok_btmain_mod 4_Num.Blks.

0 107 181 255 329 403 477 551 625 699 773 Title

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NI43-101 Technical Report – Black Thor, Black Label and Big Daddy Chromite Deposits

Black Thor Faulted Domain

UCSA

Black Thor Swath Plot - UCSA - Faulted Domain 35

20 1_bt_fltd_data1u

Title 2_nn_bt_fltd 15 3_ok_btfltd_mod 4_Num.Blks.

0 92.5 137.5 182.5 227.5 272.5 317.5 362.5 407.5 452.5 497.5 Title

126

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UCSB

Black Thor Swath Plot - UCSB - Faulted Domain 40

1_bt_fltd_data1u 20 Title 2_nn_bt_fltd 3_ok_btfltd_mod 15 4_Num.Blks.

0 92.5 137.5 182.5 227.5 272.5 317.5 362.5 407.5 452.5 497.5 Title

UCSC

Black Thor Swath Plot - UCSC - Faulted Domain 40

1_bt_fltd_data1u 20 Title 2_nn_bt_fltd 3_ok_btfltd_mod 15 4_Num.Blks.

0 92.5 137.5 182.5 227.5 272.5 317.5 362.5 407.5 452.5 497.5 Title

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Black Label Domain

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Big Daddy

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14.2.1.6. UCSC

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Appendix 7 – Variance Correction

Theory Used

The “averaging” process that goes on during interpolation within the block model tends to reduce the variance from its original level. Overall the mean for the entire population remains unaffected. However, since a cut-off grade is used to separate the above- and below-cut-off populations, their specific means are now affected due to this homogenization, or smoothing, of individual estimates. The interpolated mean can be lower or higher than the original mean depending upon whether the cut-off grade is above or below the original mean.

D2(,A) = D2(, ) + D2( ,A) Eq. 5.1

Where are the samples, v are the blocks and A is the deposit.

In terms of average variance (known as gamma bar and calculated using the Datamine FFUNC) the dispersion variance for samples within blocks can be written as:

_ _ 2 D (, ) (, ) (,) Eq. 5.2

_ As (,) 0 (the variance of a sample with itself equals 0) we can rewrite the above as:

_ 2 D (, ) (, ) Eq. 5.3

And by substituting into the first equation we get:

_ D2(,A) = ( , ) + D2( ,A) Eq. 5.4

As the left side is equivalent to the sample variance ( 2 ) we can reorder so that we can determine the block variance in terms of the average variogram of blocks to blocks (gamma bar) and the sample variance:

_ D2( ,A) = 2 - ( , ) Eq. 5.5

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Of these 3 terms we can get the sample variance ( 2 ) from our variogram and we can calculate the gamma bar value, using as input our variogram model and our block size. Using this information, and a change of support model we can correct for any differences due to over or under smoothing.

Gamma Bar is the calculated value of what theoretically should be the "Sample variance in Block" (Vb). As this value is based on the variogram we know that it is directly proportional to the variogram sill, which can be considered equivalent to the “Sample Variance in Deposit” (Vd). Knowing these two values we can then determine what proportion of the total variance is represented by the "Sample Variance in deposit" (Vd) using the following relationship:

(Vd ) -(Vb ) [Variogram Sill] - [Gamma Bar] PVB = = Eq. 5.6 (Vd ) [Variogram Sill]

Using the declusterised variance for our mineral zone (Vd) we can then determine the variance that should be attributable to the “Variance between blocks” using the following relationship:

VB-theoretical = PVB * Vd Eq. 5.7

Now that we have the theoretical “Variance between blocks” we can then compare this with the actual “Variance between blocks”. The latter is the variance of our Kriged model using our new support. By dividing the theoretical by the actual we get the smoothing ratio:

Smoothing ratio = VB-theoretical Eq. 5.8

VB-actual

A smoothing ratio less than 0.8 or greater than 1.2 require a variance correction. A smoothing ratio between 0 and 0.5 or greater than 4 could reveal errors in the data or in the models and necessitates further investigation.

There are two common methods of correcting for smoothing: the Affine correction (see Equation 5.9 – Isaaks & Srivastava, 1989) and the Indirect Lognormal Shortcut method (see Equation 5.10 – Isaaks & Srivastava, 1989). The former is best used for normal distributions and expands or contracts the distribution symmetrically about the mean and preserves the general shape of the original distribution. The Indirect Log Normal Shortcut on the other hand is best, as the name implies, for adjusting highly skewed distributions that approach being log normal. Unlike the Affine, which can result in negative values, the Log Normal Shortcut reduces the skewness of the distribution as the variance is reduced yet the minimum will always be 0.

' f *(q m) m q Eq. 5.9

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where f theoretical actual

For the current project the Indirect Lognormal Shortcut method was used

q’ = aqb

b a = m CV2 +1 f x CV2 +1 m Eq. 5.10

b = ln (f x CV2 + 1) ln (CV2 + 1) 2 f = theoretical CV = 2 actual m

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Appendix 8 – Resource Classification Definitions

The following is an extract from the CIM Definition Standards for Mineral Resources and Mineral Reserves, adopted May 10, 2014.

Mineral Resource

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.

The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

Material of economic interest refers to diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals.

The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of Modifying Factors. The phrase ‘reasonable prospects for eventual economic extraction’ implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction. Assumptions should include estimates of cutoff grade and geological continuity at the selected cut-off, metallurgical recovery, smelter payments, commodity price or product value, mining and processing method and mining, processing and general and administrative costs. The Qualified Person should state if the assessment is based on any direct evidence and testing.

Interpretation of the word ‘eventual’ in this context may vary depending on the commodity or mineral involved. For example, for some coal, iron, potash deposits and other bulk minerals or commodities, it may be reasonable to envisage ‘eventual economic extraction’ as covering time periods in excess of 50 years. However, for many gold deposits, application of the concept would normally be restricted to perhaps 10 to 15 years, and frequently to much shorter periods of time.

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Inferred Mineral Resource

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.

An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed PreFeasibility or Feasibility Studies, or in the Life of Mine plans and cash flow models of developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43-101.

There may be circumstances, where appropriate sampling, testing, and other measurements are sufficient to demonstrate data integrity, geological and grade/quality continuity of a Measured or Indicated Mineral Resource, however, quality assurance and quality control, or other information may not meet all industry norms for the disclosure of an Indicated or Measured Mineral Resource. Under these circumstances, it may be reasonable for the Qualified Person to report an Inferred Mineral Resource if the Qualified Person has taken steps to verify the information meets the requirements of an Inferred Mineral Resource.

Indicated Mineral Resource

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

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Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Pre- Feasibility Study which can serve as the basis for major development decisions.

Measured Mineral Resource

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.

Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.

A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade or quality of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability of the deposit. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit.

Modifying Factors

Modifying Factors are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

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