BOX MINE - GOLDFIELDS PROJECT Uranium City, Saskatchewan, Canada

TECHNICAL REPORT

PURSUANT TO NATIONAL INSTRUMENT 43-101

OF THE CANADIAN SECURITIES ADMINISTRATORS

Prepared For

GLR RESOURCES INC.

Prepared By

Bikerman Engineering & Technology Associates, Inc.

Old Lyme, Connecticut

June 2007

Revision 1 - May 12, 2008

Dr. Michael Bikerman, Ph.D., Professional Geologist

David Bikerman, Engineer of Mines

Thomas McGrail, Engineer of Mines

Dan A. Mackie, Professional Engineer BIKERMAN ENGINEERING & TECHNOLOGY ASSOCIATES, INC.

Technical Report / Form 43-101F1

Table of Contents

1.0 COVER PAGE...... 1

2.0 TABLE OF CONTENTS ...... 2

3.0 SUMMARY ...... 8 3.1 Location, History, and Project Description...... 8 3.2 Infrastructure ...... 9 3.3 Geology and Mineralization ...... 11 3.4 Mineral Resources ...... 12 3.5 Mining ...... 13 3.5.1 Pit Design and Mineral Reserves ...... 13 3.5.2 Mine Planning ...... 14 3.5.3 Mine Operating Cost ...... 16 3.5.4 Mine Capital Costs ...... 18 3.6 Metallurgy ...... 18 3.7 Processing ...... 20 3.8 Environmental Permitting ...... 27 3.9 Human Resources and Administration ...... 28 3.10 Project Economics ...... 29 3.11 Other Relevant Data ...... 31 3.12 BETA Comments as Independent Reviewer ...... 31

4.0 INTRODUCTION AND TERMS OF REFERENCE ...... 33

5.0 DISCLAIMER & RELIANCE ON OTHER EXPERTS ...... 35

6.0 PROPERTY DESCRIPTION AND LOCATION ...... 37 6.1 Location ...... 37 6.2 Property Description ...... 37 6.3 Mineral Dispositions ...... 39 6.4 Site Description ...... 40

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 2 7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 43 7.1 Accessibility ...... 43 7.2 Climate and Meteorology ...... 45 7.3 Local Resources ...... 47 7.4 Existing Land Uses ...... 55 7.5 Physiography...... 57

8.0 HISTORY ...... 60

9.0 GEOLOGICAL SETTINGS ...... 63 9.1 Regional Geology ...... 65 9.2 Structural Geology ...... 68 9.3 Metamorphism ...... 69 9.4 The Beaverlodge Area ...... 69

10.0 DEPOSIT TYPE ...... 73

11.0 MINERALIZATION ...... 74

12.0 EXPLORATION...... 76

13.0 DRILLING ...... 79

14.0 SAMPLING METHOD AND APPROACH ...... 85

15.0 SAMPLE PREPARTION AND ANALYSES ...... 89

16.0 DATA VERIFICATION ...... 92

17.0 ADJACENT PROPERTIES ...... 100

18.0 METALLURGY AND PROCESSING ...... 107

19.0 MINERAL RESOURCE ESTIMATES ...... 130

20.0 INFRASTRUCTURE ...... 163

21.0 ORE RESERVES AND MINING ...... 181

22.0 OPERATING COST ...... 211

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 3 23.0 ENVIRONMENTAL AND PERMITTING ...... 230

24.0 HUMAN RESOURCES AND ADMINISTRATION ...... 237

25.0 CAPITAL COST ...... 239

26.0 FINANCIAL ANALYSIS ...... 249

27.0 OTHER RELEVANT DATA AND INFORMATION ± DESIGN SPECIFICATIONS ...... 262

28.0 INTERPRETATION AND CONCLUSIONS ...... 269

29.0 RECOMMENDATIONS ...... 270

30.0 REFERENCES ...... 271

31.0 CERTIFICATES ...... 276

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 4 GLOSSARY OF NON-GEOLOGICAL TERMS AND ABBREVIATIONS

"AMEC" AMEC Americas Limited

³%(7$´ Bikerman Engineering & Technology Associates, Inc.

³&,0´ Canadian Institute of Mining, Metallurgy, and Petroleum

³'0$´ Dan Mackie Associates

³(5'´ Explosives Regulatory Division of the Ministry of Natural Resources Canada.

"GLR" GLR Resources Inc.

"KA J" K.A. Jensen, B.Sc., P.Geo.

"RMI" Resource Modeling Inc.

"TSE" The Toronto Stock Exchange

"TSL" Technical Service Laboratories

³80$´ UMA Engineering Ltd.

GLOSSARY OF TERMS RELATING TO MINING AND MINERAL PROPERTIES

³$$´ Atomic Absorption analytical method

³$1´ Ammonium Nitrate

³$1)2´ Ammonium Nitrate ± Fuel Oil Explosive

"ASL" Above mean sea level expressed in metres (feet)

³DX´ Gold

"DDH" Diamond drill hole

"EM" Electromagnetic geophysical survey method

"FA" Fire Assay analytical method

"g/t" grams per tonne

³* $´ General and Administrative Costs

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 5 "HEM" horizontal loop electromagnetic geophysical survey method

"HLEM" horizontal loop electromagnetic geophysical survey method

³+3´ horsepower

³,55´ internal rate of return

"km" kilometres

"m" metres

"mag" total field magnetic geophysical survey

³00(5´ Metal Mining Effluent Regulations

³139´ net present value

³165´ net smelter return

"NTS" National Topographic Survey

"ounce" troy ounce

³R]´ troy ounce

"opt" troy ounces per ton

"ppb" parts per billion

"ppm" parts per million

"RCD" reverse circulation drilling

³70)´ Tailings Management Facility

"VEM" vertical electromagnetic geophysical survey method

³:$'´ weak acid dissociable

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 6 CONVERSION FACTORS

Length 1 micron = 1 micrometer 1 millimeter = 1000 micrometers = 0.0394 inches 1 centimeter = 0.394 inch 1 meter = 3.281 feet 1 kilometer = 0.6214 miles

Area 1 hectare = 100m x 100m = 10,000m2 1 square kilometer = 100 hectares = 247.1 acres = 0.386 square miles

Mass 1 kilotonne = 1,000 metric tonnes 1 metric tonne = 0.984 long tons 1 metric tonne = 1.1023 short tons (1 short ton = 2,000 lbs) 1 metric tonne = 1,000 kilograms 1 kilogram = 1,000 grams 1 kilogram = 2.205 pounds 1 kilogram = 35.274 ounces = 32.151 troy ounces

1 troy ounce = 31.103 grams 1 troy ounce per short ton = 34.286 grams per tonne

1 part per million = 1 gram per tonne = 1,000 parts per billion 1 milligram = 0.001 gram = 35.274 x 10-6 ounces 1 milliliter = 0.001 liter = 0.352 fluid ounces

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 7 and the mine closed August 15, 1942. The mine produced a total of 64,066 ounces of gold from 1,418,320 tons of ore at an average grade of 0.0452 ounce per ton.

3.2 Infrastructure

The site buildings will consist of structural steel facilities comprised of girders, beams, columns, girts and bracings prefabricated in transportable lengths and sizes to facilitate field erection. The buildings will have metal cladding sides and roofs. The roofs will be sloped at 1/12. R20 Insulation will be provided where required. The various buildings and there dimensions are as follows: x Mill Process, 90m L x 30m W x 12m H x Flotation Tailings Filter Cake Load-out 30m L x 11m W x 12m H x Maintenance and Office Complex Building 30m L x 30m W x 8m H x Explosive Plant 32m L x 16m W x 8m H x Ammonium Nitrate Prill Storage 42m L x 30m W x 11m H x Pump House 3m L x 3m W x 3m H x Crusher Buildings 16m L x 8m W x 6m H

A fully serviced camp will be located in Uranium City. Services will include electrical power, potable water, sewage collection, oil and electrical heating systems, town fire truck with sprinklers on site.

To avoid the logistical difficulties associated with requiring various types of fuels, all stationary and mobile equipment will be specified to operate with only diesel fuel. The following table provides an approximation of both fuel requirements and fuel storage requirements.

Consumer Annual Fuel Requirement 9 Month Storage (Liters) Requirement Mobile Mining Fleet 2,500,000 1,875,000 Ancillary Mining Equipment 250,000 187,500 Light Vehicle 150,000 112,500 Carbon Regeneration Kiln 80,000 60,000 Strip Solution Boiler 80,000 60,000 Refinery Wabi Furnace 50,000 37,500 Emergency Generator 35,000 26,250 Heating Furnaces 30,000 22,500 Totals 3,195,000 2,396,250

The above table indicates that the mine fuel tank farm must have a minimum capacity of 2,396,250 liters or 528,000 gallons. GLR has acquired fuel tankage equivalent to approximately 1,500,000 liters. Additional tankage will be required to meet requirements. A long term fuel supply contract will be negotiated with a fuel supplier; under the terms of

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 9 this contract, the supplier will bear the cost of the equipment for this facility and GLR will bear the costs of construction and equipment installation. Generally, suppliers of diesel are amenable to providing fuel storage capacity and installation in exchange for long term contracts.

The explosive magazines will be located south-east of the Box Deposit operation in an approved area easily accessible yet sufficiently remote from existing or planned structures. Magazine location and construction will follow construction standards and the Quantity-Distance Tables. These Tables define the applicable construction requirements for powder magazines with regard to location of the site as well as minimum distances between storage locations within the mine site. Separate explosive magazines will be required for the Emulsion explosives, the Detonators and the Boosters associated with the initiation system. Subject to final permitting requirements, the explosive magazine compound will be an area 75 meters by 25 meters. Due to the remoteness of the mine site and its limited accessibility, the permitting process should not require continuous security coverage; GLR may install appropriate security camera coverage and enclosed with 3 meter high cyclone fence.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 10 3.3 Geology and Mineralization

The Box Mine deposits is a complex of auriferous quartz vein sets infilling fractures caused by several shearing and faulting events. The host rock is composed of a suite of metasedimentary lithological units, which has been subjected to various alteration processes common to hydrothermal fluid migration.

The Box orebody is contained in a predominantly red granitic sill-like body 760 m long and averaging 55 m wide. This body and enclosing rocks strike northeast and dip 42° to the southeast and is located on the northwestern limb of the Goldfields syncline. The granitic body is bounded to the northwest by quartzite and granitized quartzite; to the southeast it passes gradationally into granitized quartzite. The boundary is best marked by a decrease in volume of quartz veins. The granite comprises almost equal amounts of quartz and pink-red feldspar. It contains no ferromagnesian minerals except chlorite which occurs along small fractures. In thin section, the feldspar comprises microcline, microcline-perthite and albite.

The granite contains a number of dyke-like bodies of chlorite-quartz schist (altered amphibolite). Their relative emplacement age is controversial. Cooke (1937) and Beavan (1938) argue the amphibolites are post-granite. Others, e.g. Christie (1952), favour a pre-granite age. The origin of the granite is not entirely clear. Most workers suggest a replacement (metasomatic) origin e.g. Swanson (1945), Christie (1952). Beavan (1938) describes a quartz-albitite pipe-like body near the No. 1 shaft. The pipe, approximately 1.8 m diameter, has the appearance of a zone of intense alteration. It comprises predominantly albite. High gold values are apparently associated with this pipe. The granite is cut by a "stockwork" of quartz veins. An older set of quartz veins strikes northeasterly and dips gently to the southeast. A younger and more prominent set of quartz veins strikes NNW and dips westerly at 60 to 80°. Associated with these veins are numerous quartz-filled tension fractures striking NNE and dipping 55° to 66° west. Beavan (1938) and Cooke (1937) describe several other minor sets of veinlets and fractures. Most of the veins are less than 8 cm wide but they may attain a width of 25 cm. They occur throughout the granitic body but are particularly well developed adjacent to schistose "inclusions". Approximately 100 m southwest of No. 2 shaft two ESE trending breccia veins cross the granite. These vuggy veins are filled with quartz and calcite.

The ore minerals occur in the vein quartz and, to a much lesser extent, in the granite. Native gold is comparatively rare. It is not uniformly distributed through the granitic body but forms higher grade ore along the hanging wall. Gold occasionally occurs along chlorite-lined fractures in the granite and is locally conspicuous along similar fractures in the albitite pipe. It is most commonly found in chloritic fractures within coarse, "lumpy" pyrite in the NNW trending main set of quartz veins. Sulphide minerals form approximately 3 percent of the ore. Pyrite is the most predominant sulphide. Cooke (1937) reports one sample of pyrite assayed 9 percent gold. Dark, iron-rich sphalerite (commonly with exsolved chalcopyrite blebs) is often associated with galena in the veins. Rare arsenopyrite and tourmaline are reported in albite-pyrite veinlets (Beavan, 1938). Christie and Kesten (1949) and Christie (1952) report the presence of radioactive fractures in the granite. The

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 11 fractures contain chlorite and, in one place, pitchblende. These fractures cut the gold-bearing quartz veins and are, therefore, of later age. The radioactive fractures are more numerous near No. 2 shaft where the granite is a striking brick-red color.

3.4 Mineral Resources

Mineral Resources of the Box deposit, as tabulated by BETA are summarized below:

BOX Measured, Indicated and Inferred Resources Gold MEASURED INDICATED MEASURED + INDICATED INFERRED Cutoff Tonnes Au Ounces Tonnes Au Ounces Tonnes Au Ounces Tonnes Au Ounces g/t (000) g/t (000) (000) g/t (000) (000) g/t (000) (000) g/t (000) 0.125 2,787 1.47 132 16,460 1.20 635 19,247 1.24 767 5,229 0.71 120 0.250 2,401 1.68 129 14,500 1.34 623 16,901 1.39 753 3,710 0.93 111 0.375 2,013 1.94 126 12,284 1.52 601 14,296 1.58 727 2,698 1.17 101

The Athona deposit is considered to be part of the Goldfields Project. Mineral Resources for the ATHONA deposit, as tabulated by BETA are summarized below:

Athona Indicated and Inferred Resources Go ld INDICATED INFERRED Cutoff Tonnes Au Ounces Tonnes Au Ounces g/t (000) g/t (000) (000) g/t (000) 0.125 13,870 0.79 351 3,230 0.62 65 0.250 10,878 0.95 333 2,198 0.83 59 0.375 8,607 1.12 310 1,687 0.99 54

At current economic conditions (Gold price of $650, operating cost of US$5.00, and 93% recovery), the internal cutoff grade is 0.25 g/t.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Mineral resources, as reported, include minable reserves, i.e. reserves are a subset of resources.

The Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) definition of a Mineral Resource is "a concentration or occurrence of natural, solid, inorganic, or fossilized organic material in or on the Earth's crust in such a form and quantity and of such a grade or quality that it "has reasonable prospects for economic extraction." Using this definition of a Mineral Resource, BETA was able to identify material within the Box Mine deposit that may have some likelihood of being economically extractable.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 12 3.5 Mining

Mining of the Box Mine Project is by open-pit methods utilizing mid-size earth moving equipment. Feasible pit shapes complete with haul-road designs have been modeled based on: the disposition of grade values in the resource model; economic parameters such as gold price and mining and operating costs; and technical parameters such as pit slopes and gold recovery. Silver values are not taken into consideration in the mine model.

Minable reserves for the Box project are based upon the measured and indicated resources in the computerized 3-D block model described in Section 6.0. Minable pit shapes optimize the extraction of the mineral inventory given the economic and technical parameters determined for this feasibility. The pit optimization procedures utilized in definition of the final pit design take the following factors and assumptions into consideration: x gold price of $US 525 net per ounce (net of royalty of 2% NSR after credit); x process recovery of 93% of the contained gold values; x mining cost of $US 2.12 per tonne of ore moved; x mining cost of $US 1.30 per tonne of waste moved; x crushing cost of $US 1.31 per tonne of ore; x processing and laboratory cost of $US 4.63 per tonne of ore; x G & A and social cost of $US 1.86 per tonne of ore; x environmental cost of $US 0.21 per tonne of ore; x overall pit slope of 42 degrees on footwall and 65 degrees on hanging wall; x minimum pit bottom of 18 meters; x six-meter bench mining heights; x bench face slope of 75 degrees; x ultimate haul road grade of no greater than 10%; and x total haul road width of 24m with berms.

A Lerchs-Grossman algorithm was utilized to optimize the pit. This algorithm provided a basic pit shape outline that served as the basis for final pit design.

3.5.1 Pit Design and Mineral Reserves

Total proven and probable minable reserves are 10.997 million tonnes of ore at an average grade of 1.70 grams per tonne, containing 601,007 thousand ounces of gold and 558,937 ounces of recoverable gold, minable at a strip ratio of 3.16 to 1. Proven Reserves total 1,683,717 tonnes grading 2.025 g/tonne containing 109,619 ounces gold and 101,945 recoverable ounces. Probable Reserves total 9,313,283 tonnes grading 1.641 g/tonne containing 491,436 ounces gold and 457,035 recoverable ounces. The estimate is based on diluted, proven and probable reserves located within the Box pit

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 13 as the volume of material required to fill these structures is insignificant; however, knowledge of the location of this infrastructure is required to avoid accidents.

To minimize the disruptive impact of these pre-existing stopes on mine design and scheduling, these large voids will be filled prior to their interception by the open pit mining. The blasthole drills will be used to intercept and confirm the dimensions of these underground stoping voids. These drills will then be required to complete a pattern of drill holes that will be used to develop a drop raise connecting these voids to the surface (drop raises use vertical crater retreat blasting methods to develop near vertical openings connecting 2 points where top access is available). These voids will then be backfilled by trucks dumping low grade ore material hauled from within the open pit; the use of this low grade material will minimize dilution during the subsequent extraction of ore within these areas.

Operating Ready Shifts Daily Hourly Schedules days/year mtpd mtph Overall 360 24 x 7 5000 208 Primary 360 12 x 5 14000 1200 Crushing Fine Ore 360 12 x 7 10000 416 Crushing Milling 360 24 x 7 5000 208 Gravity 360 24 x 7 5000 208 Processing Concentrate 360 24 x 7 187.2 7.8 Leaching Elution 360 24 x 7 187.2 7.8 Gold pour 360 Weekly

The mine operates three shifts per day, seven days per week. Table 21-8 shows the calculation of working days and number of shifts per day for the mine equipment.

The following feasible mining schedule is utilized in this analysis.

Year Ore Mined Ore Grade Waste Mined Strip Ratio Total Mined (tonnes) (g/t Au) (tonnes) (tonnes) 1 1,800,000 1.713 8,400,000 4.67 10,200,000 2 1,800,000 1.612 8,463,000 4.70 10,263,000 3 1,800,000 1.597 6,742,000 3.75 8,542,000 4 1,800,000 1.577 6,130,000 3.41 7,930,000 5 1,800,000 1.805 3,568,000 1.98 5,368,000 6 1,800,000 1.867 1,453,000 0.81 3,253,000 7 197,000 1.956 49,000 0.25 246,000 TOTAL 10,997,000 34,805,000 3.16 45,802,000

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 15 3.5.3 Mine Operating Cost

Operating and maintenance costs are estimated for a 1.8 million tonne per year operation. Operating cost is presented for each of the following categories: ‡ Category $/tonne General and mine administration 1.86 Mining of ore 2.12 Mining of waste 1.30 Crushing and stacking 1.31 Processing (including assay laboratory) 4.63 Environmental 0.21

The operating cost is itemized into cost components for labor (supervisory, operating & maintenance); operating consumable supplies; maintenance supplies; and power generation.

The estimated operating cost are expressed in 1st quarter 2007 U.S. Dollars without escalation. Consumption levels of major reagents are based on review by Dan Mackie Associates of metallurgical testwork performed by Lakefield Laboratories of Lakefield, Ontario, Canada, and Gekko Systems of Victoria Australia. Labor costs and social burdens are expected costs of skilled laborers in Uranium City, and meet current legal requirements. Power costs are based on detailed estimates for all electrical installations and assume 100% grid-supplied power at the Goldfields site. Where available and applicable, actual costs from current and nearby operations are utilized. Other sources for costs include estimates provided by Caterpillar Equipment, and Western Mine Engineering's cost estimating guide.

The Box Mine operation will employ a total of 116 persons. The following tables give summary details of the operating costs.

G&A Summary Unit Annual Cost Cost Corporate office $0.172 310,000 Mine Site $1.672 3,009,950 Social Program $0.015 27,300

Total $1.860 3,347,250

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 16 Mining Operating Cost Summary ORE Unit Cost Annual Cost Mine Labor $0.898 1,616,875 Maintenance Labor $0.323 581,250 Equipment Expense $0.604 1,087,426 Mine Consumables $0.006 9,900 Maintenance Consumables $0.017 30,000 Explosives $0.222 398,880 Major Repairs $0.100 90,000

Totals $2.119 3,814,331

WASTE Unit Cost Annual Cost Mine Labor $0.483 2,754,375 Maintenance Labor $0.131 743,750 Equipment Expense $0.483 2,750,896 Mine Consumables $0.002 9,900 Maintenance Consumables $0.005 30,000 Explosives $0.182 1,034,560 Major Repairs $0.016 90,000

Totals $1.301 7,413,482

Crushing Cost Summary Unit Cost Annual Cost Labor $0.750 1,350,000 Crushing Consumables $0.397 714,600 Power $0.159 286,788

Totals $1.306 2,351,388

Processing Cost Summary Unit Cost Annual Cost Process Labour $0.569 1,025,000 Assay Lab Labour $0.322 580,000 Maintenance Labour $0.386 695,500 Consumables $2.830 5,094,490 Power $0.500 900,799 Equipment $0.017 30,860

Totals $4.626 8,326,649

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 17 Environmental Cost Summary Unit Cost Total Cost Labor $0.090 162,500 Consumables $0.044 80,000 Power $0.074 132,300 Totals $0.208 374,800

3.5.4 Mine Capital Costs

The capital cost estimate is based on quotations received by BETA from GLR and Dan Mackie Associates from manufacturers, as well as from trade publications, Machinery Trader, and historical data from current operations. The cost estimate is considered accurate to within +/- 15% at the summary level and is expressed in US dollars.

Total capital cost is $46.3 million. A contingency of $4 million is included in the capital estimate. Working capital is estimated at $3,000,000, to be repaid at the end of mine life.

GLR's Goldfields Box Mine Project Capital Costs Summary

Mining and Mine Support Equipment$ 11,102,000 Crushing & Conveying$ 5,037,748 Process Plant & Refinery$ 10,848,446 Electrical Generation and Distribution$ 1,805,000 Tailings Facility$ 1,840,400 Buildings and Support Systems$ 2,300,000 E. P. C. M.$ 2,008,000 Installation, Electrical and Piping$ 7,339,511 Contingency$ 4,015,858 TOTAL$ 46,296,963

3.6 Metallurgy

Test work has indicated that the recoverable values are finely disseminated with some nugget gold. There are no metallurgical or environmental hindrances associated with the mineralization in terms of recovery, even though some of the gold is associated with pyrite. Extensive test work dating back to 1936 has determined that the gold can be recovered by a variety of gravity and leaching methods. The feasibility flow sheet calls for gravity, flotation, and concentrate leaching methods. The amount of test data conducted is sufficient to design the processing facilities.

Work began on the current flow sheet in late 1998 and continued through to 2005 at Gekko Systems in Australia and Lakefield in Canada, using the Gekko test protocol. Primary and cleaner gravity recovery in Gekko inline pressure jigs with scavenging in a Falcon concentrator gave recoveries in

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 18 WKHPLG¶VIRURUHJURXQGWRD3RIPLFURQVIROORZHGE\UHJULQGDQGF\DQLGDWLRQRI concentrates. Concentrates produced were tested for leaching in the Gekko inline leach reactor with the gold extracted by direct electrowinning. Cyanide destruction, using peroxide, was tested by Gekko.

Test work for the Box ore was originally conducted by Cominco, when the plant was operated from 1939 to 1942 with underground ore. Whole ore cyanidation with 24-hours retention and Merrill- Crowe precipitation on zinc was employed from ore ground to 55% - 200 mesh. Recovery is reported as between 94 and 98%.

In 1981, to compare heap leaching with flotation, Dawson Laboratories conducted leach tests on ore crushed to ô´DQGIORWDWLRQWHVWVRQRUHJURXQGWR-200 mesh. Recoveries were about 20% for the heap leach samples and 92 to 97% for the flotation test.

In 1988 Casmyn Engineering conducted test work at ORTECH that showed that gravity concentration was effective in recovering gold. In 1988, a simulated vat leach scoping test conducted by INNOVAT Limited showed that RUHFUXVKHGWRó´\LHOGHGUHFRYHU\ in 1994-5, Richard C. Swider Consulting Engineers Limited designed and supervised a test program at Lakefield Research on behalf of Greater Lenora Resources Corporation. Work was done on both the Box and Athona ores, including bulk samples at depth and at-grade samples. Work indices were determined, as well as the suitability and design parameters for semi-autogenous grinding.

Flotation of spiral tailings demonstrated effective concentration of gold values. Cyanidation of gravity concentrates was also demonstrated in the Swider program. Some liquid-solid separation work was done for environmental purposes as well as pore water determination.

Under the supervision of INNOVAT Limited in 1997, leaching of spiral classifier tailings and whole ore was conducted at ORTECH and Lakefield. Both programs indicated economical recoveries on ore crushed to 10 mesh.

A program in 1995-6 was conducted at Lakefield Research Limited with input from Pocock Industrial Inc. to determine settling and filtration characteristics of the ore and tailings. Ore characterization studies were made on whole rock, gravity tailings, flotation tailings, and cyanidation tailings, including EPA acid-base accounting, EPA leachate extraction, and size distribution of residues.

Acid-Base accounting and cyanide destruction tests are continuing to back up the Environmental Impact Statement as well as further assurance that targets will be met. Current test work involves using the INCO SO2/Air process for cyanide destruction to confirm results and reagent requirements.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 19 3.7 Processing

Ore processing at the Goldfields Site employs straightforward, proven technology, based on extensive test programs. Ore is crushed in three stages to feed the process plant that consists of a primary ball mill, gravity plant, flotation of gravity tailings, concentrate regrind ball mill, and leaching of concentrates from the gravity and flotation circuits. The main principle for the gravity recovery has been adapted by Gekko Systems Pty Ltd. of Australia and is currently being employed in Australia and several African countries. This system will be enclosed in a heated building at the Goldfields Project.

Selection of the gravity circuit is based on the ability of the equipment to recover pyrites in the ore along with the precious metals values, thus isolating the potential for acid generation by rejecting most of the pyrite to underwater tailings at Vic Lake. Similarly, cyanidation is reduced to ten percent of the ore processed.

The primary crushing facility can receive two 100 ton trucks at a time. Primary crushing facilities are located in a covered, unheated building. Ore is delivered by rear dump truck through two stationary grizzlies into two 100 ton capacity structural steel hoppers protected by abrasion-resistant liners. A common pneumatic rock breaker is positioned to deal with oversize rock at each grizzly when required. Nominal rate of feed is 450 metric tons per hour to each crusher. Product size is 80% passing 150 mm. Product is collected on two belt conveyors, discharging to a common lift belt conveyor. Each collecting conveyor employs a belt magnet at its head pulley to protect against tramp steel penetrating successive belt conveyors and crushers.

A radial stacker deposits coarse ore in an open, kidney-shaped pile that is 28 m high. Live storage amounting to 22,000 metric tons is reclaimed with two apron feeders located in a concrete tunnel located beneath the storage pile. Discharge from the apron feeders is collected onto the secondary crusher feed conveyor. Dead storage is bulldozed into the live storage area as required.

Secondary crushing is done in two stages at a nominal feed rate of 400 metric tons per hour, in an unheated, pre-engineered steel frame building. Ore is received from coarse ore storage into a 100 ton surge bin, from which it is fed by a vibrating feeder to a vibrating, double deck screen. Top deck of the screen has 50 mm openings, while the bottom has 25 mm openings, providing 80% minus 18.4 mm to tertiary crushing. Undersize is directed by chute to the secondary screen feed conveyor.

A secondary cone crusher operates in closed circuit with the vibrating screen. Ore discharged from the crusher is circulated to the surge bin ahead of the screen three belt conveyors. Crushed ore from the secondary circuit is carried by conveyor to the tertiary double deck vibrating screen. The top deck has 19 mm openings, while the bottom deck has 9 mm openings. Oversize is fed to a tertiary cone crusher, which delivers crushed ore to a common conveyor that also receives undersize from the vibrating screen. This product is delivered to a fine ore storage area by lift conveyor.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 20 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 21 Storage of fine ore is in a conical pile, measuring 24 m high by 73 m diameter. The live storage area, measuring about 30 m in diameter is covered. Suspension of the head end of the feed conveyor and cover frame is by four trusses anchored to concrete footings. Estimated at 10,000 metric tons of live storage, the fine ore is reclaimed by two belt feeders that deliver the ore to a single collecting conveyor that feeds the process plant. Dead storage is pushed by bulldozer into the live storage area as required. Feed to the process plant is controlled by a belt scale on the mill feed conveyor, which controls the speed of the belt as well as the speed of the feeders.

All remaining process facilities are housed in a pre-engineered building. Primary grinding is designed to reduce material from minus ten millimeters (-10 mm) to 80% passing a 350 micron screen, at a new ore feed rate of 5000 metric tons per day. A ball mill, operates in closed circuit with a vibrating screen that returns oversize to the feed chute of the mill by means of belt conveyors. Discharge through the mill trommel passes through a pair of riffles, one operating and one standby, for collection of nugget gold. The riffles discharge to the vibrating screen with 4 mm openings. Circulating conveyors return oversize from the screen to the feed end of the ball mill. Screen undersize is taken into a sump with two Warman slurry pumps, one operating and one standby. The pumps feed a cyclopac for distribution to the gravity processing circuit through a 250 mm pipe. Fundamental process control of the milling circuit is via density and flow measurement in the feed line to the cyclones.

The gravity recovery circuit has been designed to recover free gold and sulphides as they are liberated in the grinding circuit. Circulation through the gravity circuit is through a cyclopac of 6 - 400CVX cyclones. Overflow is directed to a collection launder and piped to the flotation circuit. Underflow, which has roughly maximum 500 micron-sized ore particles, is collected in a launder and distributed to 6 Gekko IPJ2400 inline pressure jigs, each with pulsing powered by 5 HP gear motors. Tailings from the jigs report back to the mill feed by gravity flow. Concentrate is pumped to a pair of Gekko IPJ 1000 cleaners.

Flush water for all jigs is maintained by using a head tank with flow adjusted by manual valves. Water is provided from the reclaim water circuit in the leach plant. Concentrate from the cleaner jigs reports to a sump from which it is pumped to a thickener in the regrind area. Tailings from this jig are returned by gravity to the primary mill discharge sump. The overall gravity circuit is designed for an average mass pull of 6% with, when combined with the flotation circuit concentrate, a maximum of 10% mass pull of plant feed at 5000 metric tons per day.

.Cyclone overflow from the gravity circuit reports to a flotation conditioning tank, where reagents are added and the pulp conditioned prior to flotation. Six m3 Denver DR Flotation roughers are used followed by 1.4 m3 cleaners. Tailings from roughers and cleaners flow by gravity to a pump box, which delivers the waste to a belt filter via pipeline. The reagents used in the Flotation Circuit will include potassium amyl xanthate and R208 as collectors and MIBC for the frothing agent. The overall flotation circuit is designed for an average mass pull of 4% with, when combined with the gravity circuit concentrate, a maximum of 10% mass pull of plant feed at 5000 metric tons per day.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 22 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 23

Tailings from the flotation circuit are de-watered in a belt filter. Filter cake, with a target of 10% moisture, is collected on a cross belt conveyor, which transfers the cake to a discharge belt conveyor. This material is conveyed to a surge bin located next to the process building. The 200 metric ton capacity bin has an air-operated gate, which opens upon positioning of a 100 ton truck and closes automatically after the truck is full. Waste tailings are then delivered by truck to the waste dump area. This disposal option is viable due to the benign characteristics of the flotation circuit reagents, as reagents will only be found in trace amounts within the entrained solution of this filter cake. This tailing filter cake will have an approximate moisture content of less than 10.0%, i.e., the solution recovered for recycling will therefore approximate +90.0%. This lost solution will require replenishment from the process water source.

In preparation for leaching, the 350-micron material is ground to a P80 of 50 microns at a new ore feed rate of 500 metric tons per day. Concentrate is delivered from both the gravity and flotation circuit at about 45 % solids by weight. A 15 m diameter high-rate thickener with 10 HP rake drive increases the feed density to the regrind mill to 60-70% solids by weight. This ball mill is nominally 1900 mm x 3000 mm and is powered by a 250 HP motor. The mill operates in closed circuit with a pair of 300 mm cyclones, one operating and one standby. Circulating flow, which is 250% of new feed, is provided by a 2 x 3 SRL pump working from a pump box located beneath the mill discharge trommel. Mill control is achieved by using density and flow measurement with a variable speed motor on the circulating pump. CaO is added to the thickener feed to control the pH of the leach circuit with flocculent added as required. Overflow from the thickener reports to the reclaim water tank for distribution within the Primary Grinding, Gravity and Flotation circuits.

Regrind and feed thickener and leach circuits are located inside the process plant. Leaching is located in an area bounded by concrete block walls sized to contain complete spillage of one agitated tank. Carbon-in-leach uses activated coconut shell carbon loaded to 10-20 kg/metric ton in the circuit. Levels of pH are controlled to above 10.0 with addition of CaO in the thickener. NaCN is added to the first of four agitated tanks, measuring 8 m diameter by 9 m high, maintaining an operating level of 5 g/L of NaCN. Propeller agitators are used. Carbon is advanced from tank to tank, counter-current to the slurry flow with the use of open impeller pumps, operating once per shift. The carbon is pumped to a dewatering vibrating screen with the oversize reporting to the carbon circuit and the underflow returning to the final leach vessel. A safety screen identical to the dewatering screen but with a finer mesh is used to prevent carbon losses in the final leach tank discharge.

Tailings from the leach or cyanidation circuit are less than 0.20 g/L WAD cyanide. The objective or target for destruction of cyanide is to reduce WAD cyanide levels to less than 0.5 mg/L. This will be achieved through the use of aeration methods which are designed to both reduce WAD cyanide concentrations and enhance natural evaporation rates, within the Tailings Management Facility (TMF); this aeration treatment will under normal operating conditions, allow this TMF to operate with zero discharge of effluent to the environment. In the event of upset or adverse climatic conditions, a cyanide destruction facility is provided to ensure discharge compliance with Metal Mining Effluent Regulations (MMER) for discharge of tailings effluent. This facility will use

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 26 Na2S2O5 with a Cu2SO4 catalyst and air in a 5 m diameter x 6 m high agitated tank. A propeller agitator with two sets of blades is used.

Tailings are thickened in a 15 m diameter high rate thickener. Target thickening is to 60-70% solids. Underflow is withdrawn and delivered to the tailings dam by insulated pipe. Thickener overflow is recycled to the regrind and leach circuit.

Activated carbon from the leach circuit is washed with HCL or H2SO4 in a polypropylene vessel to remove calcium buildup. Stripping of gold values from the carbon is done in a carbon steel elution vessel and using 2 % NaOH and 2% NaCN in barren solution. Pregnant solution from the elution vessel reports to a polypropylene electrowinning tank, where the precious metals are collected onto steel wool cathodes, with barren solution returning to a holding tank.

Sludge washed from the cathodes is pumped to a plate-and-frame filter. Filtered cake is dried in an electric oven, and then smelted into doré in a propane-fired Wabi furnace. Electrowinning, filtering, drying and smelting is done in a secure area with doré bars stored in a vault.

3.8 Environmental Permitting

The GLR Goldfields Box Mine Project, due to its location, is under the jurisdiction of both federal and provincial regulatory agencies. The Environmental Assessment Branch of the Saskatchewan Environment & Resource Management (SERM) ministry is empowered to regulate the operation of WKLVSURMHFWXQGHUWKHWHUPVRIµ7KH(QYLURQPHQWDO$VVHVVPHQW$FW´$GGLWLRQDOO\GXHWRWKH SURMHFW¶VSRVVLEOHLPpact on aquatic habitat, the Department of Fisheries and Oceans (DFO), under the terms of the Aquatic Habitat Protection Permit, maintains jurisdiction, as a regulatory agency. */5DQWLFLSDWHVWKDWZDWHUTXDOLW\SDUDPHWHUVDVGHILQHGE\WKH³0HWDO0LQLQJEffluent 5HJXODWLRQV´ 00(5 RIWKH)HGHUDO)LVKHULHV$FWZLOOGHILQHWKHGLVFKDUJHSDUDPHWHUVIRU effluents generated by the future operations of the Box Mine Project.

In order to simplify and facilitate the environmental review process, under the terms of Canada- Saskatchewan Agreement on Environmental Assessment Cooperation, the Ministry of Environment (Saskatchewan) is designated as the Coordinating Regulatory Agency. In this role as Coordinator, the Ministry of Environment (Saskatchewan) assesses the SHWLWLRQHU¶VSURMHFW¶VSRWHQWLDOLPSDFWVRQ the environment and subsequently solicits the participation of the appropriate Regulatory Agencies, in the review process.

*/5PXVWREWDLQDSSURYDORIWKH*ROGILHOG3URMHFW¶V(QYLURQPHQWDO,PSDFW6WDWHPHQW7KH approval of this document is of particular importance, as this approval is generally a prerequisite of the additional approvals and permits required for this project. Numerous investigations have defined the probable impacts of this project on the environment. A minimum of two documents have been previously submitted to both the Federal and Saskatchewan Environmental Regulatory Agencies in reference to the GLR Goldfields Box Mine Project. The first document was provided by Clifton $VVRFLDWHV/WG³)HDVLELOLW\6WXG\%R[DQG$WKRQD0LQHV*ROGILHOGV3URMHFW/DNH$WKDEDVFD´LQ

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 27 7KHVHFRQGGRFXPHQWZDVSURYLGHGE\80$(QJLQHHULQJ/WG³*UHDWHU/HQRUD5HVRXUFHV Inc., Environmental Impact Statement, Box Starter Pit Mine, Goldfields Project, Northern SaskDWFKHZDQ´LQ-DQXDU\

5DWKHUWKDQDFRPSOHWHUHDVVHVVPHQWRIWKLVSURMHFW¶VLPSDFWWKLVVHFWLRQRIWKHUHSRUWZLOO describe the differences in the Environmental Assessment findings (impacts and mitigation) previously presented to both Federal and Saskatchewan Provincial Regulatory Agencies and the anticipated environmental impacts and mitigation requirements for the Box Project as proposed by this study. These documents will form the basis of this review; if no significant discrepancy exists between prior findings and those of the current project, GLR will follow the recommendations of these previous submittals. ( ³)HDVLELOLW\6WXG\Box and Athona Mines, Goldfields Project, Lake Athabasca´&OLIWRQAssociates Ltd., Oct.1995)

3.9 Human Resources and Administration

The Box Mine is expected to employ 116 workers. A summary of the workers is presented in the following table.

Location Number of Persons $GPLQLVWUDWLRQ±&RUSRUDWH 3 Administration - Mine Site 7 Warehouse / Purchasing 1 Mining 51 Mine Maintenance 16 Crushing 16 Processing 12 Assay Laboratory 7 Environmental 3 Total 116

The project supports a minimal staff in Saskatoon ± a controller, expeditor/receptionist, and a purchasing agent.

The remaining 113 persons employed will be based in Uranium City. All employees with positions not requiring shift rotations will work a 5x2 rotation, with on-call status during weekends. All employees, with positions requiring shift rotations will work a 6x2 shift rotation.

Fuel supply contracts for the supply of site fuels including diesel fuel, propane and gasoline will be tendered to local fuel suppliers as well as distributors in major centres such as La Ronge, Prince Albert and Saskatoon. Preference for local northern supply will be taken into consideration in the selection of fuel supplies.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 28 Mining, processing and camp facilities construction contracts for the supply and construction the various facilities will be tendered and awarded. Maximizing the northern and Saskatchewan content will be a major factor in the selection of the appropriate contractors for this work. GLR plans to engage a camp catering firm to provide the camp operation services including catering and housekeeping similar to other northern Saskatchewan mines.

GLR plans to contract charter air service similar to other northern Saskatchewan mines. Air service from various northern communities such as Fond du Lac, Stony Rapids, Black Lake, as well as La Ronge, Prince Albert and Saskatoon is proposed.

3.10 Project Economics The Base Case model results in total net cash flow of $US 53.3 million over the life of the project, an internal rate of return (IRR) of 27.4%, an after tax net present value of $27.5 million at a discount rate of 8%. The payback period is 3.1 years. The Base Case assumes a uniform gold price of $525 per ounce over the life of the project.

NPV SENSITIVITY ROSETTE

60 50 Revenue 40 Capital Cost 30 Operating Cost 20 NPV @8% (US$ millions) 10 0 -15% 0% 15% PERCENT CHANGE

IRR SENSITIVITY ROSETTE

50% 45% 40% 35% Revenue 30%

IRR 25% Capital Cost 20% 15% Operating Cost 10% 5% 0% -15% 0% 15% PERCENT CHANGE

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 29

3.11 Other Relevant Data

Numerous mining options have been reviewed and were deemed as viable alternatives, for the exploLWDWLRQRIWKH%R['HSRVLW¶VUHVHUYHV'XHWRWLPHFRQVWUDLQWVWKLVUHSRUWKDVGHDOWH[FOXVLYHO\ with the most conventional alternative. However, as this project moves ahead, all alternatives ZDUUDQW*/5¶VFDUHIXOUHYLHZDQGFRQVLGHUDWLRQ

The three most viable alternatives can be briefly differentiated as follows: 1. Conventional Hydraulic Shovel Loader/Truck Haulage (per this Feasibility Study) 2. Remote Controlled Hydraulic Shovel Loader/Truck Haulage 3. Rubber Tired Front End Loader, In-Pit Crushing and Conveyor Transport (Ore & Waste)

Direct and indirect labour cost components represent a significant portion of the operating costs of this project. The technology exists to monitor and control both mobile and stationary equipment from remote sites, with minimal direct human intervention. GLR intends to initially implement Alternative #1, conventional equipment, while investigating the feasibility of remote-controlled equipment, Alternative #2.

Alternative #3 warrants further investigation due to the inherent advantages offered by this system. The possible advantages offered are lower capital cost anticipated (in-pit mobile vs. stationary crushers; truck vs. conveyor); lower operating costs of conveyors vs. truck haulage with SaskPower @ 0.475/kWhr ; and reductions in fuel requirements (+60%), maintenance personnel, operating personnel, freight volumes, capital spare parts requirements, etc. These advantages must be balanced against the following disadvantages: all material (waste and ore) would require crushing; drill patterns and drill hole diameters would be adjusted to ensure the suitability of the blasted rock for crushing circuit; operational flexibility would be reduced, as the system could not convey multiple rock types (ore, low grade, waste) simultaneously; waste dump construction would require additional infrastructure; and SaskPower may not have sufficient power available to meet demand.

3.12 BETA Comments as Independent Reviewer

Overall, the feasibility study report addresses all of the topics that need to be addressed for a full feasibility study.

BETA is of the opinion that the mineral resource and mineral reserve statements included in this report are accurate, well with normal limits required by a feasibility study. BETA did a detailed review of the resource block model and is satisfied with overall results.

BETA¶VUHYLHZKDVLGHQWLILHGWKHIROORZLQJDVDUHDVRIULVNWKDWQHHGWREHFRQVLGHUHGIRUSRWHQWial impact on financial results:

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 31 x Capital Costs ± The project capital cost is based upon purchase of major components of the crushing and process plant from China. A currency exchange risk exists. x Metallurgy ± the recovery rate of 93% is assumed over all of the deposit uniformly. A variance in the recovery would have impact on financial results. x Taxes ± taxes for this study have been calculated at a pre-feasibility level. Assumptions inherent in this study must be validated. x Construction schedule ± this analysis assumes a 1-year construction period. If construction is prolonged, then economic results may be adversely effected.

There are several areas where more work is recommended prior to the initiation of mining. These areas that BETA believes merit additional study are:

x GLR must confirm the status of the Assessment Work requirement of each Mineral claim and ensure compliance with such requirements. x slope stability ± the current report is stated to be for prefeasibility level design. x mine model coordinates ± it is advisable to translate the mine model from mine grid to UTM.

GLR could consider the option of partially draining/evaporating the solution content of the Vic Lake TMF, prior to placing this facility in operation. This decision should be based on recommendations received from the various regulatory agencies. It is recommended that should the decision be taken to only discharge/evaporate a portion of the water currently contained, the minimum quantity should be based on projected annual requirements, approximately 170,000 cubic meters per year. Should this decision be adopted and as the projected TMF solution requiring treatment annually is 29,472 m3, it is recommended that 140,000 m3 be discharged and the remaining 30,000 m3 be evaporated. It can be argued that greater benefit will be derived from a complete drainage of this facility prior to operation, as this action will minimize the environmental risks to migratory bird populations and indigenous wildlife.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 32 4.0 INTRODUCTION AND TERMS OF REFERENCE

The purpose of this report is to present the results of the Box Mine Project Feasibility Study. The report conforms to Form 43-101F1 for technical report. As of this writing, GLR has made the decision to commence development activities as soon as possible for the Box Mine Project. In order to facilitate expedited financing, GLR requested that a NI43-101 report be prepared by an independent consultant.

GLR Resources Inc. (GLR) of Toronto, Ontario, Canada commissioned BIKERMAN ENGINEERING & TECHNOLOGY ASSOCIATES, INC. (BETA), of Old Lyme, CT, USA and Dan Mackie Associates, of Burlington, Ontario, Canada, to complete an independent Technical Report on the gold resource estimation for the Box Mine deposit in accordance with industry standard practices and in compliance with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves and Canadian National Instrument 43-101. BETA prepared this Technical Report in support of the public disclosure of the Mineral Resource estimates as of June, 2007.

In this Revision 1 of the Technical Report, the results of the mineral resources for the Athona Deposit, as issued in a Technical Report by Wardrop Engineering Inc. on May 17, 2008, and reviewed and stated by BETA, are included.

Tax considerations have been updated in Revison 1 to reflect current tax rates and deductibility percentages.

The qualified persons responsible for the preparation of this report are: Dr. Michael Bikerman, P.Geo, David Bikerman, Eng. Mines, and Tom McGrail. Dan Mackie, P. Eng., of Dan Mackie Associates, serves as the QP for sections pertaining to metallurgy, process design, infrastructure and process operating and process capital costs.

GLR supplied documentation as noted within the report which forms the basis of significant portions of this report.

The companion policy 43-101 CP to NI 43-101, Standards of Disclosure for Mineral Projects requires under Section 6, Personal Inspection. Dr. Michael Bikerman spent one week performing geologic mapping in the vicinity of the Box Mine, and one day mapping the Box Mine. David Bikerman, Tom McGrail and Dan Mackie conducted recent site visits.

Kian Jensen was the project geologist and QP for the 2004 and 2005 confirmation and detail diamond drilling at the Box Mine in the Uranium City area and specifically visited the Box Mine Project for a general inspection of stored drill core piles, inspection of the 2004 and 2005 diamond drill core, review of logging procedures, database entry, supervising area geological mapping, piezometer readings at and in the vicinity of the Box Mine and inspection and supervision of the diamond drill Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 33 hole collars survey. Prior to estimating resources, AMEC audited and verified the Box Mine assay database during late 2004 and in early 2005. At the request of AMEC, Resource Modeling Inc. (RMI) was asked to completed basic data validation and resource estimation. Mike Lechner, President of RMI, performed these under a consulting agreement with AMEC. Harry Parker, Technical Director of AMEC, reviewed the AMEC report on the resource estimation. Tim Maunula of Wardrop Engineering updated the resource classifications of the block model in 2006.

The 2007 Box Mine Project Final Feasibility Study utilizes data from the 1995 Box Mine Final Feasibility Study completed by H.A. Simons Inc. as well as and the 2005 Mineral Resource Estimation Report conducted by Kian Jenson, P. Geo, and the Box Mine. This study provides a detailed review of the Box Mine Stand-Alone Project as of June, 2007 to justify a production decision.

BETA acknowledges that this report and other technical information will be presented by GLR for the acquisition of financial resources, and to fulfill the requirements of the Annual Information Form (AIF).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 34 5.0 DISCLAIMER & RELIANCE ON OTHER EXPERTS

It is noted that this technical report is not required to include all the information specified in Items 6 through 11 of this Form to the extent that the required information has been previously filed in a technical report for the property being reported on, specifically a 43-101F1 report prepared by Kian $-HQVHQ3*HRGDWHG'HFHPEHUWLWOHG³0LQHUDO5HVRXUFH(VWLPDWLRQ5HSRUWRf the Box Mine Project for GLR Resources, Inc in the Beaverlodge Lake Area, NTS Map Sheet 74N-´ The previous technical report is available on SEDAR, and there has not been any material change in the information. Nevertheless, for the sake of completeness, these sections have been retained and additional or supplementary information included in this report.

Over the years, a number of engineering companies and consulting firms have completed studies that form the basis for this Feasibility Study. These and other studies have also supplied baseline and technical information for the permitting documents. The following companies have made direct contributions to the development of this Feasibility Study. While information from their reports is summarized herein, the complete reports are available as technical-supporting documents to this report.

Description Author 43-101F - Mineral Resource Estimation Report of Kian A. Jensen, P. Geo., the Box Mine Project for GLR Resources, Inc in Timmons, Ontario the Beaverlodge Lake Area, NTS Map Sheet 74N- 07, dated December 21, 2005 Greater Lenora Resource Inc Environmental UMA Engineering Ltd., Impact Statement, Box Starter Pit Mine, Goldfields 2100-8th St E Project, Northern Saskatchewan dated January Saskatoon, Saskatchewan S7H 0V1 2007 and February 2007 Box Mine Project ± Preliminary Open Pit Slope Klohn-Crippen Limited Design, June 1995 Vancouver, BC Greater Lenora Goldfields Project ± Feasibility H.A. Simons Ltd Study, dated June 1995 Saskatoon, Saskatchewan Topography mapping ± 1:25000 flown 1976 Survey control by Clifton Associated Ltd Compiled by The Orthoshop, Calgary, Dec 1994 Greater Lenora Resources Corp, Goldfields Project, John F. Cook and Dan Mackie Order of Magnitude Study, Using Revised Criteria, April 1998 GLR ± Box Mine Block Model and support Tim Maunula, P.Geo. documentation Wardrop Engineering Inc. 330 Bay Street, Suite 604 Toronto, ON M5H 2S8 Greater Lenora Resources Corp, Goldfields Project, Behre Dolbear & Company Inc, 1601 Blake Street, Northern Saskatchewan, Canada, December 1996 Denver, CO USA Greater Lenora Resources Corp, Goldfields Project, Richard C. Swider Consulting Engineers, Ltd. Review of Metallurgical Testing, October 1995 Lakefield Research, Lakefield, Ontario Technical Report on the Athona Deposit, SK, May Tim Maunula, P.Geo. 17, 2007. Wardrop Engineering Inc. 330 Bay Street, Suite 604 Toronto, ON M5H 2S8

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 35 The authors compiled the information contained in this technical report from these sources. Review and verification beyond the feasibility study have not been made.

BETA has exercised reasonable diligence in using data supplied by GLR Resources, Dan Mackie Associates, and other project participants and has no reason to believe that any data supplied are misleading or incorrect. However, BETA does not guarantee the accuracy of data supplied.

Due to circumstances that prompted the expedited preparation of this Technical Report, i.e. the desired timing of project financing, and the resulting short time frame allowed for the preparation of this report, BETA has not done detailed audits of all aspects of the project. Specific items that BETA has not reviewed in detail include:

1. Drill hole sampling and verification. BETA has relied upon the recent work performed by Wardrop and other consultants to GLR. All work was performed by qualified persons and reported by GLR previously.

2. Metallurgy and recovery. BETA has relied on the estimates developed by independent consultants to GLR.

3. Process operating costs. BETA has relied on quantities and unit costs developed by GLR personnel and Dan Mackie Associates for these costs.

4. Environmental and Permitting. BETA has not audited the status of the permitting process at the Box Mine. BETA has relied on the information as reported by GLR. BETA is not aware of any issues pertaining to the property that will have a negative effect on the permitting process.

5. Taxes ± BETA did not employ a tax specialist in preparation of the cash flows, and as such presents the tax implications at a pre-feasibility level.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 36 6.0 PROPERTY DESCRIPTION AND LOCATION

6.1 Location

The Goldfields Property is located on the north shore of Lake Athabasca in the northwestern portion of Saskatchewan as shown in Figure 1 and Figure 2. The property area is situated approximately 55 km (34.16 miles) south of the Saskatchewan and Northwest Territory boundary and approximately 75 km (46.58 miles) east of the Saskatchewan and Alberta boundary. The Goldfields Property forms a rough triangle approximately 23.3 km (14.5 miles) southwest, 17.6 km (10.9 miles) northeast and 23.3 km (14.5 miles) southeast of Uranium City. The property derived its name from the former mining town of Goldfields located approximately between the former Box Gold Mine to the west and the Athona Gold Mine to the southeast.

The Goldfields Property consists of 33 contiguous mining claims and 5 mining leases, covering approximately 27,651 hectares in the Beaverlodge Lake area, Northern Mining District, Saskatchewan, Canada and is located within NTS map sheets 74N-06, 74N-07, 74N-08, 74N-09 and 74N-10.

The coordinates of the triangular shaped property with Uranium City on the western boundary are approximately 649, 240 mE and 6,617,650 mN in the northeast, 625,980 mE and 6,584,900 mN in the southeast, and 650,990 mE and 6,588,150 mN in the east (UTM Zone 12, NAD 83).

6.2 Property Description

6.2.1 Property Royalties and/or Encumbrances

GLR Resources Inc. owns a 100% interest and is the registered mining claim holder of all of the mining claims and mining leases which are known as the Goldfields Property.

The Box Mine and the Athona Mine properties are owned 100% interest by GLR Resources Inc. with Franco Nevada owning a 2% NSR on an area of interest of 10 miles from the external property boundaries of the Box Mine property, Athona Mine property, Fish Hook Bay property and the Nicholson Bay property.

The Box Mine is also subject to a 1.5% NSR on all production beneath the 50 meters below mean sea level that is on the original Cominco mining claims.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 37 Figure 1 Location Map of GLR Resources Inc. Goldfields Property, Northern Mining District, Saskatchewan, Canada.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 38 Applied Assessment Disposition Current Area Grouping Yearly Total Available Date Protected work for year Defiency # Number Status Owners Hectares NTS Map Reference Effective Date Certificate Work due Expenditures to ending Incurred Not Incurred Deposit 1 CBS 4966 ACTIVE GLR RESOURCES INC. 100% 648 74-N-08 19/10/83 $16,200 $68,993.74 19/10/07 18/10/06 $19,651.75 $49,341.99 2 CBS 5500 ACTIVE GLR RESOURCES INC. 100% 486 74-N-07 01/10/76 $12,150 $197,179.00 01/10/07 30/09/06 $18,327.04 $178,851.96 3 CBS 5562 ACTIVE GLR RESOURCES INC. 100% 745 74-N-07 27/07/77 $18,625 $308,904.00 27/07/07 26/07/06 $23,801.36 $285,102.64 4 CBS 5563 ACTIVE GLR RESOURCES INC. 100% 1,747 74-N-07 27/07/77 N $698,800.00 27/07/07 26/07/06 $12,213.39 $686,586.61 5 CBS 5565 ACTIVE GLR RESOURCES INC. 100% 707 74-N-06 & 74-N-07 27/07/77 $17,675 $285,187.00 27/07/07 26/07/06 $7,329.99 $277,857.01 6 CBS 5664 ACTIVE GLR RESOURCES INC. 100% 4,547 74-N-06, 74-N-07 & 74-N- 21/12/77 N $1,932,475.00 21/12/06 20/12/05 $193,450.52 $1,739,024.48 7 CBS 5677 ACTIVE GLR RESOURCES INC. 100% 752 74-N-07 & 74-N-08 29/05/78 $18,800 $81,421.56 29/05/07 28/05/06 $46,500.27 $34,921.29 8 CBS 6059 ACTIVE GLR RESOURCES INC. 100% 486 74-N-08 23/02/84 $12,150 $51,577.55 23/02/07 22/02/06 $13,365.75 $38,211.80 9 CBS 7260 ACTIVE GLR RESOURCES INC. 100% 460 74-N-08 26/11/86 $11,500 $80,685.64 26/11/06 25/11/05 $80,685.64 $0.00 10 ML 4760 ACTIVE GLR RESOURCES INC. 100% 25 74-N-08 01/08/05 GC # 44937 $1,875 $30,392.00 01/08/07 31/07/06 $30,392.00 $0.00 11 ML 4761 ACTIVE GLR RESOURCES INC. 100% 20 74-N-08 01/08/05 GC # 44937 $1,500 $24,364.00 01/08/07 31/07/06 $24,364.00 $0.00 12 ML 4762 ACTIVE GLR RESOURCES INC. 100% 24 74-N-08 01/08/05 GC # 44937 $1,800 $29,024.00 01/08/07 31/07/06 $29,024.00 $0.00 13 ML 5522 ACTIVE GLR RESOURCES INC. 100% 70 74-N-07 22/07/02 N $28,000.00 22/07/07 21/07/06 $28,000.00 $0.00 14 ML 5523 ACTIVE GLR RESOURCES INC. 100% 167 74-N-08 23/08/02 $4,175 $20,887.57 23/08/07 22/08/06 $20,887.57 $0.00 15 S - 97233 ACTIVE GLR RESOURCES INC. 100% 16 74-N-06 & 74-N-07 08/08/79 GC # 44501 $400 $6,721.00 08/08/07 07/08/06 $6,721.00 $0.00 16 S - 97234 ACTIVE GLR RESOURCES INC. 100% 16 74-N-06 & 74-N-07 08/08/79 GC # 44501 $400 $6,863.00 08/08/07 07/08/06 $6,863.00 $0.00 17 S - 97235 ACTIVE GLR RESOURCES INC. 100% 16 74-N-06 & 74-N-07 24/09/79 GC # 44501 $400 $6,578.00 24/09/07 23/09/06 $6,578.00 $0.00 18 S - 97236 ACTIVE GLR RESOURCES INC. 100% 16 74-N-06 & 74-N-07 24/09/79 GC # 44501 $400 $6,792.00 24/09/07 23/09/06 $6,792.00 $0.00 19 S - 97948 ACTIVE GLR RESOURCES INC. 100% 16 74-N-07 16/11/82 N $6,800.00 16/11/06 15/11/05 $276.98 $6,523.02 20 S - 102820 ACTIVE GLR RESOURCES INC. 100% 650 74-N-08 05/05/94 $16,250 $43,929.76 05/05/07 04/05/06 $8,046.75 $35,883.01 21 S - 102822 ACTIVE GLR RESOURCES INC. 100% 2,125 74-N-06, 74-N-07, 74-N-0 05/05/94 $53,125 $442,724.81 05/05/07 04/05/06 $46,130.73 $396,594.08 22 S - 102823 ACTIVE GLR RESOURCES INC. 100% 1,880 74-N-10 05/05/94 $47,000 $399,372.39 05/05/07 04/05/06 $48,503.27 $350,869.12 23 S - 102831 ACTIVE GLR RESOURCES INC. 100% 222 74-N-08 05/05/94 $5,500 $17,356.71 05/05/07 04/05/06 $5,101.28 $12,255.43 24 S - 103237 ACTIVE GLR RESOURCES INC. 100% 16 74-N-08 12/02/86 $400 $2,635.07 12/02/07 11/02/06 $2,635.07 $0.00 25 S - 103238 ACTIVE GLR RESOURCES INC. 100% 16 74-N-08 12/02/86 $400 $2,439.07 12/02/07 11/02/06 $2,439.07 $0.00 26 S - 103239 ACTIVE GLR RESOURCES INC. 100% 16 74-N-08 12/02/86 $400 $2,467.07 12/02/07 11/02/06 $2,467.07 $0.00 27 S - 103240 ACTIVE GLR RESOURCES INC. 100% 16 74-N-08 12/02/86 $400 $2,467.07 12/02/07 11/02/06 $2,467.07 $0.00 28 S - 103241 ACTIVE GLR RESOURCES INC. 100% 16 74-N-08 12/02/86 $400 $2,523.07 12/02/07 11/02/06 $2,523.07 $0.00 29 S - 104369 ACTIVE GLR RESOURCES INC. 100% 738 74-N-06 & 74-N-07 27/10/97 $8,856 $293,873.00 27/10/07 26/10/06 $8,267.00 $285,606.00 30 S - 104982 ACTIVE GLR RESOURCES INC. 100% 14 74-N-06 & 74-N-07 04/04/96 $192 $6,400.00 04/04/07 03/04/06 $87.07 $6,312.93 31 S - 107993 ACTIVE GLR RESOURCES INC. 100% 2,697 74-N-07 30/06/05 N $1,924.00 30/06/07 $1,924.00 $0.00 32 S - 108029 ACTIVE GLR RESOURCES INC. 100% 1,756 74-N-10 03/08/05 N $39,340.00 03/08/07 $39,340.00 $0.00 33 S - 108030 ACTIVE GLR RESOURCES INC. 100% 1,179 74-N-08 10/08/05 N $18,514.00 10/08/07 $18,514.00 $0.00 34 S -108032 ACTIVE GLR RESOURCES INC. 100% 5,346 74-N-09 & 74-N-10 20/09/05 N $69,054.00 20/09/07 $69,054.00 $0.00 35 S-107229 ACTIVE DUBNICK/GLR $5,352.00 36 S-107230 ACTIVE DUBNICK/GLR $3,432.00 37 S-107231 ACTIVE DUBNICK/GLR $804.00 38 S-106690 ACTIVE DUBNICK/GLR $1,752 $1,752.00 27,651 $252,725 $5,216,665.08 $832,723.71 $4,383,941.37 $11,340.00

Figure 2 - Claim Map

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 39 6.3 Mineral Dispositions

The Saskatchewan Provincial government is empowered by the Crown Minerals Act to grant mineral dispositions in the form of permits, claims and leases, within its jurisdiction, to qualified entities. The regulations covering these dispositiRQV DUH FRQWDLQHG LQ ³7KH 0LQHUDO 'LVSRVLWLRQ 5HJXODWLRQV ´ RWKHUZLVH NQRZQ DV 6DVNDWFKHZDQ 5HJXODWLRQ  DQG WKH SHUWLQHQW subsequent amendments.

As defined by this Crown Minerals Act, those dispositions designated as Mining Claims do not require a legal survey, prior to registration; Mining Leases require a Legal Survey. The Claims indicated above have not been the subject of a Legal Survey; the Leases have been Legally Surveyed

Under the terms and conditions as laid out in this Crown Minerals Act, all of the Claims and Leases SHUWDLQLQJ WR */5¶V *ROGILHOGV 3URSHUW\ DUH GHVLJQDWHG DV ³$FWLYH´ DQG DUH UHJLVWHUHG WR */5 Further, these dispositions are subject to and must comply with the Assessment Work requirements as stipulated by this Act. It behooves GLR to confirm the assessment Work status of these Claims and Leases and ensure that all Assessment Work, pertaining to these dispositions has been both submitted and subsequently accepted by the Ministry of Industry and Resources as the regulatory agency. The Goldfields Property has been the subject of extensive work which would fulfill with the assessment work requirement; GLR must confirm the status of the Assessment Work requirement of each Mineral disposition and ensure compliance with these requirements.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 40 6.4 Site Description

6.4.1 Existing Environmental Liabilities

$VQRWHG*/5¶V*ROGILHOGV3URSHUW\KDVEHHQWKHREMHFWRISUHYLRXVPLQLQJRSHUDWLRQV$VVXFK there is evidence of this prior mining activity and GLR has assumed the environmental liabilities as caused by this previous mining activity. UMA Engineering Ltd. Report Greater Lenora Resources Inc., Environmental Impact Statement; Box Starter Pit Mine, Goldfields Project, Northern Saskatchewan as submitted in January, 2007, has addressed these issues and provided the appropriate remediation and mitigation measures.

6.4.2 Permitting Requirements

The permitting process for mine construction and development and construction involves the following. This is

Permitting Requirements; Regulatory ACTS and/or Date Operations Agency Agreements Current Status Submitted

ENVIRONMEN Ministry of -Environmental The required Jan, 2007 TAL PERMIT Environment Assessment Act Environmental Impact (Environmental (Saskatchewan) (Saskatchewan) - Statement has been Impact Statement as the leading Canadian submitted to the Approval) Regulatory Environmental Ministry of Environment Agency Assessment Act (Saskatchewan). The (CEAA) - Federal Regulatory Canada-Saskatchewan Agencies have indicated Agreement on that their involvement is Environmental currently not required. Assessment Cooperation Surface Land Ministry of Mineral Dispositions Preliminary Discussion Lease Approval Industry and Regulations, 1986 Phase. An approved Resources Environmental Impact (Saskatchewan), Statement is a Ministry of prerequisite. This is a Environment negotiated agreement (Saskatchewan), and due to the project's Department of location, Northern Northern Affairs is an integral Affairs, participant. Provincial Cabinet (Signatory) Barge Landing Department of Fisheries Act, Harmful Preliminary Discussion Fisheries and Alteration, Disruption Phase Oceans Canada, or Destruction

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 41 Transport (HADD) Canada, Ministry of Environment (Saskatchewan) Water Usage SaskWater Fisheries Act Preliminary Discussion Permit Corp., Ministry Phase of Environment (Saskatchewan), Department of Fisheries and Oceans Canada Tailing Ministry of Metal Mining Effluent Preliminary Discussion Management Environment Regulations (MMER), Phase Facility - Effluent (Saskatchewan), Fisheries Act Discharge Department of Fisheries and Oceans Canada Logging Permit Ministry of Forest Resources Environment Management Act (Saskatchewan), Winter Roadway Ministry of Preliminary Discussion Construction Environment Phase. Permitting will be (Saskatchewan), required should the Fort Saskatchewan Chipewyan to Uranium Department of City ice road route be Highways and required. Transportation Construction Ministry of Permit Industry and Resources (Saskatchewan), Department of Northern Affairs

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 42 7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

7.1 Accessibility

The Goldfields Project location does impact the logistics for both freight and personnel transport. Fortunately, this Project is the Beneficiary of the infrastructure developed to support previous mining ventures, in this historical mining area. The following Table provides a listing of the various alternatives available to GLR, for transportation of freight:

Roadways Vancouver Rail Ice Winter Summer HWY Barge Waterway Total Dist. Edmonton 1,166 CN 1,166 Hwy 5 Ft McMurray 437 CN & ANY 441 Hwy 63 Ft MacKay 80 Hwy 63 Ft Chipewyan 197 Slave River Box Mine 150 150 1,603 - 347 - 1,687 150 2,030 Edmonton 1,166 CN 1,166 Hwy 5 Ft McMurray 437 CN & ANY 441 Hwy 63 Ft MacKay 80 Hwy 63 Athabasca Delta 150 Box Mine 160 1,603 - - - 1,687 310 1,993 Edmonton 1,166 CN Ft McMurray 437 CN & ANY 441 La Loche 194 Hwy 155 Cluff Lake 250 Hwy 955 Lake Athabasca 95 95 Athabasca River Box Mine 45 45 Lake Athabasca 1,603 45 95 95 885 45 2,187 Edmonton 1,166 CN Hay River 1,097 CN 1,097 Hwy 16W, 43W, 49, 2, 35, 1, 2 Ft Smith 276 Hwy 5 Fitzgerald 30 Hwy 5 Ft Chipewyan 170 Slave River Box Mine 150 150 Lake Athabasca 2,263 - 320 - 1,403 150 2,889 Saskatoon 1,681 1,681 Hwy 16 Stony Rapids 1,042 Hwy 2 N Fond du Lac 89 89 Fond du Lac River Uranium City 117 117 Lake Athabasca Box Mine 22 22 1,681 - - 228 111 2,723 - 117 2,951 Saskatoon 1,681 La Loche 591 Hwy 12, 40, 3, 694, 55, 155 Cluff Lake 250 Hwy 955 Lake Athabasca 95 95 Athabasca Box Mine 45 45 1,681 45 95 95 841 45 2,662 CN = Canadian National Railway ANY = Athabasca Northern Railway

It should be noted that currently freight access to the Project would be over a winter road from Fond de Lac. The Athabasca Basin Development Limited Partnership constructs and maintains this winter road annually with funding provided by the government of the province of Saskatchewan. Recent experience indicates that this winter road is open from the end of January to the end of March; this VFKHGXOHZRXOGQRWIXOILOO*/5¶VUHTXLUHPHQWV&RQILUPDWLRQRIUHFHQWJRYHUQPHQWFRPPLWPHnts to

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 43 H[WHQGDQGLPSURYHWKLVURDGZD\ZLOOEHUHTXLUHGSULRUWR*/5¶VDFFHSWDQFHRIWKLVURXWHEHLQJD viable transportation route.

Due to the highway, railway service and freight handling infrastructure developed for oil sands projects in the Fort McMurray, Alberta area, this is the preferred routing. The options available from Fort McMurray are

x trucking to Fort MacKay and subsequently barging through to the minesite x trucking via Fort MacKay, Fort Chipewyan to the minesite by winter road x trucking through La Loche and Cluff Lake to the barge loading facility on the south shore of Lake Athabasca then barging to the minesite.

Investigations into these various alternatives have indicated that companies offering barge service require considerable advance notice for scheduling purposes; further, these companies may be fully occupied short term meeting the needs of their current customers. GLR has therefore taken the GHFLVLRQWRRSHUDWHLWV¶RZQWXJDQGIOHHWRIEDUJHV*/5KDVPDGHRSWLRQSD\PHQWVRQDWXJEoat currently in Yellowknife, NWT and 2 x 200 series and 1 x 100 series barges. Experienced personnel are readily available to operate this fleet. This decision will greatly facilitate compliance with the anticipated construction schedule.

After this construction phase, a decision on the ongoing freight requirements will be made based on negotiations with the various freight companies and government entities. Companies such as RTL Robinson Enterprises Ltd., with headquarters in Yellowknife, NWT have extensive experience in the construction and maintenance of Ice and Winter roadways as well as freight and heavy equipment handling. Further, companies such as the Northern Transportation Company Limited, with headquarters in Hay River, NWT, have extensive experience in the barging of freight and heavy equipment.

Aircraft support for the project is readily available. The airport for the hamlet of Uranium City was RULJLQDOO\FRQVWUXFWHGE\WKH(OGRUDGR0LQLQJ&RLQWKH¶V:LWKWKHGHFOLQHRIWKHXUDQLXP miniQJLQGXVWU\LQWKH¶VWKHDLUSRUWZDVWXUQHGRYHUWR7UDQVSRUW&DQDGD  DQG eventually to the Saskatchewan Provincial Government (1997). The current runway is a reduced version of the original; its length reduced from 1524 m to 1198m and width from 60m to 30m. Two airlines (TransWest Air and Pronto Airlines) currently provide limited passanger and freight service from Stony Rapids and Fond du Lac to Uranium City. Various aircraft types are used that have similar characteristics to the Cessna Caravan. The frequency of scheduled commercial flights will respond to actual requirements. Personnel and shift schedule rotational requirements will be defined as the project advances. As this need to rotate operational personnel is defined, GLR will investigate alternatives to commercial airlines providing this service. Contracting this service is one alternative that warrants consideration and investigation.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 44 Should the necessity arise, the current airstrip is sufficiently long to handle C-130 STOL transport aircraft with freight capacities exceeding 30 tonnes.

7.2 Climate and Meteorology

Table 3-1 summarizes monthly climate data collected from Uranium City from 1956 to 1983. The VRXUFHRIWKLVLQIRUPDWLRQLV(QYLURQPHQW&DQDGD¶V&DQDGLDQ&OLPDWH1RUPDOVZebsite (http://www.climate.weatheroffice.ec.gc.ca/climate_normals/index_1 961_1990_e.html; accessed December 2007).

7.2.1 Precipitation and Evaporation

Average total precipitation for the project area ranges from 16.89 mm in February to 50 mm in July or August. Maximum precipitation occurring in the period between 1956 and 1983 was 118 mm, falling as rain in August 1962.

7.2.2 Temperature

Average daily temperature ranges between -26°C in January and 16°C in July.

Average minimum temperatures recorded from 1953-1986 range from 11°C in July to -31.7°C in January. The extreme low temperature recorded from 1956-1983 was -48.9°C, occurring in January of 1974. Average extreme low temperature is -43.9°C.

Average maximum temperature recorded from 1953-1986 ranges from 21°C in July to -21°C in January. The extreme high temperature recorded from 1956-1983 was 34.7°C, occurring in July of 1984. The average extreme high temperature between 1956 and 1983 is 28.7°C.

7.2.3 Wind

Average wind speed measured from 1956 to 1983 is 11 km/hr, blowing from the east to the northeast, 8% to 15% of the time.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 45 Table 7-1: Meteorological data for Uranium City, 1956±1983 (Environment Canada)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov De c Year Temperature -21.8 -16.2 -8.1 3.7 12.8 18.8 21.3 19.3 11.3 3.8 -8.1 -17.7 1.6 Daily Max imum ( ºC) Daily Minimum ( ºC) -31.9 -28 -22 -8.6 1 7.7 11 9.6 3.3 -2.8 -15.7 -26.7 -8.6 Daily Mean (ºC) -26.8 -22 -15 -2.4 6.9 13.3 16.2 14.5 7.3 0.5 -11.8 -22.1 -3.5 Ex tr eme Max imum ( ºC) 3.3 5.9 11.6 28.9 31.6 34.4 34.7 32.8 29.4 20 10.5 5.9

Date 1985/ 1986/ 1984/ 1980/ 1986/ 1970/ 1984/ 1953/ 1967/ 1957/ 1978/ 1985/ 03+ 28 31 29 26 4 27 20 1 1 2 20 Extreme Minimum (ºC) -48.9 -48.3 -42.8 -37.8 -16.7 -5 3.2 -1.4 -9.4 -25.9 -41.7 -45.6

Date3 1974/ 1963/ 1962/ 1972/ 1954/ 1969/ 1982/ 1979/ 1965/ 1984/ 1966/ 1953/ Degree-Days 15 3 02+ 04+ 2 11 21 29 26 31 30 29 º Above 18 C 0 0 0 0 0.9 6.1 18.1 11.9 0.2 0 0 0 37 Below 18ºC 1392.2 1133 1024.6 614.6 344.6 147.7 74.1 121.6 321.7 543.5 897.6 1242.1 7857 Above5ºC 0 0 0 10.9 101 249.2 347 293.5 91.2 10.6 0 0 1103

Below 0ºC 834.2 624.5 468 124.5 10.5 0 0 0 1.9 50.4 358.8 684.1 3157 Precipitation 0 0 0.2 4.6 17.6 37.7 53 53.3 35.7 21.1 0.3 0.2 223.7 Rainfall (mm) Snow fall (cm) 32.9 24.8 27.7 18.9 4.4 0 0 0.2 2 19.2 48.3 36.7 215.1 Precipitation (mm) 20.7 14.8 18.6 19.2 21.4 37.8 53 53.5 37.3 35.9 29.2 20.6 361.8 Extreme Daily Rainfall (mm) 0 0.8 1.3 19.8 30.5 46.7 38.6 33.5 26.4 16.3 6.4 2.4

1986/ 1963/ 1970/ 1975/ 1966/ 1962/ 1974/ 1966/ 1963/ 1965/ 1956/ 1985/

Date 31+61728222791259 420 Extreme Daily Snow fall (cm) 18.5 16.3 20.3 34 18.9 1 0 3.2 6.6 17.7 29.5 47

1968/ 1970/ 1958/ 1972/ 1982/ 1977/ 1985/ 1982/ 1974/ 1984/ 1973/ 1953/

Date 16 10 20 22 4 9 31+ 25 24 25 21 1 Extreme Daily Precipitation1

( mm) 10.7 16 20.3 28.4 30.5 46.7 38.6 33.5 26.4 16.3 18 47 1976/ 1965/ 1958/ 1972/ 1966/ 1962/ 1974/ 1966/ 1963/ 1965/ 1963/ 1953/

Date 17 13 20 22 22 27 9 12 5 9 15 1 Month-end Snow Cover (cm)2 49 51 51 8 0 0 0 0 0 4 25 36

1 Extreme values are the highest or lowest occurrence for all years for which data are available. Extreme values whose corresponding means are missing should be used with caution. They are often derived from less than twenty years of observations, and may not be indicative of occurrences which could be expected over longer periods. 2 Snow cover is the depth of accumulated snow on the ground, measured at several points which appear representative of the immediate area, and then averaged. 3 Date annotation as provided by Environment Canada.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 46 7.3 Local Resources

The economy of northern Saskatchewan is based in mining, tourism and traditional hunting and gathering activities. GLR Resources Inc. intends is to contribute to the economy of the Athabasca Basin while remaining an economically viable operation.

Demographics

The primary impact area encompasses the Athabasca Basin between the northern settlement of Camsell Portage near the Alberta-Saskatchewan border extending east to include the communities of Hatchet Lake First Nation and the northern settlement of Wollaston Lake. Other communities within the Basin include the northern settlement of Uranium City, Fond du Lac First Nation, Black Lake First Nation and the northern hamlet of Stony Rapids. The communities of Wollaston Lake and the Hatchet Lake First Nation are located within the Athabasca Basin they are located approximately 300 km southeast of the project area and are less likely to be impacted either positively or negatively by the proposed development. In addition to these communities, there are outfitter camps located at various points throughout the basin.

The population of the region has fluctuated and shifted from earlier times when the focus was on Uranium City. With the closure of the Eldorado uranium mine in the early 1980s and a large depopulation of Uranium City as a result, the shift to other communities took place. Now larger populations are found in the east at Fond du lac and Black Lake First Nations. The opening of the Goldfields mine will augment the revitalization of Uranium City and other communities in the basin.

In 1981, the Athabasca Basin had 4,536 registered residents in the region. Five years later in 1986, the population declined by over 50% to 2,058. The primary reason for the GHFOLQHLVWKHFORVXUHRI(OGRUDGR1XFOHDU¶V%HDYHUORGJHRSHUDWLRQVDW8UDQLXP City.

Over the past 25 years the populations have grown to surpass the 1981 levels with the most noticeable increases in the First Nations communities and significant decreases in the settlements and hamlets in the basin.

Uranium City

Uranium City is the closest community to the proposed Goldfields Project. Uranium City is located approximately 25.5 km northwest of the proposed mine site. The total population of the town and surrounding area is 201 according to the Saskatchewan Municipal Directory (2006). It is difficult to ascertain what percentage of this

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 47 population is employable, because Stats Canada (2001) does not provide separate results for the community as listed XQGHU³'LYLVLRQ1XPEHU8QRUJDQL]HG´

Fond du Lac

The population of Fond du lac has increased dramatically in the past twenty-five years to a total of 1,646 members, with just over 900 individuals living on the first nation (Aboriginal Canada website, 2006). Thirty three percent of the population is in the 20 -44 year age bracket and is presumed to be the most employable. Of this group, about 13% have a college or trades certificate or a university certificate, degree or diploma. Fifty four percent of the population is under 20 years of age (Stats Canada, 2001). 190 people reported earnings in the 2000; just under half of those people reported working year round and average earnings were $33,645 (Stats Canada, 2001).

Black Lake

The Black Lake First Nation population has more than doubled from 25 years ago to 1,770 members, with 1,402 individuals still residing on the Black Lake First Nation (Aboriginal Canada website, 2006). Of those members listed in the Stats Canada Statistics of 2001, 35% of the people in the age 20 -44 year bracket and are presumed to be the most employable. Of this group, about 18% have a college or trades certificate or a university certificate, degree or diploma. According to Stats Canada (2001), 195 people reported earnings in 2000. Of those 75 people worked year round with average earnings of $29,247. 53% of the population is under 20 years of age (Stats Canada, 2001).

Stony Rapids

The population of Stony Rapids has declined since 1981 from 240 people to 190 in 2006 (Stats Canada, 2001). Eighty people or 42% of the population are under 20 years of age while the same percentage of people is in the 20 -44 age range. Of those in the latter group, over 30% have a college or trades certificate or a university certificate, degree or diploma. Earnings data has not been made available by Stats Canada.

Hatchet Lake

The Hatchet Lake First Nation is listed as Lac La Hache 220 on the Statistics Canada website. The Hatchet Lake First Nation population has more than doubled in twenty five years to 1,428 members. 1,106 people still reside on the reserve (Aboriginal Canada website, 2006). 56% of the population is under 20 years of age. 34% of the population is in the age 20 -44 year bracket and 10% of the population is aged 45 or older. Of the most employable age group (20 -44 years of age), 8.5% have a college or trades certificate or a university certificate, degree or diploma. Stats Canada (2001) reports that 240 people

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 48 reported earnings in 2000 and 90 of those worked full time, year round with average earnings being $25,013.

Camsell Portage and Wollaston Lake

As with Uranium City, Camsell Portage and Wollaston Lake are listed under the category Division Number 18, Unorganized with Statistics Canada and therefore a detailed demographic picture is not available for these communities.

Table 4-1 contains population information on local and regional communities potentially influenced by the proposed Goldfields Project.

Table 7.4-1: Human populations of the region

Community 1981a 1986a 1991a 1994a 19961 20011 2006 BlackLakeFirstNation 692 857 1029 1150 997 1054 17702 Fonddulac 16 20 31 41 751 682 16462 First Nation Hatchet Lake First 366 477 675 792 843 984 14282 Nation Wollaston Lake 138 187 121 106 1753 1546 1293 Uranium City 2479 237 171 175 2013 Camsell Portage 6 4 18 4 373 Eldorado 599 ------Stony Rapids 240 276 166 183 233 190 1893 Total 4536 2058 2211 2451 4367 4455 5518 a historical data

1 Stats Canada, Community Profiles 2001. Results for Communities in Division No. 18, unorganized is a total number for Wollaston Lake, Uranium City, Camsell Portage and other populations within this Division.

2 http://www.aboriginalcanada.gc.ca/acp/site.nsf/en/SK80001 .html

4 http://www.municipal .gov.sk.ca/apps/Pub/M DS/welcome.aspx

Mine Labour Force

The GLR corporate policy is to hire locally to the extent that qualified personnel are available. Once the mine is operational, and within two years, GLR has indicated that they are interested in training on-site and that they look forward to working with a college to promote the advancement of northerners.

Recognizing that the mine is located in a fairly remote section of the province, it will be necessary to have air transportation for at least some of the employees. Work crews will be

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 49 brought to the site for a 14 day rotation. Air transport from local communities such as Fond du Lac and Stony rapids to Uranium City will be arranged. Other manpower resources would be transported from larger communities such as La Ronge, Prince Albert and Saskatoon.

For the purposes of examining the availability of the labour force, the 20 -44 years of age component are the most eligible for employment. Since 1986, the size of the younger labour force has declined in Uranium City and Stony Rapids, and has increased significantly in Fond du Lac and Black Lake First Nations. Statistics Canada (2001) groups information on the communities of Camsell Portage, Uranium City, Stony Rapids and Wollaston Lake under one category; Division No. 18 Unorganized. The population percentages in this grouping indicates that there is a fairly even three way split between children under 19 years, young adults up to the age of 44 and older adults up to and beyond 85 years of age. However, there is a quite different trend in the First Nation communities of Fond du Lac, Black Lake and Hatchet Lake. In these communities, people under 19 years of age make up 54%, 53% and 56% of the population while eligible workers up to 44 years of age make up on 33%, 35% and 34% of the populations in those respective communities. The older adult population is less than a tenth of the total population in those communities.

Economy and Infrastructure

Communities in the project area possess mixed economies characterized by both public and private sector investment. The local private sector economies are under-developed at most northern communities and are designed to service the UHVLGHQWV¶Easic needs. Service stations, air landing strips, contracting services and small retail stores belong in this category. Recreational services are provided in all communities either by private enterprise or by the local administration. The public sector economy is represented by schools, policing services, government agencies such as health services and service groups. The spiritual aspects of the communities are addressed primarily by Roman Catholic missions and by other denominational groups. Table 4-2 provides a summary.

The RCMP provides police service to the communities. Detachments exist in Fond du Lac, Stony Rapids and Wollaston Lake. The Stony Rapids detachment serves the community of Stony Rapids and the Black Lake First Nations Community. The Fond du Lac detachment serves the communities of Fond du Lac, Uranium City and Camsell Portage, while the Wollaston Lake detachment serves the community of Wollaston Lake and the Hatchet Lake First Nation. The proposed Goldfields development would be located within the area serviced by the Fond du Lac detachment. Impacts on policing, resulting from the proposed development, are expected to be negligible in Stony Rapids, Fond du Lac and Black Lake.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 50 However, there could be impacts in Uranium City where the development will result in an increase in the number of residents.

Basic community infrastructure includes water treatment plants, sewage lagoons and electrical power supply. Surface water from Black Lake provides water for the community of Black Lake, Fond du Lac River provides water for the community of Stony Rapids and the Fredette River provides water for the community of Uranium City. The community of Fond du Lac use wells for drinking water. Oil or wood burning stoves are the primary methods for heating homes and other buildings.

Housing shortages exist in the project area outside of Uranium City due to rapidly increasing populations in the area. New housing in the communities is limited. Hotel/motel facilities exist in Stony Rapids, Fond du Lac with bed and breakfast facilities in Uranium City. No impacts on housing demand are anticipated in any of the communities other than Uranium City. Accommodation type impacts in Uranium City are anticipated to be negligible owing to the residual capacity of the community during previous times when the population was much larger. GLR Resources Inc. proposes to renovate an existing building in Uranium City for the camp facility thereby utilizing existing infrastructure and services provided by the settlement.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 51 Table 7.4-2: Business Infrastructure, 2006

Community Business Category Business Northern Stores BlackLake/Stony Retail/Commercial Sarah's Store Rapids Scott's General Store

Billy Joe's Taxi Jimmy Sayazie's Taxi Pronto Airways Transportation R&JTaxi Robillard Taxi Transwest Air

Banner North Construction Camp Grayling Inc. E & L Enterprise Father Porte Memorial School Other Jagg Enterprises Medal Enterprises Stony Rapids Snowmobile Center Torson Contracting White Water Inn Organizations Athabasca Denesuline Child & Family Services Athabasca Health Authority Athabasca Drug & Alcohol Black Lake First Nation NorthernHamlet of Stony Rapids Black Lake Gas Bar Black Lake Health Black Lake Education Black Lake Development Corporation NNADAP ICFS SERM (Stony Rapids) Saskatchewan Highways (Stony Rapids) RCMP (Stony Rapids/Black Lake) Atmospheric Environment Service Stony Rapids Hospital Stony Rapids Home Care Services Stony Rapids School Roman Catholic Mission Visions North continued on next page

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 52 Community Business Category Business Northern Store Fond du Lac Retail/Commercial P & M Gas Bar

Adam's Taxi Mom's Taxi Transportation Transwest Air dƌĂƉƉĞƌ͛ƐdĂdžŝ A&CArcade Other Trapper's Arcade

Fond du Lac RCMP ICFS Fond du Lac First Nation Father Gamache Memorial School Fond du Lac First Nation Organizations Fond du Lac Post Secondary Fond du Lac Health Outpatient Treatment & Prevention Center Fond du Lac Development Corporation Roman Catholic Mission Hatchet Lake First ŶŶĞ͛ƐĂŬery Nation /Wollaston Retail/Commercial Hatchet Lake First Nation Store Lake Welcome Bay General Store

,ĞĐƚŽƌ͛ƐdĂdžŝ Transportation Pronto Airways Transwest Air

Hatchet Lake Lodge Accommodation Welcome Bay Cabins Wollaston Co-op Hotel Other D & D Camps Ltd Dene Enterprise Father Megret Elementaryand High School Minor Bay Lodge & Outposts Ltd Pool Hall First Nation Recreation Wollaston Lake Lodge Ltd continued on next page

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 53 Community Business Category Business Athabasca Economic Development & Training Corporation (includes Athabasca Basin Development Corporation, Pts Athabasca Contracting and PANS) Hatchet Lake Economic Development Corporation Hatchet Lake Education Organizations Hatchet Lake First Nation (Chief and Council) Hatchet Lake Health NNADAP Northern Settlement of Wollaston Lake Wollaston Lake RCMP Wollaston Lake SERM Wollaston Fishermen Co-Op Uranium City ICFS Retail, Commercial Parkes General Store Transportation Transwest Air Fish Hook Bay Lodge Accommodation Urdel Ltd. (Bed and Breakfast)

Fuels Uranium City Bulk Fuel Camsell Portage Freighting Urdel Ltd. (Mechanical Shop) Uranium City Contracting -Construction Other Deconstruction GLR Resources Ltd. -Exploration, gold Uranium City Resources -Exploration, uranium

Athabasca Health Authority Beacon Baptist Church Ben McIntyre School Organizations /Schools Camsell Portage School Northern Settlement of Uranium City (includes Public Works) Saskatchewan Highways

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 54 Health Services

The Athabasca Health Authority provides medical services in the Athabasca Basin. In 2002, a new hospital was opened near Stony Rapids on Black Lake reserve land with 14 patient beds four of them designated for long term care. There are 4 doctors and 8 RNs employed at this facility; the doctors are on rotation from La Ronge and the nurses are also on a rotation being based in southern communities.

The Uranium City hospital was closed in 2003 but a Primary Health Care Centre employing one nurse and two support workers remains and is located in the former RCMP barracks.

Both Black Lake and Fond du Lac have Primary Health Care Facilities with 4 Registered Nurses, a home care program and two Licensed Practical Nurses, walk in treatment, Emergency Services 24/7 and other health care programs.

Turn around time from the mine site to the hospital would be about a 1.5 hours once the call is received. Transwest Air is on contracted to provide medivac services and air ambulance services to Prince Albert and Saskatoon. The Athabasca Health Region also has access to a float plane and helicopter services which would decrease the turnaround time from the mine site to the hospital. A vehicle will be available at the site at all times for use in emergency transport to the Uranium City Airport.

7.4 Existing Land Uses

7.4.1 Mineral Exploration and Development

Mineral exploration and development in the Athabasca Basin has been primarily restricted to uranium-based mining activities in the last several years. These activities have been located south of Lake Athabasca at CluffLake Mine which is in the final stages of decommissioning and at various mines located in the Wollaston Lake area (Rabbit Lake, Key Lake, McArthur River, Cigar Lake, McClean Lake and Midwest Joint Venture). The development of the Goldfields Project would mean the first significant non-uranium related activity since the old Box Mine and mill closed in 1942.

The development of the Goldfields Project will not impact negatively on mineral exploration and development activities but would rather be beneficial given that it could be used as a base for future work.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 55 7.4.2 Trapping

From an economic point of view, trapping activity fluctuates with fur prices. Low fur prices in recent years have led to less trapping activity than has occurred when fur prices were high. However, various trappers may travel to the Goldfields area to trap marten and mink. Recently, there has been no long term trapping by any trapper in the Goldfields area. One trapper from Fond du Lac traps along the north shore of Lake Athabasca but does not trap in the vicinity of the proposed development.

7.4.3 Fishing

Lake Athabasca is not heavily fished, given its remote location. Although a limited amount of commercial and subsidence fishing does take place on Lake Athabasca, there are two fisheries cooperatives registered with the provincial government: one in Black Lake and the other in Fond du Lac. Information received by GLR suggests that both of these cooperatives would like to establish a bigger commercial fishing operation on Lake Athabasca. The Goldfields Project is not expected to negatively impact their activities, since no fisheries-related discharges or habitat issues are anticipated.

A limited amount of recreational fishing and outfitter activity does take place in the area of the Project area, although it again is primarily confined to Lake Athabasca. The main species of fish sought include northern pike, walleye, lake trout and lake whitefish.

7.4.4 Hunting

Residents of the Lake Athabasca Basin and recreational hunters as clients of outfitter camps, hunt primarily for moose and barren ground caribou. The Goldfields Project is located in Wildlife Management Zone 76.

7.4.5 Tourism and Recreation

Limited tourism occurs in the area and is primarily associated with outfitter camps during the summer and fall months when fishing and hunting activities occur. Fishhook Bay Lodge is currently in operation with regular clientele on the north Shore of Beaverlodge Lake. The clients of this lodge fish primarily on Lake Athabasca. The proposed project will not negatively impact this activity. There may be other outfitting camps in the vicinity, but their presence could not be confirmed.

7.4.6 Forest and Wild Rice Production

Forests in the Taiga Shield are outside of the commercial forest zone and are in the reconnaissance zone. Commercial forest harvesting does not occur mainly due to the remoteness of the forests leading to transportation issues and the size of the trees making them less merchantable. Tazin Lake Upland is characterized by steep treeless slopes and

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 56 closed stands of jack pine and black spruce on the sandy lower slopes. No commercial forestry harvesting occurs within the region.

Wild rice is an introduced grass species that was brought in for muskrat food and has proven to be a beneficial grain for human consumption. However, there is no wild rice crops grown within the project area as most of the production occurs in the central part of the province.

7.4.7 Employment

The Fond du Lac, Black Lake and Hatchet Lake First Nations offer public sector employment in the Athabasca Basin. Other than local government and public sector employment offered by the Provincial and Federal governments and mining opportunities presented by uranium mines southeast of Lake Athabasca, employment opportunities are currently very limited.

GLR is committed to maximizing local and northern employment at the proposed development where feasible while maintaining a viable operation. GLR will employ its own staff in certain professional and technical positions and preference will be given to hiring qualified local residents for all remaining positions. It is important that the mine be operated as efficiently as possible in order to maintain a solid business that can provide employment opportunities. As a result, the amount of personnel employed at any one time may fluctuate.

7.5 PHYSIOGRAPHY

The elevation of Lake Athabasca is 211.5 metres (694 feet) above sea level (ASL). The topographic relief of the area near the Beaverlodge -Goldfields area consists of moderately high hills with the highest being Beaverlodge Mountain at 419.7 meters (1,377 feet). North of the property, near Virgin Lake, the mean elevation of the area is about 450 meters (1,476 feet).

In the northern portion of the Goldfields Property, Contact Lake is approximately 427 meters (1,401 feet) ASL and the surrounding hills of conglomerate of the Martin Group, to the north of Contact Lake, are up to 445 meters (1,460 feet) ASL and hills of basement rocks of the Tazin Group to the south are approximately 455 meters (1,493 feet) ASL. The relief decreases sharply to the north from approximately 445 meters (1,460 feet) to 350 meters (1,148 feet) in the sandstone and arkose units of the Martin Group located between Contact Lake and Cutler Lake.

The topographic relief is controlled by several factors generally related to the glacial erosion. Elongated ridges and valleys trend in the direction of the major fold for the oldfields area and in the Fredette Lake basin. Many of the ridges in the western portion of the syncline are either composed of, or capped by amphibolite. The eastern portion have high hills onsisting of dolomite, while in the

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 57 Fredette Lake Basin have hills and ridges composed of either resistant conglomerate rocks or gneissic granitic basement rocks. Usually quartzite and granites which are jointed have been eroded and therefore are located in the valleys. Fault and shear zones are areas of weakness which are susceptible to erosion resulting in features such as talus slopes, linear deep valleys sometimes filled by lakes such as Vic Lake and Frontier Lake and straight topographic features. The eastern side of the Athona property is bordered by a relatively straight shoreline along which are several small cliffs which continue below lake level. Additional erosional features of the area are caused by the foliation and jointing of intrusives as in the Macintosh granite.

Glacial rivers, discharge channels and alluvial fans are oriented in a southwesterly direction within the Beaverlodge area (Tremblay, 1972). These rivers and channels follow the topography of the area defined by elongated hills of rocks of the Martin Group and Tazin Group formed by erosion and locally fault-bounded. The thickness of glacial deposits over bedrock in the Beaverlodge area may vary from a few centimeters thick to about a few meters thick in low depression areas. A pit dug about 10 km south of Contact Lake near the Fay shaft shows that soil materials vary from a reddish brown sand to a yellowish clay, gravel, and fine sand over a few meters in thickness (Tremblay, 1972). Thicker overburden cover is present in areas lacking outcrops, around lakes and in valleys. Swampy areas in valleys are often composed of humus and peat layers that could measure a few meters to several tens of meters in thickness.

Soils present in areas of high relief and percentage of bedrock exposure are mainly composed of till, sand and silt of various colors (grey, beige, orange, brown and red). Their distribution is discontinuous and patchy. The thickness of till, sand and silty soils vary generally from a few centimeters to tens of centimeters near fractures, faulted bedrock and on some bedrock steps. Tills are rare, being generally of grey to pale brown color, and contain a few cobbles in a clayey matrix. Sand and silt soils are mainly beige, brown, and orange to red. Most of these soil types are transported materials mainly of glaciofluvial to lacustrine origin. However a component of the reddish and brown soils may be locally derived from the underlying bedrock based on soil particles observed near the contact with bedrock (Jensen, 2003).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 58 Fig. 2 Aerial view of Box Mine area

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 59 8.0 HISTORY

Gold was first discovered in Saskatchewan in the North Saskatchewan River near Prince Albert in 1859. Saskatchewan began producing gold in small quantities in the early 1900s and possibly earlier from panning and dredging operations on the North Saskatchewan River and its tributaries. Gold production in the province has been from placer operations on the North Saskatchewan River and from gold and base metal mines in the northern Shield. Of the total production in the province, approximately 90 per cent has originated as a by-product from the Hudson Bay Mining and Smelting Company's copper-zinc mine at Flin Flon. In the period prior to the First World War, gold was discovered on the north shore of Lake Athabasca and in the Amisk Lake area near the present sites of Creighton and Flin Flon. Further prospecting in the 1920s and 1930s culminated in discoveries in the La Ronge volcanic belt, Flin Flon and Beaverlodge areas. By the late 1930s and early 1940s gold was being produced in significant quantities at the Box Mine on the Crackingstone Peninsula and in minor amounts from the Prince Albert (Monarch/Pamon), Graham and Henning- Maloney mines near Flin Flon. Other deposits produced small amounts of gold during trial mill runs.

The Goldfield Project takes its name from the former village of Goldfields, a gold mining VHWWOHPHQWHVWDEOLVKHGLQWKH¶VZKLFKZDVORFDWHGLPPHGLDWHO\ east of the old Box Mine site and west of the old Athona Mine site (Figure 1-2). The larger area has attracted considerable interest over the last half-decade from a mineral extraction perspective.

From 1939 to 1942, Cominco Limited operated an underground gold mine at the location of the Box Mine. The mine processed approximately 1.29 million tonnes of ore having a calculated grade of 1.64 grams per tonne, recovering 1,992,645 grams (65,066 ounces) of gold and 690,642 grams (62,205 ounces) of silver. Approximately 1.2 million tonnes of tailings were generated and deposited into the north end of Vic Lake. A portion of these tailings have also been deposited into and on the shore of Frontier Lake.

The gold boom of the late 1980s resulted in the first significant gold exploration effort in the province's history. Gold exploration figures reached their peak of $55 million in 1988. Large areas of high gold potential still remain unexplored. Five new gold mines have entered production in Saskatchewan since 1987. (Sask. Geol. Surv. 2006).

In 1987, Lenora Exploration Ltd. and Mary Ellen Resources Ltd. (later to become GLR), jointly optioned the Box and Athona properties. Between 1987 and 1994, additional drilling was completed by GLR. The resource database to 1995 included over 26,800 m of core drilling and 3,169 m of reverse circulation drilling results. This information indicated ore reserves sufficient to warrant development of an open pit gold mining and milling operation.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 60 HISTORY OF EXPLORATION

In August 1934 prospectors Tom Box and Gus Nyman discovered gold by Vic Lake, a small lake between Lodge Bay and Neiman Bay, Lake Athabasca (Fig. 8). The samples were submitted to Cominco Limited who immediately staked the Vic group of 17 claims. Shortly after J.E. Day and associates of Toronto staked the Murmac group (later transferred to Murmac Lake Athabasca Mines Limited) to the east. This was followed by general staking by residents of Fort Chipewyan. Subsequently Great Bear Lake Mines Limited (later renamed Athona Mines Limited) staked the Lucky-Willy groups southeast of the Vic group, and North West Minerals Limited staked several groups of claims (including the Hazel, Juca and Max groups) in the Caldwell Bay area. Athabasca- Beaverlodge Gold Mines Limited staked the Yah group in the Fish Hook Bay area. The Melma group, southwest of the Lucky-Willy groups, was also staked in 1934 (later owned by Athabasca Portal Gold Mines Limited). The Bearcat group, near Wabba Lake, was staked by E. Cody, 0. Knutson and J.G. Paulsen, probably at the same time. This group was optioned to Ventures Limited In 1935. The Star group, southwest of the Melma group, was staked in 1935 and later transferred to Greenlee Mines Limited. Gold was discovered on all these properties. Diamond drilling commenced on the Cominco and Great Bear Lake properties in early 1935.

On the Cominco Box property No. 1 shaft was started in July and No. 2 shaft was begun in September of 1935. Detailed prospecting during the rest of the summer roughly outlined the orebody. Diamond drilling started in January, 1935 and underground work in July, 1935. Drilling continued during that year, 27 holes totaling 3148 m (10,328 ft.) being completed. Twenty-six of the holes outlined the orebody down to the 150 m (500 ft.) level and one hole showed the structure to continue to the 300 m (1000 ft.) level. Further drilling was carried out in 1936 and confirmed the outline of the body along strike; two more holes were drilled to the 300 m level. No. 1 shaft, with dimensions 1.8 m by 3.7 m and inclined at 42°, was located for preliminary development toward the west end of the orebody, in the footwall close to the contact. Shaft sinking began in July, 1935. After completion of some lateral underground work, No. 2 shaft (1.8 m by 5.5 m) was started in September 1935. This shaft, a three-compartment production shaft, was located 390 m (1280 ft.) northeast of No. 1 shaft, and inclined 45° at the footwall contact. Levels were established at 30 m (100 ft.), 91 m (300 ft.) and 152 m (500 ft.) levels, measured down the dip. Underground development consisted of 4,892 metres (16,050 feet) of drifting and crosscutting on the 30 metre (100 foot), 91 metre (300 foot) and 152 metre (500 foot) levels measured down dip. Drifts were driven near the footwall contact and horizontal holes were drilled across the orebody (intersecting the main set of gold-bearing quartz veins at 30°). Cross-cuts were then driven across the orebody at each shaft station and elsewhere along the drill holes to check results.

Considerable difficulty of estimating grades became apparent. Three possibilities arose. Firstly, the development of a limited tonnage of comparatively high-grade ore; secondly, the development of cross-zones which included a greater density of cross stringers; or thirdly, the mining of the whole orebody.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 61 In 1937 the decision was made to mine the entire body and stope development commenced. Plans were made for the development of water power and construction of a 1000 tons per day mill. The site of a hydro-electric power plant, capable of developing 6000 H.P., was formed by diverting the waters of Tazin Lake through a chain of lakes to the chosen site on Wellington River, 35 km from the mine. A power unit of 3300 H.P. was installed and a transmission line to the mine site constructed. However in July, 1938 after approximately three-quarters of this work was completed, stope development indicated a much lower grade of ore than anticipated. It was decided to carry out an extensive program of underground drilling designed to intersect the main gold-bearing stringers at right angles. A total of 1870 m (6,132 ft.) of drilling was done at this time. Following this drilling the ore reserves were recalculated and construction work resumed. It was calculated that the value of the ore was less than one-half the original estimate (approximately 0.138 ounce ($4.80) per ton). By early 1939, 3578 m (11,740 ft.) of drifting and cross-cutting as well as 8967 m (29,419 ft.) of drilling had been completed within the orebody.

The Box mine went into production in June, 1939. The mine closed in August, 1942 due to shortage of manpower and financial problems associated with the low grade nature of the ore. The mine produced a total of 64,066 ounces (1,868 kg) of gold from 1,418,320 tons of ore.

The Box Mine and the Athona Mine properties are owned 100% interest by GLR Resources Inc. with Franco Nevada owning a 2% NSR on an area of interest of 10 miles from the external property boundaries of the Box Mine property, Athona Mine property, Fish Hook Bay property and the Nicholson Bay property (Jensen, 2003).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 62

The Northern Rae Province

North of the Athabasca Basin, the Rae Province comprises a number of cratonic blocks largely made up of Archean rocks that are bound by mylonitic to cataclastic shear zones. The intervening terrains contain both reworked Archean and/or Early Proterozoic rocks. Subsequent block faulting during and following the Trans-Hudson Orogen provided sites for fault-bound successor basins filled by clastic sediments and minor volcanic rocks.

The Dodge, Tantato, Train and Nolan domains (fig. 9-1) represent the Archean cratonic blocks and contain granulite to retrogressed granulite facies rocks of mafic to felsic character along with psammitic to pelitic gneisses, garnetiferous felsic gneisses, amphibolites, and iron formation locally. The oldest rocks (~3.4 by) recorded to date occur in the Tantato Domain. These rocks are intruded by at least two younger Archean intrusive suites, the Chipman mafic dyke/sill swarm at about 3.13 by and granitoid plutons between 2.63-2.6 by, and by an Early Proterozoic granitoid suite around 1.9 by. The Beaverlodge Domain (fig. 9-3) was intruded by an orthogonal swarm of unmetamorphosed lamprophyre dykes around 1.8 by. In the Beaverlodge Domain at Beaverlodge Lake, metamorphic grade is lower and a miogeoclinal assemblage, the Murmac Bay Group, includes metaquartzites, metaconglomerate, garnet and biotite schists, dolomitic marble, iron formation, and pillowed basalt and contains 2.33 Ga detrital zircons (Ashton, 2007). These early Proterozoic rocks rest unconformably on 3.0 by old basement and were intruded by 2.0 by old "North Shore Plutons" with which the mines of interest are associated.

The Zemlak and Taltson domains include a complex assortment of migmatitic and cataclastic Archean and Early Proterozoic ortho- and paragneisses. Within these belts continued block faulting led to infilling of a number of successor basins including: the deformed but weakly metamorphosed Waugh Lake, Thluicho Lake, and Ellis Bay groups, which are in turn unconformably overlain by post metamorphic redbeds and minor basalts of the Martin Group. These younger supracrustal sequences were probably deposited between 1.9 and 1.8 by.

The Train Domain, which may be a less deformed equivalent of the Zemlak and Taltson domains, consists of migmatitic and granitic gneisses, which locally have reached granulite facies conditions probably around 2.1 to 2.0 by. There is no known Archean history in this domain, but it has not been well studied.

The Southern Rae Province

The Southern Rae Province has the Lloyd Domain consists mainly of Archean (>2.5 by) felsic (charnockitic to enderbitic) to mafic (noritic) rocks having granulite to retrogressed granulite facies mineral assemblages, and also characterized by the presence of blue quartz. Other rocks include pelitic and distinctive garnetiferous felsic gneisses of supracrustal aspect. Remnants of crustal material older than 3.0 by are found as lensoid pods and blocks of anorthosite, gabbro, and pyroxenite. A substantially younger and larger body of anorthosite, the Clearwater Anorthosite, intrudes the granulite facies gneisses. Towards the eastern margin, which is progressively more sheared, the domain is intruded by younger granites (~1.83 by) and swarms of mafic dykes and sills.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 64

Figure 9-4 General Geology of the Beaverlodge Area with GLR Resources Inc. Property Boundary (modified after Watts, Griffis and McOuat, 1999).

-

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 67 The Western Craton (Lewry and Sibbald, 1977; Macdonald, 1987) forms part of the more extensive Keewatin Zone (Hoffman, 1989), which underlies contiguous parts of the Northwest Territories. The Virgin River-Black Lake Shear Zone separates the Western Craton from the easterly-lying Cree Lake Zone. The later zone of mylonitic rocks form part of the 3,000 km long Snowbird Line that has been variously interpreted as an intercontinental activation structure or a crustal suture within the Trans-Hudson Orogeny. The Western Craton comprises mainly Archean basement, Lower Proterozoic granite plutons and migmatites, and remnants of both Archean and Early Proterozoic supracrustal belts. The Archean rocks have suffered upper amphibolite to granulite facies metamorphism during the Kenoran orogeny. These were later variably overprinted by Hudsonian greenschist to amphibolite fades metamorphism. North of the Athabasca Basin, the Western Craton is formed by several predominantly Archean cratonic blocks, bounded by mylonitic shear zones, and intervening terrains of reworked Archean and/or Lower Proterozoic retrogressed granulite facies rocks. The Western Craton is formed mainly by sediment and volcanic derived supracrustals. Alcock (1936b) termed these rocks the "Tazin Group". Later workers (e.g. Tremblay, 1972) also included derived felsic gneisses and granites within the Tazin Group. Linear zones of intense Hudsonian reworking manifested as zones of refoliation within this part of the craton (Beck, 1969).

9.2 STRUCTURAL GEOLOGY

The supracrustal sequence has undergone at least two periods of deformation with the degree of deformation gradually increases to the northeast. Early deformation resulted in a moderate tectonic foliation (S1) which generally parallels original bedding (S0). A second deformational event resulted in open folding of S1 and the local development of a weak axial planar schistosity (S2).

In the Goldfields project area (fig. 9-3) , a major synclinal structure, with associated minor folds, was produced in the deformation event with the retrogressive green schist metamorphism. The fold axis strikes N 020o E to N 030 o E, the axial trace of a minor fold passes through the Athona property. The Box property lies on its western limb. Most rocks responded to this event by folding. The Box and Athona granitic units, as suggested by several authors, responded in a brittle and brittle-ductile manner (le. the large porphyroblasts, present in both deposits but more in the Box mine granite, rendered them resistant to ductile deformation), developing the fracture sets (at the Box mine) and fracture - shear zones (at the Athona mine) which formed the depositional setting for auriferous sulphide-bearing quartz hydrothermal solutions (Roberts, 1990).

In the Goldfields area, the rocks are deformed into NNW to NE trending folds which plunge gently, 10 o to 25 o south. The limbs of these folds have variable inclinations of 30 o to 45 o in the Box and Athona areas.

The rocks are locally cut by faults and shear zones of variable strike and offset. The oldest structures strike subparallel to fold axes, and trend approximately east and northeast. These faults post date the granitization events recorded in Murmac Bay group rocks. However, they are associated with mylonitization zones within these "granite rocks", and therefore may be a late product of the alteration/deformation event. Later faults are highly variable in strike, northwest, north-northwest, northeast, and east, and predate deposition of the Martin formation. At least four

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 68 periods of faulting are recognized within the Greater Beaverlodge area, these being early faulting from 1900 Ma to 1780-1800 Ma, and normal or block faulting from 1780-1800 Ma to 1630 Ma, 1410 to 1110 Ma and approximately 270 Ma.

The St. Louis Fault is a prominent NE trending structure dipping southerly from 50 o to 55 o, which is traced for more than 10 km from the northern shore of Beaverlodge Lake through Ace and Verna Lakes. Near the shore of Beaverlodge Lake, the fault either deflects westwards through an arc of about 90 o and becomes the ABC Fault, or the latter represents one of many splay faults which extend southwesterly and westerly from this point.

The ABC Fault extends northwesterly about 5.6 km to a point where it terminates against the NE trending Black Bay Fault. The strike varies from 300 o to 330 o with a dip ranging from 40 o to 55 o southwest. The Black Bay Fault is traceable for at least 18 km along the shore of Black Bay on Lake Athabasca, through Cinch and Fredette Lakes and beyond to the northeast. (Jensen, 2003).

9.3 METAMORPHISM

The Western Craton area is comprised of Archean rocks which have been altered by upper amphibolite to granulite facies of metamorphism during the Kenoran orogeny (Lewry et al, 1978). The Archean rocks were later variably overprinted by Hudsonian greenschist to amphibolite facies metamorphism. In the northwest, north of Lake Athabasca, the Western Craton is formed mainly by sediments and volcanic derived supracrustals.

The Murmac Bay Group lithologies have undergone at least two metamorphic and deformation events. The first of amphibolite facies produced the dominant regional gneissic fabric, roughly parallel to the original bedding. The resulting pseudo- stratigraphy has lithological units lensoid shaped along strike. Partial melting to form migmatites occurred, and allowed for the growth of the feldspar - quartz porphyroblasts in specific units in the Box and Athona deposits. The second metamorphic event occurred as a later retrogressive greenschist facies which resulted in the deformation of the existing foliation.

9.4 THE BEAVERLODGE AREA

More than 200 gold occurrences are known and, with the exception of a few placers, all are in the Precambrian Shield. Recent exploration and development during the 1980s focused on the La Ronge metavolcanic belt and more recently on the Glennie Domain. Gold in the Beaverlodge area of northwestern Saskatchewan occurs mostly within granitic rocks of the Nevins Lake Block. The Greater Beaverlodge area hosts a wide variety of mineralization with 1 former gold producing mine, 2 gold deposit with underground development, with an additional 15 gold occurrences, 2 former producing uranium mines with economic gold and platinum group metals mineralization, 4 known uranium - gold - platinum group metal occurrences, 12 former producing uranium mines, 20

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 69 uranium deposits with underground development , an additional 248 uranium occurrences and at least 3 known occurrences of beryliferous pegmatite (Jensen, 2003).

The Goldfields Property (fig. 9-5) area lies within the Western Craton Tectonic Zone of the Churchill Structural Province, located on the north shore of Lake Athabasca in the northwestern portion of Saskatchewan. It lies approximately 23.3 km (14.5 miles) south of Uranium City to approximately 17.6 km (10.9 miles) northeast of Uranium City (fig. 1). The property area is situated approximately 55 km south of the Saskatchewan and Northwest Territory boundary and approximately 75 km east of the Saskatchewan and Alberta boundary. The property derived its name from the former mining town of Goldfields located approximately between the former Box Gold Mine to the west and the Athona Gold Mine to the southeast.

General Geology of the Nevins Lake Block

The Nevins Lake Block (Macdonald, 1983) is formed mainly by supracrustal rocks. It extends from Beaverlodge Lake as far east as Fond du Lac. It is bounded to the north by linear to curvilinear cataclastic zones that include the Fish Lake lineament, Alces Lake Fault and the Oldman Lake Fault (Figs.9-3 & 4). The supracrustals include the Murmac Bay group and similar supracrustals as well as possible correlative quartzofeldspathic gneisses. Metamorphic grade increases from amphibolite facies in the south and west to granulite facies in the north and east. A wide zone along the eastern margin, in proximity to the Oldman Lake Fault, is regionally retrogressed. Discrete granite plutons occur along the Lake Athabasca shoreline. The structural style varies throughout the domain.

Supracrustal Rocks

In the type area around Beaverlodge Lake, the Murmac Bay group (equivalent to Murmac Bay Formation; Tremblay, 1972) comprises mildly metamorphosed and deformed quartzites, calcareous rocks and amphibolites (including volcanic-derived units) as well as subordinate pelites and iron formation. Ultramafic bodies also occur within the sequence, particularly in proximity to amphibolite horizons. These exhibit komatiitic affinity, but it is not clear whether they are intrusive or extrusive (Sibbald et al., 1983). To the north and east, the supracrustals comprise predominantly quartzofeldspathic gneisses with only minor interlayers of Murmac Bay-type lithologies. Thomas and Macdonald (1983) suggest this variation is due to either a sedimentary facies change or exposure of a different stratigraphic level.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 70

Intrusive Rocks

Intrusives include sill-like amphibolite bodies, granitoid rocks and mafic dykes. Amphibolites occur DVVLOOVSDUWLFXODUO\LQWKHTXDUW]LWHVHTXHQFHEXWDOVRDVµUHOLFWERGLHV ZLWKLQJUDQLWHVDQGJUDQLWH gneisses. Granites and granite gneisses comprise intrusive,

PHWDVRPDWLFDQGSRVVLEO\ROGHUµEDVHPHQW W\SHV 6LEEDOGDQG/HZU\ /RFDOO\the granite gneisses are demonstrably derived from the supracrustal sequence (Sibbald and Lewry, 1980). Intrusive granites predominantly comprise leucogranite as well as subordinate feldspar augen granite and late pegmatites. Mafic dykes, probably of more than one age (i.e. pre- and post-tectonic), are locally prominent.

Structure and Metamorphism

Rocks in the Nevins Lake Block have undergone several phases of deformation. In the south, i.e. Lodge Bay area, Sibbald and Lewry (1980) identified two phases of folding which exhibit rapid variations in intensity. Earlier, D, isoclinal folds possess a gently dipping submylonitic axial planar fabric and accompanying strong coaxial lineation. Major upright D2 folds trend north to northeast. These folds are predominantly southerly plunging. They are also accompanied by a coaxial mineral lineation. A D2 axial planar fabric is locally developed within granitic bodies emplaced between D, and D2 events. Further east and north complex fold interference patterns have been reported (e.g. Harper, 1983a). East of Nevins Lake three phases of folding have been identified. The earliest easterly trending isoclinal folds are refolded by upright, northwest trending folds and younger upright northeast trending folds (Harper, 1983a). Several major sets of faults occur throughout the Nevins Lake Block. In the Lodge Bay area the rocks were subjected to lower to middle amphibolite facies metamorphism. Primary features are locally relatively well preserved. The metamorphic grade increases to the north and east. Granulite fades conditions were attained throughout most of the Nevins Lake Block. A regional amphibolite facies retrograde metamorphism is variably developed throughout the area. It Is particularly conspicuous toward the eastern margin of the Block (Harper, 1983a; Macdonald, 1983).

Age Relationships

The age of the supracrustals is not known. Rb/Sr dating of granitic rocks has yielded ages of 2155 ± 40 Ma (Box mine granite) and 2050 Ma (Athona granite) (Bell and Blenkinsop, 1982). The Cameron Island granite was dated at 2010±70 Ma, the Mackintosh Bay Granite at 2020±20 Ma, and the younger Frontier Granite, 1760±100 Ma, may be a resetting of dates within a Hudsonian metamorphic event (Bell & Bikerman, 1985). That study found much scatter in Rb-Sr dating of the Mine Granites which supported the metamorphic origin proposed by Sibbald (1984) and an age of about 2077 Ma close to that of Bell and Blenkinsop, (1982 ). Tremblay (1972) and Harper (1983a) proposed an Archean age for the supracrustals, whereas Sibbald and Lewry (1980) argued in favor of an Apheban age for the Murmac Bay group.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 72 10.0 DEPOSIT TYPE

TYPES OF GOLD DEPOSITS

The known economic gold mineralization deposits are located on the western flank and near the nose of the Goldfields syncline. The two deposits of significance, the Box Mine and the Athona Mine, are low grade and large multi million tonne open pit deposits with excellent potential of increasing geological reserves and with the potential of higher grade gold mineralization suitable for underground mining methods. These and other gold occurrences are related to and controlled by complex structural events. To date, all known gold mineralization is associated with auriferous quartz veining in metasedimentary units, which have been altered, and feldspathized by nearby felsic granitic intrusions, and in felsic granitic intrusives.

The gold occurrences In the Nevins Lake Block are almost entirely hosted within 'late' granitic intrusives that essentially comprise quartz, microcline-perthite and albite. The most favorable intrusives appear to be the smaller, highly fractured, sill-like bodies. Gold mineralization does occur in the larger bodies (e.g. Mackintosh Bay granite) but in these it is preferentially located along the margins, i.e. close to the contact with the surrounding supracrustal rocks.

Within the granitic bodies gold occurs along fractures and within the granite itself. The fractures are commonly filled with quartz. They exhibit a diverse orientation and locally assume a stockwork appearance. Individual quartz veins are typically narrow (less than 10 cm wide) and can rarely be traced more than 30 m. In places the quartz veins form up to 30 percent by volume of the host intrusive. Most workers (e.g. Beavan, 1938; Christie, 1952) believe the gold mineralization is genetically related to the granitic material in which it occurs. Other workers (e.g. Cooke, 1937) suggest the mineralization is much later and is only localized within the granitic rocks because of their physical characteristics.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 73 11.0 MINERALIZATION

MINERALOGY OF THE GOLD DEPOSITS

The gold occurrences of the Beaverlodge area are mineralogically simple and differ from place to place only in the proportions of minerals present. The chief source of gold is native gold, which is associated with several metallic sulphides. In order of abundance these are: pyrite, sphalerite, galena, chalcopyrite, arsenopyrite, pyrrhotite and molybdenite. These minerals occur in silicified and albitized (?) granite cut by numerous quartz veins and stringers. Minor albite, tourmaline and chlorite are associated with the vein quartz. Native gold occurs in both quartz veins and in granite. In the quartz veins most of the gold is fairly coarse and visible. At the Box mine it is less frequently seen because much of it occurs in fractures in pyrite. At the Athona deposit gold is commonly coated on the vein walls, particularly where a thin film of chlorite separates the quartz from the granite. In the granite, gold is commonly associated with pyrite and chlorite.

The exploration activities and the compilation of the available information have resulted in the development of the geological environmental models for gold and gold-platinum group mineralization. It is apparent that some of the mineral occurrences may have similarities to more than one model type and indicates the complex geological setting involved and that several gold mineralization events exists for the Goldfields - Beaverlodge area.

SYNTHESIS AND GOLD POTENTIAL

Gold in the Beaverlodge area occurs in 'late', highly fractured, pyrite-bearing granitic bodies that have been emplaced into primarily quartzitic supracrustals. The origin of the granites is equivocal. Most workers accept a metasomatic or replacement origin whereby 'granitic' fluids replaced parts of the quartzite sequence. Various workers have alluded to such features as a relict stratigraphy within some of the granitic bodies, undisturbed quartzite inclusions, gradational contact relations with surrounding rocks, etc. to support the replacement theory. Recent Rb-Sr isochron work on the Box, Frontier and Athona granites have yielded high initial 87Sr/ Sr ratios (Bell and Blenkinsop, 1982). The high ratios indicate the granites were derived from older crustal material and, hence, lends further support to their metasomatic origin. Beavan (1938) cites the following evidence to support a genetic relation between the gold mineralization and the exposed granitic bodies:

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 74 1. Areal restriction of gold to granites.

2. Relationship of gold mineralization to the primary structural features of the granites.

3. A possible'comagmatic' sequence from granite to auriferous vein solutions i.e. albite-bearing granite; quartz albitite; albite-quartz veinlets; quartz-albite-tourmaline veins; quartz-tourmaline- chlorite-arsenopyrite veins; quartz-chlorite-pyrite vein filling; quartz with metallic sulphides and gold-galena-quartz association. Latest barren quartz. Clearly, then, the gold itself may be derived from older crustal rocks. Sibbald et al. (1983) suggest several potential source rocks in the area, e.g. volcanics, ultramafics, etc. The most appealing possible source rocks are the quartzites of the Murmac Bay group. Locally preserved cross-stratification and interlayers of quartz pebble conglomerate suggest a relatively high energy depositional environment for these rocks. Such an environment may well have been amenable to the accumulation of gold-bearing placer deposits. Such paleoplacer accumulations have not, as yet, been detected. However, the area certainly merits further work. With regard to the presently known granite-hosted gold occurrences further work is also warranted. A large tonnage of low grade ore still remains in the Box deposit. The Athona deposit was only tested to a depth of 76 m below the surface; its depth extent is unknown. The Hazel showings, similarly, warrant re-evaluation for a low grade, open-pit situation.

Moreover, the relationship between the local mineralized structural environment (within the host granites) and the regional structural environment is poorly understood. Beavan (1938) suggests the main veins (i.e. NNE-trending ones) in the Main zone at Athona virtually parallel the axial surface of a major (D2) southerly plunging synform in the Neiman and Goldfields Bay areas. In contrast, the main veins at the Box mine (i.e. NNW-trending) are possibly related to slip along the northwest limb of this same fold. Because of the lack of definition of pre- Dzfold closures it remains a possibility that these deposits (plus Frontier and Murmac showings) may occur at a similar stratigraphic-structural level.

In summary, there appears to be considerable potential for further discovery of gold mineralization in the Beaverlodge area. 'Grass-roots' type exploration could be designed to explore along favorable stratigraphic-structural levels within granitic rocks for mineralization similar to the type presently known as well as to search for possible paleoplacer accumulations. In the latter case gold would likely be very fine and not easily detected by panning. The presence of matrix pyrite may be masked by complete alteration to hematite (related to sub-Athabasca weathering?). Interestingly, however, the presence of matrix pyrite in auriferous quartz pebble conglomerates is not always essential. For example, in the Lower Proterozoic Tarkwa Gold Field of Ghana the matrix in the mineralized conglomerates comprises black sands (Pretorius, 1981).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 75 12.0 EXPLORATION

GLR and its former companies have been actively conducting exploration programs in the Greater Beaverlodge area since 1987. Mary Ellen Resources Ltd. amalgamated with Lenora Explorations Ltd. and AXR Resources Ltd., effective December 31, 1988 to form Greater Lenora Resources Corporation. On July 24, 2001, Greater Lenora Resources Corp. completed a plan of arrangement pursuant to which GLR Resources Inc. acquired all of the assets of Greater Lenora Resources Corporation.

The exploration activities pertaining to the Box Mine Project are summarized below:

In 1987, the Kasner Group of Companies optioned both the Box property from Cominco Ltd. and the Athona Mine property from New Athona Mines Ltd.

During 1988, the Kasner Group of Companies completed 3 diamond drill holes from September 2 to 23. These holes, LB-88-1 to LB-88-3, totalled 1,132.1 metres. Drill holes LB-88-1 and LB-88-2 are located approximately 700 metres northeast of Shaft No.2 and had an azimuth of N310°E, dipping 45°. LB-88-2 is approximately 50 metres at N130°E from LB-88-1 and these holes did not contain significant gold values. Hole LB-88-3 was drilled to test the down dip extension of the Box deposit under Neiman Bay and contained a number of anomalous gold values with the best intersection being 4.663 g/t (0.136 opt) over 3.0 metres (Bowe and Petrie, 1988) (AF 74N07-0328). A 9,000 ton bulk sample from the Box Mine trenches and a 4,000 ton bulk sample from the Athona Mine trenches returned a reported grade of 1.88 g/t (0.055 opt) gold.

Also, a single drill hole (VI-88-1) was completed to test potential of the Vic Lake Fault zone. This drill hole was located at the boundary of the Box Mine and Lodge Bay project boundaries. No significant gold assays were obtained.

During 1988, 52 drill holes were completed totalling 6,381 metres. In the summer, nine diamond drill holes were surveyed with a Mount Sopris down-hole radiometric logging instrument. The survey results indicated none of the holes contained uranium mineralization. A slight increase in radioactivity was detected in the Box Mine granite, foliated granite and hanging wall gneisses, which may be caused.from the decay of potassium in the feldspars and sericite. In 1988, Greater Lenora completed a pre-feasibility ore reserves estimation, using 1934 to 1988 data (AF 74N- 0005)-

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 76 The 1989 drilling program completed 47 reverse circulation drill holes (RCD) with a total footage of 3,169 metres over a small area, 150 metres of strike length. Western Caissons, using a Reverse Circulation hammer drill, conducted the drilling. During the drilling the bit size was reduced every 25metres from 5.5", to 5.25", 5.125" and so on. Individual samples were taken at one-metre intervals. Samples weighed approximately 36kg and were assayed by total cyanide leaching by Casmyn Research.

Samples were assayed by fire assay technique by early participants as well as several drill holes in the 1988 Greater Lenora program. The remainder of the 1988 drill holes and those of the 1989 RCD drill program were assayed by the cyanide leach technique. From 1994 onwards, the complete BQ drill core was assayed by the total metallic technique.

In 1989, Greater Lenora completed on-site metallurgical testing, bulk sampling and 3,199 m of reverse circulation drilling on the Box property and 1,037 m reverse circulation drilling on the Athona property (AF 74N-0005).

Greater Lenora completed 52 drill holes totalling 6,704 metres in 1994. In 1994, they released the results of drill holes B94-109 to -150. These infill drill holes were designed to test the deposit below the level of the existing mine workings.

Between 1994 and 1995 delineation holes B95-151 to 250 and an environmental impact study were completed on the deposit (AF 74N-0006). The Box resources were re-estimated at this time. In 1995, 17 drill holes and an environmental impact study were completed on the Box-Athona mines (AF 7408-0150). In October 1995, the combined reserves for Box-Athona were published. A total of 18,560 metres of BQ diamond drilling in 97 holes were completed during the 1995 summer program. The program was designed to fill in voids from previous drilling programs, define the strike limits and define the down dip extension of the mineralized zone below the level of the proposed open pit. F. Hurdy completed geological mapping of the trenches at the Box Mine. During 1995, the diamond drill holes and several of the original survey monument and mine workings (vent raises, shaft collars, etc.,) were located and surveyed. This information was incorporated into the various databases used for the resource estimations. The surface trenches surveyed at both the Box Mine and the Athona Mine were incorporated into the up-dated database.

In 1996, Greater Lenora announced a new, lower combined resource estimation for Box and Athona deposits. This was published in The Northern Miner May 13, 1996, p1-2.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 77 In 1997, Behre Dolbear completed an audit of the published resources for the combined Box- Athona deposits. In 1997, Pearson, Hoffman & Associates completed a resource evaluation of the Box Mine. In the same year, GLR flew an airborne EM, resistivity, magnetic, and spectrometer survey over the property (AF 74N-0007).

In 1999, Greater Lenora Resources announced intentions to proceed with a small-scale development and production plan which will focus on open pit mining a part of the Box deposit.

In 2001, Greater Lenora Resources stated that an environmental impact study had been completed and Gekko of Australia tried simple gravity separation of Box ore and received excellent recoveries. Greater Lenora also concluded that the Fishhook and Nickolson deposits were unconformity type Au-PGE deposits similar to the Coronation Hill deposit in Australia.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 78 13.0 DRILLING

Initial surface and underground diamond drilling was conducted on the Box and the Athona properties during 1935 to 1939. Diamond drilling by GLR commenced in 1987-1988 on both properties. This was followed by reverse circulation drilling in 1989 and two additional programs of diamond drilling in 1994 and 1995. In total (1935 to 2005), 402 holes totalling 48,561 metres containing 17,226 assays has been completed on the Box property. The underground sampling of the drifts and crosscuts were compiled into 32 psudeo-drill holes totalling 6,548 metres containing 4,385 assays.

13.1 Box Mine Drilling

The Table 13-1 summarizes the diamond drill and underground sampling at the Box Mine.

Table 13-1 Box mine Drill Hole and Sample Summary

The diamond drilling program for 2004 and 2005 was suggested by AMEC to provide confirmation drill holes at or near previous drill holes from the various drilling campaigns since the historical Cominco drill core was not available for inspection and sampling, and the bulk of GLR's core sampling used the whole drill core for analytical purposes. The sampled portions of the drill core could not be inspected, and the assay method used was total pulp metallic analysis. The rejects and pulps could not be used to confirm the analytical results. Table 5 summarizes the collar coordinates of the confirmation 2004 and 2005 diamond drill holes and the previous drill holes that were being confirmed as part of the QA/QC for the Box Mine Project.

The current drilling would also provide the necessary requirements for a Quality Assurance and Quality Control (QA/QC) assay information. The on site supervision was conducted by John Dixon

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 79 with indirect (off site) supervision by Kian Jensen. The 2004 diamond drilling was completed by Can-Drill of Saskatoon Saskatchewan. The drilling equipment consisted of a truck mounted Boyles 20 hydraulic diamond drill with a hydraulic bean supply pump. The initial phase of thirteen NQ size drill commenced on August 23, 2004 and was completed on September 21, 2004. The initial program was to consist of 20 holes; however, all of the planned holes could not be completed utilizing the drill in a truck mount configuration. A second phase of drilling with the rig mounted on skids commenced on December 13, 2004. During the interim between the first and second phase an additional 22 holes were added to the program. Unfortunately, Can-Drill was unable to complete phase 2, and Hy-Tech Drilling of Smithers, British Columbia was awarded the contract to complete the project. Hy-Tech commenced on April 9th, 2005 and completed the drilling on May 9th, 2005. The Hy-Tech equipment consisted of a unitized rig pulled by a John Deere 640 skidder. The drill rig consists of a B-20 hydraulic drill with a bean hydraulic supply pump.

Tri City Surveyors of Saskatoon surveyed the drill collar locations, checked two mine control stations and five 1988 drill collar locations and five piezometer holes by GPS. The Geodetic elevations were derived by a GPS survey (July 19, 2005) tied to Canadian Active Control System benchmarks in Yellowknife and Flin Flon. The geodetic elevations differed by +4.1810 m from Webb (S.L.S.) in 1988 and surveying completed in 1995. The 2004 and 2005 collar elevations were adjusted to the Box Mine survey control elevation.

The 2004 and 2005 diamond drilling program using NQ core size consisting of 15 and 22 drill holes respectively totalled 4,306.82 metres. Of these drill holes, five where drilled specifically for piezometer testing. Piezometers were also installed in three of the previously drilled holes. Information gained from the piezometers will be used in modeling the water flow within the various rock units. All drill core was photographed wet prior to sampling for archive purposes. The 2004 and 2005 drill core boxes were labelled with metal tags and cross piled beside the core logging facilities in Uranium City.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 80 Summary of the Confirmation 2004 and 2005 Diamond Drill Holes Coordinates and the Diamond Drill Holes from Previous Drilling Programs

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 81 13.2 Athona Deposit Drilling

In total (1935 to 2005), 263 holes totaling 23,899 m (12,650 samples) has been completed on the Athona property. Table 13.2 summarizes the diamond drilling completed at the Athona mine by type and location.

Table 13-2 Year(s) Type Location Number Length Length Number of of Holes (metres) (feet) Samples

1935 to DDH surface 44 5,065.60 16,619.42 831 1939 1939 DDH underground 23 1,587.25 5,207.51 765

1987 to DDH surface 55 5,656.20 18,557.09 4,105 1988 1989 RCD surface 11 1,176.00 3,858.27 560

1994 DDH surface 52 4,000.60 13,125.33 1,871 1995 DDH surface 78 6,413.00 21,040.03 4,518

Totals - 263 23,898.65 78,407.64 12,650

In 2006, GLR Resources Inc. conducted a diamond drilling campaign at Athona, totaling 1592 m, on the Mining Lease ML 5523. The diamond drilling program consisted of 16 NQ core size drill holes. The stated purpose of the 2006 summer drilling program was to bring the Athona Deposit up to NI 43-101 standards.

As outlined in the 1995 Simons Engineering Study, the Athona Mine Gold deposit contains 232,900 ounces gold in 3.62 million tons at a grade of 1.99 g/t. These resource estimates are historical and do not meet the standard terminology criteria of the NI43-101 or the CIM Standards on Mineral Resources and Reserves. GLR has not completed the work necessary to verify this historical estimate, as it is no longer relevant as it is replaced by the current estimate prepared by Wardrop as presented in Section 19 of this report. The historical estimate should be considered superceded by the current NI 43-101 compliant resource in this report which incorporates the sixteen drill holes completed in 2006.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 82 Table 13-3. Confirmation Drill Hole Results - 2006.

Total Core Average Hole ID Azimuth Dip(º) length of From To Length Grade (º) (m) (m) Hole (m) (m) Au g/t A06-194 270 -45 75.00 9.00 22.00 13.00 1.53 Including 9.00 13.00 4.00 2.79

A06-195 80 -74 69.00 7.00 17.00 10.00 1.61 Including 10.00 13.00 3.00 3.93

A06-196 90 -73 80.00 11.00 27.00 16.00 1.01 Including 20.00 26.00 6.00 1.30

90 -60 100.00 10.74 39.75 29.00 1.01 A06-197 Including 14.75 24.75 10.00 1.78 73.75 76.75 3 1.8

A06-206 90 -70 110.00 64.00 67.62 3.62 1.32 78.00 81.00 3.00 1.06

A06-207 90 -45 165.00 47.00 55.00 8.00 1.43 80.00 87.00 7.00 1.59 96.00 121.00 25.00 4.23

A06-208 90 -70 130.00 46.00 61.00 15.00 0.51

A06-209 90 -70 110.00 20.00 51.00 31.00 0.53 63.00 70.00 7.00 0.76

A06-210 270 -50 66.00 3.75 37 33.25 0.97

A06-211 84 -70 70.00 1.20 47.00 45.80 1.61 Including 1.20 11.00 9.80 5.33

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 83 In 2006, GLR Resources Inc. completed 6 drill holes as a part of exploration drilling at Athona. Exploration drilling was designed to test higher-grade veins (H, K, L, F and M) which are located east of the proposed Athona pit. The location of the drill holes is also shown in Figure 2 and 4 and information on drill holes length, azimuth, dip and main assay results for gold are given in Table 13-4.

Table 13-4 Exploration Drill Hole Results - 2006.

Total Core Average Hole ID Azimuth Dip(º) length of From To Length Grade (º) (m) (m) Hole (m) (m) Au g/t A06-198 105 -50 118.00 16.00 53.00 37.00 1.09 101.00 104.00 3.00 1.34

A06-199 90 -50 100.00 82.00 84.95 2.95 1.12

A06-200 85 -50 100.45 70.00 80.00 10.00 1.60

A06-201 100 -45 100.30 0.00 29.48 29.48 1.13

A06-202 110 -45 100.00 83.55 88.50 4.95 0.48

A06-203 110 -65 98.00 3.00 8.00 5.00 1.77

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 84 14.0 SAMPLING METHOD AND APPROACH

Details of sampling in 1939 are unavailable. The assumed method would be to split selected holes and whole core sample the remainder. Mason (1988) stated that no core was available from the earlier drilling. A total of 1,705 assay results from surface drilling and 2,959 assay results from underground drilling were available.

Cominco completed underground face, wall, car, muck and stope samples, which involved a variety of sampling techniques such as chip, channel and grab samples. Not all data types (car, muck, face and stope) were used in the resource estimations as they were determined to be unreliable due to the nature of the sampling. These samples do however provide an indication of mineral content and hence act as a guide for other sampling types. The underground wall samples completed by Cominco on the main levels of 120, 160 and 200 plus all drifts and crosscuts were compiled as drill holes and entered into the Box Mine database.

The complete BMG host unit was sampled from all drill holes. Hanging wall and footwall samples were also obtained to determine the assay limits of any mineralized zones outside the main unit. Sampling was also conducted from areas of interest in the hanging wall during the 1987-1995 drilling by GLR. Surface trenching was also conducted but the results are not included in the assay database, as the trenches do not completely cross the BMG units. Trenches were used primarily as a source of bulk samples for various testing programs.

The objectives of the 1988 Drilling at the Box Mine were "to define, at various depths, the hanging- and foot-wall of the mine unit, as defined by mapping; to assay the entire mine unit intersections, and contiguous rocks, at 1m intervals; and to collect samples at depth for petrographic studies, to increase understanding of the controls of mineralization" (Mason, 1988). Sludge samples were collected on 10 foot runs. "Invariably good ground was found and returns averaged close to 100%". The principal objective "was to refine the size of the mine unit..." Drilling was conducted at an azimuth of 310° to 320° at an angle of -45°, to intersect the mine unit at almost right angles. The assay values from the sludge sampling have not been included in the current Box Mine database.

In 1988 Ontario Research Foundation was awarded a contract by Lenora Explorations Ltd. to conduct pilot scale testing of Athona and Box ore bulk samples. A total of 46 samples (15,168 pounds) from the Athona and 15 samples (5,643 pounds) from the Box were tested. The report concludes that "the two ores, as represented by the bulk samples used in the test work, were similar in all matters investigated and all conclusions drawn from the testing apply to both ores. The gold content of the ores, as determined by bulk cyanidation of 500 kg lots was 0.052 oz/t for the Box ore and 0.053 for the Athona ore. Gravity separation at -48 mesh will recover only 25 to 30% of the contained gold, probably due to insufficient liberation at the screen size tested. Flotation of the ore ground to 80% -200 mesh resulted in concentrates grading 0.72 oz/t Au for the Athona ore with a gold recovery of 90.7%. Flotation of the Box ore resulted in a concentrate grading 1.056 opt Au,

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 85 with a recovery of 91.9% of the gold contained in the are. Flotation concentrate cyanidation gave gold recoveries of 97.6% for the Athona concentrate and 96.1 % for the Box concentrate."

During the last half of 1988 a pilot plant was constructed at the Box property to conduct cyanide leach tests on Box and Athona mineralization. A total of 80 batch samples weighing approximately 300 kg were obtained from 41 trenches established at the Box (32) and Athona (9) properties. Samples varying from 1 to 3 tonnes were taken from each trench. Initially the coarse rock was crushed and screened to 1/8". The samples were split by the cone and quarter technique. According to Casmyn (1989) "A 3 tonne sample is coned and quartered to give three one tonne sample cones. Since one leach test is performed for every tonne of sample, the one tonne cone is further split to produce a 303 kg leach feed sample. The sample rejects are stored in barrels in the storage yard. In the case of a 2 tonne sample, the first split results in two one tonne sample cones, which are then coned and quartered to produce the leach sample." The leach samples were screened to 80% minus 200 mesh. Upon completion of the tests Casmyn determined that the "Optimum Residence Time" for the Box was 77 hours resulting in an average gold recovery of 93.1%. The "Optimum Residence Time" for the Athona was 59 hours with an average gold recovery of 92.3%. The results of the 1988 Casmyn leach test "indicate that a significant proportion of the gold in the ore reports to the finer fractions. The results of the leach tests confirm that the ore is amenable to cyanidation. In view of the high gold recoveries obtained through these tests, it can be assumed that most of the gold in the ore is in a recoverable form." During the tests all analytical procedures were conducted at T.S. L. in Saskatoon. A statistical study of the fire assays and leach assays indicate a correlation factor of 0.88 which indicates "a high degree of confidence in the data", Casmyn, 1989.

In 1988, a study of the tailings was undertaken to "a) determine the extent to which coarse visible gold is present in the tailings; and b) help resolve a 0.018 ounces/ton difference between the mine grade and mill grade and, by extension, qualify assays that are being obtained from the current development drilling..." Eight bulk samples were collected from four backhoe pits on the edge of the tailings delta in Vic Lake. The analyses indicate that "the gold in the tailings appear to occur half in pyrite and half as fine visible gold grains; insufficient coarse visible gold is present to cause a nugget effect." The report further states that if the gold in the Box deposit occurs in the same manner as the gold in the tailings the "a cutting factor should not have been required at the Box Mine unless the auriferous pyrite is very unevenly distributed." The 1988 drilling "suggests that most of the gold in the Box Deposit occurs as coarse visible gold, not as pyrite-held gold." Cutting is typically employed to reduce risk due to anomalously high assays. AMEC does not concur with the conclusion stating that cutting should not have been employed due to the paucity of coarse gold in met samples.

During the 1988 diamond drill program, nine drill holes were examined with a Mount Sopris down- hole radiometric probe. The results "indicate that higher-grading gold values are not associated with uranium mineralization, and that uranium mineralization is almost entirely absent at the Box Mine." There is a small pit near Shaft No.2 that is mineralized with hematite, gold and uranium, however this is clearly an exception.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 86 In 1989 a total of 2,715 reverse circulation (RC) samples were collected at the Box. Each sample was 1 metre long and weighed approximately 36 kg. Holes were approximately 20 cm in diameter. Samples were analyzed by Casmyn using the cyanide leach method. Sampling procedures are available in the Casmyn report (1989). The analytical results from the RCD drilling program were not included in the current Box Mine database.

In September 1990, RJK Mineral Corp commissioned Ortech International, to conduct an audit of the leach test program by Casmyn Research & Engineering, on reverse circulation samples from the Box and Athona deposits. The Ortech report indicates that 3,457 20 to 40 kg samples were shipped to the Casmyn plant for testing. Ortech addressed two concerns while the testing was in progress. One dealt with moisture content of the samples prior to leaching and the second dealt with the collection of the slurry sample at the end of the leach cycle. Both concerns were corrected. Ortech concludes, "the leach test program as conducted by Casmyn meets with industry standards."

In 1994 and 1995 the BQ drill core was whole core sampled after being logged and photographed. Analyses were done using the Total Pulp Metallic Method. A total of 2,443 samples were taken in 1994 and 3,469 samples were taken in 1995.

In 1994, in an effort to further decipher the question about the gold in the tailings at the Box Mine, a drilling program was undertaken to fully sample the entire thickness of the Vic Lake tailings. A total of 24 holes were drilled with a modified bit equipped with a flapper value to prevent the liquefied tails from exiting the casing when it was removed from the hole. Collected samples were sent to Saskatchewan Research Council (SRC) in Saskatoon for analyses. Results of the 1994 survey show that although gold is present within the tails, it is not present in significant or economic amounts, These findings indicate that gold was not passing from the mill into the tailings and that the difference between calculated mill head grade and calculated mine production head grade must be due to other factors.

AMEC understands that, prior to 2004; there were no QA/QC data to support the diamond core and underground channel samples. AMEC stated (AMEC, 2004b) that in the absence of suitable QA/QC data, the only means of validating the older data was through a program of confirmation drilling. GLR completed AMEC's recommended confirmation drilling program. The results of the 2004 and 2005 drilling program were used to verify the older data.

The 2004 and 2005 diamond drilling program complied with AMEC's recommendations. The core logging and diamond sawing of the samples were completed in secure facilities in Uranium City. The drill core was geologically and geotechnically logged by a geologist and then the washed and wet drill core was photographed using a digitial camera. All core samples were split with a diamond blade rock saw by a technician. Sample intervals were usually 1 metre except at geological contacts. The drill core was split in a 1/4 and 3/4 ratio. The 3/4 portion of the drill core that nearly equals the volume of BQ drill core, was sent for sample analysis. The remaining 1/4 portion of the drill core

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 87 was stored and archived for future reference. The sample for analysis was placed in a poly sample bag along with the sample tag. The other portion of the sample tag was placed in the core box with the remainder of the drill core. AMEC (2004a) proposed a QA/QC program for the 2004-2005 drilling campaign. Each suit of 20 samples consisted of 17 samples, one duplicate sample, one control standard sample and one control blank. The blanks and standards (CDN-GS-13 and CDN- GS-2A) were purchased from CDN Resource Laboratories of Delta B.C.

Duplicate samples were accomplished by taking two adjacent one-metre samples and placing equal amounts of each of the samples into the two sample bags. The duplicate sample procedure was requested by Scott Long of AMEC as part of the QA/QC procedures. AMEC reviewed QA/QC results for the 2004 and 2005 diamond drilling campaign and found the gold assays to be reasonably accurate. The results of the duplicates were poor. AMEC recommends no further duplicates be prepared in the current manner of informally combining two adjacent 1 m samples.

The completed sample books were stored for future reference and data entry verification. The on- site geological personnel entered all collar, downhole survey, geology and sampling information into the Box Mine database.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 88 15.0 SAMPLE PREPARTION AND ANALYSES

In 1939 conventional fire assay techniques with gravimetric finish were used to analysis the samples. Initial assaying was conducted offsite while later results were determined onsite. Analytical certificates were not located. Results were tabulated from existing drill logs and maps.

The 1988 core was logged and divided into 1-metre sections, except at contacts. Whole core samples were crushed at an on site sample preparation facility. A 5-10cm petrographic sample was collected every 10m in the mine unit and wall rocks. The samples were crushed and pulverized to - 10 mesh; after riffling 200 gm samples were sent to either TSL in Saskatoon or Barringer in Calgary for analysis. At the labs all samples were analyzed by AA, and all samples over 1000 ppb were fire assayed in duplicate. Mason (1988) reports "In a few cases the entire sample was subjected to prior metallic separation... ." GLR was unable to locate the samples separated by the metallic method. Approximately 8.7% of the Box 1988 drilling or 1 in 11 samples were checked once and 4.7% or 1 in 21 samples were checked twice. The coefficient of correlation for the first check value (n=224) is 0.98 and the coefficient of correlation for the second check value (n=120) is 0.96. Approximately 7.4% of the Athona 1988 drilling or 1 in 13 samples were checked once and 1.0% or 1 in 105 samples were checked twice. The coefficient of correlation for the first check value (n=302) is 1.00 and the coefficient of correlation for the second check value (n=39) is 0.99.

Prior to logging the 1994, 1995, 2004 and 2005 drill core was photographed. The 1994 and 1995 core that was not sampled was cross-piled at the Box Mine site. A complete inventory of this core was completed during June, 2005 under the supervision of KAJ. The drill core from the 2004 and 2005 drilling programs was cross-piled beside the core logging facility in Uranium City.

The samples from the 2004 and 2005 drilling programs were placed in secure shipping bags and remained in the core logging facility until they were shipped via air to TSL Laboratories in Saskatoon. TSL prepared the samples and conducted screen metallic assays on the total sample. In this procedure, the entire sample volume was pulped and then screened through a -150 mesh sieve. The plus and minus fractions were weighed. The entire +150 mesh fraction was fire assayed with an AA finish while two 30 gram splits from the -150 mesh fraction were fire assayed also with an AA finish. The weighted average of the plus and minus fractions gives the gold value for that sample. TSL is an ISO 17025 registered laboratory.

TSL employed an internal reference material named AuM-2. AuM-2 is an internal reference material quantified using a round robin with 4 laboratories. For the 2004 samples AuM-2 was assayed 82 times. A total of 0 assays were on the high side (above 5.43 ppm), a total of 0 assays were on the low side (below 4.57 ppm). The mean of 82 AuM-2 results was 4.99 ppm, which is within certified tolerance (5.00 +/- 0.07 ppm). The standard deviation was 0.186 ppm, which is lower than the certified deviation of 0.216 ppm. The total number of "outliers" was 0 (0% of total assays). This is acceptable because at a 95% confidence interval a total of 5% of data could be outside (a total of 4 assays). For the 2005 samples AuM-2 was assayed 156 times. A total of 0

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 89 assays were on high side (above 5.43 ppm), a total of 0 assays were on low side (below 4.57 ppm). The mean of 156 AuM-2 results was 5.00 ppm, which is within certified tolerance (5.00 +/- 0.07 ppm). The standard deviation was 0.195 ppm, which is lower than certified deviation of 0.216 ppm. The total number of "outliers" was 0 (0% of total assays). This is acceptable because at a 95% confidence interval a total of 5% of data could be outside (a total of 8 assays). It is the opinion of KAJ that the sampling, sample processing, sample shipping analytical procedures and security for the 1995, 2004 and 2005 core were conducted well within acceptable standards.

2006 Athona Drill Program Sample Procedure

Drilling was comprised of NQ diamond core with recovery close to 100%. The core samples were cut with a Target diamond blade saw. The samples were sawed half core. One half of the sampled core was placed in a 6mil plastic bag along with sample tag and the other half of the split core was returned to the core box at the end of the sample interval.

The blanks and gold, platinum and palladium standard (PGE Standard ± CDN PGMS-7) as part of QA/QC program, were inserted throughout the drill program.

Core boxes from the 2006 Winter/Spring drilling program were transported to Uranium City for logging and sampling. Aleksandar Mihailovic, BSc. Geol. .Eng, logged the drill cores.

Samples were shipped via Transwest Air commercial flight from Uranium City to TSL Laboratories of Saskatoon. TSL is an ISO 17025 certified laboratory.

GLR, in agreement with Wardrop, decided to perform Au Screen Metallic Assays of the core samples in order to use the same assay procedures as in previous drilling programs at the Athona Mine Gold Deposit (campaigns 1988-89, 1994-95). Previous testing by GLR of Au ore from the Athona Mine Gold Deposit and of the Box Mine show that Au assays was in general un- reproducible unless done for Au by Screen Metallic Assays.

The Au Screen Metallic Assay procedure followed by TSL Laboratories is summarized below and a copy of their procedure is also included:

Summary:

1) Crushing of the entire sample. 2) Entire sample pulverized with 95% passing 150 mesh. 3) Screen entire sample through 150 mesh 4) Assay entire +150 mesh fraction 5) Duplicate assay of -150 mesh fraction 6) Weighted average Au for entire sample.

To evaluate the sample preparation procedure and assay at TSL Laboratories, GLR submitted two international standards continuously added during the drilling program. An international blank

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 90 standard was submitted to evaluate the possibility of sample cross-contamination during sample handling and assay determination. The second international standard was of known Au content and to check the accuracy and precision of the Au determination.

The results of the international blank standard were all below the detection limit of 0.01 g/t Au thus implying that no significant sample cross-contamination for Au paws present during the sample preparation, handling and analysis.

To check the accuracy and precision of the Au determination by TSL Laboratories one international gold standard CDN-GS-2 was submitted regularly with the core samples submitted (one standard sample was included per twenty core samples submitted.). However, GLR ran out of this standard during the drilling program and we had to buy another batch of the same standard. The standard was received with a different batch number (first batch was CDN-GS-2A and second batch CDN-GS- 2B). The recommended Au values for the two batches of this international standard were: CDN-GS- 2A with 2.04 +/- 0.19g/t Au and CDN-GS-2B with 2.03 +/- 0.12g/t Au. The gold standard CDN- GS-2 (A and B) was on total submitted 67 times and the mean value obtained was of 2.02 +/- 0.10 g/t Au (Table 1) which is within the range of the recommended values for both CDN-GS-2A and CDN-GS-2B.

The mean, median and mode values of the two gold standard batches submitted at TSL of 2.02 g/t Au is close to the recommended values for CDN-GS-2A with 2.04 +/- 0.1 9g/t Au and of CDN-GS- 2B with 2.03 +/- 0.12g/t Au, respectively. However an histogram plot of these gold results show that they do not follow a normal for this standard as several values are falling outside the one standard deviation range with more than 10 samples above 1 STDEV and 14 below 1 STDEV (Fig. 3a). This effect may represent sample heterogeneity between the two gold standard batches submitted to TSL. Moreover, it is also possible that the spread in gold values obtained by TSL for a given international standard may be larger than the gold range recommended and obtained from the average gold values from several laboratories. The magnitude of this effect is beyond the scope of this report and is considered small compared to the range of gold values measured in the samples investigated at the Athona deposit.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 91 16.0 DATA VERIFICATION

S. Lomas of AMEC conducted the drill hole audit in late 2004 and recommended that a detailed rebuild of the database be completed by GLR and that AMEC resume the database audit at a later date.

The Goldfields Project contains two separate project areas: the Box Mine deposit and the Athona deposit. KAJ conducted a detailed rebuild of the Box Mine Project database in late 2004 to early 2005. Todd Wakefield of AMEC then resumed the database audit at GLR's offices in Kirkland Lake, Ontario Canada from February 7 to February 10, 2005. The audit included the 2004 and 2005 drill holes up to B05-263.

AMEC audited 5% of the drill holes against their source records. The database was found to be acceptably accurate and suitable for resource modelling and estimation. AMEC checked drill hole collar locations against topography and found a number of errors, which were noted and corrected. Minor data entry errors discovered by AMEC in the collar, survey, assay, and geology data were corrected by GLR.

The Box Mine database has been reviewed on several occasions by AMEC (2004b and 2004c). In previous studies, AMEC identified some data quality issues regarding some of the historical drilling information - primarily assays from reverse circulation drilling. AMEC also identified a series of samples that had only been analyzed using the cyanide-soluble gold method. These drill hole samples and assays were deemed to be inappropriate for estimating resources and were not included in the resource database.

Exploration drilling at the Box Mine deposit can be separated into six distinct campaigns. Five of these campaigns represent surface or underground diamond drilling campaigns. The 1935-1939 Underground Workings campaign represents channel samples collected in the underground workings and compiled into pseudo-drill holes.

AMEC randomly selected approximately five percent of the drill holes from each campaign for validation.

Database checks performed include but are not limited to:

‡&KHFNFROODUFRRUGLQDWHVLQWKHFROODUGDWDEDVHDJDLQVWWKHVXUYH\HGFROODUFRRUGLQDWHV

‡ &KHFNGRZQ-hole survey measurements in the survey database against available original survey data (drill logs, Sperry Sun disks, etc.).

‡&KHFNOLWKRORJ\FRGHVLQWKHOLWKRORJ\GDWDEDVHDJDLQVWWKHRULJLQDOGULOOORJV

‡&KHFNDVVD\YDOXHVLQWKHDVVD\GDWDEDVHDJDLQVWWKHRULJLQDODVVD\FHUWLILFDWHV

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 92 ‡&KHFNWKDWDOOGULOOKROHVLQWKHFROODUGDWDEDVHKDYHFRUUHsponding records in the survey, geology, and assay databases (and vice versa).

‡&KHFNWKDWUHFRUGVLQWKHVXUYH\JHRORJ\DQGDVVD\GDWDEDVHVGRQRWFRQWDLQLQWHUYDOVWKDWH[WHQG beyond the total depth of the drill hole as recorded in the collar database.

‡&KHFNWKDWC)URP YDOXHVLVQRWJUHDWHUWKDQRUHTXDOWR 7R YDOXHVIRUUHFRUGVLQWKHVXUYH\DQG assay databases.

‡&KHFNWKDWQRUHFRUGVFRQWDLQQHJDWLYHYDOXHVIRU)URP7R7RWDO'HSWKRU'HSWK VXUYH\ ILHOGV in the survey, geology, and assay databases.

‡&KHFNWKDWVXUYH\D]LPXWKYDOXHVDUHEHWZHHQDQGGHJUHHV

‡&KHFNWKDWVXUYH\GHFOLQDWLRQYDOXHVDUHEHWZHHQDQG-90 degrees (underground drilling or workings may have valid positive declinations).

‡&KHFNWKDWWKHZHLJKWRIWKHSlus fraction added to the weight of the minus fraction equaled the weight of the total sample for the screen fire assays in the assay database.

‡&KHFNWKDWWKH(DVWLQJ1RUWKLQJ(OHYDWLRQ)URP7RDQG'HSWKYDOXHVDUHZLWKLQUHDVRQDEOH limits in the collar, survey, geology, and assay databases.

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The complete AMEC audit report is located in Appendix B of the Kian Jensen Resource Estimation Report dated December 21, 2005.

16.1 ASSAY DATABASE

The Box Mine drill hole data were provided as a series of Excel spreadsheets. The final data that were used are stored in an Excel spreadsheet named "October 2005 Box DH Database.xls". This spreadsheet contains drill hole collar locations, down-hole survey information, gold assay results, and lithologic data. The various drill hole data were exported from the Excel database to ASCII text files, merged together and imported into MineSight® drill hole files named "BOX? 1.105" and "BOX12.105".

Sample preparation and analytical protocols have been described in previous reports (Jensen, 2003 and AMEC, 2005).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 93 16.2 SURVEY DATABASE

16.2.1 COLLAR SURVEYS

Drill hole collars were reportedly located by conventional surveying methods by a Provincial Surveyor. The drill hole collar data are currently stored in an Excel spreadsheet named

October _2005_Box_DH_Database.xls". The drill hole collar data were exported to two ASCII text files called "survey.105" and "survey.ug" and then imported into MineSight. AMEC compared the elevation of the drill hole collars with the surface topography. The 2004 drill hole collars were found to be about 25 m to 30 m too low. The locations of approximately six other surface core holes did not match the surface topography. AMEC worked with GLR to obtain correct locations for these holes, which is reflected in the project database files.

16.2.2 DOWNHOLE SURVEYS

Down-hole survey data were initially stored in an Excel spreadsheet called "BoxAllCorrected.xls". Only the 2004 core holes were surveyed down-the-hole with the Flexit survey system that measures inclination and azimuth by means of accelerometers and magnetometers. No down-hole surveys were collected for the 1939 surface and core holes, which accounts for about 21% of the core hole data. Inclination (dip) was recorded down-the-hole for about 230 holes totalling about 35,070 m or about 79% of the core data. The azimuth that was recorded for the collar was kept constant for these data. It is unclear how these down-hole dips were collected, but typically bore hole dips were obtained by means of hydrofluoric acid etching of test tubes that were lowered down the hole. It is AMEC's opinion that the paucity of down-hole survey data (azimuth and inclination) is not a significant issue given that most of the drill holes are relatively short. But AMEC also notes that many of these holes are very small diameter (EX and BX) and may have been more susceptible to wandering. AMEC recommends that GLR continue using the Flexit down-hole-survey system for all future drilling campaigns.

16.3 GEOLOGY

Logged lithologic codes were provided in the Excel spreadsheet ("BoxAllCorrected.xls"). These data included bore hole name, from and to depths and an alpha description. AMEC summarized these codes and found that there were a large number of codes with very few samples. AMEC ranked the lithologic data by the number of metres for each unit and then assigned a numeric code for to each rock type. The numeric lithologic codes were then exported to a file called "lith.105' and "iith.ug", which were then loaded to the MineSight® drill hole assay file "BOX11.105".

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 94 AMEC prepared an initial three-dimensional geologic model of the Box Mine Granite (BMG) unit which is the primary host rock at the Box Mine. This three-dimensional wireframe was used in the February 2005 resource model.

AMEC updated the February 2005 BMG wireframe using lithologic codes from the historic and recent drill campaigns. This wire frame was then used to code drill hole assays and resource model blocks and provided the principal constraint for estimating block gold grades.

16.4 TOPOGRAPHY

Surface topography data was provided in the form of an AutoCAD DXF triangulation called "topo box.dxf'. It is AMEC's understanding that this surface was generated from contouring survey control points and bore hole collar elevations (Kian Jensen, personal communication). A more detailed topographic surface is reported to exist and was apparently used in the 1995 H.A. Simons feasibility study. If this surface exists, it should be used instead of the "topo box.dxf' surface. If the detailed surface can not be found, AMEC recommends that a detailed topographic map be generated prior to feasibility study work.

The mine model item "TOPO" was coded using the provided topographic surface. This item provides the percentage of the block located below the topographic surface. The mine model topography field was further modified to account for underground mining by subtracting the percentage of underground mining from the topo field.

16.5 UNDERGROUND WORKINGS

AMEC was provided with underground drift outlines and three-dimensional stope wireframes as AutoCAD DXF files. The 200, 160, and 120 level drift outlines were extruded 2 m vertically to form three-dimensional wireframes. The block model item "UG%" was then coded with the percentage of each block that was inside of the drift and stope wire frames. As mentioned in Section 4.4, the mine model item "TOPO" was updated by subtracting the percentage of underground mining from the topo field to account for mined out areas.

16.6 DENSITY

Approximately 377 bulk density (BD) results were obtained from 10 diamond core holes. The BD determinations were made by TSL and Vizon Scitec using the water displacement method. AMEC obtained the raw data from GLR as four Excel spreadsheets. The data were combined and then merged with drill hole assay and geology data. Simple length-weighted average BD statistics were calculated for logged lithology types and by using a 0.50 g/t gold cutoff grade to sub-divide the samples into "ore" and "waste" categories. Table 16-1summarizes BD values by logged drill hole lithologies and Table 16-2 summarizes BD by gold grade ranges.

Based on the mean BD values shown , AMEC decided to use 2.65 g/cm3 for the BMG unit, and assigned this value to all the blocks in the model.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 95 Table 16-1: Bulk Density by Lithology

Table 16-2: Bulk Density vs. Gold Grade

16.7 ASSAY QUALITY ASSURANCE AND QUALITY CONTROL

AMEC (2004a) proposed a QA/QC program for the 2004-2005 drilling campaign consisting of certified standards and blanks that were to be submitted into each batch of 20 samples. AMEC reviewed QA/QC results for the 2004-2005 drill hole campaign and found the gold assays to be reasonably accurate. The results of the duplicates were poor. AMEC recommends no further duplicates be prepared in the current manner of informally combining two adjacent 1 m assays.

AMEC understands that, prior to 2004; there were no QA/QC data to support the diamond core and underground channel samples. AMEC stated (AMEC, 2004b) that in the absence of suitable QA/QC data, the only means of validating the older data will be through confirmation drilling. GLR completed AMEC's recommended confirmation drilling program. As previously mentioned, the 2004-2005 data were used to verify the older data.

GLR inserted SRMs and blanks to control assay accuracy at their primary laboratory (TSL Laboratories (TSL) in Saskatoon, Saskatchewan, Canada) in their 2004/2005 drilling program. They sampled and assayed core duplicates to control assay precision.

16.7.1 Assay Accuracy

GLR inserted 62 SRMs and blanks in 2004 and 87 SRMs and blanks in 2005 with the Box Mine project drill samples. These control samples represent an insertion rate of approximately 5% of the project samples. Two SRMs were employed by GLR. Both SRMs were produced by CDN Resource Laboratories (CDN) in Delta, B.C., Canada, a reputable SRM vendor, and report expected grades

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 96 within the grade range of expected mineralization at the Box Mine at 1.8 and 2.04 g/t Au (average of 2004 gold assays is 1.15 g/t; average of 2005 gold assays is 1.43 g/t).

The control charts for the SRMs for 2004 and 2005 are shown in Figures 3 to 5. The control charts show the recommended value (RV), upper acceptable limit (UAL), and lower acceptable limit (LAL) as defined by CDN. The SRM results are within acceptable limits except for 2 samples from drill hole B05-268.

These low values (roughly one-half of expected value) are most likely due to a dilution error or a sample switch at TSL. These errors should be followed up with the lab and the submittals reassayed if there was no dilution error (if the lab really thinks the assay was as it was returned).

All blanks returned assays below the analytical detection limit.

The accuracy of the gold assays at TSL is therefore acceptable based on the SRM and blank results, pending explanation of the 605-268 samples.

16.7.2 Assay Precision

GLR submitted a total of 75 core duplicates with the Box Mine project drill samples for an insertion rate of approximately 5% of the project drill samples. The core duplicates were generated by informally combining two adjacent 1 meter sample intervals.

The precision of the gold assays at TSL, based on the results of the core duplicates, is very poor. The core duplicate results for 2004 and 2005 are shown in Figures 6 and 7, respectively. The best fit line (shown in red) is severely affected by the high assay values, but pairs below 2.0 g/t Au show poor agreement also.

This poor agreement in the duplicate pairs is most likely due to poor sampling (the way in which the core duplicates are generated) and/or poor sample preparation. TSL has demonstrated acceptable analytical precision as shown in the SRM assays (Figures 3 to 5). The duplicate sampling and sample preparation protocols need to be revised to address this issue. The metallic screen assays should report similar assays if the sampling process is adequate. The mean of the 2004 original samples is 0.68 g/t Au compared to a mean for the duplicates of 0.61 g/t Au. The mean of the 2005 original samples is 0.77 g/t Au compared to a mean for the duplicates of 1.20 g/t Au.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 97 16.8 Athona Data Verification

Wardrop carried out validation of the data pertaining to 12 (3.3%) of the 361 records which were comprised of core drill holes, RC drill holes, trenches and underground sampling.

Spatial parameters, such as collar and survey records, as well as geology and assay records were reviewed. This validation was carried out on a combination of the MineSight© files, Log II files and assay certificates to identify inconsistencies and potential errors. Original drill log files were not

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 98 available for historic data. Assay certificates were available for the majority of the more recent drill programs. Assay certificates were not available for the historic drilling completed in the 1930's and early 1940's nor for the underground drift and crosscut samples.

Wardrop noted the following from the databases provided:

x Various levels of precision were noted in the spatial coordinates, varying from 1 to 3 decimal places. The coordinates should be resolved in UTM coordinates with the appropriate level of precision. x Multiple assay values were recorded as an average value. Wardrop recommends selecting an individual assay value based on an identified criterion and not to average multiple values. x Gold assay values were noted in units of ppb, oz/st and g/t. Care should be taken moving forward to minimize errors arising from conversions between these units.

Wardrop conducted a site visit to the Athona deposit from August 14 and 18, 2006. Drill holes from the current drilling program were reviewed as well as historic core. Table 14.1 lists the drill holes. Core prior to 1995 was not available for review. During 1995, the complete interval was submitted for sampling so only unsampled intervals were available for review. For the 2006 drilling, the draft logs were supplied along with the core box intervals, Reflex EZ-Shot Drill hole survey records, recovery, and RQD determinations. The sampling procedure was also monitored for these drill holes.

Table 16-3 Site Visit Drill Holes Checked by Wardrop

A06-195 A95-172 A95-164 A95-150 A06-197 A95-171 A95-163 A95-148 A95-178 A95-167 A95-161 A95-146 A95-174 A95-157 A95-154 A95-144 A95-176 A95-165 A95-152 A95-140 A95-135 A95-125

,Q%(7$¶s opinion, the data are useable for this resource estimation. However, more exhaustive diligence should be undertaken as this project moves forward to resolve these issues. If assay certificates are not found or core is not available for some of the historic drilling then additional confirmation drilling may be recommended.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 99 was changed to Athona Mines Limited. Work between 1935 and 1938 consisted of extensive trenching and diamond drilling (7344 m or 24,097 ft.) which located several zones of mineralization. Work was begun on two shafts in 1935. Both shafts were sunk on the Main zone. The No. 1 shaft, a three-compartment vertical shaft, was sunk to a depth of 85 m (278 ft.) with levels at 38 m (125 ft.) and 76 m (250 ft.) and a 30 m (100 ft.) winze from the 38 m level. The No. 2 shaft, a two-compartment shaft 244 m south of the No. 1 shaft, was sunk to a depth of 34 m (112 ft.) with a level at 30 m (100 ft.). Lateral development consisted of 1,016.20 meters (3,334 feet) in the West Zone and 479.15 meters (1,572 feet) in the East Vein on the 38 meter level and 658.37 meters (2,160 feet) in the West Zone and 676.05 meters (2,218 feet) in the East Vein on the 76 meter level. Also, 13.72 meters (45 feet) of raising was completed on the H vein system.

In 1937 the company was reorganized, following the acquisition of Greenlee Mines Limited properties, and renamed Athona Mines (1937) Limited. Bulk sampling of the mineralized zones was achieved by construction of a 15-ton per day pilot mill. The annual report for 1938 indicated the following ore reserves in the Main zone:

Probable ore: 1,340,000 tons @ 0.097 ounce ($3.40) per ton (uncut) or 0.086 ounce ($3.00) per ton (cut)

7RWDOµLQGLFDWHGRUH  LQFOXding probable): 3,485,000 tons @ 0.086 ounce ($3.00) per ton (uncut) or 0.080 ounce ($2.80) per ton (cut)

It was estimated that 70 percent (i.e. approximately 2,500,000 tons) of the ore was amenable to open pit mining based on a 1500 ton per day operation. Operations were discontinued in June 1939. The 1939 company annual report indicated ore reserves as:

Main Zone:

Probable ore: 1,185,000 tons @0.086 ounce ($3.00) per ton East Zone:

Probable ore: 30,000 tons @ 0.26 ounce ($9.00) per ton

Possible ore: 50,000 tons @ 0.17 ounce ($6.00) per ton

Approximately $600,000 had been spent on development of the property up to this time. The Athona mine closed not from the lack of ore or grade, as sufficient development work had been done to bring the mine into production, but no arrangements had been made with Cominco for treatment of ore on a custom basis, and no satisfactory source of power was available for operation of a mill. No further work was reported on the property until 1980, when Pyx Exploration carried out a bulk sampling program. The results of the latter are still confidential.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 101 Geology:

The gold bearing zones at the Athona Mine are from west to east: the eastern portion of the West Mine Granite, the Athona Mine Granite, the Pond Zone and in a prominent en echelon and bouginage quartz vein system of the East Zone. The underground mine development was concentrated in the western portion of the Athona Mine Granite and the eastern quartz vein systems (H, I, J, K veins) on the 125 and 250 foot levels. The Athona West Granite (AWG) is a medium to coarse grained, reddish hematitic altered granite, dipping moderately westwards, containing fracture filling quartz veining within the footwall sheared contact or mylonite zone. The unit is underlain by the central gabbroic to amphibolitic intrusive which separates the AWG from the Athona Mine Granite (AMG).

The Athona Mine Granite (AMG) is porphyroblastic with similar amounts of potassium feldspars and plagioclase. This unit may represent a complex multi-intrusive with variable composition or a metamorphosed sequence of sedimentary lithologies. The northern portion of the original mining claim has exposures of quartzite. The auriferous sulphides are contained within the AMG and in the fracture/shear zone filled with quartz veins trending N020oE and dipping 80o west. The sulphides are less than 1% fine grained pyrite, trace amounts of galena and sphalerite with minor amounts of pyrrhotite. This zone appears to be shallow dipping to the west and is underlain by a thin gabbroic sill which separates a deeper, coarse grained granite locally termed "Tombstone granite". The Pond Zone appears very similar to that of the Athona Mine Granite.

The major quartz vein systems containing the H, I, J and K veins are located at or near the eastern extent of the AMG. The veining has been traced from surface to below the second level and for a strike length of approximately 100 meters. The vein set is a combination of en echelon and boudinage veins trending approximately N010oE and dipping 72o east. Further to the southeast, a parallel to sub-parallel vein sets, L and M veins, appear to be contained within a north-northeast shear/fault zone which may extent towards the vicinity of Shaft 2.

The mineralization occurs within a grey to pink-red megacrystic leucogranite, the 'Athona granite'. The granite body is apparently conformable with surrounding rocks that strike N to NW and dip westerly. The granite is in two parts, separated by an amphibolite (the 'Upper gabbro'). The structurally lower part overlies a further amphibolite body (the 'Lower gabbro'). Underlying the `Lower gabbro' is porphyritic fine-grained granite. NW-SE trending diabase dykes cut the granite and amphibolite (Fig. 9). On the east side of the peninsula is a NNE-trending, easterly dipping reverse fault. The fault contains barren quartz lenses (Beavan, 1938). The Main zone is approximately 24 m wide and appears in plan as a zone parallel to the granite- 'Upper gabbro' contact. It is characterized by numerous parallel quartz veins oblique to the strike of the contact. The veins are rarely more than 8 cm wide. They trend NNE and dip 80° west. The veins are very persistent and can be traced up to 120 m. Narrow quartz stringers commonly branch from the main veins in various directions. The veins occur almost exclusively in the granite. Where they intersect the granite- 'Upper gabbro' contact they pass into the overlying amphibolite, but pinch out within a few centimeters. The total percentage of metallic minerals is low, possibly not more than one

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 102 percent. Sphalerite, galena, pyrite, gold and rare chalcopyrite occur in the quartz veins and the granite. In the granite pyrite is the only common sulphide. Gold in the granite is commonly associated with 'clots' of chlorite; more rarely it fills fractures in feldspar. In the quartz veins sphalerite and galena predominate over pyrite and chalcopyrite. They commonly occur as 'lumpy' aggregates.

Sphalerite and galena generally indicate high grade of local extent. Most of the gold is fairly coarse and occurs alone or with the sulphides in the quartz veins. There is a marked enrichment in gold along the amphibolite contact. The East zone comprises veins similar in attitude and mineralogy to those of the Main zone. In contrast to the Main zone, the East zone exhibits locally two additional sets of quartz stringers. They apparently do not contain gold. Pyrite, galena, sphalerite and gold occur in the main quartz veins. These minerals, but particularly galena and gold, are frequently present as replacements in the wall rock along fractures adjacent to the main veins. The latter fractures are not quartz-filled. The East zone makes ore in two shoots separated by a low grade section. In the higher grade shoot the main quartz vein (up to 10 cm wide) carries more than 3 ounces per ton gold (Beavan, 1938).

Remarks: The Ore Dressing and Metallurgical Laboratories of the Department of Mines and Resources published three reports on the Athona ore (Report numbers 764, 771 and 780). These reports dealt with microscopic examination, cyanidation and flotation respectively. A 670 kg composite sample yielded a grade of 0.09 ounce per ton gold. Tests indicated 94 percent recovery by flotation and cyanidation.

Frontier Mine:

The Frontier Mine deposit and the Golden Pond occurrence are the closest to the proposed Box Mine mill complex and are more advanced than the other gold mineralization occurrences. Both of these areas indicate the potential for substantial gold mineralization and warrant immediate exploration activities. The Frontier Mine deposit was explored by a horizontal adit approximately 100 meters long, which was driven northwest from the end of a small lake, and 185.6 meters (609 feet) of drifting and 104 meters (341 feet) of cross-cuts, prior to 1938. Currently, the Frontier mineralization appears to be of higher grade narrow vein gold style deposit with gold grades ranging from 8.16 g/t (0.238 opt) to 28.18 g/t (0.822 opt) while the recent diamond drilling at the Golden Pond occurrence indicates that it may have the potential of open pit mining with gold grades of 5.07 g/t (0.148 opt) over 15.0 meters (49.2 feet) and 16.53 g/t (0.482 opt) over 13.60 meters (44.6 feet) (Jensen, 2003).

The geological setting of the Frontier Mine deposit consists of alternating sequence of amphibolites and quartzites to arkosic quartzites subjected to auriferous quartz veining in two prominent directions of N010oE and N315oE. The mineralization occurs in a silllike body of fine grained pink granite 6 to 18 metres thick which is emplaced into the quartzite below an amphibolite sill. The granite, quartzite and amphibolite dip 30o southeast. The quartzites have undergone

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 103 silicification and varying degrees of hematitization. Beavan (1938) noted that the oxidation extends at least 180 metres below the surface. The main auriferous quartz veining zone is exposed by surface trenching which is located near the quartzite amphibolite contact. The quartzite zone containing the quartz veining is truncated by the north-northwest Triangle Lake fault (west) and extends along strike to a N315oE fault at the eastern end of Frontier Lake.

The underground workings indicate a lower and upper quartzite-arkosic zones which have been silicified and hematitized and striking in northeasterly direction. The eastern portion of the workings and diamond drilling indicated the existence of two higher grade gold quartz vein zones striking N010oE and N315oE, while the western portion contains a N008oE higher grade gold quartz vein zone.

The location of Frontier Lake and its orientation may indicate a zone of weakness which was susceptible to erosion and a fault zone parallel to the lithological units.

'Bearcat' gold showing (Cody property)

Location: Approximately 1.6 km northwest of Mackintosh Bay and 0.4 km southeast of Wabba Lake.

History and Development: The Bearcat group of claims was staked in 1934 (?) by E. Cody, O. Knutson and J.G. Paulsen. The property was optioned to Ventures Limited in 1935. Considerable trenching was done 1935-36. No further work has been reported since, other than exploration for uranium.

Geology: ESE trending, south-dipping quartzites and calcareous sediments have been invaded by a stock-like body of red to grey granite. The granite is cut by NE-trending quartz veins and stringers, some of which carry pyrite and minor galena. It is reported that no samples carry more than 0.02 ounce per ton gold.

References: Alcock (1936a); Beck (1959), p. 50-51; SEM Assessment File 74N080028 (location of trenching); SMDI 74-N-8-NW Au-4

Murmac showing

Location: North end of Cornwall and Goldfields Bay

History and Development: The Murmac group of 15 claims was staked by J.E. Day and associates in 1934 and later transferred to Murmac Lake Athabasca Mines Limited. Apparently several gold discoveries were made during 1934-35. Cominco Limited drilled six holes (480 m total) on two of the showings in 1936. There is no record of the results.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 104 Geology: The area is underlain by Murmac Bay supracrustals invaded by granitic rocks. Gold mineralization is reported from at least three parts of the claim group. Just west of the north end of Cornwall Bay gold occurs in a quartz vein in grey granite. At the boundary of Murmac Fraction No. 6 and the Cominco property (i.e. approximately 0.8 km northeast of the end of Frontier Lake) gold also occurs in a quartz vein cutting grey granite. Approximately 75 m north of the latter location a series of parallel quartz stringers carry gold.

Remarks: Also in the same general vicinity, approximately 0.8 km WNW of the north end of Cornwall Bay, Beavan (1938) reports gold mineralization on the Rita and Maud groups of claims of Goldfields Mining Company Limited. Here an irregular lens of granite dips gently south and is overlain by an amphibolite sill. Fracturing is localized in the granite below the amphibolite. Narrow, discontinuous quartz-filled fractures trend southwesterly as well as easterly. Pyrite, sphalerite, galena and gold occur in the quartz veins.

References: Alcock (1936a); Beavan (1938); Beck (1959), p. 51; SEM Assessment File 74N080101; SMDI 74-N-8-NW Au-5

Northwest Minerals showings (Hazel showings)

Location: Caldwell Bay area

History and Development: Prospectors C.W. Shearing and R. Alloway discovered gold in the vicinity of Caldwell Bay in the fall of 1934. Northwest Minerals Limited staked the Hazel group of 12 claims over the showings, as well as several other adjacent groups of claims, in September to October 1934. Several gold-bearing zones were discovered and trenched in 1935, especially on Hazel claims 1 and 2. Two drillholes were emplaced on the `Centre zone' on Hazel claim 2 late that year. Further drilling and shaft sinking were recommended for 1936, but there is no record of this work being completed. Gold mineralization was also discovered on the Juca and Max groups. There is no record of development work on these claims. No further work is reported until 1953 when Loranda Uranium Mines Limited carried out some work for uranium in the area. Nothing was done on the gold showings. In 1973 Calgary International Energy Limited did further work in the area. Limited exploration was done in the vicinity of the gold showings which resulted in the discovery of a further (?) gold occurrence.

Geology: Gold mineralization on the Hazel 1 and 2 claims occurs within the southwest part of the large Mackintosh Bay granite body, close to the contact with surrounding quartzites (Fig. 10). In a private report to Northwest Minerals Limited, C.W. McKee describes the mineralization as follows: "A mineralized fractured and sheared zone occurs in intrusive porphyritic granitic rock, varying in width from 100 ft. to 800 ft. and some 2500 ft. long. It is estimated that 35 percent of the zone is exposed rock. The exposed area is mineralized with pyrite throughout, with occasional chalcopyrite, pyrrhotite and galena, and cut by numerous cross and parallel quartz veins and stringers. Fine flakes, clusters and coarse kernels of gold have been located at several points in the zone over a

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 105 length of 1000 ft. and over a width of 240 ft. Substantial gold values have also been obtained from the host rock from various pits throughout the zone." Within this broad area several mineralized zones have been identified by Northwest Minerals Limited (Fig. 10). Calgary International Energy sampled a mineralized zone west of the above zones. A sample from this zone (termed the "upper vein" by the company) returned 0.24 ounce per/ton gold over a 0.6 m width.

References: Alcock (1936a); Beck (1959), p. 51-52; SEM Assessment Files 74N080094, 74N080103; SMDI 74-N-8-NW Au-1

Yah showings

Location: East and southeast of east arm of Fish Hook Bay

History and Development: Athabasca-Beaverlodge Gold Mines Limited staked the Yah group of ten claims in 1934. A considerable amount of surface work was carried out prior to 1936. There is no record of any further work on the gold showings since that time.

Geology: Mineralization on the Yah group occurs within the Mackintosh Bay granite, close to the western contact with the adjacent Murmac Bay supracrustals. The granite contains pyrite and numerous quartz stringers. The latter also carry pyrite and minor galena. Visible gold is present in three zones. No record is available of the grades present.

References: Alcock (1936a); Beck (1959),p. 52; SMDI 74-N-8-NW Au-7

Neely Lake (Borealis Syndicate)

Location: Approximately 16 km northeast of Uranium City, at the southwest end of Neely Lake

History and Development: Gold was discovered at Neely Lake in 1935 (?). The Borealis Syndicate carried out extensive trenching and sunk a small prospect shaft 1935-36. Exploration for uranium was undertaken at later dates but there is no record of any further work on the gold showings.

Geology: The rocks of the area around Neely Lake form part of the 'Black Bay Straight Belt' (Macdonald, 1983). They are mostly quartzofeldspathic gneisses and granitic gneisses as well as subordinate amphibolites. At Neely Lake'Tazin Group' grey quartzites and surrounding granitic gneisses are invaded by small masses of fresh red granite. A granite dyke on the northwest shore of the lake is cut by numerous quartz veins and stringers that occur up to 20 cm wide. Pyrite occurs within both the quartz veins and fractured granite. Gold content of the mineralization is unknown.

References: Alcock (1936a); Beck (1959), p. 52; Christie (1952); SMDI 74-N-9-NW Au-1

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 106 SECTION 18.0 METALLURGY AND PROCESSING

18.1 INTRODUCTION

Although some of the gold is associated with pyrite, in the ore from the Box Mine, test work has indicated that the recoverable values are finely disseminated with some nugget gold. There are no metallurgical or environmental hindrances associated with the mineralization in terms of recovery. Extensive test work dating back to 1936 has determined that the gold can be recovered by a variety of graYLW\DQGOHDFKLQJPHWKRGV)OXFWXDWLRQRIJROGSULFHVIURPWKHPLG¶VJHQHUDWHG additional investigations, resulting in the current flow sheet that uses gravity, flotation, and concentrate leaching methods. The amount of test data conducted is sufficient to design the processing facilities.

18.2 HISTORICAL TEST PROGRAMS

:KROH2UH&\DQLGDWLRQ¶V

Test work for the Box ore was originally conducted by Cominco, when the plant was operated from 1939 to 1942 with underground ore. Whole ore cyanidation with 24-hours retention and Merrill- Crowe precipitation on zinc was employed from ore ground to 55% - 200 mesh. Recovery is reported as between 94 and 98%.

Heap Leaching versus Flotation 1981

In 1981 in order to compare heap leaching with flotation for ore from the Athona mine, Dawson /DERUDWRULHVFRQGXFWHGOHDFKWHVWVRQRUHFUXVKHGWRô´DQGIORWDWLRQWHVWVRQRUHJURXQGWR- 200 mesh. Recoveries were about 20% for the heap leach samples and 92 to 97% for the flotation test.

Gravity Concentration 1988

In 1988 Casmyn Engineering conducted test work at ORTECH that showed that gravity concentration was effective in recovering gold.

Vat Leaching 1988

,QDVFRSLQJWHVWFRQGXFWHGE\,1129$7/LPLWHGLQRUHFUXVKHGWRó´\LHOGHG recovery by cyanidation in a simulated vat leach.

Gravity, Flotation, Cyanidation 1995

Richard C. Swider Consulting Engineers Limited designed and supervised a test program at Lakefield Research on behalf of Greater Lenora Resources Corporation in 1994-5. Work was done on both the Box and Athona ores, including bulk samples at depth and at-grade samples.

Working with A.R. MacPherson Consultants and based on grinding tests performed at Lakefield, work indices were determined, as well as the suitability and design parameters for semi-autogenous grinding.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 107 Tabling demonstrated gravity concentration as an initial test, followed by both batch and continuous spiral concentrator testing.

Flotation of spiral tailings demonstrated effective concentration of gold values.

Cyanidation of gravity concentrates was also demonstrated in the Swider program.

Some liquid-solid separation work was done for environmental purposes as well as pore water determination.

Vat Leaching 1997

Under the supervision of INNOVAT Limited in 1997, leaching of spiral classifier tailings and whole ore was conducted at ORTECH and Lakefield. Both programs indicated economical recoveries on ore crushed to 10 mesh.

Dewatering and Environmental Studies 1996

A program in 1995-6 was conducted at Lakefield Research Limited with input from Pocock Industrial Inc. to determine settling and filtration characteristics of the ore and tailings. Ore characterization studies were made on whole rock, gravity tailings, flotation tailings, and cyanidation tailings, including EPA acid-base accounting, EPA leachate extraction, and size distribution of residues.

Gekko Test Programs 1998 ± 2004

Work began on the current flow sheet in late 1998 and continued through to 2005 at Gekko Systems in Australia and Lakefield in Canada, using the Gekko test protocol. Primary and cleaner gravity recovery in Gekko inline pressure jigs with scavenging in a Falcon concentrator gave recoveries in WKHPLG¶VIRURUHJURXQGWRD3RIPLFURQVIROORZHGE\UHJULQGDQGF\DQLGDWLRQof concentrates. Concentrates produced were tested for leaching in the Gekko inline leach reactor with gold values from solution extracted by direct electrowinning from the ILR.

Cyanide destruction, using peroxide, was tested by Gekko.

Ongoing Test Programs

Acid-Base accounting and cyanide destruction tests are continuing to back up the Environmental Impact Statement as well as further assurance that targets will be met. Current test work involves using the INCO SO2/Air process for cyanide destruction to confirm results and reagent requirements.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 108 18.3 GEOCHEMISTRY

Analysis of ore samples, taken from the Lakefield provided the following values:

Whole Rock Box Ore % SiO2 78.8 Al2O2 11.1 Fe2O3 1.43 MgO 0.37 CaO 0.09 Na2O 3.63 K2O 3.02 TiO2 0.12 P2O5 0.04 MnO <0.01 Cr2O3 0.02 LOI 99.5

Trace Elements

As 0.003 Ba 0.025 Be <0.005 Cd <0.002 Cu 0.01 Co <0.002 Hg <0.00005 La <0.01 Mo <0.001 Ni 0.032 Pb 0.020 S 0.38 Sr 0.0018 ThO2 0.002 V <0.02 Y 0.0029 Zn 0.017 Zr 0.014

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 109 18.4 MINERAL PROCESSING

18.4.1 Introduction

Ore processing at the Goldfields Site employs straightforward, proven technology, based on extensive test programs. Ore is crushed in three stages to feed the process plant that consists of a primary ball mill, gravity plant, scavenging by flotation of gravity tailings, concentrate regrind ball mill, and leaching of concentrates from the gravity and flotation circuits. . The main principle for the gravity recovery has been adapted by Gekko Systems Pty Ltd. of Australia and is currently being employed in Australia and several African countries. Although these examples are all located LQ³ZDUPZHDWKHUFRXQWULHVH[WHQVLYHFRQVXOWDWLRQVZLWKWKHPDQXIDFWXUHULQGLFDWHWKDWQR difficulties are anticipated in operating this system enclosed in a building at the Goldfields Project.

Selection of the gravity circuit is based on the ability of the equipment to recover pyrites in the ore along with the precious metals values, thus isolating the potential for acid generation by rejecting most of the pyrite to underwater tailings at Vic Lake. Similarly, cyanidation is reduced to ten percent of the ore processed. While WAD cyanide is virtually destroyed in the leach circuit, the potential for upset is confined to a relatively small tailings basin.

18.4.2 Comminution Process

18.4.2.1 Primary Crushing

The primary crushing facility is located to take advantage of the site topography. A dumping station can receive two 100 ton trucks at a time. Primary crushing facilities are located in a covered, unheated building.

Ore is delivered by rear dump truck through two stationary grizzlies with 600 mm wide openings into two 100 ton capacity structural steel hoppers protected by abrasion-resistant liners. A common pneumatic rock breaker is positioned to deal with oversize rock at each grizzly when required.

Each hopper is evacuated by a 1200 mm x 4600 mm 30 HP apron feeder, each feeding a 1200 mm x 1800 mm jaw crusher, driven by 200 HP motors through v-belt drives. Nominal rate of feed is 450 metric tons per hour to each crusher. Product size is 80% passing 150 mm. Product is collected on two 600 mm wide by 15 m long belt conveyors, discharging to a common 1200 mm wide by 15 m

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 110 long by 3 m lift belt conveyor. Each collecting conveyor employs a belt magnet at its head pulley to protect against tramp steel penetrating successive belt conveyors and crushers.

18.2.2.2 Coarse Ore Storage

A 60 m long radial stacker deposits up to 140,000 metric tons of coarse ore in an open, 180 degree kidney-shaped pile that is 28 m high. This stacker telescopes, raises and lowers and slews by electric power. The outer conveyor is powered by a 40 HP motor, the inner conveyor by two 10 HP motors. Raising and lowering uses a 7.5 HP motor. Both telescoping and slewing use 1.5 HP motors each. The slewing function is on rails. The ability to raise, lower, and telescope minimizes dusting problems.

18.4.2.3 Coarse Ore Reclaim

Live storage amounting to 22,000 metric tons is reclaimed with two 1200 mm wide by 12 m long apron feeders located in a concrete tunnel located beneath the storage pile. Discharge from the apron feeders is collected onto the secondary crusher feed conveyor. This conveyor utilizes a 914 mm wide belt. The ability to shut off the feed from each apron feeder is accomplished by rod ports in each feed chute. Dead storage is bulldozed into the live storage area as required.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 111 18.4.2.4 Secondary and Tertiary Crushing

Crushing is done in two stages at a nominal feed rate of 400 metric tons per hour. Crushing and screening is done in an unheated, pre-engineered steel frame building. An overhead bridge crane serves the area.

Ore is received from coarse ore storage into a 100 ton surge bin, from which it is fed by 1200 mm wide x 2000 mm 25 kw vibrating feeder to a 3000 mm x 7200 mm vibrating, double deck screen, driven by a 25 HP motor. Top deck of the screen has 50 mm openings, while the bottom has 25 mm openings, providing 80% minus 18.4 mm to tertiary crushing. Undersize is directed by chute to the secondary screen feed conveyor.

A 2000 mm nominal diameter secondary cone crusher with 19.05 mm closed side setting operates in closed circuit with the vibrating screen. The cone crusher is powered by a 250 HP motor through a V-belt drive. Ore discharged from the crusher is circulated to the surge bin ahead of the screen by three 914 mm belt width conveyors, each requiring 20 HP drives. Crushed ore from the secondary circuit is carried by a 914 mm wide 10 HP belt conveyor to the tertiary double deck vibrating screen, which is driven by a 15 HP motor. The top deck has 19 mm openings, while the bottom deck has 9 mm openings. Oversize is fed to a nominal 2000 mm tertiary cone crusher with 9.53 closed side setting, which delivers crushed ore to a common conveyor that also receives undersize from the vibrating screen. This product is delivered to a fine ore storage area by a 914 mm belt by 110 m long, 25 m lift conveyor, powered by a 30 HP motor.

18.4.2.5 Fine Ore Storage

Storage of fine ore is in a conical pile, measuring 24 m high by 73 m diameter. The live storage area, measuring about 30 m in diameter is covered. Suspension of the head end of the feed conveyor and cover frame is by four trusses anchored to concrete footings. Fine Ore Reclaim

Estimated at 10,000 metric tons of live storage, the fine ore is reclaimed by two 1200 mm x 4 m long 10 HP belt feeders that deliver the ore to a single collecting conveyor that feeds the process plant. Dead storage is pushed by bulldozer into the live storage area as required. Feed to the process plant is controlled by a belt scale on the mill feed conveyor, which controls the speed of the belt as well as the speed of the feeders.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 112 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 113 Primary Grinding

All process facilities are housed in a pre-engineered building. The primary grinding area is serviced by an overhead bridge crane. Primary grinding is designed to reduce minus 10 mm ore to a P80 of 350 microns at a new ore feed rate of 5000 metric tons per day. A 4300 mm diameter x 4400 mm ball mill, powered by a 1250 HP synchronous motor operates in closed circuit with a vibrating screen that returns oversize to the feed chute of the mill by means of belt conveyors. Discharge through the mill trommel passes through a pair of riffles, one operating and one standby, for collection of nugget gold. The riffles, while locked, are visible from an overhead grate. Isolating gates are designed to allow cleaning of one side while continuing operation of the other. The riffles discharge to the vibrating screen. The 2400 mm x 4800 mm vibrating screen is powered by a 15 HP motor and has a screen deck with 4 mm openings. 3 - 600 mm belt width circulating conveyors return oversize from the screen to the feed end of the ball mill. The belt conveyors are 5 m, 12 m, and 3.5 m long with respective powers of 3, 7.5, and 3 HP. Screen undersize is taken into a sump with two Warman 8 x 10AH slurry pumps, one operating and one standby with 250 HP motors. Diversion from one pump to the other is accomplished with a Tech Taylor valve in the discharge system and manual cutoff with a knife gate valve on the suction side. The pumps feed a cyclopac for distribution to the gravity processing circuit through a 250 mm pipe. Fundamental process control of the milling circuit is via density and flow measurement in the feed line to the cyclones.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 114

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 115 Gravity Recovery Circuit

The gravity recoverycircuit has been designed to recover free gold and sulphides as they are liberated in the grinding circuit. Circulation through the gravity circuit is through a cyclopac of 6 - 400CVX cyclones. Overflow with P80 350 micron material is directed to a collection launder and piped to the flotation circuit. Underflow, which has roughly maximum 500 micron-sized ore particles, is collected in a launder and distributor to 6 Gekko IPJ2400 inline pressure jigs, each with pulsing powered by 5 HP gearmotors. Each cyclone and IPJ 2400 jig can be isolated for maintenance by manually-operated knife gate valves. Tailings from the Gekko IPJ 2400 jigs report back to the mill feed by gravity flow. Concentrate is pumped by means of a Warman 8/6H slurry pump to a pair of Gekko IPJ 1000 cleaners.

Flush water for all jigs is maintained by using a head tank with flow adjusted by manual valves. Water is provided from the reclaim water circuit in the leach plant. Concentrate from the cleaner jigs reports to a sump from which it is pumped to a thickener in the regrind area. Tailings from this jig are returned by gravity to the primary mill discharge sump. The overall gravity circuit is designed for an average mass pull of 6% with, when combined with the flotation circuit concentrate, a maximum of 10% mass pull of plant feed at 5000 metric tons per day.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 116 .

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 117 Flotation

Cyclone overflow from the gravity circuit reports to a 2750 mm diameter x 3000 mm flotation conditioning tank, where reagents are added and the pulp conditioned prior to flotation. Feed rate to the flotation circuit is 21 metric tons per hour of solids. Six m3 Denver DR Flotation roughers with 15 HP agitators are used followed by 1.4 m3 cleaners with 5 HP agitators. Tailings from roughers and cleaners flow by gravity to a pump box with a 40 HP 4 x 6 SLR pump, which delivers the waste to a belt filter via a 150 mm pipeline. The reagents used in the Flotation Circuit will include potassium amyl xanthate and R208 as collectors and MIBC for the frothing agent. The overall flotation circuit is designed for an average mass pull of 4% with, when combined with the gravity circuit concentrate, a maximum of 10% mass pull of plant feed at 5000 metric tons per day.

Waste Disposal ± Gangue Material ± Flotation Circuit

Tailings from the flotation circuit are de-watered in a 22 m2 belt filter. The belt has a 15 HP drive. Vacuum is provided by a 200 HP water ring pump with filtrate removed from a receiver by a 15 HP pump. Filter cake, with a target of 10% moisture, is collected on a cross belt conveyor of 2 HP, which transfers the cake to a discharge belt conveyor. This material is conveyed on a 914 mm wide belt to a surge bin located next to the process building. The 200 metric ton capacity bin has an air- operated gate, which opens upon positioning of a 100 ton truck, closing after the truck is full. Waste tailings are then delivered by truck to the waste dump area. This disposal option is viable due to the benign characteristics of the flotation circuit reagents. These reagents will only be found in trace amounts within the entrained solution of this filter cake. This tailing filter cake will have an approximate moisture content of less than 10.0%, i.e., the solution recovered for recycling will therefore approximate +90.0%. This lost solution will require replenishment from the process water source.

Flotation & Gravity Concentrate Treatment Process Regrind

In preparation for leaching, the 350-micron material is ground to a P80 of 50 microns at a new ore feed rate of 500 metric tons per day. Concentrate is delivered from both the gravity and flotation circuit at about 45 % solids by weight. A 15 m diameter high-rate thickener with 10 HP rake drive increases the feed density to the regrind mill to 60-70% solids by weight. This ball mill is nominally 1900 mm x 3000 mm and is powered by a 250 HP motor. The mill operates in closed circuit with a pair of 300 mm cyclones, one operating and one standby. Circulating flow, which is 250% of new feed, is provided by a 2 x 3 SRL pump working from a pump box located beneath the mill discharge trommel. Mill control is achieved by using density and flow measurement with a variable speed motor on the circulating pump. CaO is added to the thickener feed to control the pH of the leach circuit with flocculent added as required. Overflow from the thickener reports to the reclaim water tank for distribution within the Primary Grinding, Gravity and Flotation circuits.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 118 Leaching

Regrind and feed thickener and leach circuits are located inside the process plant. Leaching is located in an area bounded by concrete block walls sized to contain complete spillage of one agitated tank.

Carbon-in-leach is selected, using activated coconut shell carbon loaded to 10-20 kg/metric ton in the circuit. Levels of pH are controlled to above 10.0 with addition of CaO in the thickener. NaCN is added to the first of four agitated tanks, measuring 8 m diameter by 9 m high, maintaining an operating level of 5 g/L of NaCN. Propeller agitators are used with 40 HP motors.

The Leach Circuit reagent requirements as noted will include a flocculant, hydrated lime and sodium cyanide, Carbon is advanced from tank to tank, counter-current to the slurry flow with the use of 3 HP open impeller pumps, operating once per shift. The carbon is pumped to a 1200 mm x 2400 mm dewatering vibrating screen with the oversize reporting to the carbon circuit and the underflow returning to the final leach vessel. A safety screen identical to the dewatering screen but with a finer mesh is used to prevent carbon losses in the final leach tank discharge.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 119 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 120 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 121 Cyanide Destruction

Tailings from the leach or cyanidation circuit are less than 0.20 g/L WAD cyanide. The objective or target for destruction of cyanide is to reduce WAD cyanide levels to less than 0.5 mg/L. This will be achieved through the use of aeration methods which are designed to both reduce WAD cyanide concentrations and enhance natural evaporation rates, within the Tailings Management Facility (TMF); this aeration treatment will under normal operating conditions, allow this TMF to operate with zero discharge of effluent to the environment. In the event of upset or adverse climatic conditions, a cyanide destruction facility is provided to ensure discharge compliance with Metal Mining Effluent Regulations (MMER) for discharge of tailings effluent. This facility will use Na2S2O5 with a Cu2SO4 catalyst and air in a 5 m diameter x 6 m high agitated tank. A propeller agitator with two sets of blades is used with a 30 HP drive. Tailings from the cyanide circuit are pumped to a thickener by use of a 5 HP SRL pump.

Leach Circuit Tailings Disposal

Tailings are thickened in a 15 m diameter high rate thickener with a 10HP rake drive. Target thickening is to 60-70% solids. Underflow is withdrawn and delivered to the tailings dam by a 76 mm diameter, insulated pipe, using a 1.5 x 2 - 5 HP SRL pump. Thickener overflow is recycled to the regrind and leach circuit.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 122 Carbon Elution and Electrowinning

Activated carbon from the leach circuit is washed with HCL or H2SO4 to remove calcium buildup. This is done in a polypropylene vessel. Stripping of gold values from the carbon is done in a carbon steel elution vessel and using 2 % NaOH and 2% NaCN in barren solution. Pregnant solution from the elution vessel reports to a polypropylene electrowinning tank, where the precious metals are collected onto steel wool cathodes with barren solution returning to a holding tank.

Sludge washed from the cathodes is pumped to a 1 m x 1m x 24 plate-and-frame filter. Filtered cake is dried in an electric oven, and then smelted into doré in a propane-fired Wabi furnace. Electrowinning, filtering, drying and smelting are done in a secure area with doré bars stored in a vault.

Carbon Reactivation

A propane-fired rotary kiln is used for reactivating carbon. Carbon is heated to 650 to 750oC for 15 to 30 minutes. Carbon is quenched in a stainless steel tank prior to delivery to the leach circuit.

Reagents

All reagent mixing and dosing equipment is contained within the modular design of the process equipment and is integrated with the various components of the ILR system. GLR will develop a detailed spill prevention and response plan for all reagents transported to and used on site prior to undertaking such activities.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 123 All reagents will be transported to site by an approved carrier and stored in appropriately constructed facilities. It is anticipated that all reagents will be transported to Stony Rapids on the winter road and then barged to the site where they will be stored until required. As a result, the Goldfields Projectwill maintain an on-site inventory of reagents.

Sodium cyanide will be transported in one tonne package unit boxes provided by the cyanide manufacturer in order to reduce the risk of spillage and to contain dust. It will be stored on site within a facility that will include secondary containment. Transport and storage in a dry state will assist with spill recovery.

18.5 SOLUTION MANAGEMENT

The Box Mine Project area enjoys a semi arid climate where annual precipitation averages 355 mm and evaporation rates average 300 mm. This climate and the metallurgical processes selected for ore treatment provide this project with an opportunity to optimize solution management and minimize required discharges of solutions to the environment.

The following Table quantifies the expected yearly average requirements for make-up solutions:

Annual Make-Up Water Requirements Waste Dump Facility m3 25,204.04 Grinding Flotation & Gravity Circuits m3 162,000.00 Leach TMF m3 29,472.83 Box Pit m3 - Annual Make-Up Water Requirements m3 216,676.87

18.5.1 SOLUTION SOURCES REQUIRING MANAGEMENT

There are three primary sources of solutions that require management. These solutions emanate from:

1. Waste Dump Facility; this facility will ultimately cover an area equivalent to +100 hectares. Precipitation and entrained solution in the Flotation Circuit tailings are the principal sources of solutions impacting this facility.

2. The Tailings Management Facility (TMF); this facility will receive cyanide solutions from the Leach Circuit and natural precipitation. Additionally, grey water, emanating from human sewage generation, will be added to this facility. However, this source is deemed to be minimal as employees will be housed in Uranium City.

3. The Box Pit; this area will additionally receive both natural precipitation and ground water seepage.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 124 18.5.1.1 Waste Dump Facility

The Waste Dump facility will ultimately store 31 million cubic meters of waste and Flotation Tailings. This Waste Dump will further cover an estimated 100 hectares of area to a nominal height of 30 meters. To minimize the affects of precipitation, the surface of this dump will be inclined at +2½% to ensure that precipitation will not penetrate the surface of this dump. Further, the Waste Dump will be constructed in 6 meter lifts; this allows the action of the trucks dumping their loads in this facility to both compact the lift and the concomitant surface area. This action will eliminate the entrainment of suspended solids in this effluent. Further, during the winter months, snow accumulating on this dump will be removed and piled such that ensuing melting will not impact this facility.

The deposition of Flotation Tailings, within the Waste Dump, will further introduce approximately 10% of their weight in the form of water. The expectation is that this pore water entrained in this tailings filter cake will not migrate.

Waste Dump effluent collected in the retention pond will be used for Dust Control on site roads and because of its quality will be reintroduced into the reclaim water system for the Process Plant, during the summer months. Approximately 12 cubic meters of water per hour, during 6 months each year, will be required for dust control purposes. The following Table is provided to quantify the solutions available for possible recycling, dust control and/or discharge to the environment.

Waste Dump Annual Solution Balance Climatic Conditions Annual Precipitation mm 355.0 Annual Evaporation mm 300.0 Waste Cubic Meters m3 24,000,000.0 Tailings Cubic Meters m3 7,584,137.9 Waste Dump Properties (LOM) Catchment Area (Final Dump Area) ha 105.3 Runoff Coefficient (terrain) 0.8 Annual Solution Balance Volume Precipitation - Evaporation m3 46,323.4 Volume Entrained Solution - Filter Cake m3 162,000.0 Less Snow Removal (12.5%) m3 -5,756.7 Less Dust Control m3 -51,840.0 Less Retained Solution - Filter Cake m3 -162,000.0 Less Precipitation - Redirected (30%) m3 -13,816.0 Annual Solution Excess/Deficit m3 -25,204.0

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 125 Leach Circuit Tailings Management Facility

The Flotation and Gravity concentrates entering the Leach Circuit will introduce solutions equivalent to approximately 35% of the solids fraction by weight. Sufficient solutions will be recycled from the tailings thickener to dilute these concentrates to the 45% pulp required for the CIP treatment.

As the maximum Mass Pull anticipated for these concentrates is 10% of the total tonnage treated, the amount of solution added and requiring management will be 135 tonnes or cubic meters of solution daily. This is based on the daily process tonnage of 5,000 tonnes. Additionally, natural precipitation will add additional solutions to this facility. The surface area of this facility is approximately 36 hectares. Lastly, the generation of Human Waste will be minimal. As employee accommodations are located in Uranium City, the anticipated volume of solutions will be limited to less than 10 liters/person/shift worked.

$VWKH70)¶VXOWLPDWHHOHYDWLRQLVNHSWXQGHUthe 222 meter elevation, hydraulic head will be minimized and seepage from this facility will be minimal. As solution levels increase during the operation of this facility, the margins of this facility will be monitored to define seepage points. Should zones of filtration be defined, a slurry of bentonite clays will be introduced into the pond proximal to the filtration zone; experience suggests that the presence of bentonite clays and suspended solids will migrate and seal these surface zones of fractured rock and eliminate seepage.

Vic Lake Tailings Management Facility- Available Storage Volumes ([WUDFWHGIURP80$¶V(,6'RFXPHQW Elevation Area (m2) Incremental Volume Total Volume (m3) (m3) 215 75,585 584,380 220 95,041 426,565 1,011,761 225 111,300 515,851 1,632,460

The following Table is provided to quantify the volume of solutions that will require solution management annually, from this TMF. It is the intent of GLR to operate this facility with zero discharge requirements. However, should discharge become a requirement, this effluent will be treated and will meet MMER discharge criteria, prior to discharge. If upset conditions persist and this treated effluent fails to meet MMER criteria, the effluent will be pumped into the Box Pit and retreated, to compliance standards, prior to discharge.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 126 Vic Lake Tailings Management Facility- Annual Solution Volume Treated

Climatic Conditions Annual Precipitation mm 355.0 Annual Evaporation mm 300.0 Vic Lake TMF Characteristics Runoff Coefficient (terrain) 0.8 Catchment Area ha 36.0 Initial Lake Area ha 9.0 Initial Lake Elevation m 217.6 Initial Lake Volume m3 772,202.0 Ground Water Seepage (Yearly) m3 -30.0 Total Tailings Volume - Life of Mine (LOM) Specific Gravity Pulp Solids tonnes/m3 1.45 Total Concentrate Tonnes Processed LOM tonnes Total Volume Settled Concentrate Tailings LOM m3 753,034.5

Annual Leach Tailings' Properties Concentrate Tonnes Processed (10% of Ore) tonnes 180,000.0 Moisture Content - Pulp Entering % 35.0 Moisture Content - Pulp Exiting % 35.0 Volume of Tailings m3 124,137.9 Pore Space Volume Settled Tailings % 40.0 Volume of Solution in Tailings m3 63,000.0 Solution Entrained in Tailings Pore Spaces m3 -49,655.2 Solution Decanted from Tailings m3 13,344.8 Volume Natural Precipitation - Evaporation m3 15,840.0 Human Waste Grey Water (10L/Shift/Employee) m3 288.0 Annual Solution Volume Requiring Treatment m3 29,472.8

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 127 Prior to discharging additional tailings into Vic Lake, the site of the TMF, the 800,000 cubic meters of water present will be drained from this facility. The current discharge from Vic Lake is 217.5 meters. A dam structure will be constructed to raise this level to 222 meters. Under upset conditions, a Gabion basket permeable dam covered with geo-membrane will allow clarified solution to exit the TMF at this elevation. This solution will then enter an impermeable treatment pond located within Vic Creek where this effluent will be treated and residual WAD Cyanide will be destroyed. As denoted previously, this treatment will ensure compliance with MMER discharge criteria.

The application of subaqueous deposition of tailings will ensure that the formation of surficial ice will not interfere with tailings deposition and will prevent oxidation and possible acid generation. Settled tailings will have solutions entrained in their volume. Pore space will be equivalent to as much as 40 percent by volume initially. As the settling action continues and consolidation takes place, this pore space volume will be reduced to approximately 30%. Consolidation is promoted by the superincumbent weight provided by additional tailings deposition. The expected tailings discharge cyanide concentration, from the Leach Circuit, to the TMF, is 350 ppm Weak Acid Dissociable Cyanide (WAD), at a pH of approximately 10.5.

As indicated, the annual quantity of TMF effluent requiring treatment is 29,000 cubic meters. In summary, the implementation of appropriate TMF operating procedures will ensure appropriate pond levels, to accommodate storm events and upset conditions and ensure minimal cyanide concentrations within the TMF. By augmenting natural evaporation rates, this TMF is expected to operate under zero discharge conditions. Adequate treatment capacity is provided by GLR, in the design of the TMF, to ensure that should effluent discharge be required, that this effluent will meet MMER discharge criteria.

The Box Open Pit

The Box Open Pit will receive natural precipitation from a catchment area of approximately 9.7 hectares. Due to the proximity of the pit to the TMF it is important to maintain minimum solution levels within the TMF. By reducing hydraulic head in the TMF, solution seepage into the pit will be kept to a minimum. It is anticipated that pumping will not be a requirement, from the pit.

Generally, the ore and waste extracted from this pit will adsorb the precipitation entering the pit. In the event that pumping is required, this water would be used as make up water in the Process Plant and/or for dust control. Should excess solution not comply with MMER Standards, this solution would be discharged to the TMF.

The following Table quantifies the volume of water to be adsorbed annually, by the ore and waste extracted from the pit

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 128 Climatic Conditions Annual Precipitation mm 355.0 Annual Evaporation mm 300.0 Box Pit Properties Runoff Coefficient (terrain) 0.8 Catchment Area ha 9.7 Volume Natural Precipitation - Evaporation m3 4,254.8 Ground Water Seepage (Yearly) m3 5,100.0 Annual Solution Excess/Deficit m3 9,365.3

Tonnes Ore Waste Extracted Annually tonnes 7,505,640.0 Tonnes Excess Solution tonnes 9,365.3 Increased Moisture Content by Weight % 0.12%

The increase in moisture content is negligible and it is reasonable to assume that material extraction will adsorb this quantity of solution

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 129

Table 19-2 summarizes the drilling data by type and orientation. The holes are broken into steep (- 85° to - 45°), shallow (±45° to ±5°) and flat (±5°) orientations according to which octant they were drilled towards. The octants shown in Table 19-2 are relative to the rotated local mine grid system (42.9103° west of true north). As can be seen in Table 1 9-2, the majority of the core holes were drilled steeply towards mine grid north in order to intersect the BMG at near right angles.

Table 19-2 Drill Hole Orientations

Figure 19-1 is a plan map that shows the distribution and general orientation of the drill holes and underground samples that was used to estimate gold resources for the Box Mine project. The drill hole data are located on approximately on 25 m centres as illustrated using the100 m x 100 m grid shown in Figure 19-1.

19.2 ASSAY STATISTICS

19.2.1 GOLD ASSAY STATISTICS

Raw uncapped gold assay statistics are summarized by sampling campaign in Table 10 at four cutoff grades. Uncapped gold assay grades were summarized in Table 11 by sample type at four gold cutoff grades. Basic descriptive assay statistics by primary sample type are graphically shown in Figure 9 which is a box plot showing the minimum, first quartile, mean, median, and maximum raw gold grade values for surface core, underground core, drift channel samples, and cross cut channel samples. Uncapped gold grade statistics are summarized by assay method at four different gold cutoff grades for uncapped assays in Table 12. Uncapped gold grade statistics are summarized by selected logged lithologies at four different gold cutoff grades in Table 13. Uncapped gold grade statistics were summarized relative to the BMG wire frame (i.e., inside or outside) that was used to constrain the estimate of gold resources in Table 14 at four different gold cutoff grades.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 131

Table 10

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+

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 136 19.3 FINAL DATA SELECTION AND ADJUSTMENT

19.3.1 INTRODUCTION

Where multiple sampling methods and campaigns are used, it is common to compare the frequency distributions of one sample method or campaign versus another to check for biases. There were nine distinct drilling campaigns and three sampling methods used at the Box Mine: surface diamond core (DDH), underground diamond core, and underground drift/ cross-cut sampling. Table 15 lists the campaigns and sample types. The data from the different campaigns were compared to investigate for possible biases.

Box Mine Sampling Campaign Types and Codes

19.3.2 DECLUSTERING

Samples collected by different methods and campaigns typically are unevenly distributed throughout a deposit. To compare two data sets, a nearest neighbour model was created in MineSight® to store distances from a composite to a block, for each of the sampling methods and campaigns. The model was built using 3 x 3 x 3 m blocks. Nine variables were created, one for each campaign or sample type. The block model was exported to an ASCII file that was further processed to create files appropriate for a detailed analysis and comparison of the various sample types.

A program was written to select blocks based on a combination of sample types given the constraint that samples would have to be located within 10 m of accepted composite intervals and contain data from both data sets being selected. The percentiles of the two sample sets were plotted against each other in an effort to identify bias. Other search distances were also tested to verify that an adequate number of samples ere being selected, but 10 m turned out to be adequate.

19.3.3 PERCENTILE-PERCENTILE (P-P) PLOTS

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 137 A percentile splits data into hundredths. The twenty-fifth percentile is the same as the first quartile, the fiftieth percentile is the same as the median, and the seventy-fifth percentile is the same as the third quartile. if two distributions are the same, their individual percentiles should be the same, and when the percentiles of one distribution are plotted against another, then they should follow a line where y=x. If the points fall off the line, the distributions are dissimilar.

If distribution A percentiles are plotted using x coordinates, and distribution B percentiles are plotted using y coordinates, then A will be biased high with respect to B if the point falls below the line y=x. Conversely B will be biased high with respect to A if the point falls above the line y=x. Several P-P plots have been made comparing the most "recent" drilling (2004-2005 campaigns combined) to all the other sampling campaigns. Samples from the latest drilling campaigns (2004 and 2005) have been used as the yardstick against which all other campaigns have been compared because it was felt that this would form the most reliable baseline dataset, as these campaigns were subjected to a reasonable QA/QC program.

Subsequently, a combination of sampling campaigns was also plotted against the most recent data. All the data collected before 2004 were combined to form the "historical" data set; similarly, the 1939 surface core and 1988 through 1995 surface core samples have been combined to represent "surface" samples; the 1939 underground core, the cross-cuts, and drift samples were combined to form the "underground" data set; the samples from 1988, 1994, and 1995 surface core were also combined and compared against the 2004/2005 core; finally the 1994 and 1995 samples were combined and tested against the "recent" drilling. Tables 16 and 17 show the basic statistics for all the combinations of sample type/campaign. Histograms and cumulative frequency plots for all combinations have been run. Appendix C shows all plots. Appendix D shows all the P-P plots. (see original report for Appendices).

Figures 10 through 13 show P-P plots comparing nearest neighbour estimates for blocks estimated by samples from the surface, drift, crosscut, and underground campaigns compared against 2004/2005 core. For all charts, the blocks selection was constrained by being within 10 m from the samples used to estimate the block, and a block had to have an estimate for both data sets being compared. The underground samples appear to have a bias in relation to the most recent sample campaign. In order to verify the possible bias, data from the 1988, 1994, and 1995 campaigns were deemed similar to the more recent drilling campaigns from 2004 and 2005. The data were then combined and used to compare against the underground samples in an effort to obtain more pairs of estimated blocks that meet the 10 m constraint mentioned above.

Table 18 shows the basic statistics, Appendix E shows the histograms and cumulative frequency plots and Appendix F shows all the P-P plots from these comparisons (see original report for Appendices). Samples from both cross-cuts and drifts continue to show a bias even when more pairs of data were analyzed. In an effort to minimize the effect of these types of samples in the estimates, and because the cross-cut samples only represented 517 pairs with the 2004/2005 data,

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 138

Figure 10: Comparison of Surface Samples vs. Recent Drilling

Figure 11: Drift Samples Compared to 2004/2005 Core

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 140 Figure 12: Crosscut Samples Compared to 2004/2005 Core

Figure 13: Comparison of Underground Samples vs. Recent Samples

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 141

After plotting several P-P plots that compared several older sampling campaigns against recent core samples from 2004/2005, it was decided to correct a bias on the crosscut and drift samples. It was decided to reduce the grades of the composites from the drift and cross-cut samples by a using a factor of 0.33 for samples below the 95`h percentile. This corresponds to roughly samples with a cutoff grade less than 5 g/t Au.

The correction significantly reduced the mean (-34% lower) and raised the coefficient of variation by about 50% (unadjusted versus adjusted). The adjustment possible caused a compression of the lower tail of the adjusted distribution leading to a gap between the adjusted lower tail and the unadjusted portion of the distribution above 5 g/t Au. This may have caused the relative variance and the coefficient of variation to increase.

19.4 GOLD GRADE CAPPING

Grade capping is commonly done to minimize the potential of over estimating metal content in resource models. In most precious metal deposits a small percentage of the sample data contain a disproportionate amount of the total metal content. It is not uncommon for 1 % of the sample data to represent 15% to 30% of the total metal content of a deposit. In many cases the assayed data are real and reproducible, but the range of influence of the samples may be much more limited than lower grade values.

There are a variety of ways in which metal grades are capped by various resource modellers. One of the more common methods used to determine grade capping limits in precious metal deposits is the use of cumulative probability plots. In many cases the grades of precious metal deposits approximate a lognormal distribution. When the assay grades are plotted on a log-log graph the upper end of the distribution often becomes highly erratic and does not fall along a straight line. Table 20 shows the distribution of gold metal content by deciles for samples inside of the BMG unit. A 0.01 g/t cutoff was used to eliminate some zero grade samples. As the data in the table show, about 44% of the gold in the Box Mine deposit assays is contained in 1 % of the samples (99th to 100th percentile). This attests to the contribution of a few extremely high-grade outliers (e.g., like the 405.26 g/t sample). Figure 15 shows the distribution of gold assays that were transformed using the cumulative normal function.

AMEC selected a gold cap grade of 60 g/t based on the erratic distribution of gold assays above that cutoff. Table 21 illustrates the affect of capping gold assay grades at different thresholds. The number of samples that would be cut, the percent reduction of metal content and the percentage of gold metal above each cap grade are shown in the table.

AMEC independently validated a gold capping grade of 60 g/t using its Monte Carlo simulation method that uses probability thresholds to simulate production goals are met for four out of five years by removing metal at risk.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 143

Gold Capping Sensitivity

19.5 ASSAY COMPOSITING

The raw assay grades were composited into 3 m long fixed-length composites in MineSight®. The majority of the original assay intervals ranged between 1.0 and 1.52 m in length, although variable length samples from less than 1 m to +6 m were collected from various sampling campaigns. The items stored in the Box Mine MineSight® composite file are summarized in Section 19.15 as Table 33.

Prior to compositing, all unassayed intervals were set to 0.01 g/t (raw assay item AU1). The raw assay field AU1 was capped at 60 g/t and then the original uncapped gold grade item (AUORG), AU1 and AUCAP were composited so that various sensitivity cases could be analyzed. Gold indicator flags and grade times thickness products that were stored in the raw assay file were also composited so that AMEC could examine composite dilution (see Section 19.10). After the composites were created, they were coded with the BMG wire frame. Declustering weights were assigned to each 3 m long composite using the cell declustering method (i.e., 3 m x 3 m x 3 m cells). The decluster weights were to be used in the interpolation plan as discussed in Section 19.8, but were not used in the final grade model.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 145 19.6 COMPOSITE STATISTICS

19.6.1 GOLD COMPOSITE STATISTICS

Declustered 3 m long capped gold composite statistics are summarized in Figure 16, which contains a histogram, cumulative probability plot, and basic descriptive statistics. The composites shown in Figure 17 represent those inside of the BMG envelope that was used as a constraint in the estimate of gold resources.

19.7 VARIOGRAPHY

A number of gold grade and gold indicator (0.50 and 2.50 g/t) variograms were generated using the 1 minus correlogram method. These types of variograms have a unit sill, and each lag is normalized by dividing the covariance by the variance of the data. Correlograms are commonly used for defining spatial continuity in precious metal deposits, as the method is usually robust to outlier values and typically gives good results where data are limited.

The correlograms were calculated with azimuth and dip increments of 30° using Sage2001, which is a commercially available software package. Thirty-seven directional correlograms were generated for each metal and then fitted with single and nested spherical models using the "automatic fitting" capabilities of Sage2001 and a pre-defined orientation in the plane of the BMG unit.

All of the correlograms produced relatively high nugget effects in excess of 0.65. A 0.5 g/t indicator correlogram was generated for constructing the 0.5 g/t gold grade envelope that was used to classify resources for a possible bulk mining scenario. The parameters from a gold grade correlogram that were used to validate the distribution of block grades used composite grades that were capped at 10 g/t. The drift and cross cut samples were eliminated due to their biases relative to the core hole data. These gold grade correlograms are included in Appendix G (see original report).

A small area of the deposit was drilled out by short surface holes along the upper portion of the Box deposit on roughly 12.5 m centres. It may be possible to examine grade variability by running variograms from this close spaced data, but in AMEC's opinion the number of composites from this area is limited and may result in generating a poor or unrepresentative variogram. It may not be prudent to extrapolate continuity from this area to the entire mineral deposit.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 146

19.8 BLOCK MODEL PARAMETERS

A MineSight® block model was used to estimate mineral resources. The block model dimensions of the model are summarized in Table 22.

A variety of grades and other key geologic parameters were modeled and stored in the MineSight® resource model. A summary of the block model items is shown in Section 19.15 as Table 35. Table 22: Block Model Limits

19.9 GRADE ESTIMATION

The following sections briefly describe the methods that AMEC used to estimate block model gold grades.

19.9.1 GEOLOGICAL CONSTRAINTS As previously mentioned, AMEC used the three-dimensional wire frame that it constructed from GLR sectional interpretations of the BMG zone, to constrain the estimate of gold resources. Figure 17 shows a contact plot that compares gold composite grades across the BMG contact zone.

As can be seen in Figure 17, the mean gold grade is significantly higher inside of the BMG than outside of that zone. Grade profiles like this suggest that the BMG contact should be treated as a "hard" boundary for estimation purposes, meaning that samples from each unit should not be allowed to be used across the boundary.

19.9.2 GOLD ESTIMATION

Nine different gold grade models were constructed using three distinct methods: 1) nearest neighbour, inverse distance weighting, 2) ordinary kriging. Capped assay gold grades (AUCAP) that were composited into 3 m long fixed-length composites were used to estimate block grades for all nine models. Adjusted and unadjusted underground composite grades were used in various comparison models.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 148

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 150 Table 24: Nearest Neighbour Comparisons

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 151 As was discussed in Section 19.8, a nearest neighbour model was also constructed for the Box deposit. The nearest neighbour model provides a less biased estimate of the mean grade of a deposit, as the data are declustered and is often used as a benchmark to compare other grade estimates. Table 24 compares the various grade models with the nearest neighbour grade at a zero cutoff grade for all estimated blocks.

The data in Table 24 shows that all of the gold grade models are within 1% of the nearest neighbour model, indicating that the grade models are globally unbiased. AMEC also compared the nearest neighbour grade model (AUNN1) with the AUOFF inverse distance squared grade model on a local basis at a zero cutoff as a function of easting, northing, and elevation. Figures 20 through 22 show the grade comparisons as a series of "swath" plots through the model. The number of blocks is shown as the dashed black line.

AMEC also validated the AUOFF model by using volume variance relationships between the data, which state that the variance is inversely proportional to the volume or support. Conceptually, as the volume is increased, there is greater opportunity for a block to include a mixture of low and high- grade material, leading to a smoothing of average grades that can be measured by the variance.

In this case, the drill hole data consist primarily of diamond drill core with differing diameters but ranging between 21.4 mm and 47.6 mm. Nearly this entire historical core was consumed for assaying. Using variogram models from the assay data it is possible to infer the variance of these larger volumes or selective mining units (SMUs).

AMEC selected a 3 m x 6 m x 3 m SMU, which is reasonable given the conceptual 2,000 t/d production rate that has been envisioned. The coefficient of variation of the resource model is on target as shown in Table 25. Figure 23 compares grade-tonnage curves from the SMU adjusted inverse distance model with the theoretical curves from an adjusted nearest neighbour model. Based on these test it is believed that the inverse distance model will tend to accurately predict the recoverable tonnage and ore grade at a range of cutoff grades.

Table 25: Coefficient of Variation Targets

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 152 Based on the various comparisons that were made, it is AMEC's opinion that the inverse distance squared grade estimate is globally unbiased, and locally compares well with the nearest neighbour grade model.

The resource model has been tuned to reflect a selective mining unit of 3 m x 6 m x 3 m. If a different SMU is contemplated, the model should be rebuilt or reblocked.

19.11 DILUTION/ORE LOSS

A visual examination of Box Mine mineralized intersections reveals that the mineralization is typically characterized by thin, high-grade intervals that are often separated by barren and/or low- grade intervals. AMEC undertook a study to summarize the amount of metal contained in continuously mineralized intersections at three different gold cutoff grades.

Only surface core holes that intersected the mineralized zones at near right angles were used for this study so that a more realistic appraisal of continuous mineralized lengths (true thickness) could be determined. Table 26 summarizes the number of metres, gold grades, and percentage of the total for various continuous mineralized lengths.

The data in Table 26 show that at a 0.50 g/t gold cutoff grade, about 52 of the drill hole intersections are less than or equal to 3 m in length. When the cutoff grade is increased to 1.00 and

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 153 1.50 g/t, the percentages of the data contained in samples less than or equal to 3 m in length are 67 and 78, respectively. At a 1 .5 g/t cutoff grade about 30 of the continuous mineralized intersections are contained in samples that are up to 1 m long. These relationships are graphically illustrated in Figure 24.

AMEC looked at dilution and ore loss as a function of sample length, which may be related to potential bench heights. The original gold assays were composited into a series of variable length composites from 1.0 m to 6.0 m long. Internal dilution and metal loss were tracked for each composite interval and then tallied by cutoff grade.

By definition, dilution can only be expressed at different cutoff grades. Similarly, metal loss is expressed as metal that is contained in intervals below a cutoff grade. Table 27 summarizes the statistics of the variable length gold composites. Gold grade dilution and ore loss from the data in Table 27 are graphically shown in Figures 25 and 26, respectively.

Table 26: Continuous Mineralized Lengths

Figure 24: Continuous Mineralized Lengths

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 154 Table 27: Au Dilution and Ore Loss vs. Composite Length

Figure 25: Gold Dilution vs. Composite Length

Figure 26: Gold Metal Loss vs. Composite Length

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 155 The highest percentage of grade dilution occurs when the samples are increased from 1.0 to 2.0 m in length. Dilution steadily increases for samples up to 3 m in length, but then the dilution curves begin to flatten. Ore loss can only be defined for samples below a cutoff grade. As the composites are diluted some of them fall below cutoff grade and are considered to be "waste." The metal contained in these samples is then considered to be lost. Metal loss is not particularly significant at a 0.5 g/t cutoff grade but definitely becomes more significant at higher cutoff grades. Based on the percent dilution and ore loss shown above for silver and gold, it is AMEC's opinion that the currently proposed 3 m long composites provide a reasonable means for modeling the thin high-grade mineralization of the Box deposit.

19.12 RESOURCE CLASSIFICATION ± BOX

BETA used the Wardrop Engineering classifications in reporting resources and reserves.

Wardrop Engineering revised the selective mining resource classifications created by AMEC, the results of which were released in a GLR press release dated May 26, 2006. The revised classifications allowed surface trenches to be used in addition to drill holes and stopes, resulting in the conversion of some blocks from Inferred to Indicated.

AMEC had established two resource classification methods: one that is more appropriate for selective mining and another that is more suited for less selective mining methods and assumes that a large percentage of the BMG zone will be mined and shipped to the processing plant.

For the selective mining scenario, Measured Mineral Resources were assigned to blocks located within 8 m of drilling data or within 5 m of the historical stoping blocks. Indicated Mineral Resources were assigned to blocks that are located within 20 m of at least two drill holes. The remainder of the estimated blocks within the BMG zone were assigned as Inferred Mineral Resources provided that they are within 50 m of drilling data.

The concept behind $0(&¶V classifying resources for a "bulk" mining case was that it may be difficult to selectively mine the thin relatively high-grade mineralized lenses within the BMG unit. This would be particularly true if very large scale mining equipment was to be employed. In this feasibility, selectivity provided by the Hitachi shovel is sufficiently great to eliminate the need to HPSOR\VXFK³EXON´PLQLQJWHFKQLTXHV

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 156 19.13 RESOURCE MODEL ± ATHONA DEPOSIT

19.13.1 DATABASE

The Athona database consists of surface and underground drillholes, along with underground chip samples, collected at the Athona Deposit to 2006 (Table 19.13.1).

Table 19.13.1 Summary of Assay Data (Au >0) Data Set Count Average Grade (Au g/t) All Data 12,660 1.054 1939 Underground Data 1,626 2.855 1939 Surface Data (Core) 465 1.932 1987 Surface Data (Core) 268 0.936 1988 Surface Data (Core) 3759 0.800 1989 Surface Data (RC) 544 0.340 1994 Surface Data (Core) 1,618 1.074 1995 Surface Data (Core) 3,131 0.632 2006 Surface Data (Core) 1,248 0.514

19.13.2 BULK DENSITY

A bulk density of 2.65 g/cc was used for the estimation of the mineralized blocks. This is comparable to the SGS Lakefield determinations reported by Bevans (1995). Additional work is recommended to supplement the bulk density determinations.

19.13.3 COMPOSITES Assays were composited into 3.0 meter down-hole composites while honoring the interpreted geological solids. Zero grades were composited if the intervals within the solids were not sampled.

Table 19.13.2 Composite Statistics, Au Uncapped Wireframe Code Count Average Au g/t Std Deviation 201 5,797 0.7418 1.5714 202 209 0.2250 0.2643 Total 6,006 0.7238 1.5475

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 157 19.13.4 CAPPING

A combination of decile analysis and review of probability plots was used to determine potential risk of grade distortion from higher-grade assays. For Zone 201, the decile analysis identified that 39% of the contained gold was reported in the 99th percentile. On the probability plot, there appears to be an inflection at 17.00 g/t Au too, so this cap was selected. In Zone 202, 34% of the contained metal was reported in the 99th percentile. However, the probability plot showed a break in the population around 1.5 g/t Au so that capping level was selected.

Table 19.13.3 reports the 99th percentile value determined from the decile analysis, the capping level implemented and compares capped and uncapped grades. Assays were capped before compositing.

Table 19.13.3 Capping Analyses and Implemented Capping Level

Zone 99th Capping Total Assays Au g/t Au g/t Percentile Level Assays Capped Uncapped Capped Value 201 16.989 17.00 10,643 91 1.18 0.94 202 5.380 1.50 439 25 0.42 0.31

19.13.5 GEOLOGICAL INTERPRETATION

Three-dimensional solid models of the mineralized zones were developed for the Athona Mine Granite and Athona West Granite to constrain the gold estimation. Sectional interpretations were developed for each of the zones as a guide.

No minimum thickness was implemented. The zones of mineralization interpreted for each deposit are generally contiguous, although some non-assayed or non-mineralized intervals were incorporated into the interpreted solids.

Sectional interpretations were digitized in Gemcom Version 6.04 software, and these interpretations were linked with tie lines and triangulated to build three-dimensional solids. The boundaries of these solids were then compared for goodness-of-fit with the distribution of composited assay values. The solids were validated by Wardrop in Gemcom and no errors were found.

The topographic surface provided by GLR was expanded to fit the block model honoring the drill hole collars. The overburden surface was also built from the logging using the rock code 9 to identify it in the drill holes.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 158 19.13.6 SPATIAL ANALYSIS

Variography, using Pangeos software, was completed for gold in each of the two zones to determine spatial continuity. Table 19.13.4 summarizes the results of the variography.

Table 19.13.4 Athona Variography Name Nugget Sill Range1 Range2 Range3 OK201 0.641 0.293 35.0 35.0 35.0 AMG 0.066 90.0 90.0 90.0 OK202 0.356 0.622 51.1 51.1 51.1 AWG 0.022 51.3 51.4 51.3

19.13.7 ATHONA BLOCK MODEL INTERPOLATION

The interpolation plans for IDW2 and OK were designed with three passes. The first and second passes were designed to estimate blocks only if a minimum of two drill holes were found in the search. The first-pass search ellipse measured 25 x 25 x 25 meter sand the second pass measured 50 x 50 x 50 meters. The search ellipse dimensions for the third pass were 90 x 90 x 90 meters and only one drill hole was required.

The NN interpolation plan used the same search distances as the third pass. The NN model was estimated using the single nearest composite.

19.13.8 ATHONA RESOURCE CLASSIFICATION

Several factors were considered in the definition of a resource classification: x CIM requirements and guidelines. x Experience with similar deposits. x Spatial continuity. x Confidence limit analysis.

No environmental, permitting, legal, title, taxation, socio-economic, marketing or other relevant issues are known to the authors that may affect the estimate of mineral resources. Mineral reserves can only be estimated on the basis of an economic evaluation that is used in a preliminary feasibility study of a mineral project, thus no reserves have been estimated. As per NI 43-101, mineral resources which are not mineral reserves do not have demonstrated economic viability. Mineral resources were classified according to a number of criteria.

On the basis of the criteria outlined, approximately 85% of the blocks estimated in the Athona model are Indicated Resources and the balance are Inferred Resources.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 159 Resource Classification Criteria:

x Measured - Not determined x Indicated - Minimum of two drill holes; Minimum of four composites; Distance to nearest composite less than 50 meter x Inferred - Minimum of three composites; Distance to nearest composite less than 90 meters.

19.13.8 ATHONA MODEL WORK BY BETA

The Athona Gemcom digital model was transferred to BETA from Wardrop, and translated into MEDSYSTEM for use by BETA in validation and verification. BETA was able to reproduce the 3- D wireframe models used by Wardrop.

BETA utilized the topography in its database, and replicated the resource statement as produced by Wardrop, with negligible difference in result. As such, BETA has accepted the database it has received for use by GLR for prefeasibility level analysis of Athona.

19.14 RESOURCE SUMMARY

Mineral Resources for the BOX deposit, as tabulated by BETA are summarized below:

Table 19.14.1 Mineral resources for the BOX deposit Gold MEASURED INDICATED MEASURED + INDICATED INFERRED Cutoff Tonnes Au Ounces Tonnes Au Ounces Tonnes Au Ounces Tonnes Au Ounces g/t (000) g/t (000) (000) g/t (000) (000) g/t (000) (000) g/t (000) 0.125 2,787 1.47 132 16,460 1.20 635 19,247 1.24 767 5,229 0.71 120 0.250 2,401 1.68 129 14,500 1.34 623 16,901 1.39 753 3,710 0.93 111 0.375 2,013 1.94 126 12,284 1.52 601 14,296 1.58 727 2,698 1.17 101

Mineral Resources for the ATHONA deposit, as tabulated by Wardrop are summarized below:

Table 19.14.2 Athona Indicated Resources

Au,g/t Tonnage Au Cut-off 000'sT g/t >3.0 371.4 4.08 >2.5 1033.2 3.00 >2.0 1870.7 2.43 >1.0 3399.8 1.89 >0.5 7036.4 1.28

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 160 Table 19.14.3 Athona Inferred Resources

Au,g/t Tonnage Au Cut-off 000'sT g/t >3.0 50.3 4.45 >2.5 88.8 3.46 >2.0 213.7 2.44 >1.0 558.6 1.69 >0.5 1406.4 1.10

At current economic conditions (Gold price of $650, operating cost of US$5., and 93% recovery), the internal cutoff grade is 0.25 g/t. As such, BETA has stated the Athona Mineral Resources at lower cutoff grades as follows.

Mineral Resources for the ATHONA deposit, as tabulated by BETA are summarized below:

Table 19.14.4 Athona Indicated and Inferred Resources Gold INDICATED INFERRED Cutoff Tonnes Au Ounces Tonnes Au Ounces g/t (000) g/t (000) (000) g/t (000) 0.125 13,870 0.79 351 3,230 0.62 65 0.250 10,878 0.95 333 2,198 0.83 59 0.375 8,607 1.12 310 1,687 0.99 54

19.15 COMMENTS

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Mineral resources, as reported, include minable reserves, i.e. reserves are a subset of resources.

The Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) definition of a Mineral Resource is "a concentration or occurrence of natural, solid, inorganic, or fossilized organic material in or on the Earth's crust in such a form and quantity and of such a grade or quality that it "has reasonable prospects for economic extraction." Using this definition of a Mineral Resource, BETA was able to identify material within the Box Mine deposit that may have some likelihood of being economically extractable.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 161 19.16 MINESIGHT® FILES File 15 - BOX15.EPT

XYZ 333Model Block size in metres

Item Min Max Precison Description Comments Percent topography - includes reduction for TOPO 0 100 1.00 underground From AMEC UG% 0 100 1.00 Percent underground excavation From AMEC

SG 0 6 0.01 Default value of 2.64 g/cm3 loaded to all blocks From AMEC

Au (g/t) - ID2 - All sample data - Drift-Xcut AUOFF 0 170 0.01 samples adjusted - AMEC recommended grade From AMEC AUD 0 170 0.01 Diluted gold grade Calculated by Wardrop DIL% 0 100 0.01 Dilution percentage Calculated by Wardrop Number of waste blocks surrounding ore block for DWST 0 100 1.00 use in the dilution calculation Average grade of waste material surrounding ore AUWST 0 170 0.01 block to be used in the dilution calculation Calculated by Wardrop LOSS% 0 100 0.01 Loss percentage CLASS 0 5 1.00 Updated classification from Wardrop Resource class using all samples - "selective CLAS1 0 5 1.00 mining case" From AMEC Resource class for "bulk mining case" - AMEC CLAS3 0 13 1.00 recommended classification From AMEC SLP 0 10 1.00 Slope domain definition SLP1 0 100 0.10 Overall slope angles ZONE 0 50 1.00 Zone code LITH 0 29 1.00 Lithology code BMG 0 5 1.00 Box Mine Granite (1=inside; 2=outside) From AMEC BTON 0 150 0.10 MINE1 0 1000 1.00 Mining Cost MINE2 0 1000 1.00 MINE3 0 1000 1.00 PROC1 0 3000 1.00 Processing Cost PROC2 0 3000 1.00 PROC3 0 3000 1.00 GA1 0 3000 1.00 G&A Calculation GA2 0 3000 1.00 GA3 0 3000 1.00 REV1 0 750000 1.00 Gross Revenue Calculation REV2 0 750000 1.00 REV3 0 750000 1.00 REV4 0 750000 1.00 REV5 0 750000 1.00 Net Block revenue calculation prior to storing in NREV -7000 750000 1.00 another item in the block TEMP -7000 750000 1.00 VBLK1 -7000 750000 1.00 VBLK2 -7000 750000 1.00 VBLK3 -7000 750000 1.00 VBLK4 -7000 750000 1.00 VBLK5 -7000 750000 1.00 VBLK6 -7000 750000 1.00 VBLK7 -7000 750000 1.00 VBLK8 -7000 750000 1.00 VBLK9 -7000 750000 1.00 VBLK10 -7000 750000 1.00 XTRA1 0 100 0.01 XTRA2 0 1000 0.01 XTRA3 0 1000 1.00 XTRA4 0 100 1.00 XTRA5 0 100 0.01

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 162 20.0 INFRASTRUCTURE

20.1 Site Preparation

Clearing and grubbing, consisting of removal of all trees, shrubs and other vegetation including roots and organic topsoil, will be required for the Process Plant yard, crushed ore storage, mine maintenance complex, electrical substation, explosive magazine, waste dump and all site access roads and mine haul roads. Where feasible, all vegetation and organic topsoil will be collected and stockpiled in areas proximal to the locations requiring remediation, at closure. All vegetal matter will be mulched to promote degradation.

Clearing of trees at the Box pit will be required to provide access for drilling and blasting. All vegetal material and organic topsoil will be collected and stockpiled in areas proximal to the locations requiring remediation, at closure.

Excavation of the relatively thin overburden material to bedrock will be required at the Process Plant yard, crushed ore storage, mine maintenance complex, electrical substation, explosive magazine and all site access roads and mine haul roads The excavation will consist of scraping the material between bedrock outcrops and includes hand cleaning of the material from the bedrock surface.

Site Access Roads

An existing network of roads exists for the area surrounding the hamlet of Uranium City. One of these roads provides access to the Goldfields Project. Other than grading and capping of this dirt road and refurbishment of some culverts, this road is suitable and requires no upgrading.

Site Roads

A number of narrow site roads will be required for access between the facilities including the pumphouses, mine service complex, crusher and storage facilities, mill process facilities and the TMF. The roads will be 6.0 meters maximum width and constructed of waste rock fill with a granular base course topping complete with ditches and culverts as required for adequate surface drainage.

20.2 Fresh Water, Make-Up Process Water, Fire Protection Water and Pumphouse Jetties

The remnants of a previously existing fresh water intake, in Neiman Bay, will be refurbished to provide fresh water requirements. The refurbishment and design of this facility will require the approvals of both the Ministry of Environment (Saskatchewan) and the Department of Fisheries and

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 163 Oceans Canada. Subject to final approvals, this facility will consist of galvanized culvert section encased in coarse rip rap material to provide for a pump sump. Approved trash and fish screens will be required.

The water supply for mill process, potable water and fire protection will be pumped from this pumphouse to an insulated steel storage tank near the mill facility. The piping will be placed on the ground in covered pipe boxes or utilidors and heat traced.

An electric and diesel fire pump complete with a 2 hour diesel storage tank and a jockey pump will be provided in a pumphouse adjacent to the tank. The jockey pump will ensure complete recirculation of fire protection water around the site and back to the tank. An electrical pump will also be located in the pumphouse for both mill process water and potable water supply with the suction located at the upper portion of the tank to ensure that sufficient quantity of water remains at all times for fire protection. A chlorinator will be provided in the pumphouse for the potable water supply to the mine service complex and mill building.

20.3 Site Buildings

The site buildings will consist of structural steel facilities comprised of girders, beams, columns, girts and bracings prefabricated in transportable lengths and sizes to facilitate field erection. The buildings will have metal cladding sides and roofs. The roofs will be sloped at 1/12. R20 Insulation will be provided where required. The various buildings and there dimensions are as follows: x Mill Process, 90m L x 30m W x 12m H x Flotation Tailings Filter Cake Load-out 30m L x 11m W x 12m H x Maintenance and Office Complex Building 30m L x 30m W x 8m H x Explosive Plant 32m L x 16m W x 8m H x Ammoniun Nitrate Prill Storage 42m L x 30m W x 11m H x Pump House 3m L x 3m W x 3m H x Crusher Buildings 16m L x 8m W x 6m H

Mill Process Building

A number of elevated floors will be required to support the equipment which will be connected to the columns. Elevated flooring will consist of grating, checkered plate and concrete. The foundation for the mill building and all process equipment will consist of cast-in- place concrete footings dowelled to the bedrock. Concrete pedestals, bases and grade beams will extend up from the footings above the ground floor slab or above grade. The mill building will have a perimeter grade beam. Granular fill material will be placed within the buildings to the underside of the ground floor slab. The floor slab will be minimum 175

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 164 thick concrete and suitably sloped towards trenches and sumps. Small equipment foundations will be secured and cast to the ground floor with grouted anchors and reinforcement.

A Process Control Room will be provided as the operational centre of this facility. By means of a programmable logic control (PLC) program and controllers, all aspects of the process plant from crushing through to tailings will be monitored and controlled from this position. Lighting will consist of high pressure sodium fixtures.

The mill building will be heated by diesel fired air make-up units and a number of fan forced unit heaters. The temperature, within the facility, will be maintained above freezing. GLR and the designers of this facility should investigate the use of radiant floor heating. It may be viable to replace diesel heating with boilers utilizing coolant and waste stack heat from stationary diesel equipment (generators, etcetera), to provide heating for these facilities.

Primary Crusher Facility and Ore Storage

The primary crusher facility consists of twinned waste rock ramps with associated retaining wall structures, steel grizzlies, rock breaker, hoppers and steel structures to support the grizzlies, hoppers, vibratory feeders, bridge cranes and jaw crushers. The facility is located near a steep bedrock outcrop which will be blasted/excavated so as to minimize the amount of waste rock for ramps. The building is a rectangular structure with the portion below grade consisting of cast-in-place concrete footings and walls and the portion above grade as a conventional steel building with metal cladding and roofing. Access will be provided for both operating and maintenance personnel. The bridge crane will have access to all areas within the facility. The interior of the facility will have 2 elevated floors, one for access to the feeders from the underside of the hopper and the second for access to the jaw crusher. Access to each floor will be provided by steel stairs.

A conveyor gallery will exit from the facility to house the conveyor providing feed to the radial stacker.

A crushed ore reclaim system will be housed in a concrete tunnel that will be cast on and dowelled to bedrock. The tunnel will be covered with low grade ore to the top and a concrete slab of 200 thickness will be placed over the area of draw down cones of the ore stockpile to facilitate full reclaim by tractors pushing ore into the reclaim feed cones.

Secondary and Tertiary Crusher Facility

The secondary and tertiary cone crushers and associated screens will be housed in a conventional rectangular steel building structure, with metal cladding and roofing. Access will be provided for both operating and maintenance personnel. A bridge crane is provided to

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 165 service all areas of the facility for maintenance purposes.

The interior of the facility will have multiple elevated floors, for access to the various equipment components. Access to each floor will be provided by steel stairs.

Mine Service Complex

The mine service complex incorporates the mine and mill changeroom facility, mine offices on ground and an elevated floor, mine shops, washbay, emergency generator powerhouse and a mine equipment storage area (including ambulance and fire truck). The facility will be a pre- engineered building incorporating metal cladding and roofing. A bridge crane will service the 4 mine shop bays. Overhead doors will be steel skin multi-leaf vertical lift insulated with a polyurethane core.

The foundation for the mine service complex will consist of cast-in-place concrete footings dowelled to the bedrock with a concrete grade beam around the perimeter extending up from the footings above the ground floor slab. Granular fill material will be placed within the buildings to the underside of the ground floor slab. The floor slab will be 200 thick in the shop areas, suitably sloped towards trenches and sumps and protected with a surface hardener. The floor slab in the changeroom and office area will be 150 thick and thickened to support partition loads. The floor will be covered with vinyl tiles.

The partitions in the facility will consist of hollow concrete block painted on both sides with a latex sealer and alkyd topcoat. A suspended ceiling system will be used in the office area only.

The mine service complex will be heated by a diesel or electric fired air make-up unit and a number of fan forced unit heaters. Lighting in the maintenance area will consist of high pressure sodium and fluorescent will be used in the changeroom and office areas.

20.4 Camp Facilities

The Camp facilities are currently under construction in Uranium City. GLR has acquired the former Law Court building and is in the process of renovating this structure to provide for approximately 45 single occupancy rooms for employees. This decision to locate this infrastructure in Uranium City makes use of the services such as water, sewage and electricity available from the hamlet infrastructure.

Additionally, GLR plans to relocate senior supervisory staff and their families, to Uranium City. Due to the lack of VXLWDEOHKRXVLQJLQ8UDQLXP&LW\*/5¶VLQWHQWLRQLV to provide family unit trailers to senior staff members and locate this infrastructure in the community of Uranium City.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 166 These family units will cost approximately Cdn $ 45,000/unit; as such, GLR in conMXQFWLRQ ZLWK WKH KDPOHW¶V DGPLQLVWUDWLRQ DQG WKH SURYLQFLDO JRYHUQPHQW RI Saskatchewan should endeavour to investigate the viability of refurbishing existing homes or constructing new homes.

To derive the benefits of the existing social and recreational infrastructure, GLR should GLVFXVVZLWKWKHKDPOHW¶VDGPLQLVWUDWLRQWKHIHDVLELOLW\RIFRQWULEXWLQJWRWKHXSJUDGLQJ and maintenance of this infrastructure, to ensure accessibility for their employees.

20.5 Fire Protection - Sprinkler System

In the Mill Facility Office area, wet pipe sprinkler systems will be engaged automatically by smoke detectors or by pull stations. Pull stations and fire extinguishers will be installed near every exit. Pull stations will be installed every 30 feet (app. 9.1m) in hallways and walkways.

All sprinkler/detection equipment will be ULC and/or UL or FM approved.

The mill will be spot sprinkered and any area not sprinklered will contain the appropriate size and quantity of stand pipe and hose stations. The reagent storage and handling areas will be sprinklered at 0.15 g.p.m./ ft2 for a 2500 ft2 area. The bullion furnace room and the compressor room will be sprinklered at 0.20 g.p.m./ ft2 for a 4000 ft2 area.

The Maintenance shop will be provided with automatic sprinkler protection at 0.15 g.p.m./ft2 for a 2500 ft2 area. The Office, Locker/Dry areas, hallways and walkways at 0.25 g.p.m./ ft2 for a 3000 ft2 area, and the warehouse at 0.47 g.p.m./ ft2 for a 3000 ft2 area. The area beneath the ore stockpile will be sprinklered at 0.20 g.p.m./ ft2 for a 4000 ft2 area. The conveyor head end will be spot sprinklered only.

All sprinkler flow rates are to be added to 500 g.p.m. for inside and outside hose demands.

The Pumphouse, the motor control room (MCC Room) and the emergency generator and pre- fabricated transformer buildings will be provided with a CO2 system for fire control as water damage in these areas can be more costly to rectify than the results of an uncontrolled fire.

Dense electrical cable tray packing (3 or more stacked vertically) will require automatic sprinkler systems of 0.20 g.p.m./ ft2 for a 4000 ft2 area.

Electrical Substations will not be sprinklered.

All sprinkler lines are to be no less than 1" (25.4mm) in diameter, and all fire protection lines (mains, sprinklers, stand pipes, etc.) will be ferrous material

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 167 All sprinkler/alarm systems will be controlled by a control panel that is located, in a constantly attended location, such as the mill control room. Satellite panels will be installed in other areas to warn operators and medical or fire personnel. The panels will receive typical alarms such as:

Water flow Low pressure Fire pump running Fire pump in "Auto" position Smoke/Fire detection (by area) Pumphouse temp. Fire pump trouble alarms, etc.

Pumphouse

The centrifugal fire pumps and potable water pumps will be located in a pumphouse. The heated and monitored pumphouse will be a detached building of non-combustible construction.

The fire protection circuit provides a jockey pump which circulates fire protection water while maintaining line pressure in the fire main. An electric fire pump is provided and automatically starts when line pressure decreases A similarly sized diesel fire pump is also provided, along with the necessary switchgear or controls, as a backup system, if line pressure continues to decrease. The diesel fire pump motor has a fuel reservoir for two hour utilization and both the motor and the reservoir are sprinklered.

Fire Protection Reservoir

The main fire protection structure will be the fire protection reservoir or tank. The tank will be constructed of steel and at all times will contain water for a 120 minute period of fire demand. This tank will contain water pumped from Lake Athabasca and will be used as both potable water storage and fire water storage.

The fire tank will be painted, cathodically protected, and insulated. This freestanding structure will be supported by a steel tower on concrete piers, and arranged in such a way that the tank bottom is no less than 35' (10.6m) above the highest sprinkler on site.

The size of the tank is hydraulically determined by maximum firewater demand. For example, the highest sprinkler flow rate is 0.47 g.p.m./ft2 for a 3000ft area for the Warehouse, and adding 500 g.p.m. for outside and inside hose demand results in a tank volume of approximately 230,000 gallons.

Fire Mains

Fire Mains will be made of ferrous material, and will not be smaller than 8" (200mm) in diameter. All mains will remain above ground between buildings therefore mains are to be

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 168 heat-traced, insulated and placed in utilidors; protected from the environment and traffic.

Fire Mains will be inside of heated buildings with connections to the outside of the building for pumper truck access. Where the fire mains are inside the perimeter of a building; pipes will be in a covered masonry or concrete trench, sand packed and covered.

20.5 Fuel Storage

To avoid the logistical difficulties associated with requiring various types of fuels, all stationary and mobile equipment will be specified to operate with only diesel fuel. The following Table provides an approximation of both fuel requirements and fuel storage requirements:

Consumer Annual Fuel Requirement 9 Month Storage Requirement (Liters) Mobile Mining Fleet 2,500,000 1,875,000 Ancillary Mining Equipment 250,000 187,500 Light Vehicle 150,000 112,500 Carbon Regeneration Kiln 80,000 60,000 Strip Solution Boiler 80,000 60,000 Refinery Wabi Furnace 50,000 37,500 Emergency Generator 35,000 26,250 Heating Furnaces 30,000 22,500 Totals 3,195,000 2,396,250

The above Table indicates that the mine Fuel tank farm must have a minimum capacity of 2,396,250 liters or 528,000 gallons. GLR has acquired fuel tankage equivalent to approximately 1,500,000 liters. Additional tankage will be required to meet requirements. A long term fuel supply contract will be negotiated with a fuel supplier; under the terms of this contract, the supplier will bear the cost of the equipment for this facility and GLR will bear the costs of construction and equipment installation. Generally, suppliers of diesel are amenable to providing fuel storage capacity and installation in exchange for long term contracts.

The fuel tank farm will be located proximal to both the Barge Offloading facility on Neiman Bay and the Maintenance Complex. This will facilitate the offloading of diesel from the barges and reduce transportation hazards. This facility will be located within a bermed impermeable area. The storage capacity of this bermed area will exceed 1.5 times the volume of the largest tank in this tank farm.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 169 20.6 Civil Materials of Construction

Granular Backfill will be required at all buildings to level the site between bedrock outcrops, for backfill around completed buildings and as a sub-base under all floor slabs.

Granular base course will be required for all access and mine road and yard surfaces to provide a solid and suitable surface for grading.

Impervious backfill will be required around the exterior of all buildings to encourage water drainage away from buildings. The backfill will consist of a relatively thin layer of material near the surface and sloping downward and outward.

Waste rock backfill will be required for all mass backfill for building foundations, water intake pumphouse jetty, ore dump ramp and access and mine haul roads. Waste rock is mine blasted material without crushing or screening.

Geotextiles will be installed as required to stabilize the access and haul road beds in localized areas.

Concrete for footings, foundations and floors will have minimum 28 day strength of30 MPa using sound and competent constituents including water, aggregates and admixtures with normal portland cement. Concrete reinforcement will be deformed bars having a minimum yield strength of 300 MPa. Fibre mesh polypropylene reinforcement will be used in elevated floor slabs to control temperature and shrinkage cracking. Protective coatings for concrete will consist of a spray applied silane sealer on the bottom and vertical surfaces of concrete. A surface hardener will be used on all floors to provide a hard, clean surface.

Structural steel for buildings will be new mild steel material conforming to CSA G40.21-300W. The steel will be shop fabricated for field bolting connections to minimize field welding and painted with a self-priming epoxy paint.

Grated floors will consist of a welded steel type grating. Field connections to the support steel will be provided using fillet welds.

Checkered plate floors will consist of a four way raised pattern plate from mild steel. Field connections to the support steel will be provided by using 12 mm diameter puddle or plug welds.

Stairs of minimum 900 mm width will consist of structural steel channel stringers and steel grating treads complete with checkered plate tread nosings. Handrail complete with kickplates will be used around elevated platforms.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 170 The roofing and cladding will consist of preformed metal panels of 0.76 mm thickness and coated with the industry standard Series 5000 finish. I cladding and roofing will be installed on steel girts or purlins with neoprene washers and matching fasteners. Insulation will be provided to standard P 3.5 (R20) and an interior metal liner will act as the vapour barrier.

The roofing panels will consist of a folded clip standing seam roof and panels will be installed on a 1:12 roof slope.

All interior and exterior mandoors will be steel type with a polyurethane insulation core complete with heavy duty hardware and a small window. I doors will be coated with a self-priming epoxy paint.

Overhead doors shall be steel sectional type with a polyurethane insulation and complete with a small window. Doors will be provided c/w manual operation only. Overhead doors will be coated with a self priming epoxy paint.

20.7 Waste Dump Facility

The Waste Dump Facility (WDF) will be located to the north of the Mill Process area. The total tonnage to be stored is in excess of 35 million tonnes of waste. This represents a required storage volume of approximately 24 million cubic meters. Additionally, due to the benign characteristics of the Flotation and Gravity tailings, GLR has opted for deposition of these tailings within the Waste Dump facility. As described in Section 18, these tailings will be filtered and a filter cake produced for subsequent disposal. This option implies that an additional 11 million tonnes or 8 million cubic meters of Gravity/Flotation tailings will be added to the overall waste dump capacity requirements. The inclusion of these tailings is not anticipated to actually increase the required volume of this Waste Dump facility significantly, as these tailings are expected to fill the voids within the waste rock material.

As noted in Section 18, this volume of material (both waste rock and Flotation and Gravity tailings) will occupy an area of approximately 105 hectares when stacked to a nominal height of 30 meters. As noted in Section 18, only trace residues of the flotation reagents will be present in the filter cake. To ensure compliance with MMER discharge parameters, temporary sedimentation ponds will be provided at the toe of the waste dump facility. The primary purpose, of these ponds will be the sedimentation of suspended solids from the waste dump effluent. As all drainage from this area is naturally directed towards the Vic Lake TMF, a permanent clarified effluent retention pond will also be constructed, to capture and temporarily retain the waste dump effluent. This effluent pond will be located down slope from the waste dump and proximal to the transition zone between bedrock and sediments. The purpose of this

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 171 pond is to provide sufficient retention time, to ensure compliance with the permissible discharge parameters, as specified by MMER, for effluents prior to their discharge.

The construction of these temporary sedimentation ponds will make use of the natural contours and depressions in the existing surface topography of this proposed waste dump area. As the waste dump is developed, the toe of this dump will continually advance towards the Vic TMF. These sedimentation ponds will therefore be continually constructed, in advance of the moving toe, of this waste dump. These ponds are not meant to retain solutions; their construction is simply temporary permeable dams comprised of gabion baskets covered with geotextile. These structures will retain sediments while allowing clarified effluent to be decanted and subsequently channeled to a clarified solution pond. As the toe of the waste dump advances towards the TMF, these sediments will be covered by continuing waste deposition. Prior to waste rock covering these sediments/sediment dams, a new sedimentation dam structure will be duplicated further down slope, towards the Vic TMF.

The impermeability of this clarified effluent pond is not considered essential as any seepage will report to the Vic TMF. However, the capture and subsequent recycling of this effluent is deemed important as a failure to do so will increase the quantity of solutions requiring treatment within the TMF.

20.8 Leach Circuit Tailings Management Facility

7KH PHWDOOXUJLFDO SURFHVVLQJ RI WKH %R[ 'HSRVLW¶V RUH ZLOO JHQHUDWH DSSUR[LPDWHO\ 10% of the total ore tonnes as tailings. The 11 million tonnes of ore in the Box Deposit will therefore generate approximately 1.1 million tonnes of Leach Circuit tailings that will require storage within a TMF. This tonnage of cyanide tailings corresponds to approximately 760,000 cubic meters of settled tailings volume. This volume could be further reduced if consolidation were to take place within the deposited tailings. &RQVROLGDWLRQ FRXOG UHGXFH WKH YROXPH RI DFWXDO WDLOLQJ¶V VROLGV WR DSSUR[LPDWHO\ 610,000 m3.

GLR has selected Vic Lake as the most appropriate site for the required TMF. Vic Lake is located in a natural generally steep sided depression formed by glacier erosion. The proposed Box Open Pit borders the east side of this TMF. Generally, the topography surrounding this lake is steep; as noted, the topography of the north shore of this lake is sloped upwards towards the proposed location of the mill facilities and Waste Dump. Vic Lake is devoid of fish and had been previously used by prior mine operations as a tailings depository. The only sources of inflows are precipitation and ground water VHHSDJH WKURXJK WKH QDWXUDO VHGLPHQWV ERUGHULQJ WKH ODNH¶V north shore. Vic lake XOWLPDWHO\UHSUHVHQWVDVWRUDJHYROXPHWKDWPHHWV*/5¶VFXUUHQWUHTXLUHPHQWV7KH9LF

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 172 Lake TMF will accommodate the deposition of the Leach Circuit tailings resulting from the processing of the current Box Deposit reserves, into a subaqueous environment. Therefore, GLR will meet their current TMF requirements in Vic Lake. Should additional ore reserves be defined and subsequently exploited at the Goldfields Property, GLR currently considers that the exhausted Box Pit would make an ideal TMF for any additional tailing impoundment.

The current plan calls for the construction of a temporary permeable dam at the current point of intermittent discharge from Vic Lake (217.5m). The spillway for this dam will be constructed to an elevation of 222 meters. This will provide a total available volume, within the TMF, in excess of 1.2 million cubic meters. The dam will be constructed of Gabion Baskets covered with Geo-Textile to entrap any suspended particulates, entrained in the liquid fraction of the Leach effluent. This dam will discharge, should climatic and/or operation conditions require, into an impermeable lined solution pond. This lined pond will be constructed within the confines of an intermittent creek connecting Vic Lake to Frontier Lake. A double layer, of 80 mil HDPE Geo- Membrane, will ensure the impermeability of this pond. Should the liquid fraction of the tailings effluent reach discharge levels from the TMF or 222 meters, this solution will be first filtered by the temporary permeable dam for removal of suspended solids and subsequently treated by the cyanide destruction process prior to discharge. In the event that conditions were to exist requiring a non MMER compliant liquid effluent discharge to the environment, this effluent would be pumped to the Box Pit for temporary storage, reprocessing and treatment. If required for permitting purposes, an emergency spillway could be constructed, within the first year of operation, between the TMF and the Box Pit, to guarantee that any uncontrolled discharge from this TMF would be directed to this Pit.

The climatic conditions of the Goldfields Property will impose operational difficulties unique to TMFs operating in cold and freezing temperatures. GLR intends to deposit these tailing into a subaqueous environment. During the warmer months, this deposition can be achieved by simply laying the tailings discharge pipe below the surface of the water, in the TMF. A line pressure gauge will be utilized to determine when the discharge point must be changed. However, with the advent of freezing temperatures and the concomitant formation of surface ice, the relocation of the discharge point becomes more difficult. To surmount this difficulty, GLR will perform a hydrological survey of the TMF just prior to freeze-up, to define the depth contours of the TMF. During the period of ice formation, the discharge point will be located in an area with considerable depth and available volume. Once surface ice has formed, the tailings line will be relocated to above the ice. Using an ice auger, holes will be subsequently bored in areas indicated by the hydrological survey and the tailings will be discharged through these auger holes. Again, the need to relocate the tailings discharge point will be determined by constant monitoring of the discharge pressure.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 173 20.9 Electrical Power Distribution and Specifications

20.9.1 Power and Distribution

All electrical equipment and services shall meet the requirements of C22.1-06, Canadian Electrical Code, Part 1 (20th Edition) and the Canadian Electrical Code (Saskatchewan Amendments) Regulations 2002. In addition, all applicable equipment and services shall meet the requirements of the SaskPower Electrical Service Requirements (ESR) November 2004. All mining equipment shall also reference CAN/CSA-M421.

20.9.2 Power Supply

Power for the Goldfields site will be supplied by SaskPower via an existing power line and right of way. The existing feed from Wellington to the existing line is at 115kV and the will be transformed to 72kV for transmission along the existing line to the Goldfield property. The maximum forecasted load will be 5 MVA with an annual load factor of 90 percent. The data for the formal Interconnection study was resubmitted to SaskPower 23-04-2007 and SaskPower is committed to have a reply within 60 days.

SaskPower is close to capacity in Northern Saskatchewan and will be so for the foreseeable future. SaskPower is asking for Power Factor correction as close to 1.0 as possible so as to put as little strain on the existing system as possible. This can be accomplished with the use of harmonic capacitors or adjustment of a large synchronous motor.

The ball mill will have an electrical load of approximately 1250 HP . This motors should therefore be specified as wound rotor as this type of motor would be capable of mitigating these power factor issues. The starting of a motor in this power range can be a source of problems on the incoming power line and within the plant and will be mitigated with the appropriate use of a soft start drive with bypass. The ball mill will also incorporate an air clutch to reduce starting loads and reduce the size of the soft start.

The specific power supply characteristics of this site will be reviewed with SaskPower upon FRPSOHWLRQRIWKH³)RUPDO,QWHUFRQQHFWLRQ6WXG\´7KH6DVN3RZHU(656HFWLRQ³SaskPower 6\VWHP&KDUDFWHULVWLFVDQG3RZHU4XDOLW\5HTXLUHPHQWVIRU&RQVXPHU/RDGV´ provides the general guidelines. SaskPower limits the allowable voltage fluctuation for infrequent disturbances (< 1 per day) to 8 percent and this will be most applicable to the starting of the ball mill. The number of variable frequency drives (VFD) used by the mill operation will likely impact other types of disturbances which may have to be mitigated.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 174 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 175 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 176 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 177 20.9.3Substations

The substation at the Goldfields site will transform the incoming power to 4160 VAC and 600 VAC. 4160 VAC is required for the ball mill synchronous motor. All other motors will require 600VAC or 120 VAC.

The SaskPower ESR Section 4 (Requirements for Consumer-Owned Substations Greater Than 5 kV) defines the requirements for the on-site substation. Drawings are to be submitted to SaskPower Transmission and Distribution and Customer Services for corrections to meet SaskPower requirements however actual approval is a separate process with SaskPower Electrical Inspections Division.

The supply will be aerial to the substation and be terminated at the deadend insulators located within the substation. GLR is responsible for the supply and installation of a dedicated PSTN communication line (telephone line) to the revenue meter, for the exclusive use of SaskPower. SaskPower is responsible for the cost of operating the telephone line.

The Canadian Standards Association Guides CAN/CSA C71-1-99 and C71-2-98 shall be used for insulation coordination on three phase AC power systems having a nominal voltage above 1000 volts. Surge arresters shall be installed and capable of withstanding the power frequency voltages specified by the SaskPower ESR. Direct stroke protection (shielding) shall be employed to protect against direct lightning strikes.

The substation design shall incorporate standard safety features to safeguard personnel. The use of wood in fencing shall be prohibited. Transformer and corona breakdown noise shall be a maximum of 65dB.

The substation is expected to operate in the extremes of weather common to northern Saskatchewan including but not limited to severe temperature swings, rain, snow, icing, wind and electrical storms.

20.9.4Emergency Power

Standby emergency power will be required to supply enough power for emergency lighting and equipment, office areas and equipment which would be harmed if not cleared of product in an expeditious manner. A single primary backup will be used to minimize maintenance.

Generator sets shall be diesel powered with three phase, four wire 600/347 volt output complete with automatic transfer switch and battery charger. The engine and generator shall be installed in a room separate from the main transformer and associated switch gear unless supplied as a complete pre-integrated generator set. The generator set shall incorporate automatic transfer switches. The generator set shall be able to be integrated with an industrial network system. The Industrial network of preference is Ethernet/IP. DeviceNet and ControlNet are also acceptable substitutes. Enclosures shall be weather protective and noise attenuating. Generator sets shall be operable from - 40 deg. C to +70 deg. C and non condensing to 95% humidity.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 178 20.9.5Crushing Plants

The crushing plant presents special challenges due to it being situated outdoors. The motor drives and associated controls shall be located in a central facilities building. All motors, sensors and instrumentation shall be connected to the facilities building via suitably weather proof conduit. The controls in the facilities building shall be connected to the main process plant via an Ethernet connection.

The vast majority of the crushing plant will be tuned once in operation and will require no further adjustment either manual or automatic. The feeds from the coarse ore storage to the fine ore storage will require speed adjustment based on the weight of the material on the belt scale and will have to be fine tuned once in production.

The grinding plant is primarily driven by the Ball Mill. The ball mill features a 1250 HP motor that will be driven by a soft start with a bypass switch. An air clutch will be used to start the motor under no load conditions. The bypass switch will be enabled to switch to line voltage when the motor is at synchronous speed and the air clutch will the bring the ball mill up to speed. This will avoid placing severe voltage and current disturbances on the incoming line and avoid issues with other equipment within the mine site. The ball mill will use a synchronous motor which will also be used to correct the Power Factor (PF) of the incoming power.

20.9.6 Process Plant

The major part of the gravity plant is supplied by Gekko and the major responsibility is supplying adequate power. Gekko will supply some interface capability that will be utilized by the main control system for alarming, starts and stops.

The leaching plant has a significant number of components that will for the most part operate in a steady state condition with minor adjustments over time.

20.9.7Indoor Lighting

Luminance values for applications shall be based on the latest edition of the IES Lighting Handbook. Twenty (20) foot-candles shall be the general minimum light level in working and common areas. Ten (10) foot-candles shall be the general minimum light level for hallways and walkways. Factory floor lighting shall have a minimum light level of fifteen (15) foot-candles with supplementary lighting in work areas. In all cases, lighting shall be designed to provide high quality illumination appropriate for the identified tasks.

Energy efficient fixtures and light shall be used whenever practical. Occupancy sensors shall be used wherever practical to reduce energy usage.

Fluorescent fixtures are preferred for most interior applications. Fluorescent ballasts for T8 lamps shall be electronic, rapid start. Ballasts shall be high efficiency, high power factor, sound rated A.

20.9.8Exterior Lighting

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 179 Luminance values for applications shall be based on the latest edition of the IES Lighting Handbook. Pathways shall be lit to a minimum light level of five (5) foot-candles.

Exterior lights shall be controlled be photovoltaic cells to ensure that the lights only turn on in low light conditions.

20.9.9 Controls

The control system shall be a Rockwell (Allen-Bradley) Programmable Automation Control (PAC). The main platform will consist of two (2) ControlLogix processors. One will be located in the process building and the second in the facilities building. Any auxiliary processors will be CompactLogix processors. All processors will be interconnected via an Ethernet network. The processors will utilize Ethernet/IP for industrial communication and TCP socket connections to interconnect to any PC based data acquisition systems. A wide variety of add-on cards are available for these platforms to interface with the vast majority of remote equipment and measure all possible data signals.

The operators shall interface with the control systems locally through PanelView Plus Human Machine Interfaces (HMI). Overall Supervisory Control and Data Acquisition (SCADA) will be via a PC based RSView SE system which shall be based in the control room. The Control system is completely based on an Ethernet network and can therefore be controlled from any location on the site or indeed around the world.

The secondary control network will be DeviceNet to control simple devices (e.g. pushbuttons, lights) and simplify installation and maintenance.

A local PC based server will be used to store all relevant historical data, recipes and maintenance documentation. The server will also coordinate any Ole for Process Control (OPC) data (eg.Froth Imager).

20.9.10 Motor Control Centers

Motor Control Centers (MCC) shall be Class II, Type B, factory assembled, metal enclosed, dead- front construction. 20- Inch deep sections shall be provided with the required number of vertical sections assembled to form a free-standing metal enclosure with sections and buses bolted together. Capability to add cubicles in the future by bolting additional cubicle and splicing main bus shall be provided. All wiring within control center shall be copper.

The MCC shall include a 600 ampere copper ground bus the entire length of the control center. Provide compression lugs capable of receiving No. 4/0 - 250 kcmil cable attached to the ground bus in the incoming section of the control center. The MCC shall provide a minimum of six holes in ground bus in each vertical section. The ground bus shall be bolted to enclosure. The vertical ground bus in each section shall be connected to the horizontal ground bus.

Fractional horsepower motor controls and drives and drives over 300 horsepower will not reside in the MCC.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 180 21.0 ORE RESERVES AND MINING

21.1 INTRODUCTION

Mining of the Box Mine Project is by open-pit methods utilizing mid-size earth moving equipment. Feasible pit shapes complete with haul-road designs have been modeled based on: the disposition of grade values in the resource model; economic parameters such as gold price and mining and operating costs; and technical parameters such as pit slopes and gold recovery. Silver values are not taken into consideration in the mine model.

Total proven and probable minable reserves are 10.997 million tonnes of ore at an average grade of 1.70 grams per tonne, containing 601,007 thousand ounces of gold and 558,937 ounces of recoverable gold, minable at a strip ratio of 3.16 to 1. Proven Reserves total 1,683,717 tonnes grading 2.025 g/tonne containing 109,619 ounces gold and 101,945 recoverable ounces. Provable Reserves total 9,313,283 tonnes grading 1.641 g/tonne containing 491,436 ounces gold and 457,035 recoverable ounces. (Table 21-1). The estimate is based on diluted, proven and probable reserves located within the Box pit using a 0.40 g/t Au internal cutoff. Production and equipment requirements are based on a PLQLQJDQGSURFHVVLQJVFKHGXOHRIPLOOLRQWRQQHVSHU\HDUGXULQJWKHPLQH¶VOLIH

Table 21-1 Proven and Probable Minable Reserves Tonnes Grade Ounces Ounces Contained Recoverable Proven 1,683,717 2.025 109,619 101,945 Probable 9,313,283 1.641 491,436 457,035 Proven + Probable 10,997,000 1.700 601,007 558,937

For purposes of this study, it is assumed that the operator of the Box mine, GLR Resources Inc., will perform all mining activities.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 181 21.2 MINABLE RESERVES

21.2.1 Economic and Design Parameters

Minable reserves for the Box project are based upon the measured and indicated resources in the computerized 3-D block model described in Section 6.0. Minable pit shapes optimize the extraction of the mineral inventory given the economic and technical parameters determined for this feasibility. The pit optimization procedures utilized in definition of the final pit design take the following factors and assumptions into consideration:

x gold price of $US 525 net per ounce (net of royalty of 2% NSR after credit); x process recovery of 93% of the contained gold values; x mining cost of $US 2.12 per tonne of ore moved; x mining cost of $US 1.30 per tonne of waste moved; x crushing cost of $US 1.31 per tonne of ore; x processing and laboratory cost of $US 4.63 per tonne of ore; x G & A and social cost of $US 1.86 per tonne of ore; x environmental cost of $US 0.21 per tonne of ore; x overall pit slope of 42 degrees on footwall and 65 degrees on hanging wall; x minimum pit bottom of 18 meters; x six-meter bench mining heights; x bench face slope of 75 degrees; x ultimate haul road grade of no greater than 10%; and x total haul road width of 24m with berms.

A Lerchs-Grossman algorithm was utilized to optimize the pit. This algorithm provided a basic pit shape outline that served as the basis for final pit design. The routine essentially floats an economic cone over all blocks in the 3-D block model to determine what mineralized material can be mined and processed given the economic parameters input. Final pit design is shown in Figure 7-1 (also see Figure 11-1). A schematic of the haul road profile is shown in Figure 7-2.

21.2.2 Slope Stability

The design parameters used for Box Deposit are based on the recommendations of the report by Klohn-Crippen Ltd., Box Mine Project; Preliminary Open Pit Slope Design - June 1995 (Appendix 7-1). BETA notes that this is a preliminary design study, and as such, BETA recommends that a final slope stability study be undertaken by GLR prior to initiation of significant mining activites resulting in final pit walls, particularly on the hanging wall side of the pit.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 182 Klohn-Crippen¶VUHFRPPHQGHGSLWFRQILJXUDWLRQVDUHVXPPDUL]HGDVIROORZV

x The pit slope angle for the Hanging Wall of the Box Deposit is designed to provide an inter-ramp angle of 65 degrees with bench face angles of 75 degrees, for the competent hanging wall. x The pit slope angle for the Footwall is designed to provide an inter-ramp angle of 42 degrees; this slope angle conforms to the structural orientation of the foliations evident within this gneisic granite. x The minimum bench height for the Box Deposit is designed at 6 meters, with 12 meter wide catchment berms designed for every third bench. (See Fig. 2.2.1.3), on the Hanging Wall. The access ramp will comply with the catchment berm requirement on the footwall side.

The 6m bench height will ensure a sufficiently high degree of ore control. The option to increase bench heights to 12 meters will be investigated during the initial mining phase. Should initial drilling and blasting results demonstrate the required continuity within the zones of mineralization, bench heights will be increased to 12 meters, to minimize drilling and blasting costs.

Pre-Shear drill holes, in the Hanging Wall (HW) waste zone, are designed to be drilled to 24 meters; the use of pre-shearing will significantly enhance slope stability by minimizing wall damage due to blasting. Based on positive initial results, waste mining in the HW area will adopt double bench heights, to again reduce drilling and blasting costs.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 183 Figure 7-1: Feasible Pit Shape

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 184 Figure 7-2 Haul Road Design

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 185 21.2.3 Minable Reserves by Bench

Table 21-2Proven & Probable Minable Reserves by Bench - Box Pit

Bench Level (m) Ore Gold Grade Contained Gold Waste Total Strip Ratio (k tonnes) (g/t) (ounces) (k tonnes) (k tonnes)

258 39 3.122 3,915 58 97 1.48 255 60 2.427 4,682 251 310 4.21 252 94 1.931 5,836 558 652 5.91 249 110 1.829 6,468 835 945 7.57 246 136 1.766 7,722 1004 1,139 7.41 243 157 1.682 8,490 1121 1,278 7.13 240 171 1.695 9,319 1239 1,410 7.23 237 187 1.643 9,878 1222 1,409 6.52 234 204 1.563 10,251 1290 1,494 6.32 231 209 1.575 10,583 1314 1,524 6.28 228 225 1.574 11,386 1322 1,547 5.88 225 226 1.588 11,539 1296 1,521 5.74 222 234 1.573 11,834 1304 1,538 5.56 219 242 1.487 11,570 1260 1,501 5.21 216 257 1.516 12,526 1249 1,506 4.86 213 246 1.538 12,164 1108 1,353 4.51 210 245 1.606 12,650 1108 1,353 4.51 207 247 1.723 13,683 1042 1,289 4.22 204 250 1.800 14,468 1039 1,289 4.15 201 239 1.776 13,647 984 1,223 4.12 198 233 1.706 12,780 989 1,223 4.24 195 222 1.635 11,670 939 1,161 4.23 192 228 1.570 11,509 933 1,161 4.08 189 210 1.549 10,458 793 1,003 3.78 186 222 1.475 10,528 782 1,003 3.53 183 219 1.549 10,907 716 936 3.26 180 234 1.564 11,766 702 936 3.00 177 227 1.517 11,071 657 884 2.90 174 236 1.511 11,465 647 884 2.74 171 234 1.538 11,571 610 844 2.61 168 231 1.560 11,586 613 844 2.66 165 202 1.648 10,703 525 727 2.60 162 204 1.637 10,737 524 727 2.57 159 197 1.599 10,128 487 684 2.47 156 210 1.566 10,573 474 684 2.26 153 193 1.676 10,400 421 615 2.18 150 204 1.728 11,334 411 615 2.02 147 197 1.812 11,477 377 574 1.91 144 215 1.871 12,933 359 574 1.67 141 211 1.950 13,228 261 472 1.24 138 219 1.876 13,209 253 472 1.15 135 205 1.872 12,338 229 433 1.12 132 208 1.717 11,482 226 433 1.09 129 195 1.697 10,639 205 400 1.05 126 194 1.639 10,223 206 400 1.07 123 181 1.633 9,503 183 364 1.01 120 184 1.626 9,619 179 364 0.97 117 172 1.678 9,279 104 276 0.60 114 181 1.778 10,347 95 276 0.52 111 178 1.925 11,016 63 242 0.35 108 180 2.117 12,251 61 242 0.34 105 169 2.174 11,812 39 208 0.23 102 166 2.097 11,192 41 208 0.25 99 150 2.000 9,645 25 176 0.17 96 143 1.868 8,588 32 176 0.22 90 86 2.103 5,815 16 101 0.18

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 186 21.3 PRODUCTION PARAMETERS

21.3.1 Selective Mining

The mining activities at the Box Mine Project will require the appropriate separation of ore and waste. $VPLQHUDOL]DWLRQLVJHQHUDOO\OLPLWHGWRZLWKLQWKH³%R[*UDQLWH´IRUPLQLQJSXUSRVHVWKHRUHERG\ can therefore be described as mineralized zones within a structurally controlled host rock. Additionally, the rock type (Box Granite) hosting the mineralization is visually distinguishable from the rock types of the Hanging Wall (HW) and Foot Wall (FW). These physical attributes and visual characteristics will facilitate separation/segregation of the ore from the waste.

The Drilling Operation will also be used to confirm and define the actual zones of high grade mineralization, low grade mineralization and waste within the Box Granite. Drill cuttings will be subjected to cyanide digestion of contained gold followed by the flame atomic adsorption spectrometric method of analysis to define leachable extractable gold tenors. The use of the cupellation/gravimetric (fire assay) method will be limited to check assays of these results. Continuous stream analysis of drill cuttings, to determine gold tenor, will be implemented subject to the results of initial testing. The practicality, of extending the application of currently available technology (x-ray fluorescence, etc) to provide continuous analysis of drill cuttings and the conversion of these results into transduceable information, will be explored by GLR, during start-up operations. These assay results would be utilized to confirm the ore block modeling and would be plotted to provide extraction controls for the loading equipment.

Loading equipment selection is generally predicated on the physical characteristics of the orebody, to be extracted. The selected loading unit must minimize ore dilution while achieving operating efficiency. The inherent physical characteristics of the zones of mineralization at Box Mine Project indicate that loading units similar to a Caterpillar 990 front-end loader or hydraulic shovels with 8.6 m3 bucket will be used for ore and waste loading. These loading units will allow for appropriate ore, low grade ore and waste separation.

21.3.2 Production Schedule

Production of ore and waste will begin in the first year of operation at Box Mine Project. The mining schedule is based upon all proven and probable reserves located within a pit defined using only measured and indicated resources. The schedule assumes a production of 1.80 million tonnes of ore per year throughout mine life. The production schedule is detailed in Table 21-7.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 187 Table 21-7

Production Schedule

Year Ore Mined Ore Grade Waste Mined Strip Ratio Total Mined

(tonnes) (g/t Au) (tonnes) (tonnes) 1 1,800,000 1.713 8,400,000 4.67 10,200,000 2 1,800,000 1.612 8,463,000 4.70 10,263,000 3 1,800,000 1.597 6,742,000 3.75 8,542,000 4 1,800,000 1.577 6,130,000 3.41 7,930,000 5 1,800,000 1.805 3,568,000 1.98 5,368,000 6 1,800,000 1.867 1,453,000 0.81 3,253,000 7 197,000 1.956 49,000 0.25 246,000 TOTAL 10,997,000 34,805,000 3.16 45,802,000

Box Pit ± End of Year 1

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 188 Box Pit ± End of Year 2

Box Pit ± End of Year 3

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 189 Box Pit ± End of Year 4

Box Pit ± End of Year 5

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 190 Box Pit ± End of Mine Life

21.3.3 Pre-production Activities

Pre-production activities carried out in the months prior to production included: x development of waste dump, including clearing and grubbing and top-soil removal as necessary; x development of ore and low grade stockpile areas, including clearing and grubbing, top-soil removal, levelling and access; x haul road development; and x initial clearing, grubbing and topsoil removal of Box Mine Project.

A topsoil stockpile will been situated near the pit in an area defined by condemnation drilling.

21.3.3.1 Treatment of Previous Underground Extraction Zones

The open pit design, for the Box Mine deposit, is predicated on the assumption that the existence of the previous underground stopes (areas of prior underground ore extraction) will not significantly disrupt the proposed mining schedule. These stopes remain open and can measure 50m x 50m and may extend vertically from the 232m to 136m elevations. The smaller underground working such as the ventilation and access infrastructure (drifts, raises and winzes) will not impact open pit planning as the volume of material required to fill these structures is insignificant; however, knowledge of the location of this infrastructure is required to avoid accidents.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 191 Therefore, to minimize the disruptive impact of these pre-existing stopes, on mine design and scheduling, these large voids will be filled, prior to their interception by the open pit mining.

The blasthole drills will be used to intercept and confirm the dimensions of these underground stoping voids. These drills will then be required to complete a pattern of drill holes that will be used to develop a drop raise connecting these voids to the surface (drop raises use vertical crater retreat blasting methods to develop near vertical openings connecting 2 points where top access is available). These voids will then be backfilled by trucks dumping low grade ore material hauled from within the open pit; the use of this low grade material will minimize dilution during the subsequent extraction of ore within these areas.

21.3.4 Shifts and Work Schedules

The mine operates three shifts per day, seven days per week. Table 21-8 shows the calculation of working days and number of shifts per day for the mine equipment.

Table 21-8

Working Days and Shifts

Operating Schedule Trucks, Loaders & Scrapers Drills

Days per year 365 365 Sundays off 0 52 Holidays per year 10 10 Weather related days off 20 20 Days of production per year 335 283 Number of shifts per day 3 2 Number of shifts per year 1005 566

7KHVFKHGXOHGKROLGD\VIRUWKHPLQHDUH1HZ

The production requirements per shift based on the production schedule are shown in Table 21-9.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 192 Table 21-9

Production Requirements per Shift

Period (Year) Ore Tonnes Waste Tonnes 1 1,791 14,841 2 1,791 14,952 3 1,791 11,912 4 1,791 10,830 5 1,791 6,304 6 1,791 2,567 7 196 87

Operating time available per shift is calculated in Table 21-10 for all equipment.

Table 21-10

Operating Time per Shift

Operating Time Per 8 Hour Shift Minutes

Scheduled time per shift 480

Scheduled non productive time Startup 15 Shut down 15 Lunch 30 Net Scheduled Time 420

Unscheduled non productive time Operational delays @4.0% 16.8 Weather related delays @ 2.0% 8.4

Operating minutes per shift 394.8 Operating hours per shift 6.58

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 193 21.3.5 Influence of Climatic Conditions

Operational interruptions and delays due to climatic conditions are unavoidable. The nature of these interruptions and delays is generally related to excessively cold temperatures. As temperatures fall below minus 35 degrees Celsius, mobile equipment must be shut down to avoid damage due to metal crystallization and concomitant damage to structural components (Chassis, loading members, etc). This requirement is reflected in the reduction of available yearly operating days. Additionally, cold temperatures impact equipment availability as starting equipment becomes more problematic as temperatures fall. Further, operational delays can be exacerbated by temperatures affecting roadway icing conditions. These delays are taken into consideration in determination of the operating time per shift by assuming that one hour out of every 20 (5%) will be unworkable, based upon operating experience. It is highly recommended that GLR specify the inclusion of a preheat system for all diesel equipment. This preheat system provides for an interchange of the coolant fluids from an operating piece of equipment with non-operating equipment.

Additional delays and inefficiencies are included at a conservative 10% of available time per shift. These inefficiencies include operational delays due to breakdowns in supervision and deficiencies in worker skills and motivation.

21.4 MINING OPERATIONS & EQUIPMENT REQUIREMENTS

Mine equipment requirements are given in the following sections. x requirements for major mine equipment, i.e. drills, loaders and haul trucks, are presented in Sections 21.4.2 to 21.4.5 based on formulae presented in Section 21.4.1. x requirements for auxiliary equipment (bulldozers, motorgrader and water truck) follow in Section 21.4.6 based on general knowledge of the number of units and operating shifts required to perform the various tasks. x material characteristics used for estimating the tonnes per unit shift are shown in Table 21-11. A 2.0% moisture content is used for all material. The specific weight of wet loose material is used to calculate haul truck payloads and travel speeds. Equipment production, however, is reported in dry metric tonnes.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 194 Table 21-11 Density Values for Ore and Waste Parameter Ore Waste

Wet bank density 2.70 2.70

Moisture content (%) 2.00 2.00

Dry bank density 2.65 2.65

Wet bulk density 2.08 2.08

Bulk dry density @ -1" crush 2.04

21.4.1 Equipment and Performance

Productivity per unit shift are calculated for the major mine production equipment.

7KHVHVKLIWSURGXFWLYLW\¶VDUHXVHGWRGHWHUPLQHWKHDQQXDORSHUDWLQJUHTXLUHPHQWVIRURSHUDWLQJVKLIWV total fleet requirements, fleet utilization factor, and required number of operators. The total fleet requirements and fleet utilization factors presented represent the individual yearly fleet requirements to meet the production requirements given the specified work schedule and equipment availability. Fleet requirements do not represent the actual on-site fleet size, which may exceed needs.

The formulae utilized in calculation of operating requirements follow:

Operating Shifts = Required production . Productivity per unit-shift

Total Fleet = Operating Shifts . (scheduled shifts)(MA)(UA) x where MA is the equipment's mechanical availability, which represents the portion of time averaged over the equipment's life that the unit is mechanically able to work. An MA factor of 0.80 is used, indicating maintenance workers of average skill levels and motivation available in the local work force; and

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 195 x where UA is the utilization of availability of equipment, which represents the percentage of time that the equipment is utilized given that it is mechanically able to work. A UA factor of 0.90 is used, indicating that 10% of the time that a given machine is available it will not be used; hence x the maximum equipment utilization rate is MA X UA or 0.72, i.e. the equipment is assumed to be used no more than 72% of the working hours.

Fleet Utilization = Operating Shifts . (Total Fleet)(Scheduled Shifts) x where the total fleet number is rounded up to whole units so that the utilization is not greater than 72%. The existing fleet size, required fleet size for the following years, and the current fleet age are factors considered in the calculation of the total fleet size.

Operators = (Total Fleet) (Crew) (Fleet Utilization) x where Crew refers to the number of work crews. Three work crews are assumed for the entire mine life.

21.4.2 Drilling

Production and cost studies were performed on hydraulic track drills capable of drilling 15 cm to 25 cm diameter blastholes, to depths of +14 meters. Powder factors were maintained constant for both ore and waste; a smaller diameter blasthole was designed for the Box Granite, to increase the number of drill cutting sample points, for ore and low grade definition. During the initial mining phase, GLR will review the results of these drilling parameters and make appropriate adjustments. Increasing sampling points, by varying blasthole design parameters does impact both drilling and explosive costs. The cost per tonne of blasthole accessories (detonators, boosters, etc) increases and tonnes drilled per operating hour decrease as blasthole diameters are reduced.

Table 21-12 presents drill productivity per 8 hour shift. Drilling will take place three shifts per day, six days per week.

All material extracted from the mine will be both drilled and blasted; initially, 10% of the blastholes in the hanging wall waste will be assayed for ore control purposes. All blastholes within the Box Granite will be assayed for grade control purposes. Due to the characteristics of the material to be drilled, no problems are anticipated in maintaining blastholes open. This is corroborated by the excellent core recovery percentages and Rock Quality Designation (RQD) numbers reported in the exploration diamond drill holes. However, care must be taken to avoid icing of previously drilled holes due to surface runoff in freezing conditions. If blastholes are to be left for any period of time, it will be

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 196 important to treat the blasthole with granular salt, to prevent freezing. Good bit penetration rate is anticipated based on exploration drilling results and the work index of the ore.

Drill requirements shown in Table 21-13 indicate that two drills working three shifts per day, six days per week can maintain production requirements.

21.4.3 Blasting

Blasting requirements are based on a 4.5m x 3.61m drill pattern in ore and 7.35m x 5.90m drill pattern in waste (Table 21-14). Between one and two meters of sub-drill will be required to maintain pit bottoms.

Table 21-12

Drill Productivity Calculations

Parameter Ore Waste Unit

Hole diameter 15.24 25.40 centimetres Bench height 6.00 12.00 meters Sub-drill 0.72 1.18 meters Dry bank density 2.65 2.65 tonnes/m3 Drillhole spacing 4.50 7.35 meters Drillhole burden 3.61 5.90 meters Tonnes of influence per hole (dry) 258.43 1,379.00 tonnes/hole Drilling rate 25.00 25.00 meters/hr Shift drill time 6.58 6.58 hours/shift Shift performance 164.50 164.50 meters/shift Shift production 6,326.15 17,211.34 tonnes/shift

Production rate per Drilling Unit 961 2,616 tonnes/hr

Table 21-13

Drill Requirements

Operator Period Annual Operating Shifts Total Total Fleet Fleet Hours Per Utilization Ore Waste Preshear Day Year

Year 1 285 488 77 850 2 75% 6 5,592 Year 2 285 492 78 854 2 75% 6 5,619 Year 3 285 392 68 744 2 66% 6 4,895 Year 4 285 356 64 705 2 62% 6 4,638 Year 5 285 207 49 541 2 48% 6 3,560 Year 6 285 84 37 406 2 36% 6 2,671

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 197 Table 21-14

Blasting Parameters Parameters Ore Waste Unit

Hole diameter 15.25 25.40 centimetres Hole length 6.72 13.18 meters Hole volume 0.12 0.42 cubic meters Influence per hole 258.43 1,378.86 tonnes Powder factor 0.68 0.68 kg/tonnes Powder per hole 66.25 354.44 kg Column load 9.86 26.89 kg/meters Powder rise 4.16 8.28 meters Powder specific gravity 0.87 0.85

21.4.3.1 Powder Magazine

The regulations, pertaining to all aspects of explosives in Canada, are as stipulated in the Canadian ³([SORVLYHV$FW´7KLV$FWLVDGPLQLVWHUHGE\WKH([SORVLYHV5HJXODWRU\'LYLVLRQ (5' RIWKH Ministry of Natural Resources Canada.

Based on the annual tonnage requirements and the proposed Powder Factor, annual explosive consumption will exceed 1,500 tonnes. To reduce the quantity of Explosive or Hazardous material to be transported to the minesite, GLR will apply to the ERD, under the terms of the Explosives $FW IRU WKH ULJKW WR RSHUDWH D ³%DVH )DFWRU\´ IRU WKH IDEUication of bulk explosives. The prerequisites are not prohibitive and approval is readily granted to the applicant upon compliance ZLWKWKH$FW¶VVWLSXODWLRQV

Yearly explosive requirements will exceed:

x ANFO (diesel/ammonium nitrate (AN)) 1,500 tonnes x Emulsion 20 tonnes x Boosters (shaped cartridges of PETN) 3.5 tonnes x Detonators 10,000 units

7KH SHUPLWWLQJ IRU WKH ³%DVH )DFWRU\´ LPSOLHV WKDW */5 ZLOO WUDQVSRUW  WRQQHV RI $1 (ammonium nitrate) prill (similar to pellet fertilizer) and will mix this prill with the required amount of diesel on-site to fabricate the ANFO required. Approximately 70 litres of diesel are required per tonne of prill. This ANFO explosive will be prepared in batches and these batches will be limited to actual requirements for immediate consumption. The ANFO product will not be stored on-site.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 198 The explosive magazines will be located south-east of the Box Deposit operation in an approved area easily accessible yet sufficiently remote from existing or planned structures. Magazine location DQGFRQVWUXFWLRQZLOOIROORZ(5'¶VFRQVWUXFWLRQVWDQGDUGVDQGWKH4XDQWLW\-Distance Tables. These Tables define the applicable construction requirements for powder magazines with regard to location of the site as well as minimum distances between storage locations within the minesite. Separate explosive magazines will be required for the Emulsion explosives, the Detonators and the Boosters associated with the initiation system.

Subject to final permitting requirements, the explosive magazine compound will be an area 75 meters by 25 meters. Due to the remoteness of the mine site and its limited accessibility, the permitting process should not require continuous security coverage; GLR will install, if requested by ERD, appropriate security camera coverage and enclosed with 3-meter high cyclone fence.

Again, subject to final permitting requirements, within the fenced area, three storage facilities will be separated from each other by earthen berms at least three 3 meters in height (earthen berms between the various explosive products and constituents). All explosives will be stored within approved explosive magazine structures. Modified shipping containers or C-Cans generally meet this requirement. Due to the climatic constraints imposed on bulk transportation services, these magazines must have sufficient capacity to store in excess of 25 tonnes of the Emulsion explosive product. Detonators and surface delays will be stored separately in the magazines located at one extreme of the compound; the other extreme will house the magazines to store the emulsion and booster products. In the centre area of this compound, covered storage for the AN prill component of the ANFO, will be provided; AN prill is generally shipped in 1 tonne tote bags to facilitate handling and storage. An explosive mixing truck will be acquired to prepare the ANFO product.

Lightning arresters will be located to provide coverage for all infrastructure within the explosive compound. Fire extinguishers will be located at appropriate locations around the compound.

2QHRIWKHSUHUHTXLVLWHVIRUD³%DVH)DFWRU\´SHUPLWLVWKHVWLSXODWLRQWKDWDQ([SORVLYH¶V9HKLFOH Wash Bay facility must be available. This facility will be located outside the Explosive Magazine Compound and effluent from this facility will require approved treatment. These requirements will be defined upon approval of the Base Factory application

21.4.4 Loading

The process of defining equipment specifications is influenced significantO\E\WKHRUHGHSRVLW¶V characteristics. The continuity and uniformity of the ore within the Box Mine deposit permits the use of medium sized loading and haulage equipment. The utilization of this size of equipment will not impact ore dilution significantly and is therefore deemed appropriate. Based on these assumptions, front-end wheel loaders, hydraulic excavators and/or hydraulic shovels in combination with conventional off-highway rigid frame haul trucks will be the primary material- handling equipment for both ore and waste at the Box Mine deposit. Three fleet options were considered by this study for material handling. All options use 100 tonne haul trucks similar in size and specifications to the Caterpillar 777D haulage truck (96t). The difference in the three options is

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 199 in the designated loading equipment. Option one uses a front-end wheel loader similar in size and specifications to the Caterpillar 992G front end wheel loader (11.5m3 bucket). The second option considered the use of a hydraulic shovel similar in size and specifications to the Caterpillar 5130B hydraulic shovel (+9.0m3 bucket). The third option designates a hydraulic excavator similar in size and specifications to the Caterpillar 5110B ME hydraulic excavator (+6.0m3 bucket).

Due to their intrinsic characteristics, each loader option demonstrates attributes both beneficial and detrimental to the mining extraction process. The most impactful for each option are as follows:

x Front End Wheel Loader; provides the greatest flexibility to mining operations due to the ease with which it can be moved from one working face to another. The operating cost per tonne would be the highest of the three loading options. x Hydraulic Shovel; provides the least flexibility to mining operations but is the most readily adaptable to remote control. The operating cost per tonne would be the lowest and the ore dilution, due to decreased selectivity capacity, would be the highest of the three loading options. x Hydraulic Excavator; provides for the least amount of ore dilution; however, due to its loading position is the most unstable and possibly the least adaptable to remote control operation.

Due to the above characteristics, this study will incorporate the costs associated with Hydraulic Shovel loading equipment. TKHGHFLVLRQRQZKLFKORDGLQJXQLWEHVWILWV*/5¶VQHHGZLOOXOWLPDWHO\ EH EDVHG RQ FDSLWDO FRVW WKH DYDLODELOLW\ RI HTXLSPHQW DQG */5¶V SUHIHUHQFH $OO RI WKH DERYH options have attributes beneficial to the mine extraction process.

21.4.4.1 Hydraulic Shovel Loader ± CAT 5130 B

The equipment specifications and productivity calculations for the Hitachi EX1200-5 coupled with Caterpillar 777D haul trucks are listed in Tables 7-15 and 7-16.

The operating requirements and fleet utilization parameters are based upon the assumption that the Hitachi EX1200-5 will load 100% of the ore and waste material (Table 21-17).

Table 21-15

HITACHI EX1200-5 Hydraulic Shovel Loader- Equipment Specifications

Parameter Specification Unit

Bucket capacity 6.5 cubic meters Truck rated payload (Cat 777) 96.0 tonnes Allowable overloading 2 % Truck body capacity (Cat 777) 60.5 cubic meters Loader operating time per shift 394.8 minutes

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 200 Table 21-16

HITACHI EX1200-5 Hydraulic Shovel Loader - Productivity Calculations

Parameter Ore Waste Unit

Wet bulk density 2.08 2.08 t/m3 Bucket fill factor 100% 102% % Tonnes per pass 13.52 13.79 tonnes Passes per truck 7 7 Tonnes per truck 94.61 96.50 tonnes Truck fill factor 97% 99% % Loader time per pass 0.45 0.45 minutes Truck spot time 0.40 0.40 minutes Total time per truck 3.55 3.55 minutes Truck loads per shift 111 111 Shift production 10,521 10,732 tonnes

Production rate 1,599 1,631 tonnes/hr

Table 21-17

HITACHI EX1200-5 Hydraulic Shovel Loader - Requirements

Operator

Period Annual Operating Shifts Total Fleet Fleet Utilization Hours Per

Ore Waste Total Day Year

Year 1 171 783 954 2 47% 6 6,277

Year 2 171 789 960 2 48% 6 6,317

Year 3 171 628 799 2 40% 6 5,257

Year 4 171 571 742 2 37% 6 4,882

Year 5 171 332 503 1 50% 3 3,310

Year 6 171 135 306 1 30% 3 2,013

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 201 21.4.5 Hauling

Haul trucks are sized appropriately according to the loaders that feed them. The Hitachi EX1200-5 Hydraulic Shovel loader is to be serviced by a fleet of Caterpillar 777 D haul trucks, each with a nominal capacity of 96 tonnes.

The truck productivity per shift and required operating shifts per period are calculated by simulating the vehicle performance over various haul routes. The percent grades and average distances for segments comprising the haul profiles were measured for each time period. In-pit haul roads are up to 10% grade. As the haul distance to the waste dump and crushing plant are significantly different, two profiles were used for the ore and waste hauls.

The parameters used to identify the operating conditions such as speed limits and rolling resistance, as well as the truck configuration such as horsepower and vehicle weight are summarized for the haul trucks. The chosen speed limits provide safe retarding capability on both empty and loaded down-grade hauls and assume that the roads are dry and in good condition. A maximum speed limit of 40 km/hr is used for safety reasons. Note that weather and operational delay factors total 15% and have already been built into the operating time per shift to account for slower travel speeds during inclement weather.

Truck speed versus rimpull values are combined with the empty vehicle weight, actual payload, rolling resistance, speed limits and altitude factor to determine the total travel times (loaded and empty) for each haul profile. The total cycle time is determined by adding the fixed load and dump times to the travel times. The remaining calculations are:

Trips per shift = Operating Time Per Shift Cycle Time

Shift Productivity = (Trips per Shift) (Payload)

Operating Shifts = Required Productivity Shift Productivity

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 202 21.4.5.1 Ore Haul Trucks ± Using Caterpillar 777 D

Haul truck haul distances and travel times for the Caterpillar 777 D by year are summarized in Table 21-21, assuming that the Hitachi EX1200-5 Hydraulic Shovel loader is used.

Table 21-21

CAT 777 D Haul Trucks - Average One Way ORE Haul Distances

Haul Distance Travel Time (Minutes) Period Meters Loaded Empty Total

YEAR 1 1250 2.50 2.14 4.64 YEAR 2 1500 3.33 2.57 5.90 YEAR 3 1750 4.04 3.00 7.04 YEAR 4 2000 4.80 3.43 8.23 YEAR 5 2250 5.40 3.86 9.26 YEAR 6 2500 6.00 4.29 10.29

Speed limits utilized for simulation are shown in Table 21-22.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 203 Table 21-22

CAT 777 D Haul Trucks ± Haul Speed Limits (mine speed limit = 40km/hr)

Specific parameters required for simulation are defined in Table 21-23.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 204 Table 21-23

CAT 777 D Haul Trucks ± Simulation Parameters

Parameter Specification Unit

Truck size 96 tonnes Tire size 27.00R49 Tire multiplier 1 Flywheel horse power 1000 HP Empty vehicle weight 65.01 tonnes Truck Body Capacity 60.5 cubic meters Actual payload Ore 94.6 tonnes Waste 96.5 tonnes Maximum gross weight 99.0 tonnes Age factor 1 Rolling resistance 3 Fixed cycle time Decelerate and position 0.45 minutes Spot under loader 0.40 minutes First pass loader 0.12 minutes Number of Additional passes 6 passes Time per additional pas 0.55 minutes Acceleration time 0.15 minutes Decelerate, turn, dump 1.10 minutes Accelerate from dump 0.15 minutes

Total Time 5.67 minutes

Cycle time is the sum of the total of the fixed cycle time and the average travel time for the respective year. Shift productivity and the number of operating shifts assume that 100% of the ore and waste is transported using the Caterpillar 777D haul trucks operating 3 shifts per day, 7 days per week (Table 21-24).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 205 Table 21-24 CAT 777 D ORE Haul Trucks ± Shift Productivity

Period Cycle Trips Per Shift Operating Time (min) Shift Productivity Shifts

Year 1 10.3 39 3,690 488 Year 2 11.6 35 3,311 544 Year 3 12.7 32 3,027 595 Year 4 13.9 29 2,744 657 Year 5 14.9 27 2,554 705 Year 6 16.0 25 2,365 762

Caterpillar 777 D haul-truck requirements are shown in Table 21-25.

Table 21-25

CAT 777D ORE Haul Trucks ± Requirements

Annual Operating Total Fleet Operator Period Shifts Fleet Utilization Hours Per Total Day Year

Year 1 488 1 49% 3 3,211 Year 2 544 1 54% 3 3,580 Year 3 595 1 59% 3 3,915 Year 4 657 1 65% 3 4,323 Year 5 705 1 70% 3 4,639 Year 6 762 1 76% 3 5,014

Note: there is excess capacity of waste haul trucks in year 6 to bring total fleet utilization below 72%

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 206 21.4.5.2 Waste Haul Trucks ± Using Caterpillar 777 D

Waste haul truck haul distances and travel times for the Caterpillar 777 D by year are summarized in Table 21-26, assuming that the Hitachi EX1200-5 Hydraulic Shovel loader is used.

Table 21-26

CAT 777 D Haul Trucks - Average One Way WASTE Haul Distances

Haul Distance Travel Time (Minutes) Period Meters Loaded Empty Total

YEAR 1 2500 4.55 4.29 8.83 YEAR 2 2850 5.18 4.89 10.07 YEAR 3 3350 6.28 5.74 12.02 YEAR 4 3700 7.16 5.84 13.00 YEAR 5 4050 7.84 6.39 14.23 YEAR 6 4400 8.52 6.95 15.46

Speed limits utilized for simulation are shown in Table 21-22.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 207 Table 21-27

CAT 777 D WASTE Haul Trucks ± Simulation Parameters

Parameter Specification Unit

Truck size 96 tonnes Tire size 27.00R49 Tire multiplier 1 Flywheel horse power 1000 HP Empty vehicle weight 65.01 tonnes Truck Body Capacity 60.5 cubic meters Actual payload Ore 94.6 tonnes Waste 96.5 tonnes Maximum gross weight 99.0 tonnes Age factor 1 Rolling resistance 3 Fixed cycle time Decelerate and position 0.45 minutes Spot under loader 0.40 minutes First pass loader 0.12 minutes Number of Additional passes 6 passes Time per additional pas 0.55 minutes Acceleration time 0.15 minutes Decelerate, turn, dump 1.10 minutes Accelerate from dump 0.15 minutes

Total Time 5.67 minutes

Cycle time is the sum of the total of the fixed cycle time and the average travel time for the respective year. Shift productivity and the number of operating shifts assume that 100% of the ore and waste is transported using the Caterpillar 777D haul trucks operating 3 shifts per day, 7 days per week (Table 21-28).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 208 Table 21-28 CAT 777 D WASTE Haul Trucks ± Shift Productivity

Period Cycle Trips Per Shift Operating Time (min) Shift Productivity Shifts

Year 1 14.5 28 2,702 3,109 Year 2 15.7 26 2,509 3,374 Year 3 17.7 23 2,219 3,038 Year 4 18.7 22 2,123 2,888 Year 5 19.9 20 1,930 1,849 Year 6 21.1 19 1,833 793

Caterpillar 777 D waste haul-truck requirements are shown in Table 21-29.

Table 21-29

CAT 777D WASTE Haul Trucks ± Requirements

Annual Operating Total Fleet Operator Period Shifts Fleet Utilization Hours Per Total Day Year

Year 1 3,109 5 62% 15 20,457 Year 2 3,374 5 67% 15 22,201 Year 3 3,038 5 60% 15 19,990 Year 4 2,888 4 72% 12 19,003 Year 5 1,849 3 61% 9 12,166 Year 6 793 2 39% 6 5,218

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 209 21.4.6 Major Auxiliary Equipment

Auxiliary equipment refers to the non-productive major mine support equipment which is scheduled on a regular basis and which contributes significantly to the operating and capital costs.

The primary function of the auxiliary equipment is to support the major production units and to provide safe and clean working areas throughout the mine property. Equipment included in the auxiliary mine fleet and usage requirements are:

x Caterpillar D8N Bulldozer (2) - will be used to maintain the waste dump and ore stockpiles, rip ore and waste and push material to feed the loaders and assist mine operations as needed; x Caterpillar 988F Loader - for stockpile maintenance and back-up; x Caterpillar 14H Motorgrader - will maintain all haul roads and site access roadways; x Water Truck (5,000 gallon) - will maintain dust suppression for mine haul roads and site roadways; x Tire Truck - is a specialized vehicle for changing mine equipment tires; x Mechanics Truck (2) - will have lubricants, power washer, compressed air for field maintenance of mine equipment; and x Fuel Truck - is required for in-field fueling of the mobile fleet.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 210 22.0 OPERATING COST

Introduction

Operating and maintenance costs are estimated for a 1.8 million tonne per year operation.

Operating cost is presented for each of the following categories: x general and mine administration; x mining of ore and waste; x crushing and stacking; x processing (including assay laboratory); and x environmental and social.

The operating cost is itemized into the following cost components: x labor (supervisory, operating & maintenance); x operating consumable supplies; x maintenance supplies; and x power generation.

Derivation of the individual components of these costs is detailed in the following sections.

SUMMARY

Operating costs per tonne of ore for each of the cost categories is projected for the Box Mine project. Table 22-1 summarizes the operating costs for the proposed 3.0 million tonne per year production level.

Table 22-1 Operating Cost Summary

Production Level General Admin Mining Ore Mining Waste Crushing Processing Environmental (T/Year) ($/T) ($/T ore) ($/T waste) ($/T) ($/T) ($/T) 1,800,000 1.86 2.12 1.30 1.31 4.63 0.21

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 211 The basis for the estimated operating cost is as follows: x costs are expressed in 1st quarter 2007 U.S. Dollars without escalation; x consumption levels of major reagents are based on review by Dan Mackie Associates of metallurgical testwork performed by Lakefield Laboratories of Lakefield, Ontario, Canada, and Gekko Systems of Victoria Australia. x labor costs and social burdens are expected costs of skilled laborers, and meet current legal requirements; x power costs are based on detailed estimates of power draw for all electrical installations and assume 100% grid-supplied power at the Goldfields site; x where available and applicable, actual costs from current and nearby operations are utilized. Other sources for costs include estimates provided by Caterpillar Equipment, and Western Mine Engineering's cost estimating guide.

LABOR COST

The Box Mine operation will employ a total of 116 persons (

Table 22-2).

Table 22-2 Labor Distribution Summary Location Number of Persons $GPLQLVWUDWLRQ±&RUSRUDWH 3 Administration - Mine Site 7 Warehouse / Purchasing 1 Mining 51 Mine Maintenance 16 Crushing 16 Processing 12 Assay Laboratory 7 Plant Maintenance 0 Environmental 3

Total 116

7KHVFKHGXOHGKROLGD\VIRUWKHPLQHDUH1HZ

Personnel work eight hour shifts, working six days on, and two days off. Consequently, additional personnel are included to maintain sufficient work force. Drillers will work two shifts per day, six days per week.

Local salaried staff costs are expected costs of skilled labor. Personnel costs for this study are based upon the base wages including overtime plus a salary burden (Table 22-3).

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 212 Personnel requirements and monthly salaries are shown in the individual sections that follow. Salaries include all expected overtime and shift premium costs.

Table 22-3 Salary Burdens Burden Percent of Base Salary

CPP & UIC 25

Total 25.00%

PROCESS PLANT CONSUMABLE COSTS

Comminution Consumables and non-reagent costs

The following table details the crushing, grinding, leach, process and tailings consumable costs estimated for the Box Mine project.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 213 Table 22-4 Non-Reagent Consumable Costs Section Equip. Consumption Feed Price Unit Cost Annual

(KG/T) Tonnage ($/Kg) ($/T) Cost Grinding 100% Conveyors $0.010 18,000 Belting $0.070 126,000 Idlers $0.050 90,000 Samplers $0.0100 18,000 Ball Mill $0.300 540,000 Liners 0.150 $0.200 360,000 Grinding Media 0.600 $1.520 $0.912 1,641,600 Wet Screens $0.008 14,400 Slurry Pumps $0.020 36,000 Hydrocyclones $0.015 27,000 Gravity 20% Gekko Concentrators $0.150 54,000 Flotation 80% Agitators $0.057 82,080 Reagent Feeders $0.003 4,320 Slurry Pumps $0.025 36,000 Regrind - Concentrate 20% Ball Mill $0.035 12,600 Liners 0.500 $0.375 135,000 Grinding Media 0.500 $1.520 $0.760 273,600 Slurry Pumps $0.075 27,000 Hydrocyclones $0.075 27,000 Thickeners $0.060 21,600 Leach 100% Agitated Leach Tanks CIP $0.034 61,920 Carbon Screens $0.010 18,000 Slurry Pumps $0.020 36,000 Strip Circuit 100% Acid Wash Tank $0.001 1,800 Solution Boiler $0.025 45,000 Elution Column (Strip) $0.005 9,000 Electrowinning Cells $0.005 9,000 Carbon Regeneration Kiln 100% $0.005 9,000 Refinery Filter $0.002 3,600 Furnace $0.008 14,400 Tailings Slurry Pumps $0.015 27,000 Cyanide Destruction Tankage $0.004 7,200 Belt Filter $0.020 36,000 Discharge Hopper $0.004 7,200 Note: motors, power train, wear materials, valves & piping, spare parts, etc. Totals $3.368 3,829,320

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 214 Reagent Consumable Cost

Plant reagent consumption is based on operating experience. Total reagent cost is $US 0.70 per tonne of ore (Table 22-5)

Table 22-5 ADR Plant Reagent Costs

Consumption Feed Price Unit Cost Annual (KG/T) Tonnage ($/Kg) ($/T) Cost Flotation Potassium Amyl Nitrate 0.0500 4,800 $2.500 $0.125 210,000 Methyl Isobutyl Carbinol 0.0100 4,800 $2.300 $0.023 38,640 Collector R208 0.0180 4,800 $4.150 $0.075 125,496

Antiscalant 0.0060 4,800 $4.000 $0.024 40,320 Regrind Cyanide 2.5000 200 $2.000 $5.000 350,000 Lime 0.5000 200 $0.240 $0.120 8,400 Flocculant 0.1500 200 $4.280 $0.642 44,940 Leach Activated Carbon 0.3000 200 $2.450 $0.735 51,450 Strip Circuit Hydrochloric Acid 0.0165 200 $0.280 $0.005 323 Sodium Hydroxide 0.8700 200 $0.530 $0.461 32,277 Propane 0.0600 200 $1.170 $0.070 4,914 Stainless Steel Cathodes 0.0016 200 $3.300 $0.005 370 Refinery Consumables Flux 0.0050 $1.790 $0.009 16,110 Propane 0.0200 $1.170 $0.023 42,120 Cyanide Tailings Copper Sulfate 0.0200 200 $4.150 $0.083 5,810 Sodium Metabisulfate 1.2000 200 $3.500 $4.200 294,000 Totals $0.703 1,265,170

Diesel

Diesel fuel costs of $US 0.75 per litre are utilized, including delivery to site.

POWER COSTS

Electric power is available from the national grid at Goldfields

Power costs and requirements for the site are summarized in, Table 22-7

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 215 Table 22-6 Power Costs

Annual KWH Annual Cost Crushing 5,735,759 $ 286,788 Processing 17,297,784 $ 864,889 Tailings 2,646,000 $ 132,300 Laboratory 718,200 $ 35,910 Total Cost 26,397,743 $ 1,283,977 Cost / KWH $0.0500

Table 22-7 Power Requirements Monthly KWH Annual KWH Crushing 477,980 5,735,759 Processing 1,441,482 17,297,784 Tailings 220,500 2,646,000 Laboratory 59,850 718,200 Total KWH 2,199,812 26,397,743

Power generating cost per kWh is based on a contract cost of US$0.05 /KWH.

It is assumed that when the crusher and stacking system is not operating, all other systems will still be at full operating capacity. The operating hours utilized for power costs are shown in Table 22-8.

Table 22-8 Crusher Operating Time Hours/Year Crusher Operating 4,908 Crusher Down 3,852

Detailed calculations of power requirements by piece of equipment are shown in Table 22-8.

Table 22-8

Detailed Power Requirements- Crusher Operating

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 216 Installed Hours Percent kWH kWH kW /Month Utilized /Month annual CRUSHING PLANT Primary Crushing Rock Breaker 100-RB-1 25 21 90 468 5,616 Rock Breaker 100-RB-2 25 21 90 468 5,616 Apron Feeder 100-AF-1 25 208 90 4,680 56,160 Apron Feeder 100-AF-2 25 208 90 4,680 56,160 Primary Jaw Crusher 100-CR-1 200 208 90 37,440 449,280 Primary Jaw Crusher 100-CR-2 200 208 90 37,440 449,280 Discharge Conveyor 100-BC-2 5 208 90 936 11,232 Discharge Conveyor 100-BC-1 5 208 90 936 11,232 Secondary Discharge Conveyor 100-BC-3 5 416 90 1,872 22,464 Radial Stacking Conveyor 50 416 90 18,720 224,640 Coarse Ore Stockpile Stockpile Discharge Apron Feeder 100-AF-2 10 416 75 3,120 37,440 Stockpile Discharge Apron Feeder 100-AV-4 10 416 75 3,120 37,440 Secondary Crusher Feed Conveyor 10 416 75 3,120 37,440 Secondary Cone Crusher 100-CR-3 250 416 75 78,000 936,000 Vibrating Screen Discharge Conveyor 100-BC-8 20 416 75 6,240 74,880 Secondary Cone Crusher Discharge Conveyor 100-BC-9 20 416 75 6,240 74,880 Primary Screen Feedback Conveyor 100-BC-10 20 416 75 6,240 74,880 Tertiary Cone Feed Conveyor 100-BC-11 30 416 75 9,360 112,320 Tertiary Cone Crusher 100-CR-3 250 416 75 78,000 936,000 Fine Ore Storage Feed Conveyor 100-BC-12 20 416 75 6,240 74,880 Lights 50 728 75 27,300 327,600 Contingencies 100 416 75 31,200 374,400

Sub-Total 1,710 477,980 5,735,759

PROCESS PLANT Ball Mill Feed Conveyor 200-BC-1 5 700 90 3,150 37,800 Primary Ball Mill 200-BM-1 1250 700 90 787,500 9,450,000 Wet Screen 200-VS-1 5 700 90 3,150 37,800 Ball Mill Discharge Pump 200-P-1 150 350 90 47,250 567,000 Ball Mill Discharge Pump 200-P-2 150 350 Screen Oversize Conveyor 200-BC-2 2 700 90 1,260 15,120 Screen Cross Conveyor 200-BC-3 5 700 90 3,150 37,800 Sump Pump 200-P-3 15 700 90 9,450 113,400 Gravity 6 Gekko Roughers 300 IPJ-1 thru 6 30 700 90 18,900 226,800 Cleaner Feed Pump 300-P-1 5 700 90 3,150 37,800 2 Gekko CleanersRoughers 300-IPJ-7, 8 10 700 90 6,300 75,600 Flotation Conditioner Tank 300-AG-1 15 700 90 9,450 113,400 6 Flotation Rougher Agitators 300 FC-1 thru 6 90 700 90 56,700 680,400 6 Flotation Cleaner Agitators 300-FC-7 thru 12 30 700 90 18,900 226,800 Air Blower 300-AC-1 25 700 90 15,750 189,000 Regrind Ball Mill 400-BM-2 250 700 90 157,500 1,890,000 Ball Mill Discharge Pump 400-P-2 15 700 90 9,450 113,400 Leaching Cyanide Mix Tank Agitator 10 700 90 6,300 75,600 4 Agitated CIP Leach Tanks 400-AG-1 thru 4 160 700 90 100,800 1,209,600 Air Compressor 400-AC-1 150 700 90 94,500 1,134,000 Tailings Thickener Feed Pump 400-P-7 10 700 90 6,300 75,600 Safety Screen 400-SS-2 2 233 90 420 5,040 Safety Screen 400-SS-2 2 233 90 420 5,040

Sub-Total 2501 1,422,960 17,075,520

DESORPTION (CARBON STRIP) Acid Pump 2 233 90 420 5,040 Carbon Wash Pump 2 233 90 420 5,040 Strip Solution Mix Tank 233 90 0 0 Strip Solution Boiler 5 233 90 1,050 12,600 Solution Pump - Electrowinning 2 233 90 420 5,040 Electrowinning Cells 2 233 90 420 5,040 Solution Pump - Electrowinning-Strip Vessel 2 233 90 420 5,040 Carbon Regeneration Kiln 5 233 90 1,050 12,600 Carbon Eductor Pump to Regenerated Carbon Bin 1 233 90 210 2,520 High Pressure Washer 1 233 90 210 2,520 Slurry Pump-Vacuum Filter 1 233 90 210 2,520 Vacuum Pump-Filter Press 25 233 90 5,250 63,000 Dryer Electrowinning Concentrate 5 233 90 1,050 12,600 Blower Furnace 2 233 90 420 5,040 Lighting 10 728 90 6,552 78,624

Sub-Total 67 18,522 222,264

TAILINGS & CYANIDE DESTRUCTION Flotation Tailings Conveyor Belt Filter 500-BF-1 15 700 90 9,450 113,400 Filtrate Pumps 500-P-1 thru 4 15 700 90 9,450 113,400 Vacuum Pump 500-VP-1 200 700 90 126,000 1,512,000 Cake Collecting Conveyor 500-BC-1 5 700 90 3,150 37,800 Conveyor to Tailings Bin 500-BC-1 15 700 90 9,450 113,400 Tailings Bin Leach Tailings Cyanide Destruction Reagent Mix Tank (Copper Sulfate) 7.5 700 90 4,725 56,700 Cyanide Destruction Reagent Mix Tank (Sodium Metabisulfate) 7.5 700 90 4,725 56,700 Cyanide Destruction Mix Tank 400-AG-5 30 700 90 18,900 226,800 Tailings Thickener 400-THK-2 10 700 90 6,300 75,600 Thickener Overflow-Reclaim Water Pump-Gravity Circuit 5 700 90 3,150 37,800 Thickener Underflow Tailings Pump -Vic Lake 400-P-3 20 700 90 12,600 151,200 Thickener Underflow Tailings Pump -Vic Lake 400-P-4 20 700 90 12,600 151,200 Sub-Total 350 220,500 2,646,000 ASSAY OFICE Furnaces 60 700 90 37,800 453,600 A/C 6 700 90 3,780 45,360 Exhaust Fans 10 700 90 6,300 75,600 Lighting 4 700 90 2,520 30,240 Auxiliary 15 700 90 9,450 113,400

Sub-Total 95 59,850 718,200

Totals Crushing + Processing 4,723 2,199,812 26,397,743

Total No Crushing 3,013 1,721,832 20,661,984 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 217 GENERAL AND ADMINISTRATIVE COSTS

General and administrative costs are summarized in Table 22-9.

Table 22-9 General and Administrative Costs Summary Unit Annual Cost Cost Corporate office $0.172 310,000 Mine Site $1.672 3,009,950 Social Program $0.015 27,300

Total $1.860 3,347,250

Corporate Office

The cost of maintaining the Corporate office is detailed in Table 22-10. These costs are broken into administrative labor and expenses and detailed in Table 22-11 and

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 218 Table 22-12, respectively.

The Corporate office is essential for governmental, purchasing and general administrative duties that must be performed in the city. Should the mine site be determined to be a more suitable office site after operations begin, costs are expected to be similar. The personnel are all salaried. The staff will not change in number during mine life.

Table 22-10 Corporate Administrative Cost Summary Unit Annual Cost Cost Labor $0.139 250,000 Expenses $0.033 60,000

Total $0.172 310,000

Table 22-11 Corporate Administrative Labor Costs Number Plan Direct Cost Loaded Cost Comptroller 1 A 100,000 125,000 Receptionist / Expediter P/T 1 A 25,000 31,250 Purchasing Agent 1 A 75,000 93,750

Total 3 250,000

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 219 Table 22-12 Corporate Administrative Expenses Annual Cost

Postage 3,600 Rent 12,000 Telephone 30,000 Utilities 5,000 Insurance 3,000 Office Equipment 3,000 Office Supplies 1,000 Repairs and Maintenance 2,400

Totals 60,000

Goldfields Mine Office

Number Plan Direct Cost Loaded Cost Mine Manager 1 A 150,000 187,500 Secretary Receptionsist 1 A 47,000 58,750 General Office Clerk 1 A 47,000 58,750 Systems Engineer 1 A 75,000 93,750 Human Resources 1 A 75,000 93,750 Training & Safety 1 A 75,000 93,750 Housing Maintenance Supervisor 1 A 57,000 71,250

Total 7 657,500

Table 22-15 The cost of maintaining the mine office is detailed in Table 22-13. Mine site administrative costs are divided into administrative labor (Table 22 14), administrative expenses (Table 22-13) and warehousing and purchasing (Table 22-16)

Functions included in administrative manpower are management, purchasing, accounting, security, safety and support.

Staff are all salaried and the number of personnel will remain constant throughout mine life.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 220 Table 22-13 Mine Site Administrative Cost Summary Unit Annual Cost Cost Admin Labor $0.365 657,500 Expenses $1.269 2,283,700 Warehouse/Purchasing $0.038 68,750

Total $1.672 3,009,950

Table 22-14 Mine Site Administrative Labor Costs Number Plan Direct Cost Loaded Cost Mine Manager 1 A 150,000 187,500 Secretary Receptionsist 1 A 47,000 58,750 General Office Clerk 1 A 47,000 58,750 Systems Engineer 1 A 75,000 93,750 Human Resources 1 A 75,000 93,750 Training & Safety 1 A 75,000 93,750 Housing Maintenance Supervisor 1 A 57,000 71,250

Total 7 657,500

Table 22-15 Mine Site Administrative Expenses Annual Cost Insurance - Light Vehicles 12,000 Insurance - Equipment 50,000 Legal Fees 25,000 Vehicle Operating Costs 30,000 Bus Service 36,000 Winter Road Freight 1,300,000 Communucations 10,000 Office Supplies 6,000 Postage 1,200 Accounting / Auditing 12,000 Fees and Dues 1,000 Subscriptions 500 Living Allowance Subsidies 750,000 Other Administrative Costs 50,000

Totals 2,283,700

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 221 Table 22-16 Mine Warehouse and Purchasing Labor

Number Plan Direct Cost Loaded Cost Warehouse Coordinator 1 A 55,000 68,750

Total 1 68,750

MINING COST

Mining costs are based on production estimates as shown in the production schedule, and are separated into manpower, consumable supplies, explosives and equipment operating expenses (Table 22-17).

Unit Cost Annual Cost

Ore Mining per tonne of ore $2.119 3,814,331 Waste Mining per tonne of waste $1.301 7,413,482

Totals 11,227,813

Table 22-17 Mining Cost Summary

ORE Unit Cost Annual Cost Mine Labor $0.898 1,616,875 Maintenance Labor $0.323 581,250 Equipment Expense $0.604 1,087,426 Mine Consumables $0.006 9,900 Maintenance Consumables $0.017 30,000 Explosives $0.222 398,880 Major Repairs $0.100 90,000

Totals $2.119 3,814,331

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 222 WASTE Unit Cost Annual Cost Mine Labor $0.483 2,754,375 Maintenance Labor $0.131 743,750 Equipment Expense $0.483 2,750,896 Mine Consumables $0.002 9,900 Maintenance Consumables $0.005 30,000 Explosives $0.182 1,034,560 Major Repairs $0.016 90,000

Totals $1.301 7,413,482

Mining Manpower

Manpower requirements are listed in Table 22-21.

Table 22-18 Mine Labor Summary

Number Plan Direct Cost Loaded Cost Mine Superintendent 1 A 110,000 137,500 Shift Supervisors 4 A 90,000 450,000 General Operators (Dozer, Grader, Explosives, etc) 8 A 65,000 650,000 Drillers 6 A 65,000 487,500 Loader Operators 8 A 65,000 650,000 Truck Drivers 20 A 65,000 1,625,000 Chief Engineer 1 A 65,000 81,250 Chief Geologist 1 A 110,000 137,500 Geologic Modeller 1 A 65,000 81,250 Mine Planning Technician 1 A 57,000 71,250

Totals 51 757,000 4,371,250

Mining Maintenance & Consumables

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 223 Table 22-19 assumes a two-shift maintenance operation.

Consumable costs include survey stakes, grade control flags, computer and drafting supplies and software costs and are based on operating experience.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 224 Table 22-19 Mine Maintenance Labor Costs

Number Plan Direct Cost Loaded Cost Maintenance Superintendent 1 A 110,000 137,500 Maintenance Programmer 1 A 80,000 100,000 Heavy Mobile Equipment Mechanics 4 A 65,000 325,000 Welder 1 A 65,000 81,250 Machinist 1 A 65,000 81,250 Electrician / Electronics Technician 2 A 65,000 162,500 Tire Man 4 A 65,000 325,000 Apprentice 2 A 45,000 112,500

Totals 16 560,000 1,325,000

Equipment expense includes diesel fuel, lube, routine maintenance, tires and all other costs associated with the operation of vehicles presented in Table 22-20. These costs are based on cost experience of Brown & Root and Caterpillar Equipment. Western Mine Engineering's Mine and Mill Cost guide was referenced as well.

Table 22-20 Mining Equipment Operating Cost

Cost Per Hour Annual Cost P M Fuel Tires G E T Total $/Hr Hours Cost Cost/T

Drill (2) 5.83 37.64 0.00 12.50 55.97 5,592 312,976 $0.174 Dozer D8R (2) 4.20 28.23 0.00 6.51 38.94 12,614 491,157 $0.273 Hitachi EX1200 Shovel 8.86 66.59 17.92 22.73 116.10 5,257 610,360 $0.339 Haul Trucks Cat 777 Ore 8.25 49.22 14.93 2.98 75.38 4,100 309,038 $0.172 Haul Trucks Cat 777 Waste 8.25 49.22 14.93 2.98 75.38 21,000 1,582,875 $0.879 Fuel Truck 3.42 31.12 3.50 0.00 38.04 849 32,297 $0.018 Light Plants (4) 0.43 0.30 0.02 0.09 0.84 13,584 11,411 $0.006 Water Truck 3.42 31.12 3.50 0.00 38.04 2,688 102,255 $0.057 Tire Truck 3.42 31.12 3.50 0.00 38.04 849 32,297 $0.018 Motorgrader 14H 2.89 29.38 7.23 6.25 45.75 6,307 288,581 $0.160 Mechanics Truck 3.42 31.12 3.50 0.00 38.04 1,274 48,446 $0.027

Totals 52.39 385.05 69.03 54.04 560.51 74,115 3,821,692 $2.12

Explosive consumption assumes that 100% of the mined material will require blasting. Operating experience suggests that this is likely overstated. Explosive costs are shown in Table 22-21.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 225 Table 22-21 Explosive Cost Calculations

TOTAL Factors Tons Blasted 7,496,917 Explosive Use (kg per Tonne) 0.26 Kilograms of Explosives 1,949,199 Cost per kilogram 0.66 Powder Cost 1,286,471 Other explosive costs per tonne 0.020 Auxiliary explosive costs 146,969

Total Explosive Costs 1,433,440

CRUSHING COSTS

Crushing and stacking costs are summarized in Table 22-22. The costs have been itemized into plant labor, maintenance labor, consumable costs (which include spare parts), and power costs.

Table 22-22 Crushing and Stacking Cost Summary

Unit Cost Annual Cost Labor $0.750 1,350,000 Crushing Consumables $0.397 714,600 Power $0.159 286,788

Totals $1.306 2,351,388

Crushing and Stacking Manpower

Manpower for crushing and stacking includes 26 nationals and one expatriate. Plant maintenance personnel total 19 nationals and one expatriate superintendent. Manpower costs are itemized in Table 22-23.

.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 226 Table 22-23 Crushing and Stacking Labor Costs Number Plan Direct Cost Loaded Cost

Crusher Operators 8 A 85,000 850,000 Stacker Operators 8 A 50,000 500,000

Totals 16 1,350,000

Crushing and Stacking Maintenance and Consumables

Consumable costs are based upon operating experience as well as operating cost guides. The cost figures in Table 22-24 are considered to be conservative. These costs include all maintenance parts and materials.

Power costs in Table 22-24 have been calculated for crushing and stacking based on usage.

Table 22-24 Crushing and Stacking Consumable Costs Component Total Cost $/Tonne Primary Crushing Bin & Rockbreaker 21,600 $0.012 Vibrating Grizzlies 27,000 $0.015 Jaw Crushers 18,000 $0.010 Liners 90,000 $0.050 Coarse Ore Stockpile Conveyors Stackers 18,000 $0.010 Belting 126,000 $0.070 Idlers 90,000 $0.050 Apron Feeders 27,000 $0.015 Secondary Crushing Cone Crushers 27,000 $0.015 Liners 180,000 $0.100 Screens 90,000 $0.050

Totals 714,600 $0.40

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 227 Table 22-25 Crushing and Stacking Power Costs Annual Cost kWH $/kWH Cost Crushing power 5,735,759 0.05 286,788

Totals 5,735,759 286,788

PROCESSING COSTS

Table 22-26 Processing Cost Summary Unit Cost Annual Cost Process Labour $0.569 1,025,000 Assay Lab Labour $0.322 580,000 Maintenance Labour $0.386 695,500 Consumables $2.830 5,094,490 Power $0.500 900,799 Equipment $0.017 30,860

Totals $4.626 8,326,649

Processing Manpower

Labor requirements for the process operations include 12 persons. A three shift operation is planned for the process group.

Table 22-27 Processing Manpower Costs Number Plan Direct Cost Loaded Cost Superintendent 1 A 110,000 137,500 Metallurgist Technician 1 A 60,000 75,000 Mill Operators 4 A 75,000 375,000 Mill Labourers 4 A 50,000 250,000 Refiners 2 A 75,000 187,500

Totals 12 370,000 1,025,000

Processing Maintenance and Consumables

Process and plant consumables costs are included in Table 22-28.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 228 Table 22-4 details the non-reagent consumable costs. Reagent costs are provided in Table 22-5.

Table 22-28 Processing Consumable Costs Total Cost $/Tonne

Process Plant Equipment Consumables 3,829,320$ 2.13 Reagents 1,265,170$ 0.70

Totals 5,094,490 2.830

Table 22-29 Processing Power Costs

Annual Cost kWH $/kWH Cost Process Plant 17,297,784 0.05 864,889 Laboratory 718,200 0.05 35,910

Totals 18,015,984 0.05 900,799

ASSAY LABORATORY COSTS

Assay Laboratory Manpower

The assay laboratory requires 7 personnel. The lab will operate two shifts per day, six days per week. The cost of these workers is itemized in Table 22-34..

Table 22-30 Assay Laboratory Manpower Requirements Number Plan Direct Cost Loaded Cost Chief Assayer and Metallurgist 1 A 80,000 100,000 Assayer 2 A 72,000 180,000 Sample Preps 4 A 60,000 300,000

Totals 7 212,000 580,000

Assay lab reagents are included in process consumables, and other costs are included in the contingency for operating costs.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 229 PROCESS AND AUXILIARY MOBILE EQUIPMENT

The itemized cost for the auxiliary mobile equipment is included as Table 22-31.

Table 22-31 Process and Auxiliary Equipment Operating Costs

Cost per Hour Annual Cost Parts Fuel Lube Tires Total $/Hr Hours Cost Cost/T Skid Steer Loader 3.26 4.25 1.07 0.59 9.17 1,314 12,043 $0.007 Forklift 3.26 4.24 1.07 0.59 9.17 1,314 12,050 $0.007 Process Shift Truck 0.50 1.98 0.34 0.27 3.09 2,190 6,767 $0.004 Totals 7.02 10.47 2.48 1.45 21.43 30,860 $0.017

ENVIRONMENTAL COSTS

Environmental costs have been estimated for the project (Table 22-32). Labor costs and consumable costs are identified and estimated separately (Table 22-37). These costs are in addition to reclamation and closure costs, and represent the average annual operating expense, which may vary from year to year.

Table 22-32 Environmental Costs Unit Cost Total Cost Labor $0.090 162,500 Consumables $0.044 80,000 Power $0.074 132,300 Totals $0.208 374,800

Table 22-33 Environmental Manpower Costs Number Plan Direct Cost Loaded Cost

Environmental Superintendent 1 A 60,000 75,000 Laborers 2 A 35,000 87,500

Totals 3 95,000 162,500

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 230 Table 22-38 Environmental Consumables Costs Annual Cost Sedimentation Control 30,000 Fertilizer and Seed 3,000 Plants 9,000 Hand Tools 6,000 Miscellaneous Supplies 2,000 Water Sampling 30,000

Totals 80,000

Table 22-39 Environmental Power Costs Annual Cost kWH $/kWH Cost

Flotation & Leach Tailing Power 2,646,000 0.05 132,300

Totals 2,646,000 0.05 132,300

Table 22-40 Social Program Cost Summary Unit Cost Total Cost Labor $0.004 7,500 Expenses $0.011 19,800

Totals $0.015 27,300

Table 22-41 Social Program Manpower Cost Number Plan Direct Cost Loaded Cost Social Program Director 1 A 6,000 7,500

Totals 1 6,000 7,500

Table 22-42 Social Program Expenses Annual Cost Community Development 12,000 Public Relations 1,800 Health & Education 6,000

Totals 19,800

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 231 23.0 ENVIRONMENTAL PERMITTING 23.1 INTRODUCTION

The GLR Goldfields Box Mine Project, due to its location, is under the jurisdiction of both federal and provincial regulatory agencies. The Environmental Assessment Branch of the Saskatchewan Environment & Resource Management (SERM) ministry is empowered to regulate the operation of WKLV SURMHFW XQGHU WKH WHUPV RI µ7KH (QYLURQPHQWDO $VVHVVPHQW $FW´ $GGLWLRQDOO\ GXH WR WKH SURMHFW¶VSRVVLEOHLPSDFWRQDTXDWLFKDELWDWWKH'HSDUWment of Fisheries and Oceans (DFO), under the terms of the Aquatic Habitat Protection Permit, maintains jurisdiction, as a regulatory agency. */5 DQWLFLSDWHV WKDW ZDWHU TXDOLW\ SDUDPHWHUV DV GHILQHG E\ WKH ³0HWDO 0LQLQJ (IIOXHQW 5HJXODWLRQV´ 00(5  RI WKe Federal Fisheries Act, will define the discharge parameters for effluents generated by the future operations of the Box Mine Project.

In order to simplify and facilitate the environmental review process, under the terms of Canada- Saskatchewan Agreement on Environmental Assessment Cooperation, the Ministry of Environment (Saskatchewan) is designated as the Coordinating Regulatory Agency. In this role as Coordinator, WKH0LQLVWU\RI(QYLURQPHQW 6DVNDWFKHZDQ DVVHVVHVWKHSHWLWLRQHU¶VSURMHFW¶VSRWHQWLDOLmpacts on the environment and subsequently solicits the participation of the appropriate Regulatory Agencies, in the review process.

$V LQGLFDWHG LQ 6HFWLRQ  RI WKLV UHSRUW */5 PXVW REWDLQ DSSURYDO RI WKH *ROGILHOG 3URMHFW¶V Environmental Impact Statement. The approval of this document is of paramount importance, as this approval is generally a prerequisite of the additional approvals and permits, required for this project.

23.2 ENVIRONMENTAL IMPACT STATEMENT

Numerous investigations have defined the probable impacts of this project on the environment. A minimum of two documents have been previously submitted to both the Federal and Saskatchewan Environmental Regulatory Agencies, in reference to the GLR Goldfields Box Mine Project. The first documenWZDVSURYLGHGE\&OLIWRQ$VVRFLDWHV/WG³)HDVLELOLW\6WXG\%R[DQG$WKRQD0LQHV *ROGILHOGV 3URMHFW /DNH $WKDEDVFD´ LQ  7KH VHFRQG GRFXPHQW ZDV SURYLGHG E\ 80$ (QJLQHHULQJ/WG³*UHDWHU/HQRUD5HVRXUFHV,QF(QYLURQPHQWDO,PSDFW6WDWHPHQW%R[ Starter Pit 0LQH*ROGILHOGV3URMHFW1RUWKHUQ6DVNDWFKHZDQ´LQ-DQXDU\

5DWKHUWKDQDFRPSOHWHUHDVVHVVPHQWRIWKLVSURMHFW¶VLPSDFWWKLVVHFWLRQRIWKHUHSRUWZLOO describe the differences in the Environmental Assessment findings (impacts and mitigation) previously presented to both Federal and Saskatchewan Provincial Regulatory Agencies and the anticipated environmental impacts and mitigation requirements for the Box Project as proposed by this study. These documents will form the basis of this review; if no significant discrepancy exists between prior findings and those of the current project, GLR will follow the recommendations of these previous submittals. ( ³)HDVLELOLW\6WXG\Box and Athona Mines, GoldfieldsProject, LakeADWKDEDVFD´&OLIton Associates Ltd., Oct.1995)

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 232 Gravity Tailings

The most significant deviation, from the Clifton Feasibility Study, is the treatment of the Gravity/Flotation tailings. The Clifton report treated these tailings by slurry deposition in multiple Tailings MaQDJHPHQW )DFLOLWLHV 70)¶V  DQG VROXWLRQ UHFODPDWLRQ &OLIWRQ IXUWKHU SURMHFWHG WKDW RIWKHVXOILGHVZRXOGEHUHPRYHGIURPWKHVHWDLOLQJV¶VWUHDPVDQGWKDWWKHVHWDLOLQJVZRXOG not be a source of acid generation.

Based on the benign characteristics of these Flotation and Gravity tailings, as defined by Clifton, the Box Project has now opted for deposition of these tailings within the Waste Dump facility. Prior to their land deposition, these tailings will be filtered and water removed. Due to the relative coarseness of these tailings, the filter cake produced will retain less than 10% water by weight. The vast majority of the flotation reagents used in the Flotation Circuit will have been consumed and removed with the Flotation concentrate; only trace residues of these reagents will be evident in the filter cake. To ensure compliance with MMER process water discharge parameters, sedimentation and effluent collection/retention ponds will be provided at the toe of the waste dump facility. Their primary purpose will be the removal of suspended solids from the waste dump effluent; this collection/retention pond will also provide sufficient retention time, to ensure compliance with the permissible discharge parameters, as specified by MMER, for effluents prior to their discharge. The primary usage of this decanted clarified solution will be dust control applications and/or Make-Up Process Water. As indicated in Section 18 of this report, this facility will not generally provide sufficient water to meet these needs and a requirement to discharge to the environment as a flow is remote. Should solution discharge be required, a siphon will be utilized for flow control. Should conditions require a solution discharge from this pond while water quality parameters preclude direct discharge to the environment, the solutions will be pumped to the Cyanide Leach Circuit TMF.

Of benefit, the internment of tailings within the Waste Dump facility will, due to the acid consuming characteristic of these tailings, further minimize any possibility that this Waste Dump will ultimately be acid generating. The test work performed by Clifton, for acid generation potential, did indicate that one waste rock sample offered uncertain results. This sample was determined to be uncharacteristic by Clifton.

The deposition of the Gravity/Flotation tailings material, in the Waste Dump, will not increase Make-Up water requirements as the 10% solution by weight entrained in the Tailings filter cake is equivalent to the solutions that would have beeQ ORVW WR SRUH VSDFH LQ &OLIWRQ¶V SURSRVHG 70) settled tailings. As defined in Section 18, total annual make-up solution requirements will approximate 217,000 cubic meters.

Cyanide Tailings

The Clifton report called for the deposition of cyanide tailings LQ  VHSDUDWH 70)¶V GXULQJ WKH PLQH¶VRSHUDWLRQDOOLIH7KHLUSURSRVHGSODQFDOOHGIRUWKHXVHRIERWKWKH7ULDQJOHDQG9LF/DNH

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 233 Basins as depositories for cyanide tailings and did not call for the drainage of either body of water prior to conversion to a TMF. The expectation was that minimal solution discharge would be required, from these TMFs, as the majority of these solutions would be recycled.

As this report considers only the ore and concomitant tailings from the Box Deposit, the differences are notable, in the proposed treatment of cyanide tailings. As there are 11 million tonnes of ore in the Box Deposit, 1.1 million tonnes of cyanide tailings will be generated and subsequently stored, in TMFs. This tonnage of cyanide tailings requires approximately 760,000 m3 of storage, in the TMF. This volume could be further reduced if consolidation takes place within the deposited tailings. &RQVROLGDWLRQFRXOGUHGXFHWKHYROXPHRIDFWXDOWDLOLQJ¶VVROLGVWRDSSUR[LPDWHO\P$V there is sufficient volume, in Vic Lake to deposit this proposed tailings volume, to a subaqueous environment, GLR will limit their current requirements to the Vic Lake TMF. Further, this proposal FDOOVIRUWKHGUDLQDJHRI9LF/DNHSULRUWRLW¶VFRQYHUVLRQWRD70)3UHYLRXVZDWHUquality analyses have indicated that the pore water within the current tailings does not meet MMER discharge standards. Drainage and discharge from this facility will be done slowly so as not to promote pore water migration and discharge standards will be monitored continuously to ensure compliance with MMER criteria.

As indicated in Section 18, the Leach Circuit effluent stream will during operations, annually generate approximately 30,000 cubic meters of decanted solutions that will require treatment prior to discharge. The actual requirement for recycled solution is minimal as the Gravity and Flotation concentrates enter the Leach Circuit at 65% solids by weight and exit as Leach tailings, to the TMF at the same consistency. The cyanide solution recovereG IURP WKH WDLOLQJV¶ WKLFNHQHU RYHUIORZ LV used simply to dilute the regrind ball mill discharge prior to the CIP tanks; no additional recycled solution is required. Further, experience suggests that the recovery of decanted solutions from the TMF during the months of October through to April will be compromised due to the cold weather and freezing conditions prevalent during this period.

The current plan calls for the construction of a temporary permeable dam at the current point of discharge from Vic Lake (217.5m). The spillway for this dam will be constructed at an elevation of 222 meters which corresponds to the elevation of the Box Pit west wall. This elevation will provide a total available volume, within the TMF of in excess of 1.2 million cubic meters. The dam will be constructed of Gabion Baskets covered with Geo-Textile to entrap any suspended particulates, entrained in the liquid fraction of the Leach effluent. This dam will discharge, should conditions require, into an impermeable lined solution pond. This pond will be constructed within the confines of an intermittent creek connecting Vic Lake to Frontier Lake. The spillway elevation, from this pond will be at the 222 meter elevation. A double layer, of 80 mil HDPE Geo-Membrane, will ensure the impermeability of this pond. Should the decanted liquid fraction of the tailings effluent reach discharge levels from the TMF or 217.5 meters, this solution will be filtered by the temporary permeable dam for removal of suspended solids and subsequently treated by the cyanide destruction process prior to discharge. In the event that conditions were to exist requiring a non MMER compliant liquid effluent discharge to the environment, this effluent would be pumped to the Box Pit for temporary storage, reprocessing and treatment. If required for permitting purposes, an

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 234 emergency spillway could be constructed, within the first year of operation, between the TMF and the Box Pit, to guarantee that any uncontrolled discharge from this TMF would be directed to this Pit. As the total volume added to the TMF annually is approximately:

x Tailings - Settled Solids = 124,000 m3 x Tailings Solution (less pore water) = 13,500 m3 x Precipitation = 16,000 m3 x Sewage Grey Water = 290 m3 153,790 m3

by initially draining the Vic Lake TMF, the project is provided with a 5 year window of opportunity whereby all sources entering this facility would be contained without requiring a discharge. It is therefore reasonable to designate the Box Pit as the designated receptor of an emergency discharge.

As denoted, there is sufficient volume available for storage of the cyanide tailings solids and provide a subaqueous environment for their permanent deposition; however, there is a deficiency in the proposed TMF volume to store all excess solutions, i.e., the 30 thousand cubic meters generated annually during operations. This volume of solution would conventionally be treated and subsequently discharged to the environment. However, the geographical location of the Box Deposit provides an alternative to this treatment/discharge methodology. By enhancing natural evaporation rates, during the extended hours of sunlight of the summer solstice period, evaporation of this excess solution is a viable alternative to discharge. This methodology was utilized at +RPHVWDNH&DQDGD¶V1LFNOH3ODWHPLQHVLWH ZZZWXUERPLVWHYDSRUDWRUVFRP ZLWKVXFFHVV

Additionally, by evaporating excess solution, the alkalinity of the remaining solution will be increased and this alkalinity will be available to promote precipitation of heavy metals and mitigate the possible acid generation potential of these tailings.

As indicated, an initially drained Vic Lake provides a five year window of opportunity to confirm the results of implementing this proposal. Although the concept, technology and recent experience confirm the viability of this treatment process, this window will allow regulators, mine operators and skeptics to confirm these results.

7KH VHFRQG GRFXPHQW ³*UHDWHU /HQRUD 5HVRXUFHV ,QF (QYLURQPHQWal Impact Statement, Box 6WDUWHU 3LW 0LQH *ROGILHOGV 3URMHFW 1RUWKHUQ 6DVNDWFKHZDQ´ */5¶V (,6  ZDV SURYLGHG DQG submitted, by UMA Engineering Ltd., in January, 2007. This document is currently in the SERM review process. Similar to the Clifton Report, the tailings scheme proposed by this report deviates from that included in the EIS proposal. The following Table denotes the variances in these reports:

EIS-Ref. UMA Engineering Ltd. Current Feasibility Report 2.1 Daily Plant Capacity=2,000MT Daily Plant Capacity=5,000 MT 2.1 & 2.3 Process=Gravity Concentration + Process=Gravity/Flotation Cyanide Leach Concentration + Cyanide Leach 2.1.1 Proposed dam and dyke construction Proposes temporarily damming the

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 235 to raise the level of containment current outflow point to 220m (the available at Vic Lake to 235m elevation of the surrounding topography providing for a storage volume of +3 and increasing storage to 1.5 million million m3 m3. Should Vic Lake require emergency discharge, the Box Pit would receive this overflow and not Frontier Lake. 2.2.2 Mineable Reserve Estimate Mineable Reserve Estimate High Grade = 1.456 million T High Grade = 11 million T @1.75g/T @3.26g/T Waste = 38.5 million T Low Grade = 1.456 million T @0.44g/T Waste = 2.442 million T 2.2.3 Pit Dimensions: Pit Dimensions: Length = 350 m Length = 700 m Width = 250 m Width = 350 m Depth = 70 m Depth = 150 m 2.2.3 Gravity Tailings slurry would be used Low grade material from the Box Pit to fill voids excavated by prior would be used to fill these voids and mining. subsequently excavated as mining progresses. 2.2.4 Mine Personnel = 16 Mine Personnel = 113 2.3 Process Water 90% recycle Process Water 65% recycled Consumption = 118,000 m3/yr Consumption = 630,000 m3/yr 2.3.2 The Process Plant utilizes only The inclusion of a flotation circuit gravity separation and cyanide increases overall recovery by as much leaching within an Inline Leach as 10% and reduces the amount of Reactor (ILR). This process reduces sulfides entering the Gravity/Flotation the amount of solution requiring tailings stream. It does increase the treatment and provides for a Gold amount of solution entering the Leach recovery of approximately 85%. Circuit concomitantly requiring Table 2-13 of the UMA Study treatment prior to presents flotation tailings discharge/evaporation. Continued characteristics as presented in a design testing may ultimately permit Lakefield Research Ltd. 01/96 report. utilization of the original ILR circuit. Solution quantities requiring treatment would be greatly minimized by filtering the flotation concentrates with a suitable drum filter and recycling TMF solutions to re-pulp these concentrates within the regrind/leach circuit. This step would reduce solution treatment requirements to less 0.75% by weight of total ore processed. 2.3.6 Reagents will include lime, cyanide, Additionally, Xanthate, Sodium hydrogen peroxide, copper sulfate Hydroxide and Metabisulfate and catalyst, air and flocculant MIBC will be utilized.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 236 2.4.1 2.4 million tonnes of waste material 38.5 million tonnes of waste will be would be generated generated and an additional 10 million tonnes of process tailings will be deposited, in the Waste Dump Facility. 2.4.1.3 Due to the inclusion of a Flotation Circuit, the presence of sulfides in the primary tailings stream will be negligible. 2.4.2 380,000 m3 of benign waste rock will The amount of waste material required be used to construct the containment will be substantially reduced as only the dyke around Vic Lake current discharge point will be elevated. 2.4.3.1 The Gravity Circuit solid rejects The Flotation Circuit solid tailings would represent 90% of the ore would represent 90% of the ore weight weight processed and the solid processed and the solid tailings from the tailings from the ILR would represent Leach Circuit would represent 10% of 10% of the ore weight processed the ore weight processed 2.4.5 The Vic Lake TMF would see Upon cessation of operations, the overtopping and discharge after 18 temporary Dam would be removed and years of service. Discharge natural outflow reestablished. Outflows compliance with MMER Standards is would be monitored to ensure anticipated. compliance with discharge parameters. Compliance with MMER Standards is anticipated. The elevation of the tailings solids would be less than 217m elevation and a 1.5m covering of water would remain. Should solutions not meet discharge standards, these solutions would be directed to the Box Pit for further treatment or evaporation techniques would continue indefinitely. 2.4.5.1 Vic Lake is not to be drained Vic Lake is to be drained and the water pumped into Lake Athabasca once water quality is confirmed. 2.4.5.2 Filtration of Tailings solution is Because hydraulic head between the expected from the TMF into the Box TMF and the Box Pit will be kept to a Pit up to a rate of 500 m3/year minimum, less filtration will be evident. The trace levels of cyanide in the Total cyanide will not reach these tailings stream are expected to range levels. Due to the utilization of between .00033ppm and .001ppm atomization to promote evaporation, the VXQ¶V XOWUD-violet rays and oxidation will assist in the destruction of weak- acid-dissociable WAD cyanide during the summer months and these levels will be attainable. However, during the winter months these levels will be unattainable. 2.6.3 Undoubtedly, some improvement to the

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 237 barge landing site will be required to facilitate barge loading/off loading procedures. These improvements will further be required to improve safety and minimize environmental risk. 2.6.4 The winter road location is dependent on negotiations. Currently, the most favourable route minimizing transport distances (improving safety and minimizing costs) is from the Fort McMurray area. There is rail haulage to Fort McMurray 2.7.4 Fuel will be transported by barge or Barges will utilize the Athabasca River by winter road from Stony Rapids from Fort McMurray and Mackay for fuel delivery

As noted, this section of the report has delved into the principal differences between the project as proposed and the EIS as prepared by UMA. Many of the mitigation procedures outlined in their EIS have been incorporated into the engineering design and mine plan of this project. A copy of their finding is annexed; unless otherwise indicated, the findings of the UMA report reflect correctly the current requirements of this project. To complete this section of the report, a copy of the UMA report is annexed.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 238 24.0 HUMAN RESOURCES AND ADMINISTRATION

The objective of the Human Resource (HR) policies to be implemented by GLR Resources at their Goldfields Project is to attract a highly skilled, stable and motivated workforce. GLR recognizes that, to meet these objectives, HR policies must be implemented, during the start-up phase.

The objectives of these HR policies are:

¾ Attract a stable workforce comprised of skilled workers. The ideal employee candidates will be the breadwinners from young families and from families preparing for retirement. ¾ Avoid the disruptive attributes of Fly-In/Fly-Out or Long Distance Commuting (LDC) employment. ¾ Avoid the requirement to construct significant Camp infrastructure. ¾ Provide for a highly flexible workforce to maximize employee utilization and control the number of employees. ¾ Motivate the employees to learn additional skills to increase their personal contribution and worth to the project.

GLR Resources will achieve these goals by implementing the following:

¾ Has remodeled the former Court House in Uranium City as temporary quarters for temporary construction employees and eventually for operational personnel. A total of 35 rooms are currently being constructed in this facility. ¾ Will endeavour to hire operational personnel from the region. The communities of Stony Rapids and Fond du Lac will be the primary recruitment centres for this project. There is a sufficiently large population base, in these communities, to meet personnel requirements. Employees on shift rotation will be flown home to their community during their work breaks. ¾ Will provide company housing to those employees required to relocate their families to Uranium City. Services offered in Uranium City will be complemented as required to provide these employees and their families access to comparable standards of services found in Saskatoon. This will include medical and dental, shopping, etcetera. Where costs are impacted by locality, GLR will provide subsidies to bring these costs in-line. GLR will further, in collaboration with the administration of Uranium City, ensure that their employees and relocated families will have access to the recreational and civic activities currently available in Uranium City. ¾ GLR will exploit all available technology that facilitates employees controlling and monitoring process systems and both stationary and mobile equipment remotely. Reducing onsite manpower requirements is a priority for GLR. ¾ */5ZLOOLPSOHPHQWD³*DLQ6KDUH3ODQ´ZLWKHPSOR\HHSDUWLFLSDWLRQLHDSROLF\ZKHUHE\ workers share economically in improvements in actual costs versus budgeted costs, with cost saving shared between the employee and the employer. ¾ */5ZLOOSURYLGHWKHWUDLQLQJSURJUDPVQHFHVVDU\WRLPSOHPHQWDSROLF\GHQRWHGDV³/LQHV RI3URJUHVVLRQ´7KLVSROLF\SURYLGHVIRUHFRQRPLFUHFRJQLWLRQRIHPSOR\HHVZKRDVVLPLlate and demonstrate their ability to successfully perform additional job functions. Compensation LVEDVHGRQDQHPSOR\HH¶VDELOLW\WRSHUIRUPWKLVSHUPLWVDQGPRWLYDWHVHPSOR\HHVWR assimilate the knowledge to perform additional tasks. Wage scales/ranges are defined by demonstrated skill levels; job descriptions are defined by all activities required for a given

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 239 function. For example, a General Mill Operator would have demonstrated competency in all facets of the following process sections; Crushing, Grinding, Gravity, Flotation, Leaching, Stripping, Refining, etc. Remuneration is based on ability to perform the various tasks associated with these process sections and concomitantly, the employee can be directed to perform any function covered by her/his current level of compensation including laboring if required. ¾ Spousal Employment Policy: Opportunities will be provided to train and employ the spouses of employees, from Uranium City. Nepotism will be avoided by insuring that spouses are employed in differing departments. ¾ Minesite personnel ¾ Shift Rotation: All employees, with positions not requiring shift rotations, will work a 5x2 rotation, with on-call status during weekends. All employees, with positions requiring shift rotations will work a 6x2 shift rotation. ¾ All administrative personnel performing job functions, that require limited personal contact with operations personnel, will be located in Saskatoon. ¾ As advances are made in implementing the technology allowing remote control and monitoring of processes and equipment (mobile and stationary), the employees affected will be relocated to Saskatoon.

ADMINISTRATION

Fuel supply contracts for the supply of site fuels including diesel fuel, propane and gasoline will be tendered to local fuel suppliers as well as distributors in major centres such as La Ronge, Prince Albert and Saskatoon. Preference for local northernsupply will be taken into consideration in the selection of fuel supplies.

Mining, processing and camp facilities construction contracts for the supply and construction the various facilities will be tendered and awarded. Maximizing the northern and Saskatchewan content will be a major factor in the selection of the appropriate contractors for this work. GLR plans to engage a camp catering firm to provide the camp operation services including catering and housekeeping similar to other northern Saskatchewan mines. A fully serviced camp will be located in Uranium City. Services will include electrical power, potable water, sewage collection, oil and electrical heating systems, town fire truck with sprinklers on site.

GLR plans to contract charter air service similar to other northern Saskatchewan mines. Air service from various northern communities such as Fond du Lac, Stony Rapids, Black Lake, as well as La Ronge, Prince Albertand Saskatoon is proposed.

At the minesite, electrical power will be supplied by SaskPower's through 110,000 Volt line from Wellington dam Site. Mill process, potable water and fire water needs will be supplied by an intake and pumphouse on Neiman Bay. Sewage will be pumped as grey water into the tailings management system along with the other tailings. Fuel storage tanks, distribution and dispensing systems shall be provided. Specific locations, and details will be determined at a later design stage.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 240 25.0 CAPITAL COST

25.1 INTRODUCTION

The capital cost estimate is based on quotations received by BETA from GLR and Dan Mackie Associates from manufacturers, as well as from trade publications, Machinery Trader, and historical data from current operations. The cost estimate is considered accurate to within +/- 15% at the summary level and is expressed in US dollars. 25.2 BASIS OF CAPITAL COST

25.2.1 Roads and Carriers

Access to the *ROGILHOG3URMHFW¶Vsite would be from either Saskatoon or Edmonton. The preferred route would be through Edmonton and Fort McMurray because of the existing transportation infrastructure. Railway service is available to Fort McMurray by Canadian National Railway in conjunction with the Athabasca Northern Railway. All weather roads exist to Fort Mackay, Alberta, Stony Rapids, Saskatchewan and Fitzgerald via Hay River and Fort Smith, North West Territories. These localities are the terminus of the permanent road systems, in the vicinity of the *ROGILHOG¶V Project; subsequent travel is restricted to winter and ice road construction and/or barge service. As noted previously, GLR has optioned a tug and barge fleet to facilitate the transportation requirements of the construction phase.

There are numerous intermodal transportation companies offering service to these terminal points. Additionally, companies such as Robinson Enterprises, Ltd, of Yellowknife and Northern Transportation Company, Ltd., with head offices in the North West Territories offer both freight and winter and ice road construction services. The selection of freight carriers and routes will be dependent on negotiations with the provincial governments and the transportation firms.

25.2.2 Ocean Ports of Entry

The port of Vancouver, British Columbia is the nearest tide water port of entry, on the Pacific Coast. Fort Mackay on the Athabasca River, Stony Rapids on the Fond du Lac River and Fitzgerald RQWKH6ODYH5LYHUZRXOGEHWKHGHSDUWXUHSRLQWVIRUEDUJHVVHUYLFLQJWKH*ROGILHOG¶V3URMHFW%DUJH landings could be at the Uranium City facility or at a refurbished barge landing site on Neiman Bay.

25.2.3 Freight and Shipping Costs

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 241 Freight and shipping costs have been estimated based on approximate tonnages and an average cost of the various options available, i.e., trucking, rail and barge and combinations thereof. The final decision will be dependent on the construction schedule, the source of the equipment and the various freight options at that time of construction.

An international airport is available in Saskatoon, Saskatchewan and this facility would provide air freight requirements via La Ronge, Stony Rapids and Fond du Lac to Uranium City. As the aircraft servicing the route north from Saskatoon are similar in size to Cessna Caravans, freight capacity is limited. However, the airstrip at Uranium City is capable of handling C130 aircraft, on a charter basis. The cost of air freight is high and use of this service will be restricted to emergency operational requirements.

25.2.4 Heavy Equipment Availability

There are several heavy equipment contractors in Uranium City and Stony Rapids offering crushing equipment, excavators, tractors, loaders and conventional dump trucks; however, the selection, style and availability of equipment available is limited. The heavy equipment dealers are located in Saskatoon and Regina. Dependent on negotiations, these dealers will carry the required spare parts and provide maintenance contracts to support any new equipment purchased through them.

25.2.5 Steel Fabrication

Steel fabricators and machine shops are available in Saskatoon and would be capable of fabricating conveyors, chutes and related equipment. The Capital cost estimates have anticipated that the suppliers of the stationary equipment will provide the major portion of the structural steel requirements; the remaining elements have been estimated at US$ 2,500/tonne include the cost and provide

25.2.6 Concrete

Concrete estimates have been developed form preliminary infrastructure designs with generous allowances for overpour and wastage but without the benefit of a geotechnical study which may reveal a more complex foundation requirement. The cost of concrete has been established at US $ 1,300/m3This price would include all reinforcing (imbedded) steel and required form work.

25.2.7 Mechanical Installation

A skilled workforce is available in Saskatchewan and to a lesser extent in the northern communities VXUURXQGLQJ WKH *ROGILHOG¶V 3URMHFW 7KH &DSLWDO EXGJHW DQWLFLSDWHV FRQWUDFWLQJ WKH UHTXLUHG licensed Industrial Mechanics in southern Saskatchewan and providing housing in Uranium City during the construction phase of the project.

25.2.8 Electrical Installation and Instrumentation

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 242 The electrical load estimate is based on the loads shown on the flowsheets and the costs of the electrical equipment are based on supplier quotes. The equipment purchases will specify the compatibility and/or manufacturer requirements for both the electrical and instrumentation components.

25.2.9 Electrical Feed Sub Stations, Power Line Upgrades and Distribution

Negotiations continue with SaskPower to define responsibilities. The costs included are based on GLR being wholly responsible for these costs.

25.2.10 General Supplies

Mining is enjoying a resurgence in Canada and general operating supplies and consumables will be available; however, Canadian suppliers will be required to compete with offshore suppliers. However, there are no local, i.e., Uranium City based suppliers.

25.2.11 Exchange Rates

All estimates are quoted in second quarter 2007 United States dollars

25.3 CAPITAL COST EXCLUSIONS

The Capital Cost estimates exclude: x Duties and tariffs x Interest during construction x Construction Schedule

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 243 25.4 CAPITAL COST ESTIMATE

GLR's Goldfields Box Mine Project Capital Costs Summary

Mining and Mine Support Equipment 11,102,000

Crushing & Conveying 5,037,748

Process Plant & Refinery 10,848,446

Electrical Generation and Distribution 1,805,000

Tailings Facility 1,840,400

Buildings and Support Systems 2,300,000

E. P. C. M. 2,008,000

Installation, Electrical and Piping 7,339,511

Contingency 4,015,858

TOTAL 46,296,963

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 244 GLR's Goldfields Box Mine Project; Mining and Mine Support Equipment

Description # Unit Cost Cost

Mine Equipment Hydraulic Shovel Hitachi 1200-5 2 1,250,000 2,500,000 Tractor Dozer CAT D8R 2 325,000 650,000 Off-Road Haulage Truck CAT 777 D 6 750,000 4,500,000 CUBEX QXR 1320 2 550,000 1,100,000 Motorgrader CAT 14 H 1 275,000 275,000 Light Plants 4 16,000 64,000 Ancillary Equipment Ambulance 1 22,000 22,000 Radios & Communication Equip. Lot 20,000 20,000 Containers (6 40 ft) 20 15,000 300,000 Shop Tools Lot 50,000 50,000 Mechanics Truck 1 60,000 60,000 Water Truck (2000 gal) 1 35,000 35,000 Tire Truck 1 50,000 50,000 Lowboy No. 1 1 32,000 32,000 Fuel & Lube Truck 1 45,000 45,000 Pickup Trucks 5 35,000 175,000 Employee Transport Bus 1 50,000 50,000 Survey Station 1 20,000 20,000 Light Plants 4 16,000 64,000 Backhoe CAT 416D 1 65,000 65,000 Crane 65T All-Terrain 1 275,000 275,000 Freight & Logistics Hyster Forklift Truck (80,000lb) 2 125,000 250,000 Barge Tug 1 350,000 350,000 400 Series Barges 3 50,000 150,000

TOTAL 11,102,000

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 245 Equipment Nominal Design Vendors New Equipment Number Qty Description Unit Price Capacity Size Assigned Quote Primary Crushing Plant Loading Grizzly c/w modular supports for 100-GR-1,2 2 Jaw and Feeder $ 400,000 Minus 600 mm 1.5m x 9.1m Telsmith $ 800,000 Jaw Crusher c/w V-belt drive and offset Plates & modular supports.( Yantai 400 metric 100-CR-1,2 2 Supply ) $ 329,000 tons/hr 1.2m x 1.5m Yantai $ 658,000 5m x 4m x 100-DH-1,2 2 Dump Hopper $ 292,411 100 metric tons 3m Savona $ 584,822 Operator House c/w support tower for 100-OH-1,2 1 primary stations $ 210,613 Telsmith $ 210,613 Rock Breaker c/w 25' boom, breaker & 100-RB-1 1 hydraulic power pack $ 273,443 3000 ft-lb 7600mm Telsmith $ 273,443 400 metric 1.83m x 100-BC-1,2 2 Grizzly Discharge Conveyor $ 65,000 tons/hr 7.31m Ward $ 130,000 100-MG-1 2 Belt magnet $ 5,000 24 Eriez Savona $ 10,000 1800 metric 100-BC-4 1 Secondary Discharge Conveyor $ 25,714 tons/hr 1.83m x 11m Yantai $ 25,714 Coarse Ore Pile Feed Conveyor 1280 metric 100-BC-5 1 (Stacker) $ 230,000 tons/hr 1.83m x 76m THOR $ 230,000 Secondary Crushing Plant 400 metric 100-BC-6,7 2 Coarse Ore Discharge Feed $ 179,000 tons/hr 1.83m x 11m Yantai $ 358,000 Primary Vibrating Screen c/w chutes & 400 metric 100-VS-1 1 modular support $ 62,858 tons/hr 2.4 m x 6 m Yantai $ 62,858

Primary Cone Crusher c/whydraulic & oil 250 metric 100-CR-3 1 system;modular supports and chutes $ 279,000 tons/hr 1.9m Yantai $ 279,000 100-SC-1,2 2 Belt scale Secondary Vibrating Screen c/w chutes & 200 metric 100-VS-2 1 modular support $ 62,858 tons/hr 2.4 m x 6 m Yantai $ 62,858

Secondary Cone Crusher c/whydraulic & 250 metric 100-CR-4 1 oil system;modular supports and chutes $ 279,000 tons/hr 1.9m Yantai $ 279,000 60000 metric 100-SB-1 1 Fine ore storage building $ 600,000 tons N/A $ 600,000

Conveyors $ 473,440 640 metric 100-BC-3 1 Jaw Crusher Discharge Conveyor $ 210,000 tons/hr 1.83m x 24m Yantai incl. 400 metric 1.22m x 100-BC-8 1 Discharge Belt Feed Conveyor $ 60,000 tons/hr 7.3m Yantai incl.

400 metric 1.22m x 73m 100-BC-9 1 Underground Tube Conveyor $ 300,000 tons/hr x 6.3m Lift Yantai incl.

400 metric 1.22m x 40m 100-BC-10 1 Screen Feed Conveyor $ 180,000 tons/hr x 10m Lift Yantai incl. 1.22m x Primary Vibrating Screen Discharge 400 metric 18.3m x 4.65 100-BC-11 1 Conveyor $ 91,000 tons/hr Lift Yantai incl.

PrimaryCone Crusher Discharge 250 metric .914m x 28m 100-BC-12 1 Conveyor tons/hr x 7.2m Lift Yantai incl.

Primary Vibrating Sreen Feedback 400 metric .914m x 15m 100-BC-13 1 Conveyor tons/hr x 3m Lift Yantai incl.

400 metric .914m x 15m 100-BC-14 1 Secondary Cone Feed Conveyor tons/hr x 3m Lift Yantai incl.

400 metric 0.914 m x 50 100-BC-15 1 Fine ore storage feed conveyor $ 270,000 tons/hr m x 24 m lift Yantai incl. 0.914 m x 24 m x 0 lift w/ 4 m load 100-BC-16 1 Fine ore discharge feeder $ 102,000 50 metric tons/hr section Yantai incl. 208 metric .914m x 15m 200 BC-1 1 Ball Mill Feed Conveyor $ 55,000 tons/hr WI=12 x 0 m Yantai incl.

TOTAL CRUSHING AND CONVEYING CAPITAL $ 5,037,748

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 246 Equipment Nominal Design Vendors New Equipment Number Qty Description Unit Price Capacity Size Assigned Quote Grinding Plant 208 metric 200-BM-1 1 Ball Mill $ 954,000 tons/hr 4m x 4m Yantai $ 954,000 208 metric 200-RF-1,2 1 Riffle $ 50,000 tons/hr TBD Est $ 50,000 208 metric 200-VS-1 1 Vibrating Screen $ 679,171 tons/hr TBD Gekko $ 679,171 200-T-1 1 Mill Discharge Sump 5 m3 Gekko incl 200-P-1,2 2 Ball Mill Discharge Slurry Pumps Gekko incl

200-BC-2 1 Primary Screen Oversize Conveyor No.1 5m long Gekko incl

200-BC-3 1 Primary Screen Oversize Conveyor No.2 12m long Gekko incl

200-BC-4 1 Primary Screen Oversize Conveyor No.3 5m long Gekko incl 250 mm NB 1 Tech Taylor Valve Pipe Gekko incl 250 mm NB 200-MFM-1 1 Mag Flow Meter - Cyclone Feed Pipe Gekko incl 250 mm NB 200-DM-1 1 Density Meter - Cyclone Feed Pipe Gekko incl Gravity Plant 300-DIST-1 1 Cyclone Distributor Gekko $ 3,612,310 300-CY-1 thru 6 1 Cyclopak Gekko incl 300-DIST-2 1 Inline Pressure Jig Distributor Gekko incl 300-IPJ- 1thru6 6 Inline Pressure Jig- Rougher Gekko incl 300-IPJ-7,8 2 Inline Pressure Jig- Cleaner Gekko incl 300-T-1 1 Cleaner Feed Sump Gekko incl 300-P-1 1 Cleaner Feed Pump Gekko incl 300-T-2 1 Regrind Mill Sump Gekko incl 300-P-2 1 Regrind Mill Pump Gekko incl 300-T-3 1 Tailings Sump Gekko incl 300-P-3 1 Tailings Pump Gekko incl 300-AG-1 1 Flotation Conditioner 9'x 10' Yantai $ 13,572 300-FC- 1thru6 6 Flotation Cells - Rougher $ 18,810 Yantai $ 112,860 300-FC- 7thru12 6 Flotation Cells - Cleaner $ 15,867 Yantai $ 95,202 300-AC-1 1 Air Compressor $ 9,000 OrePro $ 9,000 300-T-4 1 Ball Bucket $ 9,000 est $ 9,000 Leaching Plant

400-THK-1,2 2 Concentrate Thickener $ 42,858 12 m dia Yantai $ 85,716 400-P-1,8 2 Thickener Underflow Pump $ 2,572 Yantai $ 5,144 400-BM-1 1 Regrind Ball Mill $ 91,419 Yantai $ 91,419 400-T-1 1 Regrind Mill Sump $ 5,000 Yantai $ 5,000 400-P-2 1 Regrind Ball Pump $ 5,429 Yantai $ 5,429 400-CY-1,2 2 Regrind Cyclone $ 670 O'drill $ 1,340 400-MFM-1 1 Mag Flow Meter - Cyclone Feed $ 5,000 est $ 5,000 400-DM-1 1 Density Meter - Cyclone Feed $ 5,000 est $ 5,000 Agitated Leach Tanks c/w motors, drives, 400-AG- agitators, structural supports, feed and 21 MTPH 45% NWP+Mix 1thru4 4 outlets $ 74,000 solids 8m dia Pro $ 296,000 400-P- 3thru6 4 Agitated Leach Tank Pumps $ 7,500 Lyntek $ 30,000

400-AG-5 1 Cyanide Destruction Tank $ 45,715 5m dia x 6m Yantai $ 45,715 400-SS-1 1 Safety Screen - Pre Cyanide Tank $ 51,430 Yantai $ 51,430 400-P-7 1 Cyanide Discharge Pump $ 5,000 Yantai $ 5,000 400-SS-2 1 Safety Screen - Pre-Acid Wash $ 51,430 Yantai $ 51,430 400-T-2 1 Acid Wash Tank $ 11,143 Yantai $ 11,143 400-ESC-1 1 Elution Strip Column $ 25,715 Yantai $ 25,715 400-T-3 1 Pregnant Solution Tank $ 12,715 Yantai $ 12,715 400-EW-1 1 Electrowinning Cell $ 121,431 Yantai $ 121,431 400-T-4 1 Barren Solution Tank $ 22,858 Yantai $ 22,858 400-SS-3 1 Safety Screen - Carbon Regeneration $ 12,143 Yantai $ 12,143 400-CR-1 1 Carbon Regenerator $ 111,430 Yantai $ 111,430 400-P-9 1 Electrowinning Pump $ 5,000 Yantai $ 5,000 400-FL-1 1 Plate and Frame Filter Press $ 51,430 Yantai $ 51,430 400-P-10 1 Plate and Frame Filter Press Pump $ 5,000 Yantai $ 5,000 400-T-5,6 2 Storage Tanks $ 14,650 4m dia x 5m NWP $ 29,300 400-P-11 1 Reclaim Water Circulating Pump $ 20,000 Lyntek $ 20,000 400-DRY-1 1 Dryer $ 5,000 Lyntek $ 5,000 400-FCE-1 1 Dore Furnace $ 21,429 Lyntek $ 21,429 400-P-12 1 Floor Sump Pump $ 5,000 Yantai $ 5,000

Waste Disposal Plant 500-BC-3 1 Belt Filter c/w 1 belt drive $ 207,147 10' x 55' Yantai $ 207,147 500-P- 1thru4 4 Filtrate Pumps $ 5,000 est $ 20,000 500-P-5 1 Vaccum Pump $ 5,000 8' x 20' est $ 5,000 500-BC-2 1 Cross Belt $ 14,000 Yantai $ 14,000 500-BC-1 1 Truck Feed Conveyor $ 15,714 Yantai $ 15,714 500-T-1 1 Bin $ 68,573 100 ton Yantai $ 68,573 Tailings Plant 600-DT-1 1 Decant Tower by Owner $ 15,000 600-PH-1 1 Pump House by Owner $ 15,000 600-P-1 1 Pump $ 5,000 by Owner $ 5,000 Allowance for tailings discharge by Owner $ 10,000 600-EV-1 1 Evaporator.( Turbo Mist ) $ 200,000 by Owner $ 200,000

Support Steel & Buildings Structural steel platforms and floor lot supports for above equipment Yantai $ 94,680

lot Crushing Plant Steel Structures Yantai $ 1,000,000 Site - Plant Buildings c/w H& V.Site 700-500 Work. $ 2,000,000 S & I Equipment Foundations. $ 500,000

PROCESS PLANT CAPITAL $ 10,848,446 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 247 GLR's Goldfields Box Mine Project; Electrical Distribution (Primary & Secondary)

Description # Unit CostCost Line SaskPower to Box Mine Project Substation Stepdown (115kV - 72kV); Equipment & Infrastructure 1 500,000 500,000 Refurbishment Feed Line to Box 1 500,000 500,000 Substation Stepdown (4160VAC, 600VAC &120VAC); Equip. & Infras. 1 350,000 350,000 Capacitors-Power Factor correction 1 100,000 100,000 PSTN Communication Line to SaskPower 1 15,000 15,000 Lightening Protection 1 10,000 10,000 Emergency Power Generation Automatic Transfer Switches 1 20,000 20,000 Diesel Generator (750kVA) 2 125,000 250,000 Day tank for fuel,500 gallon 1 10,000 10,000 Electrical Power Distribution - Site 1 50,000 50,000

TOTAL 1,805,000

GLR's Goldfields Box Mine Project; Tailings Facility

Description # Cost Earth Works (m3) (Dam and Surface Water Diversion Dykes 3,500 Tailings Gravity Tailings Belt Filter (22m2) 1 Vacuum Pump (200 HP) 1 Filtrate Pump to Gravity Process Water Recycle Tank (15HP) 1 Filter Cake Surge Storage Bin (200 tonne) 1 Conveyor (Cross Feeder (914mm x 5m x 2HP) 1 Conveyor (Bin Feeder (914mm x 15m x 20HP) 1 Piping & Valving Lot PLC Instrumentation & Controls Lot Structural Steel Supports, Platforms and Walkways Lot Cyanide Leach Tailings (500 tonnes solids+600 tonnes solution/day) Thickener High Rate (15m x 10HP) Carbon Safety Screen 1 Solution Pump Thickener Overflow - ????? 1 Cyanide Destruction Circuit

Na2SO3 Agitated Mix Tank 1

Cu2SO Agitated Mix Tank 1 Reactor Agitated Tank 1 Warman 1.5 x 2 x 5HP SLR Pumps; To Tailings 2 Piping & Valving Lot PLC Instrumentation & Controls Lot Structural Steel Supports, Platforms and Walkways Lot Pumphouse 1 Culvert Section (2440mm dia x 5m L) 1 Reclaim Water Pump-Cyanide Process 2 Electrical MMC Panels Lot Tailings Yellowmine/HDPE Pipe & Fittings-Reclaim Process Water Yellowmine/HDPE Pipe & Fittings-Tailings

TOTAL 1,840,400

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 248 BUILDINGS,SUPPORT SYSTEMS GLR's Goldfields Box Mine Project; Buildings, Infrastructure, Site Roads, Support Systems Facility

Description # Unit CostCost Uranium City Bunkhouse (35 Rm) 1 75,000 75,000 Family Dwellings (Trailers) 20 40,000 800,000 Lot Purchase 20 10,000 200,000 Services (Light, Sewer, etc.) Lot 100,000 100,000 Office 1 35,000 35,000 Office Equipment Lot 50,000 50,000 Mine Site Access Roads (km) 10 20,000 200,000 Fresh Water Pump House (2.8m x 2.5m) 1 10,000 10,000 Process Plant (89.75m x 30.35m) 1 0 Maintenance Shop (30.25m x 30.50m) 1 150,000 150,000 Bridge Crane 1 50,000 50,000 Equipment Wash Bay 1 25,000 25,000 Explosives Compound AN Prill Storage (41.78m x 30m) 1 45,000 45,000 ANFO Mix House (32m x 16m) 1 75,000 75,000 Gangue Disposal Filter & Truck Facility (30.41m x 10.41m) 1 35,000 35,000 Guardhouse 1 15,000 15,000 Warehouse 1 50,000 50,000 Laboratory 1 50,000 50,000 Equipment & Tooling Maintenance Shop Lot 100,000 100,000 Process Facility Lot 30,000 30,000 Laboratory Lot 125,000 125,000 Warehouse Lot 30,000 30,000 Fencing Lot 50,000 50,000

TOTAL 2,300,000

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 249 ENGINEERING, PROCUREMENT, CONSTRUCTION MANAGEMENT, START-UP Description Cost

Consultants Contract Management Security Services Housing Food & Other Office Supplies and Wages Construction Office Telephone and Fax Travel + Air/Accom./Veh. Rent/M&E Public Relations Vehicle Expenses Design Engineering Phase 1 Panama Office Support Topographic Support & Equip. Small Tools & Equip.

TOTAL 2,008,000

Equipment New Equipment Number Qty Description Unit Price Quote 700-100 Field Installation of Equipment $ 13,386,194 x 20% $ 2,677,239

700-200 Field Installation of Conveyors 1800l/f 6 hours per lf 60.00 per hr. $ 648,000 Large & Small Bore Piping. $ 13,386,194 x 12% $ 1,606,343 700-300 Electrical/Instrumentation/controls. $ 13,386,194 x 15% $ 2,007,929 700-400 Freight.( allowance ) $ 400,000 TOTAL Installation, Electrical and Piping Capital Cost $ 7,339,511

Project Contingency 900-100 Contingency $ 13,386,194 x 30% $ 4,015,858

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 250 26.0 ECONOMIC ANALYSIS

This section provides an economic analysis of the Box Mine project, incorporating data developed elsewhere in this feasibility. For purposes of this analysis, a Base Case cash flow model was prepared against which the effects of changes in the key input variables have been evaluated.

All monetary values are expressed in U.S. dollars. 26.1 REVENUE PARAMETERS

26.1.1 Metal Prices and Sales Requirements

The gold price is taken at $US 525 per troy ounce. No silver credit has been used. The recent spot gold price at the time of the writing of this document is $650.

26.1.2 Production Schedule and Ore Grades

A detailed analysis of the production schedule and mined gold grade is provided in Section 6.0, and is summarized in Table 26-1.

Table 26-1

Production Schedule

Year Ore Mined Ore Grade Waste Mined Strip Ratio Total Mined

(tonnes) (g/t Au) (tonnes) (tonnes) 1 1,800,000 1.713 8,400,000 4.67 10,200,000 2 1,800,000 1.612 8,463,000 4.70 10,263,000 3 1,800,000 1.597 6,742,000 3.75 8,542,000 4 1,800,000 1.577 6,130,000 3.41 7,930,000 5 1,800,000 1.805 3,568,000 1.98 5,368,000 6 1,800,000 1.867 1,453,000 0.81 3,253,000 7 197,000 1.956 49,000 0.25 246,000 TOTAL 10,997,000 34,805,000 3.16 45,802,000

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 251 26.1.3 Metal Recoveries

Metal recoveries are projected at 93% for gold.

26.2 INVESTMENT PARAMETERS

26.2.1 Initial Capital Cost

This report provides details of the initial capital cost required to commence production. Table 26-2 summarizes these costs inclusive of freight.

Table 26-2

Initial Capital Cost Summary ($US)

GLR's Goldfields Box Mine Project Capital Costs Summary

Mining and Mine Support Equipment 11,102,000

Crushing & Conveying 5,037,748

Process Plant & Refinery 10,848,446

Electrical Generation and Distribution 1,805,000

Tailings Facility 1,840,400

Buildings and Support Systems 2,300,000

E. P. C. M. 2,008,000

Installation, Electrical and Piping 7,339,511

Contingency 4,015,858

TOTAL 46,296,963

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 252 26.2.2 Working Capital Requirements

Working capital is estimated at $3,000,000, to be repaid at the end of mine life.

26.2.3 Salvage Value and Closure Costs

The financial projection assumes a negligable salvage value of the mining, process and service equipment of $100,000.

Mine closure costs have been estimated to total US$5,000,000. 26.3 OPERATING COSTS

26.3.1 Marketing Cost

Doré will be shipped from the mine site to be further processed into a saleable form. The cost of transport to the refiner is estimated at $2,500. per shipment, one shipment per week. Smelter deduction of 0.15% is assumed. Refining costs are projected to be $0.72 per ounce of gold sold. These costs are included in the refining and treatment section of the cost analysis.

26.3.2 Royalties and Concession Fees

A 2% net smelter royalty is to be paid to Franco Nevada. A separate line in the income statements is devoted to this expense.

26.3.3 Production Costs

Operating cost per tonne of ore is presented in Table 26-3.

Table 26-3 Operating Cost

Production Level General Admin Mining Ore Mining Waste Crushing Processing Environmental (T/Year) ($/T) ($/T ore) ($/T waste) ($/T) ($/T) ($/T) 1,800,000 1.86 2.12 1.30 1.31 4.63 0.21

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 253 26.4 TAX PARAMETERS

In general terms, federal taxable income for a mining company is defined as mining revenue less the following deductions:

x operating costs x capital cost allowance (CCA) x cumulative Canadian exploration expense (CEE) x cumulative Canadian development expense (CCDE) x interest expense x other allowable corporate expense

Provincial mining taxes and provincial royalties are not deductible in calculating federal taxable income.

Operating costs include the costs of mining, processing (to include smelting and refining), transportation, non-government royalties, general and administrative, selling, and ongoing overburden removal.

Capital Cost Allowance (CCA) based on a system of classes, pools of assets established for various types of depreciable property. Each class has an assigned depreciation rate appropriate for the class. Any portion of the allowable deduction may be taken in a given year.

Canadian Exploration Expense (CEE) are the expenses incurred for exploration in Canada, and expenses incurred prior to the start of production to bring a new mine in Canada into production, including clearing, overburden removal, shaft sinking, etc. The full amount of the CEE may be deducted in the year incurred to the extent of income from any source for the corporation. Any balance not currently deductible may be carried forward indefinitely in a pool called the Cumulative Canadian Exploration Expense (CCEE) pool. Alternatively, exploration H[SHQVHVPD\EHWUDQVIHUUHGWKURXJK³IORZ-through-VKDUHV´

Cumulative Canadian Development Expense (CCDE) are development expenses made on Canadian properties after commencement of production. They include acquisition costs, underground access and haulage development. Up to 30% of the unclaimed balance in the CCDE pool may be deducted each year. The unclaimed balance may be carried forward indefinitely and if an operating loss results it may be carried forward or back as defined by regulations for income.

In Saskatchewan, the allowable deduction for mining and processing asset depreciation is the lesser of 100% or income from the mine. The exploration expense deductibility rate is also 100%. Losses can be applied to reduce future mining tax liabilities. Saskatchewan mining tax for gold producers is calculated as a 5% net profit royalty on the first million troy ounces of gold produced. The

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 254 mining tax is applicable after 150% of the cost of the mine investment has been recovered. After that, mining tax is imposed at 15% of net profit, as defined in the regulations.

BETA notes that as December 31, 2007, there was a C$ 6,714,065 deferred exploration deduction available on the books for GLR. This has been applied to the tax carry forward at 100% deductibility rate.

Reclamation Expenditures are deductible in the year they are incurred. Any monies set aside for future reclamation work are not deductible unless placed in a reclamation trust.

Capital losses may be carried back three years and forward indefinitely. Non-capital losses may be carried back three years and forward twenty years.

BETA notes that the tax assessment of this study has been performed to a pre-feasibility level. Tax implications have been presented to WKHEHVWRI%(7$¶VNQRZOHGJHDQGXQGHUVWDQGLQJ 26.4.1 Depreciation

The method of depreciation for assets, where applicable, is the straight line method over the life of the project.

26.4.2 Corporate Taxes

The federal income tax rate applicable to the Box Mine project is 19.5%, effective January 2008. The Saskatchewan statutory income tax rate is 12.0% effective July 1, 2008. The combined effective income tax rate, as shown in the cashflow models, is 31.5%. 26.5 FINANCING PARAMETERS

For the base case cash flow analysis, the initial capital for the project is assumed to be equity. Debt financings will further enhance the project net present values. 26.6 BASE CASE FINANCIAL RESULTS

Tables 15-4 through 15-10 provide the schedules of Production, Income Statement, Balance Sheet DQG&DVK)ORZIRUWKH%R[0LQHSURMHFW¶V\HDUOLIH7KH%DVH&DVHDVVXPHVDXQLIRUPJROGSULFH of $525 per ounce over the life of the project.

In summary, the Base Case model results in total net cash flow of $US 53.3 million over the life of the project, an internal rate of return (IRR) of 27.4%, an after tax net present value of $27.5 million at a discount rate of 8%.

This section provides an economic analysis of the Box Mine project, incorporating data developed elsewhere in this feasibility. For purposes of this analysis, a Base Case cash flow model was prepared against which the effects of changes in the key input variables have been evaluated.

All monetary values are expressed in U.S. dollars.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 255

IRR SENSITIVITY ROSETTE

50% 45% 40% 35% Revenue 30%

IRR 25% Capital Cost 20% 15% Operating Cost 10% 5% 0% -15% 0% 15% PERCENT CHANGE

NPV SENSITIVITY ROSETTE

60 50 Revenue 40 Capital Cost 30 Operating Cost 20 NPV @8%

(US$ millions) 10 0 -15% 0% 15% PERCENT CHANGE

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 257

27.0 OTHER RELEVANT DATA AND INFORMATION DESIGN SPECIFICATIONS

Run of Mine (ROM) Ore Characteristics Maximum Lump Size meters 0.600 ROM Bulk Density tonnes/m³ 1.6 Moisture Content % (average/maximum) 1.5/3.0 Ore head grade grams/tonne gold 1.70 Abrasiveness High

Crushing Plant Annual Throughput tonnes 1,800,000 Annual Operating Time days 335 Mechanical Availability % 90 Daily Operating Time hours 24 Hourly Throughput tonnes/hour 208 Final Product Size mm 9.5

Primary Crusher Primary Crusher type Jaw Quantity # 2 Crusher Size mm 1200x1800 Crushing Rate tonnes/hour 450 Installed Power kilowatts 150 Crusher Product Size mm 80% -150

Coarse Ore Stockpile & Reclaim Radial Stacker (length) meters 60 Stacked Tonnes tonnes 120,000 Live Storage tonnes 22,000 Angle of Repose degrees 45 Drawdown Angle degrees 40

Secondary Crusher Feeder Rate tonnes/hour 400 Crusher Type (Standard) Cone Crusher Size mm 2000 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 264 Crushing Rate tonnes/hour 400 Installed Power kilowatts 212 Crusher Closed Setting Size mm 19.05 Crusher Product Size mm 80% -18.5

Tertiary Crusher Feeder Rate tonnes/hour 400 Crusher Type Standard Cone Crusher Size mm 2000 Crushing Rate tonnes/hour 400 Installed Power kilowatts 212 Crusher Closed Setting Size mm 9.53 Crusher Product Size mm 80% -9.5

Fine Ore Storage Stacked Tonnes tonnes 35,000 Live Storage tonnes 10,000 Angle of Repose degrees 37 Drawdown Angle degrees 40

Conveying Bulk Density tonnes/m3 1.45 Surcharge Angle degrees 20 Slopes-Coarse Ore degrees 15 Slopes-Fine Ore degrees 18

Primary Grinding Product Size micron 80% -350 Grinding Index kwh/t 16 Circulating Load % 250

Gravity Processing Ore Specific Gravity t/m3 2.7 Feed Solids Size Fraction micron 80% - 500 % Solids by Weight % 50 ± 60

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 265 Overall Mass Pull % 2.74 (max. 10%)

Concentrate Grinding Product Size micron 80% -50 Feed Rate (New Ore) t/hr 21 Grinding Index kwh/t 16 Circulating Load % 250

Scavenger Flotation Feed Rate (Design) t/hr 200 Ore Specific Gravity t/m3 2.7 Pulp Density % Solids by Weight 47 Conditioner Retention Time minutes 3 Scavenger Retention minutes 20 Cleaner Retention minutes 20

Concentrate Leaching Feed Rate (Design) t/hr 8 nominal (20 max.) Leach Pulp Density % Solids by Weight 45 Maximum Retention hours 48

Cyanide Destruction Feed Rate (Design) t/hr 8 nominal (20 max.) Leach Pulp Density % Solids by Weight 45 Maximum Retention hours 3

Flotation Waste Disposal to Waste Dump Belt Filter Feed Rate t/hr 205 Feed Pulp Density % Solids by Weight 47 Feed Solids Size Fraction micron 80% - 350 Discharge Filter Cake Density % Solids by Weight 90

Leach Tailings Disposal to Tailings Management Facility Thickener Feed Rate t/hr 8 nominal (20 max.) Feed Pulp Density % Solids by Weight 39

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 266 Discharge Density % Solids by Weight 70 Process Consumables

CaO 2.5 kg/ton conc. NaCN 0.5 kg/t conc. NaOH 0.001 kg/t Carbon 0.03 kg/t Na2S2O5 1.20 kg/t conc. Cu2SO4 0.02 kg/t conc. Flocculant 0.15 kg/t Zanthate 0.05 kg/t MIBC 0.01 kg/t R208 0.018 kg/t Mill Liners 0.20 kg/t Balls 1.22 kg/t Crusher Liners 0.50g/t

Mechanical Conveyors

Maximum speed 200 m/min Loading Coarse Ore 75% Fine Ore 85% Surcharge 20 degrees Troughing 35 degrees

Drives 25 HP or less Shaft-mounted with overhead motors and v-belt drives Service Factor Class II 25 HP or more Foot-mounted with Direct-coupled motors Service Factor 1.35 Coupling Service Factor 1.5

Take-ups 30 m or shorter, Screw (Acme or Square thread) >30 m gravity take-ups

Bearings Spherical Roller with Taconite Seals

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 267 Slurry Pumps

Service Factor 1.1 Gland Seals Rubber Lined Maximum tip speed 1200 m/min. V-belt drives

Water Pumps

Service Factor 1.1 Direct Coupled

Cyanide Solution and Slurry Pumps

Service Factor 1.1 Direct Coupled No bronze bushings or seals

Vertical Sump Pumps

Open throat 100 mm minimum size

Electrical

Motors 1. (All motors TEFC) S.F. 1.15 2. All Motors shall be of energy efficient design. 3. All motors shall have life seal lubricant ball bearings. 4. Section 5.3 provides motors for pumps and other devices. These motors shall also conform to section 5.4 5. All motorized equipment shall be designated with identification tags as per the appropriate drawing. 6. Documentation shall include Motor Nameplate Data, Catalogue cut and specification sheets.

Motor Starters 1. Motor Starters hall be NEMA rated. 2. All three phase motor starters must be equipped with protective devices that will disconnect the motor completely from the supply in the event of an over-current or sustained overload condition and prevent single phasing.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 268 3. Solid State Motor Starters shall have proper temperature, overcurrent and overvoltage protection included in the design. Starter shall be shipped with proper fuses installed. Overvoltage protection shall be voltage breakover clamping inherent in the starter design. 4. Documentation shall include manufacturer's catalogue data, shop drawings, manufacturer's replacement parts list, operation and maintenance data.

Motor Control Centers

1. Motor Control Centers shall be complete with Nameplates. 2. 'RFXPHQWDWLRQ VKDOO LQFOXGH PDQXIDFWXUHU¶V FDWDORJXH GDWD VKRS GUDZLQJV VKRZLQJ dimensions, equipment parts and catalogue numbers, complete manufacturer's wiring diagrams, engineering consultant's single line diagrams provided by the designer showing the interconnection with all control elements. 3. All Bus material shall be copper and rated for maximum ampacity of a fully loaded system.. 4. The rated interrupt current shall be based on the available fault current of the distribution system. 5. Feeder cables shall be specified as overhead or underground as appropriate. 6. Enclosure shall be NEMA 1, 12 for indoor use only. 7. Ground Fault detection shall be included for any equipment subject to ground faults. 8. The MCC shall be fully networked using either DeviceNet or Ethernet/IP

Control and Instrumentation

1. The control system shall utilize Rockwell Programmable Automation Controllers (PACs) which include the CompactLogix and ControlLogix platforms. 2. All controllers shall be network capable via Ethernet/IP. All processors shall be accessible via the plant floor Ethernet network. 3. DeviceNet or ASi shall be used as the secondary network. 4. Wherever practical, all devices shall reside on a network to reduce installation and maintenance costs. 5. A PC server gateway shall provide all data gathering and distribution services including but not limited to devices requiring OPC services. 6. The processes shall be monitored in the control room using Rockwell RSView SE and local touch screens shall utilize Rockwell RSView ME. 7. The operator interfaces will provide full and complete diagnostics of all available warnings and faults on a device. 8. The software used to program all control systems will be Rockwell RSLogix5000 Professional. 9. The control programs shall be written in a sequential and clear manner with full documentation of each data point and line of code. Code shall be separated into subroutines that reflect appropriate breaks in the system or discrete devices as appropriate. 10. Wiring and marking shall be as per the electrical diagrams and specifications. 11. Sensors and field mounted control enclosures shall meet the requirements of NEMA 14 or IP65 for environmental protections.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 269 Electrowinnning Number of Cells 3 Size of Cells m² 3.5 Number of Cathodes per Cell 7 Number of Rectifiers 3 Operating Hours per Day 20 Total Solution Flowrate m²/hour/cell 30 Solution Temperature °F 190 Operating Schedule hours/day 14-16

Carbon Reactivation Type of Kiln Horizontal Rotary Capacity of Kiln (carbon) kilograms/hour 125 Kiln Heat Source Propane Reactivation Temperature °F 1100

Gold Refining Type of Furnace Tilting Crucible Holding Capacity kilograms 25 Operating Temperature °F 2000 Furnace Heat Source Propane

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 270 28.0 INTERPRETATION AND CONCLUSIONS

Overall, the feasibility study report addresses all of the topics that need to be addressed for a full feasibility study.

BETA is of the opinion that the mineral resource and mineral reserve statements included in this report are accurate, well with normal limits required by a feasibility study. BETA did a detailed review of the resource block model and is satisfied with overall results.

BETA¶VUHYLHZKDVLGHQWLILHGWKHIROlowing as areas of risk that need to be considered for potential impact on financial results:

x Capital Costs ± The project capital cost is based upon purchase of major components of the crushing and process plant from China. A currency exchange risk exists.

x Metallurgy ± the recovery rate of 93% is assumed over all of the deposit uniformly. A variance in the recovery would have impact on financial results.

x Taxes ± taxes for this study have been calculated at a pre-feasibility level. Assumptions inherent in this study must be validated.

x Construction schedule ± this analysis assumes a 1-year construction period. If construction is prolonged, then economic results may be adversely affected.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 271 29.0 RECOMMENDATIONS

The Feasibility Study shows the Project economics are strong, providing gold prices remain above $400 per ounce; the fundamentals for sustained strong gold price are good. It is recommended that that the Feasibility Study be submitted for a final decision to construct.

BETA does not believe that significant additional drilling is required for the Box Mine deposit prior to development. Additional drilling would probably be done in the context of deep exploration drilling, i.e. drilling to increase the resource estimate and provide underground mining opportunities.

There are several areas where more work is recommended prior to the initiation of mining. These areas that BETA believes merit additional study are:

x GLR must confirm the status of the Assessment Work requirement of each Mineral claim and ensure compliance with such requirements.

x slope stability ± the current report is stated to be for prefeasibility level design.

x mine model coordinates ± it is advisable to translate the mine model from mine grid to UTM.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 272 30.0 REFERENCES

(This includes references within the papers cited directly.)

Appleyard, E.C. 1988: The Origin of the Frontier Granite, Goldfields Area, Saskatchewan: A Metasomatic Assessment; in Summary of Investigations, 1988; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 88-4.

Appleyard, E.G 1989. :Field Observations on the Frontier, Box and Athona Granites, Goldfields Area, Saskatchewan: A Metasomatic Assessment; in Summary of Investigations, 1988; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 89-4.

Appleyard, E.G. 1990: Petrogenetic Aspects of the Goldfields Granites, Saskatchewan; in Summary of Investigations 1990,Saskatchewan Geological Survey; Saskatchewan Ministry of Energy and Mines, Misc. Report 90-4.

Appleyard, E.G. 1990: Petrology and Lithogeochemistry of the Goldfields Granites and Their Host- rocks, Saskatchewan Ministry of Energy and Mines, Geology and Mines Division, 53p.

Ashton, K., Kraus, J., Morelli, R. 2000: Geology of the Elliot Bay Area: Sask. Geol. Surv. Summ. Invest. 2000; p3-25

Ashton, Ken, 2007: Personal communication. [[email protected]]

Beck, L.S.: 1959: Mineral Occurrences in the Precambrian of Northern Saskatchewan (Excluding Radioactive Minerals); Saskatchewan Department of Mineral Resources, Report No.36, 134p.

Beck, L.S. 1969: Uranium Deposits of the Athabasca Region, Saskatchewan; Saskatchewan Geological Survey, Report 126, 140p.

Beavan, A.P. 1936: The Geology and Gold Deposits of Goldfields, Lake Athabasca, Saskatchewan; Unpublished Ph.D. Thesis, Princeton University.

Bell, Keith, & Bikerman, Michael, 1985, Saskatchewan Shield geochronology project: Rb-Sr studies, 1985; in Summary of investigations 1985, Saskatchewan Geological Survey; Saskatchewan Energy & Mines, Miscellaneous Report 85-4, p. 59

Bikerman, M., Belt, K., Blenkinsop, J., 1990: Rb-Sr Geochronology of the Lodge Bay Granite, a ca. 3.0 Ga Basement in the Beaverlodge Area, Saskatchewan; in Summary of Investigations 1990, Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 90-4.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 273 Bowe, A.M.M. 1987: Report on the 1987 Exploration Program on the Lodge Bay 1987 Property, Report prepared for the Kasner Group of Companies. Bowe, A.M.M. and Petrie, J.: Report on the 1988 Exploration Program on the 1989 Lodge Bay Property GBS 4966, GBS 5664, GBS 5677, GBS 6059, S97233 to 97236 and S97948, Report prepared for the Kasner Group of Companies.

Bursnall, J.T., Hodgson, G.J., Hubert, R.W., Kerrich, R.W., Marquis, P., Murphy, J.B., Osmani, I., Poulsen, H., Robert, F., Sanborn-Barrie, M., Stott, G., and Williams, H.R.: 1989 Mineralization and Shear Zones, Geological Association of Ganada, Short Course Notes, Vol.6, 299p.

Carmicheal, S.J.: Assessment Report on the 1988 Exploration Program on Mining 1988 Claim GBS 8223, Beaverlodge Area, Saskatchewan, Report prepared for the Kasner Group of Companies.

Carmicheal, S.J. 1989: A Report on the Down Hole Radiometric Surveys at the Box Mine, Northern Saskatchewan, Report prepared for the Kasner Group of Companies.

Coombe, W. 1984: Gold In Saskatchewan. Prepared by Coombe Geoconsultants Ltd. for Saskatchewan Energy and Mines, Saskatchewan Geological Survey, Open File Report 84-1. 134p.

Costello, K.D., 1987: Assessment Report on CBS 5963, 1987 Exploration Activities, Saskatchewan, Report prepared for R.J.Kasner Company Ltd.

Costello, K.: 1998 Field Activities Martin Project, Uranium City Area Claims S102826, 1999 S102827, S102828, and CBS 7826, NTS 74 N 9 & 10, Athabasca Mining District, Saskatchewan, Private Internal Report for Greater Lenora Resources Corporation.

Hartlaub, R.P., Ashton, K.E., Card, C., Coolican, J., and Sibbald, T.I.I. , 1998, Geology of the Murmac Bay Group, Murmac Bay to Oldman River: Saskatchewan Geological Survey Summary Investigations, 1998.

Hartlaub, R., Ashton, K., Kraus, J., Morelli, R., 2000: Geology of the Goldfields Area: Saskatchewan Geological Survey, Summary Investigations, 2000.

Hendry, H.E., 1983: Sedimentological Study of the Martin Group; in Summary of Investigations, 1982; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 83-4.

Hulbert, L., 1988: Investigation of Maf ic and Ultramafic Rocks for Nickel-Copper

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 274 and Platinum Group Elements in Northern Saskatchewan: Preliminary Findings; in Summary of Investigations; Saskatchewan Geological Survey; Saskatchewan Energy and Hines, Misc. Report 88-4.

Issigonis, M., 1981: Uranium City Project. Winter 1981 exploration in Fredette, MacIntosh and Camsell Portage Areas. Diamond drilling and basal till sampling. Claim blocks 110 5, 5 489 , 54 90, 549 9, 5 638 , 57 04, 570 5, 5 879 , 58 80 and claims S-87947-50. Saskatchewan Mining Development Corporation (SMDC). Assessment Report 74N-09-291.

Issigonis, M., 1998: Report on the Uranium Potential of the Contact Lake Area, Uranium City Saskatchewan, 74N-09-NW, an independent consultant report dated 25 March, 1998, 6 pages.

Jensen, K.A. 1996; Geological Report of Exploration Activities and Exploration Potential of the Goldfields Project Northern Saskatchewan,. Private Internal Report for Greater Lenora Resources Corporation. An independent consultant report, 100 pages, appendix, maps.

Jensen, Kian A., 2003, TECHNICAL REPORT ON THE GOLDFIELDS PROPERTY FOR GLR RESOURCES INC. IN THE BEAVERLODGE LAKE AREA NTS MAP SHEETS 74N-06, 74N- 07, 74N-08, 74N-09 and 74N-10 NORTHERN MINING DISTRICT SASKATCHEWAN, CANADA , K .A . Jensen & Associates Ltd, Timmins, Ontario

Jiricka, D.E. 1983: SMDC Exploration 1983, Nicholson Bay Project Area (V27), North Saskatchewan Reconnaissance Project, Athabasca Mining Division, Saskatchewan, Mineral Lease 4760, 4761, 4762. Unpublished Report. 42p with 5 Maps.

Jiricka, D.E., 1983: Exploration 1983, Nicholson Bay Project Area (V27), Mineral Lease 4760 and 4762, Athabasca Mining Division, Saskatchewan, NTS 74N07; Saskatchewan Mining Development Corporation Assessment Report; Saskatchewan Energy Mines, Assessment File, 27p.

Jiricka, D.E., 1984: Diamond Drilling Program - 1984, Lodge Bay Project, CBS 5664 and CBS 5677, Athabasca Mining Division, Saskatchewan, NTS 74N07,08; Saskatchewan Mining Development Corporation Assessment Report; Saskatchewan Energy Mines, Assessment File.

Mason, I.M., 1987: Drilling Report - A Report on February 1987 Drilling on the Nicholson Bay Property, Beaverlodge Area, Saskatchewan for Mary Ellen Resources. Unpublished Report. 36p. Drill Logs

Mason, I.M., 1988.: Geology of the Box and Athona Properties, Beaverlodge Area, Saskatchewan, Report prepared for R.J.K. Mineral Corporation

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 275 Mason, I.M.: 1988: Nicholson Bay Project - 1988, Exploration Report Prepared for Kasner Group, Unpublished Report, Sip.

Nadeau, S., 1998.: Report on Dighem s 1997 Geophysical Survey and Recommendations for Follow-up Work on the Beaverlodge Area, Northern Saskatchewan. An independent consultant report, 25 pages, 1 appendix, 7 maps. Nadeau, S. and Zinn, R.: 1997 Compilation Report on the Beaverlodge Area, Northern Saskatchewan for Greater Lenora Resources Corporation , An independent consultant report, 147 pages, 5 appendix, 45 maps.

O'Hanley, D.S., Kyser, T.K., Sibbald , T.I.I., 1991: The Age of the Mine Granites,Goldfields Area; in Summary of Investigations, 1991; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 91-4.

0'Hanley, D.S., Kyser, T.K., Sibbald, T.I.I., 1994: The Age and Origin of the North Shore Plutons in the Rae Province, Goldfields Area, Saskatchewan; Can. J. Earth Science Vol. 31, Pg 1397-1406.

Peiris, E.P.W., Parslow, G.R., 1988: Geology and Geochemistry of the Uranium-Gold Mineralization in the Nicholson Bay-Fish Hook Bay Area; in Summary of Investigations, 1988; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 88-4.

Richardson, D.G. (editor), 1995: Investigations Completed by the Saskatchewan Geological Survey and the Geological Survey of Canada under the Geoscience Program of the Canada-Saskatchewan Partnership Agreement Mineral Development (1990-1995); Geological Survey of Canada Open File 3119, Saskatchewan Geological Survey Open File Report 95-3, 302p.

Roberts, R.G., 1990: Structural Controls of the Box and Athona Deposits, Goldfields Area, Saskatchewan, Saskatchewan Geological Survey, Open File Report 90-2, 17p.

Quirt, D.H. 1990: Metasomatic Host-rock Alteration at the Frontier Gold Prospect Goldfields Area, Saskatchewan; in Summary of Investigations 1990, Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 90-4.

Sibbald, T.I.I., Lewry, J.F., 1980: Uranium Metallogenic Studies: Lodge Bay Area Lake Athabasca; in Summary of Investigations; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 80-4.

Sibbald, T.I.I., 1982:Uranium Metallogenic Studies: Nicholson Bay Area; in Summary of

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 276 Investigations, 1982; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 82-4.

Sibbald, T.I.I., Schwann, P.L., Dunn, C.E., 1983: Uranium-Gold Metallogenic Studies: Nicholson Bay Ultramafic Complex; in Summary of Investigations, 1982; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 83-4.

Sibbald, T.I.I., 1988: Nicholson Bay Uranium-Gold-Platinum Group Element Deposit Studies; in Summary of Investigations, 1988; Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 88-4. Swanson, C.O., 1938: Notes on the Geology of the Box Mine, Goldfields, Saskatchewan Touborg, J.F., 1995: Box Mine, Beaverlodge Radar Study of Greater Lenora Resources Ltd. Private Internal Report.

Trueman, E.A., 1970: Consolidated Nicholson Mines Limited, Exploration - 1970 Nicholson Bay Property, Athabasca Mining Division, Saskatchewan, Unpublished Report by Geowest Services Ltd. 14p with 9 Drawings.

Williams, G., 1984: Report of Activities, Summer, 1982, Project 302. Report prepared for Eldor Resources Limited.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 277 31.0 CERTIFICATES

CERTIFICATE OF QUALIFIED PERSONS

I, Michael Bikerman, Ph.D., do hereby certify that:

1. I reside at 1057 Lindendale Lane, Pittsburgh, PA, 15243 U.S.A. I have been gainfully employed since 1956 in the field of geology and since 1995 as a Registered Geologist. I am currently a consultant with the firm of Bikerman Engineering & Technology Associates, Inc. located at 76 Lyme Street, Old Lyme, Connecticut, 06371 U.S.A;

2. This certificate applies to a technical report entitled "Box Mine ~ Goldfields Project, Uranium City, Saskatchewan, Canada prepared for GLR Resources Inc. ("GLR") by Bikerman Engineering & Technology Associates, Inc. dated June 2007" (the "Technical Report");

3. I am a graduate of the University of Arizona, Tucson, AZ, with the degree of Ph.D. in Geology in 1956. I am a registered professional geologist, PG-001740~G, in the Commonwealth of Pennsylvania. I am a qualified person for the purposes of National Instrument 43-101 ("NI 43~101''). I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101 and certify that by reason of my education, affiliation with professional association (as defined in NI 43-101) and pas relevant work experience, I fulfill the requirements to be a qualified person for the purposes of NI 43101

4. My most recent personal inspection of the property referred to in the Technical Report was for two days in July, 1989 in preparation of the report Bikerman, M., Bell, K., Blenkinsop, J., 1990: Rb-Sr Geochronology of the Lodge Bay Granite, a ca. 3.0 Ga Basement in the Beaverlodge Area, Saskatchewan; in Summary of Investigations 1990, Saskatchewan Geological Survey; Saskatchewan Energy and Mines, Misc. Report 90-4.

5. I am responsible for supervising the preparation of Sections 1,2,3,4,5,6, 7,8,9, 10, 11, 17,28,29,30, and 31 of the Technical Report;

6. I am an independent qualified person of GLR Resources Inc. as described in section 1.4 ofNI43-101;

7. I have not received any interest, direct or indirect, in the property nor do I have any beneficial interest, direct or indirect, in the securities of GLR Resources Inc., or any parents or subsidiaries of GLR;

8. I have read NI 43-101 and the Technical Report and to the best of my knowledge and belief in the Technical Report has been prepared in compliance with NI 43-101; and

9. As of the date of the certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading. DATED the 12th day of May, 2008.

NAME: MICHAEL BIKERMAN

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 278 Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 279

DATED the 12th day of May, 2008.

Box Mine Project 43-101F1 Revision 1 - May 12, 2008 Page 280

CERTIFICATE OF QUALIFIED PERSONS

I, Thomas McGrail, Engineer of Mines do hereby certify that:

1. I reside at A.P. 47, San Juan del Sur, Rivas, Nicaragua. I am currently a consultant to the firm of Bikerman Engineering & Technology Associates, Inc. located at 76 Lyme Street, Old Lyme, Connecticut, 06371 U.S.A;

2. This certificate applies to a technical report entitled "Box Mine - Goldfields Project, Uranium City, Saskatchewan, Canada prepared for GLR Resources Inc. ("GLR") by Bikerman Engineering & Technology Associates, Inc. dated June 2007" (the "Technical Report");

3. I am a graduate of the Technical University of Nova Scotia with a Bachelor's Degree in Mining (Distinction) granted in 1981. I am a member of the Australian Geoscientists. I am a qualified person for the purposes of National Instrument 43-101 ("NI 43-101"). I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101 and certify that by reason of my education, affiliation with professional association (as defined in NI 43-101) and pas relevant work experience, I fulfill the requirements to be a qualified person for the purposes of NI 43-101

4. My most recent personal inspection of the property referred to in the Technical Report was on a 3- day visit from May 30-June 1, 2007;

5. I am responsible for supervising the preparation of Sections 3.2, 3.8, 3.9, 18.5, 20, 22, 23 and 24 of the Technical Report;

6. I am an independent qualified person of GLR Resources Inc. as described in section 1.4 of NI 43- 101;

7. I have not received any interest, direct or indirect, in the property nor do I have any beneficial interest, direct or indirect, in the securities of GLR Resources Inc., or any parents or subsidiaries of GLR;

8. I have read NI 43-101 and the Technical Report and to the best of my knowledge and belief in the Technical Report has been prepared in compliance with NI 43-101; and

9. As of the date of the certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

DATED the 12th day of May, 2008.

NAME:THOMAS MCGRAIL

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