A Major Step Forward Copper North’s Carmacks Copper-Gold-Silver Project is positioned to be Canada’s next new copper mine

Copper North’s flagship project, the Carmacks Copper-Gold- portunity to increase gross revenues by approximately 30 per Silver Project, is located approximately 30 kilometres off the cent. Klondike Highway near Carmacks, Yukon. The Carmacks proj- ect is in the southern portion of an evolving copper-gold dis- Evaluation of leach alternatives trict that extends northwest to the Dawson gold fields. Cop- The value of adding gold and silver recovery to the project per was discovered in 1970s, and the mineral deposit has since was determined in a Preliminary Economic Assessment (PEA) been through several exploration and development programs. released in June 2014. That initial PEA used a two-stage heap The Carmacks deposit is somewhat unique as it is the only leach process involving copper recovery on an on/off leach large oxide copper deposit in Canada, a feature resulting from pad, followed by rinsing and neutralization of the and avoidance of glaciation. The deep weathering of the sulphide placement on a second pad for recovery of gold and silver. The mineralization has left a residue of copper, gold, and silver min- addition gold and silver recovery resulted in a C1 cash cost of eralization that is readily leached to produce copper cathode US$1.07/lb compared to a C1 cash cost of US$1.65/lb copper that can be sent directly to copper fabricators. These oxide cop- for copper only. With the confirmation of improved per deposits typically are processed using sulphuric acid heap economics with addition of gold and silver recovery, the team leaching. But the Carmacks ore also has relatively high gold and evaluated alternative leach systems to improve recoveries, silver grades, which are not recovered with acidic leaching. Re- reduce capital and operating costs and minimize operational covery of both the copper and the precious metals requires two and environmental risks. very different metallurgical processes – acid leaching for the copper and cyanide leaching for the gold and silver. Agitated tank leach improves processing copper For most of the history of the Carmacks project, the focus Metallurgical test work to develop a new leach plan com- was only on copper recovery. With the new management in menced in fall 2014. Initial evaluation focused on vat leaching, early 2014, all aspects of the project were examined to look at which reduced the copper leaching time from over 200 days to ways of improving project economics and operations at this about 25 days. Despite these substantial reductions of leaching northern site. Addition of gold and silver recovery was identi- time, vat leaching still involved considerable material handling fied as a critical part of the project improvement plan, so Cop- and the handling of large quantities of wet material in winter per North decided to re-engineer the process to add gold and remained an operational concern. The addition of a grinding silver recovery, alongside the leaching of copper. With the re- step to ore preparation after three stage crushing, reducing the engineering by JDS and others, the processing plan evolved size of material from approximately six millimetres to about 0.7 into an efficient plant and reduced operational and environ- millimetres, produced further substantial reduction of leaching mental risk. The new plan was announced October 12, 2016, times, copper to less than a day and gold to less than two days. confirming a very viable new mine opportunity for the Yukon. In addition to the rapid leaching, this much smaller particle size allowed the process to move to agitated tank leaching, which Overcoming hurdles greatly simplified material handling, allowing pumping of the The project review in March 2014, identified several hurdles slurry, particularly under winter conditions. All subsequent test to be overcome in project improvement in addition to precious work then focused on agitated tank leaching. metals recovery including expansion of mineral resources, ad- Heating of the copper leach tanks to 80 degrees Celsius re- dressing winter operating conditions, and reduction of capex sulted in the optimal copper recovery of 85.5 per cent, recover- and opex costs. ing 99.4 per cent of the acid soluble copper in the ore in just The last copper-only feasibility study completed in 2012 in- four hours of leaching. During operation, the copper leach tanks volved and crushing the oxide copper ore, placement will be heated using waste heat from the acid plant that will be on a large leach pad, irrigation with sulphuric acid to leach the used to produce sulphuric acid on site so no additional energy is copper, collection of the copper bearing (pregnant) solution, required. Further work centred on the ore preparation. Initially, and extraction of the copper by to make cathode the ore preparation involved three stage crushing followed by copper sheets. Operation of the heap leach pad in winter con- grinding using a rod . Replacing the rod mill with a SAG mill ditions introduced operational and engineering challenges. allowed us to eliminate the secondary and tertiary crushing The cold conditions resulted in a very long leach time for cop- stages, reducing both capex and operation costs. per recovery and it was unlikely that any subsequent gold and Leach time for copper is efficient, taking about four hours. silver recovery from the heap would be successful. The leach circuit is now a closed circuit. Leached copper is re- The new leach plan overcomes these operational hurdles covered from solution by solvent extraction followed by elec- and included recovery of gold and silver and provided an op- trowinning to produce copper. The containment minimizes the

76 Mining North of 60 | 2017 risk of breaches of the leach materials and reduces environ- fied project closure and progressive reclamation. This series mental risks. of operations reduce operating and environmental risks and provides overall savings. Gold and silver agitated tank leach Copper North is particularly pleased by the much improved After removal of all acid and soluble copper, the ore slurry is operational efficiency and control, and are confident regula- neutralized using lime and then is pumped into the cyanide cir- tors, First Nations, and other interested parties will approve of cuit to recover gold and silver. The test work confirmed similar the changes being proposed. fast leaching of less than 16 hours and improved gold recover- ies. After evaluation of the Merrill Crowe method, the Carbon- Mine economics, our Work Is Not Yet Done In-Leach (CIL) process was selected to produce gold-silver doré. The new PEA, was undertaken by JDS Energy and Mining The twice-leached ore residue goes through a cyanide de- Inc. and completed in October 2016. JDS, together with a struction circuit to remove cyanide from the residue before group of consultants, confirm the details of the new efficient leach plan and an approximate 33 per cent increase in gross it leaves the process plant. The residue is then dewatered revenues due to silver and gold recovery. and trucked to the management area where it will be The new capex, sustaining capital and contingency for the spread and compacted. This dry stacked tailings management copper-gold-silver leach plan totals CDN$263M, slightly less is considered Best Available Technology, eliminating the con- than the capex in the 2012 heap leach plan for copper only. cerns associated with conventional wet tailings management The new leach plan requires more process equipment than and addresses many of the concerns of waste disposal, com- a heap leach operation. However, elimination of a standard mon at mining projects. heap leach pad reduced capex by $75million in the new plan. Operating cost increased slightly but was largely offset by im- Environmental performance proved recoveries of copper and gold. Key points with the new agitated tank leach are many: re- Assuming Consensus Pricing for projects in the development duced footprint of the process plant and mine, elimination pipeline, of US$2.75/lb for copper, US$1300/oz gold, and US$17.50/ of potential for a failed heap, there levels of containment of oz silver, the project economics of CAD $59M Pre-tax Net Pres- copper and gold leach circuit, all leach residue pass through ent Value and CAD 14.2 per cent Pre-tax Internal Rate of Return. cyanide destruction circuit before storage, and fluids return to Although respectable it is apparent that there are additional op- circuit. The application of dry stacked storage leads to simpli- portunities to achieve further improvements. A plan is in progress

220 KM NORTH OF WHITEHORSE, YUKON - 400 KM FROM YEAR-ROUND PORT AT SKAGWAY, AK

ADVANCING CARMACKS COPPER-GOLD DEPOSIT TO BE THE YUKON’S NEXT COPPER MINE

COPPER NORTH MINING CORP.

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2017 | Mining North of 60 77 to address these opportunities. The most important objective is to grading 1.07 per cent copper, 0.456 g/t silver, and 4.58 g/t increase the mine life as each year of operations produces approxi- silver. The new 2016 PEA is based on the historic mineral re- mately $50M net gross revenues to the cash flow model. Mine life source. Copper North plans additional definition drilling and expansion significantly increases NPV and IRR. mine engineering work to bring the new mineral resources into the mine plan , with an initial target of adding three years Carmacks is bigger than most people think to the mine life. This drilling will largely be focused on the 3.9 After dormancy of exploration since 2008, Copper North M tonne measured and indicated mineral resource and 0.8M took on the challenge of expanding mineral resources. The tonnes of inferred resource that were confirmed in the January modest program in fall 2014 focused on Zone 2, well to the 2016 Mineral Resource. north of the main zone. The drilling extended the small deposit Also of interest is the large increase in sulphide mineral re- to a mineralized zone having a length of over 500 metres. Ad- source that extends to depth below the various oxide copper ditional drilling is warranted to bring the Zone 2 mineralization zones. The sulphide mineral resource, and potential for further into the mineral resource inventory. expansion as exploration resumes, provides a potential for The 2015 exploration program was expanded to $1M, to bet- much extended mine life. Carmacks is bigger than most people ter understand controls of mineralization and undertaking fill- think and much exploration is warranted. in drilling of mineral zones south of the main deposit proposed to mine. Drilling was focused on a 2,000-metre-long mineral- Building on the progress of 2016 ized zone, interpreted as the south extension. The announcement of a substantial increase in mineral re- The summer drill program indicated that the copper mineral- sources and the completion of a new PEA in October 2016 ization was continuous over the 2,000-metre-long target zone to have set a base for the final round of engineering to resume the south of the main zone mineralization. Success of the sum- permitting and securing project financing. Key to reaching our mer program, lead to a fall drilling program; filling-in drill spac- objectives is the expansion of mine life to strengthen project ing and expanding the boundaries of the new mineral zones. economics. While this final work plan is being completed, it is widely expected that copper prices will begin their recovery to Mineral Resource Expansion meet the needs of growing copper consumption. The January 2016, Mineral Resource Report indicated that The low production cost and opportunity for mine expan- the mineral resources in all categories nearly doubled historic sion, positions Carmacks Project to be the next new copper measured and indicated mineral resource of 12 million tonnes mine in Canada. n

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78 Mining North of 60 | 2017