DATA EXTRACTED FROM A REPORT ENTITLED: CURRAGH RESOURCES CORPORATION . TECHNICAL AND COST REVIEW OF THE,CYPRUS ANVIL MINE FARO, YUKON VOLUME I SUBMITTED IN AUGUST, 1985 BY: KILBORN ENGINEERING (B. C. ) LTD. 1380 BURRARD STREET VANCOUVER, B. C. V6Z 2B7 DATA EXTRACTED FROM A REPORT ENTITLED: CURRAGH RESOURCES CORPORATION TECHNICAL AND COST REVIEW OF THE CYPRUS ANVIL MINE FARO, YUKON TABLE OF CONTENTS VOLUME I SECTION Page No. 1.0 INTRODUCTION 1-1 1.1 Scope of Work 1-1 1.2 History of Production 1-2 1.3 History of Ownership 1-4 1.4 Property Ownership - Anvil District 1-5 2.0 SUMMARY 2-1 2.1 Introduction 2-1 2.2 Assumptions 2-4 2.3 Analysis of Results 2-4 3.0 GEOLOGY AND ORE RESERVES 3-1 3.1 General 3-1 3.2 Geological Setting 3-1 3.3 History of Exploration 3-2 3.4 Depos it Geol ogy 3-2 3.4.1 General 3-2 3.4.2 Rock Types 3-3 3.4.3 Structural Features 3-4 3.4.4 Mineralization 3-6 3.5 Ore Reserves 3-13 3.5.1 Area Reserves and Resources 343 3.5.2 Faro Deposit - Mining Reserves 3-8 3.5.3 Reserve Calculations - Source of Data 3-ll' 3.5.4 Method of Calculation for T-3 Model 3-12 3.5.5 Reserve Accountabi 1i ty 3-14 3.5.6 Recent Drilling 3-20 TABLE OF CONTENTS VOLUME I SECTION Page No. 4.0 MINING 4.1 Genera 4.2 Mining Criteria 4.3 Mine Design 4.3.1 Material Description 4.3.2 Pit Slope Design 4.4 Mining Plan 4-5 4.4.1 Concept 4.4.2 Mining Plan Description 4.5 Equipment 4-11 4.5.1 Existing Equipment 4-11 4.5.2 Equipment Usage Requirements 4-16 4.5.3 Drills 4-17 4.5.4 Blasting 4-17 4.5.5 Shovels 4-20 4.5.6 Trucks 4-20 4.6 Maintenance 4.7 Mine Organization Structure 4.7.1 Summary 4-25 4.7.2 Mine Operating Staff 4-26 4.7.3 Mine Maintenance Staff 4-27 4.7.4 Mine Engi neering 4-27 4.7.5 Mine Operating Labour 4-28 4.7.6 Mine Maintenance Labour 4-29 4.7.7 Engineering - Technical and Clerical Support 4-31 4.7.8 Yards and Services 4-31 4.8 Reactivation of Mining Equipment and Related Start-up Activities 4-32 4.8.1 Introduction 4-32 4.8.2 Organization 4-33 4.8.3 Chronology 4-33 4.8.4 Pit Stabilization and Planning 4-38 4.8.5 Costs 4-40 TABLE OF CONTENTS VOLUME I SECTION Page No. 5.0 MILLING 5-1 5.1 General 5-1 5.2 Mil 1 Production Criteria 5-2 5.3 Metallurgy 5-4 5.3.1 Summary 5-4 5.3.2 Historical Performance 5-4 5.3.3 Actual Plant Performance - January to June 1982 5-6 5.3.4 Predicted Plant Performance - 1985 to 1992 5-10 5.4 Mi 11 Production Forecast 5-16 5.5 Mi 11 Organization Structure 5-16 5.5.1 Summary 5-16 5.5.2 Mill Operating Staff 5-17 5.5.3 Mill Maintenance Staff 5-18 5.5.4 Mill Operating Labour 5-19 5.5.5 Mill Maintenance Labour 5-20 5.6 Mill Operating Cost Summary 5-21 5.7 Mill Preproduction Program 5- 22 5.7.1 Program Objectives 5-22 5.7.2 Crushing 5-26 5.7.3 Grinding 5-29 5.7.4 Flotation and Reagents 5-32 5.7.5 Dewatering and Load-Out 5-34 5.7.6 Water Distribution 5-34 6.0 SERVICES 6-1 6.1 Electrical Energy 6-1 6.1.1 Power Supply 6-1 6.1.2 Power Requirements 6-2 6.1.3 Power Costs 6-3 TABLE OF CONTENTS VOLUME I SECTION Page No. 6.2 Tailings Disposal 6-7 6.2.1 Existing Facilities 6.2.2 Abandonment Plans 6.2.3 Future Operating Plans 6.2.4 Capital Costs 6.3 Clater Supply 6-12 6.3.1 Existing Facilities 6.3.2 Future Water Requirements 6.4 Coal Supply 6-18 6.4.1 Background 6.4.2 Energy Consumption 6.4.3 A1 ternate Sources of Fuel 6.4.4 Future Coal Supply 6.4.5 The Cost of Coal 7.0 GENERAL AND ADMINISTRATIVE 7.1 General 7-1 7.2 General and Administrative - Toronto, Ontario 7-1 7.3 General and Administrative - Whitehorse, Yukon 7-2 7.4 General and Administrative - Faro 7-4 7.5 Faro Town Site 7-6 7.5.1 Background 7.5.2 Proposed Strategy 7.6 General and Administrative - Operating Cost Summary 7-8 8.0 TRANSPORTATION 8-1 8.1 Historical 8.2 Overland Transportation 8.2.1 Developments Since June, 1982 8-3 8.2.2 Proposed Transportation System 8-5 8.2.3 Overland Transportation Costs 8-6 8.2.4 Capital Costs 8-7 TABLE OF CONTENTS VOLUME I SECTION Page No. 8.3 Port Facilities 8-7 8.3.1 Concentrate Storage and Shiploading 8-7 8.4 Ocean Freight 8.5 Other Marketing Expenses 8.6 Backhaul Costs 9.0 MARKETING 9-1 9.1 Potential Markets 9.2 Concentrate Specifications 9.3 Concentrate Treatment Charges 9.3.1 Lead Concentrate Sales Contract Terms 9-3 9.3.2 Zinc Concentrate Sales Contract Terms 9-4 10.0 EXPENDITURE AND CASH FLOW ANALYSIS 10-1 10.1 Assumptions 10-1 11.0 COLLECTIVE BARGAINING AGREEMENTS 11-1 11.1 General 11.2 Proposed Wage Rates 12.0 ANVIL DISTRICT GEOLOGICAL POTENTIAL 12.1 Introduction 12.2 The Grum Deposit 12.3 The Vangorda Deposit 12.4 The Dy Deposit 12.5 Development Options LIST OF TABLES VOLUME I Table Number Description 1.2-1 Historical Production Statistics 2.1-1 Production and Cost Forecast Summary 2.2-1 Principal Assumptions 2.3-5 Summary - Cost per Pound Payable hetal 2.3-6 Summary - Cost per DMT Mill Feed 2.3-7 Manpower Summary 3.5-1 Anvi 1 District Reserves 3.5-2 Faro Pit Mineable Ore Reserves - 4.0 (Pb + Zn) Percent 3.5-3 Faro Pit Mineable Ore Reserves - 6.0 (Pb + Zn) Percent 3.5-4 Faro Pit Mine Models 3.5-5 T-3/F-3 Model Comparison 3.5-6 Model F-3 1981 Production Comparison 3.5-7 Model F-3 1980 Production Comparison 3.5-8 Comparison T-3 Model with Bl asthol e Grade - 4.0 (Pb + Zn) Percent 3.5-9 Comparison T-3 Model with Elasthole Grade - 6.0 (Pb + Zn) Percent 3.5-10 F-4/T-3 Comparison - 4.0 (Pb + Zn) Percent 3.5-11 Dome Model Before and After 1984 Drilling - 4.0 (Pb + Zn) Percent Xi Slope Design Recommendations (D. R. Piteau & Associates) 4.4-1 Open-Pit Mining Schedule 4.5-1 Mine Mobile Equipment 4.5-2 Summary of Mine Equipment Operating Shifts 4.5-3 Drill Equipment Productivity 4.5-4 Dri11 ing Requirements 4.5-5 Blasting Parameters 4.5-6 Consumpti on of Blasting Suppl ies 4.5-7 Shovel Productivity 4.5-8 Shovel Usage 4.5-9 Truck Requirements 4.7-1 Mine Manpower - Summary 4.7-2 Mine Operating Crew 4.7-3 Mine Maintenance Crew 4.7-4 Naintenance Personnel 4.7-5 Engineering - Clerical and Technical Personnel 4.7-6 Yards and Services Personnel LIST OF TABLES VOLUME I Table Number Description 5.1-1 Average Daily Mi 11 Throughput Rates During Start-up Phase 5.2-1 Mil1 Production Criteria - Summary 5.3-3 Plant Metallurgical Performance 5.3-4 Average Metal 1urgical Performance Data 5.3-5 Metallurgical Performance by Ore Type 5.3-6 Metallurgical Performance - Start-up Adjustment Factors 5.3-7 Ore Del ivery Schedule 5.3-8 Low-Grade Stockpile - Adjustments to Reflect Oxidation 5.4-1 Mi1 1 Production Schedule 5.5-1 Mill Manpower - Summary 5.5-4 Mill Operating Crew 5.5-5 Mi 11 Maintenance Crew 5.6-1 Mi 11 Preproduction and Operating Costs 5.7-1 Mi11 Feed Tonnages - January - May, 1982 5.7-2 Preproduction Mi11 Projects 5.7-3 Crushing Plant Operating Schedules 5-7-4 Conveyor Design Criteria 6.1-1 NCPC Power Generating Capabi 1 ity 6.1-2 Pre-Mill Production - Energy Consumption 6.1-3 Electrical Energy Costs 6.1-4 Estimated Energy Costs 6.2-4 Tailings Disposal Costs - Summary 6.3-1 Order-of-Magnitude Water Requirements 6.4-1 Annual Coal Consumption - By Area 6.4-2 A1 ternative Sources of Fuel 6.4-3 Coal to Oi1 Conversion - Order-of-Magni tude Capital Cost Estimate 6.4-4 Fuel - Cost Comparison - Coal and Oil 7.6-1 General and Admini strative Costs 8.1-1 Cyprus Anvi 1 Concentrate Haul - Historical Data 8.2-1 Truck Specifications - Summary 8.2-2 Overland Transportation Costs 8.3-1 White Pass and Yukon Route - Skagway Terminal Charges 8.3-2 Skagway Terminal - Cost of Operation 8.3-3 Consolidated Transportation and Terminal Costs 9.2-1 Selective Concentrate Specifications 10.1-1 Cash Flow - Time Lags LIST OF TABLES VOLUME I Table Number Description Curragh ' s Wage Rates Comparison of Wage Rates - Pine Point Versus Curragh The Grum Deposit - A Comparison of Reserve Estimates The Grum Deposit - Mineable Grades (Open-Pi t) The Vangorda Deposit - A Comparison of Reserve Estimates LIST OF FIGURES VOLUME I Figure Number Description Location Plan General Site Layout Claim Blocks Reg iona 1 Geol ogy Local Geology Faro Deposit - Longitudinal Section Faro Pit - Longitudinal Section Open-Pit - Composite Plan - Current Pit Open-Pit - Composit Plan - April lst, 1986 Open-Pit - Composit Plan - End of 1986 Open-Pit - Composit Plan - End of 1987 Open-Pit - Composit Plan - End of 1988 Open-Pit - Composit Plan - End of 1989 Open-Pit - Composit Plan - End of 1990 Organization Structure - Mine Mine Reactivation Schedule Lead Metallurgical Performance Zinc ~etallurgical Performance Organization Structure - Mil1 Crushing Plant Conveyors - Design Capacities NCPC Yukon Power System Final Tailings Impoundment - Rose Creek Valley Si te Plan Organization Structure - Whitehorse Organization Structure - Faro Organization Structure - Warehouse Sensitivity to Metal Prices Sensitivity to Production Costs ACKNOWLEDGEMENTS Kilborn Engineering (B.