DARNLEY BAY RESOURCES LTD. PINE POINT PEA NI 43-101 PRELIMINARY ECONOMIC ASSESSMENT TECHNICAL REPORT ON THE PINE POINT ZINC PROJECT, NORTHWEST TERRITORIES, CANADA Prepared for: Qualified Persons Company Garett Macdonald, P.Eng. JDS Energy & Mining Inc. Kelly McLeod, P.Eng. JDS Energy & Mining Inc. DARNLEY BAY RESOURCES LTD. Dino Pilotto, P.Eng. JDS Energy & Mining Inc. Suite 400, 365 Bay Street Ken Embree, P.Eng. Knight Piésold Ltd. Toronto, ON, M5H 2V1 Albert Daniel Siega, P.Eng Independent Consultant Paul Gann, P.Geo Independent Consultant Prepared by: JDS ENERGY & MINING INC. Suite 900, 999 W Hastings Street Vancouver, BC V6C 2W2 EffectiveEFFECTIVE Date D: AprilATE :18, A 2017PRIL 18, 2017 i REPORT DATE: JUNE 1, 2017 DARNLEY BAY RESOURCES LTD. PINE POINT PEA NOTICE JDS Energy & Mining, Inc. prepared this National Instrument 43-101 Technical Report, in accordance with Form 43-101F1, for Darnley Bay Resources Ltd. The quality of information, conclusions and estimates contained herein is based on: (i) information available at the time of preparation; (ii) data supplied by outside sources, and (iii) the assumptions, conditions, and qualifications set forth in this report. Darnley Bay Resources Ltd. filed this Technical Report with the Canadian Securities Regulatory Authorities pursuant to provincial securities legislation. Except for the purposes legislated under provincial securities law, any other use of this report by any third party is at that party’s sole risk. Effective Date: April 18, 2017 ii DARNLEY BAY RESOURCES LTD. PINE POINT PEA Contents Contents ........................................................................................................................ iii Tables and Figures ....................................................................................................... ix 1 Executive Summary ...................................................................................... 1-1 1.1 Introduction ................................................................................................................................. 1-1 1.2 Project Description and Location ............................................................................................... 1-1 1.3 Access and Ownership .............................................................................................................. 1-1 1.4 History, Exploration and Drilling ................................................................................................. 1-2 1.5 Geology & Mineralization ........................................................................................................... 1-3 1.6 Metallurgical Testing and Mineral Processing ........................................................................... 1-4 1.7 Mineral Resource Estimates ...................................................................................................... 1-5 1.8 Mineral Reserve Estimate .......................................................................................................... 1-6 1.9 Mining ......................................................................................................................................... 1-6 1.10 Recovery Methods ................................................................................................................... 1-10 1.11 Infrastructure ............................................................................................................................ 1-10 1.12 Environment and Permitting ..................................................................................................... 1-11 1.13 Capital Cost Estimate ............................................................................................................... 1-12 1.14 Operating Cost Estimate .......................................................................................................... 1-13 1.15 Economic Analysis ................................................................................................................... 1-14 1.15.1 Main Assumptions .................................................................................................................... 1-14 1.15.2 Results ..................................................................................................................................... 1-16 1.15.3 Sensitivities .............................................................................................................................. 1-16 1.16 Conclusions .............................................................................................................................. 1-17 1.16.1 Risks ......................................................................................................................................... 1-17 1.16.2 Opportunities ............................................................................................................................ 1-18 1.17 Recommendations ................................................................................................................... 1-18 2 Introduction ................................................................................................... 2-1 2.1 Basis of Technical Report .......................................................................................................... 2-1 2.2 Scope of Work ............................................................................................................................ 2-1 2.3 Qualifications and Responsibilities ............................................................................................ 2-2 2.4 Site Visit ..................................................................................................................................... 2-2 2.5 Units, Currency and Rounding ................................................................................................... 2-3 2.6 Sources of Information ............................................................................................................... 2-3 3 Reliance on Other Experts ........................................................................... 3-1 4 Property Description and Location ............................................................. 4-1 4.1 Area of the Property ................................................................................................................... 4-1 4.2 Location of the Property ............................................................................................................. 4-1 4.3 Type and Details of Mineral Tenure ........................................................................................... 4-2 4.4 Issuer’s Title To and Interest in the Property ............................................................................. 4-2 4.4.1 Surface Rights ............................................................................................................................ 4-2 4.4.2 Obligations for Retention of Property ......................................................................................... 4-3 4.4.3 Expiration Date of Claims, License, or Other Property Tenure Rights ...................................... 4-3 Effective Date: April 18, 2017 iii DARNLEY BAY RESOURCES LTD. PINE POINT PEA 4.5 Agreements and Encumbrances ................................................................................................ 4-3 4.5.1 Environmental Liabilities ............................................................................................................ 4-3 4.6 Permitting ................................................................................................................................... 4-3 4.6.1 Land and Environmental Permits ............................................................................................... 4-3 4.7 Other Factors and Risks ............................................................................................................ 4-4 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ........................................................................................................................ 5-1 5.1 Topography, Elevation, and Vegetation ..................................................................................... 5-1 5.1.1 Physiography.............................................................................................................................. 5-1 5.1.2 Vegetation and Wildlife .............................................................................................................. 5-1 5.2 Means of Access to the Property ............................................................................................... 5-1 5.3 Proximity to Population Centers ................................................................................................. 5-2 5.3.1 Climate ....................................................................................................................................... 5-2 5.4 Infrastructure .............................................................................................................................. 5-2 5.4.1 Exploration and Operating Season ............................................................................................ 5-3 6 History ............................................................................................................ 6-1 6.1 Early History ..............................................................................................................................