Name and Location
Tulsequah Chief polymetallic project, British Columbia, Canada.

Client
Chieftain Metals Corp.

Project Description
The Tulesquah Chief project is based on a 1 100 t/d underground mining operation with an 11-year mine life. It has reserves of 4.4-million tonnes, of which 684 000 t (15%) are proven. The 2014 feasibility update on the Tulsequah Chief project, updating Chieftain’s 2012 feasibility study, incorporates improvements to the Tulsequah Chief polymetallic deposit and the nearby Big Bull deposit, located in north-western British Columbia, collectively referred to as Tulsequah Shazah camp.

The updated study includes optimising production configuration, operations, logistics and mill size, dramatically improving the financeability of the project.

A new underground mine, adjacent to and beneath old workings, which were previously operated by Cominco, is planned to be developed through the existing 5200 and 5400 level adits and will be used as the primary access to the mine for all personnel, mine services, equipment and supplies.

In the 2014 feasibility update, the new mine is proposed to operate as a ramp-entry truck haulage operation using a spiral ramp that will be developed to a vertical depth of 570 m, with mining levels located at 30 m vertical intervals. Transverse and longitudinal sublevel stoping will be the primary mining methods with a minor amount of mechanised cut-and-fill stoping. Paste backfill and unconsolidated loose waste rock are planned to be used for the replacement of mined voids for both methods. Additional cement will be added to the paste backfill for strength where future mining will be adjacent to exposed backfill.

The update contemplates the design of a process plant for the Tulsequah Chief project to process massive sulphide mineralisation at a nominal rate of 1 100 t/d. The process facility is planned to consist of a primary crushing plant; a mill feed storage bin and conveyor corridors located underground; grinding, flotation and filtration; an effluent treatment plant, part of which was constructed in 2011; and a backfill plant. The process plant operation is scheduled to operate two shifts a day and 365 days a year, with an overall availability of 90%. The process plant is designed to produce copper, lead and zinc concentrates and gold-silver doré.

Concentrate produced during operations is planned to be barged, in containerised bags, along the Taku river to a transfer barge at the mouth of the river and then to the port of Seattle to be shipped to Asia. Operating supplies are planned to be barged to site in containers and stored at Paddy’s Flats, 12 km south of the mine.

All surface buildings are planned to be laid out and located in close proximity to the mine, including the mineral process building; an administration building, which includes first aid, a fire truck and an ambulance; a diesel-generated power plant, maintenance/warehouse facility for surface equipment; and an existing effluent treatment plant. Bulk diesel is proposed to be stored in two five-million-litre tanks, located within a lined spill containment area at Paddy’s Flats. A 160-person camp and kitchen/dining facility has been designed to complement the existing 50-person camp located at the Shazah airstrip. The mine dry is planned to be located near the camp.

A 1.7-million-tonne-capacity tailings facility is planned to be built about 5 km north of the mine, in the valley of Shazah Creek.

Depyritised tailings with limestone added is proposed to be transported in the form of a dense slurry by pipe. The final dam height will be 9 m and is designed to have an emergency spillway for unexpected flood events, a toe berm to ensure stability and a liner to prevent seepage. Seismic stability is ensured with a shallow, overall designed dam slope of 5 horizontal to 1 vertical. The dam is scheduled to be constructed in two phases, with a small starter dam in preproduction and the second phase, ultimate dam in year 2 of operations. Surplus water will be treated and discharged to prevent the accumulation of surplus water in the impoundment.

Potentially acid-generating (PAG) waste rock and pyrite concentrate are planned to be temporarily stored in separate lined impoundments 1 km south of the mine. PAG waste rock and pyrite concentrate will be rehandled into the mine as backfill during the mine life. These materials will be stored subaqueous to minimise the potential for acid generation.

Net Present Value/Internal Rate of Return
The feasibility update yields a pretax net present value at 8% (NPV 8%) of C$212-million and an IRR of 25.2%, and a after-tax NPV 8% of C$146-million and an IRR of 21.9%.

Value
The initial capital requirement for the project is estimated at C$198-million.

Duration
Project construction is expected to start in the mid-2015, subject to project financing. Site and plant earthworks and civil construction are expected to begin late in the first quarter of 2015, mill and plant construction in the third quarter, and tailings construction in the second quarter of 2016. Commissioning and production will begin in the fourth quarter 2016. Underground development is planned to begin in the first quarter of 2016.

Latest Developments
In a November 2013 press release, Chieftain announced exploration results that confirmed the existence of potential new resources near the Tulsequah Chief mine that could significantly extend the life of the operation. This provided another solid reason to explore several newly modelled three-dimensional-induced polarisation geophysical inversion targets identified adjacent to the known Big Bull and Tulsequah Chief mineral resources, as well as the prospective ‘Sparling-Banker’, high-grade gold/silver/copper/zinc/lead-rich volcanogenic massive sulphide mineral showings.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Chieftain Metals, tel +1 416 479 5410 or fax +1 416 479 5420.