ARCTIC DEPOSIT

Arctic is one of the highest-grade copper deposits known in the world with an average grade of 5% copper equivalent.

The Arctic deposit (“Arctic”), is a polymetallic volcanogenic massive sulphide deposit located approximately 470 kilometers northwest of the City of Fairbanks, Alaska. Arctic is at pre-feasibility stage and current activities are focused on advancing Arctic to feasibility and permitting.

Alaska, USA

Deposit Type

Volcanogenic Massive Sulphide

Unit

Ambler Sequence

Age

Devonian

Approximate Thickness

700 – 1,850 meters

Main Economic Elements

Copper, Zinc, Lead, Gold, Silver

We announced the results of the Arctic Feasibility Study (FS) on August 20, 2020 and filed the technical report titled “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report” on October 2, 2020.

The FS for the Arctic Project describes the potential technical and economic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine-and-mill complex for a 10,000-tonne-per-day operation. The base case scenario utilizes long-term metal prices of $3.00/lb for copper, $1.10/lb for zinc, $1.00/lb for lead, $18.00/oz for silver and $1,300/oz for gold. The FS was prepared on a 100% ownership basis and all amounts are in US dollars.

2020 FEASIBILITY STUDY

• Pre-tax Net Present Value at an 8% discount rate (“NPV8%”) of $1,550.9 million calculated at the beginning of the three-year construction period and an Internal Rate of Return (“IRR”) of 30.8% for the base case.
• After-tax NPV8% of $1,134.7 million and after-tax IRR of 27.1% for the base case.
• Initial capital expenditure of $905.6 million and sustaining capital of $113.8 million for total estimated capital expenditures of $1,019.4 million over the estimated 12-year mine life. In addition, closure and reclamation costs are estimated at $205.4 million.
• Estimated pre-tax and after-tax payback of initial capital within 3 years for the base case at $3.00/lb copper.
• Minimum 12-year mine life supporting a maximum 10,000-tonne-per-day conventional grinding mill-and-flotation circuit to produce copper, zinc and lead concentrates containing significant gold and silver by-products.
• Life-of-mine strip ratio of 6.9 to 1.
• Average annual payable production projected to be more than 155 million pounds of copper, 192 million pounds of zinc, 32 million pounds of lead, 32,000 ounces of gold and 3.4 million ounces of silver for life of mine.
• A capital intensity ratio on initial capital of approximately $6,432 per tonne of average annual copper equivalent produced.
• Estimated cash costs of $0.32/lb of payable copper (C1 cash costs include on-site mining and processing costs, road tolls and maintenance, transport, royalties, and is net of by-product credits).
• Total “all-in” cash costs (initial/sustaining capital, operating, transportation, treatment and refining charges, road toll, and by-product metal credits) estimated at $0.98/lb of payable copper.
• Management believes economic indicators justify moving forward with permitting.

DOWNLOAD NI 43-101 TECHNICAL REPORT

RESERVE ESTIMATE FOR ARCTIC PROJECT

• NOTES

GEOLOGY AND MINERALIZATION

On the Property, polymetallic volcanogenic massive sulphide (“VMS”) style deposits (including Arctic) and prospects are hosted in the Ambler Sequence, a group of Middle Devonian to Early Mississippian, metamorphosed, bimodal volcanic and volcaniclastic rocks with interbedded metasediments. VMS-style mineralization is found along the entire 110-kilometer strike length of the district.

Mineralization at Arctic occurs as semi-massive to massive sulphide beds within primarily graphitic and quartz mica (+/- chlorite) schists. The sulphide beds average 4 meters in thickness but vary from less than 1 meter up to as much as 18 meters in thickness. The bulk of the mineralization is within an area of roughly 1 km² with mineralization extending 250 meters below the surface. Mineralization is predominantly coarse-grained sulphides consisting mainly of chalcopyrite, sphalerite, galena, tetrahedrite, arsenopyrite, pyrite and pyrrhotite. Trace amounts of electrum and enargite are also present.

MAPS