Value Through Gold

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ADVANCING CONSTRUCTION OF THE HIGH-GRADE BRUCEJACK GOLD MINE
COMMERCIAL PRODUCTION TARGET 2017

Brucejack

Commercial production is targeted for 2017 for the high-grade underground Brucejack Gold Mine. The Mine is funded,  permitted and construction is reaching completion with the commissioning process expected to begin in April 2017. Brucejack is located in northwestern British Columbia, approximately 65 kilometers north of Stewart, BC the property consists of 122,133 hectares (over 301,798 acres).

The primary focus of the Mine is the Valley of the Kings deposit which is comprised of high-grade visible gold within a lower grade gold quartz stockwork system. A feasibility study completed in June 2014 updated in December 2016 has outlined Proven and Probable mineral reserves in the Valley of the Kings of 8.1 million ounces of gold (15.6 million tonnes grading 16.1 grams per tonne gold).

All major federal and provincial regulatory permits required to begin development work towards commercial production at the Brucejack Mine were received in 2015. Construction commenced on September 5, 2015. In February 2017 an accelerated construction timeline was announced and commission is now expected early in the second quarter of 2017.​

2015/2016 Infill Drill Program

The Valley of the Kings infill drill program continued through 2015 and into the second quarter of 2016. The program which consisted of 63, 740 meters in 367 drill holes was designed to target stope areas to be mined in the first three years of the current mine planin years 1 through 3 of the current mine plan(1320-meter level to 1200-meter level).

The planned drill program was expanded to include extensions of Domain 20 which are adjacent to areas being mined in the early years of the 2014 Feasibility Mine Plan. Roughly 200 vertical meters over a strike length of 250 meters were drilled at 7.5 to 10-meter centers from five underground drill stations.

The primary purpose of the drilling was grade control, with the additional benefit of infill drilling inferred and non-stope indicated resources in the same area. Results from the program continue to confirm the style and grade distribution of the gold mineralization in the area being tested, which includes the intersection of high grade and visible gold. (See news release dated June 4, 2015, April 5, 2016, April 26, 2016. May 12, 2016 and May 31, 2016)

June 2014 Feasibility Study & February 2017 Capital Cost Update

A feasibility study for the Brucejack Mine was completed in June 2014 and updated in December 2016 for an underground mine with an operating rate of 2,700 tonnes per day using a mining method of long-hole stoping and cemented paste backfill (see news release dated June 19, 2014 and February 3, 2016). Stopes will be mined using a combination of longitudinal and transverse mining, depending on zone width and orientation. Cemented paste tailings will be prepared in a paste plant located on surface near the mill and then pumped underground for distribution to the stopes.

Highlights of the June 2014 Brucejack feasibility study and capital cost update (see news release dated Feb 3, 2017). Using base case US$1,100/oz gold, US$14/oz silver and exchange rate of 0.75 US$/C$ include:

- Proven and Probable mineral reserves in the Valley of the Kings of 8.1 million ounces of gold (15.6 million tonnes grading 16.1 grams per tonne gold); 
- Base case pre-tax Net Present Value (5% discount) of US$2.34 billion;        
- Mine life of 18 years producing an estimated 7.3 million ounces of gold;
- Average annual production of 504,000 ounces of gold over the first 8 years and 404,000 ounces of gold over the life of mine;
- Base case pre-tax Internal Rate of Return of 34.4%, with payback estimated at 3.3 years;
- US$811 million estimated capital cost, including contingencies and 3-months working capital;
​- Average operating costs of C$163.05/tonne milled over mine life.

Valley of the Kings High-Grade Gold Mineral Resources

The mineral resource is based on the July 2016 Mineral Resource update and the December 2013 Mineral Resource estimate (see news release dated July 21,2016 and December 19, 2013) December 2013 Mineral Resource estimate (see news release dated December 19, 2013). The high-grade gold resources in the Valley of the Kings (5.0 g/t gold-equivalent cut-off) total:

  • 9.1 million ounces of gold in the Measured and Indicated Resource categories (16.4 million tonnes grading 17.2 grams of gold per tonne); and

The input data for the 2016 mineral resource update compromised 63,740 meters in 367 drill holes.The input data for the Valley of the Kings December 2013 estimate comprises 922 drillholes for 218,127 meters including 9 historical surface drillholes (579 meters), 24 surface drillholes completed since the previous November 2012 Mineral Resource (5,100 meters) and 409 underground exploration drillholes completed since the previous November 2012 Mineral Resource (38,829 meters).  These figures exclude intervals with no gold values and drillholes outside of the Valley of the King area.

2015 Regional Exploration Program

The 2015 grass-roots exploration program was comprised of prospecting, airborne EM, magnetic and radiometric surveys, and a surface drill program. The 2015 surface exploration drill program consisted of approximately 20,000 meters of drilling, which targeted porphyry/epithermal-style mineralization to the east of the Brucejack Mine. The 2015 regional exploration program was successful in expanding the size of the hydrothermal system that includes the Valley of the Kings and confirming the potential for additional mineralized zones to the east. With the discovery of the Flow Dome Zone the program was successful in extending the strike length of the Valley of the Kings gold mineralization 1,000 meters to the east of the current Valley of the Kings Measured and Indicated Mineral Resource. Results from the 2015 program will be used to prioritize targets for follow-up regional exploration programs. (See news release dated December 15, 2015)

2013 Exploration Program

The Mineral Resource estimate has been informed by extensive work focused on the geological interpretation of the Valley of the Kings.  The high-grade mineralization in the Valley of the Kings is hosted in a broad deformed stockwork, and a key outcome from 2013’s 10,000-tonne Bulk Sample Program (the “Program”) was the underground confirmation of both lateral and vertical continuity of the vein systems comprising this stockwork, and the location of high-grade corridors of mineralization. The Valley of the Kings remains open to the east and west along strike and at depth.

The underground drilling completed in 2013 includes Program drilling (16,789 meters) and additional underground exploration drilling (22,041 meters).  Drill data, in conjunction with underground mapping and surface mapping, has resulted in a robust geological model for the Valley of the Kings with well-defined mineralized domains.

The excavation of the 10,000 tonnes of Program material was completed in late August, and a total of 5,865 ounces of gold was produced from processing (see news release dated December 13, 2013).

The underground drilling completed in 2013 includes Program drilling (16,789 meters) and additional underground exploration drilling (22,041 meters).  Drill data, in conjunction with underground mapping and surface mapping, has resulted in a robust geological model for the Valley of the Kings with well-defined mineralized domains.

The excavation of the 10,000 tonnes of Program material was completed in late August, and a total of 5,865 ounces of gold was produced from processing (see news release dated December 13, 2013).

Source:

Feasibility Study and Technical Report Update on the Brucejack Project, dated June 19, 2014 Brucejack capital cost update (see News Release dated February 17, 2016)

2015/2016 Underground Infill Drilling (see news release dated June 4, 2015 and April 5, 2016)

2015 Regional Exploration Program (see news release dated December 15, 2015)

2013 Exploration Program (see news release dated December 13, 2013)