Eagle River Mine

Overview

The 100% owned Eagle River mine is located 50 kilometres west of Wawa, Ontario, and 17 kilometres south of the Eagle River mill. It has now been in production for 15 years and has produced 822,373 ounces of gold from 2.7 million tonnes of ore at a recovered grade of 9.6 grams of gold per tonne. In 2009, Eagle River produced 60,754 ounces of gold from 132,004 tonnes of ore at a recovered grade of 14.3 grams of gold per tonne. Proven and probable reserves currently stand at 400,000 tonnes at 8.6 grams of gold per tonne.

Eagle River will proceed at a mining rate of 100,000 tonnes per annum or about 36,000 ounces per year. The Eagle River deposit remains open at depth and over 10 years of mining history has demonstrated a capacity to replace reserves through modest exploration and development expenditures.

Regional Geology

The Eagler River mine is located in the Mishibishu greenstone belt, which is a broad, arcuate belt about 60 kilometres in length and up to 18 kilometres wide. It is located near the northeast corner of Lake Superior, west of the town of Wawa and east of Pukaskwa Depot. This belt is part of the Wawa Subprovince of the Superior Province of Archean age. Within the Mishibishu greenstone belt, two separate assemblages are recognized, the Catfish Assemblage and the Mishi Assemblage. The Catfish Assemblage is further divided into two segments. The larger segment, the Pukaskwa-Point Isacor Segment ("PPIS"), occupies most of the southern part of the Mishibishu greenstone belt. The Eagle River Property is located within the PPIS. The PPIS contains magnesium-rich tholeiite, calc-alkaline andesite, dacite and minor rhyolite, minor sedimentary rocks and lean chert-magnetite iron formation. The magnesium-rich tholeiites predominate in the eastern part of the segment, where the Eagle River Property is located. Typically, these rocks form a north-dipping, north facing sequence. Rocks of the PPIS are metamorphosed to greenschist metamorphic grade, though higher grades of contact metamorphism have occurred around the major intrusions within the PPIS. Gold mineralization within the Mishibishu greenstone belt tends to occur as quartz-vein-hosted deposits located within regional zones of deformation. The Eagle River deposit is located within the Eagle River deformation zone.

Property Geology

The Eagle River Mine is a classic, shear-hosted, quartz vein, gold deposit. Several separate mineralized zones have been identified along a 16-kilometre strike length on the Eagle River Property. The No. 8 and No. 6 zones are hosted by shear zones which cut a quartz diorite stock. The No. 2 and No. 3 zones occur in sheared mafic volcanics immediately east of the stock, as does the HP zone identified by surface prospecting in 1995. The ore zones are vertically dipping, display moderate to steep east plunges and mineable widths of 1.5 to 7.5 metres. Deep exploration drilling has identified high grade values over mineable widths to a maximum depth of 650 metres beyond which the orebody remains open at depth.

Mine Details

The Eagle River orebody is a vertically dipping vein type deposit hosted in an Archean greenstone belt. It consists of a series of quartz vein lenses which to date have been traced over a strikelength of 2.5 kilometres and to a depth of 650 metres. The exploration potential is excellent both within the mine area and elsewhere on the 16 kilometre long property.

The Eagle River mine is accessed via a ramp system and a 580 metre shaft with a loading pocket at 460 metres. Currently, the deepest mining level is 580 metres. From 1996 to 2001, the primary mining method was shrinkage stoping. From 2002 to 2004, the primary mining method employed was sublevel long-hole stoping. This method resulted in excessive dilution problems and higher development costs.

In 2007, we invested in developing the high grade western portion of the mine. As a result, 2007 production from Eagle River was only 8.5 months with Mishi Open Pit ore processed for 3.5 months.

2008 will see a resumption of 12 month steady-state Eagle River production.

Eagle River Mill

Eagle River mine ore is processed in the Eagle River mill. The mill is located in the centre of the Mishi-Magnacon properties. It is centrally located within a highly prospective, under-explored greenstone belt.

In 2005, the mill processed 198,000 tonnes of ore to produce 53,100 ounces of gold and 6300 ounces of by-product silver. Recoveries averaged 94.6% for Eagle River ore. The mill operated at a daily rate of 543 tonnes per day, down from 800 tonnes per day in 2004.

The mill employs the Merrill-Crowe zinc precipitation process and has a maximum capacity of 1,000 tonnes per day. Approximately 40% of the gold is recovered in a gravity concentrate averaging 70% gold. The remainder is precipitated and refined into doré bars averaging 80% gold. These are shipped to the Royal Canadian Mint for final refining. Approximately one ounce of by-product silver is produced for each ten ounces of gold.