Rail Property

The 100%-owned, near-surface copper Rail deposit is a polymetallic copper (zinc-gold-silver) rich VMS deposit. The Rail Property is in the Flin Flon-Snow Lake district of western Manitoba, Canada, approximately 700 km north-northwest of the City of Winnipeg, and 50 km west-southwest of the Town of Snow Lake.

Geology

The Rail Deposit is a single, steeply dipping, high grade, copper-rich VMS lens that subcrops at surface and ranges in width from 0.25 m to 5.0 m averaging 2.53 m with an approximate strike length of 1,300 m at surface. The Rail Deposit consists of stringers and massive sulphide lenses of chalcopyrite, pyrrhotite, pyrite and sphalerite. Drilling has intersected the Rail Deposit and additional mineralization over a strike length of 960 m and to a vertical depth of 680 m. The mineralization remains open to the south and at depth where additional conductive areas have been identified by borehole and surface Deep Penetrating Electromagnetic Survey (DPEM). The Rail Deposit is associated within a 5 km long conductive horizon of similar juvenile arc rocks that host all the VMS mines in the Flin Flon-Snow Lake Greenstone Belt. The original depositional and stratigraphic relationships are obscured by the lack of outcrop and overprinting effects of high-grade regional metamorphism and deformation.

Mineral Resource Estimate

The Rail Property has an NI 43-101 Mineral Resource Estimate (February 2022) as follows:

Updated Rail Mineral Resource Estimate at $80 insitu cut-off
Classification Tonnes ('000t) Cu (%) Zn (%) Au (gpt) Ag (gpt) CuEq (%) CuEq (Mlbs)
Indicated                 2,053           1.87  0.59  0.60  6.1 2.30                  104 
Inferred                   1,079           2.14  0.73  0.90  7.6 2.73                  65

Refer to Global Resource Table for additional disclosures

Metallurgical Testing

On February 28, 2020 the Company announced the results of metallurigcal test work completed on the Tower, Rail and Talbot deposits (see PR here). 

Highlights of the metallurgical testing are as follows :

  • Copper recoveries ranging from 91.2% - 94.4%;
  • Copper concentrate grade of 28.2%-31.3%;
  • Low zinc contamination on copper concentrates (0.3%-1%); and
  • Potential ability to produce Zinc concentrate of >50%Zn.

Preliminary Economic Assessment (January 25, 2021)

On February 1, 2022 the Company released an N.I. 43-101 Preliminary Econommic Assessment ("PEA"), combining the Tower and Rail Properties (see PR here).  The technical report will be filed within 45 days of the Company's announcement of the highlights.

Highlights of the PEA results are as follows:

  • After tax NPV8 of $128.6 million and an IRR of 67%;
  • Initial capital of $81.0 million;
  • Near term production possible with a 16-month construction period;
  • Initial capital paid back within 12 months of Commercial Production; and
  • 9.5 year life of mine, with opportunities for mine life expansion.

1 Base case economics price assumptions: Copper price US$3.76/lb, zinc price US$1.25/lb, gold price US$1,828/oz, silver price US$24.64/oz and USD:CAD exchange rate of .78