Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the
"Company") is pleased to report positive results from the feasibility
study for a proposed open pit mine at its 100% owned Detour Lake gold
project in northeastern Ontario. The feasibility study was compiled by
BBA Inc. ("BBA") with the participation and contribution of prominent
industry consultants. All figures are in US dollars except where
noted.
Highlights of the Feasibility Study (base case using $850/oz
gold)- Proven and probable open pit reserves of 11.4 million ounces
contained gold with a waste to ore ratio of 3.3:1
- 16 years life of mine (LOM) at mill throughput ranging from
55,000 to 61,000 tpd
- Average annual gold production of approximately 649,000 ounces
- Average LOM cash operating costs of $437/oz
- First 3 years cash operating costs averaging $386/oz with gold
production totalling 1.9 million ounces
- At $850/oz, pre-tax Net Present Value (NPV) of $1.03 billion at
a 5% discount rate generating an Internal Rate of Return (IRR) of 14.4%
- At current gold price, pre-tax NPV of $3.1 billion at a 5%
discount rate generating an IRR of 30.7%
- Estimated start-up capital costs of $ 992 million
- Additional opportunities to be realized
- Global measured and indicated mineral resources of 17.7 million
ounces (inclusive of mineral reserves) and 3.4 million ounces in the
inferred category
Gerald Panneton, President and CEO of Detour Gold stated: "The
completion of the feasibility study in just over three years since the
acquisition of the project is a major accomplishment for the Company.
With 11.4 million ounces, the Detour Lake deposit is now Canada's
largest undeveloped gold reserve and ranks sixth among the top ten
largest gold reserves in North America. The positive results confirmed
the Detour Lake deposit as a future significant gold producer with an
average annual gold production of 649,000 ounces over a mine life of 16
years.
We have been able to reduce the cut-off grade and increase the mill
throughput to provide a 32% increase in revenue compared to the
pre-feasibility study of September 2009. While we are incurring a 20%
increase in capital expenditures over the life of the mine, as a result
of the expansion of the mill and tailings facilities, it has enabled us
to significantly augment the pre-tax cash flow by 45% to Cdn$2.7 billion
from the pre-feasibility study.
Detour Gold is currently working on delivering the other remaining key
deliverables to start mine development by the end of 2010, which include
receipt of provincial permits and finalizing Aboriginal agreements. The
Detour Lake project will make significant impact on the economy of
northern Ontario as its largest gold mine. With gold production expected
to commence in early 2013, Detour Lake will be among the largest gold
operations in North America."
Improvements from Pre-feasibility Study
Additional drilling and trade-off studies undertaken since the
pre-feasibility (September 2009) have generated significant improvements
in the project economics:- Coarser grinding from 70 to 105 microns with relatively no change to
gold recovery
- Mill throughput increase from 45,000 tpd to 55,000-61,000 tpd
- 30% increase in mineral reserves from 8.8 to 11.4 million
ounces
- Procurement of long lead items has secured delivery times and
eliminated potential cost increase
Project Assumptions
and Parameters
| Assumptions |
|
| Gold price (US$/oz)(1) |
850 |
| Foreign exchange rate (Cdn$/US$) |
1.10 |
| Fuel price WTI ($/barrel) |
80 |
| Income/mining tax rate (%) |
25/10 |
| Net Smelter Royalty (%) |
2.0 |
| Mine Parameters |
|
| Ore milled (Mt) |
347.5 |
| Waste mined (Mt) |
1,153 |
| Strip ratio (waste:ore) |
3.32:1 |
| Average gold grade (g/t) |
1.02 |
| Total contained gold (M oz) |
11.4 |
| Estimated gold recovery (%) |
91.2 |
| Total recovered gold (M oz) |
10.4 |
| Mine life (years) |
16 |
| Average annual gold production (oz) |
649,000 |
| Costs |
|
| Pre-production capital ($ M) |
992 |
| Sustaining capital and mine closure ($ M) |
626 |
| Average operating cash costs ($/oz) |
437 |
| Average total cash costs ($/oz) |
454 |
| Financial Analysis (unleveraged) |
|
| Average annual (pre-tax) cash flow ($ M) |
257 |
| NPV 5% discount pre-tax ($ M) |
1,026 |
| IRR pre-tax (%) |
14.4 |
| IRR after-tax (%) |
12.4 |
| Payback period (years) |
5.9 |
| (1) approximates the 3-year trailing average |
|
Detour Lake Mineral Reserves and Resources
The open pit mineral reserves were estimated within a detailed
engineered pit design by using the measured and indicated resources at a
cut-off grade of 0.5 g/t. The optimized pit shell was generated using
the Lerchs-Grossmann (LG) pit optimizer algorithm using the cost and
economic parameters estimated by BBA. In the pit design, inter-ramp pit
slopes vary from 49 to 56 degrees depending on rock type and structure
orientation. The block model was prepared using the Ordinary Kriging
(OK) method and the kriged block grades include an estimated dilution of
13.5%. The estimated proven and probable reserves total 11.4 million
ounces, after using a 95% mining recovery rate and an additional mining
dilution of 3.8%.
Detour Lake Mineral Reserves at $850/oz (cut-off grade of 0.5
g/t)
Reserve
Category |
Tonnes
(millions) |
Grade
(g/t Au) |
Gold
Ounces
(000’s) |
| Proven |
81.5 |
1.28 |
3,359 |
| Probable |
266.0 |
0.94 |
8,030 |
| Total (P&P) |
347.5 |
1.02 |
11,389 |
The table below summarizes the global mineral resources estimated by OK
at various cut-off grades.
Detour Lake Global Mineral Resource Estimate(1)
Resource
Category |
Cut-off Grade
(g/t) |
Tonnes
(millions) |
Grade
Capped(2)
(g/t Au) |
Gold
Ounces
(000’s) |
| Measured (M) |
0.4 |
119.8 |
1.30 |
5,007 |
| |
0.5 |
108.3 |
1.39 |
4,840 |
| |
0.6 |
97.5 |
1.48 |
4,650 |
| Indicated (I) |
0.4 |
503.0 |
0.88 |
14,286 |
| |
0.5 |
401.8 |
0.99 |
12,830 |
| |
0.6 |
323.0 |
1.10 |
11,443 |
| Total (M&I) |
0.4 |
622.9 |
0.96 |
19,293 |
| |
0.5 |
510.0 |
1.08 |
17,670 |
| |
0.6 |
420.5 |
1.19 |
16,093 |
| Inferred |
0.4 |
197.0 |
0.68 |
4,338 |
| |
0.5 |
133.6 |
0.80 |
3,430 |
| |
0.6 |
93.0 |
0.91 |
2,716 |
| (1) Mineral reserves are
included within the mineral resources reported.
(2) Capping grade estimated
by domains and varies from 15 g/t to 50 g/t. |
The OK block model used for the global mineral resources was exported to
the MineSight pit optimization software to generate an optimum pit
shell based on the measured and indicated resources only, using the
costs and economic parameters estimated by BBA. The table below shows
the in-pit mineral resources at various cut-off grades.
Detour Lake In-pit Mineral Resource Estimate(1)
Resource
Category |
Cut-off Grade
(g/t) |
Tonnes
(millions) |
Grade
Capped(2)
(g/t Au) |
Gold
Ounces
(000’s) |
| Measured (M) |
0.4 |
85.7 |
1.29 |
3,553 |
| |
0.5 |
77.9 |
1.37 |
3,441 |
| |
0.6 |
70.4 |
1.46 |
3,309 |
| Indicated (I) |
0.4 |
358.3 |
0.86 |
9.862 |
| |
0.5 |
284.2 |
0.96 |
8,796 |
| |
0.6 |
226.6 |
1.07 |
7,782 |
| Total (M&I) |
0.4 |
444.0 |
0.94 |
13,415 |
| |
0.5 |
362.1 |
1.05 |
12,237 |
| |
0.6 |
297.0 |
1.16 |
11,090 |
| Inferred |
0.4 |
9.7 |
0.70 |
218 |
| |
0.5 |
6.3 |
0.83 |
169 |
| |
0.6 |
4.5 |
0.94 |
138 |
| (1) Mineral reserves are
included within the mineral resources reported.
(2) Capping grade estimated by
domains and varies from 10 g/t to 50 g/t. |
The feasibility study database included drilling data from the
pre-Detour Gold programs, and Detour Gold's 2007, 2008, and 2009
drilling campaigns. It includes a total of 880,991 metres of drilling in
5,853 holes, including 334,452 metres from Detour Gold.
The mineral reserves could potentially increase in the future as the
Company continues its infill drilling program (on a 40 x 40 metre
spacing) to the west of the current open pit boundary. The drilling
program for 2010 totals 90,000 metres of drilling, of which nearly
60,000 metres has been completed to date. Results to date from this
program (approximately 11,000 metres) indicate the presence of
significant gold mineralization to the west of the current open pit.
Mining and Production
The pit design completed by BBA resulted in a mine plan containing 347.5
million tonnes grading 1.02 g/t gold (including low-grade stockpiled
ore). Total gold production over a 16 year mine life is estimated to be
10.4 million ounces, averaging 649,000 ounces per year (plus 200,000
ounces of silver). The life of mine waste to ore ratio is estimated at
3.3 to 1.
Summary of the annual mine production plan is outlined below.
| Years
|
Ore
Mined
(kt) |
Ore
Milled
(kt) |
Head
Grade
(g/t) |
Production
(oz) |
Waste
(kt) |
Over
burden |
Strip
ratio |
| PP |
4,618 |
|
- |
- |
13,587 |
15,570 |
6.31 |
| 1 |
17,672 |
14,018 |
1.13 |
467,537 |
55,399 |
10,648 |
3.74 |
| 2 |
30,065 |
20,096 |
1.23 |
729,822 |
58,865 |
10,928 |
2.32 |
| 3 |
30,528 |
20,293 |
1.20 |
716,687 |
85,783 |
10,490 |
3.15 |
| 4 |
20,046 |
22,336 |
0.93 |
608,160 |
92,579 |
10,214 |
5.13 |
| 5 |
20,007 |
22,336 |
0.86 |
564,444 |
92,201 |
8,206 |
5.02 |
| 6 |
20,064 |
22,336 |
0.93 |
606,810 |
99,772 |
|
4.97 |
| 7 |
20,111 |
22,336 |
0.96 |
628,783 |
94,105 |
|
4.68 |
| 8 |
20,094 |
22,336 |
0.88 |
572,703 |
100,663 |
|
5.01 |
| 9 |
20,162 |
22,336 |
0.83 |
539,601 |
95,152 |
|
4.72 |
| 10 |
20,042 |
22,336 |
0.86 |
560,609 |
83,686 |
|
4.18 |
| 11 |
20,116 |
22,336 |
0.92 |
599,328 |
72,437 |
|
3.60 |
| 12 |
20,093 |
22,336 |
1.00 |
656,036 |
59,626 |
|
2.97 |
| 13 |
20,111 |
22,336 |
1.06 |
692,909 |
34,269 |
|
1.70 |
| 14 |
20,065 |
22,336 |
1.09 |
716,006 |
24,189 |
|
1.21 |
| 15 |
20,142 |
22,336 |
1.18 |
771,320 |
15,359 |
|
0.76 |
| 16 |
20,070 |
21,561 |
1.28 |
812,270 |
8,433 |
|
0.42 |
| 17 |
3,456 |
3,456 |
1.39 |
141,696 |
661 |
|
0.19 |
| Total
|
347,461 |
347,461 |
1.02 |
10,384,721 |
1,086,766 |
66,056
|
3.32 |
Note: Low-grade ore is stockpiled during PP and in years
1- 3. Starting from year 4, an average of 2.2 Mt will be taken from the
low- grade stockpile and be milled.
Conventional open pit mining methods will be used to mine the Detour
Lake deposit utilizing a fleet size of up to 36 haul trucks (300 tonne
class), 2 electric cable shovels (34 m3), 3 electric-hydraulic shovels
(28 m3), 6 drills and various ancillary equipment to support the mining
operation. Approximately 28 million tonnes of lower grade ore will be
stockpiled during the first three years of operation and be processed
throughout the mine life. The open pit design incorporates 10 metre high
benches with a 35 metre wide main haul road at a maximum grade of 10%.
Metallurgy, Processing, and Infrastructure
The feasibility study contemplates using a conventional gravity,
cyanidation and carbon-in-pulp processing facility initially operating
at 55,000 tpd and ramping-up to 61,000 tpd. The assumed availability of
the plant is 92% for the first few years and ramping up to 94% in year
4. The grinding circuit consists of two parallel lines, each having one
twin pinion semi-autogenous (SAG) mill (36'X20') and one twin pinion
ball mill (26'X40.5').These four mills are all equipped with a pair of
7,500 kW variable speed drive motors.
The comminution circuit is designed at 75th percentile ore hardness and
is easily expandable. The crushing capacity is now enhanced from the
previous design (pre-feasibility study) with inclusion of a larger
gyratory crusher (60"X113" HD equipped with 1,000 kW) and the addition
of a secondary crushing circuit (2X750 kW crushers). This system allows
for a higher throughput of fine feed (75 mm) to the SAG mill, providing
efficiency and stability. In addition, this system is complemented with
additional crushing capacity in the pebble crushing circuit.
The target grind for years 1 to 3 is set at 95 microns as the tonnage is
to be kept at a reduced rate of 55,000 tpd. In year 4, the circuit will
be taken to 61,000 tpd by adjusting the grind target to 105 microns and
by completing a small expansion of the leach circuit.
The metallurgy of the Detour Lake deposit is simple as the gold is
mainly native and easily liberated allowing excellent recovery and for a
relatively coarse grind. The gravity circuit is expected to recover
approximately 30% to 40% of the gold. The remaining gold in ore is sent
to cyanidation followed by carbon in pulp (CIP) gold recovery. After
carbon stripping, the gold will be processed through electro-winning
cells prior to gold pour. The overall gold recovery is estimated at
91.2% with silver recovery estimated at 48%.
The cyanide solution is recycled to the head of the circuit to reduce
operating cost and environmental impact. The remaining stream is
detoxified through an Air/SO2 system before tailings deposition. The
Company will initially use the same location for the tailings
impoundment facility as the former operation. The design will be
expanded to a second and then a third cell downstream containment system
with capacity for approximately 350 million tonnes. The surface
facilities include a permanent camp, office building, and other
supporting infrastructure.
The Company will construct a 230 kV transmission line for the power
usage at the mine site using the expansion of the previous 135 km right
of way connection to the power grid at Island Falls and widen the
existing 45 km transmission line from Island falls to Pinard Transformer
Station. The power consumption for the processing plant is estimated at
31 kW h/tonne.
The plant design criteria were developed by BBA from testwork conducted
mainly at SGS Lakefield.
Operating Costs
Operating cash costs over the life of the project are projected to
average $437/oz (after silver credits). Total operating costs (after
royalty and silver credits) are anticipated to average $454/oz.
| |
$/t milled |
$/t mined |
$/oz |
| Average mining costs |
6.82 |
1.58 |
228 |
| Processing cost |
5.21 |
- |
175 |
| General and administration |
1.12 |
- |
37 |
| Refining charges |
0.03 |
|
1 |
| Silver credit |
(0.13) |
- |
(4) |
| Operating costs (LOM) |
13.05 |
- |
437 |
| Royalty (2%) |
- |
- |
17 |
| Total operating costs (LOM) |
- |
- |
454 |
Capital Costs Estimates
The feasibility study is based on capital pricing as of the first
quarter of 2010. The level of accuracy of the capital costs estimates is
within ±15% for feasibility studies.
The pre-production capital costs are estimated at $992 million and
exclude approximately $83.3 million in 2010 sunk costs that will be
funded from existing cash resources. Sustaining capital expenditures
over the operation's mine life is estimated at $580 million, of which
nearly 65% is in the first four years (mainly for mining fleet and
tailings expansion). Provisions for mine closure funding amount to $56
million, of which $10.5 million is included in the pre-production
capital.
The current cash position of the Company is approximately Cdn$308
million, which is sufficient to advance the development of the project
through mid-2011.
The Company has entered into commitments for a portion of the long-lead
items (SAG and ball mills, gyratory crusher, and drive systems)
totalling approximately Cdn$75 million. The mining costs estimate for
the truck fleet and mobile equipment is based on pricing received from
the tendering process during this quarter.
The cost breakdown for pre-production capital expenditures, assuming an
owner operator scenario, is shown below.
| |
Estimate ±15%
($ M) |
| Description |
Pre-production
Capital |
Sustaining
Capital |
| Mining |
147 |
274 |
| Process Plant |
398 |
27 |
| Tailings and Water Management |
38 |
270 |
| Infrastructure and
Powerline |
133 |
9 |
| Total direct costs |
716 |
580 |
| Other Indirect |
141 |
- |
| EPCM |
55 |
- |
| Contingency (10%) |
80 |
- |
| Total indirect costs
|
276 |
- |
| Total |
992 |
580 |
| Mine Closure |
10 |
46 |
Financial Analysis
The financial analysis for the Base Case (at a gold price of $850/oz),
which evaluates an owner's operation, indicates a pre-tax NPV at a 5%
discount rate of $1.03 billion with an IRR of 14.4% (unleveraged)
and a payback period of 5.9 years. On an after-tax basis, the NPV at a
5% discount rate is $691 million with an IRR of 12.4%. The project is
expected to generate $4.1 billion in pre-tax operating cash flow
at $850/oz gold price.
The table below outlines key sensitivities for the pre-tax NPV and IRR
of the Detour Lake project.
| Discount rate |
Undiscounted |
Base Case
5% |
10% |
|
| NPV pre-tax($ M) |
2,479 |
1,026 |
325 |
|
| |
| Gold price ($/oz) |
$700 |
$850 |
$1,000 |
$1,150 |
| NPV pre-tax @ 5% ($ M) |
111 |
1,026 |
1,940 |
2,855 |
| IRR (%) |
6.1 |
14.4 |
21.8 |
28.6 |
| |
| Capex change |
+10% |
- |
-10% |
|
| NPV pre-tax @ 5% ($ M) |
887 |
1,026 |
1,164 |
|
| IRR (%) |
12.6 |
14.4 |
16.6 |
|
| |
| Operating cost
change |
+10% |
- |
-10% |
|
| NPV pre-tax @ 5% ($ M) |
746 |
1,026 |
1,305 |
|
| IRR (%) |
12.0 |
14.4 |
16.8 |
|
Moving Forward -- Additional Opportunities
A successful independent third party review of the feasibility study was
completed last month. In addition, the independent engineering review
by our bank advisor Barclays Capital is currently underway.
Subject to a production decision, the Company anticipates starting
construction of the mine by late 2010, after obtaining provincial
permits and completing Impact Benefit Agreements with the Aboriginal
communities. The main construction period is estimated at 27 months
followed by plant commissioning estimated to commence in the first
quarter of 2013.
The Company has recognized additional opportunities to improve the
project economics:- 90,000 metres of drilling in 2010 immediately west of the open pit
could generate an increase in mineral resources/reserves for year-end
2010;
- Room has been allocated in the infrastructure design to
accommodate a third grinding line for potential expansion (i.e. at gold
price > $1,000/oz);
- Projected head grade improvement can be achieved with
additional gravity leach tests. An initial leach test on 24 drill core
composites representing a block of approximately 700,000 tonnes resulted
in a head grade of 1.78 g/t Au compared to the fire assay average of
1.68 g/t Au (uncapped) and 0.78 g/t Au (capped). Three other similar
leach tests are currently underway. Subject to positive results in all
tests, the capping strategy (currently considered to be conservative)
will be reviewed for the year-end estimates.
- Dilution work to reduce the current one from 17.3% down to
approximately 15%
- Low grade material (0.35-0.5 g/t gold) (equivalent to
approximately 1.5 million ounces) could potentially be added to the
mineral reserves (i.e. at gold price > $1,000/oz)
Qualified
Persons for Feasibility Study
The feasibility study was prepared by leading independent industry
consultants, all Qualified Persons (QP) under National Instrument
43-101, with the collaboration of the Detour Gold technical group. The
QPs have reviewed and approved the content of this news release. The
following consultants participated in the study:- BBA Inc., under the direction of André Allaire, Eng., Director
Mining and Metals (overall report preparation, mineral processing and
infrastructures, capital and operating cost estimates and overall
financial analysis) and Patrice Live, Eng., Mining Manager (mineral
reserves, open-pit optimization and engineered pit design, mine
planning, and mining capital and operating cost estimates)
- SGS Canada Inc., under the direction of Michel Dagbert, Eng.,
Senior Geostatistician (mineral resources) and André Laferrière, Senior
Geologist, P. Geo. (geology, quality assurance/quality control, and data
verification)
- AMEC Earth & Environmental, a Division of AMEC Americas
Limited, under the direction of Sheila Daniel, P.Geo., Head
Environmental Management, Associate Geoscientist (environment,
permitting, closure plan and costing, and geochemistry); Derek Li,
P.Eng., Senior Geotechnical Engineer (tailings, water and other mine
wastes management, and associated capital and operating quantity
take-off estimates)
A NI 43-101 compliant Technical Report will
be filed on the Company's website and on SEDAR within 45 days.
Conference Call
Detour Gold will hold a conference call today at 10:00 AM EST where
senior management will discuss the feasibility study and respond to
questions from analysts and investors. To join the call:- In Canada and the United States dial toll free 1-800-769-8320
- International 416-695-6616
- To listen to the audio webcast online, go to: http://www.detourgold.com and click
on "Conference Call Audio Webcast May 25, 2010"
The conference
call will be recorded and playback of the call will be available after
the event by dialing toll free in Canada and the United States
1-800-408-3053, or internationally 416-695-5800, pass code 3772571
(available up to June 30, 2010).
For further information, please contact:
| Gerald
Panneton, President and CEO | Laurie Gaborit,
Director Investor Relations |
| Tel: (416) 304.0800 | Tel: (416) 304.0581 |
Detour Gold Corporation, Royal Bank Plaza, North Tower, 200 Bay Street,
Suite 2040, Toronto, Ontario M5J 2J1
Forward-Looking Information
This press release contains certain forward-looking information as
defined in applicable securities laws (referred to herein as
"forward-looking statements"). Specifically, this press release
contains forward-looking statements regarding the results and
projections contained in the feasibility study of the Detour Lake gold
project, including the reserve and resource estimates, ore grade, the
expected mine life, anticipated gold production, gold recovery, the
commencement of construction, cash operating costs and other costs, the
projected internal rate of return, capital costs, sensitivity to metal
prices and other sensitivities, the projected payback period, the
availability of capital for development, the financial analysis and
expected drilling activities. Forward-looking statements involve known
and unknown risks, uncertainties and other factors which are beyond
Detour Gold's ability to predict or control and may cause Detour Gold's
actual results, performance or achievements to be materially different
from any of its future results, performance or achievements expressed or
implied by forward-looking statements. These risks, uncertainties and
other factors include, but are not limited to, gold price volatility,
changes in debt and equity markets, the uncertainties involved in
interpreting geological data, increases in costs, environmental
compliance and changes in environmental legislation and regulation,
interest rate and exchange rate fluctuations, general economic
conditions and other risks involved in the gold exploration and
development industry, as well as those risk factors discussed in the
section entitled "Description of Business - Risk Factors" in Detour
Gold's 2009 annual information form. Such forward-looking statements are
also based on a number of assumptions which may prove to be incorrect,
including, but not limited to, assumptions about the following: the
availability of financing for exploration and development activities;
the estimated timeline for the development of the Detour Lake gold
project; the supply and demand for, and the level and volatility of the
price of, gold; the accuracy of reserve and resource estimates and the
assumptions on which the reserve and resource estimates are based; the
receipt of necessary permits; market competition; ongoing relations with
employees and impacted communities; and general business and economic
conditions. In addition, the feasibility study uses an estimate of gold
price based on an approximate three-year average. The operating and
capital costs in the feasibility study were developed to be reasonable
estimates within industry benchmarks. There is no certainty that the
results of the feasibility study will ever be realized. Should one or
more of the risks or uncertainties involved in forward-looking
statements relating to the feasibility study materialize, or should the
assumptions underlying the feasibility study prove incorrect, actual
results of the feasibility study may vary materially from those
anticipated, believed, estimated or expected. Accordingly, readers
should not place undue reliance on forward-looking statements. Detour
Gold undertakes no obligation to update publicly or otherwise revise any
forward-looking statements contained herein whether as a result of new
information or future events or otherwise, except as may be required by
law.
Information Concerning Estimates of Mineral Reserves and Resources
The mineral reserve and resource estimates reported in this press
release were prepared in accordance with Canadian National Instrument
43-101Standards of Disclosure for Mineral Projects ("NI 43-101"), as
required by Canadian securities regulatory authorities. For United
States reporting purposes, the United States Securities and Exchange
Commission ("SEC") applies different standards in order to classify
mineralization as a reserve. In particular, while the terms "measured,"
"indicated" and "inferred" mineral resources are required pursuant to
NI 43-101, the SEC does not recognize such terms. Canadian standards
differ significantly from the requirements of the SEC. Investors are
cautioned not to assume that any part or all of the mineral deposits in
these categories constitute or will ever be converted into reserves. In
addition, "inferred" mineral resources have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any
part of an inferred mineral resource will ever be upgraded to a higher
category. Under Canadian securities laws, issuers must not make any
disclosure of results of an economic analysis that includes inferred
mineral resources, except in rare cases.
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