TSXV:FIL

Resource Estimate

The Mineral Resource estimate as of the effective date of July 1, 2017


Table 1: Total Resource
Zone Cutoff
Category Tonnes
(millions)
Cu
(%)
Au
(g/t)
Ag
(g/t)
lbs Cu
(millions)
Ounces Au
(thousands)
Ounces Ag
(thousands)
AuOx 0.20 g/t Au Indicated
Inferred
52.5
31.7
0.05
0.08
0.42
0.36
3.0
2.4
59
57
710
368
5,060
2,470
CuAuOx 0.15 % CuEq Indicated
Inferred
175.3
94.7
0.42
0.30
0.29
0.30
2.8
2.3
1,636
624
1,630
924
15,330
6,970
Ag 20 g/t Ag Indicated
Inferred
36.5
17.0
0.52
0.40
0.41
0.43
69.5
78.9
421
149
485
235
81,600
43,130
Sulphide 0.30 % CuEq Indicated
Inferred
108.6
95.5
0.28
0.29
0.32
0.32
2.2
2.4
658
612
1,129
983
7,690
7420
Total Indicated
Inferred
372.9
238.9
0.34
0.27
0.33
0.33
9.2
7.8
2,774
1,442
3,954
2,510
109,880
59,990
  1. CuAuOx copper equivalent (CuEq) assumes metallurgical recoveries of 82% for copper, 55% for gold and 71% for silver based on preliminary metallurgical testwork, and metal prices of US$3/lb copper, US$1300/oz gold, US$20/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0084+Au*0.4239;
  2. Sulphide copper equivalent (CuEq) assumes metallurgical recoveries of 84% for copper, 70% for gold and 77% for silver based on similar deposits, as no metallurgical testwork has been done the Sulphide mineralization, and metal prices of US$3/lb copper, US$1300/oz gold, US$20/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0089+Au*0.5266
  3. The Qualified Person for the resource estimate is James N. Gray, P.Geo. of Advantage Geoservices Ltd.;
  4. All figures are rounded to reflect the relative accuracy of the estimate;
  5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability;
  6. The resource was constrained by a Whittle® pit shell using the following parameters: Cu $3/lb, Ag $20/oz, Au $1300/oz, slope of 45°, a mining cost of $2.50/t and an average process cost of $13.26/t.


Table 2: Gold Oxide
Zone Cutoff
Category Tonnes
(millions)
Cu
(%)
Au
(g/t)
Ag
(g/t)
lbs Cu
(millions)
Ounces Au
(thousands)
Ounces Ag
(thousands)
AuOx
0.30 g/t Au Indicated
Inferred
79.2
43.8
0.05
0.07
0.33
0.30
2.6
2.3
82
65
832
423
6,600
3,170
0.20 g/t Au Indicated
Inferred
52.5
31.7
0.05
0.08
0.42
0.36
3.0
2.4
59
57
710
368
5,060
2,470
0.40 g/t Au Indicated
Inferred
20.6
9.8
0.05
0.08
0.63
0.53
3.5
3.2
22
16
418
166
2,340
990
0.50 g/t Au Indicated
Inferred
11.9
4.5
0.05
0.08
0.77
0.63
3.7
3.5
13
8
295
91
1,400
510
Table 3: Copper Gold Oxide
Zone Cutoff
Category Tonnes
(millions)
Cu
(%)
Au
(g/t)
Ag
(g/t)
lbs Cu
(millions)
Ounces Au
(thousands)
Ounces Ag
(thousands)
CuAuOx
0.15 % CuEq Indicated
Inferred
175.3
94.7
0.42
0.30
0.29
0.30
2.8
2.3
1,636
624
1,630
924
15,530
6,970
0.30 % CuEq Indicated
Inferred
154.3
73.8
0.46
0.35
0.30
0.33
2.9
2.6
1,563
562
1,497
780
14,590
6,070
0.50 % CuEq Indicated
Inferred
79.4
29.6
0.64
0.49
0.33
0.38
4.0
3.4
1,127
321
848
362
10,090
3,220
0.70 % CuEQ Indicated
Inferred
36.5
9.1
0.91
0.69
0.34
0.45
5.0
4.5
735
139
395
133
5,840
1,310
Table 4: Silver Zone
Zone Cutoff
Category Tonnes
(millions)
Cu
(%)
Au
(g/t)
Ag
(g/t)
lbs Cu
(millions)
Ounces Au
(thousands)
Ounces Ag
(thousands)
Ag
20 g/t Ag Indicated
Inferred
36.5
17.0
0.52
0.40
0.41
0.43
69.5
78.9
421
149
485
235
81,600
43,130
50 g/t Ag Indicated
Inferred
19.4
9.5
0.48
0.41
0.41
0.44
101.7
113.4
205
87
256
134
63,430
34,790
60 g/t Ag Indicated
Inferred
15.8
7.8
0.48
0.42
0.40
0.44
112.3
126.6
166
71
205
110
57,180
31,680
80 g/t Ag Indicated
Inferred
10.4
5.5
0.48
0.43
0.41
0.45
135.3
150.8
108
52
135
79
45,050
26,610
Table 5: Sulphide Mineralization
Zone Cutoff
Category Tonnes
(millions)
Cu
(%)
Au
(g/t)
Ag
(g/t)
lbs Cu
(millions)
Ounces Au
(thousands)
Ounces Ag
(thousands)
Sulphide
0.30 % CuEq Indicated
Inferred
108.96
95.5
0.28
0.29
0.32
0.32
2.2
2.4
658
612
1,129
983
7,690
7,42
0
0.40 CuEq Indicated
Inferred
79.3
74.7
0.30
0.32
0.35
0.34
2.4
2.5
524
520
888
810
6,150
6,080
0.50 % CuEq Indicated
Inferred
35.6
37.2
0.34
0.37
0.40
0.37
2.7
2.9
269
301
461
437
3,140
3,500
0.60 % CuEq Indicated
Inferred
10.6
12.1
0.40
0.44
0.47
0.40
3.2
3.8
94
117
162
157
1,100
1,480

ESTIMATION METHODS

The resource estimate was completed by James N. Gray, P.Geo. of Advantage Geoservices Ltd., an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves, adopted by CIM Council, as amended. Estimation methods are summarized below. Further details of the estimation methods and procedures will be available in a NI 43-101 Technical Report which will be filed on SEDAR (www.sedar.com), within 45 days from the date of this release.

The resource estimate is controlled by a geologic model based on three-dimensional interpretation of drill results. An additional 37 holes have been included in this resource update compared to the 2015 Inferred Mineral Resource. In total, 144 holes (18 core and 126 RC) have been utilized in the resource estimation. Copper, silver, and gold assays were composited to a constant length of two metres. Outliers to the composite distributions were controlled by high-grade capping. Grades for the three elements were estimated by ordinary kriging using Gemcom® software, into 15 x 15 x 10m blocks. Average rock densities were applied based on the geologic model. A total of 878 density measurements have been made on core samples. Bulk density for the deposit averages 2.31 tonnes/m3.

Contiguous blocks were assigned as Inferred Mineral Resource where they are nominally: within 50m of a drillhole and/or have sample data in at least three octants of a 150m spherical search. Indicated blocks are greater than 25m inside the classified volume and estimated by at least three holes, and within 65m of the closest hole or have samples in at least five octants of a 150m spherical search.

Reasonable prospects of eventual economic extraction were established by the optimization of a Whittle® pit shell using the following parameters: Cu $3/lb, Ag $20/oz, Au $1300/oz, average recoveries of: 75% Cu, 68% Au and 82% Ag, slope of 45°, mining cost of $2.50/t and an average process cost (including G&A) of $13.26/t. All material included in the Mineral Resource Estimate is within the optimized pit shell. Reported at the cutoff grades by zone as presented in Table 1, the optimized pit shell results in a strip ratio of 1:1.

QUALIFIED PERSONS 

Mr. James N. Gray, P.Geo. of Advantage Geoservices Ltd., is an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and is an independent consultant to the Company. Mr. Gray prepared the Mineral Resource Estimate contained herein and has reviewed and approved the technical information pertaining to it contained in this news release. 

Mr. Bob Carmichael, B.A.Sc, P.Eng., is the Qualified Person as defined by National Instrument 43-101. Mr. Carmichael is Vice President, Exploration for the Company and has reviewed and verified that the technical disclosure contained in this news release is accurate.