Wellgreen Project Preliminary Economic Assessment ... - OTCIQ.com

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Report to: WELLGREEN PROJECT PRELIMINARY ECONOMIC ASSESSMENT, YUKON, CANADA EFFECTIVE DATE: AUGUST 1, 2012 Prepared by Andrew Carter, Eur. Ing., C.Eng., MIMMM, MSAIMM, SME Pacifico Corpuz, P.Eng. Philip Bridson, P.Eng. Todd McCracken, P.Geo. WS/jc Suite 800, 555 West Hastings Street, Vancouver, British Columbia V6B 1M1 Phone: 604-408-3788 Fax: 604-408-3722 1193460500-REP-R0001-02
TABLE OF CONTENTS 1.0 SUMMARY ....................................................................................................................... 1-1 1.1 INTRODUCTION .................................................................................................................. 1-1 1.2 PROPERTY DESCRIPTION ................................................................................................... 1-3 1.3 HISTORY ............................................................................................................................ 1-4 1.4 GEOLOGY .......................................................................................................................... 1-4 1.5 MINERAL RESOURCE ESTIMATE .......................................................................................... 1-5 1.6 MINING METHODS .............................................................................................................. 1-7 1.7 MINERAL PROCESSING AND METALLURGICAL TESTING ........................................................ 1-7 1.7.1 MINERAL PROCESSING ...................................................................................... 1-7 1.7.2 METALLURGICAL TESTING ................................................................................. 1-8 1.8 INFRASTRUCTURE .............................................................................................................. 1-8 1.9 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT .................... 1-10 1.9.1 ENVIRONMENTAL CONSIDERATIONS ................................................................. 1-10 1.9.2 SOCIAL CONSIDERATIONS ............................................................................... 1-10 1.10 CAPITAL AND OPERATING COSTS ..................................................................................... 1-10 1.10.1 CAPITAL COST ................................................................................................ 1-10 1.10.2 OPERATING COST ........................................................................................... 1-11 1.11 ECONOMIC ANALYSIS ....................................................................................................... 1-12 1.12 SENSITIVITY ANALYSIS ..................................................................................................... 1-14 1.13 PROJECT DEVELOPMENT PLAN ......................................................................................... 1-16 1.14 OPPORTUNITIES AND RECOMMENDATIONS ........................................................................ 1-18 2.0 INTRODUCTION .............................................................................................................. 2-1 3.0 RELIANCE ON OTHER EXPERTS .................................................................................. 3-1 4.0 PROPERTY DESCRIPTION AND LOCATION ................................................................ 4-1 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ............................................................................................................. 5-1 5.1 SITE TOPOGRAPHY, ELEVATION, AND VEGETATION ............................................................. 5-1 5.2 ACCESS ............................................................................................................................. 5-1 5.3 CLIMATE ............................................................................................................................ 5-2 5.4 INFRASTRUCTURE .............................................................................................................. 5-2 6.0 HISTORY .......................................................................................................................... 6-1 6.1 CORONATION MINERALS DRILLING ...................................................................................... 6-4 6.2 HISTORICAL SAMPLE PREPARATION AND ANALYSES PROGRAMS .......................................... 6-5 6.2.1 HISTORICAL PROGRAMS .................................................................................... 6-5 6.2.2 CORONATION MINERALS’ PROGRAMS ................................................................ 6-5 i 1193460500-REP-R0001-02
Page 1: Report to: Wellgreen Project Prelim
Page 5 and 6: 14.1.8 MINERAL RESOURCE TABULATION
Page 7 and 8: 26.1.2 PHASE 2 - QUILL CREEK ULTRAM
Page 9 and 10: Table 19.2 Palladium Demand and Sup
Page 11 and 12: Figure 19.3 London Metals Exchange
Page 13 and 14: litres per minute .................
Page 15 and 16: International All-North Resources L
Page 17 and 18: 1.0 S UMMARY 1.1 I NTRODUCTION Tetr
Page 19 and 20: This PEA has been prepared by Tetra
Page 21 and 22: Numerous operators have worked on t
Page 23 and 24: 1.6 M INING M ETHODS The Project is
Page 25 and 26: Figure 1.2 Wellgreen Project Overal
Page 27 and 28: Table 1.6 Capital Cost Summary (US$
Page 29 and 30: The following financial results wer
Page 31 and 32: Figure 1.3 illustrates that the Pro
Page 33 and 34: Figure 1.5 Project Execution Plan P
Page 35 and 36: 2.0 INTRODUCTION Tetra Tech was com
Page 37 and 38: 3.0 RELIANCE ON OTHER EXPERTS Tetra
Page 39 and 40: Figure 4.1 Location Map Prophecy Pl
Page 41 and 42: All work undertaken on the surface
Page 43 and 44: Figure 4.3 Wellgreen Surface Lease
Page 45 and 46: Other than those liabilities set fo
Page 47 and 48: 5.3 C LIMATE The climate is alpine,
Page 49 and 50: Year Company Activities 1970 Hudson
Page 51 and 52: Year Company Activities 2008 Corona
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6.2.3 NORTHERN P LATINUM 2009 PROGR
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Figure 7.1 Regional Geology Map Pro
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Figure 7.3 Property Geology Prophec
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Longitudinal faults and/or shears a
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Figure 7.4 Wellgreen Plan View Prop
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7.2.3 NORTH ZONE The North Zone is
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Table 7.3 PGE-Bearing Minerals in t
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Gabbroid-associated Nickel, Copper,
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10.0 DRILLING 10.1 H ISTORICAL D RI
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Figure 10.1 Prophecy Platinum Drill
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Table 10.4 Prophecy Platinum 2011 D
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• The course rejects returned fro
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Figure 10.4 Core Storage Facility P
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11.0 SAMPLE PREPARATION, ANALYSES,
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12.0 DATA VERIFICATION Tetra Tech
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Table 12.2 Check Assays Prophecy Pl
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13.0 MINERAL PROCESSING AND METALLU
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An elemental analysis of typical co
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Minerals Peridotite Composite 1 Min
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Ni Deposits” shows that the grade
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13.3 SGS V ANCOUVER - J UNE 2012 A
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14.0 MINERAL RESOURCE ESTIMATES 14.
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Table 14.3 summarizes the grade cap
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The NiEq value was assigned to all
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Table 14.7 Wellgreen Variogram Summ
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Table 14.9 Estimation Criteria Zone
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Table 14.10 Search Parameters Zone
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NiEq Cut-off Tonnes NiEq (%) Ni (%)
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Figure 14.2 Wellgreen Platinum, Pal
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Figure 14.4 Wellgreen Platinum, Pal
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Figure 14.6 Wellgreen Pit Resource
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14.1.9 VALIDATION The Wellgreen mod
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Figure 14.9 East Zone Cross Section
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Figure 14.10 Wellgreen Nickel Secti
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Figure 14.14 Wellgreen Platinum Sec
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Figure 14.18 Wellgreen Cobalt Eleva
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14.2 P REVIOUS E STIMATES Table 14.
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15.0 MINERAL RESERVE ESTIMATES A mi
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The selected base case pit contains
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OVERALL O PEN P IT SLOPE ANGLE Tetr
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Table 16.4 Pit Optimization Results
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The pit optimization process includ
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16.4 P RODUCTION S CHDULE Using Pit
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Year Waste (t) Total (t) Strip Rati
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Figure 16.5 Sequence of Development
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PHASE III During Phase III, the pit
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16.5.4 EXPLOSIVES A contractor will
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Table 16.9 Pit Design Criteria Item
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Equipment Fleet Size Units Crew Bus
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Figure 17.1 Overall Wellgreen Proce
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17.2 P ROCESS D ESIGN C RITERIA The
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17.5 P ROCESS P LANT The process pl
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Figure 18.1 Wellgreen Project Overa
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ultimate impoundment surface area o
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Table 19.2 Palladium Demand and Sup
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Figure 19.3 London Metals Exchange
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Figure 19.5 Nickel Demand (2009 to
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20.0 ENVIRONMENTAL STUDIES, PERMITT
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Tailings and mill concentrate sampl
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20.2.4 AQUATIC RESOURCES The Proper
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Figure 20.2 Wildlife Ranges-Woodlan
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Figure 20.4 Wildlife Ranges-Mountai
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Figure 20.6 Wildlife Ranges-Grizzly
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Figure 20.8 Aquatic Resources Proph
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20.3.2 LICENSING The Project will b
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(Transport Canada 2010). New constr
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Table 20.1 Applicable Legislation,
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20.4 M I NE C LOSURE AND R ECLAMATI
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Umbrella Final Agreement, the White
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20.5.2 NON-ABORIGINAL COMMUNITIES T
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21.0 C APITAL AND O PERATING C OSTS
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Mine Equipment 21.2.2 SUSTAINING 20
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Table 21.7 Contingency (US$ million
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• mobilization and demobilization
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Spares • safety including safety
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21.3 O PERATING C OSTS 21.3.1 GENER
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Table 21.11 Summary of Mining Opera
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Mine Operations Position No. Annual
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22.0 ECONOMIC A NALYSIS 22.1 I NTRO
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Table 22.3 Metal Production from th
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Table 22.4 Summary of Pre-tax Finan
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22.4 M ETAL P RICE S CENARIOS The L
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Figure 22.3 IRR Sensitivity Analysi
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Figure 23.1 Adjacent Properties Pro
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Figure 24.1 Wellgreen Project Execu
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25.2 M INING Table 25.1 Wellgreen R
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Table 25.4 Process Capital Cost Sum
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Table 26.1 Wellgreen Expansion Budg
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26.2 M INING sample selection shoul
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Trade-off studies should be complet
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• develop a negotiation strategy
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METALLURGY Davis, David and Bruwer,
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Yukon Environmental and Socio-econo
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TODD MCCRACKEN, P.GEO. I, Todd McCr
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PHILIP BRIDSON, P.ENG. I, Philip Br
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APPENDIX A L IST OF C LAIMS
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District GrantNumber RegType ClaimN
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Certificate of Analysis First issue
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Hf µg/g 0.5 4 / 20 Ho µg/g 0.2 3
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assess laboratory results, users ar
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Constituent Unit Mean Table 2 - Pro
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Table 3 - Informational Values Cons
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CERTIFYING OFFICER ________________
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An Investigation into METALLURGICAL
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Prophecy Platinum Corporation - Wel
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Sample Fraction Mass Size Distribut
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Mass (% Chalcopyrite) Prophecy Plat
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Mass (% Pentlandite) Prophecy Plati
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Mass (% Pyrrhotite) Prophecy Platin
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Pyrrhotite Recovery % Prophecy Plat
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Cu Rec, % Ni Rec, % Gng Rec, % 100
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Grade (%) Cu + Ni Grade (g/t) PGE G
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Prophecy, Wellgreen samples 50149-0
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OnLine LIMS SGS Lakefield Research
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Certificate of Analysis Work Order:
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Final : VC120756 Revision REVISED O
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Final : VC120590A Revision REVISED
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SGS Minerals Services Standard Bond
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Project No.: 50149-001 Test No.: MC
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SGS Minerals Services STANDARD BOND
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SGS Minerals Services Project No. D
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Test No.: F1 Project No.: 50149-001
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Test No.: Sep-F1 Project No.: 50149
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Test: F30 Project: 11603-005 50149-
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Test: F32 Project: 11603-005 50149-
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Test: F34 Project: 11603-005 50149-
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Test: F36 Project: 11603-005 50149-
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Test: F38 Project: 11603-005 50149-
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Test No.: HNI-F1 Project No.: 50149
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Test: HNI-F3 Project: 11603-005 501
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Test: HNI-F5 Project: 11603-005 501
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Test: LCT-1 Project: 50149-001 Date
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Test: LCT-1 Overall Stability Total
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Test: LCT-2 Metallurgical Predictio
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Test: LCT-4 Project: 50149-001 Date
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Test: LCT-4 Overall Stability Total
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Prophecy Platinum Corp 50149-101 MI
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Mineral Abundance (wt.%) 100 90 80
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Page 10 of 23
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CAVM-50149-101 MI7018-MAR12 Sample
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CAVM-50149-101 MI7018-MAR12 Sample
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erra Mineralogical Services Inc. Mi
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TerraMS-12JUL-001 Wellgreen - Pt-Pd
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APPENDIX D M INING
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LG Phase Revenue Factor (%) Mineral
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Figure 3 Overall Ultimate Pit Produ
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Table 3 Penetration and Drilling Ra
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HAULAGE General Hauling Conditions
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Year Mechanical Availability (%) Us
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