Yellowknife Gold Project
Prefeasibilty Study

Preliminary Feasibility Study

NI 43-101, July 22, 2010

The Preliminary Feasibility Study (PFS) considers all aspects of the project including mining, processing, and related infrastructure. Gold mineralization from the Ormsby, Nicholas Lake Main and Clan Lake Main Zones are considered in this study. Diluted Mineral Reserves calculated for the PFS total 7,560,000 tonnes grading 3.34 grams per tonne to yield 811,200 of recovered Troy Ounces of gold. The Bruce Lake and Goodwin Lake Vad Zones along with all inferred resources are excluded from the economic model.

A combination of open pit mining at the Ormsby and Clan Lake Main Zones and underground mining at Nicholas Lake Main and Ormsby Zones is contemplated. The underground potential at Clan Lake is not considered as the deposit is in an early stage of assessment and its full lateral extent has not been established. Potential for resource expansion occurs in all of the zones to depth, as well as along strike at the Clan Lake Main and Goodwin Lake Vad Zones. Additional gold zones at Clan Lake contribute to the overall resource potential of the project.

The base case considers a 3,000 tonne per day operation producing on average 108,000 ounces of gold per year for 7.5 years (total 811,200 ounces) at an average operating cost of US$541 per recovered ounce of gold. Initial capital costs are estimated to be CAD$174 million with a contingency of CAD$20 million. Payback of the initial capital cost is 5 years. At a base case of US$950 per ounce of gold, and a 5% discount rate the project has an IRR of 16.1% and a NPV of CAD$71.3 million before taxes. The $US/$CAN rate is assumed to be 0.93.


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Preliminary Feasibility Study of the Yellowknife Gold Project describes the preliminary economics of the Yellowknife Gold Project which complies with NI 43-101 standards The PFS is based on a number of assumptions which are set out in the Report. N. E. Fier, P.Eng., J. Fox, P.Eng., F. Wright, P.Eng., J. Kaehne, Dipl. T., L. Reggin, P. Geo., J. Collins, P. Eng. are QP within the meaning of NI 43-101.

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Last updated November 12, 2011