Reserves & Resources

Blackwater Mine

• 8 million ounces of P&P gold reserves
• 62.3 million ounces of P&P silver reserves
• 11.7 million ounces of M&I gold resources (including reserves)
• 122.4 million ounces of M&I silver resources (including reserves)

Mineral Resource Estimate

The Mineral Resource Estimate for the Blackwater Project is effectively unchanged from the estimate incorporated into the 2020 PFS. The Mineral Resource is estimated from a drill hole database containing 1,002 drill holes and 288,738 assay intervals. Three domains were generated based on the major north-south fault and changes in orientation of the mineralization.  The block model has a 10 x 10 x 10 m selective mining unit, with interpolation of gold done by multiple indicator kriging (“MIK”) and interpolation of silver using ordinary kriging (“OK”).  The interpolations were limited by domain boundaries and were clipped to the overburden surface. Blocks were assigned a preliminary classification based on variography and drill hole spacing by domain, with Measured and Indicated confidence classifications then adjusted for block continuity.

The base case cut-off grade, within the "reasonable prospects of eventual economic extraction” pit shell is 0.20 g/t gold equivalent (“AuEq”), where the AuEq is calculated as AuEq = Au g/t + (Ag g/t x 0.006). At the base case prices, exchange rate and smelter terms a 0.20g/t AuEq cut-off covers the processing costs of C$9.00/t processed. At a 0.20 g/t AuEq cut-off, the total Measured and Indicated Mineral Resource is estimated at 597 Mt at 0.65 g/t AuEq, 0.61 g/t Au, and 6.4 g/t Ag for a total of 12.4 million AuEq ounces. Of the total Measured and Indicated Mineral Resources, 75% are in the Measured category. Table 6 summarizes the Mineral Resource estimate and includes sensitivity cases to show the estimate sensitivity to changes in cut-off grade.

Mineral Resource Table Showing Sensitivity to Cut-off Grades (base case highlighted)

Notes: 

1. The Mineral Resource estimate was prepared by Sue Bird, P.Eng., the Qualified Person for the estimate and an employee of MMTS. The estimate has an effective date of May 5, 2020.
2. Mineral Resources are reported using the 2014 CIM Definition Standards and are estimated in accordance with the 2019 CIM Best Practices Guidelines.   
3. Mineral Resources are reported inclusive of Mineral Reserves.
4. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
5. The Mineral Resource has been confined by a conceptual pit shell to meet “reasonable prospects of eventual economic extraction” using the following assumptions: the 143% price case with a base case of US$1,400/oz. Au and US$15/oz Ag at a currency exchange rate of 0.75 US$ per C$; 99.9% payable Au; 95.0% payable Ag; US$8.50/oz Au and US$0.25/oz Ag offsite costs (refining, transport and insurance); a 1.5% NSR royalty; and uses a 93% metallurgical recovery for gold and 55% recovery for silver.
6. The AuEq values were calculated using US$1,400/oz Au, US$15/oz Ag, a gold metallurgical recovery of 93%, silver metallurgical recovery of 55%, and mining smelter terms for the following equation: AuEq = Au g/t + (Ag g/t x 0.006).
7. The specific gravity of the deposit has been determined by lithology as being between 2.6 and 2.74.
8. Numbers may not add due to rounding.

There are no other known factors or issues that materially affect the Mineral Resource estimate other than normal risks faced by mining projects in the province in terms of environmental, permitting, taxation, socio-economic, marketing, and political factors. Additional risk factors are listed in the “Cautionary Note Regarding Forward-Looking Information” section at the end of this news release.

Mineral Reserve Estimate

The Mineral Reserve Estimate for the Blackwater Project is effectively unchanged from the estimate incorporated into the 2020 PFS. The Mineral Reserves for Blackwater are a subset of the Measured and Indicated Mineral Resources, described above.  Proven and Probable Mineral Reserves are modified from Measured and Indicated Mineral Resources and are summarized in Table 7.  Inferred Mineral Resources are set to waste. 

Mineral Reserve Estimate

Notes:

1. The Mineral Reserve estimates were prepared by Marc Schulte, P.Eng., an MMTS employee, and have an effective date of September 10, 2021.
2. Mineral Reserves are reported using the 2014 CIM Definition Standards and are estimated in accordance with the 2019 CIM Best Practices Guidelines      
3. Mineral Reserves are based on the FS LOM plan.
4. Mineral Reserves are mined tonnes and grade; the reference point is the mill feed at the primary crusher and includes consideration for operational modifying factors such as loss and dilution.
5. Mineral Reserves are reported at an NSR cut-off of C$13.00/t.  The cut-off grade covers processing costs of C$9.00/t, general and administrative (“G&A”) costs of C$2.50/t and stockpile rehandle costs of C$1.50/t.
6. Cut-off grade assumes US$1,400/oz. Au and US$15/oz Ag at a currency exchange rate of 0.75 US$ per C$; 99.9% payable gold; 95.0% payable silver; US$8.50/oz Au and US$0.25/oz Ag offsite costs (refining, transport and insurance); a 1.5% NSR royalty; and uses a 93% metallurgical recovery for gold and 55% recovery for silver.
7. The AuEq values were calculated using commodity prices of US$1,400/oz Au, US$15/oz Ag, a gold metallurgical recovery of 93% silver metallurgical recovery of 55%, and mining smelter terms for the following equation: AuEq = Au g/t + (Ag g/t x 0.006).
8. Numbers have been rounded as required by reporting guidelines.

Mineral Reserves are based on the Feasibility Study engineering and economic analysis for the Blackwater Project.  Specific risk to the Mineral Reserves include changes to the following factors: Metal Prices, Foreign Exchange Rates, Interpretations of mineralization geometry and continuity of mineralization zones, geotechnical and hydrogeological assumptions, ability of the mining operation to meet the annual production rate, operating cost assumptions, mining and process plant recoveries, the ability to meet and maintain permitting and environmental license conditions and the ability to maintain the social licence to operate.

There are no other known factors or issues that materially affect the Mineral Reserve estimate other than which is disclosed above and normal risks faced by mining projects in the province in terms of environmental, permitting, taxation, socio-economic, marketing, and political factors and additional risk factors as listed in the “Cautionary Note Regarding Forward-Looking Information” section below.