Deer Horn Project Overview

Location North-central BC, 36 km south of the prolific Huckleberry Cu-Mo mine
Size 5,133 ha (51.33 sq km)
Metals Te/Ag/Au with W, Cu, Bi, Pb, Zn, Mo
Ownership DHC 50% with option to acquire up to 75%
Status Advanced exploration with positive PEA completed
Avge Grades* 74 pm Te, 77g Ag/tonne, 2.45g Au/tonne*

A Unique Project. A Rare Opportunity.

As North America’s only tellurium-silver-gold property with an NI 43-101 compliant tellurium resource, Deer Horn represents a unique mineral asset. Exploration to date has outlined several key mineral zones across 2.4 kilometers that remain open for expansion in three directions. According to the July, 2013 PEA Technical Report, additional drilling would likely expand the current resource.

Key Project Attributes

  • Gold & silver with high tellurium grades
  • Significant upside tungsten and copper porphyry potential
  • Open for expansion in three directions, including mapped 2.4 km mineralized zone along strike
  • “Robust” economics with a 2.4-year payback based on conservative analysis
  • Small mine <75kt per year; no environmental assessment
  • Projected to be in production 2-to-4 years from close of project financing
  • Phased development
  • Potential for two further, near identical phases with reduced capex and opex resulting in improved economics
  • First Nations support

The proposed Deer Horn mine has a relatively small footprint and low expected environmental impact. Environmental and related studies are estimated to take less than one year to complete if the permit application proceeds through the regulatory process as a “small mine” application under the British Columbia Mines Act1.

Category Au Cutoff (g/t) Tonnes> Cutoff (tonnes) Au Grade (g/t) Ag Grade (g/t) Te
Grade
(ppm)
Au Contained Ounces Ag Contained Ounces Te Contained Kg
Indicated 1.00 414,000 5.12 157.50 160 68,000 2,100,000 66,000
Inferred 1.00 197,000 5.04 146.50 137 32,000 930,000 27,000

NOTE: The above resource estimate was completed by G.H. Giroux, P.Eng., of Giroux Consultants Ltd., using industry standard methods that conform with Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards on Mineral Resources and Mineral Reserves referred to in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

1 From Item 1.9, page 8 of PRELIMINARY ECONOMIC ASSESSMENT OF THE DEER HORN PROPERTY by Bob Lane (P.Geo), Gary Giroux (P.Eng) and Tracey Meintjes (P.Eng).

Preliminary Economic Assessent (PEA) Highlights1 (click here for full report)

Encompasses only 450m of a 2.4 km long mineral system

NPV @ 5% $39.5M
IRR % 32%
Payback Period 2.4
Metal Prices 2
Tellurium (US$/kg) $237.00
Silver (US$/oz) $29.10
Gold (US$/oz) $1,494.00
US$/Cdn$ Exchange Rate 0.9956


Mine Life 14 years
Initial Capital Cost $27.8M
Avg Costs: Mine, Processing, G&A Operating (including pre-striping & waste handling) $61/tonne


Total Tonnes to Mill 949,000
Annual Tonnes to Mill 74,000
Avg Grades
Tellurium (ppm) 74
Silver (grams per tonne) 77
Gold (grams per tonne) 2.45


Total Production
Tellurium (kg) 67,000
Silver (ounces) 2,112,000
Gold (ounces) 63,000

1 Note:The PEA is considered preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration or mineral reserves once economic considerations are applied. Therefore there is no certainty that the production profile concluded in the PEA will be realized.
2 While metals prices have dropped since this PEA was prepared in 2013, the corresponding change in the US$/Cdn$ Exchange Rate has largely offset the effect on project economics.

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