Bissett Gold Project The results of the amended February 1988 Kilborn feasibility study are summarized in the following sections. Reserves Mineable reserves, after allowing for dilu- tion and mining recovery, have been calculated by Kilborn to be 1,320,000 tons containing .223 ounces of gold per ton. Mineable reserves are based on drilling carried out between the 26th and the 37th level. Since the deposit is open at depth and has not been geologically terminated, there is potential for increasing the mineable reserves. The diagram below shows the schematic relationship between reserves and the mine cross-section. Mining plan Based on Kilborn’s recommended mine development plan, the mine would be placed into production at a rate of 175,000 tons per year within a period of ten months after a production decision is made. Pre-production work would include the extension of the A shaft by approximately 900 feet to the 16th level, thus eliminating the requirement to use B shaft. Also, D shaft would be deepened to facilitate access to the ore below the 26th level. Development of stopes in the D shaft area is required to permit sustained production (see diagram). Milling The existing 500 ton per day capacity mill built in 1982 is available to treat the ore. The flotation concentrate from the from the mill would be treated in a new cyanidation plant. The overall recovery of gold to dore bar is anticipated to be 91%. Capital costs A summary of the estimated capital costs to bring the mine into production, as derived from Kilborn’s report are: $ millions Mine Development .......... $ 8.6 Process'plant gs. i idee on oo 1.5 Contingency..............5- AD TOTAL os cert eee et weet $ 11.2 These costs may be significantly reduced by acquisition of good quality recondi- tioned equipment. The pre-production work is expected to take ten months. Operating costs The annual average cash operating costs for the first three years of operation, based on current labour rates and material costs, are estimated as follows: Cost per Unit Cost oz. gold Annual Per ton produced Cost milled US. $11.7 millions $67 $230 It is anticipated that a mining grade of .25 oz. per ton can be sustained for the first three years of operations, resulting in gold production of approximately 40,000 oz. per year. Subsequently, the grade is anticipated to decrease and production will reduce to 32,600 ounces per year. 26 , ’ ’ ? ’ ’ ® , . , ® iS) sn 400 500 600 Thousands Tons