-
NI 43-101 REPORT
Preliminary Economic AssessmentStudy for Kipawa Project
Roches Ref.: 061623.001-200
Submitted toMatamec Explorations inc.
Prepared by
Guy Saucier, Eng.Andr Roy, Eng.
Pierre Casgrain, Eng.Philippe Ct, Eng.
Yves ThomassinMichel Bilodeau, Eng.
Roche Ltd, Consulting-Group
Yann Cannus, Eng.SGS Canada Inc.
Alfred Hayden, P.Eng.EHA Engineering Ltd.
Effective Date: January 30, 2012Issue Date: March 14, 2012
-
NI 43-101 Report
Preliminary Economic Assessment Study for Kipawa Project
Roche's Ref.: 061623.001-200
Submitted to
Matamec Explorations inc.
Prepared by:
Guy Saucier, Eng. Andr Roy, Eng.
Pierre Casgrain, Eng. Philippe Ct, Eng.
Yves Thomassin Michel Bilodeau, Eng.
Roche Ltd, Consulting-Group
Yann Cannus, Eng. SGS Canada Inc.
Alfred Hayden, P.Eng.
EHA Engineering Ltd.
Effective Date: January 30, 2012
Issue Date: March 14, 2012
-
Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc Report
March 2012
Date and Signature
This Report entitled"Preliminary Economic Assessment Study for
Kipawa Project, issue date March 14, 2012 was
prepared and signed by the following authors:
Signed and Sealed
Guy Saucier, Eng. March 14, 2012 Montral, Qubec OIQ # 37711
Signed and Sealed
Andr Roy, Eng. March 14, 2012 Montral, Qubec OIQ # 37775
Signed and Sealed
Pierre Casgrain, Eng. March 14, 2012 Montral, Qubec OIQ #
101321
Signed and Sealed
Philippe Ct, Eng. March 14, 2012 Qubec, Qubec OIQ # 128326
Signed and Sealed
Yves Thomassin March 14, 2012 Qubec, Qubec
Signed and Sealed
Michel Bilodeau, Eng. March 14, 2012 Montral, Qubec OIQ #
23799
Signed and Sealed
Yann Camus, Eng. March 14, 2012 Blainville, Qubec OIQ #
125443
Signed and Sealed
Alfred S. Hayden, P. Eng. March 14, 2012 Toronto, Ontario PEO #
18898015
-
Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc i Report
March 2012
CERTIFICATE OF AUTHOR
Guy Saucier, Eng. Roche Ltd., Consulting Group 630, Ren-Levesque
West, Suite 1500 Montral, QC, Canada, H3B 1S6 Phone : 514 393 9110
Fax : 514 393 1511
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec
Exploration Inc. dated March 14, 2012.
I, Guy Saucier, do hereby certify that:
1. I am Vice President, Mining and Mineral Processing and
carried out this assignment as author/reviewer of Roche Ltd,
Consulting-Group, Suite 1500, 630, Ren-Lvesque West, Montral, QC,
Canada, H3B 1S6.
2. I am a graduate of cole Polytechnique, University of Montral,
located in Montral with a B. Ing in Geological Engineering in
1983;
3. I am a Senior Geological Engineer, Member of the Ordre des
Ingnieurs du Qubec (#37711), and a member of the Canadian Institute
of Mining, Metallurgy and Petroleum (CIM), PDAC and SME;
4. I have worked as a geological engineer in the mineral
industry for 28 years;
5. I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6. I have supervised the development of the technical content in
the following sections (1,2,3,15,18,19,20, 21,24,25,26,27);
7. I have not visited the site;
8. I have had no prior involvement with the properties that are
the subject of this Technical Report.
9. I am an independent of the issuer as defined in section 1.5
of NI 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1,
and the Technical Report has been prepared in compliance with that
instrument and form.
11. As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12. I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montreal, March 14, 2012
"Guy Saucier"
Guy Saucier, Eng. OIQ # 37711
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc ii Report
March 2012
CERTIFICATE OF AUTHOR
Andr Roy, Eng. Roche Ltd. Consulting Group 630, Ren-Lvesque
West, Suite 1500 Montral, QC, Canada, H3B 1S6 Phone : 514 393 9110,
ext. 512 Fax : 514 393 1511
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec
Exploration Inc. dated March 14, 2012.
I, Andr Roy, do hereby certify that:
1. I am the Principal of AR Tech Development, 3845 Victoria,
Lachine, QC, Canada, H8T 1J9 and carried out this assignment as a
Consultant of Roche Ltd, Consulting-Group, Suite 1500, 630,
Ren-Lvesque West, Montral, QC, Canada, H3B 1S6.
2. I am a graduate of cole Polytechnique, University of Montral,
located in Montral with a B. Ing. in Geological Engineering in
1983.
3. I am a Senior Geological Engineer, Member of the Ordre des
Ingnieurs du Qubec (#37775);
4. I have worked as a geological engineer in the mineral
industry for 13 years;
5. I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6. I am responsible for the following sections (1,2,3,15,18,19,
21,24,25,26,27);
7. I have visited the site on Oct 31 and Nov 1, 2010;
8. I have had no prior involvement with the properties that are
the subject of this Technical Report.
9. I am an independent of the issuer as defined in section 1.5
of NI 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1,
and the Technical Report has been prepared in compliance with that
instrument and form.
11. As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12. I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montreal, March 14, 2012
"Andr Roy"
Andr Roy, Eng. OIQ # 37775
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc iii
Report March 2012
CERTIFICATE OF AUTHOR
Pierre Casgrain, Eng. Roche Ltd., Consulting Group 630,
Ren-Levesque West, Suite 1500 Montral, QC, Canada, H3B 1S6 Phone :
514 393 9110 Fax : 514 393 1511
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec Exploration Inc. dated March
14, 2012.
I, Pierre Casgrain, do hereby certify that:
1. I am Senior Mining Engineer and carried out this assignment
as author/reviewer of Roche Ltd, Consulting Group, Suite 1500, 630,
Ren-Lvesque West, Montral, QC, Canada, H3B 1S6.
2. I am a graduate of Laval University, located in Qubec City
with a B. Ing in Mining Engineering in 1983;
3. I am a Senior Mining Engineer, Member of the Ordre des
Ingnieurs du Qubec (# 101321), and a member of the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM);
4. I have worked as a geological engineer in the mineral
industry for 28 years;
5. I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6. I am responsible for section 16 of this technical report;
7. I have visited the site on June 13 and 14, 2011;
8. I have had no prior involvement with the properties that are
the subject of this Technical Report.
9. I am an independent of the issuer as defined in section 1.5
of NI 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1,
and the Technical Report has been prepared in compliance with that
instrument and form.
11. As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12. I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montreal, March 14, 2012
"Pierre Casgrain"
Pierre Casgrain, Eng.
OIQ # 101321
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc iv Report
March 2012
CERTIFICATE OF AUTHOR
Philippe Ct, Eng. Roche Ltd., Consulting Group 1389, Galile
Avenue, Suite 220 Qubec, QC, Canada, G1P 4G4 Phone : 418 682 8220
Fax : 418 654 9699
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec Exploration Inc. dated March
14, 2012.
I, Philippe Ct, do hereby certify that:
1 I am a Metallurgical Engineer and carried out this assignment
as author of Roche Ltd, Consulting Group, Suite 220, 1389, Galile
Avenue, Qubec, QC, Canada, G1P 4G4.
2 I am a graduate of Laval University, located in Qubec with a
B.Eng. in Materials and Metallurgical Engineering in 2002;
3 I am a Metallurgical Engineer, Member of the Ordre des
Ingnieurs du Qubec (#128326);
4 I have worked as a metallurgical engineer in the mineral
industry for 10 years;
5 I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6 I have participated in the development of section 17;
7 I did not visit the site;
8 I have had no prior involvement with the properties that are
the subject of this Technical Report.
9 I am an independent of the issuer as defined in section 1.5 of
NI 43-101.
10 I have read National Instrument 43-101 and Form 43-101F1, and
the Technical Report has been prepared in compliance with that
instrument and form.
11 As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12 I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Qubec, March 14, 2012
" Philippe Ct "
Philippe Ct, Eng.
OIQ # 128326
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc v Report
March 2012
CERTIFICATE OF AUTHOR
Yves Thomassin, Forest Engineer, M.Sc.A. Roche Ltd., Consulting
Group 3567 Neilson Qubec (Canada) G1W 4Z9 Phone : 418 654 9696 Fax
: 418 654 9699
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec Exploration Inc. dated March
14, 2012.
I, Yves Thomassin, do hereby certify that:
1 I am currently employed as Director Mining Projects
Environment Division of Roche Ltd, Consulting Group, 3567 Neilson,
Qubec (Canada), G1W 4Z9 ;
2 I graduate from Laval University in 1981, in Forest
Engineering and obtain a Master Degree in Forest Management in
1984;
3 I am a specialist in mining environment since 20 years;
4 I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI
43-101;
5 I have participated in the development of section 20 of this
technical report;
6 I have not visited the site;
7 I have had no prior involvement with the properties that are
the subject of this Technical Report.
8 I am an independent of the issuer as defined in section 1.5 of
NI 43-101.
9 I have read National Instrument 43-101 and Form 43-101F1, and
the Technical Report has been prepared in compliance with that
instrument and form.
10 As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
11 I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montreal, 14th
March 2012
" Yves Thomassin "
Yves Thomassin Environmental Mining Specialist
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc vi Report
March 2012
CERTIFICATE OF AUTHOR
Michel L. Bilodeau, Eng., M.Sc. (App.), Ph.D. Independent
Consultant 22 Labrador Street Kirkland, QC, H9J 3W8 Telephone:
514-426-4210 Email: [email protected]
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec Exploration Inc. dated March
14, 2012.
I, Michel L. Bilodeau, Eng., do hereby certify that:
1. I am a retired (June 2009) Associate Professor from the
Department of Mining and Materials Engineering of McGill
University, 3450 University St., Montral, QC, Canada H3A 2A7, and
still teach on a contract basis the mineral economics course of the
mining engineering program;
2. I am a graduate of cole Polytechnique de Montral with a
B.Eng. in Geological Engineering (1970), and of McGill University
with a M.Sc. (App.) in mineral exploration (1972) and a Ph.D. in
mineral economics (1975);
3. I am a member in good standing of the Ordre des ingnieurs du
Qubec (#23799);
4. I have taught continuously in the areas of engineering
economy, mineral economics and mining project feasibility studies
in the mining engineering program dispensed by McGill University
since my graduation from university, and have carried out in the
capacity of independent consultant several assignments related to
the economic/financial analysis of mining projects;
5. I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6. I am responsible for section 22 of this technical report;
7. I have not visited the site;
8. I have had no prior involvement with the properties that are
the subject of this Technical Report.
9. I am an independent of the issuer as defined in section 1.5
of NI 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1,
and the Technical Report has been prepared in compliance with that
instrument and form.
11. As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12. I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montral, March 14, 2012
" Michel L. Bilodeau "
Michel L. Bilodeau, Eng. Economic/Financial Analyst Consultant
for Roche Ltd, Consulting Group OIQ #23799
mailto:[email protected]
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc vii
Report March 2012
CERTIFICATE OF AUTHOR
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec
Exploration Inc. dated March 14, 2012.
I, Yann Camus, Eng., do hereby certify that:
1. I am project engineer with SGS Canada Inc. - Geostat with an
office at 10 Blvd Seigneurie East, Suite 203, Blainville, Quebec,
Canada, J7C 3V5;
2. I am a graduate from cole Polytechnique de Montral in
2000;
3. I am a registered member of the Ordre des Ingnieurs du Quebec
(#125443);
4. I have worked as a geological engineer continuously since my
graduation from university;
5. I have read the definition of Qualified Person set out in the
National Instrument 43 101 and certify that by reason of my
education, affiliation with a professional association and past
relevant work experience, I fulfil the requirements to be an
independent qualified person for the purposes of NI 43-101;
6. I am responsible for sections 4 to 12 inclusively plus 14 and
23 of this technical report;
7. I have visited the Property on November 10 and 11, 2008 for
the verification of drill holes locations and inspection of the
area;
8. I have no personal knowledge as of the date of this
certificate of any material fact or change, which is not reflected
in this report;
9. I have been involved in 2007 on work related to the mineral
property. I conducted relative density measurements of core samples
sampled to the project. I have not visited the project site during
that occasion. I participated in the preparation of a Resource
Report for the project in 2010;
10. Neither I, nor any affiliated entity of mine, is at present,
under an agreement, arrangement or understanding or expects to
become, an insider, associate, affiliated entity or employee of
Matamec Exploration Inc. or any associated or affiliated
entities;
11. Neither I, nor any affiliated entity of mine, own, directly
or indirectly, nor expect to receive, any interest in the
properties or securities of Matamec Exploration Inc., or any
associated or affiliated companies;
12. Neither I, nor any affiliated entity of mine, have earned
the majority of our income during the preceding three years from
Matamec Exploration Inc., or any associated or affiliated
companies
13. I have read NI 43-101 and Form 43-101F1 and have prepared
the technical report in compliance with NI 43-101 and Form
43-101F1; and have prepared the report in conformity with generally
accepted Canadian mining industry practice, and as of the date of
the certificate, to the best of my knowledge, information and
belief, the technical report contains all scientific and technical
information that is required to be disclosed to make the technical
report not misleading.
Signed at Blainville, Quebec this 14th
day of March 2012
Yann Camus
Yann Camus, Eng. Project Engineer SGS Canada Inc. Geostat
Blainville (Qubec) OIQ #125443
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc viii
Report March 2012
CERTIFICATE OF AUTHOR Alfred S. Hayden, P. Eng. President EHA
Engineering Ltd PO BOX 2711 Postal Station 'B' Richmond Hill,
Ontario L4E 1A7
To Accompany the Report entitled Preliminary Economic Assessment
Study for Kipawa Project for Matamec
Exploration Inc. dated March 14, 2012.
I, Alfred S. Hayden, do hereby certify that:
1. I am President of EHA Engineering Ltd., PO Box 2711, Postal
Station B, Richmond Hill ON, L4E 1A7 Canada.
2. I graduated from the University of British Columbia,
Vancouver, BC in 1967 with a Bachelor of Applied Science in
Metallurgical Engineering.
3. I am a member of the Canadian Institute of Mining, Metallurgy
and Petroleum and a Professional Engineer and Designated Consulting
Engineer registered with Professional Engineers Ontario (PEO #
18898015).
4. I have worked as a metallurgical engineer in the mineral
industry for 46 years;
5. I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that by reason
of my education, affiliation with a professional association (as
defined by NI 43-101) and past relevant work experience, I fulfill
the requirements to be a "qualified person" for the purposes of NI
43-101;
6. I am responsible for sections 13 and 17 of this technical
report;
7. I have not visited the site;
8. I have had no prior involvement with the properties that are
the subject of this Technical Report.
9. I am an independent of the issuer as defined in section 1.5
of NI 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1,
and the Technical Report has been prepared in compliance with that
instrument and form.
11. As of the date of this certificate, to the best of my
information, knowledge and belief, the Technical Report contains
all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.
12. I consent of the filing of the Technical Report with any
Canadian stock exchange and consent other securities regulatory
authority and any publication by them for regulatory purposes of
the technical report.
Montreal, March 14, 2012
"Alfred S. Hayden"
Alfred S. Hayden, P. Eng.
PEO # 18898015
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc Report
March 2012
Table of Contents
1.0 EXECUTIVE SUMMARY
........................................................................................................................
1
1.1 Site Location
................................................................................................................................................................
1
1.2 Geological Setting, Mineralisation, and Mineral Resource
.........................................................................................
2
1.3 Mining
Method............................................................................................................................................................
3
1.4 Recovery Methods
......................................................................................................................................................
3
1.5 Tailings Management Facility
......................................................................................................................................
3
1.6 Project Infrastructure
..................................................................................................................................................
4
1.7 Environmental Considerations
....................................................................................................................................
4
1.8 Capital Cost Estimates
.................................................................................................................................................
5
1.9 Operating Cost Estimate
..............................................................................................................................................
6
1.10 Economic Analysis
.......................................................................................................................................................
7
1.11 Financial Analysis
.........................................................................................................................................................
7
2.0 INTRODUCTION AND TERMS OF REFERENCE
........................................................................................
9
2.1 General
........................................................................................................................................................................
9
2.2 Terms of Reference
.....................................................................................................................................................
9
2.3 Units and Currency
....................................................................................................................................................
10
2.4 Disclaimer
..................................................................................................................................................................
11
3.0 RELIANCE ON OTHER EXPERTS
...........................................................................................................
12
4.0 PROPERTY DESCRIPTION AND LOCATION
..........................................................................................
14
4.1 Location
.....................................................................................................................................................................
14
4.2 Property Description, Ownership and Agreements
...................................................................................................
15
4.3 Royalties Obligations
.................................................................................................................................................
15
4.4 Environmental Liabilities
...........................................................................................................................................
16
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ..................... 17
5.1 Accessibility
...............................................................................................................................................................
17
5.2 Physiography
.............................................................................................................................................................
17
5.3 Climate
......................................................................................................................................................................
17
5.4 Local Resources and Infrastructure
...........................................................................................................................
17
6.0 HISTORY
............................................................................................................................................
18
6.1 Exploration Work Pertaining to Period I (1956 to 1984)
...........................................................................................
18
6.2 Exploration Work Pertaining to Period II (1985 to 1991)
..........................................................................................
20
6.3 Exploration Work Pertaining to Period III (1992 to Present)
.....................................................................................
21
7.0 GEOLOGICAL SETTING AND MINERALISATION
...................................................................................
23
7.1 Regional Geology
.......................................................................................................................................................
23
7.2 Kipawa Deposit
..........................................................................................................................................................
24
8.0 DEPOSIT TYPES
..................................................................................................................................
36
9.0 EXPLORATION
...................................................................................................................................
39
10.0 DRILLING
...........................................................................................................................................
40
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Matamec Explorations Inc. Preliminary Economic Assessment for
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March 2012
11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY
.............................................................................
42
11.1 Sample Preparation and Security
..............................................................................................................................
42
11.2 Sample Analyses
........................................................................................................................................................
42
11.3 Quality Assurance and Quality Control Procedure
....................................................................................................
42
11.4 Specific Gravity
..........................................................................................................................................................
57
11.5 Conclusion
.................................................................................................................................................................
58
12.0 DATA VERIFICATION
..........................................................................................................................
59
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
.....................................................................
63
13.1 Metallurgical Testwork Summary
..............................................................................................................................
63
13.2 Process Selection
.......................................................................................................................................................
66
13.3 Future Metallurgical Testwork
..................................................................................................................................
66
14.0 MINERAL RESOURCE ESTIMATES
.......................................................................................................
67
14.1 Introduction
..............................................................................................................................................................
67
14.2 Exploratory Data Analysis
..........................................................................................................................................
67
14.3 Geological Interpretation
..........................................................................................................................................
69
14.4 Resource Block Modeling
..........................................................................................................................................
72
14.5 Grade Interpolation Methodology
............................................................................................................................
72
14.6 Mineral Resource Classification
................................................................................................................................
73
14.7 Mineral Resource Estimation
....................................................................................................................................
74
15.0 MINERAL RESERVES ESTIMATES
........................................................................................................
77
16.0 MINING METHODS
............................................................................................................................
78
16.1 General Considerations
.............................................................................................................................................
78
16.2 Pit Optimization
.........................................................................................................................................................
80
16.3 Pit Design
...................................................................................................................................................................
83
16.4 In-Pit Mineral Resource Estimate
..............................................................................................................................
87
16.5 Mining Equipment
.....................................................................................................................................................
88
16.6 Mine Development Sequence and Mine Planning
....................................................................................................
92
17.0 RECOVERY METHODS
........................................................................................................................
97
17.1 Process Plant Design Criteria
.....................................................................................................................................
97
17.2 Flowsheets and Process Description
.........................................................................................................................
98
17.3 Mass Balances
.........................................................................................................................................................
100
17.4 Process Equipment
..................................................................................................................................................
100
17.5 Power Requirements
...............................................................................................................................................
100
17.6 Crushing and Processing Plant Layout
.....................................................................................................................
101
17.7 Tailings and Water Management
............................................................................................................................
101
18.0 PROJECT INFRASTRUCTURE
.............................................................................................................
103
18.1 Power Generation Kipawa Site
.............................................................................................................................
103
18.2 Fuelling Storage Kipawa
Site.................................................................................................................................
103
18.3 Process Water
.........................................................................................................................................................
103
18.4 Settling Pond
...........................................................................................................................................................
103
18.5 Access Road
.............................................................................................................................................................
103
18.6 Telecommunications
...............................................................................................................................................
104
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18.7 Mine Office Complex
...............................................................................................................................................
104
18.8 Maintenance Shop
..................................................................................................................................................
104
18.9 Explosive Storage
....................................................................................................................................................
104
19.0 MARKET STUDIES AND CONTRACTS
.................................................................................................
105
19.1 Market Studies
........................................................................................................................................................
105
19.2 Prices
.......................................................................................................................................................................
114
20.0 ENVIRONMENT STUDIES, PERMITTING AND SOCIAL OR COMMUNITY
IMPACT ................................ 117
20.1 Environmental Baseline Study (EBS)
........................................................................................................................
117
20.2 Ore, Waste and Tailings Characterization
...............................................................................................................
117
20.3 Provincial Government (Qubec)
............................................................................................................................
119
20.4 Federal Government
...............................................................................................................................................
122
20.5 Social Impact
...........................................................................................................................................................
123
20.6 Community Impact
..................................................................................................................................................
124
21.0 CAPITAL AND OPERATING COSTS ESTIMATE
....................................................................................
126
21.1 Capital Cost Estimate (CAPEX)
.................................................................................................................................
126
21.2 Operating Cost Estimate (OPEX)
..............................................................................................................................
135
22.0 ECONOMIC ANALYSIS
......................................................................................................................
141
22.1 General
....................................................................................................................................................................
141
22.2 Assumptions
............................................................................................................................................................
141
22.3 Financial Model and Results
....................................................................................................................................
142
22.4 Sensitivity Analysis
..................................................................................................................................................
143
23.0 ADJACENT PROPERTIES
...................................................................................................................
145
24.0 OTHER RELEVANT DATA AND INFORMATION
..................................................................................
147
25.0 INTERPRETATION AND CONCLUSIONS
.............................................................................................
148
26.0 RECOMMENDATIONS
......................................................................................................................
149
26.1 Introduction
............................................................................................................................................................
149
26.2 Future Works
...........................................................................................................................................................
152
27.0 REFERENCES
....................................................................................................................................
159
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc iv Report
March 2012
LIST OF FIGURES
Figure 4.1 - Location Map (modified from Google Map)
................................................................................................................
14
Figure 4.2 Map of the Zeus Property including the Kipawa Deposit
............................................................................................
16
Figure 7.1 - Stratigraphic Column at Kipawa
...................................................................................................................................
23
Figure 7.2 Schematic Section of Lithologies
.................................................................................................................................
26
Figure 7.3 - Kipawa Eudialyte
..........................................................................................................................................................
30
Figure 7.4 - Kipawa Mosandrite
......................................................................................................................................................
31
Figure 7.5 - Kipawa
Britholite..........................................................................................................................................................
32
Figure 7.6 - Chondrite normalized plot of REE-bearing minerals
and historic bulk samples
.......................................................... 33
Figure 7.7 - Kipawa Vlasovite and Gittinsite
..................................................................................................................................
34
Figure 8.1 Schematic Section of Lithologies
.................................................................................................................................
38
Figure 10.1 - Location of Matamec and Unocal Drill Holes at the
Kipawa deposit
.........................................................................
40
Figure 11.1 - Analytical Results Grouped by Standard Type
...........................................................................................................
43
Figure 11.2 - Standard BRAM308 Analytical Results for Y, Zr, Dy
and Nd
.......................................................................................
45
Figure 11.3 - Standard BRAM310 Analytical Results for Y, Dy and
Nd
............................................................................................
47
Figure 11.4 - Standard BRAM312 Analytical Results for Y, Dy and
Nd
............................................................................................
48
Figure 11.5 - Standard BRAM317 Analytical Results for Y, Dy and
Nd
............................................................................................
49
Figure 11.6 - Standard Sy-4 Analytical Results for Y, Zr, Dy and
Nd
................................................................................................
50
Figure 11.7 - Blanks Analytical Results for Y, Zr, Dy and Nd
............................................................................................................
52
Figure 11.8 - Comparison between ALS Original Results and ALS
Duplicate Results for Dy, Nd, Y and Zr
...................................... 55
Figure 11.9 - Comparison between ALS original results and
ACTLABS duplicate results for Dy, Nd, Y and Zr
................................ 57
Figure 12.1 - Comparison between Matamec (ALS) and SGS Sampling
and Analytical Procedures
............................................... 59
Figure 12.2 - Diagram Showing Correlation for Y, Zr and Dy
Analytical Results between Matamec (ALS) and SGS Geostat .........
60
Figure 12.3 - Sample to Sample Comparison between SGS and ALS
for Y and Zr
...........................................................................
61
Figure 13.1 - Summary of Dry Magnetic Separation
Results...........................................................................................................
64
Figure 13.2 - Wet Magnetic Separation, -60+200 Fraction
.............................................................................................................
64
Figure 13.3 - Wet Magnetic Separation, -14+60 Fraction
...............................................................................................................
65
Figure 13.4 - Rare Earth Extraction vs. Acid Addition
.....................................................................................................................
65
Figure 14.1 - Correlation between Y and REE Groups Showing the
Regression Lines and Equations
............................................. 68
Figure 14.2 - Typical Geological Section for Syenite Modelling
......................................................................................................
70
Figure 14.3 - 3D View of Syenite Body Meshed Envelope
..............................................................................................................
70
Figure 14.4 - Typical Geological Section with the 3 REE Enriched
Zones Modelled
........................................................................
71
Figure 14.5 - 3D View of the Three REE Enriched Zone Envelopes
.................................................................................................
71
Figure 14.6 - REE Enriched Zone Block Models
...............................................................................................................................
72
Figure 14.7 - REE Enriched Zone Block Model with the Same
Indicated Resources Envelope
........................................................ 73
Figure 16.1 - Diagram Flow Illustrating the Mining Evaluation
Process
..........................................................................................
79
Figure 16.2- Pit Selection with Whittle
.........................................................................................................................................
83
Figure 16.3 - Pit Design Parameters (Cross-Section of Pit Wall)
.....................................................................................................
84
Figure 16.4 - Ultimate Pit Design Plan View
....................................................................................................................................
85
Figure 16.5 - Waste Dump Parameters (Cross Section)
..................................................................................................................
86
Figure 16.6 - Haulage Road Dimensions
.........................................................................................................................................
86
Figure 16.7 - Blasting
Pattern..........................................................................................................................................................
90
Figure 16.8 - Production Schedule
..................................................................................................................................................
94
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc v Report
March 2012
Figure 16.9 - TREO Delivery Schedule
.............................................................................................................................................
95
Figure 16.10 - Rare Earth Oxides Relative Production
....................................................................................................................
96
Figure 17.1 Block Diagram of the Kipawa Process Flowsheet
.......................................................................................................
98
Figure 17.2 Block Diagram of the Hydrometallurgical Process
Flowsheet
...................................................................................
99
Figure 19.1 - Growth in Global Consumption of Rare Earth
2000-2010 F
.....................................................................................
105
Figure 19.2 - Global Production of Rare Earth Oxides
..................................................................................................................
106
Figure 19.3 - World Division of Rare Earth Consumption by Major
End Use, Selected Years, 1996-2010F
.................................. 106
Figure 22.1 - Before-Tax NPV: Sensitivity to Capital
Expenditure, Operating Cost and Price
....................................................... 144
Figure 22.2 - Before-Tax IRR: Sensitivity to Capital
Expenditure, Operating Cost and Price
......................................................... 144
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc vi Report
March 2012
LIST OF TABLES
Table 1.1 Resource at Base Case Cut-Off Grade of 0.2 %TREO
......................................................................................................
2
Table 1.2 Capital Cost Estimates Summary
.....................................................................................................................................
5
Table 1.3 - Operating Costs Summary (Per Tonne Ore Milled)
.........................................................................................................
6
Table 1.4 REO Prices
......................................................................................................................................................................
7
Table 1.5 - Project Evaluation Summary
...........................................................................................................................................
8
Table 2.1 - Frequently Used Acronyms and Abbreviations
.............................................................................................................
10
Table 3.1 - Persons Who Prepared or Contributed to this
Technical Report
..................................................................................
12
Table 6.1 - Summary of Drilling Programs on the Zeus Property
....................................................................................................
21
Table 7.1 - Grain Size Decriptions
...................................................................................................................................................
25
Table 10.1 - Summary of Drilling on Zeus Property
........................................................................................................................
41
Table 11.1 - Expected Values and Performance Gates for the
Different Standards used for the Current Project
......................... 44
Table 11.2 - Summary of Analytical Results for Y, Zr, Dy and Nd
on Different Standards
...............................................................
44
Table 11.3 - Summary of Duplicate Results from ALS Pulp Rejects
.................................................................................................
54
Table 11.4 - Summary of Duplicate Results from ALS and ACTLABS
...............................................................................................
56
Table 11.5 - Statistics on specific gravity values
.............................................................................................................................
58
Table 12.1 - Summary Statistics of Analytical Results for
Independent Check Samples
.................................................................
62
Table 14.1 - Summary of Database Entries
.....................................................................................................................................
67
Table 14.2 - Correlation Equations between Y and REE
..................................................................................................................
69
Table 14.3 - Formulas for the Conversion from Metal Concentrates
to Oxides Concentrate
......................................................... 73
Table 14.4 - Global Resource Estimates of REE Enriched Zones at
Different Cut-Off including the base case at 0.2% TREO .........
75
Table 14.5 - Global Resource Estimates of REE Enriched Zones at
Different Cut-Off
.....................................................................
76
Table 16.1 - Lerchs-Grossman Optimization
Parameters................................................................................................................
81
Table 16.2 - Commodity Price Used with Whittle
........................................................................................................................
82
Table 16.3- In-Pit Resources inside the Pit Design, with 5%
Dilution
..............................................................................................
87
Table 16.4 - Comparison between In-pit Mineral Resource and the
Whittle Shell # 27
.................................................................
88
Table 16.5 - Drilling and Blasting Parameters
.................................................................................................................................
89
Table 16.6 - Mining Equipment Requirement
.................................................................................................................................
90
Table 16.7 - Life of Mine Planning and Scheduling
.........................................................................................................................
93
Table 17.1 - Condensed Process Design Criteria Mine Site
.............................................................................................................
97
Table 17.2 Condensed Process Design Criteria, Hydromet Site
......................................................................................................
97
Table 17.3 - Process Facilities Power Demand
..............................................................................................................................
101
Table 19.1 - Global Rare Earths Supply and Demand 2005-2015 (REO
+/- 20%)
..........................................................................
107
Table 19.2 - Global Rare Earths Supply and Demand 2005-2015 (REO
+/-20%)
...........................................................................
108
Table 19.3 - Rare Earth Mining Quotas for each Chinese Province
and Municipality 2011
.......................................................... 108
Table 19.4 - Rare Earth Elements: World production and Reserves
- 2010
..................................................................................
109
Table 19.5 - Rare Earth Elements: China Reserves -
2010.............................................................................................................
110
Table 19.6 - Some Key Drivers of Rare Earths Demand
................................................................................................................
110
Table 19.7 - Rare Earth Element Uses and Sources
......................................................................................................................
110
Table 19.8 - Rare Earth Demand by Application
...........................................................................................................................
111
Table 19.9 - Global Rare Earths Demand in 2010 (REO +/- 15%)
..................................................................................................
112
Table 19.10 - Forecast Global Demand and Supply for Individual
Rare Earths in 2015 (+/- 20%)
................................................ 113
Table 19.11 - Rare Earth Production by Element and for Future
Mine 2012-2014 Matamec Kipawa as a New Producer ..... 114
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Matamec Explorations Inc. Preliminary Economic Assessment for
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Report March 2012
Table 19.12 - Forecasted Prices
....................................................................................................................................................
115
Table 19.13 - Forecasted Prices After Refining
.............................................................................................................................
115
Table 19.14 - Forecasted Prices of Kipawa TREO Concentrate
.....................................................................................................
116
Table 21.1 Capital Cost Estimate Summary
...............................................................................................................................
126
Table 21.2 - Mine Equipment Capital Cost Summary
...................................................................................................................
130
Table 21.3 - Concentrator Capital Cost Summary
.........................................................................................................................
132
Table 21.4 - Hydrometallurgical Plant Capital Cost
Summary.......................................................................................................
133
Table 21.5 - Operating Cost Summary
..........................................................................................................................................
136
Table 21.6 Manpower Costs
......................................................................................................................................................
137
Table 21.7 - Mining Operating Cost Summary
..............................................................................................................................
138
Table 21.8 - Energy Cost Summary
...............................................................................................................................................
139
Table 22.1 - Economic Assumptions
.............................................................................................................................................
141
Table 22.2 - Technical Assumptions
..............................................................................................................................................
142
Table 22.3 - Project Evaluation Summary
.....................................................................................................................................
143
LIST OF APPENDICES
Appendix 1 - Pictures from Site Visit
Appendix 2 - List of Claims
Appendix 3 - Kipawa General Site Layout
Appendix 4 - Mine Plan
Appendix 5 - Kipawa Plant Site Layout
Appendix 6 - Kipawa Plant Layout
Appendix 7 - Tmiscaming Hydromet Plant Site Layout
Appendix 8 - Tmiscaming Hydromet Plant Layout
Appendix 9 - CAPEX
Appendix 10 - OPEX
Appendix 11 - Kipawa Project Financial Analysis
Appendix 12 - Table of Recommendations and Future Works
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc 1 Report
March 2012
1.0 EXECUTIVE SUMMARY
Matamec Explorations Inc. (Matamec) is a Canadian registered
resource company, based in Montreal, Canada and
publicly listed on the TSX Venture Exchange. Matamec is a junior
mining exploration company whose main focus is
in developing the Kipawa heavy rare earths deposit and exploring
more than 35 km of strike length in the Kipawa
Alkalic Complex for rare
earths-yttrium-zirconium-niobium-tantalum mineralization on its
Zeus property.
The following is a Preliminary Economic Assessment (PEA) report
on the Kipawa deposit located on the Zeus
Property where Matamec holds a 100% interest in the Zeus
property (the Property). The property is located in
South Western Qubec. approximately 640 km from Montreal, 475 km
from Toronto, 440 km from Ottawa and 62
km from the town of Tmiscaming.
Matamec has retained Roche Ltd, Consulting Group (Roche) to
complete a National Instrument 43-101 (NI 43-101)
Compliant PEA Report on the Kipawa deposit. Roche has been
involved with the Kipawa deposit since September
2010. As part of the PEA a resource calculation update was
performed by SGS Canada Inc.-Geostat (SGS Geostat).
The following PEA report conforms to the standards set out in NI
43-101, Standards and Disclosure for Mineral
Projects and is in compliance with Form 43-101F1.
The Qualified Persons responsible for this report are: Guy
Saucier Senior Geological Engineer with Roche, Andr
Roy, Senior Geological Engineer with Roche and Project Manager,
Al Hayden Senior Metallurgist with EHA
Engineering, Philippe Ct, Process Engineer, Pierre Casgrain,
Senior Mining Engineer, Yves Thomassin, Senior
Environmental Specialist, and Michel Biliodeau, Financial
Analysis with Roche and Yann Camus, Senior Geological
Engineer with SGS Geostat assisted in the preparation of this
report.
The site was visited by Mr. Roy on Oct 31 and Nov 1, 2010 and
was accompanied by Mr. Frederic Fleury and Mr.
Andr Gauthier , Mr. Casgrain on June 13 and 14, 2011 and was
accompanied by Mr. Robert Crpeau. Mr. Camus
visited the Property on November 10 and 11, 2008 for the
verification of drill holes locations and inspection of the
area. Mr. Camus was assisted by Mr. Jean-Philippe Paiement M.Sc.
who visited the Property on February 2, 2011
and the core shack in Val-dOr on April 1, 2011. Mr. Frdric
Fleury, Mr. Gauthier and Mr. Crpeau (Independent
Consultant) were employed by Matamec.
The site visit was conducted for Mr. Roy and Mr. Casgrain to
evaluate the area for mining development and
infrastructure and for Mr. Camus to review the core logging and
sampling procedures, the facilities and the core
storage areas and Mr. Paiement audited the exploration
methodology, sampling procedures, quality control
procedures and conducted an independent check sampling of
mineralized drill core intervals selected from recent
drill holes.
1.1 Site Location
The Kipawa deposit is located on the Zeus Property. The 17,678
hectares property is located in the Tmiscamingue
region of Qubec, 160 kilometres south of Rouyn-Noranda and 50
kilometres east of the town of Tmiscamingue.
All 415 claims are 100% owned by Matamec and are in good
standing. Resources are subject to NSR royalties for a
total of 1.25% that can be bought back for $ 310,000 CAD.
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Matamec Explorations Inc. Preliminary Economic Assessment for
Kipawa Project Rep_Matamec-Fin-PEA-000-20120312-SEDAR.doc 2 Report
March 2012
1.2 Geological Setting, Mineralisation, and Mineral Resource
The Zeus property is located in the Grenville geological
province. The Kipawa deposit is wholly contained within
the Kipawa Alkaline complex. At the site, the complex shows
modest small-scale internal folding, but at the deposit
scale is an almost entirely undeformed, gently south-west
dipping linear slab.
The resource was as three REE enriched horizons within the
Syenite complex (eudialyte, mosandrite and
britholite). This model was used to estimate Rare Earth Elements
(REE) resource.
A total of 123 drill holes totalling 9,648m were used (93 holes
are from Matamec and 30 are from Unocal of
Canada). In addition, 13 trenches totalling 631m were used.
Composite were generated at 1.5m intervals for each separate
zones totalling 2,949 composites for the enriched
REE zones (1,829 for the eudialyte, 666 for the mosandrite and
454 for the britholite).
Since three types of mineralization are considered in the
resource estimates, the geological modelling of the
resource included three separate 3D models and meshed envelopes.
A surface was created in order to model the
overburden-fresh rock contact.
The three envelopes created for the REE enriched zones were used
to generate three block models for REE
enriched zone mineralization. The block size was set at 10 m x
10 m x 5 m for a total of 31,337 blocks and a volume
of 9,056,000 m3 (5,012,000 m
3 for Eudialyte, 1,880,000 m
3 for Mosandrite and 2,164,000 m
3 for Britholite). Each
block has a fixed density of 2.86 t/m3 and a value for Zr plus
each individual REE element plus U and Th (total of 18
variables for each block). The meshed envelopes were made to be
higher than the overburden / fresh rock contact;
the block models were cut by the surface of the overburden by
having each block attributed a percentage.
The setting for the interpolations of the REE enriched zone
resource block model was based on the inverse
distance squared. A maximum of 12 samples per block, a minimum
of one sample per block and a limit of four
samples per drill hole were used in the interpolation method.
All 31,337 blocks were estimated with values ranging
from 6 to 4,692 ppm of Y.
The resource classification is based on the grid of drilling.
Drilling every 20 to 25 meters is considered indicated. No
indicated resource comes solely from Unocal drill holes.
Each 18 variables (REE, Y, Zr, U and Th) were transformed from
element value in ppm to oxide percent. Single
element ppm is multiplied by the oxide conversion factor and
divided by 10,000 to get the oxide value in percent.
The base case cut-off grade was selected to be at 0.2 %TREO and
is presented in the table below (Table 1.1). This
grade is chosen to present the resource since it corresponds
best to the break even for the economical evaluation.
Table 1.1 Resource at Base Case Cut-Off Grade of 0.2 %TREO
Zone Classification Tonnage Volume ZrO2 Y2O3 LREO* HREO* TREO*
La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3
Tm2O3 Yb2O3 Lu2O3 UO2 ThO2
t m3
% % % % % % % % % % % % % % % % % % % % %
Eudialyte 10,681,000 3,734,000 0.855 0.106 0.305 0.065 0.476
0.070 0.140 0.017 0.064 0.014 0.0019 0.014 0.0026 0.017 0.0038
0.012 0.0018 0.011 0.0014 0.0028 0.028
Mosandrite 4,231,000 1,479,000 1.031 0.085 0.249 0.054 0.388
0.055 0.116 0.014 0.053 0.012 0.0015 0.011 0.0021 0.014 0.0031
0.010 0.0015 0.010 0.0014 0.0032 0.023
Britholite 3,809,000 1,332,000 0.934 0.069 0.190 0.042 0.301
0.042 0.088 0.011 0.040 0.009 0.0011 0.009 0.0016 0.011 0.0024
0.008 0.0012 0.008 0.0012 0.0028 0.022
TOTAL Indicated 18,720,000 6,545,000 0.911 0.094 0.269 0.058
0.420 0.061 0.124 0.015 0.056 0.012 0.0016 0.012 0.0023 0.015
0.0033 0.010 0.0016 0.010 0.0013 0.0029 0.025
tonnes 170,493 17,561 50,300 10,844 78,706 11,424 23,177 2,817
10,546 2,335 302 2,316 433 2,826 624 1,951 300 1,840 252 540
4,739
Eudialyte 3,656,000 1,278,000 0.758 0.073 0.226 0.047 0.346
0.054 0.103 0.012 0.047 0.010 0.0013 0.010 0.0019 0.012 0.0027
0.008 0.0013 0.008 0.0011 0.0017 0.019
Mosandrite 1,147,000 401,000 1.094 0.113 0.326 0.072 0.511 0.069
0.153 0.019 0.070 0.016 0.0020 0.015 0.0029 0.019 0.0041 0.013
0.0020 0.012 0.0016 0.0037 0.028
Britholite 2,372,000 829,000 0.911 0.066 0.202 0.042 0.311 0.045
0.094 0.012 0.043 0.009 0.0011 0.009 0.0016 0.011 0.0023 0.008
0.0012 0.008 0.0011 0.0025 0.018
TOTAL Inferred 7,175,000 2,509,000 0.862 0.077 0.234 0.049 0.361
0.053 0.108 0.013 0.049 0.011 0.0014 0.011 0.0020 0.013 0.0028
0.009 0.0014 0.008 0.0012 0.0023 0.020tonnes 61,876 5,553 16,815
3,527 25,895 3,825 7,752 945 3,522 770 98 757 141 911 201 633 97
606 84 163 1,460
Resource with no cut-off * LREO: Light Rare Earth Oxides = La2O3
to Sm2O3 HREO: Heavy Rare Earth Oxides = Eu2O3 to Lu2O3 TREO: Total
Rare Earth Oxides = LREO + HREO + Y2O3
Effective date: 1 june 2011
Zone Classification Tonnage Volume ZrO2 Y2O3 LREO* HREO* TREO*
La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3
Tm2O3 Yb2O3 Lu2O3 UO2 ThO2
t m3
% % % % % % % % % % % % % % % % % % % % %
Eudialyte 10,342,000 3,616,000 0.860 0.108 0.311 0.066 0.486
0.072 0.143 0.017 0.065 0.014 0.0019 0.014 0.0027 0.018 0.0038
0.012 0.0018 0.011 0.0014 0.0028 0.028
Mosandrite 3,941,000 1,378,000 1.034 0.088 0.260 0.056 0.404
0.057 0.120 0.015 0.055 0.012 0.0015 0.012 0.0022 0.014 0.0032
0.010 0.0016 0.010 0.0014 0.0033 0.024
Britholite 3,361,000 1,175,000 0.914 0.073 0.200 0.044 0.318
0.045 0.093 0.011 0.042 0.009 0.0011 0.009 0.0017 0.011 0.0025
0.008 0.0013 0.008 0.0012 0.0029 0.023
TOTAL Indicated 17,645,000 6,169,000 0.909 0.097 0.278 0.060
0.435 0.063 0.128 0.016 0.058 0.013 0.0017 0.013 0.0024 0.016
0.0034 0.011 0.0017 0.010 0.0014 0.0029 0.026
tonnes 160,414 17,132 49,120 10,567 76,820 11,163 22,639 2,749
10,290 2,279 295 2,262 423 2,759 608 1,902 292 1,783 243 519
4,598
Eudialyte 3,460,000 1,210,000 0.771 0.076 0.233 0.048 0.356
0.056 0.106 0.013 0.048 0.011 0.0014 0.010 0.0019 0.013 0.0028
0.009 0.0013 0.008 0.0011 0.0018 0.020
Mosandrite 1,120,000 391,000 1.100 0.115 0.331 0.073 0.519 0.070
0.155 0.019 0.071 0.016 0.0020 0.016 0.0029 0.019 0.0042 0.013
0.0020 0.012 0.0017 0.0037 0.029
Britholite 2,226,000 778,000 0.896 0.068 0.208 0.043 0.319 0.046
0.097 0.012 0.044 0.009 0.0012 0.009 0.0017 0.011 0.0024 0.008
0.0012 0.008 0.0011 0.0025 0.019
TOTAL Inferred 6,805,000 2,379,000 0.866 0.080 0.241 0.051 0.371
0.055 0.111 0.014 0.050 0.011 0.0014 0.011 0.0020 0.013 0.0029
0.009 0.0014 0.009 0.0012 0.0023 0.021tonnes 58,955 5,414 16,390
3,438 25,242 3,728 7,557 921 3,432 751 96 738 137 889 196 617 95
589 81 158 1,423
Resource with TREO* > 0.20% * LREO: Light Rare Earth Oxides =
La2O3 to Sm2O3 HREO: Heavy Rare Earth Oxides = Eu2O3 to Lu2O3 TREO:
Total Rare Earth Oxides = LREO + HREO + Y2O3
Effective date: 1 june 2011
Zone Classification Tonnage Volume ZrO2 Y2O3 LREO* HREO* TREO*
La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3
Tm2O3 Yb2O3 Lu2O3 UO2 ThO2
t m3
% % % % % % % % % % % % % % % % % % % % %
Eudialyte 8,576,000 2,999,000 0.888 0.120 0.340 0.073 0.533
0.078 0.156 0.019 0.071 0.016 0.0021 0.016 0.0030 0.019 0.0042
0.013 0.0020 0.012 0.0015 0.0031 0.030
Mosandrite 2,541,000 889,000 1.021 0.104 0.317 0.066 0.488 0.070
0.148 0.018 0.067 0.015 0.0018 0.014 0.0027 0.017 0.0038 0.012
0.0018 0.011 0.0016 0.0034 0.027
Britholite 1,355,000 474,000 0.868 0.100 0.264 0.060 0.424 0.059
0.123 0.015 0.055 0.012 0.0016 0.012 0.0023 0.015 0.0035 0.011
0.0017 0.010 0.0014 0.0032 0.027
TOTAL Indicated 12,472,000 4,361,000 0.913 0.114 0.327 0.070
0.512 0.074 0.151 0.018 0.068 0.015 0.0020 0.015 0.0028 0.018
0.0041 0.013 0.0019 0.012 0.0015 0.0032 0.029
tonnes 113,819 14,279 40,835 8,743 63,856 9,287 18,837 2,279
8,534 1,898 247 1,889 354 2,305 507 1,577 239 1,434 191 395
3,676
Eudialyte 2,098,000 734,000 0.831 0.091 0.275 0.057 0.423 0.066
0.125 0.015 0.056 0.012 0.0016 0.012 0.0023 0.015 0.0033 0.010
0.0016 0.009 0.0013 0.0021 0.024
Mosandrite 976,000 341,000 1.100 0.123 0.356 0.078 0.558 0.075
0.166 0.020 0.077 0.017 0.0022 0.017 0.0032 0.020 0.0045 0.014
0.0022 0.013 0.0017 0.0039 0.032
Britholite 768,000 268,000 0.893 0.099 0.294 0.062 0.455 0.064
0.139 0.017 0.062 0.013 0.0017 0.013 0.0025 0.016 0.0035 0.011
0.0017 0.011 0.0014 0.0029 0.025
TOTAL Inferred 3,842,000 1,343,000 0.912 0.101 0.299 0.063 0.463
0.068 0.138 0.017 0.063 0.014 0.0018 0.014 0.0026 0.017 0.0037
0.011 0.0017 0.011 0.0014 0.0027 0.026tonnes 35,024 3,872 11,499
2,436 17,807 2,603 5,316 644 2,405 532 68 525 98 637 140 440 67 405
54 105 1,001
Resource with TREO* > 0.30% * LREO: Light Rare Earth Oxides =
La2O3 to Sm2O3 HREO: Heavy Rare Earth Oxides = Eu2O3 to Lu2O3 TREO:
Total Rare Earth Oxides = LREO + HREO + Y2O3
Effective date: 1 june 2011
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1.3 Mining Method
The open pit was designed using a two-stage approach. The first
stage identified an optimum pit shell using the
Lerchs-Grossman pit optimization method using Whittle software.
In the second stage, phase mining and
production schedules were developed, equipment selections were
performed and the capital and operating costs
were estimated.
For this Project, Roche determined that the mining operation
will use a conventional (truck and shovel) open pit
mining method. The mine will provide mill feed of ore at a rate
of 1,500,000 t/y (4,110 t/d) starting from the
beginning of the second year of the mine life.
The selected base case pit contains 19.0 Mt of mineable resource
(ore) with an average grade 0.428% TREO. The
overall stripping ratio is 1.53:1 (waste:ore). The whole mine
life is about 13 years, and Roche conducted a yearly
planning for the entire mine life.
The mine development for the ore and the waste will progress
using 10m high benches.
It is proposed that the operation will be carried out with an
equipment fleet comprising of two down the hole
(DTH) drill rigs for mineable resource and waste, a 5.6 m
(bucket capacity) hydraulic face shovel with a fleet of
four 50-tonne haul trucks. These will be supplemented with
support equipment of a loader, a grader, two dozers, a
small excavator, etc.
1.4 Recovery Methods
Roche has based the current study on a beneficiation, leach and
solvent extraction process to produce a single
TREO concentrate.
The metallic concentrate at Kipawa is basically a REE silicate
mix. The main concentrate mineral are eudialyte,
mosandrite and britholite. It may be possible for the single
TREO concentrate to be converted to individual rare
earth oxides, and Matamec is currently undertaking metallurgical
test work with SGS Lakefield to make this
determination.
Testing by SGS Lakefield has shown that leaching of the
silicates requires the use of sulphuric acid. The results of
the test of magnetic separation and solvent extraction show
indication that recovery will be in the order of 81%.
Optimization of these base-case test results is currently being
investigated in an attempt to reduce input costs in
the metallurgical processing of the Kipawa mineralization.
Roche considers the soft granular ore will require the use of a
SAG Mill followed by a rod mill. Capital and
operating costs are based on the actual flowsheets, including
magnetic separation, acid leach and a single TREO
product from solvent extraction.
1.5 Tailings Management Facility
The Kipawa project includes the development of a tailings
management facility (TMF) at the Kipawa site located
approximately 4 km north of the mine site for the tailings from
the concentrator and a another tailings site for the
Hydromet plant will be located in the area of Tmiscaming.
Dams capable of containing 11.7 M m3 of tailings for the Kipawa
Concentrator TMF and 17.9 M m
3 of tailings for
the Tmiscaming Hydromet TMF are considered in the PEA.
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Radioactivity analysis performed on tailings samples from the
pilot plant of the mineralurgical process showed
value smaller than the factor (1) presented in Directive 019 for
classification of radioactive waste.
Comprehensive characterization programme should be carried out
when new representative samples of
minerallurgical tailings to be produced at Kipawa will be
available. Results of this characterization will allow the
comparison with Ministre du Dveloppement Durable, Environnement
et les Parcs (MDDEP) requirements for the
protection of groundwater at Kipawa site.
No characterization of the metallurgical process has been
carried out. Comprehensive characterization programme
should be carried out when new representative samples of
metallurgical tailings to be produced at Temiscaming
will be available. Results of this characterization will allow
the comparison with MDDEP requirements for the
protection of groundwater at Temiscaming site.
Most of the water sent to the Kipawa tailings will be recycled
in the process. However, since the precipitation
exceeds the evaporation, there will be an effluent in the
environment especially at snowmelt period from the
Kipawa Concentrator TMF and the Tmiscaming Hydromet TMF.
Geotechnical designs of both tailings sites presented herein are
conceptual and include use of local mineral soil for
the earth embankments. Local topographic conditions in the
proposed TMF area are planned to contain the wet
tailings by earthen dams. The local topography of the selected
site determines that a dam will be required for TMF.
The dam design section assumes the use of local materials and a
competent foundation. No assessment was done
to evaluate if it has a potential for acid generation. No
watertight barrier is planned for the Kipawa concentrator
tailings. A watertight barrier is planned for the Hydromet
tailings.
1.6 Project Infrastructure
The infrastructure is limited to the typical mining
infrastructure and production of electricity at the Kipawa
sites
since no power lines reaches the site. The site is already
connected to the road network which will need to be
improved. The Hydromet site will be located short distance from
the road to connect to the railroad network for
shipment of the concentrate to a Pacific coast port in transit
to an Asian REO refinery. The project proposes
operating the beneficiation, in a concentrator plant on the
Kipawa site and a leach and solvent extraction
hydrometallurgical process in the Tmiscaming area.
1.7 Environmental Considerations
1.7.1 ENVIRONMENTAL SETTING
The project involves two sites of activity. A mining site
including an open-pit, waste dump, mill and tailings is
proposed at Kipawa. The hydrometallurgical plant will be located
in Temiscaming.
Preliminary environmental baseline studies (EBS) has been
conducted in the area of the Kipawa site before the
selection of the waste dump and tailings has been done. No EBS
has been carried out for the Temiscaming site.
Baseline environmental studies typically are conducted over a
minimum of 12 continuous months to provide
coverage of all four seasons.
1.7.2 ENVIRONMENTAL ASSESSMENT AND PERMITTING
The production capacity and processing capacity estimated for
the Matamec installations in Kipawa are lower than
7,000 t/day and more specifically 4 110 t/day. The expected
production capacity for the Matamec installations in
Temiscaming is lower than 20 000 t/year. Therefore, the
environmental impact assessment and review procedure
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will not apply to the Matamec project and application for
certificate of authorization in accordance with Section 22
of the QEA will be sufficient.
Federal regulatory processes are determined after a project
description is submitted to the federal authorities
such as Environment Canada, Health Canada, Fisheries and Oceans
Canada, and Transport Canada. The proposed
mine, with a planned production rate of 4,110 t/day, would
undergo a comprehensive study in the event that a
federal approval is required.
1.7.3 COMMUNITY AND ABORIGINAL ENGAGEMENT
The purpose of this program is to ensure that all potentially
affected persons, businesses, and communities have a
full understanding of the project. In addition to a continuing
public engagement program, it may be necessary to
negotiate an impact/benefit agreement (IBA) with potentially
affected stakeholder groups.
1.8 Capital Cost Estimates
The total capital costs presented in the study are $315,763,000
CAD and are separated into direct capital costs,
indirect capital costs and contingency. The direct costs
breakdown, the Indirect cost and contingency is shown
below (Table 1.2).
Table 1.2 Capital Cost Estimates Summary
COST ITEMS Initial Cost
(CAD)
Mine Site
Mining 13,400,000
Open Pit & Auxiliary Services 7,617,000
Mine Site Tailings & Water Management 10,269,000
Concentrator 62,292,000
Mine Site Infrastructure 7,200,000
Hydromet Site
Hydromet Site Tailings & Water Management 15,004,000
Hydrometallurgical Facility 67,472,000
Hydromet Site Infrastructure 3,523,000
Other Infrastructure
Auxiliary Buildings - Non Process 10,730,000
Electricity, Automation & Communication Included
Total Direct Costs 197,507,000
Total Indirect Costs 55,103,000
Contingency (25%) 63,153,000
Total Costs ($CAD): 315,763,000
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1.9 Operating Cost Estimate
The total yearly operating cost is $89,210,000 CAD which equates
to $59.47 CAD per tonne milled in the
concentrator and $16.97 CAD per kg of TREO concentrate. The
breakdown of operating costs is shown below
(Table 1.3).
Table 1.3 - Operating Costs Summary (Per Tonne Ore Milled)
Y1Ramp-up
Y13
Exhaustion of ore
COST ITEMSANNUAL COST
($/y)
ANNUAL COST
PER TONNE
MINED
($/t)
ANNUAL COST
PER TONNE
MILLED
CONCENTRATOR
($/t)
ANNUAL COST
PER TONNE OF
CONCENTRATE
($/t)
ANNUAL COST
PER kg OF
TREO
($/kg)
ANNUAL COST
(lower due to
ramp up)
($/y)
ANNUAL COST
(lower due to
exhaustion of ore)
($/y)
GENERAL & ADMINISTRATION treo 4229 tonnes treo 3882
tonnes
3,672,000$ 1.03 2.4 6.99 0.698 3,672,000$ 3,304,800$
2,971,000$ 0.84 2.0 5.66 0.565 2,971,000$ 2,673,900$
1,343,000$ 0.38 0.9 2.56 0.255 1,343,000$ 1,208,700$
450,000$ 0.13 0.3 0.86 0.086 450,000$ 405,000$
405,000$ 0.11 0.3 0.77 0.077 405,000$ 364,500$
TOTAL G&A 8,841,000$ 2.49 5.9 16.84 1.682 8,841,000$
7,956,900$
MINING (Including Mine Manpower)
TOTAL MINING (Incl Mine Manpower) 16,619,000$ 4.67 11.079 31.66
3.161 16,479,848$ 16,319,724$
PROCESS
10,571,000$ 2.97 7.0 20.14 2.011 10,571,000$ 9,513,900$
9,781,000$ 2.75 6.5 18.63 1.861 9,781,000$ 8,802,900$
FRESH WATER 98,000$ 0.03 0.1 0.19 0.019 98,000$ 88,200$
REAGENTS 29,207,000$ 8.21 19.5 55.63 5.556 21,905,250$
26,286,300$
CONSUMMABLES 4,741,000$ 1.33 3.2 9.03 0.902 3,555,750$
4,266,900$
OTHER PROCESSING 3,952,000$ 1.11 2.6 7.53 0.752 2,964,000$
3,556,800$
TOTAL PROCESS 58,350,000$ 16.40 38.9 111.14 11.099 48,875,000$
52,515,000$
TAILINGS
TOTAL TAILINGS 240,000$ 0.07 0.2 0.46 0.046 240,000$
216,000$
TRANSPORTATION
4,200,000$ 1.18 2.8 8.00 0.799 3,150,000$ 3,780,000$
TREO MIX TRANSPORT TO ASIA 960,000$ 0.27 0.6 1.83 0.183