Decar Project Preliminary Economic Assessment PDF

Report to:
First Point Minerals Corp.

Cliffs Natural Resources Exploration Canada Inc.
Preliminary Economic Assessment -

Decar Nickel Project, British Columbia,
Canada (Amended)
Document No. 1191600400-REP-R0001-05
Report to:
FIRST POINT MINERALS CORP.

CLIFFS NATURAL RESOURCES EXPLORATION CANADA INC.
PRELIMINARY ECONOMIC ASSESSMENT -

DECAR NICKEL PROJECT, BRITISH COLUMBIA, CANADA
(AMENDED)
EFFECTIVE DATE: MARCH 22, 2013

RE-FILED DATE: AUGUST 16, 2013
Prepared by Mike McLaughlin, P.Eng.

Elisabeth Ronacher, Ph.D., P.Geo.
Julie Palich, M.Sc., P.Geo.
Jason Baker, B.Eng., P.Eng.
Wenchang Ni, P.Eng.
Todd Kanhai, P.Eng.
Dharshan Kesavanathan, P.Eng.
Valentin Dejan, P.Eng.
Karlis Jansons, P.Eng.
Andrew Carter, Eur. Ing., B.Sc., C.Eng., MIMMM, SAIMM, SME
MM/vc
Suite 900, 330 Bay Street, Toronto, Ontario M5H 2S8

Phone: 416-368-9080 Fax: 416-368-1963
REVISION HISTORY
REV. PREPARED BY REVIEWED BY APPROVED BY

NO ISSUE DATE AND DATE AND DATE AND DATE DESCRIPTION OF REVISION
00 2013/03/15 All QPs - Mike McLaughlin Draft to Client
01 2013/03/27 All QPs - Mike McLaughlin Draft to Client
02 2013/04/02 All QPs - Mike McLaughlin Final to Client
03 2013/07/19 All QPs - Mike McLaughlin Revised final (black lined) for BC Securities Commission
04 2013/07/22 All QPs - Mike McLaughlin Revised final (black lined) for BC Securities Commission
05 2013/08/16 All QPs - Mike McLaughlin Final Report
05 2013/08/19 All QPs - Mike McLaughlin Final Report with amendment to Section 19.0
1191600400-REP-R0001-05
TABLE OF CONTENTS
1.0 SUMMARY ....................................................................................................... 1-1

1.1 INTRODUCTION ...................................................................................................... 1-1
1.2 PROPERTY DESCRIPTION AND OWNERSHIP ............................................................... 1-2
1.3 EXPLORATION ........................................................................................................ 1-2
1.4 GEOLOGICAL SETTING AND MINERALIZATION ............................................................ 1-2
1.5 DRILLING .............................................................................................................. 1-5
1.6 MINERAL RESOURCE ESTIMATE............................................................................... 1-5
1.7 MINERAL PROCESSING AND METALLURGICAL TESTING .............................................. 1-5
1.8 MINING ................................................................................................................ 1-7
1.9 PROJECT INFRASTRUCTURE ..................................................................................... 1-9
1.10 ENVIRONMENTAL ................................................................................................. 1-10
1.11 CAPITAL AND OPERATING COSTS ........................................................................... 1-11
1.11.1 CAPITAL COST ESTIMATE....................................................................... 1-11
1.11.2 OPERATING COST ESTIMATE .................................................................. 1-13
1.12 ECONOMIC ANALYSIS ........................................................................................... 1-15
1.13 RECOMMENDATIONS ............................................................................................ 1-18
1.14 CONCLUSIONS ..................................................................................................... 1-20
2.0 INTRODUCTION ............................................................................................... 2-1
2.1 UNITS OF MEASUREMENT AND CURRENCY ............................................................... 2-2
2.2 DATA SOURCES ..................................................................................................... 2-2
3.0 RELIANCE ON OTHER EXPERTS ...................................................................... 3-1
4.0 PROPERTY DESCRIPTION AND LOCATION ...................................................... 4-1
4.1 LOCATION ............................................................................................................. 4-1
4.2 DESCRIPTION AND OWNERSHIP ............................................................................... 4-3
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY............................................................................................... 5-1
5.1 ACCESS ................................................................................................................ 5-1
5.2 CLIMATE AND VEGETATION...................................................................................... 5-1
5.3 PHYSIOGRAPHY ..................................................................................................... 5-4
5.4 INFRASTRUCTURE AND LOCAL RESOURCES ............................................................... 5-4
6.0 HISTORY .......................................................................................................... 6-1
6.1 GEOLOGICAL SURVEY OF CANADA – 1942 .............................................................. 6-2
iv 1191600400-REP-R0001-05
6.2 DOUGLAS STELLING – 1974 ................................................................................. 6-3
6.3 MOUNTAINEER MINES LTD. – 1979....................................................................... 6-3
6.4 NORTHGANE MINERALS LTD. – 1982..................................................................... 6-3
6.5 URSULA MOWAT – 1987-2006 ............................................................................ 6-3
6.6 NORANDA EXPLORATION COMPANY LTD. – 1989..................................................... 6-6
6.7 FIRST POINT MINERALS CORP. – 2007-2010........................................................ 6-6
6.8 CLIFFS NATURAL RESOURCES EXPLORATION CANADA INC. ......................................... 6-7
7.0 GEOLOGICAL SETTING AND MINERALIZATION................................................ 7-1
7.1 REGIONAL GEOLOGY .............................................................................................. 7-1
7.2 LOCAL GEOLOGY.................................................................................................... 7-5
7.3 PROPERTY GEOLOGY.............................................................................................. 7-5
7.3.1 ROCK TYPE ........................................................................................... 7-5
7.3.2 STRUCTURE ........................................................................................... 7-7
7.3.3 ALTERATION .......................................................................................... 7-7
7.4 MINERALIZATION ................................................................................................. 7-13
8.0 DEPOSIT TYPES ............................................................................................... 8-1
9.0 EXPLORATION.................................................................................................. 9-1
9.1 EARTHPROBE ........................................................................................................ 9-1
9.1.1 METHODOLOGY AND SURVEY DETAILS...................................................... 9-1
9.1.2 RESULTS AND INTERPRETATION ............................................................... 9-3
9.2 DOWNHOLE ROCK PROPERTIES .............................................................................. 9-5
9.2.1 METHODOLOGY AND SURVEY DETAILS...................................................... 9-7
9.2.2 RESULTS ............................................................................................... 9-8
9.2.3 INTERPRETATION .................................................................................... 9-8
9.3 LIDAR SURVEY ................................................................................................... 9-11
9.4 RECONNAISSANCE MAPPING................................................................................. 9-14
10.0 DRILLING.......................................................................................................10-1
10.1 2011 DRILLING PROGRAM .................................................................................. 10-1
10.2 2012 DRILLING PROGRAM .................................................................................. 10-5
10.3 RESAMPLING OF 2011 CORE ............................................................................... 10-9
10.4 DRILL DATA AND DRILLING RESULTS ..................................................................... 10-9
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY .....................................11-1
11.1 SAMPLE PREPARATION ......................................................................................... 11-1
11.2 SAMPLE ANALYSES .............................................................................................. 11-3
12.0 DATA VERIFICATION ......................................................................................12-1
12.1 CARACLE CREEK SITE VISIT .................................................................................. 12-1
12.2 2011 ASSAY QUALITY CONTROL ........................................................................... 12-3
12.2.1 EXTERNAL CERTIFIED REFERENCE MATERIALS ........................................ 12-3
12.2.2 BLANKS .............................................................................................. 12-5
12.2.3 CORE DUPLICATES ............................................................................... 12-7
v 1191600400-REP-R0001-05
12.2.4 PREPARATION DUPLICATES .................................................................12-12
12.2.5 PULP DUPLICATES ..............................................................................12-12
12.2.6 CHECK ASSAYS ..................................................................................12-19
12.3 2012 ASSAY QUALITY CONTROL .........................................................................12-23
12.3.1 2012 EXTERNAL CRM ......................................................................12-23
12.3.2 2012 BLANKS ..................................................................................12-26
12.3.3 2012 CORE DUPLICATES ...................................................................12-27
12.3.4 2012 PREPARATION DUPLICATES .......................................................12-32
12.3.5 2012 PULP DUPLICATES....................................................................12-32
12.3.6 2012 CHECK ASSAYS........................................................................12-41
12.4 EARTHPROBE SURVEY QUALITY CONTROL ............................................................12-43
12.5 ROCK PROPERTY SURVEY QUALITY CONTROL........................................................12-43
12.5.1 PRE-MOBILIZATION QUALITY CONTROL..................................................12-43
12.5.2 ON-SITE QC ......................................................................................12-44
12.6 LIDAR SURVEY QUALITY CONTROL ......................................................................12-44
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING..............................13-1
13.1 KNELSON RESEARCH AND TECHNOLOGY CENTRE METALLURGICAL TEST REPORT
– JUNE 25, 2010 .............................................................................................. 13-1
13.2 KRTC METALLURGICAL TEST REPORT – AUGUST 6, 2010 ..................................... 13-3
13.3 SGS – MINERALOGICAL CHARACTERIZATION – JUNE 2011 .................................... 13-5
13.3.1 2010 MASTER COMPOSITE .................................................................. 13-6
13.3.2 2010 BAPTISTE 3............................................................................... 13-7
13.3.3 2010 SIDNEY 10 ............................................................................... 13-7
13.3.4 GRAIN SIZE A, B, C.............................................................................. 13-8
13.4 SGS – BENCH-SCALE INVESTIGATION – FEBRUARY 2012 ...................................... 13-9
14.0 MINERAL RESOURCE ESTIMATE ...................................................................14-1
14.1 INTRODUCTION .................................................................................................... 14-1
14.2 RESOURCE ESTIMATION METHODOLOGY ................................................................ 14-2
14.2.1 RESOURCE DATABASE, PREPARATION & COMPOSITING ............................ 14-2
14.2.2 DATA ANALYSIS AND COMPOSITING ........................................................ 14-4
14.2.3 VARIOGRAPHY....................................................................................14-11
14.2.4 BLOCK MODEL ..................................................................................14-15
14.2.5 RESOURCE MODEL VALIDATION ...........................................................14-16
14.2.6 MINERAL RESOURCE CLASSIFICATION ..................................................14-17
14.3 MINERAL RESOURCE STATEMENT........................................................................14-18
14.4 ISSUES THAT COULD AFFECT THE MINERAL RESOURCE..........................................14-19
15.0 MINERAL RESERVE ESTIMATE......................................................................15-1
16.0 MINING METHODS ........................................................................................16-1
16.1 INTRODUCTION .................................................................................................... 16-1
16.2 OVERVIEW .......................................................................................................... 16-1
16.3 PIT OPTIMIZATION ................................................................................................ 16-2
16.3.1 PIT OPTIMIZATION PROCEDURE ............................................................. 16-2
16.4 PIT OPTIMIZATION PARAMETERS............................................................................ 16-3
vi 1191600400-REP-R0001-05
16.4.1 ECONOMIC AND OPERATING PARAMETERS .............................................. 16-3
16.4.2 GEOLOGICAL BLOCK MODEL ................................................................. 16-4
16.4.3 OVERALL OPEN PIT SLOPE ANGLE ......................................................... 16-4
16.5 PIT OPTIMIZATION RESULTS .................................................................................. 16-4
16.5.1 CUT-OFF GRADE................................................................................... 16-9
16.6 PRODUCTION SCHEDULE ...................................................................................... 16-9
16.7 MINE DEVELOPMENT .........................................................................................16-11
16.7.1 MINE DEVELOPMENT SEQUENCES .......................................................16-11
16.7.2 IN-PIT HAUL ROAD..............................................................................16-14
16.7.3 PIT WATER HANDLING ........................................................................16-16
16.7.4 WASTE ROCK DISPOSAL .....................................................................16-16
16.7.5 EXPLOSIVES ......................................................................................16-16
16.7.6 ULTIMATE PIT DESIGN ........................................................................16-17
16.7.7 RESOURCE CONTAINED WITHIN PIT DESIGN .........................................16-19
16.7.8 MINIMUM MINING WIDTH ...................................................................16-20
16.8 MINE EQUIPMENT SELECTION .............................................................................16-20
16.8.1 DRILLING AND BLASTING PARAMETERS ................................................16-21
16.8.2 MAJOR EQUIPMENT SELECTION ...........................................................16-22
16.9 MINE OPERATING AND CAPITAL COSTS ..................................................................16-28
16.9.1 CAPITAL COSTS ..................................................................................16-28
16.9.2 MINE OPERATING COSTS ....................................................................16-31
16.9.3 OPEN PIT OPERATING MANPOWER ......................................................16-31
17.0 RECOVERY METHODS ...................................................................................17-1
17.1 INTRODUCTION .................................................................................................... 17-1
17.2 PROCESS DESIGN CRITERIA .................................................................................. 17-1
17.3 PROCESS DESCRIPTION........................................................................................ 17-4
17.4 PRODUCT QUALITY ............................................................................................... 17-6
18.0 PROJECT INFRASTRUCTURE .........................................................................18-1
18.1 SITE DEVELOPMENT............................................................................................. 18-1
18.2 BUILDINGS.......................................................................................................... 18-3
18.2.1 SERVICE AND ADMINISTRATIVE BUILDINGS ............................................. 18-3
18.2.2 ACCOMMODATIONS CAMP ..................................................................... 18-3
18.3 SERVICES ........................................................................................................... 18-4
18.3.1 WATER SUPPLY AND DISTRIBUTION........................................................ 18-4
18.3.2 SEWAGE TREATMENT ........................................................................... 18-4
18.3.3 WASTE MANAGEMENT .......................................................................... 18-5
18.3.4 FUEL STORAGE AND DISTRIBUTION ........................................................ 18-5
18.3.5 COMMUNICATIONS ............................................................................... 18-5
18.4 POWER SUPPLY AND DISTRIBUTION ....................................................................... 18-6
18.4.1 OFF-SITE POWER SUPPLY ..................................................................... 18-6
18.4.2 ON-SITE POWER DISTRIBUTION.............................................................. 18-7
18.5 SURFACE WATER MANAGEMENT ........................................................................... 18-8
18.6 TAILINGS MANAGEMENT FACILITY .......................................................................... 18-8
18.7 ROADS, SHIPPING AND LOGISTICS .......................................................................18-11
vii 1191600400-REP-R0001-05
18.7.1 ON-SITE ACCESS ROADS .....................................................................18-11
18.7.2 OFF-SITE ACCESS ROADS ....................................................................18-11
18.7.3 LOGISTICS .........................................................................................18-12
19.0 MARKET STUDIES AND CONTRACTS.............................................................19-1
20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY
IMPACT ..........................................................................................................20-1
20.1 ENVIRONMENTAL STUDIES .................................................................................... 20-1
20.1.1 EBS STUDY RESULTS AND ENVIRONMENTAL SENSITIVITIES ...................... 20-2
20.1.2 FUTURE WORK .................................................................................... 20-4
20.2 SITE MANAGEMENT ............................................................................................. 20-4
20.2.1 WASTE MANAGEMENT .......................................................................... 20-4
20.2.2 TAILINGS DISPOSAL.............................................................................. 20-5
20.2.3 WATER MANAGEMENT .......................................................................... 20-6
20.3 PERMITTING REQUIREMENTS ................................................................................ 20-7
20.4 PERMITTING PROCESS ......................................................................................... 20-8
20.5 COMMUNITY......................................................................................................20-10
20.5.1 FIRST NATIONS ..................................................................................20-11
20.6 MINE CLOSURE AND RECLAMATION .....................................................................20-11
21.0 CAPITAL AND OPERATING COSTS .................................................................21-1
21.1 CAPITAL COSTS ................................................................................................... 21-1
21.1.1 ESTIMATING METHODOLOGY ................................................................. 21-2
21.1.2 BASIS OF ESTIMATE.............................................................................. 21-4
21.2 PRE-PRODUCTION AND SUSTAINING CAPITAL ........................................................21-10
21.3 OPERATING COSTS ............................................................................................21-11
21.3.1 BASE DATE AND EXCHANGE RATES ......................................................21-14
21.3.2 ESTIMATE STRATEGY APPLICABLE TAXES...............................................21-14
22.0 ECONOMIC ANALYSIS....................................................................................22-1
22.1 BASIS OF EVALUATION .......................................................................................... 22-2
22.1.1 FINANCIAL MODEL ............................................................................... 22-2
22.2 ROYALTIES .......................................................................................................... 22-3
22.3 SMELTER TERMS ................................................................................................. 22-3
22.4 PRE-TAX FINANCIAL EVALUATIONS ......................................................................... 22-4
22.5 PRE-TAX SENSITIVITY ANALYSIS ............................................................................. 22-4
22.6 POST-TAX FINANCIAL ANALYSIS ............................................................................. 22-6
22.7 POST-TAX FINANCIAL RESULTS .............................................................................. 22-7
22.8 POST-TAX SENSITIVITY ANALYSIS ........................................................................... 22-8
22.9 DISCOUNTED CASH FLOW ANALYSIS ....................................................................22-10
23.0 ADJACENT PROPERTIES ................................................................................23-1
23.1 STRATTON RESOURCES INC. ................................................................................. 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION................................................24-1
viii 1191600400-REP-R0001-05
25.0 INTERPRETATIONS AND CONCLUSIONS .......................................................25-1
25.1 GEOLOGY AND RESOURCE ESTIMATE ..................................................................... 25-1
25.2 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................ 25-2
25.2.1 RISKS ................................................................................................. 25-4
25.3 MINING .............................................................................................................. 25-4
25.4 PROJECT INFRASTRUCTURE ................................................................................... 25-5
25.5 ENVIRONMENTAL ................................................................................................. 25-6
25.6 ECONOMIC ANALYSIS AND MARKETING .................................................................. 25-6
26.0 RECOMMENDATIONS....................................................................................26-1
26.1 SUMMARY .......................................................................................................... 26-1
26.2 GEOLOGY............................................................................................................ 26-3
26.3 PROCESSING AND MARKETING.............................................................................. 26-6
26.4 MINING .............................................................................................................. 26-7
26.5 INFRASTRUCTURE ................................................................................................ 26-7
26.6 ENVIRONMENTAL ................................................................................................. 26-8
26.7 PREFEASIBILITY STUDY COST ................................................................................ 26-8
26.7.1 COSTS ................................................................................................ 26-8
27.0 REFERENCES ................................................................................................27-1
LIST OF TABLES
Table 1.1 General Project Information......................................................................................... 1-1

Table 1.2 Mineral Resource Statement1 (Effective January 23, 2013)..................................... 1-5
Table 1.3 Milawa NVP Production Schedule by Year (With Fixed Lead 6~8) ............................ 1-8
Table 1.4 Capital Cost Summary (Level 1) ................................................................................1-12
Table 1.5 Contingency Analysis..................................................................................................1-12
Table 1.6 Pre-production Cost (Level 1) ....................................................................................1-13
Table 1.7 Unit Operating Cost by Operating Cost Area .............................................................1-14
Table 1.8 Operating Cost by OBS ...............................................................................................1-14
Table 1.9 Basis of Financial Analysis.........................................................................................1-16
Table 1.10 Pre-tax NPV and IRR ...................................................................................................1-16
Table 1.11 Post-tax NPV and IRR .................................................................................................1-17
Table 1.12 Components of the Various Taxes.............................................................................1-18
Table 1.13 Recommended Future Work......................................................................................1-19
Table 2.1 Summary of QPs ........................................................................................................... 2-1
Table 4.1 List of the Decar Project Claims .................................................................................. 4-3
Table 6.1 List of Companies that Completed Work on the Decar Property............................... 6-1
Table 7.1 Analytical Results .......................................................................................................7-12
Table 9.1 VP Survey Summary ..................................................................................................... 9-2
Table 9.2 Multi-bore Tomography Survey Summary ................................................................... 9-2
Table 9.3 List of Drillholes Surveyed by DGI in 2011 and of Survey Parameters..................... 9-5
ix 1191600400-REP-R0001-05
Table 9.4 List of Drillholes Surveyed by DGI in 2012 and of Survey Parameters..................... 9-6
Table 9.5 List of Probes, Resolutions and Sampling Speeds Used at Decar ............................ 9-7
Table 9.6 List of Parameters Measured by Each Probe ............................................................. 9-7
Table 9.7 Example of Structural Data Provided by the Acoustic Televiewer Survey
for Hole 11BAP001 ....................................................................................................9-11
Table 9.8 LiDAR Survey Parameters ..........................................................................................9-12
Table 10.1 Details of the Cliffs 2011 Drillholes ..........................................................................10-2
Table 10.2 Details of First Point’s 2010 Drillholes included in the Current Resource
Estimate ......................................................................................................................10-3
Table 10.3 Details of the 2012 Drillholes....................................................................................10-6
Table 10.4 Weighted Average Assay Results of Selected Intervals of the 2011 Drillholes... 10-10
Table 10.5 Weighted Average Assay Results of Selected Intervals of the 2012 Drillholes... 10-13
Table 11.1 Overview of the CRM Used During the 2011 Drilling Program ................................11-1
Table 11.2 Overview of the CRM Used During the 2012 Drilling Program ................................11-1
Table 11.3 Parameters of the Davis Tube Analysis.....................................................................11-3
Table 12.1 Comparison of the Davis Tube Parameters Used by Actlabs and SGS ................ 12-19
Table 12.2 Infield QA/QC Data Verification Criteria ................................................................. 12-43
Table 12.3 Results of the LiDAR Quality Control Using Ground Check Points........................ 12-44
Table 13.1 GAT Total Nickel Recovery and Grade for P80 = 270 µm .........................................13-2
Table 13.2 GAT Total Nickel Recovery and Grade for P80 = 89 µm............................................13-2
Table 13.3 Total Nickel Recovery and Grade for August 6, 2010 KRTC Test Work..................13-4
Table 13.4 Summary of Material Used in Composite Samples..................................................13-6
Table 13.5 Summary of QEMSCAN Modal Results......................................................................13-6
Table 13.6 Deportment of Nickel among Nickel Containing Species ........................................13-7
Table 13.7 Magnetically Recoverable Associations of Awaruite ................................................13-8
Table 13.8 Grain Sizes included in Grain Size Composite..........................................................13-8
Table 13.9 Discussion of Grain Size in SI Units...........................................................................13-9
Table 13.10 General Composite Head Grade............................................................................. 13-11
Table 13.11 Calculated Overall Nickel Recoveries when Producing a 13.5% Total
Nickel Concentrate .................................................................................................. 13-11
Table 14.1 Mineral Resource Statement1 ...................................................................................14-1
Table 14.2 Data Used in Estimating the Mineral Resources at Decar.......................................14-2
Table 14.3 Summary of Raw Assay Data Statistics for all Samples Within the
Mineralized Domain ...................................................................................................14-8
Table 14.4 Sensitivity of Mean DTR Ni% with Change in Capping Value ...................................14-8
Table 14.5 Block Model Definitions for Decar.......................................................................... 14-15
Table 14.6 Parameters Used in the Grade Definition .............................................................. 14-15
Table 14.7 Block Model versus Raw Assay Data (DTR Ni%) Statistical Analysis.................... 14-16
Table 14.8 Parameters Used in the Conceptual Pit Design..................................................... 14-18
Table 14.9 Mineral Resource Statement1 ................................................................................ 14-18
Table 14.10 Block Model Quantities and Grades Reported at Various Cut-off Grades ........... 14-19
Table 16.1 Ultimate Pit Design Results Including Dilution .........................................................16-1
Table 16.2 Base Case Input Parameters for Gemcom Whittle™ Pit Optimization .....................16-3
Table 16.3 Optimization Results of Nested Pits..........................................................................16-6
Table 16.4 Milawa NPV Production Schedule by Year (with fixed lead 6~8).......................... 16-10
Table 16.5 Production Schedule by Phase ............................................................................... 16-12
Table 16.6 Ramp Width Calculation for Pit Design .................................................................. 16-15
Table 16.7 Pit Design Parameters and Assumptions............................................................... 16-18
Table 16.8 Mineralized Material Estimated in the Ultimate Pit............................................... 16-20
Table 16.9 Drill and Blast Pattern Parameters......................................................................... 16-21
Table 16.10 United Taconite Equipment Availabilities for 2011............................................... 16-23
Table 16.11 Tetra Tech’s Criteria for Equipment Availabilities.................................................. 16-24
x 1191600400-REP-R0001-05
Table 16.12 Truck Fleet Requirements for Year 1 and Year 2 .................................................. 16-24
Table 16.13 Shovel Fleet Requirements for Year 1 and Year 2 ................................................ 16-25
Table 16.14 Drill Fleet Requirements for Year 1 and Year 2..................................................... 16-27
Table 16.15 Start Up and LOM Capital Costs ............................................................................. 16-28
Table 16.16 Mobile and Support Equipment Capital Cost Details............................................ 16-29
Table 16.17 Operating Cost Summary by Expense for Mine Operations .................................. 16-31
Table 16.18 Manpower List ......................................................................................................... 16-32
Table 17.1 General Description of Major Process Equipment ...................................................17-6
Table 18.1 Project Power Demand...............................................................................................18-6
Table 19.1 Hatch Summary of Economic and Market Based Assessment ...............................19-4
Table 20.1 EBS Components........................................................................................................20-1
Table 20.2 BC Provincial Authorizations and Permits.................................................................20-9
Table 20.3 Federal Authorizations and Permits ....................................................................... 20-10
Table 21.1 Capital Cost Summary (Level 1) ................................................................................21-1
Table 21.2 WBS Level 1 Capital Cost Estimate...........................................................................21-3
Table 21.3 Contingency Analysis..................................................................................................21-9
Table 21.4 Pre-production Cost (Level 1) ................................................................................. 21-10
Table 21.5 Sustaining Capital (Level 1) .................................................................................... 21-11
Table 21.6 Unit Operating Cost by Operating Cost Area .......................................................... 21-11
Table 21.7 Variable Cost Breakdown by OBS........................................................................... 21-12
Table 21.8 Operating Cost by OBS ............................................................................................ 21-13
Table 21.9 Organizational Breakdown Structure – Overall Accuracy ..................................... 21-14
Table 22.1 Basis of Financial Analysis.........................................................................................22-3
Table 22.2 Pre-tax NPV and IRR ...................................................................................................22-4
Table 22.3 Components of the Various Taxes.............................................................................22-7
Table 22.4 Post-tax NPV and IRR .................................................................................................22-7
Table 22.5 Discounted Cash Flow (Years -2 to 4) .................................................................... 22-11
Table 22.6 Discounted Cash Flow (Years 5 to 10)................................................................... 22-14
Table 22.7 Discounted Cash Flow (Years 11 to 16)................................................................. 22-17
Table 25.1 Results of the Resource Estimate1............................................................................25-2
Table 25.2 General Mine Design Results ....................................................................................25-5
Table 26.1 Recommended Future Work......................................................................................26-1
Table 26.2 List of Proposed Drillholes .........................................................................................26-4
Table 26.3 Proposed Budget for Recommended Field Work .....................................................26-4
Table 26.4 Future Laboratory Studies and Cost..........................................................................26-7
Table 26.5 Recommended Activity Costs for Prefeasibility Study ..............................................26-9
LIST OF FIGURES
Figure 1.1 Location of the Decar Property in BC, Canada ........................................................... 1-4
Figure 1.2 Milawa NPV Production Schedule by Year (With Fixed Lead 6~8) ............................ 1-8
Figure 1.3 Pre-tax NPV versus Discount Rate for Base Case ....................................................1-17
Figure 1.4 Pre-tax and Post-tax NPV versus Discount Rate.......................................................1-18
Figure 4.1 Location of the Decar Property in BC, Canada ........................................................... 4-2
Figure 4.2 Map Showing the Mineral Claims of the Decar Property ........................................... 4-5
xi 1191600400-REP-R0001-05
Figure 4.3 Map Showing Surface Rights Distribution on the Cliffs Claims ................................. 4-8
Figure 5.1 Map Showing the Access to the Property from Fort St. James, BC ........................... 5-3
Figure 7.1 Regional Geological Map Showing the Location of the Property in the
Intermontane Belt of BC............................................................................................... 7-2
Figure 7.2 Property Shown on a Terrane Map.............................................................................. 7-3
Figure 7.3 Property Geology Map .................................................................................................. 7-4
Figure 7.4 Map Showing Location of Two Historic Fibrous Material Occurrences from
BC MinFile which Correlate to Armstrong’s (1949) Occurrences.............................. 7-9
Figure 7.5 Drill Core Photo, Drillhole 12BAP038, 126 m ..........................................................7-10
Figure 7.6 Map Showing the Locations of Drillholes from Which Fibrous Samples Were
Collected .....................................................................................................................7-11
Figure 9.1 Example VP Apparent Resistivity and Chargeability Striplog for Borehole
11BAP031 .................................................................................................................... 9-4
Figure 9.2 Figure Showing the Rock Property Results for Hole 11BAP001 (20-140 m) ........... 9-9
Figure 9.3 Example of the Acoustic and Optical Televiewer Results for Drillhole
11BAP001 ..................................................................................................................9-10
Figure 9.4 Orthophoto Taken During the LiDAR Survey .............................................................9-13
Figure 9.5 Geology Map Showing Mapped Outcrops in Bold Colours and Inferred
Geology in Faint Colours ............................................................................................9-15
Figure 9.6 Alteration Map of a Part of the Property ...................................................................9-16
Figure 10.1 Map Showing all Holes Drilled in 2011 and the 2010 Drillholes that were
Included in the Resource Estimate ...........................................................................10-4
Figure 10.2 Core Storage Location in Fort St. James, BC ............................................................10-5
Figure 10.3 Drillholes Drilled at the Baptiste Prospect in 2010, 2011 and 2012.....................10-8
Figure 10.4 SSW-NNE Section Across the Mineralized Body, Looking WNW........................... 10-16
Figure 10.5 Strip Log of Hole 11BAP002................................................................................... 10-17
Figure 10.6 Strip Log of Hole 11BAP007................................................................................... 10-18
Figure 10.7 Strip Log for Drillhole 12BAP036 (0 to 300 m) ..................................................... 10-19
Figure 10.8 Strip Log for Drillhole 12BAP036 (300-600 m)..................................................... 10-20
Figure 11.1 Core Storage Area in Fort St. James..........................................................................11-2
Figure 12.1 Drill Core from Hole 11BAP024, 185 m ...................................................................12-1
Figure 12.2 Core Logging Facility at Decar ...................................................................................12-2
Figure 12.3 Rig Drilling Hole 12BAP061.......................................................................................12-2
Figure 12.4 Performance of OREAS 13b with Time......................................................................12-4
Figure 12.5 Performance of OREAS 73a with Time......................................................................12-5
Figure 12.6 Performance of Blanks Inserted into the Sample Stream .......................................12-6
Figure 12.7 Performance of Core Duplicates for Nickel as Analyzed by ICP ..............................12-8
Figure 12.8 Performance of the Davis Tube Magnetic Fraction of the Core Duplicates............12-9
Figure 12.9 Performance of Core Duplicates for Nickel as Analyzed by XRF on the
Davis Tube Concentrate.......................................................................................... 12-10
Figure 12.10 Performance of Core Duplicates for DTR Nickel.................................................... 12-11
Figure 12.11 Performance of Preparation Duplicates for Nickel as Analyzed by ICP................ 12-13
Figure 12.12 Performance of the Davis Tube Magnetic Fraction of the Preparation
Duplicates ................................................................................................................ 12-14
Figure 12.13 Performance of Preparation Duplicates for Nickel as Analyzed by XRF
on the Davis Tube Concentrate .............................................................................. 12-15
Figure 12.14 Performance of Preparation Duplicates for DTR Nickel........................................ 12-16
Figure 12.15 Pulp Duplicates for Nickel (ICP).............................................................................. 12-17
Figure 12.16 Pulp Duplicates for Nickel (XRF)............................................................................. 12-18
Figure 12.17 Plot Showing the Original Samples versus the Check Samples for the
Davis Tube Magnetic Weight Fraction.................................................................... 12-20
xii 1191600400-REP-R0001-05
Nickel Analysis by XRF............................................................................................. 12-21
DTR Nickel................................................................................................................ 12-22
Figure 12.20 Performance of OREAS 13b (ICP CRM) with Time................................................. 12-24
Figure 12.21 Performance of OREAS 72b (Low-grade XRF CRM) with Time.............................. 12-24
Figure 12.22 Performance of OREAS 74b (Medium-grade XRF CRM) with Time ...................... 12-25
Figure 12.23 Performance of OREAS 75b (High-grade XRF CRM) with Time............................. 12-25
Figure 12.24 Performance of the Blank Material During ICP Analysis with Time ...................... 12-26
Figure 12.25 Performance of the Blank Material During XRF Analysis with Time ..................... 12-26
Figure 12.26 2012 Core Duplicates for Nickel Analyzed by ICP ................................................. 12-28
Figure 12.27 Plot Showing 2012 Core Duplicates for the Magnetic Fraction (Davis Tube
Concentrate) ............................................................................................................ 12-29
Figure 12.28 2012 Core Duplicates for Nickel Analyzed by XRF ................................................ 12-30
Figure 12.29 2012 Core Duplicates for DTR Nickel .................................................................... 12-31
Figure 12.30 Preparation Duplicates for Nickel Analyzed by ICP ............................................... 12-33
Figure 12.31 Preparation Duplicates for the Magnetic Fraction (Davis Tube Concentrate) ..... 12-34
Figure 12.32 Preparation Duplicates for Nickel as Analyzed by XRF ......................................... 12-35
Figure 12.33 Preparation Duplicates for DTR Nickel................................................................... 12-36
Figure 12.34 Pulp Duplicates for ICP............................................................................................ 12-37
Figure 12.35 Pulp Duplicates for the Magnetic Fraction (Davis Tube Concentrate) ................. 12-38
Figure 12.36 Pulp Duplicates for XRF Nickel ............................................................................... 12-39
Figure 12.37 Pulp Duplicates for DTR Nickel............................................................................... 12-40
Figure 12.38 Scatter Plot of DTR Nickel Analysis by Actlabs and Check Assay Results
by AGAT .................................................................................................................... 12-42
Figure 13.1 Cumulative GAT Recovery versus Concentrate Mass Yield for Total Nickel ...........13-3
Figure 13.2 Cumulative Recovery versus Concentrate Mass Yield for Decar 3 Pass
Sala CN Sample..........................................................................................................13-4
Figure 13.3 Drillhole Collar and Projected Hole Traced for Material used in Scoping
Mineralogy and Metallurgy Tests...............................................................................13-5
Figure 13.4 Simplified Process Flow Diagram ........................................................................... 13-12
Figure 14.1 Drillhole Distribution with the Mineralized Domain..................................................14-2
Figure 14.2 Plan View of the Geology Model and the Mineralized Domain ................................14-3
Figure 14.3 3D View of the Geology Model and the Mineralized Domain
(Looking Northwest) ...................................................................................................14-4
Figure 14.4 Histogram Plot Showing the Distribution of Assay Lengths .....................................14-6
Figure 14.5 Probability Plot Showing the Distribution of Assay Lengths.....................................14-7
Figure 14.6 DTR Ni% Cumulative Frequency Plot.........................................................................14-9
Figure 14.7 Histogram Showing DTR Ni% Grade Distribution................................................... 14-10
Figure 14.8 Variogram for DTR Nickel in the Mineralized Domain in the Major Direction...... 14-12
Figure 14.9 Variogram for DTR Nickel in the Mineralized Domain in the Semi-major
Direction................................................................................................................... 14-13
Figure 14.10 Variogram for DTR Nickel in the Mineralized Domain in the Minor Direction...... 14-14
Figure 14.11 3D View Showing the Block Model ......................................................................... 14-16
Figure 16.1 Pit Optimization Graph ...............................................................................................16-5
Figure 16.2 3D Conceptual View of Optimum Pit Shell #31 ........................................................16-9
Figure 16.3 Milawa NPV Production Schedule by Year (with fixed lead 6~8).......................... 16-11
Figure 16.4 Sequence of Phase Advance .................................................................................. 16-12
Figure 16.5 Four Phases and Block Model Grades: Longitudinal Section View (A-A).............. 16-13
Figure 16.6 Four Phases and Block Model Grades: Transverse Section View (B-B) ............... 16-13
Figure 16.7 Production Schedule by phase ............................................................................... 16-14
Figure 16.8 Conceptual Ramps and Haul Road Cross Section ................................................ 16-15
xiii 1191600400-REP-R0001-05
Figure 16.9 Relationship Between Batter Angle, Berm Width, Bench Height and
Inter-ramp Angle ...................................................................................................... 16-17
Figure 16.10 Plan View of Ultimate Pit Design............................................................................. 16-19
Figure 16.11 Minimum Mining Width Schematic ........................................................................ 16-20
Figure 17.1 Two-Piece Circuit Simplified Process Flow Diagram.................................................17-3
Figure 18.1 Decar Project Site Plan ..............................................................................................18-2
Figure 18.2 Glenannan Substation Location and Conceptual Transmission Line Routing .......18-7
Figure 18.3 Tailings Management Facility ................................................................................. 18-10
Figure 18.4 Existing and Proposed Routes from Fort St. James to the Project Site ............... 18-12
Figure 22.1 Nickel Market and Point of Entry for Decar Concentrate.........................................22-1
Figure 22.2 Pre-tax NPV versus Discount Rate for Base Case ....................................................22-4
Figure 22.3 Capital and Operating Cost and NSR Sensitivity – NPV versus Discount Rate ......22-5
Figure 22.4 Pre-tax IRR Sensitivity ................................................................................................22-6
Figure 22.5 Pre-tax and Post-tax NPV versus Discount Rate.......................................................22-8
Figure 22.6 Capital and Operating Costs and NSR Sensitivity – Post-tax NPV versus
Discount Rate .............................................................................................................22-9
Figure 22.7 Post-tax IRR Sensitivity............................................................................................ 22-10
Figure 23.1 Map Showing the Ownership of Claims Adjacent to the Decar Property ................23-2
Figure 25.1 Nickel Market and Point of Entry for Decar Concentrate.........................................25-7
Figure 26.1 Decar Project Schedule..............................................................................................26-3
Figure 26.2 Proposed Drill Plan for the Decar Project .................................................................26-5
APPENDICES
APPENDIX A CERTIFICATES OF QUALIFIED PERSONS

APPENDIX B ANALYTICAL CERTIFICATES FOR CHRYSOTILE ANALYSIS
GLOSSARY
UNITS OF MEASURE
above mean sea level............................................................................................................. amsl
acre .......................................................................................................................................... ac
ampere .................................................................................................................................... A
annum (year) ........................................................................................................................... a
billion ....................................................................................................................................... B
billion tonnes........................................................................................................................... Bt
billion years ago ...................................................................................................................... Ga
British thermal unit ................................................................................................................. BTU
centimetre ............................................................................................................................... cm
xiv 1191600400-REP-R0001-05
cubic centimetre ..................................................................................................................... cm3
cubic feet per minute.............................................................................................................. cfm
cubic feet per second ............................................................................................................. ft3/s
cubic foot................................................................................................................................. ft3
cubic inch ................................................................................................................................ in3
cubic metre ............................................................................................................................. m3
cubic yard ................................................................................................................................ yd3
Coefficients of Variation ......................................................................................................... CVs
day ........................................................................................................................................... d
days per week ......................................................................................................................... d/wk
days per year (annum)............................................................................................................ d/a
dead weight tonnes ................................................................................................................ DWT
decibel adjusted...................................................................................................................... dBa
decibel ..................................................................................................................................... dB
degree...................................................................................................................................... °
degrees Celsius....................................................................................................................... °C
diameter .................................................................................................................................. ø
dollar (American)..................................................................................................................... US$
dollar (Canadian)..................................................................................................................... Cdn$
dry metric ton .......................................................................................................................... dmt
foot........................................................................................................................................... ft
gallon ....................................................................................................................................... gal
gallons per minute (US) .......................................................................................................... gpm
Gigajoule.................................................................................................................................. GJ
gigapascal ............................................................................................................................... GPa
gigawatt ................................................................................................................................... GW
gram......................................................................................................................................... g
grams per litre......................................................................................................................... g/L
grams per tonne...................................................................................................................... g/t
greater than............................................................................................................................. >
hectare (10,000 m2)............................................................................................................... ha
hertz......................................................................................................................................... Hz
horsepower.............................................................................................................................. hp
hour.......................................................................................................................................... h
hours per day .......................................................................................................................... h/d
hours per week........................................................................................................................ h/wk
hours per year ......................................................................................................................... h/a
inch .......................................................................................................................................... in
kilo (thousand) ........................................................................................................................ k
kilogram................................................................................................................................... kg
kilograms per cubic metre...................................................................................................... kg/m3
kilograms per hour.................................................................................................................. kg/h
kilograms per square metre ................................................................................................... kg/m2
kilometre ................................................................................................................................. km
kilometres per hour ................................................................................................................ km/h
xv 1191600400-REP-R0001-05
kilopascal ................................................................................................................................ kPa
kilotonne.................................................................................................................................. kt
kilovolt ..................................................................................................................................... kV
kilovolt-ampere........................................................................................................................ kVA
kilovolts.................................................................................................................................... kV
kilowatt .................................................................................................................................... kW
kilowatt hour............................................................................................................................ kWh
kilowatt hours per tonne......................................................................................................... kWh/t
kilowatt hours per year ........................................................................................................... kWh/a
less than .................................................................................................................................. <
litre........................................................................................................................................... L
litres per minute...................................................................................................................... L/m
megabytes per second ........................................................................................................... Mb/s
megapascal ............................................................................................................................. MPa
megavolt-ampere .................................................................................................................... MVA
megawatt................................................................................................................................. MW
metre ....................................................................................................................................... m
metres above sea level .......................................................................................................... masl
metres Baltic sea level ........................................................................................................... mbsl
metres per minute .................................................................................................................. m/min
metres per second.................................................................................................................. m/s
microns.................................................................................................................................... µm
milligram.................................................................................................................................. mg
milligrams per litre .................................................................................................................. mg/L
millilitre .................................................................................................................................... mL
millimetre ................................................................................................................................ mm
millisecond .............................................................................................................................. ms
millivolt .................................................................................................................................... mV
million ...................................................................................................................................... M
million bank cubic metres ...................................................................................................... Mbm3
million bank cubic metres per annum................................................................................... Mbm3/a
million tonnes.......................................................................................................................... Mt
minute (plane angle)............................................................................................................... '
minute (time)........................................................................................................................... min
month ...................................................................................................................................... mo
ohm meters ............................................................................................................................. Ohm.m
ounce ....................................................................................................................................... oz
pascal ...................................................................................................................................... Pa
centipoise ................................................................................................................................ mPa∙s
parts per million ...................................................................................................................... ppm
parts per billion ....................................................................................................................... ppb
percent .................................................................................................................................... %
pound(s) .................................................................................................................................. lb
pounds per square inch.......................................................................................................... psi
revolutions per minute............................................................................................................ rpm
xvi 1191600400-REP-R0001-05
second (plane angle) .............................................................................................................. "
second (time) .......................................................................................................................... s
short ton (2,000 lb)................................................................................................................. st
short tons per day ................................................................................................................... st/d
short tons per year.................................................................................................................. st/y
specific gravity......................................................................................................................... SG
square centimetre................................................................................................................... cm2
square foot .............................................................................................................................. ft2
square inch.............................................................................................................................. in2
square kilometre..................................................................................................................... km2
square metre........................................................................................................................... m2
three-dimensional ................................................................................................................... 3D
tonne (1,000 kg) (metric ton)................................................................................................. t
tonnes per day ........................................................................................................................ t/d
tonnes per hour....................................................................................................................... t/h
tonnes per year ....................................................................................................................... t/a
tonnes seconds per hour metre cubed ................................................................................. ts/hm3
volt ........................................................................................................................................... V
week......................................................................................................................................... wk
weight/weight.......................................................................................................................... w/w
wet metric ton ......................................................................................................................... wmt
ABBREVIATIONS AND ACRONYMS

acid base accounting............................................................................................................... ABA
acid rock drainage ................................................................................................................... ARD
Activation Laboratories Ltd. .................................................................................................... Actlabs
AGAT Laboratories Ltd. ............................................................................................................ AGAT
Allnorth Consultants Ltd. ......................................................................................................... Allnorth
ammonium nitrate/fuel oil ...................................................................................................... ANFO
archaeological impact assessment ........................................................................................ AIA
archaeology overview assessment ......................................................................................... AOA
Bandstra Transportation Systems Ltd.................................................................................... Bandstra
British Columbia....................................................................................................................... BC
Canadian Institute of Mining, Metallurgy and Petroleum...................................................... CIM
Caracle Creek International Consulting Inc............................................................................ Caracle Creek
certified reference material..................................................................................................... CRM
Cliffs Natural Resources Exploration Canada Inc. ................................................................. Cliffs
Davis Tube Recoverable.......................................................................................................... DTR
DGI Geoscience Inc.................................................................................................................. DGI
diamond drillhole ..................................................................................................................... DDH
differential global positioning system..................................................................................... DGPS
direct current induced polarization......................................................................................... DCIP
electric arc furnace.................................................................................................................. EAF
electromagnetic ....................................................................................................................... EM
xvii 1191600400-REP-R0001-05
EMSL Analytical Inc.................................................................................................................. EMSL
engineering, procurement, and construction management costs........................................ EPCM
Environmental Assessment Office.......................................................................................... EAO
environmental assessment..................................................................................................... EA
environmental baseline studies.............................................................................................. EBSs
First Point Minerals Corp......................................................................................................... First Point
flash furnace sulphide smelter ............................................................................................... FFSS
fleet production and cost ........................................................................................................ FPC
Forest Service Road................................................................................................................. FSR
Glenannan Substation............................................................................................................. GLN
global positioning system........................................................................................................ GPS
Goods and Services Tax .......................................................................................................... GST
Gravity Amenability Test .......................................................................................................... GAT
harmful alteration, disruption or destruction......................................................................... HADD
Harmonized Sales Tax ............................................................................................................. HST
high pressure grinding rolls..................................................................................................... HPGR
high-density polyethylene........................................................................................................ HDPE
induced polarization ................................................................................................................ IP
inductively coupled plasma..................................................................................................... ICP
inertial navigation system ....................................................................................................... INS
information technology............................................................................................................ IT
internal rate of return .............................................................................................................. IRR
International Electrotechnical Commission ........................................................................... IEC
International Organization for Standardization...................................................................... ISO
Klohn Krippen Berger Ltd........................................................................................................ KCB
Knelson Research and Technology Centre ............................................................................ KRTC
KPMG LLP................................................................................................................................. KPMG
Lerchs-Grossman..................................................................................................................... LG
life-of-mine ............................................................................................................................... LOM
light detection and ranging ..................................................................................................... LiDAR
London Metal Exchange .......................................................................................................... LME
material take-offs..................................................................................................................... MTOs
Memorandum of Understanding............................................................................................. MOU
metal leaching.......................................................................................................................... ML
National Instrument 43-101 ................................................................................................... NI 43-101
net present value..................................................................................................................... NPV
net smelter return.................................................................................................................... NSR
nickel pig iron........................................................................................................................... NPI
non-acid generating................................................................................................................. NAG
North American Datum............................................................................................................ NAD
ordinary kriging ........................................................................................................................ OK
Ore Research and Exploration Pty Ltd.................................................................................... ORE
organizational breakdown structure....................................................................................... OBS
platinum group element .......................................................................................................... PGE
preliminary economic assessment ......................................................................................... PEA
xviii 1191600400-REP-R0001-05
preliminary field reconnaissance............................................................................................ PFR
present value ........................................................................................................................... PV
polarized light microscopy....................................................................................................... PLM
Qualified Person....................................................................................................................... QP
quality assurance/quality control ........................................................................................... QA/QC
Regional Mine Development Review Committee................................................................... RMDRC
roast reduction sulphide smelter............................................................................................ RRSS
run-of-mine............................................................................................................................... ROM
serial number........................................................................................................................... SN
SGS Minerals Services ............................................................................................................ SGS
shake flask extraction ............................................................................................................. SFE
Stratton Resources Inc............................................................................................................ Stratton
tailings management facility ................................................................................................... TMF
Terra Remote Sensing Inc. ...................................................................................................... Terra Remote
Terrestrial Ecosystem Mapping............................................................................................... TEM
the Decar Nickel Project.......................................................................................................... the Project
the Decar Nickel Property ....................................................................................................... the Property
total suspended solids ............................................................................................................ TSS
traditional knowledge .............................................................................................................. TK
traditional use .......................................................................................................................... TU
Universal Transverse Mercator ............................................................................................... UTM
vertical profiles......................................................................................................................... VP
very-low frequency ................................................................................................................... VLF
vibrating wire piezometer ........................................................................................................ VWP
Voice over Internet Protocol .................................................................................................... VoIP
Work Breakdown Structure ..................................................................................................... WBS
x-ray diffraction ........................................................................................................................ XRD
x-ray fluorescence.................................................................................................................... XRF
xix 1191600400-REP-R0001-05
1.0 SUMMARY
1.1 INTRODUCTION
Cliffs Natural Resources Exploration Canada Inc. (Cliffs) retained Tetra Tech to prepare a
National Instrument 43-101 (NI 43-101) compliant technical report and preliminary
economic assessment (PEA) for the Decar Nickel Project (the Project). This report was
prepared as a requirement under the terms of an option agreement between Cliffs and
First Point Minerals Corp. (First Point).
The Decar Nickel Property (the Property) involves the development of a nickel deposit
located in central British Columbia (BC), Canada, approximately 90 km northwest of Fort
St. James.
The effective date of this report is March 22, 2013 and the effective date of the resource
estimate is January 23, 2013. All currency is in Canadian dollars, unless otherwise
noted.
General information for the Project is summarized in Table 1.1.
Table 1.1 General Project Information

Description Unit Amount
Estimated Mineral Resources (Indicated) Mt 1,159.5
Estimated Mineral Resources (Inferred) Mt 870.4
In Pit Indicated Resource Diluted Mt 730.0
In Pit indicated Resource Grade % 0.119
In Pit Inferred Resource Diluted Mt 195.0
In Pit Inferred Resource Grade % 0.114
Life-of-mine (LOM) years 24
(including Indicated and Inferred Resources)
Milling Rate t/d 114,000
Strip Ratio t waste:mineralized material 0.17
Total Project Capital Cost $ million 2,147
Average Overall Operating Cost $/t milled 6.92
Post-tax Net Present Value (NPV) $ million 579
at an 8% Discount Rate
table continues…
First Point Minerals Corp. 1-1 1191600400-REP-R0001-05

Preliminary Economic Assessment – Decar Nickel Project,
British Columbia, Canada (Amended)
Nickel Price US$/lb 9.39
Post-tax Internal Rate of Return (IRR) % 12.8
Payback Period (post-tax) years 6.4
Note: Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Inferred mineral resources have a high degree of uncertainty as to their existence, and a great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of
an Inferred Resource will ever be upgraded to a higher category.
Tetra Tech worked with an additional consulting company that took responsibility for
various portions of the study. The areas of responsibility for each consultant are:
 Tetra Tech – overall project management, mineral processing and metallurgical

testing, mining methods, recovery methods, infrastructure, market studies and
contracts, capital and operating costs, and economic analysis
 Caracle Creek International Consulting Inc. (Caracle Creek) – property
description and location; accessibility, climate, and physiology; history;
geological setting and mineralization; deposit types; exploration; drilling; sample
preparation; data verification; adjacent properties; mineral resource estimate;
and environmental studies, permitting, and social or community impact.
1.2 PROPERTY DESCRIPTION AND OWNERSHIP

The Property is located approximately 90 km northwest of Fort St. James, BC, Canada,
and consists of 60 mineral claims covering 24,516.961 ha (Figure 1.1). Cliffs and First
Point are parties to an option agreement dated November 12, 2009 and amended on
November 30, 2009, September 12, 2011, November 9, 2011, and July 31, 2012.
Effective as of September 12, 2011, Cliffs owns 51% interest in the Property and First
Point owns 49%.
1.3 EXPLORATION
A borehole induced polarization (IP) survey was completed on selected drillholes on the
Property. Results indicate that a general trend of low resistivity and high chargeability is
associated with the peridotite-hosted awaruite mineralization, however, the apparent
trend may not have a first order relationship with Davis tube recoverable (DTR) nickel, but
a higher order relationship with other factors (e.g. magnetite abundance).
A light detection and ranging (LiDAR) survey was completed on the Property. The survey
resulted in accurate elevation data and a digital orthophoto.
1.4 GEOLOGICAL SETTING AND MINERALIZATION

The Property is located within the Cache Creek Terrane, which consists of metavolcanic
and metasedimentary rocks of the Sitlika assemblage and the Cache Creek complex

(alpine type peridotites and metasedimentary rocks). The mineralized peridotites of the
Property belong to the Trembleur ultramafic unit of the Cache Creek complex, a part of an
obducted Upper Paleozoic and Lower Mesozoic ophiolite sequence. The peridotites are
variably serpentinized. The nickel alloy awaruite formed during serpentinization of
nickeliferous olivine in the peridotite.

Figure 1.1 Location of the Decar Property in BC, Canada

1.5 DRILLING
A diamond drilling program consisting of 36 drillholes totalling 11,161 m was completed
on the Property in 2011. Thirty-five holes were drilled on the Baptiste prospect (on
claims 575677 and 575675) with the goal to estimate a resource at that prospect. One
hole was drilled at the Target B area, approximately 5 km north of Baptiste. The
peridotite in all holes was mineralized.
In 2012, a further 34 drillholes totalling 16,494.75 m were drilled. All holes were drilled
in the Baptiste prospect area (on claims 575675, 575677, and 575684). The purpose
of the 2012 drillholes was to increase the resource estimated based on the 2011 drilling
(Ronacher et al. 2012).
Downhole geophysical rock property surveys were completed in selected boreholes in

2011 and 2012. Significant rock property contrasts were determined between the
mineralized peridotite and barren, cross-cutting dykes. In addition, Acoustic and Optical
Televiewer surveys obtained data on structural features and lithological contacts. This
information was used to build a geological model for the purpose of estimating a mineral
resource.
1.6 MINERAL RESOURCE ESTIMATE

The 2011 and 2012 drilling data and re-assayed core from the 2010 drilling completed
by First Point were used to create a geological model and estimate a resource of the
Baptiste prospect at the Property. Caracle Creek used the ordinary kriging (OK) method
to estimate the following resources:
1
Table 1.2 Mineral Resource Statement (Effective January 23, 2013)
Grade Contained
Resource Quantity DTR Ni Ni
Category (t)2 (%) (t)
Indicated 1,159,510,000 0.124 1,437,800
Inferred 870,400,000 0.125 1,088,000
Notes: 1 Reported at a cut-off grade of 0.06 DTR Ni %. Mineral resources are not mineral reserves and do
not demonstrate economic viability.
2 Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant
digits. The mineral resources were also constrained with a Gemcom Whittle ™ pit.
1.7 MINERAL PROCESSING AND METALLURGICAL TESTING

The objective of the mineral processing and metallurgical PEA level test work was to
determine the major mineralization characteristics and the metallurgical response of the
Decar awaruite deposit. These tests were conducted to determine the major species
present in the material and their abundance, as well as the association and liberation
characteristics of awaruite specifically. Further tests were conducted on the

mineralization to determine the response of magnetic and gravity separation techniques
on different particle sizes.
Cliffs and First Point engaged SGS Minerals Services (SGS) and Knelson Research and
Technology Centre (KRTC) to perform the test work.
In a report issued on June 25, 2010, KRTC used a lab-scale Knelson concentrator to
upgrade a surface sample from the Project area. The response of the sample, in terms of
nickel grade and recovery, was monitored for a variety of grind sizes. At 270 µm, the
Knelson concentrator was able to upgrade a head of 0.25% total nickel to 2.91% using
one stage while recovering 36.3% of the total nickel. The grade and recovery of total
nickel improved when the sample was ground to 89 µm. The Knelson concentrator was
able to upgrade a head grade of 0.21% total nickel to 3.26% while recovering 43.8% of
the total nickel.
In a report issued on August 6, 2010, KRTC repeated the test work on a sample taken
from the same rocky outcrop used in the earlier test. However, this sample was
subjected to magnetic concentration by Cliffs using a Sala CN magnetic separator. The
feed to the Sala CN was upgraded from 0.252% total nickel to 1.534% with a grind size
of 60 µm. Samples submitted by KRTC for total nickel assay determined the head grade
for their portion of the test to be 1.4% total nickel, which is in good agreement with the
grade measured by Cliffs. During this test, the Knelson concentrator was able to produce
a grade of 12.3% total nickel while recovering 79.2% of the total nickel after only one
stage of gravity concentration.
The SGS report, “An Investigation by High Definition Mineralogy into the Mineralogical
Characteristics of One Master Composite and Five Variability Composites prepared for
First Point Minerals,” was issued on July 11, 2011. The purpose of this test work was to
determine the mineral composition and the modal abundance of the 2010 Master
Composite. Additionally, the nickel deportment and the association and grain size of
awaruite were determined. Finally, five variability composites were tested to determine
the liberation characteristics and grain size of awaruite.
SGS conducted, “A Bench-Scale Investigation into Recovery of Nickel from the Decar
Awaruite Deposit”, which resulted in a report issued on February 21, 2012. SGS used a
master composite sample selected to be representative of the Decar mineralization. SGS
tested two flowsheets: the first with one stage of magnetic concentration followed by one
stage of gravity separation; and the second with two stages of magnetic concentration,
with regrind between the stages, followed by one stage of gravity separation. The optimal
flowsheet tested was found to be the simpler, two-piece, flowsheet. The selected
flowsheet used a grind size of 600 µm for the magnetic concentration stage, and 70 µm
for gravity concentration. Under conditions representative of the final process design, the
SGS test work found that the process could recover 84.7% of the DTR nickel (42.3% total
nickel) to a concentrate with a grade of 13.5% total nickel. The plant design recovery
was reduced to 82% DTR nickel (41.0 % total nickel) for a more conservative process and
economic analysis.

Two of the most significant physical properties of awaruite are its high specific gravity and
high magnetic susceptibility. As a result, all of the beneficiation stages in the process
design were based on either gravity separation or magnetic separation. The performance
of the gravity and magnetic separators was based on the SGS test work.
The key elements of this flowsheet are:
 three stages of crushing and grinding to reduce the run-of-mine (ROM) material
to 600 µm
 one stage of magnetic separation
 regrind to 70 µm in a tower mill (e.g. Vertimill™)
 Knelson concentrators will upgrade the reground magnetic concentrate to a
grade of 13.5% total nickel
 tailings from magnetic and gravity separation will be thickened and deposited in
a tailings management facility (TMF) at 65% solids
 concentrate will be dewatered using a disk filter, dried for storage, and
transported using a diesel fired dryer.
1.8 MINING
The open pit was designed using a two-stage approach. In the first stage, a series of
optimum pit shells were identified by Caracle Creek using the Lerchs-Grossman (LG) pit
optimization method in Gemcom Whittle™ software.
In the second stage, Tetra Tech completed phase mining and production schedules,
equipment selections, and the capital and operating costs were estimated.
The mining operation will use a conventional open pit mining method (truck and shovel).
The production rate recommended for the Project is a nominal mill throughput of 40 Mt/a
starting in the second year of a 24-year mine life. The mining capacity is 55 Mt/a
including 15 Mt/a of waste and overburden in the first 7 years; starting at Year 8, waste
production trails off (Figure 1.2 and Table 1.3).
The overall mining sequence was developed in four phases. The mine development for
the resource and the waste will progress using 10 m high benches with a double bench
feature.
The ultimate pit design for the selected base case pit contains 730.0 Mt of Indicated
Resource at 0.119% DTR nickel grade and 195.0 Mt of Inferred Resource at 0.114% DTR
nickel grade. The overall stripping ratio is 0.17 t/t (waste/resource). A total of 86.21 Mt
of waste material and 70.80 Mt of overburden will be moved over the mine life of 24
years.

Figure 1.2 Milawa NPV Production Schedule by Year (With Fixed Lead 6~8)
Tonnage input to processing

Tonnage of waste rock
It is proposed that the operation will be carried out with an equipment fleet comprising
three, 251 mm diameter rotary blasthole drill rigs for resource and waste, three, 27 m 3
(bucket capacity) hydraulic face shovels, with a fleet of 226 t haul trucks. These will be
supplemented with support equipment including a loader, grader, dozers, and a backhoe
excavator, etc.
After evaluation of 16 production schedule scenarios, the Milawa NPV algorithm with a
fixed lead 6~8 was selected as the optimized production schedule based on the highest
present value (PV), more stable mining rate, and safer feature.
Table 1.3 Milawa NVP Production Schedule by Year (With Fixed Lead 6~8)
Period Subtotal Waste Overburden Resource Grade Stripping

Year (kt) (kt) (kt) (kt) (%) Ratio
1 35,269 5,039 10,230 20,000 0.097 0.76
2 54,816 7,318 7,498 40,000 0.107 0.37
3 54,303 5,377 8,927 40,000 0.107 0.36
4 54,368 5,102 9,266 40,000 0.106 0.36
5 54,589 6,877 7,712 40,000 0.107 0.36
6 54,496 5,815 8,680 40,000 0.111 0.36
7 54,642 5,516 9,126 40,000 0.115 0.37
8 49,540 4,484 5,056 40,000 0.117 0.24
9 44,584 2,949 1,635 40,000 0.116 0.11
10 43,296 3,016 281 40,000 0.118 0.08
11 43,870 3,460 410 40,000 0.118 0.10
12 44,427 3,674 754 40,000 0.118 0.11
13 43,496 3,341 155 40,000 0.117 0.09
14 43,412 3,116 296 40,000 0.117 0.09
table continues...

Period Subtotal Waste Overburden Resource Grade Stripping
15 44,437 3,873 564 40,000 0.119 0.11
16 44,473 4,312 161 40,000 0.119 0.11
17 44,213 4,178 35 40,000 0.119 0.11
18 43,796 3,779 17 40,000 0.123 0.09
19 42,253 2,253 - 40,000 0.124 0.06
20 41,685 1,685 - 40,000 0.128 0.04
21 40,810 810 - 40,000 0.129 0.02
22 40,236 236 - 40,000 0.130 0.01
23 40,000 - - 40,000 0.133 -
24 25,268 - - 25,268 0.137 -
Total 1,082,279 86,210 70,801 925,268 0.118 0.17
1.9 PROJECT INFRASTRUCTURE

The Project site is currently accessible from Fort St. James via Highway 27 and the Tachie
Road. From the Tachie Road, the site is accessed by using the Forest Service Road (FSR)
network off the Leo Creek FSR. A new section of road is proposed to be built to shorten
the current access to site by approximately 50 km. Work will involve construction of a
7 km section of new road joining the Leo Creek and Leo-Middle Connector FSR.
At the mine site, buildings to support the administrative and operational functions of the
Project include the mine dry, administration building, guardhouse, laboratory, cold
storage warehouse, fueling facilities, truck shop and warehouse, waste management
building, explosives storage area, and an accommodations camp to house 275
personnel. Approximately 5 km of on-site access and secondary roads as well as 9.6 km
of haul roads are included to provide access around the open pit, overburden stockpile,
TMF and site facilities.
A new bridge will be required to facilitate access to the proposed off-site concentrate load
out facility located in the vicinity of the Dzitl’ainli (Middle River) First Nations settlement
(Tl’azt’en Nation). A level crossing will be provided with the CN Rail railway line which
runs along the eastern bank of the river at this point.
Power supply to support the Project’s anticipated production level load of 106 MW is
proposed to be obtained from BC Hydro via a connection to the transmission system at
the existing Glenannan Substation (GLN), a main BC Hydro 500 kV trunk line, located
southeast of the Project site. The transformer station will reduce the power supply
voltage to 230 kV, prior to transmission to site. The proposed 230 kV power
transmission line corridor will be approximately 140 km in length.
Site services to support operations include a fresh water supply to be drawn from Upper
Baptiste Lake located 2 km southeast of the plant site. The fresh water drawn from the
intake system will be collected in an above-grade storage water tank and distributed for

potable water feed, process makeup, firewater, and general use water. Other ancillary
site services include treatment of sewage at the plant and accommodations areas, on-
site and off-site communication infrastructure, compressed air service for process and
maintenance areas, dust suppression systems for process and load out areas, as well as
a service vehicle fleet for the maintenance of roads and other surface infrastructure
components.
The proposed location for the TMF is approximately 2.5 km northwest of the plant site in
a large alpine valley. For the first 19 years of operations, the TMF will store all of the
milled tailings. For Years 20 to 24, the tailings will be stored in the quarry which will be
developed to provide rockfill for the tailings dam construction. This quarry will be
developed to supplement the rockfill material needed to construct the tailings dam. The
volume of the quarry is estimated at 110 Mm3 which equals the remaining storage
requirement for the tailings. The TMF will contain 300 Mm3 and the quarry will contain
110 Mm3 for a total of 410 Mm3.
It is proposed that the tailings dam be constructed as a standard earthfill retention

structure with a low-permeability core. A starter dam will be constructed to contain the
initial two years of tailings. The TMF dam will be raised annually using the downstream
method of construction. The ultimate TMF design is based on a mining rate of 40 Mt/a
over a 19-year period. The total tailings volume generated was calculated at 300 Mm 3.
The ultimate dam elevation will be 1,400 m with a 10 m wide crest. The upstream and
downstream slopes were designed at 2H:1V and 1.75H:1V, respectively.
The mineralized material will be milled at the process plant. The waste material (tailings)
will be in the form of a slurry, which will be thickened to 65% solids (by weight) prior to
being pumped up to the TMF. It is proposed the tailings will be pumped through two,
910 mm (36") diameter high-density polyethylene (HDPE) pipelines to the TMF.
1.10 ENVIRONMENTAL
Environmental aspects have figured prominently in the preliminary evaluation of the
Project. There is considerable environmental baseline information currently available
regarding the site and the surrounding area, compiled through extensive field
investigations conducted over a two-year period. This information is being integrated into
the preliminary project evaluation and will be augmented as appropriate to support the
progressing engineering design. While several environmentally sensitive species have
been identified through environmental baseline studies, based on the information
available to date, and our understanding of the proposed development, there are no
environmental aspects that are considered limiting to the Project development.
No waste rock dump will be constructed at this mine site. Additional wastes generated
from the Project will be collected and treated on site or removed off-site for disposal. A
tailings dam is proposed to be designed as a conventional low permeability earth core
structure, with a cut-off trench to bedrock and a storage capacity of 300 Mm3. The
remaining tailings (110 Mm3) generated in Years 20 to 24 will be deposited in the quarry.
The TMF will play a key role in the water management strategy for the Project.

Local communities and neighbours opinions are critical to Cliffs’ decision-making process
in all aspects of operations. Each operation is an integral part of local communities and
First Nations. Cliffs has developed an effective public and First Nations engagement to
foster its relationships with local communities to maximize shared value and minimize
adverse effects based on principles of sustainable development and corporate
responsibility. The Project lies exclusively in the traditional territory of the Tl’azt’en
Nation, which has been the focus of Aboriginal engagement and consultation to date.
Cliffs signed an exploration Memorandum of Understanding (MOU) for the Project on May
22, 2012. The MOU formalizes protocols for continuing the cooperative working
relationship established between the Tl’azt’en Nation including constituent Keyoh
families, First Point, and Cliffs regarding exploration activities for the Project.
It is expected that the Project will require an environmental assessment (EA) review
under the BC Environmental Assessment Act, Canadian Environmental Assessment Act,
and the Mines Act/Environmental Management Act. Specifically, it is likely that a federal
authorization pursuant to Subsection 35(2) of the Fisheries Act for the harmful alteration,
disruption or destruction (HADD) of fish habitat; Section 32 of the Fisheries Act for the
destruction of fish by means other than fishing may be required for components of the
potential project; and that this will trigger the requirement for a comprehensive study.
Several provincial and federal permits are expected to be required for operational and
closure activities once EA approval has been received (e.g. water licences, timber cutting
licences, mine permits, waste management permits, closure permits).
The Project mine closure and reclamation plan will be developed to meet the regulatory
requirements under the BC Mines Act and accompanying Health, Safety and Reclamation
Code for Mines in BC, which provide the legislative framework for the obligations of Cliffs
for decommissioning, closure, reclamation, and rehabilitation for the Project. Cliffs mine
closure and reclamation plan will aim to reclaim and rehabilitate the Project footprint to
ensure that, upon termination of mining, land, watercourses, and cultural heritage
resources will be returned to a safe and environmentally sound condition and to an
acceptable end land use that considers previous and potential uses. As possible, work
will be completed progressively during operations; an industry best management
practice. The financial model for the Project includes consideration of these costs.
1.11 CAPITAL AND OPERATING COSTS
1.11.1 CAPITAL COST ESTIMATE

The cost estimate (direct costs, indirect costs, Owner’s costs and pre-production costs),
including contingency, was prepared to meet or exceed the accuracy level target of
±30%. All capital costs are estimated in Canadian dollars as the base currency. The
total estimated capital cost for the Project is approximately $2.147 billion (Table 1.4) and
is organized into a Level 2 Work Breakdown Structure (WBS).

Table 1.4 Capital Cost Summary (Level 1)
WBS Level 1
WBS Level 1 WBS Level 1 Cost Summary
No. Description ($ million)
Direct Capital Costs
01 Geology 0.8
02 Mining 394.0
03 Processing Plant 473.4
04 TMF 404.9
05 On-site Infrastructure and Utilities 199.2
06 Off-site Infrastructure 75.0
07 Environment Management 1.5
08 External Relations 1.0
Total Direct Capital 1,549.8
Indirect, Owner’s and Provisions Capital Costs
09 Indirect Capital Cost 126.1
10 Owner's Cost 117.6
11 Provisions 353.3
Total Indirect, Owner's and Provisions 597.0
Total Capital Cost 2,146.8
A contingency allowance of $353.3 million (23% of the direct capital costs and 20% of
the total capital costs) is included in the capital cost estimate to cover costs that will be
incurred, but at this time cannot be identified as the Project is still in its early
development phase. The contingency is an allowance for undefined items or work which
will have to be performed, or elements of cost which will be incurred within the defined
scope of work covered by the estimates that cannot be explicitly foreseen or described at
this time because of lack of complete, accurate, and detailed information.
Table 1.5 outlines how the contingency was calculated based on the relative contingency
contributions of the major WBS areas. The overall contingency is deemed appropriate for
the level of detail of the estimate and the methodology for acquiring costs.
Table 1.5 Contingency Analysis

Percentage
of Total Weighted Contingency
WBS Level 1 Capital Cost Contingency Contingency Contribution
Description (%) (%) (%) ($ million)
Geology 0.05 15.0 0.01 0.12
Mining 21.97 20.0 4.39 78.80
Processing 26.40 20.0 5.28 94.68
TMF 22.58 25.0 5.64 101.23
table continues...

Percentage
of Total Weighted Contingency
WBS Level 1 Capital Cost Contingency Contingency Contribution
Description (%) (%) (%) ($ million)
On-site Infrastructure 11.10 20.0 2.22 39.83
Off-site Infrastructure 4.18 15.0 0.63 11.26
Environmental Management 0.08 15.0 0.01 0.22
External Relations 0.06 20.0 0.01 0.20
Indirect 7.03 15.0 1.05 18.92
Owner’s 6.56 7.5 0.50 8.82
Total 20% 353.25
A breakdown of the pre-production capital costs are shown in Table 1.6.
Table 1.6 Pre-production Cost (Level 1)

WBS Level 1
WBS WBS Level 1 Cost Summary
Level 1 No. Description ($ million)
Direct Pre-production Costs
01 Geology 0.6
02 Mining 156.0
04 TMF 78.5
Total Direct Pre-production Costs 970.0
Indirect, Owner’s and Provisions Pre-production Costs
11 Provisions 217.5
Total Indirect and Owner's Pre-production Costs 414.2
Total Pre-production Cost 1,384.2
1.11.2 OPERATING COST ESTIMATE

A summary of the operating cost, by area and by organizational breakdown structure
(OBS), is shown in Table 1.7and Table 1.8. The total estimated operating cost over 24
years for the Project is approximately $6.398 billion.

Table 1.7 Unit Operating Cost by Operating Cost Area
Unit Cost
Area ($/t milled)
Infrastructure and Administration 0.803
Mine 2.862
Plant 3.250
Total 6.915
Table 1.8 Operating Cost by OBS

Area Cost
Infrastructure and Administration Fixed (Labour) ($000) 206,334
Variable (Consumables) ($000) 536,966
Subtotal ($000) 743,300
Subtotal ($/t material) 0.69
Subtotal ($/t mineralized material) 0.80
Mine – Technical Services Fixed (Labour) ($000) 63,294
Subtotal ($000) 173,214
Mine – Operations Fixed (Labour) ($000) 390,302
Variable (Consumables) ($000) 1,326,982
Subtotal ($000) 1,717,284
Mine – Maintenance Fixed (Labour) ($000) 83,064
Subtotal ($000) 757,507
Plant – Technical Services Fixed (Labour) ($000) 46,416
Subtotal ($000) 65,632
Plant – Operations Fixed (Labour) ($000) 232,049
Subtotal ($000) 1,857,496
table continues...

Area Cost
Plant - Maintenance Fixed (Labour) ($000) 110,943
Subtotal ($000) 1,084,051
Fixed - Subtotal Fixed Subtotal ($000) 1,132,402
Fixed ($/t material) 1.046
Fixed ($/t mineralized material) 1.224
Variable - Subtotal Variable Subtotal ($000) 5,266,082
Variable ($/t material) 4.866
Variable ($/t mineralized material) 5.691
Grand Total Total ($000) 6,398,484
Total ($/t material) 5.912
Total ($/t mineralized material) 6.915
1.12 ECONOMIC ANALYSIS

A PEA should not be considered a prefeasibility or feasibility study, as the economics and
technical viability of the Project have not been demonstrated at this time. The PEA is
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. Furthermore, there is no certainty
that the conclusions or results as reported in the PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
The Decar awaruite concentrate is a unique product that can be generated through
simple beneficiation techniques of magnetic and gravity separation. There are currently
no known direct existing awaruite concentrates in the market. The marketing study
described in Section 19 has resulted in a concentrate NSR based on 75% of the London
Metal Exchange (LME) nickel price for all nickel metal supplied to a downstream smelter.
The revenues projected in the cash flow model were based on the data presented in
Table 1.9. The economic evaluation was based on 100% ownership of the Project and
represents the merit of the Project on a standalone basis. No considerations for
potential joint venture ownership or partnership option were considered. As well, no
considerations for carry forward liabilities other than capital costs related to the Project
were considered.

Table 1.9 Basis of Financial Analysis
In Pit Indicated Resource Grade % 0.119
In Pit Inferred Resource Grade % 0.114
LOM (including Indicated and Inferred Resources) years 24
Total Project Capital Cost $ million 2,147
Overall Operating Cost $/t milled 6.92
Currency Exchange Cdn$/US$ - 0.97
Table 1.10 illustrates the pre-tax NPV for the Project at variable discount rates. The
Project pre-tax IRR is 15.7%.
Table 1.10 Pre-tax NPV and IRR

Item Amount
Pre-tax and Pre-finance NPV @ 6% ($ million) 1,715
Pre-tax and Pre-finance NPV @ 10% ($ million) 699
Pre-tax and Pre-finance NPV @ 16% ($ million) (23)
Project IRR (%) 15.7
Figure 1.3 shows the NPV for the various discount rates for the base case scenario.

Figure 1.3 Pre-tax NPV versus Discount Rate for Base Case
Table 1.11 illustrates the post-tax NPV for the Project at variable discount rates. The
Project post-tax IRR is 12.8%.
Table 1.11 Post-tax NPV and IRR

Item Amount
Post-tax and Pre-finance NPV @ 6% ($ million) 982
Post-tax and Pre-finance NPV @ 16% ($ million) (215)
Figure 1.4 compares the NPV at variable discount rates for pre-tax and post-tax base
case scenarios.

Figure 1.4 Pre-tax and Post-tax NPV versus Discount Rate
KPMG LLP (KPMG) in Toronto was commissioned to prepare a tax expense calculation for
the post-tax economic evaluation of the Project with the inclusion of applicable income
and mining taxes.
The components of the various taxes that will be payable are shown in Table 1.12.
Table 1.12 Components of the Various Taxes

LOM
Amount
Tax Component ($ million)
Corporate Tax (Federal) 714
Corporate Tax (Provincial) 523
Provincial Resource Tax 722
Total Taxes 1,959
1.13 RECOMMENDATIONS
The future work plan is required to address and resolve identified technical issues, as
well as test work, that are required to reduce uncertainty and risk in the Project. The
technical issues that will need to be addressed cover the areas of environmental,
geology, mining, waste management, and infrastructure. Test work in the form of test
verification and additional studies will be required in the areas of processing and
infrastructure. A summary of the recommended future work is presented in Table 1.13.

Table 1.13 Recommended Future Work
Cost
Area Description ($)
Environmental  project management/environmental management 1,574,570
 fish and fish habitat
 wildlife and wildlife habitat
 vegetation
 hydrology, surface water, and sediment quality
 hydrogeology and groundwater quality
 air quality and climate
 acid rock drainage/metal leaching
 terrain, soils, and geology
 socio-economic
 archaeology
 noise
 transmission corridor
Geology and  drilling 2,955,000
Mineral
 camp
Resource
 core storage
 geophysics
 resource and reporting
 LiDAR
Mining  rock mechanics field program, site work, lab, data analysis, and 402,370
engineering
Waste  geochemical test work for metal leaching and acid rock drainage 60,000
Management 322,638
 TMF geotechnical soils drilling and testing program
Infrastructure  installation of a site weather station to collect site specific 10,000
and Services climatic data to form input into the civil design
Project  prefeasibility study 2,573,423
Execution
 trade-off studies – yet to be defined (estimated cost at 15% of 400,000
prefeasibility study)
Mineral  process development, grindability, and environmental testing 525,000
Processing ±30%
 variability study (assuming 100 samples)
 pilot plant study including thickening and concentrate moisture
limit testing
Marketing  pilot scale smelter test work 2,000,000
 small scale smelter lab test work and engineering 500,000
Contingency  estimated at 25% of total estimate 2,830,000
Estimated Total 14,153,001
The following test work has been identified but not included in the recommendation costs:
 large pilot plant test work for the beneficiation circuit smelter test sample
preparation.

It is yet to be determined if this pilot test work is required to support the prefeasibility
study and specifically to support the marketing assumptions which form the basis of the
Project’s revenue stream. A 10 t concentrate sample would be required for the pilot
plant smelting test work.
1.14 CONCLUSIONS
The Project, at this stage, demonstrates positives economics, and it is recommended to
proceed to the prefeasibility study stage. The Decar awaruite mineralization and
concentrate is a unique product, neither being extracted from a nickel laterite or a nickel
sulphide deposit.
There is considered to be significant potential for Decar awaruite concentrates, however,

there are currently no known direct existing awaruite concentrates in the market. Due to
the nature of Decar’s awaruite mineralized deposit, it is likely that test work and
subsequent study work beyond what is normally expected at a prefeasibility study stage
will be required. In this report, the recommended future work does not include costs
specifically to address smelting and marketing test work and analysis. It is understood
that this work will be required at some point during the project development. The scope
and costs for such test work and analysis is not yet defined as these could stretch over
the prefeasibility study and feasibility study time period of project development.

2.0 INTRODUCTION
Cliffs commissioned Tetra Tech to complete a technical report and PEA on the Project, in
accordance with Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) Best
Practices, and with NI 43-101 Standards of Disclosure for Mineral Projects. This report
was prepared as a requirement under the terms of an option agreement between Cliffs
and First Point.
A summary of the Qualified Persons (QPs) responsible for this report is provided in Table
2.1. The following QPs conducted site visits of the Property:
 Elisabeth Ronacher, Ph.D., P.Geo., conducted a site visit on October 5 and 6,

2011 to inspect drill core, visit the core shack and cutting facilities and tour the
site via helicopter. She conducted a second site visit on September 12 and 13,
2012 to conduct detail reviews of drill core mineralization, inspect core logging
and cutting facilities and inspect a drilling rig at a remote location.
 Julie Palich, M.Sc., P.Geo., conducted a site visit on August 22, 2012 to assess
the site for environmental implications.
 Mike McLaughlin, P.Eng., conducted a site visit on November 16 to 18, 2011 to
visit the overall site including core shack, core cutting facility, drill rigs accessed
by helicopter, and participate in a detailed helicopter tour of the site and
surrounding area to assess site access, drainage, and general logistics.
Table 2.1 Summary of QPs

Report Section Company QP
1.0 Summary All Mike McLaughlin, P.Eng.
2.0 Introduction Tetra Tech Mike McLaughlin, P.Eng.
3.0 Reliance on Other Experts Tetra Tech Mike McLaughlin, P.Eng.
4.0 Property Description and Location Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
5.0 Accessibility, Climate, Local Resources, Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
Infrastructure, and Physiography
6.0 History Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
7.0 Geological Setting and Mineralization Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
8.0 Deposit Types Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
9.0 Exploration Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
10.0 Drilling Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
11.0 Sample Preparation, Analyses, and Security Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
12.0 Data Verification Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
13.0 Mineral Processing and Metallurgical Testing Tetra Tech Todd Kanhai, P.Eng.
table continues…

Report Section Company QP
14.0 Mineral Resource Estimates Caracle Creek Jason Baker, B.Eng., P.Eng.
15.0 Mineral Reserve Estimates Tetra Tech Wenchang Ni, P.Eng.
16.0 Mining Methods Tetra Tech Wenchang Ni, P.Eng.
17.0 Recovery Methods Tetra Tech Todd Kanhai, P.Eng.
18.0 Infrastructure Tetra Tech Dharshan Kesavanathan, P.Eng.
19.0 Market Studies and Contracts Tetra Tech Andrew Carter, Eur. Ing., B.Sc.,
C.Eng, MIMMM, SAIMM, SME
20.0 Environmental Studies, Permitting, and Caracle Creek Julie Palich, M.Sc., P.Eng.
Social or Community Impact Dharshan Kesavanathan, P.Eng.
21.0 Capital and Operating Costs Tetra Tech Mike McLaughlin, P.Eng.
Wenchang Ni, P.Eng.
Todd Kanhai, P.Eng.
Julie Palich, M.Sc., P.Eng.
22.0 Economic Analysis Tetra Tech Mike McLaughlin, P.Eng.
23.0 Adjacent Properties Caracle Creek Elisabeth Ronacher, Ph.D., P.Geo.
24.0 Other Relevant Data and Information Tetra Tech Mike McLaughlin, P.Eng.
25.0 Interpretation and Conclusions All Sign-off by Section
26.0 Recommendations All Sign-off by Section
27.0 References All Sign-off by Section
2.1 UNITS OF MEASUREMENT AND CURRENCY

All units of measurement used in this technical report are in metric.
All costs are in Canadian dollars unless otherwise noted.
2.2 DATA SOURCES

All data sourced for this report are identified in the reference section of this report.

3.0 RELIANCE ON OTHER EXPERTS
The QPs who prepared this report relied on information provided by experts who are not
QPs. The relevant QPs believe that it is reasonable to rely on these experts, based on the
assumption that the experts have the necessary education, professional designations,
and relevant experience on matters relevant to the technical report.
 Elisabeth Ronacher, Ph.D., P.Geo., from Caracle Creek, relied on information

provided by Cliffs and First Point regarding land tenure, claims status, and
ownership in Section 4.0. Caracle Creek also used land tenure information
provided on the website of the Government of British Columbia
(https://www.mtonline.gov.bc.ca/mtov/searchTenures.do). Caracle Creek did
not conduct an in-depth review of mineral title and ownership and the title
ownership and status of claims as outlined in this report was obtained from
Cliffs and First Point. While publicly available information regarding
option/purchase agreements were reviewed for this study (First Point Minerals
Corp. News Release, November 13, 2009;
http://www.firstpointminerals.com/s/NewsReleases.asp), it does not constitute,
nor is it intended to represent, a legal, or any other opinion as to title.
 Mike McLaughlin, P.Eng., also relied on KPMG concerning tax matters relevant
to this report. The reliance is based on a letter to Mr. Mike McLaughlin at Tetra
Tech and Mr. Jim Gilbert at First Point, titled “First Point Minerals Corp. –
Assistance with Income and Mining Tax Component of Economic Analysis” and
dated March 15, 2013.

4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
The Property is located in central BC, Canada (Figure 4.1), approximately 650 km north of
Vancouver and approximately 90 km northwest of the town of Fort St. James. The
Property is centered on Universal Transverse Mercator (UTM) 350,000 mE and
6,087,000 mN (North American Datum (NAD) 83, Zone 10) or a latitude of 54°54’30.5”
N and longitude of 125°21’31” W.
The Property consists of 60 mineral claims covering an area of 24,516.961 ha (Table

4.1).

Figure 4.1 Location of the Decar Property in BC, Canada

4.2 DESCRIPTION AND OWNERSHIP
The Property consists of 60 mineral claims
(https://www.mtonline.gov.bc.ca/mtov/searchTenures.do; Table 4.1, Figure 4.2). Claims
575682, 895893, 895899, 669586, 559616, 594259, 559615, and 559618 overlap
with legacy claims and the overlapping area is not owned by Cliffs. The claims shown in
Figure 4.2 show the claim size as owned by Cliffs. Figure 4.2 also shows an area around
Middle River where mineral rights are restricted (Mineral Reserve Site 326751). Mineral
reserve site are typically located around water bodies.
Table 4.1 List of the Decar Project Claims

Tenure Claim Area
Number Name Owner1 Good To Date Status (ha)
559615 WILL 1 Cliffs (100%) 2022/Nov/14 GOOD 357.3328*
559617 WILL 3 Cliffs (100%) 2022/Nov/14 GOOD 464.7642
594247 BAP 1 Cliffs (100%) 2022/Nov/14 GOOD 446.7796
594252 KAR 1 Cliffs (100%) 2022/Nov/14 GOOD 464.5283
594258 - Cliffs (100%) 2022/Nov/14 GOOD 464.5249
594259 KAR 7 Cliffs (100%) 2022/Nov/14 GOOD 403.6543*
table of contents…

Tenure Claim Area
Number Name Owner1 Good To Date Status (ha)
602564 - Cliffs (100%) 2022/Nov/14 GOOD 18.5831
602566 - Cliffs (100%) 2022/Nov/14 GOOD 148.6645
603803 VAN 1 Cliffs (100%) 2022/Nov/14 GOOD 464.5101
669586 BAP 6 Cliffs (100%) 2022/Nov/14 GOOD 239.4223*
839601 MID 1 Cliffs (100%) 2022/Dec/03 GOOD 74.4049
895893 NEY 1 Cliffs (100%) 2022/Sep/02 GOOD 441.0489*
895899 NEY 2 Cliffs (100%) 2022/Sep/02 GOOD 454.7532*
895902 NEY 3 Cliffs (100%) 2022/Sep/02 GOOD 446.9179
1013225 - Cliffs (100%) 2013/Sept/26 GOOD 632.3375
Total 60 - - - 24,516.9610
Notes: *this claim overlaps with a legacy claim. The area listed is the actual area owned by Cliffs and
does not include the overlap area.
1 The claims are registered 100 % in Cliffs’ name at Mineral Title BC. The actual ownership of the
claims is described in the text.

Figure 4.2 Map Showing the Mineral Claims of the Decar Property

Cliffs and First Point are parties to an option agreement dated November 12, 2009 and
amended on November 30, 2009, September 12, 2011, November 9, 2011, and July
31, 2012. Effective as of September 12, 2011, Cliffs owns 51 % interest in the Property.
Cliffs has the option to increase its interest to:
 60% by completing a NI 43-101 compliant PEA

 65% by completing a NI 43-101 compliant prefeasibility study
 75% by completing a bankable, NI 43-101 compliant feasibility study.
Upon completion of Cliffs earn-in to the Project, the parties will enter into a joint venture.
The parties' initial participating interests in the joint venture will equal their respective
interests in the Property at the time the joint venture is formed. If Cliffs’ or First Point’s
interest should be reduced to less than 10%, this interest will be converted to 1% net
smelter return (NSR). First Point, in addition to holding a participating interest in the joint
venture, will retain a 1% NSR, which will increase to 2% if First Point is the party whose
participating interest is diluted to less than 10%. Cliffs is the operator of the Property.
In addition, Cliffs holds a 15% equity interest in First Point.
The Tl’azt’en Nation, First Point, and Cliffs entered into a MOU in June 2012 (First Point
Minerals News Release, June 6, 2012). The MOU formalized protocols for the working
relationship between the parties and confirms the Tl’azt’en Nation’s support for the
exploration activities.
The surface rights are owned by the Crown. Parts of several claims at the east end of the
Property overlap with “district lots” (Figure 4.3). In BC, district lots are primary parcels of
land that have been surveyed (www.ltsa.ca). The Crown may have sold these lots to
private individuals who may own the surface rights. Exploration in this area can still
occur but any exploration activity needs to be announced to the surface rights holders.
Caracle Creek reviewed the status of the district lots on the Government of BC website
(https://www.mtonline.gov.bc.ca/mtov/home.do) and did not notice any reference to
mineral rights. A small part of the claims in the southwest overlap with Rubyrock Lake
Provincial Park. No exploration can occur in the area of the Provincial Park.
Caracle Creek is not aware of any royalties, back-in rights, payments, or other
agreements and encumbrances to which the Property is subject to other than the ones
mentioned above.
No exploration activities can take place on the Property from May 15 to June 15 of every
year unless an exemption is granted, because the Property is located within mountain
caribou habitat (BC Ministry of Environment Order U-7-003).
Caracle Creek is not aware of any environmental liabilities to which the Property is
subject.
A Mineral & Coal Exploration Activities & Reclamation Permit, issued by the Ministry of
Energy and Mines, is required to explore in BC. A permit (MX-13-208) has been granted

and is valid until December 15, 2014; this permit covers the exploration recommended
in this report.
Caracle Creek is not aware of any significant factors and risks that may affect the access,
title, or the right or ability to perform work on the Property.
Legal access to the Property is on forestry roads for which road use permits have been
obtained.
To retain mining claims in BC, claim holders must submit an assessment file to the BC
Ministry of Energy and Mines showing that they have spent $5.00/ha during each of the
first and second years. The minimum expenditure requirement increases to $10.00 for
each of the third and fourth years, to $15.00 for each of the fifth and sixth years and to
$20.00 for each subsequent year. Exploration expenditure can be distributed over
contiguous claims for 10 years in the future. Payments may be made in lieu of
exploration work to maintain a claim in good standing; these payments will be double the
value of the exploration and development work requirements set forth above. Claims can
be renewed for a term of 10 years if sufficient assessment credits are applied to them.

Figure 4.3 Map Showing Surface Rights Distribution on the Cliffs Claims
Notes: Most of the surface rights (purple) are held by the Crown. Some (green) are held by private individuals.

5.0 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
5.1 ACCESS
The Property can be legally accessed by four-wheel drive vehicle from Fort St. James,
located approximately 90 km southeast of the Property, on forestry roads. From Fort St.
James, Stuart Lake Highway/BC-27N leads to Tache Road after 2.3 km. After 39 km on
Tache Road, a right turn (north) leads to Leo Creek Forestry Road and after 38.5 km on
Leo Creek Forestry Road a left (northwest) turn leads to Leo-Kazcheck Forestry Road
(300 Road). At the 348 km mark, a left turn (west) leads to Leo-Sakenichie Forestry
Road (900 Road). At the 902 km mark, a left turn (southeast) leads onto the Leo-Middle
Forestry Road (700 Road), which leads to the Property. At the 728 km mark, a right turn
(west) leads onto Baptiste Creek Forestry Road. The Baptiste prospect and the
exploration camp are located on Baptiste Creek Forestry Road at 9 km from the turn from
the Leo-Middle Forestry Road (Figure 5.1).
Fort St. James offers all services including accommodation, stores, gas stations, a bank
and medical services. The closest city is Vanderhoof (54 km southeast of Fort St. James)
and the closest commercial airport is in Prince George (152 km southeast of Fort St.
James). Fort St. James has an airbase servicing private planes and helicopters. The
town of Smithers is located approximately 120 km by air from the Property. A seasonally
operating, private ferry across Babine Lake exists during the summer months. Smithers
also has a commercial airport.
A rail line runs along the east bank of Middle River, immediately east of the claim block.
The rail line is operated by the British Columbia Railway Company.
5.2 CLIMATE AND VEGETATION

Average temperature and precipitation data for 1971 to 2000 from Environment Canada
(www.climate.weatheroffice.gc.ca/climate_normals) for Fort St. James (closest weather
station to the Property) indicate that the daily average temperature ranges from -11.3°C
in January to 15.3°C in July. The highest average accumulation of rain for a month is
48.1 mm in June. The highest average accumulation of snow for a month is 49 cm in
November. The highest average snow depth is 48.4 cm in December.
Drilling can be conducted year round except during the period of May 15 to June 15
which is the calving season of the mountain caribou (BC Ministry of Environment Order U-

7-003). Geological mapping and outcrop sampling can be conducted June to October
when there is no snow on the ground.
The Property is covered with dense forest in the lower elevations. The dominant trees are
sub-alpine fir, hybrid white spruce and paper birch. Minor Douglas fir and trembling
aspen also occur. In addition, Whitebark Pine occurs at higher elevations in the Mt.
Sydney Williams area. Typical understorey consists of sitka alder, Douglas maple and
various berries. Some of the tree populations on the Property have been degraded by
natural threats including blister rust and mountain pine beetle infestation.

Figure 5.1 Map Showing the Access to the Property from Fort St. James, BC

5.3 PHYSIOGRAPHY
The Property is characterized by elevation changes from approximately 700 m near
Middle River to 1,986 m on the peak of Mt. Sidney Williams (Figure 4.2). Mt. Sidney
Williams forms the centre of the Property. Sidney Creek forms a deep valley west of Mt.
Sidney Williams; the creek drains into Trembleur Lake.
5.4 INFRASTRUCTURE AND LOCAL RESOURCES

Water is readily available from local streams, rivers, and lakes. The nearest power line is
located east of Middle River, immediately east of the claim block.
The population of Fort St. James is 2,278 people (Statistics Canada, www.statcan.gc.ca).
Unskilled labour is readily available in the area.
Logging is ongoing in the general area and associated infrastructure, including logging
roads, is present.
Cliffs and First Point do not currently own the surface rights. However, the holder of a
mining lease (not a mineral claim) on unreserved Crown land (Figure 4.3) that is not
lawfully occupied for other purposes and is not protected heritage property is entitled to a
disposition of surface rights under the Land Act if the Minister of Energy and Mines
certifies the surface rights are required for the purposes of a mining activity.
Project infrastructure is discussed in Section 18.0.

6.0 HISTORY
Several companies completed exploration on the Property (Table 6.1).
Table 6.1 List of Companies that Completed Work on the Decar Property
Company Year Exploration Results
Geological Survey of 1942  prospecting  found nine chromite occurrences
Canada
D. Stelling 1974  rock chip sampling  chromium values between 0.2% and
0.4%; best result 0.72%
Mountaineer Mines Ltd. 1979  prospecting  found the "Van Decar Creek" deposit
 trenching, sampling  17.8% chromium to 38.9%
chromium
Northgane Minerals Ltd. 1982  airborne very-low  delineated two northwest striking
frequency (VLF)- magnetic anomalies
electromagnetic
(EM) and
magnetometer
Lacana Mining 1987  rock, soil, silt and  platinum potential determined to be
Corp./U.Mowat heavy mineral poor, gold-bearing soil anomalies
sampling were found
1988  soil, silt rock  soil sampling unsuccessful due to
sampling swampy conditions and overburden
 prospecting,  silicified zones were identified to
mapping have elevated gold
 trenching  1.29 oz/ton gold (= 44.2 g/t)
Viceroy Resource 1990  mapping  map at a scale of 1:1,000
Corp./U.Mowat  seven drillholes  elevated gold was found in
totaling 305.3 m serpentinized sections of the
ultramafics; highest value was
5,830 ppb gold
Minnova Inc./U. Mowat 1991  five drill holes  gold values below expectations; best
totaling 511.4 m gold value was 4,910 ppb
Teryl Resources 1994  742.7 m of drilling  no mineralization intersected
Corp./U.Mowat
U. Mowat 1996  geochemical and  awaruite was discovered
petrographic
analyses
U. Mowat 1997  sampling and  61% of all samples contain 1,500 to
metallurgical 1,599 ppm nickel; nickel may be
testing extracted economically
table continues…

Company Year Exploration Results
U. Mowat 1998  mapping, sampling  diorite in the West Peak area
interpreted to host a gold-bearing
porphyry
U. Mowat 1999  mapping, sampling  listwanite and talc zones found
on Mid claims
 metallurgical  150 mesh produces more elevated
analysis on the nickel values than 100 mesh fraction
1994 drillhole
pulps
U. Mowat 2000  mapping, sampling  only weak sulphide mineralization
of West Peak area found
U. Mowat 2002  sampling near Mt.  results inconclusive
Sidney Williams
U. Mowat 2003  sampling on Mid  no mineralization found
claims
U. Mowat 2004  soil sampling on  up to 2,399 ppb gold detected
One-Eye and Klone
1 claims
U. Mowat 2006  soil and rock  soil sampling did not return
sampling significant values; rock samples
contained up to 1,731 ppm nickel
and 927 ppm chromium
Noranda Exploration 1989  prospecting and  no significant metal values were
Company Ltd. sampling near reported
Baptiste Creek
Global Metals Ltd. 1994/1995  remote sensing on  satellite images used to plan drilling
Green claims program
1995  29 drillholes  drilling delineated an estimated
totaling 498.4 m 2,800,000 kg of jade and tremolite
First Point Minerals Corp. 2007  rock sampling  average nickel grade of 60 samples
was 0.21% nickel
2008  rock and soil  presence of awaruite confirmed
sampling
2009  mapping, rock  nickel values ranged from 1,142 to
sampling at the 2,753 ppm
Sidney, Baptiste
and Van prospects
2010  Airborne magnetic  magnetic anomalies were
and ground IP delineated; no correlation between IP
surveys response and awaruite
mineralization was determined
6.1 GEOLOGICAL SURVEY OF CANADA – 1942

During the summer of 1942, J.E. Armstrong and H.W. Little, of the Geological Survey of
Canada, conducted prospecting and found several chromite deposits in the ultrabasic

rocks of the Pauline Group area (Stelling 1974). Nine chromite deposits were found in
the dunites and peridotites exposed in the Middle River Range which lies southwest of
the village of Middle River (Figure 5.1; Guinet 1980).
6.2 DOUGLAS STELLING – 1974

In August 1974, Douglas Stelling performed rock chip sampling and prospecting on
historic claims #130968 to 130971, dubbed Pauline #1 to 4 (the Pauline Group),
located at latitude 54° 54’ and longitude 125° 23’ which is about 2 mi (3.2 km) east of
Mount Sidney Williams and about 3 mi (4.8 km) west of the Middle River. The assaying
was done by Min-En Laboratories Ltd. Chromite disseminated in dunite returned assay
values of 0.2% to 0.4% chromium with a best assay result of 0.72%. A selected sample
of dunite with massive chromite returned a value of 9.8% chromium (Stelling 1974).
6.3 MOUNTAINEER MINES LTD. – 1979

From September to October 1979, Mountaineer Mines Ltd. conducted reconnaissance
prospecting on the Cr 1-5 claims within the Omineca mining division, with the goal of
establishing the location of chromite showings. A serpentinized peridotite-dunite
batholith (the Trembleur Intrusions) was found to underlie Mount Sydney Williams, with
several serpentinized peridotite-dunite sills outcropping both Mount Sydney Williams and
Tsitutl Mountain (Figure 4.2). The main zone, known as the Van Decar Creek deposit, is
an irregular-shaped lens occurring at 3,700 ft (1,127.8 m) and noted to be approximately
5 ft (1.5 m) wide by 40 ft (12.1 m) long. The main showing is 5 ft (1.5 m) by 25 ft (7.6 m)
in area and contains at least 50% chromium. A hand trench was dug and sampled.
Assays returned values from 17.8% chromium to 38.9% chromium. More prospecting
was recommended to test the extent of the dunite bodies (Guinet 1980).
6.4 NORTHGANE MINERALS LTD. – 1982

On March 13, 1982, Western Geophysical Aero Data Ltd., on behalf of Northgane
Minerals Ltd., conducted an airborne VLF-EM and magnetometer survey of approximately
310 line kilometers on the Cr 1 to Cr 6 claims in the Omineca mining division. The survey
was performed to define boundaries of the ultrabasic rocks and identify trends for further
chromite exploration. Two areas of magnetic highs were determined to be striking
northwest, separated by a prominent northwest trending low. The highs were interpreted
to be zones of ultrabasic rocks. Anomalies of very high magnetic intensity within the
magnetic high zones were interpreted to be serpentinized phases (Pezzot and Vincent
1982).
6.5 URSULA MOWAT – 1987-2006

In July, September, and October, 1987, the Mount Sidney Williams area was explored by
Lacana Mining Corporation under option agreement from Mowat. Rock, soil, silt, and
heavy mineral samples were taken over the Van 1-2, Klone 1-2, and Mid claims. Klone 3-
8 and One-Eye 1 claims were also staked at this time. The platinum potential of the
Property was determined to be very poor. Only one sample returned any
platinum/palladium values (55/73 ppb). Gold values up to 3,780 ppb were returned
from a rusty-weathering listwanite (carbonate altered peridotite). Quartz veins varying
from 20 cm to 3 m in width returned low gold values of maximum 43 ppb. Gold-bearing
soil anomalies (up to 19,900 ppb gold) and soils with high arsenic content were
interpreted to indicate zones of auriferous listwanite that are covered by overburden.
Additional prospecting was recommended (Mowat Jan.1988).
In July to September 1988, Lacana Mining Corporation, still under option agreement from
Mowat, carried out an exploration program on the Klone Group and Van Group
(approximate UTM 346103E, 6086085N). Line cutting, soil sampling, silt sampling, rock
sampling, prospecting and mapping, and trenching were performed on the Property.
Some prospecting and soil sampling was also conducted on the Mid claim. Silicified
zones were found to have higher gold values. Soil geochemistry was determined to be
misleading due to broken listwanite zones along with an overburden of swamp-like
conditions and glacial outwash containing listwanite debris. Trench #1, located
approximately 200 m northwest of Tear Drop Lake, is on a fault zone and returned values
up to 1.29 oz/ton (44.2 g/t) gold and was recommended for extension (Mowat Dec.
1988).
From July to August 1990, a mapping and drilling program was conducted on the Mount
Sidney Williams property by the Viceroy Resource Corporation. Viceroy acted as the
operator on the Project and shared exploration expenditures with Channel Resources Ltd,
who held the property under option from U. Mowat. Mapping concentrated in areas of
known listwanite at a scale of 1:1000. Seven holes totaling 305.3 m were drilled.
Silicified zones, shear zones, listwanite, and some serpentinized sections of ultramafic
were found to carry gold. The best value was found in a bleached section of norite in
Hole 6 and returned 5,830 ppb gold. Future geophysical surveys were recommended
(Mowat 1990).
In August 1991, Minnova Inc. conducted a 511.4 m, 5 hole, BQ drilling program on the
Mount Sidney Williams property, which was 100% owned by U. Mowat. Overall, gold
values returned were determined to be very low and most holes missed their target or
failed to prove mineralization with depth. A best gold value returned was 4,910 ppb in
hole 3 (Mowat 1991).
In July 1994, Teryl Resources Corp. conducted a program of drilling and minor soil
sampling on the Mount Sidney Williams gold property, which was 100% owned by U.
Mowat. Ten holes totalling 742.7 m were drilled. The drilling failed to intersect any gold-
bearing mineralization, but did reveal carbonate listwanite zones in the ultramafics and
volcaniclastics, as well as numerous thrust faults. The drill program affirmed that
geophysical readings are not reliable in this region. Thirty-one follow-up drillholes were
recommended. A total of 58 soil samples were collected and analyzed by inductively
coupled plasma (ICP); no results were discussed. All soils were deemed residual (Mowat
1994).

In July 1996 First Point collected outcrop grab samples as well as core samples from
previous drilling from the Mount Sidney Williams property in order to perform
geochemical and petrographical analysis to assess the property prior to entering into an
option agreement with Ursula Mowat. Results from these analyses revealed that nickel
that had been previously discovered in rock and soil samples was from either
disseminated awaruite or nickel-iron alloy rather than from nickel in silicates. Further
testing was recommended to test the potential of a large, low-grade nickel-cobalt-gold-
chromite open pit deposit (Mowat Jan. 1997). First Point optioned the Property as a
result of the 1996 sampling.
From June to August 1997 Ursula Mowat and First Point conducted a sampling and
metallurgical testing program on Mowat’s Mount Sidney Williams property in order to test
the feasibility of an awaruite and/or nickel deposit. Nickel values up to 2,353 ppm were
found in late stage dunites. The majority of samples taken (61%) fell between 1,500 and
1,599 ppm nickel. Awaruite was found to be present and metallurgical work performed
on two samples by Process Research indicated that it may be processed by magnetic
separation. The metallurgical tests included magnetic separation, gravity separation, and
sulphuric acid leach tests (Mowat Nov. 1997). First Point dropped the option in late
1997.
In July 1998, Ursula Mowat completed mapping and sampling in the West Peak and
Baptiste Creek areas of the Mount Sidney Williams property. Sampling indicated that
mineralized diorite in the West Peak area (Mowat 1998: p. 56), an area located between
approximately 400 m and 5 km west of West Lake, may host a gold-bearing porphyry. Silt
samples also indicated several possible new locations for gold exploration. Thin section
examinations revealed that not all minerals of silvery color in the area are awaruite,
which, due to its malleable nature, is smeared in drill core and thus more dominantly
visible. Other silvery minerals were hematite (and potentially magnetite; Mowat 1998).
In June 1999 Ursula Mowat commissioned mapping and sampling on the Mid claim. In
August 1999 rock samples were collected and analyzed throughout the Mount Sidney
Williams property. Potentially economic listwanite and talc zones in the Mid claim were
described. Drill core pulps from hole 94-10 of the 1994 drilling program were also re-
analyzed to compare optimal grind size for nickel extraction. A finer grind of
approximately 150 mesh size was determined to produce more elevated nickel values
than the approximately 100 size fraction (Mowat 1999).
During August 2000 a previously unexplored area of the West Peak location was mapped
and sampled on behalf of Mowat. Ultramafics sampled in the West Peak area were not
prospective for platinum or palladium bearing mineralization. However, weak sulphide
mineralization in the volcanics was weakly platinum and palladium bearing (Mowat
2001).
In August 2002, rock samples were collected and analyzed from selected areas of the
Mount Sidney Williams property by Ursula Mowat in order to try and locate the source of
several geochemical anomalies outlined by previous sampling. Results were inconclusive
(Mowat 2002).

In July 2003, new clear cuts on the Mid claim and outcrops on the Klone 7 claim were
examined and sampled by Mowat. Rock samples were analyzed for gold, platinum, and
palladium. No mineralization of economic significance was revealed (Mowat 2004).
In September 2004 soil sampling was conducted on the One-Eye 1 (claim #239772) and
Klone 1 (claim #239554) claims, west of Van Decar Creek and Mount Sidney Williams
(Figure 9.5). Mowat was the operator of this program. Gold was found throughout the
sampled area, from trace levels up to 2,399 ppb gold on the Klone 1 claim (Mowat,
2005).
In July 2006, on behalf of Mowat, baseline and grid lines were established to assist in
locating and mapping a quartz-carbonate-talc +/- mariposite zone mentioned in a thesis
by H.W. Little in 1947. Soil and rock samples were also collected. Due to poor soil
development and till, soil sampling returned no significant gold values. Rock samples
returned values up to 1,731 ppm nickel and 927 ppm chromium (Mowat 2007).
6.6 NORANDA EXPLORATION COMPANY LTD. – 1989

In June 1989, Eric A. Shaede, with assistance from Noranda Exploration Company Ltd.,
staked and prospected a 20 unit claim over the Baptiste Creek canyon. None of the rock
or silt samples collected contained any gold or base metals. Only one rock sample
contained elevated arsenic (Shaede 1990).
6.7 FIRST POINT MINERALS CORP. – 2007-2010

In August 2007 First Point conducted a field program of prospecting and rock sampling
on the Property in an effort to determine the economic potential for disseminated nickel-
iron alloy targets. Sixty rock samples were collected and analyzed with an average value
of 0.21% nickel (Figures 5a and 5b in Voormeij and Bradshaw 2008). The program was
successful in locating ultramafic rocks with nickel grades potentially suitable for low-
grade bulk mineable targets (Voormeij and Bradshaw 2008).
From July to September 2008 First Point collected rock and soil samples from the
Property. Nickel-iron alloy (awaruite) was confirmed to be present over wide areas of the
Property, with nickel content ranging from 68 to 85%. Metallurgical testing, mapping,
sampling, magnetic surveys, and a drill program were recommended to follow up the
extent and economic feasibility of the mineralization (Britten 2009).
In June and October 2009 bedrock mapping was completed and rock and sediment
samples were collected by First Point under an option-joint venture with Cliffs. Rocks
were analyzed with a Niton x-ray fluorescence (XRF) analyzer. Nickel values ranged from
1,142 to 2,753 ppm over the Baptiste, Sidney, and Van Target areas. The best stream
sediment sample returned 4,791 ppm nickel. Detailed metallurgical testing and
geophysical surveys were recommended for future work (Britten 2010).

In 2010, First Point commissioned a ground IP survey was completed on the Baptiste and
Sidney targets by P. E. Walcott and Associates to differentiate coarse-grained from fine-
grained awaruite. However, no correlation between IP response and awaruite
mineralization was observed (Britten and Rabb 2010).
6.8 CLIFFS NATURAL RESOURCES EXPLORATION CANADA INC.

Cliffs commissioned a helicopter-borne magnetic gradiometer survey on the entire
Property. The survey was completed by Aeroquest International Ltd. A total of 1,638 line
km at a line spacing of 150 km was flown. Several zone of strong magnetic response
were delineated (Britten and Rabb 2010).
Caracle Creek is not aware of any historical mineral resources or reserves or of any
previous production on the Property.

7.0 GEOLOGICAL SETTING AND
MINERALIZATION
7.1 REGIONAL GEOLOGY

The Property is located in the Intermontane Belt of central British Columbia (Figure 7.1).
The Intermontane Belt consists of sedimentary, mafic, and ultramafic volcanic and
plutonic rocks. The belt formed starting in the Early Jurassic when island arcs collided
with the North American continent.
Decar is located within the Cache Creek Terrane (Figure 7.2) which consists of the Sitlika
assemblage and the Cache Creek Complex (Figure 7.3). The Sitlika assemblage to the
west of the property consists of two components: a Permian-Triassic volcanic unit, and an
overlying Upper Triassic to Lower Jurassic clastic sedimentary unit (Schiarizza and
MacIntyre 1998). The Cache Creek Complex is a sequence of upper Paleozoic and lower
Mesozoic oceanic rocks imbricated by a series of west-directed thrust faults occurring in
Early to Middle Jurassic time (Schiarizza and MacIntyre 1998). Schiarizza and MacIntyre
(1998) define four litho-tectonic units within the Cache Creek Complex. The Trembleur
ultramafic unit and the overlying North Arm Succession are interpreted as mantle and
crustal portions, respectively of an ophiolite sequence that is in thrust contact with the
clastic sedimentary rocks of the Sitlika assemblage to the west. The eastern part of the
complex consists of a succession of pelagic metasedimentary rocks in faulted contact
with the ophiolite sequence to the west. These metasedimentary rocks are referred to as
the phyllite-chert unit of the Cache Creek Complex. The eastern margin of the Cache
Creek belt is made up of thick limestone units that are in stratigraphic and/or fault
contact with the phyllite-chert unit.
Geological contacts are typically faulted or sheared by a combination of thrust faults

formed during obduction of the Cache Creek and Stikine Terranes. These faults are later
cross-cut by right lateral strike slip shear along regional northwest striking faults such as
the Pinchi Fault, east of the Property. The regional northwest striking faults are later
cross-cut by northeast striking right lateral strike slip faults such as the Trembleur Lake
Fault and the Tildesly Creek Fault (Britten and Rabb 2011).

Figure 7.1 Regional Geological Map Showing the Location of the Property in the Intermontane Belt of BC

Figure 7.2 Property Shown on a Terrane Map

Figure 7.3 Property Geology Map
Source: Modified from McIntyre and Schiarizza (1998)

7.2 LOCAL GEOLOGY
The Decar claims occur within or are adjacent to the clastic sedimentary unit of the
Sitlika assemblage and two of the litho-tectonic units of the Cache Creek Complex
defined by Schiarizza and MacIntyre (1998). The two litho-tectonic units are the
Trembleur ultramafic complex and the North Arm succession. The older Trembleur
ultramafic unit lithologies are predominantly pyroxene-phyric peridotites (harzburgite),
lesser fine grained ultramafics, and dunites. The dominant alteration types are
serpentinization and carbonate-silicification with lesser talc-listwanite alteration. The
Trembleur ultramafic unit is interpreted to be the mantle and lower crustal portion of an
ophiolite sequence. The North Arm Succession lithologies consist of diabasic to gabbroic
intrusives, cherts, limestones, phyllites, and diabase and hornblende-feldspar porphyry
dykes. Alteration is localized with zones of strong chlorite and epidote alteration with
disseminated pyrite and quartz-carbonate veining. The North Arm succession is
interpreted to be the crustal portion of the ophiolite sequence mentioned in the
description of the Trembleur ultramafic unit. The clastic sedimentary unit of the Sitlika
Assemblage consists of slate, siltstone, and sandstone. Bedding units are typically
steeply dipping, likely folded, and are bound by fault contact with the older Trembleur
ultramafic unit. The Trembleur Ultramafic unit and the North Arm Succession juxtapose
one another and the older Trembleur unit overthrusts the younger North Arm Succession
(Schiarizza and MacIntyre 1998).
7.3 PROPERTY GEOLOGY

The Trembleur ultramafic complex measures more than 15 km northwest to southeast
and is on average 5.5 km wide on the Property. The Trembleur ultramafic complex
represents the oldest rocks on the Property; the predominant rock type of the complex is
peridotite with minor dunite. The ultramafic complex is in faulted contact with
metavolcanic and sedimentary rocks of the Sitlika Assemblage. The faulted contact is
inferred due to the absence of the upper portions of an idealized ophiolite sequence.
Massive gabbro, likely coeval with the ophiolite sequence, intrudes the metavolcanics to
the west of the claim block. Intrusions consisting of stocks and dykes vary in composition
and are most likely younger than the ophiolite sequence (Schiarizza and MacIntyre
1998). Rock type descriptions were compiled from Schiarizza and MacIntyre (1998),
Britten and Rabb (2011) and logging by Caracle Creek.
7.3.1 ROCK TYPE

Peridotite: Peridotite is dark green to black, varies from 10 to 40% medium grained
pyroxene group minerals in a medium grained, relict olivine-rich matrix that is strongly
serpentinized. The texture is generally massive with locally foliated textures and
structural overprinting. Micro-fracturing, breccias, pseudo-breccias, and penetratively
deformed (schistose) textures are also common features of the unit.
Dunite: Dunite occurs as pods, layers, breccia fragments, and boudinaged fragments
within the peridotite. It is generally fine grained and featureless with the exception of

shear zones where it is incorporated to form tectonic breccia with ductile boudinaged
fragments within the more resistant ground mass. It typically occurs along the western
margin of the Baptiste target area and the Mount Sidney Williams ridge. There are
fragments of peridotite in pods of dunite and both can contain awaruite.
Gabbro: Gabbro occurs as fine to medium grained stocks and 5 to 10 m wide dykes up to
50 m in length that trend northeast to east in the southern end of the Decar claims.
Stocks measure approximately 100 m in length and are elongated to the west and
northwest. The texture is typically massive; the gabbros are interpreted to be a layer of
the ophiolite sequence between the peridotite and the metavolcanic rocks.
Metavolcanic rocks: The metavolcanic rocks consist of basalts, crystal-ash tuff, and rare
trachyte. The basalts are generally featureless with variable chlorite and local epidote
alteration and are massive to brecciated in texture. The metavolcanic rocks mostly occur
as two panels along the southwestern edge of the Baptiste target, and in the central
portion of the Property northeast of the Sidney target. The southwestern panel is
relatively continuous and approximately 700 m thick. It consists of sedimentary rocks
(described below) in addition to the metavolcanic rocks and is in fault contact with the
ultramafic rocks. The metavolcanic rocks northeast of the Sidney target have a more
dismembered character than the southern panel and are poorly exposed at the surface.
The metavolcanic rocks generally do not contain magnetite.
Mudstone: Mudstone or phyllite occur as thin beds dipping 60° to the southwest and are
approximately 100 m thick on average. Minor chert and rare limestone are also
associated with the phyllite. This unit is structurally up section of the metavolcanic rocks
west of the Baptise target. In the panel north of the Sidney target, sedimentary rocks are
mostly black phyllite and mudstone with minor tuff and dip vertically on the southwest
part of the panel.
Phyllite: A thinly bedded unit of significant thickness composed of phyllite, slate, and
mudstone is in fault contact to the southwest of the two metavolcanic panels (described
above) due to a major northwest striking fault. These sedimentary units are considered
to be part of the Sitlika Assemblage. The bedding of the clastic sediment facies is at 75°
to the southwest with tight folding structures locally.
Intermediate Intrusions: A medium grained feldspar porphyry stock intrudes Fe-

carbonate altered ultramafics in the southwest area of the property. The intrusion is too
small to be shown on Figure 7.3. The stock is approximately 600 m long, trends to the
east and forms a topographic high. Alteration is sericite-chlorite-iron carbonate-calcite
with iron-oxide staining and sulphides in the intrusion and the peridotite country rock.
Several smaller dykes and other irregular intrusions typically trend northwest and west
and are spatially associated with intense pervasive iron-carbonate-silicification which is
magnetite destructive in the peridotites.
Overburden: The Property is covered by large sections of overburden including: talus,

scree, glacial till, glacial fluvial, glacial lacustrine, alluvial, and other general surface
cover. The average thickness of the overburden as observed in drill core is 13.89 m
although much thinner overburden was observed locally.

7.3.2 STRUCTURE
The ultramafic rocks appear to have undergone multiple breakage and brecciation events
prior to and during serpentinization. Cross-cutting microveinlets are abundant. At the
outcrop level these relationships are not discernible according to Britten and Rabb
(2011). Post alteration faults and shear zones are marked by brittle features such as
slickensides, gouge, fault breccia, and shear fabrics. Two major fault zones as indicated
by northwest striking, sub vertical structures were delineated where the southernmost
fault makes up the boundary between the peridotite of the east Baptiste target and the
metavolcanics in the west Baptiste target. Foliations within the ultramafic rocks dip sub
vertical and trend to the northwest with broad zones that are thought to mimic diffuse
faults or shear zone. Strong schistosity and shear fabrics present in the phyllite unit and
the ultramafics on the southwest side of the property suggest a fault contact (Britten and
Rabb 2011).
Cumulate layers observed in the peridotite are typically small, rare, and discontinuous in
nature. Dips are variable with several sub-vertical attitudes and azimuths varying from
north to northeast. Britten and Rabb (2011) suggests that the deformation could be
related to a northerly striking fold axis but note that there is no indication of similar
deformation events in overlying metavolcanic panels. The metavolcanic rocks may
represent a lithological unconformity that was underthrust by the Trembleur ultramafic
and later translated (Britten and Rabb 2011).
7.3.3 ALTERATION
The two major alteration types of the peridotites on the Property are serpentinization and
iron-carbonate alteration/silicification. The peridotites on the Property are serpentinized
to varying degrees; however, there are several parts of the Property that have not been
explored within the northwest portion. Serpentinization of the peridotites consists of
chrysotile, lizardite, and secondary magnetite as well as minor brucite, awaruite and
chromite with trace amounts of pentlandite and heazlewoodite where mostly olivine has
been altered in the peridotites and dunites. Rare, discontinuous crack-seal carbonate
micro-veinlets are later stage than all serpentinization-possibly indicative of subsiding
metasomatism and brittle deformation (Britten and Rabb 2011). Pyroxenes are partially
to completely altered to serpentine or tremolite and magnetite with minor brucite (Britten
and Rabb 2011).
Several small sericite+chlorite+iron-magnesium carbonate(s)+magnetite±sulphides

(primarily pyrite) altered feldspar-porphyry intrusions are spatially associated with an
alteration assemblage of iron-carbonate-silica in the southeast part of the Property. This
area is dominated by iron-magnesium carbonate alteration with a strong iron-staining
caused by weathering of iron-carbonate alteration. North to northeast striking,
moderately east dipping, later stage en echelon quartz veins cross-cut alteration zones in
the western end of the feldspar-porphyry intrusion. Listwanite dominates locally with
pyrite and rare chalcopyrite associated with this alteration assemblage (Britten and Rabb
2011).

CHRYSOTILE
The fibrous variety of serpentine is known as chrysotile with a chemical formula of
Mg3Si2O5(OH)4. World-wide, chrysotile has elongated crystals which are curled to
cylindrical, but can also be bladed and massive (Mineralogical Society of America,
Handbook of Mineralogy: http://www.handbookofmineralogy.org/). In general, chrysotile
is white to pale green to dark green in colour and occurs in fibrous aggregates.
Armstrong’s (1949) reconnaissance mapping of the Fort St. James area for the
Geological Survey of Canada led to the discovery of two fibrous material occurrences and
several chromite occurrences in the serpentinized ultramafic rock of the Mt Sidney
Williams area (Figure 7.4). These historic occurrences are located along the western
boundary of the Decar property in an area which has not been explored by Cliffs and are
thus not within the resource model for this Report.

Figure 7.4 Map Showing Location of Two Historic Fibrous Material Occurrences from BC MinFile which Correlate to Armstrong’s (1949)
Occurrences
Source: MinFile website: http://www.empr.gov.bc.ca/Mining/Geoscience/MINFILE/Pages/default.aspx.

During the 2012 drill program, Caracle logging personnel noted 116 occurrences of
apparently fibrous minerals in the drill core in 20 of the 34 drillholes (Figure 7.5). The
total length fibrous intervals for 116 samples is 178.76 m (but this contains non-fibrous
material within it) and the total length of core drilled in 2012 is 16,496 m. Each
occurrence of apparently fibrous material occurred over an interval no greater than
several centimetres in thickness. Longer intervals of apparently fibrous minerals
recorded in the drill logs consist of apparently fibrous material of up to several
centimetres in length multiple times over the longer interval. The apparently fibrous
material is light green, soft and tends to fill fractures.
In order to determine the composition of the apparently fibrous material encountered

during the 2012 drill program, Caracle collected representative samples of the
apparently fibrous material. A total of 52 samples, representing 45% of the reported
fibrous material occurrences in the 2012 drill program, were collected from 17 of the 34
drillholes (Figure 7.6). No samples were collected from the 2010 core as the 2010
drilling program was operated by First Point. Minor amounts of fibrous material were
observed in the 2011 drill core (one drillhole: 11BAP10) but no samples were taken from
the 2011 drill core.
Figure 7.5 Drill Core Photo, Drillhole 12BAP038, 126 m

Figure 7.6 Map Showing the Locations of Drillholes from Which Fibrous Samples Were Collected

The samples were sent to Activation Laboratories (Actlabs) in Ancaster, Ontario in the fall
2012 for analysis by polarized light microscopy (PLM). Actlabs subcontracted EMSL
Analytical Inc. (EMSL) of Mississauga, Ontario, to complete the mineralogical analysis.
PLM is a standard technique for chrysotile analysis (California Environmental Protection
Agency, Method 435; Perkins and Harvey, 1993: EPA/600/R-93/116). PLM can be used
for samples containing 0 to 100 % fibrous material with the upper detection limit being
100 % and the lower detection limit being 0.25 %. Identification of the material is based
on optical properties: refractive indices, morphology, color and pleochroism, sign of
elongation, birefringence, and extinction characteristics.
EMSL identified variable amounts of the mineral chrysotile in most of the samples that
were sent for analysis. The amount of chrysotile in the samples ranges from <0.25% to
64.00% chrysotile. Only material identified as potentially containing fibrous minerals was
sent for analysis. Therefore, it was anticipated that all samples would contain 100%
chrysotile. Analytical results for 29 samples completed in September 2012 are given in
Table 7.1. Sample intervals listed in Table 7.1 that exceed several centimetres indicate
longer intervals of peridotite in which shorter intervals of up to several centimetres of
fibrous minerals occur. All intervals of chrysotile were less than several centimetres in
thickness. Analytical certificates for PLM analyses are given in Appendix B.
The petrographic study of fibrous minerals at Decar is preliminary and the study is still in
progress. The remaining 23 analyses were completed after the effective date of this
report and will be disclosed in a future report.
Table 7.1 Analytical Results

Sample Hole From To Interval Chrysotile Non-Fibrous
Number No. (m) (m) (m) (%) (%)
1 12BAP036 165.40 167.00 1.60 <0.25 100.00
2 12BAP036 170.40 175.10 4.70 <0.25 100.00
3 12BAP036 177.30 179.40 2.10 11.50 88.50
4 12BAP036 185.00 191.80 6.80 25.25 74.75
5 12BAP036 185.00 191.80 6.80 5.00 95.00
6 12BAP036 214.90 215.35 0.45 5.50 94.50
7 12BAP036 226.40 235.30 8.90 9.75 90.25
8 12BAP047 130.15 130.20 0.05 11.00 89.00
9 12BAP036 417.77 417.85 0.08 11.25 88.75
10 12BAP036 482.52 483.28 0.76 13.25 86.75
11 12BAP040 65.30 65.35 0.05 5.25 94.75
12 12BAP042 106.65 106.88 0.23 5.00 95.00
13 12BAP042 250.00 260.20 10.20 3.75 96.25
14 12BAP042 293.17 301.70 8.53 29.00 71.00
15 12BAP043 381.40 383.00 1.60 5.75 94.25
16 12BAP043 582.75 582.75 0.00 8.25 91.75
17 12BAP044 521.90 522.00 0.10 14.00 86.00
18 12BAP044 525.21 525.26 0.05 6.50 93.50
table continues…

Sample Hole From To Interval Chrysotile Non-Fibrous
Number No. (m) (m) (m) (%) (%)
19 12BAP046 50.00 50.23 0.23 51.50 48.50
20 12BAP046 71.30 71.37 0.07 3.50 96.50
21 12BAP046 73.20 73.27 0.07 13.00 87.00
22 12BAP046 79.60 79.65 0.05 7.25 92.75
23 12BAP046 253.55 253.57 0.02 9.25 90.25
24 12BAP047 173.65 174.06 0.41 44.25 55.75
25 12BAP047 62.00 63.00 1.00 43.25 56.75
26 12BAP047 129.65 129.75 0.10 64.00 36.00
27 12BAP047 214.20 214.60 0.40 6.00 94.00
28 12BAP049 38.55 38.60 0.05 7.25 92.75
29 12BAP049 77.46 77.50 0.04 3.50 96.50
Note: Where intervals of several metres are listed in this table, chrysotile occurs in intervals of up to
several centimetres multiple times over the listed interval. Chrysotile occurrences of more than
several centimetres have not been observed.
7.4 MINERALIZATION
The mineralization consists of the nickel-iron alloy awaruite (Ni2-3Fe). Awaruite is
pervasively disseminated in serpentinized peridotite; it occurs as relatively coarse grains
between less than 50 to 400 µm in size. Awaruite has been observed throughout the
entire extent of the peridotite but four zones of stronger mineralization have been
delineated. The four zones are the Baptiste, Sidney, Target B and the Van prospects
(Figure 7.3). The mineralization formed during serpentinization as a result of the break-
down of nickeliferous olivine and the formation of the nickel-iron alloy. The high-grade
mineralization appears to trend northwest-southeast, parallel to a major fault.
The largest target on the Property is the Baptiste prospect. The currently known length of
continuous mineralization at the Baptiste prospect is approximately 3 km in the east-west
direction and the approximate width is between 600 m and 1.5 km. The depth of the
mineralization at Baptiste has not been determined to date because several drillholes
end in mineralization. Most 2011 drillholes were 300 m deep and most 2012 holes
were 600 m deep. A fault forms the edge of the mineralized zone in the southwest.
Lower grade mineralization exists in the north and northwest but the mineralization is
open in the south-east.
Insufficient or no drilling exists at Target B, Sidney, and Van to determine the length,
width, depth and continuity of the mineralization at these prospects.
Significant portions of all three target areas are occluded by surficial overburden (Britten
2011).

8.0 DEPOSIT TYPES
The ore mineral at Decar is the nickel-iron alloy awaruite (Ni2Fe to Ni3Fe). Awaruite is
hosted by serpentinized peridotite. The mineral forms during serpentinization of
peridotite whereby nickeliferous olivine is altered to serpentine minerals and awaruite
(+magnetite) under conditions of low oxygen fugacity (Frost 1985).
Terrestrial awaruite was first described from the west coast of the South Island of New
Zealand where it was found in heavy black sand (Ulrich 1980). It occurs in peridotites in
several locations worldwide, including the Dumont nickel deposit, Quebec (Staples et al.
2011). At the Dumont deposit, awaruite occurs as grains of less than 1 mm; awaruite is
spatially associated with magnetite and chromite blebs and occurs where
serpentinization is near complete (Staples et al. 2011). Although sulfides are abundant
in the Dumont deposit, there are zones where only the nickel-alloy is present.

9.0 EXPLORATION
9.1 EARTHPROBE
Cliffs commissioned Caracle Creek to conduct a borehole EarthProbe resistivity and
direct current induced polarization (DCIP) survey on selected drillholes. The objective of
the survey was to correlate borehole results to the 2010 surface IP signature, to map the
extent of the DCIP signature between boreholes within and outside the surface IP
anomaly, and to correlate the DCIP signature of lithologies and varying awaruite
concentrations within the drillholes.
The survey was completed from September 24 to October 27, 2011, and comprised
vertical resistivity and chargeability profiling of 17 boreholes and crosshole tomographic
imaging of 8 borehole pairs within the Baptiste target area.
9.1.1 METHODOLOGY AND SURVEY DETAILS

The geophysical survey was undertaken using the EarthProbe high resolution DCIP
system. The system can be configured for the collection of high resolution surface IP
data, single borehole vertical profiles (VP), and/or multi-bore/surface-to-bore
tomographic data. For this survey, data were collected using the high resolution borehole
VP and borehole-to-borehole configurations.
IP and resistivity measurements were taken in the time-domain mode using an 8,192 ms
current injection square waveform (2,048 ms positive charge, 2,048 ms off, 2,048 ms
negative charge, 2,048 ms off).
VP provides information on the off-hole extent of intersected geologic features and can
assist in identifying off-hole features not intersected during drilling. The VP survey was
conducted using a downhole Schlumberger array. The electrode separation (“A”-spacing)
was 4 m and there are 24 electrodes on each cable. Based on the maximum electrode
separations, a theoretical formation penetration of about 25 m was achieved.
11BAP019 was run with a longer cable (300 m) that was shifted in the borehole to
achieve a 4 m electrode spacing; due to the longer cable length, the theoretical formation
penetration was approximately 70 m. Table 9.1 summarizes the borehole survey details
for the VP.

Table 9.1 VP Survey Summary
Hole Logged Dipole
Borehole Depth Interval Length
ID (m (m) (m)
11BAP002 309.0 34.2 – 126.2 4
11BAP003 310.9 76 – 168 4
11BAP006 305.0 32 – 124 4
11BAP010 302.0 78 – 170 4
11BAP011 302.0 56 – 148 4
11BAP012 301.5 34.7 – 126.7 4
11BAP014 301.4 76.5 – 168.5 4
11BAP015 304.6 61 – 153 4
11BAP016 302.0 24.7 – 116.7 4
11BAP017 302.0 75.5 – 167.5 4
11BAP019 301.4 1.1 – 281.1 16 (run in 4 m intervals)
11BAP021 302.0 1.53 – 93.53 4
11BAP022 302.0 77.6 – 161.6 4
11BAP024 302.0 36.65 – 128.65 4
11BAP026 302.0 48.2 – 140.2 4
11BAP031 302.0 7.2 – 99.2 4
Tomographic measurements for current and potential electrodes straddled across two
boreholes can assist in identifying conductor extensions between two boreholes. To
measure the apparent resistivity and chargeability between two boreholes, electrical
current is injected between two electrodes across two boreholes and the potential
difference at the two electrodes is measured immediately below the current injection
electrodes. Table 9.2 summarizes the multi-bore tomography configurations undertaken
during the survey.
Table 9.2 Multi-bore Tomography Survey Summary

Survey Interval – Survey Interval –
Primary Borehole Primary Borehole Secondary Borehole
Borehole Pairings (m) (m)
11BAP003 11BAP002 78 – 170 36.2 – 128.2
11BAP012 1.5 – 93.5 36.7 – 128.7
11BAP010 11BAP011 80 – 172 33 – 125
11BAP016 11BAP17 26.7 – 118.7 77.5 – 169.5
11BAP006 16 – 108 67 – 159
11BAP026 11BAP021 0.77 – 84.77 1 – 65
11BAP024 0.9 – 84.9 38.65 – 130.65
11BAP031 50.2 – 142.2 9.2 – 101.2

9.1.2 RESULTS AND INTERPRETATION
The vertical profiling results have been presented as resistivity and chargeability
pseudosections correlated in striplog format to lithology, DTR nickel, chromium and iron
oxide (Fe2O3 (Fe)), and magnetic susceptibility. An example of the VP results is shown in
(Figure 9.1). Results of the vertical profiling indicated a general trend of low resistivity
(less than 120 Ohm.m) and high chargeability (greater than 25 mV/V) in association with
the peridotite-hosted awaruite in most boreholes, which is consistent with the findings of
a surface IP survey previously conducted in 2010. Higher resistivity zones within the
borehole, both with and without low chargeability correlations, were typically found in
association with zones of low DTR nickel, chromium and/or iron concentrations, altered
dykes, diorite and granodiorite.
Crosshole tomography results show the peridotite-hosted awaruite as a chargeability high

and resistivity low and it dominates the crosshole tomographic data. Several other
features (low chargeability/high resistivity, low chargeability/low resistivity), representing
dykes or zones of low DTR nickel, chromium, and/or iron concentrations, intersect this
dominant signature in the crosshole data. Those features associated with dykes do not
exhibit connectivity between boreholes, which is consistent with the existing geologic
interpretation of the dyke orientation in the deposit. Zones of low DTR nickel, chromium,
and/or iron concentrations also do not exhibit connectivity between boreholes,
suggesting non-extensive distribution within the deposit.
Direct correlation of the borehole results to the extent of the 2010 surface IP anomaly
was complicated by the impacts of topography and the variable depths within the
boreholes that the EarthProbe survey was conducted. Where comparable data were
collected, the EarthProbe borehole data, showed similar resistivity and chargeability
characteristics to the 2010 surface IP data. The disappearance of the surface IP
anomaly towards the south and west of the Baptiste target is interpreted to be caused by
the overburden thickening that masks the underlying awaruite-bearing peridotite
signature.
A weak negative correlation exists between EarthProbe apparent resistivity and DTR
nickel and chromium concentration (resistivity decreases with increasing
nickel/chromium concentration). A similar weak positive correlation between apparent
chargeability and DTR chromium concentration is also apparent. It is probable that the
apparent resistivity and chargeability do not have a first order relationship with the DTR
metals, and instead have a higher order relationship with other mineralization factors
(e.g. magnetite abundance, grain size, multi-element concentration).

Figure 9.1 Example VP Apparent Resistivity and Chargeability Striplog for Borehole 11BAP031

9.2 DOWNHOLE ROCK PROPERTIES
Cliffs commissioned DGI Geoscience Inc. (DGI) to complete borehole physical rock
property and Acoustic and Optical Televiewer surveys on selected drillholes. Physical
rock properties are used to characterize rock types, define domains and constrain
geophysical models and inversions. The Televiewer data record the true orientations of
structural features, dykes and rock type contacts. In 2011, dip and azimuth data down
the drillholes were collected using a Reflex Gyro probe. In 2012, dip and azimuth data
were collected directly by the drilling company also using a Reflex Gyro probe.
Surveys were completed from July 4 to August 4, 2011, from September 15 to October
27, 2011 and from July 19 to September 25, 2012. In total, 25 drillholes were surveyed
in 2011 and 28 drillholes were surveyed in 2012. A list of drillholes and of the properties
surveyed is shown in Table 9.3 and Table 9.4.
Table 9.3 List of Drillholes Surveyed by DGI in 2011 and of Survey Parameters
Poly Natural Acoustic Optical Reflex
Borehole Electric Gamma MagIC Neutron Density IP Televiewer Televiewer Gyro
11BAP-001 x x x x x x x x x
11BAP-005* - - - - - - - - -
11BAP-006* - - - - - - - - -
11BAP-007** x x x x x - x x x
11BAP-008 x x x x x - x x x
11BAP-009* - - - - - - - - -
11BAP-010 x x x x x - x x -
11BAP-011** x x x x x - x x x
11BAP-012** x x - x x - - - x
11BAP-013** x x x x x - x x x
11BAP-015** x - - - - - - - -
11BAP017** x x x x x x x x x
11BAP-020** x x x x x x x x x
11BAP-021** x x x x x - x x x
11BAP-023** x x x x x - x x x
11BAP-024* - - - - - - - - -
11BAP-025** x x x x x - x x x
11BAP-026 x x x x x x x - x
11BAP-028** x x x x x x x x x
11BAP-029** - - - - - - - - x
11BAP-030* - - - - - - - - -
table continues…

Poly Natural Acoustic Optical Reflex
Borehole Electric Gamma MagIC Neutron Density IP Televiewer Televiewer Gyro
11BAP-031** x x x x x x x - x
11BAP-032** - - - - - - - - x
11BAP-033 x x - - x - - - -
11BAP-034 x x x x x x x - x
Notes: *Borehole obstructed
**Borehole logged partially (50% or less of expected total depth)
Table 9.4 List of Drillholes Surveyed by DGI in 2012 and of Survey Parameters
Poly Natural Acoustic Optical Full Waveform
Borehole Electric Gamma MagIC Neutron Density IP Televiewer Televiewer Sonic
12BAP036** x x - - - - - - -
12BAP037** x x x - - - x x x
12BAP038*
12BAP039** x x x x - x x x x
12BAP040** x x x - - x - x x
12BAP041** x x x - - x x x x
12BAP042*
12BAP043** x x x - - x x x x
12BAP044*
12BAP045** x x x - - x x x x
12BAP046** x x x - - x x x
12BAP047*
12BAP048 x x x - - x x x x
12BAP049 x x x x x x x x x
12BAP050 x x x - - x x x x
12BAP051*
12BAP052** x x x - - x x x x
12BAP053 x x x x x x x x x
12BAP054** x x x - - x - x x
12BAP055** x x x - - x x x
12BAP056** x x - - - - - - x
12BAP057** x x x - - x x x x
12BAP058** x x x - - x x x x
12BAP059** X x x - - x x x x
12BAP060** x x x - - x x x x
12BAP061 x x x - - x x - x
12BAP062** x x x - - x x x x
12HG-02 x x x - - x x - x
12HG-03 x x x - - - x - -
12HG-04 x x x - - x - - -
12HG-05 x x - - - x x - -
12HG-07 x x x - - x x - x
Notes: *Borehole obstructed
**Borehole logged partially (50% or less of expected total depth)

9.2.1 METHODOLOGY AND SURVEY DETAILS
Physical property logging measures physical, chemical and structural properties through
the use of geophysical probes. The probes acquire high-resolution in situ data while
being lowered and raised in the drillhole. The probes are in constant communication with
the logging computer. Readings are collected approximately every 10 cm.
The probes used at Decar in 2011 are listed in Table 9.5. Table 9.6 lists the parameters
measured by each probe.
Table 9.5 List of Probes, Resolutions and Sampling Speeds Used at Decar
Inc D m/min Inc R m/min
Probe SN* (m)** (D)*** (m)**** (R)*****
2PEA-1000 Poly Electric Probe/2PGA- 4049/2724 0.1 10 0.2 15
1000 Natural Gamma Probe
2GDA Focused Density 3036 - - 0.1 6
2LLP Neutron 2749 0.2 12 0.1 10
Magnetic Susceptibility/Inductive 5179 0.1 10 0.1 10
Conductivity (MagIC)
IP 4837 0.1 10 0.1 6
Acoustic Televiewer 80406 - - 0.0021 2.3
Optical Televiewer 103814 - - 0.0021 2.3
Full Waveform Sonic 06102 0.10 4.0 0.10 4.0
Reflex Gyro 527 5 Stationary 5 Stationary
Notes: *Serial number
**Increment speed of deployment run
***Deployment
****Increment speed of retrieval run
*****Retrieval
Table 9.6 List of Parameters Measured by Each Probe

Probe Parameter
Poly-electric Probe Normal Resistivity
Fluid Resistivity
Fluid Temperature
Natural Gamma Probe Spontaneous Potential
Single Point Resistance
Magic Magnetic Susceptibility
Inductive Conductivity
Natural Conductivity
IP Probe Chargeability
Focused Density Probe Rock Density
Neutron Porosity Probe Porosity
Acoustic Televiewer Structural Features
Optical Televiewer High-Resolution Digital Image Of Borehole Wall
Full Waveform Sonic P and S Wave Velocity
Reflex Gyro Dip/Azimuth

9.2.2 RESULTS
An example of the rock properties results is shown in Figure 9.2. Several rock properties
including magnetic susceptibility, induction, IP, gamma, neutron and resistance correlate
well with rock types, and it was possible to map dykes based on the rock properties. A
definitive correlation between the physical rock properties and the mineralization has not
been determined to date.
An example of the Televiewer results is shown in Figure 9.3. The optical Televiewer
provided excellent photos of the drill core showing details that are not visible on the core
photos taken in the core shack. The Acoustic Televiewer provided valuable structural
information including azimuth and dip of various structural features such as major open
joints and fractures, partially open joints and fractures, minor joints and fractures,
bedding, banding, foliation, veins, folds, rock type contacts and faults.
9.2.3 INTERPRETATION
DGI found that the physical properties show significant contrasts throughout the
drillholes. The identified physical property domains are interpreted to reflect different
rock types, in particular the unmineralized dykes. The rock properties domains can also
reflect differences in alteration, structure and geochemistry but clear correlations
between the signatures and alteration, structure and geochemistry have not been proven
conclusively to date.
The Acoustic and Optical Televiewer results were interpreted to represent structural and
lithologic features. The structural data allowed Caracle Creek to build an accurate
geological model of the dykes that cut the peridotite.

Figure 9.2 Figure Showing the Rock Property Results for Hole 11BAP001 (20-140 m)

Figure 9.3 Example of the Acoustic and Optical Televiewer Results for Drillhole 11BAP001

Table 9.7 Example of Structural Data Provided by the Acoustic Televiewer Survey for
Hole 11BAP001
Dip Feature
Direction Dip Width Structure
Depth (m) (°) (°) (mm) Code*
7.34 0.00 0.00 0.00 0
7.62 173.70 44.96 0.00 3
7.82 275.61 60.02 0.00 3
8.04 95.82 53.42 0.00 2
8.21 264.93 14.16 0.00 3
8.44 280.28 55.33 0.00 3
8.74 274.31 64.11 0.00 3
8.84 260.20 58.77 0.00 2
8.89 262.76 52.90 0.00 2
9.43 243.78 61.38 0.00 3
9.64 314.37 61.19 0.00 3
9.8 224.28 59.40 4.07 2
10.08 264.54 52.77 15.73 2
10.37 292.36 57.06 0.00 3
10.44 147.68 25.95 0.00 3
11.04 225.27 78.21 0.00 3
11.4 219.34 71.45 0.00 3
11.59 275.21 71.38 0.00 2
11.67 244.64 74.07 0.00 2
11.83 158.60 18.48 13.28 2
11.93 241.00 48.91 16.43 2
12.82 273.37 43.79 0.00 2
12.87 214.47 57.07 0.00 2
12.89 258.49 46.98 18.42 2
13.41 76.80 77.92 0.00 3
13.73 284.55 71.23 0.00 3
13.96 267.54 71.37 26.51 2
14.48 255.77 58.50 0.00 3
14.88 297.08 35.87 0.00 3
15.46 200.25 59.68 7.07 2
Notes: *0 = bottom of casing; 2 = partially open joint/fracture; 3 = minor joint/fracture
9.3 LIDAR SURVEY

A LiDAR survey was completed on July 10, 12 and 17, 2012 by Terra Remote Sensing
Inc. (Terra Remote) of Sidney, BC. The purpose of the survey was to obtain accurate
elevation data of the Property; a digital orthophoto for the Property was also taken.
A Piper Navajo fixed-wing aircraft equipped with a combined global positioning system
(GPS)/inertial navigation system (INS) for aircraft attitude and position was used to fly the

survey. The aircraft base was in Burns Lake, BC, approximately 80 km southwest of
Decar. The aircraft covered a total of 388.66 km2. The aircraft flew in lines which were
laid out according to terrane, weather during the survey and LiDAR shadow issues
associated with steep slopes. A total of a 703 lines spaced approximately 700 m were
flown. Survey parameters are listed in Table 9.8. Figure 9.4 shows the orthophoto as
collected by Terra Remote.
Quality control details are described in Section 12.6.
Table 9.8 LiDAR Survey Parameters

Description Survey Parameters
Average flying height 1,150 m above ground level
Average flying speed 234 km/hour
Pulse repetition frequency 100 kHz
Swath speed 34 times/second
Average point density1 1 point/m2
The accuracy of the LiDAR points is better than ± 20 cm on hard surfaces. The LiDAR
point density is greater than or equal to 1 point/m2. The LiDAR points were converted to
1 m contours; LiDAR contours are not smoothed like cartographic contours. Therefore,
they are more accurate. The resolution of the digital orthophoto is 15 cm/pixel.

Figure 9.4 Orthophoto Taken During the LiDAR Survey

9.4 RECONNAISSANCE MAPPING
A reconnaissance mapping program of outcrop was completed from August 18 to
September 3, 2012. Alpine and sub-alpine areas on and around Mt. Sidney-Williams
(1,984 masl) were targeted as these areas comprise the largest exposures of peridotite
and other basement rock on the Property. At lower elevations, in the Baptiste area,
basement exposures are generally smaller and more isolated because of the forest cover
but were also examined where possible. Rock type, outcrop boundaries, and structural
information were recorded and compiled in database format compatible with ArcGIS
mapping software. In addition, particular attention was focused on understanding the
nature and geographic distribution of historically recognized serpentine and iron
carbonate alteration zones within the host peridotite. The geology and alteration maps
are shown in Figure 9.5 and Figure 9.6.
The dominant rock type in the mapped area is coarse-grained peridotite; locally, finer-
grained peridotite and plagioclase-hornblende dykes occur. The peridotite has
undergone various degrees of serpentinization. Serpentine alteration, and the spatially
(and genetically?) associated awaruite mineralization, appears to be controlled by large,
regional scale structures. Steep angles inferred for these faults suggest apparent normal
or dip slip movement on these faults. Alternatively, the faults could be rotated thrust
faults.
Two general orientations of faults are recognized on the Property: northwest striking and
north-northwest striking. The northwest striking features are constrained by outcrop
relationships on the Property and bound the main peridotite to the south where
metasedimentary rocks are exposed. North-northwesterly striking structures are represented
by remnant breccia zones preserved locally. Serpentine fragments in the breccias indicate
post-mineralization displacement along these structures. The west contact of the peridotite
with metasediments also has a presumed north-northwesterly strike.
Iron carbonate alteration is observed primarily to the east and south of Nickel Creek near
the Decar camp and in places has resulted in up to 95 volume percent replacement of
primary peridotite by calcite/siderite. Locally, the iron-carbonate alteration overprints
serpentinized peridotite. Above the tree-line, iron-carbonate alteration appears to be
distinctly linear with approximate widths of approximately 20 m and lengths of many
hundred meters. Locally, the contact between strongly serpentinized peridotite and iron-
carbonate altered peridotite is sharp. Near strongly serpentinized, northwest trending
serpentine zones, iron-carbonate alteration is sometimes observed at, and apparently
restricted to, the serpentine zone margins and parallel the strike of the zone or
serpentine ridge. Despite the differences in vegetative cover between alteration on Mt.
Sidney Williams and that in the camp area, it appears that the alteration is distinctly
more intense and spans a broader area in the areas east of the camp. The linearity of
the iron-carbonate alteration zone above the tree line and the sharp contacts between
this alteration and serpentinization indicates a structural control of the iron-carbonate
alteration, at least locally.

Figure 9.5 Geology Map Showing Mapped Outcrops in Bold Colours and Inferred Geology in Faint Colours

Figure 9.6 Alteration Map of a Part of the Property

10.0 DRILLING
10.1 2011 DRILLING PROGRAM

A drilling program at Decar was completed between July 1 and October 26, 2011. Thirty
five diamond drillholes totalling 11,161.1 m were completed at the Baptiste prospect
and one diamond drillhole totalling 304.5 m was completed at the Target B prospect.
Cliffs contracted three drilling companies: Apex Diamond Drilling Ltd. of Smithers, BC,
Element Drilling Ltd. of Winnipeg, MB, and Midpoint Drilling Ltd. of Langley, BC. Two
helicopter-portable drill rigs, one skid drill rig and one helicopter-portable rig could be
converted to be a skid rig were used.
The core diameter of the first 100 to 150 m of each hole was HQ (63.5 mm). The core
diameter of the remainder of the holes was NQ (47.6 mm). The holes were started in HQ
in order to be able to reduce to NQ in case of unfavorable ground conditions.
Table 10.1 summarizes the drillhole details. In addition to the holes drilled in 2011,
seven holes drilled by First Point in 2010 were also included in the resource estimate.
These holes are listed in Table 10.2.
The drill core was places in wooden core trays at the drill site, labeled with the hole
identification and box number and logged on site. The core boxes were labelled with an
aluminium tag indicating the hole number and the core internal stored in each box.
The core is stored in core racks outside of the core logging facility. The core storage
racks are fenced with a locked gate (Figure 10.2).
Abundant fractures and faults occurred in the Decar drill core, which resulted in average
core recoveries of only approximately 90%.
All holes were sampled in regular intervals: a 1 m sample was collected every 4 m for the
entire length of the hole because the entire peridotite section of each hole was expected
to be mineralized.
Drilling results are described in Section 10.4.
Table 10.1 shows the locations of all holes drilled in 2011 and the ones drilled in 2010
that are included in the current resource estimate.

Table 10.1 Details of the Cliffs 2011 Drillholes
Hole Easting Northing Elevation Azimuth Dip Length
Number (m) (m) (m) (°) (°) (m)
11B001 346398 6087268 1,657 180 -60 304.5
11BAP001 349184 6083272 967 332 -49 275.0
11BAP002 348671 6083308 1,024 0 -49 309.0
11BAP003 348421 6083211 1,069 10 -51 310.9
11BAP004 348246 6083207 1,088 10 -51 304.5
11BAP005 348846 6083111 995 1 -52 304.5
11BAP006 348967 6083639 1,023 328 -47 302.0
11BAP007 348665 6083094 1,022 0 -50 304.5
11BAP008 348068 6083274 1,144 25 -49 302.0
11BAP009 348463 6083348 1,056 20 -50 606.3
11BAP010 349263 6083556 1,018 332 -50 302.0
11BAP011 349090 6083445 1,026 332 -49 302.0
11BAP012 348284 6083401 1,094 40 -52 301.5
11BAP013 348352 6083592 1,119 25 -50 300.2
11BAP014 349347 6083394 1,000 329 -52 301.4
11BAP015 349518 6083487 1,037 332 -50 304.6
11BAP016 348796 6083554 1,036 345 -50 302.0
11BAP017 348527 6083554 1,081 10 -48 305.0
11BAP018 347808 6083637 1,259 24 -53 301.5
11BAP019 347702 6083450 1,254 28 -51 300.5
11BAP020 348219 6083660 1,177 25 -49 300.0
11BAP021 349173 6083736 1,031 28 -47 302.0
11BAP022 347889 6083371 1,204 28 -54 302.0
11BAP023 349401 6083711 1,020 332 -51 301.1
11BAP024 349085 6083913 1,060 320 -49 302.0
11BAP025 347534 6083560 1,255 28 -50 301.4
11BAP026 348901 6083816 1,063 332 -49 305.0
11BAP027 347723 6083897 1,318 23 -52 301.5
11BAP028 347355 6083639 1,269 28 -51 298.4
11BAP029 347988 6083560 1,199 28 -48 298.4
11BAP030 349348 6083852 1,038 303 -49 301.5
11BAP031 348740 6083741 1,079 345 -49 301.0
11BAP032 348083 6083739 1,239 28 -50 304.8
11BAP033 349588 6083810 1,032 326 -50 301.4
11BAP034 347623 6083732 1,296 28 -49 298.4
11BAP035 347940 6083796 1,275 32 -50 298.4
Total 11,161.1
Note: One hole was drilled at Target B (11B001), all other holes were drilled at the Baptiste prospect
(11BAP001 to 11BAP035).

Table 10.2 Details of First Point’s 2010 Drillholes included in the Current Resource
Estimate
Number (m) (m) (m) (º) (º) (m)
2010DDH001 349025 6083205 970 330 -50 322.2
2010DDH002 348870 6083375 978 330 -50 306.9
2010DDH003 348135 6083475 1,142 50 -50 340.5
2010DDH004 348135 6083475 1,142 330 -50 93.0
2010DDH005 349700 6083653 1,018 50 -50 236.8
2010DDH006 349700 6083653 1,018 330 -50 340.5
2010DDH007 349025 6083205 970 150 -50 71.0
Total 1,710.8
The 2011 collar coordinates were surveyed using a differential global positioning system
(DGPS), with the exception of drillhole 11B001 which was surveyed with a handheld GPS.
The downhole surveying was completed using a Reflex Gyro downhole survey instrument
for 22 holes and with a Reflex EZ-Shot downhole survey instrument for the remaining
holes (Table 10.3). The 2010 collar coordinates were collected using a handheld GPS
and the downhole survey was completed using a Reflex EZ-Shot instrument.
The drill core was placed in wooden core trays at the drill site, labelled with the hole
aluminium tag indicating the hole number and the core interval stored in each box.
Abundant fractures and faults occurred in the Decar drill core, which resulted in average
core recoveries of only approximately 90%.
All holes were sampled in regular intervals: a one meter sample was collected every 4 m
for the entire length of the hole because the entire peridotite section of each hole was
expected to be mineralized.

Figure 10.1 Map Showing all Holes Drilled in 2011 and the 2010 Drillholes that were Included in the Resource Estimate
Note: Hole 11B001 was drilled in the Target B area.

Figure 10.2 Core Storage Location in Fort St. James, BC
10.2 2012 DRILLING PROGRAM

The 2012 drilling program was completed from June 25 to October 3, 2012. A total of
16,496.75 m or 34 drillholes were drilled in the Baptiste area of the Property. Twenty
seven of the 34 holes (or 15,095.75 m) were drilled to increase the resource estimated
in 2011 (Ronacher et al. 2011) and 7 additional holes (1,401 m) were drilled for
hydrogeological purposes. The objective of the hydrogeology drilling was to collect
information on the hydraulic properties of the bedrock and to characterize groundwater
occurrence and geochemistry. Several of the hydrogeological holes were incorporated in
the resource estimate, and one resource hole also served as a hydrogeological hole
(12BAP061-12HG01). Details of the 2012 drillholes are shown in Table 10.3.
Drilling was completed by Apex Diamond Drilling of Smithers, BC, with three drill rigs.
Two rigs were helicopter-portable and one rig was a skid-rig.
The core diameter of the first 100 to 150 m of each hole was HQ (63.5 mm). The core
diameter of the remainder of the holes was NQ (47.6 mm). The holes started with the
larger diameter (HQ) so that they could be reduced to NQ in case of unfavourable ground
conditions.

The collar coordinates were surveyed using a DGPS. The downhole surveying was
completed on all holes using a Reflex Gyro downhole survey instrument except hole
12BPA042, which collapsed before the downhole survey could be completed. Vertical
holes 12HG02, 12HG05, 12HG07 and 12HG08 were also not surveyed. It was assumed
that these holes did not deviate from the projected path.
The drill core was placed in wooden core trays at the drill site, labelled with the hole
aluminium tag indicating the hole number and the core interval stored in each box.
Abundant fractures and faults occurred in the Decar drill core which resulted in average
core recoveries of approximately 90%.
In 2012, the entire length of the drillholes was sampled in 4 m intervals.
Table 10.3 Details of the 2012 Drillholes

Number (m) (m) (m) (°) (°) (m)
12BAP036 348567.179 6082992.789 1,021.585 355 -50 600.15
12BAP037 348966.448 6083051.078 975.510 345 -50 603.00
12BAP038 348045.573 6083831.244 1,260.911 28 -50 525.00
12BAP039 348752.327 6082920.383 1,009.13 0 -50 594.06
12BAP040 348909.714 6082897.592 995.319 345 -50 588.00
12BAP041 348192.807 6083750.038 1,203.357 208 -50 600.00
12BAP042 348575.556 6082890.634 1,022.279 10 -60 301.7
12BAP043 349251.435 6082809.648 961.566 342 -50 600.00
12BAP044 348765.077 6082724.469 1,031.909 0 -50 579.00
12BAP045 348361.518 6083767.485 1,163.343 208 -70 489.50
12BAP046 349104.360 6082945.816 969.121 345 -50 600.15
12BAP047 347680.453 6084050.414 1,345.245 208 -65 600.00
12BAP048 348301.318 6083815.387 1,195.576 28 -60 300.00
12BAP049 348264.262 6084030.435 1,309.543 208 -60 600.00
12BAP050 349100.015 6082940.035 969.898 158 -50 539.19
12BAP051 347560.226 6084030.825 1,345.212 28 -50 528.56
12BAP052 348948.117 6082707.250 998.596 350 -50 600.15
12BAP053 348002.149 6084159.789 1,392.039 205 -60 600.00
12BAP054 347526.470 6084186.870 1,374.000 207 -50 600.00
12BAP055 349091.55 6082789.466 983.178 340 -50 569.67
12BAP056 347848.514 6083924.051 1,320.269 208 -65 600.00
table continues…

Number (m) (m) (m) (°) (°) (m)
12BAP057 347472.054 6083840.145 1,316.302 34.4 -48 600.00
12BAP058 349132.154 6082600.810 975.850 340.0 -50 600.15
12BAP059 347288.487 6083928.877 1,286.294 28.0 -50 600.00
12BAP060 347069.328 6083965.808 1,248.719 28.0 -50 600.00
12BAP061_12HG01 347173.446 6083740.953 1,220.669 28.0 -50 600.00
12BAP062 346976.718 6083808.424 1,208.711 28.0 -50 477.47
12HG02 347804.896 6083639.926 1,247.639 0.0 -90 300.00
12HG03 348222.700 6083652.500 1,176.100 0.0 -90 300.00
12HG04 348416.713 6083066.089 1,056.798 0.0 -50 501.00
12HG05 345615.813 6082186.939 1,044.657 0.0 -90 75.00
12HG07 347521.325 6081797.305 961.168 0.0 -90 75.00
12HG08 349132.154 6082600.810 975.850 0.0 -90 75.00
12HG09 349073.630 6084150.516 1,148.645 0.0 -90 75.00
Total 16,496.75

Figure 10.3 Drillholes Drilled at the Baptiste Prospect in 2010, 2011 and 2012
Note: The black line shows the orientation of the cross-section shown in Figure 10.4.

10.3 RESAMPLING OF 2011 CORE
In 2012, holes 11BAP001 to 11BAP011, originally drilled in 2011, were resampled. In
2011, one in every fourth m was sampled. In 2012, the 3 m intervals between the 1 m
long 2011 samples were collected and assayed. The assay data were integrated with the
2011 assay data and used for the resource update.
10.4 DRILL DATA AND DRILLING RESULTS

Pervasive, disseminated awaruite mineralization is present in serpentinized peridotite,
which is consistent with the interpretation that awaruite formed during serpentinization
(Table 10.4 and Table 10.5). The highest grade mineralization appears to trend
northwest-southeast. Figure 10.4 shows a section through the mineralized body
demonstrating the continuity and homogeneity of the mineralization; the location of
section line is shown in Figure 10.3. Grade decreases towards the northwest, north and
northeast; the mineralized body is cut off by a fault in the southwest but is open in the
southeast and at depth. The true thickness of the mineralized zone is therefore unknown
to date. The various dykes cross-cutting the peridotites are unmineralized. The average
total nickel grade in the peridotite is approximately 0.21% nickel, including nickel hosted
in silicates and nickel hosted in awaruite. Only nickel hosted in awaruite is recoverable.
Awaruite is strongly magnetic and can be recovered by Davis tube analysis; therefore,
nickel hosted by awaruite is termed DTR nickel in this report. The DTR nickel grade is
more variable within the peridotite than total nickel, with some holes exhibiting lower
grade zones of several tens of meters with total nickel grades equally high as in the rest
of the holes (e.g., 11BAP002; Figure 10.5). The average DTR Ni grade is 0.11%, with
maximum values of 0.27% DTR nickel. Figure 10.5 to Figure 10.8 show strip logs of
selected drillholes.
The average thickness of the overburden was 13.89 m, although much thinner
overburden was observed locally (minimum thickness: 0 m; maximum thickness:
44.8 m).
Water level monitoring undertaken in September 2012 in five of the newly installed
hydrogeologic monitoring wells suggested that the water table is located within
approximately 25 m of the ground surface. Preliminary estimates of average horizontal
groundwater flux rates through the Baptiste target have been made based on the results
of the packer testing. The results of Lugeon tests and packer tests showed hydraulic
conductivity (K) to be relatively consistent, with all results in the 10 to 9 m/s range.
Additional hydrogeological investigation including groundwater pumping tests with
monitoring wells and/or numerical modelling will be required to obtain more accurate
estimates of groundwater fluxes.

Table 10.4 Weighted Average Assay Results of Selected Intervals of the 2011 Drillholes
Head Concentrate Magnetic Magnetic DTR
From To Interval Ni Ni Fraction Fraction Ni
DDH (m) (m) (m) (%) (%) (g) (%) (%)
11BAP001 9.65 23.90 14.25 0.21 1.60 2.69 8.92 0.133
11BAP001 24.90 69.15 44.25 0.21 2.12 2.42 8.06 0.156
11BAP001 86.14 107.67 21.53 0.20 2.01 2.16 7.17 0.137
11BAP001 108.67 214.65 105.98 0.20 2.33 1.87 6.24 0.133
11BAP001 215.65 269.58 53.93 0.20 1.51 2.29 7.63 0.115
11BAP002 33.27 91.00 57.73 0.20 1.61 2.60 8.65 0.127
11BAP002 187.00 243.00 56.00 0.22 1.34 3.03 10.08 0.132
11BAP002 279.00 309.04 30.04 0.22 1.08 3.27 10.86 0.115
11BAP003 5.61 134.00 128.39 0.21 1.86 2.12 7.05 0.121
11BAP003 138.00 190.00 52.00 0.20 1.41 2.84 9.42 0.128
11BAP003 194.00 310.90 116.90 0.22 1.47 2.94 9.77 0.135
11BAP004 75.00 97.00 22.00 0.19 1.23 2.81 9.32 0.110
11BAP004 104.00 179.00 75.00 0.20 2.10 2.16 7.18 0.146
11BAP004 185.20 271.00 85.80 0.21 2.48 1.69 5.60 0.133
11BAP004 279.00 304.50 25.50 0.20 2.82 1.58 5.24 0.129
11BAP005 45.00 77.00 32.00 0.22 1.56 2.90 9.66 0.145
11BAP005 78.00 304.50 226.50 0.21 2.26 2.00 6.71 0.143
11BAP006 32.00 141.00 109.00 0.21 1.64 2.34 7.79 0.122
11BAP006 161.00 169.00 8.00 0.21 1.00 3.09 10.28 0.102
11BAP006 188.00 249.00 61.00 0.20 1.21 2.85 9.49 0.114
11BAP007 48.00 180.00 132.00 0.25 1.96 2.29 7.68 0.143
11BAP007 181.80 250.10 68.30 0.21 2.92 1.82 6.04 0.163
11BAP007 251.00 304.50 53.50 0.21 2.81 1.73 5.78 0.156
11BAP008 162.00 258.00 96.00 0.21 2.65 1.65 5.52 0.137
11BAP008 266.00 302.00 36.00 0.23 3.21 1.29 4.12 0.124
11BAP009 6.00 16.00 10.00 0.20 1.67 2.04 6.75 0.110
11BAP009 17.00 41.00 24.00 0.21 1.78 2.10 7.00 0.116
11BAP009 45.00 85.00 40.00 0.20 1.65 2.56 8.50 0.136
11BAP009 92.00 229.00 137.00 0.21 2.43 1.80 5.99 0.139
11BAP009 257.00 389.00 132.00 0.21 2.42 1.82 6.05 0.141
11BAP009 436.00 441.00 5.00 0.20 1.75 1.99 6.60 0.114
11BAP009 448.00 560.00 112.00 0.21 1.75 2.25 7.50 0.127
11BAP010 119.00 126.00 7.00 0.21 2.35 1.51 5.04 0.118
11BAP010 134.00 191.00 57.00 0.21 2.01 2.08 6.94 0.136
11BAP010 206.00 243.00 37.00 0.22 2.51 1.54 5.16 0.128
11BAP010 246.00 254.00 8.00 0.21 1.83 2.36 7.86 0.135
11BAP010 259.00 290.00 31.00 0.21 2.25 1.73 5.77 0.126
11BAP011 16.00 21.00 5.00 0.21 0.98 4.05 13.46 0.129
11BAP011 68.00 132.00 64.00 0.20 1.52 2.48 8.25 0.124
11BAP011 148.00 181.00 33.00 0.22 1.38 3.37 11.20 0.142
table continues…

DDH (m) (m) (m) (%) (%) (g) (%) (%)
11BAP011 196.00 221.00 25.00 0.21 1.57 2.44 8.10 0.125
11BAP011 229.00 236.00 7.00 0.21 1.41 2.83 9.37 0.131
11BAP011 240.00 248.00 8.00 0.20 1.64 2.30 7.69 0.126
11BAP011 252.00 302.00 50.00 0.22 1.76 2.27 7.56 0.121
11BAP012 12.00 67.00 54.00 0.21 2.13 1.83 6.09 0.115
11BAP012 78.00 82.00 4.00 0.24 1.65 2.10 7.03 0.115
11BAP012 88.30 95.00 6.70 0.23 2.13 1.95 6.90 0.146
11BAP012 104.50 171.00 66.50 0.23 1.67 2.73 9.07 0.143
11BAP012 182.00 301.44 118.44 0.21 2.56 1.90 6.32 0.150
11BAP013 9.00 216.00 207.00 0.21 2.58 1.62 5.41 0.134
11BAP013 226.50 262.00 35.50 0.20 2.07 1.60 5.34 0.113
11BAP013 269.00 289.00 20.00 0.22 2.33 1.46 4.87 0.103
11BAP014 52.00 265.00 213.00 0.22 1.99 2.11 7.05 0.123
11BAP014 272.00 277.00 5.00 0.21 1.58 2.62 8.70 0.121
11BAP014 297.00 301.44 4.44 0.20 1.39 2.68 8.93 0.114
11BAP015 75.00 78.00 3.00 0.22 2.01 2.07 6.90 0.138
11BAP015 114.00 119.00 5.00 0.22 1.83 1.34 4.48 0.082
11BAP015 138.00 139.00 1.00 0.22 0.97 2.89 9.60 0.093
11BAP015 151.00 154.00 3.00 0.24 1.89 1.44 4.80 0.090
11BAP015 234.00 235.00 1.00 0.19 2.01 2.17 7.20 0.145
11BAP015 243.00 304.50 61.50 0.22 2.23 1.78 5.90 0.116
11BAP016 16.75 104.00 87.25 0.21 1.71 2.39 7.95 0.124
11BAP016 115.00 209.00 94.00 0.22 2.36 1.70 5.67 0.125
11BAP016 223.00 248.00 25.00 0.22 1.36 2.63 8.74 0.115
11BAP016 283.00 299.00 16.00 0.22 1.75 2.10 7.00 0.103
11BAP017 17.00 75.00 58.00 0.21 2.16 2.13 7.08 0.133
11BAP017 82.00 215.00 133.00 0.20 1.86 2.17 7.18 0.126
11BAP017 223.00 304.91 81.91 0.22 1.55 2.24 7.45 0.107
11BAP018 9.00 268.00 259.00 0.20 2.54 1.45 4.81 0.116
11BAP018 273.00 301.00 28.00 0.21 2.82 1.62 5.37 0.144
11BAP019 202.00 214.00 12.00 0.21 1.37 2.42 8.08 0.105
11BAP019 222.00 223.00 1.00 0.23 1.13 3.18 10.60 0.120
11BAP019 255.00 300.45 44.85 0.21 2.33 1.85 6.15 0.128
11BAP020 7.01 273.00 265.99 0.21 2.89 1.38 4.58 0.124
11BAP020 296.00 296.57 0.57 0.19 2.68 1.36 4.50 0.121
11BAP021 21.00 300.55 279.55 0.22 2.40 1.64 5.47 0.121
11BAP022 109.55 110.00 0.45 0.23 1.99 1.75 5.80 0.116
11BAP022 118.00 119.00 1.00 0.18 0.76 4.81 16.00 0.122
11BAP022 126.00 301.45 174.45 0.20 1.75 2.39 7.98 0.119
11BAP023 33.00 72.00 39.00 0.21 1.68 2.21 7.31 0.119
11BAP023 80.00 301.00 221.00 0.22 2.50 1.72 5.73 0.131
table continues…

DDH (m) (m) (m) (%) (%) (g) (%) (%)
11BAP024 10.00 70.00 60.00 0.24 2.60 1.50 4.99 0.098
11BAP024 79.00 119.00 40.00 0.21 1.63 2.30 7.68 0.108
11BAP024 142.00 175.00 33.00 0.20 1.54 2.34 7.82 0.117
11BAP024 210.00 218.00 8.00 0.22 1.63 1.67 5.53 0.092
11BAP024 235.00 302.00 67.00 0.21 1.97 1.98 6.61 0.125
11BAP025 174.00 202.00 28.00 0.22 1.41 2.24 7.44 0.101
11BAP025 215.00 301.45 86.45 0.23 2.48 1.48 4.93 0.113
11BAP026 10.00 13.00 3.00 0.23 1.14 2.74 9.10 0.097
11BAP026 20.00 25.00 5.00 0.22 1.81 2.35 7.78 0.096
11BAP026 32.00 49.00 16.49 0.21 1.42 1.97 6.54 0.072
11BAP026 132.00 133.00 1.00 0.22 0.54 5.96 19.80 0.107
11BAP026 144.00 145.00 1.00 0.16 0.58 4.83 16.00 0.094
11BAP026 164.00 165.00 1.00 0.21 1.48 1.93 6.40 0.094
11BAP026 180.00 181.00 1.00 0.21 0.89 3.58 11.90 0.106
11BAP026 188.00 200.00 12.00 0.22 1.48 2.01 6.68 0.089
11BAP026 212.00 213.00 1.00 0.21 1.36 2.21 7.40 0.100
11BAP026 240.00 241.00 1.00 0.22 2.55 1.31 4.40 0.111
11BAP027 6.00 19.00 13.00 0.22 2.85 1.26 4.15 0.103
11BAP027 35.00 74.00 39.00 0.24 2.86 1.24 4.11 0.107
11BAP027 80.00 102.00 22.00 0.24 2.75 1.52 5.05 0.133
11BAP027 118.00 301.45 183.45 0.22 3.18 1.18 3.92 0.113
11BAP028 191.00 298.39 107.39 0.21 2.15 2.26 7.47 0.129
11BAP029 11.00 298.39 287.39 0.21 3.21 1.27 4.22 0.126
11BAP030 13.00 158.00 145.00 0.22 2.08 1.92 6.37 0.126
11BAP030 174.00 301.45 127.45 0.21 2.22 2.01 6.70 0.139
11BAP031 5.20 53.00 47.80 0.20 1.58 2.02 6.71 0.100
11BAP031 116.00 117.00 1.00 0.20 1.76 2.40 8.00 0.140
11BAP031 136.00 137.00 1.00 0.20 1.66 1.85 6.10 0.102
11BAP031 173.00 176.00 3.00 0.23 2.03 1.91 6.40 0.129
11BAP031 192.00 193.00 1.00 0.20 2.69 1.06 3.50 0.095
11BAP032 6.00 12.20 6.20 0.20 4.58 1.10 3.63 0.135
11BAP032 23.00 254.00 231.00 0.21 3.91 1.04 3.45 0.120
11BAP033 32.00 200.00 168.00 0.22 1.36 2.54 8.45 0.103
11BAP033 288.00 289.00 1.00 0.21 0.86 4.20 13.50 0.116
11BAP034 6.00 63.00 57.00 0.21 2.27 1.48 4.92 0.107
11BAP034 68.35 110.00 38.44 0.21 2.98 1.45 4.82 0.135
11BAP034 126.00 298.40 172.40 0.20 2.75 1.27 4.23 0.111
11BAP035 6.00 39.00 33.00 0.23 2.60 1.58 5.24 0.117
11BAP035 50.00 51.00 1.00 0.22 1.62 1.87 6.20 0.100
11BAP035 70.00 298.40 228.40 0.22 3.53 1.09 3.61 0.115
Note: DDH = diamond drillhole

Table 10.5 Weighted Average Assay Results of Selected Intervals of the 2012 Drillholes
DDH (m) (m) (m) (%) (%) (g) (%) (%)
12BAP036 31.15 90.10 58.95 0.20 1.66 2.26 7.54 0.122
12BAP036 95.84 600.15 504.31 0.20 2.19 2.31 7.70 0.160
12BAP037 32.15 40.00 7.85 0.20 1.75 2.01 6.68 0.117
12BAP037 64.00 216.00 152.00 0.22 2.25 2.09 6.95 0.146
12BAP037 224.15 265.03 40.88 0.21 2.69 1.77 5.90 0.150
12BAP037 288.00 290.00 2.00 0.22 3.03 1.47 4.90 0.149
12BAP037 298.00 600.00 302.00 0.22 3.40 1.31 4.38 0.145
12BAP038 6.00 114.00 108.00 0.20 2.56 1.48 4.92 0.114
12BAP038 478.00 499.70 21.70 0.21 2.50 1.34 4.47 0.111
12BAP038 506.00 525.00 19.00 0.20 2.62 1.36 4.53 0.116
12BAP039 38.21 154.00 115.79 0.22 1.57 3.07 10.24 0.155
12BAP039 164.29 594.06 429.77 0.20 2.47 1.95 6.49 0.152
12BAP040 37.00 84.00 47.00 0.19 1.97 1.79 6.00 0.123
12BAP040 91.90 588.00 496.10 0.20 2.61 1.89 6.30 0.156
12BAP041 10.00 296.74 286.74 0.19 2.45 1.77 5.91 0.135
12BAP041 302.68 551.30 248.62 0.20 2.43 1.89 6.29 0.145
12BAP042 154.00 242.00 88.00 0.22 1.60 2.30 7.67 0.117
12BAP043 45.55 425.95 380.40 0.20 2.07 2.36 7.87 0.156
12BAP043 452.00 476.00 24.00 0.21 2.16 1.98 6.60 0.142
12BAP043 509.41 535.72 26.31 0.22 2.44 1.82 6.08 0.147
12BAP043 542.00 564.10 22.10 0.23 2.91 1.58 5.26 0.141
12BAP043 578.00 600.00 22.00 0.22 2.85 1.62 5.42 0.145
12BAP044 240.00 477.35 237.35 0.22 1.92 2.47 8.25 0.153
12BAP044 493.00 579.00 86.00 0.20 1.82 2.41 8.02 0.146
12BAP045 10.00 117.25 107.25 0.22 1.88 1.92 6.38 0.116
12BAP045 133.00 157.74 24.74 0.20 1.88 2.07 6.90 0.138
12BAP045 168.88 487.00 318.12 0.22 2.69 1.80 5.99 0.153
12BAP046 28.50 68.00 39.50 0.21 1.90 2.14 7.13 0.123
12BAP046 80.00 106.00 26.00 0.20 1.70 2.48 8.27 0.141
12BAP046 113.79 292.00 178.21 0.22 2.29 2.13 7.10 0.154
12BAP046 312.00 494.40 182.40 0.21 2.72 1.73 5.76 0.148
12BAP046 508.00 520.00 12.00 0.22 1.49 2.54 8.47 0.119
12BAP046 532.00 585.33 53.33 0.23 3.20 1.53 5.11 0.159
12BAP046 595.94 600.15 4.21 0.21 2.70 1.79 6.02 0.150
12BAP047 14.00 64.00 50.00 0.21 2.90 1.06 3.54 0.095
12BAP047 124.88 132.00 7.12 0.22 4.39 0.78 2.62 0.099
12BAP047 150.00 198.00 48.00 0.20 2.80 1.41 4.68 0.120
12BAP047 206.00 600.00 394.00 0.21 3.83 1.21 4.03 0.147
12BAP048 4.00 91.30 87.30 0.21 2.79 1.09 3.64 0.099
12BAP048 108.00 130.00 22.00 0.20 2.94 0.87 2.88 0.090
table continues…

DDH (m) (m) (m) (%) (%) (g) (%) (%)
12BAP049 486.00 600.00 114.00 0.21 3.89 1.01 3.37 0.119
12BAP050 34.50 186.00 151.50 0.20 2.13 2.19 7.30 0.150
12BAP050 193.00 229.00 36.00 0.20 1.94 2.35 7.84 0.150
12BAP051 4.00 8.00 4.00 0.20 2.99 0.99 3.30 0.099
12BAP051 32.00 33.50 1.50 0.20 1.40 2.43 8.10 0.113
12BAP051 42.00 55.20 13.20 0.23 1.74 1.61 5.39 0.093
12BAP051 75.00 89.90 14.90 0.24 3.63 0.93 3.09 0.105
12BAP051 99.60 162.60 63.00 0.18 2.37 1.36 4.55 0.100
12BAP051 179.50 350.00 170.50 0.21 3.72 1.00 3.34 0.120
12BAP051 358.00 374.00 16.00 0.20 5.45 0.64 2.10 0.114
12BAP051 418.00 422.00 4.00 0.21 3.12 0.99 3.30 0.103
12BAP051 454.00 478.00 24.00 0.22 2.41 1.47 4.92 0.112
12BAP052 275.00 600.15 325.15 0.21 2.21 2.19 7.31 0.154
12BAP053 274.00 306.00 32.00 0.23 4.46 0.73 2.44 0.095
12BAP053 338.00 358.00 20.00 0.22 3.53 0.99 3.32 0.115
12BAP053 390.00 600.00 210.00 0.21 3.84 0.90 2.99 0.108
12BAP054 20.00 52.00 32.00 0.21 2.36 1.53 5.09 0.113
12BAP054 64.00 112.00 48.00 0.22 2.79 1.22 4.08 0.103
12BAP054 128.00 132.00 4.00 0.23 2.70 1.04 3.50 0.094
12BAP054 140.00 158.00 18.00 0.22 1.77 1.86 6.18 0.105
12BAP054 169.15 196.00 26.85 0.20 2.54 1.44 4.82 0.118
12BAP054 204.00 221.46 17.46 0.21 3.56 1.03 3.45 0.116
12BAP054 233.68 596.00 362.32 0.20 2.77 1.67 5.55 0.148
12BAP055 48.00 72.00 24.00 0.23 2.21 2.15 7.18 0.159
12BAP055 90.00 98.00 8.00 0.22 1.41 2.45 8.15 0.116
12BAP055 106.00 443.73 337.73 0.22 2.58 1.96 6.52 0.162
12BAP055 451.17 569.67 118.50 0.21 2.67 1.52 5.07 0.143
12BAP056 5.70 388.50 382.80 0.22 3.86 1.16 3.86 0.127
12BAP056 394.40 600.00 205.60 0.21 3.50 1.32 4.40 0.148
12BAP057 2.35 4.00 1.65 0.20 2.13 1.45 4.80 0.103
12BAP057 16.00 142.90 126.90 0.20 2.24 1.49 4.97 0.106
12BAP057 159.10 233.50 74.40 0.21 2.91 1.08 3.60 0.101
12BAP057 246.00 375.25 129.25 0.20 3.65 1.13 3.78 0.135
12BAP057 389.22 420.00 30.78 0.20 3.26 1.16 3.88 0.124
12BAP057 430.00 510.00 80.00 0.20 3.89 1.01 3.36 0.127
12BAP057 522.00 542.00 20.00 0.22 4.47 0.88 2.94 0.122
12BAP058 484.00 600.15 116.15 0.24 2.62 1.99 6.62 0.163
12BAP059 3.75 15.00 11.25 0.22 2.14 1.30 4.35 0.093
12BAP059 27.00 383.00 356.00 0.23 3.46 1.36 4.52 0.151
12BAP059 419.00 447.00 28.00 0.22 2.40 1.36 4.54 0.105
12BAP060 88.00 92.00 4.00 0.24 1.09 2.56 8.50 0.093
table continues…

DDH (m) (m) (m) (%) (%) (g) (%) (%)
12BAP060 104.00 120.00 16.00 0.21 1.11 2.49 8.28 0.091
12BAP060 132.00 136.00 4.00 0.23 1.23 2.58 8.60 0.106
12BAP060 152.00 400.00 248.00 0.22 3.68 1.34 4.46 0.149
12BAP061_12HG01 308.95 312.00 3.05 0.26 1.26 2.70 9.00 0.113
12BAP061_12HG01 332.00 508.00 176.00 0.21 2.21 1.75 5.85 0.125
12HG02 16.00 300.00 284.00 0.21 3.19 1.25 4.17 0.130
12HG03 5.33 300.00 294.67 0.21 3.28 1.42 4.72 0.134
12HG04 48.00 100.00 52.00 0.22 1.24 3.15 10.48 0.116
12HG04 112.00 144.00 32.00 0.21 2.03 1.75 5.83 0.117
12HG04 180.00 220.00 40.00 0.19 2.03 2.05 6.84 0.135
12HG04 228.00 380.00 152.00 0.21 2.50 1.70 5.66 0.136
12HG04 408.00 501.00 93.00 0.23 2.63 1.63 5.42 0.136
12HG09 10.17 75.00 64.83 0.23 3.58 1.02 3.40 0.120

Figure 10.4 SSW-NNE Section Across the Mineralized Body, Looking WNW
Note: The section line is shown in Figure 10.3.

Figure 10.5 Strip Log of Hole 11BAP002
Note: A zone of lower DTR nickel with constant total nickel.

Figure 10.6 Strip Log of Hole 11BAP007

Figure 10.7 Strip Log for Drillhole 12BAP036 (0 to 300 m)
Note: The interval from 300 to 600 m is shown in Figure 10.8.

Figure 10.8 Strip Log for Drillhole 12BAP036 (300-600 m)
Note: The interval from 0 to 300 m is shown in Figure 10.7.

11.0 SAMPLE PREPARATION, ANALYSES AND
SECURITY
11.1 SAMPLE PREPARATION

Drill core selected for sampling was cut in half using core saws. In 2011, drill core
samples of 1 m length were collected every fourth meter along the drillhole, irrespective
of rock type. Coarse rejects of the drill core samples collected by First Point in 2010
were resampled to ensure consistency in analytical procedure. First Point collected
samples of 1 m length every 5 m from the 2010 drillholes. In 2012, the entire length of
all holes was sampled in 4 m intervals and each rock type was sampled separately. In
addition, unsampled core from drillholes 11BAP001 to 11BAP011 was sampled in 2012
(see Section 10.3).
Samples were put in plastic bags with pre-numbered sample tags. Certified reference
materials (CRMs) and blanks were inserted into the sample stream in regular intervals:
every 20th sample was a CRM or a blank. CRM OREAS 13b, produced by Ore Research
and Exploration Pty Ltd. (ORE), was used as a CRM for the ICP analyses and CRMs OREAS
73a, OREAS 72b, OREAS 74b and OREAS 75b, also produced by ORE, were used for the
XRF analyses. Table 11.1 and Table 11.2 list the average nickel values and standard
deviations of the CRMs used in 2011 and 2012.
Table 11.1 Overview of the CRM Used During the 2011 Drilling Program
CRM Name Average Ni Standard Deviation Method Matrix
OREAS 13b 2,247 ppm 155 ppm Four-acid PGE, copper, nickel, gold in
digestion gabbro
OREAS 73a 1.44% 0.06% Fusion Nickel-sulfide in ultramafic
material
Note: PGE = platinum group element
Table 11.2 Overview of the CRM Used During the 2012 Drilling Program
CRM Name Average Ni Standard Deviation Method Matrix
OREAS 13b 2,247 ppm 155 ppm Four-acid PGE, copper, nickel, gold in
digestion gabbro
OREAS 72b 0.71% 0.02% Lithium-borate Massive nickel sulphide ore mixed
fusion XRF with barren ultramafic material

Coarse-grained silica purchased from Analytical Solutions Inc. was used as blank for the
ICP and XRF analyses.
Every 25th sample was cut in half again and the quarter core sample was analyzed as a
core duplicate. In addition, 50 kg of representative Decar peridotite were homogenized
and ground to 200 mesh by Cliffs. This material was inserted into the samples stream to
test the repeatability of the Davis tube metallurgical analysis.
Individual sample bags were collected in rice bags, transported to Smithers, BC, by the
camp expediter CJL Enterprises in 2011 and Rugged Edge Holdings in 2012 and shipped
to the Activation Laboratories Ltd. (Actlabs). In 2011, the samples were shipped to
Actlabs in Ancaster, ON, by Bandstra Transportation Systems Ltd. (Bandstra) via transport
truck and in 2012 samples were shipped to Actlabs in Kamloops, BC, by Bandstra and by
Canadian Freightways via transport truck. Actlabs’ quality system is accredited to the
International Organization for Standardization/International Electrotechnical Commission
(ISO/IEC) 17025 standards. The ISO/IEC 17025 certification includes ISO 9001 and ISO
9002 specifications (www.actlabs.com). There is no relationship between Actlabs and
Cliffs other than that Cliffs engaged Actlabs to complete the analysis of the Decar drill
core samples.
The drill core was transported to Fort St. James, BC, where it is stored at 1390 Highway
27. The core storage area is surrounded by a chain-link and barb-wire fence (Figure
11.1).
Figure 11.1 Core Storage Area in Fort St. James
Note: The core is stored in core racks.

11.2 SAMPLE ANALYSES
At Actlabs, the drill core samples were crushed to 85% passing 10 mesh (2 mm), 250 g
were split and pulverized to 95% passing 200 mesh (74 µm).
Three different analyses were performed on all samples:
 Major oxides (whole rock) + selected trace elements (including nickel and
chromium) by lithium metaborite/tetraborate fusion and instrument finish
(inductively coupled plasma- optical emission spectrometry)
 Davis tube magnetic separation using the parameters listed in Table 11.3
 Major oxides (whole rock) + selected trace elements (including nickel and
chromium) of the Davis tube magnetic concentrate by Li metaborite/tetraborate
fusion XRF.
Table 11.3 Parameters of the Davis Tube Analysis

Parameter Value
Magnetic field strength (Gauss) 3,500
Flow rate (mL/min) 400
Tube angle (°) 45
Stroke rate (strokes/min) 90
Tube diameter (outer diameter, mm) 40
Agitation period (min) 9
Start mass (g) 30
In 2011, specific gravity measurements were completed on 527 drill core samples by
measuring the mass of the samples in air and in water. In 2012, 907 drill core pulps
were analyzed using a pycnometer.
The sample preparation, security, and analytical procedures are adequate.

12.0 DATA VERIFICATION
12.1 CARACLE CREEK SITE VISIT

Caracle Creek geologist Elisabeth Ronacher visited the Property on October 5 and 6,
2011. During the site visit, core from drill holes 11BAP019, 11BAP024 and 11BAP022
was inspected (Figure 12.1). The core shack and core cutting facilities were visited
(Figure 12.2). In addition, a helicopter tour of the Baptiste, Sidney, Van and Target B
prospects was completed. This tour provided an excellent overview of the topography
and drainage of the Property and access to the Property.
Elisabeth Ronacher completed another site visit on September 12 and 13, 2012. During
the second site visit, mineralization in drill core from holes 12BAP036, 12BAP038, and
12BAP048 was reviewed in detail. The core logging and cutting facilities were inspected.
The drill rig drilling hole 12BAP061 was also inspected (Figure 12.3). In addition, the
secure core storage facility in Fort St. James was visited.
The site was also visited by Caracle Creek geophysicist and environmental geoscientist
Julie Palich on August 22, 2012. During the visit, Ms. Palich discussed the requirements
of the hydrogeological drilling program with the drilling company and interacted with DGI
regarding the rock property survey. She also sited the location for drillhole 12HG-05.
Figure 12.1 Drill Core from Hole 11BAP024, 185 m
Note: The rocks are strongly serpentinized with relict pyroxene and olivine in a serpentine matrix.

Figure 12.2 Core Logging Facility at Decar
Figure 12.3 Rig Drilling Hole 12BAP061

12.2 2011 ASSAY QUALITY CONTROL
12.2.1 EXTERNAL CERTIFIED REFERENCE MATERIALS

Two CRMs were added to the samples stream, OREAS 13b and OREAS 73a. Every 20 th
sample was either a CRM or a blank. The certified average values and standard
deviations for nickel are provided in Table 11.1. Quality control analysis consists of
verifying the analyzed value of the CRM. CRM analysis results are considered acceptable
if they fall within ± 3 standard deviations of the certified average value.
OREAS 13b was analyzed by ICP and all of the 83 CRMs passed (Figure 12.4). A slight
bias low was observed in the first batch of samples whereas the CRM in batches starting
with job A11-13075 showed a slight bias high. The performance of this standard is
acceptable, as all of the assays are within ±2 standard deviation of the standard’s
certified mean. OREAS 13b was also analyzed by XRF and all of the assays passed; a
slight bias high was observed.
OREAS 73a was analyzed by XRF and all 81 CRMs passed (Figure 12.5). The variability of
the standard results is very low indicating that the standard deviations as defined for
lithium-metaborate fusion ICP analysis are less tight than for lithium-metaborate fusion
XRF analysis (pers. comm. Hamlin June 23, 2012).

Figure 12.4 Performance of OREAS 13b with Time

Figure 12.5 Performance of OREAS 73a with Time
12.2.2 BLANKS
The performance of the blanks (coarse-grained silica) inserted into the sample stream is
shown in Figure 12.6. Blanks are considered acceptable if they fall within three times
the detection limit for the element of interest. The detection limit for nickel was 0.01%
for the ICP analysis and 0.003% for the XRF analysis. All ICP blanks passed; one XRF
blank failed. The single XRF blank failure is likely due to a sample mix up. The blank
performance is acceptable.

Figure 12.6 Performance of Blanks Inserted into the Sample Stream

12.2.3 CORE DUPLICATES
Quarter core duplicates of every 25th sample were analyzed by ICP, Davis tube and XRF.
The head sample nickel by ICP duplicates are shown in Figure 12.7. The original sample
is plotted on the abscissa and the duplicate on the ordinate. A regression line was
calculated after eliminating 13 outliers, which results in a failure rate of 8.1% given that
the total population consisted of 161 samples. The correlation coefficient is 0.92, which
is acceptable for core duplicates. The blue lines in Figure 12.7 to Figure 12.19 are 95%
confidence bands representing the uncertainties of the estimated regression line based
on the duplicate data. The red lines are 95% prediction bands covering the area that
additional duplicates are predicted to fall in at a 95% confidence level.
The second plot in Figure 12.7 to Figure 12.19 shows the absolute difference between
the pairs plotted against the duplicate pair mean. This plot is another graphic
representation of the relationship between grade and precision where lower grades have
a smaller pair absolute difference than higher grades.
Figure 12.8 shows the Davis tube magnetic fraction for the core duplicates. The
correlation coefficient is 0.91 excluding 13 outliers, and the failure rate is 8.7%.
Figure 12.9 shows the correlation between original and core duplicate samples for Davis
tube concentrate nickel as analyzed by XRF. The correlation coefficient is 0.92 excluding
9 outliers, and the failure rate is 6%.
Figure 12.10 shows the correlation between original and core duplicate samples for DTR
nickel. The correlation coefficient is 0.94 excluding 9 outliers, and the failure rate is 6%.
All core duplicates are acceptable.

Figure 12.7 Performance of Core Duplicates for Nickel as Analyzed by ICP

Figure 12.8 Performance of the Davis Tube Magnetic Fraction of the Core Duplicates

Figure 12.9 Performance of Core Duplicates for Nickel as Analyzed by XRF on the Davis
Tube Concentrate

Figure 12.10 Performance of Core Duplicates for DTR Nickel

12.2.4 PREPARATION DUPLICATES
Actlabs inserted preparation duplicates as a routine internal quality control measure.
Preparation duplicates are duplicates of the coarse crush material and measure the error
of sample size reduction and analysis.
Figure 12.11 shows the 82 preparation duplicates for nickel as analyzed by ICP. The
Figure 12.12 shows the 56 preparation duplicates for the Davis tube magnetic fraction.
The correlation coefficient is 0.94 excluding 5 outliers and the failure rate is 8.9%.
Figure 12.13 shows the 42 preparation duplicates for nickel as analyzed by XRF. The
Figure 12.14 shows the 43 preparation duplicates for the DTR nickel. The correlation
coefficient is 0.90 excluding 4 outliers, and the failure rate is 9.3%.
The 2011 preparation duplicates are acceptable, however, Caracle Creek recommends
that Actlabs inserts preparation duplicates in regular and more frequent intervals in the
future. This will allow for more statistically meaningful analysis and interpretation of the
preparation duplicates.
12.2.5 PULP DUPLICATES

Actlabs inserted pulp duplicates for the nickel ICP and XRF analysis but did not use pulp
duplicates for the Davis tube analysis. Figure 12.15 shows the 237 pulp duplicates for
nickel analyzed by ICP. The correlation coefficient is 0.97 excluding 4 outliers, and the
failure rate is 1.9%. Figure 12.16 shows the 19 pulp duplicates for nickel analyzed by
XRF. The correlation coefficient is 0.97. There are 2 outliers, and the failure rate is
10.5%.
The pulp duplicates for ICP and XRF are acceptable. Caracle Creek recommends that
Actlabs include pulp duplicates for the Davis tube in the future.

Figure 12.11 Performance of Preparation Duplicates for Nickel as Analyzed by ICP

Figure 12.12 Performance of the Davis Tube Magnetic Fraction of the Preparation
Duplicates

Figure 12.13 Performance of Preparation Duplicates for Nickel as Analyzed by XRF on the
Davis Tube Concentrate

Figure 12.14 Performance of Preparation Duplicates for DTR Nickel

Figure 12.15 Pulp Duplicates for Nickel (ICP)

Figure 12.16 Pulp Duplicates for Nickel (XRF)

12.2.6 CHECK ASSAYS
Pulps of 10% of the samples were sent to an outside laboratory to test the accuracy of
the assay data. Caracle Creek submitted 343 samples including standards, blanks and
pulp duplicates to SGS in Vancouver. SGS is an ISO/IEC17025:2005 certified laboratory.
The ICP nickel analysis cannot be compared because different techniques were used by
the two laboratories. Actlabs used a lithium metaborite fusion whereas SGS used a
sodium peroxide fusion.
Figure 12.17 shows the results for the Davis tube magnetic weight fraction. The
correlation coefficient is 0.9977 excluding 8 outliers; the failure rate is 2.8%.
Figure 12.18 shows the original samples for the nickel analyses by XRF plotted against
the check assays. The correlation coefficient is 0.9555 excluding 18 outliers; the failure
rate is 6.4%.
Figure 12.19 shows the DTR nickel results for the check assays. The correlation
coefficient is 0.9182 excluding 27 outliers. The failure rate is 9.6%.
The discrepancies in the performance of the check assays may be due to differences in
the set-up of the Davis tube between the two laboratories. SGS used a start mass of
20 g whereas Actlabs used 30 g as feed for the Davis tube. SGS required 1.5 g of
concentrate material for the XRF analysis and had to use a pyrosulphate fusion for any
concentrates of less than 1.5 g. Table 12.1 lists the parameters used by Actlabs and
SGS.
Table 12.1 Comparison of the Davis Tube Parameters Used by Actlabs and SGS
Actlabs SGS
Magnetic field strength (Gauss) 3,500 3,500
Flow rate (mL/min) 400 400
Tube angle (°) 45 45
Stroke rate (strokes/min) 90 90
Tube diameter (outer diameter, mm) 40 41
Agitation period (min) 9 4
Start mass (g) 30 20

Figure 12.17 Plot Showing the Original Samples versus the Check Samples for the Davis
Tube Magnetic Weight Fraction

Figure 12.18 Plot Showing the Original Samples versus the Check Samples for the Nickel
Analysis by XRF

Figure 12.19 Plot Showing the Original Samples versus the Check Samples for the DTR
Nickel

Caracle Creek concludes based on the quality control review that the data collected
during the 2011 drilling program, including the re-assays of the 2010 drillhole samples,
are adequate and can be used for the purpose of resource estimation. However, Caracle
Creek recommends analyzing Davis tube pulp duplicates and a larger number of Davis
tube preparation duplicates in the future.
12.3 2012 ASSAY QUALITY CONTROL
12.3.1 2012 EXTERNAL CRM

In 2012, CRM OREAS 13b was used to test the accuracy of the ICP analysis. The
accuracy of the XRF analysis was tested by inserting a low-, medium- and high-grade
nickel CRM into the sample stream (OREAS 72b, OREAS 74b, OREAS 75b; Table 12.2).
Similar to 2011, every 20th sample was either a blank or a CRM.
A total of 147 OREAS 13b CRM were analyzed (Figure 12.20). One analysis fell outside
the acceptable range (certified value plus three standard deviations). The performance
of this standard is acceptable.
A total of 52 OREAS 72b CRM were analyzed (Figure 12.21). A slight bias high was
noticed. All standards fell within acceptable limits.
A total of 47 OREAS 74b and 75b each were analyzed (Figure 12.22 and Figure 12.23).
A slight bias high was also noticed for OREAS 74b and OREAS 75b. All standards fell
within acceptable limits.

Figure 12.20 Performance of OREAS 13b (ICP CRM) with Time
Figure 12.21 Performance of OREAS 72b (Low-grade XRF CRM) with Time

Figure 12.22 Performance of OREAS 74b (Medium-grade XRF CRM) with Time
Figure 12.23 Performance of OREAS 75b (High-grade XRF CRM) with Time

12.3.2 2012 BLANKS
A total of 151 blanks (coarse-grained silica) were analyzed in 2012. Two ICP blanks and
seven XRF blanks exceeded three times the value of the detection limit (0.01% nickel for
ICP; 0.003% nickel for XRF; Figure 12.24 and Figure 12.25). The blank contamination
likely occurred during the preparation stage. However, the magnitude of the blank failure
is insignificant given the samples analysis results are in the percent range. The
performance of blanks is acceptable.
Figure 12.24 Performance of the Blank Material During ICP Analysis with Time
Figure 12.25 Performance of the Blank Material During XRF Analysis with Time

12.3.3 2012 CORE DUPLICATES
Similar to 2011, quarter core duplicates of every 25th sample were analyzed by ICP, Davis
tube and XRF. The head sample nickel by ICP duplicates are shown in Figure 12.26. The
original sample is plotted on the abscissa and the duplicate on the ordinate. A
regression line was calculated, and the correlation coefficient is 0.91 which is acceptable
for core duplicates.
Figure 12.27 shows the Davis tube magnetic fraction for the core duplicates. The
correlation coefficient is 0.91 excluding 1 outlier of 291 samples.
Figure 12.28 shows the correlation between original and core duplicate samples for
Davis tube concentrate nickel as analyzed by XRF. The correlation coefficient is 0.90
excluding six outliers, and the failure rate is 2.4%.
Figure 12.29 shows the correlation between original and core duplicate samples for DTR
nickel. The correlation coefficient is 0.96.
The performance of the core duplicates is acceptable.

Figure 12.26 2012 Core Duplicates for Nickel Analyzed by ICP

Figure 12.27 Plot Showing 2012 Core Duplicates for the Magnetic Fraction (Davis Tube
Concentrate)

Figure 12.28 2012 Core Duplicates for Nickel Analyzed by XRF

Figure 12.29 2012 Core Duplicates for DTR Nickel

12.3.4 2012 PREPARATION DUPLICATES
In 2012, preparation duplicates of coarse crush material of every 20th samples were
analyzed.
Figure 12.30 shows a plot of original sample values versus values of the preparation
duplicates for nickel as analyzed by ICP. The correlation coefficient is 0.92 excluding 8
outliers (of a total of 278 duplicates), and the failure rate is 2.3%.
duplicates for the Davis tube magnetic fraction. A total of 276 duplicates were analyzed.
The correlation coefficient is 0.97.
duplicates for nickel as analyzed by XRF. A total of 253 duplicates were analyzed. The
correlation coefficient is 0.99.
duplicates for the DTR nickel. A total of 253 duplicates were analyzed. The correlation
coefficient is 0.96.
The preparation duplicates are acceptable.
12.3.5 2012 PULP DUPLICATES

In 2012, pulp duplicates were analyzed for every 20th sample.
Figure 12.34 shows a plot of original sample values versus values of the pulp duplicates
for nickel as analyzed by ICP. The correlation coefficient is 0.93 excluding 6 outliers (of a
total of 278 samples), and the failure rate is 2.2%.
for the Davis tube magnetic fraction. A total of 276 duplicates were analyzed. The
correlation coefficient is 0.99.
for nickel as analyzed by XRF. A total of 253 duplicates were analyzed. The correlation
coefficient is 0.99.
for the DTR nickel. A total of 251 duplicates were analyzed. The correlation coefficient is
0.98.
The pulp duplicates are acceptable.

Figure 12.30 Preparation Duplicates for Nickel Analyzed by ICP

Figure 12.31 Preparation Duplicates for the Magnetic Fraction (Davis Tube Concentrate)

Figure 12.32 Preparation Duplicates for Nickel as Analyzed by XRF

Figure 12.33 Preparation Duplicates for DTR Nickel

Figure 12.34 Pulp Duplicates for ICP

Figure 12.35 Pulp Duplicates for the Magnetic Fraction (Davis Tube Concentrate)

Figure 12.36 Pulp Duplicates for XRF Nickel

Figure 12.37 Pulp Duplicates for DTR Nickel

12.3.6 2012 CHECK ASSAYS
Coarse crush material of 222 samples was sent to AGAT Laboratories Ltd. (AGAT) to test
the accuracy of the assay results provided by Actlabs. AGAT is an ISO/IEC 17025:2005
accredited laboratory for specific tests including determination of major element oxides
using lithium-metaborate fusion and ICP analysis.
AGAT used the same Davis tube parameters that Actlabs used when analyzing the
original samples. The comparison of the results of the original samples analyzed by
Actlabs and the check assay results analyzed by AGAT for DTR nickel is shown in Figure
12.38. DTR nickel was calculated for 213 samples (the remaining samples had
insufficient magnetic material for nickel analysis). The correlation coefficient is 0.87
excluding 21 outliers, which results in a failure rate of 10.0%.
The check assay results are acceptable.
The data are adequate for the purpose of this PEA report.

Figure 12.38 Scatter Plot of DTR Nickel Analysis by Actlabs and Check Assay Results by
AGAT

12.4 EARTHPROBE SURVEY QUALITY CONTROL
Several quality assurance/quality control (QA/QC) criteria were applied during the
EarthProbe survey to assess the quality of the data. Acceptable thresholds for the survey
were established by the operator based on industry accepted practices and site specific
conditions. The QA/QC criteria used for this survey are summarized in Table 12.2. Data
that did not meet these criteria were discarded at the time of collection.
At the end of each survey day, the full waveform data were dumped from the field
computer to a laptop. The data were then emailed to Caracle Creek’s Toronto office, and
subsequently processed and loaded into TQIPDB
(http://www.scicomap.com/TQIPdb.htm) for waveform quality assessment and removal
of noisy data points, which was determined at the data processor’s discretion based on
factors including smoothness of the decay curve and consistency with the adjacent data.
The data are adequate for the purpose of this technical report.
Table 12.2 Infield QA/QC Data Verification Criteria

Survey Acceptable
Component QA/QC Measure Threshold
Waveform Current and voltage waveform must be a castle shape and 0.9
the correlation of the current and voltage time series must
be above a defined threshold
Injection current Injected current must be within a defined range Above 1 mA
Measured voltage Measured voltage must be within a defined range 5 – 10,000 mV
Stacked voltages Standard deviation of stacked voltage data must be below 5%
a defined threshold
Self-potential System self-potential must be below a defined threshold 100 mV
12.5 ROCK PROPERTY SURVEY QUALITY CONTROL
12.5.1 PRE-MOBILIZATION QUALITY CONTROL

DGI established a baseline for all probes at the Geological Survey of Canada Bells
Corners Calibration Facility, where repeated data acquisition in a well-understood
borehole has allowed DGI to develop a calibration dataset.
Prior to the start of the field work, all probes were bench tested at DGI’s operations
centre in Barry, ON. In addition, DGI has their own calibration borehole near Levack, ON,
where all probes were calibrated. The Levack borehole is well-characterized
geophysically and by drill core and laboratory analysis.

12.5.2 ON-SITE QC
When DGI arrived on site, standard operating procedures were defined based on the
conditions at Decar, including:
 on-site calibrations to correct for regional variance and/or borehole size

 bench tests to ensure probes meet the baseline values
 calibration checks, recorded before and after each survey.
Drillhole 11BAP001 was established as a local calibration hole. This hole was also used
to provide information on the hole competency based on the number of days it remained
open and accessible. This hole was dummied on July 9, 2011 and again on July 30,
2011. The hole was accessible during both tests. Hole 11BAP001 was surveyed again
on September 18, 2011. The hole was still open 73 days after the drilling date.
In August 2012, drillhole 11BAP008 was logged for further quality control and the data
were compared with the 2011 data of the same drillhole. The results indicated that the
2012 data were precise and consistent with previous surveys. Caracle Creek concludes,
based on the quality control information presented here, that the data are adequate for
the purpose of this technical report.
12.6 LIDAR SURVEY QUALITY CONTROL

Calibration flights were conducted at the Burns Lake regional airport. These flights were
performed immediately after the completion of the project acquisition and consisted of
two opposing flight lines along the runway and two perpendicular flight lines in relation to
the runway. The pattern allowed Terra Remote to calibrate the system and solve for roll,
pitch, and heading and validate the system accuracy.
Four ground control points in the project area and one ground control point in the
calibration area were collected by Terra Remote’s ground survey team using a Bell 206B
helicopter stationed at the Decar camp. The points were in an area that was free of
obstruction above the elevation mask and of features that could contribute errors
associated with multipath; the areas were also on a hard surface, so that LiDAR-derived
elevations could be checked for accuracy. The points used concurrent observations from
BC Active Control Station located in Prince George, BC (Table 12.3).
Table 12.3 Results of the LiDAR Quality Control Using Ground Check Points
Known Laser Difference
Easting Northing Elevation Elevation (Know Laser
Station Name (m) (m) (m) (m) Elevation)
1011 340921.595 6086219.704 1,778.568 1,778.650 0.082
4009(2) 355703.735 6091410.097 729.924 729.740 -0.184
BASE 349289.383 6079744.162 1,029.428 1,029.320 -0.108
4009 348955.800 6083221.358 992.189 991.880 -0.309

13.0 MINERAL PROCESSING AND
METALLURGICAL TESTING
Cliffs and First Point engaged SGS and the KRTC to perform the scoping test work. The
objective of this test work was to determine the major mineralization characteristics and
the metallurgical response of the Decar “awaruite” deposit.
These tests were conducted to determine the major species present in the
mineralization, and their abundance, as well as the association and liberation
characteristics of the specific species awaruite. Further tests were conducted on the
mineralization to determine the response of magnetic and gravity separation techniques
to different grind sizes. The KRTC conducted early gravity beneficiation tests, which were
later confirmed by SGS during a bench-scale process simulation. SGS was also
responsible for determining the mineralogical characteristics of the Decar samples.
Below is a summary of the results from these test programs.
13.1 KNELSON RESEARCH AND TECHNOLOGY CENTRE METALLURGICAL TEST

REPORT – JUNE 25, 2010
The KRTC was commissioned to perform Gravity Amenability Tests (GATs) on 20 kg of
sample taken from the Sidney area of the deposit (sample ID: 08RMB241). The sample
was collected from a rocky outcrop. Although exposed samples have their limitations,
this particular outcrop was believed to be representative of the below ground
mineralization. The sample did not appear to be bleached or weathered, and the
mineralized rock itself does not contain significant amounts of sulphide minerals which
may weather more severely; a rusty stain would be expected if oxidized sulphide minerals
were present, but no stain was noted. While weathering may have an effect on crushing
and grinding tests, it may have a minimal effect on magnetic separation tests, and
limited effect on gravity separation tests. Finally, the disseminated, coarse-grained
awaruite observed in holes 9 and 10 of the 2010 drilling campaign suggested that the
surface sample is representative of the below ground mineralization.
The June 25, 2010 KRTC metallurgical test procedure was conducted on two different
particle sizes. The results for the material ground to 270 µm are presented in Table
13.1. Most of the recovery occurs in the first stage of the Knelson concentration where
the total nickel recovery and grade are 36.3% and 2.91% respectively. When the sample
is ground to a P80 of 89 µm, the recovery and grade of total nickel become 43.8% and
3.26% in the first stage; see Table 13.2. Finer grinding has resulted in improved total
nickel recovery and grade. This point is emphasized in Figure 13.1.
The concentrates from each stage of the lab-scale Knelson concentrator were separated
into coarse and fine particles, and were further upgraded on a “V” profile or a flat profile
Mozley table respectively. The “V” profile Mozley table was used for particles between
2 mm and 100 µm, while the flat profile Mozley table is used for particle sizes less than
100 µm. The Mozely concentrates, middlings, and tailings for the coarse and fine
fractions were combined and assayed for total nickel grade. The Mozely tables were able
to upgrade the first stage Knelson concentrate to 9.98% total nickel and 11.86% total
nickel from 2.91% total nickel and 3.26% total nickel for 270 µm and 89 µm grind sizes
respectively.
The results of the GAT indicate total nickel is likely recoverable by gravity separation.
However, adding additional stages of Knelson concentration does not produce significant
improvements in total nickel grade or recovery. These tests further indicate that finer
grinding results in improved recovery and grade of total nickel.
Table 13.1 GAT Total Nickel Recovery and Grade for P80 = 270 µm
Mass Total Nickel
Assay Distribution Stage Upgrade Ratio
(g) (%) (%) (%) (Concentrate: Head)
Concentrate 1 74.8 3.1 2.91 36.3 11.5
Concentrate 2 70.7 3.0 0.46 5.4 1.8
Concentrate 3 69.5 2.9 0.31 3.6 1.2
Concentrate 4 69.0 2.9 0.47 5.4 1.9
Concentrate 5 66.9 2.8 0.21 2.4 0.8
Final Tails 2,023 85.2 0.14 47.0 -
Totals (Head) 2,374 100.0 0.25 100.0 -
Knelson Concentrate 351 14.8 0.91 53.0 3.6
Source: KRTC (June 2010)
Table 13.2 GAT Total Nickel Recovery and Grade for P80 = 89 µm
Mass Total Nickel
Concentrate 1 66.3 2.8 3.26 43.8 15.9
Concentrate 2 54.7 2.3 0.28 3.1 1.3
Concentrate 3 55.1 2.3 0.20 2.2 1.0
Concentrate 4 53.9 2.2 0.16 1.8 0.8
Concentrate 5 55.1 2.3 0.15 1.7 0.7
Final Tails 2,127 88.2 0.11 47.5 -
Totals (Head) 2,412 100.0 0.21 100.0 -

Figure 13.1 Cumulative GAT Recovery versus Concentrate Mass Yield for Total Nickel
13.2 KRTC METALLURGICAL TEST REPORT – AUGUST 6, 2010

The August 6, 2010 KRTC test work was conducted on 20 kg of material originally taken
from a surface location in the Sidney zone of the Project (sample ID: 08RMB241). This
material was concentrated using a Sala CN magnetic concentrator at the Cliffs laboratory
in Ishpeming, Michigan. Three passes of magnetic concentration were used to upgrade
the total nickel grade from 0.252 to 1.534%. The first pass of magnetic concentration
was conducted on material with a P80 of 652 µm. The concentrate from this stage was
then reground to 60 µm. Due to mechanical difficulties with the separator, a small
quantity of magnetically recoverable material was lost. However, this may not have
affected the stage-wise recovery of awaruite by gravity separation. Approximately 1 kg of
this reground material was sent to the KRTC for GAT. The magnetic concentrate was
made from a sample that was representative of the mineralization, and is believed to be
representative of a typical magnetic concentrate.
The recovery and grade for each of the five stages of Knelson concentration are
presented in Table 13.3. The maximum total nickel grade of 12.3% occurs with 79.2%
total nickel recovery after only one stage of Knelson concentration. A total nickel grade
of 3.26% with a recovery of 43.8% was observed after one stage of Knelson
concentration during the June 25, 2010, KRTC test work, on material ground to P80
89 µm. Supplying the Knelson concentrator with magnetically concentrated feed seemed
to result in significantly improved total nickel recovery. The plot of cumulative total nickel
recovery versus concentrate mass yield illustrates that only a marginal improvement in
total nickel recovery was gained with additional stages of Knelson concentration; see
Figure 13.2.

Table 13.3 Total Nickel Recovery and Grade for August 6, 2010 KRTC Test Work
Mass Total Nickel
Concentrate 1 98.2 9.3 12.30 79.2 8.79
Concentrate 2 75.9 7.2 0.68 3.4 0.49
Concentrate 3 74.0 7.0 0.44 2.1 0.31
Concentrate 4 63.2 6.0 0.31 1.3 0.22
Concentrate 5 71.8 6.8 0.35 1.6 0.25
Final Tails 674 63.8 0.28 12.4 -
Totals (Head) 1,057 100.0 1.40 100.0 -
Source: KRTC (August 2010)
The concentrates from each stage of the laboratory-scale Knelson concentrator were
separated into coarse and fine particles, and were further upgraded on a ‘V’ or flat profile
Mozely table respectively. The ‘V’ profile Mozley table was used for particles between
2 mm and 100 µm, while the flat profile Mozley table was used for particles with a
diameter less than 100 µm. The Mozley concentrates, middlings, and tailings for the
coarse and fine fraction were combined and assayed for total nickel grade. The Mozley
tables were able to upgrade the first stage Knelson concentrate to 27.2% total nickel
from 12.3% total nickel.
The results of this GAT seemed to indicate significantly improved total nickel grades and
recovery when the feed to the Knelson concentrator has been magnetically concentrated.
Most of the total nickel was recovered in the first stage of Knelson concentration, and as
a result, there is limited benefit to additional stages of upgrading.
Figure 13.2 Cumulative Recovery versus Concentrate Mass Yield for Decar 3 Pass Sala CN
Sample
Source: KRTC (August 2010)

13.3 SGS – MINERALOGICAL CHARACTERIZATION – JUNE 2011
This program was conducted by SGS in Lakefield, Ontario, using material collected during
the 2010 drilling campaign. One master composite and five variability composites were
created using this material. A brief summary of the head assays of the drill cores
collected during the 2010 campaign are presented in Table 13.4. The master composite
and variability samples were given the following names:
 2010 Master Composite

 2010 Baptiste 3
 2010 Sidney 10
 2010 Grain Size A
 2010 Grain Size B
 2010 Grain Size C.
Each sample weighed approximately 200 kg. The nature and selection criteria of each
sample are discussed below. The drillholes from which this material was obtained are
plotted in Figure 13.3.
Figure 13.3 Drillhole Collar and Projected Hole Traced for Material used in Scoping
Mineralogy and Metallurgy Tests
Source: 2010 Year End Exploration Report Geophysical and Geology Surveys and Drilling on the Decar
Property, BC (February 14, 2011)

Table 13.4 Summary of Material Used in Composite Samples
Total
Hole From To Distance Nickel Co Fe Cr
Target No. (m) (m) (m) (ppm) (ppm) (%) (ppm)
Baptiste 1 3.1 321.5 318.5 2,218 102 5.8 1,210
Baptiste 2 6.5 305.5 299.0 2,214 106 5.4 1,097
Baptiste 3 47.2 336.0 288.8 2,293 108 5.7 1,301
Baptiste 4 33.8 93.0 59.2 2,246 107 5.6 1,296
Baptiste 5 14.3 236.0 221.8 2,366 105 5.5 1,376
Baptiste 6 12.2 340.5 328.3 2,390 105 5.5 1,574
Baptiste 7 3.1 71.0 68.0 2,233 104 5.3 1,244
Sidney 8 32.0 102.1 70.1 2,261 106 5.3 1,388
Sidney 9 182.8 346.0 163.2 2,360 111 5.4 1,177
Sidney 10 116.0 398.0 282.0 2,345 107 5.4 1,393
Source: First Point (February 2011)
13.3.1 2010 MASTER COMPOSITE

The 2010 Master Composite sample was selected to be representative of the mineable
material from a potential starter pit at Baptiste.
Analysis of the Master Composite using x-ray diffraction (XRD) determined that
serpentine is the major component of the mineralized rock, followed by minor amounts of
magnetite, brucite, olivine, and trace amounts of awaruite and pentlandite. The
Quantitative Evaluation of Minerals by Scanning electron microscopy (QEMSCAN ®) data
confirmed and quantified these results (see Table 13.5).
Table 13.5 Summary of QEMSCAN Modal Results

Abundance
Species (%)
Serpentine 85.3
Magnetite 5.0
Clinopyroxene 3.1
Olivine 2.9
Brucite 1.3
Awaruite 0.3
Pentlandite 0.05
Heazlewoodite 0.04
Cr-minerals Trace (<1)
Calcite Trace (<1)
Chlorite Trace (<1)
Quartz Trace (<1)
Feldspars Trace (<1)
Source: SGS (June 2011)

Electron microprobe analysis was used to determine the deportment of nickel in the
various species present in the mineralized sample. Awaruite was found to be the major
source of nickel in the sample. The distribution of nickel among the other nickel-
containing species is presented in Table 13.6.
Table 13.6 Deportment of Nickel among Nickel Containing Species

Nickel Containing Percentage of Total
Species Nickel Content
Awaruite 74.5
Heazlewoodite 10.0
Pentlandite 4.6
Serpentine 6.3
Magnetite 3.4
Olivine 0.9
Clinopyroxene 0.3
Total 100.0
QEMSCAN® was also used to determine the mineral fraction particle sizes, and the
liberation and association data. QEMSCAN® calculated the P90 value for the average
particle to be approximately 508 µm, and approximately 110 µm for awaruite.
Roughly 23% of the awaruite is present as liberated grains. Of the remainder,

approximately 34% exists locked with serpentine, approximately 30% is contained in
ternary or more complex associations (including magnetite), approximately 7% is in a
ternary association of awaruite-serpentine-magnetite, and finally, less than 1% of the
awaruite is present in binary associations with either magnetite or nickel sulphides.
Liberated awaruite particles and binary particles of awaruite and magnetite, where both
species are at least 5% of the overall particle mass may be recoverable by magnetic
means; approximately 66% of the awaruite present in the master composite sample
meets this description. However, the remainder of the awaruite is in association with
silicates, which are unlikely to be recoverable by magnetic concentration.
13.3.2 2010 BAPTISTE 3

The Baptiste sample came from the westerly portion of the Baptiste target. The westerly
portion of the Baptiste target may be the most homogeneous area of the mineralization.
The portion of this variability sample that is expected to be magnetically recoverable is
presented in Table 13.7.
13.3.3 2010 SIDNEY 10

The Sidney sample came from a hole starting at the northeast margin of the mapped
deposit and drilling towards the interpreted centre of mineralization. This drillhole
contained the largest awaruite grains encountered during the 2010 drilling campaign.

The portion of this variability sample that is expected to be magnetically recoverable is
presented in Table 13.7.
13.3.4 GRAIN SIZE A, B, C

These samples were created from drill core segments selected from the core drilled in
the 2010 campaign. The core segments were sorted based on a visual estimate of grain
size. A reference card purchased from Petrocraft Products Ltd was used to estimate the
awaruite particle size. Table 13.8 presents the range of grain sizes included in each
composite sample, while Table 13.9 presents the grain sizes in SI units. The portion of
these variability samples that are expected to be magnetically recoverable is presented in
Table 13.7.
Table 13.7 Magnetically Recoverable Associations of Awaruite

Liberated Liberated Awaruite and
Awaruite+Magnetite* Magnetically Recoverable
(Magnetically Recoverable) Particles
Sample (%) (%)
2010 Grain Size A 33.1 69.4
2010 Grain Size B 60.6 77.6
2010 Grain Size C 35.7 58.2
2010 Sidney 10 54.9 65.2
2010 Baptiste 3 25.5 65.7
Note: *Testwork suggests that particles where at least 5% of the overall particle mass is magnetite or
awaruite may be magnetically recoverable.
Table 13.8 Grain Sizes included in Grain Size Composite

Range of
Grain Grain Size
Size Included in
Composite Composite
A 3 to 5
B 1 to 5
C 1 to 3

Table 13.9 Discussion of Grain Size in SI Units
Awaruite
Grain Diameter
Size (µm) Comments
1 Less than <50 µm Pin head, requires a hand lens to be visible
2 50 µm to 100 µm Few visible grains, easy to see with a hand lens
3 100 µm to 200 µm Visible to naked eye in sunlight
4 200 µm to 300 µm Visible to naked eye in sunlight
5 300 µm to more than >400 µm Visible to naked eye in sunlight
13.4 SGS – BENCH-SCALE INVESTIGATION – FEBRUARY 2012

This bench scale test program was conducted by SGS in Lakefield, Ontario, using
material collected during the 2010 drilling campaign. The 2010 Baptiste, 2010 Master
Composite, 2010 Grain Size A, 2010 Grain Size B, and 2010 Grain Size C were combined
in an appropriate ratio to generate 50 kg of feed for this test program with the head
grade specified in Table 13.10. These were the same samples used in the SGS
Mineralogical Characterization program. The 2010 Sidney sample was excluded from the
general composite because the general composite was intended to be a sample of the
Baptiste target.
This program was conducted to determine the optimum grind sizes for rougher and/or
cleaner magnetic concentration and cleaner or re-cleaner gravity concentration. The
magnetic separation tests were carried out using Davis tubes.
The total nickel recovery in a rougher magnetic separation was evaluated at a variety of
grind sizes ranging from a P80 of 150 µm to 600 µm. This test demonstrated the overall
recovery of total nickel and magnetite is not greatly affected by grind size between
150 µm and 600 µm. In this range, the average recovery of total nickel and magnetite is
62% and 79% respectively. Since the recovery of total nickel and total iron is not
significantly affected by finer grinding, 10 kg of material was ground to approximately
600 µm to provide feed for the cleaning and re-cleaning tests. This sample was labelled
the MS-1 sample.
Some of the magnetically roughed material (the material from MS-1) was re-ground to
between 23 µm and 114 µm in order to determine the performance of cleaner gravity
separation. The total nickel recovery and grade for gravity cleaned sample ranged from
47.8 to 65.1% and 14.1 to 21.4% respectively. Some tests produced a product in excess
of the target grade of 13.5% total nickel. To ease comparison between grind sizes, the
overall DTR nickel recovery was interpolated for a 13.5% product; see Table 13.11. The
highest overall DTR nickel recovery of 85.3% occurred with a regrind size of 46 µm;
however, the additional recovery of the 46 µm regrind size does not justify additional
grinding. As a result, the final regrind size was specified as 70 µm, which has an overall
DTR nickel recovery of 84.7%. For financial purposes, the overall DTR nickel recovery
was reduced to 82%. The process will be assumed to match the results of the SP-1 test;

however, the equipment will be sized to handle DTR nickel recovery in the range of 75 to
85%. A simplified process flow diagram is presented in Figure 13.4.
Total nickel refers to all of the elemental nickel in a sample, regardless of its source. DTR
nickel refers to all of the nickel recovered by a Davis tube after being ground to P95
74 µm. DTR nickel is a fraction of the total nickel in the sample, but most of the DTR
nickel is recovered by magnetic means. As a result, the overall DTR nickel recovery is
greater than the overall total nickel recovery.

Table 13.10 General Composite Head Grade
Ni Sulphide
Ni as Ni SiO2 Al2O3 Fe2O3 MgO CaO Na2O K2O TiO2 P2O5 MnO Cr2O3 V2O5 LOI Sum
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Overall 0.25 0.029 38.7 1.14 8.28 38.6 0.84 0.03 <0.01 0.01 <0.01 0.11 0.4 <0.01 12.5 100.0
Composite
Source: SGS (February 2012)
Table 13.11 Calculated Overall Nickel Recoveries when Producing a 13.5% Total Nickel Concentrate
Rougher
Magnetic Cleaner Gravity Overall Overall
Total Magnetic Recovery Total DTR
Nickel Total Nickel Total Nickel to Nickel Nickel
Flow Sheet Grind P80 Recovery Recovery 13.5% Nickel Recovery Recovery
Test No. Description (µm) (%) (%) (%) (%) (%)
SP-8 Two Piece Concentration (see Figure 13.4) 114 61.4 - 49.5 30.4 60.8
SP-7 Two Piece Concentration (Figure 13.4) 90 61.4 - 48.5 29.8 59.5
SP-3 Two Piece Concentration (See Figure 13.4) 23 61.4 - 63.5 39.0 77.9

Figure 13.4 Simplified Process Flow Diagram

14.0 MINERAL RESOURCE ESTIMATE
14.1 INTRODUCTION
Caracle Creek completed a mineral resource estimate update for the Property following
completion of the 2012 drilling program and analyses. This mineral resource update
supersedes the previous resource completed by Caracle Creek dated March 29, 2012
(Ronacher et al. 2012).
The mineral resource reported herein is based on drilling information as of December 2,

2012. All of the drill hole data, including collars, assays, survey and lithology, were
compiled into a database which links directly to the geological modelling and resource
estimation software. The mineral resource estimation was evaluated using geostatistical
block modeling methods constrained by a mineralized wireframe. Gemcom’s GEMS ™
resource modelling software version 6.3 was used to generate the block model and
perform the grade estimation. Grades for DTR nickel were estimated using the OK
method of interpolation. The mineral resources have been estimated in conformity with
the CIM “Mineral Resource and Mineral Reserves Estimation Best Practices” guidelines
and were classified according to the CIM Standard Definition for Mineral Resources and
Mineral Reserves (November 2010) guidelines. The mineral resources are reported in
accordance with the Canadian Securities Administrators NI 43-101.
Independent, NI 43-101 compliant resources at the Property were estimated by Jason

Baker P.Eng., a Geological Engineer with Caracle Creek. QA/QC was completed by
Caracle Creek on the assays prior to incorporation in the 3D model (Section 12.0).
Because of his education, project experience and affiliation to a recognized professional
association, Mr. Baker is a QP independent of Cliffs in accordance with NI 43-101
guidelines. Mineral resources were calculated for the Project by the methods described
above. The Mineral Resource Statement reported for the Project is presented in Table
14.1 using a 0.06 DTR Ni% cut-off grade.
1
Table 14.1 Mineral Resource Statement
Grade Contained
Indicated 1,159,510,000 0.124 1,437,800
Inferred 870,400,000 0.125 1,088,000
Source: Caracle Creek, January 23, 2013
Note: 1Reported at a cut-off grade of 0.06 DTR Ni%. Mineral resources are not mineral reserves and do
not have demonstrated economic viability.
2Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant
digits.

This report summarizes the methodology, data and validation techniques used by Caracle
Creek in estimating the mineral resources for the Project.
14.2 RESOURCE ESTIMATION METHODOLOGY
14.2.1 RESOURCE DATABASE, PREPARATION & COMPOSITING

In 2010, First Point conducted a drill program which includes seven drillholes in the
current deposit area. In 2011 Caracle Creek, on behalf of Cliffs, conducted a 35-hole
drill program. In 2012 Caracle Creek, on behalf of Cliffs, conducted a 34-hole drill
program (see Table 14.2).
Table 14.2 Data Used in Estimating the Mineral Resources at Decar

Drill No. of No. of
Program Holes Samples
Phase 1 (2010) 7 (1,711 m) 307
Phase 2 (2011) 35 (10,859 m) 3,429
Phase 3 (2012) 32 (16,347 m) 4,116
Total 74 (28,917 m) 7,852
Figure 14.1 Drillhole Distribution with the Mineralized Domain
The data results of each drill program were compiled by Caracle Creek and imported into
Gemcom GEMS™ including, collars, survey, and assay data. The drill core from the 2010
program was logged by First Point personnel. Caracle Creek logged all core from the
2011 and 2012 drill programs and compiled the lithology data for importation into

Gemcom GEMS™. The lithology data of the 2010 drill program was also imported into
Gemcom GEMS™ by Caracle Creek.
The following section describes how the mineralized domains were used to constrain the
resource estimation as well as how compositing and outliers were dealt with in this
project. The results of the specific gravity analysis are also discussed.
GEOLOGICAL MODELLING AND MINERALIZED DOMAINS

Geological modelling was performed by Caracle Creek using the raw drillhole data,
drillcore logs and downhole survey data in conjunction with regional and local geology
maps. Additional downhole survey data, including lithology contacts and orientations,
were provided by DGI. There are several dyke systems that crosscut the mineralized
domain. The dykes are un-mineralized resulting in zero grade assay values where dykes
are present. A geological domain was created for the dykes using the drill logs. The drill
logs were then correlated to the DGI downhole survey data, and all dykes identified in the
drill logs showed strong evidence of having an orientation of dipping 60 to 80°
southwest. The mineralized domain consists entirely of peridotite and serpentinized
peridotite. The zones of serpentinized rock were included in the mineralized domain.
The dyke domain was subtracted from the mineralized domain in order to eliminate the
zero-grade assays from the mineralized domain (Figure 14.1 and Figure 14.2).
Figure 14.2 Plan View of the Geology Model and the Mineralized Domain
Figure 14.2 and Figure 14.3 show the interpreted faults, dyke domains and the
mineralized domain used to constrain the resource estimation. The mineralized domain
was defined using the 74 drillholes from the 2010, 2011 and 2012 drill programs. The
drillholes were drilled in a sectional pattern with a drill hole spacing of approximately
200 m between sections and along section (Figure 14.1). The mineralized domain was
projected 100 m (½drillhole spacing) beyond the last drillhole, on all sides of the
mineralized domain. Due to the low variability of the DTR nickel grade, and the potential
for bulk open pit mining, an internal grade cut-off was not used when constructing the
mineralized domain. The boundaries of the mineralized domain were determined using a
grade cut-off of 0.05 DTR Ni%. The topography surface was created using LiDAR data
obtained in September 2012. The LiDAR elevation data were compared to the drillhole
collar elevation data and a discrepancy of approximately 5 to 10 m was discovered
between the two. Therefore, Caracle Creek adjusted the LiDAR elevation data by 10 m to
ensure that all 74 drillhole collars were at, or slightly below, the LiDAR surface.
Figure 14.3 3D View of the Geology Model and the Mineralized Domain (Looking
Northwest)
14.2.2 DATA ANALYSIS AND COMPOSITING

All the raw assays within the mineralized domain were extracted from the database for
statistical analysis. This included a total of 5303 assay intervals, of which approximately
5,283 (99%) had an assay interval length of 4 m (Figure 14.4 and Figure 14.5). The
remaining 20 assays intervals were of varying lengths between 4.1 and 9.73 m. The
2010 samples were taken over 1 m in every 5 m. The 2011 assays were taken over 1 m
in every 4 m, resulting in 3 m of un-sampled assay interval between assays. The un-
sampled 3 m intervals from 11 of the 2011 drillholes were sampled in 2012, during the
Phase 3 drill program. Core from the 2012 Phase 3 program was sampled continuously
in 4 m intervals. Considering the large scale of the deposit, the very high percentage of
assay lengths at or below 4 m (99%), and the planned vertical block height of 10 m, it
was determined that compositing the data to 4 m intervals was appropriate. The

estimation parameters set for the mineral resources were allowed to interpolate through
the un-sampled intervals. Zero grades were not assigned.

Figure 14.4 Histogram Plot Showing the Distribution of Assay Lengths

Figure 14.5 Probability Plot Showing the Distribution of Assay Lengths

Basic assay statistics were calculated for all raw assays within the mineralized domain
(Table 14.3 and Figure 14.6).
Table 14.3 Summary of Raw Assay Data Statistics for all Samples Within the Mineralized
Domain
Sample Data Quantity
Number of Samples 5,303
Minimum Value (DTR Ni%) 0.00
Maximum Value (DTR Ni%) 0.271
Mean (DTR Ni%) 0.124
50th Percentile (Median) (DTR Ni%) 0.130
95th Percentile (DTR Ni%) 0.173
Variance (DTR Ni%) 0.0015
Standard Deviation (DTR Ni%) 0.039
Coefficient of Variation 0.32
GRADE CAPPING
Caracle Creek performed a capping analysis on the raw assay data using histogram plots
and probability plots. Sensitivity of mean grade to change in capping value was also
analyzed (Table 14.4). Figure 14.7 shows the histogram plot for the raw DTR Ni% assay
data, including all outliers.
Table 14.4 Sensitivity of Mean DTR Ni% with Change in Capping Value
0.21% 0.23%
Sample Data Uncapped DTR Ni Cap DTR Ni Cap
Number of Samples 5,652 5,652 5,652
Minimum Value (DTR Ni%) 0.00 0.00 0.00
Maximum Value (DTR Ni%) 0.271 0.21 0.23
Mean (DTR Ni%) 0.1240 0.1240 0.1240
50th Percentile (Median) (DTR Ni%) 0.1300 0.1300 0.1300

Figure 14.6 DTR Ni% Cumulative Frequency Plot

Figure 14.7 Histogram Showing DTR Ni% Grade Distribution

As a result of the capping analysis Caracle concluded that capping the data was not
required for the following reasons:
 The grade range of DTR Ni% values was small with respect to the mean and
median, i.e. the median of the data set (0.124 DTR Ni%) was slightly less than
half of the maximum value (0.271 DTR Ni%).
 It can be demonstrated through sensitivity analysis that capping the data does
not have any effect on the mean of the data set (see Table 14.4).
Therefore, Caracle Creek used the un-capped 4 m composited data to perform the grade
estimation.
SPECIFIC GRAVITY
A total of 1131 SG analyses were available within the mineralized domain. Blocks in the
block model were interpolated for SG using the inverse distance method of interpolation
at 100% of the variogram range using all available SG samples. Any blocks not
populated within the first pass were assigned a SG value of 2.68. The tonnage for each
block was calculated as follows:
Block volume (40 m x 40 m x 10 m) x (SG) x (the proportion of the block within the solid)
14.2.3 VARIOGRAPHY
Caracle Creek evaluated the spatial distribution of DTR nickel using variograms. The raw
assay data were viewed in 3D as a starting point to help determine DTR nickel continuity
directions. An omnidirectional variogram was created to assist in determining the range
of correlation within the mineralized domain. The variogram analysis considered
sensitivities with orientations of the major, semi-major, and minor axis of the variogram.
The variogram analysis was performed using Gemcom GEMS™ software version 6.3.
Figure 14.8 shows the 3D variogram calculated for DTR nickel within the mineralized
domain in the direction of the major axis. Figure 14.9 shows the 3D variogram calculated
for DTR nickel within the mineralized domain in the direction of the semi-major axis.
Figure 14.10 shows the 3D variogram calculated for DTR Ni within the mineralized
domain in the direction of the minor axis.

Figure 14.8 Variogram for DTR Nickel in the Mineralized Domain in the Major Direction
Note: The dotted black line represents the variogram, the smooth red line represents the fitted model. Gamma (h) is the variance.

Figure 14.9 Variogram for DTR Nickel in the Mineralized Domain in the Semi-major Direction

Figure 14.10 Variogram for DTR Nickel in the Mineralized Domain in the Minor Direction

14.2.4 BLOCK MODEL
The block model definitions for Decar are shown in Table 14.5. Partial percents were
used as part of the volume estimation. The block volumes were adjusted using the
partial percents based on the proportion of the block that was inside the wire framed
solids representing the mineralization. The block model origin coordinates are
represented by the maximum “X”, maximum “Y” and minimum “Z”. Positive rotation is
clockwise about any axis. Based on the anticipated mining methods, the size of the
mineralized domain and the drillhole spacing, Caracle Creek chose a block size of 40 m x
40 m x 10 m. The model was rotated 60° counter-clockwise from north.
Table 14.5 Block Model Definitions for Decar

Y X Z
(m) (m) (m)
Origin Coordinates (m) 6081919 349435 1840
Block Size 40 40 10
Rotation 0 -60 0
Number Of Blocks 40 70 160
GRADE ESTIMATION STRATEGY

Grade estimation was based on OK using two passes. The first pass was the most
restrictive in terms of search radius, the minimum/maximum number of samples
required as well as the minimum number of holes required. The second pass was less
restrictive under the same terms. The first pass populated approximately 40% of the
blocks, with the rest of the blocks within the mineralized domain being populated by the
second pass. The search ellipse radius and orientation were chosen to reflect variogram
range and orientation. Table 14.6 summarizes the parameters used in the grade
estimation. Figure 14.11 shows a 3D representation of the block model colour coded by
nickel grade.
Table 14.6 Parameters Used in the Grade Definition

Pass 1 Pass 2
Method of Interpolation OK OK
Search Radius 50% of Variogram Range 100% of Variogram Range
Search Type Octant Ellipsoidal
Minimum Number of Samples 15 5
Maximum Number of Samples 40 40
Minimum Number of Holes 2 1
Maximum Number of Samples per Hole 15 15

Figure 14.11 3D View Showing the Block Model
14.2.5 RESOURCE MODEL VALIDATION

The validity of the block model was evaluated using four techniques.
 Caracle Creek constructed a parallel estimation model for DTR Ni% using an
inverse distance method of estimation (power of two). The results were within
5% deviation in total tonnes and DTR nickel grade to that of the original model.
 Statistical comparisons were made between the interpolated blocks from both
the OK and inverse distance models and the raw assay data (Table 14.7).
 The reported total block model tonnage and grade were also compared to a
sectional volume method of estimation, which does not involve block modelling.
A weighted average of all DTR nickel assays within the mineralized domain was
calculated along with the volume of the mineralized domain. The results were
within 5% to that of the original block grade estimation.
 The interpolated block grades were visually checked on section and level plans
and compared to the raw assay data.
Table 14.7 Block Model versus Raw Assay Data (DTR Ni%) Statistical Analysis
Raw Assay 4m Composite OK ID2
Statistic Data Data Interpolation1 Interpolation2
Mean 0.124 0.124 0.120 0.122
Median 0.130 0.130 0.123 0.126
Variance 0.0015 0.0014 0.0007 0.001
Max grade 0.271 0.271 0.184 0.186
Note: ID2 = inverse distance squared

14.2.6 MINERAL RESOURCE CLASSIFICATION
Based on the study reported herein, delineated mineralization at Decar is classified in
part as mineral resource according to the following NI 43-101 definitions:
In this Instrument, the terms “mineral resource”, “inferred mineral resource”,

“indicated mineral resource” and “measured mineral resource” have the
meanings ascribed to those terms by the Canadian Institute of Mining,
Metallurgy and Petroleum, as the CIM Standards on Mineral Resources and
Reserves Definitions and Guidelines adopted by CIM Council […]” on November
27, 2010:
“A Mineral Resource is a concentration or occurrence of diamonds, natural solid,

inorganic material, or natural solid fossilized organic material including base and
precious metals, coal, and industrial mineral in or on the Earth’s crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a Mineral Resource are known, estimated or
interpreted from specific geological evidence and knowledge.”
Mineral resources are not mineral reserves as economic viability of the property has not
yet been shown. The terms Measured, Indicated and Inferred are defined in NI 43-101
as follows:
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which

quantity, grade or quality, densities, shape, physical characteristics are so well
established that they can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters, to support
production planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely enough
to confirm both geological and grade continuity.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which

quantity, grade or quality, densities, shape and physical characteristics can be
estimated with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough for geological and grade continuity
to be reasonably assumed.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which

quantity and grade or quality can be estimated on the basis of geological
evidence and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited information

and sampling gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes.
The estimated tonnages for the mineralized domain at Decar are classified as Indicated
and Inferred resources, as described in the following sections.
14.3 MINERAL RESOURCE STATEMENT

Mineral resources for Decar were classified by Mr. Jason Baker, P.Eng., an appropriate
independent QP. Classification was done in accordance with the CIM Standard Definition
for Mineral Resources and Mineral Reserves (November 2010) guidelines. The mineral
resources were constrained with a conceptual pit. The parameters used in the
conceptual pit design can be found in Table 14.8. The mineral resources for the Project
are reported at a cut-off grade of 0.06 DTR Ni%. This was chosen as a result of the
conceptual pit design where results showed a potential cut-off grade of 0.04% DTR Ni.
Caracle Creek considers a cut-off grade of 0.06% DTR nickel to be conservative. The
mineral resource statement for the Project is summarized in Table 14.9.
Table 14.8 Parameters Used in the Conceptual Pit Design

Parameter Value
Mining Cost US$3.43/t
Mining Recovery 97%
Mine Dilution 8%
Processing Cost US$4.02/t
Process Recovery 82%
Ni Price US$24,244/t
Percent of LME Realized 75%
Pit Slope Angles All 45°
1
Table 14.9 Mineral Resource Statement
Grade Contained
Indicated 1,159,510,000 0.124 1,437,800
Inferred 870,400,000 0.125 1,088,000
Source: Caracle Creek, January 23, 2013
Note: 1Reported at a cut-off grade of 0.06 DTR Ni%. Mineral resources are not mineral reserves and do
2Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant
digits.
The block model tonnage and grade were calculated at various cut-off grades in order to
demonstrate the sensitivity of the resource estimate with respect to reporting cut-off
grade. The results are shown in Table 14.10. It should be stressed to the reader that the
figures presented in Table 14.10 are not to be misconstrued as a mineral resource as

they are intended for the sole purpose of demonstrating the sensitivity of the resource
estimate with respect to reporting cut-off grade.
Table 14.10 Block Model Quantities and Grades Reported at Various Cut-off Grades
DTR Ni
Category Cut-off Tonnes1 (%)
Indicated 0.02 1,170,510,000 0.124
Indicated 0.04 1,169,130,000 0.124
Indicated 0.062 1,159,510,000 0.124
Indicated 0.08 1,121,810,000 0.126
Indicated 0.10 999,440,000 0.130
Indicated 0.12 691,870,000 0.140
Inferred 0.02 881,260,000 0.124
Inferred 0.04 877,900,000 0.124
Inferred 0.062 870,400,000 0.125
Inferred 0.08 842,610,000 0.126
Inferred 0.10 733,160,000 0.132
Inferred 0.12 503,790,000 0.141
Note: 1Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant
digits.
2The base-case mineral resource was estimated at a cut-off of 0.06 % DTR nickel.
These figures are not to be misconstrued as mineral resource as they are intended for the sole
purpose of demonstrating the sensitivity of the resource estimate with respect to reporting cut-off
grade.
Mineral resource estimates for the Project presented in this report are effective as of
January 23, 2013 (Table 14.9).
14.4 ISSUES THAT COULD AFFECT THE MINERAL RESOURCE

There are no known factors related to permitting, legal, title, taxation, socio-economic,
environmental, and marketing or political issues which could materially affect the mineral
resource at the time of reporting. The estimation parameters set for the mineral
resources were allowed to interpolate through un-sampled intervals. Zero grades were
not assigned.

15.0 MINERAL RESERVE ESTIMATE
A mineral reserve is the economically mineable part of a Measured or Indicated Mineral

Resource. A mineral reserve has not been estimated for the Project as part of this PEA.

16.0 MINING METHODS
16.1 INTRODUCTION
This section outlines the parameters and procedures used to perform the pit optimization
and mine planning work for the Project.
16.2 OVERVIEW
The deposit will be mined by Cliffs personnel using a conventional truck-and-shovel open
pit mining method, at an average rate to provide a mill feed of 40 Mt/a plus 15 Mt/a of
overburden and waste.
The open pit was designed using a two-stage approach. In the first stage, a series of
optimum pit shells were identified using the LG pit optimization method in the Gemcom
Whittle™ software program. This was carried out by Caracle Creek. The base case pit
shell, that represents the prices introduced in Table 16.1, was selected as the final pit.
In the second stage, Tetra Tech used the base case pit for mine planning in order to:
 determine the phases of mine development

 establish a production schedule
 select major equipment
 estimate the mining capital and operating costs.
The ultimate pit design generated the key results shown in Table 16.1.
Table 16.1 Ultimate Pit Design Results Including Dilution

Description Unit Value
In Pit Indicated Resource Mt 730.3
In Pit Indicated Grade % 0.119
In Pit Inferred Resource Mt 195.0
In Pit Inferred Grade % 0.114
Waste Material Mined Mt 86.21
Overburden Material Mined Mt 70.80
table continues…

Description Unit Value
Strip Ratio t waste + overburden: 0.17
t mineralized material
Milling Rate Mt/a 40
Mine Life years 24
The ultimate pit design for the selected base case pit contains a combined Indicated and
Inferred Resource of 925.27 Mt diluted at an average diluted grade of 0.118% nickel.
Tetra Tech assumed an overall mining recovery of 97% and a waste rock dilution of 8%.
It is proposed that the operation will be carried out with an equipment fleet comprising:
 three, 251 mm diameter rotary blasthole drill rigs for mineralized material and
waste
 three, 27 m3 (bucket capacity) hydraulic face shovels
 a fleet of seventeen, 226 t haul trucks.
These will be supplemented with support equipment including:
 loader
 grader
 dozers
 backhoe excavator, etc.
16.3 PIT OPTIMIZATION
16.3.1 PIT OPTIMIZATION PROCEDURE

The pit optimization was carried out by Caracle Creek using the LG algorithm in the
Gemcom Whittle™ software program.
Pit optimization was performed to determine the economic pit limits and evaluate the
mineralized material contained within the pit at the highest PV. A 3D geological block
model and other required economical and operational variables were used as input
parameters of the LG algorithm. These variables include overall pit slope angle, mining
cost, milling cost, metal prices, selling costs, and other parameters as shown in the Table
16.1.
The LG algorithm progressively identifies economic blocks when resource mining and
waste stripping, taking into account a specified pit slope angle. The resulting pit outline
identifies all the blocks that may be economically mined within the open pit shell.

Caracle Creek conducted the following design steps during the pit optimization stage for
the mineralization zone:
 both Indicated and Inferred Resources were used

 various pit optimization scenarios were conducted to determine the optimal
open pit based on highest PV
 final optimizations were selected based on a mill throughput of 40 Mt/a at an
approximate 82% processing recovery
 preliminary production schedules were evaluated based on best, worst, and
specified cases
 operational parameters were applied to the production schedule
 an optimized (base case) pit shell was selected that represents the highest PV of
the specified case.
16.4 PIT OPTIMIZATION PARAMETERS
16.4.1 ECONOMIC AND OPERATING PARAMETERS

Caracle Creek and Cliffs jointly selected the required optimization parameters to
determine the most economic open pit profile. Although these parameters are not
necessarily final, a reasonable degree of caution was applied using the limited
information available at the time of pit optimization. The economic and operating
parameters used in the optimization are specified in Table 16.2.
™
Table 16.2 Base Case Input Parameters for Gemcom Whittle Pit Optimization
Description Unit Amount Notes
Exchange Rate US$:Cdn$ 1.00:1.00 -
Discount Rate % 10 -
Processing Throughput Mt/a 40 -
Sale Price $/t concentrated 24,244* -
Overall Slope Angle degrees 45 -
Operating Cost
Mining (Mineralized Material and Waste) $/t mined 3.42 allowance for sustaining capital
Mining (Overburden) $/t mined 2.74 allowance for sustaining capital
Processing (Mineralized Material) $/t mined 2.61 -
General and Administrative (G&A) $/t mined 1.41 -
Selling $/t concentrated 6,061 -
Recovery and Dilution
Mining Recovery % 97 -
Mining Dilution % 8 -
table continues…

Description Unit Amount Notes
Milling Recovery % 82 -
Overall Slope Angle degrees 45 -
Note: *Base case nickel price used as a starting point in the pit optimization process. Not actual price
used in the pit design.
16.4.2 GEOLOGICAL BLOCK MODEL

The block models for the Cliffs Decar nickel deposits were built by Caracle Creek using
Gemcom™ GEMS software.
16.4.3 OVERALL OPEN PIT SLOPE ANGLE

Since the required geotechnical data is not available for determining the pit slope angle
at this stage of the study, it assumed that an overall pit slope angle is 45° based on
conservative estimates from previous experience, and widely accepted empirical
evidence. As geotechnical data becomes available, pit slope angles, or angles for various
domains will be adjusted appropriately.
16.5 PIT OPTIMIZATION RESULTS

Seventy nested pit shells were generated by varying the revenue factor. Each nested pit
shell corresponds to a revenue factor, which is a multiplier for the selling price of the
economically recoverable metal in the mineralized material.
Figure 16.1 and Table 16.3 demonstrate the relationship between the resource
contained within the pit shell and the discounted cash flow (PV) for each of the nested pit
shells. Smaller pits at a lower revenue factor are typically higher-grade and have a lower
strip ratio.
Three different mining scenarios were used for the analyses: best case, specified case,
and worst case:
 The best case scenario assumes that it is possible to mine nested pit shells
from the smallest pit to the largest pit without considering pushback width.
 The worst case scenario assumes that it will not be possible to access lower
benches before pushing the top bench back to its final limit (i.e. all mining will
have to be conducted from the top-down). This case is considered conservative.
 The most realistic case, named the specified case, assumes four mining phases
(using phases with a minimum mining width of 70 m); this case is intended to
represent a practical mining sequence.
Pit #31 was selected as the optimum pit shell, which is represented by the peak pit value
for the specified case. Pit #31 has a revenue factor of 0.62 which equates to a nickel
price of US$15,031/t. This is the nickel price carried through to the pit design. Pits
larger than Pit #31 decrease the PV. The optimum pit shell contains approximately

730.3 Mt at a 0.119% DTR nickel grade of diluted Indicated mineralized material and
195.0 Mt at a 0.114% DTR nickel grade of diluted Inferred mineralized material. The
strip ratio is approximately 0.18:1.
Figure 16.1 Pit Optimization Graph

Table 16.3 Optimization Results of Nested Pits
Discounted Cash Flow Mined Materials
Number Stripping
of Mineralized Ratio Diluted Mine
Nested Revenue Best Case Specified Case Worst Case Subtotal Material Waste (Waste:Mineralized Grade Life
Pits Factor ($) ($) ($) (t) (t) (t) Material) (%) (a)
1 0.550 1,798,269 1,798,269 1,798,269 155,041 151,668 3,373 0.020 0.130 0.00
2 0.554 3,477,975 3,477,975 3,477,975 307,894 302,101 5,793 0.020 0.128 0.01
3 0.556 4,687,259 4,687,259 4,687,259 429,387 407,742 21,645 0.050 0.128 0.01
4 0.566 6,490,708 6,490,708 6,490,708 596,724 578,014 18,710 0.030 0.126 0.01
5 0.568 12,575,627 12,575,627 12,575,627 1,204,922 1,170,297 34,625 0.030 0.123 0.03
6 0.570 13,667,262 13,667,262 13,667,262 1,319,522 1,275,430 44,092 0.030 0.123 0.03
7 0.572 14,947,911 14,947,911 14,947,911 1,465,070 1,390,319 74,751 0.050 0.123 0.03
8 0.574 15,462,244 15,462,244 15,462,244 1,519,031 1,442,007 77,024 0.050 0.123 0.04
9 0.576 1,181,767,998 1,181,718,717 1,181,718,717 172,878,670 137,114,893 35,763,777 0.260 0.127 3.43
10 0.578 1,199,364,703 1,198,791,014 1,198,435,781 175,811,163 139,622,629 36,188,534 0.260 0.127 3.49
11 0.580 1,241,440,214 1,239,081,179 1,238,099,299 183,140,956 145,738,555 37,402,401 0.260 0.127 3.64
12 0.582 2,714,756,823 2,613,503,161 2,597,420,946 561,104,540 485,421,311 75,683,229 0.160 0.121 12.14
13 0.584 2,815,965,327 2,707,428,838 2,691,321,774 602,515,320 521,220,860 81,294,460 0.160 0.121 13.03
14 0.586 2,827,332,384 2,716,670,638 2,701,121,581 607,138,309 525,302,307 81,836,002 0.160 0.121 13.13
15 0.588 2,885,364,312 2,763,862,552 2,743,830,474 633,123,294 547,362,869 85,760,425 0.160 0.121 13.68
16 0.590 2,960,153,541 2,825,161,866 2,805,839,552 668,916,592 578,832,342 90,084,250 0.160 0.121 14.47
17 0.592 3,007,251,740 2,858,712,454 2,840,536,661 694,071,861 600,371,891 93,699,970 0.160 0.120 15.01
18 0.594 3,055,917,084 2,895,275,297 2,875,667,518 720,783,874 622,714,496 98,069,378 0.160 0.120 15.57
19 0.596 3,076,588,257 2,907,806,607 2,889,077,251 732,993,318 633,427,381 99,565,937 0.160 0.120 15.84
20 0.598 3,136,557,874 2,950,064,793 2,927,668,884 771,073,877 664,292,805 106,781,072 0.160 0.120 16.61
21 0.600 3,238,198,365 3,004,807,278 2,991,331,608 842,352,168 726,486,253 115,865,915 0.160 0.120 18.16
22 0.602 3,260,696,236 3,017,198,285 3,004,912,544 859,367,617 741,500,514 117,867,103 0.160 0.120 18.54
23 0.604 3,298,664,890 3,041,109,857 3,023,685,507 892,367,337 767,349,733 125,017,604 0.160 0.120 19.18
table continues…

Number Stripping
24 0.606 3,321,693,421 3,054,749,512 3,034,884,009 913,176,144 784,081,784 129,094,360 0.160 0.119 19.60
25 0.608 3,351,613,681 3,066,969,978 3,045,839,245 942,214,083 807,463,154 134,750,929 0.170 0.119 20.19
26 0.610 3,364,590,465 3,074,696,505 3,051,287,906 954,680,949 818,191,608 136,489,341 0.170 0.119 20.45
27 0.612 3,377,409,859 3,080,874,991 3,055,719,678 968,416,694 829,090,251 139,326,443 0.170 0.119 20.73
28 0.614 3,422,168,003 3,088,044,398 3,063,676,781 1,018,858,063 869,905,263 148,952,800 0.170 0.119 21.75
29 0.616 3,445,557,624 3,091,347,880 3,064,957,608 1,047,600,714 893,347,640 154,253,074 0.170 0.119 22.33
30 0.618 3,454,831,731 3,093,718,869 3,066,215,818 1,059,651,414 903,022,859 156,628,555 0.170 0.119 22.58
31 0.620 3,470,715,894 3,099,981,701 3,068,485,917 1,081,961,038 920,549,945 161,411,093 0.180 0.119 23.01
32 0.621 3,505,243,402 3,084,846,122 3,053,926,879 1,129,460,267 962,815,011 166,645,256 0.170 0.118 24.07
33 0.622 3,507,751,535 3,086,639,325 3,054,608,662 1,133,514,456 965,511,836 168,002,620 0.170 0.118 24.14
34 0.623 3,517,100,564 3,084,798,139 3,052,086,556 1,147,300,221 977,784,184 169,516,037 0.170 0.118 24.44
35 0.624 3,519,801,222 3,084,160,716 3,052,058,225 1,151,695,703 981,259,360 170,436,343 0.170 0.118 24.53
36 0.625 3,540,371,196 3,085,878,682 3,047,119,036 1,188,839,381 1,007,538,684 181,300,697 0.180 0.118 25.19
37 0.646 3,658,474,738 3,075,214,942 2,978,650,425 1,493,241,175 1,234,114,812 259,126,363 0.210 0.117 30.85
38 0.668 3,706,458,089 2,992,114,170 2,854,850,804 1,726,847,376 1,382,957,991 343,889,385 0.250 0.117 34.57
39 0.689 3,733,890,712 2,897,791,595 2,716,178,447 1,943,700,311 1,516,072,965 427,627,346 0.280 0.117 37.90
40 0.710 3,754,149,186 2,757,902,581 2,512,386,112 2,209,965,202 1,669,116,459 540,848,743 0.320 0.116 41.73
41 0.720 3,758,150,812 2,722,599,044 2,460,440,199 2,282,279,130 1,706,534,390 575,744,740 0.340 0.116 42.66
42 0.740 3,763,936,243 2,628,723,508 2,336,850,104 2,413,815,502 1,771,583,929 642,231,573 0.360 0.116 44.29
43 0.760 3,768,280,819 2,546,088,883 2,226,074,553 2,545,378,657 1,833,595,815 711,782,842 0.390 0.116 45.84
44 0.780 3,770,406,934 2,492,448,102 2,153,385,284 2,628,685,107 1,873,093,123 755,591,984 0.400 0.116 46.83
45 0.800 3,772,119,241 2,440,588,179 2,082,610,922 2,715,654,881 1,909,022,805 806,632,076 0.420 0.116 47.73
46 0.820 3,772,679,441 2,424,222,266 2,056,192,318 2,750,081,419 1,923,985,276 826,096,143 0.430 0.116 48.10
47 0.840 3,773,651,818 2,379,854,277 1,997,117,075 2,818,179,103 1,951,422,250 866,756,853 0.440 0.116 48.79
table continues…

Number Stripping
48 0.860 3,774,444,659 2,329,638,428 1,928,874,300 2,892,210,458 1,980,664,112 911,546,346 0.460 0.116 49.52
49 0.880 3,774,973,758 2,297,110,574 1,879,395,684 2,961,178,120 2,005,653,879 955,524,241 0.480 0.115 50.14
50 0.900 3,775,239,638 2,264,447,877 1,835,779,630 3,001,710,914 2,020,232,807 981,478,107 0.490 0.115 50.51
51 0.920 3,775,550,458 2,234,821,818 1,789,945,311 3,070,475,002 2,043,607,539 1,026,867,463 0.500 0.115 51.09
52 0.940 3,775,734,535 2,187,433,627 1,726,266,746 3,127,475,348 2,064,144,213 1,063,331,135 0.520 0.115 51.60
53 0.960 3,775,799,921 2,178,778,617 1,711,539,530 3,159,262,611 2,072,740,079 1,086,522,532 0.520 0.115 51.82
54 0.980 3,775,857,108 2,125,342,305 1,640,678,303 3,218,499,417 2,093,092,854 1,125,406,563 0.540 0.115 52.33
55 1.000 3,775,859,275 2,111,439,854 1,619,116,065 3,243,793,328 2,101,172,359 1,142,620,969 0.540 0.115 52.53
56 1.020 3,775,817,689 2,082,448,338 1,578,008,758 3,290,268,690 2,115,578,012 1,174,690,678 0.560 0.115 52.89
57 1.040 3,775,760,871 2,047,551,283 1,531,917,782 3,333,010,589 2,128,435,310 1,204,575,279 0.570 0.115 53.21
58 1.060 3,775,662,333 2,021,454,842 1,492,952,309 3,383,362,534 2,143,563,333 1,239,799,201 0.580 0.115 53.59
59 1.080 3,775,593,346 2,002,017,990 1,465,514,871 3,410,815,652 2,151,224,428 1,259,591,224 0.590 0.115 53.78
60 1.100 3,775,500,764 1,966,744,431 1,420,752,238 3,444,179,695 2,161,395,373 1,282,784,322 0.590 0.114 54.03
61 1.120 3,775,408,917 1,947,599,846 1,393,030,655 3,470,159,108 2,169,596,337 1,300,562,771 0.600 0.114 54.24
62 1.140 3,775,274,280 1,931,657,269 1,369,078,868 3,508,155,274 2,178,250,339 1,329,904,935 0.610 0.114 54.46
63 1.160 3,775,142,190 1,898,616,279 1,325,263,046 3,540,274,690 2,187,697,616 1,352,577,074 0.620 0.114 54.69
64 1.180 3,775,043,925 1,884,719,866 1,306,050,315 3,563,745,256 2,193,304,710 1,370,440,546 0.620 0.114 54.83
65 1.200 3,774,868,382 1,860,915,705 1,271,139,250 3,601,138,713 2,203,840,528 1,397,298,185 0.630 0.114 55.10
66 1.220 3,774,854,053 1,859,668,789 1,268,958,042 3,604,175,679 2,204,373,360 1,399,802,319 0.640 0.114 55.11
67 1.240 3,774,503,801 1,804,497,869 1,192,978,925 3,671,226,252 2,221,091,548 1,450,134,704 0.650 0.114 55.53
68 1.260 3,774,416,107 1,796,339,102 1,181,092,169 3,687,928,731 2,224,627,935 1,463,300,796 0.660 0.114 55.62
69 1.280 3,774,364,538 1,788,891,578 1,170,639,539 3,696,562,268 2,227,248,221 1,469,314,047 0.660 0.114 55.68
70 1.300 3,774,248,240 1,776,673,782 1,153,738,686 3,716,478,372 2,232,174,521 1,484,303,851 0.660 0.114 55.80

16.5.1 CUT-OFF GRADE
The milling cut-off grade is the grade above which the mineralized rock is sent to the mill,
and below which is sent to the waste dump.
Based on the input parameters in Table 16.1, the expected milling cut-off grade has been
determined to be 0.0270% nickel (diluted). The cut-off grade is 0.0291% nickel (in situ).
This grade is used for reporting mineralized material tonnage from the Gemcom Whittle ™
software.
Figure 16.2 shows the optimal pit in 3D conception view; the pit is approximately 2.6 km
long, 1.15 km wide and has a maximum depth of 0.97 km from the highest point of the
pit edge to the lowest point of the pit.
Figure 16.2 3D Conceptual View of Optimum Pit Shell #31
16.6 PRODUCTION SCHEDULE

The production rate recommended for this project configuration was a nominal mill
throughput of 40 Mt/a, and mining capacity 55 Mt/a. Waste and overburden tonnes are
steady at approximately 15 Mt/a in the first 7 years; starting at year 8, waste production
trails off. The production schedule has mine life of approximately 24 years in this study.
See Table 16.4 and Figure 16.3.

After evaluation of 16 production schedule scenarios, Milawa NPV algorithm with a fixed
lead 6~8 was selected as the optimized production schedule based on the highest PV,
more stable mining rate and safer feature.
Table 16.4 Milawa NPV Production Schedule by Year (with fixed lead 6~8)
Mineralized
Period Subtotal Waste Overburden Material Grade Stripping
1 35,269 5,039 10,230 20,000 0.097 0.76
2 54,816 7,318 7,498 40,000 0.107 0.37
3 54,303 5,377 8,927 40,000 0.107 0.36
4 54,368 5,102 9,266 40,000 0.106 0.36
5 54,589 6,877 7,712 40,000 0.107 0.36
6 54,496 5,815 8,680 40,000 0.111 0.36
7 54,642 5,516 9,126 40,000 0.115 0.37
8 49,540 4,484 5,056 40,000 0.117 0.24
9 44,584 2,949 1,635 40,000 0.116 0.11
10 43,296 3,016 281 40,000 0.118 0.08
11 43,870 3,460 410 40,000 0.118 0.10
12 44,427 3,674 754 40,000 0.118 0.11
13 43,496 3,341 155 40,000 0.117 0.09
14 43,412 3,116 296 40,000 0.117 0.09
15 44,437 3,873 564 40,000 0.119 0.11
16 44,473 4,312 161 40,000 0.119 0.11
17 44,213 4,178 35 40,000 0.119 0.11
18 43,796 3,779 17 40,000 0.123 0.09
19 42,253 2,253 - 40,000 0.124 0.06
20 41,685 1,685 - 40,000 0.128 0.04
21 40,810 810 - 40,000 0.129 0.02
22 40,236 236 - 40,000 0.130 0.01
23 40,000 - - 40,000 0.133 -
24 25,268 - - 25,268 0.137 -
Total 1,082,279 86,210 70,801 925,268 0.118 0.17

Figure 16.3 Milawa NPV Production Schedule by Year (with fixed lead 6~8)
16.7 MINE DEVELOPMENT

The mine development used a number of push-backs, or phases, designed to meet the
following objectives:
 enable the mining of high grade resource as early as possible

 effectively reduce stripping ratio in the initial mining stage
 balance the stripping ratio over the period of the mine life
 maintain minimum mining width between two working phases
 meet safety regulations in the pit operation.
16.7.1 MINE DEVELOPMENT SEQUENCES

Reasonable mining sequencing can generate higher economic profit, increase
operational efficiency and improve safety grade. Phased mining is an effective method
for creating a practical mining sequence. Minimum mining width is one of the primary
criteria that must be respected when creating mining phases that are operationally
feasible.
Tetra Tech conducted the following design steps during the phase planning for optimizing
mining sequence:
 Selected Gemcom Whittle™ pit #5, pit #9, pit #20 and pit #31 (see Table 16.2)
as typical pit shells that can be as input of the mining width module in the
Gemcom Whittle™ software.

 Run mining width module using a minimum mining width criteria (70 m)
between two typical pit shells.
 Gemcom Whittle™ pit #5, pit #9, pit #20 and pit #31 automatically become
phase 1, phase 2, phase 3 and phase 4 on the sequence after running mining
width module.
 Production schedule was generated under reasonable phase planning plus pre-
requirement of safety.
Table 16.5 illustrates the four phases with respect to one another and the nickel grades
of the block model.
Figure 16.4, Figure 16.5 and Figure 16.6 display direction of phase advance.
Table 16.5 Production Schedule by Phase

Mineralized
Mining Subtotal Waste Overburden Material Grade Stripping
Phase (kt) (kt) (kt) (kt) (%) Ratio
Phase 1 172,293 9,618 29,065 133,610 0.127 0.29
Phase 2 388,299 16,435 24,741 347,123 0.118 0.12
Phase 3 276,598 26,962 11,585 238,051 0.117 0.16
Phase 4 245,089 33,195 5,410 206,484 0.113 0.19
Total 1,082,279 86,210 70,801 925,268 0.118 0.17
Figure 16.4 Sequence of Phase Advance

Figure 16.5 Four Phases and Block Model Grades: Longitudinal Section View (A-A)
Figure 16.6 Four Phases and Block Model Grades: Transverse Section View (B-B)
Figure 16.7 shows that the production schedule cannot focus on mining phase 1 in the
first few years as per usual, because the pit is situated at a mountainside plus a fixed
lead is required for safety purpose.

Figure 16.7 Production Schedule by phase
Phase 4
Phase 3
Phase 2
Phase 1
Phase 1 is the first pit that would be designed from the initial economic pit shells
generated by the Gemcom Whittle™ software optimization run. The initial phase
prioritizes a higher grade mineralization area towards the eastern extremes of the
resource body. This will maximize cash flow and speed the capital recovery during the
initial years. Phase 1 will mine 133.6 Mt of mineralized material, 9.6 Mt of waste and
29.1 Mt of overburden.
Phase 2 geometry increases the size and depth of eastern extremes, and starts mining
the central part of the resource body. Phase 2 will mine 347.1 Mt of mineralized
material, 16.4 Mt of waste and 24.7 Mt of overburden.
Phase 3 geometry increases the overall size and depth of the eastern and central
mineralized material bodies, and starts mining the western mineralized material body.
Both the Main Pit and Satellite Pit are created in this phase. Phase 3 will mine 238.1 Mt
of mineralized material, 27.0 Mt of waste and 11.9 Mt of overburden.
Phase 4 geometry continues to expand size and depth of the mine from the phase 3.
Phase 4 will mine 206.5 Mt of mineralized material, 33.2 Mt of waste and 5.4 Mt of
overburden.
16.7.2 IN-PIT HAUL ROAD

Haul roads, ramp in pit, will be designed to meet safety standards set out in the BC mine
safety guidelines. Table 16.6 illustrates the running surfaces of the haul roads are
designed to be three truck widths wide where there is double lane traffic and two truck
widths wide where there is single lane traffic. Allowances are also made for a ditch along
the edge of the ramp next to the high-wall and for a berm that is three quarters the height
of haul truck tires on the outer edge of the ramp.

Figure 16.8 shows a double lane traffic ramp. All permanent and semi-permanent ramps
and roads in the pit and outside the pit will conform to these same standards.
Figure 16.8 Conceptual Ramps and Haul Road Cross Section
Table 16.6 Ramp Width Calculation for Pit Design

Parameters
Items Unit Double Lane Single Lane
Truck Parameters
Selected Truck Size t 226 226
Operating Width m 8.3 8.3
Operating Width Multiplier - 3 2
Double Lane Road Width m 24.9 16.6
Berm
Tire Overall Diameter m 3.6 3.6
Height (¾ of largest tire) m 2.7 2.7
Slope (H:V) - 1.5:1 1.5:1
Berm Width m 8.1 8.1
Ditch
Depth m 0.5 0.5
Slope (H:V) - 1.5:1 1.5:1
Ditch Width m 1.5 1.5
Total Road Width m 34.5 26.2

16.7.3 PIT WATER HANDLING
As the Decar mine will be situated in an area that experiences precipitation and
consequently surface runoff and groundwater, the Decar mine will ultimately require a
dewatering system that includes multiple staged diesel pumps connected in series to
keep the pit floor dry and facilitate the sump of the pit.
In winter, the amount of water in the pit will be partially reduced due to temperatures
below zero; however the mine is located in a province with a notable amount of rain and
a spring thaw that could make dewatering a significant engineering task. Further study
on surface runoff and groundwater ingress will help define the scope of required
dewatering design work if the project moves on to the prefeasibility stage. At this point
only traditional in-pit dewatering is considered, however the application of perimeter
dewatering should not be ruled out.
Since the pit is located on a mountainside, it is not necessary to utilize a dewatering

system in the first and second year; therefore there is no start-up capital for dewatering
facilities. The procurement of submersible pumps, booster pumps and pipe lines starts
the third year of mine life.
In the Main Pit, dewatering facilities will consist of a pair of submersible pumps situated
in the pit floor sump, which will pump water up to a number of booster pumps that will be
installed in series at appropriate intervals as the pit deepens. In the Satellite Pit,
dewatering facilities will consist of a pair of submersible pumps situated in the pit floor
sump, which will pump water up to surface directly without booster pumps.
Water will be pumped through HDPE pipe of appropriate diameter which will be located
on the haulage ramp (or will travel directly up the high wall where possible) and then
discharged into a sedimentation pond of adequate dimensions to allow for settlement of
suspended solids to meet environmental requirements before being fed into the
processing circuit as necessary.
16.7.4 WASTE ROCK DISPOSAL

Waste rock generated from the project will be primarily or entirely used in the
construction of the tailings dam. Should there be any waste rock not used for tailings
dam construction, it can be crushed and used for road and other civil constructions.
16.7.5 EXPLOSIVES
A contractor will supply, deliver and load explosives into the blastholes under the
supervision of the drill/blast foreman. It is anticipated that the contractor will erect a
plant and storage facility on-site.

16.7.6 ULTIMATE PIT DESIGN
Figure 16.9 illustrates the relationship between the terms: batter angle, berm width,
bench height, inter ramp angle and overall slope angle. Table 16.7 outlines the pit
design parameters used when designing the ultimate pit in Gemcom GEMS™.
The inter ramp angle is the angle from the toe of one bench to the toe of the next bench,
exclusive of any ramps or haul roads. This should not be confused with overall slope
angle which is the angle between the lowest toe and the highest crest inclusive of any
ramps or haul roads.
Figure 16.9 Relationship Between Batter Angle, Berm Width, Bench Height and Inter-
ramp Angle

Table 16.7 Pit Design Parameters and Assumptions
Mine Design Features Parameters Units Notes
Overall Pit Slope Angle 45 degree  consistent with pit optimization selection
Inter-ramp Angle 56 degree  calculated based on other parameters
Bench Face Angle 80 degree  assumption
Bench Height 10 m  vertical component of mining face, not
greater than 2 m beyond the reach of
loading equipment; based on the item
6.23.4 of the Health, Safety and
Reclamation Code for Mines in BC
Catchment Berm Width 10 m  catchment berm designed to final width
not less than 8 m; based on the item
Reclamation Code for Mines in BC
Cleanse Berm Width 35 m  clean materials when high wall failure
 consider double lane (3 x W) travel
includes allowance for ditch and safety
berm, where W = truck width
Double Benching yes - -
Ramp Width (Single Lane) 27 m  single lane (2 x W), includes allowance for
ditch and safety berm; based on the item
Reclamation Code for Mines in BC, where
W = truck width
Ramp Width (Double Lanes) 35 m  double lane (3 x W), includes allowance
for ditch and safety berm; based on the
item 6.9.1 of the Health, Safety and
Reclamation Code for Mines in BC, where
W = truck width
Ramp Grade (Single Lane) 12 %  assumption
Ramp Grade (Double Lane) 10 %  assumption
Minimum Mining Width 70 m  allowance for double side loading and
double lane ramp
Figure 16.10 shows that the preliminary ultimate pit design was created with the above
parameters. The pit is approximately 2.6 km in length from northwest to southeast and
1.15 km in width from northeast to southwest and is designed with 10 m benches in
double bench configuration with cleanse berms 35 m in width. As it descends from a
mountainside highest elevation of 1,420 m down to the ultimate pit floor at 450 m
elevation, there will be an elevation differential of 970 m. The area of the pit limit is
2,199 km2, and perimeter length of pit limit is 6,580 m.
For the Main Pit, the pit features an internal double lane ramp that extends down to the
bench 610 m from the 950 m elevation where the ramp daylights. Benches below the
portion of the 610 m elevation use an internal single lane ramp that extends down the
450 m pit bottom. Benches above the 950 m elevation are excavated from the side of a
hill that will be accessed via a haul road system located outside the pit. The haul road

system will lead to the crusher area, the overburden dump and the tailing dam which will
be the destination for waste material.
For the Satellite Pit, the pit features an internal double lane ramp that extends down to
the bench 1,080 m pit bottom from the 1,230 m elevation where the ramp daylights.
Benches above the portion of the 1,230 m elevation are excavated from the inside
temporary uphill ramp. All materials are sent in the direction of the mill, of the
overburden dump and of the tailing dam, via the pit exit elevation 1,230 m.
Figure 16.10 Plan View of Ultimate Pit Design
16.7.7 RESOURCE CONTAINED WITHIN PIT DESIGN

Based on the optimization results and current geological model, Tetra Tech used pit #31
as the guide for the ultimate pit design, the results of which are provided in Table 16.8.
The determination between mineralized material and waste during operations will involve
application of a mill cut-off grade at the edge of the pit wherein any material leaving the
pit has already sunk the cost of mining to the pit’s edge, at which point it should be
determined which decision is more profitable or less costly., sending the material through
the crusher to the mill, stockpiling or wasting it to the TMF, where it will be used for dam
construction.

Table 16.8 Mineralized Material Estimated in the Ultimate Pit
DTR Ni Contained Recovered

Tonnage Grade Ni Metal Ni Metal
Item (t) (t) (t) (t)
Indicated 730,275,000 0.119 871,000 715,000
Inferred 194,994,000 0.114 222,000 183,000
Notes: 1. Reported mineralized material is at a cut-off Grade of 0.027% DTR Ni.
2. DTR Ni Grade is a diluted mining grade.
3. Mill recovery rate of the DTR Ni is 82%.
16.7.8 MINIMUM MINING WIDTH

The proposed minimum mining width is the sum of the minimum double-side loading
width for a shovel and the double lane haul road width for a haul truck. Based on a
27 m3 (bucket capacity) diesel hydraulic shovel loading 226 t haul trucks, an
approximate minimum mining width of 70 m was determined as shown in Figure 16.11.
Figure 16.11 Minimum Mining Width Schematic
16.8 MINE EQUIPMENT SELECTION

The proposed mining method is based on a traditional open pit drill/blast and load/haul
system, using trucks and shovels. All mining operations are planned to be performed by
the Owner other than the supply and loading of blasthole explosives, which will be
performed by a contractor.

16.8.1 DRILLING AND BLASTING PARAMETERS
The mining sequence will follow a standard drill, blast, dig and haul. Production drilling
will be sampled and assayed from which mineralized material and waste may be
delineated when and where required. Grade control requirements will be minimal due to
the low strip ratio and continuity of the mineralized material body. The blasting schedule
should be flexible, but may be planned to occur every three or four days during shift
changes, so as to minimize the interruption of production. A minimum inventory of two
weeks blasted muck will be built up ahead of the shovels so that there will be flexibility in
daily and weekly planning to optimize feed to mill.
It is approximated that mineralized material drill hole spacing will be a staggered 7.0 m
by 8.1 m pattern with 2.1 m of sub-drill. Each hole will be loaded with 455 kg of
ammonium nitrate/fuel oil (ANFO) blended 30/70 with emulsion at a 1,280 SG,
producing a loaded column 7.2 m in height and requiring 4.9 m of stemming. Each hole
will produce 1,534 t of mineralized material in the form of blasted muck.
Table 16.9 identifies powder factors of 0.30 kg/t and 0.25 kg/t (explosive/blasting
material) are being used for resource and waste respectively.
The selected explosive supplier is to erect a plant and storage facility on site. Under the
supervision of the drill/blast foreman, the supplier will be contracted to supply, deliver,
and load explosives into the blastholes. The drill/blast foreman will also oversee the
blasting crew who will prime, stem, and tie-in blastholes.
Sequencing and delays may need to be engineered in order to address any

environmental restrictions on noise or vibration. To improve wall stability, a pre-shear
and buffer blasting practice will be implemented adjacent to the final pit walls to
minimize damage to the final pit walls due to blasting.
Table 16.9 Drill and Blast Pattern Parameters

Mineralized
Blast Design Parameters Unit Material Waste
Explosive Type - ANFO Blended 30/70 with emulsion
Rock Density g/cc 2.7 2.7
Bench Height m 10 10
Explosive Diameter mm 251 251
Explosive Density g/cc 1.28 1.28
Blasting Pattern
Burden (B) m 7.0 7.5
Burden Stiffness (2.0<BS<3.5) m 1.4 1.3
Spacing (S=1.15*B) m 8.1 8.7
Stemming Length (=0.7B) m 4.9 5.3
Energy Distribution % 51% 47%
Sub-drill (Burden * 0.3) m 2.1 2.3
Blasthole Length m 12.1 12.3
table continues…

Mineralized
Blast Design Parameters Unit Material Waste
Explosive Length m 7.2 7.0
Explosive Loading Density kg/m 63 63
Explosive Weight kg/hole 455 441
Volume Shot bcm/hole 568 652
Mass Shot t/hole 1,534 1,761
Powder Factor kg/bcm 0.80 0.68
Powder Factor kg/t 0.30 0.25
Blasting Pattern Consumption
Mass Shot t/hole 1,534 1,761
Powder Factor kg/t 0.30 0.25
Explosive Weight kg/hole 455 443
Numbers of Holes holes 40 40
Blasthole Length m 12.1 12.3
Mass Shot t 61,346 70,423
Explosive Weight kg 18,212 17,630
Primer (boosters) set 80 80
Down Line (including Detonator) 13 m 80 80
Trunk Line m 1200 1200
Initiation Line m 100 100
MS Delay, 65 set 14 14
16.8.2 MAJOR EQUIPMENT SELECTION

The mining equipment was selected to match the mine production schedule, which is
based on 350 d/a, with two crews working 12-hour shifts. Equipment selection, sizing,
and fleet requirements were based on expected operating conditions, haulage profiles,
production cycle times, mechanical availability, and overall utilization. To determine the
number of units for each equipment type (drill, shovel, truck, etc.), annual operating
hours were calculated and were compared to the available annual equipment hours.
Equipment productivity used in the schedule development was benchmarked from the
truck’s and shovel’s utilization and availability data of Cliffs’ operating mine, United
Taconite (see Table 16.10).

Table 16.10 United Taconite Equipment Availabilities for 2011
Physical Availability Utilization Total Availability
Major Plan Actual Percentage Plan Actual Percentage Plan Actual Percentage
Equipment (%) (%) of Plan (%) (%) of Plan (%) (%) of Plan
190 t Truck 60 91 152 85 18 21 51 16 32
240 t Truck 82 77 94 88 87 99 72 67 93
EX 3500 Shovel 75 75 100 90 94 104 68 71 104
PC 5500 Shovel 85 91 107 90 98 109 77 89 117
1850 Loaders 65 48 74 86 55 64 56 26 47
12.25" Drills 81 89 110 90 96 107 73 85 117
Due to changing production requirements of the mine over the schedule, varying
numbers of major production equipment will be required. The annual requirements for
selected major and support equipment at this mining operation are listed by year in Table
16.11.
Truck, shovel and drill selection represent the majority of equipment capital in an open
pit mining operation. The size and unit selection are based on operation time available,
cycle time and production schedule.
The size and unit selection of support equipment are referred from Tetra Tech’s database
and of similar operations.
Tetra Tech develops criteria (see Table 16.11) for physical (mechanical) availability,
utilization rate and operation efficiency as well as working system after referring from the
following data:
 Cliffs’ operational data (including physical, availability, utilization rate and

operation efficiency)
 Tetra Tech’s database
 industrial standard.
Truck and shovel requirements were based on cycle times as calculated in Caterpillar’s
fleet production and cost (FPC) software.
Cycle times were derived from haul profiles (distances and grades) that were measured
from the pit design and the site layout map, where the TMF and mill positions were
approximated.
Every five benches are grouped into a typical bench to evaluate cycle time; every typical
bench has three kinds of materials including waste, overburden and mineralized material
that should be sent to the crusher, dump and dam separately. A total of 57 (19x3)
haulage profiles were built and total of 57 cycle times calculated for inclusion in the
haulage analysis.

After bench cycle times are ready, yearly cycle time is weighted by phase and finally
weighted by material hauling.
Table 16.11 Tetra Tech’s Criteria for Equipment Availabilities

Item Unit Criteria
Work System
Operating Days per Year day 350
Operating Days per Week day 7
Shifts per Day - 2
No. of Operating Crews - 4
Truck Fleet Availability
Physical (Mechanical) Availability % 82
Utilization Rate % 88
Operation Efficiency % 87
Shovel Fleet Availability - -
Drill Fleet Availability
Pure Penetration Rate m/min 0.5
Truck Fleet Availability to Shovel
Truck Fleet Availability to Shovel % 90
Support equipment such as dozer, grader, water, lube, and fuel trucks were matched with
the major mining units. Emphasis has been placed on road construction and
maintenance. Support equipment was also included for the mechanical and electrical
servicing of the mining fleet. The proposed mine equipment fleet is presented in Table
16.12 which summarizes the main units of the mining fleet.
The calculated truck, shovel and drill fleet size for year 1 and year 2 are described in
Table 16.12, Table 16.13 and Table 16.14 separately.
Table 16.12 Truck Fleet Requirements for Year 1 and Year 2

Items Unit Year 1 Year 2
Total Material Haulage kt 35,269 54,816
Waste kt 5,039 7,318
OB kt 10,230 7,498
Mineralized Material kt 20,000 40,000
Total Haulage, Circle Time minimum 17.95 16.30
Waste, Weight Average Circle Time minimum 21.37 20.89
table continues…

OB, Weight Average Circle Time minimum 15.29 14.15
Mineralized Material, Weight Average Circle Time minimum 18.45 16.99
Scheduled Hours (SH) hours 8,400 8,400
Scheduled days days 350 350
Hours/Day hours 24 24
Shifts per Day shift/day 2 2
Physical (Mechanical) Availability (PA) % 82 82
Utilization Rate (UA) % 88 88
Operation Efficiency, (OE) % 87 87
Repair (Down) Hours (RH=SH-SH*PA) hours 1,512 1,512
Available Hours (AH=SH-RH) hours 6,888 6,888
Operation Hours (OH=AH*UA) hours 6,061 6,061
Operation Standby Hours (OSH=AH-OH) hours 827 827
Delay Hours (DH=OH-PH) hours 788 788
Production (Active) Hours (PH=OH*OE) hours 5,273 5,273
Truck Units - Total Haul - - -
Truck Model - CAT793F CAT793F
Truck Load t 226 226
Filling Factor % 90 90
Total Haul Tonnage kt 35,269 54,816
Haul Cycle Time (average) minimum 17.9 16.3
Switchback Adjust Factor 1.2 1.2
Total Required Truck Units units 12 17
Table 16.13 Shovel Fleet Requirements for Year 1 and Year 2

Waste kt 5,039 7,318
OB kt 10,230 7,498
Scheduled Days days 350 350
Operation Efficiency (OE) % 89 89
table continues…

Example Model EX5500 EX5500
Bucket Capacity (heaped), BC m3 27 27
Material Weight (MW) kg/bcm dry 2,700 2,700
Swell Factor (SF) 1.30 1.30
Material Weight, MW1 = MW / SF kg/lcm dry 2,077 2,077
Moisture (M) % 3 3
Fill Factor (FF) % 95 95
Effective Bucket Capacity (EBC = FF x BC) m3 25.65 25.65
Material Weight (MW2 = MW1 / (1-M)) wmt/lcm 2.14 2.14
Material Weight (MW2 x (1-M)) dmt/lcm 2.08 2.08
Tonnes/Pass (TP) wmt 54.92 54.92
Example Model CAT793F CAT793F
Truck Size Capacity (TC1) m³ heaped 176 176
Truck Size Capacity (TC2) wmt 226 226
Theoretical Passes (TPV = TC1/ EBC by Volt) passes 6.86 6.86
Theoretical Passes (TPT = TC2 / TP by Weight) passes 4.12 4.12
Actual Passes (AP = ROUND TPT) passes 5 5
Truck Load - Volume (TL = AP x EBC) m3 128.25 128.25
Truck Load for Simulation (TLS = AP x TP) wmt 226.00 226.00
Truck Load for Productivity (TLP) dmt 219.22 219.22
First Bucket Cycle Time sec 10 10
Subsequent Bucket Cycle Time (AC) sec 42 42
Truck Spot Time (ST) sec 50 50
Load Time per Truck (LT = AP x AC + ST) sec 228 228
Load Time per Truck (LT = AP x AC + ST) min 3.80 3.80
Maximum Productivity (MP = 60 / LT) trucks/h 15.79 15.79
Conversion = MP x TLP/ MW bcm/h 1,282 1,282
lcm/h 1,667 1,667
Maximum Theoretical Production (TPHM) dry t/h 3,461 3,461
Production Hours/Year (from above) (PH) hours 5,719 5,719
Truck Availability to Shovel (TA) % 90 90
Production Adjusted = TPHM x TA t/h 3,115 3,115
Real Production = TPHA x PH dry kt/a 17,816 17,816
Real Production = TPHA x PH wet kt/a 18,351 18,351
Loader Selection - - -
Loading Percentage % 95% 95%
Total Loading Materials kt 35,269 54,816
Actual Shovel Units Required unit 2 3

Table 16.14 Drill Fleet Requirements for Year 1 and Year 2
Waste kt 5,039 7,318
Overburden kt 10,230 7,498
Mine Design Parameters
Explosive - ANFO ANFO
Rock Density g/cc 2.70 2.70
Bench Height m 10 10
Explosive Diameter mm 251 251
Explosive Density g/cc 1.28 1.28
Scheduled Days days 350 350
Operation Efficiency (OE) % 90 90
Drill Parameters
Example Model - D55SP D55SP
Hole Diameter mm 251 251
Pure Penetration Rate m/Min 0.50 0.50
Material to be Drilled - Mineralized Mineralized
Material and Waste Material and Waste
Drill Cycle Time – Ore
Move and Set-up Time min 2.0 2.0
Collaring Time min 1.0 1.0
Drilling Time min 24.2 24.2
Hole Clearing Time min 1.0 1.0
Grade Control Sampling Time min 1.0 1.0
Total Cycle Time/Hole min 29.2 29.2
Hole Numbers/Hour - 2.1 2.1
Hole Numbers/Year - 11,877 11,877
Blasting Mass/Year t/a 18,214,906 18,214,906
Drill Cycle Time – Waste
Move and Set-up Time min 2.0 2.0
Collaring Time min 1.0 1.0
table continues…

Drilling Time min 24.5 24.5
Hole Clearing Time min 1.0 1.0
Grade Control Sampling Time min 1.0 1.0
Total Cycle Time/Hole min 29.5 29.5
Hole Numbers/Hour - 2.0 2.0
Hole Numbers/Year - 11,756 11,756
Blasting Mass/Year t/a 20,696,605 20,696,605
Actual Drill Unit Required unit 2 3
16.9 MINE OPERATING AND CAPITAL COSTS
16.9.1 CAPITAL COSTS

The total LOM capital costs were estimated at $394.0 million with the portion allotted to
the start-up of $156.0 million (see Table 16.15).
Table 16.15 Start Up and LOM Capital Costs

Start-up Sustaining Total LOM
Capital Costs Capital Costs Capital Costs
Mining Capital Costs ($) ($) ($)
Production Development 1,500,000 - 1,500,000
Mineralized Material Stockpiles 250,000 - 250,000
Mining Mobile Equipment 152,658,000 229,339,000 381,997,000
Mining Support Equipment 1,550,000 8,719,000 10,269,000
Total 155,958,000 238,058,000 394,016,000
Capital costs were estimated using Costmine 2011 and factored for current based date
pricing, with the exception of mobile mining and support equipment, which are listed in
Table 16.16. These prices for these items were obtained from a vendor as single price
checks.

Table 16.16 Mobile and Support Equipment Capital Cost Details
Sustaining Total LOM
Start-up Capital Costs Capital Capital
Unit Price ($000) Costs Costs
Equipment Fleet Size ($000) Subtotal Year -2 Year -1 Year 1 ($000) ($000)
Mobile Equipment
Haul Trucks 226 t 4,700 79,900 22,560 43,240 14,100 89,300 169,200
Primary Shovel 27 m3 11,300 33,900 9,040 18,080 6,780 33,900 67,800
Wheel Loader (back-up) 17 m3 3,500 3,500 1,400 2,100 - 7,000 10,500
Drills Ø251 mm 2,200 6,600 1,760 3,520 1,320 13,200 19,800
Boom Drill Ø100 mm 900 900 900 - - 2,700 3,600
Track Dozers 27.2 m3 2,425 2,425 - 2,425 - 7,275 9,700
Track Dozers 18.5 m3 1,650 6,600 2,640 3,960 - 19,800 26,400
Wheel Dozer 468 kW 2,300 4,600 4,600 - - 13,800 18,400
Graders 397 kW 2,200 4,400 2,200 2,200 - 13,200 17,600
Water Truck 14,000 gal 773 773 773 - - 1,546 2,319
Backhoe Excavator 3.23 m3 1,150 2,300 2,300 - - 11,500 13,800
Utility Loader/Tire Handler - 680 680 680 - - 1,360 2,040
Articulated Dump Trucks 40 t 820 2,460 2,460 - - 7,380 9,840
Boom Truck 20 t 220 220 220 - - 440 660
Welding/Service Truck - 68 68 68 - - 204 272
Fuel/Lube Truck 13,000 L 126 252 252 - - 504 756
Wheeled Transporter (Float) 250 t 653 653 653 - - 1,306 1,959
Crane 25 t 310 310 310 - - 620 930
ANFO Truck 1,000 lb/min 83 83 83 - - 166 249
Explosive Truck – Emulsion 12.2 Mt 81 81 81 - - 162 243
Light Vehicles (Pick-up Trucks) 3/4 t 30 450 120 240 90 1,800 2,250
Crew Buses 40 passengers 100 200 100 100 400 600
table continues…

Sustaining Total LOM
Start-up Capital Costs Capital Capital
Unit Price ($000) Costs Costs
Equipment Fleet Size ($000) Subtotal Year -2 Year -1 Year 1 ($000) ($000)
Portable Light Towers 6 kW 22 132 35 70 26 528 660
GEN-SET (site) 600 kw 149 149 149 - - 298 447
GEN-SET (site backup) 300 kw 72 72 72 43 - - 72
Secondary Grader 159 kW 950 950 380 570 - 950 1,900
Subtotal - - 152,658 53,836 76,549 22,316 229,339 381,997
Support Equipment
Dewatering Pump – Submersible 150 hp 84 - - - - 1,344 1,344
Dewatering Pump – Boosters 440 hp 125 - - - - 2,000 2,000
Radios allowance 25 50 20 30 - 250 300
Survey Equipment allowance 60 120 48 72 - 600 720
Computer Hardware allowance 30 60 24 36 - 345 405
Computer Software allowance 70 70 28 42 - 350 420
Shovel Bucket 27 m³ 1,250 1,250 500 750 - 1,250 2,500
Dewatering Pipe 18" SR11 - - - - - 2,580 2,580
Subtotal - - 1,550 620.00 930.00 - 8,719 10,269
Total Mobile and Support Equipment - - 154,208 54,456 77,479 22,316 238,058 392,266

16.9.2 MINE OPERATING COSTS
The total estimated operating costs over the LOM amount to $2.6 billion. The average
annual operating cost is $109.1 million, which equates to $2.42/t mined.
A critical assumption in the calculation of the operating costs is the unit cost of fuel. The
cost of diesel fuel used in the operating cost calculation was $1.10/L.
Diesel fuel costs are the biggest component of the operating costs and make up 31.1%
of the overall operating costs for a total of $813.8 million over the LOM.
After diesel fuel, manpower is the second largest component of operating costs in the
mine, followed by undercarriage/ tire, explosives and maintenance in that order.
Lubricants, geology/geotechnical, drilling consumables and dewatering costs round out
the lowest four operating expense categories in order.
Table 16.17 breaks down the operating costs by expense category giving the total LOM
cost and cost per tonne material mined.
Table 16.17 Operating Cost Summary by Expense for Mine Operations

Fraction of
Consumable Expenses Unit Cost Expense
OPEX ($000) ($/t mined) (%)
Fuel 813,812 0.75 38.5
Lube 150,804 0.14 7.1
Undercarriage/Tire 429,775 0.40 20.4
Equipment Maintenance 244,668 0.23 11.6
Drilling 12,504 0.01 0.6
Explosives 349,497 0.32 16.6
Dewatering 365 0.00 0.0
Geology/Geotechnical 109,920 0.10 5.2
Total 2,111,345 1.95 100.0
16.9.3 OPEN PIT OPERATING MANPOWER

The personnel associated with mine operations, mine maintenance and technical
services that will be required in the mine’s first and second years of operations is listed in
Table 16.18.

Table 16.18 Manpower List
Period Year Year 1 Year 2
Technical
Section Manager – Mine Engineering 1 day only (5&2) 1 1
Administrative Assistant 1 day only (5&2) 1 1
Senior Staff Geologist 1 day only (5&2) 1 1
Geologist 1 day only (5&2) 1 1
Geology Technician 1 day only (5&2) 1 1
Senior Staff Mine Engineer 1 day only (5&2) 1 1
Senior Mine Engineer 1 day only (5&2) 1 1
Mine Planning Engineer 1 day only (12 hour shifts) 1.5 2
Dispatch Engineer 1 day only (5&2) 1 1
Geotechnical Engineer 1 day only (5&2) 1 1
Dispatcher 1 day/1 night (12 hour shifts) 2 4
Senior Surveyor 1 day only (5&2) 1 1
Surveyor 2 day only (5&2) 1.5 2
Surveyor Assistant 4 day only (5&2) 2 4
Mine Engineering Technician 1 day only (5&2) 1 1
Mine Engineering Clerk 1 day only (5&2) 1 1
Total Staff 19 24
Operations
Area Manager Mine Operations 1 day only (5&2) 1 1
Administrative Assistant 1 day only (5&2) 1 1
Section Manager – Mine Operations 1 day only (5&2) 1 1
Senior Mine Supervisor 1 day (12 hour shifts) 1.5 2
Supervisor – Mine Operations 1 day/1 night (12 hour shifts) 3.0 3
Supervisor – Drill and Blast 1 day (12 hour shifts) 1.5 2
Drill Operator 1 day/1 night per drill 5.6 12
Drill Helper 1 day/1 night per drill 5.6 12
Blaster 1 day/1 night (12 hour shifts) 1.4 2
Blaster Helper 2 days/2 nights (12 hour shifts) 1.2 2
Shovel Operator 1 day/1 night per shovel 5.6 12
Loader Operator 1 day/1 night per loader 2.8 4
Haul-Truck Operator 1 day/1 night per truck 33.6 68
Dozer Operator 1 day/1 night per dozer 19.6 28
Grader Operator 1 day/1 night per grader 5.6 8
Backhoe Excavator Operator 1 day/1 night per truck 5.6 8
Water Truck Operator 1 day/1 night per truck 1.4 2
Fuel/Lube Truck Operator 1 day/1 night per truck 2.8 4
Shift Labourer 4 days/4 nights (12 hour shifts) 11.2 16
Trainer 1 day only (5&2) 1.0 1
Boom Drill Operator 1 day (12 hour shifts) 1.4 2
Articulate Truck Operator 1 day/1 night (12 hour shifts) 8.4 12
table continues…

Period Year Year 1 Year 2
Total Operations 122 203
Maintenance
Section Manager – Mine Maintenance 1 day only (5&2) 1 1
Supervisor – Mine Maintenance 1 day/1 night (12 hour shifts) 4 4
Maintenance Planner 1 day only (5&2) 0.7 1
Maintenance Scheduler 1 day only (5&2) 0.7 1
Heavy Duty Mechanic 6 days/2 nights 11.2 16
Welder 2 days only (5&2) 2 2
Washbay 1 day only 1 1
Light Duty Mechanic 2 days/1 night only (5&2) 2.1 3
Electrician 2 days only (5&2) 2 2
Electrician Helper 2 days only (5&2) 2 2
Total Maintenance 26.7 33

17.0 RECOVERY METHODS
17.1 INTRODUCTION
Two of the most significant physical properties of awaruite are its high specific gravity and
high magnetic susceptibility. As a result, all of the beneficiation stages were based on
either gravity separation or magnetic separation. The performance of the gravity and
magnetic separators was based on test work conducted by SGS during the bench-scale
investigation on recovery of nickel from the Decar awaruite deposit.
The flowsheet presented in Figure 17.1 is based on the SGS test work with key elements
including:
 three stages of crushing and grinding to reduce the ROM material to 600 µm
 one stage of magnetic separation
 regrind to 70 µm in a tower mill (e.g. VertiMill™)
 Knelson concentrators will upgrade the reground magnetic concentrate to a
grade of 13.5% total nickel
 tailings from magnetic and gravity separation will be thickened and deposited in
a tailings facility at 65% solids
 concentrate will be dewatered using a disk filter and dried for storage and
transport using a diesel fired dryer.
17.2 PROCESS DESIGN CRITERIA

Tetra Tech developed the process flowsheet based on test results from SGS. The
following process design criteria were used:
 The plant will treat 40 Mt/a or 115 kt/d, with a feed grade averaging 1,182 g
DTR nickel/t.
 The plant will operate continuously, 24 h/d, 350 d/a. The remaining days are
allowed for scheduled maintenance requiring plant shutdown.
 The plant will produce 269 kt/a nickel concentrate with a grade of 13.5% total
nickel.
 Plant equipment will be sized for DTR nickel recovery between 75 to 85%
(targeting 82%) (37% to 42% total nickel recovery).

 The bond ball mill work index of the material was assumed to be 15 kWh/t. No
comminution test work has yet been conducted.
 Equipment sizes were based on typical equipment in Tetra Tech’s internal
references or from discussions directly with equipment vendors.
 The major equipment specified for this plant has a lifespan of 25 years, which
exceeds the LOM of 24 years. As a result, the plant life was specified to be
25 years.

Figure 17.1 Two-Piece Circuit Simplified Process Flow Diagram

17.3 PROCESS DESCRIPTION
Mill feed will be stockpiled in a fixed stockpile over a recovery trench. The stockpile will
be 115 m in diameter and 35 m in height. The angle of repose was assumed to be
approximately 33°. With these dimensions, the stockpile contains approximately two
weeks of feed. Material will be recovered from the stockpile by three manganese steel
apron feeders. Each feeder will be 1.83 m wide and 8.23 m long.
Primary crushing is accomplished using a gyratory crusher. Secondary and tertiary

crushing stages use standard-head and short-head cone crushers. Approximately eight
standard cone crushers and 12 short-head cone crushers may be required to handle the
flow of material. Alternative processing options to consider in the future should include
semi-autogeneous grinding (SAG) milling, high pressure grinding rolls (HPGR), and rod
milling. The gyratory crusher will be operated in an open configuration while the
secondary and tertiary crushers will be operated in closed circuit with an assumed
recycle rate of 20% of the flow. All crushing will be performed dry.
Primary grinding will use ball mills to grind the material to a nominal size of 600 µm. The
feed to the ball mills will be diluted to 70% solids with water. The ground product will
then be diluted to 30% solids. Rod mills should be considered for the primary grinding
role in future studies. Additionally, it may be possible for an HPGR to perform this role.
The ball mills will operate in open circuit, with a trommel present to prevent grossly
oversized material including scats from advancing to magnetic separation. Approximately
three ball mills will be necessary to process the full flow.
The first stage of beneficiation will be magnetic concentration. Each magnetic separator
will have one drum measuring 1,220 mm diameter (48 in) and 3,175 mm (125 in)
length. The magnetic separators will be fed a 30% solids slurry, and will produce a
concentrate with 70% solids, which will be directed to the next stage of beneficiation.
Each train will recover 25% of the mass and 69% of the total nickel. These values
represent reasonable “name plate” values for magnetic concentrator performance, and
are similar to the results observed during the SGS tests. The tails from the magnetic
separation will be thickened prior to deposition in the TMF. Approximately 24 trains of
magnetic separators, each with one drum, will be necessary to handle the flow of slurry.
The product from the magnetic separators will be fed to the tower mills (aka VertiMills ™)
after being diluted to 30% solids. The tower mills will be used to regrind the magnetic
concentrate to approximately 75 µm. Tower mills typically have lower operating and
installation costs than tumbling mills. Additionally, tower mills require less floor space
and produce less noise and less over-ground product. Future studies should evaluate the
use of ball mills for regrind, and should evaluate the need for operating the tower mills in
closed circuit with hydrocyclones.
Knelson concentrators will be used as the final stage of beneficiation. The Knelson
concentrators will process 30% solids slurry to a concentrate with 70% solids. One to
three times per hour the Knelson concentrators will shut down to recover the collected
concentrate. This necessitates the use of a surge tank prior to the Knelson concentrator;

however, the feed to the offline concentrator may be re-distributed to the concentrators
remaining online, eliminating the need for a surge tank. Approximately four
concentrators will be needed. Each concentrator will recover 2.4% of the mass and 67%
of the total nickel.
The Knelson concentrate will be dewatered in a rotary disk filter down to 9% moisture.
Future studies should consider the use of other types of filter in order to optimize the
performance of the circuit. Additional test work should be conducted to determine the
filtering area demanded by this material type. The unit filtering capacity was assumed to
be 800 kg/h/m2 – similar to the value for magnetite. One disk filter was deemed to be
sufficient to dewater the concentrate.
The dewatered concentrate will be dried to 5% moisture in a diesel fired dryer. This
moisture content may minimize dusting issues in transport and handling. One dryer
should be sufficient to dry the final concentrate.
The final concentrate will be stored in a covered warehouse with seven days of storage
capacity. Final concentrate will be taken by truck to a rail spur where it will be loaded
onto rail cars and shipped to a west coast port.
Thickeners will be used to recover the water from the magnetic and gravity separation
tails. The thickener will produce an overflow free of solids and an underflow with 65%
solids. The underflow will be disposed into the TMF, and the overflow water will be
recycled back to the process. Thickeners are specified based on settling area required
per tonne per day. As no thickening and settling tests have been conducted, an average
value of 0.7 m2/t/day was assumed for the Decar tailings. Due to the large quantity of
tails produced by the process, three thickeners with a diameter of at least 184 m will be
required. Currently no thickening tests have been conducted, but will be necessary in
future work to fully specify the thickeners.
A heavy-duty slurry pump will be used to transport the thickened slurry to the TMF. The
pump casing and impeller will be constructed from high chromium iron. The pump
capacity will be 75,706 L/m (20,000 gpm), with a head of 30.5 m (100 ft). Two identical
slurry pipes constructed of HDPE with a diameter of 910 mm (36 in) will be laid to the
TMF.
Three months of plant consumables and maintenance materials will be stored on site.
Wear parts and other items will be delivered by suppliers on an as-needed basis. The
proposed process uses entirely physical means of separation; as a result, no reagent
consumption was specified. The process will require some minor amount of flocculant,
descaling agents, etc., but these amounts could not be estimated at this time.
The process electrical demand was determined to be 92.5 MW, scaled from the total
electrical demand for a similar model process. The dryer diesel demand will be
approximately 1.5 million L/a.
The major pieces of process equipment used in this facility are described in Table 17.1.

Table 17.1 General Description of Major Process Equipment
QTY Utility
Equipment Type Feed and Product Consumption Nominal Dimensions
Apron Feeder 3 ROM Material 30 hp each 72” x 27’
(22.4 kW)
Gyratory Crusher 1 ROM Material, 1,000 hp each 60” Mantle to Liner crown,
~1,500 mm -> 220 (746 kW) 110” mantle diameter at
mm discharge
Standard Cone 8 Crushed Material, 800 hp each 7’ diameter
Crusher ~220 mm -> 40 mm (597 kW)
Short Head 12 Crushed Material, 800 hp each 7’ diameter
Cone Crusher ~40 mm -> 13 mm (597 kW)
Wet Overflow 3 70% slurry, 12,000 hp each 22’ x 32’
Ball Mill ~13 mm -> 600 µm (8 948 kW)
Magnetic 24 30% slurry, 600 µm 50 hp each 48” diameter x
Separators (37 kW) 125” length
Tower Mills 16 30% slurry, 1,250 hp each 72” radius, 44’2” height
~600 µm -> 60 µm (932 kW)
Knelson 4 30% slurry, ~60 µm 250 hp each 70” diameter
Concentrator (186 kW)
Rotary Disk 1 70% slurry, 91% slurry 1.5 hp (1.11 kW) 8 plates @ 6’ diameter
Filter
Diesel Fired 1 91% slurry to 95% 20 hp (15 kW) 4’ diameter x 30’ length
Dryer slurry 152.2 L diesel/h
Thickener 3 Magnetic and Gravity 110 hp each 184 m diameter
Tails to 65% underflow (82 kW)
density
Tailings Pump 1 Tails slurry @ 65% 1,000 hp each 20,000 gpm, 100’ head
solids (746 kW)
17.4 PRODUCT QUALITY

An independent third-party study titled “Nickel Value in Use Study” was conducted to
determine the marketability of synthetic process concentrates provided by Cliffs. The
Nickel Value in Use Study was conducted using concentrate with 14.7% total nickel and
4.2% total nickel, while the process is expected to produce a concentrate with a total
nickel grade of 13.5%. At this time, no test work has been conducted to determine the
variability of concentrate grade with changing head grade, as a result the Project is
assumed to produce a constant concentrate.
Assays performed on the two concentrates confirmed that most of the nickel is present
as awaruite, and this information was provided for the study. Approximately 95 to 98% of
the total nickel in the concentrates considered for the Nickel Value in Use Study is
awaruite. The major species present in the 14.7% and 4.2% total nickel concentrates
considered in the study are then: 18.5% and 5.8% awaruite; 60% and 61% iron oxides;

and 15% and 31% gangue material, respectively. The major gangue species present in
the concentrate is likely serpentine. The projected process concentrate, with 13.5% total
nickel, will likely have a composition that falls between the Nickel Value in Use Study’s
concentrate compositions.
The third-party results state that both concentrates would make a desirable feed to any
ferronickel or nickel pig iron (NPI) plant. Higher-grade concentrates may be fed to
sulphide smelters.

Infrastructure and service requirements to support the mining and processing operations
are summarized below:
 administrative and mine dry complex

 accommodations camp and ancillary facilities
 ancillary buildings (lab, cold storage, waste management, etc.)
 fuel storage and distribution
 maintenance complex (truck shop, wash, tire change, warehouse)
 on-site roads interconnecting facilities
 off-site power supply and distribution
 water supply and distribution
 surface water management
 sewage and waste management
 TMF
 off-site access road and concentrate load out area.
The general arrangement of the mine site is presented in Figure 18.1.
18.1 SITE DEVELOPMENT

The location of site surface infrastructure and access roads for the PEA were defined
based on preliminary topographic data (contours, water bodies, roads and railways),
limits imposed by the location of the pit, as well as visual observations from a site visit.
Site preparation will consist of the removal of trees, clearing and grubbing of areas that
will accommodate the crusher area, process mill, thickeners, administration/
accommodations buildings and the maintenance complex. Sites will be levelled and
graded only in the areas where construction will take place. Cut-and-fill will be utilized
where large, level areas are required.
A total area of 45 ha is estimated to be developed, based from the concept level site
layout plan. The plant site areas will require a geotechnical investigation prior to the next
phase of the Project to determine the suitability of the proposed locations and the types
of material that will be encountered.

Figure 18.1 Decar Project Site Plan
E 344000 E 346000 E 348000 E 350000
N
Ultimate Tailings
N 6085000
Starter Tailings
Explosive
Fuel Open Storage
Ultimate
N 6083000
Tailings Dam Storage Pit

Lower
Baptiste
Lake
Truck &Warehouse
Overburden
Stockpile
Mill Buildings Crusher Area FSR
Middle
Coarse Ore nnector Leo
Thickeners Co
Stockpile
Substation Concentrate Load Out

Lab Upper
Mine Dry Building Baptiste
Parking Lake
Lot
Metres Sewage
Treatment Administration
N 6081000
0 500 1000 1500 Plant Building

Construction
Camp Area

18.2 BUILDINGS
18.2.1 SERVICE AND ADMINISTRATIVE BUILDINGS

The following service and administrative buildings are included to support the Project:
 administration building
 mine dry
 truck shop and warehouse
 laboratory
 cold storage
 waste management building
 guard house
 explosive storage.
The administration complex (100 m by 30 m) and mine dry (50 m by 30 m) will be

located in a common area to house offices, workstations, training room as well as men’s
and women’s dry facilities.
A maintenance complex (165 m by 30 m) will be located near the primary crusher area to
provide servicing facilities for mine equipment and will include a truck shop, truck wash,
tire change and warehousing. The truck shop will include seven heavy duty repair bays
and one light vehicle repair bay, as well as typical weld, tire, lubrication and wash bays.
Other support buildings included as part of the Project include a laboratory (30 m by
15 m), cold storage facility (65 m by 15 m), solid waste management building and a
guard house.
18.2.2 ACCOMMODATIONS CAMP

The permanent accommodation camp will be built with modular units to house up to 275
personnel at a time. The camp will initially accommodate part of the workforce during
the construction phase and then to partially house staff during the operations phase of
the Project, based on the following:
 Sixty percent of the management staff will come from Fort St. James and beyond
and will require camp accommodation. Forty percent of management staff are
assumed to live within the vicinity of the mine site and within daily commuting
distance.
 Provisions will be made at site to accommodate 100% of labour employees
working on a rotational basis.

The camp complex will consist of two-story dormitory, with standard “jack and jill” style
rooms containing a double bed and a semi-private bathroom. The camp’s core complex
will house the kitchen and dining complex, recreational facilities, fitness room, laundry
facilities and office facilities.
18.3 SERVICES
18.3.1 WATER SUPPLY AND DISTRIBUTION

Supply of fresh water will be drawn from Upper Baptiste Lake located southeast of the
plant site. The fresh water intake system will consist of a pump house located on the
shore of Upper Baptiste Lake, a submerged intake pipeline, and a buried discharge
pipeline to the plant site. The feasibility of utilizing Upper Baptiste Lake as a water supply
source should be further reviewed during the prefeasibility study with respect to
sustainability of yield, water quality, as well as environmental and permitting
considerations.
Fresh water will be pumped from Upper Baptiste Lake to an atmospheric vented tank.
Fresh water will be distributed by pumps for potable water feed, process water makeup,
gland seal water, reagents makeup, and for general use. A portion of the process water
tank will also be allocated for firewater use.
Fresh water for potable water use will be treated via multimedia filtration and
disinfection. Treated water will be distributed in a piping ring to serve all potable water
users in all facilities. The main users of potable water include the workshops, the
administration building, accommodations camp, washrooms, and safety showers in the
process mill.
Firewater will be piped to all main facilities via buried underground fire water ring mains
around each of the facilities. In addition, all buildings will be equipped with hose
cabinets and supplemented with hand held fire extinguishers of two types—general
purpose extinguishers for inside plant areas and dry type extinguishers for inside
electrical and control rooms. Ancillary buildings will be provided with automatic wet
sprinkler systems throughout the buildings.
18.3.2 SEWAGE TREATMENT

Sewage generated at the construction/accommodation camp and plant site area will be
collected via an underground sanitary sewer network to a common location where it will
be treated by a sewage treatment plant. Treated sewage is expected to be discharged to
the environment.
Modular construction will be considered with all modules used for the construction camp.
Modules will be removed after the construction period so that the remaining system can
be optimized to service the process plant.

Sludge generated as a by-product of the treatment of sewage will be disposed off-site by
a licensed contractor.
18.3.3 WASTE MANAGEMENT

All solid wastes, with the exception of domestic waste, will be collected and transported
off-site by a licensed contractor for appropriate recycle and disposal. Domestic wastes
generated on-site at the administration and accommodations areas will be incinerated
on-site.
To facilitate the collection of solid wastes for off-site disposal, collection and sorting
areas will be provided within a dedicated solid waste management building. The waste
management building will allow storage of solid waste for a duration of up to one month.
No long-term, on-site storage areas were included as part of the Project.
18.3.4 FUEL STORAGE AND DISTRIBUTION

Fuel for haul trucks, light vehicle fleet and ancillary facilities will be supplied from above-
grade diesel fuel and gasoline storage tanks located at the plant site near the truck shop.
The fuel tanks will provide sufficient storage for up to 10 days of operation. The fuel
storage system will include loading and dispensing equipment, conforming to regulations,
and located in a contained area to control fuel spillage. A fuel dedicated service truck
will transport diesel to the mining equipment.
A seven-day supply of propane will also be in included for heating of the process plant
and ancillary buildings.
Capital costs were developed based on four, 400 m3 diesel storage tanks and one, 35 m3
gasoline storage tank, contained in a bermed area.
18.3.5 COMMUNICATIONS
On-site and off-site communications for the Project will incorporate proven and reliable
systems to ensure that personnel at the mine and plant sites have adequate data, voice,
and other communications channels available. The major features of the communication
system will include a Voice over Internet Protocol (VoIP) telephone system, Ethernet
cabling for site infrastructure, wireless Internet access, two-way radio and satellite
television. A cellular signal tower is proposed for the site to allow for cell phone
capabilities.

18.4 POWER SUPPLY AND DISTRIBUTION
The production level load for the Project is approximated in Table 18.1.
Table 18.1 Project Power Demand

Estimated
Load
Area (MW)
Process Mill 92.5
TMF 11.1
Mine and Site Services 2.2
Total Power Demand1 118.0
Note: 1Includes 10% design factor
18.4.1 OFF-SITE POWER SUPPLY

As the base case for the PEA, the power supply for the Project is proposed to be obtained
from BC Hydro via a connection to the transmission system at the existing GLN
Substation, a main BC Hydro 500 kV trunk line (Figure 18.2), located southeast of the
site.
The transformer station will reduce the power supply voltage to 230 kV, prior to
transmission to site. The proposed 230 kV power transmission line corridor is
preliminarily approximated at 140 km in length. The length of the transmission line and
corridor will be subject to change upon refinement of the power supply configuration in
future phases of the Project. This would include an evaluation of alternate power supply
options as well as the evaluation of the transmission line corridor routing based on
environmental, social/heritage as well as technical and constructability considerations.
The preferred power supply option will also be subject to a Systems Impact Study by BC
Hydro.

Figure 18.2 Glenannan Substation Location and Conceptual Transmission Line Routing
Kilometres
N 0 10 20 30
Decar
Project Site
Trembleur
Lake
Rubyrock Lake
Provincial Park
Stuart
Babine Lake
Lake Fort St.
James
Sutherland River
Provincial Park
Sutherland River Park e

and Protected Area Lin
i on
iss
16 sm
an
Tr
V
0k
23
Glenannan
Substation 500 kV 16
Francois
Lake
18.4.2 ON-SITE POWER DISTRIBUTION

The incoming 230 kV overhead transmission line will tie into the main substation at the
Project site, which will contain circuit breakers, disconnects and step down transformers.
Site power will be distributed at 25 kV primarily through a combination of overhead

transmission lines and Teck cables to the process mill, the primary crusher area,

maintenance complex, explosives storage area, TMF, and around the rim of the open pit.
In-plant emergency generators will be located near areas with critical loads. The diesel
powered, emergency generators will be distributed around the plant to pick up the critical
loads via transfer switches.
18.5 SURFACE WATER MANAGEMENT

Surface runoff that has come in contact with the processing mill, open pit, stockpile and
the other plant site facilities will be collected via a series of ditches and channels to a
sedimentation pond, prior to being recycled back as makeup to the process mill to the
maximum extent possible. Excess water from sedimentation pond will be discharged to
the environment, meeting surface discharge standards. Based on preliminary acid/base
accounting tests completed for the project, the potential for metal leaching and acidic
runoff is considered low. Therefore, the only contaminant of concern considered in the
surface runoff that will require treatment in the sedimentation pond is total suspended
solids (TSS).
As per typical best design practices, the collection ditches will be required to convey the
1-in-100 year, 24-hour storm event. Sedimentation ponds will be required to detain the
1-in-10 year, 24-hour storm event, with a spillway to accommodate the 1-in-200 year
event.
Surface water run-off from catchments above the plant site facilities will be conveyed in
diversion channels, to divert away as much uncontaminated water as possible, and
minimize surplus water volume in the water management circuit. Diverted freshwater will
be returned back to natural drainage channels further downstream of the impact areas.
Diversion channels will be required to convey the 1-in-100 year, 24-hour storm event.
Non-process wastewater generated within the plant site will be collected and recycled
back to the process mill as makeup. Wastewater from workshops or maintenance areas
will pass through an oil/water separator prior to discharging to the wastewater collection
network.
18.6 TAILINGS MANAGEMENT FACILITY

a large alpine valley. Other potential locations were assessed at a preliminary level
within a 5 km radius; however, they provided a much lower ratio of “tailings storage” to
“dam fill” volume. As such it was determined the alpine valley location provided the most
cost efficient option for tailings storage within the study area.
For the first 19 years of operations, the TMF will store all of the milled tailings. For years
20 to 24, the tailings will be stored in the quarry which will be developed to provide
rockfill for the tailings dam construction. It is proposed the tailings dam be constructed
as a standard earthfill retention structure with a low permeability core. A starter dam will
be constructed to contain the initial two years of tailings. The TMF dam will be raised

annually using the downstream method of construction. No physical or chemical test
work has been carried out on the tailings material. Since the waste rock, which is
essentially low-grade material, has a very low potential for acid generation and metal
leaching, it is reasonable to assume the tailings material will be similar in nature.
The mineralized material will be milled at the process plant. The waste material (tailings)
will be in the form of a slurry, which will be thickened to 65% solids (by weight) prior to
being pumped up to the TMF. It is proposed the tailings will be pumped through two, 910
mm (36 in) diameter HDPE pipelines to the TMF.
The ultimate TMF design is based on a mining rate of 40 Mt/a over a 19-year period. The
total tailings volume generated was calculated at 300 Mm3. There may be a
consolidation effect given the maximum thickness of the tailings fill (250 m), however
this was not included (conservative assumption) in our estimate. The ultimate dam
elevation will be 1,400 m with a 10 m wide crest. The upstream and downstream slopes
were designed at 2H:1V and 1.75H:1V, respectively.
A smaller starter TMF was also sized based on a two-year capacity for initial capital cost
estimating purposes. The crest elevation of the starter dam will be 1,285 m. It has a
designed storage capacity of 22.8 Mm3.
The tailings pipelines will be positioned around all sides of the tailings pond to allow for
spigotting from any location. This will help to maximize storage capacity in the TMF.
The TMF will have diversion ditches constructed around the perimeter to divert clean run-
off from the nearby mountain slopes away from the tailings containment area. The
diverted runoff will be sent to a collection pond downstream of the TMF in order to settle
out suspended solids prior to discharge back into the environment.
Water will be reclaimed for reuse as process water in the plant site using a floating pump
barge. It is estimated that one, 610 mm (24 in) diameter HDPE pipeline will be required
to handle flow of reclaim water back to the plant site.
Any seepage emanating from the TMF is expected to have a low acid generation and
metal leaching potential. Seepage will report to a collection pond located downstream of
the TMF. All TSS will be settled out prior to discharge to the environment.
The remaining tailings generated in years 20 to 24 will be deposited in the quarry. This
quarry will be developed to supplement the rockfill material needed to construct the
tailings dam. The volume of the quarry is estimated at 110 Mm3 which equals the
remaining storage requirement for the tailings. The TMF will contain 300 Mm 3 and the
quarry will contain 110 Mm3 for a total of 410 Mm3. No consolidation factors were
added which will provide some conservatism to the estimated storage capacities of the
TMF and quarry.

Figure 18.3 Tailings Management Facility
E344000 E346000
Metres
N 6085000
N 0 250 500 750 1000
Ultimate
Tailings
Footprint
Starter
Tailings
Footprint
Ultimate
Tailings
N 6083000
Dam
East
Diversion
Starter Ditch
Tailings
Dam
West Diversion
Ditch
WASTE ROCK
The source of the waste rock material will come from the open pit development which will
continue each year over the LOM. The waste rock will essentially be comprised of below-
grade or barren peridotite. Volumetrically minor quartz monzonite and mafic dykes
comprise the balance of the gange. Preliminary test results (Caracle Creek) indicate acid
generation and metal leaching potential are relatively low and should be manageable
during project development.
No waste rock dump will be constructed at this mine site. Due to a shortage of clean
rockfill for construction of the TMF dam and the mine access roads and pads, it is
proposed to use all of the waste rock from the open pit as a construction material. In

conjunction, a quarry will be developed to supplement the required volume of rockfill
material for the tailings dam construction.
18.7 ROADS, SHIPPING AND LOGISTICS
18.7.1 ON-SITE ACCESS ROADS

On-site roads will be gravel surfaced, 12 m in width for on-site and secondary roads and
25 m in width for haul roads, with ditches on both sides for drainage. Approximately
5 km of on-site and secondary roads will be required to provide access around the
crushed ore stockpile, process mill, thickeners, maintenance facilities, main substation,
administration, accommodations area as well as the explosive storage facility.
Approximately 9.6 km of haul roads will be required to interconnect the open pit to the
overburden stockpile, primary crusher, and TMF.
18.7.2 OFF-SITE ACCESS ROADS

The Project site is currently accessible by road from the community of Fort St. James.
The route to the site from Fort St. James is described on Section 5.1 and illustrated in
Figure 18.4.
A shorter route of 121 km has been identified as the base case for movement of
persons, equipment and materials to site. It uses most of the old route along Highway
27, the Tachie Road, Leo Creek FSR, Leo-Kazcheck FSR and a portion of the Leo-
Sakenichie FSR, but eliminates the need to go up to Leo Creek by providing a new bridge
crossing at a location south of the existing clear span bridge. Work would involve
construction of a 7 km section of new road joining the Leo-Sakenichie FSR to the Leo
Middle FSR Connector, and a new bridge crossing in the vicinity of the Dzitl’ainli (Middle
River) First Nations settlement. A level crossing would be provided where the new
section of road crosses the CN Rail railway line which runs along the eastern bank of the
river at this point. Portions of the existing roads would also need to be upgraded. The
estimated travel time from Fort St. James using this shorter route is 2 hours.

Figure 18.4 Existing and Proposed Routes from Fort St. James to the Project Site
Kilometres
N 0 10 20 30
t io Lake
Tchen
Leo Creek
Mt. Milligan
Project
Inzan
a Lak
e
Middle River
Decar Project Site
ke
r La
b leu
m
Tre
Te
zz
ero
nL
ak
Tachle e
Pin
ch ie L
Sunnyside ake
Leo Creek FSR
Tachie Road Pinchie
Hwy 27
Stuart
Leo Middle FSR Lake
Option 1 New Road
Railway Fort St. James
18.7.3 LOGISTICS
Based on available population figures for persons living within the vicinity of the mine site
and the presence of other mining ventures under consideration in the general area, it is
assumed that 60% of employees will come from Fort St. James and beyond. Temporary
camp facilities will be provided at the mine site during the construction period. With a
12-hour shift schedule during operations, a daily commute to and from Fort St. James
would not be conducive to good operations. A 275-person camp will be provided at site
to accommodate 100% of shift employees and 60% of staff employees. Fort St. James
will be used as a collection point from which persons will be bussed to and from site
based on shift rotation schedules.
No airstrip will be provided at site. There is an existing airstrip at Fort St. James from
which light aircraft and helicopter services can be accessed. The Prince George Regional
Airport is 160 km southeast of Fort St. James along Highways 27 and 16. A helipad will
be provided at site for emergency use.

Concentrate will be transported by trucks from the load out building at site to a
concentrate transload facility located adjacent to the CN Rail railway line near the Middle
River, a trip distance of approximately 15 km. At the transload facility, concentrate will
be off-loaded and transferred to rail cars for shipment to Prince Rupert, the port of
export. The 85 km section of rail line from the proposed concentrate transload facility to
the Fort St. James railway station is currently out of service and will require rehabilitation.
At the concentrate load out building on site, product storage capacity equivalent to 30
days of production will be available. Based on project volumes, 12 to 16 loads (45 t
payload per trip) will be transported each day. It is assumed that truck haulage will be
contracted.
The concentrate transload facility will be a covered shed also providing storage capacity
for 1,500 m3 or 7 days of production volume. A wheel loader will be used to transfer
product to rail cars, to maintain the storage stockpile and for clean-up of spills. The
transload facility is assumed to be owner-operated and will be manned by two equipment
operators and two helpers. Based on product volumes, six to seven rail cars (100 t
capacity) will be loaded each day.
The Port of Prince Rupert was selected as the base case for shipping of concentrate,
based on its relative proximity to Asia, its direct connection to the CN Rail railway network
and its capacity for growth. Currently, Prince Rupert has no facilities to handle bulk
mineral concentrates. The Gateway 2020 Port Development initiative by the Prince
Rupert Port Authority includes plans for terminals for bulk and general cargo.
Materials, equipment and consumables for construction, as well as operating supplies

will be delivered to site by road, rail, or a combination of both depending on the origin of
the incoming freight. The CN Rail railway network directly accesses the Port of Prince
Rupert and Port Metro Vancouver. CN Rail provides access from its wider North
American network to an intermodal terminal in Prince George, 160 km southeast of Fort
St. James. Both road (Highways 16 and 27) and rail service exist between Prince George
and Fort St. James. CN Rail currently provides service out of its Fort St. James station
three times per week, but with several new mining projects under consideration in the
general area, it is expected that service frequency will be adapted to meet demand.

19.0 MARKET STUDIES AND CONTRACTS
To evaluate the sales potential of concentrate products from the Project, Cliffs
commissioned several scoping study level studies to evaluate the technical, economic
and marketing considerations in placing two potential concentrates into the existing
nickel market.
The two concentrates were generated by Cliffs at SGS in Lakefield, Ontario and are
referred to as Cliffs A and B in this report. Cliffs A has a nickel grade of approximately
15%, whilst Cliffs B has a nickel grade of approximately 4%. Analytical and mineralogical
test work undertaken as part of this study confirms that the nickel mineralization in both
concentrates is awaruite, which is a naturally occurring metallic nickel iron alloy.
Magnetite is the dominant mineral present in the concentrate.
There is no direct analogy that can be made between the awaruite concentrate and
conventional sales of mineral concentrates to downstream smelters or treatment plants.
It is noted, however, that a parallel can be drawn to nickel sulphide concentrate for Cliffs
A, and a high-grade saprolite for Cliffs B.
Hatch was engaged to complete a technical and economic “Value in Use” assessment
(Hatch 2012a) of both Cliffs A and B concentrates and the following pyro-metallurgical
processing options were assessed as a part of this study:
 ferronickel smelters – low- and mid- (iron) reduction

 NPI smelters – blast furnace and electric arc furnace (EAF) – high (iron)
reduction
 sulphide smelters – roast reduction sulphide smelter (RRSS) and flash furnace
sulphide smelter (FFSS).
The key outcomes from the scoping level study to assess the potential to place the two
potential Decar concentrates into the existing nickel market are summarized below:
 Both Cliffs A and B are suitable and potentially desirable feed for any ferronickel
plant.
 Cliffs A would also be a suitable feed for a sulphide smelter, albeit more
desirable feed to RRSS than FFSS owing to the overall higher recovery of nickel.
Cliffs B is considered to have a nickel grade that is too low for feed to any
sulphide smelter.
 Cliffs B is suitable feed for NPI plants in China, albeit the value in use is lower at
36% of the London Metal Exchange (LME) price quoted for nickel. Cliffs A is
unsuitable for NPI use owing to its high nickel grade.
First Point Minerals Corp. 19-1 1191600400-REP-R0001-05A

 While both Cliffs A and B concentrates are versatile in their potential application,
considerable work will be required to convert potential end users from their
existing raw material source. Also, all options will require some level of
modification to smelter operating procedures and in some cases changes to
current product specifications to accommodate Cliffs’ concentrates.
 Analytical results presented no known impurities that would prove to be
unacceptable for pyro-metallurgical processing of either Cliffs A or B. However,
the nickel grade of each of the concentrates defines which processing route
may be applicable for the respective concentrate.
 Small scale smelting test work of Cliffs’ concentrates was completed at Mintek
in South Africa. These tests showed that the concentrates smelted and formed
separate slag and metal phases at temperatures of 1,550 to 1,600°C, which is
similar to conventional ferronickel smelting. The chrome levels in the
concentrates highlighted some potential issues with slag metal separation at
low iron reduction levels, which will require additional investigation in the next
study phase. This is not seen as a significant issue, as although the preliminary
smelting tests were completed at a scale that was too small to obtain proper
phase separation the concentrates will be a small component of any blended
feed to a ferronickel smelter. However, further test work on larger concentrate
samples and blended feeds under conditions similar to target end use
operations is recommended.
 The impact of chrome levels in the Cliffs’ concentrates will require detailed
investigation, particularly if a dedicated (standalone) smelting option is
evaluated as a potential development scenario for the Project.
 Economic “Value in Use” modelling (Hatch 2012b) was completed to establish
the theoretical values of both Cliffs A and B. Table 19.1 summarizes the
outcomes from Hatch’s techno-economic and market based assessments for
the Cliffs A and B concentrates.
 Cliffs B is not suitable for direct feed to stainless steel operations as it is

deemed to have a nickel grade, which is too low, and impurity levels, which are
too high. Direct feed of Cliffs A to stainless steel plants requires further
evaluation to determine if this is a valid alternative. However, Cliffs A will
certainly require some form of pre-treatment and/or pre-reduction in order for
this to be potentially suitable for stainless steel direct charging. This is because
of the fine size and relatively high impurity levels in the concentrate in
comparison to current stainless steel feed materials.
 A potentially attractive market may be those smelters whose sources of ore are
in decline, but whose fully depreciated plant is still operating well. Further
potential for the concentrate exists in China, where there are 15 newly
announced ferronickel plants, resulting in an additional 35% in global nickel
processing capacity, for which the source of feed material remains unclear.
 To maximize incremental revenue, the optimum target for the concentrate grade
in the base case pricing scenario was between 12.5% nickel to 15% nickel.

Concentrate grades within this range also comply with typical mid-reduction
ferronickel smelter operating parameters.

Table 19.1 Hatch Summary of Economic and Market Based Assessment
FeNi Low FeNi Mid Ni Sulphide Ni Sulphide
Reduction Reduction NPI (RRSS) (Flash)
Concentrate A Concentrate B Concentrate A Concentrate B Concentrate B Concentrate A Concentrate A
Area Units (%) (%) (%) (%) (%) (%) (%)
Calculated Value in Use % of LME 81 43 80 44 36 60 53
Calculated Range % of LME 79 to 84 35 to 54 78 to 83 35 to 55 25 to 49 49 to 73 43 to 66
Market Based Pricing % of LME 50 to 75 25 50 to 75 25 25 50 to 75 50 to 75
Source: Hatch (2012b)

20.0 ENVIRONMENTAL STUDIES, PERMITTING
AND SOCIAL OR COMMUNITY IMPACT
20.1 ENVIRONMENTAL STUDIES

Preliminary environmental baseline studies (EBSs) commenced in 2011 by Klohn
Krippen Berger Ltd. (KCB) to characterize the existing environment and identify key
environmental aspects that could be affected by the Project (KCB 2012a; 2012b). EBSs
were continued and expanded in 2012 using Allnorth Consultants Ltd. (Allnorth). The
EBS components initiated in 2011/2012 are summarized in Table 20.1.
Table 20.1 EBS Components

EBS Component Scope of Work
Climate  A meteorological monitoring station has been installed (August 2012) and is
equipped with sensors for wind direction and speed, precipitation (tipping bucket),
temperature, relative humidity, snow depth and water equivalent (ultrasonic), and
evaporation.
Hydrology and  The Project is located in the Stuart-Takla watershed and encompasses three sub-
Surface Water watersheds associated with Baptiste Creek, Sidney Creek, and Van Decar Creek.
Quality Van Decar Creek and Baptiste Creek flow into Middle River approximately 18 km and
5 km respectively northwest of Trembleur Lake; Sidney Creek flows south from the
western side of Mt. Sidney Williams directly into Trembleur Lake. The outflow from
Trembleur Lake flows southeast into Stuart Lake which is the lowest catchment of
the Stuart-Takla watershed. Baptiste Creek is the main watercourse draining the
Baptiste target. Baptiste Creek receives water from Upper and Lower Baptiste
Lakes, two small headwater lakes and their tributaries, one of which flows adjacent
to the exploration camp (Camp Creek), and a second, Nickel Creek, which drains
Nickel Lake.
 Monthly water quality monitoring has been undertaken at 10 to 15 sites along the
main watercourses and their relative tributaries since May 2011.
 Manual flow monitoring has been undertaken (irregularly) at the surface water
monitoring stations.
 Three hydrometric stations, consisting of a Solonist pressure transducer and stream
stage gauge have been installed since October 2011. Continuous monitoring occurs
every 10 minutes.
table continues…

EBS Component Scope of Work
Hydrogeology  Eight hydrogeologic monitoring wells were installed in September 2012 and
and Groundwater configured with vibrating wire piezometers (VWPs) or data loggers as appropriate.
Quality  Lugeon packer tests and/or falling head tests were undertaken in the hydrogeologic
monitoring wells to determine hydraulic conductivity within the proposed pit area.
 Water quality and levels were collected from five non-vertical, open exploration
drillholes in October 2011.
 Water quality and levels are regularly being collected from the hydrogeologic
monitoring wells.
Acid Rock  218 samples were analysed for a combination of static acid base accounting (ABA)
Drainage parameters, metals, and shake flask extraction (SFE).
(ARD)/Metal
Leaching (ML)
Vegetation  Review of existing information from recognized government databases was
completed.
 White bark pine surveys including geo-referencing and flagging were undertaken over
the areas impacted by the 2011/2012 drill area. Detailed review of information
relating to white bark pine was completed.
 Vegetation surveys over the project footprint were undertaken to develop a database
of rare and invasive plant information, plant tissue, and Terrestrial Ecosystem
Mapping (TEM) ground trothing data.
Terrestrial  Review of existing information from recognized government databases was
Wildlife completed.
 Wildlife habitat mapping has been undertaken.
 Wildlife transects have been seasonally completed as appropriate to determine the
presence of mammal, bird, and amphibian species.
 A winter caribou survey was undertaken in and discussions with regulators regarding
caribou monitoring and management commenced.
Aquatic  Fish population data and stream inventory (fish habitat) assessments were
Environment undertaken in Nickel Creek, Camp Creek, Baptiste Creek, Sidney Creek, Van Decar
Creek, Upper/Lower Baptiste Lake, and Nickel Lake. A limited number of
opportunistic fish tissue samples have been collected and analyzed.
 Spawning assessments were undertaken in Baptiste Creek and Van Decar Creek.
 Sediment quality sampling was undertaken.
 Periphyton, phytoplankton, zooplankton, and benthic invertebrate sampling were
undertaken.
Archaeology  An archaeology overview assessment (AOA) and preliminary field reconnaissance
(PFR) survey was conducted for the 2011/2012 drillhole locations.
20.1.1 EBS STUDY RESULTS AND ENVIRONMENTAL SENSITIVITIES

Available results from the preliminary baseline studies have determined that:
 Geologic materials likely to be extracted from the ground during mining exhibit
both low-sulphide concentrations and high-acid neutralizing capacity and are
expected to be non-acid generating (NAG), with the exception of one lithology
(metasediments) of minor occurrence (Palich 2012).

 The metasediments were found to be enriched in boron, bismuth, and sulphur
with potential enrichment of chromium, nickel, arsenic, and molybdenum.
Bismuth and chromium appear to be present in mineral forms with a low-
leachability potential.
 All rock types were enriched in boron although only the mineral form of boron in
the peridotite, overburden, and metasediments appears to be leachable.
 The overburden, peridotite, quartz monzonite, and mafic dykes exhibited some
enrichment of chromium, nickel, and magnesium with limited leachability
potential.
 Selenium may be enriched in all rock types and may be present in leachable
mineral forms in the meta-sediments, although further assessment using lower
multi-element analysis detection limits is required to confirm this preliminary
assessment.
 Aluminum, chromium, and iron exceeded surface water quality criteria at some
sites but do not appear to pose a barrier for fish species migrating along these
water courses. As many of the sites that exhibited exceedences are distally
located to exploration activities, elevated concentrations of aluminum,
chromium and iron are interpreted to be naturally occurring in the Project area.
 The Lugeon packer tests in the pit area showed hydraulic conductivity (K) within
the pit area to be relatively consistent in the order of 10-9 m/s.
 Groundwater quality exceedances of several parameters have been observed in
the initial samples collected. Total arsenic, cadmium, lead, iron, silver,
vanadium, and zinc exceedences in many samples do not have corresponding
exceedences of the dissolved criteria and are likely linked to the high turbidity of
the samples, which is not uncommon for newly installed groundwater wells.
Dissolved chromium, aluminum, and selenium exceedences are likely reflective
of the natural groundwater conditions and will require on-going evaluation
regarding their significance during future groundwater quality monitoring events.
 Baptiste Creek and Van Decar Creek targets were assessed as having low
archaeological potential.
In addition, the following environmental sensitivities have been identified that are known
or anticipated to be present in the Project area:
 presence of Whitebark pine, which is currently provincially protected and was

recently approved for listing as a federally protected plant species
 presence or potential presence within the Project area of Woodland Caribou,
wolverine, grizzly bear, moose, mountain goat, olive-sided flycatcher, rusty
blackbird, Clark’s nutcracker, and Western toad, which are all provincially
and/or federally protected species
 presence of Bull trout (potentially Dolly Varden) char, which is a provincially
listed species, within creeks and streams, near the Baptiste target.

Any project activities that result in disturbance or habitat destruction for these sensitive
species have the potential to result in elevated risk to the Project and will require a
management strategy/plan to mitigate the risk. Based on the information available to
date, it is not expected that the environmental sensitivities identified will be limiting to
the Project development.
20.1.2 FUTURE WORK

Additional baseline work remains to be completed tor the Project up to prefeasibility so
environmental management plans can be prepared and the EA and permitting process
can commence. This includes, but may not be limited to:
 continuous climate data acquisition

 hydrology and surface water monitoring
 sediment sampling
 hydrogeologic flow monitoring and groundwater quality sampling
 air quality surveys
 kinetic acid rock drainage test work
 physiological terrain assessments
 soil sampling
 TEM
 additional wildlife and fisheries species studies and habitat mapping
 noise studies
 socio-economic studies
 traditional use (TU)/traditional knowledge (TK) and country foods
 site-wide AOA and archaeological impact assessment (AIA)
 evaluation of biologic, physical, and human component risks for the
transmission corridor and other lateral infrastructure.
20.2 SITE MANAGEMENT
20.2.1 WASTE MANAGEMENT

No waste rock dump will be constructed at this mine site. Due to a shortage of clean
rockfill for construction of the TMF dam and the mine access roads and pads, it is
proposed to use all of the waste rock from the open pit as a construction material.
All domestic waste generated over the course of the Project is proposed to be incinerated
on-site, as per typical mining operations in northern BC.

Collection and treatment of sewage will be required in two areas; at the
construction/accommodation camp and the process plant. The sewage is proposed to
be treated by an above-grade, mechanical treatment system. Treated sewage is
expected to be discharged to the environment with the opportunity to recover the effluent
as makeup water once the process plant comes online. Sludge generated as a by-
product of treatment is assumed to be trucked away by a licensed contractor for
appropriate disposal.
Hazardous petrochemical wastes that will require collection and disposal include waste
oil, filters, hydraulic oil, and glycol. Waste oil will be collected in above grade tanks within
a lined containment area and be used as a fuel source for the on-site incinerator. All
other petrochemical wastes will be stored on site at the waste management facility and
final disposal will be contracted to a qualified hazardous waste disposal service.
Hazardous liquid wastes such as laboratory chemical wastes and paints will be collected
and stored on site at the waste management facility, with final disposal off site by a
licensed contractor. Other liquid wastes such as impacted storm water runoff and
equipment and floor wash down water from both process and non-process areas will be
collected and recycled as makeup water to the process plant, with excess reporting to the
TMF for storage and ultimate use as makeup for the process plant. No liquid wastes
shall be released to the environment.
20.2.2 TAILINGS DISPOSAL

a large alpine valley. Other potential locations were assessed at a preliminary level
within a 5 km radius; however, they provided a much lower ratio of “tailings storage” to
“dam fill” volume. The tailings dam is proposed to be designed as a conventional low
permeability earth core structure, with a cut-off trench to bedrock. The ultimate dam
elevation will be 1,400 m with a 10 m wide crest with a designed storage capacity of
300 Mm3; the tailings dam will collect tailings over Years 1 to 19. A smaller starter TMF
was also sized based on a one-year capacity for initial capital cost estimating purposes.
The crest elevation of the starter dam will be 1,285 m. It has a designed storage
capacity of 22.8 Mm3.
The tailings pipelines will be positioned around all sides of the tailings pond to allow for
spigotting from any location. The TMF will have diversion ditches constructed around the
perimeter to divert clean runoff from the nearby mountain slopes away from the tailings
containment area. The diverted runoff will be sent to a collection pond downstream of
the TMF in order to settle out suspended solids prior to discharge back into the
environment.
Any seepage emanating from the TMF is expected to have a low acid generation and
metal leaching potential. Seepage will report to a collection pond located downstream of
the TMF. All TSS will be settled out prior to discharge to the environment.
The remaining tailings generated in Years 20 to 24 will be deposited in the quarry. This
quarry will be developed to supplement the rockfill material needed to construct the

tailings dam. The volume of the quarry is estimated at 110 Mm3 which equals the
remaining storage requirement for the tailings.
20.2.3 WATER MANAGEMENT

Based on the preliminary hydrological and hydrogeological data available for the Project
setting, the following describes the recommended water management plan for the site.
The management plan is based around current industry best management practices to:
 control surface water in order to prevent pollution of clean or non-impacted

water resources
 divert excess runoff and groundwater ingress that may interfere with mine
operations
 control exfiltration from the TMF to minimize potential pollution of surface water
and groundwater resources
 control erosion of the site to limit sediment runoff that may impact receiving
waters.
During the operations phase of the Project, impacted water—where impacted water is
defined as water that comes into contact with the processing mill, open pit, ore stockpile
and the other plant site facilities—will be collected from the various sources and recycled
back as makeup to the process mill, with excess being discharged to the environment,
meeting surface discharge standards.
Surface water runoff from catchments above the open pit, TMF, plant site, and
overburden stockpile areas will be collected in diversion channels, to divert away as
much uncontaminated water as possible, and minimize surplus water volume in the
water management circuit. Diverted freshwater will be returned back to natural drainage
channels further downstream of the impact areas.
The TMF area will play a key role in the water management strategy, as the TMF pond will
be used to provide the majority of the source water for the process mill via the water
reclaim system. Seepage collection ponds will be constructed downstream of the tailings
dam to collect and return impacted water to the TMF.
Surface runoff from the plant site, including administration and workshop areas, as well
as other mine infrastructure, such as the overburden stockpiles, access road, and
transmission lines will be will be collected and routed through a sedimentation pond for
treatment prior to discharge to the environment.
Groundwater ingress into the open pit will be collected and pumped into the process
makeup tank or process tailings pump box where it will be transferred to the TMF for
storage and reuse, with excess transferred to the sedimentation pond prior to discharge
to the environment.

Though the majority of the makeup water required for processing will be provided via the
TMF, periodic fresh water makeup may be required. An intake of fresh water supply will
be considered for the project from Upper Batiste Lake or local groundwater sources. The
fresh water supply will be also be used as the feed source for potable uses on site and
top-up for firewater.
20.3 PERMITTING REQUIREMENTS

In BC, proposed mining projects must undergo an EA prior to obtaining the required
operating permits. The EA process can take place under the Canadian Environmental
Assessment Act and/or the BC Environmental Assessment Act or as part of the Mines Act
permitting process. The key features of the EA include:
 identifying and assessing potential environmental, social, economic, heritage,

and health impacts
 identifying means through which to mitigate adverse effects and enhance
positive effects
 predicting whether there will be significant adverse effects after mitigation
 providing opportunities for First Nations, federal, provincial and local
governments, stakeholders, special interest groups, and members of the public
to learn about the Project, identify potential issues, and provide input to
potential avoidance and/or mitigation measures
 incorporating social and environmental factors into proponent and government
decision making processes.
The agencies responsible for coordinating EA processes in BC include the BC

Environmental Assessment Office (EAO), the Canadian Environmental Assessment
Agency – Pacific Yukon Region, and the Ministry of Energy and Mines for the Mines Act
process. It is expected that the Project will require EA review under the BC Environmental
Assessment Act, Canadian Environmental Assessment Act, and the Mines
Act/Environmental Management Act. Specifically it is likely that a federal authorization
pursuant to Subsection 35(2) of the Fisheries Act for the HADD of fish habitat, Section 32
of the Fisheries Act for the destruction of fish by means other than fishing may be
required for components of the potential project; and that this will trigger the requirement
for a comprehensive study (which is applicable to new metal mines with a daily
production capacity of 3,000 t/d or more). In addition to the general EA requirements,
under Section 16 (1) and 16 (2) of the Canadian Environmental Assessment Act, a
comprehensive study requires the consideration of the following factors during the
review:
 environmental effects of the project, including the environmental effects of

malfunctions or accidents that may occur in connection with the project and any
cumulative environmental effects
 the significance of the effects

 technically and economically feasible mitigation measures
 the purpose of the project
 alternatives to, and technically and economically feasible alternative means of
carrying out the project
 the need for, and the requirements of a follow-up program
 the capacity of renewable resources likely to be significantly affected to meet
present and future needs
 public participation during the review and opportunities by the public to
comment on the Comprehensive Study Report
 any other factors deemed to be required by the responsible agency or Minister.
At the end of March 2012, the federal government announced new EA legislation
intended to streamline and reduce duplication in the EA process; EA applications now will
have a legislated timeframe of 24 months. In addition, projects will be assessed by a
single agency—either federal or provincial but not both.
Cliffs has initiated informal discussions with key BC regulatory authorities regarding
future permitting requirements for the Project, but has not commenced the EA or
permitting process.
20.4 PERMITTING PROCESS

Under Section 10 of the Mines Act, a Mines Act permit must be obtained and appropriate
reclamation security paid before any mine operation can commence. Applications for a
Mines Act permit are submitted to the Chief Inspector of Mines and forwarded to the
chair of the Regional Mine Development Review Committee (RMDRC). Mines Act permits
are normally issued with provision for reassessment following five years of operation.
Submission of an annual mine plan and reclamation report is required as a standard
permit condition to update reviewers on the project status and compliance. With a view
to increasing permitting efficiency and facilitating review by First Nations and other
interested parties, the BC Ministry of Energy and Mines and Natural Gas is now
encouraging the submission of joint Mines Act/Environmental Management Act permit
applications.
If a project receives approval following the EA, the proponent must still obtain any other
required permits or authorizations (e.g., water licences, timber cutting licences, mine
permits or waste management permits). In general, the provincial and federal EA
processes must be completed before the respective jurisdictions can issue permits,
licences, or other authorizations required in order to allow project development to
proceed. However, the Concurrent Approval Regulation under the BC Environmental
Assessment Act allows for the concurrent review of provincial permits and approvals at
the time of filing. The regulation applies to almost all provincial permits, authorizations,
and approvals to undertake works that are within the scope of the assessment under the
BC Environmental Assessment Act; the Concurrent Approval Regulation does not apply to

federal permits. Table 20.2 and Table 20.3 describe the provincial and federal
authorizations and permits that may typically be required for a proposed mining project.
Table 20.2 BC Provincial Authorizations and Permits

BC Government Permits/Authorizations Enabling Legislation
Permit Approving Mine Plan and Reclamation Program Mines Act
(Mine Site – Initial Development)
Amendment to Permit Approving Mine Plan and Reclamation Mines Act
Program (Pre-production)
Program (Bonding)
Program (Mine Plan - Production)
Permit Approving Mine Plan and Reclamation Program Mines Act
(Gravel Pit/Wash Plant/Rock Borrow Pit)
Mining Lease Mineral Tenure Act
Water Licence – Notice of Intention (Application) Water Act
Water Licence – Storage and Diversion Water Act
Water Licence – Use Water Act
Water Licence – Construction of fences, screens and fish or Water Act
game guards across streams to conserve fish or wildlife
Water Licence – Alteration of Stream or Channel Water Act
Authority to Make a Change In and About a Stream – Water Act/Water Regulation
Notification
Authority to Make a Change In and About a Stream – Approval Water Act/Water Regulation
Authority to Make a Change In and About a Stream – Terms Water Act/Water Regulation
and Conditions of Habitat Officer
Occupant Licence to Cut – Access Road Forest Act
Occupant Licence to Cut – Mine Site/Tailings Impoundment Forest Act
Occupant Licence to Cut – Gravel Pits Forest Act
Occupant Licence to Cut – Borrow Areas Forest Act
Road Use Permit (existing FSR) Forest Act
Heritage Investigation and Inspection Permits Heritage Conservation Act
Alteration Permit Heritage Conservation Act
Special Use Permit – Access Road Forest Practices Code of British
Columbia Act
Licence of Occupation – Staging Areas Land Act
Licence of Occupation – Pump House/Water Discharge Line Land Act
Licence of Occupation – Borrow/Gravel Pits Land Act
Surface Lease – Mine Site Facilities Land Act
Waste Management Permit – Effluent Discharge Approval Environmental Management Act
(Sediment, Tailings and Sewage)
Waste Management Permit – Air Emissions Approval Environmental Management Act
(Crushers, Ventilation, Dust)
Waste Management Permit – Refuse Environmental Management Act
Special Water Generator Permit (Waste Oil) Environmental Management Act
table continues…

BC Government Permits/Authorizations Enabling Legislation
Hazardous Waste Generator Registration and Transport Environmental Management
Licence Act/Hazardous Waste Regulations
Sewage Registration Environmental Management Act
Camp Operation Permits (Drinking Water, Sewage Disposal, Health Act/Environmental
Sanitation and Food Handling) Management Act
Waterworks Construction and Operating Permits Drinking Water Protection Act
Fuel Storage Permit Environmental Management Act
Highway Access Permit Highway Act
Food Service Permit Health Act
Table 20.3 Federal Authorizations and Permits

Federal Government Permits/Authorizations Enabling Legislation
Section 35(2) Authorization for any HADD Fisheries Act
Fish Habitat Compensation Agreement Fisheries Act
Schedule 4/5 Metal Mining Effluent Fisheries Act/Environment Canada
Regulations
Radioisotope Licence Atomic Energy Control Act
Nuclear Substances and Radiation Devises
Regulations
Stream Crossings Authorization Navigable Waters Protection Act
Transportation of Dangerous Goods Permit Transportation of Dangerous Goods Act,
Transportation of Dangerous Goods Regulations
Explosives Factory Licence Explosives Act
Explosives Use Magazine Licence Explosives Act
Radio Licences Radio Telecommunications Act
20.5 COMMUNITY
Local communities and neighbours’ opinions are critical to Cliffs’ decision-making
process in all aspects of operations. Each operation is an integral part of local
communities and First Nations. Enduring relationships must be built with community
stakeholders based on transparency, mutual understanding and respect, active
engagement, and a long-term commitment to shared value.
Cliffs has developed an effective public and First Nations engagement to foster its
relationships with local communities to maximize shared value and minimize adverse
effects based on principles of sustainable development and corporate responsibility. The
external relations management plan is defined in three separate stages: mid-stage
exploration, advanced exploration, and EA. The overall objectives of the Decar External
Relations Plan are to:

 engage in consistent and respectful dialogue with decision-makers,
stakeholders, and First Nations on the Project
 ensure that stakeholder and First Nation engagement strives to maximize
mutual understanding of interests, values, priorities, and concerns related to the
Project
 involve stakeholders, First Nations, and decision makers in collaborative
dialogue on project planning
 maximize the potential economic, social, and environmental value from the
Project to the local and broader public interest.
20.5.1 FIRST NATIONS

The Project lies exclusively in the traditional territory of the Tl’azt’en Nation, which has
been the sole focus of Aboriginal engagement and consultation to date. Cliffs signed an
exploration MOU for the Project on May 22, 2012. The MOU formalizes protocols for
continuing the cooperative working relationship established between the Tl’azt’en Nation
including constituent Keyoh families, First Point, and Cliffs regarding exploration activities
for the Project. The MOU confirms the Tl’azt’en Nation’s support for the exploration
activities and acknowledges as well as describes how project activities will be managed
with respect to:
 cultural and environmental interests of the Tl’azt’en communities

 ongoing community consultation activities
 socio-economic benefits to the Tl’azt’en Nation communities through community
contribution funds and business opportunities.
The MOU also establishes processes for the future negotiation of a comprehensive
Impact and Benefits Agreement should the Project proceed to mine development,
emphasizing the mutual respect and positive long-term relationship between the parties
during all phases of the Project.
20.6 MINE CLOSURE AND RECLAMATION

The Project mine closure and reclamation plan will be developed to meet the regulatory
requirements under the BC Mines Act and accompanying Health, Safety and Reclamation
Code for Mines in British Columbia, which provide the legislative framework for the
obligations of Cliffs for decommissioning, closure, reclamation and rehabilitation for the
Project. Prior to commencement of any work a Mines Act permit must be obtained and
the appropriate reclamation security paid. As a condition of receiving a Mines Act permit,
Cliffs will be required to file a closure plan and post financial security in an amount and
form acceptable to the Chief Inspector of Mines.
Cliffs mine closure and reclamation plan will aim to reclaim and rehabilitate the Project
footprint to ensure that, upon termination of mining, land, watercourses and cultural

heritage resources will be returned to a safe and environmentally sound condition and to
an acceptable end land use that considers previous and potential uses. Components of
the mine closure and reclamation plan will address the following:
 End Land Use Objectives: End land use objectives will be developed based on
returning the Project area to an acceptable end land use that considers previous
and potential users.
 Productivity or Capability Objectives: Productivity or capability objectives, how
they will be achieved, and how reclamation success will be measured, will be
defined.
 Long-term Stability: Long-term stability, both physical and chemical, must be
adequately addressed for all structures and discharges from the mine site.
 Treatment of Structures and Equipment: To the extent possible all structures
and/or equipment will be removed, or alternatively disposed of following mine
decommissioning. All at-grade concrete will be broken, dressed with soil, and
vegetated.
 Tailings Reclamation: Proposed tailings reclamation has not been confirmed at
this stage of the Project but will be evaluated at future stages to define
anticipated final impoundment configuration, any proposed re-sloping, post-
closure water management, details of soil replacement on tailings dam faces
and the impoundment surface and a description of proposed re-vegetation
methods.
 Open Pit Reclamation: A reclamation plan for the open pit has not been defined
at this stage of the Project but will be evaluated at future stages to plan for
flooding at closure (if relevant), details of water quality and water management,
and reclamation/re-vegetation measures to be undertaken within pit areas.
 Watercourse Reclamation: Re-establishment of post-mine watercourses will be
undertaken as appropriate. Water structures not needed for longer-term water
management will be rehabilitated to ensure proper site drainage.
 Road Reclamation: Roads will be re-vegetated where applicable and
decommissioned to ensure geotechnical and hydraulic stability.
 Disposal of Toxic Chemicals: Chemicals and reagents will be taken off-site using
the same modes of transport, containment, and emergency response as utilized
during site operations.
 Operational and Post-closure Monitoring: A long-term monitoring plan will be
developed to address geotechnical, ARD/ML, re-vegetation, sedimentation or
other long-term project risks.
Once a decision has been made to permanently close the site, it is anticipated that the
major closure activities that have not been completed progressively during the LOM
would be completed within a period of approximately three years. Closure costs have
been estimated based on evaluation of comparable mining projects in Canada and are

estimated at $51.5 million. These costs have been included in the financial evaluation of
the Project.

21.0 CAPITAL AND OPERATING COSTS
21.1 CAPITAL COSTS

The capital cost estimate for the Project was prepared in accordance with standard
industry practices applicable to a PEA level study. The cost estimate (direct costs,
indirect costs, Owner’s costs and pre-production costs), including contingency, was
prepared to meet or exceed the accuracy level target of ±30%. All capital costs are
estimated in Canadian dollars as the base currency.
A Level 2 WBS was used to produce the structure of the capital cost estimate. A
summary of the capital cost estimate is shown in Table 21.1. The total estimated capital
cost for the Project is approximately $2.147 billion.
Table 21.1 Capital Cost Summary (Level 1)

WBS WBS Level 1
Level 1 WBS Level 1 Cost Summary
01 Geology 0.8
02 Mining 394.0
04 TMF 404.9
Total Direct Capital 1,549.8
11 Provisions 353.3
Total Indirect, Owner's and Provisions 597.0
Total Capital Cost 2,146.8

21.1.1 ESTIMATING METHODOLOGY
The methodology and accuracy used to determine the capital costs for this PEA meet or
exceed the required minimum standard and in many instances satisfy the minimum
requirements dictated for a prefeasibility study. The methodology employed for this PEA
is governed by Cliffs' Capital Investment System (CIS). The methodology and required
accuracy is aligned with industry standards and the Association for the Advancement of
Cost Engineering (AACE®) International Cost Estimate Classification System. The
accuracy of the capital cost estimate by Level 1 WBS is shown in Table 21.2
The methodology stated above is applied where data sources are available; however an
assessment method is also used, where applicable, based on consultant judgement and
experiences.

Table 21.2 WBS Level 1 Capital Cost Estimate
WBS WBS Level 1 Weighted
Level 1 WBS Level 1 Cost Summary Accuracy Accuracy
No. Description ($ millions) Methodology (%) (%)
01 Geology 0.8 Assessed->Factorized 30 0.01
02 Mining 394.0 Calculated 20 4.39
03 Processing Plant 473.4 Factorized 20 5.28
04 TMF 404.9 Factorized->Calculated 25 5.64
05 On-site Infrastructure and Utilities 199.2 Factorized->Budget Price 25 2.78
06 Off-site Infrastructure 75.0 Factorized->Budget Price 25 1.05
07 Environment Management 1.5 Assessed->Factorized 30 0.02
08 External Relations 1.0 Assessed->Factorized 30 0.02
Total Direct Capital 1,549.8 - - -
09 Indirect Capital Cost 126.1 Assessed->Factorized 30 2.11
10 Owner's Cost 117.6 Factorized->Calculated 20 1.31
11 Provisions 353.3 - - -
Total Indirect and Owner's 597.0 - - -
Total Capital Cost 2,146.8 - Overall Accuracy 23

21.1.2 BASIS OF ESTIMATE
A Level 2 WBS was developed for the capital cost estimate established utilizing Tetra
Tech’s previous project data, factoring from an in-house database for similar operations,
and inputs provided from internal investigations and external agencies. The base date
for the capital cost estimate is January 2013. The capital cost estimate is calculated in
Canadian dollars.
The following subsections outline the components of the capital cost estimate.
DIRECT COSTS
A total estimate of $1.5 billion is presented in the capital cost estimate as direct costs for
the Project. The cost of resources, materials, equipment, and facilities/services
expended to deliver the production facility include:
 geology
 mining
 processing plant
 TMF
 on-site infrastructure and utilities
 off-site infrastructure
 environment management
 external relations.
The details of the direct capital cost are defined in the following subsections.
Geology
Geology work is under the responsibility of Caracle Creek. The estimate of engineering
support and services required to optimize the pit design is considered in the geology
capital costs which includes:
 drill core storage

 drill core area
 field instruments
 vehicles
 sustaining capital.

Mining
The mining capital costs were estimated from Tetra Tech’s in-house database of similar
projects and experience in similar types of studies. Scaling and escalation factors were
applied where required. The mining capital costs include:
 haul roads
 mineralized material stockpiles
 waste dumps
 mining equipment
 mine services
 mine buildings.
Processing Plant
The process capital costs were estimates from Tetra Tech’s in-house database of similar
projects. These costs include process engineering, all the mechanical equipment, steel
structure, mechanical process piping, materials, and controls. The costs were based on
an 80,000 t/d flotation plant and were scaled to account for the additional size of the
Project to approximately 114,000 t/d. The processing capital costs were adjusted to
January 2013 relevant costing. The process capital costs include:
 mineralized material stockpile and crushing

 grinding
 mag separation
 gravity separation
 thickening and filtration
 tailings pumping
 concentrate storage
 control system.
Tailings Management Facility

The capital costs of the tailings dam and related facility were estimated from Tetra Tech’s
in-house database of similar projects and experience in similar types of studies. Scaling
and escalation factors are applied where required. The TMF capital costs include:
 stripping/grubbing
 dam fill (22.8 Mm3)
 diversion ditches
 tailings pipeline

 tailings dam
 quarry development
 water management system
 collection pond.
While estimating the cost of the TMF, the following assumptions were made:
 clearing by a forestry company at no cost, in exchange for the timber

 depth of stripping is assumed to be 0.3 m thick within the dam footprint
 no cost assumed for the delivery of waste rock from the open pit for dam
construction; only cost is to level and compact rockfill
 additional cost for quarrying and hauling rock for dam construction
 compacted core includes downstream filter units
 cost based on an average cross sectional area of 6 m2
 tailings will be pumped using two 36" diameter HDPE pipelines with a length of
5 km.
On-site Infrastructure
On-site infrastructure costs are referenced from Tetra Tech’s in-house database of similar
projects and experience in similar types of studies. Scaling and escalation factors were
applied where required. Site development, roads, and surface water management were
approximated from site plan. The references are stated in capital cost documents,
detailed supporting data is fully traceable and accessible for future reference. On-site
infrastructure capital costs include:
 site development (preparation, roads, drainage)

 power supply and distribution
 buildings
 fuel storage and distribution
 utilities and services (water, sewage, communication, etc.).
Off-site Infrastructure
The cost of off-site infrastructure including the upgrade 63 km of site access road;
rehabilitation of rail line, other site roads, bridges, and building facilities is estimated
engineered sketches and unit costs from Tetra Tech’s in-house database of similar types
of studies. Off-site infrastructure capital costs include:
 roads
 product transfer, storage and load out

 utilities
 buildings
 equipment.
Technology and Information Systems

Information technology (IT) scope includes data/voice network communications,
business information systems, user equipment (personal computers, cell/satellite
phones, etc.), reporting, and remote workforce strategy.
Budgetary cost estimates are provided; current supplier and vendor relationships will be
used to provide equipment, software licenses, and consulting labour.
Environment Management and Closure

Environment management and closure capital costs include the pre-production costs for
environmental baseline studies, permitting/approvals cost, and closure cost estimates
after mine operation shutdown. The estimate is based on Tetra Tech’s experience on
similar type of studies. Environment management and closure includes:
 EBS
 environmental approvals and permitting
 hydrologic monitoring equipment
 hydrogeological monitoring wells
 climate monitoring equipment
 dust monitoring equipment
 closure bond.
ESTIMATES FOR EXTERNAL RELATIONS CAPITAL COSTS

Estimation of costs for external relations capital costs is based on information provided
by Arbutus Consulting and Tetra Tech’s experience on stakeholder engagement
(government, media, community, First Nations) and recent agreements in BC and
Ontario. During the project execution phase, the following is considered for cost
estimation:
 Stakeholder Engagements (government, media, community, First Nation): Costs

of external consultants, negotiations with First Nation, high-level studies,
publications/community information meetings, etc.
 Community, Labour and Business Development: Labour market development
and business development
 Project Related Studies: EA (TU/TK, socio-economic, other effects assessment)

 First Nation Agreements and Royalties: Project agreements are negotiated with
First Nations whose legal rights will be impacted by the Project (recent
agreements in BC and Ontario contain revenue share or payments equivalent to
1.1 to 1.3% of operating cash flow or 1.8 to 3.4% of net earnings).
INDIRECT COSTS
A total estimate of $126.1 million is presented in the capital cost estimate as indirect
costs for the Project. Indirect costs are costs associated with the provision of:
 engineering services for project execution – 5% of applicable direct capital cost

 procurement – 0.2% of applicable direct capital costs
 construction management – 2% of applicable direct capital costs
 temporary construction facilities, equipment, consumables and services
 first fills and initial spares – 0.5% of applicable equipment direct capital costs
 freight – 2% of applicable equipment and material costs.
An allowance for the cost of vendor representatives and their expected durations on-site
during construction is included in the indirect cost estimate.
OWNER’S COSTS
A total estimate of $117.6 million is presented in the capital cost estimate as Owner’s
costs for the Project. The determination of Owner’s costs was completed by estimating
the expected effort required by the Owner’s task and a Level 2 WBS definition, and by
reference to other similar projects. The following Level 2 WBS Owner’s tasks were
estimated by calculation of the work effort:
 data network and wireless

 operational software such as enterprise resource planning.
The following Level 2 WBS Owner’s tasks were scaled from previous projects and/or the
direct capital costs based on information from previous similar projects:
 Owner’s construction team – 10% of engineering, procurement, and

construction management costs (EPCM) indirect costs
 staff required for start-up and commissioning – approximately 25% of typical full
year labour cost
 closure bond
 permits and licensing
 recruitment, training, and site visits
 environmental baseline monitoring.

PRE-PRODUCTION COSTS
Pre-production costs of $1.420 billion are all costs incurred prior to the beginning of
operations, and include commissioning costs. Pre-production costs will include direct,
indirect and Owner’s costs. Operational labour incurred during year one with an
accumulated production rated at 50% of nominal annual capacity is not included in pre-
production costs.
SUSTAINING CAPITAL
Sustaining capital of $726.5 million is considered to be any capital costs incurred for the
replacement of equipment that occurs after the start of production up to the end of mine
life. Working capital has not been included in the capital cost estimate and will be
considered in the financial analysis.
CONTINGENCY
A contingency allowance of $353.3 million (23% of the direct capital costs and 20% of
the total capital costs) is included in the capital cost estimate to cover costs that will be
incurred, but at this time cannot be identified as the Project is still in its early
development phase. The contingency is an allowance for undefined items, or work which
will have to be performed, or elements of cost which will be incurred within the defined
scope of work covered by the estimates that cannot be explicitly foreseen or described at
this time because of lack of complete, accurate, and detailed information.
Table 21.3 outlines how the contingency was calculated. The overall contingency is
deemed appropriate for the level of detail of the estimate and the methodology for
acquiring costs. The estimate exceeds the minimum standard and therefore carries a
reduced contingency.
Table 21.3 Contingency Analysis

Percentage Weighted Contingency
of Total Contingency Contingency Contribution
WBS Level 2 Capital Cost (%) (%) ($ millions)
Geology 0.05 15.0 0.01 0.12
Mining 21.97 20.0 4.39 78.80
Processing 26.40 20.0 5.28 94.68
TMF 22.58 25.0 5.64 101.23
On-site Infrastructure 11.10 20.0 2.22 39.83
Off-site Infrastructure 4.18 15.0 0.63 11.26
Environmental Management 0.08 15.0 0.01 0.22
External Relations 0.06 20.0 0.01 0.20
Indirect 7.03 15.0 1.05 18.92
Owner’s 6.56 7.5 0.50 8.82
Total 20.00 353.25

21.2 PRE-PRODUCTION AND SUSTAINING CAPITAL
Pre-production cost is defined as the capital costs required before the actual production
(Years -2, -1, and Year 1 of the Level 2 WBS for both direct and indirect costs). See Table
21.4 for the breakdown of the pre-production cost.
In Year 1 of operation the expected annual production is 50% due to continued

construction and ramp up throughout the year. In this study, during Year 1 of operation,
there has been no inclusion of operational labour costs as pre-production costs. All Year
1 operational labour costs have been included in the operating cost estimate.
Table 21.4 Pre-production Cost (Level 1)

WBS Level 1
WBS WBS Level 1 Cost Summary
Level 1 No. Description ($ million)
Direct Pre-production Costs
01 Geology 0.6
02 Mining 156.0
04 TMF 78.5
Total Direct Pre-production Costs 970.0
Indirect, Owner’s and Provisions Pre-production Costs
11 Provisions 217.5
Total Indirect and Owner's Pre-production Costs 414.2
Total Pre-production Cost 1,384.2
A breakdown of the sustaining capital costs are shown in Table 21.5.

Table 21.5 Sustaining Capital (Level 1)
WBS WBS Level 1
Level 1 WBS Level 1 Cost Summary
Direct Sustaining Capital
01 Geology 0.2
02 Mining 238.1
04 TMF 326.4
06 Off-site Infrastructure -
08 External Relations -
Total Direct Sustaining Capital 580.0
Indirect, Owner’s, and Provisions Sustaining Capital
09 Indirect Capital Cost -
11 Provisions 133.2
Total Indirect and Owner's Sustaining Capital 182.7
Total Sustaining Capital 762.5
21.3 OPERATING COSTS

The operating cost estimate was prepared to meet or exceed the accuracy level target of
±30 to ±35%. The unit operating cost by operating cost area is shown in Table 21.6.
Table 21.6 Unit Operating Cost by Operating Cost Area

Unit Cost
Area ($/t milled)
Infrastructure and Administration 0.803
Mine 2.862
Plant 3.250
Total 6.915
An OBS was used to organize the operating cost estimate. The OBS is also used to
organize the fixed (labour) costs associated with operations as well as the variable
(consumables) cost. The description of the OBS variable cost breakdown is shown in
Table 21.7.

Table 21.7 Variable Cost Breakdown by OBS
Infrastructure and Administration
Business System Network
Site Infrastructure
Environment
Site Camp
Logistics
Fixed Overhead and Sundries
Mine - Technical Services
Geology/Geotechnical
Mine - Operations
Fuel
Lube
Drilling
Explosives
Dewatering
Mine - Maintenance
Undercarriage/Tire
Equipment Maintenance
Plant - Technical Services
TMF
Laboratory
Plant - Operations
On Site - Consumables
On Site - Energy
Off Site
Plant - Maintenance
On Site - Equipment Maintenance
Off Site
Key assumptions and parameters that were considered in the calculation of the
operating cost include:
 development drilling and mine lease costs = approximately Cdn$2.250 million

per year
 diesel fuel costs = Cdn$1.00/L
 electricity consumption costs = Cdn$49.8/MWh
 business applications (IT) costs = Cdn$4.17 per year
 concentrate truck haulage round trip distance of 15 km to transload facility
included in operating costs
 concentrate rail transport to BC port and shipping costs excluded; this cost is
included in the selling costs of finished concentrate product.

A summary of the operating cost, by OBS, is shown in Table 21.8. The total estimated
operating cost for the Project over 24 years is approximately $6.398 billion.
Table 21.8 Operating Cost by OBS

Area Cost
Infrastructure and Fixed (Labour) ($000) 206,334
Administration Variable (Consumables) ($000) 536,966
Subtotal ($000) 743,300
Mine – Technical Services Fixed (Labour) ($000) 63,294
Subtotal ($000) 173,214
Mine – Operations Fixed (Labour) ($000) 390,302
Subtotal ($000) 1,717,284
Mine – Maintenance Fixed (Labour) ($000) 83,064
Subtotal ($000) 757,507
Plant - Technical Services Fixed (Labour) ($000) 46,416
Subtotal ($000) 65,632
Plant – Operations Fixed (Labour) ('000) 232,049
Variable (Consumables) ('000) 1,625,446
Subtotal ('000) 1,857,496
Plant – Maintenance Fixed (Labour) ($000) 110,943
Subtotal ($000) 1,084,051
Fixed - Subtotal Fixed Subtotal ($000) 1,132,402
Fixed ($/t material) 1.046
Fixed ($/t mineralized material) 1.224
table continues…

Area Cost
Variable - Subtotal Variable Subtotal ($000) 5,266,082
Variable ($/t material) 4.866
Variable ($/t mineralized material) 5.691
Grand Total Total ($000) 6,398,484
Total ($/t material) 5.912
Total ($/t mineralized material) 6.915
The methodology and accuracy used to determine the operating costs for the EA meet or
exceed the required minimum standard. The accuracy of the operating cost estimate by
OBS is shown in Table 21.9.
Table 21.9 Organizational Breakdown Structure – Overall Accuracy

Total
Operating Weighted
Costs Accuracy Accuracy
Area ($000) Methodology (%) (%)
Administration Fixed (labour) 206,334 Calculated 25 0.8
Variable (consumable) 536,966 Assessed - Factorized 25 2.1
Mine – Technical Fixed (labour) 63,294 Calculated 20 0.2
Services Variable (consumable) 109,920 Assessed 30 0.5
Mine – Operations Fixed (labour) 390,302 Calculated 20 1.2
Variable (consumable) 1,326,982 Factorized - Calculated 25 5.2
Mine – Fixed (labour) 83,604 Calculated 20 0.3
Maintenance Variable (consumable) 674,443 Assessed 30 3.2
Plant – Technical Fixed (labour) 46,416 Factorized 30 0.2
Services Variable (consumable) 19,216 Factorized 30 0.1
Plant – Operations Fixed (labour) 232,049 Factorized 30 1.1
Variable (consumable) 1,625,446 Factorized 30 7.6
Plant – Fixed (labour) 110,943 Factorized 30 0.5
Maintenance Variable (consumable) 973,108 Factorized 30 4.6
Total Operating Costs 6,398,484 Overall Accuracy 27.5%
21.3.1 BASE DATE AND EXCHANGE RATES

All operational costs for the Project are in Canadian dollars. No foreign exchange was
required in preparation of the operating costs estimate. The operating costs base date is
January 2013, as most costs were established through the latter part of 2012.
21.3.2 ESTIMATE STRATEGY APPLICABLE TAXES

Individual disciplines determined the operating costs for their respective areas. These
costs were aggregated into the OBS structure according to fixed (labour) and variable

(consumables) categories. In all areas of the OBS, the required labour for operations
including operators, supervision, management, and administration was identified and a
salary commensurate with Cliffs' salary structure was applied. Consideration for potential
labour shortages was not factored into the salary and hourly costs for the workforce.
Variable costs for different OBS areas utilized different strategies. In the administration
OBS section, IT items were incrementally defined to allow for costing by single check
pricing and comparison to existing Cliffs' taconite mining operations. Site infrastructure
and logistics utilized material take-offs (MTOs) from engineered sketches that identified
proportions for assessment, factorization, and budget pricing from vendors. The site
camp costs were factorized from database information based on logistics and human
resource inputs used to determine the required camp accommodation needs. In the
mining OBS sections, variable costs were derived from inputs based on the mine plan
and schedule. Major mining equipment and supporting equipment were determined by
establishing a mine plan. A haulage analysis was performed utilizing the haul road layout
and road sections. The roads were designed not to exceed a 10% grade using LiDAR
based topography. Mining variable costs were calculated based on the usage time for all
equipment particularly haul trucks, drills, and loaders. Plant variable costs were primarily
factorized from database sources. Processing unit operating costs were scaled from in
house data base information and used as a multiplier based on required quantities.
Operating cost inputs for the Project will be affected by provincial and federal sales taxes.
Effective April 1, 2013, the 12% Harmonized Sales Tax (HST) consisting of 7% provincial
and 5% federal will no longer apply on taxable supplies of personal property or services
made in BC or to personal property or services imported or brought into BC. Instead, as
of that date, the 5% Goods and Services Tax (GST) would apply to such taxable supplies
and importations.
Goods imported into Canada are subject to the GST or the federal part of the HST, except
for items specified as non-taxable importations. After April 1, 2013, goods in BC will be
subject to the 5% GST. The GST/HST is calculated on the Canadian dollar value of the
imported goods, including duty and excise tax, and is collected at the border at the same
time as these duties and taxes.

22.0 ECONOMIC ANALYSIS
A PEA should not be considered a prefeasibility or feasibility study, as the economics and
technical viability of the Project have not been demonstrated at this time. The PEA is
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. Furthermore, there is no certainty
that the conclusions or results as reported in the PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
The Decar awaruite concentrate is a unique product, neither being extracted from a
nickel laterite or a nickel sulphide deposit. Despite the low grades, a high concentrate
grade of 13.5% can be generated through simple beneficiation techniques of magnetic
and gravity separation. There are currently no known direct existing awaruite
concentrates in the market. Figure 22.1 provides a good point of reference to determine
a possible entry point for the Decar material to the merchant market.
Figure 22.1 Nickel Market and Point of Entry for Decar Concentrate
Source: Hatch (2012)
Due to the nature of Decar’s awaruite mineralized deposit, it is likely that test work and
subsequent study work beyond that normally expected at a prefeasibility study stage will
be required.
An economic evaluation of the Project was carried out by Tetra Tech incorporating all the
relevant capital, operating, working, sustaining costs, and royalties. The economic

evaluation was based on 100% ownership of the Project and represents the merit of the
Project on a standalone basis. No considerations for potential joint venture ownership or
partnership option were considered. As well, no consideration for carry forward liabilities
other than capital costs related to the Project were considered.
The evaluation was based on a pre- and post-tax financial model and was calculated in
Canadian dollars. The nickel price used for the base case is US$9.39/lb or
Cdn$21,342/Mt, using the three-year trailing average (as of February 19, 2012). The
exchange rate was set at US$0.97:Cdn$1.00. For the 24-year mine life and 925 Mt
resource inventory, the following pre-tax financial parameters were calculated using the
base case nickel price and a discount rate of 8%:
 15.7% IRR
 $1,125 million NPV.
KPMG prepared a tax expense evaluation for the post-tax economic evaluation of the
Project with the inclusion of applicable income and mining taxes (see Section 22.4).
The following post-tax financial parameters were calculated using the base case nickel
price and a discount rate of 8%:
 12.8% IRR
 6.4-year payback on $2,147 million capital
 $579 million NPV.
22.1 BASIS OF EVALUATION
22.1.1 FINANCIAL MODEL

The revenues projected in the cash flow model were based on the data presented in
Table 22.1.

Table 22.1 Basis of Financial Analysis
In Pit Indicated Resource Grade 0.119
In Pit Inferred Resource Grade 0.114
LOM (including Indicated and Inferred Resources) years 24
Total Project Capital Cost Cdn$ million 2,147
Overall Operating Cost Cdn$/t milled 6.92
Currency Exchange Cdn$/US$ - 0.97
The production schedule has been incorporated into the 100% equity pre-tax and post-
tax financial model to develop annual recovered nickel production from the relationships
of tonnage processed, head grades, and recoveries.
Initial and sustaining capital costs have been incorporated on a year-by-year basis over
the mine life and deducted from the net revenue to determine the net cash flow before
taxes.
22.2 ROYALTIES
A royalty of 1.5% of NSR value is included in every year of mine operation. The royalty
includes contracted royalty as per the First Point and Cliffs agreement as well as any
negotiated royalty payable to other parties.
22.3 SMELTER TERMS

An independent marketing study conducted by Hatch Consulting Engineering for the
nickel alloy awaruite indicated that a market based price of 75% of the LME could be
achieved. This does not include value for other minerals in the mineralized material and
strictly based on the nickel value in the awaruite component. The financial analysis
utilizes a payable NSR based on 75% of the nickel price of US$9.39/lb. The resulting
realized nickel price used in the NSR calculation is US$7.04.

22.4 PRE-TAX FINANCIAL EVALUATIONS
Table 22.2 illustrates the pre-tax NPV for the Project at variable discount rates. The
Project IRR is shown as 15.7%.
Table 22.2 Pre-tax NPV and IRR

Item Amount
Pre-tax and Pre-finance NPV @ 16% ($ million) (23)
Figure 22.2 shows the NPV for the various discount rates for the base case scenario.
Figure 22.2 Pre-tax NPV versus Discount Rate for Base Case
22.5 PRE-TAX SENSITIVITY ANALYSIS

Several parameters were varied by ±25% to examine the sensitivity of the NPV of the
Project as the discount rate changes. The capital and operating costs, as well as the NSR
(equivalent to direct Ni metal price variation), were individually increased and reduced by
25% off the base case, and the pre-tax results plotted are shown in Figure 22.3.

Figure 22.3 Capital and Operating Cost and NSR Sensitivity – NPV versus Discount Rate
The analysis shows that the Project is most sensitive to variations in the NSR (equivalent
to direct Ni metal price variation). Tetra Tech ran several sensitivity analyses to
determine the effect on key financial metrics if the following basic parameters change:
 the operating costs increased and decreased by 25%

 the capital costs increased and decreased by 25%
 the NSR (equivalent to Ni metal price) increased and decreased by 25%.
The effect of varying the key finaincial parameters resulted in an IRR sensitivity
presented in Figure 22.4.

Figure 22.4 Pre-tax IRR Sensitivity
22.6 POST-TAX FINANCIAL ANALYSIS

KPMG in Toronto was commissioned to prepare a tax expense calculation for the post-tax
economic evaluation of the Project with the inclusion of applicable income and mining
taxes.
The following general tax regime was recognized as applicable at the time of report
writing.
Canadian Federal and BC Provincial Income Tax Regime
The tax calculations are based on the current provisions of the Federal Act, the BC
Income Tax Act and the BC Mineral Tax Act as of the date of this letter and counsel’s
understanding of the current administrative practices of the Canada Revenue Agency and
of the BC Ministry of Finance published in writing by them prior to the date of March 21,
2013. KPMG has computed corporate income and mining taxes on a standalone project
basis with each project year representing a taxation year. The tax computations do not
factor or consider existing tax deductions in First Point or Cliffs, or any tax deductions
generated by corporate general and administrative costs not included in the cash flow
model. All capital costs outlined in the cash flow forecasts, with the exception of the
closure bond, are treated as the acquisition of depreciable property. The closure bond
has been treated as a qualifying deductible operating expense for both income and
mining tax purposes. None of the costs is a Canadian exploration expense.
Consequently, the tax computations assume that there is no refundable BC mineral
exploration tax credit.
Federal and BC provincial income taxes are calculated using corporate rates of 15% for
federal and 11% for BC. An 11% provincial tax rate was used as the February 2013

provincial budget increases the provincial corporate tax rate from 10 to 11%. The new
legislation is scheduled to become effective in April 2013.
BC Mineral Tax Regime
The BC Mineral Tax regime is a two tier tax regime, with a 2% tax and a 13% tax.
The 2% tax is assessed on “net current proceeds”. The 13% tax is assessed on “net
revenue”. KPMG analysed the pre tax cash flow sheet to apply tax deductions
appropriately.
The components of the various taxes that will be payable are shown in Table 22.3.
Table 22.3 Components of the Various Taxes

LOM
Amount
Tax Component ($ million)
Corporate Tax (Federal) 714
Corporate Tax (Provincial) 523
Provincial Resource Tax 722
Total Taxes 1,959
22.7 POST-TAX FINANCIAL RESULTS

Table 22.4 lists the post-tax NPV for the Project at variable discount rates. The Project
IRR is shown as 12.8%.
Table 22.4 Post-tax NPV and IRR

Item Amount
Post-tax and Pre-finance NPV @ 16% ($ million) (215)
Figure 22.5 compares the pre-tax and post-tax NPV for the various discount rates for the
base case scenario.

Figure 22.5 Pre-tax and Post-tax NPV versus Discount Rate
22.8 POST-TAX SENSITIVITY ANALYSIS

Several parameters were varied by ±25% to examine the sensitivity of the NPV of the
Project as the discount rate changes. The capital and operating costs, as well as the NSR
(equivalent to direct Ni metal price variation), were individually increased and reduced by
25% off the base case, and the pre-tax results plotted are shown in Figure 22.6.

Figure 22.6 Capital and Operating Costs and NSR Sensitivity – Post-tax NPV versus
Discount Rate
The analysis again shows that the Project is most sensitive to variations in the NSR
(equivalent to Ni metal price). Tetra Tech ran several sensitivity analyses to determine the
effect on key financial metrics if the following basic parameters change:
 the operating costs increased and decreased by 25%

 the capital costs increased and decreased by 25%
 the NSR (equivalent to nickel price) increased and decreased by 25%.

The effect of varying the key financial parameters resulted in the post-tax IRR sensitivity
presented in Figure 22.7.
Figure 22.7 Post-tax IRR Sensitivity
20.00%
18.00%
16.00%
14.00%
I 12.00%
R
10.00%
R
% 8.00%
6.00%
4.00%
2.00%
0.00%
-25% $- 25%
% Change
Base Case Operating Cost Capital Cost NSR
22.9 DISCOUNTED CASH FLOW ANALYSIS

Table 22.5 to Table 22.9 show the discounted cash flow.

Table 22.5 Discounted Cash Flow (Years -2 to 4)
Item Value Units Total Year -2 Year -1 Year 1 Year 2 Year 3 Year 4
Operating Days/Year - - - - - $350 $350 $350 $350

Mining
Mineralized Material - Mt 925.27 - - 20.00 40.00 40.00 40.00
Overburden Material - Mt 70.80 - - 10.23 7.50 8.93 9.27
Total Waste Production - Mt 86.21 - - 5.04 7.32 5.38 5.10
Total Material Mined - Mt 1,082.28 - - 35.27 54.82 54.30 54.37
Strip Ratio - - 0.17 - - 0.76 0.37 0.36 0.36
Processing
Ore Grade 1,182 DTR Ni g/t - - - $971 $1,072 $1,071 $1,064
Recovery 82.0 % - - - 82.0 82.0 82.0 82.0
Concentrate Grade $13.50 % - - - $13.50 $13.50 $13.50 $13.50
Concentrate Production - t 6,643,446 - - 117,959 260,456 260,213 258,513
In situ Metal in Con - t 896,865 37,369 - 15,924 35,162 35,129 34,899
In situ Metal in Con - lb (x 1,000) 1,977,247 82,385 - 35,107 77,518 77,446 76,939
NSR (includes selling cost) $9.39 US$/lb - - - - - - -
Ni Price 21,342 CDN$/Mt - - - 21,342 21,342 21,342 21,342
Decar Realized % of Ni Price 75% - - - 75% 75% 75% 75%
Total Revenue - CDN$ x 1,000 14,355,425 - - 254,890 562,804 562,279 558,604
Royalty
Royalty - CDN$ x 1,000 215,331 - - 3,823 8,442 8,434 8,379
Marketing
Marketing 1% CDN$ x 1,000 143,554 - 2,549 5,628 5,623 5,586
table continues…

Net Revenue Before Operating Costs

Net Revenue Before Operating Costs - CDN$ x 1,000 13,996,540 - - 248,517 548,734 548,222 544,639
Operating Cost
Site Infrastructure and G&A - CDN$/t 0.80 - - 1.32 0.79 0.79 0.79
Mining - CDN$/t 2.86 - - 4.45 2.78 2.75 2.79
Processing - CDN$/t 3.25 - - 4.73 3.20 3.20 3.20
G&A Closure - CDN$ x 1,000 764 - - - - - -
Total 100% CDN$ x 1,000 6,398,484 - - 209,949 270,881 269,540 271,219
EBITDA
EBITDA - CDN$ x 1,000 7,598,055 - - 38,568 277,853 278,682 273,420
Capital Costs – Capitalized
Direct Capital Costs - - - Pre-Production Capital - - -
Geology - CDN$ x 1,000 810 - 630 - - - -
Mining - CDN$ x 1,000 394,016 54,353 78,979 22,626 - 161 118
Processing Plant - CDN$ x 1,000 473,409 283,954 177,724 - - 1,564 -
Tailings Management Facilty - CDN$ x 1,000 404,910 - 63,647 14,829 11,411 14,323 14,735
On Site Infrastructure - CDN$ x 1,000 199,159 98,444 98,444 - - - -
Off Site Infrastructure - CDN$ x 1,000 75,035 40,794 34,241 - - - -
Environment Management - CDN$ x 1,000 1,482 349 - - - - -
External Relations - CDN$ x 1,000 1,000 1,000 - - - - -
Total - Direct Capital - CDN$ x 1,000 1,549,821 478,894 453,664 37,456 11,411 16,048 14,853
Indirect Capital Costs - CDN$ x 1,000 126,114 62,465 63,649 - - - -
Owner's Costs - CDN$ x 1,000 117,570 21,709 46,909 1,963 1,968 2,026 1,979
table continues…

Provisions - CDN$ x 1,000 353,253 104,720 104,412 8,380 3,000 4,078 3,856
Total - Indirect, Owner's, Provision - CDN$ x 1,000 596,937 188,894 214,970 10,343 4,969 6,104 5,835
Capital Cost Total 100% CDN$ x 1,000 2,146,758 667,788 668,635 47,799 16,380 22,152 20,688
Working Capital
Accounts Receivable $18 days - - - 12,570 27,755 27,729 27,548
Inventory $18 days - - - 10,668 14,052 13,986 14,064
Accounts Payable - labour $14 days - - - 1,790 1,790 1,803 1,803
Accounts Payable - goods $35 days - - - 15,656 21,499 21,338 21,499
Accumulated - Working Capital - CDN$ x 1,000 - - - 5,791 18,518 18,573 18,309
Change in working Capital - CDN$ x 1,000 - - - 5,791 12,727 55 (264)
Pre-Tax Cash Flow - CDN$ x 1,000 5,451,301 (667,788) (668,635) (15,022) 248,746 256,475 252,996
Accumulated Pre-Tax Cash Flow - CDN$ x 1,000 - (667,788) (1,336,423) (1,351,445) (1,102,699) (846,224) (593,228)
Tax Expense - CDN$ x 1,000 1,958,796 - - 819 5,697 5,713 5,607
Post-Tax Cash Flow - CDN$ x 1,000 3,492,506 (667,788) (668,635) (15,841) 243,049 250,762 247,389
Accumulated Post-Tax Cash Flow - CDN$ x 1,000 - (667,788) (1,336,423) (1,352,264) (1,109,214) (858,453) (611,064)
- - - - - - - -
PAYBACK - Post Tax
- - - - - - -

Table 22.6 Discounted Cash Flow (Years 5 to 10)
Item Value Units Total Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating Days/Year - - - $350 $350 $350 $350 $350 $350

Mining
Mineralized Material - Mt 925.27 40.00 40.00 40.00 40.00 40.00 40.00
Overburden Material - Mt 70.80 7.71 8.68 9.13 5.06 1.63 0.28
Total Waste Production - Mt 86.21 6.88 5.82 5.52 4.48 2.95 3.02
Total Material Mined - Mt 1,082.28 54.59 54.50 54.64 49.54 44.58 43.30
Strip Ratio - - 0.17 0.36 0.36 0.37 0.24 0.11 0.08
Processing
Ore Grade 1,182 DTR Ni g/t - $1,066 $1,109 $1,150 $1,167 $1,163 $1,175
Recovery 82.0 % - 82.0 82.0 82.0 82.0 82.0 82.0
Concentrate Grade $13.50 % - $13.5 $13.5 $13.5 $13.5 $13.5 $13.5
Concentrate Production - t 6,643,446 258,999 269,446 279,407 283,538 282,566 285,481
In situ Metal in Con - t 896,865 34,965 36,375 37,720 38,278 38,146 38,540
In situ Metal in Con - lb (x 1,000) 1,977,247 77,084 80,193 83,158 84,388 84,098 84,966
NSR (includes selling cost) $9.39 US$/lb -

Ni Price 21,342 CDN$/Mt - 21,342 21,342 21,342 21,342 21,342 21,342
Decar Realized % of Ni Price 75% - 75% 75% 75% 75% 75% 75%
Total Revenue - CDN$ x 1,000 14,355,425 559,654 582,230 603,755 612,680 610,580 616,880
Royalty
Royalty - CDN$ x 1,000 215,331 8,395 8,733 9,056 9,190 9,159 9,253
Marketing
Marketing 1% CDN$ x 1,000 143,554 5,597 5,822 6,038 6,127 6,106 6,169
table continues…


Net Revenue Before Operating Costs - CDN$ x 1,000 13,996,540 545,663 567,674 588,661 597,363 595,315 601,458
Operating Cost
Site Infrastructure and G&A - CDN$/t 0.80 0.79 0.79 0.79 0.79 0.79 0.79
Mining - CDN$/t 2.86 2.81 2.81 2.76 2.66 2.66 2.81
Processing - CDN$/t 3.25 3.20 3.20 3.20 3.20 3.20 3.20
G&A Closure - CDN$ x 1,000 764

Total 100% CDN$ x 1,000 6,398,484 272,015 271,929 269,868 265,906 265,926 272,015
EBITDA
EBITDA - CDN$ x 1,000 7,598,055 295,659 316,732 327,495 329,409 335,532 295,659
Direct Capital Costs - - - - - - - - -
Geology - CDN$ x 1,000 810 - - 45 45 - -
Mining - CDN$ x 1,000 394,016 2,753 539 194 22,043 6,468 7,444
Processing Plant - CDN$ x 1,000 473,409 - 1,564 - - 1,564 -
Tailings Management Facilty - CDN$ x 1,000 404,910 12,073 13,666 14,114 15,662 17,964 17,864
On Site Infrastructure - CDN$ x 1,000 199,159 - 284 284 284 284 -
Off Site Infrastructure - CDN$ x 1,000 75,035 - - - - - -
Environment Management - CDN$ x 1,000 1,482 20 - - - - 20
External Relations - CDN$ x 1,000 1,000 - - - - - -
Indirect Capital Costs - CDN$ x 1,000 126,114 - - - - - -
table continues…

Provisions - CDN$ x 1,000 353,253 3,720 4,047 3,781 8,538 6,309 6,109
Working Capital
Accounts Receivable $18 days - 27,599 28,713 29,774 30,214 30,111 30,421
Inventory $18 days - 14,107 14,132 14,155 14,064 13,866 13,875
Accounts Payable - labour $14 days - 1,816 1,826 1,826 1,826 1,826 1,826
Accounts Payable - goods $35 days - 21,549 21,519 21,511 21,313 20,933 20,935
Accumulated - Working Capital - CDN$ x 1,000 - 18,342 19,500 20,592 21,139 21,218 21,535
Change in working Capital - CDN$ x 1,000 - 33 1,158 1,092 547 78 318
Pre-Tax Cash Flow - CDN$ x 1,000 5,451,301 253,011 272,359 295,227 278,375 294,682 301,765
Accumulated Pre-Tax Cash Flow - CDN$ x 1,000 - (340,217) (67,858) 227,369 505,744 800,426 1,102,192
Tax Expense - CDN$ x 1,000 1,958,796 5,611 6,059 76,540 94,959 108,276 110,365
Post-Tax Cash Flow - CDN$ x 1,000 3,492,506 247,400 266,301 218,687 183,416 186,406 191,400
Accumulated Post-Tax Cash Flow - CDN$ x 1,000 - (363,663) (97,363) 121,324 304,740 491,147 682,547
- - - - Year 7 - - -
PAYBACK - Post Tax
- - - 6.4 - - -


Mining
Overburden Material - Mt 70.80 0.41 0.75 0.16 0.30 0.56 0.16
Strip Ratio - - 0.17 0.10 0.11 0.09 0.09 0.11 0.11
Processing
Recovery 82.0 % - 82.0 82.0 82.0 82.0 82.0 82.0

Ni Price 21,342 CDN$/Mt - 21,342 21,342 21,342 21,342 21,342 21,342
Decar Realized % of Ni Price 75% - 75% 75% 75% 75% 75% 75%
Total Revenue - CDN$ x 1,000 14,355,425 618,980 620,555 612,155 614,780 624,230 626,855
Royalty
Royalty - CDN$ x 1,000 215,331 9,285 9,308 9,182 9,222 9,363 9,403
Marketing
Marketing 1% CDN$ x 1,000 143,554 6,190 6,206 6,122 6,148 6,242 6,269
table continues…


Operating Cost
Mining - CDN$/t 2.86 2.67 2.72 2.71 2.65 2.78 2.78
Processing - CDN$/t 3.25 3.20 3.20 3.20 3.20 3.20 3.20

Total 100% CDN$ x 1,000 6,398,484 266,384 268,216 267,783 265,623 270,602 270,734
EBITDA
EBITDA - CDN$ x 1,000 7,598,055 337,121 336,825 329,068 333,788 338,023 340,450
Direct Capital Costs - - -
Geology - CDN$ x 1,000 810 - - - - - 45
Mining - CDN$ x 1,000 394,016 4,427 65,428 36,030 2,768 26,638 638
On Site Infrastructure - CDN$ x 1,000 199,159 - - - 284 284 284
Environment Management - CDN$ x 1,000 1,482 - - - - 20 -
table continues…

Provisions - CDN$ x 1,000 353,253 5,336 17,774 11,702 5,192 9,998 4,325
Working Capital
Inventory $18 days - 13,900 13,992 13,960 13,857 14,114 14,124
Change in working Capital - CDN$ x 1,000 - 104 (5) (424) 214 251 127
Accumulated Pre-Tax Cash Flow - CDN$ x 1,000 - 1,410,229 1,643,338 1,905,690 2,211,269 2,491,915 2,808,977
Tax Expense - CDN$ x 1,000 1,958,796 111,302 85,211 95,050 109,535 101,813 112,389
Accumulated Post-Tax Cash Flow - CDN$ x 1,000 - 879,283 1,027,181 1,194,483 1,390,527 1,569,360 1,774,032
- - - - - - - -
PAYBACK - Post Tax
- - - - - - -


Mining
Overburden Material - Mt 70.80 0.04 0.02 - - - -
Strip Ratio - - 0.17 0.11 0.09 0.06 0.04 0.02 0.01
Processing
Recovery 82.0 % - 82.0 82.0 82.0 82.0 82.0 82.0

Ni Price 21,342 CDN$/Mt -
Decar Realized % of Ni Price 75% - 21,342 21,342 21,342 21,342 21,342 21,342
Total Revenue - CDN$ x 1,000 14,355,425 75% 75% 75% 75% 75% 75%
Royalty
Royalty - CDN$ x 1,000 215,331 9,403 9,678 9,804 10,056 10,182 10,269
Marketing
Marketing 1% CDN$ x 1,000 143,554 6,269 6,452 6,536 6,704 6,788 6,846
table continues…


Operating Cost
Mining - CDN$/t 2.86 2.82 2.82 2.81 2.85 2.89 2.96
Processing - CDN$/t 3.25 3.20 3.20 3.20 3.20 3.20 3.20

Total 100% CDN$ x 1,000 6,398,484 272,513 272,398 271,957 273,552 275,058 277,869
EBITDA
EBITDA - CDN$ x 1,000 7,598,055 338,670 356,701 365,332 380,118 386,802 389,621
Geology - CDN$ x 1,000 810 45 - - - - -
Mining - CDN$ x 1,000 394,016 11,477 5,241 651 9,783 26,665 8,070
On Site Infrastructure - CDN$ x 1,000 199,159 284 - - - - -
Environment Management - CDN$ x 1,000 1,482 - - - 20 - -
table continues…

Provisions - CDN$ x 1,000 353,253 6,544 5,696 6,163 7,068 6,989 2,814
Working Capital
Inventory $18 days - 14,212 14,229 14,217 14,317 14,401 14,547
Change in working Capital - CDN$ x 1,000 - (83) 934 445 775 354 161
Tax Expense - CDN$ x 1,000 1,958,796 109,574 117,285 120,118 123,584 124,644 130,159
Accumulated Post-Tax Cash Flow - CDN$ x 1,000 - 1,966,682 2,173,880 2,386,254 2,603,252 2,823,004 3,065,155
- - - - - - - -
PAYBACK - Post Tax
- - - - - - -

Operating Days/Year - - - $350 $350 - - - -

Mining
Mineralized Material - Mt 925.27 40.00 25.27 - - - -
Overburden Material - Mt 70.80 - - - - - -
Total Waste Production - Mt 86.21 - - - - - -
Total Material Mined - Mt 1,082.28 40.00 25.27 - - - -
Strip Ratio - - 0.17 - - - -
Processing
Ore Grade 1,182 DTR Ni g/t - $1,330 $1,374 - - - -
Recovery 82.0 % - 82.0 82.0 - - - -
Concentrate Grade $13.50 % - $13.5 $13.5 - - - -
Concentrate Production - t 6,643,446 323,141 210,880 - - - -
In situ Metal in Con - t 896,865 43,624 28,469 - - - -
In situ Metal in Con - lb (x 1,000) 1,977,247 96,174 62,763 - - - -
NSR (includes selling cost) $9.39 US$/lb - - - - -

Ni Price 21,342 CDN$/Mt - 21,342 21,342 - - - -
Decar Realized % of Ni Price 75% - 75% 75% - - - -
Total Revenue - CDN$ x 1,000 14,355,425 698,255 455,679 - - - -
Royalty-
Royalty - CDN$ x 1,000 215,331 10,474 6,835 - - - -
Marketing
Marketing 1% CDN$ x 1,000 143,554 6,983 4,557 - - - -
table continues…


Net Revenue Before Operating Costs - CDN$ x 1,000 13,996,540 680,799 444,287 - - - -
Operating Cost
Site Infrastructure and G&A - CDN$/t 0.80 0.79 0.94 - - - -
Mining - CDN$/t 2.86 3.09 4.12 - - - -
Processing - CDN$/t 3.25 3.20 3.74 - - - -
G&A Closure - CDN$ x 1,000 764 356 311 97

Total 100% CDN$ x 1,000 6,398,484 283,137 222,590 356 311 97 -
EBITDA
EBITDA - CDN$ x 1,000 7,598,055 397,662 221,696 (356) (311) (97) -
Geology - CDN$ x 1,000 810 - - - - -
Mining - CDN$ x 1,000 394,016 276 250 - - -
Processing Plant - CDN$ x 1,000 473,409 782 - - - -
Tailings Management Facilty - CDN$ x 1,000 404,910 3,937 3,937 - - -
On Site Infrastructure - CDN$ x 1,000 199,159 - - - - -
Off Site Infrastructure - CDN$ x 1,000 75,035 - - - - -
Environment Management - CDN$ x 1,000 1,482 - 28 305 310 155 255
Total - Direct Capital - CDN$ x 1,000 1,549,821 4,994 4,215 305 310 155 255
Owner's Costs - CDN$ x 1,000 117,570 2,101 2,109 - - - -
table continues…

Provisions - CDN$ x 1,000 353,253 1,353 1,197 46 47 23 38

Total - Indirect, Owner's, Provision - CDN$ x 1,000 596,937 3,455 3,306 46 47 23 38
Capital Cost Total 100% CDN$ x 1,000 2,146,758 8,449 7,521 351 357 178 293
Working Capital
Accounts Receivable $18 days - 34,435 22,472 - - -
Inventory $18 days - 14,824 11,539 18 15 5
Accounts Payable - labour $14 days - 1,816 1,642 - - -
Accounts Payable - goods $35 days - 22,610 17,240 34 30 9
Accumulated - Working Capital - CDN$ x 1,000 - 24,832 15,129 (17) (14) (5)
Change in working Capital - CDN$ x 1,000 - 445 (9,703) (15,145) 2 10
Pre-Tax Cash Flow - CDN$ x 1,000 5,451,301 388,768 223,879 14,439 (670) (285) (293)
Tax Expense - CDN$ x 1,000 1,958,796 135,038 73,280 (4,233) (3,209) (2,389) -
Post-Tax Cash Flow - CDN$ x 1,000 3,492,506 253,730 150,599 18,672 2,540 2,104 (293)
Accumulated Post-Tax Cash Flow - CDN$ x 1,000 - 3,318,885 3,469,484 3,488,156 3,490,695 3,492,799 3,492,506
- - - - - - - -
PAYBACK - Post Tax
- - - - - - -

23.0 ADJACENT PROPERTIES
Claims adjacent to the Property are held by several private individuals and two
exploration companies, Amarc Resources Ltd. and Stratton Resources Inc. (Stratton)
(Figure 23.1). No information regarding exploration completed recently was available for
the claims held by Amarc Resources Ltd. and by private individuals.
23.1 STRATTON RESOURCES INC.

Stratton hold claims southwest of the Property (Figure 23.1) where the MAC
molybdenum-copper porphyry is located. The copper and molybdenum stockwork
mineralization occurs in alkalic intrusive rocks and hornfelsed volcanic rocks
(www.strattonresources.com).
On October 5, 2012, Stratton announced that nickel-iron-chromium mineralization was

identified in ultramafic rocks at MAC (Stratton news release October 5, 2012). Stratton
identified “numerous outcrop exposures of nickel alloy-bearing grains” (Stratton news
release October 5, 2012).
Stratton also completed a soil sampling survey consisting of 733 samples targeting the
Peak Zone of the molybdenum-copper mineralization (Stratton Resources News Release
November 29, 2012). Anomalous copper and molybdenum samples identified a 600 m
by 200 m target.
On April 24, 2012, Stratton released an Indicated Resource of 70.4 Mt at a grade of

0.063% molybdenum and 0.10% copper and an Inferred Resource of 177.9 Mt at
0.042% molybdenum and 0.05% copper (Stratton news release April 24, 2012).
Caracle Creek was unable to verify the information presented here and this information is
not necessarily indicative of the mineralization on the Property. This report clearly
distinguishes between the information from adjacent properties and the information from
the Property.

Figure 23.1 Map Showing the Ownership of Claims Adjacent to the Decar Property

24.0 OTHER RELEVANT DATA AND
INFORMATION
There is no other relevant data or information to add to this technical report.

25.0 INTERPRETATIONS AND CONCLUSIONS
25.1 GEOLOGY AND RESOURCE ESTIMATE

The Property consists of 60 mineral claims and is located approximately 90 km northwest
of Fort St. James, BC, Canada. Cliffs and First Point are parties to an option agreement
and effective as of September 12, 2011, Cliffs owns 51% interest in the Property.
Nickel is hosted by ultramafic rocks of the Cache Creek Terrane. The nickel alloy
awaruite was first reported in the Decar peridotites in the 1990s. Awaruite forms during
serpentinization of the peridotite.
In 2011, a drilling program consisting of 36 diamond drillholes totalling 11,161 m was

completed. A total of 35 holes were drilled on the Baptiste target and 1 hole was drilled
in the Target B area. All holes showed consistent mineralization in the form of
disseminated awaruite hosted by peridotite. No awaruite exists in various dykes that cut
the peridotite body. In the southwest of the Baptiste area, the mineralization is cut off by
a fault but the mineralization was open in all other directions, including at depth following
completion of 2011 drilling.
The 2012 drilling program consisted of 34 drillholes totalling 16,496 m. The drillholes
defined the northern edge of the mineralized zone at Baptiste, but the zone is open in the
south-east and at depth. In the southwest of the Baptiste area, the mineralization is cut
off by a fault.
During the 2012 drill program, Caracle logging personnel noted 116 occurrences of
apparently fibrous minerals in the drill core in 20 of the 34 drillholes. The total length
fibrous intervals for 116 samples was 178.76 m (but this contains non-fibrous material
within it) and the total length of core drilled in 2012 was 16,496 m. Each occurrence of
the apparently fibrous material occurred over an interval no greater than several
centimetres in thickness. Thus, minor amounts of fibrous material were found relative to
the total length of the 2012 drill core. A total of 29 samples from 8 drillholes were sent
to Actlabs/EMSL for PLM analysis. EMSL identified <0.25% to 64.00 % chrysotile in the
samples that were sent for analysis. The petrographic study of fibrous minerals at Decar
is preliminary and the study is still in progress. The QP believes that it is impossible to
make a quantitative conclusion about the abundance of chrysotile on the Property based
on the limited number of samples analyzed by PLM.
Downhole geophysical surveys were completed on selected holes at Baptiste in order to

determine whether geophysical tools can be used to predict the locations of mineralized
zones. The EarthProbe resistivity and IP survey indicated a general trend of low resistivity
(less than 120 Ohm.m) and high chargeability (greater than 25 mV/V) in association with
the peridotite-hosted awaruite in most boreholes. Clear differences in resistivity were

found between mineralized peridotite and unmineralized cross-cutting dykes. Physical
rock property measurements were completed by DGI. DGI found that the physical
properties show significant contrasts throughout the drillholes. The identified physical
property domains are interpreted to reflect different rock types, in particular the
unmineralized dykes. A clear correlation between the physical rock property signatures
and alteration, structure and geochemistry has not been proven conclusively to date. The
Acoustic and Optical Televiewer results were interpreted to represent structural and
lithologic features.
The 2011 and 2012 drilling data and reassayed core from the 2010 drilling managed by
First Point were used to build a geological model and estimate a mineral resource.
Structural information from the Televiewer survey was also used to refine the geological
model. The resource estimate results are shown in Table 25.1.
1
Table 25.1 Results of the Resource Estimate
Grade Contained
Indicated 1,159,510,000 0.124 1,437,800
Inferred 870,400,000 0.125 1,088,000
Notes: 1 Reported at a cut-off grade of 0.06 DTR Ni%. Mineral resources are not mineral reserves and do
2 Tonnes have been rounded to the nearest 10,000. Grade has been rounded to three significant
digits.
Based on the 2011 and 2012 exploration programs—including diamond drilling and
geophysical surveys—on the metallurgical test work and the 2012 resource estimate,
Caracle Creek concludes that the Property has significant potential for development.
Caracle Creek does not expect any significant risks and uncertainties that could affect
the reliability or confidence in the exploration information, including the results of the
diamond drilling and geophysical surveys, in the mineral resource estimate, or the
projected economic outcomes.
25.2 MINERAL PROCESSING AND METALLURGICAL TESTING

The objective of the scoping study metallurgical testing was to determine the major
mineralization characteristics and metallurgical response of the Decar awaruite deposit.
Tests were conducted to determine the major species present in the mineralization and
their abundance, as well as the association and liberation characteristics of the awaruite.
Further tests were conducted to determine the response of the sample at various grind
sizes to magnetic and gravity separation techniques.
The SGS test work suggested that a simple circuit using rougher magnetic concentration
at a grind size of 600 µm with regrind to 70 µm followed by gravity separation could be
economically viable. This circuit may be able to produce a concentrate with 13.5% total
nickel while recovering 84.7% of the DTR Ni (42.3% total nickel). This circuit was

assumed to recover 82% of the DTR Ni (approximately 41% total nickel) to moderate the
financial analysis.
The recovery methods for the Decar mineralization were selected based on the generic
properties of awaruite: its high magnetic susceptibility and density compared to the
gangue species. The performance of the beneficiation stages were specified based on
the results observed during the bench-scale investigation into recovery of nickel from the
Decar awaruite deposit sample. Comminution, dewatering, and other auxiliary unit
operations were selected based on literature references to generic equipment.
The proposed flowsheet consists of the following units:
 crushing and grinding by gyratory crushers, cone crushers, and ball mills to
600 µm
 magnetic separation
 regrind of magnetic concentrate to 70 µm in tower mills
 gravity concentration of reground magnetic concentrate
 filtering, drying, and rail shipment of gravity concentrate to a west-coast port
 magnetic and gravity tails will be thickened in conventional thickeners, and
deposited in a TMF.
The process flowsheet described in Section 17.0 may produce a concentrate with a grade
of 13.5% total nickel while recovering 75 to 85% of the DTR Ni (approximately 38 to 43%
total nickel). Production of this concentrate grade and recovery is supported by the test
work performed by SGS. The selected final concentrate grade falls between the
concentrate grades evaluated in an independent third-party “Nickel Value in Use –
Market Study” (Hatch 2012a). As both the 4% and 15% concentrates were found to be
valuable to smelters, this project has assumed that the 13.5% product will have the most
beneficial entry into the market.
The performance of all equipment selected is based either on reasonable assumptions or

on the SGS test work. The plant will be designed on the basis that it is possible to
duplicate the results observed during the SP-1 test; see Section 13.0. This flowsheet still
needs to be confirmed by conducting pilot scale tests, including different operating
conditions on a representative sample of the ROM material. Additional studies should be
conducted to determine the optimum operating parameters of all equipment discussed in
this flowsheet.
The ability of this process facility to handle ore blending was not considered due to the
homogenous nature of the mineralization and to the paucity of variability data. Likewise,
the ability of the plant to produce multiple products was not considered – the plant as
designed does not have the ability to produce multiple products.

25.2.1 RISKS
There is a potential for the processing plant to fail to meet the awaruite recoveries
observed during the metallurgical testing and specified in the design basis. This event
may reduce the total value that may be extracted from the Decar awaruite deposit. The
risk can be mitigated by the performance of pilot scale testing including variability tests.
The processing plant may not be able to produce a concentrate of the desired grade. In
this event, the saleability of the product may be threatened or the sale price of the
concentrate may be decreased. Ultimately, this reduces the net value of the Decar
mineralization. This risk can be minimized by the performance of pilot scale testing
including variability tests.
It is not currently known if there have been any previous attempts at recovering nickel
exclusively from an awaruite deposit. As a result, unforeseen complications may arise
which could threaten the economic viability of the Project. This risk can be minimized by
the performance of pilot scale testing including variability tests.
The fibrous variety of serpentine known as chrysotile does occur in the Decar
mineralization. The presence of fibrous minerals may complicate the regulatory and
health and safety needs of the Project. However, the extent of the presence of these
minerals has not been confirmed. During the 2012 drill program, Caracle logging
personnel noted 116 occurrences of apparently fibrous minerals in the drill core in 20 of
the 34 drillholes. Each occurrence of apparently fibrous material occurred over an
interval no greater than several centimetres in thickness. The total length of core drilled
in 2012 is 16,496 m. The existence of chrysotile was confirmed by analyzing suspected
core samples via PLM. Future drilling programs will determine the extent of the fibrous
minerals present in the Decar mineralization.
25.3 MINING
The most pertinent mining data is summarized in Table 25.2.

Table 25.2 General Mine Design Results
In Pit Indicated Resource Mt 730.3
Average Indicated DTR Ni Grade Sent to Mill Ni% 0.119
In Pit Inferred Resource Mt 195.0
Average Inferred DTR Ni Grade Sent to Mill Ni% 0.114
Milling Cut-off Grade (Diluted) Ni% 0.027
Strip Ratio waste:mineralized material 0.17:1.00
Milling Rate Mt/a 40
LOM year 24
Mining Capital Cost – Start-up $ million 156
Total Mining Capital Cost – LOM $ million 394
LOM Operating Cost $/t mined 2.86
It is recommended that a more detailed study of the geotechnical properties of the rock
mass and the hydrogeology of the area be completed, which will enable:
 a more feasible pit design based on the properties of the rock in pit walls
 a more detailed and accurate design for a pit dewatering strategy that will be
able to handle the actual quantities of surface water and ground water that will
flow into the pit during operations.
Rock hardness tests and blasting tests will determine:
 powder factors for blasting

 blasting pattern and blasthole diameter.
LOGISTICS
The permanent accommodation camp will be built with modular units to house up to 275
personnel at a time. Camp requirement assumptions are that 60% of the management
staff will come from Fort St. James and beyond and will require camp accommodation as
well as 100% of labour employees working on a rotational basis.
Transportation to and from Fort St. James for employees will be executed by shuttle bus
contracted by the mine.

TMF
a large alpine valley. For the first 19 years of operations, the TMF will store all of the
milled tailings. For Years 20 to 24, the tailings will be stored in the quarry which will be
developed to provide rockfill for the tailings dam construction. It is proposed the tailings
dam be constructed as a standard earthfill retention structure with a low permeability
core. A starter dam will be constructed to contain the initial two years of tailings. The
TMF dam will be raised annually using the downstream method of construction. A detail
investigation of the TMF including trade-off studies is required to optimize the TMF design
in the next phase of study.
ON-SITE AND OFF-SITE INFRASTRUCTURE

Concentrate will be transported by trucks from the load out building at site to a
concentrate transload facility located adjacent to the CN Rail railway line near the Middle
River, a trip distance of approximately 15 km. At the transload facility, concentrate will
be off-loaded and transferred to rail cars for shipment to Prince Rupert, the port of
export.
25.5 ENVIRONMENTAL
The process of environmental permitting is relatively well understood and a preliminary
schedule outlining the critical steps has been developed in this study and has been
integrated into the preliminary project execution schedule. Environmental permitting is
on the Project critical path and no construction activities can commence until the
required permits and authorizations are obtained. There is considerable environmental
baseline information currently available regarding the site and the surrounding area,
compiled through extensive field investigations conducted over a two-year period; this
information will be augmented as needed to support the engineering design of the
Project. Based on the information available to date, there are no environmental aspects
that are considered to be limiting to the Project development.
25.6 ECONOMIC ANALYSIS AND MARKETING

The Project, at this stage, demonstrates positives economics, and it is recommended to
proceed to the prefeasibility study stage where the Project can further mitigate the risk of
inaccurate or faulty assumptions, by increasing the level of confidence in the operational
and financial inputs to the cash flow model.
The Decar awaruite concentrate is a unique product, neither being extracted from a
nickel laterite or a nickel sulphide deposit. Despite the low grades, a high concentrate
grade of 13.5% can be generated through simple beneficiation techniques of magnetic
and gravity separation. There is considered to be significant potential for Decar awaruite
concentrates, and ten potential customers were profiled as part of an independent third-
party study titled “Nickel Value in Use Study – Marketing Study” (Hatch 2012a). There
are currently no known direct existing awaruite concentrates in the market. Figure 25.1

provides a good point of reference to determine a possible entry point for the Decar
material to the merchant market.
Figure 25.1 Nickel Market and Point of Entry for Decar Concentrate
Source: Hatch (2012a)
Due to the nature of Decar’s awaruite mineralized deposit, it is likely that test work and
subsequent study work beyond that normally expected at a prefeasibility study stage will
be required. The recommended future work in this report does not include costs
specifically to address smelting and marketing test work and analysis, however this
analysis must be done to further increase the confidence of the concentrate’s
acceptance into the existing smelter market.

26.0 RECOMMENDATIONS
26.1 SUMMARY
The PEA recommendations include all identified work required to progress the Project to
the completion of the prefeasibility study stage of development. The estimated cost for
the technical issues, test work, prefeasibility study, and trade-off studies to accomplish
this is $14,153,000. The individual descriptions and estimated costs are listed in Table
26.1.
Table 26.1 Recommended Future Work

Cost
Environmental  project management/environmental management 1,574,570
 fish and fish habitat
 wildlife and wildlife habitat
 vegetation
 hydrology, surface water, and sediment quality
 hydrogeology and groundwater quality
 air quality and climate
 acid rock drainage/metal leaching
 terrain, soils, and geology
 socio-economic
 archaeology
 noise
 transmission corridor
Geology and  drilling 2,955,000
Mineral  camp
Resource
 core storage
 geophysics
 resource and reporting
 LiDAR
Mining  rock mechanics field program, site work, lab, data analysis, and 402,370
engineering
Waste  geochemical test work for metal leaching and acid rock drainage 60,000
Management 322,638
 site geotechnical soils drilling and testing program
Infrastructure  installation of a site weather station to collect site specific 10,000
and Services climatic data to form input into the civil design
table continues…

Cost
Project  prefeasibility study 2,573,423
Execution
 trade-off studies – yet to be defined (estimated cost at 15% of 400,000
prefeasibility study)
Mineral  process development, grindability, and environmental testing 525,000
Processing ±30%
 pilot plant study including thickening and concentrate moisture
limit testing
Marketing  pilot scale smelter test work 2,000,000
 small scale smelter lab test work and engineering 500,000
Contingency  estimated at 25% of total estimate 2,830,000
Estimated Total 14,153,001
The following test work has been identified, but not included in the recommendation
costs:
 large pilot plant test work for the beneficiation circuit

 smelter test sample preparation.
study and specifically to support the marketing assumptions which form the basis of the
Project’s revenue stream. A 10 t concentrate sample would be required for the pilot
plant smelting test work.
The schedule is presented in Figure 26.1 to progress the Project to the completion of the
prefeasibility study stage of development including the technical and test work identified
above. It is estimated that the time duration required from the onset of field work to the
completion of the prefeasibility study will be a minimum of 15 months.

Figure 26.1 Decar Project Schedule
26.2 GEOLOGY
The current optimized pit includes Inferred Resources. Inferred Resources exist at the
edges and at the bottom of the current pit. Therefore, it is recommended to increase the
confidence in the Inferred Resource such that the Inferred Resource at the edges of the
pit can be classified as Indicated.
It is recommended to:
 drill at least 13 diamond drillholes totalling 3,800 m (Table 26.2; Figure 26.2);
log and assay drill core
 drill approximately four to five geotech drillholes specifically for capturing
adequate geotech and hydrogeology data to support PFS mine design
 update the resources based on the new drilling
 update the optimized pit
 complete Televiewer downhole surveys for structural analysis

 some 2011 drillholes were not fully sampled; the assay results of the missing
samples should be included in the resource estimate.
The anticipated cost to complete this program is shown in Table 26.2.
Table 26.2 List of Proposed Drillholes

Hole Elevation Azimuth Dip Length
No. Easting Northing (m) (°) (°) (m)
Preafeas-1 347151 6083913 1,265 28.00 -60.00 200
Preafeas-2 347252 6083816 1,258 28.00 -60.00 200
Preafeas-3 347378 6083750 1,290 28.00 -60.00 200
Preafeas-4 347241 6084088 1,315 28.00 -60.00 200
Preafeas-5 347368 6084062 1,325 28.00 -60.00 200
Preafeas-6 347134 6084135 1,305 28.00 -60.00 200
Preafeas-7 347434 6084195 1,375 28.00 -60.00 200
Preafeas-8 347303 6084219 1,350 28.00 -60.00 200
Preafeas-9 347789 6084046 1,350 28.00 -60.00 200
Preafeas-10 347955 6084061 1,360 208.00 -60.00 200
Preafeas-11 349296 6083093 947 330.00 -50.00 600
Preafeas-12 349458 6083212 951 330.00 -50.00 600
Preafeas-13 349402 6082901 940 330.00 -50.00 600
Table 26.3 Proposed Budget for Recommended Field Work

Cost
Item ($)
Geology and geotechnical drilling 1,326,000
Geologists 210,000
Core handling and cutting 63,000
Camp 1,000,000
Equipment (including vehicles, excavators etc.) 25,000
Assaying 205,000
Subtotal 2,829,000
Resource estimate 38,000
43 101 report (including quality control) 88,000
Subtotal 126,000
Total 2,955,000

Figure 26.2 Proposed Drill Plan for the Decar Project

26.3 PROCESSING AND MARKETING
Additional test work is estimated to require $525,000 to refine the processing
methodology as follows:
 process development, grindability, and environmental testing

 pilot plant study including thickening and concentrate moisture limit testing.
Future test work conducted on the Decar mineral deposit should include:
 deeper investigation into the effect of primary and regrind size on process
performance in order to optimize the operation of the magnetic and gravity
concentrators
 studies to determine the optimum magnetic concentration conditions including
magnetic separation intensity
 comminution tests with samples selected in order to determine ore variability—
these samples could be selected from different geographical or geological
locations within the mineralized zones; tests should include:
 low-energy impact tests

 Bond ball and rod mill work indices for both ROM mineralization and
material concentrated by rougher magnetic concentration
 SAG mill comminution/drop weight test for SAG circuit design
 HPGR/SAG mill trade-off study
 investigation into mineralization variability:
 laboratory scale Davis tube and Superpanner tests on a sufficient number of

samples to fully specify the Baptiste deposit block model
 environmental and tailings management testing
 other data including:
 thickening and filtration tests

 rheology
 moisture limit in concentrate
 pilot-scale testing of an optimized beneficiation circuit including magnetic
roughing and gravity cleaning using laboratory scale models of the equipment to
be used in the full sized plant.
The above investigations should be conducted in the three campaigns outlined in Table
26.4.

Comminution testing should be considered to examine variability. Variability testing may
include SAG milling, Drop Weight, and Bond Work Index testing.
Table 26.4 Future Laboratory Studies and Cost

Cost
Item ($)
Process development, comminution, and environmental testing 150,000, ±50%
Variability study (assuming 100 samples) 75,000, ±25%
Thickening and concentrate moisture limit testing 300,000, ±25%
The following marketing related smelter test work has not been included in the
recommendation costs:
 pilot plant test work for the beneficiation circuit including magnetic roughing and
gravity cleaning using laboratory scale models of the equipment
 smelter test sample preparation
 smelter pilot test work.
level of study and specifically to support the marketing assumptions which form the basis
of the Project’s revenue stream. A 10 t concentrate sample would be required for the
pilot plant smelting test work.
26.4 MINING
Further work is required to address technical issues in the mining scope at an estimated
cost of $402,370. This work will consist of:
 rock mechanics field program

 site work
 lab work
 data analysis and engineering.
26.5 INFRASTRUCTURE
The recommended work in the area of infrastructure will cost an estimated $392,638,
broken down as follows, to address technical issues:
 geochemical test work for metal leaching and acid rock drainage $60,000
 TMF geotechnical soils drilling and testing program $322,638

 installation of a site weather station to collect site specific climatic data to form
input into the civil design $10,000.
Test work is also recommended for the following areas, although costs will be determined
during the prefeasibility study:
 a trade-off study to identify the location of the appropriate tie-in substation,

voltage of overhead transmission line, and to optimize the transmission line
routing
 a cluster system impact study
 water supply trade-off study.
26.6 ENVIRONMENTAL
Recommendations for the environmental portion of the Project are estimated at a cost of
$1,574,570 and include:
 Environmental and socio-economic studies and public consultation should

proceed with the objective of gaining environmental approval for the Project in
line with the feasibility timing and assume that there will be a joint provincial
and federal review process.
 Environmental and geotechnical investigations at the TMF are required to
determine the foundation conditions.
 Environmental study information should be integrated into all options evaluation
assessments for infrastructure design and locate in the next phase of
development.
 Estimated reclamation costs and bonding requirements should be reassessed in
the next phase of development.
26.7 PREFEASIBILITY STUDY COST

The costs associated with performing the prefeasibility study are presented in the
following subsections. Costs associated with related trade-off studies will be presented
as separate costs to the prefeasibility study.
26.7.1 COSTS
Cost estimates for consulting work only for the various prefeasibility study components
under consideration are summarized in Table 26.5. Currently, costs for internal Cliffs
resources for the completion of the prefeasibility study have not been considered. It is
recommended that a system to capture the effort and costs of internal Cliffs resources is
established for the prefeasibility study execution. It is anticipated that for subsequent
work on the Project, dedicated Cliffs teams will be assigned as required.

Table 26.5 Recommended Activity Costs for Prefeasibility Study
Estimated
Estimated Costs
Activity Manhours ($)
Project Management 1,894 340,920
Project Services and Controls 720 112,500
Rock Mechanics 784 145,928
Open Pit Mining 1,500 276,260
Process Engineering 1,902 286,350
Geotechnical Tailings, Waste and Water Management 1,606 285,026
Civil Earth and Roads 1,096 169,983
Layout and General Arrangements 996 137,760
Structural Steel and Concrete 616 91,840
Mechanical 295 44,275
Electrical 692 99,100
Energy Management 456 70,960
Instrumentation and Controls 246 38,150
Environment 1,304 194,400
Health and Safety 98 21,560
Recruitment and Training 287 63,140
Employee and Labour Relations 56 12,320
Compensation and Benefits 63 13,860
Industrial Security 98 21,560
Subtotal 14,709 2,425,892
Disbursements
Office Overhead @ $9.00/h 14,709 132,381
Specialty Software - -
Disbursements Subtotal - 132,381
Expenses
Travel Expenses - 15,150
Expenses Total 15,150
Total Estimate 14,709 2,573,423
The foregoing estimates have been derived through applying historical factors to the
direct and indirect cost estimates. As such, the estimates will be refined during the
interim period between the end of the scoping study and the commencement of the
prefeasibility study by compiling task based manhour estimates for a given list of
deliverables and activities.

27.0 REFERENCES
GEOLOGY
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Columbia; Geological Survey of Canada, Memoir 252, 210 pages.
Britten, R. (2009). Field Season 2008, Geology and Geochemistry, Decar Property, BC.
B.C. Ministry of Energy, Mines and Petroleum Resources Assessment Report #30793,
70 p.
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51 p.
Britten, R., and Rabb, T. (2011). 2010 Year End Exploration Report, Geophysical and
Geology Surveys and Drilling on the Decar Property, BC: Internal Report, First Point
Minerals Corp. and Cliffs Natural Resources Inc., 103 p.
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Geophysical Surveys, Decar Property, BC: BC Geological Survey Branch Assessment
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California Environmental Protection Agency, 1991, Method 435: Determination of

Asbestos Content of Serpentine Aggregate: California Environmental Protection
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CIM Standing Committee on Reserve Definitions (2010). CIM Definition Standards – For
Mineral Resources and Mineral Reserves, Canadian Institute of Mining, Metallurgy
and Petroleum, November 27, 2010, 10 p.
Crowe, C., Solar, M. (2012). Cliffs Natural Resources, Nickel Value in Use Study,
Concentrate Analysis Technical Report: Cliffs Natural Resources Inc. Internal Report,
Hatch Consulting Engineering. January 6, 2012.
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Journal of Petrology, v. 26, p. 31-63.
Guinet, V. (1980). Prospecting Report on CR Claims Omineca Mining Division: B.C.

Ministry of Energy, Mines and Petroleum Resources Assessment Report #8135, 12 p.
Hamlin, Craig (2012). pers. comm. Craig Hamlin, Ore Research & Exploration Pty Ltd,
June 23, 2012.

Karaca, A., and Downey, S. (2011). An Investigation by High Definition Mineralogy into the
Mineralogical Characteristics of One Master Composite and Variability Components:
First Point Minerals, SGS, Lakefield.
MacIntyre, D. and Schiarizza, P. (1999). Bedrock Geology, Cunningham Lake,

NTS93K/11, 12, 13 & 14, British Columbia: British Columbia Geological Survey Open
File Report 1999-11 (map).
McIntyre, J.F., and McIntyre, R.F. (1995). Report on Diamond Drilling Grenn 1-4 Mineral
Claims; Omineca Mining Division: B.C. Ministry of Energy, Mines and Petroleum
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Mowat, U. (1988). Geochemical Sampling on the Van Group, Klone Group, Mid Claim,
Omineca M.D.: B.C. Ministry of Energy, Mines and Petroleum Resources Assessment
Report #17173, 105 p.
Mowat, U. (1988). Geochemical Sampling, Prospecting and Mapping on the Van Group,
Klone Group, and Mid Claim; Omineca M.D.: B.C. Ministry of Energy, Mines and
Petroleum Resources Assessment Report #18089, 189 p.
Mowat, U. (1990). Mapping and Drilling Program on the Mount Sidney Williams Property;
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Mowat, U. (1991). Drilling Program on the Mount Sidney Williams Property; Omineca
M.D.: B.C. Ministry of Energy, Mines and Petroleum Resources Assessment Report
#21870, 73 p.
Mowat, U. (1994). Drilling Program on the Mount Sidney Williams Gold Property,
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Mowat, U. (1997). A Geochemical/Petrographic Report on the Mount Sidney Williams

Property, Omineca Mining Division: B.C. Ministry of Energy, Mines and Petroleum
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Property, Omineca Mining Division: B.C. Ministry of Energy, Mines and Petroleum
Mowat, U. (1998). Mapping and Sampling on the Mount Sidney Williams Property,
Omineca Mining Division: B.C. Ministry of Energy, Mines and Petroleum Resources
Assessment Report #25727, 57 p.

Mowat, U. (2002). Sampling on the Mount Sidney Williams Property, Omineca Mining
Division: B.C. Ministry of Energy, Mines and Petroleum Resources Assessment Report
#26993, 34 p.
Mowat, U. (2004). Sampling on the Mid and Klone 7 Claims, Omineca Mining Division:
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Division: B.C. Ministry of Energy, Mines and Petroleum Resources Assessment Report
#27605, 32 p.
Mowat, U. (2007). Sampling and Grid Preparation on the Klone 5 and Klone 6 Claims,
Omineca Mining Division, B.C. Ministry of Energy, Mines and Petroleum Resources
Perkins, R.L. and Harvey, B.W., 1993, Test Method: Method for the determination of
asbestos in bulk building materials: U.S. Environmental Protection Agency,
EPA/600/R-93/116, July 1993, 61 p (+appendices).
Pezzot, E.T. and Vincent, J.S. (1982). Geophysical Report on an Airborne VLF-EM &
Magnetometer Survey Cr 1 – Cr 6 claims, Omineca M.D., Ministry of Energy, Mines
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Central British Columbia (93K/111, 12, 13, 14,; 93N/3, 4, 5,6): British Columbia
Geological Survey Branch Geological Fieldwork 1998, Paper 1999-1, p. 33-68.
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Svoboda (2004). Magnetic Techniques for the Treatment of Materials, Kluwer Academic
Publishers, 642 p. January, 2004
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Nickel-iron Alloy Awaruite, on the West Coast of the South Island of New Zealand:
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Samples, Decar Property, BC: B.C. Ministry of Energy, Mines and Petroleum
ENVIRONMENTAL
KCB (2012a). Decar Nickel Project – preliminary environmental baseline report.
Unpublished report 120208R. February 8, 2012.
KCB (2012b). Winter Caribou study – aerial-based census results for the Takla caribou
herd, March 2012. Unpublished report 120511DR. June 5, 2012.
Palich, J. (2012). Preliminary ARD and ML assessment, Decar Nickel Property, Omenica
Mining District, British Columbia. Unpublished report prepared by Caracle Creek
International Consulting, March 26, 2012.
MINERAL PROCESSING AND METALLURGICAL TESTING

Britten, R., Rabb, (2011), T., 2010 Year End Exploration Report Geophysical and Geology
Surveys and Drilling on the Decar Property, BC. February 17, 2011
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Point Minerals Project No: KRTS 20539, June 25, 2010
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Concentrate Analysis Technical Report, January 6, 2012
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Mineralogical Characteristics of One Master Composite and Five Variability
Composites, July 11, 2011
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Awaruite Deposit Prepared for First Point Minerals Corp, February 21, 2012

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43-101 of the Canadian Securities Administrators), February 14, 2011
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MARKETING AND FINANCIAL

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Study. Internal Report for Cliffs Natural Resources Inc. January 6, 2012.
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Economic Modelling Report. Internal Report for Cliffs Natural Resources Inc. January
6, 2012.
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Minerals Corp. – Assistance with Income and Mining Tax Component of Economic
Analysis”, and dated March 15, 2013.

APPENDIX A
CERTIFICATES OF QUALI FIED PERSONS

EUR. ING. ANDREW CARTER, B.SC., C.ENG., MIMMM, SAIMM, SME
I, Eur. Ing. Andrew Carter B.Sc., C.Eng., MIMMM, SAIMM, SME, of Swindon, United Kingdom, do
hereby certify:
 I am Chief Metallurgist with Tetra Tech WEI Inc. with a business address at Ground Floor, Unit 2,
Apple Walk, Kembrey Park, Swindon, SN2 8BL, UK.
 This certificate applies to the technical report entitled Preliminary Economic Assessment – Decar
Nickel Project, British Columbia, Canada (Amended), dated March 22, 2012 and re-filed August
16, 2013 (the “Technical Report”).
 I am a graduate of the University of Leeds (B.Sc. Mineral Processing, 1980). I am a member in
good standing of the IOM3, SAIMM, SME, and registered as both C.Eng (#378467) and Eur.Ing
(#c2960GB). My relevant experience comprises over 30 years in operations, engineering and
consulting practice in relation to the extractive metallurgy of gold, precious and base metal ores
including eight years in nickel smelting practice. I am a “Qualified Person” for purposes of
National Instrument 43-101 (the “Instrument”).
 I have not completed a personal inspection of the Property.
 I am responsible for Section 19 of the Technical Report.
 I am independent of First Point Minerals Corp. and Cliffs Natural Resources Exploration Canada
Inc. as defined by Section 1.5 of the Instrument.
 I have no prior involvement with the Property that is the subject of the Technical Report.
 I have read the Instrument and the sections of the Technical Report that I am responsible for
have been prepared in compliance with the Instrument.
 As of the date of this certificate, to the best of my knowledge, information, and belief, the
sections of the Technical Report that I am responsible for contain all scientific and technical
information that is required to be disclosed to make the Technical Report not misleading.
Signed and dated this 16th day of August, 2013 at Swindon, United Kingdom
“Original document signed by

Eur. Ing. Andrew Carter, B.Sc.,
C.Eng., MIMMM, SAIMM, SME”
Eur. Ing. Andrew Carter, B.Sc.,
C.Eng, MIMMM, SAIMM, SME
Senior Mining Engineer
Tetra Tech WEI Inc.
DHARSHAN KESAVANATHAN, P.ENG.
I, Dharshan Kesavanathan, P.Eng., of Mississauga, Ontario, do hereby certify:
 I am a Manager, Private Sector Water with Tetra Tech WEI Inc. with a business address at 6835A
Century Avenue, Mississauga, Ontario, L5N 2L2.
 I am a graduate of the University of Guelph (B.Sc. Eng. Environmental Engineering, 2001). I am
a member in good standing of the Association of Professional Engineers of Ontario, License
#100074871. My relevant experience includes 11 years of experience in environmental and
infrastructure design, as well as project delivery and implementation, primarily for the heavy
industrial sector. Areas of specialization include water management and treatment,
infrastructure design, and site civil development for the mining and metallurgical industries. I
am a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I did not complete a personal inspection of the Property.
 I am responsible for Sections 18.1, 18.2, 18.3, 18.4, 18.5, 18.7.1, 18.7.2, 20.2.1, 20.2.3, 21.0
(Infrastructure only), 25.4 (On-site and Off-site Infrastruture section only), and 26.5
(Infrastructure only) of the Technical Report.
 As of the date of this certificate, to the best of my knowledge, information and belief, the
Signed and dated this 16th day of August, 2013 at Missisauga, Ontario.
“Original document signed and sealed

by Dharshan Kesavanathan, P.Eng.”
Manager, Private Sector Water
Tetra Tech WEI Inc.
ELISABETH RONACHER, PH.D., P.GEO.
I, Elisabeth Ronacher, Ph.D., P.Geo., of Sudbury, Ontario, do hereby certify:
 I am a Managing Geologist with Caracle Creek International Consulting Inc. Canada with a
business address at 25 Frood Road, Sudbury, Ontario, P3C 4Y9.
 I am a graduate of the University of Vienna (M.Sc. Geology, 1997) and the University of Alberta
(Ph.D. Geology, 2002). I am a member in good standing of the Association of Professional
Geoscientists of Ontario (member # 1476) and of the Association of Professional Engineers and
Geoscientists of British Columbia (License #37651), the Society of Economic Geologists (SEG),
and the Society for Geology Applied to Mineral Deposits (SGA). I have worked on exploration
projects world wide (including Canada, Mongolia, China, Austria) and have worked on Au, Cu,
base metal, Cu-Ni PGE and U deposits since 2003. I am a “Qualified Person” for the purposes of
 My most recent personal inspection of the Property was on September 12 and 13, 2012.
 I am responsible for Sections 4.0 to 8.0, 9.4, 10.0 to 12.0, 21.0 (Geology only), 23.0, 25.1,
26.2, and 27.0 (Geology section only) of the Technical Report.
Signed and dated this 16th day of August, 2013 at Sudbury, Ontario.
“Original document signed and sealed by

Elisabeth Ronacher, Ph.D., P.Geo.”
Managing Geologist
Caracle Creek International Consulting Inc. Canada
JASON BAKER, B.ENG., P.ENG.
I, Jason Baker, B.Eng., P.Eng., of Fall River, Nova Scotia, do hereby certify:
 I am a Geological Engineer with Caracle Creek International Consulting Inc. Canada with a
business address at 9th Floor, 34 King Street East, Toronto, Ontario, M5C 2X8.
 I am a graduate of Dalhousie University (B.Eng., 2000). I am a member in good standing of the
Association of Professional Engineers and Geoscientists of Nova Scotia (License #9627), and
the Association of Professional Geoscientists of British Columbia (License #37720). I have
worked over 13 years in geological modelling and resource calculations in both exploration (gold,
lead, silver, copper, lithium, nickel and zinc) and operations (coal, gypsum, lead and zinc). I am a
“Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I am responsible for Section 14.0, 16.4, and 16.5 of the Technical Report.
Signed and dated this 16th day of August, 2013 at Fall River, Nova Scotia.

Jason Baker, B.Eng., P.Eng.”
Geological Engineer
JULIE PALICH, M.SC., P.GEO.
I, Julie Palich, M.Sc., P.Geo., of Toronto, Ontario, do hereby certify:
 I am a Geophysicist and Geochemist with Caracle Creek International Consulting Inc. Canada
with a business address at 9th Floor, 34 King Street East, Toronto, Ontario, M5C 2X8.
 I am a graduate of the Colorado School of Mines (B.Sc. in Geophysical Engineering, 1996) and
Monash University (Geophysics/Environmental Geochemistry specialty, 2001). I am a member
in good standing of the Association of Professional Engineers and Geoscientists of British
Columbia (License #37646), the Association of Professional Geoscientists of Ontario (License
#1880), and the Australasian Institute of Mining and Metallurgy (AUSIMM Member #301564). I
am a member in good standing of the Society of Exploration Geophysicists (SEG), and Canadian
Exploration Geophysical Society (KEGS). I have been practicing geophysics and geochemistry
continuously since 1996 and have worked on a variety of properties in industry including gold,
nickel-sulphides, Cu-Pb-Zn, coal and mineral sands. Additionally, I have 10 years experience
implementing environmental baseline studies and management programs for mining and
exploration companies. I am a “Qualified Person” for the purposes of National Instrument 43-
101 (the “Instrument”).
 My most recent personal inspection of the Property was on August 22, 2012.
 I am responsible for Sections 9.1, 9.2, 9.3, 20.1, 20.3, 20.4, 20.5, 20.6, 21.0 (Environmental
only), 25.5, 26.6 (Environmental only), and 27.0 (Environmental section only) of the Technical
Report.
Signed and dated this 16th day of August, 2013 at Toronto, Ontario.

Julie Palich, M.Sc., P.Geo.”
Geophysicist and Geochemist
KARLIS JANSONS, P.ENG.
I, Karlis Jansons, P.Eng., of Toronto, Ontario, do hereby certify:
 I am a Principal Consultant with EBA Engineering Consultants Ltd., a Tetra Tech Company with a
business address at 900-330 Bay Street, Toronto, Ontario, M5H 2S8.
 I am a graduate of The University of Toronto (BASc, 1981). I am a member in good standing of
the Association of Professional Engineers of Ontario (#21839501). My relevant experience
includes geotechnical engineering design aspects of the development of mine infrastructure and
mine waste management including numerous projects in Canada, Brazil, Europe, Russia, Latin
America and Africa for the past 30 years. I am a “Qualified Person” for purposes of National
Instrument 43-101 (the “Instrument”).
 I am responsible for Sections 18.6, 20.2.2, 21.0 (TMF only), 25.4 (TMF only), 26.5 (TMF only),
and 26.6 (TMF only) of the Technical Report.
“Original document signed and

sealed by Karlis Jansons, P.Eng.”
Principal Consultant
EBA Engineering Consultants Ltd.,
a Tetra Tech Company
MIKE MCLAUGHLIN, P.ENG.
I, Mike McLaughlin, P.Eng., of Barrie, Ontario, do hereby certify:
 I am a Project Manager with Tetra Tech WEI Inc. with a business address at Suite 900, 300 Bay
Street, Toronto, Ontario, M5H 2S8.
 I am a graduate of McMaster University (B.Eng. in Mechanical Engineering, 1990). I am a
member in good standing of the Association of Professional Engineers and Geoscientists of
Ontario, License #100084932. My relevant experience includes six years of direct engineering
experience involving NI 43-101 compliant front end mining studies and economic evaluation
studies. I have previously been involved with compiling capital and operating costs for greenfield
mine projects and developing discounted pre-tax cash flow models for the LOM projects for the
purpose of presentation in NI 43-101 studies. I am a “Qualified Person” for the purposes of
 My most recent personal inspection of the Property was between November 16 to 18, 2011.
 I am responsible for Sections 1.0, 2.0, 3.0, 21.0, 22.0, 24.0, 25.6, 26.1, 26.7, and 27.0
(Marketing and Financials section only) of the Technical Report.
Signed and dated this 16th day of August, 2013 at Barrie, Ontario.

sealed by Mike McLaughlin, P.Eng.”
Mike McLaughlin, P.Eng.
Project Manager
Tetra Tech WEI Inc.
TODD KANHAI, M.A.SC., P.ENG.
I, Todd Kanhai, M.A.Sc., P.Eng., of Sudbury, Ontario, do hereby certify:
 I am a Metallurgical Engineer, with an address of 1 Monique Crescent, Garson, Ontario, P3L

1C6. At the effective date of the original technical report, I was an employee with Tetra Tech WEI
Inc. with a business address at 101-957 Cambrian Heights, Sudbury, Ontario, P3C 5M6.
 I am a graduate of Laurentian University (M.A.Sc., 2000). I am a member in good standing of the
Professional Engineers of Ontario, License #90471020. My relevant experience is with previous
conceptual, preliminary economic assessment, prefeasibility, and feasibility studies while
working with Tetra Tech WEI. I am a “Qualified Person” for the purposes of National Instrument
43-101 (the “Instrument”).
 I am responsible for Sections 13.0, 17.0, 21.0 (Process Plant only), 25.2, 26.3, and 27.0
(Mineral Processing and Metallurgical Testing section only) of the Technical Report.
Signed and dated this 16th day of August, 2013 at Sudbury, Ontario.

Todd Kanhai, M.A.Sc., P.Eng.”
Todd Kanhai, M.A.Sc., P.Eng.
Metallurgical Engineer
VALENTIN DEJAN, P.ENG.
I, Valentin Dejan, P.Eng., of Toronto, Ontario, do hereby certify:
 I am a Senior Mechanical Engineer with Tetra Tech WEI Inc. with a business address at Suite
900, 300 Bay Street, Toronto, Ontario, M5H 2S8.
 I am a graduate of the Polytechnic University of Bucharest (Masters Degree Mechanical
Engineering, 1981). I am a member in good standing of the Association of Professional
Engineers and Geoscientists of Ontario (License #90242132), the Association of Professional
Engineers and Geoscientists of Saskatchewan (License #14247), and the Association of
Professional Engineers and Geoscientists of Alberta (License #89984). My relevant experience
includes over 20 years of experience in mechanical engineering and project management with
extensive experience providing leadership for large-scale EPC projects involving crushing, milling,
pyro-processing, material handling and pneumatic conveying equipment. I am a “Qualified
Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I am responsible for Sections 18.7.3 and 25.4 (Logistics section only) of the Technical Report.

sealed by Valentin Dejan, P.Eng.”
Senior Mechanical Engineer
Tetra Tech WEI Inc.
WENCHANG NI, P.ENG.
I, Wenchang Ni, P.Eng., of Toronto, Ontario, do hereby certify:
 I am a Senior Mining Engineer with Tetra Tech WEI Inc. with a business address at Suite 900,
300 Bay Street, Toronto, Ontario, M5H 2S8.
 I am a graduate of Henan Polytechnic University (B.A.Sc. in Mining Engineering, 1982) and
Laurentian University (M.A.Sc. in Mineral Resource Engineering, 2006). I am a member in good
standing of the Association of Professional Engineers and Geoscientists of Ontario, License
#100134204 and the Association of Professional Engineers and Geoscientists of British
Columbia, License #32078. My relevant experience includes more than 30 years experience in
mine operation, detailed engineering design, prefeasibility study, feasibility study and due
diligence in Canada and overseas. I am a “Qualified Person” for the purposes of National
Instrument 43-101 (the “Instrument”).
 I am responsible for Sections 15.0, 16.0, 21.0 (Mining only), 25.3, and 26.4 of the Technical
Report.

sealed by Wenchang Ni. P.Eng.”
Wenchang Ni, P.Eng.
Senior Mining Engineer
Tetra Tech WEI Inc.
APPENDIX B
ANALYTICAL CER TIFICATES FOR CHRYSOTILE ANA LYSIS

EMSL Canada Or 551203992
EMSL Canada Inc.
10 Falconer Drive, Unit #3, Mississauga, ON L5N 3L8
CustomerID: 55ALL80
Phone/Fax: 289-997-4602 / (289) 997-4607 CustomerPO:
http://www.emsl.com torontolab@emsl.com ProjectID:
Attn: PAT MISALE Phone: (905) 648-9611123

Fax: (905) 648-9613
Activation Laboratories Ltd.
Received: 08/30/12 2:28 PM
1336 Sandhill Drive
Analysis Date: 9/6/2012
Collected:
Ancaster, ON L9G 4V5
Project: SHORE ASBESTOS TESTING
Test Report: PLM Analysis of Bulk Samples for Asbestos via EPA 600/R-93/116
Method with CARB 435 Prep (Milling) Level A for 0.25% Target Analytical Sensitivity
Non-Asbestos Asbestos
Sample Description Appearance % Fibrous % Non-Fibrous % Type
1 Gray 100.00% Non-fibrous (other) <0.25% Chrysotile

551203992-0001 Non-Fibrous
Homogeneous
2 Gray 100.00% Non-fibrous (other) <0.25% Chrysotile

551203992-0002 Non-Fibrous
Homogeneous
3 Gray 88.50% Non-fibrous (other) 11.50% Chrysotile

551203992-0003 Non-Fibrous
Homogeneous

551203992-0004 Non-Fibrous
Homogeneous

551203992-0005 Non-Fibrous
Homogeneous

551203992-0006 Non-Fibrous
Homogeneous

551203992-0007 Non-Fibrous
Homogeneous
Analyst(s)
Kevin Pang (29) Kevin Pang
or other approved signatory
This report relates only to the samples listed above and may not be reproduced except in full, without EMSL's written approval. This report must not be used by the client to claim product certification,
approval, or endorsement by NVLAP, NIST, or any agency of the federal government. EMSL is not responsible for sample collection activities or method limitations. Some samples may contain asbestos
fibers below the resolution limit of PLM. EMSL recommends that samples reported as none detected or less than the limit of detection undergo additional analysis via TEM.Samples received in good
condition unless otherwise noted.
Samples analyzed by EMSL Canada Inc. Mississauga, ON
Initial report from 09/06/2012 14:48:15
Test Report PLMPTC-7.25.0 Printed: 9/6/2012 2:48:15 PM 1

EMSL Canada Inc.
CustomerID: 55ALL80

Fax: (905) 648-9613
Received: 08/30/12 2:28 PM
1336 Sandhill Drive
Collected:

551203992-0008 Non-Fibrous
Homogeneous

551203992-0009 Non-Fibrous
Homogeneous

551203992-0010 Non-Fibrous
Homogeneous

551203992-0011 Non-Fibrous
Homogeneous

551203992-0012 Non-Fibrous
Homogeneous

551203992-0013 Non-Fibrous
Homogeneous

551203992-0014 Non-Fibrous
Homogeneous
Analyst(s)

EMSL Canada Inc.
CustomerID: 55ALL80

Fax: (905) 648-9613
Received: 08/30/12 2:28 PM
1336 Sandhill Drive
Collected:

551203992-0015 Non-Fibrous
Homogeneous

551203992-0016 Non-Fibrous
Homogeneous

551203992-0017 Non-Fibrous
Homogeneous

551203992-0018 Non-Fibrous
Homogeneous

551203992-0019 Non-Fibrous
Homogeneous

551203992-0020 Non-Fibrous
Homogeneous

551203992-0021 Non-Fibrous
Homogeneous
Analyst(s)

EMSL Canada Inc.
CustomerID: 55ALL80

Fax: (905) 648-9613
Received: 08/30/12 2:28 PM
1336 Sandhill Drive
Collected:

551203992-0022 Non-Fibrous
Homogeneous

551203992-0023 Non-Fibrous
Homogeneous

551203992-0024 Non-Fibrous
Homogeneous

551203992-0025 Non-Fibrous
Homogeneous

551203992-0026 Non-Fibrous
Homogeneous

551203992-0027 Non-Fibrous
Homogeneous

551203992-0028 Non-Fibrous
Homogeneous
Analyst(s)

EMSL Canada Inc.
CustomerID: 55ALL80

Fax: (905) 648-9613
Received: 08/30/12 2:28 PM
1336 Sandhill Drive
Collected:

551203992-0029 Non-Fibrous
Homogeneous
Analyst(s)
Test Report PLMPTC-7.25.0 Printed: 9/6/2012 2:48:15 PM THIS IS THE LAST PAGE OF THE REPORT. 5

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First Point Minerals Corp.

Preliminary Economic Assessment -

FIRST POINT MINERALS CORP.

PRELIMINARY ECONOMIC ASSESSMENT -

EFFECTIVE DATE: MARCH 22, 2013

Prepared by Mike McLaughlin, P.Eng.

Suite 900, 330 Bay Street, Toronto, Ontario M5H 2S8

REV. PREPARED BY REVIEWED BY APPROVED BY

1.0 SUMMARY ....................................................................................................... 1-1

Table 1.1 General Project Information......................................................................................... 1-1

APPENDIX A CERTIFICATES OF QUALIFIED PERSONS

ABBREVIATIONS AND ACRONYMS

General information for the Project is summarized in Table 1.1.

Table 1.1 General Project Information

First Point Minerals Corp. 1-1 1191600400-REP-R0001-05

 Tetra Tech – overall project management, mineral processing and metallurgical

1.2 PROPERTY DESCRIPTION AND OWNERSHIP

1.4 GEOLOGICAL SETTING AND MINERALIZATION

First Point Minerals Corp. 1-2 1191600400-REP-R0001-05

First Point Minerals Corp. 1-3 1191600400-REP-R0001-05

First Point Minerals Corp. 1-4 1191600400-REP-R0001-05

Downhole geophysical rock property surveys were completed in selected boreholes in

1.6 MINERAL RESOURCE ESTIMATE

1.7 MINERAL PROCESSING AND METALLURGICAL TESTING

First Point Minerals Corp. 1-5 1191600400-REP-R0001-05

First Point Minerals Corp. 1-6 1191600400-REP-R0001-05

The key elements of this flowsheet are:

First Point Minerals Corp. 1-7 1191600400-REP-R0001-05

Tonnage input to processing

Period Subtotal Waste Overburden Resource Grade Stripping

First Point Minerals Corp. 1-8 1191600400-REP-R0001-05

1.9 PROJECT INFRASTRUCTURE

First Point Minerals Corp. 1-9 1191600400-REP-R0001-05

It is proposed that the tailings dam be constructed as a standard earthfill retention

First Point Minerals Corp. 1-10 1191600400-REP-R0001-05

1.11 CAPITAL AND OPERATING COSTS

1.11.1 CAPITAL COST ESTIMATE

First Point Minerals Corp. 1-11 1191600400-REP-R0001-05

Table 1.5 Contingency Analysis

First Point Minerals Corp. 1-12 1191600400-REP-R0001-05

A breakdown of the pre-production capital costs are shown in Table 1.6.

Table 1.6 Pre-production Cost (Level 1)

1.11.2 OPERATING COST ESTIMATE

First Point Minerals Corp. 1-13 1191600400-REP-R0001-05

Table 1.8 Operating Cost by OBS

First Point Minerals Corp. 1-14 1191600400-REP-R0001-05

1.12 ECONOMIC ANALYSIS

First Point Minerals Corp. 1-15 1191600400-REP-R0001-05

Table 1.10 Pre-tax NPV and IRR

First Point Minerals Corp. 1-16 1191600400-REP-R0001-05

Table 1.11 Post-tax NPV and IRR

First Point Minerals Corp. 1-17 1191600400-REP-R0001-05

Table 1.12 Components of the Various Taxes

First Point Minerals Corp. 1-18 1191600400-REP-R0001-05

First Point Minerals Corp. 1-19 1191600400-REP-R0001-05

There is considered to be significant potential for Decar awaruite concentrates, however,

First Point Minerals Corp. 1-20 1191600400-REP-R0001-05

 Elisabeth Ronacher, Ph.D., P.Geo., conducted a site visit on October 5 and 6,

Table 2.1 Summary of QPs

First Point Minerals Corp. 2-1 1191600400-REP-R0001-05

2.1 UNITS OF MEASUREMENT AND CURRENCY

All costs are in Canadian dollars unless otherwise noted.