Background
The Company purchased the Project, including Property A (on which there is a continuous, massive deposit (the Deposit”)) consisting of a surface deposit with a potential open-pit mine plan and an underground deposit with a potential “post pillar cut-and-fill” underground mine plan), and has since conducted several exploration campaigns thereon. The Deposit includes proven and probable mineral reserves. The Company completed a National Instrument 43-101 compliant technical reports and initial feasibility studies, indicating that the Project would be economically viable under the base case financial parameters and recommending that the Project be advanced to construction. However, the Company decided not to advance to construction and instead to continue exploring Property A. Surface drilling is impractical for these purposes due to the depth of the drilling required.
Proposed Transactions
Underground exploration will be facilitated by the development of an underground ramp which will provide underground access for diamond drilling and sampling. Drill holes will be sequenced during advancement of the ramp in a strategic manner to ensure maximum drilling production during ramp advancement.
Additional Information
No positive decision has been made by the Company’s board of directors to bring any part of the Project into production. The Company anticipates that the ramp will be also used in the future for mining operations to bring ore up to the surface.
Purpose
The Proposed Transactions are being undertaken for the purpose of conducting an exploration and mineral resource evaluation program in order to determine the existence, location, extent and quality of the Deposit that would be expected to be mined by creating a new underground mining infrastructure and using underground mining methods.
Ruling
Re qualification under para. (f) (and comment that “Expenses incurred in order to determine the economic feasibility of whether or not to proceed with developing a new mine.”)