Report to:

Seabridge Gold Inc.

Northwestern British Columbia, Canada

2016 KSM (Kerr-Sulphurets-Mitchell)

Prefeasibility Study Update and
Preliminary Economic Assessment
Document No. 735-1552880100-REP-R0002-02
Report to:

SEABRIDGE GOLD INC.

NORTHWESTERN BRITISH COLUMBIA, CANADA

2016 KSM (KERR-SULPHURETS-MITCHELL)
PREFEASIBILITY STUDY UPDATE AND
PRELIMINARY ECONOMIC ASSESSMENT
EFFECTIVE DATE: OCTOBER 6, 2016

Prepared by Hassan Ghaffari, P.Eng., Tetra Tech, Inc.

Jianhui (John) Huang, Ph.D., P.Eng., Tetra Tech, Inc.
Kevin Jones, P.Eng., Tetra Tech, Inc.
James H. Gray, P.Eng., Moose Mountain Technical Services
Ross Hammett, Ph.D., P.Eng., Golder Associates Ltd.
R.W. Parolin, P.Eng., McElhanney Consulting Services Ltd.
Derrek Kinakin, M.Sc., P.Geo., P.G., BGC Engineering Inc.
Michael J. Lechner, P.Geo., RPG, CPG, Resource Modeling Inc.
J. Graham Parkinson, P.Geo., Khlon Crippen Berger Ltd.
Pierre Pelletier, ERM Consultants Canada Ltd.
Neil Brazier, P.Eng., WN Brazier Associates Inc.
Simon Allard, P.Eng., Amec Foster Wheeler Americas Limited
Tony Lipiec, P.Eng., Amec Foster Wheeler Americas Limited
Mark Ramirez, RM, SME, Amec Foster Wheeler E&C Services Inc.

JS/vc

Suite 1000, 10th Fl, 885 Dunsmuir Street, Vancouver, British Columbia, V6C 1N5
Phone: 604.408.3788 Fax: 604.684.6241
IMPORTANT NOTICE

This report was prepared as National Instrument 43-101 Technical Report for Seabridge Gold Inc.
(Seabridge) by Tetra Tech, Inc., Moose Mountain Technical Services, Golder Associates Ltd., BGC
Engineering Inc., Resource Modeling Inc., McElhanney Consulting Services Ltd., Klohn Crippen
Berger Ltd, ERM Consultants Canada Ltd, WN Brazier Associates Inc., and Amec Foster Wheeler
Americas Limited, collectively the Report Authors. The quality of information, conclusions, and
estimates contained herein is consistent with the level of effort involved in the Report Authors’
services, based on i) information available at the time of preparation, ii) data supplied by outside
sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is
intended for use by Seabridge subject to the respective terms and conditions of its contracts with the
individual Report Authors. Those contracts permit Seabridge to file this report as a Technical Report
with Canadian Securities Regulatory Authorities pursuant to provincial and territorial securities law.
Except for the purposes legislated under Canadian provincial and territorial securities law, any other
use of this report by any third party is at that party’s sole risk.

iv 735-1552880100-REP-R0002-02
TABLE OF CONTENTS

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

1.1 INTRODUCTION ...................................................................................................... 1-1
1.2 PRELIMINARY FEASIBILITY STUDY ............................................................................ 1-2
1.3 PRELIMINARY ECONOMIC ASSESSMENT ................................................................... 1-3
1.4 KEY STUDY OUTCOMES .......................................................................................... 1-4
1.5 PROPERTY DESCRIPTION AND LOCATION .................................................................. 1-5
1.6 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND
PHYSIOGRAPHY ..................................................................................................... 1-9
1.7 GEOLOGY............................................................................................................ 1-10
1.8 HISTORY ............................................................................................................. 1-13
1.9 RESOURCES ........................................................................................................ 1-13
1.10 OVERALL GENERAL ARRANGEMENT ....................................................................... 1-14
1.11 MINE PLANNING .................................................................................................. 1-19
1.11.1 MINING LIMITS .................................................................................... 1-19
1.11.2 MINERAL RESERVE ESTIMATE ............................................................... 1-19
1.11.3 MINE PRODUCTION PLAN...................................................................... 1-20
1.12 METALLURGICAL TEST REVIEW .............................................................................. 1-24
1.13 MINERAL PROCESSING......................................................................................... 1-25
1.14 TAILING, WATER MANAGEMENT, AND ROCK STORAGE FACILITIES ............................. 1-29
1.14.1 TAILING MANAGEMENT FACILITY ............................................................ 1-29
1.14.2 MINE SITE WATER MANAGEMENT.......................................................... 1-32
1.15 ENVIRONMENTAL CONSIDERATIONS ....................................................................... 1-35
1.15.1 COMMUNITY AND ABORIGINAL ENGAGEMENT .......................................... 1-35
1.15.2 CLOSURE AND RECLAMATION ................................................................ 1-36
1.16 GEOHAZARDS ...................................................................................................... 1-37
1.17.1 PERMANENT ACCESS ROADS ................................................................ 1-40
1.17.2 WINTER ACCESS ROAD ......................................................................... 1-40
1.17.3 OFF-SITE INFRASTRUCTURE .................................................................. 1-41
1.17.4 MTT TRANSPORT SYSTEM .................................................................... 1-41
1.17.5 TUNNELING ......................................................................................... 1-42
1.17.6 POWER SUPPLY AND DISTRIBUTION ....................................................... 1-45
1.18 PROJECT EXECUTION PLAN ................................................................................... 1-48
1.18.1 ENGINEERING PROGRAM ...................................................................... 1-48
1.18.2 SITE CONSTRUCTION ............................................................................ 1-49
1.18.3 COMMISSIONING PROGRAM .................................................................. 1-49
1.19 CAPITAL COST ESTIMATE ...................................................................................... 1-49
1.20 OPERATING COST ESTIMATE ................................................................................. 1-51
1.21 ECONOMIC EVALUATION ....................................................................................... 1-52

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 1.21.1 SENSITIVITY ANALYSIS .......................................................................... 1-54
1.22 PRELIMINARY ECONOMIC ASSESSMENT OF THE KSM PROJECT ................................ 1-56
1.22.1 INTRODUCTION .................................................................................... 1-56
1.22.2 MINING METHODS ............................................................................... 1-57
1.22.3 OPEN PIT MINING ................................................................................ 1-58
1.22.4 UNDERGROUND MINING – DEEP KERR, IRON CAP, AND MITCHELL ........... 1-59
1.22.5 RECOVERY METHODS ........................................................................... 1-59
1.22.6 PRODUCTION ....................................................................................... 1-60
1.22.7 CAPITAL AND OPERATING COSTS............................................................ 1-60
1.22.8 ECONOMIC ANALYSIS ........................................................................... 1-62
1.22.9 CONCLUSIONS ..................................................................................... 1-62
1.23 RECOMMENDATIONS ............................................................................................ 1-62
1.23.1 2016 PFS RECOMMENDATIONS........................................................... 1-62
1.23.2 PEA RECOMMENDATIONS ..................................................................... 1-63
2.0 INTRODUCTION ................................................................................................. 2-1
2.1 PROJECT OVERVIEW ............................................................................................... 2-1
2.2 TERMS OF REFERENCE........................................................................................... 2-1
2.2.1 2016 PREFEASIBILITY STUDY ................................................................. 2-1
2.2.2 PRELIMINARY ECONOMIC ASSESSMENT.................................................... 2-2
2.3 SOURCES OF INFORMATION .................................................................................... 2-2
2.4 EFFECTIVE DATES .................................................................................................. 2-2
2.5 QUALIFIED PERSONS .............................................................................................. 2-2
3.0 RELIANCE ON OTHER EXPERTS........................................................................ 3-1
3.1 PREFEASIBILITY STUDY ........................................................................................... 3-1
3.2 PRELIMINARY ECONOMIC ASSESSMENT ................................................................... 3-2
3.2.1 OWNERSHIP, MINERAL TENURE AND SURFACE RIGHTS .............................. 3-2
3.2.2 TAXES ................................................................................................... 3-2
4.0 PROPERTY DESCRIPTION AND LOCATION ....................................................... 4-1
5.0 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE, LOCAL RESOURCES AND
PHYSIOGRAPHY................................................................................................. 5-1
6.0 HISTORY ............................................................................................................ 6-1
6.1 EXPLORATION HISTORY .......................................................................................... 6-1
6.2 HISTORICAL RESOURCE ESTIMATES ......................................................................... 6-4
6.3 HISTORY OF PRODUCTION ....................................................................................... 6-4
7.0 GEOLOGICAL SETTING AND MINERALIZATION ................................................ 7-1
7.1 GEOLOGICAL SETTING ............................................................................................ 7-1
7.2 MINERALIZATION ................................................................................................... 7-4
7.2.1 KERR ZONE........................................................................................... 7-4
7.2.2 SULPHURETS ZONE .............................................................................. 7-12
7.2.3 MITCHELL ZONE .................................................................................. 7-16
7.2.4 IRON CAP ZONE ................................................................................... 7-24

vi 735-1552880100-REP-R0002-02
8.0 DEPOSIT TYPES ................................................................................................. 8-1
9.0 EXPLORATION ................................................................................................... 9-1
9.1 2012 KSM EXPLORATION PROGRAM ..................................................................... 9-1
9.1.1 RESULTS OF 2012 EXPLORATION PROGRAM ............................................ 9-1
9.1.2 INTERPRETATION OF 2012 EXPLORATION DATA ........................................ 9-5
9.2 2013 KSM EXPLORATION PROGRAM ..................................................................... 9-5
9.2.1 RESULTS OF 2013 EXPLORATION PROGRAM ............................................ 9-6
9.2.2 INTERPRETATION OF 2013 EXPLORATION DATA ...................................... 9-10
9.3 2014 KSM EXPLORATION PROGRAM ................................................................... 9-11
9.3.1 RESULTS OF 2014 EXPLORATION PROGRAM .......................................... 9-11
9.3.2 INTERPRETATION OF 2014 EXPLORATION DATA ...................................... 9-15
9.4 2015 KSM EXPLORATION PROGRAM ................................................................... 9-15
9.4.1 RESULTS OF 2015 EXPLORATION PROGRAM .......................................... 9-16
9.4.2 INTERPRETATION OF 2015 EXPLORATION DATA ...................................... 9-19
9.5 STATEMENT REGARDING NATURE OF INVESTIGATIONS ............................................. 9-20
10.0 DRILLING ......................................................................................................... 10-1
10.1 INTRODUCTION .................................................................................................... 10-1
10.2 2013 TO 2015 DRILLING CAMPAIGNS: TYPE AND EXTENT ..................................... 10-2
10.3 DRILLING PROCEDURES: 2013 TO 2015 CAMPAIGNS ........................................... 10-9
10.4 SUMMARY AND INTERPRETATION OF 2013 TO 2015 DRILLING CAMPAIGNS ........... 10-11
10.4.1 KERR DEPOSIT .................................................................................. 10-11
10.4.2 SULPHURETS DEPOSIT ....................................................................... 10-12
10.4.3 MITCHELL DEPOSIT ............................................................................ 10-13
10.4.4 IRON CAP DEPOSIT............................................................................. 10-14
10.5 QP COMMENTS REGARDING DRILLING AND SAMPLING FACTORS............................ 10-14
11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY ....................................... 11-1
11.1 INTRODUCTION .................................................................................................... 11-1
11.2 PRE-2012 SAMPLE PREPARATION METHODS AND PROCEDURES ............................. 11-1
11.2.1 PRE-2012 STATEMENT ON SAMPLE PREPARATION PERSONNEL............... 11-1
11.2.2 PRE-2012 SAMPLE PREPARATION AND DISPATCH .................................. 11-1
11.2.3 PRE-2012 ANALYTICAL PROCEDURES ................................................... 11-2
11.2.4 PRE-2012 QUALITY CONTROL MEASURES ............................................. 11-3
11.2.5 PRE-2012 CORRECTIVE ACTION ......................................................... 11-21
11.2.6 2012 SAMPLING PROGRAMS – QUALIFIED PERSON’S OPINION ............. 11-21
11.3 2012-2013 SAMPLE PREPARATION METHODS AND PROCEDURES ....................... 11-21
11.3.1 2012-2013 STATEMENT ON SAMPLE PREPARATION PERSONNEL ......... 11-21
11.3.2 2012-2013 SAMPLE PREPARATION AND DISPATCH ............................. 11-21
11.3.3 2012-2013 ANALYTICAL PROCEDURES .............................................. 11-22
11.3.4 2012-2013 QUALITY CONTROL MEASURES ........................................ 11-24
11.3.5 2012-2013 BLANK SAMPLE PERFORMANCE ...................................... 11-24
11.3.6 2012-2013 STANDARD REFERENCE SAMPLE PERFORMANCE .............. 11-27
11.3.7 2012-2013 DUPLICATE SAMPLE PERFORMANCE ................................ 11-34
11.3.8 2012-2013 CHECK ASSAY RESULTS ................................................. 11-37
11.3.9 2012-2013 CORRECTIVE ACTION ...................................................... 11-39

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 11.3.10 2012-2013 QUALIFIED PERSON'S OPINION ........................................ 11-40
11.4 2014-2015 SAMPLE PREPARATION METHODS AND PROCEDURES ....................... 11-40
11.4.1 2014-2015 STATEMENT ON SAMPLE PREPARATION PERSONNEL ......... 11-41
11.4.2 2014-2015 SAMPLE PREPARATION AND DISPATCH ............................. 11-41
11.4.3 2014-2015 ANALYTICAL PROCEDURES .............................................. 11-41
11.4.4 2014-2015 QUALITY CONTROL MEASURES ........................................ 11-41
11.4.5 2014-2015 BLANK SAMPLE PERFORMANCE ...................................... 11-42
11.4.6 2014-2015 STANDARD REFERENCE SAMPLE PERFORMANCE .............. 11-43
11.4.7 2014-2015 DUPLICATE SAMPLE PERFORMANCE ................................ 11-50
11.4.8 2014-2015 CHECK ASSAY RESULTS ................................................. 11-50
11.4.9 2014-2015 CORRECTIVE ACTION ...................................................... 11-52
11.4.10 2014-2015 QUALIFIED PERSON'S OPINION ........................................ 11-53
12.0 DATA VERIFICATION ........................................................................................ 12-1
12.1.1 ASSAY VERIFICATION ............................................................................ 12-1
12.1.2 DRILL HOLE LOGS................................................................................ 12-2
12.1.3 DOWN-HOLE SURVEYS .......................................................................... 12-2
12.1.4 QUALITY ASSURANCE/QUALITY CONTROL ............................................... 12-2
12.1.5 TOPOGRAPHIC DATA ............................................................................. 12-2
12.2.1 ASSAY VERIFICATION ............................................................................ 12-3
12.2.2 DRILL HOLE LOGS................................................................................ 12-3
12.2.3 DOWN-HOLE SURVEYS .......................................................................... 12-4
12.2.4 QUALITY ASSURANCE/QUALITY CONTROL ............................................... 12-4
12.3.1 ASSAY VERIFICATION ............................................................................ 12-4
12.3.2 DRILL HOLE LOGS................................................................................ 12-5
12.3.3 DOWN-HOLE SURVEYS .......................................................................... 12-5
12.3.4 QUALITY ASSURANCE/QUALITY CONTROL ............................................... 12-5
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING .............................. 13-1
13.1.2 RECENT TEST WORK – 2007 TO 2016 ................................................ 13-6
13.2 METALLURGICAL PERFORMANCE PROJECTION ...................................................... 13-92
14.0 MINERAL RESOURCE ESTIMATES .................................................................. 14-1
14.1 SULPHURETS AND MITCHELL DEPOSITS ................................................................. 14-1
14.1.1 GOLD GRADE DISTRIBUTION – SULPHURETS AND MITCHELL .................... 14-1
14.1.2 COPPER GRADE DISTRIBUTION – SULPHURETS AND MITCHELL ................. 14-2
14.1.3 ASSAY GRADE CAPPING – SULPHURETS AND MITCHELL ........................... 14-7
14.1.4 DRILL HOLE COMPOSITES – SULPHURETS AND MITCHELL ........................ 14-9
14.1.5 GEOLOGIC CONSTRAINTS - SULPHURETS AND MITCHELL ........................ 14-10
14.1.6 VARIOGRAPHY – SULPHURETS AND MITCHELL ...................................... 14-11
14.1.7 GRADE ESTIMATION PARAMETERS – SULPHURETS-MITCHELL................. 14-15
14.1.8 GRADE MODEL VERIFICATION - SULPHURETS AND MITCHELL .................. 14-19
14.1.9 RESOURCE CLASSIFICATION – SULPHURETS AND MITCHELL ................... 14-31
14.2 KERR DEPOSIT .................................................................................................. 14-33
14.2.1 METAL DISTRIBUTION – KERR............................................................. 14-33
14.2.2 HIGH-GRADE OUTLIERS – KERR .......................................................... 14-36
14.2.3 DRILL HOLE COMPOSITING – KERR ..................................................... 14-38
14.2.4 VARIOGRAPHY – KERR ....................................................................... 14-39
14.2.5 GRADE ESTIMATION PARAMETERS – KERR ........................................... 14-41

viii 735-1552880100-REP-R0002-02
 14.2.6 MODEL VALIDATION – KERR ............................................................... 14-44
14.2.7 RESOURCE CLASSIFICATION – KERR .................................................... 14-49
14.3 IRON CAP DEPOSIT ............................................................................................ 14-49
14.3.1 METAL DISTRIBUTION – IRON CAP ....................................................... 14-50
14.3.2 HIGH-GRADE OUTLIERS – IRON CAP ..................................................... 14-53
14.3.3 DRILL HOLE COMPOSITING – IRON CAP ............................................... 14-55
14.3.4 VARIOGRAPHY – IRON CAP .................................................................. 14-55
14.3.5 GRADE ESTIMATION PARAMETERS – IRON CAP ..................................... 14-57
14.3.6 MODEL VALIDATION – IRON CAP.......................................................... 14-61
14.3.7 RESOURCE CLASSIFICATION – IRON CAP .............................................. 14-67
14.4 SUMMARY OF MINERAL RESOURCES ................................................................... 14-67
14.5 GENERAL DISCUSSION ....................................................................................... 14-69
15.0 MINERAL RESERVE ESTIMATES ..................................................................... 15-1
16.0 MINING METHODS .......................................................................................... 16-1
16.1 INTRODUCTION .................................................................................................... 16-1
16.1.1 PRODUCTION RATE CONSIDERATION ...................................................... 16-1
16.2 OPEN PIT MINING OPERATIONS............................................................................. 16-1
16.2.1 INTRODUCTION .................................................................................... 16-1
16.2.2 MINING DATUM ................................................................................... 16-2
16.2.3 OPEN PIT PRODUCTION RATE CONSIDERATIONS ...................................... 16-2
16.2.4 OPEN PIT MINE PLANNING 3D BLOCK MODEL ....................................... 16-2
16.2.5 PIT SLOPE DESIGN ANGLES .................................................................. 16-5
16.2.6 ECONOMIC PIT LIMITS, PIT DESIGNS .................................................... 16-14
16.2.7 DETAILED PIT DESIGNS ...................................................................... 16-22
16.2.8 OPEN PIT MINE PLAN ......................................................................... 16-28
16.2.9 OPEN PIT MINE OPERATIONS .............................................................. 16-41
16.2.10 MINE CLOSURE AND RECLAMATION ..................................................... 16-46
16.2.11 OPEN PIT MINE EQUIPMENT ............................................................... 16-46
16.3 UNDERGROUND MINING OPERATIONS ................................................................. 16-50
16.3.1 UNDERGROUND MINE DESIGN INPUTS ................................................. 16-52
16.3.2 MITCHELL UNDERGROUND.................................................................. 16-53
16.3.3 IRON CAP UNDERGROUND .................................................................. 16-57
16.4 MINE PRODUCTION SCHEDULE ........................................................................... 16-61
17.0 RECOVERY METHODS ..................................................................................... 17-1
17.1 INTRODUCTION .................................................................................................... 17-1
17.2 MAJOR PROCESS DESIGN CRITERIA ....................................................................... 17-5
17.3 PROCESS PLANT DESCRIPTION ............................................................................. 17-8
17.3.1 PRIMARY CRUSHING............................................................................. 17-8
17.3.2 COARSE ORE TRANSPORT FROM MITCHELL SITE TO TREATY SITE ............. 17-9
17.3.3 COARSE MATERIAL HANDLING ............................................................. 17-10
17.3.4 SECONDARY CRUSHING ...................................................................... 17-10
17.3.5 TERTIARY CRUSHING MATERIAL CONVEYANCE/STORAGE ....................... 17-10
17.3.6 TERTIARY CRUSHING .......................................................................... 17-11
17.3.7 PRIMARY GRINDING ........................................................................... 17-11
17.3.8 COPPER, GOLD AND MOLYBDENUM FLOTATION..................................... 17-11

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 17.3.9 CONCENTRATE DEWATERING ............................................................... 17-13
17.3.10 GOLD RECOVERY FROM GOLD-BEARING PYRITE PRODUCTS.................... 17-14
17.3.11 TREATMENT OF LEACH RESIDUES ........................................................ 17-16
17.3.12 TAILING MANAGEMENT ....................................................................... 17-17
17.3.13 REAGENTS HANDLING ........................................................................ 17-17
17.3.14 WATER SUPPLY ................................................................................. 17-18
17.3.15 AIR SUPPLY ....................................................................................... 17-19
17.3.16 ASSAY AND METALLURGICAL LABORATORY............................................ 17-20
17.3.17 PROCESS CONTROL AND INSTRUMENTATION ......................................... 17-20
17.4 YEARLY PRODUCTION PROJECTION ...................................................................... 17-21
18.0 PROJECT INFRASTRUCTURE ........................................................................... 18-1
MINE SITE LAYOUT ............................................................................... 18-1
PROCESSING AND TAILING MANAGEMENT AREA LAYOUT .......................... 18-2
18.2 TAILING, MINE ROCK, AND WATER MANAGEMENT .................................................. 18-7
INTRODUCTION .................................................................................... 18-7
MINE SITE CHARACTERIZATION .............................................................. 18-8
TMF SITE CHARACTERIZATION............................................................. 18-12
KSM PROJECT AREA SEISMICITY ......................................................... 18-16
DESIGN CRITERIA............................................................................... 18-17
ROCK STORAGE FACILITIES ................................................................. 18-20
MINE SITE WATER MANAGEMENT........................................................ 18-21
WATER TREATMENT ........................................................................... 18-27
TAILING MANAGEMENT FACILITY DESIGN .............................................. 18-32
18.3 TUNNELS .......................................................................................................... 18-44
MITCHELL-TREATY TUNNELS ............................................................... 18-45
18.4 MINE TO MILL ORE TRANSPORT SYSTEM ............................................................. 18-56
MTT FREIGHT AND PERSONNEL TRANSPORT ........................................ 18-64
18.5 SITE ROADS ...................................................................................................... 18-67
18.6 PROCESS PLANT FACILITIES ................................................................................ 18-70
TREATY OPC ..................................................................................... 18-71
MINE SITE......................................................................................... 18-73
LANDFILLS ........................................................................................ 18-74
18.9 COMMUNICATIONS SYSTEM ................................................................................ 18-75
18.10 FRESH AND POTABLE WATER SUPPLY .................................................................. 18-76
18.11 POWER SUPPLY AND PRIMARY DISTRIBUTION....................................................... 18-76
NORTHWEST TRANSMISSION LINE ....................................................... 18-77
TREATY CREEK SWITCHING STATION .................................................... 18-78
TRANSMISSION LINE EXTENSION TO KSM ............................................ 18-79
SYSTEM STUDIES ............................................................................... 18-79
ELECTRIC UTILITY REQUIREMENTS, TARIFFS, AND COST OF
ELECTRIC POWER .............................................................................. 18-80
TREATY PLANT MAIN SUBSTATION NO. 1 .............................................. 18-82
138 KV CABLE.................................................................................. 18-83
MITCHELL SUBSTATION NO. 2 ............................................................. 18-83
SITE POWER DISTRIBUTION ................................................................. 18-84
MINE POWER ................................................................................ 18-84
CONSTRUCTION AND STANDBY POWER ............................................ 18-84

x 735-1552880100-REP-R0002-02
 ENERGY RECOVERY AND SELF GENERATION ..................................... 18-85
MINE AND PLANT POWER CONSUMPTION ............................................. 18-86
MAIN SUBSTATIONS ........................................................................... 18-87
POWER DISTRIBUTION – TREATY PLANT MAIN SUBSTATION NO. 1 .......... 18-87
MITCHELL SUBSTATION NO. 2............................................................. 18-88
ANCILLARY SYSTEMS .......................................................................... 18-89
BACKGROUND ................................................................................... 18-89
OBJECTIVES AND METHODOLOGY ......................................................... 18-90
ROUTE DESCRIPTIONS ........................................................................ 18-91
ROAD DESIGN REQUIREMENTS............................................................ 18-97
DESIGN UPDATES (2012-2016) ....................................................... 18-98
18.14 PROPOSED WINTER ACCESS ROAD ................................................................... 18-101
18.16 PRELIMINARY CONSTRUCTION EXECUTION PLAN ................................................ 18-106
INTRODUCTION ............................................................................... 18-106
EARLY WORKS PLAN ....................................................................... 18-107
PROJECT SCOPE ............................................................................. 18-108
PROJECT SCHEDULE ........................................................................ 18-110
ENGINEERING AND PROCUREMENT ................................................... 18-113
CONSTRUCTION MANAGEMENT ......................................................... 18-113
CONSTRUCTION SUPERVISION AND CONTRACTOR MANAGEMENT.......... 18-113
CONTRACTING PACKAGING AND STRATEGY OVERVIEW ........................ 18-115
SITE ORGANIZATION STRUCTURE ...................................................... 18-116
CONSTRUCTION INFRASTRUCTURE ................................................ 18-117
FIELD ENGINEERING ................................................................... 18-118
QUALITY ASSURANCE/QUALITY CONTROL SYSTEMS........................ 18-119
HEALTH, SAFETY & SECURITY ...................................................... 18-119
ENVIRONMENTAL AND COMMUNITY AFFAIRS .................................. 18-122
PRE-COMMISSIONING/COMMISSIONING ....................................... 18-123
18.17 OWNER’S IMPLEMENTATION PLAN .................................................................... 18-125
19.0 MARKET STUDIES AND CONTRACTS .............................................................. 19-1
19.1 COPPER CONCENTRATE ........................................................................................ 19-1
19.1.1 MARKETABILITY ................................................................................... 19-1
19.1.2 SMELTING TERMS ................................................................................ 19-1
19.1.3 COPPER CONCENTRATES CONTRACTS AND TERMS .................................. 19-2
19.2 MOLYBDENITE CONCENTRATE ............................................................................... 19-5
19.2.1 SMELTING CHARGE .............................................................................. 19-5
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCI OR COMMUNITY
IMPACT ............................................................................................................ 20-1
20.1 LICENSING AND PERMITTING................................................................................. 20-1
20.1.1 PROVINCIAL PROCESS .......................................................................... 20-1
20.1.2 FEDERAL PROCESS .............................................................................. 20-2
20.1.3 NISGA’A FINAL AGREEMENT .................................................................. 20-3
20.1.4 PROVINCIAL PERMITS ........................................................................... 20-4
20.1.5 FEDERAL PERMITS ............................................................................... 20-4
20.2 ENVIRONMENTAL SETTINGS AND STUDIES .............................................................. 20-7
20.2.1 BIOPHYSICAL SETTING .......................................................................... 20-7

xi 735-1552880100-REP-R0002-02
 20.2.2 ECONOMIC, SOCIAL, AND CULTURAL SETTING ....................................... 20-18
20.3 WATER MANAGEMENT ....................................................................................... 20-22
20.3.1 OVERVIEW OF WATER MANAGEMENT ................................................... 20-22
20.3.2 SUMMARY OF WATER MANAGEMENT PLAN ........................................... 20-25
20.4 WASTE MANAGEMENT ....................................................................................... 20-27
20.4.1 TAILING MANAGEMENT FACILITY MANAGEMENT AND
MONITORING PLAN ............................................................................ 20-27
20.4.2 TAILINGS ALTERNATIVE ASSESSMENT ................................................... 20-32
20.4.3 BEST AVAILABLE TAILINGS TECHNOLOGY ASSESSMENT .......................... 20-38
20.4.4 WASTE ROCK MANAGEMENT............................................................... 20-38
20.4.5 DOMESTIC AND INDUSTRIAL WASTE MANAGEMENT ............................... 20-44
20.5 AIR QUALITY MANAGEMENT INCLUDING GREENHOUSE GASES ................................ 20-53
20.5.1 AIR QUALITY MANAGEMENT PLAN ........................................................ 20-53
20.5.2 GREENHOUSE GAS MANAGEMENT PLAN .............................................. 20-58
20.6 ENVIRONMENTAL MANAGEMENT SYSTEM ............................................................ 20-64
20.7 CLOSURE AND RECLAMATION .............................................................................. 20-66
20.7.1 REGULATORY FRAMEWORK ................................................................. 20-66
20.7.2 CLOSURE AND RECLAMATION OBJECTIVES ............................................ 20-69
20.7.3 SOIL HANDLING PLAN ........................................................................ 20-71
20.7.4 CLOSURE AND RECLAMATION PLANNING .............................................. 20-72
21.0 CAPITAL AND OPERATING COST ESTIMATES ................................................. 21-1
21.1 INITIAL CAPITAL COSTS ......................................................................................... 21-1
21.1.1 EXCLUSIONS ........................................................................................ 21-4
21.1.2 LABOUR RATES .................................................................................... 21-5
21.1.3 CONCRETE AND STRUCTURAL STEEL ...................................................... 21-5
21.1.4 ASSUMPTIONS ..................................................................................... 21-7
21.1.5 DIRECT COSTS ..................................................................................... 21-7
21.1.6 INDIRECT COSTS ................................................................................ 21-16
21.1.7 OWNER’S COSTS ............................................................................... 21-20
21.1.8 CONTINGENCY ................................................................................... 21-20
21.2 SUSTAINING CAPITAL COSTS ............................................................................... 21-21
21.2.1 MINE SITE......................................................................................... 21-22
21.2.2 OPEN PIT MINING .............................................................................. 21-22
21.2.3 UNDERGROUND MINING (BLOCK CAVES) ............................................. 21-23
21.2.4 MINE SITE WATER TREATMENT ........................................................... 21-24
21.2.5 PROCESS .......................................................................................... 21-25
21.2.6 NORTHWEST TRANSMISSION LINE CONTRIBUTION ................................. 21-26
21.2.7 MCTAGG DIVERSION TUNNEL MINI HYDRO GENERATION STATION .......... 21-27
21.2.8 TAILING MANAGEMENT FACILITY .......................................................... 21-27
21.2.9 OTHER SUSTAINING CAPITAL COSTS..................................................... 21-28
21.3 OPERATING COSTS ............................................................................................ 21-28
21.3.1 OPEN PIT MINE OPERATING COSTS ..................................................... 21-31
21.3.2 UNDERGROUND MINING OPERATING COSTS ......................................... 21-34
21.3.3 PROCESS OPERATING COSTS .............................................................. 21-36
21.3.4 TMF DAM MANAGEMENT OPERATING COSTS ....................................... 21-46
21.3.5 MINE SITE WATER MANAGEMENT COSTS ............................................. 21-47
21.3.6 GENERAL AND ADMINISTRATIVE ........................................................... 21-48

xii 735-1552880100-REP-R0002-02
 21.3.7 SITE SERVICES .................................................................................. 21-49
22.0 ECONOMIC ANALYSIS ..................................................................................... 22-1
22.1 INTRODUCTION .................................................................................................... 22-1
22.2 PRE-TAX MODEL ................................................................................................. 22-2
22.2.1 FINANCIAL EVALUATIONS: NPV AND IRR ................................................ 22-2
22.3 METAL PRICE SCENARIOS..................................................................................... 22-3
22.4 SENSITIVITY ANALYSIS .......................................................................................... 22-4
22.5 POST-TAX FINANCIAL EVALUATIONS ........................................................................ 22-6
22.5.1 CANADIAN FEDERAL AND BC PROVINCIAL INCOME TAX REGIME ................ 22-6
22.5.2 BC MINERAL TAX REGIME .................................................................... 22-7
22.5.3 TAXES AND POST-TAX FINANCIAL RESULTS .............................................. 22-8
22.6 ROYALTIES ........................................................................................................ 22-10
22.7 SMELTER TERMS ............................................................................................... 22-10
22.8 CONCENTRATE AND DORÉ TRANSPORT LOGISTICS................................................. 22-10
22.8.1 CONCENTRATE TRANSPORT INSURANCE ............................................... 22-11
22.8.2 MARKETING AND OWNERS REPRESENTATION ....................................... 22-11
22.8.3 CONCENTRATE LOSSES....................................................................... 22-11
23.0 ADJACENT PROPERTIES ................................................................................. 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION ................................................ 24-1
24.16 MINING METHODS ............................................................................................... 24-1
24.16.1 OPEN PIT MINING METHOD .................................................................. 24-1
24.16.2 DEEP KERR MINING METHODS ........................................................... 24-13
24.16.3 IRON CAP MINING METHODS .............................................................. 24-24
24.16.4 MITCHELL MINING METHODS.............................................................. 24-32
24.17 RECOVERY METHODS......................................................................................... 24-42
24.17.1 PROCESS PLANT ................................................................................ 24-43
24.17.2 FLOWSHEET DESCRIPTION .................................................................. 24-43
24.17.3 MILL DESIGN CRITERIA....................................................................... 24-50
24.17.4 MAJOR EQUIPMENT SIZING CRITERIA ................................................... 24-50
24.17.5 INTERPRETATION AND CONCLUSIONS ................................................... 24-52
24.18 PROJECT INFRASTRUCTURE ................................................................................. 24-53
24.18.1 ONSITE ............................................................................................. 24-53
24.18.2 OFF-SITE INFRASTRUCTURE ................................................................. 24-56
24.18.3 DEEP KERR PROJECT INFRASTRUCTURE ............................................... 24-56
24.18.4 IRON CAP PROJECT INFRASTRUCTURE .................................................. 24-59
24.18.5 MITCHELL PROJECT INFRASTRUCTURE.................................................. 24-62
24.19 MARKET STUDIES AND CONTRACTS ..................................................................... 24-64
24.19.1 COPPER CONCENTRATE ...................................................................... 24-64
24.20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ......... 24-68
24.21 CAPITAL AND OPERATING COSTS ......................................................................... 24-70
24.21.1 CAPITAL COST ESTIMATES ................................................................... 24-71
24.21.2 OPERATING COST ESTIMATES .............................................................. 24-72
24.21.3 COMMENTS ON SECTION 21 ............................................................... 24-76
24.22 ECONOMIC ANALYSIS ......................................................................................... 24-76

xiii 735-1552880100-REP-R0002-02
 24.22.1 METHODOLOGY USED ........................................................................ 24-77
24.22.2 FINANCIAL MODEL PARAMETERS ......................................................... 24-77
24.22.3 FINANCIAL RESULTS ........................................................................... 24-80
24.22.4 SENSITIVITY ANALYSIS ........................................................................ 24-81
25.0 INTERPRETATIONS AND CONCLUSIONS ........................................................ 25-1
25.11.1 OPEN PIT ............................................................................................ 25-9
25.12.1 UNDERGROUND MINING RISKS ........................................................... 25-14
25.12.2 MARKETING RISKS ............................................................................ 25-15
26.0 RECOMMENDATIONS ..................................................................................... 26-1
26.2 PRE-FEASIBILITY STUDY RECOMMENDATIONS ......................................................... 26-1
26.2.1 MINING............................................................................................... 26-1
26.2.2 ROCK STORAGE FACILITIES ................................................................... 26-4
26.2.3 WATER ............................................................................................... 26-5
26.2.4 TMF AREA .......................................................................................... 26-8
26.2.5 TUNNELS ............................................................................................ 26-9
26.2.6 METALLURGICAL TESTING AND PROCESS ENGINEERING ......................... 26-10
26.2.7 MTT TRANSPORT SYSTEM .................................................................. 26-11
26.2.8 KSM EXPLORATION ........................................................................... 26-12
26.3 RECOMMENDATIONS FROM THE PRELIMINARY ECONOMIC ASSESSMENT ................. 26-12
26.3.2 DEEP KERR EXPLORATION AND MINERAL RESOURCE DRILLING .............. 26-12
26.3.3 DEEP KERR GEOTECHNICAL STUDIES ................................................... 26-13
26.3.4 DEEP KERR METALLURGICAL TESTWORK ............................................. 26-13
27.0 REFERENCES .................................................................................................. 27-1

APPENDICES

APPENDIX A CERTIFICATES OF QUALIFIED PERSONS

APPENDIX B SMELTING AND REFINING TERMS
APPENDIX C PROCESS FLOW DIAGRAMS, GENERAL LAYOUTS, AND EQUIPMENT LIST
APPENDIX D PROCESS DESIGN CRITERIA
APPENDIX E OPEN PIT AND UNDERGROUND MINING, TUNNELS, AND MTT TRANSPORT SYSTEM
APPENDIX F MINING GEOTECHNICAL AND GEOHAZARDS
APPENDIX G CONSTRUCTION SCHEDULE AND LOGISTICS
APPENDIX H TAILING, WATER MANAGEMENT, AND ROCK STORAGE FACILITIES
APPENDIX I ELECTRICAL POWER SUPPLY
APPENDIX J PERMANENT AND TEMPORARY ACCESS ROADS

xiv 735-1552880100-REP-R0002-02
APPENDIX K ENVIRONMENTAL
APPENDIX L CAPITAL AND OPERATING COSTS
APPENDIX M ECONOMIC ANALYSIS
APPENDIX N KSM PROPERTY CLAIMS INFORMATION

NOTE: APPENDICES B THROUGH N ARE AVAILABLE ON REQUEST

AT THE SEABRIDGE GOLD INC. OFFICES IN TORONTO

LIST OF TABLES

Table 1.1 Projected Economic Results ........................................................................................ 1-4

Table 1.2 Average Annual Metal Production (Metal Recovered)................................................ 1-5
Table 1.3 KSM Mineral Resources as of May 31, 2016 .......................................................... 1-15
Table 1.4 KSM Proven and Probable Reserves as of July 31, 2016 ....................................... 1-20
Table 1.5 2016 PFS LOM Production ........................................................................................ 1-21
Table 1.6 Summary of Infrastructure and Water Tunnels ........................................................ 1-43
Table 1.7 Tunnel Support Class and Advance Rates for the MTT ............................................ 1-44
Table 1.8 2016 PFS Initial Capital Cost Summary .................................................................... 1-50
Table 1.9 2016 PFS Average Operating Cost Summary ........................................................... 1-51
Table 1.10 2016 PFS Metal Production from the Project........................................................... 1-53
Table 1.11 2016 PFS Summary of the Pre- and Post-tax Economic Evaluations ..................... 1-54
Table 1.12 Mineral Resources Included in the PEA Mine Plan .................................................. 1-58
Table 1.13 PEA Capital Cost Estimate ......................................................................................... 1-61
Table 1.14 PEA LOM Average Unit Operating Costs .................................................................... 1-61
Table 2.1 Summary of Qualified Persons .................................................................................... 2-3
Table 4.1 KSM Mineral Claims and Leases ................................................................................. 4-6
Table 4.2 KSM Placer Claims ....................................................................................................... 4-7
Table 4.3 Seabee/Tina KSM Claims ............................................................................................ 4-8
Table 6.1 Exploration Summary of the Kerr and Deep Kerr Zones ............................................ 6-2
Table 6.2 Exploration Summary of the Sulphurets, Mitchell, Iron Cap Zones, and
Exploration Targets ....................................................................................................... 6-3
Table 7.1 Kerr Zone Wireframe Models....................................................................................... 7-5
Table 7.2 Sulphurets Zone Wireframe Models.......................................................................... 7-12
Table 7.3 Mitchell Zone Wireframe Models............................................................................... 7-18
Table 7.4 Iron Cap Wireframe Models ....................................................................................... 7-25
Table 9.1 Select 2012 Kerr Drill Hole Assay Results .................................................................. 9-2
Table 9.2 Select 2012 Sulphurets Drill Hole Assay Results ....................................................... 9-2
Table 9.3 Select 2012 Ice Field Drill Hole Assay Results ........................................................... 9-3
Table 9.4 Select 2012 Camp Zone Drill Hole Assay Results ...................................................... 9-3
Table 9.5 Select 2012 Mitchell Drill Hole Assay Results ............................................................ 9-4
Table 9.6 Select 2012 McQuillan Drill Hole Assay Results ........................................................ 9-5
Table 9.7 Select 2013 Kerr Drill Hole Assay Results .................................................................. 9-7
Table 9.8 Select 2013 Iron Cap Drill Hole Assay Results ........................................................... 9-9
Table 9.9 Select 2013 Camp Zone Drill Hole Assay Results .................................................... 9-10
Table 9.10 Select 2014 Kerr Drill Hole Assay Results ................................................................ 9-12

xv 735-1552880100-REP-R0002-02
Table 9.11 Select 2014 Iron Cap Drill Hole Assay Results ......................................................... 9-13
Table 9.12 Select 2014 Drill Hole Assay Results ........................................................................ 9-15
Table 9.13 Select 2015 Kerr Drill Hole Assay Results ................................................................ 9-17
Table 9.14 Select 2015 Mitchell Composited Drill Hole Assays ................................................ 9-19
Table 10.1 End-of-year 2015 KSM Drill Hole Summary.............................................................. 10-1
Table 10.2 2013 to 2015 KSM Drill Hole Summary ................................................................... 10-3
Table 10.3 KSM Drill Hole Summary by Area and Company ...................................................... 10-4
Table 11.1 ICP Detection Limits – Pre-2012 Data ...................................................................... 11-3
Table 11.2 KSM Standard Reference Materials - Pre-2012 Data.............................................. 11-6
Table 11.3 Summary of Pre-2012 Quarter Core Assay Results .............................................. 11-15
Table 11.4 Summary of Pre-2012 Same Pulp Check Assay Results ...................................... 11-18
Table 11.5 ICP Detection Limits – 2012-2013 ........................................................................ 11-23
Table 11.6 Summary of Control Samples Submitted in 2012-2013 ...................................... 11-24
Table 11.7 Summary of SRM Samples Submitted in 2012-2013 .......................................... 11-28
Table 11.8 Summary of Duplicate Samples Submitted in 2012-2013 .................................. 11-34
Table 11.9 2012-2013 Check Assay Results - ALS vs. AcmeLabs.......................................... 11-37
Table 11.10 Summary of Control Samples Submitted in 2014-2015 ...................................... 11-42
Table 11.11 Summary of Control Samples Submitted in 2014-2015 ...................................... 11-44
Table 11.12 Summary of Duplicate Samples Submitted in 2014-2015 .................................. 11-50
Table 11.13 2014-2015 Check Assay Results – ALS vs. AcmeLabs ........................................ 11-51
Table 12.1 Pre-2012 Database Verification ................................................................................ 12-1
Table 12.2 2012-2013 Database Verification ............................................................................ 12-3
Table 12.3 2014-2015 Database Verification ............................................................................ 12-5
Table 13.1 Metallurgical Test Work Programs............................................................................. 13-1
Table 13.2 Test Samples – Coastech, 1989 ............................................................................... 13-2
Table 13.3 Test Samples – Placer Dome, 1990 ......................................................................... 13-3
Table 13.4 Test Samples – Placer Dome, 1991 ......................................................................... 13-3
Table 13.5 Mineralogical Characteristics – Placer Dome, 1990 ............................................... 13-3
Table 13.6 SG Determination Results.......................................................................................... 13-4
Table 13.7 Flotation Test Results – Placer Dome, 1991............................................................ 13-6
Table 13.8 Test Samples – Mitchell, 2007 (G&T) ....................................................................... 13-7
Table 13.9 Head Assay on Variability Test Samples – Mitchell, 2008 (G&T) ............................ 13-8
Table 13.10 Head Assay on Composites – Mitchell, 2008 (G&T) ................................................ 13-9
Table 13.11 Metal Contents of Composites – Mitchell, 2009 (G&T) ........................................ 13-10
Table 13.12 Metal Contents of Composites – Mitchell, 2010 (G&T) ........................................ 13-10
Table 13.13 Element Content Estimate and Percent of Mineralization Type Domain ............. 13-12
Table 13.14 Metal Contents of Composites – Mitchell, 2011/2012 (G&T) ............................. 13-13
Table 13.15 Mineral Composition Data – Mitchell, 2008 (G&T) ............................................... 13-13
Table 13.16 Bond Ball Mill Work Index Test Results – Mitchell, 2008 ..................................... 13-15
Table 13.17 SMC Test Results – Mitchell, 2008 ........................................................................ 13-17
Table 13.18 SMC Test Results – Mitchell, 2011/2012 ............................................................ 13-17
Table 13.19 JK SimMet Simulation Results (60,000 t/d SABC Circuit, 2008) ........................ 13-18
Table 13.20 HPGR Average Test Results – LCT, Mitchell, 2009/2010 .................................... 13-19
Table 13.21 Simulation Results – HPGR/Ball Circuit, SGS (2009/2010) ................................ 13-22
Table 13.22 Locked Cycle Test Results – Mitchell ..................................................................... 13-36
Table 13.23 Locked Cycle Test Results – Blended Samples ..................................................... 13-39
Table 13.24 Pilot Plant Test Results – Mitchell, 2009 (G&T) .................................................... 13-40
Table 13.25 Pilot Plant Test Results - Mitchell, 2010 (G&T) ..................................................... 13-41
Table 13.26 Bulk Concentrate Mineralogy – Mitchell, 2010 (G&T) .......................................... 13-43
Table 13.27 Cu-Mo Separation LCT Test Results, 2010 ............................................................ 13-45
Table 13.28 Cyanidation Test Results – Individual Samples, Mitchell, 2008 .......................... 13-46
Table 13.29 Cyanidation Test Results – Composites, Mitchell, 2008/2009 ........................... 13-47

xvi 735-1552880100-REP-R0002-02
Table 13.30 Cyanidation Test Results on LCT Test Products – Mitchell ................................... 13-47
Table 13.31 Cyanidation Test Results on LCT Products – Mitchell/Other Zones..................... 13-48
Table 13.32 Cyanidation Test Results – LCT Products, 2009 (SGS)......................................... 13-49
Table 13.33 Gravity Separation Test Results – Mitchell ............................................................ 13-49
Table 13.34 Metal Contents of Composites – Sulphurets ......................................................... 13-51
Table 13.35 Bond Ball Mill Work Index Test Results – Sulphurets ........................................... 13-51
Table 13.36 SMC Test Results – Sulphurets, 2011/2012........................................................ 13-52
Table 13.37 Batch Flotation Tests –Sulphurets, 2009 (G&T) ................................................... 13-53
Table 13.38 Locked Cycle Test Results – Sulphurets ................................................................ 13-54
Table 13.39 Average Cyanidation Test Results – Sulphurets, 2009 (G&T) .............................. 13-55
Table 13.40 Cyanidation Test Results – Flotation LCT Products, Sulphurets, 2009–2011 ... 13-56
Table 13.41 Metal Contents of Composites – Upper Kerr, 2010 (G&T) ................................... 13-56
Table 13.42 Bond Ball Mill Work Index Test Results – Upper Kerr (G&T)................................. 13-57
Table 13.43 SMC Test Results – Upper Kerr, 2011/2012........................................................ 13-57
Table 13.44 Locked Cycle Test Results – Upper Kerr (G&T) ..................................................... 13-59
Table 13.45 Cyanidation Test Results on LCT Test Products – Upper Kerr (G&T) ......................... 60
Table 13.46 Metal Contents of Composites – Lower Kerr, 2013-2015 (ALS)................................ 61
Table 13.47 Flotation Locked Cycle Test Results – Lower Kerr ...................................................... 63
Table 13.48 Preliminary Cyanidation Test Results – Lower Kerr .............................................. 13-66
Table 13.49 Metal Contents of Composites – Iron Cap, 2010 (G&T) ....................................... 13-67
Table 13.50 Mineral Content – Sample IC-2014-MC4 - Iron Cap, 2014 (ALS) ........................ 13-69
Table 13.51 Locked Cycle Test Results – Iron Cap .................................................................... 13-74
Table 13.52 Cyanidation Test Results on LCT Test Products – Iron Cap .................................. 13-76
Table 13.53 Multi-Element Assay – Mitchell Concentrate* ....................................................... 13-77
Table 13.54 Multi-element Assay – Sulphurets/Upper Kerr/Blend Concentrate* ................... 13-79
Table 13.55 Multi-element Assay – Iron Cap/Blend Concentrate* .......................................... 13-81
Table 13.56 Multi-element Assay – Lower Kerr/Blend Concentrate* ....................................... 13-83
Table 13.57 Chemical Analysis of Cyanide Recovery Test Solution and Cyanide
Destruction Pulp ...................................................................................................... 13-86
Table 13.58 Cyanide Recovery Test Results – AVR .................................................................... 13-86
Table 13.59 Cyanide Destruction Test Results – 2009/2010 (SGS) ....................................... 13-88
Table 13.60 Recommended Conventional Thickener Operating Parameters –
2009 (Pocock) ......................................................................................................... 13-90
Table 13.61 Recommended High Rate Thickener Operating Parameters – 2009 (Pocock) ... 13-90
Table 13.62 Filtration Test Results – 2009 (Pocock) ................................................................ 13-91
Table 13.63 Cu-Au Concentrate – Cu Grade............................................................................... 13-92
Table 13.64 Cu-Au Concentrate – Metal Recovery Projections ................................................. 13-93
Table 13.65 Au-Ag Doré – Metal Recovery Projections .............................................................. 13-94
Table 13.66 Mo Concentrate Metal Recovery and Grade .......................................................... 13-95
Table 14.1 Distribution of Gold by AUZON – Sulphurets Zone ................................................... 14-3
Table 14.2 Distribution of Gold by AUZON – Mitchell ................................................................. 14-4
Table 14.3 Distribution of Copper by CUZON – Sulphurets Zone............................................... 14-5
Table 14.4 Distribution of Copper by CUZON – Mitchell Zone.................................................... 14-6
Table 14.5 Sulphurets and Mitchell Gold Grade Capping Limits ............................................... 14-9
Table 14.6 Sulphurets and Mitchell Copper Grade Capping Limits ........................................... 14-9
Table 14.7 Silver and Molybdenum Grade Capping Limits......................................................... 14-9
Table 14.8 Constraints Used to Estimate Block Grades – Sulphurets and Mitchell .............. 14-10
Table 14.9 AUZON Code Definitions.......................................................................................... 14-11
Table 14.10 CUZON Code Definitions ......................................................................................... 14-11
Table 14.11 KSM Block Model Dimensions ............................................................................... 14-15
Table 14.12 Sulphurets Zone Gold Estimation Parameters ...................................................... 14-16
Table 14.13 Mitchell Gold/Silver Estimation Parameters.......................................................... 14-17

xvii 735-1552880100-REP-R0002-02
Table 14.14 Sulphurets Copper/Molybdenum Estimation Parameters .................................... 14-18
Table 14.15 Mitchell Copper Estimation Parameters ................................................................ 14-19
Table 14.16 Mitchell Molybdenum Grade Estimation Parameters ........................................... 14-19
Table 14.17 Grade Model Bias Checks ....................................................................................... 14-29
Table 14.18 Indicated Resource Criteria .................................................................................... 14-32
Table 14.19 Inferred Resource Criteria ....................................................................................... 14-32
Table 14.20 Kerr Gold Assay Statistics ....................................................................................... 14-34
Table 14.21 Kerr Copper Assay Statistics ................................................................................... 14-35
Table 14.22 Kerr Grade Capping Limits ...................................................................................... 14-38
Table 14.23 Kerr Block Model Limits .......................................................................................... 14-41
Table 14.24 Kerr Block Model Domains ..................................................................................... 14-42
Table 14.25 Kerr Gold Grade Zones (AUZON)............................................................................. 14-42
Table 14.26 Kerr Copper Grade Zones (CUZON) ........................................................................ 14-43
Table 14.27 Kerr Global Bias Checks) ........................................................................................ 14-48
Table 14.28 Iron Cap Gold Assay Statistics ................................................................................ 14-51
Table 14.29 Iron Cap Copper Assay Statistics ............................................................................ 14-52
Table 14.30 Iron Cap Capping Limits .......................................................................................... 14-54
Table 14.31 Kerr Block Model Limits .......................................................................................... 14-57
Table 14.32 Iron Cap Grade Envelopes ...................................................................................... 14-58
Table 14.33 Iron Cap Gold Estimation Parameters .................................................................... 14-59
Table 14.34 Iron Cap Copper Estimation Parameters ............................................................... 14-59
Table 14.35 Iron Cap Silver Estimation Parameters .................................................................. 14-60
Table 14.36 Iron Cap Molybdenum Estimation Parameters ...................................................... 14-60
Table 14.37 Iron Cap Global Bias Grade Checks ....................................................................... 14-65
Table 14.38 Key Mineral Resource Parameters ......................................................................... 14-68
Table 14.39 KSM Mineral Resources.......................................................................................... 14-70
Table 15.1 Pit Mining Loss and Dilution ...................................................................................... 15-1
Table 15.2 Grade of Dilution Material by Pit Area ....................................................................... 15-1
Table 15.3 Underground Mining Dilution ..................................................................................... 15-2
Table 15.4 Site Operating Cost – Drawpoint Shut-off ................................................................. 15-3
Table 15.5 Proven and Probable Reserves ................................................................................. 15-3
Table 16.1 Major Smelter Terms used in the NSR Calculation .................................................. 16-3
Table 16.2 Metal Prices for Reserve NSR Calculation ................................................................ 16-3
Table 16.3 Estimated NSP by Mining Area .................................................................................. 16-4
Table 16.4 Mitchell Zone Pit Slope Design Parameters ............................................................. 16-8
Table 16.5 Sulphurets Zone Pit Slope Design Parameters...................................................... 16-10
Table 16.6 Kerr Zone Pit Slope Design Parameters................................................................. 16-12
Table 16.7 LG Pit Limit Primary Assumptions........................................................................... 16-15
Table 16.8 Production Schedule Assumptions......................................................................... 16-30
Table 16.9 Blasting Assumptions .............................................................................................. 16-44
Table 16.10 Major Equipment Requirements ............................................................................ 16-46
Table 16.11 Open Pit Production Drilling Assumptions ............................................................. 16-47
Table 16.12 Mine Support Equipment Fleet ............................................................................... 16-48
Table 16.13 Open Pit Ancillary Equipment Fleet ........................................................................ 16-49
Table 16.14 Mitchell Block Cave Mineral Reserves ($15 NSR Shut-off) .................................. 16-54
Table 16.15 Iron Cap Block Cave Reserves ($16 NSR Shut-off) ............................................... 16-58
Table 16.16 Summarized Production Schedule – Open Pit and Underground ........................ 16-62
Table 17.1 Major Design Criteria.................................................................................................. 17-5
Table 17.2 Projected Metallurgical Performance ..................................................................... 17-22
Table 17.3 Projected Copper Concentrate Quality ................................................................... 17-23
Table 18.1 Climate Data for the Mine Site (Sulphurets Creek Climate Station) .................... 18-11
Table 18.2 Climate Data for the TMF (Teigen Creek Climate Station)1................................... 18-15

xviii 735-1552880100-REP-R0002-02
Table 18.3 Calculated Design PGAs for TMF and RSF Sites .................................................... 18-16
Table 18.4 10,000-year Return Period Spectral Accelerations for the TMF Site ................... 18-16
Table 18.5 WSD and WSF Seepage Dam Safety and Flood Management Criteria ................ 18-17
Table 18.6 Geotechnical Stability Design Criteria for Key Areas of RSFs ............................... 18-18
Table 18.7 TMF Dam Safety and Flood Management ............................................................. 18-19
Table 18.8 Temporary Water Treatment Plant Locations ........................................................ 18-28
Table 18.9 Annual Reagent Consumption for the HDS WTP ................................................... 18-31
Table 18.10 Tailing Dam Summary ............................................................................................. 18-36
Table 18.11 KSM Pre-Production Tunnels Summary ................................................................. 18-44
Table 18.12 KSM Operational Phase Tunnels Summary ........................................................... 18-45
Table 18.13 Recommended Tunnel Support .............................................................................. 18-47
Table 18.14 Ground Support and Advance Rates ...................................................................... 18-47
Table 18.15 Estimated Freight, Fuel, and Personnel Transport Daily Requirements .............. 18-65
Table 18.16 Mine Road Cut and Fill Estimates .......................................................................... 18-69
Table 18.17 Mini Hydro and Energy Recovery Power Generation ............................................. 18-86
Table 18.18 Owner's Key Activities by Year .............................................................................. 18-128
Table 19.1 Benchmark Smelting Terms....................................................................................... 19-2
Table 20.1 KSM Project Tailing Management Facility Multiple Accounts
Analysis Results ....................................................................................................... 20-37
Table 21.1 KSM Capital Cost Estimate Structure Summary ...................................................... 21-1
Table 21.2 Capital Cost Summary ................................................................................................ 21-3
Table 21.3 Capital Cost Estimate Input Parameters ................................................................... 21-4
Table 21.4 Cost of Standard Concrete Placed ............................................................................ 21-6
Table 21.5 Cost of Structural Steel .............................................................................................. 21-6
Table 21.6 Mine Site Capital Costs .............................................................................................. 21-8
Table 21.7 Open Pit Mining Capital Costs ................................................................................... 21-8
Table 21.8 Open Pit Mine Mobile and Engineering Equipment Capital Costs ........................... 21-9
Table 21.9 Water Storage Facility Capital Costs ...................................................................... 21-10
Table 21.10 Surface Water Management Capital Cost Estimate .............................................. 21-10
Table 21.11 Water Treatment Capital Cost Estimate ................................................................. 21-11
Table 21.12 Process-Treaty OPC Capital Cost Estimate ............................................................ 21-12
Table 21.13 Ore Transport Capital Cost Estimate ...................................................................... 21-13
Table 21.14 Flotation, Concentration, and Leaching ................................................................. 21-14
Table 21.15 TMF Capital Costs .................................................................................................... 21-15
Table 21.16 Off-site Infrastructure .............................................................................................. 21-16
Table 21.17 Permanent Electrical Power Supply and Energy Recovery.................................... 21-16
Table 21.18 Indirect Capital Costs .............................................................................................. 21-17
Table 21.19 Contingency ............................................................................................................. 21-21
Table 21.20 Sustaining Capital Costs ......................................................................................... 21-22
Table 21.21 Mine Site Sustaining Capital Costs ........................................................................ 21-22
Table 21.22 Open Pit Pit Sustaining Capital Costs ..................................................................... 21-23
Table 21.23 Mitchell Block Caving Sustaining Capital Costs..................................................... 21-24
Table 21.24 Iron Cap Block Caving Sustaining Capital Costs .................................................... 21-24
Table 21.25 Mitchell Mine Site Water Treatment Sustaining Capital ....................................... 21-25
Table 21.26 Process Sustaining Capital ..................................................................................... 21-26
Table 21.27 TMF Sustaining Capital ........................................................................................... 21-27
Table 21.28 Other Sustaining Capital ......................................................................................... 21-28
Table 21.29 Operating Cost Summary ........................................................................................ 21-29
Table 21.30 Open Pit Mine Hourly Labour Rates ....................................................................... 21-32
Table 21.31 Open Pit Mining Costs per Tonne Mill Feed ........................................................... 21-33
Table 21.32 Open Pit Mining Costs per Tonne of Material Mined............................................. 21-33
Table 21.33 Summary of Mitchell Block Cave Mine Operating Cost by Activity ....................... 21-35

xix 735-1552880100-REP-R0002-02
Table 21.34 Summary of Iron Cap Block Cave Mine Operating Cost by Activity....................... 21-36
Table 21.35 Summary of Process Operating Costs by Deposit ................................................. 21-38
Table 21.36 Operating Costs per Area of Operation by Deposit ................................................ 21-40
Table 21.37 Crushing, Grinding, and Copper/Pyrite Flotation Operating Costs by Deposit..... 21-42
Table 21.38 Molybdenum Flotation Operation Costs: Mitchell and Iron Cap* ........................ 21-43
Table 21.39 Gold Leach and Recovery Circuit Operating Costs ................................................ 21-44
Table 21.40 Cyanide Recovery and Destruction Operating Costs ............................................. 21-45
Table 21.41 Tunnel Transport Operating Costs .......................................................................... 21-46
Table 21.42 Tailing Delivery and Reclaimed Water Operating Costs ........................................ 21-46
Table 21.43 Water Treatment Plant Operating Costs ................................................................ 21-47
Table 21.44 Selenium Removal Water Treatment Plant Operating .......................................... 21-48
Table 21.45 G&A Operating Cost Estimate ................................................................................. 21-49
Table 21.46 Overall Site Service Cost Estimate ......................................................................... 21-50
Table 22.1 Metal Production from the KSM Project ................................................................... 22-2
Table 22.2 Summary of the Pre-tax Economic Evaluations ........................................................ 22-4
Table 22.3 Component of the Various Taxes for all Scenarios................................................... 22-8
Table 22.4 Summary of Post-tax Financial Results ..................................................................... 22-8
Table 22.5 KSM Project Annual Cash Flow for Pre-production Period,
Years 1 to 7 and LOM................................................................................................. 22-9
Table 23.1 Pretium Snowfield Mineral Resources Using a 0.30 g/t Cut-off.............................. 23-2
Table 24.1 Mineral Resources Included in the PEA Open Pit Mine Plan ................................... 24-2
Table 24.2 Optimization Inputs .................................................................................................... 24-3
Table 24.3 Peak Equipment Fleet ................................................................................................ 24-9
Table 24.4 Support Equipment ................................................................................................. 24-12
Table 24.5 Auxiliary Equipment ................................................................................................. 24-12
Table 24.6 Deep Kerr Diluted Mineral Resources in PEA Mine Plan ...................................... 24-22
Table 24.7 Mobile Equipment Requirements, Deep Kerr ........................................................ 24-23
Table 24.8 Iron Cap Diluted Mineral Resources in PEA Mine Plan ......................................... 24-30
Table 24.9 Mobile Equipment Requirements for Iron Cap ...................................................... 24-31
Table 24.10 Mitchell Diluted Mineral Resources in PEA Mine Plan .......................................... 24-40
Table 24.11 Mobile Equipment Requirements, Mitchell ........................................................... 24-41
Table 24.12 Major PEA Process Design Criteria ......................................................................... 24-50
Table 24.13 Comminution – Major Equipment Sizing ............................................................... 24-51
Table 24.14 Copper-Gold Flotation – Major Equipment List ..................................................... 24-51
Table 24.15 Pyrite Flotation and Cyanidation – Major Equipment List ..................................... 24-52
Table 24.16 Freight, Fuel, and Personnel Volume ..................................................................... 24-54
Table 24.17 Benchmark Smelting Terms.................................................................................... 24-66
Table 24.18 Capital Cost Estimate Responsibilities by Firm ..................................................... 24-70
Table 24.19 PEA Capital Cost Estimate Summary in US$M ...................................................... 24-71
Table 24.20 Operating Cost Estimate Responsibilities by Firm ................................................. 24-73
Table 24.21 Average Onsite Operating Costs for PEA ................................................................ 24-73
Table 24.22 Metal Price Assumptions in PEA ............................................................................. 24-78
Table 24.23 PEA Financial Analysis Summary ............................................................................ 24-81
Table 24.24 PEA Cashflow on an Annualized Basis ................................................................... 24-83
Table 24.25 Average Cost per Ounce of Gold Recovered .......................................................... 24-85
Table 25.1 Summary of Major Pre- and Post-tax Results by Metal Price Scenario ................... 25-7

xx 735-1552880100-REP-R0002-02
LIST OF FIGURES

Figure 1.1 Panoramic View of KSM Deposits (Looking East)....................................................... 1-1

Figure 1.2 General Location Map .................................................................................................. 1-7
Figure 1.3 KSM Mineral Claim Map .............................................................................................. 1-8
Figure 1.4 KSM Project Geology .................................................................................................. 1-10
Figure 1.5 Mitchell Zone Cross Section ...................................................................................... 1-12
Figure 1.6 2016 PFS Mine Site Layout after Initial Construction .............................................. 1-16
Figure 1.7 2016 PFS Treaty Ore Preparation Complex Layout .................................................. 1-17
Figure 1.8 2016 PFS Ultimate Tailing Management Facility Area Layout ................................ 1-18
Figure 1.9 2016 PFS Mill Feed Production Schedule ................................................................ 1-21
Figure 1.10 2016 PFS Open Pit LOM ............................................................................................ 1-23
Figure 1.11 2016 PFS Simplified Process Flow Sheet ................................................................. 1-28
Figure 1.12 2016 PFS Site Access and Camp Locations ............................................................. 1-39
Figure 1.13 Map of the Northwest Transmission Line ................................................................. 1-46
Figure 1.14 2016 PFS Sensitivity Analysis of Pre-tax NPV at a 5% Discount Rate..................... 1-55
Figure 1.15 2016 PFS Sensitivity Analysis of Pre-tax IRR ............................................................ 1-55
Figure 1.16 2016 PFS Sensitivity Analysis of Pre-tax Payback Period ........................................ 1-56
Figure 4.1 General Location Map .................................................................................................. 4-3
Figure 4.2 KSM Mineral Claim Map .............................................................................................. 4-4
Figure 4.3 KSM Placer Claim Map................................................................................................. 4-5
Figure 7.1 Geology of the KSM District ......................................................................................... 7-3
Figure 7.2 Kerr Polished Drill Core Photographs .......................................................................... 7-7
Figure 7.3 Kerr Lithologic Cross Section ....................................................................................... 7-8
Figure 7.4 Kerr Alteration Cross Section ....................................................................................... 7-9
Figure 7.5 Kerr Lithologic Level Plan........................................................................................... 7-10
Figure 7.6 Kerr Alteration Level Plan .......................................................................................... 7-11
Figure 7.7 Sulphurets Polished Core Photographs .................................................................... 7-13
Figure 7.8 Sulphurets Lithologic Level Plan ............................................................................... 7-14
Figure 7.9 Sulphurets Lithologic Cross Section .......................................................................... 7-15
Figure 7.10 Mitchell Polished Drill Core Photographs .................................................................. 7-19
Figure 7.11 Mitchell Lithologic Cross Section ............................................................................... 7-20
Figure 7.12 Mitchell Alteration Cross Section............................................................................... 7-21
Figure 7.13 Mitchell Lithologic Level Plan .................................................................................... 7-22
Figure 7.14 Mitchell Alteration Level Plan ..................................................................................... 7-23
Figure 7.15 Iron Cap Polished Drill Core Photographs ................................................................. 7-26
Figure 7.16 Iron Cap Lithologic Cross Section .............................................................................. 7-27
Figure 7.17 Iron Cap Alteration Cross Section .............................................................................. 7-28
Figure 7.18 Iron Cap Lithologic Level Plan .................................................................................... 7-29
Figure 7.19 Iron Cap Alteration Level Plan.................................................................................... 7-30
Figure 9.1 KSM Property Geology Map ....................................................................................... 9-20
Figure 10.1 KSM Drill Hole Locations............................................................................................ 10-5
Figure 10.2 Drill Hole Locations – Kerr Deposit ........................................................................... 10-5
Figure 10.3 Drill Hole Locations – Sulphurets Deposit ................................................................ 10-7
Figure 10.4 Drill Hole Locations – Mitchell Deposit ..................................................................... 10-8
Figure 10.5 Drill Hole Locations – Iron Cap Deposit .................................................................... 10-9
Figure 11.1 2011 Gold Blank Performance .................................................................................. 11-4
Figure 11.2 2011 Copper Blank Performance ............................................................................. 11-4
Figure 11.3 2011 Gold Standard CM-4 Performance .................................................................. 11-7
Figure 11.4 2011 Copper Standard CM-4 Performance .............................................................. 11-7

xxi 735-1552880100-REP-R0002-02
Figure 11.5 2011 Molybdenum Standard CM-4 Performance .................................................... 11-8
Figure 11.6 2011 Gold Standard CM-11A Performance.............................................................. 11-8
Figure 11.7 2011 Copper Standard CM-11A Performance ......................................................... 11-9
Figure 11.8 2011 Molybdenum Standard CM-11A Performance ............................................... 11-9
Figure 11.9 2011 Gold Standard CGS-19 Performance ........................................................... 11-10
Figure 11.10 2011 Copper Standard CGS-19 Performance ....................................................... 11-10
Figure 11.11 2011 Gold Standard CGS-22 Performance ........................................................... 11-11
Figure 11.12 2011 Copper Standard CGS-22 Performance ....................................................... 11-11
Figure 11.13 2011 Gold Standard CGS-27 Performance ........................................................... 11-12
Figure 11.14 2011 Copper Standard CGS-27 Performance ....................................................... 11-12
Figure 11.15 2011 Gold Standard SEA-CL2 Performance .......................................................... 11-13
Figure 11.16 2011 Gold Standard SEA-KSM Performance ........................................................ 11-13
Figure 11.17 2011 Copper Standard SEA-KSM Performance .................................................... 11-14
Figure 11.18 2011 Molybdenum Standard SEA-KSM Performance .......................................... 11-14
Figure 11.19 2011 Quarter Core Gold QQ Plot ............................................................................ 11-16
Figure 11.20 2011 Quarter Core Copper QQ Plot ........................................................................ 11-16
Figure 11.21 2011 Quarter Core Silver QQ Plot .......................................................................... 11-17
Figure 11.22 2011 Quarter Core Molybdenum QQ Plot .............................................................. 11-17
Figure 11.23 2011 Eco Tech vs. ALS Chemex Check Assays – Gold ......................................... 11-19
Figure 11.24 2011 Eco Tech vs. ALS Chemex Check Assays – Copper ..................................... 11-19
Figure 11.25 2011 Eco Tech vs. ALS Chemex Check Assays – Silver ........................................ 11-20
Figure 11.26 2011 Eco Tech vs. ALS Chemex Check Assays – Molybdenum ........................... 11-20
Figure 11.27 2012-2013 Blank Performance – Copper ............................................................. 11-25
Figure 11.28 2012-2013 Blank Performance – Gold ................................................................. 11-25
Figure 11.29 2012-2013 Blank Performance – Silver ............................................................... 11-26
Figure 11.30 2012-2013 Blank Performance – Molybdenum ................................................... 11-26
Figure 11.31 2012-2013 SEA-KSM SRM Performance – Copper .............................................. 11-29
Figure 11.32 2012-2013 CM-25 SRM Performance – Copper .................................................. 11-29
Figure 11.33 2012-2013 CM-23 SRM Performance – Copper .................................................. 11-30
Figure 11.34 2012-2013 CM-14 SRM Performance – Copper .................................................. 11-30
Figure 11.35 2012-2013 CM-17 SRM Performance – Copper .................................................. 11-31
Figure 11.36 2012-2013 SEA-KSM SRM Performance – Gold .................................................. 11-31
Figure 11.37 CM-25 SRM Performance – Gold ........................................................................... 11-32
Figure 11.38 CM-23 SRM Performance – Gold ........................................................................... 11-32
Figure 11.39 CM-14 SRM Performance – Gold ........................................................................... 11-33
Figure 11.40 CM-17 SRM Performance – Gold ........................................................................... 11-33
Figure 11.41 2012-2013 Duplicate vs. Original Sample QQ Plot – Copper .............................. 11-35
Figure 11.42 2012-2013 Duplicate vs. Original Sample QQ Plot – Gold ................................... 11-35
Figure 11.43 2012-2013 Duplicate vs. Original Sample QQ Plot – Silver ................................. 11-36
Figure 11.44 2012-2013 Duplicate vs. Original Sample QQ Plot – Molybdenum ..................... 11-36
Figure 11.45 2012-2013 Check Assay QQ Plot - Cu ................................................................... 11-37
Figure 11.46 2012-2013 Check Assay QQ Plot - Au.................................................................... 11-38
Figure 11.47 2012-2013 Check Assay QQ Plot - Ag .................................................................... 11-38
Figure 11.48 2012-2013 Check Assay QQ Plot - Mo................................................................... 11-39
Figure 11.49 2014-2015 Blank Performance – Gold ................................................................. 11-42
Figure 11.50 2014-2015 Blank Performance – Copper ............................................................. 11-43
Figure 11.51 2014-2015 SEA-KSM SRM Performance – Copper .............................................. 11-45
Figure 11.52 2014-2015 CM-27 SRM Performance – Copper .................................................. 11-45
Figure 11.53 2014-2015 CM-25 SRM Performance – Copper .................................................. 11-46
Figure 11.54 2014-2015 CM-23 SRM Performance – Copper .................................................. 11-46
Figure 11.55 2014-2015 CM-19 SRM Performance – Copper .................................................. 11-47
Figure 11.56 2014-2015 SEA-KSM SRM Performance – Gold .................................................. 11-47

xxii 735-1552880100-REP-R0002-02
Figure 11.57 2014-2015 CM-27 SRM Performance – Gold....................................................... 11-48
Figure 11.58 2014-2015 CM-25 SRM Performance – Gold....................................................... 11-48
Figure 11.59 2014-2015 CM-23 SRM Performance – Gold....................................................... 11-49
Figure 11.60 2014-2015 CM-19 SRM Performance – Gold....................................................... 11-49
Figure 11.61 2014-2015 Check Assay QQ Plot – Copper........................................................... 11-51
Figure 11.62 2014-2015 Check Assay QQ Plot – Gold ............................................................... 11-52
Figure 13.1 2008 and 2009 Mitchell Zone Metallurgical Samples – Plan View........................ 13-8
Figure 13.2 Drill Core Interval Plan for PP Composite 3 ........................................................... 13-11
Figure 13.3 Mineral Relationship – Master Composite, Mitchell ............................................. 13-14
Figure 13.4 Comparative Ball Mill Work Index – Variability Samples, 2008 ........................... 13-16
Figure 13.5 Comparative Ball Mill Work Index – Composite Samples (Mitchell, 2008) ......... 13-16
Figure 13.6 HPGR Net Specific Energy Consumption vs. Cycle Number, 2010 ...................... 13-20
Figure 13.7 Specific Throughput (ts/hm3) vs. Cycle Number, 2010 ........................................ 13-21
Figure 13.8 Metallurgical Performance vs. Primary Grind Size – QSP 0-30, 2008 (G&T) ...... 13-24
Figure 13.9 Metallurgical Performance vs. Primary Grind Size – Hi Qtz 0-30, 2008 (G&T) ... 13-24
Figure 13.10 Effect of Primary Grind Size on Metallurgical Performance, 2008 (G&T) ............ 13-25
Figure 13.11 Effect of Primary Grind Size on Metal Recovery – Mitchell, 2009 ....................... 13-26
Figure 13.12 Copper Recovery vs. Copper Feed Grade – Mitchell, 2008 (G&T) ....................... 13-27
Figure 13.13 Copper Recovery & Concentrate Grade – Individual Samples,
Mitchell, 2008 (G&T) ............................................................................................... 13-27
Figure 13.14 Gold Recovery & Feed Grade – Individual Samples, Mitchell, 2008 (G&T) ......... 13-27
Figure 13.15 Metallurgical Performance – Composites, Mitchell, 2008 (G&T)......................... 13-28
Figure 13.16 Metallurgical Performance – Open Circuit Tests, Mitchell, 2008 (G&T) .............. 13-29
Figure 13.17 Copper Recovery vs. Copper Feed – Open Circuit Tests, 2008 ............................ 13-30
Figure 13.18 Copper Metallurgical Performance – Mitchell, 2009 (G&T) ................................. 13-31
Figure 13.19 Gold Metallurgical Performance – Mitchell, 2009 (G&T)...................................... 13-31
Figure 13.20 Metallurgical Performance – Mitchell, 2009/2010 (SGS) ................................... 13-32
Figure 13.21 Copper Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3080) .... 13-33
Figure 13.22 Gold Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3080) ........ 13-33
Figure 13.23 Copper Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3174) .... 13-34
Figure 13.24 Gold Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3174) ........ 13-34
Figure 13.25 Pilot Plant Test Flowsheet, 2010 (G&T) ................................................................. 13-41
Figure 13.26 Cu-Mo Separation Open Circuit Flotation Tests, 2010 ......................................... 13-44
Figure 13.27 Cu-Mo Separation Open Circuit Flotation Tests, 2011 ......................................... 13-44
Figure 13.28 2008/2009 Sulphurets Zone Metallurgical Samples – Plan View ...................... 13-50
Figure 13.29 Batch Flotation Tests –Sulphurets, 2009 (SGS) ................................................... 13-53
Figure 13.30 Sample Locations – 2015 Test Work ..................................................................... 13-68
Figure 13.31 Copper Recovery vs Rougher Mass Recovery and Grind Size - Iron Cap, 2015 (ALS)
13-70
Figure 13.32 Gold Recovery vs Rougher Mass Recovery and Grind Size -
Iron Cap, 2015 (ALS) ............................................................................................... 13-71
Figure 13.33 Copper Cleaner Flotation Performance - Iron Cap, 2015 (ALS) ............................ 13-71
Figure 13.34 Gold Cleaner Flotation Performance - Iron Cap, 2015 (ALS) ................................ 13-72
Figure 13.35 Variability Test Results - Copper - Iron Cap, 2015 (ALS) ....................................... 13-72
Figure 13.36 Variability Test Results - Gold - Iron Cap, 2015 (ALS) ........................................... 13-73
Figure 14.1 Sulphurets Zone Gold Assay Cumulative Probability Plot ........................................ 14-7
Figure 14.2 Mitchell Zone Gold Assay Cumulative Probability Plot ............................................. 14-7
Figure 14.3 Sulphurets Zone Copper Assay Cumulative Probability Plot .................................... 14-8
Figure 14.4 Mitchell Zone Copper Assay Cumulative Probability Plot ......................................... 14-8
Figure 14.5 Sulphurets Zone Gold Grade Correlogram ............................................................. 14-12
Figure 14.6 Mitchell Zone Gold Grade Correlogram .................................................................. 14-12
Figure 14.7 Sulphurets Zone Copper Grade Correlogram ........................................................ 14-13

xxiii 735-1552880100-REP-R0002-02
Figure 14.8 Mitchell Zone Copper Grade Correlogram ............................................................. 14-13
Figure 14.9 Sulphurets Zone 0.5 g/t AuEQ Correlogram .......................................................... 14-14
Figure 14.10 Mitchell Zone 0.5 g/t AuEQ Correlogram ............................................................... 14-14
Figure 14.11 Sulphurets Zone Gold Block Model Cross Section 23 .......................................... 14-21
Figure 14.12 Sulphurets Zone Copper Block Model Cross Section 23 ...................................... 14-22
Figure 14.13 Sulphurets Zone Gold Block Model – 1,275 m Level ........................................... 14-23
Figure 14.14 Sulphurets Zone Copper Block Model – 1,275 m Level ....................................... 14-24
Figure 14.15 Mitchell Zone Gold Block Model Cross Section 11 ............................................... 14-25
Figure 14.16 Mitchell Zone Copper Block Model Cross Section 11 ........................................... 14-26
Figure 14.17 Mitchell Zone Gold Block Model – 660 m Level.................................................... 14-27
Figure 14.18 Mitchell Zone Copper Block Model – 660 m Level ............................................... 14-28
Figure 14.19 Sulphurets Zone Gold-Copper Swath Plots by Elevation ....................................... 14-30
Figure 14.20 Mitchell Zone Gold-Copper Swath Plots by Elevation ............................................ 14-31
Figure 14.21 Kerr Gold Cumulative Probability Plot – Low-grade Domains ............................... 14-36
Figure 14.22 Kerr Gold Cumulative Probability Plot – High-grade Domains .............................. 14-37
Figure 14.23 Kerr Copper Cumulative Probability Plot – Low-grade Domains .......................... 14-37
Figure 14.24 Kerr Copper Cumulative Probability Plot – High-grade Domains ......................... 14-38
Figure 14.25 Kerr Down-hole Gold Correlogram .......................................................................... 14-39
Figure 14.26 Kerr Down-hole Copper Correlogram ..................................................................... 14-40
Figure 14.27 Kerr Omni-directional Gold Correlogram ................................................................ 14-40
Figure 14.28 Kerr Omni-directional Copper Correlogram............................................................ 14-41
Figure 14.29 Kerr Gold Model Section – 6,259,800 North ........................................................ 14-44
Figure 14.30 Kerr Copper Model Section – 6,259,800 North .................................................... 14-45
Figure 14.31 Kerr Gold Model – 800 m Level ............................................................................. 14-46
Figure 14.32 Kerr Copper Model – 800 m Level ......................................................................... 14-47
Figure 14.33 Kerr Gold Model Swath Plot – Elevations .............................................................. 14-48
Figure 14.34 Kerr Copper Model Swath Plot – Elevations .......................................................... 14-49
Figure 14.35 Iron Cap Gold Cumulative Probability Plot – All Samples ..................................... 14-53
Figure 14.36 Iron Cap Copper Cumulative Probability Plot – 0.3% and 0.4% Shells ................ 14-54
Figure 14.37 Iron Cap Down-hole Gold Correlogram ................................................................... 14-55
Figure 14.38 Iron Cap Down-hole Copper Correlogram............................................................... 14-56
Figure 14.39 Iron Cap Omni-directional Gold Correlogram ......................................................... 14-56
Figure 14.40 Iron Cap Omni-directional Copper Correlogram ..................................................... 14-57
Figure 14.41 Iron Cap Gold Model Cross Section ........................................................................ 14-62
Figure 14.42 Iron Cap Copper Model Cross Section.................................................................... 14-63
Figure 14.43 Iron Cap Gold Model – 1,200 m Level ................................................................... 14-64
Figure 14.44 Iron Cap Copper Model – 1,200 m Level ............................................................... 14-65
Figure 14.45 Iron Cap Gold Model Swath Plot – Elevations ....................................................... 14-66
Figure 14.46 Iron Cap Copper Model Swath Plot – Elevations ................................................... 14-66
Figure 16.1 Mitchell Sensitivity of Ore Tonnes to Pit Size ......................................................... 16-16
Figure 16.2 Sulphurets Sensitivity of Ore Tonnes to Pit Size .................................................... 16-17
Figure 16.3 Kerr Sensitivity of Ore Tonnes to Pit Slope and Pit Size ........................................ 16-18
Figure 16.4 Plan View of the KSM LG Pit Limits ........................................................................ 16-19
Figure 16.5 Mitchell Open/Underground Pit and Economic Pit Limit – North-South
Section at East 422950, Viewed from the East .................................................... 16-20
Figure 16.6 Sulphurets Economic Pit Limit – North-South Section at East 421725
Viewed from the East .............................................................................................. 16-21
Figure 16.7 Kerr Economic Pit Limit – East-West Section at North 6258800,
Viewed from the South ............................................................................................ 16-22
Figure 16.8 Plan View of Mitchell Pit Phases ............................................................................. 16-26
Figure 16.9 Plan View of Sulphurets Pit Phases ........................................................................ 16-27
Figure 16.10 Plan View of Kerr Pit Phases ................................................................................... 16-28

xxiv 735-1552880100-REP-R0002-02
Figure 16.11 End of Pre-production (Year -1) ............................................................................. 16-38
Figure 16.12 End of Year 5 ........................................................................................................... 16-39
Figure 16.13 Open Pit Life of Mine ............................................................................................... 16-40
Figure 16.14 Plan View of the Mitchell and Iron Cap Block Cave Mines .................................... 16-51
Figure 16.15 Section View of the Mitchell and Iron Cap Block Cave Mines (Looking North) .... 16-51
Figure 16.16 Section View of the Mitchell Block Cave Mine Design (Looking South) ............... 16-55
Figure 16.17 Mitchell Block Cave Mine Development and Production Schedules.................... 16-57
Figure 16.18 Section Looking East of the Iron Cap block Cave Mine Design ............................ 16-59
Figure 16.19 Iron Cap Block Cave Mine Development and Production Schedules ................... 16-61
Figure 16.20 KSM Mill Feed Production Schedule ...................................................................... 16-63
Figure 17.1 Simplified Process Flowsheet .................................................................................... 17-2
Figure 17.2 Treaty Process Plant Layout....................................................................................... 17-6
Figure 17.3 Treaty Process Plant Primary Grinding and Flotation Facility .................................. 17-7
Figure 17.4 Proposed Mill Feed Rates from Open Pit and Blockcaving Operations .................. 17-8
Figure 18.1 Mine Site Layout after Initial Construction................................................................ 18-4
Figure 18.2 Treaty Ore Preparation Complex Layout.................................................................... 18-5
Figure 18.3 Ultimate TMF Layout .................................................................................................. 18-6
Figure 18.4 Mine Site Mapped Geology ........................................................................................ 18-9
Figure 18.5 Mine Site Ultimate Water Management Facilities ................................................. 18-22
Figure 18.6 Mine Site Monthly Water Treatment Rate.............................................................. 18-24
Figure 18.7 Water Storage Dam Sections .................................................................................. 18-26
Figure 18.8 TMF Staging Plan ..................................................................................................... 18-34
Figure 18.9 North Tailing Dam .................................................................................................... 18-37
Figure 18.10 Saddle and Splitter Tailing Dams ........................................................................... 18-38
Figure 18.11 Southeast Tailing Dam ............................................................................................ 18-39
Figure 18.12 Schematic TMF Water Cycle ................................................................................... 18-41
Figure 18.13 Ultimate TMF with Catchments and Diversion Channels ...................................... 18-43
Figure 18.14 MTT Ventilation Circuit ............................................................................................ 18-52
Figure 18.15 Plan and Section Showing Refuge Stations Locations.......................................... 18-55
Figure 18.16 MTT Dual Track Plan View (Distances in Metres) .................................................. 18-57
Figure 18.17 MTT Train Transport Drift Section (Dimensions in Millimetres) ............................ 18-58
Figure 18.18 Ore Loading in MTT at Mitchell ............................................................................... 18-61
Figure 18.19 Ore Unloading in MTT at Treaty .............................................................................. 18-62
Figure 18.20 Train Consists for Ore, Personnel, and Freight Trains
(Dimensions in Millimetres) .................................................................................... 18-63
Figure 18.21 Treaty Personnel, Freight, and Fuel Staging and Marshalling .............................. 18-66
Figure 18.22 Treaty OPC Train Maintenance Shop...................................................................... 18-66
Figure 18.23 Mitchell Personnel, Freight, and Fuel Staging and Marshalling ........................... 18-67
Figure 18.24 Mine Site Roads ...................................................................................................... 18-68
Figure 18.25 NTL Project Map ...................................................................................................... 18-77
Figure 18.26 Proposed Access Roads Network ......................................................................... 18-100
Figure 18.27 Proposed Winter Glacier Access Route ................................................................ 18-102
Figure 18.28 Looking South up the Frank Mackie Glacier* ...................................................... 18-103
Figure 18.29 Looking South up the Ted Morris Creek Valley* .................................................. 18-103
Figure 18.30 Construction Schedule Summary (Level 1).......................................................... 18-112
Figure 18.31 KSM Project EPCM Organizational Chart ............................................................. 18-116
Figure 20.1 KSM Project Mine Site Water Management at Operations................................... 20-24
Figure 21.1 Operating Cost Distribution ..................................................................................... 21-30
Figure 21.2 Unit Operating Cost for Open Pit Mining (US$/t Material Mined)......................... 21-34
Figure 21.3 LOM Average Unit Operating Cost for Open Pit Mining (US$/t Material Mined) . 21-34
Figure 22.1 Pre-tax Undiscounted Annual and Cumulative Cash Flow ....................................... 22-3
Figure 22.2 Sensitivity Analysis of Pre-tax NPV at a 5% Discount Rate ...................................... 22-5

xxv 735-1552880100-REP-R0002-02
Figure 22.3 Sensitivity Analysis of Pre-tax IRR.............................................................................. 22-5
Figure 22.4 Sensitivity Analysis of Pre-tax Payback Period .......................................................... 22-6
Figure 24.1 Pit-by-pit Analysis Mitchell .......................................................................................... 24-4
Figure 24.2 Selected Pit Shell Mitchell ......................................................................................... 24-4
Figure 24.3 Mitchell Pit Design ...................................................................................................... 24-5
Figure 24.4 Sulphurets Pit Design ................................................................................................. 24-6
Figure 24.5 Waste Rock Facility and Stockpile Area Design........................................................ 24-7
Figure 24.6 Open Pit Production Schedule ................................................................................... 24-8
Figure 24.7 Primary Loading Fleet Requirements ..................................................................... 24-10
Figure 24.8 Annual Total Tonnes Hauled and Average Cycle Time .......................................... 24-11
Figure 24.9 Annual Total Tonnes Hauled and Truck Numbers ................................................. 24-11
Figure 24.10 GEOVIA PCBC™ Footprint for Lift 1 at 625 m Elevation ........................................ 24-16
Figure 24.11 GEOVIA PCBC™ Footprint for Lift 2 at 130 m Elevation ......................................... 24-17
Figure 24.12 GEOVIA PCBC™ Footprint for Lift 3 at -290 m Elevation ........................................ 24-17
Figure 24.13 Deep Kerr Mine General Layout with Topo ............................................................ 24-19
Figure 24.14 Typical Level Arrangement for Deep Kerr .............................................................. 24-19
Figure 24.15 Ventilation Schematic ............................................................................................. 24-20
Figure 24.16 Mine Dewatering General Arrangement................................................................. 24-21
Figure 24.17 Deep Kerr Mine Production Plan ............................................................................ 24-22
Figure 24.18 GEOVIA PCBC™ Footprint for Lift at 900 m Elevation ............................................ 24-26
Figure 24.19 Iron Cap Mine General Layout with Topo and NSR above Cdn$20/t NSR Shell . 24-27
Figure 24.20 Typical Level Arrangement for Iron Cap ................................................................. 24-28
Figure 24.21 Ventilation Schematic for Iron Cap Mine (Section Looking West) ........................ 24-28
Figure 24.22 Mine Dewatering Arrangement for Iron Cap (Plan View) ....................................... 24-29
Figure 24.23 Iron Cap Mine Production Plan ............................................................................... 24-30
Figure 24.24 Mitchell Exploration and Geotechnical Borehole Locations ................................. 24-33
Figure 24.25 GEOVIA PCBC™ Footprint for Lift at 165 m Elevation ............................................ 24-35
Figure 24.26 Mitchell Mine General Layout with Topo and NSR above Cdn$20/t NSR Shell .. 24-36
Figure 24.27 Typical Level Arrangement for Mitchell .................................................................. 24-37
Figure 24.28 Ventilation Schematic for Mitchell Mine (Section Looking North) ........................ 24-38
Figure 24.29 Mine Dewatering Arrangement for Mitchell (Long Section Looking North).......... 24-39
Figure 24.30 Mitchell Mine Production Plan ................................................................................ 24-40
Figure 24.31 Production Schedule – LOM ................................................................................... 24-44
Figure 24.32 Overall PEA Process Flow Diagram ......................................................................... 24-48
Figure 24.33 PEA Process Building Layout .................................................................................. 24-49
Figure 24.34 PEA Sensitivity Analysis ........................................................................................... 24-82

xxvi 735-1552880100-REP-R0002-02
GLOSSARY

UNITS OF MEASURE
ampere .................................................................................................................................... A
annum (year) ........................................................................................................................... a
bank cubic metres .................................................................................................................. bcm
billion tonnes ........................................................................................................................... Bt
billion ....................................................................................................................................... B
centimetre ............................................................................................................................... cm
Coefficients of Variation ......................................................................................................... CVs
cubic centimetre ..................................................................................................................... cm3
cubic metre ............................................................................................................................. m3
day ........................................................................................................................................... d
days per week ......................................................................................................................... d/wk
days per year (annum) ............................................................................................................ d/a
dead weight tonnes ................................................................................................................ DWT
degree ...................................................................................................................................... °
degrees Celsius ....................................................................................................................... °C
diameter .................................................................................................................................. ø
dollar (American) ..................................................................................................................... US$
dollar (Canadian)..................................................................................................................... Cdn$
dry metric tonne ...................................................................................................................... dmt
foot ........................................................................................................................................... ft
gallon ....................................................................................................................................... gal
gallons per minute (US) .......................................................................................................... gpm
gigawatt hours ........................................................................................................................ Gwh
gigawatt ................................................................................................................................... GW
gram ......................................................................................................................................... g
grams per litre ......................................................................................................................... g/L
grams per tonne ...................................................................................................................... g/t
gravitational constant ............................................................................................................ g
greater than ............................................................................................................................. >
hectare..................................................................................................................................... ha
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

xxvii 735-1552880100-REP-R0002-02
kilograms per day ................................................................................................................... kg/d
kilograms per hour .................................................................................................................. kg/h
kilograms per square metre ................................................................................................... kg/m2
kilometre.................................................................................................................................. km
kilometres per hour ................................................................................................................ km/h
kilonewton ............................................................................................................................... kN
kilotonne .................................................................................................................................. kt
kilovolt ..................................................................................................................................... kV
kilowatt hour............................................................................................................................ kWh
kilowatt hours per tonne......................................................................................................... kWh/t
kilowatt hours per year ........................................................................................................... kWh/a
kilowatt .................................................................................................................................... kW
less than .................................................................................................................................. <
litre ........................................................................................................................................... L
litres per hour ......................................................................................................................... L/h
litres per second ..................................................................................................................... L/s
megavolt-ampere .................................................................................................................... MVA
megawatt ................................................................................................................................. MW
metre ....................................................................................................................................... m
metres above sea level .......................................................................................................... masl
metres per second .................................................................................................................. m/s
metres per year ...................................................................................................................... m/a
microns .................................................................................................................................... µm
milligram .................................................................................................................................. mg
milligrams per litre .................................................................................................................. mg/L
millilitre .................................................................................................................................... mL
millimetre................................................................................................................................. mm
million tonnes .......................................................................................................................... Mt
million ...................................................................................................................................... M
minute (plane angle) ............................................................................................................... '
minute (time) ........................................................................................................................... min
month ...................................................................................................................................... mo
ounce ....................................................................................................................................... oz
parts per billion ....................................................................................................................... ppb
parts per million ...................................................................................................................... ppm
percent .................................................................................................................................... %
pound(s) .................................................................................................................................. lb
revolutions per minute............................................................................................................ rpm
second (plane angle) .............................................................................................................. "
second (time) .......................................................................................................................... s
specific gravity......................................................................................................................... SG
square centimetre................................................................................................................... cm2
square kilometre ..................................................................................................................... km2
square metre ........................................................................................................................... m2
square millimetre ................................................................................................................... mm2

xxviii 735-1552880100-REP-R0002-02
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
troy ounce ................................................................................................................................ troy oz
volt ........................................................................................................................................... V
week......................................................................................................................................... wk
weight/weight.......................................................................................................................... w/w
wet metric ton ......................................................................................................................... wmt

ABBREVIATIONS AND ACRONYMS

AACE® International ................................................................................................................. AACE®
abrasion index.......................................................................................................................... Ai
acid rock drainage ................................................................................................................... ARD
Acid-base accounting............................................................................................................... ABA
acidification, volatilization of hydrogen cyanide gas, and re-neutralization......................... AVR
Acoustic Televiewer ................................................................................................................. ATV
ALS Canada Ltd........................................................................................................................ ALS
alternating current ................................................................................................................... AC
aluminum oxide ....................................................................................................................... Al2O3
Amec Foster Wheeler Americas Limited................................................................................. Amec Foster Wheeler
American Institute of Professional Geologists ....................................................................... AIPG
American National Standards Institute .................................................................................. ANSI
ammonium nitrate-fuel oil ....................................................................................................... ANFO
antimony ................................................................................................................................... Sb
Aquatic Effects Monitoring Program ....................................................................................... AEMP
armful alteration, disruption, or destruction .......................................................................... HADD
arsenic ...................................................................................................................................... As
atomic absorption spectrometry ............................................................................................. AAS
atomic absorption .................................................................................................................... AA
Barrick Gold Corp. .................................................................................................................... Barrick
Basal Shear Fault .................................................................................................................... BSF
BC Environmental Assessment Act ........................................................................................ BCEAA
best applicable practices ........................................................................................................ BAP
best available technology ........................................................................................................ BAT
BGC Engineering Inc. ............................................................................................................... BGC
Biogeoclimatic Ecosystem Classification ............................................................................... BEC
BioteQ Environmental Technologies Inc. ................................................................................ BioteQ
bismuth .................................................................................................................................... Bi
British Columbia Utilities Commission.................................................................................... BCUC
British Columbia....................................................................................................................... BC
Bulk Mineral Analysis with Liberation ..................................................................................... BMAL

xxix 735-1552880100-REP-R0002-02
bulk mineral analysis ............................................................................................................... BMA
cadmium................................................................................................................................... Cd
calcium oxide ........................................................................................................................... CaO
California Air Resources Board ............................................................................................... CARB
Canadian Dam Association ..................................................................................................... CDA
Canadian Development Expense ............................................................................................ CDE
Canadian Environmental Assessment Act ............................................................................. CEAA
Canadian Environmental Assessment .................................................................................... CEA
Canadian Exploration Expense ............................................................................................... CEE
Canadian Institute of Mining, Metallurgy and Petroleum ...................................................... CIM
Canadian National Railroad .................................................................................................... CNR
carbon-in-leach ........................................................................................................................ CIL
carboxymethyl cellulose .......................................................................................................... CMC
Caro’s acid................................................................................................................................ H2SO5
CDN Resource Laboratories Ltd. ............................................................................................ CDN Resource
chalcopyrite .............................................................................................................................. Cp
chlorine ..................................................................................................................................... Cl
closed-circuit television ........................................................................................................... CCTV
coarse ore stockpile ................................................................................................................ COS
cobalt ........................................................................................................................................ Co
comparative work index .......................................................................................................... CWi
Construction Diversion Tunnel ................................................................................................ CDT
conventional counter-current decantation ............................................................................. CCD
copper sulphate ....................................................................................................................... CuSO4
copper....................................................................................................................................... Cu
cost breakdown structure ....................................................................................................... CBS
Cost, Insurance and Freight – Free Out ................................................................................. CIF-FO
Coulter Creek Access Road ..................................................................................................... CCAR
counter current decantation ................................................................................................... CCD
cross-linked polyethylene ........................................................................................................ XLPE
Cumulative Tax Credit Account ............................................................................................... CTCA
Delegation of Authority Guideline ........................................................................................... DOAG
Demand Side Management .................................................................................................... DSM
direct current............................................................................................................................ DC
direct cyanide leaching ............................................................................................................ DCN
discounted cash flow ............................................................................................................... DCF
Distributed Control System ..................................................................................................... DCS
east ........................................................................................................................................... E
EBC Inc. .................................................................................................................................... EBC
economic, social, and cultural impact assessment ...................................................................... ESCIA
effective grinding length .......................................................................................................... EGL
Electricity Supply Agreement................................................................................................... ESA
emergency medical technician ............................................................................................... EMT
engineering, procurement, construction management ......................................................... EPCM
environmental assessment ..................................................................................................... EA

xxx 735-1552880100-REP-R0002-02
Environmental Design Flood ................................................................................................... EDF
Environmental Effects Monitoring .......................................................................................... EEM
environmental impact statement ........................................................................................... EIS
Environmental Management System ..................................................................................... EMS
ERM Consultants Canada Inc. ................................................................................................ ERM
Esso Minerals Canada Ltd ...................................................................................................... Esso Minerals
Factor of Safety ........................................................................................................................ FOS
Fisheries and Oceans Canada ................................................................................................ DFO
fluorine ..................................................................................................................................... F
Free Carrier .............................................................................................................................. FCA
front-end loader ....................................................................................................................... FEL
G&T Metallurgical Services Ltd. .............................................................................................. G&T
galena ....................................................................................................................................... Gn
gas insulated ............................................................................................................................ GIS
general and administrative ..................................................................................................... G&A
general mine expense ............................................................................................................. GME
Global Climatic Models ............................................................................................................ GCMs
global positioning system ........................................................................................................ GPS
gold equivalent......................................................................................................................... AuEQ
gold ........................................................................................................................................... Au
Golder Associates Ltd. ............................................................................................................. Golder
Goods and Services Tax .......................................................................................................... GST
Granduc Mines Ltd. ................................................................................................................. Granduc
Granmac Services Ltd. ............................................................................................................ Granmac
greenhouse gas ....................................................................................................................... GHG
gross vehicle weight ................................................................................................................ GVW
Ground Penetrating Radar ...................................................................................................... GPR
Hazelton Volcanics................................................................................................................... HV
Hazen Research Inc. ................................................................................................................ Hazen
heating, ventilation, and air conditioning ............................................................................... HVAC
height of draw .......................................................................................................................... HOD
hematite ................................................................................................................................... He
high-density polyethylene ........................................................................................................ HDPE
high-density sludge .................................................................................................................. HDS
high-pressure grinding roll....................................................................................................... HPGR
hydrochloric acid ...................................................................................................................... HCl
hydrogen peroxide ................................................................................................................... H2O2
Independent Geotechnical Review Board .............................................................................. IGRB
Independent Power Producer ................................................................................................. IPP
inductively coupled plasma ..................................................................................................... ICP
Inflow Design Flood ................................................................................................................. IDF
Input Tax Credit ........................................................................................................................ ITC
internal rate of return .............................................................................................................. IRR
International Electrotechnical Commission ........................................................................... IEC
International Organization for Standardization...................................................................... ISO

xxxi 735-1552880100-REP-R0002-02
inter-ramp angle....................................................................................................................... IRA
inter-ramp height ..................................................................................................................... IRH
inverse distance weighting ...................................................................................................... IDW
Iron Cap Fault ........................................................................................................................... ICF
iron ............................................................................................................................................ Fe
Joint Health and Safety Committee ........................................................................................ JHSC
joint venture ............................................................................................................................. JV
Kambert Civil Consulting Ltd. .................................................................................................. KCC
Kerr-Sulphurets-Mitchell.......................................................................................................... KSM
Klohn Crippen Berger Ltd. ....................................................................................................... KCB
Köeppern Machinery Australia Pty Ltd. .................................................................................. Köeppern
Land Resource Management Plan ......................................................................................... LRMP
lead ........................................................................................................................................... Pb
Lerchs-Grossmann ................................................................................................................... LG
life-of-mine ............................................................................................................................... LOM
Light Detection and Ranging ................................................................................................... LIDAR
Lilburn & Associates LLC ......................................................................................................... Lilburn
linear low-density polyethylene ............................................................................................... LLDPE
liquefied natural gas ................................................................................................................ LNG
liquefied petroleum gas........................................................................................................... LPG
load factor ................................................................................................................................ LF
load-haul-dump ........................................................................................................................ LHD
local study area ........................................................................................................................ LSA
locked cycle tests..................................................................................................................... LCT
magnesium oxide..................................................................................................................... MgO
magnetite ................................................................................................................................. Ma
magneto telluric ....................................................................................................................... MT
maintenance and repair contracts ......................................................................................... MARC
manganese oxide..................................................................................................................... MnO
material take-off ...................................................................................................................... MTO
McElhanney Consulting Services Inc. ..................................................................................... McElhanney
McTagg Diversion Tunnels ...................................................................................................... MTDT
mercury..................................................................................................................................... Hg
metabisulphite ......................................................................................................................... MBS
metal leaching ......................................................................................................................... ML
Metal Mining Effluent Regulations ......................................................................................... MMER
Methyl isobutyl carbinol........................................................................................................... MIBC
Metso Minerals Industries Inc................................................................................................. Metso
Mining Rock Mass Rating ........................................................................................................ MRMR
Mining Rock Mass Rating ........................................................................................................ MRMR
Ministry of Energy and Mines .................................................................................................. MEM
Ministry of Energy, Mines and Natural Gas ............................................................................ MEMNG
Ministry of Energy, Mines and Petroleum Resources ............................................................ MEMPR
Ministry of Environment .......................................................................................................... MOE
Ministry of Forests ................................................................................................................... MOF

xxxii 735-1552880100-REP-R0002-02
Ministry of Forests, Lands and Natural Resource Operations .............................................. MFLNRO
Ministry of Transportation and Infrastructure ........................................................................ MOTI
Mitchell Diversion Tunnel ........................................................................................................ MDT
Mitchell Thrust Fault ................................................................................................................ MTF
Mitchell Valley Drainage Tunnel.............................................................................................. MVDT
Mitchell-Treaty Twinned Tunnels ............................................................................................ MTT
molybdenum ............................................................................................................................ Mo
Moose Mountain Technical Services ...................................................................................... MMTS
motor control centre ................................................................................................................ MCC
Multiple Accounts Analysis ...................................................................................................... MAA
Multiple Pulse in Air ................................................................................................................. MPiA
Municipal Wastewater Regulation .......................................................................................... MWR
Nass Timber Supply Area ........................................................................................................ Nass TSA
Nass Wildlife Area .................................................................................................................... NWA
National Ambient Air Quality Objectives ................................................................................. NAAQOs
National Instrument 43-101 ................................................................................................... NI 43-101
nearest neighbor...................................................................................................................... NN
Neil S. Seldon & Associates Ltd. ............................................................................................. NSA
net cash flow ............................................................................................................................ NCF
net present value ..................................................................................................................... NPV
Net Smelter Price ..................................................................................................................... NSP
net smelter return .................................................................................................................... NSR
Newhawk Gold Mines Ltd. ....................................................................................................... Newhawk
Newmont Exploration of Canada Ltd. ..................................................................................... Newmont
nickel ........................................................................................................................................ Ni
Nisga’a Final Agreement ......................................................................................................... NFA
Nisga’a Lisims Government .................................................................................................... NLG
no net loss ................................................................................................................................ NNL
non-potentially acid generating .............................................................................................. NPAG
Nordic Minesteel Technologies Inc. ........................................................................................ NMT
North American Datum ............................................................................................................ NAD
North Pit Wall Dewatering Adit ................................................................................................ NPWDA
North Treaty Access Road ....................................................................................................... NTAR
north ......................................................................................................................................... N
Northwest Fault........................................................................................................................ NWF
Northwest Transmission Line.................................................................................................. NTL
Operator Interface Stations ..................................................................................................... OIS
Ore Control System .................................................................................................................. OCS
Ore Preparation Complex ........................................................................................................ OPC
peak ground acceleration ....................................................................................................... PGA
Phelps Dodge Corp. ................................................................................................................. Phelps Dodge
phosphorus .............................................................................................................................. P
pit slope angle .......................................................................................................................... PSA
Pocock Industrial Inc. .............................................................................................................. Pocock
point of delivery........................................................................................................................ POD

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potassium amyl xanthate ........................................................................................................ PAX
potentially acid generating ...................................................................................................... PAG
Prefeasibility Study .................................................................................................................. PFS
Preliminary Economic Assessment ......................................................................................... PEA
Pretium Resources Inc. ........................................................................................................... Pretium
PricewaterhouseCoopers ........................................................................................................ PwC
prilled ammonium .................................................................................................................... AN Prill
probable maximum flood ........................................................................................................ PMF
Probable Maximum Precipitation............................................................................................ PMP
Process Tailing and Management Area .................................................................................. PTMA
programmable logic controller ................................................................................................ PLC
Provincial Sales Tax ................................................................................................................. PST
pyrite ......................................................................................................................................... Py
Qualified Person....................................................................................................................... QP
quality assurance..................................................................................................................... QA
quality control .......................................................................................................................... QC
quantile-quantile ...................................................................................................................... QQ
Quantitative Evaluation of Minerals by Scanning .................................................................. QEMSCAN®
Raewyn Copper ........................................................................................................................ RC
Rate Design Application .......................................................................................................... RDA
real-time kinematic .................................................................................................................. RTK
regional study area .................................................................................................................. RSA
request for information ........................................................................................................... RFI
Resource Management Zone ....................................................................................................... RMZ
Resource Modelling Inc. .......................................................................................................... RMI
rhenium .................................................................................................................................... Re
rock quality designation .......................................................................................................... RQD
Rock Storage Facility ............................................................................................................... RSF
rotations per minute ................................................................................................................ RPM
run-of-mine ............................................................................................................................... ROM
Seabridge Gold Inc................................................................................................................... Seabridge
selenium ................................................................................................................................... Se
self-contained breathing apparatus ....................................................................................... SCBA
semi-autogenous grinding mill comminution ......................................................................... SMC
semi-autogenous grinding ....................................................................................................... SAG
SGS Minerals Services ............................................................................................................ SGS
silica.......................................................................................................................................... SiO2
silver ......................................................................................................................................... Ag
Snowfields Slide Dewatering Adit ........................................................................................... SSDA
Society for Mining, Metallurgy, and Exploration..................................................................... SME
sodium cyanide ........................................................................................................................ NaCN
sodium hydrosulphide ............................................................................................................. NaHS
sodium hydroxide ..................................................................................................................... NaOH
sodium silicate ......................................................................................................................... Na2SiO3
sodium sulphide ...................................................................................................................... Na2S

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solids liquid separation ........................................................................................................... SLS
south ......................................................................................................................................... S
Special Use Permit ................................................................................................................... SUP
Species at Risk Act............................................................................................................................ SARA
Standard Penetration .............................................................................................................. SPT
standard reference material ................................................................................................... SRM
sulphide .................................................................................................................................... S-2
sulphidization, acidification, recycling, and thickening of precipitate .................................. SART
sulphur ..................................................................................................................................... S
Sulphurets Thrust Fault ........................................................................................................... STF
Sulphurets-Mitchell Conveyor Tunnel ..................................................................................... SMCT
sulphuric acid ........................................................................................................................... H2SO4
Sustainable Resource Management Plan .............................................................................. SRMP
Tailing Management Facility ................................................................................................... TMF
Tariff Supplement .................................................................................................................... TS
temporary water treatment plants .......................................................................................... TWTP
tennantite ................................................................................................................................. Tn
Tetra Tech, Inc.......................................................................................................................... Tetra Tech
tetrahedrite .............................................................................................................................. Tt
The Claim Group Inc. ............................................................................................................... TCG
the Environmental Assessment Application/Environmental Impact Statement ................. the Application/EIS
total sulphur ............................................................................................................................. ST
total suspended sediments..................................................................................................... TSS
treatment charge/refining charge .......................................................................................... TC/RC
Treaty Creek Access Road ....................................................................................................... TCAR
tunnel support classes ............................................................................................................ TSC
ultra-high frequency ................................................................................................................. UHF
undercut ................................................................................................................................... UC
Uniform Hazard Response Spectra ........................................................................................ UHRS
Universal Transverse Mercator ............................................................................................... UTM
University of British Columbia ................................................................................................. UBC
valued component ............................................................................................................................ VC
Voice over Internet Protocol .................................................................................................... VoIP
waste rock facility .................................................................................................................... WRF
Water Storage Dam ................................................................................................................. WSD
Water Storage Facility .............................................................................................................. WSF
Water Treatment Plant ............................................................................................................ WTP
weak acid dissociable.............................................................................................................. WAD
west .......................................................................................................................................... W
WN Brazier Associates Inc. ...................................................................................................... Brazier
work breakdown structure ...................................................................................................... WBS
work index ............................................................................................................................... Wi
x-ray fluorescence .................................................................................................................... XRF
zinc............................................................................................................................................ Zn

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1.0 SUMMARY

1.1 INTRODUCTION
Seabridge Gold Inc.’s (Seabridge) Kerr-Sulphurets-Mitchell (KSM) Project (the Project)
involves the development of major gold-copper (Au-Cu) deposits located in northwest
British Columbia (BC) off Highway 37, approximately 65 km by air north-northwest of the
ice free Port of Stewart, BC. The Project is situated within the coastal mountains of BC,
approximately 30 km topographically upgradient of the Alaska-BC border. The Project is
one of the few undeveloped projects within the world that has received its environmental
approvals, these having been granted by both the Government of Canada and the
Government of BC. The Project includes four major mineralized zones, identified as the
Mitchell, Kerr, Sulphurets, and Iron Cap deposits. The deposits contain significant gold,
copper, silver (Ag), and molybdenum (Mo) mineralization. Figure 1.1 is a panoramic view
looking east towards the aforementioned deposits.

Figure 1.1 Panoramic View of KSM Deposits (Looking East)

In conjunction with the environmental approvals, Seabridge also received early-stage

construction permits for the Project from the Province of BC in September 2014. The
permits issued include:

 authority to construct and use roadways along Coulter Creek and Treaty Creek
 rights-of-way for the proposed Mitchell-Treaty Twinned Tunnel (MTT) alignment
connecting Project facilities
 permits for constructing and operating numerous camps required to support
constructions activities
 permits authorizing early-stage construction activities at the Mine Site and
Tailing Management Facility (TMF).

Seabridge also received permits from the BC Government in October 2016, which allows
the construction of an exploration adit to explore mineralization associated with the Deep
Kerr deposit.

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
Update and Preliminary Economic Assessment
 In this report, the Project has been evaluated with two similar studies that each evaluate
different options for mine development. The 2016 Prefeasibility Study (PFS) evaluates
mining development mostly by open pit method at a specified processing rate, while the
Preliminary Economic Assessment (PEA) is a study that leverages the technical
information of the PFS and evaluates mine development dominated by underground
mining methods at a processing rate higher than that used in the PFS.

1.2 PRELIMINARY FEASIBILITY STUDY

This National Instrument 43-101 (NI 43-101) PFS has been prepared by Tetra Tech, Inc.
(Tetra Tech), for Seabridge, and is based on an update of the 2012 PFS (Tetra Tech
2012) work produced by Tetra Tech and the following independent consultants:

 Moose Mountain Technical Services (MMTS)

 Golder Associates Ltd. (Golder)
 McElhanney Consulting Services Ltd. (McElhanney)
 BGC Engineering Inc. (BGC)
 Resource Modeling Inc. (RMI)
 Klohn Crippen Berger Ltd. (KCB)
 ERM Consultants Canada Ltd. (ERM)
 WN Brazier Associates Inc. (Brazier).

The 2016 PFS envisages a combined open pit/underground block caving mining
operation that is scheduled to operate for 53 years. During the initial 33 years of mine
life, the majority of ore would be derived from open pit mines, with the tail end of this
period supplemented by the initial development of underground block cave mines. Ore
delivery to the mill during Year 2 to Year 35 is designed to be maintained at an average
of 130,000 t/d. After depletion of the open pits, the mill processing rate would be
reduced to just over 95,000 t/d for 10 additional years before ramping down to just over
60,000 t/d for the remaining few years of stockpile reclaim at the end of the mine life.
Over the entire 53-year mine life, ore would be fed to a flotation and gold extraction mill.
The flotation plant would produce a gold/copper/silver concentrate for transport by truck
to the nearby sea port for shipment to Pacific Rim smelters. Extensive metallurgical
testing confirms that the Project can produce a clean concentrate with an average copper
grade of 25% with a high gold and silver content, making it readily saleable. A separate
molybdenum concentrate and gold-silver doré would also be produced at the KSM
processing facility.

The capital and operating costs for the 2016 PFS have been estimated to a +25%/-10%
level of accuracy. All dollar figures presented in this report are stated in US dollars,
unless otherwise specified. This 2016 PFS concludes:

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
Update and Preliminary Economic Assessment
  projected capital costs are down despite substantial enhancements to meet
environmental improvements that were committed to in the environmental
assessment (EA) review process
 gold and copper reserves are up slightly despite lower metal prices
 the base case estimated total cost, at US$673/oz of gold produced, remains
well below the industry average for operating mines
 the base case after-tax payback period is approximately 6.8 years, which is a
remarkably low 13% of the 53-year mine life and a key benefit to large
producers.

Overall, the 2016 PFS update confirms that KSM is an economic project with an
unusually long life in a low-risk jurisdiction.

1.3 PRELIMINARY ECONOMIC ASSESSMENT

Amec Foster Wheeler Americas Limited (Amec Foster Wheeler) and the following
independent consultants prepared a Preliminary Economic Assessment study (the PEA):

 Golder
 KCB
 ERM.

The PEA has been prepared as an alternative option to the 2016 PFS for the
development of the Project. The PEA was undertaken to evaluate a different approach to
the Project by emphasizing low cost block cave mining and reducing the number and size
of the open pits, which significantly reduces the surface disturbances in the re-designed
Project. The PEA assesses the potential impacts of incorporating higher grade Inferred
Mineral Resources delineated at Deep Kerr and Iron Cap Lower Zone into the mine
design, and increasing the annual average maximum mill throughput from 130,000 t/d
envisioned in the 2016 PFS to 170,000 t/d in the PEA.

The results of the 2016 PFS remain valid and represent a viable option for developing the
Project, with the PEA assessing an alternative development option at a conceptual level.
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, and there is no
certainty that the results of the PEA will be realized. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability.

The results of the PEA were disclosed in Seabridge’s press releases entitled “New Study
Finds Significant Gains for Seabridge Gold’s KSM Project”, dated October 6th, 2016. This
report will be filed in support of the disclosure of the PEA results.

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
Update and Preliminary Economic Assessment
1.4 KEY STUDY OUTCOMES
The key study outcomes for the projected economic results and average annual metal
production are presented in Table 1.1 and Table 1.2, respectively. The PEA shows
potential for improvements over the 2016 PFS in unit operating costs, net cash flow,
NPV, IRR and project payback by producing a higher percentage of mill feed through
underground mining, and processing the mill feed at a higher plant processing rate.
Annual gold and copper production in the PEA increase over those shown in the PFS
through the benefit of spending greater initial and sustaining capital.

Table 1.1 Projected Economic Results

Recent Spot
Base Case Case Alternate Case
2016 2016 2016 2016 2016 2016
Unit PEA* PFS PEA* PFS PEA* PFS
Metal Prices
Gold US$/oz 1,230 1,350 1,500
Copper US$/lb 2.75 2.20 3.00
Silver US$/oz 17.75 20.00 25.00
Exchange Rate US$/Cdn$ 0.80 0.77 0.80
Cost Summary
Operating Costs (life-of-mine [LOM]) US$/oz Au -179 277 32 404 -319 183
Total Cost (Produced) US$/oz Au 358 673 553 787 218 580
Copper Credits (included in costs) US$/oz Au -1,328 -795 -1,104 -636 -1,449 -868
Silver Credits (included in costs) US$/oz Au -83 -71 -97 -80 -117 -100
Initial Capital (includes pre- US$ billion 5.5 5.0 5.3 4.8 5.5 5.0
production mining)
Sustaining Capital US$ billion 10.0 5.5 9.7 5.3 10.0 5.5
Unit Operating Cost Onsite US$/t 11.61 12.36 11.17 12.09 11.61 12.36
Pre-tax Results
Net Cash Flow US$ billion 26.3 15.9 24.1 16.1 38.7 26.3
Net Present Value (NPV) @ 5% US$ billion 6.1 3.3 5.7 3.5 10.2 6.5
Discount Rate
Internal Rate of Return (IRR) % 12.7 10.4 12.9 11.1 16.9 14.6
Payback Period Years 5.6 6.0 5.3 5.6 3.9 4.1
Post-tax Results
Net Cash Flow US$ billion 16.7 10.0 15.3 10.1 24.7 16.7
NPV @ 5% Discount Rate US$ billion 3.4 1.5 3.2 1.7 6.0 3.7
IRR % 10.0 8.0 10.1 8.5 13.4 11.4
Payback Period Years 6.4 6.8 6.1 6.4 4.7 4.9
Note: Operating and total cost per ounce of gold are after copper and silver credits. Total cost per ounce
includes all start-up capital, sustaining capital, and reclamation/closure costs. The post-tax results
include the BC Mineral Tax and corporate provincial and federal taxes.

*The results of the economic analysis in the PEA represents forward-looking information
that is subject to a number of known and unknown risks, uncertainties and other factors

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 that may cause actual results to differ materially from those presented. The material
factors or assumptions used to develop the forward-looking information, as well as the
material risk factors that could cause actual results to differ materially from the forward-
looking information in the PEA are more fully described in Section 24 and 25 of the
Report. A portion of the Mineral Resources in the PEA mine plans, production schedules,
and cash flows include 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, and there is no certainty that the PEA will be
realized. Due to the conceptual nature of the PEA, none of the Mineral Resources in the
PEA have been converted to Mineral Reserves and therefore do not have demonstrated
economic viability.

Table 1.2 Average Annual Metal Production (Metal Recovered)

Years 1 to 7 LOM
Average Average

Unit 2016 PEA 2016 PFS 2016 PEA 2016 PFS

Average Grades
Gold g/t 0.78 0.82 0.52 0.55
Copper % 0.26 0.24 0.32 0.21
Silver g/t 2.7 2.8 2.7 2.6
Molybdenum ppm n/a 48 n/a 43
Annual Production
Gold '000 oz 1,150 933 592 540
Copper '000 lb 306,603 204,937 286,217 156,052
Silver '000 oz 3,290 2,603 2,761 2,164
Molybdenum '000 lb n/a 1,593 n/a 1,171

1.5 PROPERTY DESCRIPTION AND LOCATION

The KSM Property (the Property) is located in the coastal mountains of northwest BC at a
latitude and longitude of approximately 56.50°north (N) and 130.30° west (W),
respectively. The Property is situated approximately 950 km northwest of Vancouver, BC;
65 km by air north-northwest of Stewart, BC; and 21 km south-southeast of the former
Eskay Creek Mine. The proposed pit areas lie within the headwaters of Sulphurets Creek,
which is a tributary of the Unuk River, which flows into the Pacific through Alaska. The
proposed TMF will be located within the tributaries of Teigen and Treaty creeks. The
Teigen and Treaty creeks are tributaries of the Bell-Irving River, which is itself a major
tributary of the Nass River. The Nass River also flows to the Pacific Ocean through the
northwestern portion of British Columbia, entirely within Canadian jurisdiction. Figure 1.2
is a general location map of the Project area.

The KSM Property comprises three discontinuous claim blocks. The claim blocks are
referred to as:

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  the KSM claims
 the Seabee/Tina claims
 the KSM placer claims.

The three claim blocks consist of 71 mineral claims, three placer claims, and two mineral
leases. The total area of the mineral claims and leases covers an area of approximately
38,929 ha. The Seabee/Tina claim block is located about 19 km northeast of the Kerr-
Sulphurets-Mitchell-Iron Cap mineralized zones. The Seabee/Tina claim block is currently
under consideration as the site for the proposed infrastructure. The claims are 100%
owned by Seabridge. Placer Dome (now Barrick Gold Corp. [Barrick]) retains a 1% net
smelter royalty on the Property that is capped at US$3.6 million. Figure 1.3 is a claim
map showing Seabridge’s mineral claims and leases.

Annual holding costs for all claims (lode and placer) over the next five years vary from
approximately Cdn$450,000 to Cdn$970,000. In 2007, assessment work was filed to
advance the year of expiry to 2018. Assessment work was completed on most of the
Seabee Property claims in 2010, with that work filed in February 2011, which advanced
expiry dates to 2017. The placer claims have been kept in good standing by paying fees
in lieu of completing assessment work. The Claim Group Inc. (TCG) is the land manager
and mineral tenure agent for Seabridge.

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 Figure 1.2 General Location Map

Source: ERM

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 Figure 1.3 KSM Mineral Claim Map

Source: Seabridge

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1.6 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND
PHYSIOGRAPHY
The KSM Property lies in the rugged coastal mountains of northwestern BC, with
elevations ranging from 520 m in Sulphurets Creek Valley, to over 2,300 m at the highest
peaks. Valley glaciers fill the upper portions of the larger valleys from just below the tree
line and upwards. The glaciers have been retreating for at least the last several decades.
Aerial photos indicate that the Mitchell Glacier has retreated approximately one kilometre
laterally and several hundred metres vertically since 1991.

The Property is drained by the Sulphurets Creek and Mitchell Creek watersheds that
empty into the Unuk River, which flows westward to the Pacific Ocean through Alaska.
The Treaty Ore Preparation Complex (OPC) and the TMF drain into the Bell-Irving
watershed, which is a tributary to the Nass River. The tree line lies at about 1,240 masl,
below which a mature forest of mostly hemlock and balsam fir abruptly develops. Fish
are not known to inhabit the Sulphurets and Mitchell watersheds. Large wildlife, such as
deer and moose, are rare due to the rugged topography and restricted access; however,
bears and mountain goats are common.

The climate is generally typical of a temperate or northern coastal rainforest, with sub-
arctic conditions at high elevations. Precipitation at the Mine Site has an estimated
average of 1,652 mm (Sulphurets weather station, 2008 to 2011 data) and at the
Process Tailing and Management Area (PTMA) has an estimated average of 1,371 mm
(Teigan Creek weather station, 2009 to 2015 data). The length of the snow-free season
varies from about May through November at lower elevations, and from July through
September at higher elevations. The KSM Property can be accessed only via helicopter.

There are multiple deep-water loading facilities for shipping bulk mineral concentrates
located in the ice free Port of Stewart, BC. Port facilities are currently used by the Red
Chris Mine. The nearest railway is the Canadian National Railroad (CNR) Yellowhead
route, which is located approximately 220 km southeast of the Property. This line runs
east-west, and can deliver concentrate to deep water ports near Prince Rupert and
Vancouver, BC.

The Property and its access routes are on Crown land; therefore, surface and access
rights are granted under, and subject to compliance with, the Mineral Tenure Act or the
Land Act or, at the discretion of the Crown, under the Mining Right of Way Act. There are
no settlements or privately owned land in the area; there is limited commercial
recreational activity in the form of helicopter skiing, rafting tours, and guided fishing
adventures.

The closest power transmission lines, the Northwest Transmission Line (NTL), run along
the Highway 37 corridor up to the Red Chris Mine. The Red Chris Mine is approximately
120 km north of the Project site, whereas the NTL is less than 15 km east of the Project
or approximately 30 km away from the Treaty OPC by way of the proposed Treaty Creek
Access Road (TCAR).

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1.7 GEOLOGY
The Property lies within an area known as “Stikinia”, which is a terrain consisting of
Triassic and Jurassic volcanic arcs that were accreted onto the Paleozoic basement
(Figure 1.4). Early Jurassic sub-volcanic intrusive complexes are scattered through the
Stikinia terrain and are host to numerous precious- and base-metal-rich hydrothermal
systems. These include several well-known copper-gold porphyry systems such as Galore
Creek, Red Chris, Kemess, Mt. Milligan, and Kerr-Sulphurets.

Figure 1.4 KSM Project Geology

Source: Seabridge

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 The Kerr deposit is a strongly-deformed copper-gold porphyry, where copper and gold
grades have been upgraded due to remobilization of metals during later and/or possibly
syn-intrusive deformation. Alteration is the result of a relatively shallow, long lived
hydrothermal system generated by intrusion of monzonite. Subsequent deformation
along the Sulphurets Thrust Fault (STF) was diverted into the Kerr area along pre-existing
structures. The mineralized area forms a fairly continuous, north-south trending, west-
dipping irregular body measuring about 1,700 m long and up to 200 m thick. Deep
drilling since 2012 has identified two sub-parallel, north-south trending, steep west-
dipping mineralized zones that appear to coalesce near the topographic surface. After
significant deep drilling was completed at the Kerr deposit, an updated geological
interpretation and subsequent updated Mineral Resource model were completed. That
new model forms the basis for the 2016 Mineral Resources and Mineral Reserves.
Approximately 218 diamond core holes totaling about 94,000 m of drilling data were
used to construct the Kerr block model used for this PFS.

The Sulphurets deposit comprises two distinct zones referred to as the Raewyn Copper-
Gold Zone and the Breccia Gold Zone. The Raewyn Copper-Gold Zone hosts mostly
porphyry style disseminated chalcopyrite and associated gold mineralization in
moderately quartz stockworked, chlorite-biotite-sericite-magnetite altered volcanics. The
Raewyn Copper-Gold Zone strikes north-easterly and dips about 45° to the northwest.
The Breccia Gold Zone hosts mostly gold-bearing pyritic material mineralization with
minor chalcopyrite and sulfosalts in a potassium-feldspar-siliceous hydrothermal breccia
that apparently crosscuts the Raewyn Copper-Gold Zone. The Breccia Gold Zone strikes
northerly and dips westerly. Approximately 141 core holes totaling about 43,000 m were
used to construct the Sulphurets block model used for the 2016 PFS.

The Mitchell Zone (Figure 1.5) is underlain by foliated, schistose, intrusive, volcanic, and
clastic rocks that are exposed in an erosional window below the shallow north dipping
Mitchell Thrust Fault (MTF). These rocks tend to be intensely altered and characterized
by abundant sericite and pyrite with numerous quartz stockwork veins and sheeted
quartz veins (phyllic alteration) that are often deformed and flattened. Towards the west
end of the zone, the extent and intensity of phyllic alteration diminishes and chlorite-
magnetite alteration becomes more dominant along with lower contained metal grades.
In the core of the zone, pyrite content ranges between 1 to 20%, averages 5%, and
typically occurs as fine disseminations. Gold and copper tends to be relatively low-grade
but is dispersed over a very large area and related to hydrothermal activity associated
with Early Jurassic hypabyssal porphyritic intrusions. In general, within the currently
drilled limits of the Mitchell Zone, gold and copper grades are remarkably consistent
between drill holes, which is common with large, stable, and long-lived hydrothermal
systems. Approximately 191 core holes totaling about 68,000 m were used to construct
the Mitchell block model used for this 2016 PFS.

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 Figure 1.5 Mitchell Zone Cross Section

Source: Seabridge
Note: net smelter return (NSR)

The Iron Cap Zone, which is located about 2,300 m northeast of the Mitchell Zone, is well
exposed and consists of intensely altered intrusive, sedimentary, and volcanics. The Iron
Cap deposit is a separate, distinct mineralized zone within the KSM district. It is thought
to be related to the other mineralized zones, but differs in that much of the host rock is

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 hydrothermally altered intrusive (porphyritic monzonite to diorite) rather than altered
volcanics and sediments. There is a high degree of silicification that overprints earlier
potassic and chloritic alteration. Intense phyllic alteration and high density of stockwork
veining, which are pervasive at the nearby Mitchell Zone, are less pervasive at Iron Cap.
The surface expression of the Iron Cap Zone measures about 1,500 m (northeast-
southwest) by 600 m (northwest-southeast). Significant drilling has been completed at
the Iron Cap deposit since the 2012 PFS (Tetra Tech 2012), which resulted in an updated
geological interpretation and subsequent updated Mineral Resource model that forms
the basis for the 2016 Mineral Resources and Mineral Reserves. Approximately 69 core
holes totaling about 35,000 m were used to construct the Iron Cap block model used for
the 2016 PFS.

1.8 HISTORY
The modern exploration history of the area began in the 1960s, with brief programs
conducted by Newmont Exploration of Canada Ltd. (Newmont), Granduc Mines Ltd.
(Granduc), Phelps Dodge Corp. (Phelps Dodge), the Meridian Syndicate, and others. Most
of these programs were focused on gold exploration. The various explorers were
attracted to this area due to the numerous large, prominent pyritic gossans that are
exposed in alpine areas. There is evidence that prospectors were active in the area prior
to 1935. The Sulphurets Zone was first drilled by Esso Minerals Canada Ltd. (Esso
Minerals) in 1969; Kerr was first drilled by Brinco in 1985, and Mitchell was first drilled
by Newhawk Gold Mines Ltd. (Newhawk) in 1991.

In 1989, Placer Dome acquired a 100% interest in the Kerr Zone from Western Canadian
Mines; in 1990, Placer Dome acquired the adjacent Sulphurets Property from Newhawk.
The Sulphurets Property also hosts the Mitchell Zone and other mineral occurrences. In
2000, Seabridge acquired a 100% interest from Placer Dome in both the Kerr and
Sulphurets properties, subject to capped royalties.

There is no recorded mineral production, nor evidence of it, from the KSM Property.
Immediately west of the Property, small-scale placer gold mining has occurred
downstream in Sulphurets Creek. On the Brucejack Property, immediately to the east,
limited underground development and test mining was undertaken in the 1990s on
narrow, gold-silver bearing quartz veins at the West Zone. The Brucejack Property is
currently owned by Pretium Resources Inc. (Pretium) who are building a high grade
underground gold mine targeting 2017 commercial production.

1.9 RESOURCES
RMI constructed three-dimensional (3D) block models (3DBM) for the Kerr, Sulphurets,
Mitchell, and Iron Cap zones after the 2011 drilling results were finalized. Those models
were used for the 2012 PFS (Tetra Tech 2012). No material drilling has been conducted
at the Sulphurets or Mitchell deposits since the 2012 PFS (Tetra Tech 2012); therefore,
those Mineral Resource grade models were used for the 2016 PFS. Significant drilling
was completed at both the Kerr and Iron Cap deposits since the 2012 PFS (Tetra Tech
2012), which necessitated updating the geological interpretation and grade shell

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 wireframes for those deposits. The new drilling and various wireframes were used to
develop new block grade models for the Kerr and Iron Cap deposits that were
subsequently used for the 2016 PFS.

Inverse distance estimation methods were used for all Mineral Resource models. In the
case of the Sulphurets and Mitchell deposits, a multi-pass interpolation strategy was
used, using a combination of grade shells or specific geological lithological/alteration
assemblages to constrain the estimate. 3D search ellipses oriented with the trend of
mineralization were used to find drill hole composites. Similar strategies were used for
the more recent models constructed for the Kerr and Iron Cap deposits. Deeper
exploration in those two areas has demonstrated that higher-grade mineralization is
associated with various structures. Instead of using conventional search ellipses to
collect drill hole composites for block grade estimation, a trend plane search was used
for the Kerr and Iron Cap models. That search method appears to do a better job of
honoring the currently recognized structural controls in those deposits.

The estimated block grades were classified into Measured (Mitchell only), Indicated, and
Inferred categories using mineralized continuity, proximity to drilling, and the number of
holes used to estimate the blocks. Mineral Resources for the Project were determined by
using a combination of conceptual open pit and underground mining methods. Lerchs-
Grossmann (LG) conceptual pits were generated for the Kerr, Sulphurets, and Mitchell
deposits using metal prices of US$1,300.00/oz of gold, US$3.00/lb of copper,
US$20.00/oz of silver, and US$9.70/lb of molybdenum. Mining, processing, general and
administrative (G&A), and metal recoveries were used to generate conceptual Mineral
Resource pits that demonstrate reasonable prospects for eventual economic extraction.
Conceptual block cave shapes were generated by Golder using GEOVIA’s PCBC™ Footprint
Finder software.

Table 1.3 summarizes the estimated Measured, Indicated, and Inferred Mineral
Resources for each zone.

1.10 OVERALL GENERAL ARRANGEMENT

Figure 1.6, Figure 1.7, and Figure 1.8 depict an overview of the Mine Site, Treaty OPC,
and TMF area, respectively. This is the general arrangement approved by the
Governments of Canada and BC in 2014.

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Table 1.3 KSM Mineral Resources as of May 31, 2016
NSR
Cut-off Tonnes Au Au Cu Cu Ag Ag Mo Mo
Zone Type of Constraint (Cdn$/t) (000 t) (g/t) (000 oz) (%) (Mlb) (g/t) (000 oz) (ppm) (Mlb)
Measured Mineral Resources
Mitchell Conceptual LG Pit 9 698,800 0.63 14,154 0.17 2,618 3.1 69,647 59 91
Conceptual Block Cave 16 51,300 0.59 973 0.20 226 4.7 7,752 41 5
Total Mitchell Measured n/a 750,100 0.63 15,127 0.17 2,844 3.2 77,399 58 96
Total KSM Measured n/a n/a 750,100 0.63 15,127 0.17 2,844 3.2 77,399 58 96
Indicated Mineral Resources
Kerr Conceptual LG Pit 9 355,000 0.22 2,511 0.41 3,208 1.1 12,555 4 3
Conceptual Block Cave 16 24,400 0.24 188 0.48 258 2.0 1,569 14 1
Total Kerr Indicated n/a 379,400 0.22 2,699 0.41 3,466 1.2 14,124 5 4
Sulphurets Conceptual LG Pit 9 381,600 0.58 7,116 0.21 1,766 0.8 9,815 48 40
Mitchell Conceptual LG Pit 9 919,900 0.57 16,858 0.16 3,244 2.8 82,811 61 124
Conceptual Block Cave 16 124,700 0.58 2,325 0.20 550 4.7 18,843 38 10
Total Mitchell Indicated n/a 1,044,600 0.57 19,183 0.16 3,794 3.0 101,654 58 134
Iron Cap Conceptual Block Cave 16 346,800 0.51 5,686 0.23 1,758 4.5 50,174 14 11
Total KSM Indicated n/a n/a 2,152,400 0.50 34,684 0.23 10,784 2.5 175,767 40 189
Measured + Indicated Mineral Resources
Kerr Conceptual LG Pit 9 355,000 0.22 2,511 0.41 3,208 1.1 12,555 4 3
Conceptual Block Cave 16 24,400 0.24 188 0.48 258 2.0 1,569 14 1
Total Kerr M + I n/a 379,400 0.22 2,699 0.41 3,466 1.2 14,124 5 4
Sulphurets Conceptual LG Pit 9 381,600 0.58 7,116 0.21 1,766 0.8 9,815 48 40
Mitchell Conceptual LG Pit 9 1,618,700 0.60 31,012 0.16 5,862 2.9 152,458 60 215
Conceptual Block Cave 16 176,000 0.58 3,298 0.20 776 4.7 26,595 39 15
Total Mitchell M + I n/a 1,794,700 0.60 34,310 0.16 6,638 3.1 179,053 58 230
Iron Cap Conceptual Block Cave 16 346,800 0.51 5,686 0.23 1,758 4.5 50,174 14 11
Total KSM Measured + Indicated n/a n/a 2,902,500 0.54 49,811 0.21 13,628 2.7 253,166 44 285
Inferred Mineral Resources
Kerr Conceptual LG Pit 9 80,200 0.27 696 0.21 371 1.1 2,836 6 1
Conceptual Block Cave 16 1,609,000 0.31 16,036 0.43 15,249 1.8 93,115 25 89
Total Kerr Inferred n/a 1,689,200 0.31 16,732 0.42 15,620 1.8 95,951 24 90
Sulphurets Conceptual LG Pit 9 182,300 0.46 2,696 0.14 563 1.3 7,619 28 11
Mitchell Conceptual LG Pit 9 317,900 0.37 3,782 0.09 631 3.0 30,662 56 39
Conceptual Block Cave 16 160,500 0.51 2,632 0.17 601 3.5 18,061 44 16
Total Mitchell Inferred n/a 478,400 0.38 6,414 0.10 1,232 3.0 48,723 55 55
Iron Cap Conceptual Block Cave 16 369,300 0.42 4,987 0.22 1,791 2.2 26,121 21 17
Total KSM Inferred n/a n/a 2,719,200 0.35 30,829 0.32 19,206 2.0 178,414 29 173
Note: Mineral Resources are reported inclusive of the Mineral Resources that were converted to Mineral Reserves. Mineral Resources
which are not Mineral Reserves do not have demonstrated economic viability. It is reasonably expected that the majority of Inferred
Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

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Figure 1.6 2016 PFS Mine Site Layout after Initial Construction

Source: Tetra Tech

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Figure 1.7 2016 PFS Treaty Ore Preparation Complex Layout

Source: Tetra Tech

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Figure 1.8 2016 PFS Ultimate Tailing Management Facility Area Layout

Source: Tetra Tech

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1.11 MINE PLANNING
The proposed mine uses conventional large-scale open pit and block cave underground
mining methods. Pit phases at the Mitchell, Kerr, and Sulphurets deposits have been
engineered based on the results of an updated economic pit limit analysis. Starter pits
have been selected in higher-grade areas. Underground mining has been proposed for
the Iron Cap deposit and below the Mitchell open pit to reduce the volume of waste
generated from the potential open pits.

1.11.1 MINING LIMITS

LG pit shell optimizations were used to define open pit mine plans in the 2012 PFS (Tetra
Tech 2012) and the same limits were confirmed using LG for the 2016 PFS. Ultimate
open pits have been modified slightly to implement design changes from the
Environmental Assessment (EA) Application/Environmental Impact Statement (EIS) (the
Application/EIS) (Rescan 2013) review and updated geotechnical study.

The underground block caving mine designs for both the Mitchell and Iron Cap deposits
are based on modeling using GEOVIA's PCBC™ and Footprint Finder software. The ramp-
up and maximum yearly mine production rates were established based on the rate at
which the drawpoints are constructed, and the initial and maximum production rates at
which individual drawpoints can be mucked. The values chosen for these inputs were
based on industry averages adjusted to suit the anticipated conditions.

1.11.2 MINERAL RESERVE ESTIMATE

Waste to ore open pit cut-offs and underground shut-offs, including process recovery,
were determined using metal prices of US$1,200.00/oz of gold, US$2.70/lb of copper,
US$17.50/oz of silver, and US$9.70/lb of molybdenum for NSR calculations.

Open pit Mineral Reserves have been calculated using the updated pit designs and the
2016 Mineral Resource models. These calculations include mining loss and dilution that
varies by pit ranging from 2.2 to 5.3% for loss, and 0.8 to 3.9% for dilution. A dynamic
cut-off grade strategy has been applied with a minimum NSR of Cdn$9.00/t.

The mining NSR shut-off is Cdn$15.00/t for the Mitchell underground mine and
Cdn$16.00/t for the Iron Cap underground mine. The Mitchell Mineral Reserves include
59 Mt of non-mineralized dilution at zero grade (13%) and 7 Mt of mineralized dilution
(2%). The Iron Cap Mineral Reserves include 20 Mt of dilution at zero grade (9%) and
25 Mt of mineralized dilution (11%).

Proven and Probable Mineral Reserves for the Project as of July 31, 2016 are stated in
Table 1.4.

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 Table 1.4 KSM Proven and Probable Reserves as of July 31, 2016
Average Grades Contained Metal
Mining Reserve Tonnes Au Cu Ag Mo Au Cu Ag Mo
Zone Method Category (Mt) (g/t) (%) (g/t) (ppm) (Moz (Mlb) (Moz) (Mlb)
Mitchell Open Pit Proven 460 0.68 0.17 3.1 59.2 10.1 1,767 45 60
Probable 481 0.63 0.16 2.9 65.8 9.7 1,677 44 70
Block 453 0.53 0.17 3.5 33.6 7.7 1,648 51 34
Probable
Cave
Iron Cap Block 224 0.49 0.20 3.6 13.0 3.5 983 26 6
Probable
Cave
Sulphurets Open Pit Probable 304 0.59 0.22 0.8 51.6 5.8 1,495 8 35
Kerr Open Pit Probable 276 0.22 0.43 1.0 3.4 2.0 2,586 9 2
Totals Proven 460 0.68 0.17 3.1 59.2 10.1 1,767 45 60
Probable 1,738 0.51 0.22 2.5 38.2 28.7 8,388 138 147
Total 2,198 0.55 0.21 2.6 42.6 38.8 10,155 183 207
Note: The Mineral Reserves tabulated in Table 1.4 are included in the tabulated Mineral Resources in
Table 1.3. All Mineral Reserves stated in Table 1.4 account for mining loss and dilution.

1.11.3 MINE PRODUCTION PLAN

During the initial 33 years of mine life, the majority of ore is derived from open pits, with
the tail end of this period supplemented by the initial development of underground block
cave mines. After Year 1 ramp up, ore delivery to the mill during Year 2 to Year 35 is
designed to be maintained at an average of 130,000 t/d. After depletion of the open
pits, the mill processing rate will be reduced to about 96,000 t/d for 10 additional years,
before ramping down to just over 61,000 t/d. The change in throughput matches the
production levels from the block cave with appropriate ramp ups and ramp downs
applied. The remaining few years use stockpile reclaim to supplement the declining
production from the block caves at the end of the mine life.

LOM production is summarized in Table 1.5 and Figure 1.9.

The topographic relief in the areas of the open pits, block cave mines, and the Rock
Storage Facilities (RSFs) requires specific geotechnical consideration. Conservative
designs, alternative/mitigating scenarios, and extra data and analyses have been
included in the mine designs.

Potential geohazards have been identified in the area of the proposed open pits, block
cave mine, RSFs, roads, and other infrastructure; designs include the mitigation of
geohazards such as avalanche control, provision of avalanche run-out routes, barriers,
and avalanche area and slope hazard avoidance as appropriate.

The mining progression is designed to build RSFs in lifts (bottom-up construction) to

consolidate the foundations and reduce downslope risks. Final RSF configurations are
designed with terraces at “as dumped” angle of repose, with flat benches between
terraces. The overall slope angle is between 26° and 30° to provide the ability for re-
sloping to accommodate the end land use and reclamation plan.

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 Table 1.5 2016 PFS LOM Production
Description Unit LOM
Mine Life years 53
Open Pit To Mill Mt 1,066
Open Pit To Stockpile Mt 455
Stockpile Reclaim Mt 455
Mitchell Underground To Mill Mt 453
Iron Cap Underground To Mill Mt 224
Total Mill Feed Mt 2,198
Gold g/t 0.55
Copper % 0.21
Silver g/t 2.6
Molybdenum ppm 42.6
Metal to the Mill
Gold Moz 38.8
Copper Mlb 10,155
Silver Moz 183
Molybdenum Mlb 207
Total Waste Mined Mt 3,003
Pit Strip Ratio t/t 1.4

Figure 1.9 2016 PFS Mill Feed Production Schedule

Source: MMTS

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 Ore is mined from Mitchell open pit from Years 1 to 24. Mitchell transitions to block cave
mining as the Mitchell pit is mined out. Ore is mined from Sulphurets open pit from Years
1 to 17. Kerr open pit supplements block cave mining from Year 25 to Year 34, and
during these years, ore will be transported by an overland conveyor and rope conveyor
system starting at the Kerr pit. Mitchell block cave is estimated to have a production
ramp-up period of six years, steady state production at 20 Mt/a for 17 years, and then
ramp-down production for another 7 years. Iron Cap is estimated to have a production
ramp-up period of four years, steady state production at 15 Mt/a for 10 years, and then
ramp-down production for another 9 years. The underground pre-production period
would be six years, with first underground ore production from Mitchell and Iron Cap in
Years 23 and 32, respectively.

All ore will be transported by train from the Mitchell OPC and through the MTT to the
Treaty OPC. The ore transport system will also include:

 A conveyor through the Sulphurets-Mitchell Conveyor Tunnel (SMCT) and a

connecting conveyor to transport ore from the Sulphurets pit to an ore stockpile
at the Mitchell site.
 A separate rope conveyor built to connect the Kerr pit to the SMCT conveyor
across the Sulphurets Valley. Waste rock from the Kerr open pit is backfilled
into the mined out Sulphurets pit. Ore from the Kerr open pit is transferred to
the SMCT to deliver ore to the Mitchell pit site. Both the ore and waste rock that
are primary crushed at the Kerr site will use the same rope conveyor transport
system.

Figure 1.6 shows the Mine Site area and the various other pits, as well as other on-site
infrastructure such as the initial staging, construction and permanent camps, explosive
facilities, the Water Storage Facility (WSF), diversion tunnels, and hydro power plants.
Access and appropriate haul roads will be provided to all of these areas.

Figure 1.7 shows the main processing facilities at the Treaty OPC, plus other on-site
infrastructure such as rail yard and train maintenance building, tunnel muck piles,
permanent and construction camps, concrete batch plant, and waste management
facility.

Figure 1.10 shows the Mine Site area with the individual pits, RSFs, and major
infrastructure including the truck shop, camps, explosives facilities, WSF, water diversion
and infrastructure tunnels, the primary crusher and truck dump at Mitchell, and external
hauls roads.

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Figure 1.10 2016 PFS Open Pit LOM

Source: MMTS

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1.12 METALLURGICAL TEST REVIEW
Several wide-ranging metallurgical test programs were carried out between 2007 and
2016 to assess the metallurgical responses of the mineral samples from the KSM
deposits, especially the samples from the Mitchell deposit.

The metallurgical tests to date include:

 mineralogy, flotation, cyanidation, and grindability testwork by G&T Metallurgical

Services Ltd. (G&T) and SGS Minerals Services (SGS)
 semi-autogenous grinding (SAG) mill comminution (SMC) grindability tests to
determine the grinding resistance of the mineralization to SAG/ball milling by
Hazen Research Inc. (Hazen) and G&T
 crushing resistance parameters to high-pressure grinding rolls (HPGR) crushing
of the Mitchell and Sulphurets ore samples by SGS, and pilot plant scale HPGR
testing on the Mitchell ore sample by Köeppern Machinery Australia Pty Ltd.'s
(Köeppern) HPGR pilot plant at the University of British Columbia (UBC)
 dewatering tests by Pocock Industrial Inc. (Pocock) on the samples of heads,
copper concentrates, sulphide leach products, and tailing pulps.

The flotation and cyanidation metallurgical testing established the optimum process-
related parameters and investigated metallurgical variability responses and copper-
molybdenum separation techniques. Flotation locked-cycle tests were performed on the
composite samples from the Mitchell, Sulphurets, Kerr, and Iron Cap deposits,
particularly on a variety of samples from the Mitchell deposit. Cyanidation tests were
conducted to further recover gold and silver from the gold-bearing sulphide streams
(scavenger cleaner tailing from the copper-gold bulk flotation) and pyrite concentrate.

The test results indicate that the mineral samples from the four separate mineralized
deposits are amenable to the flotation-cyanidation combined process. The process
consists of:

 copper-gold-molybdenum bulk rougher flotation followed by gold-bearing pyrite

flotation
 regrinding the bulk rougher concentrate followed by three stages of cleaner
flotation to produce a copper-gold-molybdenum bulk cleaner flotation
concentrate
 molybdenum separation of the bulk cleaner flotation concentrate to produce a
molybdenum concentrate and a copper/gold concentrate containing associated
silver
 cyanide leaching of the gold-bearing pyrite flotation concentrate and the
scavenger cleaner tailing to further recover gold and silver values as doré
bullion.

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 The reagents used for flotation were 3418A (dithiophosphinates)/A208
(dithiophosphate)/fuel oil for copper-gold-molybdenum bulk flotation and
A208/potassium amyl xanthate (PAX) for gold-bearing pyrite flotation. The primary grind
size used was 80% passing approximately 125 µm, and concentrate regrind size was
80% passing approximately 20 µm.

The samples from the Mitchell deposit produced better metallurgical results with the
chosen flotation and cyanide leach extraction circuits when compared to the
metallurgical results from the samples taken from the Sulphurets, Iron Cap, and Kerr
(upper zone) deposits. The locked-cycle tests showed that, on average, approximately
85% of copper and 60% of gold in the Mitchell samples, which contain 0.21% copper and
0.72 g/t gold, were recovered into a concentrate containing 24.8% copper. The
cyanidation further recovered approximately 18% of the gold from the gold-bearing
products, consisting of the cleaner flotation tailing and the gold bearing pyrite flotation
concentrate.

For the Sulphurets, Iron Cap, and upper Kerr samples, the average head grades of the
tested samples fluctuated from 0.25 to 0.62% for copper and 0.23 to 0.60 g/t for gold.
The average recoveries reporting to flotation concentrates ranged from 78% to 85% for
copper and 41 to 60% for gold. The average copper grades of the concentrates varied
from 24 to 28%. The cyanidation further recovered approximately 15 to 29% of the gold
from the gold-bearing products.

1.13 MINERAL PROCESSING

The mill feed from the Mitchell, Sulphurets, Kerr, and Iron Cap deposits will be processed
at an average rate of 130,000 t/d. The mill feed will come from open pit mines (upper
Mitchell Zone, Sulphurets and upper Kerr Zone) and underground block caving
operations (lower Mitchell Zone and Iron Cap deposits). The Mitchell deposit will be the
dominant source of mill feed for the process plant and will be processed through the
entire mine life, excluding Years 24 and 25. The ore from the Sulphurets deposit will be
fed to the plant together with the ore from the Mitchell pit from Years 1 to 17, excluding
Years 4, 5, 12, and 13 and with ore from the other deposits during the last four years.
Ore from the Kerr deposit, together with ore from the other deposits, will be introduced to
the plant during Years 24 to 34, and Year 53, while the Iron Cap ore will be fed to the
process plant during Year 32 to the end of mine life.

The proposed flotation process is projected to produce a copper-gold concentrate

containing approximately 25% copper. Copper and gold flotation recoveries will vary with
changes in head grade and mineralogy. For the LOM mill feed containing 0.55 g/t gold
and 0.21% copper, the average copper and gold recoveries to the concentrate are
projected to be 81.6% and 55.3%, respectively. As projected from the testwork, the
cyanidation circuit (carbon-in-leach [CIL]) will increase the overall gold recovery to a range
of 60% to 79%, depending on gold and copper head grades. Silver recovery from the
flotation and leaching circuits is expected to be 62.7% on average. A separate flotation
circuit will recover molybdenite from the copper-gold-molybdenum bulk concentrate when
higher-grade molybdenite mineralization is processed.

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 The Process Plant will consist of three separate facilities: ore primary crushing and
handling facilities at the Mine Site (Mitchell OPC), a 23 km ore transportation tunnel
system between the Mine Site and the PTMA, and a main process facility at the Treaty
OPC, adjacent to the TMF.

Gyratory crushers in the comminution plants located at the Mitchell OPC will reduce the
mill feed from 80% passing 1,200 mm to 80% passing 150 mm. The crushed ore will be
conveyed to a 30,000 t surge bin (two pockets, each 15,000 t) located underground at a
train car loading area, prior to being transported by train cars to the Treaty OPC.

A 23 km MTT system has been designed to connect the Mine Site and the PTMA. The
crushed ore will be transported through the tunnels by train. This tunnel will also be used
for electrical power transmission sourced from the Northwest Transmission Line and for
the transport of personnel and supplies for mine operating and water management
activities.

The proposed process flow sheet is shown in Figure 1.11.

The Process Plant at the Treaty OPC will consist of secondary and tertiary crushing,
primary grinding, flotation, concentrate regrinding, concentrate dewatering, cyanide
leaching, gold recovery, tailing delivery, and concentrate loadout systems. The crushed
ore transported from the Mitchell OPC will be sent to a 60,000 t coarse ore stockpile
(COS) adjacent to the tunnel portal. The ore will then be reclaimed and crushed by cone
crushers, followed by an HPGR comminution circuit. There is a 30,000 t fine ore
stockpile located ahead of the tertiary crushing circuit. The crushing systems will be
operated in closed circuits with screens.

The ore from the HPGR comminution circuits will be ground to a product size of 80%
passing 150 µm by four conventional ball mills in closed circuit with hydrocyclones. The
ground ore will then have copper/gold/molybdenum minerals concentrated by
conventional flotation to produce a copper-gold-molybdenum concentrate and gold-
bearing pyrite products for gold leaching. Depending on molybdenum content in the
copper-gold-molybdenum concentrate, the concentrate may be further treated to produce
a copper-gold concentrate and a molybdenum concentrate. The molybdenum
concentrate will be leached to reduce levels of copper and other impurities. The
concentrates will be dewatered and shipped to copper and molybdenum smelters.

The gold-bearing pyrite products which consist of the bulk cleaner flotation tailing from
the copper-gold-molybdenum cleaner flotation circuit and the gold-bearing pyrite
concentrate will be leached with cyanide using CIL treatment for additional gold and
silver recovery. Prior to storage in the lined pond within the TMF, the leach residues from
the cyanide leaching circuits will be washed, and subjected to cyanide recovery and
destruction. The water from the residue storage pond will be recycled back to the
cyanide leach circuit. Any excessive water will be further treated prior to being sent to the
flotation tailing storage pond.

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 The flotation tailing and the washed leach residues will be sent to the TMF for storage in
separate tailing areas. Two water reclaim systems for the flotation tailing pond and the
CIL residue pond have been designed to separately reclaim the water from the TMF.

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Figure 1.11 2016 PFS Simplified Process Flow Sheet

Source: Tetra Tech

Note: ROM – run-of-mine

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1.14 TAILING, WATER MANAGEMENT, AND ROCK STORAGE FACILITIES
1.14.1 TAILING MANAGEMENT FACILITY
The TMF (see layout in Figure 1.8) will be constructed in three cells: the North and South
cells for flotation tailing, and a lined Central Cell for CIL residue tailing. The cells are
confined between four dams (North, Splitter, Saddle, and Southeast dams) located within
the Teigen-Treaty creek cross-valley. Design criteria for the dams are based on the
Canadian Dam Association (CDA) guidelines. The area is moderately seismic and the
dams are designed to resist earthquake loads. A site-specific seismic hazard
assessment indicates peak ground acceleration (PGA) at 10,000-year return period of
0.14 g. The TMF cells are designed to store the 30-day probable maximum flood (PMF)
with snowmelt, although an operational phase discharge pipeline and closure spillways
are also provided to route the critical duration PMF.

De-pyritized flotation tailing will be stored in the North and South cells. The pyrite bearing
CIL residue tailing will be stored in the lined Central Cell. In total, the TMF will have a
capacity of 2.3 Bt.

The North and Central cells will be constructed and operated first; they will store tailing
produced in the first 25 years. The North Cell will then be reclaimed while the Central
and South cells are in operation.

The North, Splitter, and Saddle earth-fill starter dams will be constructed over a two-year
period, in advance of the start of milling, to form the North and Central cells and will
provide start-up tailing storage for two years. Cyclone sand dams will be progressively
raised above the starter dams over the operating LOM. The North Starter Dam will be
constructed with a low-permeability glacial till core and raised with compacted cyclone
sand shells, using the centerline geometry method. The Splitter and Saddle starter dams
will form the CIL pond. These dams will also subsequently be raised with cyclone sand
shells, but the CIL pond and the Splitter and Saddle dams will incorporate high-density
polyethylene (HDPE) and linear low-density polyethylene (LLDPE) liners in the core and
basin floor in order to surround the CIL tailing within a completely lined impoundment.

Cyclone sand dam raises will be constructed from April through October each year,
starting with the North Cell. To reach the capacity of 2.3 Bt, an ultimate dam crest
elevation of 1,068 m will be required for the North Cell dams and 1,068 m for the South
Cell. This will require a dam height of up to 240 m for the Southeast Dam, which is the
highest dam of the TMF.

Process water collected in the North and South tailing cells will be reclaimed by floating
pump barges and recycled separately to the Process Plant, either for use in the process,
for treatment, or to be discharged. Water from the Central Cell will only be directed to the
Process Plant for recycling purposes and will not be discharged directly to the receiving
environment. Diversions will be constructed to route non-contact runoff from the
surrounding valley slopes around the TMF. The diversion channels are sized to allow
passage of 200-year peak flows, and are large enough to allow space for passage of
snow removal machinery. Buried pipe sections paralleling the channels will be installed

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 in areas of active snow avalanche paths to enhance diversion operability during
avalanche periods.

During operation of the North Cell, flood waters will be routed south to Treaty Creek. As
operations switch to the South Cell, the East Catchment Tunnel will be constructed to the
north to route the entire East Catchment flow around the North Cell towards Teigen Creek
and away from the South Cell.

Seepage from the impoundment will be controlled with low-permeability zones in the
dams and foundation treatment. Residual seepage and runoff water from each tailing
dam will be collected at small downstream collection dams provided with grouted
foundations and low-permeability cores. Seepage collected will be pumped back to the
TMF. The seepage dam ponds will also be used to settle solids transported by runoff
from the dam and to collect cyclone sand drain-down water.

Based on site data taken between 2007 and 2011, combined with regional long-term
records, water balance calculations indicate that the TMF North and South flotation cells
will have average water surpluses of 0.14 m3/s to 0.20 m3/s during their operating
periods. During the five-year transition period between the North and South cells, the
total excess flow from the flotation cells is projected to be up to twice this amount, as
both the North and South cells will be active while the North Cell is being closed. During
the LOM, excess water from the Central Cell varies from 0.10 m3/s to 0.23 m3/s.
Management of surplus water during operations will use a combination of storage;
discharge to Treaty Creek during freshet, if water quality meets standards; or treatment
at the Treaty Process Plant (if required) and discharge.

Concerns with respect to the construction, operation, and long-term stability of large
scale TMFs within the Province of BC have been expressed by the general public,
Aboriginal groups, governments, and environmental non-governmental organizations
following the Mount Polley Tailings Facility breach that occurred in August 2014. To
specifically address these concerns, and to assure the public that the proposed KSM TMF
design is robust and safe, Seabridge undertook the following two actions:

 An Independent Geotechnical Review Board (IGRB) was established in January

2015 to independently review and to provide expert oversight, opinion, and
advice to Seabridge on the design, construction, operational management, and
ultimate closure of the TMF and Water Storage Dam (WSD). The IGRB will
review the TMF and WSD on an ongoing basis to ensure that these structures
meet internationally accepted standards and practices which effectively
minimize risks to employees, lands, and communities.
 Seabridge commissioned KCB to undertake the Best Available Tailing
Technology review in August 2015 (KCB 2015) in response to the Independent
Expert Engineering Investigation and Review Panel report on the breach of the
Mount Polley tailing storage facility. The Review Panel concluded that future
projects require not only an improved adoption of best applicable practices
(BAP), but also a migration to best available technology (BAT). The KCB report
(KCB 2016) also meets the new BC Mining Code requirement that new mines

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 must provide an alternate assessment of BAT in their provincial permit
applications.

The IGRB includes some of the leading world-class experts globally in their field. There
are four core members of the IGRB: Dr. Andrew Robertson; Dr. Gabriel Fernandez; Mr.
Terry Eldridge, P.Eng. FEC; and Mr. Anthony Rattue, P.Eng., as well as four support
members: Dr. Leslie Smith; Dr. Ian Hutchison; Mr. Jim Obermeyer, P.E.; and Dr. Jean
Pierre Tournier, whose expertise are called upon as needed. The IGRB provides over 300
years of combined dam design expertise to apply to best design practices for safe
construction and operation. Detailed summaries of their experience are included in their
first summary report dated April 2016 (IGRB 2016).

The IGRB review of Seabridge's TMF and WSD design was conducted between March 9
and 12, 2015 and was developed to answer five questions:

 Are dams and structures located appropriately?

 Are dam sections, materials, construction methods, and sequencing appropriate
for the site?
 What are the greatest design, construction, and operating risks?
 Are the facilities designed to operate effectively?
 Are the facilities designed to be safe?

The IGRB concluded that it was satisfied with the Project's designs and responded
favourably to all five questions (IGRB 2016). Additionally, the IGRB presented a series of
recommendations for Seabridge to consider during the ongoing engineering design of
TMF and WSD as development continues, many of which have been addressed within
this PFS.

The BAT study confirmed that the existing TMF design, consisting of centerline dams
constructed with double cyclone sand and a till core in association with wet tailings
deposition, is the best available technology for tailings deposition, and the most
environmentally responsible design to minimize long-term risks associated with the
proposed TMF for the Project. This conclusion confirms the findings from KSM's IGRB
that the TMF's design is robust and appropriate for KSM's site-specific characteristics.

The BAT study also confirmed that the TMF design that was included in the Project
design, which received provincial and federal EA approval, is the best possible design for
eliminating risks associated with operation and closure. The study specifically
determined that filtered tailing options are impractical and would result in greater
environmental impacts and risks, contrary to the assertions of many environmental
groups who have advocated that only filtered tailing disposal technologies should be
implemented.

As a further step in its review process, Seabridge commissioned an independent review

of the BAT report by Dr. Dirk van Zyl. Dr. van Zyl is a world-recognized expert in tailings,
mined-earth structures, and sustainability with over 40 years of experience. He is

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 currently a faculty member at UBC's Faculty of Applied Science and was a member of the
Independent Expert Engineering Investigation and Review Panel investigating the Mount
Polley tailing storage facility breach. In his review of the KCB report (KCB 2015), Dr. van
Zyl supported the overall conclusions of the KSM BAT report and that using filtered
tailings at KSM is not a feasible option as it will not result in moving to zero failures.

1.14.2 MINE SITE WATER MANAGEMENT

The overall site water management strategy, including the discharge from the WSF via
the High-density Sludge (HDS) water treatment plant (WTP) was the strategy that was
reviewed and approved during the EA review process.

DIVERSION TUNNELS AND SURFACE DIVERSION

Three diversion tunnel routes totalling approximately 22.4 km will be required to route
glacial melt water and non-contact valley runoff from the Mitchell and McTagg valleys
around the Mine Site. These tunnels are shown on Figure 1.10.

The open pit phase of the Mitchell Diversion Tunnel (MDT) and the twinned McTagg
Diversion Tunnels (MTDTs) are sized to convey flows from an average 200-year storm.
When the Mitchell block cave operation commences, an additional MDT paralleling the
open pit phase tunnel will be driven to protect the underground workings, which are more
sensitive to inflows than the open pits.

The provision of a second MDT during the underground phase provides redundancy
against blockage, as each individual tunnel can carry typical freshet flows. The provision
of twin tunnels also allows for switching base flows between adjacent tunnels if access
for maintenance is required. The single initial tunnel can be maintained during winter
low flow periods.

The open pit phase MDT will have a cross-sectional area of 22.8 m2 and an overall length
of 7.0 km. This tunnel will route water from Mitchell Creek/Mitchell Glacier to the
Sulphurets Valley, away from the open pit, primary crushing facility, open pit area, and
Mitchell RSF. The MDT will collect melt water from beneath the base and toe of the
Mitchell Glacier via separate surface and sub-glacial inlet structures, which improves
redundancy. Both surface and subglacial inlets are designed to protect the inlet of the
diversion from being blocked by snow avalanches. The Mitchell Diversion will generate
hydroelectric power as Sulphurets Valley is lower than Mitchell Valley. In Year 23, the
MDT will be augmented with a second (twin) tunnel to provide protection against the
1,000-year storm flow to the underground workings.

Each of the twinned MTDTs will have a cross sectional area of 13.4 m2, an initial length
of 4 km, and an ultimate length of approximately 7.5 km. The two inlet branches of the
ultimate tunnel will collect flows from east and west McTagg valleys and feed into the
main diversion tunnel route, around the west side of the McTagg RSF, and discharge into
Sulphurets Valley.

The Stage 1 inlet to the MTDT will initially be established in lower McTagg Creek,
upstream of the Mitchell RSF. As the mine life progresses, Stage 2 and Stage 3 inlets,

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 with ramped energy dissipating tunnel sections, will be constructed at higher levels
further up McTagg Creek and into each branch of the McTagg Valley to divert melt water
into the diversion tunnel as the RSF is raised in elevation. The staged inlets will avoid or
minimize glacier ice removal. Hydropower will be generated by the McTagg Diversion only
in Stage 2 and Stage 3, when the available head increases as the tunnel inlets are
raised.

To facilitate construction in the Mitchell Valley and the staging of water management as
the Mitchell and McTagg RSFs rise and fill the valley areas, an approximately 5.4 km long
Mitchell Valley Drainage Tunnel (MVDT) will be constructed under Mitchell Valley to carry
the existing flows from Mitchell Creek, which are naturally affected by contact with
surface mineralization. When the mine is in operation the tunnel will convey contact
water from the Mitchell workings and the mineralized area upstream of the deposit (via
the North Pit Wall Dewatering Adit [NPWDA]), around the RSFs into the WSF. If the MVDT
was not provided, surface channels would have to be staged in multiple increments and
significant energy dissipation structures would have to be constructed in areas of deep
overburden. The tunnel is designed to convey the 200-year return period, 24-hour
duration storm peak flow (181 m3/s), which requires a cross section of 6.0 m wide by
6.2 m high.

Lined surface diversion channels will be constructed progressively during operations,

along the contact of the RSF and the hillside, to divert surface flows. Flood runoff flows
of greater than the 200-year event will be routed alongside the lined channels. An in-rock
spillway will be constructed at the southwest corner of the McTagg RSF to convey surface
diversion flows down to diversion pipelines and channels on the west and east sides of
the WSF pond. Flood flows in excess of the 200-year event capacity of the MTDT will be
routed into the RSF by spillways at the inlets and then passed over the spillway of the
WSF dam.

WATER STORAGE FACILITY

All contact water from the Mine Site areas (open pits, RSFs, roads, infrastructure) will be
directed to the WSF, located in the lower Mitchell Creek area. The WSF will be formed
with a 165 m high rock fill asphalt core dam built to full height by Year -1 and is sized to
store annual freshet flows and volumes resulting from a 200-year wet year. The WSF
dam is founded on competent sedimentary rock foundations. Seepage will be controlled
by the asphalt core in the dam and the dam foundation will be grouted. A seepage
collection pond will return seepage water to the WSF. Snow avalanche hazards have
been assessed for the area and the wave modelled from the maximum predicted
avalanche in the area will be contained within the design freeboard for the dam.

During operations, secondary diversion ditches and pipelines will be implemented within
the Mine Site area to reduce contact water volumes. Open pit contact water and
discharge from pit dewatering wells will be routed from the pit rims, via ditches or direct
drainage, and via pipelines or the MVDT, to the WSF.

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 WATER TREATMENT
Mine area contact water will be treated with a HDS lime water treatment, of which the
discharge from the plant was approved in principle as a component of the environmental
assessment review process. The HDS WTP will have initially required capacity of
4.4 m3/s (four operating circuits), with a fifth circuit provided to treat up to 5.4 m3/s. The
additional circuit manages flow increases that may occur due to natural hazards or
extreme events. The additional treatment capacity also allows sections of the HDS WTP
to be shut down for maintenance when required. In Year 5, two additional circuits will be
installed bringing total ultimate treatment capacity to 7.5 m3/s.

Water balance calculations, based on data taken between 2007 and 2011 combined
with regional long-term records, indicate that during the various stages of mine life the
HDS WTP will operate year-round at a variable rate, averaging 2.2 m3/s annually, with
lower rates during winter and reaching 7.5 m3/s during high streamflow periods.

During pre-production operation of the HDS WTP, sludge from the HDS WTP will be filter-
pressed and stored in a shed during winter and trucked to a nearby engineered landfill
during summer months.

During operations, sludge from the HDS WTP will be filter-pressed and trucked to the
MTT. The sludge will be added to the MTT ore trains and passed through the ore milling
process to add necessary alkalinity to the process and ultimately disposed of in the
tailing pond.

Additional hydropower will be generated in the Energy Recovery Power Plant from the flow
of treatment water from the WSF to the HDS WTP, which is located at a lower elevation in
the Sulphurets Valley.

During the initial construction period, to maintain existing water quality, temporary water
treatment plants (TWTPs) located in the Mine Site area will manage water discharge from
tunnel portals and from temporary stockpiles of tunnel muck near the portals, as well as
treating water from existing seeps and mineralized areas. These facilities will include
reactor tanks, agitators, semi-automated lime and polymer flocculent dosing systems,
mixing launders, and settling ponds. The treatment will reduce suspended solids and
dissolved metals. As well, across the entire KSM site, 16 automated flocculent treatment
systems, located below earthworks and at the portals of the tunnels, will be constructed
to treat total suspended sediments (TSS) during the construction period. These
treatment systems will include engineered sediment ponds. Any potentially acid
generating (PAG) tunnel muck will be stored on lined pads located at the TWTPs and will
be hauled to permanent disposal sites within the RSF or TMF once the diversion tunnels
and the HDS WTP are operational. The temporary water treatment plants at the Mine
Site were part of the early stage construction permits approved in September 2014.

The HDS WTP and the WSF will be operational before mill start-up to allow pre-production
activity in the Mitchell Valley and Mitchell pit area.

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1.15 ENVIRONMENTAL CONSIDERATIONS
The Project is subject to the BC Environmental Assessment Act, the Canadian
Environmental Assessment Act, and Chapter 10 of the Nisga’a Final Agreement (NFA).

As of June 2016, the Project has successfully gone through the provincial and federal
processes, and the appropriate certificates/approvals have been obtained. Additionally,
permits for early stage constructions activities for the first two and half years of site
activity were obtained. These permits covered the following mine components:

 KSM Project Mines Act and Environmental Management Act Permit Application
for Limited Site Construction – May 2013
 Special Use Permits for the Coulter Creek Access Road (CCAR) and TCAR
 KSM construction camps
 KSM Project Treaty Transmission Line
 MTT Permit Application.

Seabridge is currently in the process of obtaining numerous provincial and federal

permits to allow for the construction of parts of the Project, as well as expanding
exploration activities, including but not limited to the following:

 Fisheries Authorization application, including draft Compensation Plans

 Metal Mining Effluent Regulations (MMER) Schedule 2 Amendment Application
 International Rivers Improvements Act Licence Application.

The Project underwent a harmonized EA process with the provincial and federal
governments. The governments conducted the EA cooperatively in accordance with the
principles of the Canada-BC Agreement on Environmental Assessment Cooperation
(Cooperation Agreement 2004). The process included a working group comprised of
federal and provincial officials, the Nisga’a Lisims Government (NLG) and Aboriginal
groups, and local government agencies. Representatives of the US federal and Alaska
state agencies were extensively involved in the EA process, as a matter of courtesy, given
that the mineral deposits are located on a tributary of the Unuk River, a transboundary
river, 30 km upstream of the US/Canada border. Authorizations are not required from
any US federal or state regulatory agency for the Project to proceed into construction and
operation.

1.15.1 COMMUNITY AND ABORIGINAL ENGAGEMENT

A cornerstone of Seabridge’s successful strategy of securing public support for the
Project, to assist in the environmental approval and permitting processes and to promote
the future development of the Project, was the undertaking of respectful, thorough, and
exhaustive public and Aboriginal engagement. This strategy was initiated in the fall of
2007, prior to the development of the initial project description that initiated the EA
process and continues today, more than two years after receipt of the federal and

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 provincial EA approvals. A key contributing factor in this strategy was the opening of the
local Smithers office in March 2011 and the hiring of employees resident to the area to
staff the office.

During the EA process, Seabridge received letters of support from the following
organizations:

 Town of Smithers
 Town of Terrance
 Gitxsan Nation.

Seabridge has also secured a Benefits Agreement with the Nisga’a Nation in June 2014.
This Benefits Agreement focused on economic benefits; opportunities for jobs; and
contracting, ongoing engagement, and project certainty. Additionally, a “Sustainability
Agreement” was reached with the Gitanyow Wilps also in June 2014. In this agreement
Seabridge agreed to provide funding for certain programs relating to wildlife, fish, and
water quality monitoring to address some of the concerns raised by the Gitanyow Huwilp,
as well as for a committee to establish a means of maintaining communications about
project-related issues throughout the life of the Project. Discussions are underway with
the remaining Aboriginal peoples whom have an interest in the ensuring the Project is
developed responsibly.

Seabridge has also been active in the communities prior to and after receipt of the EA
approvals, focusing on community education and employment initiatives. To date,
Seabridge has donated an excess of Cdn$702,000.

Seabridge’s ongoing success in its successful community and Aboriginal engagement

programs was the recent receipt of the permits required to develop the Deep Kerr
exploration adit. A 10-month process culminated in receipt of the permits in October
2016.

1.15.2 CLOSURE AND RECLAMATION

The Project will be closed in accordance with the closure plan outlined in Section 20.7,
and in further detail in the Application/EIS (Rescan 2013).

Closure and reclamation planning for the Project will contribute to the success of closure
and reclamation during mining and at the end of mine life, which will reduce the need to
restructure Project components, limit the amount of material re-handling, and reduce the
environmental effects of the Project. Mine development and operation will incorporate
techniques to minimize surficial disturbance and, where possible, progressively reclaim
areas affected during construction and operation. Stabilizing and rehabilitating surfaces
will reduce the potential for degradation of the resources due to extended exposure to
climatic factors, reducing closure-related capital costs at the cessation of mining
activities.

Closure activities will be conducted within the following regulatory framework:

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  British Columbia Mines Act (1996A) and Health, Safety and Reclamation Code
(BC Ministry of Energy, Mines and Petroleum Resources [MEMPR] 2008)
 Federal Fisheries Act (1985)
 BC Environmental Management Act (2003)
 BC Water Act (1996B)
 Riparian Management Area Guidebook (BC Ministry of Forests [MOF] and
BC Ministry of Environment [MOE] 1995).

Part 10 of the BC Health, Safety and Reclamation Code (BC MEMPR 2008) focuses on
reclamation and closure. Section 10.7 of the code identifies reclamation standards.
Section 10.7.4 (Land Use) of the code indicates “The land surface shall be reclaimed to
an end land use approved by the chief inspector that considers previous and potential
uses.” Section 10.7.5 (Capability) of the code indicates “Excluding lands that are not to
be reclaimed, the average land capability to be achieved on the remaining lands shall not
be less than the average that existed prior to mining, unless the land capability is not
consistent with the approved end land use.” Section 10.7.6 (Long Term Stability) of the
code states “Land, watercourses and access roads shall be left in a manner that ensures
long-term stability.”

The Project closure and reclamation plan has three objectives that provide assurance to
the province that the site will be left in a condition that will limit any future liability to the
people of BC:

 to provide stable landforms

 to re-establish productive land use
 to protect terrestrial and aquatic resources.

1.16 GEOHAZARDS
Geohazard and risk assessments were completed for the proposed facilities within the
Project area. As expected for a mountainous, high-relief project site, snow avalanche and
landslide hazards exist, with the potential to affect mine construction, operations, and
closure.

Geohazard scenarios were identified for the Project facilities considered. Using
unmitigated geohazard levels as a baseline, these scenarios were assessed in terms of
risk to human safety, economic loss, environmental loss, and reputation loss. Geohazard
risk levels were assigned to each scenario with ratings ranging from Very Low to Very
High.

Mitigation strategies have been identified to reduce the High and Very High risk scenarios
to a target residual risk not exceeding Moderate. Further risk reduction will be achieved
where practical and cost-efficient.

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1.17 SITE ACCESS AND INFRASTRUCTURE
Site access will be established from three fronts (Figure 1.12):

 the TCAR from Highway 37 to the Saddle Area and the Treaty OPC
 the CCAR from Eskay Creek to the Unuk River and on to the Mine Site
 the Winter Access Road from Granduc to the Ted Morris Creek Valley.

On-site infrastructure consists of tunnels, ore transportation system, and electrical power
supply and distribution infrastructure. Off-site infrastructure comprises new concentrate
storage in the Port of Stewart.

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Figure 1.12 2016 PFS Site Access and Camp Locations

Source: Tetra Tech

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1.17.1 PERMANENT ACCESS ROADS
There will be two primary permanent access roads to the Mine Site and PTMA.

The CCAR will be primarily a single-lane, radio-controlled road constructed for moving
large equipment and supplies to the Mine Site. An existing road starts at Highway 37,
south of Bob Quinn, and extends approximately 59 km southwest to the former Eskay
Creek Mine. The first 37 km of this road is classified as public road, but is subject to
controlled and shared access. The remaining 22 km of existing road length is private and
subject to a shared access agreement. Upgrades to sections of the existing road and
select bridges will be required.

The new 35 km long CCAR starts near the former Eskay Creek Mine and follows the west
side of the valley south for approximately 21 km before crossing the Unuk River. It then
turns east through a series of switchbacks and follows the north side of the Sulphurets
Creek Valley to the Mitchell Creek Valley and Mine Site. Consideration has been given to
passive snow avalanche control during alignment layout, but no active measures are
planned (e.g. snow sheds) since the road is intended to close during winter due to high
maintenance cost. During winter, access to the Mine Site will exclusively be through the
MTT.

The TCAR will consist of a two-lane road, constructed to provide permanent access from
Highway 37 to the Treaty OPC and east portal of the MTT. This road will leave
Highway 37 approximately 19 km south of Bell II, cross the Bell-Irving River, and follow
the north side of the Treaty Creek Valley for approximately 18 km. At this juncture, TCAR
continues toward the Saddle area as a single lane road, while the North Treaty Access
Road (NTAR) will follow the west side of the North Treaty Creek/Teigen Creek Valley for
approximately 12 km to the Treaty OPC, TMF, and east portal of the MTT. Initially the
lower NTAR will be built low in the valley to facilitate access for construction of the North
Dam, and provide reduced road grades and access road length during the first half of
mine life.

Additional roads will also be required at mine start-up to facilitate maintenance access
and construction of the proposed uphill cut-off drainage ditch. Later, once construction
of the South Dam starts, the remaining 5.7 km of the upper NTAR will need to be
constructed. These roads will be used to transport supplies, equipment, and crew
members to and from the Treaty OPC, and to transport concentrate to Highway 37 during
the life of the mine.

1.17.2 WINTER ACCESS ROAD

A Winter Access Road will be constructed to access the KSM Mine Site. The route will
begin at the end of an existing all-season road near the abandoned Granduc Mine. The
Winter Access Road will start at the toe of the Berendon Glacier, accessing the Frank
Mackie Glacier from the Berendon Glacier, and then up and over the glacier into the Ted
Morris Creek Valley, which is a tributary of Sulphurets Creek. The Winter Access Road will
be used to mobilize construction equipment, materials and supplies during the winter
season of the first construction year, prior to CCAR pioneering road completion. The

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 equipment and supplies will enable roads and water diversions to be built for sediment
control and water treatment, and to initiate major water diversion and other tunnel
construction and pioneering work in the Mine Site. It will also allow access for the
construction of portions of the CCAR, near its east end and to the Mine Site.

1.17.3 OFF-SITE INFRASTRUCTURE

Copper concentrates produced at the Treaty OPC will be filtered at the Process Plant and
transported by contract trucking firms via Highway 37 and 37A to one of the port vendors
in Stewart, BC. A concentrate storage building (approximately 100 m by 66 m) will be
required. Copper concentrates will be loaded via ship loader and shipped via ocean
transport to overseas smelters.

Multiple staging areas will be used in the Project, with the majority of equipment and
materials anticipated to be delivered to the Port of Stewart, supplemented by overland
freight delivered to Terrace or Stewart. As freight is received by the Project it will be
staged along transport routes at staging areas in the Stewart Port, Terrace, Smithers, and
ultimately at the marshalling/staging area at the Highway 37/TCAR intersection, prior to
shipping material and equipment to the point of installation by the Project Team.

1.17.4 MTT TRANSPORT SYSTEM

The MTT have been revised from the designs used in the Application/EIS (Rescan 2013)
to accommodate the change from an ore conveyor system, truck delivery system for
personnel and freight, and a tunnel based fuel pipeline, to a more efficient train-based
system for ore, personnel, and supplies. The trains will travel on a conventional ballasted
track structure, be electrically driven by an overhead catenary system, and be controlled
by an automated train control system managed from a remote control room without an
on-board operator. Similar systems are commonly used in other large tonnage mining
operations.

MTT ORE TRANSPORT

At the Mitchell OPC, ore will be crushed then conveyed through a tunnel and dumped into
two live underground ore bins within the MTT. Loading chutes under the ore bins will
feed ore into awaiting trains that will transport the ore to an unloading station at the
Treaty end of the MTT. The train cars will dump ore into a live underground unloading
bin. Apron feeders will unload the bin onto a conveyor to transport the ore to the top of
the Treaty COS.

Each ore train will consist of one, 140 t electric locomotive and 16, 42 m3 belly dump ore
cars that has the capacity to deliver 800 t/h from Mitchell to Treaty based on 90-minute
cycle times. On average, eight trains will deliver approximately 130,000 t/d
(approximately 5,400 t/h) of ore to meet the process plant requirements. An additional
four trains will be purchased to provide available train operating time for mechanical
availability and to handle an increase in plant feed of up to 10,000 t/h in order to
replenish coarse ore inventories as required.

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 MTT FREIGHT TRANSPORT
Transportation of personnel, freight and fuel through the MTT will be handled by rail with
sufficient mechanical availability from the train fleet discussed above. On surface,
staging areas near the Treaty portal will be used to load personnel, freight, and fuel onto
specialty train cars. These staging areas will be road accessible. Surface cranes will load
the flatbed train cars with freight and personnel will be loaded from a dedicated
passenger siding at Treaty. Empty fuel train cars, which will carry a removable fuel tank,
will be loaded via fuel lines from the main Treaty fuel storage tank.

The specialty personnel, freight, and fuel train cars will be shunted by 20 t battery
locomotives into the tunnel on the Treaty end, then picked up by the 140 t electric
locomotives and transported from Treaty to Mitchell.

Three separate, enclosed, underground staging areas near the Mitchell portal will be
used to offload passengers, freight, and fuel respectively. Personnel will exit the Mitchell
portal by bus. Freight and fuel staging areas will include gantry cranes to offload the train
payloads onto awaiting flatbed tractor-trailer units. Fuel train cars will be re-loaded with
an empty fuel tank for return to Treaty.

All freight hauls will be scheduled during stoppages in ore delivery. Train scheduling will
also occlude personnel transfer when freight or ore hauls are in the tunnels to increase
traffic safety and to ensure people will not be exposed to explosives, fuel, or hazardous
substances. Estimated freight, fuel, and personnel movement requirements through the
MTT will call for a daily average of five return train trips.

1.17.5 TUNNELING
A total of nine major tunnel projects will be excavated throughout the Project life, during
the pre-production and during operations. These tunnels will be classified as either
infrastructure tunnels or water tunnels. This does not include development work for the
block caves.

The infrastructure tunnels will provide for the transportation of ore, personnel, and
supplies between the Mine Site and the Treaty OPC. The principal infrastructure tunnel is
the MTT, which transports all the ore from the Mitchell OPC to the Treaty OPC and
personnel and supplies between the Treaty OPC and Mine Site, via the train system.
During operations a conveyor tunnel for the transfer of ore from Sulphurets pit, and later,
ore and waste from Kerr pit to the Mitchell Valley will be constructed.

The water tunnels include diversion tunnels named the MDT, the MTDT, and the MVDT;
and the slope drainage tunnels for the Mitchell high wall (NPWDA) and the Snowfields
landslide (Snowfields Slide Dewatering Adit [SSDA]).

Engineering for the major components of the MTT have been developed by two
experienced tunnel contactors and have been adapted to form the estimates for the
infrastructure and water tunnels.

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 Table 1.6 Summary of Infrastructure and Water Tunnels
Length
Tunnel (km)
Pre-production Tunnels
Infrastructure Tunnels
MTT 51.4
Water Tunnels
MDT Open Pit Phase 9.1
MTDT Stage I 8.0
MVDT and OPC Decline 5.4
Construction Diversion Tunnel (CDT) at WSD 0.9
Seepage Collection Tunnel (SCT) at WSD 1.8
Pre-production Tunnels Total 76.6
Operating Phase Tunnels
Infrastructure Tunnels
Iron Cap Connection 1.0
SMCT 3.0
Water Tunnels
MDT Underground Phase 8.9
MTDT Stages II and III 14.7
NPWDA and SSDA 5.3
East Catchment Tunnel 4.0
Mitchell Block Cave Dewatering Tunnels 12.0
Operating Phase Tunnels Total 48.9

MTT TUNNELING
Crushed ore from the open pits and underground operations will be transported through
the MTT to the COS at the Treaty OPC. The MTT have been revised from the designs for
the Application/EIS (Rescan 2013) from a conveyor to a train-based system; however, the
tunnel location and alignment have not changed. The MTT will comprise approximately
51.4 km of excavation, including the main tunnels, cross-cuts for ventilation/safety and
track cross-overs for maintenance during operations, as well as sidings for loading,
unloading, and freight, as well as excavations for the underground loading and unloading
infrastructure.

It is anticipated that four tunnel support classes (TSC) will be required for ground control
along the length of the MTT as described in Table 1.7.

Installation of these four types of tunnel support affects the daily advance rate of the
tunnel. Table 1.7 uses the distribution of TSC, along with associated advance rates as
determined by the contractors. These have been used to choose an appropriate rate to
use in the scheduling of the MTT as well as the other tunnels.

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 Table 1.7 Tunnel Support Class and Advance Rates for the MTT
Percentage Advance
Tunnel of Tunnel Rates
Support (%) (m/d)
TSC I 29 7.1
TSC II 21 6.8
TSC III 42 6.6
TSC IV 8 5.1

The tunnels will be driven in accordance with the BC Mines Act and Regulations using
mechanized drill and blast techniques and will follow the conditions contained within the
License of Occupation.

The MTT are on the critical path of the construction schedule and have therefore been
broken into two segments to allow for concurrent development workplaces resulting in a
shorter total tunnel construction period. This will be accomplished with headings at the
Treaty Valley, an adit as the saddle of a transecting valley, located 6.1 km from the Treaty
portals, and by headings in the Mitchell Valley thus creating six active headings. During
construction, rail will be installed in both the North and South tunnels for the future
operations rail haulage system; however, only the North Tunnel will be used for hauling
tunnel muck during construction.

During tunnel construction, installation of the infrastructure required for the operation of
the train haulage system will be scheduled where it doesn’t disrupt the tunnel advance
rate. This will include the ore train electrical system, the mine area electrical feed line,
loading and unloading facilities, and the tunnel ventilation system required for MTT
operations. Time is provided in the MTT construction schedule for mobilization at the
start and after final breakthrough, for completion of the tunnel infrastructure, and system
testing and commissioning.

Each pair of headings will rely upon a primary and a secondary ventilation circuit. The
primary circuit will provide fresh air under positive pressure through the South Tunnel.
Cross cuts near the advancing face will exhaust out the North Tunnel. Two secondary
circuits, made up of fans on flexible air ducts, will be established to intercept fresh air
from the primary circuits and ventilate the pair of advancing faces.

During the operations phase, air will be moved through the tunnel by the piston effect of
the trains. To allow for segments of the MTT to be isolated for maintenance, sets of
ventilation doors with axial vane fans will be installed at the portals and at the track
cross-overs for each tunnel.

In addition to the twin haulage tunnels, the MTT will include sidings at the Mine Site end
for freight, personnel, and fuel transportation, as well as twin underground loading
pockets with train ore loading systems connected to the Mitchell OPC primary crushers
via a tunnel and conveyor. Also at the Mine Site end of the MTT is a future tunnel access

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 to the Mitchell and Iron Cap block caves. At the Treaty end of the MTT an underground
ore bin is connected to the surface COS via a tunnel and conveyor.

During operations, the crosscuts between the twin tunnels will be bratticed off to provide
independent airways for egress for personnel. The brattices will have air sealed man-
doors and additionally, thirty-six, 12-person refuge stations will be set up in the cross-
cuts.

COSTING AND SCHEDULING OF OTHER TUNNELS

The detailed contractor tunneling estimate for the MTT has been adapted to estimate the
excavation costs and advance rates for the other associated excavations in the MTT, as
mentioned above. They have also been used for the other infrastructure and water
tunnels. The elements used in estimating all tunnels are:

 portals – preparation, excavation and setup

 mobilization and equipment use
 excavation of tunnels according to tunnel support type
 bulk excavation
 tunnel cleaning
 demobilization.

1.17.6 POWER SUPPLY AND DISTRIBUTION

BC Hydro is the electric utility that serves the Project area. Electric service for the Project
will be from BC Hydro's NTL that was completed in 2014 and parallels Highway 37. The
NTL provides an economic and reliable source of power at a cost of US$0.05/kWh

The new 344 km long, 287 kV, NTL runs from the Skeena Substation on the BC Hydro
500 kV grid near Terrace, BC, to Cranberry Junction, from which point it roughly parallels
BC Highway 37 to its terminus at Bob Quinn. The Project will construct a 30 km long,
287 kV transmission extension from the NTL, originating at the Treaty Creek Switching
Station (BC Hydro designation TCT) and terminating at the Treaty OPC No.1 Substation
(designation FLT1) that will be part of the Project infrastructure. This spur line will
parallel the TCAR in a common corridor. Land tenure for the right-of-way has been
obtained. The Treaty Creek Switching Station on the NTL will be approximately 20 km
south of Bell II. Figure 1.13 is a map from BC Hydro illustrating the routing of the NTL.

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 Figure 1.13 Map of the Northwest Transmission Line

Source: BC Hydro

The Project will take electrical service from the new NTL as a Transmission Service
Customer under Schedule 1823 as published in the BC Hydro tariffs.

Seabridge commissioned BC Hydro to carry out a Facilities Study for the Project, following
the previously completed BC Hydro System Impact Study. The Facilities Study is the final
evaluation required by the utility to define connection costs and terms of electric service.
A draft version of the Facilities Study has been issued. Upon the final issue of the study,
the parties will be in a position to sign a Facilities Agreement that, in conjunction with the
Electricity Supply Agreement (ESA), forms the standard contract for the supply of electric
power for a large bulk Transmission Service Customer such as Seabridge. The Project,

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 on the basis of the current application, has priority for service from the new NTL.
Currently there is a reservation of 150 MVA for the Project, but an application has been
made to increase this to 200 MVA.

Service to the Mine Site and PTMA will be provided from KSM Substation No. 1 via a
138 kV cable (24 km approximate length, including lead-in to the portals) through one of
the twin MTT connecting the Treaty OPC to the Mine Site. This supply will terminate at
the 138 kV to 69 kV to 25 kV step-down Substation No. 2 at the Mitchell OPC. This
substation will be of the gas insulated (GIS) type, which is very compact and allows for an
indoor installation in a concrete building, built into the mountainside to protect against
avalanches and will have protected access by being connected directly to the MTT tunnel
that carries the main power cables.

There will be 25 kV cables from Substation No. 2 feeding the primary crushing plant and
train loading facilities. In addition, 25 kV cables will also feed half of the rectifier stations
as located in the MTT tunnels for the main Mitchell to Treaty rail transport system.
Twenty-five kilovolt and 69 kV cables will also connect to overhead lines fed from the
substation as required to supply the Mitchell and future pits and other facilities including
the HDS WTP, WSF dam pumping installation, the Mitchell hydro plant, truck shop, camp,
explosives plant, and other installations in the Mine Site.

MINI HYDRO PLANTS AND ENERGY RECOVERY

Several energy recovery and mini-hydro plants have been included in the Project
development plan. These plants generate electric power by making use of facilities
already included in the Project and will result in significant net project energy savings.

The plants will all be located within the mining lease area. The total annual energy
generation is estimated to be 49,205,060 kWh, excluding the proposed future McTagg
installation. All of the plants, similar to small Independent Power Producer (IPP)
hydroelectric plants, will operate unattended and automatically controlled by
programmable logic controller (PLC) systems. The generated power will be metered and
fed into the local mine distribution power lines. The generating plants will either displace
costly Tier 2 utility power (as per BC Hydro Tariff 1823), or will be sold back to BC Hydro
under their Standing Offer Program for small generating schemes. Thus, the per-kilowatt-
hour dollar value of the generated electricity will be relatively high, significantly more than
the average project overall purchase price of electricity.

This section provides a brief summary of the energy recovery generation plants.

Water Treatment Plant Energy Recovery

This energy recovery facility will use the water running downhill from the water storage
pond to the HDS WTP to generate electric power. Two twin jet Pelton type impulse
turbines will be used as required to match the flow. The output will be fed into the plant
power distribution system at the HDS WTP. This facility will continue to operate after
mine closure.

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 Tailing Energy Recovery
The tailing energy recovery pump turbines will be located in the tailing discharge system
running from the Process Plant to the TMF. The energy recovery system will be based on
the available elevation differences, and will consist of two series stations each utilizing a
slurry pump running in reverse as a turbine. Induction generators will feed power back
into the local plant electrical distribution system. The two series energy recovery stations
will be located in small buildings at elevations 1,030 m and 1,000 m.

Mitchell Diversion Hydro

This plant will make use of the normal (but not flood) stream flows that will be diverted
around the mining operations by the MDTs. The installation will consist of a Pelton
turbine, and will be very similar to IPP run-of-river hydro plants, as it makes use of the
flow as it naturally occurs, with no water storage facilities or any other works other than
what’s required for water diversion around the mine. The equipment will be housed in a
small powerhouse building near Sulphurets Creek. Power will be delivered to the local
mine 25 kV electrical distribution system. This plant will continue to operate after mine
closure.

McTagg Diversion Hydro

This plant will be very similar to the Mitchell diversion scheme. The McTagg energy
recovery will be constructed in two stages corresponding to water diversion Stage 2 (Year
10) and diversion Stage 3 (Year 15). McTagg diversion Stage 1 does not warrant an
energy recovery plant.

The plant will consist of two Pelton turbines, and will feed power into the plant
distribution system at the HDS WTP. This facility will continue to operate in Phase 3 and
after mine closure.

1.18 PROJECT EXECUTION PLAN

1.18.1 ENGINEERING PROGRAM
The Project will complete the engineering program in two phases. The first phase will be
to address the early works road access, water management, site roads, diversion and
access tunnels, and WSF construction. This will include tendering the construction
packages for the early works scope and procurement of the long-lead items to maintain
the Project schedule. The second phase will include the detailed design of the remaining
facilities, major equipment procurement, and tendering process for the remaining
construction packages.

It was assumed for the 2016 PFS that the Project will be constructed using the
engineering, procurement, and construction management (EPCM) approach with a
management team located at both the Mine Site and the Treaty OPC. The Owner will
supply all the temporary construction camps and service contractors to manage daily
activities on site.

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 The preliminary contracting strategy has been developed to provide opportunities to local
communities, contractors, and labourers located in the area.

1.18.2 SITE CONSTRUCTION

It is assumed for the 2016 PFS that the method of construction will be an open managed
site—neither union nor non-union. Rotations will be scheduled to allow sufficient time for
personnel to travel and spend time at home with their families.

Mine Site construction begins with the development of the site access roads to the HDS
WTP area, WSF, tunnel entrances, CCAR, and building locations. Early works material
and equipment will be mobilized via the Winter Access Road and the pioneering road
along the CCAR alignment. Major equipment, general construction materials, and heavy
earth moving equipment will be mobilized via the CCAR.

Construction material and equipment for the PTMA will be transported using the TCAR.
Helicopter support is planned to be used prior to TCAR pioneering road completion. The
construction schedule for both sites is coordinated around the development of the MTT.

1.18.3 COMMISSIONING PROGRAM

The commissioning program will need to include at least three teams under the direction
of the commissioning manager and the Owner’s operation manager. The commissioning
manager would report to the Project at an early stage to develop the required
commissioning plan, procedures, and safety guidelines.

1.19 CAPITAL COST ESTIMATE

An initial capital of US$5.005 billion is estimated for the Project. All currencies in are
expressed in US dollars, unless otherwise stated. Costs have been converted using a
fixed currency exchange rate of US$0.80 to Cdn$1.00. The expected accuracy range of
the capital cost estimate is +25%/-10%.

This capital cost estimate includes only initial capital, which is defined as all capital
expenditures that are required to produce concentrate and doré. A summary of the
capital costs is shown in Table 1.8.

This 2016 PFS estimate is prepared with a base date of Q2 2016. The estimate does not
include any escalation past this date. Budget quotations were obtained for major
equipment. The vendors provided equipment prices, delivery lead times, freight costs to
a designated marshalling yard, and spares allowances. The quotations used in this
estimate were obtained in Q1/Q2 2016, and are budgetary and non-binding. Pricing for
all major equipment is based on budgetary quotations provided by vendors obtained in
Q1/Q2 2016. For non-major equipment, pricing is based on in-house data or recent
quotes from similar projects.

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 All equipment and material costs are based on FCA (Free Carrier) Ex-works (Incoterms
2010). Other costs such as spares, taxes, duties, freight, and packaging are covered
separately in the indirect costs section of the capital cost estimate.

Table 1.8 2016 PFS Initial Capital Cost Summary

Area Item Cost
No. Area Description (US$)
1 – Direct Costs
1.1 Mine Site 1,218,098,000
1.2 Process 1,336,423,000
1.3 TMF 440,697,000
1.4 Environmental 14,592,000
1.5 On-site Infrastructure 22,851,000
1.6 Off-site Infrastructure 119,580,000
1.7 Permanent Electrical Power Supply and Energy Recovery 158,861,000
Total Direct Costs 3,311,102,000
2 – Indirect Costs
2.91 Construction Indirect Costs 449,092,000
2.92 Spares 34,314,000
2.93 Initial Fills 19,664,000
2.94 Freight and Logistics 99,015,000
2.95 Commissioning and Start-up 6,120,000
2.96 EPCM 230,957,000
2.97 Vendor’s Assistance 23,075,000
Total Indirect Costs 862,237,000
3 – Owner’s Costs
3.98 Owner’s Costs 160,232,000
4 – Contingency
4.99 Contingency 670,995,000
2016 PFS Initial Capital Cost Total 5,004,566,000
Notes: Costs have been rounded to the nearest thousands of dollars.

Sustaining capital costs were also estimated leveraging the same basis of information
applied to the initial capital estimate with respect to vendor quotations, labour, and
material costs. The sustaining capital costs total US$5.503 billion and consist of:

 open pit mine development, principally mobile fleet replacement

 underground mine development at Mitchell and Iron Cap block cave mines
 process improvements, principally at Mitchell and Treaty OPC, MTT, and SMCT
 TMF expansions, mainly comprising dam raises and CIL basin expansions
 permanent electrical power supply and energy recovery systems
 Project indirect costs, including construction indirects, spares, freight and
logistics, EPCM, vendor assistance, and contingency.

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1.20 OPERATING COST ESTIMATE
The average operating cost for the Project is estimated at US$12.03/t milled at the
nominal process rate of 130,000 t/d or US$12.33/t for the LOM average as shown in
Table 1.9. The cost estimates in this section are based upon budget prices in Q1/Q2
2016 or based on the data from the database of the consulting firms involved in the cost
estimates. When required, costs in this report have been converted using a three-year
average currency exchange rate of Cdn$1.00 to US$0.80. The expected accuracy range
of the operating cost estimate is +25%/-10%.

The estimates do not include energy recovery credit (approximately US$0.12/t milled
LOM) from mini hydropower stations and the cost (approximately US$0.15/t milled LOM)
related to Provincial Sales Tax (PST).

Table 1.9 2016 PFS Average Operating Cost Summary

At the Nominal Feed
Rate of 130,000 t/d LOM
Average
(US$/t (US$/t
(US$/a) milled)* milled)
Mine
Mining Costs – Mill Feed 190,223,000** 4.59** 4.59
Open Pit – Mill Feed - 4.40** 4.40
Block Caving – Mill Feed - 4.99** 4.99
Mill
Process 251,066,000 5.29 5.34
G&A and Site Service
G&A 43,272,000 0.91 1.03
Site Service 18,914,000 0.40 0.44
Tailing and Site Water Management
Tailing Dam Management 6,065,000 0.13 0.13
Selenium Water Treatment 9,469,000 0.20 0.21
HDS Water Treatment 22,033,000 0.46 0.53
Mine Site Water Pumping 2,453,000 0.05 0.06
Total Operating Cost 543,495,000 12.03 12.33
Notes: *The estimates, excluding mining operating costs, are based on a mill feed rate of 130,000 t/d; the
costs do not reflect higher unit costs late in the mine life when the mill feed rates are lower.
**Mining operating costs are LOM average unit costs calculated by total LOM operating costs divided

by LOM process tonnages; mining operating costs exclude mine pre-production costs. The annual
cost is the LOM average cost
Costs have been rounded to the nearest thousands of dollars.

Power will be supplied by BC Hydro at an average cost of US$0.050/kWh at the plant

25 kV bus bars, based on the BC Hydro credits for energy conservation by use of HPGR
and similar, and the cost of “peaking” power to avoid a BC Hydro contract demand of
over 150 MVA. Process power consumption estimates are based on the Bond work index
equation for specific grinding energy consumption and estimated equipment load power

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 draws for the rest of the process equipment. The power cost for the mining section is
included in the mining operating costs. Power costs for site services, water treatment
plants, TMF seepage water pumping, and the Mine Site water pumping are included in
their area costs separately.

The estimated electrical power costs are based on the 2016 BC Hydro Tariff 1823 –
Transmission Service Stepped Rate and Schedule 1901 – Deferred Account Rate Rider.
The electrical power costs also account for local system losses and include 7% PST,
which is not treated as an Input Tax Credit (ITC). The rates take advantage of the
implementation of BC Hydro-approved energy conservation measures in the plant design
phase, including the HPGR circuit, which will greatly reduce the costlier Tier 2 power in
the BC Hydro stepped-rate Schedule 1823. The 5% Goods and Services Tax (GST) is not
included in the power rates as it is an ITC.

The operating costs are defined as the direct operating costs including mining,
processing, tailing storage, water treatment, and G&A. The hydropower credit from
recovered hydro-energy during mining operations is not accounted for directly against
operating cost estimate, but is included in the economic financial analysis. Sustaining
capital costs including all capital expenditures after the process plant has first been put
into production are excluded from the operating cost estimate.

1.21 ECONOMIC EVALUATION

Tetra Tech prepared an economic evaluation for the 2016 PFS based on a pre-tax
financial model. For the 53-year mine life and 2,198 Mt Mineral Reserve, the following
pre-tax financial parameters were calculated using the base case metal prices:

 10.4% IRR
 6.0-year payback on US$5.005 billion capital
 US$3.263 billion NPV at a 5% discount rate.

The tax component of the financial model used for the post-tax economic evaluation was
prepared and reviewed by other consultants (see Section 22.0 for further details).

Based on the tax analysis and review, the following post-tax financial results were
calculated:

 8.0% IRR
 6.8-year payback on US$5.005 billion capital
 US$1.539 billion NPV at a 5% discount rate.

The base case results incorporate historical three-year trailing averages for metal prices
as of July 31, 2016 as follows:

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  gold – US$1,230/oz
 copper – US$2.75/lb
 silver – US$17.75/oz
 molybdenum – US$8.49/lb
 exchange rate – Cdn$1.00 to US$0.80.

Metal revenues projected in the KSM cash flow models were based on the average metal
values indicated in Table 1.10.

Table 1.10 2016 PFS Metal Production from the Project

Years 1 to 7 LOM
Total Tonnes to Mill (000s) 322,750 2,198,559
Annual Tonnes to Mill (000s) 46,107 41,484
Average Grades
Gold (g/t) 0.82 0.55
Copper (%) 0.24 0.21
Silver (g/t) 2.8 2.6
Molybdenum (ppm) 48.3 42.6
Total Production
Gold ('000 oz) 6,529 28,597
Copper ('000 lb) 1,434,560 8,270,423
Silver ('000 oz) 18,224 114,671
Molybdenum ('000 lb) 11,154 62,080
Average Annual Production
Gold ('000 oz) 933 540
Copper ('000 lb) 204,937 156,052
Silver ('000 oz) 2,603 2,164
Molybdenum ('000 lb) 1,593 1,171

In addition to the base case, three metal price/exchange rate scenarios were also
developed: the first uses the metal prices and exchange rate used in mine optimization
and design (2016 Design Case); the second uses the spot metal prices and closing
exchange rate on July 1, 2016 (Recent Spot Case); the third uses higher metal prices to
indicate upside potential (Alternate Case). The input parameters and pre- and post-tax
results of all scenarios can be found in Table 1.11.

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 Table 1.11 2016 PFS Summary of the Pre- and Post-tax Economic Evaluations
2016 Recent
Base Design Spot Alternate
Unit Case Case Case Case
Metal Price
Gold US$/oz 1,230.00 1,200.00 1,350.00 1,500.00
Copper US$/lb 2.75 2.70 2.20 3.00
Silver US$/oz 17.75 17.50 20.00 25.00
Molybdenum US$/lb 8.49 9.70 7.00 10.00
Exchange Rate US:Cdn 0.80 0.83 0.77 0.80
Pre-tax Economic Results
NPV (at 0%) US$ million 15,933 13,727 16,101 26,319
NPV (at 3%) US$ million 6,217 5,128 6,461 11,138
NPV (at 5%) US$ million 3,263 2,510 3,507 6,541
NPV (at 8%) US$ million 960 475 1,175 2,928
IRR % 10.4 9.2 11.1 14.6
Payback years 6.0 6.5 5.6 4.1
Cash Cost/oz Au US$/oz 277 311 404 183
Total Cost/oz Au US$/oz 673 720 787 580
Post-tax Economic Results
NPV (at 0%) US$ million 9,983 8,537 10,109 16,721
NPV (at 3%) US$ million 3,513 2,789 3,691 6,696
NPV (at 5%) US$ million 1,539 1,028 1,718 3,663
NPV (at 8%) US$ million -2 -343 161 1,282
IRR % 8.0 7.0 8.5 11.4
Payback years 6.8 7.4 6.4 4.9

1.21.1 SENSITIVITY ANALYSIS

Sensitivity analyses were carried out on the pre-tax base case for the following
parameters:

 gold, copper, silver, and molybdenum metal prices

 exchange rate
 capital expenditure
 operating costs.

The analyses are presented graphically as financial outcomes in terms of pre-tax NPV,
IRR, and payback period. The Project NPV is most sensitive to gold price and exchange
rate followed by operating costs, copper price and capital costs. The IRR is most
sensitive to exchange rate, capital costs and gold price followed by operating costs and
copper price. The payback period is most sensitive to gold price and exchange rate
followed by capital costs, copper price and operating costs. Since the majority of costs
are in Canadian dollars and the economic analysis is developed in American dollars, a

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 significant increase in the exchange rate by 30% will result in a significant increase in the
costs when converted to American dollars and this leads to sharp increase in the
payback period. Also, when gold price decreases by 30%, the revenue side decreases
significantly and this results in sharp increase in the payback period. Financial outcomes
are relatively insensitive to silver and molybdenum prices. The NPV, IRR, and payback
sensitivities can be seen in Figure 1.14, Figure 1.15, and Figure 1.16.

Figure 1.14 2016 PFS Sensitivity Analysis of Pre-tax NPV at a 5% Discount Rate

7,000
NPV@5% Discount Rate (US$M)

6,000
Gold price
5,000
Copper price
4,000
Silver price
3,000 Molybdenum price
2,000 Exchange rate
1,000 Capital costs
0 Operating costs
-1,000
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

Figure 1.15 2016 PFS Sensitivity Analysis of Pre-tax IRR

18%
16%
Internal Rate of Return (%)

Gold price
14%
Copper price
12%
10% Silver price
8% Molybdenum price
6% Exchange rate
4% Capital costs
2%
Operating costs
0%
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

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 Figure 1.16 2016 PFS Sensitivity Analysis of Pre-tax Payback Period

16.0
14.0
Gold price
Payback Period (years)
12.0
Copper price
10.0
Silver price
8.0
Molybdenum price
6.0
Exchange rate
4.0
Capital costs
2.0
Operating costs
0.0
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

1.22 PRELIMINARY ECONOMIC ASSESSMENT OF THE KSM PROJECT

1.22.1 INTRODUCTION
The PEA was undertaken to evaluate a different approach to developing the Project by
emphasizing low-cost block cave mining and reducing the number and size of the open
pits, which significantly reduces the surface disturbances in the re-designed Project. The
PEA is based on the same Mineral Resource estimates that were used in the 2016 PFS,
except the Inferred Mineral Resources are included in the PEA design, capital and
operating cost estimates, and projected economics.

The PEA envisages a combined open pit/underground block cave mining operation that is
planned to operate for 51 years. Over the entire 51-year mine life, mineralized material
would be fed to a copper and gold extraction mill. The proposed plant for the PEA mine
design will have an average process rate of 170,000 t/d. The Mitchell open pit and Deep
Kerr underground mines will be the main source of mill feed, contributing approximately
83% of the total plant feed over the LOM, supplemented by the Sulphurets open pit and
Iron Cap underground mine production.

The flotation plant would produce a gold/copper/silver concentrate for transport by truck
to a nearby sea port at Stewart, BC for shipment to Pacific Rim smelters. Metallurgical
testing indicates that KSM can produce a clean concentrate with an average copper
grade of 25% with a high gold and silver content, making it readily saleable. Separate
gold-silver doré would be produced at the KSM processing facility.

The PEA is preliminary in nature and includes Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied to

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 them that would enable them to be categorized as Mineral Reserves, and there is no
certainty that the results of the PEA will be realized. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability.

The results of the 2016 PFS remain valid and represent a viable option for developing the
Project, with the PEA assessing an alternative development option at a conceptual level
of design.

1.22.2 MINING METHODS

The PEA utilizes Measured, Indicated, and Inferred Mineral Resources in mine planning.
Mill feed in the PEA is drawn from open pit mining and underground block cave mining of
the Mitchell deposit, open pit mining of the Sulphurets deposit and underground block
cave mining of the Kerr and Iron Cap deposits. Approximately 22% of the mill feed would
come from open pit operations and 78% from underground block cave operations.
Waste to mill feed cut-offs were determined using a NSR for each block in the model for
the open pit mines, and a NSR shut-off for the block cave underground mines. NSR is
calculated using prices and process recoveries for each metal accounting for all off-site
losses, transportation, smelting and refining charges. Metal prices of US$1,200/oz of
gold, US$2.70/lb of copper, and US$17.50/oz of silver are used in the NSR calculations.

LG pit shell optimizations were used to define open pit mine plans in the PEA. The pit
limits of the PEA are contained inside the pit limits of the 2016 PFS. The mine design for
the PEA focuses on reducing waste and selecting blocks with higher values. As a result,
the PEA mine plan contains 2.4 Bt less waste in the open pit mine plan.

The underground block caving mine designs for Mitchell, Iron Cap, and Kerr are based on
modeling using GEOVIA’s PCBC™ Footprint Finder software. The ramp up and maximum
yearly mine production rates were established based on the rate at which the drawpoints
are constructed, and the initial and maximum production rates at which individual
drawpoints can be mucked. The values chosen for these inputs were based on industry
averages adjusted to suit the anticipated conditions.

Mitchell is estimated to have a production ramp-up period of five years, steady state
production at 21.9 Mt/a for 28 years, and then ramp-down production for another
3 years. Iron Cap is estimated to have a production ramp-up period of three years,
steady state production at 14.6 Mt/a for 11 years, and then ramp-down production for
another 4 years. Kerr is estimated to have a production ramp-up period of six years,
steady state production at 25.5 Mt/a for 38 years with some variations during years
where the operation transitions from first to second lift and second to third lift. Ramp
down lasts 4 years.

The underground pre-production period is five years for Mitchell and Iron Cap and three
years for Kerr. The first underground mill feed production from Mitchell, Iron Cap and
Kerr comes in Years 9, 10, and 4, respectively. An elevated shut-off is used in the PEA
underground mine designs compared to what was used in the 2016 PFS. In the PEA, the
mining NSR shut-off is Cdn$20/t for the Mitchell underground mine, Cdn$23/t for the
Iron Cap underground mine and Cdn$22/t for Kerr.

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 Mineral Resources contained in the mine plans for the PEA are shown in Table 1.12.

Table 1.12 Mineral Resources Included in the PEA Mine Plan

Average Grades Contained Metal
Mining Tonnes Au Cu Ag Au Cu Ag
Zone Method Classification (Mt) (g/t) (%) (g/t) (Moz (Mlb) (Moz)
Mitchell Open Measured 223.7 0.79 0.20 3.0 5.7 966 21.9
Pit Indicated 194.6 0.75 0.19 2.8 4.7 817 17.7
Inferred 11.6 0.47 0.20 5.2 0.2 50 1.9
Block Measured 244.9 0.68 0.21 4.2 5.4 1,134 33.1
Cave Indicated 361.0 0.65 0.20 4.1 7.5 1,592 47.6
Inferred 87.5 0.40 0.13 3.1 1.1 259 8.7
Iron Cap Block Indicated 121.5 0.64 0.24 4.1 2.5 643 15.8
Cave Inferred 77.4 0.46 0.22 3.5 1.1 384 8.7
Sulphurets Open Indicated 91.8 0.70 0.29 0.6 2.1 584 1.7
Pit Inferred 11.1 0.59 0.25 0.8 0.2 60 0.3
Kerr Block Indicated 24.4 0.26 0.54 1.1 0.2 290 0.8
Cave Inferred 931.5 0.31 0.49 1.7 9.3 9,962 52.0
Total Open Pit Measured + Indicated 510.1 0.76 0.21 2.5 12.4 2,367 41.2
Inferred 22.7 0.53 0.22 3.1 0.4 111 2.2
Total Block Cave Measured + Indicated 751.8 0.64 0.22 4.0 15.6 3,659 97.3
Inferred 1,096.4 0.33 0.44 2.0 11.6 10,605 69.3
Total Material Mined Measured + Indicated 1,261.8 0.69 0.22 3.4 28.0 6,026 138.6
Inferred 1,119.1 0.33 0.43 2.0 12.0 10,716 71.6

The PEA mining study took a different approach to the 2016 PFS. The PEA mine plan was
carried out with the aim of reducing the amount of waste rock produced in the open pits
with the mill feed drawing more on the underground resources. The mine production
plan starts in lower-cost open pit areas using conventional large scale equipment before
transitioning into block cave underground bulk mining later in the mine life. Starter pits
have been selected in higher-grade areas and cut-off grade strategy optimizes revenues
to minimize the payback duration. Smaller pits were designed for the Mitchell and
Sulphurets deposits as well as mining the Kerr deposit solely by underground mining
methods. This approach substantially shrinks the Project’s footprint.

1.22.3 OPEN PIT MINING

For the Mitchell pit, the Mineral Resource model was subjected to an optimization
analysis to define the mining limits by analysing a series of 46 nested pit shells. In the
case of the Sulphurets pit, a much smaller pit than the optimal pit limit was chosen in
order to constrain the amount of waste rock produced during the LOM.

The Project is designed as a conventional truck-shovel operation. The pit design for the
Mitchell area includes three nested phases to balance stripping requirements while
satisfying the Process Plant requirements. In the case of the Sulphurets area the

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 material is mined in one phase. The Mineral Resources included in the Mitchell and
Sulphurets PEA open pit mine plans are shown in Table 1.12.

The PEA production schedule results in an open pit LOM of eight years with stockpile
reclaim extending into Year 14. The mine will require three years of pre-production
before the start of the Process Plant operations. Five, 363 t haul trucks will be required
in Year -3, increasing to 19 by Year -1, and peaking at 39 in production Years 1 to 3.

1.22.4 UNDERGROUND MINING – DEEP KERR, IRON CAP, AND MITCHELL

The underground block caving mine designs for Deep Kerr, Iron Cap, and Mitchell are
based on modeling using GEOVIA’s PCBC™ Footprint Finder software. The ramp-up and
maximum yearly mine production rates were established based on the rate at which the
drawpoints are constructed, and the initial and maximum production rates at which
individual drawpoints can be mucked. The values chosen for these inputs were based on
industry averages adjusted to suit the anticipated conditions.

Mitchell is estimated to have a production ramp-up period of five years, steady state
production at 21.9 Mt/a for 28 years, and then ramp-down production for another
3 years. Iron Cap is estimated to have a production ramp-up period of three years,
steady state production at 14.6 Mt/a for 11 years, and then ramp-down production for
another 4 years. Deep Kerr is estimated to have a production ramp-up period of six
years, steady state production at 25.5 Mt/a for 38 years with some variations during
years where the operation transitions from first to second lift and second to third lift.
Ramp down lasts four years. The underground pre-production period is five years for
Mitchell and Iron Cap and three years for Deep Kerr.

The first underground mill feed production from Deep Kerr, Iron Cap, and Mitchell comes
in Years 9, 10, and 4, respectively.

1.22.5 RECOVERY METHODS

The proposed KSM Process Plant will have an average process rate of 170,000 t/d. The
Mitchell open pit and Deep Kerr underground mines will be the main source of mill feed,
contributing about 83% of the total plant feed over the LOM, supplemented by the
Sulphurets open pit along with the Mitchell and Iron Cap underground mine production.

The overall process flow diagram developed for the 2016 PFS has been carried through
to the PEA, except for the molybdenum recovery circuit, which has been eliminated. For
the purpose of this PEA, the process circuit will incorporate three-stage crushing, milling,
conventional flotation and cyanidation processes for the recovery of copper, gold and
silver. With the use of the same flowsheet in the PEA as with the PFS, it was assumed
that the PFS testwork is representative and is used to support the PEA process design.
Characterization and metallurgical testwork on Mitchell, Sulphurets, Iron Cap, and Deep
Kerr samples is presented in Section 13.0. A small number of the minor element assays
of the final bulk concentrates from Deep Kerr indicate that concentrations of arsenic,
antimony and mercury may be near or above typical smelter penalty limits. The

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 concentrate minor element data should be reviewed by a concentrate marketing
specialist to identify potential concentrate marketing issues.

The major design consideration in the Process Plant equipment sizing and layout for the
PEA was the use of the largest equipment sizing available in order to minimize pumping
and piping requirements, process building footprint, and capital costs. Redesign of the
facilities was limited to optimizing the layout provided by the use of the larger equipment
in the PEA relative to the 2016 PFS.

Recovery equations for each ore type produced by Tetra Tech were reviewed and
considered adequate for the purposes of the PEA by Amec Foster Wheeler. The
metallurgical performance projections of the four KSM ore types are summarized in
Section 13.2.

1.22.6 PRODUCTION
The mine production plan starts in lower-cost open pit areas using conventional large
scale equipment before transitioning into block cave underground bulk mining later in the
mine life. Starter pits have been selected in higher-grade areas and cut-off grade
strategy optimizes revenues to minimize the payback duration.

After initial ramp-up the throughput averages of 170,000 t/d for the first 20 years, after
the rate is reduced to 130,000 t/d for the following 15 years, and then is further reduced
to around 77,000 t/d for 12 years; during the remaining 3 years of production,
throughput averages 28,000 t/d. In the PEA, KSM’s mine life is estimated at
approximately 51 years. Production starts from open pits at Mitchell and Sulphurets and
lasts until Years 8 and 5 of production, respectively. During that period the Kerr block
cave is developed and first mill feed is produced in Year 4 of production. In Year 9 and
10 Mitchell and Iron Cap caves enter into production. Underground production ends first
at Iron Cap in Year 27, then at Mitchell in Year 44, and finally at Kerr in Year 51 of
production.

At Mitchell, a near-surface higher-grade gold zone outcrops allowing for gold production
in the first seven years that is substantially above the mine life average grade. The mine
plan is specifically designed for mining highest gold grade first to facilitate an early
capital investment payback.

1.22.7 CAPITAL AND OPERATING COSTS

CAPITAL COSTS
Initial capital costs (including contingency of US$927 million and pre-production mining
costs) are estimated at US$5.5 billion, approximately 9.7% higher than the initial capital
estimate in the 2016 PFS. This increased initial capital is related to the higher
throughput that required a bigger mining fleet at the start of production, larger size of
equipment at the mill and changes in the tailing management facility due to a higher mill
rate. Also, contingency is higher to reflect the lower level of cost accuracy of the PEA
compared to the 2016 PFS.

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 Sustaining capital over the 51-year mine life is estimated at US$10.0 billion and is
dominated by capitalizing the underground mine expansions at Kerr, Mitchell, and Iron
Cap block caves. In addition to sustaining capital, a further US$540 million has been
charged against the Project for closure and post-closure costs.

Initial capital and sustaining capital estimates for the PEA are summarized in Table 1.13.

Table 1.13 PEA Capital Cost Estimate

Cost
Area (US$ millions)
Direct Costs
Mine Site 1,272
Process 1,447
Tailing Management Facility 509
Environmental 15
On-site Infrastructure 23
Off-site Infrastructure 120
Permanent Electrical Power Supply and Energy Recovery 167
Total Direct Costs 3,553
Indirect Costs 848
Owner’s Cost 161
Contingency 927
Total Initial Capital 5,489
Total Life of Mine Sustaining Capital 10,018

OPERATING COSTS
Average mine, process, and G&A operating costs over the PEA calculated mine life
(including waste mining and on-site power credits, excluding off-site shipping and
smelting costs) are estimated at US$11.61/t milled (before base metal credits).
Estimated unit operating costs are 6% lower than the 2016 PFS primarily due to
reduction in process and G&A cost associated with higher throughput. A breakdown of
estimated unit operating costs is shown in Table 1.14.

Table 1.14 PEA LOM Average Unit Operating Costs

Cost
Area (US$/t milled)

Mining* 4.47
Process 5.19
G&A 0.86
Others 1.09
Total Operating Costs 11.61
Note: *excluding pre-production cost of both open pit and underground mining

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1.22.8 ECONOMIC ANALYSIS
The PEA has been evaluated using a discounted cash flow (DCF) analysis. Cash inflows
consist of annual revenue projections for the mine. Cash outflows such as capital,
including the six years of pre-production costs, operating costs, taxes, and royalties are
subtracted from the inflows to arrive at the annual cash flow projections. Cash flows are
taken to occur at the end of each period.

Under the assumptions presented in this report, the PEA demonstrates positive
economics. The after-tax NPV at a 5% discount rate over the estimated mine life is
US$ 3.366 billion. The after-tax IRR is 10%. Payback of the initial capital investment is
estimated to occur in 6.4 years after the start of production or less than 12% of mine life.
A payback period representing less than 20% of mine life is considered highly favorable.

The Project is most sensitive to changes in metal prices and foreign exchange, less
sensitive to changes in capital costs, and least sensitive to operating cost and labour
costs changes.

1.22.9 CONCLUSIONS
The PEA offers a viable option for development of the Project and reduces a number of
the project risks. By including Deep Kerr, annual average maximum throughput of
130,000 t/d envisioned in the 2016 PFS could be increased to 170,000 t/d in the PEA
without significant redesign of facilities. Increased throughput increases the metal
production, reduces payback periods and improves estimated projected IRRs and NPVs.
The PEA mine plans in total would reduce the amount of waste rock by 81%
(approximately 2.4 Bt) compared to the PFS, substantially shrinking the Project’s foot
print and its environmental impact, and reducing water treatment costs.

1.23 RECOMMENDATIONS
Based on the work carried out in the 2016 PFS and the PEA, and the resultant economic
evaluation, the 2016 PFS should be followed up by more advanced studies in order to
further assess the technical and economic viability of the Project. Specific
recommendations made by Qualified Persons (QPs) are detailed in Section 26.0 and are
briefly summarized in the following subsections.

1.23.1 2016 PFS RECOMMENDATIONS

The key recommendations for advance studies emanating from the 2016 PFS focus on
improving both open pit and underground mine design through additional drilling and
testing; water related topics to further refine the inputs and results of site wide water
balance analyses from the construction period through closure; and tunnels to develop
more design-specific information to assist in reducing Project and operational risk and
associated construction and operating costs. Other recommendations address data
collection needs for RSFs, ore transportation, TMF, metallurgical testing, and process
engineering.

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1.23.2 PEA RECOMMENDATIONS
The exploration drilling program on Deep Kerr should be augmented with geotechnical
activities to provide a better understanding of the rock structure characteristics important
for the mine design. Amec Foster Wheeler also recommends that Seabridge perform
further testwork to confirm process parameters and test domain composites and point
samples to address geometallurgical variability that will support more advanced studies
on the Deep Kerr deposit.

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2.0 INTRODUCTION

2.1 PROJECT OVERVIEW

The Project is currently 100%-owned by Seabridge. The KSM Property is located in
northwest BC at a latitude and longitude of approximately 56.52°N and 130.25°W,
respectively. The Property is situated approximately 950 km northwest of Vancouver,
65 km north-northwest of Stewart, BC, and 21 km south-southeast of the Eskay Creek
Mine.

The KSM Property lies within an area known as “Stikinia”, which is a terrain consisting of
Triassic and Jurassic volcanic arcs that were accreted onto the Paleozoic basement.
Early Jurassic sub-volcanic intrusive complexes are scattered through the Stikinia terrain
and are host to numerous precious and base metal rich hydrothermal systems. These
include several well-known copper-gold porphyry systems such as Galore Creek, Red
Chris, Kemess, and Mt. Milligan.

2.2 TERMS OF REFERENCE

This report was prepared for Seabridge to summarize the results of the 2016 PFS, as well
as a PEA of an alternative development option, performed at a conceptual level, of the
Project. The report includes an updated Mineral Resource estimate on the Property. The
QPs that authored the report are independent of Seabridge Gold Inc. and the Project.

2.2.1 2016 PREFEASIBILITY STUDY

The intent of the 2016 KSM PFS update is to provide a comprehensive review of the
economics of the mining operations and related project activities, and to provide
recommendations for future work programs. This 2016 KSM PFS update has been
prepared for Seabridge based on work performed by the following independent
consultants:

 Tetra Tech
 MMTS
 Golder
 McElhaney
 BGC
 RMI
 KCB

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  Brazier
 ERM.

2.2.2 PRELIMINARY ECONOMIC ASSESSMENT

The results of the PEA were disclosed in Seabridge’s press release entitled “New Study
Finds Significant Gains for Seabridge Gold’s KSM Project”, dated 6 October 2016. This
Report will be filed in support of the disclosure of the PEA results.

2.3 SOURCES OF INFORMATION

The key information sources for the 2016 PFS and PEA were:

 previously filed technical report titled 2012 KSM (Kerr-Sulphurets-Mitchell)

Prefeasibility Study effective date June 22, 2012, amended date November 11,
2014 (Tetra Tech 2012)
 documents referenced in Section 3.0 (Reliance on Other Experts)
 documents referenced in Section 27.0 (References) of this Report
 additional information provided by Seabridge personnel where required.

2.4 EFFECTIVE DATES

The Report has a number of effective dates as follows:

 KSM Mineral Resource estimate: May 31st, 2016

 KSM Mineral Reserve estimate: July 31st, 2016
 Latest information on mineral tenure, surface rights and Project ownership:
October 6th, 2016
The overall effective date of the 2016 PFS and PEA is October 6th, 2016.

2.5 QUALIFIED PERSONS

The name of the QPs and a summary of the sections of the report that they take
responsibility is provided in Table 2.1. QP certificates are included as the Signature
Pages at the end of the report.

The following QPs conducted a site visit of the Property:

 Derek Kinakin (M.Sc., P.Geo., P.G.) of BGC visited the Property from August 19th
to 21st, 2013.
 Hassan Ghaffari (P.Eng.) of Tetra Tech visited the Property on September 20th,
2014.

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  James H. Gray (P.Eng.) of MMTS visited the Property on September 25th, 2008;
September 10th, 2009; and April 13th, 2010.
 Michael J. Lechner (P.Geo., RPG, CPG) of RMI visited the Property from
September 11th to September 14th, 2015.
 Jianhui (John) Huang (Ph.D., P.Eng.) of Tetra Tech visited the Property from on
September 16, 2008.
 Neil Brazier (P.Eng.) of Brazier visited the Property from September 1 to 4,
2013, and from September 12 to 16, 2011.
 J. Graham Parkinson (P.Geo.) of KCB visited the Property from September 18 to
22, 2014, as well as during the summers of 2008 and 2009, and autumn of
2007.
 Pierre Pelletier (P.Eng.) of ERM visited the Property on April 13, 2010 and
May 16, 2012.
 Ross D. Hammett (Ph.D., P.Eng.) of Golder visited the Property from August 8 to
10, 2010 and from October 18 and 19, 2011.
 R.W. Parolin (P.Eng.) of McElhanney visited the Property on June 21, 2008, and
during the summers of 2009, 2010, and 2011.

Table 2.1 Summary of Qualified Persons

Qualified Person
Section Description Company Qualified Person
1.0 Summary Multiple Sign off by Section
2.0 Introduction Multiple Sign off by Section
3.0 Reliance on Other Experts Multiple Sign off by Section
4.0 Property Description and Location RMI Michael J. Lechner,
P.Geo., RPG, CPG
5.0 Accessibility, Climate, Local RMI Michael J. Lechner,
Resources, P.Geo., RPG, CPG
Infrastructure, and Physiography
6.0 History RMI Michael J. Lechner,
P.Geo., RPG, CPG
7.0 Geological Setting and Mineralization RMI Michael J. Lechner,
P.Geo., RPG, CPG
8.0 Deposit Types RMI Michael J. Lechner,
P.Geo., RPG, CPG
9.0 Exploration RMI Michael J. Lechner,
P.Geo., RPG, CPG
10.0 Drilling RMI Michael J. Lechner,
P.Geo., RPG, CPG
11.0 Sample Preparation, Analyses, and RMI Michael J. Lechner,
Security P.Geo., RPG, CPG
table continues…

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 Qualified Person
Section Description Company Qualified Person
12.0 Data Verification RMI Michael J. Lechner,
P.Geo., RPG, CPG
13.0 Mineral Processing and Metallurgical Tetra Tech Jianhui (John) Huang,
Testing Ph.D., P.Eng.
14.0 Mineral Resource Estimate RMI Michael J. Lechner,
P.Geo., RPG, CPG
15.0 Mineral Reserve Estimates - -
15.1 Introduction MMTS/ James H. Gray, P.Eng./
Golder Ross Hammett, Ph.D., P.Eng.
15.2 Pit Reserves MMTS James H. Gray, P.Eng.
15.3 Underground Reserves Golder Ross Hammett, Ph.D., P.Eng.
16.0 Mining Methods - -
16.1 Open Pit Mining Operations MMTS James H. Gray, P.Eng.
16.1.5 Pit Slope Design Angles BGC Derrek Kinakin,
M.Sc., P.Geo., P.G.
16.2 Schedule Results MMTS/ James H. Gray, P.Eng./
Golder Ross Hammett, Ph.D., P.Eng.
16.3 Underground Mining Golder Ross Hammett, Ph.D., P.Eng.
17.0 Recovery Methods Tetra Tech Jianhui (John) Huang,
Ph.D., P.Eng.
18.0 Project Infrastructure - -
18.1 Site Layout Tetra Tech Hassan Ghaffari, P.Eng.
Tailing, Mine Rock and Water KCB J. Graham Parkinson, P.Geo.
18.2
Management
18.3 MTT Transport System MMTS James H. Gray, P.Eng.
18.4 Infrastructure Tunnels MMTS James H. Gray, P.Eng.
18.5 Site Roads Tetra Tech Hassan Ghaffari, P.Eng.
Tetra Tech Jianhui (John) Huang,
18.6 Process Plant Facilities
Ph.D., P.Eng.
18.7 Ancillary Buildings Tetra Tech Hassan Ghaffari, P.Eng.
18.8 Sewage Tetra Tech Hassan Ghaffari, P.Eng.
18.9 Communications System Tetra Tech Hassan Ghaffari, P.Eng.
18.10 Potable Water Supply Tetra Tech Hassan Ghaffari, P.Eng.
18.11 Power Supply and Distribution Brazier Neil Brazier, P.Eng.
18.12 Plant and Mitchell Site Electrical Brazier Neil Brazier, P.Eng.
Distribution
Permanent and Construction McElhanney R.W. Parolin, P.Eng.
18.13
Access Roads
18.14 Proposed Winter Access Road Tetra Tech Kevin Jones, P.Eng.
18.15 Logistics Tetra Tech Hassan Ghaffari, P.Eng.
18.16 Construction Execution Plan Tetra Tech Hassan Ghaffari, P.Eng.
18.17 Owner’s Implementation Plan Tetra Tech Hassan Ghaffari, P.Eng.
table continues…

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 Qualified Person
Section Description Company Qualified Person
19.0 Market Studies and Contracts Tetra Tech Jianhui (John) Huang,
Ph.D., P.Eng.
20.0 Environmental Studies, Permitting, ERM Pierre Pelletier, P.Eng.
and Social or Community Impact
21.0 Capital and Operating Cost Estimates - -
21.1 Initial Capital Cost Estimate Tetra Tech/MMTS/ Sign-off by Section
Golder/Brazier
21.2 Sustaining Capital Cost Estimate Tetra Tech/MMTS/ Sign-off by Section
Golder/Brazier
21.3 Operating Cost Estimate Tetra Tech/MMTS/ Sign-off by Section
Golder
22.0 Economic Analysis Tetra Tech Hassan Ghaffari, P.Eng.
23.0 Adjacent Properties RMI Michael J. Lechner,
P.Geo., RPG, CPG
24.0 Other Relevant Data and Information Amec Foster Wheeler Simon Allard, P.Eng.

24.16 Mining Methods Amec Foster Simon Allard, P.Eng.,

Wheeler/Golder Mark Ramirez, RM SME,
Ross Hammett, Ph.D., P.Eng.
24.16.1 Open Pit Mining Method Amec Foster Wheeler Simon Allard, P.Eng.
24.16.2 Deep Kerr Mining Method Amec Foster Wheeler Mark Ramirez, RM SME
24.16.3 Iron Cap Mining Method Golder Ross Hammett, Ph.D., P.Eng.
24.16.4 Mitchell Mining Method Golder Ross Hammett, Ph.D., P.Eng.
24.17 Recovery Methods Amec Foster Wheeler Tony Lipiec, P.Eng.
24.18 Project Infrastructure Amec Foster Wheeler Simon Allard, P.Eng.,
/Golder/KCB Mark Ramirez, RM SME,
Ross Hammett, Ph.D., P.Eng.
J. Graham Parkinson, P.Geo.
24.18.1 Onsite Infrastructure Amec Foster Wheeler Simon Allard, P.Eng.
/KCB J. Graham Parkinson, P.Geo.
24.18.2 Offsite Infrastructure Amec Foster Wheeler Simon Allard, P.Eng.
24.18.3 Deep Kerr Project Infrastructure Amec Foster Wheeler Mark Ramirez, RM SME,
24.18.4 Iron Cap Project Infrastructure Golder Ross Hammett, Ph.D., P.Eng.
24.18.5 Mitchell Project Infrastructure Golder Ross Hammett, Ph.D., P.Eng.
24.19 Market Studies and Contracts Tetra Tech Jianhui (John) Huang,
Ph.D., P.Eng.
24.20 Environmental Studies, Permitting, ERM Pierre Pelletier, P.Eng.
and Social or Community Impact
24.21 Capital and Operating Costs Amec Foster Wheeler Simon Allard, P.Eng.,
Mark Ramirez, RM SME,
Tony Lipiec, P.Eng.
24.22 Economic Analysis Amec Foster Wheeler Simon Allard, P.Eng.,
25.0 Interpretation and Conclusions All Sign off by Section
26.0 Recommendations All Sign off by Section

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3.0 RELIANCE ON OTHER EXPERTS

3.1 PREFEASIBILITY STUDY

Mr. Hassan Ghaffari, P.Eng. relied on:

 Seabridge management concerning private royalties applicable to the Project

and applied in Section 22.0.
 Lilburn & Associates LLC (Lilburn) concerning tax matters relevant to this PFS
and detailed in Section 22.0. The reliance is based on a letter from Lilburn to
Seabridge titled “Assistance with the tax portion of the economic analysis
prepared by Tetra Tech WEI Inc. (“Tetra Tech”) in connection with the NI 43-
101 report of the 2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study (the
“Report”) on the KSM project (the “Project”)” and dated September 13, 2016
 PricewaterhouseCoopers (PwC) concerning tax matters relevant to the PFS and
detailed in Section 22.0. This reliance is based on a letter from PwC to
Seabridge titled “Assistance with the review of income and mining tax portions
of the economic analysis prepared by Seabridge Gold Inc. (“SGI”) in connection
with the NI 43-101 Technical Report (the “Report”) on the Kerr-Sulphurets-
Mitchell (“KSM”) mining project (the “Project”)” and dated September 14, 2016.

Dr. John Huang, Ph.D., P.Eng. relied on:

 Mr. Neil Seldon of Neil S. Seldon & Associates Ltd. (NSA) for matters relating to
the smelting terms, refining terms, saleability, and sales terms for copper
concentrate and molybdenite concentrate. These terms are included in
Appendix B and summarized in Section 19.0 and Section 24.19.

Mr. Michael Lechner, P.Geo, RPG, CPG relied on:

 Mr. John Brassard, Owner of TCG, for matters relating to mineral and placer
claims status and ownership. TCG provided a Title Review of the KSM Property
dated Augusts 16, 2016, signed by Mr. Brassard. Mr. Michael J. Lechner, who is
responsible for the information in Section 4.0, has relied entirely on the
information provided by Mr. Brassard regarding the claims which comprise the
KSM property, their ownership and their status in Section 4.0.
 Mr. William Threlkeld, Senior Vice President of Seabridge, for matters relating to
claims acquisition, royalties, and related agreements detailed in Section 4.0.

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3.2 PRELIMINARY ECONOMIC ASSESSMENT
3.2.1 OWNERSHIP, MINERAL TENURE AND SURFACE RIGHTS
The QPs have not independently reviewed ownership of the Project area, including
mineral and surface rights, and the underlying property agreements, including royalty
agreements. The Amec Foster Wheeler QPs have fully relied upon, and disclaim
responsibility for information provided by experts for this information through the
following document:

 A letter prepared by Mr. Rudi Fronk, Chairman and CEO of Seabridge Gold, Inc.
with the title “KSM Project – Surface Access and Property Payment Obligations
and dated October 6th, 2016.
 A letter prepared by Mr. John L. Brassard, President of The Claim Group Inc.,
with the title “Seabridge Gold Inc., Title Review-KSM Property, Province of British
Columbia” and dated October 6th, 2016.
This information is used in Section 24.22 of the Report.

3.2.2 TAXES
The Amec Foster Wheeler QPs have not independently reviewed the taxation information.
The Amec Foster Wheeler QPs have fully relied upon, and disclaim responsibility for,
taxation information derived from experts retained by Seabridge contained in the
following document:

A letter authored by PricewaterhouseCoopers LLP (“PwC”) with the title:

“NI 43-101 Technical Report Prepared for Seabridge Gold Inc. – Taxation Narrative”
dated November 1, 2016.

PwC is a limited liability partnership, which is a member firm of PriceWaterhouseCoopers

International Limited, each member firm of which is a separate legal entity.

This information is used in Section 24.22 of the Report.

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4.0 PROPERTY DESCRIPTION AND LOCATION

The KSM Property is located in northwest BC, at an approximate latitude of 56.50 N and
a longitude of 130.30 W. The Mineral Resources that are the subject of this report are
located relative to the North American Datum (NAD)83 Universal Transverse Mercator
(UTM) coordinate system. The Property is approximately 950 km northwest of Vancouver,
65 km north-northwest of Stewart, and 21 km south-southeast of the Eskay Creek Mine
(production ceased in 2009). Figure 4.1 is a general location map.

The KSM Property is comprised of three discontinuous claim blocks. These claim blocks
are referred to as:

 the KSM claims

 the Seabee/Tina claims
 the KSM placer claims.

The three KSM claim blocks include 71 mineral claims (cell and legacy), 2 mining leases
and 3 placer claims with a combined area of approximately 38,929 ha. The Claim Group
Inc. (TCG) acts as Agent of behalf of Seabridge with respect to maintaining all pertinent
records associated with the KSM claims. All claims and leases are in good standing
under the Mining Tenure Act of BC, and are recorded as owned 100% by Seabridge.

The Seabee/Tina claim block is located about 19 km northeast of the Kerr-Sulphurets-

Mitchell-Iron Cap mineralized zones. The Seabee/Tina claim block is currently being
considered for proposed infrastructure siting.

The KSM mineral claims were purchased by Seabridge from Placer Dome in 2000. The
mineral claims were converted from legacy claims to BC’s new Mineral Titles Online
(MTO) system in 2005. In the MTO system, claims are located digitally using a fixed grid
on lines of latitude and longitude with cells measuring 15 seconds north-south and
22.5 seconds east-west (approximately 460 by 380 m). The legacy claims were located
by previous owners by placing tagged posts along the boundaries; however, the survey
method employed in locating the legacy claims is not known. With the MTO system, no
markings are required on the ground and the potential for gaps and/or overlapping
claims inherent in the old system is eliminated.

There is no record or evidence of any historical mining on the Property. The BC Mineral
Inventory (Minfile) contains 25 mineral occurrences in this area (mostly copper and gold).
Also, within the claim group two non-compliant (pre-NI 43-101) Mineral Resources were
reported by Placer Dome for the Kerr and Sulphurets deposits.

The original KSM claim group consisted of two contiguous claim blocks known as the
Kerr and Sulphurets (or Sulphside) properties. The claims are 100% owned by

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 Seabridge. Placer Dome (now Barrick Gold Corp.) retains a 1% net smelter royalty that is
capped at $4.5 million. Two of the pre-converted claims (Xray 2 and 6) are subject to a
contractual royalty obligation in accordance with terms in the underlying Dawson
Agreement. The lands covered by these claims are now contained within the converted
Xray 1 claim (Tenure No. 516245). There is an additional underlying agreement whereby
advance annual royalties payable to Dawson are being paid by Seabridge.

Since acquisition of the original KSM claim group, Seabridge has added to the Project’s
property holdings through staking and purchase of several claim groups. These groups
include the Seabee group, acquired by staking, the Tina and BJ groups purchased in
2009, and the New BJ group purchased in 2010. The Seabee and Tina groups are
together referred to as the Seabee Property, and the original KSM group, BJ and New BJ
groups are referred to as the KSM Property (Figure 4.2). The three KSM placer claims
are shown in Figure 4.3.

Annual holding costs for all leases and claims vary by year depending on whether the
fees are paid in cash or whether the value of work completed on developing the claims is
used in lieu of a cash payment. Over the next five years, the annual cash holding costs to
keep the claims and leases valid range between Cdn$450,000 to Cdn$970,000. Those
estimated costs can be reduced significantly if work expenditures are applied in lieu of
cash fees.

In 2007, assessment work was filed to advance the expiry of the KSM Property to 2018.
Assessment work was completed on most of the Seabee Property in 2010 with that work
filed in February 2011, which advanced expiry dates to 2017. The new BJ Group had
assessment work from 2011 applied to advance expiry dates to 2021. Seabridge is
provided with monthly 90-day forward reports of all land tenures (lode and placer)
requiring action within that period. TCG files any work done on the properties, based on
details provided by Seabridge, or files cash in lieu of work, for the company. RMI has
relied on information with respect to all mining claim matters as provided by TCG in a
letter titled “Title Review – KSM Property”, by John Brassard, dated October 6, 2016.

Table 4.1 shows Seabridge's mineral claim blocks including the KSM, Seabee, and Tina
groups. The location of the four mineralized zones (Kerr, Sulphurets, Mitchell, and Iron
Cap) is depicted in the southwestern portion of the figure. Table 4.2 shows Seabridge's
placer claims.

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 Figure 4.1 General Location Map

Source: ERM

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Figure 4.2 KSM Mineral Claim Map

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Figure 4.3 KSM Placer Claim Map

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Table 4.1 KSM Mineral Claims and Leases
Work Annual Annual
Claim Claim Area Good To Anniversary Anniv. Due Work Due Cash-in-Lieu
No. Name (ha) Date Date Year (Cdn$/ha) (Cdn$) (Cdn$)
Claims (18)
394780 BJ 5 100.0000 30-Nov-2021 30-Nov-2021 1 5.00 500.00 1,000.00
394781 BJ 6 100.0000 30-Nov-2021 30-Nov-2021 1 5.00 500.00 1,000.00
394786 BJ 11 500.0000 30-Nov-2021 30-Nov-2021 1 5.00 2,500.00 5,000.00
394787 BJ 12 500.0000 30-Nov-2021 30-Nov-2021 1 5.00 2,500.00 5,000.00
394788 BJ 13 100.0000 30-Nov-2021 30-Nov-2021 1 5.00 500.00 1,000.00
394789 BJ 13A 25.0000 30-Nov-2021 30-Nov-2021 1 5.00 125.00 250.00
394790 BJ 14 100.0000 30-Nov-2021 30-Nov-2021 1 5.00 500.00 1,000.00
394791 BJ 15 250.0000 30-Nov-2021 30-Nov-2021 1 5.00 1,250.00 2,500.00
394794 BJ 18 300.0000 30-Nov-2021 30-Nov-2021 1 5.00 1,500.00 3,000.00
394808 BJ 31A 375.0000 31-Dec-2021 31-Dec-2021 1 5.00 1,875.00 3,750.00
394809 BJ 32 150.0000 31-Dec-2021 31-Dec-2021 1 5.00 750.00 1,500.00
394810 BJ 33 450.0000 31-Dec-2021 31-Dec-2021 1 5.00 2,250.00 4,500.00
394811 BJ 34 150.0000 31-Dec-2021 31-Dec-2021 1 5.00 750.00 1,500.00
394812 BJ 35 450.0000 31-Dec-2021 31-Dec-2021 1 5.00 2,250.00 4,500.00
683463 - 1,246.5185 30-Nov-2021 30-Nov-2021 1 5.00 6,232.59 12,465.19
683483 - 837.5991 30-Nov-2021 30-Nov-2021 1 5.00 4,188.00 8,375.99
705591 BJ GAP1 231.6166 05-Feb-2021 05-Feb-2021 1 5.00 1,158.08 2,316.17
705592 BJ GAP2 160.4624 05-Feb-2021 05-Feb-2021 1 5.00 802.31 1,604.62
Totals - 6,026.1966 - - - - 30,130.98 60,261.97
Mineral Leases (2)
1031440 - 6,085 06-Oct-2016 - - 20.00 121,700.00 -
1031441 - 5,162 06-Oct-2016 - - 20.00 103,240.00 -
Totals - 11,247 - - - - 224,940.00 -

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Table 4.2 KSM Placer Claims
Next Annual Annual Annual No.
Claim Claim Area Good to Work Due Work Due Cash-in-Lieu of Map
No. Name (ha) Date ($/ha) (Cdn$) (Cdn$) Cells Number
Placer Claims (3)
986922 PL21 35.7243 16-May-2017 20.00 714.49 1,428.97 2 104B
986924 PL22 35.7244 16-May-2017 20.00 714.49 1,428.98 2 104B
986925 PL23 107.1670 16-May-2017 20.00 2,143.34 4,286.68 6 104B
3,572.32 7,144.63 -
Totals - 178.6200 - - 3,572.32 7,144.63 -

Seabridge Gold Inc. 4-7 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update
and Preliminary Economic Assessment
Table 4.3 Seabee/Tina KSM Claims
Work Annual Annual
Claim Claim Area Good To Anniv. Anniv. Due Work Due Cash-in-Lieu Due No. of Map
No. Name (ha) Date Date Year (Cdn$/ha) (Cdn$) (Cdn$) Cells Number
Seabee Property Mineral Claims (46)
566467 BRIDGE1 445.8258 08-Feb-2017 08-Feb-2017 1 5.00 2,229.13 4,458.26 25 104A
566468 BRIDGE2 445.5733 08-Feb-2017 08-Feb-2017 1 5.00 2,227.87 4,455.73 25 104A
566469 BRIDGE3 427.7919 08-Feb-2017 08-Feb-2017 1 5.00 2,138.96 4,277.92 24 104A
566470 BRIDGE4 427.9770 08-Feb-2017 08-Feb-2017 1 5.00 2,139.89 4,279.77 24 104A
566471 BRIDGE5 445.7336 08-Feb-2017 08-Feb-2017 1 5.00 2,228.67 4,457.34 25 104A
566472 BRIDGE6 445.5766 08-Feb-2017 08-Feb-2017 1 5.00 2,227.88 4,455.77 25 104A
566473 BRIDGE7 427.9217 08-Feb-2017 08-Feb-2017 1 5.00 2,139.61 4,279.22 24 104A
566474 BRIDGE8 427.7599 08-Feb-2017 08-Feb-2017 1 5.00 2,138.80 4,277.60 24 104A
566475 BRIDGE9 427.6131 08-Feb-2017 08-Feb-2017 1 5.00 2,138.07 4,276.13 24 104A
566476 BRIDGE10 445.5312 08-Feb-2017 08-Feb-2017 1 5.00 2,227.66 4,455.31 25 104A
566477 BRIDGE11 302.8823 08-Feb-2017 08-Feb-2017 1 5.00 1,514.41 3,028.82 17 104A
566478 BRIDGE12 427.4311 08-Feb-2017 08-Feb-2017 1 5.00 2,137.16 4,274.31 24 104A
566479 BRIDGE13 445.1533 08-Feb-2017 08-Feb-2017 1 5.00 2,225.77 4,451.53 25 104A
566481 BRIDGE14 445.0611 08-Feb-2017 08-Feb-2017 1 5.00 2,225.31 4,450.61 25 104A
566482 BRIDGE15 444.8427 08-Feb-2017 08-Feb-2017 1 5.00 2,224.21 4,448.43 25 104A
566484 BRIDGE16 444.5621 08-Feb-2017 08-Feb-2017 1 5.00 2,222.81 4,445.62 25 104A
566485 BRIDGE17 426.7283 08-Feb-2017 08-Feb-2017 1 5.00 2,133.64 4,267.28 24 104A
566487 BRIDGE18 444.7114 08-Feb-2017 08-Feb-2017 1 5.00 2,223.56 4,447.11 25 104A
566488 BRIDGE19 444.8346 08-Feb-2017 08-Feb-2017 1 5.00 2,224.17 4,448.35 25 104A
566489 BRIDGE20 444.9690 08-Feb-2017 08-Feb-2017 1 5.00 2,224.85 4,449.69 25 104A
566490 BRIDGE21 427.2642 08-Feb-2017 08-Feb-2017 1 5.00 2,136.32 4,272.64 24 104A
566491 BRIDGE22 445.1671 08-Feb-2017 08-Feb-2017 1 5.00 2,225.84 4,451.67 25 104A
566492 BRIDGE23 427.3078 08-Feb-2017 08-Feb-2017 1 5.00 2,136.54 4,273.08 24 104A
table continues…

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update
and Preliminary Economic Assessment
 Work Annual Annual
Claim Claim Area Good To Anniv. Anniv. Due Work Due Cash-in-Lieu Due No. of Map
No. Name (ha) Date Date Year (Cdn$/ha) (Cdn$) (Cdn$) Cells Number
566493 BRIDGE24 427.9239 08-Feb-2017 08-Feb-2017 1 5.00 2,139.62 4,279.24 24 104A
566494 BRIDGE25 427.9246 08-Feb-2017 08-Feb-2017 1 5.00 2,139.62 4,279.25 24 104A
566495 BRIDGE26 444.8785 08-Feb-2017 08-Feb-2017 1 5.00 2,224.39 4,448.79 25 104A
566496 BRIDGE27 391.3145 08-Feb-2017 08-Feb-2017 1 5.00 1,956.57 3,913.15 22 104B
566497 BRIDGE28 444.4573 08-Feb-2017 08-Feb-2017 1 5.00 2,222.29 4,444.57 25 104A
566567 BRIDGE29 427.4572 08-Feb-2017 08-Feb-2017 1 5.00 2,137.29 4,274.57 24 104A
571582 SEABEE1 408.8286 08-Feb-2017 08-Feb-2017 1 5.00 2,044.14 4,088.29 23 104A
571583 SEABEE2 373.1368 08-Feb-2017 08-Feb-2017 1 5.00 1,865.68 3,731.37 21 104A
571584 SEABEE3 444.0680 08-Feb-2017 08-Feb-2017 1 5.00 2,220.34 4,440.68 25 104A
571585 SEABEE4 426.0832 08-Feb-2017 08-Feb-2017 1 5.00 2,130.42 4,260.83 24 104A
571586 SEABEE5 372.6392 08-Feb-2017 08-Feb-2017 1 5.00 1,863.20 3,726.39 21 104A
571587 SEABEE6 159.6419 08-Feb-2017 08-Feb-2017 1 5.00 798.21 1,596.42 9 104A
573813 SEABEE7 213.2634 08-Feb-2017 08-Feb-2017 1 5.00 1,066.32 2,132.63 12 104A
575633 SEA 1 445.1987 08-Feb-2017 08-Feb-2017 1 5.00 2,225.99 4,451.99 25 104A
575635 SEA 2 445.3012 08-Feb-2017 08-Feb-2017 1 5.00 2,226.51 4,453.01 25 104A
575636 SEA 3 445.4096 08-Feb-2017 08-Feb-2017 1 5.00 2,227.05 4,454.10 25 104A
575638 SEA 4 445.4484 08-Feb-2017 08-Feb-2017 1 5.00 2,227.24 4,454.48 25 104A
575639 SEA 5 445.3365 08-Feb-2017 08-Feb-2017 1 5.00 2,226.68 4,453.37 25 104A
575642 SEA 6 445.0850 08-Feb-2017 08-Feb-2017 1 5.00 2,225.43 4,450.85 25 104A
575643 SEA 7 213.4398 08-Feb-2017 08-Feb-2017 1 5.00 1,067.20 2,134.40 12 104A
575645 SEA 8 427.0822 08-Feb-2017 08-Feb-2017 1 5.00 2,135.41 4,270.82 24 104A
575646 SEA 9 35.5980 08-Feb-2017 08-Feb-2017 1 5.00 177.99 355.98 2 104A
603133 SEABEE 8 426.5614 08-Feb-2017 08-Feb-2017 1 5.00 2,132.81 4,265.61 24 104B
Totals - 18,674.2970 - - - - 93,371.49 186,742.97 - -
table continues…

Seabridge Gold Inc. 4-9 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update
and Preliminary Economic Assessment
 Work Annual Annual
Claim Claim Area Good To Anniv. Anniv. Due Work Due Cash-in-Lieu Due No. of Map
No. Name (ha) Date Date Year (Cdn$/ha) (Cdn$) (Cdn$) Cells Number
Tina Property Mineral Claims (7)
401548 TINA 1 500.0000 28-Feb-2018 28-Feb-2018 1 5.00 2,500.00 5,000.00 - 104B070
401549 TINA 2 500.0000 28-Feb-2018 28-Feb-2018 1 5.00 2,500.00 5,000.00 - 104B070
401550 TINA 3 500.0000 28-Feb-2018 28-Feb-2018 1 5.00 2,500.00 5,000.00 - 104B070
401551 TINA 4 500.0000 28-Feb-2018 28-Feb-2018 1 5.00 2,500.00 5,000.00 - 104B070
401552 TINA 5 500.0000 28-Feb-2018 28-Feb-2018 1 5.00 2,500.00 5,000.00 - 104B070
401553 TINA 6 250.0000 28-Feb-2018 28-Feb-2018 1 5.00 1,250.00 2,500.00 - 104B070
603134 SEABEE 9 53.3796 28-Feb-2018 28-Feb-2018 1 5.00 266.90 533.80 - 104B
Totals - 2,803.3796 - - - - 14,016.90 28,033.80 - -

Seabridge Gold Inc. 4-10 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update
and Preliminary Economic Assessment
5.0 ACCESSIBILITY, CLIMATE,
INFRASTRUCTURE, LOCAL RESOURCES AND
PHYSIOGRAPHY

The following section was taken from RMI’s April 6, 2007 NI 43-101 report entitled
“Mitchell Creek Technical Report, Northern British Columbia” (Lechner 2007), remains
largely unchanged, and has only been updated for consistency in abbreviations and
grammar.

The Property lies in the rugged Coastal Mountains of northwestern BC, with elevations
ranging from 520 m in Sulphurets Creek valley to over 2,300 m at the highest peaks.
Valley glaciers fill the upper portions of the larger valleys from just below the tree line and
upwards. The glaciers have been retreating for at least the last several decades. Aerial
photos indicate the Mitchell Glacier has retreated more than one kilometre laterally and
perhaps several hundred metres vertically since 1991.

The Property is drained by Sulphurets and Mitchell Creek watersheds that empty into the
Unuk River, which flows westward to the Pacific Ocean through Alaska. The tree line lies
at about 1,240 masl, below which a mature forest of mostly hemlock and balsam fir
abruptly develops. Fish are not known to inhabit the Sulphurets and Mitchell
watersheds. Large wildlife such as deer, moose, and caribou are rare due to the rugged
topography and restricted access; however, bears and mountain goats are common.

The climate is generally that of a temperate or northern coastal rainforest, with sub-arctic
conditions at high elevations. Precipitation is high with annual rainfall and snowfall totals
estimated to be somewhere between the historical averages for the Eskay Creek Mine
and Stewart, BC. These range from 801 to 1,295 mm of rain and 572 to 1,098 cm of
snow, respectively (data to 2005). The length of the snow-free season varies from about
May through November at lower elevations and from July through September at higher
elevations. Exploration activities have typically been carried out from late May into
November. It is envisioned that operations would be conducted throughout the year with
assets required for snow removal.

Access to the Property is via helicopter. Three staging areas for mobilizing crews and
equipment were used. These are:

1. An area located at kilometre 54 on the private Eskay Creek Mine Road, which is
about 25 km to the north-northwest of the Property.
2. Along the public Granduc Road, which is located about 35 km to the south-
southeast of the Property, which in turn is about 40 km north of the town of
Stewart, BC. A section of this road passes through Alaska and the town of Hyder.
This area has not been utilized since 2011.

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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 3. The Bell II Lodge, on Highway 37, 40 km east-northeast.

Stewart, a town of approximately 500 inhabitants, is the closest population center to the
Property. It is connected to the provincial highway system via paved, all weather Highway
37A. The larger population centers of Prince Rupert, Terrace, Kitimat, and Smithers, with
a total population of about 36,000, are located approximately 270 km to the southeast.

Deep-water loading facilities for shipping bulk mineral concentrates exist in Stewart, and
are currently utilized by the Red Chris Mine. Historically they have been used by several
other mines in northern, BC. The nearest railway is the CNR Yellowhead route, which is
located approximately 220 km southeast of the Property. This line runs east-west, and
can deliver concentrate to deep-water ports near Prince Rupert and Vancouver, BC.

The Property lies on Crown land; therefore all surface and access rights are granted by
the Mineral Tenure Act, the Mining Right of Way Act and the Mining Rights Amendment
Act. There are no settlements or privately owned land in this area; there is limited
commercial recreational activity in the form of helicopter skiing and guided fishing
adventures. The closest power transmission lines run along the Highway 37, 40 km east
of the Project, and along the 37A corridor to Stewart, approximately 50 km southeast.

Pretium is currently developing their high-grade underground Brucejack gold project,

adjacent to the east side of the Property. The Brucejack project is scheduled to come on
stream in 2017 with access to the Brucejack mine site via a road branching from
Highway 37, and includes several kilometers on glacial ice.

Seabridge Gold Inc. 5-2 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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6.0 HISTORY

6.1 EXPLORATION HISTORY

The modern exploration history of the area began in the 1960s, with brief programs
conducted by Newmont Mining Corp. (Newmont), Granduc, Phelps Dodge, and the
Meridian Syndicate. All of these programs were focused towards gold exploration.
Various explorers were attracted to this area due to the numerous large, prominent pyritic
gossans that are exposed in alpine areas. There is evidence that prospectors were active
in the area prior to 1935. Several short hole, reconnaissance level drilling programs
were undertaken between 1969 and 1991. The Sulphurets Zone was first drilled by Esso
Minerals in 1969, Kerr was first drilled by Brinco Ltd. in 1985, Mitchell Creek by
Newhawk in 1991, and Iron Cap by Esso Minerals in 1980.

In 1989, Placer Dome acquired a 100% interest in the Kerr deposit from Western
Canadian Mines; in the following year, they acquired the adjacent Sulphurets Property
from Newhawk. The Sulphurets Property also hosts the Mitchell Creek deposit and other
mineral occurrences. In 2000, Seabridge acquired a 100% interest from Placer Dome in
both the Kerr and Sulphurets properties, subject to capped royalties.

There is no recorded mineral production, nor evidence of it, from the Property.
Immediately west of the Property, small-scale placer gold mining has occurred in the
Sulphurets and Mitchell creeks. On the Brucejack Property immediately to the east and
currently owned by Pretium, limited underground development and test mining was
undertaken in the 1990s on narrow, gold-silver bearing quartz veins at the West Zone.
Table 6.1 summarizes the more recent exploration history of the Project.

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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 Table 6.1 Exploration Summary of the Kerr and Deep Kerr Zones
Year Activity
1982-1983 "Alpha Joint Venture (JV)" began prospecting and soil geochemical surveys of the
Kerr gossan focusing on gold.
1984-1985 Brinco optioned the Kerr project, completed some geological surveys and drilled
3 holes.
1987-1989 Western Canadian Mines optioned Kerr and completed 59 drill holes and
recognized Cu-Au porphyry.
1989 Placer Dome acquires Kerr Property.
1990-1992 Placer Dome began delineation drilling of Kerr deposit at 50 m centers by drilling
82 holes.
1992-1996 Placer Dome estimated resources (non NI 43-101), metallurgical testwork, and
scoping studies.
1996-2000 Project was dormant.
2000 Seabridge acquired a 100% interest in Kerr from Placer Dome.
2002 Noranda acquired an option from Seabridge with the right to earn up to a 65%
interest in Kerr.
2003-2004 Noranda undertook various exploration surveys.
2006 Seabridge purchases Falconbridge (formerly Noranda) option.
2009 Seabridge drilled 7 holes totalling 1,159 m; conducted metallurgical testing and
permit work.
2010 Seabridge drilled 4 holes totalling 1,453 m; conducted metallurgical testing and
permit work.
2011 Seabridge drilled 4 resource definition holes totalling 2,338 m, completed
magneto-telluric geophysical surveys
2012 Seabridge drilled 5 exploration holes totalling 3,730.6 m
2013 Seabridge drilled 29 resource definition holes totalling 23,822.4 m, completed
induced polarization and down-hole geophysical surveys
2014 Seabridge drilled 16 resource definition holes totalling 15,909.6 m, completed
magneto-telluric and gravity geophysical surveys
2015 Seabridge drilled 5 resource definition holes totalling 6,437.2 m, completed
airborne magnetic geophysical survey

Table 6.2 summarizes the exploration history of the Sulphurets, Mitchell, and Iron Cap
zones.

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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 Table 6.2 Exploration Summary of the Sulphurets, Mitchell, Iron Cap Zones, and
Exploration Targets
Year Activity
1880-1933 Limited placer gold exploration and mining.
1935-1959 Placer gold prospecting, prospecting and staking of mining claims.
1959-1960 Newmont and Granduc conducted surveys including airborne mag. Sulphurets and
Iron Cap Au zones discovered. D. Ross, S. Bishop, and W. Dawson prospected and
stake claims in area.
1961-1968 Granduc conducted geologic/geochemical surveys and drilled 9 holes into the
Sulphurets Zone. Ross-Bishop-Dawson claims optioned by Phelps Dodge in 1962,
Meridian Syndicate in 1965, and Granduc in 1968.
1963 R. Kirkham completed a M.Sc. thesis on the geology of Mitchell and Sulphurets
areas.
1981 T. Simpson completed a M.Sc. thesis on the geology of the Sulphurets gold zone.
1971-1977 Granduc conducted additional exploration surveys targeting molybdenum and
drilled 6 holes into the Snowfield Zone (Bruceside).
1979-1984 Esso Minerals optioned Sulphurets Property and completed early stage exploration
including drilling 14 holes (2,275 m).
1985-1991 Granduc optioned Sulphurets to Lacana (later Corona) and Newhawk. Lacana-
Newhawk JV spent approx. $21 M developing West Zone and other smaller
precious metal veins on the Bruceside Property. Drilled 11 holes at Sulphurets.
Homestake undertook exploration after acquiring Corona.
1991 Arbee prospect optioned by Newhawk from D. Ross.
1992 Arbee prospect optioned by Placer Dome from Newhawk.
1991-1992 Newhawk commissioned AB geophysical survey over Sulphurets. Newhawk
subdivided the Sulphurets Property into Sulphside and Bruceside. Placer Dome
acquires Sulphside (Sulphurets, Mitchell, Iron Cap, and other prospects).
1992 Placer Dome undertook delineation drilling of Sulphurets deposit at 50 m centres
(23 holes).
1993 J. Margolis completed a Ph.D. thesis on the Sulphurets district. Newhawk-Corona
drilled 3 holes in the Snowfields and Josephine zones east of Sulphurets.
1992-1996 Placer Dome completed geologic modeling, resource estimation (not NI 43-101
compliant), preliminary metallurgical testwork, and scoping studies.
1999 Silver Standard Resources Inc. acquired Newhawk.
1996-2000 Sulphurets project was dormant.
2000 Seabridge acquired a 100% interest in the Sulphurets/Mitchell properties from
Placer Dome.
2002 Noranda acquired an option to earn up to 65% from Seabridge.
2003-2004 Noranda undertook various exploration surveys.
2005 Falconbridge (formerly Noranda) completed 4,092 m of diamond drilling in
16 holes.
2006 Seabridge purchased Falconbridge's option and drilled 29 holes totalling about
9,129 m at the Sulphurets and Mitchell zones.
2007 Seabridge purchased Arbee prospect from D. Ross and drilled 37 holes totalling
15,650 m.
table continues…

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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 Year Activity
2008 Seabridge drilled 37 holes totalling 17,192 m, started metallurgical testing,
obtained new topographic data, and initiated permit related activities.
2009 Seabridge drilled 11,843.8 m (resource definition, geotechnical and water
monitoring), conducted metallurgical testing, and intensified permit data collection.
2010 Seabridge drilled 86 holes totalling 26,755.7 m (resource definition and
geotechnical), conducted metallurgical testing, and intensified permit data
collection.
2011 Seabridge drilled 54 resource definition holes totalling 18,087.2 m, continued
prefeasibility-level work, completed magneto-telluric geophysical surveys.
2012 Seabridge drilled 25 holes totalling 15,452.85 m.
2013 Seabridge drilled 11 holes totalling 8,857.4 m, completed induced polarization and
downhole geophysical surveys.
2014 Seabridge drilled 13 holes totalling 13,601.25 m, completed magneto-telluric and
gravity geophysical surveys.
2015 Seabridge drilled 8 holes totalling 4,581.1 m, completed airborne magnetic
geophysical survey.

6.2 HISTORICAL RESOURCE ESTIMATES

RMI is unaware of any publicly disclosed historical Mineral Resource estimates for the
KSM deposits prior to Seabridge's entry into the district. RMI has prepared NI 43-101
compliant Mineral Resources for the Kerr, Sulphurets, Mitchell, and Iron Cap zones
(Lechner, 2007; Lechner 2008a; Lechner, 2008b; Lechner, 2009; Lechner, 2010;
Lechner, 2011; Lechner, 2014). Those Mineral Resources have been replaced and
updated with this Technical Report as discussed in Section 14.0.

6.3 HISTORY OF PRODUCTION

There is no known production from the Kerr, Sulphurets, Mitchell, or Iron Cap deposits.

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7.0 GEOLOGICAL SETTING AND
MINERALIZATION

7.1 GEOLOGICAL SETTING

The region lies within “Stikinia”, a terrane of Triassic and Jurassic volcanic arcs that were
accreted onto the Paleozoic basement of the North American continental margin in the
Middle Jurassic. Stikinia is the largest of several fault bounded, allochthonous terranes
within the Intermontane belt, which lies between the post-accretionary, Tertiary intrusives
of the Coast belt and continental margin sedimentary prisms of the Foreland (Rocky
Mountain) belt. In the Kerr-Sulphurets area, Stikinia is dominated by variably deformed,
oceanic island arc complexes of the Triassic Stuhini and Jurassic Hazelton groups. Back-
arc basins formed eastward of the KSM Property in the Late Jurassic and Cretaceous
were filled with thick accumulations of fine black clastic sediments of the Bowser Group.
Folding and thrusting due to sinistral transpression tectonics in the mid-Cretaceous
followed by extensional conditions generated the area’s current structural features. The
most important structure is the north-northeast striking, moderately west-northwest
dipping STF, which transects the Property and is spatially and genetically related to
mineralization at KSM. Remnants of Quaternary basaltic eruptions occur throughout the
region.

Early Jurassic sub-volcanic intrusive complexes are common in the Stikinia terrane, and
several host well-known precious- and base-metal-rich hydrothermal systems. These
include copper-gold porphyry zones such as Galore Creek, Red Chris, Kemess, Mt.
Milligan, and Kerr-Sulphurets. In addition, there are a number of related polymetallic
zones including skarns at Premier, epithermal veins and subaqueous vein and
replacement sulphide zones at Eskay Creek, Snip, Brucejack, and Granduc.

At Kerr-Sulphurets, Triassic rocks include marine sediments and intermediate volcanics

of the Stuhini Group. The lowermost Stuhini Group is dominated by turbiditic argillite and
sandstone, which are overlain by volcanic pillowed flows and breccias. The upper portion
consists of turbidites and graded sandstones similar to the base strata. The Stuhini
Group is separated by an erosional unconformity from the overlying Jurassic sediments
and volcanics of the Jack Formation and Hazelton Group. The Jack Formation is
comprised of fossiliferous, limey sediments, mudstones, and sandstones. The base is
marked by a granodiorite and limestone cobble bearing conglomerate. Overlying the Jack
Formation is the Hazelton Group, dominated by andesitic flows and breccias zoned in a
volcanic chain with high paleotopographic relief. Distinct felsic welded tuff horizons of
the Mount Dilworth Formation are an important stratigraphic marker in the Hazelton
Group, as they are closely associated with the Eskay Creek Zone.

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 A variety of dikes, sills, and plugs of diorite, monzodiorite, syenite, and granite are found
in the area. Radiometric dating indicates these are of Early Jurassic age and they are
collectively referred to as the “Mitchell Intrusions”. Below the STF and MTF, this suite of
intrusions include mineralized and non-mineralized stocks. The mineralized stocks
include the Kerr, Sulphurets, Mitchell and Iron Cap zones, all positioned below and within
a few hundred meters of its current track. There are a number of sills and plugs of
coarse-grained feldspar porphyritic monzonite to low-silica granite that intruded
mineralized porphyries and siliceous hornfelsed sediments and volcanics. These are
more abundant above the STF, and are similar to “Premier” type porphyritic intrusions
common in the Stewart district. Figure 7.1 is a generalized geologic map of the KSM
district showing lithology, major structures, and mineralized zones. Drill hole locations
are shown for all KSM deposits in Section 10.0 (Figure 10.1 to Figure 10.5).

Seabridge Gold Inc. 7-2 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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 Figure 7.1 Geology of the KSM District

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2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
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7.2 MINERALIZATION
7.2.1 KERR ZONE
The Kerr Zone is centered on a north-south trending, steep westerly dipping, tabular
intrusive complex that drilling demonstrates has a horizontal extent of 2,400 m and a
vertical extent of at least 2,200 m. The complex includes an east and west limb that may
coalesce near the current surface. The west limb is up to 500 m thick, and the east limb
is up to 300 m thick. There are several distinct intrusive phases, the earliest of which are
fine grained diorites with 5% to 60% quartz-sulphide vein stockworks, and these appear
to contribute the majority of metals. Later phases envelope and sometimes invade the
earlier phase, and are characterized by coarser textures, less veining, and lower metal
contents. The intrusions are hosted by an Early Jurassic sequence of rhythmically
bedded siltstones, sandstones, conglomerates, and debris flows that have been altered
adjacent to the intrusions, but generally contain marginal metal grades.

At Kerr, dating of the intrusions indicates an age of approximately 190 million years,
much older than most known porphyry systems. Subsequent tectonic events have
modified the original geologic positioning so that mineral assemblages characteristic of
deeper parts of a porphyry system are now at higher levels. For example, at the southern
end of Kerr, potassic altered diorite with magnetite veins and high gold-copper grades,
typical of the roots of porphyry systems, are found near the surface at an elevation of
about 1,600 m. At the northern end, phyllic altered diorite cut by veins with advanced
argillic assemblages, which are characteristic of much shallower depths, have been
intersected at elevations less than 0 m. The modified geometry of the Kerr porphyry
system has significant modeling and exploration implications, as higher grade deep core
zones may occur at exploitable depths.

Various lithology and alteration types were modeled as 3D wireframes for the Kerr
deposit and are summarized in Table 7.1. Mineralization occurs mainly in the PAND1
intrusion and IBX breccia and wall rock complex; however it may extend into the adjacent
late PAND2 intrusion and wall rock sediments. The dominant copper mineral is
chalcopyrite, which typically occurs as isolated grains about 0.2 to 2 mm across,
disseminated and clustered in quartz veins, fractures, and surrounding haloes. Bornite is
present almost exclusively in the north half of the east leg, within a phase containing over
50% crackled quartz veins, accompanied by coarse grained chalcopyrite and minor
tennantite. Tennantite is rare, but widely distributed in late quartz-carbonate veins,
mostly in wall rocks, along with minor sphalerite, rare galena, and arsenopyrite. Dark,
arseniferous pyrite is associated with these minerals. Molybdenum is a minor
constituent, mostly contained within the PAND1 and IBX units and closely associated with
copper. This is distinct from the Mitchell zone, where molybdenum is distributed mainly
in a shell in wall rocks peripheral to the copper zone. Visible gold has not been observed
except under microscopic examinations, where it is observed as less than 100 µm
inclusions within sulphides, mainly chalcopyrite, and sulphide grain boundaries.

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 Table 7.1 Kerr Zone Wireframe Models
Type Code Description
Lithology OVBN overburden; includes Kerr slide material
Lithology PMFP late porphyritic dykes, non-mineralized, with distinct centimetre-scale,
white potassium-spar phenocrysts
Lithology IBX mixed complex of altered and sheared host rocks, dykes, and breccias
usually altered and mineralized
Lithology PAND1 feldspar and hornblende porphyritic diorite, part of the Mitchell
Intrusive Suite, early mineralizing phase; at Kerr, stockwork veining is
usually weak, except for relatively narrow zones of high stockworked,
early phases with above average metal grades
Lithology PAND2 similar to PAND1, but a later intrusive phase, generally with only
marginal metal grades
Lithology HAZELTON_FW Hazelton Group layered sedimentary rocks, dominantly grey-green
marine siltstones, sandstones, conglomerates, debris flows, volcanic
derived, also black and dark grey, carbonaceous argillite and siltstone;
when strongly bleached and altered, they are often foliated and logged
as tuffs; includes scattered intervals of dioritic dykes, geometry
uncertain
Lithology PMFP_HW same as PMFP, but in panel above F2 fault
Lithology HAZELTON_HW same as HAZELTON_FW, but in panel above F2 fault
Alteration IARG_HG dominantly phyllic alteration—intense, pervasive quartz-sericite-clay-
chlorite-pyrite replacement of most minerals, generally less competent,
foliated to schistose; pyrite 5% to 15%, disseminated, fine veinlets, rare
sub-meter veins; variable but minor fine disseminated chalcopyrite,
tennantite (tn)-tetrahedrite (tt), enstatite, sphalerite; may have
associated anomalous mercury, in part ore grade copper and gold
values; generally this is an outer phyllic zone that effects mostly wall
rocks
Alteration IARG similar to IARG_HG, but less intense, more competent, less sulphide,
remnant chlorite, generally anomalous or marginal metal grades
Alteration QSP dominantly phyllic alteration—intense, pervasive quartz-sericite-clay-
pyrite replacement of most minerals, similar to and transitional with
IARG; pyrite 5% to 15%, pyrite>chalcopyrite, typically ore grade copper
and gold values; rare tn-tt, enstatite, bornite associated with some
structures
Alteration CL dominantly potassic alteration—quartz-chlorite-pyrite, pervasive and
vein controlled, almost all secondary potassium-spar and biotite has
been replaced by chlorite; competent rock, generally effects intrusive
rocks, usually mineralized; pyrite 1% to 5%, pyrite and chalcopyrite
abundances usually similar, generally ore grade copper and gold values
in PAND1 unit
Alteration PR dominantly propylitic alteration—generally weak, fracture and vein
controlled quartz-pyrite-epidote-carbonate-hematite mineralization in
wall rocks; late, millimetre to centimetre scale, tension gash and
dilational space filling carbonate veins and lenses are very common;
peripheral to Kerr Zone, includes porphyry-related "hornfels" alteration
Structure F2 normal fault, displacement on order of 10s of meters, post-mineral and
post-thrusting

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 Photographs of polished drill core samples representative of rock types from the Kerr
deposit are shown in Figure 7.2. The width of the core samples (vertical axis) in the
photographs shown in is approximately 2.5 cm. Representative lithologic and alteration
cross sections through the Kerr deposit are shown in Figure 7.3 and Figure 7.4,
respectively. Lithologic and alteration level plan maps are shown in Figure 7.5 and Figure
7.6, respectively.

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 Figure 7.2 Kerr Polished Drill Core Photographs

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 Figure 7.3 Kerr Lithologic Cross Section

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 Figure 7.4 Kerr Alteration Cross Section

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 Figure 7.5 Kerr Lithologic Level Plan

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 Figure 7.6 Kerr Alteration Level Plan

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7.2.2 SULPHURETS ZONE
The Sulphurets Zone is comprised of two distinct zones—Raewyn and Breccia Gold. The
Raewyn Copper-Gold Zone hosts mostly porphyry-style disseminated chalcopyrite and
associated gold mineralization in moderately quartz stockworked, chlorite-biotite-sericite-
magnetite altered sediments and volcanics. The alteration and mineralization are
centred on meter scale; sills and dykes of altered porphyritic diorite are believed to tap a
stock at depth. It has an apparent north-northeast strike and dips about 45° to the
northwest, with approximate true dimensions of 1,000 m in strike, 550 m down dip, and
up to 250 m in thickness. It remains open down dip and along strike to the northeast at
depth. It may be offset in an echelon style by several north-northeast trending vertical
structures. The mineralization is open down-dip. It crops out at surface on the cliff face
above Sulphurets Lake and its upper surface follows or is clipped by the STF. The
Breccia Gold Zone hosts mostly gold-bearing pyritic mineralization with minor chalcopyrite
and sulfosalts in a potassium-feldspar-siliceous hydrothermal breccia that apparently
crosscuts the Raewyn Zone. It comprises altered intrusive clasts in a matrix of mainly
silica, potassium-feldspar and sulphides. An intense structurally controlled phyllic
overprint nearly masks all earlier alteration phases over parts of the zone. Above the
STF, low-grade, but widespread disseminated copper-gold mineralization, occurs in
hornfels and skarned sediments and volcanics that have been intruded by an non-
mineralized porphyritic monzonite. This is referred to as the Main Copper Zone, and it
makes up less than 5% of the Sulphurets Resource. Table 7.2 lists various lithologic,
alteration, and mineralized wireframes that were constructed by Seabridge personnel for
the Sulphurets block model.

Table 7.2 Sulphurets Zone Wireframe Models

Type Code Description
Lithology & S_HAZ_HW chlorite-silica-pyrite-magnetite altered, grey-green, volcanics and
Alteration sediments above the STF in the Main Copper Zone
Lithology & S_HAZ_FW chlorite-silica-pyrite altered, grey-green, volcanics and sediments below
Alteration the STF in the Sulphurets Zone
Lithology & S_RAE_CU chlorite-silica-biotite-magnetite altered, dark green-grey to black,
Alteration mottled textures, volcanics and sediments, Raewyn Copper-Gold Zone,
bulk of Sulphurets Zone
Lithology & S_SUL_AU silica-pyrite-sericite altered, pale grey, aphanitic rocks and
Alteration hydrothermal breccia, high gold/copper ratio, Breccia Gold Zone
Lithology & S_LCH_AU low-grade, silica-pyrite-chlorite altered rocks surrounding S_SUL_AU
Alteration
Lithology & S_LWR_AU chlorite-silica-pyrite altered volcanics and sediments, low-grade ore
Alteration

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 Photographs of polished drill core samples that are representative of several key rock
types from the Sulphurets Zone are shown in Figure 7.7. The width of the core samples
(vertical axis) is approximately 2.5 cm. Figure 7.8 and Figure 7.9show a representative
lithologic level plan map and cross section through the Sulphurets deposit, respectively.

Figure 7.7 Sulphurets Polished Core Photographs

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 Figure 7.8 Sulphurets Lithologic Level Plan

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 Figure 7.9 Sulphurets Lithologic Cross Section

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7.2.3 MITCHELL ZONE
The Mitchell Zone crops out in Mitchell Valley, through an erosional window exposing the
footwall of the MTF. The zone is a moderately dipping, roughly tabular gold-copper
deposit with approximate true dimensions of 1,600 m in strike, 1,500 m down dip, and
up to 850 m in thickness. It remains open down dip and along strike to the northeast at
depth. It consists of a foliated, schistose or mylonitic zone of intensely altered and
sulphide bearing rocks, with a variably distributed stockwork of deformed and flattened
quartz veinlets. The schistosity generally follows an east-southeast direction, and dips
moderately steep to the north. In general, the core area of mineralization has a
moderate plunge to the north or northwest, and is lineated in an east-southeast direction.

Recent glacial melt back has provided exceptional surface exposure of a relatively fresh
gold-copper porphyry system. A zone of intense quartz and sulphide veining (“High
Quartz”) forms resistant bluffs in Mitchell Valley. However, the higher grade core area is
mostly covered by talus and moraine west of the bluffs. Active oxidation and leaching of
sulphides has produced prominent gossans and extensive copper sulphate precipitates
at the surface.

The deposit is genetically related to multiple diorite intrusions that cut sedimentary and
volcanic rocks of the Stuhini Group (Upper Triassic) and sandstones, conglomerates, and
andesitic rocks of the Jack Formation (basal Hazelton Group; Lower Jurassic).
Mineralization and accompanying alteration and stockworks proceeded in four stages.
Hosted by Phase 1 plutons (196 ±2.9 Ma and 192.2 ±2.8 Ma), Stage 1 sheeted veins
and stockworks contain most of the copper-gold mineralization and potassic and
propylitic alteration. A Stage 2 disseminated and stockwork-hosted molybdenum halo
(190.3 ±0.8 Ma; rhenium-osmium) is peripheral and contiguous with the core copper-
gold system. It is associated with phyllic alteration and is temporally related to a Phase 2
pluton (189.9 ±2.8 Ma) that outcrops central to the halo. Stage 3 consists of poorly
mineralized massive pyrite veins associated with advanced argillic alteration and is
related to Phase 3 diorite, diatreme breccia emplacement and intrusion breccia dikes.
Stage 4 consists of high-level, gold-rich veins that are lateral to, and overprint, the main
deposit. The geochemistry of the intrusions, nature and extent of alteration
assemblages, high silica content of the ore zone and molybdenum mineralization,
indicate that the Mitchell porphyry is calc-alkalic. The deposit was deformed during
development of the Skeena fold and thrust belt (mid-Cretaceous), during which it was
severed along the MTF. This offset portion now lies approximately 1,200 to the east-
southeast in the hanging wall of the MTF (Snowfield Zone) (Febbo, et al., 2015).

The Mitchell Zone is considered to lie within the spectrum of the gold-enriched copper
porphyry environment. Metals, chiefly gold and copper (in terms of economic value), are
generally at low concentrations, finely disseminated, stockwork or sheeted veinlet
controlled, and pervasively dispersed over dimensions of hundreds of metres. Grades
diminish slowly over large distances; sub-economic grades are encountered at distances
of several hundreds of metres beyond the interpreted centre of the system. This is
distinct from the Sulphurets and Kerr zones, where there are more abrupt breaks in
grade due to higher structural complexity and juxtaposition of weak and moderate grade

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 domains by faulting, both syn-mineral structures controlling breccia contacts, and post-
mineral faulting and displacements.

The “Bornite Breccia” is found in the center of the Mitchell Zone towards the hanging wall
side. It was only intersected in three holes (including one interval of 86 m with 1.42%
copper and 0.23 g/t gold), and the interpreted dimensions are about 400 m long down
dip, 60 m thick, and 250 m along strike. Its geometry roughly aligns with the northwest
plunging trend of the Mitchell deposit. The breccia is composed of a chaotic, swirly mix of
crackled and milled light grey quartz, anhydrite and clay, with disseminated and
interstitial pyrite, chalcopyrite, bornite, and minor tennantite and molybdenite. In deeper
intersects the breccia transitions to a mostly quartz, anhydrite, pyrite, and chalcopyrite
hosting structure with only traces of bornite. The breccia body is interpreted to be related
to structurally controlled, late advance argillic fluids.

A small portion of the Mitchell Resource (less than 2%) is found in the hanging wall of the
MTF, where disseminated and veinlet chalcopyrite occur in magnetite skarn and hornfels
altered sediments and volcanics adjacent to a non-mineralized porphyritic monzonite.
This style is identical to the Main Copper Zone above the Sulphurets Zone.

Deep drilling in 2015 intersected a distinct medium- to coarse-grained, sub-porphyritic

monzodiorite beneath the Mitchell Zone, with grades below the Mitchell average. This
intrusion is interpreted to be a later phase, with primary potassium-feldspar phenocrysts,
an alteration mineral assemblage dominated by secondary potassium-feldspar,
magnetite, epidote and traces of actinolite, and a poor development of stockwork quartz
veins and sulphides. This mineral assemblage is characteristic of the deep peripheral
zones of porphyry deposits. Also confirmed was the presence of a roughly 50 m thick,
banded, mylonitic shear zone that may offset the base of the Mitchell deposit Basal
Shear Zone (BSF). The zone dips to the northwest and appears to parallel the MTF.

As the Bornite Breccia and BSF may have structurally offset portions of the Mitchell Zone,
potential remains for additional mineralization to be discovered. Various geologic
wireframes that were constructed by Seabridge personnel are tabulated in Table 7.3.

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 Table 7.3 Mitchell Zone Wireframe Models
Type Code Description
Lithology MONZ mostly barren, late stage, porphyritic monzonite, above MTF
Lithology PAND1 sub-porphyritic diorite, comprises several similar phases of Mitchell
intrusions, main host for mineralization
Lithology PKFP potassium feldspar porphyritic monzodiorite, weakly mineralized
Lithology SEDIMENTS wall rocks, mostly Hazelton Group sediments
Lithology & BRNBRX Late structure, chaotic, swirly mix of crackled and milled light grey
Alteration quartz, anhydrite and clay, with dpyrite, chalcopyrite, bornite, and minor
tennantite and molybdenite; only traces of bornite in deeper portions
Lithology & HI-QTZ CL and/or QSP altered rocks with greater than 40% by volume quartz
Alteration stockwork veinlets, may reflect early quartz- and sulphide-rich intrusive
phase
Alteration CL chlorite-silica altered rocks, often magnetic, ± anhy, quartz stockwork
veinlets, moderately to well mineralized; chlorite is metamorphosed
secondary biotite; this zone reflects extent of potassic alteration in
addition to KP.
Alteration IARG sericite-clay-silica altered rocks, often schistose, ± anhy, quartz
stockwork veinlets, associated with phyllic overprint, hosts low-grade
copper-gold mineralization but most of molybdenum mineralization
Alteration KP potassium-spar-magnetite-chlorite-biotite altered rocks, with variable to
intense quartz stockwork veining, moderate to well mineralized
Alteration LCHBRX zone of copper and gold depletion, forms halo around upper part of
BRNBRX
Alteration QSP quartz-sericite-clay-pyrite altered rocks, reflects variably phyllic
overprint, ± anhy, pale grey to white, quartz stockwork veinlets,
moderately well mineralized, pyrite>chalcopyrite
Alteration PR chlorite-silica-pyrite-epidote-carbonate altered rocks, low density of
quartz stockwork veinlets, weakly mineralized peripheral zone, includes
hornfelsed wall rocks

Photographs of polished drill core samples representative of rock types from the Mitchell
Zone are shown in Figure 7.10. The width of the core samples (vertical axis) is
approximately 2.5 cm. A representative cross section and level plan are also shown in
Figure 7.11 to Figure 7.14.

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 Figure 7.10 Mitchell Polished Drill Core Photographs

Representative lithologic and alteration cross sections are shown in Figure 7.11 and
Figure 7.12, respectively.

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 Figure 7.11 Mitchell Lithologic Cross Section

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 Figure 7.12 Mitchell Alteration Cross Section

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 Figure 7.13 Mitchell Lithologic Level Plan

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 Figure 7.14 Mitchell Alteration Level Plan

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7.2.4 IRON CAP ZONE
The Iron Cap deposit is a separate but related mineralized system within the KSM district,
and occurs structurally above the Mitchell deposit, in the panel of rocks between the MTF
and STF. It is now considered to be hosted by a fine-grained porphyritic diorite similar to
the Mitchell and Kerr zones. It has similar geometry; a northwest dipping tabular body
with approximate true dimensions of 850 m in strike, 1,200 m down dip, and up to
500 m in thickness. It remains open down dip and along strike to the north-northeast.
Intense alteration has obliterated most original textures. Stockwork veinlet density is
generally low, and no high quartz volumes phases have been identified as at Kerr and
Mitchell. Intrusive breccia phases are more common, but are not necessarily well
mineralized. Host rocks are mostly sandstones, siltstones, and conglomerates of the
Hazelton Group. There is a high degree of silicification in the wall rocks and peripheral
phases, which overprints earlier potassic and chloritic alteration. Copper-bearing zones
at Iron Cap demonstrate higher grades than Mitchell, which is consistent with the
intrusive setting and potassic alteration, suggestive of a deeper and hotter environment.
However, minerals usually indicative of higher levels, such as galena, sphalerite, and
silver or arsenic sulphosalts, although minor in abundance, are distributed throughout
the upper half of the zone, and may be a consequence of telescoping or downward
migration of the hydrothermal system.

Microscopic examinations of polished thin sections confirm that Iron Cap was also
subjected to a post-mineral deformational event evidenced by widespread mylonitic
textures. “Mylonite” and “Ultramylonite” are terms used as rock names in petrographic
descriptions of several Iron Cap mineralized samples, similar to the Mitchell deposit.

Generally intense silicification at the higher, eastern portions gives way to chloritization
with some preserved potassium-spar alteration at depth and towards the west, which
correlates with an increasing proportion of intrusive rock. Relative to Mitchell, stockwork
veining is much weaker. There is a distinct overprint of structurally controlled,
centimetre-scale quartz-carbonate veins with chalcopyrite, galena, sphalerite, and
tetrahedrite, but the distribution is not clear. It does not seem to effect the gold and
copper distribution on a large scale, but at the vein scale there is often correlation. High
silver values are generally associated with presence of galena and sphalerite.

The Iron Cap Zone terminates at the south along the north-dipping Iron Cap Fault (ICF).
South of the fault, hornfelsed sediments are mineralized with marginal gold and copper
grades similar to intervals above the MTF at Mitchell. A few holes through this area
contain higher than average molybdeum grades, including in interval of 133 m with
0.10% molybdenum; however, there are no Resources defined south of the ICF due to
insufficient drilling. Various lithologic and alteration wireframes used in developing
geologic models for the Iron Cap deposit are summarized in Table 7.4.

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 Table 7.4 Iron Cap Wireframe Models
Type Code Description
Lithology DIOR sub-porphyritic, intermediate intrusive rock (dioritic), 1 to 5 mm average
grain size, less than 10% aphanitic groundmass
Lithology HAZL SEDS Hazelton Group sandstones, mudstones, conglomerates (Jurassic)
between ICF and Northwest Fault (NWF) (Iron Cap Zone panel)
Lithology HAZL SEDS FW Hazelton Group sandstones, mudstones, conglomerates (Jurassic)
below ICF
Lithology HAZL SEDS HW Hazelton Group sandstones, mudstones, conglomerates (Jurassic)
above NWF
Lithology IU highly altered rock, lithic textures almost all destroyed, probably mostly
intrusive origin, in part intrusive breccia esp. near DIOR contact
Lithology PAND1 porphyritic intrusive rock, phenocrysts generally elongate green sericite
pseudomorphs, 3 to 5 mm long and 1 to 2 mm thick, may be aligned
Lithology PMON porphyritic monzonite, generally weak or non-mineralized
Alteration HFLS FW quartz-chlorite-sericite hornfels altered HAZL SEDS, below ICF
Alteration HFLS FW quartz-chlorite-sericite hornfels altered HAZL SEDS, above NWF
Alteration KP potassic altered DIOR, pervasive potassium-feldspar, shreddy chlorite,
mt at depth, rare biotite, commonly with centimetre-scale quartz-
chlorite-chalcopyrite-pyrite stockwork veinlets
Alteration PMON KP potassic altered PMON, pink rimmed (hematitic) orthoclase
phenocrysts, chloritized mafics
Alteration QSP-CL strong pervasive phyllic alteration, quartz-sericite-phengite-muscovite-
chlorite-pyrite
Alteration SIL-QSP strong pervasive silica alteration, with sericite-muscovite-illite-phengite-
pyrite

Photographs of polished drill core samples representative of rock types from the Iron Cap
deposit are shown in Figure 7.15. The width of the core samples (vertical axis) is
approximately 2.5 cm.

Representative lithologic and alteration cross sections are shown in Figure 7.16 and
Figure 7.17, respectively. Lithologic and alteration level plan maps are shown in Figure
7.18 and Figure 7.19, respectively.

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 Figure 7.15 Iron Cap Polished Drill Core Photographs

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 Figure 7.16 Iron Cap Lithologic Cross Section

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 Figure 7.17 Iron Cap Alteration Cross Section

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 Figure 7.18 Iron Cap Lithologic Level Plan

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 Figure 7.19 Iron Cap Alteration Level Plan

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8.0 DEPOSIT TYPES

The KSM intrusive complex demonstrates many features characteristic of giant diorite or
monzonite hosted gold-copper porphyry systems, such as Grasberg, Oyu Tolgoi, Bingham,
and Pebble. Porphyry deposits are the product of magma genesis at convergent plate
margins. Melting of lower crust by upwelling lithospheric and asthenospheric mantle is
the source of primitive and oxidized, metal- and volatile-rich magmas. These buoyant,
hydrated magmas are forced to shallow depths up deep penetrating faults. As they rise,
they become progressively enriched in soluble metals and other elements. Near the
surface, they experience drastic temperature, pressure, and chemical changes that force
the precipitation of metals and unique mineral assemblages in an upward and outwardly
zoned pattern that characterizes a porphyry system.

The intrusions display characteristics of both calc-alkalic than alkalic types. Although
they have relatively high magnetite and gold contents, the chemical composition
straddles the alkalic/calc-alkalic boundary. The high quartz vein, pyrite and molybdenum
contents, strong phyllic to advanced argillic overprinting, and large scale of the deposits
are considered characteristic of calc-alkaline magmatism.

The KSM complex is a cluster of deposits located in the Stikine arc terrane within the
Intermontane Belt of the Canadian Cordillera, geographically inboard of the Coast
Plutonic Complex, and accreted to the North American plate. Long-lived arc magmatism
during the Late Triassic to Early Jurassic generated paired belts of alkalic and calc-alkalic
porphyry deposits that extend along the axis of the Canadian Cordillera. The Stikine
terrane comprises three unconformity-bounded island arc volcanosedimentary
successions that span 200 Ma of geologic evolution.

The composite intrusive complex has demonstrated vertical continuity down to near-
magmatic bornite-bearing core zones and upward through voluminous mineralized stock
works into near surface epithermal vein deposits. This vertical zonation is typical of many
of the world's largest mining districts. The original architecture has been rearranged by
three phases of progressive deformation related to the mid-Cretaceous Skeena fold and
thrust. Phyllosilicate alteration assemblages and stockwork vein networks are commonly
mylonitized adjacent to thrust faults. Alteration and metal zoning confirms the adjacent
Snowfield deposit is the truncated cap of the Mitchell deposit, with an offset of
approximately one kilometer.

The KSM complex hosts an extensive alteration and mineralization system centered on a
cluster of hypabyssal, Early Jurassic “Mitchell” sub-porphyritic diorite to monzodiorite,
island arc tholeiite series intrusions. The Kerr, Mitchell and Iron Cap deposits are hosted
by multiphase stocks with dimensions of approximately 600 to 1,200 m in diameter and
up to 2,200 m vertical. The Kerr stock is elongated and bifurcated in a north-south trend
extending 2,400 m, whereas Mitchell and Iron Cap stocks trend north-northeast. All tend

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 to plunge towards the northwest. The intrusions at Sulphurets occur as much smaller
dykes but the trend is similar. Mineralization may be associated with quartz veinlet
stockworks and sheeted quartz veinlet arrays, with vein density decreasing in later
phases. Host rocks may be mineralized for up to several hundred meters from the
intrusions. Less commonly, mineralized intrusive-hydrothermal breccias cut through
previously veined and mineralized rocks.

Principal sulphides are pyrite and chalcopyrite, with minor molybdenite, and trace
amounts of tennantite, bornite, sphalerite, and galena. Magnetite and hematitized
magnetite are common, especially in deeper parts of the deposits, and anhydrite is
common in certain phases though unevenly distributed. Native gold is rarely observed,
and most occurs as microscopic clusters at sulphide grain boundaries or inclusions. All
mineralization is hypogene, except for a small remnant of preserved supergene
mineralization at the upper limits of the Kerr deposit where chalcocite coatings on pyrite
and chalcopyrite have been observed, and at the Main Copper (Sulphurets) occurrence
where a remnant of leached capping and partial oxide mineralization is preserved at the
highest elevations.

All of the KSM deposits are open at depth.

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9.0 EXPLORATION

This section describes Seabridge’s 2012 through 2015 exploration programs at KSM.
Prior exploration activities have been described in various Technical Reports prepared by
RMI (Lechner 2007; 2008a; 2008b; 2009; 2010; 2011; and 2014). Since 2012, most
of the exploration activity at KSM has centered on drilling programs designed to test for
potential high-grade feeder zones that may be associated with the currently recognized
near surface mineralized areas. Much of the discussion in this section describes various
geological observations and results obtained by the focused deep drilling programs
conducted from 2012 through 2015.

9.1 2012 KSM EXPLORATION PROGRAM

Updated geological models support a conceptual undiscovered central core zone to the
porphyry gold/copper deposits in the KSM mining district, expected to contain
significantly higher copper and gold grades in a deposit of similar scale to that which has
been delineated. A central core zone to this style of porphyry system is an essential
component of the fluid processes that formed the KSM mineral system defined to date.
The program in 2012 was designed to utilize accumulated knowledge to test the concept
of a preserved central bornite-core zone on the KSM land holdings.

The erosional level and structural displacement in the KSM district preserved the entire
vertical mineralized column of a porphyry gold/copper system. Analysis of translation
along thrust faults strongly supports the idea that a high-grade core zone is preserved on
Seabridge claims. Initially, four separate targets were identified as potential deep core
zones that were supported by the results of the magneto telluric (MT) geophysical survey
including:

 dip projection of the Sulphurets deposit

 lateral projections to the Mitchell/Iron Cap deposits
 lateral projections to the Sulphurets deposit
 dip projection of the Kerr deposit.

9.1.1 RESULTS OF 2012 EXPLORATION PROGRAM

KERR
The dip projection of the Kerr deposit returned a very discrete and high-amplitude, low-
resistivity anomaly in the MT survey. The Kerr Resource is open at depth and this
anomaly provides good support for the dip continuity of the deposit. Initially, the drill core
showed the intense hydrothermal alteration characteristic of the Kerr deposit, and

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 abundant sulphide minerals with better than average copper grades as illustrated in
Table 9.1.

Table 9.1 Select 2012 Kerr Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-12-20 1,011.0 559.8 1,011.0 451.1 0.27 0.45
829.0 852.0 23.0 0.90 1.17
K-12-21 855.3 20.0 493.0 473.0 0.31 0.90
503.0 519.0 16.0 2.20 0.04
537.0 553.3 16.3.0 6.90 0.03
672.0 738.0 66.0 0.38 0.37
767.0 781.0 14.0 1.80 0.15
K-12-22 862.5 21.0 177.0 156.0 0.24 0.65
227.0 552.0 325.0 0.27 0.48
754.5 776.5 22.0 0.33 0.98
Source: Seabridge

SULPHURETS
A low-resistivity MT anomaly along the dip projection of the Sulphurets deposit was tested
with three drill holes, totaling 2,306 m. Significant drill hole intercepts are summarized
in Table 9.2. These holes encountered extensive thermally metamorphosed or
hornfelsed rock.

Table 9.2 Select 2012 Sulphurets Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
S-12-75 717 44.0 77.0 33.0 0.25 0.18
100.7 153.7 52.9 0.25 0.16
192.0 294.0 102.0 0.32 0.22
366.5 388.0 21.5 1.25 0.07
394.0 555.0 161.0 0.41 0.22
S-12-76 699 468.0 533.1 65.1 0.36 0.29
683.0 695.0 12.0 0.92 0.02
S-12-77 900 646.0 661.0 15.0 0.72 0.02
Source: Seabridge

The lateral projection to the northeast of Sulphurets is known as the Ice Field target.
Several previous drill holes designed to extend the Sulphurets deposit encountered
intensive alteration with gold grades. A low-resistivity MT anomaly corresponded to this
target area. Two drill holes, totaling 1,410 m were completed to test this target with
select results summarized in Table 9.3.

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 Table 9.3 Select 2012 Ice Field Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
IF-12-03 783 64.6 78 13.4 2.31 0.01
180.0 215 35.0 0.47 0.07
IF-12-04 627 153.4 228 74.5 0.54 0.16
250.0 336 85.9 0.48 0.02
358.0 401 43.0 0.48 0.02
Source: Seabridge

The lateral projection to the southwest of the Sulphurets deposit is now known as the
Camp Zone. Drilling in the Camp Zone identified what is believe to be a preserved
portion of an epithermal gold-silver occurrence associated with the upper parts of the
KSM mineral system. Argillic alteration is dominant in this zone, which also contains high
gold, silver, lead, and zinc concentrations, particularly within veins and structures. This
newly discovered zone has similarities to Pretium Gold’s nearby high-grade Brucejack
deposit, representing the epithermal or upper portion of a very large gold-copper porphyry
system. However, the new Camp Zone appears to be part of the epithermal system
preserved in the bottom of Sulphurets Valley. Select Camp Zone drill hole assay results
are summarized in Table 9.4.

Table 9.4 Select 2012 Camp Zone Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
C-12-01 405.0 200.0 274.00 74.0 0.850 0.01
C-12-02 363.0 114.0 136.00 22.0 8.940 0.01
C-12-03 310.0 37.2 39.00 1.8 7.820 0.15
63.0 145.40 82.4 0.493 0.02
151.2 250.00 98.7 2.110 0.04
262.0 280.00 18.0 2.020 0.03
C-12-04 546.0 73.9 79.05 5.15 0.890 0.01
167.0 168.50 1.5 10.200 0.01
322.5 375.50 53.0 2.470 0.02
357.5 360.50 3.0 16.300 0.01
C-12-05 144.0 26.5 28.50 2.0 2.480 0.02
C-12-06 600.3 263.5 264.60 1.1 10.250 0.13
375.0 376.50 1.5 28.700 0.04
458.0 458.60 0.6 16.850 0.18
494.3 522.80 28.5 1.930 0.09
table continues…

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 Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
C-12-07 497.3 86.7 129.00 42.3 0.800 0.01
191.0 272.00 81.0 1.420 0.02
383.2 398.00 14.8 0.670 0.01
445.0 481.00 36.0 1.330 0.02
C-12-08 447.0 39.5 52.00 12.5 0.790 0.01
51.5 52.00 0.5 10.650 0.06
108.6 129.80 21.2 0.840 0.01
154.0 184.90 30.9 1.770 0.01
268.5 284.50 16.0 1.180 0.00
367.2 381.50 14.3 1.040 0.01
C-12-09 494.7 190.8 193.10 2.3 3.450 0.07
192.6 193.10 0.5 13.400 0.28
C-12-10 600.3 138.0 144.70 6.7 1.250 0.06
249.0 257.00 8.0 1.030 0.03
435.1 452.00 16.9 0.880 0.03
532.6 556.00 23.4 1.270 0.05
596.8 600.30 3.5 8.830 0.02
C-12-11 396.0 102.1 102.70 0.6 8.500 0.36
200.0 206.50 6.5 6.610 0.04
200.0 201.50 1.5 27.500 0.02
223.5 241.30 17.8 0.700 0.06
361.0 370.50 9.5 0.910 0.03
C-12-12 310.0 69.0 108.20 39.2 2.230 0.02
115.5 121.50 6.0 0.720 0.01
Source: Seabridge

MITCHELL
Two deep drill holes were completed to test a MT low-resistivity anomaly between
Mitchell and Iron Cap. The holes were collared above the STF and penetrated through
the MTF. In the panel between the STF and MTF intense hydrothermal alteration was
encountered indicative of the margins to a porphyry system. The results from the two
Mitchell holes are summarized in Table 9.5.

Table 9.5 Select 2012 Mitchell Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
M-12-128 828 9.0 661 652.0 0.16 0.11
M-12-129 903 614.6 903 288.4 0.06 0.10
Source: Seabridge

MCQUILLAN ZONE
Four drill holes were completed at the McQuillan Zone in 2012. These holes targeted a
discrete magnetic anomaly down dip of surface alteration and mineralization in the

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 Sulphurets and McQuillan prospect area. Below the MTF, alteration intensity increases
significantly and is characterized by potassium feldspar, biotite, and magnetite with
chalcopyrite and pyrite. This alteration mineral assemblage indicates that the McQuillan
target zone is within a high-temperature and high-pressure environment. Select assay
results for the 2012 McQuillan holes are summarized in Table 9.6.

Table 9.6 Select 2012 McQuillan Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
MQ-12-02 690.00 525.0 654.8 129.8 0.78 0.24
MQ-12-03 921.00 474.0 501.0 27.0 1.68 0.01
MQ-12-04 778.35 6.0 24.0 18.0 2.98 0.07
364.0 372.0 8.0 0.92 0.21
656.7 778.4 121.7 0.56 0.02
MQ-12-05 924.30 552.4 835.6 283.2 0.48 0.18
643.0 679.0 36.0 1.59 0.24
901.8 905.7 3.9.0 0.56 0.53
Source: Seabridge

9.1.2 INTERPRETATION OF 2012 EXPLORATION DATA

KERR
A high-grade, deep core zone was confirmed and additional drilling is warranted.

SULPHURETS
Low-resistivity anomalies reflect hornfelsed and mineralized sediments, but no clear
vectors to a core zone were determined. At the peripheral Ice Field and Camp zones,
epithermal styles of gold mineralization, including high-grade veins and lower-grade
disseminated, were confirmed and additional drilling is warranted.

MITCHELL
Low-resistivity anomalies reflect hornfelsed and mineralized sediments or altered
intrusions, and as the intervals are above the MTF, and well beyond either Iron Cap or
Mitchell, they are interpreted to be associated with an undiscovered, blind porphyry
system, and additional exploration is warranted.

MCQUILLAN
Results are consistent with those expected in a deep core zone environment, and
additional exploration is warranted.

9.2 2013 KSM EXPLORATION PROGRAM

Exploration in 2013 was designed to accomplish three goals. First, a program was
completed to confirm and define a porphyry core zone that was envisioned in the deep
parts of the Kerr deposit. That program began with wide-spaced drilling on the target,

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 named Deep Kerr, which established the presence of higher-grade copper and gold
intervals. Once that concept had been confirmed, drilling was stepped up to complete
sufficient holes so that an initial Mineral Resource estimation could be completed.

Second, an assessment was conducted on additional deep core targets within the
Property. The potential of this effort became obvious with the success at Kerr. The
targets were evaluated principally by drilling and detailed geology. Those preliminary
results provided a prioritization for subsequent geophysical surveys and more aggressive
drill testing.

The final goal for 2013 was an appraisal of the Camp Zone. Definition of the mineral
controls, geological limits of the system, and size potential of the target was required to
understand how this target will fit into the Project.

9.2.1 RESULTS OF 2013 EXPLORATION PROGRAM

KERR
Three drill holes completed in 2012 provided a strong indication that the dip projection of
the Kerr deposit could provide a large and higher-grade ore zone, as conceived in the
exploration model. Geophysical surveys showed a discrete high-amplitude, low-resistivity
anomaly below the surface exposure of the Kerr deposit. Part of this anomaly
corresponded with the Deep Kerr Zone and was interpreted to indicate abundant
sulphide minerals in altered rocks producing a resistivity contrast.

The first drill holes completed in 2013 immediately confirmed the concept and showed
that, sitting down dip and in part continuous from the Kerr deposit, the Deep Kerr
reported significant mineralized intervals containing total metal values per tonne that are
approximately two times KSM’s Proven and Probable Reserve average, with some
intervals exceeding 1.0% copper, and gold grades as high as 1.7 g/t. Five large core
drilling rigs were quickly moved on to the Project in order to expedite the drilling.

The drilling concentrated on about 1,000 m of strike of the projected Deep Kerr target.
During the 2013 program, 29 diamond drill holes were attempted, 25 holes were
completed through the Deep Kerr target, 2 were lost due to significant hole deviation,
and 2 were terminated due to weather and made ready for re-entry. Of the 25 holes
completed, 23 encountered significant gold and copper grades over extensive widths.
The weighted average of the drill intercepts from the Deep Kerr zone yields a grade of
0.46 g/t gold and 0.71% copper over a width of 220 m. A summary of significant drill
hole assay intersections from the 2013 Kerr drilling program are summarized in Table
9.7.

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 Table 9.7 Select 2013 Kerr Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-13-23 1,470.40 643.5 671.50 28.0 0.39 0.57
880.4 932.40 52.0 0.26 0.42
1,030.2 1,386.30 356.1 0.39 0.68
K-13-23A 1,368.40 639.1 666.10 27.0 0.35 0.69
779.3 1,023.50 244.2 0.17 0.42
932.4 1,007.70 75.3 0.26 0.59
1,319.3 1,368.40 49.1 0.38 0.58
K-13-23B 1,359.40 643.7 670.30 26.6 0.29 0.50
725.0 775.00 50.0 0.04 0.40
803.4 839.00 35.5 0.27 0.64
953.0 1,249.40 296.4 0.59 0.65
K-13-23C 1,278.40 908.9 1,224.40 315.5 0.45 0.65
K-13-24 1,221.40 610.3 625.00 14.6 0.51 0.65
703.7 737.00 33.3 0.16 0.45
807.0 929.70 122.7 0.86 0.85
K-13-24A - 791.0 1,014.30 223.3 0.31 0.42
1,080.4 1,139.60 59.2 0.26 0.62
1,061.8 1,205.00 143.2 0.19 0.40
K-13-24B 1,155.00 534.0 584.80 50.8 0.28 0.41
691.0 730.10 39.1 0.10 0.40
762.0 780.10 18.1 1.59 0.86
789.0 851.30 62.3 0.43 0.69
881.7 931.00 49.2 0.36 0.70
1,027.0 1,102.00 75.0 0.41 0.57
K-13-24C 1,284.00 532.9 594.00 62.5 0.33 0.51
825.0 1,053.00 228.0 0.96 0.72
1,064.5 1,107.60 43.1 0.37 0.41
K-13-25 1,256.00 928.8 1,022.10 93.3 0.27 0.54
1,029.3 1,171.00 141.7 0.27 0.69
K-13-25A 1,336.85 883.6 959.20 75.6 0.99 0.42
967.4 993.00 25.6 0.35 0.53
1,010.0 1,085.40 75.4 0.23 0.36
1,158.4 1,334.40 176.0 0.28 0.62
K-13-25B 1,191.30 878.8 938.80 60.0 0.36 0.60
880.9 1,106.80 225.9 0.25 0.45
K-13-25C 1,299.70 1,103.0 1,230.00 127.0 0.47 0.75
K-13-28 1,339.80 684.6 749.40 64.8 1.05 0.42
904.0 1,012.40 108.4 0.60 0.75
K-13-28A 1,407.40 886.4 1,043.40 157.0 0.56 0.50
1,217.4 1,285.40 68.0 0.24 0.56
table continues…

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 Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-13-28B 1,284.40 695.0 740.60 45.6 0.85 0.37
883.6 1,022.40 138.8 0.43 0.68
K-13-28C 894.40 728.3 756.10 27.8 0.84 0.55
889.3 892.90 3.5 0.72 3.04
K-13-29 992.50 223.4 257.00 33.5 0.08 0.50
455.9 486.30 30.4 0.44 1.02
572.4 810.40 238.0 0.55 0.89
K-13-30 771.00 326.0 645.60 319.6 0.33 0.53
K-13-31 1,113.40 250.7 378.80 128.0 0.24 0.69
421.9 670.40 248.5 0.39 0.77
817.4 975.40 158.0 0.37 0.61
K-13-31A 1,200.40 450.4 684.40 229.1 0.55 0.80
684.4 704.40 20.0 0.23 0.50
758.4 833.40 75.0 0.19 0.48
1,105.1 1,143.40 38.2 0.43 0.68
K-13-32 777.40 389.0 464.20 75.2 0.24 0.62
535.0 654.00 119.0 0.40 0.71
K-13-32A 672.40 215.6 279.00 63.4 0.55 0.42
449.0 616.00 167.0 0.37 0.63
K-13-34 1,188.40 498.0 1,136.50 636.7 0.43 0.85
K-13-35 1,023.40 449.8 775.30 325.4 0.30 0.70
K-13-36 906.40 406.0 795.75 389.7 0.43 0.69
Source: Seabridge

IRON CAP
Iron Cap was the first new target zone in 2013 to be evaluated for deep higher-grade
potential. Iron Cap had been explored since 1991 by previous owners, focusing on
surface showings and shallow drilling, they concluded it is the expression of a small
epithermal vein system. Ongoing exploration since 2010 by Seabridge determined that
the epithermal system was superimposed on the upper portion of a much larger gold-
copper porphyry deposit. With success at Kerr and a district-scale deposit theory, the
highest priority target for a second magmatic core discovery at KSM became Iron Cap.

During 2013, drill holes confirmed the existing resource model at Iron Cap, down to
about 200 m. Below that point, the holes entered volcanic and intrusive rocks as well as
chaotic breccia zones with variable intensity of veining and alteration. Discrete intervals
containing orthoclase and magnetite alteration, intense stockwork veining, and
concentrations of chalcopyrite with minor bornite characteristics of a core zone were
encountered. Significant 2013 Iron Cap drill hole assay results are summarized in Table
9.8.

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 Table 9.8 Select 2013 Iron Cap Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade

Hole ID (m) (m) (m) (m) (g/t) (%)
IC-13-048 1,011.3 187.5 199.3 11.7 0.47 0.24
243.3 267.3 24.0 0.42 0.34
346.5 839.8 493.3 0.30 0.30
IC-13-049 1,035.4 9.0 1,032.4 1,023.4 0.77 0.24
IC-13-050 431.5 64.7 110.4 45.7 0.13 0.26
122.6 202.8 80.2 0.25 0.26
216.0 230.0 14.0 0.70 0.31
286.0 324.9 38.9 1.27 0.36
396.9 425.4 28.5 0.38 0.24
IC-13-051 1,088.3 225.0 490.4 265.4 0.21 0.41
502.4 750.4 248.0 0.39 0.24
750.4 1,003.4 253.0 0.90 0.38
IC-13-051A 1,169.3 401.1 503.4 102.3 0.14 0.46
IC-13-052 1,070.6 363.4 506.4 141.9 0.41 0.48
558.4 598.4 40.0 0.66 0.41
Source: Seabridge

MCQUILLAN ZONE
The McQuillan Zone targets the down dip projection of surface alteration and
mineralization in the Sulphurets and McQuillan prospect areas. Alteration intensity
generally increases down hole at McQuillan and is characterized by a progression from
chlorite and sericite to potassium feldspar, biotite, and magnetite with localized
chalcopyrite. Modeling of previous drill holes and downhole geophysical surveys was
employed to refine the target.

CAMP ZONE
Four additional drill holes were completed in the Camp Zone in 2013. These holes were
designed to evaluate alternative orientations to the structural controls on this target area.
Results indicated that structures are oriented northwest-southeast and control the
distribution of argillic alteration and gold concentrations. Significant 2013 Camp Zone
drill hole assay results are summarized in Table 9.9.

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 Table 9.9 Select 2013 Camp Zone Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
C-13-14 402.0 7.8 402.0 394.1 0.84 0.05
C-13-15 533.7 180.0 207.0 27.0 0.82 0.01
241.0 276.0 35.0 0.93 0.01
369.0 378.0 9.0 0.79 0.02
C-13-16 444.0 47.0 48.0 1.0 18.10 0.12
95.0 112.0 17.0 0.96 0.02
156.0 186.0 30.0 2.06 0.03
377.0 392.0 14.9 0.93 0.01
C-13-17 441.0 82.8 118.6 35.8 0.73 0.02
278.0 321.0 43.0 1.36 0.04
333.0 344.9 11.9 0.74 0.02
404.0 414.0 10.0 0.76 0.01
Source: Seabridge

9.2.2 INTERPRETATION OF 2013 EXPLORATION DATA

KERR
Within Deep Kerr, several intervals of bornite-bearing (Cu5FeS4) rocks were intersected,
indicating higher-temperature ore forming processes were being encountered in the
drilling. As the drilling progressed, the Deep Kerr Zone became recognizable as:

 a wide continuous alteration zone characterized by anhydrite, potassium

feldspar, and magnetite as minerals
 abundant chalcopyrite and locally bornite, with an observable decrease in pyrite
content
 an increase in the abundance of quartz veins with copper minerals, both internal
to and at the margins of the veins.

IRON CAP
Evidence strongly suggests that the Iron Cap deposit sits above and is displaced to the
south-southeast of a near-magmatic high-grade core zone. Additional work was
undertaken during the winter season to refine the target, with the plan to aggressively
drill the Iron Cap core zone in 2014.

MCQUILLAN ZONE
The hole completed in 2013 shows a homogenous alteration pattern down hole,
indicating it could be oblique to the copper-gold target zone.

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 CAMP ZONE
Although results indicate potential to expand the Camp Zone, the target does not appear
to match the potential for discovery of additional deep core zones, and it was therefore
relegated to a lower priority.

9.3 2014 KSM EXPLORATION PROGRAM

The 2014 exploration program was designed to accomplish three goals. First, the initial
focus was to expand on the strike and dip potential of the Deep Kerr deposit. Drilling in
2013 did not define the limits of the Deep Kerr deposit. In an effort to identify those
limits, the program intended to step out to the north and at depth to define the scale of
the deposit.

Second, working off results in 2013, exploration drilling was expanded on the Lower Iron
Cap Zone to test continuity and extent of another potential core zone target. Historical
drilling on the Iron Cap deposit indicates plunge continuity to the northwest. Using the
understanding developed from Deep Kerr, a program was developed to extend the Iron
Cap deposit down plunge to the northwest where a core zone target was postulated.

The final goal for 2014 was to complete an appraisal of two additional core zone targets
(which subsequently became three). Integrating geophysical surveys across the Property
with the understanding from Deep Kerr, suggested additional untested higher-grade
target zones remained to be discovered. The aim in this program was to determine which
of these targets held the greatest potential for additional discoveries.

9.3.1 RESULTS OF 2014 EXPLORATION PROGRAM

DEEP KERR ZONE
Work on the Deep Kerr Zone in 2014 began by focusing on confirmation of the Mineral
Resource block model and then the extension of the deposit to the north and down dip.
Results from the 2014 drilling campaign are being integrated into the Mineral Resource
model, which will permit expansions of the 2013 Inferred Mineral Resource estimate.

Two holes (K-14-25D and 28C) were drilled into the existing resource to evaluate the
performance of the model by determining how well the new data matched up against the
model’s predicted block grades. In order to expedite this work, daughter holes were
completed from two widely-spaced parent drill holes that were started in 2013. In each
case the results showed mineralized intervals consistent with those predicted by the
model; there was little difference in the bulk grade of the mineralized interval, with
individual copper grades ranging from -12% to +30%.

The north strike projection of the Deep Kerr deposit was a primary target at the end of
2013. The northernmost drill holes in the 2013 program intersected well mineralized
intrusive rocks. Three additional sections were drilled in 2014 at 140 m intervals,
stepping north from the 2013 data. Mineralized zones consistent with the Deep Kerr
deposit model were encountered in the first two cross sectional step-outs (holes K-14-39,
43, 44 and 48), 280 m north of previous drilling. On the northern most section (holes K-

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 14-41 and 41A), a large interval of post mineral intrusive rock was intersected. The
projection of the high-grade Deep Kerr intervals was coincident with fault structures.

Three drill holes (K-14-34A, 40 and 45) were targeted to provide mineralogical zoning
indicators and extend the depth projection of the Deep Kerr Zone. Holes K-14-34A and
45 were set up to drill down the interpreted Deep Kerr Zone, and encountered long
sections of the mineralized zone; however, this orientation was difficult to maintain and
technical limitations terminated the holes before reaching the limits of the deposit.
These two holes therefore bottomed in mineralization. Hole K-14-40 was drilled
perpendicular to the zone.

In 2013, the south limit of the Deep Kerr deposit was provisionally established at the
southernmost drill hole (K-13-26) in the zone at that time. As the 2014 program
progressed, it became clear the southern boundary was arbitrary. Two drill holes were
completed to confirm a southern extension—one hole (K-14-42) at the southern limit of
the 2013 Mineral Resource model and one hole (K-14-46) 550 m beyond the 2013
model. Significant 2014 drill hole assay results are summarized in Table 9.10.

Table 9.10 Select 2014 Kerr Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-14-25D 1,515.4 910.4 1,011.4 101.0 0.29 0.37
1,025.3 1,133.4 108.1 0.21 0.35
1,300.8 1,486.4 185.6 0.18 0.47
K-14-28C 1,304.5 900.0 1,257.4 357.4 0.50 0.63
K-14-34A 1,611.4 450.0 806.4 356.4 0.19 0.62
871.4 1,608.4 736.5 0.36 0.59
K-14-39 1,272.4 508.0 694.4 186.4 0.19 0.43
781.4 945.4 164.0 0.34 0.33
945.4 1,197.4 252.0 0.55 0.69
K-14-40 1,011.4 704.4 926.3 221.9 0.24 0.45
K-14-41 1,080.0 636.2 682.3 46.1 2.35 0.19
821.4 965.5 144.1 0.58 0.27
K-14-41A 1,098.4 618.0 847.0 229.0 1.12 0.07
K-14-42 951.4 486.8 536.0 49.1 0.28 0.86
678.4 738.8 60.4 0.28 0.67
K-14-43 1,044.5 512.5 659.5 147.0 0.53 0.71
689.5 757.5 68.0 0.31 0.31
879.5 881.5 2.0 63.40 0.23
K-14-44 995.0 529.0 565.9 36.9 0.26 0.60
580.1 676.8 96.7 0.28 0.39
K-14-45 1,131.3 271.4 368.4 97.0 0.26 0.48
400.4 1,123.0 722.6 0.36 0.59
K-14-46 789.5 193.0 241.4 47.0 0.27 0.45
K-14-48 1,212.3 971.4 1,161.3 189.9 0.35 0.36
Source: Seabridge

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 IRON CAP LOWER ZONE
The Iron Cap Lower Zone is interpreted as a northwest plunging, northeast-southwest
striking tabular body below the existing reserves. Following the zone down plunge
intercepted higher-grade copper-gold consistent with a core zone. A total of 10,429 m in
10 drill holes tested this Lower Iron Cap target in 2014. Work is ongoing to estimate an
initial Mineral Resource for the Lower Iron Cap Zone.

The Lower Iron Cap Zone is a series of related, intermediate-composition intrusions, each
with extensive and intensive hydrothermal alteration including potassic, phyllic, and silicic
alteration, all of which contain copper, gold and silver. Drill holes that targeted the
southwestern strike projections of the target zone penetrated numerous intrusive events
with variable grade distribution enhanced in the contact zones between these intrusions.
The holes drilled along the northern strike projection encountered more consistent
intrusive rock with much less grade variability, like hole IC-14-59 with 592.7 m of
1.14 g/t gold and 0.37% copper. Hydrothermal alteration in these holes to the north
exhibit vertical continuity over 1,000 m tested so far, indicating significant potential at
depth, particularly down the apparent north-northwest plunge.

Drill hole IC-14-61 approaches to within 1,000 m of the proposed trace of the MTT
alignment, potentially making the Iron Cap Lower Zone an attractive early development
option with lower capital and operating costs than other deposits at KSM that are further
from key infrastructure. Significant 2014 Iron Cap drill hole assay results are
summarized in Table 9.11.

Table 9.11 Select 2014 Iron Cap Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
IC-14-53 1,329.4 488.4 1,002.4 514.0 0.68 0.30
IC-14-054 1,107.0 322.4 832.5 510.1 0.41 0.28
IC-14-054A 1,050.0 320.0 542.4 222.2 0.33 0.19
604.4 872.0 267.6 0.39 0.23
917.4 1,021.0 103.5 0.24 0.25
IC-14-055 624.3 4.2 140.5 136.3 0.33 0.19
193.6 253.2 58.6 0.37 0.29
257.5 624.3 366.8 0.59 0.17
IC-14-056 1,095.8 39.0 163.1 124.1 0.38 0.17
163.1 324.0 160.9 0.21 0.35
396.4 556.4 160.0 0.45 0.30
582.4 853.4 271.0 0.25 0.24
879.4 1,095.8 216.4 0.46 0.16
IC-14-057 927.4 186.0 459.4 273.4 0.46 0.15
459.4 589.4 130.0 0.31 0.35
table continues…

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 Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
IC-14-058 1,143.3 316.3 500.3 184.0 0.51 0.27
542.3 807.8 264.8 0.48 0.20
810.0 1,001.3 191.3 0.30 0.16
1,001.3 1,143.3 142.0 0.49 0.31
IC-14-059 1,032.0 1.6 145.0 143.4 0.45 0.37
178.7 771.4 592.7 1.14 0.37
773.4 1,032.0 258.6 0.39 0.17
IC-14-060 967.1 2.4 359.0 356.6 0.39 0.21
429.0 525.3 96.3 0.53 0.17
772.4 836.4 64.0 0.65 0.08
IC-14-061 1,152.4 27.0 55.0 28.0 0.16 0.43
431.4 794.4 362.5 0.38 0.28
876.2 1,152.4 276.2 0.46 0.31
Source: Seabridge

OTHER TARGETS
Three additional deep target concepts were drill tested during 2014. Initial results were
inconsistent. Along the east side of the Kerr deposit, drilling revealed a thick package of
thermally metamorphosed sedimentary rocks with numerous pyrite veins. This package
of rocks contains alteration and chemical characteristics interpreted to represent the
margin of the intrusive mineral system at Kerr. Drill holes collared to the northwest of the
Sulphurets deposit, designed to test for an intrusive source, encountered intensely
metamorphosed sedimentary and volcanic rocks with extensive fracture and vein
controlled phyllic and potassic alteration. Long intervals of highly anomalous gold
concentrations are reported in these drill holes, indicating proximity to the dip projection
of the Sulphurets deposit. The interval from 312.5 m to 526.9 m passed through the
Raewyn copper-gold zone of the Sulphurets deposit, with grades as expected. One drill
hole was also completed into the east side of the McQuillan target. These holes
encountered intrusive rocks similar to other mineralized intrusion at KSM; however, the
alteration style and intensity is indicative of a post- or inter-mineral rock. Select drill hole
assay results from 2014 drilling campaign are summarized in Table 9.12.

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 Table 9.12 Select 2014 Drill Hole Assay Results
Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-14-38 1,058.50 63.0 73.3 10.3 0.87 0.01
S-14-78 1,305.30 6.6 33.0 26.4 0.78 0.08
464.5 480.8 16.3 0.93 0.01
569.0 717.0 148.0 1.56 0.04
725.0 747.2 22.2 0.51 0.03
S-14-79 1,433.05 312.5 526.9 214.4 0.70 0.40
1,287.4 1,312.3 24.9 1.13 0.03
MQ-14-07 747.40 28.0 38.0 10.0 0.21 0.42
Source: Seabridge

9.3.2 INTERPRETATION OF 2014 EXPLORATION DATA

DEPP KERR ZONE
Results of the model evaluation drilling are within the acceptable ranges for an Inferred
Mineral Resource classification, and they are consistent with the expectation for a
predictive geological model. North limit testing was inconclusive. It is not known at this
time if the Deep Kerr mineralization continues farther north along faults and beyond the
post-mineral intrusion. Depth extension tests confirm that the Deep Kerr Zone plunges
west-northwest and continues to at least 1,350 m below surface. South limit testing
confirmed significant strike potential, but additional drilling is required to extend the
Mineral Resource model and establish the grade distribution.

IRON CAP LOWER ZONE

Continuity of the Iron Cap Zone to depth was confirmed. There is a higher grade central
zone, but it is has structural control and is confined to a roughly 150 m diameter column.
The potential for a bornite bearing core zone related to higher temperatures and
pressures deeper within the intrusive has not been ruled out.

OTHER TARGETS
These tests did not confirm any new significant zones. The intervals of anomalous gold
mineralization down dip of and beneath Sulphurets suggest possible continuity between
here and similar mineralization in the Camp Zone.

9.4 2015 KSM EXPLORATION PROGRAM

The exploration program plan at KSM for 2015 was designed to improve the
understanding of block cave targets and support engineering/environmental aspects of
development scenarios. The overall objective is to enhance project economics by finding
the best 2.3 Bt-the mineable material with the highest margins-which is the optimum
Mineral Resource size as determined by scoping studies. The objectives for 2015 were:

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  Drilling at Deep Kerr to expand both the length and width of block cave shapes
that confine the current Mineral Resource estimate; geological projections of the
mineralized zone indicate that the block cave shapes are limited by drill data.
Extending the footprint of the block cave shapes could increase the potential
mining rate for this higher grade material, thereby generating a significant
economic benefit to the Project. This work will evaluate the performance of the
Inferred Mineral Resource block model and permit projections of drilling
required to advance the Deep Kerr Zone to Mineral Reserves.
 Drilling the plunge projection of the Mitchell high-grade zone to test
development scenarios that include exploitation of a larger part of Mitchell as a
block cave mine; these holes will also provide additional information for the
Lower Mitchell block cave shape included in the 2012 PFS (Tetra Tech 2012).
 Complete the surface evaluation of sources for deleterious elements that may
impact infrastructure planning, and define additional potential quarry sites for
construction; a high-resolution airborne magnetic survey will also enhance the
sub-surface geological model and contribute to exploration targeting and
infrastructure area condemnation.

9.4.1 RESULTS OF 2015 EXPLORATION PROGRAM

DEPP KERR
The Kerr deposit is centered on a north-south trending, steep westerly-dipping, tabular
intrusive complex that drilling demonstrates has a horizontal extent of 2,400 m and
vertical extent of at least 2,200 m. The complex includes an east and west limb that may
coalesce near the current surface. The west limb is up to 500 m thick, and the east limb
up to 300 m thick. There are several distinct intrusive phases, the earliest of which are
fine grained diorites with 5% to 60% quartz-sulphide vein stockworks, and these appear
to contribute the majority of metals. Later phases envelope and sometimes invade the
earlier phase, and are characterized by coarser textures, less veining, and lower metal
contents. The intrusions are hosted by an Early Jurassic sequence of rhythmically
bedded siltstones, sandstones, conglomerates, and debris flows that have been altered
adjacent to the intrusions but generally contain marginal metal grades.

The holes in the 2015 Deep Kerr program were collared well outside the mineral deposit
in order to achieve the deep intersections that test the dip extension. Drill holes were
designed to intercept the mineralized target at right angles to the strike of the zone and
downhole directional drilling tools were used to steer the holes to target areas. These
locations better defined the western limits of the mineralized system, and demonstrate
that a north-south trending normal fault places unaltered fine-grained sedimentary rock
against the outer weakly mineralized parts of the mineral system. As the drill holes
advance to the east, alteration and mineralization increase as a series of potassically-
altered intrusions are encountered. Drill hole K-15-49 passed out of the intensely
altered and mineralized zone into younger intrusions with lower concentrations of gold
and copper. The drill hole was not extended into the eastern high-grade zone
encountered in previous shallower drilling because projected depths would have been
prohibitive. This eastern zone remains a high-potential target.

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 Holes K-15-49 and K-15-49A confirmed down-dip extension of the strong mineralization
in the west limb intersected by hole K-14-45, an oblique hole that cut 503 m grading
0.40 g/t gold and 0.67% copper. This mineralization occurs mainly in the PAND1 diorite,
the early mineralizing phase of the Kerr intrusive complex. It is finer grained, exhibits a
high-chalcopyrite to pyrite ratio, has remnants of secondary potassic alteration now
mostly overprinted by retrograde chloritic alteration, and a mostly intact stockwork of
quartz-sulphide veinlets. Portions of the PAND1 intrusion are overprinted by phyllic
alteration characterized by sericitization of mafic minerals, higher pyrite content, and
higher gold and copper grades. The later PAND2 diorite is coarser grained, with very few
intact quartz veinlets, and a lower metal content. Wall rock sediments are mineralized
adjacent to the intrusions, but generally lower grade. Currently, the lithology model
lumps moderately mineralized PAND2 dykes, breccias, and sediment intervals in the
hanging wall of the PAND1 body into the IBX domain; however, definition drilling is
expected to enable resolution of this into finer components. A few meter-scale, late
quartz-carbonate-sulphide veins with strong gold and elevated copper, lead, zinc, and
aresenic levels cut the intrusions and wall rocks, and indicate penetration of late
advanced argillic fluids along steep fractures.

Holes K-15-50 and K-15-50A tested the west limb 200 m on strike to the south of K-15-
49 and K-15-49A. Continuity of the mineralized PAND1 intrusion was confirmed,
however on this section gold and copper grades are lower. This is attributed to a higher
proportion of lower grade PAND2 intrusion, as well as weaker overprinting phyllic
alteration. Hole K-15-49B tested the west limb 200 m north of K-15-49, and lower
grades were also found to be due to a lower proportion of the PAND1 intrusion.
Significant drill hole assay results are summarized in Table 9.13.

Table 9.13 Select 2015 Kerr Drill Hole Assay Results

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
K-15-49 1,755.4 1,272.0 1,755.4 483.4 0.43 0.56
Incl. 1,466.4 1,716.4 250.0 0.49 0.70
K-15-49A 1,710.4 1,178.3 1,244.1 65.8 0.41 0.36
1,304.4 1,644.2 339.8 0.53 0.60
Incl. 1,358.2 1,555.0 196.8 0.69 0.72
K-15-49B 1,731.4 963.5 1,020.1 56.6 0.67 0.12
1,379.0 1,461.6 82.6 0.43 0.55
1,534.5 1,668.8 134.4 0.20 0.45
Incl. 1,574.0 1,627.2 53.2 0.31 0.56
K-15-50 1,764.4 1,430.4 1,764.4 334.0 0.41 0.30
Incl. 1,433.0 1,598.4 165.4 0.56 0.27
Incl. 1,659.4 1,713.8 54.4 0.29 0.41
K-15-50A 1,718.5 1,246.5 1,369.5 123.0 0.44 0.30
1,452.5 1,704.5 252.0 0.38 0.31
Incl. 1,559.3 1,620.5 61.2 0.63 0.42
Source: Seabridge

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 MITCHELL ZONE
In order to drill test the deep projection of the central zone and maintain orientations as
close as possible at right angles to the interpreted mineralization trend, the holes were
started well above and outside of the Mitchell deposit reserve. Directional drilling
techniques were used down the hole to steer the holes to the target areas. The first two
holes in the 2015 program confirmed continuity of mineralization in the panel above the
MTF, which hosts disseminated and veinlet chalcopyrite in magnetite skarn-style altered
sediments and volcanics, a distal component of the Mitchell porphyry system. Intersects
up to 192 m wide grading 0.34% copper and 0.14 g/t gold support revisions of models
that will enable conversion of waste to ore in Mitchell open pit scenarios that are planned
to precede underground block caving.

Below the MTF, where the Mitchell Mineral Reserves and Resources are located, the
holes encountered identical sections of altered intrusive rocks that are recognized as
host to parts of the Mitchell deposit. The intrusion is pervasively hydrothermally altered
and contains abundant stock work quartz veins. Alteration increases systematically
down hole, progressing through intense quartz-sericite-pyrite and into chlorite-magnetite-
orthoclase alteration. The intervals encountered in holes M-15-130 and 131 pass
through several phases of the Mitchell intrusive system, some of which contain gold and
copper grades above the Mitchell deposit average. Variable but mostly lower grades
were encountered in a brecciated zone with abundant anhydrite, similar to the “Bornite
Breccia” intersected several hundred meters higher, but without bornite. This was
intersected from 1,232.3 to 1,510 m in M-15-130, 1,357.5 to 1,453.4 m in M-15-131,
and 1,214.5 to 1,353.6 m in M-15-131A. The geometry is consistent with the
moderately northwest dipping orientation of the bornite breccia, however copper and gold
grades tend to be higher along the up-dip contact of the zone. This structure is
interpreted as a late feature that controlled flow of hydrothermal fluids with an advanced
argillic chemistry characteristic of the late stages of porphyry evolution. Bornite was
confined mostly to shallower portions of the structure where cooler conditions favoured
precipitation.

Hole M-15-131A intersected a distinct medium to coarse grained, sub-porphyritic

monzodiorite from 1,376.8 to 1,655 m with grades below the Mitchell average. This
intrusion is interpreted to be a later phase, with primary potassium-feldspar phenocrysts,
an alteration mineral assemblage dominated by secondary potassium-feldspar,
magnetite, epidote and traces of actinolite, and a poor development of stockwork quartz
veins and sulfides. This low-grade intrusion has been intersected in several other holes,
but over much narrower widths suggesting the thickness in this hole reflects a local
thickening or flexure and does not reflect the true volume of displaced higher grade.

All three holes confirmed the presence of a roughly 50 m thick, banded, mylonitic shear
zone referred to as the BSF that may offset the base of the Mitchell deposit. Prior to the
2015 drilling program, only one drill hole (M-08-962) intersected the BSF. The zone dips
to the northwest and appears to be oriented parallel with the MTF.

Table 9.14 summarizes the composited assay results for significant drill hole
intersections from Mitchell Zone drilling in 2015. In drill hole M-15-130, the MTF is

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 located at 601 m and in M-15-131 it is at 691 m. M-15-131A was wedged off of M-15-
131 at 622.6 m.

Table 9.14 Select 2015 Mitchell Composited Drill Hole Assays

Total Depth From To Thickness Au Grade Cu Grade
Hole ID (m) (m) (m) (m) (g/t) (%)
M-15-130 1,581.0 334.0 441.5 107.5 0.11 0.39
601.7 638.4 36.6 0.65 0.05
1,034.4 1,076.4 42.0 0.59 0.12
1,207.4 1,381.8 174.4 0.55 0.28
Incl. 1,217.4 1,296.3 78.9 0.73 0.40
M-15-131 1,674.0 253.0 444.5 191.5 0.14 0.34
1,190.5 1,357.5 167.0 0.81 0.25
Incl. 1,248.5 1,357.5 109.0 0.96 0.32
1,449.5 1,505.0 55.5 0.42 0.24
M-15-131A 1,760.5 1,043.5 1,303.5 260.0 0.53 0.18
Incl. 1,043.5 1,070.5 27.0 0.80 0.17
Incl. 1,108.5 1,214.5 106.0 0.66 0.18
Incl. 1,250.5 1,299.9 49.4 0.48 0.29
1,379.5 1,579.5 200.0 0.43 0.16
Incl. 1,433.5 1,503.5 70.0 0.51 0.19
Source: Seabridge

OTHER EXPLORATION
A high-resolution aeromagnetic survey was contracted to Precision Geosurveys Inc. East-
west oriented lines spaced at 100 m were flown to cover the majority of the Project area.
The objective was to provide guidance for geological interpretation of the sub-surface for
exploration modeling and targeting, as well as geological modeling under infrastructure
areas. This was supported by selective geological mapping.

9.4.2 INTERPRETATION OF 2015 EXPLORATION DATA

KERR ZONE
The holes drilled in 2015 confirmed a high degree of continuity of mineralization over
very considerable distances. The west leg was sufficiently drilled and extended down dip
to enable an expansion of Mineral Resources in the Inferred category, and this is
discussed in Section 14.0.

MITCHELL ZONE
Extension of the Mitchell deposit down dip by an additional 400 m was confirmed on two
sections, 200 m apart; however, insufficient drilling was completed to define significant
additional resources in this area. The system may be narrowing and grades slowly
diminishing, at least in the area tested. Displacement of portions of the deposit has
likely occurred along structures such as the bornite breccia and Basal Shear Zone.

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 OTHER EXPLORATION
An interim revision of the KSM Property geology map was completed and is shown in
Figure 9.1. Further geological mapping is planned for infrastructure areas in 2016.

Figure 9.1 KSM Property Geology Map

9.5 STATEMENT REGARDING NATURE OF INVESTIGATIONS

All of the exploration activities that were conducted at KSM between 2012 and 2015 as
described above were either directly carried out by Seabridge’s geology staff or directly
supervised by Seabridge personnel.

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10.0 DRILLING

10.1 INTRODUCTION
Drilling methods, procedures, extent of drilling, and relevant results for the Project have
been described in various NI 43-101 Technical Reports prepared by the Qualified Person
responsible for this section of this Technical Report (Lechner 2007; 2008a; 2008b;
2009; 2010; 2011; 2012; and 2014).

The majority of KSM drilling information stored in the end-of-year 2015 KSM database
was collected by Seabridge (83%). Seabridge has conducted annual drilling campaigns
at KSM beginning in 2006. The remaining 17% of the drilling data were collected by
Placer Dome (about 9%) and Falconbridge/Noranda (about 2%), with the remainder
collected by six other companies (6%). The 2005 Falconbridge drill campaign was
conducted as a joint venture with Seabridge. A summary of KSM drill hole data in the
end-of-year 2015 database, organized by company, is shown in Table 10.1. The majority
of the 647 core holes shown in Table 10.1 were used to estimate Mineral Resources
disclosed in this Technical Report, but some of the data tested several non-resource
targets in the KSM Property. The companies listed in Table 10.1 have been arranged in
approximate chronological order starting with Esso Minerals in the 1960s. Minor core
drilling was completed at KSM by several companies in the early 1980s, but ramped up
significantly in the late 1980s and early 1990s by Placer Dome. Seabridge
systematically added to the KSM drill hole data after their entry into the district in 2000,
with annual drill campaigns beginning in 2006.

Table 10.1 End-of-year 2015 KSM Drill Hole Summary

Core Holes Drilled Assayed Meters

Percentage
No. Drilled of Total
Company Holes Meters (%) Au Cu Ag Mo
Esso 20 3,536 1.4 3,331 2,286 1,408 1,363
Granduc 6 1,016 0.4 319 563 0 437
Brinco 3 190 0.1 182 40 182 0
Western Canadian 36 5,325 2.1 4,739 4,739 4,739 0
Newhawk 13 2,069 0.8 1,913 1,789 119 0
Sulphurets Gold 18 4,197 1.6 3,811 3,811 1,566 0
Placer Dome 105 21,982 8.6 20,930 20,930 1,337 0
Falconbridge 16 4,092 1.6 4,015 4,015 4,015 4,015
Seabridge 430 212,009 83.3 190,360 190,310 190,512 190,360
Grand Total 647 254,416 100.0 229,600 228,481 203,879 196,175

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 Seabridge contracted Boart Longyear to complete the initial 2006 core drilling program.
Since then, Hy-Tech Drilling Ltd. from Smithers BC has completed all of Seabridge's
Mineral Resource definition core drilling at KSM using their own manufactured Tech-
5000 Fly Rigs. Drilling was completed using either HQ or NQ tools. Helicopter support for
Seabridge's KSM exploration programs has been provided by Lakelse Air Ltd. from
Terrace, BC since 2007. This long standing relationship with local drilling and air support
contractors has allowed for a continually growing understanding about local drilling
conditions.

A description of drilling methods completed at KSM since the last Technical Report
(Lechner 2014) will be discussed in this section, along with various summaries of the
current drill hole data associated with each mineralized area.

10.2 2013 TO 2015 DRILLING CAMPAIGNS: TYPE AND EXTENT

Seabridge completed helicopter supported diamond drilling programs at the Project from
2013 through 2015. Hy-Tech Drilling Ltd. drilled all of the diamond core holes using
Tech-5000 Fly Rigs using NQ and HQ tools. The drilling operations were conducted from
the Sulphurets Creek camp which is located northwest of the Kerr deposit.

The 2013 program primarily focused on intersecting deep mineralization at the Kerr
deposit (29 holes) and the Iron Cap deposit (6 holes). Additional drilling was completed
at the Camp and McQuillan targets.

The 2014 program focused on exploring the down-dip extension of mineralization below
the Kerr Zone (16 holes) and Iron Cap Zone (10 holes). Additional drilling was completed
at the Sulphurets Zone (9 holes) and McQuillan Zone (2 holes).

In 2015, Seabridge drilled nine core holes totaling nearly 14,000 m. The majority of that
meterage was designed to extend the known limits of mineralization beneath the Kerr
deposit (6 holes). Three holes (about 5,000 m) were drilled to test the down-dip
projection of mineralization at the Mitchell deposit. Table 10.2 summarizes the core
drilling programs completed at KSM in 2014 and 2015. Table 10.3 summarizes the drill
hole database by Mineral Resource area and by company collecting data for Kerr,
Sulphurets, Mitchell, and Iron Cap. The data in Table 10.3 show that Seabridge has
collected 72%, 74%, 97%, and 93% of the drilled meterage for the Kerr, Sulphurets,
Mitchell, and Iron Cap deposits, respectively.

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 Table 10.2 2013 to 2015 KSM Drill Hole Summary
Assayed Meters
No. Drilled
Deposit Holes Meters Au Cu
2013 Program
Kerr 29 31,739 23,238 23,236
Iron Cap 6 5,806 5,382 5,382
2013 Subtotal 35 37,545 28,620 28,618
2014 Program
Kerr 16 18,027 15,518 15,518
Sulphurets 2 2,738 2,724 2,724
Iron Cap 10 10,429 10,045 10,045
McQuillan 1 747 743 743
2014 Subtotal 29 31,941 29,030 29,030
2015 Program
Kerr 6 8,741 6,201 6,201
Mitchell 3 5,016 4,349 4,349
2015 Subtotal 9 13,756 10,550 10,550
2013 to 2015 Total 73 83,243 68,200 68,198

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 Table 10.3 KSM Drill Hole Summary by Area and Company
Core Holes Drilled Assayed Meters
Percentage
No. Drilled of Total
Company Holes Meters (%) Au Cu Ag Mo
Kerr Deposit
Brinco 3 190 0 182 40 182 0
Western Canadian 36 5,325 6 4,739 4,739 4,739 0
Newhawk 2 115 0 110 110 110 0
Sulphurets Gold 18 4,197 4 3,811 3,811 1,566 0
Placer Dome 82 16,404 17 15,504 15,504 1,337 0
Seabridge 77 67,580 72 53,790 53,788 53,790 53,790
Kerr Deposit Total 218 93,811 100 78,136 77,992 61,725 53,790
Sulphurets Deposit
Esso 6 1,016 2 319 563 0 437
Brinco 14 2,275 5 2,100 1,509 177 705
Newhawk 7 1,306 3 1,157 1,036 6 0
Placer Dome 23 5,577 13 5,426 5,426 0 0
Falconbridge 4 984 2 965 965 965 965
Seabridge 87 31,996 74 31,208 31,206 31,208 31,208
Sulphurets Deposit Total 141 43,155 100 41,174 40,704 32,355 33,314
Mitchell Deposit
Esso 1 210 0 204 204 204 204
Newhawk 4 647 1 646 643 3 0
Falconbridge 4 1,197 2 1,180 1,180 1,180 1,180
Seabridge 182 65,502 97 59,870 59,823 60,022 59,870
Mitchell Deposit Total 191 67,556 100 61,900 61,850 61,409 61,254
Iron Cap Deposit
Esso 5 1,051 3 1,028 573 1,028 454
Falconbridge 5 1,247 4 1,229 1,229 1,229 1,229
Seabridge 59 32,677 93 31,680 31,680 31,680 31,680
Iron Cap Total 69 34,975 100 33,937 33,482 33,937 33,363

Figure 10.1 is a drill hole location map for the entire KSM district, showing pre-2013 and
post-2013 drill holes for the four recognized Mineral Resource areas. Detailed drill hole
location maps are presented in Figure 10.2 through Figure 10.5 for the Kerr, Sulphurets,
Mitchell, and Iron Cap deposits, respectively. Figure 10.2 to Figure 10.5 also show the
outline of conceptual resource pits and resource block cave that define the Mineral
Resources for the Project.

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 Figure 10.1 KSM Drill Hole Locations

Iron Cap

Mitchell

Sulphurets

KSM Project Area

Pre-2013 Drill hole
2013-2015 Drill hole
Kerr Conceptual
resource pit

Conceptual
resource cave
N
Scale (m)
0
1000

Figure 10.2 Drill Hole Locations – Kerr Deposit

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 Section 6,259,800 N.

Kerr Area
Pre-2013 Drill hole
2013-2015 Drill hole

Conceptual
resource pit

Conceptual
resource cave
N
Scale (m)

0 250

Drilling at the Kerr deposit has identified a mineralized area measuring roughly 1,800 m
north-south by 800 m east-west, and 2,000 m vertically. The drill hole spacing in the
upper open pit resource area is approximately 50 to 75 m. Drill hole spacing through the
block cave resource, which has been classified as nearly all Inferred material, ranges
between 100 to 200 m.

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 Figure 10.3 Drill Hole Locations – Sulphurets Deposit

Sulphurets Area

Pre-2013 Drill hole

2013-2015 Drill hole

Conceptual
resource pit
N
Scale (m)

0 250

Drilling at the Sulphurets deposit has identified a mineralized area measuring roughly
2,000 m northeast-southwest by 600 m northwest-southeast, and 500 m vertically. The
drill hole spacing in the open pit resource area ranges between 50 to 75 m.

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 Figure 10.4 Drill Hole Locations – Mitchell Deposit

Mitchell Area
Pre-2013 Drill hole
2013-2015 Drill hole

Conceptual
resource pit

Conceptual
resource cave
N
Scale (m)

0 250

Drilling at the Mitchell deposit has identified a mineralized area measuring roughly
1,600 m east-west by 1,000 m north-south, and 1,000 m vertically. The drill hole
spacing in the upper open pit resource area is approximately 75 to 100 m. Drill hole
spacing through the block cave resource, which has been classified predominantly as
Inferred material, ranges between 100 to 200 m.

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 Figure 10.5 Drill Hole Locations – Iron Cap Deposit

Iron Cap Area

Pre-2013 Drill hole
2013-2015 Drill hole

Conceptual
resource cave

Scale (m) N
0 250

Drilling at the Iron Cap deposit has identified a mineralized area measuring roughly
700 m northeast-southwest, by 600 m northwest-southeast, and 1,000 m vertically. The
drill hole spacing in the upper block cave resource shapes ranges between 70 to 75 m.
Drill hole spacing through the lower block cave resource, which has been classified
predominantly as Inferred material, ranges between 100 to 200 m.

10.3 DRILLING PROCEDURES: 2013 TO 2015 CAMPAIGNS

Hy-Tech Drilling Ltd. drilled all of the diamond core holes using Tech-5000 Fly Rigs
utilizing HQ, NQ, and AQ tools. Helicopter support was provided by Lakelse Air Ltd. using
Eurocopter A-Star machines. Similar to previous campaigns completed at KSM, the

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 drilling operations were conducted from the Sulphurets Creek camp, which is located
northwest of the Deep Kerr deposit.

Seabridge used directional drilling methods for a portion of their program. Tech
Directional Services Inc. from Ontario, Canada were contracted to provide directional
drilling services using DeviDrill equipment. DeviDrill is a steerable wireline core barrel
that allows a “daughter” hole to be wedged off of a “mother” hole and vectored towards a
target zone with reasonable accuracy. Small diameter core (AQ) was retrieved during the
crucial turn away from the mother hole so minimal data was lost. Bearing and inclination
data were collected using a miniature electronic single-shot survey tool (DeviTool
PeeWee) that is designed to pass through the DeviDrill bit. Information regarding this
drilling method can be found at http://www.techdirectional.com/. Drill holes with a letter
designation after the hole number represent wedged drill holes that utilized the
directional drilling method. Of the 29 drill holes completed in 2013, 15 were wedged off
from mother holes at depths ranging from 180 to 750 m. Total “saved” drilling was
7,907 m had every wedged hole been started from surface. Total metres drilled in
wedged holes was 10,598.

Drill core was placed into wooden core boxes by the drill contractor at the rig and
delivered twice daily by helicopter from the rigs to Seabridge's Sulphurets Creek camp.
An inventory of the core was completed by Seabridge geologists, which included a review
of core condition, a check of run block depths, and generation of a quick down-hole
lithologic log.

The drill core was typically scanned for various base metal quantities using a Niton hand
held x-ray fluorescence (XRF) analyzer prior to cleaning the core. Seabridge has
determined that a factor of 2.0 to 2.2 times the Niton copper reading closely
approximates the assayed copper content percentage. The Niton readings are primarily
used to alert/train the logging geologist about apparent mineralized intersections. That
data was written on the core with wax markers and are visible on core photos. Magnetic
susceptibility was also recorded for each drill hole using a hand held device. The mag
readings were exported out of the device as .csv files, but the data is not currently being
used.

After cleaning, the core was logged for lithology, alteration, structure, and oxidation state
onto paper logs by Seabridge geologists. That information was later entered into
Microsoft Excel® spreadsheets by each logger. Separate paper logs were used to capture
geotechnical information like core recovery, rock quality designation (RQD), and fracture
count. The geotechnical logs are based on data between core run blocks.

Assay samples were laid out by the logging geologist. Samples were primarily laid out in
2-m lengths, but were broken at distinct lithologic, alteration, or mineralization contacts.
Likewise, samples were broken at core diameter changes. The sample data were hand
recorded onto paper logs with hole name, from depth, to depth, and various sulpide
mineral estimates.

Pieces of drill core (14 to 20 cm long) were marked for bulk density determination about
every 100 m down-the-hole by the logging geologist by labeling the wooden core box with

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 “SG”. Those small pieces were not cut for assay sample. Periodically a contract
employee weighed the core pieces in air and water so that a bulk density could be
calculated.

Prior to sawing the drill core it was photographed. Two close-up photographs were taken
for each core box and the two photos were “stitched” together to create a detailed
photograph. After all logging procedures were complete the core boxes were moved to
the core cutting facilities located adjacent to the core logging tents.

10.4 SUMMARY AND INTERPRETATION OF 2013 TO 2015 DRILLING CAMPAIGNS

10.4.1 KERR DEPOSIT
Based on encouraging results from three drill holes completed in 2012, Seabridge
designed a drilling program for 2013 that concentrated on wide-spaced testing of the
down dip projection of mineralization below the previously outlined Kerr deposit.
Geophysical surveys showed a discrete high-amplitude, low-resistivity anomaly below the
surface exposure of the Kerr deposit. Part of this anomaly corresponded with the Deep
Kerr Zone and was interpreted to indicate abundant sulphide minerals in altered rocks
producing a resistivity contrast.

The first drill holes in 2013 immediately confirmed that there was a strong possibility of
having continuously mineralized material from the surface to a depth of more than
1,000 m. Assays from the 2013 drill holes showed significant mineralized intervals
containing total metal values per tonne that were approximately two times higher than
KSM’s Proven and Probable Mineral Reserve grade, with some intervals exceeding 1.0%
copper, and gold grades as high as 1.7 g/t.

The 2013 drilling concentrated on about 1,000 m of strike of the projected Deep Kerr
target. During the 2013 program, 29 diamond drill holes were attempted, 25 holes were
completed through the Deep Kerr target, 2 were lost due to significant hole deviation,
and 2 were terminated due to weather and made ready for re-entry. Of the 25 holes
completed, 23 encountered significant gold and copper grades over extensive widths.
The weighted average of the drill intercepts from the Deep Kerr Zone yields a grade of
0.46 g/t gold and 0.71% copper, over a width of 220 m.

Several intervals from the 2013 drilling program contained bornite-bearing (Cu5FeS4)
material indicating higher temperature ore forming processes were present. The 2013
drilling results demonstrated several characteristics about the Deep Kerr mineralization:

 a wide continuous alteration zone characterized by anhydrite, potassium

feldspar, and magnetite as minerals
 abundant chalcopyrite and locally bornite, with an observable decrease in pyrite
content
 an increase in the abundance of quartz veins with copper minerals both internal
to and at the margins of the veins.

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 The 2014 Kerr drilling campaign was designed to expand on the known strike and dip
extents of the Deep Kerr deposit by completing some step-out holes. Sixteen core holes
totaling approximately 18,000 m were completed (about 15,500 m of assayed core hole
data).

Depth extension tests associated with the 2014 drilling program confirmed that the Deep
Kerr Zone plunges west-northwest and continues to at least 1,350 m below the
topographic surface. South limit testing confirmed significant strike potential but
additional drilling would be required to expand the Mineral Resource.

The 2015 Deep Kerr drilling program was designed to improve the understanding of
potential block cave targets and to begin addressing various engineering and
environmental aspects associated with possible development scenarios. Six drill holes
were completed in 2015 in an effort to expand the recognized strike length and width of
mineralization that might be exploited by block cave mining methods.

After integrating results from the 2015 drilling program with all prior data, the following
observations have been made:

 The Kerr deposit is centered on a north-south trending, steep westerly dipping

tabular intrusive complex.
 Drilling has demonstrated that the mineralized system has horizontal and
vertical extents of 2,400 m and 2,200 m, respectively.
 Deep mineralization is characterized by two north-south west dipping limbs that
appear to coalesce near the surface. The west limb is about 500 m thick and
the east limb is about 300 m thick.
 There are several intrusive phases present, with the earliest phase being a fine
grained diorite with 5% to 60% quartz-sulphide vein stockworks. This intrusive
phase appears to contain the majority of metal. Later, coarser grained intrusive
phases envelope and sometimes invade the earlier phase.

10.4.2 SULPHURETS DEPOSIT

No holes were drilled into the Sulphurets deposit in 2013 or 2015. In 2014, two holes
were collared to the northwest of the Sulphurets deposit and were designed to test for an
intrusive source associated with mineralization, but instead encountered intensely
metamorphosed sedimentary and volcanic rocks with extensive fracture and vein
controlled phyllic and potassic alteration. Long intervals of highly-anomalous gold
concentrations were encountered in these drill holes that correspond to the dip
projection of the Sulphurets deposit. For example, an interval from about 312 to 527 m
in drill hole S-14-79 passed through the Raewyn copper-gold zone of the Sulphurets
deposit confirming previously sampled gold and copper grades.

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10.4.3 MITCHELL DEPOSIT
No holes were drilled into the Mitchell deposit in 2013 or 2014. Three core holes were
completed in 2015 totaling about 5,000 m. These holes were designed to test the
plunge projection of the Mitchell high-grade zone.

In order to drill test the deep projection of the central zone and maintain orientations as
close as possible at right angles to the interpreted mineralization trend, the holes were
started well above and outside of the 2012 Mitchell reserve volume. Directional drilling
techniques were used down-the-hole to steer the holes to the target areas. The first two
holes in the 2015 program confirmed continuity of mineralization in a panel above the
MTF that hosts disseminated and veinlet chalcopyrite in magnetite skarn-style altered
sediments and volcanics, which is believed to represent a distal component of the
Mitchell porphyry system. Drill hole intersections up to 192 m wide graded 0.34% copper
and 0.14 g/t gold.

Below the MTF, where the majority of the Mitchell Mineral Reserves and Resources are
located, the holes encountered identical sections of altered intrusive rocks that are
recognized as important host rocks for parts of the Mitchell deposit. The intrusion was
found to be pervasively hydrothermally altered and containing abundant stockwork
quartz veins. Alteration increased systematically down-hole, progressing through intense
quartz-sericite-pyrite and into chlorite-magnetite-orthoclase alteration. The intervals
encountered in holes M-15-130 and M-15-131 passed through several phases of the
Mitchell intrusive system, some of which contain gold and copper grades above the
Mitchell deposit average. Variable but mostly lower grades were encountered in a
brecciated zone with abundant anhydrite, similar to the “bornite breccia” intersected
several hundred meters higher in older drilling, but no bornite was intersected in the
2015 holes. The geometry of the breccia zone in the 2015 holes is consistent with the
northwest dipping orientation of the recognized bornite breccia; however, copper and
gold grades tend to be higher along the up-dip contact of the zone. This structure is
interpreted as a late feature that controlled flow of hydrothermal fluids with an advanced
argillic chemistry characteristic of the late stages of porphyry evolution. It is believed that
bornite was confined mostly to shallower portions of the structure where cooler
conditions favoured precipitation.

Hole M-15-131A intersected a distinct medium to coarse grained, sub-porphyritic

monzodiorite from 1,376.8 to 1,655.0 m, with grades below the Mitchell average. This
intrusion is interpreted to be a later phase, with primary potassium-feldspar phenocrysts,
an alteration mineral assemblage dominated by secondary potassium-feldspar,
magnetite, epidote and traces of actinolite, and a poor development of stockwork quartz
veins and sulphides. This low-grade intrusion has been intersected in several other
holes, but over much narrower widths suggesting the thickness in this hole reflects a
local thickening or flexure, and does not reflect the true volume of displaced higher
grade.

All three holes confirmed the presence of a roughly 50 m thick, banded, mylonitic shear
zone that may offset the base of the Mitchell deposit (BSF), seen previously only in hole
M-08-062. The zone dips to the northwest and appears to parallel the MTF.

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10.4.4 IRON CAP DEPOSIT
Early drilling at Iron Cap was focused on near surface mineralization and relatively
shallow drilling demonstrated the presence of a small epithermal vein system.
Exploration by Seabridge beginning in 2010 showed that the epithermal system appears
to be superimposed on the upper portion of a much larger gold-copper porphyry deposit.
With prior success at intersecting deep mineralization at Kerr a decision was made to
test for a deeper magmatic core beneath the currently recognized Iron Cap deposit.

During 2013 Seabridge drilled six core holes totaling about 5,800 m. These holes
confirmed the 2012 Iron Cap grade models to a depth of about 200 m. Below that
elevation, the 2013 drill holes intersected volcanic and intrusive rocks as well as chaotic
breccia zones with variable intensity of veining and alteration. Mineralization was
characterized by discrete intervals containing orthoclase and magnetite alteration,
intense stockwork veining and concentrations of chalcopyrite with minor bornite,
characteristic of a core zone. Evidence from the 2013 drilling program strongly
suggested that the Iron Cap deposit sits above and is displaced to the south-southeast of
a near magmatic high-grade core zone.

In 2014, ten core holes totaling about 10,429 m were completed at Iron Cap. The 2014
program was designed to test the continuity and extent of a potential northwest plunging
core zone located below the Iron Cap deposit (Iron Cap Lower Zone).

Based on drill hole results after the 2014 drilling program, the Iron Cap Lower Zone is
interpreted as a northwest plunging, northeast-southwest striking tabular body located
immediately below the existing reserves. Drill holes testing the down plunge extent of the
deposit intercepted higher copper and gold grades, which is consistent with a core zone.

The Lower Iron Cap Zone is characterized as a series of related, intermediate

composition intrusions, each with extensive and intensive hydrothermal alteration
including potassic, phyllic, and silicic alteration, all of which contain copper, gold and
silver. Drill holes that targeted the southwestern strike projections of the target zone
penetrated numerous intrusives, with variable grade distribution enhanced in the contact
zones between the various intrusions. Holes drilled along the northern strike projection
of the deposit encountered more consistent intrusive rock with much less grade
variability, like hole IC-14-59 with 592.7 m of 1.14 g/t gold and 0.37% copper.
Hydrothermal alteration in holes drilled along the northern portion of the deposit
demonstrated continuous hydrothermal alteration over a vertical extent of over 1,000 m.

Drill hole IC-14-61 approached to within 1,000 m of the proposed trace of the MTT
alignment, potentially making the Iron Cap Lower Zone an attractive early development
option with lower capital and operating costs than other deposits at KSM which are
further from key infrastructure.

10.5 QP COMMENTS REGARDING DRILLING AND SAMPLING FACTORS

Core recovery from the 2013 to 2015 KSM drilling campaigns was excellent, averaging
approximately 97%. RQD and core recovery were affected in some of the pre-2012

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 drilling in the upper portions of the Kerr deposit due to a rubble zone created by the
dissolution of anhydrite veinlets in various lithologic units. Core recovery in the 2013 to
2015 drilling at Kerr was excellent at depth within the modeled anhydrite veinlet
population where no dissolution has occurred.

No material drilling, sampling, or recovery issues were encountered for other deposits
within the KSM Property that were drill tested during the 2013 to 2015 campaigns.

In the opinion of the Qualified Person responsible for this section of this Technical
Report, there are no drilling or sampling factors that could materially impact the accuracy
and reliability of the assay results associated with the 2013 to 2015 KSM drilling.
Furthermore, the Qualified Person responsible for this section of this Technical Report
believes that the assays associated with the 2013 to 2015 drilling campaigns are
suitable to be used to estimate Mineral Resources.

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11.0 SAMPLE PREPARATION, ANALYSIS AND
SECURITY

11.1 INTRODUCTION
This section contains information that was disclosed in previous Technical Reports (pre-
2013 and 2012-2013 data), along with a discussion of methods, measures, and results
associated with the 2014-2015 drilling data. The discussions are organized into pre-
2012 data disclosed in the 2012 PFS (Tetra Tech 2012), 2012-2013 data disclosed in
the March 2014 Technical Report (Lechner 2014), and an update of methods,
procedures, and results associated with the 2014-2015 drilling campaigns.

11.2 PRE-2012 SAMPLE PREPARATION METHODS AND PROCEDURES

11.2.1 PRE-2012 STATEMENT ON SAMPLE PREPARATION PERSONNEL
Labourers contracted from Tahltan Native Development Corporation conducted all initial
sample preparation (sawing and bagging) and were trained by, and under the direct
supervision of, geologists employed by Seabridge. Drill core and quality control samples
were shipped to Eco Tech's preparation facility located in Stewart, BC, and then shipped
by Eco Tech to their assay laboratory located in Kamloops, BC, where the prepared
samples were analyzed.

11.2.2 PRE-2012 SAMPLE PREPARATION AND DISPATCH

Upon completion of logging and sample demarcation, the core boxes were moved to the
core cutting facilities in camp (usually the following day). The core cutting building is a
14 ft by 16 ft plywood platform covered with a poly tarp on aluminum poles. The walls
were left open to facilitate air circulation and prevent dust contamination. Three gasoline
engine powered saws with 14 inch diamond impregnated blades designed for rock
cutting were utilized (on day shifts only). The saws were mounted on secure wooden
stands at waist height. The saw blades were cooled, cleaned, and lubricated with fresh,
non-recirculated water during cutting. The saw operator placed uncut core boxes on
tables adjacent to the saws and cut each piece of core sequentially within each marked
sample interval. The assay half of the sample was placed in a heavy duty polythene bag
and the other half was returned to the core box. Once a sample interval was completely
sawn, the corresponding sample tag number was stapled to the inside at the top of the
bag and the bag was secured with staples. The sample number was also written on the
bag with a permanent felt tip marker.

The bags were placed sequentially in rows on pallets or on the floor. Upon completion of
a batch of 33, the samples were placed into large polyweave (rice) shipping bags, six per

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 bag (three for the larger HQ core). The polyweave bag was labelled with the project
number, sample numbers, shipment number, and laboratory address, and then secured
with plastic tie straps. In addition, for security purposes, the polyweave bag was secured
with a uniquely numbered tie strap, and the number was recorded on the retained copy
of the sample transmittal form. The other copy of the sample transmittal form was
placed in the last shipping bag of each batch. The bags were stored adjacent to the core
cutting building or helicopter pad until a complete shipment was ready, which usually
included several batches. During normal production and good weather, shipments were
sent out at least once every two days.

The sample shipment was placed inside the Project-chartered helicopter, flown directly to
the Granduc Road staging area, and unloaded by the pilot. At the staging area, the
shipment was either stored and locked inside a metal bulk shipping container or
transferred directly to a waiting truck. Trucking was contracted to Granmac Services Ltd.
(Granmac) of Stewart, BC. The shipment was transported by truck to Stewart, where Eco
Tech personnel unloaded the samples at the sample preparation facilities. The samples
were occasionally taken directly to Stewart via helicopter, and then transferred to the
preparation laboratory by truck contracted by Granmac. The preparation laboratory took
an inventory of the shipment and confirmed that the numbered tie strap had not been
broken or tampered with. Eco Tech then sent notification of the receipt of shipment with
tie strap and sample numbers to Seabridge personnel at camp, who confirmed the
sample shipment.

11.2.3 PRE-2012 ANALYTICAL PROCEDURES

At the Eco Tech facilities in Stewart, samples were sorted and dried (if necessary),
crushed through a jaw crusher and cone or roll crusher to –10 mesh, then split through a
Jones riffle until a –250 g sub-sample was achieved. The sub-sample was pulverized in a
ring and puck pulverizer so that 95% of the material passed a –140 mesh screen, then
rolled to homogenize. The resulting pulp sample was placed in a numbered paper
envelope and securely packed in cardboard boxes. These boxes were shipped via
Greyhound freight services to the Eco Tech facilities located in Kamloops, BC.

At the Eco Tech’s laboratory in Kamloops, a 30 g sample size was split out from the pulp
envelope and then fire assayed using appropriate fluxes. The resultant doré bead was
parted and then digested with aqua regia followed by an atomic absorption (AA) finish
using a Perkin Elmer AA instrument. The lower limit of detection for gold is 0.03 g/t or
0.001 oz/t. For other metals, a multi-element inductively coupled plasma (ICP) analysis
was completed. For this procedure, a 0.5 g sample was digested with 3 mL mixture of
hydrogen chloride, nitric acid, and water at a ratio of 3:1:2 that contained beryllium,
which acts as an internal standard, for 90 minutes in a water bath at 95°C. The sample
was then diluted with 10 mL of water and analyzed on a Jarrell Ash ICP unit. Eco Tech’s
ICP detection limits (lower and upper) are summarized in Table 11.1.

Assay results were then collated by computer and were printed along with accompanying
internal quality control data (repeats and standards). Results were printed on a laser
printer and were faxed and/or mailed to appropriate Seabridge personnel. Appropriate
standards and repeat samples were included on the data sheet.

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 Table 11.1 ICP Detection Limits – Pre-2012 Data
Element Lower Upper Element Lower Upper
Ag 0.2 ppm 100.0 ppm Mo 1 ppm 10,000 ppm
Al 0.01% 10.00% Na 0.01% 10.00%
As 5 ppm 10,000 ppm Ni 1 ppm 10,000 ppm
Ba 5 ppm 10,000 ppm P 10 ppm 10,000 ppm
Bi 5 ppm 10,000 ppm Pb 2 ppm 10,000 ppm
Ca 0.01% 10.00% Sb 5 ppm 10,000 ppm
Cd 1 ppm 10,000 ppm Sn 20 ppm 10,000 ppm
Co 1 ppm 10,000 ppm Sr 1 ppm 10,000 ppm
Cr 1 ppm 10,000 ppm Ti 0.01% 10.00%
Cu 1 ppm 10,000 ppm U 10 ppm 10,000 ppm
Fe 0.01% 10.00% V 1 ppm 10,000 ppm
La 10 ppm 10,000 ppm Y 1 ppm 10,000 ppm
Mg 0.01% 10.00% Zn 1 ppm 10,000 ppm
Mn 1 ppm 10,000 ppm

11.2.4 PRE-2012 QUALITY CONTROL MEASURES

Seabridge implemented the same quality control procedures that they used for their
previous KSM programs. Various standard reference material (SRM) sources have been
used since 2006, including blanks of material obtained from commercial landscaping
materials (crushed marble and granite) and "barren" river gravels collected near Stewart,
BC, along with different commercially certified standards of pre-packaged pulps. Assay
quality control measures included the insertion of a sample blank and pulp standard
within each laboratory batch of approximately 35 samples. Thus a complete batch
contained a minimum of one blank and one pulp standard, with the remainder being core
samples. The blank and pulp standard were numbered using the same number
sequence that was used for the core samples and inserted into each batch shipment
randomly by the geologist during the logging process.

Two different blanks were used in 2011. Blank 5 and 6 were purchased in 20 kg bags
from a home and garden retailer located in Terrace, BC. Blanks were submitted into the
2011 sample stream at a frequency of about one blank for every 32 samples.
Approximately 310 barren samples or "blanks" were submitted to Eco Tech. Figure 11.1
and Figure 11.2 chart the performance of the gold and copper blanks for the 2011
drilling campaign.

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 Figure 11.1 2011 Gold Blank Performance

Figure 11.2 2011 Copper Blank Performance

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 Five of the seven pulp standards that were used by Seabridge for their 2011
drilling/sampling campaign were purchased from CDN Resource Laboratories Ltd. (CDN
Resource) out of Delta, BC. The CDN Resource standards (CDN-CM-4, CDN-CM-11A, CGS-
19, CGS-22, and CGS-27) were prepared from material that was collected from various
granitic intrusives and gold-copper porphyry systems. Two standards (SEA-KSM and SEA-
CL2) were prepared from a bulk sample of core collected from the Mitchell Zone that had
been used for crushing tests and felsic material from a Seabridge project located in the
Northwest Territories. These last two standards were prepared and certified by Smee &
Associates Consulting Ltd. from North Vancouver.

A total of 302 SRMs were inserted into the 2011 sample stream, or a frequency of about
one SRM for every 33 samples or 3% of the total assay samples. Table 11.2 summarizes
the SRMs that were used by Seabridge for their 2011 drilling campaign. Table 11.2
shows the number of SRMs that were submitted, their expected values, along with ±2
standard deviation units.

The performance of the various gold, copper, and molybdenum standards are graphed as
a function of time (certificate number) in Figure 11.3 through Figure 11.18.

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Table 11.2 KSM Standard Reference Materials - Pre-2012 Data
Gold Values (g/t) Copper Values (%) Molybdenum Values (%)
Number
Standard Submitted Expected -2 Std Dev +2 Std Dev Expected -2 Std Dev +2 Std Dev Expected -2 Std Dev +2 Std Dev
CM-4 15 1.18 1.06 1.30 0.508 0.483 0.533 0.032 0.028 0.036
CM-11A 38 1.01 0.91 1.12 0.332 0.332 0.344 0.038 0.034 0.042
CGS-19 35 0.74 0.67 0.81 0.132 0.122 0.142 n/a n/a n/a
CGS-22 50 0.64 0.58 0.70 0.725 0.697 0.753 n/a n/a n/a
CGS-27 50 0.43 0.39 0.48 0.379 0.364 0.425 n/a n/a n/a
SEA-CL2 56 2.07 1.89 2.26 n/a n/a n/a n/a n/a n/a
SEA-KSM 58 0.77 0.71 0.84 0.204 0.194 0.214 0.007 0.006 0.008
Total 302 n/a n/a n/a n/a n/a n/a n/a n/a n/a
Note: Std Dev = standard deviation

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 Figure 11.3 2011 Gold Standard CM-4 Performance

Figure 11.4 2011 Copper Standard CM-4 Performance

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 Figure 11.5 2011 Molybdenum Standard CM-4 Performance

Figure 11.6 2011 Gold Standard CM-11A Performance

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 Figure 11.7 2011 Copper Standard CM-11A Performance

Figure 11.8 2011 Molybdenum Standard CM-11A Performance

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 Figure 11.9 2011 Gold Standard CGS-19 Performance

Figure 11.10 2011 Copper Standard CGS-19 Performance

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 Figure 11.11 2011 Gold Standard CGS-22 Performance

Figure 11.12 2011 Copper Standard CGS-22 Performance

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 Figure 11.13 2011 Gold Standard CGS-27 Performance

Figure 11.14 2011 Copper Standard CGS-27 Performance

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 Figure 11.15 2011 Gold Standard SEA-CL2 Performance

Figure 11.16 2011 Gold Standard SEA-KSM Performance

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 Figure 11.17 2011 Copper Standard SEA-KSM Performance

Figure 11.18 2011 Molybdenum Standard SEA-KSM Performance

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 In general, most of the SRM results track well within ±2 standard deviation units of the
expected value. One exception is low-grade molybdenum standards (Figure 11.8 and
Figure 11.18), which routinely came back lower than the expected value. This is
particularly evident in Figure 11.18. In RMI's opinion, the poor performance of the lower
grade molybdenum standards is not a material issue.

In addition to the insertion of control samples with each batch, Seabridge also submitted
duplicate core samples in every second batch by sawing one half of the drill core into two,
quarter core splits that were submitted as individual samples to Eco Tech. In 2011, 152
core duplicates, or about 1.5% of the total samples, were submitted to Eco Tech. Table
11.3 summarizes the basic descriptive statistic for the “original” and “duplicate” quarter
core samples for gold, silver, copper, and molybdenum.

Table 11.3 Summary of Pre-2012 Quarter Core Assay Results

Au (g/t) Cu (%) Ag (g/t) Mo (ppm)
Parameter Original Duplicate Original Duplicate Original Duplicate Original Duplicate
Count 152 152 152 152 152 152 152 152
Minimum 0.001 0.001 0.0004 0.0003 0.0 0.0 0.1 0.1
Maximum 3.230 3.510 1.0850 1.0450 18.3 18.6 3,160.0 3,500.0
Mean 0.453 0.431 0.1398 0.1408 1.8 1.8 47.6 47.2
Median 0.246 0.250 0.0890 0.0874 1.0 1.0 12.0 11.0
1st Quartile 0.111 0.098 0.0380 0.0394 0.6 0.5 4.0 4.0
3rd Quartile 0.662 0.608 0.1713 0.1872 2.2 2.2 27.5 29.0
Std Dev 0.538 0.531 0.1686 0.1674 2.5 2.4 257.4 283.3
CV 1.19 1.23 1.21 1.19 1.39 1.38 5.41 6.01
Mean Difference 5% -1% 0% 1%
Note: CV = coefficient of variation

As can be seen in Table 11.3, there is a relatively close comparison in the distribution of
original and duplicate quarter core grades. RMI notes that the duplicate gold sample
grades are about 5% higher than the original quarter core sample. The copper duplicate
is about 1% lower than the original. The quarter core original (x-axis) and duplicate (y-
axis) sample grades are compared as quantile-quantile (QQ) plots in Figure 11.19
through Figure 11.22 for gold, copper, silver, and molybdenum, respectively.

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 Figure 11.19 2011 Quarter Core Gold QQ Plot

Figure 11.20 2011 Quarter Core Copper QQ Plot

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 Figure 11.21 2011 Quarter Core Silver QQ Plot

Figure 11.22 2011 Quarter Core Molybdenum QQ Plot

About 6% of the 2011 samples (600 samples) that were prepared and assayed by Eco
Tech were re-assayed as same pulp “cross-checks” by ALS Chemex of North Vancouver,
BC . Table 11.4 summarizes basic descriptive statistics comparing ALS Chemex (ALS in
Table 11.4) and Eco Tech results by metal and analytical method. The data in Table 11.4
shows that the mean gold and copper grades as assayed by ALS Chemex were about 5%

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 lower than Eco Tech. QQ plots compare the same pulp gold, copper, silver, and
molybdenum results in Figure 11.23 and Figure 11.26, respectively.

Table 11.4 Summary of Pre-2012 Same Pulp Check Assay Results

ALS Eco Tech ALS ALS ICP ALS ICP Eco Tech
Parameter Au (g/t) Au (g/t) Ag (g/t) Ag (g/t) Ag (g/t) ICP Ag (g/t)
Count 597 597 597 597 597 597
Minimum 0.005 0.015 0.10 0.1 0.1 0.1
Maximum 4.070 3.950 34.2 35.3 35.3 33.6
Mean 0.486 0.513 1.7 1.8 1.8 1.7
Median 0.380 0.410 0.9 1.0 1.0 1.0
1st Quartile 0.140 0.170 0.4 0.5 0.5 0.4
3rd Quartile 0.660 0.680 2.4 2.4 2.4 2.4
Std Dev 0.482 0.469 2.6 2.7 2.7 2.5
CV 0.99 0.91 1.49 1.47 1.47 1.49
Mean Difference -5% -4% 8%

ALS ALS ICP ALS ICP Eco Tech ALS Eco Tech
Parameter Cu (%) Cu (%) Cu (ppm) ICP Cu (ppm) Cu (%) ICP Cu (%)
Count 595 593 593 597 595 597
Minimum 0.001 0.001 8 6 0.001 0.001
Maximum 1.920 0.984 9,840 19,600 1.920 1.960
Mean 0.161 0.153 1,532 1,609 0.161 0.161
Median 0.125 0.122 1,220 1,232 0.125 0.123
1st Quartile 0.043 0.042 424 422 0.043 0.042
3rd Quartile 0.216 0.216 2,160 2,134 0.216 0.213
Std Dev 0.176 0.150 1,502 1,795 0.176 0.179
CV 1.10 0.98 0.98 1.12 1.10 1.12
Mean Difference 5% -5% 0%

ALS ALS ICP ALS ICP Eco Tech

Parameter Mo (%) Mo (%) Mo (ppm) ICP Mo (ppm)
Count 596 597 597 597
Minimum 0.0005 0.0001 0.5 0.5
Maximum 0.1180 0.0923 923.0 1066.0
Mean 0.0043 0.0032 31.6 32.9
Median 0.0020 0.0013 13.0 14.0
1st Quartile 0.0010 0.0005 5.0 6.0
3rd Quartile 0.0050 0.0033 33.0 34.0
Std Dev 0.0071 0.0059 59.0 63.1
CV 1.65 1.87 1.87 1.92
Mean Difference 36% -4%

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 Figure 11.23 2011 Eco Tech vs. ALS Chemex Check Assays – Gold

Figure 11.24 2011 Eco Tech vs. ALS Chemex Check Assays – Copper

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 Figure 11.25 2011 Eco Tech vs. ALS Chemex Check Assays – Silver

Figure 11.26 2011 Eco Tech vs. ALS Chemex Check Assays – Molybdenum

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 Both Eco Tech and ALS Chemex employed the same assay measurement techniques for
gold. For other metals, the cross-checks compared Eco Tech ICP analyses with ALS
Chemex ore grade, atomic absorption spectrometry (AAS) finish analyses. Both methods
utilized a triple acid digestion. For finely disseminated, low-grade base metal
mineralization, similar to that which occurs at the Mitchell deposit, the ICP analyses are
generally considered to be as reliable (or more reliable than) ore grade, AAS finish
analyses.

11.2.5 PRE-2012 CORRECTIVE ACTION

During the course of the 2011 assaying program there were several blank and standard
reference failures. Most of these were associated with erroneous SRM labelling. The
Seabridge QA/QC program properly identified these common errors, and appropriate
corrective action was taken.

11.2.6 2012 SAMPLING PROGRAMS – QUALIFIED PERSON’S OPINION

In RMI’s opinion, the sampling methods/approach, security, sample preparation,
analytical procedures, and QA/QC protocols/results that were implemented for the 2012
PFS (Tetra Tech 2012) Resource were adequate, and the subsequent assays were
suitable to be used to estimate Mineral Resources.

11.3 2012-2013 SAMPLE PREPARATION METHODS AND PROCEDURES

This section is taken from the March 2014 Technical Report (Lechner, 2014) and
discusses the sampling methods, security, sample preparation, and quality control
measures associated with the 2012-2013 Deep Kerr drilling programs.

11.3.1 2012-2013 STATEMENT ON SAMPLE PREPARATION PERSONNEL

Labourers contracted form Northern Labour Force Corporation conducted all initial
sample preparation (sawing and bagging), and were trained by, and under the direct
supervision of, geologists employed by Seabridge. Drill core and quality control samples
were shipped to ALS Canada Ltd. (ALS) receiving facility located in Stewart BC. From
there, the samples were shipped to ALS's prep facility located in Terrace, BC either by a
commercial trucking firm or by ALS personnel. The prepped samples were then shipped
by ALS to their assay laboratory located in North Vancouver, BC for analysis.

11.3.2 2012-2013 SAMPLE PREPARATION AND DISPATCH

Drill core, placed in wooden core boxes by the drilling contractor, was loaded into metal
baskets and delivered twice daily by helicopter from each drill rig, to Seabridge's
Sulphurets Creek camp facilities. After the core was delivered to the core logging tents,
Seabridge geologists took an inventory of the core (a review of core condition, a check of
run block depths, and a quick down-hole lithologic log prepared). After the drill core was
completely logged—sample starting/ending points were laid out and a numbered sample
tag stapled to the box at the beginning of the sample run—the core was photographed.
Core boxes were then moved to the core cutting facilities located adjacent to the core

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 logging tents. Two Weatherhaven tents containing four saws with 14 inch diamond
impregnated blades designed for rock cutting were utilized for sawing the core
longitudinally. The saws were mounted on secure wooden stands at waist height. The
saw blades were cooled, cleaned, and lubricated with fresh, non-recirculated water
during cutting. The saw operator placed uncut core boxes on tables adjacent to the
saws, and cut each piece of core sequentially within each marked sample interval. The
assay half of the sample was placed in a heavy duty polythene bag along with the sample
number tag. The outside of the poly bags were marked with the sample number and then
stapled shut. The remaining half of the drill core was carefully put back into the wooden
core boxes as soon as cutting was complete.

The polythene sample bags were inventoried and then approximately three polythene
sample bags containing HQ diameter core (or six bags with NQ core) were placed into
large polyweave (rice) shipping bags. Approximately 30 rice bags were placed into
wooden crates (“totes”) for shipment. The totes were flown by helicopter to a landing pad
near km 54 on the Eskay Creek Mine Road located behind a locked gate. The totes were
then placed into a locked steel sea-going container that can hold approximately eight
totes. Once or twice a week, Granmac Services from Stewart, BC picked up the totes and
delivered them to an ALS receiving facility located in Stewart, BC where the samples were
logged into ALS's system. From Stewart, the samples were delivered by either ALS or
Banstra Transportation Systems, Ltd. to an ALS preparation laboratory located in Terrace,
BC.

11.3.3 2012-2013 ANALYTICAL PROCEDURES

ALS served as Seabridge's primary assay laboratory. ALS is a leading provider of
assaying and analytical testing services for mining and mineral exploration companies
and has no association or affiliation with Seabridge. All of ALS's locations are
International Organization for Standardization (ISO) 9001:2000 certified.

AcmeLabs served as a check assay laboratory for Seabridge. AcmeLabs is a leading

geochemical and assaying facility and has no association or affiliation with Seabridge. In
October 2011, AcmeLabs’ Vancouver, BC facility received ISO/International
Electrotechnical Commission (IEC) 17025:2005 accreditations from the Standards
Council of Canada.

At the ALS preparation facility located in Terrace, BC, samples were sorted and dried (if
necessary), crushed through a jaw crusher and cone or roll crusher to 70% –2 mm using
ALS protocol CRU-31. The crushed sample was then split using ALS protocol SPL-21
using a riffle splitter. A portion of the crushed sample was replaced into the polythene
bag (coarse reject) and stored temporarily at the ALS facility. A portion of the crushed
sample was then pulverized using ALS protocol PUL-31 using a ring and puck pulverizer,
until approximately a 250 g sub-sample (pulp) was achieved with 85% passing 75 µm or
better. The resulting pulp sample was placed in a numbered paper envelope and
securely packed in cardboard boxes. These boxes were shipped by ALS to their assay
facility located in North Vancouver, BC.

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 At the ALS analytical laboratory located in North Vancouver, a 30 g sample was split out
from the pulp envelope and then fire assayed using ALS protocol Au-AA23 using
appropriate fluxes. The resultant doré bead was parted and then digested with aqua
regia followed by an AA finish using an Agilent AA 240 Series instrument. The lower limit
of detection for gold is 0.005 g/t.

For other metals, a multi-element ICP-atomic emission spectroscopy (AES) analysis was
completed using ALS protocol ME-ICP41. For this procedure, an approximately 0.5 g
sample was digested with aqua regia in a graphite heating block. After cooling, the
resulting solution was diluted to 12.5 mL with de-ionized water, mixed and analyzed by
ICP-AES using an Agilent ICP 720/730-ES Series instrument. The analytical results were
corrected for inter-element spectral interferences. ALS's ME-ICP41 lower and upper
detection limits are summarized in Table 11.5 for the elements that Seabridge
requested.

Table 11.5 ICP Detection Limits – 2012-2013

Element Units Lower Upper Element Units Lower Upper
Ag ppm 0.2 100 Mo ppm 1 10,000
Al % 0.01 25 Na % 0.01 10
As ppm 2 10,000 Ni ppm 1 1,000
B ppm 10 10,000 P ppm 10 1,000
Ba ppm 10 10,000 Pb ppm 2 1,000
Be ppm 0.5 1,000 S % 0.01 10
Bi ppm 2 10,000 Sb ppm 2 1,000
Ca % 0.01 25 Sc ppm 1 1,000
Cd ppm 0.5 1,000 Se ppm 10 10,000
Co ppm 1 10,000 Sn ppm 10 10,000
Cr ppm 1 10,000 Sr ppm 1 1,000
Cu ppm 1 10,000 Th ppm 20 1,000
Fe % 0.01 50 Ti % 0.01 10
Ga ppm 10 10,000 U ppm 10 1,000
K % 0.01 10 V ppm 1 1,000
La ppm 10 10,000 W ppm 10 1,000
Mg % 0.01 25 Zn ppm 2 1,000
Mn ppm 5 50,000

During most of the 2012 and 2013 Deep Kerr drilling campaigns, ICP copper assays in
excess of 5,000 ppm (0.50%) were re-assayed using ALS's “ore grade” protocol ME-OG46
(Cu-OG46). Additionally, in 2013 most of the samples that returned values greater than
2,500 ppm copper (0.25%) were also done by method ME-OG46. The sample pulp was
digested in 75% hot aqua regia for 120 minutes. After cooling, the resulting solution was
diluted with de-ionized water, mixed and then analyzed by ICP-AES or AAS.

Gold was routinely assayed by ALS using their Au-AA23 protocol. All over limit gold assays
(i.e. greater than 10 ppm) where then Au-GRA21, which consisted of a conventional 30-g

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 fire assay with gravimetric finish. A prepared sample is fused with a mixture of lead
oxide, sodium carbonate, borax, silica and other reagents to produce a lead button. The
lead button containing precious metals is cupelled to remove the lead. The remaining
gold and silver bead is parted in dilute nitric acid, annealed and weighed as gold. Silver,
if requested can them be determined by the difference in weights.

ALS assay results were distributed to key Seabridge personnel via signed paper
certificates and also as digital .csv files. Likewise, check assay results were distributed
to Seabridge personnel in both hard copy and digital formats.

11.3.4 2012-2013 QUALITY CONTROL MEASURES

Seabridge implemented similar quality control procedures for their Deep Kerr drilling
program that have been in use for their previous KSM drilling campaigns. A total of
14,351 assays were submitted to ALS during the 2012-2013 Deep Kerr drilling
campaigns. The quality control measures that were used consisted of:

 the submission of barren or blank material at a frequency of one blank for about
every 33 samples
 the submission of one SRM for about every 33 samples
 the collection and submission of duplicate quarter core samples at a frequency
of one duplicate sample for about every 50 samples
 the submission of approximately 10% of the ALS pulps to AcmeLabs for check
assay purposes.

Table 11.6 shows the type and number of control samples that were submitted to either
ALS or AcmeLabs for the 2012-2013 Deep Kerr drilling campaign.

Table 11.6 Summary of Control Samples Submitted in 2012-2013

Type of Number Submission

Control Sample Submitted Frequency
Blanks 435 1 in 33
SRMs 432 1 in 33
Duplicates 281 1 in 51
Check Assays 1,500 10%

11.3.5 2012-2013 BLANK SAMPLE PERFORMANCE

Seabridge submitted two different barren or blank samples during their 2012-2013 Deep
Kerr drilling programs. They included commercial landscaping materials consisting of
crushed marble (Blank 5) and pea gravel (Blank 7). The blanks were submitted along
with the sawn drill core at a frequency of one blank for every 33 samples.

Figure 11.27 through Figure 11.30 compare the analyzed blank values for copper, gold,
silver, and molybdenum, respectively against various detection limit thresholds.

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 Figure 11.27 2012-2013 Blank Performance – Copper

Cu Result 10 x OG Detection 20 x OG Detection

10x ICP Detection 20 x ICP Detection
0.025
0.020
0.015
Cu (%)

0.010
0.005
0.000

Sample Number

Figure 11.28 2012-2013 Blank Performance – Gold

Au Result 10 x Detection 15 x Detection

0.100

0.080

0.060
Au (g/t)

0.040

0.020

0.000

Sample Number

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 Figure 11.29 2012-2013 Blank Performance – Silver

Ag Result 10 x Detection 15 x Detection

5.0

4.0

3.0
Ag (g/t)

2.0

1.0

0.0

Sample Number

Figure 11.30 2012-2013 Blank Performance – Molybdenum

Mo Result 10 x Detection 15 x Detection

0.0020

0.0016

0.0012
Mo (%)

0.0008

0.0004

0.0000

Sample Number

Ten and twenty times detection limit for copper are shown on the blank performance
graph (Figure 11.27) for both ICP and ALS’s “ore grade” assay protocols. The two blank
materials used by Seabridge appear to be somewhat “dirty” with respect to copper as
seen in Figure 11.27. Approximately 60% of the copper blanks returned values greater
than 10 times the ALS ICP detection limit of 1 ppm for copper and about 29% came back
20 times detection (2 ppm). Only three blank samples returned values greater than 10

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 times the detection limit (0.01% or 100 ppm) and none yielded values in excess of 20
times the “ore grade” analytical method.

The apparent poor performance of the copper blank material may be a result of several
factors including “dirty” blank material, potential contamination of crushing/pulverizing
equipment, or contamination of the ICP apparatus. Based on these results, the QP for
this report recommends that Seabridge obtain another source of barren or blank
material. The performance of the blank material for other metals appears to be well
within industry standards.

Most of the gold blanks came back below detection limits (0.005 g/t) although one blank
came back slightly above 10 times detection. All of the silver blanks came back well
below 10 times the detection limit. All of the molybdenum blanks came back well below
10 times the detection limit.

11.3.6 2012-2013 STANDARD REFERENCE SAMPLE PERFORMANCE

A total of 432 SRMs were submitted by Seabridge for their 2012-2013 Deep Kerr drilling
campaigns. All but two of these SRMs were purchased as certified standards from
commercial vendors. Two SRMs were prepared from Seabridge exploration/development
properties (SEA-CL2 from Courageous Lake and SEA-KSM from KSM). Those two SRMs
were certified by Smee & Associates and CDN Resource. Table 11.7 summarizes the
expected values and two standard deviations associated with the 432 SRMs that were
submitted in 2012-2013.

In general, the ALS SRM results for molybdenum were lower than the expected value.
This is attributed to the molybdenum not being completely liberated due to the aqua
regia digestion method used in their ICP analytical method. Silver SRM results generally
tended to be close to the expected value for all SRM's. Since molybdenum and silver
values are generally low for the Deep Kerr deposit, graphs for those SRMs are not
deemed to be material.

SRM performance graphs are shown for five SRMs (SEA-KSM, CM-25, CM-23, CM-14,
and CM-17) for copper and gold only. These five standards represent 70% of the
standards submitted and all have over 30 determinations. Figure 11.31 through Figure
11.40 show the performance for copper and gold for the five SRMs.

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Table 11.7 Summary of SRM Samples Submitted in 2012-2013
Expected Values 2 Standard Deviations
Standard Number
Name Source of Material Submitted Au (g/t) Cu (%) Mo (%) Ag (g/t) Pb (%) Au (g/t) Cu (%) Mo (%) Ag (g/t) Pb (%)
CGS-19 CDN Resource Laboratories Ltd. 1 0.740 0.132 - - - 0.070 0.010 - - -
CM-11A CDN Resource Laboratories Ltd. 7 1.014 0.332 0.038 - - 0.106 0.012 0.004 - -
CM-14 CDN Resource Laboratories Ltd. 39 0.792 1.058 0.042 - - 0.078 0.062 0.002 - -
CM-16 CDN Resource Laboratories Ltd. 11 0.294 0.184 0.016 - - 0.046 0.014 0.002 - -
CM-17 CDN Resource Laboratories Ltd. 34 1.370 0.791 0.075 14.400 - 0.130 0.040 0.008 1.400 -
CM-19 CDN Resource Laboratories Ltd. 21 2.110 2.020 0.106 - - 0.220 0.070 0.008 - -
CM-23 CDN Resource Laboratories Ltd. 61 0.549 0.472 0.025 - - 0.060 0.026 0.002 - -
CM-25 CDN Resource Laboratories Ltd. 66 0.228 0.191 0.019 - - 0.030 0.006 0.002 - -
CM-27 CDN Resource Laboratories Ltd. 24 0.636 0.592 0.051 - - 0.068 0.030 0.004 - -
CM-29 CDN Resource Laboratories Ltd. 29 0.720 0.734 0.053 - - 0.068 0.030 0.004 - -
CM-30 CDN Resource Laboratories Ltd. 32 1.300 0.730 0.070 15.900 0.273 0.120 0.034 0.004 1.300 0.014
SEA-CL2 Smee & Associates Consulting Ltd. 2 2.073 - - - - 0.188 - - - -
SEA-KSM CDN Resource Laboratories Ltd. 105 0.774 0.204 0.007 - - 0.062 0.010 0.001 - -

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 Figure 11.31 2012-2013 SEA-KSM SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.235
0.223
0.211
Cu (%)

0.199
0.187
0.175

Sample Number

Figure 11.32 2012-2013 CM-25 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.215
0.207
0.199
Cu (%)

0.191
0.183
0.175

Sample Number

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 Figure 11.33 2012-2013 CM-23 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.550
0.520
0.490
Cu (%)

0.460
0.430
0.400

Sample Number

Figure 11.34 2012-2013 CM-14 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
1.200
1.140
1.080
Cu (%)

1.020
0.960
0.900

Sample Number

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 Figure 11.35 2012-2013 CM-17 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.900
0.860
0.820
Cu (%)

0.780
0.740
0.700

Sample Number

Figure 11.36 2012-2013 SEA-KSM SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.900
0.840
Au (g/t)

0.780
0.720
0.660
0.600

Sample Number

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 Figure 11.37 CM-25 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.300
0.270
Au (g/t)

0.240
0.210
0.180
0.150

Sample Number

Figure 11.38 CM-23 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.700
0.640
Au (g/t)

0.580
0.520
0.460
0.400

Sample Number

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 Figure 11.39 CM-14 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
1.000
0.900
Au (g/t)

0.800
0.700
0.600
0.500

Sample Number

Figure 11.40 CM-17 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
1.750
1.600
Au (g/t)

1.450
1.300
1.150
1.000

Sample Number

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11.3.7 2012-2013 DUPLICATE SAMPLE PERFORMANCE
Seabridge collected a duplicate core sample at a frequency of about one duplicate for
every 51 regular samples. The procedure consisted of taking one half of the sawn core
and then sawing one of those halves into two pieces, each representing one quarter of
the original HQ or NQ core. One sample was submitted as an “original” and the other as
a “duplicate”. Table 11.8 shows basic descriptive statistics for the original and duplicate
core samples.

The mean grade of the original quarter core sample was lower than the duplicate quarter
core for gold, copper, and silver. The correlation coefficient was above 90% for all but
gold which was about 67%. QQ plots were generated for each the original-duplicate
samples for each metal to examine the distribution of grades for each population. Figure
11.41 through Figure 11.44 show QQ plots for copper, gold, silver, and molybdenum,
respectively.

Table 11.8 Summary of Duplicate Samples Submitted in 2012-2013

Gold (g/t) Copper (%) Silver (g/t) Molybdenum (%)
Parameter Original Duplicate Original Duplicate Original Duplicate Original Duplicate
Count 281 281 281 281 281 281 281 281
Minimum 0.003 0.003 0.000 0.000 0.1 0.0 0.0001 0.0001
Maximum 6.430 6.270 2.390 2.520 21.6 17.2 0.0190 0.0210
Mean 0.217 0.221 0.266 0.273 1.4 1.5 0.0018 0.0017
Std Dev 0.456 0.467 0.342 0.340 2.0 2.2 0.0029 0.0027
CV 2.100 2.109 1.286 1.247 1.5 1.5 1.6337 1.5740
1st Quartile 0.033 0.033 0.017 0.017 0.4 0.4 0.0001 0.0001
Median 0.109 0.110 0.128 0.141 0.9 0.9 0.0006 0.0008
3rd Quartile 0.247 0.243 0.387 0.415 1.6 1.6 0.0020 0.0020
Correlation Coefficient 0.668 0.988 0.917 0.944
Mean Grade Difference -1.92% -2.59% -6.56% 5.70%

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 Figure 11.41 2012-2013 Duplicate vs. Original Sample QQ Plot – Copper

2.0

1.6

1.2
Duplicate Cu (%)

0.8

0.4

0.0
0.0 0.4 0.8 1.2 1.6 2.0
Original Cu (%)

Figure 11.42 2012-2013 Duplicate vs. Original Sample QQ Plot – Gold

2.0

1.6

1.2
Duplicate Au (g/t)

0.8

0.4

0.0
0.0 0.4 0.8 1.2 1.6 2.0
Original Au (g/t)

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 Figure 11.43 2012-2013 Duplicate vs. Original Sample QQ Plot – Silver

15.0

Duplicate Ag (g/t) 12.0

9.0

6.0

3.0

0.0
0.0 3.0 6.0 9.0 12.0 15.0
Original Ag (g/t)

Figure 11.44 2012-2013 Duplicate vs. Original Sample QQ Plot – Molybdenum

0.020

0.016
Duplicate Mo (%)

0.012

0.008

0.004

0.000
0.000 0.004 0.008 0.012 0.016 0.020
Original Mo (%)

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11.3.8 2012-2013 CHECK ASSAY RESULTS
As a part of their QA/QC program Seabridge randomly submitted 10% of the ALS pulps
that were assayed for their 2012-2013 Deep Kerr drilling campaigns to AcmeLabs for
check assay purposes. Table 11.9 compares basic descriptive statistics for copper, gold,
silver, and molybdenum assays from the primary lab (ALS) and the check lab (AcmeLabs).
Figure 11.45 to Figure 11.48 show the QQ plots for copper, gold, silver, and
molybdenum, respectively.

Table 11.9 2012-2013 Check Assay Results - ALS vs. AcmeLabs

Gold (g/t) Copper (%) Silver (g/t) Molybdenum (ppm)
Parameter ALS Acme ALS Acme ALS Acme ALS Acme
Count 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Minimum 0.003 0.003 0.000 0.000 0.10 0.15 0.5 0.5
Maximum 11.500 11.000 8.390 7.672 80.00 79.00 370.0 390.0
Mean 0.225 0.225 0.291 0.279 1.59 1.64 17.6 18.8
Q1 0.040 0.041 0.018 0.018 0.40 0.50 1.0 2.0
Median 0.129 0.128 0.144 0.139 0.90 1.00 7.0 7.0
Q3 0.266 0.269 0.430 0.416 1.60 1.80 20.0 22.0
Standard Deviation 0.45 0.44 0.42 0.41 4.04 4.02 29.00 30.29
CV 2.01 1.96 1.44 1.45 2.54 2.45 1.65 1.61
Correlation Coefficient 0.993 0.998 0.994 0.968
Mean Grade Difference 0.02% 4.18% -3.05% -6.58%

Figure 11.45 2012-2013 Check Assay QQ Plot - Cu

2.0

1.6
Cu - Acme (%)

1.2

0.8

0.4

0.0
0.0 0.4 0.8 1.2 1.6 2.0
Cu - ALS (%)

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 Figure 11.46 2012-2013 Check Assay QQ Plot - Au

1.0

0.8

0.6
Au - Acme (g/t)

0.4

0.2

0.0
0.0 0.2 0.4 0.6 0.8 1.0
Au - ALS (g/t)

Figure 11.47 2012-2013 Check Assay QQ Plot - Ag

11.0

8.8
Ag - Acme (g/t)

6.6

4.4

2.2

0.0
0.0 2.2 4.4 6.6 8.8 11.0
Ag - ALS (g/t)

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 Figure 11.48 2012-2013 Check Assay QQ Plot - Mo

150

Mo- Acme (ppm) 120

90

60

30

0
0 30 60 90 120 150
Mo - ALS (ppm)

In general there is a very good correlation between ALS and AcmeLabs in assaying the
same pulp. The average gold assays were less than 1% of one another while copper and
silver showed more variance. Copper, as assayed by ALS, shows a slight high bias with
respect to AcmeLabs results above a 0.5% cut-off. Most of the ALS copper assays were
completed using ICP methods (ME-ICP41). Higher grade samples were re-assayed using
the ALS “ore grade” protocol ME-OG46. Both methods used varying concentrations of
aqua regia for digesting the sample. AcmeLabs also used 1:1:1 aqua regia for sample
digestion for their ICP protocol (1D01). However, AcmeLabs used a four acid digestion
for their “ore grade” copper protocol (8TD). The four acid digestion method should
liberate more copper metal than aqua regia, so intuitively the AcmeLabs copper values
should be higher than ALS, but that is not the case. Eight of the 13 commercial certified
standard reference materials utilized by Seabridge had two certified copper values for the
standard. One certified copper value was based on aqua regia digestion and the other
certified value was based on a four acid digestion. The eight standards with two certified
copper values were subjected to round robin assaying by various commercial labs. The
expected copper values for two of the standards based on the different digestion
methods yielded identical values. For two of the standards the four acid digestion gave a
slightly higher expected value and four cases the aqua regia digestion method gave a
slightly higher value. RMI recommends that Seabridge investigate these apparent
differences and perhaps adjust their copper assaying methods for the 2014 drilling
season.

11.3.9 2012-2013 CORRECTIVE ACTION

A total of 110 batches of samples were submitted to ALS over the course of the 2012
and 2013 drilling programs for Deep Kerr. Of these batches, initial results from the
laboratory returned 33 batches where one or more standards or blanks were deemed to

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 be out of compliance. For a standard, this meant that its result for either gold or copper
was more than three standard deviations from its expected value.

If a single standard was deemed outside of limits within a batch containing more than
two additional standards, where the remaining standards passed and there were no
mineralized intercepts within that batch, the entire batch was deemed to have passed.
This occurred in three batches. If a single standard or blank was deemed outside of
limits and the batch contained mineralized intervals, the control sample plus three to five
samples above and below the control sample in question were re-analyzed. In a case
where two consecutive standards in a batch failed, then 10 samples above and below
the two standards were re-run along with all of the samples between the standards.

When the results of the re-analysis were received from the lab the new values were
compared to the original values and to the expected values for the standards. If the
standard came back within tolerance and there was no bias noted in the surrounding
samples, the laboratory was requested to reissue the certificate with the revised values
for all samples. If there was any indication of bias in the results for the samples, then the
entire sequence was re-analyzed and a new certificate issued. If the standard and
associated samples returned similar values to the original run, then it was deemed that
the standard was out of tolerance but consistent and the batch passed. In those cases
the certificate that contained the lowest recorded value for the standard and the sample
results that went along with that result were considered final for the database. This
occurred five times out of the 110 batches.

There were several instances where blanks returned higher than expected values,
especially for copper. In those cases the samples were sent back to the lab for re-
analysis under similar conditions to the standards as described above, with the criteria
being that the blank was reporting more than 20 times minimum detection limit. In most
cases it was determined that there was minor residual cross contamination from the
previous high-grade samples (less than 0.002%). While in a few cases there was found
to be minor copper (less than 0.001%) in the blank material.

11.3.10 2012-2013 QUALIFIED PERSON'S OPINION

In the opinion of the QP responsible for this section of this Technical Report, sample
security, sample preparation, analytical procedures, and QA/QC protocols/results
associated with Seabridge's 2012-2013 Deep Kerr drilling campaigns were adequate
and consistent with standard industry practices. RMI also believes that the assays are
suitable to be used to estimate Mineral Resources.

11.4 2014-2015 SAMPLE PREPARATION METHODS AND PROCEDURES

This section summarizes topics regarding sample preparation methods and quality
control measures employed for the 2014-2015 KSM drilling campaigns.

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11.4.1 2014-2015 STATEMENT ON SAMPLE PREPARATION PERSONNEL
As in previous years, labourers contracted from Northern Labour Force Corporation
conducted all initial sample preparation (sawing and bagging) and were trained by and
under the direct supervision of geologists employed by Seabridge. Drill core and quality
control samples were shipped to Seabridge's secured warehouse located in Stewart, BC.
From there, the samples were shipped to the ALS preparation facility located in Terrace,
BC, either by a commercial trucking firm or by ALS personnel. The prepped samples were
then shipped by ALS to their assay laboratory located in North Vancouver, BC for analysis.

11.4.2 2014-2015 SAMPLE PREPARATION AND DISPATCH

The same sample preparation methods discussed in Section 11.3.2 (2012-2013) apply
to the 2014-2015 drilling campaigns. There were two minor exceptions to the dispatch
protocols. Instead of securing individual rice bags with a tamper proof seal, the wooden
tote boxes that were used to ship rice bags containing drill core samples were secured
with a seal. ALS Chemex shutdown their sample receiving facility in Stewart, BC prior to
the 2013 drilling campaign. After that date, Seabridge shipped samples to their secure
warehouse located in Stewart where samples were shipped to Chemex's sample
preparation facility located in Terrace, BC by either a commercial trucking company or
ALS Chemex personnel.

11.4.3 2014-2015 ANALYTICAL PROCEDURES

ALS Chemex and AcmeLabs remained Seabridge's primary and secondary labs for the
2014-2015 drilling campaigns. The information summarized in Section 11.3.3 for the
2012-2013 drilling data applies to the 2014-2015 campaigns.

11.4.4 2014-2015 QUALITY CONTROL MEASURES

Seabridge maintained the same quality control procedures for their 2014-2015 KSM
drilling campaigns that were described for the 2012-2013 campaigns (Section 11.3.4). A
total of 20,644 assays were submitted to ALS during the 2014-2015 KSM drilling
campaigns. The quality control measures that were used consisted of:

 the submission of barren or blank material at a frequency of one blank for about
every 32 samples
 the submission of one SRM for about every 33 samples
 the collection and submission of duplicate quarter core samples at a frequency
of one duplicate sample for about every 37 samples
 the submission of approximately 9% of the ALS pulps to AcmeLabs for check
assay purposes.

Table 11.10 shows the type and number of control samples that were submitted to either
ALS or AcmeLabs for the 2014-2015 KSM drilling campaigns.

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 Table 11.10 Summary of Control Samples Submitted in 2014-2015
Frequency
Type of Number of Control (Control sample
Control Sample Samples Submitted per regular sample)
Blank 638 1 in 32
Standard 634 1 in 33
Duplicate 552 1 in 37
Check Assay 2,104 1 in 10
Total Regular Samples 20,644 n/a

11.4.5 2014-2015 BLANK SAMPLE PERFORMANCE

Seabridge submitted three different barren or blank samples during their 2014-2015
KSM drilling programs. They included commercial landscaping materials consisting of
crushed marble (Blank 5), commercial landscape limestone (Blank 9), and crushed
diorite from a quarry located near Stewart, BC (Blank 10). Sixty percent of the blanks
submitted were from Blank 10, 35% from Blank 9, and 5% from Blank 5. The blanks
were submitted along with the sawn drill core at a frequency of one blank for every 30
samples.

Figure 11.49 and Figure 11.50 show the analyzed blank values for gold and copper,
respectively.

Figure 11.49 2014-2015 Blank Performance – Gold

0.025
Blank 10 Au Results
0.020

0.015
Au (g/t)

0.010

0.005

0.000

Sample Number

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 Figure 11.50 2014-2015 Blank Performance – Copper

50
Blank 10 Cu Results
40

30
Cu (ppm)

20

10

Sample Number

11.4.6 2014-2015 STANDARD REFERENCE SAMPLE PERFORMANCE

A total of 634 standard reference materials were submitted by Seabridge for their 2014-
2015 KSM drilling campaigns. All but one of these SRMs were purchased as certified
standards from commercial vendors. One SRM was prepared from Seabridge samples
collected from the Kerr-Sulphurets-Mitchell deposits (SEA-KSM) and was certified by
Smee & Associates and CDN Resource. Table 11.11 summarizes the expected values
and two standard deviations associated with the 634 SRMs that were submitted in 2014-
2015.

SRM performance graphs are shown for five SRMs (SEA-KSM, CM-27, CM-25, CM-23,
and CM-19) for copper and gold only. These five standards represent 70% of the
standards that were submitted and all have over 50 determinations. Figure 11.51
through Figure 11.59 show the performance for copper and gold for the five SRMs
mentioned above.

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Table 11.11 Summary of Control Samples Submitted in 2014-2015
Expected Values 2 Standard Deviations
Standard Number
Name Source of Material Submitted Au (g/t) Cu (%) Mo (%) Ag (g/t) Pb (%) Au (g/t) Cu (%) Mo (%) Ag (g/t) Pb (%)
CM-14 CDN Resource Laboratories Ltd. 6 0.792 1.058 0.042 - - 0.078 0.062 0.002 - -
CM-15 CDN Resource Laboratories Ltd. 3 1.253 1.280 0.054 - - 0.118 0.090 0.004 - -
CM-19 CDN Resource Laboratories Ltd. 60 2.110 2.020 0.106 - - 0.220 0.070 0.008 - -
CM-23 CDN Resource Laboratories Ltd. 59 0.549 0.472 0.025 - - 0.060 0.026 0.002 - -
CM-25 CDN Resource Laboratories Ltd. 61 0.228 0.191 0.019 - - 0.030 0.006 0.002 - -
CM-27 CDN Resource Laboratories Ltd. 60 0.636 0.592 0.051 - - 0.068 0.030 0.004 - -
CM-29 CDN Resource Laboratories Ltd. 43 0.720 0.734 0.053 - - 0.068 0.030 0.004 - -
CM-30 CDN Resource Laboratories Ltd. 51 1.300 0.730 0.070 15.900 0.273 0.120 0.034 0.004 1.300 0.014
CM-35 CDN Resource Laboratories Ltd. 49 0.324 0.248 0.029 2.700 - 0.032 0.012 0.002 0.400 -
CM-36 CDN Resource Laboratories Ltd. 37 3.160 0.227 - 2.000 - 0.034 0.012 - 0.200 -
SEA-KSM CDN Resource Laboratories Ltd. 205 0.774 0.204 0.007 - - 0.062 0.010 0.001 - -

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 Figure 11.51 2014-2015 SEA-KSM SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.235
0.223
0.211
Cu (%)

0.199
0.187
0.175

Sample Number

Figure 11.52 2014-2015 CM-27 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.650
0.620
0.590
Cu (%)

0.560
0.530
0.500

Sample Number

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 Figure 11.53 2014-2015 CM-25 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.215
0.207
0.199
Cu (%)

0.191
0.183
0.175

Sample Number

Figure 11.54 2014-2015 CM-23 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.550
0.520
0.490
Cu (%)

0.460
0.430
0.400

Sample Number

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 Figure 11.55 2014-2015 CM-19 SRM Performance – Copper

Cu Result Cu Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
2.250
2.150
2.050
Cu (%)

1.950
1.850
1.750

Sample Number

Figure 11.56 2014-2015 SEA-KSM SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.900
0.840
Au (g/t)

0.780
0.720
0.660
0.600

Sample Number

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 Figure 11.57 2014-2015 CM-27 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.850
0.770
Au (g/t)

0.690
0.610
0.530
0.450

Sample Number

Figure 11.58 2014-2015 CM-25 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.300
0.270
Au (g/t)

0.240
0.210
0.180
0.150

Sample Number

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 Figure 11.59 2014-2015 CM-23 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
0.700
0.640
Au (g/t)

0.580
0.520
0.460
0.400

Sample Number

Figure 11.60 2014-2015 CM-19 SRM Performance – Gold

Au Result Au Expected -2 Std Dev

+2 Std Dev -3 Std Dev +3 Std Dev
2.600
2.400
Au (g/t)

2.200
2.000
1.800
1.600

Sample Number

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11.4.7 2014-2015 DUPLICATE SAMPLE PERFORMANCE
Seabridge collected a duplicate core sample at a frequency of about one duplicate for
every 37 regular samples. The procedure consisted of taking one half of the sawn core
and then sawing one of those halves into two pieces, each representing one quarter of
the original HQ or NQ core. One sample was submitted as an “original” and the other as
a “duplicate”. Table 11.12 shows basic descriptive statistics for the original and
duplicate core samples.

Table 11.12 Summary of Duplicate Samples Submitted in 2014-2015

Gold (g/t) Copper (%) Silver (g/t) Molybdenum (ppm)
Parameter Original Duplicate Original Duplicate Original Duplicate Original Duplicate
Count 552 552 552 552 552 552 552 552
Minimum 0.003 0.003 0.000 0.000 0.1 0.1 0.5 0.5
Maximum 7.000 7.970 1.280 1.185 78.0 57.2 1400.0 1405.0
Mean 0.265 0.265 0.173 0.174 2.1 2.2 22.5 23.3
Std Dev 0.504 0.508 0.208 0.208 4.6 4.2 73.2 73.7
CV 1.905 1.918 1.201 1.199 2.2 1.9 3.3 3.2
1st Quartile 0.052 0.050 0.017 0.017 0.5 0.5 1.0 1.0
Median 0.133 0.140 0.092 0.091 1.0 1.1 6.0 7.0
3rd Quartile 0.309 0.298 0.238 0.242 2.0 2.2 19.3 20.0
Correlation Coefficient 0.907 0.986 0.972 0.966
Mean Grade Difference -0.05% -0.19% -0.69% -3.64%

The data in Table 11.12 show that mean grades of the original quarter core samples
were slightly lower than the duplicate quarter but they are remarkably close for gold,
copper, and silver. The correlation coefficient was above 90% for all metals. QQ plots
were generated for each of the original-duplicate samples showed that there was a close
comparison between the original and duplicate assay across the full grade ranges that
were sampled.

11.4.8 2014-2015 CHECK ASSAY RESULTS

As a part of their QA/QC program, Seabridge randomly submitted approximately 10% of
the ALS pulps that were assayed for their 2014-2015 KSM drilling campaigns to
AcmeLabs for check assay purposes. Table 11.13 compares basic descriptive statistics
for copper, gold, silver, and molybdenum assays from the primary lab (ALS) and the check
lab (AcmeLabs).

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 Table 11.13 2014-2015 Check Assay Results – ALS vs. AcmeLabs
Gold (g/t) Copper (%) Silver (g/t) Molybdenum (ppm)
Parameter ALS Acme ALS Acme ALS Acme ALS Acme
Count 2,104 2,104 2,104 2,104 2,104 2,104 2,104 2,104
Minimum 0.003 0.003 0.000 0.000 0.1 0.1 0.5 0.5
Maximum 14.100 20.900 2.850 2.824 78.0 77.0 2320.0 2400.0
Mean 0.311 0.319 0.182 0.181 2.4 2.5 24.7 25.3
Std Dev 0.780 0.853 0.246 0.249 5.3 5.2 109.0 115.8
CV 2.508 2.673 1.356 1.377 2.2 2.1 4.4 4.6
1st Quartile 0.057 0.061 0.015 0.014 0.5 0.6 1.0 1.0
Median 0.144 0.149 0.095 0.092 1.0 1.2 5.0 5.0
3rd Quartile 0.319 0.323 0.248 0.244 2.3 2.7 20.0 20.0
Correlation Coefficient 0.983 0.999 0.989 0.996
Mean Grade Difference -2.6% 0.3% -2.7% -2.6%

The data in Table 11.13 show that there is a very good correlation between the original
sample assays (ALS Chemex) and the check assay (AcmeLabs). QQ plots show that there
is a close comparison between the original and check assays across the full grade ranges
that were sampled as illustrated by Figure 11.61 and Figure 11.62, which show the
relationship between copper (Figure 11.61) and gold (Figure 11.62).

Figure 11.61 2014-2015 Check Assay QQ Plot – Copper

1.0

0.8
Cu Acme (%)

0.6

0.4

0.2

0.0
0.0 0.2 0.4 0.6 0.8 1.0
Cu ALS (%)

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 Figure 11.62 2014-2015 Check Assay QQ Plot – Gold

3.0

Au Acme (g/t) 2.4

1.8

1.2

0.6

0.0
0.0 0.6 1.2 1.8 2.4 3.0
Au ALS (g/t)

11.4.9 2014-2015 CORRECTIVE ACTION

A total of 264 batches of samples were submitted to ALS over the course of the 2014
and 2015 KSM drilling campaigns containing nearly 21,000 sawn core samples. Forty-
three of the 264 batches contained one or more standards or blanks that were deemed
to be out of compliance. Thirty-eight of the 47 control samples were resolved by re-
assaying. Five of the nine unresolved control sample failures were not deemed to be
material because the samples associated with the apparent failures represented non-
mineralized intervals.

For a standard, a failure designation was assigned to the control sample if either the
assayed gold or copper value was more than three standard deviations from its expected
value. If a single standard was deemed outside of limits within a batch containing more
than two additional standards, where the remaining standards passed and there were no
mineralized intercepts within that batch, the entire batch was deemed to have passed. If
a single standard or blank was deemed outside of limits, and the batch contained
mineralized intervals the control sample plus three to five samples above and below, the
control sample in question was re-analyzed. In a case where two consecutive standards
in a batch failed, then 10 samples above and below the two standards were re-run along
with all of the samples between the standards.

When the results of the re-analysis were received from the lab the new values were
compared to the original values and to the expected values for the standards. If the
standard came back within tolerance and there was no bias noted in the surrounding
samples the laboratory was requested to reissue the certificate with the revised values
for all samples. If there was any indication of bias in the results for the samples, then the
entire sequence was re-analyzed and a new certificate issued. If the standard and

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 associated samples returned similar values to the original run, then it was deemed that
the standard was out of tolerance but consistent and the batch passed. In those cases,
the certificate that contained the lowest recorded value for the standard, and the sample
results that went along with that result, were considered final for the database

11.4.10 2014-2015 QUALIFIED PERSON'S OPINION

In the opinion of the QP responsible for this section of this Technical Report, sample
security, sample preparation, analytical procedures, and QA/QC protocols/results
associated with Seabridge's 2014-2015 KSM drilling campaigns were adequate and
consistent with standard industry practices. The QP also believes that the assays are
suitable to be used to estimate Mineral Resources.

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12.0 DATA VERIFICATION

Previous NI 43-101 Technical Reports prepared by the QP responsible for this section
discussed various data verification measures that were undertaken for the Kerr,
Sulphurets, Mitchell, and Iron Cap mineralized zones. This section summarizes previous
(pre-2012 and 2012-2013) and current (2014-2015) data reviews that were completed
by the QP responsible for this section of this Technical Report. Most of the pre-2012 and
2012-2013 sections (12.1 and 12.2) were taken nearly verbatim from previously filed
Technical Reports.

12.1 PRE-2012 DATA VERIFICATION

12.1.1 ASSAY VERIFICATION
Prior to the 2011 drilling campaign, the QP responsible for this section of this Technical
Report personally compared assay certificates against the Seabridge drill hole assay
database. Approximately 7,500 assay records from 50 drill holes representing about
15,000 meters of drilling data were reviewed and discussed in prior Technical Reports
(Lechner 2007; Lechner 2008; Lechner 2009; and Lechner 2010). Minor errors
associated with the 2008 campaign were discovered and corrected by Seabridge.

The QP performed an audit of the 2011 KSM drill hole database by comparing Eco Tech’s
certified gold and copper assay results with values stored in Seabridge’s electronic
database. The QP manually checked gold, silver, copper, and molybdenum assays from
four of Seabridge’s 2011 drill holes for verification. The data that were verified are
summarized in Table 12.1 by drill hole and mineral zone. The data shown in Table 12.1
represent about 10% of the 2011 Seabridge assay data.

Table 12.1 Pre-2012 Database Verification

Number Metres Au Cu Ag Mo
Drill Hole Zone Checked Checked Errors Errors Errors Errors
K-11-11 Kerr 279 542 1 1 1 1
S-11-42 Sulphurets 192 376 0 0 0 0
S-11-60 Sulphurets 221 431 0 0 0 0
M-11-126 Mitchell 321 633 0 0 1 0
Total - 1,013 1,981 1 1 2 1

The QP notes that the errors which were discovered turned out to be over limit analyses
that were re-run and the electronic database was not updated. The five errors discovered
out of 4,051 analyses results in an error rate of about 0.1%, which is well within accepted
industry standards. Those errors were corrected in the drill hole database.

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12.1.2 DRILL HOLE LOGS
The QP responsible for this section completed numerous comparisons between drill hole
core and paper copies of drill hole logs (lithology, alteration, mineralization, etc.) during
site visits conducted in 2006 through 2011. Core recovery and RQD values were
randomly checked by the QP during those site visits. It is the QP's opinion that the pre-
2012 drill hole logging was completed in a professional manner and fairly represents the
geology of the KSM deposits.

12.1.3 DOWN-HOLE SURVEYS

The QP responsible for this section completed numerous comparisons between the
driller's handwritten down-hole survey records and the Seabridge electronic database.
Between the 2006 and 2011 drilling seasons very few discrepancies were discovered.
Those discrepancies were researched by Seabridge's geological staff and appropriate
corrections completed.

12.1.4 QUALITY ASSURANCE/QUALITY CONTROL

The QP was provided with QA/QC data for the pre-2012 drilling programs. This data was
analyzed with the results and conclusions presented in Section 11.0.

12.1.5 TOPOGRAPHIC DATA

In 2008, McElhanney of Vancouver, BC was contracted to perform an aerial survey, and
provide Seabridge with an updated accurate topographic base map of the three deposits
and surrounding area. McElhanney obtained the data by conducting a helicopter-borne
LiDAR survey. LiDAR is an optical remote sensing technology that measures properties of
scattered light to find range and other information of a distant target. McElhanney’s
system uses the Leica ALS50-II Airborne Laser Scanner; this scanner uses a Multiple
Pulse in Air (MPiA) system, which is a light-based measuring system that emits photons
by laser. LiDAR collects topographical data using laser range and return signal intensity
data recorded in-flight. The Leica ALS50 system can yield details under tree cover and
orthorectify imagery using specialized software. The product provided included gridded
bare earth data to 2 m spacing and contours at 1 m intervals in digital formats.

The new topographic map of the district was provided to Seabridge in the UTM NAD83
coordinate system, which is the standard system for all Government of BC and industry
mapping applications. Seabridge contracted Aero Geometrics of Vancouver to translate
the KSM drill hole collar locations from NAD27 to NAD83 datum. Aero Geometrics used
Sierra Systems Groups Inc. MAPS 3D software to perform the transformation of all collar
coordinates. MAPS 3D uses the Canadian National Transformation Versions 1.1 and 2.0
for the transformation.

RMI and Seabridge noted some discrepancies in the GPS surveyed collar locations and
the new LiDAR topographic surface. These differences are believed to be based on:

 the fact that no transform of the Z-coordinate was considered by the Canadian
National Transformation software

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  the inaccuracy of the initial GPS elevation
 the fact that many of the holes were surveyed immediately below the drill deck
and not ground level or "stick-up" differences magnified by steep terrain.

12.2 2012-2013 DATA VERIFICATION

Data from the 2012-2013 KSM drilling campaigns were verified by the QP responsible for
this section and discussed in the March 2014 Technical Report (Lechner 2014) and
summarized in Sections 12.2.1 through 12.2.4.

12.2.1 ASSAY VERIFICATION

The QP responsible for this Technical Report performed an audit of the 2012-2013 Deep
Kerr drill hole database by comparing ALS certified assay results with values stored in
Seabridge’s electronic database. The QP manually checked gold and copper assays from
five of Seabridge’s 2012-2013 drill holes for verification. The data that were verified are
summarized in Table 12.1 by drill hole. The data shown in Table 12.2 represent about
11% of the 2012-2013 Seabridge Deep Kerr assay data.

Table 12.2 2012-2013 Database Verification

Number Meters Au Cu Ag Mo
Drill Hole Checked Checked Errors Errors Errors Errors
K-12-19 150 292.77 0 0 0 0
K-13-23A 420 820.80 0 0 0 0
K-13-28 565 1,075.80 0 0 0 0
K-13-28C 182 342.60 0 0 0 0
K-13-32A 250 489.60 0 0 0 0
Total 1,567 3,021.57 0 0 0 0

The QP notes that no errors were discovered with the four grade items that were
checked. It is the QP’s opinion that the 2012-2013 Deep Kerr electronic assay database
is accurate and suitable to use for estimating Mineral Resources.

12.2.2 DRILL HOLE LOGS

During the QP's September 2013 site visit portions of five diamond core holes were
compared against Seabridge drill hole logs for holes K-13-23, K-13-23A, K-13-24, K-13-
25, and K-13-29. The QP found that the logs reasonably described lithology, alteration,
structural elements, and provided adequate descriptions of mineralized intervals.

The QP randomly selected fifteen core run intervals from three drill holes (K-12-23, K-13-
25, and K-13-29). Recovered core was measured and compared against the
geotechnical logs. No material differences were noted and those differences which were
noted were attributed to the QP measuring sawn core while the original recovered core
measurements was made from un-sawn core. It is the opinion of the QP that the

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 Seabridge core hole logs have been prepared in a professional manner and are suitable
for subsequent geological interpretation.

12.2.3 DOWN-HOLE SURVEYS

The QP compared down-hole survey records (hand written field recording cards
completed by the drill contractor) against the electronic database for three core holes (K-
13-23, K-13-23A, and K-13-29). No errors were noted, although three DeviTool PeeWee
survey records were recorded in the database with no paper backup record in the file. All
of the down-hole survey records were checked by the QP for suspect entries by
comparing adjacent records for abnormal azimuth and inclination deviations using a
software routine written by RMI. Seabridge had flagged fifteen records as being
suspicious and the QP's independent review likewise found them to be deviant. Those
records were removed from the database.

Several minor discrepancies were noted regarding the drill hole collar and first down-hole
survey azimuth for 11 drill holes. Those discrepancies were researched and corrected by
Seabridge and the QP.

12.2.4 QUALITY ASSURANCE/QUALITY CONTROL

The QP was provided with QA/QC data for the 2012-2013 drilling programs. These data
were analyzed with the results and conclusions presented in Section 11.0.

12.3 2014-2015 DATA VERIFICATION

The QP completed a review of various data associated with the 2014 and 2015 KSM
drilling campaigns. The data verification procedures and results undertaken are
summarized in Sections 12.3.1 through 12.3.4.

12.3.1 ASSAY VERIFICATION

The QP responsible for this section undertook a comprehensive review of the 2014 and
2015 drill hole assay database by completing a 100% check of the gold, copper, silver,
and molybdenum assays that were used to estimate mineral resources. The QP obtained
all of the ALS Chemex final assay reports that were provided to Seabridge (158 files).
These .csv files were appended together and used to verify the assay records stored in
Seabridge's electronic database. Forty-eight of the certificates represented reruns of
previously assayed lots. The assay values from the reruns were noted to have
successfully replaced values from the initial certificates. Table 12.3 summarizes key
criteria associated with the QP's complete check of the 2014-2015 database.

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 Table 12.3 2014-2015 Database Verification
Initial Certificates Re-run Certificates Total Assays Checked
No. of No. of No. of No. of No. of No. of No. of No. of
Year Holes Meters Certs. Assays Certs. Assays Certs. Assays
2014 26 25,563 85 11,142 25 3,309 110 14,451
2015 10 13,217 40 4,494 8 969 48 5,463
Total 36 38,780 125 15,636 33 4,278 158 19,914

The QP verified that nearly 20,000 gold, copper, silver, and molybdenum assays from the
2013-2014 Seabridge database matched certified assay records from their primary lab
(ALS Chemex).

12.3.2 DRILL HOLE LOGS

During the QP's September 2015 site visit, select intervals from three core holes totaling
about 1,100 m were compared against computerized drill logs (K-15-49, K-15-50, and M-
15-131). The QP found that the electronic drill hole logs fairly represent the lithology,
alteration, mineralization, and structural features observed in the core.

The QP performed core recovery checks for 25 intervals for each of the three core holes
that were examined. No discrepancies were noted by the QP.

12.3.3 DOWN-HOLE SURVEYS

The QP made a 100% check of the 2014 and available 2015 down-hole survey records
from the handwritten drillers logs and the electronic database. Several minor
discrepancies were discussed with Seabridge's geological staff and the correct values
were found to have been entered into the database.

12.3.4 QUALITY ASSURANCE/QUALITY CONTROL

The QP was provided with QA/QC data for the 2014-2015 drilling programs. This data
was analyzed and the results and conclusions are presented in Section 11.0.

12.4 QP'S OPINION

Based on the QP's review of the various vintages of data that were used to estimate
Mineral Resources for the KSM deposits, the drill hole assay, survey, and geologic data
were found to be professionally collected and are thought to be adequate for estimating
Mineral Resources.

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13.0 MINERAL PROCESSING AND
METALLURGICAL TESTING

13.1 METALLURGICAL TEST WORK REVIEW

The Project includes four major mineralized zones, identified as the Mitchell, Kerr,
Sulphurets, and Iron Cap deposits. The deposits contain gold, copper, silver, and
molybdenum mineralization.

Several metallurgical test programs have been carried out to assess the metallurgical
response of the mineral materials from the various deposits. The latest test programs
were performed from 2007 through 2016, including an ongoing test program. The
metallurgical testing programs, including historical testing programs, are listed in Table
13.1. The following sections summarize the testwork.

Table 13.1 Metallurgical Test Work Programs

Flotation/
Cyanide
Year Program ID Laboratory Mineralogy Leach Grindability Others
2016 KM5063 ALS Metallurgy   
(ongoing
testwork)
2016 SSW30216SD Surface Science Western 
2015 KM4514 ALS Metallurgy    
2015 KM4672 ALS Metallurgy    
2014 KM4029 ALS Metallurgy    
2013 KM3735 ALS Metallurgy  
2012 KM3174 G&T  
2012 KM3080 G&T  
2011 KM3081 G&T
2011 KM 2897 G&T 
2011 SSW47110 Surface Science Western 
2010/2011 KM 2748 G&T    
2010 KM 2755 G&T   
2010 KM 2670 G&T  
2009/2010 KM 2535 G&T  
2009/2010 - SGS Mineral Services   
2009/2010 - Köeppern – UBC 
2009 KM 2344 G&T    
table continues…

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 Flotation/
Cyanide
Year Program ID Laboratory Mineralogy Leach Grindability Others
2009 - Pocock 
2008 KM 2153 G&T    
2008 - Hazen 
2007 KM 1909 G&T    
Placer Dome Research
1991 -   
Centre
Placer Dome Research
1990 -    
Centre
Brenda Mines Ltd.
1989 -  
Metallurgical Laboratory
1989 - Coastech Research Inc. 
Notes: The KM3174, KM3080, and KM3081 test work reports are available in Appendix D2 of the 2012 PFS
(Tetra Tech 2012).
The remaining test work reports are included in Appendix E of the KSM PFS Update 2011
(Wardrop 2011).

13.1.1 HISTORICAL TEST WORK – PRIOR TO 2007

Tetra Tech received several historical test work reports from Seabridge. The historical
test work included preliminary investigations into mineralogy, grindability, and
metallurgical responses to flotation. Most of this early test work was conducted on
samples from the Kerr Zone.

HISTORICAL TEST SAMPLES

Coastech Research Inc. – 1989
Two samples from the Kerr mineralized zone were tested in the program: one
representing the central high grade copper zone (High Grade) and another representing
the remainder of the Kerr Zone (Low Grade). The assay data are shown in Table 13.2.

Table 13.2 Test Samples – Coastech, 1989

Au Ag Cu
Sample (g/t) (g/t) (%)
Low Grade
Assay 0.55 - 0.68
High Grade
Assay 0.44 2.74 1.05

Brenda Mines Ltd. Metallurgical Laboratory – 1989

Sample 106 was tested in this program, along with a sample from Brenda Mines. No
sample description was included in the provided report.

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 Placer Dome Research Centre – 1990
Four new Kerr Zone composites, labelled Composites K-1 to K-4, were prepared from
560 individual samples of crushed drill core rejects, weighing a total of 2.3 t.

Two additional Kerr composites, received from the previous Coastech 1989 program,
were also included in the test program. These two composites were labelled as LG-01 for
low grade and HG-01 for high grade samples, respectively.

Table 13.3 Test Samples – Placer Dome, 1990

Au Ag Cu
Composite (g/t) (g/t) (%)
K-1 0.26 1.0 0.52
K-2 0.32 1.1 0.59
K-3 0.29 0.9 0.40
K-4 0.44 3.0 1.30
LG-01 0.39 2.2 0.71
HG-01 0.36 2.3 1.03

Placer Dome Research Centre – 1991

Bulk samples from Kerr Zone, identified as Rubble Zone Trench and Crackle Breccia
Zone Trench, were used in the 1991 testing program. Exploration personnel from Placer
Dome collected the bulk samples. The average gold, silver, and copper values are shown
in Table 13.4.

Table 13.4 Test Samples – Placer Dome, 1991

Au Ag Cu
Bulk Sample (g/t) (g/t) (%)
Rubble Zone Composite 1.21 2.57 0.78
Crackle Breccia 0.34 1.58 0.40

HISTORICAL MINERAL SAMPLE CHARACTERISTICS

Mineralogy
In 1990, Placer Dome examined mineralogical characteristics on the K-1 to K-4
composites and the results are summarized in Table 13.5.

Table 13.5 Mineralogical Characteristics – Placer Dome, 1990

Composite Description
K-1 Sericite/chlorite and silicified tuffaceous rocks
K-2 Rubble Zone - quartz/sericite/felsic/volcaniclastic sequence
K-3 Sericite volcaniclastic sequence complete with stockwork and veining
K-4 Quartz-sulphide veins and lenses - high grade

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 The examination also showed that the iron and sulphur contents of the four samples
varied in a narrow range, from 6.7 to 7.2% for iron and 5.7 to 8% for sulphur,
respectively.

Grindability
In 1989, using a comparative method, Brenda Mines determined the work index (Wi) of
Sample 106 to be 13.52 kWh/t.

In 1990, Placer Dome determined comparative ball mill work indices on Composites K-1
to K-4 and Composites LG-01 and HG-01. The comparative work index (CWi) increased
with finer grinding. The resulting work indices ranged from 7.4 kWh/t at a coarse product
of 80% passing 205 µm (Composite K-4) to 12.8 kWh/t at a fine product particle size of
80% passing 45 µm (Composite K-3).

Similar grindability tests were conducted on the 1991 samples by Placer Dome. The
comparative grinding work index of the Rubble Zone composite was similar to the data
obtained from the 1990s samples. However, the comparative grinding index from the
Crackle Breccia composite was much lower, ranging from 6.4 to 8.0 kWh/t, indicating a
softer material.

Specific Gravity
The results of bulk and dry SG measurements conducted by Placer Dome in 1990 and
1991 on the Kerr samples are summarized in Table 13.6. The average SG and the bulk
SG are 2.89 and 2.82, respectively.

Table 13.6 SG Determination Results

Sample SG Bulk SG
K-1 2.94 -
K-2 2.90 -
K-3 2.96 -
K-4 2.90 -
HG-01 2.92 -
LG-01 2.88 -
Rubble Zone 2.83 3.00
Crackle Breccia 2.82 2.63
Average 2.89 2.82

HISTORICAL FLOTATION
Brenda Mines Metallurgical Laboratory – 1989
The test program studied the responses of Kerr Sample 106 to conventional copper and
gold flotation. Open circuit cleaning tests failed to produce a marketable grade copper
concentrate due to the coarse primary grind.

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 The test work showed that high copper and gold recoveries could be obtained using a
primary grind size of 75% passing 200 mesh. However, to obtain the required
concentrate grade, it was necessary to depress iron sulphides. Depression of the iron
sulphides with sodium cyanide (NaCN) and pH control was shown to be possible;
however, iron depression was very sensitive to the dosage of sodium cyanide. Small
amounts of sodium cyanide improved rougher concentrate grades and avoided precious
metal losses in subsequent cleaning steps. The test results suggested the use of a
selective xanthate collector for copper recovery and a dithiophosphate collector for gold
recovery.

Placer Dome Research Centre – 1990

Primary open circuit roughing and cleaning tests were conducted on six Kerr composite
samples. The test work included the evaluation of primary grind size in the range of 80%
passing 175 µm to 80% passing 35 µm. Rougher/scavenger flotation copper recoveries
ranged from 89 to 96%, gold recoveries from 67 to 94%, and silver recoveries from 81 to
95%. High rougher copper and precious metal recoveries were achieved from all six
composites with the highest metal recoveries obtained at the finer primary grinds.

In the tests, lime and sodium cyanide were added to depress iron sulphides. Sodium
ethyl xanthate (R325) and Aerofloat 208 were added as copper and gold collectors.
Methyl isobutyl carbinol (MIBC) was added as frother. Rougher flotation was performed
at pH 10.5.

The rougher concentrate was reground and the slurry pH was adjusted to 11 with lime.
The rougher concentrate was upgraded using three stages of open circuit cleaning.
Saleable copper concentrates were produced from four of the six composites tested.
Approximately half of the gold and silver reported to the final copper concentrate.

The samples showed differing metallurgical upgrading responses to the test conditions.
Although regrinding and cleaning of the rougher concentrate at pH 11 rejected a
significant amount of pyrite, composites K-1 and K-2 produced inferior results. The
report indicated that the poorer response was possibly due to the presence of sericite
and mica slimes. It was recommended that sodium silicate or glue be added to the
rougher flotation to suppress these minerals.

Placer Dome Research Centre – 1991

The test program confirmed the recoveries achieved in the earlier flotation tests
conducted in 1990. High final copper concentrate grades were produced from the two
new Kerr composite samples tested.

Four grind and flotation tests were performed on each of the two samples. The test
results are summarized in Table 13.7.

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 Table 13.7 Flotation Test Results – Placer Dome, 1991
Rubble Zone Crackle Breccia
Composite Test A B C D A B C D
Primary Grind
- 80% passing (P80), µm 223 175 149 98 165 110 99 59
Final Concentrate
Grade
Cu (%) 32.0 30.4 32.3 28.2 30.9 29.9 33.2 26.1
Au (g/t) 30.5 26.8 27.4 25.5 12.8 9.3 15.0 9.2
Recovery
Cu (%) 62.5 76.4 74.2 86.7 50.1 73.0 51.2 82.5
Au (%) 41.4 44.2 40.4 48.5 23.1 29.6 26.0 35.7
Rougher/Scavenger Concentrate
Recovery – Weight (%) 6.8 10.5 7.4 12.5 7.1 10.8 10.2 14.7
Recovery – Cu (%) 73.3 86.1 89.3 96.6 73.9 83.6 87.1 93.1
Recovery – Au (%) 61.1 74.7 68.5 79.8 51.1 56.8 63.9 66.4

The results indicated that copper and gold recoveries improved as primary grind fineness
increased. The finest primary grind size produced the best overall copper and gold
recoveries. The copper grades in the final concentrate grades ranged from 28 to 32% for
the Rubble Zone sample and from 26 to 33% for the Crackle Breccia sample.

Gold and silver assays conducted on the solutions from the rougher/scavenger tailing
showed that the use of minor quantities of sodium cyanide in the flotation circuit for
pyrite depression did not dissolve significant amounts of precious metals.

13.1.2 RECENT TEST WORK – 2007 TO 2016

Since 2007, approximately twenty testing programs, including one ongoing testwork
program, were sequentially carried out to investigate the mineralogical characteristics,
ore hardness, metallurgical performance of various mineral samples, and to determine
process related parameters, such as unit thickening rates and filtration rates. The
metallurgical performance investigations included flotation recoveries of copper, gold,
silver, and molybdenum minerals, gravity concentration of gold and silver minerals, and
cyanide extraction of gold and silver. The flotation test work included open cycle batch
tests, LCTs, and pilot plant tests. Although most test work was conducted primarily on
the samples from the Mitchell deposit, the testing programs also investigated the
metallurgical performance of the samples from the Sulphurets, Kerr, and Iron Cap
deposits.

In general, the mineralization from the four different deposits responded similarly to a
flotation concentration and sulphide concentrate cyanidation process with respect to
copper, gold, silver, and molybdenum metallurgical performance, although there are
some variations among the samples from the different deposits. The Mitchell samples
gave the most consistent results throughout the testing programs.

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 MITCHELL MINERALIZATION
Test Samples
All the testing samples for the various testing programs were collected from diamond drill
cores produced from various drilling programs.

The 2007 testing program used three composite samples. Table 13.8 shows the
chemical assays and key mineral distribution of the composite samples.

Table 13.8 Test Samples – Mitchell, 2007 (G&T)

Composite
Units A B C Average
Element Assay
Copper % 0.2 0.2 0.2 0.2
Gold g/t 0.9 0.9 0.9 0.9
Silver g/t 3.0 4.0 4.0 4.0
Sulphur % 4.6 3.6 1.8 3.3
Mineral Distribution
Chalcopyrite % 0.6 0.6 0.6 0.6
Pyrite % 10.0 9.4 4.2 7.9
Gangue % 89.5 90.0 95.2 94.9

The later test work used the samples collected from 2008 and 2009 drilling programs.
The 2008 testing program used a total of approximately 5,720 kg of drill core samples
for the testing. Most of the samples were collected from the Mitchell Zone. The 2008
and 2009 drill hole distributions for the Mitchell Zone are shown in Figure 13.1. The
variability testing samples are listed in Table 13.9.

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 Figure 13.1 2008 and 2009 Mitchell Zone Metallurgical Samples – Plan View

Table 13.9 Head Assay on Variability Test Samples – Mitchell, 2008 (G&T)
Metal Content (% or g/t)* Metal Content (% or g/t)*
Sample Sample
ID Cu Au Ag Mo As ID Cu Au Ag Mo As
MET 2 0.25 0.82 4 0.003 0.003 MET 19 0.30 0.67 4 0.002 0.001
MET 3 0.24 0.65 8 0.004 0.020 MET 20 0.17 0.54 4 0.005 0.004
MET 4 0.26 0.83 3 0.004 0.001 MET 21 0.21 0.83 2 0.004 0.003
MET 5 0.20 0.66 2 0.004 0.001 MET 22 0.20 0.85 3 0.011 0.002
MET 6 0.21 0.74 2 0.010 0.001 MET 23 0.11 0.32 3 0.025 0.010
MET 7 0.28 1.49 3 0.001 0.002 MET 24 0.24 0.86 3 0.001 0.053
MET 8 0.21 0.57 2 0.003 0.002 MET 25 0.14 0.43 2 0.007 0.005
MET 9 0.13 0.48 2 0.002 0.002 MET 26 0.13 0.68 2 0.002 0.004
MET 10 0.07 0.39 3 0.010 0.004 MET 27 0.15 0.82 2 0.003 0.002
MET 11 0.19 0.64 3 0.003 0.003 MET 28 0.16 0.86 3 0.012 0.001
MET 12 0.20 0.79 3 0.002 0.001 MET 29 0.19 0.79 5 0.018 0.006
MET 13 0.30 1.24 4 0.002 0.003 MET 30 0.14 0.22 3 0.003 0.005
MET 14 0.31 1.31 18 0.001 0.004 MET 32 0.22 1.18 2 0.002 0.006
MET 15 0.28 0.87 3 0.003 0.003 MET 33 0.33 0.96 7 0.002 0.008
MET 16 0.44 1.24 5 0.001 0.001 MET 34 0.28 0.85 3 0.004 0.002
MET 17 0.27 0.74 3 0.003 0.003 MET 35** 0.12 0.30 1 0.003 0.008
MET 18 0.28 1.34 5 0.001 0.004 MET 36** 0.52 0.81 1 0.023 0.005
Note: *g/tfor Au and Ag **from Sulphurets deposit
arsenic (As)

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 A total of 10 additional composites were generated from the "MET" samples, including 9
composite samples representing the major Mitchell Zone mineralization types that were
projected to be mined during the different mining periods laid out in the mine plan
generated from the 2008 Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
(Wardrop, 2008). The feed grades for the composites are shown in Table 13.10.

Table 13.10 Head Assay on Composites – Mitchell, 2008 (G&T)

Metal Content
Cu Au Ag Mo As
Sample ID (%) (g/t) (g/t) (%) (%)
QSP 0-10 0.24 0.94 4 0.001 0.004
QSP 10-30 0.23 1.08 8 <0.001 0.004
QSP 0-30 0.24 0.95 4 0.004 0.002
QSP 0-10 LG 0.17 0.86 4 0.004 0.007
Hi Qtz 0-10 0.21 1.08 4 0.004 0.004
Hi Qtz 10-30 0.27 0.90 4 <0.001 0.004
Hi Qtz 0-30 0.25 1.02 4 0.004 0.001
Prop 10-30 0.26 1.00 3 <0.001 0.001
IARG 0-10 0.10 0.60 4 0.006 0.006
Master Comp 1 0.19 0.84 4 0.003 0.003

The 2009/2010 testing programs used a total of 12.1 t of core samples from
3,218 different drill core intervals from the Mitchell and Sulphurets deposits. Eleven
composites were generated from the Mitchell deposit according to mineralization types.
The metal contents in the composite samples from the Mitchell deposit are shown in
Table 13.11.

The assay data indicated that the copper mineral oxidation level was low; only 3% or less
of the copper was present in oxide forms.

The Composite PP1 sample was constructed from CL-PR, QSP, and Hi Qtz mineralization,
the three dominant mineralization types of the Mitchell deposit. Composite PP2 was
selectively prepared with higher molybdenum core intervals.

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 Table 13.11 Metal Contents of Composites – Mitchell, 2009 (G&T)
Metal Content
Mineralization Cu(T) Cu(OX) Cu(CN) Au(T) Au(CN) Mo Ag
Composite Type (%) (%) (%) (g/t) (g/t) (%) (g/t)
Comp 40 CL-PR 0.20 0.006 0.008 0.67 0.013 0.004 3.6
Comp 41 BBRX 0.71 0.006 0.008 0.35 0.007 0.010 8.9
Comp 42 QSP 0.28 0.006 0.011 1.02 0.009 0.002 4.1
Comp 43 CL-PR 0.22 0.004 0.011 0.70 0.004 0.004 3.1
Comp 44 Hi Qtz 0.27 0.008 0.019 0.92 0.006 0.010 4.2
Comp 45 IARG 0.13 0.002 0.004 0.57 0.013 0.010 3.5
Comp 46 CL-PR 0.15 0.003 0.004 0.67 0.012 0.011 2.0
Comp 47 QSP 0.16 0.004 0.006 0.73 0.015 0.013 2.3
Comp 48 QSP 0.10 0.003 0.002 0.61 0.013 0.015 2.2
Comp PP1 Blend 0.24 - - 0.76 - 0.004 -
Comp PP2 Blend 0.18 - - 0.64 - 0.010 -
Notes: QSP: Quartz, sericite, pyrite altered rocks
IARG: Intermediate argillic altered rocks (quartz, sericite, chlorite, pyrite, ±clays)
CL-PR: Chlorite-propylitic altered rocks (quartz, chlorite, pyrite, ±magnetite, ±epidote, ±calcite)
Hi Qtz: Altered rocks with >60% quartz veining by volume, higher than average pyrite (7-15%)
BBRX: Bornite breccia (breccia w/bornite, chalcopyrite, pyrite in matrix of quartz, clay, anhydrite)
Blend: Blend from various mineralization types for pilot plant testing
Cu(T): Total copper; Cu(OX): oxide copper; Cu(CN): cyanide soluble copper
Au(T): Total gold; Au(CN): cyanide soluble gold.

In 2010, three additional Mitchell Zone composites were generated using the drill core
interval samples from the 2009/2010 drilling program. The sample details are shown
below and in Table 13.12:

 PP Composite 3: crushed materials generated from HPGR tests (approximately

5.5 t) for bench tests and pilot plant tests. The HPGR bulk sample was collected
from core intervals within the 10-year pit mining model generated in 2009. The
cores were selected according to proportion of each ore type above the cut-off
grade in the 10-year pit. The drill core interval plan is shown in Figure 13.2 and
the main element content estimates and percent of mineralization type domain
is provided in Table 13.13.
 PP Hi-Mo Composite: halved drill cores (approximately 6.3 t)
 BS Hi-Mo Composite: high molybdenum content drill cores selected from halved
drill cores for PP Hi-Mo composite.

Table 13.12 Metal Contents of Composites – Mitchell, 2010 (G&T)

Cu Mo Fe S Au Ag
Sample
(%) (%) (%) (%) (g/t) (g/t)
PP Composite 3 0.20 0.006 4.29 3.66 0.79 3.2
BS Hi-Mo Composite 0.12 0.013 3.95 3.27 0.57 2.4
PP Hi-Mo Composite 0.16 0.012 4.02 3.67 0.60 -

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 Figure 13.2 Drill Core Interval Plan for PP Composite 3

In the 2011 and 2012 test programs, 10 composites were generated from the Mitchell
deposit drill core interval samples.

 Mitchell Year 0 to 5 (KM3080): proposed average mill feed from the Mitchell pit
during Years 0 to 5 based on the 2011 mine plan
 Mitchell Year 0 to 10 (KM3080 and KM3081): proposed average mill feed from
the Mitchell pit during Years 0 to 10 based on the 2011 mine plan
 Mitchell Year 0 to 20 (KM3080 and KM3081): proposed average mill feed from
the Mitchell pit during Years 0 to 20 based on the 2011 mine plan
 Composite 1 (KM3174): proposed average mill feed from the Mitchell pit during
Years 0 to 5 based on the 2011 mine plan
 Composite 2 (KM3174): proposed average mill feed from the Mitchell pit during
Years 0 to 10 based on the 2011 mine plan
 Composite 3 (KM3174): proposed average mill feed from the Mitchell pit after
Year 10 based on the 2011 mine plan
 Composite 4 (KM3174): Mitchell QSP mineralization
 Composite 5 (KM3174): Mitchell QSP mineralization
 Composite 6 (KM3174): Mitchell CL PR mineralization
 Composite 7 (KM3174): Mitchell IAGG mineralization.

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Table 13.13 Element Content Estimate and Percent of Mineralization Type Domain
Content Estimate % of Mineralization Type Domain

Weight Au Cu Mo Ag As Qtz Pyrite QSP IARG CL-PR High Qtz

Sample (kg) (ppm) (%) (%) (ppm) (ppm) (%) (%) (%) (%) (%) (%)
1 364 0.706 0.152 0.0149 2.20 41 24.7 5.2 71 - 7 23
2 359 0.810 0.168 0.0037 3.76 24 11.6 3.9 38 22 40 -
3 370 0.812 0.221 0.0037 3.76 23 24.0 2.8 8 11 56 25
4 339 0.695 0.180 0.0046 2.07 24 24.1 5.5 56 9 13 21
5 388 0.878 0.209 0.0056 1.61 34 42.3 5.6 44 - - 64
6 399 0.789 0.169 0.0065 1.79 21 37.2 4.5 55 - - 45
7 346 0.785 0.188 0.0048 2.29 27 32.2 3.8 60 - 4 36
8 352 0.707 0.211 0.0026 2.91 37 39.1 5.1 17 - 43 40
9 371 0.937 0.216 0.0036 4.46 16 18.6 5.3 50 - 28 22
10 398 0.987 0.297 0.0070 3.66 27 40.4 7.1 59 - 7 34
11 375 0.689 0.216 0.0043 3.67 56 36.9 4.5 65 - - 35
12 353 1.062 0.276 0.0015 5.10 27 25.1 6.0 63 - 13 25
13 364 0.861 0.202 0.0054 2.73 19 12.4 3.3 4 13 77 6
14 332 0.730 0.117 0.0097 1.65 36 6.7 4.4 100 - - -
15 402 0.583 0.169 0.0021 2.91 21 6.2 2.6 34 6 60 -
Total 5,512 0.803 0.198 0.0053 2.95 29 25.4 4.6 48 4 23 25

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 Three composite samples were prepared for the test programs of KM3080 and
KM3081and the rest were for KM3174. The sample details are shown below and in
Table 13.14.

Table 13.14 Metal Contents of Composites – Mitchell, 2011/2012 (G&T)

Cu Mo Fe S Au Ag
Sample
(%) (%) (%) (%) (g/t) (g/t)
Mitchell Year 0 to 5 0.21 0.008 4.0 3.6 0.60 4
Mitchell Year 0 to 10 0.20 0.005 3.7 3.4 0.67 4
Mitchell Year 0 to 20 0.22 0.006 4.4 3.6 0.64 3
Composite 1 0.20 0.005 3.9 3.17 0.77 4
Composite 2 0.20 0.003 3.8 3.62 0.69 3
Composite 3 0.20 0.004 4.3 4.52 .71 3
Composite 4 0.20 0.006 4.2 4.17 1.10 4
Composite 5 0.23 0.005 4.1 4.89 0.56 3
Composite 6 0.19 0.003 4.2 3.22 0.62 2
Composite 7 0.13 0.009 4.2 3.75 0.65 3
Note: iron (Fe); sulphur (S)

Mineralogy
The mineralogical composition study of the 2008 testing program shows that the
sulphide minerals in all three samples (QSP 0-30, Hi Qtz 0-30, and Master Composite 1)
are dominated by pyrite, which is present as approximately 6 to 8% of the sample weight.
The study also indicated that the copper was present in the form of chalcopyrite.
Detailed analysis results are provided in Table 13.15.

Table 13.15 Mineral Composition Data – Mitchell, 2008 (G&T)

Mineral Composition (%)
Sample Chalcopyrite Pyrite Gangue
QSP 0-30 0.66 6.6 92.7
Hi Qtz 0-30 0.67 8.2 91.2
Master Comp 0.54 8.1 91.4

The pyrite-to-chalcopyrite ratios are high in the three composite samples. The average
ratio is 12:1 while the highest ratio reaches 15:1. There does not appear to be close
pyrite-chalcopyrite interlocking. Figure 13.3 illustrates the primary relationship among
the main minerals in the samples.

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 Figure 13.3 Mineral Relationship – Master Composite, Mitchell
Particle Fractions <75 μm >32 μm Particle Fractions <150 μm >75 μm

Note: Cp = Chalcopyrite, Py = Pyrite, Ma = Magnetite, He = Hematite, Gn = Gangue.

The degree of chalcopyrite liberation ranged from 46% to 56% across the samples tested
at a primary grind size of 80% passing 116 µm to 136 µm. The Hi Qtz sample showed a
higher two-dimensional chalcopyrite liberation than the QSP sample. A primary grind size
of 80% passing 125 µm was recommended for the Mitchell Zone.

Mineralization Hardness
Various grindability tests have been conducted in a number of test programs including
SMC grindability testing, crushing characteristics to HPGR, and standard Bond ball mill
work index determination.

Grindability/Crushability Determination – Bond Ball Mill Work Index

Both G&T and SGS carried out standard Bond ball mill work index tests on the Mitchell
mineralization. As summarized in Table 13.16, the Bond work indices determined from
different testing programs range from 12.5 kWh/t to 15.5 kWh/t, averaging 14.4 kWh/t.
The data suggests that the Mitchell samples are of moderate hardness. The Bond
abrasion index (Ai) of Composite PP1 was measured at 0.293 g by SGS.

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 Table 13.16 Bond Ball Mill Work Index Test Results – Mitchell, 2008
Wi Ai
Samples
(kWh/t) (g)
2011/2012 G&T
Composite 1 14.3 -
Composite 2 14.3 -
Composite 3 14.9 -
Composite 4 14.1 -
Composite 5 14.5 -
Composite 6 14.4 -
Composite 7 15.3 -
Sub-average 14.5 -
2009 G&T
Composite 40 15.5 -
Composite 41 14.8 -
Composite 42 15.2 -
Composite 43 14.6 -
Composite 44 13.4 -
Composite 45 14.1 -
Composite 46 12.8 -
Composite 47 13.3 -
Composite 48 12.5 -
Sub-average 14.0 -
2009/2010 SGS
Composite PP1 13.8 0.293
2008 G&T
High Quartz 0-10 15.2 -
High Quartz 10-30 15.3 -
IARG 0-10 13.9 -
QSP 0-10 14.5 -
QSP 10-30 15.2 -
Sub-average 14.8 -
2007 G&T
A 14.7 -
B 14.8 -
C 14.8 -
Sub-average 14.8 -
Total Average 14.4

G&T also compared the hardness variation of various variability test samples and main
mineralization type composites by the CWi method in the 2008 testing program. The CWi
was calculated from grind calibration data and the standard Bond ball mill work index.
The data is compared in Figure 13.4 for the composite samples. The average CWi values
are 16.7 kWh/t for the individual samples and 15.5 kWh/t for the composite samples.

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 Two of the mineral samples, Met 35 and Met 36, which were from the Sulphurets Zone,
produced higher CWi values.

Figure 13.4 Comparative Ball Mill Work Index – Variability Samples, 2008

Figure 13.5 Comparative Ball Mill Work Index – Composite Samples (Mitchell, 2008)

Grindability/Crushability Determination – SMC Tests and Simulations

The SMC grindability tests were conducted by Hazen in 2008. The samples used for the
grindability tests were identified as QSP, IARG, CL-RICH, QSP STW/QTVN, and H FELDS.
The SMC test results are shown in Table 13.17.

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 Table 13.17 SMC Test Results – Mitchell, 2008
Sample
CL- QSP H
Parameter QSP IARG RICH STW/QTVN FELDS
SG 2.81 2.42 2.78 2.69 2.71
A 70.7 75 68.1 82.6 81.6
b 0.71 0.40 0.57 0.60 0.44
Axb 50.2 30.0 38.8 49.6 35.9
DWi (kWh/m3) 5.5 7.9 7.1 5.4 7.5
Mia (kWh/t) 16.1 24.8 19.9 16.3 21.2
Ta 0.47 0.33 0.37 0.49 0.35
SG: Specific Gravity DWi: Drop Weight Index (kWh/m3)
A: Maximum Breakage Mia: Coarse Ore Wi (kWh/t)
B: Relation between Energy & Impact Breakage Ta: Estimated Abrasion Parameter
Axb: Overall SAG Hardness

In 2011, G&T conducted additional SMC tests to investigate the grindability of the
Mitchell samples to SAG mills. The test results are summarized in Table 13.18.

Table 13.18 SMC Test Results – Mitchell, 2011/2012

Sample
Parameter Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6 Comp 7
SG 2.79 2.81 2.79 2.83 2.75 2.79 2.79
A 59.8 57.3 68.8 60.0 66.2 55.3 53.2
b 0.91 1.01 0.65 0.79 0.90 0.86 1.00
Axb 54.4 57.9 44.7 47.4 59.6 47.6 53.2
DWi (kWh/m3) 5.12 4.83 6.21 5.96 4.61 5.86 5.23
Mia (kWh/t) 15.2 14.4 17.8 16.9 14.2 16.9 15.4
Ta 0.51 0.54 0.42 0.43 0.56 0.44 0.50

The DWi and Axb data indicate that, on average, the materials are moderately resistant to
SAG mill grinding in comparison to the JK Tech database. The 2008 test results showed
that Axb ranged from 30.0 to 50.2, while the data of the 2011/2012 tests indicated that
the mineral samples are slightly less resistant to SAG milling.

Contract Support Services conducted three SABC circuit simulations to estimate

equipment sizing. The simulations used JK SimMet software. All the simulations were
based on the data generated from the SMC testing.

The simulation input conditions were based on 120,000 t/d (two streams of 60,000 t/d
each), 92% availability, a feed particle size of 80% passing 150 mm and one of the
following conditions:

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  Simulation 1: Bond ball mill work index 14.8 kWh/t, a product particle size of
80% passing 150 µm
 Simulation 2: Bond ball mill work index 16 kWh/t, a product particle size of 80%
passing 150 µm
 Simulation 3: Bond ball mill work index 15 kWh/t, a product particle size of 80%
passing 120 µm.

Simulation results for each primary grinding stream (two circuits required) are
summarized in Table 13.19. The simulations are based on phantom cyclone assumption
and with primary cyclones for SAG mill discharges.

Table 13.19 JK SimMet Simulation Results (60,000 t/d SABC Circuit, 2008)
Simulation 1a 1b 2a 2b 3a 3b
SAG Size, D x L (EGL) 40 x 24 37.7 x 21 40 x 24 37.7 x 21 40 x 24 37.7 x 21
Mill (ft x ft)
Circulation Load 19.5 18.4 19.5 18.4 19.5 18.4
(% of Feed)
Gross Power Draw 18,843 15,570 18,843 15,570 18,843 15,570
(kW)
Transfer Particle Size, mm 2,500 3,035 2,500 3,035 2,500 3,035
Ball Size, D x L (EGL) 22 x 36 22 x 36 22 x 36 22 x 36 22 x 36 24 x 38
Mills (ft x ft)
Mill Number 2 2 2 2 2 2
Gross Power Draw* 15,644 17,293 16,912 18,695 19,283 21,017
(kW)
Total Power Draw (kW) 34,487 32,863 35,755 34,265 38,126 36,587
Cyclone Diameter (inches) 26 26 26 26 26 26
Note: *with phantom cyclones.
effective grinding length (EGL)

The simulation results also show that, with a primary grind size of 80% passing 120 µm,
either of the following options will meet the primary grinding requirements for a
60,000 t/d processing rate:

 one 40 ft dia. x 24 ft L SAG mill and two 22 ft dia. x 36 ft L ball mills, or

 one 38 ft dia. x 21 ft L SAG mill and two 24 ft dia. x 38 ft L ball mills.

The simulation indicated that less energy consumption would be expected if SAG mill
discharges are classified by primary cyclones prior to ball mill grinding.

In 2012, Contract Support Services conducted a few of the similar SABC simulations on
the average data obtained. The simulations produced similar results to those produced
in 2008 (Table 13.1).

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 Grindability/Crushability Determination and Comminution Circuit Simulation – HPGR

In 2009 and 2010, two separate HPGR comminution characteristic testing programs
were performed—bench scale testing at SGS and pilot plant scale tests at Köeppern’s
HPGR pilot plant at UBC.

The bench scale LABWAL tests by SGS were conducted on the Mitchell and Sulphurets
composite samples. The tests included batch tests and locked cycle tests (LCT). The test
results indicate that the Sulphurets mineralization is harder with respect to HPGR
crushing than the Mitchell mineralization. On average, the net specific energy
requirement is 2.33 kWh/t for the Mitchell sample and 3.08 kWh/t for the Sulphurets
sample. The LCT results, including specific grinding force (N/mm2) and specific
throughput rate (ts/hm3-(mc)), are summarized in Table 13.20.

Table 13.20 HPGR Average Test Results – LCT, Mitchell, 2009/2010

Parameter Unit Mitchell Sulphurets
Operation
Pressure of Operation bar 65 66
Moisture % H2O 1.8 1.7
Dry Net Throughput t/h 1.9 1.6
Circulating Load % 34.7 47.1
Net Power kW 4.4 5.1
Gross Specific Energy Requirement kWh/t 2.96 3.80
Net Specific Energy Requirement kWh/t 2.33 3.08
HPGR Product Analysis
50% Passing µm 694 1,046
80% Passing µm 1,988 2,220
Percent Passing 100 Mesh % 25.3 17.7
Percent Passing 6 Mesh % 100 100
Flake Thickness mm 6.0 5.8
Performance Indicators
Specific Grinding Force N/mm2 3.24 3.31
Specific Throughput ts/hm3-(mf) 226 213
Specific Throughput Rate ts/hm3-(mc) 195 187
Ratio mj/mf 0.86 0.88
Specific Power kWs/m3 528 657
New minus 100 Mesh Produced % 19.6 11.9
New minus 6 Mesh Produced % 73.5 60.6

Based on the test results, SGS also conducted related simulations to size the HPGR.

Köeppern conducted a pilot plant test at its HPGR pilot plant at UBC using approximately
5.5 t drill core samples collected from the Mitchell deposit. The pilot plant HPGR rollers
are 0.75 m in diameter and 0.22 m in width. The test report made the following main
observations:

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  Significant size reduction was achieved in comparison to the other materials
tested previously by this laboratory.
 A specific pressing force of 4 N/mm2 was considered to be optimum on the basis
of both size reduction and throughput performance.
 Varying roll speed did not produce a significant impact on HPGR performance.
 An increase in feed moisture had a negative impact on throughput and energy
consumption. An increase in feed moisture from 0.4% to 5% resulted in a 56%
increase in net specific energy consumption.
 Variation in feed top size did not produce a significant difference in 50% passing
particle size of HPGR product.
 Higher HPGR throughputs were achieved with closed circuit tests than with single
pass tests at the equivalent machine operating conditions.
 A lower net specific energy consumption (approximately 1.94 kWh/t) was
recorded for the closed circuit tests, in comparison with 1.99 kWh/t obtained
from the single pass tests.

The typical LCT data are provided in Figure 13.6 and Figure 13.7.

Figure 13.6 HPGR Net Specific Energy Consumption vs. Cycle Number, 2010

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 Figure 13.7 Specific Throughput (ts/hm3) vs. Cycle Number, 2010

The HPGR test work program showed that the Mitchell material is amenable to the HPGR
crushing process. Köeppern’s test work report indicates that the results from the
program are sufficient for sizing HPGR units and their motors.

SGS performed a preliminary HPGR/ball mill circuit design based on a total production
rate of 120,000 t/d and the test results from the bench scale LABWAL test results. The
configurations of the crushing and grinding circuit for the Mitchell and Sulphurets ores
are summarized in Table 13.21. It appears that processing of Mitchell ore would require
four 7.9 ft diameter x 5.4 ft long HPGR crushers, while processing the harder Sulphurets
ore on its own, would require five of the same size HPGR crushers.

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 Table 13.21 Simulation Results – HPGR/Ball Circuit, SGS (2009/2010)
Mitchell Sulphurets
HPGR Ball Mill HPGR Ball Mill
Crusher/Mill Dimensions
Train Number 4 4 5 5
Nominal Dimension 7.9 ft x 5.4 ft 23.5 ft x 40 ft 7.9 ft x 5.4 ft 23.5 ft x 40 ft
Mill Speed (RPM) 16.9 12.0 15.9 12.0
% of Critical Speed (%) - 75 - 75
Grinding Steel Balls
Design Ball Charge (% vol.) - 29 - 33
Maximum Ball Charge (%) - 34 - 34
Motor
Design Power (kW) 15,816 40,759 23,465 57,293
Total Installed Power (kW) 22,400 47,744 28,000 59,680
Classification
Type Screens Hydrocyclones Screens Hydrocyclones
Circuit Performance
Product Particle Size, P80 (µm) 1,988 180 2,220 180
Ind. Specific Power Req. (kWh/t) 2.9 7.5 4.3 10.5
Total Specific Power Req.(kWh/t) 10.4 14.8
Note: rotations per minute (RPM)

Grindability/Crushability Determination – Tower Mill

As a part of the 2009 testing program, Metso Minerals Industries Inc. (Metso)
investigated the specific energy consumption for secondary grinding using tower mills.
The mill feed particle size was 80% passing 173 µm and the product particle size was
125 µm. The test results indicate that the specific energy requirement for the grinding by
a jar mill was 1.36 kWh/t for the Mitchell composite sample. As projected by Metso, the
specific energy requirement by a stirred tower mill would be approximately 0.88 kWh/t
for a similar particle size reduction.

Grindability/Crushability Determination – Regrinding/IsaMill™

SGS used the IsaMill™ procedure to determine the specific energy requirement for
regrinding the gold-bearing pyrite rougher concentrate that was produced from the
Mitchell samples. The tests indicated that the specific energy requirement to regrind the
concentrate from 80% passing 66 µm to 80% passing 16 µm was 24.2 kWh/t. The
grinding media consumption, 2 mm Keramax MT1 grind beads, was 6 g/kWh.

Process Flowsheet and Parameter Development

Many test programs have been conducted to develop the process flowsheet and to
optimize the process conditions. A flotation-cyanidation combination process was
developed for this mineralization. The process consists of:

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  copper-gold-molybdenum bulk rougher flotation followed by gold-bearing pyrite
flotation
 regrinding the resulting bulk rougher concentrate followed by three stages of
cleaner flotation to produce a copper-gold-molybdenum bulk cleaner flotation
concentrate
 molybdenum separation from the bulk cleaner flotation concentrate to produce
a rhenium-bearing molybdenum concentrate and a copper/gold concentrate
containing associated silver
 cyanide leaching of the gold-bearing pyrite flotation concentrate and the
scavenger cleaner tailing product.

The development of the flotation and cyanidation test conditions is summarized in the
following sections.

Flotation Tests

FLOTATION PARAMETER DEVELOPMENT TESTS

The tested process parameters for copper-gold-molybdenum bulk concentrate flotation

and gold-bearing pyrite concentrate flotation include primary grind size, regrind size,
slurry pH, and reagent regimes. After various tests, the following flotation conditions
were developed for the LCTs in the most recent testing programs:

 primary grind size: 80% passing approximately 125 µm

 rougher flotation pH: 10
 bulk concentrate regrind size: 80% passing approximately 20 µm
 cleaner flotation pH: 11.5
 flotation reagent:
 bulk flotation: dithiophosphinates (3418A) + dithiophospate (A208) +
fuel oil
 gold-bearing pyrite flotation: A208 + PAX.

The open circuit batch tests showed that the mineralization responded well to these
flotation conditions.

The effect of primary grind size and regrind size on the metallurgical performance was
evaluated using the QSP 0-30 and Hi Qtz 0-30 composites generated from the 2008
testing samples. The test results, as summarized in Figure 13.8 and Figure 13.9 show
that copper and gold metallurgical performance in the rougher flotation stage improved
with an increase in primary grind fineness, although far less significantly when the grind
size was finer than 80% passing 120 µm.

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 Figure 13.8 Metallurgical Performance vs. Primary Grind Size – QSP 0-30, 2008 (G&T)
100
90
Recovery, % Cu or Au 80
70
60
50
P80 161 um - Cu
40 P80 119 um - Cu
30 P80 85 um - Cu
P80 161 um - Au
20 P80 119 um - Au
10 P80 85 um - Au
0
0 2 4 6 8 10
Rougher Concentrate Copper%Grade,
Copper Grade, Cu % Cu

Figure 13.9 Metallurgical Performance vs. Primary Grind Size – Hi Qtz 0-30, 2008 (G&T)

100
90
Recovery, % Cu or Au

80
70
60
50
P80 135 um - Cu
40 P80 102 um - Cu
30 P80 72 um - Cu
P80 135 um - Au
20 P80 102 um - Au
10 P80 72 um - Au
0
0 1 2 3 4 5 6 7
Rougher Concentrate Copper Grade,
Copper Grade, % Cu % Cu

For QSP 0-30 composite, the copper recovery to a rougher concentrate, grading 4%
copper, improved from 81 to 89% when the primary grind size was decreased from 80%
passing 161 µm to 80% passing 85 µm. Gold recovery increased significantly with the
increase in the grind fineness; however, there was no significant increase in gold
recovery when the grind size was finer than 80% passing 120 µm.

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 Hi Qtz 0-30 composite produced higher metal recoveries compared with QSP 0-30
composite. The effect of primary grind size on the metallurgical performance was similar
to that observed from the QSP 0-30 composite.

Apart from QSP 0-30 and Hi Qtz 0-30 composites, G&T performed two sets of comparison
tests to investigate the effect of primary grind size on copper and gold recovery from all
the other composite samples generated for the 2008 testing program. The average
primary grind sizes tested were 80% passing 143 µm and 119 µm. The effect of the
grind size on the metal recovery to copper rougher concentrates is shown in Figure
13.10.

Figure 13.10 Effect of Primary Grind Size on Metallurgical Performance, 2008 (G&T)

100
90
Rougher Recovery, %

80
70
60
50
40
30
20
10
0

0
10

10

10

0
10

-3
-3

-3
0-

0-

0-

0-

10
10

10
SP
G

LG

tz

SP

tz
op
R

iQ

iQ
IA

SP

Pr
H

H
Q

Sample ID
Cu Rec - Fine PG Cu Rec - Coarse PG Au Rec - Fine PG Au Rec - Coarse PG

On average, the copper recovery reporting to copper rougher concentrate was 90.6% at
the fine grind size, compared to 86.6% at the coarse grind size. The average gold
recovery to the concentrate increased from 72.3 to 77.3%. However, QSP 0-10 and QSP
LG 0-10 composites appeared to show different gold metallurgical responses with the
change in primary grind sizes.

At the fine grind size, the total average gold recovery from both the copper rougher circuit
and pyrite circuit improved to 89%.

In the 2009 testing program, two sets of primary grind size confirmation tests were
conducted on Composite 42 (QSP) and Composite 44 (Hi Qtz). The test results appear to
indicate that the copper and gold metallurgical response of Composite 42 was not
sensitive to primary grinding size changes within the range of 80% passing 100 µm and
141 µm. Test results are provided in Figure 13.11. For Composite 44, the copper and
gold recoveries to the rougher/scavenger concentrate at the grind size of 80% passing
100 µm were slightly higher than that at the grind sizes of 80% passing 125 and 165 µm.

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 Figure 13.11 Effect of Primary Grind Size on Metal Recovery – Mitchell, 2009

Rougher Concentrate Grade, % Cu or g/t Au

Further tests on the pilot plant feed composites showed that the copper and gold
recoveries were not very sensitive to the primary grind size between 80% passing
100 and 150 µm. However, metal recoveries reduced at primary grind sizes coarser than
the 150 µm.

VARIABILITY TESTS

In the 2008 testing program, a total of 34 samples were used for variability tests,
including two samples (Met 35 and Met 36) from the Sulphurets Zone. Primary grind
sizes ranged from 80% passing 115 to 171 µm, averaging 149 µm. The rougher
concentrate from the copper circuit was reground to approximately 80% passing 18 µm
prior to cleaner flotation.

It appeared that the copper recoveries reporting to the third cleaner concentrates in the
open circuit tests increased with copper feed grade. As shown in Figure 13.12, G&T
established the relationship between copper recovery and copper feed grade at a fixed
concentrate grade of 25% copper. The variation in the copper metallurgical performance
of various mineral samples is shown in Figure 13.13.

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 Figure 13.12 Copper Recovery vs. Copper Feed Grade – Mitchell, 2008 (G&T)

Figure 13.13 Copper Recovery & Concentrate Grade – Individual Samples, Mitchell, 2008
(G&T)

The gold recovery to the copper concentrate fluctuated from 30 to 70%. The tests
seemed to show that gold recovery to copper concentrate increased as a function of
head gold content; however, the correlation was not strong. The gold metallurgical
performance is plotted in Figure 13.14.

Figure 13.14 Gold Recovery & Feed Grade – Individual Samples, Mitchell, 2008 (G&T)

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 Gold recoveries to the gold-bearing pyrite concentrate from the pyrite flotation circuit
varied from 4 to 29%, averaging approximately 16%. Combined gold recoveries from
both the copper flotation circuit and gold-bearing pyrite flotation circuit ranged from 73 to
96%, averaging approximately 86%.

Further tests were conducted on seven composites representing the major Mitchell Zone
mineralization types projected to be mined during various operating periods. The test
results are shown in Figure 13.15. At primary grind sizes ranging from 130 to 168 µm,
the third cleaner concentrates from the open batch flotation tests produced between 69
and 86% copper recovery and between 47 and 64% gold recovery.

Figure 13.15 Metallurgical Performance – Composites, Mitchell, 2008 (G&T)

100 0.5
90
Recovery / Grade, %

Copper Head, Cu%

80 0.4
70
60 0.3
50
40 0.2
30
20 0.1
10
0 0.0
0
10

10

10

0
10

0
-3
-3

-3
0-

0-

0-

0-

10
10

10
SP
G

LG

tz

SP

tz

op
R

iQ

iQ
IA

SP

Pr
H

H
Q

Sample ID
C u R ec o v ery A u R ec o v ery C u C o nc Grade C u H ead Grade

Similar to the MET sample variability tests, the total average gold recovery from the
copper-gold rougher and scavenger flotation was approximately 86% from the composite
samples.

Open circuit tests with two stages of cleaner flotation at a pH of 11.5 were also
performed on the nine composite samples. Primary grind sizes ranged from 80% passing
87 µm to 137 µm, averaging 119 µm. Regrind sizes varied from 80% passing 12 µm to
22 µm, averaging 18 µm. The results are shown in Figure 13.16.

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 Figure 13.16 Metallurgical Performance – Open Circuit Tests, Mitchell, 2008 (G&T)

100 1.0

AuAu
90 0.9
Recovery or Grade, %

g/tg/t
80 0.8

% or or
70 0.7

Grade,%Cu
60 0.6
50 0.5

HeadGrade,
40 0.4
30 0.3

Head
20 0.2
10 0.1
0 0.0

0
10

10

10

30
0
10

30

-3
-3

-3
0-

0-

0-

0-
0-

0-

10
10

10
SP

SP
G

LG

tz

tz
SP

tz
op
R

iQ

iQ
Q

iQ
IA

SP

Pr
H

H
Q

Sample ID
Cu Rec Au Rec Cu Conc Grade Cu Head Au Head

The second cleaner concentrate recovered between 79 to 91% of the copper and 54 to
71% of the gold from all the nine composites. On average, the metal recovery was 84.6%
for copper and 61.2% for gold.

The results appeared to indicate that copper recovery increased with an increase in
copper head grade. The test results also showed that gold recovery to the copper
concentrate did not appear to correlate with gold head grade or copper head grade.

Seven composites produced a concentrate of higher than 25% copper, excluding 16.2%
copper from the IARG 0-10 composite and 24.0% copper from the QSP LG 0-10
composite.

After adjusting the copper recovery to reflect a concentrate grade of 25% copper, a
relationship between the adjusted copper recovery and copper feed grade is plotted in
Figure 13.17. The graph indicates that increasing copper recovery is related to
increasing copper head grade. The test work produced a similar relationship as shown in
Figure 13.12, which are plotted using 2008 test results.

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 Figure 13.17 Copper Recovery vs. Copper Feed – Open Circuit Tests, 2008

100
90
Copper Recovery, % 80
70
60 y = 97.832x + 61.252
R2 = 0.8354
50
40
30 Cu Feed Grade Versus Recovery

20 Linear (Cu Feed Grade Versus Recovery)

10
0
0.00 0.05 0.10 0.15 0.20 0.25 0.30
Copper Head, %

The 2009/2010 flotation test work continued with further bench open circuit tests on the
composite samples. The reagents used included 3418A and A208 for copper-gold
flotation, fuel oil for molybdenum flotation, and the combination of PAX and A208 for
gold-bearing pyrite flotation. Lime was used to regulate the slurry pH to approximately
10.0 at the copper-gold rougher flotation stage and pH 11.5 for the copper-gold cleaner
flotation. The gold-bearing pyrite flotation was performed at an unadjusted pH value of
approximately 9.5.

The results from the testing program are summarized in Figure 13.18 and Figure 13.19.
The results indicate some significant variation in the metallurgical performance between
the different ore samples. The BBRX mineralization (Composite 41) showed the best
metallurgical response to the flowsheet. This could be due to the much higher feed
grade of this composite. Compared to the 2008 Hi Qtz mineralization test results, the Hi
Qtz mineralization (Composite 44) produced a slightly lower level of metallurgical
performance.

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 Figure 13.18 Copper Metallurgical Performance – Mitchell, 2009 (G&T)

Rougher Concentrate Copper Grade, % Cu

Figure 13.19 Gold Metallurgical Performance – Mitchell, 2009 (G&T)

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 The results also show that most of the cleaner concentrate grades of the individual
composites were greater than or close to 25% copper, averaging 28% copper. Notable
exceptions were Composites PP 1 and PP 2 that produced lower grade concentrates
containing 22% copper. The average copper recovery was 83%. The average gold
recovery to the final copper concentrates was 55%.

In the 2009/2010 testing program, SGS also conducted batch open cycle tests on
Composite PP1 and used a flotation flowsheet similar to the one developed by G&T. In
the test, SGS added carboxymethyl cellulose (CMC) into cleaner flotation to suppress clay
minerals and diesel fuel was added as a molybdenum collector. The SGS data in Figure
13.20 indicates that the effect of primary grind size on the copper and gold metallurgical
performance is not significant.

Figure 13.20 Metallurgical Performance – Mitchell, 2009/2010 (SGS)

The test results from the 2011/2012 testing programs confirmed the findings obtained
from the previous metallurgical performance test programs. The test results are
summarized in Figure 13.21 to Figure 13.24.

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 Figure 13.21 Copper Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3080)

Figure 13.22 Gold Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3080)

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 Figure 13.23 Copper Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3174)

Figure 13.24 Gold Metallurgical Performance – Mitchell, 2011/2012 (G&T, KM 3174)

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 LOCKED CYCLE TESTS

Fifteen LCTs have been conducted on the various composite samples generated from the
various testing programs since 2007, including the locked cycle test results achieved in
2015 on the Mitchell Year 0-5 composite which was constructed and tested in the
previous program KM3080. The test results are summarized in Table 13.22 for the
Mitchell mineralization and in Table 13.23 for Mitchell mineralization samples blended
with the other mineralization.

The test results showed a substantial variation in the concentrate grade, ranging from 20
to 30% copper. On average, the final copper concentrate contained approximately 25.0%
copper. The average recoveries to the concentrate were 84.7% for copper, 61% for gold,
50% for silver, and 56% for molybdenum. Approximately 26% of the gold and 28% of the
silver in the feed reported to other gold-bearing products, which were further extracted by
cyanide leaching. The test results showed that better metallurgical performances were
achieved in the more recent testing programs.

Table 13.23 shows the effect of blending the Mitchell sample with the samples from the
other mineralized zones. Metallurgical performance of the blended samples appears
comparable to that produced when treating the Mitchell material on its own.

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Table 13.22 Locked Cycle Test Results – Mitchell
Grade Flotation Recovery (%)
Test Grind Size Mass
Program Comp Product (P80 µm*) (%) Cu (%) Au (g/t) Ag (g/t) Mo (%) Cu Au Ag Mo
G&T 2153/141 Master Head 100.0 0.21 0.89 4.2 - 100.0 100.0 100.0 -
Cu/Mo Concentrate 119/16 0.9 20.2 62.8 273 - 87.8 63.0 58.5 -
Bulk Cleaner Tailing 7.0 0.10 1.66 - - 3.3 13.0 - -
Au-Pyrite Concentrate 5.6 0.10 2.02 - - 2.6 12.7 - -
G&T 2153/142 Master Head 100.0 0.21 0.92 3.7 - 100.0 100.0 100.0 -
Cu/Mo Concentrate 119/17 0.8 22.0 64.7 242 - 87.0 58.5 52.5 -
Bulk Cleaner Tailing 6.9 0.14 2.08 - - 4.5 15.7 - -
Au-Pyrite Concentrate 6.0 0.11 2.25 - - 3.0 14.6 - -
G&T 2344/73 PP Comp 1 Head 100.0 0.24 0.81 - - 100.0 100.0 - -
Cu/Mo Concentrate 103/14 1.0 22.3 55.7 - - 89.3 66.2 - -
Bulk Cleaner Tailing 6.8 0.13 1.70 - - 3.7 14.0 - -
Au-Pyrite Concentrate 2.5 0.13 1.80 - - 1.4 5.5 - -
G&T 2535/18 PP Comp 1 Head 100.0 0.23 0.84 4.0 - 100.0 100.0 100.0 -
Cu/Mo Concentrate 103/16 0.7 28.0 77.8 260 - 87.2 67.4 47.0 -
Bulk Cleaner Tailing 7.4 0.19 1.62 17.6 - 6.0 14.2 32.0 -
Au-Pyrite Concentrate 2.5 0.19 1.37 7.1 - 2.0 4.1 4.4 -
G&T 2535/20 PP Comp 1 Head 100.0 0.24 0.82 3.9 - 100.0 100 100.0 -
Cu/Mo Concentrate 137/17 0.9 23.8 62.0 248 - 88.1 66.2 55.6 -
Bulk Cleaner Tailing 7.4 0.10 1.61 11.3 - 2.9 14.4 21.2 -
Au-Pyrite Concentrate 2.8 0.21 1.69 7.2 - 2.4 5.6 5.1 =
G&T 2670/12 PP Comp 3 Head 100.0 0.20 0.74 3.2 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 147/15 0.6 30.1 77.7 264 0.386 84.2 58.0 52.6 35.7
Bulk Cleaner Tailing 6.2 0.19 1.49 - 0.036 6.0 12.5 - 37.9
Au-Pyrite Concentrate 4.9 0.12 2.04 - 0.014 3.1 13.6 - 11.6
table continues...

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 Grade Flotation Recovery (%)
Test Grind Size Mass
Program Comp Product (P80 µm*) (%) Cu (%) Au (g/t) Ag (g/t) Mo (%) Cu Au Ag Mo
G&T 2670/18 PP Comp 3 Head 100.0 0.20 0.79 3.2 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 147/22 0.6 27.4 70.5 272 0.462 86.1 56.5 53.0 49.7
Bulk Cleaner Tailing 6.0 0.13 1.98 9.3 0.016 3.9 15.1 17.4 15.8
Au-Pyrite Concentrate 4.4 0.15 2.26 6.4 0.016 3.4 12.7 8.8 11.7
G&T 2670/22 PP Hi Mo Head 100.0 0.16 0.60 3.3 0.014 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 143/21 0.6 22.4 61.7 243 1.200 78.9 56.9 43.8 47.9
Bulk Cleaner Tailing 6.6 0.17 1.87 10.0 0.042 7.3 20.6 19.8 19.9
Au-Pyrite Concentrate 5.6 0.16 1.39 6.9 0.026 5.7 12.9 11.6 10.2
G&T 2670/26 BS Hi Mo Head 100.0 0.12 0.55 2.4 0.010 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 143/17 0.3 24.9 70.3 185 1.258 71.5 43.2 26.0 42.2
Bulk Cleaner Tailing 5.8 0.27 1.58 9.7 0.049 13.3 16.6 23.4 28.1
Au-Pyrite Concentrate 5.7 0.13 1.79 5.5 0.026 6.0 18.3 13.1 14.5
G&T 2897/01 Comp 46 Head 100.0 0.15 0.65 2.3 0.012 100.0 100.0 100.0 100.0
of KM2344 Cu/Mo Concentrate 120/16 0.6 22.6 80.5 226 1.759 89.1 73.5 58.6 86.3
Bulk Cleaner Tailing 7.6 0.04 1.01 4.6 0.008 2.1 11.8 15.3 5.1
Au-Pyrite Concentrate 5.6 0.09 1.16 2.9 0.003 3.3 10.0 7.2 1.4
G&T 3081/93 Mitchell Yr 0-10 Head 137/18 100.0 0.20 0.65 4.7 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.6 27.1 58 427 0.33 83.3 56.3 57.1 55.6
Bulk Cleaner Tailing 7.4 0.20 2.12 12.0 0.011 7.3 24.2 19.0 22.0
Au-Pyrite Concentrate 6.4 0.10 1.01 4.0 0.005 3.3 10.1 5.5 8.2
G&T 3081/82 Mitchell Yr 0-20 Head 123/22 100.0 0.21 0.57 3.5 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.8 23.8 44.2 223 0.24 88.2 59.9 49.5 49.2
Bulk Cleaner Tailing 7.8 0.13 1.54 9.0 0.015 5.0 21.0 20.0 30.6
Au-Pyrite Concentrate 5.0 0.11 1.0 4.0 0.005 2.6 8.8 5.8 6.2
table continues...

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 Grade Flotation Recovery (%)
Test Grind Size Mass
Program Comp Product (P80 µm*) (%) Cu (%) Au (g/t) Ag (g/t) Mo (%) Cu Au Ag Mo
G&T 3081/103 Mitchell Yr 0-20 Head 123/17 100.0 0.22 0.55 4.0 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.6 29.8 56 299 0.267 76.7 57.8 43.0 26.3
Bulk Cleaner Tailing 8 0.32 1.51 14 0.039 11.6 22.0 28.4 54.0
Au-Pyrite Concentrate 4.4 0.18 1.02 6 0.006 3.6 8.1 6.7 4.8
ALS 4514/30** Mitchell Yr 0-5 Head 133/15/15 100.0 0.21 0.90 5 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.63 26.7 98.2 431 0.718 81.6 68.6 53.5 70.0
Bulk Cleaner Tailing 8.91 0.20 1.68 10 0.010 8.7 16.6 17.6 13.9
Au-Pyrite Concentrate 3.36 0.06 0.58 5 0.005 1.0 2.2 3.0 2.6
SGS PP Comp 1 Head 100.0 0.21 0.72 - 0.005 100.0 100.0 - 100.0
Cu/Mo Concentrate 129/28 0.8 23.1 53.7 - 0.410 89.0 59.6 - 65.0
Bulk Cleaner Tailing 9.2 0.06 1.54 - 0.009 2.62 19.8 - 13.2
Au-Pyrite Concentrate 5.8 0.09 0.81 - 0.013 2.60 6.6 - 12.0
Note: *primary grind size/regrind size
**including a copper flotation on the pyrite flotation concentrate

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Table 13.23 Locked Cycle Test Results – Blended Samples
Grade Flotation Recovery (%)
Test Grind Size Mass Cu Au Ag Mo
Program Comp Product (P80 µm*) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
G&T 2535/19 Mitchell (PP Comp1)/ Head 100.0 0.31 0.70 3.5 - 100.0 100.0 100.0 -
Kerr (52/53 Blend); Cu/Mo Concentrate 1.1 25.3 40.0 168 - 87.4 60.4 51.4 -
80%:20% 127/20
Bulk Cleaner Tailing 8.0 0.12 1.36 8.2 - 3.2 15.5 18.9 -
Au-Pyrite Concentrate 4.2 0.24 0.94 5.9 - 3.3 5.7 7.1 -
G&T2670/62 Mitchell/Sulphurets Head 100.0 0.22 0.67 2.8 0.007 100.0 100.0 100.0 100.0
Blend; 60%:40% Cu/Mo Concentrate 0.8 24.2 52.0 178 0.664 85.9 59.8 50.9 72.4
141/22
Bulk Cleaner Tailing 8.6 0.09 1.40 5.6 0.008 3.6 18.1 17.2 9.7
Au-Pyrite Concentrate 3.9 0.19 1.47 4.9 0.010 3.5 8.6 6.8 5.5
G&T 2748/18 Mitchell (PP Comp 1)/ Head 100.0 0.24 0.79 - 0.004 100.0 100.0 - 100.0
Iron Cap C1/Iron Cap Cu/Mo Concentrate 0.8 27.6 59.6 - 0.250 87.8 58.2 - 51.5
C2; 33%:33%:33% 135/15
Bulk Cleaner Tailing 8.2 0.09 1.52 - 0.010 2.9 15.7 - 20.7
Au-Pyrite Concentrate 7.4 0.13 1.85 - 0.003 4.0 17.4 - 5.4
ALS 4672/32** Mitchell (Mitchell Head 100.0 0.24 0.67 4 0.005 100.0 100.0 100.0 100.0
Yr 0-5)/Iron Cap (IC- Cu/Mo Concentrate 0.81 25.0 54.3 304 0.430 82.7 65.7 58.4 70.3
2014-MC4) 117/17/17
Bulk Cleaner Tailing 6.73 0.20 1.89 13 0.006 5.7 19.1 20.8 8.8
Au-Pyrite Concentrate 3.12 0.14 1.10 6 0.004 1.8 5.1 4.8 2.8
ALS 4514/31** Mitchell (Mitchell Head 100.0 0.37 0.59 3 0.006 100.0 100.0 100.0 100.0
Yr 0-5)/ Kerr Cu/Mo Concentrate 1.31 24.5 28.3 150 0.328 87.9 62.8 57.2 75.1
(DK-2014-MC3) 129/17/17
Bulk Cleaner Tailing 10.6 0.13 1.07 5 0.004 3.6 19.1 15.4 7.4
Au-Pyrite Concentrate 6.16 0.10 0.41 2 0.003 1.7 4.3 3.6 3.2
Note: *primary grind size/regrind size
**including a copper flotation on the pyrite flotation concentrate

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 PILOT PLANT TESTS

In the 2009 testing program, G&T carried out pilot plant tests using approximately 5 t of
coarsely crushed drill core. Compared to the bench LCTs, the pilot plant tests produced
lower metal recoveries and concentrate grades.

Copper recovery on the PP1 sample averaged 72% into an 18% copper final concentrate.
Test P2 produced a 23.9% copper concentrate. G&T indicated that the low copper
recovery might have resulted from pilot plant control or circuit stability issues. This in
turn caused copper losses into the pyrite circuit and the first cleaner tailing. These pilot
plant results are summarized in Table 13.24.

Table 13.24 Pilot Plant Test Results – Mitchell, 2009 (G&T)

Grade Recovery (%)
Grind Size
Test (P80 µm*) Cu (%) Au (g/t) Mo (%) Mass Cu Au Mo
Composite PP1 (Head Assay: 0.24% Cu, 0.76 g/t Au, 0.004% Mo)
P1 144 17.1 33.6 0.15 1.0 65.4 46.1 31.5
P2 96 23.9 59.6 0.17 0.7 65.2 51.9 23.6
P3 104 16.3 35.7 0.14 1.3 80.2 58.6 40.8
P4 103 15.5 29.8 0.03 1.2 74.3 50.7 8.8
P5 97 18.4 41.4 0.12 0.9 76.0 52.3 26.4
Average 109 18.2 40.0 0.12 1.0 72.2 51.9 26.2
Composite PP2 (Head Assay: 0.18% Cu, 0.61 g/t Au, 0.010% Mo)
P6 84 16.7 33.0 0.70 1.0 79.7 50.3 54.8
P7 91 17.7 42.5 0.95 0.9 81.7 60.5 72.3
P8 88 18.0 36.9 0.81 0.9 79.1 47.4 65.8
Average 88 17.4 37.5 0.8 0.9 80.2 52.7 64.3
Note: *primary grind size

In the 2010 testing program, G&T conducted two additional pilot plant runs on the PP
Composite 3 and the PP Hi-Mo Composite samples. Compared to the 2009 pilot plant
tests, the 2010 testing program produced much better metallurgical performances. The
flowsheet used for the pilot plant tests is shown in Figure 13.25. The pilot test results
are provided in Table 13.25.

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 Figure 13.25 Pilot Plant Test Flowsheet, 2010 (G&T)

Table 13.25 Pilot Plant Test Results - Mitchell, 2010 (G&T)

Grade Recovery (%)
Grind Size
Test (P80 µm*) Cu (%) Au (g/t) Ag (g/t) Mo (%) Mass Cu Au Ag Mo
Composite PP3 (Head Assay: 0.20% Cu, 0.79 g/t Au, 3.2 g/t Ag, 0.006% Mo)
P1 115/16 26.4 62.0 482 0.43 0.7 83.0 50.2 53.1 43.2
25.2 62.5 382 0.26 0.6 79.2 50.9 54.8 29.0
P2 153/22 25.7 58.7 278 0.32 0.6 74.6 44.6 45.6 27.7
26.6 69.8 295 0.45 0.5 71.2 45.9 43.9 31.4
27.2 80.2 316 0.59 0.4 61.2 44.2 39.8 31.5
26.9 72.3 262 0.26 0.5 69.8 43.5 40.0 22.1
P3 152/23 25.4 64.6 239 0.35 0.6 71.3 54.4 39.1 29.9
24.3 62.4 240 0.24 0.7 79.2 52.1 49.6 28.5
25.3 56.2 182 0.27 0.6 81.6 51.4 42.6 29.1
25.5 58.8 220 0.32 0.6 79.3 52.9 47.2 37.1
P4 143/22 24.8 58.7 268 0.32 0.6 72.6 47.0 45.4 32.3
26.4 63.8 280 0.33 0.7 80.3 50.8 50.1 32.8
24.5 64.6 236 0.51 0.8 84.1 65.3 51.7 47.3
23.6 64.7 215 0.41 0.6 81.8 56.7 44.8 41.4
Average 25.6 64.2 278 0.36 0.6 76.4 50.7 46.3 33.1
table continues...

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 Grade Recovery (%)
Grind Size
Test (P80 µm*) Cu (%) Au (g/t) Ag (g/t) Mo (%) Mass Cu Au Ag Mo
PP Hi-Mo Composite (Head Assay: 0.16% Cu, 0.6 g/t Au, 3.2 g/t Ag, 0.012% Mo)
P5 163/28 22.0 52.1 244 0.31 0.7 77.8 47.3 52.5 33.1
25.1 67.7 248 0.31 0.4 71.8 45.8 38.5 20.6
19.3 61.8 276 0.71 0.7 81.5 66.6 59.6 41.6
20.3 47.2 253 1.20 0.7 78.6 48.5 52.4 63.6
P6 146/21 18.9 56.7 239 0.91 0.6 78.0 54.8 49.9 43.2
18.2 58.2 247 1.27 0.7 80.5 60.3 54.3 60.9
20.5 57.8 246 1.21 0.6 80.1 58.3 50.3 60.6
20.7 57.8 236 1.28 0.6 82.2 58.5 50.6 59.7
P7 143/22 19.7 67.9 259 1.27 0.6 78.9 59.7 51.5 66.8
20.0 55.4 260 1.38 0.7 80.6 58.5 51.3 70.4
Average 20.5 58.3 251 0.99 0.6 79.0 55.8 51.1 52.1
Note: *primary grind size/regrind size

For the PP Composite 3, the pilot plant test showed variable results throughout the run
period and, on average, did not achieve results as good as from an LCT on the same
sample. Copper recoveries were calculated at various intervals during the operating
period and ranged from 61 to 84%. The concentrate produced from the pilot plant run
averaged 25.6% copper. It was noted that the metallurgical performance observed from
the best pilot plant results was close to the results achieved in the locked cycle testing.

For the PP Hi-Mo Composite, the copper recovery reporting to the final bulk concentrate
ranged from 72 to 82% during the test. The copper concentrate produced ranged from
18.2 to 25.1% copper. The metallurgical performance of the pilot plant was very similar
to the performance obtained from a LCT on the same sample.

On average, approximately 50% of the silver in feed was recovered to the copper
concentrate for both composites. The average silver concentration in the concentrate
was approximately 250 g/t.

The molybdenum recovery into the final bulk concentrate was 52% for Hi-Mo Composite
and 33% for Composite PP3.

G&T conducted bulk mineral analysis (BMA) using QEMSCAN® on the blended bulk
concentrates produced in pilot runs P2, P3, and P5. The results of the BMA analyses are
shown in Table 13.26.

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 Table 13.26 Bulk Concentrate Mineralogy – Mitchell, 2010 (G&T)
Mineral Content (%)
Minerals P2 P3 P5
Chalcopyrite 77.8 67.3 61.7
Bornite 0.3 0.4 0
Covellite 0.3 0.5 0.5
Enargite 0.2 0.3 0.7
Tennantite 0.2 0.4 0.6
Molybdenite 1.0 0.8 1.2
Galena 0.6 0.3 1.2
Sphalerite 0.7 1.2 1.3
Pyrite 12.0 11.8 18.9
Iron Oxides 0.3 0.4 0.2
Quartz 2.7 7.7 6.3
Micas 2.3 2.8 1.8
Feldspars 0.6 2.4 2.5
Kaolinite 0.1 0.2 0.4
Titanium Mineral Group 0.3 1.0 0.7
Apatite 0.1 0.3 0.2
Others 0.5 2.2 1.6
Total 100 100 100

COPPER-GOLD AND MOLYBDENUM SEPARATION TESTS

In the 2009/2010 testing program, preliminary flotation tests were performed in an

effort to produce molybdenum concentrate from copper-gold-molybdenum bulk
concentrates.

The flotation separation tests were performed on the bulk concentrate produced from
pilot plant tests and from bench scale open circuit tests.

The 2009 testing showed that molybdenum concentrates produced from the bulk
flotation concentrate from the 2009 pilot plant tests were less than 30% molybdenum.
G&T indicated that aging of the bulk concentrates prior to the molybdenum flotation
testing was one of the potential reasons for producing the low grade molybdenum
concentrates. A follow-up 20-kg bench scale test on the freshly ground Composite PP2
sample produced a 48% molybdenum concentrate containing 1.8% copper.

In 2010, further copper/molybdenum separation tests were conducted on the

concentrates produced from the 2010 pilot plant tests. The open circuit test achieving
the best overall separation metallurgical performance produced a 51% molybdenum
concentrate with a molybdenum recovery of 72% from the molybdenum-copper
concentrate generated from the 2010 pilot plant flotation tests. The test results using
sodium sulphide (Na2S) and PE 26 to suppress copper minerals are shown in Figure
13.26, while the test results with sodium sulphide and PE 26 together with sodium

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 cyanide or D910 as depressant are shown in Figure 13.27. It appears that molybdenum
concentrate grade improved with adding sodium cyanide.

Figure 13.26 Cu-Mo Separation Open Circuit Flotation Tests, 2010

Figure 13.27 Cu-Mo Separation Open Circuit Flotation Tests, 2011

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 The molybdenum-copper separation LCT recovered 88.5% of the molybdenum from the
molybdenum-copper concentrate and produced a 41% Mo concentrate. The test results
are provided in Table 13.27.

Table 13.27 Cu-Mo Separation LCT Test Results, 2010

Grade (%) Recovery (%)
Weight
Product (%) Cu Mo C Cu Mo
Bulk Concentrate 100.0 19.3 1.28 0.63 100.0 100.0
Mo Concentrate 2.8 2.66 41.2 5.76 0.4 88.5
Cu Concentrate 97.2 19.8 0.15 0.48 99.6 11.5

G&T also conducted preliminary leaching tests on the molybdenum concentrates using
both the Brenda-Leach procedure and hydrochloric acid leaching. The Brenda-Leach test
results indicated that the copper and lead contents of the molybdenum concentrate were
reduced respectively from 2.06% to 0.26% copper and from 0.14% to 0.03% lead. The
hydrochloric acid leaching alone on a molybdenum concentrate only reduced copper
content from 1.5 to 0.81%.

The assay on the final molybdenum concentrates indicated that the concentrates
contained approximately 2,200 g/t rhenium (Re).

Cyanide Leach Tests

Because a portion of the gold is associated with pyrite, the first cleaner tailing and the
gold-pyrite concentrate from the flotation circuit were subjected to cyanide leaching to
recover additional gold and silver. Most of the testing programs conducted cyanide leach
tests on the first cleaner tailing and gold-bearing pyrite concentrate respectively or on the
blend of the two flotation products.

CYANIDATION TESTS – PRODUCTS FROM FLOTATION OPEN CIRCUIT TESTS

In the 2008 testing program, a total of 30 cyanide leach tests were carried out on the
gold-bearing products generated from the flotation variability tests. Prior to the leaching,
the combined first cleaner tailing and the gold-pyrite concentrate was reground to a
particle size of 80% passing 9 µm to 16 µm and aerated with air for 16 hours.

The test results are summarized in Table 13.28. The average gold extraction was
approximately 79%. Increasing leach retention time from 24 to 48 hours did not appear
to improve gold extraction.

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 Table 13.28 Cyanidation Test Results – Individual Samples, Mitchell, 2008
48-hour Leach Retention Time 24-hour Leach Retention Time
Regrind Regrind
Sample Size Feed Extraction Sample Size Feed Extraction
ID (P80 µm) (g/t Au) (% Au) ID (P80 µm) (g/t Au) (% Au)
MET 2 11 1.7 60 MET 3 12 1.4 65
MET 5 9 1.6 79 MET 4 13 1.6 78
MET 8 9 2.2 74 MET 6 9 2.4 84
MET 11 10 6.3 94 MET 7 11 3.4 78
MET 14 15 2.7 81 MET 9 9 1.3 74
MET 17 13 1.9 87 MET 10 11 2.7 91
MET 20 11 1.1 58 MET 12 10 3.3 87
MET 23 15 1.3 82 MET 13 10 8.9 90
MET 26 13 2.7 85 MET 15 14 2 85
MET 29 10 4.1 83 MET 16 13 3.2 82
MET 33 16 1.9 88 MET 18 11 1.4 63
MET 19 12 2.0 82
MET 21 9 2.2 69
MET 22 12 2.7 63
MET 24 10 4.1 87
MET 25 9 1.7 78
MET 27 13 2.2 81
MET 30 11 1.6 76
MET 32 7 3.4 91
Average 12 2.5 79 Average 11 2.7 79

Similar tests were conducted on the products generated from the open circuit flotation
tests of various composite samples. The leach feeds were subjected to regrinding to
80% passing approximately 20 µm or finer. The leach retention time was 24 hours. As
shown in Table 13.29, the gold extractions from the leach feeds ranged from 65 to 89%
for the samples from the 2008 testing program and from 69 to 89% for the 2009 testing
program. The average gold extraction was approximately 78% from the 2008 test work
and 81% from the 2009 test work.

The 2009 test results also indicated that cyanide leaching kinetics was rapid.
Approximately 69% of the gold was extracted within a 6-hour leach retention time.

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 Table 13.29 Cyanidation Test Results – Composites, Mitchell, 2008/2009
2008 Testing Program 2009 Testing Program
Extraction (% Au)
Feed Extraction Feed
Sample ID (g/t Au) (% Au) Sample ID (g/t Au) 6 h* 24 h*
QSP 0-10 2.2 82 Comp 40 CL-PR 2.0 80 85
IARG 0-10 1.3 80 Comp 41 BBRX 0.4 54 86
Hi Qtz 0-10 2.3 74 Comp 42 QSP 2.1 69 78
QSP LG 0-10 1.7 74 Comp 43 CL-PR 1.5 81 89
QSP 10-30 2.3 89 Comp 44 Hi Qtz 2.1 65 77
Prop 10-30 1.6 82 Comp 45 IARG 1.7 80 81
Hi Qtz 10-30 2.0 66 Comp 46 CL-PR 1.8 73 81
QSP 0-30 2.2 78 Comp 47 QSP 1.9 48 69
Hi Qtz 0-30 1.6 65 Comp 48 QSP 2.0 71 80
Average 1.9 78 Average 1.7 69 81
Note: *leach retention time

CYANIDATION TESTS – PRODUCTS FROM FLOTATION LOCKED CYCLE TESTS

The first cleaner tailing and the gold-pyrite concentrate from the various LCTs were
cyanide leached to investigate the responses of the gold-bearing products to the leaching
process. The test results are summarized in Table 13.30. On average, the leach feed
samples contained approximately 1.6 g/t gold and 9.6 g/t silver. The leaching tests
showed that 66% of the gold and 56% of the silver were extracted from the gold-bearing
products. Average cyanide consumption was 2.8 kg/t.

Table 13.30 Cyanidation Test Results on LCT Test Products – Mitchell

Regrind
Testing Size Feed Extraction Feed Extraction
Program Sample (P80 µm) (Au g/t) (Au %) (Ag g/t) (Ag %)
G&T-2153 Master 15 1.8 67.6 9.1 62.1
G&T-2153 Master 15 2.2 73.2 10.1 64.4
G&T-2344 PP Comp 1 12 1.6 68.0
G&T-2535 PP Comp 1 15 1.7 69.0 12.6 54.4
G&T-2535 PP Comp 1 15 1.6 81.1 10.9 54.7
G&T-2670 PP Comp 3 21 1.6 61.6
G&T-2670 PP Comp 3 18 2.0 66.5 8.1 55.5
G&T-2670 PP Hi Mo 19 1.9 68.0 8.6 50.6
G&T-2670 BS Hi Mo 19 1.7 68.9 7.6 48.7
G&T-2897 Comp 46 1.1 63.5
G&T-3081 Mitchell Yr 0-10 24 1.5 51.2
G&T-3081 Mitchell Yr 0-20 21 1.2 50.4
SGS PP Comp 1 16 1.1 69.8
Average – Mitchell 18 1.6 66.1 9.6 55.8

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 Some of the leaching tests were conducted separately on the first cleaner tailing and the
gold-bearing pyrite concentrate produced from the most recent testing programs. The
test results indicated that the first cleaner tailing produced lower gold extractions,
compared to the gold-bearing pyrite concentrate. On average, the gold extraction from
the gold-bearing pyrite concentrate was 77%, which is similar to the results obtained from
the products of the open circuit tests. The first cleaner tailing generated lower gold
extractions, averaging 58%.

G&T also tested the gold extraction on the first cleaner tailing and the gold-bearing pyrite
concentrate produced from the samples blended from the Mitchell Zone and the other
zones. The test results are provided in Table 13.31.

Table 13.31 Cyanidation Test Results on LCT Products – Mitchell/Other Zones

Regrind
Testing Size Feed Extraction Feed Extraction
Program Blend Sample (P80 µm) (Au g/t) (Au %) (Ag g/t) (Ag %)
2670 Mitchell/Sulphurets1 18 1.7 61.0 5.4 51.4
2748 Mitchell/Iron Cap2 14 1.4 53.0
2535 Mitchell/Kerr3 16 1.4 68.9 8.5 48.9
4672 Mitchell/Iron Cap - Cl.Sc.Tls4 17 1.9 51.0 11.0 63.0
4672 Mitchell/Iron Cap – Py Conc4 17 1.2 50.0 5.0 71.3
Average 16 1.5 60.9 7.0 50.2
Notes: 160% PP Comp 3 (Mitchell) + 40% Comp 49/50/51 (Sulphurets)
21/3PP Comp 1 (Mitchell) + 1/3 Iron Cap Comp 1+ 1/3 Iron Cap Comp 3
380% PP Comp 1 (Mitchell) + 10% Comp 52 (Kerr) + 10% Comp 53 (Kerr)
450% Mitchell Year 0-5 + 50% IC-2014-MC4.

CYANIDATION TESTS – PRODUCTS FROM PILOT PLANT TESTS

The first cleaner tailing and gold-bearing pyrite concentrate from the 2009 pilot plant
runs (P3 and P5) were CIL tested for 24 hours. The gold extractions were 72.5% for the
Test P3 product and 77.8% for the Test P5 product.

The CIL bottle roll cyanidation tests were also carried out on selected cleaner scavenger
tailing and pyrite concentrate streams from the 2010 pilot plant testing. The tests were
conducted at variable regrind sizes and sodium cyanide concentrations. The results
obtained at 1,000 mg/L sodium cyanide dosage are summarized as follows:

 At an average regrind size of 80% passing 24 µm, the average gold extraction
from the 1.6 g/t gold cleaner scavenger tailing was approximately 70%.
 At an average regrind size of 80% passing 20 µm, the average gold extraction
from the gold-bearing pyrite concentrate containing 1.9 g/t gold was
approximately 77%.

SGS also conducted cyanide leach tests on the gold-bearing products produced by the
2009 G&T pilot plant tests. Two tests (bench bottle-on-roll test and bulk leach test) were
conducted on the pilot plant test samples. The bulk leach test by agitation was to

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 prepare leach solutions for cyanide destruction testing and cyanide recovery testing. As
shown in Table 13.32, the tests produced lower gold extractions compared to the data
obtained by G&T.

Table 13.32 Cyanidation Test Results – LCT Products, 2009 (SGS)

Leach Gold Cyanide
Feed Extraction Consumption
Test Method Sample Weight (Au g/t) (%) (kg/t)
Pilot Plant Test Products – First Cleaner Tailing & Pyrite Concentrate
DCN (Bottle-on-Roll) 562 g 1.53 59.0 3.26
DCN (Drum with Agitation) 20 kg 1.90 49.9 2.96
Note: direct cyanide leaching (DCN)

Gravity Concentration Tests

GRAVITY CONCENTRATION TESTS ON HEAD SAMPLES

In the 2008 testing program, ten of the drill interval samples were tested for free-gold
recovery by gravity separation using centrifugal concentration (Knelson Concentrator)
followed by panning. The test results are shown in Table 13.33.

Table 13.33 Gravity Separation Test Results – Mitchell

Pan Concentrate Knelson Concentrate
Grade Distribution Grade Distribution
Sample ID (g/t Au) (%) (g/t Au) (%)
MET 4 231 55 103 61
MET 7 28 9 25 13
MET 10 3 6 4 19
MET 14 27 8 17 11
MET 16 50 17 33 20
MET 18 22 7 13 9
MET 19 15 15 11 20
MET 23 13 12 6 16
MET 29 44 6 11 10
MET 32 20 8 11 11
Average 45 14 23 19

On average, approximately 19% of the gold in the samples was recovered to the Knelson
concentrate with an average grade of 23 g/t gold.

Most of the pan concentrates contained less than 50 g/t gold with a gold recovery of less
than 17%, except for the MET 4 sample. Panning produced a 231 g/t gold concentrate
and recovered 55% of the gold from the MET 4 sample. The results suggest that gravity
concentration may not be applicable for most of the mineralization.

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 GRAVITY CONCENTRATION TESTS ON TAILING SAMPLES

G&T also carried out centrifugal gravity concentration tests to recover gold-bearing
minerals from flotation tailing. The test results show that the concentration was able to
recover some of the gold from the tailing. However, a poor match between the calculated
gold and measured gold in the feeds was reported.

SULPHURETS MINERALIZATION
Test Samples
Three composite samples were compiled from crushed drill cores to investigate the
metallurgical responses of Sulphurets mineralization. The drill hole locations are shown
in Figure 13.28. The chemical assay of these composites is provided in Table 13.34.

Figure 13.28 2008/2009 Sulphurets Zone Metallurgical Samples – Plan View

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 Table 13.34 Metal Contents of Composites – Sulphurets
Metal Content
Cu(T) Cu(ox) Cu(CN) Au(T) Au(CN) Mo Ag
Composite Mineralization Type (%) (%) (%) (g/t) (g/t) (%) (g/t)
2009 Test Work (G&T)
Comp 49 Hazelton Volcanics 0.14 0.016 0.016 0.26 0.002 0.003 1.9
Comp 50 Raewyn Copper 0.26 0.007 0.012 0.66 0.006 0.005 1.2
Comp 51 Raewyn Copper 0.37 0.005 0.013 0.81 0.007 0.011 1.4
2011/2012 Test Work (G&T)
Comp 8 Raewyn Copper 0.46 - - 0.76 - 0.008 1
Comp 9 Lower Hazelton 0.17 - - 0.65 - 0.004 2
Notes: Hazelton Volcanics: propylitic altered (quartz, chlorite, pyrite) volcanics and sediments of the Main
Copper Zone (above Sulphurets Fault).
Raewyn Copper: propylitic altered volcanics and sediments of the Sulphurets Zone (beneath
Sulphurets Fault); selected intervals are within crackled, veined, and brecciated transitional zone
beneath the Gold Breccia Zone, and have higher than average gold grades.

In 2011/2012 G&T conducted metallurgical tests (G&T, KM3174) on the two samples,
representing Raewyn CV mineralization and Lower Hazelton mineralization. The key
element assay data are shown in Table 13.34.

Mineralization Hardness
The test results, as provided in Table 13.35, indicate that the Sulphurets samples are
more resistant to ball mill grinding compared to the Mitchell samples. The average Bond
ball work index is 18.5 kWh/t for the Sulphurets samples; the Bond Ai of the overall
Sulphurets composite is 0.233 g.

Table 13.35 Bond Ball Mill Work Index Test Results – Sulphurets
Wi Ai
Samples (kWh/t) (g)
2011/2012 G&T
Composite 8 18.7 -
Composite 9 16.7 -
Sub-average 17.7 -
2009 G&T
Composite 49 15.8 -
Composite 50 20.8 -
Composite 51 19.8 -
Sub-average 18.8 -
2009/2010 SGS
Composite 19.1 0.233
Total Average 18.5 -

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 The 2011/2012 testing program determined the SAG mill grindability parameters for the
samples from the Sulphurets deposit. Compared to the samples from the Mitchell
deposit, the Sulphurets samples are more resistant to SAG mill grinding. The results are
shown in Table 13.36.

Table 13.36 SMC Test Results – Sulphurets, 2011/2012

Sample
Parameter Composite 8 Composite 9
SG 2.73 2.79
A 63.2 57.7
b 0.66 0.67
Axb 41.7 38.7
DWi (kWh/m3) 62.0 69.0
Mia (kWh/t) 19.0 19.9
Ta 0.39 0.36

In 2009, SGS conducted bench scale HPGR tests on the Sulphurets composite samples.
The tests included batch open circuit tests and LCTs. The test results indicate that the
Sulphurets mineralization is more resistant to HPGR crushing than the Mitchell
mineralization. On average, the net specific energy requirement is 3.08 kWh/t for the
Sulphurets sample compared to 2.33 kWh/t for the Mitchell sample. The LCT results,
including specific grinding force (N/mm2) and specific throughput rate (ts/hm3-(mc)) are
summarized in Table 13.20. The preliminary HPGR/ball mill circuit simulation results by
SGS are provided in Table 13.21. The simulations suggested that the unit power
requirement for the HPGR/ball mill circuit would be approximately 14.8 kWh/t for the
Sulphurets mineralization, compared to 10.4 kWh/t for the Mitchell mineralization.

Flotation Tests
In the 2009 testing program, G&T performed preliminary flotation tests to investigate the
responses of the Sulphurets ores to the flotation conditions established for the Mitchell
samples. As indicated in Table 13.37, the Sulphurets ore samples may produce higher
grade copper concentrates than the Mitchell samples. Composite 49 (Hazelton Volcanics
[HV]) has a lower level copper metallurgical performance compared to the other
composites (Raewyn Copper (RC)). This may result from the lower copper head grade in
the sample. The test results also showed that Composite 51 produced much lower gold
recoveries in the cleaning stage, compared to the other two samples.

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 Table 13.37 Batch Flotation Tests –Sulphurets, 2009 (G&T)
Head Recovery (%)
Conc.
Grade Size (µm) Rougher Cleaner
Sample ID/ Cu Au Grade
Rock Type Test ID Primary Regrind (%) (g/t) Cu (%) Cu Au Cu Au
Comp 49/HV Test 10 132 12 0.14 0.26 27.8 81.3 79.1 75.6 54.3
Test 34 114 11 0.14 0.26 26.3 75.0 78.6 68.2 50.7
Comp 50/RC Test 11 102 11 0.26 0.66 29.4 89.5 77.9 86.3 67.4
Test 35 102 12 0.26 0.66 28.9 88.7 85.6 83.3 68.9
Comp 51/RC Test 12 127 15 0.37 0.81 28.6 91.1 76.6 87.6 44.2
Test 36 117 15 0.37 0.81 29.8 92.5 84.5 89.2 47.1

The 2009/2010 SGS testing program involved bench open circuit tests and a LCT on a
composite generated from the Sulphurets deposit. The tested flowsheet is similar to that
used by G&T except for the addition of CMC, which is used to suppress clay minerals. It
appeared that fine primary grind size may improve metal recovery and that the addition
of CMC may also improve final concentrate grade.

The batch open circuit tests are summarized in Figure 13.29.

Figure 13.29 Batch Flotation Tests –Sulphurets, 2009 (SGS)

Both G&T and SGS conducted LCTs on the composites generated from the Sulphurets
samples. Table 13.38 summarizes the flotation LCT results.

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Table 13.38 Locked Cycle Test Results – Sulphurets
Grade Flotation Recovery (%)
Primary/
Regrinding Mass Cu Au Ag Mo
Test Program Composite Product Size (P80 µm) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
SGS Composite Head 125/20 100.0 0.20 0.66 - 0.007 100.0 100.0 - 100.0
Cu/Mo Concentrate 0.75 22.7 49.1 - 0.630 85.7 56.1 - 66.6
Bulk Cleaner Tailing - - - - - - - - -
+Au-Pyrite Concentrate 17.3 0.08 1.31 - 0.008 6.73 34.3 - 20.3
G&T 2670/44 Master Head 154/16 100.0 0.24 0.52 1.6 0.006 100.0 100.0 100.0 100.0
Composite Cu/Mo Concentrate 0.7 28.3 41.8 82.0 0.701 80.5 53.9 34.3 72.2
(Comp49/50/51)
Bulk Cleaner Tailing 6.3 0.13 1.94 - 0.016 3.5 23.5 - 15.1
Au-Pyrite Concentrate 2.9 0.38 1.41 - 0.013 4.7 7.9 - 5.7
G&T 2897/22 Master Head 113/- 100.0 0.24 0.50 1.5 0.008 100.0 100.0 100.0 100.0
Composite Cu/Mo Concentrate 0.70 28.4 41.6 71.4 0.850 79.4 55.6 31.5 68.5
(Comp49/50/51)
Bulk Cleaner Tailing 6.3 0.17 1.82 4.2 0.013 4.5 23.0 17.5 9.9
Au-Pyrite Concentrate 4.0 0.35 1.15 3.5 0.011 6.0 9.3 9.5 5.4
G&T 3174/8 Composite 8 Head 121/19 100.0 0.46 0.70 1 0.008 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.3 29.3 31.4 34 0.227 83.6 58.6 31.1 37.7
Bulk Cleaner Tailing 9.2 0.37 2.2 1 0.044 7.3 28.9 6.4 51.4
Au-Pyrite Concentrate 6.7 0.26 0.67 1 0.005 3.8 6.4 4.7 4.4
G&T 3174/9 Composite 9 Head 127/21 100.0 0.16 0.59 2 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.4 26.0 63.7 130 0.170 60.6 40.1 21.3 14.1
Bulk Cleaner Tailing 5.6 0.82 3.55 11 0.055 28.8 33.7 28.4 68.6
Au-Pyrite Concentrate 6.7 0.12 1.26 4 0.004 4.8 14.3 11.8 5.4

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 The SGS tests produced higher copper recoveries at lower concentrate grades than the
G&T tests: 85.7% recovery at 22.7% copper grade versus 76% recovery at 28% copper
grade. The test on Composite 9 produced a much lower copper recovery compared to
the other tests. This could be the result of the low head grade of the Hazelton sample.
Further tests should be conducted to investigate the copper metallurgical performance of
the mineralization. The average gold recovery for both groups of tests was approximately
56%, excluding a much lower gold recovery from the Hazelton sample. Silver recovery
obtained in the tests at G&T averaged 30%. Molybdenum reporting to the bulk
concentrate averaged at 69% for the 2009 test samples, but only 26% for the
2011/2012 samples.

As shown in Table 13.23 for the locked cycle flotation test results, the metallurgical
performances of the Mitchell-Sulphurets blend sample (60% Mitchell and 40%
Sulphurets) were very similar to those achieved with the Mitchell mineralization alone.

Cyanide Leach Tests

The gold-bearing products, first cleaner tails, and pyrite concentrate from the flotation
tests, were subjected to cyanide leaching to recover gold. On average, the gold in the
mineralization was more difficult to recover in comparison with the Mitchell
mineralization. The Composite 51 sample showed a less favourable metallurgical
response to the cyanidation. The results are shown in Table 13.39.

Table 13.39 Average Cyanidation Test Results – Sulphurets, 2009 (G&T)

Gold Extraction (%)
Leach Head
Composite ID Mineralization Type (Au g/t) 6 h* 24 h*
Comp 49 Hazelton Volcanics 0.80 45.5 55.5
Comp 50 Raewyn Copper 0.97 65.5 70.9
Comp 51 Raewyn Copper 2.20 20.3 21.4
Average - 1.32 43.8 49.2
Note: *leach retention time.

Both G&T and SGS conducted cyanidation tests on the products produced from the
locked cycle flotation tests.

The test results are provided in Table 13.40. In general, the Sulphurets samples
produced lower gold and silver extractions, in comparison with the Mitchell samples. The
best gold extraction obtained was 70.5% by SGS using the CIL leach procedure. The
direct cyanide leach test produced inferior results.

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 Table 13.40 Cyanidation Test Results – Flotation LCT Products, Sulphurets, 2009–2011
Regrind
Size Feed Extraction Feed Extraction
Test Program Sample (P80 µm) (Au g/t) (Au %) (Ag g/t) (Ag %)
G&T-2670 Master Composite 16 1.7 40.9 3.7 52.4
G&T 2897 Master Composite - 1.5 34.5 3.3 47.9
Composite 8 - 2011/2012 Raewyn CV 25 1.6 41.7
Composite 9 - 2011/2012 Lower Hazelton 19 2.5 68.3
SGS (DCN) Composite - 1.6 51.5 - -
SGS (CIL) Composite - 1.3 70.5 - -

KERR MINERALIZATION
There are two mineralization zones in the Kerr deposit. The lower Kerr Zone
mineralization may be mined by underground block caving, while the upper Kerr Zone
material is anticipated to be mined by open pit methods. Early testwork focused on the
samples from the surface Kerr Zone. Since 2013, three test programs—KM3735,
KM4514, and KM4029—have been completed to investigate the metallurgical
performances of the mineralization from the lower Kerr, excluding an ongoing testwork
program.

Kerr Mineralization- Upper Kerr Zone

Four composite samples from the upper Kerr Zone, identified as Composites 52 and 53
in 2010 and Composite 10 and Composite 11 in 2011/2012, were prepared for
metallurgical testing from the drill core intervals. The metal assays of the composites are
provided in Table 13.41.

Table 13.41 Metal Contents of Composites – Upper Kerr, 2010 (G&T)

Metal Content
Cu Au Mo Ag
Composite Mineralization Type (%) (g/t) (%) (g/t)
Comp 52 - 2010 Rubble Zone 0.59 0.22 0.004 2.0
Comp 53 - 2010 Quartz Stockwork 0.61 0.17 0.001 1.5
Composite 10 – 2011/2012 CL Quartz Crackle 0.59 0.26 0.001 1.0
Composite 11 – 2011/2012 QSP Quartz Crackle 0.68 0.29 0.001 2.0
Notes: Rubble Zone: quartz, sericite, chlorite, pyrite altered rocks with anhydrite ± gypsum veinlets,
secondary chalcocite coatings, poor rock quality.
Quartz Stockwork: quartz, sericite, chlorite, pyrite altered rocks with crackled quartz stockwork
veinlets, mylonitized, relatively competent.
QSP Quartz Crackle: hosted by strongly deformed to schistose Stuhini Group volcanics, sediments,
and minor intrusives; silica and sericitic alteration; higher pyrite content; also with crackled quartz
stockwork veining; comprises about half of the resource and generally forms the periphery
surrounding the CL Quartz Crackle mineralization,
CL Quartz Crackle: hosted by strongly deformed to schistose Stuhini Group volcanics, sediments, and
minor intrusives; finely crackled or fractured quartz stockwork veining with sulfides; comprise just
under half of the resource and forms the core of the deposit,

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 Mineralization Hardness

The samples from the upper Kerr Zone are more amenable to ball mill grinding when
compared to the Mitchell and Sulphurets mineralization. As shown in Table 13.42, the
average Bond ball mill work index is 13.9 kWh/t. These results agree with the historical
test results summarized in 13.1.1.

Table 13.42 Bond Ball Mill Work Index Test Results – Upper Kerr (G&T)
Wi
Samples (kWh/t)
Composite 52 - 2010 13.8
Composite 53 - 2010 13.0
Composite 10 – 2011/2012 14.8
Composite 11 – 2011/2012 14.1
Average 13.9

The 2011/2012 testing program determined the grindability of the upper Kerr samples
to SAG mills. The test results revealed that the grindabilty of the upper Kerr samples to
SAG mill grinding is very similar to the samples from the Mitchell deposit. The results are
shown in Table 13.43.

Table 13.43 SMC Test Results – Upper Kerr, 2011/2012

Sample
Parameter Composite 10 Composite 11
SG 2.87 2.86
A 56.9 65.3
b 0.81 0.72
Axb 46.1 47.0
DWi (kWh/m3) 58 56
Mia (kWh/t) 17.3 17.0
Ta 0.41 0.42

Flotation Tests

The test conditions used for the Mitchell and Sulphurets samples were also used for the
composite samples collected from the Kerr deposit. The open circuit batch flotation tests
showed that the upper Kerr samples produced better concentrate grades than the
Mitchell or Sulphurets samples. Copper recovery produced was slightly lower than the
Mitchell or Sulphurets samples at equivalent copper concentrate tenor. Gold recovery for
the upper Kerr samples was lower because the gold head grades were considerably lower
than the samples from the other two ore deposits.

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 The LCT results, as presented in Table 13.44, indicate that the metallurgical performance
of the upper Kerr samples was not as good as that achieved with the Mitchell and
Sulphurets samples despite their lower copper head grades.

On average, the upper Kerr samples produced a 27.8% copper concentrate. The copper
and gold reporting to the concentrate were 83% and 41%, respectively. Approximately
51% of the gold reported to the gold-bearing pyrite products (first cleaner tailing and gold-
bearing pyrite concentrate). The 2011/2012 test program produced better metallurgical
performances from the samples tested, than what was achieved previously.

As shown in Table 13.23 for the locked cycle flotation test results, the metallurgical
performances of the Mitchell-Kerr blend sample (80% Mitchell and 20% upper Kerr) were
very similar to those achieved with the Mitchell mineralization alone.

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Table 13.44 Locked Cycle Test Results – Upper Kerr (G&T)
Primary/ Grade Flotation Recovery (%)
Regrinding Mass
Test Program Comp Product Size (P80 µm) (%) Cu (%) Au (g/t) Ag (g/t) Cu Au Ag
G&T 2535/16 Comp 52 Head 119/15 100.0 0.59 0.22 1.9 100.0 100.0 100.0
Cu/Mo Concentrate 2.1 22.3 4.05 33.5 81.6 38.8 37.6
Bulk Cleaner Tailing 7.9 0.43 0.97 6.3 5.7 34.2 26.0
Au-Pyrite Concentrate 7.7 0.39 0.62 4.2 5.2 21.5 17.0
G&T 2535/17 Comp 53 Head 122/14 100.0 0.62 0.25 1.4 100.0 100.0 100.0
Cu/Mo Concentrate 1.7 29.3 5.58 31.8 80.6 37.7 37.9
Bulk Cleaner Tailing 6.8 0.40 0.51 3.6 4.5 13.8 17.5
Au-Pyrite Concentrate 13.6 0.42 0.66 3.0 9.1 36.0 28.2
G&T 3174/10 Composite 10 Head 124/18 100.0 0.59 0.24 2 100.0 100.0 100.0
Cu/Mo Concentrate 1.7 30.7 7.2 49 86.3 49.7 39.8
Bulk Cleaner Tailing 10.3 0.39 0.72 3 6.7 30.8 17.4
Au-Pyrite Concentrate 10.4 0.16 0.38 1 2.8 16.3 5.1
G&T 3174/11 Composite 11 Head 130/19 100.0 0.69 0.24 3 100.0 100.0 100.0
Cu/Mo Concentrate 2.0 29.0 5.1 77 83.4 41.1 47.4
Bulk Cleaner Tailing 9.2 0.34 0.6 5 4.6 22.7 14.4
Au-Pyrite Concentrate 13.5 0.33 0.54 3 6.5 30.0 14.7

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 Leach Tests

G&T conducted the cyanidation tests on the first cleaner tailing and the gold-bearing
pyrite concentrate produced from the LCTs. The leaching procedure used was the same
as that used previously on the Mitchell samples. Test results are provided in Table
13.45.

Table 13.45 Cyanidation Test Results on LCT Test Products – Upper Kerr (G&T)
Regrind
Test Size Feed Extraction Feed Extraction
Program Sample (P80 µm) (Au g/t) (Au %) (Ag g/t) (Ag %)
G&T-2535 Comp 52 17 1.1 76.0 5.5 45.8
G&T 2535 Comp 53 15 0.6 59.7 3.2 18.7
G&T 3174 Composite 10 20 0.6 47.2
G&T 3174 Composite 11 20 0.6 45.6
Average – Upper Kerr 18 0.7 57.1 4.4 32.3

On average, gold extraction from both the gold-bearing products was approximately 57%,
slightly lower than the results obtained from the Mitchell samples. The average gold feed
grade to the cyanide leach circuit was lower in comparison with the cyanide leach feeds
of the Mitchell samples. The test results also indicated that the first cleaner tailing
produced slightly lower gold and silver recoveries compared to the gold-bearing pyrite
concentrate. The average silver extraction was 32%, which was lower than the average
extraction of 56% obtained from the Mitchell samples.

Kerr Mineralization- Lower Kerr Zone

As the various lower Kerr exploration annual drilling programs were completed,
preliminary metallurgical testing was performed on available core samples using the
basis 2012 PFS (Tetra Tech 2012) flow sheet parameters. Three test programs have
been completed at ALS Metallurgy Kamloops (Test Programs: KM3735, KM4029-B and
KM4514). The samples used were constructed from the various drill core intervals of the
lower Kerr Zone from the different drill programs. The samples for these previous test
programs were mainly generated from the areas adjoining to the proposed block caves
within the deposits. A total of 24 samples have been tested, including 11 composite
samples tested using LCT procedures. The head assay of the samples tested are shown
in Table 13.46.

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 Table 13.46 Metal Contents of Composites – Lower Kerr, 2013-2015 (ALS)
Metal Content
Cu Au Mo Ag
Sample (%) (g/t) (%) (g/t)
KM3735/DK-2012-03 0.92 0.32 0.004 5
KM4029/DK-2013-01* 0.53 0.34 0.008 2
KM4029/DK-2013-02* 0.41 0.27 0.006 1
KM4029/DK-2013-03* 0.47 0.89 0.008 4
KM4029/DK-2013-04* 0.79 0.53 0.005 2
KM4029/DK-2013-05* 1.75 1.04 0.004 3
KM4029/DK-2013-06* 1.41 0.63 0.005 4
KM4514/DK-2014-01 0.86 0.76 0.003 1
KM4514/DK-2014-02 0.55 0.54 0.003 1
KM4514/DK-2014-03 0.25 0.24 0.004 1
KM4514/DK-2014-04 0.44 0.37 0.005 <1
KM4514/DK-2014-05 0.42 0.31 0.004 <1
KM4514/DK-2014-06 0.68 0.45 0.002 1
KM4514/DK-2014-07 0.66 0.22 0.007 2
KM4514/DK-2014-08 0.46 0.21 0.009 2
KM4514/DK-2014-09 0.32 0.12 0.006 1
KM4514/DK-2014-10 0.51 0.20 0.006 <1
KM4514/DK-2014-11 0.62 0.22 0.007 1
KM4514/DK-2014-12 0.52 0.38 0.004 4
KM4514/DK-2014-MC1* 0.50 0.41 0.004 1
KM4514/DK-2014-MC2* 0.48 0.20 0.006 3
KM4514/DK-2014-MC3* 0.51 0.28 0.004 2
KM4514/DK-2014-MC4* 0.54 0.44 0.003 1
KM4514/DK-2014-MC5* 0.46 0.21 0.005 3
Note: *tested with LCT procedure

Increased drilling campaigns over the last couple of years will allow Seabridge to plan
and complete a metallurgical testing program (KM5063) on samples representative of
the planned lower Kerr underground mining blocks. This metallurgical work is currently
underway and is expected to be advanced in 2017. A total of 22 samples, including five
composites, are currently being tested at ALS Metallurgy Kamloops.

The preliminary testwork from these completed test programs showed that these widely
spaced lower Kerr exploration samples responded well to the flotation flowsheet
developed previously for the Project. The preliminary testwork from the ongoing testwork
being conducted shows some variations in metallurgical response were noted. It appears
that the samples from the proposed upper cave areas may have a similar metallurgical
performance as the samples collected from the proposed Kerr open pit area, while the
lower caves samples may behave more similarly to the samples of the lower Kerr Zone
tested by the previous three test programs.

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 Flotation Tests

Three of the testing programs used open batch floatation test procedure to investigate
the metallurgical responses of the lower Kerr samples to the flowsheet developed for the
Mitchell and the other deposits, including some preliminary variability tests. The flow
sheet and test conditions used for these tests are similar to those used for the other
deposits or zones of the Project, including conventional flotation to produce a copper-
gold-molybdenum bulk concentrate, with cyanide leach testing to further recover gold and
silver from the cleaner flotation tailings and the gold-bearing pyrite concentrate. A copper
scavenging flotation was added to float copper minerals from the gold bearing pyrite
concentrate prior to cyanidation. The KM4029-B and KM4514 test programs also
conducted locked-cycle flotation tests to further evaluate the metallurgical performance
of the composite samples constructed. The LCT results are shown in Table 13.47.

The LCT results show that these lower Kerr mineralization responds well to the flow sheet
proposed for the Project. Copper recovery ranged from 86 to 97% and gold recovery
varied from 55 to 77%. The flotation concentrate grades were in a range of between 22
and 29% copper.

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Table 13.47 Flotation Locked Cycle Test Results – Lower Kerr

Grade Recovery (%)

Grind Size Mass Cu Au Ag Mo
Test Sample Product (P80 µm*) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
KM4029-22 DK2013-01 Head 118/15/15 100.0 0.59 0.36 1.9 0.007 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 2.2 25.3 11.5 36.5 0.243 92.7 69.2 41.0 78.1
Bulk Cleaner Tailing 15.0 0.14 0.52 2.0 0.003 3.7 21.8 15.7 5.6
Au-Pyrite Concentrate 7.4 0.08 0.23 1.0 0.005 1.0 4.8 3.9 5.0
KM4029-23 DK2013-02 Head 119/15/11 100.0 0.44 0.23 2.0 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.6 24.4 9.0 48.0 0.157 90.6 62.6 40.0 67.4
Bulk Cleaner Tailing 16.5 0.09 0.29 2.0 0.002 3.4 20.3 16.9 8.7
Au-Pyrite Concentrate 4.5 0.11 0.37 1.5 0.003 1.1 7.1 3.5 3.6
KM4029-18 DK2013-03 Head 121/14/10 100.0 0.50 0.94 4.0 0.007 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.9 23.0 32.9 136 0.215 89.7 68.2 65.3 59.4
Bulk Cleaner Tailing 20.3 0.12 0.73 4.0 0.004 4.7 15.8 20.2 13.0
Au-Pyrite Concentrate 9.8 0.04 0.45 2.5 0.013 0.9 4.7 6.0 18.0
KM4029-17 DK2013-04 Head 116/16/- 100.0 0.86 0.50 2.0 0.003 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 3.0 26.3 9.5 46.0 0.068 91.2 55.8 69.9 58.6
Bulk Cleaner Tailing 20.4 0.10 0.81 1.0 0.003 2.4 33.0 10.5 17.4
Au-Pyrite Concentrate 14.6 0.23 0.22 0.5 0.001 4.0 6.3 3.7 6.0
KM4029-16 DK2013-04 Head 116/15/11 100.0 0.82 0.50 2.4 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 2.9 26.3 10.6 48.0 0.071 93.6 61.5 58.3 54.8
Bulk Cleaner Tailing 21.8 0.11 0.70 2.0 0.003 2.9 30.3 18.1 17.3
Au-Pyrite Concentrate 12.8 0.04 0.18 2.0 0.003 0.6 4.5 10.6 11.4
KM4029-26* DK2013-05 Head 127/23/10 100.0 1.83 0.93 3.3 0.002 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 6.18 28.7 11.2 43.5 0.010 96.6 74.7 80.5 26.4
Bulk Cleaner Tailing 15.80 0.20 0.82 1.5 0.004 1.7 14.0 7.2 26.9
Au-Pyrite Concentrate 4.00 0.09 0.34 1.0 0.008 0.2 1.5 1.2 13.9
table continues…

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 Grade Recovery (%)
Grind Size Mass Cu Au Ag Mo
Test Sample Product (P80 µm*) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
KM4029-24* DK2013-05 Head 127/30/11 100.0 1.81 0.93 3.1 0.002 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 7.7 22.8 9.4 33.8 0.006 96.6 77.1 82.6 29.6
Bulk Cleaner Tailing 16.9 0.18 0.90 1.0 0.002 1.7 16.4 5.4 22.1
Au-Pyrite Concentrate 6.1 0.07 0.15 0.5 0.007 0.2 1.0 1.0 24.4
KM4029-25 DK2013-06 Head 128/15/9 100.0 1.44 0.67 3.4 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 4.7 28.4 9.3 50.0 0.039 92.7 65.5 69.2 50.4
Bulk Cleaner Tailing 16.4 0.18 0.78 3.0 0.003 2.1 19.1 14.5 14.7
Au-Pyrite Concentrate 7.9 0.14 0.66 2.5 0.007 0.8 7.8 5.8 15.3
KM4514-23 DK-2014-MC3 Head 124/16/15 100.0 0.52 0.32 2 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 2.0 23.5 10.2 55 0.164 91.4 65.9 58.5 76.4
Bulk Cleaner Tailing 18.2 0.11 0.43 2 0.002 4.0 24.8 19.0 9.3
Au-Pyrite Concentrate 6.8 0.06 0.11 1 0.002 0.7 2.4 3.5 2.6
KM4514-24 DK-2014-MC1 Head 121/16/18 100.0 0.55 0.42 2 0.003 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 2.0 24.7 14.8 36 0.091 91.3 72.6 48.7 62.8
Bulk Cleaner Tailing 16.5 0.16 0.50 2 0.003 4.8 19.6 21.8 15.1
Au-Pyrite Concentrate 7.7 0.06 0.13 1 0.001 0.8 2.5 5.1 3.0
KM4514-25 DK-2014-MC2 Head 126/16/16 100.0 0.51 0.21 3 0.005 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.7 26.4 7.3 74 0.210 86.1 56.9 46.3 67.1
Bulk Cleaner Tailing 15.8 0.22 0.44 5 0.005 7.0 32.6 26.9 16.8
Au-Pyrite Concentrate 7.1 0.10 0.15 2 0.002 1.4 5.1 5.4 3.1
KM4514-26 DK-2014-MC4 Head 115/16/16 100.0 0.57 0.47 1 0.003 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.9 27.4 18.6 34 0.104 89.5 73.8 48.4 67.1
Bulk Cleaner Tailing 16.8 0.22 0.57 1 0.003 6.6 20.5 18.8 16.4
Au-Pyrite Concentrate 8.4 0.06 0.19 1 0.001 0.9 3.4 4.8 3.7
table continues…

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 Grade Recovery (%)
Grind Size Mass Cu Au Ag Mo
Test Sample Product (P80 µm*) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
KM4514-27 DK-2014-MC5 Head 128/16/16 100.0 0.50 0.24 3 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.6 26.9 8.8 99 0.266 88.5 59.1 63.9 74.7
Bulk Cleaner Tailing 16.5 0.17 0.44 3 0.004 5.6 29.5 19.4 11.7
Au-Pyrite Concentrate 6.7 0.06 0.14 1 0.002 0.8 3.7 1.9 2.5
ALS Mitchell Head 100.0 0.37 0.59 3 0.006 100.0 100.0 100.0 100.0
4514/31** (Mitchell Yr 0- Cu/Mo Concentrate 1.31 24.5 28.3 150 0.328 87.9 62.8 57.2 75.1
5)/ Kerr (DK- 129/17/17
Bulk Cleaner Tailing 10.6 0.13 1.07 5 0.004 3.6 19.1 15.4 7.4
2014-MC3)
Au-Pyrite Concentrate 6.16 0.10 0.41 2 0.003 1.7 4.3 3.6 3.2
Note: *Repeat tests, the cleaner flotation for Test 26 was conducted on more diluted slurry (using a larger flotation cell

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 Leach Tests

ALS conducted the cyanidation tests on the first cleaner tailing and the gold-bearing
pyrite concentrate produced from the LCTs. The leaching procedure used was similar to
that used in the previous test programs. Test results are provided in Table 13.48

Table 13.48 Preliminary Cyanidation Test Results – Lower Kerr

Extraction*
Test Sample Gold (%) Silver (%)
KM4029-29 Test 22,23 Bulk Cleaner Scavenger Tailings 72.6 86.2
KM4029-30 Test 22,23 Gold Bearing Pyrite Concentrate 77.2 90.8
KM4029-31 Test 16,18 Bulk Cleaner Scavenger Tailings 59.1 76.5
KM4029-32 Test 16,18 Gold Bearing Pyrite Concentrate 73.9 91.2
KM4029-33 Test 24,25 Bulk Cleaner Scavenger Tailings 57.5 73.1
KM4029-34 Test 24,25 Gold Bearing Pyrite Concentrate 72.2 n/a
KM4514-33 Bulk Cleaner Scavenger Tailings 64.2 82.6
KM4514-34 Gold Bearing Pyrite Concentrate 77.8 70.8
KM4514-35 Bulk Cleaner Scavenger Tailings 68.1 56.9
KM4514-36 Gold Bearing Pyrite Concentrate 72.9 78.9
KM4514-37 Bulk Cleaner Scavenger Tailings 66.3 78.2
KM4514-38 Gold Bearing Pyrite Concentrate 68.4 54.3
KM4514-39 Bulk Cleaner Scavenger Tailings 58.2 75.7
KM4514-40 Gold Bearing Pyrite Concentrate 63.7 72.1
KM4514-41 Bulk Cleaner Scavenger Tailings** 56.6 71.9
KM4514-42 Gold Bearing Pyrite Concentrate** 67.1 71.8
Note: *cyanide concentration: 1,000 ppm; pH: 11; carbon addition: 28 g/L;
** Mitchell (Mitchell Year 0-5)/ Kerr (DK-2014-MC3)

The gold extractions by cyanide leaching (CIL procedure) fluctuated from 56 to 73% for
the bulk cleaner scavenger tailings and from 63 to 78% for the gold bearing pyrite
concentrates.

IRON CAP MINERALIZATION

Test Samples
The 2010 test work conducted metallurgical tests on two composite samples generated
from a total of 168 samples weighing a total of approximately 689 kg. In 2014 and
2015, further test work was conducted on the samples from the lower Iron Cap Zone.
The assays of the head samples are provided in Table 13.49.

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 Table 13.49 Metal Contents of Composites – Iron Cap, 2010 (G&T)
Metal Content
Cu (T) Cu (ox) Cu (CN) Au Mo Ag S
Composite (%) (%) (%) (g/t) (%) (g/t) (%)
IC 2010 Composite 1 0.14 0.001 0.015 1.06 0.002 6 4.5
IC 2010 Composite 2 0.36 0.004 0.023 0.32 0.003 5 3.6
Iron Cap Blend 0.25 - - 0.75 0.003 3.7
IC-2013-01 0.24 - - 0.59 0.008 3 2.4
IC-2013-02 0.25 - - 0.49 0.007 4 3.3
IC-2013-03 0.22 - - 0.28 0.003 4 2.2
IC-2014-01 0.47 - - 0.28 0.007 10 3.7
IC-2014-02 0.38 - - 0.11 0.003 4 4.0
IC-2014-03 0.17 - - 0.47 0.002 2 2.6
IC-2014-04 0.30 - - 1.08 0.001 3 3.2
IC-2014-05 0.31 - - 0.39 0.007 1 1.7
IC-2014-06 0.25 - - 0.33 0.004 4 2.4
IC-2014-07 0.44 - - 1.27 0.002 4 3.7
IC-2014-08 0.33 - - 1.72 0.002 4 3.3
IC-2014-09 0.41 - - 0.16 0.007 5 2.3
IC-2014-10 0.18 - - 0.34 0.002 1 1.3
IC-2014-11 0.16 - - 0.34 0.002 2 2.1
IC-2014-12 0.25 - - 0.47 0.002 9 3.6
IC-2014-13 0.23 - - 0.26 0.004 2 1.6
IC-2014-14 0.36 - - 0.47 0.005 3 2.1
IC-2014-15 0.19 - - 0.66 0.003 2 2.5
IC-2014-MC1 0.34 0.008 0.020 0.63 0.003 5 3.1
IC-2014-MC2 0.26 0.005 0.018 0.46 0.004 4 2.5
IC-2014-MC3 0.16 0.003 0.010 0.35 0.002 2 1.8
IC-2014-MC4 0.30 0.005 0.018 0.52 0.004 4 2.8

The assay results indicate that arsenic and antimony contents range from 21 to 234 ppm
for arsenic and from 1 to 201 ppm for antimony. Samples IC-2014-01 and IC-2014-12
show elevated arsenic content of 170 and 234 ppm and antimony content of 201 and
87 ppm.

The drill hole distribution and sample locations for these 2015 test samples are shown in
Figure 13.30.

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 Figure 13.30 Sample Locations – 2015 Test Work

Mineralogy
In 2010 the mineral content, in each of the two master composites, was determined
using the Bulk Mineral Analysis with Liberation (BMAL) function within Quantitative

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 Evaluation of Minerals by Scanning (QEMSCAN®). The results of the BMAL analysis
indicated that:

 Both composites analyzed contained about 6 to 8% sulphide minerals. The

dominant sulphide mineral present was pyrite. The balance of each sample,
about 93%, was comprised of non-sulphide gangue minerals consisting of
quartz, feldspar, and muscovite.
 Copper is mostly contained in chalcopyrite. Composite 1 also contained
chalcocite/covellite and tennantite/tetrahedrite at approximately 4 and 5% of
the feed copper respectively.

The 2015 mineralogical determination was conducted on Composite IC-2014-MC4. The

estimated mineral contents are shown in Table 13.50. The sulphide minerals in the
sample are approximately 6.3%. Most of the sulphide minerals are in the form of pyrite.
Feldspars, micas, and quartz are the main gangue minerals.

Table 13.50 Mineral Content – Sample IC-2014-MC4 - Iron Cap, 2014 (ALS)
Mineral Content
Minerals (Wt %)
Chalcopyrite 0.9
Bornite <0.1
Chalcocite/Covellite <0.1
Tennantite/Enargite <0.1
Pyrite 5.4
Iron Oxides 0.1
Quartz 18.3
Micas 25.6
Chlorite 1.8
Feldspars 44.7
Titanium Minerals 0.3
Carbonates 0.7
Kaolinite (clay) 0.2
Apatite 0.8
Calcium-sulphate <0.1
Others 1.1
Notes: Iron oxides includes limonite, goethite, hematite and magnetite.
Micas include muscovite and biotite/phlogopite.
Feldspars includes K-feldspar, feldspar albite, alkali feldspar and plagioclase feldspar.
Titanium minerals includes rutile/anatase and minor amounts of sphene.
Carbonates includes calcite, ankerite and dolomite.
Others includes trace amounts of barite, sphalerite, and unresolved mineral species.

Mineralization Hardness
The 2010 grindability determination tests on the two composite samples from the Iron
Cap deposit showed that the mineralization is of moderate hardness to ball mill grinding.
The Bond ball mill work indices of both the samples are 14.9 kWh/t.

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 The IC-2014-MC4 master composite tested by the 2015 test work shows a slightly higher
Bond ball mill work index of 16.5 kWh/t. The Ai was measured to be 0.099 g. The
program also tested the grindability of the sample to SAG mill grinding using the SMC
procedure. The results show that the SMC parameters are: A = 68.7, b = 0.54, and Axb =
37.1.

Flotation Tests
The test conditions used for the Mitchell samples were tested for the two composite
samples from the Iron Cap deposit. The open circuit batch flotation tests conducted in
2010 showed that the Iron Cap mineralization was not sensitive to the primary grind
sizes ranging from 80% passing 120 µm to 170 µm. In 2015, rougher flotation tests were
performed on Composite IC-2014-MC4 to investigate the effect of primary grind size on
copper and gold recovery. The grind size ranged from 80% passing between 89 and
171 µm. It appears that copper and gold recoveries improved when the grind size got
finer. The test results are depicted in Figure 13.31 and Figure 13.32.

Figure 13.31 Copper Recovery vs Rougher Mass Recovery and Grind Size - Iron Cap, 2015
(ALS)

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 Figure 13.32 Gold Recovery vs Rougher Mass Recovery and Grind Size - Iron Cap, 2015
(ALS)

Cleaner flotation tests on four master composite samples showed a very similar copper
metallurgical performance although there were some variations in gold performance.
The test results are summarized in Figure 13.33 and Figure 13.34. Copper grades in the
bulk concentrates produced from the four Iron Cap master composites averaged
approximately 27.7%. Copper and gold recovery to the bulk cleaner concentrates
averaged approximately 77% and 61%, respectively.

Figure 13.33 Copper Cleaner Flotation Performance - Iron Cap, 2015 (ALS)

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 Figure 13.34 Gold Cleaner Flotation Performance - Iron Cap, 2015 (ALS)

As shown in Figure 13.35 and Figure 13.36, copper recoveries to the bulk concentrates
for the fifteen Iron Cap variability samples ranged from 74 to 85% and averaged
approximately 81%. The bulk concentrate grades ranged from approximately 25 to 30%
copper, averaging approximately 27% copper. Variation in gold recovery was observed.
On average, approximately 57% of the gold was recovered to the final cleaner
concentrates.

Figure 13.35 Variability Test Results - Copper - Iron Cap, 2015 (ALS)

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 Figure 13.36 Variability Test Results - Gold - Iron Cap, 2015 (ALS)

The flotation LCT results are provided in Table 13.51. On average, the samples tested in
2010 produced a 25.7% copper concentrate. The copper and the gold reporting to the
concentrate were 85% and 51%, respectively. On average, approximately 39% of the
gold reported to the gold-bearing pyrite products (first cleaner tailing and gold-bearing
pyrite concentrate).

The 2014/2015 locked cycle flotation tests on the master composite samples produced
fairly consistent results. Between 81 to 88% of the copper in the feed was recovered to a
bulk concentrate grading between approximately 22 to 27% copper. On average,
approximately 85.2% of the copper and 64.4% of the gold in the feed were recovered into
the bulk concentrates. The gold reporting to the gold-bearing pyrite products (first
cleaner tailing and gold-bearing pyrite concentrate) was approximately 29% of the gold.
The averaged silver recovery to the flotation concentrate was 56.6%.

The results indicate that the copper recoveries from the Iron Cap samples were
comparable to the Mitchell mineralization. It was concluded that the gold recoveries to
the concentrates from the 2012 samples were lower than these achieved with the
Mitchell mineralization; however, the 2014/2015 test work produced better gold
recoveries to the flotation concentrates and the results are in line with the Mitchell
mineralization. The averaged silver recovery to the flotation concentrate is slightly higher
than the recovery achieved from the Mitchell mineralization. On average, approximately
61% of the molybdenum from the Iron Cap’s samples reported to the final bulk
concentrate.

As shown in Table 13.23, the Mitchell and Iron Cap blended samples did not show
detrimental effects of the blending on the metallurgical responses.

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Table 13.51 Locked Cycle Test Results – Iron Cap
Grade Flotation Recovery (%)
Primary/
Regrinding Mass Cu Au Ag Mo
Test Program Composite Product Size (P80 µm) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
G&T 2748/11 Iron Cap 2010 Head 150/15 100.0 0.14 1.28 6 0.002 100.0 100.0 100.0 100.0
Composite1 Cu/Mo Concentrate 0.5 25.4 147 774 0.180 81.6 55.2 61.0 37.9
Bulk Cleaner Tailing 10.4 0.06 2.17 11.6 0.004 3.8 17.6 20.1 18.0
Au-Pyrite Concentrate 7.9 0.11 1.88 6.6 0.002 5.9 11.7 8.7 8.6
G&T 2748/12 Iron Cap 2010 Head 147/22 100.0 0.38 0.31 5 0.003 100.0 100.0 100.0 100.0
Composite2 Cu/Mo Concentrate 1.3 24.9 10 255 0.115 88.1 45.0 62.0 55.2
Bulk Cleaner Tailing 10.5 0.06 1.21 7.9 0.003 1.7 40.7 16.6 11.2
Au-Pyrite Concentrate 6 0.25 0.57 5.2 0.002 4 11.1 6.2 4.3
G&T 2748/17 50%Comp 1: Head 108/19 100.0 0.26 0.82 - 0.003 100.0 100.0 - 100.0
50%Comp 2 Cu/Mo Concentrate 0.8 26.7 51.9 - 0.144 85.2 53.3 - 41.5
Bulk Cleaner Tailing 10.9 0.06 1.82 - 0.005 2.4 24.2 - 17.7
Au-Pyrite Concentrate 7.3 0.16 1.37 - 0.003 4.4 12.1 - 6.2
Head 100.0 0.25 0.56 3 0.006 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.8 26.7 50.4 179 0.481 83.4 71.4 48.4 69.0
ALS 4029/19 IC-2013-01 117/16/7
Bulk Cleaner Tailing 16.5 0.10 1.71 4 0.003 10.8 21.6 22.5 12.8
Au-Pyrite Concentrate 5.8 0.06 0.08 1 0.004 1.3 0.8 2.9 4.3
Head 100.0 0.26 0.51 4 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.0 22.9 36.4 273 0.238 85.4 68.4 62.8 64.4
ALS 4029/20 IC-2013-02 119/17/11
Bulk Cleaner Tailing 16.2 0.13 0.88 5 0.002 7.0 27.6 17.4 10.5
Au-Pyrite Concentrate 6.4 0.06 0.08 1 0.002 1.5 1.0 1.5 3.6
Head 100.0 0.23 0.24 4 0.003 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.9 23.4 14.8 258 0.205 87.5 53.4 56.3 56.4
ALS 4029/21 IC-2013-03 130/15/11
Bulk Cleaner Tailing 14.1 0.07 0.61 6 0.003 4.6 35.1 21.1 10.0
Au-Pyrite Concentrate 5.4 0.04 0.15 2 0.005 1.0 3.4 2.7 8.8
table continues…

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 Grade Flotation Recovery (%)
Primary/
Regrinding Mass Cu Au Ag Mo
Test Program Composite Product Size (P80 µm) (%) (%) (g/t) (g/t) (%) Cu Au Ag Mo
ALS 4514/30 IC-2014-MC1 Head 125/14/14* 100.0 0.33 0.69 4 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.1 25.4 41.5 230 0.238 87.1 67.8 60.1 70.3
Bulk Cleaner Tailing 12.3 0.15 1.12 7 0.003 5.6 20.0 18.6 9.7
Au-Pyrite Concentrate 5.2 0.09 0.29 2 0.003 1.4 2.1 2.4 4.1
ALS 4514/29 IC-2014-MC2 Head 127/14/16* 100.0 0.25 0.45 4 0.004 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.9 23.4 29.3 275 0.311 85.7 59.1 56.0 76.2
Bulk Cleaner Tailing 11.4 0.14 1.28 9 0.003 6.4 32.2 22.9 9.2
Au-Pyrite Concentrate 6.9 0.05 0.28 2 0.002 1.5 4.2 3.1 3.7
ALS 4514/31 IC-2014-MC3 Head 124/16/18* 100.0 0.16 0.32 2 0.002 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 0.6 22.6 37.6 139 0.187 81.4 67.9 47.4 62.9
Bulk Cleaner Tailing 8.5 0.13 0.89 5 0.002 7.0 23.1 22.2 9.7
Au-Pyrite Concentrate 4.5 0.07 0.27 2 0.001 2.0 3.7 5.2 2.6
ALS 4514/25 IC-2014-MC4 Head 124/14/15* 100.0 0.28 0.56 4 0.003 100.0 100.0 100.0 100.0
Cu/Mo Concentrate 1.0 24.9 36.2 250 0.257 85.7 62.9 65.1 73.6
Bulk Cleaner Tailing 14.3 0.15 1.03 6 0.003 7.6 26.3 22.9 12.0
Au-Pyrite Concentrate 5.0 0.05 0.19 1 0.002 0.8 1.7 1.3 2.4
Note: *including a copper flotation on the pyrite flotation concentrate

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 Cyanide Leach Tests
G&T conducted cyanidation tests on the first cleaner tailing and the gold-bearing pyrite
concentrate produced from the LCTs. The leaching procedure used was developed from
the Mitchell samples. Test results are provided in Table 13.52.

Table 13.52 Cyanidation Test Results on LCT Test Products – Iron Cap
Regrind
Testing Size Feed Extraction Feed Extraction
Program Sample (P80 µm) (Au g/t) (Au %) (Ag g/t) (Ag %)
G&T-2748 Iron Cap Comp1 14 1.9 49.7 9.4 62.8
G&T-2748 Iron Cap Comp2 15 1.1 40.4 6.9 56.8
G&T-2748 50% Comp1/50% Comp2 16 1.5 48.6 - -
ALS-4029 IC-2013-01/02/03 Cl.Sc.Tls 16 0.8 45.8 4.4 70.7
ALS-4029 IC-2013-01/02/03 Py Conc 10 0.2 54.7 1.6 87.4
ALS-4672 IC-2014-MC1 Cl.Sc.Tls 14 1.1 46.7 6 68.0
ALS-4672 IC-2014-MC2 Cl.Sc.Tls 14 1.2 29.2 7 69.7
ALS-4672 IC-2014-MC4 Cl.Sc.Tls 14 1.1 40.1 6 60.5
ALS-4672 IC-2014-MC1 Py Conc 14 0.4 50.6 3 57.2
ALS-4672 IC-2014-MC2 Py Conc 16 0.3 36.3 2 72.0
ALS-4672 IC-2014-MC4 Py Conc 15 0.1 74.9 5 73.2
Average – Iron Cap 15 1.0 46.8 5.6 66.5

On average, the gold extraction from both the gold-bearing products was approximately
47%. The test results also indicated that both the first cleaner tailing and the gold-
bearing pyrite concentrate produced lower gold recoveries compared to the other
mineralization, especially the first cleaner tailing. The average gold feed grade to the
cyanide leach circuit was lower in comparison with the cyanide leach feeds of the
Mitchell samples. The average silver extraction was high, averaging 67%, which is higher
than the average extraction of 56% obtained the Mitchell samples.

The mineralogical study by Surface Science Western on the leaching residues found that
the residual gold is present in colloidal type sub-microscopic gold, mainly in pyrite, which
occurs in coarse and porous types. Surface Science Western pointed out that the pre-
treatment by pressure or bio-oxidation would be required to release this locked gold.

FLOTATION CONCENTRATE ASSAY

The multi-element assay data are provided in Table 13.53 to Table 13.55 for the
concentrates from these deposits. On average, the impurities in the copper-gold
concentrates produced from the Mitchell, Sulphurets, and Kerr deposits should not
attract smelting penalties as set out by most smelters.

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Table 13.53 Multi-Element Assay – Mitchell Concentrate*
Mitchell
2670/ 3081/82 3081/93** 4514/30
2153/142 2344/73 2535/18 2535/20 SGS/LCT1 2670/18 Pilot Plant Comp Comp Mitchell
Element Unit Master Comp Comp PP1 Comp PP1 Comp PP1 Comp PP1 Comp PP3 Comp PP3 Y0-20 Y0-10 Y0-5
Cu % 22.0 22.3 28 23.8 23.1 27.4 25.7 23.8 27.1 26.7
Au g/t 64.7 55.7 77.8 62.0 53.7 70.5 65.5 44.2 58.5 98.2
Ag g/t 257 - 260 248 - 275 304 223 427 431
Mo % - 0.23 0.12 0.12 0.41 0.62 0.33 0.24 0.33 0.72
S (T) % 33.4 34.4 34.7 32.9 38.1 34.5 31.1 35.3 34.2 35.0
S (-2) % - - 32.9 32.1 - 33.3 28.7 - - -
Fe % 26.8 30.8 29.6 30.7 32.7 30.1 27.6 32.6 30.9 28.0
Sb ppm 696 698 539 597 - 466 338 210 1,100 1,182
As ppm 1,184 934 824 878 - 1174 821 690 2,044 2,080
Co ppm 48 76 52 52 - 68 56 84 62 30
Cd ppm 72 44 60 84 - 88 80 54 112 79
Bi ppm 36 43 150 127 - <10 <10 <20 <20 24
Hg ppm 0.6 <1 <1 <1 - 1 <1 <1 <1 6.8
Ni ppm 120 240 112 156 - 48 80 70 66 41
F ppm 346 150 100 148 - 89 230 69 129 249
Cl ppm - - - - - <0.01 <0.01 - - -
Se ppm 72 102 82 70 - 73 70 59 75 -
P ppm 230 215 146 189 - 55 492 52 81 <100
Pb % 0.92 0.19 0.19 0.22 - 0.32 0.23 0.12 0.17 0.36
Zn % 0.42 0.23 0.25 0.38 - 0.43 0.32 0.26 0.27 0.41
SiO2 % 9.84 6.67 2.39 7.11 - 3.04 8.23 4.26 2.93 -
CaO % 0.54 0.53 0.39 0.54 - 0.27 0.74 0.42 0.52 0.38
table continues…

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 Mitchell
2670/ 3081/82 3081/93** 4514/30
2153/142 2344/73 2535/18 2535/20 SGS/LCT1 2670/18 Pilot Plant Comp Comp Mitchell
Element Unit Master Comp Comp PP1 Comp PP1 Comp PP1 Comp PP1 Comp PP3 Comp PP3 Y0-20 Y0-10 Y0-5
Al2O3 % 3.31 1.76 0.62 1.37 - 0.57 1.83 0.98 0.85 1.11
MgO % 0.48 0.36 0.18 0.34 - 0.15 0.47 0.16 0.13 0.17
MnO % 0.02 0.03 0.011 0.026 - 0.015 0.035 0.012 0.009 0.010
Insol % - 8.46 4.02 8.87 - 3.23 10.3 - - -
Notes: *copper-gold/molybdenum concentrate before molybdenum separation
**test program and test ID

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Table 13.54 Multi-element Assay – Sulphurets/Upper Kerr/Blend Concentrate*
Sulphurets/ Mitchell/
Sulphurets Mitchell Upper Kerr Upper Kerr
2670/44 3174/8 3174/9 2670/62 2535/16 2535/17 3174/10 3174/11 2535/19**
Element Unit Comp Comp 8 Comp 9 Blend Comp 52 Comp 53 Comp 10 Comp 11 Blend
Cu % 28.3 29.3 26.0 24.2 22.3 29.3 30.7 29.0 25.3
Au g/t 41.8 31.4 63.7 52.0 4.05 5.58 7.2 5.1 40
Ag g/t 82 34 130 178 33.5 31.8 49 77 168
Mo % 0.70 0.227 0.170 0.66 0.013 0.017 0.023 0.038 0.056
S (T) % 33.6 32.4 34.4 34.9 27.1 35.3 34.0 36.1 35.0
S (-2) % 31.2 - - 32.2 25.9 33.8 - - 33.4
Fe % 29.6 27.2 29.3 30.0 23.7 27.5 29.4 29.1 29.3
Sb ppm 445 2,100 370 500 24 121 620 180 492
As ppm 224 1,768 205 969 143 3,276 621 2793 1,369
Co ppm 92 - - 104 40 52 - - 68
Cd ppm 180 68 26 144 20 8 6 32 80
Bi ppm <10 - - <10 95 105 - - 121
Hg ppm 2 - - 1 3.4 12 - - 2.4
Ni ppm 88 - - 96 132 168 - - 164
F ppm 155 - - 174 320 88 - - 116
Cl ppm <0.01 - - <0.01 - - - - -
Se ppm 118 - - 89 140 109 - - 76
P ppm 92 - - 113 1045 233 - - 224
Pb % 0.26 0.19 0.72 0.26 0.03 0.05 0.04 0.05 0.15
Zn % 0.54 0.29 0.18 0.92 0.30 0.10 0.08 0.75 0.42
SiO2 % 4.14 - - 5.82 14.0 3.9 - - 5.12
CaO % 0.41 - - 0.38 0.83 0.17 - - 0.43
table continues…

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 Sulphurets/ Mitchell/
Sulphurets Mitchell Upper Kerr Upper Kerr
2670/44 3174/8 3174/9 2670/62 2535/16 2535/17 3174/10 3174/11 2535/19**
Element Unit Comp Comp 8 Comp 9 Blend Comp 52 Comp 53 Comp 10 Comp 11 Blend
Al2O3 % 0.92 - - 1.18 3.92 0.85 - - 0.99
MgO % 0.25 - - 0.29 0.70 0.14 - - 0.26
MnO % 0.017 - - 0.022 0.050 0.015 - - 0.018
Insol % 4.90 - - 7.21 19.6 5.42 - - 6.67
Notes: *copper-gold/molybdenum concentrate before molybdenum separation
**test program and test ID

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Table 13.55 Multi-element Assay – Iron Cap/Blend Concentrate*
Iron Cap Mitchell/Iron Cap
4672/25 4672/29 4672/30 4672/31 4029/19 4029/20 4029/21 2535/19 4672/32**
2748/11 2748/12 IC-2014- IC-2014- IC-2014- IC-2014- IC-2013- IC-2013- IC-2013- Mitchell/Iron Cap Mitchell/Iron Cap
Element Unit Comp 1 Comp 2 MC4 MC2 MC1 MC3 01 02 03 Blend Blend
Cu % 25.4 24.9 24.9 23.4 25.4 22.6 26.7 23.2 23.3 25.3 25.0
Au g/t 146.8 10.9 36.2 29.3 41.5 37.6 52.3 36.9 14.7 40 54.3
Ag g/t 774 255 235 286 243 143 176 281 253 168 332
Mo % 0.18 0.12 0.247 0.306 0.245 0.197 0.48 0.23 0.2 0.056 0.454
S (T) % 32.6 33.5 33.3 35.6 33.3 34.8 32.9 35.7 32.3 35.0 35.5
S (-2) % 32.4 32.2 - - - - - - - 33.4
Fe % 26.5 27.8 27.5 27.7 26.6 28.9 26.4 27.9 25.4 29.3 30.8
Sb ppm 4,379 2,876 3,200 2,893 3,272 274 530 2,100 4,500 492 2,116
As ppm 3,067 1,107 1,890 1,768 2,089 383 740 2,600 3,500 1,369 1,970
Co ppm 50 68 33 43 35 80 48 42 40 68 44
Cd ppm 320 128 128 183 141 59 74 364 152 80 114.7
Bi ppm 205 164 44 30 54 40 35 68 46 121 39.7
Hg ppm <1 2 13 6 13 3 2 10 25 2.4 7
Ni ppm 50 88 22 34 34 28 50 50 48 164 42.4
F ppm 162 494 310 439 378 297 - - - 116 265
Cl ppm <0.01 <0.01 - - - - - - - -
Se ppm 180 108 230 - - - 239 202 187 76 -
P ppm 143 135 100 100 100 100 141 136 173 224 <0.01
Pb % 1.31 0.43 0.46 0.81 0.46 0.54 0.21 0.65 0.78 0.15 0.49
Zn % 2.29 1.02 0.9 1.27 1.08 0.26 0.36 2.67 1.15 0.42 0.72
SiO2 % 3.16 5.59 - - - - 5.95 5.43 9.07 5.12 0.00
CaO % 0.34 0.29 0.42 0.53 0.42 0.50 0.52 0.36 0.62 0.43 0.36
table continues…

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 Iron Cap Mitchell/Iron Cap
4672/25 4672/29 4672/30 4672/31 4029/19 4029/20 4029/21 2535/19 4672/32**
2748/11 2748/12 IC-2014- IC-2014- IC-2014- IC-2014- IC-2013- IC-2013- IC-2013- Mitchell/Iron Cap Mitchell/Iron Cap
Element Unit Comp 1 Comp 2 MC4 MC2 MC1 MC3 01 02 03 Blend Blend
Al2O3 % 0.85 1.28 1.53 2.32 2.10 1.97 1.89 1.42 2.53 0.99 1.28
MgO % 0.12 0.18 0.18 0.30 0.18 0.27 0.27 0.10 0.28 0.26 0.17
MnO % 0.01 0.02 0.02 0.02 0.01 0.02 0.03 0.01 0.03 0.02 0.01
Insol % 5.15 7.66 - - - - - - - 6.67 -
Note: *copper-gold/molybdenum concentrate before molybdenum separation
**test program and test ID

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Table 13.56 Multi-element Assay – Lower Kerr/Blend Concentrate*
Mitchell/
Lower Kerr
Lower Kerr
Element Unit 4029/16** 4029/18 4029/22 4029/23 4029/25 4029/26 4514/23 4514/24 4514/25 4514/26 4514/27 4514/31
DK-2013- DK- DK- DK- DK- DK- DK-2014- DK-2014- DK-2014- DK-2014- DK-2014- Mitchell/DK-
04 2013-03 2013-01 2013-02 2013-06 2013-05 MC3 MC1 MC2 MC4 MC5 2014-MC3
Cu % 26.3 23.0 25.3 24.4 28.4 28.7 23.5 24.0 26.4 27.4 26.9 24.5
Au g/t 10.6 32.9 11.5 9.0 9.3 11.2 10.2 14.8 7.3 18.6 8.80 28.3
Ag g/t 48 136 36 48 50 44 54 42 74 34 99 150
Mo % 0.071 0.215 0.243 0.157 0.039 0.010 0.164 0.091 0.210 0.104 0.266 0.328
S % 36.5 32.9 35.2 34.5 33.3 38.4 36.7 36.1 35.7 35.2 35.7 34.6
Fe % 30.0 27.7 29.5 29.0 28.0 32.2 30.5 28.6 28.4 30.9 29.8 29.6
Sb % 0.082 0.075 0.10 0.035 0.017 0.19 648 237 1202 32 1964 814
As % 0.23 0.21 0.23 0.12 0.055 0.17 1230 810 1774 <5 2875 1404
Co ppm 50 52 54 56 48 44 48 53 38 37 37 43
Cd ppm 24 30 14 16 20 10 13.7 8.7 24.7 4.4 35.5 47.3
Bi ppm <20 <20 <20 <20 <20 56 6.5 5.4 11.8 3.1 15.3 12.2
Hg ppm 64 15 68 9 17 88 29 38 17 27 21 23
Ni ppm 68 86 88 58 86 74 47.3 65.2 44.4 36.1 40.8 73.7
F ppm 120 200 130 130 150 20 220 216 212 253 192 264
Cl % - - - - - - <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
Se ppm 200 195 218 216 219 247 240 - - - - -
P ppm 0.01 0.03 0.02 0.02 0.02 <0.01 0.01 0.01 0.01 <0.01 <0.01 <0.01
Pb % 0.08 0.09 0.07 0.07 0.05 0.03 0.04 0.04 0.05 0.02 0.07 0.12
Zn % 0.31 0.28 0.08 0.06 0.24 0.06 0.10 0.06 0.16 0.01 0.24 0.29
SiO2 % 3.40 8.00 4.13 6.27 5.43 2.76 - - - - - -
CaO % 0.38 0.71 0.53 0.63 0.39 0.11 0.48 0.45 0.60 0.35 0.43 0.41
table continues…

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 Mitchell/
Lower Kerr
Lower Kerr
Element Unit 4029/16** 4029/18 4029/22 4029/23 4029/25 4029/26 4514/23 4514/24 4514/25 4514/26 4514/27 4514/31
DK-2013- DK- DK- DK- DK- DK- DK-2014- DK-2014- DK-2014- DK-2014- DK-2014- Mitchell/DK-
04 2013-03 2013-01 2013-02 2013-06 2013-05 MC3 MC1 MC2 MC4 MC5 2014-MC3
Al2O3 % 1.11 2.38 1.51 2.06 1.42 0.21 1.02 1.85 1.45 1.38 1.02 1.80
MgO % 0.12 0.30 0.18 0.41 0.12 0.03 0.27 0.38 0.30 0.25 0.22 0.33
MnO % 0.01 0.04 0.01 0.03 0.01 <0.01 0.01 0.01 0.01 0.01 0.01 0.01
Note: *copper-gold/molybdenum concentrate before molybdenum separation.
**test program and test ID

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 However, arsenic, antimony, and mercury contents in some of the concentrates from the
Iron Cap deposit and the Kerr samples may attract smelting penalties. Also the lead
content of the concentrate from the Iron Cap Comp 1 may be higher than the penalty
thresholds. Fluorine levels in some of the concentrates may be also higher than the
penalty thresholds. It is anticipated that the Iron Cap and Kerr mill feeds will be
processed together with the ore from the Mitchell deposit. Impurity contents in the
copper concentrates produced from these blended mill feeds should be lower than the
penalty thresholds set by most of the smelters. Further review with respect to smelting
penalties should be conducted.

ANCILLARY TESTS
During testing programs various environment-related tests were conducted and
determined engineering-related parameters. The key tests are as follows:

 leach residue cyanide destruction, including sulphur dioxide/air, Caro’s acid

(H2SO5), and hydrogen peroxide (H2O2)
 cyanide recovery from barren solutions, including the acidification, volatilization
of hydrogen cyanide gas, and re-neutralization (AVR) process and the
sulphidization, acidification, recycling, and thickening of precipitate (SART)
process
 static and dynamic thickening tests for conventional thickener sizing and for
high-rate thickener sizing for primary grinding product, first cleaner tailing
together with gold-bearing pyrite concentrate, cyanidation residues, and
rougher/scavenger flotation tailing
 filtration testing, including vacuum filtration and pressure filtration for bulk
flotation concentrate.

Cyanide Recovery Tests & Cyanide Destruction Tests

Test Material Preparation

A large-scale, agitated bulk cyanide leach test was conducted by SGS on a 20-kg
combined sample of first cleaner tailing and pyrite rougher concentrate. The sample was
sourced from material generated from the flotation pilot plant testing at G&T.

The leach pulp of the bulk cyanidation test was allowed to settle and 16.7 L of solution
were decanted (pregnant solution). The thickened pulp was diluted with 33.3 L of de-
ionized water to simulate washing. The diluted pulp was well agitated then allowed to
settle. A 26.7-L portion of the supernatant solution was collected (wash solution). The
pregnant solution and washed residue pulp were further treated by contacting with
cyanide-treated carbon. The resulting barren solution and the washed residue pulp were
used for cyanide recovery and destruction testing, respectively.

The cyanide accountability for bulk leaching was close to 100%. The estimated amount
of sodium cyanide consumed by the formation of thiocyanate was 1 kg/t feed, while
0.5 kg/t feed equivalent sodium cyanide was oxidized to cyanate. The amount of

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 equivalent sodium cyanide complexed with copper was 2.38 kg/t feed, and the free
cyanide determined by a titration with silver nitrate was 0.35 kg/t sodium cyanide.

The cyanide complexed with copper and the free cyanide should be recoverable by the
AVR or the SART process. The AVR process is able to recover the cyanide into a higher
cyanide concentration solution than the SART process. A significant drawback of the AVR
process, compared with the SART process, is that the cyanide associated with the copper
cyanide complex is unrecoverable.

The key chemical analysis of the solution for cyanide recovery and the washed leach pulp
for the cyanide destruction are shown in Table 13.57.

Table 13.57 Chemical Analysis of Cyanide Recovery Test Solution and Cyanide Destruction
Pulp
CNT CNWAD CNF Cu Fe CNS
Sample (mg/L) (mg/L) (mg/L) (mg/L) (mg/L) (mg/L)
Leach Solution 853 850 280 562 1.6 700
Washed Pulp 94 90 - 90.4 1.08 220
Note: CNT = total cyanide; CNWAD = weak acid dissociable cyanide; CNF = free cyanide; CNS = thiocyanate

Cyanide Recovery Tests

Exploratory AVR tests were conducted to investigate the effect of pH on the recovery of
cyanide from the barren leach solution. The scrubbing retention time was 4 h; the
collected cyanide, acid consumption, and lime consumption are summarized in Table
13.58.

Table 13.58 Cyanide Recovery Test Results – AVR

Recovered Sulphuric Acid Hydrated Lime
pH CNWAD (%) Addition (g/L) Addition (g/L)
2 77 3.18 0.78
3 72 2.01 0.24
4 35 1.14 0.16

Exploratory SART tests were also conducted on the barren leach solution to investigate
the effects of pH and sodium hydrosulphide (NaHS) dosage on recovering cyanide and
copper from CNWAD and copper cyanide complexes. The test results are as follows:

 At a sodium hydrosulphide dosage of 100% stoichiometric requirement, 83 to

94% of the copper was precipitated when reducing the pH level from 5 to 3.
 At pH 3, an increase of sodium hydrosulphide dosage to 120% of the
stoichiometric requirement resulted in near complete removal of copper from
the solution and regeneration of all the weak acid dissociable cyanide as free
cyanide.

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  The sulphuric acid addition was approximately 1.9 g/L of feed solution, and the
hydrated lime requirement for re-neutralization of the SART treated solution was
1.3 g/L of feed solution.

Further optimization of the SART conditions could improve upon these results, should
SART be considered for recovery of cyanide into low-concentration cyanide solutions.
These SART-generated cyanide solutions might also be considered for feed to further AVR
processing to generate higher grade cyanide solutions for recycle to the leaching circuits.

Cyanide Destruction Tests

Three different cyanide destruction methods, including sulphur dioxide/air, Caro’s acid,
and hydrogen peroxide were tested for oxidation of cyanide and detoxification of the
washed pulp. The objective of the test work was to produce treated effluent containing
less than 2 mg/L CNWAD. The results of the cyanide destruction test results are
summarized in Table 13.59.

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Table 13.59 Cyanide Destruction Test Results – 2009/2010 (SGS)
Composition (Solution Phase) Cumulative Reagent Addition* (g/g CNWAD)
Oxidant Cumulative
Dosage Retention CNT CNWAD SO2 H2SO5 H2O2 Cu mg/L
Test Method Stoich (%) Time (~h) pH mg/L mg/L Equivalent Lime Cu 100% 100% Solution
Cyanidation Washed Pulp 10.7 94 90 - - - - - -
CND 6&7 SO2/Air 160-200 1 9.6 2-4 <1 4-5 - 0.14 - - 12
C-1 Caro's Acid 500 1.5** 9.0 2.8 1.7 - 37 - 21.9 - -
H-1 H2O2 500 1.5** 10.1 12 11 - - - - 6.5 -
SO2/Air Partially Treated Pulp 10.0 10 10 - - - - -
C-2 Caro's Acid 500 1.5** 9.0 2.8 1.7 - - - 21.6 - -
H-7 H2O2 1,000 0.5 10.0 2.3 0.3 - - 1.5 - 13 15
SO2/Air Partially Treated Solution 10.0 10 10 - - - - - -
H-4 H2O2 500 1 8.7 1.6 0.4 - - - - 6.5 -
Notes: *copper added as CuSO4 5H2O; SO2 added as Na2S2O5
**reagent added in three 30-min stages

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 The results indicated that the residual CNWAD in the washed pulp was reduced to less
than 1 mg/L after the pulp was treated with 4 to 5 g equivalent sulphur dioxide and
0.14 g copper (added as copper sulphate) per gram of CNWAD in the pulp. The reaction
time for this process was one hour at the natural pH. The sulphur dioxide/air-treated
pulp contained small amounts of CNT in the form of ferrocyanide complex.

An exploratory test indicated that the residual CNWAD in the solution phase of the washed
pulp was reduced to less than 2 mg/L level by using Caro’s acid treatment. The reagent
consumption was 0.74 g H2SO5 (250% of the stoichiometric amount) and 0.6 g/L
hydrated lime of the feed to the cyanide destruction.

The tests also indicated that the hydrogen peroxide process was not very efficient for
cyanide destruction. The residue CNWAD was only reduced from 90 mg/L to 11 mg/L after
adding 500% of the stoichiometrically required hydrogen peroxide.

Two-stage cyanide destruction involving sulphur dioxide/air treatment followed by a

polishing treatment with Caro’s acid or hydrogen peroxide was investigated on the pulp
and also a tailing filtrate solution. The sulphur dioxide/air treated pulp was adjusted with
sodium cyanide to 10 mg/L CNWAD for the polishing tests. The results are as follows:

 The polishing test using Caro’s acid was unsuccessful. The final product still
contained 3.2 mg/CNWAD after the addition of 500% of the stoichiometric Caro’s
acid.
 The hydrogen peroxide polishing treatment produced less than 2 mg/L residual
CNWAD. The hydrogen peroxide dosage was 10 times of the stoichiometric
requirement and the copper addition was 0.011 g/L pulp.
 The solution phase (filtrate) of the sulphur dioxide/air partially treated pulp
responded well to the hydrogen peroxide polishing treatment. The solution
contained less than 1 mg/L residual CNWAD after being treated with five times
the stoichiometric hydrogen peroxide requirement (0.065 g/L solution). Copper
sulphate was not used in the treatment of this solution.

Settling Tests
Thickening

Preliminary settling tests were conducted on pyrite rougher flotation tailing in the 2008
testing program. As reported by G&T, the tests on the tailing slurry failed to generate
normal settling curves. The tests were subsequently carried out on the re-pulped sample
from dried tailing.

The test data reveal that the settling area required for pyrite rougher flotation tailing was
0.73 m2/t/d without adding flocculent and 0.30 m2/t/d with the addition of 10 g/t of
flocculent.

In 2009, Pocock conducted solids liquid separation (SLS) tests on five flotation products
generated by G&T from the bench scale tests and pilot plant tests. The materials tested
included flotation feed, copper concentrate, first cleaner tails + gold-bearing pyrite

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 concentrate, cyanidation residues, and rougher/scavenger flotation tailing. The
dewatering tests included:

 flocculent screening tests

 static and dynamic thickening tests for conventional thickener sizing and for
high rate thickener sizing
 viscosity (rheological properties) tests for rake mechanism and underflow
pipeline sizing
 vacuum filtration tests
 pressure filtration tests.

Hychem AF 303 (a medium to high molecular weight, 7% charge density, anionic

polyacrylamide) was selected for thickening tests from preliminary screening of a series
of flocculents.

The key test results are summarized in Table 13.60 and Table 13.61.

Table 13.60 Recommended Conventional Thickener Operating Parameters – 2009

(Pocock)
Feed Flocculent Underflow Unit Area
Material Tested (% Solids) (g/t) (% Solids) (m2/t/d)
Flotation Feed Comp 20-25 10-15 60-65 0.125
Coarse Grind Flotation Feed 25-30 10-15 70-74 0.125
Final Copper Concentrate 25-30 5-10 70-72 0.125
Rougher Tailing 15-20 10-15 60-62 0.125
Au-Pyrite Concentrate and Cu Cleaner Tailing 15-20 20-25 55-58 0.275-0.307
Cyanide Leach Reside 10-15 20-25 50-53 0.284-0.312
Notes: All tests were performed at 20°C and as received pH.
Hydraulic loading or rise rate (m3/m2/h) includes a 0.5 scale-up factor.
Unit area includes a 1.25 scale-up factor; the range of unit areas provided corresponds to the range
of underflow densities.
Coarse grind flotation feed: at a particle size of P80 170 um; simulating stage one primary grind size.

Table 13.61 Recommended High Rate Thickener Operating Parameters – 2009 (Pocock)
Feed Flocculent Underflow Net Feed Loading
Material Tested (% Solids) (g/t) (% Solids) (m3/m2h)
Flotation Feed Comp 15-20 15-20 60-65 4.8-6.1
Coarse Grind Flotation Feed 20-25 10-15 70-74 4.8-6.1
Rougher Flotation Tailing 15-20 ~20 57-62 3.7-4.8

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 Filtration

The 2009 Pocock testing program also determined the filtration rates of the copper
concentrates produced from G&T pilot plant tests. Both vacuum filtration and pressure
filtration methods were tested. The test results are summarized in Table 13.62.

Table 13.62 Filtration Test Results – 2009 (Pocock)

Bulk Cake Cake Cake Filtration Dry Cake
Filtration Density Thickness Moisture Rate Weight
Method (dry kg/m3) (mm) (%) (dry kg/m2h) (dry kg/m2)
Vacuum 1,785 15 19 265* -
Pressure 2,511 51 8 - 117.8**
Notes: *includes scale up factors at vacuum of 67.7 kPa.
**feed pressure 552 kPa at 51 mm thickness.

Magnetic Separation Tests

In the 2008 test program, Davis Tube magnetic separation was used in an effort to
recover the metal values lost in the coarser than 74 µm fraction of the pyrite flotation
tailing from Tests 10, 11, and 25. Test results indicated that less than 3% of the coarse
tailing weight was recovered into a magnetic fraction assaying approximately 23% iron.
No copper or gold assay data was reported.

CONCLUSIONS
The substantial test results indicate that the mineral samples from the four separate
mineralization deposits are amenable to the flotation-cyanidation combined process. The
process consists of:

 copper-gold-molybdenum bulk rougher flotation followed by gold-bearing pyrite

flotation
 regrinding the resulting bulk rougher concentrate followed by three stages of
cleaner flotation to produce a copper-gold-molybdenum bulk cleaner flotation
concentrate
 molybdenum separation of the bulk cleaner flotation concentrate to produce a
molybdenum concentrate and a copper/gold concentrate containing associated
silver
 cyanide leaching of the gold-bearing pyrite flotation concentrate and the
scavenger cleaner tailing to further recover gold and silver values as doré
bullion.

The samples from the Mitchell and Sulphurets deposits produced better metallurgical
results with the chosen flotation circuit and cyanide leach extraction when compared to
the metallurgical results from the samples taken from the Iron Cap deposit and the upper
zone of the Kerr deposit.

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 The test results indicate that the samples from all the deposits are moderately hard to
ball mill and SAG mill grinding, excluding the samples from the Sulphurets deposit
showing much resistance to both ball mill and SAG mill grinding. The communition tests
also show that the samples tested are amenable to particle size reduction by HPGR
procedure.

13.2 METALLURGICAL PERFORMANCE PROJECTION

The metallurgical test results obtained from the various test programs were used to
predict plant metallurgical performance parameters for copper, gold, silver, and
molybdenum. Gold and silver recoveries were based on the combined process of
flotation to a saleable concentrate followed by cyanidation of a combined cleaner tailing
and pyrite flotation concentrate. The flotation process will produce a copper concentrate
containing approximately 25% copper with variable precious metal content and a
molybdenum concentrate with 50% molybdenum. The gold cyanidation process on gold-
bearing pyrite products will produce a gold-silver doré.

The Mitchell mineralization produced better metallurgical performances, compared to the

Sulphurets, Kerr, and Iron Cap mineralization. The metallurgical performance projections
of the different KSM ores are summarized in Table 13.63 to Table 13.66. The estimates
are based on a primary grind size of 80% passing approximately 125 to 150 µm and a
regrind size of 80% passing approximately 20 µm.

Table 13.63 Cu-Au Concentrate – Cu Grade

Cu Head Cu Grade
(%) (%)
>0.80 28
0.40-0.80 26
0.15-0.40 25
0.10-0.15 23
0.05-0.10 17
<0.05 5

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 Table 13.64 Cu-Au Concentrate – Metal Recovery Projections
Deposit Description Head Grade Recovery
Mitchell Copper Recovery >1.0% Cu = 95%
0.8 - 1.0% Cu = 92%
0.234 - 0.8% Cu = 90.86 x (Cu Head, %) 0.027
0.05 - 0.234% Cu = 18.02 x ln(Cu Head, %) + 113.5
0.02 - 0.05% Cu = 20%
<0.02% = 3%
Gold Recovery n/a = 0.0967 x (Cu Recovery, %) 1.4465
Silver Recovery n/a = 1.427 x (Cu Recovery, %) - 70.11
Sulphurets Copper Recovery >1.0% Cu = 93%
0.8 - 1.0% Cu = 90%
0.234 - 0.8% Cu = 90.86 x (Cu Head, %) 0.027 - 3.5
0.05 - 0.234% Cu = 18.02 x ln(Cu Head, %) + 110
0.02 - 0.05% Cu = 20%
<0.02% = 3%
Gold Recovery n/a = 52.07 x ln(Cu Recovery, %) - 174.1
Silver Recovery n/a = 1.065 x (Cu Recovery, %) - 44.80; if copper recovery
< 50%, use 5%
Kerr Copper Recovery >1.0% Cu = 88%
0.8 - 1.0% Cu = 85%
0.234 - 0.8% Cu = 90.86 x (Cu Head, %) 0.027 - 7
0.05 - 0.234% Cu = 18.02 x ln(Cu Head, %) + 106.5
0.02 - 0.05% Cu = 20%
<0.02% Cu = 3%
Gold Recovery n/a = 171.8 x ln(Cu Recovery, %) - 718; if copper recovery
< 70%, use 5%
Silver Recovery n/a = 132.48 x ln(Cu Recovery, %) - 542.9; if copper
recovery < 70%, use 5%
Iron Cap Copper Recovery >1.0% Cu = 95%
0.8 - 1.0% Cu = 92%
0.49 - 0.8% Cu = 90%
0.10 - 0.49% Cu = 90.786 x (Cu Head, %) 0.089
0.05 - 0.10% Cu = 30%
<0.05% Cu = 3%
Gold Recovery >2.0 g/t Au = 80%
0.75 - 2.0 g/t Au = 72.5%
0.05 - 0.75 g/t Au = 78.128 x (Au Head, g/t) 0.3012
<0.05 g/t Au = 20
Silver Recovery >20 g/t Ag = 83%
10 - 20 g/t Ag = 78%
0.5 - 10 g/t Ag = 39.945 x (Ag Head, g/t) 0.2602
<0.5 g/t Ag = 5%

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 Table 13.65 Au-Ag Doré – Metal Recovery Projections
Deposit Head Grade Recovery
Mitchell Gold
>10 g/t Au = (98 - ( 0.096 x (Cu Recovery, %) 1.446)) x 80% x 98%
5 - 10 g/t Au = (95 - ( 0.096 x (Cu Recovery, %) 1.446)) x 75% x 98%
0.1 - 5 g/t Au = (87.491 x (Au Head, g/t)0.051 - ( 0.096 x (Cu Recovery, %) 1.446)) x 66% x 98%
<0.1 g/t Au = 0%
Silver
>15 g/t Ag = 88 - (1.427 x (Cu Recovery, %) - 70.11)
8- 15 g/t Ag = 86 - (1.427 x (Cu Recovery, %) - 70.11)
1 - 8 g/t Ag = (42.74 x (Ag Head, g/t) 0.336 ) - ( 1.427 x (Cu Recovery, %) - 70.11) ; if <0, use 0%
<1 g/t Ag = 0%
Sulphurets Gold
>10 g/t Au = (98 - (52.07 x ln(Cu Recovery, %) - 174.1)) x 70% x 98%
5 - 10 g/t Au = (95 - ( 52.07 x ln(Cu Recovery, %) - 174.1)) x 60% x 98%
0.1 - 5 g/t Au = ((87.491 x (Au Head, g/t)0.051 +3)- (52.07 x ln(Cu Recovery, %) - 174.1)) x 49% x 98%
<0.1 g/t Au = 0%
Silver
>15 g/t Ag = 52.7%
8- 15 g/t Ag = 50.7%
1 - 8 g/t Ag = (42.74 x (Ag Head, g/t) 0.336) - (1.065 x (Cu Recovery, %) - 44.80)
<1 g/t Ag = 0%
Kerr Gold
>10 g/t Au = (98 - (171.8 x ln(Cu Recovery, %) - 718)) x 75% x 98%
5 - 10 g/t Au = (95 - (171.8 x ln(Cu Recovery, %) - 718)) x 65% x 98%
0.1 - 5 g/t Au = ((87.491 x (Au Head, g/t)0.051 + 8)- (171.8 x ln(Cu Recovery, %) - 718))) x 57% x 98%
<0.1 g/t Au = 0%
Silver
>15 g/t Ag = (88 - (132.48 x ln(Cu Recovery, %) - 542.9))/100; Cap at 88%
8- 15 g/t Ag = (86 - (132.48 x ln(Cu Recovery, %) - 542.9))/100; Cap at 86%
1 - 8 g/t Ag = (21.59 x ln(Ag Head, g/t) + 40.14) - (132.48 x ln(Cu Recovery, %) - 542.9) ; if <0, use 0
<1 g/t Ag = 0%
Iron Cap Gold
>2 g/t Au = 8%
0.05 - 2 g/t Au = 10%
<0.05 g/t Au = 5%
Silver
>20 g/t Ag = 8%
10 - 20 g/t Ag = 11%
0.5 - 10 g/t Ag = 16%
<0.5 g/t Ag = 5%

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 Table 13.66 Mo Concentrate Metal Recovery and Grade
Mo Head Mo Recovery
(%) (%)
>0.010 47
0.005-0.010 35
0.0025-0.005 25
<0.0025 0
Molybdenum Grade = 50%

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14.0 MINERAL RESOURCE ESTIMATES 

Mineral Resources were estimated for the Project by Mr. Michael J. Lechner, President of
RMI. Mr. Lechner is a P.Geo. (BC), a Registered Professional Geologist in the State of
Arizona, a Certified Professional Geologist with the American Institute of Professional
Geologists (AIPG), and a registered member of the Society for Mining, Metallurgy, and
Exploration (SME). These professional registrations together with Mr. Lechner’s
professional background and work experience allow him to be the QP for this report as
per the requirements set out by NI 43-101. Neither Mr. Lechner nor RMI have any vested
interest in Seabridge securities or the Property that is the subject of this Technical
Report. Mr. Lechner and RMI have worked as an independent consultant for Seabridge
since 2001.

This section outlines the various methods that were used to estimate Mineral Resources
for the Project, which currently consists of four known mineralized areas for which
Mineral Resources have been estimated. Block model grades for two of those areas
(Sulphurets and Mitchell) are based on grade models that were developed for the 2012
PFS (Tetra Tech 2012). Various statistical and modeling parameters associated with the
Sulphurets and Mitchell deposits were taken from Tetra Tech (2012), although the
Mineral Resource tabulations for those two areas have been updated to account for
different metal prices and conceptual pit and block cave constraints that were used to
better demonstrate “that there are reasonable prospects for eventual economic
extraction”.

Mineral Resources for the Kerr and Iron Cap deposits have been updated since the last
public disclosures for those areas. Statistics, modeling parameters, and Mineral
Resource tabulations for the Kerr and Iron Cap deposits are discussed in Sections 14.2
and 14.3.

14.1 SULPHURETS AND MITCHELL DEPOSITS 
No material drilling has been completed within the Sulphurets or Mitchell Mineral
Resource areas since Tetra Tech (2012) was filed. The following Sections (14.1.1
through 14.1.9) were taken nearly verbatim from Tetra Tech (2012). Descriptions for the
Kerr and Iron Cap zones have been removed and are updated in Sections 14.2 and 14.3
of this Technical Report, respectively.

14.1.1 GOLD GRADE DISTRIBUTION – SULPHURETS AND MITCHELL 
Block gold grades were estimated by assay grades that were composited into 15 m long
drill hole composites, after high-grade outlier values were capped. Section 14.1.3
discusses grade capping. Various geologic wireframes were used to constrain the
estimate of block grades for each zone. These geologic wireframes represent a

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 combination of alteration, lithology, and gold grade (Sulphurets) and gold grade
envelopes (Mitchell).

The distribution of gold based on raw uncomposited data is summarized at four different
cut-off grades by the geologic constraint that was used in the estimation process in Table
14.1 and Table 14.2 for the Sulphurets and Mitchell deposits, respectively.

As shown in Table 14.1 and Table 14.2, the average gold grade increases in going from
the Sulphurets to the Mitchell deposit Another important statistical parameter is that the
CV is relatively low for the Sulphurets and Mitchell mineralized zones. The CV for
uncapped Mitchell gold grade assays is 1.01. That CV is reduced to 0.86 after high-grade
outliers are capped (Section 14.1.3).

In general, it has not been possible to identify any particular lithologic unit or alteration
type that adequately defines a mineralized gold population for any of the KSM
mineralized zones except for the Kerr deposit. Quartz-sericite-pyrite alteration tends to
be one of the key mineralized units but gold grades are seen to cross cut the various
logged alteration types. Given these observations, RMI elected to use grade envelopes to
constrain the estimate of block gold grades (AUZON). Mineral zones and constraints
used to estimate block grades are discussed in Section 14.1.5.

14.1.2 COPPER GRADE DISTRIBUTION – SULPHURETS AND MITCHELL 
The distribution of copper grades based on the original drill hole intervals is summarized
at four different cut-off grades by the geologic constraints that were used to estimate
block copper grades in Table 14.3 and Table 14.4 for the Sulphurets and Mitchell
deposits, respectively.

Like gold, copper is seen to be distributed in a number of logged lithologic and alteration
types in the four mineralized zones. In general, it has not been possible to identify any
particular lithologic unit or alteration type that adequately defines a mineralized copper
population for any of the KSM deposits except for Kerr where alteration was used to
constrain the estimate of block grades. Copper grades tend to be somewhat lower in
chlorite-propylitic alteration than quartz-sericite-pyrite alteration, but this relationship is
not well developed. Given these observations, RMI elected to use grade envelopes for
Sulphurets, Mitchell, and Iron Cap to constrain the estimate of block copper grades
(CUZON) (Section 14.1.5).

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Table 14.1  Distribution of Gold by AUZON – Sulphurets Zone 
Uncapped Au Statistics Above Cut-off Capped Au Statistics Above Cut-off
Au
Cut- Total Mean Mean
off Metres Inc. Au Grd-Thk Inc. Std Au Grd-Thk Inc. Std
AUZON (g/t) (m) (%) (g/t) (g/t-m) (%) Dev CV (g/t) (g/t-m) (%) Dev CV
All 0.00 35,450 52 0.41 14,393 13.9 0.77 1.89 0.39 13,933 14.4 0.54 1.37
Data 0.25 17,023 24 0.73 12,392 20.7 1.01 1.38 0.70 11,933 21.4 0.64 0.92
0.50 8,663 16 1.09 9,415 27.9 1.32 1.21 1.03 8,955 28.8 0.77 0.74
1.00 2,877 8 1.88 5,404 37.5 2.06 1.09 1.72 4,944 35.5 1.01 0.59
1 0.00 1,258 8 1.12 1,410 1.1 1.34 1.19 1.06 1,335 1.1 0.92 0.87
0.25 1,157 19 1.21 1,395 6.4 1.36 1.13 1.14 1,320 6.8 0.92 0.81
0.50 915 36 1.42 1,304 23.6 1.45 1.02 1.34 1,230 24.9 0.93 0.70
1.00 465 37 2.09 971 68.9 1.80 0.86 1.93 896 67.1 1.00 0.52
2 0.00 1,514 54 0.30 448 25.0 0.30 1.01 0.29 433 25.9 0.23 0.81
0.25 694 33 0.48 336 39.3 0.35 0.73 0.46 321 40.6 0.23 0.51
0.50 192 10 0.83 160 20.5 0.52 0.63 0.76 145 21.2 0.26 0.35
1.00 45 3 1.53 68 15.2 0.71 0.46 1.19 53 12.3 0.08 0.07
3 0.00 7,511 21 0.59 4,463 5.7 0.59 0.99 0.59 4,443 5.7 0.55 0.93
0.25 5,917 33 0.71 4,210 20.5 0.61 0.86 0.71 4,190 20.6 0.56 0.80
0.50 3,432 32 0.96 3,294 37.7 0.70 0.73 0.95 3,275 37.9 0.63 0.66
1.00 1,001 13 1.61 1,611 36.1 1.03 0.64 1.59 1,592 35.8 0.87 0.55
4 0.00 8,075 28 0.58 4,709 7.2 1.10 1.88 0.56 4,502 7.5 0.55 0.99
0.25 5,830 34 0.75 4,372 21.0 1.25 1.67 0.71 4,165 22.0 0.58 0.81
0.50 3,091 25 1.09 3,384 30.5 1.64 1.50 1.03 3,176 31.9 0.64 0.63
1.00 1,037 13 1.88 1,948 41.4 2.65 1.41 1.68 1,741 38.7 0.75 0.44
5 0.00 1,816 57 0.34 618 23.7 0.60 1.77 0.30 544 27.0 0.26 0.88
0.25 787 29 0.60 471 28.5 0.84 1.41 0.50 397 32.4 0.28 0.56
0.50 268 11 1.10 295 22.0 1.30 1.18 0.82 221 25.0 0.27 0.33
1.00 70 4 2.28 159 25.7 2.14 0.94 1.22 85 15.6 0.06 0.05
6 0.00 3,470 72 0.25 866 32.5 0.61 2.43 0.24 827 34.0 0.36 1.50
0.25 970 19 0.60 584 26.4 1.07 1.77 0.56 546 27.6 0.55 0.97
0.50 302 6 1.18 356 15.1 1.77 1.51 1.05 318 15.8 0.78 0.74
1.00 103 3 2.20 225 26.0 2.77 1.26 1.82 187 22.6 0.92 0.50
7 0.00 2,630 92 0.11 291 56.0 0.33 2.95 0.10 261 62.5 0.15 1.49
0.25 199 5 0.64 128 16.5 1.03 1.61 0.49 98 18.4 0.29 0.58
0.50 58 1 1.38 80 9.3 1.70 1.23 0.86 50 10.4 0.27 0.32
1.00 19 1 2.79 53 18.2 2.40 0.86 1.21 23 8.8 0.07 0.06
29 0.00 9,176 84 0.17 1,589 43.6 0.45 2.62 0.17 1,589 43.6 0.45 2.62
0.25 1,470 12 0.61 896 22.3 1.02 1.67 0.61 896 22.3 1.02 1.67
0.50 405 3 1.34 542 11.0 1.74 1.30 1.34 542 11.0 1.74 1.30
1.00 138 2 2.66 368 23.1 2.49 0.94 2.66 368 23.1 2.49 0.94

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Table 14.2  Distribution of Gold by AUZON – Mitchell 
Uncapped Au Statistics Above Cut-off Capped Au Statistics Above Cut-off
Au
Cut- Total Mean Mean
off Metres Inc. Au Grd-Thk Inc. Std Au Grd-Thk Inc. Std
AUZON (g/t) (m) (%) (g/t) (g/t-m) (%) Dev CV (g/t) (g/t-m) (%) Dev CV
All Data 0.00 54,436 31 0.51 27,596 6.7 0.51 1.01 0.50 27,388 6.8 0.43 0.86
0.25 37,742 26 0.68 25,738 18.7 0.53 0.77 0.68 25,529 18.8 0.41 0.61
0.50 23,809 34 0.86 20,589 46.6 0.59 0.68 0.86 20,380 47.0 0.42 0.49
1.00 5,409 10 1.43 7,719 28.0 1.02 0.72 1.39 7,510 27.4 0.59 0.42
Leach 0.00 1,642 60 0.28 465 27.0 0.29 1.03 0.28 465 27.0 0.29 1.03
Breccia 0.25 663 27 0.51 340 33.1 0.34 0.66 0.51 340 33.1 0.34 0.66
0.50 220 10 0.85 186 24.1 0.42 0.49 0.85 186 24.1 0.42 0.49
1.00 51 3 1.43 73 15.8 0.49 0.34 1.43 73 15.8 0.49 0.34
Bornite 0.00 194 38 0.33 64 19.2 0.21 0.63 0.33 64 19.2 0.21 0.63
Breccia 0.25 120 47 0.43 52 48.0 0.20 0.47 0.43 52 48.0 0.20 0.47
0.50 29 14 0.72 21 28.5 0.22 0.30 0.72 21 28.5 0.22 0.30
1.00 2 1 1.38 3 4.3 0.00 0.00 1.38 3 4.3 0.00 0.00
1.00 g/t 0.00 5,540 3 1.09 6,042 0.2 0.90 0.82 1.06 5,893 0.2 0.59 0.55
Envelope 0.25 5,391 3 1.12 6,029 0.9 0.89 0.80 1.09 5,881 1.0 0.57 0.52
0.50 5,249 48 1.14 5,972 34.7 0.90 0.79 1.11 5,824 35.6 0.57 0.51
1.00 2,576 46 1.51 3,877 64.2 1.16 0.77 1.45 3,729 63.3 0.65 0.45
0.75 g/t 0.00 10,427 5 0.75 7,785 0.8 0.35 0.46 0.75 7,785 0.8 0.35 0.46
Envelope 0.25 9,897 13 0.78 7,724 7.1 0.32 0.41 0.78 7,724 7.1 0.32 0.41
0.50 8,545 65 0.84 7,175 63.2 0.30 0.36 0.84 7,175 63.2 0.30 0.36
1.00 1,778 17 1.27 2,255 29.0 0.38 0.30 1.27 2,255 29.0 0.38 0.30
0.50 g/t 0.00 14,681 9 0.55 8,037 2.3 0.29 0.53 0.55 8,036 2.3 0.29 0.53
Envelope 0.25 13,403 37 0.59 7,853 26.5 0.28 0.47 0.59 7,851 26.5 0.27 0.47
0.50 7,914 49 0.72 5,720 59.1 0.28 0.39 0.72 5,718 59.1 0.28 0.39
1.00 719 5 1.35 972 12.1 0.54 0.40 1.35 971 12.1 0.52 0.38
0.20 g/t 0.00 9,724 35 0.35 3,435 16.7 0.44 1.25 0.35 3,397 16.9 0.29 0.82
Envelope 0.25 6,347 51 0.45 2,861 50.3 0.52 1.15 0.44 2,823 50.8 0.31 0.71
0.50 1,418 12 0.80 1,133 21.7 1.01 1.27 0.77 1,095 22.0 0.54 0.69
1.00 203 2 1.91 387 11.3 2.38 1.25 1.72 349 10.3 0.94 0.55
0.10 g/t 0.00 7,255 82 0.17 1,197 55.8 0.15 0.91 0.17 1,197 55.8 0.15 0.91
Envelope 0.25 1,319 15 0.40 530 29.9 0.20 0.49 0.40 530 29.9 0.20 0.49
0.50 235 3 0.73 172 10.8 0.26 0.36 0.73 172 10.8 0.26 0.36
1.00 33 0 1.27 42 3.5 0.19 0.15 1.27 42 3.5 0.19 0.15
Undefined 0.00 4,972 88 0.11 570 38.6 0.38 3.33 0.11 549 40.1 0.26 2.34
0.25 603 8 0.58 350 24.4 0.97 1.67 0.55 329 25.4 0.56 1.02
0.50 199 3 1.06 210 17.8 1.57 1.49 0.95 189 18.4 0.83 0.87
1.00 47 1 2.33 109 19.2 2.89 1.24 1.89 88 16.1 1.31 0.69

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Table 14.3  Distribution of Copper by CUZON – Sulphurets Zone 
Uncapped Cu Statistics Above Cut-off Capped Cu Statistics Above Cut-off
Cu Total Mean Mean
Cut-off Metres Inc. Cu Grd-Thk Inc. Std. Cu Grd-Thk Inc. Std.
CUZON (g/t) (m) (%) (%) (%-m) (%) Dev CV (%) (%-m) (%) Dev CV
All 0.00 34,934 40 0.14 4,719 6.3 0.19 1.42 0.13 4,673 6.3 0.19 1.39
Data 0.05 21,052 22 0.21 4,422 11.4 0.22 1.03 0.21 4,377 11.5 0.21 1.00
0.10 13,499 23 0.29 3,884 26.8 0.24 0.82 0.28 3,839 27.5 0.23 0.79
0.25 5,411 15 0.48 2,620 55.5 0.27 0.56 0.48 2,554 54.7 0.25 0.52
Au 0.00 1,033 57 0.07 71 20.3 0.09 1.34 0.07 70 20.6 0.09 1.28
Zone 0.05 439 26 0.13 56 25.8 0.11 0.90 0.13 55 26.1 0.11 0.84
0.10 170 12 0.22 38 27.8 0.14 0.61 0.22 37 28.2 0.12 0.56
0.25 44 4 0.42 18 26.1 0.12 0.28 0.40 17 25.1 0.09 0.23
Leach 0.00 1,453 74 0.04 57 38.8 0.04 1.09 0.04 55 39.8 0.04 0.99
Au Zone 0.05 381 19 0.09 35 33.6 0.05 0.58 0.09 33 34.4 0.04 0.45
0.10 100 6 0.16 16 21.9 0.06 0.41 0.14 14 25.9 0.03 0.23
0.25 10 1 0.32 3 5.6 0.04 0.13 0.00 0 0.0 0.00 0.00
Raewyn 0.00 7,411 7 0.33 2,436 0.6 0.29 0.88 0.33 2,427 0.6 0.28 0.85
Cu Zone 0.05 6,905 11 0.35 2,422 2.6 0.29 0.82 0.35 2,414 2.6 0.28 0.79
0.10 6,070 31 0.39 2,360 15.8 0.29 0.74 0.39 2,351 15.8 0.27 0.71
0.25 3,779 51 0.52 1,975 81.1 0.29 0.56 0.52 1,967 81.0 0.27 0.52
Lower 0.00 8,012 34 0.09 760 9.9 0.11 1.16 0.09 756 9.9 0.10 1.11
Au Zone 0.05 5,248 34 0.13 685 25.3 0.12 0.93 0.13 681 25.4 0.11 0.88
0.10 2,494 26 0.20 493 39.3 0.15 0.76 0.20 489 39.4 0.14 0.70
0.25 450 6 0.43 194 25.6 0.22 0.52 0.42 191 25.2 0.18 0.43
FW 0.00 1,816 20 0.11 191 6.1 0.09 0.82 0.10 183 6.4 0.06 0.62
Hazelton 0.05 1,454 39 0.12 179 27.4 0.09 0.71 0.12 171 28.5 0.06 0.50
0.10 750 37 0.17 127 51.4 0.10 0.59 0.16 119 53.5 0.05 0.34
0.25 73 4 0.39 29 15.1 0.19 0.48 0.29 21 11.6 0.01 0.05
Main 0.00 3,470 11 0.18 642 1.7 0.15 0.81 0.18 631 1.7 0.13 0.72
Copper 0.05 3,086 17 0.20 631 7.2 0.15 0.72 0.20 620 7.3 0.13 0.62
Zone
0.10 2,482 48 0.24 585 42.6 0.15 0.63 0.23 574 43.4 0.12 0.53
0.25 822 24 0.38 311 48.5 0.18 0.47 0.37 300 47.6 0.12 0.33
Main Cu 0.00 2,630 64 0.06 157 22.3 0.07 1.24 0.05 144 24.3 0.06 1.03
Monzonite 0.05 936 16 0.13 122 19.2 0.09 0.65 0.12 109 20.9 0.05 0.45
0.10 505 16 0.18 92 38.8 0.09 0.48 0.16 79 54.8 0.04 0.24
0.25 95 4 0.33 31 19.8 0.09 0.27 0.00 0 0.0 0.00 0.00
Undefined 0.00 9,108 71 0.04 407 28.0 0.07 1.53 0.04 407 28.0 0.07 1.53
0.05 2,603 18 0.11 293 28.9 0.10 0.87 0.11 293 28.9 0.10 0.87
0.10 929 9 0.19 175 28.9 0.13 0.70 0.19 175 28.9 0.13 0.70
0.25 137 2 0.42 58 14.2 0.21 0.49 0.42 58 14.2 0.21 0.49

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Table 14.4  Distribution of Copper by CUZON – Mitchell Zone 
Uncapped Cu Statistics Above Cut-off Capped Cu Statistics Above Cut-off
Cu
Cut- Total Mean Mean
off Metres Inc. Cu Grd-Thk Inc. Std. Cu Grd-Thk Inc. Std.
CUZON (g/t) (m) (%) (%) (%-m) (%) Dev CV (%) (%-m) (%) Dev CV
All Data 0.00 54,433 86 0.15 8,007 65.7 0.15 1.01 0.14 7,851 67.0 0.11 0.75
0.25 7,561 13 0.36 2,743 27.8 0.28 0.77 0.34 2,588 28.8 0.11 0.31
0.50 625 1 0.83 521 4.1 0.82 0.98 0.65 324 4.0 0.14 0.21
1.00 107 0 1.80 192 2.4 1.65 0.92 1.22 7 0.1 0.21 0.18
Leach 0.00 6 0 1.11 7 0.0 0.55 0.50 0.98 6 0.0 0.38 0.39
Breccia 0.25 6 0 1.11 7 0.0 0.55 0.50 0.98 6 0.0 0.38 0.39
0.50 6 67 1.11 7 43.7 0.55 0.50 0.98 6 49.2 0.38 0.39
1.00 2 33 1.87 4 56.3 0.00 0.00 1.50 3 50.8 0.00 0.00
Bornite 0.00 194 10 0.95 185 1.7 0.71 0.74 0.33 63 5.0 0.06 0.19
Breccia 0.25 174 25 1.05 182 10.5 0.69 0.66 0.35 60 95.0 0.01 0.04
0.50 125 24 1.30 163 17.2 0.66 0.50 0.00 0 0.0 0.00 0.00
1.00 78 40 1.68 131 70.6 0.56 0.33 0.00 0 0.0 0.00 0.00
0.30% 0.00 6,006 43 0.28 1,694 28.7 0.12 0.42 0.28 1,693 28.7 0.12 0.41
Envelope 0.25 3,443 53 0.35 1,209 61.8 0.11 0.30 0.35 1,207 61.8 0.10 0.30
0.50 254 4 0.64 162 9.3 0.12 0.19 0.63 160 9.5 0.11 0.17
1.00 4 0 1.11 4 0.3 0.05 0.04 0.00 0 0.0 0.00 0.00
0.20% 0.00 13,451 78 0.20 2,751 64.5 0.09 0.46 0.20 2,747 64.5 0.09 0.44
Envelope 0.25 2,977 21 0.33 978 32.0 0.11 0.32 0.33 974 32.0 0.09 0.28
0.50 148 1 0.66 98 3.3 0.23 0.34 0.64 94 3.4 0.11 0.18
1.00 4 0 1.80 7 0.3 0.47 0.26 0.00 0 0.0 0.00 0.00
0.10% 0.00 16,818 97 0.13 2,144 91.7 0.06 0.49 0.13 2,142 91.7 0.06 0.48
Envelope 0.25 535 3 0.33 179 7.3 0.13 0.38 0.33 177 7.3 0.10 0.30
0.50 31 0 0.70 22 0.8 0.30 0.42 0.64 20 0.9 0.13 0.20
1.00 3 0 1.62 4 0.2 0.14 0.09 0.00 0 0.0 0.00 0.00
0.05% 0.00 6,536 99 0.07 466 90.2 0.23 3.28 0.07 439 95.8 0.05 0.73
Envelope 0.25 36 0 1.28 46 1.2 2.91 2.28 0.52 19 1.3 0.29 0.55
0.50 16 0 2.55 40 0.3 4.05 1.59 0.83 13 3.0 0.14 0.17
1.00 13 0 3.02 38 8.2 4.37 1.45 0.00 0 0.0 0.00 0.00
Undefined 0.00 11,422 97 0.07 760 81.1 0.08 1.23 0.07 760 81.1 0.08 1.23
0.25 390 3 0.37 144 14.9 0.14 0.39 0.37 144 14.9 0.14 0.39
0.50 45 0 0.69 31 3.5 0.17 0.24 0.69 31 3.5 0.17 0.24
1.00 4 0 1.06 4 0.5 0.02 0.02 1.06 4 0.5 0.02 0.02

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14.1.3 ASSAY GRADE CAPPING – SULPHURETS AND MITCHELL 
RMI used cumulative probability plots to identify high-grade outliers for both gold and
copper assays. Figure 14.1 through Figure 14.4 show cumulative probability plots using
the cumulative normal distribution function for gold and copper by mineral zone. Black
circles in the cumulative probability plots approximate the capping limits that were
established for each metal.

Figure 14.1  Sulphurets Zone Gold Assay Cumulative Probability Plot 
100.00

10.00
Gold (g/t)

1.00

All Au Below STF

Log normal Approximation

0.10

0.01
-3 -2 -1 0 1 2 3 4 5

Cumulative Normal Distribution Function

Figure 14.2  Mitchell Zone Gold Assay Cumulative Probability Plot 
100.000

10.000

1.000
Gold (g/t)

Log normal Approximation

0.100

All Mitchell Au Assays

0.010

0.001
-2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

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 Figure 14.3  Sulphurets Zone Copper Assay Cumulative Probability Plot 
10.000

1.000
Copper (%)

0.100 Log Normal Approximation

All Cu below STF

0.010

0.001
-3 -2 -1 0 1 2 3 4 5

Cumulative Normal Distribution Function

Figure 14.4  Mitchell Zone Copper Assay Cumulative Probability Plot 
10.000

1.000
Copper (%)

0.100 Log Normal Approximation

All Mitchell Cu Assays

0.010

0.001
-3 -2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

Based on the information shown in Figure 14.1 through Figure 14.4 and other cumulative
probability plots not shown, RMI capped raw gold and copper assays at the area
highlighted by the black circle where the distribution of grades becomes erratic.

Table 14.5 through Table 14.7 summarize the capping limits that were established for
gold, copper, and silver/molybdenum for the Sulphurets and Mitchell mineral zones.

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 Table 14.5  Sulphurets and Mitchell Gold Grade Capping Limits 
Cap Grade
Zone Attribute (g/t)
Sulphurets Main Cu Hazelton 4.00
Main Cu Monzonite 1.25
Main Au Zone 5.00
Leach Au Zone 1.25
Raewyn Copper 7.00
Lower Au Zone 4.00
FW Hazelton 1.25
Mitchell All 5.00

Table 14.6  Sulphurets and Mitchell Copper Grade Capping Limits 
Cap Grade
Zone Attribute (%)
Sulphurets Main Cu Hazelton 0.70
Main Cu Monzonite 0.20
Main Au Zone 0.50
Leach Au Zone 0.20
Raewyn Copper 2.00
Lower Au Zone 1.00
FW Hazelton 0.30
Mitchell Upper Plate 0.90
Lower Plate 0.90
Bornite Breccia 1.50
Bornite Leach Breccia 0.35

Table 14.7  Silver and Molybdenum Grade Capping Limits 
Ag Mo
Zone Attribute (g/t) (ppm)
Sulphurets Main Cu Hazelton 20 500
Main Cu Monzonite 20 500
All Others 30 1,250
Mitchell All 180 1,200

14.1.4 DRILL HOLE COMPOSITES – SULPHURETS AND MITCHELL 
The raw drill hole data were composited into 15 m long composites starting from the drill
hole collar. Most of the original assay data were in the range of 1.5 to 3.0 m long, with
the majority being 2 m long. Based on the scale of the deposit, 15 m long composites
were deemed to be an appropriate length for estimating Mineral Resources.

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 The assays were composited using MineSight® software. Various geologic data were
assigned to the 15 m long composites using the majority rule method.

14.1.5 GEOLOGIC CONSTRAINTS ‐ SULPHURETS AND MITCHELL 
Various lithologic, alteration, structural domains, and metal grade envelopes were
constructed for the Sulphurets and Mitchell deposits by RMI and Seabridge personnel.
Most of these 3D wireframes were initially interpreted onto cross sections, which were
then reconciled in bench plan prior to building the final wireframe.

As previously mentioned, gold and copper grades within the deposits are not necessarily
confined to distinct geologic units (e.g. lithology, alteration, etc.). For this reason, hybrid
gold and copper envelopes were used to constrain the estimate of block grades for the
Sulphurets and Mitchell deposits. Constraints used to estimate gold, silver, copper, and
molybdenum are summarized in Table 14.8 for the Sulphurets and Mitchell deposits.

Table 14.8  Constraints Used to Estimate Block Grades – Sulphurets and Mitchell 
Mineral Zone Au Ag Cu Mo
Sulphurets AUZON AUZON CUZON CUZON
Mitchell AUZON AUZON CUZON CUZON

The AUZON and CUZON wireframes for the Sulphurets and Mitchell zones are a
combination of lithology/alteration and grade. In the case of the Mitchell Zone, the
AUZON’s and CUZON’s were more heavily weighted towards grade. A series of gold and
copper grade envelopes were designed as 3D wireframes for the Mitchell and Sulphurets
zones. In the Sulphurets Zone, the STF was used to define upper and lower plates. In
the Mitchell Zone, the MTF was used to define upper and lower plates. Table 14.9 and
Table 14.10 summarize definitions for AUZON and CUZON, respectively.

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 Table 14.9  AUZON Code Definitions 
AUZON Description
1 Sulphurets Main Gold Zone
2 Sulphurets Leach Gold Zone
3 Sulphurets Raewyn Copper Zone
4 Sulphurets Lower Gold Zone
5 Sulphurets FW Hazelton
6 Sulphurets HW Hazelton
7 Sulphurets Main Copper Monzonite
8 Mitchell Leach Breccia Zone
9 Mitchell Bornite Breccia
10 Mitchell 1.00 g/t Gold Envelope
11 Mitchell 0.75 g/t Gold Envelope
12 Mitchell 0.50 g/t Gold Envelope
13 Mitchell 0.25 g/t Gold Envelope
14 Mitchell 0.10 g/t Gold Envelope
29 Default Code

Table 14.10  CUZON Code Definitions 
CUZON Description
1 Sulphurets Main Gold Zone
2 Sulphurets Leach Gold Zone
3 Sulphurets Raewyn Copper Zone
4 Sulphurets Lower Gold Zone
5 Sulphurets FW Hazelton
6 Sulphurets HW Hazelton
7 Sulphurets Main Copper Monzonite
8 Mitchell Leach Breccia Zone
9 Mitchell Bornite Breccia
10 Mitchell 0.30% Copper Envelope
11 Mitchell 0.20% Copper Envelope
12 Mitchell 0.10% Copper Envelope
13 Mitchell 0.05% Copper Envelope
29 Default Code

14.1.6 VARIOGRAPHY – SULPHURETS AND MITCHELL 
RMI generated a number of gold and copper correlograms and variograms using both drill
hole assays and 15 m long drill hole composites. Figure 14.5 and Figure 14.6 show gold
grade correlograms for the Sulphurets and Mitchell zones, respectively. Figure 14.7 and
Figure 14.8 show copper grade correlograms for the Sulphuretsand Mitchell, zones,
respectively. Figure 14.9 and Figure 14.10 show 0.5 g/t gold equivalent (AuEQ)
correlograms for the Sulphurets and Mitchell zones, respectively.

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 Figure 14.5  Sulphurets Zone Gold Grade Correlogram 

MEAN = 0.40360 STD. DEV= 0.37959 NO. = 2477

LOG MEAN= 1.34398 LOG STDV= 1.05039 C.V.= 0.94

2.0
NUGGET= 0.29401
SILL = 0.36166
RANGE = 251.4
SILL = 0.34433
1.5 RANGE = 413.8
GA MMA (H)

1.0
0.5
0.5

0.5 HORZ WIN= 15.00

VERT WIN= 15.00
ANGLE
HORZ VERT
0 0

0.0
167 200 221 400 600 800 1000

Range (m)
Sulphurets AUCAP Correlogram

Figure 14.6  Mitchell Zone Gold Grade Correlogram 

MEAN = 0.48774 STD. DEV= 0.32924 NO. = 3336

LOG MEAN= 1.63361 LOG STDV= 0.97752 C.V.= 0.68

2.0
NUGGET= 0.09342
SILL = 1.00000
RANGE = 555.1

1.5
Gamma (H)

1.0
0.9
0.8

0.5 HORZ WIN= 15.00

VERT W IN= 15.00
ANGLE
HORZ VERT
0 0

0.0
200 400 600 800 1000
325 396
Range (m)
Mitchell AUCAP Correlogram

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 Figure 14.7  Sulphurets Zone Copper Grade Correlogram 

MEAN = 0.13584 STD. DEV= 0.15597 NO. = 2418

LOG MEAN= 0.05995 LOG STDV= 1.29907 C.V.= 1.15

2.0
NUGGET= 0.10132
SILL = 0.57213
RANGE = 172.0
SILL = 0.32654
1.5
RANGE = 444.2
GA MMA (H)

1.0
0.9
0.8

0.5 HORZ WIN= 15.00

VERT W IN= 15.00
ANGLE
HORZ VERT
0 0

0.0
142 200 222 400 600 800 1000

Range (m)
Sulphurets CUCAP Correlogram

Figure 14.8  Mitchell Zone Copper Grade Correlogram 

MEAN = 0.14115 STD. DEV= 0.10461 NO. = 3360

LOG MEAN= 0.42965 LOG STDV= 0.90319 C.V.= 0.74

2.0
NUGGET= 0.10551
SILL = 0.12695
RANGE = 141.5
SILL = 0.22367
1.5 RANGE = 543.1
0.54388
RANGE = 712.0
Gamma (H)

1.0
0.9
0.8

0.5 HORZ WIN= 15.00

VERT WIN= 15.00
ANGLE
HORZ VERT
0 0

0.0
200 362 400 600 800 1000
459
Range (m)
Mitchell CUCAP Correlogram

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 Figure 14.9  Sulphurets Zone 0.5 g/t AuEQ Correlogram 

MEAN = 1.11270 STD. DEV= 0.63650 NO. = 1382

LOG MEAN= 2.61040 LOG STDV= 0.92688 C.V.= 0.57

2.0
NUGGET= 0.34144
SILL = 0.25198
RANGE = 131.1
SILL = 0.40658
1.5 RANGE = 312.2
GA MMA (H)

1.0
0.9
0.8

0.5 HORZ WIN= 15.00

VERT WIN= 15.00
ANGLE
HORZ VERT
0 0

0.0
115 200 400 600 800 1000
176
Range (m)
Sulphurets 0.5 g/t AUEQV Correlogram

Figure 14.10  Mitchell Zone 0.5 g/t AuEQ Correlogram 

MEAN = 1.08745 STD. DEV= 0.45492 NO. = 2320

LOG MEAN= 2.69345 LOG STDV= 0.41708 C.V.= 0.42

2.0
NUGGET= 0.17200
SILL = 1.00000
RANGE = 454.0

1.5
Gamma (H)

1.0
0.9
0.8

0.5 HORZ WIN= 15.00

VERT WIN= 15.00
ANGLE
HORZ VERT
0 0

0.0
200 256 400 600 800 1000
317
Range (m)
Mitchell 0.5 g/t AUEQV Correlogram

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 The correlograms shown in Figure 14.5 through Figure 14.10 were modelled as either
single structure spherical or nested spherical models. Total ranges for gold for each zone
are as follows:

 Sulphurets: 414 m
 Mitchell: 555 m.

At 80% of the total sill, gold ranges were interpreted for each zone as follows:

 Sulphurets: 167 m
 Mitchell: 325 m.

Total ranges for copper for each zone are as follows:

 Sulphurets: 444 m
 Mitchell: 712 m.

At 80% of the total sill, copper ranges were interpreted for each zone as follows:

 Sulphurets: 142 m
 Mitchell: 362 m.

Total ranges for AuEQ grades for each zone are as follows:

 Sulphurets: 312 m
 Mitchell: 454 m.

At 80% of the total sill, AuEQ ranges were interpreted for each zone as follows:

 Sulphurets: 115 m
 Mitchell: 256 m.

14.1.7 GRADE ESTIMATION PARAMETERS – SULPHURETS‐MITCHELL 
RMI constructed a 3DBM using MineSight®, a widely recognized commercial mine
engineering software package. Table 14.11 summarizes various block parameters for
this non-rotated model which uses NAD83 UTM coordinates.

Table 14.11  KSM Block Model Dimensions 
NAD83 Coordinates Block Areal
Size No. of Extent
Parameter Minimum Maximum (m) Blocks (m)
Easting 420,500 425,900 25 216 5,400
Northing 6,257,800 6,269,000 25 448 11,200
Elevation -210 2,145 15 157 2,355

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 Block gold, silver, copper, and molybdenum grades were estimated by two methods:
inverse distance weighting (IDW), and nearest neighbour (NN). RMI notes that the
MineSight® block model described in Table 14.11 contains block grades for all four KSM
deposits but the Kerr and Iron Cap grades in that model are obsolete. Block modeling
methods for those two areas are discussed in Sections 14.2.5 and 14.3.5. Gold and
copper Mineral Resources summarized in this report are based on inverse distance
squared or inverse distance cubed methods.

A multi-pass estimation strategy was used for gold, silver, copper, and molybdenum. The
first and second estimation passes required two or more drill holes to estimate block
grades while the final pass acted as “cleanup” run that filled un-estimated blocks by
using a larger search ellipse and requiring fewer drill holes. The IDW estimation plans
used strict block/composite matching.

Table 14.12 summarizes the parameters used to estimate block gold and silver grades
for the Sulphurets Zone. Once a block was estimated, it was flagged so it would not be
re-estimated in subsequent runs. The estimate of Sulphurets gold and silver block grades
was constrained (controlled) by matching block and drill hole AUZON composite codes
(Table 14.9) shows the definition of AUZON codes). The last two interpolation runs shown
in Table 14.12 estimated block grades above the STF, while all of the prior runs
estimated blocks below the STF. The number of composites and drill holes used to
estimate block gold and silver grades were stored along with the distance to the closet
composite.

Table 14.12  Sulphurets Zone Gold Estimation Parameters 
Ellipse Search Number of Search Ellipse
Ranges (m) Composites Used Rotations (LRL)
Estimation AUZON ID Max
Pass Codes Power X Y Z Min Max Hole ROTN DIPN DIPE
1 1, 2, 3, 4, 5 3 75 75 15 3 6 2 50 15 35
2 1, 2, 3, 4, 5 3 125 125 25 3 6 2 50 15 35
3 1, 2, 3, 4, 5 3 200 200 25 1 3 1 50 15 35
1 29 3 75 75 15 3 6 2 50 15 35
2 29 3 125 125 25 1 3 1 50 15 35
1 6, 7, 29 3 75 75 15 3 6 2 50 15 35
2 6, 7, 29 3 125 125 25 1 3 1 50 15 35
Notes: ROTN = Rotation about Z axis - new north axis
DIPN = Rotation about X axis - dip of new north axis
DIPE = Rotation about Y axis - dip of new east-west axis
LRL = “Left-hand-right hand-left hand” rotation rule

Table 14.13 summarizes the parameters used to estimate block gold and silver grades
for the Mitchell Zone. Similar to Sulphurets, AUZON codes were used to constrain the
estimate of block gold/silver grades for the Mitchell Zone. In addition to AUZON codes,
block/composite position relative to the MTF was also used to limit or constrain the
estimate of block grades. The field “FLTAR” (fault block) shown in Table 14.13 shows
two codes where five means above the MTF and six means below the MTF. Similar to the

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 Sulphurets estimation plan, the number of composites and drill holes used to estimate
block grades were stored in addition to the distance of the closest composite.

Table 14.13  Mitchell Gold/Silver Estimation Parameters 
Ellipse Search Number of Search Ellipse
Ranges (m) Composites Used Rotations (LRL)
Estimation ID Max/
Pass AUZON Power FLTAR X Y Z Min Max Hole ROTN DIPN DIPE
1 8 2 6 250 250 60 3 8 2 320 -55 0
2 8 2 6 375 375 90 1 3 1 320 -55 0
1 9 2 6 250 250 60 3 8 2 320 -55 0
2 9 2 6 500 500 120 1 3 1 320 -55 0
1 10,11,12 2 5 125 125 30 3 8 2 60 0 40
2 10,11,12 2 5 250 250 60 3 8 2 60 0 40
3 10,11,12 2 5 375 375 90 3 8 2 60 0 40
4 10,11,12 2 5 500 500 120 1 3 1 60 0 40
1 10,11,12 2 6 125 125 30 3 8 2 60 0 40
2 10,11,12 2 6 250 250 60 3 8 2 60 0 40
3 10,11,12 2 6 375 375 90 3 8 2 60 0 40
4 10,11,12 2 6 500 500 120 1 3 1 60 0 40
1 13,14 2 5 125 125 30 3 8 2 60 0 40
2 13,14 2 5 250 250 60 3 8 2 60 0 40
3 13,14 2 5 375 375 90 3 8 2 60 0 40
4 13,14 2 5 500 500 120 1 3 1 60 0 40
1 13,14 2 6 125 125 30 3 8 2 60 0 40
2 13,14 2 6 250 250 60 3 8 2 60 0 40
3 13,14 2 6 375 375 90 3 8 2 60 0 40
4 13,14 2 6 500 500 120 1 3 1 60 0 40
1 29 2 5 150 150 45 3 8 2 60 0 40
2 29 2 5 300 300 100 1 3 1 60 0 40
1 29 2 6 150 150 45 3 8 2 60 0 40
2 29 2 6 300 300 100 1 3 1 60 0 40

Table 14.14 summarizes the key estimation parameters that were used to estimate
block copper and molybdenum grades using IDW methods for the Sulphurets Zone. The
plan used CUZON and FLTAR codes to constrain the estimate of block grades. CUZON
codes are described in Table 14.14. FLTAR codes 1 and 2 refer to blocks/drill holes
below and above the STF, respectively. Like the previously described estimation plans,
the number of composites and drill holes were stored along with the distance to the
closest composite.

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 Table 14.14  Sulphurets Copper/Molybdenum Estimation Parameters 
Ellipse Search Number of Search Ellipse
Ranges (m) Composites Used Rotations (LRL)
Estimation ID Max/
Pass CUZON Power FLTAR X Y Z Min Max Hole ROTN DIPN DIPE
1 1, 2, 3, 4, 5 3 2 75 75 15 3 6 2 50 15 35
2 1, 2, 3, 4, 5 3 2 125 125 25 3 6 2 50 15 35
3 1, 2, 3, 4, 5 3 2 200 200 25 1 3 1 50 15 35
1 29 3 2 75 75 15 3 6 2 50 15 35
2 29 3 2 125 125 25 1 3 1 50 15 35
1 6,7 3 1 75 75 15 3 6 2 50 15 35
2 6,7 3 1 175 175 25 1 3 1 50 15 35
1 29 3 1 75 75 15 3 6 2 50 15 35
2 29 3 1 125 125 25 1 3 1 50 15 35

Table 14.15 summarizes the key estimation parameters that were used to estimate
block copper grades using IDW methods for the Mitchell Zone. The plan used CUZON
and FLTAR codes to constrain the estimate of block grades. CUZON codes are described
in Table 14.15. FLTAR codes 5 and 6 refer to blocks/drill holes above and below the
MTF, respectively. Like the previously described estimation plans, the number of
composites and drill holes were stored along with the distance to the closest composite.

Table 14.16 summarizes the key estimation parameters that were used to estimate
block molybdenum grades using IDW squared methods for the Mitchell Zone. The
estimate of block molybdenum grades were constrained by a 3D molybdenum grade shell
wireframe that was constructed using a 50 ppm cut-off grade. Blocks located inside and
outside of that wireframe could only be estimated by drill hole composites located inside
or outside of the wireframe, respectively.

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 Table 14.15  Mitchell Copper Estimation Parameters 
Ellipse Search Number of Search Ellipse
Ranges (m) Composites Used Rotations (LRL)
Estimation ID Max/
Pass CUZON Power FLTAR X Y Z Min Max Hole ROTN DIPN DIPE
1 10, 11, 12 2 5 125 125 30 3 8 2 60 0 40
2 10, 11, 12 2 5 250 250 60 3 8 2 60 0 40
3 10, 11, 12 2 5 500 500 120 1 3 1 60 0 40
1 13 2 5 250 250 60 3 8 2 60 0 40
2 13 2 5 500 500 120 1 3 1 60 0 65
1 29 2 5 150 150 45 3 8 2 60 0 65
2 29 2 5 150 150 45 1 3 1 60 0 65
1 10, 11, 12 2 6 125 125 30 3 8 2 60 0 65
2 10, 11, 12 2 6 250 250 60 3 8 2 60 0 40
3 10, 11, 12 2 6 500 500 120 1 3 1 60 0 40
1 13 2 6 250 250 60 3 8 2 60 0 40
2 13 2 6 500 500 120 1 3 1 60 0 40
1 8 2 6 300 300 75 1 6 2 320 -55 0
1 9 2 6 300 300 75 3 8 2 320 -55 0
2 9 2 6 300 300 75 1 6 2 320 -55 0
1 29 2 6 150 150 45 3 8 2 45 60 0
2 29 2 6 150 150 45 1 3 1 45 60 0

Table 14.16  Mitchell Molybdenum Grade Estimation Parameters 
Ellipse Search Number of Search Ellipse
Ranges (m) Composites Used Rotations (LRL)
Estimation IDW Max
Pass Power X Y Z Min Max Hole ROTN DIPN DIPE
1 2 300 300 300 1 3 1 20 0 45
2 2 250 250 60 3 8 2 20 0 45

14.1.8 GRADE MODEL VERIFICATION ‐ SULPHURETS AND MITCHELL 
Estimated block grades were verified by visual and statistical methods. RMI visually
compared estimated block grades (gold, silver, copper, and molybdenum) with drill hole
composite grades. In RMI’s opinion there is a reasonable comparison between the drill
hole composite grades and the estimated block grades. Figure 14.11 and Figure 14.12
are northwest-southeast cross sections through the Sulphurets block model drawn at
Cross Section 23. For reference, Cross Section 23 is shown in Figure 10.3, a drill hole
plan map for the Sulphurets deposit. These figures show estimated block/composite
gold grades (Figure 14.11) and block/composite copper grades (Figure 14.12). Figure
14.13 and Figure 14.14 are block model level maps drawn at the 1,275 m elevation
through the Sulphurets model showing estimated block/composite gold and copper

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 grades, respectively. Figure 14.15 and Figure 14.16 are northeast-southwest cross
sections through the Mitchell block model drawn at Cross Section 11. For reference,
Cross Section 11 is shown in Figure 10.4, a drill hole plan map for the Mitchell deposit.
These figures show estimated block/composite gold grades (Figure 14.15) and
block/composite copper grades (Figure 14.16, Figure 14.17, and Figure 14.18) are block
model level maps drawn at the 660 m elevation through the Mitchell model showing
estimated block/composite gold and copper grades, respectively.

The dashed black line shown on the block model cross sections and level plans shown in
Figure 14.11 through Figure 14.18 represent a conceptual pit generated by RMI using
gold and copper prices of US$1,300/oz and US$3.00/lb, respectively.

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Figure 14.11  Sulphurets Zone Gold Block Model Cross Section 23 

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Figure 14.12  Sulphurets Zone Copper Block Model Cross Section 23 

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Figure 14.13  Sulphurets Zone Gold Block Model – 1,275 m Level 

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Figure 14.14  Sulphurets Zone Copper Block Model – 1,275 m Level 

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Figure 14.15  Mitchell Zone Gold Block Model Cross Section 11 

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Figure 14.16  Mitchell Zone Copper Block Model Cross Section 11 

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Figure 14.17  Mitchell Zone Gold Block Model – 660 m Level 

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Figure 14.18  Mitchell Zone Copper Block Model – 660 m Level 

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 RMI generated NN models for gold, copper, silver, and molybdenum in order to check for
potential global biases in the estimated block grades. Table 14.17 compares mean NN
and IDW grades at a zero cut-off grade for the Sulphurets and Mitchell zones by Mineral
Resource category.

The results show that the IDW models compare very well with the NN grades for the
Measured + Indicated (MI) category (only the Mitchell Zone has Measured Resources).
There are wider differences in mean grades for Inferred material, which is based on less
drilling, hence lower confidence levels in those estimates.

Possible local biases in the estimate of block grades were examined by preparing a set of
“swath plots” for gold and copper. These plots compare mean estimated IDW gold and
copper grades (AUIDW and CUIDW) with NN gold and copper (AUNN and CUNN) estimates
by block model columns (eastings), rows (northings), and levels (elevation). Gold and
copper swath plots by elevation are shown in Figure 14.19 and Figure 14.20 for the
Sulphurets and Mitchell zones, respectively. These plots were drawn for Measured
(Mitchell only) and Indicated Resources. The number of blocks by elevation is shown by
the heavy black line and the units are read from the Y-axis on the right side of the plots.

In RMI’s opinion, the swath plots shown in Figure 14.19 and Figure 14.20 show a close
comparison between the IDW and NN estimates. There do not appear to be any severe
local biases in the estimate of gold and copper. Based on visual and statistical checks, it
is the opinion of RMI that the Sulphurets and Mitchell grade models are globally unbiased
and represent reasonable estimates of in situ block grades.

Table 14.17  Grade Model Bias Checks 
Sulphurets Zone

Indicated Inferred
Metal IDW Grade NN Grade % Diff IDW Grade NN Grade % Diff
Gold (g/t) 0.5562 0.5583 -0.4% 0.3198 0.3182 0.5%
Copper (%) 0.1985 0.1982 0.2% 0.0936 0.0928 0.9%
Silver (g/t) 0.9258 0.9315 -0.6% 1.2817 1.2796 0.2%
Molybdenum (ppm) 53.2 52.9 0.6% 21.4 21.0 1.9%
Mitchell Zone

Measured+Indicated Inferred
Metal IDW Grade NN Grade % Diff IDW Grade NN Grade % Diff
Gold (g/t) 0.5778 0.5806 -0.5% 0.3877 0.3801 2.0%
Copper (%) 0.1609 0.1606 0.2% 0.1246 0.1216 2.5%
Silver (g/t) 3.0758 3.1265 -1.6% 3.1082 3.0823 0.8%
Molybdenum (ppm) 59.4 60.0 -1.0% 52.9 56.1 -5.7%

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 Figure 14.19  Sulphurets Zone Gold‐Copper Swath Plots by Elevation 

AUNN AUIDW No. Blks

0.85 500

0.75 400

Number of Blocks
Mean Au (g/t)

0.65 300

0.55 200

0.45 100

0.35 0

Elevation

CUNN CUIDW No. Blks

0.40 500

0.32 400

Number of Blocks
Mean Cu (%)

0.24 300

0.16 200

0.08 100

0.00 0

Elevation

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 Figure 14.20  Mitchell Zone Gold‐Copper Swath Plots by Elevation 

AUNN AUIDW No. Blks

0.65 2500

0.60 2000

Number of Blocks
Mean Au (g/t)

0.55 1500

0.50 1000

0.45 500

0.40 0

Elevation

CUNN CUIDW No. Blks

0.22 2500

0.20 2000

Number of Blocks
Mean Cu (%)

0.18 1500

0.16 1000

0.14 500

0.12 0

Elevation

14.1.9 RESOURCE CLASSIFICATION – SULPHURETS AND MITCHELL 
RMI classified Sulphurets and Mitchell estimated block grades into Measured (Mitchell
only), Indicated, and Inferred Mineral Resources using a combination of distance to data,
a required number of drill holes, and manually constructed shapes that represent
“mineralized continuity”.

To define mineralized continuity, RMI created probabilistic (indicator) AuEQ models for
each mineralized zone using a 0.5 g/t AuEQ cut-off. Blocks with an estimated probability
in excess of 50% of being above a 0.50 g/t AuEQ cut-off were used as a guide in drawing
mid-bench polygons that defined mineralized continuity. The indicator probability model
required that at least three drill holes were used to estimate block probabilities using a
150 m spherical search strategy.

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 Blocks for the Sulphurets and Mitchell mineralized zones were initially coded with the
mineralized continuity polygons and were considered to be Indicated Resources (code =
2). A default code of 5 was assigned to all other blocks. Then criteria such as distance
to the closest drill hole and a minimum number of drill holes used to estimate the block
grade were tested to see if the block was to remain as an Indicated Resource. If the
criteria were not met, the Indicated blocks were re-assigned to Inferred (code = 3). Table
14.18 summarizes the criteria that were used to establish Indicated Resources.

Table 14.18  Indicated Resource Criteria 
Distance
to Closest
Mineralized Minimum Composite
Zone Block Location No. Holes (m)
Sulphurets Inside mineralized continuity shape ≥2 ≤75
Mitchell Inside mineralized continuity shape and ≥2 ≤125
below MTF

Measured Mineral Resources (code = 1) were only assigned to the Mitchell Zone if:

 the blocks were located inside of the mineralized continuity shape

 they were estimated by two or more holes with the closest being within 50 m or
one hole within 17 m of the block.

Inferred Mineral Resources were assigned to any unclassified blocks (i.e. code = 5) if the
distance to drilling data and the minimum number of holes used to estimate block grades
were met. Table 14.19 summarizes the criteria used to establish Inferred Resources.

Table 14.19  Inferred Resource Criteria 
Distance
Minimum to Closest
Mineralized No. Composite
Zone Block Location Holes (m)
Sulphurets Above STF ≥2 ≤37.5
Above STF ≥1 ≤25
Below STF, inside mineralized continuity shape ≥1 ≤50
Below STF, outside mineralized continuity shape ≥2 ≤50
Below STF, outside mineralized continuity shape ≥1 ≤25
Mitchell Above MTF, inside mineralized continuity shape ≥1 ≤75
Above MTF, outside mineralized continuity shape ≥1 ≤50
Below MTF, inside mineralized continuity shape ≥2 ≤175
Below MTF, outside mineralized continuity shape ≥2 ≤75
Below MTF, outside mineralized continuity shape ≥1 ≤50

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14.2 KERR DEPOSIT 
Since the 2012 PFS (Tetra Tech 2012) was published, Seabridge has focused their
exploration efforts at trying to locate potentially higher grade copper and gold
mineralization located below the recognized near surface mineralization at the Kerr
deposit. Drill campaigns in 2012 through 2015 have progressively provided more insight
into the geometry and extent of mineralization at Kerr.

With substantially deeper drill hole data and an updated geologic interpretation, a new
block model was constructed for the Kerr deposit. The remainder of Section 14.2 deals
with the new Kerr model which replaces the 2012 PFS Kerr Mineral Resource.

14.2.1 METAL DISTRIBUTION – KERR 
The distribution of gold grades based on raw uncomposited data is summarized at four
different cut-off grades by the gold grade envelopes that were used in the block grade
estimation process in Table 14.20. The data in Table 14.20 shows statistics for
uncapped (left portion of table) and statistics for capped assays (right portion of table).
Grade capping of high-grade outliers is discussed in Section 14.2.2. Copper assay
statistics for both uncapped and capped data are summarized in Table 14.21 where the
grades are broken out by copper grade envelopes that were used in the estimate of block
grades.

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Table 14.20  Kerr Gold Assay Statistics 
Uncapped Au Statistics Above Cut-off Capped Au Statistics Above Cut-off

Au
Cut- Total Mean Grd- Mean Grd-
off Meters Inc. Au Thk Inc. Std. Au Thk Inc. Std.
AUZON (g/t) (m) (%) (g/t) (g/t-m) (%) Dev. CV (g/t) (g/t-m) (%) Dev. CV
All Data 0.00 78,136 40 0.22 17,474 6.8 0.69 3.08 0.21 16,706 7.1 0.41 1.94
0.10 47,263 27 0.34 16,283 17.0 0.86 2.50 0.33 15,515 17.8 0.50 1.52
0.20 26,440 22 0.50 13,307 27.0 1.13 2.24 0.47 12,539 28.2 0.63 1.33
0.40 9,402 12 0.91 8,588 49.1 1.82 1.99 0.83 7,820 46.8 0.96 1.15
<0.10 g/t 0.00 14,897 88 0.06 880 36.5 0.25 4.15 0.05 783 41.0 0.11 2.09
0.10 1,758 7 0.32 559 15.4 0.66 2.06 0.26 462 17.4 0.22 0.83
0.20 762 3 0.56 423 15.2 0.94 1.70 0.43 326 17.1 0.25 0.57
0.40 278 2 1.04 289 32.9 1.44 1.38 0.69 192 24.6 0.22 0.32
Diorite 0.00 981 40 0.25 246 6.7 0.73 2.89 0.19 187 8.8 0.22 1.15
0.10 589 31 0.39 230 17.3 0.91 2.33 0.29 171 22.8 0.24 0.81
0.20 287 17 0.65 187 18.2 1.25 1.92 0.45 128 24.0 0.26 0.57
0.40 122 12 1.17 142 57.8 1.80 1.54 0.68 83 44.4 0.23 0.33
PFMP 0.00 791 60 0.14 109 8.5 0.24 1.75 0.13 101 9.1 0.18 1.43
Dyke 0.10 318 16 0.31 99 17.3 0.30 0.97 0.29 92 18.6 0.20 0.68
0.20 191 17 0.42 81 34.4 0.35 0.83 0.38 73 36.9 0.21 0.54
0.40 56 7 0.77 43 39.7 0.49 0.63 0.64 36 35.4 0.21 0.33
0.10 g/t 0.00 17,280 51 0.13 2,241 19.0 0.50 3.86 0.12 2,006 21.2 0.12 1.03
Shell 0.10 8,445 37 0.21 1,815 39.1 0.71 3.28 0.19 1,579 43.7 0.14 0.73
0.20 2,004 9 0.47 940 18.2 1.42 3.02 0.35 704 20.3 0.20 0.58
0.40 448 3 1.19 532 23.8 2.88 2.42 0.66 297 14.8 0.22 0.33
0.20 g/t 0.00 33,304 22 0.23 7,525 5.0 0.60 2.63 0.22 7,403 5.1 0.33 1.49
Shell 0.10 26,135 36 0.27 7,149 23.2 0.66 2.43 0.27 7,026 23.6 0.36 1.34
0.20 14,251 34 0.38 5,404 41.2 0.88 2.33 0.37 5,282 41.9 0.46 1.25
0.40 2,828 8 0.81 2,302 30.6 1.92 2.36 0.77 2,180 29.4 0.93 1.21
0.40 g/t 0.00 10,834 8 0.58 6,243 0.7 0.96 1.67 0.57 6,125 0.7 0.78 1.38
Shell 0.10 9,979 10 0.62 6,202 2.5 0.99 1.59 0.61 6,084 2.6 0.80 1.31
0.20 8,913 30 0.68 6,044 15.9 1.03 1.52 0.66 5,926 16.2 0.83 1.25
0.40 5,644 52 0.90 5,053 80.9 1.25 1.39 0.87 4,935 80.6 0.98 1.12
4.00 g/t 0.00 49 19 4.67 229 0.2 11.48 2.46 2.06 101 0.4 3.33 1.61
Shell 0.10 40 15 5.75 229 0.5 12.50 2.18 2.53 101 1.1 3.53 1.40
0.20 33 12 7.01 228 0.8 13.52 1.93 3.07 100 1.9 3.70 1.21
0.40 27 54 8.45 226 98.5 14.51 1.72 3.66 98 96.6 3.84 1.05

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Table 14.21  Kerr Copper Assay Statistics 
Uncapped Cu Statistics Above Cut-off Capped Cu Statistics Above Cut-off

Cu Total Mean Grd- Mean Grd-

Cut-off Meters Inc. Cu Thk Inc. Std. Cu Thk Inc. Std.
CUZON (%) (m) (%) (%) (%-m) (%) Dev. CV (%) (%-m) (%) Dev. CV
All Data 0.00 78,136 64 0.26 20,591 16.4 0.36 1.38 0.26 20,523 16.5 0.36 1.36
0.25 27,743 17 0.62 17,208 23.8 0.41 0.66 0.62 17,140 23.9 0.39 0.64
0.50 14,138 14 0.87 12,311 36.5 0.44 0.51 0.87 12,243 36.6 0.42 0.48
1.00 3,282 4 1.46 4,793 23.3 0.57 0.39 1.44 4,725 23.0 0.51 0.36
<0.10% 0.00 23,224 99 0.03 621 83.8 0.10 3.61 0.03 602 86.5 0.06 2.16
0.25 146 0 0.69 101 4.9 0.96 1.39 0.56 81 5.1 0.31 0.56
0.50 58 0 1.20 70 4.2 1.36 1.13 0.87 51 4.3 0.27 0.31
1.00 21 0 2.14 44 7.1 1.97 0.92 1.20 25 4.1 0.08 0.06
Diorite 0.00 981 94 0.08 75 68.4 0.11 1.39 0.08 75 68.4 0.11 1.39
0.25 61 5 0.39 24 19.2 0.15 0.38 0.39 24 19.2 0.15 0.38
0.50 15 2 0.61 9 12.4 0.09 0.14 0.61 9 12.4 0.09 0.14
1.00 0 0 0.00 0 0.0 0.00 0.00 0.00 0 0.0 0.00 0.00
PFMP 0.00 791 75 0.17 136 15.3 0.29 1.70 0.17 131 15.8 0.26 1.57
Dyke 0.25 197 11 0.58 115 24.4 0.33 0.57 0.56 111 25.2 0.24 0.42
0.50 111 12 0.74 82 43.5 0.37 0.49 0.70 78 45.0 0.22 0.32
1.00 15 2 1.49 23 16.9 0.49 0.33 1.19 18 14.0 0.06 0.05
0.10% 0.00 17,740 90 0.13 2,285 66.4 0.14 1.08 0.13 2,277 66.7 0.13 1.05
Shell 0.25 1,774 8 0.43 767 19.8 0.23 0.54 0.43 759 19.8 0.21 0.49
0.50 414 2 0.76 315 10.5 0.28 0.36 0.74 307 10.6 0.21 0.28
1.00 58 0 1.30 75 3.3 0.33 0.25 1.16 67 2.9 0.10 0.08
0.25% 0.00 15,529 46 0.28 4,302 22.3 0.19 0.69 0.28 4,278 22.4 0.18 0.65
Shell 0.25 8,401 46 0.40 3,345 57.9 0.17 0.44 0.40 3,321 58.2 0.15 0.37
0.50 1,245 7 0.69 856 16.8 0.28 0.41 0.67 832 16.9 0.18 0.27
1.00 94 1 1.43 135 3.1 0.54 0.38 1.18 111 2.6 0.09 0.07
0.50% 0.00 10,066 19 0.47 4,730 5.0 0.28 0.60 0.47 4,730 5.0 0.28 0.60
Shell 0.25 8,195 37 0.55 4,492 30.4 0.25 0.45 0.55 4,492 30.4 0.25 0.45
0.50 4,450 41 0.69 3,056 55.6 0.26 0.38 0.69 3,056 55.6 0.26 0.38
1.00 297 3 1.43 425 9.0 0.50 0.35 1.43 424 9.0 0.49 0.35
0.75% 0.00 5,481 11 0.67 3,697 1.5 0.32 0.48 0.67 3,697 1.5 0.32 0.48
Shell 0.25 4,892 15 0.74 3,641 8.6 0.27 0.36 0.74 3,641 8.6 0.27 0.36
0.50 4,073 64 0.82 3,322 71.0 0.23 0.28 0.82 3,322 71.0 0.23 0.28
1.00 558 10 1.25 696 18.8 0.27 0.21 1.25 696 18.8 0.27 0.21
>1.00% 0.00 4,324 6 1.10 4,745 0.5 0.64 0.58 1.09 4,733 0.5 0.62 0.57
Shell 0.25 4,077 7 1.16 4,723 2.6 0.61 0.53 1.16 4,710 2.6 0.59 0.51
0.50 3,771 35 1.22 4,601 25.4 0.59 0.48 1.22 4,588 25.5 0.57 0.46
1.00 2,238 52 1.52 3,396 71.6 0.60 0.39 1.51 3,383 71.5 0.56 0.37

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 In general, silver grades tend to be higher in the more intensely mineralized zones
following gold and copper. The average silver grade for the Kerr deposit is approximately
1.6 g/t with only one percent of the data above a 15 g/t cut-off.

Molybdenum grades at Kerr tend to be relatively low averaging approximately 25 ppm

although most of the pre-2009 drill hole samples were not assayed for molybdenum.

14.2.2 HIGH‐GRADE OUTLIERS – KERR 
Cumulative probability plots were used to identify high-grade outliers for gold, copper,
silver, and molybdenum using the original assay samples. The assays were examined
with respect to logged lithology, alteration, and modeled grade envelopes. The assays
were combined into low and high-grade domains for determining grade capping limits.
Figure 14.21 is a cumulative probability plot that shows the distribution of raw gold
assays representing low-grade gold domains (less than 0.2 g/t) including diorite and
PFMP samples. Figure 14.22 is a cumulative probability plot that shows the distribution
of gold grades within combined higher grade domains (greater than or equal to 0.2 g/t).
Capping limits for the two domains are highlighted by the circle where the distribution of
values deviates from an approximated log normal line.

Figure 14.21  Kerr Gold Cumulative Probability Plot – Low‐grade Domains 
100.00

10.00
Au (g/t)

1.00

Log Normal Approximation

0.10
Lower grade Au domains

0.01
-2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

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 Figure 14.22  Kerr Gold Cumulative Probability Plot – High‐grade Domains 
100.00

10.00
Au (g/t)

1.00

Log Normal Approximation

0.10
Higher grade Au domains

0.01
-3 -2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

Figure 14.23 is a cumulative probability plot that shows the distribution of raw copper
assays representing low-grade copper domains (less than 0.25%) including diorite and
PFMP samples. Figure 14.24 is a cumulative probability plot that shows the distribution
of copper assay grades within combined higher grade domains (greater than or equal to
0.25%).

Figure 14.23  Kerr Copper Cumulative Probability Plot – Low‐grade Domains 
10.000

1.000
Cu (%)

0.100

Log Normal Approximation

Low-grade Cu domains

0.010

0.001
-2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

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 Figure 14.24  Kerr Copper Cumulative Probability Plot – High‐grade Domains 
10.000

1.000
Cu (%)

0.100

Log Normal Approximation

Higher-grade Cu domains

0.010

0.001
-3 -2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

Similar plots were constructed for silver and molybdenum. Table 14.22 summarizes the
capping limits that were applied for Kerr gold, copper, silver, and molybdenum assays
along with the number of assays that were capped.

Table 14.22  Kerr Grade Capping Limits 
Gold Assays Silver Assays

AUZON Cap Grade No. Cap Grade No.

(Gold Grade Wireframes) (g/t) Capped (g/t) Capped
Low-grade Domains (<0.2 g/t) 1.0 132 30 62
High-grade Domains (≥0.2 g/t) 10.0 21 100 7
Copper Assays Molybdenum Assays

CUZON Cap Grade No. Cap Grade No.

(Copper Grade Wireframes) (%) Capped (ppm) Capped
Low-grade Domains (<0.25%) 1.25 60
400 16
High-grade Domains (≥0.25%) 4.00 7

14.2.3 DRILL HOLE COMPOSITING – KERR 
Drill hole assay data (both uncapped and capped intervals) were composited into 15 m
long composites starting from the drill hole collar. Most of the original assay data were in
the range of 1.5 to 3.0 m long, with the majority being 2 m long. Based on the scale of
the deposit, 15 m long composites were deemed to be an appropriate length for
estimating Mineral Resources. Two sets of composites were generated, one set used for
estimating precious metal grades (gold and silver) and the other for estimating base
metals (copper and molybdenum). Prior to creating the drill hole composites, the drill

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 hole intervals were coded with the same grade wireframes that were used to constrain
the estimate of block grades (i.e. gold or AUZON and copper or CUZON).

14.2.4 VARIOGRAPHY – KERR 
A variety of grade and indicator variograms were generated for the Kerr deposit using
MineSight® software. Figure 14.25 and Figure 14.26 are down-hole correlograms for
gold and copper, respectively. The down-hole gold correlogram was modeled with a
nugget effect of approximately 0.59 and a range of about 22 m. The down-hole copper
correlogram shows a much lower nugget effect and appreciably longer range than the
gold correlogram.

Figure 14.27 and Figure 14.28 are omni-directional correlograms for gold and copper,
respectively. Nested spherical models were used in modeling the Kerr gold and copper
correlograms shown in Figure 14.27 and Figure 14.28. Ranges of approximately 135 m
and 475 m were modeled for the nested structures (Figure 14.27). The nested Kerr
copper correlogram structures were modeled with ranges of approximately 160 m and
495 m reflecting the more robust nature of copper mineralization at the Kerr deposit.

Figure 14.25  Kerr Down‐hole Gold Correlogram 

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 Figure 14.26  Kerr Down‐hole Copper Correlogram 

Figure 14.27  Kerr Omni‐directional Gold Correlogram 

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 Figure 14.28  Kerr Omni‐directional Copper Correlogram 

14.2.5 GRADE ESTIMATION PARAMETERS – KERR 
After the discovery of deeper mineralization located below the Kerr deposit, a new block
model was established for estimating block grades over a larger vertical extent than was
previously modeled. Table 14.23 summarizes block model dimensions and limits for the
Kerr deposit.

Table 14.23  Kerr Block Model Limits 
NAD83 Coordinates
Block Size Number of Areal Extent
Parameter Minimum Maximum (m) Blocks (m)
Easting 420,350 422,435 15 139 2,085
Northing 6,257,750 6,260,450 15 180 2,700
Elevation -335 1,915 15 150 2,250

Block grades were estimated for the Kerr deposit using a two pass inverse distance
cubed method. Instead of using traditional search ellipses for selecting eligible drill hole
composites, a trend plane strategy was used. The trend plane method involves
identifying the strike and dip of a “domain” and the allowable search distances along
strike, down-dip, and perpendicular to the plane. The QP responsible for this section
believes that this method of selecting samples minimizes grade smearing often
associated with search ellipses and does a better job of ensuring that the distribution of
the estimated block grades reflect the underlying structural controls associated with

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 mineralization. The Kerr deposit was sub-divided into four structural domains based
primarily on the orientation of the copper-gold mineralization and secondarily by the
geometry of alteration and structure. The Kerr deposit consists of two “legs” of
mineralization, an eastern steep (approximately 80°) leg and a shallower western leg (60
to 65°). In plan view, those two mineralized legs tend to have a slight northwesterly
strike in the southern portion of the deposit which changes to a slight northeasterly strike
towards the northern portion of the deposit. Table 14.24 summarizes the strike and dip
values associated with the four structural domains that were used in the grade
estimation plan.

Table 14.24  Kerr Block Model Domains 
Strike Azimuth Dip Angle
Domain (°) (°)
1 165 -62
2 190 -65
3 170 -80
4 182 -80

Gold and silver block grades were estimated using the same parameters and constraints.
Gold grade envelopes and the aforementioned structural domains were the primary
constraint used in the estimate of precious metal block grades. Table 14.25 summarizes
the gold grade envelopes (AUZON) that were used to control the estimate of block gold
and silver grades.

Table 14.25  Kerr Gold Grade Zones (AUZON) 

AUZON
Code Description
1 <0.10 g/t Au
2 Diorite
3 PFMF dyke
10 0.10 to 0.20 g/t Au
20 0.20 to 0.40 g/t Au
40 0.40 to 4.00 g/t Au
50 >4.00 g/t Au

As previously mentioned, a two pass estimation strategy was used to estimate block
precious metal grades which was constrained by four structural domains and seven gold
grade zones. A total of 56 separate interpolation runs were used to estimate Kerr gold
and silver block grades (2 * 4 * 7). The first estimation pass for each domain used
search distances of 400 m by 400 m by 20 m (along strike, down-dip, and perpendicular
to strike). A minimum of three composites were required to estimate block grades with a
maximum of six composites and no more than two composites per drill hole allowed for
both the first and second estimation passes. Blocks estimated by the first pass were
flagged as estimated and not eligible to be estimated by the second pass. The along

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 strike and down-dip ranges of 400 m were kept for the second estimation pass, while the
distance perpendicular to strike was increased to 80 m. This strategy tended to generate
a distribution of grades that appears to reflect the structural control that can be seen
when examining core and drill hole cross sections.

In order to minimize potential boundary effects during the estimation process, the gold
grade envelopes were treated as “soft” contacts. For example, blocks located in the
0.20 g/t gold domain could be estimated by composites from that grade domain and if
available, composites from the next lower gold grade envelope (i.e. 0.10 to 0.20 g/t
domain). This strategy was used for all of the gold grade zones.

The number of composites used to estimate each block, the number of drill holes used,
the distance to the closest composite and the average distance of all composites used
were stored during the estimation process.

The same estimation strategy that was used to estimate precious metal grades was used
to estimate copper and molybdenum block grades (along with arsenic, selenium, sulphur,
calcium, and iron). A two pass inverse distance cubed estimator using a trend plane
sample selection strategy constrained by four structural domains and eight copper grade
domains required 64 separate runs (2 * 4 * 8). Table 14.26 summarizes the eight
copper zones that were used to constrain the estimate of base metals.

Table 14.26  Kerr Copper Grade Zones (CUZON) 

CUZON
Code Description
1 <0.10% Cu
2 Diorite
3 PFMF dyke
10 0.10 to 0.25% Cu
25 0.25 to 0.50% Cu
50 0.50 to 0.75% Cu
75 0.75 to 1.00% Cu
100 >1.00% Cu

Similar to the soft boundaries used in the gold grade estimation plan, all but the highest
grade copper domain (100) were treated as soft domains. For example, blocks in the
0.75 to 1.00% copper domain could be estimated by composites from that domain or if
required, composites from the adjacent lower grade copper domain (0.50 to 0.75%
copper domain). Blocks inside of the 1.0% copper domain were only estimated by
composites from that domain. This decision was made based on observations of high-
grade drill core that distinctly show a sharp contact with lower grade material.

The number of composites, drill holes, and distances to composite data were stored
during the estimation process. These data were used in conjunction with other criteria in
classifying the estimated blocks into various resource categories.

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14.2.6 MODEL VALIDATION – KERR 
Estimated block grades (gold, silver, copper, and molybdenum) were compared to drill
hole composite grades in cross section and level plan views. Figure 14.29 and Figure
14.30 are east-west cross sections drawn through the Kerr block model at 6,259,800
north. These figures show estimated block/composite gold grades (Figure 14.29) and
block/composite copper grades (Figure 14.30). Figure 14.31 and Figure 14.32 are block
model level maps drawn at the 800 m elevation through the Kerr block model showing
estimated block grades and drill hole composite for gold and copper, respectively. The
constraining Mineral Resource pit is shown on the two block model cross sections as a
dashed black line. The three conceptual block cave resource shapes are shown as a
heavy purple line in the block model cross sections and level maps (Figure 14.29 through
Figure 14.32).

Figure 14.29  Kerr Gold Model Section – 6,259,800 North 

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 Figure 14.30  Kerr Copper Model Section – 6,259,800 North 

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 Figure 14.31  Kerr Gold Model – 800 m Level 

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 Figure 14.32  Kerr Copper Model – 800 m Level 

The grade models were also validated by comparing the IDW block grades against NN
models that were generated for gold, copper, silver, and molybdenum. Two NN models
were constructed for each metal. Global NN models with no geologic constraints
generated grades that were approximately 10% higher than the IDW grades. Conditional
NN models that used the same geologic selection criteria as the IDW model compared
more closely with the IDW models. The QP responsible for this section of this Technical
Report believes that the projection of grades from the global (unrestricted) NN models
tended to bias the mean grade and that the conditional NN model represents a more
realistic bench mark.

Table 14.27 compares the IDW grades against the conditional NN models.

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 Table 14.27  Kerr Global Bias Checks) 
Indicated Inferred
Metal IDW Grade NN Grade % Diff IDW Grade NN Grade % Diff
Gold (g/t) 0.1912 0.1931 -1.0% 0.2419 0.2436 -0.7%
Copper (%) 0.3195 0.3261 -2.0% 0.2683 0.2724 -1.5%
Silver (g/t) 1.2402 1.2441 -0.3% 1.6011 1.6080 -0.4%
Molybdenum (ppm) 4.4834 4.7408 -5.4% 18.2884 18.3391 -0.3%

The data in Table 14.27 show that most of the IDW grades are slightly lower than the NN
grades. The lone exception is for Indicated molybdenum where the IDW grade is
approximately 5% lower than the NN grade.

Grade swath plots were generated for rows (east-west), columns (north-south) and levels
(elevations) through the block model comparing the IDW and conditional NN models at a
zero cut-off grade. Figure 14.33 and Figure 14.34 show swath plots for gold and copper,
respectively by elevation. These swath plots show Indicated and Inferred Resource
grades.

Figure 14.33  Kerr Gold Model Swath Plot – Elevations 

AUNN AUIDW No. Blks

0.35 5,000

0.28 4,000

Number of Blocks
Mean Au (g/t)

0.21 3,000

0.14 2,000

0.07 1,000

0.00 0

Elevation

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 Figure 14.34  Kerr Copper Model Swath Plot – Elevations 

CUNN CUIDW No. Blks

0.50 5,000

0.40 4,000

Number of Blocks
Mean Cu (%)

0.30 3,000

0.20 2,000

0.10 1,000

0.00 0

Elevation

In the opinion of the QP responsible for this section, the estimated Kerr block grades are
reasonable and unbiased based on visual and statistical reviews.

14.2.7 RESOURCE CLASSIFICATION – KERR 
Mineral Resources were assigned to the estimated blocks by constructing 3D solids for
Indicated and Inferred Resources. These shapes were based on mineralized continuity
as defined by exploration drill hole results. The Indicated Mineral Resource shape was
locally extended 25 to 100 m deeper than the shape used for the 2012 PFS Mineral
Resource based on drilling results obtained in 2013 through 2015 with an average drill
hole spacing of approximately 50 m. The Inferred Mineral Resource 3D solid was
significantly increased from the 2012 shape by virtue of deeper, relatively wide spaced
drilling that defines two mineralized zones that coalesce near the upper portions of the
Kerr deposit. The average drill hole spacing for Inferred blocks is approximately 125 m.

14.3 IRON CAP DEPOSIT 
Since the 2012 PFS (Tetra Tech 2012) was published coupled with their success at
exploring below the Kerr deposit, Seabridge conducted deeper drilling activities below the
Iron Cap deposit in an effort to locate potentially higher grade copper and gold
mineralization. A drill campaign in 2014 provided more insight into the geometry and
extent of mineralization at Iron Cap.

With substantially more deeper drill hole data and an updated geologic interpretation, a
new block model was constructed for the Iron Cap deposit. The remainder of Section
14.3 deals with the new Iron Cap model which replaces the 2012 PFS Iron Cap Mineral
Resource.

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14.3.1 METAL DISTRIBUTION – IRON CAP 
The distribution of gold grades based on raw uncomposited data is summarized in Table
14.28 at four different cut-off grades by the gold grade envelopes that were used in the
block grade estimation process. The data in Table 14.28 shows statistics for uncapped
(left portion of table) and statistics for capped assays (right portion of table). Grade
capping of high-grade outliers is discussed in Section 14.3.2.

The data shown in Table 14.28 show that the average uncapped gold grade for all Iron
Cap drill hole samples is 0.39 g/t with about 21% of the samples above a 0.5 g/t cut-off.
The CV after capping the high-grade outliers is approximately 1.0 for samples inside of
the 0.25 and 0.50 g/t grade envelopes.

Copper assay statistics for both uncapped and capped data are summarized in Table
14.29 where the grades are broken out by copper grade envelopes that were used in the
estimate of block grades.

The data shown in Table 14.29 show that the average uncapped copper grade for all Iron
Cap drill hole samples is 0.21% with about 28% of the samples above a 0.25% cut-off.
The CV even without capping high-grade outliers is significantly less than 1.0 for all
samples.

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Table 14.28  Iron Cap Gold Assay Statistics 
Uncapped Au Statistics Above Cut-off Capped Au Statistics Above Cut-off

Au
Cut- Total Mean Grd- Mean Grd-
off Meters Inc. Au Thk Inc. Std. Au Thk Inc. Std.
AUZON (g/t) (m) (%) (g/t) (g/t-m) (%) Dev. CV (g/t) (g/t-m) (%) Dev. CV
All Data 0.00 33,937 51 0.39 13,372 17.3 0.61 1.55 0.39 13,083 17.7 0.50 1.30
0.25 16,765 28 0.66 11,059 25.2 0.78 1.18 0.64 10,770 25.8 0.61 0.95
0.50 7,186 15 1.07 7,686 25.5 1.06 0.99 1.03 7,397 26.0 0.77 0.75
1.00 2,202 6 1.94 4,280 32.0 1.59 0.82 1.81 3,991 30.5 1.01 0.56
<0.25 g/t 0.00 13,694 80 0.20 2,747 45.8 0.33 1.67 0.20 2,684 46.8 0.26 1.34
0.25 2,803 15 0.53 1,490 25.0 0.63 1.18 0.51 1,427 25.6 0.45 0.88
0.50 756 4 1.06 802 13.3 1.03 0.97 0.98 739 13.6 0.65 0.67
1.00 203 1 2.15 437 15.9 1.51 0.70 1.84 374 13.9 0.72 0.39
0.25 g/t 0.00 13,491 41 0.40 5,360 17.2 0.59 1.48 0.38 5,184 17.7 0.39 1.01
Shell 0.25 7,986 40 0.56 4,440 35.2 0.72 1.30 0.53 4,264 36.4 0.44 0.83
0.50 2,602 15 0.98 2,555 25.3 1.15 1.17 0.91 2,379 26.1 0.62 0.67
1.00 584 4 2.06 1,201 22.4 2.08 1.01 1.76 1,025 19.8 0.84 0.48
0.50 g/t 0.00 6,752 11 0.78 5,265 2.6 0.85 1.09 0.77 5,215 2.6 0.77 1.00
Shell 0.25 5,976 32 0.86 5,129 15.2 0.88 1.02 0.85 5,078 15.3 0.79 0.93
0.50 3,828 36 1.13 4,330 32.0 1.00 0.88 1.12 4,280 32.4 0.87 0.78
1.00 1,416 21 1.87 2,643 50.2 1.34 0.72 1.83 2,592 49.7 1.11 0.60

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Table 14.29  Iron Cap Copper Assay Statistics 
Uncapped Cu Statistics Above Cut-off Capped Cu Statistics Above Cut-off

Cu
Cut- Total Mean Grd- Mean Grd-
off Meters Inc. Cu Thk Inc. Std. Cu Thk Inc. Std.
CUZON (%) (m) (%) (%) (%-m) (%) Dev. CV (%) (%-m) (%) Dev. CV
All Data 0.00 33,482 26 0.21 6,886 7.0 0.16 0.79 0.21 6,872 7.0 0.16 0.78
0.10 24,721 46 0.26 6,402 37.7 0.16 0.61 0.26 6,388 37.7 0.15 0.60
0.25 9,433 23 0.40 3,808 37.6 0.17 0.42 0.40 3,794 37.6 0.16 0.40
0.50 1,814 5 0.67 1,222 17.7 0.20 0.29 0.67 1,208 17.6 0.17 0.25
<0.10% 0.00 11,270 48 0.13 1,459 18.0 0.12 0.92 0.13 1,448 18.1 0.11 0.85
0.10 5,837 41 0.21 1,197 50.6 0.12 0.59 0.20 1,186 50.9 0.10 0.51
0.25 1,248 10 0.37 459 23.8 0.17 0.47 0.36 448 24.0 0.12 0.32
0.50 164 1 0.68 111 7.6 0.30 0.45 0.61 100 6.9 0.08 0.14
0.10% 0.00 5,083 36 0.15 757 14.8 0.11 0.71 0.15 757 14.8 0.11 0.71
Shell 0.10 3,246 51 0.20 645 55.5 0.10 0.51 0.20 645 55.5 0.10 0.51
0.25 631 11 0.36 225 23.3 0.13 0.35 0.36 225 23.3 0.12 0.35
0.50 76 2 0.63 48 6.4 0.14 0.22 0.63 48 6.4 0.14 0.22
0.20% 0.00 5,265 14 0.20 1,071 4.9 0.11 0.56 0.20 1,070 4.9 0.11 0.56
Shell 0.10 4,538 61 0.22 1,018 52.0 0.11 0.48 0.22 1,018 52.0 0.11 0.48
0.25 1,309 23 0.35 461 36.4 0.12 0.33 0.35 461 36.4 0.11 0.33
0.50 112 2 0.64 72 6.7 0.15 0.24 0.64 71 6.7 0.14 0.22
0.30% 0.00 9,709 8 0.28 2,674 2.0 0.16 0.59 0.28 2,673 2.0 0.16 0.59
Shell 0.10 8,979 45 0.29 2,620 29.6 0.16 0.54 0.29 2,620 29.6 0.16 0.54
0.25 4,574 39 0.40 1,827 48.1 0.15 0.38 0.40 1,827 48.1 0.15 0.38
0.50 819 8 0.66 541 20.2 0.17 0.25 0.66 541 20.2 0.17 0.25
0.40% 0.00 2,156 2 0.43 924 0.3 0.23 0.53 0.43 922 0.3 0.22 0.52
Shell 0.10 2,122 21 0.43 922 9.3 0.23 0.52 0.43 920 9.4 0.22 0.51
0.25 1,671 48 0.50 835 41.8 0.21 0.42 0.50 833 41.9 0.20 0.41
0.50 642 30 0.70 449 48.6 0.20 0.29 0.70 447 48.5 0.19 0.27

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14.3.2 HIGH‐GRADE OUTLIERS – IRON CAP 
Cumulative probability plots were used to identify high-grade outliers for gold, copper,
silver, and molybdenum based on the original assay samples. The assays were initially
examined with respect to logged lithology and alteration types however the final analysis
of high-grade outliers was completed using the grade wireframes that were used to
interpolate block grades. Figure 14.35 is a cumulative probability plot that shows the
distribution of raw gold assays for all Iron Cap assays.

Figure 14.35  Iron Cap Gold Cumulative Probability Plot – All Samples 

100.000

10.000
Au (g/t)

1.000

Log Normal Approximation

0.100
All Iron Cap Au Assays

0.010
-2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

As can be seen in Figure 14.35, gold grades deviate from the approximated log normal
line shown in red above 3 g/t. Outlier samples were capped at 3 g/t, 4 g/t, and 7 g/t for
less than 0.25 g/t, 0.25 to 50 g/t, and greater than 0.50 g/t, respectively, based on
cumulative probability plots.

Figure 14.36 is a cumulative probability plot that shows the distribution of copper grades
within combined 0.30% and 0.40% wireframes.

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 Figure 14.36  Iron Cap Copper Cumulative Probability Plot – 0.3% and 0.4% Shells 
10.000

1.000
Cu (%)

0.100

Log Normal Approximation

0.30% + 0.40% Domain

0.010

0.001
-3 -2 -1 0 1 2 3 4 5
Cumulative Normal Distribution Function

Iron Cap assay capping limits for high-grade outliers are summarized in Table 14.30.

Table 14.30  Iron Cap Capping Limits 
Gold Assays

Cap Grade No.

AUZON (Gold Grade Wireframes) (g/t) Capped
Low-grade Domain (<0.25 g/t) 3.0 27
Medium grade Domain (0.25 to 0.50 g/t) 4.0 23
Higher-grade Domain (≥0.50 g/t) 7.0 15
Copper Assays

Cap Grade No.

CUZON (Copper Grade Wireframes) (%) Capped
Low-grade Domain (<0.10%) 0.75 13
Medium-grade Domains (0.10 to 0.20%) 1.00 3
Higher-grade Domains (0.30 to 0.40%) 1.50 8
Silver Assays

Cap Grade No.

AGZON (Silver Grade Wireframes) (g/t) Capped
Low-grade Domain (<3 g/t) 0.75 32
Higher-grade Domain (>3 g/t) 1.00 12
Copper Assays

Cap Grade No.

MOZON (Molybdenum Grade Wireframes) (ppm) Capped
All Domains 2,500 4

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14.3.3 DRILL HOLE COMPOSITING – IRON CAP 
Drill hole assay data (both uncapped and capped intervals) were composited into 15 m
long composites starting from the drill hole collar. Most of the original assay data were in
the range of 1.5 to 3.0 m long, with the majority being 2 m long. Based on the scale of
the deposit, 15 m long composites were deemed to be an appropriate length for
estimating Mineral Resources. Two sets of composites were generated, one set used for
estimating precious metal grades (gold and silver) and the other for estimating base
metals (copper and molybdenum). Prior to creating the drill hole composites, the drill
hole intervals were coded with the same grade wireframes that were used to constrain
the estimate of block grades.

14.3.4 VARIOGRAPHY – IRON CAP 
A variety of grade and indicator variograms were generated for the Iron Cap deposit using
MineSight® software. Figure 14.37 and Figure 14.38 are down-hole correlograms for
gold and copper, respectively. The down-hole gold correlogram was modeled with a
nugget effect of about 0.30 and a range of about 24 m. The down-hole copper
correlogram shows a slightly lower nugget effect and an appreciably longer down-hole
range than the gold correlogram.

Figure 14.39 and Figure 14.40 are omni-directional correlograms for gold and copper,
respectively based on 15 m drill hole composites. Nested spherical models were used in
modeling the Iron Cap gold and copper correlograms shown in Figure 14.39 and Figure
14.40. Ranges of approximately 40 m, 125 m, and 165 m were modeled for the nested
gold model structures (Figure 14.39). The nested Iron Cap copper correlogram structures
were modeled with ranges of approximately 55 m, 135 m, and 215 m reflecting the more
continuous nature of copper mineralization at the Iron Cap deposit (Figure 14.40).

Figure 14.37  Iron Cap Down‐hole Gold Correlogram 

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 Figure 14.38  Iron Cap Down‐hole Copper Correlogram 

Figure 14.39  Iron Cap Omni‐directional Gold Correlogram 

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 Figure 14.40  Iron Cap Omni‐directional Copper Correlogram 

14.3.5 GRADE ESTIMATION PARAMETERS – IRON CAP 
Following their success at intersecting deep mineralization located below the Kerr
deposit, Seabridge drilled a series of holes below the Iron Cap deposit in 2013 and 2014.
A new block model was constructed in early 2015 for the Iron Cap deposit. Table 14.31
summarizes block model dimensions and limits for the Iron Cap deposit.

Table 14.31  Kerr Block Model Limits 
NAD83 Coordinates
Block Size Number of Areal Extent
Parameter Minimum Maximum (m) Blocks (m)
Easting 423,000 425,070 15 138 2,070
Northing 6,266,400 6,268,380 15 132 1,980
Elevation 540 2,100 15 104 1,560

Block grades were estimated for the Iron Cap deposit using a three pass IDW method.
Instead of using traditional search ellipses for selecting eligible drill hole composites, a
trend plane strategy was used. The trend plane method involves identifying the strike
and dip of a “domain” and providing for allowable search distances along the strike,
down-dip, and perpendicular to the plane directions. The QP responsible for this section
believes that this method of selecting samples minimizes grade smearing often
associated with search ellipses and does a better job of ensuring that the distribution of
the estimated block grades reflect the underlying structural controls associated with
mineralization.

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 Block gold, copper, silver, and molybdenum grades were estimated using manually
constructed grade envelope wireframes to constrain the estimate. The various
wireframes used in the estimation plan are summarized in Table 14.32.

Table 14.32  Iron Cap Grade Envelopes 

AUZON
Code Description
1 <0.25 g/t Au
5 <0.25 g/t Au – internal low-grade
25 0.25 to 0.50 g/t Au
50 >0.50 g/t Au
CUZON
Code Description
1 <0.10% Cu
5 <0.10% Cu – internal low-grade
10 0.10 to 0.20% Cu
20 0.20 to 0.30% Cu
30 0.30 to 0.40% Cu
40 >0.40% Cu
AGZON
Code Description
1 <3 g/t Ag
3 >3 g/t Ag
MOZON
Code Description
1 <25 ppm Mo
25 25 to 50 ppm Mo
50 >50 ppm Mo

Table 14.33 through Table 14.36 summarize the key parameters that were used to
estimate gold, copper, silver, and molybdenum, respectively.

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Table 14.33  Iron Cap Gold Estimation Parameters 
Trend Plane Number of Trend Plane
Search Ranges (m) Composites Used Orientation
Max. Proj. Eligble
Dist. Strike Dip AUZON
Estimation AUZON ID Perp. Max/ 1 Comp Azm Angle DH
Pass Code Power Strike Dip Stk Min Max Hole (m) (°) (°) Comps
1 1 3 7.5 7.5 7.5 1 3 1 7.5 28 65 1
2 1 3 15 15 7.5 3 6 2 n/a 28 65 1
3 1 3 30 30 15 1 3 1 30 28 65 1
1 5 3 75 75 15 1 3 1 30 28 65 1&5
2 5 3 150 150 30 3 6 2 n/a 28 65 1&5
3 5 3 250 250 50 1 3 1 125 28 65 1&5
1 25 3 75 75 15 1 3 1 30 28 65 1, 5 & 25
2 25 3 150 150 30 3 6 2 n/a 28 65 1, 5 & 25
3 25 3 250 250 50 1 3 1 125 28 65 1, 5 & 25
1 50 3 75 75 15 1 3 1 30 28 65 25 & 50
2 50 3 150 150 30 3 6 2 n/a 28 65 25 & 50
3 50 3 250 250 50 1 3 1 125 28 65 25 & 50

Table 14.34  Iron Cap Copper Estimation Parameters 
Trend Plane Number of Trend Plane
Search Ranges (m) Composites Used Orientation
Max. Proj. Eligble
Dist. Strike Dip CUZON
Estimation CUZON ID Perp. Max/ 1 Comp Azm Angle DH
Pass Code Power Strike Dip Stk Min Max Hole (m) (°) (°) Comps
1 1 2 7.5 7.5 7.5 1 3 1 7.5 28 65 1
2 1 2 15 15 7.5 3 8 2 n/a 28 65 1
3 1 2 30 30 15 1 3 1 30 28 65 1
1 5 2 75 75 15 1 3 1 30 28 65 1&5
2 5 2 150 150 30 3 8 2 n/a 28 65 1&5
3 5 2 250 250 50 1 3 1 125 28 65 1&5
1 10 2 75 75 15 1 3 1 30 28 65 1, 5 & 10
2 10 2 150 150 30 3 8 2 n/a 28 65 1, 5 & 10
3 10 2 250 250 50 1 3 1 125 28 65 1, 5 & 10
1 20 2 75 75 15 1 3 1 30 28 65 10 & 20
2 20 2 150 150 30 3 8 2 n/a 28 65 10 & 20
3 20 2 250 250 50 1 3 1 125 28 65 10 & 20
1 30 2 75 75 15 1 3 1 30 28 65 20 & 30
2 30 2 150 150 30 3 8 2 n/a 28 65 25 & 50
3 30 2 250 250 50 1 3 1 125 28 65 10 & 20
1 40 2 75 75 15 1 3 1 30 28 65 30 & 40
2 40 2 150 150 30 3 8 2 n/a 28 65 30 & 40
3 40 2 250 250 50 1 3 1 125 28 65 30 & 40

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Table 14.35  Iron Cap Silver Estimation Parameters 
Trend Plane Number of Trend Plane
Search Ranges (m) Composites Used Orientation
Max. Proj. Eligble
Dist. 1 Strike Dip AGZON
Estimation AGZON ID Perp. Max/ Comp Azm Angle DH
Pass Code Power Strike Dip Stk Min Max Hole (m) (°) (°) Comps
1 1 3 7.5 7.5 7.5 1 3 1 7.5 28 65 1
2 1 3 15 15 7.5 3 8 2 n/a 28 65 1
3 1 3 30 30 15 1 3 1 30 28 65 1
1 3 3 75 75 15 1 3 1 30 28 65 1&3
2 3 3 150 150 30 3 8 2 n/a 28 65 1&3
3 3 3 250 250 50 1 3 1 125 28 65 1&3

Table 14.36  Iron Cap Molybdenum Estimation Parameters 
Trend Plane Number of Trend Plane
Search Ranges (m) Composites Used Orientation
Max. Proj. Eligble
Dist. 1 Strike Dip MOZON
Estimation MOZON ID Perp. Max/ Comp Azm Angle DH
Pass Codes Power Strike Dip Stk Min Max Hole (m) (°) (°) Comps
1 1 2 7.5 7.5 7.5 1 3 1 7.5 28 65 1
2 1 2 15 15 7.5 3 8 2 n/a 28 65 1
3 1 2 30 30 15 1 3 1 30 28 65 1
1 25 2 75 75 15 1 3 1 30 28 65 1 & 25
2 25 2 150 150 30 3 8 2 n/a 28 65 1 & 25
3 25 2 250 250 50 1 3 1 125 28 65 1 & 25
1 50 2 75 75 15 1 3 1 30 28 65 25 & 50
2 50 2 150 150 30 3 8 2 n/a 28 65 25 & 50
3 50 2 250 250 50 1 3 1 125 28 65 25 & 50

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 In order to minimize potential boundary effects during the estimation process, the grade
envelopes were treated as "soft" contacts for all but the lowest grade domains. For
example, blocks located in the 0.50 g/t gold domain could be estimated by composites
from that grade domain and if available, composites from the next lower gold grade
envelope (i.e. 0.25 g/t domain). This strategy was used for all four of the metals that
were estimated for the Iron Cap deposit.

The number of composites used to estimate each block, the number of drill holes used,
the distance to the closest composite and the average distance of all composites used
were stored during the estimation process.

14.3.6 MODEL VALIDATION – IRON CAP 
Estimated block grades (gold, silver, copper, and molybdenum) were compared to drill
hole composite grades in cross section and level plan views. Figure 14.41 and Figure
14.42 are northwest-southeast cross sections drawn through the Iron Cap block model.
These figures show estimated block/composite gold grades (Figure 14.41) and
block/composite copper grades (Figure 14.42). Figure 14.43 and Figure 14.44 are block
model level maps drawn at the 1,200 m elevation through the Iron Cap block model
showing estimated block grades and drill hole composite for gold and copper,
respectively. The constraining Mineral Resource block cave shapes are shown on the
block model cross sections and level plans as thick purple lines.

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 Figure 14.41  Iron Cap Gold Model Cross Section 

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 Figure 14.42  Iron Cap Copper Model Cross Section 

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 Figure 14.43  Iron Cap Gold Model – 1,200 m Level 

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 Figure 14.44  Iron Cap Copper Model – 1,200 m Level 

The grade models were also validated by comparing the IDW block grades against NN
models that were generated for gold, copper, silver, and molybdenum. Table 14.37
compares the IDW grades against the conditional NN models.

Table 14.37  Iron Cap Global Bias Grade Checks 
Indicated Inferred
Metal IDW Grade NN Grade % Diff IDW Grade NN Grade % Diff
Gold (g/t) 0.4704 0.4767 -1.3% 0.3850 0.3961 -2.8%
Copper (%) 0.2126 0.2176 -2.3% 0.2078 0.2110 -1.5%
Silver (g/t) 5.5613 5.5398 0.4% 4.6708 4.6250 1.0%
Molybdenum (ppm) 39.6292 41.0213 -3.4% 67.8675 68.9775 -1.6%

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 The data in Table 14.37 show that most of the IDW grades are slightly lower than the NN
grades. The lone exception is for silver which shows that the IDW grade model is slightly
higher than the NN model.

Grade swath plots were generated for rows (east-west), columns (north-south) and levels
(elevations) through the block model comparing the IDW and NN models at a zero cut-off
grade. Figure 14.45 and Figure 14.46 show swath plots for gold and copper, respectively
by elevation. These swath plots show results from Indicated and Inferred Resource
blocks.

Figure 14.45  Iron Cap Gold Model Swath Plot – Elevations 

AUNN AUIDW No. Blks

0.65 3000

0.57 2400

Number of Blocks
Mean Au (g/t)

0.49 1800

0.41 1200

0.33 600

0.25 0

Elevation

Figure 14.46  Iron Cap Copper Model Swath Plot – Elevations 

CUNN CUIDW No. Blks

0.30 3000

0.26 2400
Number of Blocks
Mean Cu (%)

0.22 1800

0.18 1200

0.14 600

0.10 0

Elevation

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 The Iron Cap swath plots show several localized areas where the NN gold and copper
grades are higher than the IDW grade. These areas represent volumes where a single
composites used in the NN method overly influence the local grade. In the opinion of the
QP responsible for this section, the estimated Iron Cap block grades are reasonable and
unbiased based on visual and statistical reviews.

14.3.7 RESOURCE CLASSIFICATION – IRON CAP 
Mineral Resources were assigned to the estimated blocks by constructing 3D solids for
Indicated and Inferred Resources. These shapes were based on mineralized continuity
as defined by exploration drill hole results. The 2012 Iron Cap Indicated Mineral
Resource shape was locally deepened based on post-2012 drilling result. The Inferred
Mineral Resource 3D solid was increased from the 2012 shape by virtue of deeper,
relatively wide spaced drilling that confirmed the plunge of the recognized Iron Cap
mineralized system. The average drill hole spacing for Indicated and Inferred blocks is
approximately 45 m and 75 m, respectively.

14.4 SUMMARY OF MINERAL RESOURCES 
A strategy for tabulating Mineral Resources for the Kerr, Sulphurets, Mitchell, and Iron
Cap deposits was established by the QP responsible for this section after conferring with
open pit and underground mining consultants that have examined potential mining
methods that might be suitable for the various KSM deposits. Those engineers examined
a number is “modifying factors” in their consideration of converting Mineral Resources to
Mineral Reserves. (Canadian Institute of Mining, Metallugy and Petroleum [CIM] 2014).

The Kerr and Mitchell deposits are currently being planned to be mined by both open pit
and underground methods. Because of that, the QP responsible for this section used a
combination of conceptual put (LG) algorithms and underground draw point elevations
that were provided by Golder (generated using GEOVIA’s PCBC™ Footprint Finder
software) to define open pit and underground Mineral Resources for the Kerr and
Mitchell deposits.

The Sulphurets Mineral Resources is defined soley by a conceptual pit, while the Iron Cap
Mineral Resource is based on three conceptual block cave draw point elevations
provided by Golder.

The Mineral Resources for all four deposits (Table 14.39) are based on applying similar
mining constraints that were used to define Mineral Reserves (Section 15.0). Trade-off
studies between open pit and underground mining (Kerr and Mitchell) optimized the
location of the ultimate pit and block cave outlines for Mineral Reserve declaration. No
such optimization was undertaken for defining open pit and underground Mineral
Resources. However, a mining restriction surface was used to limit the depth of the
conceptual Mineral Resource pits (Kerr and Mitchell) in order to leave a reasonable
quantity of potential underground material for possible Mineral Resource declaration.
Because a non-optimized boundary was used to limit the depth of the Mineral Resource
pits in lieu of actual economic trade-off studies, the amount of underground Mineral

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 Resource (as defined by GEOVIA’s PCBC™ Footprint Finder software) is less than the
underground Mineral Reserve (Mitchell only).

The Mineral Resource pit is significantly larger than the Mineral Reserve pit, which left
less material to be included in the underground Mineral Resource category. The QP
responsible for this section of this Technical Report notes that the entire open pit and
underground Mineral Reserve volumes fit wholly within the open pit and underground
Mineral Resource volumes despite the apparent differences in quantities by mining
methods.

Block revenue for determining the limits of the conceptual pit and block cave shapes was
based on a NSR value that was calculated and stored in the block models. The
calculated NSR value represents recoverable value in Canadian dollars less various off
site transportation and smelting charges. Metal prices and other key criteria that were
used in generating the conceptual pits and block caves are summarized in Table 14.38.

Table 14.38  Key Mineral Resource Parameters 
Parameter Units Value
Au Price US$/oz 1,300.00
Cu Price US$/lb 3.00
Ag Price US$/oz 20.00
Mo Price US$/lb 9.70
Conceptual Pit Mining Cost Cdn$/t 1.80
Conceptual Pit Processing + G&A Cost Cdn$/t 9.00
Conceptual Pit Slope Angle degrees 45
Conceptual Block Cave Mining Cost Cdn$/t 6.00-7.00
Conceptual Block Cave Processing + G&A Cost Cdn$/t 9.00
Conceptual Pit Cut-off Grade Cdn$/t 9.00
Conceptual Block Cave Cut-off Grade Cdn$/t 16.00

Metal recovery was based on metallurgical test work that has been completed by Tetra
Tech on various KSM samples. Recovery is variable by mineralized area and specific
grade ranges (recovery curves); for more detailed discussions regarding metal recovery
refer to Sections 13.0 and 15.0 of this Technical Report. Mr. Tracey Meintjes, P.Eng.,
from MMTS wrote the MineSight® NSR calculation scripts that were used by the QP
responsible for this section.

The QP responsible for this section of this Technical Report generated conceptual
resource pits for the Kerr, Sulphurets, and Mitchell deposits using a Lerchs-Grossmann
algorithm within the MSOP module within MineSight®. A mining restriction surface was
used to limit deep conceptual pit mining for the Kerr and Michell deposits.

The conceptual block cave shapes that define resources for the Kerr, Michell, and Iron
Cap deposits are based on work completed by Golder under the direction of Mr. Ross
Hammett, P. Eng. Golder used GEOVIA’s PCBC™ Footprint finder in generating optimized

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 extraction levels from which 3D solids were created for tabulating Mineral Resources that
show reasonable prospects for eventual economic extraction.

For the Kerr model, Golder established three conceptual resource block cave extraction
levels at the 775 m, 280 m, and -215 m levels. A single conceptual resource block cave
extraction level was established at the 60 m level for the Mitchell deposit. Three
conceptual resource extraction levels were established for the Iron Cap model (1,335 m,
1,020 m, and 645 m levels). The extraction level polygons generated by Golder were
extruded vertically approximately 500 m, representing a maximum height of draw. The
upper Kerr conceptual block cave was clipped against RMI’s conceptual resource pit.
The single conceptual Mitchell block cave was also clipped against RMI's resource pit.

The 2012 PFS block model was used for tabulating constrained Mineral Resources for
the Sulphurets and Mitchell deposits (both conceptual pit and block cave quantities).
The end-of-year 2014 and end-of-year 2015 models were used to tabulate constrained
Mineral Resources (both conceptual pit and block cave) for the Iron Cap and Kerr
deposits, respectively.

Table 14.39 summarizes Mineral Resources by resource category and further broken
down by mineralized zone.

14.5 GENERAL DISCUSSION 
The QP responsible for this section of this Technical Report is not aware of any specific
environmental, permitting, legal, taxation, socio-economic, marketing, political or other
relevant factors that could materially affect the Mineral Resource estimates that are the
subject of this section.

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Table 14.39  KSM Mineral Resources 
NSR
Cut-off Tonnes Au Au Cu Cu Ag Ag Mo Mo
Zone Type of Constraint (Cdn$/t) (000 t) (g/t) (000 oz) (%) (Mlb) (g/t) (000 oz) (ppm) (Mlb)
Measured Mineral Resources
Mitchell Conceptual LG Pit 9 698,800 0.63 14,154 0.17 2,618 3.1 69,647 59 91
Conceptual Block Cave 16 51,300 0.59 973 0.20 226 4.7 7,752 41 5
Total Mitchell Measured n/a 750,100 0.63 15,127 0.17 2,844 3.2 77,399 58 96
Total KSM Measured n/a n/a 750,100 0.63 15,127 0.17 2,844 3.2 77,399 58 96
Indicated Mineral Resources
Kerr Conceptual LG Pit 9 355,000 0.22 2,511 0.41 3,208 1.1 12,555 4 3
Conceptual Block Cave 16 24,400 0.24 188 0.48 258 2.0 1,569 14 1
Total Kerr Indicated n/a 379,400 0.22 2,699 0.41 3,466 1.2 14,124 5 4
Sulphurets Conceptual LG Pit 9 381,600 0.58 7,116 0.21 1,766 0.8 9,815 48 40
Mitchell Conceptual LG Pit 9 919,900 0.57 16,858 0.16 3,244 2.8 82,811 61 124
Conceptual Block Cave 16 124,700 0.58 2,325 0.20 550 4.7 18,843 38 10
Total Mitchell Indicated n/a 1,044,600 0.57 19,183 0.16 3,794 3.0 101,654 58 134
Iron Cap Conceptual Block Cave 16 346,800 0.51 5,686 0.23 1,758 4.5 50,174 14 11
Total KSM Indicated n/a n/a 2,152,400 0.50 34,684 0.23 10,784 2.5 175,767 40 189
Measured + Indicated Mineral Resources
Kerr Conceptual LG Pit 9 355,000 0.22 2,511 0.41 3,208 1.1 12,555 4 3
Conceptual Block Cave 16 24,400 0.24 188 0.48 258 2.0 1,569 14 1
Total Kerr M+I n/a 379,400 0.22 2,699 0.41 3,466 1.2 14,124 5 4
Sulphurets Conceptual LG Pit 9 381,600 0.58 7,116 0.21 1,766 0.8 9,815 48 40
Mitchell Conceptual LG Pit 9 1,618,700 0.60 31,012 0.16 5,862 2.9 152,458 60 215
Conceptual Block Cave 16 176,000 0.58 3,298 0.20 776 4.7 26,595 39 15
Total Mitchell M+I n/a 1,794,700 0.60 34,310 0.16 6,638 3.1 179,053 58 230
Iron Cap Conceptual Block Cave 16 346,800 0.51 5,686 0.23 1,758 4.5 50,174 14 11
Total KSM Measured + Indicated n/a n/a 2,902,500 0.54 49,811 0.21 13,628 2.7 253,166 44 285
Inferred Mineral Resources
Kerr Conceptual LG Pit 9 80,200 0.27 696 0.21 371 1.1 2,836 6 1
Conceptual Block Cave 16 1,609,000 0.31 16,036 0.43 15,249 1.8 93,115 25 89
Total Kerr Inferred n/a 1,689,200 0.31 16,732 0.42 15,620 1.8 95,951 24 90
Sulphurets Conceptual LG Pit 9 182,300 0.46 2,696 0.14 563 1.3 7,619 28 11
Mitchell Conceptual LG Pit 9 317,900 0.37 3,782 0.09 631 3.0 30,662 56 39
Conceptual Block Cave 16 160,500 0.51 2,632 0.17 601 3.5 18,061 44 16
Total Mitchell Inferred n/a 478,400 0.38 6,414 0.10 1,232 3.0 48,723 55 55
Iron Cap Conceptual Block Cave 16 369,300 0.42 4,987 0.22 1,791 2.2 26,121 21 17
Total KSM Inferred n/a n/a 2,719,200 0.35 30,829 0.32 19,206 2.0 178,414 29 173
Note: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. The
Mineral Resources tabulated in Table 14.39 are inclusive of Mineral Reserves.

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15.0 MINERAL RESERVE ESTIMATES

15.1 INTRODUCTION
Mineral Reserves are based on Measured and Indicated Resources, and use PFS-level
engineering designs.

15.2 OPEN PIT RESERVE PARAMETERS

Open pit Mineral Reserves use whole block grades. Open pit mining loss and dilution
assumptions are shown in Table 15.1 and Table 15.2. The derivation of loss and dilution
assumptions are described in Section 16.0.

Table 15.1 Pit Mining Loss and Dilution

Total
Loss Dilution
Pit (%) (%)
Mitchell 2.2 0.8
Sulphurets 5.3 3.9
Kerr 4.5 3.2

The dilution tonnes are added as a percentage of ore tonnes from Table 15.1 at the
average grade of mineralized material within the pits that is below cut-off as presented in
Table 15.2.

Table 15.2 Grade of Dilution Material by Pit Area

Mitchell Kerr Sulphurets
Au (g/t) 0.21 0.12 0.26
Cu (%) 0.04 0.08 0.04
Ag (g/t) 1.52 0.64 0.70
Mo (ppm) 52.00 2.50 16.00
NSR (Cdn$/t) 6.70 4.70 6.20

The open pit minimum NSR cut-off grade is based on an estimated process operating
cost of Cdn$9.00/t. Process operating costs include plant processing (including
crushing/conveying costs where applicable), G&A, surface service, tailing construction,
and water treatment costs. The NSR grade used for mine planning is described in
Section 16.0. A variable cut-off grade strategy has been used; a higher cut-off grade of
Cdn$20.00/t is used until the end of Year 5 to maximize the NPV. During this time

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 material between Cdn$9.00/t and Cdn$20.00/t is stockpiled and some of it is reclaimed
through the mine life at the average grade of the stockpile. The premium cut-off grade in
the early years of the mine schedule assists in minimizing the initial capital payback time.
The cut-off grade by mine area is as follows:

 Mitchell Open Pit NSR Cut-off Grade – Cdn$9.00/t to Cdn$20.00/t

 Sulphurets Open Pit NSR Cut-off Grade – Cdn$9.00/t to Cdn$20.00/t
 Kerr Open Pit NSR Cut-off Grade – Cdn$9.00/t.

15.3 UNDERGROUND MINING RESERVE PARAMETERS

The underground Mineral Reserves have been determined using block grades from the
Mineral Resource model with mining dilution and losses being determined as an integral
part of the caving mining analysis undertaken using GEOVIA’s PCBC™ software. The NSR
grade used to determine value of the mineralized rock mucked from the drawpoints is
described in Section 16.0. The site operating costs (mining and process) used in the
analysis are presented in Table 15.4. The first part of the analysis determined the
elevation of the production level and the shape of the production footprint at which the
net value (NSR less site operating cost) of the mineralized rock to be mucked was a
maximum.

The second part of the analysis determined a production and grade schedule based on
mineralized rock mucked at the drawpoints that had a net positive value. If the net value
during the mucking process is negative at any stage of the mining process, it is “shut-off”.
Both the first and second parts of the analysis incorporate rock that is mucked as diluted,
and the shutting-off of uneconomic drawpoints results in losses of resources. Dilution
includes Mineral Resources that have grade but are sub-economic (less than drawpoint
shut-off). Inferred Mineral Resources and non-mineralized rock are assumed to have
zero grade. Underground mining dilution estimates from the PCBC™ assessments for the
Mitchell and Iron Cap deposits are shown in Table 15.3.

Table 15.3 Underground Mining Dilution

Sub-economic Zero Grade
Dilution Dilution Total
Deposit (%) (%) (%)
Mitchell 2 13 15
Iron Cap 11 9 20

Drawpoint shut-offs (where the material being mucked becomes uneconomic) use the
site operating cost (mining and process) shown in Table 15.4.

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 Table 15.4 Site Operating Cost – Drawpoint Shut-off
Mitchell Iron Cap
(Cdn$) (Cdn$)
Undereground Mining 6.00 7.00
Process 9.00 9.00
Total 15.00 16.00

Process operating costs presented in Table 15.4 include plant processing (including
crushing/conveying costs where applicable), G&A, surface service, tailing construction,
and water treatment costs.

15.4 RESERVES
Proven and Probable Mineral Reserves are summarized in Table 15.5 and match the
production plan described in Section 16.0.

Table 15.5 Proven and Probable Reserves

Diluted Grades Contained Metal
Ore Au Cu Ag Mo Au Cu Ag Mo
(Mt) (g/t) (%) (g/t) (ppm) (Moz) (Mlb) (Moz) (Mlb)
Proven Mitchell Open Pit 460 0.68 0.17 3.1 59.2 10.1 1,767 45 60
Kerr Open Pit 0 0.00 0.00 0.0 0.0 0.0 0 0 0
Sulphurets Open Pit 0 0.00 0.00 0.0 0.0 0.0 0 0 0
Mitchell Underground 0 0.00 0.00 0.0 0.0 0.0 0 0 0
Iron Cap Underground 0 0.00 0.00 0.0 0.0 0.0 0 0 0
Total Proven 460 0.68 0.17 3.1 59.2 10.1 1,767 45 60
Probable Mitchell Open Pit 481 0.63 0.16 2.9 65.8 9.7 1,677 44 70
Kerr Open Pit 276 0.22 0.43 1.0 3.4 2.0 2,586 9 2
Sulphurets Open Pit 304 0.59 0.22 0.8 51.6 5.8 1,495 8 35
Mitchell Underground 453 0.53 0.17 3.5 33.6 7.7 1,648 51 34
Iron Cap Underground 224 0.49 0.20 3.6 13.0 3.5 983 26 6
Total Probable 1,738 0.51 0.22 2.5 38.2 28.7 8,388 138 147
Proven + Mitchell Open Pit 941 0.65 0.17 3.0 62.6 19.8 3,444 89 130
Probable Kerr Open Pit 276 0.22 0.43 1.0 3.4 2.0 2,586 9 2
Sulphurets Open Pit 304 0.59 0.22 0.8 51.6 5.8 1,495 8 35
Mitchell Underground 453 0.53 0.17 3.5 33.6 7.7 1,648 51 34
Iron Cap Underground 224 0.49 0.20 3.6 13.0 3.5 983 26 6
Total Proven + Probable 2,198 0.55 0.21 2.6 42.6 38.8 10,155 183 207
Note: The Mineral Reserves shown in Table 15.5 are included in the Mineral Resources listed in this
report. All Mineral Reserves stated above account for mining loss and dilution.

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16.0 MINING METHODS

16.1 INTRODUCTION
A PFS-level production schedule, based on an annualized average 130,000 t/d mill feed
rate, has been developed for the Project based on a combined open pit and underground
mine plan. Pit phases at Mitchell, Kerr, and Sulphurets deposits are engineered based
on the results of an updated economic pit limit analysis. Underground mining has been
adopted at Iron Cap and below the Mitchell open pit to reduce the volume of waste
generated from the mine.

16.1.1 PRODUCTION RATE CONSIDERATION

The 2012 PFS (Tetra Tech 2012) restricted the plant throughput rate at KSM to
130,000 t/d due to an anticipated power supply limitation. This power limitation has
been lifted and a higher KSM mill throughput is therefore possible.

This 2016 PFS is still based on open pit and underground mine plans, to combine to an
annual throughput of 130,000 t/d. The throughput that was assessed and approved
during the recently completed EA review process. Alternative studies indicate the Project
NPV may be improved by increasing the mill throughput above 130,000 t/d early in the
mine life.

The entire open pit and underground mining operation results in a Project mine life of
approximately 53 years.

16.2 OPEN PIT MINING OPERATIONS

16.2.1 INTRODUCTION
The open pit mine planning work for this study is based on previous work included in the
2012 PFS (Tetra Tech 2012) and updated with design criteria from the Application/EIS
(Rescan 2013). The 3DBM discussed in Section 14.0 has also been used to update the
ore tonnes and grades and waste rock characterization, with the most recent drill hole
information.

In addition to the geological information used for the block model, other data used for
mine planning include the base economic parameters (metal prices, etc.), mining cost
data derived from supplier estimates and data from other projects in the local area,
recommended prefeasibility pit slope angles (PSAs), projected project metallurgical
recoveries, plant costs, and throughput rates.

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16.2.2 MINING DATUM
The Project design work is based on NAD83 coordinates. Historical drill hole information
is based on various surveys with different sets of control that have been converted to
NAD83. Topography is described in Section 12.1.5.

16.2.3 OPEN PIT PRODUCTION RATE CONSIDERATIONS

The ore production rate is maintained at 130,000 t/d up to Year 35. At the introduction
of underground mining at Mitchell in Year 23, and continuing through Iron Cap ore
production commencing in Year 32, the open pit production is adjusted so that the
combined open pit and underground production matches the maximum mill throughput.
The underground mine plans are described in detail in Section 16.3.

After Year 35 the underground production becomes the base production plan with
reduced mill throughput to conform to the release of ore from the block caves. The open
pit mine plan is further adjusted to provide a uniform feed tonnage at the reduced rates.

16.2.4 OPEN PIT MINE PLANNING 3D BLOCK MODEL

The Mineral Resource models used in this study are based on the updated MineSight
3DBMs provided by RMI, as described in Section 14.0.

The block heights represent a suitable bench height for large scale mining shovels, and
the block dimension are suitably sized for long-range planning.

NET SMELTER RETURN

NSR (net of off-site concentrate treatment and smelter charges and including on-site mill
recovery) is estimated for each block and is used as a cut-off item for break-even
ore/waste selection, as well as for the grade bins used to optimize cash flow in the open
pit production scheduling. It is also used for the underground mine planning as
described in Section 16.3.

NSR is estimated using net smelter price (NSP) and process recovery as shown in the
equation below. The NSP is based on base case metal prices; US dollar exchange rate;
and off-site losses, transportation, smelting, and refining charges. The terms of a project
smelter schedule will be negotiated during the course of the Project’s development. The
major smelter terms used to estimate NSP are specified in Table 16.1, not including
minor terms for deductions/losses, payables, price participation, etc.

𝐶𝑢 𝑅𝑒𝑐𝐶𝑢 𝑅𝑒𝑐𝐴𝑢 𝑅𝑒𝑐𝐴𝑔 𝑀𝑜 𝑅𝑒𝑐𝑀𝑜

𝑁𝑆𝑅 = × × 𝑁𝑆𝑃𝐶𝑢 × 2,204.6 + 𝐴𝑢 × × 𝑁𝑆𝑃𝐴𝑢 + 𝐴𝑔 × × 𝑁𝑆𝑃𝐴𝑔 + × × 𝑁𝑆𝑃𝑀𝑜 × 2,204.6
100 100 100 100 1 × 106 100

Where:

 Cu = copper grade (%) from the CUIDW 3DBM item

 Au = gold grade (g/t) from the AUIDW 3DBM item
 Mo = molybdenum grade (ppm) from the MOIDW 3DBM item

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  Ag = silver grade (g/t) from the AGIDW 3DBM item
 RecCu = copper recovery (%)
 RecAu = gold recovery (%)
 RecMo = molybdenum recovery (%)
 RecAg = silver recovery (%)
 NSPCu = net smelter price for copper (Cdn$/lb)
 NSPAu = net smelter price for gold (Cdn$/g)
 NSPMo = net smelter price for molybdenum (Cdn$/lb)
 NSPAg = net smelter price for silver (Cdn$/g).

Table 16.1 Major Smelter Terms used in the NSR Calculation

Amount Unit
Copper Concentrate
Smelting 75 US$/dmt
Au Refining 8,0 US$/oz
Ag Refining 0.5 US$/oz
Off-site Costs 236 Cdn$/wmt
Moly Concentrate
Roasting 2.00 US$/lb
Other Off-site Costs 5,298 Cdn$/wmt
Gold Dore
Au Refining + Transport 2.00 US$/oz

Copper to gold ratio in mill feed and estimated concentrate grades vary by KSM mining
area. Off-site costs and NSPs are therefore different for each mining area. The metal
prices and resultant NSPs used at this early stage of the study, are shown by pit area in
Table 16.2 and Table 16.3.

Table 16.2 Metal Prices for Reserve NSR Calculation

Metal Price
(US$)
Cu 2.70/lb
Au 1200/oz
Ag 17.5/oz
Mo 9.70/lb
Exchange Rate (US$:Cdn$) 0.83

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 Table 16.3 Estimated NSP by Mining Area
Cu NSP Au NSP Ag NSP Mo NSP
(Cdn$/lb) (Cdn$/g) (Cdn$/g) (Cdn$/lb)
Mitchell 2.82 41.6 0.551 6.5
Kerr 2.68 40.7 0.529 6.5
Iron Cap 2.82 41.6 0.551 6.5
Sulphurets 2.82 41.6 0.551 6.5

Metallurgical recoveries used for the NSR calculation are based on test work conducted
by G&T and evaluated by Tetra Tech, and are described in Section 13.0.

MINING LOSS AND DILUTION

The Project is a large gold-copper porphyry deposit and the orebody occurs relatively
continuously within the cut-off grade shells. The pits will be mined with large shovels and
trucks at an ore mining rate of 130,000 t/d. As is typical of large porphyries, blast hole
assays will be used to determine the waste/ore boundaries for material designations on
the pit bench for daily operations.

The interpolation of the metal grades to the 3DBM averages the drill hole composites to a
single value in the block for each metal. This smoothing is, in effect, a numeric dilution
where higher composite values are averaged down; conversely, lower values are
averaged up. Because of the continuous/smooth nature of the mineralization, it is
assumed this smoothing down and up leads to an average close to the cut-off grade
within blocks that are on the fringe of being ore or waste.

During operations, an Ore Control System (OCS) from blasthole sampling will be
conducted on an approximate 8.5 m spacing to determine cut-off boundaries for shovel
dig limits. These smaller ore/waste blocks will be too small to separate with the large
shovels, especially after the material has been displaced by blasting. Therefore, the
dilution from isolated blasthole blocks will be handled as whole block dilution in the
3DBM. The OCS will define smaller ore/waste zones, but these will be smoothed into
larger units that the shovels can also selectively mine. These larger units from the OCS
are better represented by the 3DBM size blocks and will define contacts between ore and
waste. These contact boundaries are approximated by the 3DBM as the smallest sized
units the shovels can selectively mine. The 3DBM blocks can therefore be used to define
contact dilution factors.

Blasting will create displacement along waste/ore boundaries; as the material is loaded
onto the trucks, some ore will be lost to waste (mining loss) and some waste will be
added to the ore (dilution). During some seasons, material will stick or freeze to the
inside of the truck boxes and create carry-back, which can contribute to mining loss and
dilution. Also, misdirected loads can send ore to the waste dump (mining loss), or waste
to the crusher or, more likely, to a low-grade stockpile (dilution). In order to properly
calculate the reserve files for scheduling purposes, mining losses and dilution must be
taken into account.

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 The Mineral Reserves used for scheduling are calculated from grades in the 3DBM using
detailed pit designs with the appropriate mining recoveries and dilutions applied. The
recoveries and dilutions convert the in situ ore tonnages into ROM delivered tonnage to
the mill. The ROM delivered tonnage (i.e. what the mill will actually “see”) is used to
determine the appropriate production schedule.

There are three main parts to recovery and dilution:

 dilution of waste into ore where separate ore and waste blasts are not possible
 loss of ore into waste where separate ore and waste blasts are not possible
 general mining losses and dilution due to handling (haul back in truck boxes,
stockpile floor losses, etc.).

In addition to the whole block dilution and the general mining losses and dilution,
allowance is made for the contacts between ore and waste on the mining bench as
defined by the NSR cut-off. This is affected by the size of the ore areas on the bench and
the relative amount of edges. On a block-by-block basis, this is determined by the
number of waste neighbours an ore block has or vice versa for waste. For this Project,
the Mitchell area has more massive ore zones on a bench than the other areas;
therefore, contact dilution for this area is less. For this 2016 PFS, MMTS has estimated
a mining loss and dilution factor that varies by pit area. Mining loss and dilution
assumptions by pit area are provided in Section 15.0.

Since the dilution material on the contact edge of the blocks described above is
mineralized, it will have some grade value. The dilution grades are estimated by
determining the grades of the envelope of waste in contact with ore blocks inside the pit
delineated area. These dilution grades are estimated by statistical analysis of grades in
blocks with NSR less than the cut-off NSR. The dilution grades are shown in Section
15.0.

16.2.5 PIT SLOPE DESIGN ANGLES

Overview
BGC has provided open pit slope design parameters for the three proposed open pits of
the KSM Project: Kerr, Sulphurets, and Mitchell. The design parameters are based on
geotechnical site investigations, available local and regional geological data, and well-
established geotechnical design methods used to estimate the Project design pit slope
angles.

BGC has identified geotechnical rock mass units associated with the primary rock and
alteration types, based on the results of the site investigation and geological
interpretations by Seabridge. Major geological structures (faults and foliation) have been
included in the geotechnical slope stability analyses for each pit. Slope stability analyses
were conducted using industry standard limit-equilibrium software, finite element
analysis software, and in-house proprietary BGC tools.

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 BGC completed hydrogeological studies for each of the proposed pits, and numerical
simulations of pit dewatering/depressurization have been carried out. BGC interpreted
hydrostratigraphic units, estimated hydraulic conductivity and storage parameter values,
and formulated a conceptual hydrogeologic model for the Project area. The conceptual
model was used as the basis for developing a numerical hydrogeologic model. The
calibrated numerical model was used to evaluate the effort required to depressurize the
open pit slopes to satisfy geotechnical constraints identified in the open pit slope
designs. Preliminary dewatering/depressurization plans, including the number of vertical
wells, horizontal drains, and the extraction rates required to achieve sufficient
depressurization of the rock mass were developed to support the costing study. In
addition, the need for a dewatering adit and associated drainage gallery was identified
and simulated to achieve the depressurization targets of the upper north slope of the
Mitchell pit.

BGC reviewed the proposed pit areas and surrounding terrain for potential geohazards,
including the identification of snow avalanche paths and potential landslides, utilizing
aerial photographs and satellite imagery. BGC completed ground-truthing of potential
geohazards; the preliminary design of mitigation structures were completed by those
responsible for the various Project facilities at risk from the identified geohazards.

Mitchell Pit Design

The proposed Mitchell pit will be located within a glacially modified valley and targets a
mineral deposit located in the valley floor, resulting in 1,200 m high ultimate slopes. This
scale of the Mitchell pit north and south slope heights will rival some currently operating,
very mature pits elsewhere in the Americas.

A multi-component site investigation program was completed to provide data for the
Mitchell pit design work. Approximately 4,100 m of geotechnical drilling was completed,
distributed over 10 core holes. BGC geotechnically logged the holes. Optical and
acoustic televiewer surveys were completed in each hole to provide geological
discontinuity orientations for rock slope design. Packer testing was undertaken in each
hole, and vibrating wire piezometers were installed. Photogrammetric mapping of
sections of the north and south valley walls was completed to provide additional data on
the rock mass fabric of the study area.

A laboratory testing program was completed, consisting of the following tests:

 uniaxial compressive strength (16 tests)

 Brazilian tensile strength (31 tests)
 small scale direct shear testing (8 tests)
 grain size and index testing (4 tests)
 specific gravity (44 tests).

An appropriate quantity of quality data was collected to characterize the geological units
of the study area and support PFS-level slope designs.

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 The structural geology of the Mitchell study area is defined by major faults, foliation, and
rock mass fabric (joints, etc.). The Sulphurets and Mitchell Thrust faults dip
approximately 30° toward the west, intersecting the north and south slope of the
Mitchell pit. Sets of west and east dipping normal faults, dipping approximately 60°, are
observed in the study area. The east dipping normal faults are interpreted to be
associated with the Brucejack Fault, which is mapped on a regional scale but does not
occur in the pit area. Foliation is best developed in the phyllic altered rock mass in the
footwall of the MTF. The foliation dips moderately to steeply (45° to 80°) north.
Additional discontinuity sets have also been identified from the site investigation results.
The proposed Mitchell pit has been divided into four geotechnical domains, based on the
different structural geology fabrics in the area; discontinuity sets and geotechnical units
for each domain are identified for use in the slope designs. Design sectors are based on
the anticipated main orientations of the proposed pit walls, as determined from previous
pit optimization studies.

Recommended inter-ramp slope angles vary from 34° to 54° based on wall orientation,
overall wall height, geotechnical domain, and controls on slope stability. Inter-ramp slope
heights are limited to 150 m, after which a geotechnical berm (or ramp) with a minimum
width of 20 m is required. The inter-ramp height limits and geotechnical berms provide:
flexibility in the mine plan to mitigate potential slope instability; access for slope
monitoring installations; and working space for in-pit wells, drains, and other water
management infrastructure. All final pit slopes are assumed to be excavated using
controlled blasting. Depressurization of the proposed pit slopes requires a combination
of vertical wells, horizontal drains, and a dewatering adit with drainage galleries. The
east and west overall slopes of the proposed Mitchell pit are within the range of slope
heights that have been achieved in other porphyry metal mines in the world.

The Mitchell open pit slope designs are outlined in Table 16.4.

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Table 16.4 Mitchell Zone Pit Slope Design Parameters
Slope Azimuth Catch Bench Geometry Inter-ramp Geometry
Design Start End Height Angle Width Height Angle
Domain Sector (°) (°) Bh (m) Ba (°) Bw (m) IRH (m) IRA (°) Slope Design Control
I I-173 135 210 30 60 24.7 150 36 Benchstack (B1 - P)
I-220 210 230 30 70 25.2 150 40 Benchstack (B1 - B3)
I-240 230 250 30 70 15.6 150 48 Benchstack (B1 - B3)
I-275 250 300 30 70 11.6 150 53 Benchstack (B1 - B3)
I-338 300 015 30 70 11.6 150 53 Rockmass stability
I-028 015 040 30 70 11.6 150 53 Rockmass stability
I-078 040 115 30 70 15.6 150 48 Benchstack (A1 - B3)
I-125 115 135 30 60 11.5 150 46 Benchstack (Bench geometry)
II II-325 270 020 30 70 11.5 150 53 Rockmass stability
II-035 020 050 30 70 17.8 150 46 Benchstack (A3-E1)
II-058 050 065 30 70 25.2 150 40 Benchstack (A3-E1)
II-078 065 090 30 70 31.0 36 Benchstack (A3-E1)
III III-099 090 108 30 70 10.5 150 54 Benchstack (Bench geometry)
III-138 108 168 30 70 34.3 150 34 Benchstack (B2-P)
III-189 168 210 30 70 17.8 150 46 Rockmass stability
IV IV-168 145 190 30 70 17.8 150 46 Benchstack (A1-B1)
IV-200 190 210 30 70 26.6 150 39 Benchstack (B1-D1)
IV-240 210 270 30 70 34.3 150 34 Benchstack (B1-D1)
IV-003 325 040 30 70 17.8 150 46 Benchstack (F1-D1 / E1-A1)
Notes: 1. Geotechnical berms (minimum 20 m wide) must be added to the slopes every 150 m.
2. No ramp allowances have been included in these slope designs; their addition will reduce the achievable overall angles.
inter-ramp height (IRH); inter-ramp angle (IRA); bench height (Bh); bench angle (Ba); bench width (Bw)

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 Sulphurets Pit Design
The proposed Sulphurets pit will be located on a glacially modified ridge between the
Mitchell and Sulphurets valleys. The proposed mine plan would result in ultimate pit
slopes with maximum heights of approximately 650 m, and a footprint of approximately
2 km x 1 km, with the long axis of the pit trending parallel to the strike of the STF.

A site investigation program including geotechnical drilling and hydrogeological testing

was completed in 2010. Data from five geotechnical drill holes (consisting of
approximately 1,950 m of drilling) was used to divide the Sulphurets Zone into three
geotechnical domains: the hanging wall of the STF, the footwall of the STF, and an altered
(crackled) zone associated with and defined by the STF. The STF dips approximately 30°
toward the west. Sets of west and east dipping normal faults dipping approximately 60°
are also dominant in this zone. Foliation in the Sulphurets Zone is well developed in the
altered rock mass of the STF footwall, and dips moderately to steeply (45° to 80°) north.
Additional joint and bedding sets have also been identified.

Laboratory testing of core samples from the completed geotechnical drilling included:

 uniaxial compressive strength (13 tests)

 Brazilian tensile strength (20 tests)
 small scale direct shear tests of natural discontinuities (5 tests)
 index testing of discontinuity infilling material (3 tests).

The rocks of the Sulphurets Zone are typically moderately strong when weathered, and
strong when fresh. The RQD of the rocks of the Sulphurets Zone varies from fair to good,
generally increasing in quality with depth below surface or distance from the STF.

The slope designs assume final walls will be excavated using controlled blasting,
consistent with the approach proposed for the Mitchell pit. The recommended inter-ramp
slope angles vary from 36° to 50° based on wall orientation, overall wall height, rock
mass quality, and structural controls on slope stability. Inter-ramp slope heights are
limited to 150 m after which a geotechnical berm (or ramp) with a minimum width of
20 m is required. Depressurization of the pit slopes is required and should be achievable
with a combination of vertical wells and horizontal drains.

Table 16.5 outlines the Sulphurets open pit slope designs.

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Table 16.5 Sulphurets Zone Pit Slope Design Parameters
Slope Azimuth Catch Bench Geometry Inter-ramp Geometry
Design Start End Height Angle Width Height Angle
Domain Sector (°) (°) Bh (m) Ba (°) Bw (m) IRH (m) IRA (°) Slope Design Control
SHW-V SHW-V-280 270 290 30 65 11.8 150 49 Benchstack (MC1-T)
SHW-V-323 290 355 30 65 21.3 150 40 Benchstack (F1-T)
SHW-V-028 355 060 30 65 16.3 150 45 Benchstack (FO-T)
SHW-V-075 060 090 30 65 27.2 36 Benchstack (STF - P)
SFW-C SFW-C-265 220 310 30 65 16.3 45 Benchstack (MC1,MC2 - T)
SFW-C-333 310 355 30 65 11.8 49 Benchstack (B1,B2-T)
SFW-C-015 355 035 30 65 11.5 50 Benchstack (Bench geometry)
SFW-C-045 035 055 30 65 16.3 45 Benchstack (A1-STF)
SFW-C-070 055 085 30 65 21.3 40 Benchstack (A1-STF)
SFW-V SFW-V-190 172 207 30 65 21.3 150 40 Benchstack (B1-P)
SFW-V-222 207 237 30 65 14.0 150 47 Benchstack (A1-T)
SFW-V-269 237 300 30 65 25.7 150 37 Benchstack (MC-T)
SFW-V-333 300 005 30 65 21.3 150 40 Benchstack (FO-T)
SFW-V-033 005 060 30 65 27.2 150 36 Benchstack (A4-D1 )
SFW-V-090 060 120 30 65 21.3 150 40 Benchstack (FO-A3)
SFW-V-146 120 172 30 65 27.2 150 36 Benchstack (B1-A4)
Notes: 1. Geotechnical berms (minimum 20 m wide) must be added to the slopes every 150 m.
2. No ramp allowances have been included in these slope designs; their addition will reduce the achievable overall angles.

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 Kerr Pit Design
The proposed Kerr open pit is located on the south side of the Sulphurets Valley near the
height of land and above the Sulphurets Glacier. The proposed mine plan will result in
ultimate pit slopes approximately 600 m high, with a proposed pit footprint of
approximately 2 km x 0.5 km.

A site investigation program including four geotechnical drill holes (consisting of

approximately 1,500 m of drilling) and hydrogeological testing was completed in 2010.
Data from the site investigation was used to divide the Kerr Zone into two geotechnical
domains: a central altered zone and a surrounding unaltered zone; both are composed
primarily of volcanic rocks. The structural geology of the Kerr Zone includes sets of west
and east dipping normal faults (dipping greater than 60°) as well as bedding and joints.

Laboratory testing of core samples from the geotechnical drilling included:

 uniaxial compressive strength (10 tests)

 Brazilian tensile strength (14 tests)
 small scale direct shear tests of natural discontinuities (4 tests)
 index testing of discontinuity infilling material (3 tests).

The rocks of the altered zone are typically medium-strong, but are highly fractured with
poor RQD values. The rocks of the unaltered zone are strong to very strong, with good to
excellent RQD values.

The slope designs assume that final walls will be excavated using controlled blasting.
The recommended inter-ramp slope angles vary from 34° to 50°; based on overall wall
height, wall azimuth, rock mass quality, and geological structures. Inter-ramp slope
heights are limited to 150 m after which a geotechnical berm (or ramp) with a minimum
width of 20 m is required. Depressurization of the pit slopes is required and should be
achievable with a combination of vertical wells and horizontal drains.

Kerr open pit slope designs are presented in Table 16.6.

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Table 16.6 Kerr Zone Pit Slope Design Parameters
Slope Azimuth Catch Bench Geometry Inter-ramp Geometry
Design Start End Height Angle Width Height Angle
Domain Sector (°) (°) Bh (m) Ba (°) Bw (m) IRH (m) IRA (°) Slope Design Control
KVOL KVOL-236 180 292 30 65 11.5 150 50 Benchstack (Bench geometry)
KVOL-335 292 017 30 65 27.2 150 36 Benchstack (F2 - T)
KVOL-065 017 112 30 65 30.5 150 34 Benchstack (Bed3,4 - T)
KVOL-126 112 140 30 65 21.3 150 40 Benchstack (H1 - T)
KVOL-160 140 180 30 65 16.3 150 45 Benchstack (B1 - Bed4)
KALT KALT-180 135 225 30 60 24.7 150 36 Rockmass stability
KALT-000 225 135 30 60 24.7 36 Benchstack (Rockmass stability)
Notes: 1. Geotechnical berms (minimum 20 m wide) must be added to the slopes every 150 m.
2. No ramp allowances have been included in these slope designs; their addition will reduce the achievable overall angles.

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 Slope Design Implementation
Achieving the proposed design criteria will require depressurization of the pit walls
through the use of vertical wells and horizontal drains. Geological structures may affect
bench and inter-ramp scale slope stability and therefore depressurization of these
structures will be required.

Based on groundwater modelling results, approximately 76 in-pit wells will be required

over the life of mine for the Mitchell pit. The total drilling length for the vertical wells is
estimated to be approximately 15,200 m. In addition, a 3.5 km adit and drainage gallery
will be required for the Mitchell pit north wall, and approximately 876 km of horizontal
drains will be required to aid in depressurization of the pit slopes over the mine life. The
average annual groundwater extraction rate for Mitchell pit depressurization measures is
estimated to be approximately 12,600 m3/d throughout the life of the pit.

The average annual groundwater extraction rate for the Kerr pit depressurization
measures is estimated to be approximately 1,300 m3/d. Approximately 36 vertical wells
with a total drilling length of 7,200 m will be required throughout the life of the pit. In
addition, it is estimated that approximately 110 km of horizontal drains will be required
to aid in depressurization of the pit slopes over the life of the pit.

The average annual groundwater extraction rate for the Sulphurets pit depressurization
measures is estimated to be 1,100 m3/d. Approximately 34 vertical wells with a total
drilling length of 6,800 m will be required throughout the life of the pit. In addition, it is
estimated that approximately 187 km of horizontal drains will be required to aid in
depressurization of the pit slopes over the life of the pit.

The efficiency of the proposed pit depressurization system is sensitive to the hydraulic
properties of the bedrock. It is important to continue to characterize the hydraulic
properties of the bedrock as the Project advances. Current rock mass hydraulic
conductivity estimates in the vicinity of the open pits are limited to point-scale
measurements (e.g. slug tests and constant rate packer injection tests during drilling).
Larger-scale estimates of rock mass hydraulic conductivity and storage properties (i.e.
airlifting tests and pumping tests) to confirm the feasibility of the proposed
depressurization system, should be obtained at the FS-stage of the Project. Dewatering
and depressurization response must be monitored throughout mining operations to
determine if targets are being met. An extensive monitoring network of piezometers
(standpipe and vibrating wire) should be in place and integrated with the open pit slope
monitoring system.

Monitoring of pit slope displacements at various scales will be required. Inter-ramp and
overall scale slopes should be monitored for deformations. The slope deformation
monitoring system designed for the Mitchell pit will meet or exceed the size and
complexity of those systems currently in operation at other large open pits elsewhere.
The monitoring system should include multiple robotic-theodolites and survey prisms,
mobile slope stability radar units, slope inclinometers, piezometers, and extensometers.
The system would be computerized and use radio telemetry or a similar technology to
provide real-time data to on-site geotechnical and mining staff. Similar monitoring

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 systems would also be required for the Sulphurets and Kerr pits; the requirements of
those systems would be scaled according to the proposed wall heights for those pits.

It will be important to manage geological hazards during mining operations. Additional

engineered structures adjacent to the pit, or modifications to the pit slope geometry, may
be required to mitigate the risk of snow avalanches. In addition, the Project area has
been recently de-glaciated and large scale slope deformation features have been
identified in the Mitchell and Sulphurets valleys.

Nine large landslides in the study area will require management during construction and
operations. Conceptual management plans detailing monitoring and mitigation
measures were prepared as part of this study (Appendix F10). Of particular note with
respect to the open pits are: the Snowfield Landslide situated on the south slope of the
Mitchell Valley and east of the Mitchell open pit, and the Kerr landslide situated on the
south slope of the Sulphurets Valley and below the elevation of the proposed Kerr open
pit.

The overall landslide management plan for the Project uses a risk based approach to
determine the level of monitoring required for each landslide. The management plan for
the Snowfield Landslide is comprehensive due to its proximity to the Mitchell open pit.
The plan includes surface and subsurface deformation monitoring, surface water
management, pumping wells, and a depressurization adit.

16.2.6 ECONOMIC PIT LIMITS, PIT DESIGNS

PIT OPTIMIZATION METHOD
The economic pit limit is selected after evaluating LG pit cases conducted with MineSight
MSEP.

The LG assessment is carried out by generating sets of LG pit shells by varying revenue
assumptions to test the deposit’s geometric/topographic and pit slope sensitivity.

The ultimate pit limit is typically determined by estimating the pit size where an
incremental increase in pit size does not significantly increase the pit resource. The
selected pit limit is chosen where the economic return starts to significantly drop off.
Economics of the selected pit limits are also tested to determine that they are
economically viable.

LG Pit Assumptions
Inputs to the updated LG pit limit assessment shown in Table 16.7 are based on the
2012 PFS (Tetra Tech 2012).

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 Table 16.7 LG Pit Limit Primary Assumptions
Assumption Value
Mining Cost Cdn$1.90/t
Process, G&A, Site Services, Water Treatment Cdn$9.00/t
Process Recoveries See Section 17.0
Pit Slope Angle Variable See Section 16.2.5
Metal Prices See Table 16.2

LG pits are generated by varying prices in the range from 30% to 150% of the base NSP.

LG ECONOMIC PIT LIMITS

Pit shell cases are created by varying the input LG prices. Figure 16.1 to Figure 16.3
summarize the revenue sensitivity cases for the Mitchell, Sulphurets, and Kerr pits,
respectively.

Potential economic pit limits in Figure 16.1 to Figure 16.3 are shown where inflection
points occur as an incremental increase in pit size does not significantly increase the pit
resource, or an incremental increase in the pit resource results in only marginal
economic return.

In the Sulphurets pit area the inflection points represent potential economic pit limits and
are selected for each pit area.

The selected economic pit limits for Mitchell and Kerr are smaller than the potential pit
limit.

Seabridge’s objective to reduce waste mined has been achieved by selecting a pit limit
with 40% less mill feed than the potential economic pit limit. Waste mined in the
selected pit limit is 3.0 Bt less than the potential economic pit limit.

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 Figure 16.1 Mitchell Sensitivity of Ore Tonnes to Pit Size

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 Figure 16.2 Sulphurets Sensitivity of Ore Tonnes to Pit Size

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 Figure 16.3 Kerr Sensitivity of Ore Tonnes to Pit Slope and Pit Size

The Kerr pit limit has been selected for a pit size similar to the one from the 2012 PSF
(Tetra Tech 2012) to ensure that waste placement in the backfilled Sulphurets pit does
not exceed the volumes as described in Rescan (2013).

The selected open pit limits are summarized below:

 Mitchell – open pit/underground: 60% Price Case

 Sulphurets – inflection pit case: 90 % Price Case
 Kerr – inflection pit case: 75 % Price Case

A plan view and north-south section views of the LG pits for the open pit mining areas are
shown in Figure 16.4 through Figure 16.7.

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 Figure 16.4 Plan View of the KSM LG Pit Limits

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 Figure 16.5 Mitchell Open/Underground Pit and Economic Pit Limit – North-South Section
at East 422950, Viewed from the East

Selected Pit Limit

Potential Pit Limit

Block Cave
Footprint

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 Figure 16.6 Sulphurets Economic Pit Limit – North-South Section at East 421725 Viewed
from the East

Selected Pit Limit

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 Figure 16.7 Kerr Economic Pit Limit – East-West Section at North 6258800, Viewed from
the South

Selected Pit Limit

16.2.7 DETAILED PIT DESIGNS

PFS-level pit designs demonstrate the viability of accessing and open pit mining the
economic resources at the KSM site. Pit designs use the selected LG pit limits as guides
for estimated geotechnical parameters, suitable road widths, and minimum mining
widths based on efficient operation for the size of mining equipment chosen for the
Project.

HAUL ROAD WIDTHS

Haul road widths are designed to provide safe, efficient haulage, and to comply with the
following BC Mines Regulations’ minimum width specifications:

 For dual-lane traffic, a travel width of not less than three times the width of the
widest haulage vehicle used on the road is required.
 Where single-lane traffic exists, a travel width of not less than two times the
width of the widest haulage vehicle used on the road is required.
 Shoulder barriers should be at least three-quarters of the height of the largest
tire on any vehicle hauling on the road along the edge of the haulage road
wherever a drop-off greater than 3 m exists. The shoulder barriers are designed

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 at 34° slope, which is slightly less than the angle of repose. The width of the
barrier must be added to the travel width to get the total road width.

Ditches are included within the travel width allowance. For crowned haul roads, the
width of this ditch allowance is 4.5 m. Ditches are not added to the in-pit high wall roads;
there is adequate water drainage at the edge of the road between the crowned surface
and lateral embankments, such as high walls or lateral impact berms.

Based on a 360-t truck, the haul road design basis is as follows:

 largest vehicle overall width: 9.8 m

 double lane high wall haul road allowance: 38.2 m
 double lane external haul road allowance: 47.2 m
 single lane high wall haul road allowance: 28.5 m
 single lane external haul road allowance: 37.4 m.

DESIGN STANDARDS
Detailed design parameters for pits and RSFs are provided by BGC and KCBL,
respectively, according to their geotechnical testing and evaluations (Sections 16.2.5 and
18.1.6).

Minimum Mining Width

A minimum mining width between pit phases is reserved to maintain a suitable mining
platform for efficient mining operations. This width is established based on equipment
size and operating characteristics. For this study, the minimum mining width generally
conforms to 50 m, which provides sufficient room for 2-sided truck loading but, due to
the configuration of merging pits, it is sometimes less.

In areas where the minimum shovel mining width is not achieved, such as initial outcrop
benches, drill and blast ramps will be cut on original side slopes. Crawler-dozers, shovel
casting, or loader tramming will be utilized to move material over the crest to ravel down
slope. Where bench width is sufficient, this material will be truck/shovel excavated as
rehandle from lower benches. This technique has been used at other mountaintop
mines; it allows for higher efficiencies with large open pit mine equipment, and reduces
costs in the capitalization period. The rehandle on the slope helps with the development
of the outside edge of lower benches, and the impact of the extra cost of the rehandle is
time-deferred.

Access Considerations
As stated in the design criteria summary, haul road widths are dictated by equipment
size. One-way haul roads must have a travel surface more than twice the width of the
widest haul vehicle. Two-way roads require a running surface more than three times the
width of the widest vehicle planned to use the road. One-way roads are not normally
employed for main long term haul routes because they limit the safe by-passing of trucks
and consequently lead to reduced productivity. One-way roads are, however, an

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 appropriate option for low volume traffic flow or shorter-term operations. For this 2016
PFS, the use of one-way haul roads is limited to the bottom two or three benches of some
pits. An access ramp is not designed for the last two benches of each pit bottom,
assuming that the ramp is ore and will be removed upon retreat.

Road grades are designed at a maximum grade of 8% due to traction concerns during
snow season particularly with downhill hauls. Switchbacks are designed flat, with ramps
entering and exiting at design grade. In practice however, grades will be transitioned so
that visibility and haul speeds are optimized going around the switchback. Where
possible, switchbacks are located such that they tie into future phase access
development.

In the final pit wall, access up from the lowest pit benches requires a spiral ramp
designed to exit at the lowest point on the pit rim or joining with infrastructure features
(such as the crusher location or previously designed haul road junctions). In the
mountainous terrain at KSM, benches above the lowest point of the pit rims can be
accessed by external roads built on the original hill side slopes, reducing the need for
internal ramps in the final wall, which in turn increases the overall strip ratio.
Switchbacks and flat grade segments should be minimized. Whether the decline ramp is
built inside or outside the LG ultimate pit shell, the amount of ore lost under the ramp or
extra waste mined above the ramp is minimized if the ramp is not located on the higher
strip ratio wall.

Variable Berm Width

Pit designs for KSM are designed honouring overall PSAs, a nominal bench face angle
(60° to 70°) and variable safety berm widths with a minimum 8 m width. Due to the low
overall PSAs and double benching between berms, berm widths are generally greater
than 15 m. Where haul roads intersect designed safety benches, the haul road width is
counted towards the safety berm width for the purpose of calculating the maximum
overall PSA.

Bench Height
The KSM pit designs are based on the digging reach of the large shovels (15 m operating
bench) with double benching between high wall berms; therefore, the berms are
separated vertically by 30 m. Single benching will be employed, if required, to maximize
ore recovery and maintain the safety berm sequence as warranted.

LG PHASE SELECTION
The LG pits discussed previously are used to evaluate alternatives for determining the
economic pit limit and the optimal push-backs or phases before commencing detailed
design work. LG pits provide a geometrical guide to detailed pit designs. Among the
details to be added are roads and bench access, the removal of impractical mining areas
with a width less than the minimum, and to ensure the pit slopes meet the detailed
geotechnical recommendations.

The LG pit cases selected as the pit limits for the KSM mine areas are discussed above.

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 There are smaller pit shells within the economic pit limits that have higher economic
margins, due to their lower strip ratios or better grades than the full economic pit limit.
Mining these pits as phases from higher to lower margins maximizes revenue and
minimizes mining cost at the start of mining operations, which therefore shortens the
Project capital payback and improves the Project cash flow.

Waste from the starter pits is pre-stripped to expose ore grade material for plant start-up.
This material can be used for some construction fills; however for some requirements, it
may be more cost effective to use borrow material from other areas, which will reduce
costs if hauls are too long from the starter pit area. A second cost effective alternative
for construction material is to borrow the material from the upper benches of future pit
phases. Some construction materials are sourced from quarries outside of the economic
pit areas to ensure that construction rocks meet the required geochemical and
mechanical properties.

The description of the detailed pit designs and phases in this section uses the following
naming conventions:

 The letters M, S, and K signify Mitchell, Sulphurets, and Kerr, respectively.

 The digit signifies the pit phase number.
 A suffix of ‘i’ indicates that the reserve tonnage for the phase is incremental
from the previous phase. If there is no ‘i’ specified, it is cumulative within the
pit, up to the phase indicated.

Mitchell Pits
Where possible, phase sequencing should start at one side of the ultimate pit and
expand in one direction. This sequencing is more efficient for operations where blasts
from the subsequent phase only bury access to lower benches on one side at a time. It
also allows the final ramp to be established on one side of the ultimate pit. However, the
Mitchell pit phases are designed to alternate from the north and south sides of the
Mitchell Valley (a two-sided expansion) because the upper benches of the Mitchell pit are
mostly waste on the north and south walls. Breaking the push-back designs into north-
and south-side phases enables a smoother waste mining schedule and reduces the
maximum truck fleet size. Each phase maintains sufficient bench width to promote
efficient shovel operation.

Where possible, in order to balance the waste hauls and keep upper elevation waste
going to upper elevation RSF platforms, the high wall waste is brought out of the pit using
external side hill roads directly off the south benches.

The Mitchell pit phases have been designed to mine vertically through the Snowfield
Landslide on the southeast side of the pit and not undermine it.

Mitchell pit has five incremental phases. Pit phase M1 enables the mine to have
sufficient exposed ore with a six month pre-strip period. Phases M2i and M3i mine south
and north respectively to provide low strip ratio ore to the mill during pay-back period.

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 M4i and M5i are high strip ratio pit phases that mine to the ultimate pit limit in the south
and then in the north.

A plan view of the Mitchell pit phases are shown in Figure 16.8.

Figure 16.8 Plan View of Mitchell Pit Phases

Sulphurets Pits
The mine plan for the Sulphurets area includes four mining phases, which are designed
using the LG economic pit limit as the ultimate pit limit guide.

S1 is a quarry that provides non-potentially acid generating (NPAG) monzonite for

construction of the WSD during the pre-production period. S2i and S3i are low strip ratio
starter pits at Sulphurets. S4i is the final Sulphurets pushback.

A plan view of the Sulphurets pit phases are shown in Figure 16.9.

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 Figure 16.9 Plan View of Sulphurets Pit Phases

Kerr Pit
The Kerr deposit is mined with two pit phases: a starter pit K1 and an ultimate pit K2. All
ore and waste is hauled to a primary crusher on the east side of the pit and conveyed to
the Mitchell Valley using a rope conveyor, a tunnel conveyor (through the SMCT) to the
OPC.

Initial access to the Kerr pit is established with a service road built from the bottom of
Sulphurets Valley to the east side of the Kerr pit (where the crusher will be located) at the
1,460 m elevation. Access to the highest benches of Kerr will be established with a
small service road, and the upper benches will be dozed down to approximately 1,800 m
where haul truck access can be established to the crusher. A plan view of the Kerr
ultimate pit is shown in Figure 16.10.

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 Figure 16.10 Plan View of Kerr Pit Phases

16.2.8 OPEN PIT MINE PLAN

LOM OPEN PIT PRODUCTION SCHEDULE
The open pit mine production schedule is developed with MS-SP, a comprehensive long-
range schedule optimization tool for open pit mines. It is typically used to produce a LOM
schedule that will maximize the NPV of a property, subject to user specified conditions
and constraints. Annual production requirements, mine operating considerations,
product prices, recoveries, destination capacities, equipment performance and operating
costs are used to determine the optimal production schedule. Scheduling results are
presented by period, as well as cumulatively. The production schedule includes:

 tonnes and grade mined by period, broken down by ore and waste material type,
bench, and mining phase
 truck and shovel requirements by period in number of units and operating hours
 tonnes transported by period to different destinations (mill, stockpiles, and
waste dumps).

The open pit sequence is scheduled to optimize revenues and development costs and is
then adjusted to include the block caves (see Section 16.3). The underground mining
production schedule discussed in Section 16.3 is generated based on the development
requirements for each mining area, the size, and capacity of the individual Mitchell and
Iron Cap block caves and then integrated into the total property production schedule.
The ore production from each of the open pit and underground mining is inserted where

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 it provides the best contribution to the Project economics. After inserting the
underground ore production into the LOM sequence, the open pit ore targets are then
adjusted to meet the mill capacity.

At start-up, all production comes from open pit sources, producing higher grades from
lower cost areas (both operating and capital). In the later years of the schedule, the base
ore production is from the underground, from Mitchell first and then Iron Cap is phased
in. After Year 35 the mill throughput rate is reduced to match the switch to continuous
underground production, and the open pits are mined to supplement the ore tonnes
produced from the block caves to meet the mill requirements and to improve overall
head grades. In the final years of the production schedule, the stockpile accumulated
during the open pit operations is used to augment the underground production. The
combined LOM schedule including open pit, underground, and stockpile reclaim, is
presented in Section 16.4. The following describes the open pit sequencing to match the
combined open pit underground mine plan.

In the open pit mine schedule, "Time 0" refers to the mill start date; full mill feed
production capacity is expected in Year 2. The production schedule specifies:

 pioneering: Years -6, -5, -4-

 pre-production: Year -3, -2, -1
 0perations begin in Year 1
 LOM operations: at full capacity Year 2 onward.

Details of the mine plan can be found in Appendix E1.

Open Pit Mine Load and Haul Fleet Selection

The mine load and haul fleet is selected prior to production scheduling. Previous studies
and similar projects in the area have shown that the lowest cost per tonne fleet of cable
shovels and haul trucks that are currently being used for large hard rock open pit mines
are the 100-t bucket class shovel matched with the 360-t truck. These sizes of units are
proven in operating mines around the world. Diesel hydraulic shovels (85 t bucket class)
are added to the fleet when a more mobile loading unit is needed. Suitable drill sizes
(311 mm hole size) are chosen to match this size of truck/shovel fleet. The following
performance and costs are estimated based on the use of this large-scale mining
equipment.

Productivities of the selected equipment include shovel loading times and truck haul
cycle estimates for multiple pit-to-destination combinations.

Schedule Criteria
In order to optimize the Project NPV, grade bins have been specified (based on NSR block
values); the MS-SP optimizer develops a cut-off grade strategy to increase the Project
NPV. This increases mill head grades and therefore revenues early in the production
schedule. Seven grade bins have been used for the schedule optimization software to
optimize the cut-off grade strategy. To achieve this in mine operations, it is planned to

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 use an OCS based on blast hole assays, which is typical of bulk mining for this kind of
deposit.

Mining precedence is required to specify the mining order of the pit phases in the
production schedule based on the relative location of the phases. For example, if the
phases represent progressive expansions in a single direction, then the first expansion
must stay ahead (vertically below) of the next expansion and so on. Even though some of
the Mitchell phases alternate from the south to north sides of the valley, they are
dependant at the pit bottoms. Other pit/phase precedencies are determined by the
timing of water diversions, bench access issues, and RSF phase sequencing. Early
Sulphurets waste production is initially based on WSD construction requirements and
later based on RSF rock drain requirements. Kerr pit is mined after Sulphurets pit is
mined out so that Kerr waste can be backfilled to the Sulphurets pit.

Because of these complexities, each pit area is scheduled in MS-SP independently and
then combined in a master LOM schedule

The primary program objective in each period is to maximize the NPV. The MS-SP NPV
calculation is guided by estimated operating and capital costs, process recoveries, and
metal prices. Key production schedule assumptions are shown in Table 16.8.

Table 16.8 Production Schedule Assumptions

Assumption Value
Operating Days Per Year 355
Hours Per Day 21
Daily Mill Throughput 130,000 t/d
Haul Truck Speed Limit 50 km/h
Haul Truck Operator Efficiency 90%
Haul Truck Operating Efficiency 85%
Dump and manoeuvre time 1.5 min
Shovel Loading Time 35 s/pass
Shovel Spot and Wait Time 10 s
Shovel Operator Efficiency 84%
Shovel Operating Efficiency 85%

Allowance has been made for days where the cumulative effect of severe snow storms or
poor visibility requires the mine to completely shut down.

Cut-off Grade Optimization

The pit phase designs and sequencing is typically from higher grades to lower, to mine
the higher mill feed grade early in the schedule to and thereby increase the Project
revenues early in the earlier years. This can be further enhanced by stockpiling low and
mid-grade. The lower grade stockpiled material is then milled at the end of the
production schedule. However, stockpiling also results in increased total material mined
and the mining cost per tonne milled in the relevant time period subsequently increases.

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 Additionally, oxidation can cause significant metallurgical recovery loss in the stockpile.
At some point, the cost of mining more material as a result of increased stockpiling and
with the metallurgical recovery loss will exceed the incremental revenue from the higher
grade milled. A variable cut-off grade strategy has been applied for the KSM production
schedule to reduce the stockpiling, assist in haul fleet smoothing and maximizing NPV.

ROCK STORAGE FACILITIES

Mined waste rock in the KSM mine plan is placed in RSFs in as close proximity to the
mining areas as possible. Mitchell and Sulphurets waste is placed in Mitchell and
McTagg RSFs. Kerr waste rock is backfilled into Sulphurets pit.

Further details on the RSF design are available in Section 18.0.

Construction Methods
Several different construction methods will be used for waste placement: top-down,
bottom-up, and wraparounds. Top-down platform heights are restricted to approximately
300 m. Bottom-up lifts are 30 to 50 m high, or less if geotechnically required.
Wraparounds are smaller top-down-type RSFs that are built onto the face of an existing
RSF, creating a series of terraces used to facilitate intermediate haul roads and lower the
overall slope angle of high dumps, which may be required for final closure and, if re-
sloping is necessary, it will reduce the re-sloping costs.

Foundation Preparation
Design work for RSF foundation preparation will be performed as required at the
feasibility-level design stage. Prior to mine development, soil will be salvaged from the
footprint area where soil is suitable for reclamation purposes. Soils will generally not be
salvaged on slopes steeper than 26° due to practical limitations on equipment access
and operator safety. Soils salvaged from the RSF footprints will be stockpiled in the Ted
Morris Valley.

The waste in the valley bottoms is planned to initially be placed in low height lifts across
the narrow valley floors to confine and consolidate weaker foundation material before
higher lifts are placed. To establish these lifts, suitable valley crossings will be located in
narrow and suitable rock foundations, and a bridge of rock fill will be placed progressing
from one side of the valley to the other. If required, loose tills and clays at the toe of the
bridge are removed with a backhoe and placed on the upstream side of the bridge. Once
the bridge is keyed in all the way across the valley, lifts of mine rock can be placed on the
upstream side and the loose tills and clays under the small lift will be constrained on the
downstream side by the bridge. Once the foundation is prepared, the basal drain is
placed on top at the required lift height.

RSF Monitoring and Planning

The long-term operation of the RSFs will be similar to that of the large, steep-terrain RSFs
that have been in operation for many years in southeast BC Rocky Mountain coal mines.
These operations involve high-relief RSF phases with clear dumping in single lifts of up to
400 m. Clear dumping is a technique whereby truck loads are dumped directly over the

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 crest of the dump face; the load is not dumped short and then pushed over the edge.
The clear dumping technique maintains a stable dump platform but requires well-
established monitoring and operating practices. Foundation preparation also needs to
be assured.

As indicated previously, rock placement during the initial mining stages will be achieved
with low lifts and using the bottom-up construction method in areas that are critical, in
order to establish consolidated foundations for future high relief dumps. As experience is
gained and stable foundations are established, placement can proceed with higher lifts,
as required, and utilize the more efficient top-down construction method.

The monitoring and safe operating practices referred to above, require all RSFs to be
fitted with wireline extensometers and automated radar or other scanning equipment in
areas where a significant downslope risk exists (i.e. above the Mitchell OPC, WSF, etc.).
These measurements and techniques establish the safe operating limits for each dump
face on the active RSF platforms and warn of any unsafe conditions that may arise. By
moving dumping operations to alternative dump sites, any unstable conditions can be
given time to consolidate and return to safe operating limits.

RSF Access Roads

Pioneering access to each pit and subsequent phases use roads with a maximum 15%
grade; these are constructed using balanced cut and fill wherever possible. Pioneering
roads are 10 m wide and enable major mining equipment to reach the top of each pit
phase and start mining. These are built for pit access and not for hauling. After the
pioneering road is established to the top benches of each pit phase, bench waste from
the upper portions of each pit phase is used to fill full-width haul roads at a maximum
gradient of 8% at the 38 m double lane width, to connect with permanent surface roads
and high wall roads in the long term road network. This road network connects the
mining areas with the primary crusher and stockpile areas for ore, and the RSF areas for
waste.

As described earlier, the terraced RSFs on the south side of the Mitchell Valley provide
level access to the south Mitchell Valley RSF platforms.

Final RSF Configuration

The RSFs for the Project will have overall slope angles of 26° to 30°. The final post
closure configuration will be adapted in accordance with the closure plan as identified
within Rescan (2013) and described in Section 20.7. Costs for this work are included
during the later years of the operation, when the waste strip ratio drops to low levels and
ancillary equipment then becomes available for other duties.

LOW-GRADE ROM STOCKPILE

Lower-grade ore is stockpiled throughout the mining schedule. The stockpile is built up
to follow the cut-off grade strategy, and then is reclaimed in later years. This will not only
increase the grade of the ore feed to the plant in the early years of the schedule and is
also used to even out the waste mining requirements as required during periods of high
pre-stripping for some of the pit phases. The low-grade ore stockpile is placed to the

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 west of the Mitchell OPC. Provision has been made for an HDPE pipeline diversion
around the surface of the stockpile, which can be moved as required.

OPEN PIT MINE PRE-PRODUCTION DETAIL

Pre-production Description
The open pit mine pre-production development phase has three primary objectives:

 expose sufficient ore for start-up

 establish mining areas that will support the equipment required to achieve ore
production, and annual mill feed requirements on a sustainable basis
 provide material required for construction in the mine area.

This section describes the development and pre-production activities that will be
accomplished by the mine personnel and open pit mine fleet equipment, and are
included as capitalized mining costs. Other development and construction activities are
covered by other disciplines.

Mine pre-production site development activities are currently scheduled to start in

Year -6, in order to meet the timeline for overall site development. Site development for
the mine area will consist of:

 tree clearing and grubbing

 drainage control and water management facilities including water treatment
 topsoil salvage
 pioneering access to construction and initial mining areas
 initial pit bench development
 haul road construction
 infrastructure construction
 pit power distribution construction.

Mine Area Tree Clearing and Grubbing

Much of the mine area is devoid of trees due to the recent retreat of the local glaciers.
Clearing and grubbing of trees and brush is required, mainly in the lower elevation site
works and waste dump areas, over an estimated area of 825 ha, and includes:

 pit area
 waste dumps
 ore stockpile
 mine haul roads
 crushing and slurry facilities area

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  portal area
 explosives manufacturing plant and explosives magazine
 truck shop.

Mine Drainage

Mine drainage is broken into two separate ditch networks: the diversion network and
collection network. The primary purpose of the diversion ditch network is to prevent non-
impacted surface water (clean water system) from entering areas where it could become
impacted. These diversion ditches are primarily located around the perimeter of the pit,
the waste dumps, and the ore stockpiles.

The purpose of the collection ditch network is to collect and route water that comes into
contact with the mining operation. This water is transported to the water storage dam, as
necessary, where it will then be treated in the WTP prior to release to the environment.
The collection ditches are primarily located within the pit area, at the toes of the waste
dumps, at the toe of the ore stockpiles, and within the footprint of all mine haul roads.

Details on mine drainage are available in Section 18.2.7 (Mine Area Water Management).

Ore Haul Road Construction

A haul road is constructed from the first mining phase in the Mitchell and Sulpurets pits
to the primary crusher during pre-production using mine waste rock.

Open Pit Mine Power

Mine power is required for electric drills, shovels, and pit pumping. Some lighting and
electrical service is also required to the mine ancillary facilities including mine offices,
mine maintenance facilities, and explosive manufacturing and storage facilities. Details
on power supply and distribution, including the initial capital requirements for start-up
and ongoing electrification of the mining operations, are provided in Sections 18.12 and
21.1. These details will form the basis for future procurement activities. The mine
operating costs include the labour required for ongoing pit electrical service and
maintenance work, as well as the expenses for a field line truck and service vehicles.

Open Pit Mine Infrastructure Construction

Site preparation is also included for:

 the mine equipment assembly site

 the explosives manufacturing plant and explosives magazines.

Facilities for the offices, maintenance shops, and fuel tanks will be available at the mine
site before mining commences (as listed in the Project schedule). These facilities are
described further in Section 18.0 (Project Infrastructure).

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 Pioneer Access

Pioneering roads will be required for initial access to the upper start benches of each pit
(and subsequent phases). These roads will be cut into the topography both within the pit
limits and outside of the pit limits. The primary equipment used for this stage of
development are track dozers and small diameter percussive diesel drills. Service
equipment and explosives supplies will also need to use these early roads, which are
built at a 15% grade in a balanced cut and fill method wherever possible.

Initial Pit Development

Once the pioneering roads are in place, the larger open pit mine equipment will have
access to the working areas. Mining preproduction begins with the Sulphurets Quarry to
provide construction rock for the construction of the WSD. Mining pre-production of the
Mitchell and Sulphurets pits will only commence after the WSD, WTP and MDT are
operational. The upper benches are typically small in area and do not offer enough room
for the shovel-truck fleet to operate. These small upper benches will be drilled with the
smaller size diesel drill. Track dozers will push the waste material down slope, or a
shovel or loader will side cast over the bench crest to a lower bench elevation where the
larger drill fleet and shovel-truck fleet can operate. The pioneering operations will create
haul roads for the first production fleet to begin pre-stripping operations (drills, trucks,
and shovels).

Pioneering and Pre-production Schedule of Activities

Pioneering roadwork starts in Year -6 when the Frank Mackie Winter Access Road is
available. Other pioneering tasks continue into Year -3, including assembly pad
preparations. After initial pioneering equipment is assembled, access is developed to
laydown areas, camps, and tunnel portals. Tunnel portal access roads are critical path
tasks and will receive the highest priority.

Mining of quarry rock in the Sulphurets Quarry starts in Year -4 to produce construction
rock for the WSD.

Waste pre-stripping pre-production at the Mitchell pit starts in Year -1 when the water
storage and water treatment facilities are operational. Process start-up is scheduled for
the beginning of Year 1.

Initial tree-clearing and grubbing activities for pioneering road development must be
started in Year -6 in order to prepare the sites for mining activities. Clearing and
grubbing work for pre-stripping will take place in Year -2.

The site for mine equipment assembly must be constructed during the pioneering phase
and be completed before the CCAR is completed. Equipment delivery and assembly for
the large mining equipment (shovels, trucks, and drills) begins as soon as the CCAR is
completed.

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 Preparation of the sites for the explosives facilities can be started in Year -4 and will be
completed in Year 1, prior to blasting with emulsion (expected at the end of Year 1).
Temporary explosives storage will be required for the pioneering pre-production stages of
mine development.

The open pit mine power distribution network must be completed before Year 1. The
entire pre-production fleet is diesel-powered; electric equipment will only begin operation
after the MTT tunnel is completed.

Before pre-production begins the large mining fleet will excavate colluvium from a borrow
source in the Mitchell Valley to provide construction fill for the Mitchell OPC. During pre-
production, Mitchell pit phase M1 is mined to 885 m and M2 is mined to 1290 m in the
Mitchell Valley; Sulphurets pit phase S3 is mined to an elevation of 1485 m. This will
expose the necessary ore required to achieve the full mill production rate of 130,000 t/d
of mill feed. This development must be completed by the end of Year -1 when the mill is
scheduled to receive the first ore.

The mine layout at the end of pre-production is shown in Figure 16.11.

Open Pit Production

Year 1 to 20 – Open Pit Mining

The following is a summary of mining activity in Years 1 to 5:

 Mining in Year 1 to 5 focuses on delivering the grade required to payback initial

capital.
 All Mitchell waste and Sulphurets waste material is placed in the Mitchell RSF.
 Sulphurets construction rock (NPAG monzonite) waste is hauled to be used for
the basal and selenium drains beneath the Mitchell/McTagg RSF.
 Mitchell and Sulphurets ore is hauled directly to the Mitchell primary crushers.
From Year 2 the Sulphurets ore is hauled to the Sulphurets crusher and crushed
ore is then conveyed to the OPC through a tunnel.
 An ROM ore stockpile is built in the area to west of the Mitchell OPC.
 The Mitchell RSF is built in lifts at an overall slope of 2:1 with an access road in
the final face.
 By Year 6 the M3 and S3 phases are mined out and mining begins on the higher
strip ratio phases of Mitchell and Sulphurets.
 Stockpile material is reclaimed to supplement mill feed during periods where
mining is limited by the large volume of waste pre-stripping or vertical advance
rate.
 By Year 10 the Mitchell RSF is full and waste placement begins in the McTagg
RSF.

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  Mitchell and Sulphurets pits are mined out by the end of Year 20. All waste is
placed on the McTagg RSF.

Year 20 to 30 – Open Pit production and Transition to Mitchell Underground Mining

The open pit mine production sequence is adjusted to meet plant feed requirements as
the Mitchell block cave mine is brought online. As discussed in more detail in Section
16.3, the Mitchell block cave mine is ramped up to full production in this time interval.

Kerr open pit is mined out by Year 30. Waste from Kerr pit is conveyed to Sulphurets and
backfilled into the mined out Sulphurets pit. Ore from Kerr is conveyed to the OPC.

Direct mining from the open pits is completed by the end of Year 30.

Year 30 to 53 – Stockpile Reclaim to Supplement Underground Mining

Open pit mining after Year 30 is limited to stockpile reclaim for supplementing Mitchell
and Iron Cap block cave production (see Section 16.3).

Once the stockpile is removed, a closure channel is established around the Mitchell RSF
by placing moraine material and NPAG riprap on berms along the north and west toes of
the Mitchell RSF. The open pit mine layout at LOM is shown in Figure 16.13.

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Figure 16.11 End of Pre-production (Year -1)

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Figure 16.12 End of Year 5

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Figure 16.13 Open Pit Life of Mine

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16.2.9 OPEN PIT MINE OPERATIONS
The open pit and underground operations are considered as separate operations in this
study, with their own facilities and management, technical, and operating personnel.
Future detailed planning should be able to reduce costs by integrating some of the
support services, staff and facilities. The following description is for the open pit
operations. Underground operations details are provided in Section 16.3.

KSM mining operations will be typical of open pit operations in mountainous terrain in
western Canada, and will employ accepted bulk mining methods and equipment. There
is considerable operating experience and technical expertise for the proposed operation
in western Canada. Services and support in BC and in the local area are well-established
as well.

A large capacity operation is being designed; therefore, large-scale equipment is required

for the major operating functions in the mine. This will generate high productivities and
therefore minimize unit mining and overall mining costs. Large-scale equipment will also
reduce the on-site labour requirement of a remote site, and will dilute the fixed overhead
costs for the mine operations. Much of the general overhead for the mine operations can
be minimized if the number of production fleet units and labour requirements are
minimized.

ORGANIZATION
Mine operations is organized into three areas: direct mining, mine maintenance, and
general mine expense (GME).

The direct mining area accounts for the drilling, blasting, loading, hauling, and pit
maintenance activities in the mine. Costs collected for this area include the mine
operating labour, mine operating supplies, equipment operating hours and supplies, and
distributed mine maintenance costs. The distributed mine maintenance costs include
items such as maintenance labour, repair parts, and energy (fuel or electricity), which
contribute to the hourly operating cost of the equipment and are distributed as an hourly
operating cost. These are in turn applied to the scheduled equipment operating hours.

The mine maintenance area accounts for the overhead of supervision, planning, and
implementation of all activities within the mine maintenance function. Costs collected for
this area include salaried personnel (supervisors, technical planners, and clerical),
operating supplies for the various services provided by this area, and general shop costs.
The cost in these items are not included in the distributed mine maintenance costs.

The GME area accounts for the supervision, safety, and training of all personnel required
for the direct mining activities as well as technical support from mine engineering and
geology functions. Costs collected for this area include the salaries of personnel and
operating supplies for the various services provided by this function.

In this study, direct mining and mine maintenance are planned as an owner-operated
fleet with the equipment ownership and labour being directly under operations. It may be
possible to contract out some of the direct mining activities under typical mine stripping

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 contracts, and maintenance and repair contracts (MARC) as has been done at other
operations. The viability and cost effectiveness of contracting can be determined in
future detailed planning and commercial negotiations. The exception for this study
involves blasting where (similar to other western Canadian mining operations) the mine
will employ the blasting crew but, due to the specialty expertise required, the supply and
onsite manufacturing of blasting materials is assumed to be contracted out. All
infrastructure required for the blasting supply contractor will be provided by the
operations.

DIRECT MINING ACTIVITIES – OPEN PIT

The direct mining area accounts for the drilling, blasting, loading, hauling, and pit
maintenance activities in the mine.

Drilling
Areas will be prepared on the bench floor blast patterns in the in situ rock. Dozers will be
used to establish initial benches for the upper portions of each pit phase. Drill ramps will
be cut on original mountain side surfaces, between benches where the outside holes on
established benches do not meet the burden and spacing requirement of the pattern for
the next bench below.

Blasthole drills will be fitted with GPS navigation and drill control systems to optimize
drilling. The GPS navigation will enable stakeless drilling, which is recommended for
efficiency in locating hole locations and accuracy of set-up, particularly since this is a high
snow fall area. Drills will be fitted with automatic samplers to provide ore grade control
samples from drill cuttings in the ore zones. These samples will be used in the OCS for
blast hole grade interpolation to define the ore/waste boundaries on the bench as well as
stockpile grade bins for the grade control system to the mill.

Diesel hydraulic and electric rotary drills (311 mm bit size) will be used for production
drilling, both in ore and waste.

Diesel hydraulic percussive drills with a hole size of 6.5 inches (165 mm) will operate
production benches for controlled blasting techniques on high wall rows, pioneering
drilling during pre-production, and development of initial upper benches. Drilling for
controlled blasting requirements have been estimated based on an estimate of the
length of pit wall exposed on a bench in any given year.

Blasting
Powder Factor

An appropriate powder factor has been used to provide adequate fragmentation and
digging conditions for the shovels. Similar large open pit projects in the KSM area use a
powder factor of 0.32 kg/t for competent rock. A blasting study carried out by Orica
suggests that a power factor of 0.35 kg/t is suitable in this area. Future Feasibility Study
planning can investigate further mine to mill performance with respect to blasting.

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 Explosives

A contract explosives supplier will provide blasting materials and technology. Due to the
remote nature of the operation, an explosives manufacturing plant will be built on site
when emulsion is required. For this study, the owner provides a serviced site and all
facilities to the explosives contractor who manufactures and delivers the prescribed
explosives to the blast holes and supplies all blasting accessories.

It is anticipated that Production up to and including Year 1 will not require emulsion.
After Year 1 it is assumed that half of the holes will use a 70/30 emulsion/ammonium
nitrate-fuel oil (ANFO) mix explosive (“wet” product) and half of the holes will use a 35/65
emulsion/ANFO mix (“dry” product). Higher use of ANFO, and possible use of borehole
liners to keep the ANFO dry to prevent incomplete detonations, can be investigated in
future studies to reduce blasting costs.

Blasting accessories will be stored in magazines adjacent to the mining areas.

Specifications for blasting plant and explosives storage magazines and the locations of
these facilities must adhere to the Explosives Act of Canada regulations as published by
the Explosives Regulatory Division of Natural Resources Canada, and regulations as
published by the BC MEMPR (in particular, the Health, Safety and Reclamation Codes for
Mines in BC). The location of the blasting plant and the explosives magazines are
located in the PFS as determined by the table of distances that govern the manufacturing
and storage of explosives and blasting agents.

Explosives Loading

Loading of the explosives will be done with bulk explosives loading trucks provided by the
explosives supplier. The trucks should be equipped with GPS guidance and should be
able to receive automatic loading instructions for each hole from the engineering office.
The GPS guidance will be a necessity to be compatible with stakeless drilling.

A smaller “goat” truck is needed for development areas with small access roads and
narrow bench working conditions, as well as for squaring-off blast patterns when the
mine roads have been closed due to excessive snow fall. This is a specific adaptation for
open pit operations in mountainous and high snow fall areas. “Goat” trucks are similar to
a logging skidder and are named because of their high manoeuvrability.

Blast holes will be stemmed to avoid fly-rock and excessive air blasts. Crushed rock will
be provided for stemming material and will be dumped adjacent to the blast pattern. A
loader with a side dump bucket is included in the mine fleet to tram and dump the crush
into the hole.

Blasting Operations

The blasting crew will be comprised of mine employees and will be on day shift only. The
blasting crew will coordinate drilling and blasting activities to ensure a minimum of two
weeks of broken material inventory is maintained for each shovel. Blasting activities will

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 need GPS control as blast patterns will not be staked. Blasters will require hand-held
GPS to identify holes for pattern tie-in. A detonation system will be used that consists of
electric cap initiation, detonating cord, surface delay connectors, non-electric single-delay
caps, and boosters.

Blasting assumptions are summarized in Table 16.9. These parameters are typical for
other mines in the Western Canada and will be re-evaluated in the future with a detailed
blasting study, using site-specific rock strength parameters.

Table 16.9 Blasting Assumptions

Blasting Pattern – Ore and Waste Specifications
Spacing 8.5 m
Burden 8.5 m
Hole Size 12¼ inches
311 mm
Explosive In-Hole Density 1.25 g/cc
Explosive Average Downhole Loading 95.0 kg/m
Bench Height 15 m
Collar 6m
Loaded Column 11 m
Sub-drill 2m
Charge per Hole 1,046 kg/hole
Rock SG 2.77 t/m3
Yield per Hole 3,002 t/hole
Powder Factor 0.35 kg/t

Loading
Ore and waste will be defined in the blasted muck pile by the OCS. A fleet management
system will assist in optimizing deployment and utilization of the mine fleet

The design basis assumes a single model of each shovel type to simplify the
maintenance function and reduce capital equipment and maintenance spares. Three 85-
t dipper diesel hydraulic shovels and three 100-t dipper electric cable shovels have been
selected as the primary digging units. The diesel hydraulic shovels are selected for
flexibility and mobility in accessing the thin top pit benches.

Bench widths are designed to ensure operating room is suitable for efficient double-sided
loading of trucks at the shovels. There are areas where single-sided loading will be
necessary and reduced productivity for the shovel will be encountered, such as the upper
benches of the pit phases where the end of the bench meets topography. Ancillary
equipment will be deployed to prepare the digging areas for higher shovel productivity.
This can entail dozing small benches down slope to the next bench, trap dozing, and
other dozing activities.

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 Hauling
Ore and waste will be hauled by 360-t off-highway haul trucks. Haul productivities have
been estimated from pit centroids at each bench to designated dumping points for each
time period.

Pit Maintenance
Pit maintenance services include haul road maintenance, open pit mine dewatering,
transporting operating supplies, relocating equipment, and snow removal.

Haul road maintenance is paramount to low haulage costs; dozer and grader hours have
been allocated to maintain the haul road network throughout the LOM production
schedule.

A fleet of ancillary service vehicles are allocated to install and service the in-pit sump
pumps and the high wall horizontal drains. This includes connecting these pumps to the
pit dewatering pipeline system. This crew will also service and supply mobile light plants.

A fleet of service equipment is allocated for summer season construction and will be
used in winter for snow clearing. This includes scrapers and loaders. The snow fleet will
be manned by mine operations staff in normal winter conditions with operators taken
from reduced activities such as dust control and summer field programs. During severe
storms, personnel to operate the standby snow fleet will be drawn from truck and shovel
operations as the fleets shut down. This will ensure priority fleets remain operating.

A rock crusher for road grading material is included.

OPEN PIT GENERAL MINE EXPENSE AREA

The GME area accounts for the supervision, safety, environment, and training for the
direct mining activities as well as technical support from mine engineering and geology
functions. Open pit mine operation supervision will extend down to the shift foreman
level.

A mine general foreman will assume responsibility for overall supervision for the mining
operation and will be responsible for overall open pit supervision and equipment
coordination. Supervision will also be required for drilling and blasting, training, and
dewatering. A mine shift foreman is required on each 12-hour shift, with overall
responsibility for the shift operation.

Initial training and equipment operation will be provided by experienced operators as full
time trainers. As performance reaches adequate levels, the number of trainers can be
decreased to a sustaining level.

A chief mine engineer will direct the mine engineering department. The senior mining
engineer will coordinate the mining engineers, drilling and blasting engineers, the mine
planning group, surveyors, and geotechnical monitoring. A senior surveyor will assume
responsibility for surveying for the entire property and will supervise the surveyors.

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 The geology department will include a senior geologist, pit geologists, and ore grade
technicians. The geology department will also provide grade control support to mine
operations, and will manage and execute the blast hole sampling and the short range
grade models for operations planning and ore grade definition.

The geotechnical engineer will assume responsibility for all mine geotechnical issues
including pit slope stability, RSF stability and hydro-geological studies. The geotechnical
engineers will also have oversight for the whole property for any geo-hazard monitoring
and assessment programs being carried out by safety personnel or third party
consultants.

GME costs also include engineering consulting on an ongoing basis for specialty items
such as geotechnical, and geo-hydrology expertise and third-party reviews in the open pit
mine area.

16.2.10 MINE CLOSURE AND RECLAMATION

Details on mine closure and reclamation are available in Section 20.7

16.2.11 OPEN PIT MINE EQUIPMENT

Mining equipment descriptions in this section provide general specifications so that
dimensions and capacities can be determined from vendor specification documents.

MAJOR EQUIPMENT
The production requirements for the major mining equipment over the LOM are
summarized in Table 16.10. The current production schedule requires a maximum
haulage fleet of 60 trucks over the LOM.

Table 16.10 Major Equipment Requirements

Pre- Year Year Year
production 5 10 20 Maximum
Drilling
Primary Drill – 311 mm Electric Drill 0 4 5 5 5
Primary Drill – 311 mm Diesel Hydraulic Drill 2 3 3 1 3
High Wall Drill – 150 mm Diesel Hydraulic Drill 4 4 4 4 4
Loading
Primary Shovel – 40 m3 Diesel Hydraulic Shovel 1 2 3 3 3
Primary Shovel – 56 m3 Electric Cable Shovel 0 3 3 3 3
Construction Shovel – 12 m3 2 0 0 0 2
Hauling
Haul Truck – 360 t 15 37 60 58 60
Construction Haul Truck – 90 t 14 0 0 0 14

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 DRILLING EQUIPMENT
The primary production drilling will be carried out in ore and waste with electric rotary
drills with a 311 mm hole size. The production drills will be fitted with GPS navigation
and drill control systems to optimize drilling. Production drilling assumptions are listed in
Table 16.11.

Table 16.11 Open Pit Production Drilling Assumptions

Production Drill –
Mineralized Electric Diesel
Material & Waste Rotary Rotary
Bench Height 15m 15m
Subgrade 2.0m 2.0m
Hole Size 311mm 311mm
Penetration Rate 40.0m/h 40.0m/h
Hole Depth 18m 18m
Over Drill 1.0m 1.0m
Setup Time 2.0 min 2.0 min
Drill Time 27.0 min 27.0 min
Move Time 2.0 min 2.0 min
Total Cycle Time 31.0 min 31.0 min
Holes per Hour 1.94 1.94
Re-drills 6% 6%

A 150 mm diesel percussive drill is also specified for drilling, which is required to operate
in all pit phases for controlled blasting techniques on high wall rows, pioneering drilling
during pre-production, and development of initial upper benches.

A detailed drill study is recommended for more advanced project studies. This will help
determine the penetration rate that can be expected for the selected drills and the
specific rock types that exist within the pit area.

BLASTING EQUIPMENT AND FACILITIES

Blasting activities are detailed in Section 16.2.9.

A blast hole stemming unit will be required to load cuttings into the hole and stem the
unloaded portion of the hole. This unit will be provided by the KSM operation.

The selection of explosives plant locations has avoided geohazards as identified in

Appendix F8.

OPEN PIT LOADING AND HAULING EQUIPMENT

The shovel-truck fleet selected for KSM is the 56 m3 dipper class of electric shovel, and
the 360-t payload class of truck. A 40 m3 dipper class diesel-hydraulic shovel is also
required for difficult to access development benches, and enables pre-production mining

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 before power is established to the mine site. Loading and hauling is discussed in
Section 16.2.9.

Open Pit Dewatering Equipment

The dewatering activities will include the following:

 horizontal drain holes in bench faces

 sloped pit floors as required
 in-pit sumps
 vertical dewatering wells
 a dewatering tunnel behind the north high wall
 water collection system.

Pit water will be collected and transported to the WSF.

OPEN PIT SUPPORT EQUIPMENT

The mine support equipment fleet requirements are summarized in Table 16.12. The
fleet size in Year 5 and Year 10 is shown as representative of the LOM requirement.

Table 16.12 Mine Support Equipment Fleet

Fleet Function Year 5 Year 10
Hole Stemmer – 3 t Blast Hole Stemmer 2 2
Track Dozer – 430 kW Shovel Support 5 6
Rubber Tired Dozer – 350 kW Pit Clean Up 2 3
Fuel/Lube Truck Shovel and Drill Fuelling and Lube 2 3
Wheel Loader Multipurpose – 14 t Pit Clean Up 2 3
Water Truck – 20,000 gal Haul Roads Water Truck 2 2
Track Dozer – 430 kW Dump Maintenance 3 3
Motor Grader – 400 kW Road Grading 4 4
Tire Manipulator Tire Changes 3 3

OPEN PIT ANCILLARY EQUIPMENT

The mine ancillary equipment fleet is listed in Table 16.13. The fleet sizes in Year 5 and
Year 10 are shown as representative of the LOM requirement.

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 Table 16.13 Open Pit Ancillary Equipment Fleet
Fleet Function Year 5 Year 10
Track Dozer – 430 kW Pit Support 2 2
Float Tractor/Trailer – 189 t Float Tractor and Trailer 1 1
Hydraulic Excavator – 6 t Utility Excavator 2 2
Sump Pump - 1,400 gal/min Pit Sump Dewatering 6 6
Light Plant Lighting Plant 6 8
250 t Crane Utility Crane 2 2
Crew Cab Supervision and Crew Transportation 18 18
Ambulance Ambulance 1 1
Hydraulic Excavator – 4 t Utility Excavator 4 3
Mine Rescue Truck Rescue Truck 1 1
Crew Bus Crew Bus 5 5
Maintenance Truck – 1 t Maintenance Truck 5 5
Fire Truck Fire Truck 1 1
Screening & Crushing Plant - 12" max. Road Crush and Stemmings 1 1
Picker Truck Maintenance + Overhauls 2 2
Scraper – 37 t Crush Haul for Winter Roads etc. 5 5
Crane 40 t Hydraulic Extendable Utility Crane 2 2
Wheel Loader – 14 t Crusher (Road Crush) Loader 1 1
Snowcat Winter Off Road Crew Transport 6 6
40 t Crane Utility Crane 2 2
Forklift – 30 t Forklift 1 1
Forklift – 10 t Forklift 2 2
Service Truck Service Truck 5 5
Welding Truck Welding Truck 4 4
Powerline Truck Powerline Maintenance 2 2

Snow Fleet
All of the following snow fleet equipment is chosen to start operating during pre-
production and continue to the end of mine life, unless otherwise noted.

 Five Scrapers with the ability to haul 37 t are included in fleet. The scrapers are
required to haul and spread crushed rock for traction control and remove snow
from the haul roads and mine working areas as necessary. The scrapers are
also used on occasion for small earthmoving jobs and reclamation projects.
 One wheel loader with an approximately 14 t bucket to clear snow from the
plant area and truck shop, as well as ancillary routes within the mine. The wheel
loader is also used to load the cone crusher at the crushing and screening plant.
 Six snowcats to transport operators to equipment in a location that is
inaccessible to the crew bus or vans because of heavy snowfall.

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 The snow fleet has a low utilization as it is only required in wintertime. Other than the
use of the scraper for summer construction projects and stockpiling road crush,
operating the snow fleet equipment outside of wintertime is not currently scheduled.

OPEN PIT ANCILLARY FACILITIES

Shops and Offices
In addition to providing an area for maintenance bays, tire shops, and a wash bay, the
maintenance shop will also house:

 a welding bay
 an electrical shop
 an ambulance
 a first aid room
 a first aid office
 a machine shop area
 a mine dry
 a warehouse
 offices for administration, mine supervision, and engineering/geology staff
 a lunch room and foreman’s office.

The recommended shop sizing for the open pit operations includes eight service bays,
one welding bay, and three wash bays. This will accommodate the fleet for the LOM PFS
production plan. The mine maintenance facility will also include a machine shop area,
tool storage area, mine muster area, warehouse, and office complex. A separate tire bay
facility will be required with an exterior heated pad to accommodate at least two trucks
and a tire manipulator.

16.3 UNDERGROUND MINING OPERATIONS

The Mitchell and Iron Cap block caves are located within the Mitchell Valley and are
accessed by the MTT. Figure 16.14 shows a plan view of the block cave area and the
relationship between the block caves, the MTT, and the North Pit Wall Depressurization
Tunnel. A section view shows the same elements in Figure 16.15.

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 Figure 16.14 Plan View of the Mitchell and Iron Cap Block Cave Mines

Figure 16.15 Section View of the Mitchell and Iron Cap Block Cave Mines (Looking North)

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16.3.1 UNDERGROUND MINE DESIGN INPUTS
This subsection summarizes the block cave mine design inputs that are similar for both
Mitchell and Iron Cap, and includes a geotechnical review and caving analysis.

The quality of the rock mass at the Mitchell deposit is rated as good. No major structural
features are identified that might influence the caving mechanism and the progression of
the cave in any significant manner.

The Iron Cap deposit appears to be composed of strong, moderately fractured rock. Rock
quality variations are most commonly attributed to variations in fracture frequency, as the
strength of the rock mass does not vary significantly within the deposit. The fracture
frequency is higher for Iron Cap than for the Mitchell deposit, resulting in a corresponding
lower predicted median in situ block size of 2.5 m3, as compared to the Mitchell deposit.
There are several gaps in data that are identified in the Iron Cap geotechnical and
hydrogeological studies. These gaps will need to be addressed as part of future
feasibility-level studies.

Caveability assessments for both the Iron Cap and Mitchell deposits have been
completed using Laubscher’s and Mathews’ methods, which involve assessing
caveability based on experience at other mining operations with similar rock quality.
These methods indicate that the size (area) of a footprint required to initiate and
propagate caving is between approximately 110 m and 220 m for both deposits. These
dimensions are significantly smaller than the size of the deposit footprints that can
potentially be mined economically by caving. This fact, together with the general large 3D
shape of the deposits, suggests that both the Iron Cap and Mitchell deposits are
amenable to block cave mining.

In situ stresses have been estimated at the Mitchell deposit using hydraulic fracturing
tests. Based on high-induced stresses in the cave back, as predicted by numerical
modelling, it is expected that stress-induced fracturing of the rock mass will contribute to
caving. More sophisticated numerical analyses to confirm and quantify stress-related
impacts are recommended as part of future studies.

There have been no fracture propagation assessments applicable to preconditioning

designs or in situ stress interpretations developed for the Iron Cap deposit.
Measurements carried out in the Mitchell deposit may not accurately reflect the fracture
propagation and stress environment at Iron Cap because of the effects of surface
topography. Future drilling programs should include hydraulic fracturing tests.

A significant proportion of the rock at the Mitchell deposit is predicted to have block sizes
greater than 6 m3. At Iron Cap, block sizes are predicted to be 2.5 m3. Without adopting
some remediation measure, such large blocks will require significant secondary blasting,
and a significant adverse impact on production and damage to the drawpoints that will
require ongoing rehabilitation is likely. The cost estimates for the designs presented
herein have considered remediation measures to accommodate large fragmentation.

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 The primary measure to accommodate the large fragmentation is to precondition the rock
mass. The costs and scheduling to do this have been incorporated into this study for
both cave mines. However, there are a number of uncertainties associated with
preconditioning due to the limited number of caving mines where it has been applied and
tested. The results from those mines employing preconditioning are encouraging, and
there is sufficient experience in the industry to indicate that such fragmentation concerns
do not represent a fatal flaw at either mine.

The uncertainty in the effectiveness of preconditioning to enhance fragmentation was

addressed via production and cost risk mitigation measures. The average draw rate per
column during steady state production is approximately half of maximum (165 mm/d),
meaning there are roughly two drawpoints available for production for every one required
to meet production targets. In addition, a fleet of mobile rock breakers and remote
blockholers are included in the designs and costs to increase the time a drawpoint is
producing, by decreasing the time it is blocked with oversize.

It is very difficult to quantify the effect of attrition as the rock is brought down within the
cave except that experience has indicated that in caving mines operating under similar
rock conditions to those at Iron Cap and Mitchell, fragmentation of rock drawn down
more than approximately 100 m is generally good. For this study, it is assumed that
fragmentation of the initial 100 m of draw height is approximately equal to the estimated
in situ block size and, above this, only limited secondary blasting will be required.

The expected coarse fragmentation at Mitchell and Iron Cap will result in relatively large
isolated drawcone diameters of 13 m or more, for a loading width of 5 m. The present
experience in other operating mines is that a 15 m by 15 m drawpoint spacing performs
well under these coarse fragmentation conditions. Some caving mines operating in good
quality rock have successfully expanded the layout to 17 m by 17 m or 18 m by 15 m,
but it was considered prudent at this stage of study to adopt the slightly more
conservative 15 m by 15 m spacing.

16.3.2 MITCHELL UNDERGROUND

The Mitchell deposit extends approximately 1,500 m east-west (along strike) and 400 m
to 1,400 m north-south and is between approximately 300 m and 900 m in the vertical
dimension. The deposit is massive, reasonably continuous, and in general, geometrically
suitable to mine by block caving. The potential of mining the Mitchell deposit by a
combination of open pit and underground methods was investigated previously (Golder
2011, Golder 2012) and these studies concluded that it is possible to mine the upper
portions of the Mitchell deposit by open pit methods and the deeper portions by block
caving.

MITCHELL UNDERGROUND MINERAL RESERVES

The Mineral Resource block model used for the study contains gold, copper, silver, and
molybdenum grades, , as presented in Section 14.0, as well as the NSR values which are
described in Section 16.2.4. The model contains Measured, Indicated, and Inferred
grades, but the Inferred grades were set to zero and are not included in this PFS
assessment. The Mineral Resources were constrained by the PFS pit and then evaluated

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 using GEOVIA’s PCBC™ software, to determine the Mineral Reserves for a block cave
mine. Footprints at elevations of 180 m and 235 m produced the most value.
Considering the footprint elevation of 235 m from the 2012 PFS (Tetra Tech 2012), and
the similar geometries of the 2012 and 2016 footprints at this elevation, it was decided
to maintain the footprint elevation at 235 m for this updated study. This resulted in
454 Mt of block cave Mineral Reserves, as shown in Table 16.14.

Table 16.14 Mitchell Block Cave Mineral Reserves ($15 NSR Shut-off)
Tonnes Au Cu Ag Mo
Category
(million) (g/t) (%) (g/t) (ppm)
Probable1 454 0.53 0.17 3.5 33.6
Notes: 1Includes 10 Mt of mineralized dilution (the portion of Measured and Indicated material that is

$0 < NSR < $16) and 59 Mt of non-mineralized dilution (material at zero NSR including the Inferred
material set to zero grade).

The Mineral Reserves contain dilution that include Mineral Resources that have grade,
but are sub-economic (less than drawpoint shut-off), Inferred Mineral Resources that are
set to zero grade, and non-mineralized material that is zero grade rock. Dilution
estimates for the Mitchell block cave are 2% of sub-economic material (10 Mt) and 13%
of zero grade dilution (59 Mt), for a total of 15% (69 Mt).

MITCHELL UNDERGROUND MINE DESIGN

The underground mine design is based on modelling using GEOVIA’s PCBC™ software and
Footprint Finder module. Footprint Finder modelling indicates that the optimum footprint
for the Mitchell deposit is approximately 728 m wide in the north-south direction,
1,022 m wide in the east-west direction, and 860 m vertically, with the footprint elevation
established at 235 m. PCBC modelling indicates that the block cave could produce
20 Mt/a (55,000 t/d), requiring the development of 120 new drawpoints per year. The
final mine design includes approximately 218 km of drifts and raises, including a 25%
design allowance to account for the excavation of infrastructure such as service bays,
fueling stations, wash bays, sumps, and electrical substations, and to account for over
break.

The mine design comprises six main of levels: preconditioning, undercutting, extraction,
secondary breakage, haulage, and conveying (Figure 16.16). In addition, the design
includes a service ramp to surface to provide access for personnel, equipment and
materials, and a conveyor ramp to the MTT ore bin for excavated material to be loaded on
the MTT train to the mill. The floors of the extraction drifts and drawpoints are designed
to be concreted, which will increase the speed and productivity of the load-haul-dump
(LHD) vehicles, as well as reduce equipment maintenance. The six levels of the mine
design will be accessed through internal ramps beginning on the extraction level. These
ramps will be strategically positioned to maintain access to the levels during caving and
to meet ventilation requirements.

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 Figure 16.16 Section View of the Mitchell Block Cave Mine Design (Looking South)

There are 34 extraction drifts on the extraction level, and each drift is designed with
three ore passes. This will reduce the average LHD haul distance to approximately
100 m and improve productivity. The ore passes from neighbouring extraction drifts will
feed a stationary rockbreaker on the secondary breaking level, which will reduce the size
of the material further, and feed it to the haulage level via passes with chutes. A train on
the haulage level will haul the material to centrally located gyratory crushers, where it will
be crushed and conveyed to the surface.

In 2012, BGC evaluated the surface disturbance and ground deformation caused by
block caving the Mitchell deposit (BGC 2012), and the analysis is still applicable to this
study. It was found that the MTT and Mitchell OPC are outside the zone of disturbance
resulting from caving mining.

MITCHELL UNDERGROUND EQUIPMENT AND MAJOR INFRASTRUCTURE

The proposed mobile diesel equipment is typical of that used in underground mines and
will comprise units directly related to moving ore to the crushers (7 m3 LHDs, secondary
rockbreakers, and the train), development equipment (4.6 m3 LHDs and 18 m3 trucks),
as well as ANFO loaders and ground support machines. In addition, service equipment is
included for construction, supervision, engineering, and mine maintenance activities. At
peak production, Mitchell will require a fleet of approximately 55 units of mobile
underground equipment.

The mine workforce includes both staff and labour positions and the size varies
according to the stage of the mine life, with a peak quantity of 379 personnel in Year 30
(in Project years). Groundwater inflows are very small compared to surface runoff and
will be readily handled by the proposed dewatering system.

The majority of the main ventilation infrastructure will be located on the extraction level.
It will consist of two fresh air raises, two fresh air drifts, a fresh air ring drift, multiple
internal ventilation raises, a return air drift, and two exhaust raises. An airflow of
860 m3/s is required for the Mitchell mine to achieve a production rate of 55,000 t/d,

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 based upon the diesel equipment utilized, air velocity considerations, and an allowance
of 20% per level for items such air loss around regulators, poorly installed or damaged
ducting, and ventilating any inactive headings in the active mining areas. Heating the
mine air in the winter months is included in the design and cost estimates. It is
estimated that the Mitchell mine will require approximately 25.1 MWh of electricity at
peak operation. The main contributors to this are the crushers, conveyor belts,
ventilation fans, and dewatering pumps.

The mine dewatering system will require an average of 3.9 MWh, with a maximum of
29 MWh during a peak storm event, which is greater than that required to operate the
entire mine under normal conditions. The strategy will be to shut down or reduce
operations in the underground mine, along with other site facilities, during flooding
events when the high-powered pumps are required. This will allow power to be diverted
from normal operations to power the pumps.

The hydrological characterization of the site indicates that a 200-year runoff event could
lead to a maximum one day inflow of approximately 773,000 m3 of water, even with the
construction of diversion ditches beyond the crest of the pit. To accommodate this
inflow, the dewatering plan includes significant pumping and storage capacity
underground. Two, 6.0 km long, 7.5 m x 7.5 m dewatering tunnels have been designed
to convey water from the mining area to beneath the water treatment plant where eight
multi-stage centrifugal pumps will lift the water and transport it to the WSD. The system
is designed to handle flows at variable combined rates up to 4 m3/s.

MITCHELL UNDERGROUND SCHEDULES

The mine development schedule is separated into three phases; an initial pre-production
phase, which develops the primary access ramp and conveyor drifts; a second ore
production phase that creates sufficient openings to start and ramp-up production from
the cave; and the final phase once the mine has reached steady-state production, and
the development fleet is only required to create sufficient openings to maintain
production. The average length of required annual development is approximately
4,000 m, with peak development occurring during the second phase, when
approximately 15,000 m/a is required. The pre-production development phase for
Mitchell block cave is six years.

The mine production schedule was developed using GEOVIA PCBC™ software. It is
assumed that sloughing of peripheral waste rock will occur into the crater above the cave
and cover the upper surface of the material being drawn down. This was modelled in
PCBC by adding an infinite supply of waste material on top of the mineralized material.
As material is drawn from the drawpoints, the waste will mix with mineralized material as
dilution with zero grade, and the combined material will report to the drawpoint. Due to
the large fragmentation that is estimated to report to the drawpoints at Mitchell,
particularly during the early stages of mining, a draw rate of 200 mm/d was chosen as a
maximum draw rate in the PCBC analysis. However, an average draw rate of only
108 mm/d is required to achieve production targets (the maximum draw rate modeled
never exceeds 165 mm/d, so there are roughly twice as many drawpoints available as
are required to meet production targets). Initially, it is assumed that a drawpoint can

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 produce at 60 mm/d and that this will steadily increase until 50% of a column is mined.
Then, the drawpoint will produce up to the set maximum of 200 mm/d. Mitchell is
estimated to have a production ramp-up period of six years, steady state production at
20 Mt/a for 14 years, and then ramp-down production for another 7 years. Figure 16.17
presents the lateral development, rehabilitation, and production schedules in Project
years.

Figure 16.17 Mitchell Block Cave Mine Development and Production Schedules

16.3.3 IRON CAP UNDERGROUND

The Iron Cap deposit extends approximately 1,200 m east-west (along strike), 700 m
north-south, and 800 m in the vertical direction. It is understood that the deposit
remains open at depth. Open pit mining methods were used to evaluate the mining
potential of this deposit as part of an update to a PFS published in 2011. Similar to
Mitchell, the location, dimensions, and dip of the mineralized material at Iron Cap
indicates that it is a suitable candidate for block caving.

IRON CAP UNDERGROUND RESERVES

The Mineral Resource block model used for the study contains gold, copper, silver, and
molybdenum grades as presented in Section 14.0, as well as NSR values described in
Section 16.2.4. The model contains Measured, Indicated, and Inferred grades, but the
Inferred grades were set to zero and are not included in this 2016 PFS. The Mineral
Resources were evaluated using GEOVIA’s PCBC™ software to determine the Mineral
Reserves for a block cave mine. A footprint at an elevation of 1,035 m produced the
most value and resulted in 224.6 Mt of block cave Mineral Reserves as shown in Table
16.15.

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 Table 16.15 Iron Cap Block Cave Reserves ($16 NSR Shut-off)
Tonnes Au Cu Ag Mo
Category (million) (g/t) (%) (g/t) (ppm)
Probable1 224.6 0.49 0.20 3.6 13.0
Notes: 1Includes 25 Mt of mineralized dilution (the portion of Measured and Indicated material that is
$0 < NSR < $16) and 20.2 Mt of non-mineralized dilution (material at zero NSR including the
Inferred material set to zero grade).

The Mineral Reserves contain dilution that includes Mineral Resources that have grade,
but are sub-economic (less than drawpoint shut-off), Inferred Mineral Resources that are
set to zero grade, and non-mineralized material that is zero grade rock. Dilution
estimates for the Iron Cap block cave are 11% of sub-economic material (25 Mt) and 9%
of zero grade dilution (20.2 Mt), for a total of 20% (45.2 Mt).

IRON CAP UNDERGROUND MINE DESIGN

The underground mine design is based on modelling using GEOVIA’s PCBC™ software
Footprint Finder module. Footprint Finder modelling indicates that the optimum footprint
for the Iron Cap deposit is at an elevation of 1,035 m and is approximately 600 m wide in
the north-south direction and 400 m wide in the east-west direction. PCBC modelling
indicates that the block cave could produce 15 Mt/a (average of 40,000 t/d), requiring
development of 120 new drawpoints per year. The mine design requires approximately
87 km of drifts and raises, including a 25% design allowance to account for the
excavation of infrastructure such as service bays, wash bays, fueling station, refuge
stations, sumps and electrical substations, and to account for over break.

The Iron Cap mine design includes four main levels: preconditioning, undercutting,
extraction, and conveying (Figure 16.18). The design also includes a return air drift
located between the conveying and extraction levels. The floors of the extraction drifts
and drawpoints are designed to be concreted, which will increase the speed and
productivity of the LHD vehicles as well as reduce equipment maintenance.

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 Figure 16.18 Section Looking East of the Iron Cap block Cave Mine Design

Personnel, material, and supplies will access the Iron Cap mine through a drift driven
from the Mitchell underground access ramp. Two fresh air portals and one exhaust
portal are planned on the north slope of the Mitchell valley. These tunnels may act as an
emergency egress. The fresh air tunnels will connect to surface and a perimeter drift will
be constructed around the mine footprint to provide fresh air to the mine workings.

Excavated material will be hauled directly from the drawpoints to one of four gyratory
crushers installed on the extraction level perimeter drift. The crushed material will be
transported by one of two conveyor belts, which both feed a third conveyor that will
transport the production material to a surge bin located above the Iron Cap MTT train
tunnel.

IRON CAP UNDERGROUND EQUIPMENT AND MAJOR INFRASTRUCTURE

The proposed mobile diesel equipment is typical of that used in underground mines and
will comprise equipment related to moving ore to the crushers (7 m3 LHDs and secondary
rock breakers), development equipment (4.6 m3 LHDs and 18 m3 trucks), as well as the
ANFO loaders and ground support machines. In addition, service equipment is included
for construction, supervision, engineering and mine maintenance activities. At peak
operation, Iron Cap will require a fleet of approximately 51 units of mobile underground
equipment.

The Iron Cap mine workforce includes both staff and labour positions and the size varies
according to the stage of the mine life with a peak quantity of 350 personnel in Year 38
(KSM production years).

The required airflow for the Iron Cap mine is 548 m3/s based upon the total diesel
equipment used on each mining level, including a 20% design allowance for items such
air loss around regulators, poorly installed or ripped ducting, and ventilating unused

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 headings in active sections of the mine. It is estimated that the Iron Cap mine will
require 9.1 MWh of electricity at peak operation.

The hydrological characterization of the Iron Cap site indicates that a 200-year runoff
event could lead to a maximum one-day inflow of approximately 292,000 m3 of water.
The underground water management system at Iron Cap is currently designed to handle
4 m3/s. This caters for the estimated groundwater inflow and ice melt. The surface
inflows will report to the drawpoints and will be managed in a similar manner to the
groundwater inflows. To provide for drainage, the underground drifts will be graded so
that water will naturally drain towards the MTT. Any flood water will be directed through
the return airway drift and into the Mitchell NPWDA by a series of raises connecting the
two tunnels. Pumps are not required to dewater Iron Cap.

IRON CAP UNDERGROUND MINE SCHEDULE

The mine development schedule is separated into three phases: an initial pre-production
phase, which develops the primary access ramp and conveyor drifts; a second ore
production phase that creates sufficient openings to start and ramp-up production from
the cave; and a final phase once the mine has reached steady-state production and the
development fleet is only required to create sufficient openings to maintain full
production. The length of development required during the peak development period is
approximately 10,000 m/a. The pre-production development period for Iron Cap is six
years.

The mine production schedule was developed using GEOVIA’s PCBC™ software. It is
assumed that sloughing of peripheral waste rock will occur into the crater and cover the
upper surface of the material being drawn down. This was modeled in PCBC by assuming
that an infinite supply of waste material is present on top of the mineralized material. As
material is drawn from the drawpoints, the waste rock will mix with mineralized material
as dilution with zero grade, and the combined material will report to the drawpoint.

The draw rates used in the PCBC modelling of Iron Cap are similar to those used at
Mitchell, for similar reasons. During the early stages of mining, a draw rate of 200 mm/d
was chosen as a maximum draw rate in the PCBC analysis. However, an average draw
rate of only 110 mm/d is required to achieve production targets, so there are roughly
twice as many drawpoints available as are required to meet production targets (the
maximum draw rate modeled never exceeds 180 mm/d). Iron Cap is estimated to have a
production ramp-up period of four years, steady state production at 15 Mt/a for 10 years,
and then ramp-down production for another 9 years. Figure 16.19 presents the lateral
development and production schedules in Project years.

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 Figure 16.19 Iron Cap Block Cave Mine Development and Production Schedules

16.4 MINE PRODUCTION SCHEDULE

The summarized production schedule results are shown in Table 16.16 and Figure
16.20, including both open pit and underground mining. The mine production plan starts
in lower capital cost open pit areas using conventional large-scale equipment before
transitioning into block cave underground bulk mining later in the mine life. Starting pits
have been selected in higher grade lower strip ratio areas and cut-off grade strategy is
used to enhance revenues for a minimum capital payback period. The cut-off strategy
stockpiles lower grade open pit material early in the mine life. The Mitchell and Iron Cap
underground block caves are brought into a development and production sequence to
provide continuous mill feed during the LOM, while evening out the mine’s sustaining
capital requirements. The open pit sequencing is then adjusted to augment the
underground ore production to meet the full mill throughput requirements. The Mitchell
underground block cave starts ore production in Year 23 and ramps up to full production
by Year 29. Iron Cap block cave ore production starts in Year 32 and reaches full
production by Year 36. At this point, all ore is supplied by the Mitchell and Iron Cap
underground block caves (a total of 96,000 t/d). As the Mitchell block cave production
starts to ramp down (starting in Year 46), the mill feed is further reduced to 62,000 t/d.
In the final years of production (Year 49 and onwards), the underground ore is
supplemented with material stockpiled from the open pits to maintain 62,000 t/d of mill
feed.

Details of the production schedule can be found in Appendix E1.

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Table 16.16 Summarized Production Schedule – Open Pit and Underground

Note: 1Waste mined in the production schedule in Figure 16.20 includes re-handled waste and waste mined from borrow pit sources for construction purposes.
2The mill feed specified in Table 16.16 only includes ore from the Proven and Probable open pit and underground Mineral Reserves and does not include any Inferred

Mineral Resources.

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Figure 16.20 KSM Mill Feed Production Schedule

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17.0 RECOVERY METHODS

17.1 INTRODUCTION
The proposed KSM plant will have an average process rate of 130,000 t/d. The process
plant will receive ore from the Mitchell, Kerr, Sulphurets, and Iron Cap deposits. The
planned mill life is approximately 53 years, excluding the production development stage
and closure stage. The Mitchell deposit will be the dominant resource of mill feed for the
process plant and will supply mill feed throughout the projected LOM. The ore from the
Sulphurets deposit will be fed to the plant together with the ore from the Mitchell pit from
Years 1 to 17, excluding Years 4, 5, 12 and 13, and with the ores from the other deposits
during the last four years. The ore from the Kerr deposit, together with the ores from the
other deposits, will be introduced to the plant during Years 24 to 34 and 53, while Iron
Cap ore will be fed to the process plant from Year 32 to the end of mine life.

A combination of conventional flotation and cyanidation processes are proposed for the
Project. The process plant will consist of three separate facilities:

 an ore primary crushing and handling facility at the Mitchell mine site
 an ore transportation system by trains through the MTT
 a main process facility at the plant site at the Treaty OPC area, including
secondary/tertiary crushing, primary grinding, flotation, regrinding,
leaching/recovery, and concentrates dewatering.
These processes are shown in the simplified flowsheet in Figure 17.1 and are detailed in
the following sections.

Detailed process flowsheets, and general site and plant layouts are available in
Appendices C1 and C2, respectively.

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Figure 17.1 Simplified Process Flowsheet

Source: Tetra Tech

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 The ores from the Sulphurets and Kerr deposits and the upper zone of the Mitchell
deposit will be extracted by open pit mining, while the ores from the Iron Cap deposit and
the lower Mitchell deposit will be mined by underground block caving. The primary
crushing facilities located on the Mitchell mine site will reduce the ROM particle size to
approximately 80% passing 150 mm by gyratory crushers. Ores from the Sulphurets and
Kerr deposits will be crushed at their respective sites, excluding the Sulphurets ore
produced in Year 1, which will be hauled to and crushed at the Mitchell site. The ores
from the lower Mitchell Zone and the Iron Cap deposit will be mined by block caving and
be crushed in the underground mine. The crushed materials will then be transported by
conveyors, or by a combination of conveyors and trains, to the MTT and loaded onto the
MTT ore transport trains. The crushing circuit at the Mitchell surface site will include:

 primary crushing by two 60 inch by 89 inch gyratory crushers

 crushed ore transport conveyors.
The crushed ore will be transported by a train transport system through the MTT to the
main plant site located at the Treaty OPC site, approximately 23 km northeast of the
mine site. The main process plant will consist of the following process facilities:

 secondary crushing by cone crushers in closed circuit with screens

 tertiary crushing by HPGR in closed circuit with screens
 primary grinding by ball mills
 copper-gold/molybdenum bulk flotation with regrinding of bulk concentrate
 copper-gold/molybdenum separation depending on molybdenum grade of mill
feed
 copper-gold concentrate and molybdenum concentrate dewatering
 gold CIL cyanide leaching of scavenger cleaner tailing and pyrite rougher
concentrate
 gold recovery by carbon elution and production of gold dore
 cyanide recovery, and then cyanide destruction of washed CIL residue prior to
disposal of the residue in the lined pond within the TMF.
The TMF, located southeast of the main process plant, is designed to store flotation
tailing and CIL tailing, which will be stored in the lined tailing pond of the TMF.

The mill feed produced from the Mitchell crushing facility or from the block caving sites
will be transported via the MTT train system to the coarse ore stockpile at the Treaty OPC
site. The stockpile will be located at the exit portal of the MTT tunnel and will have a live
capacity of 60,000 t. The coarse ore will be reclaimed and be further crushed by five
cone crushers (four in operation and one on standby) and then four HPGRs in closed
circuit with vibrating screens.

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 The screen undersized material from the HPGR circuit will be fed to four ball mills in
closed circuit with hydrocyclones. Ore solids will be reduced to a particle size of 80%
passing 125 to 150 µm.

The products from the primary grinding circuits will be fed into copper-gold/molybdenum
rougher/scavenger flotation circuits, consisting of two operation two parallel circuits. The
copper rougher flotation concentrates from the flotation circuits will be reground to a
particle size of 80% passing approximately 20 µm in tower mills.

The reground rougher concentrate will then be upgraded in a cleaner flotation circuit with
three stages of copper cleaner flotation producing a copper-gold or copper-
gold/molybdenum concentrate with an average grade of 25% copper. Depending on the
molybdenum content in the copper-gold/molybdenum concentrate, the bulk concentrate
may be treated by flotation to produce a molybdenum concentrate and a copper-gold
concentrate. The molybdenum concentrate will be leached using the Brenda Mines
procedure to reduce copper and lead contents.

The final copper concentrate(s) will be dewatered by a combination of thickening and

pressure filtration to approximately 9% moisture before being transported to the Stewart
port site for ship loading and delivery to copper smelters, while the molybdenum
concentrate will be further dried prior to being shipped in bags to the port at Prince
Rupert for delivery to molybdenum smelters.

The copper-gold/molybdenum rougher scavenger flotation tailing will be subjected to

further flotation producing a gold-bearing pyrite concentrate. The final pyrite flotation
tailing will be sent to the TMF for storage. The pyrite concentrate will be reground in
tower mills to a particle size of 80% passing approximately 20 µm.

The reground gold-pyrite concentrate and the first copper cleaner tailing from the copper-
gold/molybdenum cleaner flotation circuit will be separately leached in a CIL cyanidation
plant to recover the contained gold. The sulphide pulp will be pre-oxidized by aeration
prior to cyanidation. Dissolved gold will be adsorbed onto activated carbon in the CIL
circuit.

The loaded carbon from the two streams will be combined and gold stripped from the
carbon by a conventional Zadra pressure stripping process, and the gold in the pregnant
solution will be recovered in the subsequent electrowinning process. The barren solution
from the elution circuit will be circulated back to the leach circuit. The gold sludge
produced from the electrowinning circuit will be smelted using a conventional
pyrometallurgical technique to produce gold-silver doré bullion.

The residues from the leach circuit will be pumped to a conventional counter-current
decantation (CCD) washing circuit. The solution from the circuit will be sent to a cyanide
recovery circuit using a combination of a SART process, and an AVR process. The AVR
process will recover the free cyanide from the solution by acidifying and stripping the
solution and then absorping the stripped hydrogen cyanide gas by a sodium hydroxide
solution to recover the cyanide for reuse.

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 The washed residues will be treated by an sulphur dioxide/air cyanide destruction
process to destroy the residual weak acid dissociable (WAD) cyanide. The leach residues
will then be further treated by carbon adsorption to remove dissolved copper. The copper
will be stripped off from the activated carbon and precipitated by sodium sulphide as
copper sulphide which will be blended into copper concentrates for sale.

The treated residues will then be transported by pipeline to the lined CIL pond of the TMF.
The sulphide leach residues will be stored under water at all times to prevent the
oxidation of sulphides.

The Treaty Process Plant layout and the primary grinding and flotation facility are
depicted in Figure 17.2 and Figure 17.3

17.2 MAJOR PROCESS DESIGN CRITERIA

The concentrator is designed to process an average of 130,000 t/d. The major criteria
used in the design are shown in Table 17.1.

Table 17.1 Major Design Criteria

Criteria Unit Value
Average Daily Process Rate t/d 130,000
Operating Year d 365
Primary/Secondary Crushing
Availability – Primary Crushing % 70
Availability – Secondary Crushing % 85
Primary Crushing Product Particle Size, P80 µm 150,000
Secondary Crushing Product Particle Size, P80 µm 45,000
HPGR/Grind/Flotation/Leach
Availability % 94
Milling and Flotation Process Rate t/h 5,762
Mill Feed Size, P80 µm 2,000
Primary Grind Size, P80 µm 125-150
Bond Ball Mill Work Index - Design kWh/t 16
Bond Abrasion Index g 0.293
Concentrate Regrind Size, 80% Passing
Cu/Au Rougher/Scavenger Concentrate µm 20
Au-Pyrite Concentrate µm 20
Gold-bearing Materials Leach Method - CIL
Feed Mass to CIL Circuit t/d 14,600

The complete design criteria are detailed in Appendix D.

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Figure 17.2 Treaty Process Plant Layout

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Figure 17.3 Treaty Process Plant Primary Grinding and Flotation Facility

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17.3 PROCESS PLANT DESCRIPTION
17.3.1 PRIMARY CRUSHING
There will be five primary crushing sites throughout the Project life at the Mitchell, Kerr,
and Sulphurets sites, as well as in the underground block caving mines. The proposed
mill feed rates from these deposits are shown in Figure 17.4.

At the Mitchell OPC site, primary crushing will mainly consist of two 60 inch by 89 inch
gyratory crushers, two apron feeders, and one train load surge bin feed conveyor. The
ROM material feeding to the gyratory crushers will be from the Mitchell pit and the first
year Sulphurets pit, and will be approximately 80% passing 1,200 mm. The oversize
materials will be broken by a rock breaker. The gyratory crushers will reduce the ROM to
a particle size of 80% passing 150 mm or less. The products from each gyratory crusher
will be fed to one 1.83 m wide by 37 m long conveyor via one 2.13 m wide by 10 m long
apron feeder. The crushed ore from the two conveyors will be fed to a 2.13 m wide by
450 m long train load surge bin feed conveyor, which will be located inside of the Mitchell
surge bin feed conveyor tunnel. The surge bin is designed to have a live capacity of
30,000 t (there are two pockets, each 15,000 t). The ore from the Mitchell open pit will
feed to the mill during Years 1 to 22, 34, 35, 48, and 49.

Figure 17.4 Proposed Mill Feed Rates from Open Pit and Blockcaving Operations

For the underground block cave operation, the ore from the lower Mitchell zone will be
mined by block caving and crushed on site to 80% passing 150 mm or finer. The
crushed ore will be conveyed to the 30,000-t surge bin where the crushed ore will be
blended with the materials from the Mitchell and Sulphurets pits and then loaded from
the surge bin into the train cars and transported to the end of the MTT at the Treaty site.
The ore will be fed to the mill during Years 19 to 49.

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 The Sulphurets ore will supplement the mill feed between Years 1 to 17, excluding Years
4, 5, 12 and 13, and with the ores from the other deposits during the last four years.
The ROM ore from the Sulphurets pit will be trucked to the Mitchell site and crushed at
the Mitchell crushing facility in Year 1. Starting from Year 2, the ore produced will be
crushed by a 60 inch by 89 inch gyratory crusher at the Sulphurets mine site. The
crushed ore will be conveyed to the Mitchell site via the 3.0 km SMCT to a 10,000-t
Sulphurets/Kerr coarse ore stockpile. The stockpiled ore will then be reclaimed and
trucked to the Mitchell crusher dumping pockets, where the ore will pass through the
crushers and be sent to the 30,000-t surge bin together with the crushed Mitchell ore.

The ore from the Kerr deposit, together with the ores from the other deposits, will be
introduced to the plant during Years 24 to 34 and 53, the ROM ore and waste rock from
the Kerr pit will be crushed by two 60 inch by 89 inch gyratory crushers at the Kerr mine
site. The crushed ore will then be conveyed to Mitchell through a 2,480 m cross valley
rope conveyor to the Sulphurets site, followed by the 3.0 km overland conveyor through
the SMCT to the Sulphurets/Kerr coarse ore stockpile at the Mitchell site. The ore from
the stockpile will be trucked to the Mitchell crushing facility or to the 10-Mt surge
stockpile for later reclaiming and delivery to the Mitchell crushing facility. Similarly, the
reclaimed ore will be trucked to the Mitchell crusher dumping pockets, where the ore will
pass through the crushers and be sent to the 30,000-t surge bin together with the
crushed Mitchell ore.

Waste rock from the Kerr mine will be conveyed from the Kerr to the Sulphurets pit via
the rope conveyor. The waste rock will then be backfilled into the mined Sulphurets pit
for storage.

The Iron Cap ore will be mined by block caving and crushed on site to 80% passing
150 mm or finer. The crushed ore will be conveyed to a surge bin located at the end of
the Iron Cap and MTT connection tunnel. The ore will supplement the mill feed from
Year 32 to to the end of mine life.

17.3.2 COARSE ORE TRANSPORT FROM MITCHELL SITE TO TREATY SITE

The crushed ore will be reclaimed by two automatic train loading systems from the two
coarse ore surge bins at the Mitchell site and transported to the plant site by a train
transport system through the MTT. The ore from the Iron Cap site will be loaded into the
train cars at the Iron Cap underground site from the Iron Cap surge bin and transported
to the Treaty site via an Iron Cap and MTT connection tunnel and then through the MTT.
Loading chutes under the ore surge bins will feed ores into awaiting trains that will
transport the ores to an unloading station at the Treaty end of the MTT. Because the
loading and unloading systems, including surge bins are located underground, the
arrangement would mitigate potential freezing issues. The train cars will dump ore into a
live underground unloading bin. Two apron feeders will unload the bin onto a conveyor to
transport the ore to the top of the Treaty coarse ore stockpile. Loading chutes will be
controlled remotely, and unloading chutes will operate autonomously. No onboard
operators will be required within the tunnels during train system operation.

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 Each train will consist of one, 140-t electric locomotive and 16, 42-m3 belly dump ore
cars that will have the capacity to deliver 800 t/h from Mitchell to Treaty based on 90-
minute cycle times. On average, eight trains will deliver approximately 130,000 t/d of
ore to meet the process plant requirements. An additional four trains will be on standby
to provide for mechanical availability or to handle an increase in plant feed of up to
10,000 t/h. The transport system is detailed in Section 18.3. Dust collecting systems
will be installed at the loading and unloading points to collect fugitive dust.

17.3.3 COARSE MATERIAL HANDLING

The crushed ore from the trains will be continuously and automatically unloaded from the
bottom discharge ore cars into the bin underneath, with each car taking an average of
nine seconds to unload. The train will be driven via traction drives across the unloading
station at a maximum speed of 2.5 km/h.

At the bottom of the surge bin, the ore will be reclaimed by two apron feeders and then
onto a conveyor belt that will transport the ore to the surface and feed the Treaty coarse
ore stockpile with a live capacity of 60,000 t at the Treaty OPC site. Apart from the
conveyor tunnel, a vertical escape tunnel that joins up the unloading station and the
surface will be constructed for any emergencies.

The ore will be reclaimed from the stockpile by six, 1.8 m wide by 8.5 m long apron
feeders and conveyed in two lines to the secondary crushing circuit. A dust collecting
system will be installed at each of the transfer points to collect fugitive dust. The reclaim
tunnel will be heated to prevent potential freezing during operation in winter.

17.3.4 SECONDARY CRUSHING

The reclaimed coarse ore will be conveyed to the secondary crushing facility and fed to
four vibrating screens. Each screen oversize will feed a secondary cone crusher. Each
secondary crusher is in closed circuit with a screen. The cone crusher product will return
to the screen feed conveyor. A spare cone crusher is provided in the circuit for when any
of the other four cone crushers require maintenance.

Screen undersize product that is finer than 50 mm will be delivered by conveying to an

enclosed surge stockpile with a 60,000-t live capacity. The circuit will consist of the
following key equipment:

 five cone crushers, each with an approximately 2.4 m diameter mantle and
driven by a 750-kW motor or equivalent
 five 3.7 m wide by 7.3 m long double deck vibrating screens (one on standby).

17.3.5 TERTIARY CRUSHING MATERIAL CONVEYANCE/STORAGE

The crushed ore from secondary crushing will be reclaimed from the 60,000-t stockpile
by six 1.5 m by 7.6 m reclaim apron feeders onto two 1.37 m-wide HPGR feed conveyors.
These conveyors will deliver the ore to two tertiary crusher HPGR feed surge bins, each
with a live capacity of 400 t. Similarly, the stockpile reclaim tunnel will be heated to
prevent potential freezing during winter operation.

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17.3.6 TERTIARY CRUSHING
The reclaimed ore will be further crushed by four HPGR crushers. Four belt feeders will
withdraw the reclaimed ore from the two HPGR feed surge bins and feed each of the four
HPGR crushers separately. Each HPGR crusher is in closed circuit with a 4.0 m wide by
8.0 m long double deck vibrating screen. Discharge from the HPGR crushers will be wet-
screened at a cut size of 6 mm. The screen oversize will return to the feed conveyor of
the HPGR feed bin while the screen undersize will leave the crushing circuit and report to
the ball mill grinding circuits. The four HPGR crushing lines will have a total process
capacity of 5,762 t/h. The key equipment is as follows:

 four HPGR crushers, each equipped with two 2,900 kW motors

 four 4.0 m wide by 8.0 m long vibrating screens
 four 1.5 m wide by 10.0 m long belt feeders.

17.3.7 PRIMARY GRINDING

The grinding circuit will employ conventional ball mills to grind the HPGR product to a
particle size of 80% passing 125 to 150 µm. All the primary grinding circuits are
designed to have a nominal processing rate of 5,762 t/h.

The primary grinding circuit will include four milling circuits, which are made up of the
following equipment:

 four 7.6 m diameter by 11.9 m long (25 ft by 39 ft) ball mills, each mill driven by
two 7.0 MW synchronous motors
 six 700 mm by 650 mm centrifugal slurry pumps (4 in operation and 2 on
standby), each equipped with a 1,650 kW variable speed drive
 four hydrocyclone clusters, each with twelve 710 mm diameter hydrocyclones.
Each ball mill will be in closed-circuit with a cluster of twelve 710 mm diameter
hydrocyclones. The hydrocyclone underflow will gravity-flow to the ball mill feed chute,
while the overflow of each hydrocyclone cluster with a solid density of 37% weight/weight
(w/w) will gravity-flow to one of four copper-gold-molybdenum rougher flotation trains.

Lime will be added to each mill as required. Flotation collectors will be added to the
hydrocyclone feed sumps or to the hydrocyclone overflow collecting sumps.

17.3.8 COPPER, GOLD AND MOLYBDENUM FLOTATION

COPPER-GOLD/MOLYBDENUM BULK ROUGHER/SCAVENGER FLOTATION
There will be two copper-gold-molybdenum bulk rougher flotation circuits. The overflow
from two of the four hydrocyclone clusters from the primary grinding circuits will
separately feed the two flotation trains, each consisting of six 300-m3 flotation cells. The
flotation reagents used will include lime, A208, 3418A, fuel oil, and MIBC. A bulk copper-
gold/molybdenum rougher flotation concentrate, approximately 6% by weight of the

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 flotation feed, will be reground. The flotation tailing will be sent to the pyrite flotation
circuit.

COPPER-GOLD/MOLYBDENUM BULK CONCENTRATE REGRINDING

The copper-gold/molybdenum bulk concentrate will be reground to a particle size of 80%
passing 20 µm in a regrind circuit consisting of three tower mills, each with an installed
power of 2,240 kW, and a 250 mm diameter hydrocyclone cluster. The overflow of the
hydrocyclones will gravity-flow to the bulk copper-gold/molybdenum cleaner circuit, while
the underflow of the hydrocyclones will return to the regrinding mills by gravity flow.

COPPER-GOLD/MOLYBDENUM BULK CONCENTRATE CLEANER FLOTATION

The hydrocyclone overflow will be cleaned in three stages. In the first stage of cleaner
flotation, six 100-m3 tank cells will be used; for the second and third stages, three 50-m3
tank cells and two 50-m3 tanks will be used separately. First cleaner flotation tailing will
be further floated in two cleaner scavenger flotation cells each with a 100-m3 capacity.
The concentrate product from the cleaner scavenger flotation will be sent to the first
cleaner cells and the tailing will report to the gold leaching circuit. The tailing from the
second and third cleaner flotation stages will be returned to the head of the preceding
cleaner flotation circuit. Final copper-gold/molybdenum bulk concentrate will be sent to
copper-gold/molybdenum bulk concentrate thickener.

The same reagents used in the rougher flotation circuit will be employed in the cleaner
flotation circuits.

COPPER-GOLD AND MOLYBDENUM SEPARATION

Depending on molybdenum content, the final copper-gold/molybdenum concentrate may
be further processed to produce a copper-gold concentrate and a molybdenum
concentrate. The separation will employ a conventional process, which will include
copper suppression by sodium sulphide and four-stages of molybdenum cleaner flotation
and regrinding. The circuit will include the following key equipment:

 one 15 m diameter high rate thickener

 six 30-m3 conventional mechanical flotation cells
 one 1.5 m diameter by 4.5 m high column cell
 one 1.1 m diameter by 4 m high column cell
 two 1.0 m diameter by 4 m high column cells
 one nitrogen gas generator
 one regrinding stirred mill.
The copper-gold/molybdenum bulk concentrate will be thickened prior to the copper-
gold/molybdenum separation. The thickener underflow will be diluted and conditioned
with sodium sulphide and gravity flow into the molybdenum rougher flotation cells. The
rougher flotation tailing will be scavenged by flotation and the scavenger concentrate will

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 return to the rougher flotation head while the tailing will be the final copper-gold
concentrate reporting to the copper-gold concentrate dewatering circuit.

The resulting rougher molybdenum concentrate will be classified by a hydrocyclone. The

hydrocyclone underflow will be reground by a stirred mill and join with the hydrocyclone
overflow reporting to the molybdenum cleaner flotation circuit. Four stages of cleaner
flotation are designed to upgrade the molybdenum rougher flotation concentrate to
marketable grade. The tailing of each cleaner flotation will be returned to the head of the
preceding molybdenum cleaner flotation circuit while the first cleaner tailing will be sent
to the molybdenum rougher flotation conditioning tank. To reduce sodium hydrosulfide
consumption, the molybdenum flotation cells will be aerated by nitrogen gas, which will
be generated on site by a nitrogen generator.

The final cleaner flotation concentrate will be leached to reduce copper content if copper
content is higher than 0.2%. The leached product will be dewatered in a molybdenum
concentrate dewatering facility.

17.3.9 CONCENTRATE DEWATERING

The upgraded copper-gold concentrate will be thickened in a 15-m diameter high rate
thickener. The thickener underflow will be directed to the copper-gold concentrate
pressure filter to further reduce water content to 9% moisture. The copper-gold
concentrate will be stockpiled on site and then transported by trucks to a port site at
Stewart where the concentrate will be stored and loaded into ships for ocean transport to
overseas smelters.

The average copper concentrate produced is estimated to be approximately 940 t/d or

344,000 t/a.

The molybdenum concentrate will be dewatered using a similar process to the copper-
gold concentrate. The filtered concentrate will be further dewatered by a dryer to 5%
moisture content, before being bagged and transported to processors. The key
equipment used in the dewatering processes will include:

 copper-gold concentrate dewatering:

 one 15 m diameter high rate thickener

 one 8 m diameter by 7 m high concentrate stock tank
 two 160-m2 pressure filters.
 molybdenum concentrate dewatering:

 one 2 m diameter high rate thickener

 one molybdenum concentrate leaching system
 one 4-m2 pressure filter
 one 2.5 t/h dryer.

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17.3.10 GOLD RECOVERY FROM GOLD-BEARING PYRITE PRODUCTS
GOLD-BEARING PYRITE FLOTATION
The tailing of the copper-gold/molybdenum rougher flotation circuits will be further
floated in a pyrite flotation circuit. The pyrite rougher flotation will consist of two parallel
lines, each line with six, 300 m3 pyrite rougher flotation cells.

Tailing from the pyrite rougher flotation will gravity flow, or be pumped to the TMF located
southeast of the main process plant.

GOLD-BEARING PYRITE CONCENTRATE REGRINDING

The pyrite concentrate will be reground to a particle size of 80% passing approximately
20 µm in three 2,240 kW tower mills. A hydrocyclone cluster consisting of twenty-six
250-mm diameter hydrocyclones will be incorporated with the mills in closed circuit. The
hydrocyclone overflow will report to the gold leach circuit or the copper-pyrite separation
circuit.

Depending on copper content, the reground materials may be subjected to a flotation

process to separate copper minerals from the other minerals. The copper concentrate
will be sent to the copper-gold/molybdenum cleaner flotation circuit while the flotation
tailing will report to the gold leach circuit.

GOLD LEACH
The reground gold-bearing pyrite product and the first cleaner scavenger tailing from the
copper-gold/molybdenum bulk flotation circuit will be separately thickened to a solids
density of 65% in two 35 m-diameter high rate thickeners.

The underflow of each thickener will be pumped to two separate cyanide leaching lines.
Each line will consist of two pre-treatment tanks and five cyanide leaching tanks. In the
pre-treatment tanks, the thickener underflow will be diluted with barren solution to
approximately 45% w/w and aerated. Lime will be added to increase the slurry pH to
approximately 11.

The pre-treated slurry will be leached by sodium cyanide to recover gold in a conventional
CIL circuit. The leach circuit will consist of five agitated tanks, which are 15 m diameter
by 15 m high. The tanks will be equipped with in-tank carbon transferring pumps and
screens to advance the loaded carbon to the preceding leach tank.

The loaded carbon leaving the first CIL tanks of the two leaching lines will be transferred
to the carbon stripping circuit while the leach residue will be blended and sent to
subsequent processes including residue washing, cyanide recovery, and cyanide
destruction circuits.

The key equipment in the leach circuit will include:

 two 35 m high rate thickeners

 four 9 m diameter by 10 m high aeration tanks

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  ten 15 m diameter by 15 m high CIL leach tanks equipped with in-tank carbon
transferring pumps and screens
 one 3 m wide by 4 m long carbon safety screen.
Compressed air will be provided for the leaching process from four dedicated oil-free air
compressors.

CARBON STRIPPING AND REACTIVATION

The loaded carbon will be treated by acid washing and the Zadra pressure stripping
process for gold desorption.

The loaded carbon will be acid washed prior to being transferred to two elution vessels.
The stripping process will include the circulation of the barren solution through a heat
recovery heat exchanger and a solution heater. The heated solution will then flow up
through the bed of the loaded carbon and overflow near the top of the stripping vessels.
The pregnant solution will flow through a back pressure control valve and then be cooled
by exchanging heat with the barren solution prior to reporting to the pregnant solution
holding tank for subsequent gold recovery by electrowinning. The barren solution from
the electrowinning circuit will then return to the barren solution tank for recycling.

The stripping process will include barren and pregnant solution tanks, two 3-t acid wash
vessels, two 3-t stripping vessels, four heat exchangers, and two solution heaters and
associated pumps.

Prior to reactivation, the stripped carbon will be screened and dewatered. The
reactivation will be carried out in an electrically heated rotary kiln at a temperature of
700°C. The activated carbon will be circulated back into the CIL circuit after abrasion
treatment and screen washing.

The carbon reactivation process will include one reactivation kiln, one carbon quench
tank, and a carbon abrasion tank equipped with an attrition agitator, reactivated carbon
sizing screen, carbon storage bin, and fine carbon handling associated equipment.

GOLD ELECTROWINNING AND REFINING

The pregnant solution from the elution system will be pumped from the pregnant solution
stock tank through electrowinning cells where the gold and silver will be deposited on
stainless steel cathodes. The depleted solution will be subsequently reheated and
returned to the stripping vessel. The electrowinning circuit will have a capacity to process
80 kg/d of gold-silver doré bullion and will include two, 3.5 m3 electrowinning cells, direct
current rectifiers, cathodes, anodes, and a pressure filter.

Periodically, the stainless steel cathodes will need to be cleaned to remove precious
metal values by pressure washing. The cell mud will fall into the bottom of the
electrowinning cells and pumped through a pressure filter for dewatering on a batch
basis. The filter cake will be transferred to the gold room for drying and smelting after it
is mixed with melting flux. A 125-kW induction furnace will be used for gold-silver
refining. The area will be monitored by a security surveillance system.

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17.3.11 TREATMENT OF LEACH RESIDUES
LEACH RESIDUE WASHING
The residues from the CIL circuit will be pumped to a two-stage conventional CCD
washing circuit. The CCD circuit will consist of two 40 m diameter high-rate thickeners.
The thickener overflow from the first stage washing will be pumped to the cyanide
recovery system. The underflow (washed residues) of the second thickener will be sent
to the cyanide destruction circuit prior to being pumped to the TMF.

CYANIDE RECOVERY
The overflow of the first leach residues washing thickener will be sent to a cyanide
recovery circuit where the copper will be removed and the cyanide will be recovered from
the solution by a SART/AVR process.

The SART/AVR cyanide recovery process will be carried out in a negative pressure system
generated by a vacuum system.

The CCD overflow will be acidified by sulphuric acid. Sodium hydrosulfide will be added
to precipitate the heavy metals in the solution, especially the copper. The precipitates
will be blended with the copper-gold concentrate for sale. The solution will then be
pumped to two volatilization towers in series. The solution together with pressurized air
will be sprayed in the towers to provide a high liquid surface area to promote
volatilization.

The gas phase will be directed through an absorption tank, in which a caustic solution is
circulated counter-current to the gas to absorb hydrogen cyanide. The regenerated
cyanide solution will be returned to the leach circuit.

The cyanide-depleted solution from the volatilization tower will be settled in a 10 m

diameter clarifier. The metal species will precipitate in the clarifier while the clarified
solution will be circulated to the leach residues washing circuit and the leach circuit after
the solution is treated with lime to a pH above 9.5. The precipitates will be blended with
the copper-gold concentrate for sale.

CYANIDE DESTRUCTION
The remaining cyanide in the washed leach residues from the second washing thickener
will be decomposed by a sulphur dioxide (SO2)/air oxidation cyanide destruction process.
Sodium metabisulphite will be used as the sulphur dioxide source. The equipment used
will include one 6 m diameter by 6 m high pre-aeration agitation tank, three 11 m
diameter by 12 m high sulphur dioxide oxidation tanks, and a wet alkaline scrubbing
system. Compressed air will be provided for the oxidation process. The treated residues
will be sent to copper removal treatment circuit.

COPPER REMOVAL
A copper removal circuit is proposed to removal the dissolved copper from the treated
residues if the copper level from the sulphur dioxide-air cyanide destruction circuit is
higher than the requirement. Activated carbon will be added into the residue slurry after

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 the slurry is treated by the cyanide destruction. The copper removal treatment will be
carried in two stages in two reactors. The loaded carbon will be removed from the first
stage of the copper removal reactor while the fresh carbon will be added into the section
stage of the copper removal reactor. The copper loaded carbon will be stripped by acid
washing and the copper in the washing solution will be precipitated by sodium sulphide.
The precipitate produced will be blended with the copper-gold concentrate for sale. The
treated residues will be sent to the lined CIL residue storage pond in the TMF.

17.3.12 TAILING MANAGEMENT

The flotation tailing and the treated CIL residues will separately gravity flow or be pumped
to the TMF located southeast of the main process plant. The flotation tailing and CIL
residue will be stored in separate areas within the TMF.

The CIL residue will be deposited in a lined CIL residue storage pond. The residue will be
covered with the supernatant to prevent sulphide minerals oxidation. The residue will be
eventually covered by the flotation tailing . The supernatant from the CIL residue pond
will be reclaimed by pumping to the CIL circuit for reuse. The excess water will be sent to
a hydrogen peroxide (H2O2) water treatment plant to further to remove impurities before
it is sent to the north or south tailing ponds.

There will be two flotation tailing pipelines directing the flotation tailing to the TMF. The
flotation tailing from one of the tailing pipelines will be classified to produce coarse tailing
sands by two stages of hydrocyclone classification. The coarse fraction will be used to
construct the tailing dam and the fines will directly report to the TMF together with the
tailing from the other line. The supernatant from the tailing impoundment area will be
reclaimed by a reclaim water barge to the process water tank by two stages of pumping.
The water will be used as process water for flotation circuits.

One energy recovery system will be installed on one of the rougher flotation tailing lines,
which will deliver the tailing to the north dam, to generate electrical energy.

A separate barge equipped with reclaim water pumps will be installed in the flotation
tailing storage pond to reclaim the water for the tailing classification operations (to
provide dilution water for hydrocycloning) and for the excess water discharge via the
Treaty Creek diffuser. Discharge will occur during a five month window beginning during
spring runoff when the creek flows are highest. A floating skimmer will be installed. If
required, flocculant will be added from the floating skimmer to improve the settlement of
any suspended solids before the excess water is discharged.

17.3.13 REAGENTS HANDLING

The reagents used in the process will include:

 Flotation: PAX, 3418A, A208, fuel oil, MIBC, lime (CaO), NaHS, and sodium
silicate (Na2SiO3)
 CIL and Gold Recovery: lime, sodium cyanide (NaCN), activated carbon, sodium
hydroxide (NaOH), hydrochloric acid (HCl)

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  Cyanide Recovery and Destruction Reagents: metabisulphite (MBS), copper
sulphate (CuSO4), sulphuric acid (H2SO4), lime, NaOH, activated carbon
 Others: flocculant, antiscalant, H2O2.
All the reagents will be prepared in a separate reagent preparation and storage facility in
a containment area. The reagent storage tanks will be equipped with level indicators and
instrumentation to ensure that spills do not occur during operation. Appropriate
ventilation and fire and safety protection will be provided at the facility.

The liquid reagents (including fuel oil, A208, 3418A, MIBC, HCl, H2SO4, H2O2 and
antiscalant) will be added in the undiluted form to various process circuits via individual
metering pumps.

All the solid type reagents (including PAX, NaHS, Na2SiO3 if required, NaOH, NaCN,
CuSO4, and MBS) will be mixed with fresh water to 10 to 25% solution strength in the
respective mixing tank, and stored in separate holding tanks before being added to
various addition points by metering pumps.

Lime will be slaked, diluted into 15% solid milk of lime, and then distributed to various
addition points through a closed pressure loop.

Flocculent will be dissolved, diluted to less than 0.5% strength, and then added to
various thickener feed wells by metering pumps.

17.3.14 WATER SUPPLY

Three separate water supply systems will be provided to support the operation; a fresh
water system, a process water system for grinding/flotation circuits and a process water
system for CIL/gold recovery circuits.

FRESH WATER SUPPLY SYSTEM

Fresh and potable water will be supplied to two 12 m diameter by 9 m high storage tanks
from nearby wells and local drainage runoff areas. One tank will be located at the plant
site and the other at mine site. Fresh water will be used primarily for the following:

 fire water for emergency use

 cooling water for mill motors and mill lubrication systems
 potable water supply
 reagent preparation.
By design, the fresh water tanks will be full at all times and will provide at least 2 h of
firewater in an emergency. The minimum fresh water requirement for process mill
cooling and reagent preparation is, on average, estimated to be approximately 250 m3/h.

The potable water from the fresh water source will be treated (chlorination and filtration)
and stored in a covered tank prior to delivery to various service points.

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 PROCESS WATER SUPPLY SYSTEM
Two process water systems will supply the process water for the process plant. The water
for each circuit will be from different sources, as follows:

 Water for Grinding/Flotation Circuits: reclaimed water from the flotation tailing
pond, copper-gold/molybdenum concentrate thickener overflow and the CIL
feed thickener overflow, as well as fresh water. The dominant process water will
be the supernatant fluid from the flotation tailing impoundment area.
 Water for CIL Leaching/Gold Recovery Circuits: reclaimed water from the CIL
storage pond, barren solution and fresh water. As required, the water reclaimed
from the flotation tailing pond may also be used in these circuits.
The water reclaimed from the flotation tailing impoundment area will be sent to a 25 m
diameter by 15 m high process water surge tank by two stages of pumping systems,
while the bulk concentrate thickener overflow will be directed to the primary grinding
circuits. The process water tank will be located approximately 25 m higher than the
process plant base elevation. The water will flow to the various service points by gravity.
A booster pump station is provided at the plant site to pump water to the various
distribution points where high pressure water is required.

The water from the CIL residue storage pond will be pumped to an 8 m diameter by 8 m
high process water surge tank located at the plant site. The water will service for the CIL
leach/gold recovery circuits. Any excessive water from the CIL residue storage pond will
be treated at the H2O2 WTP located at the plant site. The treated water will be sent to the
north or south tailing ponds.

The overall site water management is detailed in Section 18.1.

17.3.15 AIR SUPPLY

Plant air service systems will supply air to the following areas:

 flotation circuits – low pressure air for flotation cells by air blowers
 leach circuits – high pressure air by dedicated air compressors
 cyanide recovery and destruction circuits – high pressure air by dedicated air
compressors
 filtration circuit – high pressure air for filter pressing and drying of concentrate
by dedicated air compressors
 crushing circuit – high pressure air for the dust suppression (fogging) system
and other services by an air compressor
 plant service air – high pressure air for various services by two dedicated air
compressors
 instrumentation – instrument air at mine site and plant site will come from the
plant air compressors and will be dried and stored in a dedicated air receiver.

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17.3.16 ASSAY AND METALLURGICAL LABORATORY
The assay laboratory will be equipped with necessary analytical instruments to provide
routine assays for the mine, process, and environmental departments.

The metallurgical laboratory, with laboratory equipment and instruments, will undertake
all necessary test work to monitor metallurgical performance and to improve the plant
production and metallurgical results.

17.3.17 PROCESS CONTROL AND INSTRUMENTATION

The plant control system will consist of a Distributed Control System (DCS) with PC-based
Operator Interface Stations (OIS) located in the following three control rooms:

 Mitchell site primary crusher control room

 MTT train transport control room
 Treaty plant site control room.
The plant control rooms will be staffed by trained personnel 24 h/d.

A crushing control room at the Sulphurets pit will be added in Year 2. The Sulphurets pit
crushing control room will be relocated to the Kerr pit crushing plant in Year 20.

In addition to the plant control system, a closed-circuit television (CCTV) system will be
installed at various locations throughout the plant including the crushing facility, the
stockpile conveyor discharge point, the slurry pumping tunnel, the tailing facility, the
concentrate handling building, and the gold recovery facilities. The cameras will be
monitored from local control room and central control room.

An automated train dispatching system will be utilized to achieve a safe and efficient flow
of trains through the system, with no on-board operators. The system employing full
radio-based train spacing and speed supervision on the whole railway system will be
supervised from a control room located in the train maintenance shop. The train control
system will operate using a wireless communications system (Wi-Fi) that must be in place
for the entire track. While wireless communications are the current state of the art
technology for train control communications, it is recognized that more efficient and
reliable communications may be developed in the future.

Process control will be enhanced with the installation of an automatic sampling system.
The system will collect samples from various streams for on-line analysis and the daily
metallurgical balance.

For the protection of operating staff, cyanide monitoring/alarm systems will be installed
at the cyanide leaching area as well as the cyanide recovery area and destruction areas.
An sulphur dioxide monitor/alarm system will monitor the cyanide destruction area as
well.

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17.4 YEARLY PRODUCTION PROJECTION
In general, the Project is designed to use conventional flowsheet and mature
technologies for the process plant. The flowsheet proposed is relatively simple and
mining will start with conventional open pit operation with an exposed ore body on the
surface. The Project plans to use HPGRs for comminution circuit which is expected to
have fewer potential rock hardness issues. Cerro Verde mine used a similar
comminution and flotation plant initially for its approximately 120,000 t/d plant, that has
since been sucessfully expanded to 360,000 t/d. They leveraged experience from the
existing operation and ramped up to approximately 95% of the name plate rate in
approximately 6 months. Also notable is that larger cone crushers and HPGRs greater
than those which KSM will employ have been in operation.

It is estimated that the plant may take approximately twelve months to reach design
capacity after the plant is wet commissioned.

According to the metallurgical projections described in Section 13.2 and the current mine
schedule, metal recovery and concentrate grades for the Project are projected on a yearly
basis, as indicated in Table 17.2. For more accurate metallurgical performance
projections, further test work is recommended, especially locked cycle flotation tests and
cyanidation tests on various ore composite samples from the Sulphurets, Kerr, and Iron
Cap deposits.

As shown by the test results, it is anticipated that on average the impurity contents in the
copper concentrates would be below the penalty limits as outlined for most of the
smelters, although in short periods the impurity content may slightly exceed the penalty
limits as outlined for some of the smelters. The projected copper concentrate quality is
shown in Table 17.3.

In general, the molybdenum concentrate separated from copper and molybdenum bulk
concentrate will be leached on site to remove copper, lead and other impurities. The
anticipated molybdenum content is approximately 50%. The main impurities such as
copper and lead are estimated to be lower than 0.2% and 0.3%, respectively.

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Table 17.2 Projected Metallurgical Performance

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 Table 17.3 Projected Copper Concentrate Quality
Content
Years 1 to 10 LOM
Element Unit Range Average Average
Cu % 23 – 28 25 25
Au g/t 28 – 109 61 43
Ag g/t 123 – 505 174 190
Mo % 0.03 – 0.21 0.15 0.10
ST % 28 – 41 34 34
S-2 % 26 - 36 32 32
Fe % 24 – 35 29 29
Sb ppm 199 – 1,966 993 1,008
As ppm 460 – 2,760 1,769 1,403
Co ppm 42 – 97 47 61
Cd ppm 33 - 172 88 92
Bi ppm 15 – 156 27 48
Hg ppm 1.2 – 10 2.8 3.6
Ni ppm 49 – 233 76 91
F ppm 75 - 399 241 193
Cl % 0.01 – 0.02 0.01 0.01
Se ppm 62 – 148 74 95
P ppm 67 – 536 156 194
Pb % 0.1 – 1.0 0.5 0.4
Zn % 0.2 – 0.9 0.4 0.5
SiO2 % 2.3 – 11 6.4 5.7
CaO % 0.2 – 0.8 0.5 0.5
Al2O3 % 0.5 – 3.9 2.1 1.7
MgO % 0.1 – 0.5 0.3 0.3
MnO % 0.01 – 0.04 0.01 0.02
InSol % 3.1 – 12 - -

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18.0 PROJECT INFRASTRUCTURE

18.1 SITE LAYOUT

There will be two separate areas of infrastructure associated with the Project: the Mine
Site and the PTMA. The Mine Site is the center of mining activity and includes the
primary crushing facilities (Mitchell OPC). Process facilities will be located at the Treaty
OPC in the PTMA, approximately 23 km northeast of the Mine Site. Twinned tunnels (the
MTT) will extend from the north side of the Mine Site into the upper reaches of the Treaty
OPC. Along the MTT route there is a topographical low (valley) that is designated the
Saddle Area, approximately 17 km from the Mitchell portal, where the MTT will be
accessed via a construction adit.

MINE SITE LAYOUT

The Mine Site layout at the end of construction is shown in Figure 18.1. Individual
facilities will be situated to take advantage of the natural topography in order to minimize
impact on the environment. The MTT will be constructed to connect the Mine Site and
the PTMA (see Section 18.4 for MTT details). Crushed ore for processing will be
transported via the ore train system from the Mine Site to a stockpile at the Treaty OPC.

At the Mitchell pit, the crushed ore from two gyratory crushers will be conveyed to two ore
surge bins located underground and adjacent to the MTT. The crushed ore will be loaded
into ore train cars by two automatic train loading systems.

The Mine Site area will include additional infrastructure such as the initial staging,
construction, and operations camps; truck/maintenance shop; explosive facilities; WSD;
diversion tunnels; and power plants. Access and haul roads will be provided to all of
these areas.

The WSF provides environmental containment of runoff water for the Mine Site. To
achieve this, the WSF includes a rock fill-asphalt core WSD to collect contact water from
the Mine Site for treatment at the HDS WTP.

The HDS WTP, Selenium WTP and the Energy Recovery Power Plant will be situated in the
lower Mine Site area. The Energy Recovery Power Plant will use water pumped from the
WSF to its crest that flows downhill from the WSF to the HDS WTP to generate electric
power.

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 The HDS WTP will treat:

 open pit mine drainage from the Mitchell, Kerr, and Sulphurets pits
 water collected from pit slope vertical wells and horizontal drains
 MTT drainage
 surface drainage waters from the WSD and RSFs.

The Selenium WTP will collect and treat:

 seepage from the Mitchell and McTagg Waste Rock Piles

 Kerr waste pile placed within the Sulphurets pit
 water from with the WSF.

PROCESSING AND TAILING MANAGEMENT AREA LAYOUT

The PTMA includes process facilities, TMF, a construction and operations
accommodation complex; administration, maintenance and support facilities; and related
ancillary buildings. The Treaty OPC area is shown in Figure 18.2 and the TMF area is
shown in Figure 18.3.

The Treaty OPC will be slightly terraced, and the site roads will be constructed from the
Process Plant to the MTT Treaty portal exit elevation and to the TMF. All terracing
quantities have been based on geotechnical information collected for the Treaty OPC.

The main process facilities at the Treaty OPC include:

 a COS with a live capacity of 60,000 t

 secondary crushing by cone crushers
 a fine ore stockpile with a live capacity of 30,000 t
 tertiary crushing by HPGR
 a primary grinding and flotation facility, including concentrate regrinding and
dewatering
 a gold CIL cyanide leaching facility, including gold recovery from loaded carbon
 cyanide recovery and cyanide destruction of washed CIL residue prior to
disposal of the residue in the lined pond within the TMF
 a concentrate storage and loadout facility
 tailing delivery system
 process related service facilities, including assay and metallurgical laboratory,
water services, power supply.

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 The TMF is located in a valley comprising the upper catchments of North Treaty and
South Teigen creeks, southeast of, and adjacent to the Treaty OPC. The TMF catchment
will provide an initial start-up water volume for two months of mill water make-up stored
behind the starter dams before mill start up. It will also provide a minimum water depth
for floating of reclaim barges and achieve adequate water clarification for process
purposes.

TMF structures at start up include three starter dams defining the North Flotation Tailing
Cell and the CIL Residue Tailing Cell. Perimeter diversions are provided to dewater the
area for construction and to reduce inflows during operation. By Year 25, the South
Flotation Tailing Cell is required and this is formed by adding the Southeast Dam and the
East Catchment Diversion Tunnel.

Two tailing energy recovery plants will be located at separate locations straddling the
North Dam tailing line between the Process Plant and the TMF. Each energy recovery
plant will consist of one slurry pump running in reverse as a turbine, with an induction
generator to supply power back into the local plant electrical distribution system.

Major avalanche run-out hazards have not been observed in the PTMA. Process water
supply will be reclaimed water from the TMF and fresh water will be provided from wells.

Construction laydown areas, offices, lunchrooms, a concrete batch plant, and material
sorting areas have also been designated, and these areas will be cleared and levelled in
conjunction with the Treaty OPC terracing.

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Figure 18.1 Mine Site Layout after Initial Construction

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Figure 18.2 Treaty Ore Preparation Complex Layout

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Figure 18.3 Ultimate TMF Layout

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18.2 TAILING, MINE ROCK, AND WATER MANAGEMENT
INTRODUCTION
This section addresses 2016 updates to the geotechnical designs for tailing and mine
rock management, as well as for site-wide water management. The 2016 design
updates incorporate incremental improvements and changes to water management
structures in the Mine Site and TMF areas, in response to commitments made during the
EA process review.

Design changes to the TMF include:

 addition of a discharge pipeline system and a diffuser located in Treaty Creek to

route operational-period discharges to Treaty Creek
 addition of the North Cell Closure Spillway
 addition of three energy dissipation dams to facilitate road crossings and to
contain potential debris flows at significant stream crossings along the South
Diversion Channel (this channel follows the TCAR to the Treaty OPC)
 relocation of the TMF seepage collection dams downstream to more effectively
intercept seepage.

Design changes to Mine Site facilities include:

 relocation of MDT Inlets upstream to improve diverted water quality, and

improved inlet design
 a shift of the WSF CDT outlet 200 m upstream to avoid an avalanche area, and
design of a closure gate and permanent tunnel plug for the WSF CDT
 modification of discharge from the WSF to use pumped discharge in lieu of
discharge pipes passing under the WSD
 expansion of the water treatment plant to a maximum capacity of 7.5 m3/s
treatment capacity once the HDS WTP is fully built
 improved water treatment discharge strategy designed to mimic natural flows
within the Sulphurets drainage basin
 addition of a Selenium WTP
 placement of the Kerr waste rock in the Sulphurets Pit
 expanding the contact water management systems to handle a 200-year flood
 the inclusion of the MVDT
 design updates for the Sludge Storage Facility and Water Treatment Sludge
Storage Building.

KCB re-assessed additional site climate and hydrology data recorded through 2015.
These analyses determined similar values to those adopted for the 2012 PFS

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 (KCB 2012, KCB 2013a, Tetra Tech 2012) for an average year. As a result, the water
management design basis remains unchanged from 2012.

Figure 18.1 and Figure 18.3 show the layouts for the updated Mine Site facilities and the
updated TMF facilities, respectively.

Details of TMF, RSF, and SWM prefeasibility design updates for the Project are provided
in the following 2016 KCB reports located in Appendix H:

 Mine Area Water Management Addendum Report

 Tailing Management Facility Design Addendum Report
 Rock Storage Facility Addendum Report
 Tunnels and Temporary Water Treatment Addendum Report.

MINE SITE CHARACTERIZATION

No additional geotechnical site investigations have been completed for the WSD or RSF
areas since the 2012 PFS (Tetra Tech 2012). The 2012 PFS provides a results summary
of KCB Mine Site geotechnical site investigations completed up to 2012 (KCB 2009;
2010; 2011; and 2012).

In 2015, Seabridge completed a regional geological mapping update that resulted in a

revised Mine Site geology map, presented in Figure 18.4. The mapping program provided
additional information on the distribution of NPAG monzonite available within the
Sulphurets pit area. Acid-resistant monzonite rock stripped from this area for
development of Sulphurets pit will be used for upstream rock fill in the WSD. Local fill
from the excavation of the WSD spillway and road and diversion cuts adjacent to the dam
will be used for downstream rock fill.

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 Figure 18.4 Mine Site Mapped Geology

MINE SITE CLIMATE

Much of the Project site annual precipitation occurs as snowfall between October and
May, while peak rainfall is associated with storms coming in from the Pacific between
August and October. Major elevation variations and numerous glaciers help create
diverse climatic conditions across the site.

The Project area is subdivided into two climatic regions: the western region in the
Sulphurets watershed (Mine Site) and the eastern region in the Treaty-Teigen watersheds
(PTMA). The two regions are 23 km apart and have differing climates. The two areas are
separated by the Johnstone Icefield (ranging from 1,800 to 2,200 m in elevation).

Significant orographic and rain shadow effects were recorded in the KSM area as part of
the 2012 baseline study. In 2012, KCB and ERM performed extensive analysis of
climate variations in the Project area for engineering design and EA purposes (Rescan
2013). Algorithms were developed based on the UBC watershed model to estimate
effects of variation in precipitation with altitude, and to adjust glacier and snow melt
rates in response to climatic variations.

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 In 2016, metrological and hydrological data collected since 2012 was reviewed
(Appendix H). The result is that no significant trends have been observed in the
additional data for average site parameters, as compared to the data prior to 2012. It is
concluded that no adjustments are required in design assumptions and that the 2012
PFS climate assessment is still valid.

Mine Site Temperature

Weather data recorded at the Sulphurets weather station between 2007 and 2015
indicate the following:

 mean annual temperature is approximately 0°C

 mean monthly temperatures range from -13°C in December to 14°C in July
 temperature extremes range from -31°C to 30°C
 mean daily temperatures are above freezing from May to October and below
freezing from October to May.

Canadian Metrological Service data indicates that frost penetration for the area is
typically 1.5 m.

Mine Site Precipitation and Hydrology

The estimated mean annual precipitation is 1,652 mm at Sulphurets weather station
(elevation of 880 masl). Annual lake evaporation is estimated at 400 mm. Runoff at the
Mine Site is influenced by the effects of both seasonal snowmelt and glacial melt.
Mitchell and McTagg glaciers are losing significant ice mass on an annual basis. Runoff
from glacier-influenced catchments is therefore larger than the annual precipitation over
these catchments. Effects of glacial meltwaters are included in the analysis of flows and
extreme events. Monthly precipitation, evaporation, and runoff distribution for the Mine
Site, as well as the runoff distributions for the glacier catchments, is provided in Table
18.1.

Precipitation listed in Table 18.1 is representative of the Sulphurets weather station at

880 masl and is derived from site data between 2008 and 2011. Additional site data
recorded since 2012 has not changed the values adopted for design. Assessment of
tipping bucket rain gauge data indicates that precipitation increases at higher elevations
within the Mine Site at a nominal rate of +5% per 100 m.

The 2012 KCB design reports present detailed analyses of climate and hydrology data for
the Mine Site and PTMA. These reports and present assessments of the additional
climate and hydrological data obtained since 2012 (Appendix H).

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Table 18.1 Climate Data for the Mine Site (Sulphurets Creek Climate Station)
Data Area Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Precipitation (mm) 1 215 50 50 66 99 83 115 149 264 297 132 132 1,652
Pond Evaporation (mm)2 0 0 0 0 86 93 99 80 43 0 0 0 400
Site Runoff Distribution (%) 0 0 1 1 4 14 35 17 17 7 3 1 100
Mitchell Glacier Runoff (mm) 37 37 73 73 110 404 1,248 917 514 183 37 37 3,670
McTagg Glacier Runoff (mm) 66 33 33 33 197 625 954 526 461 197 99 66 3,290
Notes: 1Weather station at 880 masl elevation.
2Estimated pond evaporation based on pan evaporation data.

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 MITCHELL GLACIER RECESSION
Seabridge has been monitoring the recession of site glaciers by analyzing historical air
photos, Light Detection and Ranging (LIDAR) data, ongoing global positioning system
(GPS) and remote sensing measurements of the glacier extents. Glaciers in the Project
area continue to recede; recession rates for the Mitchell Glacier toe area recession since
2008 have reached as much as 65 m/a and total recession has exceeded 2012
estimates. As a result, the Mitchell pit area is now ice free. The locations of the initial
stage proposed surface contact water inlets in the toe area of Mitchell Glacier are now
also free of ice.

TMF SITE CHARACTERIZATION

TMF SITE INVESTIGATIONS
No additional site investigations have been conducted at the TMF since the 2012 PFS
(Tetra Tech 2012).

The 2012 PFS summarizes site conditions at the TMF used for the basis of the TMF
designs. The 2012 PFS provides a results summary of TMF and Treaty OPC geotechnical
site investigations completed up to 2012 (KCB 2008, 2009, 2010, 2011 and 2012b).

TAILING CHARACTERIZATION AND LABORATORY TESTING

No additional tailing testing has been conducted for TMF design purposes since 2012.
The following section summarizes the test work completed to 2012 (KCB 2012c).

The Treaty Process Plant will produce two tailing streams: the bulk rougher flotation
tailing1 representing about 90% of the ore (by dry weight) and a fine, sulphide-rich
cleaner tailing comprising 10% of the ore. The sulphide stream will be cyanide leached
using the CIL method and then processed for gold recovery. A two-stage cyanide
destruction circuit is proposed, using the Inco sulphur dioxide process, followed by
hydrogen peroxide treatment2.

KCB conducted laboratory tests in 2009, 2010, and 2012 on samples of flotation tailing
and CIL tailing from pilot plant tests submitted to KCB by G&T.

During 2011/2012, KCB completed an additional program of tailing geotechnical testing,

with the primary objective of examining performance (i.e. strength and permeability) of
cyclone sand and dam drain materials at stress levels corresponding to ultimate dam
heights. Results of this testing program show that cyclone sand produced from the KSM
tailing is suitable for construction of the cyclone sand dams as designed.

1
Referred to as “Flotation Tailing” in this report.
2
This stream is referred to as “CIL Tailing” in this report.

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 Tailing and cyclone sand testing was performed on samples provided by a 2011 pilot
plant run by G&T. The tailing samples tested consisted of:

 flotation tailing: 80% passing 110 μm

 CIL residue tailing: 80% passing 20 μm
 cyclone sand: prepared by screening flotation tailing to reduce the fines content
to 17%; this sample was subjected to stress levels comparable to the base of
the dams and tested for permeability before and after these tests.

The flotation tailing is classified as NPAG and will be cycloned to produce sand fill for
construction of the tailing dams during the summer months. The fine cyclone overflow
tailing will be discharged along the upstream crest of the tailing dams. The entire
flotation tailing stream will be discharged along the dam crests during the winter months.

The CIL residue tailing is a high-sulphide concentration material and is classified as PAG.
This material will be deposited under water in the CIL Residue Storage Cell in the centre
of the TMF and kept saturated to mitigate against the onset of acid generation.

The 2011, the KCB laboratory testing program assessed samples of Bowser Group
Sedimentary rock found at the TMF site (lightly metamorphosed sandstones and
siltstones). This material is proposed to be quarried or borrowed from alluvial deposits
and processed for use as drain rock. Rock strength was found to be suitable for use
under the loads of the designed heights for the dams.

TMF AREA CLIMATE

Additional climate and hydrological data collected since 2012 was reviewed and the
conclusion is that no significant trends in average parameters are apparent. As a result,
the climate and hydrology parameters used for design of the TMF in 2012 have been
retained.

TMF Area Temperature

Weather data recorded at the TMF area from the Teigen Creek weather station between
2009 and 2011, with additional data now available through 2015, shows the following:

 mean annual temperature is approximately 0°C

 mean monthly temperatures range from -8°C from December to February, to
11°C in July
 temperature extremes range from -27°C to 29°C
 mean daily temperatures are above freezing from May to October and below
freezing from October to May.

TMF Area Precipitation and Hydrology

Based on correlations to longer-term weather data at the Snowbank Road station and
Eskay Creek Mine, as well as stream flow records in Teigen Creek, estimated mean

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 annual precipitation is 1,371 mm at the TMF (elevation 1,085 masl). The monthly
precipitation and runoff distribution is provided in Table 18.2. Precipitation increases at
higher elevations within the Teigen/Treaty valleys at a nominal rate of 5% per 100 m.

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Table 18.2 Climate Data for the TMF (Teigen Creek Climate Station)1
Data Area Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Precipitation (mm) 151 110 123 82 55 69 82 82 165 206 164 82 1,371
Pond Evaporation (mm)2 0 0 0 0 75 81 86 70 38 0 0 0 350
Site Runoff Distribution (%) 1 1 1 3 16 32 19 8 9 7 2 1 100
Note: 1Weather station at elevation 1,085 masl.
2Estimated pond evaporation based on pan evaporation data.

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 TMF AREA HYDROGEOLOGY
No additional hydrogeological testing or analysis has been conducted since the 2012
PFS (Tetra Tech 2012).

Details of the hydrogeology and groundwater modelling (i.e. FEFLOW® and Seep/W©
models) of the TMF area and the dams are reported in the 2012 TMF Engineering Design
report (KCB 2012c).

KSM PROJECT AREA SEISMICITY

A site-specific seismic hazard assessment was carried out in 2010 and updated with
data to 2012 to establish seismic ground motion parameters for the TMF and RSF sites
(KCB 2013a). The seismic hazard assessment was conducted in accordance with CDA
(2007and 2013) recommendations for seismic hazard assessment. No additional
analysis has been conducted since these assessments.

The PGAs listed in Table 18.3, derived from the seismic hazard assessment, are
recommended for both the TMF and RSF sites. The assessment identified that a 10,000-
year return period PGA of 0.14 g for the TMF site should be associated with an
earthquake magnitude of M7.0 in seismic deformation and liquefaction assessments.
For the TMF site, spectral accelerations corresponding to the 5% damped Uniform Hazard
Response Spectra (UHRS) are recommended from the assessment as listed in Table
18.4.

Table 18.3 Calculated Design PGAs for TMF and RSF Sites
Return Period PGA
(a) (g)
475 0.04
975 0.05
2,475 0.08
10,000 0.14
Note: g = gravitational constant

Table 18.4 10,000-year Return Period Spectral Accelerations for the TMF Site
Spectral
Acceleration
Period (5% Damped)
(s) (g)
PGA 0.14
0.1 0.28
0.2 0.32
0.5 0.27
1.0 0.20
2.0 0.10
3.0 0.07
4.0 0.05

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 DESIGN CRITERIA
RSF AND MINE SITE WATER MANAGEMENT STRUCTURE DESIGN CRITERIA
Design criteria adopted for the 2016 PFS design of the Mine Site facilities are largely
unchanged from the 2012 PFS (Tetra Tech 2012) and are summarized as follows:

 The LOM has been adjusted from 52.5 years to 53 years by revising the mine
plan.
 Over a 53-year LOM, the production of 3 Bt of mine rock from three open pits
will be stored in the Mitchell, McTagg and Sulphurets pit backfill RSFs.
 All RSFs will be placed bottom up.
 The criteria for dam safety and flood management in Table 18.5 are assessed
for the WSD and the WSF Seepage Dam based on the 2007 Dam Safety
Guidelines (CDA 2007). These are unchanged from the 2012 PFS (Tetra Tech
2012).

Table 18.5 WSD and WSF Seepage Dam Safety and Flood Management Criteria
Criteria WSD WSF Seepage Dam
CDA Consequence Very High Significant
Category
Seismic PGA of 0.14 g PGA of 0.14 g
(10,000-year event) (10,000-year event)
Diversions 200-year 24-h average daily flow 200-year 24-h average daily flow
Environmental 200-year return period wet year with Operating surge storage: equivalent to
Design Flood (EDF) diversions operational 14 days of WSF seepage and
and Storage catchment runoff assuming failure of
WTP system and 200-year 24-h flood
with snowmelt, with diversions
operational.
Inflow Design 2/3 between the 1,000-year and PMF 500-year 24-h flood with diversions
Flood (IDF) Routing events, with snowmelt, with diversions failed
failed *
Static Factor of Long term steady state: FOS >1.5 FOS >1.5
Safety (FOS) End of construction: FOS >1.3
Rapid drawdown: FOS >1.2
Pseudo-static FOS FOS >1.0 for a ground acceleration of FOS >1.0
50% of the PGA from the 10,000-year
seismic event
Post-earthquake FOS >1.2 FOS >1.2
FOS
Sediment Control Minimum water volume of 1 Mm3 Not applicable
Note: *WSD spillway designed to route PMF with diversions failed

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 The criteria shown in Table 18.6 have been used for the design of the RSFs, in
conjunction with the guidelines developed by the BC Waste Dump Research Committee
(1991-1995) and the Health, Safety, and Reclamation Code for Mines in BC.

Table 18.6 Geotechnical Stability Design Criteria for Key Areas of RSFs
Region of the RSF
Above the Areas of McTagg &
Mitchell Pit & Mitchell Valleys not above
Criteria Above the WSF Infrastructure WSF or Infrastructure
Construction Bottom-up Bottom-up Bottom-up
Static FOS FOS >1.4, considering FOS >1.3, short term and FOS >1.1 to 1.3
degradation of the mine >1.4 long term (construction period)
rock due to geochemical considering the lower Long Term >1.3
weathering strength clay layer in Toe stabilized by initial
some portions of the bottom up preload from
foundation platform construction prior
to placement
Rapid Drawdown FOS >1.25 Not applicable Not applicable
FOS (no reservoir) (no reservoir)
Pseudo-static FOS >1.0, for a ground FOS >1.0, for a ground FOS >1.0, for a ground
Seismic FOS acceleration of 50% of the acceleration of 50% of acceleration of 50% of the
PGA from the 10,000-year the PGA from the 500- PGA from the 500-year
seismic event year seismic event seismic event

TMF DESIGN CRITERIA

Basic design criteria adopted for the 2016 PFS design of the TMF are largely unchanged
since the 2012 PFS (Tetra Tech 2012) and are summarized as follows:

 Production schedule:

 The LOM is 53 years with a maximum milling rate of 130,000 t/d of ore
production, for a total of 2.2 Bt of tailing, which is the same total amount of
tailing as in 2012. The average dry tailing density in the ultimate
impoundment will be 1.5 t/m3. Although total ore milled will be 2.2 Bt, a
TMF capacity of 2.30 Bt was selected to provide contingency storage.
 Tailing production:

 Flotation tailing production will be 89.5% of ore production. Sufficient

sulphide flotation will be achieved in the mill process to achieve NPAG
behavior.
 CIL residue tailing production will be approximately 10% of ore production.
High-sulphide concentration results in PAG behavior. Design of the CIL
Residue Storage Cell allows for storage of 13% of ore production to provide
excess CIL storage in case of variations.
 Cyclone underflow sands for dam construction will have a fines content of less
than 17% and a minimum percolation rate of 5 x 10-6 m/s.

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 The criteria presented in Table 18.7 for tailing dam safety and flood management are
assessed based on the 2007 Dam Safety Guidelines (CDA 2007) and are unchanged for
2016, except for the addition of discharge capacity for the critical duration PMF.

Table 18.7 TMF Dam Safety and Flood Management

North Dam, Saddle Seepage Dams
Dam (Stage 1), Splitter Dam, (North, Saddle,
Criteria Southeast Dam Saddle Dam Southeast)
CDA Consequence Extreme Significant Significant
Category
Seismic PGA of 0.14 g PGA of 0.08 g PGA of 0.08 g
(1:10,000 year event) (1:2,475 year event) (1:2,475 year event)
Impoundment 200-year 24-h peak 200-year 24-h peak daily 200-year 24-h peak daily
Diversions daily flow, (and re-direct flow flow
up to 2 m3/s from the
East Catchment to
Teigen Creek for base
flow)
Environmental Capacity to discharge Seasonal surplus CIL Cell Operating surge storage:
Design Flood and Critical Duration PMF water will be reclaimed equivalent to 14 days of
Storage during operations via preferentially. tailing dam seepage
diffuser. Seasonal assuming failure of the
surplus flotation cell reclaim pumping system
water will be discharged and 200-year 24-h flood
directly into Treaty Creek with snowmelt with
or treated diversions working
IDF 30-day PMF with 30-day PMF with 500-year 24-h flood with
Routing 100-year snowmelt can 100-year snowmelt can diversions failed
be stored in the TMF be stored in the TMF
without discharge, with without discharge, with
diversions failed. diversions failed.
Capacity to route PMF in Capacity to route PMF in
Closure Spillway Closure Spillway
Static FOS FOS >1.5 FOS >1.5 FOS >1.5
Pseudo-static FOS FOS >1.0 FOS >1.0 FOS >1.0
Post-earthquake FOS >1.2 assuming all FOS >1.2 assuming all FOS >1.2
FOS non-compacted tailing non-compacted tailing are
are liquefied liquefied

The TMF reclaim ponds are designed to:

 provide one month of mill start-up water

 provide a minimum water depth for floating a reclaim barge and achieving water
clarification

 provide required water cover for the CIL residue tailing to prevent oxidation.

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 ROCK STORAGE FACILITIES
At the PFS level, there are three primary RSF design considerations:

 foundation conditions
 maximum lift height
 closure slope criteria.

Conservative RSF designs were developed in collaboration with MMTS to address the
aforementioned design considerations using existing data. MMTS designed the RSF
layouts, with geotechnical guidance on slope stability and geotechnical recommendations
from KCB.

The RSFs will be built in progressive lifts (bottom-up construction) to initially confine toe
areas and consolidate foundations to improve stability and reduce downslope risks.

To meet Project commitments during the Application/EIS (Rescan 2013), and since the
2012 PFS, a design has been advanced to collect seepage high in selenium from the
Mitchell and McTagg RSFs. Stability analyses were re-run with the Selenium Seepage
Collection System present and the RSFs meet the stability criteria. KCB provides details
on the design of the Selenium Seepage Collection System in Appendix H.

A rendering of the ultimate mine site layout, including the McTagg and Mitchell RSFs is
provided in Figure 16.13.

Prior to closure, final mine rock placement configurations are designed to have maximum
105 m terraces at “as dumped” angle of repose, with flat benches between terraces.
The overall resulting final slope angle at the end of operations will be 26° (2H:1V) to
facilitate final closure.

RSF Site Preparation

Site preparation for the RSFs will include removal of merchantable timber, stripping of
organic, weak, and soft soils where required, and proof-rolling where applicable. To
prevent blocking of voids in the drain rock, placement of a graded filter blanket may be
required where rock drains are constructed over regions of soft overburden (e.g., areas of
the Mitchell RSF within the Mine Site). Localized basal drains will be created in key
natural drainages of the RSF foundations and, in areas where drainage through the RSFs
is required, by end-dumping coarse competent rock such that self-segregation forms
permeable drain layers.

RSF Stability Analyses

RSF geotechnical stability during construction and closure was analyzed during 2012 and
2014, and again in 2016 with the addition of the Selenium Seepage Collection System.
A wide range of potential RSF configurations were analyzed.

With the inclusion of the Selenium Seepage Collection System, all target FOS have still
been met within the RSF.

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 RSF Safety and Monitoring
Mine staff will perform routine inspections of the RSF during construction, looking for
indications that would provide advanced warning of a potential RSF failure:

 readings of electric piezometers installed in foundation silt and clay layers

 readings of inclinometers installed in areas close to the Mitchell OPC facilities
and the area facing the water storage pond
 monitoring of surface survey monuments installed during RSF construction; the
use of automated radar or optical scanning instruments will be considered for
areas with higher downslope hazards.

MINE SITE WATER MANAGEMENT

The overall SWM Plan has not substantially changed since the 2012 PFS (Tetra Tech
2012); however, several changes have been made as a result of the Application/EIS
(Rescan 2013). These include moving the MDT Inlets upstream to areas of unaltered
geology so as to improve diverted water quality, and the provision of the MVDT to route
contact water around the Mitchell RSF.

Figure 18.5 illustrates ultimate water management structures as existing at the end of
mine life showing diversion tunnel routes and operational phase surface diversions.
Catchment boundaries are indicated with blue dashed lines.

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Figure 18.5 Mine Site Ultimate Water Management Facilities

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 After mining is complete, perimeter closure channels will be constructed at the top and
margins of the RSFs, and the channels widened for closure along the toes of the RSFs.
Operational phase channels are shown on Figure 18.5; the closure routings of fresh (non-
contact) water aren in blue and the routing of contact water is in green.

DIVERSION TUNNELS AND SURFACE DIVERSIONS

The MDT Inlets have been shifted approximately 500 m upstream to improve water
quality of the diverted water. As a result of the Mitchell Glacier Diversion Optimization
study (Appendix H), the noncontact inlets of the Mitchell tunnels were simplified. The
open pit phase non-contact water MDT was enlarged to allow a single tunnel to carry
design diversion flows. Upon commencement of underground mining, the open pit phase
tunnel is twinned with a second tunnel of the same dimensions to increase diversion
capacity. There have been no changes to the design of the MTDTs or the Mine Site
surface diversions since the 2012 PFS (Tetra Tech 2012).

CONTACT WATER COLLECTION SYSTEMS

There has been no change in the surface contact water collection systems since the
2012 PFS (Tetra Tech 2012).

To reduce water flow through the base of the Mitchell RSF and facilitate routing of
contact water around the Mitchell RSF, the MVDT was added after the 2012 PFS (Tetra
Tech 2012). This is a 5 km long, 5 m by 6 m tunnel that drains to the WSF. The tunnel
connects to the NPWDA, which is added in Year 5, to accept pit wall drainage and local
drainage of contact water from upstream of Mitchell pit and from the Snowfields area.

The 2016 PFS configuration for the Mitchell and McTagg RSFs includes a Selenium
Seepage Collection System that is designed to collect up to 500 L/s of seepage and
convey this flow to the Selenium WTP. Water from other sources will be treated when
seepage collected from the RSFs is less than 500 L/s. The collection and treatment of
seepage from these RSFs, and other high-selenium loading waters, will enable selective
removal of selenium from flows with higher selenium concentrations, compared to lower
concentrations within the WSF. The Selenium Seepage Collection System will be
constructed in Year 5.

The Selenium Seepage Collection System is composed of a 60 mL LLDPE liner placed on

a graded surface within the RSFs that drains to the western toe area at elevation 706 m.
The liner will be keyed into natural ground to facilitate collection of seepage from the
lateral areas of the RSF. Drainage of seepage from the RSF into the collection system is
facilitated by a drain layer composed of competent drain rock stripped from the
development of Sulphurets pit. The drain rock overlies a layer of moraine sands and
gravels that protects the liner beneath the drain from damage. The slope of the drain
directs seepage into a system of perforated pipes near the RSF toe, gathering flow for
pumping to the Selenium WTP. The Selenium WTP will discharge to the WSF to allow
further treatment for metals removal.

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 WATER STORAGE FACILITY
Seepage from the Mitchell RSF, McTagg RSF, and Sulphurets Pit Backfill RSF requiring
treatment for the removal of metals by the HDS process will be collected in the lower
Mine Site by the WSD. The WSD is an asphalt core rock fill dam that will create the WSF
pond, and will be large enough to handle seasonal freshet flows as well as volume
accumulated from a 200-year wet year.

Figure 18.6 shows monthly average water treatment rates for flows from the WSF as blue
bars plotted over the LOM. The installed ultimate HDS water treatment capacity of
7.5 m3/s is greater than the annual average or monthly peak flows to allow treatment
rate to vary seasonally with stream flow rates.

Figure 18.6 Mine Site Monthly Water Treatment Rate

The WSD design has been updated since the 2012 PFS (Tetra Tech 2012). Dam slopes
were revised after the 2012 PFS based on a value engineering study (KCB 2012b). The
internal zonation of the WSD was also updated (KCB 2012d). The revised slopes and
zonation of the dam are shown in section view in Figure 18.7.

The WSD will be located in the lower Mitchell Creek area and founded on competent
rock; unchanged from the 2012 PFS (Tetra Tech 2012). The WSD crest elevation is also
unchanged from the ultimate dam height in the 2012 PFS (Tetra Tech 2012) and will be
established at the full height of 716 masl (165 m height) before Year 1. An emergency

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 spillway designed to route the IDF will be cut into rock on the southeast side of the dam.
There will be appropriate freeboard for avalanche wave mitigation and flood routing.

Water in the WSF is predicted to be acidic, similar to existing seeps situated in upper
Mine Site. An asphalt core will be included in the dam to control seepage. Asphalt is
inert with respect to acidic water. To control seepage, the WSD and WSF Seepage Dam
foundations will be grouted. Based on drilling results, the depth of the WSD grout curtain
is designed to vary from 25 m at the west abutment to as deep as 150 m at the east
abutment if required. Grout hole spacing will be 2.5 m.

Fill for dam zones is specified such that critical zones of the dam (sections in contact with
the core) and drain zones will be constructed with materials that have low potential to
react with acidic water. This material will be sourced from stripping of Sulphurets pit.

The WSF discharge system has been modified to consist of submersible pumps mounted
in inclined carrier pipes on the southeast bank of the WSF pond. These pumps will
discharge to a head pond located above WSD crest elevation. A HDPE-lined steel
penstock will lead from the outlet of the head pond to the Energy Recovery Power Plant
and the HDS WTP situated below the WSD. The majority of the pumping energy will be
recovered at the WTP.

During the Application/EIS (Rescan 2013) review process, additional mitigations were
developed to minimize seepage from the WSD. These design enhancements are
included in the 2016 PFS. Changes include six seepage interception tunnels that lower
groundwater levels between the WSD and the WSF Seepage Dam to reduce the driving
force on seepage. The seepage collection tunnels will also facilitate foundation grouting
both during construction and for remedial grouting after completion of the WSD, if
required.

An asphalt-core seepage collection dam will be located downstream of the WSF. The
WSF Seepage Dam slopes were reviewed (KCB 2013a) and the revised dam section will
incorporate 2.25H:1V upstream slope and 1.75H:1V downstream slope, with a low-
permeability asphalt core and a grout curtain. Water collected in this dam will be sent to
the WTP via an HDPE pipeline. During construction, this HDPE pipeline will be used to
route runoff and sediment from the construction of the WSD and the WSD CDT to
temporary water treatment facilities at the HDS WTP site.

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Figure 18.7 Water Storage Dam Sections

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 The WSD CDT routes Mitchell Creek around the dam footprint during construction. In
2014, the diversion tunnel size was enlarged to 4.4 m by 5.0 m from the 4.3 m by 4.0 m
size included in the 2012 PFS. As a result, the tunnel is now sized to pass flows from a
50-year storm event. In 2016, to reduce exposure to avalanche hazards, the
downstream portal was moved upstream and the tunnel length was adjusted from
1,100 m to 900 m. Drawings of the shorter WSD CDT, and designs for an inlet
cofferdam, tunnel closure gate, and tunnel plug are included in Appendix H. Upon
completion of construction, the tunnel gate will be closed to allow construction of the
permanent tunnel plug.

HYDROELECTRIC POTENTIAL OF DIVERSIONS

Diverting Mitchell and McTagg creeks into tunnels creates an opportunity for
hydroelectric power generation. Generated power can be used during mine operations or
sold to the grid via the power lines through the MTT. During operations, the hydroelectric
plants will reduce the power requirements of the mine. Upon mine closure, the
hydroelectric plants will continue operating and will generate income and offset water
treatment costs.

The later stages of the MTDTs include hydroelectric generation that comes into operation
in Phase 2 (Year 10) with an installed capacity of 8.0 MW (Appendix I). In Phase 2 of the
RSF layouts the tunnels are raised to have inlets above the expansion of the McTagg
RSF; during Phase 3 (Year 15) the inlets are raised again once the RSF reaches its
ultimate extent.

Characteristics of hydroelectric plants installed on the diversions are similar to run-of-the-

river installations, in that they provide peak power during freshet flows.

WATER TREATMENT
TEMPORARY MINE AREA CONSTRUCTION PERIOD WATER TREATMENT
For the 2016 PFS, design of the temporary water treatment facilities has been revised to
enlarge the settling ponds to meet current guidelines for mine sediment control and
settling ponds. The locations of ponds and tunnel muck pads have also been revised to
meet adjustments in construction period tunnel portal activities as part of a tunneling
schedule review.

During the construction period, six TWTPs for TSS and metal removal will be provided in
the proposed mine area. Additional TWTPs will be located in the Saddle Area, and at the
Treaty portal of the MTT. The TWTPs are intended to deal with drainage from existing
mineralized zones, PAG cuts, tunnel portals, and runoff from PAG tunnel muck piles
during the period before the permanent WTP is in operation.

For areas of the site where only TSS treatment is identified as required (such as soil
borrow area and soil cuts), automated flocculent treatment systems and sediment ponds
will operate to control TSS generated during the construction period. These treatment
sites will be situated below earthworks and at sites identified as requiring only TSS
control.

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 PAG tunnel muck will be stored on lined pads located at the temporary water treatment
sites adjacent to the tunnel portals and the Mitchell OPC cuts. Where temporary pads
are located outside the WSF catchment, this material will be hauled to permanent
disposal sites within the WSF catchment once the diversion tunnels and the HDS WTP
are operational.

The WSF and WTP will be in operation during the six-month pre-production period to
capture sediment and runoff from mine area stripping and from fill placement during
Mitchell OPC and haul road construction.

A total of eight TWTPs will operate during the construction period to manage potential
metals, TSS, and ammonia in drainage from tunnel portals and from temporary
stockpiles of tunnel muck near the portals and other flows of contact water (Table 18.8).

Table 18.8 Temporary Water Treatment Plant Locations

TWTP Location
TWTP #1 WSD/HDS WTP Area
TWTP #2 MTDT Outlet
TWTP #3 MDT Outlet
TWTP #4 Saddle MTT Portal Tunnel
TWTP #5 MDT Inlet
TWTP #6 MTT – Mitchell Portals
TWTP #7 WSD CDT Inlet
TWTP #8 Treaty MTT Portals
Note: TWTP #9 from the previous 2012 design was deleted as the MTT construction adit is not present in
2016 designs. TWTP #10 is not required for the 2016 designs as there are no TMF diversion tunnels
required at start-up.

The TWTPs will include a grit pond, a reagent preparation system for lime and flocculent
addition, settling pond, an air sparging pond when required, and a system for pH control.
For additional details please see Appendix H8.

The purpose of the grit ponds is to remove particles larger than 0.1 mm from the water.
It is expected that any particles larger than 0.1 mm in diameter will settle in the grit
ponds. The grit ponds provide surge capacity with more than three hours of retention
time during a 1-in-10-year, 24-hour rain event combined with an adit surge (both with and
without sediment taken into consideration). The grit ponds will also have surge capacity
for an additional inflow of 50 L/s for two hours to allow for flow increases upon crossing
fractured zones.

Water decanted from the grit ponds will be pumped through the lime and flocculent
preparation units. Hydrated lime will be added to increase the pH to between 8.5 and
9.5 to precipitate dissolved metals. The hydrated lime preparation system will feed
through an inline mixer at a rate to be determined by the target pH requirement. The
hydrated lime also functions as a coagulant altering the electrical charge on suspended
particles to promote agglomeration and enhance flocculent performance. The hydrated
lime will be stored in typical 20 kg bags on pallets. It will be continuously mixed with

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 water to produce a 5% by weight solution of calcium hydroxide in the lime preparation
system. The flow rate of the influent will be measured between the grit pond and the
lime slurry injection point. The slurry will be prepared in a lime mixing holding tank. The
lime slurry addition will be injected into the pipe in front of the inline mixer at a rate
appropriate to meet set pH requirement.

A flocculent was chosen through bench scale testing of Mine Site sediment samples
suspended in Mitchell Creek water. Based on these initial tests, the flocculent
concentration required is approximately 0.1% by weight of BASF Magnafloc 351. The
bulk flocculent will be added manually into a hopper where an automated dual tank
flocculent preparation system will mix and dose the diluted solution into the water stream
using calibrated metering pumps.

After lime and flocculent addition, water will flow into the settling pond to further reduce
suspended solids. Particles will settle to the bottom as they move through the length of
the pond. Most of the water treatment reaction related to the removal of metals will
occur in the settling pond. This system will provide a hydraulic residence time of
approximately 75 hours.

An air sparger system will be installed in a separate pond located below the settling pond to
reduce ammonia concentrations in the water, when required, to around 10 mg/L.
If required, the pH will be adjusted to between 10.5 and 11 in the air sparger pond with
sodium hydroxide to volatilize the ammonia. A blower located adjacent to the container
and close to the air sparger manifold system will be used to generate the air required.

Alkaline water is required for both dissolved metal precipitation and ammonia removal.
However, the water must be neutralized before it can be discharged. After the air
sparging pond, the water will be pumped through a neutralization treatment step located
in a containerized unit. Sulphuric acid will be added through an inline mixer to adjust the
pH of the water to between 6.5 and 8.5. The maximum required acid flow rate is less
than 19 L/h (5.3 mL/s) at the nominal 50 L/s design flow rate.

HIGH-DENSITY SLUDGE WATER TREATMENT PLANT

The HDS WTP is designed to treat water that comes in contact with areas of disturbance
from mining operations and natural seeps in the area with a HDS lime. Data taken
between 2007 and 2011 combined with regional long-term records and water balance
calculations indicate that during the various stages of mine life, the HDS WTP will operate
with a variable flow rate designed to match the natural hydrograph in Sulphurets Creek.
Average annual variations in base case water treatment rates are shown in Figure 18.6;
this includes additional treatment flows associated with treating natural contact water
flows from upstream of the Mitchell pit.

Water will be collected in the WSF. Drainage from the Mitchell pit and Mitchell/McTagg
RSFs will be directed by gravity to the WSF and contact water from the Sulphurets and
Kerr pit areas will be routed to the WSF by gravity pipeline. The water from the WSF will
be pumped over the WSD to the HDS WTP. The HDS WTP is designed with variable
discharge rates in order to stage discharge to match the natural hydrograph, to ensure
sufficient dilution capacity to minimize any effects on the receiving environment.

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 The HDS WTP maximum throughput capacity will be 7.5 m3/s; however, the maximum
rate is only anticipated to be required for a three-month period in the summer. Water
pumped from the WSF will pass through hydroelectric generators installed at the Energy
Recovery Power Plant, immediately upstream of the HDS WTP.

The HDS WTP installed generation capacity will be 9 MW and the two installed turbines
will be capable of passing a flow of up to 7.5 m3/s. To obtain this treatment capacity in a
reliable and proven manner, initially five and ultimately seven circuits will be constructed
and operated in parallel. The WTP design also considers very low treatment rates (0.10
to 0.25 m3/s) in late fall, winter, and early spring.

The site selection for the HDS WTP is based on a +50-year mine life and post-closure
treatment for 200 years. The HDS WTP will be located at an elevation of 520 m on a flat
benched terrain above the flood plain near the confluence of Mitchell and Sulphurets
creeks. An access road armored on the downstream side, located below the HDS WTP
site, will perform as a levee for an additional level of flood protection from Sulphurets
Creek. A complete HDS design and cost estimate was completed by SGS Canada Inc. in
2011 (Appendix H5). In 2013, additional design work was undertaken by SGS and
Rescan to expand the components required to handle increased flow rates (Appendices
H6 and H7).

The WTP conceptual design includes three large lime silos with slakers, 14 lime reactors
for neutralization, three lime slurry stock tanks, three lime/sludge mix tanks, and
ultimately seven conventional 60-m clarifiers sized for treatment rate of 0.8 to 1.1 m3/s
each. The winter sludge storage will be used during construction when sludge transport
to the landfill or TMF is not available. The WTP discharge area will include a polishing
pond for final pH adjustment and to provide additional solids settling capacity or
retention, if required.

For discharge during low flows, one clarifier and a paired lime reactor will be adequate to
achieve the discharge volume. The plant is designed so that under typical conditions,
either individual paired lime reactors or a clarifier can be bypassed. The plant will be
equipped with four, 100-plate press filters to produce sludge as a firm dry filter cake with
a 50% moisture content with 25% solids clarifier under flow feed to the filter press.
Approximately 360 t/d of sludge will be produced based on an average water treatment
rate of 2 m3/s. At a maximum throughput rate of 7.5 m3/s, the total daily dry sludge load
will be 1,360 t. During construction the sludge will be stored in the Sludge Storage
Facility located near the WTP. In the winter the sludge will be stored in a shed that will be
located immediately upslope of the WTP (Appendix H8).

During operation, the sludge will be transported year-round by truck to the Mitchell OPC
and onto the ore trains within the MTT, where it will be transported with the ore to the
stockpile located at the Treaty OPC, fed through the Treaty Process Plant, and deposited
with the tailing in the TMF. At the maximum water treatment rate, the sludge will account
for approximately 1% of the 130,000 t/d ore feed. On an annual average basis, the
sludge will account for less than 0.3% of the ore feed.

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 The three principle reagents for the HDS WTP will be quick lime, dry flocculent, and
sulphuric acid for pH adjustment to 7.5. Table 18.9 provides an estimate of annual
reagent consumption based on an annual average of 71 Mm3 of water treated. The
predicted total annual volume of water will vary from 63 to 79 Mm3. After closure, the
predicted long-term volume of water for treatment will be 64 Mm3/a.

Table 18.9 Annual Reagent Consumption for the HDS WTP

Average Annual Total Annual
Water Treated Reagent
Reagent Feed Rate (Mm3/a) Consumption
Quick lime to pH 10.5 0.83 kg/m3 71 59,000 t
Magnafloc 10 3 g/m3 71 215 t
H2SO4 to pH 7.5 11 mL/m3 of 36.8N H2SO4 71 780,000 L

SELENIUM TREATMENT PLANT

BioteQ Environmental Technologies Inc. (BioteQ) demonstrated selenium removal of
spiked Mitchell Creek feed water during a pilot-scale ion exchange water treatment study
(Appendix H9; BioteQ 2015).

In previous studies, the Selen-IX™ Ion Exchange Circuit was optimized to select the best
resin based on selenium selectivity, resin capacity, and regeneration characteristics
(Appendix H10; BioteQ 2012). A preliminary design basis was developed for a 500 L/s
Selenium WTP to be located adjacent to the WSF near the toe of the Mitchell/McTagg
RSFs, to treat seepage from the Sulphurets Pit Backfill (Kerr waste rock), seepage from
the RSFs, and water pumped from the WSF. The pilot study demonstrated reduction of
selenium concentrations from 120 and 320 ppb feed water to less than 1 ppb (Appendix
H11; BioteQ 2015).

Due to expected high iron and TSS concentrations in seepage water, a ferric circuit was
designed as a standalone module serving as a pre-treatment step upstream of selenium
removal. The primary goal of pre-treatment in the ferric circuit is to remove constituents
that may interfere with ion exchange, included suspended solids, ferric iron, and selenite.
Additionally, lime addition reduces sulphate concentrations.

The Selen-IX™ Ion Exchange Circuit is designed to selectively remove selenate from the
feed water with a high efficiency in order to obtain the 1 ppb discharge limit, while
concentrating the selenium into a small volume of brine solution that is directed to the
eluate treatment circuit. Once the resin reaches a specified loading cycle duration, the
selenate captured by the resin bed will be stripped from the resin using a sodium
sulphate regenerant solution. The regenerant will be pumped from the recycled
regenerant tank through the IX columns and into the spent regenerant tank for further
downstream processing. The regenerated resin will then be available for further cycles of
selenate loading after a brief wash cycle.

The eluate treatment circuit removes selenium from the spent regenerant (or eluate)
solution produced by the ion exchange circuit with an electro-reduction process using iron

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 and fixes the selenium into an iron-selenium solid that is easily separated from solution.
The electro-reduction and precipitation of selenium out of solution takes places inside
electrocells equipped with iron anodes. The solution discharged from the eluate
treatment circuit is largely free of selenium and can be recycled back to the ion exchange
circuit for re-use in resin regeneration.

As the Selenium WTP is only designed to remove selenium, effluent from the Selenium
WTP will report to the WSF for further treatment at the HDS WTP, prior to discharge to the
receiving environment.

TAILING MANAGEMENT FACILITY DESIGN

The general layout of the TMF is shown in Figure 18.3. The TMF will be located in the
same location as in 2012; within a cross-valley between Teigen and Treaty creeks. Three
cells will be constructed: the North Cell and the South Cell will store flotation tailing, and
the CIL Residue Storage Cell (fully lined with a geomembrane) will contain PAG CIL
residue tailing. The layout, staging, and design of the main TMF dams has not changed
for the 2016 PFS. The locations of the seepage collection dams have been moved
downstream since the 2012 PFS (Tetra Tech) to facilitate seepage recovery. For the
2016 PFS, additional assessments were conducted on liner depressurization and
underliner drainage systems. Designs have been advanced for extending the
underdrains and associated dewatering pumping systems to mitigate liner uplift
potential. These now extend to the ultimate CIL basin perimeter.

Tailing dam design has not changed for the 2016 PFS. The cyclone sand dams will be
constructed on earthfill starter dams using the centerline construction method with
compacted cyclone sand shells and low-permeability glacial till cores. The till in the cores
of the North and Southeast dams will be amended with bentonite where necessary. The
Saddle and Splitter dam cores incorporate geomembranes to limit seepage from the CIL
residue tailing. The dams will be progressively raised over their operating life to an
ultimate elevation of 1,068 m.

Process water in the North and South flotation tailing cells and CIL Residue Storage Cell
will be reclaimed by floating pump barges and recycled to the plant. Non-contact runoff
from surrounding valley slopes will be routed around the TMF. Diversion channels are
sized to pass design flows and have large enough base widths for snow removal
machinery. Buried pipe sections are used in active snow avalanche paths.

Figure 18.8 illustrates the staging of the TMF. The North Cell will be filled first;
simultaneously, the CIL Residue Storage Cell will be operated. During operation of the
North Cell, floods will be routed south. A pipeline and surface channel will divert
environmental maintenance flows of up to 2 m3/s from the East Catchment around the
TMF into Teigen Creek. As the operation switches to the South Cell, the East Catchment
Tunnel will route east catchment flood flows away from the South Cell.

Seepage from the impoundment will be controlled with low-permeability zones in the
tailing dams and dam foundation treatment. Seepage and runoff from the tailing dams
will be collected downstream at seepage collection dams and pumped back to the TMF.

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 The ponds behind the collection dams will also be used to settle solids eroded by runoff
from the dam and fines from cyclone sand construction drain-down water.

Water balance calculations, based on site data taken between 2007 and 2011
combined with regional long-term records, indicate that the TMF will have an average
water surplus of 0.53 m3/s during North Cell operation, 0.82 m3/s during the transition
from North to South Cell, and 0.41 m3/s during South Cell operation. Additional site data
collected since 2011 does not suggest that significant variations in these estimates
would result from the additional data.

TAILING STAGING PLAN

Staging of the TMF has not changed in 2016. The layout of the TMF is shown on Figure
18.3; sequences of cell staging are shown in Figure 18.8. Tailing flows will be routed by
gravity in slurry pipelines from the plant to the North Cell. Energy will be recovered during
early years of operation of each cell from discharge of the tailing into the impoundment.
Tailing will be pumped to the CIL Residue and South Cell when required during later
stages of the Project.

Tailing flows will be retained by four cyclone sand tailing dams: the North Dam, Splitter
Dam, Saddle Dam, and Southeast Dam. During operation, elevations of annual dam
crest raises will be set to provide 12 months of tailing storage and to store the PMF with
1 m of freeboard.

The North Cell will be constructed first and will store flotation tailing production for 25
years; at that point, this cell will be closed and reclaimed over a five-year period. The CIL
Residue Cell will be constructed and operated in parallel with the North Cell, and will be
filled to about half its capacity with PAG CIL residue tailing. At Year 25, the South Cell
goes into operation, providing flotation tailing storage for the remaining mine life. At the
end of this period, the CIL Residue Cell will be filled to ultimate capacity. The South Cell
and CIL Residue Cell will then be closed and reclaimed over a five-year period.

Based on the mill ramp-up schedule, and the assumed density ranges possible at start
up, the starter dams can store between 18 and 24 months of tailing. The earth fill starter
dams at the North, Splitter and Saddle Dam sites will be constructed to store a minimum
of 8.4 Mm3 of water for mill start-up. The design operating PMF ranges from 42 Mm3 at
start-up to 91 Mm3 at the ultimate dam elevation. The dams will then be raised annually
by cycloning tailing sand. Cyclone sand raises will continue to 1068 masl. The beach will
be built up to separate the reclaim pond from the dams by at least 700 m, increasing to
1,200 m at the ultimate dam elevation. The separation between the tailing dam and
pond created by the beach increases the margin of safety against overtopping of the
tailing dam, and reduces seepage through the tailing dam and underlying foundation.

A starter dam, at elevation 930 m, will be completed by Year 25 to allow deposition to

begin in the South Cell. Between Year 25 and closure, the Southeast Dam will be raised
to its ultimate elevation. Final heights of starter dams will be re-evaluated during
feasibility design based on initial tailing production ramp-up and seasonal timing of
expected mill start-up.

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Figure 18.8 TMF Staging Plan

Note: Raising of cyclone dams within each stage not shown on these diagrams.

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 TMF DAM STRUCTURES
Over an initial two-year construction period, three earth fill starter dams will be
constructed at the North Cell and CIL Residue Cell (North, Splitter and Saddle) to provide
start-up flotation and CIL residue tailing storage. These dams will be progressively raised
over their operating life to an ultimate elevation of 1,068 masl, providing storage capacity
of 2.3 Bt. A summary of the tailing dams is provided in Table 18.10.

TMF Starter Dams

Starter dams will be earthfill embankments, with shells of compacted random fill
supporting the central glacial till cores. The glacial till cores will be keyed into the
underlying foundations to cut off seepage through weathered near-surface soils and any
pervious strata. A blanket drain is provided to lower the phreatic levels in the
downstream shell. Riprap erosion protection will not be placed on the upstream slope
due to the temporary exposure of the dam to the pond water. Figure 18.9, Figure 18.10
and Figure 18.11 show typical sections of the starter dams.

Main Tailing Dams

The North, Splitter, Saddle, and Southeast dams will be compacted cyclone sand dams
with glacial till cores constructed by the centreline method. Dimensions of the dams are
summarized in Table 18.10. Details of the North, Splitter, Saddle, and Southeast dam
designs are shown in Figure 18.9, Figure 18.10, and Figure 18.11.

A system of finger drains will be installed at the base of the downstream shells of the
North, Saddle and Southeast dams to keep water levels in the dam depressed. Main
drains in the centre of the valley floor will collect and convey seepage to the toe of the
dam. Smaller secondary drains will convey water laterally into the mains drains.

Cyclone sand will be placed on the downstream slopes for annual dam raises from
mid-April to mid-October. During this time, tailing will be pumped from the mill and pass
through a primary cyclone station located above the west abutment of the North Dam.
Fine cyclone overflow will be spigotted into the TMF, and coarse cyclone underflow will be
piped to skid-mounted secondary cyclone stations on the dam crests where coarse,
cyclone underflow sand will be used for dam raise material.

In 2016, a review was conducted of cyclone sand supply and potential geotechnical
enhancements to the tailing dams. It was concluded that sufficient cyclone sand was
available for additional support zones and if required, toe berms to facilitate dam raising.
The review concluded that requirements for additional cyclone sand placement be
determined by stability assessments conducted within the next design phases.

An opportunity was also identified to lengthen the operating season for cyclone sand
production by providing enclosed primary and secondary cyclones. This may significantly
facilitate the provision of additional freeboard for the dams and would mitigate against
potential sand shortfalls.

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Table 18.10 Tailing Dam Summary
Starter Dam Ultimate Dam
Ultimate Core Volume
Crest Maximum Crest Random Fill Core Crest Maximum Crest Cyclone Sand above
Elevation Height* Length Volume Volume Elevation Height(a) Length Volume Starter
Dam (masl) (m) (m) (Mm3) (Mm3) (masl) (m) (m) (Mm3) (Mm3)
North Dam 930 80 680 3.59 0.95 1,068 218 1,900 47.16 3.42
Splitter Dam 935 61 890 3.74 1.08 1,068 194 1,930 31.31 3.75
Saddle Dam 935 35 780 2.09 0.75 1,068 168 1,600 22.99 3.39
Southeast Dam 930 101 890 12.32 1.72 1,068 239 1,400 60.45 3.20
Totals - - 3,240 21.73 4.50 - - 6,830 161.91 13.77
Note: *maximum height measured at dam crestline

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Figure 18.9 North Tailing Dam

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Figure 18.10 Saddle and Splitter Tailing Dams

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Figure 18.11 Southeast Tailing Dam

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 TMF Dam Construction
Table 18.10 summarizes fill requirements for the dams. For construction of the starter
dams, general fill and core material will be excavated by a contractor fleet from local
borrow sources (less than 2 km haul distance) that have been identified at each dam
site. The cyclone sand TMF dams will be raised using a fleet of dedicated mine
equipment.

TMF Seepage Recovery Dams

The seepage recovery dams have been relocated approximately 1 km downstream from
the 2012 locations. Seepage recovery dams will be constructed of compacted glacial till
in a similar manner as for the tailing starter dams, but with flatter 3H:1V upstream and
downstream slopes. An inclined till core is provided on the upstream face; cut-off
trenches into overburden and grout curtains in bedrock where required have been
specified to restrict seepage. The dams will also serve to settle solids transported by
runoff or produced by dam construction activities.

TMF AREA WATER MANAGEMENT

Figure 18.12 shows the schematic water balance with water inputs and outputs from the
impoundment.

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Figure 18.12 Schematic TMF Water Cycle

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 TMF Diversion Channels
Design of the diversion channels has not changed for the 2016 PFS.

Two main diversion channels, the Northeast Diversion and the South Diversion, will be
constructed around the TMF North Cell with additional diversions around the Treaty OPC
to divert non-contact runoff water into a tributary of Teigen Creek at the north end of the
TMF.

At start-up, in order to maintain flows into Teigen Creek, the South Diversion is extended
to the south end of the TMF valley to capture local flows.

Once in operation, the catchment area of the South Cell is diverted by the Southeast
Diversion Channel, which routes non-contact flows to Treaty Creek around the east side
of the South Cell. Diversion channels in the TMF area are designed to route 200-year
peak flows. Diversion channels are shown on Figure 18.13.

To increase maintenance flows towards Teigen Creek, a diversion dam will be installed in
the East Valley catchment. The East Catchment Diversion Dam diverts flows into a tunnel
around a slide zone. The dam will initially divert up to 2 m3/s into a buried pipeline; the
pipeline bypasses the TMF along the east side of the North Cell and releases water into
Teigen Creek. During the first stage of TMF operation, any higher flows from the East
Valley will be passed over the East Diversion Dam spillway and into Treaty Creek tributary.
As the South Cell is developed, flows from the East Catchment above 2 m3/s will be
routed north through the East Catchment Diversion Tunnel and into Teigen Creek.

TMF AREA EXTREME FLOOD ROUTING AND STORAGE

The TMF cells are designed to be able to store extreme flood events without discharge.
Specifically, the PMF can be stored, which is a flood resulting from a 30-day Probable
Maximum Precipitation (PMP) storm, combined with a 100-year 30-day snow melt. The
perimeter diversions are assumed to be inoperative during this extreme flood event. The
PMF inflow volume is estimated to range from 42 Mm3 at facility start-up to 91.0 Mm3 at
the ultimate stage.

For the 2016 PFS, staged TMF discharge pipelines were designed to route surplus water
to diffusers buried in the channel of Treaty Creek. The capacity of the pipeline and
diffuser system is designed to discharge the critical duration PMF.

During operations, water will be reclaimed from the ponds and routed back to the Treaty
OPC, where it will be treated as part of the mineral separation process. Surplus water
from the TMF will be discharged seasonally via the Treaty Creek Diffuser. Discharge will
occur during an approximate period extending from May to mid-November, when the
creek flows are highest.

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Figure 18.13 Ultimate TMF with Catchments and Diversion Channels

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18.3 TUNNELS
A number of tunnels will be excavated during both the pre-production period and
operating period. These tunnels will be classified as either infrastructure tunnels or
water tunnels as shown in Table 18.11 for tunnels constructed in pre-production and
Table 18.12 for those constructed in the operational phase. Other tunnels associated
specifically with block cave mining, are presented in Section 16.3.

The infrastructure tunnels provide for the transportation of ore, personnel, and supplies
between the Mitchell, Sulphurets, and Kerr mining areas and the Treaty OPC. The
principal infrastructure tunnel is the MTT, which transports all mined ore from the
Mitchell OPC to the Treaty OPC, and personnel and freight between the PTMA and the
Mine Site, via the train haulage system. Other infrastructure tunnels include load out,
unloading, and freight sidings in the MTT, a spur off the MTT to Iron Cap, and an ore
conveyor tunnel from the Sulphurets pit to the Mitchell OPC.

The water tunnels include the diversion tunnels as described in the SWM Plan and the
slope drainage tunnels for the Mitchell high wall and the Snowfields landslide.

This section includes a description of the construction method, sequencing, and cost
basis for the tunnels as applied to the Project schedule and capital estimate. The MTT
design cross section has been modified to accommodate the change to train haulage
from the previous ore conveyor system; however the alignment remains the same. The
flow requirements for MDT, NPWDA, and MVDT have been modified as described in the
Mitchell Glacier Diversion Optimization section of Appendix H1. Revisions to diversion
tunnel designs are limited to cross sectional area, staging of tunnel twinned phases,
tunnel slope and inlet configuration. Overall alignments as designed in the 2012 PFS
(Tetra Tech 2012) remain.

Table 18.11 KSM Pre-Production Tunnels Summary

Total Excavation
Length Volume
Tunnel Description (m) (m3)
Infrastructure Tunnels
MTT Principal Alignment 49,406 1,266,770
Treaty Ore Handling 514 27,174
Mitchell Ore Handling 943 43,784
Mitchell Freight and Fuel 576 28,898
MTT Subtotal 51,439 1,366,626
Water Tunnels
MDT – Open Pit Phase Diversion Tunnel Inlets 1,241 32,899
Access Tunnels 870 20,402
Main Diversion Tunnel 7,000 185,570
MDT Subtotal 9,111 238,871
MTDT Stage I 8,020 253,038
table continues…

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 Total Excavation
Length Volume
Tunnel Description (m) (m3)
MVDT and Mitchell OPC Decline - 5,424 182,787
CDT at WSD Construction Diversion Tunnel 900 18,360
SCT at WSD Seepage Collection Tunnels 1,780 19,402
Pre-production Tunnels Total - 76,674 2,079,084
Note: Tunnel volumes are based on construction volumes and account for drill hole “look out”
contractor tolerance and up to 200 mm of shotcrete as required.

Table 18.12 KSM Operational Phase Tunnels Summary

Total Excavation
Length Volume
Tunnel Description (m) (m3)
Infrastructure Tunnels
Iron Cap Connection - 972 35,983
SMCT - 3,025 108,419
Water Tunnels
MDT
MDT – Underground Phase Diversion Tunnel Inlets 1,095 29,028
Access Tunnels 812 29,516
Main Diversion Tunnel 7,000 185,570
MDT Subtotal 8,907 244,114
MTDT Stage II 6,742 136,469
Stage III 7,940 125,135
MTDT Subtotal 14,682 261,604
NPWDA and SSDA Main NPWDA 3,000 100,260
Access Tunnels 600 12,834
Inlet Tunnels 589 26,855
SSDA 1,104 22,345
NPWDA and SSDA Subtotal 5,293 162,294
East Catchment Tunnel at TMF 4,000 67,733
Mitchell Block Cave Dewatering Tunnels Underground Phase 12,000 675,000
Operation Phase Tunnels Total - 48,879 1,555,147
Note: Tunnel volumes are based on construction volumes and account for drill hole “look out”
contractor tolerance and up to 200 mm of shotcrete as required.

MITCHELL-TREATY TUNNELS
The MTT follows the same alignment as in the 2012 PFS design, but has been revised to
accommodate the change from an ore conveyor and truck based transport system to a
train based system. The tunnel cross-sections have been changed to match the selected
train configurations and underground sidings and loading/unloading pockets have been
added to the excavation designs. Excavations for the freight, personnel transport, and
tunnel infrastructure has been substantially changed as well. Of particular note is the

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 fuel pipeline between the PTMA and the Mine Site has been replaced with a rail based
tanker system.

MTT DESIGN
Primary crushing of ore from the Kerr, Sulphurets, and Mitchell open pits will be done at
the Mitchell OPC located at the Mine Site. The crushed ore will be transported through
the MTT to the crushed ore stockpile located at the Treaty OPC, approximately 23 km to
the east. Future underground ore from the Mitchell and Iron Cap block cave mines will
connect with the Mitchell-Treaty ore transport system. The tunnels have been revised
from the 2012 PFS to accommodate the change from the previous concept of an ore
conveyor and truck delivery personnel and freight system, to a train-based transport
system for ore, personnel and freight; however, the tunnel location and alignment have
not changed. Under normal operations, the North Tunnel will be designated for
westbound travel and the South Tunnel will be designated for eastbound travel (see
Figure 18.16 in Section 18.4).

The MTT will comprise the following excavations:

 two, 22,715 m long tunnels

 75, 30 m long cross-cuts, linking the two tunnels

 36 of these will be equipped with refuge stations

 nine track cross-overs to allow for flexibility and tunnel maintenance during
operations
 Saddle Adit – a 265 m long decline at 15% complete with waste transfer
chamber (for use during construction)
 12 rectifier cut-outs, 6 in each tunnel
 train unloading station at the Treaty portal (see Figure 18.19 in Section 18.4)
 Treaty lower portal:

 ore storage bin

 conveyor tunnel to the COS
 escape/ventilation raise to the MTT South Tunnel
 Mitchell portal:

 two train loading sidings and two coarse ore bin excavations
 conveyor tunnel from the primary crushers
 shuttle conveyor tunnel between the coarse ore bins
 escape/ventilation raise from the MTT South Tunnel up to the shuttle
conveyor tunnel and an escape/ventilation tunnel from the MTT South
Tunnel up to the conveyor tunnel; (the escape tunnel is required during
excavation of the MTT in case of avalanches)
 Mitchell Freight Area

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  fuel and freight handling areas located underground with accesses for
mobile equipment from surface through the South Tunnel (see Figure 18.23
in Section 18.4)
 two cross-cuts from the fuel and freight handling areas to the Lower Mitchell
Access Ramp, which will allow supplies to be transported directly to the
future Mitchell block cave underground warehouses without having to go to
surface.

MTT Tunnel Support and Advance Rates

From a regional review of the rock types that will be encountered on the MTT alignment it
is anticipated that four general types of TSC will be required along the length of the MTT
as described in Table 18.13. In the areas of the MTT that are identified as having PAG
rock, corrosion-resistant rock bolts, and corrosion resistant mesh would be installed.

Table 18.13 Recommended Tunnel Support

Percentage
of Tunnel
(%) Recommended Tunnel Support – MTT
29 2.4 m long rock bolts on 1.5 m spacing in roof, spot bolting on walls; welded wire mesh
roof; may require shotcrete in localized areas of poor rock mass and across small
shears
21 2.4 m long rock bolts on 1.2 m spacing in roof, 2 m spacing on walls; welded wire
mesh roof; may require shotcrete in localized areas of poor rock mass and across
small shears
42 50 mm fibre reinforced shotcrete; 2.4 m long rock bolts on 1.5 m spacing in roof, 2 m
spacing on walls
8 100 mm to 200 mm fibre reinforced shotcrete, 3 m long bolts on 1 m spacing in roof
and walls; may require reduced round length; may require pilling; may require grout
cover; may require lattice girders

The activities required to install the four TSCs adds to the time required to take the round
and therefore affects the daily advance rate of the tunnel. Table 18.14 uses the
distribution of TSC from Table 18.13 along with associated advance rates as determined
by the contractors. From the range in advance rates for each TSC, MMTS has chosen an
appropriate rate to use in the scheduling for the MTT, as well as the other tunnels.

Table 18.14 Ground Support and Advance Rates

Percentage
Ground Support of Tunnel Advance
(TSC) (%) (m/d)
Class I 29 7.08
Class II 21 6.80
Class III 42 6.58
Class IV 8 5.08
Total/Average 100.0 6.65

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 MTT MINING METHOD
The tunnels will be constructed in accordance with BC Mines Act and Health, Safety and
Reclamation Code for Mines in BC using conventional drill and blast techniques, and will
follow the conditions contained within the License of Occupation for the MTT issued in
September 2013 by the Government of BC.

WATER MANAGEMENT
Both MTT tunnels will be driven with a ditch in the floor and excavated in the corner that
will contain a perforated pipe for the collection of tunnel water during the operations
period; the pipe will be buried under the track ballast. The overall grade of the MTT is
1.2% with the Treaty portals being higher in elevation than the Mitchell portals, therefore
in operation the water in the tunnels will flow by gravity back to the Mitchell portal where
it will be routed to the water storage facility

During construction, tunnel water will be collected and treated as follows with each flow
of water directed to temporary retention ponds associated with the temporary water
treatment plant located near the portal:

 Mitchell (headings driven east): water will be collected in the perforated pipe
and will flow by gravity back to the temporary treatment ponds at the Mitchell
portals.
 Saddle (headings driven west): water will be collected at the face and pumped
through a construction discharge line back to a sump located at the bottom of
the Saddle Adit. From the sump, it will be pumped to temporary treatment
ponds at the Saddle portal.
 Treaty (headings driven west): water will be collected at the face and pumped
through a construction discharge line back to the temporary treatment ponds at
the Treaty portals.

TUNNELING EXCAVATION CYCLE AND PRINCIPAL EQUIPMENT

The tunneling excavation cycle comprises the following unit operations for each round of
advance. Each of the portal areas will have their own dedicated fleet of equipment as
determined by the selected contractor.

Face Drilling
The faces will be drilled using three-boom electric-hydraulic jumbos drilling 5.8 m long
blast holes and one 10 m long probe hole. The probe hole is to determine potential
water inflow as the heading advances.

Loading and Blasting

A two-person crew will load explosives using a scissor truck. Explosives will comprise
emulsion or ANFO depending upon water conditions of drill holes. An advance of 5.30 m
is expected on average from the 5.80 m long holes drilled. It is anticipated that blasting

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 will be carried out on both day and night shifts, at any time, under proper safety protocol
so that crews don’t have to wait until shift change to blast.

Face Mucking
Face mucking will use LHDs to the closest remuck bay to get the face cleared as quickly
as possible.

Installing Tunnel Support

Once the face has been mucked, the tunnel support cycle will commence using electric-
hydraulic bolting jumbos to install rock bolts, and welded wire mesh. Shotcrete will be
placed using a shotcrete/fibercrete sprayer fed by a shotcrete transmixer. This activity
will happen behind the jumbo while face drilling the next round. During the tunnel
support cycle, a hole in the tunnel back will be drilled for future installation of hanging
cable trays and catenaries for the permanent services in the tunnels.

Installing Services
Installation of services is not part of the regular tunneling cycle but takes place when the
faces are suitably advanced.

Installation of services includes the following:

 advancing auxiliary ventilation fans

 hanging cables and ventilation ducting
 hanging air, water, and dewatering lines
 installing the construction and permanent dewatering lines.

Installing Track and Ballast

The track and ballast will be installed in both the North and South tunnels during the
construction period.

Construction muck will be hauled out using the North Tunnel and an allowance has been
included to install and later remove, a third rail to accommodate a different track gauge
than the permanent gauge. Installing track at final gauge during construction will allow
for early commissioning of the train system.

Muck Haulage to Surface

Muck from both the North and South tunnels, and the cross-cuts and track cross-overs
will be placed in the remuck bays. Independent of the face drilling and advance, muck
from the re-muck bay will be loaded into train cars and hauled to surface via the North
Tunnel. After exiting the portal it will be placed into the rock dumps at the portals. The
exception is the Saddle Adit where rail muck will be dumped into an underground
chamber adjacent to the tracks and then loaded into low profile trucks and trimmed to
the rock dump at the Saddle portal site

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 Temporary waste management facilities will be in place for all the tunnel muck exiting to
surface from the multiple headings. The muck will be sampled for acid rock drainage
(ARD) potential and stockpile as required. Muck will later be placed into a permanently
designated storage location either at Mitchell (RSF) or Treaty (TMF). This includes
remanding the construction muck at the portal through the completed Saddle to Treaty
portion of the MTT.

As each heading of the MTT faces advances, the remuck bays and rails will be advanced.
The re-muck bays are included in the excavation required for the cross-cuts.

SHIFT SCHEDULE AND ROTATION

Tunneling personnel are scheduled to work two, 11-hour shifts, and two shifts per day
with equal onsite/offsite crew rotation. Other tunnels projects in BC have been granted
permits for between 10 and 11.5 hours per shift depending on local conditions and
discussions with the regulators this Project will be considered on a similar basis. The 11
hour shifts used in this study are conservative.

MTT MINING SEQUENCE

The MTT is on the critical path of the construction schedule and has therefore been
broken into two segments to allow for concurrent development workplaces resulting in a
shorter total tunnel construction period. This preliminary sequence will be accomplished
using the Saddle, which is a transverse valley along the tunnel alignment, located
approximately 6.1 km from the Treaty Portal of the MTT and 16.6 km from the Mitchell
portal. An adit will be driven at a negative grade from the Saddle and access both the
north and south MTT tunnels. It will allow the Mitchell-Saddle segment of the MTT to be
driven from two headings from either end of the segment, with four independent crews at
one time. Additionally, two crews will be advancing the Treaty-Saddle segments from the
Treaty portals, one in the North Tunnel and one in the South Tunnel.

Crews from the shorter Saddle to Treaty segment of the MTT will be finished early and will
be will then be used to develop the other excavations (e.g. ore bins, rectifier chambers,
etc.) required for the complete MTT system design.

The North and South tunnels will advance together both from the Mitchell and Saddle
headings. As the twin headings advance, cross-cuts will be developed every 300 m
joining the two tunnels. The cross-cut closest to the face will be used for remucking, the
next closest cross-cut will be used for the ventilation cross-over as discussed below and
the cross-cut before that will be sealed and equipped with a refuge station.

CROSS-CUTS AND TRACK CROSS-OVERS

The track cross overs are included in the revised twin tunnel design to divide the MTT into
three haulage sections to facilitate maintenance on the track, tunnels, and infrastructure
while the ore transport is in continuous operation and to route trains into the loading and
unloading sidings at each end. Air doors and fans are also provided to isolate sections
while maintenance is in progress.

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 Cross-cuts are also designed between the tunnels, and with the cross-overs, provided
access between the tunnels at 300m spacing along its length. This spacing will provide
efficient work cycles for the dual heading construction method and facilitate a common
muck haul and ventilation system during construction. During operations, the cross-cuts
will be sealed with an air door to provide for independent airway and fitted with mandoors
to meet the requirements for independent access for personnel.

Each of these excavations will have the same cross-section as the North and South
haulage tunnels and will be excavated from the North and South tunnels. Some of the
crossovers and crosscut excavation will be scheduled off the critical path for the tunnel
crews, to compress the overall tunnel schedule.

MTT INFRASTRUCTURE
During tunnel construction, installation of the infrastructure required for the operation of
the train haulage system will be installed where it doesn’t disrupt the tunnel advance
rate. Upon completion of tunneling, time is allocated to complete the fitting of the MTT
for the operating systems and to commission the first trains. This will include installing
parts of the electrical system required for the trains, the loading and unloading
infrastructure, and the ventilation system required for the MTT suitable for the operating
phase.

VENTILATION DURING CONSTRUCTION

Since there are three sets of two headings advancing together, there will be three primary
ventilation circuits. The primary circuit will be established by installing two fans in a
bulkhead just inside the portal in the South Tunnel (and near the entrance to the Saddle
adit), to provide fresh air under positive pressure through the South Tunnel, through the
ventilation cross-cut with exhaust out the North Tunnel as shown in Figure 18.14.

The secondary circuits will be established to intercept fresh air from the primary circuits
in order to ventilate the advancing faces. This will be done by two auxiliary fans with
flexible vent ducting installed in the South Tunnel on the fresh air side of the active
ventilation cross-cut and blowing air to the advancing headings in each of the South and
North tunnels. The air from the South Tunnel will exhaust via the ventilation cross-cut
where it will meet with the exhaust air from the North Tunnel. This exhaust air stream will
then flow out the portal. As the tunnel faces advance, a new remuck cross-cut will be
established and the previous remuck cross-cut will now act as the new ventilation cross-
cut. The previous ventilation cross-cut will be sealed and equipped with the advancing
refuge station. Figure 18.14 shows the primary and secondary ventilation system for the
Saddle to Mitchell segment of the MTT.

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Figure 18.14 MTT Ventilation Circuit

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 VENTILATION DURING OPERATIONS
During normal operations air will be moved through the tunnel by the piston effect of the
trains. Thus ventilation in the North Tunnel will generally be from east to west and
ventilation in the South Tunnel will generally be from west to east.

To allow for segments of the MTT to be isolated for maintenance, sets of ventilation doors
with axial vane fans will be installed at the portals and at the track cross-overs. In this
way fresh air will be supplied to the isolated sections of track where the crews will be
working. Energizing or de-energizing of fans will be coordinated with train traffic so that
they aren’t working against each other or against closed vent doors.

Additionally, at the bottom of the escape ramp from the South Tunnel that leads to the
conveyor tunnel at Mitchell, a fan will be placed in the vent doors to provide ventilating
air in the ramp. This air will exhaust out the conveyor auxiliary ventilation systems are
also designed for the lower Treaty portal at the unloading station and the Mitchell loading
stations.

Both the freight and the fuel areas will be equipped with vent doors to control air flow for
the entrance and exit for the freight trains and for mobile equipment from the
underground freight sidings to surface.

An allowance for two future access tunnels from the Mitchell block cave access tunnel
will be provided, these will be equipped with vent fans located above the doors, which will
draw air out of the freight and fuel areas under a negative pressure, exhausting it into the
Mitchell block cave access tunnel. This will need to be integrated with the ventilation
design for the block caves.

A more detailed ventilation study is recommended at future levels of study.

TRANSPORT OF ORE, PERSONNEL AND FREIGHT

Train operations are discussed in Section 18.4.

Tunnel Maintenance
Tunnel maintenance will comprise the following:

 track maintenance – repair of track, ballast, and switches, including clearing of

drainage pipes
 maintenance of ventilation fans and ventilation doors
 maintenance of catenary and communications systems
 tunnel support rehabilitation – planned and unplanned repair of tunnel walls
and back.

The MTT has been designed with track cross-overs linking the North Tunnel to the South
Tunnel over the 22,715 m tunnel length. The cross-overs will allow the tunnels to be
separated into three approximately equal length segments such that trains can diverted
from the isolated segment onto the corresponding piece of track in the opposite tunnel

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 and maintenance can be carried out. The ore traffic control system will control the train
traffic when a segment has been isolated and the other tunnel is handling train traffic in
both directions. The ventilation for the isolated section is described on page 18-56.

Tunnel Maintenance Personnel

Tunnel maintenance personnel will include electricians, instrumentation technicians,
track maintenance and tunnel support personnel. With the amount of track and cable
installed, and regular tunnel support maintenance, these maintenance crews will have to
be dedicated solely to the MTT.

REFUGE STATIONS
At the end of the tunnel construction period, thirty-six, 12-person refuge stations will be
set up in approximately half of the crosscuts connecting the North and South tunnels.
These refuge stations have been designed primarily for the workers carrying out the
various maintenance activities and will be located 600 m apart thus the furthest any
personnel would be from the nearest refuge point would be 300 m. These refuge
stations will be equipped with a self-contained supply of air and water and will be
connected to the tunnel communication system. The final specification will be developed
during further studies, to meet the requirements of the operation’s Emergency Response
Plan required by the BC Mines Regulations. Because there are twin tunnels with
separate airways, crosscuts every 300 m, and vent doors that can control airflow in the
event of a fire, the final placement of 36 refuge stations may be conservative. The
general layout of the refuge stations is shown in Figure 18.15.

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 Figure 18.15 Plan and Section Showing Refuge Stations Locations

TRANSPORT OF PERSONNEL (CREW CHANGE AND REGULAR OPERATIONS)

The train control system will ensure there is no haulage of fuel or explosives when
personnel are being transported in the tunnels. In the event of an emergency, the
personnel cars will be equipped with personal protective equipment (PPE) kits including
self-rescuers that will be located under the seats. This will be suitable for personnel to
use to get to the closest rescue station or to exit into the other tunnel via the closest
crosscut, through the man door in the brattice. In the event of a fire, the ventilation
doors on each side of the segment containing the fire, will be closed by remote control
and personnel will be required to leave the train and cross over into the opposite tunnel
through one of the cross-cuts equipped with the man-doors. The ventilating fans in the
MTT are not normally in operation but could be turned on for the tunnel in which
personnel has crossed over to pending proper emergency protocol.

FIRE ISOLATION DURING OPERATIONS

In the event of a fire in the fuel or freight areas during operations at the Mitchell
marshalling area, these areas will be closed by remote operation of the four vent doors.
For a fire in any other part of the MTT, the vent doors of the tunnel segment containing
the fire, can also be closed remotely.

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18.4 MINE TO MILL ORE TRANSPORT SYSTEM
At the Mitchell OPC, ore will be crushed and conveyed through a tunnel to two live
underground ore bins within the MTT. Loading chutes under the ore bins will feed ore
into awaiting trains that will transport the ore to an unloading station at the Treaty end of
the MTT. The train cars will dump ore into a live underground unloading bin. Apron
feeders will unload the bin onto a conveyor to transport the ore to the top of the Treaty
COS.

Each train will consist of one, 140 t electric locomotive and 16, 42 m3 belly dump ore
cars that have the capacity to deliver 800 t/h from Mitchell to Treaty based on 90-minute
cycle times. On average, eight trains will deliver approximately 130,000 t/d of ore to
meet the process plant requirements. An additional four trains will be on standby to
provide for mechanical availability or to handle an increase in plant feed of up to
10,000 t/h, when required to meet the total mine to mill ore transport system
requirements of approximately 130,000 t/d. The transport system capacity has been
confirmed at a PFS level by using a high-level train routing simulation that incorporates
static modelling of the rail system and average cycle times between Mitchell and Treaty
for delivery of ore, materials, and personnel.

The trains will travel on a conventional ballasted track structure with timber ties and
operate via an electrical overhead catenary system. Trains will be controlled by an
automated train control system managed from a remote control room. Loading chutes
will also be controlled remotely, and unloading chutes will operate autonomously. No
onboard operators will be required within the tunnels during train system operation.

The train transport system is described in detail in the Nordic Minesteel Technologies Inc.
(NMT) report (NMT 2016), which details specifications and dimensions for each
component of the train transport system.

Figure 18.16 shows a plan view of the approximately 23 km long MTT dual track
transport system. The south tunnel will be primarily utilized for loaded trains travelling
from Mitchell to Treaty, and the north tunnel will be utilized for empty trains travelling
from Treaty to Mitchell. The tunnels will run uphill from Mitchell to Treaty at a 1.2%
incline, such that tunnel drainage will flow to the property’s mine side. Cross-overs are
planned at both end points of the tunnel, as well as in two intermediate points to split the
route into three sections. One section of the tunnel can be isolated when maintenance is
required, and one-way traffic can be implemented and safely controlled by the train
automation system. A simulation has verified that these traffic flow restrictions will not
compromise average daily train production requirements.

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Figure 18.16 MTT Dual Track Plan View (Distances in Metres)

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 The numerical demarcations in Figure 18.16 show the distance, in metres, along the MTT
tunnel of noted features from Mitchell to Treaty. The Golder Alignment refers to the
planned access from a location near the Mitchell Portal to the underground block cave
operations.

Figure 18.17 shows a typical cross-section through both of the MTT train tunnels.
Standard gauge ballasted track, 1.435 m between inside edges, with base-plated timber
sleepers, and fish-plated 56.5-kg/m rail will be utilized for the train running surface. The
crushed stone ballast will be 250 mm thick, after tamping flat, with in-laid sleepers. The
tunnel floor will be graded to one side with perforated HDPE piping installed in the ballast
to carry water drainage.

Figure 18.17 MTT Train Transport Drift Section (Dimensions in Millimetres)

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 The 140 t locomotives are powered by an electrical overhead 25 kV alternating current
(AC) catenary system that includes:

 two, 25 kV medium voltage substations

 three low-voltage substations equipped with a transformer 25 kV/0, 6 kV/208 V,
and 600 V/208 V control panel
 12 rectifiers, 6 in the north tunnel and 6 in the south tunnel
 a Siemens SCAT SR aluminum overhead conductor rail system.

Loaded trains will travel on an uphill slope, requiring a tractive force of approximately
275 kN. At a speed of 30 km/h, power consumption of 2,400 kW per train is expected
and will require a current draw of 1,600 A from the catenary at an operational voltage of
1,500 V. To reduce the effects of voltage drop in feeding the cables, the catenary wire,
and the rails, the system will be separated into six sections in each tunnel. Each 4.6 km
section will be fed by three inputs from a rectifier station. The train automation system
will manage the trains so that no one section becomes overloaded with too many trains
travelling uphill loaded. Empty trains travelling downhill at 50 km/h will feed
approximately 400 kW of energy back into the grid.

The locomotives, as well as the loading and unloading chutes, will carry their own fire
suppression systems, and will not require a fixed system within the tunnel.

An automated train dispatching system will be utilized to achieve a safe and efficient flow
of trains through the tunnels, with no on-board operators. The system will be supervised
from a control room located in the train maintenance shop (Figure 18.22). The
automated system technology employs full radio-based train spacing and speed
supervision on the whole railway system, except inside service areas/workshops. Trains
find their position themselves via positioning balises and sensors. By transmitting the
positioning signal to a radio block centre, it is always possible to determine which
position on the route the train has safely cleared. The following train can then be granted
a movement authority up to the released position. This “moving block” system operates
so that the track section reserved for a specific train and its route is automatically
adapted to the train length, the traffic situation, and the train’s current actual and
allowed speed. This system allows the trains to move with as short headway as their
brake distance allows.

The train control system operates on a wireless communications system that must be in
place for the entire track. It is assumed that wireless infrastructure will be in place in the
MTT. While wireless communications (Wi-Fi) are the current state of the art technology
for train control communications, it is recognized that more efficient and reliable
communications may be developed in the future.

In order to minimize tunneling costs across the approximate 23 km length, tunnel

dimensions are designed to minimum operable dimensions. The locomotive height is
minimized for the 140 t class, and the manufacturer will attempt to reduce it even further
during the next stage of design. The Siemen SCAT SR overhead catenary bracketing,

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 which allows for the train’s overhead electrical system to take up the minimum amount of
tunnel back space, will be used instead of standard tray bracketing. Future studies will
examine the cost/benefit of utilizing a tubular track system, instead of the standard
ballast system, to potentially reduce tunnel height even further. Minimum clearances of
600 mm and 480 mm will be left on either side of train. The 480 mm clearance adheres
to Transport Canada’s standard respecting railway clearance in tunnels, and the 600 mm
clearance allows some extra room in case personnel or supplies need to be moved
around a parked train. At no point will there be personnel or other vehicles in the tunnels
while the trains are in motion.

As shown in Figure 18.16, two parallel underground spur lines coming off of the main
tunnel will be used for train ore loading at the Mitchell end of the MTT. A 15,000 t
capacity single train loading bin will be installed underground in each of these spurs, or
loading zones. Although one loading zone is sufficient for overall system operations, a
second zone has been added for contingency. Figure 18.18 shows a cross section of the
ore bin and the train ore loading arrangement. The bins will be fed from the top with
crushed ore via a conveyor from the primary crusher, and the trains will be loaded via an
inline load chute below the bins. One train length of track has been allowed for beyond
the loading chutes to accommodate reversing into the loading zones.

The inside width of the load chute extension (rock box) will be 3.0 m. The inside width of
the throat opening will be 2.5 m. The maximum opening between the throat gates and
the chute floor will be 1.2 m. The load chute is designed to handle both crushed and
uncrushed ore and will not have any hang-up issues with the proposed particle size
distribution from the primary crusher. The proposed chute will provide for safe
maintenance access to the feed chamber, and the chute, without interrupting the rail
operations. Personnel will be able to access the loading zones through the MTT,
approximately 450 m from the Mitchell portal. A vertical escape way for personnel will be
included between each loading chamber and the crusher conveyor tunnel above it.

An operator will load the train manually from the control room, which is conceptually
shown in the train maintenance shop (Figure 18.22). The operator will be able to control,
adjust, and follow the loading with complete emergency stop functions. Complete local
control functions will also be available. The train controller will have a CCTV view of the
loading process. It has been found in existing applications that the manual operation of
loading ROM material is more effective than an automated system, due to issues
associated with remote sensing the amount of ore in the wagon and the variable loading
rates that are experienced. Future developments in technology may enable full
automation.

Trains will be continuously loaded without the need to stop the train between cars. Each
42 m3 car is loaded in an average of 36 seconds. The mine ore cars adopted for this
study are end hinged cars with an overlapping apron between the cars. This apron
minimizes spillage between the cars during loading and train operation. Straight track
will be utilized under the loading chutes to minimize derailment risks.

There are no additional provisions for the removal of tramp metal from the ore. The train
control system proposed includes a profile detector to automatically stop over height

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 trains prior to the start of the overhead catenary electrification wire; although the
controlled loading of the trains with already crushed material means an overloaded
situation should not occur. If a car is overloaded, the operator will reverse the train under
the chute lip to rearrange the material between the cars; removal of material will not be
required.

Approximate train weighing is currently included on the locomotives; however, the train
control system can be specified to include automatic train weigh sensors after the
loading chutes and the unloading station. The system can be used to manage over
loading and under loading at chutes, together with identifying issues with particular ore
cars.

Embedded concrete track is specified at load chutes and the unload station, where some
spillage is inevitable. This type of track will facilitate clean up by a track maintenance
vehicle, which is included as part of the equipment fleet.

Figure 18.18 Ore Loading in MTT at Mitchell

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 As shown in the plan view of the overall system layout (Figure 18.16), a single
underground train ore unloading zone is included at the Treaty end of the MTT. This has
an ore bin capacity of 15,000 t. Figure 18.19 shows a cross section through the train
unloading station and ore bin.

Figure 18.19 Ore Unloading in MTT at Treaty

Trains must pass through the unloading station in one direction only, then cross over to
the other track on the opposite side of the unloading station. Only a single train will
operate in the unloading station at one time. The bottom discharge ore cars will
continuously and automatically unload through the station to the bin underneath, with
each car taking an average of nine seconds to unload. The train will be driven via
traction drives across the unloading station at a maximum speed of 2.5 km/h. Two
overhead travelling cranes will be installed for maintenance.

From the bottom of the ore bin, ore will discharge into two apron feeders and onto a
conveyor belt that will transport the ore to the surface and feed to the Treaty COS.
Maintenance personnel will access the conveyor tunnel through its portal on surface, as
well as a vertical escape tunnel that joins up the unloading station and the MTT above.

Figure 18.20 shows the lengths of the typical train consists used for transporting ore,
personnel, and freight. Personnel and freight transportation is described in more detail
in Section 18.4.1.

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Figure 18.20 Train Consists for Ore, Personnel, and Freight Trains (Dimensions in Millimetres)

Ore Trains

~
Personnel Trains

Freight Trains

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 MTT FREIGHT AND PERSONNEL TRANSPORT
The train system will also be used for transportation of personnel and freight between the
Treaty and Mitchell areas via the MTT. Freight and personnel transport will be scheduled
on a daily basis, and the transport trains will be controlled by the automated train control
system. Specially configured personnel and freight trains will transport personnel,
freight, and fuel through the MTT, with marshalling and unloading areas at each end,
separate from the ongoing ore transportation facilities. Personnel, freight, and fuel
handling will only be scheduled during the day shift operations.

These transport trains will use the same 140 t locomotives as the ore trains, but will have
specialty cars for personnel, freight, and fuel transport. Train consists are shown in
Figure 18.20. Each train will be able to pull between six and 12 specialty cars per trip.

Each personnel car will carry up to 60 passengers and will be outfitted for underground
operation. They will include pneumatic braking and independent parking brakes. The
passenger wagon will be fitted with a heating, ventilation, and air conditioning (HVAC)
system to ensure that personnel comfort is maintained at a suitable level in all operating
conditions, and that no high-velocity air will impinge on personnel. The windscreens will
be manufactured from safety glass. The cab side windows will be tinted to minimize
light/heat transmission.

A 24 V direct current (DC) battery will be fitted to each personnel wagon and will supply
the emergency load (lighting, ventilation, communications, and door controls) for a period
of two hours for all train consists (with the battery charged to 80% of its full capacity),
should there be a failure of the primary or auxiliary power supply. Fault detection will be
provided on the battery and control circuits so that any fault will be indicated. Each
personnel wagon will be outfitted with appropriate PPE and self-contained breathing
apparatus (SCBA) for all passengers, in case of an emergency event that forces
personnel to abandon the wagons within the MTT.

Freight cars with a 50 t capacity will be multi-functional and allow for transporting of
interchangeable modules as required. They can be left as flatbeds and outfitted with
freight directly, or they can be outfitted with sea-can trailers carrying freight, or they can
be outfitted with tanks carrying liquid freight. The freight cars will include pneumatic
braking and independent parking brakes.

The train control system will ensure that dangerous goods, such as fuel and explosives,
are never present in the tunnel during personnel transport. The MTT will be gated on
both ends, and personnel will be restricted from entering, except for maintenance. As
described previously, segments of the system with maintenance personnel will be
isolated and locked out without compromising total system operations.

Fuel and explosives delivery will be scheduled during available track time between trains.
Simulation has shown that 21 operating hours per day are required to achieve the
average daily ore production, with the remaining time in the day to be utilized for fuel and
explosives delivery. Personnel and freight train trips will be sequenced with the ore train
transport. Estimated freight, fuel, and personnel movement requirements through the

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 MTT will call for a daily average of five return train trips that have been included in the
train production simulations. The estimated daily quantities are shown in Table 18.15.

The CCAR, when seasonally available, will be used to transport heavy volume or oversized
items.

Table 18.15 Estimated Freight, Fuel, and Personnel Transport Daily Requirements
Transport Unit Amount
Lime t/d 350
Ammonium Nitrate t/d 175
Other Mine Operations Supplies t/d 20
Camp Supplies t/d 5
Fuel L/d 400,000
Persons persons/wk 360

TREATY STAGING AREAS

On-surface staging areas near the Treaty portal, shown in Figure 18.21, will be used to
load personnel, freight, and fuel onto the specialty train cars. These staging areas will be
road accessible and include a laydown area for all freight that is for transport through the
MTT. Gantry cranes will load the flatbed train cars with freight payload. Empty fuel train
cars will be loaded via fuel lines from the main Treaty fuel storage tank. Future studies
will detail the safe marshalling procedure for the dangerous goods, including fuel and
other combustibles, raw materials for the Mitchell explosives plant, and chemicals. There
is sufficient space at the Treaty marshalling yard to accommodate isolation of various
goods.

Freight and fuel marshalling out of the north tunnel will be separated from the personnel
marshalling out of the south tunnel. The personnel loading area will include a structure
to protect waiting passengers from the elements.

A train maintenance shop will be located in the freight marshalling area, as well as an
extra track to park excess ore cars when not in operation. The workshop facilities are
enclosed in a building on the south side of the pad, located outside the Treaty portal.
The layout of this facility is shown in Figure 18.22. These facilities also include the
control room for train system operations. Maintenance personnel for the train system
are estimated as a standalone operation, and will work out of this shop. An opportunity
exists to integrate this group under the umbrella of the overall Treaty OPC operation and
maintenance crews.

Catenary for the 140 t electric locomotives ends at the portals, shown as purple arrows in
Figure 18.21. Specialty personnel, freight, and fuel train cars will be shunted by 20 t
battery locomotives into the tunnels, picked up by the 140 t electric locomotives, and
transported from Treaty to Mitchell.

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 Figure 18.21 Treaty Personnel, Freight, and Fuel Staging and Marshalling

Figure 18.22 Treaty OPC Train Maintenance Shop

MITCHELL STAGING
Three separate, enclosed, underground staging areas near the Mitchell portal will be
used to offload passengers, freight, and fuel, respectively (shown in Figure 18.23). The
freight and fuel staging areas will be isolated with fire/explosion proof doors. Loaded fuel
tanks and other hazardous freight will be shuttled out of the tunnel as soon as possible;
there is no planned long-term underground storage for these materials. The

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 transportation of fuel, including the shuttling out of the tunnel, will not occur during the
transportation of other flammable/explosive freight or personnel.

Personnel will exit the Mitchell portal by bus or other light vehicle. In the event that the
portals are inaccessible, personnel will be able to exit the MTT via the vent and conveyor
tunnels towards the Mitchell OPC (as shown in Figure 18.23).

Freight and fuel staging areas will include gantry cranes to offload the train payloads onto
awaiting flatbed tractor-trailer units. Freight will be driven out to its ultimate destination
at the Mine Site. Fuel will be transported by tractor-trailer units to a nearby on-surface
fuel depot, or directly to pit fueling stations, depending on the needs of the operations.
Fuel train cars will be re-loaded with an empty fuel tank for return to Treaty.

Figure 18.23 Mitchell Personnel, Freight, and Fuel Staging and Marshalling

18.5 SITE ROADS

Currently, the KSM site can only be accessed by helicopter. Helicopter support will
augment the road pioneering work and construction camps set up.

Avalanche protection will be constructed where appropriate so that work can be safely
carried out at the tunnel portals. Rock storage landforms will be developed adjacent to
the Mitchell pit.

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 The Mine Site roads are outlined in the Figure 18.24, with the starter pits outlines shown
in blue. Road numbers and corresponding descriptions are shown in Table 18.16.
Figure 18.24 Mine Site Roads

BASIC ROAD DESIGN CRITERIA

This section outlines some of the basic design criteria for the Mine Site roads.

Maximum Grade
The maximum grade for haul roads is 8% and for access roads is 10 to 15%.

Road Width
Haul road widths are designed to comply with the following BC Mines Regulations:

 for dual lane traffic, a travel width of not less than three times the width of the
widest haul vehicle used on the road
 for single lane traffic, a travel width of not less than two times the width of the
widest haul vehicle used on the road
 a berm height of at least three-quarters the height of the largest tire on any
vehicle hauling along the road, where a drop-off of greater than 3 m exists.

Ditches are included within the travel width allowance.

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 CUT-AND-FILL VOLUMES
Road cut-and-fill volumes are estimated using the Project topography surface. Final road
widths are estimated based on main road use. The following road widths are designed:

 haul truck routes – 38.2 m

 major personnel transport route and equipment route – 20 m
 explosives access routes – 15 m
 lightly travelled roads (personnel and small pick-ups only) – 6 m
 pioneering roads – 3 m.

Roads are designed in balanced cut and fill where possible to reduce excess material
requirements. The final road construction volumes are calculated for each road using
the 3D shapes designed and the topography surface provided. The road volumes are
shown in Table 18.16. Volumes are reported in bank cubic metres (bcm), which
represents the in situ volume. A swell factor of 30% is used to convert bank cubic metres
to placed fill volume (cubic metres).

Table 18.16 Mine Road Cut and Fill Estimates

Cut Fill Drill and Blast
Road Description (bcm) (m3) (%)
C1 Camp 2 to Bailey B1 (Sulphurets Creek) 4,470 44,275 0
C2 Bailey B1 to C3/C4 Junction 47,253 73,308 25
C4-1 Initial Maintenance Access 155,909 226,293 25
C4-2 Maintenance Access 0 331,632 75
D1-1 Maintenance Facility to Mitchell Valley 402,073 1,259,546 50
D2 Bailey B2 to Camp 4 (MTT Portal) 294,711 280,331 75
D3 Camp 4 to start of E 85,043 289,693 50
D4 Mitchell OPC Access 10,114 22,940 50
E Mitchell Diversion 56,719 21,438 50
E2 MDT North Ditch Access 221,007 105,801 50
E3 MDT Sub-glacial Inlet Access 54,268 109,737 50
F1 Camp 4 to Bailey B4 (McTagg) 24,223 28,314 25
F2 Bailey B4 to North End MTDT 18,569 31,730 50
G1 Sulphurets Access Road (from Camp 9) 76,634 1,061,278 75
H End of G1 to South End MDT Portal 40,698 50,955 25
J Explosives Facility Access 101,312 116,136 50
J2 AN Prill Access 234,100 243,115 50
K Sulphurets Pit Access 1,443,893 4,773,854 75
K2 Sulphurets Ridge alternative access to OPC 259,565 412,793 75
L1 Southeast WSF Access 196,213 140,999 75
Q Upper Sulphurets Powerhouse Access Road 7,222 10,699 25
R Camp 9 to South End MTDT 10,924 13,278 25
S Camp 9 to South End MTDT Stage 2 and 3 46,552 32,901 75

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 PIONEERING ROAD VOLUMES
An initial 3 m wide pioneering road will be built along each road alignment using dozers
and, where required, small excavators and drills. Pioneering road sizes are small relative
to the accuracy of the topography; therefore, an allowance is made to account for the
volumes and costs required.

FINAL ROADS
Roads are widened from the pioneering width to the final width after all critical mine
areas have been accessed (WSD CDT, MTT portal, diversion tunnel inlets/outlets, etc.).
Some roads will require fill to be placed with mine haul trucks to achieve final road width.
The road between the Sulphurets quarry and the WSD is one such example.

18.6 PROCESS PLANT FACILITIES

The Mitchell OPC will include primary crushing and material handling systems, including
conveying.

The MTT will extend from the north side of the Mine Site, approximately 23 km to the
northeast, into the upper reaches of the Treaty OPC. The tunnels will transport ore,
primarily crushed at the various crushing stations at the Mitchell OPC, by rail cars to the
Treaty OPC. The process facilities at the Treaty OPC will include secondary and tertiary
crushing, grinding, flotation, concentrate dewatering, concentrate loadout facility, cyanide
leaching on gold bearing pyrite tailings, cyanide recovery and destruction, and flotation
tailing/residue delivery facilities.

The main process equipment will be housed in structural steel buildings, complete with
overhead cranes, electrical rooms, HVAC, and offices.

The process related facilities are detailed in Section 17.0.

18.7 ANCILLARY BUILDINGS

Ancillary building construction considered for the study will be pre-engineered, stick-built,
or modular structures, as applicable. The HVAC for these buildings will be designed to
industrial standards. The following ancillary buildings are included in the study:

 Treaty OPC:

 fuel storage facility

 fuel distribution station
 administration building
 assay and metallurgical laboratories
 warehouse and maintenance building
 concentrate storage/load-out building
 cold storage/reagent storage building

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  first-aid building
 ore train storage yard, maintenance shop and loading/unloading facilities
 permanent operations camp
 temporary construction camps
 potable water treatment plant
 sewage treatment plant
 incinerator
 substation and auxiliary power supply facilities
 construction laydown area
 pre-construction fuel storage
 EPCM and contractors’ offices, concrete batch plant, construction camps,
TWTPs, and numerous other construction related facilities
 Mitchell OPC and lower Mine Site areas:

 truck shop including first aid facilities

 HDS WTP with sludge storage facilities
 Selenium WTP (operational by Year 5)
 diesel fuel storage and dispensing
 permanent operations camp
 temporary construction camps
 sewage treatment plants
 incinerator
 off-site facility:

 new concentrate storage and loadout at the Stewart port facility.

TREATY OPC
FUEL STORAGE AND DISTRIBUTION (PERMANENT AND CONSTRUCTION)
The main fuel storage tanks at the Treaty OPC are sized to store 2,500,000 L, which is
enough for 6 days of fuel requirements. All fuel storage areas will be lined with
containment berms and approved double-wall type tanks. Additional fuel stations will be
located near the Mitchell OPC, truck shop, and at the Sulphurets and Kerr pits. Gasoline
will also be similarly stored where required.

The majority of the fuel requirement is for mining activities at Mitchell; however, some
fuel will be distributed to all Treaty OPC facilities via pipelines from the Treaty Fuel
Storage Tank to the required facilities.

A pipeline from the Treaty Fuel Storage Tank to the train marshalling area will be
installed, with hook-ups for fast fuel transfer directly to the ISO fuel tanks at the
marshalling area. Wherever possible, the ISO fuel tanks will not be removed from the
train cars on the Treaty end.

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 An additional allowance for the ability to fill ISO fuel tanks sitting on trailers next to the
Treaty fuel storage tank is also recommended. This will allow for back-up mobile fuel
transport from the Treaty storage tank to the trains, or to other Treaty OPC facilities.
Cranes in the train marshalling area will load/unload the ISO fuel tanks between the
tractor-trailers and the trains, if required.

All locations of fuel unloading, loading, and dispensing will be designed to have
containment collection facilities and provisions for fuel/water separators.

ADMINISTRATION BUILDING
The pre-engineered administration building will be approximately 1,000 m2 in plan area.

Offices and open plan work areas will be provided for senior management and
administration. There will also be a small lunch room, mud and storage room, meeting
rooms, and an electrical/mechanical room.

ASSAY, METALLURGICAL, ACID-BASE ACCOUNTING, AND GEOTECHNICAL LABORATORY

The pre-engineered laboratory will be located in a separate building near the mill building
at the Treaty OPC. It will be equipped to perform daily analysis of mine and process
samples as well as tunnel muck, site excavation and dam construction materials. The
laboratory will be a 815 m2 single-story structure.

FIRST AID BUILDINGS

The first aid buildings will be pre-engineered structures, located at both the Mine Site and
Treaty OPC, equipped with first aid facilities and emergency vehicles.

CONCENTRATE STORAGE
The on-site concentrate storage facility will be a pre-engineered structure, approximately
2,000 m2 in area. It will have a five-day storage capacity equating to approximately
4,600 t of concentrate. Concentrate will be loaded into trucks at the Treaty OPC and
hauled to a concentrate storage and load out facility at the Stewart, BC port facility.

COLD STORAGE/REAGENT STORAGE BUILDING

The cold storage/reagent storage building will be located at the Treaty OPC and will be
approximately 1,200 m2 in area.

PERMANENT AND CONSTRUCTION CAMPS

The Treaty construction and operating camps will service the PTMA and will provide
accommodation for Treaty Process Plant personnel, camp services personnel, visitors,
and other ancillary personnel during construction and operation. Both camps are located
near the TCAR, approximately 0.5 km west of the Process Plant. To reduce redundancy
and minimize footprint, the two camps will share some components such as water intake,
liquid/sewage waste disposal systems, WTP, etc. The Treaty construction camp will be
built in stages, initially in Year -5. In Year -4, the camp will be built to its maximum
capacity to service the highest activity in Year -3 and Year -2. The Treaty operating
camp is planned to be used for most of the construction period and the entire life of

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 mine; however, after about 20 to 25 years of operation, the camp will be refurbished as
components reach the normal end of their operating life.

The camp components will include: accommodation, office/recreation complex,

kitchen/diner, parking, sanitary sewer, potable water treatment, waste water treatment
and disposal field. A 500 kW diesel generator will provide electricity until the site is
connected to the provincial electricity grid, after which time the generator will be retained
as backup.

WAREHOUSE AND MAINTENANCE BUILDING

An 800 m2 warehouse and maintenance pre-engineered building will be constructed at
the Treaty OPC. It will be located adjacent to the cold storage facility.

Some warehousing facilities will also be constructed at the Mine Site.

MINE SITE
TRUCK SHOP
The Mine Site truck shop will be a pre-engineered building, approximately 9,500 m2 in
area. This facility will be designed to provide facilities for maintenance and repair,
warehouse storage, minor office space, clean and dry areas, and general storage. It will
be located in the lower Mine Site area, near construction camps Nos. 9 and 10.

The truck shop/mine dry will comprise eight maintenance bays, two light vehicle repair
bays, a truck and lube bay, a truck wash bay, a welding and machine shop, an electrical
and instrument shop, a 1,200 m2 storage warehouse with an upper level mezzanine
area, and a dry area including lockers, offices, restrooms, first aid, and emergency
vehicle storage. Waste oil will be disposed of in the refuse incinerator with any remaining
oil removed and disposed of at an approved facility.

ACID-BASE ACCOUNTING AND GEOTECHNICAL LABORATORY

The pre-engineered laboratory will be located in a separate building near the Truck Shop.
It will be equipped to perform daily analysis of tunnel muck, site excavation and dam
construction materials. The laboratory will be a 815 m2 single-story structure.

PERMANENT AND CONSTRUCTION CAMPS

The Mitchell operating camp will be located between Sulphurets and Gingras creeks, just
north of the CCAR. Like the Treaty operating camp, the Mitchell operating camp is
planned to be used for most of the construction period and the entire life of mine;
however, after about 20 to 25 years, it will be refurbished as components reach the end
of their normal operating life. At the end of the mine life, the Mitchell operating camp will
be the base of ongoing operating and maintenance activities for the HDS WTP and hydro-
power facilities, with a reduced workforce.

The camp components will include a helipad, sleeping dorms, parking, fuel storage and
loading area, recreation facility, sewage treatment, fire/fresh water tanks, generator,
laundry, and kitchen/diner. Like the Treaty operating camp, a 500-kW diesel generator

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 will provide power until the site is connected to the provincial electricity grid and will be
retained for emergency backup.

During construction period there will be four construction camps erected in the Mine Site
area: Ted Morris (Camp No. 2), Mitchell Initial (Camp No. 9), Mitchell North (Camp No. 4),
and Mitchell Secondary (Camp No. 10).

Ted Morris Construction Camp No. 2 will be established first to support early works
beginning in Year -6. Camp No. 2 will be deployed at the north end of the Frank Mackie
Winter Access Road with helicopter support and become the headquarters for receiving
equipment and materials arriving via the winter road from the Granduc Staging Area.
Initial Mine Site road and CCAR construction will be based out of this camp.

The Mitchell Initial Camp No. 9 will be built in early Year -5 to support early construction
activities such as mine internal roads, logging, site preparation and rough grading at the
Mine Site. The Mitchell North Camp No. 4 will be built in the same construction year to
support the MTT Mine Site portal, pads, ponds and TWTP No. 6 construction activities in
the Mitchell OPC area. The Mitchell Secondary Camp No. 10 will be built in stages and
reach its maximum size to service the highest activity from Years -4 to -2.

LANDFILLS
Two landfills are proposed to be permitted and developed, one for the Mine Site and one
for the PTMA.

The Mine Site landfill, which will occupy approximately 6.5 ha, will be located within the
Sulphurets laydown area. Any runoff or seepage will be collected and directed to the
WSF and subsequently treated in the HDS WTP. A fresh water diversion will be
constructed upslope of the proposed landfill site.

The PTMA landfill, occupying approximately 8.4 ha, will be located near the Treaty
operating camp. Fresh water will be diverted around the site, and runoff from the landfill
will be managed along with other contact water from the Treaty OPC. The landfill will also
include an area for storage of contaminated snow from the Treaty OPC winter snow
removal activities.

Each landfill will include a land farm. The land farms will accept contaminated soils from
spill clean-ups and leaks, while the landfill will be used to dispose of non-inert, dry
industrial, and forestry waste.

18.8 SEWAGE
Seabridge contracted McElhanney to design each construction and operation camp for
the Project in accordance with the requirements of BC laws and regulations for industrial
camps (e.g., Municipal Wastewater Regulation [MWR; BC Reg. 87/2012] of the
Environmental Management Act [2003], Sewerage System Regulation [BC Reg.
326/2004], and Sewerage System Standard Practice Manual [BCOSSA 2007]). Each
camp location was field checked, and the Project baseline data on soils, vegetation,

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 groundwater quality, and water quality were used to design the wastewater treatment
system. Each wastewater treatment system design is specific to ground conditions at the
camp location and the water quality of the receiving environment.

The wastewater treatment system installed at the various camps will treat the anticipated
maximum daily flow through a variety of processes to meet a secondary level of
treatment as defined in the Municipal Wastewater Regulation (MWR) (BC Reg. 87/2012)
of the Environmental Management Act (2003) for camps with occupancy greater than
100, or Type 3 effluent quality as defined in the Public Health Act (2008) sewerage
guidelines for camps with occupancy less than 100. In general, the following treatment
processes will be supplied for all construction and operating camps in accordance with
BC laws and regulations (e.g., MWR [BC Reg. 87/2012], Sewerage System Regulation
[BC Reg. 326/2004], and Sewerage System Standard Practice Manual [BCOSSA 2007]).
Camps will include treated effluent storage and sludge digestion and dewatering, or a
recirculating loop for nitrogen removal, except for camps with an occupancy of 100 or
less. Additionally, the following will be submitted for each camp: Water System
Application for Construction, Water System Operation and Maintenance Plan, Wastewater
System Operation and Maintenance Plan, and a combined Emergency Response Plan for
the Water and Wastewater Systems, in accordance with the appropriate regulations. The
wastewater treatment system processes will include:

 screening
 flow equalization
 primary settling/primary air flotation (gravity separation)
 aeration tank (bio-chip reactor)
 secondary dissolved air flotation (gravity separation)
 effluent filtration
 disinfection via ultraviolet or chlorine
 treated effluent storage
 sludge digestion and dewatering
 recirculating loop in the sewage treatment plant to promote nitrogen removal.

18.9 COMMUNICATIONS SYSTEM

Permanent communications utilizing fibre-optic cables will be installed over the existing
NTL, and the new 30 km spur transmission line to the Treaty OPC. Installation of fibre-
optic cable on site will also allow for the installation of dedicated cellular service.

A fibre optic communication system will be installed in conjunction with the power
distribution system in both the Treaty OPC and the Mine Site. A fibre-optic cable has
been included in the MTT to provide communications between Treaty OPC and the Mine
Site.

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 An ultra-high frequency (UHF) radio system will be used for mobile communications in
both the PTMA and the Mine Site. Base stations and repeaters will be installed as
necessary on ground and inside tunnels.

Treaty OPC wired telephone service will be provided by a Voice over Internet Protocol
(VoIP) system. A local cell phone system is also planned, as is satellite television for the
camps.

In addition, uninterruptible power supplies will be used to provide backup power to

communication systems and critical control systems to facilitate orderly shutdown of
process equipment and to back up computers and control systems.

18.10 FRESH AND POTABLE WATER SUPPLY

Fresh and potable water for the Treaty OPC will be supplied from nearby wells to an
elevated storage tank approximately 12 m in diameter and 9 m in height. Fresh water
will be used primarily as:

 fire water for emergencies

 cooling water for mill motors, mill lubrication systems and reagent preparation
 the potable water supply.

By design, the fresh water tank will be full at all times and will provide at least two hours
of fire water in an emergency.

The potable water from the fresh water source will be treated (chlorination and filtration)
and stored in a covered tank prior to delivery to various service points.

Fresh and potable water for the Mine Site will be supplied from nearby wells as well.

18.11 POWER SUPPLY AND PRIMARY DISTRIBUTION

Power generation and transmission utilities in BC are regulated by the British Columbia
Utilities Commission (BCUC), acting under the Utilities Commission Act. BC Hydro
generates the majority of power in BC, although there are an increasing number of
private, IPPs. BC Hydro owns and operates the major transmission and distribution
system in BC and is the electric utility that would serve the Project via the newly
constructed NTL.

The interconnection capital cost for the Project will be as set out in a facilities agreement
(the Facilities Agreement), an arrangement approved by the BCUC in January 1991,
pursuant to Order G-4-91 that sets out the rights and obligations of BC Hydro and the
customer for construction, ownership, and operation of the facilities necessary for
electric service. The Facilities Agreement will be in accordance with the Project Facilities
Study carried out by BC Hydro. A draft copy of the Facilities Study has been issued by BC
Hydro.

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 NORTHWEST TRANSMISSION LINE
The 344 km long, 287 kV NTL runs from the Skeena substation near Terrace, BC, to a
new substation near Bob Quinn Lake (Figure 18.25). This new transmission line was
commissioned in the summer of 2014 and currently serves the AltaGas Forrest Kerr
Hydroelectric Facility and the Red Chris Mine. A tap from this transmission line will
service the Project.

Due to an overrun in the construction cost of the NTL, BC Hydro Tariff Supplement TS37,
as approved by the BCUC, was put in place requiring NTL customers to share in the
overrun cost. In accordance with TS37, based on a Project contract (peak) demand of
200 MVA, the required contribution will be just over Cdn$209 million. This amount is
separate from system reinforcement and is a required cash contribution. Payment of the
tariff is not due until the start of commercial production, and BC Hydro offers the option
of spreading the payments out over five years, with an applicable finance charge. This
required cost contribution is included in the Project sustaining capital costs.

Figure 18.25 NTL Project Map

Source: BC Hydro

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 TREATY CREEK SWITCHING STATION
BC Hydro is responsible to deliver power from the transmission system to a customer at
the point of delivery (POD). The customer is responsible to bring power from the POD to
their site. For the Project, the POD will be the Treaty Creek Switching Station. The KSM
site will take electrical service via a 30 km long, 287 kV line extension from the Treaty
Creek Switching Station, to be located on the NTL adjacent to Highway 37, approximately
18 km south of Bell II. This installation will also be in the vicinity of the Treaty Creek
Access Road junction with Highway 37. Metering will also be located at this point. The
Treaty Creek Switching Station will form part of the BC Hydro system and will be
constructed, owned, and operated by BC Hydro. BC Hydro has completed site selection
and preliminary design.

Seabridge previously reimbursed BC Hydro for the cost of installing transmission line
dead end structures when the NTL was constructed, as required to facilitate the
connection of the of the proposed Treaty Creek Switching Station into the grid.

The power supply facility infrastructure will include BC Hydro System Reinforcement and
the Basic Line Extension, which is the circuit breaker and metering at the POD. It is not
the transmission line to the Project site. Construction of the Treaty Creek Switching
Station, as per the BC Hydro Facilities Study, will require a direct cash payment from the
Project to cover a large part of the cost of the installation that is classified as the Basic
Line Extension. This cost is included in the KSM capital cost estimate. The remaining
station cost is classified as System Reinforcement and is not a project capital cost.
However, Tariff Supplement (TS) No. 6 (TS 6) Clause 5 (c) “Offset” requires that the
customer provide bonding for up to seven years, such that BC Hydro is assured of
receiving enough revenue from the Project to justify the capital expenditure. Security is
required in the form specified in TS 6 Clause 13 and in the amount as per Clause 5(b).
The foregoing bonding and charges are set out under the tariffs and are not negotiable.
BC Hydro will return part of the security each year as the offset, based on power billing,
reduces the required bonding. The amount of the bonding is not included under the
direct project capital cost budget, but is otherwise accounted for in the Project
economics. An important point to note is that as per the tariffs, the customer must pay
the actual final cost of construction, not the amount estimated by BC Hydro in a Facilities
Study.

BC Hydro is responsible for obtaining all approvals and permits for the Treaty Creek
Switching Station. A formal environmental assessment of the Treaty Creek Switching
Station under BC’s environmental assessment process for reviewing major projects is not
required.

The Treaty Creek Switching Station does not require long delivery items such as high-
voltage power transformers. The in-service date will depend on the time of year a power
supply agreement is signed; however, the engineering and construction would not require
more than three years and could be expedited.

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 TRANSMISSION LINE EXTENSION TO KSM
The voltage selection for the proposed 287 kV transmission line extension for the Project
was based on the 287 kV transmission voltage selected for the NTL. A review of the
technical requirements to serve a load larger than 150 MVA confirmed that stepping the
voltage down to a lower level is not technically acceptable nor economic.

The Project will be responsible for the construction and operation of the transmission line
extension, in accordance with the established BC Hydro tariff requirements. Line
construction will utilize steel monopoles, such that the line can be generally run in the
TCAR right-of-way, beside the road, thus largely eliminating the requirement for a
separate access route.

The 287 kV transmission line from the BC Hydro Treaty Creek Switching Station will cross
Highway 37 and the Bell-Irving River, then closely follow the mine access road along the
north side of Treaty Creek for approximately 12 km to a deviation point where the line
transitions from following the TCAR, to following the South Diversion Cut-off Ditch, up to
Substation No. 1 at the Treaty OPC. Steel monopoles are ideal for use where a
transmission line is to be constructed next to a road and in areas of high snow fall. To
protect against avalanche damage, several structures will be mounted on concrete piers,
to raise the pole bases above the avalanche flow.

As may be required to meet Project schedules, the construction of the 287 kV line
extension from Treaty Creek to Substation No. 1 at the Treaty OPC could logically
commence in the second year of the Project construction schedule, after the access road
is complete. Construction of the line could easily be completed in one summer and fall
construction period, and Substation No. 1 could be completed by the end of Q1 of the
following year.

The environmental assessment for the 30 km section of transmission line from Treaty
Creek to Substation No. 1 was included in the Project environmental assessment
process; therefore, approval is in place. Land tenure has been obtained for the
transmission line right-of-way, from the Treaty Creek Switching Station to Substation
No. 1 at the Treaty OPC.

The transmission line includes a fibre optic cable connection to the BC Hydro NTL fibre-
optic cable system as required by the utility. This fibre connection will also carry the
general communications to site for the permanent operations phase.

The transmission line land tenure has been obtained. No additional (specific) permits will
be required other than the general mine permitting. The cost of right-a-way clearing is
included in the road clearing budget. Further information can be found in the Treaty
Creek Transmission Line Report and the Treaty Creek Transmission Line Clearing Criteria
Report located in Appendix I1 and I2, respectively.

SYSTEM STUDIES
BC Hydro performs studies to determine the cost, method, and timing of transmission
system customer interconnections. Seabridge first commissioned a BC Hydro System

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 Impact Study for the Project in 2009 to confirm the technical viability of the
interconnection. Subsequently, several updates were commissioned to account for the
construction of the NTL and several project changes, including changes to the Project
access route from Highway 37. Seabridge also commissioned a Facilities Study, which is
the next step in the interconnection process that defines interconnection costs. Due to
Project changes, several draft editions have been issued. Currently, BC Hydro is making
minor updates to the 2015 Facilities Study issue, based on technical changes resulting
from their operational experience with the new NTL transmission line. Upon completion
of this update, a Facilities Agreement and an Electricity Supply Agreement may be signed,
which will finalize power supply to the mine.

System load flow studies have been performed by Project consultants using system
analysis software to confirm process plant and mine power system voltage control from
no load to full load. System voltage stabilization is based on switched reactors to control
light load over voltages due to 287 kV transmission line and 138 kV cable capacitance,
and also assumes power transformers have automatic tap changers and that there is
automatic control of the process plant synchronous ball mill drive motor excitation
systems for instantaneous voltage control, as requested by BC Hydro. Substation No. 1
also includes a ±20 MVA static var compensator, as identified by the BC Hydro System
Impact Study as required, to ensure system transient stability.

The Project consultants carried out a preliminary short-circuit study for the KSM plants,
based on the proposed line extension from Skeena, as required for prefeasibility design
and cost estimates. The design short-circuit levels were determined to be:

 Plant Main Substation No. 1 (25 kV bus bars)

 momentary: apply American National Standards Institute (ANSI) factors

(Appendix A of short-circuit study)
 required interrupting: 23 kA minimum
 Mitchell Substation No. 2 (25 kV bus bars)

 momentary: apply ANSI factors

 required interrupting: 18 kA minimum.

Service from the Skeena Substation to the Project via the NTL will be delivered over a
single-circuit line. BC Hydro service studies indicate very high reliability for single-circuit
high-voltage transmission lines, with few outage-hours in a year. Occasional service
interruptions and planned maintenance outages can be expected and are considered
normal for mining projects.

ELECTRIC UTILITY REQUIREMENTS, TARIFFS, AND COST OF ELECTRIC POWER

The electric service to the Project (including all terms and conditions such as rates and
metering requirements, connection charges, and many aspects of the KSM connecting
transmission line) will be in accordance with the latest edition of BC Hydro Electric Tariffs,
in particular:

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  Rate Schedule 1823 “Transmission Service – Stepped Rate” effective April 1,
2016
 Rate Schedule 1901 – Deferral Account Rate Rider
 BC Hydro Electric Tariff Supplement No. 5 (TS5) Agreement for Customers
Taking Electricity under 1821 (1821 is now 1823) (TS5 is a template for the
Electricity Supply Agreement with the format set as per the tariffs and is not
subject to change)
 BC Hydro Electric Tariff Supplement No. 6 (TS6) Agreement for Transmission
Service Customers (TS6 is a fill in the blanks template for the Facilities
Agreement with the format set as per the tariffs and is not subject to change)
 BC Hydro Electric Tariff Supplement No. 37 (TS37) covering the required NTL
“overrun” Contribution
 BC Hydro Electric Tariff Supplement No. 74 (TS74) Customer Baseline Load
Determination Guidelines.

BC Hydro Rate Schedule 1823 is a two-tier schedule, nominally with 90% of the
Customer Baseline Load charged at economical Tier 1 energy rates, and the last 10%,
plus all power above the Customer Baseline Load, charged at costly Tier 2 rates. This
system is designed to encourage energy conservation, as consumption reductions due to
energy conservation measures are applied against costly Tier 2 power. BC Hydro, under
their Power Smart program for demand side load control, offer incentives to transmission
customers to reduce energy consumption, and for new customers incentives are given for
energy-efficient plant design. Further information can be found in the Cost of Electric
Power, 2016 Report located in Appendix I7.

In Appendix I7, the Project cost of electric power delivered to site is shown on a per
kilowatt hour basis. The calculated cost is below regular rates due to a large reduction or
elimination of costly Tier 2 energy in accordance with an efficient plant design as
accepted by BC Hydro’s “Power Smart” program. Thus, HPGR energy savings have an
impact far greater than just the energy savings in the grinding area. A separate report to
BC Hydro has confirmed that the use of HPGRs for the Project qualifies for these
incentives.

TS6 currently requires potentially large non-refundable 500 kV transmission and

generation system reinforcement charges for projects with a Contract Demand of over
150 MVA. This would apply to the Project and the required capital contribution would
apply to the entire load, not just the load that exceeds 150 MVA. The Contract Demand
(peak load) for the Project is currently estimated to be well above 150 MVA, even
considering that energy conservation measures will be implemented. Seabridge currently
has an application before BC Hydro for an increase in the Contract Demand from
150 MVA to 200 MVA, with the expectation that the generation reinforcement charges
will be set at zero and 500 kV system reinforcement charges will only apply to the
additional 50 MVA of Contract Demand, not the entire load, reflecting the state of the
current system. However, as this is uncertain, and a determination will not be made until
after publication of this study, a combustion turbine has been allotted for in the

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 estimates for peaking purposes, as this is far more economical than the application of
the currently applicable reinforcement charges (TS6).

The cost of power for the Project, delivered to the 25 kV bus bars of the Treaty OPC, has
been estimated as Cdn$0.062/kWh, including applicable taxes and energy cost savings
due to BC Hydro’s Power Smart program. The Project power cost includes the
transmission line losses from the metering point at the Treaty Creek Switching Station,
plus Substations No. 1 and No. 2 transformer losses and peaking power cost.

The KSM power cost calculation takes into account reduced rates due to BC Hydro
Demand Side Management (DSM) and associated Power Smart initiatives for energy
conservation measures designed into new plants (such as using HPGR grinding in lieu of
SAG milling). Such measures, as may be certified by BC Hydro, serve to reduce the
standard 10% of energy under the two-tier 1823 Rate Schedule that would fall under the
costlier Tier 2 category. If HPGR grinding and similar energy conservation measures were
not to be implemented, there would not only be greater energy consumption, but the cost
of electric power for the entire project would increase.

Each year on April 1 (the start of their fiscal year), BC Hydro sets new rates that are
applied in accordance with the tariffs, subject to BCUC approval. Details of the electric
power cost calculation are included in Appendix I7. This report also includes the
maximum increases that BC Hydro will apply for in the next several years. Rate increases
in the past several years have been significant in order to finance required general
system upgrades; however, the maximum rate increases for the next several years are
quite modest.

BC Hydro currently has a Rate Design Application (RDA) before the BCUC. Seabridge has
attended several BC Hydro workshops regarding the RDA and proposed changes for
Transmission Service customers, and has reviewed what has been submitted to the
BCUC to date. BC Hydro has proposed no changes to Rate Schedule 1823. This is
discussed in the RDA (Section 7), which is available on the BCUC website. Seabridge
understands that any changes to the transmission tariffs would not be detrimental to the
Project and that existing applications will be grandfathered in any event. Any BC Hydro
proposals relative to TS6 have been deferred until a future application in 2017 (RDA
Module 2) and are not part of the 2015 RDA.

TREATY PLANT MAIN SUBSTATION NO. 1

The KSM 287 kV step-down Substation No. 1 will be located at the Treaty OPC and will be
constructed and owned by Seabridge in accordance with BC Hydro policy, which is also
the most economical solution. This substation is a critical installation for the Project.
The substation equipment has been sized based on the latest project load list.
Redundant transformer capacity was included in the design. The substation will be a GIS
switchgear) design, utilizing 138 kV and 287 kV gas insulated circuit breakers and bus
bars, allowing a compact design contained in a building adjacent to the Treaty Process
Plant. The circuit breakers will use point-on-wave switching as required by BC Hydro.
Connections to transformers will use high-voltage solid dielectric cables.

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 The substation will include:

 three transformers, each of the three winding type oil filled 75/100/125 MVA,
ONAN/ONAF1/ONAF2 step down power transformers, with automatic on-line tap
changers
 six 287 kV GIS circuit breakers
 seven 138 kV GIS circuit breakers
 one 287 kV switched reactor for compensation of the incoming 287 kV line, to
limit Ferranti effect over voltages
 two 138 kV switched reactors at the OPC end of the 24 km long, 138 kV cable to
compensate for cable capacitance, thus controlling bus voltage
 25 kV grounding transformers and resistors.

The three transformers included in Substation No.1 will be installed in a concrete vault.
They will provide redundancy, allowing one transformer to be out of service. Shipping
restrictions to the site were taken into account when sizing the transformers. The 138 kV
tertiary windings will be connected to the 24 km long tunnel cables feeding the Mitchell
(open pit mine) area Substation No. 2. Space has been allocated for a future fourth
power transformer.

Substation No. 1 will also include a line-up of 25 kV metalclad or GIS switchgear, as

required for power distribution around the Treaty OPC. The secondary distribution voltage
for the Treaty OPC will be 25 kV.

Substation No. 1 does not include harmonic filters. If these are required by harmonic
generating plant loads, they would be best located at the process plant near the
harmonic sources, and would be included in the process plant budget.

138 KV CABLE
Substation No. 1 will be interconnected with Substation No. 2 by three, 138 kV, single-
core, 300 mm2, cross-linked polyethylene (XLPE) solid dielectric power cables suspended
from the back (roof) in one of the MTT that will run between the two plant sites. The
300 mm2 (600 kcmils) conductor size quoted is the minimum physical size that vendors
typically manufacture at 138 kV (due to the electric field gradient at the conductor). This
is a more than adequate capacity to carry any anticipated load, including allowance for
the cable charging current. In order to limit induced sheath currents, the cable sheaths
will be “cross bonded”, which is the normal design for high-voltage, high-current, single-
core cable installations. Adequate (significant) space must be allowed in one of the train
tunnels for these cables.

MITCHELL SUBSTATION NO. 2

The 138 to 69 kV - 25 kV Substation No. 2 is also critical infrastructure for the Project.
As an alternative to a standard 138 kV air-insulated outdoor substation, Substation No. 2
is planned to be a GIS installation. This is a very compact design, requiring only a fraction

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 of the space of a conventional air insulated high voltage substation and allows for the
total installation to be included in a reinforced concrete building that provides a high
degree of protection against geo-hazards such as avalanches. It also eliminates
hazardous high-voltage overhead lines in the vicinity of the Mitchell OPC and requires
much less plant area. The substation includes:

 two 138 - 69 - 25 kV, 55/73/90 MVA ONAN/ONAF1/ONAF2, oil filled power

transformers with automatic on-line tap changers (two, 3 phase units are
provided for redundant capacity, with space provided for a third unit to cater to
future load growth)
 six 138 kV GIS circuit breakers and associated bus work
 two switched 138 kV reactors to compensate 138 kV cable capacitance
 six 69 kV GIS circuit breakers connecting to site 69 kV power distribution system
 grounding transformers and resistors
 a line-up of 25 kV metalclad or GIS switchgear for site local power distribution.

SITE POWER DISTRIBUTION

Site power distribution in the mine area from Substation No. 2 will be by 25 kV cables
and overhead pole lines locally and by 69 kV overhead pole lines to feed large loads at
more distant facilities where modular substations will step the 69 kV down to the local
distribution voltage. The relatively long distances and high initial and future pumping
loads require 69 kV distribution to transmit the power and limit voltage drop.

MINE POWER
Power to the Mitchell open pit itself will be provided by local 25 kV overhead distribution
lines. The required pit 25-7.2 kV portable substations (also serving as pit switch-houses),
and trailing cables for the 7,200 V pit mobile electric shovels and drills, are included in
the electrical project budget. 7.2 kV to 600 volt portable substations are also included
for pit dewatering. Similar installations are included in sustain capital or the Sulphurets
and Kerr open pits.

CONSTRUCTION AND STANDBY POWER

Modular diesel generator sets will be provided to supply construction power for tunnel
driving, camps, temporary water treatment plants, plant construction sites, and other
initial construction-related facilities. The capital and operating costs of these facilities
plus local distribution including step-down transformers and overhead pole lines have
been included in Project indirect costs (not in the power supply budget). Fuel and
operating costs for construction power are also accounted for in the construction indirect
costs. The power distribution costs for supply and installation of cable and electric panel
boards within the various tunnels are included in tunnelling costs.

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 Any additional costs for moving equipment and fuel to site during the early stages of the
Project, either by helicopter or by a glacier road, are included elsewhere in the capital
cost estimate and are not in the construction power budget.

The construction generating stations are modular, complete with switchgear, and
designed for PLC automatic unattended operation. Environmentally approved double-
walled fuel storage tanks and associated piping are included for each power station.
However, bulk long term fuel storage for power generation during the construction phase
at the Mitchell facilities was included elsewhere in the Project budget. It is to be noted
that fuel storage and use for tunnel and surface diesel powered construction equipment
is not included in this budget.

Several of the construction gensets will be retained after initial construction is complete
and reconfigured to serve as future standby/emergency generation for the mine, process
plant, and accommodation centres. The cost to refurbish construction gensets and
reconnect this equipment for standby service in the permanent plant has been included
in the process plant electrical budget.

The estimates include the purchase rather than rental of construction gensets. The
relatively very long KSM construction period will make construction genset rental
uneconomic.

ENERGY RECOVERY AND SELF GENERATION

The Project presents several opportunities for energy recovery from process flows, as well
as power generation from mini-hydro projects, taking advantage of water flows that must
otherwise be diverted around the mining operations. As these energy recovery and mini
hydro schemes, to a large extent, make use of facilities otherwise required for the mining
project, they are generally economically attractive and will also reduce the total energy
consumption of the Project. The value of the generated power would either be at the BC
Hydro rate schedule 1823 Tier 2 energy (set at BC Hydro’s marginal cost of generation)
valued at Cdn$0.0892/kWh as of 2016 or would be sold back to the utility under the
Standing Offer Program for small projects, with the mine acting as an IPP generator. The
value of electricity in this region under the standing offer program would be just over
Cdn$0.10/kWh. In either case the value of generation would be considerably higher
than the Project purchased power, the price of which is lower since it is largely “heritage”
power generated by older BC Hydro facilities that are already amortized.

All of the listed energy recovery plants will be located within the KSM mining lease. The
energy recovery plants recover energy from process plant flows. All environmental
matters are covered by the process plant environmental review. The Mitchell diversion
scheme utilizes diverted water flows to generate power. The environmental assessment
for these plants is covered in the overall KSM mine environmental assessment.

All of the generating plants, similar to small IPP hydroelectric plants, will operate
unattended and will be automatically controlled by PLC systems. The locally generated
power will be fed into the 25 kV mine distribution power lines. Each facility will have
revenue class metering equipment as required by BC Hydro in order to determine the

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 output of the plants for payment purposes. BC Hydro regulations for power purchase
programs such as their Standing Offer Program allow generators to be “behind” customer
loads, which applies to the Project.

The generation projects included in this study are summarized in Table 18.17.

Table 18.17 Mini Hydro and Energy Recovery Power Generation

Installed Net Annual
Project Capacity Generation
Name Type (kW) (kWh) Machines
WTP* Energy Recovery 9,000 23,773,000 Pelton Turbines
Tailings Energy Recovery 1,194 7,794,060 Pumps as Turbines
Mitchell Diversion* Mini Hydro 7,500 17,638,000 Pelton Turbine
McTagg Stage 2 Diversion Mini Hydro 8,000 32,981,000 Pelton Turbine
(Years 10 to 15)

McTagg Stage 3 Diversion* Mini Hydro 12,000 45,242,000 Pelton Turbine

and **(Year 15 onwards)
Notes: *Operation continues after mine closure.
**McTagg Stage 3 replaces Stage 2.

Further information is available concerning energy recovery and mini-hydro projects in

Appendices I3, I4, I5, and I6.

18.12 TREATY OPC AND MINE SITE SECONDARY ELECTRICAL POWER DISTRIBUTION
AND UTILIZATION
MINE AND PLANT POWER CONSUMPTION
The total mine and process plant annual energy consumption is estimated to be
1,333 GWh based on the Tetra Tech (HPGR) load list for a 130,000 t/d operation valid
on average for Years 1 to 5, based on the currently proposed blending or ore. This
equates to an average annual load of 152 MW. With a load factor (LF) in the range of
0.85 as typical for a project such as KSM, the peak load (30-minute demand) is
estimated as 179 MW. The plant running (normal every day) load is estimated to be
167 MW, again based on norms for this type of mine and milling operation.

The required utility supply will be reduced in the summer and fall by self-generation from
energy recovery and mini-hydro projects. During the winter low stream flow conditions,
the average self-generation will be almost zero. To prevent the Project demand from
exceeding the 150 MW trigger point for generation reinforcement, the proposed peaking
combustion turbine, located in at the Treaty OPC, will be operated. This has been
included in the Project power capital and operating costs.

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 MAIN SUBSTATIONS
There will be two main substations. Main Substation No. 1, and Substation No.2,
described in Sections 18.11.6 and 18.11.8, respectively.

POWER DISTRIBUTION – TREATY PLANT MAIN SUBSTATION NO. 1

The Treaty Substation No. 1 will contain three main 287-138-25 kV, 75/100/125 MVA
transformers with automatic on-load tap changers. Each transformer will feed a line-up
of 25 kV switchgear. The 25 kV line-ups will be connected by a normally-open bus tie
circuit breakers. There will be a total of five main and tie breakers and 35 feeder circuit
breakers connected to distribution feeders. These feeders will distribute power
throughout the Treaty OPC. The 25 kV system will be high-resistance grounded.

BALL MILLS
The Treaty process plant ball mills are major power consumers. Each of the four ball mills
(rated 14,000 kW each) will be fed via dedicated 25 kV feeders and step-down
transformers to 13.8 kV. The mills will each be equipped with two, 10,000 hp, low-speed
“Quadratorque” fixed speed synchronous motors, directly driving mill dual pinions via air
clutches, as has been used in the industry for many years.

STEP-DOWN TO 4.16 KV
The ball mills will be fed at 13.8 kV. Other large fixed speed motors (generally those
rated 250 hp and greater) and large variable speed drives (generally those rated over
400 hp) will be fed at 4,160 V. The 4,160 V supply will be derived from 25 kV to 4,160 V
outdoor liquid filled step-down transformers. Redundancy will be provided by utilizing
sets of two transformers, each feeding a 4,160 V metal clad switchgear line-up with the
two line-ups connected by a tire breaker that may be closed if one of the transformers
fails or must be taken out of service. Typical motors in this group include:

 cone crushers
 large conveyors
 thickener underflow pumps
 cyclone cluster pumps complete with variable frequency drives (VFD)
 four HPGR units, each complete with 2 by 4,000 hp dual drives with VFDs.

STEP-DOWN TO 600 V
Motors and other loads below 250 hp will be fed from one of several 600 V systems.
Generally, these systems will consist of liquid insulated 25 kV to 600 V step-down
transformers, feeding two line-ups of 600 V power distribution centres (with tie breaker),
which in turn feed a series of 600 V motor control centres (MCCs). General power and
lighting will also be fed from the 600 V system.

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 REMOTE LOADS
Remote Treaty OPC loads will be served by 25 kV overhead lines. Examples of remote
loads include:

 fresh water pumping

 TMF return water and seepage pumps
 ancillary buildings.

MITCHELL SUBSTATION NO. 2

Mitchell Substation No. 2 will be fed by 138 kV cables running through the MTT from
Treaty Substation No. 1. Substation No. 2 will have two, 138-69-25 kV, 55/73/90 MVA
ONAN/ONAF1/ONAF2, oil-filled power transformers with automatic on-line tap changers,
with space for a third unit. Thee transformers will feed a lineup of 25 kV metalclad or GIS
switchgear. The 25 kV switchgear will be divided into two sections with main incoming
breakers and a tie breaker. A total of 14 feeder breakers will be provided to feed the
Mine Site and the MTT train system. The 25 kV system will be high-resistance grounded.
Section 18.11 includes a detailed description of Main Substation No. 2.

POWER FEED TO PITS AND PRIMARY CRUSHER

The Mitchell primary crusher will be fed from the substation by a 25 kV cable. The
Mitchell pit overhead power line will be fed from a section cable leading into the
substation.

The mining electric shovels and drills will be served at 7.2 kV via portable 25 to 7.2 kV
step-down substations fed from the perimeter pit pole line. The estimates include
appropriate lengths of trailing cable and couplers. 7.2 kV to 600 V portable step-down
substations and trailing cables are also included for pit dewatering.

A 69 kV GIS Circuit breaker and cable will feed an overhead pole line supplying the truck
shop, WTP, explosives facility, and also connecting to the mini hydro and energy recovery
power plants. There will be local substations stepping down from 69 kV to the local
distribution voltage.

REMOTE LOADS
Remote loads will be served by the 69 kV sub-transmission overhead lines. Examples of
remote loads include:

 truck shop
 permanent camp
 WSD pumping.
 HDS WTP and Selenium WTP
 explosives magazine.

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 ANCILLARY SYSTEMS
Ancillary systems to be provided under electrical include:

 emergency power
 general power and lighting (indoor and outdoor)
 electrical heating
 heat trace
 fire alarm
 communications
 CCTV.

18.13 PERMANENT AND CONSTRUCTION ACCESS ROADS

BACKGROUND
Seabridge retained McElhanney to complete a study of permanent and construction road
access options to the KSM zones and mine facilities. Tetra Tech was retained to study
the proposed construction period Frank Mackie Winter Access Road from Granduc.

Various alignments for proposed access road networks to the mine facilities have been
considered. McElhanney’s field work commenced in 2009 and continued through the
summer of 2012 in assessing the various options.

Current proposed permanent access roads include the existing 59 km long resource
access route from Highway 37 to the former Eskay Creek Mine and camp facilities. The
proposed 35 km long CCAR will commence near the southern limit of this existing road,
and extend south then west to the proposed Mine Site.

The Treaty Creek Valley road network provides access to the Treaty OPC, the TMF, and
the MTT Saddle Area. It will include a 30 km two-lane access route from Highway 37 to
the Treaty OPC, TMF, and east portal of the MTT, and include portions of the TCAR and
NTAR.

The TCAR will be constructed as a two-lane road from Highway 37 to approximately

km 17.9. Beyond km 17.9, the TCAR will be constructed as a single-lane road, extending
further up the Treaty Creek Valley to provide access to the MTT saddle area. The total
road length from Highway 37 to the MTT saddle area will be approximately 33 km.
Beyond there, consideration is also given to a potential MTT tunnel adit access road,
extending approximately 3 km further west.

Roads known as the lower and upper NTAR will be built to the north, up the North
Treaty/Teigen Creek Valley, to access the Treaty OPC. They will intersect with the TCAR at
km 16.9 and km 17.9, respectively, and will be constructed at different times during the

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 life of the mine. These will be two-lane roads and each will extend approximately 12 km
to the north, accessing the Treaty OPC and the TMF.

Select sections of each road will parallel the drainage cut-off ditch in the North
Treaty/South Teigen Creek Valley. Another single-lane (4 m wide) road, approximately
4 km in length, will provide additional access for construction and maintenance to the
south end of the above mentioned drainage cut-off ditch.

McElhanney’s full report relating to current access road options is contained in

Appendix J.

OBJECTIVES AND METHODOLOGY

Utilizing LiDAR survey data acquired in summer 2008 and fall 2011, and the resulting
digital elevation models developed, the preferred preliminary access routes identified by
Seabridge and McElhanney were defined on the base mapping.

The preliminary road alignments were subsequently located in the field using GPS, and
marked with survey flagging. The objective was to locate and map the most appropriate
road alignment for each route based on design standards established by the Project
Team.

The routes were assessed in the field and adjusted as deemed appropriate. Often
several preliminary lines were investigated in order to achieve the preferred road
location. Selecting the ultimate road locations is an iterative process involving both field
and office design. Based on the preliminary layout, terrain information was gathered,
along with bridge and major culvert crossing information. The originally flagged
centerline provided a base for follow-up environmental and geotechnical assessments.

Based on the field reconnaissance, design standards, and associated surveys and
preliminary assessments/input by other sub-consultants; preliminary road design plans
and profiles, conceptual bridge and stream crossing structure designs, and construction
cost estimates were prepared. Engineering assessments were conducted in conjunction
with available geotechnical and environmental studies of all proposed routes. The field
reconnaissance and bridge site surveys confirmed the accuracy of the LiDAR data.

From 2009 through 2012, consultants BGC and Rescan (now ERM) conducted further
geotechnical and environmental assessments, respectively, on the proposed, and altered
routes. Where appropriate, McElhanney’ QP (Mr. Bob Parolin) accompanied these
consultants in the field to make joint determinations with respect to the most appropriate
locations for specific sections of road. McElhanney worked with these consultants to
optimize the road locations and designs.

All proposed final road locations were marked with survey flagging. Flagging was marked
with survey crew and date information (black felt marker), and locations identified by
real-time kinematic (RTK)-GPS survey methods. Select field station references are now
indicated on the road plan/profile design drawings for cross reference.

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 Work included gathering of detailed information to be utilized in refining the design(s),
including soils, vegetation, potential borrow/waste areas, drainage culvert requirements,
and other relevant information.

Stream crossing surveys were completed on “smaller” tributaries. Generally, this

includes any stream with an estimated 100-year peak flow of 6.0 m3/s or greater.
Details for all such structures were completed to satisfy the requirements of the Ministry
of Forests, Lands and Natural Resource Operations (MFLNRO) for the Special Use Permit
(SUP) applications.

Preliminary stream crossing structure designs have been completed for all sites requiring
bridges or major culverts.

Road designs have been completed taking into account other mine support
infrastructure, and with consideration for construction and long term haul requirements.

ROUTE DESCRIPTIONS
The current proposed access roads include the:

 Eskay Creek Mine Route (existing – upgrade as required)

 CCAR
 TCAR
 lower NTAR (early mine life)
 upper NTAR – Phases 1 and 2 – (early and mid-mine life)
 Cut-off Ditch Access Road
 MTT Adit Access Road
 TMF Service Roads
 Frank Mackie Winter Access Road (design by Tetra Tech).

Currently proposed primary road locations are shown in Figure 18.1 and Figure 18.2.

The current updated route descriptions, including relocations of the road alignments, are
provided in the following sections.

ESKAY CREEK MINE ACCESS ROUTE

Seabridge plans to use portions of the existing Eskay Creek Mine Access Road, linking
Highway 37 to the proposed CCAR.

This road was constructed in the early 1990s to provide access to Barrick Gold’s Eskay
Creek Mine. The road commences at Highway 37, south of the Bob Quinn Forest Service
Road, and follows the Iskut River Valley west for approximately 37 km to the crossing of
Volcano Creek. The road was originally designed as a single-lane, 5 m wide gravel road,

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 with a nominal design speed of 60 km/h. Substantial portions are built to a nominal 8 m
wide (double lane standard), providing ample passing opportunities.

More recently, the road was used to service construction of the Forrest Kerr, Volcano
Creek, and McLymont Creek hydro-electric developments by AltaGas. Construction of
these developments is now complete.

South of the intersection at km 37.7, the 22 km-long Eskay Creek Spur Road was used
solely for access to the Eskay Creek Mine and camp. The road was constructed as a
single-lane, 5 m wide gravel road, with a nominal design speed of 50 km/h. There are
four single span bridges along this section of road. The road is passable, but upgrades to
three of the bridges, and replacement of one of the bridges will be required.

From Highway 37 to approximately km 4.0 is the Bob Quinn Forest Service Road, and is
owned and maintained by the MFLNRO. A Road Use Permit will be required for
operations over this section of road.

Currently, AltaGas holds the SUP from the MFLNRO from km 4.0 to km 43.3. Barrick
Gold holds the SUP over the remainder to the Eskay Mine Road (km 43.3 to km 59). Use
of this road will be subject to shared access/maintenance agreements.

An overview evaluation of the road condition and its suitability for Seabridge’s
requirements was conducted; findings are summarized in McElhanney (2013).

COULTER CREEK ACCESS ROAD

The CCAR will be constructed as a single lane (6 m surface), radio-controlled road with
pullouts for passing opportunities.

Heading southwest from near the end of the existing Eskay Creek Mine Access road
(approximately 59 km off of Highway 37), this road will follow an existing mine access
road for approximately three or more kilometres towards Tom MacKay Lake. It will then
descend out of the alpine meadows, along the height of land between Coulter Creek and
the Unuk River.

In this area the road traverses some difficult terrain. Much work was done in optimizing
the design and realigning the road in an effort to avoid areas mapped by BGC
(geotechnical consultants) as being potential geohazards, including some Class 4 Hazard
terrain. Realignment efforts also sought to reduce earthwork volumes and minimize
sustained steep grades. Maximum design grades along the road corridor are now 12%.

There are three bridges and two major culvert structures proposed between the start of
the road and the Unuk River crossing at km 20.9. With the exception of the Coulter
Creek crossing, ERM has determined that all other streams are non-fish bearing.

The Coulter Creek crossing at km 17.8 is located near the foot of a historic alluvial fan.
Additional riprap protection and drainage relief has been noted on the design through
this area, though risks of debris flood/flow have been assessed as low.

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 ERM identified and mapped a number of blue-listed ecosystems along the road as it
descends along Coulter Creek to lower elevations. The road and stream crossings were
located to avoid these sensitive ecosystems, and to reduce the impact on fisheries
sensitive zones. The proposed three-span bridge crossing of the Unuk River will be 88 m
in length. The Unuk River is a major crossing and will need to meet the requirements of
the Navigable Waters Protection Act. The current clearance from Q100 flow design levels
to the underside of the main bridge span is estimated at 2.1 m.

Beyond the Unuk River, the route traverses a short section of low-lying wet and swampy
areas and includes a bridge crossing at approximately km 21.5. The road starts to climb
at approximately km 21.7, then climbs steeply through a series of switchbacks from
km 23 to km 25, into the Sulphurets Valley and canyon. This is a difficult section of road,
with very limited options for improvement. Maximum road grades are 12%, reduced
through the switchbacks. Through-cuts have been minimized, but significant sections will
still require full bench cut and end haul to waste. Steep, unstable rock areas to the south
have been avoided.

The road crests at km 25.2 then descends for approximately 1 km, before following the
steep north side of the Upper Sulphurets Creek Valley. Along this section, it traverses
significant sections with steep rock, crosses numerous avalanche paths, and is exposed
to rock fall hazards (km 26 to 31). Again, much of this area requires full bench cut and
end haul to waste. Waste opportunities are very limited along this section.

Engineered structures and avalanche monitoring and control will be required to mitigate
the hazards along this section. Consideration has been given for the construction of six
snow sheds between km 26.5 and km 30.6, with lengths ranging from 50 m to 80 m
(total 370 m allowance). These would be placed only in the most channelized
avalanche/drainage paths. Avalanche monitoring and active control would be used
initially during Project construction and mine start-up. Snow shed protection is optional,
and would be constructed only after the mine has commenced normal operations. Other
passive means of avalanche control, including deflecting berms and retarding mounds,
could be employed, but have not been considered in the design at this time.

Most snow avalanche mitigation would be handled by active measures including

monitoring, road closures, no-stopping zones, helicopter bombing, howitzers, GasEx
exploders, etc. Despite the presence of mountain goats in this valley, it is our
understanding that with appropriate cautions, the latter more pro-active measures could
be used along this section of road.

Beyond approximately km 31.5, the Sulphurets Creek Valley widens considerably and the
road location continues on the north side of the valley to the bridge crossings of Gingras
and Mitchell creeks.

The access road beyond approximately km 33.9 (Mitchell Creek crossing) was aligned to
accommodate the location of the HDS WTP on the bench lands. The alignment extends
approximately 800 m to the southeast of the HDS WTP, avoiding potentially unstable
ground to the south. It turns northeast, and climbs to km 35, where McElhanney’s road

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 design (and SUP boundary) ends. Beyond this point, the road design is determined by
the mine development, and is the responsibility of MMTS.

TREATY CREEK ACCESS ROAD (TO KM 17.9)

The TCAR will leave Highway 37 approximately 19 km south of Bell II, and head west. It
will be constructed as a two lane (8 m surface) all-season road to the junction of the
Treaty Creek and North Treaty Upper road at km 17.9.

Meetings were held between McElhanney, Seabridge, and the provincial Ministry of
Transportation and Infrastructure (MOTI) to discuss and establish a set of design criteria
for the proposed intersection at the Highway 37/TCAR location.

McElhanney completed an assessment of the proposed intersection site based on

current and projected traffic volumes, and relevant design criteria, and concluded that
technically no significant intersection improvements were warranted. However,
subsequent, and on-going dealings and negotiations with MOTI concluded with their
refusal to grant necessary access permits without making some suggested intersection
improvements to increase safety; considering the traffic volumes anticipated, the road
geometry at site, and the potential for winter/icing conditions.

Additional detailed design drawings will be required to meet the Ministry’s final
requirements, prior to construction.

Initially the TCAR will follow a former forestry access road. At approximately km 0.6, a
three-span 119 m long bridge is proposed for the crossing of the Bell-Irving River. There
was a previous bridge installation at this site. Access was gained to MFLNRO files
defining the historical multi-span bridge installation at this site (removed in the 1990s).
Noted previous issues with geotechnical stability of the west bank have been considered
in development of the new bridge design, along with consideration for avoiding the
original bridge pier piling groups.

This is a major river and will need to meet the requirements of the Navigable Waters
Protection Act. Current clearance from Q100 flow design levels to the underside of the
main span is estimated at 3.0 m.

The TCAR essentially follows an existing forestry access road for approximately 4 km.
Significant upgrades will be required. Between approximately km 3.7 and km 5.2 the
road crosses an alluvial fan. MFLNRO expressed concerns regarding the earlier road
location and design, and potential effects of future flow/flood events. Subsequent
correspondence through 2013 resulted in realignment of the road, and other design
changes, to address those concerns.

The proposed road follows the north side of the Treaty Creek Valley. It will generally be
located between the flatter riparian zone below and the steeper avalanche-prone terrain
on the north slope. The proposed road location was kept low on the slope to avoid the
steeper side hill terrain which would require full bench cuts and end haul.

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 Beyond approximately km 8.6, the road will start to climb. From here it will traverse
moderately sloping side hill terrain to approximately km 17. A number of streams are
crossed. Stream crossing structures have been designed to appropriately address fish
passage and road geometry requirements, as applicable. A total of 10 bridges (at
9 sites) are designed between the Bell-Irving major crossing and the future intersection at
km 17.9. Bridge lengths vary from 11 m to 24 m. A general arrangement design has
been completed for one major culvert crossing at km 15.9.

The North Treaty Creek crossing at approximately km 16.3 has the potential for flows to
be shared, or shift between the two channels present. The twin bridge installations (one
on each channel), are each designed to pass the full estimated Q100 flows. The natural
peak flows will be reduced once the planned cut-off ditch along the west slope of the
North Treaty/Teigen Creek Valley is in place to re-direct flows north to Teigen Creek.

Several avalanche chutes will be crossed along this route. No snow shed structures are
being considered along any sections of the Treaty Creek access roads for snow
avalanche control. Deflection berms and retarding mounds may be considered where
appropriate, but have not been detailed. The primary consideration will be the
application of active avalanche control measures along this route, similar to those
described for the CCAR.

At approximately km 16.9, there will be an intersection with the lower NTAR. The double-
lane road will turn north through a switchback and follow a path low on the west bank of
the North Treaty Creek Valley, eventually climbing to the Treaty OPC and TMF. This road
is described later in this section.

The TCAR will continue as a double-lane road further west to a future intersection at
approximately km 17.9. Heading west from there, the TCAR will transition into a single-
lane road leading to the MTT saddle area. This route is described later in this section.

At the proposed km 17.9 intersection another double-lane road will be built in future. It
will be known as the upper NTAR, and will be built at approximately the mid-mine life,
once it becomes necessary to construct the southeast tailing dam. The South Cell and
Southeast Tailings Dam will bury much of the lower NTAR, that will be used during the
earlier part of the mine life.

TREATY CREEK ACCESS ROAD (WEST TO TUNNEL SADDLE ACCESS PORTAL)

Beyond km 17.9 and heading west up the Treaty Creek Valley, the TCAR will transition
into a single-lane road leading to the MTT Saddle Area. This single lane road will provide
construction period access, and longer term maintenance access to the MTT. From
km 17.9 to km 33, the road standard is reduced to a nominal 6 m finished road width.

Most of this road will traverse moderate to steep side hill conditions. Much of this
section of road will be subject to snow avalanches. Passive structures have not been
considered. It is anticipated that active snow avalanche mitigation measures will be
utilized, similar to those described earlier for the CCAR.

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 Only one bridge is required along this section, at approximately km 20.5. Five major
culvert crossings are required. Currently streams identified as being fish bearing have
clear-span bridge structures. None are crossed with culvert or open-bottom arch type
structures.

NORTH TREATY CREEK ACCESS ROADS

There are currently three permanent access road alignments proposed within the North
Treaty/Teigen Creek valley. They shall be referred to as the lower NTAR, the upper NTAR,
and the Cut-off Ditch Access Road. The upper NTAR is further split into Phase 1 (2.2 km)
and Phase 2 (5.8 km).

The upper NTAR will leave the TCAR at approximately km 17.9. It will traverse
approximately 12 km north from the TCAR to the Treaty OPC and TMF. Initially there will
be a switchback leading to a “sustained” climb (nominal 10%). This road must climb to
attain an elevation sufficient to clear the future southeast tailing dam elevation
(nominally 1,070 m). The road would then parallel the proposed drainage cut-off ditch,
which will divert drainage off the west slope of the valley, north to the Teigen Creek
Valley.

The road location and terrain dictates that significant portions of the upper NTAR will
need to be built using full bench/end haul to waste construction. Construction of the
south portions of this access road could be difficult and time consuming, and might delay
critical early access for construction of the MTT at the Treaty OPC.

Earlier access can be obtained by constructing the lower NTAR. This will leave the TCAR
at approximately km 16.9 and follow the lower valley. This route crosses a number of
steep gullies and the terrain has some steep sections, but is generally flatter than the
upper NTAR location.

The lower NTAR will be quicker to build. It will result in a slightly shorter haul distance
between Highway 37 and the Treaty OPC and TMF, and with generally flatter grades. This
road would be used for approximately the first half of the mine life, until such time as it is
necessary to construct the southeast tailing dam. The lower NTAR would match to the
upper NTAR approximately 8.1 km north of the TCAR main turnoff. The lower NTAR would
have the added benefit of allowing access to the lower valley to initiate construction of
the tailing dam(s). Eventually the north section of this road would be buried by the
southeast tailing dam.

Early in the mine construction it would still be necessary to build a section of the upper
NTAR that parallels the cut-off drainage ditch (Phase 1: 2.2 km). This would be built to
the ultimate double-lane standard (8 m width). Construction of the Cut-off Ditch Access
Road would also be required. This would be for construction access and maintenance
only, and would be built to a lower standard (4 m road width). The power transmission
line is proposed to follow this route.

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 NORTH TREATY/TEIGEN TMF SERVICE ROADS
During 2012 significant work was done to complete preliminary road designs for required
TMF Service Roads. These provide access to the east side of the North Treaty and Teigen
Creek valleys. A minor road to the camp water well was also designed. In total
approximately 28.4 km of road were evaluated, including the following:

 South Teigen Road 11 (5.5 km)

 South Teigen Road 11a (3.15 km)
 South Teigen Road 12 (9.1 km)
 South Teigen Road 12a (0.3 km)
 Upper Dam Road 12b (1.2 km)
 South Teigen Road 15 (3.7 km)
 South Teigen Road 15a (2.7 km)
 Water Well Access Road (2.7 km).

All of these roads will be situated within the mine site boundaries. The majority provide
access to the east side of the TMF and ancillary facilities. All are designed as single lane
roads (maximum 6 m width), with pullouts, and most have low design speeds South
Teigen Road 12 was designed to parallel the proposed uphill drainage channel
requirements, to direct natural drainage off of the east slopes and away from the TMF.

Some input was provided with respect to geotechnical and environmental concerns for
select segments of these roads. Some, but not all of the roads were field-truthed during
the 2012 season. Additional future field work will be required to complete those
assessments.

ROAD DESIGN REQUIREMENTS

The Project access roads are classified as resource development roads. The design
criteria proposed for each of the roads is included, along with typical cross sections, in
Appendix J.

The Eskay Creek Mine Road and CCAR will be maintained for the life of the mine to
support the mine development, transport of oversize loads, and to provide alternate
emergency access. However, these will only be used seasonally, and not used during
winter months.

The CCAR will be a single-lane (6 m surface) radio-controlled road with turnouts and
widenings to allow the largest vehicles and loads access to the mine site. The CCAR
would have some sections with sustained maximum grades of 12%. Design speeds vary
greatly, in large part controlled by the terrain.

The proposed TCAR to km 17.9, and the connecting upper and lower NTARs, will be
required for permanent access to the Treaty OPC and TMF, and to the mine site via the

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 MTT tunnels. These will be two-lane roads (8 m finished surface), capable of carrying the
legal axle loading for trucks on BC highways on a year-round basis. The roads will provide
access for supplies, equipment, and crew transport, and be used for hauling concentrate
to Highway 37.

Alignment controls such as maximum 10% sustained grades (11% short pitch), and
minimum 100+ m radius horizontal curves are utilized for the higher-traffic volumes
anticipated on this route. Appropriate vertical profile crest and sag curve “K” values are
applied. Except for a few control sections, the nominal minimum design speeds for these
sections of road is 50 km/h, and maximum 60 km/h where feasible.

All bridges will be designed to BC Forest Service L100 loading (90,680 kg gross vehicle
weight [GVW]) and minimum 1.5 m clearance above the estimated 100-year flood level
(Q100). Select structures must meet additional requirements, as prescribed by the
Navigable Waters Protection Act. All bridges, including those on the TCAR, will be single-
lane.

Major culverts have been designed to pass the estimated 100-year flood level (Q100)
with no headwater.

DESIGN UPDATES (2012-2016)

As described elsewhere in this section, additional field work was conducted in 2012
along the proposed access routes by McElhanney, BGC and ERM. New information was
incorporated to optimize the road and structure designs. Horizontal and vertical
alignments were modified to best meet the environmental, geotechnical and
archaeological concerns and requirements. During 2012 work was completed to locate
potential borrow and waste sites, at appropriate locations to accommodate road grade
construction requirements along the access corridors. Provision was also made to
identify areas of potential gravel sources for road construction and surfacing materials.

Log landing locations were identified for decking of timber felled during right-of-way
clearing operations. Log landings were located, and spaced, as appropriate for
logging/skidding operations. Timber maturities/volumes etc. were considered in
establishing proposed landing locations.

The proposed right-of-way (clearing) boundaries now defined on the design drawings are
minimum 30 meters wide, expanded to include proposed borrow and waste areas, and
log landings as described above. The approved SUP boundary limits extend a minimum
of 37.5m either side of proposed road design centerline (total 75 m width), widened as
required to incorporate additional areas as otherwise defined. The intention is that this
will provide some flexibility in adjusting the design or construction methodology as may
be required due to actual field conditions encountered, without requiring multiple
amendment to the SUP during the construction period.

The potential for ML/ARD has been assessed for all access road right-of-ways. Additional
assessments were conducted in late 2014 for km 0 to 7 of the CCAR which had been
flagged by Government agencies as an area of special concern.

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 The SUPs for road construction associated with the Project were granted by the Provincial
MFLNRO office on September 27, 2014. There is a requirement to provide a security,
payable to MFLNRO, prior to commencing construction.

Access road surveys, designs and drawings were prepared in conformance with
standards provided in the then most current version of the BC government Forest Service
Engineering Manual (November 29, 2012). Detailed engineering of specific slope
stability measures will be subject to review by the geo-technical engineer(s), immediately
in advance of, and during construction activities.

Bridge and major culvert structure site plan surveys, designs and general arrangement
drawings have been prepared in accordance with MFLNRO requirements and current
industry standards. General arrangement design drawings have been signed and sealed
independently by a professional engineer registered to practice in BC. Detailed structure
design details will need to be completed in advance of construction.

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Figure 18.26 Proposed Access Roads Network

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18.14 PROPOSED WINTER ACCESS ROAD
A winter access road is proposed from a laydown area near the former Granduc Mine to
the Project site. The approximate alignment for the proposed winter access road is
depicted in Figure 18.27. An evaluation of the route was completed by Tetra Tech
(Appendix J.).

The quantity of snowfall throughout the winter, the relatively warm climate, and the
topography will not allow the construction of a typical “ice road”, where conventional
highway vehicles could be used. The road must instead be a “snow road” where tracked
equipment pulls skid-mounted sleds to haul the various loads to site. Maximum weight
and sizes of the loads that could be hauled over the route by the tracked equipment
pulling sleighs are anticipated to be limited to the size that could be hauled on normal
highway transport trucks (33 t maximum weight and 2.3 m maximum width). Most of the
surface of the glaciers is relatively smooth with little crevassing. However, some
locations near the terminus of the glaciers in both the Ted Morris Creek and Bowser River
valleys have prevalent crevasses. Snowfall appears to be sufficient to fill in most of the
crevasses during the winter, at least on the Berendon Glacier.

The suggested route will be approximately 38.4 km long. It appears that as much as
32.8 km of the road will be constructed on the glaciers. Although the topographic data is
not very precise, the bulk of the route appears to have grades of 4 to 6%. Steeper grades
upwards of 30% exist at the toe of the Berendon Glacier and on the small side glacier
that allows access onto the Frank Mackie Glacier from the Berendon Glacier. There are
also steep sections with grades of up to 15% near the crest of the Frank Mackie Glacier.
The total vertical variation is roughly 1,020 m (3,350 ft) between the Granduc Mine area
and the crest of the Frank Mackie Glacier.

There is increased risk of avalanches and rock fall hazards at some areas along the
route, such as the narrow portion of the Ted Morris Creek Valley at the terminus of the
glacier (Figure 18.28 and Figure 18.29). There is considerable evidence of recent rock
falls in this area; piles of rock debris have been observed on top of the glacier and in the
valley bottom. This is also the area where there is limited concern about there being
enough snow in the valley to pad over the rock fall debris. This may entail pushing or
hauling snow from other locations on the glacier to allow the road to be constructed.

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 Figure 18.27 Proposed Winter Glacier Access Route

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 Figure 18.28 Looking South up the Frank Mackie Glacier*

Note: *at approximately Sta.32+500 (Figure 18.27). Note the rock fall debris on the glacier surface.

Figure 18.29 Looking South up the Ted Morris Creek Valley*

Note: *at approximately Sta.33+500 (Figure 18.27). Note the creek emerging from a melt water tunnel in

the glacier, and the rock fall debris on the glacier surface and in the bottom of the valley.

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 Figure 18.27 identifies areas along the route that are expected to present a challenge or
areas where risks will be greater during construction and operation of the winter access
road. Selected photographs taken during the route reconnaissance, some of which
identify these areas of concern, are provided in Appendix J.

Safety and environmental issues must be addressed with the proposed winter road.
These include natural hazards such as avalanches, rock falls, and road failure into
underlying caverns or crevasses. Any of these issues present real hazards to the safety
of the personnel working on the road, and bring about the possibility that various types of
substances could spill into the environment.

A road similar to the proposed winter access road was constructed across the Knipple
Glacier into the Brucejack Lake area is a precedent for the approach with the various
provincial government permitting and regulatory groups. Also, Pretium’s use of the
Berendon and Frank Mackie glaciers to gain access to their site in the winter of 2010
also provides some precedent.

A comprehensive evaluation of the landslide and rock fall hazards, as well as avalanche
evaluations, will have to be conducted as part of the required detailed planning. During
road construction and operation, an avalanche team will have to continually monitor
snow conditions and undertake avalanche control measures.

Ground Penetrating Radar (GPR) surveys will need to be conducted to look for cavities
and snow bridges over crevasses in the glacier.

Detailed safety and environmental spill plans will have to be developed to support this
operation. Measures that should be employed to prevent spills include using double-
walled “Envirotanks” for storage and transport of hydrocarbons. All equipment must be
in good working order with appropriate spill collection and cleanup equipment.

The vehicles hauling on the glacier will travel in convoys in case of breakdowns. Several
“survival shacks” will be located on the glacier in case rapid changes in weather force the
convoy to stop before reaching the end of the road. Haul equipment will have GPS
navigation devices and will remain in radio communication with other haul equipment
and camps. The winter road will be marked with regular highly visible stakes for visual
guidance in case of white-out conditions.

18.15 LOGISTICS
A preliminary logistics study was performed to determine the preferred means of
transporting mining and construction equipment to the KSM site, and concentrate from
the KSM site to storage and concentrate off-loading facility port sites. The logistics study
is provided in Appendix G3.

There are several transportation route possibilities for bringing equipment and supplies
to the KSM property:

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  The first route involves road access via Highway 37 from the south. Heavy
equipment may also be transported through Smithers, BC, by transport truck or
rail to the closest viable rail siding at Smithers, and then loaded onto transport
trucks and taken to the KSM site along Highway 16 and Highway 37 north to the
junction of the TCAR.
 Access to the KSM mine site involves extending the Eskay Creek Mine road to
the south for a distance of about 35 km as the CCAR.
 A third route involves bringing equipment and supplies by barge to Stewart, BC,
and then transporting the equipment via Highway 37A to Highway 37, to the
junction of TCAR and Highway 37.

The existing highways leading to the Project area may require some upgrading of bridges
and other crossings in order to accommodate the equipment loads. Further evaluation of
the upgrades will be identified during the next phase of the Project.

All bulk freight for the Project will be shipped to Stewart, BC by barge. There will be an
initial marshalling/staging area set up at Stewart within the area provided by the port
vendor. Prior to completion and opening of CCAR and TCAR, bulk freight will be
transported by truck from Stewart marshalling/staging area to Granduc Staging area.
Upon completion of the temporary winter access road construction, the bulk freight will
be transported by tracked transporters to Mine Site.

Upon completion of the CCAR, TCAR and the marshalling/staging area at the Highway
37/TCAR intersection, bulk freight will be transported by trucks from Stewart
marshalling/staging area to Highway 37 marshalling/staging area, prior to shipping
material and equipment to the point of installation by the Project Team.

The KSM site is currently accessible by helicopter only. Helicopter support will be used to
transport equipment, supplies, and personnel prior to completion of the access
pioneering roads, and to support winter construction work ongoing as necessary on the
Mine Site since CCAR is a seasonal road (closed winters) and MTT would not be
operational until the end of the construction duration.

A proposed Winter Access Road will be constructed that leads to the KSM site, as
detailed in Section 18.14. The Winter Access Road will be used to mobilize water
treatment supplies and mobile equipment, as well as supplies for construction of access
roads, construction of WSF and water diversions during the first season. The Winter
Access Road will be used until the pioneering road of CCAR has been completed. It will
also provide access for the construction of portions of the CCAR, near its east end and to
the Mine Site.

Copper concentrate will be transported from the KSM site by trucks to a deep water port
facility in Stewart, BC, and then loaded onto oceangoing vessels. Two full service ports
exist at Stewart, each with roll-on/roll-off freight handling capacity and are either
presently, or would by the time operations begin, be capable of concentrate storage and
handling to ship loading.

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 The terminal is at the head of the Portland Canal, which is a 150 km fjord that is ice-free
throughout the year. The terminal is accessible via truck on Highway 37A; however, there
is no direct rail service. Concentrates from other northern BC mines are currently
shipped from this port. In addition, there is interest from other projects in the region for
concentrate handling services at the terminal.

For the purposes of this study, Tetra Tech calculated that the copper concentrates will be
shipped in bulk, and that the annual output for the initial 10 years will be approximately
350,000 t copper concentrate (dry tonne).

Molybdenum concentrate will be transported in bags from the KSM site via trucks to the
port of Prince Rupert. The bags will be transferred from the trucks to containers and then
delivered to Fairview Terminal for ultimate loading onto an oceangoing vessel.

It was assumed that the processed molybdenum will be loaded in 1-t bags for transport
purposes, and that the annual output will be approximately 1,155 t molybdenum (LOM).

Mr. Neil Seldon of NSA was relied on for matters relating to the smelting terms, refining
terms, saleability, and sales terms for copper concentrate and molybdenum concentrate.
See Section 19.0 for more detail on the marketing study related to concentrates.

18.16 PRELIMINARY CONSTRUCTION EXECUTION PLAN

The Construction Execution Plan describes how the Project could be constructed. It is a
plan in the preliminary planning stage and briefly defines the construction elements
required to successfully execute construction management for the Project.

INTRODUCTION
The Project is a complex project, requiring six years to construct, at a capital investment
value of US$5 billion as described in Section 21.0. The construction scope for the
Project is intended to meet the following key project-specific objectives:

 deliver an optimized, safe, and environmentally compliant project in accordance

with the project systems and procedures
 perform project construction activities safely, striving for zero recordable
accidents
 the Project is carried out in accordance with the Impact Benefit Agreements that
are in place with the First and Treaty Nations
 ensure that regulations, license agreements, applicable specifications, and
standards are met.
 complete Project construction within the agreed Project schedule, not exceeding
the budget, and delivering the full scope as described in the Project
authorization

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 EARLY WORKS PLAN
An Early Works Plan will be developed to ensure an efficient project start-up that is safe,
controlled, and follows the Project objectives and guidelines. Certain key infrastructure
(e.g., construction camps) and support services (e.g., catering) must be in place early in
construction and functioning efficiently for a successful construction program.

The following project planning and field construction focus areas must be addressed in
the Early Works Plan:

PLANNING
 permit review and renewal plan
 project procedures
 staffing, recruiting & labor relations plan, including commitments in accordance
with the Impact Benefit Agreements that are in place with the First and Treaty
Nations
 contracting strategy and plan, including commitments in accordance with the
Impact Benefit Agreements that are in place with the First and Treaty Nations –
vetted and approved by the Owner
 project access plan – Winter Access Road, pioneer roads, bridges, followed by
completed permanent roads
 health, safety and security (HS&S) management plan and manual
 site and camp rules and regulations plan
 environmental and cultural sensitivity awareness training plan
 health and hygiene program – washrooms and lunchrooms supplied by the
Owner ensuring a high standard throughout the construction program
 site safety and security orientation program
 geohazards and avalanche monitoring response plan
 logistics supply and materials management plan for early material requirements,
including helicopter support
 employee transportation plan for early construction program; air and ground
planning required
 environmental management plan to manage sediment control, waste, spills,
fueling, etc. (includes condensed manual for front line supervision use)
 wildlife management plan for early construction activities
 community relations plan
 quality management system

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  safety and emergency response plans including content related to medical
facilities and medical attention, emergency medevac, etc. (includes condensed
manual for front line supervision use)
 Final Level IV resource loaded construction schedule
 Final Project Execution Plan
FIELD CONSTRUCTION
 establish explosive supply storage and controls
 identification and proving project borrow pits
 sourcing road materials and aggregates; setting up crushing and screening
facilities
 establish aggregate plant, aggregate wash plant, batch plant installation and
supply of cement and aggregates
 install asphalt plant and supply of asphalt
 develop fuel supply and storage locations on site immediately upon
achievement of road access (temporary double lined portable fuel storage
tanks/fuel bladders within beamed and lined containment areas)
 build construction camps:

 temporary accommodations only until construction camps established –

exploration camp type
 prefabricated construction accommodations to be installed as soon as the
road access reach camp locations and site preparation is completed
 establish temporary construction power – standalone power supply systems
(gensets) in containers with fuel systems. power distribution to begin on the
ground then relocate to power poles when available
 build TWTP ponds and muck pads, and install TWTP's where tunneling on the
Project is on the critical path (e.g., MTT)
 build pioneering roads along CCAR and TCAR alignments to establish road
access to the Mine Site and Treaty OPC
 establish temporary construction facilities and services to support construction
efforts while permanent infrastructure buildings and services are being built to
support the site and staff.

PROJECT SCOPE
The Project scope outlined in this section, summarizes the main project items
constructed as permanent facilities or activities required to support permanent
constructions within and surrounding the Mine Site, Mitchell OPC, MTT and PTMA:

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  Mine Site:

 Frank Mackie Glacier Road (Winter Access Road)

 upgrades to the existing Eskay Creek Mine Access Road
 CCAR (35 km, permanent access road)
 Mitchell OPC (primary crushing at a peak of 10,000 t/h)
 WSF (crest built to elevation 716 masl) and ancillary facilities
 HDS WTP with five large clarifiers and sludge storage to initially process up
to 5.4 m3/s (future expansion will add 2 clarifiers and ability to process up
to 7.5 m3/s)
 six TWTPs and associated muck piles (where applicable) and treatment
ponds
 surface water diversion tunnels (MDT, 6.5 km; MTDT, 2.1 km; and MVDT,
3.5 km)
 power distribution comprising construction gensets, overhead transmission
lines, power distribution, and substation
 logging, site clearing and grubbing (overburden, soils stockpiles & large
woody debris for future reclamation purposes), rough/finish grading,
structural excavations and fills, foundations, steel erection, architectural,
mechanical, electrical and instrumentation works
 Mine Site ancillary buildings and infrastructure such as camps (permanent
and temporary), fuel storage yard, sludge storage building, diversion
ditches and bypass pipelines, material handling, temporary truck assembly
yard, energy recovery plants
 MTT:

 two, 22.7 km long tunnels plus ancillary excavations

 train system for ore transport at a peak of 10,000 t/h
 two, 15,000 t ore bins and associated transfer conveyor from the Mitchell
OPC
 power distribution infrastructure
 train maintenance building
 train loading/unloading facilities
 PTMA and Saddle Area:

 TCAR (33 km, permanent access road)

 TMF (North Dam built to 930 masl, and Splitter and Saddle dams built to
935 masl, with a fully-lined and drained basin for placement of CIL tailing)
 COS and transfer conveyors
 Process Plant built for 130,000 t/d average throughput, including
concentrate storage and load out
 two TWTPs and associated muck piles and treatment ponds

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  power distribution comprising construction gensets, overhead transmission
lines, power distribution, and substations
 logging; site clearing and grubbing (overburden, soils stockpiles & large
woody debris for future reclamation purposes); rough/finish grading;
structural excavations and fills; foundations; steel erection; architectural,
mechanical, electrical, and instrumentation works
 PTMA ancillary buildings and infrastructure such as camps (permanent and
temporary), cold storage, fuel storage yard, diversion ditches and pipelines,
and material handling
 Infrastructure (major, both on- and off-site):

 concentrate storage and loading at the Port of Stewart

 switching station at TCAR turn off from Highway 37(by BC Hydro)
 287 kV overhead power line from switching station to PTMA
 fibre optics along power line right-of-way and tie-ins
 Highway 37 marshalling yard and Highway 37 turnoff, including site
security infrastructure.

The MTT tunnelling program and water treatment facilities will start at the Mine Site,
Saddle Area, and Treaty OPC locations. The MTT tunneling program is on the critical path
for Project construction and will require helicopter support for the first year of
construction while pioneering roads are developed. Additional information on scope
inclusions can be referenced in the Basis of Estimate Report (Appendix L1) and Basis of
Schedule Report (Appendix G1).

PROJECT SCHEDULE
The 2016 PFS construction schedule was compiled in accordance with the AACE®
International (AACE®) recommended scheduling guidelines (level of detail is at Level 2),
with a Class 4 project definition. The Project construction schedule is estimated to be six
years and has been designed to accommodate major seasonal and environmental
constraints.

Critical path consists of pioneering roads along the alignments of the principal access
arteries to the Project areas (CCAR and TCAR), MTT, and the train system that will
connect the Mine Site with the PTMA. Prior to completion of the KSM site access
pioneering roads, helicopter support will be utilized to support early construction
activities at multiple road construction headings. The strategy is to establish site access
pioneer roads as early as possible to reduce heli-support costs exclusively for Mitchell
Valley construction activity during winter months. Upon completion of the access roads
to full width, major equipment and materials can be transported to site via ground freight.

Major site infrastructure such as the WSF and the TMF could potentially be on the critical
path should the MTT tunneling duration be shortened. Additional assumptions and
details are listed in Appendix G1 for critical or potentially critical tasks such as pioneer
roads and the MTT, as well as the WSD and TMF.

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 A preliminary Project schedule has been developed with a start date for the construction
program assumed for mid-Year -6. Contractors to begin construction on the CCAR and
TCAR construction would assume to mobilize for mid-Year -6.

Mine Site pioneering begins with the development of the site access roads to the major
infrastructure pads such as HDS WTP area, WSF, Mitchell OPC, MTT portals, CCAR, batch
plant, TWTPs, accommodation complexes and powder storage, initially from where the
Frank Mackie Glacier Road ends. Early works material and equipment will mobilize on
this Winter Access Road and the major equipment, general construction materials, and
heavy earth moving equipment will mobilize via the CCAR. The Treaty OPC will utilize the
TCAR to transport all material and equipment for PTMA construction.

The Project duration is estimated at 66 months. The high-level schedule is shown in

Figure 18.30. The complete schedule is available in Appendix G1.

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Figure 18.30 Construction Schedule Summary (Level 1)

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 ENGINEERING AND PROCUREMENT
Engineering and procurement activity will be managed by teams of professionals who will
report up through the EPCM contractor's directorate. The Engineering Team will provide
the required drawings, specifications, and documents to the Procurement Team in order
to purchase all equipment and materials for the Project, and to allow field construction of
the Project scope to the design intent. The EPCM contractor’s scope will include process
facility and infrastructure engineering, and for the Project this would include managing
specialty contractors for major dam and tunnel designs. Mine designs will be developed
and delivered by the Owner's Team.

The Procurement Team will receive the engineering documentation and obtain multiple
quotations that meet engineering specifications, and provide a purchase
recommendation to EPCM project director. After project director approval, the
Procurement Team will purchase equipment and materials and arrange all logistics to
deliver the items to the Project site ready for installation. The Procurement Team will
also be responsible for establishing service contracts for engineering and field
construction services.

Both the Engineering and Procurement teams will including commitments in accordance
with the Impact Benefit Agreements that are in place with the First and Treaty Nations.

CONSTRUCTION MANAGEMENT
The Construction Management Team will be responsible for the management of all
activities related to the construction management scope. The construction management
scope includes all project activity in the mine, process, and infrastructure areas (on site
and off site), except mining activity, environmental monitoring and reporting and
community affairs, which will be the accountability of the Owner's Team.

Safety leadership will be the Construction Management Team's primary objective. After
safety, the Construction Management team's next objective will be the administration
and coordination of all contractors on site. This includes labor relations, monitoring and
correcting when necessary, contractual compliance with safety performance, work
quality, budget, schedule advance, completeness and timeliness of documentation
submittal, environmental standards, and the Owner's Community Relations Plan. The
Construction Management Team will oversee the installation of all materials and
equipment according to engineering and manufacturers specifications, and build the
Project facilities to satisfy the design intent and be fully operable. The Construction
Management Team is also accountable for construction activity and the Project site until
hand over to the Owner following dry commissioning.

CONSTRUCTION SUPERVISION AND CONTRACTOR MANAGEMENT

The objective of all site construction activities is the timely and cost-effective completion
of the Project facilities in a safe manner to the design intent and required standards in
accordance with schedule. Construction supervision staff, while ensuring that standards
are maintained, will provide all oversight management to contractors in achieving this
end.

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 The Contracts Management Group, which falls under the responsibilities of the site
procurement manager, will use an integrated project data management system to track
contractor invoicing, changes, and requests for information (RFIs). The EPCM contractor
will develop a comprehensive set of project procedures, in conjunction with and approved
by the Owner. These procedures will outline the requirements for the execution of the
administrative activities.

The EPCM Contractor is responsible for the overall management of the construction site
and will apply the following construction strategy and procedures:
 project organization, key names, and communication procedures
 reporting requirements including project systems, project meetings, minutes,
and a communications matrix
 identification of the division of responsibilities among the Project stakeholders
using a responsibility matrix format
 risk management procedures
 project data management, format, and distribution/filing requirements of
project correspondence and documentation
 cost management and accounting procedures
 drawing and specification preparation including numbering, revision tracking,
and transmittal procedures
 document control procedures
 equipment and materials procurement procedures
 project scheduling requirements, tools, formats, and frequency of delivery
 project accounting methods including cost reporting and forecasting systems
 construction contract procedures including bidding and awarding the work
 site administration procedures including camp administration rules
 site security
 field engineering
 safety procedures
 quality assurance expectations
 site and office personnel rules and regulations
 emergency site procedures and contact information
 construction temporary facilities (power, water, offices, and camp)
 site housekeeping and hazardous waste management
 mechanical completion expectations including lock-out procedures
 commissioning procedures

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  project close-out and hand-over procedures
 other administrative matters and issues specific to the Project for use by the
team.

CONTRACTING PACKAGING AND STRATEGY OVERVIEW

GENERAL
The preliminary construction strategy includes dividing the Project into contract packages
including commitments in accordance with the Impact Benefit Agreements that are in
place with the First and Treaty Nations. During the contractor expression of interest and
pre-qualifications phase of the Project and during the advancement of detailed
engineering, the contract packages will be combined to reduce the total number of
contracts and form a final contracting strategy for the Project. A preliminary contract
package approach and strategy are included in Appendix G1.

A portion of the contract packages listed in Appendix G1 have been combined logically,
where work tasks have similar scope. The intent of combining work packages is to
provide the various contractors with control of their work areas and reduce contractor-
contractor interference in the field.

The Project will be constructed as a managed open site, neither union nor non-union.

To maximize the available resources in the community, the Project Team will source and
qualify local suppliers and contractors to promote business opportunities in the local
area. Consideration has been provided in the strategy to assist the Owner with local
involvement by dividing the packages into reasonable scopes that fit with local
contractors’ technical ability, experience and financial capacity.

The contracting strategy document defines the type of package, contract, method of
payment, engineering responsibility, purchasing of major equipment (mine and process),
purchasing for minor and miscellaneous equipment, installation contractor and the
management of each contract package.

When fully developed in the Project detailed design phase, the contract package
approach will outline the scope of work for each package and the strategy for managing
both the contractor- and Owner-supplied equipment, facilities, and services.

The contracting plan to be developed should contemplate the following methods of

payment for contracts:

 lump sum – typically construction installation contracts

 lump sum and unit rates – typically earthworks and foundations
 time and material cost reimbursable – typically service contracts.

The type of contract requested at the tender will be dictated by how complete the
engineering is. Where engineering on package scope is greater than 90% complete, it
may be tendered as lump sump. Packages with a lower engineering definition may be

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 tendered as unit rate or time and materials. This approach will provide the best possible
pricing for the Project. It is intended to minimize the package risk and keep the Project
on target for completion at or below approved budget.

SITE ORGANIZATION STRUCTURE

The EPCM site organization structure has been developed to provide a balanced
combination of senior managers, area managers, engineers, superintendents, and
discipline specialists, to provide the Owner and contractors continuous support during
the installation period. A high level organizational chart is provided in Figure 18.31 and
detailed organization charts are available in Appendix G1.

Figure 18.31 KSM Project EPCM Organizational Chart

The site organization and staffing plan has been designed by work type (e.g., engineering
vs. project controls) with the geographical constraints of a large construction site
incorporated. The staffing plan accommodates the following construction management
aspects:

 site wide health and safety program

 staff rotational coverage
 office administration and project controls
 field engineering support (including quality assurance)
 commissioning
 close coordination with all stakeholders.

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 The organization chart provides for all site activities that are to be managed by the EPCM
Team. Each of the two major construction sites will have a dedicated health and safety
manager and multiple health and safety representatives to assist contractors with the
daily issues and training requirements. They will also provide the required reporting and
continuous planning.

Site-specific orientations presented by the Safety Team will be available at both

construction sites. A short visitor/truck driver orientation will also be provided. The
locations where these orientations will be conducted and content for them will be
established prior to construction starting.

The Mine Site and Treaty OPC will have a senior construction manager directly
responsible for the management of cost control, scheduling, engineering, material
coordination, QA support, and pre-commissioning planning. The construction manager
will be directly supported by area managers and area leads.

Each construction and service contract will have a contracts administrator or specialist
assigned as a single point of contact during the construction period.

The Materials Management Team will coordinate with the contractors on receiving and
moving materials to the contractor’s lay down areas and the worksites.

ROLES AND RESPONSIBILITIES

To ensure the Project Team has a clear understanding of the management structure and
the roles and responsibilities for the major positions on the team, job descriptions will be
developed and presented as a general guide for each position.

LEVELS OF AUTHORITY
The Delegation of Authority Guideline (DOAG) must be established by the Owner when
authorization to proceed is granted. The DOAG will lay out the authority level throughout
the hierarchy of the Project for both the Owner and EPCM teams. It will be implemented
and managed by EPCM personnel.

The DOAG applies to all transactions executed on the Project, initiated by the Owner or
EPCM teams. The managers with authority to execute transactions may only approve
those within their area and level of authority.

A basic premise of approval delegation is that the delegated authority bears with it the
obligation to exercise sound judgment. Consequently, approval indicates that goods and
services have been received, prices are correct, tax, legal and withholding requirements
have been satisfied, the Project’s interests are protected, and proper documentation
exists to justify transactions. The DOAG can only be amended by the Owner.

CONSTRUCTION INFRASTRUCTURE
The construction infrastructure includes setup of all facilities required to support the
construction effort in an efficient manner to achieve the Project goals and timelines. The
establishment of construction infrastructure, for the most part, is set up during the early

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 works scope and would be managed by the EPCM contractor. The operation of the
construction facilities will be provided by a site services contractor.

The EPCM contractor would provide a site services superintendent to coordinate the
Project requirements with contractors and service providers to ensure that there are no
delays to the start of any construction work package.

Contracts and amendments required for service providers for operating and maintaining
the site will be prepared and issued by the EPCM contractor. The EPCM construction
management staff will be responsible for each contract to ensure that the contractor
meets the performance standards specified.

A detailed construction site infrastructure plot plan will be required to define the location
of EPCM-, Owner-, and contractor-supplied facilities and services. Plot plans will be
developed down to the detail level to address construction services such as power
distribution, data management, telecommunications, emergency services, etc.

FIELD ENGINEERING
FIELD ENGINEERING SCOPE
The Field Engineering Group consists of a field engineering manager, field area
engineers, site project document and data management, and project data system staff.
The Field Engineering Group will be responsible to the project engineering manager on
technical and procedural issues, and to the site construction manager regarding work
flow. The group will work closely with the QA managers and technicians regarding QA and
contractor QC programs, inspections, and reporting.

Project engineering will be managed by the home office engineering department. Field
engineering will be directly involved with the contractors in issuing drawings and
technical documents, processing RFIs, site technical document control, site surveys, QA
and contractor QC. Field engineering will be responsible for:

 all decisions regarding field engineering

 coordinating all engineering requirements between site and home office
 coordinating site surveys
 site document control including the issuing of drawings and documents to
contractors
 managing the RFI process
 early reconciliation of defects
 assist in determining progress
 volume verification for payment
 for record documentation
 planning and supervising all QA programs and non-destructive testing.

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 QUALITY ASSURANCE/QUALITY CONTROL SYSTEMS
The discipline field engineer, in conjunction with the QA manager, will review the
contractor’s quality management system prior to start of works. The subsequent
monitoring of the contractor’s implementation of their QC systems on site will be
completed through the construction management team.

The discipline field engineer will establish and implement, in coordination with the QA
manager, independent surveys, field inspections, and QC laboratory sampling and
testing, as necessary, through the survey contractor and QC laboratory contractor.

HEALTH, SAFETY & SECURITY

The following is a brief overview of the HS&S management plan. Prior HS&S plans had
been named health, safety, environment and community plans with scope related to
environment and community management plans; however, they are excluded herein from
HS&S scope since this will be managed by the EPCM contractor. Environment monitoring
and reporting, and community affairs will be managed exclusively by the Owner's team.
A detailed project-specific HS&S plan, HS&S manual, and standard operating procedures
will be finalized during the early works construction period in Year -6.

HS&S concerns are of high importance in the engineering, design, construction, and
commissioning of the Project. In order to achieve zero accidents, total commitment is
required from all project personnel (Owner, EPCM Team, contractors, and vendors) to
remove all conditions that could lead to injury or damage.

The Project will conform to applicable provincial, national, and industry standards
regarding health and safety, as well as to the Owner’s and EPCM manager’s policies and
procedures. A copy of these procedures will be issued to each contractor before
mobilization to site.

The project director and the HS&S manager will lead in the development and
implementation of the site-specific HS&S plan. All workers (Owner’s, EPCM personnel,
and contractor employees) are responsible for performing their work in a manner
consistent with legislation, industry standards, and company policies, practices and
procedures.

HEALTH
Facilities and Infrastructure
Two medical facilities have been planned for the Project: one at the Mine Site, and the
second at the Treaty OPC. Emergency helicopter support will be available 24 h/d,
7 d/wk, 365 d/a throughout construction. Emergency response teams will be developed
during the first construction year and evolve to serve the needs of the Project as activity
increases on site. Emergency medical technicians (EMTs) and nurses from the Owner's
Team will be on site and available full time to address emergencies if they should arise
starting in Year -5. Also, the Owner's team will include mine rescue teams comprised of
staff working in mine operations.

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 The site medical and first aid treatment system must be integrated into the site
emergency procedures and safety reporting system and must conform to occupational
health and safety regulations for construction. A contingency plan would be prepared to
account for all possible emergency events.

All site personnel will be notified of the first-aid/medical arrangements and the protocol
for activating the emergency procedure during site safety orientation. Notices indicating
contact details for first-aid personnel (or appointed persons), the emergency contact
number/radio frequency, and the location of the first-aid boxes must be posted liberally
around the site. Special arrangements may be required to give first-aid information to
employees with reading or language difficulties.

SAFETY
Orientations
All new employees to the construction site will attend the site safety, environmental and
cultural orientation program prior to arrival at site. A site visitor orientation will be
provided to all visitors and they will be required to be escorted by a safety-oriented
worker at all times throughout their site visit.

In addition to the Project orientation, contractors will be required to provide job-specific

safety orientation to all new employees prior to the start of work. This may involve
verification of trade or craft certifications.

Documented ongoing pre-task job hazard analyses with crews for specific tasks will be
conducted at the beginning of each shift.

Contractors must ensure that their workers will be suitably trained and competent in the
safe work procedures and health and safety regulations pertaining to their duties.
Likewise, any equipment operators are required to have equipment-specific training and
certification. Also, all equipment intended for work at site will be required to pass a
designated inspection process prior to mobilization.

Safety Meetings
A weekly safety meeting will be required by every contractor (including the EPCM
contractor and Owner’s teams) on site or at the required frequency dictated by applicable
regulation. It will provide an opportunity for all personnel to contribute timely information
on safety items that relate to project activities. Weekly safety meetings will be conducted
by contractor management and provide an important communication link between all
their respective crews. Additionally, a safety committee meeting would be convened
monthly or at the required frequency dictated by applicable regulation and comprised of
a representative cross section of the work force and used as the forum for raising all
issued related to worker safety.

Minutes of these meetings will be recorded on the weekly Safety Meeting Form.
Contractors will be required to immediately address as many issues as possible. Issues
from the weekly safety meetings that cannot be resolved immediately will be to be

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 submitted to the Project safety department and transferred to the safety meeting action
log for the superintendent’s review and action.

Audits and Inspections

The Joint Health and Safety Committee (JHSC) comprised of Owner and EPCM leadership
will inspect a minimum of one area of the Project each week. The JHSC will develop the
inspection schedule and use an action plan format. When completed, the inspection will
be submitted to the HS&S manager for assignment of responsibility and completion date.

Emergency Response
Emergency response teams will be assembled from the site personnel. One team will be
a dedicated group led by the HS&S Team for project-related scope. Another team
comprised of qualified and trained miners from the Owner's Team will be available to
provide emergency response during mining activity. Personnel will receive formal training
in:

 first aid
 fire fighting
 rescue techniques
 hazardous material handling and clean up.

The team will be provided with the following emergency equipment:

 protective gear for firefighting and hazardous material handling

 fully equipped rescue vehicle
 ambulance
 fire truck
 dedicated communication devices (hand-held and vehicle mounted)
 tools (e.g., axes, shovels, cutters, saws, etc.).

SECURITY
Site security will be handled by a security contractor reporting directly to the EPCM
contractor. The contractor will develop a site-specific security plan in conjunction with
the Owner.

The content of the site security plan should address the following topics:

 site access control and surveillance plans

 identification tag control
 traffic control and enforcement
 criminal activities (liaison with police authorities)

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  material removal from site
 site visitor log and orientation.

ENVIRONMENTAL AND COMMUNITY AFFAIRS

Environmental and community affairs during construction will be managed exclusively by
the Owner's team to maintain independency from the EPCM Team. Environmental
knowledge and community relationships have been developed thru historical activity at
the Project site and these relationships must continue to be managed appropriately in
the context of regulatory permits granted and the societal expectations that have been
expressed to the Owner’s team. These activities will continue to be of paramount
importance to the Owner well beyond the construction period, thus are best addressed by
the mine owning entity that will have presence throughout the mine life. Environmental
management and community relations plans are briefly described below and will be
developed to a detailed level for implementation prior to construction as part of the Early
Works plan described in Section 18.16.2.

The cultural awareness training program will identify and provide an overview of the
various Aboriginal groups whom have an interest in the Project, focusing on their rights as
it pertains to their traditional use of the natural resources of the area. Contractual
obligations negotiated between the Owner and the various groups as components of
Benefit Agreements will also be reviewed at a very high level.

ENVIRONMENTAL
Scope
A site-wide environmental management plan will be produced to guide the mitigation and
management of environmental impacts arising from project activities. The purpose of the
environmental management plan will be to:

 outline appropriate protection measures

 provide specific instructions for protecting the environment (e.g., spill prevention
guidelines), including individual responsibilities, and minimizing environmental
effects for achievement of zero incidents
 document environmental concerns and identify environmental management
improvement areas, through a process of continuous improvement (report,
implement, track, and verify)

 Report regulatory non-compliance

Spill Prevention
Site personnel will be educated in spill prevention controls. Environmental site
inspection activities will be documented. In addition to written reports, photographs will
be used to document environmental compliance.

In the case where an environmental incident occurs, an Incident Report will be completed
and actioned.

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 Archaeological Finds - Chance Find Procedures
Historical resources include archaeological, historical, and paleontological artifacts.
Archaeological awareness will be part of the site orientation program. If archaeological
artifacts are discovered during construction activities, the following steps that must be
taken:

 all construction activity in the area is to be immediately stopped

 the Owner’s site construction manager and environmental representative is to
be notified
 the applicable government agency and Aboriginal group is to be notified
 construction activity in the area will not resume until the area has been
investigated and cleared by the Owner’s representative after discussions with
the appropriate government agency and aboriginal group.

COMMUNITY
The Owner will be responsible for community relations including providing updates to the
local communities. The EPCM contractor will be responsible to make the Owner aware of
any situation that is happening, or arising, that may affect directly or indirectly the
communities that the Project impacts.

This may include, but is not limited to:

 project schedule (current and upcoming activities)

 project influence on local community (negative and positive)
 possible employment opportunities
 traffic and/or road conditions
 personnel safety and site security
 environmental performance
 complaints arising from construction activities
 harassment of Aboriginal employees
 harassment of wildlife
 illegal hunting and fishing activity.

PRE-COMMISSIONING/COMMISSIONING
OVERVIEW
The commissioning period starts in any specific work area after all materials and
equipment have been installed to design specification and the EPCM contractor certifies
installation complete and hands the area over to the commissioning team. For the
purposes of this PFS update, commissioning starts after equipment or material
installation for a system or work area is complete and ends when ore starts to be
processed to yield a revenue stream (i.e. the battery limit between Year -1 and Year 1). In

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 this PFS the EPCM contractor's scope includes commissioning through dry
commissioning when work areas are handed over to the Owner's commissioning team.
The Owner's commissioning team executes wet and process commissioning with select
operating staff and professionals that are separate in reporting line and accountability
from the operations staff. When these phases of commissioning are complete, they will
be handed over to Owner's operations staff who will operate the facilities through ramp
up in Year 1 and on to normal operation. Support will be available from the EPCM
contractor and other contractors to assist in situations or conditions that may be atypical
of normal operation during wet and process commissioning.

OBJECTIVE
The objective of the commissioning program is to take the Project facilities and
equipment from the completion of construction (mechanical completion) through to a
fully operational facility:

 in a safe manner
 in the minimum time
 in a cost effective manner.

This is achieved by the following activities:

 inspection and testing equipment and facilities as supplied, erected, and

installed meet the design and performance criteria for the intended duty in a
safe and environmentally acceptable manner
 testing and adjusting the operation and control of all components of the Project
facilities to ensure that the equipment operates as part of an integrated and
fully coordinated system
 integration of operations and maintenance personnel into the commissioning
process as early as possible to assist in the final check out and start up of the
facilities.
Tagging systems will be defined for turnover of individual equipment, systems, buildings
and the complete facility, based on systems descriptions and battery limits. A detailed
deficiency list system will be developed to ensure the turnover to the operations team is
complete.

COMMISSIONING PROGRAM
In general, the commissioning program is subdivided into three phases of mechanical
completion of Project facilities.

Dry Commissioning
This first phase of mechanical completion is without ore or principal product also known
as dry commissioning. Project discipline lead engineers and coordinators are responsible
for the work conducted up to and including energization of equipment including:

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  Equipment inspection and sign off to verify that all installation work is in
accordance with the drawings, specifications and manufacturers operations and
maintenance manuals.
 Green tags are complete and signed off by the Construction Manager and
Owner’s representative.

Wet Commissioning
This second phase of mechanical completion proves that the facility can operate in a
controllable and stable manner without significant load or feed (i.e. water tests only) also
known as wet commissioning. It commences when:

 dry commissioning is complete

 piping installations are complete
 electrical/instrumentation drives are energized and field device signals tested to
and from the PLC systems
 mechanical, piping and electrical areas are all complete and signed off by the
construction manager and Owner’s representative.

Process Commissioning – Ore Feed Commissioning

The third phase of mechanical completion (ore feed commissioning) commences when
the wet commissioning activities are completed.

The Project will be considered complete and available to hand over to operations when
the crushing and ore transport (train) system can deliver and operate according to design
performance criteria. No hand over of mine facilities will occur since mining starts from
day 1 with the mine Owner's team.

The process commissioning stage is the responsibility of the Owner and shall be
performed by the Owner’s commissioning team aided by the construction manager,
commissioning manager and contractor support personnel.

18.17 OWNER’S IMPLEMENTATION PLAN

The Project will be constructed as outlined in Section 18.16 and in the time frames
indicated in the Project schedule in Appendix G1. It is the Owner's responsibility to attain,
and renew when necessary, all environmental and operating permits allowing site access
road development, all Project construction, and all mine operations for the Project.

This Owner's implementation plan described herein attempts to provide a preliminary

outline to the key responsibilities and actions the Owner's Team will take, including
interaction with EPCM contractors during the construction stage and commitments in
accordance with the Impact Benefit Agreements that are in place with the First and
Treaty Nations.. It is not intended to be a comprehensive execution plan, rather to
provide a basis for the Owner's cost structure represented in this PFS.

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 It is assumed the Project will be developed as a joint venture (JV) or consortium of two or
more companies that will form a partnership to build and operate the KSM Mine. A JV
organization would allow KSM's partners to reduce risk and spread capital expense. The
“Owner” referenced in this section is synonymous with this JV organization. It is further
assumed that the structure developed will assign decision making authority to the
majority stakeholder to eliminate bureaucracy and streamline project development and
mine production decisions. The KSM Mine will therefore have its own operating structure
and reporting line through the JV partnership, maintaining its own profit and loss
accountability to the JV partners. The Owner's organizational structure will have a KSM
president with multiple reporting lines through a six-layer organization. Site based
reporting lines to the president comprise projects, mine, and process with on-site
administrative functional support as necessary to enable the Owner’s Team’s success.
Additionally, off-site business and external relations functions would also report to the
KSM president.

A central office in Vancouver is not anticipated. Instead, satellite offices will be located in
Terrace, Smithers and Stewart, BC to facilitate support functions sufficiently close to the
Project site to provide effective support, while building and maintaining business
relationships with external stakeholders, including key Treaty and First Nations groups.
Off-site locations for functions that support mine operations yield an overall lower cost
structure because associated G&A staff housing, shift transportation and catering costs
are mitigated.

The implementation plan described in this section highlights some key tasks required for
execution by the Owner's Team over the course of construction. There are two initial
critical tasks for the Owner's Team, starting with the identification and hiring of the KSM
president, who will initially select a team, who in turn will do the same for their respective
teams. This process is expected to be repeated throughout the course of construction
until the entire enterprise organization has been built, while directing and supporting
construction in various roles.

The second initial critical Owner's Team task is the engagement of an EPCM contractor
early in the Project development schedule to drive the majority of the Project scope that
resides outside of the Owner's direct responsibility. The type of contractual arrangement
between the Owner and EPCM contractor has not been established, as it relies on the
strategy that will be developed after forming the JV, and may be influenced heavily by the
operating style of the JV partners.

The Owner will manage any early engineering work required to prepare design documents
that support permit applications or renewals and compliance reports for permits issued
by the Province of British Columbia and the Government of Canada. Site road access
permits, construction camps approvals, and limited site development permits have been
obtained. Additional permits will be required by the KSM Mine to ensure the completion
of construction and the initiation of long term operations. The Owner will also manage
any on-site drilling, hydrology, environmental monitoring, and geotechnical work, as well
as the engineering work needed to prepare a final FS for the Project. The cost for these
activities is excluded from this study. Infill drilling or Mineral Reserve conversion costs
are also excluded, since a significant portion of the current reserve base is proven.

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 During Project construction, the Owner will be responsible for:

 mine development/construction including pre-stripping

 supervision of mine fleet assembly
 all environmental baseline monitoring, permitting and compliance
 operation of temporary water treatment and sewage treatment plants
 community and governmental relations
 Treaty and First Nation relations
 competitively bidding, adjudication and award of EPCM
 Owner's Team recruitment
 training of operating personnel for the Mitchell pre-mining phases
 medical support
 verification surveying for measurement and payment
 on boarding all G&A staff for both on-site and off-site positions in advance of wet
commissioning to assist as part of the Commissioning Team and to develop
process and procedures for each department/function to efficiently support
operations
 all personnel required for ultimate mine and plant start-up and operations.

The Owner will recruit and train technical operations and administrative staff to work in
the following locations:

 Treaty OPC Operations and Water Management – process plant and train
operations, maintenance, TMF operations, security, and administrative
personnel.
 Mine Site and Water Management – operations, maintenance, security and
warehousing personnel.
 Smithers Office – proposed to be developed to service all of KSM's needs for
external relations comprising governmental affairs, environmental management,
permitting and compliance, public and community relations and
communications, First Nations and Treaty Nation relations.
 Terrace Office – proposed as a business center where home office support will
be based for these administrative functions: supply chain and logistics, human
resources, IT, accounting functions, tax, business analysis, legal and audit.
Health, safety and loss prevention may have occasional presence in this office,
but will be primarily based on site to support ongoing operations as they
develop; and,
 Stewart Port Site – management of deliveries and security for incoming
construction equipment/materials and outgoing concentrate shipments.

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 A conceptual onboarding plan for specific G&A functions will be developed prior to
turnover of constructed areas of the site from EPCM to the Owner's Team and is
programmed to be well in advance of the turnover. This will allow sufficient time for the
development of internal KSM Mine processes and procedures as a means to facilitate a
smooth mine start up. The early onboarding plan is intended to cover gaps in service
areas that may not have been detected in this early stage of design.

The time sequences for key Owner activities by year are outlined in Table 18.18. Note
that this task list assumes that a FS has been completed or is running concurrently with
the Project start and that either full or conditional/partial project funding will be granted
by the Owner ahead of the Project start.

Table 18.18 Owner's Key Activities by Year

Year Activities
(Year -6)  complete PFS update by Q2 Year -6
 renew early works permits, as necessary, to support initial construction (e.g., roads)
 recruit KSM president and project directors
 recruit and onboard key department leads for process, human resources, business manager, and
environment and community relations
 initiate training programs required to meet First and Treaty Nation employment objectives
 establish a business office in Terrace, BC
 implement site environmental monitoring program during construction
 recruit and install at site environmental monitors, TWTP and sewage plant operators, field
coordinators to support early works construction mainly for road building and camp construction
 competitively bid, adjudicate, and award EPCM services
 in conjunction with the EPCM contractor, develop a detailed execution plan for the Project
leveraging all previous engineering, project planning, and environmental permitting work.
 establish project governance between Owner and EPCM teams
 release early works contracts for road and bridge construction (critical path)
 obtain permitting for use of Frank Mackie Glacier Road during winter
 initiate fish habitat compensation construction
 obtain required authorizations so the in-water bridge piers on the Bell-Irving and Unuk rivers can be
installed during the first winter construction season
(Year -5)  manage EPCM contractor focussing on detail engineering and long-lead procurement activities off
site, and early works construction on site
 augment site Owner's Team in these areas: environmental services, survey (measurement and
payment), medical services
 expand Smithers, BC office to accommodate larger office headcount
 continue Mine Site development
 establish road to Sulphurets quarry to support WSD construction
table continues…

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 Year Activities
(Year -4)  finalize concentrate smelting contract terms
 finalize detailed engineering work for early phase construction activities, initiate detailed design for
the remainder of project scope
 augment site Owner's Team in the following areas: process operations, site administration, security,
site project management, human resources and environmental services; process operations staff
are expected initially to reside in the EPCM contractor's office to guide detailed design and process
equipment selection
 continue to manage EPCM contractor focussing on detail engineering and procurement activities
off site and early works construction on site; procurement focussing on large equipment purchases
required at site in Year -3 and beyond
 continue mine site development
 deliver Sulphurets rock to WSD for construction
(Year -3)  complete final detailed design for all remaining project scope and finalize all equipment purchases.
 initiate enterprise computer systems set up in off-site offices
 continue to manage EPCM contractor whose focus is now shifted mainly to field activity
 initiate business readiness planning leveraging Owner's Team resources, working collaboratively
with the EPCM contractor
 augment off-site human resources team
 continue Mine Site development
 continue delivery of Sulphurets rock to WSD for construction
(Year -2)  continue to manage EPCM contractor whose focus is solely on field activity
 establish satellite office and recruit port staff for facility at Stewart, BC
 expand Terrace, BC office footprint to full size necessary to fully support mine and process
operations on site
 recruit all operations staff for HDS WTP to participate in wet commissioning of the facility following
dry commissioning and handover by EPCM, initiate plant start up and operations
 continue Mine Site development
 continue delivery of Sulphurets rock to WSD for construction
(Year -1)  recruit and on board all remaining positions for the process plant, metallurgical laboratory and TMF;
plant operators are highest priority and TMF staff will be on boarded toward year end
 complete recruitment for mine operations team
 perform a significant amount of operator training in preparation for operations start up
 oversight of OEM assembly of major mine fleet equipment
 after completion of WSD, initiate ore mining in Mitchell open pit Phase I
 delivery of first ore to Mitchell OPC
 fully execute wet commissioning following dry commissioning and handover by EPCM of the process
plant and all infrastructure
 initiate ore transfer through the MTT controlled by process operations
 introduce first ore to Treaty OPC and begin process plant ramp up
table continues…

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 Year Activities
Operations  complete recruitment and on boarding for remaining G&A and process operations staff during
Year 1 process plant ramp up
 complete oversight of OEM assembly of major mine fleet equipment
 produce first copper concentrate and doré at the Treaty OPC
 initiate sand tailing production at the TMF and train employees on procedures for this long term
dam construction effort
 achieve commercial production
 ramp up to full scale mining and primary crusher operations at the Mitchell OPC from Phase I mine
development stages at Mitchell and Sulphurets
 shipment of copper concentrate from the Port of Stewart

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19.0 MARKET STUDIES AND CONTRACTS

Seabridge engaged NSA to provide an opinion report on marketing inputs for the 2016
PFS, excluding off-site transportation costs. The information and options in this section
come from the opinion report located in Appendix B. All currency amounts used in this
section are in US dollars, unless otherwise specified.

19.1 COPPER CONCENTRATE

19.1.1 MARKETABILITY
When considering the marketability of copper concentrates, quality and quantity are
determining factors. There is considerable variation in the quality of concentrates and
the requirements of various smelters do vary; such variation relates to the technical
abilities of the smelter and its overall concentrate feed and blend.

Ideally, smelters prefer to blend their feed with approximately 30% copper and similar
amounts of iron and sulphur. In the last several years, however, the grade of some of the
major high-grade suppliers has been dropping. At the same time, many new suppliers
tend to blend copper-gold concentrates with copper content in the low to mid 20% range.
Consequently, the market has seen the blend for most smelters drop to a copper level of
27 to 28%. Apart from the level of copper, iron, and sulphur, other key elements in
determining concentrate salability include the levels of gold and silver content, as well as
any impurities.

Based on the impurity levels projected by Tetra Tech (using the test results completed to
date – see Table 17.3), concentrates from the Project are relatively clean. Depending on
the market situation at the time of contract negotiations, penalties will likely be minimal,
if at all applicable. Some smelters, such as in Japan, South Korea, and Europe, are
expected to have more interest in copper concentrates with high gold content.

19.1.2 SMELTING TERMS

COPPER CONCENTRATE SMELTING MARKET
Copper concentrates account for approximately four-fifths of total newly-mined copper
production, with the balance of output coming from solvent extraction and electrowinning
copper cathode and other copper-bearing by-products.

Concentrate supply started to increase over 2013 and is expected to continue to

increase towards the end of this decade as a result of new projects and announced
expansions of operational mines.

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 A significant portion of copper concentrate is processed by integrated smelters—captive
plants that are vertically integrated with mines through ownership. However, an
increasing annual volume of global copper concentrate is treated by custom smelters
that generally are not integrated, although there is, in many cases, investment ownership
in mines. Custom smelters have increased their overall smelting market share from 30%
in 1980 to approximately 50% today.

Over the last two decades there has been a significant expansion of smelting and refining
capacity, particularly in India and China. The Chinese smelting industry has increased
imports, as limited domestic mine capacity could not meet demand. This trend has been
a key determinant in world concentrate supply/demand balances.

The copper concentrate market has seen significant structural imbalances in the recent
years between mine production and smelting capacities. Over the last couple of years
there have been significant increases in smelter treatment charges and refining charges
(TCs/RCs). The balance of supply and demand for concentrates is set by the whole of the
concentrate output of the mining industry and by the availability of capacity across the
smelting industry. The availability of custom concentrates, relative to smelting capacity,
should, in theory, be the ultimate determinant of terms for custom treatment of
concentrates.

19.1.3 COPPER CONCENTRATES CONTRACTS AND TERMS

The concentrate market is basically split into two types of contracts. First, there are long-
term off-take contracts between mines and smelters that reflect, in general, the annual
concentrate supply and demand balance. Second, there is spot or short-term business
primarily between mines and traders and, on a much smaller scale, between mines and
smelters. By its nature, such business is much more volatile and there is considerable
variation in spot TCs/RCs, not only annually, but over each year.

CURRENT AND FUTURE TERMS

NSA suggests that annual benchmark numbers are beginning to reflect a move towards
sustainable long-term numbers. NSA believes that the most likely scenario is that
ultimately charges have to move up towards a level that is economic for the smelting
industry over the long term. The benchmark numbers for the last several years are
shown in Table 19.1

Table 19.1 Benchmark Smelting Terms

2016 2015 2014 2013 2012
Copper Treatment Charges ($/dmt) 97.500 107.00 92.000 70.000 63.500
Copper Refining Charges ($/lb) 0.0975 0.1070 0.0920 0.0700 0.0635

For comparison, the recent spot market of April 2016 indicates sales into the Chinese
market where the levels of TCs/RCs were between $90 and $95/dmt of concentrate and
$0.090 and $0.095/lb of copper, respectively.

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 Over approximately 20 years (up to 2005), historical TCs/RCs averaged approximately
$77/dmt and $0.077/lb (including approximately $0.01 of participation for these
purposes, split between the treatment charge and the copper refining charge) at an
average price of $0.93/lb of refined copper.

The general view today does not see price participation materializing in the near future;
however, it should not be ignored. Historically, when price participation first became a
factor in concentrate negotiations it was only applicable at a price level higher than the
price existing at the time of negotiation.

NSA suggests that the annual benchmark terms realized over the last couple of years are
likely to be a guide to future levels. With this in mind, and for purposes of this study, the
assumption should be a copper treatment charge of $100/dmt, with copper refining
charges of $0.10/lb of copper.

TCs/RCs are not the only terms that are used in valuing copper concentrates. Payments
and deductions are a matter of negotiation and will vary with many factors, including
supply and demand, and custom individual markets.

The following terms are an indication of “standard” long-term smelter charges, including
suggested TC/RC terms. Delivery is on the basis of Cost, Insurance and Freight – Free
Out (CIF-FO) smelter ports (the mine pays all costs up to delivery port and the buyer
arranges and pays for cargo discharge).

PAYABLE METALS
Copper Pay 96.5% with a minimum deduction of 1 unit (amount deducted has to
equate to a minimum of 1% of the agreed concentrate copper assay).

Silver If over 30 g/dmt pay 90%.

Gold A scale is applicable with some variations of the following:

 less than 1 g/dmt, no payment

 1 to 3 g/dmt, pay 90%
 3 to 5 g/dmt, pay 93%
 5 to 7 g/dmt, pay 95%
 7 to 10 g/dmt, pay 96.5%
 10 to 20 g/dmt, pay 97%
 over 20 g/dmt pay 97.5%
 over 30 g/dmt pay 97.75%.

Gold and silver payments may vary between smelter locations. In China, high gold in
copper concentrates is not generally desired; relating more to internal pricing issues
rather than technical concerns. Technically, the more modern smelting facilities are able

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 to accept payment formulas similar to Japan and South Korea, but for many of the older
smelters in North China, this is not the case. In Europe, with grades of over 40 g of gold
content, payment of 97.75% with a minimum deduction of 1 g is likely to apply.

REFINING CHARGES
Copper $0.10/lb payable copper

Gold $6.00 to $8.00/oz payable gold

Silver $0.50/oz payable silver

TREATMENT CHARGES
Treatment Charge $100.00/dmt CIF-FO main smelter port.

PRICE PARTICIPATION
Not applicable at present.

PENALTIES
Arsenic: $2.50 to $3.00 per 0.1% over 0.1% up to 0.5% arsenic

Antimony: $3.00 to $4.00 per 0.1% over 0.1% antimony

Lead: $2.00 to $3.00 per 1% over 0.5% to 1.0% lead

Zinc: $2.00 to $3.00 per 1% over 2% to 3% zinc

Mercury: $2.00 per each 10 ppm over 10 ppm mercury

Bismuth: $3.00 to $5.00 per 0.01% over 0.03 to 0.05% bismuth

Selenium: $3.00 to $5.00 per 0.01% over 0.05% selenium

Tellurium: $4.00 to $5.00 per 0.01% over 0.02% to 0.03% tellurium

Fluorine $1.00 to $2.00 per 100 ppm over 300 ppm fluorine

Chlorine $1.00 to $3.00 per 100 ppm over 300 ppm chlorine.

Furthermore, penalties may also vary from smelter to smelter. It should be noted that for
the elements where a percentage range is used, this relates to ranges of penalty
thresholds that are negotiated. The penalties noted in this section are generally in line
with levels applicable over recent years, but there is a tendency towards higher levels.

Based on the anticipated impurity levels derived from the test results by Tetra Tech (as
presented in Table 17.3), the concentrates from the Project are relatively clean, and
depending on the market situation at the time of contract negotiations, penalties will
likely be minimal if at all applicable. As most of the mill feeds will be the blended

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 materials from different deposits and spatial locations, the blend should effectively
mitigate penalty elements rising for the ore from some limit locations.

PAYMENT
A provisional 90% is paid three to 15 days after vessel arrival in Asia and India. Sales
into Europe normally involve later payment, possibly more than 30 days after arrival. The
10% balance is paid when all facts are known.

OTHER OFF-SITE COSTS

Various indirect costs other than smelter charges include:

 Losses; assumed to be 0.1% or less, due to improvements in material handling.

 Insurance; marine insurance is assumed to be in the range of 0.1 to 0.15% of
net invoice value of the concentrate.
 Supervision, assaying and umpire costs; the costs for third-party supervision and
assaying are assumed to be approximately US$1/dmt.
 Marketing; the cost of marketing varies with concentrate tonnage, location, and
number of smelters to be shipped. For the Project, the estimated marketing
cost is in the range of US$5 to US$10/dmt.
 Concentrate transportation; the transportation costs for copper concentrate are
based on the following assumptions by Tetra Tech:

 trucking: US$38.06/wmt
 port storage and handling: US$14.40/wmt
 ocean transport to Asian port: US$26.00/wmt.

19.2 MOLYBDENITE CONCENTRATE

19.2.1 SMELTING CHARGE
Molybdenum concentrates of either primary production origin, or as a co-product, need to
be further processed. This is initially to produce molybdenum oxide by roasting, or by use
of autoclaves for upgrading. Quality is an important consideration and certain elements
can be deleterious. As a rule of thumb, 50% molybdenum content is considered the
minimum. Below that, buyers will begin to be a bit selective and charges will rise
somewhat. One guideline, given for each 1% below 50%, would be an increase in
charges of $0.05/lb of molybdenum.

Currently, the deduction for roasting is very quality dependent, with high copper content
concentrates generally selling at a 10 to 15% discount. Assuming that the copper
content of its molybdenum concentrates is reduced to 0.45% or less, the lower end of the
range will apply to clean high-grade concentrates. In the recent years (2005 to 2009),
discounts for high-copper molybdenum concentrates have reached 25%.

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 In summary, it is recommended to use a discount of 12% from the price, with a minimum
of $1.00/lb and a maximum of $2.50/lb. This discount would be inclusive of all charges
mine to market, such as delivery costs, irrespective of whether or not the concentrate is
sold to a trader or a roaster directly.

On average, the molybdenum concentrate could contain approximately 1,000 to

2,000 ppm rhenium or higher. Given the high rhenium content, some roasters would
recognize the rhenium content in the form of lower treatment charge or some payments.
However, it is difficult to project the rhenium value at the current market and the level of
study.

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20.0 ENVIRONMENTAL STUDIES, PERMITTING,
AND SOCI OR COMMUNITY IMPACT

20.1 LICENSING AND PERMITTING

The KSM Project is subject to the BC Environmental Assessment Act (BCEAA), the
Canadian Environmental Assessment Act (CEAA), and Chapter 10 of the NFA.

As of June 2016, the Project has successfully gone through the provincial and federal
processes, and the appropriate certificates/approvals have been obtained. Additionally,
permits for early-stage construction activities have also been obtained. Seabridge is
currently in the process of obtaining numerous provincial and federal permits to allow for
the construction of parts of the Project, as well as to expand exploration activities.
Details of the provincial, federal, and NFA processes and current statuses, as well as the
current permitting status of the Project, are including in this section.

The Project underwent a harmonized EA process with the provincial and federal
governments. Both governments conducted the EA cooperatively, in accordance with the
principles of the Canada-BC Agreement on Environmental Assessment Cooperation
(Cooperation Agreement 2004). The process included a working group comprised of
federal and provincial officials, the NLG, Aboriginal groups, and local government
agencies. Representatives of the US federal and Alaska state agencies were extensively
involved in the EA process, as a matter of courtesy at the insistence of Seabridge, given
that the mineral deposits are located on a tributary of the Unuk River, a transboundary
river, 30 km upstream of the US/Canada border. Authorizations are not required from
any US federal or state regulatory agency for the Project to procced into construction and
operation.

20.1.1 PROVINCIAL PROCESS

Under the BC EA process and its regulations, certain categories of larger-scale projects
must undergo an EA, and an EA Certificate must be obtained before the Project can
proceed. The scope, procedures, and methods used for each assessment are tailored to
the specific circumstances of a proposed project. The EA must assess a project’s
potential environmental, economic, social, heritage, and health effects.

Under the BCEAA Reviewable Projects Regulation, the proponent of a new mineral mine
facility, with a production capacity of greater than 75,000 t/a of mineral ore, must obtain
an EA Certificate. The Project will have an annual mill throughput of 43,800,000 t/a,
which substantially exceeds this threshold.

Seabridge was accepted into the BC Environmental Review process in March 2008,
following submission of a Project Description (Rescan 2013). In July 2013, Seabridge

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 submitted an Application/EIS (Rescan 2013) under the BCEAA (2002) in accordance with
the approved project Application Information Requirements (AIR) to the BC Environmental
Assessment Office (BCEAO). The Application/EIS was approved and EA Certificate #M14-
01 for the Project was issued on July 29, 2014.

The full Application/EIS can be found on the BCEAO web site here:
http://a100.gov.bc.ca/appsdata/epic/html/deploy/epic_project_doc_list_322_r_app.ht
ml

The Project EA Certificate #M14-01, including Schedule A (Certified Project Description)

and Schedule B (Table of Conditions) are provided in Appendix K1.

A plain English summary of the Application/EIS is provided in Appendix K4.

20.1.2 FEDERAL PROCESS

The CEAA (1992) was significantly amended in 2003 and 2010, and was entirely
repealed and replaced by the CEAA (2012) on July 6, 2012. The CEAA (2012) dispensed
with comprehensive studies, but also provided that comprehensive studies started under
the relevant provisions of the CEAA (1992), as amended from time to time, should be
completed under those provisions. Under the 2010 amendments, the lead federal
agency for the comprehensive study for the Project is the Canadian Environmental
Assessment (CEA) Agency, which assumed the role from several CEAA responsible
authorities (those federal agencies that may issue approvals for the Project under the
Law List Regulations). The CEAA (2012) provides for expedited timelines to conclude the
EA process for those comprehensive studies that were underway before repeal of the
CEAA (1992). For the Project, six months of federal government review time applied.

The Project became subject to the CEAA (1992) because it may require several statutory
authorizations listed in the Law List Regulations. The Project was subject to a
comprehensive study level of assessment under the CEAA (1992) because the proposed
daily ore mill feed of 130,000 t/d exceeds two thresholds set out in the CEAA (1992)
Comprehensive Study List Regulations; specifically, the 4,000 t/d threshold for metal
mills, and the 600 t/d production threshold for gold mines. Certain dam structures
proposed for the Project also exceed the 10,000,000 m3/a threshold for water
diversions.

The Project was deemed to require a “comprehensive study” in July 2009 and a “notice
of commencement of an environment assessment” was submitted to Seabridge. The
terms or the scope of assessment was developed and posted by CEAA for public
comment in late May 2010. With the CEAA (2010) amendment, the terms of reference
was subsequently re-posted for public comment by the CEA Agency in July 2010. The
draft KSM (Kerr-Sulphurets-Mitchell) Project Comprehensive Study Report was
subsequently issued by the CEA Agency in July 2014. The complete report is provided in
Appendix K5.

The KSM Project Comprehensive Study Report, along with filed public comments from
the NLG, other Aboriginal groups, and the public, were considered by the Minister of the

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 Environment when making her final EA decision. The Project received federal approval
on December 19, 2014. The Environmental Assessment Decision Statement is provided
in Appendix K6.

20.1.3 NISGA’A FINAL AGREEMENT

The NFA is a treaty concluded between Nisga’a Nation, the Government of Canada, and
the Government of BC in 1999. The NFA came into effect in May 2000 under the federal
Constitution Act and the BC Nisga’a Final Agreement Act, and sets out Nisga’a rights over
approximately 27,000 km2 of land in the Nass River system and surrounding drainages.

The NFA establishes three categories of lands with different specified Nisga’a interests-
the Nisga’a Lands (approximately 2,000 km2), the Nass Wildlife Area ([NWA], more than
16,000 km2), and the Nass Area (approximately 27,000 km2)—the latter incorporating
the Nisga’a Lands and the NWA within it. The NFA affords title to Nisga’a Nation within
the Nisga’a Lands and defines the rights of Nisga’a Nation to self-government and law
making authority in this area. The NFA also specifies Nisga’a Nation rights to access and
make use of natural resources in the NWA and the Nass Area.

Seabridge proposes to develop some components of the Project footprint within the Nass
Area, including the Treaty OPC, the TMF, and the northern portion of the MTT. No Project
components will physically occupy any portion of Nisga’a Lands or the NWA, both of
which are located south of the potentially-affected portion of the Nass Area.

The NFA makes explicit provision for Nisga’a participation in federal or provincial EAs of
projects sited anywhere within the outer Nass Area boundary. Seabridge was directed by
the federal and provincial governments to ensure that it conducts its EA responsibilities for
the Project in compliance with all relevant Nisga’a treaty rights, including those dealing with
economic, social, cultural, and environmental interests. Chapter 10 of the NFA
(Environmental Protection and Assessment), paragraphs 6 to 10, provide for meaningful
Nisga’a participation in the EA through effective coordination, timely notice, provisioning of
information and studies to Nisga’a Nation, and a clear focus on assessment of potential
adverse project effects on residents of Nisga’a Lands, the Nisga’a Lands themselves, or
more generally, on Nisga’a interests as set out in the NFA.

A federal approach was established in February 2011, following consultation with the NLG
and the Province of BC, to clarify how the Government of Canada would meet Chapter 10,
paragraph 8 requirements in the EA, including the assessment of effects under paragraphs
8(e) and 8(f), and the issuance of a Ministerial NFA Project Recommendation.

The Government of Canada worked collaboratively with the NLG and the Government of BC
to facilitate the assessment of paragraphs 8(e) and 8(f) effects as part of the
comprehensive study. Seabridge conducted an economic, social, and cultural impact
assessment (ESCIA) on the well-being of Nisga’a citizens (i.e., paragraph 8(f) effects) based
on a work plan that was required by the joint AIR. Effects defined under paragraph 8(e) were
described in the Application/EIS as part of Seabridge’s analysis of the Project’s effects on
environmental valued components (VCs).

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 The KSM Project Comprehensive Study Report (Appendix K5) examined both paragraphs
8(e) and 8(f) effects on Nisga’a citizens, lands, and interests, and provides the federal
perspective on these effects. This information, along with comments received during the
final public consultation and any agreements between Seabridge and the NLG concerning
the effects of the Project, were used to inform the Minister of the Environment’s NFA Project
Recommendation. The Project received federal approval in December 2014. The Project
Recommendation that was issued by the Minister under Chapter 10, Sections 8 and 9 of
the NFA is provided in Appendix K7.

20.1.4 PROVINCIAL PERMITS

The Application/EIS was accompanied by applications for eligible provincial
authorizations in accordance with the BCEAA (2002) Concurrent Approvals Regulation
(BC Reg. 371/2002).

This set of initial permits is referred to as the “Batch 1 Permits” and included permits for
the following mine components:

 KSM Project Mines Act and Environmental Management Act Permit Application
for Limited Site Construction (May 2013)
 Special Use permits for the CCAR and TCAR
 KSM Construction Camps
 KSM Project Treaty Transmission Line
 MTT Permit Application

A complete list of the Batch 1 permits received during the concurrent permit review
process is provided in Appendix K10.

In November 2015, Seabridge submitted an application to amend the existing Mines Act
exploration permit MX-1-571 and an Environmental Management Act (2003) permit to
facilitate the commencement of construction of the Deep Kerr Exploration Adit. The
Deep Kerr Exploration Adit will be located near the existing temporary KSM exploration
camp (Appendix K9).

As of June 2016, an estimated 108 provincial permits are still required to fully develop
the Project. A draft list of these Batch 2 permits is provided in Appendix K10.

20.1.5 FEDERAL PERMITS

The Application/EIS included federal applications for the following:

 Fisheries Authorization application, including draft Compensation Plans

 MMER Schedule 2 Amendment Application
 International Rivers Improvements Act Licence Application
 Navigable Waters application.

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 The following sections provide additional details along with the current status of federal
permits.

FISHERIES AUTHORIZATIONS AND MMER SCHEDULE 2 AMENDMENT APPLICATION

Legislation
Fish and fish habitat are protected under the Fisheries Act (1985), as well as other
federal regulatory acts and principles. In 2012, the Fisheries Act was amended to
legislate the federal government’s direction to focus efforts on protecting the productivity
of commercial, recreational, and Aboriginal fisheries; to institute enhanced compliance
and protection tools that are more easily enforceable; to provide clarity, certainty, and
consistency of regulatory requirements; and to enable/enhance partnerships with
stakeholders.

The changes to the Fisheries Act include a prohibition against causing serious harm to
fish that are part of or support a commercial, recreational, or Aboriginal fishery (Section
35), provisions for flow and passage (Sections 20 and 21), and a framework for
regulatory decision-making (Sections 6 and 6.1).

On November 1, 2013, The Fisheries Protection Policy Statement (Fisheries and Oceans
Canada [DFO] 2013a) was issued and replaced the earlier Policy for the Management of
Fish Habitat (DFO 1986). Although the new policy statement does not include the “no
net loss” (NNL) principle, as outlined in the earlier policy, application of this NNL principle
provides some useful guidance when considering “serious harm to fish”.

Any project or activity that causes a serious harm to fish that are part of, or support, a
commercial, recreational, or Aboriginal fishery requires an authorization from DFO.
Regulations have been developed to guide the application for this authorization:
Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations.
DFO has issued additional guidance in the “The Fisheries Protection Program Operational
Approach”.

The Project entered the EA process prior to the changes in the Fisheries Act and Fisheries
Protection Policy Statement. As such, the original Fisheries Act and Policy for the
Management of Fish Habitat have been used for planning and permitting.

KSM Project
Fish habitat will be impacted by the KSM Project in two ways:

 deposition of tailings into a fish-bearing watercourse, which requires an

authorization under Section 36 of the Fisheries Act (1985)
 loss of fish habitat due to Project infrastructure (e.g., roads, transmission line,
dams), which requires an authorization under Section 35 of the Fisheries Act

Fish habitat compensation plans related to the loss of fish habitat due to Project
infrastructure and due to the depositions of tailings were completed as part of the
Application/EIS. Compensation reports for both the harmful alteration, disruption, or

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 destruction (HADD) of fish habitat and the MMER were developed with input DFO, the BC
MOE, and key Aboriginal groups and stakeholders, as identified in the Section 11 Order
and included MOE, Gitanyow First Nation and Wilp Wii’litsxw, Gitxsan First Nation, wilp
Skii km Lax Ha, Tahltan Nation, Nisga’a Nation, and members of the public.

Update on MMER Schedule 2 Amendment Process

An additional round of public consultation sessions was held in September 2014,
following the approval of the BC EA Process. The objective of this consultation, led by
Environment Canada and DFO was to provide participants an opportunity to comment on
proposed amendments to the MMER under the Fisheries Act. These amendments would
add two water bodies (portions of the tributaries to the North Treaty and South Teigen
Creeks) to Schedule 2 of the MMER, allowing Seabridge to use the water body for the
disposal of mine tailings from the proposed KSM Mine. These meetings included
information on the Project, fisheries compensation options, as well as multiple accounts
analysis for the TMF.

The following public meetings occurred in 2014:

 September 8 – Iskut, BC
 September 8 – Dease Lake, BC
 September 9 – Telegraph Creek, BC
 September 10 – Hazelton, BC
 September 11 – Gitanyow, BC
 September 12 – New Aiyansh, BC
 September 13 – Terrace, BC
 September 17 – Gatineau, QC
 September 23 – Gitwinksihlkw, BC
 September 24 – Laxgalts’ap, BC
 September 25 – Gingolx, BC.

The Government of Canada approved the Project in December 2014. Recent

correspondence with Environment Canada on the Schedule 2 process, dated January 5,
2016, stated that the regional impact analysis statement document was in progress and
will likely be considered by the Treasury Board in 2016.

INTERNATIONAL RIVER IMPROVEMENTS ACT APPLICATION

Seabridge submitted an application for a license under the International River
Improvements Act to Environment Canada on February 2015. The full application is
provided in Appendix K11.

The application was prepared in accordance with Sections 6 and 7 of the International
River Improvements Regulations (C.R.C., c982). The application is for improvements to

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 the Unuk River, specifically within the Sulphurets Creek Watershed (which is a tributary to
the Unuk River).

The application is pending approval by Environment Canada.

Navigable Waters Application

Exemptions to the Navigation Protection Act were submitted as components of the
Application/EIS. Further to a letter received from Transport Canada dated August 1,
2014, Transport Canada subsequently determined that the waterways of the Project
were not navigable waters as defined within the Navigation Protection Act, and as a
result there was no requirement to obtain an exemption to the prohibition pursuant to
Section 24 of the Navigation Protection Act. A copy of this letter is provided in
Appendix K12.

20.2 ENVIRONMENTAL SETTINGS AND STUDIES

The Project is a proposed gold, copper, silver, and molybdenum mine located in the
coastal mountains of northwestern BC, approximately 950 km northwest of Vancouver,
65 km northwest of Stewart, and 35 km northeast of the BC-Alaska border.

The topography of the Project area varies from 240 masl at the proposed CCAR crossing
of the Unuk River, to over 2,300 masl at the highest peak. A significant portion of the
terrain that will host the mining activities occurs at treeline and in alpine terrain. Glaciers
and ice fields dominate the terrain to the north, east, and south of the Project site. The
glaciers have been receding in the last several decades.

The following sections summarize the environmental settings for valued components of
the biophysical and socio-community aspects of the Project. Please refer to Rescan
(2013) for additional details.

20.2.1 BIOPHYSICAL SETTING

CLIMATE AND ATMOSPHERIC CONDITIONS
The meteorological conditions in the area are primarily influenced by the Pacific Ocean to
the west and continental Arctic regions to the northeast. Hence, the Project is in a
transition zone between wet coastal and dry/cold interior climate zones. The influence of
the mountain ranges on the Pacific and continental air masses results in precipitation
and air temperatures that are widely variable across the Project region.

Strong winds generally occur in all seasons at high elevations above the mountains, with
winds generally coming from the northeast, southeast, and southwest quadrants in the
winters and from the southwest quadrant in the summers. Winds at low elevations are
funneled through valleys with a light to moderate down-valley flow of Arctic air from the
northeast in the winter and a light up-valley flow of warm Pacific air from the southwest in
the summer.

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 The regional hydro-climate reflects the interactions between incoming weather systems
and local topography that produce a degree of spatial variability in snowfall and rainfall.
When Pacific air streams confront the west-facing slopes of the Coast Mountains, the
moisture-laden air is forced up the slopes. As the air cools and rises, it is less capable of
holding moisture and releases it as rain or snowfall. The mountains also slow down
cyclonic storms, which can lead to prolonged and sometimes heavy rainfalls. Over the
mountain summit, the air descends and warms, which disperses the cloud and potential
rain through evaporation. The result is a dramatic reduction of precipitation in the rain-
shadow. Within BC, the series of mountain ranges that parallel the coast produce a
decrease in precipitation with increasing distance from the ocean as storms pass over
the successive ranges.

The climate in the local region is typical of temperate rainforest with average monthly air
temperature ranging between -12 and 14.7°C. Within the four-year period of 2008 to
2011, the highest daily maximum temperature ranged between 25.3 and 30.2°C, and
the lowest daily minimum temperature ranged between -22.1 and -31.1°C. Within the
same period, annual precipitation ranged from 689 mm at the Teigen Creek station to
1,914 mm at the Eskay Creek station. The highest precipitation in the local region occurs
in September and October. Subarctic conditions are present at high elevations (generally
above 1,500 masl) where strong winds blowing in a westerly direction predominate in
winter. At low elevations, winds are funneled through valleys—Arctic air from the
northeast in the winter and warm Pacific air from the southwest in the summer.

The air quality in the area proposed for Project development and elsewhere in
northwestern BC is predominantly unaffected by anthropogenic sources, reflecting the
region’s remoteness and the lack of, and localized nature of, sources of anthropogenic
air emissions sources.

GEOLOGY AND GEOCHEMISTRY

Stikinia—a terrane of Triassic and Jurassic volcanic arcs, accreted onto Palaeozoic
basement rocks of the western North American continental margin—forms the regional
geological setting for the KSM Property. Late Cretaceous folding and thrust faulting of
the main stratigraphic groups in the region generated Stikinia’s current structural
features. Thrust faulting is common, and some strata are tightly folded. Remnants of
Quaternary Era basaltic volcanic eruptions occur throughout the region. Early Jurassic
sub-volcanic intrusive complexes are common. Several complexes host hydrothermal
systems rich in precious and base metals, including the copper-gold porphyry deposits at
the Galore Creek, Red Chris, Kemess, Mount Milligan and KSM properties, as well as
related polymetallic deposits, including those at the Premier, Eskay Creek, Snip,
Bruceside, and Granduc properties.

Local geology is dominated by variably deformed oceanic island arc complexes. Late
Jurassic and Cretaceous back-arc basins to the east of the KSM property contain thick
accumulations of fine black clastic sedimentary rocks, all folded and faulted to differing
degrees during late Cretaceous compressional tectonics. Unloading linked to glacier
retreat in the Mitchell Creek and Treaty Creek valleys has resulted in the formation of
exfoliation stress relief fractures parallel to the valley flanks. Dikes, sills and plutonic

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 plugs were intruded into these strata in early Jurassic times. Copper-gold mineralization
is typically best developed at the margins of these intrusions. Extrusive and intrusive
activity has led to rock alteration of various types around the Project mineralized
deposits.

The mineralized zones in the local area and more regionally, tend to be sulphide-rich.
Where sulphide minerals such as pyrite are present, oxidation can create ARD, unless
sufficient quantities of neutralizing minerals are available. In the event that acidic
drainage is formed, low pH conditions can lead to higher rates of metal leaching (ML).
Baseline surface water and groundwater quality in the vicinity of mineralized zones in the
region exhibit relatively low pH and significant metal concentrations, reflecting the
presence of sulphide minerals and the natural occurrence of ML/ARD processes.

PHYSIOGRAPHY
Today, the mountain topography is very rugged. Glaciers are common in high elevations.
Most steep slopes are covered by bedrock and accumulations of rubbly colluvium.
Gentler slopes have a thin mantle of morainal material (glacial till). Thick glacial deposits
are generally restricted to the margins of major valley floors and adjacent lower slopes.
Avalanches and slope failures are common features at high and intermediate elevations
(above 1,500 masl).

Topography in the vicinity of the KSM Property ranges from a low elevation of 240 masl (at
the proposed CCAR crossing of the Unuk River) to more than 2,300 masl at the highest
peak. A large portion of the terrain is situated at, or above, the tree-line and in alpine areas.
Glaciers and icefields dominate the terrain to the north, east, and south of the Project area.
Glaciers in the area have been receding in the last several decades.

GEOHAZARDS
Locally and regionally, geohazards are linked primarily to landslides and snow
avalanches. Landslide hazards are abundant throughout the region. They are attributed
to several factors, including the presence of unstable surficial soils and weak bedrock,
repeated geologically recent glaciations, resulting in over-steepened valley sidewalls, the
loss of slope buttress support following glacial recession, abundance of veneers that are
shallow to bedrock, and the high precipitation environment.

Thick glacial deposits are generally restricted to the margins of major valley floors and
adjacent lower slopes. Much of the surficial cover in the Project area is unstable to
potentially unstable, since all of the main valleys have been subject to glacial advance
and retreat, and associated process such as erosion and deposition. Left behind are
moderately steep upper slopes, steeper valley walls and gently sloping and wide valley
floors.

Unstable lateral morainal till has been deposited on slopes at angles that exceed the
angle of repose, resulting in rubbly colluvium accumulating along moderate steep slopes
and valley bottoms. Post glacial processes have also contributed to terrain instability, as
much of the recent deposits are loose and highly erodible. Periglacial processes are also
in evidence, as several glaciers at the Project site are receding, leaving behind hanging

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 valleys, over-steepened lateral moraines and glacio-fluvial outwash deposits in valley
bottoms. The unloading of the valley walls following glacial retreat has led to pressure
release cracks and associated local instability on over-steepened slopes resulting
geohazards, such as rock fall, debris avalanches and slumping of surficial materials.
These geohazard processes are endemic to the local area.

Snow avalanche hazards are abundant due to high elevation, substantial snow supply
and generally steeper slope gradients, and tend to be associated with terrain that is open
and steep. Since the region is located in a transition zone between maritime and
continental climate zones, significant temperature and moisture fluctuations are
experienced throughout an average winter. The avalanche season typically begins in
early October at the higher elevations, and often extends until late June or early July. In
valley bottoms, avalanches may be experienced from late October to late May.

SOIL DEVELOPMENT
Regional climate and geological history, in combination with local topography and
vegetation, affect soil landscapes found in the local area. In high elevations solifluction,
nivation, and cryoturbation disrupt, displace, and mix soil horizons, while the cold climate
slows down mineral weathering and organic decomposition. Weathered volcanic rocks
provide coarse-textured, acidic parent materials. As a result, soil development is often
weak. The steep terrain results in unstable slopes where soil development is further
hindered by mass movement of surficial materials.

Regosols (weakly developed, well-drained mineral soils in unconsolidated materials) and

occasionally Cryosols (periodically frozen soils) occur in these areas. In lower elevations,
soils are commonly subjected to seepage. Excess moisture and a high incidence of
poorly drained soils are typical. Due to the steep terrain, most common parent materials
consist of colluvial veneers. On lower slopes, soils often develop on morainal deposits.
Dominant soils include Brunisols (well to imperfectly drained mineral soils with partial
horizon development) and Ferro-Humic Podzols (characterized by low base saturation,
low pH, high organic carbon, and a high concentration of iron and aluminum compounds).

HYDROLOGY/SURFACE WATER QUANTITY

Regional and local surface water quantity characteristics were determined from data
collected from specially installed hydrometric stations, used in conjunction with a
regional analysis prepared for long-term hydrometric data from Water Survey of Canada
hydrometric stations. Analysis reveals a clear difference in hydrologic patterns between
the Teigen Creek/Treaty Creek drainages and the Unuk River/Sulphurets Creek
drainages. With the exception of the main stem of Treaty Creek, the amount of runoff
from the Teigen Creek/Treaty Creek drainages is on average nearly 40% lower than from
the Unuk River/Sulphurets Creek drainages. This difference reflects not only differences
in local climate patterns between the two geographically distinct areas, but also the
strong influence of glaciers on surface water volumes for the Sulphurets Creek drainages.

The monthly distribution of flow tends to be concentrated in the open water season (May
to October), with less than 20% of the annual flow occurring from November to April at a
majority of the regional stations. During the open water season, the distribution of flow

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 depends on the timing of the freshet and the balance between the volumes of water
released during the freshet and the volumes of water resulting from fall rains or glacial
meltwater. Smaller regional watersheds with glaciers show a higher proportion of flow
during July and August compared to the larger regional watersheds with a smaller glacier
percentage. This pattern is also evident in the Project area, especially for the Sulphurets
Creek watersheds.

GROUNDWATER QUANTITY
Groundwater conditions correspond with the mountainous, wet environment that
comprises the Mine Site and the PTMA. Groundwater gradients are high, driven by heavy
rainfall and recharge at higher elevations in the mountains. Valley bottoms are discharge
zones, with groundwater levels near or above (artesian) ground surface. Discharge zones
also exist along valley walls in the Mine Site, where seeps of acidic water have been
observed (with pH readings as low as 2.5). Groundwater levels tend to be deeper at high
elevations (i.e., from 6 m to 33 m below surface) and show more seasonal variation (from
1 m to about 15 m), whereas groundwater levels in the valley bottoms are generally
shallow and show less seasonal variation. Bedrock aquifers are confined (i.e.,
groundwater is at pressures greater than atmospheric pressure). Unconfined aquifers
are limited to the glacial deposits in the valley bottoms.

In the Mitchell Valley, poor quality water at the toe of the glacier is thought to be affected
by groundwater that has contacted mineralized rock (i.e., it has a discharge quality
similar to that in the springs/seeps). Groundwater elevations in wells installed in
overburden (comprised of glacial till) in the Mitchell Valley bottom are similar to the creek
bed elevation, and show little annual variation (less than 1 m), suggesting a hydraulic
connection between groundwater and surface water. Groundwater elevations in wells
screened in bedrock are higher than wells screened in overburden, indicating upward
hydraulic gradients.

Groundwater recharge is considered to be higher in the mountainous areas (reflecting

the orographic effect). For modeling purposes, the recharge rate is estimated at
218 mm/a, or 13% of the mean annual precipitation of 1,650 mm where ground
elevation is more than 1,300 masl, compared to 115 mm/a (or 7% of mean annual
precipitation) where elevation is less than 400 masl. Beneath glaciers and snow pack,
recharge is estimated at only 40 mm/a (2.4% of mean annual precipitation) because of
frozen ground conditions.

SURFACE WATER QUALITY

The hydrological regime is an important determinant of stream water quality in the
Project region. Typical local streams experience a low-flow period between November
and April, and higher flows between May and October associated with freshet, summer
glacial melt, and fall heavy rain events. The hydrological regime affects water quality in
two ways:

 increased flows during freshet, glacial melt, and heavy rainfall events dilutes
concentrations of major ions and total dissolved solids

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  increased sediment load and transport during high-flow periods leads to
increased concentrations of TSS and particle-associated metals.

Streams near the mine site and PTMA have distinct surface water quality. ML due to
naturally occurring ARD is associated with total and dissolved metal concentrations in
Mitchell and Sulphurets creeks that are frequently higher than levels set in BC water
quality guidelines for the protection of freshwater aquatic life. The high suspended
sediment load, low concentrations of bioavailable nutrients and high concentrations of
total and dissolved metals identified in Mitchell and Sulphurets creeks and the Unuk
River are likely contributing factors to the poor productive capacity of mine site streams.
The lower suspended sediment load, increased concentrations of bioavailable nutrients,
and lower concentrations of total and dissolved metals identified in the Snowbank,
Teigen, Treaty and Bell-Irving watersheds are likely contributing factors to the greater
productive capacity of PTMA streams relative to the mine site.

GROUNDWATER QUALITY
Groundwater quality at the mine site is heavily influenced by the sulphide ore deposits.
Groundwater is acidic near to, and within, the mineral deposits, with pH measurements
as low as 2.5 in seeps along the valley walls of Mitchell Creek. Concentrations of certain
metals are elevated in groundwater throughout the mine site, and are particularly high
near and within the mineral deposits. Metals with elevated concentrations include iron,
aluminum, copper, chromium, lead, manganese and zinc. Groundwater in the Mitchell
Valley is not suitable for human consumption or the sustenance of fresh water aquatic
life.

Dissolved metals concentrations are generally low in the PTMA. The water is fresh (low
salinity) with neutral to slightly alkaline pH, ranging from 7.4 to 8.8.

FISHERIES
The baseline fish and aquatic habitat study area encompasses two major watersheds
that include the Unuk and Bell-Irving rivers. The north and west areas of the Project are
situated within the Unuk River watershed, which crosses into Alaska and discharges into
Burroughs Bay and eventually the Pacific Ocean. There are eight assessed sub-
watersheds within the Unuk River watershed, in addition to the main stem of the Unuk
River. The eastern area of the Project is situated within the Bell-Irving River watershed,
which discharges into the Nass River. There are eight assessed sub-watersheds within
the Bell-Irving River watershed, in addition to the main stem of the Bell-Irving River.
There is one assessed sub-watershed within the Bowser River watershed (Scott Creek), in
addition to the main stem of the Bowser River.

There is a 200 m long cascade in Sulphurets Creek, approximately 500 m upstream of

the confluence with the Unuk River. Dolly Varden are present in Sulphurets Creek below
the cascade, but no fish species are present above the cascade, in areas around the
mine site. No salmon species are present within Sulphurets Creek.

Dolly Varden is the only species present in North Treaty and South Teigen creeks within
the footprint of the proposed TMF in the Bell-Irving watershed. Dolly Varden, bull trout,

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 mountain whitefish, and rainbow trout are present in South Teigen Creek, downstream of
a 2.5 m high falls and outside of the TMF footprint. Dolly Varden dominate the species
composition (95%) downstream of the falls in the lower reach of South Teigen Creek. No
salmon species have been observed in South Teigen, North Treaty, or Tumbling creeks.

AQUATIC HABITAT
Sediments in the area downstream of the mine site (in Mitchell Creek and Sulphurets
Creek) are of poor quality. These sediments are often inhospitable, with low nutrient
availability (total organic carbon, nitrogen, and phosphorus), relatively coarse sediment
structure that limit the range of available habitat for benthic invertebrates, and metal
concentrations that are frequently higher than sediment quality guidelines. Surveys of
primary producer (periphyton) and benthic invertebrates in the creeks downstream of the
mine site revealed low standing stocks (biomass and density) and low diversities
(richness and Simpson’s diversity) of the aquatic communities, which is consistent with
both poor water quality and sediment quality.

Sediment quality in the PTMA is generally better than downstream of the mine site, but
metal concentrations are often elevated above sediment quality guidelines. Some areas,
particularly those downstream of the wetlands (e.g. South Teigen Creek), had relatively high
organic carbon content and favorable particle size distributions that would provide a better
range of suitable habitat to support more diverse benthic populations. There are some
areas that support more abundant and diverse aquatic communities (e.g. Teigen Creek),
while other areas have periphyton and benthic invertebrate communities that are less
abundant and less diverse (e.g., Treaty Creek).

TERRESTRIAL ECOSYSTEMS-GENERAL REGIONAL CHARACTERIZATION

The Project is situated within the Skeena Mountains Ecoregion, the Boundary Ranges
Ecoregion, and the Nass Ranges Ecoregion. Towards the coast, the Boundary Ranges
consist of extensive ice fields, capping granitic intrusions remnant of the Coast Range
Arc, and are dissected by several major river valleys, including the Nass River. Inland and
east of the Boundary Ranges lies the Skeena Mountains Ecoregion, which consists of
high rugged mountains and a moist, coast/interior transition climate, supporting many
glaciers. The Nass Ranges Ecoregion, with a climate somewhat transitional between
coastal and interior regimes, is a mountainous area situated west of the Kitimat Ranges
(which are located south of the Project).

A wide range of topography and vegetation communities occur within the regional study
area (RSA) and local study areas (LSAs) defined for the purposes of assessing terrestrial
ecosystem effects. These include low-elevation wetland and shrub-dominated riparian
and floodplain ecosystems, low- and intermediate-elevation forests, subalpine and alpine
meadows, and sparsely- to non-vegetated rocky and glaciated terrain. Many of these
ecosystems provide valuable habitat for wildlife, as well as economically important forest
and non-timber forest resources.

Locally and regionally, six Biogeoclimatic Ecosystem Classification (BEC) units are
present, four of which are forested units, with the other two being undifferentiated alpine-
parkland units. These Biogeoclimatic Ecosystem Classification units include the Boreal

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 Altai Fescue Alpine unit, which is most widespread in the RSA, as well as the Coastal
Mountain-heather Alpine, Coastal Western Hemlock, Engelmann Spruce–Subalpine Fir,
Interior Cedar Hemlock and Mountain Hemlock units. Nearly half (46%) of the RSA
consists of non- and sparsely-vegetated ecosystems, while 26% consists of forested
ecosystems, and 21%, of shrub-dominated ecosystems (including avalanche
ecosystems). Glaciers and permanent snow/ice comprise approximately 22% of the RSA.
Of the forested area, 66% is mapped as mesic forest, followed by moist and wetter
forests (12% and 11%, respectively).

Twelve ecosystems (six terrestrial and six wetland types) that have been blue-listed or
red-listed by the BC Conservation Data Centre have been identified within the RSA and
LSA. Of the 38 rare individual plant species that were observed within the LSA, most
were found at high elevations in the Sulphurets Creek watershed. The 38 rare species
include 27 lichens, nine vascular plants and two mosses.

WILDLIFE SPECIES
Mature forests, wetlands, alpine areas, and riparian forests provide high-value habitat to
a diverse wildlife community. Common species or groups that occur in the RSA include
ungulates (e.g., moose and mountain goat), omnivores/carnivores (e.g., grizzly bear,
black bear and wolves), furbearers (e.g., fisher, marten and wolverine), hoary marmots,
bats, birds (forest birds, raptors and waterfowl), and amphibians (e.g., Columbia spotted
frog and western toad). Forest harvesting within the RSA has been minimal compared to
many other areas in BC, due to the remoteness of the area and the relatively poor
productivity of the forests, so that the wildlife habitats found in the majority of the wildlife
RSA are essentially undisturbed.

Moose

Moose are common throughout BC’s forested areas with an estimated population size of
170,000 animals. Habitat suitability modeling and winter aerial surveys identified moose
habitat in the wildlife RSA. Winter habitat has been identified as critical for maintaining
moose populations and habitat modeling focused on this season. The majority of good
quality winter habitat for moose occurs along river valleys within the interior survey area
on the eastern side of the RSA, including the Bell-Irving River, Treaty Creek, Snowbank
Creek and Teigen Creek, and also surrounding Bowser Lake. A smaller amount of moose
habitat occurs in the western, coastal-influenced part of the RSA, along the Unuk River.

Baseline aerial moose surveys in the winter of 2009 revealed that the density and
number of moose (adjusted for sightability) was higher in the eastern interior area of the
RSA, near the PTMA, Treaty Creek, Bell Irving River, and Bowser Lake (0.59 moose/km2;
198 moose) than in the western coastal area, near the mine site and Unuk River (0.27
moose/km2; 33 moose). A lower male to female ratio was observed in the interior area,
which is indicative of harvest pressure on males where access to high-quality moose
habitat is available from Highway 37 along the Bell-Irving River and along forestry roads
near Bowser Lake. The regional moose population is currently vulnerable.

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 Mountain Goats

In 2000, the total number of mountain goats in BC was estimated at approximately

50,000 individuals, of which between 16,000 and 35,000 occur within the Skeena
Region. The most suitable year-round goat habitat in the RSA occurs in the eastern RSA
along the Snowslide Range, and in the western RSA around John Peaks to the west of the
Mine Site. Within the LSA, suitable habitat was identified in the mine site and southeast
of the TMF. Summer surveys in 2008 observed 230 goats in 62 groups in the RSA.
Winter 2009 survey observed 178 goats in 69 groups in the RSA. Goats were observed
near the mine site during both the winter and summer surveys. In the PTMA, goats were
observed on the Snowslide Range (i.e., the mountain range between the PTMA and the
Bell-Irving River). In addition, a potential mineral lick was identified in the valley between
the Sulphurets and Kerr pits. An additional mineral lick was observed during baseline
surveys for the Brucejack Mine on the Snowslide Range, which encountered slightly
higher numbers of goats and groupings.

Grizzly and Black Bears

Grizzly bears are found throughout BC, from sea level and river-valleys to alpine regions.
BC contains more than 50% of the Canadian population of grizzly bears, with an
estimated 13,800 grizzlies in the province. Grizzly bears are considered a species of
special concern by the Committee on the Status of Endangered Wildlife in Canada and
are blue-listed in BC. Habitat suitability modeling revealed that overall, between 8% and
38% of habitat within the RSA was identified as Moderately High and High rated habitat
for spring (27%), summer (38%), and fall. In addition, 5% of the LSA was identified as
suitable denning habitat for grizzly bears, particularly in the PTMA. The area near the
proposed TMF and TCAR has also been identified as a candidate grizzly bear Wildlife
Habitat Area. Based on baseline studies in 2008 and 2009, the superpopulation (i.e. the
total number of grizzly bears that used the RSA during the course of the studies) was
estimated to include 31 females and 27 males, for a total of 58 bears.

Black bears are common and widespread in BC. The population estimate in 2001 was
between 120,000 and 160,000 in the province, with highest densities along the coast,
including within the wildlife RSA. During grizzly bear DNA baseline study, black bear hairs
were collected incidentally. Black bears were detected throughout the RSA and LSA
along all river drainages, particularly along the Unuk, Bell-Irving and Bowser rivers; and
near Bowser Lake, and in the Treaty and Teigen creek valleys. In addition, black bears
were the species most frequently observed incidentally in the LSA and RSA.

Furbearers

An evaluation of the BC Fur Harvest Database identified 14 furbearer species that were
harvested in areas within and surrounding the RSA. The most commonly trapped species
included American marten, American beaver, and red squirrel. Trapped species also
include the provincially blue-listed fisher and the federally listed wolverine. American
marten has historically been the most frequently harvested and most valuable
component of the regional fur harvest. The majority of the forested habitat within the
RSA was modeled as highly suitable winter habitat for marten. Within the RSA,

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 continuous blocks of highly suitable habitat were distributed across low elevation within
all major watersheds, particularly in mature forests along the Unuk River watershed.
Over a quarter of the LSA was identified as highly suitable winter habitat for marten,
including most of the forest habitat within the TMF and the low-elevation older forests
along the Coulter Creek and Treaty Creek corridors. During wildlife baseline studies in
2008 and 2009, nine furbearer species or their sign were observed. The most frequently
observed species and/or sign were black bears, red squirrel, and marten.

Small Mammals and Groundhogs

Small mammals are an important prey source for predatory birds and other mammals.
Trapping surveys were conducted in the LSA in 2008 and 2009. Over the two-year
baseline study, seven small mammal species were identified in the LSA, none of which
are of conservation concern in BC. Species observed include Keen’s mouse, Northern
red-backed vole, meadow vole, meadow jumping mouse, Cinereus shrew, dusky shrew
and Nearctic brown lemming. Productive habitats for small mammals were identified
within low elevation riparian areas and adjacent coniferous forests.

Field studies of hoary marmots and Arctic ground squirrels conducted in 2008 and 2009
did not detect Arctic ground squirrels, but marmot colonies were distributed throughout
the alpine in both the mine site and PTMA, with the highest densities observed in alpine
areas (e.g., Snowslide Range) near the PTMA (average 0.62 colonies/km2), surrounding
the proposed TMF. The mine site is characterized by steep and rugged coastal mountain
terrain, which is less suitable marmot habitat than occurs in the PTMA, which has larger
areas of alpine meadow and gentler mountain topography.

Bats

Nine bat species potentially occur within the LSA, two of which were categorized as likely
to occur—little brown myotis and Western long-eared myotis. The other seven species
were categorized as possibly occurring—California myotis, Keen’s long-eared myotis,
northern long-eared myotis, long-legged myotis, Yuma myotis, silver-haired bat and big
brown bat. Four of these nine species are of provincial or federal conservation concern—
northern long-eared myotis, Keen’s long-eared myotis, silver-haired bat and little brown
myotis. Little brown myotis and western long-eared myotis were observed mainly within
riparian habitat. The most important habitat features for bats are cave-based
hibernacula, typically associated with karst (limestone) topography. The only area in the
LSA with exposed limestone is located in McTagg Creek, extending south to Sulphurets
Creek.

Birds

During 2008 and 2009 baseline studies, 93 bird species were detected—eight raptor
species, 25 wetland bird species and 60 forest and alpine bird species. Raptors include
hawks, falcons, owls and other birds of prey. Wetland birds include ducks, geese,
shorebirds, and other bird families associated with water bodies. Forest and alpine birds
include songbirds, hummingbirds, woodpeckers and game birds in terrestrial areas.

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 Eight raptor species were recorded in the RSA, including bald eagles, golden eagles,
northern goshawks, ospreys, red-tailed hawks, merlins, rough-legged hawks and Swainson’s
hawk. In BC, the rough-legged hawk is blue-listed and the Swainson’s hawk is red-listed. In
addition, the northern goshawk laingi subspecies is red-listed in BC and designated as
threatened under the Canada Species at Risk Act (SARA 2002). It is unknown if the northern
goshawks observed during baseline surveys are of the laingi subspecies. Two raptor nests
were observed, both in riparian areas.

Twenty-five species of wetland bird were identified during the 2008 and 2009 baseline
surveys. Three species identified in the RSA are of regional or provincial conservation
concern: harlequin duck (provincially ranked as vulnerable during the non-breeding
season), surf scoter (which is blue-listed and provincially ranked as vulnerable during the
breeding season), and trumpeter swan. Harlequin ducks were observed on the Bell-Irving
River and along Teigen Creek during the spring. A group of seven surf scoters was
observed on Treaty Creek during fall 2008, and trumpeter swans were detected along
Treaty Creek and on Border Lake. Areas with high species diversity during the breeding
period were identified in wetland complexes associated with the confluence of Teigen
Creek and Bell-Irving River, and along Treaty and Todedada creeks. In contrast, the
habitat associated with the mine site and its drainages does not appear to provide good
breeding habitat for most wetland species.

Sixty forest and alpine bird species were observed in the RSA in 2008 and 2009. The
greatest richness of species, highest numbers of individual birds and highest diversity of
birds were recorded within the proposed TMF, along the CCAR corridor adjacent to the
Unuk River, and near Bowser Lake. The olive-sided flycatcher, which is federally listed as
threatened (Schedule 1), was observed within the RSA adjacent to Unuk Lake. Nine
nests belonging to five different species were observed during field surveys. Seven nests
were located in the mine site, and two near Teigen Creek. The five species with
confirmed nests were yellow warblers, dark-eyed juncos, Swainson’s thrush, American
three-toed woodpecker and red-breasted sapsucker.

Amphibians

The western toad is a federally listed species of special concern that is protected under
Schedule 1 of the SARA. In British Columbia it is considered secure but it is afforded
protection under the Wildlife Act. During 2009, three western toad breeding sites were
observed, all of which were located outside of the LSA in ponds at low elevation, in
shallow open water, with an open canopy, and warm water temperatures. Two toad
breeding sites were found on West Teigen Lake, and a third at low elevation on the lower
reaches of Teigen Creek, near the confluence with the Bell-Irving River. Other breeding
sites likely occur in the RSA, though no high-quality potential sites were identified within
the Project footprint or LSA, although moderately suitable habitat is present.

Two additional amphibian species were observed within the RSA near Teigen and Treaty
Creeks—Columbia spotted frogs and wood frogs. Neither of these two species is of
conservation concern.

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 Species at Risk

Forty listed species either occur or could potentially occur within the RSA and LSA, based
on species distribution maps. Five species are listed in Schedule 1 of SARA that are
confirmed present or are likely to occur. Western toad and olive-sided flycatcher were
observed during baseline surveys, and rusty blackbird and common nighthawk likely
occur. The northern goshawk laingi subspecies occurs in coastal BC, mainly on islands.
Although northern goshawks were observed during baseline surveys, it is unknown
whether they were the laingi subspecies, or the atricapillus subspecies, which is not at
risk. However, for the environmental assessment, northern goshawk laingi were
considered to likely occur in the RSA or LSA (Rescan 2013).

20.2.2 ECONOMIC, SOCIAL, AND CULTURAL SETTING

GOVERNANCE
There are five levels of governance in the area of northwestern BC where the Project will
be developed. Municipal, regional, provincial and federal bodies comprise the non-
Aboriginal leadership, while Aboriginal communities have their own governing bodies.

The Project is situated in the Regional District of Kitimat-Stikine, and Electoral Area A of
the Bulkley Nechako Regional District. Local communities include municipalities, Nisga’a
villages, Indian reserves, and unincorporated settlements. Municipal governance only
exists for the District of Stewart, the City of Terrace, the Village of Hazelton, the District of
New Hazelton and the Town of Smithers. The remaining communities that are not
administered by Aboriginal bodies (Dease Lake, South Hazelton, Bell II, Meziadin Junction
and Bob Quinn Lake) are unincorporated, and are governed by the regional district in
which they are situated.

For Aboriginal communities, the base level of governance is the Nation or Band, and they
may be further represented by a multi-party council. Nisga’a communities include the
villages of Gitlaxt’aamiks (New Aiyansh), Gitwinksihlkw (Canyon City), Laxgalts’ap
(Greenville), and Gingolx (Kincolith). Populated Indian reserves include: Gitanyow 1, five
Tahltan communities (Telegraph Creek 6 and 6A, Guhthe Tah 12, Dease Lake 9 and Iskut
6) and five Gitxsan Nation communities (Gitwangak, Gitsegukla, Gitanmaax, Glen Vowell,
and Kispiox). The Skii km Lax Ha reside in the Hazelton area.

ECONOMIC SETTING
Economically, the Project region has been dependent upon timber and minerals for well
over 100 years. The majority of non-Aboriginal communities in the region were initially
established to serve natural resource activities such as the mine operation near Cassiar,
Stewart, Smithers, and Bob Quinn Lake. To date, the region’s economic and social
diversity has been constrained by limited access and infrastructure, lengthy distances,
remote and small communities which provide limited labour or services, and long winters.
Investment within the region has fluctuated based on the strength of the forestry and
mining industries, global commodity prices and the value of the Canadian dollar.

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 Forestry, fishing, and coal mining were the key economic drivers of northwestern BC
through the 1950s to the 1980s. The BC government pursued a policy of industrial
resource development that historically saw rapid community growth. Within the region,
this helped establish local economies and an experienced, if modest, labour force
focused on natural resource extraction. Typically, the region’s communities tend not to
be economically diverse, so they are highly sensitivity to resource demand fluctuations.
With the downturn in the forestry industry over the past 10 years, the majority of sawmills
and pulp mills in the region are currently closed. Closures of mines in the area, such as
Eskay Creek Mine and Golden Bear, have also affected the resource sector.
Nonetheless, today, the economies of local communities continue to be largely resource-
based, and continue to focus on supporting these sectors in the region.

Transportation challenges throughout northwestern BC are primarily due to the

mountainous topography, which restricts development of transportation networks
primarily to valley bottoms. The existing transportation network, including road, rail, and
port facilities, supports an economy focused on exporting its natural resource to southern
and international markets. Highway 16 and highways 37 and 37A act as the primary
transportation corridors. Highway 37 is the only road between Gitwangak (Kitwanga, at
the junction with Highway 16) and the Yukon Territory. All highways in the region are
paved, except for small sections of Highway 37 north of Iskut and Highway 51 to
Telegraph Creek. Terrace and Smithers have major airports capable of handling jets,
while Stewart, Bob Quinn, Dease Lake, Iskut, and Telegraph Creek have smaller airstrips.
The CNR rail line connects the Port of Prince Rupert to the rest of North America via
Prince George, running along the Highway 16 corridor through the communities of
Terrace, Hazelton, New Hazelton and Smithers. Mobile cellular phone coverage is limited
to the larger communities along Highway 16.

Overall, the economy in northwestern BC is gradually becoming more diversified. Newer

industries that have become important to the region on recent years include energy
production (including hydroelectric power generation) and tourism. In some
communities, employment levels have increased in the public service, sales and service,
tourism, transportation, and mineral exploration sectors. Employment sectors in local
Aboriginal communities now include significant sales and service, mineral exploration,
labour and government administration components. There are recent signs that the
population decline may be reversing.

Today, the mining industry continues to provide an important source of employment in

the region, supplying an estimated 30% of jobs for communities along Highway 37 in
recent years.

SOCIAL SETTING
Recent economic changes have led to a general decline in the overall region’s population
over the past decade or more, largely due to the loss of jobs (e.g., mine closures),
particularly among non-Aboriginal communities. This decline is especially evident in
Stewart.

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 The considerable distances between communities exert a key influence on the social,
economic and heritage environment of regional residents. It is common to travel two or
more hours between communities. Isolation may also be exacerbated by weather-related
road closures. The larger centres of Smithers and Terrace, located in the south of the
region, provide much of the region’s goods and services. Transportation and
communication options are limited, and long travel distances are often required to reach
service centres. The sense of isolation in northern BC is further accentuated by the
location of BC’s major urban centres in the extreme south of the province.

Services vary considerably, depending on the size of the community, with smaller
communities providing limited services and accommodations. Smithers, Terrace, and to
a lesser extent Stewart, provide a broad range of services and supplies, including
accommodation and support for mining and forestry activities. The number of recreation,
health, social and educational services available within communities has dropped in
parallel with the population. Regional hospitals are located in Terrace and Smithers, and
there are well-equipped health clinics in both Dease Lake and Stewart, although existing
services are contingent on stable populations. Primary and secondary education
facilities exist in many communities, while educational facilities within certain Aboriginal
communities do not extend beyond elementary school. Northwest Community College
and Northern Lights College also offer facilities and programs for regional residents.

ABORIGINAL GROUPS
Several Aboriginal groups may be potentially affected by the Project. The PTMA is
situated within the Nass Area, as defined by the NFA, but falls outside the NWA, and also
the Nisga’a Lands owned in fee simple by Nisga’a Nation under the terms of the NFA,
which came into effect on May 11, 2000. The Tahltan First Nation (as represented by the
Tahltan Central Council) asserts a claim over part of the Project footprint. Both the
Gitanyow First Nation (notably wilp Wiiltsx-Txawokw) and the Gitxsan Nation (as identified
by the Gitxsan Hereditary Chiefs Office), including wilp Skii km Lax Ha, which represented
itself separately in the EA process, have identified potentially affected interests within the
broader region, notably downstream of the PTMA. The Skii km Lax Ha are claiming an
area covering the mine site and PTMA.

Aboriginal people have a significant physical, cultural and historical presence within the
Project region. In 2006, approximately 32% of the Regional District of Kitimat-Stikine’s
population was reportedly Aboriginal. Furthermore, the populations of most of the
region’s smaller communities, notably those located along the north-south corridor of
Highway 37 and the east-west corridor near Highway 16, are predominantly Aboriginal.
The decline in the forestry and fishing industries since the 1980s has negatively
impacted Aboriginal communities, as reflected by high unemployment rates. The current
socio-economic setting of the region’s Aboriginal communities is now in the process of
evolving again due to opportunities provided by the mineral industry and tourism.

LAND USE SETTING

The Project is located in an area of northwestern BC known as the “Golden Triangle”, due
to its high mineral potential and the occurrence of several gold projects in the region. For
the past century, land and resource uses in the region have been largely driven by

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 forestry, mining and mineral exploration, and this is still true today. A limited amount of
commercial and non-commercial recreation also occurs in the region, including hunting,
trapping, fishing, heli-skiing, hiking and camping.

Within the Project region, exploration projects were historically focused in areas between
the mountainous Knipple Glacier and Eskay Creek areas. Placer claims are present in
several areas, including in Mitchell and Sulphurets creeks. Two mineral developments
have been active within the region since the 1990s, including the Eskay Creek Mine
which operated between 1994 and 2008, primarily extracting silver and gold, and the
Brucejack (Sulphurets) Lake underground development project, which ended in 1993.
Developments associated with the former Eskay Creek Mine include an access road
connecting Highway 37 to the Eskay Creek area, a mill site, and other support facilities
and roads.

Limited timber harvesting has been carried out within the region, with former operation
limited to areas in the Nass Timber Supply Area (Nass TSA) along the Bell-Irving River and
Highway 37. Timber harvesting contributed to the establishment of Meziadin Junction,
with most of the harvesting activities occurring to the south of the Project area. Cut
blocks within and immediately surrounding the region have been limited in scale and
focused on pulpwood. Logs are transported to Stewart for shipping to overseas markets,
or trucked to Terrace and Smithers.

Sections of the RSA are associated with the traditional hunting activities of local First
Nations communities. Archaeological evidence suggests that pre-contact hunting
activities have occurred in areas throughout the RSA. Sections along the Bell-Irving River
have been used for traditional hunting and fishing, and cabins belonging to the Skii km
La Ha are located within the RSA. Subsistence and resident hunting and fishing has
continually occurred from the time of European contact in the region through to modern
times. Resident hunting within the RSA has typically focused on moose within Wildlife
Management Unit (WMU) 6-21, and on black bear and grizzly bear within WMU 6-16 and
6-17.

Trapping for fur-bearing animals has also historically influenced land use within the RSA,
with both Aboriginal and non-Aboriginal trappers. Cabins associated with trapping
activities are located along the Unuk and Bell-Irving River valleys, and are also used for
hunting and fishing purposes. Registered traplines have records dating back to 1985,
though the areas were potentially used before that time. Three traplines in the area are
held by Aboriginal trappers. Areas near Treaty and Snowbank creeks have also been
used for guide outfitting and angling operation.

Recreation, both commercial and private, such as guided mountaineering, guided river
rafting and heli-skiing, has occurred in various areas within the RSA. Only a limited
number of commercial operators have targeted the terrain within the RSA, due to its
ruggedness and remoteness. Difficult access to these areas means that encounters with
other individuals is infrequent, and the sense of isolation is an important part of the
experience offered to clients. Areas near the Bell-Irving River (such as the Snowslide
Range and Treaty Creek) see higher use because they are easier to access from Highway
37. Additionally, the Unuk River is used for commercial rafting adventures, and is

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 accessible from the Eskay Creek Mine road or upstream from Alaska. Recreational
activities, particularly fishing and heli-skiing, have contributed to the establishment of
outdoor lodges, including Bell 2 and Spey/Boundary Lodge. Such activities, however, are
seasonal and of short duration, so there are no formal recreational trails, roads or other
infrastructure outside of the aforementioned lodges.

LAND USE PLANNING CONTEXT

The Project area is subject to the provisions of two land use plans—the Cassiar Iskut-
Stikine Land Resource Management Plan (LRMP) and the Nass South Sustainable
Resource Management Plan (SRMP).

Land management within the Cassiar Iskut-Stikine LRMP includes objectives intended to
preserve the physical, aesthetic, and cultural characteristics of the region. The LRMP
created 14 protected areas for which resource conservation is emphasized, and three of
which are located within or adjacent to the land use RSA. Notably, the LRMP acknowledges
the mineral and energy resource potential within the Plan area. Under the LRMP,
exploration and development of mineral deposits, as well as construction of access roads,
are allowable activities, excepting within Protected Areas. One Resource Management
Zone (RMZ), the Unuk River RMZ, overlaps the LSA, including portions of the Coulter Creek
access road. The management goals for the Unuk River RMZ are focused on preserving
grizzly bear habitat and maintaining visual quality of the terrain from the Unuk River, while
allowing for adjacent logging and mineral development.

Land management goals within the Nass South SRMP were developed in partnership
with NLG, the Gitanyow First Nation, stakeholders, and government agencies, with the
goal of guiding development and conserving environmental and cultural resources within
the southern portion of the Nass TSA. The Nass South SRMP provides guidance on
permitted land uses, and addresses sustainable management issues for land, water and
resources, while aiming to facilitate economic opportunities. Mineral resource activity,
timber harvesting, commercial recreation and tourism, guide outfitting, hunting, fishing,
trapping and cultural land uses are all allowable activities.

20.3 WATER MANAGEMENT

Water is a key component in the mining process in that it is required for, and affected by,
mining activity. Over the life of a mine, waterbodies can by temporarily diverted, created,
or drawn upon to allow mining activity to occur. Additionally, water acts as a transport
medium for potential contaminants to be introduced to the receiving environment.
Therefore, water must be managed for a variety of reasons including compliance with
operation permits, smooth and uninterrupted operation of the mine, and minimization of
effects on water quality and quantity in the receiving environment.

20.3.1 OVERVIEW OF WATER MANAGEMENT

An extensive system of water management facilities will be constructed and maintained
throughout the life of the Project to divert fresh (non-contact) water away from disturbed
areas and to collect water that has contacted disturbed areas (contact water) for

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 treatment before release into the environment. The mine site water management plans
are laid out in five-year increments (shown in Appendix 4-N of the Application/EIS).
Please refer to Section 18.2 of this PFS for details of the updated water management
plans for the Project.

An overview of the water management plan for operations is included in Figure 20.1. The
layout of the ultimate water management plan for the mine site is shown in Section 18.0,
in Figure 18.5. These facilities will include:

 the WSF contained by a 165-m-high WSD, which will have a crest length of
approximately 650 m (KCB 2012a)
 the HDS WTP to treat all contact water using a high density sludge water
treatment process
 a Selenium WTP designed to treat 500 L of water from seepage collected from
the base of the Mitchell-McTagg RSF, and/or Ker waste stored in the Sulphurets
pit, or from other point sources such as the WSF
 the MDT and related inlet structures to divert clean water flows from the Mitchell
Glacier and surrounding areas upstream of the proposed Mitchell pit and
Mitchell block cave mine to the Sulphurets Creek drainage
 the MTDT and related dams and inlet structures to divert clean water flows from
the McTagg Creek Valley away from the McTagg RSF and downstream mine
facilities
 the Mitchell NPWDA to depressure the north wall of the Mitchell pit and to
conduct surface contact water from the vicinity of the Mitchell Glacier around
the Mitchell pit
 the MVDT to route water from the Mitchell NPWDA under the Mitchell Creek
Valley to the WSF
 the Mitchell underground drainage tunnels to route water from the lower
reaches of the Mitchell block cave mine to a point about 300 m below the HDS
WTP where it will be pumped to surface
 secondary diversion ditches and pipelines implemented within the Mine Site
during the operation phase to reduce contact water volumes and to direct open
pit contact water and discharge from pit dewatering wells to the WSF.

These facilities are discussed in greater detail in the Project Description (Volume 4) in
Rescan (2013).

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Figure 20.1 KSM Project Mine Site Water Management at Operations

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20.3.2 SUMMARY OF WATER MANAGEMENT PLAN
Seabridge is committed to a comprehensive Water Management Plan that applies to all
mining activities undertaken during all phases of the Project. The main objective of the
Water Management Plan is to regulate the movement of water in and around the area of
the Project in order to ensure long-term environmental protection.

A separate, more detailed Environmental Effects Monitoring (EEM) Plan will also be
developed in consultation with regulators and in compliance with the MMER (SOR/2002-
222) and provincial discharge limits as a requirement of the permits and licenses under
which the Project will operate.

OBJECTIVES AND TARGETS

The objectives of the Water Management Plan are to provide a basis for management of
surface water on site including:

 diverting non-contact water around the Mine Site and PTMA

 protecting ecologically sensitive areas and resources and avoiding harmful
impacts to aquatic life and wildlife habitat
 providing and retaining water for mine operation
 defining required environmental control structures
 collecting and treating contact water from the Mine Site to meet discharge
requirements prior to release to the receiving environment.

The targets intended to optimize the Water Management Plan to achieve surface water
objectives include:

 minimizing the production of contact water by implementation of best

management practices and water diversion measures
 collecting and treating contact water where required in order to meet applicable
water quality standards
 implementing and maintaining an on-site monitoring and control system to
regulate surface water quantity and quality.

LEGISLATION AND STANDARDS

The Water Management Plan has been developed to satisfy guidelines and requirements
specified in the following legislation:

 BC Mines Act (1996)

 Fisheries Act (1985)
 Canada Water Act (1985a)
 BC Water Act (1997n)
 BC Water Protection Act (1996o).

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 ACTIONS TO AVOID, CONTROL, AND MITIGATE
A variety of diversion, collection, and treatment structures will be developed to manage
surface water for the Mine Site and PTMA. Surface water management activities will
consist of non-contact water diversion and contact water collection and treatment. By
minimizing the amount of contact water that is produced on the Project site, surface
water diversion reduces the volume of water that must be treated. Additionally, surface
water diversion decreases the potential for erosion and sediment production by limiting
the volume of water that enters a work area. The general water management measures
that will be used during all phases of the Project can be found in detail in Volume 24 of
Rescan (2013).

MINE SITE
Water management structures and facilities will be constructed to separate contact water
for treatment and to route non-contact water around the Mine Site to the environment.
The main objective is to minimize the amount of non-contact water reporting to the WSF
to reduce water treatment requirements.

PROCESSING AND TAILING MANAGEMENT AREA

Water management in the PTMA is focused on the construction of diversion channels to
control and divert water in the PTMA catchment area to either South Teigen Creek or
North Treaty Creek.

MONITORING
Monitoring programs will enable Seabridge to measure the success of the management
strategies and to identify where additional mitigation is necessary.

Several management plans and monitoring programs include components that will help
ensure the long-term protection of the aquatic environment downstream of the Project.
These management and monitoring programs include but are not limited to:

 Aquatic Effects Monitoring Program (AEMP)

 EEM Program
 Groundwater Management/Monitoring Plan
 Fish and Aquatic Habitat Management Plan
 Wetlands Management Plan
 Metal Leaching and Acid Rock Drainage Management Plan
 Tailing Management Facility Management and Monitoring Plan
 Water Storage Facility Management and Monitoring Plan
 Spill Prevention and Emergency Response Plan
 ML and ARD Management Plan
 Glacier Monitoring Plan

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  Water Management Plan
 Construction Management Plan
 RSF Management and Monitoring Plan;

The AEMP includes water quantity, water quality, sediment quality, water toxicity, benthic
invertebrate and fish assessments downstream of all mine infrastructure, including the
WSF and TMF. The AEMP will monitor long-term effects (if any) of effluent decants or
seepages to downstream areas.

20.4 WASTE MANAGEMENT

20.4.1 TAILING MANAGEMENT FACILITY MANAGEMENT AND MONITORING PLAN
Tailing produced after the mined ore has passed through a process of high pressure
grinding, flotation, and leaching at the Treaty OPC will be transported by slurry pipeline to
the TMF. Conventional flotation tailing will be stored in two cells, the North Cell and the
South Cell. A separate tailing stream consisting of sulphide-rich CIL residue tailing,
produced as a waste product in the cyanide leaching process, will be transported in a
pipeline to a fully lined CIL Lined Pond located in the Centre Cell between the North and
South cells, and will operate during the filling of the North and South cells. The TMF is
designed to store 2.3 Bt of tailing produced over the 53-year mine life.

The TMF will ultimately consist of three storage cells retained by four compacted cyclone
tailing dams, the North Dam, the Splitter Dam, the Saddle Dam, and the Southeast Dam.
The tailing dams will be constructed to final heights of 218 m, 194 m, 168 m, and
239 m, respectively. Seepage from the tailing dams will be collected in seepage
collection ponds constructed downstream of the tailing dams.

Requirements for the design, operation, and closure of TMFs on a mine site are legislated
under the Mines Act (1996j) and are covered by sections of the Health, Safety and
Reclamation Code (BC MEMPR 2008), including an updated Section 10 of the Code
which was completed in 2016. In accordance with a Memorandum of Understanding
between the BC Ministry of Energy, Mines and Petroleum Resources (now BC MEM and
the Water Stewardship Division and Environmental Protection Division of the BC Ministry
of Environment (now Ministry of Forests, Lands and Natural Resource Operations and
Ministry of Environment, respectively), the Mines Act (1996j) regulations apply to tailing
storage facilities unless a water licence or waste permit is required. It has been assumed
that a waste permit may be required, but that a water licence will not be required for the
TMF.

The Health, Safety and Reclamation Code (BC MEMPR 2008) applies to “major
impoundments” and “major dams.” A major impoundment is defined as an impoundment
that has a maximum depth of material greater than 10 m at any point, or a maximum
height of retaining dam or dike at any point that exceeds 15 m, or is a storage facility
designed to contain more than 1 Mm3 of fill, or any other impoundment or water
management facility so declared by the Chief Inspector. A major dam is defined as a dam
that is used to store and control water, slurry, or solids and that has a maximum height at

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 any point that exceeds 15 m or that is between 10 and 15 m in height and has either a
crest length that exceeds 500 m, a flood discharge rate that exceeds 2,000 m3/s, or a
reservoir capacity that exceeds 1 Mm3, or any other dam so declared by the Chief
Inspector (BC MEMPR 2008).

The tailing dams and associated seepage recovery dams proposed for the Project fall into
the category of major dams.

LEGISLATION AND STANDARDS

BC’s Mines Act (1996j) provides guidance and approvals for all activities on a mine site,
from exploration through to development, production, closure, and reclamation. It also
requires project proponents to obtain a permit approving the work system and
reclamation program. To obtain this permit, a detailed Mine Development Plan and
Reclamation Program has to be submitted to the Chief Inspector of BC MEM for approval.

Under the Mines Act (1996j), the Health, Safety and Reclamation Code (BC MEMPR
2008) requires proponents to provide:

 a mine plan showing the location of the TMF

 designs for major impoundments and dams developed in accordance with the
criteria provided in the CDA Dam Safety Guidelines (2007)
 an operation, maintenance, and surveillance manual for major dams and
impoundments prior to commissioning
 design for dam slopes that meet long-term stability criteria in accordance with
the CDA (2007) Dam Safety Guidelines
 an Emergency Preparedness Plan for dams classified as High or Very High
failure (or Extreme) consequence
 an annual dam safety inspection report
 the installation of a flood control spillway at closure
 a reclamation plan for tailing ponds and impoundment structures
 a dam stability monitoring program.

The Health, Safety and Reclamation Code (BC MEMPR 2008) requires proponents to
provide plans for the prediction, and if necessary, prevention, mitigation, and
management of ML/ARD. Details for ML/ARD management and monitoring are included
in the Metal Leaching and Acid Rock Drainage Management Plan (Volume 26, Section
26.14 of the Application/EIS).

The Health, Safety and Reclamation Code (BC MEMPR 2008) also requires proponents to
provide plans for soil salvage and handling, erosion control, and soil contamination
prevention. Details for soil management and monitoring are included in the Terrain,
Surficial Geology and Soil Management and Monitoring Plan (Volume 26, Section 26.13
of the Application/EIS).

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 The Environmental Management Plan for construction of the tailing dams, seepage
collection dams, and water control structures is included in the Construction
Management Plan (Volume 26, Section 26.2 of the Application/EIS).

Plans for the control and diversion of water on the Mine Site, including the management
of water around the TMF, are provided in the Water Management Plan (Volume 26,
Section 26.17 of the Application/EIS).

A set of detailed mine development and reclamation plans will be submitted at a later
date as part of the Mine Plan and Reclamation Program Permit application.

DAM STABILITY PLAN

Objective
The objective of the Dam Stability Plan is to construct and operate the tailing dams to
provide safe and stable storage for processed tailing and CIL tailing residue and to
construct and operate the seepage collection dams to provide safe and stable storage of
seepage collected downstream of the tailing dams. The management and monitoring
plan is intended to provide a basis for confirming design assumptions and for tracking
performance during construction, operation, and after the mine closes.

Targets
Targets of the Dam Stability Plan include the following:

 prepare the foundation of dam sites;

 construct dams to meet short-term (during construction) and long-term stability
criteria; and
 control surface and subsurface water.

Actions to Avoid, Control, and Mitigate

The tailing dams and the seepage collection dams have been classified based on the
dam classification scheme presented in the CDA (2007) Dam Safety Guidelines. The
classification scheme considers incremental losses associated with loss of life,
environmental and cultural values, and infrastructure and economic values. The North
dam, Saddle dam, and Southeast dam are classified as Extreme failure consequence.
The Splitter dam is classified as High failure consequence. The seepage collection dams
are classified as significant failure consequence.

Dam design flood and earthquake levels are selected based on the dam classification.
The required minimum static factor of safety for dam design is 1.5 using peak frictional
strength parameters and estimated operating pore pressures in the dam materials and
underlying foundation soils. For earthquake conditions, the minimum required factor of
safety is 1.0 based on pseudo static analysis, assuming 50% strength reduction in any
uncompacted tailing deposits. Assuming full liquefaction of uncompacted tailing
deposits, the minimum required post-earthquake factor of safety against sliding of the
dam is 1.2.

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 Appropriate design criteria have been used for each of the dams (please refer to Volume
26, Section 26.4.2 of the Application/EIS for details of the design criteria available in
2012. Please see Appendix H for the most up to date design criteria.

Details of dam construction, including material properties and construction

specifications, are included in KCB (2012a) of the Application/EIS. Please see Appendix
H for the most up to date construction details.

Landslides, debris flows, and frequent snow avalanches may occur in the East Catchment
Valley and could affect dam stability, creek diversion structures, and mine personnel
safety. Mitigation of slope hazards in the East Catchment Valley can be found in Volume
26, Section 26.4.2 of the Application/EIS.

Please see Volume 26, Section 26.4.2 of the Application/EIS for additional mitigation
measures that will be implemented during the construction, operation, closure, and post-
closure of the dam.

Monitoring
A monitoring program will be developed that will include requirements for inspection of
dams and water control structures and procedures for instrumentation monitoring during
the construction, operation, and closure phases. This information will be included in an
operation, maintenance, and surveillance manual as required by Section 10.5.2 of the
Health, Safety and Reclamation Code (BC MEMPR 2008). The manual will include
principles for the safe operation of the TMF and will include details for monitoring,
training, and inspections associated with dam safety (KCB 2012c).

The results of the monitoring program will be reviewed on a regular basis to measure the
success of the management strategies, to compare the recorded data against design
criteria, and to identify where design changes or additional mitigation may be necessary.

The tailing and seepage collection dams will be monitored during operation by
piezometers to measure phreatic levels in the dam and foundation soils and settlement
pins and to measure deformations of the structures. The monitoring instruments will be
installed on representative sections of the dams. The final locations of the sections and
instruments will be determined after the detailed design has been completed and prior to
permitting.

A program of visual and instrumentation monitoring for the tailing dams and seepage
collection dams may include:

 inspection of the dam crests and slopes for signs of cracking, slumping,
settlement, seepage or piping;
 inspection of dam spillways for potential blockages due to snow avalanche,
landslide, or rock fall debris;
 inspection of pumps and piping systems;

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  inspection of surface water diversion channels and structures to identify
sections where repairs may be required;
 inspection of diversion channels to identify damage or blockages attributable to
snow avalanche or snow accumulation and to identify excessive erosion during
spring runoff;
 installation of piezometers to measure pore water pressures in the dams and
dam foundations;
 installation of survey monuments to measure dam fill settlement and surface
displacement;
 monitoring of pond water levels;
 monitoring of tailing beach widths;
 monitoring of seepage downstream of the dams;
 monitoring of flows in the diversion channels; and
 monitoring of geohazards, in particular snow accumulation and avalanche
potential.

A schedule for routine inspection and instrumentation monitoring will be developed at the
time of mine permitting based on the mine construction and operation schedule.
Threshold values (warning levels) for each instrument and response criteria will be
established and included in an operational, maintenance and surveillance manual. A
contingency measure for increasing dam stability could be to place additional fill to
flatten the downstream slopes of the dams. Contingency measures for reducing net
seepage losses from the tailing facility, if required, could be strategic deposition of tailing
on the inside of the impoundment to reduce the seepage losses.

Geotechnical instrumentation installed at the tailing and seepage collection dams will be
monitored during construction and operation. The instrument readings will be recorded
twice per month during normal operating conditions. In addition to the above
instruments, seepage from the dams will be monitored by weirs installed downstream of
the dams.

Pond levels will be recorded monthly and used, in conjunction with pond filling curves, to
plan the tailing discharge and the operation of the seepage collection ponds.

Flows in the diversion ditches will be recorded on a regular basis and will be used in
assessment of the TMF water balance.

Inspection of the diversion channels will be carried out monthly. Clearing snow and debris
may be necessary at critical channel sections up to four times each year.

Additional inspections of the dams and water control structures will be undertaken
following extreme rainfall events, significant runoff events, or significant earthquake
events.

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 The TMF will remain in operation after the end of mining operations until such time as the
quality of the water stored in the impoundment reaches an acceptable level for discharge
and reclamation is completed. The dam and associated facilities will require ongoing
monitoring and maintenance to ensure dam safety and to meet regulatory requirements
for dam safety.

In the event of temporary mine closure, visual inspection and maintenance of the dams,
diversion channels, collection ditches, and spillways will be required.

Reporting
A review and evaluation of the visual and instrumentation monitoring data will be carried
out regularly to identify the need for contingency measures to reduce seepage and/or to
increase dam stability. The monitoring results and corrective actions will be included in
the site documentation management system and reported to senior management and
regulatory agencies as required.

An annual dam safety inspection report, describing the operation, maintenance, and
surveillance of the tailing dams and water management facilities, will be prepared and
submitted to BC MEMNG as required by Section 10.5.3 of the Health, Safety and
Reclamation Code (BC MEMPR 2008).

Comprehensive dam safety reviews will be carried out periodically based on the
consequence of dam failure for each individual dam. The frequency of review and
reporting will be in accordance with the CDA (2007) Dam Safety Guidelines. The
frequency of review is every 5 years for dams classified as Extreme consequence, every 7
years for dams classified as High consequence, and every 10 years for dams classified
as Significant consequence.

The mine manager is ultimately responsible for mine operations. The engineering
department, reporting to the Superintendent of Health and Safety, will be responsible to
maintain the TMF monitoring records and generate reports at the required frequency.

20.4.2 TAILINGS ALTERNATIVE ASSESSMENT

A comprehensive Multiple Accounts Analysis (MAA) was conducted in order to evaluate
numerous potential alternatives for the TMF. This analysis was carried out using the
methods and processes outlined in the Guidelines for the Assessment of Alternatives for
Mine Waste Disposal (the Guidelines) published by Environment Canada (2011) in order
to meet the requirements of obtaining a Schedule 2 amendment under the MMER
(SOR/2002-222). These regulations apply if a fish-bearing waterbody would be directly
affected by a proposed TMF.

In order to address potential concerns, Seabridge was proactive in initiating a tailing

management assessment two years prior to submitting the Application/EIS. Often a TMF
assessment is conducted after the Application/EIS approval. The intent of this early
action by Seabridge was to ensure that the siting of the TMF was done in a timely manner
with appropriate consultation that allowed for the best environmental outcome.

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 The full MAA report is provided in Appendix K13 of this document. The following sections
provide a summary of the methods and results of the alternatives assessment.

METHOD
The TMF alternatives assessment process involves seven steps to select a TMF site by a
MAA process of systematic analysis and elimination. The main evaluative step in the MAA
commences with the development of a multiple accounts ledger, which is an explicit list
of all the potential adverse effects associated with each TMF alternative that generates a
clear and measurable description of those effects. The seven steps of the MAA are
outlined below:

 Step 1 – Identify Candidate Alternatives: identify preliminary TMF candidates

near the Mine Site deemed feasible based on basic topographic, geologic,
accessibility, precedence, and technical threshold criteria.
 Step 2 – Pre-screening Assessment: screen the number of potential TMF sites
by applying a fatal flaw analysis to eliminate alternatives that are not feasible.
 Step 3 – Alternative Characterization: a non-evaluative characterization of the
TMF alternatives not eliminated in the previous step.
 Step 4 – Multiple Accounts Ledger: systematically evaluate each TMF option
based on the characterization parameters developed in Step 3 using a valuation
system based on best professional judgment, and considering issues raised by
Aboriginal groups; local, provincial, and federal government agencies;
stakeholders; and Seabridge.
 Step 5 – Value-based Decision Process: conduct a final value-based evaluation
to identify the preferred TMF candidate. This is done by scoring and weighting
the indicators developed in Step 4 and applying a quantitative analysis to
develop weighted merit ratings for each TMF candidate.
 Step 6 – Sensitivity Analysis: consider different value systems when weighting
accounts, sub-accounts, and indicators.
 Step 7 – Document Process: transparently report on the TMF alternatives
analysis process.

RESULTS OF THE KSM PROJECT TAILING MANAGEMENT FACILITY ALTERNATIVES ASSESSMENT

The results of the seven-step MAA process are summarized below (and presented in full
in Appendix K13).

Step 1: Identify Candidate Alternatives

Seabridge conducted an initial screening of all potential tailing sites in a 50 by 50 km
area surrounding the mine site. Threshold criteria were used by Seabridge to exclude
sites in the 2,500 km2 area that were not feasible due to basic topographic,
accessibility/cost, and technological limitations.

The following threshold criteria were applied to determine reasonable potential TMF
options for the Project.

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  Exclusion based on topography – The region surrounding the Project is
characterized by rugged terrain that limits the options for locating the TMF.
Valley topography was a primary factor in excluding options. Many valleys are
too steep or too small to qualify as appropriate options.
 Exclusion based on accessibility – Feasibility of the tailing disposal and storage
sites varied based on relative accessibility associated with the mountainous
topography rather than being primarily a function of distance from the mine site.
High elevation regions and areas with limited or challenging access options were
excluded as the technological challenges and/or cost of using these sites would
be prohibitive.
 Exclusion based on technological limitations – Tailing disposal technologies
considered as options included conventional impoundments, subaqueous or
saturated storage, submarine storage, and in-pit tailing storage. Underground
storage was not considered because underground mining will occur too late in
the Project LOM to be of use for tailing storage.

Fourteen potential TMF candidate alternative sites were identified for MAA evaluation:

 Upper Treaty TMF

 West Teigen Lake TMF
 Bowser Lake TMF
 Segmented Bowser Lake TMF
 Knipple Lake TMF
 Ted Morris Creek Valley TMF
 McTagg Creek Valley TMF
 Sulphurets Creek Valley TMF
 In-pit Tailing Storage TMF
 Burroughs Bay Submarine Disposal TMF
 Scott Creek Valley TMF
 Combined Sulphurets Creek Valley and Ted Morris Creek Valley TMF
 Unuk Valley TMF
 Upper Treaty Creek Valley TMF.

Step 2: Pre-screening Assessment

The following pre-screening criteria were applied to each of the initial 14 TMF candidate
alternatives:

 Do government policies recommend against specific deposition methods?

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  Are geological foundations insufficient for safe construction and operation of
containment dams?
 Do water management issues preclude safe operation of the TMF?
 Will the TMF result in negative life of Project economics?
 Does the proposed facility have insufficient capacity for the entire proposed
mine life?
 Are engineering issues prohibitive given current technology?
 Do geological hazards preclude the safe operation of the TMF?

Of the above 14 candidate alternatives for potential TMFs, four potential tailing
management alternatives—one individual site and three combinations of two sites—met
all the TMF siting pre-screening criteria:

 Upper Treaty TMF (1)

 Scott Creek Valley TMF combined with West Teigen Lake TMF (11 and 2)
 Unuk Valley combined with West Teigen Lake TMF (13 and 2)
 Upper Treaty Creek Valley combined with West Teigen Lake TMF (14 and 2).

Step 3: Alternative Characterization

Step 3 expands the scope and detail of the characterization of each candidate alternative
using project-specific criteria as recommended in the Guidelines (Environment Canada
2011). The criteria fall under the following four broad categories, referred to as
“accounts”:

 Environmental characterization – This account describes the local and regional

environment surrounding each proposed TMF. Elements such as climate,
geology, hydrology, hydrogeology, water quality, and potential effects on fish and
wildlife are considered.
 Technical characterization – This account describes the engineered elements of
each alternative such as storage capacity, dam size and volume, diversion
channel size and capacity, dumping techniques, haul distances, seepage dam
requirements, tailing discharge methods, pipeline grades and routes, closure
design, discharge and/or water treatment infrastructure, and supporting
infrastructure such as access roads.
 Project economic characterization – The account describes the life of Project
economics. All aspects of the mine waste management plan are considered
including investigation, design, construction (inclusive of borrow development
and royalties where applicable), operation, closure, post-closure care and
maintenance, water management, associated infrastructure (including transport
and deposition systems), compensation payments, and land use or lease fees.
 Socio-economic characterization – This account describes how each proposed
TMF may impact commercial land users and Aboriginal interests. Elements

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 considered include characterization and valuation of land uses, cultural
significance, presence of archaeological sites, and employment and/or training
opportunities.

Each account considers short- and long-term issues associated with construction through
operation, mine closure, and, ultimately, post-closure maintenance and monitoring.
Detailed characterization data and summary tables are provided in the full MAA report
(Appendix K13).

Step 4: Multiple Accounts Ledger

As per section 2.5 of the Guidelines (Environment Canada 2011), a multiple accounts
ledger identifies criteria from the alternative characterization that differentiate
alternatives so that TMF options can be evaluated relative to one another. This ledger is
derived from the characterization data. The multiple accounts ledger consists of two
elements: sub-accounts (i.e., evaluation criteria) and indicators (i.e., measurement
criteria).

To allow the accounts and sub-accounts to be measured and compared, the indicators
must be measureable. As per the Guidelines, a six-point scale was used, because it
provides sufficient range to differentiate without being overly detailed, and it is an even
number scale that eliminates the tendency to select the “middle-of-the road” value.
Qualitative (i.e., value-based) scales were developed (e.g., very high, high, low, etc.) when
precise measurability was not possible, as per the Guidelines (Environment Canada
2011). Value scales were developed to have the following characteristics:

 Reliable – External reviewers must be able to rate an alternative according to

the value scale and assign the same score.
 Value relevant – The value scale must be directly relevant to the indicator being
scored.
 Justifiable – Any external reviewer should reach the conclusion that the value
scale is reasonable and representative.

Each indicator has a scoring descriptor (table or textual), as described in the full report
(Appendix K13).

Step 5: Value-based Decision Process

The value-based decision process involves the creation of scoring and weighting scales
for all relevant criteria (account, sub-account and indicators), set previously in the
multiple accounts ledger, and applying them to the four alternatives. Values weighting
was done on a six-point scale with six being the most highly valued and one the least.
This value-based ranking methodology was done in concordance with the Guidelines
(Environment Canada 2011) in order to differentiate the benefit or loss associated with
each site. The weighting scales are relative, not absolute, within a particular account or
sub-account. As such, these weightings are only directly comparable within a particular
account or sub-account and not among accounts or sub-accounts. Please see the full
report (Appendix K13) for a full explanation of weighting methodology.

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 The base case weighting of each of the main accounts was that the environmental
account rated the highest, the technical and socio-economic accounts given equal
median weights and the economic account the lowest.

Using the weightings combined with the indicator scores derived from the
characterization data, as described in Step 4, a qualitative score for each of the
candidate TMF alternatives was calculated. Calculation methodology followed the
Guidelines (Environment Canada 2011), and full calculation tables are provided in the
full report (Appendix K13). The result of these calculations, i.e., the results of the MAA for
the Project TMF alternatives assessment, is shown in Table 20.1.

Table 20.1 KSM Project Tailing Management Facility Multiple Accounts Analysis Results
Upper Teigen/ Scott Creek Valley- Unuk Valley- Upper Treaty Creek-
Treaty West Teigen Lake West Teigen Lake West Teigen Lake
Base Case 4.5 2.5 2.4 2.2

The value-based MAA decision process result indicated that the Upper Treaty TMF is the
most appropriate TMF alternative (i.e., resulting in the highest value from the MAA
process). The remaining three sites are significantly less preferable, and roughly
equivalent to each other.

Step 6: Sensitivity Analysis

A sensitivity analysis was performed for the Project TMF alternatives assessment
according to the Guidelines (Environment Canada 2011). For the Project TMF MAA, the
following sensitivity analyses were performed:

 all accounts were weighted equally

 only environmental and socio-economic accounts were considered
 only the environmental account was considered
 only the technical account was considered
 only the Project economics account was considered
 only the socio-economic account was considered
 all accounts and sub-accounts were weighted equally
 all accounts, sub-accounts, and indicators were weighted equally
 downstream fisheries and water quality indicators sub-accounts were weighted
more significantly
 downstream fisheries sub-account was weighted more significantly.

The result of all the sensitivity analyses that were conducted was that the Upper Treaty
TMF alternative consistently emerged as the preferred option. Full analytical results are
presented in Rescan 2012 (Appendix K13).

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 Step 7: Document Results
The final document (Appendix K13) fully documents the TMF alternative assessment
process undertaken by Seabridge for the Project, in conjunction with consultation with
Nisga’a Nation and Aboriginal groups, as well as local, provincial and federal government
agencies. The TMF alternatives analysis results were presented to the environmental
assessment Working Group for the Project on September 15, 2011, and again on March
29 and 30, 2012, in Smithers, BC.

20.4.3 BEST AVAILABLE TAILINGS TECHNOLOGY ASSESSMENT

Seabridge has recently completed as assessment of tailing technologies, tailing facility
locations, and management practices. The assessment was an update of the tailing
alternative assessment that was completed as part of the Application/EIS and the
Schedule 2 amendment process (see Chapter 33 and Appendix 33-B of the
Application/EIS). The full details of the technological assessment can be found in KCB
(2016).

This recent study was conducted in order to address the heightened awareness of tailing
dam safety since the Mount Polley dam breach. An Independent Expert Engineering
Investigation and Review Panel (the Panel) made recommendations regarding BAT and
BAP as part of the review of the Mount Polley breach (MPC 2015). The recommendations
of the Panel were considered and addressed in the Seabridge tailing technology report.

Thirty-one potential TMF locations were considered in the assessment, along with
multiple technologies including filtered tailing. The result of the BAT study indicated that
the Teigen-Treaty Cyclone Sand is the preferred TMF site and management strategy for
tailing management at the Project.

Key findings of the 2016 BAT study include:

 the BAT has been selected for the site conditions

 the proposed design minimizes land disturbance, and potential impacts to water
quality and fish
 the proposed design ensures both chemical and physical stability after mine
closure
 the proposed design allows the site to regain its baseline characteristics soon
after secession of mining activities
 economics was not a primary consideration in the evaluation of the best
available tailings technology.

20.4.4 WASTE ROCK MANAGEMENT

The proposed management of waste rock is outlined in the Rock Storage Facilities
Management and Monitoring Plan, which can be found in Volume 26 of the
Application/EIS. The text below summarizes this management and monitoring plan.

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 Waste rock from open pit and underground mining operations that is not used for
construction purposes will be consigned to the Mitchell RSF located in the Mitchell Creek
Valley and to the McTagg RSF located in the McTagg Creek Valley. Waste rock from the Kerr
pit will be backfilled into the mined-out Sulphurets pit. All waste rock placed in the RFSs is
assumed to be potentially acid generating. The total amount of mine waste rock to be
removed during open pit excavations at the Mitchell pit, Sulphurets pit, and Kerr pit is
approximately 3 Bt over the LOM.

NPAG mine waste rock removed from the Sulphurets pit during pre-production will be
used to construct the basal drain beneath the Mitchell RSF, and it will be used as rockfill
material in the construction of the WSD. A rock drain will also be constructed under the
McTagg RSF.

Requirements for design, operation, and closure of RSFs on a mine site are legislated under
the Mines Act (1996j) and are covered by sections of the Health, Safety and Reclamation
Code for Mines in British Columbia (the Health, Safety and Reclamation Code; BC MEMPR
2008). The Health, Safety and Reclamation Code (BC MEMPR 2008) applies to “major
dumps.” A dump is defined as an accumulation of rock fragments or other unconsolidated
material formed by pushing or dropping loose material over a crest and allowing it to come to
rest without further handling. A major dump is defined as a dump that has one or more of the
following characteristics:

 contains a volume of material that exceeds 1 Mm3

 has a dump height greater than 50 m
 has an area that is covered by a dump that exceeds 1 ha
 is founded upon natural or trimmed slopes that are sometimes steeper than
20° from a horizontal plane
 contains material dumped or placed in a water course having a potential peak
flow greater than 1 m3/s, once in every 200 years
 any other mine dump so declared by the Chief Inspector.

The RSFs proposed for the Project fall into the category of a major dump (BC MEMPR
2008).

LEGISLATION AND STANDARDS

BC’s Mines Act (1996j) provides guidance and approvals for all activities on a mine site,
from exploration to development, production, closure, and reclamation. It also requires
project proponents to obtain a permit approving the work system and reclamation
program. To obtain this permit a detailed Mine Development Plan and Reclamation
Program has to be submitted to the Chief Inspector of the BC MEM for approval.

Under the Mines Act (1996j), the Health, Safety and Reclamation Code (BC MEMPR
2008) requires proponents to provide:

 a mine plan showing the locations of waste disposal areas

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  designs for major dumps developed in accordance with the Interim Guidelines of
the British Columbia Mine Waste Rock Pile Research Committee
 designs for major dumps that allow for re-contouring and reclamation consistent
with the end land use
 plans to operate and monitor major dumps in accordance with the Interim
Guidelines of the British Columbia Mine Waste Rock Pile Research Committee
 an annual report on the performance of high risk dumps
 a design for major dump slopes that meet long-term stability criteria in
accordance with the criteria provided in the Interim Guidelines of the British
Columbia Mine Waste Rock Pile Research Committee
 a reclamation plan that ensures long-term stability and long-term erosion
control;
 a waste dump stability monitoring program.

The Health, Safety and Reclamation Code (BC MEMPR 2008) requires proponents to
provide plans for the prediction, and if necessary, prevention, mitigation, and
management of ML/ARD. Details for ML/ARD management and monitoring are included
in the Metal Leaching and Acid Rock Drainage Management Plan (Section 26.14 of
Volume 26 of the Application/EIS).

The Health, Safety and Reclamation Code (BC MEMPR 2008) also requires proponents to
provide plans for soil salvage and handling, erosion control, and soil contamination
prevention. Details for soil management and monitoring are included in the Terrain,
Surficial Geology, and Soil Management and Monitoring Plan (Section 26.13 of Volume
26 of the Application/EIS).

Plans for the control and diversion of water on the mine site, including of the
management of water around the RSFs, are provided in the Water Management Plan
(Section 26.17 of Volume 26 of the Application/EIS).

A set of detailed mine development and reclamation plans will be submitted at a later
date as part of the Mine Plan and Reclamation Program Permit application. The following
sections outline the general provisions included in these documents in terms of RSF
operation and monitoring.

ROCK STORAGE STABILITY PLAN

Objective
The objective of the Rock Storage Stability Plan is to construct and operate the RSFs to
provide safe and stable storage of waste rock generated from open pit and underground
mining operations. The management and monitoring plan is intended to provide a basis
for confirming design assumptions and for tracking performance during construction and
after the mine closes.

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 Targets
Targets of the Rock Storage Stability Plan include the following:

 prepare the foundations of rock storage sites

 construct RSFs to meet short-term (during construction) and long-term stability
criteria
 control surface and subsurface water.

Actions to Avoid, Control, and Mitigate

Design Criteria

The RSFs have been classified based on the dump stability rating outlined in the Mine
Rock and Overburden Piles Investigation and Design Manual: Interim Guidelines
prepared for the British Columbia Mine Waste Rock Pile Research Committee (Piteau
Associated 1991). The stability rating considers the probable failure hazard of the RSF
based on key factors affecting stability including RSF size and geometry, foundation
conditions, characteristics of the waste rock material, method of construction, climate
and expected piezometric conditions, and rate of RSF construction and seismicity.

The dump stability ratings are summarized in Appendix 4-J and the Rock Storage
Facilities Design Report Appendix 4-M of the Application/EIS. The Mitchell RSF is
classified as low-moderate failure hazard, the McTagg RSF is classified as low-moderate
failure hazard, and the Sulphurets pit backfill is classified as low failure hazard (refer to
Volume 26 of the Application/EIS for further details).

Construction

A stable foundation is required under the RSFs to reduce the risk of RSF failure. Site
preparation for the RSFs will include (details of RSF construction are included in
Appendix 4-J of the Application/EIS):

 removal of merchantable timber

 stripping of organic, weak, and soft soils and/or of highly weathered rock where
required
 proof-rolling where practical.

Operation

For the purposes of ensuring the safety of mine personnel working below areas of active
dump construction or driving on access roads below rock storage areas, the following
safety measures may be required:

 the construction of catch berms to impede rock rollout

 the establishment of exclusion zones at the toe of active dumps.

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 Seasonal accumulations of snow are expected in working areas of the Mine Site and in
the water diversion channels, and will be removed periodically and prior to freshet. The
snow will be considered to be contact water and will be disposed of in areas that drain to
the WSF for treatment. Storage of snow and control of snow melt will include:

 Designated snow dumps located on the south facing slope of the McTagg RSF
and on areas of the Mitchell RSF above the WSF where the snow will melt during
the summer.
 Location of snow dumps in non-critical areas of the RSFs.

Geohazards including debris flows, debris slides, and frequent snow avalanches could
affect the diversion structures. The storage capacity of the WSF is sufficient to handle
additional volumes of water in the event that the diversion channels do not function;
however, the following design and control measures have been considered:

 Diversion channels have been strategically located to avoid landslide and snow
avalanche prone terrain wherever possible, and designed to minimize the risk of
failure and to maximize channel efficiency; however, it is anticipated that
ongoing maintenance of water diversion channels and structures will be
required.
 Diversion channels will be constructed with a minimum 5 m base width to allow
for snow removal by snow blowers or Caterpillar D-6 dozers. Snow and debris
will be removed in a timely manner if the channels become blocked.

Periodic shotcrete reinforcement and rock bolting may be required along sections of rock-
cut channels and spillways where discontinuities in the rock may lead to leakage or
structural weakness.

Closure

For long-term stability and reclamation purposes, slopes of the Mitchell and McTagg RSFs
will be re-contoured at closure. The modifications to the RSF areas will include:

 Re-contouring the Mitchell and McTagg RSF slopes below an elevation of

1,100 m (treeline) to an overall slope of 2H: 1V (27°) with a 50 cm soil cover
and vegetated.
 Re-contouring the western face of the Mitchell RSF below an elevation of 840 m.
 Above the treeline, higher benches are proposed to be left un-vegetated to
reflect existing talus slopes present in the Mitchell and McTagg Creek valleys.

Please refer to the Application/EIS (Volume 26) (Rescan 2013) for further details.

Post-closure

The post-closure phase includes complete reclamation of the RSFs and continued
treatment of water collected in the WSF until the water quality meets acceptable

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 standards for direct discharge to the environment. At that time, all facilities will be
decommissioned and flows downstream of the Mine Site will be restored to pre-mine
conditions.

Monitoring
A monitoring program will be developed to visually check the condition of RSF slopes and
surface water control diversion channels during RSF construction and operation. The
monitoring program will also include the installation of geotechnical instrumentation for
the collection of data to confirm design assumptions, to warn of potential failure or
deformation of RSF slopes, and to evaluate stability performance.

The results of the monitoring program will be used to measure the success of the
management strategies and to identify where additional mitigation may be necessary.
Monitoring will continue for a period of time after mine closure to confirm that
reclamation objectives are being achieved and to identify repair or maintenance
requirements. Inspection and monitoring may include:

 visual inspection of RSF platform, crest, and slopes to check for signs of
cracking, settlement, or bulging
 visual inspection of the RSF toe area to check for signs of ground heave or
seepage
 installation of piezometers during construction in the area of the Mitchell RSF
foundation where lacustrine deposits are present to monitor pore pressure and
phreatic levels
 installation of slope inclinometers in areas close to the Mitchell OPC during
operation to monitor foundation deformation
 installation of surface survey monuments during RSF construction
 deployment of wireline extensometers as required
 inspection of surface water diversion ditches, channels, and pipelines to check
the structural condition and to ensure that they are clear of obstruction.

A schedule for routine inspection and instrumentation monitoring will be developed at the
time of mine permitting based on the mine construction and operation schedule.
Instrumentation trigger levels and response criteria will also be established and included
in an operation procedure for the RSFs.

Additional inspections of RSF slopes and surface water control structures will be
undertaken following extreme rainfall events or significant earthquake events. Records
will be kept to track RSF crest advance and loading rates, location of snow dumps, waste
rock material quality, and any other information required to assess RSF performance.

Geohazards, such as debris flows, debris slides, and snow avalanches, in areas that
could adversely affect worker safety and mine infrastructure, including surface water
diversion structures, will be monitored and identified hazards will be controlled as
necessary.

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 Monitoring will continue during periods of temporary mine closure.

Reporting
Regular inspection of active and inactive RSFs and review of pertinent data will be
conducted by mine personnel. Inspection records will be maintained on site for review by
the design engineer and by government mine inspectors. The information collected may
be used for external reporting purposes.

The Health, Safety and Reclamation Code (BC MEMPR 2008) requires that an annual
performance report be submitted for waste rock storage facilities that are classified as
high risk. Information on the development and reclamation of the waste rock storage
facilities may also be included in the annual reclamation and environmental monitoring
report submitted to the BC government as required by the Mines Act (1996j) regulations
under the Health, Safety and Reclamation Code (BC MEMPR 2008).

20.4.5 DOMESTIC AND INDUSTRIAL WASTE MANAGEMENT

The proposed management of domestic and industrial waste, including hazardous waste,
is outlined in the Domestic and Industrial Waste Management Plan, which can be found
in the Application/EIS (Volume 26) (Rescan 2013). The text below summarizes this
management plan.

LEGISLATION AND STANDARDS

The minimum standards of acceptability of the Domestic and Industrial Waste
Management Plan for the Project are to comply with federal and provincial legislation
such as:

 Environmental Management Act (2003) and its regulations

 Health Act (1996f)
 Forest and Range Practices Act (2002c)
 Fisheries Act (1996c)
 Water Act (1996n)
 Mines Act (1996j)
 Health, Safety and Reclamation Code (BC MEMPR 2008)
 Wildlife Act (1996q)
 Land Act (1996h)
 Environment and Land Use Act (1996b)
 Soil Conservation Act (1996l)
 Canada Transportation Act (1996a)
 Canadian Environmental Protection Act (1999)
 Hazardous Products Act (1985d)

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  Controlled Products Regulations (SOR/88-66)
 Transportation of Dangerous Goods Act (1992b).

OBJECTIVE
The primary purposes of the Domestic and Industrial Waste Management Plan (the
Waste Management Plan) is to protect workers and the public, and to minimize any
potential adverse effects to the environment, including fish and wildlife and their habitat,
while ensuring compliance with regulatory requirements, permit and licence obligations,
and the Proponent’s Environmental Policy. The secondary purpose of the plan is to
minimize the risk and cost associated with the recycling, storage, handling, disposal, and
removal of waste from all aspects of the Project. A material is considered a waste when it
can no longer be used for its original purpose.

The Waste Management Plan documents Seabridge’s approach to waste management

and outlines strategies that will be used to process the various waste streams to ensure
maximum environmental protection. The Waste Management Plan will be reviewed
regularly and revised as required to ensure continued best practices and compliance.

In order for the Waste Management Plan and associated procedures to work to their full
extent, everyone on the site must be made aware of the plan and their corresponding
responsibilities. All Project personnel, including contractors, need to be active
participants.

TARGETS
The targets for the Waste Management Plan are to ensure that:

 all employees and contractors on site have at least overview training in Project
waste management strategies, achieved through site orientation training
 every work area has a designated waste collection or disposal area
 every waste collection or disposal area has designated and secure areas or
containers for disposal of specific waste types
 appropriate spill kits are available wherever there is a potential for a spill
 site workers are trained in spill prevention and spill response.

ACTIONS TO AVOID, CONTROL, AND MITIGATE

The Waste Management Plan focuses on the wise use of resources, which includes the
four R’s: reduce, reuse, recycle, and recover. Where possible, all of these methods will be
exhausted before disposing of waste materials.

WASTE REDUCTION
Reducing the amount of material that is consumed is the most effective way of reducing
the amount of waste that is generated. Consumption will be assessed by evaluating all
procedures, processes, and consumed materials for possible reductions in raw material

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 usage, as well as possible reductions in generated waste volumes. Examples of waste
reduction measures that may be used include:

 product review, selection, and substitution; recyclable/reusable and non-

hazardous materials will be used instead of non-recyclable/non-reusable and
hazardous materials
 ordering chemicals or lube products in bulk/returnable containers
 keeping a workable minimum inventory to prevent expiration of products and
resulting generation of waste
 decreasing the amount of solid waste by reducing the use of disposable items
 training personnel on waste minimization and reuse
 decreasing the amount of packaging on supplies by requesting that the
suppliers provide less packaging materials on over-packaged products.

MATERIAL REUSE
Materials brought to the Project site should be used to the maximum extent possible, and
where applicable, reused on the site. Examples of reusable materials include:

 scrap metal, conveyor belts, and wood

 chemical containers that can be returned to the supplier to be refilled
 waste oils, glycols, and solvents that can be reused for secondary jobs.

RECYCLING
A recycling program will be incorporated at the Project for successful management of
waste streams. The program will recycle as many products as possible on site (e.g.,
salvageable lumber and scrap metal, paper, cardboard, and salvageable parts from
vehicles).

Other recyclable materials will be shipped off site to the nearest recycling facility.
Products that will be shipped off site include:

 used oil filters (oil removed, crushed, and recycled separately)

 lead-acid and alkaline batteries
 plastic petroleum pails
 used/damaged auto parts
 oil-based paints
 empty drums.

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 RECOVERY
Recovery is the final level of waste minimization and involves extracting usable material
or energy as a by-product for other uses. Opportunities for recovery will be evaluated
throughout the life of the Project.

TRACKING AND ENFORCEMENT

The management of domestic and industrial waste from the Project will be accomplished
through the implementation and monitoring of domestic and industrial waste
management procedures. Monitoring and enforcement of these procedures is
fundamental to ensuring that the Waste Management Plan is functioning to its full extent
for the life of the Project.

An imperative step in achieving compliance with the procedures is to ensure that all
employees, contractors, and sub-contractors are aware of the plan and procedures and
how the procedures apply to them. For example, all persons at the Project will be made
aware of the recycling program and of how to direct waste to the correct waste stream
through an orientation and training program on domestic and industrial waste
procedures. Permanent employees will receive regular retraining and updates when new
procedures or changes are introduced.

Waste produced by Project activities and personnel will be separated at the point of
generation. Each department will be accountable for its workers, including Seabridge
employees, contractors, and sub-contractors, to ensure that the waste is handled
correctly as per the waste management procedures. Tracking waste streams is essential
to ensure that each department is performing its waste management procedures
responsibility.

TRACKING
Off-site and on-site disposal will be documented by tracking waste type, volume, method
of disposal, and location. Tracking of the waste streams by each department will show
where changes can be made to further improve the waste management system over the
life of the Project. Tracking will also alert management to areas or departments that may
require new procedures or particular attention. A summary of the tracking will be reported
annually by each department to the Environmental Superintendent, along with an
analysis of the effectiveness of the existing systems and any proposed improvements.

AUDIT PROGRAM
An audit program is required to alert management when enforcement is necessary to
ensure compliance with the plan and procedures. The mine manager will appoint a small
audit team.

WASTE TYPES AND SOURCES

The Project will generate several forms of industrial and domestic waste throughout the
life of the Project. This management plan discusses the solid waste, including hazardous
waste, that may be generated, as well as their storage and final disposal methods.

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 WASTE TYPES GENERATED DURING CONSTRUCTION
Waste produced during construction will be generated at the road, tunnels, mine, and
Treaty OPC construction camps, and by the construction of the mine and adjacent
facilities, access corridors, Treaty Process Plant, and TMF.

The long duration of the construction phase, combined with the wide range of phase
activities such as tunnelling, TMF construction, and pre-stripping, means that waste will
be similar between the construction and operation phases. The primary difference will be
the addition of waste related to production in the Treaty Process Plant during operation.

The types of waste that will be generated during the Project operation are listed in the
Application/EIS (Table 26.6-1 of Chapter 26) (Rescan 2013).

Domestic and industrial waste produced during the operation phase will be controlled
and monitored throughout the life of the Project.

WASTE COLLECTION/DISPOSAL FACILITIES

Construction
In order to meet the construction schedule of the access corridors, tunnels, the Treaty
Process Plant, the TMF, WSF, WTP, and the Mine Site, 12 construction camps will be
required. On completion of construction, the number of camps will be reduced to two
operating camps

Each construction camp will have its own waste disposal facilities with clearly marked
containers or areas for each type of waste. For example, the inert non-reactive solid
waste (tires, conveyor belts, rebar, wood, etc.) will be stockpiled for later disposal in one
of the Project landfills or in a licensed off-site landfill. Hazardous waste (petroleum waste,
batteries, etc.) will be stored in appropriate sealed containers within a bermed area for
transfer off site.

Waste Disposal Methods/Facilities for the Construction Camps

All construction camps will have incinerators to handle putrescible kitchen waste and
portable sewage treatment plants (rotating biological contactors or other similar units) to
handle both black and grey water waste. Sewage plant effluent will be discharged to a tile
field more than 100 m from the high water mark. Sludge will be removed as required for
efficient operation of the plants and will be hauled for disposal in a licensed landfill. Solid
inert waste and hazardous waste will be stored until it can be transferred to appropriate
disposal facilities.

Clearly labelled sealable containers will be provided at each camp and staging area for
the different types of materials (e.g., hazardous waste and recyclable waste). Electric
fencing will be used to deter bears from entering waste disposal facilities. Sealed
containers from the camps will be hauled for disposal at the next most accessible
disposal point. Ideally, inert non-reactive solid waste materials that cannot be recycled,
reused, or burned in an incinerator will be stored until they can be disposed in the Project
landfills once the landfills are established and road access is available. Where road
access is available to public roads before the Project landfills are available, inert non-

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 reactive waste from construction camps and staging areas may be hauled to licensed off-
site landfills.

Operation
Central disposal facilities will be established at the Mitchell and Treaty OPCs where waste
materials will be organized for coordinated disposal. These central disposal facilities will
be created in the latter part of the construction phase and will be operational by the start
of the operation phase. Waste materials from sites in the Unuk River drainage will be
directed to the Mitchell OPC, and those from the Bell-Irving River drainage will be directed
to the Treaty OPC.

The waste collection areas, landfills, and sewage effluent/sludge disposal systems will
have waste containment and runoff control structures that will prevent the escape of
untreated waste to the surface or ground water systems. Regular audits of these waste
containment and runoff control structures will be conducted, and the records of these
inspections will be kept for review upon the request of the site manager or an inspector.
Regular inspection audits will be conducted on all the disposal systems as well to ensure
that the waste is being handled correctly and filtered into the correct waste streams.

Waste Collection Areas

The waste collection areas will function as a storage area for waste until the waste is
processed further or transferred off site to the appropriate approved recycling or disposal
facilities or landfill. The waste collection areas will be properly designed to contain and
prevent contamination of the environment. They will also be designed to adequately and
safely store a sufficient quantity of waste over a prescribed time limit of one to three
months. Where required, the waste collection areas will be covered and fenced to
prevent attracting wildlife and to provide protection from weather. Additionally, hazardous
waste disposal facilities will be adequately designed to contain spills.

The waste collection area will consist of three parts:

 Recycle/reuse area: This area will contain the items that can be recycled/reused
on the site. Inert materials to be stored in this area include tires, scrap metals,
and waste wood. These items will be placed in designated containers or areas
within the recycle/reuse area of the waste collection area. This method will allow
personnel to search the recycle/reuse area of the waste collection area for
materials to reuse. Once these containers or areas become full, the contents will
be either disposed of in a designated on-site facility or shipped off site for
recycling at an approved facility.
 Hazardous waste area: The hazardous waste area will contain hazardous waste
that is required to be shipped off-site. Hazardous waste, including used glycol,
acids, solvents, laboratory chemical waste, oil that cannot be burned in
incinerators, oily rags, absorbent pads, hydraulic fluid, and any other hazardous
chemicals, will be stored in a bermed containment area. Hazardous waste will
not be permitted to accumulate to excessive volumes, but will be shipped off
site to avoid crowding.

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  Removal area: This area will contain waste that will be disposed of in an on-site
facility. Waste will include domestic and industrial waste that is not hazardous or
recyclable.

The waste in the waste collection area will be segregated and stored using accepted
management practices including the following:

 Fire prevention systems that are adequately designed for the materials being
stored will be used.
 Spill kits, protective equipment, and other necessary equipment to clean and
mitigate spills will be used.
 Only containers in good condition will be used to store items.
 Containers and liner materials will be compatible with the waste being disposed.
 Containers and drums will be labelled to identify the waste content and initial
date of storage.
 Sufficient storage space will be left between containers to allow for safe access
and handling of containers.
 Incompatible waste will not be stored in the same containers and will be stored
at a safe distance from each other.

LANDFILLS
Two landfills will be established, one each in the Mitchell and Treaty OPCs. The landfills
will be used to dispose of only solid inert, non-reactive waste such as used conveyor
belts, empty dry latex paint cans, grinding balls, air filters, non-recyclable plastics, and
incinerator ash. To deter wildlife attraction to the landfill, the landfill will be fenced and
only solid inert waste that will not act as a wildlife attractant will be deposited there. The
garbage will be periodically covered with not potentially acid generating waste rock or
local till to prevent wind loss and to mitigate wildlife attraction.

Signs will be posted around the landfills to identify the disposal area, and the landfills will
be audited regularly to ensure that they are only used for disposal of approved waste
products. The audits will be recorded and evaluated for potential areas of improvement.

INCINERATORS
Incinerators will be used at all camps and at the Mitchell truck shop, whenever possible,
for waste disposal. The Treaty operating camp will share an incinerator with the Treaty
Process Plant and related facilities. The incinerators will be used to dispose of all waste
that is a wildlife attractant, including food waste and food-related products. Food waste is
a prime wildlife attractant and will therefore be incinerated in a timely manner, thus
leaving no trace of attractants for wildlife. All kitchen, dining room, office, and
accommodation waste will be incinerated to reduce the potential of attracting wildlife. All
resultant incinerator ash will be placed in a landfill.

Incinerator areas will be fenced, further reducing wildlife interactions.

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 SEWAGE PLANT EFFLUENT/SLUDGE
The sewage waste disposal facilities will consist of rotating biological contactors or other
similar units and tile fields appropriately sized for each camp or location. Sewage plants
will be located at the Mitchell truck shop and near the primary crusher as well as at each
camp. The effluent from the rotary bioreactors will be discharged to a tile field placed
100 m from the high water mark for further treatment. The sludge from the rotary
bioreactors will be periodically pumped and disposed of in an appropriate manner
depending on the final analysis of the sludge. During operation, the sludge may be
deposited in the landfills or in the TMF.

PROCEDURES FOR MANAGING SPECIFIC WASTE

The waste collection areas provide a means to collect the waste streams and transfer
them to their correct disposal areas. Specific areas will be designated for each type of
waste and will be clearly labelled.

Please see the Application/EIS (Volume 26) (Rescan 2013) for typical waste types to be
expected at the Project, their treatment strategies, and handling/disposal methods. Any
updates on specific waste management since the Application/EIS can be found in
Section 18.0 of this PFS.

HAZARDOUS WASTE
Hazardous waste will be produced in all Project phases. It includes materials such as
waste oil, laboratory chemicals and solvents, lead-acid batteries, oil filters, and used oily
rags and absorbent pads.

The Hazardous Waste Regulation (BC Reg. 63/88) under the Environmental
Management Act (2003) defines “hazardous waste” (please see Volume 26 of the
Application/EIS for additional details. Any updates on hazardous waste management
since the Application/EIS can be found in Section 18.0 of this PFS.

Hazardous waste requires special handling and training procedures. All employees,
contractors, and sub-contractors who are handling hazardous waste for the Project will
be provided with Workplace Hazardous Materials Information System training or will be
required under contract to have that training, so they can identify hazardous waste and
know how to handle it appropriately. Transportation of Dangerous Goods training will be
provided, or required of employees, contractors, and sub-contractors who are receiving,
off-loading, and storing potentially hazardous materials, or involved in the storage and
shipment off-site of hazardous waste.

Hazardous waste will be transferred to an approved hazardous waste facility that will
issue a certificate of destruction. Periodic audits of this facility to ensure proper handling
and destruction of hazardous waste will be considered.

All hazardous materials and dangerous goods will be stored in clearly labelled containers
or vessels and handled in accordance with regulations appropriate to their hazard
characteristics.

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 Petroleum Waste Stream
Petroleum products will be used widely at the Project. The waste generated from the
petroleum products will be used oil, diesel fuel, lubricants, gasoline, jet B, oily rags and
absorbent pads, and solvents. These products have to be handled with caution because
they can potentially adversely affect the environment. The handling, storage, and spill
contingency for petroleum products are outlined in the Spill Prevention and Emergency
Response Plan.

To properly manage the petroleum waste stream and make the individual waste streams
easier to reuse, recycle or recover, the waste will be segregated into classes, as detailed
in the Application/EIS (Section 26.6 of Volume 26) (Rescan 2013).

Laboratory Chemical Waste

The laboratory personnel will determine which laboratory chemical waste cannot be
safely incinerated or disposed of in the landfill. This waste will be stored in appropriate
containers and placed in the waste collection areas until they are shipped off site to a
licensed disposal facility.

Biological Waste
The first aid areas will generate small amounts of hazardous waste in the form of
needles, syringes, scalpel blades, and blood- and tissue-contaminated materials. This
waste will be properly contained in biohazard containers in the first aid area under the
supervision of the first aid staff. The blood- and tissue-contaminated materials will be
incinerated and the other biohazardous waste will be shipped off site to an approved
disposal facility.

Non-hazardous Waste
Non-hazardous waste will be produced in all phases of the Project. They include materials
such as domestic garbage, food waste, paper materials, aluminum cans, glass, plastics,
inert bulk waste, etc. (please refer to Section 26.6, Volume 26 of the Application/EIS for
additional details).

CLOSURE AND DECOMMISSIONING

Activities during the closure phase will be similar to the activities during the construction
phase. A range of materials will become available for salvage, recycling, or disposal with
the dismantling and removal of buildings, surface structures, fuel tanks, etc. The
Reclamation and Closure Plan will cover the closure, reclamation, and decommissioning
of the Project in detail.

WASTE MANAGEMENT DURING CLOSURE

Significant amounts of waste will be generated from the dismantling of buildings and
process-related materials. The approach for waste management during closure will be to
identify feasible salvage and recycling options.

Upon closure, the buildings, facilities, and process equipment will be dismantled and
either disposed of at the site landfill (inert non-reactive materials only) or removed from

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 the site for recycling and/or disposal. Any equipment or materials with market value will
be removed for capital recovery.

DECOMMISSIONING OF THE WASTE MANAGEMENT FACILITIES

Some of the waste management facilities at both the Mitchell and Treaty OPCs, such as
the waste collection areas, incinerators, and the sewage plants, will be retained to
support facilities remaining on the Project site for ongoing site maintenance and
inspection purposes. The MTT, WTP, MDT, MTDT, hydroelectric facilities, and related
accommodation and maintenance facilities will be retained. Other facilities will be
dismantled and/or removed from the site. All scrap metal will be disposed of in a manner
acceptable to an inspector. The remaining area after removal of structures will be
reclaimed; for example, concrete foundations will be covered and re-vegetated.

The landfill will be covered with waste rock and reclaimed to ensure long-term stability
and erosion control. All reclamation details and processes are described in detail in the
Reclamation and Closure Plan.

20.5 AIR QUALITY MANAGEMENT INCLUDING GREENHOUSE GASES

The proposed management of air quality, including greenhouse gases, is outlined in the
Air Quality Management Plan and Greenhouse Gas Management Plan, which can be
found in the Application/EIS (Volume 26) (Rescan 2013). The following text summarizes
these management plans.

20.5.1 AIR QUALITY MANAGEMENT PLAN

The Air Quality Management Plan consists of three sub-plans:

 Emissions Management Plan

 Fugitive Dust Emissions Management Plan
 Meteorology Monitoring Plan.

EMISSIONS MANAGEMENT PLAN

The Emissions Management Plan outlines:

 the legislation and standards relevant to emissions associated with the Project
 the primary emission mitigation methods that the Proponent will implement;
 the continual assessment and reporting of emissions that will take place
throughout the Project life.

Legislation and Standards

The federal government has set National Ambient Air Quality Objectives (NAAQOs) and
Canada-wide standards under the Canadian Environmental Protection Act (1999).
Canada-wide standards are intended to be achievable targets that will reduce health and
environmental risks within a specific timeframe, whereas NAAQOs identify benchmark

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 levels of protection for people and the environment. In addition, BC has developed air
quality objectives for a number of contaminants.

The applicable standards relating to the Project include:

 NAAQOs (Environment Canada 1999)

 Canada-wide standards (CCME 2000)
 BC Air Quality Objectives and Standards (BC MOE 2009a).

Objective
The Emissions Management Plan will establish measures to mitigate emissions from
Project activities to meet air emission legislative requirements and to reduce the Project
effects to reasonable levels. The objective of the Emissions Management Plan is to
mitigate and monitor emissions from Project activities.

Targets
The Emissions Management Plan targets are to:

 avoid, control, and mitigate air pollution associated with Project operation
 establish a monitoring plan to collect on-site air quality data, results of which will
be reviewed annually to determine if any trends are evident and if target criteria
are being met.

Actions to Avoid, Control, and Mitigate

The main source of emissions during the construction phase of the Project will be from
diesel exhaust. Diesel emissions include carbon monoxide, nitrogen oxides, sulphur
dioxide, particulate matter, and residual unburned fuel vapours. Emissions will also be
produced by the incineration of inorganic and organic wastes.

Activities that will produce emissions during the Project operation phase include blasting,
operating diesel-powered mining equipment, and operating haul trucks for transporting
waste rock and ore. Transportation of personnel and materials to and from the Mine Site
will also produce emissions during operations. Emissions include sulphur dioxide,
nitrogen oxides, carbon monoxide, and particulate matter.

In an effort to mitigate emissions during the various phases of the Project, Seabridge is
currently implementing, or plans to implement, measures described in detail in the
Application/EIS (Section 26.11, Volume 26) (Rescan 2013).

Monitoring
Stack testing of a selection of incinerators and process units will be conducted in
compliance with permit requirements under the BC Environmental Management Act – Air
Permit.

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 Air quality monitoring will be carried out to establish the emissions associated with site
activities during operation. Monitoring stations will be located at various locations.
Details of any adverse findings will be recorded and reported as required by regulatory
authorities.

Reporting
The results of the emissions monitoring program will be reported on at the frequency
specified in the Air Permit.

Adaption
The air quality monitoring data will be reviewed annually to determine if any trends are
evident. The need for any corrective actions to on-site emission management or
installation of additional control measures will be determined on a case-by-case basis.
Indications of the need for corrective actions and additional control measures may
include:

 monitoring data showing an increasing trend in emission concentrations

 issues raised by on-site staff, regulators, or local communities.

Discussions will be initiated to resolve any issues as soon as possible after the issue has
been identified.

Components of the Emissions Management Plan may need to be revised over the life of
the Project, based on regulatory changes and technological advances. Any modification
made to the Emissions Management Plan will be communicated to regulatory authorities
where applicable.

FUGITIVE DUST EMISSIONS MANAGEMENT PLAN

The Fugitive Dust Emissions Management Plan outlines:

 the legislations and standards relevant to dust emissions associated with the
Project
 the main emission mitigation methods that the Proponent will implement
 the continual assessment and reporting of emissions that will take place
throughout the Project life.
Legislation and Standards
The applicable standards include:

 NAAQOs (Environment Canada 1999)

 Canada-wide standards (CCME 2000)
 British Columbia Air Quality Objectives (BC MOE 2009a)
 The Pollution Control Objectives for the Mining, Smelting, and Related Industries
of British Columbia (BC MOE 1979).

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 Objective
The main objective of the Fugitive Dust Emissions Management Plan is to ensure that the
levels of fugitive dust generated by Project activities are at or lower than levels required
to meet the Canada and BC ambient air quality and dustfall objectives. The Fugitive Dust
Management Plan will also identify methods to reduce fugitive emissions from Project
activities.

Targets
The Fugitive Dust Emissions Management Plan targets are to:

 ensure fugitive dust emissions generated by the Project do not cause a medium
to long-term exceedance of the standards
 maintain a monitoring plan to collect on-site air quality data related to dust,
results of which will be reviewed annually to determine if any trends are evident
and if target criteria are being met.

Actions to Avoid, Control, and Mitigate

The main sources of fugitive dust emissions during the construction phase of the Project
will be vehicles travelling on unpaved roads, construction of the access corridor, and
other construction activities, including earthworks, topsoil removal, and blasting.

Activities that will produce fugitive dust emissions during the operational phase of the Project
include vehicles travelling on unpaved roads, ore transfer, truck loading and unloading,
crushing and blasting.

In an effort to mitigate dust emissions during the various phases of the Project,
Seabridge is currently implementing, or plans to implement, measures described in detail
in the Application/EIS (Section 26.11, Volume 26) (Rescan 2013).

Monitoring
Fugitive dust monitoring commenced in 2008, and consisted of dustfall monitoring of
particulates, anions, cations, and total metals. Dustfall monitoring began at 5 locations
and expanded to 10 locations as of 2012. Each station monitors dustfall over
consecutive 30-day periods during the summer and early fall.

The locations of the dustfall stations during construction and operation are likely to be
slightly different than the baseline locations due to shifting areas of activity on site as the
Project progresses. The dustfall monitoring stations will be sited in accordance with
ASTM Standard D1739-98 (ASTM 2010). The stations will be in open areas that are free
of structures higher than 1 m within a 20 m radius of the collection container.

The dustfall monitoring will provide a 30-day average ground-level mass of deposited
dust. These values will be compared to the relevant BC dustfall objectives stated in The
Pollution Control Objectives for the Mining, Smelting, and Related Industries of British
Columbia (BC MOE 1979). In addition, analysis of temporal trends will be undertaken to
determine if there are any increasing trends in the measured concentrations with

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 consideration to the time of year and meteorological conditions. Monitoring data will also
be used to provide feedback to modify the dust management procedures incorporated at
the site, if required. However, sampling does not occur in “real time” and there will be a
delay between the events that lead to any elevated dust deposition and the receipt of
monitoring results.

REPORTING
The results of the Fugitive Dust Monitoring Program will be reported in various annual
reports and will be provided to senior management and regulatory agencies as required.

ADAPTION
The dustfall monitoring data will be reviewed annually to determine if any trends are
evident. The need for any corrective actions to on-site dustfall management or additional
control measures will be determined on a case-by-case basis. Indications of the need for
corrective actions and additional control measures may include:

 monitoring data showing an increasing trend in deposited dust

 issues raised by on-site staff, regulators, or local communities.

Discussions will be initiated to resolve any issues as soon as possible after the issue has
been identified.

It is possible that components of the Fugitive Dust Emissions Management Plan may
need to be revised over the life of the Project, based on regulatory changes and
technological advances. Any modification made to the Fugitive Dust Emissions
Management Plan will be communicated to regulatory authorities where applicable.

METEOROLOGY MONITORING PLAN

Objectives
The objectives of the Meteorological Monitoring Plan are to measure and characterize the
atmospheric conditions within the Project area to establish long-term data and review
results annually.

On-site meteorological data are used for a variety of purposes for mining projects. For
instance, wind speed and direction data were required for the Project to select sites for
permanent camps and mineral processing facilities, in order to accommodate
predominant wind patterns and mitigate the effects of fugitive dust and other emissions.
Solar radiation, evaporation, and precipitation data are required in water balance
calculations for water containment and treatment systems. Precipitation (as both snow
and rain) data will facilitate monitoring and predicting potential hazards such as
avalanches and landslides (see the Application/EIS, Volume 26) (Rescan 2013).
Meteorological monitoring will also assist in understanding and better predicting the
potential effects of climate change on the Project over its lifetime.

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 Monitoring
Since late 2007, a total of five automated meteorological stations have been installed
and operated as part of the meteorology baseline monitoring program for the Project.
There are four Environment Canada stations in the region of the Project that provide data
for comparison to that collected by the Project meteorological stations.

Monitoring of meteorological data will continue through the Project life—including

temperature, relative humidity, precipitation and snow depth, solar radiation, barometric
pressure, and evaporation. The positioning of stations in the area of the Project may shift
per regulatory reporting requirements and air quality, hydrological, climate change,
safety, and other data needs over the life of the Project.

Reporting
The results of ongoing meteorological monitoring throughout the Project life will be
reported in Annual Environmental Reports, and will be provided to senior management
for the Project as required.

It is possible that components of the Meteorological Monitoring Plan may need to be

revised over the life of the Project, based on the needs of the Project, regulatory changes,
or technological advances. Any modification made to the Meteorological Monitoring Plan
will be communicated to regulatory authorities, such as the BC MOE, where applicable.
Also, modifications will be made so as to ensure that the continuity of data collection is
not disrupted in a manner that would significantly alter its usefulness (such as the ability
to provide information pertinent to health and safety, or to interpret air quality, climatic,
or hydrological trends resulting from the Project, or that may cause effects to the Project).

20.5.2 GREENHOUSE GAS MANAGEMENT PLAN

A description of the issue of climate change relating to the need to manage greenhouse
gas (GHG) emissions for the Project is discussed in Volume 6 of the Application/EIS, GHG
emissions (Climate Change). The GHG management plan outlines:

 the legislative context for mitigating GHG emissions in BC

 the main GHG mitigation methods that the Proponent will use for the Project
 the assessment and reporting of Project GHG emissions that the Proponent will
undertake.

LEGISLATION AND BEST PRACTICES CONTEXT

International agreements and North American national legislation with clear and
enforceable GHG mitigation targets at the project level have yet to be determined.
However, provincial and national development of such legislation is underway as
described in the section below. Legislation, policy, and initiatives to address climate
change adaptation are also being developed (CEA Agency 2003; IPCC 2007; BC MOE
2010c), but there is some regulatory uncertainty as to what legislation will apply during the
Project life due to changes in political influences. In BC, carbon management and markets
fall under both regulatory and voluntary domains, so organizations can implement carbon

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 management strategies under several voluntary third-party programs that additionally
promote best practices in the monitoring, reduction, and transparent reporting of GHG
emission inventories.

Regulatory Context
The main pieces of legislation pertaining to carbon management for major projects in BC,
including taxation and market mechanisms, as of 2012 can be found in the
Application/EIS (Volume 12) (Rescan 2013). In the absence of regulations, many
organizations seek to minimize GHG emissions voluntarily to meet corporate
sustainability reporting goals, procure financing, address liability, or improve public
relations.

Under the Copenhagen Accord in 2009, Canada signed on to reduce its total GHG
emissions by 17% from 2005 levels by 2020, mirroring American targets. To meet this
national GHG reduction target, Canada has also begun to implement regulations under
the Canadian Environmental Protection Act (1999) and the Clean Air Regulatory Agenda for
energy suppliers (starting with coal) and the transport sector (for heavy- and light-duty
vehicle manufacturers). To demonstrate its reductions, Canada reports national GHG
emissions annually to the United Nations Framework Convention on Climate Change.

Canada has set progressively aggressive fuel efficiency targets for manufacturers
through national transport regulations—in line with those in the United States—which will
help to provide transport sector GHG emissions reductions in future years, and
consequently provide transport related GHG reductions for the Project from upstream
sources. For instance, on November 27, 2012, the federal government announced new
regulations for automobiles and light trucks manufactured between 2017 and 2025,
which mandate improvements to engine fuel efficiency such that by 2025, vehicles in
this category will consume 50% less fuel and will emit 50% less GHG emissions than
similar 2008 models (Environment Canada 2012a). These proposed regulations will build
on the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations
(SOR/2010-201) for vehicles manufactured between 2011 and 2016, which mandates
that 2016 models have about 25% lower GHG emissions compared to similar 2008
models. The proposed Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulation
(SOR/2013-24) will mandate manufactured emission reductions for heavy-duty vehicles,
commence in 2014, and will also help to lower transport related emissions of the Project
compared to current estimates (Government of Canada 2012). For instance, heavy-duty
vehicle models (i.e., large pick-up trucks, short/long-haul tractors, cement and garbage
trucks, and buses) manufactured in 2018 will be required to reduce end-of-pipe GHG
emissions up to 23% from those sold in 2010, and by 2020 overall national emissions
from this vehicle class are projected to drop by 3 Mt/a (Environment Canada 2012b).
These types of reductions are why the procurement of new vehicles is listed as a
mitigation measure in the Application/EIS (Section 26.12.1.5, Volume 26) (Rescan
2013).

BC also has several provincial climate change regulations in place, often aligning targets
and mechanisms with those in California. Through the BC Climate Action Plan
(Government of BC 2008vb), the province has set more stringent targets—33% GHG

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 emissions reductions by 2020, and 80% by 2050, compared to 2007 levels—than the
national targets described above (Government of BC 2008b. BC currently also has a
carbon tax, although the general GHG Reduction (Cap and Trade) Act (2008b) is currently
slated to become the major legislative arm to regulate emissions in BC. The GHG
Reduction (Cap and Trade) Act (2008a) also enabled the province to be the first
Canadian province to join the regional (United States and Canada) Western Climate
Initiative in 2007, but BC has not yet implemented regulations through the Western
Climate Initiative and still has the option to opt out prior to its slated implementation in
2015.

The GHG Reduction (Vehicle Emissions Standards) Act (2008c) is also slated to roll out in
BC in the next few years, putting initial caps on transport emissions, which will likely be
raised incrementally in future years to be in line with target reductions in BC: a total of
33% by 2020 compared to 2007, and 80% below 2007 levels by 2050 (Government of
BC 2008b). In conjunction with national transport regulations, this act will help reduce
GHG emissions of contracted (Scope 3) haul truck emissions for the Project.

Regarding land-use change, in support of the Climate Action Plan, BC has enacted the
Zero Net Deforestation Act (2010), targeting net zero deforestation for BC by December
31, 2015, starting with government reporting on deforestation in 2012. The objectives of
the Act are to achieve net zero deforestation without “undermining economic
development,” and to use information and incentives to encourage voluntary action by
industry to avoid and reduce deforestation and increase afforestation levels (BC MFML
2010).

Greenhouse Gas Emission Reporting and Reduction Requirements

In support of Canada’s GHG mitigation targets, since 2010, facilities emitting over
50,000 t of carbon dioxide equivalent have been required to report emissions to
Environment Canada for the Greenhouse Gas Emissions Reporting Program
(Environment Canada 2010), under the jurisdiction of Section 46 of the Canadian
Environmental Protection Act (1999). Data from the Reporting Program are used to
supplement that from the annual Report on Energy Supply-Demand in Canada compiled
by Statistics Canada in national inventory reports to the United National Framework
Convention on Climate Change (Environment Canada 2012d).

In BC, since January 1, 2010, facilities emitting over 10,000 t of carbon dioxide
equivalent must report to the BC Ministry of Environment, and those emitting over
25,000 t CO2e must also have to have emissions verified by an independent and
accredited third party under the BC Reporting Regulation (BC Reg. 272/2009) of the
Greenhouse Gas Reduction (Cap and Trade) Act (2008b).

The above provincial and national reporting regulations only pertain to facility-level
emissions, and so do not include land use change. If the Project facility-level GHG
emissions surpass 50,000 t carbon dioxide equivalent/a, to satisfy federal and provincial
reporting requirements, Project GHG emissions will need to be assessed, verified, and
reported. Project GHG emissions will also be able to be reported through the online one-
window reporting system, which was introduced in 2010 to harmonize the needs of

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 federal and provincial reporting, prevent duplication, and reduce the reporting burden on
industry (BC MOE 2011b).

There is no current cap on industrial GHG emissions mandating emission reductions for
the Project; however, BC’s carbon tax will also apply to purchases for the Project, and the
Greenhouse Gas Reduction (Cap and Trade) Act (2008b), is designed to set the
groundwork for a regulatory regime that was to be implemented through the tabled
Emission Trading Regulation on January 1, 2012. The proposed Emission Trading
Regulation is applicable to facility operations that emit over 25,000 t carbon dioxide
equivalent/a from “emissions from general stationary combustion of fuel or waste with
the production of useful energy” (BC CAS 2010), which would be applicable to the
Project.

Implementation of the Emission Trading Regulation is designed to be concurrent with

that of California’s cap and trade system, as BC, California, Quebec, and other regional
members have arrangements to be GHG emissions trading partners under a linked
system arranged through the regional Western Climate Initiative. The California Air
Resources Board (CARB) delayed the implementation of its own cap and trade system
(under California’s Global Warming Solutions Act, AB 32 [CARB 2006]) until 2013, which
prompted the delay in BC as well.

California has now taken steps to initiate its cap and trade system. In September 2012, it
officially launched the program, followed by the first auctioning of greenhouse gas
allowances by the California Air Resources Board on November 14, 2012 (CARB 2012b),
and its December 14, 2012 announcement of provisions for carbon offset projects (CARB
2012b). Quebec has also now become the first Canadian province to join California and
the Western Climate Initiative in creating a regional carbon market by adopting
regulations to join their two capped systems (MDDEFP 2012; Segun 2012). There is
currently regulatory uncertainty as to whether BC will continue with its original plans
under the Greenhouse Gas Reduction (Cap and Trade) Act (2008b) to join in a capped
and regulated carbon market with California and Quebec or pursue other avenues of
carbon management.

OBJECTIVE
The primary objective of the GHG Management Plan is to mitigate net GHGs emitted to
the atmosphere by Project activities.

TARGETS
The GHG Management Plan targets are to:

 ensure that reporting is carried out to meet requirements

 identify and implement measures to progressively minimize GHG emissions and
maximize fuel and energy efficiency
 maintain a plan to monitor on-site GHG emission data, the cumulative results of
which will be reviewed periodically to determine if any trends are evident and if
target criteria are being met

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  maintain a plan to monitor GHG emissions associated with land use change
GHG sources and sinks
 increase the carbon fixed as biomass by minimizing clearing and by maximizing
vegetation reclamation where possible.

ACTIONS TO AVOID, CONTROL, AND MINIMIZE EFFECTS

Greenhouse Gas Mitigation Hierarchy: Introduction
There are several ways to mitigate the GHG emissions of a project. The GHG
management hierarchy presents the ideal line of mitigation strategy for GHG emissions,
starting with avoidance, then reduction, replacement, enhancement, and finally offsetting
GHG emissions. Carbon offsetting for projects in this hierarchy only takes place after
other reasonable mitigation measures have been implemented.

The actions at the base of the hierarchy are the most transformative and effective at
reducing a company’s GHG emissions profile. Avoidance, reduction, and replacement
activities to mitigate GHG emissions involve reducing fuel use or energy consumption, and
so are also typically cost saving as well. Enhancement includes actions that Seabridge has
committed to regarding replanting activities, which will re-establish vegetation and natural
carbon sequestration from the atmosphere via photosynthesis. Offsetting remaining GHG
emissions that cannot otherwise be mitigated, can involve either purchasing offsets, or
creating them via developing additional offset projects.

Description of Project Greenhouse Gas Emissions Sources

The major source of GHG emissions associated with the Project will be from facility-level
emissions from the fuel/energy needs of the Project. This includes direct, on-site
(Scope 1) sources, such as from diesel engines and blasting, and indirect sources such
as imported electricity consumption (Scope 2) and activities by third parties such as on-
site equipment operation and transport activities to off-site locations (Scope 3). The
Mining Association of Canada (Stratos 2009), states that over 95% of the GHG emissions
generated directly by the mining industry are a result of fossil fuel use. Therefore,
controlling fuel use will result in the most significant GHG emissions reductions, as well
as reduced expenses. In addition, decreasing the variability of energy use and improving
operating and maintenance practices can reduce energy costs by 5 to 10% and in most
cases do not require a capital expenditure.

There will also be net emissions associated with land use change GHG sources and sinks
from activities such as clearing and burning of biomass on land (e.g., deforestation) to
convert it for the Project, emitting GHGs, and restoration through replanting (e.g.,
reforestation) to convert land back to forested land, which will contribute to GHG
sequestration over time.

Greenhouse Gas Mitigation Hierarchy: Implementation

In an effort to mitigate GHG emissions during the various phases of the Project,
Seabridge has already implemented measures that will reduce GHG emissions at the
design phase, and plans to implement a variety of other measures to be implemented
throughout the Project life. Applying the mitigation measures outlined below will enable

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 Seabridge to work with its upstream and downstream partners toward reducing the
atmospheric GHG emissions for the Project across its value chain. This partnership
strategy will enable a cost-efficient method of GHG emissions mitigation for the Project as
well as provide a means of reducing associated fuel/energy costs and other co-benefits.

Please refer to Volume 26 (Section 26.12) of the Application/EIS (Rescan 2013) for
details on the mitigation measures that will be implemented during all Project phases.

Summary of Project Greenhouse Gas Mitigation Measures

The primary GHG mitigation measures for the Project can be summarized as:

 minimizing Project fuel use (e.g., by equipment, vehicles, and generators)

through implementing fuel efficiency/conservation measures;
 minimizing Project energy use (e.g., by facility and electrical equipment) through
implementing energy efficiency/conservation measures; and
 minimizing planned land use change clearing/burning and maximizing
replanting/sequestration where possible.

There is the potential that the net GHG emissions for the Project could be mitigated
significantly compared to those reported in the GHG assessment, depending on
technological advances in fuel and energy efficiency measures over the life of the Project,
as well as potential carbon offsetting schemes under a potentially regulated regime.

MONITORING AND REPORTING

Sources of GHG emissions (e.g., fuel and energy use) will be monitored, and resultant
data will be used for GHG assessments and reporting for the Project as per provincial and
federal guidelines and legislation as well as included in annual reports.

Seabridge will annually review GHG emissions associated with the Project, determine if
any trends are evident, and will assess progress on targets. The need for any actions to
correct or improve on-site GHG emission management will be determined on a case-by-
case basis. Indications of the need for corrective actions and additional control measures
may include:

 data showing an increasing trend in GHG emissions (with other factors of

production held constant); and
 issues being raised by on-site staff, regulators, or local communities.

Discussions will be initiated to resolve issues, and identified solutions will be

implemented and monitored for efficacy.

It is possible that components of the GHG Management Plan may need to be revised over
the life of the Project, based on regulatory changes and technological advances.
Any modification made to the GHG Management Plan will be reported to regulatory
authorities where applicable.

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20.6 ENVIRONMENTAL MANAGEMENT SYSTEM
Seabridge has developed a conceptual Environmental Management System (EMS) and
associated Environmental Management Plans for the Project. As stated in the KSM
Project AIR document approved by the British Columbia Environmental Assessment Office
(BC EAO; 2011), Environmental Management Plans are essential for the EMS for any
major development.

An EMS is a requirement of a Mines Act Permit for mines in BC and is the high-level
framework supporting each Environmental Management Plan. Environmental
Management Plans are the specific and detailed goals, objectives, and procedures for
the protection of worker health and safety, environmental monitoring, and operating
procedures that show the regulatory agencies how legislation and regulations will be met
at the Mine Site and the PTMA. Environmental Management Plans are managed
collectively under the umbrella of the EMS.

Environmental Management Plans are to be applied during the planning, construction,

operation, closure, and post-closure phases of the Project.

The EMS will identify the approach to the Project planning and to the development of the
Project with respect to Seabridge’s legislative and corporate environmental obligations.
The fundamental component of the EMS is the Environmental Management Plans, which
detail environmental protection measures to mitigate potential environmental effects.
The Environmental Management Plan describe the environmental practices and
procedures to be applied during the planning, construction, and operation phases of
the Project.

It is necessary and prudent planning for projects to have an EMS in place to guide project
performance from construction through to closure. An integrated system is required
because there are inherent overlaps in activities, e.g., actions taken to protect workers'
safety and health often protects the environment. For example, emergency response
plans will address spills to the environment that can also have worker and public safety
risks. Similarly, traffic safety and driver training programs can significantly reduce risks to
workers and to the public, as well as spills to the environment. Appropriate training and
other resources will be available to ensure that workers at the Project are properly
equipped to perform their work. The Project operating company will develop an overall
management system for the Project that includes:

 an organizational structure and reporting structure;

 the assignment of responsibilities;
 communication protocols;
 company policies;
 methods to evaluate environmental practices, procedure, and processes; and
 resource allocation.

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 The EMS will define Seabridge’s environmental approach through all phases of the
Project. The EMS is based on prevention, mitigation, and management of effects
identified by the company Environment and Safety Superintendents with input from the
Table of Conditions (Schedule B) from the EA Certificate (#M14-01) which was issued in
July of 2014.

The purpose of the EMS is to organize and guide all activities during all phases of the
Project to ensure orderly, safe, compliant, and environmentally and socially responsible
operations at the mine. The EMS aims to coordinate human aspects of the Project to
control or reduce the Project’s effect on the environment (biophysical and human).

The EMS is the framework within which Environmental Management Plans will be
developed, implemented, maintained, and updated. The following three-step process has
been used for the development of Environmental Management Plans.

 Step One: High-level Framework: The high-level framework will commit to

specific and detailed goals, objectives, and procedures for producing EMPs.
Included in this step is a procedure to re-evaluate monitoring plans, methods,
and objectives for adaptive management goals.
 Step Two: Production of the formal Environmental Management Plans: May be
initiated after the issuance of the EA Certificate, but before construction begins.
This step will follow the procedures and commitments developed in Step One.
 Step Three: Development of Standard Operating Procedures: Development of
the Standard Operating Procedures will fulfill obligations as defined in Step Two.

This three-step process will be used to develop Environmental Management Plans for
each phase of the Project.

The following Environmental Management Plans were prepared and submitted as part of
the Application/EIS (Rescan 2013). Please refer to the Application/EIS (Volume 26) for
details on each of these EMPs.

 Construction Management Plan

 Rock Storage Facility Management and Monitoring Plan
 Tailing Management Facility Management and Monitoring Plan
 Water Storage Facility Management and Monitoring Plan
 Domestic and Industrial Waste Management Plan
 Dangerous Goods and Hazardous Materials Management Plan
 Explosives Management Plan
 Emergency Response Plan
 Spill Prevention and Emergency Response Plan
 Air Quality Management Plan

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  Greenhouse Gas Management Plan
 Terrain, Surficial Geology and Soil Management and Monitoring Plan
 Metal Leaching and Acid Rock Drainage Management Plan
 Groundwater Management Plan
 Glacier Monitoring Plan
 Water Management Plan
 Fish and Aquatic Habitat Management Plan
 Wetlands Management Plan
 Terrestrial Ecosystems Management and Monitoring Plan
 Wildlife Management Plan
 Noise Management Plan
 Heritage Management and Monitoring Plan
 Visual Quality Management Plan
 Traffic and Access Management Plan.

20.7 CLOSURE AND RECLAMATION

Closure and reclamation planning for the Project will contribute to the success of closure
and reclamation during mining and at the end of mine life, which will reduce the need to
restructure Project components, limit the amount of material re-handling, and reduce the
environmental effects of the Project. Mine development and operation will incorporate
techniques to minimize surficial disturbance and, where possible, progressively reclaim
areas affected during construction and operation. Stabilizing and rehabilitating surfaces
will reduce the potential for degradation of the resources due to extended exposure to
climatic factors, reducing closure-related capital costs at the cessation of mining
activities.

20.7.1 REGULATORY FRAMEWORK

BRITISH COLUMBIA MINES ACT (1996A) AND HEALTH, SAFETY AND RECLAMATION CODE (BC MEMPR
2008)
The BC Mines Act (1996a) and Health, Safety and Reclamation Code for Mines in British
Columbia (BC MEMPR 2008) require mining operations to carry out a program of
environmental protection and reclamation to ensure that, upon termination of mining,
land, watercourses and cultural heritage resources will be returned to a safe and
environmentally sound state and to an acceptable end land use. The Mines Act (1996a)
and Health, Safety and Reclamation Code (BC MEMPR 2008) are administered by the
Ministry of Energy, Mines and Natural Gas (MEMNG), now called the Ministry of Energy
and Mines (MEM as of May 2013). The Chief Inspector of Mines has the ultimate
legislative authority for all issues pertaining to the Mines Act and Health, Safety and
Reclamation Code.

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 Proponents of mining projects are required to obtain a permit from the MEM prior to
commencing any work on a mine site, in accordance with Section 10 of the Mines Act
(1996a). Section 10 of the Mines Act requires that a permit application must include:

…a plan outlining the details of the proposed work and a program for the conservation
of cultural heritage resources and for the protection and reclamation of the land,
watercourses and cultural heritage resources affected by the mine, including the
information, particulars and maps established by the regulations or the code (Section
10.1).

As a condition of issuing a permit, the chief inspector may require a security for mine
reclamation, and to provide for protection of, and mitigation of damage to, watercourses
and cultural heritage resources affected by the mine (Mines Act, Section 10.4).

A financial security is required as a condition of all Mines Act permits (Section 10.4 and
10.5) for all, or part of, outstanding costs associated with mine reclamation and the
protection of land, watercourses and cultural resources, including post-closure
commitments. The security held under the Mines Act can also be used to cover the
regulatory requirements of legislation, permits and approvals of other provincial agencies.

The objective of BCs reclamation security policy is to provide reasonable assurance that
the provincial government will not have to contribute to the costs of reclamation and
environmental protection if a mining company defaults on its obligations. In the case of a
company default, the security should allow government to successfully manage the
environmental issues at the mine site, complete any outstanding reclamation
requirements, and continue to monitor and maintain the site for as long as is required
(BC MEMPG 2009). In general, MEM reviews reclamation security at a mine site every
five years, or whenever significant changes occur at the mine. The security can increase
or decrease depending upon assessed liability at the time and financial factors such as
real return bond yields.

FISHERIES ACT (1985)

Fish and fish habitat are protected under the Fisheries Act (1985), as well as other
federal regulatory acts and principles. In 2012, the Fisheries Act was amended to
establish into legislation the federal government’s direction to focus efforts on protecting
the productivity of commercial, recreational, and Aboriginal fisheries; to institute
enhanced compliance and protection tools that are more easily enforceable; to provide
clarity, certainty, and consistency of regulatory requirements; and to enable\enhanced
partnerships with stakeholders. The changes to the Fisheries Act include a prohibition
against causing serious harm to fish that are part of or support a commercial,
recreational, or Aboriginal fishery (Section 35), provisions for flow and passage (Sections
20 and 21), and a framework for regulatory decision-making (Sections 6 and 6.1).

On November 1, 2013, The Fisheries Protection Policy Statement (DFO 2013a) was
issued and replaced the earlier Policy for the Management of Fish Habitat (DFO 1986).
Although the new policy statement does not include the NNL principle, as outlined in the
earlier policy, application of this NNL principle provides some useful guidance when
considering “serious harm to fish”. Any project or activity that causes a serious harm to

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 fish that are part of, or support, a commercial, recreational, or Aboriginal fishery requires
an authorization from DFO. Regulations have been developed to guide the application for
this authorization: Applications for Authorization under Paragraph 35(2)(b) of the
Fisheries Act Regulations. DFO has issued additional guidance in the “The Fisheries
Protection Program Operational Approach”.

The Project entered the EA process prior to the changes in the Fisheries Act and Fisheries
Protection Policy Statement. As such, the original Fisheries Act and Policy for the
Management of Fish Habitat have been used for planning and permitting. The original
Fisheries Act (1985) legislation and policies are discussed below because they have
formed the basis for developing the Closure and Reclamation Plan.

The original Fisheries Act (1985) prohibits the harmful alteration, disruption, or
destruction of fish habitat through physical, chemical, or biological means. The Policy for
the Management of Fish Habitat (DFO 1986) puts forth the principle of NNL of productive
capacity” of fish habitat. Under Section 35(2) of the Fisheries Act (1985), any project or
activity that causes harmful alteration, disruption, or destruction requires an
authorization from DFO. The Fisheries Act (1985) defines fish habitat as “spawning
grounds, nursery, rearing, food supply, and migration areas on which fish depend directly
or indirectly in order to carry out their life processes.” Included in this definition are both
fish-bearing and non-fish-bearing waterbodies, including the surrounding riparian area
and fisheries sensitive zones.

The MMER (SOR/2002-222), enacted in 2002, were developed under Section 36 of the
Fisheries Act (1985) to regulate the deposit of tailing, and other waste matter produced
during mining operations, into natural fish bearing waters. These regulations,
administered by Environment Canada, apply to both new and existing mines. If a
developer proposes to use a natural fish-bearing waterbody for tailing management, a
fish habitat compensation plan must be developed to ensure NNL of fish habitat results
from the use of this waterbody.

ENVIRONMENTAL MANAGEMENT ACT (2003)

The BC Environmental Management Act (2003) prohibits the discharge of waste to the
environment unless specifically authorized. While there are different types of
authorizations under the Act, most mining operations require air emissions, solid refuse
and effluent discharge permits (MOE 2013).

A permit authorizes the discharge of wastes from an industry, trade, business, operation
or activity to the environment, and sets the terms and conditions under which the
discharge may occur so that pollution is prevented. The terms and conditions include
limiting the quantity and quality of waste contaminants, monitoring the discharge and the
receiving environment, and reporting information to the Ministry. Permits are ongoing
authorizations and may be amended, transferred to other dischargers, suspended or
cancelled (BC MOE 2013).

Closed mines must obtain a Certificate of Compliance pursuant to Section 53 of the

Environmental Management Act (2003) and the Contaminated Sites Regulation
(BC Reg. 375/96). The Contaminated Sites Regulation (BC Reg. 375/96) sets the

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 applicable standards for soil, air, and groundwater that must be met to obtain a
Certificate of Compliance.

WATER ACT (1996B)

In BC, ownership of water is vested in the Crown as stated in the BC Water Act (1996b).
The Act is the principal law for managing the diversion and use of provincial water
resources. Under the Water Act, approvals are required for making changes in and about
a stream, to authorize constructions of works, the diversion and use of water and water
withdrawals.

RIPARIAN MANAGEMENT AREA GUIDEBOOK (BC MOF AND BC MOE 1995)

The Riparian Management Area Guidebook (BC MOF and BC MOE 1995) sets out
activities on erodible soils in riparian areas. These guidelines are also consistent with the
spirit of the Mines Act (1996a) and the Health, Safety and Reclamation Code for Mines in
British Columbia (BC MEMPR 2008).

20.7.2 CLOSURE AND RECLAMATION OBJECTIVES

Part 10 of the Health, Safety and Reclamation Code (BC MEMPR 2008) focuses on
reclamation and closure. Section 10.7 identifies reclamation standards. Section 10.7.4
(Land Use) indicates “The land surface shall be reclaimed to an end land use approved
by the chief inspector that considers previous and potential uses.” Section 10.7.5
(Capability) indicates “Excluding lands that are not to be reclaimed, the average land
capability to be achieved on the remaining lands shall not be less than the average that
existed prior to mining, unless the land capability is not consistent with the approved end
land use.” Section 10.7.6 (Long Term Stability) states “Land, watercourses and access
roads shall be left in a manner that ensures long-term stability.”

The conceptual closure and reclamation plan has three objectives that provide assurance
to the Province that the site will be left in a condition that will limit any future liability to
the people of BC:

 to provide stable landforms

 to re-establish productive land use
 to protect terrestrial and aquatic resources.

PROVISION OF STABLE LANDFORMS

The design of the Project’s permanent mine-related landforms, such as the open pits, the
TMF, the WSD that will impound the WSF at the Mine Site, seepage containment dams,
and the RSFs, has been undertaken to ensure long-term stability during mine operations,
after mine closure, and after reclamation works are complete.

Stable landforms require a stable foundation. Field investigations were undertaken to

enable pre-feasibility level design of the TMF, RSFs, the Treaty OPC, and the WSF.
Geotechnical site investigations comprised geological mapping of tunnel routes, the
WSD, and the TMF, as well as drilling of facility foundations. Sampling and geotechnical/

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 hydrogeological testing for characterization of foundations, borrow material, and tailing
materials continued throughout 2012 (Appendices 4-Q and 4-AB of the Application/EIS).
Investigations of the TMF and Mine Site hydrogeology were carried out. Seismic refraction
geophysical surveys were conducted to determine the depth of bedrock at the proposed
dam sites. Multi-spectral Analysis of Surface Waves was conducted to estimate the shear
wave velocity in the alluvial deposits at the proposed dam sites (Tetra Tech 2012;
Appendix 4-C of the Application/EIS). A Seismic Hazard Assessment was carried out
(Appendix 4-J of the Application/EIS). Overburden was assessed at mapping sites and
recovered from drill holes

Long-term stability of landforms will also be achieved through careful design. The design
of RSFs has taken the BC Mines Waste Rock Pile Research Committee dump design
guidelines (Piteau Associates 1991) into account. RSF geotechnical stability during
construction and closure was analyzed using SLOPE/W© 2007 software (Tetra Tech
2012). The mine rock placement progression will build the RSFs in lifts (initially by
bottom-up construction) to consolidate foundations and reduce downslope risks (KCB
2012). Where implemented, top-down designs in the RSFs is limited to 400 m maximum
lifts, which are comparable to current lift heights implemented at other mines in BC,
however the current design for interim placement of waste rock does not exceed 200 m.

The RSFs will be reclaimed. Therefore, final dump configurations are designed with
maximum 105 m high terraces at “as dumped” angle of repose, with flat benches
between terraces. The overall slope angle will be between 26° and 30° to allow for re-
sloping to accommodate reclamation. The upper edge of the RSFs will be rounded off to
shed water and to reduce the potential for erosion at the top of slope edges.
Reclamation/re-vegetation of the RSFs will reduce the potential for infiltration of
precipitation and surface erosion providing more stability.

The TMF will be constructed in three cells, known as the North Cell, the Centre Cell, and
the South Cell as described in Chapter 18.2.

RE-ESTABLISHMENT OF PRODUCTIVE LAND USE

The pre-development land use and conditions form the basis for setting the end land use
and capability objectives. The goal is to return the site to a use consistent with the
current land uses. The current land use information has been obtained from the
environmental and socio-economic baseline studies, which were initiated in 2008 and
continued into 2012 (Appendix 23-A of the Application/EIS) (Rescan 2013).
These studies were undertaken in consultation with the KSM Project EA Working Group
which includes provincial and federal government agencies, Nisga’a Nation, Tahltan
Nation, Gitxsan Nation, Skii km Lax Ha, and the Gitanyow First Nation.

The end land use objective will be primarily to provide for wildlife habitat for the
described wildlife species, including bears, mountain goats, and moose. It is proposed
that the reclamation approaches will result in the development of complex ecosystems
with time and will provide habitat for the species of animals and plants currently
occurring around the proposed Project area. Reclamation will include the development of
wetlands with their characteristic vegetation and use by wildlife such as moose, western

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 toads, American martens, and fishers. With time, and with the development of complex
ecosystems, suitable habitat for the other wildlife species found in the Project area will
develop. Reclaimed areas could be used by guide outfitters and for traplines in the
future, where safety concerns are not an issue. Lost fish habitat will be compensated
through new habitat being created as part of the Fish Habitat Compensation Plan which
is required under Canadian law.

PROTECTION OF TERRESTRIAL AND AQUATIC RESOURCES

The environmental management and monitoring systems that will be in place at the start
of mine construction are designed to ensure the protection of terrestrial and aquatic
resources. Consistent with best management and adaptive management principles, the
Proponent will ensure that management and monitoring systems are updated, as
required. Environmental Monitors will be assigned to the various phases of the Project to
ensure compliance with applicable permits and the Proponent’s environmental policies.

20.7.3 SOIL HANDLING PLAN

Site reclamation must be carried out in areas used for mining (Health, Safety and
Reclamation Code for Mines in British Columbia [BC MEMPR 2008]). The general goal of
reclamation is to restore, where possible, the equivalent land capability so that end land
use objectives can be achieved. To this end, planning will include the conservation of soil
materials suitable for reclamation purposes in areas disturbed by mining, and these
areas will be re-vegetated, where feasible. The landforms resulting from the Project will
also be designed, where possible, and reclaimed to accommodate the desired end land
use objective. Reclamation efforts will be directed toward the development of appropriate
and functional ecosystems. These efforts will be supported by appropriate soil material
handling and re-vegetation strategies.

MATERIALS BALANCE
There are approximately 47 separate facilities that form part of the Project. They range in
area from less than 5 ha, such as some of the construction camps, to 1,660 ha for the
TMF. The total area that will be disturbed by the end of mine operation will be
approximately 4,195 ha. Following the 53-year mine life, the majority of the Mine Site will
be closed, decommissioned, and/or reclaimed. Some facilities, such as the pits, will not
be reclaimed, but will be decommissioned. Other facilities will remain in operation during
the post-closure phase, such as the WSF and the WTP, so they will neither be
decommissioned nor reclaimed. The Process Plant and TMF will be closed and
reclaimed. Soil will only be required for those facilities that will be reclaimed.

ROCK STORAGE FACILITIES

Reclamation of the RSFs will be focused on the slopes of the constructed RSFs. The
surface area of the slopes of the RSFs will be approximately 4.4 Mm2. The reclamation
goal is to have a 50 cm thick soil cover on the slopes to provide sufficient water storage
capacity, primarily to support a forested ecosystem. Therefore 2.2 Mm3 of soil will be
required to reclaim the RSFs.

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 The benches of the Kerr waste rock backfill located below 1,100 m in the Sulphurets pit,
based on a 50-cm cover thickness, will require approximately 61,000 m3 of soil for
reclamation. It is expected that this material will be sourced from various areas, such as
the borrow pit area for the WSD. This extra soil material will also be stored in the
stockpiles located in the Ted Morris Valley.

TAILING MANAGEMENT FACILITY

Following closure of the TMF, a 50-cm cover of till will be spread on the TMF beaches.
The beaches will have a 0.5% slope, so it is assumed that the till thickness will be roughly
50 cm over most of the surface, gradually thinning toward the edges. The beaches will
occupy approximately 9,285,633 m2 or 929 ha. The dam faces (the North and Southeast
dams) will occupy approximately 1,363,364 m2 or 135 ha. The dam crests, which will be
used as rights-of-way for wildlife, will occupy approximately 65,881 m2 or 6.6 ha.
Approximately 1,071 ha of the TMF will be reclaimed, including the dam faces and
beaches. Based on these plans, approximately 5,364,028 m3 of soil or till is required for
closure of the TMF.

20.7.4 CLOSURE AND RECLAMATION PLANNING

INTRODUCTION
This section describes the closure and reclamation approaches that will be used to close
the various Project facilities and reclaim the Project area. It also includes a description of
the design of new landforms created to meet the closure goals of minimizing long-term
potential effects on the environment, and describes the plans for facilities that will not be
closed, such as the WSF. Reclamation will be carried out in most areas. This will include
placement of soils and planting of suitable plant species.

MINE SITE
Mitchell Pit and Block Cave Mine
Closure

Open Pit

The Mitchell deposit will be mined as an open pit from Year -2 to Year 24 and as an
underground block cave mine from Year 23 to Year 53. The open pit operations will be
developed using conventional drill and blast methods to break the rock to a size suitable
for loading and transportation by haul truck. The overall pit slope angles and bench
configurations at the end of the mine life will vary based on wall orientation and stability
(refer to Section 16.0 for details). The pit will have an ultimate wall height of
approximately 1,230 m. Closure of the Mitchell pit includes backfilling with water to form
a pit lake and placing large rocks on the benches to discourage wildlife access to the pit
lake. The Mitchell pit cannot be backfilled with water until underground mining is
completed.

Underground Mining

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 The Mitchell block cave mine will extend the depth of resource extraction an additional
180 m below the pit floor. Underground mining will be conducted using the block caving
method as described in Section 16.3.

Closure of the Block Cave Mine

At closure, all mobile equipment and supplies will be removed and transported off-site.
The major infrastructure, such as crushers, rock breakers, and conveyors will be left in
the mine. Oils will be drained from motors, gears, and electrical equipment, and will be
removed from the site. Explosives, chemicals, and lubricants will be removed from
underground. All electrical cable and piping will be left in the mine. All surface ventilation
fans will be removed. All openings to the surface will be sealed with engineered concrete
plugs.

By the time block caving is completed, the area within the pit directly above the block
cave footprint will have subsided into a block cave crater as described in Section 16.3.

Closure of the Mitchell Pit

The Mitchell pit will be partially flooded when underground mining is completed. Flooding
of the pit will start after the Block Cave has been closed and will take five years.
Approximately 320 Mm3 of water will be required to flood the pit to an 810-m elevation.
The water will be supplied from three sources. The water collected from under the
Mitchell Glacier will provide approximately 88% of the water to flood the pit.
Approximately 9% of the water used to flood the pit will be supplied from the Mitchell
NPWDA. This adit will also collect contact water from the toe of the Mitchell Glacier. The
remaining 3% of the water used to flood the pit will be supplied from precipitation and
non-contact runoff. Precipitation is estimated at 2%, and surface runoff is estimated at
1%.

The Mitchell pit closure dam will be constructed on the west side of the Mitchell pit to
allow for controlled discharge. The Mitchell pit closure dam will be largely constructed
with mine rock from the Mitchell RSF and forms part of the RSF. It will have an acid-
resistant low permeability core keyed into shallow bedrock near the pit rim. The dam will
be located outside the zone of instability caused by subsidence of the block cave works.
The crest of the closure dam will be constructed to an 870 m elevation. This will provide
60 m of freeboard above the normal pit lake. This freeboard will accommodate potential
impact waves caused by landslides (e.g., a potential failure of the north or south pit wall
slopes, initiated from above the pit lake) or avalanches that may enter the pit lake

Storm flows from events of less than 20 Mm3 will be attenuated and retained in the pit
lake and will slowly be bled off to the WSF via the Mitchell pit Lake base flow discharge
pipe located on the north side of the dam at elevation 810 m. This water will flow to a
lined channel (North Slope collection ditch for contact water) to the WSF. The Mitchell pit
closure dam spillway will route storm flows from the pit lake associated with higher flow
events to the North Slope collection ditch, which will be constructed along the north side
of the Mitchell Creek Valley. The North Slope collection ditch will route extreme floods to
the WSF.

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 As noted above, large rocks and debris will be placed on the exposed Mitchell pit
benches to reduce the potential for wildlife access to the pit lake.

The Mitchell NPWDA will be 4.5 km long. It will no longer be required when the pit is
flooded. However, the NPWDA promotes dewatering of the pit slope, which will add to
slope stability. The tunnel will be left to drain. It will be plugged with a granular plug with a
low enough permeability to back up a few metres of water in the tunnel to prevent acid
rock drainage in the tunnel, but the plug will not be impermeable enough to hold back
groundwater from the 500-m-high pit slope.

Ttwin 6 km long drainage tunnels (the Mitchell underground drainage tunnels) will be
used to dewater the underground works during operation. These tunnels will be
approximately 7.5 m high by 7.5 m wide. At closure, each of these tunnels will be sealed
with an engineered concrete plug.

Sulphurets Pit
Closure

Once the Sulphurets pit has been mined out in Year 17, mining operations will shift to the
Kerr pit. The Sulphurets pit will then be backfilled with the waste rock from the Kerr pit.
The Kerr waste rock is predicted to have elevated selenium concentrations, so it will be
placed in the Sulphurets pit to allow for the management of selenium.

The Sulphurets pit backfill will be constructed from the bottom up. Basal drain material
will be placed in the bottom of the Sulphurets pit to provide drainage of the base of the
pit and any water that has moved through the Kerr backfill. Kerr waste rock will then be
placed in the pit in 50 m lifts with 22 m-wide benches. The outer edge of each bench will
be lined with synthetic liner for a width of 100 m such that 78 m of the liner will be
covered by each subsequent lift. This will provide an internal barrier to downward
movement of water within the backfill (waste rock). The benches will have a 2% slope to
enable water on the benches to drain out toward the edge of each bench.

A central collection channel will be located on each bench to capture precipitation and
water that enters the inter-bench sloping area. The water collected in the central
collection channel will be directed along the benches to a 10-m-wide rock-cut step
spillway constructed along the Sulphurets pit wall from the top of the pit to the bottom. A
channel will be built on the Sulphurets pit bench just above the Kerr backfill. This channel
will drain water to the rock-cut stepway to prevent runoff from upper Sulphurets pit walls
and benches from flowing onto the lined top of the waste rock. The water from the
spillway will flow to a control weir. It will be directed to a 10-m-wide stepped spillway and
to a pipeline to the Selenium Treatment Plant.

Precipitation occurring on the lined Kerr waste rock will be non-contact water. It will be
directed to an existing stream adjacent to the top of the waste rock. Once the backfill is
completed, more than 95% of the surface will be covered with a liner.

The upper Sulphurets haul roads will be decommissioned when mining of the Sulphurets
pit is completed and when the pit has been backfilled. These roads have extensive areas

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 of cut and fill. The cut and fill areas will be re-graded to provide stability to the road
edges. All culverts will be removed to allow for the restoration of natural drainage. The
road surfaces will be cross ditched to allow drainage across the surface, and they will be
ripped to reduce the potential for surface erosion. Culverts will be removed off-site for
reuse or recycling.

Similar treatment of the lower haul road will be carried out. However, this road will be
required to monitor the Kerr waste rock backfill. Therefore, the road will be narrowed
from 38 m to 15 m and ditched according to forest road standards.

Reclamation

The Sulphurets pit benches will be reclaimed with a 30-cm layer of protective gravel that
will be placed on the liner surface, and with a 30 cm soil cover layer that will be placed
over the top of the gravel layer. These benches will be re-vegetated with native grass
seed mix. Pocket trees of subalpine fir and hybrid white spruce will also be placed in the
inter-bench area.

Kerr Pit
Closure

The Kerr pit will be located on the south slope of the Sulphurets Valley, directly south of
the Mitchell Valley. The pit will have steep sidewalls and benches. The inter-bench slope
angle will vary and pit slopes will be approximately 600 m high of continuous slope in any
area (refer to Section 16.0 for details). The ultimate pit will be approximately 2 km by 1
km. The pit will be separated from the Mitchell OPC by the Sulphurets Creek Valley and
Sulphurets Ridge.

The ore and waste will be transported across the Sulphurets Creek Valley to the
Sulphurets pit by the Kerr rope conveyor. At the end of mining, the Kerr rope conveyor will
be dismantled and moved off-site, where parts will be reused or disposed of in an
appropriate facility.

During operation, the Kerr pit will have a dewatering system designed to route contact
water from the Kerr pit to treatment. The system will include a pipeline and inlet ponds
that attenuate the peak and convey the 200-year 24-hour flood event. The pipeline will
route the floodwater down through the South Sulphurets Creek Valley, across the
Sulphurets Creek bridge, past the HDS WTP and Selenium WTP to the WSF. The pipeline
will be a HDPE-lined steel pipe, buried where possible.

The Kerr pit external haul roads will be decommissioned. The cut and fill slopes will be
re-graded for stability, where required. The culverts will be removed, and cross ditches
will provide drainage. The surface will be ripped to reduce surface erosion. Any available
stored topsoil material will be spread on the surface and re-vegetated. The access road
will be retained to permit ongoing inspection of the pit.

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 Sulphurets-Mitchell Conveyor Tunnel and Associated Overland Conveyors
Closure

A 3-km long SMCT will be used to transfer crushed ore from the Kerr and Sulphurets pits
and waste rock from the Sulphurets pit to the Mitchell OPC. The tunnel will be 5 m high
and 6.5 m wide. A belt conveyor will be located inside the tunnel.

At closure, this tunnel will be dismantled and all mobile equipment and supplies will be
removed from the tunnel. The non-salvageable electrical cables and conveyor will be left
in the tunnel. The south portal, located adjacent to the Sulphurets pit, and a north portal,
located west of Mitchell pit, will both be sealed with engineered concrete plugs.

The overland conveyors at the Sulphurets pit (conveyors 1 and 2 to the Sulphurets portal)
will be dismantled. . These conveyors will be moved off-site where their parts will be
reused or disposed of in an appropriate facility.

Iron Cap Block Cave Mine

Closure

Operation

The Iron Cap deposit will be mined by underground block caving from Year 32 to Year 53.
The Iron Cap deposit is at an elevation of 1,210 masl. It is approximately 545 m long in
the north-south direction, 570 m wide in the east-west direction, and has an average
depth of 400 m. Mining activities will be conducted as described in Section 16.2

Reclamation

At closure, all mobile equipment will be removed from underground and taken off-site to
be sold or recycled, or disposed of in an appropriate facility. Major equipment and
infrastructure such as the crushers, rock breakers, conveyors (including belts), electrical
cable, and piping will be left in the mine. Oils will be drained from the motors, and
electrical gears will be removed from the site. Explosives, chemicals, and lubricants will
be removed from underground. All surface ventilation fans will be removed, and all
openings to the surface will be sealed with engineered concrete plugs, with the exception
of the return air drifts.

At the completion of mining, the surface inflow water will continue to enter the crater and
flow downward through the abandoned works. Drainage from the Iron Cap Underground
Works will drain directly from the lower-level ventilation tunnels of the workings by raise
bores into the Mitchell NPWDA. This water is considered contact water and will flow
through the MVDT and into the WSF, pending treatment in the HDS WTP. The system is
designed to accept the 200-year peak flow. The underground drifts will collapse following
mining, creating a surface disturbance of approximately 96.4 ha.

Mitchell and McTagg Rock Storage Facilities

Closure

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 The Mitchell and McTagg RSFs represent two separate but adjacent RSFs that will be
joined by a land bridge until the middle of the operation phase. The land bridge will allow
waste rock to be hauled from the Mitchell RSF to the McTagg RSF. The land bridge will be
removed at the end of the Sulphurets open pit operation.

Following the open pit operation, but before closure, two channels will be constructed at
an 810-masl elevation along the north side of the Mitchell RSF. One will handle non-
contact water (Mitchell North closure channel), including diverted water from the East
McTagg closure channel, and the other will handle contact water, including the outflow
from the Mitchell pit Lake. The fresh water (non-contact) diversion channel will be lined
and located on the upslope side of the contact water channel. This will route north-slope
runoff water around the WSF. The fresh water diversion will provide a source of water to
wildlife. The contact water will flow to the WSF.

The Mitchell RSF will be constructed to a final elevation of 1,200 m, and the McTagg RSF
to 1,020 m based on the planned mining activities (Section 16). The Mitchell RSF will be
located on land that has a mean slope of 26o and a maximum slope of 62o. The McTagg
RSF will be located on land that has a mean slope of 30o and a maximum slope of 57o.

A basal drain is constructed underneath portions of the Mitchell and McTagg RSFs.

The tops of the RSFs will be used to construct secure landfills to store sludge from the
HDS WTP, for over 200 years. The sludge will be placed in 200-m-by-100-m cells, which
will be 8 m deep. These cells will be continuously built up. A till/rock containment berm
will be constructed around the edge of the landfills. A runoff collection channel will be
located between the containment berm and the landfill, and this water will flow to the
WSF. The landfill will be lined so that minimum seepage and precipitation will enter the
RSF. The landfill will be constructed such that the surface will be covered with coarse
rock.

The Mitchell RSF ore stockpile will be located along the northern edge of the Mitchell RSF
(Figure 27.5-16 in Chapter 27 of the Application/EIS). It will occupy approximately 70 ha,
will be constructed starting in Year -1, and will have been totally processed by Year 52.
The maximum stockpile size is between 145-150M tonnes. There are two peak periods,
one in Year 7 and the other in Year 16 of production.

A selenium seepage capture system has been designed for the Mitchell and McTagg
RSFs. By Year 5 a seepage collection system incorporating a rock drain overlying a low
permeability layer will be established starting at elevation 706 m at the toe of the RSFs
above the spillway elevation of the WSF. Flows captured by the seepage collection
system will vary seasonally. The system is designed to convey up to 500 L/s to a
Selenium WTP located near the WSD. During months when RSF seepage captured is
lower than the Selenium WTP Capacity of 500 L/s, flow to maximize treatment capacity
will come from the WSD.

Closure

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 The Mitchell OPC is located west of the Mitchell pit. The Mitchell OPC will include facilities
for rock crushing, coarse ore storage, and fuel storage, as well as an ore stockpile feed
conveyor, an electrical substation, and roads. It will also be the location of the southern
portals of the MTT and the Mitchell underground access and conveyor adits. The Mitchell
OPC will occupy approximately 44 ha.

At the completion of mining, the Mitchell OPC will be decommissioned. Equipment will be
removed from the site. The electrical substation will remain. All other structures will be
dismantled and removed. Foundations will be broken up, and the concrete rubble will be
buried on site. Any soils that are contaminated with fuel will be excavated and treated at
a landfarm to remediate the soil.

Reclamation

The Mitchell OPC ground surface will be highly compacted as a result of ore processing
activities. Therefore, the ground will be ripped in two directions to promote drainage.
Once the surface has been ripped and covered with crushed rock, the area will be
covered with up to 50 cm of topsoil. The reclaimed area will then be re-vegetated with
native species

Mitchell Diversion Tunnels

Closure

The MDT will divert water from the Mitchell Glacier and the surrounding catchment during
operations. This water will be discharged into bedrock stepped spillways and into
Sulphurets Creek. This will prevent water from entering the Mitchell pit during open pit
and underground mining. These diversion tunnels will also be used to generate hydro-
electric power from the Upper Sulphurets Power Plant during operations. The diversion
tunnels will continue to be used for hydro-electric power generation during closure,
except when the water is being diverted to the Mitchell pit. The electricity generated will
be used to operate the HDS WTP.

McTagg Diversion Tunnels

Closure

The MTDT will direct non-contact, glacial meltwater and runoff to Gingras Creek, which
drains into Sulphurets Creek. The diverted flows will be used to generate hydro-electric
power during operations. Power will continue to be produced during the closure phase.
The McTagg Power Plant will be located east of the Gingras Creek bridge, and will be
maintained indefinitely to generate electricity. The electricity will be used to operate the
HDS WTP, or will be sold for use in the provincial electricity grid.

Water Storage Facility and Water Treatment Plant

The WSF will remain in service after mine closure to continue collecting contact water
that requires treatment.

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 The HDS WTP is a high-density-sludge lime treatment facility. Sludge produced from the
HDS WTP will be dewatered, producing a filter cake with a water content of approximately
40%. Approximately 165,000 m3 of filter cake will be produced annually.

The HDS WTP and support infrastructure will remain in operation during the closure and
post-closure phases. The plant will operate primarily in the spring, summer, and fall
months, and minimally in the winter. The lime material will be transported to the site, and
will be consumed during these warmer periods. At closure and post-closure, the filter
cake (sludge) will be hauled by truck during the summer to the top of the RSFs and
placed in an engineered landfill.

An ion exchange Selenium WTP located near the WSD will remain in service after mine
closure.

Mitchell Truck Shop

Closure

At closure, all equipment and supplies will be removed and disposed of off-site. All oils
and fuels will be removed from storage facilities and disposed of at an approved waste oil
recycle facility. The electrical, lighting, and heating systems will be removed. Once the
buildings have been emptied, they will be dismantled. Metal and any other material that
can be recycled will be taken off-site for recycling. Demolition materials will be taken off-
site and disposed of in a regulated facility. Flammables will be incinerated and some
waste materials will be landfilled. Foundations of buildings will be broken up, and the
concrete rubble will be buried on site where it will be used for road bed materials or
placed on the RSFs before they are reclaimed. The ground surface will be sampled and
analyzed to determine the degree of hydrocarbon contamination in high use areas. All
contaminated soils will be excavated and treated in a landfarm facility.

Reclamation

The site will then be ripped to 30 cm in two directions to remove compaction and to allow
for downward surface drainage. Soils previously salvaged from the area and stockpiled at
the site will be spread on the surface. Care will be taken not to compact the soils. Any
compacted areas will be lightly ripped. The area will be planted with native grasses, trees,
and shrubs.

Mitchell-Treaty Twinned Tunnels

The MTT are approximately 23-km long, and will be used to provide a transportation route
for ore, personnel, and supplies from the Mine Site to the PTMA. The system utilizes
specialized electric trains with under computer control to manage the traffic and logistics
in the twin tunnels. Details are provided in Section 18.3.

At closure and post-closure, the tunnels will be required to provide ongoing access to the
Mine Site because the CCAR, which serves the Mine Site during operation, will be
decommissioned. As the HDS WTP will continue to operate post-closure, lime will be
required and will be transported from the PTMA through the tunnels to the Mine Site.

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 All supplies for monitoring, maintenance, and the operation of the HDS WTP will be
transported through the tunnels. The train logistics system will be reconfigured and
simplified to handle this much reduced traffic requirement.

Processing and Tailing Management Area

The PTMA will be located in the Upper Treaty and Teigen Creek areas. The processing
area will include numerous structures related to ore processing as well as other facilities
(Figure 27.5-19 in Chapter 27 of the Application/EIS) (Rescan 2013). The following is a
description on how these facilities will be closed and the areas reclaimed. Water
treatment for CIL water will be maintained on stand-by during closure until it is clear that
it will not be required.

Treaty Process Plant, Carbon-in-Leach Plant, and Other Structures

Closure

There will be several structures at the PTMA that will be closed at the completion of
mining. These include the Treaty Process Plant, the CIL Plant, the Treaty OPC waste
management facilities, the Treaty OPC Batch Plant, the Crusher Building, and several
other structures such as the warehouse and lab. All of these structures contain
equipment that must be removed at closure. The Treaty Process Plant and CIL Plant
include equipment such as:

 cone crushers;
 high pressure grinding rolls;
 ball mills;
 copper-gold/molybdenum bulk flotation cells;
 concentrate dewatering equipment; and
 leaching equipment.

At closure, any remaining processing chemicals will be moved off-site and disposed of in
a designated facility. All oils and lubricants will be removed from equipment and moved
off-site to a designated disposal facility. The equipment will be dismantled, and
components will be taken off-site for reuse, recycling, or disposal in an on-site landfill.
Electrical wiring and any other electrical components will be removed and taken off-site
for disposal.

Once all of the equipment has been removed, the buildings will be dismantled and the
materials will be moved off-site for recycling or disposal. Any contaminated soil will be
collected and placed in the landfarm. Any materials that can be incinerated will be
incinerated on-site. The concrete foundations of the various buildings will be broken up,
buried, and used for road maintenance or as armouring in TMF reclamation. All
equipment and debris will be removed from around the structures.

Reclamation

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 The footprint areas and the area surrounding the buildings will be deep-ripped to reduce
compaction and to improve surface drainage. Approximately 30 cm of soil will be spread
over the area as the surface material will be native soil that will provide additional rooting
depth and soil water storage capacity for vegetation establishment and growth. Care will
be taken not to compact the soil. The area will then be re-vegetated with native plants.

Coarse and Fine Ore Stockpiles

Closure

All of the ore in the coarse and fine stockpiles will be processed. The footprint areas will
be cleaned and ripped to reduce compaction and to increase downward drainage.

Reclamation

The footprint areas will be covered with a lime mixture and topsoil, and then vegetated
with native plants as described for the RSFs. The high traffic areas around the stockpiles
will likely be compacted. These areas will also be ripped to reduce compaction and
increase drainage. Once the sites are prepared, 30 cm of topsoil will be spread over the
surface as the stockpiles will have been placed on native soils. The areas will then be re-
vegetated with native plants.

Treaty Ore Preparation Complex Batch Plant Stockpile

Closure

The Treaty OPC may contain stockpiled materials left over from operations consisting of
sands and gravels. Any remaining materials will be used for road maintenance or as rip-
rap along the beach edges in the TMF. Once the materials have been removed, the site
will be reclaimed.

Reclamation

The surface and surrounding high traffic areas will be ripped to 30 cm depth to reduce
compaction and to improve drainage. Remnant coarse fragments will likely remain, so a
50 cm layer of soil will be spread on the surface over the stockpile area, grading to 30 cm
over the high traffic area occurring on native soil. Care will be taken to not compact the
soils. Once the site is prepared, the site will be re-vegetated with native plants.

Temporary Water Treatment 8 - Unlined Muck Pad

Closure

The muck pad that will be developed for the construction of the MTT process plant
portals will be reclaimed once portal construction is completed in the construction phase.
The coarse rock material from the muck pad is predicted to be non-potentially acid
generating. The pad will be re-graded at closure.

Reclamation

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 The high traffic area around the muck pad will be ripped to reduce compaction and to
improve soil drainage. Once the pad and surrounding area have been prepared, a 50-cm
layer of soil will be spread on the pad footprint and will be graded to 30 cm on the
adjacent area. The pad footprint will also be re-vegetated with native plants.

Laydown Areas
Closure

There will be two laydown areas in the PTMA: one large construction laydown area and a
smaller MTT portal laydown area, which will be reclaimed during construction. A helipad
will also be located on the large construction laydown area. These laydown areas will be
covered with gravel to allow for trafficability while they are used. The helipad will also
have a gravel pad.

Before reclamation, both areas will be inspected for hydrocarbon contamination because
equipment and vehicles will be stored in these areas. In stained areas, the gravel will be
pushed aside and stained soils will be excavated and placed in the landfarm.
Hydrocarbon-covered gravel will also be placed in the landfarm.

Reclamation

The laydown areas will be ripped to 30 cm to reduce compaction and to improve surface
drainage. They will then be covered with 50 cm of soil and re-vegetated with native
plants.

Landfarm
Closure

The landfarm will be closed in the post-closure phase because it will be used during
closure for treating any contaminated soils that were excavated during the construction,
operation, and closure phases. When the landfarm is no longer required, the soils will be
checked to assess if treatment has occurred. When no further treatment is required, the
landfarm will be closed.

Reclamation

Once the land-farmed materials have been treated, the area will be covered with 30 cm
of soil and will be re-vegetated with native plants.

Structures Required Post-closure

Some structures in the PTMA will be required for on-going monitoring of the Project
post-closure. These include:

 the office complex

 the ambulance building
 substation 1

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  the operating camp incinerator
 the administration building
 the operating camp (reduced in size from the operation phase).

As described above, the MTT will remain open because the HDS WTP will continue to
operate post-closure, and reagents, including lime and personnel operating the HDS
WTP, will be transported through the tunnels. A smaller camp will be required to
accommodate personnel.

Tailing Management Facility

Closure

The TMF will be developed with three separate ponds as described in Section 18.2.

The South Cell will be bound by the Saddle and Southeast dams. It will operate between
Year 25 and Year 53. Similar to the North dam, the Southeast dam will have a starter
earth fill dam and an inner till core, and will be built up with cycloned, coarse rougher
tailing.

Prior to closure, each of the cells will contain separate ponds. Beaches will be developed
in the North and South cells as the tailing are deposited. The CIL tailing containing most
of the sulphides will remain submerged. The sulphide tailing will be introduced
subaqueously so that there will be no beaches constructed with CIL tailing.

The North Cell will be closed roughly five years after tailing deposition into it ceases.
The timeline is based on the predicated time required for tailing water quality to improve
sufficiently to satisfy water quality standards set for TMF discharges. For closure, the
exposed beach will be expanded, decreasing the open water portion of the cell and
reducing the potential for erosion of the dams. In order to minimize the need for dredging
in constructing the beaches, strategic deposition of tailing will occur during late-stage
North Cell operations. The majority of beach shaping will be done by moving the spigot
points onto the beaches during final operation. Additional beach area will also be created
by pumping down the pond level at closure. The water will be discharged to Treaty Creek.
The objective is to increase the distance from the pond to the dam to reduce the
potential for overtopping and erosion of the dam after closure, to reduce the flotation
pond volume to the minimum possible at closure, and to provide additional wildlife
habitat development.

The South Cell will be closed by means similar to those used to close the North Cell, with
the beach surface increased to reduce potential effects on the dams and to provide
additional wildlife habitat. The increased beach area will result in a reduced amount of
open water in the cell.

The Centre Cell will be the last cell to be closed. It is predicted that the water quality in
the cell will satisfy water quality discharge standards approximately five years following
mine closure. The CIL tailing in the CIL Lined Pond will be covered with approximately 1 m
of non-reactive rougher tailing. The submerged Centre Cell tailing will remain below water

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 with a water cover of 5 m at closure. The beaches in the Centre Cell will be increased by
strategic placing of the spigots. This will reduce the amount of open water in the pond.

Dredging of the channels within the flotation tailing may be required in areas where
runoff into the pond has the potential to scour the water-covered tailing, causing
turbulence and the suspension of sediment. Rip-rap will be used along these dredged
areas to protect them from further scouring. As well, a strip of rip-rap approximately 1 m
wide will be placed along the beaches at the water’s edge to prevent erosion

A 20-m wide channel will be constructed along the southwest side of the TMF to allow the
pond water to flow freely at an elevation of 1,054 masl. Closure pond levels may have to
be adjusted, depending on the actual consolidated tailing elevations observed after
deposition and settlement. The rock cut spillway channels will be at the same elevation
so that, if required, water can be routed either to South Teigen or North Treaty creeks by
adjusting the elevation of inlet weirs or control gates at the spillways. This system will
allow for spillway maintenance by temporarily routing water to either spillway.
Approximately 70% of flow will go to North Treaty Creek, and 30% will be used to maintain
South Teigen Creek flows. These ratios are approximate, based on hydrological
predictions and fisheries requirements.

The North Cell spillway will be constructed during operation, but it will not be used until
final closure. Rock from spillway excavations will provide the rip-rap that will be placed on
the beach edges. The South Cell spillway channel will be cut into rock on the west
abutment of the Southeast dam. This will allow for the routing of floods from the South
Cell beyond the Southeast seepage collection dam to a stepped rock-cut spillway
discharging into North Treaty Creek.

During operation, the East Catchment Diversion dam will direct diverted water through
the East Catchment diversion tunnel to South Teigen Creek. The diverted water will also
be directed north in a buried pipeline (Northeast buried pipeline) to South Teigen Creek.
These dams and diversions will be located on steep, sedimentary bedrock slopes with
some of the lower portions of the diversion alignments vegetated with alder trees. At
post-closure, the East Catchment Diversion tunnel portals will be sealed.

The Northeast diversion ditch will be breached at closure to allow water from the
catchment basins to flow into the TMF.

The Southeast diversion ditch is located on steep, talus-covered slopes, with several
large creeks crossing the diversion alignment. The slope of the catchment is typically
2H:1V to 3H:1V, with little underbrush or tall trees. Part of the Southeast diversion ditch
will be an open channel. Two buried pipelines will occur in the downstream half. During
operation, catchment water will be diverted north to South Teigen Creek. This diversion
will be breached at post-closure, once the North Cell closure spillway becomes
operational and allows flow from its catchment area into the TMF.

The North Cell and the Southeast seepage collection dams will remain in place post-
closure. Water will be pumped back into the TMF pond until seepage collection pond

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 water quality meets regulatory permit requirements. The seepage ponds downstream of
the seepage collection dams will become wetlands.

Reclamation

Following operations, the TMF will be reclaimed to provide for wildlife and wetland
habitat. The dams and beaches of the TMF will be reclaimed in stages, with the North Cell
being reclaimed during operation, the South Cell during closure, and the Centre Cell
during post-closure.

A 50-cm soil cover will be placed on the dam faces over the rip-rap so that the dam faces
can be re-vegetated. The surface will be placed roughly on the dam face to reduce
potential surface erosion. The dam faces will be planted with native grasses.

The crests of the North and Southeast dams will be 20 m wide. These will operate as
wildlife corridors across the valley. Soil covers will be deposited to a depth of 60 cm, to
support large trees for shelter and screening of wildlife without risk to the dam crests.
These crest areas will be vegetated to a forest cover. Tree seedlings will include
subalpine fir and hybrid white spruce, as well as grasses and shrubs, as described above.

Reclamation of the beaches will not be carried out until the beach surface is sufficiently
drained to allow for the use of heavy equipment. A 50-cm cover of till will be spread on
the TMF beaches. The beaches will have a 0.5% slope, so it is assumed that the till
thickness will be roughly 50 cm over most of the surface, gradually thinning toward the
edges.

ACCESS ROADS
Treaty Creek Access Road
During closure and post-closure, the TCAR will provide the only remaining road access to
the Project site. All materials and personnel will be transported via the TCAR, which will
extend to the Treaty OPC and the MTT portals, which will all remain open to allow for
access to the Mine Site post-closure.

Coulter Creek Access Road

Closure

The CCAR will be decommissioned post-closure. The bridges will be dismantled, and
materials that are combustible will be burned. Concrete will be broken and used as rip-
rap along the creeks, if required, to reduce potential surface erosion that could occur
during the dismantling of the bridges.

Culverts will be removed to restore natural drainage patterns. Cross-ditching will provide
drainage across roads and will reduce the potential for surface erosion. The surface of
the road and any compacted areas will be ripped, where required, to promote surface
drainage and to reduce runoff and potential road bed failure.

Reclamation

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 Some soil may be salvaged when the road bed is being constructed. The stockpiled soils
will be stored near the sites where they have been salvaged so that they can be spread
when needed for reclamation. They will be vegetated with native seed mix and tree
seedlings.

QUARRY AND BORROW SOURCES

Closure
The borrow areas will be cleared and grubbed. The quarry and borrow areas will be
re-sloped and re-contoured to ensure escape routes for wildlife and to restore natural
landscape.

Reclamation
Borrow sites located in granular material will be reclaimed. Stockpiled topsoil will be
spread and the areas will be re-vegetated as described for the RSFs. Quarries developed
in bedrock will not be reclaimed.

EXPLOSIVES
Closure
Explosives for the Project will be manufactured on site. The Explosives Manufacturing
Facility, the explosives magazine, and the prilled ammonium (AN Prill) storage area will be
located at separate sites. All three sites will be located in the Ted Morris Valley.
The manufacturing of explosives will be planned to minimize the accumulation of excess
AN Prill and fuel at the end of mining.

All surfactant, oils and fuels, chemicals, and diesel storage tanks will be removed from
the manufacturing facility and disposed of in a designated facility. All equipment will be
removed. Wiring and transformers will be removed from the site and will be reused or
recycled. The Explosives Manufacturing Facility will be dismantled, and any recyclable
materials will be taken off-site. Materials that can be incinerated will be treated on site.
Other materials will be disposed of in the on-site landfill, if suitable for the landfill. The
concrete foundations will be broken up, and the concrete rubble will be buried on site,
spread on the RSFs, or used where required. All contaminated soils will be taken to the
landfarm facility. The gate and fence around the explosives manufacturing compound will
be dismantled and sent off-site for recycling or reuse.

The building footprint and surrounding parking areas will be compacted as a result of the
use of the site. In preparation for reclamation, the surface will be ripped in two directions
to a depth of 30 cm to increase drainage.

The AN prill storage area will be closed. Any remaining prill will be used as fertilizer or will
be disposed of off-site in a regulated facility. All electrical wire and transformers will be
salvaged or will be removed from the site and reused or recycled. The building will be
dismantled and its materials recycled, incinerated, or disposed of in the landfill, if
suitable, as described above. Contaminated soils will be treated in the landfarm. The site
and adjacent areas will be deep-ripped in two directions, as described above.

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 The explosives magazine will be removed at closure. Any remaining explosives will be
detonated on site in a regulated manner to minimize impact to the environment. Similar
to the other facilities, the building will be dismantled. The site will be ripped to reduce
compaction.

Reclamation
The soils that will have been salvaged and stockpiled during construction of each of the
facilities will be spread over the surface and vegetated with native plants as described for
the RSFs. With time, the vegetation community will become more complex as native
plants growing in the adjacent areas gradually move into the reclaimed areas.

MINI HYDRO PLANTS AND ENERGY RECOVERY

Several energy recovery and mini-hydro plants are included in the Project development
plan. These plants generate electrical power by making use of facilities already included
in the Project, resulting in significant net Project energy savings. All of the plants, similar
to small independent power producer hydro-electric plants, will operate unattended and
will be automatically controlled by PLC systems. The power will be fed into the local mine
distribution transmission lines. The power plants will be used to provide electricity for the
Project’s closure requirements, or the electricity may be sold back to BC Hydro under the
Standing Offer Program.

WATER TREATMENT PLANT ENERGY RECOVERY

Water pumped from the water storage pond to the HDS WTP will generate electric power.
A small impulse Turgo-type turbine will be used. The output may be fed into the plant
power distribution system at the HDS WTP. This facility will continue to operate after mine
closure.

Mitchell Diversion Hydro – Upper Sulphurets Power Plant

The Upper Sulphurets Power Plant will make use of the normal (but not flood) stream
flows that will be diverted around the mining operations by the MDTs to produce energy.
The installation will consist of a Pelton turbine and will be very similar to independent
power producer run-of-river hydro plants because it will make use of natural flows,
unimpounded by water storage facilities or any other works other than those required to
divert water around the mine. The equipment will be housed in a small powerhouse
building near Sulphurets Creek. Power will be delivered to the electrical distribution
system. This plant will continue to operate after mine closure.

McTagg Diversion Hydro – McTagg Power Plant

The McTagg Power Plant will generate energy in a manner similar to the Upper Sulphurets
Power Plant. The McTagg Power Plant will be constructed in Year 10, once the diversion
tunnel inlets of the MTDT are raised in Phase 2. It will consist of two Pelton turbines and
will feed power into the plant distribution system at the HDS WTP. This facility will
continue to operate after mine closure.

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 MUCK PADS AND SEDIMENT PONDS
Closure
There are a number of muck pads and sediment ponds located in the Project area. The
treatment ponds will be cleaned out, sediment will be hauled for disposal to either TMF
or within the RSFs and the pond excavations will be backfilled with NPAG rock to bring
the surface to grade. The berms of the ponds will be pulled into the pond area to provide
a level surface.

Reclamation
The muck pads will be covered with a layer of soil 30 to 50 cm deep, and will be re-
vegetated with native plants. The surface of the muck pads will be rough, and some of
the soil placed on these facilities will fall between coarse fragments, resulting in a
variable thickness of soil. This will result in plant establishment that will be successful in
some areas while other areas will remain un-vegetated. The soils will be vegetated with
the native grass mix described for the RSFs.

Approximately 50 cm of soil will be spread over the surface of the backfilled sediment
ponds. The areas will then be re-vegetated with species consistent with the adjacent
vegetation. Care will be taken not to compact the soil cover. If it becomes compacted, it
will be lightly ripped to provide for root establishment. These areas will be vegetated with
the native grass seed mix.

CONSTRUCTION AND OPERATION CAMPS

Closure
There will be 2 operating camps (the Mitchell Operating Camp and the Treaty Operating
Camp) and 10 construction camps. The camps will range in area from less than 1 ha to a
maximum of 16.9 ha, with most camps occupying less than 5 ha.

There will be two operating camps, the Mitchell operating camp, which will accommodate
350 people, and the Treaty operating camp, which will accommodate 250 people. The
Treaty operating camp will be reduced in size at closure, and will then be similar in size to
the current Eskay Creek Mine operating camp. It will be used to support ongoing closure
operation and monitoring.

The camps will generally include portable trailers, an incinerator, materials and
equipment storage areas, a helicopter pad, a helicopter fuelling area, fuel storage, a
septic field, water/sewage treatment, and diesel generators. The portables will be set up
so that they can be dismantled and used at the different sites, as required.

For closure, the portables and all equipment and buildings will be removed. Fuels will be
drained from the generators and tanks, and will be disposed of in a regulated disposal
facility. The generators and fuel tanks will be removed from the site for reuse or recycling.
The soils in the fuel storage areas will also be checked for hydrocarbon contamination. If
hydrocarbon contamination is found, soils will be excavated and transported to the
landfarm for remediation.

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 All construction and operation camp sites will be reclaimed to a slope compatible with the
surrounding natural topography. The high traffic areas will be ripped in two directions to
increase surface drainage and to allow for deeper root penetration.

Reclamation
Prior to construction, topsoil will have been salvaged from the camp site areas and
stockpiled along the edges of the camps. At closure, this soil will be spread over the
disturbed areas. These areas will then be re-vegetated with the native grasses, shrubs,
and tree seedlings that were described for the RSFs. The tree seedlings will be selected
based on the tree species occurring in the vicinity. It is predicted that with time, the
vegetation community will become more complex as native plants growing along the edges
of the camps sites will also naturally re-establish within the reclaimed areas.

Closure of the gravel helipads will entail topping the gravel with 50 cm of soil in order to
provide sufficient moisture holding capacity for replanted vegetation and adequate
rooting depth for tree seedlings. Approximately 20 cm of topsoil will be spread in areas
that occur on native soils. These areas will also be re-vegetated with the native plants
and tree seedlings described for the RSFs.

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21.0 CAPITAL AND OPERATING COST
ESTIMATES

21.1 INITIAL CAPITAL COSTS

An initial capital of US$5.005 billion is estimated for the Project, based on capital cost
estimates developed by the following consultants:

 MMTS: open pit mining, mine roads, ore trains, and infrastructure and water
diversion tunnels
 Kambert Civil Consulting Ltd. (KCC): costing of water management structures
and the TMF, designed by KCB
 EBC Inc. (EBC): costing of the WSD, designed by KCB
 Tetra Tech: process plant and associated infrastructure, including plant site
preparation, water treatment plant, construction camps
 Brazier: permanent power supply, fire detection, mini hydro plant, and energy
recovery systems
 EBA: winter access road and review of KCC and EBC cost estimates
 ERM: environmental
 BGC: landslide management, avalanche management, and pit depressurisation
 McElhanney: main access roads (TCAR, CCAR)
 Seabridge: Owner’s costs.

The capital cost estimate uses the structure summarized in Table 21.1.

Table 21.1 KSM Capital Cost Estimate Structure Summary

Area Area Cost
No. Description (US$)
1 Direct Costs 3,311,102,000
2 Indirect Costs 862,237,000
3 Owner’s Cost 160,233,000
4 Contingency 670,995,000
Notes: Costs have been rounded to the nearest thousands of dollars.

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 All currencies in this section are expressed in US dollars, unless otherwise stated. Costs
have been converted using a fixed currency exchange rate of US$0.80 to Cdn$1.00.
Metal prices are based on the three-year trailing average prices from July 31, 2016 back
to August 1, 2013.

The expected accuracy range of the capital cost estimate is +25/-10%.

The costs stated in Table 21.1 include only initial capital, which is defined as all costs to
build the facilities that mine, transport, and process ore to produce first concentrate and
doré. Costs incurred during ramp-up of the mine and process plant in Year 1, through
commercial production, are included in the operating costs in Section 21.3.

This estimate is prepared with a base date of Q2 2016. The estimate does not include
any escalation past this date. Budget quotations were obtained for major equipment;
vendors provided equipment prices, delivery lead times, spare allowances, and freight
costs to a designated marshalling yard in northern BC, with some exceptions for delivery
points to different BC locales. The quotations used in this estimate were obtained in Q1
and Q2 2016, and are budgetary and non-binding.

For non-major equipment (i.e. equipment less than US$100,000), costing is based on in-
house data, quotes from previous projects, or maintained from the 2012 PFS (Tetra Tech
2012) estimate. No cost escalation from 2012 to 2016 is included. A comparison of
2016 quotes vs. 2012 quotes for the same vendor revealed no significant trend of
escalation; therefore, no escalation was applied.

All equipment and material costs includes Incoterms FCA. Other costs such as spares,
taxes, duties, freight, and packaging are covered separately in the estimate as indirect
costs.

The estimate cost breakdown structure (CBS), which is based on the work breakdown
structure (WBS) for the Project, is presented in Table 21.2.

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 Table 21.2 Capital Cost Summary
Major
Area Cost
No. Major Area Description (US$)
1 – Direct Costs
1.1 Mine Site 1,218,098,000
1.2 Process 1,336,423,000
1.3 TMF 440,697,000
1.4 Environmental 14,592,000
1.5 On-site Infrastructure 22,851,000
1.6 Off-site Infrastructure 119,580,000
1.7 Permanent Electrical Power Supply and Energy Recovery 158,861,000
Total Direct Costs 3,311,102,000
2 – Indirect Costs
2.91 Construction Indirect Costs 449,092,000
2.92 Spares 34,314,000
2.93 Initial Fills 19,664,000
2.94 Freight and Logistics 99,015,000
2.95 Commissioning and Start-up 6,120,000
2.96 EPCM 230,957,000
2.97 Vendor’s Assistance 23,075,000
Total Indirect Costs 862,237,000
3 – Owner’s Costs
3.98 Owner’s Costs 160,233,000
4 – Contingency
4.99 Contingency 670,995,000
2016 PFS Capital Cost Total 5,004,566,000
Notes: Costs have been rounded to the nearest thousands of dollars.

The detailed capital cost estimate breakdown is included in Appendix L1.

The parameters used in the estimate are shown in Table 21.3.

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 Table 21.3 Capital Cost Estimate Input Parameters
Item Parameter
The following blended all-in construction labour rates are to be used:
Earthworks US$76.00
Civil Piping US$76.00
Concrete Works US$76.00
Steel US$76.00
Architectural US$76.00
Mechanical Equipment US$76.00
Mechanical Bulks US$76.00
Building Services US$76.00
Electrical US$76.00
Instrumentation US$76.00
The following labour productivity factors shall be applied:
For Work on Surface 1.30
For Work Inside Tunnels 1.20
Open Pit Mining 1.18
Concrete Unit Rate (Installed Cost) US$1,472/m3
(includes aggregate/batch/wash/asphalt plant)
Steel Unit Rate US$4,774/t
(supply and installed cost)
In the event that spares are not quoted, the following percentages were used:
Spares for Construction Calculated as a 3%
Percentage of Direct Capital
Commissioning Spares 2%
Note: The base labour rate used is US$33.10.

21.1.1 EXCLUSIONS
The following items are not included in the capital cost estimate:

 force majeure
 schedule delays, such as those caused by:

 major scope changes

 unidentified ground conditions
 labour disputes
 environmental permitting activities
 abnormally adverse weather conditions
 receipt of information beyond the control of the EPCM contractors
 salvage value for assets only used during construction
 cost of financing (including interests incurred during construction)
 sales taxes (PST, GST and HST)

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  royalties or permitting costs, except as expressly defined
 schedule acceleration costs
 working capital
 cost of this study and future feasibility study
 sunk costs.

21.1.2 LABOUR RATES

A standard labour rate has been applied to various areas of the Project. The standard
construction labor rate used is US$76.00/h (Cdn$95.00/h) and is considered fully
burdened. The base labour rate of US$33.10 (Cdn$41.38) was calculated from a
combination of union rates published by Mine site for BC (2015), independent contractor
quotes, Christian Labour Association of Canada, and recent construction projects in BC.
The loaded labour rate build-up uses the following percentages:

 fringe benefits and burden 34%

 shift (day/night) premium 3%
 overtime premium 29%
 overhead, fees and profit 25%
 personal protective equipment, 7%
small tools and supplies
 location premium 25%
 incentives on full shift attendance, 5%
safety, target achievement, etc.

The detailed build-up for the construction labour rate is presented in the Basis of
Estimate Report in Appendix L1.

21.1.3 CONCRETE AND STRUCTURAL STEEL

CONCRETE
The concrete composite unit rates are based on a quote by a supplier (including direct
costs, indirect costs, overhead, and profit) applicable for the northern BC region.

The cost of standard concrete placed is shown in Table 21.4.

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 Table 21.4 Cost of Standard Concrete Placed
Cost Cost
Item (Cdn$/m3) (US$/m3)
Concrete Price 380.00 304.00
Pumping Base Rate 3.00 2.40
Mobilization and Demobilization 7.40 5.92
Delivery 11.00 8.80
Winterization 7.60 6.08
Batched Concrete Subtotal 409.00 327.20
Rebar based on 110 kg/m3 @ $1.20/kg 130.00 104.00
Formwork 226.00 180.80
Concrete, Rebar and Formwork Subtotal 765.00 612.00
Rented Equipment 25.00 20.00
Labour to Place Concrete 8.5 h x 1.3 x $95 1,049.75 839.80
Total Concrete Placed 1,839.75 1,471.80

The total unit cost of concrete includes the cost of concrete (including wastage, pumping,
mobilization/demobilization), delivery of concrete to formworks from the batch plant, the
cost of formworks materials and installation and the cost of rebar materials and
installation.

The unit cost of concrete excludes geotechnical site investigations,

earthworks/excavation, backfill, compaction, heated ready-mix concrete, insulation on
concrete forms, concrete admixtures/chemicals, water stops, concrete curing, cost of
power, wash-off water, corrosion inhabitants, any special coatings, damp proofing, or
paint.

STRUCUTRAL STEEL
Structural steel quantity material take-offs (MTOs) were derived from Tetra Tech historical
data and adjustments were made, where necessary, to allow for any unique location
requirements. Where historical data were not available, preliminary engineering was
performed to provide basis for the quantity MTOs.

The pricing breakdown of structural steel is shown in Table 21.5.

Table 21.5 Cost of Structural Steel

Cost Cost
Item (Cdn$) (US$)
Fabricate and Deliver 3,000 2,400
Erection 22 h x 1.3 x $95 2,717 2,174
Rented Equipment 250 200
Cost ($/t) 5,967 4,774

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21.1.4 ASSUMPTIONS
The following assumptions have been made in the preparation of this estimate:

 All material and installation subcontracts are competitively tendered on an open

shop basis.
 Site work is continuous and is not constrained by the Owner.
 The work week is assumed to be 10 h/d with a rotation of 20-days-on/10-days-
off for the construction phase of the Project. This is an atypical roster, yet
purposefully selected to be compliant with daily maximum and weekly average
maximum hours worked (including for time off) as per the BC Mines Act. This
will cater for a significant proportion of construction staff who will travel long
distances on their off time and to reduce fatigue risk of longer rotations (e.g. 28
days). The exception to this turnaround rotation for construction personnel are
the WSD and tunnelling staff, which are based on 21-days-on and 7-days-off,
and the WSD and tunnelling crew, which are based on 11 h/d with 28-days-on
and 14-days-off.
 A productivity factor of 1.30 has been applied to the labour portion of the
construction estimate to allow for the inefficiency of long work hours, climatic
conditions, and the 20-day-on/10-day-off rotation. This is based on in-house
data supplied by contractors on previous similar projects for northern BC
construction.
 Skilled tradespersons, supervisors, and contractors are readily available.
 The geotechnical nature of the destination site is expected to be sound, uniform,
and able to support the intended structures and activities. Adverse or unusual
geotechnical conditions requiring stockpiles for soil densification is not allowed
for in this estimate.
 Sales taxes (PST, GST and HST) are excluded from the estimate.

21.1.5 DIRECT COSTS

MINE SITE
The Mine Site capital costs are US$1.2 billion and are broken down in Table 21.6.

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 Table 21.6 Mine Site Capital Costs
Area Cost
No. Area Description (US$)
1.1.01 Open Pit Mining 435,655,000
1.1.02 WSF 285,560,000
1.1.03 SWM 222,393,000
1.1.04 Water Treatment 182,614,000
1.1.05 Ancillary Buildings 4,070,000
1.1.06 Site Services and Utilities 1,959,000
1.1.07 Power Supply and Distribution 4,494,000
1.1.08 Camps 57,870,000
1.1.13 Geohazards 23,483,000
Mine Site Capital Costs Total 1,218,098,000
Note: Costs have been rounded to the nearest thousands of dollars.

Open Pit Mining

Open pit capital costs are derived from a combination of supplier quotes and historical
data collected by MMTS, valid for Q3 2016, and are shown in Table 21.7

Table 21.7 Open Pit Mining Capital Costs

Sub-area Cost
No. Sub-area Description (US$)
1.1.01.01 On-site Roads and Initial Earthworks 72,134,000
(Pioneering Works including Sulphurets Quarry)
1.1.01.02 Pre-production Operating Cost 199,780,000
1.1.01.04 Mining Equipment 155,643,000
1.1.01.05 Mining Pits Depressurization Wells 4,709,000
1.1.01.08 Electrical 3,389,000
Open Pit Mine Capital Cost Total 435,655,000
Note: Costs have been rounded to the nearest thousands of dollars.

Open Pit Mining Capital Basis of Estimate

Mine mobile equipment capital costs are shown in Table 21.8 and are based on a unit
cost for each piece in the fleet, multiplied by the number of units purchased during pre-
production. Fleet sizes are described in greater detail in Section 16.1.

Pricing for all major units is based on budgetary quotes provided by vendors operating in
the region, for equipment that is delivered, assembled, commissioned, and ready to
work. Where possible, three quotes have been obtained. The capital cost of a new
machine is recorded in the year it is scheduled to begin operation.

The equipment mine capital costs include delivery to the site, assembly, and an estimate
of critical spares inventory, but do not include taxes or duties. Costs for freight,

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 assembly, and spares are included as an indirect capital cost. All equipment and
materials are purchased new.

Pioneering and open pit pre-production operating costs accrued before start-up are
capitalized.

Pioneering activities completed prior to Year -3 will be performed with a mix of Owner
and contractor equipment. Contractor equipment listed in Table 21.8 has a mobilization
and demobilization capital cost of 10% of the purchase price of a machine, and a
contractor margin/overhead of 25% added to operating and labour costs.

Table 21.8 Open Pit Mine Mobile and Engineering Equipment Capital Costs
Cost
Item (US$)
Drills/Shovels/Haulers 105,935,000
Contractor Equipment 4,272,000
Support Equipment 40,409,000
Engineering Equipment 5,027,000
Mobile and Engineering Equipment Capital Cost Total 155,643,000
Note: Costs have been rounded to the nearest thousands of dollars.

Water Storage Facility

The WSF capital estimate is US$285.6 million and includes the items listed in Table
21.9. The main dam structure is the largest cost at US$122.2 million.

EBC used a bottom-up approach for costing and split the WSD into 15 sections using a
WBS. The estimate EBC developed is a bid quality estimate and is based in part on their
recent experience constructing the similar La Romaine asphalt core dam in northern
Quebec. EBC incorporated the seasonal constraint of constructing a dam with
temperature sensitive materials and a reasonable rate of rise to yield a multi-year
construction duration that becomes a primary cost driver for the WSF. The WSF cost
includes surface and subsurface (cofferdams and construction diversion tunnel)
construction period water diversions, main and seepage dams and associated smaller
structures, pumping and piping, and power infrastructure to deliver WSF collected water
up over the dam to the HDS WTP.

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 Table 21.9 Water Storage Facility Capital Costs
Sub-area Cost
No. Sub-area Description (US$)
1.1.02.02 Water Storage Construction Diversion Tunnel 58,104,000
and Seepage Collection Tunnels
1.1.02.06 Cofferdam 423,000
1.1.02.08 Spillway 39,166,000
1.1.02.12 Main Dam 122,224,000
1.1.02.14 Seepage Dam 2,442,000
1.1.02.15 Fuel* -
1.1.02.17 Pumping and Pipelines 49,452,000
1.1.02.18 Electrical (including portable substations) 13,749,000
Water Storage Facility Capital Cost Total 285,560,000
Note: *Includedin earthworks unit rates
Costs have been rounded to the nearest thousands of dollars.

Surface Water Management

The surface water managment capital estimate is US$222.4 million and includes all the
items that are required to collect and route surface water around the Mine Site. The
different surface water management costs are listed in Table 21.10, with the majority of
the costs related to the three principal water diversion tunnels (MDT, MVDT, and MTDT).

Table 21.10 Surface Water Management Capital Cost Estimate

Sub-area Cost
No. Sub-area Description (US$)
1.1.03.22 Diversion Pipelines 7,771,000
1.1.03.23 Collection Ditches 6,281,000
1.1.03.31 MDT – Collection Galleries for Mitchell Glacier Diversion Tunnel 1,489,000
1.1.03.32 MDT (Open Pit Stage) 69,528,000
1.1.03.34 MDT (Underground Phase - Outlet Portals) 1,067,000
1.1.03.41 NPWDA and SSDA 991,000
1.1.03.50 MVDT and Mitchell OPC Decline Tunnel 60,269,000
1.1.03.61 MTDT (Stage 1) 74,996,000
Surface Water Management Capital Cost Total 222,393,000
Note: Costs have been rounded to the nearest thousands of dollars.

Water Treatment
Water treatment at the Mine Site is divided into TWTPs and the permanent HDS WTP.
The major cost for water treatment is the HDS WTP at US$159.7 million (Table 21.11).
The Selenium WTP comes online in Year 5 of operations and is not presented as part of
the initial capital costs.

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 Table 21.11 Water Treatment Capital Cost Estimate
Sub-area Cost
No. Sub-area Description (US$)
1.1.04.01 TWTP – Temporary Pads For Tunnel Muck Storage 7,001,000
1.1.04.02 Temporary Water Treatment – Ponds and Piping 6,160,000
1.1.04.03 TWTP Mine Site – Process Equipment 9,746,000
1.1.04.04 HDS WTP – Permanent WTP 159,708,000
Water Treatment Capital Cost Total 182,615,000
Note: Costs have been rounded to the nearest thousands of dollars.

Ancillary Buildings
The ancillary buildings at the Mine Site are estimated at US$4.1 million, with the
temporary truck shop as the largest cost at US$2.5 million. The permanent truck shop
and the explosives facilities are included as part of the sustaining capital costs.

Site Services and Utilities

A total of US$2.0 million is allocated to site services at the Mine Site, with the portable
mine substation at the temporary truck shop as the largest contributor at US$1.4 million.

Power Supply and Distribution

A total of US$4.5 million is allocated to power supply and distribution, with the
transmission lines from Substation No. 2 to the Mine Site as the largest contributor at
US$2.1 million.

Camps
Total camp costs at the Mine Site are US$57.9 million and include Construction Camp
Nos. 2 (Ted Morris), 4 (Mitchell North), 9 (Mitchell initial), 10 (Mitchell secondary), and
the Mitchell Operations Camp. Each camp includes dormitories, kitchen and dining
facilities, incinerator, recreation facilities, check-in and check-out areas, administrative
offices, and first-aid facilities.

Details for camp costs can be found in the Basis of Estimate Report located in Appendix
L1.

Geohazards
Geohazard costs include landslide management at US$1.8 million and avalanche
management at US$21.7 million.

PROCESS
The battery limits for process in the CBS are the Mitchell OPC (primary crusher), the MTT
(including Saddle), trains, and the Treaty OPC (crushing, grinding, flotation, concentrator
and leaching, Treaty OPC buildings and equipment). TMF costs are separate from
process costs. Process capital costs are estimated at US$1.336 billion and TMF capital
costs are estimated at US$440.7 million.

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 Table 21.12 Process-Treaty OPC Capital Cost Estimate
Area Cost
No. Area Description (US$)
1.2.01 Primary Crushing 52,244,000
1.2.02 Ore Delivery Tunnel 364,987,000
1.2.05 MTT Material Transportation 221,527,000
1.2.06 TWTP No. 4 Water Treatment – Saddle 4,367,000
1.2.07 TWTP No. 8 Water Treatment – Treaty 2,798,000
1.2.08 Treaty OPC – Coarse Ore Stockpile 82,841,000
1.2.09 Treaty OPC – Secondary Crushing 58,610,000
1.2.10 Treaty OPC – Fine Ore Stockpile 47,100,000
1.2.11 Treaty OPC – Tertiary Crushing - HPGR 70,486,000
1.2.12 Process Building 74,410,000
1.2.13 Primary Grinding 75,465,000
1.2.14 Copper Flotation 42,568,000
1.2.15 Pyrite Flotation 7,530,000
1.2.16 Pyrite Concentrate Regrinding 22,881,000
1.2.17 Cyanide Leaching 41,947,000
1.2.18 Gold/Silver Refinery 9,794,000
1.2.19 Copper Concentrate Handling 4,779,000
1.2.20 Molybdenum Floatation Circuit 3,805,000
1.2.21 Molybdenum Concentrate Handling (including Leaching) 4,158,000
1.2.22 Cyanide Recovery and Destruction 17,770,000
1.2.23 Reagent Area 5,390,000
1.2.24 Plant Control System 3,966,000
1.2.25 Site Services and Utilities 12,302,000
1.2.27 Treaty OPC - Temporary Laydown Area 584,000
1.2.30 Treaty OPC – Ancillary Buildings 25,984,000
1.2.31 Process Plant Utilities 7,217,000
1.2.32 Treaty OPC – Mobile Equipment 8,874,000
1.2.33 Power Supply and Distribution 5,868,000
1.2.34 Treaty OPC – Roads 1,149,000
1.2.35 Treaty Operations and Construction Camps 55,022,000
Process-Treaty OPC Capital Cost Total 1,336,423,000
Note: Costs have been rounded to the nearest thousands of dollars.

Primary Crusher
The primary crusher includes crusher equipment, earthworks, and conveyors, including
the tripper conveyor depositing ore to the loading bins at train loading station. The
capital cost estimated for the primary crusher is US$52.2 million.

Ore Transport
Ore transport includes the tunneling cost for the MTT, as well as the train operations from
loading bins at the Mine Site to the discharge/load out station at the Treaty OPC. The
TWTPs required for tunneling are also included in this breakdown (Table 21.13).

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 Table 21.13 Ore Transport Capital Cost Estimate
Area Cost
No. Area Description (US$)
1.2.02 Ore Delivery Tunnel 364,987,000
1.2.05 MTT Material Transportation 221,527,000
1.2.06 TWTP No. 4 Water Treatment – Saddle 4,367,000
1.2.07 TWTP No. 8 Water Treatment – Treaty 2,798,000
Ore Transport Capital Cost Total 593,679,000
Note: Costs have been rounded to the nearest thousands of dollars.

Ore Delivery Tunnel

Multiple bid-quality construction cost estimates were prepared by tunneling contractors
and benchmarked against data in northern Canada to establish appropriate unit
excavation costs to be applied against variable geotechnical conditions along the tunnel
alignments. Tunneling costs include for all labor, supervision, equipment, consumables
to complete tunnel excavation, place track and ballast, and construct ancillary facilities.
The estimated cost for the MTT is US$365.0 million. Greater detail on the development
of tunneling costs is included in the Basis of Estimate Report in Appendix L1.

MTT Material Transportation

MTT material transportation comprises all components of the train system that will
transport ore from the Mine Site to the Treaty OPC, consumables from the Treaty OPC to
the Mine Site, and personnel in both directions. The train scope includes capital costs for
all train rolling stock and train related infrastructure (i.e., track and ballast; load stations;
electrical, including catenary, signaling and control system; unloading stations; feeders;
maintenance shops; and control room).

Capital costs for the train systems for the Project are based on budgetary quotes
provided by an equipment vendor operating in similar environments globally. The
estimates were submitted in Q2 2016 with an assumed expiration date of Q3 2016.

The train system capital estimate, including power supply and fire detection, is
US$221.5 million.

Coarse Ore Stockpile

The coarse ore stockpile includes the reclaim conveyors and snow covering for the
stockpile and is estimated at US$82.8 million.

Secondary Crusher
Secondary crushing includes the crusher, conveyors, and screens and is estimated at
US$58.6 million.

Fine Ore Stockpile

The fine ore stockpile includes the reclaim conveyors and snow cover structure and is
estimated at US$47.1 million.

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 Tertiary Crusher
Tertiary crushing consists of two HPGR crushers and includes the earthworks, building
enclosure, and all equipment and conveyors associated with tertiary crushing; this is
estimated at US$70.5 million.

Flotation, Concentrator and Leaching

The process plant consists of the components listed in Table 21.14 and is estimated at
US$314.5 million.

Table 21.14 Flotation, Concentration, and Leaching

Area Cost
No. Area Description (US$)
1.2.12 Process Building 74,410,000
1.2.13 Primary Grinding 75,465,000
1.2.14 Copper Flotation 42,568,000
1.2.15 Pyrite Flotation 7,530,000
1.2.16 Pyrite Concentrate Regrinding 22,881,000
1.2.17 Cyanide Leaching 41,947,000
1.2.18 Gold/Silver Refinery 9,794,000
1.2.19 Copper Concentrate Handling 4,779,000
1.2.20 Molybdenum Flotation Circuit 3,805,000
1.2.21 Molybdenum Concentrate Handling (including leaching) 4,158,000
1.2.22 Cyanide Recovery and Destruction 17,770,000
1.2.23 Reagent Area 5,390,000
1.2.24 Plant Control System 3,966,000
Flotation, Concentration, and Leaching Capital Total 314,463,000
Note: Costs have been rounded to the nearest thousands of dollars.

Treaty OPC Process Plant Mobile Equipment

The total cost for mobile equipment for the Treaty OPC is US$8.9 million and includes for
various lifts (fork, scissor, etc.), light duty vehicles, cranage, and small miscellaneous
equipment used by process operations and maintenance at both the Mine Site and
Treaty OPC.

Treaty OPC Ancillary Buildings

Ancillary buildings, which include administration buildings and all related buildings
associated with process, is estimated at US$25.9 million. Construction (Camp Nos. 5
and 6) and permanent operations camps are estimated at US$55.0 million. The total is
estimated at US$80.9 million.

Site Services and Utilities

Site services and utilities are estimated at US$12.3 million, temporary laydown area at
US$0.6 million, and process plant utilities, such as process water and plant site fuel
unloading/pumping station (US$7.2 million), power supply and distribution
(US$5.9 million), and plant site roads (US$1.1 million), totals US$27.1 million.

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 TAILINGS MANAGEMENT FACILITY
The TMF capital costs are US$440.7 million as show in Table 21.15.

The TMF estimate was developed by KCC within the AACE® Recommendation Practice No.
56R-08 guidelines. The estimate is based on a first principles approach to execute the
work based on the design of the facility as detailed in Section 18.2, and typical
equipment spreads for large earthwork construction, production factors for similar type
construction accounting for workforce skill level, site conditions, climate, and
accessibility. The tailing starter dam structures are the largest cost at US$187.5 million.

Table 21.15 TMF Capital Costs

Area Cost
No. Area Description (US$)
1.3.01 General Costs and Consumables (e.g. fuel) 116,513,000
1.3.02 Water Management 44,702,000
1.3.03 Tailing Starter Dams 187,454,000
1.3.04 Seepage Dams 7,192,000
1.3.05 Discharge Pipeline and Diffuser 13,636,000
1.3.06 Geotechnical Laboratory 337,000
1.3.07 Tailing Disposal and Reclaim 68,257,000
1.3.08 Electrical 2,606,000
TMF Capital Cost Total 440,697,000
Note: Costs have been rounded to the nearest thousands of dollars.

ENVIRONMENTAL
The environmental capital costs are exclusively for fish compensation bonds estimated at
US$14.6 million. Other environmental costs are captured under Owner's costs.
Reclamation is excluded from this estimate as it is captured in the financial analyses.

ON-SITE INFRASTRUCTURE
On-site infrastructure includes overall site services and utilities, as well as other
temporary services, and is estimated to cost US$22.9 million.

OFF-SITE INFRASTRUCTURE
Off-site infrastructure capital costs are show in Table 21.16 and are estimated at
US$119.6 million. Off-site infrastructure includes the TCAR, CCAR, winter access road,
Highway 37 marshalling yard, concentrate storage shed to be built at the Stewart, BC
port, and off-site camps. Off-site camps comprise costs for camps at Granduc, along
Highway 37, and those that support TCAR and CCAR construction (Camp Nos. 3, 7, 8, and
11). Off-site camps at Granduc and along Highway 37 assume more than double the
daily operating costs to establish a reasonable capital cost for usage as compared to on-
site camps to account for leasing or renting a camp from a third party.

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 Table 21.16 Off-site Infrastructure
Area Cost
No. Area Description (US$)
1.6.01 Treaty Road Marshaling Yard at Camp 11 6,047,000
1.6.02 Permanent Access Roads 63,143,000
1.6.03 Temporary Winter Access Roads 9,095,000
1.6.05 Off-site Concentrate Storage (Stewart, BC) 24,308,000
1.6.06 Off-site Camps 16,987,000
Off-site Capital Cost Total 119,580,000
Note: Costs have been rounded to the nearest thousands of dollars.

PERMANENT ELECTRICAL POWER SUPPLY AND ENERGY RECOVERY

The permanent electrical power supply and energy recovery capital costs are show in
Table 21.17. The permanent electrical power cost accounts for the cost of power supply
to the Project from BC Hydro’s NTL transmission line and the KSM primary site
distribution and main substations. This includes a capital cost contribution covering part
of the cost of BC Hydro’s Treaty Creek Switching Station on the NTL, the cost of the
30 km long, 287 kV, KSM transmission line extension to the Project site, the cost of the
main step-down substation at the Treaty OPC, the cost of the 24 km long, 138 kV power
cables through the MTT, and the cost of the Mine Site step-down substation. The
required capital cost contribution, required by the utility tariffs to cover a percentage of
BC Hydro’s NTL transmission line, are not due until the start of commercial production;
thus, are included in sustaining capital.

The energy recovery capital cost includes installations as necessary to recover energy
from otherwise required water diversions and normal process flows. This includes hydro
generation from the MDT, hydro generation by the water flow from the WSD to the HDS
WTP, and energy recovery pump turbines in the tailing line.

Table 21.17 Permanent Electrical Power Supply and Energy Recovery

Area Cost
No. Area Description (US$)
1.7.01 Energy Recovery 24,215,000
1.7.02 Permanent Electrical Power 134,646,000
Permanent Electrical Power Supply and Energy Recovery Capital Cost Total 158,861,000
Note: Costs have been rounded to the nearest thousands of dollars.

21.1.6 INDIRECT COSTS

Indirect costs for the Project are estimated at US$862.2 million, as shown in Table
21.18.

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 Table 21.18 Indirect Capital Costs
Area Cost
No. Area Description (US$)
2.91 Construction Indirect Costs 449,092,000
2.92 Spares 34,314,000
2.93 Initial Fills 19,664,000
2.94 Freight and Logistics 99,015,000
2.95 Commissioning and Start-up 6,120,000
2.96 EPCM 230,957,000
2.97 Vendor’s Assistance 23,075,000
Indirect Capital Costs Total 862,237,000

CONSTRUCTION INDIRECT COSTS

The construction indirect allowances cover the following items:

 temporary works
 temporary lighting
 temporary water supply
 temporary sewage such as portable toilets and sewage collection (not
treatment)
 temporary facilities and structures including offices and storage
 temporary support systems and utilities
 temporary communication (main communication infrastructure included in
direct costs)
 major construction equipment (standard construction equipment is included in
direct costs)
 heavy duty craneage (PTMA site only)
 miscellaneous equipment rentals
 scaffoldings
 garbage collection
 contractors mobilization and demobilization, and mark-ups
 project final clean up.

The construction indirect costs for each area have been reviewed and classified as
contractor or non-contractor based. Generally, a 5 to 10% construction percentage is
used for a non-contractor based areas and 0% for contractor based areas.

Tetra Tech incorporated first principles calculations for indirect costs, apart from
allowance based costs above, for the following items:

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  winter and summer road maintenance
 bussing of workforce to site
 helicopter support
 construction camps included in the direct costs
 catering and housekeeping
 temporary power required during construction
 all personnel turn-around costs
 all personnel travel time to site for each shift

The main construction indirect exclusions are:

 temporary road costs are included in direct costs for open pit mining, WSD, TMF,
and PTMA
 contractor fuel consumption costs during construction are included as direct
costs
 avalanche control labour is included in direct costs
 small tools and PPE are included in the labour rate.

SPARES
Spares for construction are calculated as 3% of direct capital costs, and commissioning
and start-up spares are calculated as 2% of the installed equipment and bulk material
costs, with the exception of the following:

 open pit mining mobile equipment – capital spares only at 4.2% of equipment
costs calculated by MMTS (no commissioning spares)
 plant mobile equipment – capital spares at 3% of equipment costs (no
commissioning spares)
 permanent power supply and Energy Recovery Plant estimated amount of
US$2.3 million.
INITIAL FILLS
Initial fills were estimated by Tetra Tech based on equipment sizing, process design
criteria, and in-house experience. The initial operation required volumes were estimated
based on unit reagent consumptions and quoted prices from suppliers and account for
approximately the first 10 days of plant operation. Costs were also estimated for long-
lead consumables (e.g., mill liners, crusher liners) based on the cost of the first
replacement.

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 FREIGHT AND LOGISTICS
Freight and logistics for bulk material and equipment was based on a study completed in
2012, with averages calculated from quotes received from shipping and transport
vendors for a project in northern BC. Percentages used are as follows:

 generally – 8%
 mobile equipment – 5%
 cement and aggregates – 0%; included in the rates.

The use of 5% for mobile equipment freight correlates with 2016 vendor quotes, where
freight costs range from as low to 1% to as high as 7%. This is due to less stringent
packaging requirements (palletized and shrink wrapped, but not enclosed, nor
significantly padded) when compared to more complex machinery.

A nominal allowance is allowed for air freight.

COMMISSIONING AND START-UP

Commissioning and start-up costs are calculated based on the number of engineers
required on site, depending on the systems required to be commissioned, the estimated
commissioning duration, and generally a rate of US$152/man-hour (Cdn$190/man-
hour) reflecting current approximate market rates.

ENGINEERING, PROCUREMENT, AND CONSTRUCTION MANAGEMENT

Estimated percentages for EPCM costs for projects in BC, as stated in recent feasibility-
level studies, range between 6 to 13.2%. These percentages were benchmarked from
selected projects published on SEDAR (seven recent studies for mining projects in BC).
Tetra Tech elected to apply the higher end of the range generally at 12%, combined for
EPCM, to account for the scale and complexity of the Project. The estimated cost for
EPCM is US$230.9 million.

Engineering and Procurement

Engineering and procurement costs are calculated on a percentage basis based on the
relative effort anticipated to be necessary for completely designing and procuring all the
necessary equipment, tools, and services to provide for effective field construction.
Generally, a factor of 7% is anticipated to cover the engineering and procurement cost,
although select areas received a lower percentage so as not to disproportionally distort
the man-hour effort required if a uniform percentage across all areas were to be applied.

Construction Management
The conceptual contracting strategy for the Project is to have a construction management
team overseeing several main contractors. It has been assumed in the estimate that no
additional contractors mark-ups are needed except for labour. The labour rate is
inclusive of contractors’ overhead and profit.

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 The construction management allowance is generally assigned at 5% for this 2016 PFS,
due to the size and magnitude of the Project, except for earthworks on tunnels, WSF,
SWM, TWTP, HDS, TMF and access roads, all of which were calculated at 3%. Train and
rail were calculated at 2% of direct cost as these costs were obtained from the estimating
contractor who estimated construction management as part of their quotation.

VENDOR’S ASSISTANCE
Vendor assistance has been included for in the process, on-site infrastructure, and
permanent electrical power supply areas where it is anticipated specialists may be
required during commissioning and start-up. The cost estimated for vendor assistance is
US$23.1 million.

21.1.7 OWNER’S COSTS

An estimate of US$160.2 million is included in the capital cost estimate for Owner’s
costs. This cost has been calculated by Seabridge from first principals based on
personnel requirements and onboarding of Owner's staff for supporting both the latter
part of the commissioning effort for the Project and onboarding to fill all operations and
G&A departments. In addition to labour costs, Owner's costs include off-site office
staffing, off-site office facilities, travel, off-site office general expenses, recruiting and
training expenses, consulting, insurance, general field expenses, and mineral
lease/claims costs. Environmental department Owner’s costs include environmental
monitoring programs, community relations costs, communication and public relations
costs, wetland compensation, and permitting costs. Limited duty costs are also included
for certain large capital equipment imported from outside North America.

21.1.8 CONTINGENCY
A contingency allowance is included to cover additional costs that could occur as a result
of more detailed design, unexpected site conditions, or unusual cost escalation. This
estimate adequately covers minor changes to the current scope expected during the next
phase of the Project. The estimated contingency cost is US$671.0 million and the
detailed build-up for contingency is presented in Table 21.19. The contingency estimate
was developed on a line-item basis to account for the specific design detail and
information available for each area, rather than a single value applied to the sum of all
direct, indirect, and Owner’s costs. The values applied range from 5 to 25%.

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 Table 21.19 Contingency
Area Cost
No. Area Description (US$)
4.99.01 Mine Site 184,289,000
4.99.02 Process 210,611,000
4.99.03 TMF 85,226,000
4.99.05 On-site Infrastructure 4,031,000
4.99.06 Off-site Infrastructure 18,117,000
4.99.07 Permanent Electrical Power Supply and Energy Recovery 21,397,000
4.99.91 Construction Indirects 67,354,000
4.99.92 Spares 3,080,000
4.99.94 Freight and Logistics 14,411,000
4.99.95 Commissioning and Start-up 913,000
4.99.96 EPCM 34,483,000
4.99.97 Vendor’s Assistance 3,368,000
4.99.98 Owner’s Costs 23,714,000
Contingency Total 670,994,000
Note: Costs have been rounded to the nearest thousands of dollars.

Several elements of the estimate that represent significant costs are known to be more
refined than others due to greater engineering detail, or due to recently received quotes
(2016); therefore, a lower contingency was applied. Contingency was analyzed for all
disciplines and the resultant contingency for this Project is 15.5%, measured as a
percentage of the sum of direct, indirect, and Owner's costs.

21.2 SUSTAINING CAPITAL COSTS

The sustaining capital costs are all capital costs required from Year 1 of operations to
sustain the mining operation for the LOM. The total sustaining costs of US$5.503 billion
required for the LOM are presented in Table 21.20.

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 Table 21.20 Sustaining Capital Costs
Major Area Cost
No. Major Area Description (US$)
1.1 Mine Site 3,932,699,000
1.2 Process 355,410,000
1.3 TMF 501,482,000
1.5 On-site Infrastructure 139,000
1.6 Off-site Infrastructure 10,739,000
1.7 Permanent Electrical Power Supply and Energy Recovery 195,722,000
2.91 Construction Indirects 57,424,000
2.92 Spares 33,545,000
2.94 Freight and Logistics 65,727,000
2.96 EPCM 22,349,000
2.97 Vendor's Assistance 34,757,000
4.99 Contingency 293,253,000
Sustaining Capital Cost Total 5,503,246,000
Note: Costs have been rounded to the nearest thousands of dollars.

21.2.1 MINE SITE

The sustaining capital for the Mine Site is US$3.9 billion presented in Table 21.21. This
number covers the direct capital costs for the LOM and includes all open pit and
underground mining operations, as well as the Selenium WTP and the geohazards direct
capital cost.

Table 21.21 Mine Site Sustaining Capital Costs

Area Cost
No. Area Description (US$)
1.1.01 Open Pit 820,579,000
1.1.03 SWM 261,760,000
1.1.04 Water Treatment 113,149,000
1.1.05 Ancillary Buildings 44,508,000
1.1.09 Mitchell Block Caving 1,848,211,000
1.1.10 Iron Cap Block Caving 779,461,000
1.1.11 Kerr Pit Power Supply 4,873,000
1.1.12 Sulphuret Pit Power Supply 1,999,000
1.1.13 Geohazards 58,159,000
Mine Site Sustaining Capital Cost Total 3,932,699,000
Note: Costs have been rounded to the nearest thousands of dollars.

21.2.2 OPEN PIT MINING

Sustaining capital is based on both fleet expansions and unit replacements over the
LOM. Major fleet expansions are planned for Years 1, 6, and 10 as the mining rate and
haul distances increase. Capital replacement costs for mobile equipment are calculated

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 based on the expected life of the equipment, the cost of the unit, and the utilization for
that equipment. Sustaining capital costs for the open pit are shown in Table 21.22.

Table 21.22 Open Pit Pit Sustaining Capital Costs

Years 1 to 5 Years 6 to 9 Years 10 to 15 Years 16 to 53 Total Cost
Fleet Capital Cost Item (US$ million) (US$ million) (US$ million (US$ million) (US$ million)
Drills/Shovels/Haulers 226,040,000 136,816,000 122,923,000 26,783,000 512,562,000
Contractor Equipment 4,272,000 - - - 4,272,000
Support Equipment 25,868,000 16,957,000 34,602,000 35,382,000 112,810,000
Pit Area Dewatering 30,729,000 38,521,000 57,034,000 64,650,000 190,934,000
Total 286,910,000 192,295,000 214,559,000 126,815,000 820,579,000
Note: Costs have been rounded to the nearest thousands of dollars.
Totals may not add up exactly due to rounding.

21.2.3 UNDERGROUND MINING (BLOCK CAVES)

The capital costs presented in this section are for both Iron Cap and Mitchell block cave
mines, and are a combination of direct and indirect costs, and applied contingencies.
The direct cost estimates have been obtained from supplier quotes for the major mobile
equipment and capital infrastructure, such as conveyors, crushers, and ventilation
infrastructure. Mine development, mobile equipment costs, and certain fixed and
ventilation costs are the responsibility of Golder. The costs for the conveyors, secondary
rock breakers (if applicable), crushers, related ancillary underground installations, and
indirect costs on infrastructure are the responsibility of Tetra Tech. The underground
electrical system cost estimate is the responsibility of Brazier.

For mine equipment, the quantity of spares was calculated based on the estimated life of
the equipment and the life of the operation (typically a five-year replacement schedule,
but this varies depending on the duty of the equipment). The unit cost of the mobile
equipment was increased by 8% to account for freight. The indirect capital costs on mine
infrastructure include freight, EPCM, vendor assistance, and spares. It is assumed that
the KSM site procurement department will handle the procurement of the day-to-day
supplies of the underground mines.

Contingency was applied to certain items and values range from zero (on most mine
infrastructure), 15% on mobile equipment purchases, parts, and the electrical system, to
a high of 30% for certain ground support items such as shotcrete and steel sets. Initial
mine development contingency is 20%, but is not applied to post-production footprint
development. The overall weighted average contingency on the capital cost of the
underground mines is about 8% and is summarized in a separate line in the summary
tables and WBS.

MITCHELL BLOCK CAVING

The Mitchell block cave mine capital cost estimate includes the purchase and installation
of all equipment and the excavation of all the underground excavations. The total capital
costs are US$2.0 billion as summarized in Table 21.23, which also includes a unit capital
cost of US$4.50/t.

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 Table 21.23 Mitchell Block Caving Sustaining Capital Costs
Sub-area Cost
No. Sub-area Description (US$)
1.1.09.01 Development and Preproduction 1,113,661,000
1.1.09.02 Infrastructure 404,571,000
1.1.09.03 Mobile Fleet 251,474,000
1.1.09.04 Ventilation and Services 39,985,000
1.1.09.07/10 Electrical 38,520,000
2.92.01.05; 2.94.01.03 Indirect Costs (Spares, Freight, 46,220,000
2.96.01.03; 2.97.01.04 EPCM, Vendor Assistance)
4.99.01.02; 4.00.01.03 Contingency 150,000,000
Mitchell Block Cave Sustaining Capital Cost Total 2,044,431,000
Unit Capital Cost (US$/t) 4.50
Years 37
Note: Costs have been rounded to the nearest thousands of dollars.

IRON CAP BLOCK CAVING

The Iron Cap block cave mine capital cost estimate includes the purchase and
installation of all equipment and the excavation of all the associated underground
workings. The total capital costs are estimated to be US$872 million as summarized in
Table 21.24, which also includes a unit capital cost of US$3.87/t.

Table 21.24 Iron Cap Block Caving Sustaining Capital Costs

Sub-area Cost
No. Item (US$)
1.1.10.01 Development and Preproduction 417,379,000
1.1.10.02 Infrastructure 152,297,000
1.1.10.03 Mobile Fleet 143,796,000
1.1.10.04 Ventilation and Services 33,397,000
1.1.10.07; 1.1.10.08 Electrical 32,593,000
2.92.01.06; 2.94.01.04 Indirect Costs (Spares, Freight, 19,185,000
2.96.01.04; 2.97.01.05 EPCM, Vendor Assistance)
4.99.01.04; 4.99.01.05 Contingency 73,375,000
Total Capital Cost 872,022,000
Unit Capital Cost (US$/t) 3.87
Years 28
Note: Costs have been rounded to the nearest thousands of dollars.

21.2.4 MINE SITE WATER TREATMENT

The sustaining water treatment cost for the Mine Site is US$113.1 million as shown in
Table 21.25.

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 Table 21.25 Mitchell Mine Site Water Treatment Sustaining Capital
Sub-area Cost
No. Sub-area Description (US$)
1.1.04.05 HDS – Permanent WTP 27,483,000
1.1.04.07 Selenium – Permanent WTP 78,385,000
1.1.04.08 Kerr Water to WTP 7,280,000
Mine Site Water Treatment Sustaining Capital Cost Total 113,148,000
Note: Costs have been rounded to the nearest thousands of dollars.

The water treatment capacity at the HDS WTP will increase with the addition of two more
clarifiers to cater for the increased water flow that is expected. It is important to note
that all earthworks for this expansion are already accounted for in the initial capital for
the HDS WTP.

When the HDS WTP is commissioned in Year -1, the initial maximum throughput capacity
will be 5.35 m3/s.

The required maximum throughput will increase as the mine operation continues. Water
will be collected in the WSF. Drainage from the Mitchell pit and Mitchell/McTagg RSFs
will be directed by gravity to the WSF and contact water from the Sulphurets and Kerr pit
areas will be pumped to the WSF. The water from the WSF will be pumped to the HDS
WTP in order to maintain safe water-level requirements in the WSF. The HDS WTP is
designed with variable discharge rates in order to stage discharge to match the natural
hydrograph, to ensure sufficient dilution capacity to minimize any effects on the receiving
environment.

In Year 5, the plant capacity will increase from the 5.35 m3/s initial capacity to the
7.5 m3/s final capacity. Two additional circuits will be constructed and operated in
parallel to the existing five circuits.

The HDS WTP installed generation capacity will be 9 MW and the two installed turbines
will be capable of passing a flow of up to 7.5 m3/s.

SELENIUM WTP
In Year 5, a 500 L/s Selenium WTP, located adjacent to the WSF near the toe of the
Mitchell/McTagg RSFs, will be constructed and become operational to treat seepage
from the Sulphurets pit backfill (Kerr waste rock), seepage from the RSFs, and water
pumped from the WSF.

Due to expected high iron and TSS concentrations in seepage water, a ferric circuit has
been designed as a standalone module serving as a pre-treatment step upstream of
selenium removal.

21.2.5 PROCESS
Process sustaining capital includes the Sulphurets pit primary crusher and ore delivery
tunnel installed in Year 1, and the Kerr pit primary crusher and Kerr rope conveyor

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 installed in Year 23. New primary crushers will be installed for the Mitchell underground
mine in Year 22 and at the Iron Cap underground mine in Year 31.

During operation some process related facilities will be constructed after the mill is in
operation. The crushing and related transport facilities at Sulphurets includes a 60 inch
by 89 inch gyratory crusher station and a 3.0 km SMCT connecting the Mitchell and
Sulphurets sites, to be constructed in Year 1. An overland conveyor will be installed
inside of the tunnel for ore transportation.

The ore from the Kerr deposit, together with the ore from the other deposits, will be
introduced to the Process Plant starting from Year 24. The ore and related waste rocks
from the deposit will be crushed at the Kerr site by two, 60 inch by 89 inch gyratory
crushers and conveyed to the Mitchell OPC through a 2,480 m cross-valley rope conveyor
to the Sulphurets site. The ore will be further conveyed through the SMCT to the
Sulphurets/Kerr coarse ore stockpile at the Mine Site. The waste rock from the rope
conveyor will be backfilled into the Sulphurets pit.

The Iron Cap ore and the lower Mitchell ore will be mined by block caving and crushed on
their own sites to 80% passing 150 mm or finer. The crushed ores will be conveyed to
the train transport system for delivery to the coarse ore stockpile at the Treaty OPC.

The estimate also includes a replacement allowance for major process equipment.

The sustaining capital cost for process is US$355.4 million as presented in Table 21.26.

Table 21.26 Process Sustaining Capital

Area Cost
No. Area Description (US$)
1.2.01 Primary Crushing 185,840,000
1.2.02 Ore Delivery Tunnel (SMCT) 40,969,000
1.2.04 Rope Conveyance 89,436,000
1.2.07 TWTP No. 8 Water Treatment – Treaty 40,000
1.2.11 Crushing – Replacement Allowance 10,400,000
1.2.13 Grinding – Replacement allowance 13,600,000
1.2.14 Flotation/Cynadation – Replacement Allowance 8,000,000
1.2.25 Site Services and Utilities – Replacement Allowance 85,000
1.2.32 Site Service - Mobile Equipment – Replacement Allowance 7,040,000
Processing Sustaining Capital Cost Total 355,410,000
Note: Costs have been rounded to the nearest thousands of dollars.

21.2.6 NORTHWEST TRANSMISSION LINE CONTRIBUTION

The 344 km long, 287 kV NTL runs from the Skeena substation near Terrace, BC, to a
new substation near Bob Quinn Lake. This new transmission line was commissioned in
the summer of 2014 and currently serves the AltaGas Forrest Kerr Hydroelectric Facility
and the Red Chris Mine. A tap from this transmission line will service the Project.

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 Due to an overrun in the construction cost of the NTL, BC Hydro Tariff Supplement TS37,
as approved by the BCUC, was put in place requiring NTL customers to share in the
overrun cost. In accordance with TS37, based on a Project contract (peak) demand of
200 MVA, the required contribution will be just over US$167.7million
(Cdn$209.6 million). This amount is separate from system reinforcement and is a
required cash contribution. The tariff is not due until the start of commercial production,
and BC Hydro offers the option of spreading the payments out over five years, with an
applicable finance charge, that is applied in the 2016 PFS.

21.2.7 MCTAGG DIVERSION TUNNEL MINI HYDRO GENERATION STATION

The MTDT mini hydro generation station installation is included in sustaining capital.
The current tunnel designs show the initial available hydraulic head to be too low to allow
the station to be effective if installed during initial construction. No power will be
generated from the Phase 1 MTDT. A penstock tunnel and penstock will be constructed
in Phase 2. To enhance hydro power generation during low-flow periods, weirs will be
established in Gingras Creek just upstream of the Phase 2 and Phase 3 portals to
capture base flow from Gingras Creek. The base flow will be routed to the penstock
where it will be combined with the McTagg base flows to increase hydro power
generation. Flows in excess of the capacity of the McTagg Power Plant will bypass the de-
sanding works and exit into Gingras Creek via the portals. The base flow from the Phase
2 and Phase 3 diversions will pass through a 1 m steel penstock pipe set in a plug at the
junction of the penstock tunnel with the diversion tunnel. This pipe will run out to the
surface in the penstock tunnel, exiting at a portal on the slope above the McTagg Power
Plant. A buried steel penstock will then run down the slope to the McTagg Power Plant.
The MTDT mini hydo generation cost is estimated at US$28.0 million.

21.2.8 TAILING MANAGEMENT FACILITY

The sustaining capital for the TMF is US$501.4 million and is presented in Table 21.27.

Table 21.27 TMF Sustaining Capital

Area Cost
No. Area Description (US$)
1.3.01 General Costs and Consumables 94,969,000
1.3.02 Water Management 47,002,000
1.3.03 Tailing Starter Dams 300,421,000
1.3.04 Seepage Dams 3,042,000
1.3.05 Discharge Pipeline and Diffuser 18,588,000
1.3.07 Tailing Disposal and Reclaim 37,460,000
TMF Sustaining Capital Cost Total 501,482,000
Note: Costs have been rounded to the nearest thousands of dollars.

Initial capital comprises initial TMF perimeter diversions; the North Dam, Splitter Dam,
and Saddle Dam; and associated seepage collection dams that form the North and
Centre cells. This includes basin preparation for the starter basins for the North Cell and
Centre Cell, preparing and lining the starter basins, and provision of liner drainage.

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 Dam raising for the North and Centre cells is accounted for in both sustaining and
operating expenses. Borrow, haul, and placement of till core and expansion of basin
preparation, drains and liner are considered sustaining expenses that begin in Year 1.
The processing and placement of cyclone sand is considered an annual operating
expense for all stages through the LOM.

The South Cell includes additional sustaining capital items occurring between Year 23
and the LOM. These include development of additional perimeter diversions for the
South Cell and the Southeast Starter Dam and associated seepage dam. The expansion
of the Centre Cell continues as sustaining capital until the end of mine life and the
cyclone sand raising continues as an operating expense.

Ancillary expenses such as seepage pumping and monitoring are included as operating
expenses throughout the LOM.

21.2.9 OTHER SUSTAINING CAPITAL COSTS

Other sustaining capital costs of US$713.7 million are presented in Table 21.28. This
total includes US$195.7 million for permanent power supply and for the energy recovery
plants that will be constructed. An amount of US$293.3 million is included for
contingency on sustaining capital for the LOM. Contingency has been calculated on a
line-item basis against all new footprint development. Details for contingency
development can be found in the Basis of Estimate Report located in Appendix L1.

Table 21.28 Other Sustaining Capital

Major Area Cost
No. Major Area (US$)
1.5 On-site Infrastructure 139,000
1.6 Off-site Infrastructure 10,739,000
1.7 Permanent Electrical Power 195,722,000
Supply and Energy Recovery
2.91 Construction Indirect Costs 57,424,000
2.92 Spares 33,545,000
2.94 Freight and Logistics 65,727,000
2.96 EPCM 22,349,000
2.97 Vendor's Assistance 34,757,000
4.99 Contingency 293,253,000
Other Sustaining Capital Cost Total 713.655,000
Note: Costs have been rounded to the nearest thousands of dollars.

21.3 OPERATING COSTS

The average operating cost for the Project is estimated at US$12.03/t milled at the
nominal process rate of 130,000 t/d, or US$12.33/t for the LOM average (Table 21.29).
The operating cost estimate does not include the energy recovery credit (approximately
US$0.12/t milled LOM) from mini hydropower stations and the cost relegated to PST
(approximately US$0.15/t milled LOM).

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 The mining operating costs are LOM average unit costs calculated by total LOM operating
costs divided by LOM milled tonnages. The costs exclude mine pre-production costs.

The cost distribution for each area is shown in Figure 21.1.

All costs are expressed in US dollars, unless otherwise specified. The operating cost
estimates in this section are based on budget prices obtained in Q1/Q2 2016 and/or
from databases of the consulting firms involved in preparing the operating cost
estimates.

When required, certain costs in this report have been converted using a fixed currency
exchange rate of Cdn$1.00 to US$0.80. The expected accuracy range of the operating
cost estimate is +25/-10%.

Table 21.29 Operating Cost Summary

At the Nominal Feed
Rate of 130,000 t/d* LOM
Average
(US$/t (US$/t
(US$/a) milled) milled)
Mine
Mining Costs – Mill Feed 190,223,000 4.59 4.59
Open Pit – Mill Feed - 4.40 4.40
Block Caving – Mill Feed - 4.99 4.99
Mill
Process 251,066,000 5.29 5.34
G&A and Site Service
G&A 43,272,000 0.91 1.03
Site Service 18,914,000 0.40 0.44
Tailing and SWM
Tailing Dam Management 6,065,000 0.13 0.13
Selenium Water Treatment 9,469,000 0.20 0.21
HDS Water Treatment 22,033,000 0.46 0.53
Mine Site Water Pumping 2,453,000 0.05 0.06
Total Operating Cost 543,495,000 12.03 12.33
Notes: *The nominal feed rate estimate excludes mine operating costs and is based on a mill feed rate of
130,000 t/d; the costs do not reflect higher unit costs late in the mine life when the mill feed rates
are lower.
Costs have been rounded to the nearest thousands of dollars.

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 Figure 21.1 Operating Cost Distribution

HDS Water Treatment 4%

Mine Site Water Pumping <1%
Selenium Water Treatment 2%

Mining 37%

Process 43%
Site Service 4%

Tailing Dam Management 1%

G&A 8%

Power will be supplied by BC Hydro at an average cost of US$0.050/kWh at the plant

25 kV bus bars, based on the BC Hydro credits for energy conservation by using HPGR
and similar, and the cost of “peaking” power to avoid a BC Hydro contract demand of
over 150 MVA. Process power consumption estimates are based on the Bond work index
equation for specific grinding energy consumption and estimated equipment load power
draws for the rest of the process equipment. The power cost for the mining section is
included in the mining operating costs. Power costs for site services, water treatment
plants, TMF seepage water pumping, and Mine Site water pumping are included in their
area costs separately.

The estimated electrical power costs are based on the 2016 BC Hydro Tariff 1823 –
Transmission Service Stepped Rate and Schedule 1901 – Deferred Account Rate Rider.
The electrical power costs also account for local system losses and include 7% PST,
which is not treated as an input tax credit. The rates take advantage of the
implementation of BC Hydro-approved energy conservation measures in the plant design
phase, including the HPGR circuit, which will greatly reduce the costlier Tier 2 power in
the BC Hydro stepped-rate Schedule 1823. The 5% GST is not included in the power
rates as it is an input tax credit.

The operating costs are defined as the direct operating costs including mining,
processing, tailing storage, water treatment, and G&A. The hydropower credit from the
recovered hydro-energy during mining operations is not accounted for in the operating
cost estimate, but is included in the financial analysis. Sustaining capital costs including
all capital expenditures after process plant first production are excluded from the
operating cost estimate.

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21.3.1 OPEN PIT MINE OPERATING COSTS
Open pit mine operating costs, including operating and maintenance salaried staff and
hourly labour, equipment major component and running repairs, fuel, power, and all
other consumable goods, are derived from a combination of supplier quotes and
historical data collected by MMTS. The quantities of consumables required are
determined for each specific open pit mining activity from vendor input and in-house
experience. Labour factors for operations and maintenance of the open pit mining
equipment is also estimated based on vendor input and MMTS experience. These inputs
are used to build up open pit mine operating costs from first principles.

Freight costs for all consumable goods and fuel are included in the estimate as part of
the budgetary quotations.

Based on the open pit mine scheduled tonnes, the following primary open pit mine
activity requirements are calculated from first principles:

 Production drill operating hours are based on hole size, pattern layout, bench
height, material density, and penetration rate of the drill. High wall and pre-
shear drilling is included. Geotechnical costs for high wall control blasting,
horizontal drains, etc. are based on recommendations from BGC and from other
study data collected by MMTS.
 The quantity of explosives is based on estimated rates for explosives provided
by a previous vendor study on the Project, and an estimated pattern layout and
an explosive density. An estimate for initiation systems and blasting accessories
are provided on a per hole basis, and the labour costs for the blasting
operations are included. The model assumes a 70/30 split between emulsion
and ANFO. Input explosives costs are based on quotations by local vendors for
site mixed product.
 Shovel and truck operating hours are based on the operating capacities of the
equipment. The travel speed characteristics of the trucks and the haul road
profiles are used to simulate representative truck cycle times including typical
loading, dumping, and delay times.
 To support the open pit mine operations, a fleet of dozers, front-end loaders,
graders, service and welding trucks, etc., is added. Operating hours for this
support equipment is allocated based on estimated utilization of each unit.

Major component replacement for larger pieces of mobile equipment are calculated
based on the expected life of the major component, the cost of the component, and the
fleet size for that equipment. This puts large component repair costs into future years,
giving a more representative LOM cash flow.

The cost of minor parts and running repairs are estimated as an hourly operating cost for
the mining equipment.

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 Salaries for the supervisory and administrative job categories, and all hourly employee
labour rates, are based on a project-specific labour survey conducted by Seabridge.
Burdens are included in the salaries and labour rates.

Labour factors in man-hours/equipment operating hours are estimated for operations

and maintenance labour for each of the equipment types. Labour costs are calculated by
multiplying the labour factor by the equipment operating hours, and labour costs are
allocated to the equipment where labour has been assigned. The total hours required for
each job type on all the equipment are added, and any additional labour required to
complete a crew is assigned to an unallocated labour category.

The open pit mine hourly and salaried labour rates are summarized in Table 21.30 and
listed in detail with manning levels in Appendix E.

Table 21.30 Open Pit Mine Hourly Labour Rates

Rate with
Burdens
Hourly Labour (US$/h)
Operations and Maintenance 41.73
General Labourers 29.95
Annual Salary
with Burdens
Salaried Labour (US$)
General Manager 154,080
Level 3S Staff (Superintendents/Senior Technical) 121,040
Level 4S Staff (Foremen, Engineers, Geologists) 103,620
Level 6S Staff (Technicians, Clerks, Administration) 61,544

GME is a category for open pit mine operations, mine maintenance, and technical
services departmental overhead costs. It consists of costs for all salaried supervisory
and technical staff, a consumable and rental allowance, crane rentals, and software and
fleet management systems’ licensing and maintenance. This category is a fixed cost, and
does not vary by production or fleet size, with the exception of ramp-ups to full staffing.

LOM unit open pit mining operating costs are listed in Table 21.31 and Table 21.32.
Complete open pit mine cost tables, including open pit mine capital and operating cost
schedules, are available in Appendix E.

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 Table 21.31 Open Pit Mining Costs per Tonne Mill Feed
LOM Open Pit Mining Cost
Area (US$/t mill feed)*
Drilling 0.20
Blasting 0.58
Loading 0.53
Hauling 2.57
Pit Maintenance 0.32
Geotechnical 0.08
Unallocated Labour 0.01
General Mine Expense 0.12
Total Mining Cost 4.40
Note: *LOM open pit mining costs exclude capitalized pre-production operating costs.

Table 21.32 Open Pit Mining Costs per Tonne of Material Mined
LOM Open Pit
Mining Cost
(US$/t material
Area mined)*
Drilling 0.07
Blasting 0.20
Loading 0.18
Hauling 0.88
Pit Maintenance 0.11
Geotechnical 0.03
Unallocated Labour 0.00
General Mining Expense 0.04
Total Mining Cost 1.51
Note: *Material mined includes re-handled waste and borrow sources for construction material. LOM open
pit mining costs exclude capitalized pre-production operating costs.

A graph of open pit mine unit operating cost is shown as dollar per tonne of material
mined (waste and mineralized material) in Figure 21.2. The distribution of unit cost by
mining area is shown in Figure 21.3.

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 Figure 21.2 Unit Operating Cost for Open Pit Mining (US$/t Material Mined)

Figure 21.3 LOM Average Unit Operating Cost for Open Pit Mining (US$/t Material
Mined)

Pit Maintenance
Geotechnical $0.03
$0.11
Loading $0.18
Unallocated Labour
Blasting $0.20 $0.00

Drilling $0.07

GME $0.04
Hauling $0.88

21.3.2 UNDERGROUND MINING OPERATING COSTS

The underground mining operating cost estimates are based on first principles
calculations and productivity modelling. The average daily production for each mine was
used in the productivity model. The operating cost estimates include direct and indirect
costs, which are estimated in a similar manner to direct and indirect capital costs. The

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 indirect labour estimate was a combination of a factor based on the amount of mobile
equipment operating for supervisor and maintenance staff, and experience at large,
complex mines for technical staff. There are no contingencies added to the operating
costs. Golder is responsible for the block cave operating cost estimates.

MITCHELL BLOCK CAVE OPERATING COSTS

The average Mitchell block cave mine operating cost is estimated to be approximately
US$4.88/t, which includes the cost of equipment and labour required to move material
from the drawpoint to the surface conveyor portal, and the fixed costs to operate the
mine (Table 21.33). This includes operating the LHDs, secondary breakers, crushers and
conveyors, and the labour required to plan and execute the mining plan.

Table 21.33 Summary of Mitchell Block Cave Mine Operating Cost by Activity
Percentage
Cost of Total
Activity (US$/t) (%)
Production Mucking 0.87 18
Production Locomotive 0.16 3
Crusher 0.20 4
Conveyors 0.90 18
Secondary Breaking 0.62 13
Drawpoint Rehabilitation 0.19 4
Mine Dewatering 0.10 2
Mine General Expenses 0.52 11
Indirect Labour* 0.66 14
Fixed Cost 0.66 13
Total 4.88 100
Note: *Direct labour is included within each activity cost.

IRON CAP BLOCK CAVE OPERATING COSTS

The average Iron Cap block cave mine operating cost is estimated to be US$5.22/t,
which includes the cost of equipment and labour required to move material from the
drawpoint to the MTT train tunnel and the fixed costs to run the mine (Table 21.34). This
includes operating the LHDs, crushers, conveyors, mine services, and the labour required
to plan and execute the mining plan. The dewatering cost is included in the fixed
operating costs because the majority of the dewatering uses gravity and the cost per
tonne is relatively low compared to Mitchell.

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 Table 21.34 Summary of Iron Cap Block Cave Mine Operating Cost by Activity
Percentage
Cost of Total
Activity (US$/t) (%)
Production LHD 1.12 21
Crusher 0.29 6
Conveyor 0.46 9
Secondary Breaking 0.73 14
Drawpoint Rehabilitation 0.28 5
Mine General Expenses 0.70 13
Indirect Labour* 0.94 18
Fixed Cost 0.70 13
Total 5.22 100
Notes: *Direct labour is included within each activity cost.

21.3.3 PROCESS OPERATING COSTS

SUMMARY
The LOM average annual process operating costs for the different mineralizations are
estimated as:

 Mitchell and Iron Cap mineralization: US$249 million (US$5.25/t milled)

 Kerr mineralization: US$250 million (US$5.27/t milled)
 Sulphurets mineralization: US$273 million (US$5.75/t milled).

The process operating costs for these mineralizations are based on a process rate of
130,000 t/d and 94% plant availability. The estimated average operating cost for the
Sulphurets ore is higher than the ores from the other deposits, due mainly to harder
mineralization for the Sulphurets ore as compared to the other deposits. Due to the
variations in operating costs for the different deposit ores, the average operating costs
are estimated based on the ratio of the different ore tonnages processed and their
individual operating costs.

The estimated process operating costs are summarized in Table 21.35, and include:

 personnel requirements, including supervision, operation and maintenance;

salary/wage levels based on a project specific labour survey conducted by
Seabridge, the payments include base salaries/labour rates and various
burdens
 liner and grinding media consumption estimated from the Bond ball mill work
index and abrasion index equations and quoted budget prices in Q1/Q2 2016
and/or Tetra Tech’s database
 maintenance supplies based on approximately 6% of major equipment capital
costs

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  reagents based on test results and quoted budget prices in Q1/Q2 2016 and/or
Tetra Tech’s database
 other operation consumables including laboratory, filtering cloth, and service
vehicles consumables
 power consumption for the process plant at the power unit cost of
Cdn$0.062/kWh, or US$0.050/kWh (estimated by Brazier)
 no taxes or import duties are included in the estimate, unless specified.

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Table 21.35 Summary of Process Operating Costs by Deposit
Mitchell and Iron Cap Sulphurets Kerr
Unit Cost Unit Cost Unit Cost
Annual Cost (US$/t Annual Cost (US$/t Annual Cost (US$/t
Area Personnel (US$) milled) Personnel (US$) milled) Personnel (US$) milled)
Human Power
Operating Staff 39 3,921,000 0.083 39 3,921,000 0.083 39 3,921,000 0.083
Operating Labour 150 11,544,000 0.243 158 12,139,000 0.256 158 12,139,000 0.256
Maintenance 84 6,870,000 0.145 84 6,870,000 0.145 84 6,870,000 0.145
Subtotal Human Power 273 22,335,000 0.471 281 22,930,000 0.483 281 22,930,000 0.483
Major Consumables and Supplies
Major Consumables
Metal Consumables 55,134,000 1.162 68,233,000 1.438 53,891,000 1.136
Reagent Consumables 91,496,000 1.928 91,496,000 1.928 91,496,000 1.928
Supplies
Maintenance Supplies 24,351,000 0.513 25,325,000 0.534 25,852,000 0.545
Operating Supplies 2,706,000 0.057 2,708,000 0.057 2,706,000 0.057
Subtotal Consumable and Supplies 173,687,000 3.660 187,761,000 3.957 173,945,000 3.666
Power Supply 52,868,000 1.114 62,153,000 1.310 53,165,000 1.120
Subtotal Power 52,868,000 1.114 62,153,000 1.310 53,165,000 1.120
Process Operating Cost Total 273 248,890,000 5.245 281 272,844,000 5.750 281 250,039,000 5.269
Note: Costs have been rounded to the nearest thousands of dollars.

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 PERSONNEL
The projected personnel requirements are between 273 and 281 persons, including:

 39 staff for management and professional services

 between 150 and 158 operators, including personnel at laboratories for quality
control, process optimization, and assaying
 84 personnel for maintenance.

Salary/wage rates for management, technical support and operation are based on a
project-specific labour survey conducted by Seabridge. The payments include base
salaries/labour rates, holiday and vacation pay, government prescriptive benefits (e.g.,
Canadian Pension Plan, workman compensation insurance, etc.), discretionary employer
sponsored benefits, and tool allowance costs.

The average total estimated personnel cost is approximately US$0.48/t milled. The
detailed personnel description and costs are shown in Appendix L2 for each processing
plant area.

OPERATING AND MAINTENANCE SUPPLIES

Major consumables and operating suppliers are estimated at US$3.66/t milled for
Mitchell and Iron Cap mineralization, US$3.67/t milled for Kerr mineralization, and
US$3.96/t milled for Sulphurets mineralization. The major consumables include metal
and reagents consumables. The liner and grinding media consumption are estimated
from the Bond abrasion index equation and the budget prices in Q1/Q2 2016 from the
potential suppliers.

Reagent consumptions are estimated from laboratory test results and comparable
operations. The reagent costs are estimated from Q1/Q2 2016 budget prices provided
by potential suppliers.

Maintenance supplies are estimated at US$0.51/t milled for Mitchell and Iron Cap
mineralization, US$0.55/t milled for Kerr mineralization, and US$0.53/t milled for
Sulphurets mineralization. Maintenance supplies are estimated based on approximately
6% of major equipment capital costs.

OPERATING COSTS PER AREA OF OPERATION

Table 21.36 shows the operating cost of each processing area. Operating cost details for
each processing area are further outlined in the following subsections and in
Appendix L2.

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Table 21.36 Operating Costs per Area of Operation by Deposit
Mitchell and Iron Cap Sulphurets Kerr
Unit Cost Unit Cost Unit Cost
Annual Cost (US$/t Annual Cost (US$/t Annual Cost (US$/t
Area Personnel (US$) milled) Personnel (US$) milled) Personnel (US$) milled)
Crushing, Grinding and Copper 146 161,433,000 3.402 154 184,628,000 3.891 154 162,683,000 3.429
Flotation Plant
Tunnel Transport 44 11,496,000 0.242 44 11,496,000 0.242 44 11,496,000 0.242
Molybdenum Flotation Plant 8 5,881,000 0.124 8 5,884,000 0.124 8 5,880,000 0.124
Leach Plant 43 33,704,000 0.710 43 34,461,000 0.726 43 33,605,000 0.708
Cyanide Solution/Residue 8 29,067,000 0.613 8 29,067,000 0.613 8 29,067,000 0.613
Handling
CIL Water Treatment 4 1,484,000 0.031 4 1,484,000 0.031 4 1,484,000 0.031
Tailing Pumping/Reclaim 20 5,824,000 0.123 20 5,824,000 0.123 20 5,824,000 0.123
Water
Total 273 248,890,000 5.245 281 272,844,000 5.750 281 250,039,000 5.269
Note: Costs have been rounded to the nearest thousands of dollars.

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 Crushing, Grinding, Copper, and Pyrite Flotation
The operating costs for crushing, grinding, copper, and pyrite flotation is estimated to be
approximately:

 US$3.40/t milled for Mitchell and Iron Cap mineralization

 US$3.43/t milled for Kerr mineralization
 US$3.89/t milled for Sulphurets mineralization.

The breakdown costs are shown in Table 21.37. The cost estimate includes personnel to
operate the processing circuits, as well as the metallurgy and assay laboratories.
Metallurgical and assay laboratories will service other areas of the mine, including mining
and geological exploration. The average operating cost for the Sulphurets ore is
estimated be higher than the ores from the other deposits, mainly because of higher
power and grinding media costs due to harder mineralization of the Sulphurets ore.

Major consumables include liners, grinding media, and flotation reagents. The annual
power consumption for crushing, primary grinding, concentrate regrinding, and copper-
gold flotation process is estimated at:

 846 GWh for Mitchell and Iron Cap ores

 1,018 GWh for Sulphurets ore
 854 GWh for Kerr ore.

Details of the estimate are shown Appendix L2.

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Table 21.37 Crushing, Grinding, and Copper/Pyrite Flotation Operating Costs by Deposit
Mitchell and Iron Cap Sulphurets Kerr
Unit Cost Unit Cost Annual Unit Cost
Annual Cost (US$/t Annual Cost (US$/t Cost (US$/t
Area Personnel (US$) milled) Personnel (US$) milled) Personnel (US$) milled)
Personnel
Operating Staff 26 2,535,000 0.053 26 2,535,000 0.053 26 2,535,000 0.053
Operating Labour 60 4,515,000 0.095 68 5,110,000 0.108 68 5,110,000 0.108
Maintenance 60 4,981,600 0.105 60 4,981,600 0.105 60 4,982,000 0.105
Subtotal Personnel 146 12,032,000 0.254 154 12,627,000 0.266 154 12,627,000 0.266
Supplies
Major Consumables
Metal Consumables - 54,617,000 1.151 - 67,713,000 1.427 - 53,373,000 1.125
Reagent Consumables - 34,213,000 0.721 - 34,213,000 0.721 - 34,213,000 0.721
Supplies
Maintenance Supplies - 17,093,000 0.360 - 18,067,000 0.381 - 18,594,000 0.392
Operating Supplies - 1,498,400 0.032 - 1,498,000 0.032 - 1,498,000 0.032
Power Supply - 41,981,000 0.885 - 50,509,000 1.064 - 42,377,000 0.893
Subtotal Supplies - 149,401,000 3.149 - 172,001,000 3.625 - 150,056,000 3.162
Total 146 161,433,000 3.402 154 184,629,000 3.891 154 162,683,000 3.429
Note: Costs have been rounded to the nearest thousands of dollars.

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 Molybdenum Flotation
Table 21.38 shows that the estimated operating cost for molybdenum flotation is
approximately US$0.12/t milled for the mineralization. Eight operators will be required
for this circuit. Major consumables include regrind wear materials and molybdenum
flotation reagents. The annual power consumption for this circuit is estimated to be
approximately 3.2 GWh. Details of the costs are shown in Appendix L2.

Table 21.38 Molybdenum Flotation Operation Costs: Mitchell and Iron Cap*
Annual Cost Unit Cost
Area Personnel (US$) (US$/t milled)
Personnel
Operating Labour 8 698,000 0.015
Subtotal Personnel 8 698,000 0.015
Supplies
Major Consumables
Metal Consumables - 519,000 0.011
Reagent Consumables - 3,310,000 0.070
Supplies
Maintenance Supplies - 296,000 0.006
Operating Supplies - 20,000 0.000
Concentrate Leach - 880,000 0.019
Power Supply - 158,000 0.003
Subtotal Supplies - 5,183,000 0.109
Total 8 5,881,000 0.124
Note: *The estimates are for Mitchell and Iron Cap mineralization; there is minor cost variation for the Kerr
and Sulphurets, but insignificant to warrant reporting separately.Costs have been rounded to the
nearest thousands of dollars.

Gold Leach and Recovery Circuit

The gold leach and recovery circuit will be operated by designated personnel, including
staff, and operation and maintenance labour. The total operating cost, including
regrinding of gold bearing pyrite concentrate, is estimated to be US$0.71/t milled for all
areas of mineralization, excluding the Sulphurets ore which is expected to be slightly
higher at US$0.73/t milled. The personnel cost is estimated to be US$0.07/t milled
(Table 21.39). The cost for major consumables is estimated at US$0.54/t milled. The
power consumption for this circuit is estimated in the range of 58 to 73 GWh/a. A
detailed cost estimate is shown in Appendix L2.

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 Table 21.39 Gold Leach and Recovery Circuit Operating Costs
Annual Cost Unit Cost Unit Cost
Area Personnel (US$) (US$/t CIL) (US$/t milled)
Mitchell/Iron Personnel
Cap Operating Staff 7 728,000 0.132 0.015
Operating Labour 20 1,539,000 0.280 0.033
Maintenance 16 1,190,000 0.216 0.025
Subtotal Personnel 43 3,457,000 0.628 0.073
Supplies
Major Consumables
Major Consumables - 25,500,000 4.630 0.537
Supplies
Maintenance Supplies - 1,074,000 0.195 0.022
Operating Supplies - 80,000 0.015 0.002
Power Supply - 3,593,000 0.652 0.076
Subtotal Supplies - 30,247,000 5.492 0.637
Total 43 33,704,000 6.120 0.710
Sulphurets Personnel
Operating Staff 7 728,000 0.132 0.015
Operating Labour 20 1,539,000 0.280 0.033
Maintenance 16 1,190,000 0.216 0.025
Subtotal Personnel 43 3,457,000 0.628 0.073
Supplies
Major Consumables
Major Consumables - 25,500,000 4.630 0.537
Supplies
Maintenance Supplies - 1,074,000 0.195 0.022
Operating Supplies - 80,000 0.015 0.002
Power Supply - 4,350,000 0.789 0.092
Subtotal Supplies - 31,004,000 5.629 0.653
Total 43 34,461,000 6.257 0.726
Kerr Personnel
Operating Staff 7 728,000 0.132 0.015
Operating Labour 20 1,539,000 0.280 0.033
Maintenance 16 1,190,000 0.216 0.025
Subtotal Personnel 43 3,457,000 0.628 0.073
Supplies
Major Consumables
Major Consumables - 25,500,000 4.630 0.537
Supplies
Maintenance Supplies - 1,074,000 0.195 0.022
Operating Supplies - 80,000 0.015 0.002
Power Supply - 3,494,000 0.634 0.074
Subtotal Supplies - 30,148,000 5.474 0.635
Total 43 33,605,000 6.102 0.708

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 Cyanide Recovery and Destruction Circuit
The cyanide recovery and destruction circuits will require eight operators. The total unit
cost for the circuits is estimated at US$0.61/t milled for all the mineralization. This cost
includes a labour cost of US$0.01/t milled and a total processing reagent supplies cost
of US$0.58/t milled. The annual power consumption will be approximately 10.5 GWh.
The estimates are shown in Table 21.40. A detailed cost estimate is shown in
Appendix L2.

Table 21.40 Cyanide Recovery and Destruction Operating Costs

Annual Cost Unit Cost Unit Cost
Area Personnel (US$) (US$/t CIL) (US$/t milled)
Personnel
Operating Staff 8 595,000 0.108 0.0130
Subtotal Personnel 8 595,000 0.108 0.0130
Consumables and Supplies
Reagent Consumables 27,535,000 4.999 0.5800
Maintenance Supplies 398,000 0.072 0.0090
Operating Supplies 16,000 0.003 0.0003
Power Supply 523,000 0.095 0.0110
Subtotal Supplies 28,472,000 5.170 0.6000
Total 8 29,067,000 5.278 0.6130
Note: Costs have been rounded to the nearest thousands of dollars.

Tunnel Transport
The MTT tunnel is the main connection between the Mitchell Mine Site and the Treaty
OPC. The tunnel will be equipped with electrically powered autonomous trains to
transport the crushed ores from the Mitchell Mine Site to Treaty OPC. The tunnel will be
used to transport the workers and operation required materials, such as various
consumables, spare parts and equipment between the two sites. At both sides of the
tunnel portals, there will be a material handling facility to ensure that the ores, materials
and personnel will be transported in a safe and efficient way. The estimated cost for the
tunnel transports is shown in Table 21.41. The total unit cost is estimated to be
US$0.24/t milled, including power supply, which is estimated at 66.9 GWh/a.

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 Table 21.41 Tunnel Transport Operating Costs

Annual Cost Unit Cost

Area Personnel (US$) (US$/t milled)
Personnel
Operating Labour 44 3,664,000 0.077
Subtotal Personnel 44 3,664,000 0.077
Supplies
Maintenance/Operating Supplies - 4,513,000 0.095
Power Supply - 3,319,000 0.070
Subtotal Supplies - 7,832,000 0.165
Total 44 11,496,000 0.242
Note: Costs have been rounded to the nearest thousands of dollars.

Tailing and Reclaimed Water Operation

The cost estimates for tailing delivery to the TMF and water management, including
reclamation and releasing, for all the mineralization are shown in Table 21.42, which
details the unit costs for labour, maintenance supplies, operating suppliers, and power
supply. The total cost is expected to be approximately US$0.12/t milled. The major cost
contribution of tailing and reclaim water operations is power consumption for the
operations at the TMF. The annual power requirement is estimated to be approximately
65.0 GWh, which accounts for US$0.07/t milled. A more detailed breakdown is shown in
Appendix L2.

Table 21.42 Tailing Delivery and Reclaimed Water Operating Costs

Annual Cost Unit Cost
Area Personnel (US$) (US$/t milled)
Personnel
Operating Labour 20 1,539,000 0.032
Subtotal Personnel 20 1,539,000 0.032
Supplies
Maintenance Supplies - 937,000 0.020
Operating Supplies - 123,000 0.003
Power Supply - 3,225,000 0.068
Subtotal Supplies - 4,285,000 0.091
Total 20 5,824,000 0.123
Note: Costs have been rounded to the nearest thousands of dollars.

21.3.4 TMF DAM MANAGEMENT OPERATING COSTS

On average, the operating costs for tailing dam ongoing construction by cyclone sands,
including seepage water pumping costs, are estimated to be approximately
US$6.1 million/a, or US$0.13/t milled.

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21.3.5 MINE SITE WATER MANAGEMENT COSTS
Overall SWM at the Mine Site includes HDS site water treatment, selenium removal
treatment, and site water pumping. The average annual cost for Mine Site SWM is
estimated to be approximately US$34.0 million/a, or US$0.72/t milled, at a mill feed rate
of 130,000 t/d. The costs for the HDS WTP and Selenium WTP are detailed in Table
21.43 and Table 21.44, respectively.

The estimated average operating cost for the HDS WTP is approximately US$0.46/t
milled at a mill feed rate of 130,000 t/d, or US$0.31/m3 water, treated at an average
flow rate of approximately 70 Mm3/a. The maintenance manpower will come from the
overall Mine Site maintenance team. The major cost for HDS water treatment is reagent
consumption at US$0.33/t milled. Power consumption is estimated to be approximately
40.3 GWh/a.

Table 21.43 Water Treatment Plant Operating Costs

Annual Cost Unit Cost

Area Personnel (US$) (US$/t milled)*
Personnel
Operating Labour 17 1,396,000 0.029
Subtotal Personnel 17 1,396,000 0.029
Supplies
Reagent Consumables - 15,577,000 0.328
Maintenance/Operating Supplies - 3,062,000 0.065
Power Supply - 1,998,000 0.042
Subtotal Supplies - 20,637,000 0.435
Total 17 22,033,000 0.464
Note: *ata nominal mill process rate of 130,000 t/d
Costs have been rounded to the nearest thousands of dollars.

The estimated LOM average operating cost for the Selenium WTP is approximately
US$0.20/t milled at a mill feed rate of 130,000 t/d, or US$1.02/m3 water, treated at an
average flowrate of approximately 9.3 Mm3/a. The maintenance manpower will come
from the overall site services maintenance team. The major cost for selenium water
treatment is US$0.15/t milled for reagent consumption and maintenance. Power
consumption is estimated to be approximately 11.8 GWh/a.

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 Table 21.44 Selenium Removal Water Treatment Plant Operating

Annual Cost Unit Cost

Area Personnel (US$) (US$/t milled)*
Personnel
Operating Labour 17 1,550,000 0.033
Subtotal Personnel 17 1,550,000 0.033
Supplies
Reagent Consumables - 3,421,000 0.072
Maintenance/Operating Supplies - 3,911,000 0.083
Power Supply - 587,000 0.012
Subtotal Supplies - 7,919,000 0.167
Total 17 9,469,000 0.200
Note: *at
a nominal mill process rate of 130,000 t/d
Costs have been rounded to the nearest thousands of dollars.

21.3.6 GENERAL AND ADMINISTRATIVE

G&A costs are costs that do not relate directly to mining or processing operating costs.
These costs include:

 Personnel: executive management, staffing in accounting, supply chain and

logistics, human resources, external affairs functions, and other G&A
departments
 expenses : including insurance, off site offices, administrative supplies, medical
services, legal services, human resources related expenses, travelling,
community and environmental programs, accommodation/camp costs, air/bus
crew transportation, regional and property taxes, and external assay/testing.

G&A costs are estimated at approximately US$43.3 million/a, or US$0.91/t milled at a

nominal mill feed rate of 130,000 t/d, including approximately US$0.28/t for personnel
and US$0.63/t for general expenses. The major costs are accommodation and crew air
transportation, estimated at about US$15.6 million/a. A summary of the G&A estimate
for personnel and general expenses are shown in Table 21.45.

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 Table 21.45 G&A Operating Cost Estimate
Total Cost Unit Cost
Area Personnel (US$/a) (US$/t milled)
Personnel
General Management and Service Manpower 143 13,275,000 0.280
Subtotal Personnel 143 13,275,000 0.280
General Expense
Offices Expenses/General Administration - 459,000 0.010
Insurances - 1,368,000 0.029
External Assay/Testing excluding 400,000 0.008
-
Water Sample Assays
Safety and Training - 784,000 0.017
Medical Service/First Aid - 160,000 0.003
Security Supplies - 160,000 0.003
Legal Services - Allowance - 80,000 0.002
Regulatory Compliance/Permits - Allowance - 160,000 0.003
Consulting – Allowance - 400,000 0.008
Small Vehicles/Mobile Equipment - 446,000 0.009
Corporate Support Allocated to KSM - 1,200,000 0.025
Recruitment - 160,000 0.003
Communications - 718,000 0.015
Travel - 453,000 0.010
External and Government Affairs/ 340,000 0.007
-
Community Support
Accounting Services including Auditing - 160,000 0.003
System Management/Computer Services - 734,000 0.015
Professional Associations - 80,000 0.002
Accommodation/Camp Costs - 11,400,000 0.240
Regional Taxes and Licenses Allowance 800,000 0.017
-
including Mineral Leases
Environmental Expenses, including 3,680,000 0.078
-
Water Sample Assays
Crew Air Transportation - 4,210,000 0.089
Bus Transportation - 982,000 0.021
Warehouse - 160,000 0.003
Miscellaneous - 320,000 0.007
Lease and Rental Off-site - 184,000 0.004
Subtotal Expense - 29,998,000 0.631
Total 143 43,273,000 0.911
Note: Costs have been rounded to the nearest thousands of dollars.

21.3.7 SITE SERVICES

Overall site service cost is estimated at US$0.40/t milled or approximately
US$18.9 million/a. The estimate is based on requirements for this remote site in
northern BC and on in-house experience. The estimate, as shown in Table 21.46,
includes:

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  Personnel: general site services human power
 site mobile equipment and light vehicle operations
 portable water and waste management
 general maintenance including yards, roads, fences, and building maintenance
 off-site operation expense
 building heating
 power supply
 avalanche control.

Table 21.46 Overall Site Service Cost Estimate

Total Cost Unit Cost
Expenditure Area Personnel
(US$/a) (US$/t milled)
Personnel
Site Service Manpower 112 8,700,000 0.183
Subtotal Personnel 112 8,700,000 0.183
Expenses
Potable Water/Waste Management
Potable Water - 80,000 0.002
Domestic Waste - 160,000 0.003
Hazardous Waste - 240,000 0.005
Sewage - 160,000 0.003
Building Maintenance
Supplies Operating - 240,000 0.005
Supplies Repairs - 480,000 0.010
Tool Allowance - 320,000 0.007
Services Purchased - 400,000 0.009
Small Vehicles/Equipment - 1,123,000 0.024
Supplies - 320,000 0.007
Building Heating - 1,218,000 0.026
Tunnel Ventilation - 400,000 0.008
Road Maintenance - 2,011,000 0.042
Power Line Maintenance - 400,000 0.009
Power Supply - 1,775,000 0.038
Avalanche Control - 746,000 0.016
Off-site Operation Expenses - 141,000 0.003
Subtotal Expenses - 10,214,000 0.217
Total 112 18,914,000 0.400
Note: Costs have been rounded to the nearest thousands of dollars.

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22.0 ECONOMIC ANALYSIS

22.1 INTRODUCTION
Tetra Tech prepared an economic evaluation of the 2016 PFS based on a pre-tax
financial model. For the 53-year LOM and 2.198 billion tonne Mineral Reserve, the
following pre-tax financial parameters were calculated using the base case metal prices:

 10.4% IRR
 6.0-year payback on US$5.005 billion initial capital
 US$3.263 billion NPV at a 5% discount rate.

Seabridge engaged Lilburn in Denver, Colorado to prepare the tax component of the
model for the post-tax economic evaluation for this 2016 PFS with the inclusion of
applicable income and mining taxes, and they engaged PwC in Toronto, Ontario to review
this work. PwC is an Ontario limited liability partnership, which is a member firm of
PricewaterhouseCoopers International Limited, each member firm of which is a separate
legal entity.

The following post-tax financial results were calculated:

 8.0% IRR
 6.8-year payback on US$5.005 billion initial capital
 US$1.539 billion NPV at a 5% discount rate.

The base case results apply the following key inputs:

 gold – US$1,230/oz
 copper – US$2.75/lb
 silver – US$17.75/oz
 molybdenum – US$8.49/lb
 exchange rate – Cdn$1.00 to US$0.80.

Sensitivity analyses, along with multiple additional metal price scenarios, were developed
to evaluate the Project economics.

The detailed financial model is provided in Appendix M.

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22.2 PRE-TAX MODEL
Metal revenues projected in the Project cash flow models are based on the average
metal values indicated in Table 22.1.

Table 22.1 Metal Production from the KSM Project

Years 1 to 7 LOM
Total Tonnes to Mill ('000) 322,750 2,198,559
Annual Average Tonnes to Mill ('000) 46,107 41,484
Average Grades
Gold (g/t) 0.82 0.55
Copper (%) 0.24 0.21
Silver (g/t) 2.8 2.6
Molybdenum (ppm) 48.3 42.6
Total Production
Gold ('000 oz) 6,529 28,597
Copper ('000 lb) 1,434,560 8,270,423
Silver ('000 oz) 18,224 114,671
Molybdenum ('000 lb) 11,154 62,080
Average Annual Production
Gold ('000 oz) 933 540
Copper ('000 lb) 204,937 156,052
Silver ('000 oz) 2,603 2,164
Molybdenum ('000 lb) 1,593 1,171

22.2.1 FINANCIAL EVALUATIONS: NPV AND IRR

The production schedule has been incorporated into the 100% equity pre-tax financial
model to develop annual recovered metal production from the relationships of tonnage
processed, head grades, and recoveries.

Metal revenues, principally gold and copper, were calculated based on each scenario's
prices. Operating cost for mining, processing, site services, G&A, tailing storage and
handling and water treatment, energy recovery areas as well as off-site charges
(smelting, refining, transportation, and royalties) were deducted from the revenues to
derive annual operating cash flow.

Initial and sustaining capital costs as well as closure and reclamation costs have been
incorporated on an annual basis over the mine life and deducted from the operating cash
flow to determine the net cash flow before taxes. Initial capital expenditures include
costs accumulated prior to first production of concentrate, including all pre-production
mining costs. Sustaining capital includes expenditures for mining and processing
additions, replacement of equipment, and TMF expansions.

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 Initial and sustaining capital costs applied in the economic analysis are US$5.005 billion
and US$5.503 billion, respectively. LOM PST applicable to initial and sustaining capital is
estimated to be US$134 million.

Financial evaluations account for physical reclamation costs at various times in the LOM,
for the development of a fund to address water treatment costs post reclamation and for
special use securities associated with permanent access roads.

Working capital is estimated at two months of receivables and one month of payables
and varies from year to year. The working capital is recovered at the end of the mine life.

Pre-production construction period is estimated to be six years. NPV and IRR reported in
this section are estimated at the start of this six-year period.

The pre-tax undiscounted annual cash flows are illustrated in Figure 22.1.

Figure 22.1 Pre-tax Undiscounted Annual and Cumulative Cash Flow

Closure &
Construction Operation Operation Reclamation

2,500 25,000
2,000 20,000

Cumulative Cash Flow (US$M)

1,500 15,000
Annual Cash Flow (US$M)

1,000 10,000
500 5,000
0 0
(7) (4) (1) 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57
(500) (5,000)
Production year
(1,000) Metal Prices (10,000)
Au US$1,230/oz
(1,500) Cu US$2.75/lb (15,000)
Ag US$17.75/oz
Mo US$8.49/lb
(2,000) (20,000)
Exchange Rate
Annual Cash Flow Cdn$0.80:US$1.00
Cumulative Cash Flow

22.3 METAL PRICE SCENARIOS

The base case uses the three-year average metal prices as of July 2016 and a US$/Cdn$
exchange rate of 0.80. In addition to the base case, three metal price/exchange rate
scenarios were also developed: the first uses the metal prices and exchange rate used in
mine optimization and design (2016 Design Case); the second uses the spot metal prices
and closing exchange rate on July 1, 2016 (Recent Spot Case); and the third uses higher
metal prices to indicate upside potential (Alternate Case). The input parameters and pre-
tax results of all scenarios are shown in Table 22.2.

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 Table 22.2 Summary of the Pre-tax Economic Evaluations
2016 Recent
Base Design Spot Alternate
Unit Case Case Case Case
Gold US$/oz 1,230.00 1,200.00 1,350.00 1,500.00
Copper US$/lb 2.75 2.70 2.20 3.00
Silver US$/oz 17.75 17.50 20.00 25.00
Molybdenum US$/lb 8.49 9.70 7.00 10.00
Exchange Rate US:Cdn 0.80 0.83 0.77 0.80
Undiscounted NCF US$ million 15,933 13,727 16,101 26,319
NPV (at 3%) US$ million 6,217 5,128 6,461 11,138
NPV (at 5%) US$ million 3,263 2,510 3,507 6,541
NPV (at 8%) US$ million 960 475 1,175 2,928
IRR % 10.4 9.2 11.1 14.6
Payback years 6.0 6.5 5.6 4.1
Cash Cost/oz Au US$/oz 277 311 404 183
Total Cost/oz Au US$/oz 673 720 787 580
Note: net cash flow (NCF)

22.4 SENSITIVITY ANALYSIS

Tetra Tech investigated the sensitivity of NPV, IRR and payback period to the key Project
variables. Using the base case as a reference, each of key variables was changed
between -30% and +30% in 10% increments while holding the other variables constant.

Sensitivity analyses were carried out on the following key variables:

 gold, copper, silver, and molybdenum metal prices

 exchange rate
 capital costs
 operating costs.

The analyses are presented graphically as financial outcomes in terms of pre-tax NPV,
IRR, and payback period. The Project NPV is most sensitive to gold price and exchange
rate, followed by operating costs, copper price and capital costs. The IRR is most
sensitive to exchange rate, capital costs and gold price, followed by operating costs and
copper price. The payback period is most sensitive to gold price and exchange rate,
followed by capital costs, copper price and operating costs. Since majority of costs are in
Canadian currency and the economic analysis is developed in American currency, a
significant increase in the exchange rate by 30% will result in a significant increase in the
costs when converted to American currency and this leads to sharp increase in the
payback period. Also, when gold price decreases by 30%, the revenue side decreases
significantly and this results in sharp increase in the payback period. Financial outcomes
are relatively insensitive to silver and molybdenum prices. The NPV, IRR, and payback
sensitivities are shown in Figure 22.2, Figure 22.3, and Figure 22.4.

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 Figure 22.2 Sensitivity Analysis of Pre-tax NPV at a 5% Discount Rate

7,000

NPV@5% Discount Rate (US$M) 6,000

Gold price
5,000
Copper price
4,000
Silver price
3,000 Molybdenum price
2,000 Exchange rate
1,000 Capital costs
0 Operating costs
-1,000
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

Figure 22.3 Sensitivity Analysis of Pre-tax IRR

18%
16%
Internal Rate of Return (%)

Gold price
14%
Copper price
12%
10% Silver price
8% Molybdenum price
6% Exchange rate
4% Capital costs
2% Operating costs
0%
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

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 Figure 22.4 Sensitivity Analysis of Pre-tax Payback Period

16.0
14.0
Payback Period (years) Gold price
12.0
Copper price
10.0
Silver price
8.0
Molybdenum price
6.0
Exchange rate
4.0
Capital costs
2.0
Operating costs
0.0
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

22.5 POST-TAX FINANCIAL EVALUATIONS

Seabridge engaged Lilburn in Denver, Colorado to prepare the tax component of the
model for the post-tax economic evaluation for this 2016 PFS with the inclusion of
applicable income and mining taxes. Seabridge also engaged PwC in Toronto, Ontario to
review the tax component of the model prepared by Lilburn.

The following general tax regime was recognized as applicable at the time of report
writing:

22.5.1 CANADIAN FEDERAL AND BC PROVINCIAL INCOME TAX REGIME

The federal and BC provincial income taxes are calculated using the currently enacted
corporate rates of 15% for federal and 11% for BC.

For both federal and provincial income tax purposes, capital expenditures are
accumulated in tax pools that can be deducted against mine income at different
prescribed rates, depending on the type of capital expenditures.

Historically, pre-production mining expenditures are accumulated in the Canadian

Exploration Expense (CEE) pool. The CEE pool is generally amortized at 100%, to the
extent of taxable income from the mine. A phase-out rule was enacted in 2013 to phase
out the treatment of pre-production mine development expenses as CEE to Canadian
Development Expense (CDE) from 2015 to 2017. Effective 2017, all the pre-production
mine development expenses are treated as CDE.

In addition to pre-production mine development expenses (that are reclassified as CDE

due to the phase-out rule), Canadian resource property acquisition costs and the costs of

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 mine shafts, main haulage ways, and other underground workings are considered CDE
and are accumulated in the CDE pool. The KSM Financial Model treats all such expenses
as CDE.

Fixed assets acquired for the mine are accumulated in an undepreciated capital cost
pool (Class 41) and are generally amortized at 25% on a declining balance basis. Certain
fixed assets (acquired after March 20, 2013 and before 2021) may qualify to be
accumulated in a Class 41.1 pool that can be amortized at an accelerated rate of up to
100%. However, as a substantive portion of the fixed assets are expected to be acquired
post-2020 (after the phase out of the Class 41.1 pool), the KSM Financial Model
assumes that the accelerated depreciation will not be available.

The Project is expected to incur costs related to the NTL as described in Section 21.2.6.
These sustaining capital costs are expected to be incurred on a property that is not
owned by the mine, the costs associated with the NTL should be treated as eligible
capital expenditures for income tax purposes. Effective January 1, 2017, eligible capital
expenditures are treated as a Class 14.1 asset with an amortization rate of 5%. The KSM
Financial Model treats all the costs associated with the NTL overrun as a Class 14.1
asset.

22.5.2 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", which is defined as gross revenue
from the mine less mine operating expenditures. Hedging income and losses, royalties
and financing costs are excluded from operating expenditures. The 2% tax is
accumulated in a Cumulative Tax Credit Account (CTCA) and is fully creditable against the
13% tax.

All capital expenditures, both mine development costs and fixed asset purchases, and
mine operating expenditures are accumulated in the Cumulative Expenditures Account,
which is amortized at 100% against the 13% tax.

The 13% tax is assessed on "net revenue", which is defined as gross revenue from the
mine less any accumulated Cumulative Expenditures Account balance to the extent of
the gross revenue from the mine for the year.

A "new mine allowance" is available in respect of new mine or capital costs incurred in
connection with expansion of an existing mine commencing production with reasonable
commercial quantities. Generally, this allowance provides that 133% of capital
expenditures incurred prior to commencement of production may be used to offset net
revenue for BC mining tax purposes. Under current legislation, the provision for the new
mine allowance is scheduled to expire on January 1, 2020.

A notional interest of 125% of the prevailing federal bank rate is calculated annually on
any unused Cumulative Expenditures Account and CTCA and is added to the respective
balances.

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 BC Mineral Tax is deductible for federal and provincial income tax purposes.

22.5.3 TAXES AND POST-TAX FINANCIAL RESULTS

At the base-case long-term metal prices and exchange rate used for this study, total
estimated taxes payable on KSM profits are $5.951 billion over the 53-year LOM. The
total estimated taxes payable by the Project in all scenarios provided are shown in Table
22.3.

Table 22.3 Component of the Various Taxes for all Scenarios

2016 Recent
Base Design Spot Alternate
Unit Case Case Case Case
Gold US$/oz 1230.00 1200.00 1350.00 1500.00
Copper US$/lb 2.75 2.70 2.20 3.00
Silver US$/oz 17.75 17.50 20.00 25.00
Molybdenum US$/lb 8.49 9.70 7.00 10.00
Exchange Rate US:Cdn 0.80 0.83 0.77 0.80
Corporate Tax (Federal) US$ million 2,229 1,953 2,242 3,562
Corporate Tax (Provincial) US$ million 1,635 1,433 1,644 2,612
BC Mineral Tax US$ million 2,087 1,804 2,106 3,424
Total Taxes US$ million 5,951 5,190 5,993 9,598

Post-tax financial results are summarized in Table 22.4.

Table 22.4 Summary of Post-tax Financial Results

2016 Recent
Base Design Spot Alternate
Unit Case Case Case Case
Gold US$/oz 1230.00 1200.00 1350.00 1500.00
Copper US$/lb 2.75 2.70 2.20 3.00
Silver US$/oz 17.75 17.50 20.00 25.00
Molybdenum US$/lb 8.49 9.70 7.00 10.00
Exchange Rate US$:Cdn$ 0.80 0.83 0.77 0.80
Undiscounted NCF US$ million 9,983 8,537 10,109 16,721
NPV (at 3%) US$ million 3,513 2,789 3,691 6,696
NPV (at 5%) US$ million 1,539 1,028 1,718 3,663
NPV (at 8%) US$ million -2 -343 161 1,282
IRR % 8.0 7.0 8.5 11.4
Payback years 6.8 7.4 6.4 4.9

Table 22.5 summarizes the Project’s annual cash flow for the pre-production period,
Years 1 to 7, and the LOM, providing mine and mill production, revenue projections,

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 operating costs and capital costs, and undiscounted cash flows both before and after
taxes.

Table 22.5 KSM Project Annual Cash Flow for Pre-production Period, Years 1 to 7 and LOM
Pre-prod.
Production Periods
Period
Years -6 Year Year Year Years Years Year Year
Unit to -1 1 2 3 4 5 6 7 LOM
Mine and Mill Production
Waste Mined Mt 90 141 136 40 84 129 130 111 3,003
Mill Feed Processed Mt - 38 47 47 47 47 47 47 2,198
Grade
Gold g/t - 0.72 0.82 0.96 0.98 0.71 0.72 0.82 0.55
Copper % - 0.25 0.28 0.30 0.27 0.18 0.18 0.21 0.21
Silver g/t - 2.5 2.0 2.3 4.5 2.4 2.2 3.4 2.6
Molybdenum ppm - 30 47 61 20 56 65 56 43
Metal Recovered
Gold Moz - 0.7 0.9 1.1 1.2 0.8 0.8 1.0 28.6
Copper Mlb - 175.3 251.6 273.2 243.2 155.0 154.6 181.6 8,270.4
Silver Moz - 1.9 1.9 2.1 4.9 2.0 1.9 3.4 114.7
Molybdenum Mlb - 0.6 1.5 2.6 0.0 2.0 2.4 2.0 62.1
Gross Revenue
Gold Revenues US$ million - 810 1,167 1,385 1,448 1,015 1,019 1,187 35,174
Copper US$ million - 482 692 751 669 426 425 500 22,744
Silver US$ million - 35 34 38 87 36 34 60 2,035
Molybdenum US$ million - 5 13 22 - 17 20 17 527
Gross Revenue US$ million - 1,332 1,906 2,196 2,204 1,495 1,498 1,763 60,480
Total On-site and Off-site Operating - 662 774 739 745 692 753 775 33,216
Costs US$ million
Operating Cash Flow US$ million - 670 1,132 1,457 1,459 804 746 987 27,264
Total Capital Costs US$ million 5,005 623 133 98 127 34 88 75 10,508
PST US$ million 64 6 1 1 2 2 1 0 134
Reclamation- Water Treatment Fund 8 52 - - - - - - 688
and SUP Costs US$ million
Pre-tax Undiscounted NCF US$ million (- 5,077) (- 11) 998 1,358 1,331 767 657 912 15,933
Corporate Tax (Provincial) US$ million - - - - 92 38 51 88 1,635
Corporate Tax (Federal) US$ million - - - - 126 51 69 120 2,229
BC Mineral Tax US$ million - 14 24 31 31 17 17 22 2,087
Total Taxes US$ million - 14 24 31 249 105 137 230 5,951
Post-tax Undiscounted NCF US$ million (- 5,077) (- 25) 974 1,327 1,082 662 521 682 9,983

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22.6 ROYALTIES
No royalties are included in the KSM financial models. KSM is subject to a royalty of 1%
of the NSR payable to Barrick Gold Corp., capped at US$3.6 million, with a
predetermined buyout option. The full amount of the buyout option is paid in Year 1 in
the financial model.

22.7 SMELTER TERMS

Based on Section 19.0, the following smelter terms for copper concentrate have been
applied in the economic analysis:

 Copper: pay 96.5% with a minimum deduction of 1 unit (amount deducted has
to equate to a minimum of 1% of the agreed concentrate copper assay).
Refining charge is US$0.10/lb of payable copper.
 Gold: gold payment varies according to gold content in concentrate; pay 97.75%
on the gold content in excess of 30 g/dmt less a refining charge of
US$7.00/accountable troy oz; lower gold contents are payable on a sliding scale
to 90% payment at 1 g/dmt less a refining charge of US$7.00/accountable troy
oz.
 Silver: pay 90% on the silver content in excess of 30 g/dmt less a refining
charge of US$0.50/accountable troy oz.
 Treatment Charge: US$100.00/dmt of concentrate delivered.
 Penalty Charge: no penalty is applied according to concentrate assay data.
 Price participation: not applicable.

Gold and silver doré will generally include payment terms as follows:

 Gold: pay 99.8% of content less a refining charge of US$1.00/accountable oz.

Doré transportation is assumed to be US$1.00/oz.
 Silver: pay 90.0% of content less a refining charge of US$1.00/accountable oz.
Doré transportation is assumed to be US$ 1.00/oz.

Molybdenum concentrate contracts will generally include payment terms as follows:

 Molybdenum: pay 99% of content less a treatment charge of

US$2.00/accountable lb.

22.8 CONCENTRATE AND DORÉ TRANSPORT LOGISTICS

For this 2016 PFS, an assumption is being made that the copper concentrates will be
shipped in bulk and that the projected volume averages approximately 350,000 t/a
(Years 1 to 10 average). A further assumption is being made that the customer base will
be in Asia and that the concentrates will be delivered to Asian ports in handy size ocean

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 vessels. Copper concentrate from the mine site will be transported by truck to a
commercial port in Stewart B.C. Transportation costs for the copper concentrate are
listed below:

 Trucking: US$38.06/wmt
 port storage and handling: US$14.40/wmt
 ocean transport to Asian port: US$26.00/wmt
 moisture content: 9%.

Gold and silver doré transportation cost is assumed to be US$1.00/oz.

For this 2016 PFS, an assumption is being made that the processed molybdenum will be
loaded in one tonne bags for transport purposes and that the output is approximately
1,800 t/a. A further assumption is being made that the customer base will be in Asia
and that the molybdenum will be delivered in standard ocean containers. Molybdenum
concentrate from the mine site was assumed to be loaded into 2 t bags and then
transported by truck to Prince Rupert. The bags will then be loaded into containers and
transferred to Fairview Terminal. Transportation costs for the molybdenum concentrate
are listed below:

 trucking: US$73.20/wmt
 port storage and handling: US$12.20/wmt
 ocean transport to Asian port: US$88.93/wmt
 moisture content: 5%.

22.8.1 CONCENTRATE TRANSPORT INSURANCE

Based on Section 19.0, an insurance rate of 0.125% was applied to the provisional
invoice value of the concentrates and doré to cover land-based and ocean transport from
the mine site to the smelter.

22.8.2 MARKETING AND OWNERS REPRESENTATION

Based on Section 19.0, a US$8.50/dmt charge was applied for marketing and services
provided by the Owner’s representative. Duties would include attendance during vessel
unloading at the smelter port, supervising the taking of samples for assaying, and
determining moisture content.

22.8.3 CONCENTRATE LOSSES

Based on Section 19.0, for deliveries to Asia, an overall weight loss of 0.1% was applied
in the economic analysis.

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23.0 ADJACENT PROPERTIES

In 2010, Pretium purchased the Snowfield and Brucejack mineral resource properties
from Silver Standard Resources, Inc. In February 2011, Pretium announced an updated
estimate of Mineral Resources for their Snowfield project, which abuts against the east
side of Seabridge's Mitchell deposit. Table 23.1 summarizes the publicly-disclosed
resources of the Snowfield project, which were tabulated using a 0.30 g/t gold equivalent
cut-off grade (Pretium 2011).

The QP responsible for this section of this Technical Report has not verified the Mineral
Resources that were disclosed by Pretium for their Snowfield deposit. While there
appear to be similarities between the Mitchell and Snowfield deposits, the Brucejack
mineralization reported by Pretium is not necessarily indicative of mineralization found at
the nearby Kerr, Sulphurets, Mitchell, or Iron Cap zones.

Pretium disclosed Mineral Resources for their Brucejack project in an updated NI 43-101
Technical Report dated December 19, 2013. The Brucejack deposit is located
approximately 6 km east of Seabridge's Kerr deposit. Pretium disclosed Proven and
Probable Mineral Reserves for the Brucejack project in a Feasibility Study and Technical
Report that was dated June 19, 2014 (Tetra Tech 2014).

The QP responsible for this section of this Technical Report has not verified the publicly
disclosed Mineral Resources and Mineral Reserves associated with the Brucejack
project. Furthermore, the QP does not believe that the Brucejack mineralization is
necessarily indicative of the mineralization associated with the various mineralized zones
at the Property.

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Table 23.1 Pretium Snowfield Mineral Resources Using a 0.30 g/t Cut-off

Tonnes Au Ag Cu Mo Re Au Ag Cu Mo Re
Resource Category (Mt) (g/t) (g/t) (%) (ppm) (ppm) (000 oz) (000 oz) (Blb) (Mlb) (Moz)
Measured 189.8 0.82 1.69 0.09 97.4 0.57 4,983 10,332 0.38 40.8 3.5
Indicated 1,180.3 0.55 1.73 0.10 83.6 0.50 20,934 65,444 2.60 217.5 19.0
Measured + Indicated 1,370.1 0.59 1.72 0.10 85.5 0.51 25,917 75,776 2.98 258.3 22.5
Inferred 833.2 0.34 1.90 0.06 69.5 0.43 9,029 50,964 1.10 127.7 11.5
Source: Pretium website (http://www.pretivm.com)

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24.0 OTHER RELEVANT DATA AND 
INFORMATION 

The PEA was undertaken to evaluate a different approach to developing the Project by
emphasizing low-cost block cave mining and reducing the number and size of the open
pits, which significantly reduces the surface disturbances in the re-designed Project. The
PEA is a conceptual level of study based on the same Mineral Resource estimates used
in the 2016 PFS, except the Inferred Mineral Resources are included in the PEA project
design, and projected economics.

The PEA envisages a combined open pit/underground block cave mining operation that is
planned to operate for 51 years. The proposed Process Plant for the PEA mine design
will have an average process rate of 170,000 t/d. The Mitchell open pit and Deep Kerr
underground mines will be the main source of mill feed, contributing approximately 83%
of the total plant feed over the LOM, supplemented by the Sulphurets open pit along with
the Mitchell and Iron Cap underground mine production.

The flotation plant would produce a gold/copper/silver concentrate for transport by truck
to a nearby sea port at Stewart, BC for shipment to Pacific Rim smelters. Metallurgical
testing indicates that KSM can produce a clean concentrate with an average copper
grade of 25% with a high gold and silver content, making it readily saleable. Separate
gold-silver doré would be produced at the KSM processing facility.

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, and there is no
certainty that the results of the PEA will be realized. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability.

24.16 MINING METHODS 
24.16.1 OPEN PIT MINING METHOD 
The PEA mining study was carried out with the aim of reducing the amount of waste rock
produced in the open pits and the mill feed to draw more on the underground resources.
In order to accomplish this goal, smaller pits were designed for the Mitchell and
Sulphurets deposits as well as mining the Kerr deposit solely by underground mining
methods. This approach substantially shrinks the Project’s footprint. The PEA study
provides conceptual open pit designs that are consistent with the inputs used in the
2016 PFS open pit mine designs.

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 SUMMARY
Amec Foster Wheeler based the PEA mine plan on the Measured, Indicated, and Inferred
Mineral Resources contained in a pit created with the LG algorithm. An elevated cut-off
strategy was used to define the Mineral Resources suitable for processing using a
minimum NSR cut-off of Cdn$16/t (see 24.16 for NSR calculation details). These
Mineral Resources are shown in Table 24.1.

Table 24.1  Mineral Resources Included in the PEA Open Pit Mine Plan 
Tonnage Au Cu Ag
Class/Pit (kt) (g/t) (%) (g/t)
Measured
Mitchell Pit 223,712 0.79 0.20 3.0
Sulphurets Pit - - - -
Total Measured 223,712 0.79 0.20 3.0
Indicated
Mitchell Pit 194,575 0.75 0.19 2.8
Sulphurets Pit 91,771 0.70 0.29 0.6
Total Indicated 286,346 0.73 0.22 2.1
Measured + Indicated
Mitchell Pit 418,287 0.77 0.19 2.9
Sulphurets Pit 91,771 0.70 0.29 0.6
Total Measured + Indicated 510,058 0.76 0.21 2.5
Inferred
Mitchell Pit 11,618 0.47 0.20 5.2
Sulphurets Pit 11,052 0.59 0.25 0.8
Total Inferred 22,670 0.53 0.22 3.1

For the Mitchell pit, the Mineral Resource model was subjected to an optimization
analysis using GEOVIA Whittle™ software to define the mining limits, involving a base case
and 45 additional pit shells. The contribution of each incremental shell to NPV was
calculated based on a base processing capacity of 47.5 Mt/a and a discount rate of 5%.
In the case of the Sulphurets pit, a much smaller pit than the optimal pit limit was chosen
in order to constrain the amount of waste rock produced during the LOM.

The Project is designed as a conventional truck-shovel operation. The pit design for the
Mitchell area includes three nested phases to balance stripping requirements while
satisfying the Process Plant requirements. In the case of the Sulphurets area the
material is mined in one phase.

Amec Foster Wheeler designed a RSF with a total storage capacity of approximately
265 Mm3, and a mill-feed stockpile with a capacity of 58 Mm3, enough to satisfy the
production schedule’s maximum stockpiling capacity.

The production schedule results in a LOM of 8 years with stockpile reclaim extending into
Year 14. The mine will require three years of pre-production before the start of the

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 Process Plant operations. Five, 363 t haul trucks will be required during Year -3 of pre-
production, increasing to 19 by Year -1 of pre-production, and peaking at 39 in
production Years 1 to 3.

PIT OPTIMIZATION
The pit shells that define the ultimate Mitchell pit limit, as well as the internal phases,
were derived using the LG pit optimization algorithm. In the case of the Sulphurets pit, a
much smaller pit than the optimal pit limit was chosen in order to constrain the amount
of waste produced during the LOM. The optimization process takes into account the
information stored in the geological block model, pit slope angles by geotechnical sector,
commodity prices, mining and processing costs, process recoveries, and the sales cost
for the metal produced. Table 24.2 summarizes the primary optimization inputs.

Table 24.2  Optimization Inputs 
Parameter Unit Value
Metal Prices
Gold US$/oz 1200
Copper US$/lb 2.70
Silver US$/oz 17.50
Discount Rate % 5
Slope Angles Mitchell Pit
Variable by Domain degrees 34-54
Slope Angles Sulphurets Pit
Variable by Domain degrees 34-50
Dilution % Accounted for in NSR Calculations
Operating Cost
Mining US$/t 1.90
Process US$/t milled 9.00
Processing Rate kt/d 130
Process Recovery
Variable by Deposit/Commodity % 57.9-89.7

Amec Foster Wheeler imported the Mineral Resource model, containing grades, block
percentages, material density, slope sectors, and rock types, into the optimization
software. The optimization run was carried out using Measured, Indicated, and Inferred
Mineral Resources to define the optimal mining limits.

The optimization run included 46 pit shells defined according to different revenue
factors, where a revenue factor of 1 is the GEOVIA Whittle™ base case. To select the
optimal pit shell that defines the ultimate pit limit, Amec Foster Wheeler conducted a pit-
by-pit analysis to evaluate the contribution of each incremental shell to NPV, assuming a
Process Plant capacity of 47.5 Mt/a and a discount rate of 5% (Figure 24.1). The pit-by-
pit analysis includes three cases named best, specified and worst. The best and worst
cases are used to provide a bound for the analysis and they do not obey practical mining
constraints. In contrast, the specified case is based in a series of pushbacks selected by

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 the planner and reflects the expected cash flow produced by the mining sequence.
Following this analysis, the best pit shell is usually smaller than the Whittle base case pit
shell. It can be observed from Figure 24.1 that, for the specified case, the highest cash
flow is produced by pit shell 15 which is US$4.4 billion higher than the Whittle base case.
The selected pit shell for the Mitchell pit is shown in Figure 24.2.

Figure 24.1  Pit‐by‐pit Analysis Mitchell 

Figure 24.2  Selected Pit Shell Mitchell 

MINE DESIGN
The Project is designed as a conventional truck-shovel operation with 363 t trucks and
56 m3 and 40 m3 shovels. For the Mitchell pit, the mine design includes three nested

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 phases to balance stripping requirements while satisfying the Process Plant
requirements, while Sulphurets is mined in one phase.

The design parameters include:

 ramp width of 38.20 m

 road grades of 8%
 bench heights of 15 m
 targeted mining width of 120 m
 berm interval of 30 m
 variable slope angles by sector
 minimum mining width of 50 m.

The Mitchell smoothed final pit design contains approximately 418.3 Mt of 0.77 g/t gold,
0.19% copper, and 2.9 g/t silver of Measured and Indicated Resources, as well as
11.6 Mt of 0.47 g/t gold, 0.20% copper, and 5.2 g/t silver of Inferred Mineral Resource
and 414.8 Mt of waste, for a stripping ratio of 0.96:1.

The Sulphurets pit contains approximately 91.8 Mt of 0.70 g/t gold, 0.29% copper, and
0.6 g/t silver of Indicated Resources, plus 11.0 Mt of 0.59 g/t gold, 0.25% copper, and
0.8 g/t silver of Inferred Mineral Resource. These tonnages and grades were derived by
following an elevated cut-off strategy in the production schedule. Figure 24.3 and Figure
24.4 show the ultimate pit designs for the Mitchell and Sulphurets pits, respectively.

Figure 24.3  Mitchell Pit Design 

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 Figure 24.4  Sulphurets Pit Design 

WASTE ROCK FACILITIES AND STOCKPILE DESIGNS

Mitchell and Sulphurets will use the same RSF and stockpiles facilities. Their design and
construction should ensure physical and chemical stability during and after mining
activities. To achieve this, the RFSs and stockpiles are designed to account for benching
and geotechnical stability.

The RFS design criteria include:

 30 m berms
 2.5:1 overall slopes
 15 m lifts
 20% swell factor after compaction for estimating volumes.

The design was carried out to provide enough storage capacity for waste and low-grade
stockpile. Figure 24.5 shows the RSF.

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 Figure 24.5  Waste Rock Facility and Stockpile Area Design 

PRODUCTION SCHEDULE OPEN PIT

The production schedule for the Project includes the Process Plant ramp-up schedule to
take into account the inefficiencies related to the start of operations. Full plant capacity
is reached after two years of operation. In order to ensure a continuous feed to the mill,
as well as to provide construction material for the associated facilities, the mine will
require three years of pre-production.

The scheduling constraints set the maximum mining capacity at 200 Mt/a and the
maximum number of benches mined per year at 12 per phase. To guide the schedule
and to obtain the desired results, additional constraints included maximum stockpile
capacity, and a reduction of mining capacity in later years during the LOM to balance the
number of truck hours per period.

The schedule uses an elevated cut-off strategy feeding the resource with the highest
grade first and sending lower grades to stockpiles for later processing. A minimum NSR
cut-off of Cdn$15/t was used. This minimum cut-off was determined taking into account
the stockpiling capacity and the availability of higher grade material from the Kerr
underground mine. The schedule shows a LOM of eight years with stockpile reclaim
extending into Year 14. The amount of re-handled mill feed is 157 Mt.

The average grades are 0.75 g/t gold, 0.21% copper, and 2.5 g/t silver. The LOM
schedule is shown in Figure 24.6. The mill feed peaks in Year 3 and then starts steadily
decreasing as higher-grade material from the Kerr underground operation becomes
available.

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 Figure 24.6  Open Pit Production Schedule 

WASTE MATERIAL HANDLING

Waste will be hauled to the RSF using 363 t trucks. The construction sequence starts at
the bottom of the RSF by dumping the material in groups of three, 15 m lifts, leaving a
30 m berm every 45 m. The resulting overall slope angle of the dump face will be
2.5H:1V.

MINING EQUIPMENT
The KSM open pits are mined using a conventional owner-operated truck and shovel fleet
with owner performed blasting. The supply and on-site manufacturing of blasting
materials is contracted out. All infrastructure required for the blasting supply contractor
is provided by KSM. The mine fleet is comprised of a combination of diesel powered
equipment and electric drills and shovels. The fleet has a peak capacity to mine
approximately 200 Mt/a operating on 15 m benches.

Equipment requirements are estimated annually. Equipment sizing and numbers are
based on the mine plan, measured annual truck cycle times, benchmarking, and a
24 h/d, 7 d/wk work schedule. Peak major equipment numbers are shown in Table
24.3.

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 Table 24.3  Peak Equipment Fleet 
Area/Type Description Number
Drilling
Drill – Electric – 311 mm Primary Drill 4
Drill – Diesel Hydraulic – 311 mm Secondary Drill 3
Drill – Diesel Hydraulic – 175 mm High Wall Drill 4
Blasting
FEL Blast Hole Stemmer – 111 kW Blast Hole Stemmer 2
Loading
Hydraulic Shovel – 40 m3 Loading Ore & Waste 3
Large Loader – 40 m3 Loading Ore & Waste 2
Electric Shovel – 56 m3 Loading Ore & Waste 2
Hydraulic Shovel – 12 m3 Construction 1
Support:
Dozer – 433 kW – Support Shovel Support 6
Wheel Dozer – 372 kW – Support Pit Clean Up 3
Fuel / Lube Truck – 4,000 gal – Support Shovel Fueling & Lube 3
FEL – 373 kW – Support Pit Clean Up 3
Haul Truck – 363 t Hauling Ore/Waste 39
Haul Truck – 91 t Construction 5
Water Truck – 20,000 gal – Support Haul Roads Water Truck 2
Dozer – 634 kW – Support Dump Maintenance 3
Grader – 397 kW – Support Road Grading 4

Blasting
Amec Foster Wheeler relied on benchmarking to arrive at a 0.35 kg/t powder factor for
both mill-feed and waste. That is, similar large open pit projects in the KSM area use a
0.32 kg/t powder factor for competent rock.

Mining activities are expected to encounter groundwater during production.

Groundwater, coupled with precipitation, will require the use of a water resistant
emulsion. For estimation purposes, it is assumed that a high-energy emulsion is used for
all blasting.

Blasting activities will be performed by KSM utilizing explosives provided by an on-site

manufacturer.

Drilling
Electric rotary drills with a 311 mm hole size are the primary production drills. The
electric drills are supported by three diesel drills also drilling a 311 mm hole size.
Although more costly to operate, the diesel drills are selected because of their mobility,
which provides additional flexibility to the mine operation. Penetration rates for both the
electric and the diesel drills is assumed at 40 m/h instantaneous. Average tonnes drilled
for sizing the production drilling fleet was estimated at 30 Mt/a per drill.

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 The drill fleet also includes four diesel powered percussion drills, drilling 150 mm holes,
for buffer and trim drilling, for pioneer road drilling, and for initial bench drilling.

Loading
The primary production loading fleet is comprised of a combination of electric and
hydraulic shovels and large loaders. At peak, the loading fleet includes two, 56 m3
electric shovels; three, 40 m3 hydraulic shovels; and two, 40 m3 front-end loaders (FELs).
Figure 24.7 shows the primary loading fleet requirements by year to Year 12.

Figure 24.7  Primary Loading Fleet Requirements 

 250,000  8

 7
 200,000

Number of Loading Units
Total Tonnes Moved (kt)

 6

 150,000  5

 4
 100,000  3

 2
 50,000
 1

 ‐  ‐
‐3 ‐2 ‐1 1 2 3 4 5 6 7 8 9 10 11 12

Electric Hydraulic Loader Tonnes

Shovel Shovel Moved

For estimating numbers of loading units, the electric shovel, the hydraulic shovel, and the
larger loader productivity rates were estimated at 40 Mt/a, 25 Mt/a, and 22 Mt/a,
respectively.

Hauling
The haulage fleet is comprised of 363 t trucks. The number of 363 t trucks required are
based on measured annual haul profiles. The haul profiles were measured from the pit
centroids at each bench to a designated dumping point for each time period. Truck
speed by segment was applied to the haul profiles to estimate cycle times, which were
then adjusted to estimate total numbers of trucks required according to the operational
factors.

Initial truck requirements are five during pre-production, Year -3. Truck requirements
increase to 14, and then 19 during pre-production Period -2 and -1, respectively, before
jumping to 39, the peak, in Periods 1 to 3. Following Period 3, truck requirements ramp
down steadily over the remainder of the mine life. During the pre-production period, the
primary production fleet is supplemented with a construction fleet of five, 91 t haul
trucks for pioneering and construction work. Figure 24.8 and Figure 24.9 compare the

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 total tonnes hauled to the average cycle times, inclusive of fixed times (load and dump),
and the truck requirements, respectively.

Figure 24.8  Annual Total Tonnes Hauled and Average Cycle Time 

 250,000  70.0

 60.0

Average Cycle Time (minutes)
 200,000
 50.0
Total Tonnes 000's

 150,000
 40.0

 30.0
 100,000

 20.0
 50,000
 10.0

 ‐  ‐
‐3 ‐2 ‐1 1 2 3 4 5 6 7 8 9 10 11 12
Tonnes Cycle Time1
Moved

Figure 24.9  Annual Total Tonnes Hauled and Truck Numbers 

 250,000  45.0

 40.0
 200,000  35.0
Total Tonnes 000's

 30.0

Truck Numbers
 150,000
 25.0

 20.0
 100,000
 15.0

 50,000  10.0

 5.0

 ‐  ‐
‐3 ‐2 ‐1 1 2 3 4 5 6 7 8 9 10 11 12
Tonnes Trucks
Moved

Support
The peak support equipment numbers are listed in Table 24.4.

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 Table 24.4  Support Equipment 
Support Equipment Description Peak Number
Dozer – 433 kW – Support Shovel Support 6
Wheel Dozer – 372 kW – Support Pit Clean Up 3
Fuel/Lube Truck – 4,000 gal – Support Shovel Fueling & Lube 3
FEL – 373 kW – Support Pit Clean Up 3
Water Truck – 20,000 gal – Support Haul Roads Water Truck 2
Dozer – 634 kW – Support Dump Maintenance 3
Grader – 397 kW – Support Road Grading 4

Auxiliary
To support mine maintenance and mine operation activities, a fleet of auxiliary
equipment is required. Based on a standard list of auxiliary equipment (Table 24.5), at
peak the auxiliary fleet will include approximately 100 pieces of equipment.

Table 24.5  Auxiliary Equipment 
Auxiliary Equipment List
Mine Maintenance
Forklifts
Cranes
Tire Handlers
Jacks
Light Vehicles
Service Trucks
Mine Operations
Lowboy and Trailer
Small Water Truck
Crew Bus
Light Vehicles
Light Plants
Crushing & Screening Plant
Snow Removal Equipment
Small dozer and loader
Mine Engineering
Light Vehicles
Survey Equipment
Mine Dewatering
Light Vehicles
Pumps
Excavators
Backhoe

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 Mine Dewatering
The open pit will require dewatering and depressurization. Infrastructure to support
dewatering and depressurization will include horizontal drains, vertical wells, in-pit
sumps, and a collection system. The mine department is directly responsible for
operating the in-pit sumps. All other dewatering and depressurization activities are
carried out and managed by others. To accomplish dewatering via in-pit sumps, the mine
will utilize up to six, 1,400 gpm trailer mounted sump pumps.

Manpower
KSM mine operations will work 7 d/wk, 24 h/d with three crews rotating to fill the mine
roster. Salaried staff will work multiple schedules depending on the job. Schedules will
include day time only shifts and shifts that rotate with the mine crews.

Manpower requirements peak at approximately 490 employees in Year 4, the peak

material movement year.

Primary Consumables
Primary consumables for mine operations include diesel fuel and explosives. The mine
fleet’s diesel requirements peak at 94.6 million liters in Year 3. Explosive consumption
also peaks in Period 3 at 69.2 kt.

COMMENTS ON OPEN PIT MINING METHOD

The PEA mine plan is based on a subset of the Mineral Resource estimates and assumes
open pit mining of the Mitchell and Sulphurets deposits will be followed by block caving
operations at the Kerr, Mitchell, and Iron Cap deposits.

The open pit production schedule requires a three-year pre-production period for
construction and pre-stripping, followed by a LOM of 8 years with stockpile reclaim
extending into Year 14.

24.16.2 DEEP KERR MINING METHODS 
GEOTECHNICAL CONSIDERATIONS
At the time of the PEA, dedicated geotechnical drilling or studies had not yet been
conducted for the Deep Kerr resource area. Current geological exploration drilling
indicates similar rock conditions to the Mitchell underground mine, and for the purposes
of the PEA it is assumed the rock characteristics would be similar. Thus, the PEA
geotechnical assumptions for Deep Kerr were kept in line with those established for
Mitchell underground.

For Lift 3, pre-conditioning is assumed in order to manage the higher stresses anticipated
at greater depths.

The empirical methods applied to Mitchell underground show that caving of the rock
mass can be achieved with a minimum hydraulic radius of 28 m, which is an area of
approximately 12,100 m2 or around 50 drawpoints (this assumes a Mining Rock Mass
Rating (MRMR) rating of 51). The ultimate hydraulic radius for each footprint in Deep

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 Kerr ranges from 66 to 142 m, is significantly greater than the minimum required
hydraulic radius of 28 m, and supports both initial and sustained cave mining at Deep
Kerr.

GEOVIA’s PCBC™ Footprint Finder software was used to identify the elevation and shape
of the highest value footprints. A maximum column height of 500 m was used to identify
and locate these footprints, which is a common column height in modern caving mines.
Freeport McMoran, Rio Tinto, Newcrest, and Codelco have experience in operating or
planning for similar maximum column height. An exception was made for Lift 1, in which
the footprint elevation and shape was fixed using a 500 m column with the height of
draw extended to 750 m. The risks with this extension of column heights for Lift 1 to
750 m is considered acceptable since the materials in between 500 m and 750 m of
column only account for less than 16% and 8% of the total tonnes for Lift 1 and overall
Deep Kerr, respectively. In modern caving mines it is common to see this additional
percentage as an overdraw in drawpoints. The risk of a production gap between Lift 1
and 2 is insignificant. In the event Lift 1 is unable to deliver the planned overdraw, Lift 2
will already be in production and can typically adjust its plan to compensate for shortfalls
in Lift 1. Furthermore, mines such as the Cadia East Mine in Australia, which is currently
in production based on columns up to 1,000 m, have developed technical and
operational methods for accommodating these higher column heights.

A cave subsidence angle of 60° is assumed for Deep Kerr and is considered
conservative based on comparison data from benchmarking studies from similar block
cave mines in porphyry copper systems. No surface infrastructure has been planned
within or directly below the caved zone or subsidence zones. LOM underground
infrastructure (i.e., common conveyors, common vent drifts, common ramps, common
vent shafts, etc.) are also not planned within or near the caved zone or subsidence
zones.

CAVE MODELLING AND PRODUCTION SCENARIOS

Seabridge provided the Mineral Resource block model, which contains tonnages, grades
and NSR values. NSR is defined in Section 16.1.4. Amec Foster Wheeler used this
model to define the mineable shape for the block cave mining method using GEOVIA’s
PCBC™ software. This modelling software was used to identify the elevation and shape of
the highest value footprints utilizing inputs based on the characteristics of the deposit,
current industry standards, and also collaboration with other consultants responsible for
the PEA-level engineering of two other block cave mines within the KSM Property. These
inputs included maximum column heights, drawpoint spacing, draw rates, etc. Selection
of the optimum footprint elevations for the various lifts was based on total discounted
value of the materials. Selection of the optimum footprint elevations for the various lifts
was based on total discounted value of the materials. Starting with the in situ block
model, a diluted block model is calculated using a 50% Laubscher’s dilution entry point.
All calculations to determine the height of draw of block caving are undertaken using the
diluted model.

The ideal placement of Lifts 1 and 2 was determined to be at 625 m and 130 m,
respectively, based on a column height of 500 m, thus requiring the levels remain 500 m

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 apart. Shifting the 130 m level one step lower in elevation decreases mineralized
material value by almost Cdn$1 billion, while the 625 m level progressively decreases in
value as it is raised. Therefore, the placement of Lifts 1 and 2 is the optimum location
that best balances the overall value of the material mined, and earlier timing of the
higher-value material. Lift 3 has relatively less impact on the economics of the Project as
this lift occurs much later in production. Therefore, the lift elevation selection was
initially focused more on Lifts 1 and 2.

Instead of cut-off-grade, various production column shut-off values based on NSR were
used to create various production scenarios that were compared to determine and
optimize footprint shape. A series of GEOVIA PCBC™ runs were performed at varying NSR
values from Cdn$20/t to Cdn$24/t, for various production rates from 60 to 80 kt/d.
Higher shut-offs were tested but it was observed that at Cdn$26/t, total resources
quickly diminished and footprint shapes became highly irregular. The results from these
runs were used to generate hill-of-value tables which emphasized NPV and IRR. The
shape of the deposit narrows with depth. With scenarios at an 80 kt/d rate and NSR
shut-off greater than Cdn$20/tonne, it was observed that the lower elevation footprints
could not sustain this rate either for a meaningful amount of time, or at all.

After Lifts 1 and 2 elevations were determined, the location of Lift 3 was evaluated in
more detail. Ultimately, the optimum scenario that best balanced both NPV and IRR is
identified to have three lifts at 625 m, 130 m, and -290 m elevation, with a drawpoint
shut-off NSR value of Cdn$22/t, and a peak production rate of 70 kt/d.

Furthermore, this scenario is deemed to integrate well with the production from the
adjacent KSM mines (i.e., Mitchell open pit, Mitchell underground, Iron Cap, Sulphurets,
etc.) to support the various production scenarios considered for the PEA.

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 Figure 24.10    GEOVIA PCBC™ Footprint for Lift 1 at 625 m Elevation 

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 Figure 24.11  GEOVIA PCBC™ Footprint for Lift 2 at 130 m Elevation 

Figure 24.12  GEOVIA PCBC™ Footprint for Lift 3 at ‐290 m Elevation 

DESIGN CRITERIA AND LAYOUT

The block cave mine design is based on a series of three lifts totalling 817,000 m2. All
lifts are accessed through a series of shared portals and vent adits along the
northwestern base of Kerr Mountain, facing Sulphurets Creek. All lifts connect to a 7 km
common underground incline conveyor system, which passes under the Sulphurets Creek
and connects directly up to the MTT material handling system that supports all mines at
the Project site. Mining on each lift assumes block caving with a post undercutting

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 method, with LHD equipment for extraction, and a material handling system of mill feed
passes, chutes, truck haulage, dual crushers, and conveyors.

Lift 1 is the largest in tonnage and footprint and has an area of 422,000 m2. The
footprint shape is an irregular oval shape spanning 1,200 m in length, with varying widths
up to 500 m, tapering at both ends. The extraction level elevation is 625 m, which is
slightly higher than the portal elevation of 600 m and thus does not require major ramps
or shafts for access or ventilation. Mine access is primarily through two of the intake
portals, one of which directly connects to the footprint area as a main ventilation intake
drive, and the second which eventually parallels the underground conveyor as a service
drive towards the crusher area.

Lift 2 is the second largest in tonnage and footprint and has an area of 250,000 m2. The
footprint shape is an irregular shape spanning 780 m in length, with varying widths of
200 m up to 700 m, tapering at both ends. The extraction level elevation is 130 m,
requires three decline ramps for access and mill feed conveyance, and seven bored
ventilation shafts. The ramps and vent shafts are tied into the upper system constructed
for Lift 1 in order to minimize cost and effort.

Lift 3 is the smallest in tonnage and footprint and consists of two separate slightly oval
footprints with a total area of 145,000 m2. The southwestern footprint has an area of
75,000 m2 and the northeastern footprint has an area of 70,000 m2. Both footprints
span a length of 350 m, with varying widths up to 350 m. The extraction level elevation
is -290 m, and similar to Lift 2, requires two decline ramps for access and mill feed
conveyance, and eight bored ventilation shafts. The ramps and vent shafts are tied into
the upper system constructed for Lift 2 in order to minimize cost and effort. Pre-
conditioning is assumed for Lift 3 to manage the higher stresses anticipated at greater
depths, and will be performed from the undercut (UC) level before UC longhole drilling
commences on that level.

All preparation work at Deep Kerr will occur below the rock mass to be extracted for each
respective lift.

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 Figure 24.13  Deep Kerr Mine General Layout with Topo 

Note: Spacing between Lifts 1 and 2 is approximately 495 m. Spacing between Lifts 2 and 3 is
approximately 420 m. The distance from the portals to the footprint of Lift 1 is approximately 2 km.

Figure 24.14  Typical Level Arrangement for Deep Kerr 

Note: Light blue parallel undercut drifts and red parallel extraction panel drifts are spaced 30 m apart. Dark
blue drawpoints are spaced 18 m apart.

VENTILATION
The magnitude of the required airflow is determined using available benchmark data.
These data show that a modern, mechanized block cave mine requires approximately
0.024 m3/s per tonne of mill feed per day of designed production. For the Deep Kerr
concept, a rate of 0.024 m3/s per tonne of mill feed per day is selected as being suitable
for this, PEA stage. Thus, it is anticipated at the required airflow for this deposit, using a
block cave mining method, will be on the order of 1,680 m3/s. Given the Project stage
and the nature of the deposit, no correction to elevation has been made.

Given the location of the Deep Kerr deposit, intake air heating is considered during the
months with average surface temperatures below 3°C. Over the average heating season

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 (October through April/May), it is estimated that the equivalent of 6.1 to 7.9 million liters
of propane (liquefied petroleum gas [LPG]) will be required.

Other elements of the mine ventilation system design are factored relative to the
anticipated number of production panels and panel layouts to arrive at estimates for the
number of intake and exhaust regulators, bulkhead, air doors, air locks, auxiliary fans,
etc. A ventilation schematic is shown in Figure 24.15.

Figure 24.15  Ventilation Schematic 

MINE DEWATERING
All drainage water for each lift is intended to gravity drain via a system of sumps and
boreholes to a dewatering gallery level located at the lowest point for each lift. The only
exception is the tail end of the conveyor system, which is designed with a designated
sump and 30HP pump station which discharges horizontally to the dewatering gallery
level.

The dewatering gallery contains two settling drifts each with a length of 100 m, with
removable/replaceable timber weir walls every 20 m, intended to settle out fine
sediment before being pumped by the main dewatering pumps. All water is assumed to
be pumped to the portal, where a surface pump station transfers the water to the main
Project water treatment dam and facility near the Mitchell valley area.

Although detailed hydrogeological drilling or studies have not yet been performed for
Deep Kerr, KSM’s guidance based on dewatering simulations for Mitchell UG indicate
that a system sized to handle up to 65,000 gpm, i.e., 4 m3 /s, would be required to
accommodate a potential 1:200 year precipitation event. In addition to the 1:200 year
event, there are more frequent seasonal events which are anticipated to exceed 1 m3/s,
i.e., 15,000 – 20, 000 gpm in the period from May until July.

In addition to pumping, approximately 500,000 m3 of additional water storage capacity to

buffer the 1:200 year and other seasonal event is included in Lifts 2 and 3 on the

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 dewatering level, via 10 km of 7.0 mW x 7.0 mH of additional drifting. This storage
capacity is not required for Lift 1 since water in excess of the installed pumping capacity
can be diverted to the intake adits which gravity drain out to the portals, and then
pumped to the WTP.

For Lift 1 the installed power requirement for the main pump station in the dewatering
gallery level is approximately 500 HP. This capacity is intended to accommodate
approximately 2,000 gpm of mining process water drainage and minor groundwater
inflow dewatering. During the larger seasonal dewatering events, provisions will be in
place on the upper footprint levels to intercept and route a majority of water away from
the footprint and down towards the portals in the ventilation adits via gravity.

For Lift 2 the installed power requirement for the main pump station in the dewatering
gallery level is approximately 45,000 HP, which corresponds to a capacity of 4 m3/s, or
65,000 gpm. The main pump station will pump from the dewatering level and discharge
directly to the portals.

For Lift 3 the installed power requirement for the main pump station in the dewatering
gallery level is also approximately 45,000 HP, which also corresponds to a capacity of 4
m3/s, or 65,000 gpm. For Lift 3, an additional transfer pump station, equivalent in power
and capacity to the main pump station, will be required at the Lift 2 elevation to transfer
the water up to Lift 1 and out to the portals.

Figure 24.16  Mine Dewatering General Arrangement 

PRODUCTION SCHEDULE
The proposed production schedule for Deep Kerr is shown in Figure 24.17. Note that the
years shown apply to the underground operation only, not to the combined open pit and
underground multi-mine plan.

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 Figure 24.17  Deep Kerr Mine Production Plan 

30,000 80.00

70.00

Production Tonnes (x1000)
25,000
60.00
20,000

NSR ($/Ton)
50.00

15,000 40.00

30.00
10,000
20.00
5,000
10.00

0 0.00
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47
Production year

Lift 1 Lift 2 Lift 3 NSR

Only classified Mineral Resources are included in the production plan. All the
unclassified materials are treated as waste by setting the grades to zero. Table 24.6
shows the distribution of diluted mineral resources in the PEA mine plan based on their
classifications.

Table 24.6  Deep Kerr Diluted Mineral Resources in PEA Mine Plan 
Measured Indicated Inferred
Tonnes (millions)* - 24.4 931.5
Au (g/t) - 0.26 0.31
Cu (%) - 0.54 0.49
Ag (g/t) - 1.1 1.7
Note: *Includes 90.4 Mt of mineralized dilution (the portion of Indicated and Inferred material that is below

the Mineral Resource statement cut-off, $0 < NSR < $16), and 27.8 Mt of non-mineralized dilution
(unclassified material set to zero grade).

BLASTING AND EXPLOSIVES

The PEA has assumed that there will be separate explosive magazines for each lift.

Explosives will be used underground for five main purposes:

 preparation development of mineralized areas

 draw bell construction
 undercutting
 development in barren material
 secondary blasting of boulders and hang ups.

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 The first four activities are ongoing operations up to until about four years prior to the end
of underground production. The last activity will be an ongoing operation until production
ends.

MINING EQUIPMENT
Primary and support equipment requirements for the proposed Deep Kerr panel cave
operation are summarized in Table 24.7.

Table 24.7  Mobile Equipment Requirements, Deep Kerr 
No. of
Equipment Units
Sandvik DD420-40C Jumbo 5.0
Sandvik LH514 LHD (7 m3) 20.0
Sandvik LH517 LHD (8 m3) 4.0
Sandvik TH550 55T Truck - Waste 12.0
Sandvik TH550 55T Truck - Production 22.0
Sandvik DS310 Rock Bolter 17.0
Atlas Copco Cabletec LC 5.0
Normet Utimec 1600 Transmixer 5.0
Normet Spraymec 6050W Shotcrete Sprayer 2.0
Normet Charmec 1605 ANFO Loader 4.0
Maclean BH2 Blockholer 6.0
Atlas Copco M6C Production Drill 7.0
Cat TH407 Telehandler 4.0
Kubota R520S Tractor/Backhoe 4.0
Normet Cassette Fuel/Lube Deck 4.0
Normet MF 540 Scissorlift Manlift 4.0
Toyota Personnel Transporter 13.0
Cat 140M Grader 4.0
Cat CS56 Vibratory Packer 1.0
Concrete Pump with Trailer - Meyco Altera 1.0
Marcotte M40 Boomtruck 1.0
Compressor Sullair 185 6.0
Mobile Crane - Grove RT540E (35T) 2.0
Ingersoll Rand 1550SE Electricians Service Vehicle 2.0
Ingersoll Rand 1550SE Mechanics Service Truck 2.0
Normet MF028 Sludge Truck 1.0
Normet Utimec MF500 Fire Truck 1.0
Normet MF350 Water Truck 1.0
Toyota Landcruiser Mine Ambulance 1.0
Toyota Landcruiser Mine Rescue Truck 1.0
Atlas Copco UV2 - Asphalt Sprayer 1.0

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 MANPOWER CONSIDERATIONS
The estimated workforce for Deep Kerr is approximately 2 to 250 persons per shift at the
peak of preproduction construction period and also at peak production, based on the
man-hour build up for the mine plan and cost estimate.

COMMENTS ON DEEP KERR UNDERGROUND MINING

The PEA mine plan is based on a subset of the Mineral Resource estimates and assumes
panel caving operations at the Deep Kerr deposit will be integrated with the production
from the adjacent KSM mines (i.e., Mitchell open pit, Mitchell underground, Iron Cap,
Sulphurets, etc.) to support the various production scenarios considered for the PEA.

The Deep Kerr panel caving mine will operate for 48 years, including 3 years of initial pre-
production construction and development, and a 6-year ramp-up period to a full
production rate of 70 kt/d.

24.16.3 IRON CAP MINING METHODS 
GEOTECHNICAL CONSIDERATIONS
For the 2016 PFS, the characterization of the Iron Cap rock mass focused on the rock in
and around the extraction and undercut levels of the proposed block cave mine (1,035 m
elevation) and on the mineralized rock above this that will be caved. Rock within 50 m of
the ground surface is expected to be of poorer quality due to weathering. This rock will
not have a significant impact on the caving response of the mineralized rock, and
geotechnical information from this rock has not been included in the characterization of
the rock mass that will be block caved.

Characterization of the rock was based on core photographs and data collected for
exploration drill holes, detailed geotechnical data collected for drilling programs carried
out by BGC in 2010 (BGC 2011), and an interpreted geological model provided to Golder
by Seabridge.

There are three geotechnical holes in the Iron Cap deposit. No additional analysis of new
exploration drill holes was completed for this PEA as the 2016 assessments are still
considered valid for the new footprint that is now 175 m deeper.

The caveability assessments made using Laubscher’s and Mathews’ methods for the
2016 PFS indicated that the size of the footprint required to initiate and propagate
caving is between approximately 100 m and 220 m. This minimum footprint size is
significantly smaller than the size of the footprint of the deposit that can potentially be
mined economically by caving. This fact, together with the generally large-size,
continuous nature of the deposit, indicates that the Iron Cap deposit is amenable to cave
mining.

The cave mining will draw down the mineralized rock, and a significant depression will
develop on surface above the production footprint in the form of a crater. The crater
typically develops on surface above and slightly laterally beyond the footprint of the
production horizon of the cave mining. The top section of the crater is a relatively steep

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 escarpment (60 to 70°) that is marginally stable but comprised of nominally in place
dilated rock. Beneath this is failed broken rock that has progressively sloughed from the
rim of the crater. This rock rills down to the bottom of the crater at about 40 degrees.

MINING METHOD SELECTION

The most appropriate mining methods for this deposit are block caving, sub-level caving
and sub-level stoping. Based on mining costs, deposit grade, geometry and depth, block
caving was selected as the preferred mining method.

CAVE MODELLING AND PRODUCTION SCENARIOS

Seabridge provided the block model with updated NSR block values. Instead of cut-off-
grade, various shut-off values based on NSR were used to determine and optimize
footprint shape. A series of GEOVIA PCBC™ Footprint Finder runs were performed at
varying NSR values from Cdn$20/t to Cdn$24/t, for a production rate of 40 kt/d. The
results from these runs were used to generate hill-of-value tables which emphasized NPV
and IRR. The footprint used for mine design was based on a NSR shut-off of Cdn$20/t
for the footprint shape, and a NSR shut-off of Cdn$23/t for column height. A second
lower cave lift was assessed but this was not of sufficient size to warrant further work.

A footprint at elevation at 900 m has the most value and the block cave design was
based on this footprint. Figure 24.18 shows the GEOVIA PCBC™ footprint at the 900 m
elevation.

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 Figure 24.18  GEOVIA PCBC™ Footprint for Lift at 900 m Elevation 

Note: Figure prepared by Golder Associates Ltd., 2016. Grid system is based on UTM coordinates, with
North being at the top of the image. Warmer colors indicate higher caving column NSR values,
whereas cooler colors indicate lower caving column NSR values.

Dilution
Dilution for the block caving was derived using Laubscher´s dilution matrix, which is a
common methodology employed by operating block caving mines. Starting with the in

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 situ block model, a diluted block model is calculated using a 60% dilution entry point and
195 height of interaction zone. All calculations to determine the height of draw of block
caving are undertaken using the diluted model.

DESIGN CRITERIA AND LAYOUT

The block cave design for the Iron Cap footprint is at the 900 m elevation. The shape of
footprint is irregular oval, with an area of 177,000 m2, and a perimeter length of 1.6 km.
The widest section of the footprint is 465 m.

Personnel, material, and supplies will access the underground through a drive off the
Mitchell access ramp (this assumes that Mitchell will be mined first). Two fresh air
portals and one exhaust portal are planned on the north slope of the Mitchell Valley.
These tunnels may act as an alternative access to the underground from the surface in
case of emergency. The fresh air tunnels will connect to surface and a perimeter drift will
be constructed around the entire mine footprint to provide fresh air to the mine workings.

The Iron Cap design has multiple drifts that can act as an emergency egress. The primary
emergency egress will be the train tunnel or access tunnel, whichever is accessible. If
both tunnels are inaccessible, it will be possible to exit the mine through one of the fresh
air drifts. Figure 24.19 shows an isometric view of the Iron Cap mine layout looking
towards the southwest.

Figure 24.19  Iron Cap Mine General Layout with Topo and NSR above Cdn$20/t NSR Shell 

Note: Figure prepared by Golder Associates Ltd., 2016.

Figure 24.20 shows the typical level arrangement for the Iron Cap mine.

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 Figure 24.20  Typical Level Arrangement for Iron Cap 

Note: Figure prepared by Golder Associate Ltd., 2016.

VENTILATION
The total airflow requirements were based upon air quantities of 0.063 m3/s per kilowatt
of diesel equipment, equipment utilization, and engine utilization. The total airflow
requirement is estimated at 1,000 m3/s, which is sufficient to appropriately dilute all
noxious gases and particulate matter produced by the mining equipment and activities
on each mining level. This equates to a rate of 0.025 m3/s/t/d.

Heating of mine air in the winter months is included in the design and cost estimates and
will be done by mine heaters located at each of the two main fan installations. The mine
air heaters will heat 1,000 m3/s to 3°C for five months per year (November through
March). The propane requirement is 2.4 million liters per year.

Figure 24.21 is a schematic of the ventilation system showing major airflow directions.

Figure 24.21  Ventilation Schematic for Iron Cap Mine (Section Looking West) 

Note: Figure prepared by Golder Associate Ltd., 2016.

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 MINE DEWATERING
The mine water handling system is designed to handle the water that originates from the
groundwater and surface inflows (including possible water from ice that caves into the
crater when the ice field is undercut), and water that is introduced to the mine for
operations.

The inflows to Iron Cap are conveyed by gravity away from the production levels to drifts
that connect to the Mitchell North Slope Depressurization Tunnel located at the south
end of the footprint. To provide for good drainage, the underground drifts have been
graded so that water will run towards one of the two dewatering tunnels. Any flood water
will also flow down these drifts where it will be collected in the existing “dirty” water
infrastructure. Pumps are not required to dewater Iron Cap. The underground water
management system at Iron Cap can handle 4 m3/s (63,000 gal/min). This caters for
both the groundwater and peak surface water inflows.

Figure 24.22 shows a schematic of the proposed dewatering strategy for the Iron Cap
mine.

Figure 24.22  Mine Dewatering Arrangement for Iron Cap (Plan View) 

Note: Figure prepared by Golder Associate Ltd., 2016.

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 PRODUCTION SCHEDULE
The proposed production schedule for Iron Cap is shown in Figure 24.23. Note that the
years shown apply to the Iron Cap underground operation only, not to the combined open
pit and underground multi-mine plan of the Project.

Figure 24.23  Iron Cap Mine Production Plan 

Note: Figure prepared by Golder Associates Ltd., 2016.

Only classified Mineral Resources are evaluated as having grades and NSR value in the
production plan. All the unclassified materials are treated as waste by setting the grades
to zero. Table 24.8 shows the distribution of diluted Mineral Resources in the PEA mine
plan based on their classifications.

Table 24.8  Iron Cap Diluted Mineral Resources in PEA Mine Plan 
Measured Indicated Inferred*
Tonnes (millions)* - 121.5 77.4
NSR (Cdn$/t) - 38.08 31.17
Au (g/t) - 0.64 0.46
Cu (%) - 0.24 0.23
Ag (g/t) - 4.1 3.5
Note: *Includes 15.7 Mt of mineralized dilution (the portion of Indicated and Inferred material that is below
the Mineral Resource statement cut-off, $0 < NSR < $16) and 1.7 Mt of non-mineralized dilution
(unclassified material set to zero grade).

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 BLASTING AND EXPLOSIVES
The PEA has assumed that explosives will be stored in the Mitchell Valley to service both
the Mitchell and Iron Cap mines. The explosives will be delivered by truck to the
underground mine as required. Small underground explosive magazines are included for
development mining and secondary blasting activities.

Explosives will be used underground for five main purposes:

 preparation development of mineralized areas

 draw bell construction
 undercutting
 development in barren material
 secondary blasting of boulders and hang ups.

MINING EQUIPMENT
Primary and support equipment requirements for the proposed Iron Cap caving operation
are summarized in Table 24.9.

Table 24.9  Mobile Equipment Requirements for Iron Cap 
No. of
Equipment
Units
Development
Two-boom Jumbo 3
LHD (8 m3) 2
Haul Truck (55 t) 4
Rock Bolter 5
Shotcrete Sprayer (35,700 lb) 1
ANFO Charger 2
Transmixer (40,000 lb) 1
Raisebore 1
Scissor Lift and Boom Truck 4
Production
Longhole Drill (ITH, 89-216 mm) 3
Emulsion Loader 1
LHD (7 m3) 11
Haul Truck (55 t) 13
Block Holer 2
Scissor Lift and Boom Truck 2
Mobile Rockbreaker 4
Support
Grader 2
Big Personnel Carrier 4
table continues...

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 No. of
Equipment
Units
Small Personnel Carrier 6
Lube Truck 3
Contractor
Two-boom Jumbo 1
Haul Truck (55 t) 1
LHD (8 m3) 1
Rock Bolter 1
ANFO Charger 1
Scissor Lift and Boom Truck 1

MANPOWER CONSIDERATIONS
The total estimated workforce for Iron Cap underground operation during peak
construction is 263, while the total workforce required during the peak production is
approximately 400 persons. The estimate is based on the development and production
tonnage and equipment requirements.

COMMENTS ON IRON CAP MINING METHODS

The basis for the Iron Cap underground mine development is to support the mill feed
requirement at the Project site from multiple mines. The development stage of the Iron
Cap mine is approximately five years, which includes mine access, initial footprint
development and construction of major mine infrastructure, such as underground
crusher, material handling system, shops, dewatering system, primary ventilation fans,
etc. Following the five year development stage, the initial ramp up period is three years
to reach full production of 14.6 Mt/a (40 kt/d), with a total production operating life of
18 years.

24.16.4 MITCHELL MINING METHODS 
GEOTECHNICAL CONSIDERATIONS
For the 2016 PFS, the characterization of the rock mass focused on the rock in and
around the extraction level of the proposed block cave mine and on the mineralized rock
above this that will be caved (235 m elevation). A second area of interest involves the
rock where the ramps, conveyor drifts, raises, and other mine infrastructure will be
excavated to connect the production elevation to surface.

Characterization of the rock was based on geotechnical data collected for exploration drill
holes, detailed geotechnical data collected from drilling programs carried out by BGC in
2009 (BGC 2010) and Golder in 2011 (Golder 2012a), outcrop mapping data (Golder
2012a), laboratory testing data (BGC 2010; Golder 2012a), and an interpreted geological
model provided by Seabridge.

There are a total of 114 exploration holes and 14 geotechnical holes in the Mitchell
deposit area. The borehole locations are shown in Figure 24.24. Geotechnical boreholes

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 are shown in red. No additional analysis of new exploration drillholes was completed for
this PEA as the 2012 assessments are still considered valid for the new footprint that is
now 70 m deeper.

Figure 24.24  Mitchell Exploration and Geotechnical Borehole Locations 

For the purpose of this study, host rock refers to the rock mass outside of the immediate
area of mineralization. The host rock in which the mine infrastructure (e.g., raises,
conveyor drifts, ramps, etc.) will be excavated has been assessed based on data
collected from nearby drill holes.

The caveability assessments made using Laubscher’s and Mathews’ methods indicate
that the size of the footprint required to initiate and propagate caving is between
approximately 110 m and 220 m. These dimensions are significantly smaller than the
size of the footprint of the deposit that can potentially be mined economically by caving.
This fact, together with the general large three-dimensional shape of the deposit, suggest
that block caving is a suitable mining method for the Mitchell deposit.

The caving mining will draw down the mineralized rock, and a significant depression will
develop on surface above the production footprint in the form of a crater. The crater
typically develops on surface above and slightly laterally beyond the footprint of the
production horizon of the caving mining. The top section of the crater is a relatively steep
escarpment (60 to 70°) that is marginally stable but comprised of nominally in place
dilated rock. Beneath this is failed broken rock that has progressively sloughed from the
rim of the crater. This rock rills down to the bottom of the crater at about 40°.

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 MINING METHOD SELECTION
The most appropriate mining methods for this deposit are block caving, sub-level caving
and sub-level stoping. Based on mining costs, deposit grade, geometry and depth, block
caving was selected as the preferred mining method.

CAVE MODELLING AND PRODUCTION SCENARIOS

Seabridge provided the block model with updated NSR block values. Golder used the
block model to run GEOVIA PCBC™ Footprint Finder to search for the optimum location
and extents of the block cave. Instead of cut-off-grade, various shut-off values based on
NSR were used to determine and optimize footprint shape. A series of GEOVIA PCBC™
Footprint Finder runs were performed at varying NSR values from Cdn$20/t to Cdn$26/t,
for a production rate of 60 kt/d. The results from these runs were used to generate hill-
of-value tables which emphasized NPV and IRR. The footprint used for mine design was
based on a NSR shut-off of Cdn$20/t for the footprint shape, and a NSR shut-off of
Cdn$20/t for column height. A second lower cave lift was assessed but was not of
sufficient size to warrant further work.

A footprint at elevation at 165 m has the most value and the block cave design was
based on this footprint. Figure 24.25 shows the GEOVIA PCBC™ Footprint at the 165 m
elevation.

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 Figure 24.25  GEOVIA PCBC™ Footprint for Lift at 165 m Elevation 

Note: Figure prepared by Golder Associates Ltd., 2016. Grid system is based on UTM coordinates, with
north at the top of the image. Warmer colors indicate higher caving column NSR values,
whereas cooler colors indicate lower caving column NSR values.

Dilution
Dilution for the block caving was derived using Laubscher´s dilution matrix, which is a
common methodology employed by operating block caving mines. Starting with the in
situ block model, a diluted block model is calculated using a 60% dilution entry point and
195 height of interaction zone. All calculations to determine the height of draw of block
caving are undertaken using the diluted model.

DESIGN CRITERIA AND LAYOUT

The block cave design for Mitchell footprint is at the 165 m elevation. The shape of
footprint is irregular oval, with an area of 532,000 m2, and a perimeter length of 2.9 km.
The widest section of the footprint is 800 m.

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 Personnel, material, and supplies will access the underground through a main access
ramp which will be developed from a portal near the Mitchell OPC area at the 820 m
elevation. The Mitchell underground is designed with two ramps to surface to provide
auxiliary ventilation in the form of a raise or ventilation loop, to separate the conveyor
from the main access, and to allow for emergency egress. Ventilation for the
underground operation will be provided by two fresh air raises, and two exhaust air raises
that extend from the extraction and haulage levels approximately 700 m to the surface.
Twin dewatering tunnels that also provide temporary storage capacity extend 6.0 km
from the production level to the southwest where they connect to a raise used to pump
water to surface and then to the Water Storage Dam.

The Mitchell design has multiple raises and drifts that can act as an emergency egress.
The primary emergency egress will be the access tunnel or conveyor tunnel, whichever is
accessible. If both tunnels are inaccessible, it will be possible to exit the mine through
one of the fresh air shafts. Figure 24.26 shows the general mine layout for Mitchell.

Figure 24.26  Mitchell Mine General Layout with Topo and NSR above Cdn$20/t NSR Shell 

Note: Figure prepared by Golder Associates Ltd., 2016.

Figure 24.27 shows the typical level arrangement for the Mitchell mine.

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 Figure 24.27  Typical Level Arrangement for Mitchell 

Note: Figure prepared by Golder Associate Ltd., 2016.

VENTILATION
The total airflow requirements were based upon air quantities of 0.063 m3/s per kilowatt
of diesel equipment, equipment utilization, and engine utilization. The total airflow
requirement is estimated at 1,500 m3/s, which is sufficient to appropriately dilute all
noxious gases and particulate matter produced by the mining equipment and activities
on each mining level. This equates to a rate of 0.026 m3/s/t/d.

Heating of mine air in the winter months is included in the design and cost estimates and
will be done by mine heaters located at each of the two main fan installations. The mine
air heaters will have to heat 1,500 m3/s to 3°C for five months per year (November
through March). The propane requirement is 3.5 million liters per year.

Figure 24.28 is a schematic of the ventilation system showing major airflow directions.

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 Figure 24.28  Ventilation Schematic for Mitchell Mine (Section Looking North) 

MINE DEWATERING
The mine water handling system is designed to handle the water that originates from the
groundwater and surface inflows (including possible water from ice that caves into the
crater when the ice field is undercut), and water that is introduced to the mine for
operations.

The area of the catchment around the Mitchell pit is approximately 9 km2. Once the cave
breaks through to the pit one to two years after the start of caving mining, the rainfall and
snowmelt within this catchment that is not diverted will flow into the crater and percolate
through the broken caved rock into the mine workings. Experience at other caving mines
indicates that the broken caved rock will not retard the inflows to any significant degree.
Under these circumstances, the short-term inflow rates and total inflow volumes for
various event durations are expected to be significant and must be managed
appropriately. The groundwater inflows by comparison are insignificantly small and have
not been considered further in the underground mine water management plan.

In order to reduce surface inflows, diversion ditches will be constructed at strategic

locations beyond the crest of the pit. This will include additional diversions and re-
contouring required to re-direct water from entering the crater. The total diverted area is
3.28 km2. The diversion ditches will be located outside areas that might become
unstable during cave mining. For design purposes, the diversions were assigned
efficiencies of 50 and 65%, depending on expected seasonal conditions to allow for
adverse effects of ice, avalanches, snow blockages, etc.

The conceptual design for the underground management system consists of directing the
water by gravity to two parallel drainage tunnels. These tunnels will convey water and
serve as temporary water storage from the haulage level to the bottom of a shaft that
extends up to the ground surface adjacent to the HDS WTP. The pumping system
consists of two pumping stations, one underground and one on surface, and the
associated pipelines that transfer the water to the WSF. The underground water

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 management system at Mitchell can handle 4 m3/s (63,000 gal/min). This caters for
both the groundwater and peak surface water inflows.

Figure 24.29 shows a schematic of the proposed dewatering strategy for the Mitchell
mine.

Figure 24.29  Mine Dewatering Arrangement for Mitchell (Long Section Looking North) 

PRODUCTION SCHEDULE
The proposed production schedule for Mitchell is shown in Figure 24.30. Note that the
years shown apply to the Mitchell underground operation only, not to the combined open
pit and underground multi-mine plan of the Project.

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 Figure 24.30  Mitchell Mine Production Plan  

Note: Figure prepared by Golder Associates Ltd., 2016.

Only classified Mineral Resources are evaluated as having grades and NSR value in the
production plan. All the unclassified materials are treated as waste by setting the grades
to zero. An NSR shut-off of $20/t was used to determine the economic footprint and
column extractions. Table 24.10 shows the distribution of Mineral Resources in the PEA
mine plan based on their classifications.

Table 24.10  Mitchell Diluted Mineral Resources in PEA Mine Plan 
Measured Indicated Inferred*
Tonnes (millions)* 244.9 361.0 87.5
NSR (Cdn$/t) 37.90 36.03 22.55
Au (g/t) 0.68 0.65 0.40
Cu (%) 0.21 0.20 0.13
Ag (g/t) 4.2 4.1 3.1
Notes: *Includes 16.3 Mt of mineralized dilution (the portion of Measured, Indicated, and Inferred material
that is below the Mineral Resource cut-off, $0 < NSR < $16) and 18.3 Mt of non-mineralized dilution
(unclassified material set to zero grade).

BLASTING AND EXPLOSIVES

The PEA has assumed that explosives will be stored in the Mitchell Valley to service both
the Mitchell and Iron Cap mines. The explosives will be delivered by truck to the
underground mine as required. Small underground explosive magazines are included for
development mining and secondary blasting activities.

Explosives will be used underground for five main purposes:

 preparation development of mineralized areas

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  draw bell construction
 undercutting
 development in barren material
 secondary blasting of boulders and hang ups.

MINING EQUIPMENT
Primary and support equipment requirements for the proposed Mitchell caving operation
are summarized in Table 24.11.

Table 24.11  Mobile Equipment Requirements, Mitchell 
No. of
Equipment
Units
Development
Two-boom Jumbo 3
LHD (7 m3) 3
Haul Truck (55 t) 7
Rock Bolter (33 to 45 mm) 9
Shotcrete Sprayer (35,700 lb) 1
ANFO Charger 2
Transmixer (40,000 lb) 1
Raisebore 1
Scissor Lift and Boom Truck 4
Production
Longhole Drill (ITH, 89 to 216 mm) 5
Emulsion Loader 1
Haul Truck (55 t) 18
LHD (7 m3) 24
Block Holer 2
Scissor Lift and Boom Truck 8
Mobile Rockbreaker (4 to 5.4 m3) 4
Support
Grader 2
Big Personnel Carrier 4
Small Personnel Carrier 6
Lube Truck 3
Contractor
Two-boom Jumbo 1
Haul Truck (55 t) 1
LHD (7 m3) 1
Contractor
Rock Bolter (33 to 45 mm) 1
ANFO Charger 1
Scissor Lift and Boom Truck 1

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 MANPOWER CONSIDERATIONS
The total estimated workforce for Mitchell underground operation during peak
construction is 351, while the total workforce required during the peak production is
approximately 492 persons. The estimate is based on the development and production
tonnages and equipment requirements.

COMMENTS ON MITCHELL MINING METHOD

The basis for the Mitchell underground mine development is to support the mill feed
requirement at the Project site from multiple mines. The development stage of Mitchell
deposit is approximately five years, which includes mine access, initial footprint
development, and construction of major mine infrastructure, such as underground
crusher, material handling system, shops, dewatering system, primary ventilation fans,
etc. Following the development stage, initial ramp up period is five years to reach full
production of 21.9 Mt/a (60 kt/d), with a total production mine life of 36 years.

24.17 RECOVERY METHODS 
The proposed KSM plant will have an average process rate of 170,000 t/d. The Process
Plant will receive mill feed from the Mitchell and Sulphurets open pits and the Deep Kerr,
Mitchell and Iron Cap underground operations. The Mitchell open pit and Deep Kerr
underground mines will be the main source of mill feed, contributing about 83% of the
total plant feed over the LOM. Based on the available information, testwork performed
on sample locations for the open pit production provides a reasonable indication of the
mineralogical characteristics of the material examined in this PEA for both the surface
and underground mine extraction scenarios. The process flowsheet considered in the
2016 PFS is also an appropriate basis for the PEA given the nature of the mill feed and
the level of sampling performed through the deposit.

Several metallurgical test programs have been carried out to assess the recoverability of
copper, gold and silver values using the projected flowsheet which is essentially identical
to that utilized in the 2016 PFS by Tetra Tech. The results of the programs performed for
the PFS indicate that the mineral samples from the Mitchel, Sulphurets, Iron Cap and
Deep Kerr mineralization deposits are amenable to flotation followed by cyanide leaching
process. With the use of the same flowsheet in the PEA as was used in the PFS, it was
possible to rely upon the use of this testwork to support the PEA process.

Detailed characterization and metallurgical testwork on Mitchell, Sulphurets, Iron Cap,

and Deep Kerr samples is presented in Section 13.0 of the 2016 PFS. This testwork
examined comminution (crushing and grinding), concentration by flotation of copper and
gold into a saleable concentrate, and the further recovery of gold from flotation tailings by
leaching. Recovery equations from this testwork were produced by Tetra Tech, but
reviewed and considered adequate for the purposes of supporting the PEA process
design by Amec Foster Wheeler.

Comminution testwork results indicate that the samples from all the deposits are
moderately hard for SAG and ball milling. Additional comminution tests showed that the

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 samples tested were amenable to particle size reduction by the HPGR approach as
preparation for ball mill grinding.

Flotation testwork (batch and locked cycle) indicate that the mineralization is amenable
to concentration into a saleable copper-gold concentrate with no significant penalty
elements. Following flotation, cyanidation tests showed that it was possible to recover
gold and silver from the tailings to bullion. The metallurgical test results obtained from
the various test programs were used to predict plant metallurgical performance
parameters for copper, gold and silver. The metallurgical performance projections of the
four KSM mineralization types are summarized in Section 13.2 of the 2016 PFS. In
addition, work was performed to indicate the consumption of reagents and grinding
media in comminution, flotation and cyanidation. Because of high cyanide
consumptions, testwork on cyanide recovery was also performed and the results
incorporated into the operating costs.

For the purpose of this PEA, the process circuit will incorporate three stage crushing,
milling, conventional flotation and cyanidation processes for the recovery of copper, gold
and silver. The overall process flow diagram developed for the PFS has been carried
through to the PEA, except for the molybdenum recovery circuit, which has been
eliminated. However, in order to process the higher throughput, equipment sizing for the
PEA modified to larger but proven units available in the market, optimizing plant footprint
and energy consumption for the tons processed. Redesign of the facilities was limited to
optimizing the layout provided by the use of the larger equipment in the PEA relative to
the 2016 PFS.

24.17.1 PROCESS PLANT 
The Process Plant was designed appropriate to the testwork and will consist of five
separate facilities for the handling and processing of mineralized material:

 a primary crushing and handling facility at the Mitchell open pit mine site
 a primary crushing and handling facility at the Sulphurets open pit mine site
 a primary crushing and handling facility at the Deep Kerr underground mine site
 a train transportation system through the MTT
 a main process plant facility at the Treaty OPC area, including coarse mill feed
stockpiling, secondary/tertiary crushing, ball mill grinding, flotation, regrinding,
concentrate dewatering, and cyanidation followed by treatment of tailings prior
to deposition with the TMF.

24.17.2 FLOWSHEET DESCRIPTION 
COMMINUTION
Primary crushing facilities will be located at each pit to reduce the ROM particle size to
approximately 80% passing 150 mm using gyratory 60 inches x 113 inches gyratory
crushers. Two units will be located at the Mitchell pit and one unit at Sulphurets pit.

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 Crushed mineralized material will be conveyed and loaded onto the MTT train to the main
plant site located at the Treaty OPC site, approximately 23 km northeast of the Mine Site.

Between years 4 and 51, underground mineralized material from Deep Kerr, Iron Cap
and Mitchell will supplement open pit production and eventually replace it. At the Deep
Kerr site, two, 60 inch by 89 inch gyratory crushers will reduce run-of-mine mill feed
produced by block caving to 80% passing 165 mm. The crushed material will be
conveyed on the Kerr-MTT conveyor to the MTT train for delivery to the coarse stockpile at
the Treaty OPC. The Iron Cap and Mitchell mineralized material will also be mined by
block caving and will be crushed by existing gyratories on site to 80% passing 150 mm or
finer. The crushed material will also be conveyed to the MTT and loaded onto the MTT
train to the coarse mill feed stockpile at the Treaty OPC.

The proportion of mine production being supplied through the various crushers is shown
in Figure 24.31 indicating a blending effect on the mill feed being processed through the
subsequent Process Plant (period shown is in years).

From the coarse mill feed stockpile, the reclaimed feed material will be conveyed to the
secondary crushing facility and fed to two vibrating screens. The oversize from each
screen oversize will feed a MP2500 secondary cone crusher or equivalent. The cone
crusher product will be returned to the screen feed conveyor. Screen undersize product
that is finer than 50 mm will be delivered by conveying to an enclosed surge stockpile
with a 60,000 t live capacity.

Figure 24.31  Production Schedule – LOM 

Iron Cap Mitchell Deep Kerr Open Pit

70000

60000

50000

40000
Tonnage (kt)

30000

20000

10000

0
-3 -1 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52

Period

The crushed mill-feed material from secondary crushing will be reclaimed from the
60,000 t stockpile by reclaim apron feeders onto two HPGR feed conveyors. These
conveyors will deliver the mill-feed material to two tertiary crusher HPGR feed surge bins.

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 The reclaimed mill-feed material will be further crushed by four HPGR crushers. Four belt
feeders will withdraw the reclaimed mill-feed material from the two HPGR feed surge bins
and feed each of the four HPGR crushers separately. Each HPGR crusher is in closed
circuit with double deck vibrating screens with the HGPR discharge wet-screened at a cut
size of 6 mm. The screen oversize will return via conveying to the HPGR feed bin while
the screen undersize will leave the crushing circuit and report to the ball mill grinding
circuits. The four HPGR crushing lines will have a nominal total process capacity of
7,535 t/h.

The grinding circuit will employ four conventional ball mills to grind the HPGR product to a
particle size of 80% passing 125 to 150 µm. Each ball mill will be in closed-circuit with a
cluster of cyclones. The cyclone underflow will gravity-flow to the ball mill feed chute,
while the overflow will gravity flow to one of four copper-gold rougher flotation trains. The
overall capacity of the grinding circuits is designed to have a nominal processing rate of
7,535 t/h.

FLOTATION
The products from the primary grinding circuits will feed the copper-gold
rougher/scavenger flotation circuit. This circuit is composed of two parallel banks of four
600 m3 flotation tank cells. The four cells of each bank will produce copper rougher
flotation concentrates (at an overall mass pull of 6%) which will then be reground to a
particle size of 80% passing 20 µm in two tower mills (each with an installed power of
3,356 kW). The reground copper-gold rougher concentrate will then be upgraded in a
cleaner flotation circuit with three stages of copper cleaner flotation producing a copper-
gold concentrate with a target grade of 25% copper. The first cleaning stage will consist
of four 100 m3 tank cells, the second stage of four, 50 m3 tank cells and in the third
stage three column cells will be used. First cleaner flotation tailing will be further floated
in four cleaner scavenger flotation cells each with a 100 m3 capacity. The concentrate
product from the cleaner scavenger flotation will be sent to the first cleaner cells while
the tailing will report to the gold leaching circuit. The tailing from the second and third
cleaner flotation stages will be returned to the first cell in the prior cleaner flotation
circuit.

The upgraded copper-gold concentrate will be thickened in a 21 m diameter high rate

thickener. The thickener underflow will be directed to the three 160 m2 copper-gold
concentrate pressure filter to further reduce water content to 9% moisture. The copper-
gold concentrate will be stockpiled on site and then transported by trucks to a port site at
Stewart where the concentrate will be stored and loaded into ships for ocean transport to
overseas smelters.

Located at the tail of each copper rougher scavenger bank is a further four cells which
are used for pyrite flotation. These cells will produce a pyrite concentrate which is gold
bearing. The final pyrite flotation tailing will be sent to center lined cell within the TMF for
storage. The pyrite concentrate will be reground in two tower mills (each with an installed
power of 3,356 kW) to a particle size of 80% passing 20 µm.

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 GOLD RECOVERY FROM THE GOLD-BEARING PYRITE PRODUCTS
The reground pyrite concentrate will report to the gold leach circuit. Both the reground
gold-bearing pyrite concentrate and the first cleaner scavenger tailing will each be
thickened in dedicated 40 m diameter thickeners to a solids density of 65%. The
underflow of each thickener will be pumped to its own dedicated cyanide leaching line.
Each line will consist of three pre-treatment tanks and eight conventional CIL tanks.

The loaded carbon leaving the CIL circuit will be transferred to the elution circuit for gold
recovery followed by the reactivation of carbon in an electrically heated rotary kiln. The
reactivated carbon will be circulated back to the CIL circuit. The tailings from the CIL
trains will pass over a safety screen system prior to be processed for cyanide recovery.

The pregnant solution from the elution system will go through the electrowinning cell
where a precious metal sludge will be produced. The sludge will be filtered, dried and
smelted in an induction furnace to produce gold and silver doré.

TREATMENT OF LEACH RESIDUES

The combined residue from the CIL circuits will be pumped to a single two-stage
conventional counter current decantation (CCD) washing circuit. The CCD circuit will
consist of two 45 m diameter high-rate thickeners in series. The thickener overflow from
the first stage washing will be pumped to the cyanide recovery system. There, the barren
leach solution containing copper cyanide complexes from cyanidation is treated with
sulphuric acid and sodium sulphide to precipitate copper as copper sulphide, which is
thickened and recovered. The acidification converts part of the cyanide to hydrogen
cyanide gas allowing it to be recovered in a wet scrubber system as a high strength
cyanide solution. The underflow (washed residues) of the second thickener will be sent
to the cyanide destruction circuit prior to being pumped to the TMF.

TAILS MANAGEMENT
The flotation tailing and the treated CIL residues will separately flow to the TMF located
southeast of the main Process Plant. The flotation tailing and CIL residue will be stored
in separate areas within the TMF.

The CIL residue will be deposited in a lined CIL residue storage pond. The residue will be
covered with the supernatant to prevent sulphide minerals oxidation. The residue will be
eventually covered by the flotation tailing, from which most sulphides have been
removed. The supernatant from the CIL residue pond will be reclaimed by pumping to
the CIL circuit for reuse. The excess water will be reclaimed to the process plant to
further remove impurities before it is disposed to the environment or reused in flotation
circuit as process water.

There will be two flotation tailing pipelines directing flotation tailing to the TMF. The
flotation tailing from one of the tailing pipelines will be classified to produce coarse tailing
sands by two stages of cyclone classification. The coarse fraction will be used to
construct the tailing dam and the fines will directly report to the TMF. The second tailings
pipeline will report directly to the TMF. The supernatant from the tailing impoundment

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 area will be reclaimed to the process water tank by two stages of pumping. The water will
be used as process water for flotation circuits.

REAGENTS HANDLING
All the reagents will be prepared in a dedicated reagent preparation and storage facility
within a containment area. The liquid reagents will be added in the undiluted form via
metering pumps. The solid reagents will be prepared into adequate strength solutions in
dedicated mixing tanks and stored in holding tanks to be added to the processes via
metering pumps.

WATER AND PRESSURIZED AIR SUPPLY

Three separate water supply systems will be provided to support the operation—a fresh
water system, a process water system for grinding/flotation circuits and a process water
system for CIL/gold recovery circuits.

Plant air service systems will supply blower air to flotation, moderate pressure air to
leach, cyanide recovery and cyanide destruction, and high pressure air to filtration and
general plant and instrumentation services.

ASSAY AND METALLURGICAL LABORATORY

The assay laboratory will be equipped with necessary analytical instruments to provide
routine assays for the mine, process, and environmental departments.

The metallurgical laboratory, with laboratory equipment and instruments, will undertake
all necessary test work to monitor metallurgical performance and to improve the plant
production and metallurgical results.

PROCESS CONTROL AND INSTRUMENTATION

The plant control system will consist of a DCS with PC-based OIS located in control rooms
at the process facilities. Process control will be enhanced with the installation of an
automatic sampling system. The system will collect samples from various streams for on-
line analysis and the daily metallurgical balance.

For the protection of operating staff, cyanide and sulphur dioxide monitoring/alarm
systems will be installed at site where needed. In addition, CCTV support will be provided
at various locations at the crushing and plant facilities to ensure comprehensive site
monitoring.

PROCESS FLOW DIAGRAM

Figure 24.32 illustrates the overall process flow diagram. The major design
consideration in the process plant equipment sizing and layout were the use of the
largest equipment sizing available in order to minimize pumping and piping
requirements, process building footprint and capital costs. Figure 24.33 illustrates the
main process building layout.

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Figure 24.32  Overall PEA Process Flow Diagram 

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Figure 24.33  PEA Process Building Layout 

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24.17.3 MILL DESIGN CRITERIA 
The process plant design criteria for the PEA flowsheet are based on the following
sources of information and analysis:

 Section 13.0 of this report, which summarizes the metallurgical testwork

analysis and recovery assessment by Tetra Tech
 crushing and grinding calculations by Amec Foster Wheeler.

Table 24.12 summarizes the main design criteria established for the PEA. The criteria
are for a processing plant of 170,000 t/d capacity with a plant availability of 94%.

Table 24.12  Major PEA Process Design Criteria 
Parameter Units Value
Plant Feed Rate
Process Plant Availability % 94
Annual Processing Rate Mt/a, dry 62
Daily Processing Rate t/d, dry 170,000
Hourly Processing Rate, Nominal t/h, dry 7,535
Primary Grind Size, P80 µm 125 – 150
Concentrate Regrind Size, P80 µm 20
Leach Circuit - CIL
Elution Circuit - Pressure Zadra
Carbon Regeneration - Electric Kiln
Residue Management - CCD
Cyanide Recovery Method - AVR
Cyanide Destruction Method - SO2 + Air
Head Grades and Recoveries
Head Copper Grade, Average % 0.32
Head Gold Grade, Average g/t Au 0.52
Head Silver Grade, Average g/t Ag 2.7
Recovery to Flotation Concentrate
Copper % 87.6
Gold % 60
Silver % 50.4
Recovery to Dore
Gold % 15.6
Silver % 16.7

24.17.4 MAJOR EQUIPMENT SIZING CRITERIA 
Metallurgical calculation output for comminution circuit equipment sizing and installed
power is listed in Table 24.13 and Table 24.14.

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 Table 24.13  Comminution – Major Equipment Sizing 
Equipment Unit Value
Primary Crushing – Gyratory Crusher (Open Pit)
Number of Units - 3
Installed Motor per Unit kW 750
Recommended Gyratory Crusher Size mm 1524 x 2870
Secondary Crushing – Cone Crusher
Number of Units - 2
Installed Motor per Unit kW 1,865
Tertiary Crushing – HPGR
Number of Crushers - 4
Installed Power per Unit kW 7,400
Recommended HPGR Size mm Ø x mm W 2,600 x 1,750
Ball Mill
Number of Ball Mills - 4
Dimensions m (ø x length EGL) 8.2 x 13.2
ft. (ø x length EGL) 27 x 43.3”
Installed motor (per unit) MW 19,000

Table 24.14  Copper‐Gold Flotation – Major Equipment List 
Equipment Unit Value
Rougher/Scavenger Flotation
Number of Trains - 2
Number of Cells/Train - 4
Cell Volume m3 600
Installed Motor kW 450
Bulk Concentrate Regrind
Mill Type - Tower Mill
Number of Mills - 2
Installed Power kW 3356
1st Cleaner Flotation
Cell Type - Tank Cell
Number of Cells - 4
Cell Size m3 100
Installed Motor kW 132
2nd Cleaner Flotation
Number of Cells - 4
Cell Volume m3 50
Installed Motor kW 55
3rd Cleaner Flotation
Cell Type - Column Cell
Number of Columns - 3
table continues…

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 Equipment Unit Value
Column Size - -
Copper Concentrate Dewatering - -
Thickener Type - High Rate
Thickener Diameter m 21
Filter Type - Vertical
Number of Filters - 3
Filter Size m2 160

Table 24.15  Pyrite Flotation and Cyanidation – Major Equipment List 
Equipment Unit Value
Pyrite Flotation
Number of Trains - 2
Number of Cells/Train - 4
Cell Volume m3 600
Installed Motor kW 450
Pyrite Concentrate Regrind
Mill Type - Tower Mill
Number of Mills - 2
Installed Power kW 3356
Pre-Leach Thickeners
Number of Thickeners - 2
Thickener Size m, diameter 40
Pre-Aeration Tanks
Number of Trains - 2
Number of Tanks/Train - 3
Tank Volume m3 573
Cyanidation Tanks
Number of Trains - 2
Number of Tanks/Train - 8
Tank Volume m3 2,474
Cyanide Recovery Circuit
Number of Thickeners - 2
Thickener size m, diameter 40

24.17.5 INTERPRETATION AND CONCLUSIONS 
The increased throughput envisioned in this PEA can be achieved using the largest
proven units available in the market for each unit operation without significantly
redesigning the facilities proposed in the 2016 PFS.

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24.18 PROJECT INFRASTRUCTURE 
24.18.1 ONSITE 
Designs for the water and waste management structures within the PEA are based on the
2016 PFS level designs and provide conceptual level adjustments to include the PEA
mine plan layouts, staging plan and capacities required for the PEA production schedule.

OPEN PIT ROCK STORAGE FACILITY

Rock storage requirements for the PEA are significantly lessened due to reductions in
open pit phases of mining. The PFS mine plan includes 3.0 Bt of waste rock and the PEA
mine plan only includes 0.6 Bt. As a result the PEA requires only the Mitchell RSF, with a
smaller footprint than in the PFS. The geotechnical and water management design
criteria, operating, and closure design concepts from the PFS are adopted for the Mitchell
RSF as included in the PEA. A revised selenium drain configuration is provided in the PEA
for the Mitchell RSF.

The smaller footprint of the Mitchell RSF may offer additional options for selenium
capture. With the smaller footprint, the reduced interaction between the toe of the RSF
and the WSF impoundment also increases the water storage volume available behind the
WSD. These two potential design optimizations were not assessed within the PEA.

WATER MANAGEMENT
For the PEA water management and water treatment design criteria remain the same as
in the 2016 PFS. The elimination of the McTagg RSF in the PEA mine plan results in a
reduction of un-diverted catchment area above the WSD by 15%. In the PEA
configuration all of the McTagg Valley catchments are diverted by the Stage 1 McTagg
tunnel and only Stage 1 is required which reduces sustaining capital. As inflows scale
with catchment area the required HDS WTP capacity and estimated capital cost were
reduced by the same factor. For the PEA level of design the WSD crest elevation was
kept at the same elevation. WSD storage could potentially be reduced, reducing the WSD
crest elevation, although that optimization was not considered for the PEA.

TAILINGS MANAGEMENT
TMF configurations for the PEA adopt the 2016 PFS TMF design, adding modifications to
provide a conceptual level PEA TMF design. The higher peak PEA throughput of an
average annual 170,000 t/d during early operations requires 10 m higher starter dams
for the North, Splitter and Saddle dams which increases initial capital. The higher
throughput results in a TMF Stage 1 duration for North Cell operation of 19 years instead
of 25 years. Due to reduced throughput during the underground only Stage 2 of the TMF,
which requires construction of the Southeast Dam and operation of the South Cell, there
is no change required in starter dam height for the Southeast Dam. Final overall crest
elevations for all dams and the total design capacity of 2.3 Bt are similar to the PFS
design and within the contingency storage provided for the PFS. The only other change to
the TMF required for the PEA configuration is an enlargement of the CIL Residue tailing
cell. In the PFS design an allowance of 13% of storage is provided for CIL tailing. CIL

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 storage for the PEA was increased to 20% due to the increased sulphide content of Deep
Kerr mineralization. The lined CIL basin is enlarged to accommodate the increased CIL
storage by a relocation of the Saddle Dam centerline to the south.

MTT RAIL SYSTEM

MTT rail system will transport crushed mill feed, freight, fuel and personnel between the
Mitchell Valley and Treaty Valley

Crushed mill feed will be conveyed to one of two 15,000 t capacity underground bins.
Loading chutes under the bin will feed mineralized material into train wagons for
transport to Treaty where the wagons will bottom dump the crushed mill feed into a
15,000 t capacity ore bin. Apron feeders will then reclaim the mill feed to a belt conveyor
which will report to the 60,000 t live capacity COS.

Ten mill feed trains will be needed to deliver an average of 170,000 t/d of mill feed to
the process plant. Each mill feed train will be made-up of a 140 t electric locomotive and
16 off 42 m3 bottom-dump mill feed wagons.

Specially configured personnel and freight trains will transport freight, fuel, and
personnel through the MTT (Table 24.16). Staging areas at each end of the MTT for
marshalling and loading/unloading trains at each end will separate these activities from
those for mill feed transport. Personnel, freight, and fuel handling will be scheduled
during the day shift operations. A maintenance shop and siding for rolling stock will be
located in the Treaty staging area.

Train operations, with the exception of train loading, will be controlled by an automated
controls and scheduling system. The main control room will be located in the Treaty
staging area. Locomotives will be unmanned and not require engine drivers.

Table 24.16  Freight, Fuel, and Personnel Volume 
Transport Unit Amount
Freight t/d 550
Fuel L/d 300,000
Persons persons/wk 560

To meet the daily production requirements and provide sufficient surge capacity during
periods of peak demand, the rolling stock fleet will be as follows:

 12 off 140 t locomotives

 192 off 42 m3 bottom-discharge mill feed wagons
 12 off 50 t multi-purpose freight wagons
 6 off ISO fuel transport tanks wagons
 6 off ISO lime slurry transport wagons

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  6 off 60-seat personnel carriages
 2 off battery shunting wagons
 1 off rail maintenance vehicle
 6 off heavy-duty drop frame tri-axle rubber tired ISO-tank chassis.

The MTT rail system will have a maximum capacity of 210,000 t/d of mill feed.

FACILITIES, BUILDINGS, AND SERVICES

Facilities, buildings and services in the Mitchell Valley and Treaty Valley will include the
following:

 site access roads

 fuel receiving, storage, and dispensing
 sewage treatment
 medical buildings and ambulance stations
 administration offices
 consulting engineers’ and contractors’ offices and storage/laydown areas
 warehouses, cold storage, and maintenance buildings
 tuck maintenance and wash bay
 batch plants
 accommodation facilities including receptions, lunch rooms and cafeterias, mine
dry and wash cars, recreation facilities, kitchen, and parking areas
 potable water treatment
 potable, process, fire and fresh water systems
 container storage
 laydown and equipment and materials storage areas
 landfill
 waste management storage and handling and Incinerators
 security fencing and gates
 helipads
 explosives magazines and AN prill storage areas
 explosives manufacturing plant
 communication systems
 auxiliary truck and support vehicles
 electrical power supply and distribution.

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 Main Substation No. 1 will supply electrical power to plant and equipment in the Treaty
Valley and to Mitchell Substation No. 2. High, medium or low voltage systems will
distribute power to local loads. Over the LOM the peak electrical load is estimated to
total approximately 240 MW.

24.18.2 OFF‐SITE INFRASTRUCTURE 
ELECTRICAL POWER SUPPLY
Electrical power will be supplied from the 287 kV NTL transmission line that runs from
the Skeena Substation near Terrace, BC, to the substation near Bob Quinn Lake. KSM
will connect to the NTL transmission at the Treaty Creek Switching Station located
adjacent to Highway 37, approximately 18 km south of Bell II. A new 30 km long, 287 kV
tap line will connect this substation to the Main Treaty Substation No. 1.

ACCESS ROADS
The access roads to the Project site will be as follows:

 Eskay Creek Access Road

 CCAR
 TCAR
 Lower NTAR
 Upper NTAR
 Cut-off Ditch Access Road
 MTT Tunnel Adit Access Road
 Frank Mackie Winter Access Road.

LOGISTICS
Inbound equipment and materials will be transported either by barge to Stewart, BC, or
by rail to Terrace, BC, where these loads will be consolidated at local marshalling yards or
staging areas for onward transport by truck to KSM.

Copper concentrate will be transported by truck to a deep water port in Stewart, BC,
where it will be held in storage until loaded onto oceangoing vessels.

24.18.3 DEEP KERR PROJECT INFRASTRUCTURE 
ROAD AND LOGISTICS
Nearly all personnel and materials accessing to the Deep Kerr Mine will come via the MTT
tunnel system initiating in the Treaty Valley area. After exiting the MTT system in the
Mitchell Valley area, further connections via a series of roads developed for the overall
Project site will lead to the Deep Kerr surface complex area just outside of the Deep Kerr
portals.

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 All Deep Kerr mines are accessed through a series of shared portals and vent adits along
the northwestern base of Kerr Mountain, facing Sulphurets Creek. Mine access is
primarily through two of the intake portals, one of which directly connects to the footprint
area as a main ventilation intake drive, and the second which eventually parallels the
underground conveyor as a service drive towards the crusher area. These two primary
access ways to surface will be extended via ramps to the lower subsequent lifts.

UNDERGROUND CRUSHERS AND CONVEYORS

Each lift will have two, 60 inch x 89 inch gyratory crushers on the haulage level, which is
sufficient to support the peak production rate of 70 kt/d. Each crusher will have three
dumping points for rear dump articulated underground haul trucks. The crushers will
discharge to an incline conveyor system which connects to a 7 km common conveyor
system that transports mineralized material underground, under the Sulphurets Creek,
and up to the approximately 20 km MTT system which is shared by the entire Project
mine sites.

For Lift 1 only, a temporary jaw crusher facility is utilized for the early production years to
advance production initiation. In later years it can be used to support ongoing mine
development efforts.

Underground conveyors assume belts of 60-inch width moving at speeds ranging from
4.0 to 5.5 m/s. Conveyor modules are assumed to be suspended from drift backs with
chains. Conveyor inclinations do not exceed 15%.

UNDERGROUND MINE SERVICE WATER SYSTEM

Mine service water is supplied from the surface complex near the Deep Kerr portal area
and piped underground through a backbone to the main areas for each lift.

From this backbone, smaller pipelines will branch off to support mine development
headings, longhole drilling, shop activities, etc.

UNDERGROUND ELECTRICAL RETICULATION SYSTEM

Power to the mine will be sourced from a 115 kV substation located in the surface
complex near the Deep Kerr portal area. From here power will be distributed via two
separate 13.8 kV feeders for each lift to create a ring main style system .

WASTE STORAGE FACILITIES

About 5.5 Mt of waste rock will be generated during the initial mine development and
ramp-up, and brought to surface. The PEA mine plan assumes the NPAG portion of this
material will be used in construction of the pad for the surface complex located outside
of the portal areas (e.g. camps, shops, offices, warehouses, etc.), and the other material
will be hauled to the Mitchell RSF.

Waste rock generated after first production is assumed to be either diluted into the
production mill feed or hauled to the surface as needed.

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 WATER MANAGEMENT
The underground mine dewatering system (refer to Section 24.16.2 Mine Dewatering) is
discharged to the surface complex established outside of the Deep Kerr portal areas.
From here a water pumping system will transfer the water via pipeline to the main water
treatment dam and facility near the Mitchell valley area which will be established to
support all water treatment for the Project site.

SURFACE INFRASTRUCTURE
The PEA design assumes the support for the Deep Kerr operations will be integrated with
the overall Project site. This will include major equipment maintenance and fuel
provision.

Surface infrastructure required to support operations will include:

 equipment shop for major repairs

 explosives magazine
 warehouse
 water pump stations
 general mine offices
 control room and training center
 first-aid station and mine rescue room
 construction and operations camp
 mining contractor facilities
 change house
 instrumentation shop.

CAMPS AND ACCOMMODATION

The camp for Deep Kerr is assumed to be adjacent to the portal area and within the Deep
Kerr surface complex. The camp assumes approximately a 500 person capacity during
construction, which supports the day and night shift peak estimates of 250 people for
each shift for the initial preproduction period. As construction demand decreases, parts
of the camp will be reassigned to operations personnel and operations offices. During
operations, it is expected that the Deep Kerr camp will still accommodate about 200
persons for each shift to support full production.

UNDERGROUND INFRASTRUCTURE
Underground facilities at Deep Kerr would include on each lift:

 extraction level equipment shop

 haulage level equipment shop

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  warehouse
 fuel bay
 explosives magazine
 concrete / shotcrete slickline and loading system (for Lift 2 & Lift 3 only)
 sampling room
 refuges
 lunch rooms
 offices, map and meeting room, training room
 first-aid station
 comfort stations
 service water tanks.

Fire water tanks and fire suppression systems, primarily for crushers, conveyor transfers
and shops.

COMMENTS ON DEEP KERR INFRASTRUCTURE SECTION

Infrastructure requirements have been assessed at the PEA level to support underground
mining activities.

24.18.4 IRON CAP PROJECT INFRASTRUCTURE 
ROAD AND LOGISTICS
Personnel, material, and supplies will access the Iron Cap mine through a ramp driven
from the Mitchell access ramp (assuming that the Mitchell block cave mine is developed
first).

Multiple drifts have been designed that can act as an emergency egress. The primary
emergency egress will be the train tunnel or access tunnel, whichever is accessible. If
both tunnels are inaccessible, it will be possible to exit the mine through one of the fresh
air drifts.

UNDERGROUND CRUSHERS AND CONVEYORS

The Iron Cap deposit will be able to generate 40,000 t/d of mill feed. The mill feed will
be hauled by LHD directly from the drawpoints to a mill feed pass near the center of the
footprint and on every extraction drift. To maintain trafficability, a 0.3 m thick reinforced
concrete sill will be installed on the extraction level. A rock breaker will be located above
each mill-feed pass and two passes will feed one chute on the haulage level below. Fifty-
five tonne haul trucks will load from the chutes and haul the mill feed to a gyratory
crusher. The crusher will have two dumping points for rear dump articulated
underground haul trucks.

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 The crushed material will be transported by a 730 m long, 1.22 m wide conveyor belt
which inclines at 12% to the top of a 65 m high, 2,000 t surge bin located above the Iron
Cap-MTT train tunnel. From there it is fed into the main MTT train and transported to the
Treaty OPC.

UNDERGROUND MINE SERVICE WATER SYSTEM

The mine will require 30 m3/h of process water for the bolters and the development and
production drills. In addition, it is estimated that 50 m3/h of water will be required by the
conveyor fire suppression systems. This water will be supplied through the main access
ramp from the Mitchell ramp which is fed from the main Mitchell portal area by pumps.
The water will be delivered to the working face through steel pipes.

UNDERGROUND ELECTRICAL RETICULATION SYSTEM

The Iron Cap mine will require approximately 5 MWh of electricity at peak operation. The
main contributors to this demand are the crushers, ventilation fans and conveyor belts.

The main power will be supplied to the underground from the Mitchell substation through
a 25 kV cable hung from the back of the access ramp and MTT train tunnel to create a
ring main style system. Each of the main levels will have a 25 kV line which will be
stepped down to the required voltage by skid mounted dry-type transformers. Equipment
that draws larger loads (e.g., ventilation fans, conveyors and crushers) will be equipped
with a permanent transformer.

WASTE STORAGE FACILITIES

About 2.2 Mt of waste rock will be generated during the initial mine development and
ramp up and hauled to surface by truck. Waste rock generated after first mill-feed
production will be trucked to one of the crushers and diluted into the mill-feed stream.
The majority of the mine development at Iron Cap will be in mineralized rock above NSR
cut-off. The quantity below the NSR cut-off is sufficiently small relative to the production
of the overall KSM site that, if mixed with the production mill feed, it will have minimal
impact on the overall mill-feed grade. Separating the waste from the mill feed stream is
not practical for the proposed mine since it would require duplication of material handling
infrastructure and significant additional cost.

WATER MANAGEMENT
The underground mine dewatering system (refer to 24.16 Mine Dewatering) is
discharged into the Mitchell North Pit Wall Depressurization Tunnel via graded drifts that
allow for water to drain by gravity. From there, it will flow to the main Mitchell Water
Storage Facility. Pumps are not required to dewater Iron Cap.

SURFACE INFRASTRUCTURE
The PEA design assumes the support for the Iron Cap operations will be integrated with
the overall Project site and in particular, the nearby Mitchell block cave mine. This will
include major equipment maintenance and fuel provision.

Surface infrastructure required to support operations will include:

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  equipment shop for major repairs
 explosives magazine
 warehouse
 water pump stations
 general mine offices
 control room and training center
 first aid station and mine rescue room
 construction and operations camp
 mining contractor facilities
 change house
 instrumentation shop.

CAMPS AND ACCOMMODATION

The camp for Iron Cap is assumed to be adjacent to the Mitchell portal area and within
the Mitchell OPC.

UNDERGROUND INFRASTRUCTURE
Underground facilities at Iron Cap would include:

 equipment shop
 warehouse
 fuel bay
 explosives magazines
 sampling room
 refuge stations (fixed and portable)
 lunch rooms
 offices, map and meeting room, training room
 first-aid station
 water tanks

Fire water tanks and fire suppression systems, primarily for crushers, conveyor transfers
and shops.

COMMENTS ON IRON CAP INFRASTRUCTURE

Infrastructure requirements have been assessed at the PEA level to support underground
mining activities.

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24.18.5 MITCHELL PROJECT INFRASTRUCTURE 
ROAD AND LOGISTICS
Personnel, material, and supplies will access the underground through a main access
ramp which will be developed from a portal near the Mitchell OPC area at the 820 m
elevation.

The Mitchell design has multiple raises and drifts that can act as an emergency egress.
The primary emergency egress will be the access tunnel or conveyor tunnel, whichever is
accessible. If both tunnels are inaccessible, it will be possible to exit the mine through
one of the fresh air shafts; however, the fan in the shaft will have to be shut off because,
during normal operations, the wind speed will be too high for personnel entry.

UNDERGROUND CRUSHERS AND CONVEYORS

It is estimated that the Mitchell deposit will be able to generate 60,000 t/d of mill feed.
The mineralized material will be hauled from the drawpoint to one of three mill feed
passes in the same extraction drift. The mill feed pass will be 4 m in diameter and
equipped with a 1 m by 1 m grizzly. These mill feed passes are equipped with a chute
that will feed haulage trucks on the haulage level. Fifty-five tonne haul trucks will load
from the orepass chutes and haul the mill-feed to one of two gyratory crushers, where it
will be crushed.

The crushed material will be transported to surface by a 4.3 km long, 1.22 m wide
conveyor belt which inclines at 20% to the top of a 30 m high, 1,000 t surge bin located
above the MTT train tunnel. From there it will be transported to the Treaty OPC.

UNDERGROUND MINE SERVICE WATER SYSTEM

It is estimated that the mine will require 30 m3/h of process water for the bolters and the
development and production drills. In addition, it is estimated that 114 m3/h of water
will be required by the conveyor fire suppression systems. This water will be supplied
through the main access decline by gravity. The water will be delivered to the working
face through steel pipes.

UNDERGROUND ELECTRICAL RETICULATION SYSTEM

It is estimated that the Mitchell mine will require approximately 20 MWh of electricity at
peak operation. The main contributors to this total are the crushers, conveyor belts,
ventilation fans and mine dewatering pumps.

The mine dewatering system requires an average of 4 MWh with a maximum of 30 MWh
during a peak storm event, which is greater than the power requirements of the mine
under normal conditions. The strategy during a peak storm event will be to shut down or
reduce operations in the underground mine along with other site facilities when the high-
powered pumps are required. This will allow power to be diverted from normal
operations to power the pumps.

The main power will be supplied to the underground from the Mitchell substation through
a 25 kV cable hung from the back of the access ramp and conveyor tunnel to create a

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 ring main style system. Each of the main levels will have a 25 kV line which will be
stepped down to the required voltage by skid mounted dry-type transformers. Equipment
that draws larger loads (e.g., ventilation fans, conveyors and crushers) will be equipped
with a permanent transformer.

WASTE STORAGE FACILITIES

About 4.3 Mt of waste rock will be generated during the initial mine development and
ramp up and hauled to surface by truck. Waste rock generated after first mill-feed
production will be trucked to one of the crushers and diluted into the mill-feed stream.
The majority of the mine development at Mitchell will be in mineralized rock above NSR
cut-off. The quantity below the NSR cut-off is small enough relative to the production of
the overall KSM site that, if mixed with the production material, will have minimal impact
on the overall mill-feed grade. Separating the waste from the mill feed stream is not
practical for the proposed mine since it would require duplication of material handling
infrastructure and significant additional cost.

WATER MANAGEMENT
The underground mine dewatering system (refer to Section24.16.4 Mine Dewatering)
allows for water to be pumped to the HDS WTP and then to the WSF.

SURFACE INFRASTRUCTURE
The PEA design assumes the support for the Mitchell operations will be integrated with
the overall Project site. This will include major equipment maintenance and fuel
provision.

Surface infrastructure required to support operations will include:

 equipment shop for major repairs

 explosives magazine
 warehouse
 water pump stations
 general mine offices
 control room and training center
 first-aid station and mine rescue room
 construction and operations camp
 mining contractor facilities
 change house
 instrumentation shop.

CAMPS AND ACCOMMODATION

The camp for Mitchell is assumed to be adjacent to the Mitchell portal area and within
the Mitchell OPC.

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 UNDERGROUND INFRASTRUCTURE
Underground facilities at Mitchell would include:

 equipment shop
 warehouse
 fuel bay
 explosives magazines
 sampling room
 refuge stations (fixed and portable)
 lunch rooms
 offices, map and meeting room, training room
 first-aid station
 water tanks.

Fire water tanks and fire suppression systems, primarily for crushers, conveyor transfers
and shops.

COMMENTS ON MITCHELL PROJECT INFRASTRUCTURE

Infrastructure requirements have been assessed at the PEA level to support underground
mining activities

24.19 MARKET STUDIES AND CONTRACTS 
Seabridge engaged NSA to provide an opinion report on marketing inputs for the 2016
PFS and PEA. The information and options in this section come from NSA (2016). All
currency amounts used in this section are in US dollars, unless otherwise specified.

24.19.1 COPPER CONCENTRATE 
MARKETABILITY
When considering the marketability of copper concentrates, quality and quantity are
determining factors. There is considerable variation in the quality of concentrates and
the requirements of various smelters do vary; such variation relates to the technical
abilities of the smelter and its overall concentrate feed and blend.

Ideally, smelters prefer to blend their feed with approximately 30% copper and similar
amounts of iron and sulphur. In the last several years, however, the grade of some of the
major high-grade suppliers has been dropping. At the same time, many new suppliers
tend to blend copper-gold concentrates with copper content in the low to mid 20% range.
Consequently, the market has seen the blend for most smelters drop to a copper level of
27 to 28%. Apart from the level of copper, iron, and sulphur, other key elements in

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 determining concentrate salability include the levels of gold and silver content, as well as
any impurities.

Based on the impurity levels projected for the Mitchell and Iron Cap deposits,
concentrates from the Project are relatively clean. Depending on the market situation at
the time of contract negotiations, penalties will likely be minimal, if at all applicable.
Some smelters, such as in Japan, South Korea, and Europe, are expected to have more
interest in copper concentrates with high gold content. Preliminary minor element assays
of the final bulk concentrates for Kerr indicate concentrations of arsenic and antimony
may be near or above typical smelter penalty limits. For the Deep Kerr samples, mercury
in the bulk concentrate may also be above smelter penalty limits. This may be mitigated
by blending and reviewed in more advanced studies.

SMELTING TERMS
Copper Concentrate Smelting Market
Copper concentrates account for approximately four-fifths of total newly-mined copper
production, with the balance of output coming from solvent extraction and electrowinning
copper cathode and other copper-bearing by-products.

Concentrate supply started to increase over 2013 and is expected to continue to

increase towards the end of this decade as a result of new projects and announced
expansions of operational mines.

A significant portion of copper concentrate is processed by integrated smelters—captive

plants that are vertically integrated with mines through ownership. However, an
increasing annual volume of global copper concentrate is treated by custom smelters
that generally are not integrated, although there is, in many cases, investment ownership
in mines. Custom smelters have increased their overall smelting market share from 30%
in 1980 to approximately 50% today.

Over the last two decades there has been a significant expansion of smelting and refining
capacity, particularly in India and China. The Chinese smelting industry has increased
imports, as limited domestic mine capacity could not meet demand. This trend has been
a key determinant in world concentrate supply/demand balances.

The copper concentrate market has seen significant structural imbalances in the recent
years between mine production and smelting capacities. Over the last couple of years
there have been significant increases in smelter TCs/RCs. The balance of supply and
demand for concentrates is set by the whole of the concentrate output of the mining
industry and by the availability of capacity across the smelting industry. The availability of
custom concentrates, relative to smelting capacity, should, in theory, be the ultimate
determinant of terms for custom treatment of concentrates.

COPPER CONCENTRATES CONTRACTS AND TERMS

The concentrate market is basically split into two types of contracts. First, there are long-
term off-take contracts between mines and smelters that reflect, in general, the annual
concentrate supply and demand balance. Second, there is spot or short-term business

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 primarily between mines and traders and, on a much smaller scale, between mines and
smelters. By its nature, such business is much more volatile and there is considerable
variation in spot TCs/RCs, not only annually, but over each year.

Current and Future Terms

NSA suggests that annual benchmark numbers are beginning to reflect a move towards
sustainable long-term numbers. NSA believes that the most likely scenario is that
ultimately charges have to move up towards a level that is economic for the smelting
industry over the long term. The benchmark numbers for the last several years are
shown in Table 24.17

Table 24.17  Benchmark Smelting Terms 
2016 2015 2014 2013 2012
Copper Treatment Charges ($/dmt) 97.50 107.00 92.00 70.00 63.50
Copper Refining Charges ($/lb) 0.0975 0.1070 0.0920 0.0700 0.0635

For comparison, the recent spot market of April 2016 indicates sales into the Chinese
market where the levels of TCs/RCs were between $90 and $95/dmt of concentrate and
$0.090 and $0.095/lb of copper, respectively.

Over approximately 20 years (up to 2005), historical TCs/RCs averaged approximately

$77/dmt and $0.077/lb (including approximately $0.01 of participation for these
purposes, split between the treatment charge and the copper refining charge) at an
average price of $0.93/lb of refined copper.

The general view today does not see price participation materializing in the near future;
however, it should not be ignored. Historically, when price participation first became a
factor in concentrate negotiations it was only applicable at a price level higher than the
price existing at the time of negotiation.

NSA suggests that the annual benchmark terms realized over the last couple of years are
likely to be a guide to future levels. With this in mind, and for purposes of this study, the
assumption should be a copper treatment charge of $100/dmt, with copper refining
charges of $0.10/lb of copper.

TCs/RCs are not the only terms that are used in valuing copper concentrates. Payments
and deductions are a matter of negotiation and will vary with many factors, including
supply and demand, and custom individual markets.

The following terms are an indication of “standard” long-term smelter charges, including
suggested TC/RC terms. Delivery is on the basis of CIF-FO smelter ports (the mine pays
all costs up to delivery port and the buyer arranges and pays for cargo discharge).

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 Payable Metals
Copper Pay 96.5% with a minimum deduction of 1 unit (amount deducted has to
equate to a minimum of 1% of the agreed concentrate copper assay).

Silver If over 30 g/dmt pay 90%.

Gold A scale is applicable with some variations of the following:

 less than 1 g/dmt, no payment

 1 to 3 g/dmt, pay 90%
 3 to 5 g/dmt, pay 93%
 5 to 7 g/dmt, pay 95%
 7 to 10 g/dmt, pay 96.5%
 10 to 20 g/dmt, pay 97%
 over 20 g/dmt pay 97.5%
 over 30 g/dmt pay 97.75%.

Gold and silver payments may vary between smelter locations. In China, high gold in
copper concentrates is not generally desired; relating more to internal pricing issues
rather than technical concerns. Technically, the more modern smelting facilities are able
to accept payment formulas similar to Japan and South Korea, but for many of the older
smelters in North China, this is not the case. In Europe, with grades of over 40 g of gold
content, payment of 97.75% with a minimum deduction of 1 g is likely to apply.

Refining Charges
Copper $0.10/lb payable copper

Gold $6.00 to $8.00/oz payable gold

Silver $0.50/oz payable silver

Treatment Charges
Treatment Charge $100.00/dmt CIF-FO main smelter port.

Price Participation
Not applicable at present.

Penalties
Arsenic: $2.50 to $3.00 per 0.1% over 0.1% up to 0.5% arsenic

Antimony: $3.00 to $4.00 per 0.1% over 0.1% antimony

Lead: $2.00 to $3.00 per 1% over 0.5% to 1.0% lead

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 Zinc: $2.00 to $3.00 per 1% over 2% to 3% zinc

Mercury: $2.00 per each 10 ppm over 10 ppm mercury

Bismuth: $3.00 to $5.00 per 0.01% over 0.03 to 0.05% bismuth

Selenium: $3.00 to $5.00 per 0.01% over 0.05% selenium

Tellurium: $4.00 to $5.00 per 0.01% over 0.02% to 0.03% tellurium

Fluorine $1.00 to $2.00 per 100 ppm over 300 ppm fluorine

Chlorine $1.00 to $3.00 per 100 ppm over 300 ppm chlorine.

Furthermore, penalties may also vary from smelter to smelter. It should be noted that for
the elements where a percentage range is used, this relates to ranges of penalty
thresholds that are negotiated. The penalties noted in this section are generally in line
with levels applicable over recent years, but there is a tendency towards higher levels.

Based on the anticipated impurity levels derived from the test results by Tetra Tech (as
presented in section 24.17), the concentrates from the Project are relatively clean, and
depending on the market situation at the time of contract negotiations, penalties will
likely be minimal if at all applicable. As most of the mill feeds will be the blended
materials from different deposits and spatial locations, the blend should effectively
mitigate penalty elements rising for the mill feed from some limit locations.

Payment
A provisional 90% is paid three to 15 days after vessel arrival in Asia and India. Sales
into Europe normally involve later payment, possibly more than 30 days after arrival. The
10% balance is paid when all facts are known.

Other Off-site Costs

Various indirect costs other than smelter charges include:

 losses
 insurance
 supervision, assaying and umpire costs
 marketing
 ocean freight.

24.20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT 
The Project successfully underwent a joint federal provincial harmonized environmental
assessment. Both governments conducted the EA cooperatively, in accordance with the
principles of the Canada-BC Agreement on Environmental Assessment Cooperation

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 (Cooperation Agreement 2004). In July 2013, Seabridge submitted the Application/EIS
(Rescan 2013) under the BCEAA (2002) in accordance with the approved project AIR to
the BCEAO. The Application/EIS was approved and EA Certificate #M14-01 for the
Project was issued on July 29, 2014. Federally, the Project was subject to a
comprehensive study level of assessment under the CEAA (1992) because the proposed
daily mill feed of 130,000 t/d exceeds two thresholds set out in the CEAA (1992)
Comprehensive Study List Regulations; specifically, the 4,000 t/d threshold for metal
mills, and the 600 t/d production threshold for gold mines. Certain dam structures
proposed for the Project also exceed the 10,000,000 m3/a threshold for water
diversions.

The Project was deemed to require a “comprehensive study” in July 2009 and a “notice
of commencement of an environment assessment” was submitted to Seabridge. The
terms or the scope of assessment was developed and posted by CEAA for public
comment in late May 2010. With the CEAA (2010) amendment, the terms of reference
was subsequently re-posted for public comment by the CEA Agency in July 2010. The
draft KSM Project Comprehensive Study Report was subsequently issued by the CEA
Agency in July 2014. The Project Comprehensive Study Report, along with filed public
comments from the NLG, other Aboriginal groups, and the public, were considered by the
Minister of the Environment when making her final EA decision. The Project received
federal approval on December 19, 2014. Further details on the
environmental/permitting regime may be found in Section 20.0 of the PFS.

The PEA which incorporates the inclusion of Deep Kerr, involves the same environmental
issues as the PFS project which successfully received its environmental approvals in
2014 and is outlined in the PFS. The PEA project, is situated in exactly the same
geographical area, has the same environmental characteristics and will involve similar
disturbances required to develop infrastructure and the mine as was previously assessed
and approved.

Based on this comparison, and upon completion and evaluation of additional technical
studies required to support the inclusion of Deep Kerr material into the mine plan and to
identify and examine the net environmental benefit of proposed project changes, it is
anticipated that the PEA would be approved to operate by the appropriate regulatory
authorities. This regulatory approval would be forthcoming only after the appropriate
conversations and information sharing has occurred with the Nisga’a Nation and First
Nations whom have an interest in the Project.

Potential project changes resulting in an overall net environmental benefit associated

with the Project include the following items:

 a reduction in the number and size of proposed open pit mines

 an increased reliance of underground block cave mines with a subsequent
smaller surface disturbance
 a reduction of the proposed tonnage of waste rock from 3 Bt to 0.6 Bt
 a potential reduction in the volume of water requiring treatment from the WSF

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  a reduction in the overall footprint of the Project.

Additional details on the environmental setting and studies relevant to this PEA may be
found in Section 20.0 of the 2016 PFS.

The closure plan costs outlined in the PFS (Section 20.7) have been updated to reflect
the proposed mine plan changes outlined in the PEA. As a result of these changes, the
overall estimated closure costs including water treatment costs, have been reduced
resulting from smaller surface disturbance footprints associated with underground block
cave mines and a smaller RSF requiring long-term care and maintenance.

Seabridge has developed long term respectful relationships with the Nisga’a Nation and
the four other First Nations groups whom are potentially influenced by the Project, over
the past eight years of project development and especially during the recently completed
environmental assessment process for the Project (Section 20.0). These relationships,
including the requirements contained within the Benefits Agreement signed with the
Nisga’a Nation in June 2014 and the Sustainability Agreement negotiated with the
Gitanyow Wilps, also signed in June 2014 respectively, would remain in good standing
and the agreements would continue to be adhered to by the Project operating company
as the proposed mine plan outlined in the PEA is implemented.

24.21 CAPITAL AND OPERATING COSTS 
The capital cost estimate is the product of engineering developed during the 2016 PFS
and the conceptual level analyses done for the PEA. The unit rates used for the
estimates (labour, power, fuel and other consumables) are the same for both studies.
Amec Foster Wheeler and Golder used well established internal benchmarks to develop,
check capital and operating costs to verify reasonableness of cost levels. These
benchmarks are internal to each company.

The capital cost estimates were produced by the consulting firms named in the Table
24.18 with the area of responsibility for each firm identified.

Table 24.18  Capital Cost Estimate Responsibilities by Firm 
Capital Cost Area Firm Responsible
Mine site (open pit infrastructure and capitalised operating costs), Amec Foster Wheeler
process plant, on-site infrastructure, off-site infrastructure, permanent
electrical power supply and energy recovery, Underground mine
development; underground mining equipment; dewatering; ventilation
and services; underground mine infrastructure; underground material
handling (Deep Kerr block cave), construction indirects, spares, initial
fills, freight and logistics, commissioning and start-up, EPCM, vendor's
assistance, owner's cost (except for Mitchell and Iron Cap block cave)
TMF, water management and water treatment Quantities by KCB with
costing by Amec Foster
Wheeler
table continues…

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 Capital Cost Area Firm Responsible
Underground mine development; underground mining equipment; Golder
dewatering; ventilation and services; underground mine infrastructure;
underground material handling (Mitchell and Iron Cap block cave)

24.21.1 CAPITAL COST ESTIMATES 
This PEA level estimate includes:

 direct field costs of executing the Project including mining, construction,

installation and commissioning of all structures, utilities, materials, and
equipment
 indirect costs associated with design, mining, construction and commissioning
 provisions for contingency

See Table 24.19 for summary of the PEA capital cost estimate, summarized by activity.

Table 24.19  PEA Capital Cost Estimate Summary in US$M 
Area Initial Sustaining Total
Direct Costs
Mine Site 1,272 6,827 8,100
Process 1,447 164 1,611
TMF 509 539 1,047
Environmental2 15 15
On-site Infrastructure3 23 0 23
Off-site Infrastructure 120 11 131
Permanent Electrical Power Supply and Energy Recovery 167 196 364
Total Direct Costs 3,553 7,737 11,290
Indirect Costs
Construction Indirects 462 688 1,150
Spares 35 19 54
Initial Fills 20 0 20
Freight & Logistics 64 216 281
Commissioning and Start up 6 19 26
EPCM 245 64 309
Vendor's Assistance 15 26 41
Total Indirect Costs 848 1,033 1,880
Owner's Costs 161 0 161
Contingency 927 1,248 2,175
Total Cost 5,489 10,018 15,507
Notes: 1Sums may not add due to rounding, PST not included in table please see section 24.22 for details
2All
costs associated with closure cost are included in separate estimate presented below
3Most of sustaining on-site infrastructure is included in mine site category

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 BASIS OF ESTIMATE
This estimate falls under the AACE® Class 5 Estimate classification and its accuracy is
expected to be within -30% to +50% of final project cost.

Initial capital cost is defined as all costs associated with development of the operation
until first ore in Year 1. It includes Mine Site, processing facility, TMF, environmental
infrastructure, on-site/off site infrastructure and power supply.

INDIRECT COSTS AND CONTINGENCY

Allowances were made for indirect costs based on first principle calculations, in-house
data, or project parameters.

Contingency has been applied based on a deterministic approach, based on historical

studies. The amount of contingency applied differs depending on the cost area of the
estimate. Most of the new areas designed for the PEA are using 30% of the direct and
indirect costs. Areas where the design is the same as the PFS, a lower contingency factor
was applied. The overall contingency factor for the initial capital is estimated at 24%
(calculated as a percentage of direct and indirect cost minus capitalised operating costs
and environmental bonding).

OWNER (CORPORATE) CAPITAL COSTS

Given the similar nature of the first years of the Project life, the Owner’s cost are
assumed to be the same as in the PFS.

SUSTAINING CAPITAL
Sustaining capital costs are capital costs incurred after the Project has commenced
operations. Two types of capital cost are included in the sustaining capital.

Type one: items required either to replace worn-out or exhausted assets or to support
planned growth of the mine that does not increase production capacity. Projects that
improve operational efficiency, safety, or decrease costs are usually considered
sustaining capital.

Type two: development of new deposits that will maintain the throughput of the
operation. Is included in sustaining capital, the development of Deep Kerr, Mitchell and
Iron Cap block cave operations. This explains why mine site sustaining capital is higher
than initial.

Closure costs are estimated at US$540 million. This number is derived from the PFS
estimate and adjusted to reflect smaller RSF size. They include bond reclamation for
disturbance, TMF north cell reclamation, sinking fund payments and SUPs.

24.21.2 OPERATING COST ESTIMATES 
The operating cost estimate is the product of engineering developed during the 2016
PFS and the conceptual level analyses done for the PEA. The unit rates used for the
estimates (labour, power, fuel and other consumables) are the same for both studies.

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 The PEA operating cost estimates were produced by consulting firms named in Table
24.20 with the area of responsibility for each firm identified.

Table 24.20  Operating Cost Estimate Responsibilities by Firm 
Operating Cost Area Firm Responsible
Open pit mining, underground mining (Deep Kerr), processing, G&A, Amec Foster Wheeler
site services, provincial sales taxes
Tailing storage/handling, water management/treatment, energy Quantities by KCB, Costing
recovery by Amec Foster Wheeler
Underground mining (Mitchell and Iron Cap) Golder

BASIS OF ESTIMATE
Operating costs detailed in the PEA were derived from a variety of sources including, but
not limited to, benchmarking analysis, derivation from first principles, and factoring from
costs in the 2016 PFS where possible.

The operating cost estimate is considered to have a level of accuracy of –25% to +35%.
Overall assumptions for operating costs:

 Costs are presented in 2016 US dollars, unless stated otherwise. When

required, certain costs in this report have been converted using a fixed currency
exchange rate of Cdn$1.00 to US$0.80.
 The costs per tonne of material treated (US$/t) provided in this report are the
average costs over the LOM.

A summary of the average operating costs onsite for the PEA is estimated at US$11.61/t
details are presented in Table 24.21.

Table 24.21  Average Onsite Operating Costs for PEA 
Cost Cost
Operating Costs On Site
(US$/dmt milled) (LOM US$ million)
Mining Cost 4.47 10,648
Process Cost 5.19 12,361
G&A 0.86 2,044
Site services 0.41 965
Tailings Storage/Handling 0.12 285
Water Management/Treatment 0.56 1,342
Energy Recovery (0.10) (243)
Provincial Sale Tax 0.10 233
Operating Costs On Site/dmt milled 11.61 27,636

The operating costs are LOM average unit costs calculated by total LOM operating costs
divided by LOM milled tonnages. The costs exclude mine pre-production costs.

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 OPEN PIT MINE OPERATING COSTS
Open pit operating cost were estimated using an Excel® based cost model utilizing first
principle build up for the haulage costs and benchmarking from a similar study for all
other cost areas. The most significant components of the operating costs are fuel and
labour. The average cost for the LOM open pit mining is 2.60 US$ per tonne milled; open
pit mining represents 22% of the mill feed source.

UNDERGROUND MINE OPERATING COSTS

The major components of the underground mining cost are labour and mobile equipment
maintenance. Operating costs include the following indirect costs:

 mine management, supervision, Technical Team, Owner’s Team

 electrical power
 propane for heating
 camp and catering
 rotational travel
 mine rehab allowance
 fixed plant maintenance
 PPE and workshop allowance.

Underground mining costs were estimated for each block cave operation using similar
methodology as used for the capital cost estimate. The LOM cost per tonne milled vary
between $5.68 (Iron Cap), $5.15 (Mitchell) and $4.78 (Deep Kerr). The LOM
underground mining cost per tonne is estimated at $5.01: underground mining
represents 78% of the mill feed source.

PROCESS OPERATING COSTS

The most significant process costs are reagents, steel consumables, and power. Minor
cost include labour, maintenance parts and assaying.

Reagent costs were based on testwork and are comparable to the 2016 PFS or in some
cases slightly higher. Steel consumables and power costs are derived from the 2016
PFS but with verification to ensure that these are appropriate for the PEA. Labour costs
are based on a manpower list to reflect the PEA plant design while utilizing the same unit
labour costs as the 2016 PFS. Assaying costs use the same unit rates as the 2016 PFS.

The costs are based on a 170,000 t/d basis. As annual tonnage decreases, the annual
cost for reagents, steel consumables and power decreases in step. However for the
minor cost components, the annual costs decrease more conservatively to reflect the
requirement for minimum manpower in plant operations and other constraints.

Process costs are also specific to each deposit, responding to differences in reagent,
power and steel consumption. The annual cost typically reflects the proportional

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 influence of each source of mill feed in the financial model. These typical costs reflect
both concentration paths – flotation and cyanidation for each of the mineral deposits.

Tunnel and material handling cost are also included in the process operating cost, they
represent US$0.24/dmt of the overall process cost. The LOM average process cost is
US$5.19/dmt.

GENERAL AND ADMINISTRATIVE OPERATING COSTS

G&A costs used in the PEA were derived through factoring of costs from other similar
operations considering the relevant economies of scale. G&A cost is averaging
US$0.86/t milled over the LOM.

INFRASTRUCTURE OPERATING COSTS

Infrastructure operating costs are divided into four categories: site services, tailings
storage and handling, water management, and energy recovery. Provincial sales taxes
are covered in Section 24.22.

Site services cost are estimated at US$0.41/dmt. They were derived from the previous
and current studies and include the following elements:

 personnel – general site services human power

 site mobile equipment and light vehicle operations
 portable water and waste management
 general maintenance including yards, roads, fences, and building maintenance
 off-site operation expense
 building heating
 power supply
 avalanche control.

Tailings storage and handling cost are estimated at US$0.12/t milled. They were derived
from the previous and current studies.

Water management costs are estimated at US$0.56/dmt and were derived from
previous and current studies and adjusted to reflect the PEA requirements. They include
the following operating costs:

 mine site water management (pumping)

 HDS WTP
 selenium water treatment

Water treatment plant operating costs were lowered by 15% from PFS costs to reflect
expected smaller quantities of water to be treated in the PEA scenario.

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24.21.3 COMMENTS ON SECTION 21 
The capital costs estimate for this PEA corresponds to a Type 5 study and have an
accuracy of -30% to +50%. The operating cost estimate is considered to have a level of
accuracy of –25% to +35%.

The Project initial capital cost estimate is US$5.5 billion before PST.

On-site operating costs over the LOM are estimated at US$27.6 billion, and averages
US$11.61/dmt milled over the LOM.

24.22 ECONOMIC ANALYSIS 
The results of the economic analysis in the PEA represents forward-looking information
that is subject to a number of known and unknown risks, uncertainties and other factors
that may cause actual results to differ materially from those presented here. Forward-
looking statements in PEA section of this Report include, but are not limited to, timing
and amount of future cash flows from mining operations, forecast production rates and
amounts of copper, gold, and silver produced from the KSM mining operation,
estimation of the Mineral Resources and the realization of the Mineral Resource
estimates within the PEA mine plans, the time required to develop the Project based on
the PEA mine design, statements with respect to future price of copper, gold and silver,
currency exchange rate between the US dollars and Canadian dollars, assumptions
regarding mine dilution and losses, the expected grade of the material delivered to the
mill, metallurgical recovery rates, initial capital and sustaining capital costs, as well as
mine closure costs and reclamation, timing and conditions of permits required to initiate
mine construction, maintain mining activities, and mine closure, and assumptions
regarding geotechnical and hydrogeological factors.

The reader is cautioned that the actual mine results of mining operations may vary from
what is forecast. Risks to forward-looking information include, but are not limited to,
unexpected variations in grade or geological continuity, as well as geotechnical and
hydrogeological assumptions that are used in the mine designs. There could be seismic
or water management events during the construction, operations, closure, and post-
closure periods, that could affect predicted mine production, timing of the production,
costs of future production, capital expenditures, future operating costs, permitting time
lines, potential delays in the issuance of permits, or changes to existing permits, as well
as requirements for additional capital. The plant, equipment or metallurgical or mining
processes may fail to operate as anticipated. There may be changes to government
regulation of mining operations, environmental issues, permitting requirements, and
social risks, or unrecognized environmental, permitting and social risks, closure costs
and closure requirements, unanticipated reclamation expenses, title disputes or claims
and limitations on insurance coverage.

A portion of the Mineral Resources in the mine plans, production schedules, and cash
flows include 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, and there is no certainty that the PEA will be realized.

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 Due to the conceptual nature of the PEA, none of the Mineral Resources in the PEA have
been converted to Mineral Reserves and therefore do not have demonstrated economic
viability.

24.22.1 METHODOLOGY USED 
The Project has been evaluated using a discounted cash flow (DCF) analysis. Cash
inflows consist of annual revenue projections for the mine. Cash outflows such as
capital, including the six years of pre-production costs, operating costs, taxes, and
royalties are subtracted from the inflows to arrive at the annual cash flow projections.
Cash flows are taken to occur at the end of each period.

To reflect the time value of money, annual net cash flow (NCF) projections are discounted
back to the Project valuation date using several discount rates. The discount rate
appropriate to a specific project depends on many factors, including the type of
commodity; and the level of Project risks, such as market risk, technical risk and political
risk. The discounted, present values of the cash flows are summed to arrive at the
Project’s NPV.

In addition to NPV, IRR and payback period are also calculated. The IRR is defined as the
discount rate that results in an NPV equal to zero. Payback is calculated as the time
require to achieve positive cumulative cash flow for the Project.

24.22.2 FINANCIAL MODEL PARAMETERS 
BASIS OF ANALYSIS
The financial analysis was based on the Mineral Resources presented in Section 14, the
mine and process plan and assumptions detailed in Sections 24.16 and 24.17, the
projected infrastructure requirements outlined in Section 24.18, the doré and
concentrate marketing assumptions in Section 24.19, the permitting, social and
environmental regime discussions in Section 24.20, and the capital and operating cost
estimates detailed in Section 24.21.

METAL PRICING
Base Case economic evaluation was undertaken incorporating historical three-year
trailing averages for metal prices as of July 31, 2016. Two alternate cases were
constructed: (i) a Recent Spot Case incorporating recent spot prices for gold, copper,
silver and the US$/Cdn$ exchange rate; and (ii) an Alternate Case that incorporates
higher metal prices to demonstrate the Project’s sensitivity to rising prices. Metal prices
of each scenario are presented in Table 24.22.

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 Table 24.22  Metal Price Assumptions in PEA 
Metal Prices: Base Case Recent Spot Alternate
Gold (US$/oz) 1,230 1,350 1,500
Copper (US$/lb) 2.75 2.2 3
Silver (US$/oz) 17.75 20 25
US$/Cdn$ Exchange Rate 0.8 0.77 0.8

TRANSPORT COSTS
Doré
Doré transport and insurance costs are expected to average US$1.25 per ounce of doré
produced.

Copper Concentrate
The transport costs for concentrate including trucking to port, port cost, ocean freight and
representation, is expected to be about US$86.19 per wet metric tonne.

WORKING CAPITAL
Working capital cash outflow and inflows are included in the financial model. The
calculations are based on the assumptions that accounts payable will be paid within 30
days and accounts receivable within 60 days. The impact of the working capital on NPV
5% is approximately US$148 million.

ROYALTIES
The only royalty included in the financial model is a royalty of 1% of the NSR payable to
Barrick Gold Corp., capped at US$3.6 million, with a predetermined buyout option. The
full amount of the buyout option is paid in Year 1 in the financial model.

TAXES
Canadian Federal and BC Provincial Income Tax Regime
The federal and BC provincial corporate income taxes are calculated using the currently
enacted rates of 15% for federal and 11% for BC. For both federal and provincial income
tax purposes, capital expenditures are accumulated in tax pools that can be deducted
against mine income at different prescribed rates, depending on the type of capital
expenditures.

Historically, pre-production mining expenditures are accumulated in the Canadian

Exploration Expense (CEE) pool. The CEE pool is generally amortized at 100%, to the
extent of taxable income from the mine. A phase-out rule was enacted in 2013 to phase
out the treatment of preproduction mine development expenses as CEE to Canadian
Development Expense (CDE) from 2015 to 2017. Effective 2017, all the pre-production
mine development expenses are treated as CDE.

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 In addition to pre-production mine development expenses (that are reclassified as CDE
due to the phase-out rule), Canadian resource property acquisition costs and the costs of
mine shafts, main haulage ways, and other underground workings are considered CDE
and are accumulated in the CDE pool. The KSM Financial Model treats all such expenses
as CDE.

Fixed assets acquired for the mine are accumulated in an undepreciated capital cost
pool (Class 41) and are generally amortized at 25% on a declining balance basis. Certain
fixed assets (acquired after March 20, 2013 and before 2021) may qualify to be
accumulated in a Class 41.1 pool that can be amortized at an accelerated rate of up to
100%. However, as a substantive portion of the fixed assets are expected to be acquired
post-2020 (after the phase out of the Class 41.1 pool), the KSM Financial Model
assumes that the accelerated depreciation will not be available.

The Project is expected to incur costs related to the NTL as described in Section 21. As
the capital costs are expected to be incurred on a property that is not owned by the mine,
the costs associated with the NTL are treated as eligible capital expenditures for income
tax purposes in the KSM Financial Model. Effective January 1, 2017, eligible capital
expenditures are treated as a Class 14.1 asset with an amortization rate of 5% per
annum. The KSM Financial Model treats all the costs associated with the NTL as a Class
14.1 asset.

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", which is defined as gross revenue
from the mine less mine operating expenditures. Hedging income and losses, royalties
and financing costs are excluded from operating expenditures. The 2% tax is
accumulated in a Cumulative Tax Credit Account (CTCA) and is fully creditable against the
13% tax.

All capital expenditures, both mine development costs and fixed asset purchases, and
mine operating expenditures are accumulated in the Cumulative Expenditures Account,
which is amortized at 100% against the 13% tax.

The 13% tax is assessed on "net revenue", which is defined as gross revenue from the
mine less any accumulated Cumulative Expenditures Account balance to the extent of
the gross revenue from the mine for the year.

A "new mine allowance" is available in respect of capital costs incurred in respect of new
mines. Generally, this allowance provides that 133% of capital expenditures incurred
prior to commencement of production are included in the Cumulative Expenditures
Account. Under current legislation, the provision for the new mine allowance is scheduled
to expire on January 1, 2020.

A notional interest of 125% of the prevailing federal bank rate is calculated annually on
any unused Cumulative Expenditures Account and CTCA and is added to the respective
balances.

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 BC Mineral Tax is deductible for federal and provincial income tax purposes.

Provincial Sales Tax

PST was applied to capital and operating cost. They were calculated as part of the
estimating process for the capital component. They were estimated on $/t basis for the
operating cost. Mining cost were increased by US$0.046/t and process costs by
US$0.043/t to account for PST.

FINANCING
The model does not include any costs associated with financing.

INFLATION
There is no adjustment for inflation in the financial model; all cash flows are based on
2016 dollars.

24.22.3 FINANCIAL RESULTS 
Table 24.23 summarizes the financial results. The after-tax NPV at a 5% discount rate
over the estimated mine life is US$ 3.366 billion. The after-tax IRR is 10.0%. After-tax
payback of the initial capital investment is estimated to occur in 6.4 years after the start
of production. Table 24.24 shows the cash flow broken out on an annualized basis.
Please note that the years presented in the table are for illustrative purposes only and do
not necessarily represent the start dates or actual production that would occur in the
specified years.

The average life of mine operating cost per ounce of gold recovered is US$ -179 over the
life of mine. Operating statistics are included as Table 24.25.

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 Table 24.23  PEA Financial Analysis Summary 
Base Case Recent Spot Alternate
Pre-tax Return
Cumulative CF (US$ million) 26,345 24,107 38,742
3% NPV (US$ million) 10,850 10,103 16,963
5% NPV (US$ million) 6,105 5,752 10,234
8% NPV (US$ million) 2,400 2,314 4,904
IRR (%) 12.7 12.9 16.9
Payback (Years) 5.6 5.3 3.9
After-tax Returns
BC Mining Tax (US$ million) 3,388 3,223 5,006
BC Income Tax (US$ million) 2,636 2,515 3,819
Federal Income Tax (US$ million) 3,594 3,430 5,207
Cumulative CF (US$ million) 16,727 15,283 24,710
3% NPV (US$ million) 6,515 6,051 10,456
5% NPV (US$ million) 3,366 3,162 6,036
8% NPV (US$ million) 900 871 2,529
IRR (%) 10.0 10.1 13.4
Payback (Years) 6.4 6.1 4.7

See Figure 24.34 for additional sensitivities to metal prices.

24.22.4 SENSITIVITY ANALYSIS 
Sensitivity analysis was performed on the base case NPV after taxes that examines
sensitivity to metal prices, operating costs, capital costs Cdn$/US$ foreign exchange and
labour costs.

Sensitivities are shown in Figure 24.34.

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 Figure 24.34  PEA Sensitivity Analysis 

Sensitivity of NPV 5% AfterTax

10,000

NPV 5% ($US million) 8,000

6,000

4,000

2,000

0
-40% -30% -20% -10% 0% 10% 20% 30% 40%
(2,000)

(4,000)
Change in Factor
Capital Costs Operating Costs Metal Price Foreign XE Labour

The Project is most sensitive to changes in metal prices and foreign exchange, less
sensitive to changes in capital costs, and least sensitive to operating cost and labour
costs changes.

Mill feed grade is not presented in the sensitivity graphs as the impact of changes in
grade is similar to the impact of changes in metal price.

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Table 24.24  PEA Cashflow on an Annualized Basis 
CASHFLOW MODEL

Project Time line

Year (December 31st) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044
Project time -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

UNITS LOM
Metal Prices (Base Case)
Gold US$/oz 1,230.00 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230
Silver US$/oz 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75
Copper US$/lbs 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75
CAD/USD CAD/USD 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80

Mill Feed Mined

Mill Feed From Mine kmt 2,223,405 726 53,370 59,902 57,996 45,949 61,932 60,704 61,006 27,490 24,704 34,544 43,077 50,508 57,802 61,651 61,890 62,019 62,046 62,050 62,050 62,049 62,011 58,955
Stockpile Reclaim kmt 157,535 592 4,054 16,101 118 1,346 1,044 34,560 37,346 27,506 18,973 11,542 4,248 106

Waste Mined
Waste Mined kmt 610,793 11,952 31,046 64,159 120,017 84,152 119,925 114,631 55,754 8,062 1,013 82

Mill Feed
Mill Feed kmt 2,380,940 726 53,370 60,494 62,050 62,050 62,050 62,050 62,050 62,050 62,050 62,050 62,050 62,050 62,050 61,757 61,890 62,019 62,046 62,050 62,050 62,049 62,011 58,955
Au g/t 0.522 0.67288 0.70579 0.90229 0.88769 0.85550 0.65200 0.69221 0.73529 0.58086 0.44396 0.43837 0.42409 0.47345 0.52601 0.52635 0.48864 0.48636 0.48564 0.47782 0.46809 0.45879 0.45136 0.46150
Cu % 0.32 0.23 0.20 0.27 0.27 0.31 0.25 0.25 0.30 0.29 0.28 0.31 0.32 0.33 0.33 0.32 0.31 0.30 0.30 0.31 0.31 0.31 0.30 0.30
Ag g/t 2.74 7.77 3.08 2.57 2.78 2.49 1.91 3.03 2.95 1.81 1.89 2.28 2.61 2.85 3.18 3.37 3.12 2.97 2.95 2.96 3.02 3.18 3.40 3.76

REVENUES AND DEDUCTIONS

Metal Revenues
Copper Concentrate 000 US$ 67,319,500 20,961 1,393,075 2,112,965 2,144,233 2,186,511 1,619,404 1,735,569 2,036,390 1,682,830 1,442,479 1,566,682 1,598,170 1,728,925 1,856,333 1,844,194 1,721,868 1,696,188 1,691,177 1,687,722 1,679,400 1,656,274 1,633,469 1,570,205
Dore 000 US$ 8,199,093 3,944 275,458 353,685 354,519 328,500 302,985 333,771 305,841 219,045 173,482 171,276 165,517 177,882 190,971 189,725 174,622 173,942 176,255 176,123 175,127 174,496 174,993 174,049
Total 000 US$ 75,518,593 24,904 1,668,533 2,466,649 2,498,752 2,515,011 1,922,388 2,069,340 2,342,232 1,901,875 1,615,961 1,737,958 1,763,688 1,906,806 2,047,304 2,033,919 1,896,490 1,870,130 1,867,433 1,863,845 1,854,526 1,830,770 1,808,462 1,744,255

Treatment Charges
Treatment Copper Concentrate 000 US$ 2,646,372 571 36,614 56,219 58,242 67,015 51,683 53,685 65,557 61,514 59,832 67,153 69,105 70,925 71,472 69,887 66,343 65,072 65,254 66,357 67,104 66,538 65,722 62,522
Total Treatment Charges 000 US$ 2,646,372 571 36,614 56,219 58,242 67,015 51,683 53,685 65,557 61,514 59,832 67,153 69,105 70,925 71,472 69,887 66,343 65,072 65,254 66,357 67,104 66,538 65,722 62,522

Transport and Representation

Copper Concentrate 000 US$ 2,506,521 541 34,680 53,248 55,164 63,473 48,952 50,848 62,093 58,263 56,670 63,604 65,453 67,176 67,695 66,193 62,837 61,633 61,805 62,850 63,557 63,022 62,249 59,218
Dore 000 US$ 41,416 59 980 617 810 944 633 1,285 932 531 712 978 1,205 1,268 1,411 1,468 1,275 1,198 1,196 1,187 1,201 1,247 1,317 1,374
Total Transport and Representation 000 US$ 2,547,937 601 35,660 53,865 55,974 64,417 49,585 52,133 63,025 58,794 57,382 64,582 66,659 68,444 69,106 67,661 64,113 62,831 63,001 64,038 64,758 64,269 63,566 60,592

Insurance Costs
Copper Concentrate 000 US$ 80,841 25 1,696 2,571 2,607 2,649 1,960 2,102 2,464 2,027 1,728 1,874 1,911 2,072 2,231 2,218 2,069 2,039 2,032 2,027 2,015 1,987 1,960 1,885
Dore 000 US$ 10,249 5 344 442 443 411 379 417 382 274 217 214 207 222 239 237 218 217 220 220 219 218 219 218
Total Insurance Costs 000 US$ 91,090 30 2,040 3,013 3,051 3,060 2,338 2,520 2,846 2,300 1,945 2,089 2,118 2,295 2,470 2,455 2,288 2,256 2,253 2,247 2,234 2,205 2,178 2,102

NSR
Copper Concentrate 000 US$ 62,085,765 19,823 1,320,085 2,000,927 2,028,220 2,053,374 1,516,809 1,628,934 1,906,277 1,561,027 1,324,248 1,434,051 1,461,700 1,588,751 1,714,934 1,705,896 1,590,618 1,567,444 1,562,086 1,556,488 1,546,723 1,524,726 1,503,538 1,446,581
Dore 000 US$ 8,147,428 3,879 274,134 352,626 353,266 327,145 301,973 332,069 304,527 218,240 172,553 170,084 164,105 176,391 189,321 188,020 173,129 172,527 174,839 174,716 173,707 173,031 173,458 172,457
Total 000 US$ 70,233,193 23,702 1,594,219 2,353,553 2,381,486 2,380,519 1,818,781 1,961,003 2,210,804 1,779,266 1,496,801 1,604,135 1,625,805 1,765,142 1,904,255 1,893,916 1,763,746 1,739,971 1,736,925 1,731,203 1,720,430 1,697,758 1,676,996 1,619,038

OPERATING COSTS ONSITE

Mining 000 US$ 10,779,053 250,126 247,477 263,898 269,469 234,411 148,587 130,997 115,862 151,775 211,901 241,850 268,419 287,609 299,270 299,168 302,773 304,537 303,062 302,443 301,791 303,026 292,121
Process 000 US$ 11,784,690 259,016 292,263 300,730 306,129 301,055 299,424 300,306 305,135 306,358 305,885 304,971 304,135 303,282 301,524 302,174 302,787 302,914 302,933 302,935 302,932 302,749 288,187
G&A 000 US$ 2,147,292 40,353 43,358 47,050 44,411 46,560 41,403 42,948 40,556 42,477 45,062 45,029 45,097 46,446 47,759 45,845 46,364 47,726 48,607 49,179 49,682 50,682 49,318
Oversite Services 000 US$ 965,246 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926
Tunnel Transport & Material Handling 000 US$ 576,663 12,930 14,656 15,033 15,033 15,033 15,033 15,033 15,033 15,033 15,033 15,033 15,033 15,033 14,962 14,994 15,026 15,032 15,033 15,033 15,033 15,024 14,283
TMF Seepage Water Pumping 000 US$ 45,682 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896
HDS Water Treatment Plant 000 US$ 857,307 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810
Selenium Water Treatment Plant 000 US$ 378,712 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058
Minesite Water Management - Pumping 000 US$ 106,216 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083
TMF Dam Raising Sands 000 US$ 239,034 4,960 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185 6,185
Energy Recovery 000 US$ (242,563) (2,829) (2,829) (2,829) (2,829) (2,829) (2,829) (2,829) (2,829) (2,829) (5,135) (5,135) (5,135) (5,135) (4,739) (4,739) (4,739) (4,739) (4,739) (4,739) (5,271) (5,271) (5,271)
Total onsite operating cost 000 US$ 27,637,331 603,272 639,826 668,782 677,114 647,188 554,575 539,413 526,716 565,772 625,703 654,705 680,507 700,192 711,733 710,399 715,168 718,428 717,854 717,808 717,125 719,169 691,596

OPERATING COSTS OFF SITE

Other Royalty 000 US$ 3,600 3,600

Total off site operating cost 000 US$ 3,600 3,600

OPERATING PROFIT

Operating Profit 000 US$ 42,592,262 23,702 987,348 1,713,727 1,712,704 1,703,406 1,171,593 1,406,428 1,671,391 1,252,550 931,029 978,431 971,100 1,084,635 1,204,063 1,182,183 1,053,347 1,024,803 1,018,497 1,013,349 1,002,622 980,633 957,827 927,442

BC Mining Tax 000 US$ 3,388,213 474 19,819 34,275 34,254 34,068 23,432 28,129 33,428 41,792 54,887 69,028 90,020 113,947 132,025 131,062 118,247 119,333 112,884 89,824 92,427 95,555 96,005 94,852
BC Income Tax 000 US$ 2,635,813 2,555 24,701 91,103 47,611 83,843 117,512 74,725 39,448 45,891 47,990 64,501 81,483 83,907 75,361 76,220 78,621 78,308 74,455 71,191 69,204 67,082
Federal Income Tax 000 US$ 3,594,290 3,484 33,683 124,231 64,924 114,332 160,244 101,898 53,793 62,578 65,442 87,956 111,114 114,418 102,765 103,936 107,211 106,783 101,530 97,078 94,369 91,476
Taxes 000 US$ 9,618,316 6,513 19,819 34,275 92,639 249,402 135,967 226,304 311,183 218,416 148,129 177,497 203,452 266,404 324,622 329,388 296,372 299,489 298,716 274,915 268,412 263,824 259,578 253,410

CAPITAL COSTS

Initial Capital 000 US$ 5,489,356 211,858 525,994 698,854 963,104 1,750,583 1,338,962
Sustaining Capital 000 US$ 10,017,564 725,159 268,065 335,802 302,601 422,718 325,697 488,351 402,852 502,322 441,738 275,079 205,461 186,080 171,790 141,922 105,492 148,239 318,279 287,921 242,460 216,529 195,288
Provincial Sales Tax (PST) 000 US$ 200,519 2,740 6,802 9,037 12,454 22,637 17,314 9,377 3,466 4,342 3,913 5,466 4,212 6,315 5,209 6,496 5,712 3,557 2,657 2,406 2,221 1,835 1,364 1,917 4,116 3,723 3,135 2,800 2,525
Closure Costs 000 US$ 539,957 3,960 3,622 27,600 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069
Total capital costs 000 US$ 16,247,397 218,557 532,796 707,891 975,558 1,773,220 1,359,898 762,136 271,531 340,144 306,514 428,184 329,908 494,666 408,061 508,818 458,519 289,705 219,187 199,555 185,080 154,826 117,925 161,225 333,464 302,714 256,665 230,398 208,883

Working Capital
Change in working capital 000 US$ 0 (3,896) (208,583) (121,818) (2,212) 844 89,881 (30,991) (42,309) 69,894 49,643 (12,718) (1,179) (20,784) (21,250) 2,648 21,288 4,300 769 893 1,767 3,671 3,581 7,261

VALUATION INDICATORS

Pre Tax
Pre-Tax Cash Flow 000 US$ 26,344,865 (218,557) (532,796) (707,891) (975,558) (1,773,220) (1,340,092) 16,628 1,320,378 1,370,348 1,397,735 833,290 1,045,529 1,134,416 914,383 471,854 507,194 680,217 844,664 983,258 999,751 919,809 911,178 858,041 680,779 701,676 727,639 731,010 725,821
Cumulative cashflow 000 US$ (218,557) (751,353) (1,459,245) (2,434,803) (4,208,023) (5,548,115) (5,531,487) (4,211,108) (2,840,760) (1,443,025) (609,735) 435,794 1,570,209 2,484,593 2,956,447 3,463,641 4,143,858 4,988,522 5,971,780 6,971,531 7,891,340 8,802,518 9,660,559 10,341,338 11,043,014 11,770,653 12,501,663 13,227,484
NPV 5% 000 US$ 6,104,938
Payback period Years 5.6
IRR before tax % 12.7%

After Tax
After Tax Cash Flow 000 US$ 16,726,549 (218,557) (532,796) (707,891) (975,558) (1,773,220) (1,346,605) (3,191) 1,286,104 1,277,710 1,148,333 697,323 819,225 823,232 695,968 323,725 329,698 476,764 578,260 658,636 670,363 623,436 611,689 559,325 405,864 433,263 463,815 471,432 472,411
Cumulative cashflow 000 US$ (218,557) (751,353) (1,459,245) (2,434,803) (4,208,023) (5,554,628) (5,557,819) (4,271,715) (2,994,005) (1,845,673) (1,148,350) (329,125) 494,107 1,190,075 1,513,801 1,843,498 2,320,263 2,898,523 3,557,159 4,227,523 4,850,959 5,462,648 6,021,973 6,427,837 6,861,100 7,324,915 7,796,346 8,268,757
NPV 5% 000 US$ 3,366,176
Payback period Years 6.4
IRR after tax % 10.0%

Seabridge Gold Inc. 24-83 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update and Preliminary Economic Assessment
 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 2076
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54

1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230 1,230
17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75 17.75
2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75
0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80

55,474 50,483 47,205 44,423 45,015 46,961 48,590 48,927 47,470 47,450 47,450 47,450 47,450 46,830 41,519 35,059 29,917 26,113 28,407 26,139 23,539 22,531 25,550 25,550 24,526 18,493 14,120 9,141 7,194

55,474 50,483 47,205 44,423 45,015 46,961 48,590 48,927 47,470 47,450 47,450 47,450 47,450 46,830 41,519 35,059 29,917 26,113 28,407 26,139 23,539 22,531 25,550 25,550 24,526 18,493 14,120 9,141 7,194
0.46967 0.48383 0.49457 0.49552 0.48280 0.45844 0.43567 0.42219 0.42890 0.44677 0.47331 0.47863 0.46774 0.46423 0.47412 0.51267 0.55584 0.59309 0.54405 0.49235 0.43123 0.36811 0.35226 0.35526 0.32784 0.32827 0.30166 0.26312 0.24847
0.31 0.32 0.34 0.37 0.39 0.39 0.37 0.33 0.31 0.32 0.36 0.39 0.39 0.35 0.29 0.26 0.24 0.21 0.19 0.25 0.34 0.45 0.51 0.50 0.46 0.47 0.44 0.39 0.36
3.95 3.43 3.05 3.06 3.03 2.77 2.51 2.30 2.37 2.56 2.74 2.77 2.75 2.71 2.59 2.62 2.69 2.73 2.45 2.17 2.17 2.14 2.12 1.99 1.72 1.57 1.37 1.15 0.90

1,490,409 1,409,923 1,377,965 1,354,920 1,397,189 1,423,694 1,397,199 1,291,569 1,207,646 1,255,232 1,394,417 1,479,844 1,454,971 1,328,257 1,053,646 859,409 720,498 608,541 598,749 598,282 635,082 715,513 893,938 882,046 770,567 589,287 419,208 236,263 170,216
169,945 161,634 156,573 151,625 151,594 150,649 148,296 145,208 143,942 149,300 156,753 158,443 155,975 153,842 142,384 133,256 126,564 121,597 123,875 102,239 73,207 50,489 50,611 50,727 44,688 33,519 23,431 13,199 9,320
1,660,353 1,571,557 1,534,537 1,506,544 1,548,783 1,574,343 1,545,495 1,436,778 1,351,588 1,404,531 1,551,170 1,638,287 1,610,946 1,482,098 1,196,030 992,665 847,062 730,137 722,625 700,521 708,289 766,002 944,549 932,773 815,255 622,806 442,639 249,462 179,537

59,128 57,278 57,304 58,056 61,577 64,432 63,599 57,172 51,676 53,255 60,524 66,114 65,418 57,379 41,983 31,389 24,121 18,478 18,306 22,362 28,300 36,013 46,917 46,013 40,235 30,981 22,261 12,625 9,091
59,128 57,278 57,304 58,056 61,577 64,432 63,599 57,172 51,676 53,255 60,524 66,114 65,418 57,379 41,983 31,389 24,121 18,478 18,306 22,362 28,300 36,013 46,917 46,013 40,235 30,981 22,261 12,625 9,091

56,003 54,251 54,276 54,988 58,323 61,027 60,238 54,151 48,945 50,440 57,326 62,620 61,961 54,347 39,764 29,730 22,846 17,501 17,338 21,180 26,805 34,109 44,438 43,581 38,109 29,344 21,084 11,958 8,611
1,358 1,108 954 910 911 879 833 775 773 814 856 853 834 800 674 569 496 447 450 368 322 297 334 316 264 184 124 68 18
57,361 55,360 55,230 55,898 59,234 61,906 61,071 54,926 49,718 51,254 58,181 63,473 62,795 55,146 40,438 30,300 23,342 17,948 17,789 21,548 27,127 34,407 44,772 43,898 38,372 29,528 21,208 12,026 8,629

1,789 1,691 1,651 1,621 1,670 1,699 1,667 1,543 1,445 1,502 1,667 1,767 1,737 1,589 1,265 1,035 870 738 726 720 758 849 1,059 1,045 913 698 496 280 201
212 202 196 190 189 188 185 182 180 187 196 198 195 192 178 167 158 152 155 128 92 63 63 63 56 42 29 16 12
2,002 1,893 1,847 1,811 1,859 1,887 1,852 1,725 1,625 1,689 1,863 1,965 1,932 1,781 1,443 1,202 1,029 890 880 848 850 912 1,122 1,108 969 740 525 296 213

1,373,489 1,296,703 1,264,733 1,240,255 1,275,619 1,296,536 1,271,696 1,178,703 1,105,580 1,150,034 1,274,900 1,349,342 1,325,854 1,214,943 970,634 797,255 672,661 571,824 562,380 554,020 579,218 644,541 801,524 791,406 691,310 528,265 375,367 211,400 152,312
168,374 160,323 155,424 150,525 150,494 149,582 147,278 144,252 142,989 148,300 155,702 157,392 154,946 152,850 141,532 132,520 125,910 120,998 123,270 101,743 72,793 50,129 50,214 50,348 44,369 33,293 23,278 13,115 9,291
1,541,864 1,457,026 1,420,157 1,390,780 1,426,113 1,446,118 1,418,974 1,322,955 1,248,569 1,298,334 1,430,602 1,506,735 1,480,800 1,367,792 1,112,167 929,774 798,571 692,822 685,650 655,763 652,011 694,670 851,738 841,754 735,679 561,557 398,645 224,515 161,603

275,149 261,859 254,019 240,850 227,109 227,979 237,074 239,626 231,104 232,242 230,898 231,784 231,387 228,796 207,904 184,334 166,112 151,053 164,219 148,980 126,900 116,363 121,323 122,772 115,646 91,358 75,364 57,246 49,028
271,631 248,972 234,478 222,135 225,427 234,722 242,482 244,090 237,144 237,051 237,051 237,051 237,051 234,095 208,784 177,979 147,721 129,575 140,517 131,231 120,824 117,604 132,512 132,512 127,640 98,921 78,108 54,410 45,147
51,224 48,494 47,539 48,916 43,216 43,129 42,854 42,757 42,166 41,149 41,069 41,581 41,582 40,894 39,532 38,005 38,958 40,145 36,069 36,644 32,991 33,483 34,891 34,903 34,605 32,907 31,687 30,268 29,728
18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926 18,926
13,440 12,231 11,436 10,762 10,906 11,377 11,772 11,854 11,501 11,496 11,496 11,496 11,496 11,346 10,059 8,494 7,248 6,327 6,882 6,333 5,703 5,459 6,190 6,190 5,942 4,480 3,421 2,215 1,743
896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896 896
16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810 16,810
8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058 8,058
2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083 2,083
6,185 6,185 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401 3,401
(5,271) (5,271) (5,271) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,666) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271) (5,271)
659,131 619,243 592,375 567,170 551,165 561,714 578,689 582,834 566,422 566,445 565,021 566,419 566,023 559,636 510,786 453,714 404,942 372,002 392,590 368,090 331,320 317,811 339,819 341,279 328,736 272,569 233,482 189,041 175,820

882,733 837,783 827,782 823,610 874,948 884,403 840,285 740,121 682,147 731,889 865,580 940,315 914,778 808,156 601,381 476,060 393,629 320,820 293,060 287,673 320,691 376,859 511,919 500,475 406,943 288,989 165,162 35,474 (14,216)

64,196 80,432 82,126 80,158 93,787 92,058 97,127 84,789 78,286 87,418 103,752 112,517 107,936 96,752 67,130 49,248 24,054 6,416 14,236 11,913 31,823 41,933 57,960 60,741 47,511 33,589 17,681 2,879
62,422 55,519 55,970 56,949 63,050 65,654 62,847 55,874 52,392 58,961 73,404 81,566 79,661 69,824 50,538 38,440 29,461 19,140 13,586 12,477 15,804 23,675 38,739 39,223 31,977 21,862 11,084
85,121 75,708 76,323 77,658 85,977 89,528 85,700 76,191 71,444 80,401 100,096 111,226 108,629 95,214 68,916 52,418 40,174 26,100 18,526 17,014 21,551 32,285 52,826 53,486 43,605 29,812 15,114
211,739 211,659 214,419 214,766 242,814 247,239 245,673 216,854 202,122 226,780 277,253 305,309 296,226 261,790 186,584 140,106 93,689 51,656 46,347 41,403 69,178 97,892 149,525 153,450 123,093 85,263 43,879 2,879

383,951 216,278 193,538 204,365 151,554 174,018 91,968 86,773 78,929 58,687 66,624 73,844 83,424 63,094 83,912 95,990 205,935 270,463 178,724 193,533 74,929 53,608 65,231 32,811 40,947 30,220 28,782 13,158 11,480 949
4,965 2,797 2,503 2,643 1,960 2,250 1,189 1,122 1,021 759 862 955 1,079 816 1,085 1,241 2,663 3,497 2,311 2,503 969 693 844 424 529 391 372 170 148 12
11,069 11,069 11,069 11,069 11,069 11,069 11,069 31,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 11,069 (15,252) 15,400 15,400 15,400
399,985 230,144 207,110 218,077 164,582 187,337 104,226 118,964 91,018 70,515 78,554 85,868 95,572 74,979 96,066 108,300 219,667 285,029 192,104 207,104 86,966 65,370 77,144 44,305 52,546 41,680 40,223 24,397 (3,623) 16,361 15,400 15,400

10,018 10,667 3,852 2,757 (7,124) (2,421) 5,857 16,125 10,879 (8,179) (21,860) (12,400) 4,231 18,052 38,005 25,292 17,559 14,676 2,871 2,899 (2,405) (8,123) (24,011) 1,761 16,406 24,006 23,568 24,971 9,255 12,114

492,766 618,307 624,525 608,291 703,242 694,645 741,916 637,282 602,007 653,195 765,166 842,047 823,436 751,229 543,321 393,051 191,521 50,467 103,827 83,468 231,319 303,367 410,765 457,931 370,803 271,315 148,507 36,048 (1,338) (4,247) (15,400) (15,400)
13,720,250 14,338,557 14,963,081 15,571,372 16,274,614 16,969,259 17,711,175 18,348,458 18,950,465 19,603,660 20,368,826 21,210,874 22,034,310 22,785,539 23,328,859 23,721,910 23,913,432 23,963,899 24,067,726 24,151,194 24,382,513 24,685,880 25,096,645 25,554,576 25,925,380 26,196,695 26,345,202 26,381,250 26,379,912 26,375,665 26,360,265 26,344,865

281,027 406,648 410,105 393,524 460,428 447,405 496,243 420,428 399,885 426,416 487,913 536,738 527,210 489,439 356,736 252,945 97,833 (1,189) 57,480 42,065 162,141 205,474 261,240 304,481 247,711 186,052 104,628 33,169 (1,338) (4,247) (15,400) (15,400)
8,549,784 8,956,432 9,366,537 9,760,062 10,220,490 10,667,895 11,164,139 11,584,567 11,984,452 12,410,868 12,898,781 13,435,519 13,962,729 14,452,168 14,808,904 15,061,850 15,159,682 15,158,493 15,215,973 15,258,038 15,420,179 15,625,653 15,886,893 16,191,374 16,439,085 16,625,137 16,729,765 16,762,934 16,761,596 16,757,349 16,741,949 16,726,549

Seabridge Gold Inc. 24-84 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update and Preliminary Economic Assessment
 Table 24.25  Average Cost per Ounce of Gold Recovered 
Cost
Ares
(US$/oz)
Operating Costs On Site
Mining Cost 356.64
Process Cost 389.91
G&A 71.05
Others 96.82
Operating Costs On Site/oz Au Recovered 914.41
Operating Costs Off site
Total Treatment Charges 87.56
Total Refining Charges 54.57
Total Transport and Representation 84.30
Total Insurance Costs 3.01
Royalties 0.12
Operating Costs Off Site/oz Au Recovered 317.61
Credit
Silver (82.80)
Copper (1,328.42)
Total Credit (1,411.22)
Operating Cost/oz Recovered Net of By-products (179.21)

Seabridge Gold Inc. 24-85 735-1552880100-REP-R0002-02

2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study
Update and Preliminary Economic Assessment
25.0 INTERPRETATIONS AND CONCLUSIONS

25.1 INTRODUCTION
This NI 43-101 Technical Report presents a summary of the results of two separate
studies for two separate mine development options for the Project. The first is at a PFS
level, which is an update of the 2012 PFS (Tetra Tech 2012). The other is at a PEA level,
which evaluates a different approach to the Project by emphasizing low-cost block cave
mining and reducing the number and size of the open pits, which significantly reduces
the surface disturbances in the re-designed project. The PEA assesses the potential
impacts of incorporating higher grade Inferred Mineral Resources delineated at Deep
Kerr and Iron Cap Lower Zone into the mine design, and increasing the annual average
maximum mill throughput from 130,000 t/d envisioned in the 2016 PFS to 170,000 t/d
in the PEA.

The results of the 2016 PFS update remain valid and represent a viable option for
developing the Project, with the PEA assessing an alternative development option at a
conceptual level.

The 2012 PFS was used as the basis for submitting the Application/EIS (Rescan 2013).
The Project received its EA approvals from both the provincial and federal governments in
July and December of 2014, respectively, including numerous provincial permits covering
the first years of construction. Those reviews and subsequent decisions concluded that
the Project would not result in significant adverse effects to the environment, identifying
KSM as a responsible project.

The 2016 PFS is based on Mineral Reserves that stem from a combination of Mineral
Resources that have been updated since the 2012 PFS (Kerr and Iron Cap deposits) and
Mineral Resources that remain the same as those used in the 2012 PFS (Sulphurets and
Mitchell). Appreciable drilling was completed at both the Kerr and Iron Cap deposits
since the 2012 PFS was completed that necessitated updating their Mineral Resources.

The 2016 PFS update maintains the Project scope as a large-tonnage open pit and
underground block cave mining operation, at a nominal rate of 130,000 t/d of ore fed to
a flotation mill capable of producing a copper/gold/silver concentrate for transport by
truck to the nearby deep-water sea port at Stewart, BC. A gold-silver doré, and a separate
molybdenum concentrate, will also be produced at the processing facility.

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25.2 2016 KSM MINERAL RESERVES AND RESOURCES
25.2.1 MINERAL RESOURCES
Significant drilling and other exploration activities have been conducted in the KSM
district since the 1960s. A number of major mining companies completed various
exploration programs prior to Seabridge’s entry into the district in 2000. Since then,
Seabridge has drilled the Kerr, Deep Kerr, Sulphurets, Mitchell, Iron Cap, and Lower Iron
Cap deposits, testing both the limits and geometry of the extensively altered and
mineralized systems that appear to be centered on hypabyssal, early-Jurassic intrusions
that are located adjacent to regional thrust faults. Seabridge’s geological staff developed
geological models for each of the mineralized systems. Those geological models were
used to create grade models that were used to tabulate Mineral Resources for the KSM
Project. The KSM Mineral Resources are constrained by conceptual open pit shapes for
material that could be potentially mined from surface, and conceptual block cave shapes
for material that could be potentially mined using underground methods. All of the KSM
Mineral Reserves are contained within the Mineral Resources described in Section 14.4.

25.2.2 MINERAL RESERVES

The 2016 KSM PFS update is based on the updated Mineral Resource model described
in Section 14.0, which includes the updated geology and assay information within the
revised Mineral Resource model, as well as updated metallurgy and cost information
developed in this PFS. Mineral Reserves are based on NSR values that were calculated
in the block model using US$1,200.00/oz of gold, US$2.70/lb of copper, US$17.50/oz
of silver, and US$9.70/lb of molybdenum, varying process recoveries for the different
mining areas, and applicable off-site charges. The NSR values were used as a dynamic
cut-off grade for defining ore and waste in the open pit, with a minimum of Cdn$9.00/t.
Mining loss and dilution parameters for the open pits and underground mine plans are
applied as described in Section 15.0. The estimated Proven and Probable Mineral
Reserves as of July 31, 2016 are 38.8 Moz of gold and 10.2 Blb of copper (2.2 Bt at an
average grade of 0.55 g/t gold and 0.21% copper per tonne) are slightly above the 2012
KSM PFS estimates.

The methods used in this estimate comply with CIM standards, with reasonable
engineering practices for a PFS-level study, and economic estimates based on the
technical and economic parameters stated in this report. As such, the Mineral Reserves
stated in this report are subject to future metal prices and cost inputs, as well as the
results of the future studies stated in Section 25.10 (Project Risks) and Section 26.0
(Recommendations) of this report. This Mineral Reserve is reliable to a PFS level of
estimate.

25.3 OPEN PIT MINING

The open pit mine plan establishes the economic mining limits of the Mitchell,
Sulphurets, and Kerr Mineral Resource areas using large-tonnage mining methods
capable of providing mill feed at a nominal rate of 130,000 t/d when the open pit is

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 supplying all ore. The LOM mine plan accommodates the local adverse conditions
comprising snow, cold, remoteness, and steep terrain. Waste and water management
designs are incorporated into the mine plan, as specified in the current site plans, as
reviewed and approved in the Application/EIS review process completed in 2014 (Rescan
2013). The chosen mine equipment is well known and suitable for the expected
operating conditions, and the productivity assumptions are reasonable and achievable.
The resultant unit mining costs are comparable when benchmarked against other similar
operating mines when considering the site operating conditions. Given the stated design
parameters and assumptions, the open pit mine plan would achieve the forecast
production schedule and the annual levels and costs within the expected range of
accuracy of the PFS estimate.

25.4 UNDERGROUND MINING

The underground block cave mining plans for the Mitchell deposit, beneath the previously
mined Mitchell open pit, and for the Iron Cap deposit were developed from assessments
of the economic shut-off at the drawpoints using GEOVIA’s PCBC™ software. These
assessments incorporate dilution associated with sub-economic and waste rock that
mixes with the mineralized rock above shut-off value as it is drawn down and mucked at
the drawpoint. The GEOVIA PCBC™ assessments were based on industry standard
approaches of developing production and grade schedules, and incorporated
benchmarked production controls for ramp-up rates, maximum draw rates, and
drawpoint construction rates. The size of the block cave footprints on the production
levels at Mitchell and Iron Cap are much larger than the minimum estimated area
required to initiate and propagate the cave to surface, and so there are no concerns
about these deposits caving.

The drawpoint layout and spacing were based on estimates of fragmentation and cave
mining experience in maintaining favorable interaction between adjacent draw columns
that control premature reporting of waste dilution at the drawpoints. The chosen
mucking equipment, the haulage distances from drawpoints to ore passes, the handing
of oversize muck by secondary blasting, and the design of the ore passes and grizzly
system allow for production rates of 55,000 t/d at Mitchell and 40,000 t/d at Iron Cap.
The production ramp-up periods for these operations are six years and four years,
respectively, which are within the ranges that have been achieved at other block cave
operations. Production from Mitchell, and subsequently from Iron Cap, allow the total
KSM Project production to be maintained at 130,000 t/d from Year 23 to 35 as
production from the open pits decrease, and then dominate mill feed for the final third of
the LOM.

Based on the various factors discussed above, the block cave mine plan is expected to
achieve the forecasted production schedule and the annual levels and costs within the
expected range of accuracy of the 2016 KSM PFS update estimate.

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25.5 MTT TRANSPORTATION SYSTEM
Transportation of ore, freight, and personnel through the MTT will be achievable with a
two tunnel automated train transport system, at an average rate of 130,000 t/d and a
peak capacity of 10,000 t/h. The required deliveries of freight, including bulk transport
of fuel and lime, mine site consumables, as well as personnel movement for periodic
crew changes and daily requirements between the Mitchell and Treaty project areas are
also achievable using the tunnel and rail infrastructure with appropriate traffic control
management systems.

The system is scalable and flexible, as it has the ability to add or remove train sets to
meet higher or lower throughput requirements, and components can be taken out of
operation for maintenance without compromising total system operation.

This scale of underground tunnel transport via trains has proven effective in other mines
globally, utilizing equipment and infrastructure specified within this PFS. The planned
train system operations can be reasonably accomplished at this PFS’s estimated
productivities and costs.

25.6 TUNNELLING
The conventional drill and blast methodology for excavating infrastructure and water
tunnels is a valid basis for the scheduling and costing of the long tunnels required in this
PFS. Using a twinned tunnel for the MTT provides advantages in construction with three
sets of advancing twin headings, enabling the use of one tunnel at each heading as a
fresh airway, and the other tunnel as a return airway, which has a significant impact on
ventilation and advance rates for long tunnels. Other infrastructure and water tunnels
would be excavated with a single advancing heading from each portal, a well proven
method in the mining industry.

Advance rates for the MTT have been determined by two contractors using detailed cycle
time calculations for the varying ground conditions. The contractor-developed advance
rates and costs have been adapted for the other tunnel excavations. The contractor’s
estimates have also been benchmarked, indicating the estimates are within the accuracy
of a PFS. The License of Occupation for the MTT route was issued by the BC Government
in September 2014.

25.7 METALLURGY AND PROCESS

Several wide-ranging metallurgical test programs were conducted between 2007 and
2016 to assess the metallurgical responses of the mineral samples from the KSM
deposits, especially the samples from the Mitchell deposit. The test results indicate that
the mineral samples from the four separate mineralized deposits are amenable to the
flotation-cyanidation combined process.

The Process Plant is designed based on the flowsheet developed from the testwork
results. The proposed flotation process is projected to produce a copper-gold

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 concentrate containing approximately 25% copper. Copper and gold flotation recoveries
will vary with changes in head grade and mineralogy. The average copper and gold
recoveries to the concentrate are projected to be 81.6% and 55.3%, respectively, for the
LOM mill feed containing 0.55 g/t gold and 0.21% copper. As projected from the
testwork, the cyanidation circuit will increase the overall gold recovery to a range of 60 to
79%, depending on gold and copper head grades. Silver recovery from the flotation and
leaching circuits is expected to be 62.7% on average. A separate flotation circuit will
recover molybdenite from the copper-gold-molybdenum bulk concentrate when higher-
grade molybdenite mineralization is processed.

The process flowsheet proposed for the Project is conventional and has been widely used
in processing porphyry copper-gold ores. The equipment type and sizing selected for the
Project are common in other mining projects.

In general, the copper and molybdenum concentrates produced are anticipated to be

acceptable by most of the copper and molybdenum smelters. On average, the impurity
contents in the copper and molybdenum concentrates should be lower than the penalty
thresholds set by most of the smelters.

25.8 DAM STRUCTURES

25.8.1 TAILING MANAGEMENT FACILITY
The TMF will be a conventional storage facility with three main cells, using a starter dam
construction with ongoing centerline dam raises using cyclone sand. The TMF layout and
sequencing allows for staged construction of the facility, which optimizes both start-up
and operating costs, while managing geotechnical and environmental risks. Using a
three-cell system provides advantages for storage of CIL tailing, and allows progressive,
staged closure of the facility to mitigate environmental and closure risks. The cell system
reduces TMF discharge of excess water and also allows for progressive development of
water management facilities.

A BAT (KCB 2016) assessment, completed at the same time as the 2016 KSM PFS
update, shows that the current TMF design is the most appropriate to meet
environmental, operability, and geotechnical criteria. Dry stack options were either not
the most appropriate or did not meet these criteria.

Key conclusions include:

 TMF starter dams safely store 18 to 24 months of tailing under the range of
start-up assumptions assessed as established in design criteria presented
within the TMF Design Addendum Report (Appendix H4). This will allow the
Project flexibility during start up, with a minimum of one winter season and
potentially two winter seasons accommodated.
 TMF dam designs (from starter dams through closure) are stable under static
and pseudo-static conditions, as designed, and these designs meet all
applicable regulatory criteria.

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25.8.2 WATER STORAGE FACILITY
The WSF provides environmental containment of runoff water for the Mine Site. The
facility includes a rock fill-asphalt core WSD to collect contact water from the Mine Site
for treatment at the HDS WTP. The facility is capable of storing inflows from extreme
events and is designed to minimize seepage. The WSD will be built to full height before
start up to provide 50 Mm3 of storage for a 200-year wet year runoff from the Mine Site
catchments.

Key conclusions include:

 The rock fill-asphalt core WSD design is confirmed to be the preferred structure
type to meet the Project’s environmental, durability, and geotechnical design
criteria. A value engineering study (KCB 2012) showed that this design has both
low-seepage rates, as well as constructability and cost advantages over other
types of dam structures analyzed for this location and purpose.
 A dam construction contractor provided improved reliability estimates of
structure cost and construction schedule duration for completion of the WSD.

25.9 PFS STUDY ECONOMICS

Tetra Tech prepared an economic evaluation for the KSM 2016 PFS update based on a
pre-tax financial model. The tax component of the model was prepared and reviewed by
other consultants (please see Section 22.0 for further details). Based on this tax
analysis, Tetra Tech prepared the post-tax economic evaluation of the KSM Project.

For the 53-year LOM and 2.198 Bt Mineral Reserve, Table 25.1 summarizes the results
of the base case as well as three additional cases.

Based on the economic results of Table 25.1, it can be concluded that:

 The Project has a short payback period compared to the long mine life.
 The Project has low cash and total costs per ounce of gold produced net of by-
product credits.
 Lower revenue caused by metals prices in this 2016 KSM PFS update, as
compared to the 2012 KSM PFS, are partially offset by a lower exchange rate.
 The Project costs include capital cost commitments resulting from the EA review
process and thus represent a realistic cost basis moving forward as compared
to those projects which have yet to complete an environmental review.
 Realistic closure costs including long water treatment costs are included in the
KSM economic evaluation.
 The KSM Project, based on study results herein, is considered an economic
project, and thus merits additional study in the next design phase.

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 Table 25.1 Summary of Major Pre- and Post-tax Results by Metal Price Scenario
2016 Recent
Design Spot Alternate
Unit Base Case Case Case Case
Metal Price
Gold US$/oz 1,230.00 1,200.00 1,350.00 1,500.00
Copper US$/lb 2.75 2.70 2.20 3.00
Silver US$/oz 17.75 17.50 20.00 25.00
Molybdenum US$/lb 8.49 9.70 7.00 10.00
Exchange Rate US:Cdn 0.80 0.83 0.77 0.80
Pre-tax Results
NPV (at 0%) US$ million 15,933 13,727 16,101 26,319
NPV (at 3%) US$ million 6,217 5,128 6,461 11,138
NPV (at 5%) US$ million 3,263 2,510 3,507 6,541
NPV (at 8%) US$ million 960 475 1,175 2,928
IRR % 10.4 9.2 11.1 14.6
Payback years 6.0 6.5 5.6 4.1
Cash Cost/oz Au US$/oz 277 311 404 183
Total Cost/oz Au US$/oz 673 720 787 580
Post-tax Results
NPV (at 0%) US$ million 9,983 8,537 10,109 16,721
NPV (at 3%) US$ million 3,513 2,789 3,691 6,696
NPV (at 5%) US$ million 1,539 1,028 1,718 3,663
NPV (at 8%) US$ million -2 -343 161 1,282
IRR % 8.0 7.0 8.5 11.4
Payback years 6.8 7.4 6.4 4.9
Notes: Operating and total costs per ounce of gold are after base metal credits.
Total costs per ounce include all start-up capital, sustaining capital, and reclamation/closure costs.

25.10 PRELIMINARY ECONOMIC ASSESSMENT CONCLUSIONS

The PEA mining study took a different approach to the 2016 PFS. The PEA mine plan was
carried out with the aim of reducing the amount of waste rock produced in the open pits
with the mill feed drawing more on the underground resources. The PEA envisages a
combined open pit/underground block cave mining operation that is planned to operate
for 51 years. The mine production plan starts in lower-cost open pit areas using
conventional large scale equipment before transitioning into block cave underground
bulk mining later in the mine life. Starter pits have been selected in higher-grade areas
and cut-off grade strategy optimizes revenues to minimize the payback duration. Smaller
pits were designed for the Mitchell and Sulphurets deposits as well as mining the Kerr
deposit solely by underground mining methods. This approach substantially shrinks the
Project’s footprint.

The Mitchell open pit and Deep Kerr underground mines will be the main source of mill
feed, contributing approximately 83% of the total plant feed over the LOM, supplemented
by the Sulphurets open pit and Iron Cap underground mine production.

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 Over the entire 51-year mine life, mineralized material would be fed to a copper and gold
extraction mill. The proposed plant for the PEA mine design will have a nameplate
process rate of 170,000 t/d. The major design consideration in the Process Plant
equipment sizing and layout for the PEA was the use of the largest equipment sizing
available in order to minimize pumping and piping requirements, process building
footprint, and capital costs. Re-design of the facilities was limited to optimizing the layout
provided by the use of the larger equipment in the PEA relative to the 2016 PFS.
Estimated unit operating costs are 6% lower than the 2016 PFS, primarily due to
reduction in process and G&A cost associated with higher throughput.

The PEA offers a viable option for development of the Project and reduces a number of
project risks. By including Deep Kerr, annual average maximum throughput of
130,000 t/d envisioned in the 2016 PFS could be increased to 170,000 t/d in the PEA
without significant redesign of facilities. Increased throughput increases the metal
production, reduces payback periods, and improves estimated projected IRRs and NPVs.
The PEA mine plans in total would reduce the amount of waste rock by 81%
(approximately 2.4 Bt) compared to the PFS, substantially shrinking the Project’s foot
print and its environmental impact, and reducing water treatment costs.

25.11 PREFEASIBILITY STUDY PROJECT RISKS

There are risks that could affect the economic viability of the KSM Project. Many of these
risks are based on the current extents of sufficiently detailed information and
engineering in specific project areas. These risks can be further managed as more
drilling, sampling, testing, design, and engineering are completed in the next study stage.

However, several risks have been reduced through activities completed by Seabridge and
its team during the period from 2012 to 2016. Specifically, the permitting risk has been
addressed substantially with the receipt of environmental approvals granted by both the
federal and provincial governments in 2014, and the granting of the early-stage
construction permits for the Project, including the permit covering the MTT route. It can
be effectively stated that Seabridge earned “the social license” for the KSM Project
through the successful completion of the environmental review process with the support
of the nearby communities through the submission of letters of support and Aboriginal
groups support. Aboriginal support is evidenced by the signed “Benefits Agreement
between the Nisga’a Nation and Seabridge” (negotiated in 2014) and by the signed
“Sustainability Agreement” between Seabridge and the Gitanynow Wilps, also negotiated
in 2014.

The most significant unknowns associated with the Project are related to the extent of
available geotechnical data for the tunnels. As several tunnels are on the critical path for
construction, potential delays in construction could occur if unforeseen rock mass
conditions or groundwater inflows are encountered that cause durations in excess of
those anticipated in the preliminary construction schedule.

These risks are common to most mining projects, many of which can be mitigated with
adequate engineering, planning, and pro-active management. Some external risks, such
as metal prices, exchange rates, and government legislation are beyond the control of

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 the developer and operator and are difficult to anticipate and mitigate, although in some
instances measures for risk reduction have already been included in conservative design
such as in selection of economic mining limits. Risk reduction measures are also
included in tunnel and access road design, and through the inclusion of early scheduling
for items potentially subject to risk of delay. The means to address risk for a project the
size of KSM moving forward is to establish a formal risk management program during
advanced study phases that continues through development and into mine operation.
The KSM Project Team will systematically review risks and opportunities during project
development and construction, and take appropriate action to minimize the impact on
overall costs and scheduling.

25.11.1 OPEN PIT

The Mitchell pit is a very large open pit with world-class slope heights. The Sulphurets
and Kerr pits have slope heights typical of other open pit metal mines in BC and other
parts of the world. The main mining risks for the open pits relate to slope stability, safety,
and production delays. Throughout the planning, design, and engineering of the open
pits, the KSM Project Team has identified hazards and developed mitigation plans to
reduce and manage risks related to the open pit slopes. Previous studies included a
comprehensive risk analysis of the open pit mine design and operating issues.
Geotechnical and hydrogeological drilling and test work, geohazard studies, and weather
and snow studies have been completed. The results of these have been incorporated
into the mine designs for this current PFS update.

The following issues have been considered in the current work:

 Slope deformation or rock falls from unstable slopes requiring restricted access
to the pit, slope rehabilitation, and lost or reduced mine production. These
risks are mitigated via geotechnical design and assessment prior to mining, a
comprehensive slope monitoring and management plan during mining, the
addition of extra-wide benches at regular 150 m intervals in the pit slope
configurations, and standard operating procedures that include good wall
control practices and mine operations planning.
 Snow avalanches at the pit crests resulting in restricted access to the pit. These
risks are mitigated via an avalanche management plan coordinated with mine
operations.
 Visibility or weather shutdowns resulting in reduced productivity in the open pits.
These risks are mitigated via snow handling crews and equipment, planned lost
days and the use of ore stockpiles.
 Slope depressurization to reduce high pore water pressures in the pit slopes
that might result in pit slope instability. These risks are mitigated by an
extensive slope depressurization plan that includes vertical wells, horizontal
drains, and dewatering adits as a multi-layer system to achieve the design
depressurization targets.
 Surface water reporting to the pits due to failure or inundation of water
management structures. Excessive surface water into the pits may result in

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 localized slope failures, reduced mine productivity or increased pumping costs.
These risks have been mitigated by adjusting the mine plan to limit the exposure
of haul ramps to potential erosion from surface water sources and adequate
geotechnical design of the water management infrastructures.

The risks associated with the open pits of the KSM Project are common for many open pit
mining projects with large open pits mined in areas of mountainous terrain with high
precipitation. The mining and geotechnical teams have drawn on experience from
operations in these conditions and applied it to the designs in this study to mitigate the
risk through design, and operating practices, and procedures integrated into the plan.

25.11.2 TUNNELS
The KSM Project involves approximately 75 km of tunneling at start up. This includes
both infrastructure and water diversion tunnels to accommodate the challenges of
building a mine in mountainous terrain and to reduce project risks. In later stages of the
Project, the total constructed tunnel length rises to over 100 km. Tunnels provide more
direct routes for ore transport from the mining areas to the Treaty OPC and divert surface
water around mining areas and facilities. Tunnels were assessed as having lower
operational risks than alternative surface routes. Surface routes are more susceptible to
conflicts with other surface activities, and also present risks from climate and
geohazards. It is notable that the permit covering the MTT route was secured from the
BC Government in September 2014.

The PFS level of design for the tunnels in this study is based on reasonable assumptions
made from preliminary-level investigations that include geological mapping of tunnel
routes, geophysical surveys, drilling, and hydrogeological/geotechnical sampling and
testing. Poor ground conditions caused by unforeseen faults, areas of weaker than
anticipated rock, and/or higher than assumed differential stresses are issues that could
cause major disruptions to tunnel construction and operation. If not accounted for
properly in design, tunnel collapse or poor performance issues causing business
interruptions could result, thus tunnel design represents a significant risk for the Project
and warrants additional investigation in subsequent design phases. There are many
successful tunnel projects, including comparable tunnel projects in the KSM area, such
as the nearby Granduc Tunnel, that have addressed similar risks successfully. Higher
speed methods for long axis tunnelling are becoming more prevalent in mining and civil
applications and tunnelling technologies are developing rapidly. However, the cost of
mitigation versus the impact of schedule delays must be considered in a risk analysis.
Mitigations already incorporated include: the use of twinned tunnels to provide
opportunities to advance alternate headings in problem areas, drilling and geophysical
testing from surface, the use of probe and pilot drilling in areas of difficult ground
conditions, and obtaining the now in place permitting allowing early tunnelling starts.

The results of the risk analysis will include cost-benefit analyses of additional
investigations, assessment of risk sensitivities for alternate tunnelling methods, review of
available changes in designs or routings, and in some cases alternative overland systems
so that costs and risks of the alternatives can be considered in any decisions.

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25.11.3 CONSTRUCTION CRITICAL PATH
The construction critical path runs through early establishment of pioneering roads along
the TCAR and CCAR alignments, to establish access to the MTT portals, and then four
years of tunnel excavation to complete the twinned 23 km tunnels. Pioneering road
construction will be performed from the middle of Year -6 through Q2 Year -5 and
includes multiple headings supported by helicopters to install culverts, bridges, and
construction of the pioneering road that will expand to full width before the start of the
second construction winter in Year -5.

While considered feasible, the schedule is considered aggressive, and additional

measures to mitigate potential impacts completion of these roads may have on the
critical path is recommended for action in the next design phase. A notable mitigation to
the construction critical path is the fact that road construction permits have been granted
to Seabridge, allowing road construction to begin earlier than anticipated in this 2016
KSM PFS update.

25.11.4 METALLURGICAL PERFORMANCE AND PROCESS

Lower than expected metal recoveries and copper grade of the concentrate produced is
the principal process risk, particularly through the Project payback period, due to
significant deviations in metallurgical performance. Unexpected inferior metallurgical
performance would affect the Project economics.

Additional testwork is required to better characterize metallurgical response of

mineralization from the different ore sources. Further process condition and flowsheet
optimization would improve process design to accommodate potential variations in
metallurgical performance. Current recoveries and economic returns are estimated
based on the process design, mainly developed from the metallurgical test results of the
Mitchell samples. Samples from the Kerr, Sulphurets, and Iron Cap deposits were also
subjected to metallurgical tests and responded similarly to the Mitchell mineralization.

The PFS proposes to use energy efficient HPGR as a part of the comminution process.
The test results from the Mitchell and Sulphurets samples show that this mineralization
is amenable to HPGR treatment, although the Sulphurets samples are more resistant to
HPGR treatment as compared to the Mitchell samples. The HPGR circuit performance is
more sensitive to mill feed moisture and clay contents than other portions of the
comminution circuit. Lower than expected performance from the HPGR comminution
circuit due to higher than expected moisture and/or clay content can result in a reduction
of mill production that could have an impact on the Project economics.

25.11.5 BLOCK CAVES

A conservative approach was adopted for the design of the critical aspects of the Mitchell
and Iron Cap block caves that might impact meeting the production and mill feed
schedules. Examples of this include the rate at which the construction of the drawbells is
accomplished, the production ramp-up curve and maximum rate of draw of individual
drawpoints, the number of drawpoints available for production at any one time, and the
travel distance for the LHD vehicles. Design assumptions for all of these are within

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 demonstrated industry experience and are considered achievable. The development
advance rate during the critical pre-production period, and subsequently in the
production period, have been demonstrated to be industry achievable, and with the
technology advances that are currently being developed, may be demonstrated to be
conservative in the future. As further conservatism, technological advances with regard
to automated and battery powered equipment have not been incorporated in the design
at this stage. The adoption of these more advanced technologies may lead to
operational efficiencies and reduced costs in the future as they are studied further and
adopted into the design.

In developing the production and grade schedules using GEOVIA PCBC™ software, it has
been assumed that an infinite supply of zero grade waste rock is available above the
columns being drawn. This and other factors controlling the estimates of ore dilution
using GEOVIA PCBC™ have been chosen conservatively.

There are recognized uncertainties in predicting the fragmentation of the caved rock at
the drawpoints, and the relatively low-fracture intensity of the rock mass at Mitchell, and
to a lesser extent Iron Cap, led to the estimated fragmentation being assessed in some
detail. Other block caving mines such as Palabora Mine have demonstrated that with
careful planning and the availability of equipment to deal with oversize rock, drawpoint
production rates comparable to those proposed at Mitchell and Iron Cap are achievable.
Furthermore, if the ore pass and grizzly systems do not achieve the planned production
rate, and the material transported to the passes is coarser than expected, mitigation
measures can be introduced such as employing additional mobile breakage equipment
and redesigning the undercut blasting to enhance the fragmentation during the early
stages of the column draw.

As an additional measure to mitigate against possible adverse fragmentation issues at

the drawpoints, the designs for Mitchell and Iron Cap incorporate pre-conditioning of the
rock mass by hydraulic fracturing, which was not applied at Palabora Mine. This is
expected to enhance the fragmentation of the material reporting to individual drawpoints.
It also mitigates against possible concerns regarding adverse impacts from stress-
induced rock bursts at Mitchell, although the proposed depth of mining and the
geotechnical characteristics of the rock mass do not indicate that this will likely pose a
major issue. The stress conditions at Iron Cap are estimated to be relatively benign
because the deposit is located above the valley floor in a relatively stress-free zone.

The geotechnical characterization of the Mitchell deposit is based on a number of well-

positioned geotechnical boreholes that have been geotechnically logged in detail and
tested hydrogeologically. Some geotechnical holes have been drilled in the general
vicinity of the proposed access development and these holes provide adequate
indications of the quality of the rock mass to minimize major uncertainties. Further
mitigation of additional uncertainties will be achieved by undertaking further geotechnical
drilling in the future.

The geotechnical characterization of the Iron Cap deposit has been based on several
holes that were drilled for geotechnical purposes, but reliance was also placed on
comparisons of the geological, lithological, and alteration characteristics between the

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 Mitchell and Iron Cap deposits, and developing geotechnical correlations between the
two. The correlations were shown to be quite favorable, but further confirmation will be
required by undertaking additional geotechnical drilling in the future.

The spacing and layout of the drawpoints of 15 m by 15 m was conservatively selected to

achieve favorable interaction between draw columns, minimize early entry of waste
dilution material, and to maintain good draw control. Future studies may indicate that
this conservatism is more than is required, and an increased drawpoint spacing and
layout can possibly be adopted with associated enhanced project economics.

Industry standard approaches have been adopted to support the drawpoints and to
maintain their stability. If future analyses of abutment stresses and the interaction of the
progressive advance of the undercut on the underlying drawpoints indicate more adverse
stress conditions than currently estimated, this can be mitigated by installing higher
capacity and more resilient support. It can also be mitigated by adopting a stress-
shadowing advance undercut approach, instead of the currently proposed concurrent
undercut approach.

The maximum height of draw (HOD) assumed in the design, which controls the maximum
tonnage that is drawn at an individual drawpoint, has been limited to 500 m. Based on
favorable experience at a number of block cave mines operating in good quality rock, the
trend in the industry under these circumstances is to plan to increase the maximum HOD
to beyond 500 m. However, the more conservative 500 m limit has been adopted for the
Mitchell and Iron Cap designs. There is still the potential requirement for ongoing
rehabilitation of drawpoints and mucking drives as a result of changing stress conditions
and the adverse impact of secondary blasting. An estimate of the cost of this
rehabilitation has been made and this has been included in the block cave operating
costs.

The extent of surface disturbance from caving and the associated formation of the crater
and more peripheral surface cracking have been estimated conservatively for the
relatively good geotechnical quality of the rock mass at Mitchell and Iron Cap. Estimates
have also been made of the influence of this disturbance on the stability of the walls of
the Mitchell open pit and adjacent valley walls. Based on the analyses to date, all
permanent infrastructure is beyond the potential impact zone. Major infrastructure that
might be critically impacted has been conservatively located well beyond the potential
impact zone. If further assessments and future monitoring indicate a potential impact of
some of the less critical infrastructure, there is sufficient space on surface for this to be
re-located at modest additional cost. The Iron Cap block cave design does not include
infrastructure that might be influenced by the extent and nature of the surface
disturbance, other than the surface water runoff that might enter the cave that is
discussed further in this section.

The estimate of the inflow of surface runoff from rainfall and snowmelt within the
catchment area formed by natural slopes, the open pit (in the case of Mitchell), and the
crater and adjacent surface cracking, has been based on a 1-in-200 year event. A
conservative approach has been adopted in estimating the runoff coefficient, water
retention, and impeding factors which control the intensity of this runoff water reaching

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 the production levels underground. The inflow quantities and rates reaching the
underground workings are potentially very large for a 1-in-200 year event.

A water management system has been developed for Mitchell, which does not rely on any
temporary storage of water in any of the mine openings otherwise required for the
operation of the mine. Instead, dedicated water diversion tunnels with a large dedicated
storage capacity have been included in the design, with a dedicated shaft and pumping
system to extract the water to surface. If experience in the future indicates that the
storage capacity is too small to prevent flooding of the operational part of the mine, the
pumping rate storage volume can readily be increased or more water diversion tunnels
can be added for extra storage. Also, if there is concern about the capacity and
functionality of the partial diversion system beyond the rim of the pit that helps control
some of the inflow water, or if there is concern that an even larger event than the 1-in-
200 year event might occur, consideration can be given to diverting water underground
to temporarily flood areas that are benign and do not house critical underground
infrastructure, and/or to installing bulkhead doors that can be closed under extreme
conditions to limit flood damage to critical underground infrastructure.

The elevation of the production level at Iron Cap is higher than the Mitchell valley floor.
This provides for a much simpler water management system than at Mitchell. This is
based on gravity flow of water from the entry points underground to a short shaft that
connects to the North Slope Depressurization Tunnel. The water then gravity drains from
this tunnel to the WSF for treatment.

The development of voids beneath the back of the active cave, and the associated
concerns about hazardous conditions developing and air blasts occurring, is mitigated by
maintaining good knowledge about the cave profile as cave mining progresses. This
knowledge is obtained by ongoing monitoring of the geometry of the caved material using
techniques such as microseismic monitoring and seismic tomography, which are
important mitigation measures to maintain necessary draw control.

Experience at other block cave mines, where there is more potential for mud rushes to
occur because of the increased presence of fines (naturally occurring or generated by the
attrition of caved rock as it is drawn down) than those at Mitchell or Iron Cap, has shown
that such concerns can be mitigated. The measures that can be adopted include
monitoring of the flow of water from individual drawpoints, temporary closure of certain
areas that are deemed vulnerable until water flows at drawpoints decrease sufficiently,
and the adoption of remote mucking until conditions are deemed to be acceptable to
return to full entry.

25.12 PRELIMINARY ECONOMIC ASSESSMENT RISKS

25.12.1 UNDERGROUND MINING RISKS
Greenfield block cave projects have certain risks that are characteristic of the mining
method. The risks are fixed because the effectiveness of the design cannot be
determined until after large portions of the mine have been constructed and put into
service. The risk factors include:

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  cave performance such as cavability, propagation, fragmentation
 geotechnical issues resulting from mining induced stresses such as pillar
dimensions, production area design, and ground support designs
 these risk factors are often magnified when employing a workforce that does not
have experience in underground mining.

These risks are reduced when opening a new area in an existing mine because the new
project can take advantage of experience gained in the existing operation and will be
able to utilize experience labor, management, and technical staff.

25.12.2 MARKETING RISKS

A small number of the minor element assays of the final bulk concentrates from Deep
Kerr indicate that concentrations of arsenic, antimony and mercury may be near or above
typical smelter penalty limits. The concentrate minor element data should be reviewed
by a concentrate marketing specialist to identify potential concentrate marketing issues.
Additional testwork will identify the extent of the risk and whether it can be managed
through blending in the mine plan.

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26.0 RECOMMENDATIONS

26.1 INTRODUCTION
This section outlines areas to investigate for improvements to the KSM Project. A high-
level budgetary estimate for the completion of each recommended item is provided in US
dollars.

26.2 PRE-FEASIBILITY STUDY RECOMMENDATIONS

The QPS for this 2016 PFS agree that the project should advance to the next logical
phase of study along its development toward becoming an operating mine.

26.2.1 MINING
OPEN PIT AND RESERVES
During more advanced studies, the following optimization studies are recommended:

 Conduct a detailed blasthole drill study in conjunction with drill manufacturers to

determine site-specific penetration rates for the rock types from each mining
area. The 2016 PFS is based on typical values.
 Conduct a detailed haulage simulation study to refine the truck/shovel
production performance in the mining schedule. Simulations should also
investigate opportunities to reduce mining costs (e.g., combine pit and dump
design strategies to lower fuel consumption from increased downhill loaded
hauls). This optimization can have significant efficiency and cost impacts in
mountain mines.
 Analyze alternative equipment power solutions in conjunction with the
manufacturers, such as liquefied natural gas (LNG) and electric trolley assist.
 Evaluate the basal and selenium drain design(s) to reduce the volume
requirements, which could lead to reduced mining costs and greater flexibility in
the timing of waste rock placement.
 Obtain budgetary quotes from experienced mine contractors for the capital cost
estimates of constructing the initial bench access roads and mine area haul
roads.
 Obtain budgetary quotes for the operating costs estimates for an optional
leased truck fleet in the early years of the mine schedule (pre-production and
initial years of production).

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 The total estimated cost for these optimization studies is between US$50,000 to
US$75,000.

The open pit mine planning designs will need to be reworked to a feasibility-level of
detail. The total estimated cost for this open pit mine planning is between US$200,000
to US$250,000.

Also, close-spaced drilling and a higher resolution Mineral Resource model will be
required for the material in the first several years of open pit operations (Mitchell and
Sulphurets) to test for grade and metallurgical continuity. The estimated cost for the
extra drilling, assaying, Mineral Resource modeling, and metallurgical testing, is between
US$3 million and US$4 million.

UNDERGROUND
The following optimization studies are recommended for underground block cave mining
of the Mitchell deposit, beneath the Mitchell open pit, and of the Iron Cap deposit.

Mitchell
 Undertake a detailed study of the optimum pit profile to transition from open pit
to underground mining.
 Review available geotechnical logging information within the mineralized rock
beneath the pit and if deemed beneficial, geotechnically log additional available
core to upgrade assessments of fragmentation, drawpoint hang ups, oversize,
and drawpoint layout and spacing.
 Evaluate the impact of fragmentation, oversize, and hang ups on productivity.
 Undertake a detailed cost-benefit assessment regarding fragmentation and
mitigating rock stress impacts, and evaluate the associated impact on
schedules of incorporating the pre-conditioning as presently designed into the
overall design and mine plan to confirm it provides a net positive benefit.
 Undertake a study of the potential to increase the drawpoint layout and spacing
from the currently proposed 15 m by 15 m and maintain favorable interaction
between draw cones without experiencing adverse dilution and premature
reporting of sub-economic rock to the drawpoints.
 Undertake additional laboratory rock strength tests on core to characterize the
rock mass strength of the various lithologies and alteration types and
intensities.
 Undertake computer analyses of the stress conditions controlling the extent to
which stress-induced fracturing enhances primary fragmentation in the back of
the cave, and the potential to experience associated rock bursting as a result of
this stress-induced fracturing.
 Undertake computer analyses of the abutment and cave front stress
concentrations. Assess whether an advanced undercut approach, rather than
the presently proposed concurrent undercut approach, needs to be adopted to

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 control the stress concentrations on the drawpoints and maintain adequate
drawpoint stability.
 Undertake additional studies of the progressive formation of the crater and
resulting destabilizing influence of this on the overlying pit and natural valley
slopes. Conduct more detailed assessments of the overall surface disturbance
and the possible influence of this on the surface infrastructure adjacent to the
block cave operation.
 Develop and undertake a geotechnical drilling and logging program to
characterize the rock that the peripheral infrastructure will be excavated in,
including access ramps, ventilation shafts, water conveyance and storage
tunnels, crusher stations, underground excavations to support production
activities, etc.
 Undertake a detailed review of the surface water runoff inflows and the
underground water management system. Conduct optimization studies to meet
conveyance and temporary storage requirements to minimize flooding of the
mine and pump the water from the mine in the most cost effective manner.
 Undertake detailed GEOVIA PCBC™ scheduling studies to optimize caving front
and drawpoint sequencing and draw control requirements.
 Conduct mine productivity simulations to confirm operability and identify
potential restraints and restrictions in achieving the proposed production
schedules.
 Develop feasibility-level mine designs and designs of underground infrastructure
including crushers, conveyor systems, shops, and ventilation.
 Assess opportunities to incorporate mine automation and battery powered
equipment into the design to reduce ventilation demand and operating costs.

Iron Cap
Similar studies to those recommended for Mitchell are required for Iron Cap as well,
although in a number of cases the results of the assessments for Mitchell can be applied
to Iron Cap on a comparative basis, with the geotechnical characteristics of the Mitchell
and Iron Cap rock masses being somewhat similar. Studies are not required of a
transition from open pit to underground mining, and the underground water management
system at Iron Cap does not require temporary storage and pumping.

The current production schedule includes production from Iron Cap starting in Year 32,
and there are no transition restraints with other production sources in bringing Iron Cap
into production. Based on this, the level of study required for Iron Cap is less than for
Mitchell to undertake relevant economic assessments for a feasibility-level study.

Notwithstanding this, the most significant gap in advancing Iron Cap to a feasibility level
is that no geotechnical drilling and logging has been undertaken specifically directed to
characterizing the response of the rock mass to block cave mining. In the current study,
this has been done primarily by comparison and inference with the Mitchell deposit, and
limited geotechnical drilling for pit stability assessments in the mineralized rock. It is

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 recommended that a limited program of geotechnical drilling appropriate for block cave
mining assessments be undertaken at Iron Cap to advance the studies to a feasibility
level.

This feasibility-level underground work for both Mitchell and Iron Cap, including a limited
geotechnical drilling program at Iron Cap, is projected to cost between US$2.5 million to
US$3.0 million.

PIT SLOPES
Additional field work, including geotechnical drilling, hydrogeological testing, and
laboratory testing are recommended by BGC for the proposed Mitchell and Sulphurets
pits at the next stage of study. This work is not only for the open pit operations, but also
to examine the effect of the future Mitchell block cave on the excavated pit walls and
surrounding infrastructure. It is expected that additional work will be completed to
further refine each deposit's geological interpretation by Seabridge, including the location
of faults and alteration zones. Future work for the open pit slope design and
hydrogeological evaluations will focus on increasing the confidence level of the slope
designs and slope depressurization plans. Specific tasks to be completed include:

 Long-term pumping tests of the rock mass at each of the proposed open pits
using 6 to 10 inch diameter wells to provide bulk estimates of rock mass
hydraulic conductivity and provide data for the optimization of the slope
depressurization plan.
 Numerical stress/deformation modelling of the proposed Mitchell pit,
specifically the north and south slopes.
 Refinement of the design and timing for the proposed Mitchell NPWDA.
 Assessment of pit slope stability to infrastructure closely sited near the pit crest.
 A risk assessment for potential water into the pit over the Mitchell pit east wall
from flows exceeding the capacity of the MDT. The results of this risk
assessment should be used to guide the design of ramps on the final east wall
of the Mitchell pit. This assessment will also assist with evaluating integration of
the Mitchell NPWDA into the Water Management Plan.

It is estimated that the next stage of combined geotechnical and hydrogeology work for
the KSM Project will require a budget of approximately US$6 million for engineering fees,
geotechnical drilling, and hydrogeological drilling and testing.

26.2.2 ROCK STORAGE FACILITIES

KCB recommends that a geotechnical site investigation program be carried out for
further delineation and characterization of foundation soils in Mitchell Valley, within the
footprint of the Mitchell RSF, with a focus on the area of a known deposit of weak soils
near the MTT Mitchell portal. The characterization would use Standard Penetration (SPT)
testing and undisturbed sampling for collection of samples for laboratory strength testing.
This program will include:

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  Sonic geotechnical drillholes in the area adjacent to the MTT portal and in the
RSF toe above the WSF pond area. The holes should be advanced up to 60 m in
overburden, with Shelby tube samples and SPT tests. Mobilization of a sonic rig
for this program can be combined with sonic drilling in the TMF area for borrow
assessment.
 Test pits to assess surface soil conditions (for early-stage investigations these
will require helicopter supported equipment mobilization).
 Geotechnical testing program including consolidation, triaxial, direct shear, and
index testing.

The cost of this drilling and subsequent geotechnical laboratory program is estimated at
US$650,000.

A stability assessment and design review is required to assess the findings of the site
investigations and to review suitability of existing designs to mitigate the presence of this
known weak soil layer. This is estimated to cost US$80,000.

26.2.3 WATER
WATER STORAGE FACILITY AND MINE SITE WATER MANAGEMENT
KCB recommends additional hydrogeological and geotechnical site investigations in the
WSD footprint area including:

 Hydrogeological/geological data gap analysis and review of additional water

level and time series piezometer data to interrogate interaction of geological
model assumptions with hydrogeological model parameters.
 Additional geological mapping and geophysical surveying of the WSD footprint
area.
 Additional hydrogeological site investigations consisting of drilling six, 150 m
deep holes in the WSD area, with packer testing, televiewer downhole imaging,
and installation of multi-level piezometers equipped with data loggers. Based
on the results, assess the requirements for drilling of a large diameter well and
if required, conduct a larger scale pumping test, with associated monitoring
holes.
 Geotechnical testing included for WSD area hydrogeology drill holes to
characterize soils in the WSD footprint, including SPT sampling and geotechnical
laboratory testing program. Complete a test pit program in WSD footprint area
to assess soil conditions.
 Installation of thermistors chains within new or existing drill holes in the WSD
footprint area to obtain annual rock mass temperature variations with depth to
assess effect of temperature on grouting performance.
 Acid-base accounting (ABA) and geotechnical laboratory testing of local rock fill
sources for the WSD.

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  Geotechnical drilling and ice radar in the areas of the Mitchell Glacier diversion
inlets.

The cost of these site investigation programs is estimated at US$2.5 million, including an
allowance for drilling, helicopter support, and contractor costs, and excluding large-
diameter well drilling and testing.

Several of the IGRB recommendations for design updates to the WSD and Mine Site
water management were addressed within design updates included in the technical
reports developed for the 2016 KSM PFS update (Appendix H). The following design
studies are recommended to address the remaining IGRB recommendations:

 Optimization of WSD grouting gallery design, potential inclusion of initial

concrete valley plug structure at base of WSD and potential for WSD gravity
discharge structures.
 Assessment of local rock fill properties to examine potential for reduction of
WSD fill haul costs.
 Assessment of options for capture of selenium seepage from RSFs and from
other sources to develop an optimum strategy for control of selenium.
 Update of WSD and Mine Site water balance to incorporate revised hydrological
and meteorological parameters including updated estimates of response to
extreme events.
 Update of hydrogeological seepage models for WSD based on updated site
investigations and site parameters.
 Advancement of WSD, diversion tunnel, spillway and Mine Site water
management designs to a feasibility level of detail.

The cost of these design updates is estimated at US$2.0 million.

WATER BALANCE
Design parameters such as the 50-year, 100-year, and 200-year storm and flood events;
the 100-year dry year and 200-year wet year have been used in Project design for the
sizing of diversion ditches and tunnels and for evaluation of water quality in receiving
waters. These parameters have to date been developed from several years of on-site
precipitation and streamflow gauging, the nearby longer period Eskay Creek station, as
well as use of Global Climatic Models (GCMs). While these analyses provide suitable
design parameters for the PFS, more comprehensive analyses incorporating long-term
records in the wider region surrounding the sites are required for advanced Project
design phases. In general terms, the longer-term (20 to 30 plus years) meteorological
and runoff data from regional stations provide more reliable statistical distributions that
may then be extrapolated to the various areas of the site by correlating with on-site
stations, some of which have now been monitored for 8 years.

It is important for the Project design evolution that the meteorological and runoff
database is expanded and the design parameters refined by conducting a regional

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 hydrologic evaluation incorporating precipitation and stream flow monitoring data from a
larger area surrounding the mine site. Typically, the steps in such an analysis include:

 Selection of long term meteorological and runoff stations.

 Single station frequency analyses for the parameters of interest (such as
precipitation of durations ranging from hours to a year, annual maximum flood
peaks, etc.).
 Regional analyses to determine frequency curves applicable to the various areas
such as the Mine Site, the TMF area, etc.

Following completion of this metrological and runoff data base review, evaluation is
recommended to be undertaken to update the site-specific water balance that will be
used as the basis in future Project design. The cost recommended to complete this work
is estimated at US$400,000.

TEMPORARY WATER TREATMENT PLANTS

A total of eight TWTPs will operate during the construction period to manage potential
metals, TSS, and ammonia in drainage from tunnel portals, and from temporary
stockpiles of tunnel muck near the portals and other flows of contact water. The TWTPs
will include a grit pond, lime and flocculent preparation units, settling ponds as described
in Section 18.2.8.

Changing environmental regulations regarding the capacity of these treatment systems to

handle larger upset flow conditions have resulted in the requirement for substantial
increases in the sizes of the grit and settling ponds. Given these circumstances, and the
adherence to the overall philosophy of minimizing environmental impacts where possible,
it is recommended that the over strategy associated with the use of TWTPs be re-
evaluated to focus on the following:

 Are there alternative treatment systems that could result in a net decrease in
the surface disturbance associated with temporary water treatment systems,
while still achieving the discharge standards, required by the environmental
regulations?
 Could alternative approaches to project execution yield dual purpose facilities—
construction use, then different use during operations—that optimize the
approach to site water management systems, such as early construction of the
TMF cells to initially be used to store grit and act as a settling pond?

A budget of approximately US$250,000 will be required to complete this task.

GEOCHEMISTRY DATABASE
The geochemistry database for the 2012 KSM PFS was based on typical numbers of
samples, representative of geochemical properties of the ore, waste, and non-deposit
rock in the Project area. Annual updating of the geological models for the Project have
occurred since 2012, as reported in the 2016 KSM PFS update, and re-visiting of the
ABA geochemical block model is appropriate. An independent, geochemical review is

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 recommended to test model assumptions, particularly because it has been
recommended that exploration assay results be used as surrogates for more typical ABA
results, increasing the potential number of samples from approximately 2,200 to over
50,000 that could be used to develop the model. The intent of the surrogacy is to
improve the spatial representation of the sampling program and increase regulator
confidence in the ABA block model, as well as ensuring the validity of the existing model
as the Project moves into the next phase of study. A cost of US$100,000 is estimated for
completion of this study.

26.2.4 TMF AREA

KCB recommends additional hydrogeological and geotechnical site investigations in the
TMF footprint area consisting of:

 Hydrogeological data gap analysis and review of additional water level and time
series piezometer data. Data gap analysis to assess requirements for pumping
tests or other investigations.
 Data gap review of geotechnical (foundation) and geochemical (characterization
of borrow and diversion excavations) data requirements.
 Drilling and hydrogeological testing (packer, multilevel piezometer and data
logger installations) at the North, Saddle and Southeast seepage dams (three
drill holes, each hole of 70 m depth).
 Seep mapping and overburden characterization, additional overburden
permeability testing in the CIL Residue Cell area to further inform the next
design stages for determination of drain requirements beneath the Saddle Dam
and CIL Cell liner.
 Borrow and foundation geotechnical investigations consisting of six additional
sonic/SPT/core drill holes and test pits in the TMF dam footprint and borrow
areas with geotechnical laboratory test program. Test pitting for borrow
investigations may require helicopter support for equipment mobilization.

The cost of these site investigation and laboratory testing programs is estimated at
US$2.5 million including an allowance for drilling and helicopter support.

The following design updates are recommended to address remaining IGRB TMF area
recommendations:

 Update of TMF area hydrogeological and seepage models and review of required
seepage mitigations based on updated site investigations.
 Updates to drainage designs for TMF dam and CIL liner footprint areas based on
revised hydrogeological data and models with liner ballast assessment.
 Review of required TMF dam cross sectional designs required to meet seasonal
storage, freeboard related stability, starter dams and constructability
requirements relative to cycloning design optimizations, borrow availability and
feasibility level design requirements.

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  Review and update of volume/storage requirements for each cell, based on
revised CIL Residue cell volumes.
 Review of CIL Residue Cell subaqueous deposition system, and liner and drain
placement plans for constructability/operability and cost optimizations.
 Update to TMF area water balance with design updates for discharge pipeline
and diffuser system.
 Advancement of TMF area water management designs to FS-level.

The cost of these design updates is estimated at US$1.5 million.

26.2.5 TUNNELS
GEOTECHNICAL
KCB recommends additional geological and geotechnical investigations at the portal
locations, where these have not been investigated already, and also where feasible along
the Project tunnel alignments. The recommended investigations consist of:

 Data gap analysis for tunnel design parameters including geological,

geotechnical and geochemical aspects.
 Additional mapping and rock sampling to better characterize properties of
lithological units at the portals and along the alignments for geotechnical and
geochemical assessments.
 More detailed mapping of portal areas and targeted geophysical investigations
to assess locations of potential structures (e.g., faults, contacts or water bearing
structures along tunnel alignments).
 Drilling at select locations along the permitted MTT alignment (for example,
undrilled opportunities for readily accessible drilling to MTT elevation along the
alignment include 200 m deep, 500 m deep, and 750 m deep locations).
Drilling will provide an opportunity to obtain geotechnical and geochemical
samples for laboratory testing, to assess in situ stress regimes, and to perform
televiewer and packer testing
 Drilling for diversion tunnels and project infrastructure tunnels will involve
shallower holes, with focus on portal and inlet area rock mass characteristics
and sampling of lithological units.
 Geotechnical and geochemical laboratory testing on samples obtained from
drilling and mapping programs.

The programs will inform selection of the optimum tunnelling method, allow refinement of
project tunnelling risk, better identify diversion tunnel lining requirements, portal
locations and portal development designs and assist with determination of appropriate
contingencies. The cost of these programs is estimated to range between US$2.0 million
and US$3.0 million, including for drilling costs and helicopter support.

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 TUNNEL DESIGN
An expert-level risk assessment of the critical tunnels is recommended following the
tunnel geotechnical data gap analysis to identify aspects of tunnels with high
consequence to the construction schedule. This should also be done for water diversion
tunnels with high impact to future facilities. Some of the assessments can be deferred
until after start up. If the end results are design alternatives that cannot mitigate high-
consequence risk, then significant data must be collected regarding ground conditions
and geologic structure. The risk analysis, and any subsequent data collection and
studies, should be done prior to a FS so that the Project can be re-evaluated before
significant FS work starts. The analysis should include re-evaluation of opportunities and
risks with sensitivities of other tunneling methods to unforeseen conditions. Methods
reviewed should include high speed drill and blast, use of a single tunnel with an internal
dividing wall, or mechanical systems such as a Tunnel Boring Machine or a Continuous
Miner.

The results of the opportunity and risk analysis will indicate where, or if the following are
needed:

 Geophysical studies to identify major structures and geology to estimate

possible ground conditions.
 Drilling of areas along the tunnel alignment to confirm structures and geology
indicated in the geophysical survey.
 A detailed risk study may also inform if alternate mitigations such as tunnel
lining or other measures to improve tunnel stability and capacity can be
considered instead of the redundant water diversion tunnels included in the
water management designs at certain times during mine life and beyond.
 Ongoing analysis of tunneling method and machines is needed as this is a
continuously advancing technology.

The above geophysical surveys and drilling costs are already recommended in Section
26.7.

Following the completion of the above risk analysis, possible data acquisition programs,
and assessment of resultant alternative design concepts, advanced design updates and
budgetary quotes for costing of mitigation options may be needed at an estimated cost of
US$250,000.

26.2.6 METALLURGICAL TESTING AND PROCESS ENGINEERING

Further metallurgical test work to optimize process conditions and to establish design-
related parameters for the next stage of study is recommended. Tetra Tech makes the
following recommendations:

 Additional metallurgical test work and mineralogical evaluations should be

conducted to optimize process conditions and to establish design-related
parameters for the next stage of study. The test work should include variability

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 testing of samples from all deposits, especially from the Sulphurets, Upper Kerr,
and Iron Cap zones. The variability tests should be a part of the geo-
metallurgical testing program that is recommended for the Project to better
understand metallurgical responses of the mineralization in these resources.
The test program will provide inputs for geological modelling development and
mine plan update for better mill feed control. The cost of the test work,
including the initial stage of the geo-metallurgical testing, is estimated at
approximately US$2 million.
 Further study should be conducted to optimize the proposed cyanide recovery
and destruction methods (US$200,000).
 A metallurgical laboratory test program should be performed on ore composites
representing each year of the initial seven years of open pit mine production
from Mitchell and Sulphurets (US$200,000) according to the updated mining
plan.
 Further study into economical water treatment methods is recommended for
water from the CIL pond (US$200,000).

All the costs for the testing to verify metallurgical performance of the samples and collect
process design-related parameters do not include the sample collection and shipping
costs.

26.2.7 MTT TRANSPORT SYSTEM

The KSM Project should advance to more advanced levels of study. Along with updating
the level of detail in the train system designs, the following optimization studies are
recommended as part of the next level of study:

 Optimize the size and configuration of the train consists using dynamic train
movement modelling.
 Investigate alternative rail systems such as tracks, ballast and ties, and pre-
manufactured systems etc. to optimize supply and construction cost and
schedule impacts.
 Evaluate the construction cost and construction schedule of the MTT with
respect to tunnel dimensions and alignment, in conjunction with the above
optimization study of the train consists.
 Update the analysis of freight, fuel, lime and personnel transport requirements
through the MTT to support the mine area operations, especially if the other
project design changes affect these components.
 Define and coordinate labour requirements between train, Process Plant, and
Mitchell OPC.
 Engage several train system suppliers to optimize the train fleet prior to FS-level
budgetary quotes. Due to the specific requirements of the system, it may be
necessary to pay for these studies.

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 Train system designs should be updated during more advanced studies. The train
system engineering portion to FS-level detail is estimated to cost between US$250,000
to US$350,000.

26.2.8 KSM EXPLORATION

The QP responsible for Mineral Resources recommends that Seabridge continue
exploring around and beneath the currently recognized mineralized systems (Deep Kerr,
Sulphurets, Mitchell, and Iron Cap). These programs should follow past successes in the
district by re-examining all geologic controls to develop drill targets that focus on
potentially higher grade zones, which may be greatly controlled by a combination of
intrusive phases and structural preparation. A program consisting of 40,000 m
estimated to cost US$13 million should be considered by Seabridge over the next several
drilling seasons.

26.3 RECOMMENDATIONS FROM THE PRELIMINARY ECONOMIC ASSESSMENT

Amec Foster Wheeler recommends the PEA development option for the KSM project be
advanced to the next stage of evaluation. The following recommendations would support
more advanced studies.

26.3.1 DEEP KERR EXPLORATION ADIT

It is recommended that an exploration adit be developed from near the Sulphurets Valley
floor at the base of Kerr Mountain towards the south, to access areas of the deposit that
are difficult to drill from surface. The PEA-level analysis described in Section 24.0
indicates underground mining as the preferred mining method for the Kerr deposit. In
order to upgrade the Mineral Resources from Inferred to a higher-quality definition, close
proximity to the deposit is required because targeted drilling from the surface is
logistically difficult.

On September 26, 2016 Seabridge received the necessary permits from the BC
Government to develop the exploration adit.

Development of the exploration adit will consist of surface facilities, including water
treatment and a lined waste rock pile that will be covered at closure. Additionally,
approximately 2 km of drifting and hydrogeological testing will be carried out. The total
cost will be in the range of US$70 million.

26.3.2 DEEP KERR EXPLORATION AND MINERAL RESOURCE DRILLING

The QP responsible for Mineral Resources recommends that Seabridge conduct an infill
drilling program with the goal of upgrading as much Inferred Mineral Resources that were
used in the 2016 PEA. The majority of the effort should focus on the Deep Kerr deposit.
It is estimated that approximately 60,000 m of drilling may provide sufficient confidence
to allow for the upgrade of the Mineral Resources. The estimated cost for this infill
drilling campaign is US$20 million.

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26.3.3 DEEP KERR GEOTECHNICAL STUDIES
Amec Foster Wheeler recommends that the exploration drilling program on Deep Kerr
should be augmented with geotechnical activities, which will provide a better
understanding of the rock structure characteristics important for the mine design. These
activities include: additional data collection from exposures in the planned Deep Kerr
exploration adit; in conjunction with the proposed exploration drilling program on Deep
Kerr, core logging geotechnical surveys, Acoustic Televiewer surveys (ATV), and oriented
core data logging conducted. Following the data collection from the drilling program,
geotechnical assessment and modeling will then need to be integrated with the mine
design efforts. The expected costs of this geotechnical program is US$500,000
(additional to the cost of developing the exploration adit and exploration drilling).

26.3.4 DEEP KERR METALLURGICAL TESTWORK

Amec Foster Wheeler recommends that Seabridge perform further testwork for the Deep
Kerr mineralization, investigating the response of various zones to both flotation and
cyanidation. This will require composite sampling to assess:

 Specific energy, pressing force, and abrasion work to confirm suitability of the
HPGR approach to comminution. This testwork is to be done through the use of
HPGR testing, piston load testing and pilot plant work on samples.
 Optimization of primary and regrind milling will be necessary. Bond rod and ball
mill work index tests together with regrind jar test work will be necessary for the
sizing of ball and regrind mills.
 Flotation optimization which will include rougher flotation optimization, cleaning
work and confirmation of performance through rougher and cleaner batch
flotation work followed by locked cycle flotation testwork.
 Cyanidation amenability including direct cyanidation kinetics, reagent
consumption optimization, and retention time optimization. This testwork will
involve both direct cyanidation and CIL batch tests.
 Cyanide recovery through the SART approach will be tested through a
combination of bench scale batch and bench scale continuous work.

This work would confirm the applicably of the process flowsheet used in the 2016 PFS for
the Deep Kerr mineralization considered in the PEA.

Testing can be performed using drill core from past and future work. It is expected that
the comminution testwork would involve approximately 120 point samples requiring
approximately 1.5 t of material, 3 small scale continuous HPGR tests requiring another
1 t of material, and approximately 4 t of material for the pilot plant level HPGR work. The
smaller samples would be produced through diamond drill hole drilling while the large
quantities would be produced through bulk underground sampling. Subsequently,
comminution samples would undergo flotation and cyanidation testwork, both batch and
locked cycle. This would require approximately 200 tests of various forms. Comminution
testwork would cost approximately US$1 million, while the concentration work would cost

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 a further US$1 million, taking into account also assaying and mineralogical work. It is
expected that the new sampling by diamond drill hole work would be approximately
US$0.5 million if performed from underground working. It is also expected that the bulk
sample for HPGR work could be produced for another US$0.5 million if planned as part of
the overall underground drifting work planned.

This testing would confirm comminution, flotation and cyanidation viability. With
confirmation of the process parameters, the testing of domain composites and point
samples would address geometallurgical variability to a PFS level. The overall cost of the
program using both available and new sample would be approximately US$3 million to
provide information to the PFS level for Deep Kerr. This cost may be lower if drilling is
also performed in conjunction with other requirements but it may be also higher if
metallurgical issues are indicated by new drilling.

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27.0 REFERENCES

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ALS Canada, Ltd., ALS Metallurgy Kamloops (2013). Preliminary Metallurgical Testing –
Kerr Deep and Camp Zone KSM Project – (KM 3735). May 9, 2013.

ALS Canada, Ltd., ALS Metallurgy Kamloops (2014). Preliminary Metallurgical Testing –
Deep Kerr and Iron Cap Zones – KSM Project - (KM 4029, Part A). May 16, 2014.

ALS Canada, Ltd., ALS Metallurgy Kamloops (2014). Preliminary Metallurgical Testing –
Deep Kerr and Iron Cap Zones – KSM Project – (KM 4029, Part A). May 27, 2014.

ALS Canada, Ltd., ALS Metallurgy Kamloops (2015). Preliminary Metallurgical Testing –
Deep Kerr – KSM Project – (KM 4514). August 05, 2015.

ALS Canada, Ltd., ALS Metallurgy Kamloops (2015). Preliminary Metallurgical Testing –
Iron Cap – KSM Project – (KM 4672). August 04, 2015.

BC MEMPG (2009). Guide to Processing a Mine Project Application under the British
Columbia Mines Act. British Columbia Ministry of Energy, Mines and Petroleum
Resources, January 2009. http://www.coalwatch.ca/sites/default/files/Guide-to-
Processing-A-Mine-Project-Application-Under-The-British-Columbia-Mines-Act.pdf.

BC MEMPR (2008). Health, Safety and Reclamation Code for Mines in British Columbia.
British Columbia Ministry of Energy, Mines, and Petroleum Resources.
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(accessed November 2010).

BC MOE (2013). The Effluent Permitting Process under the Environmental Management
Act: An Overview for Mine Project Applicants. Ministry of Environment, April 2103.
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doc_mining_proponents_apr2013.pdf

BC MOF and BC MOE (1995). Riparian Management Area Guidebook. Government of

British Columbia: Victoria, BC.

BGC (2012). Preliminary Assessment of Open Pit Slope Instability Due to the Mitchell
Block Cave. December 24, 2012.

Brenda Mines Ltd. (1989). Preliminary Metallurgical Testwork on “106” Low Grade
Sample. Peachland, BC. May 1989.

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 Canadian Institute if Mining, Metallurgy and Petroleum (CIM) (2014). CIM Definition
Standards for Mineral Resources and Mineral Reserves. May 10, 2014.

CDA (2007). Dam Safety Guidelines.

http://www.imis100ca1.ca/cda/CDA/Publications_Pages/Dam_
Safety_Guidelines.aspx (accessed October 2012).

Contaminated Sites Regulation, BC Reg. 375/96.

DFO (1986). Policy for the Management of Fish Habitat. DFO/4486. Fish Habitat
Management Branch, Department of Fisheries and Oceans Canada: n.p.

Environmental Management Act, SBC. C. 53.

Febbo, et al. (2015). Geology of the Mitchell Au-Cu-Ag-Mo porphyry deposit, northwestern
British Columbia, Canada. British Columbia Ministry of Energy and Mines, British
Columbia Geologic Survey Paper 2015-1, 28 p.

G&T (2007). Preliminary Assessment on Mitchell Zone Samples (KM 1909). June 2007.

G&T (2008). Pre-Feasibility Metallurgical Testing Mitchell Zone – Kerr Sulphurets (KM
2153). September 2008.

G&T (2009). Metallurgical and Pilot Plant Testing on Samples from the Kerr-Sulphurets-
Mitchell (KSM) Project (KM 2344). December 2009.

G&T (2010). Ancillary Testing Kerr Sulphurets-Mitchell-KSM Project (KM 2755).

December 2010.

G&T (2010). Bench Scale and Pilot Plant Testing Kerr-Sulphurets-Mitchell Project (KM
2670), August 2010.

G&T (2010). Miscellaneous Metallurgical Testing on Samples From the KSM Project (KM
2535). March 2010.

G&T (2011). Data Reports (KM 2897). February – March 2011.

G&T (2011). Flotation and Cyanidation Testing Snowfields Samples, Composites and
Blends – (KM 3081). November 28, 2011.

G&T (2011). Preliminary Metallurgical Testing on Samples from the Iron Cap Zone – KSM
Project (KM 2748). January 2011.

G&T (2012). Flotation and CIL Cyanidation Testing – Kerr-Sulphurets-Mitchell Project –

(KM 3080). January 10, 2012.

G&T (2012). Ore Hardness and Flotation Testing – Kerr-Sulphurets-Mitchell (KSM) Project
– (KM 3174). January 6, 2012.

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 Golder (2011). Block Cave Mine Study. Report Number REP 0516_11. Submitted May17,
2011.

Golder (2012).Pre-Feasibility Block Cave Mine Design – Mitchell Deposit. Prepared for
Seabridge Gold Inc. Submitted May 2012.

Hazen (2008), Comminution Testing (Project # 10724). February 2008.

IGRB (2016). Review of Water Dam, Water Management, and Tailings Storage Systems,
KSM Project, British Columbia, Canada. Rev C.1. April 2016.

KCB (2009). 2008 KSM Site Investigation Report.

KCB (2010). 2009 KSM Site Investigation Report.

KCB (2011). 2010 KSM Site Investigation Report.

KCB (2012a). 2012 Site Investigation Report for the Mine Area.

KCB (2012b). 2012 TMF Site Investigations.

KCB (2012c). Engineering Design Update of Tailing Management Facility.

KCB (2012d). KSM Water Storage Dam - Value Engineering Study Report.

KCB (2013a). 2012 Geotechnical Design of Rock Storage Facilities and Design of
Associated Water Management Facilities (Technical Report in Support of 2012 PFS),
January 29, 2013.

KCB (2013b). KSM Project. Rock Storage Facilities Design Report. July 8, 2013.

KCB (2014). KSM Project Mitchell/McTagg RSF Water Collection for Selenium Treatment.
March 4, 2014.

KCB (2016). Best Available Technology (BAT) Study for Tailing Management at the KSM
Project. June 22, 2016.

Köeppern Machinery Australia Pty Ltd. (2010). High Pressure Comminution Test Work on
Processing of Mitchell Zone Ore. February 2010.

Lechner, M.J. (2007). Mitchell Creek Technical Report, Northern British Columbia, NI 43-
101 Technical Report prepared for Seabridge Gold.

Lechner, M.J. (2008a). Kerr-Sulphurets Technical Report, Northern British Columbia, NI

43-101 Technical Report prepared for Seabridge Gold.

Lechner, M.J. (2008b). Updated Mitchell Creek Technical Report, Northern British
Columbia, NI 43-101 Technical Report prepared for Seabridge Gold.

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 Lechner, M.J. (2009). Updated KSM Mineral Resources, NI 43-101 Technical Report
prepared for Seabridge Gold.

Lechner, M.J. (2010). January 2010 Updated KSM Mineral Resources, NI 43-101
Technical Report prepared for Seabridge.

Lechner, M.J. (2011). March 2011 Updated KSM Mineral Resources, NI 43-101
Technical Report prepared for Seabridge.

Lechner, M.J. (2014). Initial Deep Kerr Resource Estimate, British Columbia, Canada, NI
43-101 Technical Report.

Metal Mine Effluent Regulations, SOR/2002-222.

Mines Act, RSBC. C. 293. (1996b).

Nordic Minesteel Technologies, 2016, KSM – MTT Automated Rail Ore Transportation
System, May 2016.

Piteau Associates (1991). Mine Rock and Overburden Piles Investigation and Design
Manual: Interim Guidelines. Prepared for the British Columbia Mines Waste Rock Pile
Research Committee by Piteau Associates Engineering Ltd.
http://www.empr.gov.bc.ca/Mining/Permitting-Reclamation/
Geotech/Documents/MinedRock+OverburdenPiles/MinedRockOverburdenPile_Inves
tigation+DesignManual.pdf (accessed January 2013).

Placer Dome Inc. (1990). Metallurgical Research Centre, Kerr Project Report No.1.
October 1990.

Placer Dome Inc. (1991). Metallurgical Research Centre, Kerr Project Report No.2. April
1991.

Pocock (2009). Flocculant Screening, Gravity Sedimentation, Pulp Rheology, Vacuum

Filtration and Pressure Filtration Studies. December 2009.

Pretium (2011). Snowfield Resource Increase, press release dated February 23, 2011.

Rescan (2013). Application for an Environmental Assessment Certificate/Environmental

Impact Statement for the KSM Project. May 2013.

SGS Minerals Services (2010). An Investigation into the Grindability and Flotation
Characteristics of Two Samples From the KSM Deposit. February 2010.

SGS Minerals Services (2010). An Investigation into the Recovery of Cyanide and
Detoxification of Leach Tailing From Cyanidation of KSM Project Samples. February
2010.

Surface Science Western, the University Of Western Ontario (2010). Sub-microscopic

Gold determination of Cyanide Leach Feeds. December 21, 2010.

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 Surface Science Western, the University Of Western Ontario (2016). Sub-microscopic
Gold Determination of Leach Residues. August 30, 2016.

Tetra Tech (2012). 2012 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study. Document

No. 1252880100-REP-R0001-05. Prepared for Seabridge Gold Inc. June 22, 2012.

Tetra Tech (2014). Feasibility Study and Technical Report Update on the Brucejack
Project, Stewart, BC. Document No. 1491990100-REP-R0001-01. June 19, 2014.

Wardrop (2008). Kerr-Sulphurets-Mitchell Preliminary Economic Assessment 2008,

report written for Seabridge and later filed as NI 43-101 Technical Report, December
19, 2008.

Wardrop (2011). Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study Update 2011,

report written for Seabridge and later filed as NI 43-101 Technical Report, June 15,
2011.

Water Act, RSBC. C. 483. (2003).

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CERTIFICATE OF QUALIFIED PERSON

I, R.W. Parolin, of Prince George, British Columbia, do hereby certify:

 I am a Senior Project Engineer with McElhanney Consulting Services Ltd. with a business
address at 12-556 North Nechako Road, Prince George, British Columbia, V2K 1A1.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of New Brunswick, (B.Sc., Forest Engineering, 1974).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#11134).
 My relevant experience is 35 years of location, survey, design, and construction of roads in
the Forestry, Mining, and Oil & Gas sectors.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was on June 21, 2008, and during the
summers of 2009, 2010, and 2011.
 I am responsible for Sections 1.17.1, and 18.13 of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study” dated March 31, 2010, and the “Kerr-Sulphurets-Mitchell (KSM)
Prefeasibility Study Update” dated June 15, 2011.
 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
section 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 1st day of November, 2016 at Prince George, British Columbia.

“Original document signed and sealed by

R.W. Parolin, P.Eng.”
R.W. Parolin, P.Eng.
Senior Project Engineer
McElhanney Consulting Services Ltd.
CERTIFICATE OF QUALIFIED PERSON

I, Derek Kinakin, M.Sc., P.Geo., P.G., of Kamloops, British Columbia, do hereby certify:

 I am a Senior Engineering Geologist with BGC Engineering Inc. with a business address at
234 St. Paul Street, Kamloops, British Columbia, V2C 6G4.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of Simon Frasier University (B.Sc. (Hons), 2002; M.Sc., 2005).
 I am a member in good standing of Association of Professional Engineers and Geoscientists
of British Columbia (#32720).
 My relevant experience includes 14 years of rock mechanics research, slope stability
assessments, and slope designs for open pit mines in Canada, US, and Africa.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was August 19th to 21st, 2013.
 I am responsible for Sections 1.16, 16.2.5, and 26.2.1 (pit slopes) of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had no prior experience with the Property that is the subject of this 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
section 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 1st day of November, 2016 at Kamloops, British Columbia.

“Original document signed and sealed by

Derek Kinakin, M.Sc., P.Geo., P.G.”
Derek Kinakin, M.Sc., P.Geo., P.G.
Senior Engineering Geologist
BGC Engineering Inc.
CERTIFICATE OF QUALIFIED PERSON

I, J. Graham Parkinson, P.Geo., of Vancouver, British Columbia, do hereby certify:

 I am a Geoscientist with Klohn Crippen Berger Ltd. with a business address at #500-2955
Virtual Way, Vancouver, British Columbia, V7M 4X6.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of British Columbia, (Bachelor’s Degree – Physics, 1978),
and the University of Alberta (Special Certificate – Geophysics, 1984).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#19008).
 My relevant experience includes 20 years with Klohn Crippen and Klohn Crippen Berger
engaged in the evaluation and development of mine waste and water management facilities;
involvement in over 20 mine waste facilities; involvement in a number of Environmental
Impact Assessments, Baseline Studies, Mine Waste Facility Site Investigations, and the
design of several major mine tailings dams; and 8 years of experience in engineering and
exploration geophysics for the mining, engineering, and petroleum industries.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was from June 6 to 8, 2016, as well as
during 2007, 2008, 2009, 2012 and 2014.
 I am responsible for Section 1.14, 18.2, 24.18.1 (water management and tailings
management), 25.8, 26.2.2, 26.2.3 (water storage dam and mine site water management),
26.2.4, 26.2.5 (geotechnical), and 27.0 (only references from sections for which I am
responsible) of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell (KSM)
Prefeasibility Study Update” dated June 15, 2011 and the KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study” dated June 22, 2012 .
 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
section 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 31st day of October, 2016 at Vancouver, British Columbia.

“Original document signed and sealed by

J. Graham Parkinson, P.Geo.”
J. Graham Parkinson, P.Geo.
Senior Geoscientist
Klohn Crippen Berger Ltd.
CERTIFICATE OF QUALIFIED PERSON

I, Hassan Ghaffari, P.Eng., of Vancouver, British Columbia, do hereby certify:

 I am a Director of Metallurgy with Tetra Tech WEI Inc. with a business address at Suite 1000,
10th Floor, 885 Dunsmuir Street, Vancouver, BC, V6C 1N5.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of Tehran (M.A.Sc., Mining Engineering, 1990) and the
University of British Columbia (M.A.Sc., Mineral Process Engineering, 2004).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#30408).
 My relevant experience includes 25 years of experience in mining and plant operation,
project studies, management, and engineering.
 I am a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
 I conducted a personal inspection of the Property on September 20, 2014.
 I am responsible for Sections 1.1, 1.2, 1.4, 1.10, 1.17.3, 1.18, 1.19, 1.21, 1.23.1, 2.1,
2.2.1, 2.3, 2.4 2.5, 3.1, 18.1, 18.5, 18.7, 18.8, 18.9, 18.10, 18.15, 18.16, 18.17, 21.1 and
21.2 (all other capital costs except for open pit mining, underground mining, permanent
electrical power supply and distribution, energy recovery, NTL contribution and MTDT mini
hydro generation station costs), 22.0, 25.1, 25.9, 25.11.3, 26.1, and 27.0 (only references
from sections for which I am responsible) of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study” dated
June 22, 2012.
 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
section 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 3rd day of November, 2016 at Vancouver, British Columbia

“Original document signed and sealed by

Hassan Ghaffari, P.Eng.”
Hassan Ghaffari, P.Eng.
Director of Metallurgy
Tetra Tech WEI Inc.
CERTIFICATE OF QUALIFIED PERSON

I, Jianhui (John) Huang, Ph.D., P.Eng., of Coquitlam, British Columbia, do hereby certify:

 I am a Senior Metallurgist with Tetra Tech WEI Inc. with a business address at Suite 1000,
10th Floor, 885 Dunsmuir Street, Vancouver, British Columbia, V6C 1N5.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of North-East University, China (B.Eng., 1982), Beijing General Research
Institute for Non-ferrous Metals, China (M.Eng., 1988), and Birmingham University, United
Kingdom (Ph.D., 2000).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#30898).
 My relevant experience includes over 30 years involvement in mineral processing for base
metal ores, gold and silver ores, and rare metal ores.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was September 16, 2008.
 I am responsible for Sections 1.12, 1.13, 1.20, 3.1, 13.0, 17.0, 18.6, 19.0, 21.3 (excluding
open pit and underground mining cost), 24.19, 25.7, 25.11.4, 26.2.6, and 27.0 (only
references from sections for which I am responsible) of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell (KSM)
Prefeasibility Study Update” dated June 15, 2011 and “2012 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study” dated June 22, 2012.
 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
section 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 3rd day of November, 2016 at Vancouver, British Columbia.

“Original document signed and sealed by

Jianhui (John) Huang, Ph.D., P.Eng.”
Jianhui (John) Huang, Ph.D., P.Eng.
Senior Metallurgist
Tetra Tech WEI Inc.
CERTIFICATE OF QUALIFIED PERSON

I, James H. Gray, P.Eng., of Calgary, Alberta, do hereby certify:

 I am a Mining Engineer with Moose Mountain Technical Services with a business address at
#210 1510 2nd Street North, Cranbrook, British Columbia, V1C 3L2.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of British Columbia, (Bachelor of Applied Science – Mineral
Engineering, 1975).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#11919), Engineers Geoscientists New Brunswick
(#L5018), and the Association of Professional Engineers, Geologists, and Geophysicists of
Alberta (#M47177).
 My relevant experience includes operation, supervision, and engineering in North America,
South America, Australia, Eastern Europe, and Greenland.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was on September 25th, 2008;
September 10th, 2009; and April 13th, 2010.
 I am responsible for Sections 1.11 (open pit mining), 1.17.4, 1.17.5, 15.1, 15.2, 15.4 (open
pit mining), 16.1, 16.2 (except 16.2.5), 16.4 (open pit mining), 18.3, 18.4, 21.1 (open pit
mining costs), 21.2 (open pit mining costs), 21.2.3 (open pit mining costs) 25.2.2, 25.3,
25.5, 25.6, 25.11.1, 25.11.2, 26.2.1 (open pit and reserves), 26.2.5 (tunnel design),
26.2.7, and 27.0 (only references from sections for which I am responsible) of the Technical
Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had previous involvement with the property that is the subject of the Technical Report,
in acting as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment 2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary
Economic Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-
Mitchell (KSM) Prefeasibility Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study Update” dated June 15, 2011, and the “2012 KSM (Kerr-
Sulphuretes-Mitchell) Prefeasibility Study” dated June 22, 2012 and amended November
11, 2014.
 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
section 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 3rd day of November, 2016 at Vancouver, British Columbia.

“Original document signed and sealed bu

James H. Gray, P.Eng.”
James H. Gray, P.Eng.
Principal Mining Engineer
Moose Mountain Technical Services
CERTIFICATE OF QUALIFIED PERSON

I, Kevin Jones, P.Eng., of St. Albert, Alberta, do hereby certify:

 I am the Vice President – Arctic Development with Tetra Tech with a business address at
14940, 123 Ave NW, Edmonton, Alberta, T5V 1B4.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of Lakehead University, (B.Eng. Civil, 1981).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#L38044), Association of Professional Engineers and
Geoscientists of Alberta (#M34713) and the Northwest Territories (#L341).
 My relevant experience includes over 32 years of geotechnical engineering on a variety of
arctic resource based projects. The bulk of the work has focused on the design of
infrastructure for these projects, including all-weather and seasonal access roads. Specific
involvement on the world’s longest and most advanced winter road, the Tibbett to Contwoyto
Winter Road (TCWR) in Northwest Territory, is applicable to this project. I have also selected
routes and evaluated temporary winter access roads for two mining projects in Nunavut
(over 100 km each) and an oil field development project in northwestern Siberia, Russia
(200 km). I have also been involved in overseeing the evaluation of drilling pads for support
of exploration drilling rigs on floating ice covers and the use of offshore ice roads in the
Alaskan and Canadian Beaufort Sea.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was from September 12 to 13, 2011.
 I am responsible for Sections 1.17.2 and 18.14 of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study” dated March 31, 2010, and the “Kerr-Sulphurets-Mitchell (KSM)
Prefeasibility Study Update” dated June 15, 2011, and the “KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study” dated June 22, 2012.
 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
section 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 1st day of November, 2016 at Edmonton, Alberta.

“Original document signed and sealed by

Kevin Jones, P.Eng.”
Kevin Jones, P.Eng.
Vice President – Arctic Development
Tetra Tech
CERTIFICATE OF QUALIFIED PERSON

I, Michael J. Lechner, P.Geo., RPG, CPG, of Stites, ID, USA, do hereby certify:

 I am an independent consultant and owner of Resource Modeling Inc., an Arizona

Corporation, with a business address at 124 Lazy J Drive, PO Box 295, Stites, ID, 83552.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of Montana, (B.A. Geology, 1979).
 I am a registered professional geologist in the State of Arizona (#37753), a Certified
Professional Geologist with the American Institute of Professional Geologists (#10690), a
Registered Member of the Society of Mining, Metallurgy and Exploration (#4124987) and
professional geologist with the Association of Engineers and Geoscientists of British
Columbia (#155344).
 My relevant experience includes over 36 years of work as an exploration geologist, mine
geologist, engineering superintendent, and resource estimator for a variety of precious metal
and base metal deposits located around the world.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was from September 11th to September
14th, 2015.
 I am responsible for Sections 1.5, 1.6, 1.7, 1.8, 1.9, 3.1, 4.0, 5.0, 6.0, 7.0, 8.0, 9.0, 10.0,
11.0 12.0, 14.0, 23.0, 25.2.1, 26.2.8, 26.3.2, and 27.0 (only references from sections for
which I am responsible) of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the following reports:

 “Mitchell Creek Technical Report, Northern British Columbia, NI 43-101 Technical

Report”, April 6, 2007
 “Kerr-Sulphurets Technical Report, Northern British Columbia, NI 43-101 Technical
Report” February 29, 2008
 “Updated Mitchell Creek Technical Report, Northern British Columbia” dated March 27,
2008.
 “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment 2008”, dated December
22, 2008.
 “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment Addendum – 2009” dated
September 8, 2009
 “January 2010 Updated KSM Mineral Resources” dated January 25, 2010
 “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study” dated March 31, 2010
 “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study Update” dated June 15, 2011
 "NI 43-101 Technical Report of Initial Deep Kerr Resource, British Columbia, Canada",
dated March 31, 2014.
  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
section 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 3rd day of November, 2016 at Stites, Idaho.

“Original document signed and sealed by

Michael J. Lechner, P.Geo., RPG, CPG”
Michael J. Lechner, P.Geo., RPG, CPG
President
Resource Modeling Inc.
CERTIFICATE OF QUALIFIED PERSON

I, Neil Brazier, P.Eng., of Richmond, British Columbia, do hereby certify:

 I am a Principal with WN Brazier Associates Inc. with a business address at #8–3471 Regina
Ave., Richmond, BC.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of the University of Saskatchewan (B.Sc. Electrical Engineering, 1969).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#8337).
 My relevant experience includes engineering, construction supervision, and commissioning
of a large number of diesel and combustion turbine power plants, high-voltage transmission
lines and substations for mining applications.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was September 1 to 4, 2013.
 I am responsible for Sections 1.17.6, 18.11, 18.12, and portions of Section 21.1 and 21.2
related to permanent electrical power supply and distribution, energy recovery, NTL
contribution, and MTDT mini hydro generation station costs of the Technical Report.
 I am independent of Seabridge Gold Inc. as defined by Section 1.5 of the Instrument.
 I have had involvement with the property that is the subject of the Technical Report, in acting
as a Qualified Person for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment
2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell Preliminary Economic
Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell
(KSM) Prefeasibility Study” dated March 31, 2010, and the “Kerr-Sulphurets-Mitchell (KSM)
Prefeasibility Study Update” dated June 15, 2011.
 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
section 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 3rd day of November, 2016 at Vancouver, British Columbia.

“Original document signed and sealed by

Neil Brazier, P.Eng.”
Neil Brazier, P.Eng.
Principal
WN Brazier Associates Inc.
CERTIFICATE OF QUALIFIED PERSON

I, Pierre Pelletier, P.Eng., of Vancouver, British Columbia, do hereby certify:

 I am an Environmental Engineer with ERM Consultants Canada Ltd. with a business address
at 1500-1111 West Hastings St., Vancouver, British Columbia, V6E 2J3.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of University of Montana, Montana College of Mineral Science and
Technology (Environmental Engineering, 1992).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (#27928).
 My relevant experience was gained over 20 years working in mining and the environment. I
have experience managing Environmental and Social Impact Assessments, permitting
treatment plants and mine closure plans, leading due diligences and environmental audits
and the environmental and social aspects of several Preliminary Economic Assessments,
Pre-Feasibility and Feasibility Studies.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was on May 16, 2012
 I am responsible for Sections 1.15, 20.0, 24.20, 26.2.3 (water balance, temporary water
treatment plants, and geochemistry database), and 27.0 (only references from sections for
which I am responsible) of the Technical Report.
 I am independent of Seabridge Gold 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
section 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 3rd day of November, 2016 at Vancouver, British Columbia.

“Original document signed and sealed by

Pierre Pelletier, P.Eng.”
Pierre Pelletier, P.Eng.
Division Managing Director, Canada
ERM Consultants Canada Ltd.
CERTIFICATE OF QUALIFIED PERSON

I, Ross David Hammett, Ph.D., P.Eng., of Burnaby, British Columbia, do hereby certify:

 I am a Senior Engineer and Principal with Golder Associates Ltd. with a business address at:
500-4260 Still Creek Drive, Burnaby, British Columbia, Canada, V5C 6C6.
 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).
 I am a graduate of James Cook University of North Queensland (Ph.D., 1976; M.Eng.Sc.,
1972; B.E Civil, 1970).
 I am a member in good standing of the Association of Professional Engineers and
Geoscientists of British Columbia (# 11020).
 I have 40 years of experience in mining and civil engineering. I have provided consulting
services for more than 150 underground mining projects and has provide services related to
mine planning, mining method selection, mine design, geotechnical studies, support
designs, blasting, backfill, caving mechanics, rock stress control, geohydrology, mine
dewatering, mining systems, mining automation, and environmental aspects of mining.
 I am a “Qualified Person” for purposes of National Instrument 43-101 (the “Instrument”).
 My most recent personal inspection of the Property was on October 18 and 19, 2011.
 I am responsible for Sections 1.11 (underground mining), 15.1, 15.3, 15.4 (underground
mining), 16.1, 16.3, 16.4 (underground mining), 21.1 (costs pertaining to underground
mining), 21.2 (costs pertaining to underground mining), 21.3 (costs pertaining to
underground mining), 24.16.3, 24.16.4, 24.18.4, 24.18.5, 25.4, 25.11.5, 25.12.1, 26.2.1
(underground), 26.3.1 of the Technical Report.
 I am independent of Seabridge Gold 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
section 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 3rd day of November, 2016 at Burnaby, British Columbia.

“Original document signed and sealed by

Ross D. Hammett, Ph.D., P.Eng.”
Ross D. Hammett Ph.D, P.Eng
Senior Engineer & Principal
Golder Associates Ltd.
 CERTIFICATE OF QUALIFIED PERSON

 I, Simon Allard, am employed as a Principal Consultant and Study Manager with Amec Foster
Wheeler Americas Limited with a business address at 400 – 111 Dunsmuir Street, Vancouver, BC,
V6B 5W3, Canada.

 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).

 I am a graduate of Université Laval with a Baccalaureat cooperatif en génie des mines et de la

minéralurgie Degree in 2004.

 I am a member in good standing with the Association of Professional Engineers and Geoscientists
of British Columbia, Canada.

 I have practiced my profession for 12 years in the mining industry. My relevant experience includes
cash flow modelling, risk evaluation, financial analysis, marketing studies, mine planning, and
mining study supervision.

 I am a “Qualified Person” for those sections of the Technical Report that I am responsible, for the
purposes of National Instrument 43-101 (NI 43-101).

 I have not completed a personal inspection of the Property.

 I am responsible for Section 1.3, 1.4, 1.22, 1.23.2, 2.2, 2.2.2, 2.3, 2.4, 3.2, 24.0, 24.16.1, 24.18,
24.18.1, 24.18.1(Open Pit Rock Storage Facility, MTT Rail System, Facilities-Buildings and
Services), 24.18.2, 24.21.0, 24.21.1, 24.21.1( Basis of the Estimate, Indirect and Contingency,
Owners Capital Costs, Sustaining Capital), 24.21.2, 24.21.2(Baisis of the estimate, Open Pit Mine
Operating Costs, Infrastructure Operating Costs), 24.21.3, 24.22, 25.1, 26.3, 27 of the Technical
Report.

 I am independent of Seabridge Gold Inc. as independence is defined by Section 1.5 of NI 43-101.

 I have worked on a review of the 2012 PFS study in 2014.

 I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been
prepared in compliance with NI 43-101.

 As of the effective date of the Technical Report, 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.

Dated this 3th day of November, 2016.

“signed and sealed”

Simon Allard, P.Eng.

Amec Foster Wheeler

111 Dunsmuir St, Suite 400,
Vancouver, BC, www.amecfw.com
Canada, V6B 5W3
Tel: +1 604-664-4315
 CERTIFICATE OF QUALIFIED PERSON

 I, Ignacy (Tony) Lipiec, am employed as Director, Process Engineering with Amec Foster Wheeler
Americas Limited with a business address at 400 – 111 Dunsmuir Street, Vancouver, BC, V6B 5W3,
Canada.

 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).

 I am a graduate of the University of British Columbia with a B.A.Sc. degree in Mining & Mineral
Process Engineering, in 1985.

 I am a member in good standing with the Association of Professional Engineers and Geoscientists
of British Columbia, Canada.

 I have practiced my profession for 31 years in the mining industry. My relevant experience includes
metallurgical design and process engineering for base metal and precious metal projects in North
and South America. My project work and work experience includes Escondida, Pebble, Red Chris,
Mount Milligan, Huckleberry, Bell Copper, Equity Silver and Mount Polley.

 I am a “Qualified Person” for those sections of the Technical Report that I am responsible, for the
purposes of National Instrument 43-101 (NI 43-101).

 I have not completed a personal inspection of the Property.

 I am responsible for Section 1.3, 1.22, 1.23.2, 3.2, 24.17, 24.21.0, 24.21.1, 24.21.1(Basis of
Estimate, Sustaining Capital), 24.21.2, 24.21.2(Basis of the Estimate, Process Operating Costs,
G&A Operating Costs), 24.21.3, 25.1, 25.12.2, 26.3.4, 27 of the Technical Report.

 I am independent of Seabridge Gold Inc. as independence is defined by Section 1.5 of NI 43-101.

 I was involved in a review of the metallurgical test program on the KSM Project in 2014 and made
recommendations on additional testwork.

 I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been
prepared in compliance with NI 43-101.

 As of the effective date of the Technical Report, 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.

Dated this 3th day of November, 2016.

“signed and sealed”

Ignacy (Tony) Lipiec, P.Eng.

Amec Foster Wheeler

111 Dunsmuir St, Suite 400,
Vancouver, BC, www.amecfw.com
Canada, V6B 5W3
Tel: +1 604-664-4315
 CERTIFICATE OF QUALIFIED PERSON

 I, Mark Ramirez, am employed as a Principal Mining Engineer with Amec Foster Wheeler E&C
Services Inc. with a business address at Suite 2-1000, 2000 South Colorado Blvd, Denver, CO,
80222, USA.

 This certificate applies to the technical report entitled “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment”, with an effective date of
October 6, 2016 (the “Technical Report”).

 I am a graduate of the Colorado School of Mines with a Bachelor of Science Degree in Mining
Engineering, in 1997.

 I am in good standing as a Registered Member of the Society for Mining, Metallurgy, and
Exploration.

 I have practiced my profession for 20 years in the mining industry. My relevant experience includes
a decade as a mining engineer at Freeport’s Henderson and Grasberg underground mines,
consulting studies on underground studies for the expansion at Bingham Canyon in Utah, and the
Maturi mine in Minnesota, and the Fruta del Norte project in Ecuador. I provided in-depth senior
consulting services for Codelco’s El Teniente New Mine Level and Chuquicamata Underground
caving mine projects in Chile. I worked full time on the value engineering, feasibility study and
detailed engineering for the 95,000 tpd block caving development at Oyu Tolgoi.

 I am a “Qualified Person” for those sections of the Technical Report that I am responsible, for the
purposes of National Instrument 43-101 (NI 43-101).

 I have not completed a personal inspection of the Property.

 I am responsible for Section 1.3, 1.22, 1.23.2, 3.2, 24.16.2, 24.18, 24.18.3, 24.21.0, 24.21.1,
24.21.1(Basis of the Estimate, Sustaining Capital), 24.21.2, 24.21.2(Basis of the Estimate,
Underground Mine Operating Costs), 24.21.3, 25.1, 25.12.1, 26.3.3, 27 of the Technical Report.

 I am independent of Seabridge Gold Inc. as independence is defined by Section 1.5 of NI 43-101.

 I was briefly involved with some scoping level mining exercises in 2014 for Deep Kerr.

 I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been
prepared in compliance with NI 43-101.

 As of the effective date of the Technical Report, 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.

Dated this 3th day of November, 2016.

“signed and sealed”

Mark Ramirez, RM SME

Amec Foster Wheeler E&C Services, Inc.

2000 South Colorado Blvd, Suite 2-1000,
www.amecfw.com
Denver, CO, 80222, USA
Tel: +1 303 935-6505