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IZOK CORRIDOR PROJECT

IZOK CORRIDOR PROJECT. NUNAVUT MINING SYMPOSIUM Iqaluit, April 19, 2012 Overview of the Izok Corridor Project charlotte.mougeot@mmg.com. IZOK CORRIDOR PROJECT Overview. MMG : a newcomer in Canada: Zinc Strategy Project History Major decisions made in 2010 and 2011 2012 Major Tasks

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IZOK CORRIDOR PROJECT

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  1. IZOK CORRIDOR PROJECT NUNAVUT MINING SYMPOSIUM Iqaluit, April 19, 2012 Overview of the Izok Corridor Project charlotte.mougeot@mmg.com

  2. IZOK CORRIDOR PROJECT Overview • MMG : a newcomer in Canada: Zinc Strategy • Project History • Major decisions made in 2010 and 2011 • 2012 Major Tasks • Overview of the Izok Corridor Project • High Lake • Izok • All season Road • Port and Shipping

  3. MMG OPERATING MINES Century (Queensland, Australia) Sepon (Lao PDR) • Australia’s largest open pit zinc mine. • A gold and copper operation that produces copper cathode and gold dore. Golden Grove (Western Australia) Rosebery (Tasmania, Australia) • An underground mine that produces zinc, copper, and lead and precious metals concentrates. • An underground mine that produces zinc, copper, lead concentrates, and gold dore.

  4. MMG Zinc Strategy • MMG wants to grow its zinc business based on strong price fundamentals: • Investigations into existing and potential operations • knowledge of supply and demand in China • Century Mine 500 t zinc metal in concentrate shutting down in 2016 • Dugald River to replace half of the zinc production lost from Century • 40% of Izok Corridor total revenue comes form copper that aligns with Anvil copper mine

  5. MMG Zinc Strategy

  6. IZOK CORRIDOR PROJECT Selected Option for Feasibility Study Zinc and Copper Concentrate from both Izok and High Lake as the base business case: both needed for an economic project One plant only for both mines: Mine and Mill at Izok, tailings at Izok Satellite Mine at High Lake, crusher only no plant Port at Grays Bays, storage shed, fuel storage and camp All-weather Road – from Grays Bay to High Lake and Izok sites : 350 km Transport concentrate by truck from Izok to Grays Bay. Concentrate from both High Lake and Izok ore Trucks pick up crushed High Lake Ore on the way back south and bring to Izok for processing Ships at the port from early to mid August to October only NO year round shipping

  7. IZOK CORRIDOR PROJECTProject History • DISCOVERY • High Lake • Kennarctic Explorations discovered High Lake in the mid 1950 by airborne reconnaissance; followed by drilling • Dormant until 1991; Kennecott performed 2 years of further exploration • Izok • Texasgulf Sulphur (Texasgulf) discovered Izok in the early 1970’s through geophysical survey and drilling • Acquired by Falconbridge in 1985, but no more work carried out until 1993 when it was acquired by Minnova (renamed Metall Mining Corp, then Inmet)

  8. IZOK CORRIDOR PROJECTProject History • OWNERSHIP since 2000 • Wolfden Resources • 2001- acquires High Lake from Kennecott Canada Inc. • 2006- acquires Izok from Inmet Mining Corp. • Zinifex • 2007 -acquires Wolfden Resources • Merged with Oxiana in 2008 to form OZ minerals • MMG • Subsidiary of China Minmetals • 2009 -Acquired OZ Mineral Assets except for Prominent Hill

  9. IZOK CORRIDOR PROJECTProject History • STUDIES • 1994 Izok - Feasibility Study by Bechtel/CESL. Port near Kuglutuk • 1996 Izok - Feasibility Study (Luzok Project) by Bechtel. Process ore at Lupin • 2001 Update 1994 Izok Feasibility Study by Bechtel/CESL; port at Bathurst • 2005 High Lake & Ulu - Prefeasibility Study by Wardrop. Port at Grays Bay • 2006 Preliminary Economic Assessment of High Lake by Wardrop • 2006 Preliminary Economic Assessment of Izok by Wardrop • 2008 Izok Prefeasibility Study by Hatch; Port at Grays Bay • 2010 Izok Prefeasibility Study by AMEC; Port at Bathurst Inlet • 2011 Izok/High Lake Prefeasibility Study by SNC; Port at Grays Bay

  10. IZOK CORRIDOR PROJECT2011 What did we do? • Assessed all assets-sale of Ulu and Lupin to Elgin Mining in July 2011 • Commitment to continue exploration in other Nunavut properties • Transportation Options Review • PFS Completed • MMG Kugluktuk Office and Sponsorship Programs • Built a Core Team in Canada: engineering, consultation, environmental, H&S in addition to the geology team. • Re-Engagement with NIRB • 2012 Programs: baseline, geotech, metallurgy, FS 11

  11. Transportation Study • MMG reviewed all the transportation options for combing the High Lake and Izok resources: • 27 different alternatives, from slurry pipeline, truck to rail, • 3 ports and • numerous winter road options

  12. IZOK CORRIDOR PROJECT Feasibility Study – Key Milestones • Start Feasibility Study Q1 2012 • Initiate Process with NWB and NIRB Q2 2012 • Commence Field Activities and consultation Q2 2012 • Complete Feasibility Study Q1 2013 • Investment Approval Request (IAR) Q2 2013 • Submit Draft Environmental Impact Statement Q2/Q3 2013 • Start EPCM Phase of Work Q3 2013

  13. IZOK CORRIDOR PROJECT Proposed Schedule – best case scenario in a perfect world… • Potential construction start Q3 2015 • Potential first ore processed Q1 2018 • Potential first concentrate shipped August 2018 • Mine Life (Izok) 12 years • Metal Production Zn 2,038 kt (approx. 180 kt pa) Cu 554 kt (approx. 50 kt pa) Pb 135 kt (approx. 12 kt pa) Ag 33.3 Moz (approx 2.8 Moz pa) Au 201 koz (approx 17 koz pa)

  14. IZOK CORRIDOR PROJECTHigh Lake Camp

  15. IZOK CORRIDOR PROJECT High Lake Minesite and Infrastructure HIGH LAKE MINE • Two Open Pits • 3 Mt ore mined over 6 years • Moderate grade sulphide ore, rich in zinc, with low copper and neglible lead grades • One Underground Mine • 4 Mt ore mined over 9 years • Lower grade than open pit, moderate zinc and copper grades and negligible lead

  16. IZOK CORRIDOR PROJECT High Lake Minesite and Infrastructure • Primary and possibly secondary crushing • Maintenance facilities • Warehouse and Laydown Areas • Fuel storage • Explosives storage • Ventilation fans • Dewatering infrastructure • Electric power distribution infrastructure • Shops, offices, warehouse, and camp connected by utilidors • Diesel power generation – 7 MW • Airstrip – compatible with Dash 8 aircraft or similar, located at Sand Lake, 10 km north of High Lake • Water supply • Water Treatment Plant and water holding pond • Communications • Explosives storage • Fuel storage

  17. IZOK CORRIDOR PROJECTIzok Mine Site HAM LAKE EXPLORATION CAMP NEAR IZOK LAKE

  18. IZOK CORRIDOR PROJECTIzok Mine Site – Getting to the Deposit- Summary • The deposit is under Izok Lake. Izok Lake needs to be drained and a diversion channel built to maintain flow between Iznogoudh and Itchen Lakes • Operation and closure : no negative effect on water quality and quantity of Iznogoudh and Itchen Lakes. • The Izok Plant will process crushed ore trucked in from High Lake and ore from Izok • Tailings from both High Lake and Izok concentrate milling, dry stack is the prefered concept • Mine Waste PAG and NAG from Izok • Camp, airstrip, roads, power generation, shops, explosive storage, fuel storage and other. Iznogoudh Lake Izok Lake Itchen Lake

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  20. IZOK CORRIDOR PROJECT Izok Mine Site Izok Mine • 1 Open Pit, mined in 3 main phases • 13 Mt ore mined over 10 years • High grade sulphide ore, rich in zinc, with moderate copper and lead grades • 1 Underground Mine • 1 Mt ore mined over 4 years • Lower grade than open pit, moderate zinc and copper grades and negligible lead

  21. IZOK CORRIDOR PROJECT Izok Mine Site, Processing, and Infrastructure IZOK MINING ISOMETRIC Izok Open Pit Mine Existing Lake Shore Inukshuk Underground Mine

  22. IZOK CORRIDOR PROJECTRoad – all weather, 350km • 350 km all-weather access road from Izok to Grays Bay • Concentrate Haul from Izok to Grays Bay and transfer to storage shed • On the way back south, pick up crushed ore at High Lake and haul to Izok for processing • 14 km to extend to Tibbett-Contwoyto ice road • Majority of resupply in summer via Grays Bay Port: fuel and supplies • Proposed horizontal alignment based on air photo interpretation, contour data, and 3 seasons of preliminary field reconnaissance

  23. IZOK CORRIDOR PROJECTRoad • VEHICLES Concentrate and Ore Hauling Sea Container Transport Fuel Resupply

  24. IZOK CORRIDOR PROJECTRoad ROAD TRAFFIC- PFS • Assumed 330 days per year operation (weather, caribou) • Concentrate and Ore Movement (120 tonne capacity) • 11 truck-trips per day at 18 hours each round trip • Diesel -tankers (60 tonnes capacity) • 3 truck-trips per day • Containers and Equipment-3 container tractor-trailers • 3 truck-trips per day • Convoys of two to five trucks being studied -PFS

  25. IZOK CORRIDOR PROJECTPort • PORT SELECTION CRITERIA • Maximum ice-free shipping window • Greatest certainty of ice-free shipping window • Shortest distance to High Lake and Izok Lake • Deep water shipping routes • Deep water dock • Sufficient land for port infrastructure • Beach-head barge landing area

  26. IZOK CORRIDOR PROJECTPort Infrastructure • Concentrate shed with capacity to store 10 months worth of concentrate production • 50 million litres diesel storage – steel tanks within bunds • Dock and ship loader facility to accommodate 50,000 DWT bulk carrier ships-Sheet-pile gravity-based structure – as used in most north Canadian ports • Lay down area for 2,500 containers (20 ft) and mixed cargo • Camp, administration, and maintenance facilities • Diesel power generation • Sea-water desalination plan

  27. IZOK CORRIDOR PROJECTPort Operation • Concentrate trucked year round from Izok Mine to Port • Three month shipping window (early to mid August to October) 4 to 6 ships, 3 trips each • Alternative container supply route - barge via Mackenzie River • EXAMPLE OF SHIP LOADER AND CONCENTRATE SHED (Voiseys Bay)

  28. IZOK CORRIDOR PROJECTShipping PROPOSED SHIPPING ROUTES

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