Class 1 Nickel has assembled a strategic land package that combines the Alexo deposits with the contiguous Dundonald projects to create a larger and more diversified operation. The projects mining rights area totals 2,857 hectares (28.57 square km) in 54 cell claims, 14 leases and 29 patents.
Alexo-Dundonald comprises a past production operation (with historical 2%-4% nickel head grade) with two high-grade NI 43-101 nickel sulphide Mineral Resources that remain open at depth and along strike (Nickel-Copper-Cobalt-PGEs).
Latest technology geophysics and extensive expansion drilling campaigns will proceed to increase the primary NI-43-101 Mineral Resource calculations and thus accumulate important data required for a Preliminary Economic Assessment report.
Table 1: Alexo-Dundonald Updated Mineral Resource Estimate Summary
NI 43-101 disclosure:
(1) Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
(2) The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
(3) The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
(4) The Mineral Resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.
(5) The historical open pit mined areas were removed from the MRE.
(6) US$ metal prices of $7.35/lb NI, $3/lb Cu, $20/lb Co, $1,500/oz Au, $900/oz Pt and $1,650/oz Pd were used in the NSR calculation with respective process recoveries of 89%, 90%, 40%, 50%, 50% and 50%
(7) Pit constrained Mineral Resource NSR cut-off considers ore crushing, transport, processing and general and administration (G&A) costs that respectively combine for a total of ($2 + $6 + $20 + $2) = CAD$30/tonne processed.
(8) Out-of-pit Mineral Resource NSR cut-off considers ore mining, crushing, transport, processing and G&A costs that respectively combine for a total of ($58 + $2 + $6 + $20 + $4) = CAD$90/tonne processed.
(9) The out-of-pit Mineral Resource grade blocks were quantified above the $90/t cut-off, below the constraining pit shell and within the constraining mineralized wireframes. Additionally, only groups of blocks that exhibited continuity and reasonable potential stope geometry were included. All orphaned blocks and narrow strings of blocks were excluded. The longhole stoping with backfill mining method was assumed for the out-of-pit Mineral Resource Estimate calculation.
Table 2 – Pit Constrained and Out-of-Pit Estimated Mineral Resources
The NI 43-101 compliant Updated Mineral Resource Estimate was prepared by Yungang Wu, P.Geo. and Eugene Puritch, P.Eng, FEC, CET of P&E Mining Consultants Inc, both Independent Qualified Persons as defined by NI 43-101 – Standards of Disclosure for Mineral Projects. The Updated Mineral Resource Estimate was undertaken for pit constrained and out-of-pit nickel, copper, and cobalt Mineral Resources. The total Indicated Mineral Resource Estimate based on NSR cut-off values of CDN$30 per tonne for the pit constrained Mineral Resource and CDN$90 per tonne for the out-of-pit Mineral Resource. The total Indicated Mineral Resource based on a Net Smelter Return (NSR) for the out-of-pit Mineral Resource is 1.25 Mt at 0.99%, 0.04% Cu and 0.02% Co for a total of 27.35 Mlbs of contained nickel and Inferred Mineral Resources total 2.0 Mt at 1.01% Ni, 0.03% Cu and 0.02% Co (44.51 Mlbs contained nickel).
The Alexo-Dundonald Project was previously mined via a direct shipping model, and the Preliminary Economic Assessment that the Company will produce will be designed around similar principles.
The Updated Mineral Resource Estimate was completed by P&E Mining Consultants Inc (“P&E”) and has been reviewed internally by the Company. The full NI 43-101 Technical Report in respect of the Updated Mineral Resource Estimate (the “Technical Report”) will be available on SEDAR (www.sedar.com) under the Company’s issuer profile by December 17, 2020.
The Alexo deposit has been mined during three periods:
1913 – 1919
Surface and underground mining for historical production of 51,857 tons at 4.4% Ni, 0.6% Cu between surface and 38m depth only
1934 – 1944
Mining of remnants of pillars from previous 1913 – 1919 mine workings; exact figures unknown
2004 – 2005
Historical open pit mining of 26,224 tonnes at 1.97% Ni, 0.20% Cu from Alexo and 3,900 tonnes at 1.68% Ni and 0.18% Cu from Kelex