Overview

The Wolverine Project is proposed as an underground mine producing 1,700 tonnes per day run-of-mine feed. The mine feed will be crushed and fed to a dense media separation (DMS) plant that will utilize gravity cyclone technology to remove less dense waste materials and produce a nominal 1,400 tonnes per day of ore feed to the grinding and flotation circuits. The reserves provide for a 10 year mine life that could be extended by an additional 3-4 years with fill in drilling of Inferred resources.

The DMS plant provides an effective pre-concentration step to ensure a consistent high quality of ore to the mill. The ability to remove barren waste material also allows the mining of thinner ores, more complete pillar recovery and removal of waste in development ores. Combined with the new mining plan, DMS application provides for more mining flexibility, probable overall recovery of the thinner, higher grade mineralization, and possibly reduced mining cost due to greater efficiencies.

Initial underground development commenced in April 2005 with driving of a production sized, 5 by 5 metre decline ramp into the mountainside, toward the deposit.

The current cut and fill mining plan has the stope access located in the footwall to the ore, with a herringbone pattern of stopes. The plan provides for a strong hangingwall in ore for stope development. Mining will progress sequentially up the dip of the mineralization.

In-fill drilling was completed in late October 2005, with the new information feeding into the revised resource estimate, which was completed in late December 2005. The incorporation of 55 additional drill holes significantly increased confidence levels for the resource estimate.

Test Mining Program

• $17M test mining and in-fill drill program completed November, 2005
• The program included a decline down to the upper part of the Wolverine deposit and development of test stopes to confirm mining conditions and remove a bulk sample for additional metallurgical studies.
• The initial 5 by 5 metre ramp access to the upper part of the mineral zones was completed. The ramp is to be rehabilitated as the main production access and additional development work is planned to provide additional stope access.

A large diameter drill hole program was completed in September 2004 to provide additional materials for resumption of metallurgical work and preparation for the bulk sample metallurgical program. Heavy media separation (HMS) testwork of the mixed waste and ore was completed by Lakefield Research Limited in fall 2004. The studies demonstrated that this simple technology provides an effective means of rejecting waste from mining thinner ore lenses and thereby enhancing the grade of mill feed.

Concentrate Shipment

The fine to medium grained Wolverine ores respond well to standard flotation processing, and readily produced zinc, copper and lead concentrates with moderate to high recoveries of both base and precious metals. The copper and lead concentrates are particularly enriched in gold and silver.

Concentrates contain higher levels of selenium and with the recent increase in selenium price from US$3 to more than US$60 per pound, the selenium content of the concentrates appears to be less of an issue, and selenium may provide added revenue. Earlier studies indicated that simple blending of Wolverine ores with cleaner ores could produce more acceptable concentrates. Today, marketing enquiries indicate strong interest in all of the concentrates that would be produced from Wolverine.

From the Wolverine site, three concentrates will be produced for shipment to Asia and will be trucked to Skagway, Alaska or Stewart, British Columbia for ocean transport to smelters in Asia or to rail head at Fort Nelson for smelters in Eastern Canada.