PELE MOUNTAIN RESOURCES INC.
TECHNICAL REPORT ON THE
ECO RIDGE MINE PROJECT,
ELLIOT LAKE, ONTARIO, CANADA
NI 43-101 Report
Qualified Persons:
Jason J. Cox, P.Eng.
Tudorel Ciuculescu, M.Sc., P.Geo.
Kathleen Altman, P.E.
Leo Hwozdyk, P.Eng.
June 20, 2012
ROSCOE POSTLE ASSOCIATES INC.
Report Control Form
Document Title
Technical Report on the Eco Ridge Mine Project, Elliot Lake
Area, Ontario, Canada
Client Name & Address
Pele Mountain Resources Inc.
2200 Yonge Street
Suite 905
Toronto, Ontario M4S 2C6
Document Reference
Project #1826
Issue Date
Lead Author
Final
Version
Status &
Issue No.
June 20, 2012
Jason Cox
Tudorel Ciuculescu
Kathleen A. Altman
Leo Hwozdyk
(Signed)
(Signed)
(Signed)
(Signed)
Peer Reviewer
Deborah McCombe
(Signed)
Project Manager Approval
Jason Cox
(Signed)
Project Director Approval
Richard Lambert
(Signed)
Name
Report Distribution
No. of Copies
Client
RPA Filing
1 (project box)
Roscoe Postle Associates Inc.
55 University Avenue, Suite 501
Toronto, Ontario M5J 2H7
Canada
Tel: +1 416 947 0907
Fax: +1 416 947 0395
mining@rpacan.com
0
www.rpacan.com
TABLE OF CONTENTS
PAGE
1 SUMMARY .................................................................................................................. 1-1 Executive Summary ................................................................................................. 1-1 Technical Summary ............................................................................................... 1-17 2 INTRODUCTION......................................................................................................... 2-1 3 RELIANCE ON OTHER EXPERTS ............................................................................ 3-1 4 PROPERTY DESCRIPTION AND LOCATION ........................................................... 4-1 Licences of Occupation ............................................................................................ 4-5 Royalties and Other Encumbrances......................................................................... 4-5 Permits ..................................................................................................................... 4-5 Environmental Liabilities .......................................................................................... 4-6 5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY .......................................................................................................... 5-1 6 HISTORY .................................................................................................................... 6-1 7 GEOLOGICAL SETTING AND MINERALIZATION .................................................... 7-1 Regional Geology ..................................................................................................... 7-1 Local Geology .......................................................................................................... 7-5 Property Geology ................................................................................................... 7-12 Mineralization ......................................................................................................... 7-15 Historical Mineralogical Studies ............................................................................. 7-17 Mineralogical Studies on the Eco Ridge Mine Property ......................................... 7-20 Detailed Description of Mineralized Zones ............................................................. 7-23 Discussion of Mineralized Zones............................................................................ 7-27 8 DEPOSIT TYPES........................................................................................................ 8-1 9 EXPLORATION........................................................................................................... 9-1 10 DRILLING................................................................................................................ 10-1 Pele Mountain Drill Programs................................................................................. 10-1 11 SAMPLE PREPARATION, ANALYSES AND SECURITY ...................................... 11-1 Historic Holes ......................................................................................................... 11-4 Pele Mountain Drilling Programs ............................................................................ 11-5 12 DATA VERIFICATION ............................................................................................ 12-1 Drill Hole Collar Surveys ........................................................................................ 12-1 Drill Hole Deviation ................................................................................................. 12-1 Database ................................................................................................................ 12-1 Data Entry .............................................................................................................. 12-2 Database Validation ............................................................................................... 12-3 Pele Mountain QA/QC Monitoring .......................................................................... 12-3 Pele Mountain QA/QC Program 2011 .................................................................... 12-4 Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Independent Sampling by RPA .............................................................................. 12-7 13 MINERAL PROCESSING AND METALLURGICAL TESTING ............................... 13-1 14 MINERAL RESOURCE ESTIMATE ........................................................................ 14-1 Summary ................................................................................................................ 14-1 Mineral Resource Database ................................................................................... 14-2 Geological Interpretation and 3D Solids ................................................................. 14-3 Basic Statistics and Capping of High Assays ......................................................... 14-6 Block Model and Grade Estimation ...................................................................... 14-20 Classification ........................................................................................................ 14-24 Sensitivity Analysis ............................................................................................... 14-27 Comparison with Previous Mineral Resource Estimate ....................................... 14-31 Exploration Potential of Additional Resources on the Property ............................ 14-31 15 MINERAL RESERVE ESTIMATE ........................................................................... 15-1 16 MINING METHODS ................................................................................................ 16-1 Selected Mining Method ......................................................................................... 16-1 Mine Development ................................................................................................. 16-1 Dilution ................................................................................................................... 16-7 Mining Production Rate .......................................................................................... 16-8 Mining Sequence ................................................................................................. 16-10 Support Services .................................................................................................. 16-13 Equipment ............................................................................................................ 16-15 Manpower ............................................................................................................ 16-17 Material Handling Trade-Off Study ....................................................................... 16-22 17 RECOVERY METHODS ......................................................................................... 17-1 18 PROJECT INFRASTRUCTURE ............................................................................. 18-1 19 MARKET STUDIES AND CONTRACTS ................................................................. 19-1 Uranium .................................................................................................................. 19-1 Rare Earths ............................................................................................................ 19-1 Contracts ................................................................................................................ 19-7 20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY
IMPACT........................................................................................................................ 20-1 Introduction ............................................................................................................ 20-1 Permits, Licences and Other Legislative Requirements......................................... 20-2 Environmental Assessment .................................................................................... 20-6 Aquatic Baseline Study ........................................................................................ 20-12 Decommissioning and Closure Planning.............................................................. 20-15 Environmental Risk Assessments ........................................................................ 20-16 Environmental Management Strategies ............................................................... 20-16 Occupational Health and Safety ........................................................................... 20-18 Community Relations ........................................................................................... 20-22 21 CAPITAL AND OPERATING COSTS ..................................................................... 21-1 Capital Costs .......................................................................................................... 21-1 Operating Costs ..................................................................................................... 21-4 Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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22 ECONOMIC ANALYSIS .......................................................................................... 22-1 23 ADJACENT PROPERTIES ..................................................................................... 23-1 24 OTHER RELEVANT DATA AND INFORMATION .................................................. 24-1 25 INTERPRETATION AND CONCLUSIONS ............................................................. 25-1 26 RECOMMENDATIONS ........................................................................................... 26-1 27 REFERENCES........................................................................................................ 27-1 28 DATE AND SIGNATURE PAGE ............................................................................. 28-1 29 CERTIFICATE OF QUALIFIED PERSON .............................................................. 29-1 LIST OF TABLES
PAGE
Table 1-1 Pre-Tax Cash Flow Summary ...................................................................... 1-4 Table 1-2 Sensitivity Analysis ...................................................................................... 1-8 Table 1-3 Summary of Mineral Resources – April 16, 2012 ...................................... 1-10 Table 1-4 Proposed Work Program and Estimated Cost ........................................... 1-15 Table 1-5 Overall Capital Cost Estimate .................................................................... 1-25 Table 1-6 Operating Cost Estimate ............................................................................ 1-25 Table 4-1 Schedule of Claims ...................................................................................... 4-1 Table 4-2 Precambrian Agreement Terms ................................................................... 4-3 Table 4-3 May 2007 Agreement Terms ....................................................................... 4-4 Table 5-1 Average Minimum and Maximum Temperatures in the Elliot Lake District .. 5-2 Table 6-1 Historic Drill Hole Summary ......................................................................... 6-5 Table 7-1 Table of Formations in the Region ............................................................... 7-1 Table 7-2 Stratigraphy of the Huronian Supergroup .................................................... 7-2 Table 7-3 Elliot Lake Group, Elliot Lake Area .............................................................. 7-5 Table 7-4 Stratigraphy of Lower Matinenda ................................................................. 7-9 Table 7-5 Stratigraphy of Lower Matinenda (Ryan Member) ..................................... 7-17 Table 7-6 Uranium-Bearing and Associated Heavy Minerals .................................... 7-17 Table 7-7 Uranium Mineralogy of the Main Conglomerate Bed ................................. 7-21 Table 7-8 Uranium Mineralogy of the Basal Conglomerate Bed ................................ 7-22 Table 7-9 Relative Percentage of Individual Rare Earth Elements ............................ 7-29 Table 7-10 Correlation Between Uranium and Rare Earths ....................................... 7-30 Table 12-1 RPA Independent Sampling..................................................................... 12-8 Table 13-1 Preliminary Screening Size Distribution ................................................... 13-2 Table 13-2 Preliminary Screening Size Distribution ................................................... 13-2 Table 13-3 Overall Size Distribution........................................................................... 13-3 Table 13-4 Magnetic Separation Results ................................................................... 13-4 Table 13-5 Flotation Results ...................................................................................... 13-5 Table 13-6 Leaching Results ..................................................................................... 13-6 Table 13-7 Bulk Sample #4 Analyses ........................................................................ 13-6 Table 13-8 Fine Size Fraction Analyses .................................................................... 13-7 Table 13-9 Estimated REO Recoveries ..................................................................... 13-9 Table 14-1 Summary of Mineral Resources – April 16, 2012 .................................... 14-1 Table 14-2 MCB and Hwz Intercepts True Thickness - Descriptive Statistics ........... 14-4 Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Table 14-3 Rare Earth and Other Elements - MCB Resource Assays Descriptive
Statistics ....................................................................................................................... 14-7 Table 14-4 Rare Earth and Other Elements - HWZ Resource Assays Descriptive
Statistics ....................................................................................................................... 14-8 Table 14-5 Rare Earth and Other Elements - MCB Resource Composites Descriptive
Statistics ..................................................................................................................... 14-10 Table 14-6 Rare Earth and Other Elements - HWZ Resource Composites Descriptive
Statistics ..................................................................................................................... 14-11 Table 14-7 Block Model Setup ................................................................................. 14-20 Table 14-8 Search Strategy Parameters.................................................................. 14-20 Table 14-9 Summary of Mineral Resources – April 16, 2012 .................................. 14-25 Table 14-10 Mineral Resource Estimate - April 16, 2012 - Rare Earth Oxides and
Related Oxides........................................................................................................... 14-26 Table 14-11 Indicated Resource – Tonnage And TREO% Grade at Various NSR Cutoff Values ................................................................................................................... 14-28 Table 14-12 Inferred Resource – Tonnage and Treo% Grade at Various NSR Cut-off
Values ........................................................................................................................ 14-28 Table 14-13 Mineral Resource Comparison – 2007 to 2012 ................................... 14-31 Table 14-14 Historic Drill Holes Not Included in the 2012 Resource Estimate ........ 14-32 Table 14-15 Historic Drill Holes Demonstrating the Down-Dip Potential of the Main
Conglomerate Bed ..................................................................................................... 14-33 Table 14-16 Historic Drilling Results from the Pecors Lake Block ........................... 14-34 Table 16-1 Equipment Optimum Production Capacities ............................................ 16-9 Table 16-2 Effective Production Rates..................................................................... 16-10 Table 16-3 Air Volume Requirements ...................................................................... 16-13 Table 16-4 Mine Equipment Summary ..................................................................... 16-16 Table 16-5 Manpower Requirements ....................................................................... 16-18 Table 17-1 Conceptual Design Criteria ...................................................................... 17-5 Table 17-2 Conceptual Mass Balance ....................................................................... 17-6 Table 19-1 Distribution of Rare Earths by Source – China ........................................ 19-3 Table 19-2 Rare Earth Supply – 2008 & 2010 ........................................................... 19-4 Table 19-3 REO Forecast Prices vs. Current Spot Prices ......................................... 19-6 Table 21-1 Overall Capital Cost Estimate .................................................................. 21-1 Table 21-2 Mine Capital Cost Estimate ...................................................................... 21-2 Table 21-3 Initial process Capital Cost Estimate ....................................................... 21-3 Table 21-4 Total Operating Cost Estimate ................................................................. 21-4 Table 21-5 Mine Operating Cost Estimate ................................................................. 21-5 Table 21-6 Process Operating Cost Estimate ............................................................ 21-6 Table 22-1 Pre-Tax Cash Flow Summary .................................................................. 22-3 Table 22-2 Sensitivity Analysis .................................................................................. 22-6 Table 25-1 Summary of Mineral Resources – April 16, 2012 .................................... 25-2 Table 26-1 Proposed Work Program and Estimated Cost ......................................... 26-2 LIST OF FIGURES
PAGE
Figure 1-1 Sensitivity Analysis ..................................................................................... 1-7 Figure 1-2 Project Schedule....................................................................................... 1-16 Figure 4-1 Location Map .............................................................................................. 4-7 Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
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Figure 4-2 Land Tenure Map ....................................................................................... 4-8 Figure 7-1 Regional Geology ....................................................................................... 7-4 Figure 7-2 Property Geology ...................................................................................... 7-10 Figure 7-3 Location of the Mineralized Channels....................................................... 7-11 Figure 7-4 Property Geology ...................................................................................... 7-14 Figure 7-5 Typical Cross Section Through the Adit Block .......................................... 7-25 Figure 7-6 Variation in Uranium Concentration in the Main Conglomerate Bed ........ 7-26 Figure 10-1 Location of the Historic Drill Holes .......................................................... 10-3 Figure 10-2 Location of Pele Mountain Drill Holes ..................................................... 10-4 Figure 12-1 Blank Samples ........................................................................................ 12-5 Figure 12-2 Certified Reference Materials Samples .................................................. 12-6 Figure 12-3 Field Sample Duplicates ......................................................................... 12-7 Figure 14-1 MCB Intercepts True Width Histogram (n=238)...................................... 14-5 Figure 14-2 HWZ Intercepts True Width Histogram (n=130) ..................................... 14-6 Figure 14-3 U3O8, Dy, and Nd Assay Histograms - MCB and HWZ........................... 14-9 Figure 14-4 U3O8, Dy, and Nd Composite Histograms - MCB and HWZ ................. 14-12 Figure 14-5 MCB intercepts Variography for U3O8, Nd, and Dy ............................... 14-15 Figure 14-6 HWZ intercepts Variography for U3O8, Nd, and Dy............................... 14-16 Figure 14-7 U3O8 Composites Grade Contours in MCB .......................................... 14-17 Figure 14-8 Nd Composites Grade Contours in MCB .............................................. 14-18 Figure 14-9 Dy Composites Grade Contours in MCB .............................................. 14-19 Figure 14-10 Resource Blocks in MCB .................................................................... 14-22 Figure 14-11 Resource Blocks in HWZ .................................................................... 14-23 Figure 14-12 Grade –Tonnage Curves of Indicated Resource ................................ 14-29 Figure 14-13 Grade –Tonnage Curves of Inferred Resource .................................. 14-30 Figure 14-14 Historic Drill Holes with Mineralized Intersections Outside the Mineral
Resource .................................................................................................................... 14-36 Figure 14-15 Location of the Exploration Targets .................................................... 14-37 Figure 16-1 Site Layout .............................................................................................. 16-2 Figure 16-2 Mine PLan............................................................................................... 16-5 Figure 16-3 Panel Plan .............................................................................................. 16-6 Figure 16-4 Mining Sequence Section ..................................................................... 16-11 Figure 16-5 Stope Development Section ................................................................. 16-12 Figure 16-6 Stope Drilling Section ........................................................................... 16-19 Figure 16-7 Tramming Section................................................................................. 16-20 Figure 16-8 Hauling Section..................................................................................... 16-21 Figure 17-1 Process Flow Sheet ................................................................................ 17-7 Figure 19-1 Chinese Rare Earth Export Quotas by Year (Thousands of Tons) ......... 19-4 Figure 22-1 Sensitivity Analysis ................................................................................. 22-5 Figure 24-1 Project Schedule..................................................................................... 24-2 Figure 26-1 Project Schedule..................................................................................... 26-3 Figure 26-2 Preliminary Proposed Drill Hole Location for Indicated and Inferred
Tonnage Targets 2012 Program .................................................................................. 26-4 Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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1 SUMMARY
EXECUTIVE SUMMARY
INTRODUCTION
Roscoe Postle Associates Inc. (RPA) was retained by Pele Mountain Resources Inc.
(Pele Mountain), to carry out a Preliminary Economic Assessment (PEA) on the Eco
Ridge Mine Project (the Project), located in Elliot Lake, Ontario. The purpose of this
report is to update the Project economics with results of work completed since the
previous PEA in August 2011 (the “2011 PEA”). This updated PEA features an updated
resource estimate and a base case scenario for production that focuses on mining the
relatively higher-grade main conglomerate bed, and uses a conventional milling
approach for processing which achieves materially higher recoveries for rare earths and
uranium.
Pele Mountain is a Canadian resource exploration and development company focused
on the sustainable development of its 100%-owned Eco Ridge Mine Rare Earths and
Uranium Project (Eco Ridge or the Project). Pele Mountain is a reporting issuer in
Ontario, British Columbia, and Alberta, and its common shares are listed on the TSX
Venture Exchange and also trade on the OTCQX. Pele Mountain has also entered into
an agreement to purchase the Simon Rare Earth Claims in Mountain Pass, California.
Currently, the major asset associated with the Project is a stratabound zone of rare earth
oxide (REO) and uranium oxide (U3O8) mineralization.
Rare earth elements (REE) are divided into two groups:
1. The Light Rare Earth Elements (LREE) or cerics, comprising of La, Ce, Pr, and
Nd.
2. The Heavy Rare Earth Elements (HREE) or yttrics, comprising of Y, Eu, Gd, Tb,
Dy, Ho, Er, Tm, Yb, Lu, and Sm. Scandium, while not a rare earth, has been
included with the HREE for purposes of this report.
LREO and HREO refer to oxides of light and heavy rare earth elements respectively. In
this document, TREO (Total Rare Earth Oxides) refers to LREOs and HREOs
collectively.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
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PEA-level work on the Project is based on the development of an underground mining
operation ramping up to 9,000 tonnes per day (tpd), with the recovery of REO and U3O8.
The 2011 PEA was based on processing via underground bioleaching and surface heap
leaching, while this update is based on conventional milling and acid baking. Materially
higher recoveries of REO and U3O8, based on recent testwork, proved to outweigh
associated capital and operating cost increases, providing for more robust economic
results.
ECONOMIC ANALYSIS
A Pre-Tax Cash Flow Projection has been generated from the Life of Mine (LOM)
production schedule and capital and operating cost estimates, and is summarized in
Table 1-1. A summary of the key criteria is provided below.
PRODUCTION

Production quantities total 34.6 Mt, at grades of 0.040% U3O8 and 1,455 ppm
TREO, over a mine life of 11 years.
o
The Main Conglomerate Bed (MCB) zone totals 31.0 Mt grading
0.043% U3O8 and 1,544 ppm TREO
o
The Hangingwall Zone (HWZ) totals 3.6 Mt grading 0.017% U3O8 and
1,017 ppm TREO

Underground mining using room and pillar mining methods, with all
development in ore.

Two years of pre-production development with mill commissioning and limited
production commencing in the second year.

Production rate ramping up to a nominal 9,000 tpd in Year 1.

Processing by crushing and grinding, magnetic separation, froth flotation,
acid baking and water leaching, solid/liquid separation, high density sludge
(HDS) removal, and recovery of the valuable elements by solvent extraction
and precipitation.

The proposed processing method produces yellow cake and a mixed rare
earths carbonate concentrate.

Uranium recovery of 90% (assumption, based on historical operations in the
area).

Rare earths recoveries by individual oxide, based on preliminary bench scale
testwork. LREOs average 89% recovery, while HREOs average 75%
recovery.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
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
Mine life production of 27.5 million pounds of U3O8 and 44.1 million kg of
TREO.

Production of a strategically significant combination of rare earths forecast to
remain in supply deficit, with 85% of Project revenue from heavy REO,
neodymium oxide (Nd2O3) and U3O8.
REVENUE

Exchange rate US$1.00 = C$1.00.

Uranium price of US$70 per pound U3O8.

Rare earth prices by individual oxide, with a basket price of US$78 per kg.
o Net of costs for separating the rare earth concentrate into individual
oxides – C$30 per kg for HREOs and C$10 per kg for LREOs.

LREOs consist of CeO2, La2O3, Nd2O3 and Pr6O11 while HREOs consist of
Sm2O3, Eu2O3, Gd2O3, Sc2O3, Y2O3, Yb2O3, Dy2O3, Er2O3, Ho2O3, Lu2O3,
Tb4O7 and Tm2O3.

NSR royalty of 0.75%.

Average net revenue (NSR unit value) of $154 per tonne.

Uranium provides 36% of revenue, and rare earths provide 64%.

HREO make up slightly over 50% of the rare earths revenue.

Revenue is recognized at the time of production.

Initial capital of C$563 million (first two years), includes contingency of $108
million.

Mine life capital totals C$670 million.

Unit operating costs of $71.33 per tonne.
COSTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 1-3
TABLE 1-1 PRE-TAX CASH FLOW SUMMARY
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Year -2
Units
Inputs
Year -1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Total
MINING
Ore Mined
34,550
000s tonnes
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Uranium Grade
CeO2 Grade
La2O3 Grade
Nd2O3 Grade
Pr6O11 Grade
Sm2O3 Grade
Eu2O3 Grade
Gd2O3 Grade
Sc2O3 Grade
Y2O3 Grade
Yb2O3 Grade
Dy2O3 Grade
Er2O3 Grade
Ho2O3 Grade
Lu2O3 Grade
Tb4O7 Grade
Tm2O3 Grade
Th Grade
LREO Grade
HREO Grade
Total REO Grade
0.040%
%U3O8
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
Oxide Factors
1.23
1.17
1.17
1.21
1.16
1.16
1.15
1.53
1.27
1.14
1.15
1.14
1.15
1.14
1.18
1.14
1.14
657.05
346.12
210.56
65.49
36.34
2.05
24.30
7.12
71.39
5.04
15.54
6.48
2.62
0.69
3.36
0.88
338.14
1,279.23
175.80
1,455.03
229
318
3,287
3,284
3,284
3,283
3,278
3,279
3,253
3,280
3,282
3,279
1,214
-
0.048%
0.058%
0.058%
0.052%
0.044%
0.045%
0.045%
0.036%
0.036%
0.037%
0.032%
0.020%
0.018%
0.000%
758.70
395.72
248.58
77.66
42.32
2.41
27.83
5.91
85.32
5.88
18.43
7.59
3.08
0.76
3.90
1.00
398.19
1,481
204
1,685
881.29
464.47
283.77
88.46
48.89
2.62
32.73
6.36
96.21
6.93
21.31
8.95
3.59
0.91
4.52
1.18
428.55
1,718
234
1,952
900.46
472.81
289.64
90.71
50.08
2.70
33.88
6.49
98.87
7.09
21.92
9.22
3.69
0.93
4.69
1.21
451.49
1,754
241
1,994
784.53
415.51
256.07
79.60
43.91
2.36
29.05
6.25
87.46
6.20
19.14
7.98
3.18
0.82
4.01
1.05
389.40
1,536
211
1,747
677.01
355.06
222.51
69.06
38.24
2.25
25.45
6.28
77.30
5.35
16.73
6.88
2.77
0.70
3.57
0.91
360.63
1,324
186
1,510
759.61
401.86
240.41
75.12
41.67
2.16
27.86
7.78
77.93
5.58
17.36
7.20
2.90
0.77
3.79
0.98
345.06
1,477
196
1,673
718.66
381.27
229.30
71.28
39.49
2.12
26.02
6.50
74.84
5.45
16.37
6.88
2.77
0.74
3.55
0.93
348.42
1,401
186
1,586
680.21
358.22
218.13
68.24
37.60
2.07
24.49
6.00
70.74
5.09
15.47
6.43
2.57
0.69
3.38
0.86
322.34
1,325
175
1,500
658.74
351.36
209.09
65.50
35.93
2.07
24.07
6.85
71.15
4.92
15.20
6.36
2.59
0.71
3.29
0.90
339.23
1,285
174
1,459
464.09
241.90
152.27
46.79
27.35
1.83
19.49
9.85
61.01
4.33
13.32
5.56
2.26
0.61
2.86
0.76
330.19
905
149
1,054
512.57
267.86
163.22
49.56
28.11
1.77
19.35
6.79
57.29
3.96
12.37
5.16
2.17
0.58
2.70
0.73
292.97
993
141
1,134
462.46
241.41
141.33
43.90
24.10
1.40
15.87
9.29
45.15
3.06
9.38
3.97
1.64
0.47
2.13
0.57
232.66
889
117
1,006
448.10
234.52
139.47
43.90
23.34
1.20
14.52
5.07
40.85
2.67
8.41
3.44
1.36
0.38
1.90
0.45
218.42
866
104
970
-
PROCESSING
Ore to Processing
34,550
%U3O8
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
0.040%
657.05
346.12
210.56
65.49
36.34
2.05
24.30
7.12
71.39
5.04
15.54
6.48
2.62
0.69
3.36
0.88
338.14
1,304
179
1,483
Recovery U3O8
Recovery CeO2
Recovery La2O3
Recovery Nd2O3
Recovery Pr6O11
Recovery Sm2O3
Recovery Eu2O3
Recovery Gd2O3
Recovery Sc2O3
Recovery Y2O3
Recovery Yb2O3
Recovery Dy2O3
Recovery Er2O3
Recovery Ho2O3
Recovery Lu2O3
Recovery Tb4O7
Recovery Tm2O3
Recovery Th
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
Recovered U3O8
Recovered CeO2
Recovered La2O3
Recovered Nd2O3
Recovered Pr6O11
Recovered Sm2O3
Recovered Eu2O3
Recovered Gd2O3
Recovered Sc2O3
Recovered Y2O3
Recovered Yb2O3
Recovered Dy2O3
Recovered Er2O3
Recovered Ho2O3
Recovered Lu2O3
Recovered Tb4O7
Recovered Tm2O3
Recovered Th
Recovered LREO
Recovered HREO
Total REOs
000 lbs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 lbs
3,287
3,284
3,284
3,283
3,278
3,279
3,253
3,280
3,282
3,279
1,214
-
0.054%
829.93
435.66
269.03
83.94
46.14
2.53
30.68
6.17
91.65
6.49
20.10
8.38
3.38
0.85
4.26
1.11
415.83
3,199
439
3,637
546
0.058%
900.46
472.81
289.64
90.71
50.08
2.70
33.88
6.49
98.87
7.09
21.92
9.22
3.69
0.93
4.69
1.21
451.49
1,754
241
1,994
0.052%
784.53
415.51
256.07
79.60
43.91
2.36
29.05
6.25
87.46
6.20
19.14
7.98
3.18
0.82
4.01
1.05
389.40
1,536
211
1,747
0.044%
677.01
355.06
222.51
69.06
38.24
2.25
25.45
6.28
77.30
5.35
16.73
6.88
2.77
0.70
3.57
0.91
360.63
1,324
186
1,510
0.045%
759.61
401.86
240.41
75.12
41.67
2.16
27.86
7.78
77.93
5.58
17.36
7.20
2.90
0.77
3.79
0.98
345.06
1,477
196
1,673
0.045%
718.66
381.27
229.30
71.28
39.49
2.12
26.02
6.50
74.84
5.45
16.37
6.88
2.77
0.74
3.55
0.93
348.42
1,401
186
1,586
0.036%
680.21
358.22
218.13
68.24
37.60
2.07
24.49
6.00
70.74
5.09
15.47
6.43
2.57
0.69
3.38
0.86
322.34
1,325
175
1,500
0.036%
658.74
351.36
209.09
65.50
35.93
2.07
24.07
6.85
71.15
4.92
15.20
6.36
2.59
0.71
3.29
0.90
339.23
1,285
174
1,459
0.037%
464.09
241.90
152.27
46.79
27.35
1.83
19.49
9.85
61.01
4.33
13.32
5.56
2.26
0.61
2.86
0.76
330.19
905
149
1,054
0.032%
512.57
267.86
163.22
49.56
28.11
1.77
19.35
6.79
57.29
3.96
12.37
5.16
2.17
0.58
2.70
0.73
292.97
993
141
1,134
0.020%
462.46
241.41
141.33
43.90
24.10
1.40
15.87
9.29
45.15
3.06
9.38
3.97
1.64
0.47
2.13
0.57
232.66
889
117
1,006
0.018%
448.10
234.52
139.47
43.90
23.34
1.20
14.52
5.07
40.85
2.67
8.41
3.44
1.36
0.38
1.90
0.45
218.42
866
104
970
0.000%
-
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
Recovery
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
44,942
23,227
14,210
4,425
2,355
123
1,496
331
4,127
272
882
364
142
39
200
49
20,605
86,804
10,381
97,185
27,491
20,386
10,535
6,446
2,007
1,068
56
678
150
1,872
123
400
165
64
18
91
22
9,346
39,374
4,709
44,083
97,185
583
407
210
130
41
21
1
14
2
38
3
8
3
1
0
2
0
182
788
94
882
3,776
2,658
1,369
843
264
140
7
90
13
247
17
54
22
9
2
12
3
1,187
5,135
615
5,750
3,413
2,314
1,202
745
232
123
6
77
13
218
14
47
19
7
2
10
3
1,023
4,493
539
5,033
2,855
1,997
1,027
647
201
107
6
68
13
193
12
41
17
6
2
9
2
948
3,873
475
4,348
2,960
2,240
1,162
699
219
116
6
74
16
194
13
42
17
7
2
10
2
906
4,320
499
4,819
2,926
2,115
1,101
666
207
110
5
69
13
186
13
40
17
6
2
9
2
914
4,089
473
4,562
2,374
2,003
1,035
634
198
105
5
65
12
176
12
38
16
6
2
9
2
846
3,870
447
4,317
2,350
1,925
1,007
603
189
99
5
63
14
176
11
37
15
6
2
8
2
883
3,723
439
4,162
2,422
1,367
699
443
136
76
5
52
20
152
10
33
13
5
1
7
2
867
2,645
376
3,021
2,111
1,511
774
475
144
79
5
51
14
143
9
30
13
5
1
7
2
769
2,904
358
3,262
1,298
1,362
697
411
128
67
4
42
19
112
7
23
10
4
1
5
1
610
2,597
295
2,893
423
489
251
150
47
24
1
14
4
38
2
8
3
1
0
2
0
212
937
98
1,034
www.rpacan.com
Rev. 0 Page 1-4
000s tonnes
Uranium Grade
CeO2 Grade
La2O3 Grade
Nd2O3 Grade
Pr6O11 Grade
Sm2O3 Grade
Eu2O3 Grade
Gd2O3 Grade
Sc2O3 Grade
Y2O3 Grade
Yb2O3 Grade
Dy2O3 Grade
Er2O3 Grade
Ho2O3 Grade
Lu2O3 Grade
Tb4O7 Grade
Tm2O3 Grade
Th Grade
LREO Grade
HREO Grade
Total REO Grade
Head Grade
Year -2
Inputs
Units
Year -1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Total
REVENUE
Gross Revenue
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
U3O8
CeO2
La2O3
Nd2O3
Pr6O11
Sm2O3
Eu2O3
Gd2O3
Sc2O3
Y2O3
Yb2O3
Dy2O3
Er2O3
Ho2O3
Lu2O3
Tb4O7
Tm2O3
Sub-Total LREOs
Sub-Total HREOs
Sub-Total REOs
Total Gross Revenue
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
Exchange Rate
1 US$=C$
REO Basket Price
Gross Revenue
C$ '000s
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
70
18
20
175
140
80
2,900
150
3,000
150
90
1,450
195
1,200
2,200
3,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,924,376
366,941
210,708
1,127,993
280,988
85,468
162,090
101,756
450,732
280,814
11,094
579,933
32,232
21,280
199,912
67,163
1,986,631
1,992,474
3,979,104
5,903,481
$
$
90
5,903,481
$40,804
$7,331
$4,195
$22,795
$5,696
$1,717
$3,168
$2,032
$6,183
$5,702
$226
$11,867
$659
$0
$412
$4,011
$1,338
$40,017
$37,314
$77,332
$118,135
1.00
1.00
$
$264,346
$47,837
$27,381
$147,601
$37,023
$11,205
$20,336
$13,494
$39,129
$36,995
$1,485
$77,812
$4,359
$0
$2,713
$26,563
$8,775
$259,842
$242,867
$502,710
$767,055
1.00
$238,883
$41,649
$24,045
$130,398
$32,465
$9,819
$17,761
$11,564
$37,632
$32,705
$1,297
$67,894
$3,771
$0
$2,401
$22,688
$7,656
$228,557
$215,188
$443,745
$682,628
1.00
$199,859
$35,940
$20,546
$113,305
$28,166
$8,550
$16,910
$10,130
$37,786
$28,903
$1,121
$59,341
$3,250
$0
$2,037
$20,192
$6,616
$197,956
$194,836
$392,793
$592,652
1.00
$207,172
$40,312
$23,248
$122,384
$30,629
$9,313
$16,224
$11,085
$46,831
$29,128
$1,168
$61,555
$3,403
$0
$2,242
$21,453
$7,105
$216,573
$209,508
$426,081
$633,253
1.00
$204,808
$38,074
$22,019
$116,529
$29,011
$8,812
$15,900
$10,338
$39,028
$27,927
$1,137
$57,958
$3,245
$0
$2,165
$20,061
$6,726
$205,633
$193,297
$398,930
$603,737
1.00
$166,176
$36,052
$20,697
$110,900
$27,785
$8,394
$15,539
$9,732
$36,075
$26,408
$1,062
$54,786
$3,032
$0
$2,007
$19,069
$6,255
$195,434
$182,360
$377,795
$543,971
1.00
$164,503
$34,642
$20,142
$105,473
$26,464
$7,959
$15,390
$9,492
$40,831
$26,352
$1,019
$53,410
$2,976
$0
$2,061
$18,458
$6,492
$186,720
$184,439
$371,159
$535,663
1.00
$169,567
$24,608
$13,982
$77,447
$19,060
$6,108
$13,747
$7,749
$59,251
$22,787
$906
$47,190
$2,623
$0
$1,767
$16,160
$5,530
$135,096
$183,816
$318,912
$488,478
1.00
$147,739
$27,192
$15,490
$83,056
$20,198
$6,282
$13,282
$7,696
$40,852
$21,406
$828
$43,866
$2,439
$0
$1,692
$15,264
$5,312
$145,935
$158,917
$304,853
$452,592
1.00
$90,895
$24,511
$13,948
$71,853
$17,874
$5,379
$10,506
$6,307
$55,851
$16,856
$638
$33,230
$1,873
$0
$1,374
$12,029
$4,136
$128,185
$148,179
$276,364
$367,259
1.00
$29,625
$8,793
$5,017
$26,253
$6,618
$1,929
$3,328
$2,136
$11,284
$5,647
$207
$11,025
$600
$0
$410
$3,964
$1,223
$46,680
$41,751
$88,432
$118,057
1.00
88 $
$118,135
87 $
$767,055
88 $
$682,628
90 $
$592,652
88 $
$633,253
87 $
$603,737
88 $
$543,971
89 $
$535,663
106 $
$488,478
93 $
$452,592
96 $
$367,259
86
$118,057
$7,880
$2,825
$10,705
12 $
13.8%
$51,346
$18,453
$69,799
12 $
13.9%
$44,931
$16,182
$61,113
12 $
13.8%
$38,726
$14,254
$52,980
12 $
13.5%
$43,201
$14,981
$58,181
12 $
13.7%
$40,893
$14,178
$55,071
12 $
13.8%
$38,699
$13,404
$52,103
12 $
13.8%
$37,234
$13,171
$50,405
12 $
13.6%
$26,449
$11,292
$37,741
12 $
11.8%
$29,040
$10,736
$39,776
12 $
13.0%
$25,974
$8,860
$34,833
12 $
12.6%
$9,366
$2,928
$12,294
12
13.9%
Offsite Concentrate Costs
LREOs
HREOs
Total
C$ '000s
C$ '000s
C$ '000s
C$/kg
% of Gross
$
$
10.00
30.00
$
$
$
$
393,737
141,264
535,002
12
13.4%
$
Net Revenue
Uranium
Rare Earths
Total Net Revenue
C$ '000s
C$ '000s
C$ '000s
$
$
$
1,924,376
3,444,103
5,368,479
$40,804
$66,627
$107,431
$264,346
$432,911
$697,256
$238,883
$382,632
$621,515
$199,859
$339,813
$539,672
$207,172
$367,900
$575,072
$204,808
$343,858
$548,666
$166,176
$325,691
$491,867
$164,503
$320,755
$485,258
$169,567
$281,171
$450,737
$147,739
$265,077
$412,816
$90,895
$241,531
$332,425
$29,625
$76,137
$105,762
NSR Royalty
NSR Royalty
Total Royalty Paid
C$ '000s
C$ '000s
C$ '000s
0.75% $
0.00% $
$
40,264
40,264
$806
$0
$806
$5,229
$0
$5,229
$4,661
$0
$4,661
$4,048
$0
$4,048
$4,313
$0
$4,313
$4,115
$0
$4,115
$3,689
$0
$3,689
$3,639
$0
$3,639
$3,381
$0
$3,381
$3,096
$0
$3,096
$2,493
$0
$2,493
$793
$0
$793
Net Smelter Return
$106,625
$195
$692,027
$211
$616,854
$188
$535,625
$163
$570,759
$174
$544,551
$166
$488,178
$149
$481,618
$148
$447,357
$136
$409,720
$125
$329,932
$101
$104,969
$86
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
C$ '000s
C$/t
$
OPERATING COSTS
Mining
Processing
G&A
Total Opex Per Tonne Milled
C$/t mined
C$/t milled
C$/t milled
C$/t milled
$
$
$
$
42.64
26.31
3.44
72.40
Mining
Processing
G&A
Total Operating Cost
C$ '000s
C$ '000s
C$ '000s
C$ '000s
$
$
$
$
1,473,308
909,013
119,013
2,501,334
$28,519
$0
$0
$28,519
$32,959
$14,378
$0
$47,336
$136,462
$86,472
$11,503
$234,438
$136,365
$86,410
$11,495
$234,270
$136,359
$86,407
$11,495
$234,260
$136,320
$86,382
$11,491
$234,193
$136,085
$86,233
$11,472
$233,790
$136,144
$86,270
$11,476
$233,891
$135,080
$85,597
$11,387
$232,064
$136,200
$86,306
$11,481
$233,987
$136,266
$86,348
$11,487
$234,101
$136,143
$86,270
$11,476
$233,889
$50,405
$31,940
$4,249
$86,594
Operating Margin
C$ '000s
$
2,826,882
-$28,519
$59,288
$457,589
$382,583
$301,365
$336,566
$310,761
$254,288
$249,554
$213,370
$175,619
$96,043
$18,375
$0
$0
$86,420
$7,300
$165,366
$33,926
$20,215
$3,000
$47,620
$35,000
$30,909
$7,300
$82,683
$16,963
$10,107
$3,000
$10,000
$17,000
$30,276
$9,404
$5,963
$6,977
$2,891
41.52
26.31
3.50
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
$86,802
$7,300
$165,366
$33,926
$20,215
$3,000
$47,620
C$ '000s
C$ '000s
C$ '000s
$12,000
$67,561
$35,000
$12,000
$67,561
$35,000
$6,000
$33,781
$17,500
$6,000
$33,781
$17,500
C$ '000s
C$ '000s
C$ '000s
30%
25%
$89,210
$18,396
$562,843
$46,150
$9,227
$290,620
$43,060
$9,169
$272,224
C$ '000s
C$ '000s
C$ '000s
$24,000
$22,000
$667,013
$3,000
$3,000
$3,000
$3,000
$290,620
$272,224
$19,404
$8,963
$26,389
$5,891
$3,000
$3,000
$2,000
$5,000
$3,000
$2,000
$11,523
$3,000
$3,000
$6,000
$3,000
$2,000
$5,000
$2,000
$2,000
$8,000
$8,000
$2,000
$2,000
$1,000
$1,000
PRE-TAX CASHFLOW
Pre-Tax Cash Flow
Cumulative
C$ '000s
C$ '000s
$2,159,868
-$319,139
-$319,139
-$212,935
-$532,074
$438,185
-$93,889
$373,620
$279,731
$274,976
$554,706
$330,675
$885,381
$307,761
$1,193,142
$249,288
$1,442,430
$238,031
$1,680,462
$207,370
$1,887,831
$170,619
$2,058,450
$94,043
$2,152,493
$10,375
$2,162,868
-$2,000
$2,160,868
-$1,000
$2,159,868
PROJECT ECONOMICS
Pre-Tax IRR
Pre-Tax NPV
Pre-Tax NPV
Pre-Tax NPV
C$ '000s
C$ '000s
C$ '000s
Sustaining Capital
Site Decomissioning and Monitoring
Total Capital Cost
5%
7.5%
10%
50%
$1,475,351
$1,226,684
$1,022,820
$82,683
$16,963
$10,107
$14,685
$8,000
$16,412
$6,523
$10,000
www.rpacan.com
Rev. 0 Page 1-5
CAPITAL COSTS
Directs
Mining
Process Site Development
Acid Baking Plant
Uranium Extraction Plant
Y & REE Plant
Water Treatment Plant
Tailings
Site infrastructure
Indirects
Mine Indirects
Process Indirects
Construction Indirects
Contingency
Process Contingency
Mining & Other Contingency
Total Initial Capital
$
$
$
5,328,215
$154
www.rpacan.com
CASH FLOW RESULTS
The cash flow analysis in this report has been carried out on a pre-tax basis.
Considering the Project on a stand-alone basis, the undiscounted pre-tax cash flow
totals C$2.1 billion over the mine life and simple payback occurs 1.5 years after the start
of commercial production. The internal rate of return (IRR) is 50% and the net present
value (NPV) is as follows:

C$1.5 billion at a 5% discount rate

C$1.2 billion at a 7.5% discount rate

C$1.0 billion at a 10% discount rate
The economic analysis contained in this report is based, in part, on Inferred Resources,
and is preliminary in nature.
Inferred Resources are considered too geologically
speculative to have mining and economic considerations applied to them and to be
categorized as Mineral Reserves. There is no certainty that economic forecasts on
which this Preliminary Economic Assessment is based will be realized.
SENSITIVITY ANALYSIS
Sensitivity analyses were performed for uranium price, REO prices, operating cost,
capital cost, uranium recovery, and rare earth recoveries. The sensitivity analyses on
IRR and NPV at a discount rate of 10% indicate that the Project economics are most
heavily influenced by the recovery and market price of REEs. The Project economics
are also heavily influenced by the operating cost.
These sensitivities focus on rare earth oxides, which provide approximately 64% of the
base case revenue whereas uranium provides approximately 36% of the base case
revenue. The recent price history for rare earths covers a wide range, including order-ofmagnitude increases within 2011. The rare earths price sensitivity is based on results at
a conservative long-term forecast ($30/kg basket price), the base case ($90/kg basket
price), and current prices ($103/kg basket price). Note that these basket prices relate to
gross revenue, before charges for separation are applied.
Figure 1-1 and Table 1-2 summarize the results of the sensitivity analyses.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 1-6
www.rpacan.com
FIGURE 1-1 SENSITIVITY ANALYSIS
$2,000,000 NPV @ 10% ('000s)
$1,600,000 REE Recovery
$1,200,000 U3O8 Recovery
REE Price
$800,000 U3O8 Price
Operating Costs
$400,000 Capital Costs
$0 ‐40%
‐30%
‐20%
‐10%
0%
10%
20%
30%
40%
Factor of Change
Note: U3O8 recovery has the same slope as U3O8 price.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 1-7
www.rpacan.com
TABLE 1-2 SENSITIVITY ANALYSIS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Factor
0.72
0.86
1
1.14
1.29
U3O8 Market Price
U3O8 Price (US$/lb)
NPV (C$ millions)
50
728
60
875
70
1,022
80
1,171
90
1,319
IRR (%)
35%
45%
50%
57%
60%
Factor
0.33
0.66
1
1.14
REO Basket Price
REO Price (US$/kg)
NPV (C$ millions)
30
(381)
60
324
90
1,022
103
1,316
IRR (%)
NA
26%
50%
59%
Operating Cost Per Tonne Milled
Opex (C$/t)
NPV (C$ millions)
IRR (%)
Factor
0.8
0.9
1
1.1
1.2
Factor
0.8
0.9
1
1.1
1.2
Factor
0.85
0.925
1
1.075
1.15
58
65
71
80
87
1,278
1,151
1,022
895
767
Capital Cost
Capex (C$ millions)
NPV (C$ millions)
534
600
667
734
800
1,132
1,077
1,022
968
914
Recovery - REE
Average Recovery
NPV (C$ millions)
68%
751
74%
887
79%
1,022
85%
1,159
90%
1,295
58%
54%
50%
46%
42%
IRR (%)
63%
56%
50%
46%
41%
IRR (%)
42%
46%
50%
54%
58%
EXTENDED MINE LIFE SENSITIVITY
The MCB is known to persist to the north of the current resource model, as indicated by
historical drilling. RPA examined the effect of extending the mine life to include an
additional 50 Mt of production from the MCB, resulting in a mine life of 25 years.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 1-8
www.rpacan.com
The undiscounted pre-tax cash flow for the extended mine life sensitivity totals C$6.5
billion with an IRR of 51%. The net present value (NPV) is as follows:

C$3.2 billion at a 5% discount rate

C$2.3 billion at a 7.5% discount rate

C$1.7 billion at a 10% discount rate
Given the long mine life, RPA also looked at a higher production rate for this extended
mine life sensitivity, increasing production from 9,000 tpd to 12,000 tpd while using the
same mining method. A summary of the key inputs and criteria in developing the 12,000
tpd option is illustrated below.

LOM of 20 years

Higher capital costs for larger operation:
o Initial capital cost of C$661 million
o Total capital cost of C$838 million

Lower operating costs of C$69 per tonne of ore mined,
The undiscounted pre-tax cash flow in this case totals C$6.6 billion. The IRR is 53% and
the NPV is as follows:

C$3.6 billion at a 5% discount rate

C$2.7 billion at a 7.5% discount rate

C$2.1 billion at a 10% discount rate
CONCLUSIONS
In RPA’s opinion, the PEA indicates that positive economic results can be obtained for
the Eco Ridge Mine Project, in a scenario that includes room and pillar mining, and
uranium and rare earth recovery by conventional milling.
The Base Case LOM plan for the Project indicates that 34.6 Mt, at average grades of
0.040% U3O8 and 1,455 g/t TREO, will be mined over 11 years at a nominal production
rate of 9,000 tpd. Uranium production is projected to total 27.5 million pounds, and REO
production is projected to total 44.1 million kilograms.
The Project has good potential for increasing the base case mine life.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 1-9
www.rpacan.com
Specific conclusions by area of the PEA are as follows.
GEOLOGY AND RESOURCES
Rare earth and uranium mineralization on the Eco Ridge property is hosted primarily by
the Main Conglomerate Bed (MCB) and the Hangingwall Zone (HWZ) located within the
Ryan Member of the Mississagi Quartzite.
On average, the MCB is 2.7 m thick and dips consistently at an average of -21o north.
The HWZ, located immediately above the MCB, is defined by economic limits. The
current Mineral Resource estimate is listed in Table 1-3.
TABLE 1-3 SUMMARY OF MINERAL RESOURCES – APRIL 16, 2012
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Tonnes
U3O8
U3O8
LREO
HREO
TREO
TREO
(000)
(%)
(000 lbs)
(ppm)
(ppm)
(ppm)
(000 lbs)
MCB
20,514
0.045
20,447
1,426
193
1,618
73,184
HWZ
28,223
0.012
7,214
733
88
821
51,111
Total
48,737
0.026
27,661
1,025
132
1,157
124,295
MCB
16,906
0.043
15,940
1,279
183
1,463
54,515
HWZ
20,956
0.013
5,822
713
95
808
37,329
Total
37,863
0.026
21,762
966
134
1,100
91,843
Zone &
Classification
Indicated
Inferred
Notes:
1.
2.
3.
4.
5.
6.
CIM definitions were followed for Mineral Resources.
Mineral Resources were estimated at a cut-off value of $100 per tonne for the MCB, and $50 per
tonne for the HWZ. Values were calculated based on prices and recoveries of uranium and rare
earths, net of off-site rare earth separation costs.
Mineral Resources were estimated using an average uranium price of US$70 per lb U3O8, a rare
earth “basket price” of $78 per kg (net of separation charges), and a C$:US$ exchange rate of
1.00:1.00.
A minimum mining thickness of 1.8 m was used for the MCB.
Light Rare Earth Oxides include La2O3, CeO2, Pr6O11, and Nd2O3.
Heavy Rare Earth Oxides include Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3,
Yb2O3, Y2O3, and Lu2O3. Sc2O3 is also included in HREO, as it occurs in low concentrations and
carries high unit values like an HREO.
Historic drilling has intersected the MCB to the west, to the east, and down-dip from the
current Mineral Resource. A target for further exploration was estimated for these areas,
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-10
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
consisting of a further 40 Mt to 60 Mt, grading from 0.030% to 0.050% U3O8,
accompanied by 0.12% to 0.18% TREO for the MCB.
The potential quantities and grades of the exploration targets are conceptual in nature
and there has been insufficient drilling to define a Mineral Resource. It is uncertain if
further exploration will result in the definition of a mineral resource in these areas.
MINING
The MCB is correlated with the “Pardee Reef” in the Nordic Channel. This reef was
mined at the adjacent Nordic and Stanleigh mines operated by Rio Algom between 1957
and 1996.
A number of mining methods have been assessed by RPA and others for extraction of
the MCB mineralization. The selected mining method was room and pillar, with both
development and production contained within the mineralized zone. The development
and production tonnage will be loaded into trucks and transported to surface for
processing.
Although the MCB average mining thickness is 2.7 m, in RPA’s opinion, the deposit will
support a high production rate. The lateral extents are such that multiple accesses from
surface are feasible, providing many independent workplaces.
The use of conveyors instead of haul trucks for material handling, while not included in
the base case, may provide economic advantages, and is worth consideration in future
studies.
Particular attention should be paid to impacts on grade distribution in
production schedules for each option, as there may be less flexibility with conveyors,
offsetting the cost advantage that they provide.
In RPA’s opinion, conveyors may also provide operational advantages that are difficult to
quantify economically at this stage of the Project, including better mine ventilation,
reduced traffic on the ramps, and easier material handling as the mine extends at depth.
Geotechnical and hydrogeological assumptions are supported by historic operations in
Elliot Lake, however, require confirmation by data collection and analysis at the Project.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-11
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
PROCESSING AND METALLURGY
Historically, mining and processing operations have been carried out in the Elliot Lake
area, but not on the Eco Ridge Mine property. The major portion of the ore mined was
processed through a conventional uranium processing plant, with some production from
underground leaching on run-of-mine ore. Yttrium oxide and rare earth oxides were also
recovered at the Denison Mine in the past, as by-products of the uranium production.
RPA has observed that the metallurgical program supporting the current Project
flowsheet has been dynamic, involving changes in pursuit of potential improvements on
relatively short notice.
The unit operations within the process flowsheet have been
tested at various times, using different metallurgical samples, which is not unusual at the
PEA stage of project development. The testwork to date has focused on optimizing rare
earths recoveries, and although the overall uranium recovery assumption has not been
verified by testwork, it is typical of that achieved in historical operations. The assumed
recovery is supported by excellent results achieved for uranium in the acid bake unit
operation. RPA made a number of assumptions in assembling the various testwork
results into a coherent overall recovery for each element.
The data used for the PEA is preliminary in nature and, therefore, indicative of the
results that may be expected after a more rigorous and thorough program of
metallurgical testing is conducted. The actual results achieved in the long term may vary
significantly if a plant is ultimately constructed and operated, particularly since the
current design is based on many assumptions.
That being said, the processes that have been tested are not optimized and, based on
that observation, it is reasonable to expect that the results may also be better.
ENVIRONMENT
Preliminary baseline aquatic and terrestrial environmental studies have been performed
and no environmental problems have been identified to date. In order to identify all
potential environmental risks pertaining to the Project, Human Health and Ecological
Risk Assessments will need to be conducted during the Environmental Assessment (EA)
process. The assessments will be completed in full matrices, with the highest ranking
environmental risks being identified along with corresponding abatement strategies listed
in table format. Because of the extensive documented experience in the Elliot Lake
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-12
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
mining camp with uranium mine operations and decommissioning, it is expected that all
significant risks can be effectively managed.
MARKETS
Uranium
A uranium price of US$70/lb U3O8 has been used in this PEA, based on independent
metal price forecasts from banks and financial institutions. RPA notes that the price
used in the PEA, while slightly above the long term price for U3O8, is within the range of
medium- to long-term forecasts.
Rare Earths
The market for rare earth products is currently relatively small but growing rapidly for
certain rare earths. Public information on price forecasts and sales terms are difficult to
obtain and vary within a wide range. Current prices are tracked by sources such as
Asian Metal and Metal-PagesTM, based on transactions.
Recent history shows international rare earth market prices growing at an
unprecedented rate since China cut export quotas by approximately 40% in 2011.
China’s overwhelming control on the rare earth supply chain, from upstream mining to
downstream processing and end-user products, is likely to remain intact on all but a few
materials through 2016. Rare earth prices are expected to remain volatile in the short
term.
A small number of REE producers outside of China are likely to be in operation by the
time the Eco Ridge Mine Project is developed. This is expected to saturate the market
for LREO such as lanthanum and cerium, however, demand for high-value HREO (such
as dysprosium) is expected to grow, and supply is expected to remain in deficit.
Price forecasting in this environment is difficult, and certain to contain wide margins of
error.
RPA selected rare earth prices within a range of available forecasts. Prices for certain
elements are higher than current prices, and for others, lower, however the average
basket price is approximately 13% lower than Q2 2012 prices.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-13
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
RPA considers these rare earths prices to be appropriate for a PEA-level study,
however, we note that the recent market volatility introduces considerably more
uncertainty than a comparable base or precious metals project.
RECOMMENDATIONS
RPA recommends that Pele Mountain continue collecting data to support the feasibility
and licensing process, and move on to more advanced engineering studies.
Specific recommendations are as follows:

Continue infill drilling programs to advance the Inferred Resources to
Indicated classification. The budget presented below includes resource
drilling.

Carry out geotechnical and hydrogeological studies to confirm the parameters
for mining without adversely impacting ground stability.

Undertake a systematic metallurgical testing program. Care should be taken
to collect samples that are representative of the material that will be
processed over the LOM. An outline of the testing program should be
developed prior to the time the samples are collected and sufficient amounts
of materials should be shipped to the testing facility to complete the testing
that is required for the next phase of the project development.

RPA also recommends that SNC Lavalin continue to liaison and coordinate
with the testing laboratory to oversee the testing parameters and to review
the results as they become available. This will help to ensure that the data
meets the requirements of producing design information that is needed to
support the Feasibility Study.

The metallurgical program should be planned, budgeted, and scheduled to
integrate with other aspects of the project.

Future testing programs must also include tests to evaluate the processes to
precipitate uranium oxide and rare earth carbonate concentrates to determine
the processing parameters required for the plant design.

Continue to evaluate rare earth separation opportunities for upgrading the
rare earth concentrate to separated rare earth oxides.

Continue baseline studies in preparation for an EA, and the licensing
process.

Continue public consultation.

Once the project activities have been sufficiently defined and funding for the
Feasibility Study and licensing process is secured, an application should be
submitted to the Canadian Nuclear Safety Commission (CNSC) to construct
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-14
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
the Eco Ridge Mine and the EA process should continue by submitting a
revised Project Description to the Major Projects Management Office.

Continue the EA process based on EA Guidelines (to be provided by the
CNSC / Canadian Environmental Assessment Act (CEAA)) and the licensing
process in consultation with CNSC.

Monitor developments in REO and uranium markets, including forecast
market prices based on supply and demand fundamentals for each of the
rare earths and uranium.
Based on Pele Mountain’s intention to advance the Project to the feasibility stage, RPA
has recommended the proposed program. The objectives of the proposed program are
to assess the opportunities, while advancing the studies supporting the feasibility and
licensing process. A budget is presented in Table 1-4.
TABLE 1-4 PROPOSED WORK PROGRAM AND ESTIMATED COST
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Item
Infill Drill Program
Cost
(C$ millions)
5.6
Geotechnical Studies
0.7
Metallurgical Testwork
0.7
Feasibility Study
8.0
Environmental Baseline Monitoring
1.5
Permitting Activities
4.5
Government Agency Project Review
1.5
Contingency
2.5
Total
25.0
A schedule for the Project, covering the path forward through a Feasibility Study,
permitting, and construction, is presented in Figure 1-2. The critical path runs through
the permitting process, although this is influenced by the availability of sufficient
engineering work being completed as needed for key permitting documents.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 1-15
Technical Report NI 43-101 – June 20, 2012
Activity ID
Activity Name
Original Start
Duration
Environmental
EIA (SENES)
Finish
2012
2013
J F M A M J Jul A S O N D J F M A M J J A S O N D
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12*
10-Nov-17
S50810
Consultation
S50760
Submit Project Description to CNSC
S50770
Baseline Characterization Program/Reporting
427 03-Jul-12
24-Mar-14
F3310
Environment Impact Statement
427 27-Sep-12
19-Jun-14
S50800
Other Authorisations
488 28-Mar-13
19-Mar-15
S50780
Regulatory Review and EA Decision Statement
190 19-Jun-14
30-Mar-15
S50790
Issue Site Preparation / Construction Licences
122 06-Jan-15
02-Jul-15
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
Preliminary Mine Site Study
Geotechnical
MINE SITE - RPA
60 03-Jul-12*
60 01-Aug-12*
Hydrogeological Study
S50730
Underground Geotechnical Studies
120 01-Aug-12
29-Jan-13
F3290
Resource Drilling
160 01-Aug-12
27-Mar-13
S50720
Resource Update
60 28-Mar-13
24-Jun-13
248 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
Key Milestones
GENERAL
F1160
Commence Feasibility Study
F1150
Feasibility Study Complete
Engineering
MINE SITE
S50750
Feasibility Mine Design & Cost Estimation
26-Oct-12
0
13-Dec-13*
26-Sep-13
120 02-Jan-13
25-Jun-13
120 02-Jan-13
25-Jun-13
180 10-Jan-13
18-Sep-13
Process Engineering
165 10-Jan-13
05-Sep-13
49E0030
Engineering Design & MTO's
140 07-Mar-13
18-Sep-13
49E0020
Plant Layouts
110 04-Apr-13
04-Sep-13
180 10-Jan-13
26-Sep-13
180 10-Jan-13
26-Sep-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
1-16
TAILINGS FACILITY
F2970
Tailings Facility Design & MTO's
Procurement
F1840
Equipment/Installation Contract Pricing
Estimate Compilation
F2780
Estimate Compilation & Review
F1190
Handover to Client
0
Project Execution
Key Milestones
GENERAL
KM10
Contract Award for Execution
KM20
Project Completion
05-Dec-16
718 21-Jan-14
05-Dec-16
718 21-Jan-14
05-Dec-16
06-May-15
310 04-Feb-14
06-May-15
310 04-Feb-14
06-May-15
TF0010
Tailings Facility Design
150 04-Mar-14
06-Oct-14
530 15-Apr-14
08-Jun-16
530 15-Apr-14
08-Jun-16
Procurement
240 15-Apr-14
08-Apr-15
F3220
Manufacture & Deliver to Site
490 13-Jun-14
08-Jun-16
359 02-Jul-15
05-Dec-16
359 02-Jul-15
05-Dec-16
F3320
Construction Permits Available
F3240
Site Establishment
F3330
Construction Monitoring for Tailings Facility
F3250
Site Work
F3340
Continue Construction Monitoring for Tailings Facil ity
80 18-Apr-16
09-Aug-16
F3260
Commissioning
60 12-Sep-16
05-Dec-16
Actual Work
Critical Remaining Work
Milestone
June 2012
Project Schedule
0 02-Jul-15
100 02-Jul-15
24-Nov-15
80 23-Jul-15
17-Nov-15
299 30-Jul-15
10-Oct-16
Source: SNC Lavalin, 2012.
www.rpacan.com
F3230
Remaining Work
Elliot Lake, Ontario, Canada
05-Dec-16*
310 04-Feb-14
Engineering Design for Process Plant
Construction
Eco Ridge Mine Project
0 21-Jan-14
49010
Procurement
Pele Mountain Resources Inc.
13-Dec-13
718 21-Jan-14
0
Engineering
Figure 1-2
0 02-Jan-13*
192 02-Jan-13
49E0010
PROCESS PLANT
A S O N
26-Sep-12
S50740
Feasibility Study
2014
2015
2016
2017
J F M A M J J A S O N D J F M A M J Jul A S O N D J F M A M J J A S O N D J F M A M J J
www.rpacan.com
TECHNICAL SUMMARY
PROPERTY LOCATION, ACCESS AND INFRASTRUCTURE
The Eco Ridge Mine property is located in northern Ontario, approximately 11 km east of
the City of Elliot Lake and 400 km northwest of Toronto. The Project is located in
Gunterman, Deagle, Gaiashk, Joubin, and Proctor townships, District of Algoma. It is
centred at approximately Universal Transverse Mercator (UTM) coordinates 384000E
and 5138000N (NAD 83, Zone 17).
Highway 108 crosses the western portion of the Eco Ridge property. The turn-off for the
access road to the property from Highway 108 is located three kilometres south of Elliot
Lake. The road is a public road. The west boundary of the property is located four
kilometres from the turn-off. The road extends across the property and in this area is
suitable for access by all-wheel drive vehicles only, during some of the year.
LAND TENURE
The Eco Ridge Mine property consists of 38 mining claims totalling 392 claim units and
two mining leases covering approximately 7,822 ha in the Sault Ste. Marie Mining
Division. Pele Mountain’s interest in the above mining claims was acquired by staking
and by entering into purchase agreements and mining leases. As of the effective date of
this report, all of the subject lands are in good standing and are currently 100% held
under the name of First Canadian Uranium Inc., a wholly-owned subsidiary of Pele
Mountain.
On October 16, 2006, Pele Mountain announced that it had entered into an agreement
with CanAlaska Uranium Ltd. (CanAlaska) to purchase five unpatented claims totalling
60 claim units in Joubin Township. Pele Mountain agreed to pay $13,000 in cash and
issue 60,000 common shares at an attributable value of $12,000.
Pele Mountain’s
interest in the claims is subject to a 1.75% Net Smelter Return (NSR) royalty. Pele
Mountain has the right to buy-back up to 1% of the royalty for $1 million. Pele Mountain
completed and filed $25,000 of assessment work to keep the claims in good standing as
part of the acquisition agreement.
On December 18, 2006, Pele Mountain announced that it had entered into an agreement
with Precambrian Ventures Ltd. (Precambrian) whereby it could acquire a 100% interest
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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in eight claims totalling 101 claim units. Pursuant to the terms of the agreement, Pele
Mountain agreed to make cash payments totalling $305,000 and issue 425,000 common
shares at an attributable value of $0.88 per share over three years. Precambrian retains
a 1.75% NSR royalty. Pele Mountain has the right to buy-back 1% for $1 million.
On May 2, 2007, Pele Mountain announced that it had entered into an agreement to
acquire five additional claims totalling 77 claim units in Joubin and Proctor townships.
Pursuant to the terms of the agreement, Pele Mountain agreed to pay $122,000 in cash
and issue 150,000 shares at an attributable value of $0.90 per share or an aggregate
value of $135,000. Pele Mountain’s interest in these claims is subject to a 3% NSR
royalty with provision to buy-back 1.5% for $1.5 million.
In 2009, Pele Mountain signed a 21-year lease agreement (the “Lease”) with the City of
Elliot Lake (the “City”) in respect of surface rights to key mining claims. The Lease
includes the City’s surface rights to a total of 48 surface patents, comprising of
approximately 796 ha, and includes an option for the Company to purchase the surface
rights under certain circumstances. The annual lease payment is $2,388.
In 2011, two mining leases (the “Mining Leases”) were granted to Pele Mountain from
the Province of Ontario for the Eco Ridge Mine Project. The Mining Leases provide the
Company with the exclusive right to mine the Eco Ridge deposit, and include surface
rights that allow for siting of Project infrastructure and processing facilities. The Mining
Leases are for a period of 21 years (commencing March 1, 2011) and are renewable.
The Mining Leases cover an area of 1,550 ha, and the annual lease payments total
$4,652.
HISTORY
Uranium was discovered in the Elliot Lake District in 1948 and the subsequent
prospecting resulted in the discovery of several zones of radioactive conglomerate.
Production started in 1958 and by the end of 1996, when the last mine in the district was
shut down due to the low demand and oversupply of uranium, a total of 138,500 tonnes
of uranium metal had been produced at an average grade of about 0.09% U3O8 from the
12 mines at Elliot Lake.
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The mining at Elliot Lake was all by underground methods, primarily room and pillar, with
shaft access. The major portion of the ore mined was processed through a conventional
uranium processing plant, with some production from underground leaching. Yttrium
oxide and rare earth oxides were also recovered at the Denison mine in the past, as byproducts of the uranium production.
A number of companies have been involved in exploration on the Eco Ridge Mine
property. The major portion of the exploration was conducted in the period from 1953 to
1955 immediately following the discovery of uranium in the Elliot Lake District. The
uranium mineralization was discovered by surface prospecting and mapping, followed by
diamond drilling. This exploration outlined the Pardee Channel, which hosts the deposit,
and the subsequent drilling traced the mineralization down dip to a depth of about 500 m
over a strike length of about 5,000 m. Further exploration during the 1960s and early
1970s consisted of deeper drilling and demonstrated that the mineralization continued
down dip and extended to a depth of about 1,200 m.
With the closure of the mines at Elliot Lake in the 1990s, the Eco Ridge Mine claims,
then held by Rio Algom Limited, were allowed to lapse. The near surface part of the
property was staked by CanAlaska in October 2004 and January 2005. CanAlaska
carried out a compilation of historic data on the property but did not conduct any
exploration surveys or drilling.
In October 2006, Pele Mountain drilled one hole on the property for assessment
purposes. In January 2007, RPA prepared a Mineral Resource estimate based on the
historical drilling results. An Inferred Mineral Resource was estimated at approximately
30 Mt grading 0.050% U3O8 containing 33 million pounds of U3O8.
Pele Mountain drilled another 56 holes under supervision by RPA in 2007. A Preliminary
Assessment report was prepared in October 2007 and presented an updated Mineral
Resource, including an Indicated Mineral Resource of 5.7 Mt at 0.051% U3O8 containing
6.4 million pounds of U3O8 and an Inferred Mineral Resource of 37.3 Mt at 0.044% U3O8
containing 36.1 million pounds of U3O8.
RPA’s 2007 Preliminary Assessment projected a 20 year mine life, including
decommissioning, at a production rate of 3,214 tonnes per day (tpd), with 1,260 tpd from
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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panel drifting trucked to surface and processed in a conventional acid leach plant and
1,954 tpd from longhole mining with underground bioleaching.
RPA completed an NI 43-101 Technical Report containing an updated Mineral Resource
estimate in April 2011.
Indicated Mineral Resources totaled 14.3 Mt, at grades of
0.048% U3O8 and 1,640 ppm TREO. Inferred Mineral Resources totaled 33.1 Mt, at
grades of 0.043% U3O8 and 1,320 ppm TREO.
In August 2011, RPA completed a Preliminary Economic Assessment based on
processing by in-situ and surface heap leaching.
GEOLOGY AND MINERALIZATION
The Elliot Lake area lies within the Precambrian Canadian Shield of Northern Ontario,
Canada, at the boundary between the Southern and Superior Geological Provinces.
Three major regional lithological components and two regional structural components
locally influenced the initial deposition and subsequent deformation of the Elliot Lake
mineral deposits:

The Archean-age basement made up of metavolcanic and metasedimentary
rocks, granite and minor mafic intrusive rocks of the Superior province;

Proterozoic-age Huronian metasedimentary
intercalated mafic volcanic rocks;

Post-Huronian intrusive rocks including Nipissing diabase sills and post
Nipissing diabase dykes and sills, small felsic intrusive bodies and
lamprophyre dykes;

Regional folding and thrust faulting during the Penokean Orogeny;

Faulting during the late Proterozoic.
rocks
containing
minor
The Elliot Lake uranium deposits are located within the Huronian sediments, in the
thicker sections of the Matinenda Formation that are located over depressions in the
underlying Archean basement. These thicker sections are termed channels and the
channels generally strike west-northwest. The Matinenda Formation consists of wellsorted arkosic quartzite with coarse-grained beds containing scattered quartz pebbles.
The uraniferous quartz-pebble conglomerates are enclosed within the quartzite beds.
The quartz-pebble conglomerate beds (historically called reefs) containing the uranium
mineralization is located within the lower Matinenda Formation about 40 m to 50 m
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above the basement. The lower Matinenda, designated as the Ryan Member, is
characterized by the presence of pebbles, an increase in the amount of pyrite, and a
distinctive green colour as a result of sericite alteration. The higher grade rare earths
and uranium mineralization is contained within three conglomerate beds in the Ryan
Member: the BCB, the MCB, which is equivalent to the Pardee Reef, and the Floater
Reefs. Although little uranium is found outside of the conglomerate beds, rare earths
mineralization has been found throughout the Ryan Member, including within the HWZ.
The Elliot Lake deposits are interpreted to be modified paleoplacer (detrital) deposits
and the source rocks are believed to be pegmatitic granite located to the north.
The primary uranium-bearing minerals are uraninite and brannerite. Other uranium
minerals that have been reported are pitchblende, coffinite, and thucolite. All minerals
deposited with the uranium have a specific gravity of 5.0 or greater and they are also
resistant to weathering (hardness of 5.0 or greater), which results in their deposition as
heavy minerals within the matrix of the quartz pebble conglomerate beds.
The major carrier of the REE is monazite, which contains over 90% of the REE in the
MCB. The remainder of the REE (about 10%) is contained within the uranium minerals
uraninite, pitchblende, coffinite, and brannerite.
EXPLORATION STATUS
Pele Mountain drilled its first hole on the Property in February 2005 and has been
systematically exploring and evaluating the Eco Ridge Mine Property since October
2006. Pele Mountain carried out exploration programs in 2007, 2008, 2009, and 2011,
oriented mainly towards infill drilling. Pele Mountain’s exploration programs have
consisted primarily of resource drilling, mineralogical evaluation, and metallurgical
testing. In 2010, Pele Mountain re-assayed pulps from the 2007-2009 drilling programs
to obtain REE, yttrium and scandium data. In 2011, Pele conducted an extensive core
resampling program to include the hanging wall zone (HWZ) above the main
conglomerate bed.
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MINERAL RESOURCES
The current Mineral Resource estimate is listed above, in Table 1-3, including Indicated
Mineral Resources of 48.7 Mt at 0.026% U3O8 and 1,157 ppm TREO and Inferred
Mineral Resources of 37.9 Mt at 0.026% U3O8 and 1,100 ppm TREO.
Cut-offs were applied on the basis of unit values - $100 per tonne for the MCB and $50
per tonne for the HWZ. A minimum mining thickness of 1.8 m was used.
Historic drilling has intersected the MCB down-dip from the current Mineral Resources.
A target for further exploration was estimated for these areas, consisting of a further 40
Mt to 60 Mt, grading from 0.030% to 0.050% U3O8, accompanied by 0.12% to 0.18%
TREO for the MCB.
The potential quantities and grades of the exploration targets are conceptual in nature
and there has been insufficient drilling to define a Mineral Resource. It is uncertain if
further exploration will result in the definition of a mineral resource in these areas.
MINING METHOD
The geometry of the MCB within the resource wireframe can be described as a narrow
reef, with a shallow dip approximately 20° to the north and a plunge of approximately 10°
to the north-west. The mineralized zone is oriented in an easterly direction with a strike
and dip length of approximately 5,700 m and 2,000 m, respectively.
The selected mining method was room and pillar. Both development and production will
be contained within the mineralized zone. The development and production tonnage will
be loaded into trucks and transported to surface for milling.
Mine access will be accomplished using decline ramps from surface.
MINERAL PROCESSING
The conceptual process design and preliminary capital and operating costs were
developed by SNC-Lavalin Inc., as reported in Pele Mountain Resource Eco Ridge
Project Capital and Operating Cost Estimates (2012).
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Rare earths and uranium will be recovered by crushing and grinding, froth flotation, and
magnetic separation, acid baking and water leaching, solid/liquid separation, high
density sludge (HDS) removal, and recovery of the valuable elements by solvent
extraction and precipitation.
MARKET STUDIES
URANIUM
A uranium price of US$70/lb U3O8 has been used in this PEA, based on independent
metal price forecasts from banks and financial institutions.
RARE EARTHS
The market for rare earth products is small and public information on price forecasts and
sales terms are difficult to obtain. Current prices are tracked by sources such as Asian
Metal and Metal-PagesTM, based on transactions.
Recent history shows international rare earth market prices growing at an
unprecedented rate since China cut export quotas by approximately 40% in 2011.
China’s overwhelming control on the rare earth supply chain, from upstream mining to
downstream processing and end-user products, is likely to remain intact on all but a few
materials through 2016. Rare earth prices are expected to remain volatile in the short
term.
A small number of REE producers outside of China are likely to be in operation by the
time the Eco Ridge Mine Project is developed. This is expected to saturate the market
for certain light rare earths such as lanthanum and cerium, however, demand for highvalue heavy rare earths (such as dysprosium) is expected to grow, and supply is
expected to remain in deficit.
Price forecasting in this environment is difficult, and certain to contain wide margins of
error.
RPA selected rare earth prices within a range of available forecasts. Prices for certain
elements are higher than current prices, and for others, lower, however the average
basket price used in the PEA is approximately 13% lower than Q2 2012 prices.
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RPA considers these rare earths prices to be appropriate for a PEA-level study,
however, we note that the recent market volatility introduces considerably more
uncertainty than a comparable base or precious metals project.
ENVIRONMENTAL CONSIDERATIONS
Pele Mountain Resources has conducted preliminary baseline environmental studies in
support of development of the Eco Ridge Mine Project. Consultation with potentially
affected communities, including First Nations, has also been given a high priority by
Pele. The environmental studies that have been conducted in support of the project
include:

Terrestrial Ecosystems Preliminary Site Characterization Report – 2008

Aquatic Ecosystems Preliminary Site Characterization Report – 2008

Additional Aquatic Studies of Rioux Lake

Preliminary Groundwater Scoping Evaluation – 2008

Stage 1 Archaeological Assessment

Conceptual Design of a Tailings Disposal Facility (TDF) – 2008, updated in
2012

Project Description submitted to the Major Projects Management Office and
the Canadian Nuclear Safety Commission in 2008 (for information purposes
only, not as a formal regulatory submission)

Preliminary Geo-Chemical Characterization of Tailings – on-going

Work Planning for Detailed Environmental Characterization Studies – ongoing
Pele Mountain will be required to complete an Environmental Assessment prior to
receiving the necessary licenses to operate.
CAPITAL AND OPERATING COST ESTIMATES
The total Project capital costs are presented in Table 1-5.
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TABLE 1-5 OVERALL CAPITAL COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Mine
Initial
(C$ 000)
61,185
Sustaining
(C$ 000)
25,235
TOTAL
(C$ 000)
86,802
Processing
229,806
-
229,806
Tailings
24,685
22,935
47,620
Infrastructure
25,000
10,000
35,000
114,561
-
114,561
Sustaining
-
24,000
24,000
Closure
-
22,000
22,000
Contingency
107,606
-
107,606
Total
562,843
104,170
667,013
Component
Indirects
Note: This table does not include costs of $75.9 million for ore mining during the construction
period. Those costs are included in the cash flow as operating costs.
The total operating costs are summarized in Table 1-6.
TABLE 1-6 OPERATING COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Area
C$/t
Mining
41.52
Processing
26.31
G&A
3.50
Total
71.33
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2 INTRODUCTION
Roscoe Postle Associates Inc. (RPA) was retained by Pele Mountain Resources Inc.
(Pele Mountain), to carry out a Preliminary Economic Assessment (PEA) on the Eco
Ridge Mine Project (the Project), Elliot Lake, Ontario. The purpose of this report is to
update the Project economics with results of work completed since the previous PEA in
August 2011 (the “2011 PEA”).
This updated PEA features an updated resource
estimate and a base case scenario for production that focuses on mining the relatively
higher-grade main conglomerate bed, and uses a conventional milling approach for
processing which achieves materially higher recoveries for rare earths and uranium.
Pele Mountain is a Canadian resource exploration and development company focused
on the sustainable development of its 100%-owned Eco Ridge Mine Rare Earths and
Uranium Project (Eco Ridge or the Project). Pele Mountain is a reporting issuer in
Ontario, British Columbia and Alberta, and its common shares are listed on the TSX
Venture Exchange and also trade on the OTCQX. Pele Mountain has also entered into
an agreement to purchase the Simon Rare Earth Claims in Mountain Pass, California.
Currently, the major asset associated with the Project is a stratabound zone of rare earth
oxide (REO) and uranium oxide (U3O8) mineralization.
Rare earth elements (REE) are divided into two groups:
1. The Light Rare Earth Elements (LREE) or cerics, comprising of La, Ce, Pr, and
Nd.
2. The Heavy Rare Earth Elements (HREE) or yttrics, comprising of Y, Eu, Gd, Tb,
Dy, Ho, Er, Tm, Yb, Lu, and Sm. Scandium, while not a rare earth, has been
included with the HREE for purposes of this report.
LREO and HREO refer to oxides of light and heavy rare earth elements respectively. In
this document, TREO (Total Rare Earth Oxides) refers to LREOs and HREOs
collectively.
PEA-level work on the Project is based on the development of an underground mining
operation ramping up to 9,000 tonnes per day (tpd), with the recovery of REO and U3O8.
The 2011 PEA was based on processing via underground bioleaching and surface heap
leaching, while this update is based on conventional milling and acid baking. Materially
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higher recoveries of REO and U3O8, based on recent testwork, proved to outweigh
associated capital and operating cost increases, providing for more robust economic
results.
SOURCES OF INFORMATION
A site visit was carried out on November 22, 2010, by R. Barry Cook, M.Sc., P.Eng.,
Associate Consulting Geologist, RPA, and Tudorel Ciuculescu, M.Sc., P.Geo., Senior
Geologist, RPA. Messrs. Cook and Ciuculescu were accompanied by Patrick Enright
and Leo Robert, contractors working for Pele Mountain.
Discussions were held
regarding the geology of the Eco Ridge Mine property, and a number of sections of core
from holes through the mineralized zone were reviewed.
For verification sampling,
Messrs. Cook and Ciuculescu personally collected five half-core sample intervals from
four holes.
The conceptual process design and preliminary capital and operating cost estimates for
processing were developed by SNC-Lavalin Inc., as reported in Pele Mountain Resource
Eco Ridge Project Capital and Operating Cost Estimates (2012).
Conceptual tailings design and cost estimation was carried out by Golder Associates.
Environmental portions of this report were carried out by SENES Consultants Ltd., who
were involved in the 2007 Preliminary Assessment (PA), and retained by Pele Mountain
to assist with the ongoing environmental assessment process.
The documentation reviewed, and other sources of information, are listed at the end of
this report in Section 27, References.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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LIST OF ABBREVIATIONS
Units of measurement used in this report conform to the Imperial system. All currency in
this report is Canadian dollars (C$) unless otherwise noted.

°C
°F
g
A
a
bbl
Btu
C$
cal
cfm
cm
cm2
d
dia.
dmt
dwt
ft
ft/s
ft2
ft3
g
G
Gal
g/L
g/t
gpm
gr/ft3
gr/m3
hr
ha
hp
in
in2
J
k
kcal
kg
km
km/h
micron
degree Celsius
degree Fahrenheit
microgram
ampere
annum
barrels
British thermal units
Canadian dollars
calorie
cubic feet per minute
centimetre
square centimetre
day
diameter
dry metric tonne
dead-weight ton
foot
foot per second
square foot
cubic foot
gram
giga (billion)
Imperial gallon
gram per litre
gram per tonne
Imperial gallons per minute
grain per cubic foot
grain per cubic metre
hour
hectare
horsepower
inch
square inch
joule
kilo (thousand)
kilocalorie
kilogram
kilometre
kilometre per hour
km2
kPa
kVA
kW
kWh
L
L/s
lb
m
M
m2
m3
m3/h
min
MASL
mm
mph
MVA
MW
MWh
opt, oz/st
oz
ppm
psia
psig
RL
s
st
stpa
stpd
t
tpa
tpd
US$
USg
USgpm
V
W
wmt
yd3
yr
square kilometre
kilopascal
kilovolt-amperes
kilowatt
kilowatt-hour
litre
litres per second
pound
metre
mega (million)
square metre
cubic metre
cubic metres per hour
minute
metres above sea level
millimetre
miles per hour
megavolt-amperes
megawatt
megawatt-hour
ounce per short ton
Troy ounce (31.1035g)
part per million
pound per square inch absolute
pound per square inch gauge
relative elevation
second
short ton
short ton per year
short ton per day
metric tonne
metric tonne per year
metric tonne per day
United States dollar
United States gallon
US gallon per minute
volt
watt
wet metric tonne
cubic yard
year
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3 RELIANCE ON OTHER EXPERTS
This report has been prepared by RPA for Pele Mountain. The information, conclusions,
opinions, and estimates contained herein are based on:

Information available to RPA at the time of preparation of this report,

Assumptions, conditions, and qualifications as set forth in this report, and

Data, reports, and other information supplied by Pele Mountain and other third
party sources.
For the purpose of this report, RPA has relied on ownership information provided by Pele
Mountain. RPA has not researched property title or mineral rights for the Eco Ridge
Mine Project and expresses no legal opinion as to the ownership status of the property.
RPA did review the status of most of the claims on the web site of the Ontario Ministry of
Northern
Development,
Mines
and
Forestry
(www.mndmf.gov.on.ca/
mines/claimaps_e.asp) and, for those claims verified the information is as noted in Table
4-1.
Except for the purposes legislated under provincial securities laws, any use of this report
by a third party is at that party’s sole risk.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
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4 PROPERTY DESCRIPTION AND LOCATION
The Eco Ridge Mine property is located in northern Ontario, approximately 11 km east of
the City of Elliot Lake and 400 km northwest of Toronto (Figure 4-1). The Project is
located in Gunterman, Deagle, Gaiashk, Joubin, and Proctor townships, District of
Algoma, within 1:50,000 scale NTS map sheet 41J07 (Elliot Lake) and map sheet 41J/08
(Whiskey Lake). The Project consists of one irregularly shaped block located within a
rectangular area extending for 13 km in an east-west direction and 6.5 km in a northsouth direction. It is centred at approximately Universal Transverse Mercator (UTM)
coordinates 384000E and 5138000N (NAD 83, Zone 17).
LAND TENURE
The Eco Ridge Mine property consists of 38 mining claims totalling 392 claim units and
two mining leases covering approximately 7,822 ha in the Sault Ste. Marie Mining
Division (Figure 4-2). Table 4-1 lists all the subject claims and their relevant tenure
information. As of the effective date of this report, all of the subject lands were in good
standing and were currently 100% held under the name of First Canadian Uranium Inc.,
a wholly-owned subsidiary of Pele Mountain.
Pele Mountain staked two non-contiguous claim blocks in Joubin and Gunterman
Townships, Elliot Lake District, in February 2005. The eastern claim block became the
first part of “Pele Mountain’s Elliot Lake Property” which was subsequently expanded by
the claim acquisitions described below, which has come to be known as the Eco Ridge
Mine rare earths and uranium project.
TABLE 4-1 SCHEDULE OF CLAIMS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Township
Deagle
Gaiashk
Gunterman
Gunterman
Gunterman
Claim
4221196
4221195
3018858
4254190
4257106
Recording
Date
08/05/2007
08/05/2007
07/03/2008
08/06/2010
08/06/2010
Due Date
08/05/2013
08/05/2013
06/04/2012
08/06/2012
08/06/2012
Work
Req’d
$4,800
$6,400
$800
$800
$2,800
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Units
12
16
2
2
7
Hectares
192
256
32
32
112
Rev. 0 Page 4-1
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Township
Gunterman
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Joubin
Proctor
Proctor
Proctor
Proctor
Proctor
Proctor
Total
Claim
4257107
1211241
1249895
1249896
1249897
1249898
1249899
3009472
4201552
4201554
4201555
4201556
4201560
4201561
4201568
4201634
4201635
4201637
4205078
4214880
4220221
4220222
4220223
4220224
4220225
4220226
4259108
4210398
4215306
4215307
4221192
4221193
4221194
Recording
Date
08/06/2010
23/05/2000
23/02/2001
23/02/2001
23/02/2001
23/02/2001
23/02/2001
04/06/2004
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
24/02/2005
25/01/2007
16/01/2007
15/02/2007
15/02/2007
20/12/2006
16/01/2007
16/01/2007
15/02/2007
28/01/2011
18/03/2009
29/12/2006
29/12/2006
08/05/2007
08/05/2007
08/05/2007
Due Date
08/06/2012
23/05/2013
23/02/2013
23/02/2013
23/02/2013
23/02/2013
23/02/2013
04/06/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
24/02/2013
25/01/2013
16/01/2013
15/02/2013
15/02/2013
20/12/2013
16/01/2013
16/01/2013
15/02/2013
28/01/2014
18/03/2012
29/12/2013
29/12/2013
08/05/2013
08/05/2013
08/05/2013
Work
Req’d
$4,400
$3,600
$6,400
$5,600
$5,600
$3,200
$6,000
$4,800
$4,800
$3,600
$3,200
$3,600
$3,600
$2,000
$4,800
$3,200
$6,400
$2,400
$5,200
$1,600
$4,800
$2,000
$4,800
$4,800
$4,800
$1,200
$1,200
$1,600
$6,400
$6,400
$6,400
$6,400
$6,400
38
Units
Hectares
11
9
16
14
14
8
15
12
12
9
8
9
9
5
12
8
16
6
13
4
12
5
12
12
12
3
3
4
16
16
16
16
16
176
144
256
224
224
128
240
192
192
144
128
144
144
80
192
128
256
96
208
64
192
80
192
192
192
48
48
64
256
256
256
256
256
392
6,272
Note: claims due in 2012 are in the process of being renewed.
On October 16, 2006, Pele Mountain announced that it had entered into an agreement
with CanAlaska Uranium Ltd. (CanAlaska) to purchase five unpatented claims (1192671,
3009465, 3009474, 3009475, and 3009485) totalling 60 claim units in Joubin Township.
Claim 3009475 was re-staked as claim 4218565. Pele Mountain agreed to pay $13,000
in cash and issue 60,000 common shares at an attributable value of $12,000. Pele
Mountain’s interest in the claims is subject to a 1.75% Net Smelter Return (NSR) royalty.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 4-2
www.rpacan.com
Pele Mountain has the right to buy-back up to 1% of the royalty for $1 million. Pele
Mountain completed and filed $25,000 of assessment work to keep the claims in good
standing as part of the acquisition agreement. The subject claims include the original
Calder-Bousquet claim block and the major portion of the Pardee claim block.
It is RPA’s understanding that the payments and share issuances related to the
CanAlaska agreement have been satisfied.
On December 18, 2006, Pele Mountain announced that it had entered into an agreement
with Precambrian Ventures Ltd. (Precambrian) whereby it could acquire a 100% interest
in eight claims (1211241, 1249895, 1249896, 1249897, 1249898, 1249899, 3009471,
and 3009472) totalling 101 claim units. Pursuant to the terms of the agreement, Pele
Mountain agreed to make cash payments totalling $305,000 and issue 425,000 common
shares at an attributable value of $0.88 per share over three years as shown in Table 42.
TABLE 4-2 PRECAMBRIAN AGREEMENT TERMS
Pele Mountain Resources Inc. - Eco Ridge Mine Project
Date
Cash ($C)
Shares
Upon Closing
Dec. 19, 2007
Dec. 19, 2008
Dec. 19, 2009
30,000
50,000
75,000
150,000
50,000
75,000
100,000
200,000
Precambrian retains a 1.75% NSR royalty. Pele Mountain has the right to buy-back 1%
for $1 million. Claim 3009471 was re-staked as 4218566. The subject claims comprise
the eastern portion of the Pardee Channel covering the original Pecors Block.
It is RPA’s understanding that the payments and share issuances related to the
Precambrian agreement have been satisfied.
In January and February 2007, Pele Mountain staked another six claims (4214876,
4214877, 4214880, 4214882, 4214883, and 4214884) totalling 48 claim units and
covering the potential down-dip extension of the favourable conglomerate bed to the
north of the previously acquired claim blocks.
Five of these six claims were
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 4-3
www.rpacan.com
subsequently re-staked as claims 4220225, 4220224, 4220222, 4220226, and 4220221;
claim 4214880 was not re-staked.
On May 2, 2007, Pele Mountain announced that it had entered into an agreement to
acquire five additional claims (4215304, 4215305, 4215306, 4215307, and 4215007)
totalling 77 claim units in Joubin and Proctor townships. Pursuant to the terms of the
agreement, Pele Mountain agreed to pay $122,000 in cash and issue 150,000 shares at
an attributable value of $0.90 per share or an aggregate value of $135,000 as shown in
Table 4-3.
TABLE 4-3 MAY 2007 AGREEMENT TERMS
Pele Mountain Resources Inc. - Eco Ridge Mine Project
Date
Cash (C$)
Shares
On Closing
01-May-08
01-May-09
01-May-10
24,000
28,000
30,000
40,000
30,000
40,000
40,000
40,000
Pele Mountain’s interest in these claims is subject to a 3% NSR royalty with provision to
buy-back 1.5% for $1.5 million. Claim 4215007 was re-staked as claim 4205078.
It is RPA’s understanding that the payments and share issuances related to the May
2007 agreement have been satisfied.
Additional staking was carried out in May 2007 and June 2010. Three claim units that tie
on to the western boundary of the Eco Ridge Mine property were purchased in May
2011 for $3,000 in cash, with the vendor retaining a 1% NSR royalty.
In 2009, Pele Mountain signed a 21-year lease agreement (the “Lease”) with the City of
Elliot Lake (the “City”) in respect of surface rights to key mining claims. The Lease
includes the City’s surface rights to a total of 48 surface patents, comprising of
approximately 796 ha, and includes an option for the Company to purchase the surface
rights under certain circumstances. The annual lease payment is $2,388.
In 2011, two mining leases (the “Mining Leases”) were granted to Pele Mountain from
the Province of Ontario for the Eco Ridge Mine Project. The Mining Leases provide Pele
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 4-4
www.rpacan.com
Mountain with the exclusive right to mine the Eco Ridge deposit, and include surface
rights that allow for siting of Project infrastructure and processing facilities. The Mining
Leases are for a period of 21 years (commencing March 1, 2011) and are renewable.
The Mining Leases cover an area of 1,550 ha, and the annual lease payments total
$4,652.
Figure 4-2 shows the location of the access roads and trails relative to the property
boundaries. The west boundary of the claim block has been surveyed and a claim
inspection was conducted for Pele Mountain by an independent consultant in April-June
2007. The area covered by the provincial Mining Lease has been surveyed.
LICENCES OF OCCUPATION
There are Licences of Occupation within the claim block, which are held by Rio Algom
Limited (Rio Algom). The locations of these Licences of Occupation are shown in Figure
4-2. These Licences of Occupation comprise less than 2% of the overall area of the
claim block and are not considered necessary to conduct future mining and processing
operations on the property.
ROYALTIES AND OTHER ENCUMBRANCES
With the exception of the royalties related to the agreements documented above, RPA is
not aware of any other royalties, back-in rights, or other obligations related to the
agreements or underlying agreements.
PERMITS
The project is currently at the resource definition and Preliminary Economic Assessment
stage and, based on discussions with the Canadian Nuclear Safety Commission (CNSC)
and the Ontario Ministry of Northern Development and Mines (MNDM), no permits are
required from either the provincial or federal governments to conduct preliminary
exploration and evaluation on a mineral project. There is a requirement to notify the
Ontario Ministry of Labour that exploration drilling or surveys are being conducted on the
property. Preliminary exploration may include geological mapping, ground geophysical
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 4-5
www.rpacan.com
and geochemical surveys, airborne geophysical or geochemical surveys, limited
stripping and trenching, limited bulk sampling, and various forms of drilling from surface.
Permits will be required when the project proceeds to the advanced exploration stage.
Advanced exploration means the excavation of an exploratory shaft, adit or decline, the
extraction of material in excess of the prescribed quantity (1,000 t) where the extraction
involves the disturbance or movement of prescribed material located above or below the
surface of the ground, the installation of a mill for test purposes or any other prescribed
work (includes the excavation of backfilled raises, shafts or adits).
ENVIRONMENTAL LIABILITIES
There are no known environmental liabilities associated with the Eco Ridge Mine
property.
There has been no previous production at the property. Exploration was conducted on
the property from 1953 through to 1974, with the majority of the holes drilled in 1953 and
1954. During this period, 109 diamond drill holes were drilled on the property. None of
these holes were grouted and the casings for some of the holes are still in place. Many
of the casings have been destroyed as a result of logging operations conducted in the
area. An exploration adit was excavated in 1954 to recover samples for metallurgical
investigations. The adit was backfilled in 1994 by Rio Algom as part of the
decommissioning programs carried out when the mines were closed in the Elliot Lake
area.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 4-6
www.rpacan.com
Québec
Hudson Bay
Manitoba
PROJECT LOCATION
James
Bay
Source: Geomatics Office, Ministry of Transportation Ontario, 2006.
Red Lake
Pickle Lake
N
O NTAR I O
Kenora
Sioux
Lookout
Thunder
Bay
Timmins
Lake
Superior
Rouyn-Noranda
Chapleau
Kirkland
Lake
Sault Ste. Marie
Sudbury
Val d’Or
Elliot Lake
eM
ichi
g
an
North Bay
Toronto
Lak
U. S. A.
Lake
Ottawa
Huron
ECO RIDGE MINE PROJECT
Windsor
Lake Erie
0
100
200
300
400
500
Lake
Ontario
Figure 4-1
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Kilometres
Elliot Lake, Ontario, Canada
Location Map
June 2012
4-7
375,000 E
380,000 E
385,000 E
390,000 E
395,000 E
5,145,000 N
5,145,000 N
N
5,140,000 N
5,140,000 N
Pele Mountain Property
Boundary
5,135,000 N
5,135,000 N
4-8
Pele Mountain 2011
Lease Boundary
Figure 4-2
5,130,000 N
0
1
2
3
4
Kilometres
Mining Land Tenure Source: Ministry of Northern Development and Mines of Ontario,
Provincial Mining Recorder’s Office, Plan G-3254, 9 February 2011.
Land Tenure Map
(Sault Ste. Marie Mining Division)
5,130,000 N
June 2012
Eco Ridge Mine Project
Joubin Township, Ontario, Canada
www.rpacan.com
Pele Mountain Resources Inc.
www.rpacan.com
5 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
ACCESSIBILITY AND PROPERTY INFRASTRUCTURE
The Eco Ridge Mine property is located 11 km east of the City of Elliot Lake, Ontario,
which is situated 26 km north of Highway 17 (TransCanada Highway) on Highway 108.
Highway 108 crosses the western portion of the property. The turn-off for the access
road to the property from Highway 108 is located three kilometres south of Elliot Lake.
The access road is a public road. The west boundary of the property is located four
kilometres from the turn-off. The road extends across the property and during some of
the year this area accessible by all-wheel drive vehicles only. The access road to the
property is shown in Figure 4-2. The major assets and facilities located on the property
are the rare earths and uranium oxides Mineral Resources, and a 236 kV power line
extending across the property. The location of the exploration adit is also shown in
Figure 4-2. The adit has been backfilled.
Elliot Lake is located 160 km west of Sudbury and 180 km east of Sault Ste. Marie and
these communities are connected by highway. The Sault Ste. Marie, Ontario – Sault Ste
Marie, Michigan border crossing is located 200 miles west of Elliot Lake. There is a
railway line 26 km south at the intersection of Highways 108 and 17 (TransCanada
Highway). There are two deep water ports near the same highway intersection on the
North Channel of Lake Huron. One port is currently used by Lafarge at the town of Blind
River and the other, located at Sprague, is now used by a yacht club. Elliot Lake airport
has a runway 30 m wide and 1,372 m long. The airport is maintained year round and is
certified by Transport Canada for airline service. Air Bravo Corporation operates an air
ambulance service and provides charter service.
CLIMATE
The climate in the Elliot Lake region is suitable for conducting exploration, development,
and operation of a mine throughout the year. The average winter temperature
(December to February) is -9ºC and the average summer temperature (June to August)
is +16ºC. The minimum and maximum temperatures for each month are shown in Table
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 5-1
www.rpacan.com
5-1. The average annual winter snowfall is 236 mm and the average annual rainfall is
636 mm for a total annual precipitation of 872 mm (a factor of 0.1 is used to convert
snowfall to precipitation). Historically, the maximum rainfall for Elliot Lake has been
estimated to be 420 mm of rain within 12 hours.
TABLE 5-1 AVERAGE MINIMUM AND MAXIMUM TEMPERATURES IN THE
ELLIOT LAKE DISTRICT
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Min
(°C)
Max
(°C)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Year
-17.7
-17.6
-11.1
-2.6
4.0
9.5
12.2
11.4
7.7
2.9
-3.9
-12.3
-0.8
-6.4
-5.2
0.8
8.2
15.9
21.5
23.6
22.3
17.7
11.9
3.0
-3.7
9.8
The wind direction is predominantly from the north from December through to April and
from the southwest and south the remainder of the year.
LOCAL RESOURCES
Based on the 2006 census, the City of Elliot Lake has a population of 11,549 people.
The median age of the population is 49.4 years, with about 85% of the population over
15 years of age. Based on October to December 2005 statistics, the labour force is
3,855, or about 38%, of the total population over 15 years of age. This low participation
rate reflects the large number of retirees in the city. The unemployment rate at the same
period was 13%.
There are two fully serviced industrial park areas within the community and existing
buildings are available for lease or purchase.
Elliot Lake has a full complement of educational, professional, medical, and social
services. A new multidisciplinary community medical centre in downtown Elliot Lake
opened in 2007. Tenants of the state-of-the-art facility include 12 family doctors, other
health care professionals such as nurse practitioners and dieticians, and a drug store.
LOCAL INFRASTRUCTURE
Natural gas has been available in Elliot Lake since the mid-1980s and is provided by
Union Gas Limited, a major natural gas company in Canada. Natural gas was used at
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 5-2
www.rpacan.com
the Rio Algom and Denison mines for facility and mine air heating and for product drying.
Natural gas was provided to the Stanleigh Mine, which is located directly northwest of
Pele Mountain’s property, and to the adjacent Nordic Mine property for the operation of
the yellow cake drying and packing plant.
The main east to west high voltage three-phase transmission lines between Ontario
Power Generation’s station in Mississagi and Sudbury cross the eastern edge of the
property. These lines are rated at 230 kV. There is a load centre at Elliot Lake with a
generation capacity of 23 MW. The capacity can be increased. The Elliot Lake hydro
system has the capacity to supply electricity to 25,000 people plus six operating mines.
The entire hydro infrastructure is still in place, although it is not all in current use.
Sulphuric acid is available from Sudbury where it is manufactured as a by-product from
the nickel mining operations sulphur dioxide emission reduction program. The acid is
produced by Vale and Xstrata, but marketed through chemical supply companies. Lime
is available from the Lafarge Cement Plant in Sprague.
Cameco Corporation operates a uranium conversion facility at Blind River, located 50 km
from the property on Highway 17.
PHYSIOGRAPHY
The Eco Ridge Mine property is underlain by moderately rugged topography, with
elevations ranging from 320 m to 430 m. Steep cliffs form the south slopes, while the
north slopes are gentler and tend to follow the dip of the stratigraphy. The ridges trend
east-northeast along the strike of the rocks. The contact between the Huronian
sediments and the underlying Archean rocks forms a south-facing hill. To the south of
this hill, where any future infrastructure would be sited, the topography is relatively flat.
Lakes and streams tend to develop along the strike of the strata and along the northnorthwest trending faults that crosscut the strata.
DRAINAGE BASINS
The Eco Ridge Mine property is located within the Serpent River drainage basin. The
Serpent River Watershed is comprised of more than 70 lakes and nine sub-watersheds,
which cover an area of 1,376 km2, and drain into Lake Huron. The Eco Ridge Mine
property is located within two of the major sub-basins: the Elliot Lake sub-basin on the
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 5-3
www.rpacan.com
western portion of the property and the Pecors Lake sub-basin on the eastern portion of
the property. Drainage on the western part of the Pele Mountain claims is west into
Pardee and Stinson Lakes and south into Kings Lake, while the eastern portion of the
claims drains into Pecors Lake.
FLORA AND FAUNA
The valleys are covered with hemlock and cedar trees and the ridges are wooded with
maple, oak, birch, and poplar trees. Many different species of birds and mammals can
be seen in the forests and surrounding areas of the Pele Mountain claims.
These
include finches to bald eagles and beaver to moose. At this time no rare, threatened, or
endangered species or habitat are known to be present in the project area. A 1993
survey found 22 different species of fish in the lakes of the Serpent River Watershed.
Benthic invertebrates include snails, insect larvae, and clams.
Pele Mountain conducted site characterization and environmental baseline surveys on
the property in 2007 and 2008.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 5-4
www.rpacan.com
6 HISTORY
EXPLORATION
A number of companies have conducted exploration on Pele Mountain’s Eco Ridge Mine
property. The major portion of the exploration on the property was conducted in the
period from 1953 to 1955 immediately following the discovery of uranium in the Elliot
Lake District. The uranium mineralization on the property was discovered by surface
prospecting and mapping, followed by diamond drilling. This exploration outlined the
Pardee Channel, which hosts the deposit, and the subsequent drilling traced the
mineralization down dip to a depth of approximately 500 m over a strike length of
approximately 5,000 m. Further exploration during the 1960s and early 1970s consisted
of deeper drilling and demonstrated that the mineralization continued down dip and
extended to a depth of approximately 1,200 m. The previous exploration on the property
is summarized below.
Aquarius Porcupine Gold Mines Limited (Aquarius) staked the Pardee property in 1953.
The Pardee property forms the central portion of the claim blocks of the current Pele
Mountain property. McIntyre Porcupine Gold Mines Limited (McIntyre) optioned the
claims from Aquarius later in 1953 and carried out line cutting and geological mapping.
In 1954, McIntyre drilled 28 AQ diamond drill holes totalling 2,498 m (S-1 to S-28). The
drill holes were drilled over a strike length of about 3,000 m.
Pardee Amalgamated Mines Limited (Pardee) was formed in 1954 to consolidate the
Aquarius property with other properties in the area.
Pardee carried out extensive
mapping, trenching, diamond drilling, and drove an inclined adit along the conglomerate
bed for a distance of approximately 31 m to obtain a bulk sample for metallurgical tests.
Pardee drilled an additional 30 AXT diamond drill holes totalling 6,567 m (Series PA-1 to
PA-29) and CPA-24 was a joint hole with New Jersey Zinc Exploration Company
Canada Ltd. (New Jersey Zinc) on the boundary with the Calder-Bousquet property,
located immediately to the west of the Pardee claims. The drilling results from the Sseries and PA-series holes outlined a large zone of uranium mineralization within the
Main Conglomerate Bed. The drill hole logs and the analytical results from the core
samples for the S-series and PA-series holes are on file at the MNDM offices in Sault
Ste. Marie.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-1
www.rpacan.com
The eastern portion of the Eco Ridge Mine property was staked in 1953 by Preston East
Dome Mines, a company controlled by the Algom group of companies. Prospecting and
geological mapping were conducted on these claims in 1953 by Algom. Algom drilled a
total of 1,486 m in 15 holes (PW-101 to PW-115) in the eastern portion of the Eco Ridge
Mine property immediately to the west of Pecors Lake in 1953 and 1954. The drilling
intersected the Main Conglomerate Bed (MCB) and mineralization was reported.
Although some cross sections showing the plots of the drill holes were found in the
MNDM office, the drill hole logs with the sample intervals and analytical results are not
available.
New Jersey Zinc conducted exploration drilling on the Calder-Bousquet property located
directly west of the Pardee claim block. In 1954 and 1955, New Jersey Zinc conducted
7,201 m of AXT diamond drilling in 23 holes (CB-1 to CB-23). The holes were tested with
a scintillometer and samples taken. The historic analytical results for these holes and
many of the drill logs were located at the MNDMF offices. The CB-series drill holes also
intersected the MCB.
The northwest portion of the Pele Mountain property was originally staked by St. Mary’s
Uranium Mines Limited (St. Mary’s). Two diamond drill holes were drilled, one a joint
hole with New Jersey Zinc on the boundary with the adjoining Calder-Bousquet property.
The St. Mary’s claims came open for staking and were re-staked by Rio Algom in 1964.
Rio Algom staked the claims in 1965 covering the original Calder-Bousquet claim block.
Rio Algom also acquired the Pardee property. Rio Algom drilled two assessment holes,
CB-30 and CB-31, on the former Calder-Bousquet claim block. The holes were wedged
to provide a second intersection through the MCB.
Sprague (1965) conducted a resource estimate for Rio Algom based on the surface
diamond drilling. The “ore reserve estimate” was based on surface diamond drilling
programs [undertaken] in 1954 and 1955 by McIntyre, Pardee, St. Mary’s, and New
Jersey Zinc on the Calder-Bousquet Property, and two assessment holes drilled by Rio
Algom in late 1965 and early 1966. The estimate indicated 31,265,000 tons of
mineralization averaging 0.059% U3O8 in the MCB, which was referred to as the “Pardee
Reef”.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-2
www.rpacan.com
Sprague’s “ore reserve estimate” was based on a total of 99 holes using a minimum
thickness of 1.5 m (5.0 ft.). This estimate is a historic estimate and does not conform to
the current CIM definitions required under NI 43-101.
Rio Algom drilled three additional holes, CB 32, 33, and 34, on the former St. Mary’s
property in 1967. Rio Algom drilled another two holes on the property (CB-35 and CB36) in 1969 and 1974, respectively. In 1977, Rio Algom re-estimated the “ore reserves”
initially compiled and estimated by Sprague and reported these estimates as “ore
estimates”. The revised estimates included Calder-Bousquet Block, the Pardee Block
and the additional drilling conducted by Rio Algom from 1967 to 1974. The estimates
also include the Pecors Block and the estimate for this block is based on the drilling
conducted by Rio Algom in 1954 (PW-1 to PW-116). This historic estimate is discussed
in the previous Technical Report (Cochrane and Roscoe, 2007).
The northern part of the Pele Mountain Property was formerly held by Stancan Uranium
Corporation (Stancan), Consolidated Callinan Flin-Flon Mines Ltd. (Consolidated
Callinan), and Magoma Mines Ltd. (Magoma). Stancan drilled two deep holes (Z-5-1
and Z-5-2) which intersected a uranium-bearing conglomerate bed. Based on the
descriptions in the drill hole logs and the position of the conglomerate bed in the
stratigraphic sequence, the bed is correlated with the MCB intersected in the up-dip
drilling. However, no assays are available in the public files for the intersections.
Consolidated Callinan and Magoma reportedly drilled one deep hole each, but no data
for these holes are available. The claims were allowed to lapse and were re-staked by
Kerr-McGee Corporation (Kerr-McGee) in the late 1960s. Kerr-McGee drilled three deep
drill holes in 1967, with one hole drilled on the Eco Ridge Mine property. The drill hole
logs are available for these holes.
The summary of the historic drilling programs is presented in Table 6-1. Since the filing
of the 2007 Technical Report (Cochrane and Roscoe, 2007) on the property, the copies
of drill hole logs CB-16 to CB-23 were located. All the historic drilling was core drilling
using AXT rods with a core diameter of 32.5 mm (1.28 in.). The drill collar locations of
the historic drilling are shown in Section 10.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-3
www.rpacan.com
With the closure of the mines at Elliot Lake in the 1990s, the claims held by Rio Algom
were allowed to lapse. The near-surface part of the deposit was staked by CanAlaska in
October 2004 and January 2005. CanAlaska carried out a compilation of historic data
on the property but did not conduct any exploration surveys or drilling. The property was
acquired by Pele Mountain as described in Section 4.
In October 2006, Pele Mountain drilled one hole on the property (PM-1) for assessment
purposes. An Inferred Mineral Resource estimate based on results of historic drilling
was reported in January 2007 (Cochrane and Roscoe, 2007) at 30 Mt grading 0.050%
U3O8 containing approximately 33 million pounds of U3O8.
This Mineral Resource
estimate is superseded by the current estimate.
Pele Mountain drilled another 56 holes under the supervision of Scott Wilson RPA in
early 2007. A Preliminary Assessment report presented an updated Mineral Resource in
October 2007 (Cochrane et al., 2007) consisting of 5.7 Mt grading 0.051% U3O8
containing approximately 6.4 million pounds of U3O8 in the Indicated category, and 37.3
Mt grading 0.044% U3O8 containing approximately 36.1 million pounds of U3O8 in the
Inferred category.
This Mineral Resource estimate is superseded by the current
estimate.
Pele Mountain conducted exploration and infill drilling programs from October 2007 to
August 2009, resulting in 114 new drill holes targeting the MCB. In November 2010 Pele
Mountain sent 1,283 pulps to SGS from MCB intercepts collected previously for a pulp
re-assay program, targeting rare earth elements, Yttrium and Scandium. A PEA was
released in August 2011 (Cox et al., 2011), including an updated Mineral Resource
consisting of 14.3 Mt grading 0.048% U3O8 and 0.164% TREO containing approximately
15.2 million pounds of U3O8 and 51.9 million pounds of TREO in the Indicated category,
and 33.1 Mt grading 0.043% U3O8 and 0.132% TREO containing approximately 31.4
million pounds of U3O8 and 96.4 million pounds of TREO in the Inferred category. This
Mineral Resource estimate is superseded by the current estimate.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-4
www.rpacan.com
TABLE 6-1 HISTORIC DRILL HOLE SUMMARY
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Year
Operator
1954
1955
1953-54
1954-55
1955
1955
1967
1965-69
1974
McIntyre Porcupine Mines
Pardee Amalgamated
Algom Uranium Mines Ltd.
New Jersey Zinc
St. Mary’s
Stancan Uranium Corp
Kerr-McGee Corporation
Riocanex and Rio Algom Mines
Rio Algom
Number of
Holes
28
30
15
23
1
2
2
5
1
Metreage
Hole Numbers
2,498
6,567
1,486
7,201
642
1,744
3,058
5,269
489
S-1 to S-28
PA-1 to PA-29CPA -24
PW-101 to PW-115
CB-1 to CB-23
E-2
Z-5-1 to Z-5-2
143-2 to 143-3
CB-30 to CB-35 (all wedged)
CB-36
Note: CB-30 to CB-35 were wedged from the parent holes to provide duplicate intersections
HISTORICAL MINING
Historically, mining and processing operations were carried out in the Elliot Lake area,
but not on the Eco Ridge Mine property. The mining at Elliot Lake was all by
underground methods, primarily room and pillar, with shaft access. The major portion of
the ore mined was processed through conventional uranium processing plants, with
some production from underground leaching. The Elliot Lake mineralization also
contains rare earth oxides. Yttrium oxide and heavy rare earth oxides were recovered at
the Denison mine in the past, as by-products of the uranium production.
2007 PRELIMINARY ASSESSMENT
The 2007 PA proposed a mining method consisting of a combination of panel drifting
and longhole slashing, followed by uranium recovery via leach processing.
This
scenario involved significantly reduced mining and processing costs relative to the room
and pillar and conventional processing methods previously used at Elliot Lake.
Approximately 40% of the mine production was proposed to be transferred to the surface
for processing in a conventional acid-leach plant, while the remaining 60% was
proposed to be broken down and left in place underground for extraction of the uranium
by bioleaching. The mining and processing parameters were used to extend the
evaluation to the Inferred Resources adjacent to the Indicated Resources to achieve a
20 year mine life, including decommissioning.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-5
www.rpacan.com
2011 PRELIMINARY ASSESSMENT
In preparation for the 2011 PEA, Pele Mountain assayed for rare earth elements, and
commissioned testwork on rare earths processing. RPA estimated Mineral Resources
for rare earths and uranium.
The 2011 PEA indicated that positive economic results could be obtained for the Eco
Ridge Mine Project, in a scenario that includes room and pillar mining, and uranium and
rare earth recovery by leaching both on surface (heap leach) and underground (in-situ
bio-leach).
Leaching recoveries ranged from 70% for uranium, to 38% (average) for heavy rare
earths, and 11% (average) for light rare earths.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 6-6
www.rpacan.com
7 GEOLOGICAL SETTING AND
MINERALIZATION
REGIONAL GEOLOGY
The Elliot Lake area lies within the Precambrian Canadian Shield of Northern Ontario,
Canada, at the boundary between the Southern and Superior Geological Provinces.
Three major regional lithological components and two regional structural components
locally influence the initial deposition and subsequent deformation of the Elliot Lake
mineral deposits:

The Archean-age basement made up of metavolcanic and metasedimentary
rocks, granite and minor mafic intrusive rocks of the Superior province;

Proterozoic-age Huronian metasedimentary
intercalated mafic volcanic rocks;

Post-Huronian intrusive rocks including Nipissing diabase sills and post
Nipissing diabase dykes and sills, small felsic intrusive bodies and
lamprophyre dykes;

Regional folding and thrust faulting during the Penokean Orogeny;

Faulting during the late Proterozoic.
rocks
containing
minor
The major geological provinces and the crosscutting structures within the region are
shown in Figure 7-1 and a table listing the formations is shown in Table 7-1.
TABLE 7-1 TABLE OF FORMATIONS IN THE REGION
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Period
Province or Complex
Dominant Lithology
Age – Ma
Paleozoic
Ordovician
Limestone
448 - 443
Mid-Proterozoic
Grenville
Variable, highly metamorphosed
1,200 - 1,000
Mid- Proterozoic
Keweenawan
Mafic Volcanics
1,225
Early Proterozoic
Nipissing Diabase
Gabbro and Diabase Intrusions
2,115
Early Proterozoic
Huronian Supergroup
Clastic Sediments
2,450 - 2,115
Archean
Superior
Granite and Metavolcanics
>2,500
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-1
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The Huronian metasedimentary and basal volcanic rocks lie unconformably above the
Archean basement. They are part of the Huronian Supergroup, portions of which extend
across the region from Sault Ste. Marie in the west to the Cobalt Area near the Quebec
border in the east. The Huronian sedimentary rocks are interpreted to have been
deposited during a period of marine transgression from south to north, commencing with
quartzite, conglomerates, and argillite with local intercalated mafic volcanics followed by
more mature clastic sediments and marine evaporates. The source of the sediments is
the Archean rocks of the Superior province to the north. The unconformity with the
basement rocks is sharp in some places and at others is represented by several metres
of regolith.
The Huronian Supergroup has been divided into four groups, each containing several
formations (Table 7-2).
TABLE 7-2 STRATIGRAPHY OF THE HURONIAN SUPERGROUP
Sault Ste Marie – Sudbury – Cobalt Region
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Formation
COBALT GROUP
BAR RIVER FORMATION
GORDON RIVER FORMATION
LORRAIN FORMATION
GOWGANDA FORMATION
Orthoquartzite, siltstone
Siltstone
Arkose, orthoquartzite
Polymictic conglomerate, quartzite, siltstone, argillite
QUIRKE LAKE GROUP
SERPENT FORMATION
ESPANOLA FORMATION
BRUCE FORMATION
Orthoquartzite
Greywacke, limestone
Limestone, siltstone
HOUGH LAKE GROUP
MISSISSAGI FORMATION
PECORS FORMATION
RAMSAY LAKE FORMATION
Orthoquartzite
Greywacke, argillite, quartzite
Polymictic conglomerate
ELLIOT LAKE GROUP
McKIM FORMATION
MATINENDA FORMATION
LIVINGSTONE CREEK FORMATION
Description
Greywacke, argillite, quartzite
Stinson Member: Polymictic conglomerate
Ryan Member, Manfred Members: Arkosic quartzite
Mafic Volcanics with intercalated feldspathic quartzite
and conglomerates
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-2
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POST HURONIAN IGNEOUS INTRUSIONS
The primary intrusive event affecting the region and the Elliot Lake District was the
intrusion of the Nipissing diabase sills and dykes. These intrusions are dated at 2,120
Ma (Van Schums, 1976). The sills and dykes have been folded during the Penokean
Orogeny and have been metamorphosed to greenschist facies. The Nipissing diabase is
primarily found as intrusions in the Huronian sediments, but the intrusions are also found
in the underlying Archean rocks.
STRUCTURAL GEOLOGY
The major structural event that has deformed the Huronian sedimentary rocks is the
Penokean orogeny which affected the region between about 1,850 Ma and 1,750 Ma
(Van Schmus, 1976). The deformation caused by the Penokean Orogeny resulted in
folding and thrust faulting of the Huronian sedimentary rocks. The Murray and Onaping
fault systems are composed predominantly of strike-slip faults that were formed some
time after the Grenville orogeny (post 1,000 Ma). These faults generally strike northnortheast and east.
REGIONAL URANIUM OCCURENCES
Uranium and thorium occur within the Huronian Supergroup at a number of localities in
the region. Most of the occurrences are in conglomerates, but some are in coarsegrained quartzite referred to locally as “grit”, and in quartzite and argillite. The only
uranium deposits known to contain sufficient grade and tonnage to be economically
viable occur in the lower part of the Matinenda Formation within about 40 m of the
basement. The majority of the exploitable uranium deposits are found in the Elliot Lake
area. The Pronto Mine is located in the Blind River area and the Agnew Lake Mine is
located about 60 km west of Sudbury.
The Huronian sedimentary basin is one of a number of early to mid-Proterozoic basins in
Canada that host, or has the potential to host, uranium deposits. Others include the
Athabasca Basin in Saskatchewan, the Thelon Basin in Nunavut, the Otish Region in
Quebec, and the Sibley Basin in Ontario (Jefferson et al, 2005).
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-3
85°
84°
83°
82°
47°
N
ADA
CANS.A.
U.
SUPERIOR PROVINCE
Lake
Superior
129
PROJECT LOCATION
Sault Ste Marie
Quirke
HURONIAN
SUPERGROUP
Murray
17
7-4
Fault
Synclin
e
Elliot Lake
Chiblow Anticline
108
Murray Fault
17
MICHIGAN BASIN
Blind River
Massey
Lake Huron
85°
84°
46°
82°
83°
0
10
20
30
40
50
Kilometres
Figure 7-1
Legend:
Fold Axes
Fault
Proterozoic Metasedimentary Rocks
Town
Proterozoic Plutonic and Volcanic Rocks
Road
Archean Granitoid Rocks
Archean Greenstone Terranes
June 2012
Source: CanAlaska Ventures Limited, Adapted from O.G.S. Map 2670, Johns et al, 2003.
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Regional Geology
www.rpacan.com
Paleozoic Sedimentary Rocks
Paleozoic Sedimentary Rocks
www.rpacan.com
LOCAL GEOLOGY
GENERAL GEOLOGY
In the Elliot Lake area, the Huronian sedimentary rocks are folded and form shallow
westward plunging, gently folded syncline and anticline structures, referred to as the
Quirke syncline and the Chiblow anticline (Figure 7-2). The Elliot Lake uranium deposits
are located within the sediments that form the Quirke syncline. The Quirke syncline is
flanked on the north and east by Archean granites and on the south by Archean mafic
metavolcanic and metasedimentary rocks. On the north, the limbs of the Quirke syncline
generally dip from 20o to 40o south and, on the south, the limbs dip from 15o to 30o north.
The depth to the centre of the syncline from the present surface is estimated to be
approximately 1,500 m. The axis of the syncline plunges gently west at approximately
15o. The Huronian sedimentary rocks are intruded by Nipissing diabase dykes and sills
and by younger lamprophyre dykes.
The stratigraphy of the Elliot Lake Group, which contains the Matinenda Formation and
hosts the uranium deposits, is shown in Table 7-3.
TABLE 7-3 ELLIOT LAKE GROUP, ELLIOT LAKE AREA
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Formation
Member
Elliot Lake Group
McKim Formation
Matinenda
Formation
Livingston Creek
Formation
Description
Banded greywacke and argillite, locally termed
“Nordic Formation”. Cross bedding indicates beds
were deposited from the NW.
Stinson
Massive grey quartzite with minor pebble beds and
coarse-grained grit.
Ryan
Coarse-grained quartzite or arkose, pebble bands,
and quartz-pebble conglomerates bands, sericitic
alteration with distinctive green colour. Contains the
conglomerate beds hosting the rare earths and
uranium mineralization.
Basal
Conglomerate or
Breccia
Quartz pebbles and fragments of basement rocks,
pyrite and pyrrhotite in matrix, contains rare earths
and uranium mineralization.
Amygdaloidal basalt, metamorphosed to
greenschist facies, intercalated sediments.
Archean Basement Rocks – Metavolcanics, Metasediments, Iron Formation and Granite
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-5
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POST HURONIAN INTRUSIONS
The Nipissing diabase intrusions occur as sill-like bodies paralleling the strike of the
sedimentary formations, but with steeper dips and as crosscutting dykes. The sills vary
in thickness from about 10 m to over 100 m and displace the conglomerate beds hosting
the uranium mineralization. The dykes are generally 10 m to 20 m thick and strike
predominantly east-west, parallel to the sills, and northwest. These dykes can be
mapped and delineated, and are included as a distinct unit in the geological and block
model of the mineralization.
In a report by Sprague (1965), significant chlorite alteration of the conglomerate bed is
described in the zones adjacent to the Nipissing diabase intrusions. In some cases the
mineralization could not be mined because the chlorite alteration resulted in the
processing problems in the filters caused by the presence of chlorite. These altered
zones were generally left in place despite having above average uranium grades,
however, they are amenable to underground leaching based on metallurgical testing
(CANMET, 1988).
The Huronian sedimentary rocks and the uranium deposits are also intruded by narrow
lamprophyre dykes. The lamprophyre dykes generally vary in width from less than a
metre up to about four metres. The lamprophyre dykes have chilled margins, but there is
no evidence of contact metamorphism in the adjacent rocks. Two major trends are
exhibited in the strike of the lamprophyre dykes: east-west and north-northwest.
Occasionally, these dykes are calcite-rich and they deteriorate rapidly when exposed
during underground mining.
FAULTING
The major fault mapped within the immediate Elliot Lake District is the Flack Lake fault
which is located immediately north of the Quirke syncline. The Canyon Lake fault, which
was mapped by Robertson (1961), crosses the Eco Ridge Mine property. The Canyon
Lake fault is shown displacing both the Huronian sediments and a diabase dyke to the
north in Gunterman Township between McCabe Lake and Canyon Lake and recent
drilling demonstrates that it extends across the Eco Ridge Mine property. The general
geology of the Elliot Lake District is shown in Figure 7-2.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-6
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GEOLOGICAL SETTING AT THE URANIUM AND REE MINERALIZATION
The uranium-bearing conglomerate beds are found within thicker sections of the
Matinenda Formation that are located over depressions in the underlying basement.
These thicker sections are termed channels and the channels generally strike westnorthwest. The Matinenda Formation consists of well-sorted arkosic quartzite with
coarse-grained
beds
containing
scattered
quartz
pebbles.
The
quartz-pebble
conglomerates are enclosed within the quartzite beds. The quartz-pebble conglomerate
beds (historically called reefs) containing the uranium and REE mineralization are
located within the lower Matinenda Formation about 40 m to 50 m above the basement.
The lower Matinenda, designated as the Ryan Member, is characterized by the presence
of pebbles, an increase in the amount of pyrite, and a distinctive green colour as a result
of sericite alteration.
Although the coarser grained quartzite beds commonly contain low-grade mineralization,
the higher grade mineralization is hosted within the beds of quartz-pebble conglomerate
with disseminated pyrite in the matrix. The number and thickness of the conglomerate
beds are not uniform between the channels. In general, the thickest sections and the
most number of conglomerate beds occur within the channels which host the higher
grade deposits. The channels are separated by topographic highs in the underlying
basement, where the sediments of the Elliot Lake Group are thinner or, in some cases,
absent. The reefs are located within the channels. The number and thickness of the
conglomerate reefs are not uniform between the channels. In general, the greatest
numbers of reefs and the highest grade deposits occur in the thickest sections of the
Ryan Member.
The sedimentary rocks are interpreted to have been formed by the erosion of Archean
granite to the north and deposited as sands and conglomerates. The uranium was
transported as heavy mineral grains along with quartz pebbles, pyrite, and other heavy
minerals such as zircon, rutile, leucoxene and monazite in fast-flowing streams within
topographic lows in the Archean bedrock. The quartz pebbles and the heavy minerals
were deposited locally where the velocity of the streams decreased. The sediments may
also have been re-worked, upgrading the mineralization locally.
The two major channels in the Elliot Lake District are the Nordic Channel and the Quirke
Channel. Within each of these channels, the conglomerate beds or reefs occur at
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-7
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different stratigraphic intervals. Three other channels have been identified in the
syncline, the Pardee, Pecors and Whisky Lake channels (Robertson, 1986). No mining
has taken place within these last three channels to date. The locations of the channels
based on historic data and interpretations are shown in Figure 7-3.
STRATIGRAPHY OF THE MINERALIZED CONGLOMERATE BEDS
The stratigraphy of the Lower Matinenda Formation varies between the channels. The
stratigraphy of the mineralized reefs within the Pardee Channel on the Eco Ridge Mine
property can be correlated with the stratigraphy of the reefs in the Nordic Channel.
The Nordic Channel is located on the south limb of the Quirke syncline. The Nordic
Channel has an average strike length of about 2,130 m (7,000 ft.) and extends
approximately 6,100 m (20,000 ft.) down dip along the limb of the anticline. The channel
plunges northwest at an average angle of 17o. The Nordic Channel hosts the former
Nordic, Lacnor, Milliken, and Stanleigh mines. Hart and Sprague (1968) describe three
conglomerate beds within the Nordic Channel that host the higher grade uranium
mineralization: the lower, the middle, and the upper conglomerate reefs. These reefs are
located in the bottom 46 m (150 ft.) of the Ryan Member. The stratigraphy of the Ryan
Member of the Lower Matinenda at the Stanleigh Mine is shown in Table 7-4 (Golder
Associates, 1983).
The lower reef or Lacnor Reef is located directly above the basement. The lower reef is
generally thin and discontinuous, however, some mining was carried out on this reef in
the Stanleigh Mine. At the Lacnor and Milliken mines, the lower conglomerate was
mined at an average height of 2.44 m (8 ft.). The parting quartzite divides the lower reef
from the middle reef. The parting quartzite contains intercalated quartzite with weak
pebble conglomerate bands.
The Middle Conglomerate Bed, or Nordic Reef, was the primary unit mined at all the four
of the mines located in the Nordic Channel. The cobble size was generally smaller than
the cobbles in the lower reef. The average height was 3.0 m (10 ft.).
A limited amount of mining took place in the Upper Conglomerate Bed, or the Pardee
Reef, and the average mining height was 1.5 m (5 ft.) at the Nordic Mine, but it reached
thicknesses of 3.0 m (10 ft.) at the Stanleigh Mine.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-8
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The Floater Reef occurs above the Upper Reef. The Floater Reef is thin and very
discontinuous. No mining was carried out on the Floater Reef. Golder Associates (1983)
indicated that the surface of the original basement is irregular and the presence of
“basement highs” can result in the Lower or Main Reef being absent because they were
not deposited.
TABLE 7-4 STRATIGRAPHY OF LOWER MATINENDA
Stanleigh Mine
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Zone
Thickness (ft)
Quartzite
-
Relative Content of
U3O8 (lb/st)
-
Floater Reef
7
-
Quartzite
0 – 20
-
Upper Reef
7
1.4
Correlated with the MCB
Divider Quartzite
Comments
Discontinuous
Quartzite
20
0.2
Main Reef
10
1.6
Parting Quartzite
8
0.5
Lower Reef
8
1.4
Quartzite
Variable
-
Generally thin
Basement
-
-
Metavolcanics
Parting Quartzite
The Upper Reef in the Nordic Channel is correlated with the MCB in the Pardee Channel
on the Eco Ridge Mine property. Figure 7-3 shows a plan of the mineralized reefs and a
longitudinal section along the south limb of the Quirke syncline looking north.
The
section illustrates the correlation of the mineralized conglomerate beds through the
Nordic, Pardee, Pecors, and Whisky channels.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 7-9
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Pele Mountain
Property
Cutler Granite
Cobalt Group
Bruce Group
Algoman Granite
Archean Greenstone
Mines
Quirke
Stanleigh
Denison
Panel
Spanish AM.
Stanrock
Milliken
Lacnor
Nordic
Buckles
Can-Met
Pronto
Elliot Lake Group
Sources: Ore Reserve Estimation and Grade Control,
CIM Special Volume 9, 1968,
and Robertson , 1986.
Figure 7-2
0
4
2
8
6
Pele Mountain Resources Inc.
Miles
0
2
4
6
8
10
Eco Ridge Mine Project
Kilometres
Elliot Lake, Ontario, Canada
Geology of the
Elliot Lake District
June 2012
7-10
www.rpacan.com
N
0
0
QUIRKE
2
1
2
3
Miles
4
4
6
5
8
Kilometres
Twp. 150
Twp. 144
Twp. 138
Twp. 149
Twp. 143
Twp. 137
Stanleigh Mine
WHISKEY
PECORS
A
PARDEE
NORDIC
Pardee Reef
A
B
Main Conglomerate Bed
B
Base of Middle Mississagi Conglomerate
C
0
PARDEE
NORDIC
PECORS
WHISKEY
0
200
400
600
800
1000 ft
Schematic Cross Section A - B - C
Legend:
Lower Mississagi Formation
Figure 7-3
Conglomerate
Huronian-Archean Contact at surface
Pele Mountain Resources Inc.
Granite
Greenstone
Eco Ridge Mine Project
Iron Formation, Outcrop; Magnetic Anomaly
Elliot Lake, Ontario, Canada
Fault
Location of
Mineralized Channels
Deposit
Mineralized Channel
June 2012
Source: J. Robertson, 1986.
7-11
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PROPERTY GEOLOGY
The Eco Ridge Mine property is situated to the east of the Nordic Channel on the south
limb of the Quirke syncline (Figure 7-2). All the formations within the Quirke Lake Group,
the Hough Lake Group, and the Elliot Lake Group are present within the property
boundaries, including the Livingston Creek Volcanic Formation.
GENERAL GEOLOGY
The Archean basement rocks underlying the syncline are primarily metasedimentary,
and chloritized metavolcanic. Robertson (1961) mapped the pre-Huronian basement as
igneous gabbroic and diabasic rocks, as well as metamorphosed sediments consisting of
quartzites, greywackes tuffs and agglomerates, and minor basic lavas. These sediments
strike northwest and dip steeply to the northeast.
The Archean basement is overlain by east-west trending, north dipping Elliot Lake Group
sediments and volcanics with the Livingston Creek Formation forming the basal unit. The
Livingston Creek Volcanics are intercalated with minor beds of conglomerate. The
Huronian volcanics are directly overlain by a thin ‘green grit’ (possible regolith) from 10
cm to 20 cm thick, which commonly is logged as a fault zone or gouge in the drill core.
The mineralization on the property is hosted by conglomerate beds that occur within the
Ryan Member. The Ryan Member unit has been designated “Green Quartzite” in the
descriptions in the historic drill hole logs and the unit overlying the green quartzite has
been logged a “Grey and/or Pink Quartzite” which correlates with the Stinson Member.
The Ryan Member is approximately 100 m thick, well sorted quartzite and quartzarenite
with intercalated quartz-pebble conglomerates with a matrix of quartz grains.
The
quartzite has been altered to sericite which imparts the light green colour. Pyrite in the
matrix occurs as small grains and can be 3% to 4% and up to 15% in the coarser quartzpebble conglomerate units.
INTRUSIONS
The Huronian sediments on the property have been intruded by dykes and sills of
Nipissing diabase. A prominent Nipissing diabase dyke, averaging 30 m in thickness
and
striking
east-west
extends
across
the
entire
property,
crosscutting
the
mineralization.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-12
Technical Report NI 43-101 – June 20, 2012
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Narrow dykes of lamprophyre are logged throughout the drilling. These dykes are
generally less than a metre in thickness, but they can reach thicknesses of about six
metres. These dykes are the youngest geological units on the property.
STRUCTURE
Based on structural contours of the unconformity, Sprague (1965) interpreted the preHuronian topography as being relatively flat except for two local highs. He suggested
that the first high, outlined by drill hole S-10 immediately east of the adit, is probably the
extension of a zone of basic rocks in the Archean footwall mapped by Robertson (1961)
as gabbros, amphibolites and diabase. Sprague suggested that these massive intrusions
would be more resistant to erosion than the enclosing softer rocks and thus would tend
to form areas of positive relief. The second area of positive relief was interpreted from
holes PW-113, PW-112 and PW-106 on the east end of the property near Pecors Lake.
A major structural feature on the Pele Mountain property is the Pecors Lake structure.
This fault is shown on Ontario Geological Survey Map 2419 (Robertson, 1961). It is
located along the west shore of Pecors Lake and strikes north 60 degrees west across
the property (refer to Figure 7-3). Sprague indicated that the direction of movement is
observed by the offset on the diabase and suggested a vertical displacement of about
150 m, north side up as indicated in the deep drill holes drilled by Stancan. Based on
structural analyses carried out by Scott Wilson RPA and using information from drill
holes located north of the Pecors Lake structure, the conglomerate bed containing the
uranium mineralization continues to the north of the fault and appears to have been
uplifted relative to the location of the conglomerate bed on the south side of the
structure.
The apparent extension of the Canyon Lake fault to the south is marked by a prominent
depression that strikes south 40 degrees east through the Eco Ridge Mine property to
the west end of Stinson Lake.
This topographic depression continues to the south
across the Huronian-basement contact into the Archean basement rocks.
A plan showing the general geology of the property is shown in Figure 7-4.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-13
Technical Report NI 43-101 – June 20, 2012
386,000 E
385,500 E
385,000 E
384,500 E
384,000 E
383,500 E
383,000 E
382,500 E
382,000 E
381,500 E
381,000 E
380,500 E
380,000 E
on
ny
Ca
La
ke
N
ult
Fa
Pe
co
rs
Tees Lake
La
ke
5,139,500 N
Fa
ult
Vanhorn Lake
5,139,000 N
Resource Boundary
Pecors
Lake
Pardee
Lake
5,138,500 N
7-14
Stinson Lake
5,138,000 N
ADIT
5,137,500 N
5,137,000 N
Figure 7-4
McKim
Property Boundary
Matinenda
Resource
Diabase
Drill Hole
Fault
June 2012
0
250
500
Metres
750 1000
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Property Geology
www.rpacan.com
Pele Mountain Resources Inc.
Legend:
Basement Volcanics
5,136,500 N
www.rpacan.com
MINERALIZATION
GENERAL DESCRIPTION
The quartzite beds in the Ryan Member in the Pardee Channel have a background
grade of about 0.01% U3O8, rising to 0.02% within coarser grained “gritty” beds. The
higher grade uranium mineralization is contained within three conglomerate beds, the
Basal Conglomerate Bed (BCB), the MCB, which is equivalent to the Pardee Reef, and
the Floater Reefs.
Limited rare earth assay data are available outside of the MCB intercepts drilled and
assayed by Pele Mountain from 2006 to 2011. The available data show that rare earths
mineralization continues above and below the Main Conglomerate Bed. The current Pele
Mountain sampling protocol targets the conglomerate and pebble beds occurrences, as
well as concentrations of heavy mineral bands within the Ryan Member to determine the
extent of the mineralization
The BCB is located directly above the Archean basement rocks. This unit consists of
poorly sorted, angular, and rounded pebbles that are granitic, volcanic and quartzitic and
are commonly 2 in. (5 cm) in diameter. It may contain up to 5% pyrite in the matrix. This
bed is discontinuous and, in drill holes where it is intersected, is generally thin, averaging
about one-half metre in thickness. However, historically, the sampling of the BCB has
not been consistent and thicker sections have been intersected at Eco Ridge. The matrix
is a grey or grey-green quartzite with up to 10% medium to coarse grained pyrite, and
locally some pyrrhotite. The BCB is discontinuous, but, where intersected in the historic
drilling, the average thickness is about 0.5 m, although widths up to four metres have
been intersected in recent drilling and an intersection of 11 m was returned in drill hole
CB-1.
Sprague (1965) indicated that the basal reef was interpreted as being too narrow and
too local to be of primary interest in Rio Algom’s program, however, he did note that two
holes, PA-26 and S-18, cut basal reef averaging 0.07% U3O8 / 1.7 m and 0.126% U3O8 /
1.4 m, respectively. Sprague suggested that detailed drilling of this reef may prove up
small tonnages of interest.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-15
Technical Report NI 43-101 – June 20, 2012
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The MCB is located approximately 10 m to 15 m above the BCB. It is intercalated within
the quartzite beds. The MCB and the first few metres immediately above it host the
Mineral Resource on the Eco Ridge Mine property. The conglomerate contains quartz,
quartzite, and dark cherty pebbles in a fine grained, pyrite-rich matrix. The pebbles
make up to 60% of the rock and are most abundant in the lower metre. The pebbles are
well rounded and 0.64 cm to 3.8 cm thick. This bed fines upwards with narrow
intercalated beds of quartzite. Pyrite occurs in the matrix generally as small grains
comprising 4% to 15% of the rock. Sprague reported that the bed varies from 1.3 m to
4.4 m in thickness. The highest grade uranium mineralization within the bed is located in
the conglomerate band on the footwall contact with the underlying quartzite. The footwall
contact is well-defined and provides a marker for geological assessment. The hanging
wall contact is not as distinct due to the increased occurrences of intercalated bands of
quartzite within the conglomerate.
The MCB contains the higher grade rare earths and uranium mineralization and outcrops
on the property and extends over a strike length of 6,000 m. The uranium and REE
mineralization has been intersected in holes at a depth of 1,000 m and over a dip length
of approximately 3,800 m.
A series of thin conglomerate beds are present within the quartzite overlying the hanging
wall contact of the MCB. These thin conglomerate beds represent the Floater Reefs. The
Floater Reefs generally extend from 6 m to 15 m above the MCB. The Floater Reefs
average from 0.1 m to 2.0 m in thickness and the uranium content is generally less than
0.04%. These beds are not well developed on the Eco Ridge Mine property and it is not
possible to correlate individual beds between the drill holes. In many cases, quartzite
beds logged as “grit” or “pebble conglomerate” contain low-grade mineralization and
these pebble conglomerates are probably equivalent to the Floater Reefs. The quartzite
with Floater Reefs above the MCB is referred to in this report as the Hanging Wall Zone
(HWZ).
The stratigraphic units in the Matinenda Formation on the Eco Ridge Mine property are
summarized in Table 7-5.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-16
Technical Report NI 43-101 – June 20, 2012
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TABLE 7-5 STRATIGRAPHY OF LOWER MATINENDA (RYAN MEMBER)
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Relative Content of
%U3O8
Comments
0.2 – 0.4
0.02-0.04
Discontinuous
Quartzite
Variable (2 to 10)
0.01
Main Conglomerate Bed
2-3
0.02-0.1
Very Continuous
Divider Quartzite
10-15
0.01
Variable in thickness
Basal Conglomerate Bed
Variable (0 to 11)
0.02 – 0.5
Not Continuous
Unit
Thickness (m)
Quartzite
30 – 40
Floater Reef
Livingston Creek Formation (volcanic) – Archean (Greenstone)
HISTORICAL MINERALOGICAL STUDIES
The primary uranium-bearing minerals reported in the Elliot Lake Camp are uraninite and
brannerite. Other uranium minerals that have been reported are pitchblende, coffinite
and thucolite. Uranium-bearing, REE-bearing, and associated heavy minerals that have
been identified previously at the Elliot Lake Camp are listed in Table 7-6. All minerals
deposited with the uranium have a specific gravity of 5.0 or greater and they are also
resistant to weathering (hardness of 5.0 or greater), which results in their deposition as
heavy minerals within the matrix of the quartz pebble conglomerate beds.
TABLE 7-6 URANIUM-BEARING AND ASSOCIATED HEAVY MINERALS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Uranium Minerals
Formula
Uraninite
UO2
Specific
Gravity
7.5 – 9.7
Brannerite
(U,Ca,Ce)(Ti,Fe)2O6
5.4
4–5
Pitchblende
UO2
7.5 – 10
5-6
Coffinite
U(SiO4)1-x(OH)4x
5.1
5-6
Substitution and Trace
Elements
Th, Pb, Ra, Ce, Y, other REE
Forms series with Thorutite,
(33% U)
Variety of uraninite, Rare, no
substitution
Rare, Secondary
Thucolite
Carbonaceous
3.9 – 4.2
2.5
Also known as “gummite”, rare
Monazite
(Ce,La,Nd,Y,Th)PO4
4.6 – 5.4
5.0 – 5.5
Minor U
Pyrite
FeS2
5.0
6.0 – 6.5
Ni, Co
Rutile
TiO2
4.2
6.0 – 6.5
Fe, Ta
Zircon
ZrSiO4
4.65
7.5
Hardness
5.5
Heavy Minerals
Reported from the Elliot Lake Camp
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-17
Technical Report NI 43-101 – June 20, 2012
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URANIUM MINERALS
URANINITE
The uranium mineralization in the Elliot Lake deposits is reported to occur as detrital
microscopic uraninite grains within the matrix of the quartz-pebble conglomerates (Theis,
1979). In the main reef at the Denison Mine, Theis reported that the grains commonly
show increased concentration near the base of the beds. He also reported that the
uraninite grains are more commonly found in samples that contained medium to large
quartz pebbles. Theis also reported that the texture of the grains varies from smooth to
highly pitted and ragged, suggesting secondary leaching of some grains. Theis reported
the following analyses for uraninite: 65% UO2; 6.5% ThO2; 18% PbO and 2.5% Y2O3,
with less than 1% Ce2O3. Uraninite also represents a source of rare earths, particularly
of heavy rare earths.
BRANNERITE
Composite grains which contain mixtures of uranium and titanium-bearing phases are
referred to as brannerite. The brannerite occurs as skeletal-like grains within rutile and
as microscopic blebs in bands and veinlets. Saager and Stupp (1983) determined that
U-Ti phases are second only to uraninite as the most important uranium minerals in the
Elliot Lake mineralization. Microprobe work confirmed the existence of a continuous
mineral series recognized optically, which ranges from uranium-free leucoxene/rutile to
uranium enriched brannerite. They suggested that redistribution and subsequent
adsorption of uranium on Ti phases during diagenesis and/or metamorphism of the
conglomerates resulted in microcrystalline leucoxene/rutile admixtures containing
uranium in varying amounts.
Theis (1979) found that brannerite was associated with other titaniferous phases
throughout the matrix of the conglomerate, which were associated with beds that had
medium to smaller size pebbles. Based on 23 microprobe analyses, Theis reported that
the brannerite averaged from 31% to 37% UO2.
ACCESSORY URANIUM MINERALS
Secondary uranium minerals, coffinite, thucolite and pitchblende, have been reported
historically. These are thought to be the result of “diagenetic modification” of the original
uraninite.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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ASSOCIATED MINERALS
MONAZITE
Monazite, a phosphate mineral, is the main mineral containing the REE and the more
common form of monazite is enriched in cerium relative to the other REE. The monazite
content generally decreases with increasing pebble size and is associated with zircon.
This relationship is the opposite of the uraninite which is concentrated in the
conglomerate beds with the largest pebble size. The monazite present at the Eco Ridge
Mine project is particularly enriched in light rare earth elements.
PYRITE
In general, the higher uranium grades reported from the mines that previously produced
in the Elliot Lake area were hosted by the thickest quartz-pebble conglomerate lenses
with high pyrite contents. The pyrite occurs ubiquitously with uranium. The pyrite content
was used as a visual ore estimate during mining as the uranium content generally
increased proportionally with pyrite. The pyrite is also considered to be detrital, having
been deposited in a reducing environment in the early Proterozoic.
ACCESSORY HEAVY MINERALS
Other accessory minerals Roscoe and Steacy (1958) are hematite, magnetite, monazite,
zircon, uranothorite, coffinite, sphene, anatase, rutile, chromite, spinel, epidote, sericite,
chlorite, amphibole, apatite, cassiterite, fluorite, barite, pyrrhotite, chalcopyrite, galena,
sphalerite, molybdenite, marcasite, and gold.
GEOCHEMISTRY
General geochemical relationships that have been observed at Elliot Lake are:

Uranium and thorium have no significant correlation, suggesting that they are
concentrated in separate minerals.

The lead content closely parallels the uranium content.

There is a general correlation between the pyrite content and uranium.

REE mineralization appears to continue beyond the limits of uranium
mineralization
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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MINERALOGICAL STUDIES ON THE ECO RIDGE MINE
PROPERTY
In 2007, Scott Wilson RPA selected a total of 10 samples from the drill core and sample
rejects. One sample was taken from the Floater Reef, six samples from the MCB, and
three samples from the BCB. The samples are considered to be representative of the
deposit. The samples were sent to the Inco Innovation Centre (IIC) at Memorial
University in Newfoundland (MUN) for mineralogical examination using a mineral
liberation analyzer (MLA), which is an automated mineralogy system that utilizes a
scanning electron microscope (SEM). The results were provided to Pele Mountain in a
detailed report (Sylvester, 2007) and the results are briefly summarized here.
Overall, the mineralogy of conglomerate in the three beds is dominated by detrital quartz
(60% to 70%), orthoclase (10% to 20%) and pyrite (5% to 15%). Secondary muscovite is
present in amounts ranging from 3% to 9%. The uranium-bearing minerals and the
heavy minerals make up less than 1% of the rock.
In 2011 Pele Mountain selected 15 additional samples for mineralogical analysis. The
selection included ten samples from MCB, three from BCB and two from pyrite enriched
bands. Polished thin sections and polished slabs were prepared from each sample, and
the
study
included
examination
in
normal
plain
and
polarized
light,
cathodoluminescence, scanning electron microscopy with utilization of energy dispersive
x-ray detection, backscattered electron imaging, and x-ray element mapping. This study
identified the main uranium minerals to be uranothorite, thorite, brannerite, coffinite, as
well as an unidentified uranium silicate containing Ti, REE, Y, S, and Bi. The coffinite,
thorite, and the unidentified uranium silicate carry Y and heavy rare earth elements,
while the monazite is the most common light rare earth elements-bearing mineral at Eco
Ridge (Mariano, 2011).
URANIUM MINERALS
MAIN CONGLOMERATE BED
The uranium mineralization in the deposit is contained within a much greater number of
mineral phases than previously reported at Elliot Lake. The mineral phases are similar in
all the conglomerate beds, however, the relative amounts of each mineral phase varies
between the beds. The uranium minerals, their modal abundance and uranium content,
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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and the relative contribution of the mineral to the overall uranium content of the six
samples from the MCB are summarized in Table 7-7.
The only detrital uranium mineral identified is Th-uraninite. All other uranium minerals
and mineral phases (pitchblende, brannerite, uranium in rutile, a complex aluminumsilicate-uranium-pyrite mix and a uranium pyrite mix) are minerals that have been formed
by secondary processes subsequent to the primary deposition of the uranium as
uraninite.
The main uranium-bearing minerals in the MCB are pitchblende (Th-poor uraninite) and
brannerite. The pitchblende has been deposited from the aqueous alteration of uraninite
by oxidizing fluids and has been precipitated by reduction of the fluid upon encountering
pyrite. This process has increased the uranium content. The brannerite was formed by
the reaction of the uranium in fluids with rutile. The brannerite is associated with
muscovite, biotite and rutile. Th-uraninite, the only detrital mineral present, forms 10% of
the contained uranium mineralization. Silica-rich minerals and mineral phases (coffinite
and a complex aluminum-silica-pyrite-uranium phase) contain about 25% of the uranium.
TABLE 7-7 URANIUM MINERALOGY OF THE MAIN CONGLOMERATE BED
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Mineral Phase
Th-uraninite
Modal Mineralogy
Weight % of
Sample
0.057
9
% Contribution
to Total
Uranium
10
Relative %
Brannerite
0.177
27
24
Pitchblende
0.079
12
32
UO2 Rutile
0.074
11
4
UO2-Py-AlSi mix
0.166
26
13
UO2-Py
0.032
5
3
Coffinite
0.067
10
14
BASAL CONGLOMERATE BED
The samples selected from the BCB contain higher grade uranium than the samples in
the MCB, and the mineralization occurs in altered zones with extensive pyrite and
solution cavities, suggesting that these zones represent permeable bands where
extensive fluid flow has taken place. The mineralization within the BCB contains the
same minerals and mineral phases as the MCB; however, there are a larger proportion
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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of secondary minerals. The modal analyses, the relative abundances of the uranium
minerals and mineral phases and the per cent of the total uranium contained within the
mineral or the mineral phase is shown in Table 7-8.
Based on the three samples examined, coffinite (U(SiO4)1-x(OH)4x), a uranium silicate,
comprises approximately 40% to 45% of the uranium, followed by pitchblende with 19%
and composite grains of aluminum-silicate-pyrite-uranium with 15%. Detrital Th-uraninite
comprises only about 4% of the mineralization. The presence of coffinite and the
aluminum-silicate-pyrite-uranium phase suggests that the fluids depositing the
secondary uranium mineralization contained more silica than the fluids forming the
secondary uranium mineralization in the MCB.
TABLE 7-8 URANIUM MINERALOGY OF THE BASAL CONGLOMERATE BED
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Mineral Phase
Th-uraninite
Modal Mineralogy
Weight % of
Sample
0.019
9
% Contribution
to Total
Uranium
4
Relative %
Brannerite
0.028
5
11
Pitchblende
0.026
5
19
UO2 Rutile
0.039
7
3
UO2-Py-AlSi mix
0.166
39
15
UO2-Py
0.031
6
5
Coffinite
0.189
35
43
GOLD
Gold is present in the MCB in amounts ranging from 10 ppb to 40 ppb (0.01 g/t to 0.04
g/t Au). The gold content of the BCB is higher, ranging from 100 ppb up to 900 ppb (0.1
g/t to 0.9 g/t Au). No discrete grains of gold or gold alloy were identified by the MLA. The
gold is therefore likely to be dissolved in one or more of the detrital or alteration minerals.
The higher content of gold in the BCB suggests that the gold may be associated with the
secondary mineralization process and it may be contained within the pyrite. In situ
analyses of the minerals would be required to determine the host mineral for the gold
and assess its potential for recovery.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-22
Technical Report NI 43-101 – June 20, 2012
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RARE EARTHS
The major carrier of the REE is monazite, which contains over 90% of the REE in the
MCB. The remainder of the REE (about 10%) is contained within the uranium minerals
uraninite, pitchblende, coffinite and brannerite.
DETAILED DESCRIPTION OF MINERALIZED ZONES
The geology interpreted from the drilling conducted by Pele Mountain has been
consistent with the interpretation based on the historic drilling.
Figure 7-5 shows a typical cross section through the deposit. The section illustrates the
relative positions of the Floater Reef, the HWZ, the MCB, the BCB and the Nipissing
diabase dyke that crosscuts the deposit from east to west. The MCB is a consistent
marker and has been intersected in almost all holes drilled on the property. The MCB
has an average dip of -21 degrees north and the thickness averages 2.7 m with little
variation. The HWZ is the lower grade mineralization continuing above the MCB. The
BCB generally parallels the strike and dip of the MCB and is located from 10 m to 15 m
below the MCB at the contact with the underlying Livingston Creek Volcanic Formation.
The BCB is variable in thickness and is discontinuous in the Adit Block as shown in
Figure 7-5. It is thicker and more continuous in the Canyon Lake Block. The Adit block
refers to the area of detailed drilling in 2007, in the central part of the deposit. The
Canyon Lake block is located on the western side of the Adit block.
MINERALIZATION IN THE MCB

The thickness of the MCB, the U3O8, and REE grades and their distribution
consistent throughout the MCB. The Pele Mountain drilling results are similar to
the results from the historic drilling.

The uranium analytical results from the twin holes indicate that the historic
analyses may be low compared to the current analyses (CB-series holes).

The uranium is concentrated primarily within pitchblende and brannerite.

The REE mineralization is contained primarily in monazite and the uranium
bearing minerals.

The gold content of the MCB varies between 10 ppb and 60 ppb.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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The uranium mineralization is consistently concentrated at the base of the MCB and the
uranium content decreases toward the top of the bed. A vertical profile in the grade is
shown in Figure 7-6. The data are based on the analyses for drill holes PM-04 to PM-19
drilled in the Adit Block.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-24
Technical Report NI 43-101 – June 20, 2012
5,138,400 N
5,138,200 N
5,138,000 N
5,137,800 N
5,137,600 N
500 Elev
500 Elev
S-14
PM-38, 39
400 Elev
PM-161 PA-11
PM-19
0.072 / 2.70
PA-3
400 Elev
PA-16
0.038 / 2.74
PM-01
PA-28
Dyk
e
0.068 / 3.69
Surface
300 Elev
bas
e
300 Elev
Dia
0.038 / 2.94
0.053 / 2.96
0.056 / 2.99
7-25
200 Elev
Bas
eme
0.051 / 2.97
nt C
onta
200 Elev
0.057 / 2.38
ct
0.084 / 2.63
0.042 / 2.57
100 Elev
100 Elev
0 Elev
Figure 7-5
0 Elev
Pele Mountain Resources Inc.
“Floater” Conglomerate Beds
Basal Conglomerate Bed
Eco Ridge Mine Project
Main Conglomerate Bed
Assay Result: U3 O 8 % / metres
Hanging Wall Zone
Basement Contact
Drill Hole Trace
June 2012
0
50
100
Metres
150
200
Elliot Lake, Ontario, Canada
Typical Cross-Section
through the Adit Block
www.rpacan.com
Legend:
www.rpacan.com
FIGURE 7-6 VARIATION IN URANIUM CONCENTRATION IN THE MAIN
CONGLOMERATE BED
Vertical variation in U in MCB
3
Height from base of MCB (m)
2.7
2.4
2.1
1.8
1.5
1.2
0.9
0.6
0.3
0
0.000
0.020
0.040
0.060
0.080
0.100
0.120
%U3O8
Adit block basedon17holes
MINERALIZATION IN THE HWZ

The thickness of the HWZ is variable, while the U3O8 and REE grades are less
variable. The HWZ represents the lower grade mineralization in the floater reefs
and quartz grit immediately above the MCB conglomerate.

The uranium is concentrated primarily within pitchblende and brannerite.

The REE mineralization is contained primarily in monazite.
MINERALIZATION IN THE BCB

The BCB is located at, or close to, the unconformity between the Huronian
sediments and the underlying volcanic rocks.

The BCB is narrow and discontinuous within the Adit Block, but thicker and more
continuous in the Canyon Lake Fault block.

The variation in the grade of the mineralization in the BCB does not exhibit a
consistent pattern across the BCB.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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
The uranium mineralization is higher grade relative to the mineralization in the
MCB.

The secondary mineralization in the BCB, when present, is associated with
porous alteration zones containing massive pyrite, extensive solution cavities,
and chlorite and carbonate alteration within coarse conglomerate.

Mineralogical studies indicate that the U3O8 in the BCB is contained in secondary
minerals: coffinite, uraninite-pyrite-alumosilicate composite grains, and
pitchblende. Detrital uranium minerals compose less than 5% of the uranium
minerals.

The mineralogy of the uranium minerals and the concentration of the
mineralization within permeable alteration zones suggest the uranium has been
deposited by secondary concentration from silica-rich fluids.

The gold content of the zones containing the secondary mineralization is
enriched compared to the MCB.
DISCUSSION OF MINERALIZED ZONES
The MCB is a continuous unit, except in areas of the greatest topographic highs, where
the basement depth is higher than the position of the MCB. In these areas, the MCB
pinches out against the basement volcanic formation. This appears to occur only in one
location. Otherwise, the variations in the depth to the basement do not appear to affect
either the grade or the thickness of the MCB.
The HWZ is a continuous unit, trailing the MCB and including the floater reefs
immediately above the MCB. The thickness and frequency of the floater reefs influence
the thickness and continuity of the HWZ.
The relationship between the depth of basement and the presence of the sections of
conglomerate is more pronounced within the BCB. The BCB is thickest and most
continuous in the deepest portions of the basin.
The BCB represents a distinct style of mineralization compared to the MCB. The BCB
appears to have been deposited initially as a sedimentary deposit of coarse-grained
quartzite or conglomerate at or immediately above the contact with the underlying
volcanics. Although the intersections in the BCB are generally narrow, the uranium grade
is typically higher than the grades in the MCB and the higher grade mineralization over
thicker sections have been intersected. The higher grade mineralization is associated
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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with permeable zones within the BCB where fluid flow has reacted with pyrite to deposit
secondary uranium minerals and mineral phases high in SiO2, such as coffinite. The
presence of pyrite or other sulphide minerals appears to be a very important factor in the
deposition and concentration of the secondary uranium.
Although secondary enrichment has occurred in the MCB, the process appears to be
more efficient in the BCB and may have resulted in the formation of thicker lenses of
higher grade uranium. The secondary enrichment in the MCB has upgraded the uranium
only locally and the secondary mineralization within the MCB is concentrated at the base
of the bed where the highest grades occur. In general, the base of the MCB is in sharp
contact with very low grade quartzite.
GEOCHEMICAL RELATIONSHIPS AND METALLURGICAL IMPLICATIONS
RARE EARTH OXIDES
Recent and historic drilling by Pele Mountain has confirmed that REE mineralization is
widespread outside of the MCB. The relative percentages of the individual REE within
the MCB and the BCB are shown in Table 7-9. The distribution of the REE within each
of the beds is different. The REE content of the BCB is significantly less than the REE
content of the MCB and the relative distributions of the REE are also different, as shown
in Table 7-10. The REE content of the MCB is dominated by the light REE (La, Ce, Pr,
Nd, and Sm) which constitute 88% of the REE content. The remainder of the REE is the
heavy REE which make up 12% of the REE content in the MCB. The relative distribution
of the REE in the MCB is consistent with the distribution of the REE within the mineral
monazite ((Ce,La,Nd,Y,Th)PO4). Although monazite is the major carrier of LREE in the
BCB, a greater percentage of HREE are also contained within the uranium minerals and,
in particular, coffinite. The relative amount of monazite in the BCB is less than the
amount in the MCB, which accounts for the lower REE content in the BCB relative to the
MCB.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-28
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 7-9 RELATIVE PERCENTAGE OF INDIVIDUAL RARE
EARTH ELEMENTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
REE
Yttrium (Y)
Cerium (Ce)
Dysprosium (Dy)
Erbium (Er)
Europium (Eu)
Gadolinium (Gd)
Holmium (Ho)
Lanthanum (La)
Lutetium (Lu)
Neodymium (Nd)
Praseodymium (Pr)
Samarium (Sm)
Terbium (Tb)
Thulium (Tm)
Ytterbium (Yb)
MCB
4.5
45.2
1.2
0.5
0.1
2
0.2
24.1
0
14.4
4.6
2.5
0.3
0
0.4
BCB
16.5
31.8
3.9
1.9
0.6
4.2
0.7
16
0.2
14
3.9
4
0.7
0.2
1.4
The recovery of REE contained within the monazite increases greatly by acid baking.
Over 90% of the REE in the MCB are contained within monazite and the remainder is
contained within uranium minerals. The recovery of the REE to leaching is discussed in
Section 13.
The correlation coefficient between uranium and rare earth and other elements (ppm) for
the resource assays ranges from 0.03 to 0.72 (Table 7-10). The LREE have generally a
lower correlation coefficient with uranium than HREE.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-29
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 7-10 CORRELATION BETWEEN URANIUM AND RARE EARTHS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Element
La
Ce
Pr
Nd
Sm
Eu
Gd
Tb
Dy
Ho
Er
Tm
Yb
Lu
Y
Sc
Th
Correlation factor
0.28
0.31
0.32
0.34
0.45
0.52
0.54
0.64
0.70
0.70
0.72
0.72
0.72
0.66
0.63
0.02
0.46
The correlation factors between the HREE ranges from 0.71 to 0.99, and between LREE
from 0.93 to 0.99.
The relatively poor correlation coefficients between uranium and REE assay results
concur with the mineralogical observations made by Sylvester, 2007. Much of the HREE
come from same minerals as uranium, while for the LREE only a small fraction comes
from uranium bearing minerals. The low correlation coefficient suggests that the
distribution of the REE should be investigated apart from uranium.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 7-30
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
8 DEPOSIT TYPES
Uranium occurs in a number of different igneous, metamorphic and sedimentary
environments. The primary deposit types that are currently being exploited for uranium
are sandstone-hosted deposits, unconformity-related deposits, and metamorphic vein
deposits. Uranium is also produced as a by-product from hematite breccia deposits at
Olympic Dam in Australia and from quartz-pebble gold deposits in the Witwatersrand
Basin in South Africa.
Geological studies on the uranium-gold deposits in the Witwatersrand Basin in South
Africa and the uranium deposits in the Blind River-Elliot Lake region of Canada have
resulted in the definition of the uranium-gold bearing quartz-pebble conglomerate class
of mineral deposit (Robertson 1986). Uranium is produced from the Witwatersrand
deposits as a by-product and the conglomerate bands are commonly referred to as
“reefs”. This terminology was used at Elliot Lake to designate the uranium-bearing
conglomerate beds. The Quartz-Pebble Conglomerate Deposit types also occur at other
localities, such as the Jacobina District in Brazil, and at certain locations in Australia,
however, these deposits have mostly not yet been exploited.
The Elliot Lake deposits are interpreted to be modified paleoplacer (detrital) deposits
and the source rocks are believed to be pegmatitic granite (Robertson, 1986) located to
the north. The uranium and rare earth-bearing heavy minerals were released from the
granites as a result of weathering and transported to the site of deposition in channel
systems in Early Proterozoic sedimentary basins. Heavy mineral grains along with quartz
pebbles and pyrite were deposited from fast-flowing streams in topographic lows in the
Archean bedrock. With the current oxygen content of the atmosphere, the uranium
minerals would oxidize and dissolve in the ground water and be transported in solution.
It is suggested that the erosion and sedimentation took place in the early Proterozoic in
a reducing environment as a result of the low oxygen content of the atmosphere prior to
2,200 Ma.
The quartz pebbles and the uranium and associated heavy minerals were deposited in
areas where the velocity of the streams was reduced, forming conglomerate beds in
deltaic piles. Peripheral to the conglomerate beds, poorly sorted feldspathic sand and silt
were deposited. Subsequent diagenesis resulted in the formation of the conglomerate
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 8-1
www.rpacan.com
beds intercalated within coarse sandstone with scattered pebbles and siltstone. At the
Denison Mine, the highest grade uranium mineralization occurred to the lee of basement
highs where the flow was more abruptly reduced (A. MacEachern, personal
communication, in Cochrane et al, 2007).
There has been post-depositional alteration of the uranium as evidenced by the
formation of brannerite, secondary pyrite and the formation of secondary quartz and
sericite (Robinson and Spooner, 1984). Robinson and Spooner suggest that this postdepositional modification was caused by low Eh near-neutral ground water.
The mineralogical examination of the Pardee deposit supports this suggestion and
demonstrates that the uranium is now primarily contained within secondary uranium
minerals as a result of the interaction of the detrital uraninite with groundwater. Within
the MCB, the deposition of the secondary minerals appears to have been limited causing
local upgrading of the uranium content in some areas and leaching in others. For the
heavy REE there is a predominant contribution from secondary mineral phases, while
the light REE are predominantly found in detrital minerals.
EXPLORATION MODEL
In the MCB, it appears that the formation of the secondary uranium mineralization has
not transported the uranium any significant distance from the initial point of deposition
during sedimentation. Therefore, a detrital depositional model is still considered to be
applicable to exploration for the uranium mineralization contained in the MCB.
The exploration model at Elliot Lake consists of drilling the lower Matinenda Formation to
test and outline the MCB and the HWZ. The quartz-pebble conglomerate beds have
formed within the thicker sections of the Lower Matinenda Formation in topographic lows
in the underlying basement rocks, forming the uranium-bearing channels. The channels
are identified and outlined based on general isopach maps of the host sedimentary
formation. The initial exploration is focused on identifying these channels.
Within the channels, the highest grade sections within the quartz-pebble conglomerate
are concentrated locally where the physical conditions such as topographic highs in the
basement rocks may have reduced the velocity of the streams. The uranium minerals,
the quartz pebbles and other heavy minerals are generally concentrated along the flanks
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 8-2
www.rpacan.com
of the topographic highs. Although secondary enrichment has occurred in the MCB, the
uranium has not been transported any distance and secondary enrichment does not
appear to be the primary process controlling the uranium grade.
SECONDARY ENRICHMENT MODEL
Although the secondary enrichment of the uranium appears to be local within the MCB,
there is also evidence that the uranium has been leached and transported greater
distances in the BCB at the base of the sediments. Therefore, any exploration program
at Elliot Lake should also consider the potential for secondary enrichment deposits
resulting from the interaction of ground water with either deep hydrothermal fluids that
may have mobilized along faults or the presence of iron-rich rocks. Along with uranium,
heavy rare earth elements are likely to have been subjected to secondary enrichment.
Jefferson
et
al.
(2005)
have
indicated
that
several
Paleoproterozoic
and
Mesoproterozoic basins in Canada, including the Huronian Basin which hosts the Elliot
Lake deposits, are considered to have potential for unconformity-related uranium
deposits. Unconformity deposits are extremely high grade and result from the deposition
of uranium from secondary fluids that come in contact with a reducing environment. In
unconformity deposits, the uranium is deposited primarily as pitchblende in faults or
fractures at the unconformity between the sediments and the underlying basement, or
within faults or fractures in the overlying sediments or the underlying basement rocks.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 8-3
www.rpacan.com
9 EXPLORATION
Pele Mountain has been systematically exploring and evaluating the Eco Ridge Mine
Property since October 2006. Pele Mountain carried out exploration programs in 2007,
2008, 2009, and 2011 oriented mostly towards infill drilling. Some of the programs also
included step-out drilling. Pele Mountain’s exploration programs have consisted primarily
of diamond drilling, mineralogical analysis and metallurgical testing. The results from the
drill programs are described in Section 10 of this report. In 2010, Pele Mountain reassayed pulps from the 2007-2009 drilling programs to obtain REE, yttrium and
scandium data. In 2011 Pele Mountain conducted a sampling and assaying program on
core from previous drill programs, aimed at intercepts above the MCB, to help delineate
the HWZ.
TOPOGRAPHIC SURVEY
Pele Mountain contracted Dudley Thompson Mapping Corporation Inc. (Dudley) of
Surrey, British Columbia, to carry out an aerial survey over the Eco Ridge Mine property.
The survey was completed in April 2007 over an area of approximately 4,955 ha. Ten
surveyed control points were established on the ground. Black and white aerial
photographs at a scale of 1:20,000 were provided. The aerial film was scanned at a
resolution of 12 microns using a Wehrli RM-6 scanner and the scanned images were
aerotriangulated and adjusted to the control data. Dudley compiled a digital elevation
model suitable for the support of five metre contours.
GEOLOGICAL MAPPING
The geology of the deposit was compiled using government township maps (Robertson,
1961, 1962) and the interpretation of the information provided by the historical and
current drilling. In 2007, RPA conducted reconnaissance mapping to determine the
surface location of a Nipissing diabase dyke that crosscuts the mineralization.
RADIOMETRIC LOGGING
In order to validate the analyses from the historic drilling, several of the historic holes
were logged using a spectral gamma-ray probe. The spectral gamma-ray probe
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 9-1
www.rpacan.com
measures the natural gamma ray emitted by potassium-40, uranium and thorium series
isotopes from the rocks in counts per second (cps).
Pele Mountain contracted DGI Geoscience Inc. (DGI) to carry out the radiometric
logging. DGI provides a number of well logging services including radiometric logging.
Their head office is in Toronto and their operations centre is located in Sudbury.
A Mount Sopris temperature-compensated, digital spectral gamma probe sampling 1,024
channels in the energy range of 100 keV to 3 MeV was used to obtain gamma emission
spectra in time based mode over 15 minute intervals. The probe was calibrated at the
United States Department of Energy’s calibration facility in Grand Junction, Colorado, to
determine the constant of proportionality (K factor) that relates the instrument’s response
in cps to the grade of the material being measured. The K factor must be determined
empirically from measurements made in a controlled situation. The facility contains test
pits with material of known grade and thickness. The uranium grade determined from the
radiometric logging is reported as an equivalent assay (eU3O8) to distinguish it from the
determination by chemical analysis.
SUMMARY OF RESULTS OF RADIOMETRIC SURVEYS
Although the results from the radiometric surveys match the core analyses for many of
the new drill holes, the results do not match the core analyses for a number of historic
drill holes. In the later cases, the eU3O8 is higher and the results are attributed to
secondary leaching of the uranium from the MCB causing disequilibrium. The magnitude
of the disequilibrium (and the leaching) varies throughout the deposit. As a result, the
radiometric surveys are not recommended as an alternative to determine the uranium
content of any of the new drill holes that are drilled.
The %eU3O8 determined in the historic holes from the radiometric surveys do not match
the historic core analyses. In all cases, the eU3O8 is much higher. The difference may be
attributed to disequilibrium, however, it may also be due to the presence of secondary
uranium deposited on the drill hole wall. In either case, the radiometric probe cannot
currently be used to validate the analyses in the historic holes.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 9-2
www.rpacan.com
EXPLORATION POTENTIAL
Historic drilling (described below) has intersected the MCB down-dip from the current
Mineral Resource and to the east in the resource wireframes.
A target for further exploration was estimated for the areas where the historical drilling
has demonstrated the presence of mineralized MCB outside of Mineral Resources. A
polygonal method was used based on the thickness of the intersections of the MCB,
uranium grades, typical TREO grades, and a specific gravity of 2.7. It was estimated
that these areas could contain a further 40 Mt to 60 Mt in an exploration target grading
from 0.030% to 0.050% U3O8, accompanied by 0.12% to 0.18% TREO for the MCB.
The potential quantities and grades of the exploration targets are conceptual in nature
and there has been insufficient drilling to define a Mineral Resource. It is uncertain if
further exploration will result in the definition of a mineral resource in these areas.
More detail on the data supporting the exploration targets is available at the end of
Section 14, below.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Technical Report NI 43-101 – June 20, 2012
Rev. 0 Page 9-3
www.rpacan.com
10 DRILLING
PELE MOUNTAIN DRILL PROGRAMS
Historic drilling is described in Section 6. Figure 10-1 shows the location of the historic
drill holes on the property.
Pele Mountain has been exploring and evaluating the Eco Ridge Mine property since
October 2006. Diamond drill programs were carried out in 2006, 2007, 2008, and 2009.
A total of 232 holes were drilled by Pele Mountain on the property. Out of these, 214
investigated the MCB or other targets and 18 are geotechnical holes.
The early Pele Mountain drilling was aimed at confirming the historical data, and then it
focused on delineating the mineralized conglomerate. One drill hole was drilled in 2006
to confirm the historic drilling. Two drilling programs, from January to March 2007 and
from April to August 2007, were executed to provide data for the 2007 PA (Cochrane et
al, 2007). Exploration and infill drill programs were carried out from October 2007 to
June 2008, from June 2008 to February 2009, and from June 2009 to August 2009,
directed towards obtaining a tighter drill spacing for better grade delineation and
upgrading of Inferred Resources into the Indicated category, as well as to provide
mineralized core material for metallurgical tests. MCB intercepts from 22 drill holes have
been used for metallurgical tests (Cox et al, 2011). In 2011 Pele Mountain conducted an
infill and step-out drill program aimed at upgrading Inferred Resources into Indicated
category and to explore the down-dip continuation of the MCB to the north.
DRILLING PROCEDURES

The drilling was conducted by independent drill contractors, using a dieselpowered core drill. The drill rods were thin-wall BQ, NQ, and HQ. The drill
used initially was capable of drilling up to 350 m. Drills used in later drill
programs were capable of drilling past 700 m.

Each run consisted of three metres. It took two rods to complete one run.
Typically, it took an hour for four runs.

The drill crew marked any lost core or faulted area on metreage marker as
indicated by loss of water or water pressure in the hole.

Core recovery was excellent, with less than 1% of the core lost.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 10-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com

Upon completion of drilling, all material and waste were removed from the
site. The sludge was removed and buried and the hole was capped with a
removable metal cap.
DRILL HOLE DEVIATION SURVEY
Pele Mountain drill holes were surveyed by two different instruments. Holes PM-001 to
PM-022 were surveyed with an Icefield MI-03 instrument, with stations at every five
metres. Holes PM-023 to PM-213 were surveyed with a Ranger Multifunctional Tool.
This tool measures inclination, azimuth, gravity roll, magnetic dip, magnetic interference,
and temperature. Communication with the tool is with infrared link with RSC (ranger
survey controller). The tool employs a Triaxial Accelerometer (accuracy +\- 0.2 degrees),
a Triaxial Fluxgate Magnetometer (accuracy +\- 0.5 degrees) and a temperature sensor
packaged in a solid state brass alloy tube. The tool is employed in open hole
environments with stations taken at 10 m intervals.
RESULTS FROM THE PELE MOUNTAIN DRILLING
The results from the 2006-2011 drilling were used to prepare the MCB and HWZ block
model based on U3O8 and REE grade optimization. The locations of the recent holes
are shown in Figure 10-2.
The average thickness of the intercepts in the 2006-2011 drilling was 2.7 m for MCB and
6.5 m for the HWZ. The highest U3O8 and REE grades in the MCB consistently occured
at the base of the bed, and the grade decreased toward the top of the MCB. In the HWZ
the higher grades were related to the presence and frequency of floater reefs. The U3O8
grades of the intercepts were within the range indicated by historic drilling on the
property.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 10-2
Technical Report NI 43-101 – June 20, 2012
-36
CB
Z-5-1
5140000 N
N
Resource Outline
CB-22A
CB-17
4
CB-3
E-2
5139000 N
CB-21
CB-15
CB-23
C-PA-24
CB-20
CB-13
Property Boundary
CB-18
CB-12
CB-30
Canyon Lake
Area
PA-21
PA-29
PA-23
PA-20
PA-19
3
PA-17
PA-9
PA-7
PA-10
10-3
PA-16
CB-11
PA-13
PA-5
PA-6
CB-8
PA-11
PA-2
S-28
S-26
PA-3
PA-1
S-10
S-23
CB-7
CB-9
S-24
PA-4
S-22
CB-10A
CB-2
PA-26
PA-8
CB-14
PA-14
5138000 N
PA-15
PA-24
CB-3
2
CB-3
PA-12
PA-27
PA-28
PA-25
CB-31
CB-16
PA-18
PA-22
S-21
S-20
S-19
S-18
S-17
S-16
S-15
S-14
S-12
S-9
S-6
S-7
S-5
S-4
S-2
S-3
S-25
S-27
S-1
S-11
S-13
CB-6
CB-4
Cross Section Adit Area
CB-1
CB-5
385000 E
384000 E
383000 E
382000 E
5137000 N
381000 E
380000 E
CB-3
Figure 10-1
Property Boundary
Resource
Historic Drill Hole
Powerline
Road/trail
June 2012
0
200 400 600 800 1000
Metres
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Location of Historic Drill Holes
www.rpacan.com
Pele Mountain Resources Inc.
Legend:
-36
CB
Z-5-1
5140000 N
N
Resource Outline
CB-22A
PM19
8
CB-17
4
CB-3
CB-21
CB-15
CB-23
PM203
C-PA-24
PM190
CB-20
PM152
PA-3
PA-1
S-12
PM0402
PM04
PM069
S-10
S-9
PA-7
PM127
PM141
PM0
79
S-28
PM131
61
PM0
S-3
PM12
9
S-4
PM125
PM137
S-5
66
M0
PM173
PPM176
7
118
PM172
PM171 PM119
PPMM11
PM166
PM165
PM065
PA-9
PPM1
M1 35
36
S-26
PM130
3
PM06
064
PM
PM138
S-6
S-11
PM059
0
PM06
S-24
PM124
S-7
PA-15
PA-24
7
PM139
PM043
PM 6
045
PM04
12 5
PM111
MPM114
P1 11
PM
S-13P PMM1056 PM109
110
PM
S-14
06
PA-12
PM128
S-2
S-1PM062
1
08
PM
PM180
2
18
PM178
PM
S-15
5
PM05
4
PM05
PM126
PM13
PM
4 M078
00
P
3
8
04 7
04
PM
PM 049
PM
PM01
PPM
M0000 678
58
S-23
57
7
PA-18
S-25
S-27
PM132
8
PM184
18 6
PM185
PMM18
P
PM019
0389
PM
PM03
PM
PM174
PM175
PM0
8
PM15
1
PM14
2
3
3
PM183
PM179 PM189
PM177
116 PM023
PM025
107
S-17
S-166
PM05
PM14037
0365
PM
PPM03
PM068
PM144
PM14
44
S-19
S-18
0
PM02
PA-26
149
PA-4
PM0
S-20
PM
CB-6
PM024
PM028
CB-2
PM053
PM
PM
S-21
PM213
PM212
PM14
PM14
PM13
PM080
PM021
PA-8
2
PM05
1
04
PM
PM033
PM034
CB-7
PM161
15 3
PM012
001
PM
PM
PM210
PA-27
PM162
PM070
PM153
PA-2
1
S-22
2
PM03
PM207
CB-9
170
PA-11
PM0
PM155
3
20
PM
PM031
PM169
2 PM199
PM168
PM
PM201
0
PM20
PM205
PA-5
PA-6
PM150
PA-29
PM146
7
7
PA-10
PA-16
PM022
PA-13
0
PM07
7
74
PM072
PM157
PM001
05
CB-11
PA-17
PA-14
PM209
PM07
PM
1
CB-8
PM211
PM
16
7
5
PM089
PM159
6
PM08
8
PM05
PM164
PM156
PA-28
PA-25
PM082
PA-19
PM084
PM08
3
PM08
PM16
1
PM194
PM204
PM19
PM
085
PA-21
PM16
10-4
CB-14
PM192
CB-10A
CB-3
3
2
CB-3
5138000 N
206
PM
208
PM158
PA-22
18
CB-31
PM
PPM010
PM00
01 4
P
M
M0001
PM
0191764
Property Boundary
PM196
PM197
1
M07
P
PA-23
PMPA-20
154 PM073
11
3
PM
PM195
PM090
076
PM
PM
CB-30
Lake
PMCanyon PM099
0
10
1
PM10
Area
PM002
PM050
CB-18
CB-12
CB-16
PM14
5
8
18
CB-13
PM
PM10
PM
E-2
5139000 N
PM088
PM193a
PM193b
CB-4
PM0
026
PM 27
CB-1
Cross Section Adit Area
PM103
PM091
PM095
PM
PM030
02
CB-5
PM094
PM092
385000 E
PM098
383000 E
382000 E
381000 E
380000 E
5137000 N
PM097
PM104
384000 E
9
PM093
CB-3
PM102
Legend:
PM096
Pele Mountain Resources Inc.
Resource
Historic Drill Holes
Pele Mountain Past Drill Holes
Pele Mountain Recent Drill Holes
Powerline
Road/trail
June 2012
0
200 400 600 800 1000
Metres
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Location of Pele Mountain
Drill Holes PM-001 to PM-213
www.rpacan.com
Property Boundary
Figure 10-2
www.rpacan.com
11 SAMPLE PREPARATION, ANALYSES AND
SECURITY
Throughout the Pele Mountain drilling programs the core collected has been sampled
using standard core drilling methods. The core has been analyzed at independent
commercial laboratories with routine quality assurance and quality control (QA/QC)
procedures.
It is the opinion of RPA that the sampling method implemented by Pele Mountain at the
Eco Ridge Mine Project meets industry standards.
CORE HANDLING PROCEDURES
Pele Mountain used the following core logging procedures:

Core was placed by the driller in well identified, one metre and a half long,
labelled wooden core boxes, from left to right, with the start and finish of each
drill run labelled with a metreage marker.

Core boxes were closed by the driller at the drill site and regularly transported
to the core logging facility, and laid out in order of increasing hole depth.

The core logging facility is a secure warehouse in an industrial area in the
City of Elliot Lake. Signage is posted restricting no unauthorized personnel.
Employees working in the building are informed of this restriction. The
building is locked and bolted at all times when not occupied.

Core box labels and metreage were checked for accuracy, and aluminum
labels recording hole number and box number were affixed to the boxes.

The core was stored at the core storage facility in Elliot Lake. Core which
was split and samples collected were stored inside the locked core storage
facility. All other core was stored outside.
CORE LOGGING PROCEDURES

Specially designed forms including general data such as location, date drilled,
diameter, azimuth, dip, etc., were used for logging.

Geological data were manually recorded on the drill logs. The drill log
includes: lithology, alteration, mineralization, and structure. The handwritten
log when completed was transferred to electronic format for analysis.

The sample numbers were recorded on the drill logs.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 11-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
SAMPLING PROCEDURES

At the Pele Mountain core facility, sampling intervals have been set according
to geological and/or mineralogical constraints. From 2006 to 2009 sampling
was continuous from the at least one metre above the hanging wall of the
MCB to its base. At least one barren sample has been taken from the
quartzite underlying the base of the MCB. If there were significant floater
reefs above the MCB, sampling was extended into the hanging wall to include
these reefs. In 2010, core from holes drilled previously was sampled to
approximately 20 m above the base of the MCB. For the 2011 drill program,
20 m or more of core was sampled above the base of the MCB to allow the
definition of the HWZ.

The sampling interval was variable and dependent upon lithological or
mineralogical parameters. From 2006 to 2009, in the floater reefs, sample
intervals varied from 0.5 m to 1.5 m. In the MCB, sample intervals varied
between 0.1 m and 0.5 m. From 2010, inside the MCB the samples were less
than 0.5m long, and above the MCB, into the HWZ and above it, sample
length was typically 1 m.

The sampling of the BCB was continuous from at least one sample above the
contact to at least one sample below the contact.

Sample intervals were marked on the core and core boxes with a red lumber
crayon, and sample tickets prepared in triplicate. One tag was stapled to the
interior of the core tray at the beginning of the sample interval, one tag
accompanied the sample, and the remaining tag was used for drill log entry.

The core was sampled by halving with a diamond saw. Once sawn, both
halves of the core were returned to the core tray. After each sample, the saw
blade was cleaned with water.

Some of the sampling in the MCB required that one of the sawn halves be
halved again to create quarters. Quarter core was submitted for analysis
while the remaining quarter core was retained for the geological record and
the half core was put aside for future metallurgical testing.

Before removing the sample from the core tray and placing it in a plastic
sample bag, each sample interval was checked to confirm the sample tag
matched the interval being sampled.
QA/QC PROCEDURES

For control purposes, one blank sample of barren material was included with
each batch of 15 to 20 samples, approximately one blank sample per hole.
From 2007 to early 2011, the blank samples are diabase dyke intercepts from
a gold project at Manitowadge, Ontario, located several kilometres from Eco
Ridge Mine Project. In late 2011 the blank material was changed to syenite
grab samples, collected at a Pele Mountain gold property in Wawa area.

Certified reference material samples DL-1a, UTS-4, UTS-3, SY-3, and SY-4
from CANMET, and OREAS102A from Ore Research & Exploration Pty. Ltd.
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were inserted every 15 to 20 samples for independent assessment of the
laboratory performance.

Duplicate samples were submitted at a rate of one in 15 to 20 samples to
assess the reliability of the grade determination at various grades.

Pulp replicates were sent to a different lab for check analyses. Blanks, as well
as duplicate pulp replicates were submitted at a rate of 1 in 20.
SAMPLE SHIPMENT AND SECURITY
OCTOBER 2006 – AUGUST 2007

Bagged and securely closed samples were placed in larger, triple bagged
“rice bags”, approximately 15 samples per bag.

The name of the client (Pele Mountain) and the sample numbers of the
samples contained within the “rice bags” were recorded on the exterior of the
second bag. The third bag had the name and address of the recipient
recorded on it.

Analytical request forms were submitted with each bag and placed in the first
bag. Each bag was securely fastened with a numbered security tag and then
the bag was photographed so that both the security number and bag number
were recorded.

The bags were strapped and placed on wooden pallets and transported by a
commercial carrier to the laboratories for sample preparation.

When the samples were received, the laboratory recorded the sample
numbers and assigned a group number. Sample receipt verification was then
e-mailed for confirmation.
OCTOBER 2007 – AUGUST 2009

Broken sample pieces were placed in properly tagged heavy duty plastic
bags. Samples were packed into five litre heavy plastic pails with locking lids.
Description of the content, analysis packages, and addresses were also
placed in the pail, then the lids were sealed with security tags. The numbered
seals were recorded and the information relayed to the laboratory.

The name of the client (Pele Mountain), drill hole name, and the sample
numbers were recorded on the exterior of the pail, as well as the address of
the laboratory.

The pails were transported by a commercial carrier to the laboratories for
sample preparation.

When the samples were received by the laboratory, a work order number was
assigned and sample receipt verification was transmitted to Pele Mountain.
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MAY – JULY 2011

Bagged and securely closed samples were placed in larger “rice bags”.

The name of the client (Pele Mountain) and the sample numbers of the
samples contained within the “rice bags” were recorded on the bag.

Analytical request forms were submitted with each bag. Each bag was
securely fastened with a numbered security tag, and security number and
bag number were recorded.

The bags were strapped and placed on wooden pallets and transported by a
commercial carrier to the laboratories for sample preparation.

When the samples were received, the laboratory recorded the sample
numbers and assigned a group number. Sample receipt verification was then
e-mailed to Pele Mountain for confirmation.
SPECIFIC GRAVITY MEASUREMENTS
The specific gravity measurements implemented for the 2007 RPA Preliminary
Assessment (Cochrane et al., 2007) were applied to the following drill programs
(October 2007, 2008, and 2009) for continual assessment of the deposit for estimation
purposes. The average specific gravity is 2.71 g/c3, confirming the value determined for
the 2006-early 2007 drill program (Cochrane et al., 2007). Thirty-six samples were
submitted to Activation Laboratories Ltd. (Actlabs), Ancaster, Ontario, for specific gravity
measurements. The average specific gravity for the quartz pebble conglomerate is 2.76
g/c3, while the quartzite has a specific gravity of 2.65 g/c3.
The specific gravity value of 2.71 g/c3 determined in this study concurs with the 2.70 g/c3
used by Rio Algom for its "ore estimates". In this resource estimate, a specific gravity of
2.70 g/c3 is used for tonnage determination.
HISTORIC HOLES
No information is available concerning the sampling and assaying methods used in the
historic drilling for the CB-series and PA-series drill holes. The samples have been
analyzed at a number of different laboratories, which most likely include mine site
laboratories. The laboratories are generally not identified and there is no comprehensive
description available on the assay procedures used.
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Robinson (1954) provided a list of check assay results for samples taken from the Sseries holes drilled by McIntyre in the 1954 exploration program. The primary laboratory
used was identified as Bell-White, check assays were carried out at the Ontario
Department of Mines Laboratory, and some samples were sent to a laboratory identified
as “Technical Services Laboratory”.
PELE MOUNTAIN DRILLING PROGRAMS
Pele Mountain drilling at Eco Ridge property spanned several programs. Samples were
sent to several laboratories and up to six different assay methods were used, tailored to
accommodate the exploration and mineralization delineating drilling programs. The
samples have been sent mainly to SGS and Activation Laboratories.
It is the opinion of RPA that the analytical procedures used for assaying the samples
collected at the Eco Ridge Mine Project meet industry standards.
JANUARY TO MARCH 2007 DRILL PROGRAM
For the January to March 2007 drilling program, the samples were sent to SGS Toronto,
an accredited laboratory with the Standards Council of Canada, for sample preparation
and analyses. The samples were crushed, split, and pulverized and were analyzed
using two methods: IMS95R (metaborate fusion with ICP-MS finish) for U, Th, and RRE
and ICM40B (multi-acid digestion with ICP-ES and ICP-MS finish) for a suite of 50
elements, including U and S. Some samples were also analyzed for gold with FAI313
method (lead collection fire assay with ICP-OES finish).
APRIL TO AUGUST 2007 DRILL PROGRAM
For the April to August 2007 program, core samples were sent to Saskatchewan
Research Centre (SRC) in Saskatoon for sample preparation and analyses.
SRC
analyzed the samples for uranium with a multi-element ICP package using an aqua regia
digest, with a second analysis using a digestion in a mixture of HF/HNO3/HClO4.
Because of variations in the analyses from SRC compared to the historic analyses and
the analyses from SGS Toronto, all of the pulps for drill holes were re-analyzed at SGS
Toronto using the IMS95R method to ensure consistency in the data used for Mineral
Resource estimation. Core samples from the remaining holes in the program were sent
to SGS Toronto for sample preparation and analyses.
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The 2007 PA (Cochrane et al., 2007) contains a detailed discussion of the analytical
methods employed for samples collected from January to August 2007.
OCTOBER 2007 TO AUGUST 2009 DRILLING PROGRAMS
The samples collected by Pele Mountain from October 2007 to August 2009 were sent to
Actlabs for sample preparation and analyses. Actlabs is an accredited laboratory with the
Standards Council of Canada, and is also accredited to ISO/IEC 17025. This
accreditation is the standard for analytical testing laboratories.
The entire rock or core sample was crushed to a nominal minus 10 mesh (1.7 mm),
mechanically split (riffle) to obtain a representative sample and then pulverized to at
least 85% minus 200 mesh (75 μm). All of the steel mills at Actlabs had mild steel and
did not induce Cr or Ni contamination. As a routine practice, sand was used as a
cleaner between each sample. Quality of crushing and pulverization was routinely
checked as part of the quality assurance program. Randomization of samples in larger
orders (>100) provided an excellent means to monitor data for systematic errors. The
data was restored after analysis according to sample number. For soil samples, a 100 g
to 150 g aliquot was pulverized in a mild steel ring mill to normally finer than 95% minus
150 mesh. As a routine practice, sand was used as a cleaner between each samples.
Uranium was analyzed using three different methods. Package 4B2-standard was used
for uranium, thorium, and the rare earth elements. Package U-DNC provides delayed
neutron counting for uranium and was assayed if high. Package 1D was used for the
soil samples for uranium and rare earth elements.
The Actlabs Code 4B and trace element ICP/MS package Code 4B2 was a whole rock
package fusion technique that employs lithium metaborate/tetraborate fusion. The
resulting molten bead was rapidly digested in a weak nitric acid solution. The fusion
ensured that the entire sample was dissolved. This procedure allowed for the major
oxides including SiO2, REE and other high field strength elements to be put into solution.
The Actlabs U – DNC package was a Delayed Neutron Count for uranium. The Actabs
Code 1D technique employed an irradiation with flux wires. An approximately 30 g
aliquot was encapsulated and weighed in a polyethylene vial and then irradiated with flux
wires at a thermal neutron flux of 7 x 1011 n.cm-2s-1. After a seven day decay to allow
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Na-24 to decay the samples were counted on a high purity Ge detector with a resolution
of better than 1.7 KeV for the 1332 KeV C0-60. Using the flux wires the decay corrected
activities were compared to a calibration developed from multiple certified international
reference materials.
Actlabs routinely monitored and documented the reliability of submitted samples to
ensure that any sub-samples taken (e.g. from a crushed rock split) were reliable and
representative of the original sample submitted.
Actlabs maintained a schedule for the maintenance and calibration of equipment used in
the laboratory. Records of calibration and performance parameters were maintained for
both testing and measuring equipment.
SGS Laboratories in Toronto was used for sample check analyses. SGS is an accredited
laboratory with the Standards Council of Canada. SGS Minerals Services is also
accredited to ISO/IEC 17025.
Pele Mountain consulting geologists used the SGS
analysis package IMS95R recommended in the PA of October 2007 (Cochrane et al,
2007).
PULP RE-ASSAY PROGRAM NOVEMBER 2010
In November 2010, Pele Mountain submitted 1,283 pulps from MCB intercepts collected
in the 2008 and 2009 drill programs for re-analysis. The pulps were sent to SGS Toronto
to be assayed for REE, yttrium and scandium. The analytical methods chosen were
IMS95A (trace elements by lithium metaborate fusion with ICP-MS finish) for REE and
Yttrium. The digestion with lithium metaborate is not suitable for producing accurate
results for Scandium, hence the ICP40B analysis package was used (four acid digestion
with ICP-AES finish) for reporting the latter.
MAY - JULY 2011 DRILLING PROGRAM AND EXTENDED SAMPLING PROGRAM
NOVEMBER 2011
The samples collected by Pele Mountain from the 2011 drill program and samples
collected from core obtained in previous drill programs were sent to Actlabs for sample
preparation and analyses.
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Uranium and REE were analyzed using the analysis package 4B/4B2, involving
metaborate/tetraborate fusion and ICP/MS. Samples with uranium results above
detection limit were analyzed via DNC or XRF.
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12 DATA VERIFICATION
DRILL HOLE COLLAR SURVEYS
Drill hole collar locations and elevations were determined by Paul H. Torrance Surveying
using precision GPS measurement. The equipment used to survey was a Leica dual
frequency GPS RTK (Real Time Kinematic) system, and the surveys were based on
static sessions from Ministry Of Transportation Ontario control monuments. The
coordinate values provided were UTM, NAD83 CSRS (Canadian Spatial Reference
System) horizontal datum and CGVD28 vertical datum, rounded to one decimal place.
DRILL HOLE DEVIATION
The historic holes have been tested with acid, providing control points for dip variation
along the hole or at the end of the hole. For those with no data regarding the dip, i.e., 18
holes from the CB series, a correction was applied considering variations similar to the
neighbouring holes.
Pele Mountain drill holes were surveyed by two different instruments. Deviation survey
data was provided in digital files.
Prior to transfer to the database, the data was
scrutinized for errors. Details about the instruments are provided in Section 10.
DATABASE
Drill log data were formatted accordingly for import into a Gemcom GEMS project
database for geological modelling and resource estimation. The drill log data for the Eco
Ridge Mine Project contained information acquired from several stages of exploration,
during a period of more than 50 years. The database contained drill hole and sample
data from several historic drill programs and the recent Pele Mountain drill programs.
The historic drill programs were conducted by Pardee in 1955 (series PA, holes 1-29),
New Jersey Zinc in 1954-1955 (series CB, holes 1 to 24), Rio Algom in 1967-1979
(series CB, holes 30 to 35, diameter AX and AXT), and McIntyre (series S). There were
in total 325 holes in the Gemcom database, containing 29 holes from CB series, 29
holes from the PA series, 27 holes from the S series, and 214 holes from the recent PM
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series. There were 143 sample entries for the CB series, 243 samples for the PA series,
58 for the S series, and 7,629 for the PM series.
The database contained drill hole collar location, deviation surveys, lithology, sample
numbers, sample intervals, and analytical data. For the historic holes the analyses
primarily included %U3O8 and there were some samples with ThO2 analysis. For the PMseries holes, the analyses included %U3O8, Th, REE, Y, Sc, S, Au, and P.
DATA ENTRY
Data were extracted from copies of the original historic drill logs, which contained the
core description, sample numbers, sample intervals, and the uranium analyses. The
lithology was encoded according to a scheme containing 27 lithological types. Analytical
data in the historic drill holes was expressed in mixed units, either as percentage U3O8 or
pounds/ton U3O8. ThO2 analysis was available for a few samples only. All the
pounds/tons values were converted to percentage U3O8 by dividing the pounds/tons
results by 20 before the data were entered into the database.
For the drill programs and pulp replicate re-assay program conducted by Pele Mountain
in 2006-2011 the core description, sample numbers, sample intervals, drill hole
coordinates, and survey data were entered into the database from the drill logs. Core
samples were analyzed at SGS in Toronto, SRC in Saskatoon, and at Actlabs in
Ancaster. The analyses were sent to RPA and Pele Mountain in printed and digital
format. Analytical values were provided in ppm for U, Th, and REE, Y, and Sc, while S in
percentages and Au in ppb.
Uranium was converted to oxide percentage prior to
importing in the database, while Th, REE, Y, and Sc results were preserved in element
ppm values.
Dhlogger and Microsoft Excel were used for data entry and data were exported as
comma separated files and then imported into Gemcom GEMS. Assay data for historic
holes were typed by the database operator and imported, while the PM-series assay
results were imported from files provided by the laboratory.
The drill hole collar locations in UTM coordinates were entered directly into the Gemcom
database.
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Drill hole deviation survey data were typed for historic drill holes and imported directly
when properly formatted digital data was provided, as was the case for most of the Pele
Mountain drilling.
DATABASE VALIDATION
All data imported into the Gemcom GEMS project database were initially in the form of
comma separated values file format.
Checks on the collar location, lithology, and assay data were performed. Sample and
lithology location entries were validated by comparison with drill logs. Drill hole
deviations were inspected visually. Collar locations were checked against paper maps
and digital topographic surface. Assays were compared with drill logs for historic data
and with assay certificates files originated from the laboratory. Assays were also
compared by plotting the assay value against lithology. Gemcom GEMS database
verification routines were used for database validation
The 3D geological model developed in Gemcom shows a good agreement between the
historic holes and the Pele Mountain drill programs.
PELE MOUNTAIN QA/QC MONITORING
Under direct supervision from RPA, Pele Mountain implemented a QA/QC protocol in
2007 that has been continued throughout the Pele Mountain drilling. The QA/QC
protocol consisted of regular submission of blanks, certified reference materials
(standards), and core duplicates at a rate of one in 15 to 20 samples, as well as pulp
replicates to alternate lab.
The QA/QC procedures, results, interpretation and conclusions for the 2006-2009 drill
programs and the 2010 pulp re-assay program are presented in the 2007 Preliminary
Assessment Report (Cochrane et al., 2007) and in the 2011 Preliminary Assessment
Report (Cox et al., 2011). Excellent correlation coefficients were found for sample
duplicates and interlaboratory checks, demonstrating that samples are representative of
the mineralization. No evidence of contamination was revealed by the blanks. The
certified reference materials indicated that there was no bias and the level of
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contamination was not considered significant. Pulp replicates sent to SRC and Actlabs
returned assay values with correlation coefficients of 0.99, indicating excellent
interlaboratory agreement, as well as good reproducibility with different analytical
methods.
PELE MOUNTAIN QA/QC PROGRAM 2011
The rock samples from the drill core were analyzed by Actlabs. Actlabs is accredited by
the Standards Council of Canada. The samples were analyzed for U, REE, Y Sc, and
Th by the 4B2 lithium metaborate/tetraborate fusion - ICP/MS analysis package.
Pele Mountain geologists regularly submitted blanks, certified reference material
samples, and sample duplicates to monitor the assay results. The control samples were
submitted one in every 15 to 20 samples.
Pele Mountain personnel inserted 136 samples of blank material in the sample stream.
Out of these, 91 samples were diabase dyke core taken from a gold project at
Manitowadge, Ontario, while 45 were syenite grab samples from a Pele Mountain gold
project in Wawa, Ontario. The diabase material assayed consistently at the Earth
uranium background level, as well as consistent REE values. The syenite returned
roughly twice the uranium level of the diabase, while the REE values were less
homogenous (Figure 12-1). There was no indication of sample contamination.
The certified reference material (CRM) samples inserted by Pele Mountain in the sample
stream were DL-1a (waste-rock from the Denison Mine) (112 samples), UTS-4 (from
Eldor Mine at Rabbit Lake, Saskatchewan) (15 samples), and UTS-3 (from Eldorado
Nuclear Ltd., at Beaverlodge, Saskatchewan) (20 samples), totalling 147 samples
(Figure 12-2). These CRM are certified for uranium and thorium and have been used
continuously throughout the Pele Mountain drilling programs. The CRM were obtained
from CANMET.
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FIGURE 12-1 BLANK SAMPLES
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FIGURE 12-2 CERTIFIED REFERENCE MATERIALS SAMPLES
Approximately 175 field sample duplicates were assayed. The correlation coefficient
was 0.89 for U3O8 after removing one outlier. The correlation coefficient for Nd was
0.84, and for Dy it was 0.83.
This represents a good correlation for field sample
duplicates. No bias was identified (Figure 12-3).
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FIGURE 12-3 FIELD SAMPLE DUPLICATES
INDEPENDENT SAMPLING BY RPA
During the November 2010 site visit, RPA personnel collected five samples from four
diamond drill holes and sent them to SGS for independent assays using the IMS95A
analytical package. The samples consisted of the second half of the sampled core
retained. The presence of mineralization was confirmed and the assay results were
similar to the original samples. A comparison of the assays is listed in Table 12-1.
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TABLE 12-1 RPA INDEPENDENT SAMPLING
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Original sample
Pulp replicate
Hole
From
To
Sample ID
U3O8 (%)
Pulp ID
U3O8 (%)
PM075
239.05
239.50
01208
0.248
70973
above DL1
PM078
107.35
107.64
01367
0.023
70972
0.022
PM084
236.29
236.60
01561
0.013
70971
0.016
PM087
199.86
200.02
01646
0.064
70975
0.074
PM087
214.90
215.26
01655
0.056
70974
0.059
Note 1 - the grade of the sample was higher than the upper detection limit imposed by the IMS95A
analytical package
It is the opinion of RPA that the sample preparation, security, and analytical procedures
implemented by Pele Mountain for the Eco Ridge Mine Project meet industry standards.
The analysis of CRM, blanks, duplicate pulp samples, and duplicate core samples show
acceptable results.
RPA considers the database is acceptable to use for resource estimation.
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13 MINERAL PROCESSING AND
METALLURGICAL TESTING
Results of earlier metallurgical testwork are summarized in the 2007, April 2011, and
August 2011 NI 43-101 Technical Reports (Scott Wilson RPA 2007, RPA 2011a, RPA
2011b). In efforts to advance the project, Pele Mountain embarked on a metallurgical
testing program to investigate processing methods that will improve the recovery of the
REOs that are contained in the Eco Ridge resources.
The most recent phase of metallurgical testing was performed by the Saskatchewan
Research Council (SRC) in Saskatoon, Saskatchewan. The conceptual process utilizes
comminution, magnetic separation, flotation, acid baking, and leaching to extract
uranium and REOs. The results were reported in a report and via e-mail and personal
communication with SRC (SRC, 2012).
SAMPLES
Four bulk samples, weighing between 12 kg and 32 kg, were sent to SRC by Pele
Mountain contractors. The samples were used to perform physical separation tests,
including size reduction, high intensity magnetic separation, flotation, acid baking, and
leaching.
SAMPLE PREPARATION
The samples were prepared using a combination of crushing, screening, and dry milling
to reduce the particle sizes to 100% passing 300 µm. Due to the limited sample sizes,
the various tests were performed on different samples. It is assumed that the results are
comparative and follow up testwork is advancing at SRC that will include tracking
individual samples throughout the full testing cycle in preparation for pilot plant testing.
For the majority of the tests, the product was screened at 45 µm. The screen oversize,
i.e., minus 300 µm plus 45 µm, was separated by gravity and magnetic separation and
the screen undersize, i.e., minus 45 μm, was processed by flotation.
Since the
preliminary flotation recovery of REEs and uranium on the fine particles achieved
significantly lower recovery than achieved by dry magnetic separation, a screen size of
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20 µm was used to increase the amount of material reporting to the magnetic separation
and reduce the amount reporting to flotation.
A single Frantz barrier magnetic separation was performed on the plus 20 µm minus 45
μm size fraction.
During this separation no obvious electrostatic interference was
observed which appears to support an assumption that plus 20 µm is a viable particle
size fraction for dry magnetic separation. This size distribution formed the basis of the
mass balance and economic analysis that was used to complete the PEA.
Ongoing magnetic separation testwork at SRC is transitioning to a focus on wet
magnetic separation as a better approach to reducing the size of the particles that can
be effectively treated. Testwork is also advancing at SRC on new collectors to optimize
recovery for the relatively small amounts that are expected to report to flotation.
Bulk sample #3 was screened at 45 µm. The product weights and size distributions are
shown in Table 13-1.
TABLE 13-1 PRELIMINARY SCREENING SIZE DISTRIBUTION
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Size
(µm)
minus 300 plus 45
minus 45
Weight
(g)
2,422
787
Weight
(%)
75.5%
24.5%
The minus 45 µm material was then wet screened at 20 µm. The product weights and
size distributions from the wet screening are shown in Table 13-2.
TABLE 13-2 PRELIMINARY SCREENING SIZE DISTRIBUTION
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Size
(µm)
Weight
(g)
Weight (%)
minus 45 plus 20
minus 20
53.8
84.8
39%
61%
From these two size distribution analyses, the overall size distribution was calculated, as
shown in Table 13-3.
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TABLE 13-3 OVERALL SIZE DISTRIBUTION
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Size
(µm)
Weight
(g)
minus 300 plus 45
minus 45 plus 20
minus 20
75.5%
9.5%
15.0%
ANALYSES
Although x-ray diffraction (XRD) was used at times to quickly evaluate various
parameters, lithium metaborate fusions, and inductively coupled plasma (ICP) analyses
were used to determine the metallurgical balances.
MAGNETIC SEPARATION
The magnetic separation tests were performed on bulk sample number #3. The coarse
fraction, i.e. minus 300 µm plus 45 µm, was separated into four fractions using three
different magnetic field intensities, as shown in Table 13-4.
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REO
Feed
Sc2O3
Y2O3
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
U3O8
8
79
424
796
80
277
39
2
25
3
15
3
5
1
5
1
432
Assays (ppm)
Mag1
Mag 2
6,500 G
10,000 G
666.7
3670.8
7014.0
712.8
2507.7
343.2
17.7
207.5
26.1
125.1
24.4
42.2
7.1
38.1
5.3
3372.6
292.1
1899.9
3439.4
348.0
1021.8
161.2
9.0
98.8
12.7
60.3
10.9
19.2
3.2
16.9
2.3
2051.9
Mag 3
18,000 G
Tails
Mag 1
6,500 G
70.4
362.4
621.6
50.9
175.0
30.3
2.2
24.3
3.3
16.5
3.2
6.0
1.0
5.8
0.8
625.0
7.7
23.5
36.9
3.6
12.2
2.2
0.2
2.0
0.3
1.6
0.3
0.7
0.1
0.7
0.1
42.6
78.8%
80.9%
82.4%
83.4%
84.8%
82.0%
76.4%
78.8%
77.3%
76.4%
76.3%
74.8%
74.9%
73.7%
74.4%
73.0%
Recovery (%)
Mag 2
Mag 3
10,000 G 18,000 G
7.4%
8.9%
8.6%
8.7%
7.4%
8.2%
8.3%
8.0%
8.0%
7.9%
7.3%
7.3%
7.1%
6.9%
6.8%
9.5%
5.8%
5.6%
5.1%
4.2%
4.2%
5.1%
6.5%
6.5%
6.8%
7.1%
7.0%
7.4%
7.5%
7.8%
7.6%
9.5%
Total
92.0%
95.5%
96.2%
96.3%
96.4%
95.3%
91.2%
93.3%
92.1%
91.3%
90.6%
89.5%
89.5%
88.4%
88.8%
91.9%
www.rpacan.com
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 13-4
Technical Report NI 43-101 – June 20, 2012
TABLE 13-4 MAGNETIC SEPARATION RESULTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
www.rpacan.com
A preliminary rougher flotation test was performed using the fine, i.e. minus 45 µm, size
fraction.
Flotation was performed at 25°C to 30°C using modified hydroximic acid
collector at a dosage of 2.5 kg/t. Sodium silicate was used as a depressant at a dosage
of 1.5 kg/t. The pH was between eight and nine and the flotation time was six minutes.
The results are shown in Table 13-5. The collectors used in this test were not targeting
U3O8 recovery. Follow up testwork is advancing at SRC to optimize flotation recovery
results.
TABLE 13-5 FLOTATION RESULTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
REO
Sc2O3
Y2O3
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
U3O8
Feed
(ppm)
n/a
99
519
963
95
292
49
3
33
5
22
4
8
1
7
1
640
Con.
(ppm)
n/a
218.4
1747.4
3242.9
320.2
940.1
147.3
8.3
84.1
10.5
47.3
8.9
16.2
2.6
13.3
1.9
838.4
Tails
(ppm)
n/a
61.2
137.2
253.0
25.3
90.7
18.4
1.5
16.9
2.7
14.1
2.8
5.4
0.9
5.1
0.7
577.8
Recovery
(%)
n/a
52.6%
79.8%
80.0%
79.8%
76.3%
71.3%
63.0%
60.7%
54.8%
51.0%
49.7%
48.6%
46.7%
45.0%
46.2%
31.1%
ACID BAKING AND LEACHING
Leaching tests were performed using three different batches of samples.
First, five
samples were used to determine the optimum conditions for acid baking and leaching.
The effect of baking temperature, baking time, acid to ore ratio, and leaching time were
evaluated using samples that had been pre-concentrated and samples that had not been
pre-concentrated.
The optimum conditions based on the preliminary tests were
determined to be acid baking at 310°C using the sulphuric acid to sample ratio of 0.3 t
acid to one tonne of ore, an acid baking time of three hours and a leaching time of three
hours. A new sample was used as the feed material to conduct batch leaching tests that
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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were used as the basis for this PEA. The leaching results for the selected, optimum
leaching conditions are shown in Table 13-6.
TABLE 13-6 LEACHING RESULTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
REO
Sc2O3
Y2O3
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
U3O8
Feed
(ppm)
10
298
1540
2952
241
959
121
8
101
16
54
8
27
0
20
0
946
PLS
(ppm)
0.5
18.2
98.9
190.6
15.4
61.8
7.7
0.5
6.4
1.0
3.3
0.5
1.7
0.0
1.2
0.0
61.5
Residue
(ppm)
3.1
24.5
45.7
71.2
8.8
25.4
5.2
0.4
4.6
0.8
4.3
1.0
1.9
0.3
2.0
0.3
15.2
Recovery
(%)
70.4%
92.5%
97.3%
97.8%
96.7%
97.6%
96.0%
94.8%
95.8%
95.6%
92.6%
89.0%
93.6%
0.0%
90.8%
0.0%
98.5%
HEAD ASSAYS
REE assays for the plus 45 μm and minus 45 μm size distributions were conducted for
bulk sample #4, as shown in Table 13-7.
TABLE 13-7 BULK SAMPLE #4 ANALYSES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Size
(μm)
+45 -300
-45
+45-300
-45
Sc
Y
La
Ce
Pr
Nd
Sm
Eu
Gd
3
9
47.6
90.4
319
847
677
1430
66.8
147
203
451
32.3
69.8
1.83
4.1
22.8
49.1
Tb
Dy
Ho
Er
Tm
Yb
Lu
U
Th
2.62
5.62
12.7
26.6
2.43
4.87
4.44
8.82
0.76
1.44
4.32
7.79
0.63
1.05
267
777
281
832
The results show that the finer size fraction has higher concentrations of the REEs,
which is common. When the decision was made to change the classification size to 20
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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μm, assays were also conducted on the plus 20 μm minus 45 μm size fraction and the
minus 20 μm size fraction. The finer size fraction was analyzed in duplicate. The results
are shown in Table 13-8.
TABLE 13-8 FINE SIZE FRACTION ANALYSES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Size
(μm)
-45 +20
-20
-20R
+45 +20
-20
-20R
Sc
Y
La
Ce
Pr
Nd
Sm
Eu
Gd
6
11
12
57.2
42.5
41.8
337
197
191
614
341
335
49.7
28.2
27.5
206
115
113
37.2
21.6
20.8
2.73
2.12
1.91
28.4
19.7
17.2
Tb
Dy
Ho
Er
Tm
Yb
Lu
U
Th
3.37
2.41
2.38
17.8
13.6
12.5
3.23
2.57
2.38
6.47
4.77
4.65
1.00
0.81
0.74
5.69
4.40
4.22
0.76
0.59
0.55
988
771
768
326
221
213
These results show that the analyses for the coarser and finer size fractions are similar
and, in fact, the concentrations of the REEs in the coarser size fraction are oftentimes
slightly higher than the concentrations of the REEs in the finer size fraction. Based on
this observation, it was assumed that the REEs are evenly distributed in the minus 45
μm plus 20 μm and the minus 20 μm particle size fractions.
RECOVERY
The analyses of the size fractions showed that the total amount of REEs reporting to the
fine size fraction was not proportional to the weights reporting to the coarse and fine
sizes alone. It was, however, possible to estimate the relative quantity of each REE
reporting to the coarse fraction, i.e., plus 20 μm, and the fine fraction, i.e., minus 20 μm,
using the weights reported in Tables 13-1, 13-2, and 13-3 and the analyses of the
various size fractions. For the purposes of these estimations, it was assumed that the
assays for the minus 20 μm fraction were the same as those for the minus 45 μm
fractions.
In some cases, e.g., Sc, Tm, and Lu, complete test data was not available. In these
cases, the average recoveries for the other light rare earth and heavy rare earth oxides
were utilized to estimate the overall recovery.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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Using these assumptions and the recovery data reported for the various unit operations,
the overall recovery for each of the REOs was estimated as shown in Table 13-9.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 13-8
Technical Report NI 43-101 – June 20, 2012
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TABLE 13-9 ESTIMATED REO RECOVERIES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
REO
Sc2O3
Y2O3
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
U3O8
REE to
Magnetic
Separation
65.4%
74.9%
68.1%
72.8%
72.0%
71.8%
72.4%
71.7%
72.5%
72.5%
73.0%
73.9%
74.0%
74.9%
75.9%
77.3%
66.1%
Magnetic
Separation
Flotation
Leaching
Overall
94.7%
92.0%
95.5%
96.2%
96.3%
96.4%
95.3%
91.2%
93.3%
92.1%
91.3%
90.6%
89.5%
89.5%
88.4%
88.8%
91.9%
71.8%
52.6%
79.8%
80.0%
79.8%
76.3%
71.3%
63.0%
60.7%
54.8%
51.0%
49.7%
48.6%
46.7%
45.0%
46.2%
31.1%
70.4%
92.5%
97.3%
97.8%
96.7%
97.6%
96.0%
94.8%
95.8%
95.6%
92.6%
89.0%
93.6%
93.7%
90.8%
93.7%
98.5%
61.1%
75.9%
88.1%
89.8%
88.7%
88.6%
85.1%
78.9%
80.8%
78.3%
74.5%
71.1%
73.8%
73.8%
70.8%
74.1%
70.2%
SAMPLES
A bulk sample collection program ran from November 2011 to December 2011,
consisting of drilling multiple holes on two sites located in the southeast of the resource
area. The sites were selected due to the proximity to surface of the MCB, while being of
sufficient depth to avoid the usual excessive groundwater leaching of the MCB near
surface. M.G. Forage Inc completed drilling of 98 NTW boreholes, for a total of 2139.5
m of drilling, resulting in 2635 kg of MCB material. Approximately 200 kg of this material
is currently being used in processing optimization testwork at SRC and the balance is
being securely stored in Elliot Lake in preparation for commencement of a pilot plant test
program.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 13-9
Technical Report NI 43-101 – June 20, 2012
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14 MINERAL RESOURCE ESTIMATE
SUMMARY
The current Mineral Resource estimated by RPA for the Eco Ridge Mine Project is
summarized in Table 14-1. The Mineral Resources are reported at a cut-off value of
$100 per tonne for the MCB and $50 per tonne for the HWZ.
Indicated Mineral
Resources total 48.7 Mt at 0.026% U3O8 and 0.116% TREO.
Inferred Mineral
Resources total 37.9 Mt at 0.026% U3O8 and 0.110% TREO. The effective date of the
Eco Ridge Mineral Resource estimate is April 16, 2012.
TABLE 14-1 SUMMARY OF MINERAL RESOURCES – APRIL 16, 2012
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Tonnes
U3O8
U3O8
LREO
HREO
TREO
TREO
(000)
(%)
(000 lbs)
(ppm)
(ppm)
(ppm)
(000 lbs)
MCB
20,514
0.045
20,447
1,426
193
1,618
73,184
HWZ
28,223
0.012
7,214
733
88
821
51,111
Total
48,737
0.026
27,661
1,025
132
1,157
124,295
MCB
16,906
0.043
15,940
1,279
183
1,463
54,515
HWZ
20,956
0.013
5,822
713
95
808
37,329
Total
37,863
0.026
21,762
966
134
1,100
91,843
Zone &
Classification
Indicated
Inferred
Notes:
1.
2.
3.
4.
7.
5.
CIM definitions were followed for Mineral Resources.
Mineral Resources were estimated at a cut-off value of $100 per tonne for the MCB, and $50 per
tonne for the HWZ. Values were calculated based on prices and recoveries of uranium and rare
earths, net of off-site rare earth separation costs.
Mineral Resources were estimated using an average uranium price of US$70 per lb U3O8, a rare
earth “basket price” of $78 per kg (net of separation charges), and a C$:US$ exchange rate of
1.00:1.00.
A minimum mining thickness of 1.8 m was used for the MCB.
Light Rare Earth Oxides include La2O3, CeO2, Pr6O11, and Nd2O3.
Heavy Rare Earth Oxides include Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3,
Yb2O3, Y2O3, and Lu2O3. Sc2O3 is also included in HREO, as it occurs in low concentrations and
carries high unit values like an HREO.
RPA has carried out the Mineral Resource estimate for the mineralization within the
MCB and the HWZ, situated immediately above the MCB. A minimum true thickness of
1.8 m was used for MCB, while for HWZ the thickness was determined based solely on
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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economic considerations. Mineral Resources have not been estimated for any zones
outside of the MCB and the HWZ.
Since the previous NI 43-101 resource estimate, Pele Mountain has completed a 7,000
m drill program as well as a core re-sampling campaign to increase the sampling range
to include the HWZ above the MCB. As a result of these initiatives, the Indicated and
Inferred Resources have increased significantly.
The shape of the Resource Wireframe has been changed due to the inclusion of new
drilling and the exclusion of historic uranium-focused drill holes where complete assay
analysis for REO in the MCB and sampling of the HWZ is not available. However, the
MCB was reported as present in every one of the historic drill logs in those areas and at
similar thicknesses.
The Mineral Resources at Eco Ridge have excellent potential for upgrade and
expansion, with lower-than-normal exploration risk in the historically drilled areas. The
mineralized reefs of the Elliot Lake mining camp are well known for their consistency and
size and, to-date, infill drilling has been successful in upgrading Inferred resources to the
Indicated category in the MCB. There is also excellent potential to add substantial new
mineral resources in areas beyond the Resource Wireframe where the deposit remains
open down-dip beyond the historically drilled areas.
MINERAL RESOURCE DATABASE
The April 16, 2012 Mineral Resource estimate for the Eco Ridge deposit was based on
238 diamond drill holes totalling 44,066 m. The resource drilling consisted of 68 historic
holes drilled from 1954 to 1974 totalling 11,471 m, and 170 Pele Mountain holes drilled
from 2006 to 2011 totalling 32,595 m.
Rare earth data has been collected only for the Pele Mountain drill holes. There were
163 mineralized intercepts assayed for REE. Twenty-five of these drill holes were not
assayed for Tm and Lu, and five other drill holes were not assayed for Sc.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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The resource estimate was based on 3,572 assays for uranium and 3,338 assays for
REE and other elements. The REE assays did not have Tm and Lu reported for 194
samples, and Sc results were not reported for 18 samples.
In 2011, along with an infill and exploration drilling program, Pele Mountain sampled and
assayed core from above the MCB that was collected in previous years. The assaying
was carried out for U, Th, light rare earth elements LREE (La, Ce, Pr, and Nd) and heavy
rare earth elements HREE (Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, and Lu) as well as Y
and Sc.
GEOLOGICAL INTERPRETATION AND 3D SOLIDS
Historic drill logs, cross sections, government geology maps, and sample analyses were
used in combination with data collected in the 2006 to 2011 Pele Mountain drill
programs.
West facing north-south cross sections were drawn which displayed
topography and the locations of historic and current diamond drill holes with the
stratigraphic intercepts identified in the holes.
The geological interpretations from the diamond drill holes used the base of the MCB
and the top of the underlying volcanic formation as marker beds. These two features
were linked between the diamond drill holes for each cross section and longitudinal
section. The base of the MCB and the top of the volcanic formation are the most distinct
and recognizable features in the stratigraphy.
The base of MCB, marked by distinct conglomerate beds or presence of pebbles
accompanied by pyrite and accumulation of heavy minerals, relates directly to the
location of the uranium/REE mineralization. The contact between the MCB and the
HWZ is transitional and it is identified by a decrease in grades across the board. The top
of the HWZ is also transitional, marked by diminishing grades. NSR values of $100/t for
the MCB and $50/t for the HWZ were used as a guide for the top of the units.
Based on assay data, the percent of uranium and REE mineralization through the HWZ
and MCB typically increased down hole. The mineralization stops abruptly at the contact
with the underlying quartzite. The underlying quartzite have grades of 0.01% U3O8 or
less.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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A large 25 m wide Nipissing diabase dyke crosses the property. The dyke strikes eastwest and dips at approximately 65° to 70° S.
Several dyke segments have been
modeled based on the available drilling information.
Geological interpretations were used to generate 3D wireframe models of the MCB, the
unconformity and the diabase dyke. The cross sections indicated that the MCB has an
average dip of 21° towards the north, with values ranging from 17° to 25°. Data from
deeper holes suggested a down-dip steepening of the dip angle.
The longitudinal
sections showed that the MCB has a 2° to 3° plunge towards the west. Both the cross
sections and the longitudinal sections reflected a consistent thickness of quartzite
between the base of the MCB and the Volcanic/Sediment contact. The interpretation
and extrapolation of the cross section data to the topographic surface on the plan map
showed that the MCB has a strike of N80°E.
The resource wireframes were based on the MCB and the HWZ 3D wireframe solids.
Table 14-2 shows the descriptive statistics of the MCB and the HWZ intercepts true
width, and the intercepts true width histogram is shown in Figure 14-1 for the MCB and
in Figure 14-2 for the HWZ.
TABLE 14-2 MCB AND HWZ INTERCEPTS TRUE THICKNESS DESCRIPTIVE STATISTICS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Mean
Median
Minimum
Maximum
Count
MCB true thickness (m)
HWZ true thickness (m)
2.76
2.74
1.74
4.36
238
6.48
5.71
0.11
19.61
130
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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60
120%
50
100%
40
80%
30
60%
20
40%
10
20%
0
0%
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
4.2
4.4
4.6
4.8
5
More
Frequency
FIGURE 14-1 MCB INTERCEPTS TRUE WIDTH HISTOGRAM (N=238)
True thickness (m)
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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FIGURE 14-2 HWZ INTERCEPTS TRUE WIDTH HISTOGRAM (N=130)
120%
25
100%
20
Frequency
80%
15
60%
10
40%
5
20%
0%
More
25
23
21
19
17
15
13
11
9
7
5
3
1
0
True thickness (m)
The resource wireframes were trimmed at the property boundary, license of occupation
contours, clipped with the dyke solids, and the resulting solid was then trimmed to
vertical 16 m below the topographic surface to account for a crown pillar.
BASIC STATISTICS AND CAPPING OF HIGH ASSAYS
The resource estimate was based on a total of 238 drill holes which intersected the MCB
and the HWZ. These comprise 170 drill holes drilled by Pele Mountain from 2006 to
2011, and 68 historic drill holes drilled from 1954 to 1974.
Descriptive statistics of the MCB resource assays are shown in Table 14-3. The HWZ
resource assays are shown in Table 14-4. RPA did not consider it necessary to cap the
assays based on relatively low coefficients of variation across the board. Uranium has
the highest coefficient of variation among all the elements, with a value of less than 1.1,
in both MCB and HWZ. Percentile analysis for U3O8, Nd, and Dy, the three largest
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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contributors to the revenue and providing in excess of 60% of the net value, indicated
that capping of high grades was not required. As more data becomes available, the
necessity for high grade capping should be investigated.
Figures 14-3 show the resource assays histograms for U3O8, Dy (from the heavy REE
group) and Nd (from the light REE group), respectively.
TABLE 14-3 RARE EARTH AND OTHER ELEMENTS - MCB RESOURCE
ASSAYS DESCRIPTIVE STATISTICS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Element
Mean
Median
U3O8
(%)
0.046
Th
(ppm)
326.51
La
(ppm)
330.09
Ce
(ppm)
599.37
Pr
(ppm)
61.18
Nd
(ppm)
202.94
Sm
(ppm)
34.80
Eu
(ppm)
1.93
Gd
(ppm)
23.18
0.033
289
296
534
53.9
178
30.6
1.7
20.6
Minimum
0
1.8
1.7
5.2
1
4.2
0.9
0.09
0.78
Maximum
1.021
1,420
2,270
3,820
401
1,340
261
18.7
196
St. Dev.
0.05
226.86
222.90
418.22
43.96
145.70
25.03
1.34
16.48
C of V
1.08
0.70
0.68
0.70
0.72
0.72
0.72
0.69
0.71
Count
2,161
1,937
1,937
1,937
1,937
1,937
1,937
1,937
1,937
Tb
(ppm)
3.14
Dy
(ppm)
14.91
Ho
(ppm)
2.53
Er
(ppm)
6.23
Tm
(ppm)
0.85
Yb
(ppm)
4.85
Lu
(ppm)
0.66
Y
(ppm)
61.67
Sc
(ppm)
3.70
Median
2.7
12.6
2.19
5.3
0.74
4.2
0.58
53
3.1
Minimum
0.1
0.7
0.1
0.38
0.05
0.4
0.06
3
0.25
Maximum
30.9
161
28.2
71.8
9.23
52
6.22
627
43
St. Dev.
2.31
11.22
1.88
4.67
0.62
3.54
0.46
44.76
2.53
C of V
0.74
0.75
0.74
0.75
0.74
0.73
0.70
0.73
0.68
Count
1,937
1,937
1,937
1,937
1,758
1,937
1,758
1,937
1,935
Element
Mean
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-7
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-4 RARE EARTH AND OTHER ELEMENTS - HWZ RESOURCE
ASSAYS DESCRIPTIVE STATISTICS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Element
Mean
Median
U3O8
(%)
0.013
Th
(ppm)
171.29
La
(ppm)
183.73
Ce
(ppm)
329.47
Pr
(ppm)
33.18
Nd
(ppm)
110.68
Sm
(ppm)
18.48
Eu
(ppm)
1.01
Gd
(ppm)
11.64
0.009
134
146
258
25.9
86
14.2
0.81
8.95
Minimum
0
4.3
4.6
9.9
1.26
5.5
1.3
0.09
0.8
Maximum
0.179
1,620.00
1,710.00
3,000.00
306.00
1,070.00
189.00
9.44
103.00
0.01
153.37
150.85
282.58
28.98
98.51
16.89
0.81
10.06
St. Dev.
C of V
1.06
0.90
0.82
0.86
0.87
0.89
0.91
0.80
0.86
Count
1,411
1,401
1,401
1,401
1,401
1,401
1,401
1,401
1,401
Tb
(ppm)
1.45
Dy
(ppm)
6.59
Ho
(ppm)
1.10
Er
(ppm)
2.81
Tm
(ppm)
0.37
Yb
(ppm)
2.24
Lu
(ppm)
0.33
Y
(ppm)
29.70
Sc
(ppm)
3.15
Median
1.1
5.2
0.9
2.2
0.3
1.8
0.27
24
3
Minimum
0.1
0.5
0.05
0.3
0.03
0.2
0.02
3
1
Maximum
12.60
56.40
8.80
21.80
2.77
16.10
2.20
224.00
41.00
1.25
5.58
0.91
2.24
0.29
1.66
0.23
23.60
2.23
Element
Mean
St. Dev.
C of V
0.87
0.85
0.83
0.80
0.78
0.74
0.70
0.80
0.71
Count
1,401
1,401
1,401
1,401
1,350
1,401
1,350
1,401
1,401
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-8
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-3 U3O8, DY, AND ND ASSAY HISTOGRAMS - MCB AND HWZ
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-9
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
COMPOSITING
RPA composited the assays in the two mineralized domains, MCB and HWZ. Inside the
MCB, full intercept composites were used. For the HWZ, the assays were composited in
one metre fixed length composites, starting from collar, and preserving the orphans. The
assays were weighted by sample length. The composites were used for the mineral
resource estimate.
Descriptive statistics of the composites in the MCB and in the HWZ are shown in Table
14-5 and Table 14-6, respectively. Histograms of the U3O8, Nd, and Dy composited
grades for the MCB and the HWZ are shown in Figure 14-4.
TABLE 14-5 RARE EARTH AND OTHER ELEMENTS - MCB RESOURCE
COMPOSITES DESCRIPTIVE STATISTICS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
U3O8
(%)
0.046
Th
(ppm)
333.48
La
(ppm)
334.17
Ce
(ppm)
607.42
Pr
(ppm)
61.46
Nd
(ppm)
203.65
Sm
(ppm)
34.99
0.043
325.06
335.26
620.98
63.08
206.54
Minimum
0
156.26
8.36
22.18
3.68
16.6
Maximum
Element
Mean
Median
Eu
(ppm)
1.95
Gd
(ppm)
23.88
35.2
1.93
23.31
6.3
1.05
7.35
50.94
0.118
685.06
583.37
1,041.90
115.44
350.29
62.44
3.31
St. Dev.
0.02
87.30
98.27
179.10
18.80
59.46
9.87
0.44
7.00
C of V
0.40
0.26
0.29
0.30
0.31
0.29
0.28
0.23
0.29
Count
238
163
163
163
163
163
163
163
163
Tb
(ppm)
3.22
Dy
(ppm)
15.16
Ho
(ppm)
2.59
Er
(ppm)
6.38
Tm
(ppm)
0.87
Yb
(ppm)
4.95
Lu
(ppm)
0.68
Y
(ppm)
62.68
Sc
(ppm)
4.01
Median
3.19
14.91
2.52
6.26
0.84
4.84
0.65
62.36
3.59
Minimum
1.16
5.84
1.27
2.52
0.42
1.87
0.32
23.43
2.07
Maximum
6.78
29.67
5.03
13.36
1.55
9.49
1.20
112.43
18.59
St. Dev.
0.93
4.21
0.67
1.79
0.21
1.34
0.16
16.95
2.21
C of V
0.29
0.28
0.26
0.28
0.24
0.27
0.24
0.27
0.55
Count
163
163
163
163
143
163
143
163
163
Element
Mean
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-10
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-6 RARE EARTH AND OTHER ELEMENTS - HWZ RESOURCE
COMPOSITES DESCRIPTIVE STATISTICS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Element
Mean
Median
U3O8
(%)
0.011
Th
(ppm)
151.07
La
(ppm)
163.55
Ce
(ppm)
292.05
Pr
(ppm)
29.45
Nd
(ppm)
97.32
Sm
(ppm)
16.12
Eu
(ppm)
0.90
Gd
(ppm)
10.44
0.01
140.655
150.72
269.525
27.17
90
15.015
0.85
9.65
Minimum
0
4.3
5.39
11.75
1.5
6.51
1.7
0.12
1.1
Maximum
0.047
524.31
518.44
949.00
94.10
323.00
54.40
3.07
35.60
St. Dev.
0.01
76.43
76.96
144.20
14.75
49.00
8.27
0.40
5.22
C of V
0.55
0.51
0.47
0.49
0.50
0.50
0.51
0.45
0.50
Count
991
986
986
986
986
986
986
986
986
Tb
(ppm)
1.30
Dy
(ppm)
5.84
Ho
(ppm)
0.98
Er
(ppm)
2.51
Tm
(ppm)
0.33
Yb
(ppm)
2.02
Lu
(ppm)
0.29
Y
(ppm)
26.61
Sc
(ppm)
3.15
1.2
5.5
0.91
2.4
0.31
1.9
0.28
25
3
0.1
0.7
0.1
0.3
0.01
0.3
0.01
4
0.32
4.61
20.29
3.27
7.90
1.03
6.03
0.86
84.99
41.00
0.65
2.73
0.45
1.11
0.15
0.83
0.12
11.82
2.57
0.50
0.47
0.46
0.44
0.45
0.41
0.41
0.44
0.82
986
986
986
986
968
986
968
986
986
Element
Mean
Median
Minimum
Maximum
St. Dev.
C of V
Count
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-11
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-4 U3O8, DY, AND ND COMPOSITE HISTOGRAMS - MCB AND
HWZ
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-12
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
CUT-OFF GRADE
RPA used a net smelter return (NSR) cut-off value for the Mineral Resources. The
assumptions used for calculating the NSR value include the following:

Uranium price of $70 per lb U3O8

Rare earth basket price of $78 per kg REO
o
Net of separation costs of $10 per kg for LREO and $30 per kg for HREO

Exchange rate of C$1.00 = US$1.00

Metallurgical recoveries of 85% for uranium and rare earths (50% for scandium)

NSR royalty of 0.75%
A net value (in $ per tonne) was calculated for each block in the model, using the grades
as inputs and the assumptions above.
This value was compared to operating cost
assumptions to determine which blocks to include in the Mineral Resource and which
blocks to exclude.
An operating cost of $100 per tonne was assumed for the MCB, for room and pillar
mining, and full process and G&A costs. The MCB wireframe was drawn at the limit of
$100 per tonne NSR values, so by definition, entirely above cut-off.
An operating cost of $50 per tonne was used for the HWZ, on the assumption that bulk
mining methods could be applied, and/or the HWZ could be mined as an incremental
addition to the MCB, and need not bear the full operating cost.
Both the assumptions above and the operating costs differ slightly from those used in
the cash flow presented in this report, due to additional information becoming available
between the time of resource estimation and the time of PEA completion.
VARIOGRAPHY AND TREND ANALYSIS
Variograms were prepared for the MCB and HWZ using the U3O8%, Nd, and Dy full
intercepts.
The omnidirectional variograms shown in Figures 14-5 and 14-6 are
essentially 2D variograms in the plane of the mineralization. The variograms indicated
ranges between 375 m and 450 m for both the MCB and the HWZ for the three
commodities investigated. The nugget effect values were relatively high for the MCB,
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-13
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
generally above 50% of the sill value in the MCB, and for the HWZ the nugget effect
values tended to be lower.
Directional variograms are generally sensitive to minor
variations of the orientation and lag, which may be indicative of insufficient sampling or
the need to define smaller domains within the resource wireframe.
The U3O8%, Nd, and Dy grade contours (Figures 14-7, 14-8, and 14-9) indicated that the
eastern and central part of the MCB wireframe might represent two separate domains.
The area in the central part of the MCB displayed a NNW-SSE (approximately 155°)
oriented trend, while the eastern part displayed a WNW-ESE (approximately 120°)
oriented trend.
The necessity for subdomaining should be investigated when more
drilling at closer spacing becomes available. Within the HWZ, with a higher variation of
the true thickness and based on a smaller number of intercepts, no clear trends of grade
continuity were identified.
The two directions of continuity identified in the MCB represent relatively small
deviations from the documented regional paleocurrent NW direction (135°) (Fralick and
Miall, 1989). Further analysis performed on the two MCB domains with approximate
trends of 155° and 120° did not yield good variograms, mainly because of the reduction
in available composites.
Consequently, the inverse distance squared algorithm was
used for interpolation of uranium and REE grades. The search ellipses were oriented
towards 135° for grade interpolation in both the MCB and the HWZ.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-14
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-5 MCB INTERCEPTS VARIOGRAPHY FOR U3O8, ND, AND DY
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-15
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-6 HWZ INTERCEPTS VARIOGRAPHY FOR U3O8, ND, AND DY
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-16
Technical Report NI 43-101 – June 20, 2012
382,000 E
383,000 E
384,000 E
385,000 E
5,140,000 N
5,140,000 N
381,000 E
Resource Outline
0
.
0
3
5,139,000 N
0. 04
5,139,000 N
0. 05
0. 05
0.
04
0. 05
3
0. 0
0. 0
4
0. 03
04
2
0. 0
5
0
0.
0. 0 5
0. 05
5
.0
.0
4
0
0
0.
0. 0 4
05
05
0
.0
5
0
0
3
0
0.
0
0 2
0 .
0. 03
0. 0
4
0.
05
0.
04
5
02
0
0.
4
5
0
0
0 .
0
.
0.
0.
0. 03
5
0. 0
04
0 4
02
04
5
0. 0
. 0
2
0.
0.
0
0 . 04
.0
5
0.
0
3
4
0. 0
0
0. 0
5
0
0.
03
00. 3
.
0.
04
0
0. 04
02
0.
05
0.
0.
. 0
0. 04
4
0 3
0.
. 05
0
3
4
0. 02
0.
4
0. 0
3
0. 0
03
0.
0.0
3
5,138,000 N
04
05
04
0.
0 4
0 5
0.
0.
04
0.
0.
0.
04
0.
0. 05
. 04
04
.
4
0. 0
. 0 4
0
.
.0
4
0.
05
0. 0 5
.0
4
05
0. 05
0.
0
0.
0 . 0
0.
04
03
. 0
5
0
0.
03
0.
0
0.
0
0. 04
05
0.
5
0. 03
0.
0 5
5,138,000 N
04
4
0. 0
.0
4
04
5
3
0. 0
05
0
0. 04
04
0. 04
0.
04
0.
0 . 05
14-17
03
0.
0 . 03
0
0 4
0.
0.
03
0
. 0 5
0. 03
0.
0.
03
0.
0.
0.
4
0. 0
0 2
0 5
04
0.
0. 0 5
0. 0 2
0. 03
0
. 0
3
0
5,137,000 N
3
. 0
< 0.02
0.02 - 0.03
0.03 - 0.04
0.04 - 0.05
> 0.05
June 2012
0
200
400
600
Metres
800
1000
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Main Conglomerate Bed
U3 O 8% Composites
Grade Contours
www.rpacan.com
U3 O 8 % Within Resource Boundary
5,137,000 N
Figure 14-7
Legend:
382,000 E
383,000 E
384,000 E
385,000 E
5,140,000 N
5,140,000 N
381,000 E
Resource Outline
15
0
100
5,139,000 N
100
5,139,000 N
0
15
5 0
2
00
15
0
10
0
0
15
250
0
10
2
0
0
25
1
15
0
5
0
0
2
25
0
00
2
00
20
0
0
15
200
0
15
25
0
2 00
200
3
50
0
0
0
1
100
25
10
2 00
50
10
15
0
0
2
20
0
0
2
0
2
2
200
5
2 50
0
30 0
20
50
0
0 0
2
200
2
0
5 0
5
0
25
1
15
0
0
150
10
150
0
200
0
250
20
10
200
0
25
0
5
0
Figure 14-8
Legend:
Pele Mountain Resources Inc.
Eco Ridge Mine Project
50 - 100
100 - 150
150 - 200
200 - 250
>250
June 2012
Elliot Lake, Ontario, Canada
0
200 400
600
Metres
800 1000
Main Conglomerate Bed
Neodymium (Nd) (ppm)
Composites Grade Contours
www.rpacan.com
Nd (ppm) Within Resource Boundary
0 - 50
5,137,000 N
5,137,000 N
150
1
5
0
20
0
0
150
20
1
0
5
20
0
25
100
150
0
0
15
0
100
250
0
300
50
0
200
200
25
5,138,000 N
0
1
3
0
0
200
15
0
200
0
15
2
00
10
0
150
200
0
00
20
25
20
0
0
20
5,138,000 N
20
250
200
0
14-18
200
382,000 E
383,000 E
384,000 E
385,000 E
5,140,000 N
5,140,000 N
381,000 E
15
5,139,000 N
5,139,000 N
Resource Outline
15
1 0
20
1 0
1
5
10
10
15
1
15
20
5
15
20
5
1
15
15
14-19
15
15
20
15
10
1
15
15
1
5
5
15
20
2 0
15
5
15
20
25
2
15
5
20
1
15
2 0
15
15
10
5
20
5
1 5
5
25
10
1
5
1
1
5
15
10
10
15
10
10
15
10
1 0
5
10
Figure 14-9
Dy (ppm) Within Resource Boundary
<5
10
15
20
> 25
June 2012
0
200
400
600
Metres
800
1000
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Main Conglomerate Bed
Dysprosium (Dy) (ppm)
Composites Grade Contours
www.rpacan.com
Legend:
5,137,000 N
5,137,000 N
10
0
10
15
5,138,000 N
15
5
5,138,000 N
1 5
20
10
1
www.rpacan.com
BLOCK MODEL AND GRADE ESTIMATION
A block model extending beyond the limits of the modeled MCB wireframe was set up in
Gemcom GEMS. The block sizes were 25 m east-west by 25 m north-south by 3 m
vertical.
The MCB and HWZ resource wireframes were used to flag the resource blocks and also
to establish the percent of each block inside the wireframe. Table 14-7 lists the block
model characteristics.
TABLE 14-7 BLOCK MODEL SETUP
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Element
Origin
Block size
Block count
X (m)
378412.5
25
324
Y (m)
5137012.5
25
152
Z (m)
500
3
300
The interpolation method used for the resource estimate was Inverse Distance squared,
performed in three passes, with an ellipsoidal search having its long axis oriented
towards 135°.
The search ellipse characteristics and sample selection strategy are
presented in Table 14-8.
TABLE 14-8 SEARCH STRATEGY PARAMETERS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Zone
MCB
HWZ
Ellipse
Z
X
Z
Pass 1
Anisotropy
X
Y
Z
(m) (m) (m)
150 100
50
Rotation about
Sample selection
Min
Max
Max per
sample sample drill hole
2
12
1
5°
-20°
120°
Pass 2
300
200
100
5°
-20°
120°
2
12
1
Pass 3
600
400
200
5°
-20°
120°
1
12
1
Pass 1
150
100
10
5°
-20°
120°
2
12
3
Pass 2
300
200
20
5°
-20°
120°
2
12
3
Pass 3
600
400
80
5°
-20°
120°
1
12
3
For each resource block, the interpolated REE values were transformed into their
respective oxide grade and summed to suit the need for reporting light rare earth oxides,
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-20
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
heavy rare oxides including yttrium oxide and scandium oxide, as well as total rare earth
oxides.
The tonnage estimate was based on a density of 2.7 g/cm3. This is the same factor
used by Rio Algom for its “ore estimates”, as outlined in the description of Rio Algom’s
estimation methods in Hart and Sprague (1968), and used by Sprague (1965), as well as
in previous RPA estimates.
BLOCK MODEL VALIDATION
The interpolated block grades were visually compared with the grades of the
composites, both in plan and on vertical section.
The U3O8% grade was also interpolated using the Nearest Neighbour method, rendering
similar grades.
In the opinion of RPA, the block model is a reasonable representation of the tonnage
and grade of the MCB and of the HWZ uranium and rare earth mineralization of the Eco
Ridge Mine Project.
A plan view of the resource block model is shown in Figure 14-9.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-21
Technical Report NI 43-101 – June 20, 2012
382,000 E
383,000 E
384,000 E
385,000 E
5,140,000 N
5,140,000 N
381,000 E
5,139,000 N
5,139,000 N
Resource Outline
June 2012
Pele Mountain Resources Inc.
0
200
400
600
Metres
800
1000
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Resource Blocks in
Main Conglomerate Bed
www.rpacan.com
NSR 2012
0 - 30
30 - 50
50 - 70
70 - 100
100 - 150
150 - 200
>200
5,137,000 N
5,137,000 N
5,138,000 N
5,138,000 N
14-22
Figure 14-10
Legend:
382,000 E
383,000 E
384,000 E
385,000 E
5,140,000 N
5,140,000 N
381,000 E
5,139,000 N
5,139,000 N
Resource Outline
June 2012
Pele Mountain Resources Inc.
0
200
400
600
Metres
800
1000
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Resource Blocks in
Hanging Wall Zone
www.rpacan.com
NSR 2012
0 - 30
30 - 50
50 - 70
70 - 100
100 - 150
150 - 200
>200
5,137,000 N
5,137,000 N
5,138,000 N
5,138,000 N
14-23
Figure 14-11
Legend:
www.rpacan.com
CLASSIFICATION
The uranium and REE mineralization at Eco Ridge is hosted in the MCB and the HWZ.
For both the MCB and the HWZ, the continuity between holes is excellent. The true
thickness displays less variation for the MCB than for the HWZ, as shown by the
histograms of the intercepts in Figures 14-1 and 14-2. The omnidirectional variograms
for uranium, neodymium, and dysprosium in both MCB and HWZ displayed ranges
between 375 m and 450 m.
Therefore, the Mineral Resources were classified as
Indicated using a maximum drill hole spacing of 200 m. For the Indicated Resources,
the MCB average drill hole spacing was 115 m, while for the HWZ the average spacing
was 140 m.
The remaining Mineral Resources are classified as Inferred. For the Inferred Resources
drill hole spacing averages 320 m for MCB and 510 for HWZ. This takes into account
the continuous structure of the mineralization and concurs with past practice in the Elliot
Lake district.
The current mineral resource estimate is listed in Indicated and Inferred categories in
Table 14-9. The grade of individual rare earth oxides and related oxides, as well as
LREO, HREO, and TREO, are presented in Table 14-10.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-24
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-9 SUMMARY OF MINERAL RESOURCES – APRIL 16, 2012
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Tonnes
U3O8
U3O8
LREO
HREO
TREO
TREO
(000)
(%)
(000 lbs)
(ppm)
(ppm)
(ppm)
(000 lbs)
MCB
20,514
0.045
20,447
1,426
193
1,618
73,184
HWZ
28,223
0.012
7,214
733
88
821
51,111
Total
48,737
0.026
27,661
1,025
132
1,157
124,295
MCB
16,906
0.043
15,940
1,279
183
1,463
54,515
HWZ
20,956
0.013
5,822
713
95
808
37,329
Total
37,863
0.026
21,762
966
134
1,100
91,843
Zone &
Classification
Indicated
Inferred
Notes:
1.
2.
3.
4.
8.
5.
CIM definitions were followed for Mineral Resources.
Mineral Resources were estimated at a cut-off value of $100 per tonne for the MCB, and $50 per
tonne for the HWZ. Values were calculated based on prices and recoveries of uranium and rare
earths, net of off-site rare earth separation costs.
Mineral Resources were estimated using an average uranium price of US$70 per lb U3O8, a rare
earth “basket price” of $78 per kg (net of separation charges), and a C$:US$ exchange rate of
1.00:1.00.
A minimum mining thickness of 1.8 m was used for the MCB.
Light Rare Earth Oxides include La2O3, CeO2, Pr6O11, and Nd2O3.
Heavy Rare Earth Oxides include Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3,
Yb2O3, Y2O3, and Lu2O3. Sc2O3 is also included in HREO, as it occurs in low concentrations and
carries high unit values like an HREO.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-25
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-10 MINERAL RESOURCE ESTIMATE - APRIL 16, 2012 - RARE
EARTH OXIDES AND RELATED OXIDES
Pele Mountain Resources Inc. – Eco Ridge Mine Project Notes:
1.
2.
3.
4.
9.
5.
Indicated Category
MCB
HWZ
Inferred Category
MCB
HWZ
Tonnage
(000)
20,514
28,223
16,906
20,957
U3O8%
0.0452
0.0116
0.0428
0.0126
ThO2%
0.0366
0.0178
0.0354
0.0185
La2O3%
0.0386
0.0200
0.0346
0.0194
CeO2%
0.0731
0.0376
0.0657
0.0365
Pr6O11%
0.0073
0.0037
0.0066
0.0037
Nd2O3%
0.0235
0.0120
0.0212
0.0117
Sm2O3%
0.0040
0.0020
0.0037
0.0020
Eu2O3%
0.0002
0.0001
0.0002
0.0001
Gd2O3%
0.0027
0.0012
0.0025
0.0013
Tb4O7%
0.0004
0.0002
0.0004
0.0002
Dy2O3%
0.0017
0.0007
0.0016
0.0008
Ho2O3%
0.0003
0.0001
0.0003
0.0001
Er2O3%
0.0007
0.0003
0.0007
0.0003
Tm2O3%
0.0001
0.0000
0.0001
0.0000
Yb2O3%
0.0006
0.0002
0.0005
0.0003
Lu2O3%
0.0001
0.0000
0.0001
0.0000
Y2O3%
0.0079
0.0035
0.0074
0.0038
Sc2O3%
0.0006
0.0005
0.0009
0.0006
LREO%
HREO%
TREO%
0.1426
0.0193
0.1618
0.0733
0.0088
0.0821
0.1280
0.0183
0.1463
0.0713
0.0095
0.0808
CIM definitions were followed for Mineral Resources.
Mineral Resources were estimated at a cut-off value of $100 per tonne for the MCB, and $50 per
tonne for the HWZ. Values were calculated based on prices and recoveries of uranium and rare
earths, net of off-site rare earth separation costs.
Mineral Resources are estimated using an average uranium price of US$70 per lb U3O8, a rare
earth “basket price” of $78 per kg (net of separation charges), and a C$:US$ exchange rate of
1.00:1.00.
A minimum mining thickness of 1.8 m was used for the MCB.
Light Rare Earth Oxides include La2O3, CeO2, Pr6O11, and Nd2O3.
Heavy Rare Earth Oxides include Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3,
Yb2O3, Y2O3, and Lu2O3. Sc2O3 is also included in HREO, as it occurs in low concentrations and
carries high unit values like an HREO.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-26
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
SENSITIVITY ANALYSIS
The Mineral Resources in the MCB were moderately sensitive to the cut-off value in the
$80 to $110 NSR range, and became sensitive for higher NSR values in both Indicated
and Inferred Resources. In the HWZ, for both Inferred and Indicated categories, the
Mineral Resources were sensitive to NSR cut-off values.
The tonnage and TREO
grades for various NSR cut-off values are presented in Table 14-11 and Figure 14-12 for
Indicated Resources, and in Table 14-12 and Figure 14-13 for Inferred Resources.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-27
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-11 INDICATED RESOURCE – TONNAGE AND TREO%
GRADE AT VARIOUS NSR CUT-OFF VALUES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
MCB Indicated
Cut-off NSR value
Tonnage
($/t)
(000)
0
21,104
10
21,104
20
21,104
30
21,104
40
21,104
50
21,104
60
21,104
70
21,104
80
21,092
90
20,939
100
20,514
110
19,768
120
18,500
130
16,379
140
13,657
150
10,262
TREO
(%)
0.160
0.160
0.160
0.160
0.160
0.160
0.160
0.160
0.160
0.161
0.162
0.164
0.167
0.172
0.177
0.184
HWZ Indicated
Cut-off NSR value
Tonnage
($/t)
(000)
0
37,992
10
37,992
20
37,958
30
37,680
40
35,908
50
28,223
60
15,300
70
4,585
80
1,236
90
297
100
75
110
8
120
130
140
150
-
TREO
(%)
0.075
0.075
0.076
0.076
0.077
0.082
0.090
0.102
0.112
0.121
0.130
0.141
0.000
0.000
0.000
0.000
TABLE 14-12 INFERRED RESOURCE – TONNAGE AND TREO%
GRADE AT VARIOUS NSR CUT-OFF VALUES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
MCB Inferred
Cut-off NSR value
Tonnage
($/t)
(000)
0
17,679
10
17,679
20
17,679
30
17,679
40
17,679
50
17,679
60
17,679
70
17,679
80
17,679
90
17,616
100
16,906
110
16,156
120
13,291
130
11,468
140
9,651
150
7,356
TREO
(%)
0.144
0.144
0.144
0.144
0.144
0.144
0.144
0.144
0.144
0.144
0.146
0.148
0.160
0.167
0.172
0.178
HWZ Inferred
Cut-off NSR value
Tonnage
($/t)
(000)
0
27,082
10
27,082
20
27,082
30
27,007
40
26,082
50
20,957
60
12,278
70
6,164
80
2,565
90
1,320
100
212
110
26
120
2
130
140
150
-
TREO
(%)
0.075
0.075
0.075
0.075
0.076
0.081
0.092
0.103
0.118
0.124
0.141
0.151
0.173
0.000
0.000
0.000
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-28
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-12 GRADE –TONNAGE CURVES OF INDICATED RESOURCE
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-29
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 14-13 GRADE –TONNAGE CURVES OF INFERRED RESOURCE
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-30
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
COMPARISON WITH PREVIOUS MINERAL RESOURCE
ESTIMATE
The Mineral Resource estimates for the Eco Ridge Mine Project reported in the 2007
Scott Wilson RPA Preliminary Assessment and in the 2011 RPA Technical Report are
compared with the current 2012 estimate in Table 14-13.
TABLE 14-13 MINERAL RESOURCE COMPARISON – 2007 TO 2012
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Resource
Kt
% U3O8
% TREO
2007 Indicated
2007 Inferred
5,681
37,262
0.051
0.044
-
2011 Indicated
2011 Inferred
14,312
33,121
0.048
0.043
0.164
0.132
2012 Indicated
2012 Inferred
48,737
37,863
0.026
0.026
0.116
0.110
The increase in Mineral Resource from 2007 to 2011 was based on new drilling north
(down-dip) of the previous resource estimate. The REOs were also included in the 2011
Mineral Resource. The main evolution reflected in the 2012 Mineral Resource is the
addition of the HWZ, along with the inclusion of new exploration drill holes north of 2011
resource. The 2012 Mineral Resource represents an increase of approximately three
times in the Indicated Resource category and a slight increase in the Inferred category.
The addition of lower grade HWZ material in the current estimate led to an overall
decrease for U3O8 and TREO grades for both the Indicated and Inferred categories
compared to the 2011 estimate, however, the MCB grades in the 2012 estimate (Table
14-9) are similar to those in the MCB only 2011 estimate.
EXPLORATION POTENTIAL OF ADDITIONAL RESOURCES
ON THE PROPERTY
MAIN CONGLOMERATE BED AND HANGING WALL ZONE
There is additional exploration potential to expand the MCB and HWZ down dip towards
north and northwest. Historical drilling has indicated that the conglomerate bed and the
uranium mineralization continue, but no REE assay data is available to support the
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-31
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
expansion of the resource wireframes. Uranium-only assays available for the historical
drill holes were focused on the first few metres above the base of the conglomerate,
which differs from the current sampling strategy that spans approximately 20 m above
the conglomerate base. The location of the historical drill holes outside current resource
wireframes is shown in Figure 14-14.
Ten historic (uranium-only) drill holes that were used in the 2007 and 2011 resource
estimates, focused on the MCB, were not included in the current estimate. Table 14-14
shows the list of drill holes and the U3O8% grade of the intercepts. These are located
north and northwest of the western edge of the current resource wireframes (Figure 1414).
TABLE 14-14 HISTORIC DRILL HOLES NOT INCLUDED IN
THE 2012 RESOURCE ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Hole
C-PA-24
CB-13
CB-15
CB-17
CB-20
CB-21
CB-22A
CB-23
CB-30
CB-34
From
To
Length
(m)
(m)
(m)
498.6528
393.3444
515.4168
593.4456
549.2496
423.5196
576.9864
592.5312
356.70744
588.05064
502.0056
397.79448
519.3792
596.9508
552.6024
427.3296
580.0344
595.7316
359.78592
590.8548
3.36
4.45
3.96
3.5
3.35
3.81
3.04
3.2
3.08
2.8
%U3O8
0.0263
0.032
0.051
0.0253
0.06
0.0564
0.04
0.04
0.0518
0.044
Another four historic drill holes located farther to the north and northwest demonstrate
the presence of conglomerate beds and uranium mineralization. The drill hole 143-3 is
located approximately 14.8 m above the basement contact, which is consistent with the
location of the MCB up-dip within the portion of the deposit containing the estimated
Mineral Resource. Additional thin mineralized conglomerate beds are located above the
MCB, which correlates with the upper conglomerate beds. The MCB in drill hole CB-35
is located approximately 15.6 m above the basement contact. Again, the location is
consistent with the position of this bed throughout the deposit. Drill hole Z-5-1 reported
a coarse-grained quartzite and conglomerate intersection from 726.3 m to 729.9 m (3.6
m). Although no samples were taken and no radioactivity was specifically mentioned,
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-32
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
there was a reference to “slightly radioactive in spots” in the interval from 712.9 m to
770.5 m. Drill hole Z-5-2 reported a “quartzite-pebble conglomerate” from 888.4 m to
894.8 m (6.4 m) with pyrite, pyrrhotite and radioactivity. The section was sampled from
889.0 m to 892.7 m. The drill holes are listed in Table 14-15 and the locations of the
holes are shown in Figure 14-14.
TABLE 14-15 HISTORIC DRILL HOLES DEMONSTRATING THE
DOWN-DIP POTENTIAL OF THE MAIN CONGLOMERATE BED
Pele Mountain Resources Inc. – Eco Ridge Mine Project
CB-35
From
(m)
903.32
To
(m)
908.50
Length
(m)
5.18
143-3
860.71
865.58
4.87
Z-5-2
888.4
894.8
6.40
Z-5-1
726.3
729.9
3.60
Hole
%U3O8
Comments
0.044
Log
0.027
Log
Sampled from 899.0 to 892.7
Analyses Not Available
Conglomerate – Not Sampled
In addition, the drilling on the eastern portion of the original Pecors Claim Block
intersected mineralization in the MCB. The drill hole logs and sample intervals are not
available, but several sections showing the drill holes were found, indicating the location
of the MCB, the thickness and the uranium assays. The MCB is located about 10 m to
15 m above the underlying metavolcanics demonstrating the correlation of the bed with
the MCB from the other drilling programs. These drill holes are listed in Table 14-16 and
the thickness of the MCB that was sampled and analyzed is shown.
The average
thickness of the portion of the MCB that was analyzed is 1.54 m and the average grade
based on the historical analyses is 0.041% U3O8. The locations of these holes are also
shown on Figure 14-14.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-33
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 14-16 HISTORIC DRILLING RESULTS FROM THE
PECORS LAKE BLOCK
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Hole
PW-115
PW-114
PW-113
PW-112
PW-111
PW-110
PW-109
PW-108
PW-107
PW-106
PW-105
PW-104
PW-103
PW-102
PW-101
Average
From
(m)
78,48
81.23
75.28
32.92
80.46
76.66
61.26
73.15
88.09
89.76
77.11
111.25
112.62
105.61
92.05
71.32
59.13
To
(m)
80.00
82.75
77.42
34.68
82.90
78.64
62.94
74.17
89.76
91.44
78.18
112.62
114.00
107.90
93.27
73.00
60.35
Thickness
(m)
1.52
1.52
2.14
1.72
2.44
1.98
1.68
1.22
1.68
1.68
1.07
1.37
1.37
2.29
1.22
1.68
1.22
1.54
%U3O8
0.050
0.057
0.030
0.059
0.034
0.041
NA
0.024
0.014
0.063
0.033
0.018
0.046
0.047
0.053
0.043
0.038
0.041
Comments
0.3 m not sampled
NA – Analysis Not Available
EXPLORATION POTENTIAL
As noted above, historic drilling has intersected the MCB down dip from the current
Mineral Resource and to the east in the resource wireframes.
The widths of the
intersections of the MCB in these holes and the % U3O8 are shown in Tables 14-14, 1415, and 14-16.
A target for further exploration was estimated for the areas where the historical drilling
had demonstrated the presence of mineralized MCB (Figure 14-15).
A polygonal
method was used based on the thickness of the intersections of the MCB, uranium
grades in Tables 14-15 and 14-16, typical TREO grades, and a specific gravity of 2.7. It
was estimated that these areas could contain a further 40 Mt to 60 Mt in an exploration
target grading from 0.030% U3O8 to 0.050% U3O8, accompanied by 0.12% TREO to
0.18% TREO for the MCB.
There is insufficient drill hole information for the HWZ
outside the current resource wireframes; however, the length of some of the historical
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-34
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
intercepts with demonstrated uranium mineralization suggests that lower grade
mineralization might continue above the MCB, hence the HWZ might be present.
The potential quantities and grades of the exploration targets are conceptual in nature
and there has been insufficient drilling to define a Mineral Resource. It is uncertain if
further exploration will result in the definition of a Mineral Resource in these areas.
EXPLORATION OF THE BASAL CONGLOMERATE BED
Based on the results to date, the higher-grade mineralization in the BCB is contained
near permeable zones in the MCB, and is associated with the presence of pyrite and
pyrrhotite.
For further exploration in the BCB, key exploration parameters for this style of
mineralization appear to be:

The presence of thicker sections of the MCB.

The presence of permeable zones within the MCB that allowed fluids carrying
uranium, possibly leached from the overlying sediments, to flow.

The presence of pyrite or other sulphide minerals to react with the fluids and
deposit the uranium. (Mineralogical assessments indicate that the sulphide
minerals in the BCB consist of a much higher percentage of pyrrhotite than
found in the MCB: 16% of the sulphide minerals in the BCB compared to
0.5% of the sulphide minerals in the MCB.)
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 14-35
Technical Report NI 43-101 – June 20, 2012
386,000 E
385,000 E
384,000 E
383,000 E
382,000 E
381,000 E
380,000 E
379,000 E
Z-5-2
N
5,141,000 N
CB-35
143-3
5,140,000 N
Z-5-1
Resource Outline
CB-34
14-36
5,139,000 N
CB-23
CB-17
CB-22A
CB-21
CB-15
C-PA-24
CB-20
CB-13
CB-30
PW-104
PW-102
PW-115
PW-105 PW-103
PW-101
PW-107
PW-113
PW-114
PW-112
PW-115
PW-109
PW-107
PW-111 PW-110 PW-108
PW-115
PW-105
PW-103
PW-104
PW-102
PW-101
PW-106
PW-113
PW-112
PW-111
PW-114
PW-115
PW-107
PW-110
PW-108
5,138,000 N
0
250 500 750 1000
Metres
Figure 14-14
5,137,000 N
Pele Mountain Resources Inc.
Property Boundary
Eco Ridge Mine Project
Resource Outline
5,136,000 N
Historic Drill Hole with Mineralization
Outside Resource Area
Powerline
Road/trail
June 2012
Elliot Lake, Ontario, Canada
Historic Drill Holes with
Mineralized Intersections
Outside the Mineral Resource
www.rpacan.com
Legend:
Property Boundary
Figure 14-15
N
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Property Boundary
Location of the
Exploration Targets
Furth
er Ex
plora
tion P
14-37
Exploration Target
Mineral Resource
otent
ial
Exploration Target
ADIT
Licence of Occupation
Access Roads
June 2012
0
0.5
1.0
1.5
Kilometres
2.0
Mining Land Tenure Source: Ministry of Northern Development and Mines of Ontario,
Provincial Mining Recorder’s Office, Plan G-3254, September 2007.
www.rpacan.com
Lease Boundary
www.rpacan.com
15 MINERAL RESERVE ESTIMATE
Mineral Reserves have not yet been estimated for the Eco Ridge Mine Project.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 15-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
16 MINING METHODS
A number of mining methods have been proposed for the Project by RPA and others.
SELECTED MINING METHOD
The geometry of the mineralized zone can be described as a narrow reef, with a shallow
dip approximately 20° to the north and a plunge of approximately 10° to the north-west.
The mineralized zone is oriented in an easterly direction with a strike and dip length of
approximately 5,700 m and 2,000 m, respectively.
The selected mining method was room and pillar. Both development and production will
be contained within the mineralized zone. The development and production tonnage will
be loaded into trucks and transported to surface for processing.
MINE DEVELOPMENT
The deposit outcrops at the surface along a five-kilometre strike length, at depths
suitable for mine access via decline from surface as opposed to vertical shafts.
Two sets of dual ramps were proposed. The first set will service the eastern portion of
the deposit and the second set will service the western portion. Both ramps will serve as
fresh air intakes as well as service/haulage ways. All the mine access headings will be
driven at 18% on the footwall contact of the reef.
Panel access will be driven off the mine access headings spaced every 300 m. The top
heading will provide access to the mining cell entry. The bottom heading will serve as a
ventilation exhaust way for blasted muck in the stopes below.
See Figure 16-1 for a site layout.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-1
Technical Report NI 43-101 – June 20, 2012
380,000 E
381,000 E
382,000 E
383,000 E
384,000 E
385,000 E
386,000 E
387,000 E
N
Mine Portal
Mill Stockpile
Parking Lot
Proposed Plant Location/Expansion for
Temporary Tailings Cell Separation Plant
Tailings Storage
Facility
Settling Pond
HW
8
Figure 16-1
5,134,000 N
Elliot Lake, Ontario, Canada
0
380,000 E
381,000 E
500
1000
Metres
382,000 E
1500
2000
383,000 E
Site Layout
384,000 E
5,134,000 N
Eco Ridge Project
www.rpacan.com
Pele Mountain Resources Inc.
5,135,000 N
10
5,135,000 N
Y
Pele Mountain Property as of May 2012
Pele Mountain Lease as of 2011
June 2012
Explosive Storage
5,136,000 N
5,136,000 N
Mine Portal
Admin/Dry
Warehouse
Shops
5,137,000 N
16-2
5,137,000 N
5,138,000 N
5,138,000 N
5,139,000 N
5,139,000 N
2012 Mineral Resource Outline
5,140,000 N
5,140,000 N
379,000 E
www.rpacan.com
ROOM AND PILLAR LAYOUT
Each panel will be subdivided into mining blocks. Each block will measure 300 m on
strike by 300 m on dip. Access to the mining block will contain an entry and exit each
connected by a ramp driven at 18% (Figure 16-2).
Ore extraction will be carried out by a series of strike drifts separated by rib pillars
located every 20 m (Figure 16-3).
GEOTECHNICAL
The preliminary assessment of the rock mass based on geotechnical logging of the core
(Kim, 2007) indicates that the rock mass rating is between 75 and 80, which is good to
excellent, depending on groundwater conditions. Based on point load tests, the intact
strength is approximately 210 MPa, similar to the other mines at Elliot Lake. Based on
these measurements, the rock mass conditions at the Pele Mountain Project are
comparable to the conditions encountered at the mines operated previously in the Elliot
Lake area.
PILLAR STABILITY
Pillar design was based on the Elliot Lake Camp’s empirical relationship between pillar
strength and pillar stress (Salamon and Munro (1967) and Hedley (1983)).
The
relationship takes into account pillar widths, pillar height, mining depth, dip of the
orebody, field stresses, and extraction ratio as shown below:
26000
1.1
Where: W
=
pillar width, ft.
H
=
pillar height, ft.
D
=
depth below surface, ft.
α
=
dip of orebody, degrees
R
=
extraction ratio
1
.
.
3000
Horizontal stress is taken as 3,000 psi
Uniaxial strength of a one foot cube as 26,000 psi
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-3
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
Using the above formula and field data, the safety factor for a failed pillar was around
1.0, those that partially failed lie between 1.0 and 1.3, and those that were stable
exceeded 1.5.
EXAMPLE:
At a depth 1,312 ft, a pillar width of 13.1 ft, a seam height of 7 ft dipping at 20 degrees
and extraction of 80 % the factor of safety is calculated to equal 2.7. Therefore, it could
be concluded that the pillar will be stable given the above conditions.
13.1 .
7 .
20° 3000
1 0.80
26000
1.1 1312
20°
21866
1274 350
0.20
2.7
Where: W
=
13.1, ft
H
=
7, ft
D
=
1312, ft
α
=
20, degrees
R
=
80%.
Although further geotechnical testing and analysis is required, this empirical formula
indicates that the current room and pillar configuration will be stable.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-4
Technical Report NI 43-101 – June 20, 2012
X - SECTION
5,140,000 N
1
3
2
4
8
7
6
5
11
10
9
15
14
13
12
18
17
16
N
Division between East and West
Resource Outline
67
5,139,000 N
66
48
33
32
16-5
5,138,000 N
3
101
7
6
5
102
104
103
9
106
105
10
107
28
27
26
11
108
12
109
13
110
29
30
14
111
15
112
386,000 E
100
4
8
89
88
East Main Ramp
Stone Access Ramp
43 Panel Access Ramp
42
41
44
385,000 E
2
20
19
18
17
21
25
24
23
22
40
39
38
37
36
35
34
52
51
50
49
160
91
56
55
54
53
87
86
West Main Ramp
5,137,000 N
Pele Mountain Property Boundary
0
250
500
Figure 16-2
750 1000
Pele Mountain Resources Inc.
5,136,000 N
384,000 E
383,000 E
382,000 E
381,000 E
380,000 E
June 2012
Eco Ridge Project
Elliot Lake, Ontario, Canada
Mine Plan
www.rpacan.com
Metres
Fresh Air Intake
Panel Access Ramp
300m
292m
8m
20m
East Main Ramp
4m
284m
Stope Access Ramp
16-6
Drifting
Pillar
Figure 16-3
Ventilation Exhaust Drift
Eco Ridge Project
Elliot Lake, Ontario, Canada
Panel Plan
June 2012
www.rpacan.com
Pele Mountain Resources Inc.
www.rpacan.com
DILUTION
Mining dilution occurs in two forms - planned and unplanned dilution. Planned dilution
consists of sub-economic grade material deliberately included within stope design limits
for practical mining reasons. Planned dilution is accounted for when estimating the
grade of the designed mining block or stope. A major portion of the planned dilution is
derived from the footwall step that must be excavated to maintain a flat floor. Unplanned
dilution occurs from sub-economic grade material that originates from beyond the
designed stope limits due to wall failure, poor blasting practice, inaccurate drilling and
other such sources.
No additional tonnage was added for unplanned dilution on the basis that any losses due
to reduced mining extraction would be replaced by diluted material assuming the same
factors for dilution and recovery. The resource grade of the main access drifting and
panel drifting has been reduced by approximately 2% to account for dilution.
This
dilution rate is lower than the dilution rate experienced previously in the Elliot Lake
Camp. This is possibly due to improvements made to equipment technology from the
time the Elliot Lake Camp commenced operations. None the less, particular care will still
be required for blasting the base of the drift to ensure the higher grade mineralization is
recovered without breaking significant amounts of the underlying quartzite.
A comprehensive grade control program is required to minimize the dilution and
additional pre-shear holes have been added to assist in reducing any dilution from
overbreak.
Achieving the production grade is identified as a project risk and a comprehensive
dilution control program is recommended.
DILUTION CONTROL PROGRAM
Dilution control during mining will be of high importance to the economics of the Project.
Dilution control methods were well established in the Elliot Lake Camp at the time of
mine closure. The use of trucks for transport to surface provides the option to transport
low-grade material or waste, such as dykes, to either a low grade stockpile or a waste
stockpile.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-7
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
The following dilution control program is recommended.

Pre-development drilling from surface on a 50 m by 50 m grid or closer as
required to estimate the block grades for planning of the stope layouts and
identifying the presence of dykes or faults.

Planning a minimum mining height of 2.1 m (7 ft) where appropriate.

Geological control of all headings, with face and wall mapping using
scintillometers and REO scanning equipment to direct material to processing or
to the low-grade stockpile.

Sampling the jumbo drill holes or development of a slim tool for radiometric and
REO analyses of the holes.

Strict quality control of the drilling practices to ensure the higher grade material at
the base of the MCB is recovered without adding significant dilution.

Strict quality control of the drilling with pre-shear holes at the hanging wall
contact to prevent overbreak.

Consider the potential to drill and blast thinner lifts to decrease the portion of
lower grade hanging wall material.
MINING PRODUCTION RATE
Production rates were developed based on first principles. Cycle times were estimated
for each part of the mining cycle. With respect to drilling, the cycle time was based on
the number of holes to be drilled, drilling penetration rate, allowance for setup/ teardown
and travelling time to the next face. Cycle times were estimated in a similar manner for
explosive charging, mucking, and installing of ground support. Table 16-1 summarizes
the optimum production capacities for each piece of production equipment for the
various heading sizes. For example, when these capacities were used to determine the
mobile equipment requirements using 9,000 tpd as the production target, the number of
drilling units needed ranges between 3.5 and 6.3, the average being 6, which includes
an 85% equipment mechanical availability allowance.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-8
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 16-1 EQUIPMENT OPTIMUM PRODUCTION CAPACITIES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Description
Heading Size
(t/day)
Explosive
Charging
(t/day)
Mucking
(5m3)
(t/day)
Drilling
Bolting
(t/day)
Main Ramps
5.0mWx3.2mH
1,860
1,512
2,124
1,710
Panel Drifts
4.8mWx3.2mH
1,796
1,455
2,096
1,685
Stope Ramp
4.8mWx3.2mH
1,796
1,455
2,096
1,685
1st Pass Pilot
3.4mWx3.0mH
1,419
1,101
1,841
1,521
st
4.6mWx3.0mH
2,309
1,617
2,022
1,655
nd
6.5mWx3.0mH
2,776
2,054
2,223
1,801
rd
5.5mWx3.0mH
2,573
1,850
2,133
1,736
1 Pass Slash
2 Pass Slash
3 Pass Slash
The production rates found in Table 16-2 allow for inefficiencies during mining
operations, due to the difficulties in managing delays at the workplace. Typically, these
occur due to issues such as: lack of coordination of equipment; jumbo, scoops and
bolters not having a follow-up assignment so they have idling time; mine services such
as ventilation and sumps not functioning properly which interrupt production;
miscommunication between miners that results in rework; not having all the necessary
materials and equipment at the start of the job; equipment not functioning properly and
procedures not being followed.
Table 16-2 identifies the effective advance and corresponding production rates for two
mining scenarios, double heading and multiple headings (more than eight faces). These
rates include 30% and 25% additional time for the delays identified above in the double
heading and multiple heading rates, respectively.
Using the effective production rate in Table 16-2 a total of eight mining blocks need to be
active at any one time to maintain a nominal mining rate of 9,000 tpd.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-9
Technical Report NI 43-101 – June 20, 2012
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TABLE 16-2 EFFECTIVE PRODUCTION RATES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
5.0mWx3.2mH
DoubleHeading
(m/day)
14.7
Multi –
Heading
(m/day)
27.7
DoubleHeading
(tpd)
642
Multi –
Heading
(tpd)
1,210
4.8mWx3.2mH
14.9
28.0
618
1,164
Description
Heading Size
Main Ramp
Panel Headings
Stope Ramp
4.8mWx3.2mH
14.9
28
618
1,164
1st Pass Pilot
3.4mWx3.0mH
17.2
31.8
477
880
st
4.6mWx3.0mH
19.1
35.2
700
1,293
nd
6.5mWx3.0mH
14.6
27.6
765
1,441
rd
5.5mWx3.0mH
16.6
31.4
736
1,389
1 Pass Slash
2 Pass Slash
3 Pass Slash
MINING SEQUENCE
Typically, the mining steps would be as follows:

The deposit is divided into two portions, east and west, with each portion having
a similar mine layout. The following sequence describes in detail how the
eastern portion will be developed and mined which will be similar for the western
portion.

Approximately mid way along the eastern face, twin main ramps will be driven at
a decline of 18% to provide access to the deposit.

Eight equally spaced twin drive panel access drifts will be developed on either
side of the main ramp.

Block access ramps will be developed off the panel access drift. These ramps will
be collared as the block entrances were exposed. Their development will
proceed once the panel drifts have advanced 20 m (Figures 16-3 and 16-4).

Once the block access ramp has broken through to the panel above, mining of
the block will progress from the top down.

Each mining block will have 24 stopes, 12 on either side of the block’s access
ramp. Each stope measures 20 m in width and approximately 150 m in length.
Each stope will be mined in four passes.

The first pass would be a pilot driven along the top cut of the undeveloped stope
followed by a second and third pass (Figure 16-5). All the muck will be hauled to
the surface stockpiles.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-10
Technical Report NI 43-101 – June 20, 2012
Mucked Out Room
Exhaust Airway
Pillar
8 yd Scoop
16-11
Third Pass Mining
Slashing
Second Pass Mining
First Pass Mining
Figure 16-4
Eco Ridge Project
Elliot Lake, Ontario, Canada
Mining Sequence Section
June 2012
www.rpacan.com
Pele Mountain Resources Inc.
1st Pass
2nd Pass
3rd Pass
1067mmØ
VENT DUCT
16-12
3.22m
3.44m
6.67m
6.67m
20.00m
6.67m
4.00m
4.76m
22°
Figure 16-5
Eco Ridge Project
Elliot Lake, Ontario, Canada
Stope Development Section
June 2012
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Pele Mountain Resources Inc.
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SUPPORT SERVICES
VENTILATION
The final ventilation air volume capacity has been estimated 736 m3/sec (1,559,000 cfm),
detailed in Table 16-3. Mine air volume requirements were based on the current Ontario
Occupational Health and Safety Act and Regulations for Mines and Mining Plants, which
prescribes 0.06 m3/s for each kilowatt of power. Total volume of air flow is provided in
the following table. The primary Load-Haul-Dump units and haulage trucks rated at 95%
utilization and the remaining service vehicles range between 21% and 79%.
TABLE 16-3 AIR VOLUME REQUIREMENTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Equipment
Units
kW /unit
Total kW
Utilization
Jumbos – 2-boom EH
Explosive Charger
Scoops (5m3)
Haul Truck (30 t)
Bolting Jumbo
Remix Truck
Grader
Service Truck
Fuel & Lube Truck
Shifter Vehicles
Personnel Carrier
Ventilation Subtotal
Leakages 20%
Miscellaneous
Ventilation Required
Conversion
(CFMx1000)
6
4
7
16
7
2
1
5
1
10
2
61
120
111
243
393
110
110
110
110
110
30
61
720
444
1,701
6,288
770
220
220
550
110
300
122
11,355
32%
32%
95%
95%
32%
53%
79%
42%
53%
42%
21%
Air Volume
Required
(m3/sec)
14
8
97
357
15
7
5
14
3
8
2
530
106
100
736
1,559
VENTILATION DISTRIBUTION SYSTEM
Main ventilation fans located at the portal areas will provide fresh air to the mine by
means of the main ramps. Auxiliary ventilation fans will redirect the fresh air from the
main ramp to the panel drifts and mining blocks.
Exhaust air will be collected from the mining blocks in the lower drift of the two panel drift
system and directed to the limits of the panel where it will exhaust to surface through a
series of low angle raises developed in the ore.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-13
Technical Report NI 43-101 – June 20, 2012
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DEWATERING
Very little water is expected to occur from ground water inflows and the principal sources
of water underground will be from service water required for drilling, wetting muck during
and after blasting operations, and drilling ground support holes.
The estimated
dewatering pumping requirements will be 1.6 million litres per day or 19 litres per
second. The pumping system is designed to handle 31 litres per second assuming
pumps will run 18 hours per day at an efficiency of 80%.
Development headings will be pumped as necessary using 11.2 kW submersible pumps.
The headings will be driven on line and therefore may undulate slightly to follow the ore
and some low spots may collect pools of water. An allowance has been made for a small
number of 1.1 kW submersible pumps to pump this water back to the nearest sump.
Main sumps would be located at the bottom of the mine and would be equipped with 104
kW submersible pumps, two operating and one on standby, pumping water directly to
surface through a 150 mm standard pipe discharge line.
ELECTRICAL
The maximum installed power underground at full production is expected to be 8.5 MW
at steady state.
The underground power distribution network has been based on a new 44 kV overhead
electrical line to be built by a local contractor over a distance of 10 km. The grid
connection for the power line is located in the city of Elliot Lake.
Stationary transformer stations will service the main ventilation fans while portable
transformer stations will service the drill jumbos, dewatering pumps, auxiliary fans and
area lighting as required. The portable substations will be widely available throughout
the mine to provide the necessary flexibility to power equipment as the mine advances.
SERVICE SHOPS
Equipment servicing will be completed on surface in a building located between the two
mine access ramps. Lubricants and service utility vehicles will enable the mechanical
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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crews to quickly access equipment breakdowns and allow efficient routine service of drill
rigs and LHDs at their place of work.
EQUIPMENT
The selection of equipment at the Eco Ridge Mine Project has been based on the
philosophy of using best available relevant technology for a fully mechanized mining
operation.
The high capital cost of mechanized equipment and higher levels of skills
required from operating personnel calls for maximizing equipment utilization.
The
estimated equipment fleet size is based on detailed cycle time using information from
equipment suppliers, other operations and in-house operating experience where
available.
Two 10.5-hour shifts have been assumed per day, with an effective utilization of 9.5
hours per shift for equipment. Allowance has been made for travelling to and from the
workplace at the change of shift. An average of 85% mechanical availability and 83%
utilization were assumed when estimating the total mucking and haulage fleet size. The
total number of active units required for drilling, charging and bolting was estimated
based on equipment performance with allowances made for set-up/tear down and
equipment travel to the next heading. These numbers were then increased to account
for mechanical availability of 85%.
Table 16-4 summarizes the necessary mine equipment at Eco Ridge Mine.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-15
Technical Report NI 43-101 – June 20, 2012
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TABLE 16-4 MINE EQUIPMENT SUMMARY
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Description
Jumbos – 2Bm
Explosive Charging Rig
Scoops – 5m3
Haul Trucks – 30 tonne
Bolting Jumbo
Remix Truck
Grader
Service Truck
Fuel and Lube Truck
Personnel Carrier
Shifter Vehicles
Units
6
4
8
18
7
2
1
5
1
2
10
DEVELOPMENT EQUIPMENT
Two boom low profile electric hydraulic drill jumbos were selected to carry out the
development advance. The drill rig will be equipped with the latest generation drifter
technology. A typical profile is illustrated in Figure 16-6. Six machines are
recommended, three for the east half of the deposit and the remaining three for the west
half of the deposit.
Four explosive charging rigs will be used to load the holes in the face.
Ground support will be installed by a low profile bolting rig. The unit is a one man
operated electro-hydraulic low profile bolting machine capable of bolting in an excavation
with headroom as low as 1.7 m. The unit is also capable of installing several rows of
bolts without moving the machine. The operator is protected by a FOPS telescopic
canopy. The unit is equipped with an automatic function that allows the operator to
concentrate on safe, fast and accurate drilling and bolt installation.
Muck loading in development headings will utilize diesel- powered LHDs. The 5 m3
scoop will load 30 tonne trucks for haulage to the surface leach pads. Typical 5 m3 scoop
and 30 tonne truck profile illustrated in Figures 16-7 and 16-8, respectively.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-16
Technical Report NI 43-101 – June 20, 2012
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PRODUCTION EQUIPMENT
In the room and pillar areas, two boom low profile electric/hydraulic jumbos were
selected to carry out the production advance.
Explosive loading units used in the development headings would be shared with the
production headings.
Muck loading and haulage trucks used in the development
headings would be shared with production areas. It was estimated that a total of seven
LHD are required at full production. The number of trucks would depend on the depth of
operation. In the section on mining capital costs (Section 21 of this report), the number
of units by year is forecasted. In year five, it is estimated that 16 units will be required.
SERVICE
A fleet of ten 4x4 vehicles modified for underground use is required to transport people
and materials.
A personnel carrier is also required to carry workers from the
shop/warehouse/office/dry complex to the underground workings.
Various service vehicles will be purchased to transport large bulky material from the
surface warehouse to the underground storage facilities. A grader will maintain the
underground road ways.
A fuel and lubricant dispensing type vehicle will be used to service the less mobile units
like the drill jumbo, explosive loading rig and the bolting jumbo. Units such as the scoop,
truck and remixer will be serviced on surface.
MANPOWER
Manpower requirements for the underground mine have been estimated based on first
principles. For the various size openings the total mining cycle time was estimated.
From the individual components of the cycle i.e. drilling, explosive loading etc., the
capacity of each unit could be identified. Knowing the daily production target, the units
required to meet the target could be determined. Manning the equipment would identify
the number of equipment operators required which makes up the majority of the mine
hourly workers.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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Technical Report NI 43-101 – June 20, 2012
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The number of shifters, technical staff and underground administrative staff to provide
maintenance, technical and administrative support to the miners has been based on field
experience. The underground operation would consist of two shifts, at 10.5 hours per
shift, seven days per week. The 10.5 hour shift would allow time for blasting gases to
dissipate.
Operations manpower will peak at approximately 251 people on payroll distributed as
shown in Table 16-5.
This study was based on Pele Mountain performing their own development and
production mining.
TABLE 16-5 MANPOWER REQUIREMENTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Description
On site
On Payroll
Technical Support
18
18
Mining
109
213
Construction
10
20
Total
127
251
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 16-18
Technical Report NI 43-101 – June 20, 2012
2.97
2.27
1.96
16-19
Low-Profile
Twin-Boom Jumbo
Figure 16-6
Eco Ridge Project
Elliot Lake, Ontario, Canada
Stope Drilling Section
June 2012
www.rpacan.com
Pele Mountain Resources Inc.
Figure 16-7
Pele Mountain Resources Inc.
Eco Ridge Project
Elliot Lake, Ontario, Canada
Tramming Section
2.53m
2.97m
16-20
1.96m
June 2012
www.rpacan.com
Low Profile 5
cu.m LHD
30 Tonne Haul Truck
16-21
Haulage and
Fresh Air Drift
Exhaust Drift
Figure 16-8
Eco Ridge Project
Elliot Lake, Ontario, Canada
Hauling Section
June 2012
www.rpacan.com
Pele Mountain Resources Inc.
www.rpacan.com
MATERIAL HANDLING TRADE-OFF STUDY
A trade-off study was carried out to look at using conveyors instead of trucks for material
handling to surface. Most of the mine development layouts will be the same as in the
base case trucking option. The main difference will be the use of three ramps instead of
two; a central triple-heading ramp and two sets of dual ramps. The central triple-heading
ramp will consist of a main conveyor, which will transport muck to surface, and
equipment access ramps on either side. The dual ramps will be located 1,380 m on
either side of the central ramp. The three ramps will be driven at 18% on the footwall
contact of the MCB reef.
The blasted muck from working stopes will be transported by LHD to secondary
conveyors located in the panel access drifts. Panel conveyors will transfer the muck to
the main conveyor via a transfer chute and a grizzly feeder. The main conveyor will
transfer the material to surface for processing.
Both the feeder conveyor drifts and the main conveyor drifts will be used as ventilation
exhaust way while the haulage drifts will be used for fresh air intake. Production will
start with blocks adjacent to the main conveyor ramp and move away sequentially along
strike.
This results in a schedule with much more uniform grades year to year, in
comparison to the base case trucking option, which targets higher grades in early years.
Key changes to inputs for the conveyor option are listed below:

Adjusted production schedule.

Initial capital cost of $553 million (compared to $563 million for the base case).

Total capital cost of $675 million (compared to $670 million for the base case).

Mining operating cost of $35.23 per tonne of ore mined (compared to $42.64 per
tonne for the base case).
The conveyor scenarios provide an operating cost advantage of 15%. This advantage is
offset by the change in the production schedule (less opportunity to mine higher grades
first). The resulting discounted cash flow analysis has a slightly lower IRR, and slightly
higher NPV.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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The use of conveyors for material handling may provide economic advantages, and is
worth consideration in future studies. Particular attention should be paid to impacts on
grade distribution in production schedules for each option.
In RPA’s opinion, conveyors may also provide operational advantages that are difficult to
quantify economically at this stage of the Project, including better mine ventilation,
reduced traffic on the ramps, and easier material handling as the mine extends at depth.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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17 RECOVERY METHODS
The results of the metallurgical tests and brief economic trade-off studies have led to the
selection of a process including crushing and grinding, froth flotation, and magnetic
separation, acid baking and water leaching, solid/liquid separation, high density sludge
(HDS) removal, and recovery of the valuable elements by solvent extraction and
precipitation as shown in Figure 17-1.
CRUSHING AND GRINDING
Run-of-mine (ROM) throughput for the process plant is assumed to be 3.2 million tpa, or
9,143 tpd. The ROM material is transported to the surface and dumped on the primary
stockpile. Mill feed is reclaimed by front end loader and delivered to the crusher feed
bin.
A grizzly prevents oversize materials from entering the crushing circuit.
The
undersize from the grizzly is screened to remove fines before being fed to the crusher.
The crushed product is combined with the screen undersize and dumped on an
intermediate stockpile for homogenisation.
Crushed material is reclaimed from the
intermediate stockpile and fed to the grinding circuit, where it is ground to 100% passing
300 µm. Discharge from the grinding circuit is diluted with process water and pumped to
classifying cyclones, where it is classified into minus 25 µm in the cyclone overflow and
plus 25 µm in the cyclone underflow. The overflow is pumped to flotation, while the
underflow is directed to the two-stage magnetic separation circuit.
Concentrate from magnetic separation is reground to 100% passing 74 µm before
mixing with concentrate from flotation, and the combined concentrate is filtered to
remove excess moisture. The filter cake is directed to the acid baking process. Tailings
from flotation and magnetic separation are pumped to the tailings thickener.
The
thickened underflow supplies a paste backfill plant, and the remainder of the tailings are
pumped to the tailings storage facility.
ACID BAKING
Dewatered concentrate containing uranium and rare earth minerals is mixed with
concentrated sulphuric acid at an acid:concentrate ratio of 0.3:1, and cured for a period
of one hour. After curing, the acidified concentrate mixture is transferred to a rotary kiln
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and baked at 310°C for approximately three hours.
Baked solids from the kiln are
discharged into a water leach circuit and leached for a period of three hours. Various
sulphates formed during acid baking, including uranium and rare earth sulphates, are
dissolved during leaching. After leaching, the slurry is pumped to a solid/liquid (S/L)
separation circuit. A counter-current decantation (CCD) circuit is used for washing and
S/L separation. Residues from the CCD circuit will be sent to the tailings storage facility.
Overflow from the CCD circuit, the pregnant leach solution (PLS), continues to
downstream processing for purification and recovery of valuable metals.
Since testwork is still in its early stages, and currently focused on further defining the
concentration and extraction process, no testwork has been carried out on the treatment
of the PLS. The unit operations that occur after acid baking and water leaching are
preliminary and were selected based on previous experience with similar operations.
RPA understands that the processes must be selected and defined in detail through
future testwork.
NEUTRALIZATION AND IRON REMOVAL
Overflow from the CCD circuit, the PLS, is neutralized in a four-stage iron precipitation
(PPTN) circuit using milk of lime to achieve a final pH of 3.8, to remove heavy metals
and, predominantly, iron. The high density sludge (HDS) thickener receiving the slurry
from the iron precipitation circuit, the iron/gypsum cake generated in the uranium
extraction plant, and the iron sludge generated in the REE extraction plant, will produce
an overflow that will become the feed to the uranium extraction circuits in the uranium
extraction plant. The ferric iron (Fe3+) content in the solution reporting to the uranium
extraction circuit must be maintained between 6 g/L Fe3+ to 10 g/L Fe3+. The sludge in
the underflow from the HDS thickener will be mixed into the paste backfill and sent
underground for final disposal.
URANIUM EXTRACTION AND YELLOWCAKE PRECIPITATION
The final solution discharged from the HDS removal unit will be pumped to a
combination of clarifier and sand filter arrangement to ensure solution clarity prior to
uranium solvent extraction. Uranium is recovered by solvent extraction, followed by
precipitation and drying.
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The clarified PLS from the clarifier and sand filter feeds the uranium extraction circuit
which consists of three high-rate mixer-settlers. In the uranium extraction circuit, the
uranium is extracted by counter-current contact with an organic solution containing 2.5%
v/v Alamine 336, 2.5% v/v Isodecanol in a kerosene diluent. The aqueous solution
(PLS) to organic solution volume (A:O) ratio is estimated to be 20 volumes of aqueous to
one volume of organic for the extraction process. The aqueous to organic ratio was
assumed in order to produce an aqueous solution of approximately 100 g/L of U3O8 in
the uranium stripping circuit. Testwork is required to determine the number of uranium
extraction stages and the actual aqueous to organic ratio that is required.
The organic solution carrying the uranium enters a four-stage stripping circuit.
The
stripping medium is assumed to be an aqueous solution of 400 g/L sulphuric acid
(H2SO4).
The organic solution is stripped of its uranium content by counter-current
contact with the aqueous solution at an estimated acid to organic ratio of one to 20. The
number of stripping stages and acid to organic ratio must be confirmed through further
testwork.
The aqueous phase from the extraction circuit, from which most of the
uranium has been removed, will feed the REO plant.
The strip solution, rich in uranium, at approximately 100 g/L U3O8, is directed to a fourstage iron and gypsum precipitation circuit where the iron and gypsum are precipitated
out of the solution at pH 3.5 using milk of lime. The resulting precipitate, i.e., sludge, is
directed to a drum filter to produce an iron and gypsum filter cake and a filtrate that
contains the uranium. The iron and gypsum cake from the drum filter is directed to the
high density sludge (HDS) thickener in the neutralization and iron removal circuit.
The filtrate is directed to a three-stage yellowcake precipitation circuit where it is treated
with a 70 wt % solution of hydrogen peroxide (H2O2), to produce yellowcake slurry. The
yellowcake slurry is dewatered in a thickener and a centrifuge, producing what is known
in the uranium industry as “yellowcake” due to its bright yellow colour. This yellowcake
is further dried in a porcupine dryer producing the final product, which is packed and
shipped. The final uranium content in the yellowcake is expected to be approximately 70
wt % U.
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REE EXTRACTION AND CARBONATE PRODUCTION
The aqueous stream from uranium extraction will feed the REO plant.
It will be a
relatively pure solution from which all ferric iron and some of the thorium has been
removed, while still containing almost all of the leached yttrium and REEs.
The feed solution to the REE plant will be fed to a high-rate mixer-settler where it is
mixed with an organic stream containing 10% diethyl hexyl phosphoric acid (DEHPA)
and 2% tributyl phosphate (TBP) in a kerosene diluent (Exxsol D80) with an acid to
organic ratio of approximately ten to one. The valuable REEs transfer to the organic
phase in a single extraction step along with unwanted constituents, primarily iron and
thorium.
The loaded organic is first contacted with a mixed acid at 1.5 normal nitric and 1.5
normal sulphuric to strip the yttrium and rare earths. The organic is stripped in five
mixer-settlers arranged in counter-current configuration with an acid to organic ratio of
1.25 to one. The strip solution is purified and the valuable materials are recovered.
The organic is then washed with fresh water in five mixer-settlers arranged in countercurrent flow to remove all traces of nitric acid, with an acid to water ratio of one to 20.
The organic is then contacted with a salt-sulphuric solution at 5 g/L sodium chloride and
8.5 normal sulphuric acid in an agitated tank. This removes iron, uranium, and thorium
from the organic, with the thorium precipitating out as thorium sulphate. The thorium
salts are thickened and pumped to waste. The salt-sulphuric solution overflowing the
thickener is re-used as strip solution after reagents are added to achieve the appropriate
reagent concentrations in the strip solution. The organic is then washed with fresh water
in a single mixer-settler.
A bleed stream of the organic is pumped to a small stripping mixer-settler where it is
treated with an ammonium bifluoride solution to recover scandium.
The combined
stripped organic stream is then pumped back to the extraction mixer-settler for re-use.
The yttrium strip solution is partially neutralized with milk of lime to pH 3.2 to remove any
contained iron and thorium, in a five-stage neutralization circuit. The slurry is filtered
using a drum filter and the pure solution is neutralized to pH 8.0 with magnesia slurry in
a three-stage precipitation circuit. The iron and thorium cake produced from the drum
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filter is recycled back to the HDS thickener in the neutralization and iron removal circuit.
The precipitated yttrium and REEs are thickened and the slurry is filtered. The filter cake
is reacted with 29% w/w sodium carbonate solution to convert the precipitate to a
carbonate form. This slurry is then filtered and the cake is dried in a porcupine dryer.
The dried mixed rare earth carbonate product is packed in drums in preparation for
separation into individual oxides.
DESIGN CRITERIA
Design criteria listed in Table 17-1 have been followed for the conceptual mass balance
calculation for the acid baking plant.
TABLE 17-1 CONCEPTUAL DESIGN CRITERIA
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Description
ROM Throughput
Operating days per year
% Uranium in feed
% TREO in feed
H2SO4: solids ratio
Acid baking temperature
Acid baking retention time
H2O:solids ratio in water leaching
Water ratio for CCD circuits
Rate
3,200,000
9,143
350
0.045
0.13
300
310
3
50
2.5:1.0
Units
tpa, or
tpd
d/a
%
%
kg/t
ºC
hr
%
CONCEPTUAL MASS BALANCE
The primary purpose of a conceptual mass balance calculation is to estimate the liquid
and solid volumes to be processed in each unit operation and to provide a preliminary
design basis for equipment sizes and cost estimation. Reagent consumptions and cost
estimations are also supported by the conceptual mass balance. The conceptual mass
balance is provided in Table 17-2.
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TABLE 17-2 CONCEPTUAL MASS BALANCE
Pele Mountain Resources Inc. – Eco Ridge Project
Description
Feed
ROM throughput
Uranium in feed
TREO in feed
U3O8 in feed
TREO in feed
Ground Ore Separation
Portion of ground ore to flotation
Portion of ground ore to magnetic separation
Consumption rate of collector in flotation
Collector used in flotation
Overall portion of concentrator feed to acid baking
Concentrates to acid baking
Concentrate Acid Baking
(H2SO4 : Solids) ratio
Total H2SO4
Water Leaching
Solids in outgoing stream
Product
Overall uranium recovery (assumed)
Uranium production
Overall TREO recovery from concentration, acid baking,
and water leaching
TREO production
Unit
Route 2
tpa
wt %
wt %
tpa
tpa
3,200,000
0.045
0.13
1440
4180
%
%
kg/t
tpa
%
tpa
15
85
2.0
1,600
19.3
617,600
kg/t
tpa
300
185,280
wt %
50
%
tpa
90
1,296
%
88.2
tpa
3,686
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Concentrated
Sulfuric Acid
Off-gas
ACID BAKING
Collector
WATER LEACHING
FLOTATION
Flocculant
O/F
Tailings
ROM
CRUSHING
GRINDING
S/L SEPARATION
CLASSIFICATION
REGRINDING
Solids
Lime Slurry
U/F
17-7
MAGNETIC
SEPARATION
Fe PPTN & HDS REMOVAL
Fe Sludge
Tailings
Organic Solvent
Organic
Stream
URANIUM SX
Aqueous
Stream
URANIUM
PRODUCTION
Yellow Cake
U 3O8
REO
PRODUCTION
REO
Carbonate
Figure 17-1
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Process Flow Sheet
June 2012
www.rpacan.com
Pele Mountain Resources Inc.
www.rpacan.com
18 PROJECT INFRASTRUCTURE
EXISTING MINING INFRASTRUCTURE
Pardee Amalgamation Mine Limited (Pardee) was formed in 1954 to consolidate the
Aquarius property with other properties in the area.
In 1955, Pardee carried out
extensive mapping, trenching, diamond drilling, and the excavation of a decline adit, bulk
sampling, and metallurgical tests.
The adit was driven along the dip of the MCB for a distance of 30.5 m (azimuth 120°
west and 27° dip) and channel samples were taken approximately every 1.5 m.
Highway 108 passes through the southwest corner of the property, and a power
transmission line crosses through the centre of the property.
OTHER INFRASTRUCTURE
The remaining infrastructure, including access road, plant roads, parking, administrative
offices, shops, warehouse, power line, electrical substation, power distribution, waste
water treatment facilities, water supply and distribution, explosives magazine, and
natural gas supply must be constructed for the Eco Ridge Mine Project.
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19 MARKET STUDIES AND CONTRACTS
URANIUM
A uranium price of $70/lb U3O8 has been used in this PEA, based on independent metal
price forecasts from banks and financial institutions. RPA notes that the price used in
the PEA, while above the current price, is within the range of medium- to long-term
forecasts.
RARE EARTHS
Pele Mountain and RPA collected historical price information, supply/demand analysis,
and long term forecasts for REO. The sources of price information include the websites
of Metal-PagesTM and Asian Metal, and analyst reports by Asian Metal, TD (Toronto
Dominion) Newcrest Inc., and CIBC (Canadian Imperial Bank of Commerce).
RARE EARTH SUPPLY
Rare earths are found in more than 200 minerals, of which about a third contain
significant concentrations. Only a handful, however, have potential commercial interest.
The most important source minerals are carbonates (bastnaesite) and phosphates
(monazite and xenotime). Apatite is also an important source of rare earths, while heavy
rare earths are more commonly found in minerals in granitic and alkaline rocks and in
ionic clays. The main geological environments for rare earths are:

Carbonatites – bastnasite (Mountain Pass, California; Kola Peninsula; Russia,
Sichuan, China)

Monazite and xenotime-bearing placers (west coast of Australia; east coast of
India)

Iron-bastnaesite rare earth element deposits (Bayan Obo, Inner Mongolia;
Olympic Dam, Australia)

Ion absorption clays (Longnan, Jiangxi, China)

loparite and eudialyte in alkaline intrusives (Kola Peninsula, Russia; Dubbo,
Australia)

Pegmatites, hydrothermal quartz and fluorite veins (Northern Territories,
Australia; Karonge, Burundi; Naboomspruit, South Africa)
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Other generic types which may contain rare earths are:

Phosphates (Phosphoria Formation, western USA),

Uranium deposits in sandstone and black shales (Wheeler River, Alberta;
Williston Basin, Saskatchewan),

Mylonites in limestones (Nam-Nam-Xe, Vietnam),

Scheelite skarns (Ingichke, Uzbekistan),

Nickel deposits (Sudbury Basin, Ontario).
By far the most important current sources of rare earths are the Bayan Obo iron rare
earth deposits near Baotou, Inner Mongolia, the bastnaesite deposits in Sichuan, China
and the ionic clay deposits in southern China. China is the dominant source of all rare
earth oxides, accounting for approximately 97% of world production in 2009. Light rare
earths are primarily produced in northern China (Inner Mongolia) and south-western
China (Sichuan).
The heavy rare earths are primarily produced in southern China
(Guangdong), from ionic clays.
There are distinct differences in the elemental composition of various rare earth sources,
as illustrated in Table 19-1.
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TABLE 19-1 DISTRIBUTION OF RARE EARTHS BY SOURCE – CHINA
Pele Mountain Resource Inc. – Eco Ridge Mine Project
Baotou,
Inner
Mongolia
Bastnaesite
Concentrate
Sichuan
Guangdong
Longnan,
Jiangxi
Mountain
Pass, Ca
Mt. Weld,
W. Australia1
Bastnaesite
Concentrate
High-Eu clay
High-Y clay
Bastnaesite
Monazite
50%
50%
92%
95%
La
23
29.2
30.4
2.1
33.2
25.5
Ce
50.1
50.3
1.9
0.2
49.1
46.74
Pr
5
4.6
6.6
0.8
4.34
5.32
Nd
18
13
24.4
4.5
12
18.5
Sm
1.6
1.5
5.2
5
0.789
2.27
Eu
0.2
0.2
0.7
0.1
0.118
0.44
Gd
0.8
0.5
4.8
7.2
0.166
1
Tb
0.3
0
0.6
1
0.0159
0.07
Dy
0
0.2
3.6
7.2
0.0312
0.12
Er
0
0
1.8
4
0.0035
0.1
Y
0.2
0.5
20
62
0.0913
trace
Ho-Tm-Yb-Lu
0.8
0
0
5.9
0.0067
trace
Total TREO
100
100
100
100
99.9
100
Source
Ore Type
TREO in
Concentrate2
Element
1
Central Zone pit assays for La, Ce, Pr, Nd, Sm, Dy, Eu, and Tb
2
TREO contents of China clays represent the relative amounts in concentrate produced from the clay deposits
Source: Neo-Materials International, Harben, Lynas Corp.
As a consequence of the mix of the individual elements within a raw material source, the
distribution of supply of the individual elements does not match the distribution of
demand for the elements. The mixed composition of rare earth minerals necessitates
the production of all of the elements within a given ore source. Such production does
not necessarily equal the demand for the individual oxides, leaving some in excess
supply and others in deficit. Overall production of rare earths on an oxide basis is
therefore typically greater than the sum of demand for the individual elements in any
given year.
Total supply of rare earth oxides for 2010 was estimated at between 123,600 tonnes and
124,000 tonnes, as illustrated in Table 19-2.
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TABLE 19-2 RARE EARTH SUPPLY – 2008 & 2010
Pele Mountain Resource Inc. – Eco Ridge Mine Project
Source
China
Supply 2008
(tonnes REO)
117,000
Supply 2010
(tonnes REO)
120,000
~5,000
N/A
2,500 - 3,000
1,800 - 2,000
100
25 - 50
2,000
1,800 – 2,000
121,600 - 127,100
123,600 – 124,000
Others
Recycling
Russia
India
Mountain Pass
Total
Source: Roskill Information Services, 2010 & 2011
As described by Asian Metal, the international rare earths market has grown at an
unprecedented rate since China cut export quotas by approximately 40% in 2011 as
seen in Figure 19-1. China’s overwhelming control on the rare earth supply chain, from
upstream mining to downstream processing and end-user products, is likely to remain
intact on all but a few materials through 2016. Further price increases are expected with
continued decreases in export availability from major Chinese suppliers and a surge in
domestic China demand.
FIGURE 19-1 CHINESE RARE EARTH EXPORT QUOTAS BY YEAR
(THOUSANDS OF TONS)
70
65.6
61.8
Tonnes (000)
60
59.6
47
50
50.1
40
30.3
30
28
20
10
0
2005
Source: Asian Metal
2006
2007
2008
2009
2010
2011
(estimated)
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A crackdown on illegal mining operations, which accounted for an estimated 20% to 25%
of production over the past five years, has substantially cut down on the availability of
material on the spot market. A major consolidation of the market, which began in 2009,
has also limited the number of active rare earth miners, separation plants, and exporters
in China.
New production from US-based Molycorp and Australia-based Lynas should add
between 30,000 tons (27,000 tonnes) and 40,000 tons (36,000 tonnes) of high purity
material to the market by the end of 2012, which is widely expected to saturate the light
rare earths market when it becomes available.
The ore bodies from Molycorp’s
Mountain Pass and Lynas’ Mount Weld mine sites are predominantly composed of light
rare earths - lanthanum, cerium, praseodymium, and neodymium.
The heavy rare
earths and yttrium are found at the mines only in trace amounts and will be neither
recovered nor produced in quantities that would have a material impact on global supply.
It should be noted that the heavy rare earths – Dy, Er, Eu, Gd, Ho, Lu, Sc, Sm, Tb, Tm,
Y, Yb – are not only much more rare than the light rare earths, but the separation and
processing of heavy rare earth-rich concentrate into high purity oxides and metals
outside of China will require substantial new capital investment. At present, substantially
all heavy rare earth processing facilities are in China, and previous scoping studies done
by prospective rare earth mining ventures indicate that a new separation plant would
cost roughly US$250 million to US$350 million and take three to four years to complete.
As a result, availability of heavy rare earths will be contingent on Chinese production
levels until 2015 at the earliest - the soonest a non-Chinese processing facility could be
completed.
On a macro level, over the next five years, the Chinese government is expected to
further regulate the rare earth mining industry. China has already begun enacting a
series of new policies designed to improve environmental guidelines, limit illegal
production, establish provincial and national stockpile reserves, and continue a
consolidation of the overall industry.
RARE EARTH PRICING
The market for rare earth products is relatively small, and information on pricing and
sales terms, especially for 2016, is difficult to obtain.
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Sustained growth in demand and price is expected for nearly all rare earths through
2016 with the exception of lanthanum, cerium, and praseodymium.
REO price forecasts for 2016 were obtained from a number of sources, which covered a
wide range of values. The prices used in the PEA cash flow are described in Table 19-3,
below.
The prices were applied as a constant throughout the Life of Mine (LOM)
schedule.
TABLE 19-3 REO FORECAST PRICES VS. CURRENT SPOT PRICES
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Rare Earth
Oxide
Ce2O3
FOB China
Forecast (US$/kg)
18
FOB China
Q2 2012 Spot* (US$/kg)
25
La2O3
20
24
Nd2O3
175
175
Pr2O3
140
140
Sm2O3
80
90
Eu2O3
2,900
2,300
Gd2O3
150
100
Sc2O3
3,000
7,200
Y2O3
150
132
Yb2O3
90
90
Dy2O3
1,450
1,100
Er2O3
195
195
Ho2O3
-
-
Lu2O3
1,200
-
Tb4O7
2,200
2,000
Tm2O3
3,000
-
* Source: Metal-Pages.com
The average rare earth oxide price used in this PEA is US$90/kg, while current (Q2
2012) prices average US$103/kg.
MARKETING CONCLUSIONS
RPA considers these REE prices to be appropriate for a PEA-level study, however, we
note that the recent market volatility introduces considerably more uncertainty than a
comparable base or precious metals project.
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CONTRACTS
No contracts relevant to the PEA have been established by Pele Mountain.
Pele
Mountain has not hedged, nor committed any of its production pursuant to an off-take
agreement.
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20 ENVIRONMENTAL STUDIES,
PERMITTING, AND SOCIAL OR COMMUNITY
IMPACT
INTRODUCTION
Pele Mountain has conducted preliminary baseline environmental studies in support of
development of the Eco Ridge Mine Project.
Consultation with potentially affected
communities, including First Nations, has also been given a high priority by Pele
Mountain. Specifically, the studies that have been conducted in support of the Project
include:

Terrestrial Ecosystems Preliminary Site Characterization Report – 2008

Aquatic Ecosystems Preliminary Site Characterization Report – 2008

Additional Aquatic Studies of Rioux Lake

Preliminary Groundwater Scoping Evaluation – 2008

Stage 1 Archaeological Assessment

Conceptual Design of a Tailings Disposal Facility (TDF) – 2008, updated in
2012

Project Description submitted to the Major Projects Management Office and
the Canadian Nuclear Safety Commission in 2008 (for information purposes
only, not as a formal regulatory submission)

Preliminary Geo-Chemical Characterization of Tailings – on-going

Work Planning for Detailed Environmental Characterization Studies – ongoing
While significant progress has been made in terms of preparing for the environmental
assessment and permitting of the Project, significant work remains before the Project is
approved and licensed. The work that has been conducted to date, and the work that
will be required in the future, is outlined in more detail below.
It should be noted that the history of the uranium and REE mining and processing
operations at Elliot Lake shows that these operations can be conducted without causing
damage to the environment. The primary environmental issues were resolved during the
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later operational period of the former Elliot Lake uranium mines, including the
management and treatment of wastewater entering the environment, management of
tailings and waste rock, and the health, safety and environmental systems required to
operate underground mines. These issues were identified and addressed and mitigation
methods were developed. The mitigation methods have led to the development of a
quality assurance process to ensure that all potential environmental issues are identified
and addressed through an extensive licensing process from development through to
decommissioning. For the former mines, the control methods are well understood and
extensive environmental monitoring programs have been put in place to ensure the
control methods are effective. The successful implementation of these programs has
demonstrated that uranium and rare earths mining and milling can be conducted without
causing significant adverse environmental impacts. This should be of assistance with
respect to obtaining approval for the Eco Ridge Mine Project.
Recent experience in Elliot Lake has demonstrated that potential impacts associated
with mining can be effectively managed, however, “Legacy issues” and the potential for
cumulative effects associated with the former mines will have to be addressed.
PERMITS, LICENCES AND OTHER LEGISLATIVE
REQUIREMENTS
The regulation of nuclear substances is a federal responsibility and a licensing process
has been established to protect health, safety, security, and the environment.
The
licensing process for new uranium mines and mills in Canada is outlined in an
information document (Licensing Process for New Uranium Mines and Mills in Canada,
INFO-0759) issued by the Canadian Nuclear Safety Commission (CNSC) in March 2007.
CNSC is the primary regulator for new uranium mines and mills in Canada. The
commission has the responsibility to make licensing decisions based on laws and
regulations. Their authority is derived from specific federal legislation – the Nuclear
Safety and Control Act (NSCA) and regulations made under the NSCA, as well as the
Canadian Environmental Assessment Act (CEAA). The site preparation, construction,
operation, decommissioning, and abandonment of a uranium mine and mill require
separate licences from CNSC.
In making a licensing decision, the Commission
considers the application, recommendations from CNSC staff, and any written or oral
presentations from intervenors made during public hearings.
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It is important to note that the federal government recently tabled new legislation that is
intended to integrate and streamline regulatory processes. The operational details of the
legislation have yet to be defined and, as a consequence, it is premature to determine
the extent to which the regulatory process for the Eco Ridge Project will be affected
although the stated objectives of the new legislation are expected to be beneficial. On
this basis, the information presented in the PEA is consistent with the regulatory regime
at the time of writing.
However, Pele Mountain will continue to monitor the federal
government’s regulatory reform initiative and the approach for the Eco Ridge Project will
be adjusted accordingly.
The licensing process under the NSCA is initiated by an application to CNSC. CNSC
licensing of a new uranium mine facility is sequential. The licences are:

Licence to Prepare the Site

Licence to Construct a Facility

Licence to Operate a Uranium Mine, Mill and Waste Management Facility

Licence to Decommission a Site

Licence to Abandon a Site
The initial licence application is generally oriented to the site preparation and
development stages of the project. Discussions with CNSC staff on the level of
information that will be required in the initial application are required before the
application is prepared. Information required in support of the application to prepare the
site and construct a new mine and processing facility typically includes:

A description of the proposed design for the mine, tailings management,
processing facility, and waste management systems.

Environmental baseline data on the site and surrounding area.

A description of the site geology, ground support, and groundwater regime
(local and regional).

The quantities and grade of the production and waste rock and plans for
storage and disposal.

A description of the mining and processing methods.

Results of the process hazard analysis and the proposed quality assurance
program for the design of the mine, tailings management, and processing
facility.
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
A proposed decommissioning plan.

Measures to mitigate the effects on the environment and the health and
safety of personnel that may arise during construction, operation, or
decommissioning of the facility.

Information on the potential release of nuclear substances and hazardous
materials, and proposed measures to control them.

Programs and schedules for recruiting and training operations and
maintenance staff.

A description of all proposed laboratory facilities and programs.

The proposed commissioning plan and schedule.
The application for the licence to prepare the site requires the completion of these
studies. Upon receiving the licence application, CNSC conducts a financial review and
establishes the review plan for the licensing procedures. It is important that the project
proposal not undergo substantive changes with regard to the proposed production rates
and methods, and capacities of the facilities. Changes to the production plan subsequent
to the application could delay the permitting process.
OTHER LICENSING REQUIREMENTS
The Project will have to be evaluated for additional federal requirements including, but
not limited to:



Fisheries Act
Canada Water Act
Canadian Environmental Protection Act
Provincial permits and legislative requirements are summarized as follows:
PERMIT TO TAKE WATER
Before construction and operation of the proposed freshwater intake facility from Rioux
Lake, Pele Mountain will be required to obtain a permit to take surface water (PTTW). A
permit to take groundwater will also be required for mine dewatering.
CERTIFICATE OF APPROVAL: INDUSTRIAL SEWAGE
During operations, active recycling of all contaminated liquids will be the dominant water
management strategy employed at Eco Ridge Mine. However, when process water
must be released, it will be treated and discharged to a marshy area south of the
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processing facility, which eventually drains to Rioux Lake, two kilometres further south.
The industrial sewage treatment system needed to handle the process water will require
a certificate of approval for industrial sewage.
It should be noted that significant
quantities of sludge will be generated through the uranium and REO processes that
must be managed.
CERTIFICATE OF APPROVAL: AIR
A Certificate of Approval – Air is required for the ongoing operation of any equipment
that may discharge a contaminant, potentially including noise and vibration, to the
atmosphere. Potential contaminant sources include the mine openings, roads, tailings
facilities, and the processing plant.
MINISTRY OF NORTHERN DEVELOPMENT, MINES AND FORESTRY CLOSURE PLAN
In Ontario, a company cannot commence mining operations until it files a certified
closure plan with the Ministry of Northern Development, Mines and Forestry (MNDMF).
The closure plan must include information such as current project site conditions, a
project description, rehabilitation measures, monitoring programs and procedures, and
expected ultimate site conditions. In addition, an estimate of the cost to rehabilitate the
site must be provided, along with financial assurance.
MINISTRY OF NATURAL RESOURCES WORK PERMIT (LAKES & RIVERS IMPROVEMENT
ACT)
Before construction and operation of the proposed freshwater intake facility, and
potentially other facilities, Pele Mountain will be required to obtain a Work Permit from
the Ontario Ministry of Natural Resources (MNR).
WASTE GENERATOR REGISTRATION
Waste of a type or amount considered "registerable" or "hazardous" as defined under
the Environmental Protection Act, Reg. 347 requires the waste generator to be
registered.
A preliminary Project schedule is presented later in this report, in Figure 24-1. The
schedule includes the CNSC EA and licensing process due to the critical role that this
process will play in determining the overall timeline of the Eco Ridge Mine.
Pele
Mountain currently plans to re-initiate consultations with CNSC during the summer of
2012 and the schedule will be revisited based on any feedback provided at that time.
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Overall, the schedule is considered to be optimistic. Although technically feasible, recent
experience suggests that one or more factors could result in substantive delays to the
schedule as presented.
ENVIRONMENTAL ASSESSMENT
Prior to any licence being granted, CNSC must meet obligations under the Canadian
Environmental Assessment Act (CEAA). Under CEAA, an application for a licence to
prepare a site and construct a new uranium mine or mill requires an environmental
assessment (EA) of the potential environmental impact of the proposed project. The EA
is a planning document and the purpose of the EA is to identify whether a project is likely
to cause significant adverse environmental effects, taking into account the appropriate
mitigation methods. Only when this determination has been made can the federal
authority issue a licence. The proposal may trigger other EAs by other federal or
provincial departments. These EAs would likely be coordinated and harmonized to avoid
duplication for the proponent.
New projects that are not being constructed within the boundaries of an existing mine or
mill normally require that a Comprehensive Study be conducted by CNSC, however, it is
also possible that a Panel Review will be required instead of a Comprehensive Study.
The CNSC guidelines suggest a project “could be referred to a mediator or to a review
panel if public concerns warrant it”.
The first step in the EA process involves the issuance of EA Guidelines by CNSC. The
EA Guidelines identify the scope of the project and the factors to be included in the EA,
including the identification and assessment of possible mitigation measures for possible
adverse environmental effects. CNSC also prepares a Comprehensive Study Track
Report (CSTR) which describes and discusses any public concerns, potential adverse
environmental effects, and the ability of the comprehensive study to address any issues.
These two documents, the EA Guidelines and the CSTR, are issued by CNSC staff for
public review and comment and submitted to the Commission Tribunal for consideration
at a one day hearing. CNSC then submits the CSTR and its recommendations to the
Minister of the Environment. If it is decided that the EA will continue as a comprehensive
study, CNSC delegates the completion of the technical studies and preparation of the
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EA to the proponent. The proponent must then provide all information necessary to
satisfy the approved EA Guidelines. The proponent’s Study Report is reviewed and
analyzed by technical specialists at CNSC and other federal authorities.
The CSTR is then submitted to the Minister of the Environment, with public consultation
on it being conducted on behalf of the Minister by the Canadian Environmental
Assessment Agency (CEAA). The Panel managing the EA process may rely heavily on
issues and concerns raised by the public.
The Minister of Environment issues a
statement on whether the proposed project is likely to cause significant adverse
environmental effects, taking into account the mitigation measures and programs. If the
decision is that there would not be significant adverse environmental effects, CNSC may
proceed with the licensing process.
Successful completion of the EA process includes several aspects, as follows:

Presentation of detailed plans for all aspects of the proposed mine
development;

Consideration of concerns with a new mine development from stakeholders in
the Elliot Lake area, First Nations peoples, and interest groups;

Demonstrations of very low ecological and human health risks, including the
assurance that the mine will implement rigorous environmental management
standards; and

On closure, assurance that the facilities will require minimal continuous care
and maintenance.
The sequential steps in the EA process are as follows:












Completion of Project Optimization Assessments
Collection of Baseline Environmental Data and Information
Preparation of a Project Description
Preparation and Submission of Applications to CEAA and CNSC
Establishment of the EA Scope and Appointment of a Panel
EA Scope Public Hearings
Issuance of EA Guidelines
EA Preparation by the Proponent
EA Submission, Regulatory Review and Proponent Response
EA Panel and Public Review
Panel Recommendation to Minister
Ministerial Decision
In preparation for an application to CNSC for a licence to develop the Eco Ridge Mine,
studies were initiated in 2007, continuing into 2008 and beyond to identify and collect
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site-specific environmental data on the proposed project site. These studies were
designed to meet the initial needs for a pre-project baseline study which will be a
requirement of the EA needed to support the application.
INFORMATION REQUIRED FOR THE PREPARATION OF AN
ENVIRONMENTAL ASSESSMENT
BASELINE STUDIES
Formal requirements for baseline studies will be specified in the EA Guidelines that will
be issued by CNSC.
However, based on past experience and current trends,
reasonable assumptions on the anticipated requirements for the baseline studies can be
made. Four major components may be considered:
1.
2.
3.
4.
Assessment of Biophysical Environment;
Socio-Economic Survey;
Decommissioning and Closure; and
Preliminary Risk Assessment
The baseline environmental studies conducted in 2007 and 2008 provided a preliminary
characterization of current conditions over an area that may be influenced by the
proposed mine and waste management facilities that are planned to be established on
the property. Building off the findings of the initial baseline studies, Pele Mountain is in
the process of developing a comprehensive environmental site characterization program
that will be initiated during the summer of 2012. Additional baseline monitoring needs
may also arise from the eventual EA guidelines. Contact should be made with CNSC
staff early in the next evaluation stage to solicit guidance on the preparatory work for the
licensing application.
Significant regional baseline information has been accumulated (much is publicly
available) and will be utilized during the preparation of an EA. For example, there are
significant reports from various investigations sponsored by the former Elliot Lake mine
operators as well as detailed field studies under the National Uranium Tailings Program.
The Ontario Ministry of the Environment also has a data bank of area monitoring
information.
Access to proprietary information and data (e.g., Rio Algom (BHP Billiton) and Denison)
would be subject to negotiation.
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GEOGRAPHIC MAPPING
Geographic mapping has been completed from existing 1:50,000 topographic maps
supplemented with detailed, excellent quality topographic mapping from aerial
photography conducted in 2007.
Authorization was obtained by Pele Mountain for
Expert Access on-line to all the MNR mapping databases. Project maps have been
prepared showing all the existing salient natural and man-made features and these are
filed in hard copy and electronically.
As a guide for upcoming baseline characterization work, maps have been prepared
showing the Site, Local, and Regional Study Areas.
These study areas reflect the
different potential zones of influence that the Project may have on the environment,
including the potential for cumulative effects. It is recommended that Pele Mountain
request that the CNSC apply the same study areas in the EA Guidelines for the Project.
An initial estimate suggests that the boundaries of the potentially affected area
encompass the Serpent River Watershed from the closed Quirke and Panel mine sites in
the north, Dunlop and Elliot lakes in the west, and Pecors Lake in the east (the city of
Elliot Lake boundary), down to Lake Huron in the south – including the Serpent River
First Nation.
CLIMATE AND METEOROLOGY
Existing climate information will be summarized and a gap analysis completed. Recent
climate and meteorology data are extensive, with the data collected by the weather
service of Environment Canada Elliot Lake airport station and by previous mine
operators. An ongoing gap analysis will indicate the requirements for additional data
acquisition to complete an outline of the local climate and detailed analyses for the
proposed development. It is not expected that a dedicated weather station on the Eco
Ridge Mine property will be required for the EA.
Key elements of climate and meteorology include:





Wind speed and direction
Atmospheric stability
Mixing layer heights
Precipitation and evaporation
Temperature and solar radiation
A preliminary analysis of the effects of global climate change in the near term (life of the
Project) and long term (100 years) will be required to determine what additional studies
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may be required to complete an outline of the effects of climate change on the proposed
Project. This is a requirement of current EAs.
GEOLOGY
Surface geology can be summarized from existing data and from surface surveys.
Surface geology surveys will outline rock outcrops and types, solids and glacial-remnant
produced features such as eskers and moraines.
Bedrock geology is well documented in existing reports as well as detailed on-site
investigations conducted by Pele Mountain. The mineralogy of the property has also
been investigated extensively as part of site characterization studies.
HYDROLOGY
The hydrology of the Serpent River Watershed is well understood and documented. The
property has been surveyed to describe watersheds within the property.
Further
investigations will be required to determine the mean and max/min stream flow rates and
the flows following a Probable Maximum Precipitation (PMP) event will have to be
calculated. Historically, the PMP for Elliot Lake has been estimated to be 42 cm of rain
in 12 hours. This estimate may be revised when considering the predicted effects of
climate change during the proposed operational period for the Project.
Recently, Pele Mountain has carried out extensive site surveys of the property and
produced detailed hydrologic mapping showing all streams, lakes and ponds within the
property boundary. Descriptions of the area, each lake and stream are documented
together with a significant database of site photographs. Bathymetric lake surveys were
also completed in 2007 for the following lakes: SSM 223 (Pear Lake), Pardee, Stinson,
Kings and small ponds 8 and 9.
A detailed aquatic survey was completed for Rioux Lake in 2008. The aquatic survey
was conducted by the Fresh Water Ecology Unit, a branch of the Ministry of Natural
Resources (MNR) affiliated with Laurentian University.
Significant historical information has been obtained for the following lakes in the vicinity
of the Project: Tees, McCarthy, McCabe, Elephant, Flying Goose, Hough, and May.
Throughout 2008, regular inspections were made of streams, including sampling and
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flow measurements. No fixed stream flow monitoring has been installed to date - data is
from occasional site visits. As the Eco Ridge property is sited primarily on the top of an
escarpment, there are no major rivers or streams discharging from the property. In fact,
all streams on the property have been found to be intermittent.
Water bodies and streams in the Project area were identified during initial site
characterization studies. Principal properties and potential chemicals of concern have
also been identified. For all the sampling locations, key data has been documented
including locations with photos. Sampling and analytical protocols have been developed
and used.
Surface water samples for key locations were obtained routinely through the summer of
2008, with 79 samples sent to accredited laboratories for analysis including full metal
scans and some radiological analysis. A similar but more comprehensive program is
scheduled for the summer of 2012.
HYDROGEOLOGY
The extensive studies carried out for the earlier Elliot Lake mines clearly indicated that
the bedrock in the region was relatively impervious and that groundwater movement was
primarily controlled by and confined to the overburden or structural features.
SRK Consulting (SRK) completed a Preliminary Groundwater Scoping Study from June
2008 to November 2008. The study concluded that the permeability of the Huronian
Metasediments (quartzite and quartz pebble conglomerate) was very low – typical of
previous experiences in the Elliot Lake area.
The study also concluded that the
dewatered mine was likely to provide a regional hydraulic capture while in operation.
This would contain potential contamination. Once pumping ceased and the mine began
to flood, the groundwater regime would return to pre-mining conditions.
SRK recommended that pre-mine groundwater monitoring of horizontal and vertical
gradients, as well as water chemistry, was needed to increase the confidence of
contaminant modelling.
Further structural and hydrogeology testing, analysis, and
modelling would be required as the Project advances. These additional studies would
be integrated into a comprehensive baseline characterization program for the site.
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AQUATIC BASELINE STUDY
BASELINE AQUATIC ECOSYSTEM
Eco Ridge Mine site specific environmental studies were initiated in 2007 through Blythe
and Associates who carried out aquatic characterization studies.
The assessment
encompassed identification of the Project watershed and adjacent areas, definition of
potentially affected water bodies, as well as water bodies that did and would represent
unaffected, background conditions.
Existing data for these lakes, streams, ponds, and wetlands was verified and
supplemented with additional bathymetry and water column characteristics. Aquatic and
shoreline vegetation was recorded. Water, sediment, benthos, and fish were identified
through specific sampling and monitoring.
The study concluded that the Project would be sited within a well understood Northern
Ontario ecosystem with no unusual or remarkable features and that further research was
required to assess in more detail, for environments which would be disturbed (proposed
locations of mine sites, mine infrastructure, and access roads), what mitigation measures
would be appropriate and the scope of the rehabilitation measures required upon
closure. Further information on the surveys is provided in the following sections.
AQUATIC VEGETATION
A baseline survey of aquatic macrophytes (plants in the water) was conducted and
reported in the Aquatic Ecosystems Characterization Report submitted by Blythe and
Associates in July 2008. The results of this survey indicated that the aquatic vegetation
was unremarkable and reflective of typical undeveloped forested lands in much of
northern Ontario.
FISH
The Aquatic Ecosystems Characterization Report indicates that none of the aquatic
ecosystems within the Pele Mountain property sustain populations of rare fish as
designated by the federal Species at Risk Act, the provincial Endangered Species Act
2007, or the natural heritages protection component of the Ontario Planning Act.
Information on fish in lakes and streams outside the Pele Mountain property (e.g.,
Pecors, King, and McCabe lakes) will be derived from historical information.
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BENTHIC INVERTEBRATES
Benthic invertebrate sampling was conducted in all lakes surveyed in the Aquatic
Ecosystems Characterization Report (July 2008) by Anishinawbek/Ontario Fisheries
Resource Centre and the samples were analyzed by the Cooperative Freshwater
Ecology Unit at Laurentian University in Sudbury, Ontario. The results of the benthic
invertebrate survey indicate that the benthic invertebrate populations found within the
various inlet and outlet stream courses of the Pele Mountain property are comparable to
those values found in other locations in this part of Northern Ontario.
A comprehensive aquatic baseline characterization program is currently being developed
for the Eco Ridge property. The additional aquatic studies are anticipated to include
further water quality sampling, benthic and fish inventory surveys, habitat mapping and
sediment sampling.
The aquatic baseline study is also expected to include
measurements of flow rates from the streams to assist with the characterization of local
hydrology and preparation of an overall water balance for the site.
BASELINE TERRESTRIAL ECOSYSTEM
A preliminary site-specific study of the terrestrial environment was also conducted in
2007 by Blythe and Associates. The scope of the study included soils and topography,
surface drainage, climate, land use, vegetation, wetlands, birds, and animals. The study
has been supplemented with additional site inspections conducted in 2008. This
information, comprising field notes, sketches, and photographs, has been documented
and filed. Regional data on vegetation has been obtained and filed.
Two wildlife species at risk are known to occur near the Pele Mountain property, the
Blanding’s turtle and the peregrine falcon. No peregrine falcons have been observed on
the property.
One Blanding’s turtle has been observed near Highway 108,
approximately five kilometres to the southwest of the main area of development for the
Eco Ridge Mine.
The preliminary terrestrial study concluded that the Project would be sited within a well
understood Northern Ontario ecosystem with no unusual or remarkable features. It was
also concluded, however, that additional characterization studies would need to be
performed once a preliminary design concept for the mine had been developed (e.g.,
proposed locations of mining operations, tailings management areas, mine infrastructure
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and access roads). The conceptual design of the Project is now sufficiently advanced
that these additional terrestrial investigations can be initiated. A comprehensive
terrestrial baseline characterization program is currently being developed and is
scheduled for implementation during the second half of 2012.
BASELINE SOILS STUDY
Baseline soils sampling will need to be conducted in order to establish background
levels of metals and radionuclides within soils that have the potential to be affected by
the mining operation.
This requirement will be addressed during 2012 site
characterization studies.
BASELINE AIR MONITORING
A baseline air quality monitoring program will be implemented to confirm predevelopment concentrations of relevant parameters. At a minimum, air sampling will
evaluate the following:



Total suspended particulate (TSP);
Particulate less than 10 µm in diameter (PM10, or inhalable particulate); and
Particulate less than 2.5 µm in diameter (PM2.5, or respirable particulate).
Additional monitoring may also be conducted to determine baseline concentrations of
potential contaminants (e.g., metals in particulate matter). The air quality monitoring
program will be conducted during multiple seasonally representative periods. Based on
preliminary planning, monitoring stations will be established at the following locations:



Elliot Lake Municipal Airport;
Pele Mountain Elliot Lake Uranium Project site; and
The City of Elliot Lake.
BASELINE NOISE MONITORING
Minimal baseline noise monitoring is needed. Other than noise generated by the use of
the all-terrain vehicle (ATV) and snowmobile trails and hiking trails, noise levels on the
Project property are expected to represent general background conditions. This will be
confirmed through the implementation of a cursory noise monitoring program.
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RADIOLOGICAL MONITORING
Baseline radiological monitoring of the site is required. Based on preliminary planning, it
is expected that this program will include:

A scanning gamma radiation survey to determine the variability in gamma
radiation levels on the site;

A radon-in-air / thermoluminescent dosimeter (TLD) sampling program; and

Soil sampling for radionuclides and other elements.
DECOMMISSIONING AND CLOSURE PLANNING
After removing all underground equipment, Pele Mountain will permanently close the
decline ramps and all other mine openings in accordance with regulatory requirements.
If there is an outflow from any of the mine openings it may require treatment to meet
appropriate water quality standards until it can be demonstrated that adverse impacts to
the environment are not occurring.
Following closure of the mine and removal of surface infrastructure (the processing
plant, roads, etc.) evidence of the mine will be limited primarily to the TDF. Preliminary
planning anticipates that the decommissioning of the facility will involve the following:

Installation of a soil cover over tailings to minimize infiltration and prevent tailings
erosion;

Decommissioning of containment dams to drain the tailings pond;

Removal of the emergency tailings pond and disposal underground; and

Revegetation of soil covers.
The closure plan for the TDF will minimize the need for long-term care and maintenance,
including requirements for effluent treatment. However, drainage from the facility may
require treatment during a transition period following closure.
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ENVIRONMENTAL RISK ASSESSMENTS
In order to identify all potential environmental risks pertaining to the Project, Human
Health and Ecological Risk Assessments will need to be conducted during the EA
process. Taking into consideration the extensive documented experience in the Elliot
Lake mining camp with uranium mine operations and decommissioning, it is expected
that all significant risks can be effectively managed.
PERMITTING AND ENVIRONMENTAL ASSESSMENT COSTS
As indicated above, once the Project has been registered, and it is decided that the EA
will continue as a comprehensive study, the CNSC will delegate the completion of the
technical studies and preparation of the EA to the proponent. The proponent must then
provide all of the information necessary to satisfy the approved EA Guidelines. The
proponent’s Study Report will be reviewed and analyzed by technical specialists at the
CNSC and other federal authorities. The costs associated with the preparation of the
EA, for hearings, and for permitting are not known in detail at this time, however, these
costs could be in the range of $7 million to $12 million.
ENVIRONMENTAL MANAGEMENT STRATEGIES
TAILINGS MANAGEMENT
A preliminary tailings management design concept for the Eco Ridge Mine was prepared
by Golder Associates in 2012. The design is based on assumed LOM production of 34
Mt and a total estimated tailings volume of 24 million cubic metres. Of this total, roughly
half of the tailings will be returned to the mine as cemented paste backfill and the
remainder will be disposed in a TDF on surface.
The following summarizes
environmental considerations that were incorporated into the preliminary TDF design:

No impact on the Stinson Lake watershed which is located north of the TDF and
discharges into Buckles Creek – receptor of effluent from Nordic Mine.

Minimize water discharge into the environment.

Reduce the collecting watershed by diverting clean water runoff away from the
site infrastructure.

Collect mine and process plant drainage.

Contain tailings solids and pore-water during operations and following closure.
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
Minimize groundwater impact.

Minimize air borne release of tailings.

Treat tailings pond effluent for radium and acidity, if required, to meet appropriate
water quality standards during operation and in the transition period to closure.

Control radiological releases (radon gas, gamma radiation, radium) in
accordance with the As Low As Reasonably Achievable (ALARA) principle.

Reduce the potential for effluent treatment for the long-term.

TDF to perform in perpetuity.
Additional testing is required to determine the environmental and geotechnical properties
of tailings from the Eco Ridge Mine. In particular, studies are required to verify the acidproducing potential of the tailings and any implications on TDF designs and water
management. As part of a broader program of laboratory studies, Pele Mountain is
currently developing a work plan to characterize the environmental properties of tailings.
It is currently expected that this work will be performed on tailings produced from pilot
scale mineral processing tests that are planned for 2012.
WATER MANAGEMENT
Specific requirements for the management of water have yet to be developed. Water
management plans are currently based on the following principles:

Maximize use of mine water and recycle of process water.

Minimize contamination of fresh water, including storm water.

Treat, monitor, and discharge water to the highest level of water quality. Water
treatment will use proven technology to neutralize acidity and remove suspended
solids, heavy metals, uranium and radium-226 to below established discharge
standards. Treated water will be held in monitoring ponds before discharge.

Sludge disposal during operations is assumed to be disposal underground as
backfill in mined-out areas of the mine.

An extensive water, sediment, and biology monitoring program will be
established. This monitoring program will ideally include local peer review.
WASTE MATERIALS
Waste materials will be recycled and managed according to best practices. It is planned
that radioactively contaminated materials will be disposed of in a secure landfill on site,
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or in long-term storage underground.
Such disposal would be in conformance with
requirements stipulated by CNSC and other regulators.
AIR EMISSIONS
Principal sources of air emissions include mine ventilation (e.g., radon) and activities
related to the movement/management of ore and tailings on surface (e.g., particulate
matter). There is also a potential that the processing facility will produce emissions to air
(e.g., from the “acid baking” of ore). The potential effects of these emission sources will
be monitored at the facility boundaries and in the surrounding area.
SOILS
Soils near mine facilities may be subject to fallout from airborne emissions. Monitoring
programs will be required to identify any changes from baseline conditions.
OCCUPATIONAL HEALTH AND SAFETY
Health and safety requirements in Ontario mines are regulated under the Occupational
Health and Safety Act (OHSA). The philosophy behind the law is known as the “internal
responsibility system”.
Although this term is not mentioned in any legislation, the
Ministry of Labour’s guide to the act makes it clear that the government expects
employers and workers to cooperate to control occupational health and safety hazards.
Pele Mountain developed an Occupational, Safety, Health and Environmental Policy
dated May 2007. Together with RPA, Pele Mountain developed the “Best Management
Practices and Exploration Guidelines for the Pele Mountain Resources Elliot Lake
Project”, which is specific to the Eco Ridge Project and uranium exploration.
Environment and health and safety inspections have been carried out on the Project by
Pele Mountain and SENES Consultants Limited. Several gamma and radon surveys
have been conducted at Pele Mountain’s core logging and storage facility in Elliot Lake
and at an active drill site by Denison Environmental Services. Denison reported that the
radiation levels were very low and there were no health or safety concerns.
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LEGISLATION
Operations at the Project will have to comply with:
a. The Occupational Health and Safety Act and Regulations for Mines and
Mining Plants. R.S.O. 1990
b. The Nuclear Safety and Control Act, Uranium Mines and Mills
Regulations (SOR/2000-206)
HEALTH AND SAFETY RELATED TO URANIUM MINING AND PROCESSING
RADON GAS
The primary health concern with uranium mining is exposure to radiation/radioactivity.
Historic studies have concluded that radon gas exposure in high concentrations causes
lung cancer. These studies have been updated (CNSC, 2004) and the implementation
of stringent health and safety standards have resulted in significantly lowering the radon
level in today’s uranium mines. Today’s uranium miners are exposed to very low levels
of radon and there is a very low risk of lung cancer from occupational exposure to radon.
The study has found that uranium workers and Canadian citizens in general face a
comparable risk of getting lung cancer from exposure to radon gas.
Radon levels are now lower in mines due to the increased awareness of the link
between high levels of radon and lung cancer. The use of modern ventilation systems
and other measures diminish these risks. Modern health and safety regulations keep the
doses in mines so low that exposure no longer poses a significant concern.
CNSC (2003) has issued a regulatory guide to ventilation requirements for uranium
mines and mills (G-221, June 2003) based on the Uranium Mines and Mills Regulations.
The proponent for a licence to construct a uranium mine and processing facility is
required to submit information on:



The proposed ventilation and dust control methods,
The proposed equipment for controlling the air quality, and
The proposed level of effectiveness of and the inspection schedule for the
ventilation and dust control system.
CNSC will review any proposed ventilation systems or activities against regulatory
requirements. The proposal will also need to outline a quality assurance program, the
results from process hazard analyses, and a proposed code of practice.
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As part of any ongoing feasibility studies, Pele Mountain will need to develop a radiation
protection policy and procedures. The procedures and systems will need to address
dust control, radiation control, and hygiene standards for workers handling uranium
oxide concentrate.
HEALTH AND SAFETY PROGRAMS
To meet or exceed legislation, Pele Mountain will use OHSAS 18001 as the basis for its
Health and Safety Management Systems. Included in these management systems will
be:
1.
Development of an Occupational Health and Safety Policy for the Elliot Lake
operation. The policy shall:
a. Be appropriate to the nature and scale of the organization’s Health and
Safety risks;
b. Include a commitment to continual improvement;
c. Include a commitment to comply with current applicable Health and
Safety legislation;
d. Be documented, implemented and maintained;
e. Be communicated to all employees with the intent that employees,
associates and contractors are made aware of their Health and Safety
obligations;
f. Be available to interested parties;
g. Be reviewed periodically to ensure that the policy remains relevant and
appropriate to the organization.
2.
Assignment of Health and Safety responsibilities. Each individual must be fully
aware of their responsibilities and held accountable. Health and Safety activities
will be established, communicated and performance measured.
3.
Orientation and Training. Ensures staff has the necessary knowledge and skills to
perform their duties safely and efficiently.
4.
Risk evaluation. Using risk analysis matrices focuses management attention on
high risk activities.
5.
Hazard Assessment. A formal methodology for identification, evaluation, and
control of hazards.
6.
Planned inspections. Systematic examinations of workplaces, materials, and
practices.
7.
Safe Work Practices and Best Practice. Includes occupation inventory, task
analysis and procedures, safety manuals, housekeeping, personal protective
equipment, etc.
8.
Emergency Preparedness. Contain and control emergencies including fire,
property loss, medical evacuation, spills, site and personnel security, and
environmental damages.
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9.
Incident Reporting. Systems and procedures for the reporting of incidents,
accidents, property loss, and development of records.
10. Investigations.
Formalized
investigations
of
any
undesired
Responsibilities, accountabilities, and record keeping defined.
event.
11. HSE Communications Primarily internal communication of Health and Safety
issues and concerns. Safety meetings, huddles, tool box meetings.
12. Occupational Health. Travel safety, medical and security issues, and corporate
health initiatives.
13. Contractor Health and Safety. Contractor qualifications, Health and Safety
responsibilities, and legislative requirements.
14. Engineering and Control Systems. Purchase, modification, and installation of
designs, equipment, and systems. Management of change procedures.
15. Records. Requirements, systems, and access to Health and Safety records and
information.
16. Health and Safety Management System Evaluation. Periodic evaluations and
audits of management performance and Health and Safety systems.
17. Corrective Action and Continuous Improvement. Guidelines for non-compliance
with Health and Safety standards. Correction of deficiencies. Action plans for
Health and Safety improvement.
WORKER PROTECTION
To comply with the Uranium Mines and Mills Regulations, Pele Mountain will develop the
following information in relation to worker protection:

The effects on the health and safety of persons that may result from the
activity to be licensed, and the measures that will be taken to prevent or
mitigate those effects.

The proposed program for selecting, using, and maintaining personal
protective equipment.

The proposed worker health and safety policies and programs.

The proposed positions for and qualifications and responsibilities of radiation
protection workers.

The proposed training program for workers.

The proposed measures to control the spread of any radioactive
contamination.

The proposed ventilation and dust control methods and equipment for
controlling air quality.
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
The proposed level of effectiveness of and inspection schedule for the
ventilation and dust control systems.
In addition, Codes of Practice will be required that include action levels for specific
radiation exposures that identify the action to be taken and reporting procedure.
The Radiation Protection Regulations of the Nuclear Safety and Control Act regulates
the following:





Obligation of Licensees and Workers
Radiation Dose Limits
Dosimetry
Labelling and Signs
Records to be kept
Radiation Protection programs are required to keep exposure to radon progeny as low
as is reasonably achievable. Dose limits for exposure to radon progeny are regulated
under the Radiation Protection Regulations.
Management standards, worker training, adequate ventilation, close monitoring, and
extensive audits will ensure compliance with the Act.
COMMUNITY RELATIONS
The EA process will require extensive public consultations. For example, it is expected
that Aboriginal groups (the Serpent River First Nation in particular), non-governmental
organizations, and local citizens from the City of Elliot Lake will have questions
concerning the Project. These questions may include:

The impact of the Project on tourism and outdoor recreational activities in the
area. There are ATV and snowmobile trails on the Project property and local
residents use the area for casual recreational purposes.

The impact of the Project on water quality, particularly within the Serpent
River and other downstream water bodies where fishing occurs.

Management of solid and liquid wastes. Management of the Tailings Disposal
Facility will be an important concern, for both the operational and post-closure
periods.

Long term site remediation and closure.
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
Noise and traffic affecting other land uses (e.g., the local golf course which is
adjacent to the Project property).

Dispersion of airborne contaminants.

Concerns about nuclear power in general.

The loss of habitat or access due to construction of site infrastructure.
Extensive, proactive, and meaningful consultation will assist in addressing public
concerns. However, it should be understood that certain “public interest” groups are
committed to oppose uranium mining and nuclear power under any circumstances and
there is a possibility that such groups can mobilize substantial public support.
CITY OF ELLIOT LAKE
ELLIOT LAKE ECONOMIC DEVELOPMENT STRATEGY
The City of Elliot Lake was originally developed for the sole purpose of supporting
uranium mining and processing and remained a single-resource community until the
early 1990s when the mines closed. The City of Elliot Lake is proud of that mining
heritage. During the period when the uranium mines were operating, Elliot Lake’s
population reached 25,000. Since the closure of the mines, the City has developed
alternative economic plans. Most notably, the highly successful “Retirement Living
Program” was initiated to attract retirees to rent or buy vacant housing units.
By
attracting more than 4,000 new residents, the program has enabled the city to enjoy a
market position as a favourable retirement destination. The influx of retirees has
stabilized the population and allowed the city to develop its tourism and recreational
infrastructure. It has also resulted in new residents that are less familiar and perhaps
less sympathetic with the mining heritage of Elliot Lake.
Cottage lot development has been another local initiative that has enjoyed a measure of
economic success. After several years of negotiations with the Ministry of Natural
Resources, Elliot Lake was able to get approvals for a potential 400 lots on ten lakes
north of the city. In 2004, 62 waterfront lots became available on Dunlop Lake and
Quirke Lake. Many of the buyers are retirees who have built permanent homes on the
waterfront lots. None of the developed cottage lots are located on the Eco Ridge Mine
property.
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These two initiatives coupled with the development of business opportunities are
described as the three “pillars” of the local economy.
The mission statement of the City of Elliot Lake is “to continue the growth and cultural
diversity of Elliot Lake as a modern, well-connected community with business
opportunities, active retirement, and all-season tourism, in a pristine natural
environment.”
Pele Mountain has communicated with the incumbent Mayor, members of the City
Council, business leaders, and citizens on numerous occasions to keep them informed
of Pele Mountain’s ongoing exploration program in the area and future plans. The
discussions to date have been open and productive.
NORTH SHORE COMMUNITIES
The Township of the North Shore along Highway 17 (Sprague, Algoma Mills, and
Serpent River Village) has a population of 549 residents, based on the 2006 census.
These communities benefited economically from the mining industry and there is
considerable interest in renewed drilling and exploration activity in the area. There was a
considerable negative impact on the communities when the mines shut down.
The economy of the communities along the North Shore is largely dependent on the
tourism industry. Lake Lauzon and the North Channel are popular swimming, fishing,
and boating areas.
ABORIGINAL INTERESTS
The Serpent River First Nation is located in the southern portion of the Serpent River
drainage basin near the outlet of the river into Lake Huron.
The Anishnawbek First Nations were among the original inhabitants of the region. In
1850, the Anishnawbek First Nations signed the Robinson-Huron Treaty with the Crown,
creating Indian reserves, including the Serpent River First Nation Reserve (the Reserve)
of 10,913 ha, within the Serpent River Watershed. The claims held by Pele Mountain
are in the area covered by the treaty and the treaty gives First Nations persons “full and
free privilege to hunt over the territory – and to fish in the waters thereof” (traditional land
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use). Under the treaty, all mining rights were retained by the Crown. Pele Mountain
acquired its exclusive interest in the mining rights from the Crown pursuant to the
provisions of the Ontario Mining Act.
The Serpent River First Nation has been directly affected by several aspects of the
historic uranium mining activities at Elliot Lake. Examples of the issues that have
affected the Serpent River First Nation include:
1.
The construction of a sulphuric acid plant on the Reserve in 1955, which was
closed in 1962 without adequate decommissioning of the site. It was not until
1989 that the site was declared a hazard and was decommissioned.
2.
Concerns about the health of the Serpent River Watershed were raised
following the recognition that the watershed was being damaged by the
uranium mining operations. The Serpent River First Nation became involved
in the hearings with the provincial Environmental Assessment Board to
prevent the mining companies from causing further damage to the Serpent
River Watershed. They claimed that they had been forced to bear the
environmental costs of the development of the uranium mining industry, and
in their opinion, the mining companies should reimburse their costs. The
hearings lasted three years and the Board noted in the final report issued in
1979 that lack of communication between the mining companies and the
Reserve was a problem, stating: “A considerable portion of the band’s
concerns result from a general lack of communication… the mining
companies did not make any serious attempt to find out what the band’s
concerns were with respect to the expansion and to address these in their
submissions to the Board.”
3.
The Serpent River First Nation actively participated in the scoping sessions
held on the Reserve in December 1993 by the Federal Environmental
Assessment and Review Office (FEARO) Panel on the decommissioning of
the tailings. The band raised concerns that there was no proposal to restore
the lands for their use or any discussion on the social impact of the loss of
historical hunting and camp areas to the tailings managements facilities
(TMAs).
The mining legacy has been a continuous issue for the people of the Serpent River First
Nation. Concerns related to the loss of access to their traditional lands because of the
TMAs and the health of the Serpent River Watershed which suffered damage during the
early days of mining activity before the damage was recognized and preventive methods
were developed and implemented.
Effective communications will be important in order to address a wide range of concerns
relevant to all potentially affected Aboriginal peoples. The Crown will also have a role to
play in the communication and consultation process.
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ARCHAEOLOGICAL ASSESSMENT
Archaeological investigations, specific to the Project property, are required. Detailed
archaeological investigations have been conducted in the Serpent River basin in the
past. Significant sites have been identified, but details remain confidential in order to
protect the integrity of the locations.
Archaeological Services Inc. (ASI) was contracted by Pele Mountain to conduct a Stage
1 archaeological assessment of the Proposed Eco Ridge Mine. The assessment was
completed in August 2008. During the course of the assessment one archaeological
site, the Kings Lake site, was identified. The Stage 1 archaeological assessment
identified site potential within the undisturbed areas of this study area and recommends
that a Stage 2 assessment be conducted in areas of archaeological potential prior to any
land disturbance.
COMMUNITY CONSULTATIONS
Consideration of licence applications for new uranium mines and mills by CNSC follows
a public hearing process. Typically, public hearings take place over two days within a
ninety-day period following public notice. In addition to the formal public hearings, CNSC
encourages licence applicants to undertake pre-application consultation activities
regarding their potential plans for new uranium mines and mills.
A preliminary project communication plan has been developed by Pele Mountain to
ensure accurate and timely dissemination of project information. The communication
plan has led to friendly, open, and productive dialogue between Pele Mountain and both
the Serpent River First Nation and the City of Elliot Lake. Notwithstanding this early and
positive progress, a more robust public consultation and engagement program will be
required as the Project advances through the EA and regulatory approvals process.
Pele Mountain has initiated the preparation of a strategy for such a program.
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21 CAPITAL AND OPERATING COSTS
CAPITAL COSTS
The total Project capital costs are presented in Table 21-1.
TABLE 21-1 OVERALL CAPITAL COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Component
Mine
Processing
Initial
(C$ 000)
61,185
Sustaining
(C$ 000)
25,235
TOTAL
(C$ 000)
86,420
229,806
-
229,806
25,000
10,000
35,000
Indirects
114,561
-
114,561
Tailings
24,685
22,935
47,620
Mine & Process Sustaining Capital
-
24,000
24,000
Site Decommissioning & Monitoring
-
22,000
22,000
Contingency – Process
89,210
-
89,210
Contingency – Mining & Other
18,396
-
18,396
562,843
104,170
667,013
Infrastructure
Total
Note: This table does not include costs of $75.9 million for ore mining during the construction
period. Those costs are included in the cash flow as operating costs.
MINE CAPITAL COSTS
Mine capital costs for equipment and infrastructure purchases are derived from a
combination of supplier quotes and cost reference guides for similar projects. Ramp
development (in ore) is estimated on an operating cost basis.
Costs are presented in 2011 Canadian dollars and do not include taxes and/or duties.
Table 21-2 summarizes total capital expenditure on mining for the LOM.
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TABLE 21-2 MINE CAPITAL COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Component
Initial Capital
(C$ 000)
Sustaining Capital
(C$ 000)
Total Capital
(C$ 000)
Ore Mining
Yr -1, -2 operating cost
75,856
-
75,856
Mine Capital
Mine Portal
1,000
-
1,000
32,028
12,471
44,500
Pastefill Distribution
2,397
2,801
5,197
Mine Infrastructure
25,760
9,963
35,723
Mine Capital
61,185
25,235
86,420
Mobile Equipment
PROCESS CAPITAL COST
The capital costs for the proposed Eco Ridge plant were estimated by SNC-Lavalin and
include estimates for site development, the acid baking plant, the uranium extraction
plant, the Yttrium & REE extraction plant and a water treatment plant. The overall cost
of the acid baking plant, the uranium plant and the Y & REE plant, not including indirect
costs, is C$165 million, C$34 million, and C$20 million, respectively. Other process
costs include C$7.3 million for site development, C$3 million for a water treatment plant.
The capital cost estimate is an order of magnitude estimate to a level of accuracy of
approximately plus or minus 35%. Details of the initial process capital cost estimate are
provided in Table 21-3.
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TABLE 21-3 INITIAL PROCESS CAPITAL COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Component
Capital Cost (C$ 000)
Direct Costs:
Site Development
7,300
Acid Baking Plant
165,366
Uranium Extraction Plant
33,926
Y & REE Plant
20,215
Water Treatment Plant
Sub-total Direct Costs
3,000
229,806
Indirect Costs:
Construction Indirects
10,797
EPCM
45,961
Freight
5,453
Spare Parts
5,350
Contingency
89,210
Sub-total Indirect Costs
Total Initial Capital Costs
156,772
386,600
The process capital cost estimate that was completed by SNC-Lavalin excludes:























Ancillary buildings and services, including any mine related facilities, camp
and general admission
All off-site costs including services to the site
All yard utilities
All utility sources such as water supply, water treatment, electrical substation,
sewage disposal
Any secondary effluent treatment facilities that may be required
Any abnormal soil conditions which result in special foundations or piling
Construction camp or catering
Tailings disposal or pipelines
Rock excavation
All taxes and duties
First fills and initial product inventory
All Owner’s costs
Project interest and financing costs during construction
Project insurance
Working capital
Cost of this and future study work
Disposal/clean-up of existing (if any) hazardous materials
Mitigation for contaminated materials
Operations mobile equipment
Commissioning and commissioning assistance
Training of operations personnel
Land costs
Permits and cost of permitting
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








Environmental studies, investigations and permits
License and Royalty fees
Environmental/ecological/cultural
considerations
incorporated in the design
Cost changes due to currency fluctuation
Escalation beyond 3rd quarter 2010
Force majeure issues
Warehouse inventories other than spares identified
Future scope changes
Sustaining and closure costs
other
than
those
RPA notes that some of these exclusions from SNC-Lavalin’s estimate have been
accounted for, as described elsewhere in this report.
OPERATING COSTS
The total operating costs are summarized in Table 21-4.
TABLE 21-4 TOTAL OPERATING COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Component
C$/t
Mining
41.52
Processing
26.31
G&A
3.50
Total
71.33
MINE OPERATING COSTS
Mine operating costs for the Project have been estimated from first principles and were
based on equipment productivity, operating hours, and operating cost per hour.
Operating costs per hour are based on RPA’s in house data base. Productivities were
based on equipment performance. Labour costs were based on manning the equipment
and Northern Ontario negotiable contract wages.
Salaries have been estimated based on a 2010 PricewaterhouseCoopers annual salary
survey. The third quartile salary figure was used to ensure that the employees will be
encouraged to join and remain once employed. An additional 30% was added to cover
payroll burdens. The hourly rates were based on Sudbury camp collective bargaining
agreements for the periods 2008-2011.
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Material costs were based on supplies and budgetary quotes.
Mine operating costs average shown in Table 21-5.
TABLE 21-5 MINE OPERATING COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Component
Labour
Equipment Repairs
Material Supplies
Mining Cost Subtotal
Indirect Mining Costs
Haulage to surface
Surface stockpile rehandle
Power consumption - Main Fans & pumps
Mine Heating (propane)
Production sampling costs
Delineation drilling costs
Health & safety
Indirect Cost Sub Total
Total mining Opex
Pastefill Costs
Labour
Material & Equipment
Pastefill Sub Total
Total
Total Cost
(C$ millions)
252.2
346.2
492.2
1,090.6
6.82
9.36
13.30
29.48
92.5
46.2
92.5
57.3
18.5
14.0
0.7
321.7
1,412.3
2.50
1.25
2.50
1.55
0.50
0.38
0.02
8.70
38.18
15.9
107.7
123.6
0.43
2.91
3.34
1,536.0
41.52
C$/t
PROCESS OPERATING COSTS
Process operating costs for the Project were estimated by SNC-Lavalin. The labour
costs are estimated from the current labour market rates in northern Ontario and an
additional 45% is added to cover the costs of fringe benefits. Power costs are $0.07 per
kilowatt hour. Reagent consumption is estimated using the preliminary mass balance
and stoichiometry; the reagent unit costs were obtained from various sources, including
published information, historical data, and in-house information.
The annual
consumption of sulphuric acid has been calculated based on an acid:concentrate ratio of
0.3:1 and the price estimated to be $90/t delivered by truck. Maintenance costs are
estimated using factors relating to the capital cost estimate and associated maintenance
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labour costs. The operating cost estimate is split into costs to operate the acid baking
plant, the uranium plant, and the Y & REE plant as shown in Table 21-6.
TABLE 21-6 PROCESS OPERATING COST ESTIMATE
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Area
Labour
Staff Acid Baking with Flotation
Staff USX
Staff Y&REE
Labour Acid Baking
Labour USX
Labour Y&REE
$/year
$6,816,000
$587,500
$587,500
$587,500
$1,684,500
$1,684,500
$1,684,500
Supplies
Reagents Acid Baking Plant
Reagents USX Plant
Reagents Y&REE Plant
Tailings
$58,651,300
$34,624,000
$9,271,020
$13,576,200
$1,180,000
Power
Acid Baking Plant
USX Plant
Y&REE Plant
Reagents USX
Reagents Y&REE
$12,286,100
$10,510,000
$1,052,700
$453,000
$114,400
$156,000
Maintenance
Acid Baking Plant
Uranium Extraction Plant
Yttrium & REE Plant
Reagents Acid Baking
Reagents USX
Reagents Y&REE
General Acid Baking
General USX
General Y&REE
Piping/Electrical/Instrumentation Acid Baking
Piping/Electrical/Instrumentation USX
Piping/Electrical/Instrumentation Y&REE
Labour Acid Baking
Labour USX
Labour Y&REE
$/t
$2.13
$0.18
$0.18
$0.18
$0.53
$0.53
$0.53
$18.33
$10.82
$2.90
$4.24
$0.37
$3.84
$3.28
$0.33
$0.14
$0.04
$0.05
$6,434,800
$2,623,947
$450,135
$290,817
$131,467
$45,008
$6,340
$22,229
$24,449
$20,354
$557,629
$121,629
$65,318
$691,800
$691,800
$691,800
TOTAL OPEX
$84,189,000
$2.01
$0.82
$0.14
$0.09
$0.04
$0.01
$0.00
$0.01
$0.01
$0.01
$0.17
$0.04
$0.02
$0.22
$0.22
$0.22
$26.31
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 21-6
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
G&A OPERATING COSTS
RPA has allocated $11.5 million per year to cover general and administrative costs
(G&A). The average annual unit cost is C$3.50/tonne of ore.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 21-7
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
22 ECONOMIC ANALYSIS
CASH FLOW ANALYSIS
A pre-tax cash flow projection has been generated from the LOM production schedule
and capital and operating cost estimates, and is summarized in Table 22-1. A summary
of the key criteria is provided below.
PRODUCTION

Production quantities total 34.6 Mt, at grades of 0.040% U3O8 and 1,455 ppm
TREO, over a mine life of 11 years.
o
The Main Conglomerate Bed (MCB) zone totals 31.0 Mt grading
0.043% U3O8 and 1,544 ppm TREO
o
The Hangingwall Zone (HWZ) totals 3.6 Mt grading 0.017% U3O8 and
1,017 ppm TREO

Underground mining using room and pillar mining methods, with all
development in ore.

Two years of pre-production development with mill commissioning and limited
production commencing in the second year.

Production rate ramping up to a nominal 9,000 tpd in Year 1.

Processing by crushing and grinding, magnetic separation, froth flotation,
acid baking and water leaching, solid/liquid separation, high density sludge
(HDS) removal, and recovery of the valuable elements by solvent extraction
and precipitation.

The proposed processing method produces yellow cake and a mixed rare
earths carbonate concentrate.

Uranium recovery of 90% (assumption, based on historical operations in the
area).

Rare earths recoveries by individual oxide, based on preliminary bench scale
testwork. LREOs average 89% recovery, while HREOs average 75%
recovery.

Mine life production of 27.5 million pounds of U3O8 and 44.1 million kg of
TREO.

Production of a strategically significant combination of rare earths forecast to
remain in supply deficit, with 85% of Project revenue from heavy REO,
neodymium oxide (Nd2O3) and U3O8.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
REVENUE

Exchange rate US$1.00 = C$1.00.

Uranium price of US$70 per pound U3O8.

Rare earth prices by individual oxide, with a basket price of US$78 per kg.
o Net of costs for separating the rare earth concentrate into individual
oxides – C$30 per kg for HREOs and C$10 per kg for LREOs.

LREOs consist of CeO2, La2O3, Nd2O3 and Pr6O11 while HREOs consist of
Sm2O3, Eu2O3, Gd2O3, Sc2O3, Y2O3, Yb2O3, Dy2O3, Er2O3, Ho2O3, Lu2O3,
Tb4O7 and Tm2O3.

NSR royalty of 0.75%.

Average net revenue (NSR unit value) of $154 per tonne.

Uranium provides 36% of revenue, and rare earths provide 64%.

HREO make up slightly over 50% of the rare earths revenue.

Revenue is recognized at the time of production.

Initial capital of C$563 million (first two years), includes contingency of $108
million.

Mine life capital totals C$670 million.

Unit operating costs of $71.33 per tonne.
COSTS
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-2
Technical Report NI 43-101 – June 20, 2012
TABLE 22-1 PRE-TAX CASH FLOW SUMMARY
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Year -2
Units
Inputs
Year -1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Total
MINING
34,550
000s tonnes
Uranium Grade
CeO2 Grade
La2O3 Grade
Nd2O3 Grade
Pr6O11 Grade
Sm2O3 Grade
Eu2O3 Grade
Gd2O3 Grade
Sc2O3 Grade
Y2O3 Grade
Yb2O3 Grade
Dy2O3 Grade
Er2O3 Grade
Ho2O3 Grade
Lu2O3 Grade
Tb4O7 Grade
Tm2O3 Grade
Th Grade
LREO Grade
HREO Grade
Total REO Grade
0.040%
%U3O8
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
Oxide Factors
1.23
1.17
1.17
1.21
1.16
1.16
1.15
1.53
1.27
1.14
1.15
1.14
1.15
1.14
1.18
1.14
1.14
657.05
346.12
210.56
65.49
36.34
2.05
24.30
7.12
71.39
5.04
15.54
6.48
2.62
0.69
3.36
0.88
338.14
1,279.23
175.80
1,455.03
229
318
3,287
3,284
3,284
3,283
3,278
3,279
3,253
3,280
3,282
3,279
1,214
-
0.048%
0.058%
0.058%
0.052%
0.044%
0.045%
0.045%
0.036%
0.036%
0.037%
0.032%
0.020%
0.018%
0.000%
758.70
395.72
248.58
77.66
42.32
2.41
27.83
5.91
85.32
5.88
18.43
7.59
3.08
0.76
3.90
1.00
398.19
1,481
204
1,685
881.29
464.47
283.77
88.46
48.89
2.62
32.73
6.36
96.21
6.93
21.31
8.95
3.59
0.91
4.52
1.18
428.55
1,718
234
1,952
900.46
472.81
289.64
90.71
50.08
2.70
33.88
6.49
98.87
7.09
21.92
9.22
3.69
0.93
4.69
1.21
451.49
1,754
241
1,994
784.53
415.51
256.07
79.60
43.91
2.36
29.05
6.25
87.46
6.20
19.14
7.98
3.18
0.82
4.01
1.05
389.40
1,536
211
1,747
677.01
355.06
222.51
69.06
38.24
2.25
25.45
6.28
77.30
5.35
16.73
6.88
2.77
0.70
3.57
0.91
360.63
1,324
186
1,510
759.61
401.86
240.41
75.12
41.67
2.16
27.86
7.78
77.93
5.58
17.36
7.20
2.90
0.77
3.79
0.98
345.06
1,477
196
1,673
718.66
381.27
229.30
71.28
39.49
2.12
26.02
6.50
74.84
5.45
16.37
6.88
2.77
0.74
3.55
0.93
348.42
1,401
186
1,586
680.21
358.22
218.13
68.24
37.60
2.07
24.49
6.00
70.74
5.09
15.47
6.43
2.57
0.69
3.38
0.86
322.34
1,325
175
1,500
658.74
351.36
209.09
65.50
35.93
2.07
24.07
6.85
71.15
4.92
15.20
6.36
2.59
0.71
3.29
0.90
339.23
1,285
174
1,459
464.09
241.90
152.27
46.79
27.35
1.83
19.49
9.85
61.01
4.33
13.32
5.56
2.26
0.61
2.86
0.76
330.19
905
149
1,054
512.57
267.86
163.22
49.56
28.11
1.77
19.35
6.79
57.29
3.96
12.37
5.16
2.17
0.58
2.70
0.73
292.97
993
141
1,134
462.46
241.41
141.33
43.90
24.10
1.40
15.87
9.29
45.15
3.06
9.38
3.97
1.64
0.47
2.13
0.57
232.66
889
117
1,006
448.10
234.52
139.47
43.90
23.34
1.20
14.52
5.07
40.85
2.67
8.41
3.44
1.36
0.38
1.90
0.45
218.42
866
104
970
-
546
3,287
3,284
3,284
3,283
3,278
3,279
3,253
3,280
3,282
3,279
1,214
-
0.054%
829.93
435.66
269.03
83.94
46.14
2.53
30.68
6.17
91.65
6.49
20.10
8.38
3.38
0.85
4.26
1.11
415.83
3,199
439
3,637
0.058%
900.46
472.81
289.64
90.71
50.08
2.70
33.88
6.49
98.87
7.09
21.92
9.22
3.69
0.93
4.69
1.21
451.49
1,754
241
1,994
0.052%
784.53
415.51
256.07
79.60
43.91
2.36
29.05
6.25
87.46
6.20
19.14
7.98
3.18
0.82
4.01
1.05
389.40
1,536
211
1,747
0.044%
677.01
355.06
222.51
69.06
38.24
2.25
25.45
6.28
77.30
5.35
16.73
6.88
2.77
0.70
3.57
0.91
360.63
1,324
186
1,510
0.045%
759.61
401.86
240.41
75.12
41.67
2.16
27.86
7.78
77.93
5.58
17.36
7.20
2.90
0.77
3.79
0.98
345.06
1,477
196
1,673
0.045%
718.66
381.27
229.30
71.28
39.49
2.12
26.02
6.50
74.84
5.45
16.37
6.88
2.77
0.74
3.55
0.93
348.42
1,401
186
1,586
0.036%
680.21
358.22
218.13
68.24
37.60
2.07
24.49
6.00
70.74
5.09
15.47
6.43
2.57
0.69
3.38
0.86
322.34
1,325
175
1,500
0.036%
658.74
351.36
209.09
65.50
35.93
2.07
24.07
6.85
71.15
4.92
15.20
6.36
2.59
0.71
3.29
0.90
339.23
1,285
174
1,459
0.037%
464.09
241.90
152.27
46.79
27.35
1.83
19.49
9.85
61.01
4.33
13.32
5.56
2.26
0.61
2.86
0.76
330.19
905
149
1,054
0.032%
512.57
267.86
163.22
49.56
28.11
1.77
19.35
6.79
57.29
3.96
12.37
5.16
2.17
0.58
2.70
0.73
292.97
993
141
1,134
0.020%
462.46
241.41
141.33
43.90
24.10
1.40
15.87
9.29
45.15
3.06
9.38
3.97
1.64
0.47
2.13
0.57
232.66
889
117
1,006
0.018%
448.10
234.52
139.47
43.90
23.34
1.20
14.52
5.07
40.85
2.67
8.41
3.44
1.36
0.38
1.90
0.45
218.42
866
104
970
0.000%
-
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
PROCESSING
Ore to Processing
000s tonnes
34,550
Uranium Grade
CeO2 Grade
La2O3 Grade
Nd2O3 Grade
Pr6O11 Grade
Sm2O3 Grade
Eu2O3 Grade
Gd2O3 Grade
Sc2O3 Grade
Y2O3 Grade
Yb2O3 Grade
Dy2O3 Grade
Er2O3 Grade
Ho2O3 Grade
Lu2O3 Grade
Tb4O7 Grade
Tm2O3 Grade
Th Grade
LREO Grade
HREO Grade
Total REO Grade
%U3O8
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
0.040%
657.05
346.12
210.56
65.49
36.34
2.05
24.30
7.12
71.39
5.04
15.54
6.48
2.62
0.69
3.36
0.88
338.14
1,304
179
1,483
Recovery U3O8
Recovery CeO2
Recovery La2O3
Recovery Nd2O3
Recovery Pr6O11
Recovery Sm2O3
Recovery Eu2O3
Recovery Gd2O3
Recovery Sc2O3
Recovery Y2O3
Recovery Yb2O3
Recovery Dy2O3
Recovery Er2O3
Recovery Ho2O3
Recovery Lu2O3
Recovery Tb4O7
Recovery Tm2O3
Recovery Th
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
Recovered U3O8
Recovered CeO2
Recovered La2O3
Recovered Nd2O3
Recovered Pr6O11
Recovered Sm2O3
Recovered Eu2O3
Recovered Gd2O3
Recovered Sc2O3
Recovered Y2O3
Recovered Yb2O3
Recovered Dy2O3
Recovered Er2O3
Recovered Ho2O3
Recovered Lu2O3
Recovered Tb4O7
Recovered Tm2O3
Recovered Th
Recovered LREO
Recovered HREO
Total REOs
000 lbs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 kgs
000 lbs
Head Grade
Recovery
90%
90%
88%
89%
89%
85%
79%
81%
61%
76%
71%
75%
74%
71%
74%
78%
74%
80%
44,942
23,227
14,210
4,425
2,355
123
1,496
331
4,127
272
882
364
142
39
200
49
20,605
86,804
10,381
97,185
27,491
20,386
10,535
6,446
2,007
1,068
56
678
150
1,872
123
400
165
64
18
91
22
9,346
39,374
4,709
44,083
97,185
583
407
210
130
41
21
1
14
2
38
3
8
3
1
0
2
0
182
788
94
882
3,776
2,658
1,369
843
264
140
7
90
13
247
17
54
22
9
2
12
3
1,187
5,135
615
5,750
3,413
2,314
1,202
745
232
123
6
77
13
218
14
47
19
7
2
10
3
1,023
4,493
539
5,033
2,855
1,997
1,027
647
201
107
6
68
13
193
12
41
17
6
2
9
2
948
3,873
475
4,348
2,960
2,240
1,162
699
219
116
6
74
16
194
13
42
17
7
2
10
2
906
4,320
499
4,819
2,926
2,115
1,101
666
207
110
5
69
13
186
13
40
17
6
2
9
2
914
4,089
473
4,562
2,374
2,003
1,035
634
198
105
5
65
12
176
12
38
16
6
2
9
2
846
3,870
447
4,317
2,350
1,925
1,007
603
189
99
5
63
14
176
11
37
15
6
2
8
2
883
3,723
439
4,162
2,422
1,367
699
443
136
76
5
52
20
152
10
33
13
5
1
7
2
867
2,645
376
3,021
2,111
1,511
774
475
144
79
5
51
14
143
9
30
13
5
1
7
2
769
2,904
358
3,262
1,298
1,362
697
411
128
67
4
42
19
112
7
23
10
4
1
5
1
610
2,597
295
2,893
423
489
251
150
47
24
1
14
4
38
2
8
3
1
0
2
0
212
937
98
1,034
www.rpacan.com
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-3
Technical Report NI 43-101 – June 20, 2012
Ore Mined
Year -2
Inputs
Units
Year -1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Total
REVENUE
Gross Revenue
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
US$ '000s
Exchange Rate
1 US$=C$
REO Basket Price
Gross Revenue
C$ '000s
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
70
18
20
175
140
80
2,900
150
3,000
150
90
1,450
195
1,200
2,200
3,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,924,376
366,941
210,708
1,127,993
280,988
85,468
162,090
101,756
450,732
280,814
11,094
579,933
32,232
21,280
199,912
67,163
1,986,631
1,992,474
3,979,104
5,903,481
$
$
90
5,903,481
$40,804
$7,331
$4,195
$22,795
$5,696
$1,717
$3,168
$2,032
$6,183
$5,702
$226
$11,867
$659
$0
$412
$4,011
$1,338
$40,017
$37,314
$77,332
$118,135
1.00
1.00
$
$264,346
$47,837
$27,381
$147,601
$37,023
$11,205
$20,336
$13,494
$39,129
$36,995
$1,485
$77,812
$4,359
$0
$2,713
$26,563
$8,775
$259,842
$242,867
$502,710
$767,055
1.00
$238,883
$41,649
$24,045
$130,398
$32,465
$9,819
$17,761
$11,564
$37,632
$32,705
$1,297
$67,894
$3,771
$0
$2,401
$22,688
$7,656
$228,557
$215,188
$443,745
$682,628
1.00
$199,859
$35,940
$20,546
$113,305
$28,166
$8,550
$16,910
$10,130
$37,786
$28,903
$1,121
$59,341
$3,250
$0
$2,037
$20,192
$6,616
$197,956
$194,836
$392,793
$592,652
1.00
$207,172
$40,312
$23,248
$122,384
$30,629
$9,313
$16,224
$11,085
$46,831
$29,128
$1,168
$61,555
$3,403
$0
$2,242
$21,453
$7,105
$216,573
$209,508
$426,081
$633,253
1.00
$204,808
$38,074
$22,019
$116,529
$29,011
$8,812
$15,900
$10,338
$39,028
$27,927
$1,137
$57,958
$3,245
$0
$2,165
$20,061
$6,726
$205,633
$193,297
$398,930
$603,737
1.00
$166,176
$36,052
$20,697
$110,900
$27,785
$8,394
$15,539
$9,732
$36,075
$26,408
$1,062
$54,786
$3,032
$0
$2,007
$19,069
$6,255
$195,434
$182,360
$377,795
$543,971
1.00
$164,503
$34,642
$20,142
$105,473
$26,464
$7,959
$15,390
$9,492
$40,831
$26,352
$1,019
$53,410
$2,976
$0
$2,061
$18,458
$6,492
$186,720
$184,439
$371,159
$535,663
1.00
$169,567
$24,608
$13,982
$77,447
$19,060
$6,108
$13,747
$7,749
$59,251
$22,787
$906
$47,190
$2,623
$0
$1,767
$16,160
$5,530
$135,096
$183,816
$318,912
$488,478
1.00
$147,739
$27,192
$15,490
$83,056
$20,198
$6,282
$13,282
$7,696
$40,852
$21,406
$828
$43,866
$2,439
$0
$1,692
$15,264
$5,312
$145,935
$158,917
$304,853
$452,592
1.00
$90,895
$24,511
$13,948
$71,853
$17,874
$5,379
$10,506
$6,307
$55,851
$16,856
$638
$33,230
$1,873
$0
$1,374
$12,029
$4,136
$128,185
$148,179
$276,364
$367,259
1.00
$29,625
$8,793
$5,017
$26,253
$6,618
$1,929
$3,328
$2,136
$11,284
$5,647
$207
$11,025
$600
$0
$410
$3,964
$1,223
$46,680
$41,751
$88,432
$118,057
1.00
88 $
$118,135
87 $
$767,055
88 $
$682,628
90 $
$592,652
88 $
$633,253
87 $
$603,737
88 $
$543,971
89 $
$535,663
106 $
$488,478
93 $
$452,592
96 $
$367,259
86
$118,057
$7,880
$2,825
$10,705
12 $
13.8%
$51,346
$18,453
$69,799
12 $
13.9%
$44,931
$16,182
$61,113
12 $
13.8%
$38,726
$14,254
$52,980
12 $
13.5%
$43,201
$14,981
$58,181
12 $
13.7%
$40,893
$14,178
$55,071
12 $
13.8%
$38,699
$13,404
$52,103
12 $
13.8%
$37,234
$13,171
$50,405
12 $
13.6%
$26,449
$11,292
$37,741
12 $
11.8%
$29,040
$10,736
$39,776
12 $
13.0%
$25,974
$8,860
$34,833
12 $
12.6%
$9,366
$2,928
$12,294
12
13.9%
Offsite Concentrate Costs
LREOs
HREOs
Total
C$ '000s
C$ '000s
C$ '000s
C$/kg
% of Gross
$
$
10.00
30.00
$
$
$
$
393,737
141,264
535,002
12
13.4%
$
Net Revenue
Uranium
Rare Earths
Total Net Revenue
C$ '000s
C$ '000s
C$ '000s
$
$
$
1,924,376
3,444,103
5,368,479
$40,804
$66,627
$107,431
$264,346
$432,911
$697,256
$238,883
$382,632
$621,515
$199,859
$339,813
$539,672
$207,172
$367,900
$575,072
$204,808
$343,858
$548,666
$166,176
$325,691
$491,867
$164,503
$320,755
$485,258
$169,567
$281,171
$450,737
$147,739
$265,077
$412,816
$90,895
$241,531
$332,425
$29,625
$76,137
$105,762
NSR Royalty
NSR Royalty
Total Royalty Paid
C$ '000s
C$ '000s
C$ '000s
0.75% $
0.00% $
$
40,264
40,264
$806
$0
$806
$5,229
$0
$5,229
$4,661
$0
$4,661
$4,048
$0
$4,048
$4,313
$0
$4,313
$4,115
$0
$4,115
$3,689
$0
$3,689
$3,639
$0
$3,639
$3,381
$0
$3,381
$3,096
$0
$3,096
$2,493
$0
$2,493
$793
$0
$793
Net Smelter Return
$106,625
$195
$692,027
$211
$616,854
$188
$535,625
$163
$570,759
$174
$544,551
$166
$488,178
$149
$481,618
$148
$447,357
$136
$409,720
$125
$329,932
$101
$104,969
$86
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
$41.52
$26.31
$3.50
$71.33
C$ '000s
C$/t
$
OPERATING COSTS
Mining
Processing
G&A
Total Opex Per Tonne Milled
C$/t mined
C$/t milled
C$/t milled
C$/t milled
$
$
$
$
42.64
26.31
3.44
72.40
Mining
Processing
G&A
Total Operating Cost
C$ '000s
C$ '000s
C$ '000s
C$ '000s
$
$
$
$
1,473,308
909,013
119,013
2,501,334
$28,519
$0
$0
$28,519
$32,959
$14,378
$0
$47,336
$136,462
$86,472
$11,503
$234,438
$136,365
$86,410
$11,495
$234,270
$136,359
$86,407
$11,495
$234,260
$136,320
$86,382
$11,491
$234,193
$136,085
$86,233
$11,472
$233,790
$136,144
$86,270
$11,476
$233,891
$135,080
$85,597
$11,387
$232,064
$136,200
$86,306
$11,481
$233,987
$136,266
$86,348
$11,487
$234,101
$136,143
$86,270
$11,476
$233,889
$50,405
$31,940
$4,249
$86,594
Operating Margin
C$ '000s
$
2,826,882
-$28,519
$59,288
$457,589
$382,583
$301,365
$336,566
$310,761
$254,288
$249,554
$213,370
$175,619
$96,043
$18,375
$0
$0
$86,420
$7,300
$165,366
$33,926
$20,215
$3,000
$47,620
$35,000
$30,909
$7,300
$82,683
$16,963
$10,107
$3,000
$10,000
$17,000
$30,276
$9,404
$5,963
$6,977
$2,891
CAPITAL COSTS
Directs
Mining
Process Site Development
Acid Baking Plant
Uranium Extraction Plant
Y & REE Plant
Water Treatment Plant
Tailings
Site infrastructure
Indirects
Mine Indirects
Process Indirects
Construction Indirects
Contingency
Process Contingency
Mining & Other Contingency
Total Initial Capital
$
$
$
41.52
26.31
3.50
5,328,215
$154
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
C$ '000s
$86,802
$7,300
$165,366
$33,926
$20,215
$3,000
$47,620
C$ '000s
C$ '000s
C$ '000s
$12,000
$67,561
$35,000
$12,000
$67,561
$35,000
$6,000
$33,781
$17,500
$6,000
$33,781
$17,500
C$ '000s
C$ '000s
C$ '000s
30%
25%
$89,210
$18,396
$562,843
$46,150
$9,227
$290,620
$43,060
$9,169
$272,224
C$ '000s
C$ '000s
C$ '000s
$24,000
$22,000
$667,013
$3,000
$3,000
$3,000
$3,000
$290,620
$272,224
$19,404
$8,963
$26,389
$5,891
$3,000
$3,000
$2,000
$5,000
$3,000
$2,000
$11,523
$3,000
$3,000
$6,000
$3,000
$2,000
$5,000
$2,000
$2,000
$8,000
$8,000
$2,000
$2,000
$1,000
$1,000
PRE-TAX CASHFLOW
Pre-Tax Cash Flow
Cumulative
C$ '000s
C$ '000s
$2,159,868
-$319,139
-$319,139
-$212,935
-$532,074
$438,185
-$93,889
$373,620
$279,731
$274,976
$554,706
$330,675
$885,381
$307,761
$1,193,142
$249,288
$1,442,430
$238,031
$1,680,462
$207,370
$1,887,831
$170,619
$2,058,450
$94,043
$2,152,493
$10,375
$2,162,868
-$2,000
$2,160,868
-$1,000
$2,159,868
PROJECT ECONOMICS
Pre-Tax IRR
Pre-Tax NPV
Pre-Tax NPV
Pre-Tax NPV
C$ '000s
C$ '000s
C$ '000s
Sustaining Capital
Site Decomissioning and Monitoring
Total Capital Cost
5%
7.5%
10%
50%
$1,475,351
$1,226,684
$1,022,820
$82,683
$16,963
$10,107
$14,685
$8,000
$16,412
$6,523
$10,000
www.rpacan.com
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-4
Technical Report NI 43-101 – June 20, 2012
U3O8
CeO2
La2O3
Nd2O3
Pr6O11
Sm2O3
Eu2O3
Gd2O3
Sc2O3
Y2O3
Yb2O3
Dy2O3
Er2O3
Ho2O3
Lu2O3
Tb4O7
Tm2O3
Sub-Total LREOs
Sub-Total HREOs
Sub-Total REOs
Total Gross Revenue
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CASH FLOW RESULTS
The cash flow analysis in this report has been carried out on a pre-tax basis.
Considering the full project on a stand-alone basis, the undiscounted pre-tax cash flow
totals C$2.2 billion over the 11 year mine life and simple payback occurs 1.5 years after
the start of commercial production. The internal rate of return (IRR) is 50% and the net
present value (NPV) is as follows:

C$1.5 billion at a 5% discount rate

C$1.2 billion at a 7.5% discount rate

C$1.0 billion at a 10% discount rate
The economic analysis contained in this report is based, in part, on Inferred Resources,
and is preliminary in nature.
Inferred Resources are considered too geologically
speculative to have mining and economic considerations applied to them and to be
categorized as Mineral Reserves. There is no certainty that economic forecasts on
which this Preliminary Economic Assessment is based will be realized.
SENSITIVITY ANALYSIS
Sensitivity analyses were performed for uranium price, REO prices, operating cost,
capital cost, uranium recovery, and rare earth recoveries. The sensitivity analyses on
IRR and NPV at a discount rate of 10% indicate that the Project economics are most
heavily influenced by the recovery and market price of REEs. The Project economics
are also heavily influenced by the operating cost.
These sensitivities focus on rare earth oxides, which provide approximately 64% of the
base case revenue whereas uranium provides approximately 36% of the base case
revenue. The recent price history for rare earths covers a wide range, including order-ofmagnitude increases within 2011. The rare earths price sensitivity is based on results at
a conservative long-term forecast ($30/kg basket price), the base case ($90/kg basket
price), and current prices ($103/kg basket price). Note that these prices relate to gross
revenue, before separation charges are applied.
Figure 22-1 and Table 22-2 summarize the results of the sensitivity analyses.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-5
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
FIGURE 22-1 SENSITIVITY ANALYSIS
$2,000,000 NPV @ 10% ('000s)
$1,600,000 REE Recovery
$1,200,000 U3O8 Recovery
REE Price
$800,000 U3O8 Price
Operating Costs
$400,000 Capital Costs
$0 ‐40%
‐30%
‐20%
‐10%
0%
10%
20%
30%
40%
Factor of Change
Note: U3O8 recovery has the same slope as U3O8 price.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-6
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 22-2 SENSITIVITY ANALYSIS
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Factor
0.72
0.86
1
1.14
1.29
U3O8 Market Price
U3O8 Price (US$/lb)
NPV (C$ millions)
50
728
60
875
70
1,022
80
1,171
90
1,319
IRR (%)
35%
45%
50%
57%
60%
Factor
0.33
0.66
1
1.14
REO Basket Price
REO Price (US$/kg)
NPV (C$ millions)
30
(381)
60
324
90
1,022
103
1,316
IRR (%)
NA
26%
50%
59%
Operating Cost Per Tonne Milled
Opex (C$/t)
NPV (C$ millions)
IRR (%)
Factor
0.8
0.9
1
1.1
1.2
Factor
0.8
0.9
1
1.1
1.2
Factor
0.85
0.925
1
1.075
1.15
58
65
71
80
87
1,278
1,151
1,022
895
767
Capital Cost
Capex (C$ millions)
NPV (C$ millions)
534
600
667
734
800
1,132
1,077
1,022
968
914
Recovery - REE
Average Recovery
NPV (C$ millions)
68%
751
74%
887
79%
1,022
85%
1,159
90%
1,295
58%
54%
50%
46%
42%
IRR (%)
63%
56%
50%
46%
41%
IRR (%)
42%
46%
50%
54%
58%
EXTENDED MINE LIFE SENSITIVITY
The MCB is known to persist to the north of the current resource model, as indicated by
historical drilling. RPA examined the effect of extending the mine life to include an
additional 50 Mt of production from the MCB, resulting in a mine life of 25 years.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-7
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
The undiscounted pre-tax cash flow for the extended mine life sensitivity totals C$6.5
billion with an IRR of 51%. The net present value (NPV) is as follows:

C$3.2 billion at a 5% discount rate

C$2.3 billion at a 7.5% discount rate

C$1.7 billion at a 10% discount rate
Given the long mine life, RPA also looked at a higher production rate for this extended
mine life sensitivity, increasing production from 9,000 tpd to 12,000 tpd while using the
same mining method. A summary of the key inputs and criteria in developing the 12,000
tpd option is illustrated below.

LOM of 20 years

Higher capital costs for larger operation:
o Initial capital cost of C$661 million
o Total capital cost of C$838 million

Lower operating costs of C$69 per tonne of ore mined,
The undiscounted pre-tax cash flow in this case totals C$6.6 billion. The IRR is 53% and
the NPV is as follows:

C$3.6 billion at a 5% discount rate

C$2.7 billion at a 7.5% discount rate

C$2.1 billion at a 10% discount rate
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 22-8
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
23 ADJACENT PROPERTIES
EXPLORATION
Abeta Mining Corporation Limited (Abeta) held a block of 25 claims (Abeta Block) on the
west boundary of the Eco Ridge Mine property. During the period from October 1953 to
June 1954, 15 holes were drilled by the Mining Corporation of Canada on the Abeta
Block. In 1977, Long Lac Mineral Exploration drilled 14 holes on the Abeta Block and, in
1977, David S. Robertson & Associates Ltd. (Robertson) completed a report on the
economic potential of the property previously owned by Abeta.
Robertson noted that there were several beds of uraniferous conglomerates within the
Lower Matinenda Formation. The principal bed was located from 15.2 m (50 ft) to 30.4 m
(100 ft) above the basement rocks and Robertson identified this bed as the “Pardee
Reef”. It also noted that uraniferous conglomerate beds were developed from 3.3 m (10
ft) to 15.2 m (50 ft) above the hangingwall contact of the Pardee Reef and termed these
units “Floater Reefs”. Robertson also noted the occurrence of a polymictic conglomerate
at the contact between the sediments and the underlying basement rocks.
The uranium mineralization on the Abeta Block is interpreted as an extension of the
mineralization on the Pele Mountain property to the west (the Pardee deposit). The
Pardee Reef described by Robertson is directly correlated with the MCB described on
the Pele Mountain property. The Floater Reefs are correlated with the upper reefs and
the conglomerate located at the basement contact on the Abeta property is correlated
with the BCB described on the Eco Ridge Mine property.
This information was used to extend the Mineral Resource to the western boundary of
the Eco Ridge Mine property.
MINING OPERATIONS
Historically, mining and processing operations were carried out in the Elliot Lake area,
but not on the Eco Ridge Mine property. The mining at Elliot Lake was all by
underground methods, primarily room and pillar, with shaft access. The major portion of
the ore mined was processed through a conventional uranium processing plant, with
some production from underground leaching. The Elliot Lake mineralization also
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 23-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
contains rare earth oxides. Yttrium oxide and rare earth oxides were recovered at the
Denison mine in the past, as by-products of the uranium production.
Rio Algom operated a total of nine uranium mines between 1955 and 1996 while
Denison Mines operated three. The two closest mines to the Eco Ridge Mine Project are
Nordic (Denison Mines) and Lacnor (Rio Algom) mines.
Nordic Mine started its
operations in 1956 and ended in 1970, producing approximately 13 Mt of ore from the
Pardee Reef. Lacnor operated from 1956 to 1960 producing approximately 3.4 Mt of
ore. Stanleigh Mine (Rio Algom), another major uranium mine further to the west of
Nordic and Lacnor mines, operated from 1956 to 1960 and re-opened in 1982 until its
final closure in 1996, producing over 14.0 Mt of ore from the Pardee Reef.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 23-2
Technical Report NI 43-101 – June 20, 2012
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24 OTHER RELEVANT DATA AND
INFORMATION
Past PEA-level work on the Project includes studies on alternative production scenarios
that may be relevant to future work:

Various mining methods

Processing options

Waste management alternatives
PROJECT SCHEDULE
A schedule for the Project, covering the path forward through a Feasibility Study,
permitting, and construction, is presented in Figure 24-1. The critical path runs through
the permitting process, although this is influenced by the availability of sufficient
engineering work being completed as needed for key permitting documents.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 24-1
Technical Report NI 43-101 – June 20, 2012
Activity ID
Activity Name
Original Start
Duration
Environmental
EIA (SENES)
Finish
2012
2013
J F M A M J Jul A S O N D J F M A M J J A S O N D
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12*
10-Nov-17
S50810
Consultation
S50760
Submit Project Description to CNSC
S50770
Baseline Characterization Program/Reporting
427 03-Jul-12
24-Mar-14
F3310
Environment Impact Statement
427 27-Sep-12
19-Jun-14
S50800
Other Authorisations
488 28-Mar-13
19-Mar-15
S50780
Regulatory Review and EA Decision Statement
190 19-Jun-14
30-Mar-15
S50790
Issue Site Preparation / Construction Licences
122 06-Jan-15
02-Jul-15
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
Preliminary Mine Site Study
Geotechnical
MINE SITE - RPA
60 03-Jul-12*
60 01-Aug-12*
Hydrogeological Study
S50730
Underground Geotechnical Studies
120 01-Aug-12
29-Jan-13
F3290
Resource Drilling
160 01-Aug-12
27-Mar-13
S50720
Resource Update
60 28-Mar-13
24-Jun-13
248 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
Key Milestones
GENERAL
F1160
Commence Feasibility Study
F1150
Feasibility Study Complete
Engineering
MINE SITE
S50750
Feasibility Mine Design & Cost Estimation
26-Oct-12
0
13-Dec-13*
26-Sep-13
120 02-Jan-13
25-Jun-13
120 02-Jan-13
25-Jun-13
180 10-Jan-13
18-Sep-13
Process Engineering
165 10-Jan-13
05-Sep-13
49E0030
Engineering Design & MTO's
140 07-Mar-13
18-Sep-13
49E0020
Plant Layouts
110 04-Apr-13
04-Sep-13
180 10-Jan-13
26-Sep-13
180 10-Jan-13
26-Sep-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
24-2
TAILINGS FACILITY
F2970
Tailings Facility Design & MTO's
Procurement
F1840
Equipment/Installation Contract Pricing
Estimate Compilation
F2780
Estimate Compilation & Review
F1190
Handover to Client
0
Project Execution
Key Milestones
GENERAL
KM10
Contract Award for Execution
KM20
Project Completion
05-Dec-16
718 21-Jan-14
05-Dec-16
718 21-Jan-14
05-Dec-16
06-May-15
310 04-Feb-14
06-May-15
310 04-Feb-14
06-May-15
TF0010
Tailings Facility Design
150 04-Mar-14
06-Oct-14
530 15-Apr-14
08-Jun-16
530 15-Apr-14
08-Jun-16
Procurement
240 15-Apr-14
08-Apr-15
F3220
Manufacture & Deliver to Site
490 13-Jun-14
08-Jun-16
359 02-Jul-15
05-Dec-16
359 02-Jul-15
05-Dec-16
F3320
Construction Permits Available
F3240
Site Establishment
F3330
Construction Monitoring for Tailings Facility
F3250
Site Work
F3340
Continue Construction Monitoring for Tailings Facil ity
80 18-Apr-16
09-Aug-16
F3260
Commissioning
60 12-Sep-16
05-Dec-16
Actual Work
Critical Remaining Work
Milestone
June 2012
Project Schedule
0 02-Jul-15
100 02-Jul-15
24-Nov-15
80 23-Jul-15
17-Nov-15
299 30-Jul-15
10-Oct-16
Source: SNC Lavalin, 2012.
www.rpacan.com
F3230
Remaining Work
Elliot Lake, Ontario, Canada
05-Dec-16*
310 04-Feb-14
Engineering Design for Process Plant
Construction
Eco Ridge Mine Project
0 21-Jan-14
49010
Procurement
Pele Mountain Resources Inc.
13-Dec-13
718 21-Jan-14
0
Engineering
Figure 24-1
0 02-Jan-13*
192 02-Jan-13
49E0010
PROCESS PLANT
A S O N
26-Sep-12
S50740
Feasibility Study
2014
2015
2016
2017
J F M A M J J A S O N D J F M A M J Jul A S O N D J F M A M J J A S O N D J F M A M J J
www.rpacan.com
25 INTERPRETATION AND CONCLUSIONS
In RPA’s opinion, the PEA indicates that positive economic results can be obtained for
the Eco Ridge Mine Project, in a scenario that includes room and pillar mining, and
uranium and rare earth recovery by conventional milling.
The Base Case LOM plan for the Project indicates that 34.6 Mt, at average grades of
0.040% U3O8 and 1,455 g/t TREO, will be mined over 11 years at a nominal production
rate of 9,000 tpd. Uranium production is projected to total 27.5 million pounds, and REO
production is projected to total 44.1 million kilograms.
The Project has good potential for increasing the base case mine life.
Specific conclusions by area of the PEA are as follows.
GEOLOGY AND RESOURCES
Rare earth and uranium mineralization on the Eco Ridge property is hosted primarily by
the Main Conglomerate Bed (MCB) and the Hangingwall Zone (HWZ) located within the
Ryan Member of the Mississagi Quartzite.
On average, the MCB is 2.7 m thick and dips consistently at an average of -21o north.
The HWZ, located immediately above the MCB, is defined by economic limits. The
current Mineral Resource estimate is listed in Table 25-1.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 25-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TABLE 25-1 SUMMARY OF MINERAL RESOURCES – APRIL 16, 2012
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Tonnes
U3O8
U3O8
LREO
HREO
TREO
TREO
(000)
(%)
(000 lbs)
(ppm)
(ppm)
(ppm)
(000 lbs)
MCB
20,514
0.045
20,447
1,426
193
1,618
73,184
HWZ
28,223
0.012
7,214
733
88
821
51,111
Total
48,737
0.026
27,661
1,025
132
1,157
124,295
MCB
16,906
0.043
15,940
1,279
183
1,463
54,515
HWZ
20,956
0.013
5,822
713
95
808
37,329
Total
37,863
0.026
21,762
966
134
1,100
91,843
Zone &
Classification
Indicated
Inferred
Notes:
1.
2.
3.
4.
5.
6.
CIM definitions were followed for Mineral Resources.
Mineral Resources were estimated at a cut-off value of $100 per tonne for the MCB, and $50 per
tonne for the HWZ. Values were calculated based on prices and recoveries of uranium and rare
earths, net of off-site rare earth separation costs.
Mineral Resources were estimated using an average uranium price of US$70 per lb U3O8, a rare
earth “basket price” of $78 per kg (net of separation charges), and a C$:US$ exchange rate of
1.00:1.00.
A minimum mining thickness of 1.8 m was used for the MCB.
Light Rare Earth Oxides include La2O3, CeO2, Pr6O11, and Nd2O3.
Heavy Rare Earth Oxides include Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3,
Yb2O3, Y2O3, and Lu2O3. Sc2O3 is also included in HREO, as it occurs in low concentrations and
carries high unit values like an HREO.
Historic drilling has intersected the MCB to the west, to the east, and down-dip from the
current Mineral Resource. A target for further exploration was estimated for these areas,
consisting of a further 40 Mt to 60 Mt, grading from 0.030% to 0.050% U3O8,
accompanied by 0.12% to 0.18% TREO for the MCB.
The potential quantities and grades of the exploration targets are conceptual in nature
and there has been insufficient drilling to define a Mineral Resource. It is uncertain if
further exploration will result in the definition of a mineral resource in these areas.
MINING
The MCB is correlated with the “Pardee Reef” in the Nordic Channel. This reef was
mined at the adjacent Nordic and Stanleigh mines operated by Rio Algom between 1957
and 1996.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 25-2
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
A number of mining methods have been assessed by RPA and others for extraction of
the MCB mineralization. The selected mining method was room and pillar, with both
development and production contained within the mineralized zone. The development
and production tonnage will be loaded into trucks and transported to surface for
processing.
Although the MCB average mining thickness is 2.7 m, in RPA’s opinion, the deposit will
support a high production rate. The lateral extents are such that multiple accesses from
surface are feasible, providing many independent workplaces.
The use of conveyors instead of haul trucks for material handling, while not included in
the base case, may provide economic advantages, and is worth consideration in future
studies.
Particular attention should be paid to impacts on grade distribution in
production schedules for each option, as there may be less flexibility with conveyors,
offsetting the cost advantage that they provide.
In RPA’s opinion, conveyors may also provide operational advantages that are difficult to
quantify economically at this stage of the Project, including better mine ventilation,
reduced traffic on the ramps, and easier material handling as the mine extends at depth.
Geotechnical and hydrogeological assumptions are supported by historic operations in
Elliot Lake, however, require confirmation by data collection and analysis at the Project.
PROCESSING AND METALLURGY
Historically, mining and processing operations have been carried out in the Elliot Lake
area, but not on the Eco Ridge Mine property. The major portion of the ore mined was
processed through a conventional uranium processing plant, with some production from
underground leaching on run-of-mine ore. Yttrium oxide and rare earth oxides were also
recovered at the Denison Mine in the past, as by-products of the uranium production.
RPA has observed that the metallurgical program supporting the current Project
flowsheet has been dynamic, involving changes in pursuit of potential improvements on
relatively short notice.
The unit operations within the process flowsheet have been
tested at various times, using different metallurgical samples, which is not unusual at the
PEA stage of project development. The testwork to date has focused on optimizing rare
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 25-3
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
earths recoveries, and although the overall uranium recovery assumption has not been
verified by testwork, it is typical of that achieved in historical operations. The assumed
recovery is supported by excellent results achieved for uranium in the acid bake unit
operation. RPA made a number of assumptions in assembling the various testwork
results into a coherent overall recovery for each element.
The data used for the PEA is preliminary in nature and, therefore, indicative of the
results that may be expected after a more rigorous and thorough program of
metallurgical testing is conducted. The actual results achieved in the long term may vary
significantly if a plant is ultimately constructed and operated, particularly since the
current design is based on many assumptions.
That being said, the processes that have been tested are not optimized and, based on
that observation, it is reasonable to expect that the results may also be better.
ENVIRONMENT
Preliminary baseline aquatic and terrestrial environmental studies have been performed
and no environmental problems have been identified to date. In order to identify all
potential environmental risks pertaining to the Project, Human Health and Ecological
Risk Assessments will need to be conducted during the Environmental Assessment (EA)
process. The assessments will be completed in full matrices, with the highest ranking
environmental risks being identified along with corresponding abatement strategies listed
in table format. Because of the extensive documented experience in the Elliot Lake
mining camp with uranium mine operations and decommissioning, it is expected that all
significant risks can be effectively managed.
MARKETS
Uranium
A uranium price of US$70/lb U3O8 has been used in this PEA, based on independent
metal price forecasts from banks and financial institutions. RPA notes that the price
used in the PEA, while slightly above the long term price for U3O8, is within the range of
medium- to long-term forecasts.
Rare Earths
The market for rare earth products is currently relatively small but growing rapidly for
certain rare earths. Public information on price forecasts and sales terms are difficult to
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 25-4
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
obtain and vary within a wide range. Current prices are tracked by sources such as
Asian Metal and Metal-PagesTM, based on transactions.
Recent history shows international rare earth market prices growing at an
unprecedented rate since China cut export quotas by approximately 40% in 2011.
China’s overwhelming control on the rare earth supply chain, from upstream mining to
downstream processing and end-user products, is likely to remain intact on all but a few
materials through 2016. Rare earth prices are expected to remain volatile in the short
term.
A small number of REE producers outside of China are likely to be in operation by the
time the Eco Ridge Mine Project is developed. This is expected to saturate the market
for LREO such as lanthanum and cerium, however, demand for high-value HREO (such
as dysprosium) is expected to grow, and supply is expected to remain in deficit.
Price forecasting in this environment is difficult, and certain to contain wide margins of
error.
RPA selected rare earth prices within a range of available forecasts. Prices for certain
elements are higher than current prices, and for others, lower, however the average
basket price is approximately 13% lower than Q2 2012 prices.
RPA considers these rare earths prices to be appropriate for a PEA-level study,
however, we note that the recent market volatility introduces considerably more
uncertainty than a comparable base or precious metals project.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 25-5
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
26 RECOMMENDATIONS
RPA recommends that Pele Mountain continue collecting data to support the feasibility
and licensing process, and move on to more advanced engineering studies.
Specific recommendations are as follows:

Continue infill drilling programs to advance the Inferred Resources to
Indicated classification. The budget presented below includes resource
drilling.

Carry out geotechnical and hydrogeological studies to confirm the parameters
for mining without adversely impacting ground stability.

Undertake a systematic metallurgical testing program. Care should be taken
to collect samples that are representative of the material that will be
processed over the LOM. An outline of the testing program should be
developed prior to the time the samples are collected and sufficient amounts
of materials should be shipped to the testing facility to complete the testing
that is required for the next phase of the project development.

RPA also recommends that SNC Lavalin continue to liaison and coordinate
with the testing laboratory to oversee the testing parameters and to review
the results as they become available. This will help to ensure that the data
meets the requirements of producing design information that is needed to
support the Feasibility Study.

The metallurgical program should be planned, budgeted, and scheduled to
integrate with other aspects of the project.

Future testing programs must also include tests to evaluate the processes to
precipitate uranium oxide and rare earth carbonate concentrates to determine
the processing parameters required for the plant design.

Continue to evaluate rare earth separation opportunities for upgrading the
rare earth concentrate to separated rare earth oxides.

Continue baseline studies in preparation for an EA, and the licensing
process.

Continue public consultation.

Once the project activities have been sufficiently defined and funding for the
Feasibility Study and licensing process is secured, an application should be
submitted to the Canadian Nuclear Safety Commission (CNSC) to construct
the Eco Ridge Mine and the EA process should continue by submitting a
revised Project Description to the Major Projects Management Office.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 26-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com

Continue the EA process based on EA Guidelines (to be provided by the
CNSC / Canadian Environmental Assessment Act (CEAA)) and the licensing
process in consultation with CNSC.

Monitor developments in REO and uranium markets, including forecast
market prices based on supply and demand fundamentals for each of the
rare earths and uranium.
Based on Pele Mountain’s intention to advance the Project to the feasibility stage, RPA
has recommended the proposed program. The objectives of the proposed program are
to assess the opportunities, while advancing the studies supporting the feasibility and
licensing process. A budget is presented in Table 26-1.
TABLE 26-1 PROPOSED WORK PROGRAM AND ESTIMATED COST
Pele Mountain Resources Inc. – Eco Ridge Mine Project
Item
Infill Drill Program
Cost
(C$ millions)
5.6
Geotechnical Studies
0.7
Metallurgical Testwork
0.7
Feasibility Study
8.0
Environmental Baseline Monitoring
1.5
Permitting Activities
4.5
Government Agency Project Review
1.5
Contingency
2.5
Total
25.0
A schedule for the Project, covering the path forward through a Feasibility Study,
permitting, and construction, is presented in Figure 26-1. The critical path runs through
the permitting process, although this is influenced by the availability of sufficient
engineering work being completed as needed for key permitting documents.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 26-2
Technical Report NI 43-101 – June 20, 2012
Activity ID
Activity Name
Original Start
Duration
Environmental
EIA (SENES)
Finish
2012
2013
J F M A M J Jul A S O N D J F M A M J J A S O N D
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12
10-Nov-17
1463 03-Jan-12*
10-Nov-17
S50810
Consultation
S50760
Submit Project Description to CNSC
S50770
Baseline Characterization Program/Reporting
427 03-Jul-12
24-Mar-14
F3310
Environment Impact Statement
427 27-Sep-12
19-Jun-14
S50800
Other Authorisations
488 28-Mar-13
19-Mar-15
S50780
Regulatory Review and EA Decision Statement
190 19-Jun-14
30-Mar-15
S50790
Issue Site Preparation / Construction Licences
122 06-Jan-15
02-Jul-15
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
220 01-Aug-12
24-Jun-13
Preliminary Mine Site Study
Geotechnical
MINE SITE - RPA
60 03-Jul-12*
60 01-Aug-12*
Hydrogeological Study
S50730
Underground Geotechnical Studies
120 01-Aug-12
29-Jan-13
F3290
Resource Drilling
160 01-Aug-12
27-Mar-13
S50720
Resource Update
60 28-Mar-13
24-Jun-13
248 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
240 02-Jan-13
13-Dec-13
Key Milestones
GENERAL
F1160
Commence Feasibility Study
F1150
Feasibility Study Complete
Engineering
MINE SITE
S50750
Feasibility Mine Design & Cost Estimation
26-Oct-12
0
13-Dec-13*
26-Sep-13
120 02-Jan-13
25-Jun-13
120 02-Jan-13
25-Jun-13
180 10-Jan-13
18-Sep-13
Process Engineering
165 10-Jan-13
05-Sep-13
49E0030
Engineering Design & MTO's
140 07-Mar-13
18-Sep-13
49E0020
Plant Layouts
110 04-Apr-13
04-Sep-13
180 10-Jan-13
26-Sep-13
180 10-Jan-13
26-Sep-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
157 18-Mar-13
28-Oct-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
60 19-Sep-13
13-Dec-13
26-3
TAILINGS FACILITY
F2970
Tailings Facility Design & MTO's
Procurement
F1840
Equipment/Installation Contract Pricing
Estimate Compilation
F2780
Estimate Compilation & Review
F1190
Handover to Client
0
Project Execution
Key Milestones
GENERAL
KM10
Contract Award for Execution
KM20
Project Completion
05-Dec-16
718 21-Jan-14
05-Dec-16
718 21-Jan-14
05-Dec-16
06-May-15
310 04-Feb-14
06-May-15
310 04-Feb-14
06-May-15
TF0010
Tailings Facility Design
150 04-Mar-14
06-Oct-14
530 15-Apr-14
08-Jun-16
530 15-Apr-14
08-Jun-16
Procurement
240 15-Apr-14
08-Apr-15
F3220
Manufacture & Deliver to Site
490 13-Jun-14
08-Jun-16
359 02-Jul-15
05-Dec-16
359 02-Jul-15
05-Dec-16
F3320
Construction Permits Available
F3240
Site Establishment
F3330
Construction Monitoring for Tailings Facility
F3250
Site Work
F3340
Continue Construction Monitoring for Tailings Facil ity
80 18-Apr-16
09-Aug-16
F3260
Commissioning
60 12-Sep-16
05-Dec-16
Actual Work
Critical Remaining Work
Milestone
June 2012
Project Schedule
0 02-Jul-15
100 02-Jul-15
24-Nov-15
80 23-Jul-15
17-Nov-15
299 30-Jul-15
10-Oct-16
Source: SNC Lavalin, 2012.
www.rpacan.com
F3230
Remaining Work
Elliot Lake, Ontario, Canada
05-Dec-16*
310 04-Feb-14
Engineering Design for Process Plant
Construction
Eco Ridge Mine Project
0 21-Jan-14
49010
Procurement
Pele Mountain Resources Inc.
13-Dec-13
718 21-Jan-14
0
Engineering
Figure 26-1
0 02-Jan-13*
192 02-Jan-13
49E0010
PROCESS PLANT
A S O N
26-Sep-12
S50740
Feasibility Study
2014
2015
2016
2017
J F M A M J J A S O N D J F M A M J Jul A S O N D J F M A M J J A S O N D J F M A M J J
380,000 E
381,000 E
382,000 E
383,000 E
384,000 E
385,000 E
5,138,000 N
2012 INDICATED MCB
Property Boundary
5,137,000 N
2012 INFERRED MCB
5,137,000 N
26-4
5,138,000 N
5,139,000 N
5,139,000 N
N
5,140,000 N
5,140,000 N
379,000 E
Figure 26-2
380,000 E
381,000 E
INDICATED ~160m drill hole spacing (horizontal projection)
- each zone is 7-7.5 mil t MCB
- for ~50 mil t IND target = drill 4 zones (”add” ~30 mil t)
- for ~40 mil t IND target = drill 3 zones (”add” ~20 mil t)
Zone 1 - 28 drill holes
Zone 3 - 27 drill holes
Zone 2 - 26 drill holes
Zone 4 - 31 drill holes
INFERRED ~500m drill hole spacing to add ~17 mil t MCB
Zone 2 throught 4 - 11 drill holes
382,000 E
0
0.5
1.0
383,000 E
1.5
2.0
Kilometres
June 2012
384,000 E
385,000 E
Pele Mountain Resources Inc.
Eco Ridge Mine Project
Elliot Lake, Ontario, Canada
Preliminary Proposed Drill Hole
Location for Indicated and Inferred
Tonnage Targets 2012 Program
www.rpacan.com
379,000 E
www.rpacan.com
27 REFERENCES
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Environmental Assessment Panel, “Decommissioning of Uranium Mine Tailings
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Golder Associates, 2012: Conceptual Design and Preliminary Cost Estimate for the
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Hart, R.C., and Sprague, D., 1968: Methods of Calculating Ore Reserves in the Elliot
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Hedley, D.G.F., Gangal, M. and Morgan, G., 1983: Effect of Pillar Orientation on
Stability, Elliot Lake Laboratory, CANMET.
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Olsen, R., 2005: Geology and Uranium Exploration Technology of the Proterozoic
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Athabasca Basin, Saskatchewan and Alberta. Geological Survey of Canada, Bulletin
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Kim, Bo-Hyun, September 2007: Rockmass Classification: Pele Mountain Resources
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Kirkwood, D., McCreath, D., and Peters, T., 1996: Decommissioning of uranium mine
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Marchbank, A., 1986: Underground biological in-place leaching of uranium ores,
Denison Mines Limited
Mariano, A. N., 2011, Report on 15 rock samples for Pele Mountain Resources Inc.,
internal report.
MiningWatch Canada, Elliot Lake Uranium Mines, http://www.miningwatch.ca/elliot-lakeuranium-mines (accessed June 20, 2012).
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Presentation to Elliot Lake City Council. Activities Associated with the Care and
Maintenance of the Tailings Facilities.
Robertson, J. 1986: Huronian geology and the Blind River (Elliot Lake) uranium deposits.
In Uranium Deposits of Canada, Special Volume 33, Canadian Institute of Mining
and Metallurgy.
Robertson, James A., 1962: Geology of Townships 137 and 138. Ontario Department of
Mines, Geological Report No. 10.
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Robinson, A., Spooner, T., 1984: Post-depositional modification of uraninite-bearing
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Robinson, H.S., 1954: Aquarius Porcupine Option, Twp 143 Sudbury Mining Division –
Summary Report of Surface Exploration and Diamond Drilling.
Roscoe Postle Associates Inc., 2011: Technical Report on the Eco Ridge Mine Project
Uranium and Rare Earths Mineral Resources, Elliot Lake Area, Ontario, Canada NI
43-101 Report, prepared for Pele Mountain Resources, filed on SEDAR/available at
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Roscoe Postle Associates Inc., 2011b: Technical Report on the Eco Ridge Mine Project
Uranium and Rare Earths Mineral Resources, Elliot Lake Area, Ontario, Canada NI
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Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 27-2
Technical Report NI 43-101 – June 20, 2012
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Roscoe, S.M. and Steacy, H.R., 1958: On the Geology and Radioactive Deposits of
Blind River Region; Proc. 2nd United Nations Conference on Peaceful Uses of Atomic
Energy, Paper 222.
Saager, R. and Stupp, H.D., 1983: U−Ti phases from Precambrian quartz-pebble
conglomerates of the Elliot Lake area, Canada, and the Pongola basin, South Africa,
Journal of Mineralogy and Petrology, Vol. 32, Numbers 2-3, pp. 82-103
Saskatchewan Research Council, 2012: Draft Final Report, Metallurgical Recovery for
Rare Earth Elements, prepared for Pele Mountain Resources, SRC Publication No.
13197-2C12, February 2012.
Scott Wilson RPA, 2007: Preliminary Assessment of the Elliot Lake Project, Ontario,
Canada, prepared for Pele Mountain Resources, filed on SEDAR/available at
www.sedar.com (October 3, 2007).
SENES Consultants Limited, 1997: Comprehensive Study Report, Decommissioning of
the Stanleigh Facilities.
SGS Lakefield Research, 2011: unpublished metallurgical data.
SNC-Lavalin, 2011: Pele Mountain Resources Inc. Eco Ridge Project Capital and
Operating Cost Estimate.
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Sylvester, P.J., 2007: Mineralogy of Uranium Beds, Elliot Lake Uranium Deposit. Report
prepared for Pele Mountain Resources Inc. Inco Innovation Centre, Memorial
University, St. John’s Newfoundland and Labrador.
Theis, N.J., 1979: Uranium-bearing and associated minerals in their geochemical and
sedimentological context, Elliot Lake Ontario. Geological Survey of Canada, Bulletin
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Van Schmus, W.R., 1976: Early and Middle Proterozoic history of the Great Lakes area,
North America. Philosophical Transactions; Royal Society, London, Vol. A280, pp.
605-628.
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and Demand 2007-2030.
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Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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www.metalpages.com
www.roskill.com (Roskill Information Services).
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28 DATE AND SIGNATURE PAGE
This report titled “Technical Report on the Eco Ridge Mine Project, Elliot Lake Area,
Ontario, Canada” and dated June 20, 2012, was prepared and signed by the following
authors:
(Signed & Sealed) “Jason J. Cox”
Dated at Toronto, ON
June 20, 2012
Jason J. Cox, P.Eng.
Senior Mining Engineer
(Signed & Sealed) “Kathleen Ann Altman”
Dated at Lakewood, CO
June 20, 2012
Kathleen Ann Altman, Ph.D., P.E.
Principal Metallurgist
(Signed & Sealed) “Tudorel Ciuculescu”
Dated at Toronto, ON
June 20, 2012
Tudorel Ciuculescu, M.Sc., P.Geo.
Senior Geologist
(Signed & Sealed) “Leo Hwozdyk”
Dated at Toronto, ON
June 20, 2012
Leo Hwozdyk, P.Eng.
Consulting Mining Engineer
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 28-1
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
29 CERTIFICATE OF QUALIFIED PERSON
KATHLEEN ANN ALTMAN
I Kathleen Ann Altman, P.E., as an author of this report entitled “Technical Report on the
Eco Ridge Mine Project, Elliot Lake Area, Ontario, Canada” prepared for Pele Mountain
Resources Inc. and dated June 20, 2012, do hereby certify that:
1. I am Principal Metallurgist with Roscoe Postle (USA) Ltd. of Suite 505, 143 Union
Boulevard, Lakewood, Co., USA 80228.
2. I am a graduate of the Colorado School of Mines in 1980 with a B.S in Metallurgical
Engineering. I am a graduate of the University of Nevada, Reno Mackay School of
Mines with an M.S. in Metallurgical Engineering in 1994 and a Ph.D. in Metallurgical
Engineering in 1999.
3. I am registered as a Professional Engineer in the State of Colorado (Reg.# 37556)
and a Qualified Professional Member of the Mining and Metallurgical Society of
America (Member # 01321QP). I have worked as a metallurgical engineer for a total
of 30 years since my graduation. My relevant experience for the purpose of the
Technical Report is:
 I have worked for operating companies, including the Climax Molybdenum
Company, Barrick Goldstrike, and FMC Gold in a series of positions of increasing
responsibility.
 I have worked as a consulting engineer on mining projects for approximately 15
years in roles such a process engineer, process manager, project engineer, area
manager, study manager, and project manager. Projects have included scoping,
prefeasibility and feasibility studies, basic engineering, detailed engineering and
start-up and commissioning of new projects.
 I was the Newmont Professor for Extractive Mineral Process Engineering in the
Mining Engineering Department of the Mackay School of Earth Sciences and
Engineering at the University of Nevada, Reno from 2005 to 2009.
4. I have read the definition of "qualified person" set out in National Instrument 43-101
(NI 43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI 43-101.
5. I did not visit the Eco Ridge Mine Project site.
6. I am responsible for the preparation of Section 13 and portions of Sections 17, 25,
26, 27, 28 and 29 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.
8. I have previously prepared an NI 43-101 Technical Report for Pele Mountain
Resources, titled “Technical Report on the Eco Ridge Mine Project Uranium and
Rare Earths, Elliot Lake Area, Ontario Canada”, dated August 19, 2011.
9. I have read NI 43-101, and the Technical Report has been prepared in compliance
with NI 43-101 and Form 43-101F1.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
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10. To the best of my knowledge, information, and belief, the Technical Report contains
all scientific and technical information that is required to be disclosed to make the
technical report not misleading.
Dated this 20th day of June, 2012
(Signed & Sealed) “Kathleen Ann Altman”
Kathleen Ann Altman, P.E.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 29-2
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
JASON J. COX
I, Jason J. Cox, P.Eng., as an author of this report entitled “Technical Report on the Eco
Ridge Mine Project, Elliot Lake Area, Ontario, Canada” prepared for Pele Mountain
Resources Inc., and dated June 20, 2012, do hereby certify that:
1. I am a Senior Mining Engineer with Roscoe Postle Associates Inc. of Suite 501,
55 University Ave Toronto, ON, M5J 2H7.
2. I am a graduate of the Queen’s University, Kingston, Ontario, Canada, in 1996
with a Bachelor of Science degree in Mining Engineering.
3. I am registered as a Professional Engineer in the Province of Ontario (Reg.#
90487158). I have worked as a Mining Engineer for a total of 15 years since my
graduation. My relevant experience for the purpose of the Technical Report is:
 Review and report as a consultant on mining operations and projects around
the world for due diligence and regulatory requirements
 Engineering study work on projects around the world
 Planning Engineer to Senior Mine Engineer at three North American mines
 Contract Co-ordinator for underground construction at an American mine
4. I have read the definition of "qualified person" set out in National Instrument 43101 (NI 43-101) and certify that by reason of my education, affiliation with a
professional association (as defined in NI 43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified person" for the purposes of
NI 43-101.
5. I did not visit the Eco Ridge Mine Project.
6. I am responsible for overall preparation Sections 2, 3, 19, 20, 22, 24, 25 and 26
and am partially responsible for Section 1 and 21 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43101.
8
I have previously prepared an NI 43-101 Technical Report for Pele Mountain
Resources, titled “Technical Report on the Eco Ridge Mine Project Uranium and
Rare Earths, Elliot Lake Area, Ontario Canada”, dated August 19, 2011.
9
I have read NI 43-101, and the Technical Report has been prepared in
compliance with NI 43-101 and Form 43-101F1.
10 To the best of my knowledge, information, and belief, the Technical Report
contains all scientific and technical information that is required to be disclosed to
make the Technical Report not misleading.
Dated this 20th day of June, 2012
(Signed & Sealed) “Jason J. Cox”
Jason J. Cox, P.Eng.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 29-3
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
TUDOREL CIUCULESCU
I, Tudorel Ciuculescu, M.Sc., P.Geo., as an author of this report entitled “Technical
Report on the Eco Ridge Mine Project, Elliot Lake Area, Ontario, Canada” prepared for
Pele Mountain Resources Inc., and dated June 20, 2012, do hereby certify that:
1. I am Senior Geologist with Roscoe Postle Associates Inc. of Suite 501, 55
University Ave Toronto, ON, M5J 2H7.
2. I am a graduate of University of Bucharest with a B.Sc. degree in Geology in
2000 and University of Toronto with an M.Sc. degree in Geology in 2003.
3. I am registered as a Professional Geologist in the Province of Ontario (Reg.#
1882). I have worked as a geologist for a total of 6 years since my graduation.
My relevant experience for the purpose of the Technical Report is:
 Preparation of Mineral Resource estimates.
 Over 5 years of exploration experience in Canada and Chile.
4. I have read the definition of "qualified person" set out in National Instrument 43101 (NI 43-101) and certify that by reason of my education, affiliation with a
professional association (as defined in NI43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified person" for the purposes of
NI 43-101.
5. I visited the Eco Ridge Mine project in November 2010.
6. I am responsible for overall preparation of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 14,
and 23, and am partially responsible for Section 1 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43101.
8. I have previously prepared an NI 43-101 Technical Report for Pele Mountain
Resources, titled “Technical Report on the Eco Ridge Mine Project Uranium and
Rare Earths, Elliot Lake Area, Ontario Canada”, dated August 19, 2011.
9. I have read NI 43-101, and the Technical Report has been prepared in
compliance with NI 43-101 and Form 43-101F1.
10. To the best of my knowledge, information, and belief, the Technical Report
contains all scientific and technical information that is required to be disclosed to
make the technical report not misleading.
Dated this 20th day of June, 2012
(Signed & Sealed) “Tudorel Ciuculescu”
Tudorel Ciuculescu, M.Sc., P.Geo.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 29-4
Technical Report NI 43-101 – June 20, 2012
www.rpacan.com
LEO R. HWOZDYK
I, Leo R. Hwozdyk, P.Eng., as an author of this report entitled “Technical Report on the
Eco Ridge Mine Project, Elliot Lake Area, Ontario, Canada” prepared for Pele Mountain
Resources Inc., and dated June 20, 2012, do hereby certify that:
1. I am Associate Mining Engineer with Roscoe Postle Associates Inc. of Suite 501,
55 University Ave Toronto, ON, M5J 2H7.
2. I am a graduate of Queen’s University, Kingston, Ontario, in 1976 with a B.Sc. in
Mining.
3. I am registered as a Professional Engineer in the Province of Ontario (Reg.#
21150016). I have worked as a mining engineer for a total of 31 years since my
graduation. My relevant experience for the purpose of the Technical Report is:
 Review and report as a consultant on numerous mining operations and
projects around the world for due diligence and regulatory requirements.
 Mines Engineer at Denison Mines, Elliot Lake Property, Ontario.
 Mine Projects Superintendent at Curragh Resources, Faro, Yukon.
 Mining Consultant for various base metal mines in Ontario.
4. I have read the definition of "qualified person" set out in National Instrument 43101 (NI 43-101) and certify that by reason of my education, affiliation with a
professional association (as defined in NI 43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified person" for the purposes of
NI 43-101.
5. I did not visit the Eco Ridge Mine Project.
6. I am responsible for preparation of Section 16 and 18 and am partially
responsible for Section 21 of the Technical Report.
7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43101.
8. I have previously prepared an NI 43-101 Technical Report for Pele Mountain
Resources, titled “Technical Report on the Eco Ridge Mine Project Uranium and
Rare Earths, Elliot Lake Area, Ontario Canada”, dated August 19, 2011.
9. I have read NI 43-101, and the Technical Report has been prepared in
compliance with NI 43-101 and Form 43-101F1.
10. To the best of my knowledge, information, and belief, the Technical Report
contains all scientific and technical information that is required to be disclosed to
make the Technical Report not misleading.
Dated this 20th day of June, 2012
(Signed & Sealed) “Leo R. Hwozdyk”
Leo R. Hwozdyk, P.Eng.
Pele Mountain Resources Inc. – Eco Ridge Mine Project, Project #1826
Rev. 0 Page 29-5
Technical Report NI 43-101 – June 20, 2012