In February 2022, following completion of the RC drilling program over the K.Hill Extension in 2021 and mineralogical analysis of samples from the B Horizon, the Company announced an updated MRE prepared by SRK in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Code (“CIM Code”) and NI 43-101. The updated MRE encompassed results from all zones of the K.Hill Project, including the B Horizon and the new K.Hill Extension area.

The MRE reported was restricted to all classified material falling within an optimized pit shell representing a long-term price for HPMSM of USD1,588 /t, based on 2020 market data. The shell also used various technical economic parameters, derived from the ongoing technical studies for the K.Hill Project. Additionally, the MRE is reported above a cut-off grade of 7.3% MnO. It represented the material which SRK considers has reasonable prospects for eventual economic extraction. SRK noted that pit optimization and the pit selected is relatively insensitive to changes in product pricing above a HPMSM price of circa USD1,000/Mt (approximate 2% reduction in reported metal using a pit at this price).

K.Hill Project SRK MRE Statement, reported within an optimized pit shell and at a cut-off grade of 7.3% MnO, as of February 2022.

Classification Tonnage (Mt) Grade MnO (%) Contained MnO (Mt)
Indicated mineral resources 2.1 19.3 0.41
Inferred mineral resources 3.1 16.9 0.53
(1) The Indicated and Inferred mineral resources are reported above a cut-off grade of 7.3% MnO as of February 2022 Classification
(2) All tonnages are reported as dry
(3) The MRE is constrained within estimation domains based on geological modelling and grade and within a Lerchs-Grossman optimized pit shell based on an HPMSM price of USD1,588 /t and the following technical-economic parameters:
  1. Mining Cost – USD3.46 /t rock
  2. Processing Cost – USD213 /t ore
  3. Selling cost – 3% and a freight cost of USD60 /t HPMSM
  4. G&A – USD20 /t ore
  5. Discount Rate – 10%
  6. Processing Recovery – 90.7%
  7. Mining Recovery – 98%
  8. Mining Dilution – 3%
  9. Geotechnical Slope Angle - 41°
(4) SRK notes that the long term HPMSM price quoted is based on 2020 market data, which was available at the time of reporting the MRE. SRK understands that additional pricing information will be available for input into subsequent technical studies and this may impact on the Mineral Resource reported. In light of the lack of sensitivity of the MRE to the selling price above a HPMSM price of circa USD1,000 /t, this is not considered to be a material risk in reporting the Mineral Resource and may present a further opportunity.
(5) All figures are rounded to reflect the relative accuracy of the estimates.
(6) It is uncertain if further exploration will convert Inferred Mineral Resources to higher confidence categories.
(7) The northern domains have a higher average density than the southern extension domains. Limited density measurements are part of the reason for Inferred classification of the majority of the south extension. Infill drilling and additional density measurements may result in an increase or decrease of calculated tonnage for this area.

The Qualified Person in accordance with the CIM Code, with responsibility for the reporting of the MRE presented is Mr Peter Gleeson, AIGS, MIMMM (CP), a Corporate Consultant (Resource Geology) with SRK. Mr Gleeson has the relevant experience in reporting Mineral Resources on various base, precious and ferrous metal assets globally.

Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. SRK is not aware of any factors (environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that have materially affected the MRE. It is uncertain if further exploration will convert Inferred and Indicated Mineral Resources to higher confidence categories.

The Company filed the supporting Technical Report on SEDAR at www.sedar.com on March 30, 2022. A full summary of the 2022 Technical Report can be found in the Company’s annual information form (“AIF”) for the year ended December 31, 2021 and filed on SEDAR on March 30, 2022.