Manual

REVISED
KEMESS NORTH
PRE-FEASIBILITY PROJECT
OMENICA MINING DIVISION

BRITISH COLUMBIA
CENTRED ON:
UTM (NAD 83, Zone 9)
NTS 94E/2 & 94D/15
636 534E
6 326 373N
LATITUDE: 5700 North
LONGITUDE: 12650 West
J.H. Gray, PEng

R.J. Morris, PGeo
K.W. Major, PEng
A. Arik
4 June 2004
DISCLAIMER
This report was prepared for Northgate Exploration Ltd. by GR Technical Services Ltd.
The quality of information, conclusions and estimates contained herein are based on
industry standards for engineering and evaluation of a mineral project. The report is
based on: i) information available at the time of preparation, ii) data supplied by outside
sources, iii) engineering, evaluation, and costing by other technical specialists and iv)
the assumptions, conditions and qualifications set forth in this report. Cost models use
extensive information from the existing Kemess South operations, increasing the
probability that actual costs in the near term will fall within the accuracy of a PreFeasibility Study. However, no warranty should be implied as to the accuracy, especially
with longer term estimates of forward looking economic assumptions for the future
operations such as but not limited to, metal prices, exchange rates, labour costs, and
energy, equipment, and supply costs.
EXECUTIVE SUMMARY
Property Description Location, Ownership and Current operations
The Kemess North deposit is part of the Kemess Property, which is located
approximately 430 km northwest of the city of Prince George, British Columbia, Canada,
at 5702 north longitude and 12647 west latitude. The property includes one active
mining lease (#354991) and 213 surrounding and contiguous mineral claims. At least
four additional mining leases are currently in the application process to cover the
Kemess North area.
Legal surveys have been completed for mining lease #354991. The mineral
claims covering the Kemess North deposit and the area to the north and west of the
proposed mine have been surveyed and it is proposed to convert these claims into
mining leases. The Kemess North deposit and associated occurrences are located on
the New Kemess 1, 2 and 3 claims.
The Kemess Property is owned and operated by Kemess Mines Ltd., a 100%
controlled subsidiary o f Northgate Exploration Limited. Kemess Mines Ltd. holds the
surface rights to the property through their mineral claims and mine lease.
The Kemess South deposit, located on mining lease #354991, currently supplies
mill-feed to a 52 000 tpd mill. In 2001, Northgate announced the discovery of a
significant deposit at Kemess North, which was the focus of major drilling campaigns
during 2002 and 2003.
The Kemess North project site is generally located in three north facing alpine
cirques with original ground surface ranging from 1,500 to 2,000 m elevation all above
tree line. Open pit mining will be located in the centre cirque and eastern cirques. The
southern pit wall will be bounded by the southern headwall of the eastern cirques. The
crusher and other infrastructure will be located at the pit rim in centre cirque. A natural
rock glacier is evident in the western cirque. No surface development has been planned
to date in the western cirque.
The climate is generally moderate, although snow can occur during any month.
Temperatures range from -35 to 30 and average annual precipitation amounts to 890
mm. Since mining will be scheduled for year round operations, 24 hours per day
equipment and procedures will need to be adaptable for the variations of 4 seasons in a
mountain environment. The current Kemess South operations will be suited for Kemess
north with some provision for more extreme weather conditions at the higher elevations
and provision for avalanche monitoring and control.
Access to the Kemess North project is provided by both air and road via the
current Kemess Operations. Personnel are from various locations in British Columbia
and Alberta. There are scheduled year-round flights from surrounding communities and
Vancouver. All season road access is from either the town of Mackenzie or Fort St.
James via the Omenica resource access road. A privately owned, 380 km power line
originating in Mackenzie in the south provides power to the mine area via the BC Hydro
grid.
Kemess Mines Ltd. holds surface rights through their mineral claims and mining
leases. Onsite infrastructure for the current operation consists of an office, maintenance
facilities, a camp, a mill, crushers and raw ore stockpile areas, access and service
roads, airstrip, explosives depot, and tailings facilities. The tailings pond capacity is
sufficient to meet the needs of the Kemess South ore body until its completion in 2008.
The Kemess North mining plan is based on utilizing the current facilities for ore
processing, accommodation, and support, plus new facilities for the Mining operation at
Kemess North. These include access roads, potential waste dump sites, a pit side
crusher and conveyor system to the current plant site, a field supervision and equipment
service centre adjacent to the pit and a new tailings pond located at Duncan Lake.
Preproduction stripping and construction of the Kemess North field service
facilities will commence 1 to 2 years in advance with Production beginning when the ore
transportation system from Kemess North is in place and the first pit side crusher is in
operation. There will be a transition period required where both Kemess South and
Kemess North mining operations are feeding the mill, which will continue until reserves
are exhausted at Kemess South. When mining is completed at Kemess South all
crushing capacity will be transferred to the Kemess North crusher station.
Tailings and waste dump facilities are being designed at Duncan Lake with
sufficient capacity for the Kemess North waste. This includes all mill tailings and mine
waste rock. Much of the mine waste rock is PAG material and is planned to be
deposited sub-aqueously in the tailings pond. Any NAG material within the pit will be
used for construction fill or deposited in waste dumps adjacent to the pit area but in the
area specified within the water management plan.
Property Geology
Andesite Volcanics (Takla Group-T3)
The property is predominantly underlain by a thick (>1,000 m) succession of
andesitic flows. The flows exhibit textures ranging from fine grained and massive to
porphyritic with medium grained and mostly phyric, subhedral augite phenocrysts. The
Takla volcanic rocks host a significant portion of the Au-Cu mineralization.
On surface, exposed in the cirque headwalls and some upper intersections of
drill intercepts is a bladed feldspar porphyritic unit. Due to the lack of bedding and/or
marker horizons, the inclination of the massive thick succession of Takla volcanics is
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difficult to ascertain but probably reflects the regional trend of flat lyi ng Mesozoic
assemblages.
Dacitic Polylithic Fragmental (Hazelton Group - H3:Toodoggone Formation)
Mantling the northern and eastern limits of the Kemess North area is a matrix
supported polylithic fragmental volcanic unit. The Polylithic Fragmental Dacite is an
enigmatic unit as it shows field relations suggestive of both an extrusive and intrusive
emplacement mechanism. The evidence suggests that basement structures and
conduits that allowed extrusion of the local Toodoggone volcanic assemblage underlie
the Kemess North area.
Quartz Monzonite/Quartz Diorite
These are intermediate intrusive units do not reach surface. The main quartz
monzonite mass beneath East Cirque hosts the bulk of the Cu-Au mineralization at
Kemess North.
Post-Mineral Dykes
Post-ore dykes, including feldspar porphyry and minor mafic varieties, cross cut
Takla volcanics and outcrop locally in cirque highwalls and along ridges. The feldspar
porphyry dykes also cross cut the Jurassic-Toodoggone fragmental unit and are
generally barren and unaltered. The relationship of the feldspar dykes with the larger
quartz diorite stocks is not clear, however they appear temporally late in the sequence
of events. Mafic dykes are generally thin (<1 m to 4 m), dark green and barren of
sulphides and veining.
Faults
At least three steeply dipping, northwest trending normal faults have been
inferred from surface mapping and drilling to transect the Kemess North property. Fault
spacing ranges from 500 m to 1,500 m and they are generally parallel to the Duncan
and Saunders Faults located west and east respectively.
Broken Zone
A flat-lying zone of intensely broken rock and multiple gouge zones (which
results in poor drilling conditions) occurs above the deposit, and is referred to as the
Broken Zone. The Broken Zone averages about 80 m from surface to competent
bedrock and is comprised of clay, multiple gouge zones and a pyritic-argillic alteration
component. Theories on the formation of the Broken Zone range from the effects of
present day weathering, porphyry related alteration zonation, to the tectonic end
products of shallow faulting and thrusting. The most plausible explanation is that the
Broken Zone and related phyllic alteration are due to pre-Toodoggone weathering
processes.
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Mineralization
Gold-copper mineralization forms an inclined tabular zone that is centred on the
East Cirque porphyritic monzodiorite. Alteration and mineralization is associated with,
and zoned both vertically and laterally from the quartz diorite/quartz monzonite intrusive
intersected at depth beneath the East Cirque.
The highest-grade Au-Cu zones occur at or near the quartz monzonite Takla
volcanic contact. This zone occurs mostly within the quartz monzonite stock and to a
lesser extent within the andesite adjacent to the intrusive stock. The protolith is
commonly completely replaced. The quartz monzonite/quartz diorite stock and
associated quartz-magnetite zone is interpreted as the heat source driving the porphyry
copper-gold system at Kemess North.
Grading outwards from the East Cirque stock into the Takla volcanics,
silicification decreases. Sericitization, commonly from the destruction of matrix and
phenocryst plagioclase, is pervasive in the Takla volcanic rocks. The uppermost
alteration zone is the phyllic or QSP zone, which consists mostly of sericite-chloritequartz +/- pyrite and forms the extensive Broken Zone and bright orange-red outcrops at
surface. Pyrite is common throughout (5-7%), both disseminated and within vuggy
quartz veining. This alteration zone is mostly barren of any significant Cu and will often
show a slight increase in Au with depth. It has been postulated that this zone shows
similarities to an acid leached cap, however it lacks any form of supergene enrichment
in base metals, as occurs at Kemess South.
Overall, sulphide mineralization throughout the deposit consists of 2-3% pyrite,
with lesser amounts of chalcopyrite and traces of molybdenum. Pyrite occurs as
disseminations, fracture fillings, and veins up to a few centimetres wide generally
associated with quartz-anhydrite-magnetite veins and zones of quartz-magnetite
replacement. The mode of occurrence of chalcopyrite is similar except that veinlets are
rare and significant disseminations occur in zones of stronger quartz-magnetite stock
work and quartz-magnetite replacements. Gold and copper grades variably diminish
outward into the hanging wall and footwall. Total sulphide content in the core of the
deposit averages 3 -5%, rising to 5-7% in the pyrite-rich sericitic altered upper halo.
Moving west of East Cirque to the Nugget Zone, alteration and mineralization
becomes irregular as the intrusive units approximate steeply dipping dykes. The Nugget
Zone alteration is dominated by weak chlorite -biotite altered Takla volcanics commonly
with disseminated magnetite. Substantial gold-copper mineralization is present within
the Takla volcanics but at depths exceeding 400 m. The Nugget Zone generally exhibits
a higher gold to copper ratio than Kemess North, and rare narrow intersections of gold
grades of up to 8 g/t are present.
i v of 138
Exploration
The Kemess North property represents a highly advanced project. The early
exploration work in the area identified a porphyry target but it wasnt until deep drilling in
2001 that significant gold and copper grades were located. Since 2001 exploration has
been directed at expanding the resource base in the proposed pit area by drilling 16
holes in 2001, 41 holes in 2002, and 19 holes in 2003.
Because the target is deep, geological mapping and geochemical techniques add
little value, likewise, surface and airborne geophysical exploration have contributed little.
The procedures followed in the field and through the interpretation stage of
exploration have been professional. Various crews under the supervision of professional
geologists carried out the exploration work. Since 2001 to the present day there has
been continuity in personnel both in the field and with the data interpretation. It is
considered that the reliability of the data obtained with exploration is very high.
Modelling Resources and Reserves
Kemess North is a large copper-gold porphyry deposit and is typical of porphyry
gold-copper deposits in the western cordillera. The deposit has a low-grade ore zone at
a depth of 150 m below the ground surface on the western side of the deposit and a
higher grade zone 300 to 550 m below surface on the eastern side. A 3-D Block Model
has been used to represent the Kemess North mineral Resources. The geology model
area used is large enough to include drill holes from the Nugget area to the west and
the Kemess East area. To restrict the resource estimate to defined geology units, four
major lithology zones were modeled as defined by the drillholes.
A summary of information from the database and geostatistical resource estimate
work includes the following:
198 drill holes.
40,237 copper assays.
39,821 gold assays.
Copper and gold show a correlation factor of 0.80.
Outlier high grade cutoffs were applied to both Copper and Gold. 14 Copper
assays were cut to 1.35% and 16 high grade Gold assays were cut to 4 g/t. The
cut grades were used in compositing.
5 m and 15 m fixed length composites were generated for comparison of the

composite length on grade dilution and loss effects with respect to the original
assays. The 5m composites were chosen for modelling which is reasonable for
this type of deposit.
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The influence of a few remaining high-grade composites were limited to a

maximum of 50 m during interpolation.
The composites were tagged with a Litho code according to the 3-D solid they
were included with.
Variograms (both grade and directional) using the 5m composites were studied
for Litho codes 5, 6, and 7. Kriging parameters were determined from the
variograms for Litho zones 5, 6, and 7.
A contact analysis was completed indicating that the transition zone across the
Litho boundaries is less than the typical drill spacing. Therefore a hard-boundary
approach was chosen to interpolate each Litho zone separately.
Eighteen drillholes with suspect down-hole surveys were found in the database.
Two models were built, one with all of the drill holes, where the suspect holes had their
down-hole surveys corrected, and the second with the 18 suspect drill holes removed.
The resulting models were very similar in contained resources however subsequent
mine planning work with the two models showed similar economic pit sizes for the two
models were achieved with only a 5% difference in input metal prices. With this
sensitivity it was decided for the mine planning work, to use the model including the
corrected holes since the assays are valid and excluding the holes is less
representative than using the corrected holes.
The grade interpolation method and search distances for kriging were based on
the Geostatistical analysis and variogram parameters. A minimum of 3 and a maximum
of 16 composites were used for the interpolations with maximum 4 composites from
each quadrant. The maximum search for the composites was limited to 200 m. The
general steps were:
A background interpolation was done using the inverse distance weighting

to a power of three without using the litho boundaries.
Separate 'Ordinary Kriging' (OK) runs were made for AU & CU for LITHO
codes 5, 6, & 7 (6 runs) using the specific interpolating parameters for
each metal by zone. For blocks that meet the selection criteria the
background values were over written.
The methodology employed for the grade interpolation of the model

followed the standard industry practices and is based on the extensive
experience on similar deposits.
The reserves Class codes were assigned based on the Geostatistical

analysis and the following items loaded into the model during the grade
interpolation runs.
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Resource Classification Criteria Used

1
Measured Resources
DIST = < 30 m
or
DIST = 31-50 m
and
NCOMP > = 5
2
Indicated Resources
DIST = 31-50 m
and
NCOMP = < 5
or
51 m < DIST < 150 m
and
NCOMP > = 5
or
51 m < DIST < 200 m
and
LITHO = 5, 6, or 7
3
Inferred Resources
DIST > 150
or
Other blocks that
cannot be classified as
measured or indicated
Where DIST is the distance to the nearest drill hole from the centre of the block and
NCOMP is the number of composites used in the interpolation of a block.
Mineral Resources
The following Resource tables are based on the total Geological Model. They
only include material within the defined LITHO zones.
Summary of Measured Resources
Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
Tonnes
(Mt)
739.6
589.4
435.9
263.7
123.2
52.5
27.6
15.7
8.8
4.5
2.4
Mean
Cu %
0.127
0.153
0.181
0.217
0.267
0.330
0.384
0.430
0.477
0.527
0.575
Mean
Au g/t
0.237
0.278
0.320
0.376
0.465
0.610
0.769
0.928
1.083
1.246
1.452
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.127
0.238
0.154
0.279
0.182
0.324
0.220
0.385
0.273
0.478
0.337
0.627
0.393
0.793
0.442
0.962
0.491
1.131
0.547
1.309
0.592
1.486
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Summary of Indicated Resources

Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
Tonnes
(Mt)
947.9
632.8
411.2
218.9
95.9
38.5
19.0
9.6
4.2
1.8
0.8
Mean
Cu %
0.098
0.136
0.170
0.210
0.259
0.317
0.365
0.409
0.457
0.502
0.547
Mean
Au g/t
0.186
0.235
0.289
0.350
0.437
0.569
0.714
0.895
1.099
1.206
1.251
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.098
0.185
0.135
0.234
0.170
0.289
0.209
0.349
0.257
0.434
0.314
0.567
0.362
0.714
0.406
0.897
0.465
1.104
0.513
1.219
0.547
1.249
Summary of Inferred Resources

Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
(Mt)
337.1
74.1
41.9
28.4
11.2
2.9
0.27
0.18
0.06
Mean
Cu %
0.040
0.131
0.175
0.196
0.234
0.276
0.357
0.376
0.407
Mean
Au g/t
0.068
0.164
0.217
0.234
0.307
0.397
0.542
0.589
0.646
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.040
0.068
0.131
0.164
0.175
0.217
0.196
0.234
0.234
0.307
0.276
0.397
0.357
0.542
0.376
0.589
0.407
0.646
Five individual areas were selected from the geologic model as manual checks
for grade and tonnage. The copper and gold grade estimates were calculated by
averaging the assay grades from all of the drill hole intercepts within the block. The
tonnage was calculated by using the averaged bulk density (SG) of the data from within
the block.
The estimated grades are very close to the modeled grades for both copper and
gold ranging from 7.0% to + 8.2% for Copper and 6.5% to +6.8% for Gold. The small
variance indicates the modelling method to be reasonable.
viii of 138
Reserves
The Ultimate Economic pit limit is based on a Lerchs-Grossman pit optimization
evaluation of the resource in the 3-D block model. This evaluation includes the Project
Base economic parameters, and overall slope design parameters derived from
Geotechnical evaluation of the pit walls. The economic pit limited is also constrained to
only consider Measured and Indicated Reserve Class material to generate revenue. A
final pit design has been designed (P634) based on this Ultimate economic pit limit
study and from more detailed Geotechnical slope design parameters including high wall
haul roads. The Reserves within the P634 pit design are generated from 3-D block
model.
Mining recovery is estimated at 95% and mining dilution of 10% is applied at the
contact between ore and waste. The dilution grade is estimated at 0.08 g/t Au and
0.05% Cu which is the average grade of material below the incremental cutoff grade.
Interpolated SG is used.
A NSR cutoff has been determined for the Reserves calculation using the
following factors:
NSP (net smelter price); copper C$0.901/lb and gold C$11.753/g.which accounts
for offsite expense, smelting, and refining.
Mill recovery factor; 88.8% for copper and 61.5% for gold.
The reserves for the final pit limit (P634) based on an NSR cutoff of $2.2 are:
Reserve Estimate
Kemess North, Pit P634
Proven
Probable
Total
Diluted
Mineable
(tonnes x 106)
282.40
131.84
414.24
Cu
(%)
Au
(g/t)
0.159
0.160
0.160
0.306
0.310
0.307
The final pit design includes 335.09 million tonnes of waste for a strip ratio of 1:0.81.
Note that the reserve tonnages above are all included in the Resource tonnages listed
earlier.
The overall pit slopes and detailed bench design parameters have been provided
by Knight Pisold for the different sectors of the pit wall based on an aggressive 1.2
Factor of Safety. The slope design parameters used are contingent on certain operating
practices and monitoring as prescribed by Senior review Consultants Will Bawden PhD,
PEng of the University of Toronto, and Chuck Brawner PEng. Knight Pisold have
ix of 138
indicated several design modifications required to the South wall of Pit P634. These
may increase the waste stripping by up to 10% but this is within the accuracy of the
reserves estimate and will not affect the overall economic viability of the design. These
modifications will be made during the Feasibility Design stage.
The LG sensitivity analysis was used to design the pit pushbacks. To enable a
more even annual strip ratio in the production scheduling, the first pushback will mine
the near surface lower grade ore on the west side. The deeper east side is split into 2
stages, a shallower north side and a deeper south side mining to the ultimate pit depth.
The first pushback has been further revised where the initial benches in the Prestripping period are included as a Pre-Production phase. The size of the stages was
roughly determined to ensure that each have a sufficient bench width to enable efficient
mining operations and for all the stages, the design was pushed to the ultimate pit
lateral limit on three walls, with subsequent pushbacks expanding in one direction only.
This will enable much more efficient mining operations when adjacent pushbacks are
being mined at the same time.
The production schedule for Kemess North is run from the Pit Phase reserves.
All production will be from the owners fleet except for minor tonnages for the small
initial benches of each pushback. These will require smaller specialized equipment to
operate on the steep original ground at the top benches. The major mining equipment
from Kemess south will be transferred to Kemess North as ore and waste production is
reduced in Kemess South. To meet the higher strip ratio requirements, additional haul
trucks will be purchased. The ore annual ore targets are adjusted each year to reflect
the ore hardness and anticipated SAG mill through put according to the HARD (BWI)
value in the Pit Reserves.
Milling
The Kemess North ore will be processed in the existing Kemess plant, initially
with integrated co-production with the current Kemess South ore and as a stand-alone
operation after the Kemess South ore is depleted. During the co-production period the
plant capacity will be increased and an ore transportation system from Kemess North
will be installed. This will include an Underground ore conveyor system and pit-side
crushers. The current capacities, costs and metallurgical performance of the plant are
well defined and carry a high level of assurance into the Kemess North project
performance and cost estimates.
The metallurgical test work for Kemess North is based on metallurgical samples
taken from the exploration drillholes. The met samples were well located to represent
the deep ore for the Kemess North deposit. Future testing should also be done on the
shallow ore on the west side of the pit for more detailed prediction of operating
performance during the earlier years of the project.
The ores of Kemess North share a number of favourable characteristics with the
Hypogene ores of the Kemess South deposit:
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Both deposits carry clean sulphides without surface oxidation.
Impurity elements occur in extremely low concentrations.
The sulphides are coarse grained and are adequately liberated for rougher
flotation at a grind of K80 at 145 .
Ball mill work indices are low compared to a majority of porphyry deposits.
The average metal contents of North ores are slightly lower, copper at 0.20% Cu
versus 0.22% Cu and gold at 0.4 g/t Au versus 0.75 g/t for South ores.
The pyrite content of Kemess North averages 4% compared to 1% pyrite for the
South ores. Since pyrite contains finely disseminated gold, higher pyrite carries a
larger portion of gold to tailings.
The near surface ores of the North deposit are of slightly lower grade than those
of deeper zones.
The rougher flotation with Kemess North ores in essence is a bulk sulphide float.
Rougher concentrates have to be re-ground to a K80 of =20 microns for cleaner
flotation to produce quality concentrates.
Existing flotation cell capacity and de-watering equipment are adequate for
treatment of North ores.
Concentrates will be free of deleterious impurities.
The Net Neutralization Potential for all North composites is negative, therefore
the tailings will be acid generating unless stored under water cover.
Subsequent analytical work has been completed on the samples from the
flotation test work and determined that there was a relationship between Ag and Au in
the concentrate for the various pit zones. Silver grades have not been included in the
Mining reserves and have not been used in any of the economic pit limit/reserve
calculations. Small silver credits have been included in the financial modelling.
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Environmental
Environmental considerations for the Kemess North project have been integrated
with the Total Kemess property requirements for ongoing operation and final closure.
Klohn Crippen has been retained for this work, which covers Mine Waste Management,
Water Management, Environmental studies, and Mine Closure planning. Klohn
Crippens work involves the base line data studies, evaluations, process design and
costing as required to meet or exceed the regulations. These requirements have been
included in the mining and processing designs and schedules. The capital and
operating costs as determined by Klohn Crippen have also been used in the cost
modelling.
Permitting
The permitting process for the Kemess North Project is being carried out by
Northgate. The project entered the regulatory review process for mine development
approval in October, 2003. This will involve three levels of government: Province of
British Columbia, First Nations (4 Bands) and the Government of Canada and will be
concurrent with the applications for Project Permitting. The provincial permits will
establish the guidelines for environmental protection during the construction and
operating phases of the Kemess North Project.
The formal project review was initiated with the submission of the Kemess North
Project Description to the BC Environmental Assessment Office (EAO) in October,
2003. The EAO has the responsibility to notify all stakeholders and disseminate relevant
project information during the review process. The primary government agencies
involved are as follows:
Province of BC: Environmental Assessment Office, Ministry of Water, Land &
Air, Ministry of Energy & Mines, and Ministry of Sustainable Resources;
Government of Canada: Canadian Environmental Assessment Office,
Department of Fisheries & Oceans, Environment Canada, and Natural Resources
Canada; and
First Nations: Kwadacha FN, Gitxsan FN, Takla Lake FN, and
Tsay Keh Dene FN.
The target for the approval for all permits is May 2005.
Financial Modelling
The financial modelling for the project was undertaken by Northgate and Hatch to
evaluate the costs, cashflows, and financial returns for the Kemess North Project.
These are based on calculating the cashflow of integrated Kemess South and Kemess
North operations, the stand alone Kemess South operation and determining the
incremental financial impact of the Kemess North project. This is summarized as:
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Exchange Rate
Metal Prices
Gold
Copper
Silver
Concentrate Treatment
& Refining Charges
Net Present Value (NPV)
at a 5% cost of capital
IRR
Cdn$/US$1.45
US $375/oz
US $1.00/lb
US $5.00/oz
$62/tonne concentrate and
$0.062/pound accountable
copper
US$75 million
8.9%
These assumptions represent Northgates estimates of the average metal price,

exchange rate and concentrate treatment and refining charges over the 2004-2020
period.
xiii of 138
TABLE OF CONTENTS
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INTRODUCTION AND TERMS OF REFERENCE..................................................... 1

DISCLAIMER.................................................................................................................... 3
(a)
Resource Modelling ............................................................................................. 3
(b)
Legal and Ownership........................................................................................... 3
(c)
Geotechnical ......................................................................................................... 3
(d)
Tailings Impoundment and Environmental....................................................... 3
(e)
Metallurgy and Infrastructure.............................................................................. 3
(f)
Permitting and Community Relations ................................................................ 4
PROPERTY DESCRIPTION AND LOCATION .......................................................... 4
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE &
PHYSIOGRAPHY ..........................................................................................................11
HISTORY.........................................................................................................................13
(a)
Kemess South.....................................................................................................13
(b)
Kemess North Project........................................................................................14
GEOLOGICAL SETTING .............................................................................................16
(a)
Regional Geology...............................................................................................16
(b)
Local Geology .....................................................................................................18
(c)
Property Geology ...............................................................................................18
(i)
Andesite Volcanics (Takla Group-T3) ...........................................18
(ii)
Dacitic Polylithic Fragmental (Hazelton Group - H3:Toodoggone
Formation) .........................................................................................19
(iii)
Quartz Monzonite/Quartz Diorite ...................................................19
(iv)
Post-Mineral Dykes ..........................................................................20
(v)
Broken Zone ......................................................................................20
DEPOSIT TYPE .............................................................................................................25
MINERALIZATION ........................................................................................................25
EXPLORATION..............................................................................................................27
DRILLING........................................................................................................................29
(a)
Procedures ..........................................................................................................29
(b)
Sample Length/True Thickness .......................................................................29
(c)
Condemnation Drilling .......................................................................................30
(d)
Collar Survey.......................................................................................................31
(e)
Down-Hole Survey .............................................................................................31
SAMPLING METHOD AND APPROACH .................................................................37
SAMPLE PREPARATION, ANALYSIS AND SECURITY......................................38
DATA VERIFICATION ..................................................................................................40
ADJACENT PROPERTIES..........................................................................................41
MINERAL PROCESSING AND METALLURGICAL TESTING.............................44
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES .......................49
(a)
Geological Model................................................................................................49
(b)
Mineral Resources .............................................................................................54
(c)
Bulk Density ........................................................................................................56
(d)
Model Check .......................................................................................................57
(e)
Reconciliation......................................................................................................57
17.
18.
19.
20.
21.
22.
(f)
Mineral Reserve Estimate .................................................................................58
ECONOMIC PIT LIMITS AND MINE PLAN ..............................................................61
(a)
Economic Pit Limits............................................................................................61
(b)
Detailed Pit Designs...........................................................................................68
(c)
Production Schedule ..........................................................................................83
INTERPRETATION AND CONCLUSIONS...............................................................85
RECOMMENDATIONS.................................................................................................88
(a)
For Feasibility......................................................................................................88
(b)
For Construction and Detailed design.............................................................88
REFERENCES ...............................................................................................................89
STATEMENT OF QUALIFICATIONS ........................................................................92
ADDITIONAL INFORMATION...................................................................................100
(a)
Current Kemess Mining Operations ..............................................................100
(b)
Kemess North Development...........................................................................101
(c)
Integrated Production ......................................................................................103
(d)
Recoverability Metallurgy and Mineral Processing ..................................103
(e)
Markets Transportation and Smelting ........................................................104
(f)
Contracts ...........................................................................................................104
(g)
Environmental Considerations .......................................................................106
(h)
Permitting Current Status ............................................................................108
(i)
Taxes..................................................................................................................109
(j)
Capital and Operating Cost Estimates..........................................................110
(k)
Economic Analysis ...........................................................................................111
(l)
Regional Potential ............................................................................................112
ii of 138
TERMINOLOGY AND ABBREVIATIONS

Abbreviation
Definition
Au
Gold
BFP
Bladed feldspar porphyry
BQ
1.32 inch diameter core
BMWI
Ball Mill Work Index
BWI
Bond Work Index
Cat trenching
mechanical trenching
CLASS
Resource/Reserve classification code in 3 -D Block Model
CoG
cutoff grade
Cu
Copper
DIST
Distance to closest composite during grade interpolation
EDA
Exploratory Data Analysis
FoS
Factor of safety
g/t
grams per tonne
GR Tech
GR Technical Services Ltd.
HQ
IP
Induced Polarization
KN
Kemess North
KS
Kemess South
LG
Lerchs-Grossman Pit Optimization Routine
LITHO
Lithology codes used in 3-D Block Model
Metre
Ma
Million years
Mt
Million tonnes
Mm3
Million cubic metres
NAG
Non-Acid Generating rock
NCOMP
Number of Composites used in Grade Interpolation
NPV
Net Present Value
Northgate
Northgate Exploration Limited
NQ
NSP
Net Smelter Price
iii
Abbreviation
Definition
NSR
Net Smelter Return
NTS
National Topographic System
PAG
Potentially Acid Generating rock
PDC
Project Design Criteria document
PROF
Net profit calculation per block, inclusive of mining, milling, treatment,

refining
QA/QC
Quality Assurance/Quality Control
QSP
Quartz-sericite-pyrite
SAG
Semi-Autogenous Grinding
SG
Specific Gravity
Stripper
Smoothed pit with ramps (Mine site terminology)
tpd
Tonnes per day
TUC
Technical Unit Cost
i v of 138
LIST OF FIGURES
Figure
Page
1.
Kemess Property Location Map
2.
General Claim Outline
3.
Detailed Kemess Area with Infrastructure Kemess South & Kemess

North
10
4.
Regional Geology after Massey et al 2003.

Minfile Occurrences plotted by colour showing principal
commodities as follows: gold red, silver blue,
and copper green
22
5.
Shows General Property Geology in Area Around Kemess North
23
6.
Kemess North Geology - Diakow (2001)
24
7.
Location map for 2003 Condemnation holes. Note area between

Kemess Lake (Lower camp) and CD-14B was not drilled as previous
work yielded negative results
30
8.
Drill Hole Locations
32
9.
Kemess Claim and Surrounding Properties
43
10.
Pit 634 with Met Sample Drill Holes
46
11.
Ultimate Pit Limit (P634)
59
12.
Ultimate Pit Limits - Undiscounted
65
13.
Ultimate Pit Limits - Discounted
66
14.
Ultimate Pits Section View
67
15.
Lerchs-Grossman Sensitivities
68
16.
Lerchs-Grossman Pit Low Prices
70
17.
Lerchs-Grossman Pit Split Final Stage
71
18.
Lerchs-Grossman Pit Base Price
72
19.
Pre-Strip Phase (P601)
75
Figure
Page
20.
Pit Phase 1 (P614)
76
21.
Pit Phase 2 (P624)
77
22.
Pit Phase 3 (P634)
78
vi of 138
LIST OF TABLES
Table
Page
5.1
Production History from Kemess South
14
5.2
Summary of Exploration Work
15
6.1
Lithologic Units Comprising Stratigraphic Succession
17
9.1
Exploration Employees/Contractors
28
10.1
Drill Collar Location and Orientation Data
33
15.1
Metallurgy Samples with Drill Hole Reference
45
15.2
Summarized Kemess North Metallurgy
48
15.3
Silver Metallurgy for Kemess North
48
16.1
Resource Model Limits and Dimensions
51
16.2
Resource Classification Criteria Used
54
16.3
Summary of Measured Resources
55
16.4
Summary of Indicated Resources
55
16.5
Summary of Inferred Resources
56
16.6
Model Checks
57
16.7
Reserve Estimate, Proven Category Kemess North Pit P634
60
16.8
Reserve Estimate, Probable Category Kemess North Pit P634
60
16.9
Reserve Estimate, Proven and Probable Kemess North Pit P634
60
17.1
Economic Pit Design Parameters
61
17.2
ePit Slope Angles by Pit Sector
62
17.3
Slope design parameters (From Knight Pisold)
72
17.4
Road Design Parameters
72
17.5
NSR Grade Cutoff Bins for Reserves
78
17.6
Reserves for Pre-Production Pit (P601)
79
17.7
Reserves for Phase 1 Pit (P614)
80
17.8
81
17.9
82
17.10 Major Mine Equipment Fleet
84
17.11 Annual ROM Mill Feed
84
22.1
Kemess South Reserves and Resources
97
22.2
Production Summary
99
vii
Table
Page
22.3
Metal Recovery Summary
100
22.4
Projected Operating Costs
106
22.5
IRR Sensitivity to Metal Prices
108
22.6
IRR Sensitivities
108
viii of 138
LIST OF APPENDICES
A. Kemess North Claims Status
B. Process Mill Flow Sheet
C. Management Structure & Personnel Organization Chart
D. Pit Slope Geotechnical Evaluation Knight Pisold Memorandum
ix
1.
Introduction and Terms of Reference
GR Technical Services Ltd. (GR Tech) was retained by Northgate

Exploration Ltd. (Northgate) to assist with Mineral resource modelling and
Mining Engineering aspects of a revised Pre-Feasibility Study and to prepare a
Technical Report compliant with NI 43-101 for Northgates Kemess North
property in the Omenica Mining Division of British Columbia. GR Tech had been
previously involved in 2003 with a Pre-feasibility study on Kemess North.
Following the 2003 exploration and drilling program Northgate decided to revise
the previous Pre-Feasibility Study to include the 2003 exploration information.
The project will later be advanced to a Feasibility study level to support future
investment and production decisions. The purpose of this Technical Report is
therefore to use the new exploration information and design detail from the
Revised Pre-Feasibility Study to revise and upgrade the Resource and Reserve
estimates for the Kemess North Property.
Northgate has consolidated the exploration information of the Kemess
North property from previous owners and participants, which includes Kennco
Exploration Ltd. from 1966 to 1971, Getty Mines Ltd. and Shell Oil from 1975 to
1976, and El Condor Resources Ltd. from 1986 to 1992. Since 2000, Northgate
has conducted field exploration on the project. This includes drilling programs in
2000, 2001, 2002, and 2003.
Northgate has filed a Technical Report to the Canadian Securities
Regulatory Authorities in February 2002 including all the exploration information
up to 2001. The 2002 report included a statement of Resources for the deposit.
After the 2002 drilling, a Pre-Feasibility study was undertaken which justified
more drilling in 2003. Northgate did not publish a revised Resource estimate after
the Pre-Feasibility study pending further exploration and engineering studies.
This current Report now includes the 2003 drilling information and the results of
extensive Engineering work by various Independent Consultant groups.
Those involved in past and present evaluations of the Kemess North
property include:
Previous:
February 2002 Technical Report MRDI
2003 Pre-feasibility Report Hatch, NorWest, GR Technical Services Ltd., Klohn
Crippen, and Knight Pisold
1 of 138
Current:
Revised Pre-Feasibility Report 2004 Hatch, GR Technical Services Ltd., Klohn
Crippen, and Knight Pisold
Information has been provided by Northgate and from field investigations
at the site. Verification of the data has been done. Since the Kemess North
project will be using equipment and infrastructure already in operation at
Northgates Kemess operations, the performance and cost data from the
operation has been used extensively for this evaluation and adapted as required
for Kemess North.
Jim Gray PEng of GR Tech has visited the property three times in the
course of this evaluation, to review the current operations and inspect the project
site. Denis Gaspe PEng visited the site in November 2003 to review the
operations, infrastructure, and operations management with respect to costing
and productivity for use in the Kemess North estimates. Bob Morris visited the
site in October 2003 to review onsite drilling and exploration information and to
review the site. Ongoing meetings with Hatch, Klohn Crippen, and Knight Pisold
have been held to review the results of field, Lab, and Engineering/Environmental
evaluation work these companies are performing for the respective Metallurgy,
Environmental, a nd Geotechnical aspects of the project.
Units of measure in this report are all metric and dollars are Canadian
currency with the exception of the market price of gold and copper which are
$US/oz and $US/lb respectively. These are converted to $Canadian fo r
economic pit limit evaluation and cash flow.
The reserves and resource stated in this report are stated in tonnes with
gold grades in grams per tonne (g/t) and copper grades in %. Gold and copper
equivalent grades have also been calculated for use as cutoff grades (CoG). The
equivalent grades and the economic pit limit designs are based on the following
assumptions:
Exchange rate :
$1US = $1.40 Canadian
Gold Price:
$US = 350/oz.
Copper Price:
$US = 0.95/lb.
While these economic parameters are the basis of the ultimate economic pit limit
and the Reserves included in this report, financial models using price and costs
sensitivities are also run for the revised Pre-Feasibility study.
2 of 138
2.
Disclaimer
GR Techs work in preparing this Technical Report is based on information

provided by Northgate, public domain documents and on work carried out by
others. A list of data and information sources is listed in Section 20. GR Tech
used information from these parties assuming that it was executed to acceptable
Engineeri ng standards. Where relevant GR Tech has made comment on the
applicability of these other works or where the works are previous NI 43-101
documents the declarations of the reports Qualified Person are relied upon.
Further information or evaluation of other documents should be sought directly
from the parties involved.
(a)
Resource Modelling
Geology, drill hole, and assay information was provided by Northgate and
has been reviewed GR Tech. Geo-statistical evaluation and Resource modelling
was done under contract to GR Tech by Abdullah Arik a Qualified Person in this
discipline, employed by Mintec Inc of Tucson, AZ. The results of this work were
reviewed and validated by GR Tech by comparing to previous estimates and spot
checking the Resource model.
(b)
Legal and Ownership
The Kemess North property is located on the Claims and Mining Lease as
listed in Section 3 - Property Description and Location as provided by Northgate ,
the legal status and ownership of the property has not been verified by GR Tech.
(c)
Geotechnical
GR Tech has relied on geotechnical work carried out by geotechnical

experts from Knight Pisold for the pit slopes. The slope design parameters used
are also contingent on certain operating practices and monitoring as prescribed
by review Senior Consultants Will Bawden PhD, PEng of the University of
Toronto, and Chuck Brawner PEng.
(d)
Tailings Impoundment and Environmental
GR Tech has relied on work by Klohn Crippen for the Tailing Dam design,
water management, and environmental issues for Kemess North.
(e)
Metallurgy and Infrastructure
GR Tech has relied on work by Hatch for the Processing Metallurgy and
Infrastructure design. This includes the capital and operating cost estimates in
these areas.
3 of 138
(f)
Permitting and Community Relations
All permitting requirements and Community Relations for the Kemess North
project have been undertaken by Northgate. This Technical Report includes the
Engineering, Environmental and other technical aspects of the Kemess North
project, required to meet the pertinent regulatory requirements. On this basis, it
should be reasonably expected that permits will be granted.
3.
Property Description and Location
The Kemess North deposit is part of the Kemess Property, which covers
35,312 ha. The property is located approximately 430 km northwest of the city of
Prince George, British Columbia, Canada, at 5702 north longitude and 12647
west latitude (see Figure 1). The property includes one active mining lease
(#354991) and 213 surrounding and contiguous mineral claims, which cover
more than 34,450 hectares. At least four additional mining leases are currently in
the application process to cover the Kemess North area. The claims fall within
the Omenica Mining Division of British Columbia located on NTS map sheets
94D/15, 94E/06, 07, 16 and 17 (see Figure 2).
Figure 3 also shows the Kemess North project area in relation to the
current Kemess South operations, and the overall property position.
Legal surveys have been completed for mining lease #354991. The
mineral claims covering the Kemess North deposit and the area to the north and
west of the proposed mine (New Kemess 1, New Kemess 2, DC 1 to 5, Gap and
Overlap) have been surveyed and it is proposed to convert these claims into
mining leases. The Kemess North deposit and associated occurrences are
located on the New Kemess 1, 2 and 3 claims (see Figure 3).
The Kemess Property is owned and operated by Kemess Mines Ltd., a
100% controlled subsidiary of Northgate Exploration Limited. Kemess Mines Ltd.
holds the surface rights to the property through their mineral claims and mine
lease. There is a placer reserve covering the area, making placer mining in the
area illegal.
The Kemess South deposit, located on mining lease #354991, currently
supplies mill-feed to a 52 000 tpd mill. In 2001, Northgate announced the
discovery of a significant deposit at Kemess North, which was the focus of major
drilling campaigns during 2002 and 2003.
4 of 138
Figure 1:
Kemess Property Location Map
5 of 138
Figure 2:
General Claims Outline
Appendix A outlines the relevant claim information for the property as

listed with Ministry of Sustainable Resource Management BC.
6 of 138
The location of the Kemess North project site and the other
operations and infrastructure for the Kemess South Operations, are shown
on Figure 3. The Kemess North project site is generally located in three
north facing alpine cirques with original ground surface ranging from 1,500
to 2,000 m elevation all above tree line. Open pit mining will be located in
shallower lower grade mineralization in the centre cirque and deeper higher
grade mineralization in the eastern cirque. The southern pit wall will be
bounded by the southern headwall of the centre and eastern cirques.
The crusher and other infrastructure will be located at the pit rim in
centre cirque. A natural rock glacier is evident in the western cirque. No
surface development has been planned to date in the western cirque.
There are currently royalties of 1.6% of gross revenues to Trilon on
the Kemess South operation. Northgate states that there are no royalties or
other financial encumbrance against the Kemess North project.
The current Kemess Operations operate under the following permits;
Kemess North permit requirements will be very similar:
M96-03 Project Approval Certificate (Issued April 29, 1996)
M206 Approving Work System & Reclamation Program
PE 15335 (Main Effluent Permit) - Tailings Storage Facility &
Associated Works, RBC, Mill & Accommodation Site Runoff & Open
Pit Water issued December 8, 1998.
PR14928 Refuse to the Ground/Active Waste Rock Dump issued
July 29, 1997
AR15157 Refuse and Air Contaminants from the Construction Camp
issued September 9, 1997
BCG07761 Special Waste Consignor Identification Number issued
February 18, 1998
Explosives Storage and Use Permits
No. 682 - The main Magazine storage of explosives and
detonators issued January 21, 1998
No. 1168 - Magazine storage for avalanche explosives and
detonators issued February 14, 1997
7 of 138
OTH00123 Gas Permit issued October 27, 1998, expiry date

October 31, 1999
Annual Boiler Operator Certificates
09-12586-99 Radioisotope License
080221125 Radio License issued March 25, 1997
10943 MoTH Road Use Permit (367.3 km to 435.22 km)
Road Use Permits (RUP) MOF - Issued December 10, 1996
01-7829.01-99 (Finlay Rd)
01-7829.08-99 (Finlay Osilinka Rd)
01-9147.01-99 (Thutade Forest Service Rd)
01-SS22414-97 (24 Small rd sections, i.e. Nation Dump Rd,
Modeste Mainline, Blackpine FSR, Manson Dump Rd)
Special Use Permits (SUP) MOF - Issued February 21, 1997
S17447 (Mine site Access Roads)
S22850 (Cheni Mine Road transfer) includes old S13088
S22376 (Power Line sections 1-5)
License to Cut
L43054 (mine site)
110851 Conditional Water License (East Kemess Creek, Serrated
Creek. & South Kemess Creek.)
110454 Conditional Water License Kemess Lake
8 of 138
MX-13-69 Mineral & Coal Exploration Activities & Reclamation Permit

Waste Rock Dump Permit
PE 15257 Air Emissions pending
Land Farming pending
Environmental obligations for the current operation include:
Presently, Kemess South has a Reclamation & Closure plan
document with the BC Ministry of Energy and Mines. The Reclamation &
Closure plan is updated every 5 years. During the operational phase, the
primary focus of the Reclamation & Closure plan is reclamation. Upon mine
closure, the Reclamation & Closure plan will focus on permanent closure.
Upon closure Northgate will submit another updated Reclamation & Closure
plan that will lay out the closure plan and time lines for implementation.
There are no provincial fixed time lines for completion of the closure
plan - however it must be reasonable. Therefore, to propose the plan to be
completed over a 10 year period would likely be viewed as unreasonable.
However, to suggest the closure plan will start within 12 to 24 months and
be completed within 5 years should be acceptable. The BC Ministry of
Energy and Mines are willing to consider a variety of factors that may delay
closure - i.e. economics of "related" mine development (Kemess North),
continued use of various components of the operation, staging various revegetation efforts, to ensure the long-term is successful.
9 of 138
Figure 3:
Detailed Kemess Area with Infrastructure Kemess South

& Kemess North
10 of 138
4.
Accessibility, Climate, Local Resources, Infrastructure &

Physiography
The Kemess Property is located in the mountainous area east of the

Spatsizi Plateau and west of the Swannell Ranges near Thutade Lake
approximately 250 km north of Smithers and 430 km northwest of Prince
George at 5702 north longitude and 12647 west latitude. The property
spans the boundary between the 94E and 94D NTS sheets and is within the
Omenica Mining Division.
Broad, open, drift and moraine covered valleys characterize the area,
which also has sub -alpine plateaus and rugged incised peaks and cirques.
Elevations range from 1 ,200 m to 2,000 m, with the tree line occurring at
approximately 1,500 m. All the work completed during the 2002 and 2003
drill programs occurred above tree line in three cirques, which open to the
north forming a common southern headwall. Lower elevations on the
property are moderately vegetated with spruce-willow-birch forest, while
poorly drained areas form peat bogs populated by alder brush, willow, and
stunted spruce trees.
The climate is generally moderate, although snow can occur during
any month. Temperatures range from -35 to 30 and average annual
precipitation amounts to 890 mm. In 2002 snow did not leave the higher
elevations until late June.
Since mining will be scheduled for year round operations, 24 hours
per day equipment and procedures will need to be adaptable for the
variations of 4 seasons in a mountain environment. This will include dry
conditions in summer and wet in spring break-up and autumn, and snow and
drifting snow in winter. The current Kemess South operations will be suited
for Kemess north with some provision for more extreme weather conditions
at the higher elevations and provision for avalanche monitoring and control.
It can be expected that there will be more lost operating days at Kemess
North than Kemess South principally due to poor visibility.
Access to the Kemess North project is provided by both air and road
via the current Kemess Operations. There are scheduled year-round flights
from Smithers, Prince George, Vancouver, Kelowna, Kamloops and
Williams Lakes to Kemess from Monday to Thursday. All season road
access is from either the town of Mackenzie or Fort St. James via the
Omenica resource access road.
A privately owned, 380 km power line originating in Mackenzie in the
south provides power to the mine area via the BC Hydro grid.
Personnel are from various locations in British Columbia and Alberta.
Operations and maintenance personnel work a 14-day on 14-day off
11 of 138
schedule while some technical and management personnel work a 4-day in

and 3-day off rotation.
Kemess Mines Ltd. holds surface rights through their mineral claims
and mining leases. Onsite infrastructure for the current operation consists of
an office and maintenance building, a 400-person camp, a mill building,
maintenance and office complex, crushers and raw ore stockpile areas,
access and service roads, airstrip, explosives depot, and tailings facilities.
The tailings pond capacity is sufficient to meet the needs of the Kemess
South ore body until its completion in 2008.
The Kemess North mining plan is based on utilizing the current
facilities for ore processing, accommodation, and support, however an ore
transportation and local infrastructure to service the new Mining operation at
Kemess North will be needed as well as a new tailings pond. These include
access roads, potential waste dump sites, a pit side crusher and conve yor
system to the current plant site, a field supervision and equipment service
centre adjacent to the pit and a new tailings pond located a t Duncan Lake.
Preproduction stripping and construction of the Kemess North field
service facilities will commence 1 to 2 years in advance of the startup of ore
production from Kemess North. Production will begin when the ore
transportation system from Kemess North is in place and the first pit side
crusher is in operation. There will be a transition period required where both
Kemess South and Kemess North mining operations are feeding the mill as
mining equipment is shifted over from Kemess South to Kemess North. This
transition will commence when the crusher is in place at Kemess North and
will continue until reserves are exhausted at Kemess South. When mining is
completed at Kemess South all crushing capacity will be transferred to the
Kemess North crusher station.
Tailings and waste dump facilities are being designed at Duncan
Lake with sufficient capacity for the Kemess North waste. This includes all
mill tailings and mine waste rock. Much of the mine waste rock is PAG
material and is planned to be deposited sub-aqueously in the tailings pond.
Any NAG material within the pit will be used for construction fill or deposited
in waste dumps adjacent to the pit area but in the area specified within the
water management plan.
12 of 138
5.
History
The history of the Kemess operations record earlier discoveries in the

Kemess North area however the first exploitable open pit deposit was
outlined for the current Kemess South ore body. The following brief history
for the Kemess South area is from MRDIs December 2001 Technical
Report (p 6-1).
(a)
Kemess South
Pacific Ridge Resources Ltd. (Pacific Ridge) staked the area of the
Kemess South deposit in 1983. Exploration programs were subsequently
carried out by Pacific Ridge Resources Ltd. and Anaconda Canada Ltd.
(Anaconda) in 1984; St. Philips Resources Inc. (St. Philips) in 1988 and the
Kemess South Joint Venture between El Condor Resources Ltd. (El Condor)
(60%), operator, and St. Philips Resources Ltd. (40%) from 1990 to 1993. In
1991, Rio Algom Explorations Inc. (Rio Algom) acquired claims adjoining the
west and south sides of the Kemess South Joint Venture claim holdings.
The initial work on the property by Pacific Ridge and Anaconda
consisted of a limited diamond -drilling program to test a gold-coppermolybdenum soil geochemical a nomaly. This drilling identified porphyrystyle gold-copper-molybdenum mineralization, but grades were considered
too low and the property was dropped. St. Philips carried out IP surveys,
geochemical surveys and reverse circulation drilling, which marginally
expanded the mineralized area: The Kemess South Joint Venture completed
a major delineation diamond drilling program and various ancillary works,
including IP and geochemical surveys. In 1992, Rio Algom drilled five holes
totalling 1,745 m to further delineate the deeply buried western extension of
the Kemess South deposit. In late 1993 the Kemess South Joint Venture
acquired the claims held by Rio Algom. By the end of 1993 a total of 26,314
m of diamond drilling in 156 holes had outlined a substantial gold-copper
deposit that was amenable to open pit development.
In 1994 the Kemess South Joint Venture conducted a 9-hole, 1,867
m in-filling drilling program. In 1996, Royal Oak Mines Inc. (Royal Oak)
acquired the Kemess South property and drilled 22 due diligence holes
totalling 3,316 m.
In 1998 Royal Oak commenced Operations from the Kemess South
ore body. These operations went into receivership in 1999. In 2000
Northgate Exploration bought the property out of receivership. Production
from the property since the original start-up is given in Table 5.1. This also
indicates the original reserves and the current stated reserve as of year end
2003.
13 of 138
Table 5.1
Production History from Kemess South
Operator
Royal Oak
Royal Oak
Northgate
Northgate
Northgate
Northgate
Remaining
Year
1998
1999
2000
2001
2002
2003
Waste
Tonnes
1,950,000
6,447,355
20,530,155
17,592,635
25,533,575
35,239,000
77,040,976
Ore
Tonnes
7,482,909
14,113,460
14,089,000
15,366,500
17,308,300
18,633,000
91,715,448
Grades
Cu %
Au g/t
0.220
0.212
0.222
0.251
0.236
0.225
0.227
0.6*
0.644
0.779
0.855
0.724
0.702
0.699
Metal
Cu
Au
lbs x 1000
oz
9,687
21,389
50,389
66,300
72,863
76,177
459,000
69,804
213,791
225,994
277,100
282,256
294,117
2,061,000
*Estimate as figures from this period are not considered reliable
(b)
Kemess North Project
The Kemess North project will be an expansion into a new production

area for the Kemess operations. The following exploration history specific to
the Kemess North project area has been adopted from Edmunds and
LaPeare (2002).
The earliest reports of exploration activity in the area date back to the
discovery of placer gold at the mouth of McConnell Creek in 1889. Several
years later there was a brief staking rush in 1907 and prospecting remained
active in the area through the early 1920s resulting in a placer discovery at
McClair Creek. Cominco Ltd. was active in the area in the 1930s exploring
for base metals. During this period Emile Bronlund discovered and staked
several skarn showings; the Cairn showing is a nearby occurrence from this
era that is located on Duncan Ridge, 6 km west of Kemess North.
In 1966 Kennecott focused on the area searching for Cu-porphyry
systems using stream geochemical techniques and prospecting; this work
resulted in claim staking and field work on several prospects including
Kemess North, Pine, Fin, Chapelle (also known as Baker), Shasta and
Lawyers. The latter three deposits are gold-silver epithermal vein systems
that eventually produced during the early 1980s. Kennecotts work opened
the area up with respect to potential for Cu-Au porphyry systems, and the
ensuing work at Kemess North is summarized below in Table 5.2.
14 of 138
Table 5.2
Summary of Exploration Work
Period
1966 1971
Company
Kennco
Explorations
Ltd.
1975 1976
Getty Mines
Ltd.
and Shell Oil
1986 1992
El Condor
Resources Ltd.
2000
Northgate
Exploration
Ltd.
2001
Northgate
Exploration
Ltd.
Northgate
Exploration
Ltd.
Northgate
Exploration
Ltd.
2002
2003
Work Completed
Regional stream and soil geochemistry, staked
100 2-post mineral claims, mapping @1:9600
scale and completed 232 m of x-ray core
drilling in 8 holes.
Optioned property from Kennco and completed
1:4800 scale mapping, orthomapping, restaking, geochemical surveying and 2,065 m
of diamond drilling in 13 holes (75-18 to 7530). Option dropped in 1977.
In 1986 El Condor optioned the property from
Kennco and commenced sustained exploration
that resulted in the discovery at Kemess
South. Over a 6 year period at Kemess North,
El Condor collected 1 ,025 rock samples and
5,402 soil samples, completed 76.85 km of IP,
and drilled 14,327.92 m of core in 69 holes.
Additional work included 167 km of line cutting,
54.5 km of roads, and 475 m of cat trenching.
A resource of 157 Mt @ 0.37g/t Au and 0.18%
Cu resulted at Kemess North.
Completed 4,104.48 m of diamond drilling in
12 holes identified a new higher-grade
porphyry zone located east of El Condors
discovery. This work increased the resource at
Kemess North to 360 Mt @ 0.299 g/t Au and
0.154% Cu.
16 holes which increased resources to 442 Mt
@ 0.40 g/t Au and 0.23% Cu.
58 holes (41 holes on Kemess North, 5 on
Kemess East, and 12 at Nugget).
Completed 10 003 m of diamond drilling in 43
holes (19 holes on Kemess North, 9 at
Kemess Centre, 12 at Nugget, and 3 on
Duncan Ridge).
15 of 138
6.
Geological Setting
This section has been adopted from Edmunds and LaPeare (2002).
(a)
Regional Geology
Kemess occurs at the southern end of the Toodoggone mining camp,

which describes a collection of occurrences and deposits found in Mesozoic
volcanic rocks of the eastern Stikine Arch. Large-scale structures are
present in the area, with a major terrain boundary present just 25 km east of
the project area. The area is known for its Cu-Au porphyry deposits and low
sulphidation epithermal Au-Ag vein deposits. Potential also exists for
mesothermal vein deposits, skarn deposits, volcanic associated massive
sulphide deposits and red-bed Cu deposits.
Mesozoic arc-related volcanic rocks that comprise the eastern margin
of the Intermontane Belt underlie the district over an area measuring 100 km
by 40 km. The oldest rocks in the belt are Permian Asitka Group, which are
disconformably overlain by upper Triassic Takla Group, which are in turn
unconformably overlain by lower-middle Jurassic Hazelton Group;
overlapping all these assemblages to the west are upper Cretaceous Sustut
Group sediments. The lithologic units comprising the stratigraphic
succession are described in Table 6.1.
Intrusive rocks are prevalent in the area and have been categorized
as late Triassic Alaskan-type ultramafics such as pyroxene diorite,
hornblende gabbro and pyroxenite. Economically more significant are the
early Jurassic intrusives of the Black Lake suite, which are granodiorite,
hornblende diorite, pyroxene quartz-diorite, quartz-monzonite and quartz
monzodiorite. Important plutonic masses are the Duncan Lake stock (197.3
Ma), the Sovereign stock (202.7 Ma) and the Maple Leaf pluton (199.6 Ma).
The latter hosts the Cu-Au deposit at Kemess South.
For the most part the volcanic Mesozoic assemblages are upright, shallowly
dipping to flat-lying sequences crosscut by high angle north to northwest
trending faults. Significant structures are the Finlay-Ingenika and Moosevale
fault systems, which bound the eastern margin of the belt. These structures
are dextral strike-slip features that are related to the terrain bounding faults
between the Intermontane and Omenica belts.
16 of 138
Table 6.1:
Regional Stratigraphy (Cope, 1992)
Age
Lithostratigraphic
Unit
Description
Cretaceous
Sustut Group
Sustut rocks grade from Brothers

Peak Formation conglomerate,
sandstone, mudstone with minor
tuffaceous units down to the basal
Tango Creek Formation polymictic
conglomerate, sandstone, mudstone
with minor lignite seams.
LM - Jurassic
Hazelton Group
Uppermost unit, Smithers Formation

is dominated by greywacke, lithic
sandstone, siltstone, tuffaceous
shale, volcanic breccia,
conglomerate and limestone. Below
lies the Nilkitkwa Formation, which is
mainly shale, greywacke, andesiticrhyolitic tuff with minor limestone. In
the Kemess area the quartz phyric
volcaniclastic rocks of the
Toodoggone Formation are believed
to be correlative to the Nilkitkwa. The
basal assemblage, Telkwa
Formation comprises basaltic to
rhyolitic pyroclastic and flowrocks.
U. Triassic
Takla Group
Highest units are Moosevale

Formation augite porphyry, breccia,
sandstone and mudstone. Central
assemblage is Savage Mounting
Formation comprised of flows and
pyroclastic augite porphyritic
volcanic rocks. Base of the exposed
sequence is Dewar Formation
argillite, limestone and siltstone.
Mid
Pennsylvanian
Permian
Asitka Group
Uppermost units are dominated by

limestone and tuff, which give way to
a middle assemblage of basaltic
flows and rhyolite. The lowermost
units are basalt, argillite and
limestone.
17 of 138
(b)
Local Geology
More local to Kemess North are the Duncan and Saunders Faults, which are
north-northwest normal block fault structures. Thrust faulting is present in
the district and is interpreted as Eocene or younger; displacement believed
to be towards the northeast and effects rocks from the Takla up to Sustut
sediments.
The district represents the results of three superimposed volcanic arc
building stages that began in the upper Paleozoic. Marine volcanic and
sedimentary successions dominated until the lower-middle Jurassic, when
continental, quartz-normative volcanism began with the deposition of the
Hazelton Group-Toodoggone Formation sequences. The pluto nic rocks of
the Black Lake suite are coeval with the Toodoggone sequence and are
likely co-magmatic. Block faulting has juxtaposed panels of varying depth
into the magmatic and volcanic systems. The structures and intrusives likely
had a strong influence on the eventual positioning of volcanic centres.
The Kemess North property is underlain by upper Triassic (Takla
Group) andesite/basaltic volcanics and to a lesser extent lower Jurassic
(Toodoggone Formation) dacitic fragmental volcanics. Stocks, dykes and
possible sills of quartz monzonite/quartz diorite composition have intruded
the Takla succession and are also lower Jurassic in age. Structurally the
deposit area is transected by steeply dipping north to northwest trending
normal faults. A laterally extensive, shallow dipping to flat lying, highly
fractured broken zone occurs at or close to surface.
(c)
Property Geology
(i)
Andesite Volcanics (Takla Group-T3)
The property is predominantly underlain by a thick (>1,000 m)

succession of andesitic flows. The flows exhibit textures ranging from fine
grained and massive to porphyritic with medium grained and mostly phyric,
subhedral augite phenocrysts. Less common are phenocrysts of
plagioclase. The fine-grained matrix is mostly comprised of plagioclase,
quartz, and chlorite. The plagioclase is usually sericitized. Rare intersections
of auto-brecciated flows occur as coarse sub-rounded andesitic clasts within
both phyric and finer grained flows. The Takla volcanic rocks host a
significant portion of the Au-Cu mineralization.
On surface, exposed in the cirque headwalls and some upper
intersections of drill intercepts is a bladed feldspar porphyritic unit. It exhibits
a very well developed porphyritic texture with bladed felted laths of
plagioclase up to 1.5 cm long within a finer grained dark gray matrix. Its
texture suggests a hypabyssal origin or possibly an extrusive dome type
emplacement.
18 of 138
Due to the lack of bedding and/or marker horizons, the inclination of

the massive thick succession of Takla volcanics is difficult to ascertain but
probably reflects the regional trend of flat lying Mesozoic assemblages.
(ii)
Dacitic Polylithic Fragmental (Hazelton Group H3:Toodoggone Formation)
Mantling the northern and eastern limits of the Kemess North area is
a matrix supported polylithic fragmental volcanic unit. Sub -rounded angular
coarse fragments of bladed feldspar porphyry, andesite, monzonite and rare
quartz-feldspar porphyry or chert occur within a siliceous (dacite) matrix.
Lithic proportion to matrix is inconsistent ranging from 1-30% volumetrically,
with clast size varying from lapilli to blocks. The matrix is fine-grained, dark
gray comprised of 10-30% medium grained feldspar and diagnostic (5%)
quartz phenocrysts. Magnetite is common as an accessory mineral
occurring as very fine-grained disseminations as is distinctive zeolite-calcite
veinlets. Propyllitic (epidote-calcite-pyrite) alteration is dominant within the
fragmental, however narrow (10-20 m) zones of phyllic (quartz-sericitepyrite) alteration are present near discordant contacts with the Takla Group.
The phyllic sections can carry anomalous gold concentrations.
The Polylithic Fragmental Dacite is an enigmatic unit as it shows field
relations suggestive of both an extrusive and intrusive emplacement
mechanism. Diamond drill sections in East Cirque show a WNW striking
steeply south dipping irregular contact between mineralized Takla andesite
and the dacitic fragmental, and in one instance quartz-phyric polylithic
fragmental occurs within monzonite (KN-02-05 @ 524.68 m). In Central
Cirque an unaltered flat lying dacitic fragmental unit overlies quartz-sericite
altered mineralized Takla Group (KN-02-55). At the Nugget Zone a thin (5
m) zone of the dacitic fragmental crosscuts Takla Group andesite (KN-02-50
@ 404.4 m). Commonly present within the dacitic fragmental are inclusionrich irregular granitoid masses typically logged as crowded feldspar
porphyry or monzonite. These masses are interpreted to be younger subvolcanic intrusives related genetically to the Toodoggone Formation.
The evidence suggests that basement structures and conduits that
allowed extrusion of the local Toodoggone volcanic assemblage underlie the
Kemess North area.
(iii)
Quartz Monzonite/Quartz Diorite
These intermediate intrusive units are comprised of subhedral

phenocrysts of 50% plagioclase and <10% quartz set in a groundmass of
quartz-feldspar-chlorite +/- biotite with accessory minerals including;
magnetite, apatite, carbonate, rutile, ilmenite, sphene. The quartz monzonite
does not reach surface and outcrop. To remain consistent with earlier work
the field-term monzodiorite and quartz monzonite has been retained,
19 of 138
however petrographic work shows that the mineralized granitoid underlying

East Cirque is more correctly classified as a quartz diorite due to the paucity
(< 5% to absent) of alkali feldspars.
The main quartz monzonite mass beneath East Cirque hosts the bulk
of the Cu-Au mineralization at Kemess North.
(iv)
Post-Mineral Dykes
Post-ore dykes, including feldspar porphyry and minor mafic varieties,

cross cut Takla volcanics and outcrop locally in cirque highwalls and along
ridges. The feldspar porphyry dykes also cross cut the Jurassic-Toodoggone
fragmental unit. The feldspar dykes commonly exhibit pervasive dark pink
hematite within the matrix and as staining of the medium grained feldspar
phenocrysts. Due to the pink colour of the feldspars, these dykes take the
field term syenite and are generally barren and unaltered. The relationship
of the feldspar dykes with the larger quartz diorite stocks is not clear,
however they appear temporally late in the sequence of events. Mafic dykes
are generally thin (<1 m to 4 m), dark green and barren of sulphides and
veining. Observations from regional mapping suggest they are related to the
volcanic strata interbedded within Sustut Group sedimentary rocks and are
interpreted as Cretaceous.
At least three steeply dipping, northwest trending normal faults have
been inferred from surface mapping and drilling to transect the Kemess
North property. Fault spacing ranges from 500 m to 1 ,500 m and they are
generally parallel to the Duncan and Saunders Faults located west and east
respectively.
(v)
Broken Zone
A flat-lying zone of intensely broken rock and multiple gouge zones

(which results in poor drilling conditions) occurs above the deposit, and is
referred to as the Broken Zone. The Broken Zone averages about 80 m
from surface to competent bedrock and is comprised of clay, multiple gouge
zones and a pyritic-argillic alteration component. The interface between the
Broken Zone a nd the underlying competent volcanics is generally sharp
where phyllic meets chlorite-biotite alteration assemblages. The postmineral porphyritic feldspar dykes remain unaltered and competent within
the Broken Zone phyllic alteration.
There are several hypotheses for the formation of the Broken Zone.
The theories range from the effects of present day weathering, porphyry
related alteration zonation, to the tectonic end products of shallow faulting
and thrusting. Key features to consider are that the broken zone underlies
and is adjacent to highly competent, unaltered, siliceous Toodoggone
fragmental rocks. This suggests that the alteration occurred in the early
20 of 138
Jurassic before the emplacement of the dacitic fragmental unit. The most
plausible explanation is that the Broken Zone and related phyllic alteration
are due to pre-Toodoggone weathering processes.
21 of 138
Figure 4:
Regional Geology after Massey et al 2003
Minfile Occurrences Plotted by Colour Showing Principal
Commodities as Follows:
Gold Red,
Silver Blue,
Copper Green
22 of 138
Figure 5:
Shows the General Property Geology
in the Area around Kemess North (Diakow 2001)
23 of 138
Figure 6:
Kemess North Geology - Diakow (2001)
24 of 138
7.
Deposit Type
Kemess North is a large copper-gold porphyry deposit and is typical

of porphyry gold-copper deposits in the western cordillera. The deposit has
a low-grade ore zone at a depth of 150 m below the ground surface on the
western side of the deposit and a higher grade zone 300 to 550 m below
surface on the eastern side. The deposit is hosted by potassic-altered Takla
Group volcanic rocks and is cente red on porphyritic monzodiorite dykes.
Higher-grade copper-gold mineralization is characterized by secondary
biotite in volcanic host rocks.
Porphyry style Au/Cu mineralization occurs within the Takla volcanic
rocks and intermediate intrusive rocks associated with weak to pervasive
propyllitic, potassic (biotitic), and phyllic alteration assemblages. Alteration
of Toodoggone assemblages ranges from fresh to weak propyllitic and is
generally barren of significant sulphides and ore grade mineralization.
A 3-D Block Model has been used to represent the Kemess North
mineral Resources. Mintecs MineSight software, an industry proven
software system, has been used for the modelling . The geology model area
used is large enough to include drill holes from the Nugget area to the west
and the Kemess East area. It also extends sufficiently outside the drilled off
area to include waste material which will fall within the ultimate pit design.
To restrict the resource estimate to defined geology units, four major
lithology zones were modeled as defined by the drillholes. Although multiple
rock types were recorded in the drill logs these are grouped together into the
four main lithologies. Three of the lithologies represent potential ore
material, while the fourth lithology represents rock types known as barren or
low grade mineralization. Any undefined areas within the model boundaries
are therefore designated as waste since these are areas that do not have
sufficient drill hole assay spacing to delineate a continuous Lithology zone.
Details of the 3-D Block model and Resource/Reserve estimation are
included in Section 16.
8.
Mineralization
This section has been adopted from Edmunds and LaPeare (2002).
Gold-copper mineralization forms an inclined tabular zone that is

centred on the East Cirque porphyritic monzodiorite, which from structural
contours, strikes east-west and dips 20 to the south. The quartz
diorite/quartz monzonite intrusive exhibits an irregular upper contact with
various peaks and troughs. The general east west strike and shallow south
dip geometry is consistent for over 400 metres (10660E to 10180E).
Between 10260E and 10160E the tabular morphology disappears and the
monzonite occurs as wide dykes (10 m to 100 m) within Takla volcanics.
The change in geometry for the monzonite could be due to the effects of
25 of 138
cross-faulting that have down-dropped the tabular upper contact present in

East Cirque, or the rheologic conditions during intrusion changed going
towards the west whereby steep fracture infilling was preferred over
stopeing.
Alteration and mineralization is associated with, and zoned both
vertically and laterally from the quartz diorite/quartz monzonite intrusive
intersected at depth beneath the East Cirque.
The highest-grade Au-Cu zones occur at or near the quartz
monzonite Takla volcanic contact associated with quartz-magnetite
veining and overprinting pyrite-chalcopyrite veining. The zone comprises 5060% fine -grained quartz, 20-30% magnetite, 5-10% pyrite, 1% chalcopyrite,
with accessory hematite and anhydrite occurring over widths from less than
10 m to greater than 150 m. Quartz habit varies from high-density parallel
quartz veining to pervasive silicification with magnetite. This zone occurs
mostly within the quartz monzonite stock and to a lesser extent within the
andesite adjacent to the intrusive stock. The protolith is commonly
completely replaced. The quartz monzonite/quartz diorite stock and
associated quartz-magnetite zone is interpreted as the heat source driving
the porphyry copper-gold system at Kemess North.
Grading outwards from the East Cirque stock into the Takla
volcanics, silicification decreases gradually to fine-grained assemblages of
chlorite-biotite-sericite, which volumetrically constitutes the bulk of the
mineralization. This pattern is a broad generalization and there are areas of
either potassic (biotitic) or propyllitic (chloritic) alteration that also have an
irregular and patchy outline in plan and cross section.
Sericitization, commonly from the destruction of matrix and
phenocryst plagioclase, is pervasive in the Takla volcanic rocks.
Accompanying sericitization are assemblages of quartz-anhydrite-ankeritemagnetite veinlets with disseminated pyrite -chalcopyrite mineralization.
Present over the entire area in all rock units except the late mafic dykes are
barren pinkish zeolite -carbonate veins, which post-date and crosscut the
above vein types and rock units.
The uppermost alteration zone is the phyllic or QSP zone, which
consists mostly of sericite-chlorite-quartz +/- pyrite and forms the extensive
Broken Zone and bright orange-red outcrops at surface. Pyrite is common
throughout (5-7%), both disseminated and within vuggy quartz veining. This
alteration zone is mostly barren of any significant Cu and will often show a
slight increase in Au with depth. It has been postulated that this zone shows
similarities to an acid leached cap, however it lacks any form of supergene
enrichment in base metals, as occurs at Kemess South.
26 of 138
Overall, sulphide mineralization throughout the deposit consists of 23% pyrite, with lesser amounts of chalcopyrite and traces of molybdenum.
Pyrite occurs as disseminations, fracture fillings, and veins up to a few
centimetres wide generally associated with quartz-anhydrite-magnetite veins
and zones of quartz-magnetite replacement. The mode of occurrence of
chalcopyrite is similar except that veinlets are rare and significant
disseminations occur in zones of stronger quartz-magnetite stock work and
quartz-magnetite replacements. Gold and copper grades variably diminish
outward into the hanging wall and footwall. Total sulphide content in the core
of the deposit averages 3-5%, rising to 5-7% in the pyrite -rich sericitic
altered upper halo.
Petrography shows a varying degree of accessory minerals
throughout all rock types and alteration zones including; rutile, leucoxene,
sphene, anhydrite, gypsum, epidote, zeolite, alunite, molybdenite,
phlogopite, prehnite, apatite.
Moving west of East Cirque to the Nugget Zone, alteration and
mineralization becomes irregular as the intrusive units approximate steeply
dipping dykes. This zone occurs within a broad sericitic alteration zone with
irregular zones o f chlorite-biotite alteration. Significant widths of gold-copper
mineralization occur within Takla volcanics adjacent and proximal to these
monzonite apophyses substantially adding to the mineralized volume.
The Nugget Zone alteration is dominated by weak chlorite -biotite
altered Takla volcanics commonly with disseminated magnetite. Substantial
gold-copper mineralization is present within the Takla volcanics but at
depths exceeding 400 m. In this area it appears that a similar style of
mineralization is present, as compared to East Cirque, however the sulphide
system does not overlap the quartz-magnetite portion, rather occurring well
above it (KN-02-43). The Nugget Zone generally exhibits a higher gold to
copper ratio than Kemess North, and rare narrow intersections of gold
grades of up to 8 g/t are present.
9.
Exploration
The Kemess North property represents a highly advanced project.

The early exploration work in the area identified a porphyry target but it
wasnt until deep drilling in 2001 that significant gold and copper grades
were located. Since 2001 exploration has been directed at expanding the
resource base in the proposed pit area by drilling 16 holes in 2001, 41 holes
in 2002, and 19 holes in 2003.
Because the target is deep, geological mapping and geochemical
techniques add little value, likewise, surface and airborne geophysical
exploration have contributed little. Since the last work by El Condor in 1992,
there has been no surface soil or rock sampling on the property, nor has
27 of 138
there been any trenching. Surface work has been confined to access road
and drill site construction. A recently completed regional airborne
geophysical program will be of great interest as it may add to the
understanding of the volcanic and intrusive events in the area. It is
suspected that the program will have little impact for the reserve estimate on
the Kemess North project.
The procedures followed in the field and through the interpretation
stage of exploration have been professional. Various crews under the
supervision of professional geologists carried out the exploration work (see
Table 9 .1). From 2001 to the present day, there has been continuity in
personnel both in the field and with the data interpretation. It is considered
that the reliability of the data obtained with exploration is very high.
Table 9.1
Exploration Employees/Contractors
Job Function
Supervisor
Contractors
2001
Hibbitts (NGX)
A. Bray
2002
Hibbitts (NGX)
B. La Peare
B. Mercer
E. Ramsay
J. Mazvihwa
C. Edmunds
2003
C. Edmunds
M. Russer
B. Kay
R. Konst
A. Tsaloumas
L. Lindinger
A. Geology
B. Laboratory
2001
Bondar-Clegg
2002
ALS Chemex
2003
ALS Chemex
C. Drilling
2001
Britton Bothers
2002
Britton Bothers
2003
Britton Bothers
28 of 138
10.
Drilling
Since May 2002, two summer drill programs have been completed on
the Kemess North property. Britton Bothers Diamond Drilling of Smithers,
BC completed this work. In total, 198 holes have been completed for a
cumulative of 77,210 m of drilling. Up to four drill rigs were used on the
property, three on skids and one helicopter portable.
(a)
Procedures
The procedures used to locate exploration drill holes is as follows: the

proposed drill site is located in the field by a geologist using a hand -held
GPS unit; the site is built using a bulldozer and the drill rig pulled onto the
site. The orientation of the drill hole is set by the geologist with a set of
pickets to provide the azimuth and specify the inclination of the hole.
Because of the depth of the mineralization, most of the drill holes have been
drilled at steep angles, approaching vertical. Exceptions to this rule are
holes drilled for geotechnical studies. There are 53 holes drilled at dips
between 45 and 75 degrees, with various azimuth orientations. The
remaining 145 holes have been drilled at steep angles, greater than 75.
All of the drilling on the property has been continuous core diamond
drilling. Because of the broken zone at surface, drilling procedures include
setting surface casing then drilling with large diameter HQ core. Once
through the broken zone, and into more solid rock, the drillers generally
reduced to NQ core to complete the hole. Upon completion of the hole, all of
the drill pipe is removed from the hole, though the surface casing is left to
mark the hole location.
(b)
Sample Length/True Thickness
Sample length was determined by the geology of the deposit, an

attempt was made not to allow samples to cross lithological boundaries.
With NQ size drill core, sample lengths were generally 2 m, while with HQ
core; sample lengths were reduced to 1.5 m. The majority of the assay
intervals, approximately 60%, are 2m in length, with the remainder mostly
less than 2 m. The average assay interval is 1.8 m.
The term true thickness is not generally applicable to porphyry
deposits as the entire rock mass is potentially ore grade material and there
is no readily apparent preferred orientation to the mineralization. Because of
the potential of ore grade material through the entire length of the hole,
sampling was generally continuous from the top to the bottom. The
mineralization is generally confined to three main lithologies, hypogene
monzonite, Takla BFP (bladed feldspar porphyry) and Takla volcanics.
These lithologies form large massive bodies underlying the central and
eastern cirques. The mineralization is generally flat lying within the various
29 of 138
lithologies. The mineralized Takla volcanic and intrusive rocks show

generally vertical contacts. The higher-grade monzodiorite intrusive in the
East Cirque appears to be an inclined tabular body, dipping 20 to the south.
(c)
Condemnation Drilling
A series of condemnation holes were drilled to confirm that there was

little or no potential ore material underlying proposed facilities and access
routes.
Figure 7:
Location map for 2003 Condemnation holes.
Note area between Kemess Lake (Lower camp) and CD-14B was not
drilled as previous work yielded negative results
CD-01
CD-02
CD-03
CD-07
Proposed
Plant Site
CD-04
CD-05
CD-18
KN-03-09
CD-06
CD-08
Kemess North
Pit Centre
CD-09
CD-10
CD-19
CD-11
CD-12
CD-13B
CD-14B
1,000
2,000
meters
30 of 138
(d)
Collar Survey
Survey control for the drill hole collars was by GPS using a base
station that provided real-time correction such that sub -centimeter accuracy
was achieved.
(e)
Down-Hole Survey
During the 2002 drill program, several Sperry-Sun magnetic survey

instruments were used to complete down-hole surveying. Because of the
inherent magnetite content of the rock and mechanical problems with some
of the units, some of the surveys are suspect.
In 2003, the Flex-IT down-hole survey tool was used. The Flex-IT tool
records the ambient magnetic field while it determines the orientation of the
drill hole at a certain depth. Errant readings on the Fle x-IT are either
removed from the file when over or under-limit magnetics are encountered,
or their effects are minimized by adjacent readings that are true magnetic
north.
The 2003 down-hole survey data was compiled for the Kemess North
area and plotted by hole deviation (azimuth only) versus hole depth. A
regression between the two variables, azimuth and depth, was determined.
For each of the 2003 holes in the potential pit area the regression equations
were derived and tabulated to determine an average slope constant and Yintercept. Using this average figure, the down-hole survey files for the 20002002 drilling were revisited. Holes that exhibited counter-clockwise deviation
or sharp bends were re-calculated. In total 18 suspect drill holes were
considered inconsistent with the hole trends derived from the Flex-IT data.
Plots of these holes and drilling experience also confirm that the down hole
surveys of these 18 holes are suspect.
The influence of this re-calculation shows that some of the earlier
holes plotted as much as 70 m from their re-calculated position at the
bottom of the hole , and two of the holes are not within the ultimate pit limit.
Because of the uncertainty of these down-hole surveys, several tests were
completed at the computer modelli ng stage. The first test was to build the
model with the drill hole traces of the suspected holes corrected using the
trend based on the regression equation and determine a resource estimate.
The second test was to remove the corrected holes from the database and
re-build the model. A comparison of the two model builds showed that
excluding these 18 holes has little effect on the resource quantities in the
model (see Geostatistical Analysis and Interpolation Methodology Kemess
North. Author: Abdullah Arik, March 2004), It does however, have a
significant effect on the ultimate pit limits at the base economic parameters
used in the study (see Section 17). Removing these holes from the data
base does not check the sensitivity of the project to the location of the holes.
31 of 138
Because the assays for these holes are valid they have been included as
corrected, with a recommendation to re-run the down hole survey with the
Flex-IT tool, if possible , or twin a few of the more important holes. This hole
twinning can have other benefits with respect to the Geo-Statistical analysis.
Figure 8:
Drill Hole Locations
32 of 138
Table 10.1: Drill Collar Location and Orientation Data

Hole #
KN-00-01
KN-00-02
KN-00-03
KN-00-04
KN-00-05
KN-00-06
KN-00-07
KN-00-09
KN-01-01
KN-01-02
KN-01-06
KN-01-07
KN-01-08
KN-01-09
KN-01-10
KN-01-11
KN-01-13
KN-01-14
KN-01-15
KN-01-16
KN-01-17
KN-02-02
KN-02-06
KN-02-07
KN-02-10
KN-02-11
KN-02-12
KN-02-14
KN-02-15
KN-02-17
KN-02-18
KN-02-20
KN-02-21
KN-02-22
KN-02-23
KN-02-24
KN-02-26
KN-02-28
KN-02-29
KN-02-30
KN-02-31
KN-02-32
KN-02-33
KN-02-34
KN-02-35
KN-02-36
KN-02-37
KN-02-38
KN-02-39
Survey Coordinates
Easting
Northing
Elevation
9,662.980 15,573.870 1,751.070
9,659.790 15,960.280 1,702.540
9,959.000 15,689.360 1,702.150
10,158.770 15,808.870 1,720.120
10,162.220 15,963.830 1,719.440
9,862.070 15,641.100 1,715.100
10,062.730 15,736.210 1,694.330
10,126.670 16,069.310 1,700.240
10,159.390 16,164.800 1,722.000
10,156.080 16,284.980 1,736.980
10,411.170 16,139.510 1,710.930
10,421.670 16,240.150 1,706.120
10,454.830 16,297.370 1,692.060
10,467.340 16,381.440 1,672.660
10,581.550 16,289.270 1,644.320
10,667.020 16,355.750 1,597.530
10,664.810 16,271.840 1,624.930
10,765.920 16,299.450 1,588.040
10,665.790 16,164.710 1,664.270
10,569.420 16,473.561 1,603.770
10,561.290 16,095.530 1,688.530
10,557.000 16,377.650 1,624.710
10,159.780 16,341.220 1,750.300
10,461.190 15,933.830 1,724.970
10,053.570 16,264.580 1,682.710
10,157.510 16,489.490 1,784.890
10,559.440 15,989.110 1,705.170
10,062.020 15,871.370 1,692.160
9,960.290 15,904.200 1,687.780
10,062.930 15,994.110 1,683.080
10,654.110 16,067.110 1,686.400
10,456.660 16,361.900 1,677.800
10,069.650 16,156.510 1,678.020
10,759.920 15,976.200 1,694.260
8,845.280 15,091.100 1,831.530
10,551.960 16,192.210 1,679.130
9,858.310 16,050.750 1,672.380
9,755.060 15,761.200 1,743.220
10,360.950 15,729.460 1,765.960
8,355.180 15,596.850 1,726.610
9,838.940 16,223.120 1,649.510
11,011.570 15,445.360 1,852.170
9,960.680 16,120.840 1,663.650
8,332.290 15,036.080 1,755.710
9,859.200 16,132.860 1,665.290
9,929.730 16,218.360 1,653.040
10,094.000 15,156.670 1,889.030
9,865.100 15,997.100 1,678.210
10,161.780 15,878.690 1,723.550
Azimuth
180.000
0.000
0.000
0.000
0.000
0.000
180.000
0.000
176.500
181.500
300.000
0.000
90.000
149.250
118.500
0.000
64.000
101.500
128.500
79.500
0.000
0.000
180.000
0.000
0.000
180.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
180.000
0.000
0.000
0.000
0.000
180.000
0.000
0.000
Dip
-70.000
-90.000
-90.000
-90.000
-90.000
-90.000
-60.000
-90.000
-84.250
-84.750
-80.000
-81.000
-87.000
-88.250
-88.500
-90.000
-88.500
-89.500
-89.500
-88.500
-90.000
-90.000
-85.000
-80.000
-90.000
-85.000
-90.000
-90.000
-90.000
-90.000
-90.000
-75.000
-90.000
-85.000
-75.000
-90.000
-90.000
-90.000
-90.000
-70.000
-70.000
-60.000
-90.000
-70.000
-90.000
-90.000
-70.000
-90.000
-90.000
Depth
131.100
150.900
399.300
399.300
399.300
113.100
129.540
388.620
585.220
554.740
597.710
600.500
167.740
499.900
554.740
472.440
621.800
281.030
627.900
320.040
756.100
224.640
602.590
737.000
502.010
496.820
688.380
616.610
650.000
703.140
736.700
458.700
621.000
721.460
1,011.020
710.180
102.720
623.930
785.850
450.190
325.850
469.390
508.100
815.950
580.640
587.000
488.000
625.610
675.740
33 of 138
Hole #
KN-02-40
KN-02-41
KN-02-42
KN-02-43
KN-02-44
KN-02-46
KN-02-47
KN-02-48
KN-02-49
KN-02-50
KN-02-51
KN-02-52
KN-02-55
KN-02-56
KN-75-18
KN-75-19
KN-75-20
KN-75-21
KN-75-22
KN-76-23
KN-76-24
KN-76-25
KN-76-26
KN-76-27
KN-76-28
KN-76-29
KN-89-1
KN-89-2
KN-89-3
KN-89-4
KN-89-5
KN-90-10
KN-90-11
KN-90-12
KN-90-13
KN-90-14
KN-90-15
KN-90-16
KN-90-17
KN-90-6
KN-90-7
KN-90-8
KN-90-9
KN-91-31
KN-91-32
KN-91-33
KN-91-34
KN-91-35
KN-91-36
KN-91-37
KN-91-38
Survey Coordinates
Easting
Northing
Elevation
8,345.980 15,290.020 1,737.580
11,459.570 15,760.550 1,803.930
9,759.570 16,153.240 1,672.210
8,837.710 15,010.310 1,808.590
10,055.650 16,363.460 1,688.350
10,059.170 16,314.960 1,687.060
9,659.200 16,040.680 1,690.490
8,962.280 15,087.730 1,875.250
9,064.140 15,070.880 1,890.340
8,839.970 14,910.030 1,746.570
9,069.600 14,969.850 1,877.630
8,867.360 14,793.800 1,748.760
9,457.770 15,768.000 1,780.310
8,751.880 15,005.360 1,758.720
9,835.860 16,006.950 1,675.280
9,713.910 15,955.330 1,698.940
9,535.160 16,019.700 1,697.670
9,473.680 16,120.330 1,694.160
9,736.490 16,132.800 1,675.920
8,647.850 15,340.080 1,848.240
8,666.530 15,175.970 1,836.130
10,027.500 15,936.360 1,684.270
9,871.490 15,754.750 1,695.680
9,777.970 15,930.560 1,691.010
9,775.940 16,122.090 1,672.980
10,062.330 15,813.200 1,688.530
10,160.020 16,200.450 1,729.060
10,140.980 16,317.830 1,733.400
10,423.830 16,127.950 1,707.350
10,434.580 16,002.550 1,717.120
10,055.860 16,265.770 1,683.750
10,181.960 16,048.100 1,728.630
10,297.560 15,815.880 1,747.140
10,288.760 15,874.850 1,764.270
10,441.600 15,881.760 1,727.430
10,389.740 15,988.490 1,735.950
10,210.270 15,710.740 1,745.790
10,166.320 15,868.250 1,725.310
9,990.330 15,967.560 1,679.170
8,458.150 15,548.390 1,748.260
8,453.570 15,694.680 1,699.410
8,767.240 15,531.960 1,734.690
9,312.490 16,143.020 1,764.960
9,857.820 15,963.380 1,682.890
9,859.790 15,864.030 1,690.070
9,759.210 15,859.790 1,708.040
9,956.320 15,852.580 1,692.520
10,060.130 15,957.950 1,686.930
9,755.770 15,761.670 1,743.190
9,653.780 15,859.520 1,736.310
9,553.450 15,956.890 1,703.270
Azimuth
0.000
180.000
0.000
0.000
0.000
0.000
180.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
173.000
175.000
185.000
185.000
184.000
176.000
140.000
43.000
182.000
223.000
140.000
50.000
180.000
175.000
180.000
152.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Dip
-70.000
-70.000
-80.000
-80.000
-90.000
-90.000
-70.000
-90.000
-90.000
-80.000
-90.000
-90.000
-90.000
-80.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-45.000
-45.000
-50.000
-45.000
-45.000
-46.000
-46.000
-45.000
-45.000
-46.500
-45.000
-46.500
-65.000
-45.000
-45.000
-50.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
Depth
690.980
490.730
480.650
703.170
151.490
570.580
543.460
605.640
669.820
623.320
668.290
660.670
572.260
542.070
75.290
86.720
185.010
215.490
26.060
115.210
118.260
319.430
308.460
210.310
215.800
188.370
152.400
149.350
145.080
152.400
132.590
200.250
200.250
96.620
200.250
123.750
200.250
200.250
163.680
196.290
200.250
203.300
218.540
282.550
306.930
306.930
282.550
282.550
261.620
331.310
297.790
34 of 138
Hole #
KN-91-39
KN-91-40
KN-91-41
KN-91-42
KN-91-43
KN-91-44
KN-91-45
KN-91-46
KN-91-47
KN-91-48
KN-91-49
KN-91-50
KN-91-51
KN-91-52
KN-91-53
KN-91-54
KN-91-55
KN-91-56
KN-91-57
KN-92-63
KN-92-64
KN-92-66
KN-92-67
KN-92-68
KN-92-69
KN-92-70
KN-92-75
KN-92-76
KN-92-77
KN-92-78
KN-92-79
KN-92-80
KN-92-81
KN-92-82
KN-92-83
KN-92-84
KN-92-85
KN-92-86
KN-92-87
KN-00-08
KN-00-10
KN-00-11
KN-00-12
KN-01-03
KN-01-04
KN-01-12
KN-02-01
KN-02-03
KN-02-04
KN-02-05
KN-02-08
Survey Coordinates
Easting
Northing
Elevation
9,858.390 15,960.620 1,683.400
9,858.620 15,866.970 1,689.400
9,662.400 16,057.610 1,686.120
9,754.510 16,058.390 1,682.630
9,858.690 16,057.470 1,672.650
9,955.170 16,057.730 1,665.760
10,057.430 16,058.110 1,678.510
9,957.470 15,757.070 1,694.130
9,658.470 15,755.950 1,762.700
9,559.070 15,857.140 1,743.140
9,555.450 15,756.910 1,752.920
9,660.940 15,656.020 1,741.060
9,757.670 15,657.320 1,738.500
8,873.880 15,756.100 1,626.500
8,897.850 15,568.100 1,652.500
8,908.830 15,426.090 1,710.500
9,109.860 15,578.060 1,666.500
9,062.890 15,764.070 1,640.500
9,088.910 15,891.060 1,638.500
8,837.110 15,189.310 1,853.700
8,836.860 15,010.230 1,807.600
8,293.980 15,116.580 1,707.400
8,287.820 15,264.650 1,690.910
9,014.490 14,914.230 1,857.200
9,050.530 14,756.210 1,844.900
9,163.050 14,605.680 1,764.560
10,492.890 16,102.470 1,700.720
10,695.130 16,108.760 1,678.160
10,501.790 15,954.890 1,711.340
10,728.350 15,979.310 1,695.610
10,934.760 16,021.320 1,695.610
10,714.270 15,838.950 1,710.970
10,450.720 16,197.050 1,699.120
9,040.850 15,058.270 1,887.170
9,559.320 15,647.800 1,772.560
9,430.490 16,065.500 1,722.400
9,449.940 15,973.580 1,731.900
10,596.850 16,109.640 1,683.900
10,551.380 16,194.700 1,679.300
10,261.630 15,897.930 1,776.900
10,225.930 15,790.360 1,747.940
10,398.410 15,944.160 1,733.800
10,282.240 16,018.290 1,794.380
10,265.770 16,117.460 1,787.190
10,268.010 16,207.840 1,792.530
10,259.500 16,276.930 1,803.180
10,458.930 16,139.050 1,699.050
10,460.780 16,033.030 1,707.690
10,578.570 16,289.420 1,645.410
10,356.230 16,236.270 1,736.820
10,249.180 16,367.610 1,818.000
Azimuth
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
270.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
340.000
340.000
0.000
2.000
0.000
0.000
0.000
0.000
0.000
0.000
Dip
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-60.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-90.000
-80.000
-80.000
-80.000
-80.000
-80.000
-80.500
-72.500
-80.000
-80.000
-75.000
-85.000
-70.000
Depth
82.300
79.750
282.550
282.550
273.400
270.350
276.450
340.470
367.890
338.940
431.290
443.480
337.410
154.530
154.530
212.450
169.770
154.530
54.250
165.500
199.700
151.800
148.700
132.300
125.900
150.000
252.400
197.500
228.000
203.300
172.800
118.000
294.700
90.500
264.300
166.700
181.700
252.100
316.100
454.200
521.210
509.020
674.000
600.500
597.410
548.640
623.930
770.230
451.000
590.400
423.700
35 of 138
Hole #
KN-02-09
KN-02-13
KN-02-16
KN-02-19
KN-02-25
KN-03-01
KN-03-02
KN-03-03
KN-03-04
KN-03-05
KN-03-06
KN-03-07
KN-03-08
KN-03-09
KN-03-10
KN-03-11
KN-03-12
KN-03-13
KN-03-14
KN-03-15
KN-03-16
KN-03-17
KN-03-18
KN-03-19
KN-03-20
KN-03-21
KN-03-22
KN-03-23
KN-03-24
CD-03
CD-04
CD-05
CD-06
CD-07
CD-18
DH-03-14
KN-02-53
KN-02-57
KN-02-58
KP-03-01
KP-03-02
KP-03-03
KP-03-04
KP-03-05
KP-03-06
KP-03-07
KN-02-54
Survey Coordinates
Easting
Northing
Elevation
10,358.300 16,320.290 1,736.580
10,360.320 16,046.030 1,738.060
10,362.250 15,844.150 1,740.970
10,364.550 16,440.961 1,729.900
10,759.920 15,976.200 1,694.260
9,070.000 14,876.030 1,864.930
9,253.790 14,997.170 1,895.900
9,266.120 15,184.130 1,916.510
8,843.880 15,209.740 1,857.830
8,563.900 14,930.060 1,706.270
9,471.260 15,337.630 1,930.280
9,430.930 15,546.520 1,852.760
8,759.960 15,218.760 1,850.950
8,985.790 16,591.539 1,493.290
8,859.810 15,694.450 1,632.790
9,245.500 15,667.670 1,747.510
9,076.040 15,381.490 1,719.840
9,662.070 15,835.470 1,741.570
10,162.700 16,006.150 1,718.370
10,456.500 16,033.400 1,707.700
9,960.540 15,998.020 1,672.500
10,456.500 16,033.400 1,707.700
10,062.130 16,088.180 1,678.180
10,763.430 16,081.770 1,683.830
10,760.230 16,078.360 1,683.700
9,960.450 16,307.870 1,653.300
10,020.430 16,211.880 1,666.230
9,651.100 16,150.800 1,674.770
9,681.410 16,251.370 1,653.230
8,527.670 17,171.221 1,416.860
8,985.970 16,594.449 1,493.250
9,540.200 16,640.859 1,554.490
8,984.280 16,087.570 1,608.130
8,299.440 16,629.980 1,558.450
10,764.390 16,682.180 1,547.000
10,701.100 16,772.520 1,541.000
8,538.420 15,115.090 1,809.550
10,939.800 16,023.930 1,695.890
10,059.820 16,310.460 1,687.420
10,395.320 16,224.400 1,717.120
10,402.090 16,302.830 1,711.260
10,501.840 16,302.050 1,672.980
10,615.180 16,177.830 1,673.080
10,499.580 16,106.070 1,699.320
10,355.000 16,095.750 1,737.090
9,860.270 15,942.360 1,683.900
10,162.410 15,915.340 1,718.710
Azimuth
0.000
0.000
0.000
0.000
180.000
0.000
0.000
0.000
0.000
0.000
180.000
180.000
0.000
0.000
0.000
0.000
0.000
180.000
0.000
80.000
0.000
260.000
0.000
90.000
0.000
0.000
0.000
0.000
0.000
0.000
180.000
0.000
180.000
0.000
0.000
0.000
180.000
93.000
6.000
260.000
330.000
30.000
90.000
130.000
200.000
230.000
180.000
Dip
-85.000
-85.000
-85.000
-85.000
-75.000
-90.000
-80.000
-90.000
-75.000
-90.000
-80.000
-85.000
-85.000
-50.000
-65.000
-80.000
-90.000
-85.000
-90.000
-45.000
-85.000
-45.000
-90.000
-45.000
-82.000
-90.000
-90.000
-90.000
-90.000
-90.000
-65.000
-70.000
-70.000
-70.000
-80.000
-90.000
-80.000
-60.000
-60.000
-50.000
-65.000
-60.000
-65.000
-60.000
-60.000
-65.000
-55.000
Depth
578.210
691.000
804.000
469.390
764.130
643.430
648.300
695.000
657.500
524.300
650.500
570.500
566.000
349.600
449.000
572.100
558.400
475.500
518.200
153.920
442.600
406.300
457.200
397.100
438.000
151.500
148.400
90.000
102.700
294.700
340.500
313.000
305.100
316.100
451.100
16.750
40.040
429.000
591.000
688.100
529.600
551.800
499.090
480.800
501.520
453.200
557.010
36 of 138
11.
Sampling Method and Approach
Pincock Allan Holts Vancouver based consulting group, was hired to

develop a sampling program for the project prior to the 2002 exploration
season, the same program was carried forward to the 2003 season. The
quality assurance/quality control (QA/QC) program established in 2002 and
continued in 2003 included blind duplicate, blank, and standard samples.
Blind duplicate samples were used to monitor and measure precision
as well as bias. Blank samples represent material with very low
concentrations of copper and gold and were used to test for contamination
of the samples. Standard samples and assay checks were used to test the
degree of accuracy. In total, 1,109 samples were sent for quality control
purposes, as blind duplicates, blanks or standards, representing
approximately one in every 26 samples or 3.9% of the samples collected
during 2002 and 2003.
It was concluded that results reported by Chemex Labs were within
acceptable error limits with respect to accuracy. The testing of precision
indicated results show up to 7% variation for gold and 1.5% variation for
copper, both values indicating precise results. The amount of contamination
was deemed to be minimal.
Samples from the Kemess North project are totally drill core based,
there are no trench or grab samples in the database. Sample intervals were
determined by a geologist, according to lithology, and ranged from 0.3 to 2.0
m, with the average length of samples being 1.8 m. Core was split using a
diamond saw. Because of the low-grade nature of the mineralization, and
difficulty determining potential ore from non-ore material, the entire drill hole
is sampled. Once in a uniform rock type, the sample spacing was generally
2.0 m. The maximum 2 m-sample length was chosen so that more detail
could be gained concerning the distribution of grade. As well, the 2 m core
length provides a representative sample weight for NQ core. For HQ core, a
maximum sample length of 1.5 m was applied.
The Kemess North project area is approximately 4,000 m in an
east/west direction and 2 ,700 m north/south and over 1, 000 m vertical. For
the most part, the drill hole spacing is less than 100 m, though the deepest
portions of the potential pit area have approximately 100 m-drill hole
spacing.
The current database contains 198 drill holes with an average length
of 390 m, with the majority in the 200 m to 600 m range. There are a few
short holes less than 100 m, while the deepest hole is 1 ,011 m.
The Broken Zone, which presents challenging drilling conditions,
covers much of the property. Historically, drilling an HQ diameter hole (64
37 of 138
mm core) to act as casing for NQ (48 mm core), which usually was used to
complete the hole, has solved the problem. In rare instances reduction to
BQ (37 mm core) was necessary to reach target depth. The core recovery is
very high with an average of ~70% in the Broken Zone, and ~100% in the
remainder.
A test was conducted to compare assay results from holes with steep
angles to holes with shallow angles. In total 29 holes were drilled at shallow
angles (less than -60) so that oriented core could be obtained to assist with
the geotechnical program. It was found that there is no significant grade
variation between the two data sets. Because the angle holes tested various
different directions, it appears likely that there is no preferred vein
orientation in the deposit that could be missed with steep drilling.
The term true thickness is not generally applicable to porphyry
deposits as the entire rock mass is potentially ore grade material and there
is no preferred orientation to the mineralization. Because of the potential of
ore grade material through the entire length of the hole, sampling was
generally continuous from the top to the bottom. The mineralization is
generally confined to three main lithologies, hypogene monzonite, Takla
BFP (bladed feldspar porphyry) and Takla volcanics. These lithologies form
large massive bodies underlying the central and eastern cirques. The
mineralization is generally flat lying within the various lithologies. The
mineralized Takla volcanic and intrusive rocks show generally vertical
contacts. The higher-grade monzodiorite intrusive in the East Cirque
appears to be an inclined tabular body, dipping 20 to the south.
It is our opinion that the sampling and assay program was carried out
with the reasonable care and skill expected of the engineering profession.
12.
Sample Preparation, Analysis and Security
Drilling since 2001 has been the most important exploration carried
out on the Kemess North property. This new drilling forms the basis of the
mineable resource as the pre-2001 drilling was not deep enough to test the
higher-grade zones. As well, more than of the assays have been
completed since 2001. The evaluation of the sample Preparation, Analysis,
and Security has therefore been focused on the 2001 and later activities.
The drill core was logged by a small team of geologists, split using a
rock saw, and then samples were passed through primary crushing. During
the 2002 program, a portable sample preparation lab was leased from ALS
Chemex. For the 2003 program, a sample -bucking facility was built near the
mill area.
The core samples were dried then crushed to 80% passing 10 mesh
at the mine site. Each sample is riffled twice with one split being retained at
38 of 138
the mine, and a 250 g sample sent to the lab. The remainder of the sample
was discarded.
The portion of sample retained at the mine site is kept in a plastic bag
with a sample tag and stored in a plastic pail. The portion of the sample sent
to the lab was placed in a plastic bag with a sample tag, shipped in a plastic
pail with two security tags, the pail top was sealed and taped. A submission
sheet was sent along with each pail of samples that included the name of
the sample preparation person, the date, the sample numbers, the number
of samples, and the numbers of the security tags.
The core storage site near Kemess Lake is a well-organized facility.
The remaining cores are still in core boxes and are available for geology
reviews as well as check assays.
Work completed by employees of the company included core logging,
sample layout, sample splitting and preliminary sample preparation. A
professional geologist oversaw all of the work from core logging to sample
splitting, while the Chief assayer at the mine oversaw the preliminary sample
preparation, and shipping.
Chemex Labs carried out more than 76% of the total assays for this
project. The lab is widely used by the mining and exploration industry and
carries the highest certification as registered assayers, including ISO 9002,
ISO:9001:2000, and they are working towards ISO 17025.
In total, excluding quality control samples, 28,831 samples were
submitted to Chemex for copper and gold analyses during the 2002 and
2003 field seasons (the samples from the 2002 and 2003 programs
represent more than 76% of the total assay data). The copper analyses
were completed by atomic absorption spectrometry (AA), following a triple
acid digestion. Gold analyses were completed by standard one assay ton
fire assay with AA finish.
The remaining 24% of the assay work was carried out by various
other labs for the earlier exploration companies including Kennco, Getty,
Shell Oil, and El Condor. Historical records of the Sampling, Analysis, and
Security of this earlier work are not available. Most of this work is for shallow
drilling and the project is sensitive to the deeper part of the deposit.
It is our opinion that the sampling and assay program was carried out
with the reasonable care and skill expected of the engineering profession.
39 of 138
13.
Data Verification
In total, three days were spent at the Kemess mine site verifying the
geological database, as well as at least three days doing verification in the
office. During the field check, six drill holes were visited, the holes have
been left with the surface casing in place; the collars are marked with pieces
of 4x4 wood stuck into the casing pipe and metal labels nailed to the posts.
As well as the six holes visited, many more collar markers were visible. The
area has many roads that have been built to access drill sites.
The second step with the field verification was to visit the core
storage area. All of the core is stored in racks, which are well built, marked
and mapped out. A legend is available showing where each hole is stored
by rack number. All of the core is split with a diamond saw and weather
resistant sample tags have been used to mark sample intervals. The tags
are stapled to the edge of the core box at the beginning of the sample
interval. Depth markers have been converted to metric. Sample numbers
correspond with core logging sheets. Sample lengths were between 1.5 m
and 2.0 m. It was observed that there have been samples taken for SG
testing and metallurgical testing; both sample sets were well marked in the
core boxes.
The database verification process included comparing original, hand written geology core logging sheets with the database, which is computer
based. Items checked included drill hole number, hole orientation,
lithologies, depths of lithologies and sample numbers. Sample numbers and
assay results were checked against original lab reports. In total, the
database was verified using 33 drill holes from within the potential mine
area, representing approximately 35% of the total. It was determined that
sample numbers and lithology depths on core-logging sheets correspond to
the database. As well, assay results reported in the database correspond
with hard copy assay sheets provided by the laboratory.
Lithology and alteration codes in the database do not always agree
with the original core logging sheets. The problem appears to be the
enormous amount of data and the fact that numerous geologists have
logged the drill holes over a period of many years. This potential problem
was overcome by amalgamating the lithology into four lithology and three
alteration blocks to represent the deposit. These more global units were
modelled wire-framed 3 -D solids and then drill hole lithologies and alte ration
were back-coded according to the 3-D lithology or alteration block that
portion of the hole was in.
The verification program has been limited to a significant number of
holes, but not all of them. In total 47 drill holes were checked out of a total of
93 holes in the potential pit area. The data verified was deemed to be
representative of the database and the potential mine area. It is believed
40 of 138
that the work completed by the exploration group has been diligent and has
been carried out with care and skill expected of the engineering profession.
14.
Adjacent Properties
From: Northgate Exploration Limited, Press Release, Tuesday

November 25, 2003, 7:09pm ET. The authors were Chris Rockingham and
Carl Edmunds.
The exploration staff investigated several mineral occurrences in the
Kemess mine and Kemess North areas during the 2003 field season. In total
24 diamond drill holes were completed for a total of 10,003 m, an airborne
geophysical survey, prospecting and geological mapping was completed.
Highlights of this work include the following:
Nugget Zone
The bulk of the drilling was directed towards locating a nearer-surface
extension of the porphyry gold-copper system at the Nugget Zone, one
kilometre southwest of Kemess North. In total, 12 holes were drilled at the
Nugget Zone in 2003 as a follow-up to last years discovery of porphyry
mineralization. The most significant hole is KN-03-12 that intersected
419.4 m of 0.38g/t gold and 0.13% Cu from 24.4 m to 443.8 m. While the
extent of the mineralization is not ye t defined, this near-surface discovery
leaves open the possibility of developing a small open pit adjacent to
Kemess North, that could further increase throughput to the Kemess mill
once the Kemess North project is brought up to full production in 2010.
A preliminary review of the Nugget property was undertaken. Several
drill sites were visited in the field, and some of the drill core was inspected.
As well, several of the drill hole files were compared with the database to
ensure data integrity.
Duncan Ridge
Several occurrences of skarn/carbonate replacement type
mineralization were identified on the Kemess property during the 2003
exploration season. These occur in the Permian aged rocks that
stratigraphically underlie the Kemess deposits. The most interesting
occurrence is located on Duncan Ridge, five kilometre west of Kemess
North, where hole DR-03-01 intersected 11.75m of 0.8% Cu, 2.24% Zn and
12.7g/t silver from 311.9 m to 323.65 m. While this intersection is well below
the surface of Duncan Ridge, if an economic deposit is eventually defined, it
could be accessed with a relatively short adit from either side of the ridge.
Follow-up work next year will consist of deep penetrating down-hole
electromagnetic surveys to assist in planning further drill holes.
41 of 138
Other Areas of Interest

The Bear Claims were staked, to the south of and adjacent to the
existing Kemess claim block. The oxidized Toodoggone volcanic rocks that
originally covered the south area of the Kemess South open pit hindered
exploration in this area at the time of discovery and delineation of the
deposit because induced polarization geophysical surveys were unable to
detect the covered part of the deposit. The company will integrate the results
of this years airborne geophysical survey with a deep penetrating ground
geophysical survey, to be carried out in 2004, in order to identify conductive
argillic alteration zone that may be associated with any other hidden
porphyry deposits.
Prospecting on the Kemess property and other claims in the district
has identified several higher-grade, precious metal and base metal
showings that require further examination. The most interesting of these
new occurrences are the Hilda and Archie showings. The Hilda showing is a
series of angular boulders in clay rich till 2.5 km east-northeast of the
eastern cirque at Kemess North. The average grade of eight selected grab
samples was 5g/t gold, 44g/t silver, 0.84% Cu, 2.5% zinc and 1% lead.
Based on the available data, these are interpreted to be from a mesothermal
vein, similar to the geological setting at Comincos former Snip Mine where
just over one million ounces was mined at an average grade of 25g/t Au.
The Archie showing is a narrow quartz magnetite vein occurrence
with visible gold that may be indicative of a sheeted vein type system with
bulk tonnage potential.
Both of these occurrences were discovered late in the season, and as
a result, a more detailed follow-up will not commence until the 2004
exploration season begins in June.
42 of 138
Figure 9:
Kemess Claim and Surrounding Properties
Figure 9 shows the mineral tenures adjacent to Northgates mining

claims at Kemess. The most significant and nearest mineral occurrence is
the Pine Prospect on ground controlled by Stealth Minerals. A pre 43-101
resource statement prepared by Stealth geologists estimates the Pine Cu-
43 of 138
Au prospect to host 160 Mt grading 0.50 g/t Au and 0.20% Cu defined by 34

drill holes of 7,889 m. Exploration work planned for 2004 by Stealth includes
6,000 m of drilling on a series of epithermal gold and silver occurrences
located to the north and east of the map area. Stealths extensive land
holdings in the Toodoggone District cover 288 km 2.
Finlay Minerals controls 18.2 km2 of mining claims immediately
adjacent and north of the Kemess North deposit on the Atty Property. The
most significant mineral occurrence is referred to as the Atty. This is a
300 ha Cu-Au soil anomaly hosted in pyritic Takla volcanic rocks within
which there is a 10 ha IP chargeability anomaly. To date, the property has
not been drilled, but significant work is planned for 2004.
Auterra Ventures holds 4 patented claims on Duncan Ridge totalling
83 ha, known as the Cairn Property. The property is one of the oldest claims
in the district and has occurrences of structurally-controlled veins, shears,
breccias and carbonate replacement/skarn mineralization from which a
highly selected grab sample assayed 9.99% Cu, 245 g/t Ag, 8.8% Zn and
0.6% Pb.
15.
Mineral Processing and Metallurgical Testing
Hatch was retained to evaluate the metallurgical aspects of the

project and input to the completion of the revised project Pre-Feasibility
Study and financial model. Hatchs predictions of plant recovery and
processing performance, capacities, and costs have also been used as
inputs to the economic pit limit evaluation.
The Kemess North ore will be processed in the existing Kemess
plant, initially with integrated co-production with the current Kemess South
ore and eventually, after 4 years, as a stand-alone operation. During the coproduction period the plant capacity will be increased and an ore
transportation system from Kemess North will be installed. This will include
an Underground ore conveyor system and pit-side crushers. The current
capacities, costs and metallurgical performance of the plant a re well defined
and carry a high level of assurance into the Kemess North project
performance and cost estimates. The important points for evaluation for the
Kemess North Mineral Project are the metallurgical sampling, prediction of
metallurgical performance through the known Kemess mill, and the
performance and cost estimates for the new plant expansion and ore
transportation systems.
The relevance of the metallurgical testing is dependant on the
location of the metallurgical samples with respect to the Mi ne plan. Table
15.1 lists the metallurgical test samples referenced in the Konigsmann
report of May 2003 and the drillholes they were taken from. Figure 10 shows
a plot of these met samples over plotted on the ultimate pit design (P634).
44 of 138
This indicates that the met samples were well located to represent the deep
ore for the Kemess North deposit. Future testing should also be done on the
shallow ore on the west side of the pit for more detailed prediction of
operating performance during the earlier years of the project. Since the
project viability is dependant on the performance of the deep, higher grade
ore, and during the earlier schedule periods plant feed will also be provided
from Kemess South, these shallower samples are not considered to be
critical to the project viability.
Table 15.1: Metallurgy Samples with Drill Hole References
Sample
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Drill Holes
KN-00-12 KN-02-01
KN-02-01 KN-02-03
KN-02-01 KN-02-03
KN-01-17 KN-02-01
KN-02-0102-03
KN-02-01 KN-02-04
KN-02-05 KN-02-06
KN-02-05 KN-02-08
KN-02-01 KN-02-03
KN-02-01 KN-02-04
KN-02-01 KN-02-05
KN-02-01 KN-02-05
KN-02-16 KN-02-18
KN-02-13 KN-02-16
KN-02-13 KN-02-24
KN-02-14 KN-02-17
KN-02-14 KN-02-17
KN-02-10 KN-02-17
KN-02-03 KN-02-07
KN-02-03 KN-02-07
KN-02-03 KN-02-07
KN-02-03 KN-02-13
KN-02-03 KN-02-07
KN-02-15 KN-02-33
KN-02-10 KN-02-14
KN-02-14 KN-02-15
KN-02-14 KN-02-15
KN-02-15 KN-02-33
KN-02-01 KN-02-13
KN-02-14 KN-02-15
KN-02-04
KN-02-05
KN-02-05
KN-02-03
KN-02-06
KN-02-05
KN-02-09
KN-02-09
KN-02-05
KN-02-07
KN-02-13
KN-02-07
KN-02-07
KN-02-06
KN-02-09
KN-02-09 KN-02-13 KN-02-16
KN-02-16 KN-02-18 KN-02-24
KN-02-13 KN-02-16 KN-02-24
KN-02-24
KN-02-09
KN-02-06
KN-02-06 KN-02-09 KN-02-10 KN-02-21
KN-02-06 KN-02-08 KN-02-09 KN-02-21
KN-02-24
KN-02-24
KN-02-21
KN-02-36
KN-02-21
KN-02-24
KN-02-13
KN-02-13
KN-02-13
KN-02-36
KN-02-15
KN-02-17
KN-02-17
KN-02-39
KN-02-39
KN-02-24
KN-02-16 KN-02-24
KN-02-15
KN-02-17 KN-02-21 KN-02-46
KN-02-21 KN-02-39
KN-02-38 KN-02-39
KN-02-14 KN-02-15 KN-02-15 KN-02-16 KN-02-17

KN-02-17 KN-02-39
KN-02-33
45 of 138
KN-02-39
Figure 10:
Pit 634 with Met Sample Drill Holes
The following is from Hatch summarizing the metallurgical test work.

The metallurgy of the Kemess North deposit has been investigated by
Northgate. A report titled Summary Report on Process Development
Treatment of Ores from the Kemess North Deposit was issued by Klaus
Konigsmann PEng, in May 2003. Hatch concurs with these findings and the
sections below have been extracted from the Konigsmann report.
Interpretation of the Kemess North metallurgy has been based o n
laboratory results attained at Lakefield Research over the period January to
May 2003. The Lakefield report was titled An Update of Metallurgical
Testing of Kemess Ores, June 10, 2003. Lakefield completed additional
variability testing on the Kemess North ores and issued a supplementary
report in November 2003 essentially confirming the previous work.
46 of 138
Additional metallurgical reports referenced are Amtel Ltd.s Kemess

North Preliminary Metallurgical Testing June 2001, Characterisation of
Copper and Gold occurrences in Composites of the Kemess North Deposit,
Summer 2002 and Gold Deportment in Copper Cleaner Scavenger
Tailings, May 2003.
The ores of Kemess North share a number of favourable
characteristics with the Hypogene ores of the Kemess South deposit:
Both deposits carry clean sulphides without surface oxidation.
Impurity elements occur in extremely low concentrations.
The sulphides are coarse grained and are adequately liberated for
rougher flotation at a grind of K80 at 145 .
Ball mill work indices are low compared to a majority of porphyry

deposits.
Ball mill work indices for samples of two recent plant surveys were
13.8 and 15.0 kWh/t. The BMWI for the sample used in laboratory
testing was only 12.5, well below average. The samples of Kemess
North averaged 13.8 kWh/t.
The average metal contents of North ores are slightly lower, copper
at 0.20% Cu versus 0.22% Cu and gold at 0.4 g/t Au versus 0.75 g/t
for South ores.
The pyrite content of Kemess North averages 4% compared to 1%

pyrite for the South ores. Since pyrite contains finely disseminated
gold, higher pyrite carries a larger portion of gold to tailings.
The near surface ores of the North deposit are of slightly lower grade
than those of deeper zones.
The rougher flotation with Kemess North ores in essence is a bulk

sulphide float. Rougher concentrates have to be re-ground to a K80
of =20 microns for cleaner flotation to produce quality concentrates.
Existing flotation cell capacity and de-watering equipment are

adequate for treatment of North ores.
Concentrates will be free of deleterious impurities.
The ultimate settling density of North tailings is at least 66 % solids at

a pulp density of 1.74.
47 of 138
The Net Neutralization Potential for all North composites is negative,

averaging -50 tons CaCO3/1000t of tailings. The tailings will be acid
generating unless stored under water cover.
The results of the Lakefield metallurgical test work on seven

composites from different ore zones led to the following projection of plant
performance:
Table 15.2: Summarized Kemess North Metallurgy
Ore Type
Near Surface Ores

Upper Zone Ores
Middle Zone Ores
Lower Zone Ores
Bond Ball
Mill Work
Index
15.1
12.8
14.2
14.4
Copper
Concentrate
Grade
% Cu
23
22 to 24
22 to 24
24 to 26
Copper
Recovery
Gold
Recovery
Cu %
85
86
86
92
Au%
61
60
50 to 60
60 to 70
Subsequent analytical work has been completed on the samples from

the flotation test work and determined that there was a relationship between
Ag and Au in the concentrate for the various pit zones. These results have
been summarized in Table 15.3 .
Table 15.3: Silver Metallurgy for Kemess North
Ore Type
Near Surface Ores
Upper Zone Ores
Middle Zone Ores
Lower Zone Ores
Silver Recovery
Ag %
Ag/Au
(in concentrate)
40 to 45
40 to 45
40 to 45
50 to 55
2.9
3.3
3.0
3.0
48 of 138
16.
Mineral Resource and Mineral Reserve Estimates
The Geological modelling, mine planning, and Resource/Reserve

estimating was done using MineSight mine planning software from Mintec,
a well accepted and proven software system in the industry. The Geological
model was built by Abdullah Arik of Mintec, a Geostatistician and Qualified
Person as listed in Section 21.
(a)
Geological Model
Adapted from: Mintec Ltd., Geostatistical analysis and interpolation

methodology Kemess North. Author: Abdullah Arik, March 2004.
The resource estimate has been determined from a 3 -D block model
of the deposit. The model was built with 20 m x 20 m x 15 m size blocks
covering a volume 4 ,000 m in an east/west direction, 2 , 700 m north/south,
and 1 , 000 m vertical. A geostatistical analysis of the database was
completed and interpolation methodology and parameters determined.
A summary of information from the database and geostatistical
resource estimate work includes the following:
198 drill holes.
40,237 copper assays.
39,821 gold assays.
1.35% Cu was used as an outlier cutoff grade for copper; 14 assays

are higher than the cutoff for copper.
4.0 g/t Au was used as an outlier cutoff grade for gold; 16 assays are
higher than the cutoff for gold.
Copper and gold show a correlation factor of 0.80.
Outlier high grade cutoffs were applied to both Copper and Go ld. 14
Copper assays were cut to 1.35% and 16 high grade Gold assays
were cut to 4 g/t. The cut grades were used in compositing.
5 m and 15 m fixed length composites were generated for

comparison of the composite length on grade dilution and loss effects
with respect to the original assays.
49 of 138
Dilution effects of composites were studied. Dilution was calculated to

range, depending on litho type, between 5.4% and 13.5% for the 5 m
composites and 8% and 18.5% for the 15m composites. Metal losses
were calculated to be between 1.5% and 11.7% for the 5 m
composites, and 1.4% and 16.7% for the 15m composites, again
depending on litho type. The 5m composites were chosen which is
reasonable for this type of deposit.
The influence of a few remaining high-grade composites were limited

to a maximum of 50 m during interpolation.
Five lithology codes were used:
0 = undefined lithologies;
4 = Toodoggone; mainly waste material;
5 = Hypogene monzodiorite;
6 = Takla volcanics; and
7 = Takla BFP.
3-D solid wire frame models based on the drill hole intercepts were
provided by Northgate for the above Litho types. The composites
were then tagged with a Litho code according to the 3-D solid they
were included in on a majority (length) basis.
Variograms (both grade and directional) using the 5m composites

were studied for Litho codes 5, 6, and 7. The trend of the
mineralization was determined using the directional variograms and
the subsequent contouring of these variograms. The ranges of
influence of the grades were based on the shape of the variograms.
The variograms resulted in a nested type structure for modelling,
indicating generally a good correlation in short ranges of 40 m to
60 m, and continuing but decreased correlations in the longer ranges,
150 m to 250 m. Kriging parameters were determined from the
variograms for Litho zones 5, 6, and 7.
A contact analysis was completed; this study indicated that the

transition zone across the Litho boundaries, ranged from 30 m to
50 m depending on location and litho code. As this distance is less
than the typical drill spacing, a hard-boundary approach, interpolating
each Litho zone separately, is justified.
50 of 138
Since it was not possible to correct or re-survey the 18 suspect holes,

two models were built, one with all of the drill holes, where the suspect holes
had their down hole surveys corrected, and the second with the 18 suspect
drill holes removed (see Section 10, Down Hole Survey). The intention was
that these holes would be added back in later, after the corrected surveys
were verified. Subsequent mine planning work with the two models, using
the project base economic parameters, showed a significant reduction in the
economic pit size with the model with the holes missing. Similar pit sizes for
the two model were achieved with only a 5% difference in price. With this
sensitivity it was decided for the mine planning work, to use the model
including the corrected holes since the assays are valid and excluding the
holes is less representative than using the corrected holes.
The modelling process was identical for the 2 models. The 3 -D block
models included the following dimensions. The block height was chosen to
match the bench height for the mining equipment being used in the mine
plan.
Table 16.1: Resource Model Limits and Dimensions
Minimum
Maximum
Block Size
No. of Blocks
East
8,000
12,000
20
200
North
14,500
17,200
20
135
850
2005
15
77
Elevation
The items in the block model include the following general

description:
TOPO
Portion of the block below topography (%)
Grades
Interpolated values from drill holes
Zones
Numeric code values assigned from 3-D solids, etc.
ORE%
Portion of the block that is within the mineralized zone
Classes
Numeric codes assigned during interpolation
Values
Calculated from other items and input variable. Includes

economic design variables.
51 of 138
The 3-D Block models for Kemess North include the following items:
Item
Minimum Maximum Precision
Description
TOPO
0
100
1
Topography%
CUKRG
0
2
0.001
Cu% from kriging
CUIDW
0
2
0.001
Cu% from IDW interpolation
CUPLY
0
2
0.001
Cu% from polygonal method
AUKRG
0
4
0.001
Au g/t from kriging
AUIDW
0
4
0.001
Au g/t from IDW interpolation
AUPLY
0
4
0.001
Au g/t from polygonal method
LITHO
0
10
1
Rock type
DIST
0
500
1
Distance to nearest hole (m)
NCOMP
0
50
1
Number of composites used
NDH
0
25
1
Number of dhs used
KRGVR
0
4
0.001
Kriging variance
CUEQ
0
4
0.001
Extra
AUEQ
0
8
0.001
Extra
ORE%
0
100
1
Ore Percent
SG
0
5
0.01
Extra
CLASS
0
5
1
Resource classification codes
Other1
Other economic items
Other2
Other material Characteristics
Values were assigned or interpolated to the blocks in the model

as follows:
TOPO
Assigned based on the project topography surface
LITHO
Assigned from the 3 -D solids. Value assigned is for

majority Litho zone if multiple zo nes intersect a block.
ORE%
Calculated as the percent within the Litho Zones. Blocks

without a LITHO code or with LITHO = 0 have ORE%
and therefore report to waste.
AU
Interpolated from 5 m composites using geology

matching based on LITHO code. AUKRG uses kriging,
AUIDW uses inverse distance weighting, and AUPLY
uses the polygonal method. The interpolation steps are
listed below.
52 of 138
CU
Interpolated from 5 m composites using geology

matching based on LITHO code. CUKRG uses kriging,
CUIDW uses inverse distance weighting, and CUPLY
uses the polygonal method. The interpolation steps are
listed below.
CUEQ
Calculated from the kriged copper and gold grades and

the project base design parameters.
AUEQ
Calculated from the kriged copper and gold grades and

the project base design parameters.
CLASS
The Resource/Reserve Classification code:

1 = Measured/Proven
2 = Indicate/Probable
3 = Inferred
The grade interpolation method and search distances for kriging were
based on the Geostatistical analysis and variogram parameters. A minimum
of 3 and a maximum of 16 composites were used for the interpolations with
maximum 4 composites from each quadrant. The maximum search for the
composites was limited to 200 m. The general steps were:
A background interpolation was done using the inverse distance
weighting to a power of three without using the litho boundaries. The idea
with the background interpolation was to assign grades to all the blocks with
no litho codes and those with litho code 4. Search distances were limited to
200m, wi th a limited vertical search of one bench. These background values
were assigned to both the kriged and IDW grade values
Separate IDW runs were made for AU & CU for LITHO codes 5, 6, &
7 (6 runs) using the specific interpolating parameters for each metal b y
zone. For blocks that meet the selection criteria the background values were
over written.
Separate Ordinary Kriging (OK) runs were made for AU & CU for
LITHO codes 5, 6, & 7 (6 runs) using the specific interpolating parameters
for each metal by zone. For blocks that meet the selection criteria the
background values were over written.
The reserves Class codes were assigned based on the Geostatistical
analysis and the following items loaded into the model during the grade
interpolation runs.
DIST -
Distance to the nearest drill hole from the centre of

the block
53 of 138
NCOMP -
Number of composites used in the interpolation of a

block
LITHO -
Rock codes 5, 6, & 7
The distances used in the resource CLASS item were deduced from
the ranges of the global indicator variogram determined for CU within L ITHO
5, 6, and 7 zones. These are listed in Table 16.2. The 50 m-distance used in
the measured classification was deduced from the range of the first structure
of the indicator variogram. The 150 m-distance used for the indicated
resource category was derived based on the range of the same variogram
corresponding approximately to 80% of the sill. The variogram range for the
second structure extends up to 285 m, but the correlation between
composites beyond 200 m is not significant.
Table 16.2: Resource Classification Criteria Used
1
Measured Resources
DIST = < 30 m
or
DIST = 31-50 m
and
NCOMP > = 5
(b)
2
Indicated Resources
DIST = 31-50 m
and
NCOMP = < 5
or
51 m < DIST < 150 m
and
NCOMP > = 5
or
51 m < DIS T < 200 m
and
LITHO = 5, 6, or 7
3
Inferred Resources
DIST > 150
or
Other blocks that
cannot be classified as
measured or indicated
Mineral Resources
The following Resource and Reserve tables are based on the All Drill
Hole model and summarize the measured, indicated, and inferred
resources for the total Geological Model.
54 of 138
Table 16.3: Summary of Measured Resources

Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
Tonnes
(Mt)
739.6
589.4
435.9
263.7
123.2
52.5
27.6
15.7
8.8
4.5
2.4
Mean
Cu %
0.127
0.153
0.181
0.217
0.267
0.330
0.384
0.430
0.477
0.527
0.575
Mean
Au g/t
0.237
0.278
0.320
0.376
0.465
0.610
0.769
0.928
1.083
1.246
1.452
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.127
0.238
0.154
0.279
0.182
0.324
0.220
0.385
0.273
0.478
0.337
0.627
0.393
0.793
0.442
0.962
0.491
1.131
0.547
1.309
0.592
1.486
Table 16.4: Summary of Indicated Resources

Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
Tonnes
(Mt)
947.9
632.8
411.2
218.9
95.9
38.5
19.0
9.6
4.2
1.8
0.8
Mean
Cu %
0.098
0.136
0.170
0.210
0.259
0.317
0.365
0.409
0.457
0.502
0.547
Mean
Au g/t
0.186
0.235
0.289
0.350
0.437
0.569
0.714
0.895
1.099
1.206
1.251
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.098
0.185
0.135
0.234
0.170
0.289
0.209
0.349
0.257
0.434
0.314
0.567
0.362
0.714
0.406
0.897
0.465
1.104
0.513
1.219
0.547
1.249
55 of 138
Table 16.5: Summary of Inferred Resources

Ordinary Kriging
Cu %
Cutoff
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Tonnes
(Mt)
337.1
74.1
41.9
28.4
11.2
2.9
0.27
0.18
0.06
Mean
Cu %
0.040
0.131
0.175
0.196
0.234
0.276
0.357
0.376
0.407
Mean
Au g/t
0.068
0.164
0.217
0.234
0.307
0.397
0.542
0.589
0.646
Inverse Distance
(power = 3)
Mean
Mean
Cu %
Au g/t
0.040
0.068
0.131
0.164
0.175
0.217
0.196
0.234
0.234
0.307
0.276
0.397
0.357
0.542
0.376
0.589
0.407
0.646
Because of the questionable orientation, and therefore the ultimate

location, of eighteen drill holes, a test was made to compare the geologic
model with the orientation of the eighteen holes corrected and in the
database, compared to the model with the eighteen holes deleted from the
database.
The variation between the two models is considered very minor and it
falls within the margin of error for the resource calculation. The difference is
more pronounced when the effects of the economic design parameters are
applied in the ultimate pit limit qualification. This is discussed in Section (c)
below.
(c)
Bulk Density
A great deal of effort has gone into the determination of the b ulk
density (referred to as SG) for the deposit. In total, more than 2,200
measurements have been performed and a weighted mean SG of 2.70 has
been determined. Four different sets of data are available, pre-1999
samples, as well as samples from 2000, 2002, and 2003. Sample material
has ranged from whole core samples 15 cm to 20 cm long for the 2003
work, quartered core for the 2000 and 2002 samples, and crushed coarsereject material for the pre-1999 samples. The 2003 lab work was by
Lakefield Research using their wax immersion method.
In order to determine a realistic SG for the proposed pit area, the SG
sample results were interpolated into the 3-D block model. Because of the
high number of samples and their distribution within the proposed pit it was
decided to use the interpolated SG for resource and reserve calculations .
56 of 138
The range of SG values by bench was from 2.63 to 2.72 showing a weak
trend of increasing SG with depth.
An SG of 2.66 was calculated as a default for waste material. This is
a tonnage weighted average for waste/grade categories below the
incremental economic cut-off (NSR<2.2). Similarly a default SG of 2.668
was calculated for material above the economic cutoff, for material that
didnt receive an interpolated SG value. The range in SG values for waste
material was from 2.655 to 2.674, showing very little variation (-0.2% to
+0.5% about an SG of 2.66).
(d)
Model Check
Five individual segments or regions were selected from the geologic

model as manual checks for grade and tonnage. The regions each
measured 105 m high (elevation), 200 m long (north/south), and 100 m wide
(east/west). The copper and gold grade estimates were calculated by
averaging the assay grades from all of the drill hole intercepts within the
block. The tonnage was calculated by using the averaged bulk density (SG)
of the data from within the region. The comparisons are made on in situ
modeled quantities with no mining losses, dilution or cutoff grades applied.
The results are shown in Table 16.6.
Table 16.6: Model Checks
Block Estimated Variance Estimated Variance Estimated Variance
Tonnes
From
Cu %
From
Au g/t
From
(Mt)
Model
Model
Model
1
5.859
-12.8%
0.177
+8.2%
0.308
+3.6%
2
5.727
-10.8%
0.151
-3.2%
0.207
-5.5%
3
5.586
-14.2%
0.212
+7.3%
0.350
+6.8%
4
5.752
-7.1%
0.256
-7.0%
0.511
-6.5%
5
5.515
-12.3%
0.136
+1.5%
0.298
+4.4%
As shown the estimated grades are very close to the modeled grades
for both copper and gold. The estimated tonnage is consistently lower than
the model but the variance is well within the margin of error for the resource
calculation.
(e)
Reconciliation
A reconciliation for the Kemess South mine was completed and

reported on in February, 2002 by MRDI. The reconciliation considered the
copper and gold grades and tonnage from the MineSight computergenerated model relative to the actual mined volumes. MRDI reported that
57 of 138
original copper analyses are supported by production history (as reconciled

between the geologic model to blast hole and milled ore). Generally good
agreement for average grade copper values were observed while gold
exceeded expectations by an average of 15%. Annual reconciliation and
comparison of milled production to the block model showed good agreement
for copper.
(f)
Mineral Reserve Estimate
The Ultimate Economic pit limit is based on a Lerchs-Grossman pit

optimization evaluation of the resource in the 3-D block model. This
evaluation includes the Project Base economic parameters, and overall
slope design parameters derived from Geotechnical evaluation of the pit
walls. (See Section 17 and Table 17.1 for details ). The economic pit limited
is also constrained to only consider Measured and Indicated Reserve Class
material to generate revenue. A final pit design, Pit 634, has been designed
based on this Ultimate economic pit limit study and from more detailed
Geotechnical slope design parameters including highwall haul roads. (See
Figure 11) The ultimate pit is made up of a Pre-strip phase and 3 production
phases as discussed in the pit design Section 17.
The Reserves within the P634 pit design are generated from 3-D
block model incorporating the following steps:
Material below topography is accounted for by the TOPO item

in the model.
A Partial is calculated as the portion of the block within the pit

based on the P634 pit design.
The Volume of ore within a block is determined by

the ORE%.
The ore portion of each block is mined first up to the amount of

material that exists within the pit.
(TOPO X Partial).
Mining recovery is estimated at 95% and is applied to each block of

ore. Contact dilution is at the contact between ore and waste, and is
estimated at 10% for blocks with 10% to 100% ore in them. When the
ORE% in a block, is less than 10%, dilution is not added. A contact block
has ORE% less than 100%. The dilution grade is estimated at 0.08 g/t Au
and 0.05% Cu which is the average grade of material below the incremental
cutoff grade. The interpolated SG is then applied to convert the calculated
bank cubic meters to tonnes. For blocks that dont have an interpolated SG,
a default value of 2.668 is applied for ore and 2.66 for waste.
58 of 138
Figure 11:
Ultimate Pit Limit (P634)
Cutoff grade has been determined by using the following factors,

including:
NSP (net smelter price); copper C$0.901/lb and gold C$11.753/g.
Mill recovery factor; 88.8% for copper and 61.5% for gold.
Conversion factor; 2204.62 lb/tonne for copper and 31.1033g/oz
for gold.
59 of 138
Table 16.7: Reserve Estimate, Proven Category

NSR Bin
2.20 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>5.00
Total
In Situ
(bcm x 106)
3.73
24.26
13.86
23.20
46.42
111.47
In Situ
(tonnes x 106)
9.89
64.53
36.90
61.58
123.89
296.79
Mineable
(tonnes x 106)
9.41
61.42
35.14
58.57
117.86
282.40
Cu
(%)
0.066
0.085
0.115
0.145
0.226
0.159
Au
(g/t)
0.156
0.190
0.230
0.271
0.419
0.306
Table 16.8: Reserve Estimate, Probable Category

NSR Bin
2.20 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>5.00
Total
In Situ
(bcm x 106)
2.65
11.71
63.38
10.09
21.22
52.01
In Situ
(tonnes x 106)
6.99
31.04
16.84
26.93
56.62
138.42
Mineable
(tonnes x 106)
6.69
29.62
16.03
25.60
53.91
131.85
Cu
(%)
0.062
0.083
0.118
0.147
0.233
0.160
Au
(g/t)
0.164
0.191
0.224
0.268
0.438
0.310
Table 16.9: Reserve Estimate, Proven and Probable

NSR Bin
2.20 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>5.00
Total
In Situ
(bcm x 106)
6.38
35.97
20.20
33.30
67.63
163.48
In Situ
(tonnes x 106)
16.88
95.57
53.74
88.51
180.51
435.21
Mineable
(tonnes x 106)
16.10
91.04
51.17
84.17
171.76
414.24
Cu
(%)
0.064
0.084
0.116
.146
0.228
0.160
Au
(g/t)
0.159
0.190
0.228
0.270
0.425
0.307
The final pit indicates a strip ratio of 1:0.81 (tonnes ore to tonnes
waste).
60 of 138
17.
Economic Pit Limits and Mine Plan
The entire mine planning for the Kemess North mineral property is
based on work done with MineSight a suite of software well proven in the
industry. This includes the 3-D block model described in Section 16, as well
as pit optimization, detailed design, and production scheduling.
In addition to the geology information used for the block model, other
data used for the mine planning includes the base economic parameters,
costs data from the February 2003 pre-feasibility study, Geotechnical slope
design parameters, metallurgical recoveries, and project design through put
targets. All design work is based on using the existing mining equipment
from Kemess South.
(a)
Economic Pit Limits
The economic pit limit was determined using the ePit optimization
routines in MineSight which are based on the Lerchs-Grossman algorithm
(LG) and have been run to account for time value discounting. The LG runs
against the 3D Block model evaluating the costs and revenues of the blocks
within potential pit shells. The routine expands downwards and outwards
from economic surface mineable mineralization, until the last increment is at
break-even economics.
Base Design Criteria Prices, Recoveries, Costs, Ore Class
The Base Design criteria for the ePit routine are listed in Table 17.1.
The mine costs were also increased by $0.02 per bench below 1,615
elevation to account for increased haulage and pit dewatering costs as the
pit deepens. The Net Minesite Price is the market price minus all offsite
charges for concentrate transportation, smelting, refining etc.
Table 17.1: Economic Pit Design Parameters
Net Minesite Price

Met. Recovery
Base Mining Cost
Local Overhead and Milling
Cost
Resource Class
Mining Rate
Discount Factor
Units
$Can/lb
$Can/gm
%
$/tonne mined
$/tonne milled
Code
Benches per
year
%
Copper
Gold
$0.901
NA
NA
$11.753
88.8%
61.5%
$1.03
$1.03
$2.93
$2.93
1&2
10
1&2
10
8%
8%
61 of 138
Slope parameters
The overall slope design parameters from Knight Pisold in Table
17.2. The pit slope parameters are based on a Factor of Safety of 1.2 which
is deemed achievable and safe by Geotechnical specialists, if controlled
blasting techniques, groundwater depressurization, and high wall operating
practices are implemented. The operations planning and budgeting costing
and specialty equipment have been revised to reflect this increased control
requirement.
Table 17.2: ePit Slope Angles by Pit Sector
Azimuth 0
Slope
35 80 90 135 230 240 260 270 330
51 51 52 47 45
45
47
47
52
52
Block Discounting
The economic effect of the time delay of ore revenues versus the cost
of stripping the over-lying waste is accentuated in the Kemess North ore
body because of the deep high grade zone and its effect on the economic pit
limits. This is often evaluated using the Whittle 4d or 4x analysis but an
equally effective method is to apply a discount factor to each block. In this
way for each sector of the pit wall, for each incremental shell, the time
discounted revenues from ore grade blocks are evaluated against the time
discounted overlying waste. For example , while examining the next
incremental skin or pit shell the LG at any point on the pit wall may show
that the revenues from the ore in the next block in that pit sector may be
greater than the cost overlying waste up to surface. However, when the time
delay between the revenues and the stripping costs are considered, the next
pit incremental expansion may not be economic. Although the actual years
that the revenues and costs are incurred is not known when the LG is
evaluating each incremental expansion, it is the difference between the two
time periods that determines if the sector is a cash positive expansion. The
discount rate for this LG analysis is 8% and assuming the final pit
pushbacks will be designed to keep the bench advance rate to 10 benches
per year.
Resource Class
Finally, the LG was also restricted to include only Measured and
Indicated Resource Class material in the revenues (CLASS= 1&2). Any
Inferred (CLASS=3) material is costed as waste and zero revenue.
62 of 138
Ultimate Pit Limit by Lerchs-Grossman Pit Optimization

The ultimate economic limit, pit shells are shown in Figure 12 & 13 on
an undiscounted and discounted basis and in section view in Figure 14. Ore
grade material from the Block model (NSR > 2.2) is also shown as a 3-D
solid in these figures.
Sensitivities
A series of LG pit designs were run keeping the costs the same but reducing
the metal prices. At low prices only low cost mineralized material is mineable
(high grade &/or low strip ratio) and as the prices are increased the pit limits
expand. These sensitivity cases are shown in Figure 15.
From the sensitivity graph the following points are noted:
In the undiscounted cases deep ore is mined in Pit 8 (or greater),

which is based on 96% of base prices. This gives a small downside
price cushion.
The deep ore is only mined with full Base Case pricing (Pit 10) or
greater in the discounted cases.
After opening up the deep pit, the pit expands fairly evenly as the
price increases.
From this analysis, the detailed pit designs were based on the
discounted P10 pit shell which corresponds to the full project base case
prices. A discount rate less than 8%, a bench advance greater than 10 per
year, or lower costs/higher prices than the project base parameters will
improve the economics within this pit shell. However the opposite is also
true.
63 of 138
Figure 12:
Ultimate Pit Limits - Undiscounted
64 of 138
Figure 13:
Ultimate Pit Limits - Discounted
65 of 138
Figure 14:
Ultimate Pits Section View
66 of 138
Figure 15:
Lerchs-Grossman Sensitivities
LG Sensitivity
(Pit 10 is Base Case Prices)
350000
300000
250000
Ore KTonnes Undiscounted
X 1000
200000
Ore KTonnes Discounted
150000
Net $ Value Undiscounted

100000
Net $ Value Discounted
50000
0
1
10 11
12 13
14 15
-50000
Pit Number
Note: Net$ value is relative. Full cash flow analysis is required to determine
project NPV.
67 of 138
(b)
Detailed Pit Designs
Selection of Pushbacks
The LG sensitivity analysis was also useful to determine were to
design the pit pushbacks. The pit shell opening up the lower grade, but
lower strip ratio, west side of the deposit, produces ore earlier in the
schedule suitable for a first stage of mining. The next major increment is to
the full economic pit depth on the east side. To enable a more even annual
strip ratio in the production scheduling, this eastern pushback was split into
2 stages, a shallower north side and a deeper south side mining to the
ultimate pit depth. The size of the stages was roughly determined to ensure
that the resultant Phase 2 & Phase 3 each have a sufficient bench width to
enable efficient mining operations. For each of the 3 stages the design was
pushed to the ultimate pit lateral limit on three walls, with subsequent
pushbacks expanding in one direction only. This will enable much more
efficient mining operations when adjacent pushbacks are being mined at the
same time. Figures 16, 17, and 18 indicate the general location of the
pushbacks as the increasing metal prices used in the LG routine, expands
the economic mining limit.
Detailed Slope and Ramp Parameters
The overall pit slopes and detailed bench design parameters ha ve
been provided by Knight Pisold for the different sectors of the pit wall and
are listed in Table 17.3.
68 of 138
Figure 16:
Lerchs-Grossman Pit Low Prices
69 of 138
Figure 17:
Lerchs-Grossman Pit Split Final Stage
70 of 138
Figure 18:
Lerchs-Grossman Pit Base Price
71 of 138
Table 17.3: Slope Design Parameters (From Knight Pisold)

Pit Design
Sector
Bench Face
Angle (deg)
Overall Slope
Angle (deg)
Operational Requirements
65
51*
70 m groundwater depressurization, D=0.85 for

good controlled production blasting
NE
70
52

SE
60
47

60
45

excellent controlled blasting, but stress relief will
cause additional disturbance, D=0.85 will be more
realistic. A maximum of 48 degree intervals
SW
60
47

70
47

NW
70
52

*Slope angle is controlled by kinematic stability considerations

Included in the detailed designs are the high wall access roads.
These are designed at a maximum grade of 10%. The road allowance has
been made for haulage lanes and lateral berms suitable to meet regulatory
road width requirements for the Euclid R260 haul trucks in the mine fleet.
The majority of the roads are design as two way but for the bottom 2
benches of the ramp in each push back this has been reduced to single
lane. This will be suitable since traffic is reduced as the work space
becomes restricted. Ramp access is not designed for the last 2 benches of
Stage 2 & 3 under the assumption that internal ramps can be used for the
majority of the material and then the ramp is excavated upon retreat with a
backhoe and smaller salvage equipment from the ancillary fleet. The details
of the ramp design parameters are given Table 17.4 .
Table 17.4: Road Design Parameters
# of
lanes
Width
Grade
Main Ramp
30m.
10%
Last 2 benches of Ramp
22.6m.
10%
None
NA
NA
Last 2 benches of Pit Phase
72 of 138
Subsequent to the pit design Knight Pisold reviewed the final P647
design with the combined designed overall slope angles and the high wall
ramps (see Appendix D). This review continues to indicate that the pit wall
slopes as designed, are aggressive but achievable with effective controlled
excavation techniques and groundwater depressurization with the exception
of the South slope. Because of the increased slope height with the current
design, the Factor of Safety (FoS) drops below 1.2 for a narrow sector of the
pit where the south pit wall cuts through the mountain peak. Design changes
will be required for the Feasibility Study to address this shortfall. Possible
solutions are to reduce the overall slope angle in this sector or to reduce the
overall slope height by excavating the top off the mountain peak. In the
worst case, reducing the slope by 100 m vertically, by removing the total
mountain peak will require 32 million tonnes of excavation. This would
increase the pit waste by 10%, which is within the accuracy of the Prefeasibility. A more thorough design will likely be able to reduce this extra
waste requirement. This design work will need to be addressed in the
Feasibility Study; however at this stage the Pre-feasibility pit design and
reserves are reasonably valid.
Phase Designs
The resultant 3 pit phase designs are given in Figures 20 to 22. The
upper benches in Phase 1 are shown as a separate Pre-strip phase which is
mined in the pre-production period to expose ore. This is shown in
Figure 19.
Grade Bins by NSR Cutoff
The reserve reports have the ore broken into grade bins for
production schedule optimization. These grade bins are based on the NSR
value of each block, which is calculated from the ore grades in each block,
the net smelter metal price, and the plant recovery for gold and copper. The
net smelter price is base on the base project parameter market price and
$US exchange rate, and offsite transportation, smelting, and refining
charges, etc. The NSR cutoff values ($/Tonne) used in the reserve reports
are set to report ore grade bins which cover full and incremental ore cost.
The incremental cutoffs are based on the fact that the LG only expands the
economic pit limit if the ore grade blocks can cover all costs (Decision
Blocks). Any blocks that are internal in the pit (Internal Blocks) will be mined
anyway to get to the decision blocks so they can still contribute positively to
cash flow if their metal content can cover costs downsteam of mining.
Different levels of downstream costs were considered to cover the overhead
costs and other high grade bins are also defined. The NSR cutoffs also
include a rehandle cost to allow for stockpiling. The Table 17.5 describes the
NSR cutoffs used in the reserve reports.
73 of 138
Figure 19:
Pre-Strip Phase (P601)
74 of 138
Figure 20:
Pit Phase 1 (P614)
75 of 138
Figure 21:
Pit Phase 2 (P624)
76 of 138
Figure 22:
Pit Phase 3 (P634)
77 of 138
Table 17.5: NSR Grade Cutoff Bins for Reserves

Grade Bin Label
Description
2.2
Ore/Waste
Cutoff
Material below this is wasted
2.2 to 2.38
Sub Grade
Cutoff
Requires improved prices or reduced costs at end

of mine life
2.38 to
3.38
Mill Cutoff
Covers Milling Costs
3.38 to
4.03
Internal Cutoff
Covers Milling and O/H costs
4.03 to 5.0
Mine Cutoff
Covers Mining Milling & O/H costs
> 5.0
High Grade
Phase Reserves
Pit reserves for these designs were calculated using the 3D block
model. The mining losses and dilution included in these reports are the
same as described in Section 16. The following tables include the material
by class, and Diluted grade values. Grades are based on the kriged value in
the Block Model and are in % for Copper and g/t for Gold. The HARD value
is the Bond Work Index (BWI) and is used in scheduling to vary the annual
ore production through the mill. Tables 17.6, 17.7, 17.8 and 17.9 list the
reserves for each mining phase.
78 of 138
Table 17.6: Reserves for Pre-Production Pit (P601)
Cutoff
In situ
Ore
(BCMS)
In situ
Ore
(Tonnes)
Run of
Mine
(Tonnes)
Diluted
NSR
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
90,840.
521,400.
239,580.
103,680.
30,000.
985,500.
245,906.
1,379,737.
632,398.
268,863.
76,920.
2,603,824.
236,743.
1,327,976.
605,476.
260,118.
73,074.
2,503,387.
2.276
2.873
3.648
4.380
5.408
3.235
Grades
CU
KRG
0.0604
0.0787
0.1025
0.1175
0.1390
0.0885
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
57,240.
356,101.
132,960.
100,680.
29,520.
676,501.
150,376.
952,520.
350,431.
262,046.
75,962.
1,791,335.
145,989.
929,950.
339,173.
253,642.
79,994.
1,748,748.
2.266
2.957
3.696
4.470
5.329
3.371
0.0 2.38
148,080.
396,281.
382,731.
Zone
Name
Zone
No.
PROV
PROB
Summary
Bench
Toe
1,825.0
1,810.0
1,795.0
1,780.0
1,765.0
1,750.0
1,735.0
Total
In Situ
Ore
(BCMS)
0.
0.
780.
64,140.
246,420.
509,880.
840,781.
1,662,001.
In Situ
Ore
(Tonnes)
0.
0.
2,122.
174,461.
665,792.
1,355,785.
2,196,999.
4,395,159.
Run of
Mine
(Tonnes)
0.
0.
5,148.
178,266.
649,729.
1,297,392.
2,121,601.
4,252,135.
Waste
Total
(Tonnes)
15322.
428686.
1,305,978.
2,161,512.
3,214,634.
3,925,457.
4,682,138.
15,733,726.
ROM
S/R
-1.00
-1.00
253.71
12.13
4.95
3.03
2.21
3.70
AU KRG
Hard
0.1658
0.2036
0.2522
0.3114
0.4092
0.2290
13.90
14.23
14.42
14.15
14.70
14.25
0.0506
0.0809
0.1037
0.1233
0.1366
0.0915
0.1873
0.2066
0.2522
0.3104
0.3515
0.2355
14.32
14.05
14.27
14.37
13.26
14.13
2.272
0.0567
0.1740
14.06
Diluted
NSR
-1.000
-1.000
2.787
2.635
2.735
3.244
3.545
3.291
Grades
CU
KRG
-1.0000
-1.0000
0.0634
0.0757
0.0788
0.0894
0.0945
0.0897
AU KRG
-1.0000
-1.0000
0.1186
0.1692
0.1804
0.2282
0.2550
0.2317
79 of 138
Hard
-1.00
-1.00
5.36
13.46
14.01
14.40
14.22
14.20
Table 17.7: Reserves for Phase 1 Pit (P614)
Cutoff
In situ
Ore
(BCMS)
In situ
Ore
(Tonnes)
Run of
Mine
(Tonnes)
Diluted
NSR
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
1,151,040.
8,361,240.
5,503,920.
9,423,780.
13,851,360.
38,291,340.
3,050,816.
22,229,232.
14,656,754.
25,117,896.
37,573,680.
102,628,376.
2,907,671.
21,161,620.
13,974,028.
23,882,362.
35,745,112.
97,670,792.
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
338,700.
3,033,540.
2,401,800.
3,736,440.
4,249,380.
13,759,860.
896,144.
8,051,396.
6,418,572.
10,059,201.
11,568,613.
36,993,924.
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
1,489,740.
11,394,780.
7,905,720.
13,160,220.
18,100,740.
52,051,200.
3,946,960.
30,280,628.
21,075,326.
35,177,096.
49,142,292.
139,622,304.
Zone
Name
Zone
No.
PROV
PROB
Summary
Bench
Toe
1,915.0
1,900.0
1,885.0
1,870.0
1,855.0
1,840.0
1,825.0
1,810.0
1,795.0
1,780.0
1,765.0
1,750.0
1,735.0
1,720.0
1,705.0
1,690.0
1,675.0
1,660.0
1,645.0
1,630.0
1,615.0
1,600.0
1,585.0
1,570.0
1,555.0
1,540.0
1,525.0
1,510.0
1,495.0
1,480.0
1,465.0
1,450.0
1,435.0
Total
In Situ
Ore
(BCMS)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
89,460.
445,500.
1,463,400.
1,862,460.
2,478,660.
3,823,080.
4,381,080.
4,736,100.
4,112,880.
3,892,740.
3,359,640.
3,418,080.
2,940,840.
2,857,800.
2,608,380.
2,491,140.
2,029,800.
1,809,120.
1,224,360.
1,057,380.
583,200.
386,100.
52,051,200.
In Situ
Ore
(Tonnes)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
239,162.
1,162,825.
3,785,270.
4,841,808.
6,465,274.
10,026,903.
11,556,439.
12,531,499.
10,944,303.
10,437,406.
9,041,581.
9,260,089.
8,078,360.
7,886,160.
7,169,952.
6,829,256.
5,534,012.
4,914,232.
3,350,283.
2,907,833.
1,592,004.
1,067,651.
139,622,304.
Run of
Mine
(Tonnes)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
252,260.
1,139,136.
3,638,288.
4,676,452.
6,171,765.
9,561,576.
10,998,975.
11,923,718.
10,414,314.
9,926,498.
8,597,332.
8,798,650.
7,674,441.
7,494,985.
6,814,557.
6,489,358.
5,257,312.
4,668,520.
3,182,768.
2,762,442.
1,512,404.
1,014,268.
132,970,032.
2.291
2.2905
3.702
4.518
5.995
4.526
Grades
CU
KRG
0.0696
0.0908
0.1185
0.1447
0.1932
0.1448
AU
KRG
0.1466
0.1800
0.2219
0.2714
0.3571
0.2722
14.36
14.69
14.46
14.43
14.46
14.50
868,563.
7,723,994.
6,124,266.
9,562,505.
11,019,937.
35,299,264.
2.296
2.917
3.708
4.519
5.767
4.363
0.0691
0.0889
0.1142
0.1437
0.1853
0.1377
0.1468
0.1848
0.2330
0.2743
0.3441
0.2662
14.19
14.34
14.35
14.32
14.30
14.32
3,776,234.
28,885,614.
20,098,294.
33,444,868.
46,765,048.
132,970,048.
2.292
2.908
3.704
4.518
5.941
4.483
0.0695
0.0903
0.1172
0.1444
0.1913
0.1429
0.1467
0.1813
0.2253
0.2722
0.3540
0.2706
14.32
14.59
14.43
14.40
14.42
14.45
Diluted
NSR
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
2.498
2.600
3.386
3.823
4.081
4.635
4.929
4.714
4.788
4.618
4.497
4.303
4.320
4.397
4.326
4.459
4.484
4.603
4.850
4.749
4.870
4.538
4.483
Grades
CU
KRG
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.0674
0.0670
0.0908
0.1038
0.1160
0.1428
0.1621
0.1562
0.1564
0.1520
0.1482
0.1376
0.1366
0.1378
0.1388
0.1439
0.1462
0.1474
0.1548
0.1595
0.1614
0.1477
0.1429
AU
KRG
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.1666
0.1919
0.2441
0.2705
0.2795
0.2912
0.2856
0.2701
0.2800
0.2675
0.2601
0.2593
0.2644
0.2717
0.2595
0.2655
0.2636
0.2771
0.2931
0.2677
0.2799
0.2675
0.2706
Hard
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
12.34
13.29
13.94
13.81
13.87
13.85
13.88
14.02
14.29
14.49
14.66
14.66
14.92
15.19
15.36
15.33
15.02
14.95
14.37
14.21
14.13
14.52
14.45
Waste
Total
(Tonnes)
10,374.
58,733.
156,408.
133,904.
239,879.
300,088.
495,242.
554,577.
872,180.
1,084,436.
1,656,514.
2,037,984.
3,073,877.
3,130,435.
3,503,775.
3,216,950.
3,367,406.
3,224,111.
3,674,882.
4,272,444.
5,134,228.
4,966,880.
4,457,956.
3,573,829.
3,223,883.
1,625,620.
1,134,493.
571,050.
425,044.
313,183.
176,952.
79,600.
53,382.
60,800,304.
ROM
S/R
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
8.08
2.70
0.86
0.75
0.52
0.35
0.29
0.31
0.41
0.52
0.58
0.51
0.47
0.43
0.24
0.17
0.11
0.09
0.10
0.06
0.05
0.05
0.46
80 of 138
Hard

Zone
Name
PROV
Zone
No.
1
PROB
Summary
Bench
Toe
1,810.0
1,795.0
1,780.0
1,765.0
1,750.0
1,735.0
1,720.0
1,705.0
1,690.0
1,675.0
1,660.0
1,645.0
1,630.0
1,615.0
1,600.0
1,585.0
1,570.0
1,555.0
1,540.0
1,525.0
1,510.0
1,495.0
1,480.0
1,465.0
1,450.0
1,435.0
1,420.0
1,405.0
1,390.0
1,375.0
1,360.0
1,345.0
1,330.0
1,315.0
1,300.0
1,285.0
1,270.0
Total
In Situ
Ore
(BCMS)
0.
0.
0.
0.
0.
0.
495,023.
945,840.
1,543,560.
1,866,000.
2,070,180.
2,245,860.
2,590,980.
2,597,700.
2,732,760.
2,877,540.
3,552,060.
3,780,060.
3,708,240.
3,828,060.
3,815,040.
3,853,260.
3,863,220.
3,933,600.
3,948,960.
3,806,880.
3,331,860.
2,786,880.
2,410,080.
2,228,340.
1,832,349.
1,699,500.
1,365,780.
1,174,200.
791,280.
600,720.
362,400.
76,638,216
Cutoff
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
In situ
Ore
(BCMS)
1,840,560.
12,158,041.
6,395,820.
10,825,404.
21,917,108.
53,136,932.
In situ
Ore
(Tonnes)
4,858,974.
32,365,262.
17,037,772.
28,724,876.
57,991,944.
140,978,816.
Run of
Mine
(Tonnes)
4,622,290.
30,795,542.
16,209,376.
27,321,516.
55,159,684.
134,108,400.
Diluted
NSR
2.284
2.864
3.700
4.528
6.906
4.947
Grades
CU KRG
0.0608
0.0780
0.1083
0.1416
0.2197
0.1523
AU KRG
0.1675
0.2056
0.2472
0.2804
0.4183
0.3120
Hard
12.87
12.80
12.81
12.83
13.79
13.22
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
1,094,100.
5,155,500.
2,102,220.
4,215,780.
10,933,680.
23,501,280.
2,893,205.
13,722,186.
5,656,791.
11,245,503.
28,903,346.
62,421,032.
2,762,639.
13,064,263.
5,377,084.
10,689,494.
27,511,422.
59,404,904.
2.284
2.840
3.699
4.544
7.031
5.139
0.0588
0.0753
0.1134
0.1429
0.2236
0.1588
0.1720
0.2088
0.2349
0.2797
0.4255
0.3225
13.17
12.97
13.06
12.84
13.90
13.40
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
2,934,660.
17,313,540.
8,498,040.
15,041,184.
32,850,788.
76,638,208.
7,752,179.
46,087,448.
22,694,564.
39,970,380.
86,895,288.
203,399,840.
7,384,929.
43,859,804.
21,586,460.
38,011,008.
82,671,104.
193,513,296.
2.284
2.857
3.700
4.532
6.948
5.006
0.0600
0.0772
0.1096
0.1420
0.2210
0.1543
0.1692
0.2065
0.2441
0.2802
0.4207
0.3152
12.99
12.85
12.87
12.83
13.83
13.27
Grades
CU KRG
AU KRG
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.0840
0.0774
0.0820
0.0875
0.0892
0.0901
0.0938
0.0966
0.1024
0.1025
0.0993
0.1106
0.1244
0.1379
0.1462
0.1520
0.1618
0.1646
0.1749
0.1846
0.1786
0.1904
0.2003
0.2120
0.2344
0.2609
0.3024
0.3255
0.3373
0.3600
0.3982
0.1543
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.2302
0.2261
0.2389
0.2369
0.2427
0.2344
0.2401
0.2343
0.2341
0.2280
0.2480
0.2591
0.2516
0.2661
0.2848
0.3028
0.3121
0.3208
0.3354
0.3371
0.3347
0.3550
0.3714
0.3827
0.4413
0.4930
0.5468
0.6393
0.6934
0.7652
0.8328
0.3152
In Situ
Ore
(Tonnes)
0.
0.
0.
0.
0.
0.
1,287,288.
2,454,181.
3,996,980.
4,858,117.
5,379,598.
5,819,771.
6,730,563.
6,735,938.
7,109,514.
7,609,321.
9,464,578.
10,078,378.
9,925,131.
10,273,842.
10,265,320.
10,414,636.
10,486,078.
10,624,618.
10,718,325.
10,190,607.
8,868,027.
7,349,307.
6,312,039.
5,807,128.
4,757,936.
4,405,132.
3,658,048.
3,141,147.
2,109,049.
1,596,365.
972,900.
203,399,888.
Run of
Mine
(Tonnes)
0.
0.
0.
0.
0.
0.
1,233,886.
2,340,869.
3,806,527.
4,623,041.
5,110,619.
5,528,783.
6,398,733.
6,405,404.
6,761,868.
7,239,816.
8,997,611.
9,586,986.
9,444,534.
9,769,545.
9,759,884.
9,904,866.
9,968,036.
10,099,651.
10,196,503.
9,692,038.
8,438,713.
6,999,068.
6,015,230.
5,538,696.
4,535,699.
4,200,535.
3,487,674.
2,984,090.
2,003,596.
1,516,546.
924,255.
193,513,296.
Waste
Total
(Tonnes)
9558.
16058.
60035.
69724.
109605.
133539.
4,774,017.
5,635,949.
6,918,189.
8,120,304.
8,617,727.
8,944,942.
8,566,574.
9,176,936.
9,332,374.
9,878,626.
8,891,560.
9,126,975.
8,345,110.
7,497,488.
6,472,212.
5,827,650.
4,825,716.
4,067,339.
2,750,240.
2,624,124.
2,318,326.
2,330,872.
1,727,342.
1,496,228.
1,096,720.
773,784.
259,177.
161,571.
105,452.
79,818.
48,645.
151,190,512.
ROM
S/R
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
3.87
2.41
1.82
1.76
1.69
1.62
1.34
1.43
1.38
1.36
0.99
0.95
0.88
0.77
0.66
0.59
0.48
0.40
0.27
0.27
0.27
0.33
0.29
0.27
0.24
0.18
0.07
0.05
0.05
0.05
0.05
0.78
Diluted
NSR
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
3.159
3.009
3.179
3.260
3.327
3.284
3.392
3.399
3.500
3.457
3.546
3.826
4.016
4.359
4.640
4.873
5.112
5.224
5.512
5.697
5.575
5.934
6.231
6.527
7.347
8.194
9.326
10.362
10.963
11.880
13.043
5.006
81 of 138
Hard
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
14.12
13.64
13.14
12.64
12.41
12.31
12.28
12.25
12.11
12.08
12.48
12.85
12.98
13.06
13.24
13.46
13.46
13.27
13.48
13.85
13.96
14.08
14.38
14.29
14.28
14.16
14.31
14.65
14.57
14.54
14.50
13.27

Zone
Name
PROV
Zone
No.
1
PROB
Summary
Bench
Toe
1990.0
1975.0
1960.0
1945.0
1930.0
1915.0
1900.0
1885.0
1870.0
1855.0
1840.0
1825.0
1810.0
1795.0
1780.0
1765.0
1750.0
1735.0
1720.0
1705.0
1690.0
1675.0
1660.0
1645.0
1630.0
1615.0
1600.0
1585.0
1570.0
1555.0
1540.0
1525.0
1510.0
1495.0
1480.0
1465.0
1450.0
1435.0
1420.0
1405.0
In Situ
Ore
(BCMS)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
1,740.
6,540.
3,900.
6,240.
109,080.
53,760.
65,760.
115,980.
276,300.
323,400.
332,220.
367,800.
483,840.
489,900.
612,240.
811,680.
981,180.
1,020,240.
1,167,600.
1,287,000.
1,350,540.
1,545,660.
1,547,700.
1,722,060.
Cutoff
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
In situ
Ore
(BCMS)
649,560.
3,219,300.
1,718,700.
2,849,580.
10,616,931.
19,054,072.
In situ
Ore
(Tonnes)
1,729,989.
8,555,371.
4,572,714.
7,468,683.
28,251,538.
50,578,296.
Run of
Mine
(Tonnes)
1,643,489.
8,130,735.
4,351,908.
7,101,512.
26,881,244.
48,108,888.
Diluted
NSR
2.277
2.839
3.692
4.522
8.599
6.364
Grades
CU KRG
0.0729
0.0977
0.1313
0.1608
0.2817
0.2120
AU KRG
0.1371
0.1543
0.1896
0.2328
0.5005
0.3619
Hard
12.77
12.83
12.98
12.89
13.54
13.24
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
1,157,400.
3,166,020.
1,701,480.
2,039,940.
6,006,480.
14,071,320.
3,055,086.
8,312,042.
4,410,786.
5,367,272.
16,069,363.
37,214,548.
2,913,293.
7,902,706.
4,190,247.
5,098,908.
15,294,082.
35,399,236.
2.274
2.796
3.690
4.521
8.881
5.736
0.0635
0.0908
0.1293
0.1620
0.2862
0.1878
0.1593
0.1652
0.1950
0.2301
0.5285
0.3345
13.17
12.96
12.58
12.89
13.69
13.24
0.0 2.38
2.38 3.38
3.38 4.03
4.03 5.00
>= 5.00
Totals:
1,806,960.
6,385,320.
3,420,180.
4,889,520.
16,623,411.
33,125,392.
4,785,074.
16,867,414.
8,983,500.
12,835,954.
44,320,900.
87,792,840.
4,556,782.
16,033,441.
8,542,155
12,200,420.
42,175,328.
83,508,120.
2.275
2.818
3.691
4.521
8.701
6.098
0.0669
0.0943
0.1303
0.1613
0.2833
0.2017
0.1513
0.1596
0.1923
0.2317
0.5107
0.3503
13.03
12.89
12.78
12.89
13.59
13.24
Grades
CU KRG
AU KRG
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.0456
0.0454
0.0516
0.0480
0.0405
0.0454
0.0675
0.0664
0.0683
0.0708
0.0716
0.0758
0.0702
0.0764
0.1011
0.1177
0.1338
0.1274
0.1406
0.1384
0.1415
0.1429
0.1537
0.1617
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
-1.0000
0.1668
0.1812
0.1894
0.1891
0.2293
0.2072
0.1737
0.1793
0.1779
0.1761
0.1765
0.1858
0.1805
0.1671
0.1700
0.2050
0.2179
0.2162
0.2278
0.2311
0.2240
0.2230
0.2330
0.2386
In Situ
Ore
(Tonnes)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
4,733.
17,789.
10,608.
16,960.
281,395.
141,239.
169,819.
303,741.
715,895.
843,954.
865,839.
964,956.
1,289,209.
1,298,678.
1,589,096.
2,097,879.
2,524,732.
2,640,606.
3,039,297.
3,333,148.
3,522,692.
4,023,320.
4,042,845.
4,525,321.
Run of
Mine
(Tonnes)
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
6,062.
20,031.
11,644.
16,112.
267,326.
137,309.
161,328.
288,554.
680,101.
801,757.
822,547.
916,709.
1,224,749.
1,233,744.
1,509,641.
1,992,985.
2,398,496.
2,510,143.
2,887,333.
3,166,490.
3,348,120.
3,823,718.
3,840,704.
4,303,752.
Waste
Total
(Tonnes)
38,144.
129,595.
140,927.
189,286.
182,104.
375,379.
500,825.
927,755.
863,276.
1,029,580.
1,027,984.
1,248,710.
1,321,931.
1,549,853.
1,599,132.
1,717,304.
1,798,542.
1,961,608.
2,860,172.
3,306,100.
3,619,522.
4,527,137.
4,609,030.
4,723,178.
4,496,968.
4,706,631.
4,913,571.
5,040,604.
4,844,483.
4,995,952.
4,698,890.
4,291,068.
3,835,130.
3,832,645.
3,375,074.
3,088,386.
2,697,732.
2,133,581.
1,705,926.
1,756,262.
ROM
S/R
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
296.69
97.93
245.64
205.20
13.54
32.97
28.57
16.37
6.61
5.87
5.97
5.50
3.96
4.05
3.11
2.15
1.60
1.53
1.17
0.98
0.81
0.56
0.44
0.41
Diluted
NSR
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
-1.000
2.200
2.232
2.386
2.211
2.371
2.317
2.447
2.469
2.490
2.521
2.538
2.680
2.543
2.555
3.012
3.558
3.934
3.811
4.126
4.111
4.116
4.133
4.396
4.578
82 of 138
Hard
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
10.16
11.56
11.86
13.72
13.70
13.40
13.90
13.38
13.63
13.54
13.99
13.61
13.15
13.09
12.87
12.88
12.78
12.54
12.53
12.53
12.55
12.49
12.26
12.41
Bench
Toe
1390.0
1375.0
1360.0
1345.0
1330.0
1315.0
1300.0
1285.0
1270.0
1255.0
1240.0
1225.0
1210.0
1195.0
1180.0
1165.0
Total
In Situ
Ore
(BCMS)
1,762,440.
1,783,379.
1,724,031.
1,686,000.
1,562,640.
1,581,120.
1,527,660.
1,481,820.
1,229,040.
1,347,780.
963,720.
753,540.
484,980.
380,280.
112,320.
62,280.
33,125,392.
(c)
In Situ
Ore
(Tonnes)
4,645,725.
4,750,944.
4,632,754.
4,506,998.
4,206,172.
4,304,193.
4,104,676.
3,971,514.
3,301,376.
3,622,258.
2,607,249.
2,050,034.
1,320,256.
1,035,709.
305,762.
163,472.
87,792,840.
Run of
Mine
(Tonnes)
4,421,268.
4,519,660.
4,402,684.
4,286,347.
4,006,825.
4,101,512.
3,907,272.
3,776,070.
3,142,572.
3,447,409.
2,476,886.
1,956,928.
1,263,639.
983,924.
290,474.
155,299.
83,508,112.
Waste
Total
(Tonnes)
1,325,403.
1,110,662.
957,892.
932,493.
756,573.
438,931.
229,999.
216,457.
164,271.
191,753.
169,731.
157,767.
65,798.
75,626.
18,799.
27,935.
107,500,072.
ROM
S/R
0.30
0.25
0.22
0.22
0.19
0.11
0.06
0.06
0.05
0.06
0.07
0.08
0.05
0.08
0.06
0.18
1.29
Diluted
NSR
4.580
4.819
5.363
5.618
6.308
7.283
8.489
9.140
10.745
12.741
13.436
11.845
8.760
8.806
9.856
9.424
6.098
Grades
CU KRG
AU KRG
0.1596
0.1710
0.1920
0.1969
0.2219
0.2545
0.2887
0.2974
0.3290
0.3838
0.4058
0.3627
0.2811
0.2882
0.3291
0.3098
0.2017
0.2435
0.2489
0.2733
0.2959
0.3284
0.3824
0.4675
0.5377
0.6819
0.8242
0.8686
0.7483
0.5204
0.5149
0.5605
0.5478
0.3503
Production Schedule
Basic Criteria
The production schedule for Kemess North is run from the Pit reserve
files listed above. All production will be from the owners fleet except for
minor tonnages for the small initial benches of each pushback. These will
require smaller specialized equipment to operate on the steep original
ground at the top benches. The major mining equipment from Kemess
South will be transferred to Kemess North as ore and waste production is
reduced in Kemess South. The full integrated Kemess South, Kemess North
production schedule is included in Section 22C. To meet the higher strip
ratio requirements additional haul trucks will be purchased. The production
equipment fleet used in the Life of Mine Production schedule is listed in
Table 17.10. This schedule is based on the annual Mill Feed ore production
listed in Table 17.11. The ore targets are adjusted each year to reflect the
ore hardness and anticipated SAG mill through put according to the HARD
(BWI) value in the Pit Reserves. The mill feed in some years includes
material from stockpiles and Mined ore in some years is sent to stockpile.
The full Kemess North production schedule is given in Section 22C as part
of the Integrated Kemess South/Kemess North Schedule .
83 of 138
Hard
12.39
12.65
12.92
13.09
13.25
14.42
14.70
14.55
14.44
14.31
14.26
14.17
13.68
13.44
13.36
13.30
13.24
Table 17.10 Major Mine Equipment Fleet

Unit
Shovels
Drills
Haul Trucks
# of
Units
Location
P&H 2800
Moves Kemess South to Kemess North 4 th

Qtr 2006
P&H 2300
Moves Kemess South to Kemess North

early 2010
Hit 5500

start of 2006
P&H XP100

start of 2010
IR Viper

start of 2006
Euclid R260
13
Existing Fleet in Kemess South start

of 2004
Add 3 new trucks in 2005 for

Kemess South
Move 5 trucks to Kemess North start

of 2006
Add 4 new trucks start of 2006 for

Kemess North
Move 7 trucks to Kemess North 4 th

Qtr 2006
Add 1 new trucks start of 2016 for

Kemess North
Table 17.11 Annual ROM Mill Feed

2004
2005
Q123/06
Q4/06
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
19,072
19,115
14,949
5,248
29,942
31,003
30,961
28,784
29,489
32,010
36,490
35,510
33,610
30,710
Total
Mill
Feed
ktonnes
Cu
0.217
0.224
0.265
0.195
0.159
0.182
0.169
0.144
0.119
0.120
0.122
0.133
0.162
0.177
Au
g/t
0.691
0.669
0.777
0.544
0.440
0.451
0.409
0.280
0.260
0.256
0.256
0.270
0.314
0.333
84 of 138
18.
Interpretation and Conclusions
GR Tech has used the information provided by Northgate and the

work of other Technical Specialists in this evaluation of the Kemess North
Mineral Project to determine the stated Reserves and expected financial
returns. The information can be categorized as:
Kemess Operating cost and performance Information;
Kemess North Geology, Mineralization, and Reserves; and
Future estimates of commodity prices, exchange rates, and energy,

supply, and services costs.
The operating costs and performance information from the current

Kemess operations adds a considerable level of assurance to the
performance and cost estimates used in this evaluation.
This leads to the following list of Conclusions:
Geology The geology of the project is well described based on the

work of previous owners, knowledge of similar mineralized
copper/gold occurrences in the area and the exploration work
Northgate has done since 2000. The knowledge of the deposit
geology has been well integrated with the local mining practice and
plant performance at the current Kemess South operations. GR Tech
confirms that this combined information has been used to an
appropriate Engineering Standard in the Geologic Resource
modelling for Kemess North.
Drill hole data base The Resource and Reserve Statements are
supported by 198 drill holes including 77,210 meters of drilling with
40,237 Copper assays and 39,821 Gold assays. Only drill hole
information has been used in quantifying the Resource and Reserve
base because of the depth of the mineralized zone. The assay work
has been done by reputable Canadian labs and a QA/QC program
has been in place for the majority of the drilling (Since 2000). GR
Tech has verified the assay data base by checking 35 % of the holes
used in the Geologic Model. Down-hole survey discrepancies for 18
holes were reported by Northgate and a calculated hole trend was
used for these holes. GR Tech confirms that the drill hole and assay
data base used in the 3-D Geology Model is to an acceptable industry
standard for use in the Resource and Reserve quantification.
Geology Model The 3 -D Geology Block Model for the Kemess

North Mineralized zone was built by modelling specialists at Mintec
Inc. using the Drill hole and assay database, Geology interpretations
from Northgates Geologists and a Geo-Statistical evaluation. The
Geology interpretation was reviewed by GR Tech and the geo-
85 of 138
statistics analysis, grade interpolation, and mineral quantity

calculations were done by Abdullah Arik of Mintec a Certified GeoStatistician and a Qualified Person. GR Tech confirms that this
method of modelling is appropriate for the Kemess North deposit and
that resultant Resource and Reserve quantities are to an acceptable
industry standard.
Economic Pit Design The ultimate economic pit limit is based on the
Lerchs-Grossman (LG) pit optimization routine with time value
discounting assigned to the blocks. The price, cost, and recovery
inputs to the LG are reasonable and overall slope angles have been
deemed to be adequate by Geotechnical specialists, provided proper
wall control measures are taken during operations. The time
discounting of the blocks is an important aspect since parts of the
mineralized zone are deep. Sensitivity analysis a round the Base
Price parameters for the Project show little upside potential and
considerable downside risk. If prices are dropped to 85% of the target
level the lower parts of the ore body are not economic. The LG pit
optimization algorithm is an industry standard for evaluation of
economic pit limits and the method used to time discount the blocks
adequately addresses the economic impact of the deep
Mineralization.
Detailed Pit Design The Detailed pit design includes a Pre-stripping

phase plus three pus hbacks to mine out to the ultimate pit limit
determined by the LG. These pushbacks have been designed
following the Geo-technical consultants design criteria. The final pit
limit design (P634) has been reviewed by Knight Pisold. A sector of
the South pit wall has been found to have an inappropriate Factor of
Safety and will need to be redesign for the Feasibility Study. The
effect of this redesign will be limited but will increase the waste
mining costs. The magnitude is within the accuracy of the PreFeasibility Study and is not likely to affect the economic viability of the
pit design. This assumption will need to be confirmed in the
Feasibility Study.
Milling Metallurgical test work was performed on drill hole samples

taken from within or in close proximity to the pit limits. The mill feed
from Kemess North will be similar to Kemess South Hypogene. Hatch
has confirmed that the test work on the met samples is representative
and accurate and the resultant process performance design criteria
for gold and copper recovery and plant throughput are reasonable for
project planning purposes.
Production Schedule The production schedule is based on the

detailed pit designs and the specified mining equipment to meet the
ore production targets in the plan. Mining production levels are varied
year to year to defer waste cost into the future. While this makes
86 of 138
operations management difficult it is possible. GR Tech confirms that

this operating schedule is achievable with the equipment as specified.
Capital and Operati ng Cost estimates The basis of most of the

operating costs are the current operations at Kemess South. The
capital cost of much of the existing equipment types also comes from
Kemess South experience. As such, these estimates have a high
level of assurance. Capital estimates for much of the facilities and
infrastructure for the Kemess North area have been provided by
others to a Feasibility level of accuracy as well. However additional
geo-technical information and condemnation drilling is still needed for
the underground conveyor way. Until these are completed, the costs
are only submitted as Pre-feasibility accuracy. Other aspects of the
mining costs such as truck cycle times, waste dumping details, and
capital and replacement costs for the mining equipment are also only
at Pre-feasibility study level. For these reasons the current Kemess
North project cost estimates are being called a Pre-Feasibility Study
estimate. Design revisions will increase the waste mining costs and
the subsequent cost of releasing ore.
Environmental and Permitting The Environmental planning for the

project is well advanced. The operating criteria and costs to meet
sound environmental operating practices and to meet or exceed
regulatory requirements have been included in the Kemess North
plan. With this the required operating permits should be granted.
The future estimates of metal prices, the US exchange rate, and

future cost for goods and services beyond the control of Northgate are as
stated. Accurate prediction of these future financial parameters is beyond
GR Techs capability. The values used in this evaluation are not unreasonable.
87 of 138
19.
Recommendations
The Engineering and Design work should continue on the Kemess

North Mineral Project to upgrade the Revised Pre-Feasibility Study to a
Feasibility Study. After the permits are in hand and a production decision
has been made based on the Feasibility Study, additional Engineering and
design will be needed to bring the design basis up to construction level and
to provide detailed operating information for mining and milling operation for
the first several years of operation.
(a)
For Feasibility
Upgrade the estimate for the underground ore conveyor from Kemess
North to the existing mill. This will require drilling for condemnation
and geotechnical analysis.
Run detailed truck haul simulations for the truck haul cycles for ore
and waste hauls.
Obtain vendor budgetary quotes for a wall control drill and for
ongoing maintenance and repair parts and rebuild costs for the
existing mining fleet.
Re-design details of the pre-stripping requirements and seek

contractor budgetary quotes.
If possible re-survey with the Flex-IT tool, as many of the 18 holes

with suspect down hole surveys, as possible.
(b)
For Construction and Detailed design
Twin some of the deep holes for detailed variography. If possible

locate some of these holes to test any of the 18 holes with suspect
surveys which could not be re-surveyed.
Re-design the final pit wall to a lower slope height on the South wall
as recommended by Knight Pisold. Because of aggressive slope
angles, the final pit design and the High Wall control techniques will
need a thorough Geotechnical review by the various Technical
experts mentioned in this report.
Re-design the pit phases to include details for pit services such as
power and de-watering, and detailed slope features for the Broken
zone.
Assay existing and future drill holes for Silver.
88 of 138
20.
References
Amtel Ltd., Characterisation of Copper and Gold occurrences in Composites

of the Kemess North Deposit, Summer 2002
Amtel Ltd., Gold Deportment in Copper Cleaner Scavenger Tailings,
May 2003.
Amtel Ltd., Kemess North Preliminary Metallurgical Testing, June 2001
Abdullah Arik, Geostatistical analysis and interpolation methodology
Kemess North, March 2004
Blanchflower, J.D., Geological, Geochemical and Geophysical Report on the
Kemess Property, Omineca Mining Division, British Columbia; Private
Report Prepared for El Condor Resources Ltd., 1986
Bray, A.D., Lapeare, B., 2000 Exploration Program Kemess Property:
Diamond Drill and Geophysical Report, Assessment Report, February 2001
Bray, A.D., 2001 Exploration Program Kemess Property: Diamond Drilling
Report, Assessment Report, January 2002
Bowen, B.K., Copeland, D.J., Rebagliati, C.M, Kemess North Project, El
Condor Resources Ltd., 1991 Exploration Report and Delineation Drilling
Program on the Kemess North Property, Assessment Report, May 1992
Cann, R.M., Summary and Review of 1987 and 1988 Exploration Results
Kemess Property; private report for El Condor Resources, November 1988
Copeland, D.J., Geological and Geochemical Assessment Report 1990
Exploration Program Kemess Property, Assessment Report, June 1991
Copeland, D.J., Rebagliati, C.M., Ronning, P.A., Kemess Property Northern
Claims, Summary Report 1990 Exploration Program, Assessment Report,
April 1990
Copeland, D.J., Blanchflower, J.D., Summary Report on the 1989
Exploration Program Kemess North Property, June 1990
Diakow, L.J., Panteleyev, A., Schroeter, T.G., Geology of the Early Jurassic
Toodoggone Formation and Gold Silver Deposits in the Toodoggone River
Map Area, Northern British Columbia, B.C. Geological Survey Branch
Bulletin 86, 1993
Diakow, L.J., Panteleyev, A., Schroeter, T.G., Jurassic Epithermal Deposits
in the Toodoggone River Area, Northern British Columbia, Economic
Geology, Volume 86, pp 529-554, 1991
89 of 138
Diakow, L.J., Geology of the Southern Toodoggone River and Northern

McConnell Creek Map Areas, North-Central British Columbia; BCEM, Map
2001-1, 1:50000 Scale
Edmunds, F.C., LaPeare, B., 2002 Exploration Program Kemess Property:
Kemess North Diamond Drill Program, Assessment Report 27083,
January 2003
Gao Myles J. Kemess North and Nugget Geostatistical Review and
Resource Estimates March 2003
Giroux, G.H., Preliminary Statistical Evaluation of the Kemess North GoldCopper Deposit; private report prepared for El Condor Resources Ltd.,
June 1992
Gower, S.C., Geological and Geochemical Report on the Kemess Property,
Omineca Mining Division, British Columbia; private report prepared for El
Condor Resources Ltd., 1988
Hatch, Draft Revised Pre-Feasibility Study, May 2004
Klohn Crippen, Kemess North, Tailings and Waste Rock Management. 2003
Konigsmann, K., Summary Report on Process Development Treatment of
Ores from the Kemess North Deposit. 2003
Lakefield, An Update of Metallurgical Testing of Kemess Ores,
June 10, 2003
Lloyd, J., An Assessment Report on an Induced Polarization Survey on the
Kemess Property Omineca Mining Division British Columbia;
December 1991
Massey, N.D.W., MacIntyre, D.G. and Desjardins, P.J. Digital Map of British
Columbia: Tile NO9 North Central B.C., B.C. Ministry of Energy and Mines,
Geofile 2003-18, - BC Geological Survey
Monger, J.W.H., The Triassic Takla Group in McConnell Creek Map Area,
North Central British Columbia, Geological Survey of Canada Paper,
76-29, 1977
MRDI, Technical Report, Kemess Mine Review, B.C. December 2001
MRDI, Addendum to the Technical Report, Kemess Mine Review, B.C.
February 2002
Norwest, Kemess North Project 2003 Pre-Feasibility Study, May 2003
90 of 138
Northgate Exploration Limited 2003 Annual Report, April 2004

Rebagliati, C.M., Bowen, B.K, Copeland, D.J., Niosi, D.W.A., Kemess South
and North Porphyry Gold-Copper Deposits Northern British Columbia, in
Porphyry Deposits of the Northwestern Cordillera of North America, CIM
Special Volume 46, pp 377-397, 1995
Rebagliati, C.M., Kemess North Project, El Condor Resources Ltd., 1992
Exploration Program on the Kemess North Property, Assessment Report,
March 1993
Rebagliati, C.M., Kemess North Project, An Exploration Proposal to
Increase the Mineable Reserves at the Kemess North Deposit by Diamond
Drilling, March 1993
91 of 138
21.
Statement of Qualifications
James H. Gray PEng
As an author of this Technical Report on the Kemess North Project

for Northgate Exploration Limited (the Issuer) dated 4 June 2004, I hereby
make the following statements:
My name is James H Gray and I am a Principal of GR Technical
Services Ltd. My office address is 3 Sunwood Park SE Calgary Alberta T2X
2V8.
I fulfill the requirements of a Qualified Person as specified in National
Instrument 43-101 of the Canadian Securities Administrators. I have
received the following degree in Mining Engineering:
Bachelor of Applied Science from the University of British Columbia,
Vancouver, 1975.
I am a member in good standing of the Association of Professional
Engineers and Geoscientists of the Province of British Columbia (11919).
Engineers, Geologists and Geophysicists of Alberta (M47177).
I am a member of the Canadian Institute of Mining and Metallurgy.
The Technical Report is based on several site visits, my personal
review of technical reports and data provided by the Issuer, on discussions
with the project and operations engineers, and on information available from
public files.
I have been practicing as a Professional Engineer for over 25 years
with relevant experience for the Technical Report including:
1978 to 1989, mine site engineering, operations and management
positions, costing, evaluating new mineral projects and development
properties.
1989 to present, mine engineering consultant work on assessment
and feasibility studies of numerous coal, base metal, industrial mineral, and
precious metal deposits in Canada, United States, Mexico, Chile, Argentina,
Peru, Turkey, Iran, and Australia.
Dated this 4th day of June 2004, in Calgary Alberta.
_____________________
J.H. Gray PEng
92 of 138
93 of 138
Robert J. Morris PGeo

My name is Robert J. Morris and I am an associate of GR Technical
Services Ltd. My office address is 6243 Kubinec Road, Fernie, BC V0B
1M1.
received the following degrees in Geology:
Bachelor of Science from the University of British Columbia,
Vancouver, 1973.
Master of Science, Mineral Exploration, from Queens University,
Kingston, Ontario, 1978.
Engineers and Geoscientists of the Province of British Columbia (18301).
Engineers, Geologists and Geophysicists of Alberta (M75480).
The Technical Report is based on a site visit, my personal review of
technical reports provided by the Issuer, on discussions with the exploration
geologist for the Issuer, and on information available from public files.
I have been practicing as a professional geologist for over 30 years
Since 1992, work on assessment and feasibility studies of numerous
porphyry gold/copper deposits in British Columbia, Chile and Central
America.
Dated this 4th day of June 2004, in Fernie, British Columbia.
_____________________
R.J. Morris, MSc, PGeo
94 of 138
95 of 138
Kenneth W. Major; PEng

My name is Ken Major and I am Manager, Crushing and Milling
Systems for Hatch Associates. My office address Suite 200 1550 Alberni
Street, Vancouver, BC, V6G 1A5.
received the following degree in Metallurgical Engineering:
Bachelor of Engineering from McGill University, Montreal, 1976.
Engineers and Geoscientists o f the Province of British Columbia (13149).
The Technical Report is based on several site visits, my personal
with the project and operations engineers, and on information available from
public files.
I have been practicing as a Professional Engineer for over 25 years
1976 to 1986, mine site engineering, operations and management
positions.
1986 to present, engineering consultant work on metallurgical test
programs, feasibility studies and detailed engineering of numerous base
metal, and precious metal projects in Canada, United States, Mexico, Chile,
Peru, Papua New Guinea, Portugal, Brazil, and Australia.
Dated this 4th day of June 2004, in Vancouver, BC.
_____________________
K.W. Major; PEng
96 of 138
97 of 138
Abdullah Arik
My name is Abdullah Arik and I am an employee of Mintec Inc.
working on contract for GR Technical Services Ltd. My office address is
3544 East Ft. Lowell Road, Tucson, AZ USA 85716-1706.
received the following degrees in Mining:
Bachelor of Science Mining Engineering from the Middle East
Technical University of Ankara, Turkey, 1976.
Master of Science, Mining/Geostatistics, from the University of
Arizona, Tucson Arizona, 1982.
I am a member in good standing of the Australian Institute of Mining
and Metallurgy.
I am a member in good standing of the North American Council of
Geostatisticians.
I am a member of the Society for Mining, Metallurgy, and Exploration
a Division of the AIME.
The Technical Report is not based on a site visit but on my personal
with the exploration geologist, and the Project Geologist (RJ Morris).
I have been practicing as a Geostatistician for over 20 years with
relevant experience for the Technical Report including:
Since 1982, work on mine evaluations and feasibility studies of
numerous mineral projects and development properties in North America,
South America, Central America, and Australia.
Dated this 4th day of June 2004, in Tucson, Arizona, USA.
_____________________
Abdullah Arik
98 of 138
99 of 138
22.
Additional Information
(a)
Current Kemess Mining Operations
The Kemess Mine currently operates from one open pit. The pit is
mined on 15 m benches and is split into three phases. The final wall is
designed with a combined single - and double -bench configuration. The wall
angles range from 40-51 degrees and the pit ramp widths are 35 m and
exceed the design width as defined by the Health, Safety and Reclamation
Code for Mines in British Columbia for the equipment utilized at the
operation. All roads have been designed for a maximum grade of 10%.
Major mining equipment includes the following:
13 Euclid R260 haulage trucks;
1 P&H 2800XPB rope shovel;
1 P&H 2300XPB rope shovel;
1 Hitachi EX5500 hydraulic mining shovel;
1 LeTourneau-L-1400 front-end loader;
Ingersol Rand 351 Pit Viper blasthole drill; and
I P&H XP 100 electric blasthole drill.
The ore is hauled directly to a gyratory crusher and coarse ore

stockpile area south of the pit. The crushed ore is fed to two semiautogenous (SAG) grinding mills, followed by two ball mills and one regrind
mill. Flotation circuits are then used to produce a gold-copper-silver
concentrate; a process mill flow sheet is included in Appendix B.
Mill tailings are pumped through two 7,500 m long, 66 cm diameter
lines to a tailings sand plant which extracts a clean coarse sand fraction
from the tailings for use in the construction of the tailings dam. The
remaining tailings are deposited behind the dam. Tailings dam construction
is an ongoing project over the life of the mine, with monitoring and design
work being performed by AMEC E&E from Burnaby, BC.
The mines final product is a clean gold-copper concentrate
containing approximately 24% copper 60 grams per tonne of gold and 90
grams per tonne of silver. This concentrate is trucked in bulk approximately
100 of 138
380 km via gravel road to a trans-loading facility located in Mackenzie, BC

next to a rail spur. The concentrate is then loaded into covered gondola
railcars and transported to Norandas Horne smelter in Rouyn-Noranda,
Quebec.
Engineers at the Kemess South mine prepared a life of mine
production and mill operating plan that is designed to maximize the value of
the remaining ore reserves in the Kemess South pit. An economic cut-off
grade (Net smelter return cost to extract a block of ore = positive profit) is
used to establish the mineable reserves using a block model of the deposit
and mine equipment scheduling programs are used to schedule ore and
waste production d uring each year. Mill throughput is determined based on
ore hardness models and historic grade recovery curves are applied to
determine gold, copper and silver production in concentrate for each year.
At January 1, 2004 there were sufficient proven reserves at the
Kemess South deposit to sustain mining and milling activities until the end of
2008. During this period mill throughput will average approximately 19.25
million tonnes per annum and annual gold and copper production in
concentrate will average 300,000 ounces and 75 million pounds
respectively. 52 million tonnes of resources also exist at Kemess South and
the productive life of the pit may be extended depending on metal prices. A
summary of reserves and resources at Kemess South as if December 31,
2003 is shown in Table 22.1 .
Table 22.1: Kemess South Reserves and Resources
Category
Quantity
(tonnes)
Gold
(gr/mt)
Copper
(%)
Gold
(Ounces)
Copper
(000s lbs)
Proven
Reserve
91,715,448
0.699
0.227
2,061,000
459,000
Indicated
Resource
52,210,624
0.491
0.167
824,000
192,000
A management structure and personnel organizational chart is

attached as Appendix C.
(b)
Kemess North Development
The Kemess North Mineral Project can be considered as an

extension of the existing Kemess Operations into a new mining area. As
such, it will use the existing plant, infrastructure, and mining equipment for
the future Kemess North operation. The additional reserves from the
Kemess North mineral project will extend the mine life to 2020, an extension
101 of 138
of 12 years beyond the current life-of-mine plan for the current Kemess
operations.
The current mining and milling levels will continue through mid 2006
with all ore being produced from the Kemess South pit to feed the plant. To
meet the future needs of the Kemess South pit, three more haul trucks will
be added to the fleet in 2005. As the Strip ratio declines in Kemess South
mining equipment will be released and will be transferred to Kemess North.
Kemess North pre-stripping will begin in the second half of 2005 with small
scale contract development equipment preparing large enough initial
working areas to accommodate the large mining equipment from Kemess
South .The first shovel will be transferred at the start of 2006 along with a
blast hole drill and 5 trucks from the existing fleet. Initial mine waste will be
used for construction of pads for the crusher stockpile site and infrastructure
required for the Kemess North operations. This initial material will be NAG
material from the northern pit limit on Douglas Ridge. Mine waste will also
be used to fill a haul road to the waste dump site at Duncan Lake.
To meet the pre-stripping requirements an additional 4 trucks will
need to be added to the combined fleet for 2006. The first crusher at the
North pit rim will begin in Kemess in the fourth quarter of 2006. At this time a
second mining shovel and 7 more trucks will be transferred from Kemess
South to Kemess North.
Concurrent operation of both mining areas will continue until the
depletion of ore in Kemess South in 2010. At that time the remaining shovel,
blast hole drill and 4 haul trucks will be transferred to Kemess North.
During 2005 and 2006 the following infrastructure will be constructed
at Kemess North to facilitate the mining operation and link it to the milling
and flotation infrastructure at Kemess South:
A 3 km tunnel and 11 km conveyer linking the Kemess North

crusher and the Kemess south mill stockpile;
A truck maintenance complex;
An ore crusher and feeders; and
Power line and road link from Kemess North to Kemess South.
At the end of 2005, construction of a third milling circuit will begin at

Kemess South adjacent to the existing mill building which houses the other
two milling circuits and the flotation circuit. The new circuit will consist of a
SAG mill and ball mill in series similar to the existing circuits and will be tied
into the existing live ore stockpile and the existing flotation circuit. The third
circuit will be commissioned in the third quarter of 2006.
102 of 138
The waste rock and tailings impoundment facilities at Duncan Lake

will be developed during 2005 and 2006 and a tailings pipeline will be
constructed to connect the expanded Kemess South mill to the facility.
In the fourth quarter of 2006 the first ore from Kemess North will be
delivered to the Kemess South mill and ore production from the Kemess
South pit will be reduced to 11 million tonnes per year until reserves are
exhausted in early 2010 at which point Kemess North production will be
ramped up to fill the additional mill capacity.
(c)
Integrated Production
In order to optimize the net present value of the Kemess North

project, the Hatch draft revised pre-feasibility study dated May 2004
integrates the development of the Kemess North pit with continued
production from the Kemess South pit for a period of approximately 5 years
between 2005 and 2009. Table 22.2 shows the average annual production
from Kemess South and Kemess North during the period of combined
operation (2004-2009) and the period of Kemess stand alone North
operation from 2010 through 2020
Table 22.2: Production Summary
2004-2009
2010-2020
KS
KN
Total
KN
Ore & Waste Mined (MM tonnes)
27.5
30.3
57.9
57.1
Mill Throughput (MM tonnes)
14.8
15.4
30.2
32.2
243,750
55,858
299,608
208,960
62
28
90
105
Gold Production (ounces)

Copper Production (MM lbs)
Silver Production (ounces)
(d)
335,156 167,574 502,731
621,088
Recoverability Metallurgy and Mineral Processing
Average metal recoveries for evaluating future Kemess milling

performance on ores from Kemess South and Kemess North are
summarized in Table 22.3. For additional detail on Metallurgy and Mineral
Processing refer to Section 15.
103 of 138
Table 22.3: Metal Recovery Summary

Recovery (%)
Copper
Gold
Flotation
Grade
(% Cu)
Kemess South Ores:

Hypogene
Supergene/Leach Cap
Transition
85
67
79
73.5
63.5
70
24
20.5
23
7.5-8
8-9
8-9
Kemess North Ores:
90
63.5
23
Ore Type
(e)
Concentrate
Moisture (%)
Markets Transportation and Smelting
Kemess concentrate is a clean, lower grade copper-gold concentrate

which is readily marketable to smelters around the world. Northgate
currently sells the full production of Kemess concentrate to Noranda Inc.
under a long term contract. 2004 annual concentrate smelting and copper
refining charges settled at $43/mt of concentrate and $0.043/accountable
pound of copper respectively in 2004. Over the past 5 years annual smelting
and refining charges have averaged $62/mt and $0.062 per accountable
pound of copper.
Continued shipments to Norandas Horne smelter in Rouyn Noranda
Quebec are envisioned throughout the minelife of Kemess North but
shipments to smelters in Asia through the port of Vancouver are possible at
equivalent realizations. By 2006 it is assumed that a road will be built
connecting the Kemess mining complex to the coastal town of Stewart
giving Kemess additional shipping options for concentrate and reducing road
maintenance costs that are currently borne exclusively by Kemess.
Kemess contracts with third parties who supply transportation
services for its concentrate. CN Rail and Lomak Bulk Carriers currently
provide rail and trucking services to Kemess under multiyear contracts.
(f)
Contracts
Northgate Exploration and its wholly owned subsidiary Kemess Mines

Ltd. are party to a variety of long-term contracts for various products and
services. It is assumed that these contracts would be extended to include
production from Kemess North under similar terms. The following is a
summary of the Corporations material long-term contracts.
104 of 138
Kemess is in the last year of a three year contract with Noranda Inc. for the
sale of its full production of copper concentrate. Negotiations for a contract
extension have begun and the company is also looking at other destinations
for the Kemess concentrate.
Electricity
Kemess purchases its electricity from British Columbia Hydro under
Schedule 1821 tariff used by large industrial users in the province. British
Columbia generates most of its power from hydro electric generating
stations and power rates have remained relatively stable over the past
decade. The BC government has been reviewing electricity pricing in the
province for the past 2 years and in April 2004 increased rates by
approximately 7%. This is the first increase in 7 years. As part of the new
pricing system that is currently being discussed large industrial users will be
entitled to continue to purchase their current power requirements at the low
Heritage power rate while additional power requirements will be purchased
at a higher rate consistent with the cost of adding new generating capacity.
Concentrate Trucking
Kemess has a long term contract with Lomak Bulk Carriers who
provide truck transportation services to the mine. Concentrate is trucked to
the MacKenzie trans-loading facility and mill grinding media, diesel fuel and
other supplies are backhauled to the mine.
Explosives
Kemess has a long-term supply with BXL Explosives who supply explosives
and related products to the Kemess mine.
Tires
Kemess has a long-term agreement with Fountain Tire who supply tires for
Kemess fleet of 13 haul trucks as well as various other vehicles.
Air Transportation Services
Kemess has a long-term agreement with NT Air who provide air
transportation to and from the Kemess mine for Kemess employees on
Beachcraft 1900 airplanes.
Collective Agreement
Kemess Mines Ltd. and The International Union of Operating Engineers
Local 115 have a collective agreement which govern the relationship
105 of 138
between the company and its employees. The current three year agreement
expires on December 31, 2004.
Closure Bonding
Kemess Mines Ltd. has posted a Cdn$13 million dollar closure bond
with the Province of British Columbia to fund the eventual closure of the
Kemess South mine. The agreement with the province calls for Northgate to
add $1 million dollars to the bond on December 31st of each year until the
estimated $19 million dollar cost of closing the mine has accrued. For the
purposes of the Kemess North development it has been assumed that the
full amount of this bond will remain in place until the conclusion of the
Kemess North mine life.
(g)
Environmental Considerations
Kemess South
The current reclamation bond for the Kemess Mine has been set at
Cdn $12 million and is in good standing. Reclamation and remediation are
ongoing at the mine site and are budgeted items.
The mine staff produces an annual reclamation report, as required
under BC law. This report documents areas of disturbance, future
development and reclaimed ground. The mine staff also prepares an annual
spreadsheet documenting liabilities at the end of each year, which is
submitted to the government. The latest filed reclamation report was for year
2000.
Kemess North
The environmental considerations, and corresponding civil
engineering works and costs have been undertaken by independent
technical specialists in these fields. The results have been incorporated into
the Hatch Revised Draft Pre-Feasibility Study, dated May 2004. Klohn
Crippen Consultants Ltd. have been retained for the mine waste
management aspects, including mine waste rock, tailings and water
management, for this proposed open pit gold/copper mine in northern British
Columbia. Klohn Crippen have also been retained to prepare the
Environmental Impact Assessment for the project. The following is a
summary of Klohn Crippens work to date.
Mine Waste Management
The Kemess North deposit will generate approximately 414 million
tonnes of tailings (sand and silt sizes) and 335 million tonnes of mine waste
rock. All of the tailings and most of the mine waste rock have the potential to
oxidize and generate acid drainage and metal leaching if they are not stored
106 of 138
under water in a saturated environment. Over sixteen alternative tailings and

waste rock disposal options were assessed by Klohn Crippen. The
recommended alternative is to store all of the tailings and potentially acid
generating waste rock below water in Duncan Lake, with construction of a
90 m high dam at the north end of the lake, a 35 m high dam at the
southwest end and 10 m high dam at the southeast end.
Geotechnical drilling and site investigations were carried out for the
Duncan Lake option and design studies have been carried out to the
feasibility study level. A corresponding Bill of Quantities and Engineers Cost
Estimate have been prepared for the study and submitted to Kemess.
Water Management
During operations, the Duncan Lake disposal facility will be operated
as a closed system with no discharge of water. The impoundment water
quality will be influenced by the tailings process water, natural runoff and
submergence of mine waste rock. The impoundment water quality will be
monitored and controlled to stay within water quality criteria. This is
recommended to mitigate for any potential seepage through the low
permeability earth fill dams. Mine water will be collected and, if necessary,
treated and recycled through the tailings impoundment.
Environmental Considerations
Acid rock drainage will be controlled by placement of all potentially
acid generating waste rock and soils into Duncan Lake. The main impact of
the project, therefore, is the loss of aquatic habitat in Duncan Lake and
temporary reduction of water flows in Duncan Creek and Attycelley Creek.
Duncan Lake is classed as a low productivity sub-alpine lake supporting
Dolly Varden, rainbow trout and mountain whitefish species. Compensation
for lost habitat will be carried out by a combination of new habitat
restoration projects that replace productive capacity of the aquatic habitat.
Flow reductions in Attycelley Creek and Duncan Creek will be compensated
with enhancement works within the Attycelley Creek drainage.
Closure
After mining, Duncan Lake aquatic habitat will be restored with a
program that includes creation of both shoal (shallow) and deep water
habitat. A new outlet channel, Duncan Creek, will be created to reconnect
the new lake with Attycelley Creek. A post-closure period of at least five
years is expected to include fertilization of Duncan Lake and earthworks to
build up the organic matter on the base of the lake and restore shoreline,
wetland and terrestrial vegetation.
107 of 138
The earth fill dams are designed to maintain the free water pond
(Duncan Lake) at least 300 m upstream of the dam. The dams are also
designed with low gradient core zones and robust fill sections to reduce long
term dam safety and erosion concerns.
The open pit will infill with water over a period of up to 100 years. The
water could become acidic due to oxidation of rock in the remaining pit
walls. If the acidity and metal loading exceeds the pre-mining conditions (the
area currently generates acid drainage and metal loadings) it will be
necessary to treat the water in the open pit lake with a lime dosage system.
(h)
Permitting Current Status
The Kemess North Copper Gold Project entered the regulatory

review process for mine development approval in October, 2003. The review
process will involve 3 levels of government: Province of British Columbia,
First Nations (4 Bands) and the Government of Canada. The project review
process will be concurrent with the applications for Project Permitting. The
provincial permits will establish the guidelines for environmental protection
during the construction and operating phases of the Kemess North Project.
The formal project review was initiated with the submission of the
Kemess North Project Description to the BC Environmental Assessment
Office (EAO) in October, 2003. The EAO has the responsibility to notify all
stakeholders and disseminate relevant project information during the review
process. The primary government agencies involved are as follows:
Province of BC: Environmental Assessment Office, Mi nistry of
Water, Land & Air, Ministry of Energy & Mines, and Ministry of Sustainable
Resources;
Government of Canada: Canadian Environmental Assessment
Office, Department of Fisheries & Oceans, Environment Canada, and
Natural Resources Canada; and
First Nations: Kwadacha FN, Gitxsan FN, Takla Lake FN, and Tsay
Keh Dene FN.
The Kemess North Project consists of the following key components
and the Development Approval and Provincial Permits are based upon this
information:
Mining methodology, scale and mining rates;
Options for disposal of waste rock and tailings;
Social and Economic impacts;
108 of 138
The Reclamation & Closure Plan, and
Compensation Plans for identified loss or displacement of

ecological values.
Table 22.4 Environmental & Engineering Assessment Review Schedule

Programs
Initiation
Date
Completion
Date
Environmental Baseline Information

Collection
July, 2002
September, 2004
Environmental Impact Assessment
July, 2003
September, 2004
Geological & Engineering Evaluation of

Ore Body Economics
July, 2001
May, 2004
Engineering of Mine Development Plan
February, 2003
May, 2004
Stakeholder Consultation
July, 2003
September, 2004
Final Project Application Document

Submitted for Government Review
September, 2004
March, 2005
Environmental Assessment Certificate

Granted
(i)
May, 2005
Taxes
The Kemess operation is currently subject to the following taxes:
British Columbia mineral tax (2% on resource income).
Property Taxes
Federal and Provincial Income Taxes
Federal Capital Tax
Federal Goods and Services Tax.
During the mining of Kemess South and Kemess North under the metal
price and foreign exchange rate assumptions used in this report, Kemess
Mines Ltd. will not pay federal or provincial income taxes due to the large
109 of 138
quantity of tax shields currently available to the Corporation and the shields
that will result from future capital expenditures.
(j)
Capital and Operating Cost Estimates
The revised pre-feasibility study for the development of Kemess

North dated April 2004 provides the capital and operating costs used in the
financial model in Section 22(k) of this report.
Mining and milling costs for the Kemess North and Kemess South
operations have been estimated using actual 2003 costs incurred at the
Kemess South complex as well as a detailed analysis from first pri nciples of
the activities that will take place in each year of the pre-feasibility study mine
plan from 2004 through 2020. Site G&A costs are fixed costs that have been
estimated based on 2004 budget projections and adjusted in each year for
the tonnes of mill throughput. Table 22.5 summarizes the mine operating
costs during the period of combined operation and the period during which
the Kemess North pit is the only source of ore for the mill.
Table 22.5: Projected Operating Costs
Operation Cost (Cdn$)
Actual
Kemess
South 2003
Kemess
South
2004-2006
Combined Ops
2007-2009
Kemess
North
2010-2020
Mining ($/mt mined)
0.91
1.03
1.05
1.00
Mining ($/mt milled)
2.63
2.48
1.57
1.85
Milling ($/mt milled)
3.06
2.63
2.41
2.2
G & A ($/mt milled)
1.09
1.20
0.76
0.73
Total
6.78
6.31
4.74
4.78
During the period of combined operation of Kemess North and

Kemess South the average cash cost per ounce of accountable gold at a
$1.00 per pound copper price is forecast to be US$140 per ounce. Between
2010 and 2020 when only the Kemess North pit is in operation the cash cost
is forecast to be $195 per ounce.
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Project capital to develop Kemess North totals US$165 million dollars

and sustaining capital over the combined Kemess North/Kemess South
mine life totals US$88 million dollars. Project capital will be spent in 2005
and 2006 and sustaining capital for replacement and rebuilding of capital
equipment and construction of tailings and waste rock impoundment
facilities will be spent over the combined 17 year life of the mine.
(k)
Economic Analysis
Northgate has completed an after-tax economic analysis for the

development of Kemess North using the revised Kemess North PreFeasibility Study dated April 2004. The model compares the annual cash
flow generated from the Kemess South Mine to the annual cash flow
generated by a combined Kemess North/South Operation and calculates the
NPV and IRR of the differential cash flows. The major commercial
assumptions incorporated within the model are as follows:
Exchange Rate
Cdn$/US$1.45
Metal Prices
Gold US $375/oz
Copper US $1.00/lb
Silver US $5.00/oz
Concentrate Treatment and Refining Charges
$62/tonne concentrate and $0.062/pound accountable copper
These assumptions represent Northgates estimates of the average metal

price, exchange rate and concentrate treatment and refining charges over
the 2004-2020 period.
Under these assumptions the Kemess North project has a Net
Present Value (NPV) at a 5% cost of capital of US$75 million and an IRR of
8.9%.
The economic analysis used to evaluate the Kemess North project
generates different results depending on the assumptions employed. Table
22.6 shows the project IRR at different prices for gold and copper and
sensitivities of the project IRR to all major variables is shown in Table 22.7.
111 of 138
Table 22.6: IRR Sensitivity to Metal Prices

Copper Price
8.6%
$0.90
$0.95
$1.00
$1.05
$1.10
$350
3.2%
5.1%
6.8%
8.4%
9.9%
Gold
Price $375
5.2%
7.0%
8.6%
10.1% 11.5%
$400
7.1%
8.8%
10.3% 11.7% 13.1%
$425
8.9%
10.4% 11.9% 13.3% 14.6%
$450 10.6% 12.0% 13.4% 14.7% 16.0%
Table 22.7: IRR Sensitivities

Factor
Gold Price
Copper Price
Foreign Exchange Rate
& Refining Charge
(l)
Unit change
$25/ounce
$0.05/pound
Cdn$/US$0.05
$5/mt concentrate &
$0.005/lb Cu
IRR Change
1.7%
1.5%
1.8%
0.05%
Regional Potential
The 35,312 ha of exploration claims surrounding the Kemess

Complex and the properties surrounding these claims that are held by
various exploration companies are known to contain a variety of different
types of mineralization including gold-copper porphyry mineralization
(Kemess North and Kemess South), epithermal gold mineralization and
base and precious metal skarn mineralization. Prior to the construction of
the Kemess South mine and its related infrastructure in the Toodoggone
region of British Columbia, the economic hurdle for development of any
deposit discovered was quite high. However with the Kemess infrastructure
in place and Kemess South and Kemess North providing a large base load
for the infrastructure, the probability of finding an additional deposit within an
economic shipping distance of Kemess has increased dramatically. Such a
deposit could provide additional low cost mill feed to be blended with
existing ore and increase the Kemess metal production at a very small
incremental cost.
Two specific areas within the Kemess claims that have already
showed promise are the Nugget Zone and the area to the southwest to the
112 of 138
existing Kemess South pit. At the Nugget Zone, one drill hole, only 0.5
kilometers from the proposed Kemess North pit boundary, contained 420
metres of porphyry mineralization at 0.13% copper and 0.38 gr/mt gold
starting at a depth of 25 meters. To the southwest of the current Kemess
South pit there are over 25 million tonnes of indicated resources grading
0.49 gr/mt gold and 0.16% copper and a geologic setting that has the
potential to host additional higher grade porphyry mineralization. Both these
areas have the potential to add ore to the Kemess operation in the future.
113 of 138

Manual

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REVISED

OMENICA MINING DIVISION

J.H. Gray, PEng

198 drill holes.

40,237 copper assays.

39,821 gold assays.

Copper and gold show a correlation factor of 0.80.

5 m and 15 m fixed length composites were generated for comparison of the

The influence of a few remaining high-grade composites were limited to a

A background interpolation was done using the inverse distance weighting

The methodology employed for the grade interpolation of the model

The reserves Class codes were assigned based on the Geostatistical

Resource Classification Criteria Used

Summary of Indicated Resources

Summary of Inferred Resources

Both deposits carry clean sulphides without surface oxidation.

Impurity elements occur in extremely low concentrations.

Concentrates will be free of deleterious impurities.

These assumptions represent Northgates estimates of the average metal price,

INTRODUCTION AND TERMS OF REFERENCE..................................................... 1

TERMINOLOGY AND ABBREVIATIONS

Bladed feldspar porphyry

1.32 inch diameter core

Ball Mill Work Index

Bond Work Index

Resource/Reserve classification code in 3 -D Block Model

Distance to closest composite during grade interpolation

Exploratory Data Analysis

grams per tonne

GR Technical Services Ltd.

2.406 inch diameter core

Lerchs-Grossman Pit Optimization Routine

Lithology codes used in 3-D Block Model

Million cubic metres

Non-Acid Generating rock

Number of Composites used in Grade Interpolation

Net Present Value

Northgate Exploration Limited

1.775 inch diameter core

Net Smelter Price

Net Smelter Return

National Topographic System

Potentially Acid Generating rock

Project Design Criteria document

Net profit calculation per block, inclusive of mining, milling, treatment,

Quality Assurance/Quality Control

Smoothed pit with ramps (Mine site terminology)

Tonnes per day

Technical Unit Cost

Kemess Property Location Map

General Claim Outline

Detailed Kemess Area with Infrastructure Kemess South & Kemess

Regional Geology after Massey et al 2003.

Shows General Property Geology in Area Around Kemess North

Kemess North Geology - Diakow (2001)

Location map for 2003 Condemnation holes. Note area between

Drill Hole Locations

Kemess Claim and Surrounding Properties

Pit 634 with Met Sample Drill Holes

Ultimate Pit Limit (P634)

Ultimate Pit Limits - Undiscounted

Ultimate Pit Limits - Discounted

Ultimate Pits Section View