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SRK Study
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In January 2003 Seabridge engaged SRK Consulting ("SRK") to complete an engineering and preliminary economic study of the project.
The report, entitled "Red Mountain Project Engineering Study" (the "SRK Report"), was prepared by or under the supervision of
Ken Reipas, P.Eng., an employee of SRK and an independent Qualified Person under NI 43-101. The objectives of the study were
to build on previous project work to identify the best project development approach, and to assess the current economics of
the project. The following material summarizes information from the SRK Report.
SRK reviewed previous studies and evaluated the development alternatives relating to various aspects of the project.
The best development alternatives are:
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Road access to the
site. A road was designed by North American Metals Corp.
in 2001 to access the project site. |
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A seasonal operation
from May to October was selected in favor
of year-round operations on the basis of
safety and reliability. |
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An on-site mill using
a grinding and cyanidation leaching (CIP)
circuit was selected. The alternative
of using flotation to produce a sulphide
concentrate for offshore marketing was discarded
on the basis of poor economics caused by
lower overall gold recovery and smelting
costs. |
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A conventional type
of mill was selected instead of a portable
type due to the tonnage required (1000tpd)
and the very fine grind needed. |
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The full use of backfill
was selected to optimize the mining recovery
of the resources. Minimizing backfill
was considered to reduce costs, but the
possible savings are not enough to justify
the lower mining recovery that results. |
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Based
on an initial review of the project economics,
SRK utilized a cutoff grade of 6g/t Au (based
on a gold price of US$375/oz) to delineate contiguous
zones of mineralization to assess various mining
and processing scenarios as part of the Engineering
study.
SRK decided to include inferred resources in the study because of their high degree of confidence that additional
drilling will upgrade this material to the indicated category. The measured resource above the 6 g/t Au cut off grade is
866,000 tonnes grading 9.39 grams of gold per tonne. The indicated resource above the 6g/t cut off grade is 193,000
tonnes grading 8.43 grams of gold per tonne. In the inferred category, gold resources above the 6g/t Au cut off grade
is 157,600 tonnes at a grade of 8.62 grams of gold per tonne. Tonnes available for extraction shown in the following
table were estimated by a resource conversion process that applied dilution and mining recoveries to the individual
deposits comprising the resources above the 6.0g/t cutoff grade. The parameters were based on preliminary mining
designs for different areas of the deposit that included both longhole, and cut-and-fill mining methods.
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| Resources
Used in SRK Study - All Categories of Resources
(000´s) |
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Tonnes |
Au
g/t |
Ag
g/t |
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Mineral Resources (All Categories > 0 g/t Au) |
1,941.2 |
7.74 |
26.2 |
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Mineral Resources (All Categories > 6 g/t Au) |
1,216.6 |
9.14 |
28.7 |
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Mining Recovery |
89% |
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Recovered Tonnes |
1,081.2 |
9.13 |
28.9 |
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Dilution Percent |
14% |
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Dilution Tonnes |
180.7 |
0.55 |
n/a |
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Tonnes |
1,261.9 |
7.90 |
24.7 |
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