East and West Seel Cu-Au Deposits

East and West Seel Cu-Au Deposits

The East and West Seel deposits represent two different styles of porphyry mineralization forming a large continuous mineralized zone. The deposits are located on a gently sloped forest covered area with limited bedrock exposure and typically 0 to 40 meters of glacial cover. The deposits are roughly 6 km from the Huckleberry Mill. The East Seel deposit is a smaller higher grade zone of mineralization containing Cu-Au mineralization associated with quartz-magnetite-chalcopyrite veining, and the West Seel deposit is a large zone of Cu-Au-Mo-Ag mineralization associated with quartz-pyrrhotite-chalcopyrite-molybdenite veining that extends from surface to over 1000 metres depth and remains open for expansion. The Seel Breccia zone contains structurally controlled zones of higher grade copper-silver mineralization and the Far East zone has only been partially delineated by drilling.

Drill Hole Location Map, East and West Seel Deposits

A simplified cross section through the East Seel deposit is shown below with geology illustrated on the left and copper equivalant grades shown on the right.  A zone of high grade mineralization with greater than 0.75% copper equivalant forms the core of the East Seel deposit which is surrounded by larger zones with lower grades.   

Simplified East Seel Cross Section 15 Showing Geology and Copper Equivalent Grades.  See map above for the location of section 15.

The cross section below is through the West Seel zone and demonstrates mineralization is hosted in all lithologies shown including fine grained sedimentary rocks, undifferentiated porphyry, equigranular intrusive and in a hydrothermal breccia pipe. The hydrothermal breccia pipe has a sub-vertical geometry, starts about 400 m below surface, and extends at least 400 m vertically and remains open at depth.

The East and West Seel deposits extend from surface to considerable depths and West Seel remains open to the south and north.  The West Seel deposit has a large higher grade core that starts about 200 m below surface as outlined by the > 0.75% copper equivalent outline on the section above. The overall geometry of mineralization and East and West Seel is shown below.

Geometry of the East and West Seel Deposits

Select drill hole results from East and West Seel are presented in the tables below.

Select drill hole results from the East Seel Deposit.

Drill Hole

From (m)

To (m)

Width (m)*

Cu %

Au g/t

Ag g/t

Cu Eq%**

S11-81

38.5

176

137.5

0.39

0.34

4.12

0.63

including

38.5

104.5

66

0.42

0.47

1.15

0.75

S11-83

41.6

228

186.4

0.36

0.27

3.86

0.55

including

41.6

148

106.4

0.4

0.41

1.08

0.69

including

162

174

12

0.9

0.08

24

1.17

S13-148

31.7

178

146.3

0.51

0.59

2.33

0.94

including

31.7

76

44.3

0.94

1.12

3.46

1.76

S13-153

64

188

124

0.37

0.37

1.63

0.64

including

68

84

16

0.81

0.76

3.63

1.37

S13-155

30

268 EOH

238

0.38

0.47

1.93

0.73

including

30

190

160

0.44

0.53

1.98

0.83

including

42

86

44

0.62

0.67

2.76

1.11

Including

140

156

16

0.64

0.8

2.74

1.22

S13-157

31.7

218

186.3

0.37

0.41

1.82

0.67

S13-159

45.7

143.6

97.9

0.39

0.49

2.41

0.75

including

45.7

110

64.3

0.44

0.58

2.64

0.87

including

45.7

66

20.3

0.52

0.65

2.61

1

S13-177

26.8

213

186.2

0.39

0.53

1.86

0.78

including

26.8

109

82.2

0.56

0.81

2.43

1.15

S13-183

30.5

210

179.5

0.43

0.5

1.93

0.8

including

38

134

96

0.58

0.62

2.75

1.04

including

76

100

24

1.11

1.22

4.98

2.01

Select drill hole results from the West Seel Deposit.

Drill Hole   

From (m)

To (m)

Width (m)*

Cu %

Au g/t

Mo %

Ag g/t

Cu Eq.%**

S12-101

262

1079

817.0m

0.2

0.21

0.026

2.24

0.45

including

308

829.8

521.8

0.23

0.3

0.032

2.63

0.57

S12-118

350

887.0 EOH

537

0.27

0.19

0.055

2.69

0.65

including

356

660

304

0.33

0.24

0.065

3.41

0.79

including

356

484

128

0.43

0.33

0.076

4.65

1.01

S12-121

234

987.5 EOH

753.5

0.24

0.12

0.024

2.26

0.43

including

270

602

332

0.32

0.2

0.039

3.58

0.65

S12-130

346

658

312

0.29

0.17

0.035

3.3

0.58

including

444

582

138

0.38

0.22

0.057

3.99

0.8

S12-136

140

494

354

0.23

0.28

0.031

3.01

0.58

including

298

444

146

0.32

0.38

0.044

4.37

0.81

S13-154

18

32

14

0.41

0.09

0.129

12.86

1.1

S13-154

60

356

296

0.23

0.22

0.016

4.44

0.49

including

60

82

22

0.33

1.19

0.021

9.94

1.33

including

218

340

122

0.3

0.17

0.016

4.7

0.52

S14-200

324

531

207

0.31

0.24

0.034

4.45

0.65

including

366

439

73

0.45

0.31

0.059

6.32

0.96

S14-201

76

828

752

0.2

0.1

0.027

3.22

0.41

S14-208

283

591

308

0.28

0.26

0.046

3.5

0.68

including

431

591

160

0.38

0.41

0.056

4.29

0.93

including

485

537

52

0.44

0.64

0.067

5.58

1.21

S14-210

199

867 EOH

668

0.28

0.17

0.033

3.34

0.56

including

361

533

172

0.39

0.29

0.062

4.99

0.89

including

361

415

54

0.47

0.38

0.047

6.89

0.98

and

483

517

34

0.48

0.36

0.058

5.45

1.01

*Width refers to drill hole intercepts, true widths have not been determined. EOH = end of hole.
**Cu Eq. (copper equivalent) has been used to express the combined value of copper, molybdenum, gold and silver
as a percentage of copper, and is provided for illustrative purposes only.  No allowances have been made for recovery losses that may occur should mining eventually result.  Calculations use metal prices of US $2.50/lb copper, $1200/oz gold, $15 silver, and $10/lb molybdenum  using the formula Cu Eq.% = Cu% + (Au g/t x 0.701) + (Ag g/t x 0.0087) + (Mo% x 4.01).

Current measured and indicated resources for the East and West Seel deposits are shown in the Tables below along with sensitivity to different net smelter return (NSR) cut off grades.

Seel Deposits Pit Constrained Mineral Resource Estimate at $8.50/t NSR Cut-off Value

Deposit

Category

Tonnes (‘000’s)

CuEq

Cu %

Au

Mo

Ag g/t

CuEq

Cu

Au

Mo

Ag

%

 g/t

 %

M lbs

M lbs

K oz

M lbs

K oz

East Seel

Measured

22,165

0.43

0.28

0.26

0.002

2.5

210

137

185

1

1782

Indicated

1,422

0.38

0.28

0.14

0.003

4.4

12

9

6

0

201

M&I

23,587

0.43

0.28

0.26

0.002

2.6

222

146

191

1

1,983

West Seel

Measured

134,491

0.37

0.21

0.16

0.022

3.2

1,097

623

692

65

13,837

Indicated

32,415

0.36

0.21

0.13

0.024

2.9

257

150

135

17

3,022

M&I

166,906

0.37

0.21

0.15

0.023

3.1

1,354

773

827

82

16,859

Inferred

5,212

0.3

0.18

0.09

0.019

2.6

34

21

15

2

436

Seel Deposits Resource Sensitivity to Cut Off Grade for Measured and Indicated Resources.

Deposit

NSR Cut-off C$/t

Tonnes (‘000’s)

Cu %

Au g/t

Mo %

Ag g/t

 

15.00

19,824

0.31

0.28

0.002

2.9

 

12.50

21,765

0.3

0.27

0.002

2.7

 

10.00

23,151

0.29

0.26

0.002

2.6

East Seel

8.50

23,587

0.28

0.26

0.002

2.6

 

7.00

23,844

0.28

0.25

0.002

2.6

 

5.00

24,028

0.28

0.25

0.002

2.6

 

0.01

24,200

0.28

0.25

0.002

2.5

 

15.00

125,476

0.24

0.18

0.026

3.4

 

12.50

146,459

0.22

0.16

0.024

3.3

 

10.00

161,588

0.21

0.15

0.023

3.2

West Seel

8.50

166,906

0.21

0.15

0.023

3.1

 

7.00

169,982

0.21

0.15

0.022

3.1

 

5.00

172,089

0.21

0.15

0.022

3.1

 

0.01

173,725

0.21

0.15

0.022

3.1

The current technical report supporting the resource statement and PEA is available on SEDAR or the Company’s website at www.surgecopper.com and has an effective date of January 2016.  The resource estimate uses $8.50 per tonne NSR cut-off value.  Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves.  A ‘Measured Mineral Resource’ is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.   An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.  Copper Equivalent (CuEq) calculations are based on base case metal price (US$3/lb Cu, US$1260/oz Au, US$10.30/lb Mo, and US$17/oz Ag) and process recovery assumptions and take into account smelter payable rates and refining costs.  M&I = measured and indicated. The resource update and Preliminary Economic Assessment was completed by P&E Mining Consultants Inc. in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects.

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