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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: don jackson who wrote (24363)	9/8/1999 7:13:00 PM
From: kfdkfd	Read Replies (1) \| Respond to of 26850

HERE IT IS< NEWS MRDI report Wed Sep 8, 1999 Results of Updated Scoping Study on Snap Lake by MRDI Canada Winspear Resources Ltd. (WSP.V) is pleased to report on the results of an up-dated Scoping Study of the Snap Lake project that has been completed by MRDI Canada ("MRDI"), a division of H.A. Simons Ltd. Based on these results as outlined below, MRDI has recommended that a feasibility study based on the mining and processing kimberlite at a rate of 3,000 tonnes per day be initiated following completion of an underground development program as outlined below under Pre-Feasibility. Snap Lake is located 140 miles northeast of Yellowknife, NWT. Winspear is Operator of the property on behalf of the Camsell Lake joint venture. Scoping Study - Snap Lake project: MRDI has completed an up-dated scoping study of the Snap Lake project that incorporates average values of diamonds recovered from Pits 3 and 4 (10,708 carats recovered from 5995.7 dry tonnes of kimberlite with an average value of $US104.96 per carat.) as well as revised tonnage estimates of kimberlite in the NW dyke as reported July 5, 1999. Based on all information derived from the project to date, MRDI has determined that the Snap Lake project is capable of supporting an underground mining rate of 3000 tonnes per day with decline access from the NW peninsula. The scoping study proposes that upon receiving all appropriate permits, production would begin from an open pit on the NW peninsula at a rate of 1000 tonnes per day for a period of approximately two years during which time about 700,000 tonnes of kimberlite would be mined and processed. Development of the underground mine would begin during mining of the open pit ore and would be timed so that in the last six months of open pit mining, underground production would be available at an increasing rate. The scoping study assumed that the underground facility would be producing at an increasing rate that would reach 3000 tonnes per day in the fourth year of production. The costs in the study were estimated to an accuracy of ñ 30%. Parameters on which the scoping study was based and some results of it are outlined below: Scoping Study Results - Snap Lake Project ---------------------------------------------------------------- $Canadian ---------------------------------------------------------------- Kimberlite mined* 8.225 million tonnes Diluted kimberlite value $251 / tonne Mining rate Open Pit 1000 tonnes per day Underground 3000 tonnes per day Mining duration 10 years Capital Costs $241 million Operating Costs estimated-combined open-pit & underground (assume 10 year mine-life)* $71.52 / tonne Before-tax Cash Flow $1.229 billion After Tax Cash Flow (income tax and government royalty) $737.3 million DCF Rate of Return (after tax) 44.1% Pay-back period from start of production 3.6 years ---------------------------------------------------------------- * combined internal and mining dilution for the open pit is estimated 10.3% and for the underground, at 10.7% exchange rate CDN$1.50 = US$1.00 * including mining, processing, G&A A significant tonnage of NW dyke kimberlite, in addition to that used in the scoping study, has been identified in the "global estimate". Because the NW dyke remains open to the northeast, a life-of-mine forecast cannot be prepared at this time. The Scoping Study report suggests the mine life may be extended well beyond the 10 years identified above or that a second mining operation, possibly feeding a central processing complex, could be considered at a later date. For the latter possibility to be considered, the report notes that additional tonnage of kimberlite would have to be confirmed. Pre-Feasibility: In light of the favourable results obtained from the NW dyke, Winspear as Operator of the Camsell Lake joint venture has submitted an application for a Class B water license to support an advanced exploration program on the property during the coming year. This program as proposed would comprise the following activities: - Undertake an underground bulk sampling program on the property. This would involve establishing an access drive approximately 20 metres below the NW dyke driven out under Snap Lake. This drive is planned to be approximately 1200 metres long. A ramp would then be driven into the kimberlite and about 600 metres of development undertaken. This would result in mining of approximately 20,000 tonnes of kimberlite of which 6000 tonnes would represent three 2000 tonne samples separated by about 300 metres. During this process, geological, geotechnical, and hydrogeological data would be obtained that would assist in establishing underground mining conditions and costs. - A DMS pilot plant would be constructed on the property during the first half of 2000. This would be available to process the three underground bulk samples at a rate of 100 tonnes per day as required under the Class B water license. Results of these bulk samples should be available later in the year 2000. - To support these activities, camp facilities and a 900-metre airstrip would be constructed. Golder Associates Ltd. has undertaken an expanded environmental geotechnical, hydrological, and geochemical program on the Snap Lake project area throughout much of this year to augment base-line environmental work that was initiated in January 1998. Although this work is on-going, sufficiently detailed and substantiated data will have been assembled to permit an Environmental Impact Assessment report on the property to be submitted in early 2000. It is anticipated that a Project Description covering both the proposed open-pit and underground operation at Snap Lake will be submitted to the regulatory authorities towards the end of this year. Winspear is pleased with progress being made to advance the Snap Lake property. Although an aggressive time line has been established to move the property towards production, the various activities that must be addressed to achieve this goal have been identified and are being diligently pursued. Further project updates will be forthcoming. One of the ongoing tasks is conversion of the exploration results into a resource estimate. This work is in progress and as such was not included in the scoping study. The results of the resource estimate analysis are expected shortly. Winspear Resources Ltd. Randy C. Turner, P.Geo. President and Director