Western Troy controls 100% of the MacLeod Lake Molybdenum-Copper project in Quebec, Canada. The project is located approximately 275 kilometers north of Chibougamau, Quebec.
Resources have been defined at two locations along a 15 kilometer contact between two geologic units. Most of the remainder of the contact is prospective for the discovery of additional resources.
The Main Zone resource outcrops on surface and has drill fences on 100 meter centres.
A 43-101 report on MacLeod Lake was prepared in the fall of 2005. Updates to the report were prepared in late 2006 and 2007. The report and updates are available on SEDAR and on Western Troy’s website.
A scoping study (preliminary assessment) was completed in March of 2008. The study was prepared by Scott Wilson Roscoe Postle Associates, Inc. of Toronto, Ontario. Using a molybdenum price of US$17.00 per pound and a copper price of US$2.25 per pound, the study indicates a surface mining operation on the Main Zone of the MacLeod Lake Project will generate a pre-tax net present value (NPV using a 10% discount Rate) of C$156 million and a pre-tax internal rate of return (IRR) of 32%.
Scott Wilson RPA’s estimate of the Mineral Resources for the Main Zone of MacLeod Lake Project, contained within an optimized open pit outline, is summarized in the following table:
Click Table to Enlarge
The Preliminary Assessment based on the above Mineral Resource estimate includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the preliminary assessment will be realized.
At the anticipated open pit production rate of 6,000 tonnes per day or 2.1 million tonnes per year, the Project will provide for a mine life of approximately nine years. Life of mine metal production is forecast to be 217 million pounds of copper, 32 million pounds of molybdenum, 800,000 ounces of silver and 7,000 ounces of gold.
Pre-production capital expenditures are estimated to be C$210 million including:
Click Table to Enlarge
The total operating cost, including mining, processing and general/administration, is estimated to be $24 per tonne of ore milled. The open pit will be mined in two phases. Phase 1 will include mining without disturbing the adjacent MacLeod Lake, for a total of 13 million tonnes (Years 1 to 6). Phase 2 involves extending the pit to the east and requires draining a portion of the lake. Phase 2 will total 4.2 million tonnes (Years 7 to 8).
Scott Wilson RPA Qualified Persons responsible for the Preliminary Assessment are Normand Lecuyer, P.Eng., Principal Mining Engineer, Reno Pressacco, M. Sc(A), P.Geo., Associate Consulting Geologist, Barry Cook, M.Sc., P.Eng. Associate Consulting Geologist, Kevin Scott, P.Eng., Consulting Metallurgist, and Jason Cox, P.Eng., Senior Mining Engineer.
Access to the project area is currently limited to aircraft and snowmobile. A winter road exists from Temiscamie to the Eastmain Mine. The 2009/2010 Quebec Provincial Budget includes $130 million for the construction of the Otish Mountain Road (Highway 167 from Temiscamie to the Otish Mountains). This road is projected to pass within 70 kilometers of Western Troy’s MacLeod Lake Project. The Scoping Study for MacLeod Lake, published by Western Troy in early 2008, included funds for a 70 kilometer spur road from the planned Otish Mountain Road to MacLeod Lake.
In mid-2008, Western Troy contracted with Genivar Engineers of Val d’Or, Quebec to conduct a finaal feasibility study and obtain all permits for the MacLeod Lake Project. Western Troy also contracted with SGS Lakefield to conduct metallurgical test work on MacLeod Lake ores. Work was initiated and some results were received, but in early 2009, Western Troy asked Genivar to suspend work on the feasibility and permitting work. Western Troy management cited then low current prices for copper and molybdenum, coupled with the uncertainty regarding energy and consumables costs as factors in the decision to suspend the work. Even though Western Troy has delayed the work, management remains confident the MacLeod Lake Project will be developed into a profitable mining operation in the not too distant future. This belief is based on the relatively high grade of the resource (approximately 63% higher than the average grade of existing surface mine molybdenum producers), favorable metallurgy, and a favorable political environment in Quebec. Taking this step to delay the work will free up a considerable amount of cash and assure the company’s ability to weather the current market turmoil. Once management sees a more stable environment and higher copper and molybdenum prices, we will ask Genivar to resume the feasibility work.
In early 2009, Western Troy received the final metallurgical study results from SGS Lakefield following a detailed analysis of the MacLeod Lake ore samples. SGS found that Western Troy should expect to recover approximately 96 percent of the copper and 85 percent of the molybdenum at MacLeod Lake. These results are much better than the recoveries used in the Scoping Study last year (92% for copper and 85% for molybdenum). The full report is available at METALLURGICAL FEASIBILITY STUDY TESTWORK ON MACLEOD LAKE ORE, February 2009, written by SGS Lakefield Research Limited
