Mineral Reserves at the Balmat Mine, St. Lawrence County, New York

Transcription

Industry Guide 7
Report
Mineral Reserves at the
Balmat Mine, St. Lawrence
County, New York
Prepared for:
Star Mountain Resources Inc.
605 Knox Road, Suite 202,
Tempe, Arizona 85284
Mark Odell, P.E.
Laura Symmes, SME
Sarah Bull, P.E.
Prepared by:
Practical Mining LLC
495 Idaho Street, Suite 205
Elko, Nevada 89801
Effective Date:
November 2, 2015
Page ii
Mineral Reserves at the Balmat Mine, St.
Lawrence County, New York
Star Mountain
Resources Inc.
This page intentionally left blank.
January 30, 2016
Star Mountain
Resources Inc.
Page iii
Date and Signature Page
The undersigned prepared this Industry Guide 7 Report (IG7 Report), titled: “Mineral Reserves at
the Balmat Mine, St. Lawrence County, New York,” dated the 30th day of January, 2016, with an
effective date of November 2, 2015, in support of the public disclosure of mineral reserve estimates
for the Balmat Mine. The content of the IG7 Report have been prepared in accordance with
Industry Guide 7 of The United States Securities and Exchange Commission (SEC).
Dated January 30, 2016
Signed “Mark Odell”
Mark Odell, P.E.
Elko, Nevada 89815, USA
(775) 345-3718
Email: [email protected]
No. 13708, Nevada
SME No. 2402150
(Sealed)
Signed “Laura Symmes”
Laura Symmes
(775) 345-3718
SME No. 4196936
(Sealed)
Signed “Sarah Bull”
Sarah Bull, P.E.
775-304-5836
No. 22797, Nevada
(Sealed)
January 30, 2016
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Star Mountain
Resources Inc.
Table of Contents
Date and Signature Page ................................................................................................................ iii
Table of Contents ........................................................................................................................... iv
List of Tables ................................................................................................................................. ix
List of Figures ............................................................................................................................... xii
List of Abbreviations ................................................................................................................... xiv
1.
Summary ............................................................................................................................... 15
Introduction .................................................................................................................... 15
Property Description ...................................................................................................... 15
History ............................................................................................................................ 16
Project Status .................................................................................................................. 16
Mineral Reserve Estimate .............................................................................................. 16
Cash Flow and Economic Analysis ................................................................................ 18
Conclusions .................................................................................................................... 19
2.
Introduction ........................................................................................................................... 20
Terms of Reference and Purpose of this Report ............................................................ 20
Qualification of the Authors ........................................................................................... 20
Sources of Information ................................................................................................... 20
Units of Measure ............................................................................................................ 20
Coordinate Datum .......................................................................................................... 21
3.
Property Description and Location ....................................................................................... 22
Property Description ...................................................................................................... 22
Property Location ........................................................................................................... 22
Status of Mineral Titles .................................................................................................. 24
Royalties ......................................................................................................................... 28
Environmental Liabilities ............................................................................................... 28
Permits............................................................................................................................ 28
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Resources Inc.
4.
Page v
Accessibility, Climate, Local Resources, Infrastructure and Physiography ......................... 30
Access to the Balmat Mine............................................................................................. 30
Climate ........................................................................................................................... 30
Vegetation and Wildlife ................................................................................................. 30
Physiography .................................................................................................................. 30
Local Resources and Infrastructure ................................................................................ 31
5.
History................................................................................................................................... 32
Introduction .................................................................................................................... 32
Production History ......................................................................................................... 32
Historical Mineral Reserve Estimates ............................................................................ 33
6.
Geological Setting and Mineralization ................................................................................. 35
Regional, Local and Property Geology .......................................................................... 35
Mineralization ................................................................................................................ 43
7.
Deposit Types ....................................................................................................................... 47
Sedex-type Deposits ....................................................................................................... 47
7.1.1.
Sedimentary basin: carbonate platform and brine generation................................. 47
7.1.2.
Sedimentary basin: rift-fill clastics and supply of metals ....................................... 48
7.1.3.
Tectonic and Sedimentary Structure ....................................................................... 49
7.1.4.
Deposition of Sulfides............................................................................................. 49
8.
Exploration............................................................................................................................ 51
9.
Drilling and Sampling Methodology .................................................................................... 53
10.
Sample Preparation, Analysis and Security ....................................................................... 57
Core Sample Preparation ............................................................................................ 57
11.
Data Verification ................................................................................................................ 58
Data Validation Procedures ........................................................................................ 58
Datasets Submitted for Evaluation ............................................................................. 58
12.
Mineral Processing and Metallurgical Testing .................................................................. 61
Locked Cycle Testing ................................................................................................. 61
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Test work Conclusions ............................................................................................... 63
13.
Mineralization Model......................................................................................................... 64
Introduction ................................................................................................................ 64
Wireframe Models ...................................................................................................... 64
Assays ......................................................................................................................... 64
Compositing................................................................................................................ 65
Density ........................................................................................................................ 65
Grade Capping ............................................................................................................ 66
Variography ................................................................................................................ 66
Block Modelling ......................................................................................................... 69
Mineral Inventory Classification ................................................................................ 70
14.
Mineral Reserves ............................................................................................................... 72
15.
Mining Methods ................................................................................................................. 75
Shaft Access ............................................................................................................... 75
Mine Development ..................................................................................................... 76
Ventilation .................................................................................................................. 78
Mining Methods ......................................................................................................... 79
15.4.1.
Long Hole Open Stope ........................................................................................ 79
15.4.2.
Drift and Fill ........................................................................................................ 81
15.4.3.
Room and Pillar................................................................................................... 82
Labor Requirements ................................................................................................... 83
Underground Equipment ............................................................................................ 83
Electrical Distribution................................................................................................. 84
16.
Recovery Methods ............................................................................................................. 85
Crushing Circuit ......................................................................................................... 85
Fine Ore Bins .............................................................................................................. 86
Grinding Circuit .......................................................................................................... 86
Lead and Talc Flotation Circuit .................................................................................. 87
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Zinc Flotation Circuit ................................................................................................. 87
Lead Dewatering Circuit ............................................................................................ 89
Zinc Dewatering Circuit ............................................................................................. 90
Ancillary Equipment................................................................................................... 91
Metallurgical Balance ................................................................................................. 94
Process Labor ............................................................................................................. 95
17.
Project Infrastructure ......................................................................................................... 96
Buildings ..................................................................................................................... 96
Electrical ..................................................................................................................... 98
Tailings Disposal ........................................................................................................ 99
18.
Market Studies and Contracts .......................................................................................... 100
Market Price and Supply History ............................................................................. 100
Smelter Schedule ...................................................................................................... 101
Transportation ........................................................................................................... 102
Smelting and Refining .............................................................................................. 102
19.
Permitting, Reclamation and Closure .............................................................................. 104
Permitting ................................................................................................................. 104
Reclamation and Closure .......................................................................................... 105
20.
Capital and Operating Cost Estimates ............................................................................. 108
Capital Costs ............................................................................................................. 108
Operating Costs ........................................................................................................ 109
21.
Economic Analysis .......................................................................................................... 111
Sensitivity Analysis .................................................................................................. 111
22.
Adjacent Properties .......................................................................................................... 114
23.
Other Relevant Data and Information .............................................................................. 115
Mine production and Reserve Additions .................................................................. 115
24.
Interpretation and Conclusions ........................................................................................ 117
Conclusions .............................................................................................................. 117
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Project Risks ............................................................................................................. 117
25.
Recommendations ............................................................................................................ 119
26.
Bibliography .................................................................................................................... 120
27.
Glossary ........................................................................................................................... 124
Appendix A: Practical Mining LLC Reserves Mine Plan Maps................................................. 127
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Resources Inc.
Page ix
List of Tables
Table 1-1 Balmat Mine Chronology of Ownership ...................................................................... 16
Table 1-2 Balmat Mineral Reserve Estimate as of December 1, 2015 ......................................... 17
Table 1-3 Key Operating and After Tax Financial Statistics ........................................................ 18
Table 2-1 Units of Measure. ......................................................................................................... 21
Table 3-1 Summary of Fee Ownership ........................................................................................ 26
Table 5-1 Balmat Edwards District Ownership History ............................................................... 32
Table 5-2 Balmat Mine Historical Production, ............................................................................ 33
Table 5-3 Balmat Historic Mineral Reserves................................................................................ 34
Table 11-1 Data Verification Summary........................................................................................ 60
Table 12-1 Mud Pond Flotation Kinetics...................................................................................... 62
Table 12-2 Mahler Flotation Kinetics ........................................................................................... 62
Table 12-3 Reagent Dosage .......................................................................................................... 62
Table 12-4 Locked Cycle Test Results ......................................................................................... 63
Table 13-1 Assay Statistics ........................................................................................................... 65
Table 13-2 Composite Statistics ................................................................................................... 65
Table 13-3 Grade Capping Strategy ............................................................................................. 66
Table 13-4 Variogram Parameters ................................................................................................ 66
Table 13-5 Search Ellipsoid Parameters ....................................................................................... 70
Table 13-6 Reserve Classification Criteria ................................................................................... 71
Table 14-1 Mineral Reserves Cut Off Grade Calculation ............................................................ 72
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Table 14-2 Balmat Mineral Reserves as of December 1, 2015 .................................................... 74
Table 15-1 Mine Development Plan ............................................................................................. 78
Table 15-2 Production Plan .......................................................................................................... 82
Table 15-3 Mine Labor Requirements .......................................................................................... 83
Table 15-4 Mobile Equipment Fleet ............................................................................................. 83
Table 16-1 Balmat Crushing Circuit ............................................................................................. 86
Table 16-2 Balmat Grinding Circuit ............................................................................................. 87
Table 16-3 Balmat Zinc Flotation Circuit ..................................................................................... 88
Table 16-4 Flotation Circuit Mass Balance .................................................................................. 94
Table 16-5 Concentrator Mass Balance ........................................................................................ 94
Table 16-6 Mill Labor Requirements ........................................................................................... 95
Table 17-1 Building Summary Number 4 Mine and Concentrator .............................................. 96
Table 17-2 Building Summary Number 2 Mine ........................................................................... 98
Table 18-1 North American Zinc Smelters ................................................................................. 103
Table 19-1 Permit Status ............................................................................................................. 104
Table 19-2 Reclamation and Closure Cost Estimate .................................................................. 107
Table 20-1 Infrastructure, Holding and Startup Capital ............................................................. 108
Table 20-2 Capital Development Requirements ......................................................................... 109
Table 20-3 Unit Operating Costs ................................................................................................ 109
Table 21-1 Cash Flow Summary and Financial Indicators ......................................................... 111
Table 23-1 Significant Events in Reserve Additions and Depletions ......................................... 116
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Table 24-1 Potential Project Risks .............................................................................................. 117
Table 25-1 Recommendations .................................................................................................... 119
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List of Figures
Figure 3-1 Balmat Mine Location Map ........................................................................................ 23
Figure 3-2 SLZ Land Position ...................................................................................................... 25
Figure 6-1 USGS Bedrock Map of North America ..................................................................... 37
Figure 6-2 Balmat Stratigraphic Section....................................................................................... 40
Figure 6-3 Geologic Map of the Balmat Area , ............................................................................ 42
Figure 6-4 Section Through Balmat Mine Area ........................................................................... 43
Figure 6-5 Locations of Zinc Bodies Included in the Current Investigation ................................ 45
Figure 7-1 Illustration of the Process of Formation of Sedex Deposits ........................................ 50
Figure 8-1 Geophysical Survey Area ............................................................................................ 52
Figure 9-1 Plan View of Drilling in the Current Project Area ...................................................... 54
Figure 9-2 Representative Drill Section A-A’ .............................................................................. 55
Figure 9-3 Representative Drill Section B-B’ .............................................................................. 55
Figure 9-4 Representative Drill Section C-C’ .............................................................................. 56
Figure 13-1 Mahler Main, White Dolomite and Quartz Diopside Correlogram .......................... 67
Figure 13-2 Mud Pond Main and Upper Main Correlogram ........................................................ 68
Figure 13-3 Mud Pond Apron and Quartz Dipside Correlogram ................................................. 69
Figure 14-1 Cut Off Sensitivity to Zinc Price ............................................................................... 73
Figure 15-1 Plan View of the Balmat Mine Showing the Location of Reserves Relative to the
Historic Workings ......................................................................................................................... 76
Figure 15-2 Long Section View of the Lower Mud Pond Ore Body............................................ 77
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Figure 15-3 Long Section View of the Mahler Ore Body ............................................................ 77
Figure 15-4 Long Section View of the Newfold Ore Body .......................................................... 78
Figure 15-5 Typical Level Development Plan in the Mahler Zone .............................................. 80
Figure 15-6 Cross Section Through Maler Showing Long Hole Stope Development Drifts ....... 81
Figure 15-7 Secion Through Cut and Fill Stope ........................................................................... 82
Figure 16-1 Crushing and Grinding Circuit Flow Sheet ............................................................... 92
Figure 16-2 Zinc Flotation and Tailings Flow Sheet ................................................................... 93
Figure 17-1 Site Map .................................................................................................................... 96
Figure 18-1 LME Monthly Average Zinc Cash Price and 3 Month Trailing Average .............. 100
Figure 18-2 Total Global Zinc Inventories ............................................................................... 101
Figure 21-1 NPV Sensitivity....................................................................................................... 112
Figure 21-2 Profitability Index Sensitivity ................................................................................. 112
Figure 21-3 IRR Sensitivity ........................................................................................................ 113
Figure 23-1 Annual Production and Reserves 1930 - 2008 ........................................................ 116
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List of Abbreviations
A
AA
A/m2
AGP
Ag
ANFO
ANP
Au
AuEq
btu
Ampere
atomic absorption
amperes per square meter
Acid Generation Potential
Silver
ammonium nitrate fuel oil
Acid Neutralization Potential
Gold
gold equivalent
British Thermal Unit
kA
kCFM
Kg
km
km2
kWh/t
LOI
LoM
m
°C
CCD
CIL
CoG
cm
degrees Centigrade
counter-current decantation
carbon-in-leach
cut-off grade
centimeter
m3
masl
mg/L
mm
2
square centimeter
cubic millimeter
3
Ft2
cubic centimeter
cubic feet per minute
confidence code
core recovery
closed-side setting
calculated true width
degree (degrees)
diameter
Environmental Impact Statement
Environmental Management Plan
fire assay
Foot
Square foot
mm3
MME
Moz
Mt
MTW
MW
m.y.
NGO
NI 43-101
oz
opt
%
PLC
PLS
Ft3
g
g/L
g-mol
g/t
ha
HDPE
HTW
ICP
ID2
ID3
ILS
Cubic foot
Gram
gram per liter
gram-mole
grams per tonne
hectares
Height Density Polyethylene
horizontal true width
induced couple plasma
inverse-distance squared
inverse-distance cubed
Intermediate Leach Solution
PMF
POO
ppb
ppm
QAQC
RC
ROM
RQD
SEC
Sec
SG
SPT
probable maximum flood
Plan of Operations
parts per billion
parts per million
Quality Assurance/Quality Control
reverse circulation drilling
Run-of-Mine
Rock Quality Description
U.S. Securities & Exchange Commission
second
specific gravity
Standard penetration test
cm
cm
cfm
ConfC
CRec
CSS
CTW
°
dia.
EIS
EMP
FA
Ft
m2
mm2
kiloamperes
thousand cubic feet per minute
Kilograms
kilometer
square kilometer
kilowatt-hour per ton
Loss On Ignition
Life-of-Mine
meter
square meter
cubic meter
meters above sea level
milligrams/liter
millimeter
square millimeter
Mine & Mill Engineering
million troy ounces
million tonnes
measured true width
million watts
million years
non-governmental organization
Canadian National Instrument 43-101
Troy Ounce
Troy Ounce per short ton
percent
Programmable Logic Controller
Pregnant Leach Solution
January 30, 2016
Star Mountain
Resources Inc.
Summary
Page 15
1. Summary
Introduction
On November 2, 2015 Star Mountain Resources, Inc. ("Star Mountain") (the "Company") entered
into three-way definitive agreements with Northern Zinc, LLC ("Northern Zinc") and HudBay
Minerals, Inc. ("Hudbay") that will result in Star Mountain acquiring Balmat Holding Corporation
("Balmat"), including St. Lawrence Zinc Company, LLC (SLZC) and its mining operations in the
Balmat mining district of St. Lawrence County, New York.
This report supports Star Mountain’s initial reserve estimate since acquiring the property and has
been prepared following the standards of the US Securities and Exchange Commission’s Industry
Guide 7 for Issuers Engaged or To Be Engaged in Significant Mining Operations (IG7).
Property Description
The Balmat Mine is located approximately 1.3 miles southwest of Fowler, New York, in St.
Lawrence County. SLZC owns a total of 2,699 acres of fee simple surface and mineral rights in
three towns in St. Lawrence County. The majority of the property consists of the 1,754 acres in
the town of Fowler where the Balmat Mine, mill and tailings disposal facility are located. Nine
parcels totaling 703 acres are owned in the town of Edwards which includes the Edwards mine.
The balance of the fee ownership covers the Pierrepont mine which is located on four owned
parcels totaling 242 acres.
Mineral rights owned by SLZC total 51,428 acres in St Lawrence and Franklin Counties. An
additional 2,274 acres of mineral rights are leased and optioned in portions of the Balmat, Hyatt
and Pierrepont mine areas as well as two prospective exploration areas.
Additionally, approximately 2,500 acres of mineral rights are controlled under a reciprocal lease
agreement with Gouverneur Talc Company.1
1
OntZinc Corporation, “Annual Information Form For the year ended December 31, 2003, September 29, 2004.
January 30, 2016
Page 16
Star Mountain
Resources Inc.
History
The Balmat-Edwards District consists of four mines. Edwards produced from 1915 to 1980,
Balmat from 1930 to 2008, Pierrepont from 1982 to 2001 and Hyatt from 1974 to 1998 on an
intermittent basis.2 The Balmat Mine operated continuously from 1930 – 2001 when production
ceased due to depressed zinc metal prices. Production resumed in 2006 until the mine was placed
on care and maintenance in the fall of 2008. The Balmat mine has produced a total of 30.7 M tons
grading 8.6% zinc. A history of Balmat ownership is in listed Table 1-1.
Table 1-1 Balmat Mine Chronology of Ownership3
Date
Company
1930 - 1987
1987 - 2001
St. Joe Minerals
Zinc Corporation of America
Sep. 2003 – Oct 2015
OntZinc (renamed HudBay Minerals in December 2004)
Oct. 2015
Project Status
HudBay Minerals placed the Balmat Mine on care and maintenance in the third quarter of 2008 in
response to depressed metal prices. Since that time all infrastructure maintenance tasks required
have been performed. The mine remains pumped out and is readily accessible and the mill is in
good condition.
Mineral Reserve Estimate
Excavation designs for stopes, stope development drifting, and access development were created
using Vulcan Software.
Design constraints included a 10-foot minimum mining width for long-hole stopes with
development drifts spaced at 50-foot vertical intervals. Stope development drift dimensions
maintained a constant height of 15-feet and a minimum width of 15-feet. Room and pillar
minimum dimensions are 15-feet high by 15-feet wide.
Bleiwas, Doanald I. and DiFrancesco, Carl, “Historical Zinc Smelting in New Jersey, Pennsylvania, Virginia, West
Virginia and Washington D.C., with Estimates of Atmospheric Zinc Emissions and Other Materials”, Open File
Report 2010-1131, U.S. Geological Survey, Reston, Virginia, 2010, page 99.
3
OntZinc Corporation, “Annual Information Form for the year ended December 31, 2003, September 29, 2004.
2
January 30, 2016
Star Mountain
Resources Inc.
Summary
Page 17
Balmat Mineral Reserves are presented in Table 1-2 and are categorized by Proven and Probable
Reserves. In addition to Production Mining Reserves, Development Mining required to access the
Production Reserves has been included. Development mining includes Proven and Probable
Reserves which have grades less than the “all in” cutoff grade of 6.1% zinc (required for
Production Reserves) but have zinc grades greater than the incremental cutoff grade of 2.3% zinc.
Development reserves are sourced from excavations that must be mined in order to extract higher
grade reserves and processing this material results in increased cash flow. Production reserves
include all excavations not classified as development reserves.
Table 1-2 Balmat Mineral Reserve Estimate as of December 1, 2015
Mahler Main
Mud Pond Main
Mud Pond Quartz Diopside
Mahler White Dolomite
Newfold
Subtotal Production
Mining
20
7
53
16
55
151
8.1%
12.4%
6.8%
10.6%
10.8%
9.1%
1.6
0.9
3.7
1.7
6.0
13.8
Probable Reserves
Mass
(kt)
Zn % Zn (kt)
Production Mining
169
9.5%
16.1
6
10.9%
0.6
89
11.4%
10.2
98
10.5%
10.3
363
10.2%
37.2
Mahler Main
Mud Pond Main
Newfold
Subtotal Development
Mining
0.2
0.4
0.6
4.3%
4.0%
4.1%
0.01
0.02
0.0
Development Mining
40
4.2%
1.7
26
3.7%
1.0
6
3.5%
0.2
71
4.0%
2.8
Source and Zone
Proven Reserves
Mass
(kt)
Zn % Zn (kt)
Proven + Probable
Reserves
Mass
(kt)
Zn % Zn (kt)
189
13
53
105
154
514
9.3%
11.7%
6.8%
11.3%
10.6%
9.9%
17.7
1.5
3.7
11.9
16.3
50.9
40
0.2
26
6
71
4.2%
4.3%
3.7%
3.5%
4.0%
1.7
-0.01
1.0
0.2
2.8
8.3%
11.7%
6.8%
9.8%
10.3%
19.5
1.5
3.7
12.8
16.5
9.2%
53.8
Mahler Main
Mud Pond Main
Newfold
26
7
54
16
56
6.5%
12.4%
6.8%
10.6%
10.8%
Production and Development Mining
1.7
209
8.5%
17.7
235
0.9
6
10.9%
0.6
13
3.7
54
1.7
115
9.7%
11.1
131
6.0
10
10.1%
10.5
160
Total Production and
Development Mining
152
9.0%
13.8
Notes:
1.
2.
434
9.2%
40.0
585
Mineral Reserves have been estimated at a zinc price of $0.92/pound.
Metallurgical recovery for zinc is 96%.
January 30, 2016
Page 18
3.
4.
Star Mountain
Resources Inc.
Mine losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine
excavations.
Zinc grades and contained zinc metal are run-of-mine estimates before applying metallurgical recoveries.
Cash Flow and Economic Analysis
The reserves mine plan was evaluated using constant dollar cash flow analysis, and the results are
summarized in Table 1-3. The schedule assumes a project start date of mid 2016 followed by one
year of pre-production activities and then 1-1/2 years of production for a total project duration of
2-1/2 years. Discounted payout occurs in the last year of production. The low capital requirement
results in a 25% IRR, 5% discounted cash flow of $3.2M and a profitability index of 1.2.
Table 1-3 Key Operating and After Tax Financial Statistics
Ore Mined for Processing
Zinc Grade
Contained Zinc
Capital Development
Mill Recovery
Zinc Recovered in Concentrate
Zinc Price
Smelter Deduction
Smelter Treatment Charges
Transportation Charges
Penalty Charges
Revenue
Operating Costs (Includes 15% Contingency
Smelter Charges
Royalty 0.3%
EBITA
Capital
Income Tax
Net Income
Discounted Cash Flow @ 5%
Payback Period
Profitability Index
Internal Rate of Return
Notes:
1.
585
9.2%
53.8
9,067
96%
51.7
$0.92
15%
$187.51
$21.51
$20.00
$80,788
($39,533)
($21,313)
($178)
$19,764
($14,745)
($590)
$4,427
$3,165
2.5
1.2
25%
Kt
kt
feet
kt
/pound
/ton concentrate
/ton concentrate
/ton concentrate
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
years
Profitability index (PI) is the ratio of payoff to investment of a proposed project. It is useful for ranking
projects as a measure of the amount of value created per unit of investment. A PI of 1 indicates break
even.
January 30, 2016
Star Mountain
Resources Inc.
Summary
Page 19
Conclusions
1. The Balmat Mine and mill is in good condition and can be placed into production with
minimal expense and time.
2. The mill is capable of producing high grade zinc concentrate suitable for sale to smelters
worldwide.
3. The mine is well situated being close to tide water and well connected by road and rail
service.
4. The mine is a low cost fully mechanized operation.
5. Mine equipment fleet has been carefully stored and is capable of exceeding the planned
production rate.
6. Upgrades to the mine ventilation system and modifications to the diesel equipment fleet
will be required to meet more stringent Diesel Particulate Matter (DPM) regulation adopted
since the mine was placed on care and maintenance.
January 30, 2016
Page 20
Star Mountain
Resources Inc.
2. Introduction
Terms of Reference and Purpose of this Report
This Report was prepared in accordance with the standards for disclosure of Industry Guide 7 of
the United States Securities and Exchange Commission in support the disclosure by Star Mountain
Resources Inc. of its mineral reserve estimate at the Balmat Mine dated January 30, 2016.
This Technical Report documents the status of the Balmat Mine and related infrastructure and
includes an estimate of mineral reserves based on drilling and sampling completed by the St.
Lawrence Zinc Company.
Qualification of the Authors
This report presents summaries based on a technical evaluation by three professionals. The
professionals are specialists in the fields of geology, exploration and mining data management,
mineral reserve estimation, and mine engineering.
None of the authors has any beneficial interest in Star Mountain or any of its subsidiaries or in the
assets of Star Mountain or any of its subsidiaries. The professionals will be paid a fee for this work
in accordance with normal professional consulting practice.
Sources of Information
The sources of information used for the preparation of this report include data and reports supplied
by Star Mountain staff. In addition, some information was included in the report which was based
on discussions with Star Mountain staff as related to their field of expertise.
Units of Measure
The units of measure used in this report are shown in Table 2-1 below. United States (US) Imperial
units of measure are used throughout this document unless otherwise noted. The glossary of
geological and mining related terms is also provided in Section 27 of this report. Currency is
expressed in United States dollars ($) unless stated otherwise.
January 30, 2016
Star Mountain
Resources Inc.
Introduction
Page 21
Table 2-1 Units of Measure.
US Imperial to Metric conversions
Linear Measure
1 inch = 2.54 cm
1 foot = 0.3048 m
1 yard = 0.9144 m
1 mile = 1.6 km
Area Measure
1 acre = 0.4047 ha
1 square mile = 640 acres = 259 ha
Weight
1 short ton (st) = 2,000 lbs = 0.9071 metric tons (t)
1 lb = 0.454 kg = 14.5833 troy oz
Assay Values
1 oz per short ton = 34.2857 g/t
1 troy oz = 31.1036 g
1 part per billion = 0.0000292 oz/ton
1 part per million = 0.0292 oz/ton = 1g/t
Coordinate Datum
Historic Balmat Mine data was recorded in a local mine grid. Surface and mineral rights have been
converted to NAD83 UTM Zone 18N US survey feet. Mine geology and engineering have not yet
converted and this data remains in the local mine grid.
January 30, 2016
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3. Property Description and Location
Property Description
The Balmat mine is in the historic Balmat-Edwards zinc district in St. Lawrence County, New
York. The Balmat-Edwards Zinc District has been active since the early 1900’s. Zinc is mined
from underground, and the historical workings are quite extensive. Surface facilities are situated
on property owned by SLZC in the town of Fowler. The company owns about 2,699 acres of fee
simple land in various locations within the Balmat-Edwards district, and holds mineral rights to
approximately 56,000 acres. The mineralization style is sediment-hosted lead-zinc. The BalmatEdward district mineralization is characterized by unique and favorable properties, including
unusually high zinc grades and low lead content. The Project is located towards the western end
of the district, which lies along the hinge line of the southwest northeast trending Sylvia Lake
Syncline.
Property Location
The Balmat Mine is located in St. Lawrence County in north-central New York. The mine and mill
complex is seven miles southeast of Gouverneur, New York at 44° 14’ 51” North latitude, 75° 23’
50” West longitude.
The 2,699 acres of surface rights owned by SLZC are divided among the Fowler, Edwards and
Pierrepont townships, containing, respectively 1,754, 703 and 242 acres. The 51,428-acres of
mineral rights are located in St. Lawrence and Franklin Counties and are comprised of multiple
individual parcels in selected areas in and around the mines.
The acquisition also includes transference of 4,774-acres of leased and optioned mineral rights in
portions of the Balmat, Hyatt and Pierrepont mine areas as well as in two areas of interest for
exploration purposes.
January 30, 2016
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Property Description and Location
Page 23
Figure 3-1 Balmat Mine Location Map
January 30, 2016
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Status of Mineral Titles
Leases have an initial 20-year term, renewable for an additional 20 years and are subject to a 4%
net smelter return royalty. One primary lease holding and five smaller leases are included in the
Balmat mine land package that covers 20% of the mineral rights of a major area of the Mahler ore
body. Four leases are held in the area around the Hyatt mine and 10 leases are held in the Pierrepont
mine area, covering 615 and 985 acres respectively. Leases comprising 300 acres are also held in
the Emeryville and Talcville exploration areas.
Optioned mineral rights have a renewable 5-year initial term. Option payments amount to $4/acre
per annum.
Land surface rights for the purpose of construction of buildings and for other purposes are
purchased from landowners, and SLZC owns the surface rights to lands where the surface facilities
of the Balmat mine, concentrator and tailings impoundment are located. In New York State,
mineral rights were part of the surface right title granted to the original owner and are deeded in
real property transactions. Mineral rights may be reserved during property transactions or they
may be transferred (severed) at the time of a real property transfer. Such reservations often date
back to the early 1800’s. Mineral rights may or may not be subject to property taxes depending on
the town taxing authority. The interest in mineral rights for a particular parcel is commonly
divided. For example, in the Town of Fowler, it is common to have one party own 4/5 (80%) of
the mineral rights, and have a second party own the remaining 1/5 (20%) interest.4
Mineral rights may be acquired from the owner by lease, or option or purchase. Leases may be
renewable and also may be subject to the payment of royalties to the land owner. Average royalties
for Balmat mineral reserves are estimated to average 0.3% over the life of the reserves.
4
HudBay Minerals Inc, Annual Information Form for the Year Ended December 31, 2008, March 30, 2009.
January 30, 2016
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Page 25
Figure 3-2 SLZ Land Position
January 30, 2016
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Table 3-1 Summary of Fee Ownership 5
APN
119.001-1-8
119.001-1-10
119.001-1-11
119.001-1-12
119.001-1-18./1
174.004-3-2
174.004-4-2
174.004-4-1
175.003-3-1.1
175.003-3-19.1
175.002-1-5.1
175.002-1-33
175.002-1-34.1
175.002-1-32.1
175.002-1-34./1
1.044-18
175.002-1-25./1
175.001-1-4./1
175.002-1-5./1
175.003-1-1./2
175.003-1-1./4
175.003-3-1.1/1
175.003-3-1.1/4
175.003-3-10./1
175.003-3-13./2
175.004-1-3./1
175.004-1-6./1
175.004-1-7./1
175.004-1-11./1
175.004-1-14./2
187.002-2-1./1
187.002-2-1./2
188.001-1-15./2
188.001-1-15./3
188.001-1-17./1
188.001-1-27./1
5
Town
Pierrepont
Pierrepont
Pierrepont
Pierrepont
Pierrepont
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Edwards
Surface
(acres)
Mineral
(acres)
Structure
Class
2014 Taxes
322
330
720
720
720
314
720
314
720
720
323
323
330
330
720
720
720
720
720
720
720
720
720
720
720
$816.57
$1,036.82
$3.39
$703.90
$84.71
$64.01
$265.19
$115.82
$822.96
$158.49
$3,553.96
$1,648.97
$829.04
$277.37
$216.41
$213.36
$201.17
$216.41
$798.56
$201.17
$201.17
$630.94
$1,767.83
$201.17
$201.17
$201.17
$201.17
$201.17
$323.08
$201.17
$201.17
$201.17
$201.17
$201.17
$201.17
$201.17
80.40
102.10
0.52
59.30
1.4
0.85
10.37
1.35
71.60
3.40
370.20
161.70
72.20
11.70
74.0
100.0
92.2
165.0
1044.0
72.0
18.8
70.0
Electrical?
115.0
53.1
58.0
20.0
63.8
97.4
62.0
30.0
80.9
25.0
169.1
65.6
73.8
St. Lawerence County Government, https://www.co.st-lawrence.ny.us/Departments/RealProperty/..
January 30, 2016
Star Mountain
Resources Inc.
APN
188.002-1-2./1
174.004-1-18
187.001-1-5
187.001-1-21.2
186.004-1-44
186.004-1-33.11
186.004-1-31
187.003-1-2
187.003-1-1
187.069-1-38
187.003-1-4.11
187.003-1-4.121
187.003-2-1.1
199.001-2-52
186.002-1-14.11/3
186.002-1-14.11/4
187.003-1-3./1
187.003-1-4.11/2
187.003-1-4.11/3
187.003-1-4.11/5
187.003-1-4.11/7
187.003-1-4.11/9
187.003-1-4.11/10
187.003-1-4.11/11
187.003-1-4.11/12
187.003-1-4.11/13
187.003-1-4.11/14
187.003-1-4.11/15
187.003-1-4.11/17
187.003-1-4.11/18
187.003-1-4.11/20
187.003-1-4.11/21
199.001-2-43.1/2
Owned Fee Parcels
Town
Edwards
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Fowler
Surface
(acres)
89.30
2.50
44.49
705.30
86.50
61.60
82.30
1.60
0.70
63.80
124.70
45.20
445.00
Mineral
(acres)
Structure
36.0
89.3
146.6
144.0
0.01
shaft 4
0.01
shop
electric
bldgs
werehse
paint, oil
timber stor
srv hoist
lg hoist
hoist house
railroad #4
mill
storage bldgs
storage
pipe shop 2
2698.68
2966.9
Page 27
Class
720
720
720
720
720
720
720
720
720
720
720
720
322
314
720
720
720
311 w
323
720
720
720
720
720
720
720
720
720
720
720
720
720
720
2014 Taxes
$201.17
$679.92
$194.73
$403.10
$2,266.39
$2,298.79
$2,096.43
$389.46
$7,822.09
$2,932.26
$3,049.43
$681.58
$389.46
$2,266.39
$19.46
$19.46
$194.73
$93,829.03
$19,547.72
$7,819.09
$39,095.43
$73,812.17
$117,286.28
$4,378.68
$4,691.45
$39,095.43
$54,733.62
$46,445.36
$11,728.62
$82,768.05
$15,638.19
$19,547.72
$537.48
$674,424.51
January 30, 2016
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Royalties
Royalties vary from 0% to 4% of net smelter return (NSR) among the Balmat mineral holdings.
Hudbay estimated an average royalty rate on future production of 0.3%.6
Environmental Liabilities
The risk of long-term environmental liability at Balmat due to water discharge is reduced by the
alkaline, acid-consuming nature of the host rock surrounding mineralization and tailings. Minor,
historic incursions above compliance levels have been corrected and mitigated by additions of
sodium sulfate to sources upstream from the water holding ponds. Water quality sampling data
from the Balmat No. 3 mine indicates that as the mine floods oxygen deficiency in the mine water
will reduce its ability to react with host rock mineralization and discharge should not require
further treatment.7
Reclamation has been completed to the satisfaction of the New York State Department of
Environmental Conservation (NYSDEC) for the Edwards mine site and mine tailings, some minor
routine monitoring may be required. The NYSDEC has reviewed the reclamation at the Hyatt mine
tailings and mine sites and the Pierrepont mine site and has released the reclamation bonds posted
for these areas. No further work is required.
The Balmat No. 2 tailings facility reclamation has been completed. The Balmat No. 2 mine site
has been partially reclaimed. The Balmat No. 2 shaft serves as secondary access to the underground
operations at the Balmat No. 4 mine and will be included in the final reclamation of the Balmat
No. 4 mine and concentrator complex.
The Balmat No. 4 mine and mine tailings reclamation is assured with a $1.8 million certificate of
deposit. The closure and reclamation plan in place will require the removal of mining specific
infrastructure and conversion of the mine site itself to a moderate to heavy industry zoned site.
Permits
According to the HMB AIF 2008, the extraction of minerals in New York State is governed by
the New York State Mined Land Reclamation Law and the rules and regulations adopted
thereunder. A Mined Land Reclamation Permit must be obtained from the Division of Mineral
6
7
Carter, Rob, “Balmat Mine Re-Opening Plan”, May 2010, HudBay Minerals internal company report.
Personal communication with Mr. Ryan Schermerhorn, Site Manager SLZC, December 3, 2015.
January 30, 2016
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Page 29
Resources of the Department of Environmental Conservation (DEC) in order to extract minerals
from lands within the state. Such permits are issued for annual terms of up to five years and may
be renewed upon application. Permit holders must submit annually to the DEC a fee based upon
the total acreage covered by the permit, up to a maximum of $8,000 per year.8
To the extent known, all permits required to operate the Balmat mine are active and in place.
Additionally, there are not any other significant factors or risks that may affect access, title or the
right or ability to perform work on the Balmat properties.
8
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4. Accessibility, Climate, Local Resources, Infrastructure and
Physiography
Access to the Balmat Mine
The property is reached by traveling southeast from Gouverneur, NY for 7.9 miles along NY-812
S, through the town of Fowler, to the mine offices on Sylvia Lake Road. The site lies 38 miles
south of Ogdensburg, NY via NY-812 S.
The nearest population center is Gouverneur with an estimated population of 6,000. The outlying
rural areas have a population of approximately 35,000. All modern services, including hospital,
hotel, and freight railway are present at Gouverneur. Syracuse, NY lies 100 miles to the southwest.
Ottawa, Ontario lies 90 miles to the north.
Climate
The area has typical mid-continental climate with moderate summers and cold winters, moderated
by the nearby Great Lakes. Average annual temperatures are 53° to 38°F. Summer highs may reach
85°F. Winter lows may reach -20°F. Annual average frost free days are 115. Annual average
precipitation is approximately 40-inches, 70% occurs as snow. The mine and process facility
operate year-round. Weather does not frequently or significantly affect operations.
Vegetation and Wildlife
The Balmat area is classified as hardiness zone 3b by the US Department of Agriculture (USDA).
Tree species include hardwoods like sugar maple, black cherry, paper birch and American Beech.
Common softwoods include white pine, red pine, scotch pine, and eastern hemlock. Ground cover
consist primarily of saplings, various grasses and forbs.
Animal species include whitetail deer, eastern gray squirrels and many varieties of songbirds, fish
and waterfowl.
Physiography
Balmat is situated on the northwest flank of the Adirondack Mountains. The Balmat mine site lies
within heavily forested bedrock ridges and interspersed low-lying marsh areas. Elevation at the
mine site is 710-feet MSL. Relief throughout the area ranges from 384 to 1,106 feet MSL.
January 30, 2016
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Accessibility, Climate, Local Resources,
Infrastructure and Physiography
Page 31
Various classes of streams drain to St Lawrence River. The area contains numerous ponds and
lakes. Soils vary from loamy sand soil to exposed bedrock
Local Resources and Infrastructure
The Balmat mine is a well-established facility with extensive underground workings and proven
processing facility. Significant upgrades were performed during the most recent operating phase.
Electrical power is supplied by the New York Power Authority (NYPA). NYPA has allocated 4
MW of power from the statutorily authorized Preservation Power Program to SLZC. State law
allocates power to Northern New York businesses in St. Lawrence, Jefferson and Franklin
Counties at rates approximately 40% less than the wholesale market.9
The majority of the workforce will be recruited and trained from the local population. Many of
the previous employees of the Balmat Mine are still in the area.
Local suppliers will provide most of the mine consumable needs.
Kelly, Brian, “NYPA power allocation could help create $33m investment, create 100 jobs at Gouverneur zinc mine”,
Watertown Daily Times, December 18, 2014.
9
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5. History
Introduction
Since 1915, six zinc mines have operated in the Balmat-Edwards district. Zinc was first produced
from the Edwards Mine in 1915 and from the Balmat No. 2 Mine in 1930. The other mines in the
district are the Balmat No. 3, Balmat No. 4, Hyatt, and Pierrepont.
Table 5-1 Balmat Edwards District Ownership History
Date
Company
Activity
1915 - 1987
St. Joe Minerals & Predecessors
1987 - 2001
Zinc Corporation of America
Sep. 2003 – Oct 2015
OntZinc (renamed HudBay Minerals in
December 2004)
Production from Edwards Mine in 1915 and
Balmat in 1930
Purchased from St. Joe and operated through
2001
Purchased ZCA and operated Balmat from
2005 to 2008
Purchased St. Lawrence Zinc from HudBay
Nov. 2015
The existing Balmat mill was constructed in 1971 by St. Joe Minerals and has a nameplate capacity
of 5,000 tpd. The mill has processed ore from the Hyatt, Pierrepont and Balmat Mines. The Balmat
No. 4 shaft is adjacent to the mill and accessed zinc mineralization from the 1300, 1700, 2100,
2500 and 3100 levels. All remaining reserves will be hoisted from the 3100 level.
Production History
The Balmat area has had a long history of active mining. Mines were operated in the district by St.
Joe Minerals and its predecessors from 1930 to 1987. Zinc Corporation of America purchased the
mines in 1987 and operated them until 2001, shutting down the Balmat operations when high grade
feed from the Pierrepont mine was exhausted. OntZinc, renamed HudBay Minerals Inc. in
December 2004, purchased the idle Balmat assets in September 2003. The Balmat #4 mine reopened in 2006 and operated into 2008. The mine was placed on care and maintenance in August
2008.
The Balmat #2, #3 and #4 mines, collectively known as the Balmat mine has produced 33.8 million
tons of 8.6% Zn since operations began in 1930. The greater Balmat-Edwards-Pierrepont district
has produced in excess of 43 million tons of 9.4% Zinc during the 76 years of operation by St. Joe
Minerals and its predecessor companies.
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History
Page 33
HudBay re-opened the Balmat #4 mine based on an October 2005 feasibility study. The mine was
closed in 2008 in response to declining prices and grade control difficulties. Table 5-2 shows recent
production for the Balmat and Pierrepont Mines. From 2006 – 2008 Balmat mined 855,000 tons
of mineralization grading 7% zinc from the Davis, Mud Pond, Mahler, Fowler, Upper Fowler and
Newfold zones. During this time HudBay invested $45M in capital improvements and mine
development.
Table 5-2 Balmat Mine Historical Production10, 11
Year
1998
1999
2000
2006
Ownership
ZCA
ZCA
ZCA
HudBay
2007
2008
Total
HudBay
HudBay
Balmat No. 4 Mine
kt
Zn%
579
6.7%
627
6.5%
581
6.1%
178
6.1%
367
310
2,642
7.0%
8.0%
6.7%
Pierrepont Mine
kt
Zn%
166
12.8%
106
13.5%
134
12.1%
406
12.8%
Concentrate Produced
kt
Zn%
102
55.5%
93
55.4%
88
55.0%
No Commercial
Production
38.6
57.2%
37.3
57.3%
359
56.1%
Historical Mineral Reserve Estimates
Hudbays’s historic mineral reserves are presented in Table 5-3. Star Mountain is not treating these
historic estimates as a current mineral reserves. The authors are unaware of methods, parameters
or assumptions used to generate these historic estimates and cannot comment to their accuracy.
10
HudBay Minerals Inc., Balmat No. 4 Zinc Mine Reopening Feasibility Study, Internal Company Report, October
2005.
11
Carter, Rob, P. Eng, “Balmat Re-Opening Plan”, HudBay Minerals, May 2010
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Table 5-3 Balmat Historic Mineral Reserves
Year
2005 12
2006 13
2007 14
2008 15
Proven
Mass (000’s
Zn Grade
metric tonnes)
686
10.6%
912
10.1%
1,000
9.5%
0
0
Probable
Mass (000’s
Zn Grade
metric tonnes)
1,023
11.4%
1,163
11.4%
890
10.8%
0
0
Proven and Probable
Mass (000’s
Zn Grade
metric tonnes)
1,709
11.0%
2,075
10.8%
1,891
10.2%
0
0
12
14
15
13
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Geological Setting and Mineralization
Page 35
6. Geological Setting and Mineralization
Regional, Local and Property Geology
The Balmat mine is located in a region with a very long and complex geological history. The host
rocks were deposited during the mid-Proterozoic era between roughly 1300 to 1000 Ma (megaannum, millions of years before present), near the edge of the North American craton. Due to their
position near the margin of this tectonic domain, they were subject to tectonic forces that, over
billions of years, assembled and broke up two supercontinents- Rodinia in the late Proterozoic,
and Pangaea in the late Paleozoic to early Mesozoic. Zinc deposition is interpreted to have
occurred contemporaneously with deposition of the rock units, which indicates that the originally
tabular zinc bodies were intensely deformed and metamorphosed along with their host rocks
through eons of varying tectonic forces.
The Balmat mine is located near the eastern edge of the Canadian Shield, a vast expanse of very
old exposed bedrock which can be described as the core of the North American continent. The
Canadian Shield was assembled in an ancient zone of prolonged tectonic convergence. During the
Archean and Proterozoic eons, tectonic forces were focused toward the region that is now the
Canadian Shield. As tectonic plates moved toward this zone they collided with each other,
resulting in compressive forces that caused extensive uplift of continental crust high above sea
level. The forces were active for a very long time, and material from advancing plates was
gradually added to the crustal core. The added material is known as accreted terranes. The
Canadian Shield was built as terranes agglomerated over time.16 In Figure 6-1, the Canadian Shield
can be seen as the red and orange band encircling Hudson Bay.
One of the final, major series of tectonic events that occurred before tectonic forces shifted away
from the Canadian Shield is known collectively as the Grenville Orogeny. The Grenville Orogeny
includes a series of exceptionally intense accretionary events which occurred during the
Mesoproterozoic era, as assembly of the supercontinent Rodinia neared completion. The scale of
the orogeny is analogous to the present day Himalaya.17 The series of terranes that were accreted
16
Marshak, Stephen, Essentials of Geology (Third Edition), 2009.
Tollo, Richard P.; Louise Corriveau; James McLelland; Mervin J. Bartholomew (2004). "Proterozoic tectonic
evolution of the Grenville orogen in North America: An introduction". In Tollo, Richard P.; Corriveau, Louise;
McLelland, James; et al. Proterozoic tectonic evolution of the Grenville orogen in North America. Geological Society
of America Memoir 197. Boulder, CO. pp. 1–18.
17
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during the Grenville orogeny are collectively known as the Grenville Province. The Adirondack
Mountains, which contain the Balmat mineralization, are part of the Grenville Province. In Figure
6-1 the Grenville Province, shown in light orange, is circled.
Following the Grenville events, tectonic forces shifted away from the Canadian Shield and rifting
commenced. Mountain ranges underwent collapse.18 Erosion outpaced uplift. Over billions of
years of passive tectonism, the Canadian Shield was eroded to low relief. The area outboard from
the Grenville province, including the area that is now the Adirondacks, subsided below sea level
and eventually accumulated a cover of Paleozoic sediment. Paleozoic sedimentary deposition
began with the late Cambrian to early Ordovician Potsdam Sandstone, followed by a limestonedolostone sequence.19 Potsdam sandstone can be identified in the project area.
Magmatism accompanied both orogenesis and rifting, and as a result the Grenville Province
contains many igneous intrusions of various ages, which have been metamorphosed at varying
intensities. These are not involved in mineral deposition at Balmat.
Following the late Precambrian to early Cambrian era of passive tectonism and the late Cambrian
to early Ordovician period of deposition, a new series of tectonic events began that would build
the Appalachian Mountains. These events are called the Taconic, Acadian and Alleghenian
orogenies. During the middle Ordovician Taconic and the mid to late Devonian Acadian orogenies,
the area that would become the Adirondacks was buried, followed by uplift and exhumation during
the late Pennsylvanian to Permian Alleghenian orogeny.20 By the end of the Alleghenian orogeny,
the Appalachains had reached heights comparable to the current Rocky Mountains.21 The
Adirondacks had not yet been uplifted.
18
Tollo, Richard P.; Louise Corriveau; James McLelland; Mervin J. Bartholomew (2004). "Proterozoic tectonic
evolution of the Grenville orogen in North America: An introduction". In Tollo, Richard P.; Corriveau, Louise;
McLelland, James; et al. Proterozoic tectonic evolution of the Grenville orogen in North America. Geological Society
of America Memoir 197. Boulder, CO. pp. 1–18.
19
Derby, James; Fritz, Richard; Longacre, Susan; Morgan, William; Sternbach, Charles (2013-01-20). The Great
American Carbonate Bank: The Geology and Economic Resources of the Cambrian-Ordovician Sauk Megasequence
of Laurentia, AAPG Memoir 98.
20
Share, Jack. (2012, December 8). The Adirondack Mountains of New York State: Part II- What do we know about
their geological evolution? Retrieved from http://written-in-stone-seen-through-my-lens.blogspot.com/2012/12/theadirondack-mountains-of-new-york.html.
21
Hatcher, R. D. Jr., W. A. Thomas & G. W. Viele, eds. The Appalachian-Ouachita Orogen in the United States.
Boulder: Geological Society of America, 1989.
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Uplift of the Adirondack Dome is generally attributed to the passage of the North American plate
over the Great Meteor Hotspot in the early Cretaceous. The theory lacks consensus because the
Adirondack dome lies somewhat south of the apparent track of the Great Meteor Hotspot, and
because of a lack of direct evidence such as volcanic rock deposition attributable to hotspot
volcanism. Taylor and Fitzgerald suggest the Adirondacks were formed through dissection of a
plateau. In Figure 6-1, an arrow points to the Adirondack Mountains.22
Figure 6-1 USGS Bedrock Map of North America 23
22
Taylor, Joshua P. and Fitzgerald, Paul G., 2011, Low-temperature thermal history and landscape development of
the eastern Adirondack Mountains, New York: Constraints from apatite fission-track thermochronology and apatite
(U-Th)/He dating, GSA Bulletin, March/April 2011; v. 123; no. ¾; p. 412-426.
23
Barton, Kate E., Howell, David G., Vigil, Jose F., Reed, John C., and Wheeler, John O., 2003.USGS Geologic
Investigations Series I-2781, Version 1.0. The North America Tapestry of Time and Terrain.
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In Figure 6-1, the Canadian Shield can be seen as the red and orange band encircling Hudson Bay,
the Grenville Province is the light orange area inside the ellipse, and the arrow points to the
Adirondack Mountains.
The Adirondacks are considered an outlier of the Grenville Province since they are nearly
surrounded by Proterozoic sediments. The Adirondack Dome may have been forced upwards
through the Proterozoic sediments by the Great Meteor Hotspot. A narrow strip of
Mesoproterozoic bedrock called the Frontenac Axis connects a section of the northwestern flank
of the Adirondacks to the rest of the Grenville Province. The Adirondacks are lithologically and
topographically divided into two main zones, the Highlands and Lowlands. The Lowlands
comprise the relatively small northwestern portion of the Adirondacks, and the Highlands make
up the main body of the Adirondack dome. The Highlands and Lowlands are divided by the
Carthage-Colton shear zone.24 The Lowlands have been metamorphosed to amphibolite grade, the
Highlands to higher granulite grade.25 Balmat is located in the Adirondack Lowlands.
The rocks of the Adirondack Lowlands are part of the Grenville Supergroup. The Grenville
Supergroup is a group of metamorphosed sedimentary terranes that compose a section of the
Grenville Province known as the “Central Metasedimentary Belt”.26 The rocks of the Adirondack
Lowlands were deposited in the Trans-Adirondack back-arc basin prior to final accretion of the
Grenville Province.27. The Adirondack Lowlands have been divided into three stratigraphic
formations: the Upper Marble Formation, the Popple Hill Gneiss, and the Lower Marble
Formation. The zinc mineralization at Balmat is contained in the Upper Marble Formation.
The Upper Marble Formation is a sequence of shallow water carbonates consisting of multiple
series of dolomitized marbles and quartz diopsides with occasional schists and periodic
occurrences of anhydrite. It is divided into 16 units. Geologists working in the Balmat-Edwards
24
Mezger, K., van der Pluijm, B. A., Essene, E. J., Halliday, A.N., 1992. The Carthage-Colton mylonite zone
(Adirondack Mountains, New York); the site of a cryptic suture in the Grenville Orogen? Journal of Geology 100,
630-638.
25
McLelland, James M., Selleck, Bruce W., and Bickford, M.E., 2010, Review of the Proterozoic evolution of the
Grenville Province, its Adirondack outlier, and the Mesoproterozoic inliers of the Appalachians, in Tollo, R.P.,
Bartholomew, M.J., Hibbard, J.P., and Karabinos, P.M., eds., From Rodinia to Pangea: The Lithotectonic Record of
the Appalachian Region: Geological Society of America Memoir 206, p. 1-29, doi: 10.1130/2010.1206(02).
26
Davidson, A., An Overview of Grenville Province Geology, Canadian Shield, in Lucas, S.B. and St-Onge, M.R.,
1998, Geology of the Precambrian Superior and Grenville Provinces and Precambrian Fossils in North America,
Geology of Canada, no. 7, p. 205-270.
27
Chiarenzelli, Jeff, Kratzmann, David, Selleck,Bruce, deLorraine, William, 2015. Age and provenance of Grenville
supergroup rocks, Trans-Adirondack Basin, constrained by detrital zircons Geology, February 2015, v. 43, p. 183186.
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zinc district have recognized distinct marker horizons within the marble which allow them to
identify favorable locations for zinc mineralization. The marker horizons include a pyritic schist,
a dark gray dolomitic marble, a tremolite schist and the periodic anhydrite beds. The anhydrites
are of particular importance because zinc deposition appears to have followed anhydrite
deposition. Units 6, 11 and 14 contain massive stratiform sphalerite bodies occurring soon after
anhydrite beds in the lithologic sequence. Units 6-10 locally host semi-massive crosscutting
sphalerite bodies where structures intersect sphalerite deposits contained in unit 6, 11 or 14. Figure
6-2 shows the Balmat stratigraphic section.
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Figure 6-2 Balmat Stratigraphic Section
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As a result of the intense tectonism in the Balmat region’s geologic history, the Upper Marble is
extensively deformed. The predominant structure is the Sylvia Lake Syncline, a major southwest
to northeast trending fold lying between Balmat and Edwards. Aerial exposure of the Upper
Marble formation is limited, and the exposure generally trends along the axis of the syncline.
Sphalerite (zinc sulfide) tends to occur within axial regions and limbs of local scale folds and faults
associated with the Sylvia Lake Syncline. In Figure 6-3, the mapped surface expression of the
Upper Marble Formation (hashed area) is shown superimposed on a geologic map of the
Adirondack Lowlands. The locations of the zinc mines mark the axial trace of the Sylvia Lake
Syncline.
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Figure 6-3 Geologic Map of the Balmat Area 28,29
The zinc deposits at Balmat are thought to have been syn-depositional, meaning they were
deposited in sequence with the marbles that host them. Their original geometries would have been
tabular as a result of being deposited on relatively flat areas of a sedimentary basin. Their current
morphologies and positions are a response to ductile-brittle kinematic stresses. Extreme contrasts
in ductility exist in the Upper Marble Formation, ranging from very ductile anhydrite and sulfide
(sphalerite) beds to moderately ductile dolomitic, calcitic and serpentinous marbles to brittle
Rivard, David, Stephens, Mathiew, “Balmat Reserves and Exploration Potential”, Beaufield Resources Internal
Company Report, February 3, 2013.
29
Catalano, Joseph, Hollocher, Kurt, “Geology of the Adirondack Lowlands”, Colgate University,
http://www.colgate.edu/facultysearch/FacultyDirectory/wpeck/adirondacklowlands.
28
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siliceous interlayered quartzite and diopside. Anhydrite and sufide beds are relatively thin, and
sulfide beds are spatially restricted, but their tendency to occur together consolidates ductile zones.
When exposed to stress, the brittle rocks fractured, and the structures evolved into thrust faults in
the ductile rocks. The thrust faults served to propagate folds. The tendency of folds to form in the
most ductile regions caused the sphalerite to be concentrated in the noses of folds. Balmat
geologists have also suggested that sphalerite may have been remobilized towards the noses of
folds during multiple episodes of metamorphism. Figure 6-4 is a cross section through the Balmat
mine area which illustrates the extent of deformation of the Upper Marble Formation.
Figure 6-4 Section Through Balmat Mine Area
Mineralization
Massive and semi-massive sphalerite bearing orebodies occur in siliceous dolomitic and evaporitebearing marbles of the Upper Marble formation of the Balmat-Edwards marble belt. These zincsulfide orebodies lie in the core of the Sylvia Lake syncline, a major poly-deformed fold lying
between Balmat and Edwards. Zinc mineralization tends to follow evaporate deposition in the
stratigraphic sequence. The region has experienced multiple metamorphic and intrusive events and
large-scale ductile structures are common.
The Balmat property contains 14 known zones of zinc mineralization. The deposits tend to occur
in clusters. Three clusters have been defined consisting of three to five orebodies each. Geometry
of mineralization varies, ranging from tabular to podiform, shallow to steeply dipping. Areas
defined to date contain tonnages ranging from roughly 0.5 million tons to over 10 million tons.
Typical thickness ranges from two feet to 12 feet thick. Mineralization tends to be very continuous
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along strike, ranging from 50 feet to 800 feet. Plunge-lengths may exceed 6000 feet. Figure 6-5
shows the locations of zinc orebodies currently being considered for further production.
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Figure 6-5 Locations of Zinc Bodies Included in the Current Investigation
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Massive orebodies are stratiform, and semi-massive orebodies are crosscutting and stratabound.
Balmat geologists conceptualize a parent-daughter relationship, where the stratiform ore body is
the parent and the crosscutting ore body is the daughter. The parent-daughter model suggests that
daughters are formed from sphalerite remobilized from parents in unit six during metamorphism.
The sphalerite migrates along fault surfaces up and down dip from the parents, potentially as far
as the Unit 10 anhydrite. It is thought that ductile flow of Unit 10 anhydrite closes fault surfaces
and halts migration of remobilized sphalerite. Daughter orebodies share similar trace element
geochemical signatures with their parent orebodies. They often contain significant quantities of
occluded wall rock material. Balmat geologists have experienced exploration success using the
parent-daughter model, defining four new orebodies in the 1990’s.
The mineralization at Balmat has been classified as Sed-Ex in origin. The composition of the
mineralization is unique, composed of primarily massive sphalerite and only minor galena and
pyrite. The zinc-lead ratio is approximately 35:1. Balmat has higher-than-average grade for a
sediment-hosted lead-zinc deposit. Typical grades of sediment hosted lead-zinc deposits may
average 7.9% Pb and Zn combined.30 The average grade mined at Balmat is 8.6% Zn, while the
average for the greater Balmat-Edwards zinc district is even higher at 9.4% Zn. Some Balmat
geologists have theorized that intense metamorphism may have concentrated the sphalerite,
perhaps fractionating zinc sulfide (sphalerite) from lead and silver sulfide (galena) and
remobilizing them to different locations leading to the high zinc grades observed at Balmat.
30
Leach, D.L., Taylor, R.D., Fey, D.L., Diehl, S.F., and Saltus, R.W., 2010, A deposit model for Mississippi ValleyType lead-zinc ores, chap. A of Mineral deposit models for resource assessment: U.S. Geological Survey Scientific
Investigations Report 2010-5070-A, 52p.
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Deposit Types
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7. Deposit Types
The Balmat orebodies are broadly classified as Sedex in origin, forming initially in a marine
sequence of carbonates and evaporates. They were deeply buried, metamorphosed to amphibolite
grade and strongly deformed during the late Precambrian Grenville Orogen.
Sedex-type Deposits
The term sedex is derived from the words sedimentary and exhalative to denote sedimentary
exhalative processes. Multiple theories have been suggested for the process of formation of sedex
deposits. In a 2009 USGS open–file report, Emsbo set forth a set of criteria for the assessment of
sedimentary exhalative deposits based on available work. Characteristics of sedex deposits were
summarized based on empirical, physiochemical, geologic, and mass balance data. In brief
summary, Emsbo’s synthesis of sedex deposit data indicates that the deposits are formed by the
following processes:
Sedex deposits are formed in saltwater sedimentary basins within extensional tectonic domains.
Large volumes of brine must migrate through the basin to generate sedex deposits. The brines are
generated by extensive and rapid seawater evaporation on large evaporative carbonate platforms.
The brine is denser than sea water, so it sinks. It may infiltrate porous terrigenous basin fill
sedimentary layers. As it migrates through the terrigenous sediments towards the lowest parts of
the basin it leaches metals. Temperature increases as basin depth increases, so the brines heat up.
When the brine encounters extensional fault surfaces it may migrate up the faults to the basin floor.
Once exhaled into the basin, brines interact with the distal basin facies rocks, which are amenable
to H2S generation, which precipitates the metals as zinc and lead sulfide.
These processes as they relate to Balmat will be discussed below.
7.1.1. Sedimentary basin: carbonate platform and brine generation
Sedex deposits are formed from brines generated by extensive and rapid seawater evaporation.
Large evaporative carbonate platform areas are needed to produce the volumes of brine required
to form sedex deposits. Evaporation is rapid in low latitudes and brines are concentrated best in
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confined basins with restricted flow to the open ocean.31 These evaporative conditions are well
recorded in the sedimentary record at Balmat. The periodic anhydrite beds at Balmat, as well as
the dolomitization of the Upper Marble are indicative of evaporative conditions. A paleolatitude
reconstruction by Cocks and Torsvik, places the Balmat area at a latitude conducive to rapid
evaporation during the time of deposition.32 The rocks were deposited in the Trans-Adirondack
back arc basin, an extensional environment with restricted flow to the open ocean. The carbonate
platform represents the sedimentary basin’s proximal facies.33
7.1.2. Sedimentary basin: rift-fill clastics and supply of metals
As brines are generated on the evaporative carbonate platform, they begin to sink due to their
increased density. Sedimentary basins that host sedex deposits characteristically have a thick layer
of coarse clastic syn-rift oxidized terrigenous sediments underlying the evaporites in the
sedimentary sequence. When the dense brines encounter this layer, the coarse permeable
terrigenous sediments provide the fluid pathway for the dense brines to migrate laterally towards
the lowest regions of the basin. The oxidized terrigenous sediments also provide the metal source
for brines that form sedex deposits. As the brines migrate, metals are scavenged and transported
in the brine as chloride complexes. Oxidized syn-rift sediments buffer ore fluids to compositions
amenable to metal scavenging because they are low in organic carbon and high in reactive iron.34
Mass balance studies indicate that large volumes (thousands of km3) of clastic sediments are
required to generate enough metals to form a sedex deposit. Fluid inclusion studies indicate that
sedex deposits are formed from brines with temperatures between 100-200°C. Metals are most
soluble in this temperature range. Brines increase in temperature as they migrate because basin
temperature increases with depth. Sedimentary fill in the basin must reach at least 3 km depth to
generate the required temperatures.35 At Balmat, the clastic sequence may be represented in the
Popple Hill Gneiss, which underlies the Upper Marble Formation. The Lower Marble Formation,
which underlies the Popple Hill Gneiss, also includes some clastic members. The original extent
31
Emsbo, Poul, 2009, Geologic criteria for the assessment of sedimentary exhalative (sedex) Zn-Pb-Ag deposits: U.S.
Geological Survey Open-File Report 2009-1209, 21p.
32
Cocks, L. Robin M. and and Torsvik, Trond H., 2005. Baltica from the late Precambrian to mid-Palaeozoic times:
The gain and loss of a terrane’s identity: Elsevier Earth-Science Reviews 72 (2005) p 39-66.
33
Chiarenzelli, Jeff, Kratzmann, David, Selleck,Bruce, deLorraine, William, 2015. Age and provenance of Grenville
supergroup rocks, Trans-Adirondack Basin, constrained by detrital zircons Geology, February 2015, v. 43, p. 183186.
34
Emsbo, Poul, 2009.
35
Ibid
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Deposit Types
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and thickness of the clastics is difficult to determine because the Grenville Supergroup is
allocthonous; the rocks have been thrust out of depositional position and extensively deformed.
7.1.3. Tectonic and Sedimentary Structure
Warm, metal-laden migrating brines may eventually encounter extensional fault surfaces and
migrate up the faults to the basin floor. Workers describing sedimentary basins have divided the
basins into three orders of scale. First-order sedimentary basins which host sedex deposits are
greater than 100 km in length. Within the basin, second-order basins occur on the scale of tens of
kilometers. Second-order basins are controlled by extensional faults forming half grabens in the
basin. The sedex model suggests that brines migrate up these faults. Some indicators of secondorder basin bounding faults include syn-sedimentary faulting (evidenced as abrupt platform-slope
facies transition) and intraformational breccias. Faults that were fluid conduits may be identified
by Fe and Mn alteration and/or silicification, and sometimes tourmalinization. Third-order basins,
on the scale of a few kilometers, represent bathymetric lows. Sedex deposits typically occur in
third-order basinal areas within a few to tens of kilometers of second-order faults. Some indicators
of bathymetric lows, where metals are likely to be deposited, include increasing debris flow
thickness and increasing organic matter and pyrite concentrations in reduced sediments
representing distal basin facies. At Balmat, intense metamorphism has obliterated the more subtle
sedimentary features that characterize sedex deposits, and post-depositional deformation has
overprinted tectonic features.
7.1.4. Deposition of Sulfides
Dense brines exhaled onto the basin floor tend to pool in bathymetric lows. These lows occur in
deeper distal basin facies, which tend to be anoxic. The distal facies is typically represented by
fine-grained clastic sedimentary rocks like shale. Sedex-hosting shales are unusually high in
organic matter. The reducing conditions of third order basins preserve organic matter. Hydrogen
sulfide (H2S) is generated in this depositional environment by bacterial sulfate reduction. Bacteria
living in the highly carbonaceous distal sediments or thermal vents oxidize the organic compounds
in the shale while reducing sulfate (SO42-) from sea water to generate H2S. The H2S reacts with the
pooled brines and precipitates the contained metals as zinc sulfide (sphalerite, (Zn,Fe)S))and lead
sulfide (galena, (PbS)). Another possible mode of generation of H2S is by thermogenic reduction
of organic matter. The Balmat deposits occur in proximal facies rocks as opposed to third-order
basin distal facies rocks, which is at variance with the sedex model. The Upper Marble does
contain a pyritic schist unit underlying the marble units that contain zinc deposits. Fluid inclusion
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studies indicate that sediment-hosted lead-zinc deposits, both sedex and MVT (Mississippi Valleytype), originate from similar brines.
Sedex deposit formation may be limited to Proterozoic and Phanerozoic time since marine sulfate
(SO42-) likely did not exist prior to the accumulation of oxygen in the atmosphere. Balmat was
deposited within this timeframe. Sedex deposits may correspond with regional and global anoxic
events, which would have helped preserve higher concentrations of organic carbon during
transport to anoxic distal basin facies.
Figure 7-1 Illustration of the Process of Formation of Sedex Deposits36
36
Emsbo, Poul, 2009, Geologic criteria for the assessment of sedimentary exhalative (sedex) ZnPb-Ag deposits, U.S. Geological Survey Open-File Report 2009-1209, 21p.
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Exploration
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8. Exploration
Star Mountain Resources has not conducted any exploration work on the property. The property
is at an advanced stage of development with a calculated Mineral Reserve supported by a mine
plan. Balmat geologists plan to resume exploration activities based on available geologic data once
production has been reestablished. An overview of recent exploration completed by previous
operators is summarized below.
Geotech Ltd of Aurora, Ontario flew a helicopter borne VTEM (versatile time domain
electromagnetic) geophysical survey over the Adirondack lowlands of northern New York on
behalf of HudBay Minerals. The geophysical contractor flew 8,100 line miles and provided
gridded magnetic and electromagnetic data to HudBay Minerals geophysical department for
processing and modeling. The survey area covered a nominally rectangular area of 47- by 22miles, including the greater Balmat mining district. Flight lines were flown on 650 foot line
spacing. The geophysical database was forwarded to the geological department at Balmat for
interpretation and anomaly ranking based on correlation of observed physical parameters and
deposit characteristics. The interpretative team determined that linear anomalies parallel regional
structural fabrics and trends, known pyrite-rich stratigraphic units were readily detected and that
anomalies in massive carbonate sequences are, at best, weakly responsive.
The interpretative team also defined the basic ranking criteria to be based on anomalies of “ore
body” sized lengths over 2 or 3 parallel flight lines. The anomalies themselves should reflect
known geological characteristics, meaning those in areas of carbonate and calc-silicate host rocks
should not be as responsive as those in pyrite bearing or graphitic sequences. Ten high quality
exploration areas were identified outside the Balmat mining district. Two areas are present within
the Balmat district but outside of the existing mine footprint and eight areas lie within the existing
mine footprint. Figure 8-1 shows the area covered by the geophysical survey and areas where low
resistivity was recorded.37
VTEM is a type of induced polarization (IP) which uses an in-loop transmitter receiver configuration.
The apparatus is maneuvered by helicopter. Induced Polarization is an exploration technique used to
delineate sulfide concentrations. The technique measures the effects of an applied electrical field on
lithologic units. The chargeability of a lithologic unit depends on its physical and chemical properties,
including sulfide content (sulfides generally tend to be conductive). A current is applied to the ground
37
Rivard, David and Stephens, Mathieu, Beaufield Resources, 2013. Balmat Reserves and
Exploration Potential, Balmat internal document, 25p.
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and measurements are recorded by synchronized apparatus attached to a dipole-dipole electrode array.
Charge is constantly measured at the dipoles as the current is turned on and off. Multiple runs are
completed to check for data consistency. Apparent resistivity and chargeability data are then
interpreted to identify anomalies. IP can measure from the surface to significant depths.
Figure 8-1 Geophysical Survey Area
A few anomalies were sampled with negative results. Because Sphalerite is not a particularly good
conductor, and the Balmat-Edwards district mineralization contains very little pyrite and galena
(which are relatively conductive), geophysical surveys of this type are of limited use for Balmattype zinc exploration.
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Drilling and Sampling Methodology
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9. Drilling and Sampling Methodology
Drilling at Balmat is exclusively core drilling. The mine owns a Diamec 262 underground drill
using AW-34 size core. Three contract Longyear underground drills that use BQ size core were
utilized during the period after 2005. The drillhole database contains 3,582 drill holes completed
at various times in the project’s history within the Balmat and Edwards areas. Many of the holes
are peripheral to the current project area. The mineral inventory estimate was calculated using
assay values from 524 holes.
According to Balmat geologists, core was handled in the following manner by the Balmat mine
geology department during the most recent phase of production. Core was removed from the drill
string by the driller and placed in a wooden core box. Wooden blocks were used to mark the ends
of individual core runs. The geologist then logged the core and selected and marked the intervals
to be prepared for assay samples.
The core was then transported to the surface where the marked assay samples were split. One half
split was returned to the core box, the other half split was sent to the assay laboratory.
The geology logs of the drill holes and the assay results are archived as hard copy and entered into
a digital database.
Drilling conditions in the Upper Marble Formation are generally very good, and core recovery is
typically excellent. Zinc mineralization is visible, and sample intervals are chosen by trained
geological staff. Samples are analyzed by a reputable independent assay laboratory. The authors
know of no issues that would negatively impact the accuracy and reliability of drill sample results
at Balmat.
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Figure 9-1 Plan View of Drilling in the Current Project Area
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Drilling and Sampling Methodology
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Figure 9-2 Representative Drill Section A-A’
Figure 9-3 Representative Drill Section B-B’
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Figure 9-4 Representative Drill Section C-C’
No drilling has been conducted by or on behalf of Star Mountain Resources. When the mine was
shut down in 2008 due to low zinc prices, significant mineralization had been defined by HudBay.
A current mine plan has been prepared for the next phase of mining based on existing drill data.
Delineation and exploration drilling should resume from underground drill platforms after the
mine resumes production.
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10.
Sample Preparation, Analysis and Security
Page 57
Sample Preparation, Analysis and Security
Core Sample Preparation
Prior to the 2003 acquisition of the Balmat mine by HudBay Minerals, all assaying was performed
at the Balmat mine assay laboratory. Fine pulps from the core drilled between the years 1995 and
2000 were stored at the Balmat #2 core facility. Pulps were marked with drill hole identification
and assay interval.
Assays from these years were not supported by a defined quality assurance/quality control
protocol. HudBay Minerals selected 86 fine pulps from this population, representing six Balmat
orebodies to test for analytical integrity for the 1995 to 2000 drilling. The pulps were packaged
inside 5-gallon buckets along with four certified reference standard samples and shipped to
HudBay’s Flin Flon, Manitoba assay laboratory for check analyses. The Flin Flon laboratory
visually inspected each pulp to assess oxidation and preparation effectiveness with particular
attention paid to sample size grading. Zinc assays were completed for each sample.
The Flin Flon laboratory reported consistently higher results than those obtained by the Balmat
lab. The certified reference standards were all within acceptable limits.
HudBay’s practice at Balmat is fully compliant with modern quality assurance, quality control
protocols and uses the preparation and analytical services of certificated commercial laboratories.
The insertion of blanks and standards are as follows:
Blank samples are inserted into the assay sample stream at intervals of 50 samples. One of four
commercially available certified reference standards is inserted at intervals of 20 samples. And
finally, the analytical laboratory prepares a duplicate pulp for each 20th sample and returns it to
the Balmat geology department. The duplicate pulp is then sent to the Flin Flon assay laboratory
for a check against the original, commercial laboratory analyses.
The certified reference standards were obtained from Ore Research and Exploration PTY Ltd. ALS
Chemex was the commercial laboratory used for the 2005 drilling campaign and the 2006 to
August 2008 operations period.
It is the authors’ opinion that these protocols and practices are adequate to ensure the integrity of
the assay database.
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11.
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Data Verification
Data Validation Procedures
The authors of this report have partially reviewed the drill hole data set used for the current Mineral
Reserve estimate. Data was provided for 420 holes drilled since the 2006 mine re-opening. 270 of
those holes contributed to the current estimate, along with 254 holes drilled prior to 2006 for a
total of 524 holes used. Source data was not available for holes drilled prior to 2006. The authors
reviewed assay data for 27 holes, representing about 5% of the data. Assay values from the
database were verified by correlation with original assay certificates and by review of QA/QC
procedures and results.
Datasets Submitted for Evaluation
Star Mountain Resources personnel provided the authors with the Balmat database and some of
the corresponding raw data files (source data) for the validation. The authors analyzed a semirandom population of data representing five percent of the relevant drill samples. The data subset
used for the verification process was selected in an attempt to represent the data spatially and
temporally. Because source data was not available for holes drilled prior to 2006, the verification
was temporally skewed with newer holes.
Values were compared for direct correlation, record-by-record, between the original source data
and the database. The intent of the data validation is to demonstrate a positive correlation between
source data and the database covering 5% of the data, which establishes reasonable confidence in
the data for use in the Mineral Reserve estimate.
Data categories reviewed include:
Collar locations: raw collar survey reports were unavailable. Collar survey data was manually
recorded on geology logs for most of the holes, and that data was compared to the collar file in the
database. The data recorded on the geology logs appears to be approximate location, not surveyed
location, as most are recorded as whole numbers. Three of the holes had discrepancies in the
easting, northing or elevation fields of one or two feet. One hole, 1988-F, was observed to have a
significant error in the elevation value.
Downhole surveys: raw downhole survey reports were unavailable. Survey data was manually
recorded on geology logs under the header “Tro-Pari survey.” The Tro-Pari records were compared
to the survey file in the database. These tended to match, but the authors observed occasional
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Data Verification
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instances of rounding the depth record to the nearest 5 feet or dropping a decimal from the dip or
azimuth record.
Lithology: scanned paper geological logs were provided, however the database used for the
reserve estimate did not include a geology field, so a review was not performed.
Sample intervals: sample intervals were written on sample bags and recorded by the assay
laboratory as part of the sample ID. The intervals on the assay certificates were compared to
intervals in the assay field of the database. Three mismatches were identified. These were
compared to the geology logs, and it was determined that the assay laboratory made a recording
error and the database value was correct.
Assays: original ALS Chemex assay result certificates in PDF format for five percent of the drill
holes used in the mineral inventory estimate were compared with the database. Significant
mismatches were noted, particularly in holes drilled later in the 2006-2008 mine operation. It
appears that significant errors were made during the final database updates prior to or following
mine closure. The authors compared assay values in the database to composited assay data used in
the reserve estimation. It appears that the modeler corrected the database errors before calculating
the estimation. The authors also noticed that some holes used in the resource estimation were
missing from the database provided for the data verification.
In summary, the authors were unable to demonstrate a sufficient correlation in only 5% of the drill
data used in the mineral invntory estimation and its source data. The authors suspect that Robert
Carter, P. Eng., HudBay’s Project Manager, corrected the assay data before calculating the mineral
inventory estimate, but the corrected version of the database was unavailable to the authors. The
mineral inventory estimate does appear to produce values for tons and grade that correlate well
with historic mine reconciliation values. The authors anticipate that a positive validation can be
completed when the version of the database used for the mineral inventory estimate is recovered.
The authors stipulate that data verification remains in progress.
Table 11-1 summarizes the number of records and percent of drill samples reviewed for this report.
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Table 11-1 Data Verification Summary
Dataset
Drilled Samples
Percent
of
Population
Reviewed
Total
Samples
Utilized
Reserve
Estimate
2,178
Collar XYZ,
Az., Dip, TD
Records
Reviewed
23
4%
Downhole
Survey
Records
Reviewed
23
4%
Sample
Lithology
Records
Reviewed
0
0%
Sample
Intervals
Reviewed
95
4%
Sample
Assay
Certificates
Reviewed
95
4%
Tetra Tech was retained by Northern Zinc, LLC to provide a fatal flaw review of the Balmat mine
in 2014 and provided a report, effective 31 October 2014. Tetra Tech examined drilling
procedures, including logging practices, assay sample preparation, quality assurance and quality
control protocols. They reviewed mineral inventory modeling and classification, mining design,
geotechnical considerations, production capital and operating estimates, metallurgical processing,
environmental and permitting status and reviewed the pro forma cash flow calculation. No
potentially fatal issues were identified in any of these areas.
January 30, 2016
Star Mountain
Resources Inc.
12.
Mineral Processing and Metallurgical
Testing
Page 61
Mineral Processing and Metallurgical Testing
Locked Cycle Testing
HudBay completed bench scale locked cycle metallurgical tests on Balmat Type I ores using core
from Mahler and Mud Pond in October 2005. This work was done under the direction of Fred
Vargas, the metallurgical consultant who developed the pHLOTEC flotation process and Mike
Ounpuu of Lakefield Research who insured the program fulfilled the requirements of a bankable
feasibility study.
Flotation test conditions (fineness of grind, reagent regime, and flowsheet) were based on the
established operating practices of the Balmat Concentrator, optimized as necessary for the
particular requirements of the ore zones being tested.
The existing plant flotation circuit consists of a lead flotation circuit followed by zinc flotation.
Lead ore grades for the ore zones to be mined are only 0.02%, and as such, the lead circuit was not
included in the test work. The zinc flotation circuit consists of rougher flotation followed by
scavenger flotation. The scavenger concentrate returns to the head of the rougher circuit. Rougher
concentrate undergoes two stages of cleaner flotation. Cleaner tailings are returned to the previous
stage of flotation in the traditional manner.
Kinetic test work indicated that the scavenger concentrate could be combined with the rougher
concentrate and sent to the cleaner circuit, in an open circuit manner, with no detrimental impact
on grade or recovery. This open circuit roughing approach was used in the locked cycle flotation
work.
Tests conducted on Type 1 ores concentrated on two variables; mine dilution and grind size.
Dilution was selected as a test variable as it was seen as a potential risk given the nature of the ore
body and the mining method. High dilution typically results in reduced recovery performance of
milling circuits. Mining dilution cases were selected to provide for the projected standard dilution,
high dilution, and low dilution.
Grind was selected as a test variable to ensure that historical concentrator grind was applicable to
the new ore zones. Tests on differing grinds were conducted on the standard dilution case only.
Target grinds were selected as standard, coarse, and fine. Standard grind was selected at the
historical plant value of 85% passing 210 μm. Coarse grind was selected at 75% passing 210 μm.
Fine grind was selected at 95% passing 210 μm.
January 30, 2016
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Flotation ore charges were blended from samples of ore and waste rock at the mass ratio predicted
by the geology department. These charges were subsequently assayed for zinc content. The
samples were blended a second time if required with waste rock or ore to obtain target zinc grades.
Batch flotation tests were conducted to provide kinetic information on each ore zone at the
specified dilution and grind. Rougher flotation kinetics, first stage cleaner kinetics, and second
stage cleaner kinetics were performed. This kinetic information was used to determine the flotation
conditions for locked cycle test work.38
Table 12-1 Mud Pond Flotation Kinetics
Rougher Kinetics
Dilution
Case
Standard
Standard
Standard
High
Low
Grind
Case
Standard
Fine
Coarse
Standard
Standard
1st Cleaner Kinetics
2nd Cleaner Kinetics
Grade
%Zn
Recovery
%
Grade
%Zn
Recovery
%
Grade
%Zn
Recovery
%
28.0
23.1
25.2
21.0
31.5
98.7
99.3
99.2
99.0
99.6
47.9
43.4
57.1
39.5
48.5
94.1
97.1
97.6
96.0
97.9
54.4
51.9
52.5
47.6
55.4
94.6
94.8
96.7
96.1
96.5
Table 12-2 Mahler Flotation Kinetics
Rougher Kinetics
Dilution
Case
Standard
Standard
Standard
High
Low
Grind
Case
Standard
Fine
Coarse
Standard
Standard
1st Cleaner Kinetics
2nd Cleaner Kinetics
Grade
%Zn
Recovery
%
Grade
%Zn
Recovery
%
Grade
%Zn
Recovery
%
31.3
31.4
38.7
27.2
38.6
99.2
98.7
98.0
98.4
97.1
44.4
47.6
48.9
46.3
49.5
97.4
91.8
96.4
94.8
97.3
59.3
55.1
54.5
60.2
52.3
93.2
85.3
94.5
93.8
95.8
Table 12-3 Reagent Dosage
Reagent
NaCN
Na2S
CuSO4
PAX
3477
Dosage
(g/ton)
48.6
97.2
316
8.7 – 9.7
3.9
HudBay Minerals Inc., “Balmat No. 4 Zinc Mine Reopening Feasibility Study”, Internal company report, October,
2005.
38
January 30, 2016
Star Mountain
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Reagent
Mineral Processing and Metallurgical
Testing
Page 63
Dosage
(g/ton)
17.5
MIBC
Table 12-4 Locked Cycle Test Results
Head
Assay
Conc
Assay
Tail
Assay
Conc
Rec
Zn
Fe
Pb
Mg
Ca
Hg
Zn
Fe
Pb
Mg
Ca
Hg
Zn
Fe
Pb
Mg
Ca
Hg
Zn
Fe
Pb
Mg
Ca
Hg
%
%
%
%
%
ppm
%
%
%
%
%
ppm
%
%
%
%
%
ppm
%
%
%
%
%
ppm
LC-1
9.70
0.80
0.051
6.90
16.40
59.90
3.20
0.235
0.48
0.43
0.31
0.35
0.017
8.06
19.33
97.30
67.70
72.70
1.09
0.41
-
Mud Pond
LC-2
Avg
9.60
9.65
0.80
0.80
0.495
0.273
6.80
6.85
15.40
15.90
178
178
61.00
60.45
2.90
3.05
0.170
0.203
0.33
0.41
0.26
0.35
1150
1150
0.48
0.40
0.41
0.38
0.028
0.022
7.89
7.98
18.07
18.70
6.73
6.73
95.80
96.55
56.20
59.45
51.60
62.15
0.73
0.91
0.25
0.33
96.86
96.86
LC-1
10.70
0.90
0.005
8.70
15.30
137
58.70
3.50
0.010
0.74
0.67
751
0.27
0.30
0.044
10.40
18.48
3.85
97.90
71.80
33.10
1.52
0.78
97.70
Mahler
LC-2
10.70
1.00
0.005
9.00
13.70
142
60.80
3.00
0.009
0.53
0.25
762
0.25
0.60
0.042
10.74
16.46
13.30
98.00
51.10
30.70
1.02
0.32
92.41
Avg
10.70
0.95
0.005
8.85
14.50
140
59.75
3.25
0.010
0.64
0.46
757
0.26
0.45
0.043
10.57
17.47
8.58
97.95
61.45
31.90
1.27
0.55
95.06
Wt Avg
Total*
10.00
0.88
0.184
7.52
15.43
165
60.22
3.12
0.138
0.48
0.38
1019
0.35
0.40
0.029
8.84
18.29
7.35
97.02
60.12
52.07
1.03
0.40
96.26
Test work Conclusions
1. The pHLOTEC process can be used to process the Balmat ores.
2. The sphalerite in Balmat Type I ores exhibits fast flotation kinetics at a course grind.
3. Lock cycle tests in Type I ores produced an average zinc recovery of 97% to concentrate
grading 60% zinc.
4. A zinc concentrate grade of 55.5% and zinc recovery of 96% are achievable in the Balmat
Mill based on the results of this test work.
January 30, 2016
Page 64
13.
Star Mountain
Resources Inc.
Mineralization Model
Introduction
The Balmat mineralization models were constructed by Robert Carter, P. Eng. Technical Services
Manager of HudBay Minerals. The work was completed in 2009 and was used to support the 2010
re-opening plan developed by HudBay for the Balmat operation. The following discussion details
the key assumptions, parameters and methods used by Mr. Carter to create the Balmat
mineralization model. 39
Mr. Carter used MineSight 4.6-01 modeling software to build and populate a block model from
which the mineral inventory estimate was reported. The block model was constrained by
interpreted 3-D wireframe solids that enclose the zinc rich mineralized zones.
Practical Mining has reviewed the HudBay mineralization models and methods used in their
construction and found them to be in accordance with accepted industry standards. Only the
economic portions if the measured and indicated mineralization identified in the HudBay model
are included in the Proven and Probable Reserves stated in Section 14.
Wireframe Models
Wireframes were constructed by tying adjacent, vertical 2-D cross-section polygons into 3-D
solids. The 2-D polygons were drawn by the Balmat geology department around mineralization on
25, 50 or 100-foot spacing. Mineralization was projected either less than ½ the drill hole spacing
or halfway to low grade or un-mineralized drill holes. Wireframe solids were clipped to eliminate
volumes extracted by previous mining activity.
Assays
The block model grade estimation was made using 2,178 mineralized composites from 524 drill
holes, selected to define the zinc mineralization. Samples were grouped into seven discrete zones,
interpreted to represent individual lenses and bodies of zinc mineralization. Assay statistics by
zone are presented in Table 13-1.
39
Carter, Rob, P. Eng., “Balmat Re-Opening Plan”, Hudbay Minerals internal company report, May 2010.
January 30, 2016
Star Mountain
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Page 65
Table 13-1 Assay Statistics
Zone
Mud Pond Main
Mud Pond Apron
Mahler Main
Mahler Quartz Diopside
Newfold
Assays
490
309
213
725
217
116
108
Minimum
0
0
0
0
0
0
0
Maximum
57.83
52.74
46.67
54.5
54.6
35.78
54.45
Mean
10.17
10.64
8.03
14.35
20.62
10.29
15.45
Standard
Deviation
9.31
11.15
10.03
14.01
16.91
10.28
14.06
Compositing
The assay intervals were grouped into single, full length composite assays that span the entire
mineralized interval, weighted by specific gravity, lying wholly within a particular wireframe solid
volume. Composite statistics are presented in Table 13-2.
Table 13-2 Composite Statistics
Zone
Mud Pond Main
Mud Pond Apron
Mahler Main
Newfold
Composites
200
79
31
235
65
36
28
Minimum
1.75
2.21
1.2
0.5
2.87
1.91
4.51
Maximum
57.83
34.56
34.78
54
51.2
31.81
44.5
Mean
12.44
12.44
8.88
18.97
25.34
13.22
14.82
Standard
Deviation
7.89
7
7.57
12.43
10.93
8.79
7.56
Density
Densities were measured for a number of mineralized samples by Balmat geologists and an
empirical formula developed to assign specific gravities to assay intervals based on zinc grade. For
all assays greater than 0.01% zinc:
𝑆𝐺 = ((𝑍𝑛% 𝑥 0.01) + 1.3255)/0.47154
All assay intervals with zinc grade of less than 0.01% zinc were assigned a specific gravity value
of 2.8.
January 30, 2016
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Grade Capping
Certain high grade composites were spatially discontinuous from the remaining composites and
their respective spatial influences were restricted as shown in Table 13-3.
Table 13-3 Grade Capping Strategy
Restricted Value
(Zn%)
Search Radius
(ft)
25
80
Mud Pond Apron
25
50
25
20
Mahler Main
41
50
38
40
22
40
Newfold
22
50
Zone
Mud Pond Main
Variography
Correlograms were constructed to determine the orientation and spatial dependency of the
composited mineralization intervals. The resulting variogram parameters are shown in the Table
13-4.
Table 13-4 Variogram Parameters
Zone
Mud Pond Main
Nugget
0.58
Sill
0.4
Range (ft)
300
Mud Pond Apron
0.29
0.87
394
0.29
0.87
394
Mahler Main
0.45
0.48
200
0.45
0.48
200
0.45
0.48
200
Newfold
0.86
0.34
210
January 30, 2016
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Figure 13-1 Mahler Main, White Dolomite and Quartz Diopside Correlogram
January 30, 2016
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Figure 13-2 Mud Pond Main and Upper Main Correlogram
January 30, 2016
Star Mountain
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Page 69
Figure 13-3 Mud Pond Apron and Quartz Dipside Correlogram
Block Modelling
Blocks were restricted to maximum dimensions of 15 feet on a side. In order to reduce grade
smearing outside the mineralized wireframes, sub blocks with minimum dimensions of 5 feet on a
side where created as part of this reserve estimation by PM. Block models for each zone are
oriented roughly parallel to the average strike of the mineralization.
Ordinary kriging was used to interpolate values into the block model using search ellipsoids that
follow the regional orientation of the zinc rich horizons and multiple passes. Search parameters
are listed in Table 13-5.
January 30, 2016
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Table 13-5 Search Ellipsoid Parameters
Rotation Angles (LRL
Rule)
Zone
Mud Pond Main
Mud Pond Apron
Major
900
Minor
750
400
300
200
3
6
1
250
200
150
3
6
1
4
200
150
100
3
6
1
1
300
150
100
3
5
1
200
100
80
3
6
1
100
80
50
3
6
1
300
150
100
3
5
1
200
100
50
3
6
1
3
100
50
40
3
6
1
1
6000
6000
6000
1
2
1
600
300
200
3
7
1
400
200
150
5
7
1
4
300
150
100
5
7
1
5
200
100
80
5
7
1
700
350
200
1
3
1
300
150
100
3
5
1
3
150
80
40
3
5
1
1
300
150
100
2
3
1
200
100
80
3
5
1
100
80
50
3
5
1
1000
1000
1000
1
1
1
200
100
50
3
5
1
Pass
1
2
3
2
ROT
DIPN
DIPE
35
-23
-15
77
-15
-5
1
2
100
5
-10
2
Mahler Main
Mahler White
Dolomite
Mahler Quartz
Diopside
Newfold
No. of Composites
max/
drill
Min.
Max.
hole
2
4
1
Vertical
500
3
Mud Pond Quartz
Diopside
Search Ellipsoid Distances (ft)
3
60
-20
-10
1
2
2
60
60
-20
-20
-10
-10
3
1
2
58
5
55
Mineral Inventory Classification
Reserve classifications were assigned each block based on the distance along the plunge direction
from the nearest underground excavation. The quantity or distance from drill composites had no
bearing on classification adding a degree of conservatism to the estimates.
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Table 13-6 Reserve Classification Criteria
Zone
Mud Pond Main
Proven
100
Probable
200
Mud Pond Apron
100
200
100
200
Mahler Main
70
140
70
140
70
140
Newfold
50
130
January 30, 2016
Page 72
14.
Star Mountain
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Mineral Reserves
Excavation designs for stopes, stope development drifting and access development were created
using Vulcan Software.
Design constraints included ten foot minimum width for long hole stopes with development drifts
spaced at approximately 50 foot vertical intervals. Stope development drift dimensions maintained
a constant height of 15 feet and a minimum width of 15 feet. Room and pillar excavations are 15
feet high and have a minimum width of 15 feet.
Mining and backfill tasks were created from all designed excavations. These tasks were assigned
costs and productivities specific to the excavation or backfill task type. Additionally, the
undiscounted cash flow for each task was calculated. All tasks were then ordered in the correct
sequence for mining and backfilling. Any sequence or subsequence that did not achieve a positive
cumulative undiscounted cash flow was removed from consideration for mineral reserves. Stope
development necessary to reach reserve excavations and exceeding the incremental cut-off grade
shown in Table 14-1 is also included in mineral reserves.
Table 14-1 Mineral Reserves Cut Off Grade Calculation
NSR Royalty
Concentrate Grade
Transportation Charge
Smelter Penalty
Total Smelter Charges
Smelting and Refining Cost
Smelter Payment
Metallurgical Recovery
Direct Processing
Ore Haulage/Hoisting Crushing
Administration and Overhead
15% Contingency
Total Processing Cost
Unplanned Mining Dilution
Direct Ore Mining Cost
All in Cost
Unplanned Dilution
Zinc Price
Development Mining
Production Mining
Production Mining Design Limit
0.3%
55.5%
Zn
$187.51
$/Ton
$21.51
$/Ton
$20.00
$/Ton
$229.02
$/Ton
$ 0.21
$/lb.
85%
96.0%
$9.05
$/Ton
$4.15
$/Ton
$3.72
$/Ton
$8.69
$/Ton
$25.61
$/Ton
10.0%
$41.83
$/Ton
$67.44
$/Ton
10%
Cut Off Grades Zn%
$/lb.
$0.70
$0…80
3.2%
2.7%
8.5%
7.2%
9.3%
7.9%
$0.92
2.3%
6.1%
6.7%
$1.00
2.12%
5.5%
6.1%
$1.10
1.9%
4.9%
5.4%
January 30, 2016
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Mineral Reserves
Page 73
Figure 14-1 Cut Off Sensitivity to Zinc Price
January 30, 2016
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Table 14-2 Balmat Mineral Reserves as of December 1, 2015
Mahler Main
Mud Pond Main
Newfold
Subtotal Production
Mining
20
7
53
16
55
151
8.1%
12.4%
6.8%
10.6%
10.8%
9.1%
1.6
0.9
3.7
1.7
6.0
13.8
Probable Reserves
Mass
(kt)
Zn % Zn (kt)
Production Mining
169
9.5%
16.1
6
10.9%
0.6
89
11.4%
10.2
98
10.5%
10.3
363
10.2%
37.2
Mahler Main
Mud Pond Main
Newfold
Subtotal Development
Mining
0.2
0.4
0.6
4.3%
4.0%
4.1%
0.01
0.02
0.0
Development Mining
40
4.2%
1.7
26
3.7%
1.0
6
3.5%
0.2
71
4.0%
2.8
Source and Zone
Proven Reserves
Mass
(kt)
Zn % Zn (kt)
Proven + Probable
Reserves
Mass
(kt)
Zn % Zn (kt)
189
13
53
105
154
514
9.3%
11.7%
6.8%
11.3%
10.6%
9.9%
17.7
1.5
3.7
11.9
16.3
50.9
40
0.2
26
6
71
4.2%
4.3%
3.7%
3.5%
4.0%
1.7
-0.01
1.0
0.2
2.8
8.3%
11.7%
6.8%
9.8%
10.3%
19.5
1.5
3.7
12.8
16.5
9.2%
53.8
Mahler Main
Mud Pond Main
Newfold
26
7
54
16
56
6.5%
12.4%
6.8%
10.6%
10.8%
Production and Development Mining
1.7
209
8.5%
17.7
235
0.9
6
10.9%
0.6
13
3.7
54
1.7
115
9.7%
11.1
131
6.0
10
10.1%
10.5
160
Total Production and
Development Mining
152
9.0%
13.8
Notes:
1.
2.
3.
4.
434
9.2%
40.0
585
Mineral Reserves have been estimated using a zinc price of $0.92/pound.
Balmat mill recovery for zinc is 96%.
Mine losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine
excavations.
Zinc grades and contained zinc metal are run-of-mine estimates before applying metallurgical recoveries.
Balmat mineral reserves could be materially affected by economic, geotechnical, permitting,
metallurgical or other relevant factors. Mining and processing costs are sensitive to production
rates. A decline in the production rate can cause an increase in costs and cutoff grades resulting in
a reduction in mineral reserves. Geotechnical conditions requiring additional ground support or
more expensive mining methods will also result in higher cutoff grades and reduced mineral
reserves.
January 30, 2016
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15.
Mining Methods
Page 75
Mining Methods
Shaft Access
The Number 4 Shaft is an 18-foot diameter 3,225-foot-deep concrete lined five compartment shaft.
Two compartments are for the skips and one each for the service cage, counterweight and manway.
The 11 ton capacity skips and counterweight ride on 90 lb/ft rail and the service cage rides on 45/8 x 6-5/8 wood guides. The shaft has a 140-foot-tall galvanized structural steel headframe
supporting the head sheaves.
The production hoist is a Nordberg double drum double clutched mine hoist. The hoist drums are
15 feet in diameter and eight feet wide with the capacity to hold 3,300 feet of 2-1/4-inch rope. The
hoist is powered by two 1,250 hp 500 rpm DC motors capable of hoisting at 1,750 feet per minute
resulting in a 200 ton per hour hoisting rate. Allowing for routine shaft and hoist maintenance the
daily production capacity equates to 3,800 tons.
Power is provided by a 2,240 hp synchronous motor and two 1,000 kW DC generators. Hoist
controls are 1970 vintage. Field excitation uses thyristor power conversion and magnetic
amplifiers for control. The hoist is automated using a General Electric mechanical/electrical
program switch to set the speed reference pattern. Safety devices are single governor Model C
Lilly controllers.
Skip loading pockets are located on the 2180 and 3180 levels although the 2180 pocket is no longer
in use.
The service hoist is a Nordberg double drum single clutch mine hoist. Drum dimensions are 12
feet in diameter and 91 inches wide each holding 3,300 feet of 1-3/4-inch rope. The hoist is driven
by a single 900 hp 400 rpm DC motor. The maximum hoisting speed is 1,190 feet per minute.
When lowering equipment, the maximum load is 13 tons.
The hoist controls were updated to solid state electronics in 2005.
Secondary egress is provided through the Number 2 shaft. The headframe is a brick and steel
structure which supports the head sheaves. The head frame steel is in poor condition but is capable
of providing emergency egress until repairs can be completed.
The Number 2 Shaft hoist is an Ottumwa Iron Works double drum double clutch host equipped
with 7-foot diameter by 76-inch-wide drums each holding 3,300 feet of 1-1/4-inch hoist rope.
January 30, 2016
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Power is supplied by a single 700 hp 514 rpm wound rotor induction motor. Lilly Model D
controllers provide over speed protection.40
Mine Development
The Balmat No. 4 Mine has significant development infrastructure in place. (Figure 15-1)
Development accesses are driven 15-ft wide x 15-ft high at grades up to +/- 15%. These accesses
are of sufficient size to allow passage of 40-ton trucks and 7-yd3 LHDs.
Figure 15-1 Plan View of the Balmat Mine Showing the Location of Reserves Relative
to the Historic Workings
Remaining development for extraction of the reserves includes extension of the Mud Pond Ramp
to the known lower extent of the deposit, extension of the Mahler ramp to the upper and lower
extents of the deposit, completion of the Newfold Ramp and approximately 700 feet of drifting to
connect the Newfold and Mahler ventilation and secondary egress development. Figure 15-3 and
Figure 15-4 are long sections through Lower Mud Pond, Mahler and Newfold showing the existing
development in yellow and planned development in black. The planned development work is
summarized in Table 15-1.
“Balmat No. 4 Zinc Mine Re-Opening Feasibility Study”, HudBay Minerals Inc. internal company report, October
2005.
40
January 30, 2016
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Mining Methods
Page 77
Figure 15-2 Long Section View of the Lower Mud Pond Ore Body
Figure 15-3 Long Section View of the Mahler Ore Body
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Figure 15-4 Long Section View of the Newfold Ore Body
Secondary egress to the number 2 shaft is provided via the 2100 level and the Mud Pond and
Mahler ramp development.
Table 15-1 Mine Development Plan
Category
Primary Capital Drifting (ft)
Secondary Capital Drifting (ft)
Raising (ft)
Total Development (ft)
Development Waste (kt)
Year 0
0
0
0
Year 1
7,267
1,535
265
Year 2
0
0
0
Year 3
0
0
0
Total
7,267
1,535
265
0
0
9,067
162
0
0
0
0
9,067
162
Note: Secondary Capital Development includes sumps, muck bays, ventilation cross cuts etc. excavated in support
of primary development. Secondary development does not require the installation of mine water, dewatering
infrastructure, compressed air or ventilation utilities.
Ventilation
Intake air is downcast through the Number 2 Mine. The No. 4 Shaft and raise bore serve as exhaust.
Prior to shut down in 2008 the mine airflow totaled approximately 250,000 CFM with 190,000 in
the number 4 shaft and 60,000 in the number 4 raise bore.
The US Department of Labor, Mine Safety and Health Administration (MSHA) began the
implementation of Diesel Particulate Matter (DPM) regulations during the period 2005 to 2008 in
January 30, 2016
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Mining Methods
Page 79
phases. The initial threshold limit value (TLV) was set at 400 micrograms per cubic meter (μg/m3)
with an intermediate TLV of 350 μg/m3 and ultimately reaching 160 μg/m3 by year end 2008.
Prior to Balmat being placed on care and maintenance in 2008 the intermediate TLV was being
enforced. On several inspections truck drivers and LHD operators exceeded the TLV resulting in
citations being issued. During the last inspection on April 28, 2008, ten personal samples averaged
862 μg/m3, or over five times the current TLV.41
Methods of DPM control include engine tuning, fuel additives, engine exhaust treatment,
repowering with cleaner engines and ventilation. Balmat will need to use all of these methods to
bring the mine into compliance once production starts. Mine engineers have proposed a series of
ventilation upgrades including installation of controls, installation of a 1,000 hp booster fan on the
3,100 level and relocating two of the other booster fans. The estimated cost of the ventilation
upgrades is $1.4M.42
Mining Methods
Ore zones at Balmat vary in thickness, from a few feet to up to 20 feet or more with an overall
plunge of around 15-30 degrees. However, the ore bodies have been folded multiple times in all
directions causing local dips to range from flat to vertical.
Historically, room-and-pillar has been the preferred mining method, with horizontal drifts
positioned within the ore and ranging in width from ten to over 30 feet and from 12 to nearly 20
feet high. Occasionally, long hole stopes were mined where appropriate.
15.4.1.
Long Hole Open Stope
Long hole stopes can be used where the overall dip of the ore body is 50 degrees or greater over a
vertical distance of at least 30 feet. The minimum mining width for long hole stoping of Balmat
reserves has been assumed to equal 10-feet, however this could be reduced to 6 feet with careful
blasting practices. This mining method also requires a competent hanging wall able to stand
unsupported over the entire stope span.
“MSHA
M/NM
Personal
Health
Sampling”,
Mine
Safety
and
Health
Administration,
http://www.msha.gov/drs/ASP/MineAction.asp, accessed November 20, 2015.
42
Carter, Rob, “Balmat Re-Opening Plan”, HudBay Minerals Inc. internal company report, May 2010.
41
January 30, 2016
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Long hole stopes are initiated by excavation of top and bottom accesses along the strike of the
stope. These accesses are typically 15-feet high x 15-feet wide and with a minimum back to sill
vertical separation of 30-feet. This distance can be extended to 100-feet, depending on the
regularity of the ore and the blast hole deviation experienced. The dimensions of the top and
bottom accesses could also be reduced and are determined by the room requirements of the
production drill and the size of LHD to be used for mucking.
After both access drifts reach the furthest extent of the stope a slot raise is excavated using vertical
crater retreat methods thereby connecting the drifts and providing a free face to blast to.
Production blast holes are drilled as nearly parallel as is practical in rows starting at the slot raise
and continuing to the end of the stope. Three to six rows of blast holes can be detonated in each
blast.
After blasting, a remote control LHD will remove the broken ore from the lower stope access drift.
Once the stope is complete it can be backfilled with waste rock if another stope is to be mined
immediately above or left open if no further mining is planned.
Figure 15-5 Typical Level Development Plan in the Mahler Zone
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Mining Methods
Page 81
Figure 15-6 Cross Section Through Maler Showing Long Hole Stope Development
Drifts
15.4.2.
Drift and Fill
Drift and fill mining starts with the excavation of waste cross cuts on 45 to 60-feet vertical
intervals. At a predetermined set back distance from the ore the crosscut is driven down at a 15%
grade to achieve the desired sill elevation for the first initial drift. This drift is excavated in ore at
a gradient of 0 to +2% to the limits of the ore body.
Following completion, the drift is completely filled with waste rock. The next and all succeeding
cuts are initiated by breasting down the crosscut back and ramping in the backfilled waste to
achieve elevation of the next drift (Figure 15-7).
The drift dimensions used in estimating Balmat reserves are 15-feet high and 15-feet wide but
these could be reduced to 13 x 13 with careful blasting practices. A further reduction to as little
as 8 x 8 feet could be achieved if the mechanized mining were to be replaced with manual methods.
This last reduction would come at a higher average unit cost per ton mined.
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Figure 15-7 Secion Through Cut and Fill Stope
Table 15-2 Production Plan
Category
Proven Ore Mined (kt)
Zn%
Probable Ore Mined (kt)
Zn%
Total Ore Mined (kt)
Zn %
Contained Zinc (kt)
Expensed Waste (kt)
15.4.3.
Year 0
0
0%
0
0%
0
0%
0
0
Year 1
23.2
11.0%
82.7
9.2%
105.9
9.6%
10.2
16.1
Year 2
128.5
8.8%
351.0
9.2%
479.2
9.1%
43.6
9.1
Year 3
0
0%
0
0%
0
0%
0
0
Total
151.4
9.1%
433.7
9.2%
585.1
9.2%
53.8
25.2
Room and Pillar
Room and Pillar mining as practiced at Balmat starts by driving sub parallel drifts across the ore
with 20-feet of rib to rib separation. The intervening pillar is extracted by drilling with the
development jumbo and blasting the ore into the lower drift were it can be recovered with remotely
operated LHDs. Some ore losses occur when pillar blasting does not clean the footwall and this
ore cannot be recovered by the LHD. A 15 to 25-foot pillar is left above and below this excavation
before starting the succeeding drift.
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Mining Methods
Page 83
Labor Requirements
The Balmat mine is planned to operate on two 10-hour shifts per day with a three crew rotation.
Each crew will work an average of 48-hours per week and 20% overtime has been included in the
wage calculations. Salaried and hourly labor requirements are detailed in Table 15-3.
Table 15-3 Mine Labor Requirements
Classification
Mine Operations
Mine Development
Crushing and Hoisting
Maintenance
Total Hourly
Operations Shift Supervisors
Mine Superintendent
Geology and Ore Control
Engineering and Surveying
Maintenance General Forman
Maintenance Planner
Total Salaried
No. Required
45
9
9
16
79
3
1
4
2
1
1
12
Underground Equipment
The underground equipment fleet is quite extensive and is capable of producing well in excess of
the 1,200 tpd planned rate. When the mine was placed on care and maintenance in 2008 all of the
equipment was carefully stored in dry areas of the mine. Prior to the resumption of mining
operations each unit will require complete fluid and filter replacement and new batteries. Some
units will require tires and replacement of hydraulic hoses.
Table 15-4 Mobile Equipment Fleet
Description
Roofbolter
Roofbolter
Jumbo Drill
Jumbo Drill
Jumbo Drill
Manufacturer
Secoma Pluton 17
Secoma Pluton 26
MTI VR II
2 Boom GD MK 65
GD MK 35
Quantity
4
2
2
1
4
January 30, 2016
Page 84
Description
Jumbo Drill
Jumbo Drill
Long hole Drill
Long hole Drill
LHD
LHD
LHD
LHD
LHD
LHD
LHD
Haul Truck
Haul Truck
Haul Truck
Haul Truck
Haul Truck
Lift Truck
Explosives Loader
Scaler
Manufacturer
GD MK 21 H
2 Boom GD MK 35 H
Cubex 6200 D
BLY Stope Mate
MTI LT-270 (2.5-yd)
Wagner ST-3.5 (3.5-yd)
MTI 650 (4-yd)
Wagner ST-6C (6-yd)
Atlas Copco ST (6-yd)
Eimco EJC-210 (7-yd)
Wagner ST-7.5z (7.5-yd)
Wagner MT416 (16-T)
Wagner MT426 (26-T)
Wagner MT439 (39-T)
Tamrock 40D (40-T)
Wagner MT444 (44-T)
Getman A64
John Deere
Getman
Star Mountain
Resources Inc.
Quantity
1
1
1
2
1
3
5
3
3
1
1
3
4
1
3
2
5
5
2
Electrical Distribution
The mine is supplied by three main electrical feeders. Two are located in the number 4 shaft and
one in a drill hole from surface that intersects the Newfold secondary egress drift. One of the shaft
feeders supplies 4160-volt power but the conductor is rated at 13.8 kv should an upgrade be
warranted. The other feeders are supplying 13.8 kv power which is distributed to transformers
throughout the mine before being stepped down to 480 v.
January 30, 2016
Star Mountain
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16.
Recovery Methods
Page 85
Recovery Methods
Crushing Circuit
Primary crushing of ore is either done underground by a 36-inch by 48-inch jaw crusher, or on the
surface by a 30-inch by 42-inch jaw crusher for ore from other sources.
Coarse ore from the surface crusher or the shaft hoist is conveyed to the secondary crusher by a
36-inch conveyor equipped with an electromagnet for tramp metal removal. A Corrigan metal
detector is situated near the top end of the conveyor. There is a picking station at the top of the
conveyor for observation and removal of scrap by an operator.
Coarse ore from the above conveyor is discharged into the feed chute of a 6-foot by 14-foot Tyler
Tyrock Screen, Model F-900. Screen undersize reports to #2 conveyor. Screen oversize reports to
the crusher. Records indicate that the screen deck opening size is 40mm. The crusher is an Allis
Chalmers Hydrocone, Model 1084 EHD (84-inch diameter, extra heavy duty) equipped with a 300
HP motor. The crusher operates in open circuit, discharging to #2 conveyor to be combined with
the screen undersize. In a Hydrocone crusher with an intermediate chamber, the close-side setting
can be set between ½ inch and 2 inch with corresponding capacities in the order of 275 – 400-tons
per hour. The total circuit capacity will be greater than this by an amount equal to the fines in the
feed that are screened out before the crusher.
Conveyor #2 is equipped with a four-idler Merrick weightometer, and discharges via a transfer
chute to #3 conveyor that runs to the top of the fine ore bins. An automatic ore sampler is installed
on this belt. Discharge from #3 conveyor is distributed between the two fine ore bins by a shuttle
conveyor. Each fine ore bin has a rated capacity of 2,000-tons.
Historic production records show that the operating hours on the crushing plant were
approximately the same as that of the grinding circuit, i.e., crusher throughputs were the same as
mill throughputs. Undoubtedly the actual capacity of the crusher would be higher than indicated
by the records, and in any case should be more than adequate for future requirements. The crusher
may have been operated at low capacity (with a tight gap setting) by choice, given that the crusher
operates in open circuit and the product size from the crusher will have a direct impact on feed
size to the rod mill and on the final grind size.
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Table 16-1 Balmat Crushing Circuit
Design Criteria
Crushing Circuit Operating Time
Crushing Circuit Operating Time
Design Throughput
Ore Feed Size to Secondary Crusher, 80%
Passing (estimated)
Type of Screen
Aperture Size
Screen Dimensions
Installed Motor on Screen
Type of Secondary Crusher
Secondary Crusher Bowl Diameter
Installed Motor on Secondary Crusher
Secondary Crusher Discharge Size, 80%
Passing (estimated)
Units
h/d
d/wk
t/h
in
Value
10-12
4-5
220
4
Vibrating Single Deck
in
1.5
ft
6 x 14
HP
30
Cone
ft
7.0
HP
300
in
1.0
Fine Ore Bins
There are two bins with a nominal capacity of 2,000-tons each. It was not possible to see inside
the bins during the site visit. The condition of liners and the live capacity of the bins could not be
estimated, but there were no indications of any particular problems.
Each bin is fitted with three slot feeders and DC variable speed drive conveyors. The DC drives
have been left energized and this will likely have kept the motors dry and in good condition.
Grinding Circuit
Fine crushed ore is conveyed to the rod mill on a 36 inch conveyor equipped with a Four-Idler
Merrick weightometer.
The rod mill is an 11.5-foot by 16-foot Allis Chalmers mill with a 1,000 HP Allis Chalmers
synchronous motor. The mill operates in open circuit, and was charged with 4" diameter rods. The
ball mill is a 12.5-foot by 14-foot Allis Chalmers mill with a 1,000 HP motor (identical to the rod
mill motor). The mill was charged with 2 inch diameter balls, and operated in closed circuit with
two Warman 26-inch cyclones.
Typical mill feed rates were in the range of 200 to 220 tons per hour. The final grind size was
normally 85% passing 65 mesh.
The existing grinding circuit will be adequate for future requirements. Previous laboratory test
work on the proposed ores has indicated that there is no benefit in grinding any finer than was
January 30, 2016
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Recovery Methods
Page 87
done in the past. If future plant test work does show that finer grinding improves metallurgical
performance, this could be accomplished simply by reducing throughputs and increasing operating
time.
Table 16-2 Balmat Grinding Circuit
Design Criteria
Grinding Circuit Operating Time
Grinding Circuit Operating Time
Design Throughput
Balmat Ore Work Index
Rod Mill Diameter
Rod Mill Length
Installed Motor on Rod Mill
Required Power on Rod Mill
Grinding Rod Size
Estimated Charge Volume
Rod Mill Feed Size, P 80
Rod Mill Discharge P 80
Ball Mill Diameter
Ball Mill Length
Installed Motor on Ball Mill
Required Power on Ball Mill
Grinding Ball Size
Estimated Charge Volume
Ball Mill Feed Size, P 80
Cyclone Diameter
Number of Operating Cyclones
Cyclone O/F, P80
Units
h/d
d/wk
t/h
kWh/t
ft
ft
HP
HP
in
%
µm
µm
ft
ft
HP
HP
in
%
µm
in
µm
Value
10-12
4-5
200
8.3
11.5
16.0
1000
1000
4
35
25,000
650
12.5
14.0
1000
1000
2
34
1000
26
2
150
Lead and Talc Flotation Circuit
Cyclone overflow reports by gravity to the head end of the lead circuit. The lead rougher circuit
consists of a single bank of eight Wemco 300-ft3 cells.
Reagents added to this circuit include Sodium ethylene xanthate as a lead collector, and cyanide,
used as a sphalerite depressant. In addition, a light alcohol frother is added to float the talc from
the ore.
There is one stages of lead cleaning with Denver 24-ft3 cells followed by spiral seperation.
Zinc Flotation Circuit
The zinc rougher circuit consists of two parallel banks of Wemco 300-ft3 cells. There are seven
cells in the east bank and six cells in the west bank.
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Tailings from the lead rougher are pumped into a wig-wag slurry distributor installed above the
head of the parallel roughers.Reagents added to this circuit include copper solution to activate
sphalerite, sodium ethyl xanthate (a collector), and frother to float zinc minerals.
At the end of the west rougher bank is a tails box equipped with a vertical sump pump that pumps
tailings from both rougher banks to the scavenger bank.
The scavenger circuit consists of a single bank of seven Wemco 300-ft3 cells.
The zinc cleaner circuit consists of four Denver 300-ft3 cells as first cleaners and three Denver
300-ft3 cells as second cleaners.
Design criteria for the flotation circuit are shown in Table 16-3. The lead circuit was not included,
at this point it is assumed that the lead circuit will be used as a talc pre-float circuit.
The retention times in roughing and scavenging stages are 15 minutes and 8 minutes respectively.
The retention times in the first and second cleaner stages are 9 and 11 minutes. Normal design
practice would be to provide approximately the same retention times in cleaning as in roughing.
Given the fast kinetics of Balmat ore, this may not be an issue. However, if it becomes evident in
operation (from high circulating loads) that the cleaner capacity is too low, the mill feed rate could
be lowered as necessary to reduce the load on the cleaners.
Table 16-3 Balmat Zinc Flotation Circuit
Design Criteria – Zinc Roughers
Solids Feed Rate into Zinc Circuit
Zinc 1st Cleaner Tails to Zinc Roughers
Feed Pulp Density
Feed Volume into Zinc Circuit
Existing Zinc Rougher Cells:
- type (Wemco self aspirated)
- individual cell size
- number of cells
- installed motor size in each cell
Total Zinc Rougher Retention Time
Zinc Rougher Concentrate
- grade
- zinc recovery
- solids flowrate zinc rougher concentrate
- % solids
- volume
Existing Zinc Scavenger Cells
- type (Wemco self-aspirated)
Units
t/h
t/h
% w/w
gpm
HP
min
Value
200
53
39
1,940
300
13
300
13
30
15
% Zn
%
t/h
% w/w
gpm
28
112
94
35
640
ft3
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Recovery Methods
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Design Criteria – Zinc Roughers
- number of cells
Total Zinc Scavenger Retention Time
Units
ft3
HP
min
Value
300
7
30
8
Design Criteria – Zinc First Cleaners
Solids Feed Rate into Zinc First Cleaners
Feed Pulp Density
Feed Volume into Zinc First Cleaners
Existing Zinc First Cleaners Cells:
- type (Denver)
- number of cells
Total Zinc First Cleaner Retention Time
Zinc First Cleaner Concentrate
- grade
- zinc recovery
- solids flow rate zinc cleaner concentrate
- % solids
- volume
Units
t/h
% w/w
gpm
Value
102
31
1008
ft3
HP
min
300
4.0
30
9
% Zn
%
t/h
% w/w
gpm
49.0
103
49
25
640
Design Criteria – Zinc Second Cleaners
Solids Feed Rate into Zinc First Cleaners
Feed Pulp Density
Feed Volume into Zinc Second Cleaners
Existing Zinc Second Cleaners Cells:
- type (Denver)
- number of cells
Total Zinc Second Cleaner Retention Time
Zinc Second Cleaner Concentrate
- grade
- zinc recovery
- solids flow rate zinc second cleaner concentrate
- % solids
- volume
Units
t/h
% w/w
gpm
Value
49
25
640
ft3
HP
min
300
3
30
11
% Zn
%
t/h
% w/w
gpm
55.5
96
41
36
326
Lead Dewatering Circuit
The lead thickener is 40-feet in diameter. There are no rakes, and there is no underflow pump operators explained that the unit thickened by gravity only (without flocculent). A submersible
pump may have been used to extract solids from the bottom of the thickener and pump directly to
the vacuum filter. The lead filter is an 8-foot 10-inch Eimco unit with four of the five possible
rows of filters installed. The filter appears to be in good condition. Filtered lead concentrate is
January 30, 2016
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conveyed to the concentrate loadout. The concentrate conveyor is equipped with a Four-Idler
Merrick weightometer.
None of the equipment in the lead dewatering circuit will be required unless high lead ores are
discovered and mined in future years.
Zinc Dewatering Circuit
The zinc thickener is a 50-foot diameter Eimco. Thickener underflow is pumped directly to the
vacuum filter. The zinc vacuum disc filter is an 8-foot10-inch Eimco with seven of eight possible
rows installed.
The vacuum pumps were not seen on the site visit. An equipment list indicates that there are two
Nash pumps, one is100 HP and the other is 125 HP.
Zinc concentrate is conveyed to a 90-inch diameter by 45-foot Koppers oil-fired dryer. It is also
possible (with a reversible conveyor) to bypass the dryer. There are reports in the files indicating
that the oil burner was not reliable. Mechanically, the dryer appears to be in reasonable condition.
The inside of the dryer could not be seen to determine if it was cleaned out on shutdown.
Dried zinc concentrate is conveyed to the loadout. The belt is equipped with a Four-Idler Merrick
weightometer.
The conventional thickener sizing rule of thumb is to provide 3 to 7-ft2 of surface area per ton of
concentrate per day. At future production rates, the thickener will actually provide only 2
ft2/ton/day. However, this does not seem to have been a problem in the past with even higher
production rates, probably because a flocculent was used. The estimated capacity of the zinc filter
is approximately 27-tons per hour, based on operating data from December 1999 to September
2001. This is a reasonable number, based on comparison with Flin Flon zinc filter capacity of 22
tons per hour on the same type of filter (Flin Flon concentrate is finer grained and more difficult
to filter than Balmat concentrate will be).
At design, concentrator throughput of 200-tons per hour and mill head grades of 11.7% Zinc, the
production rate of Zn concentrate will exceed Zn filter capacity by as much as 14 tons per hour. In
practice, this means that an inventory of concentrate would build up in the thickener during the
day, and during the 2006-2008 operation, the filter needed to be operated for a few hours each
night after the grinding section is shut down to catch up. This subsequently increased labor cost as
well. However, an alternative option is to use the Pb filter for the excess requirements and allow
January 30, 2016
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Recovery Methods
Page 91
the filtering to be completed during the day operations instead. A capacity review should be
conducted to confirm whether this option is feasible.
At a throughput of 27-tons per hour, the dryer will have a retention time of 28 minutes at 10%
volumetric loading. This is within the normal design range for rotary dryers. Operating records
indicate that the dryer produced concentrate moistures in the 6% range.
Ancillary Equipment
Reagent Distribution – There are mixing tanks on the upper floor of the concentrator for copper
sulfate, sodium cyanide, sodium sulfide and xanthate as well as storage tanks for the neat reagents
(e.g., Cytec 3477, 3418, and frothers). There are two 12-foot diameter copper sulfate storage tanks
on the bottom floor of the mill. Eco-Gearchem pumps (variable speed) with Krone magnetic
flowmeters are used for reagent distribution.
Lime Mixing – the design capacity of the lime silo is 150-tons. A drag chain conveyor delivers
lime from the silo to a 4-foot by 3-foot Denver ball mill for slaking. The insides of the ball mill
and the storage tanks were not seen during the site visit. Lime is being used for water treatment at
present.
Process Water Pumps – There are three water pumps installed on the process water lagoon inside
the mill.43
2005.
43
January 30, 2016
Page 92
Mineral Reserves at the Balmat Mine, St. Lawrence County,
New York
Star Mountain Resources Inc..
Figure 16-1 Crushing and Grinding Circuit Flow Sheet
Lead Recovery
Spiral
January 30, 2016
Recovery Methods
Page 93
Figure 16-2 Zinc Flotation and Tailings Flow Sheet
Zinc Recovery
Tank
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Star Mountain
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Metallurgical Balance
The flotation circuit balance in Table 16-4 shows estimated stage recoveries and zinc grades based
on the locked cycle test results, and extrapolated to the estimated average zinc head of 11.7% for
the life of mine. The overall concentrator mass balance provides flowrate data based on the
flotation balance and on normal assumptions for slurry densities in the grinding, flotation, and
dewatering circuits.
Table 16-4 Flotation Circuit Mass Balance
Stream
Heads
Zn Rougher
Feed
Conc
Tails
Zn 1st Cleaner
Feed
Conc
Tails
Zn 2 nd Cleaner
Feed
Conc
Tails
Wt %
100
Rate t/h
200
Zn %
11.7
Zn Rec %
100
126.6
46.8
79.7
253.2
93.7
159.5
10.7
28.0
0.51
115.5
112.0
3.5
51.2
24.6
26.6
102.4
49.2
53.2
27.2
49.0
7.0
119.0
103.0
16.0
24.6
20.3
4.4
49.2
40.5
8.7
49.0
55.5
18.8
103.0
96.0
7.0
Table 16-5 Concentrator Mass Balance
Stream
Sol’n
t/h
2
44
244
Solids
%w/w
99
82
45
Solid
sg
3.00
3.00
3.00
Sol’n gpm
Slurry sg
Slurry gpm
Rod Mill Feed
Rod Mill Disch
Cyclone O/F
Solid
t/h
200.0
200.0
200.0
8
176
977
2.94
2.21
1.43
275
442
1,244
Zn Rougher Feed
Zn Rougher Conc
Zn Rougher Tail
253.2
93.7
159.5
404
174
310
38.5
35
34
3.00
3.60
3.00
1,615
696
1,238
1.35
1.30
1.29
1,9411
821
1,450
Zn 1st Clnr Feed
Zn 1st Clnr Conc
Zn Circuit Final Tail
102.4
49.2
8.7
223
148
49
31.4
25
15
3.60
4.00
4.00
893
590
197
1.29
1.23
1.13
1,008
639
206
Zn Thickener U/F
40.5
22
65
4.20
87
1.98
126
January 30, 2016
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Page 95
Process Labor
The Balmat mill has capacity four times the planned mining rate. During the previous operating
campaign from 2006 to 2008 the plant demonstrated the ability to shut down and restart with little
loss in efficiency. The mill has approximately 4,000 tons of fine ore storage capacity and 45,000tons capacity in the outside stockpile area. Utilization of this will allow the mill to campaign
production for several days and shut down with the mill workforce being used to supplement the
mine.44
Table 16-6 Mill Labor Requirements
Classification
Mill Operations
Reclaim Crusher
Laboratory
Mill Wright
Electrical and Instrumentation
Mill Superintendent
Metallurgist
44
No. Required per Crew
5
2
1
1
1
1
Contracted
January 30, 2016
Page 96
17.
Star Mountain
Resources Inc.
Project Infrastructure
Buildings
The Balmat No. 4 Mine surface infrastructure includes 15 buildings, most of which were
constructed in 1969 - 1970. Figure 17-1 shows the general site layout and construction details are
given in Table 17-1. Details for the Balmat No. 2 Mine buildings are listed in Table 17-2. 45
Figure 17-1 Site Map
Table 17-1 Building Summary Number 4 Mine and Concentrator
Building Name
Dimensions
Office Complex
64 x 103
Two Store
125 x 273
Maintenance and
Warehouse
Area
(ft2)
13,184
34,125
Construction Type
Year Built
Steel Frame Concrete Block 2ith brick face.
Built up roof on conc. Plank w/ steel joists
Steel Frame, galbestos insulation panel, Built
up roof on conc. Plank w/ steel joists
1970
2005.
45
January 30, 2016
Star Mountain
Resources Inc.
Building Name
Dimensions
Area
(ft2)
16,380
Construction Type
3,362
Steel frame, galbestos insulation panel &
galbestos sheet, membrane on conc. Plank
upper roof, galbestos sheet lower roofs.
Steel frame, conc. Block lower, galbestos
insulated panel lower, insulation on
membrane
Roof on conc. Plank W3 steel joists
Steel Frame, Conc. Block Lower, Galbestos
Insulation panel lower, membrane roof on
conc.W3 steel joists
1969
Steel Frame, Conc. Block, Built-up roof on
conc. Plank W3 steel joist
Steel Frame, Steel sheet w/fiberglass sheet
Steel Sheet roof on steel purlins
Steel Sheet roof on steel purlins
1970
Steel frame, conc.block lower, galbestos on
upper, galbestos roof on steel joists
Steel Frame, Steel sheet on steel girts, Steel
sheet roof on steel purlins
Conc. Block, built-up roof on conc. Plank
1970
Wood frame, vinyl siding, asphalt shingle
roof
1985
Maint Vehicle Storage ,
Boiler Room, Change
Room
Headframe
60 x273
Partial
Lower
26 x 51 8
x70
Hoist House
135 x 138
18,630
Concentrator 4A
4B
4C
4 Stories – (all heated)
Maintenance Shop
2 story (heated)
Storage
Concentrate Storage
Concentrate Storage
2 story- (unheated)
Timber Storage Building
(unheated)
Elec. And Tire Storage
(heated)
Pine Oil Storage (heated)
133 x 267
46 x 80
67 x 97
35,511
3,680
6,499
36 x 104
3,672
70 x 140
60 x 98
94 x 161
9,800
5,880
15,134
29 x 118
3,422
24 x 40
960
22 x 32
704
25 x 33
825
20 x 22
440
10 x 10
100
70 x 120
8,400
60 x 100
6,000
30 x 60
1,800
14 x 20
280
8x8
64
Booster Pumphouse
(heated)
Lake Pumphouse
(heated)
Fuel Oil Pumphouse
(heated)
Warehouse Storage
(unheated)
Electrical Storage
(unheated)
Oil Storage (heated)
Mine Lagoon Pumphouse
(heated)
Security Gatehouse
(heated)
Page 97
Year Built
Steel Frame, Conc. block
1969
1970
1970
1970
1970
1970
1970
1970
1970
1970
1970
1970
1976
1976
1970
1970
January 30, 2016
Page 98
Star Mountain
Resources Inc.
Table 17-2 Building Summary Number 2 Mine
Building Name
Dimensions
Mine Office Complex,
Maintenance Office,
Change Room (all
unheated)
Switch Gear (unheated)
No. 2 shaft warehouse
(unheated)
Electrical substation
(unheated)
Construction Type
142 x 60
80x 47
Area
(ft2)
8,520
3,760
Year Built
Steel fra,e, Steel sheet on gorts, steel sheet
roof, roof trusses
1929
62, 47
25 x 19
28 x 100
2,604
475
2,800
1929
25 x 58
1,450
Steel frame, steel sheet on girts, steel sheet
roof, roof trusses
Steel frame, steel sheet on girts, steel sheet
on purlins
Concrete block, built up roof on concrete,
plant on trusses
1929
1929
Electrical
The primary feed for the No. 4 Mine is 115kV originating from Niagara Mohawk’s substation at
Battle Hill-Balmat #5 circuit. Downstream from the main power supply are two (2) 7500 kVA
General Electric transformers that feed the No. 4 Plant. Secondary voltage of 13,800 and 4,160
volts feeds sub-feeders to mill, mine, No. 4 ventilation fan, lake pumps and booster pumps. At the
No. 4 main ventilation fan location there is a 1,000 kVA 4,160 volt to 480 volt step-down
transformer substation. The substation switchgear is General Electric Magne Blast.
The primary feed for the No. 2 hoist fan unit is the Niagara Mohawk 23 kV Balmat-Emeryville
circuit #24. Downstream from the main power supply are two (2) 3750 kVA General Electric
transformers (23000-2200 V) feeding the surface plant with secondary voltage of 2300 V for subfeeders.
SLZ owns two portable generators for emergency use. One is a 125 kVA portable used for general
480 V / 220 V / 110 V applications. The other is a 100 kVA portable generator which will run the
No. 2 emergency egress hoist.46
2005.
46
January 30, 2016
Star Mountain
Resources Inc.
Page 99
Tailings Disposal
The tailings disposal facility covers 200 acres approximately 4,000 feet north of the mill. Water
from tailings flows through a series of retention ponds before discharge into Turnpike Creek.
Discharge is regulated by NYSPDES under permit NY0001791.
Tailings capacity remaining is estimated to be 9,000,000 tons or 20 to 25 years of production.47
47
January 30, 2016
Page 100
18.
Star Mountain
Resources Inc.
Market Studies and Contracts
Market Price and Supply History
Zinc is openly traded on the world’s major metal markets. Prices paid for zinc metal in concentrates
is typically referenced to one of these markets. Since January 2010 zinc has ranged from a low of
$0.78 / lb. to a high of $1.12 / lb. and averaged $0.94 / lb. The 36 month trailing average price as
of October 2015 was $0.92 / pound (Figure 18-1).
Figure 18-1 LME Monthly Average Zinc Cash Price and 3 Month Trailing Average 48
Global warehouse inventories of zinc metal have decreased 35% from a high of 1.55 M metric
tonnes in January 2013 to just over 0.82 M metric tonnes at the end of October 2015 (Figure 18-2).
48
London Metal Exchange, http://www.lme.com/metals/reports/averages/, Accessed on November 23, 2015.
January 30, 2016
Star Mountain
Resources Inc.
Figure 18-2 Total Global Zinc Inventories
Page 101
49
Smelter Schedule
Zinc smelter schedules typically pay 85% of the market value of contained zinc metal in
concentrates. If the concentrate grade is less than 53.33% zinc a minimum deduction of 8 units
applies. Additional byproduct elements paid for include gold and silver, and cadmium during
periods of high prices.50
Treatment charges in 2014 varied from $221 – $223 per metric tonne with a basis price of $0.91
per pound of Zn. Up and down escalators tied to the zinc price are applied to treatment charges
and these can vary from -3% to +6%. Zinc refining charges are rarely assessed and are generally
included in the treatment charges. Precious metal refining charges can vary up to $10.00 and $1.50
per payable ounce for gold and silver respectively.
49
50
Annett, Jerrold, Moenting, Grant, “Scotia Daily Mining Scoop”, Scotia Bank Mining Sales, November 23, 2015.
Infomine USA Inc, Mining Cost Service, October 2015.
January 30, 2016
Page 102
Star Mountain
Resources Inc.
Terms available from recent zinc smelter negotiations include treatment charges of $175 per metric
tonne based on a zinc price of $1,500 per metric tonne or $0.68 per pound. Applying these criteria
and the escalators to a zinc price of $0.92 per pound yields a treatment charge of $187.51 per ton.51
Penalties may be assessed to concentrates containing arsenic, antimony, iron, lead, manganese,
cobalt, bismuth, nickel, copper, alumina, germanium, selenium, tellurium and mercury above
threshold values.
Balmat concentrates have historically contained 840 to 850 ppm mercury. Provisions from
previous smelter contracts incurred a $20 per ton penalty for mercury concentrations at this level.
Transportation
Balmat is located 39 miles south of the port of Ogdensburg, New York. Ogdensburg is the only
US port on the St. Lawrence Seaway and can accommodate ships with a draft of 27 feet. The port
features a 1,250 foot dock with a live load capacity of 1,000 pounds per square foot. Marine
terminal services include bulk, breakbulk, general cargo and heavy lift cargoes.52
Trucking and rail transportation are also available options to move concentrate. Rail load out
facilities are also available adjacent to the Balmat mill and several trucking companies could be
retained.
Rates for over the road trucking in the US averaged $0.17 per ton-mile during 2015. Allowing an
additional 15% for the international component of trucking Balmat Concentrates to Valleyfield,
Quebec, Canada, the transportation cost per ton of concentrate is estimated at $21.51.
Smelting and Refining
There are four operating zinc concentrate smelters in North America. These are listed in Table
18-1. Balmat concentrates meet the minimum requirements of any of these plants and all would
impose penalties for mercury at levels contained in Balmat concentrates.
Annett, Jerrold, Moenting, Grant, “Scotia Daily Mining Scoop”, Scotia Bank Mining Sales, January 21, 2016.
Ogdensburg Bridge and Port Authority, http://www.ogdensport.com/obpa_facilities/port_of_ogdensburg/, accessed
November 23, 2015.
51
52
January 30, 2016
Star Mountain
Resources Inc.
Page 103
Table 18-1 North American Zinc Smelters53
Company
Canadian Electrolytic Zinc
(Glencore)
Nyrstar
HudBay Minerals
Teck Metals Ltd.
53
Plant Name
Valleyfield
Location
Valleyfield, Quebec, Canada
Clarksville Zinc Refinery
Flin Flon Zinc Plant
Trail Zinc Plant
Clarksville, Tennessee, USA
Flin Flon, Manitoba, Canada
Trail, British Columbia, Canada
Highway distance
from Balmat (mi)
110
962
1.886
2,652
January 30, 2016
Page 104
19.
Star Mountain
Resources Inc.
Permitting, Reclamation and Closure
Permitting
Tetra Tech’s fatal flaw review concluded that there are no identified permitting or regulatory
concerns that would prevent the operation of the Balmat Mine and Mill. Furthermore the project
has maintained all permits required for operations (Table 19-1). They noted that the permit for
Water Withdrawal and the Mine Permit were approaching renewal and that the net present value
for mine closure was approximately $10 M in 2010 discounted at 3.91%. 54 Both permits were
renewed in 2015.
Table 19-1 Permit Status
Agency/Permit
New Yok State Department of
Environmental Conservation
Division of Water
SPDES Permit # NY-0001781
Description
Date
SPDES – State Pollutant Discharge Elimination System
References NYDEC correspondence of 12/13/11, stating that
based upon the comprehensive inspection of the facility, the
facility is “in substantial compliance with the conditions and
limits of its SPDES permit.”
Expires
05/31/19
(A1 – A4)
New York State has changed the permit program. Due to
design pumping capacity being less than 10 MGD, the initial
permit was issued 7/06/2015. Annual reporting of water
withdrawal is required.
Expires
05/31/2019
(B, C & D)
DEC ID 6-4038-00024
NYDEC
Bureau of Water Resource
Management Division of Water
Great Lakes Water Withdrawal
Certificate
Replaced by the Water Withdrawal Permit.
NYGL #7714
NYDEC Division of
Environmental Permits
Mine Permit
#6-4038-00024/00006
Authorizes mining zinc ore (sphalerite) from underground
and surface workings on 1,661 acres of land (Balmat #2 and
#4 mines). Allows for 800 ac of surface land to be affected;
of which 459 acres is reclaimed.
Expires
08/01/2020
(E&F)
NYDEC Division of Air
Resources Air Facility
Registration ID
6-4034-00006 &
6-4038-00024
Originally issued (as ID #6-4038-00024) in 1998 with no
expiration date. Rec’d correspondence from NYSDEC
requiring submission of updated permit application by 11
September 2014.
Expires
09/03/2024
(G, H & I)
New York State Department of
Health (NYDOH) Bureau of
Water Supply Protection
Public Water Supply
ID# NY4430004
The facility is considered a non-transient non-community public
water supply. The system is inactive due to employment level
at under 25 personnel. It is intended that the system and permit
will be reinstated at such time the number of personnel
increases.
Inactive
(J, K, & L)
Elson, Geoff, Sheridan, James, Kuestermeyer, Alva, Scharnhorst, Vicki, “Fatal Flaw Review of the Balmat Zinc
Mine, New York”, Northern Zinc internal company report prepared by Tetra Tech, October 31, 2014.
54
January 30, 2016
Star Mountain
Resources Inc.
Agency/Permit
NYDEC Division of Water Bureau
of Flood Protection & Dam Safety
Dam ID# 110-3905
Page 105
Description
Date
St. Joseph’s Tailing Systems Dams A & B were
reclassified as “Class D - No Hazard”. As such, these
structures are no longer considered dams as defined by the
State, but the structures are still regulated by a
Departmental Mined Land Reclamation Permit.
Not
Required
(M)
NYDEC Chemical Bulk Storage
Certificate CBS No.
6-000122
Expires
10/01/2017
(N)
NYDEC Petroleum Bulk Storage
Certificate PBS 6-451770
Expires
09/26/2018
(O)
NYDOH Radiation Installation
Certificate No. 44023174
Expires
09/15/2016
(P)
U.S. DOT Pipeline and
Hazardous Materials Safety
Administration 060215 552
062X
DOT Hazardous Material Registration 060215 552 062X
Expires
09/30/2016
(Q)
New York Department of Labor
As reported by HudBay:
By Person
(R)
Explosive License Own and Possess Baderman R - expires 01
December 2016
Blasters Certificate of Competence Baderman R – expires 01 Jul
2016, Hence J – expires 01March 2017
Reclamation and Closure
The Balmat Mine Closure Plan and Cost Estimate was updated in 2010 by SRK. The study is a
prefeasibility level plan and is shown in Table 19-2. The total estimated cost to close the Balmat
Mine is $9,985,000 expressed in 2014 dollars. The cost includes surface activities, shaft capping
and post closure monitoring.55
The Balmat No. 4 mine and mine tailings reclamation is assured with a $1.8 million certificate of
deposit. The closure and reclamation plan in place will require the removal of mining specific
infrastructure and conversion of the mine site itself to a moderate to heavy industry zoned site.
Salvage of the mine and mill equipment is anticipated to cover the additional costs identified in
the closure plan.
Elson, Geoff, Sheridan, James, Kuestermeyer, Alva, Scharnhorst, Vicki, “Fatal Flaw Review of the Balmat Zinc
Mine, New York”, Northern Zinc internal company report prepared by Tetra Tech, October 31, 2014
55
January 30, 2016
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Star Mountain
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Tailings effluent is continuously monitored in accordance with the SPDES permit with a
continuous record of flow rate and temperature. A monthly composite sample is collected for
compliance and reporting purposes. Periodic elevation of zinc and iron in solution has been
controlled to the satisfaction of the NYSDEC with the addition of sodium sulfate to sources
upstream from the water holding ponds.
The risk of long-term environmental liability at Balmat due to water discharge is reduced by the
alkaline, acid-consuming nature of the host rock surrounding mineralization. Water quality
sampling data from the Balmat No. 3 mine indicates that as the mine floods, oxygen deficiency in
the mine water will reduce its ability to react with host rock mineralization and discharge should
not require further treatment.56
56
January 30, 2016
Page 107
Table 19-2 Reclamation and Closure Cost Estimate
Component
Demolition and
Miscellaneous
Infrastructure
Tailings
Surface Water Diversions
Contaminated Soils
Landfills
Closure Project
Management Project
Administration and
Environmental
Management Costs
2014 NPV
2015
$3,297,276
$3,426,199
$4,255,039
$900,640
$108,761
$63,271
$603,691
$457,639
$935,855
$113,014
$33,503
$319,662
$4,118,755
$5,285,873
$4,471,920
$0
$0
Subtotal
$9,228,678
Post Closure Costs
Earthworks Inspection and
$214,089
Maintenance
Environmental Management $542,0125
2016
2017-2019
2020-2024
2025-2029
2030
2031-2039
$0
$15,000
$15,000
$15,000
$15,000
$5,000
$0
$99,617
$38,862
$19,580
$18,095
$18,095
Perpetual
$33,503
$319,662
$5,000
$0
Subtotal
$756,214
$0
$0
$114,617
$53,862
$34,580
$33,095
$23,095
$5,000
Total
$9,984,892
$5,285,873
$8,485,768
$114,617
$53,862
$34,580
$33,095
$23,095
$5,000
January 30, 2016
Page 108
20.
Star Mountain
Resources Inc.
Capital and Operating Cost Estimates
Capital Costs
Project capital including capital development totals $14.75 M or $0.14/lb of zinc in concentrates
over the life of the reserve (Table 20-1 and Table 20-2).
Ventilation system upgrades consist of several bulkheads and doors, installation of 3 primary
intake fans between the No. 2 and No. 4 mines, drawing air through the No. 2 mine and purchase
and installation of a 1,000 HP booster fan and variable speed drive to be installed on the 3100 level
below the raises from Upper Fowler. 57
Equipment repairs include servicing, tuning, replacing batteries, hydraulic hoses and nonserviceable tires. Some units will also require DPM filters or engine upgrades to reduce DPM
emissions to acceptable levels. The current equipment fleet’s capacity exceeds the anticipated
production levels and only the lower cost units will be placed back into service. Successful
reductions in DPM emissions can reduce the requirements for additional ventilation fans.
Mine rehabilitation includes re-bolting and screening costs for approximately 5,000 feet of drift.
The Newfold area exhibits the greatest amount of bolt corrosion and would require between 1,000
and 1,500 feet of rehabilitation work. Other areas of the mine are in better condition and will be
evaluated on a drift by drift basis.
Pre-production carrying costs include taxes, insurance, and salaries for care and maintenance
employees and utilities. Startup costs include additional labor, utilities and supplies for
approximately three months.
Table 20-1 Infrastructure, Holding and Startup Capital
Item Description
Ventilation System Upgrades
Equipment Repairs
Mine Rehabilitation
Preproduction Carrying Costs
Startup Costs
15% Contingency
Total
57
Amount ($000’s)
$1,431
$500
$1,000
$1,250
$775
$743.4
$5,699.4
Carter, Rob, “Balmat Mine Re-Opening Plan”, May 2010, HudBay Minerals internal company report.
January 30, 2016
Star Mountain
Resources Inc.
Capital and Operating Cost Estimates
Page 109
Capital development will be completed concurrent with production and includes access to the
lower Mud Pond, upper and lower Mahler zones and continuation of the Newfold ramp to the top
of the mineralization. Also included in development is approximately 700 feet of drifting to
complete the secondary egress and ventilation drift to complete the connection between Mahler
and Newfold.
Table 20-2 Capital Development Requirements
Item Description
Primary Capital Drifting
Secondary Capital Drifting
Capital Raising
Total
Quantity (ft)
7,296
1,535
265
Unit Cost ($/ft)
$1,000
$900
$1,500
9,096
Extension ($000’s)
$7,296
$1,383
$398
$9,046
Operating Costs
Detailed operating costs are shown in Table 20-3. Mining costs were estimated by Practical Mining
using local labor and commodity prices. Historical mobile equipment maintenance costs from
2008, escalated by 15%, were also included.
Updated milling cost estimates total $9.05 per ton, including labor at $2.14 per ton, power at $1.85
per ton, maintenance at $1.71 per ton and reagents and consumables at $3.36 per ton. Concentrate
transportation and treatment charge estimates were provided by SLZC. Unit operating costs per
pound of zinc in concentrates are anticipated to average $0.59 per pound zinc.
Table 20-3 Unit Operating Costs
Item Description
Room and Pillar Mining
Stope Development Drifting
Long Hole Stope Mining
Waste Backfill
Expensed Waste
Primary Crushing and Hoisting
Milling
Site Administration
15% Contingency
Concentrate Transportation
Smelter Treatment Charge
Smelter Penalty
Units
Ore ton
Ore ton
Ore ton
Backfill ton
Waste ton
Ore ton
Ore Ton
Ore ton
Ore ton
Concentrate ton
Concentrate ton
Concentrate ton
Unit Cost
$47.64
$47.64
$27.36
$9.49
$29.68
$4.15
$9.05
$3.72
$8.69
$21.51
$187.51
$20.00
January 30, 2016
Page 110
Item Description
0.3% Average Royalty
Total
Cash Cost
Units
Ore ton
Ore ton
Zn lb
Star Mountain
Resources Inc.
Unit Cost
0.30
$104.03
$0.59
January 30, 2016
Star Mountain
Resources Inc.
21.
Economic Analysis
Page 111
Economic Analysis
The results of constant dollar cash flow analysis are presented in Table 21-1. At a $0.92 per pound
zinc price the Balmat reserves will generate a 25% IRR and $3.2M NPV at 5%.
Table 21-1 Cash Flow Summary and Financial Indicators
Ore Mined for Processing
Zinc Grade
Contained Zinc
Capital Development
Mill Recovery
Zinc Recovered in Concentrate
Zinc Price
Smelter Deduction
Transportation Charges
Penalty Charges
Revenue
Operating Costs (Includes 15% Contingency
Smelter Charges
Royalty 0.3%
EBITA
Capital
Income Tax
Net Income
Discounted Cash Flow @ 5%
Payback Period
Profitability Index
Internal Rate of Return
585
9.2%
53.8
9,067
96%
51.7
$0.92
15%
$187.51
$21.51
$20.00
$80,788
($39,533)
($21,313)
($178)
$19,764
($14,745)
($590)
$4,427
$3,165
2.5
1.2
25%
Kt
kt
feet
kt
/pound
/ton concentrate
/ton concentrate
/ton concentrate
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
years
Sensitivity Analysis
Project sensitivities to changes in zinc price, operating costs and capital costs were calculated by
varying each from -20% to +20%. The impact on NPV, profitability index and IRR are shown in
Figure 21-1 through Figure 21-3. Zinc pricing imparts the greatest degree of sensitivity with a 10%
improvement in price increasing the project 5% NPV to $8.5M and the IRR to 63%. Operating
costs would need to have a negative variance of 14% to reduce the project NPV to zero.
January 30, 2016
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Star Mountain
Resources Inc.
Figure 21-1 NPV Sensitivity
Figure 21-2 Profitability Index Sensitivity
January 30, 2016
Star Mountain
Resources Inc.
Economic Analysis
Page 113
Figure 21-3 IRR Sensitivity
January 30, 2016
Page 114
22.
Star Mountain
Resources Inc.
Adjacent Properties
SLZC properties include the past producing Edwards, Peirrepont and Hyatt Mines.
January 30, 2016
Star Mountain
Resources Inc.
23.
Other Relevant Data and Information
Page 115
Other Relevant Data and Information
Mine production and Reserve Additions
The results reported herein are based on the 2-1/2-year, Proven and Probable Reserve mine plan,
itself part of a larger, 8-1/2-year mine plan which includes mineralized material not currently
classified as reserves.
This situation bears on items that are critical to underground mining operations. The upgrade of
possible mineralization to Proven and Probable Reserves requires new underground excavations
for drill stations and other openings immediately incurring capitalized development costs. All
underground mining companies are reticent to spend these additional funds until the resource is
actually needed for a short range mine plan, normally six months to one year out. Underground
mines with a long history of operations, like Balmat, very quickly settle on the proportionate share
of possible to Proven and Probable Reserves that works to continually replace mine production.
Mining operations essentially treat the two to three year reserve as a renewable resource, in other
words sustaining capital expenditures aim to replace ton for ton mined ore with Proven and
Probable Reserves, upgraded from possible mineralization. In effect, underground mines generally
retain a three year running reserve over many consecutive years of production.
The orebodies mined at Balmat form long, continuous bodies with the length dimension many
times longer than the width and thickness dimensions. This geometry gives great confidence to the
strategy of exploring directly outward from known mineral resources. Over the life of the mine,
additions come in increments, more or less equal to the mined depletions on a year-by-year basis.
Certain portions of the possible mineralization are reclassified to Proven and Probable Reserves
as development and production headings are excavated. In fact, the distinction between possible
mineralization and Proven and Probable Reserves at Balmat is dependent upon the distance to a
mine excavation driven in ore and mineralization cannot be classified to Proven and Probable
Rserves until mining approaches to within the predefined distance.
On a district wide basis, larger step-function additions from the discovery of new ore bodies come
every 16 to 18 years or so.
January 30, 2016
Page 116
Star Mountain
Resources Inc.
Figure 23-1 Annual Production and Reserves 1930 - 2008
Table 23-1 Significant Events in Reserve Additions and Depletions
1942
1951
1962
1964
1966
1971-72
1974
1976
1980
1985
1997
2005
2006
WWII 3.2 million tons added
1.2 million tons added
Fowler orebody discovery 7 million tons added
Recalculated reserve to include projected reserves, 7.5 million tons added
Reclassified reserves to remove projected reserves, 1 million tons deleted
3.1 million tons deleted
Low grade reserve removed, 5 million tons deleted
Mud Pond re-interpreted, 3.5 million tons added
HudBay feasibility report 1.9 million tons
HudBay reserves after 1 year of production 3.5 million tons
January 30, 2016
Star Mountain
Resources Inc.
24.
Interpretation and Conclusions
Page 117
Interpretation and Conclusions
Conclusions
The Balmat No. 4 Mine has been well maintained since being placed on a care and maintenance
status in 2008. The mine and mill are past producers with demonstrated production rates and
recoveries well within the planned restart parameters. The mine and mill could resume production
with only minor capital expenditure.
There is sufficient reserve for 18 months production and the potential to increase reserves through
additional exploration. Like most underground mines, the reserve life is limited by development
and as additional development work is completed the reserves grow accordingly. Under favorable
market conditions the development rate could be increased, thereby increasing the reserve growth
rate and supporting a higher daily rate of production without the need for infrastructure expansion.
The Balmat Mine operated continuously from 1930 to 2001 and has produced over 33.8 million
tons of 8.6% zinc ore. During this time period the exploration successfully replaced the reserves
that had been mined expanding upon known areas of mineralization and discovering new ones.
Adjacent to the current reserves is additional mineralized material defined by drilling and of similar
grade to the reserves that in all likelihood will be reclassified to reserve status as the mine
progresses. Beyond this are additional exploration targets waiting to be tested.
Project Risks
Depressed zinc prices below $0.92 per pound represent the most significant risk to the profitable
re-start of mining operations at Balmat. Other risks include lower than planned mine grade and
operating cost over runs. These risks along with potential mitigating measures are presented in
Table 24-1.
Table 24-1 Potential Project Risks
Risk
Zinc Price
Continued High DPM
Concentration
Potential Impact
Reduced Project
Profitability
Failure to Meet
Production Goals
Mitigating Measures
Implement Cost Reduction
Strategies
Diesel Equipment Modifications
and Ventilation System Upgrades
Run of Mine Grade
Less than Planned
Reduced Project
Profitability
Reduce Dilution
Opportunities
Improved Operating
Margins
Lower than Planned
Cost to Achieve DPM
Standards
Improved Operating
Margins
January 30, 2016
Page 118
Mine Costs Higher than
Planned
Reduced Project
Profitability
Alternative Mining
Adjust Cut Off Grade
Methods,
Star Mountain
Resources Inc.
Improved Operating
Margins
January 30, 2016
Star Mountain
Resources Inc.
25.
Recommendations
Page 119
Recommendations
Opportunities to improve the mine and mill performance or reduce costs are listed in Table 25-1.
These are nearly equally divided between the mine and mill and each could contribute to improved
operating margins. The greatest impact would likely come from optimizing mine geometries and
implementation of cemented backfill techniques to allow recovery of mineralization left in pillars
during the 85 year history of the Balmat Mines.
Table 25-1 Recommendations
Recommendation
Optimize Mining and Ore Geometries and Planned Dilution
Ventilation System and DPM Concentration Modeling
Dense Media Separation Test Work
Pillar Recovery with Cemented Backfill
Concentrate Grade Optimization Test Work
Test Work to Improve Zinc Recovery through Regrind of Scavenger Concentrates
and Cleaner Tailings
Estimated Cost (000’s)
$20k
$30k
$50k
$40k
$20k
$20k
January 30, 2016
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26.
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Resources Inc.
Bibliography
Annett, Jerrold, Moenting, Grant, “Scotia Daily Mining Scoop”, Scotia Bank Mining Sales,
November 23, 2015.
Annett, Jerrold, Moenting, Grant, “Scotia Daily Mining Scoop”, Scotia Bank Mining Sales,
January 21, 2016.
Barton, Kate E., Howell, David G., Vigil, Jose F., Reed, John C., and Wheeler, John O.,
2003.USGS Geologic Investigations Series I-2781, Version 1.0. The North America Tapestry of
Time and Terrain.
Bleiwas, Doanald I. and DiFrancesco, Carl, “Historical Zinc Smelting in New Jersey,
Pennsylvania, Virginia, West Virginia and Washington D.C., with Estimates of Atmospheric Zinc
Emissions and Other Materials”, Open File Report 2010-1131, U.S. Geological Survey, Reston,
Virginia, 2010, page 99.
Carter, Rob, “Balmat Mine Re-Opening Plan”, May 2010, HudBay Minerals internal company
report.
Catalano, Joseph, Hollocher, Kurt, “Geology of the Adirondack Lowlands”, Colgate University,
http://www.colgate.edu/facultysearch/FacultyDirectory/wpeck/adirondacklowlands.
Chiarenzelli, Jeff, Kratzmann, David, Selleck,Bruce, deLorraine, William, 2015. Age and
provenance of Grenville supergroup rocks, Trans-Adirondack Basin, constrained by detrital
zircons Geology, February 2015, v. 43, p. 183-186.
Cocks, L. Robin M. and and Torsvik, Trond H., 2005. Baltica from the late Precambrian to midPalaeozoic times: The gain and loss of a terrane’s identity: Elsevier Earth-Science Reviews 72
(2005) p 39-66.
Davidson, A., An Overview of Grenville Province Geology, Canadian Shield, in Lucas, S.B. and
St-Onge, M.R., 1998, Geology of the Precambrian Superior and Grenville Provinces and
Precambrian Fossils in North America, Geology of Canada, no. 7, p. 205-270.
Derby, James; Fritz, Richard; Longacre, Susan; Morgan, William; Sternbach, Charles (2013-0120). The Great American Carbonate Bank: The Geology and Economic Resources of the
Cambrian-Ordovician Sauk Megasequence of Laurentia, AAPG Memoir 98.
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Bibliography
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Elson, Geoff, Sheridan, James, Kuestermeyer, Alva, Scharnhorst, Vicki, “Fatal Flaw Review of
the Balmat Zinc Mine, New York”, Northern Zinc internal company report prepared by Tetra Tech,
October 31, 2014.
Emsbo, Poul, 2009, Geologic criteria for the assessment of sedimentary exhalative (sedex) Zn-PbAg deposits: U.S. Geological Survey Open-File Report 2009-1209, 21p.
Hatcher, R. D. Jr., W. A. Thomas & G. W. Viele, eds. The Appalachian-Ouachita Orogen in the
United States. Boulder: Geological Society of America, 1989.
HudBay Minerals Inc, Annual Information Form for the Year Ended December 31, 2005, March
21, 2006.
29, 2007.
17, 2008.
17, 2009.
HudBay Minerals Inc., “Balmat No. 4 Zinc Mine Reopening Feasibility Study”, Internal company
report, October, 2005.
Kelly, Brian, “NYPA power allocation could help create $33m investment, create 100 jobs at
Gouverneur zinc mine”, Watertown Daily Times, December 18, 2014.
Leach, D.L., Taylor, R.D., Fey, D.L., Diehl, S.F., and Saltus, R.W., 2010, A deposit model for
Mississippi Valley-Type lead-zinc ores, chap. A of Mineral deposit models for resource
assessment: U.S. Geological Survey Scientific Investigations Report 2010-5070-A, 52p.
London Metal Exchange, http://www.lme.com/metals/reports/averages/, Accessed on November
23, 2015.
Marshak, Stephen, Essentials of Geology (Third Edition), 2009.
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McLelland, James M., Selleck, Bruce W., and Bickford, M.E., 2010, Review of the Proterozoic
evolution of the Grenville Province, its Adirondack outlier, and the Mesoproterozoic inliers of the
Appalachians, in Tollo, R.P., Bartholomew, M.J., Hibbard, J.P., and Karabinos, P.M., eds., From
Rodinia to Pangea: The Lithotectonic Record of the Appalachian Region: Geological Society of
America Memoir 206, p. 1-29, doi: 10.1130/2010.1206(02).
Mezger, K., van der Pluijm, B. A., Essene, E. J., Halliday, A.N., 1992. The Carthage-Colton
mylonite zone (Adirondack Mountains, New York); the site of a cryptic suture in the Grenville
Orogen? Journal of Geology 100, 630-638.
Mine Safety and Health Administration “MSHA M/NM Personal Health Sampling”, ,
http://www.msha.gov/drs/ASP/MineAction.asp, accessed November 20, 2015.
Ogdensburg Bridge and Port Authority,
http://www.ogdensport.com/obpa_facilities/port_of_ogdensburg/, accessed November 23, 2015.
OntZinc Corporation, “Annual Information Form For the year ended December 31, 2003,
September 29, 2004.
Rivard, David and Stephens, Mathieu, Beaufield Resources, 2013. Balmat Reserves and
Exploration Potential, Balmat internal document, 25p.
Schermerhorn, Ryan, Personal communication, December 3, 2015.
Share, Jack. (2012, December 8). The Adirondack Mountains of New York State: Part II- What
do we know about their geological evolution? Retrieved from http://written-in-stone-seenthrough-my-lens.blogspot.com/2012/12/the-adirondack-mountains-of-new-york.html.
St. Lawerence County Government, https://www.co.st-lawrence.ny.us/Departments/RealProperty/.
Taylor, Joshua P. and Fitzgerald, Paul G., 2011, Low-temperature thermal history and landscape
development of the eastern Adirondack Mountains, New York: Constraints from apatite fissiontrack thermochronology and apatite (U-Th)/He dating, GSA Bulletin, March/April 2011; v. 123;
no. ¾; p. 412-426.
Tollo, Richard P.; Louise Corriveau; James McLelland; Mervin J. Bartholomew (2004).
"Proterozoic tectonic evolution of the Grenville orogen in North America: An introduction". In
Tollo, Richard P.; Corriveau, Louise; McLelland, James; et al. Proterozoic tectonic evolution of
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the Grenville orogen in North America. Geological Society of America Memoir 197. Boulder, CO.
pp. 1–18.
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Glossary
Assay: The chemical analysis of mineral samples to determine the metal content.
Asbuilt: a field survey, construction drawing, 3D model, or other descriptive representation of an
engineered design for underground workings.
Composite:
distance.
Combining more than one sample result to give an average result over a larger
Concentrate: A metal-rich product resulting from a mineral enrichment process such as gravity
concentration or flotation, in which most of the desired mineral has been separated from the waste
material in the ore.
Crushing:
processing.
Initial process of reducing material size to render it more amenable for further
Cut-off Grade (CoG):
The grade of mineralized rock, which determines as to whether or
not it is economic to recover its gold content by further concentration.
Dilution:
Dip:
Waste, which is unavoidably mined with ore.
Angle of inclination of a geological feature/rock from the horizontal.
Fault: The surface of a fracture along which movement has occurred.
Footwall:
The underlying side of a mineralized body or stope.
Gangue:
Non-valuable components of the ore.
Grade:The measure of concentration of valuable minerals within mineralized rock.
Hanging wall:The overlying side of a mineralized body or stope.
Haulage:
A horizontal underground excavation which is used to transport mined rock.
Igneous:
Primary crystalline rock formed by the solidification of magma.
Kriging:
A weighted, moving average interpolation method in which the set of weights
assigned to samples minimizes the estimation variance.
January 30, 2016
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Glossary
Page 125
Level: A main underground roadway or passage driven along a level course to afford access to
stopes or workings and to provide ventilation and a haulage way for the removal of broken rock.
Lithological: Geological description pertaining to different rock types.
Milling:
A general term used to describe the process in which the ore is crushed, ground and
subjected to physical or chemical treatment to extract the valuable minerals in a concentrate or
finished product.
Mineral/Mining Lease:
Mining Assets:
A lease area for which mineral rights are held.
The Material Properties and Significant Exploration Properties.
Sedimentary: Pertaining to rocks formed by the accumulation of sediments, formed by the erosion
of other rocks.
Sill1: A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection
of magma into planar zones of weakness.
Sill2: The floor of a mine passage way.
Stope: An underground excavation from which ore has been removed.
Stratigraphy: The study of stratified rocks in terms of time and space.
Strike: Direction of line formed by the intersection of strata surfaces with the horizontal plane,
always perpendicular to the dip direction.
Sulfide:
A sulfur bearing mineral.
Tailings:
extracted.
Finely ground waste rock from which valuable minerals or metals have been
Thickening: The process of concentrating solid particles in suspension.
Total Expenditure: All expenditures including those of an operating and capital nature.
Variogram: A plot of the variance of paired sample measurements as a function of distance
and/or direction.
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Reserve: That part of a mineral deposit which could be economically and legally extracted or
produced at the time of the reserve determination.
Reserves are customarily stated in terms of "ore" when dealing with metalliferous minerals; when
other materials such as coal, oil, shale, tar, sands, limestone, etc. are involved, an appropriate term
such as "recoverable coal" may be substituted.
Proven (Measured) Reserves: Reserves for which (a) quantity is computed from dimensions
revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the
results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced
so closely and the geologic character is so well defined that size, shape, depth and mineral content
of reserves are well-established.
Probable (Indicated) Reserves: Reserves for which quantity and grade and/or quality are
computed form information similar to that used for proven (measure) reserves, but the sites for
inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced.
The degree of assurance, although lower than that for proven (measured) reserves, is high enough
to assume continuity between points of observation.
January 30, 2016
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Appendix A: Practical Mining LLC Reserves
Mine Plan Maps
Page 127
Appendix A: Practical Mining LLC Reserves Mine Plan Maps
January 30, 2016
19400
19600
19800
20000
20200
20400
PRACTICAL MINING LLC
Elko, Nevada 89801
(775) 345-3718
Mineral Resource Professionals
17000
17000
NEWS
2
1
100
0
50
100
150
200
250
NE
W
07
NEWS
16800
16800
8
0
NEW
Feet
Scale 1"=100'
LEGEND
P
CA
NW
16600
16600
ES
1
FS
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
16400
16400
BALMAT
New Fold -3327 Level
16200
16200
19400
19600
19800
20000
20200
20400
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Elko, Nevada 89801
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NE
W
05
NEW01
16800
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NEW
02
NEW
04
17000
17000
NEW03
6
0
NEW
100
0
50
100
150
200
250
Feet
FA
X
LEGEND
NW
FS
1
16600
16600
NW
Scale 1"=100'
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
16400
16400
BALMAT
16200
16200
19400
19600
19800
20000
20200
20400
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16800
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(775) 345-3718
16800
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
16600
16600
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
16400
16400
Q2 2017
BALMAT
NWFS1
16200
16200
19400
19600
19800
20000
20200
20400
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(775) 345-3718
16800
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
16600
16600
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
XC
NW
3
16400
1
16400
4
2
XC
NW
XC
NW
XC
NW
Q1 2017
Q2 2017
BALMAT
16200
16200
19400
19600
19800
20000
20200
20400
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Elko, Nevada 89801
(775) 345-3718
16800
16800
100
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50
100
150
200
250
Feet
Scale 1"=100'
16600
16600
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
16400
Q4 2016
N1
16400
F
NW
Q1 2017
Q2 2017
FS1
NW
BALMAT
16200
16200
19400
19600
19800
20000
20200
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19000
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(775) 345-3718
17200
17200
1
MW
DN
MW
D
0
50
100
150
200
250
Feet
17000
17000
100
Scale 1"=100'
LEGEND
AX
Q1 2016
Q3 2017
Q2 2016
Q4 2017
1
DS
MW
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler White
Dolomite -3298 Level
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M
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MW
D
MW
DS
0
50
100
150
200
250
Feet
17000
17000
100
Scale 1"=100'
LEGEND
AX
Q1 2016
Q3 2017
Q2 2016
Q4 2017
1
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler White
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MW
D
N1
17200
17200
100
0
50
AX
MWD
100
150
200
250
Feet
Scale 1"=100'
W
M
LEGEND
1
DS
16800
16800
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
16600
16600
BALMAT
Mahler White
16400
16400
18000
18200
18400
18600
18800
19000
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17200
17200
0
2
W
DN
50
100
150
200
250
Feet
17000
17000
100
Scale 1"=100'
Q1 2016
Q3 2017
Q2 2016
Q4 2017
M
W
DS
1
MWDAX
MW
D
N1
M
LEGEND
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler White
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150
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250
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M
W
DN
2
Scale 1"=100'
LEGEND
Q3 2017
Q2 2016
Q4 2017
MW
DN
1
16800
16800
Q1 2016
Q3 2016
Q4 2016
Q1 2017
16600
16600
Q2 2017
BALMAT
Mahler White
16400
16400
17800
18000
18200
18400
18600
18800
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16800
16800
100
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50
100
150
200
250
Feet
Scale 1"=100'
M
W
DN
2
LEGEND
Q3 2017
Q2 2016
Q4 2017
MW
DN
1
Q1 2016
16600
16600
Q3 2016
Q4 2016
Q1 2017
Q2 2017
16400
16400
BALMAT
Mahler White
16200
16200
17600
17800
18000
18200
18400
18600
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50
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150
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250
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Scale 1"=100'
Q1 2016
Q3 2017
Q2 2016
Q4 2017
MW
DN
1
LEGEND
16600
16600
MW
DS
1
Q3 2016
Q4 2016
Q1 2017
Q2 2017
16400
16400
BALMAT
Mahler White
16200
16200
17600
17800
18000
18200
18400
18600
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Scale 1"=100'
LEGEND
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16000
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
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BALMAT
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15800
Mahler White
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BALMAT
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LEGEND
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16000
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
BALMAT
15800
15800
Mahler White
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17200
17400
17600
17800
18000
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13400
13600
13800
14000
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NS
T0
7
14000
14000
NS
T0
8
14200
14200
NST10
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
13800
13800
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
13600
13600
BALMAT
Mud Pond QD
-2007 Level
13400
13400
13000
13200
13400
13600
13800
14000
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NST01
NST02
NST03
NST04
NST05
NS
T0
7
NST06
NS
T0
8
01
14000
NST10
NST09
14000
WST
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
13800
13800
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
13600
13600
BALMAT
Mud Pond QD
-1980 Level
13400
13400
13000
13200
13400
13600
13800
14000
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NST03
NST05
NST06
NS
T0
7
14000
14000
NST04
14200
14200
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
13800
13800
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
13600
13600
BALMAT
Mud Pond QD
-1950 Level
13400
13400
13000
13200
13400
13600
13800
14000
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MN
MP
1
100
100
150
200
250
Scale 1"=100'
15800
C0
2
MP
MS
1
M
PM
ES
MB
AX
50
Feet
MPM
15800
0
LEGEND
1
C0
ES
M
PM
Q3 2017
Q2 2016
Q4 2017
09
Q1 2016
MPM08
Q3 2016
Q4 2016
15600
15600
Q1 2017
Q2 2017
BALMAT
15400
15400
14000
14200
14400
14600
14800
15000
Mud Pond Main
-3105 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
15000
16200
16200
Elko, Nevada 89801
(775) 345-3718
MPM
M
B
16000
16000
100
0
50
100
150
200
250
Feet
Scale 1"=100'
15800
15800
MP
MS
1
LEGEND
X
MA
MP
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
15600
15600
Q1 2017
Q2 2017
BALMAT
15400
15400
14000
14200
14400
14600
14800
15000
Mud Pond Main
-3080 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
15000
16200
16200
Elko, Nevada 89801
(775) 345-3718
16000
16000
100
0
50
100
150
200
250
Feet
Scale 1"=100'
15800
15800
N1
PM
M
MPM
E
Q1 2016
Q3 2017
Q2 2016
Q4 2017
S1
MPM
AX
M
PM
LEGEND
MB
Q3 2016
AP
SC
15600
M
15600
Q4 2016
PM
07
Q1 2017
Q2 2017
M
BALMAT
PM
05
MPM
06
15400
15400
14000
14200
14400
14600
14800
15000
Mud Pond Main
-3055 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
15000
16200
16200
Elko, Nevada 89801
(775) 345-3718
16000
16000
MP M
S1
100
0
50
100
150
200
250
Feet
Scale 1"=100'
15800
15800
MP
MS
2
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
15600
15600
Q1 2017
Q2 2017
BALMAT
15400
15400
14000
14200
14400
14600
14800
15000
Mud Pond Main
-3030 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
16000
16000
Elko, Nevada 89801
(775) 345-3718
15800
15800
MPMN
1
100
0
50
100
150
200
250
Feet
AX
PM
M
MB
15600
S1
MPM
15600
MPM
Scale 1"=100'
LEGEND
M
PM
Q3 2017
Q2 2016
Q4 2017
ESCA
P
04
Q1 2016
Q3 2016
Q4 2016
15400
15400
Q1 2017
Q2 2017
BALMAT
15200
15200
14000
14200
14400
14600
14800
Mud Pond Main
-2990 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
MPMN2
16000
16000
Elko, Nevada 89801
(775) 345-3718
MPMN1
15800
15800
100
MPMN3
0
50
100
150
200
250
Feet
AX
C0
2
ES
M
1
1
C0
ES
PM
MB
MP
MS
15600
MPM
15600
Scale 1"=100'
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
MPM01
Q4 2016
MPM03
02
15400
15400
MPM
Q1 2017
Q2 2017
BALMAT
15200
15200
14000
14200
14400
14600
14800
Mud Pond Main
-2956 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
14000
14200
14400
14600
14800
Elko, Nevada 89801
(775) 345-3718
MPMN2
15800
15800
100
0
50
100
150
200
250
Feet
15600
15600
Scale 1"=100'
LEGEND
MPMN3
ES
C
AP
MPMN1
Q1 2016
Q3 2017
Q2 2016
Q4 2017
PM
M
S1
Q3 2016
15400
15400
Q4 2016
Q1 2017
Q2 2017
BALMAT
15200
15200
14000
14200
14400
14600
14800
Mud Pond Main
-2898 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
18200
18400
18600
18800
19000
19200
Elko, Nevada 89801
(775) 345-3718
17400
17400
17200
17200
X
MA
MA
6
M0
MA
P
CA
ES
MA
MAMS1
MA
MM
B
100
7
MN
MA
7
MS
M
MA MS6 5
MA AMN
5
M
MS
MA
N4
M
MA
50
100
150
200
250
Feet
M
MA
S4
M
MA
N3
Scale 1"=100'
S3
M
MA
2
MN 1
A
M
MN
MA
LEGEND
S2
17000
AM
M
17000
0
N6
MA
3
MS
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
M
S4
AM
Q4 2016
Q1 2017
16800
16800
Q2 2017
BALMAT
Mahler Main
-3343 Level
16600
16600
18200
18400
18600
18800
19000
19200
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
17800
18000
18200
18400
18600
Elko, Nevada 89801
(775) 345-3718
17200
17200
5
M0
MA
P
CA
ES
X
MA
MA
MAMS1
17000
17000
100
0
50
100
150
200
250
Feet
Scale 1"=100'
LEGEND
16800
16800
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
Mahler Main
-3313 Level
17800
18000
18200
18400
18600
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
17800
18000
18200
18400
18600
18800
17200
17200
Elko, Nevada 89801
(775) 345-3718
17000
17000
S1
MAM
100
0
50
100
150
200
250
Feet
16800
16800
Scale 1"=100'
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
16600
16600
Q4 2016
Q1 2017
Q2 2017
BALMAT
16400
16400
17800
18000
18200
18400
18600
18800
Mahler Main
-3163 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
16800
17000
17200
17400
17600
17800
Elko, Nevada 89801
(775) 345-3718
16000
16000
MA
MN
4
16200
16200
MA
MN
3
100
0
50
100
150
200
250
Feet
N2
MAM
Scale 1"=100'
Q1 2016
Q3 2017
Q2 2016
Q4 2017
MA
MN
1
LEGEND
15800
15800
Q3 2016
Q4 2016
MA
Q1 2017
MM
B
MAM
Q2 2017
15600
03
15600
AX
MAM
BALMAT
ESCA
P
Mahler Main
-2566 Level
15400
15400
16800
17000
17200
17400
17600
17800
Drawn By: SB
Date: 13-Oct-15
Checked:
Date:
Drawing No:
Revision History
16800
17000
17200
17400
17600
17800
Elko, Nevada 89801
(775) 345-3718
16000
MA
MN
3
16200
16200
16000
100
0
50
100
150
200
250
Feet
Scale 1"=100'
N1
15800
15800
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
MA
M
Q3 2016
Q4 2016
Q1 2017
Q2 2017
15600
15600
MAMAX
MAM
MB
MAM04
BALMAT
ESCAP
Mahler Main
-2516 Level
15400
15400
16800
17000
17200
17400
17600
17800
Drawn By: SB
Date: 13-Oct-15
Checked:
Date:
Drawing No:
Revision History
18000
18200
18400
18600
18800
19000
Elko, Nevada 89801
(775) 345-3718
MA
M
04
17200
17200
MAMA
100
0
50
100
150
200
250
X
M AM
S1
3
MS
MA S4
M
MA 2
MS
A
M
5
MS
MA
Feet
17000
MW
DN
1
P
CA
Scale 1"=100'
LEGEND
MW
DAX
Q1 2016
Q3 2017
Q2 2016
Q4 2017
M
W
DS
1
MB
MAM
17000
ES
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler Main and
White Dolomite
-3283 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
18000
18200
18400
18600
18800
19000
Elko, Nevada 89801
(775) 345-3718
17200
17200
3
M0
MA
100
1
P
MW
DN
ESCA
17000
AX
AM
2
M
ESCP
0
50
100
150
200
250
B
Feet
17000
MAMM
MAM
S1
Scale 1"=100'
LEGEND
AX
MWD
M
Q1 2016
Q3 2017
Q2 2016
Q4 2017
1
DS
W
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler Main and
White Dolomite
-3253 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
18000
18200
18400
18600
18800
19000
Elko, Nevada 89801
(775) 345-3718
17200
17200
MA
M0
2
M
0
2
DN
W
50
100
150
200
250
Feet
AX
MAM
17000
17000
100
Scale 1"=100'
LEGEND
MWDN
MAMS1
1
MB
MAM
Q1 2016
Q3 2017
Q2 2016
Q4 2017
MWDAX
W
M
1
DS
Q3 2016
16800
16800
Q4 2016
Q1 2017
Q2 2017
BALMAT
16600
16600
18000
18200
18400
18600
18800
19000
Mahler Main and
White Dolomite
-3223 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
17800
18000
18200
18400
18600
18800
Elko, Nevada 89801
(775) 345-3718
17200
17200
17000
17000
MAM
01
ESCAP
M
W
DN
2
MAMAX
B
MAMM
100
0
50
150
200
250
MW
DN
Scale 1"=100'
LEGEND
AX
MW
DS
1
16800
16800
MW
D
100
Feet
1
MAMS1
Q1 2016
Q3 2017
Q2 2016
Q4 2017
Q3 2016
Q4 2016
Q1 2017
16600
16600
Q2 2017
BALMAT
Mahler Main and
White Dolomite
-3193 Level
16400
16400
17800
18000
18200
18400
18600
18800
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
17000
17200
17400
17600
17800
16400
16400
Elko, Nevada 89801
(775) 345-3718
MW
DN
2
16200
16200
MW
DN1
M
MA
E4
0
2
ME
A
M
50
100
150
200
250
Feet
AX
Scale 1"=100'
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
M
AM
E1
D
MW
16000
MAM
N1
100
16000
M
AM
E3
2
MN
MA
E5
AM
M
Q3 2016
15800
15800
Q4 2016
Q1 2017
Q2 2017
BALMAT
15600
15600
17000
17200
17400
17600
17800
Mahler Main and
White Dolomite
-2634 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History
17000
17200
17400
17600
17800
16400
16400
Elko, Nevada 89801
(775) 345-3718
MW
DN
1
M
AM
N4
16200
16200
M
AM
N4
0
50
100
150
200
250
Feet
DAX
MW
3
MAM
MAM
N2
N2
AM
M
Scale 1"=100'
16000
MA
MN
16000
100
LEGEND
Q1 2016
Q3 2017
Q2 2016
Q4 2017
N1
15800
MAMN1
15800
Q3 2016
Q4 2016
Q1 2017
MAM
01
Q2 2017
2
M0
MA
BALMAT
15600
15600
17000
17200
17400
17600
17800
Mahler Main and
White Dolomite
-2596 Level
Drawn By: SB
Date: 14-Oct-15
Checked:
Date:
Drawing No:
Revision History

Mineral Reserves at the Balmat Mine, St. Lawrence County, New York

Transcription

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