western copper feasibility study

8/14/2019 Western Copper feasibility study

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Nevada StarResource Corp.

Design Criteria

OK Mine

Western States EngineeringProject No. 98010

2700 E. Executive Drive, Suite 100 Tucson, Arizona 85706

Telephone: 520-889-2040 Fax: 520-889-2733


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Western States Engineering

Tucson, Arizonai

NEVADA STAR OK MINE PROJECTFEASIBILITY STUDY

Transmittal Letter

Executive Summary

1.0 Introduction.............................................................................................111.1 General ................................................................................................... 111.2 Project Location ...................................................................................... 111.3 Project History......................................................................................... 111.4 Land Tenure ............................................................................................ 11

Figure 1.1 - Map Showing Project Location ........................................... 12Figure 1.2 - OK Mine Project Location ................................................. 131.5 Project Concept ....................................................................................... 141.6 Data Sources............................................................................................ 14

2.0 Geology and Mineral Resources ............................................................... 212.1 Introduction ............................................................................................. 212.2 Regional Geology.................................................................................... 21

Figure 2.1 - Site Map............................................................................... 222.3 Mineral Deposit Description ................................................................... 232.4 Database .................................................................................................. 23

2.4.1 General...................................................................................... 232.4.2 Data Source............................................................................... 242.4.3 Survey, Location and Elevation Control................................... 272.4.4 MDA Independent Sampling .................................................... 282.4.5 Twinned Holes .......................................................................... 2112.4.6 Specific Gravity ........................................................................ 2132.4.7 Data Used in Modeling ............................................................. 214

2.5 Mineral Resources ................................................................................... 2162.5.1 Methodology............................................................................. 2162.5.2 Hidden Treasure........................................................................ 220

Figure 2.2 - HT Collar Map ...................................................... 221

Figure 2.3 - HT Cross Section .................................................. 222Figure 2.4 - HT Bench Map...................................................... 223Figure 2.5 - HT Model Differences .......................................... 225

2.5.3 Maria......................................................................................... 226Figure 2.6 - Maria Drill Hole Map ........................................... 227


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Figure 2.7 - Maria Cross Section .............................................. 228Figure 2.8 - Maria Level Map................................................... 229

2.5.4 Copper Ranch............................................................................ 230Figure 2.9 - Copper Ranch Drill Hole Map .............................. 231

Figure 2.10 - Copper Ranch Section......................................... 232Figure 2.11 - Copper Ranch Level Map ................................... 233

2.5.5 OK Mine ................................................................................... 234Figure 2.12 - OK Mine Drill Hole Collars................................ 236Figure 2.13 - OK Section .......................................................... 237Figure 2.14 - OK Level Map .................................................... 238

2.5.6 Stockpiles.................................................................................. 2412.5.7 Past Production and Previous Resource Estimates................... 242

2.6 Qualifications, Risks and Opportunities.................................................. 243

3.0 Geotechnical and Hydrology ..................................................................... 313.1 General ................................................................................................... 313.2 Investigation ............................................................................................ 313.3 Site Conditions ........................................................................................ 313.4 Analysis and Recommendations.............................................................. 313.5 Water Resources...................................................................................... 31

4.0 Mineable Reserves and Mine Plan ........................................................... 414.1 Methodology ........................................................................................... 424.2 Ultimate Pits ........................................................................................... 42

Figure 4.1 - OK Mine Ultimate Pit Grade - Tonnage Curve................... 44

Figure 4.2 - Hidden Treasure Ultimate Pit Grade - Tonnage Curve ....... 44Figure 4.3 - Copper Ranch Ultimate Pit Grade - Tonnage Curve........... 45Figure 4.4 - Maria Ultimate Pit Grade - Tonnage Curve ........................ 45

4.3 Pit Designs............................................................................................... 46Figure 4.5 - Hidden Treasure and Maria Pit and Dump Design.............. 47Figure 4.6 - Copper Ranch Pit and Dump Design................................... 48Figure 4.7 - OK Pit and Dump Design.................................................... 49

4.4 Dump Designs ......................................................................................... 4104.5 Production Schedule................................................................................ 4114.6 Mine Equipment and Costs ..................................................................... 414

5.0 Plant Design Criteria................................................................................... 515.1 Metallurgical Testing .............................................................................. 515.2 Design Criteria ........................................................................................ 53

5.2.1 Site Conditions.......................................................................... 535.2.2 Ore Characteristics.................................................................... 53


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5.2.3 Crushing.................................................................................... 535.2.4 Heap Construction .................................................................... 545.2.5 Solution Handling and Leaching .............................................. 545.2.6 Solution Pond & Tank Data...................................................... 55

5.2.7 Solvent Extraction..................................................................... 555.2.8 Piping and Materials - SX Plant ............................................... 575.2.9 SX Instrumentation and Controls ............................................. 575.2.10 SX Area Lighting...................................................................... 585.2.11 Painting ..................................................................................... 585.2.12 Organic Removal - Electrolyte Filters ...................................... 585.2.13 Electrolyte Heat Exchangers..................................................... 595.2.14 Tank Capacity Data .................................................................. 595.2.15 Electrowinning.......................................................................... 59

Operational Aspects .................................................................. 59Cell and Electrode Data ............................................................ 510

Electrolyte................................................................................. 511Electrical System ...................................................................... 511Building .................................................................................... 512Piping ........................................................................................ 512Tank Data.................................................................................. 512EW Additives............................................................................ 513Miscellaneous Facilities............................................................ 513

6.0 Process Plant ................................................................................................. 616.1 Crushing and Agglomeration .................................................................. 616.2 Leach Heaps ............................................................................................ 626.3 Heap Irrigation ........................................................................................ 626.4 Solvent Extraction ................................................................................... 636.5 Electrowinning ........................................................................................ 65

7.0 Infrastructure and Utilities........................................................................ 717.1 Site Development .................................................................................... 717.2 Maintenance ............................................................................................ 717.3 Administration......................................................................................... 717.4 Site Access .............................................................................................. 727.5 Power and Other Utilities/Services ......................................................... 72

8.0 Environmental .............................................................................................. 818.1 Required Authorizations.......................................................................... 81

List of Permits Required for the OK Mine Project ................................. 828.2 Specific Permit Requirements ................................................................. 83


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8.2.1 Deposits on Private Land.......................................................... 838.2.2 Deposits on Federal Land ......................................................... 848.2.3 Processing Facilities ................................................................. 858.2.4 Support Facilities ...................................................................... 87

8.3 Other Environmental Considerations ...................................................... 878.4 Conclusions ............................................................................................. 88List of Permits Acquired for the OK Mine Project .......................................... 89

9.0 Schedule ................................................................................................... 919.1 Introduction ............................................................................................. 91

9.1.1 Engineering............................................................................... 919.1.2 Pre-Operation Stage.................................................................. 919.1.3 Pre-Production Stage ................................................................ 91

9.2 Basis and Logistics.................................................................................. 919.2.1 Selection Criteria ...................................................................... 919.2.2 Design Criteria.......................................................................... 929.2.3 Supervision ............................................................................... 929.2.4 Legal Criteria ............................................................................ 929.2.5 Safety ........................................................................................ 929.2.6 Environmental........................................................................... 92

9.3 Project Schedule ...................................................................................... 929.4 Construction ............................................................................................ 92

9.4.1 Conventional Construction ....................................................... 939.4.2 Specialized Construction .......................................................... 93

9.5 Commissioning and Start-up ................................................................... 93

10.0 Capital Cost Estimate.................................................................................. 10110.1 Introduction ............................................................................................. 101

Table 10.1 - Capital Cost Estimate Summary ......................................... 102Table 10.2 - Sustaining Capital Requirements........................................ 103

10.2 Description of the Estimate ..................................................................... 10310.2.1 Equipment Cost......................................................................... 10310.2.2 Construction Labor Cost ........................................................... 10310.2.3 Site and Earthwork.................................................................... 10410.2.4 Concrete & Foundations ........................................................... 10410.2.5 Structural Support ..................................................................... 104

10.2.6 Mechanical................................................................................ 10410.2.7 Piping ........................................................................................ 10410.2.8 Electrical and Instrumentation.................................................. 10510.2.9 Utilities...................................................................................... 10510.2.10 Contractors Fee........................................................................ 105


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10.2.11 Engineering............................................................................... 10510.2.12 Contingency .............................................................................. 105

10.3 Equipment List ........................................................................................ 10610.4 Pre/owned/Operated Equipment.............................................................. 107

10.4.1 Search and Evaluation .............................................................. 10610.4.2 Cost Savings ............................................................................. 106

10.5 Salvage Value.......................................................................................... 107Salvage Value by Type............................................................................ 108

11.0 Operating Cost.............................................................................................. 111Table 11.0 - Operating Cost Summary.................................................... 112

11.1 Operating Labor ...................................................................................... 11311.2 Maintenance Labor.................................................................................. 11511.3 Administration......................................................................................... 11711.4 Power Cost .............................................................................................. 11811.5 Maintenance Parts & Supplies ................................................................ 111011.6 Operating Supplies .................................................................................. 111111.7 Mining Costs ........................................................................................... 111211.8 Miscellaneous Costs ................................................................................ 111311.9 Operating Costs At Various Sales Prices ................................................ 1115

Table 11.13 - $0.80 Copper..................................................................... 1115Table 11.14 - $1.00 Copper .............................................................................. 1116

Table 11.15 - $1.05 Copper..................................................................... 1117Table 11.16 - $1.20 Copper..................................................................... 1118

12.0 Marketing ................................................................................................... 12112.1 Introduction ............................................................................................. 12112.2 World Copper Production & Consumption............................................. 12112.3 OK Mine Project - General ..................................................................... 12312.4 Cathode Quality....................................................................................... 12312.5 Copper Price ............................................................................................ 12412.6 Distribution Costs.................................................................................... 12612.7 Industry Cost Curves ............................................................................... 126

13.0 Financial Evaluation.................................................................................... 13113.1........................................................................Introduction 131

13.2 Basic Assumptions .................................................................................. 13113.2.1 Project Schedule and Start-up of Production............................ 13113.2.2 Production Forecast .................................................................. 13113.2.3 Metal Price................................................................................ 13113.2.4 Sales Terms............................................................................... 132


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Section 1.0 IntroductionTable of Contents

1.0 Introduction ......................................................... 111.1 General ............................................................... 111.2 Project Location ........................................................... 111.3 Project History .............................................................. 111.4 Land Tenure ............................................................... 11

Figure 1.1 - Map Showing Project Location................. 12Figure 1.2 - OK Mine Project Location........................ 13

1.5 Project Concept............................................................. 141.6 Data Sources ............................................................... 14


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Section 2.0 Geology and Mineral Resources

Table of Contents

2.0 Geology and Mineral Resources........................................ 212.1 Introduction ............................................................... 212.2 Regional Geology ......................................................... 21

Figure 2.1 - Site Map .................................................... 222.3 Mineral Deposit Description......................................... 232.4 Database ............................................................... 23

2.4.1 General .............................................................. 232.4.2 Data Source ....................................................... 242.4.3 Survey, Location and Elevation Control........... 272.4.4 MDA Independent Sampling ............................ 28

2.4.5 Twinned Holes .................................................. 2112.4.6 Specific Gravity ................................................ 2132.4.7 Data Used in Modeling ..................................... 214

2.5 Mineral Resources......................................................... 2162.5.1 Methodology ..................................................... 2162.5.2 Hidden Treasure................................................ 220

Figure 2.2 - HT Collar Map .............................. 221Figure 2.3 - HT Cross Section........................... 222Figure 2.4 - HT Bench Map .............................. 223Figure 2.5 - HT Model Differences................... 225

2.5.3 Maria ............................................................... 226

Figure 2.6 - Maria Drill Hole Map.................... 227Figure 2.7 - Maria Cross Section ...................... 228Figure 2.8 - Maria Level Map........................... 229

2.5.4 Copper Ranch.................................................... 230Figure 2.9 - Copper Ranch Drill Hole Map ...... 231Figure 2.10 - Copper Ranch Section................. 232Figure 2.11 - Copper Ranch Level Map............ 233

2.5.5 OK Mine............................................................ 234Figure 2.12 - OK Mine Drill Hole Collars........ 236Figure 2.13 - OK Section .................................. 237Figure 2.14 - OK Level Map............................. 238

2.5.6 Stockpiles .......................................................... 2412.5.7 Past Production and Previous

Resource Estimates ........................................... 2422.6 Qualifications, Risks and Opportunities ....................... 243


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Section 3.0 Geotechnical and HydrologyTable of Contents

3.0 Geotechnical and Hydrology.............................................. 313.1 General ............................................................... 313.2 Investigation ............................................................... 313.3 Site Conditions.............................................................. 313.4 Analysis and Recommendations ................................... 313.5 Water Resources ........................................................... 31


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Section 4.0 Mineable Reserves and Mine PlanTable of Contents

4.0 Mineable Reserves and Mine Plan.................................... 414.1 Methodology ............................................................... 424.2 Ultimate Pits ............................................................... 42

Figure 4.1 - OK Mine Ultimate Pit GradeTonnage Curve.......................................... 44

Figure 4.2 - Hidden Treasure Ultimate PitGrade Tonnage Curve ............................... 44

Figure 4.3 - Copper Ranch Ultimate PitGrade Tonnage Curve .............................. 45

Figure 4.4 - Maria Ultimate Pit GradeTonnage Curve ......................................... 45

4.3 Pit Designs ............................................................... 46Figure 4.5 - Hidden Treasure and Maria Pit

and Dump Design...................................... 47Figure 4.6 - Copper Ranch Pit and Dump Design ........ 48Figure 4.7 - OK Pit and Dump Design.......................... 49

4.4 Dump Designs............................................................... 4104.5 Production Schedule ..................................................... 4114.6 Mine Equipment and Costs........................................... 414


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Section 5.0 Plant Design CriteriaTable of Contents

5.0 Plant Design Criteria ............................................................ 515.1 Metallurgical Testing ...................................................... 515.2 Design Criteria ............................................................... 53

5.2.1 Site Conditions.................................................. 535.2.2 Ore Characteristics ............................................ 535.2.3 Crushing ............................................................ 535.2.4 Heap Construction............................................. 545.2.5 Solution Handling and Leaching....................... 545.2.6 Solution Pond & Tank Data .............................. 555.2.7 Solvent Extraction............................................. 555.2.8 Piping and Materials - SX Plant........................ 575.2.9 SX Instrumentation and Controls...................... 575.2.10 SX Area Lighting .............................................. 585.2.11 Painting ............................................................. 585.2.12 Organic Removal - Electrolyte Filters .............. 585.2.13 Electrolyte Heat Exchangers............................. 595.2.14 Tank Capacity Data........................................... 595.2.15 Electrowinning .................................................. 59

Operational Aspects .......................................... 59Cell and Electrode Data .................................... 510

` Electrolyte ......................................................... 511Electrical System............................................... 511Building............................................................. 512Piping ............................................................... 512Tank Data.......................................................... 512EW Additives .................................................... 513Miscellaneous Facilities.................................... 513


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Section 6.0 Process PlantTable of Contents

6.0 Process Plant ............................................................... 616.1 Crushing and Agglomeration ........................................ 616.2 Leach Heaps ............................................................... 626.3 Heap Irrigation .............................................................. 626.4 Solvent Extraction......................................................... 636.5 Electrowinning .............................................................. 65


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Section 7.0 Infrastructure and UtilitiesTable of Contents

7.0 Infrastructure and Utilities ................................................ 717.1 Site Development .......................................................... 717.2 Maintenance ............................................................... 717.3 Administration .............................................................. 717.4 Site Access ............................................................... 727.5 Power and Other Utilities/Services............................... 72


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Section 8.0 EnvironmentalTable of Contents

8.0 Environmental ............................................................... 818.1 Required Authorizations ............................................... 81

List of Permits Required for the OK Mine Project ....... 82 8.2 SpecificPermit Requirements 83

8.2.1 Deposits on Private Land .................................. 838.2.2 Deposits on Federal Land.................................. 848.2.3 Processing Facilities.......................................... 858.2.4 Support Facilities .............................................. 87

8.3 Other Environmental Considerations............................ 878.4 Conclusions ............................................................... 88

List of Permits Acquired for the OK Mine Project ....... 89


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Section 9.0 ScheduleTable of Contents

9.0 Schedule ............................................................... 919.1 Introduction ............................................................... 91

9.1.1 Engineering ....................................................... 919.1.2 Pre-Operation Stage .......................................... 919.1.3 Pre-Production Stage......................................... 91

9.2 Basis and Logistics........................................................ 919.2.1 Selection Criteria............................................... 919.2.2 Design Criteria .................................................. 929.2.3 Supervision........................................................ 929.2.4 Legal Criteria .................................................... 929.2.5 Safety ............................................................... 929.2.6 Environmental ................................................... 92

9.3 Project Schedule............................................................ 929.4 Construction ............................................................... 92

9.4.1 Conventional Construction................................ 939.4.2 Specialized Construction................................... 93

9.5 Commissioning and Start-up......................................... 93


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Section 10.0 Capital Cost

Table of Contents

10.0 Capital Cost Estimate .......................................................... 10110.1 Introduction................................................................... 101

Table 10.1 - Capital Cost Estimate Summary............... 102Table 10.2 - Sustaining Capital Requirements.............. 103

10.2 Description of the Estimate........................................... 10310.2.1 Equipment Cost ........................................... 10310.2.2 Construction Labor Cost ............................. 10310.2.3 Site and Earthwork ...................................... 104

10.2.4 Concrete & Foundations.............................. 10410.2.5 Structural Support........................................ 10410.2.6 Mechanical .................................................. 10410.2.7 Piping........................................................... 10410.2.8 Electrical and Instrumentation .................... 10510.2.9 Utilities........................................................ 10510.2.10 Contractors Fee .......................................... 10510.2.11 Engineering ................................................. 10510.2.12 Contingency................................................. 105

10.3 Equipment List .............................................................. 10610.4 Pre/owned/Operated Equipment ................................... 106

10.4.1 Search and Evaluation................................. 10610.4.2 Cost Savings................................................ 106

10.5 Salvage Value ............................................................... 107Salvage Value by Type ................................................. 108


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Section 11.0 Operating Cost

Table of Contents

11.0 Operating Cost ..................................................................... 111

Table 11.0 - Operating Cost Summary ......................... 11211.1 Operating Labor ............................................................ 11311.2 Maintenance Labor ....................................................... 11511.3 Administration .............................................................. 11711.4 Power Cost .................................................................... 11811.5 Maintenance Parts & Supplies ...................................... 111011.6 Operating Supplies........................................................ 111111.7 Mining Costs ................................................................. 111211.8 Miscellaneous Costs...................................................... 111311.9 Operating Costs At Various Sales Prices...................... 1115

Table 11.13 - $0.80 Copper .......................................... 1115 Table

11.14 - $1.00 Copper ........................................................... 1116Table 11.15 - $1.05 Copper .......................................... 1117Table 11.16 - $1.20 Copper .......................................... 1118


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Section 12.0 Marketing

Table of Contents

12.0 Marketing ................................................................... 121

12.1 Introduction................................................................... 12112.2 World Copper Production & Consumption .................. 12112.3 OK Mine Project - General ........................................... 12312.4 Cathode Quality ............................................................ 12312.5 Copper Price.................................................................. 12412.6 Distribution Costs ......................................................... 12612.7 Industry Cost Curves..................................................... 126


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NEVADA STAR OK MINE PROJECT

FEASIBILITY STUDY

Section 13.0 Financial Evaluation

Table of Contents

13.0 Financial Evaluation ............................................................ 13113.1 Introduction................................................................... 13113.2 Basic Assumptions........................................................ 131

13.2.1 Project Schedule andStart-up of Production................................ 131

13.2.2 Production Forecast ................................... 13113.2.3 Metal Price................................................. 13113.2.4 Sales Terms................................................ 13213.2.5 Royalties .................................................... 13213.2.6 Markets ...................................................... 13213.2.7 Distribution Costs...................................... 13213.2.8 Escalation Factors...................................... 13213.2.9 Operating Costs ......................................... 13213.2.10 Taxes.......................................................... 13313.2.11 Depreciation/Amortization ........................ 13313.2.12 Fixed Capital.............................................. 13313.2.13 Additional and Sustaining Capital ............. 13313.2.14 Working Capital......................................... 13313.2.15 Salvage Values........................................... 13313.2.16 Reclamation ............................................... 133

13.3 Project Economics......................................................... 13413.3.1 Cash Flow Summary.................................. 13413.3.2 Return On Investment................................ 13413.3.3 Net Present Value ...................................... 13413.3.4 Pay Back .................................................... 13413.3.5 Cash Cost ................................................... 134

13.4 Sensitivity Analysis....................................................... 134Variation In Cash Flow Due To Sales Price ................. 135Variation In Cash Flow Due To Operating Cost........... 136Variation In Cash Flow Due To Capital Cost ............... 137Cash Flow Analysis Sheets........................................... 138


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Section 14.0 Units of Measure

Table of Contents

14.0 Units of Measure ....................................................... 141


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Appendix - Section 1 Drawings


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Appendix - Section 2 Equipment List


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Appendix - Section 3 Capital Cost Estimate Details


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Appendix - Section 4 Metallurgical Study

Locked Cycle Column LeachBy METCON Research Inc.


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Appendix - Section 5 Due Diligence ReviewBy Brad HaysPruitt, Gushee & Bachtell


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Appendix - Section 6 Letter From Rick Havenstrite

Subject: Water Wells


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Appendix - Section 7 Sections 2 & 4 References

Mine Development Associates


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Appendix - Section 8 Miscellaneous Quotations


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Feasibility Study Appendix I

Nevada Star Resource Corp. Drawing List


Tucson, Arizona 1

OVERALL SITE/GENERAL

DRAWING NO. DESCRIPTION

00-GA-00 COVER SHEET

00-C-O0 OVERALL SITE PLAN

00-GA-0l PROCESS PLANT SITE PLAN

00-GA-02 CRUSHING & SCREENING SITE PLAN

00-GA-03 PROCESS PLANT SITE, SECTIONS

00-GA-04 OVERALL SITE PLAN, UTILITIES

00-GA-05 PROCESS PLANT SITE PLAN, UTILITIES

00-CN-01 CONCRETE, GENERAL CRITERIA NOTES, SYMBOLS

00-CN-02 CONCRETE, STANDARD STEEL SECTIONS, DETAILS

00-S-0l STRUCTURAL, STANDARD STAIR DETAILS

00-S-02 STRUCTURAL, STANDARD HANDRAIL DETAILS

00-S-03 STRUCTURAL STANDARD LADDER DETAILS00-S-04 STRUCTURAL, STANDARD STEEL DETAILS

00-E-0l OVERALL SITE, ONE-LINE DIAGRAM

AREA 10 CRUSHING/SCREENING/AGGLOMERATION

10-FS-01 FLOWSHEET

l0-GA-0l GENERAL ARRANGEMENT, PLAN

10-GA-02 GENERAL ARRANGEMENT, SECTIONS

10-CN-01 CONCRETE, FOUNDATION PLAN

10-E-0l ELECTRICAL, ONE-LINE DIAGRAM

10-PI-0l P & ID

AREA 20 LEACH PAD

20-FS-0l FLOWSHEET

20-GA-01 LEACH, PLAN & SECTIONS, END OF MINING TOPOGRAPHY

20-GA-02 HEAP LEACH PAD, PLAN, SECTIONS AND DETAILS

20-GA-03 SOLUTION PONDS, PLAN, SECTIONS AND DETAILS

20-GA-04 SOLUTION COLLECTION/LEAK DETECTION, PLANS

20-GA-05 MISCELLANEOUS DETAILS

20-GA-06 HW LEACH, IRRIGATION PLAN

20-E-0l ELECTRICAL, ONE-LINE DIAGRAM

20-PI-0l P & ID


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Feasibility Study Appendix I

Nevada Star Resource Corp. Drawing List


Tucson, Arizona 2

AREA 30 SOLVENT EXTRACTION

DRAWING NO. DESCRIPTION

30-FS-0l FLOWSHEET

30-GA-01 GENERAL ARRANGEMENT, PLAN


30-CN-01 CONCRETE, FOUNDATION PLAN

30-S-01 STRUCTURAL, PLAN

30-E-01 ELECTRICAL, ONE-LINE DIAGRAM

30-PI-01 SOLVENT EXTRACTION P & ID

30-PI-02 TANK FARM & ACID STORAGE P & ID

AREA 40 ELECTROWINNING

40-FS-01 FLOWSHEET40-GA-01 GENERAL ARRANGEMENT, PLAN



40-M-01 MECHANICAL, WASH TANK DETAILS

40-M-02 MECHANICAL, CATHODE & ANODE DETAIL

40-CN-01 CONCRETE, PLAN

40-CN-02 CONCRETE, CELL DETAILS

40-S-01 STRUCTURAL, PLAN


40-PI-01 P & ID

AREA 50 TANK FARM

50-GA-01 GENERAL ARRANGEMENT, PLAN


50-GA-03 GA, CRUSHING/ACID UNLOADING, PLAN & SECTIONS

50-GA-04 GA, ACID/KEROSENE UNLOADING, PLAN & SECTIONS


AREA 60 UTILITIES

60-FS-01 FLOWSHEET

60-GA-01 GA, WELL PUMP STATION, PLAN & SECTIONS

60-GA-02 WAREHOUSE/MAINTENANCE PLAN & SECTIONS60-E-01 ELECTRICAL, ONE-LINE DIAGRAM

60-PI-0l P & ID


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Domestic Production and Use: Domestic mine production in 1997 was essentially unchanged at1.9 million metric tons valued at about $4.6 billion. The five principal mining States, indescending order, Arizona, Utah, New Mexico, Nevada, and Montana, accounted for 98% ofdomestic production; copper was also recovered at mines in six other States. While copper wasrecovered at about 35 mines operating in the United States, 15 mines accounted for about 97% of

production. Seven primary and 4 secondary smelters, 7 electrolytic and 6 fire refineries, and 15solvent extraction-electrowinning facilities were operating at yearend. Refined copper and directmelt scrap were consumed at about 35 brass mills; 15 rod mills; and 600 foundries, chemicalplants, and miscellaneous consumers. Copper and copper alloy products were consumed ' inbuilding construction, 43%; electric and electronic products, 24%; industrial machinery andequipment, 12%; transportation equipment,12%; and consurner and general products, 9%

Recycling: Old scrap, converted to refined metal and alloys, provided 420,000 tons of copper,equivalent to 15% of apparent consumption. Purchased new scrap, derived from copperfabricating operations, yielded 930,000 tons of contained copper; 80% of the copper contained in

new scrap was consumed at brass mills. Of the total copper recovered from scrap, coppersmelters and refiners recovered 28%; ingot makers, 9%; brass mills, 58%; and miscellaneousmanufacturers, foundries, and chemical plants, 5%. Copper in all old and new, refined orremelted scrap comprised 36% of U.S. copper supply.

COPPER

Events, Trends. and Issues: World mine production of copper rose significantly for the thirdconsecutive year, increasing by about 3% in 1997. Most of the increase in production came fromChile, where an estimated 300,000 tons of new capacity came on-stream. In the United States, mine

production and capacity were essentially unchanged.Increased production from a major new mine in Nevada, which began production in 1996, and a newsolvent-extractio electrowinning (SX-EV\~ operation in Arizona, was offset by closure of twosmaller mines in Arizona during 1996, anddepletion of ore at a third mine in Wisconsin in 1997. Production also declined at severalSX-EWoperations where mining of leach ore was curtailed and production limited to existing heaps.Though domestic production of refined copper was projected to rise about 3% for the year, itremained well below capacity owing to a shortage of anode copper during the first half of the year.The smelter in Utah, which had been plagued by problems since commissioning in 1995, was closedfor 6 weeks for replacement of anode casting equipment.

Copper supply remained tight for the first 6 months of 1997 and prices trended upward, the U.S.producer price averaging almost $1.16 per pound. However, in July, commodity exchangeinventories began to rise and prices declined. By the end of September, exchange inventories hadmore than doubled from year end 1996 levels and the U.S. producer price had fallen to below $1.00per pound. In response to the rising copper price, recovery of copper from both old and new scrapincreased during the first half of the year, but then fell in the second half as the price fell and asecondary smelter in Pennsylvania closed.


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Consumption of refined copper in the United States was projected to rise about 4% in 1997owing to strong demand for wire mill products. At least one major wire rod producer reportedoperating above design capacity during 1997, despite having expanded capacity during 1996.Worldwide, the current surplus of refined copper is projected to increase in 1998, as world minecapacity is expected to increase about 900,000 tons in that year.

World Resources: Land-based resources are estimated at 1.6 billion tons of copper, and resources deep-sea nodules are estimated at 0.7 billion tons.

LONDON - Further indications of the pressure on copper producers have emerged with the publication of thlatest figures from the International Copper Study Group.

These show total global refined production grew 7,1% last year, creating a refined metal surplus of 364 000tons compared with 9 000 tons in 1996.

The price for three-month copper on the London Metal Exchange (LME) hit a high the week before last of $

816 a ton - the average cash price on the London Metal Exchange in January was $1 688 a ton - but thmasks an otherwise steady decline in prices since August. At the same time, stocks on the world's two leadinbase metal exchanges, Comex in New York and the LME, have risen steadily to more than 477 000 tons at thend of February, almost three times their level last year.

Most analysts are abiding by their long-held view that cash copper prices need to retreat to about $1 540 a toand hold that level for a year or so. This would induce the scale of capacity closure needed to bring aboutreversal of the market's bearish fimdamentals.

Analysts estimate that new projects and expansions mean world copper production capacity is set to grow b3,1-million tons a year over the next three years, while planned closures will reduce output hy 800 000 tons

year.

Broken Hill Proprietary's decision to cut 70 000 tons a year at its Pinto Valley mine in Arizona is the monotable recent example of mothballing, but some analysts argue that at least another 500 000 tons need to bcut to see sustainable price recovery

SOURCE: Some of the world's largest copper producers include Chile, Peru and the United States. About 8percent of all copper mined today is derived from low-grade ores containing 2 percent or less of the elemenHalf of the world's copper deposits are in the form of chalcopyrite ore. All important copper-bearing ores fainto two main classes: oxidized ores and sulfide ores. Sulfide ores are more important commercially. Ores aremoved either by open-pit or by underground mining. Ores containing as little as 0.4-percent copper can b

mined profitably in open-pit mining, but underground mining is profitable only if an ore contains at lea0.7-percent copperO

REVIEW: Recoverable copper mine production m the United States rose more than 3 percent to 1,910,00metric tons in 1996. Refined production rose by about 60,000 tons, or 3 percent to 2,340,000 tons, despitedecline in secondary refined production, according to the Office of Minerals Information of the U.Geological Survey. Primary refined production rose about 5 percent to 2,010,000 tons due to increases electrowon production and a near doubling in production from imported material, the USGS sai


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Consumption of refined copper rose about 4 percent to 2,630,000 tons, according to the USGS. With suppliof copper scrap tight throughout the year, consumption of refined copper as a percentage of total feed materiat brass mills rose by about 10 percent to 586,000 tons while consumption at wire rod mills roapproximately 2 percent to 1,980,000 tons, according to the USGS. At the beginning of 1996, analysts antraders pointed to rising London Metal Exchange copper inventories as a harbinger of fundamental mark

weakness. A long-predicted surplus would swamp the market and cause prices to fall sharply, they said. Bfew could have predicted the havoc that would erupt in the red metal's market, the result of a single coppetrader's alleged activities. 1996 was a topsy-turvy year for copper, in which the one thing market players coube assured of was the red metal's volatility. The market was stunned when prices plummeted on the back the $2.6-billion Sumitomo Corp. trading debacle, but then rebounded, albeit not to levels before thSumitomo tsunami. A 10-day strike at state-owned Codelco-Chile's Chuquicamata facility--the world's largeopen-pit coppermine--a one-day walkout at Salt Lake City-based Kennecott Corp.'s Bingham Canyon coppoperation and continued uncertainty at Phoenix-based Phelps Dodge Corp.'s Chino copper mine in SilvCity, N.M., were among the events that kept the market on its toes. About 7,000 miners at Codelco Chuquicamata mine went on strike in April, eventually pushing the Comex July copper contract to $ 1.25pound May 3--a seven-month high. But the 10-day strike turned out to be too short-lived to affect supply.

would not take long for the market's attention to refocus on the activities of Japan's most active copper tradeYasuo Hamanaka of Sumitomo. Reports surfaced around May 22 that Hamanaka had given up day-to-datrading and would focus on large-scale projects. A copper windstorm, whipped up by rumors surroundinHamanaka's transfer, crushed prices and caused massive market hemorrhaging June 6, known as "ReThursday." Panic selling began in earnest in early to mid-June, triggered by news that Hamanaka wadismissed for allegedly losing $1.8 billion in unauthorized trading over 10 years, later revised to $2.6 billioin losses. The Hamanaka affair prompted regulatory investigations by Britain's Securities and InvestmenBoard, the U.S. Commodity Futures Trading Commission, the LME and the U.K. Securities and FuturAuthority. The Japanese Prosecutors Office formally indicted Hamanaka in November on four counts oforgery allegedly committed in 1993 and 1994. 1996 also was marked by the announcements of numerounew copper mine projects, expansions of existing mines, smelter upgrades an

solvent-extraction/electrowinning plants. MIM Holdings Ltd., Brisbane, Australia, said it would build a necopper mine at Mount Isa and expand the copper smelter there over three years in an Australian $500-millio($400-million) program. Southern Peru Copper Corp., New York, gave the green light to a $245-millioexpansion for its Cuajone copper mine and to modernize and increase capacity of the Ilo smelter in PerToronto-based Rio Algom Ltd.'s two new mining proJects, the Bajo de la Alumbrera Mine in Argentina anthe Autamina Mine in Peru, are expected to be significant contributors to the company's anticipated increain copper production. Rio Algom said it also would expand its Cerro Colorado copper mine in northern Chiby 65 percent. The $ 198-million expansion, expected to be completed by mid-1998, will increase the mineannual production to 220 million pounds from 130 million pounds. On Dec. 11, Westmin Resources Ltd. anGibraltar Mines Ltd. approved the construction start on the $249-million Lomas Bayas oxide copper projein northern Chile.

PRICES: The average U.S. producer price for the year declined by about 29 cents a pound from threcord-high levels of 1995, according to the USGS. The London Metal Exchange cash copper price fell around 82 cents a pound in June on the back of the Sumitomo debacle but by late November had climbeback to hit $ 1.16 a pound. Despite industry expectations of a supply surplus, the long-anticipated tidal wavof red metal did not materialize in 1996. Still, the market remained wary of rumors ahout unreported stocks well as the uncertainty of Sumitomo's market position. --AARON WARD AMMReporter


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COPPER IN JUNE 1998

Average daily mine production in June was essentially unchanged from that of May. Smelter productioplummeted to the lowest level in more than a year, as maintenance shutdowns at three primary smelters led lower primary production. Primary refined production also declined sharply owing to the shortfall in prima

anode production. Consumption of refined copper in June continued to decline from the record-high level March, yet remained 10 % above the June 1997 level. At the end of June, Encore Wire Corporation begaproduction at its new wire-rod mill in McKinney, TX. The mill had a design capacity of about 60,000 tons pyear of wire-rod. Encore Wire produces commercial, coaxial, thermostat and telecom- munication cable at iwire mill at the same location. As a result of lower refined production in June, inventories of refined coppheld at producers and wire-rod mills declined. Inventories of refined copper rose slightly at brass mills owinto a drop-off in consumption and an increased reliance on refined copper as a feed material. The shift domestic and global inventories into London Metals Exchange Ltd. (LME) warehouses in the Unite d Statcontinued, and by the end of June LME inventories had risen to 202,000 tons (by the end of July they harisen further to 223,000 tons and accounted for 86% of global LME stocks). Mine production for the first haof 1998 was down by more than 4%,42,000 metric tons, from that of the first half of 1997 as a result o

production cutbacks at several mines. At the current rate of production, full year production for 1998 projected to be down by more than 100,000 tons compared with that of 1997. Note that the preliminarproduction number for full-year 1997 was revisedupward to reflect new annual data. Total smelter productiofor the first half of 1998 was 3% higher than the equivalent period in 1997 as increased production from thGarfield, UT, smelter overshadowed lower secondary smelter production and maintenance shutdowns durinthe second quarter of the year at other primary smelters. Total refined production during the first 6 months

the year was up by about 4% compared with the first 6 months of1997 Consumption for the first 6 months 1998 was up by more than 9% compared with the first 6 months of 1997.


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2.2 Design Criteria

2.2.1 Ore Characteristics

Dry ore bulk density, lbs/ft3 95

Average ore grade, % Cu 0.54Ore Type

Tons ore per day (dry), nominal 4000

Moisture Content 4%

Particle Size

Inch % passing

16 100

12 95

6 50

4 35

2 21

1 15

2.2.2 Crushing

Product Particle Size

Inch % passing

3/4 98

Two stage crushing

Primary Jaw crusher

Secondary Stedman Impactorl

Operating Schedule 2 Shifts/Day 5 Days/Week

On-Steam Factor 90%

Feed Rate 370 TPH

2.2.3 Heap Construction

Leach pad stacking method 992 Bucket Loader

Haulage truck capacity - tons 50

Heap building days per week 5

Heap building shifts per day 2

Heap building schedule days per year 260

Heap placement, tons per week, nominal 28,000

Ore leached, tons per year 1.45 million

Head grade to leach pad, % Cu 0.54

Soluble Copper, % Cu 89

Heap material, bulk density, lbs/ft3 95

Copper recovery, % 70


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Lift height, ft 10

Ultimate heap leach pad area, ft Pad liner material 60 mil HDPE

on clay base

2.2.4 Solution Handling and Leaching

Evaporation, % of solution sprayed 8

Flow to heaps, gpm 2000

PLS flow, gpm 1770

Heap moisture at zero drainage, % 5


On-Steam Factor 97%

Raffinate irrigated area, ft2

500,000

Irrigation rate, gpm/ft2

0.004

Irrigation type Senninger wobblers @ 40'

Acid consumption, lbs per ton of ore 50

Acid consumption, lbs per lb Cu 7

Acid supply concentration, % 93

Acid specific gravity 1.8

Primary leach cycle, days 90

Ditch liner material 60 mil HDPE

Raffinate return and PLS piping HDPE

Pump manifolds Stainless steel

Piping joints HDPE - butt fused, stainless steel -

welded and flanged.

Pumps End suction centrifugal

1 operating, 1 installed standby for

PLS and raffinate, stainless steel

Typical PLS analysis, g/L

Cu 1.5

H2S04 2.0

Total Fe 3-5

Fe+3 0.5

Si (as Si02) 1.0

Al 4.0

Mg 4.0

Max solids, ppm 20

pH 1.5Typical raffinate analysis, g/L

Cu 0.09

H2SO4 3-7

Total Fe 3-5

Fe+3

0.5

Si (as Si02) 1.0

Solids, ppm 10 ppm


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pH 1.7-1.9

Raffinate temperature, F 70

2.2.5 Solution Pond & Tank Data

Ponds are earth reservoirs with primary HDPE liner (60 mil thickness) and secondary

HDPE liner (60 mil) with geonet layer sandwiched between. Leak detection monitoring

provided by a collection sump.

Pond Capacities

PLS Pond 7,400,000 gal.

Raffinate Pond 1,000,000 gal.

Electrolyte solution tankage located at the solvent extraction plant is situated to allow

flow by gravity to the appropriate vessel. The electrolyte and organic holding tanks to be

316 S.S. lined. The tankage area is curbed. Major spills report to the raffinate pond.

2.2.6 Solvent Extraction

Operational Data

Feed rate, gpm 1785

Annual overall plant availability, % 97

Plant operating schedule, overall 24 hrs/day, 7 days/week

Personnel operating schedule 3 x 8 hr shift/day

Organic Phase

Extractant Characteristics:

Name Acorga M5640 or Henkel LIX 984

Generic type Salicylaldoxime

Specific gravity 0.91 - 0.97

Viscosity at 15C, cP 200

Volume % 7.0

Copper/iron transfer ratio 500:1

Diluent characteristics:

Type Kerosene - 170 ES

Specific gravity 0.8

Viscosity at 15C, cP 1.5

Aromatics, Maximum % 8

Volume Percent 92.2%


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Organic entrainment in raffinate, ppm 100

Organic entrainment in strong electrolyte, ppm 50

Aqueous entrainment, ppm 300

Organic entrainment recovery 50% from raffinate pond, 90% from

media filter

Allowance for diluent evaporation 10 % of entrainment lossesCrud removal system Portable crud pump

Plant Configuration

O/A Mix ratio

Extraction 1:1

Strip 1:1

Overall recovery, % 97

Number of stages

Extraction 2

Strip 1

Organic surge system Loaded organic tank

Addition point of spent electrolyte Mixer box

Number of mixer boxes per

Extraction 2

Strip 2

Impellers

Primary Radial blade pump mix type

Secondary Radial blade axial flow turbine

Mixer retention times

Extraction 45 sec pump, 90 sec aux.

Strip 45 sec pump, 90 sec aux.

Settler rating, gpm/ft2 total flow

Extraction 1.6

Stripping 1.2

Organic depth, in 10

Aqueous depth, in 18

2.2.8 Piping and Materials - SX Plant

In plant process piping: Main process lines to be HDPE.

Pump manifolds to be stainless steel.

Piping joints: HDPE-butt-fused. Stainless steel-

flanged. Gaskets nitrile (Buna N)

rubber.

Pumps: Stainless steel wetted parts.

Mixer Settlers:

Settler FRP or 316 S.S. lined concrete/steel

structure, weir boxes - stainless steel.


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Picket fences Stainless steel or FRP.

Mixers FRP or Stainless steel lined concrete.

Impellers Stainless steel

Settler Roofs FRP sheeting.

2.2.9 SX Instrumentation and Controls

Instrumentation is selected for safe reliable plant operation in accordance with national and

international standards and codes of practice. Materials of construction of in-line process

instruments are, as a minimum, in accordance with the piping material specification.

Pressure is indicated locally by gauges and remotely by transmitters. Flow is measured by

orifice plate, magnetic flow meters, and differential pressure transmitter. Level is monitored by

ultrasonic/transmitters for alarm and indication. Electronic signals to transducer/pneumatic

actuators are used for all remote instrumentation and controls.

Remote instrumentation will be located in a free standing control console which will house

controllers, motor start/stop and status, remote instrumentation and annunciation.

A PLC based system could be designed to include data collection for trending and report

generation and a screen for graphic flow sheet and motor status representation. This panel would

be located in a central control room with viewing of both SX and EW operations. This control

station will combine solvent extraction, electrowinning, leaching, and solution handling. A

single audible alarm together with indicating lamps warns of liquid level excursions beyond

preset limits and of packaged equipment malfunction. The PLC based system will be considered

only if requested by NSRC.

Motor control will be by push button. These will indicate motor status as isolated, "stopped" or

"running". All drives will have local stop/start stations and safety disconnect switches.

2.2.10 SX Area Lighting

Levels recommended by WSE are:

Pump/tank areas 20 ft candles

Impeller drive areas 20 ft candles

Weir box areas 20 ft candles

Passageways & ladders 15 ft candles

General area 2 ft candles

2.2.11 Painting

All carbon steel surfaces which can be wetted by organic or electrolyte solutions are to use an

SP-10 blast and a polyamide epoxy paint system.


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2.2.12 Organic Removal - Electrolyte Filters

Type: Dual media garnet/anthracite

pressure sand filters

Duty: Removal of 85% of suspended solids

larger than 10 microns and up to 90ppm of organic entrainment.

No. of Units: 2

Backwash medium: Plant water

Backwash initiation Operator initiated

Materials:

Shell Stainless steel

Internals Stainless steel

Blowers Stainless steel

Backwash pump Stainless steel

External piping HDPE/stainless steel

Valves Stainless steel body with Buna N or

PTFE seats

2.2.13 Electrolyte Interchangers

Heat exchanger type Plate, frame and immersion heater

Materials:

Plates and bolts Stainless steel

Gaskets Viton or Buna N

Frame Carbon steel

2.2.14 Tank Capacity Data

Loaded Organic Tank, min 20

Filter Feed Tank, min 230

Holding tank philosophy Contents of one settler to be

accommodated in low cost tank.

Materials:

Loaded organic 316 S.S. lined steel

Electrolyte tanks 316 S.S. lined steel

SX Sump/Holding Tank 316 S.S. lined steel

2.2.15 Electrowinning

Operational Aspects

Plant deposition tons per day 15

Annual overall plant availability, % 97



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Cell and Electrode Data

Electrolytic process Electrowinning deposition onto

stainless steel permanent blanks

using insoluble lead anodes.

Current density at cell, A/ft2 22Current efficiency, percent design: 90

Cathode spacing, in: 4.0

Final cathode weight, lbs: 97 (per side)

Cell orientation: Longitudinal axis Perpendicular to

crane bridge girders.

Cell construction Pre-cast monolithic box in FRP

reinforced polymer concrete

Cell size (inside) 50 inches wide, 56 inches deep, 156

inches long

Cathode size: Nominally 39.3 inches (1 meter) by

39.3 inches wetted area with 1 inch

overlap on anode, on all edges.

Cathode cycle, days: 7 depending on current density,

cathode weight.

No of cells: 34

Cathodes per cell: 36

Anode type: Solid blade flat surface. Hot cross

rolled manufacture.

Anode thickness, in.: 0.25

Anode suspension bar: Steerhorn, solid copper bar.

Anode insulators: Polypropylene

Anodes per cell: 37

Mist suppression method: Two layers of polyethylene beads

Crane type: Overhead Crane with bridge on

overhead rail.

Crane capacity, ton: 5

Cathode washing and stripping: Cathode washing tank and manual

stripping

Shipping and metallurgical: Platform scale with accuracy 2 lb in

2.5 ton load

Shipping method: Tractor trailer units

Cathode sampling: Hand held electric drill

Electrolyte

H2SO4 range, g/L: Up to 190

Minimum copper in electrolyte, g/L: 32

Maximum total iron, g/L: 1.5 (assume all ferric)

Cobalt dosing level, ppm: 100

Tankhouse electrolyte piping material: CPVC, HDPE


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Tankhouse piping valves: Coated butterfly or diaphragm (cell

feed-CPVC ball valves).

Tankhouse piping location: Principally beneath operating floor

No. of cell circulation systems: 1

Circulation system: Direct to cells from fresh electrolyte

sump.Cell flow control: Equalized header pressure with

individual cell valves for isolation.

Pump type: Horizontal centrifugal

Pump spares: All circuits to have online backup.

Maximum cell temperature, F: 125

Operating cell temperature, F: 113

Electrical System

Rectifier type: Thyristor or silicon diode in N-1

operating arrangement.

Rectifier Size 1900 KW

Rectifier Output Voltage 82 VDC (2.4 VDC per cell)

Rectifier pulsing: 12 pulse with phase rotation to

reduce harmonics.

Device cooling: Air cooled with evaporative room

cooler.

Rectifier control: Current and voltage to be controlled

within 1%.

Bus circuit configuration: Floating null point, non grounded

system.

Bus bar current rating, amps/in2: 800

Maximum bus bar operating temperature, F 190

Bus bar material: Copper (100% IACS minimum)

Bus bar protection: Expanded plastic mesh guards

Bus bar type: Multi-leafed (trunk bus). Single

dogbone bar (intercell)

Bus bar location: Trunk and back bus beneath

operating floor and above piping.

Cell electrical bypassing: Jumper frame for 1 or 3 cell

spanning

Intercell connection: Walker multiple with offset singledogbone bar.

Material of insulator spacers: Injection molded fiber filled

polycarbonate "Lexan".

Short detection method: IR thermometers

Building


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Elevation of operating floor: At cell top

Operating floor material: FRP

Cathode discharge location: From stripping point to gravity roller

conveyor.

Location of cell floor: At or near "basement" floor level.

Cell support protection: Reinforced PVC drip sheets.Cell shimming/stray current isolation: PVC plates

Floor protection system: Slope floor to drain and sump with

protective coating.

Building roofing and siding: Vinyl coated steel (Steelite or

equivalent), Corrugated glass fibre

reinforced vinyl ester sheets, & Glass

fiber reinforced concrete

Building girts and purlins: Siding supports of protective coated

steel

Building ventilation: Exhausted by open sidewalls, 1.5 ft

above cell tops, roof ridge vent.

Building lighting levels, ft candles 50 at machine areas.

30 over cell areas.

Piping

All piping with process fluids in tankhouse to be CPVC. Flow control to be by all plastic

ball valves to individual cells and plastic coated butterfly or diaphragm valves on cell

feed headers.

Tank Data

Loaded organic tank, min 20

Lean electrolyte tank, min 60

Electrolyte recirculation tank, min 30

Sulfuric acid off loading tank, days 2-3

EW Additives

Anode protection additive (cobalt sulfate) will be supplied in bags and kept in storage

area suitable for one month storage, if required.

Miscellaneous Facilities

Shift laboratory with basic wet analysis glassware and chemicals for shift analysis of

copper and acid in existing space.


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Feasibility Study Section 1.0

Nevada Star Resource Corp. Introduction


Tucson, Arizona1 1

1.0 Introduction

1.1 General

Western States Engineering (WSE) provides herein a Feasibility Study of a fifteen standard ton per

day heap leach/solvent extraction/electrowinning operation to exploit existing oxide copper reserves

at OK Mine, Milford District, Utah. The Feasibility Study is based upon WSE Proposal Number

89004, dated January 22, 1998.

1.2 Project Location

The OK Mine property is located in Beaver County in the Milford Mining District in central Utah,

approximately halfway between Las Vegas, Nevada and Salt Lake City, Utah. The mine is accessed

by 4 miles of paved road west from Milford, Utah and 4 miles of Beaver County maintained gradedroad to the northwest. Precisely, the mine is located in Sections 5,6, and 7, T27S, R11W of the Salt

Lake Baseline and Meridian. In State Plane Coordinates, the center of the project is approximately

666,900 N and 1,533,400 E.

Location maps showing the general position in the State and detailed ingress and egress routes are

shown in Figures 1.1 and 1.2.

1.3 Project History

The OK mining district was discovered in about 1900. Sporadic underground mining occurred from

1902 until the mid 1950's. In the 1950's and 1960's, several copper companies including Kennecott,explored for a sulfide porphyry copper deposit without success.

From 1968 through 1973, several companies mined oxide ore from the OK pit and processed the ore

using cementation.

1.4 Land Tenure

Nevada Star Resources Corporation has 714 acres of patented mining claims, 93.5 acres of fee

properties, 404 acres of fee leases, 196 unpatented lode mining claims and 5 State of Utah

Metalliferous Mineral Leases. For details see the Due Diligence Review prepared by Brad J. Hays

which is certified to 8:00 AM, December 12, 1997. A copy of the review is included in theAppendix. Nevada Star has indicated that all properties covered by the due diligence review were

transferred to Nevada Star. The transfer of OK Mine and Essex properties took place on June 18,

1998 while the transfer of Hidden Treasure, Maria and Copper Ranch took place on June 21, 1998.


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Tucson, Arizona1 2

Figure 1.1

Map Showing Project Location


48/196




Tucson, Arizona1 3

Insert Figure 1.2


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Tucson, Arizona1 4

1.5 Project Concept

Nevada Star's proposed project is to reopen abandoned mines and build a new 30,000 lb/day solvent

extraction/electrowinning copper production facility. Concurrent with the design and construction of

the new facility, a remediation program will be conducted to assure that a zero discharge operation

can be maintained both during and after mining operations have ceased.

Open pit mining will be conducted to produce x.x million tons per year of ore and approximately y.y

million tons per year of waste rock material; waste to ore ratio .zz:1. The ore containing an average

of 0.bb% Cu will be crushed to a size of -3/4" (inches) and placed on a HDPE lined leach heap.

The copper bearing ore will be leached with a sulfuric acid solution which extracts the copper and

removes it in the liquid aqueous phase (pregnant leach solution, PLS). Through solvent extraction

technology the PLS copper concentrate is upgraded to a level required for commercial

electrowinning processing. The copper is electrically plated into large sheets (cathodes) of high

purity copper ready for shipment direct to market.

Estimates of ore reserves allow for a mine life of approximately c.c years in which d.d million

pounds of copper metal will be produced. The time required for engineering/construction of the

facility from a "Go" decision is approximately 14 months.

1.6 Data Sources

As a basis for their study Western States Engineering (WSE) has utilized the following:

- Mine Development Associates: Ore Reserve Estimate for the OK Mine Project

- Metcon Research Inc.: OK Mine Project Column Leach Tests

- Brad J. Hays: Due Diligence Review - OK Mine Property, etc

- Rick Havenstrite: Letter, Subject - Water Wells

- Emmons and Associates, Environmental Report


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Nevada Star Resource Corp. Geology and Mineral Resources


Reno, Nevada2 1

2.0 Geology and Mineral Resources

2.1 Introduction

Four separate mineral deposits, Hidden Treasure, Maria, Copper Ranch, and OK Mine, were

modeled for this project by Mine Development Associates (MDA). The Hidden Treasure deposit

contains about half the recovered copper pounds in this project with another quarter of the total

pounds found at the OK Mine deposit. Three existing stockpiles located near the deposits were

included in the copper resource. The locations of the deposits and stockpiles are shown in Figure

2.1.

2.2 Regional Geology

Peter Joralemon conducted much of the geologic work and geologic interpretation done in the

district in the 1970s. His work culminated in the report Copper Resources of the Rocky District,

Beaver County, Utah prepared for the Toledo Mining Company in September 1980. Much of the

discussion given below is from this report and is augmented by more recent data compiled by

Nevada Star Resources and MDA.

The Milford district lies within an east-trending belt of altered granite to diorite intrusive rocks.

Mineralization is dated at Cretaceous through late Tertiary and regional controls on mineralization

are thought to be deep-seated crustal structures. The area is on the eastern leading edge of the Late

Mesozoic to Early Tertiary Sevier thrust system with the mountains comprising the hanging wall of

the eastern Mineral Mountains complex. The Mineral Mountains complex consists of thick

Paleozoic through mid-Mesozoic carbonate and clastic rocks. Geology of the Milford district is

structurally complex, as it has been subjected to compression and later extension from the Mesozoic

Period through the Tertiary Period.

Oligocene volcanic rocks consisting of andesite flows and pyroclastic rocks were extruded over

much of the area, and these rocks were then intruded by a series of Oligocene rocks related to the

Mineral Mountain batholith.

The southern corner of the project is underlain by a fine- to medium-grained granodiorite stock

composed of plagioclase, quartz, and biotite with minor orthoclase, hornblende, and magnetite.

There are also small outcrops of quartz monzonite of the Rocky Mountain stock.

To the north and northeast of the OK Mine, there are several altered porphyritic dikes which contain

abundant magnetite and chalcopyrite within a zone of disseminated and vein-controlled

mineralization. Two small outcrops of quartz monzonite occur west of the OK deposit within the

volcanic rocks.


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Reno, Nevada2 2

FIGURE 2.1 Site Map


52/196




Reno, Nevada2 3

2.3 Mineral Deposit Descriptions

Copper deposits in the Milford district occur as four distinct types:

Type 1 copper deposits occur as pipe-shaped deposits entirely contained in silicified quartz

monzonite or granodiorite; the best example of this type is the OK deposit. Nearby on trend is the

Mary I deposit which is similar though less silicified. Chalcopyrite and bornite occur with minor

molybdenite. About 75% of the sulfide minerals have been oxidized to tenorite, chrysocolla,

malachite and azurite. Gold and silver are present, but are not economically significant when acid

leaching is used to recover the copper. This type 1 deposit is known to occur in the district only at

the OK Mine and Mary I deposits. Of the two, only the OK Mine deposit is covered in this report.

Type 2 copper deposits occur in bodies of garnet-magnetite skarn adjacent to quartz monzonite.

These deposits form tabular zones of different orientations. Deposits of this type include the Hidden

Treasure, Maria, and Copper Ranch deposits and are subjects of this report. These deposits are notas large or disseminated as the Type I deposits.

Type 3 deposits consist of remobilized copper occurring in sediments, and associated with calcite.

Currently the Sunrise deposit is the only known example of this type. The Sunrise deposit is not

related to skarn mineralization and is low in magnetite. The Sunrise deposit occurs partly on

property controlled by Nevada Star and partly on claims controlled by others, and is not covered in

this report.

Type 4 deposits, which are currently of no apparent economic importance, are iron deposits

consisting of magnetite skarn with minor associated copper.

2.4 Database

2.4.1 General

Several mining companies including U.S. Steel, Shasta Coal, Anaconda, Toledo Mining,

American Mining, Centurion Mines (now Grand Central Silver Mines), Cortex Mining and

Exploration, and Nevada Star Resources have conducted exploration work on the Hidden

Treasure, Maria, Copper Ranch, and OK deposits since the 1950s. Other than the Nevada

Star data, MDA has no first-hand knowledge of the quality of the exploration data produced

by the above-mentioned companies.

Most of the drilling data used for the Hidden Treasure, Maria, and Copper Ranch deposits

was derived from the previously mentioned Joralemon report of 1980. Drill logs were not

available for the majority of the holes in this report and most of the grade intervals in the

report were composited from individual sample assays, which are no longer available.


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Reno, Nevada2 4

An extensive digital database exists for the OK Mine deposit, and surrounding area, which

was provided to MDA by Centurion Mines.

MDA reviewed the existing data and recommended that Nevada Star initiate a drilling

program to verify previous drill data and fill in gaps where necessary. The drilling,

conducted during 1998, substantiated much of the pre-existing data and provided a higher

level of confidence in the database.

MDAs willingness to rely on the project database is supported by both the 1998 drilling

results and the fact that portions of the OK Mine, Hidden Treasure, and Maria deposits were

mined in the past and reported production from the properties matches the resources

predicted using the database reasonably well. This subject is covered in more detail in the

specific deposit modeling sections of this report.

2.4.2 Data Sources

Data used in grade estimation came from four sources; Nevada Stars drilling program

conducted in 1998, Centurion Mines (now Grand Central Silver Mines) historic database for

the OK Mine, Cortex Mining and Explorations drilling from 1995 and 1996, and the 1980

Joralemon report.

Nevada Star Drilling

The 1998 Nevada Star drilling program consisted of five core holes and 39 reverse

circulation (RC) holes divided among the deposits as shown in Table 2.1.

Table 2.1 Nevada Star Drilling

Deposit Core HolesRC Holes Footage

Hidden Treasure 2 12 2,770

Maria 1 8 1,567

Copper Ranch 2 18 3,476

OK Mine 0 1 275

Total 5 39 8,088

Holes were designed to check earlier drilling or to fill in gaps in earlier drilling programs.

None of the holes had down-hole surveys, but MDA does not believe there is significant

deviation in the majority of holes, since they are generally less than 200 ft deep. Only one


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hole was drilled at the OK Mine because the existing data was deemed to be adequate for

modeling. Unfortunately, due to drilling conditions, it was impossible to complete this hole

to its original proposed depth.

Stuart Havenstrite, consultant for Nevada Star, logged all of the 1998 drill holes. Core was

split at the Nevada Star office in Milford, and Chemex Labs, through their Elko, Nevada and

Vancouver, B.C. offices performed the assaying. Assay results were provided electronically

directly to MDA. Drill logs for each of the holes were provided to MDA by Nevada Star.

The core holes were assayed for total copper, acid-soluble copper, and cyanide-soluble

copper on the acid soluble residue. This assay method was recommended by KD

Engineering and is referred to as sequential copper assaying. This method has the

advantage of identifying copper minerals that are leachable that do not show up in the oxide

copper analysis. RC holes were assayed for total copper only, as a cost savings measure,

except for the single hole drilled at the OK Mine, which was assayed for acid-soluble andcyanide-soluble as well as total copper.

Centurion Mines Data

The Centurion database contains data from several drilling campaigns covering the OK

Mine, the Mary I deposit (the Mary I is not considered in this report), and the surrounding

area. MDA used holes only in the OK Mine area since only that area was to be modeled.

The data was furnished directly from Centurion to MDA in digital format. The data used in

modeling is summarized in Table 2.2.

Table 2.2 Centurion Mines Corporation Database

Company Year DrilledFootage Notes

Shasta Coal Co 1959-1960 9,546 Unknown type, assumed core

Shasta Coal Co 1960 2,200 Drilled from Underground Workings

Centurion Mines 1994-1996

15,812 Reverse circulation holes

Essex Mining 1971 5,232 Unknown type, assumed core

Bear Creek Mining 1960 331 Single Core Hole

Total 33,121

Within this database, drill logs and original assay information are available only for the

Centurion holes. Logs were not available for the other drilling campaigns. Only total copper


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data was provided for the majority of these other drill campaigns with the exception of some

Shasta Coal data that had long intervals of single oxide copper composites. It is not known

which of the earlier holes were core and which were drilled using other methods.

There were several minor problems in the data received from Centurion. Two holes drilled

near the edge of the deposit were listed as being vertical in the database whereas printed

sections from Centurion showed them to be angled. A check with printed data confirmed

that the holes were angled and the database was corrected. One other hole was either

mislabeled or incorrectly located and was not used in modeling.

Centurion surveyed the collar locations of their holes and consolidated the older holes into a

single coordinate system (state plane). It is not known if or how the earlier holes were

surveyed. No down-hole surveys were available but MDA does not believe that down-hole

deviations are significant in the majority of holes.

Cortex Data

Cortex Mining and Exploration drilled a series of holes in the district during 1995 and 1996.

These were reportedly reverse circulation holes. Logs were provided by Nevada Star for

eight of the holes, of which four were located in the Copper Ranch area and used in

modeling that deposit. The

western copper feasibility study

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