Gold

Yellowhead Mining Inc. – Focused on Harper Creek Copper-Gold-Silver Advanced Exploration Project

Overview

Yellowhead Mining Inc. (TSX:YMI) was formed in 2005 as a private British Columbian company specifically to acquire, explore and, if feasible, develop the Harper Creek deposit. The Company’s development strategy post-feasibility completion is to engineer, permit, finance, construct and operate the project.

Between its formation and its listing as a public company on the TSX Venture Exchange in November 2010, Yellowhead Mining Inc. raised $23 million. In April 2011, the Company raised $25 million in a bought deal financing. The company achieved graduation to the Toronto Stock Exchange (TSX) June 11, 2012.  In December 2012 the Company raised $6.72 million through a private placement.

Investment Highlights

• Detailed Feasibility Study filed March 29, 2012
• Environmental Assessment Certificate Application filed April 3, 2013
• NPV8: US$465.3M; IRR 17.0% (both after-tax) at US$2.50/lb Cu, US$1,250/oz Au, US$20/oz Ag and US$/CDN$ 0.86:1
• Estimated production over life-of-mine: 3.63 billion pounds copper, 372,000 oz. gold and 14 million oz. silver in concentrate
• Mine life 28 years at a milling rate of 70,000 tonnes/day
• Stripping ratio 0.81:1 life-of-mine
• Total proven and probable reserves 704.4 Mt at 0.262% Cu, 0.029 g/t Au and 1.14 g/t Ag @ 0.14% Cu cut off
• Adjacent rail, road, power and town infrastructure
• Project is 100% owned by Yellowhead Mining*
• Senior management has extensive international experience with large scale open pit copper projects
• Excellent potential to significantly expand the resource
• Subject to 3% NSR royalty capped at $2,500k, adjusted for inflation, plus a further 2.5% NSR royalty on approximately 1.5 million tonnes of ore which is expected to be mined beginning in year 16 of the mine plan

Key Property

Harper Creek Project – South-Central British Columbia, Canada

The Harper Creek Project is located approximately 150 km by highway north of the city of Kamloops in south-central B.C. and 560 km by rail from the Port of Vancouver. The Company’s development strategy post-feasibility completion is to engineer, permit, finance, construct, and operate the project.

Property History

In 2005 and 2006, five claim groups were acquired or optioned by Yellowhead Mining on the historical drilling area and contiguous parts of the Eagle Bay Assemblage, the mineralogical group which includes the Harper Creek deposit. Noranda Exploration and US Steel discovered the deposit in 1966. The two companies conducted exploration separately until 1971, when they formed an exploration joint venture. This ceased in 1981. Drilling by US Steel and Noranda on the main deposit totalled 25,806 metres in 161 holes. In 1996, American Comstock drilled 2,847 metres in eight holes. Yellowhead has acquired the data from the prior programs and recovered partial or complete drill core from 128 historical holes on site.

During late 2005 and early 2006, the Company re-logged and re-analysed historical drill core recovered from the site, and produced a NI 43-101 technical report. In 2006, Yellowhead completed a 1,000 line kilometre airborne geophysical survey over approximately 90 square kilometres, identifying several high priority targets for further exploration. From 2006 to 2010 the Company drilled a total of 33,724 metres in 86 holes. The Company continued drilling with 15,148 metres in 56 holes in the 2011 drilling campaign.

In support of the Feasibility Study, the Company has completed a total of 17,800 metres of drilling to December 31, 2011, including:

• Resource confirmation: 37 holes for a total of 10,843 metres
• Condemnation: eight holes for a total of 1,791 metres
• Resource expansion: 11 holes for a total of 4,725 metres
• Metallurgical sampling: 4 holes for a total of 441 metres

As of December 2011, drilling at Harper Creek has totalled 318 holes for 78,164 metres. In December 2012, Yellowhead Mining commenced a 35-hole, 11,975 metre infill drilling program, bringing total drilling to 353 holes and 90,139 metres.

Project Summary

The Harper Creek Project is an extensive volcanogenic sulphide system, with a mineralized envelope greater than 2.5 kilometres along strike, over 2.0 kilometres down dip, in a one kilometre thickness of volcano-sedimentary stratigraphy. Copper mineralization is tabular, striking east-west and dipping about 15° to 25° to the north with a number of high copper grade cores that persist with depth within a multiphased stringer zone. The deposit is open along strike to the east, down dip and at depth.

Harper Creek is hosted in the Eagle Bay Assemblage, comprised of the Lower Paleozoic Greenstone Belt. There are intensely altered sequences of black shales, mudstones, mafic and felsic flows and tuffs. A broad lower-grade zone of copper and gold/silver is linked to multi-phased stringer or feeder zones.

Higher grade copper-bearing massive sulphides are adjacent to porphytic rhyolite flows. Vertical zonation ranges from upper lead/zinc/silver/barite/pyrite to deeper copper(some zinc)/silver/gold/pyhrrotite.

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During late 2005 and early 2006, the company re-logged and re-analysed historical drill core recovered from the site, and produced a NI 43-101 data compilation report. Between 2006 and 2008 the Company completed several drilling programs on the project site. In 2010, the Company received a new NI 43-101-compliant Indicated resource estimate of 4.0 billion lb contained copper and  0.5 billion lb Cu Inferred (August 2010, Technical Report by Scott Wilson Roscoe Postle Associates Inc.). It was estimated that the project would have a greater than 20-mine life at 70,00 tpd producing up to 182 million lb Cu per year (figures represent Yellowhead estimates and are non-NI 43-101 compliant).

In March 2011 the company announced the results of a new Preliminary Economic Assessment, performed by Wardrop, a Tetra Tech Company. Yellowhead completed a total of 17,800 metres of drilling in December 31, 2011. The Company received a new resource update in February, 2012. The Detailed Feasibility Study was completed in March 2012.

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In 2011, the company bought a 79.3 ha loadout property in Vavenby with a 1.8 km siding.

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Resources at Varying Cutoff Grades

Yellowhead’s management notes that the deposit is also open to the south, east and at depth. In addition,  there are specific geophysical anomalies and mineralized outcrops occurring about 1.0 km to the south and 3.0 km to the east of the current pit limit. These are drill targets that will be followed up on in the next phase of drilling.*Inferred gold and silver grades cannot be correlated to the copper resource tonnage and shall not be used to calculate precious metal mineral content

The Company’s announcement on February 16, 2012 of its updated resource estimate showed that its program of infill and step out drilling expanded the resource by 47%. The Measured and Indicated resource at a 0.2% copper cut-off grade stands at 815Mt at 0.29% Cu, 0.032 g/t Au and 1.3 g/t Ag. A further 80.17Mt at 0.30% Cu, 0.033 g/t Au and 1.4 g/t Ag are estimated in the Inferred resource category. The Company plans to continue step out drilling to expand the existing resource and to identify new deposits within its mineral tenures.

Future Outlook 

• Work through the Environmental Assessment Process towards permitting
• Continue consultation with local First Nations and communities in the North Thompson Valley
• Continue a step-out drilling campaign in order to expand the Company’s resource base, subject to available funds
• Move forward project financing and strategic partnership discussions
• Conduct investor relations programs in North America and internationally

Management

T. Gregory Hawkins, P.Geo., MSc. – Chairman and Interim CEO
Mr. Hawkins has been involved in the Mining Exploration and Investment industry since 1969. He has been variously responsible for the identification and/or delineation of 10 mineral deposits in Canada, USA, Chile, Ghana, Mali and Zaire (DRC). In acting as Founding Project Consultant and/or Founding Director of seven public and private Exploration/Development ventures he has participated in or been responsible for the definition of at least one resource/reserve in every case with four cases resulting in production in the USA, Chile, Ghana and Mali. In 1990 he started CME, an international full service consultancy and contracting firm, which grew to include Spectral International Geophysics, Eagle Drilling and ATS Inc.

Ronald L. Handford, P.Eng., BASc, MBA - Executive Vice President, Corporate Development
Mr. Handford has over 30 years of international experience in development and finance relating to resource and technology sectors. He has been an officer and director of several private and public companies since 1996. Prior to that he was an investment officer with the International Finance Corporation and a resource industry banker with Barclays Bank.

Saurabh Handa, BSc, CA – Chief Financial Officer
Past Corporate Controller for SouthGobi Resources Ltd., Prior to that Senior Staff Accountant at Deloitte and Touche LLP working in its audit and valuation practices primarily on international mining companies

Alastair Tiver, P.Eng – Vice President, Operations
24+ years international experience in operating roles ranging from exploration stage to large scale operating mines in a variety of commodities – most recently Chief Engineer of Copper Mountain Mining Corp.

Charlene Higgins, MSc, PhD – Vice President – Environmental, Community & First Nations Relations
14+ years as a senior negotiator and policy advisor working with Aboriginal communities and organizations. Expertise in the areas of consultation, sustainable use and management of natural resources, multi-stakeholder engagement.

Board of Directors

T. Gregory Hawkins, P.Geo., MSc. – Chairman and Interim CEO

Beverly  A. Bartlett
Beverly Bartlett has over 35 years of administrative and supervisory experience, and has over 15 years of corporate secretarial experience. Since 1997, she has worked with Global Mining Management, and in this capacity has been responsible for overseeing corporate administration and maintaining regulatory compliance of both public and private companies in the resources and energy fields. In addition to being the Vice President and Corporate Secretary of Ivanhoe Energy Inc. (NASDAQ, TSX), Ivanhoe Mines Ltd. (NYSE, TSX, NASDAQ), and SouthGobi Resources Ltd. (TSX), she is the director of numerous subsidiary companies of the aforementioned public companies. She is also the companies’ Compliance and Ethics Officer, ensuring ethical conduct in corporate governance throughout the organizations.

Prior to joining Global Mining Management, Ms. Bartlett was the Corporate Secretary of Credit Union Central of Canada, and has held senior administration positions with various Canadian mining companies, including Northgate Exploration and Neptune Resources. She has wide-ranging international experience in administration and regulatory compliance, and brings with her a wealth of administrative, supervisorial and organizational skills.

R. Stuart (Tookie) Angus, LLB
An independent senior business advisor with 25 years+ of  experience in international exploration, development and mining ventures. Former Head of Global Mining, Fasken Martineau DuMoulin LLP and Managing Director, Endeavour Financial Corporation.

David J.H. Dickens, FCA
40+ years of experience as a Chartered Accountant and trust company office and director. He has worked in London, UK, Channel Islands and Dubai.

Andy Graetz, BSc, Exec. MBA
Mining engineer with 25+ years of international mining experience having worked in the USA, Canada, Philippines, Kazakhstan and South Africa in Senior mine operational, corporate development, feasibility study and CFO/finance/administration roles.

Ming An Fu
Ming An Fu is President of Anthill Resources Ltd., a mining investment group which he founded in 2009 which is focusing on mining investment and mineral exploration activities in British Columbia and Yukon Territory, Canada. Prior to that, he was Chairman and founder of Jiangyuan Mining Investment Corp. in Beijing. In 2004, he identified and acquired three iron ore and gold properties in Inner Mongolia and established Meng Yuan Ore Processing Company which performed mineral exploration, mine development/construction, mining and processing activities.