Updated NI 43-101 Technical Report on Resources


Calais Resources Inc.


Consolidated Caribou Project


Boulder County, Colorado, USA






Prepared for:




Calais Resources Inc.


P.O. Box 653


Nederland, CO 80466-0653


+1.303.258.3806













SRK Project Number:  161800.050














Prepared by:




SRK CONSULTING


Engineers and Scientists





7175 W. Jefferson Ave.


Suite 3000


Lakewood, CO 80235








Effective Date:  February 8, 2011


Original Report Date:  February 8, 2011


Updated Report Date:  August 29, 2011








Endorsed by QP:


Bart A Stryhas, PhD. CPG




















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Table of Contents


1
INTRODUCTION (ITEM 4)
1-11.1
Terms of Reference and Purpose of the Report
1-11.1.1
Purpose of the Report
1-11.1.2
Overview of the Consolidated Caribou Project
1-11.2
RELIANCE ON OTHER EXPERTS (ITEM 5)
1-11.2.1
Sources of Information
1-21.3
Involvement and Qualifications of Consultants (SRK)
1-21.3.1
Site Visit
1-32
PROPERTY DESCRIPTION AND LOCATION (ITEM 6)
2-12.1
Property Location
2-12.2
Mineral Titles
2-12.3
Location of Mineralization
2-12.4
Royalties, Agreements and Encumbrances
2-22.4.1
Calais Patented Claim Acquisitions
2-22.4.2
Aardvark Patented Claim Acquisitions
2-32.4.3
Duane Smith Trust Lease
2-42.4.4
Royalties
2-42.4.5
Encumbrances
2-52.5
Environmental Liabilities and Permitting
2-62.5.1
Required Permits and Status
2-62.5.2
Compliance Evaluation
2-73
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY (ITEM 7)
3-13.1
Topography, Elevation and Vegetation
3-13.2
Climate and Length of Operating Season
3-13.3
Physiography
3-13.4
Access to Property
3-13.5
Surface Rights
3-23.6
Local Resources and Infrastructure
3-23.6.1
Access Road and Transportation
3-23.6.2
Power Supply
3-23.6.3
Water Supply
3-23.6.4
Buildings & Ancillary Facilities
3-23.6.5
Tailings Storage Area
3-23.6.6
Waste Disposal Area
3-23.6.7
Manpower
3-34
HISTORY (ITEM 8)
4-14.1
Ownership
4-14.2
Past Exploration and Development
4-14.2.1
Cross Project
4-14.2.2
Caribou Project
4-34.3
Historic Mineral Resource and Reserve Estimates
4-34.4
Historic Production
4-4   SRK Consulting (U.S.), Inc.

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  4.4.1
Cross Mine
4-44.4.2
Caribou Mine
4-55
GEOLOGICAL SETTING (ITEM 9)
5-15.1
Regional Geology
5-15.2
Local Geology
5-25.2.1
Local Lithology
5-25.2.2
Alteration
5-25.2.3
Structure
5-36
DEPOSIT TYPE (ITEM 10)
6-16.1
Geological Model
6-17
MINERALIZATION (ITEM 11)
7-17.1
Mineralized Zones
7-17.2
Surrounding Rock Types
7-17.3
Relevant Geological Controls
7-27.4
Type, Character and Distribution of Mineralization
7-28
EXPLORATION (ITEM 12)
8-18.1
Surveys and Investigations
8-18.2
Interpretation
8-49
DRILLING (ITEM 13)
9-19.1
Type and Extent of Drilling
9-19.1.1
Procedures
9-19.2
Results
9-110
SAMPLING METHOD AND APPROACH (ITEM 14)
10-110.1
Sampling Methods
10-110.2
Factors Impacting Accuracy of Results
10-110.3
Sample Quality
10-110.4
Relevant Samples
10-211
SAMPLE PREPARATION, ANALYSES AND SECURITY (ITEM 15)
11-111.1
Sample Preparation and Assaying Methods
11-111.2
Quality Controls and Quality Assurance
11-111.3
Interpretation
11-212
DATA VERIFICATION (ITEM 16)
12-112.1
Quality Control Measures and Procedures
12-112.2
Limitations
12-113
ADJACENT PROPERTIES (ITEM 17)
13-114
MINERAL PROCESSING AND METALLURGICAL TESTING (ITEM 18)
14-114.1
Mineral Processing/Metallurgical Testing Analysis
14-114.1.1
Sample Preparation and Characterization
14-114.1.2
Bond’s Ball Mill Work Index
14-314.1.3
Grind Studies
14-314.1.4
Rougher Flotation Tests
14-314.1.5
Cleaner Flotation Test
14-614.1.6
Thickening Tests
14-714.1.7
Filtration Tests
14-7  SRK Consulting (U.S.), Inc.

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  14.1.8
Conceptual Process Flowsheet
14-814.2
Summary
14-815
MINERAL RESOURCE ESTIMATE (ITEM 19)
15-115.1
Qualified Person of the Mineral Resource Estimate
15-115.2
Drillhole Database
15-115.3
Geology
15-115.4
Block Model
15-115.5
Compositing
15-215.6
Specific Gravity
15-215.7
Variogram Analysis
15-315.8
Grade Estimation
15-315.9
Block Model Validation
15-415.10
Resource Classification
15-515.11
Mineral Resource Statement
15-615.12
Mineral Resource Sensitivity
15-616
OTHER RELEVANT DATA AND INFORMATION (ITEM 20)
16-117
INTERPRETATION AND CONCLUSIONS (ITEM 21)
17-117.1
Exploration
17-117.2
Analytical and Testing Data
17-117.3
Resource Estimation
17-117.4
Summary
17-218
RECOMMENDATIONS (ITEM 22)
18-118.1
Recommended Work Programs
18-118.1.1
Costs
18-119
REFERENCES (ITEM 23)
19-120
GLOSSARY AND ABBREVIATIONS
20-120.1
Mineral Resources and Reserves
20-120.1.1
Mineral Resources
20-120.1.2
Mineral Reserves
20-120.2
Glossary
20.3


List of Tables
 
  Table 1:  Major Zones of Mineralization
IITable 2.3.1:  Major Zones of Mineralization
2-2Table 4.3.1:  Historical Mineral Resource and Reserve Estimates
4-4Table 7.1.1:  Cross Mine Veins
7-1Table 14.1.1:  Head Analyses of Cross Mine Samples
14-2Table 14.1.2:  XRF Analyses of Cross Mine Samples
14-2Table 14.1.3:  XRF Analyses of Cross Mine Samples
14-3Table 14.1.4:  Laboratory Grind Size-Grind Time Data for Rod Mill (1kg Charge)
14-3
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  Table 14.1.5:  Bulk Sulfide Flotation Process Conditions (Flotation Time:  12min)
14-4Table 14.1.6:  Flotation Test Results
14-5Table 14.1.7:  Flotation Test Data
14-5Table 14.1.8:  Selective Lead and Zinc Flotation Results (Test No. 10)
14-6Table 14.1.9:  Cleaner Flotation Test Results
14-6Table 14.1.10:  Thickening Test Results for Flotation Tailing
14-7Table 14.1.11:  Thickening Test Results for Flotation Concentrate
14-7Table 14.1.12:  Filtration Data for Flotation Concentrate and Tailings
14-8Table 15.4.1:  Block Model Limits
15-2Table 15.7.1:  Variogram Results for the Cross Mine
15-3Table 15.9.1:  Statistical Comparisons of Au g/t and Ag g/t within Composite Assays and Block Model Assays of Each Vein and Model Domain
15-5Table 15.11.1:  Cross Mine Mineral Resource Statement
15-6Table 15.12.1:  Cross Mine Indicated Mineral Resource Sensitivity
15-6Table 15.12.2:  Cross Mine Inferred Mineral Resource Sensitivity
15-7Table 18.1.1:  Phase I and Phase II Drilling Recommendations
18-1Table 20.2.1:  Glossary
20-3Table 20.2.2:  Abbreviations
20-4





List of Figures







Figure 2-1:  Consolidated Caribou Project General Location Map
2-8Figure 2-2:  Consolidation Caribou Project Claims
2-9Figure 4-1:  3-D View of the Cross Underground Development
4-6Figure 5-1:  Local Lithologies of the Project
5-6Figure 9-1:  Generalized Drillhole Location Map
9-3Figure 13-1:  Mines Adjacent to the Project
13-2Figure 14-1:  Block Diagram Flow Sheet
14-10Figure 15-1:  Cross Project 3-D View of Indicated Resource Boundary
15-8Figure 15-2:  Grade versus Tonnage Relations within the Indicated Mineral Resource at the Cross Project
15-9Figure 15-3:  Grade versus Tonnage Relations within the Inferred Mineral Resource at the Cross Project
15-10




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 List of Exhibits
 
  Exhibit 2-1: Consolidated Caribou-Patented Claims
2-10Exhibit 2-2: Consolidated Caribou-Unpatented Claims
2-13Exhibit 9-1:  Drillhole Database
9-4




List of Appendices
 
 
 Appendix A


Certificate of Author







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Calais Resources Inc.

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NI 43-101 Technical Report on Resources


Summary (Item 3)




Calais Resources Inc. (Calais) commissioned SRK Consulting (U.S.), Inc. to prepare a NI 43-101 compliant Technical Report on Resources for the Consolidated Caribou Project (the Project) including a description and evaluation of historical exploration work and a resource estimate categorized by Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Best Practices and Reporting Guidelines” for disclosing mineral exploration information guidelines.  This objective has been met.  The historical data was found to be collected and documented by appropriate techniques and verified by modern standards in sufficient detail to support the mineral resource estimation of this report.




This updated report differs from the NI 43-101 Technical Report on Exploration, Calais Resources Inc., Consolidated Caribou Project, Boulder County, Colorado, USA dated February 8, 2011 in certain portions of the Summary, Section 1 - Introduction, Section 4 – History and the Certificate of Author.  In addition, a Mineral Resource estimate has been included in Section 15 – Mineral Resource Estimates.




Overview




The Project is comprised of 137 patented and 105 unpatented mineral claims which cover approximately 3.5mi2 (9.1km2) within the Grand Island Mining District of Colorado, and is located approximately 21mi (34km) west of the city of Boulder, in Boulder County, Colorado, and approximately 50mi (80km) northwest of the state capital of Denver.  The Grand Island Mining District encompasses at least 15 historic mines including; Boulder County, Potosi, Native Silver, Seven Thirty, Idaho, Silver Point, and St Louis Mines.




The Project is situated within the Front Range of the Southern Rocky Mountains.  Topography is characterized by gentle to moderately sloped hillsides at elevations ranging from 9,000ft (2,743m) to 10,500ft (3,200m) above sea level.  The hills and ridges are covered mainly by residual soil and glacial till, which is drained by gentle to deeply incised creeks.  Outcrop is generally rare, perhaps 5% or less over the entire property.  Climate is considered mountainous continental, typified by frequent change.  Average minimum winter temperatures are 20°F to 30°F (-7°C to -1°C) and maximum summer temperatures are 65oF to 75°F (18°C to 24°C).  Annual precipitation averages 18in (381mm) of rain and 139in (3,531mm) of snow.




All Calais Patented Claims carry a 2% NSR royalty until January 27, 2018.  Brigus Gold holds four Notes against Calais’ assets totaling approximately US$10.6million.  These notes are secured by Calais’ Colorado assets.  The forbearance periods for these Notes is June 30, 2011.




The Project has largely been inactive since 1998 due primarily to a lack of capital funding and a mill to process the ore.  However, before the cessation of operations, significant underground development was completed.




Further, the Project holds an active mine permit under the Colorado Division of Reclamation Mining and Safety (CDRMS) Permit M1977410, issued November 3, 1980.  This is a 110(2) permit, which limits ore extraction to 70,000stpy, approximately 200stpd (63,500tpy, approximately 181tpd) and land disturbances to less than 10ac (4ha) total.  The Cross Mine complies with all applicable state and federal regulations as well as contemporaneous reclamation of permitted disturbed areas and surrounding historic mining disturbances.




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Geology & Mineralization




This portion of Colorado is underlain by Precambrian basement rocks comprising the North American Craton, which has been intruded by Late Cretaceous igneous units.  The basement rocks experienced several periods of Precambrian deformation ranging from deep, ductile to more shallow brittle features.  Deeply rooted structural zones within the Precambrian rocks are linked to the development of the much younger Colorado Mineral Belt (CMB).  This belt consists of a northeast-southwest regional trend of mineralization and ore deposits that is approximately 250mi (402km) long and 80mi (129km) wide.




The Project lies near the northeast limit of the CMB.  It is hosted within the Precambrian Idaho Springs Gneiss and the Late Cretaceous Caribou Monzonite.




The origin of mineralization at the Project has been explained by two different models.  These both involve hydrothermal processes but differ as to whether the deposit was formed within a predominantly mesothermal or epithermal environment.




Mineralization is hosted within several distinct veins striking both east-west and north-northeast.  Individual veins range in width from inches to tens of feet and consist of open space fill zones containing quartz and disseminated sulfides flanked by mineralized and non-mineralized alteration zones.  Overall, the zone of mineralization and alteration has an average width of 5ft (1.5m).  Altered host rocks within and adjacent to veins show more limited sulfide mineralization due to a lesser amount of rock fracturing and open space fill.




Precious metals grades in the Project typically run 0.05-1.0oz/st-Au (1.7-34.3g/t-Au) and 0.2-30.0oz/st-Ag (6.8-1,029g/t-Ag).  Weathering has partially oxidized sulfide minerals to all depths tested to date.  The veins are distributed within two main sets, those that strike predominately east-west and those striking north-northeast.  A large number of these veins have been outlined throughout the modern exploration history of the Project.  The major zones of mineralization and their location within the Consolidated Caribou areas are summarized in Table 1.




Table 1:  Major Zones of Mineralization




Mineralized Zone
Cross
Caribou
Congo Chief
St. Louis
Northwestern
Silver PointCrown Point Vein
XCross Vein
XRare Metals Vein
XRomeo Vein
XJuliet Stockwork
XAnaconda Vein
XApache Vein SystemSouth
XMain
X
(Golconda?)Intermediate
XNorth
XPotosi Vein
XGold Coin Vein
XNo Name Vein

X
XGolconda Vein

XNelson System VeinsEast

XIntermediate

XWest

XPoor Man Vein

XNorth Poor Man Vein

X5-30 Vein

XCaribou Park Zone

X


XPandora Mine Vein

XSt. Louis Vein



X

X




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The dominant controls on gold, silver, lead and zinc mineralization at the Project are structural channeling along dilatational fault and vein planes within an environment chemically favorable for the precipitation of electrum and base metal sulfides.  Deep-seated regional structures appear to have been active at the time of mineralization and have played a vital role in the structural preparation of the host rocks and channeling of the mineralizing fluids.  The fluids and their contained metals are believed to have been derived either from a deeper magmatic source rock or from deep metamorphic processes associated with the Laramide Orogeny.




Exploration Programs




Exploration work at the Project has consisted primarily of a series of development drifts and raises, surface and underground geologic mapping, rock chip and continuous channel sampling and diamond core drilling programs from surface and underground over a period of many years.




The exploration drilling programs and supporting analytical work completed during the 17-year period between 1982-1998 can support a NI 43-101compliant resource estimation.




These exploration programs mapped, sampled and diamond core drilled extensions to all known veins, discovered several new veins and indicated several areas of anomalous mineralization.  The exploration programs were well thought-out and conducted in a professional manner.  Drilling was conducted by reputable contactors and most of the deeper drillholes were surveyed for downhole deviation.  The core was logged, split and sampled properly.  All samples were analyzed using appropriate assay procedures of the time.  The drill logging and assay results were correctly compiled onto cross-sections.  A total of 181 drillholes totaling 149,102ft (45,446m) were completed over ten years by seven different operators.  The exploration work described above resulted in the delineation of anomalous gold mineralization located within at least 14 veins, each of which average 3ft (1m) in true thickness along 300ft (91m) of strike length and 350ft (107m) of down dip extent.




Mineralogical Test Program




Resource Development Inc., (RDi) completed a metallurgical test program on the Project.  The testwork included sample compositing, composite characterization, Bond’s ball millwork index determination, flotation tests, thickening and filtration studies.  The objectives of the metallurgical study were; (1) to determine if a bulk-sulfide concentrate should be produced or two separate concentrates, namely lead and zinc concentrate, should be produced, and (2) generate data for sizing major equipment for the optimum flowsheet.  This work yielded the following results:




·
The composite sample prepared from the four individual samples, assayed 17.3g/t Au, 315g/t Ag, 0.18% Cu, 1.20% Pb and 1.16% Zn;


·
The sample had a Bond’s ball mill work index of 15.29;


·
Both bulk-sulfide flotation and sequential lead and zinc flotation schemes were evaluated.  The bulk-sulfide flotation was determined to be best for maximizing precious metals recoveries;


·
Several process variables were evaluated for the bulk-sulfide flotation scheme.  They included primary grind, pH, supplementary collectors and frothers and cleaner flotation.  The optimum process conditions were determined to be a primary grind of P80 of 100 mesh or finer, pH of 9 to 10 and reagent suite of potassium amyl xanthate and methyl




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NI 43-101 Technical Report on Resources
   isobutyl carbonyl.  Cleaner flotation resulted in significant loss of precious metals to the cleaner tailing;


·
The rougher bulk-sulfide flotation will recover approximately 11% of the weight and ±90% of gold and ±85% of silver values; and


·
Thickening and filtration tests were performed on both flotation concentrate and tailings to size thickeners and filters.  The tailings can be used for backfilling the mine.




Mineral Resource Estimate




The Cross Mine resource estimation is based on information from 116 drillholes totaling 62,384ft combined with an additional 499 continuous channel samples totaling 1,863ft.  The drillhole database was completed and verified by SRK personnel and is determined to be of high quality.  The resource estimation employed wire frame solids shapes of the 14 main veins and a categorical indicator technique to develop a 2.0g/t Au grade shell for mineralization not encompassed by the main veins.  The model blocks are uniform 3.0ft x 3.0ft x 3.0ft cubes and all block grade estimates were made using 3.0ft downhole composites.  An Ordinary Kriging grade estimation algorithm was employed using a minimum of 1 and a maximum of 8 composites with no octant search restriction and no restriction on the number of drillholes.




The results of the resource estimation provided a CIM classified Indicated Mineral Resource of 33kst of material with an average grade of 0.360oz/st Au and an additional Inferred Mineral Resource of 32kst of material with an average grade of 0.335oz/st Au both using a 0.2oz/st Au cut-off.  The quality of the Cross Mine drilling and sampling data is very good and the mineral resource was classified mainly according to the general drillhole spacing and underground sampling on the veins.












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1
Introduction (Item 4)




1.1
Terms of Reference and Purpose of the Report




SRK Consulting (U.S.), Inc. (SRK) was commissioned by Calais Resources Inc. (Calais) to prepare a Canadian National Instrument 43-101 (NI 43-101) compliant Report on Resources on the Consolidated Caribou Project (the Project) located near the town of Nederland, Colorado USA.




This updated report differs from the NI 43-101 Technical Report on Exploration, Calais Resources Inc., Consolidated Caribou Project, Boulder County, Colorado, USA dated February 8, 2011 in certain portions of the Summary, Section 1 - Introduction, Section 4 – History and the Certificate of Author.  In addition, a Mineral Resource estimate has been included in Section 15 – Mineral Resource Estimates.




1.1.1  Purpose of the Report




The intent of this Technical Report on Resources is to provide the reader with the status of the Project and an understanding of geology, exploration activities and Mineral Resource estimate.




This Technical Report on Resources is prepared using the industry accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Best Practices and Reporting Guidelines” for disclosing mineral exploration information, the Canadian Securities Administrators revised regulations in NI 43-101 (Standards of Disclosure For Mineral Projects) and Companion Policy 43-101CP, and CIM Definition Standards for Mineral Resources and Mineral Reserves (December 11, 2005).




1.1.2  Overview of the Consolidated Caribou Project




Calais’ Colorado mining assets are comprised of a series of patented and unpatented claims which cover approximately 3.5mi2 (9.1km2) within the Grand Island Mining District of Colorado.  These claims are referred to as the Consolidated Caribou Claims and include the following areas of underground development:




·
Cross;


·
Caribou;


·
Congo Chief;


·
St. Louis;


·
Northwestern; and


·
Silver Point.




The Caribou, Congo Chief, St. Louis, Northwestern and Silver Point workings are collectively referred to as the Caribou Property Claims (or the Upper Claims).




The Project has largely been inactive since 1998 due primarily to a lack of capital funding and a mill to process the ore.  However, before the cessation of operations, significant underground development was completed.




1.2
Reliance on Other Experts (Item 5)




The Qualified Person (QP), Bart Stryhas, has examined the historical data for the Project property provided by Calais, and has relied upon that basic data to support the statements and





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opinions presented in this Technical Report on Resources.  In the opinion of the QP, the historical data is present in sufficient detail, is credible and verifiable in the field, and is an accurate representation of the Project.




The historic documentation available for the Project is limited in certain areas, but of very good quality.  It is the opinion of the QP that there are no material gaps in the drilling and assay information for the project.  Sufficient information is available to prepare this report, and any statements in this report related to deficiency of information are directed at information, which in the opinion of the author, either has been lost over the period of inactivity and ownership transfers, is stored in non-sorted corporate file cases, or else was not gathered by previous workers.




This report includes technical information, which requires subsequent calculations to derive sub-totals, totals, and weighted averages.  Such calculations inherently involve a degree of rounding and consequently can introduce a margin of error.  Where these rounding errors occur, SRK does not consider them to be material.




The author has relied upon the work of others to describe the land tenure and land title in, referring specifically to Sections 2.1 – Property Location and 2.2 – Mineral Titles.  The information contained in these sections was obtained from Bureau of Land Management (BLM) LR2000 active claims database and Boulder County Colorado Courthouse public records.  Additionally, information was obtained from Calais’ legal counsel, Mr. John Henderson, Boulder Colorado.




The author has relied upon the work of others to describe the royalties, agreements and encumbrances in Section 2.4.  The information contained in this section was obtained from Calais’ legal counsel, Mr. John Henderson, Boulder Colorado.




1.2.1  Sources of Information




Standard professional review procedures were used in the preparation of this report.  The author reviewed historical data provided by Calais, conducted a site visit to confirm the data and mineralization, and reviewed the project site.  All of the drill core has been carefully stored indoors at the Project since it was cored.  All of the project data is historical, dating mainly from 1982 through 1998, although there are reports dating to the 1920s.  The primary historical data sources relied upon by SRK include the following: Barrett and Schuiling 1988 “Cross Project Report”, Akright 1998 “Resource Review”, legible descriptive drill logs with assay entries from the various drilling programs and original assay certificates from Skyline Lab, Cone Geochemical and Barringer Laboratories.  An electronic drillhole database containing the drill collar coordinates, downhole survey data and gold/ silver assay data was assembled by Calais and modified by SRK for to support a future resource estimation.  In February 2008, SRK collected 44 samples from 7 drillholes for analyses by ALS Chemex to provide specific gravity determinations.




1.3
Involvement and Qualifications of Consultants (SRK)




Bart Stryhas, PhD,CPG




Dr. Bart Stryhas is responsible for all sections of this report.  He has thoroughly reviewed the historical data files and provided a compilation of the historical work.  Dr. Stryhas also





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constructed a geologic model and provided the final editing for the report.  He has visited the property.  Dr. Stryhas is a “Qualified Person” as defined by NI 43-101.




The SRK Group comprises over 1,000 staff, offering expertise in a wide range of resource engineering disciplines.  The SRK Group’s independence is ensured by the fact that it holds no equity in any project and that its ownership rests solely with its staff.  This permits the SRK to provide its clients with conflict-free and objective recommendations on crucial judgment issues.  SRK has a demonstrated track record in undertaking independent assessments of Mineral Resources and Mineral Reserves, project evaluations and audits, technical reports and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide.  The SRK Group has also worked with a large number of major international mining companies and their projects, providing mining industry consultancy service inputs.




This report has been prepared based on support by a team of consultants sourced from the SRK Group’s Denver, US office.  These consultants are specialists in the fields of geology, Mineral Resource and Mineral Reserve estimation and classification, underground mining, mineral processing, and mineral economics.




Neither SRK nor any of its employees and associates employed in the preparation of this report has any beneficial interest in Calais or in the assets of Calais.  SRK will be paid a fee for this work in accordance with normal professional consulting practice.




1.3.1  Site Visit




On February 20, 2008, Dr. Stryhas conducted a site visit of the Project.  David Young, President and CEO, and Thomas Hendricks, VP Development both of Calais made arrangements and led the tour.  There was 2-3ft (0.6-0.9m) of snow on the ground at the time of the visit.  It was a clear day with minimal wind just below freezing.  Six hours were spent on site.




The mine is situated on a moderately sloped hillside with benched level areas for the site facilities.  The site facilities consist of three main buildings and two old log cabins.  The mine portal daylights to an enclosed shop/warehouse and dry facility.  The mine office is also in the shop building.  Adjacent to these buildings is a large core warehouse which also houses the main mine compressor.  Core is neatly organized and stacked on heavy-duty core racks.  The core boxes are in excellent condition, well labeled and easily accessible.




The author spent about two hours underground on the portal level - 9,693ft (2,954m) elevation.  The underground workings at this level are in good condition.  Mineralization is apparent in a number of different veins.  Numerous channel sample locations were observed as well as several underground drillhole collars.  The general ground conditions are very good and minimal cribbing or support is present.  Several small stopes and raises were observed.











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Consolidated Caribou Project
2-1

NI 43-101 Technical Report on Resources




2
Property Description and Location (Item 6)




2.1
Property Location




The Project is located approximately 21mi (34km) west of the city of Boulder, in Boulder County, Colorado, and approximately 50mi (80km) northwest of the state capital of Denver (Figure 2-1).  The Cross portal is located at 39°58’41.1”N. latitude and 105°34’20.4”W longitude (UTM coordinates 4,425,480N and 451,129E, Zone 12S).  The Caribou portal is located at 39°58’45.3”N. latitude and 105°34’21.3”W longitude (UTM coordinates 4,425,611N and 451,110E, Zone 12S).




The claim block lies approximately 5mi (8km) southeast of the Indian Peaks Wilderness area.




2.2
Mineral Titles




Calais owns or controls 137 patented and 105 unpatented mineral claims in a 3.5mi2 (9.1km2) area, which comprise the Consolidated Caribou District.  In general, these claims can be classified as:




·
The Calais Patented Claims, which comprise the Cross Project.  These claims include most of the currently disturbed and proposed development property at the Cross Mine.  Calais owns the mineral rights to all these claims; and


·
The Caribou Property (Upper) Claims represent the majority of the Consolidated Caribou District land holdings.  Aardvark Agencies, Inc. (AAI) is the “nominee owner” of a portion of the claims, which comprise the Caribou Property.  As “nominee owner”, AAI holds record title to the parcel, however Calais retains the right to occupy, explore, mine, develop, build, and/or re-acquire the property.




Patented and unpatented claims are listed in Exhibits 2-1 and 2-2, respectively.  Claims outlines are shown in Figure 2-2.




2.3
Location of Mineralization




The gold and silver-bearing veins of the Project are located within the Grand Island Mining District at the northern limit of the Colorado Mineral Belt.  Mineralization is hosted within several distinct veins striking both east-west and north-northeast.  The main vein outcroppings are located above Coon Track Creek in and around Caribou Hill.  Mineralization tested to date is confined to quartz/sulfide veins hosted with Precambrian Idaho Springs Gneiss and the Tertiary Caribou Monzonite.




A large number of gold-silver veins have been outlined throughout the modern exploration history of the Project.  The major zones of mineralization are summarized in Table 2.3.1.




These structures all have been exposed and tested by underground development and mining.




In addition to the underground development, there is a stockpile of mineralized material, and a small amount of waste rock on the surface and two mine discharge monitoring ponds.


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Consolidated Caribou Project
2-2

NI 43-101 Technical Report on Resources




Table 2.3.1:  Major Zones of Mineralization




Mineralized Zone
Cross
Caribou
Congo Chief
St. Louis
Northwestern
Silver PointCrown Point Vein
XCross Vein
XRare Metals Vein
XRomeo Vein
XJuliet Stockwork
XAnaconda Vein
XApache Vein SystemSouth
XMain
X
(Golconda?)Intermediate
XNorth
XPotosi Vein
XGold Coin Vein
XNo Name Vein

X
XGolconda Vein

XNelson System VeinsEast

XIntermediate

XWest

XPoor Man Vein

XNorth Poor Man Vein

X5-30 Vein

XCaribou Park Zone

X


XPandora Mine Vein

XSt. Louis Vein



X

X






2.4
Royalties, Agreements and Encumbrances




Calais’ 137 patented claims were acquired in approximately three dozen acquisitions over a period of 34 years.  Calais has obtained a master title policy covering nearly all of the Project properties, including properties in the permit area.  The major acquisitions for patented lands within the resource area and permit area are described below.  Additionally, three claims are leased from the Duane Smith Trust, also discussed in this section.




2.4.1  Calais Patented Claim Acquisitions




Cross Property Acquisition – Dofflemyer Group




The Cross Property, consisting of 15-patented claims, were acquired in August 1987 by Hendricks Mining Co., from the Dofflemyer family by Warranty Deed.  These claims were subsequently transferred to Calais Resources Colorado, Inc. by deed dated March 30, 1998.  Twelve of theses patented claims [Cross lode, Cross No. 2, Cross mill site, Crown Point lode, Juliet lode, Mammoth lode, Protection lode, Rare Metals lode, Rare Metals mill site, Romeo lode, Syndicate lode and Tacoma lode] are located in the area of modern underground development and/or permit disturbance area.




Potosi Group Acquisition




The Potosi properties, consisting of 4-patented claims, were acquired in February 1988 by Hendricks Mining Co., from the William M. Warren and Aquarius Mining Co. by Warranty Deed.  These claims were subsequently transferred to Calais Resources Colorado, Inc. by deed dated March 30, 1998.  These patented claims [Alpine lode, Gold Coin lode, Potosi lode, and Worcester lode] are in located in the area of resource potential.




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Consolidated Caribou Project
2-3

NI 43-101 Technical Report on Resources




Wolcott Group Acquisition




The Wolcott properties, consisting of 4-patented claims, were acquired in August 1987 by Hendricks Mining Co., from the William M. Warren and Aquarius Mining Co. by Warranty Deed.  These claims were subsequently transferred to Calais Resources Colorado, Inc. by deed dated April 8, 1998.  These patented claims [5/8 interest Garfield lode, Ready Cash lode, Silver Brick lode, and Defiance lode] are located near the area of resource potential.  Only the Garfield lode touches the area of resource potential.




Tallman Group




The Tall properties, consisting of 3-patented claims, were acquired in November 1987 by Hendricks Mining Co., from the Tallman family by Warranty Deed.  These claims were subsequently transferred to Calais Resources Colorado, Inc. by deed dated April 8, 1998.  Of these patented claims [3/8 interest Garfield lode, Ponderosa lode, and Monticello Chief lode] only the Garfield lode touches the resource area.




2.4.2  Aardvark Patented Claim Acquisitions




New York Lode and Millsite; the Brazilian lode and Millsite




The New York lode and mill site were acquired by Calais from William M. Warren and Richard A. Sigismond by Warranty Deed in October 1997 as part of a larger acquisition.  Only the New York mill site claim is within the area of resource potential and the permit area.




The Brazilian lode and Brazilian mill site claims were acquired (as part of a much larger Caribou Mine acquisition) by AAI) by Sheriff’s deed (after assignment of the Certificate of Purchase from LNRS, LLC, the successors in title by Sheriff’s sale to the interest of Nederland Mines, Inc.), on December 17, 1998.  The Brazilian lode claim is in the area of resource potential and the Brazilian mill site claim is within the permit area (a small portion is in the area of resource potential).




The New York mill site, Brazilian lode and Brazilian mill site patented claims were transferred (together with others, totaling 78 properties”) to AAI as part of a larger financing transaction involving AAI.  An Agreement executed in 1999 assigned 100% interest in 35 claims to AAI for US$0.5million.  An Agreement executed in 2000 assigned 100% interest in an additional 43 claims to AAI for US$3.5million (US$1.2million cash and US$2.3million note).  Both transfers were made subject to a recorded right to redeem and re-acquire held by Calais and further subject to a note and deed of trust in the amount of US$2.3million, held by Calais.  Calais has 10-years to redeem or re-acquire the properties.  AAI is delinquent on the US$2.3million note to Calais.  No royalties were assigned or transferred to AAI.




The Deed of Trust, recorded February 1999, from AAI to the Public Trustee of Boulder County, for the Benefit of Calais, securing an original principal indebtedness of US$2.3million affects the New York mill site, Brazilian lode and Brazilian mill site patented claims.  This Deed of Trust is purported to subordinate to the lien filed below.




In July 2003, AAI mortgaged 68 of the 78 claims for US$4.5million.  A Deed of Trust, recorded September 2003, from AAI to the Public Trustee of Boulder County, for the benefit of Broadway Mortgage Corporation, Michael E. Haws, Kemp Hanley, R. Britton Colbert, Accounts Plus, Inc and Riviera Holdings, LLC securing an original principal indebtedness of US$4.5million affects the New York mill site, Brazilian lode and Brazilian mill site patented claims.  This Deed of





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Trust has since been assigned to Irrevocable Trust U/W John H. Evans, Dan and Danna Holmes CRT II, Dan and Danna Holmes CRT I, Dan and Danna Holmes 2004 Revocable Trust, Cindy Evans, Cindy Evans CRT, American Endowment Foundation FBO Ezekial 36:26 Foundation, John and Wendy Evans CRT 1, American Endowment Foundation FBO Holmes Family Foundation, and Mary H. Perry, LLC recorded January 2007.




The New York mill site claim carries a 2% NSR until April 2018.  The April 1998 document allows repurchasing 1% of the 2% NSR royalty at any time during the term for US$0.75million.  The royalties are payable to Thomas R. Hendricks, the Estate of Marjorie J. Hendricks and John R. Henderson.




2.4.3  Duane Smith Trust Lease




The Duane Smith Trust has leased 3-patentied claims to Hendricks Mining Co.  The claims are the Laramie County lode, Homestead lode and Gilpin County lode, totaling 9.77ac (3.95ha).  Portions of the three claims are part of the permit area.  Portions of the Smith properties are traversed by the historical mine access road, this road pre-dates the location and patent of the Smith claims.




The Smith property was originally leased by Calais’ predecessors in August 1987.  The Smith property was re-leased to Calais in 2003 for a period of 15-years, and may be extended for 3 additional five-year periods.  The lease specifically grants to lessee the right to haul, process, mine, transport, store, mill, treat, or transport on or across the Leased Premises supplies, ore, rock, minerals, waste, concentrates or other material from adjacent or nearby properties worked or owned by lessee and/or its assigns.  These rights shall be known as the “Cross Mining Rights”.  Each party shall have the right to utilize existing, historical access roads, crossing the properties for all purposes.




The lease provides for a 3.5% NSR royalty on all minerals, ores, metals, concentrates, or other materials extracted and shipped from the Leased Premises.  As no mining has or will occur on these claims, and all activities involve historical access, no production royalties are incurred.




The lease specifies for a minimum advance royalty of US$3,000/yr for years 1 through 5, US$4,000/yr for years 6 through 10, US$5,000/yr for years 11 through 15.  The first 5-year lease extension is US$7,500/year and then escalated thereafter.  The minimum advance royalty may be offset with paid production royalties.




Calais is responsible for all property and personal taxes on the leased property.  Additionally, any severance or production taxes, levied on the leased claims, are apportioned.  Calais is obligated to maintain liability insurance, accidental injury or death insurance and workman’s compensation insurance for the term of term of the lease.  These leased claims are encumbered by the July 2003 Deed of Trust from Calais for the benefit of Broadway Mortgage Company described above.




2.4.4  Royalties




Calais Patented Claims




All Calais’ Patented Claims carry a 2% NSR royalty until January 27, 2018.  The January 1993 agreement allows repurchasing the 2% NSR royalty at any time during the term for US$1.5million.  The royalties are payable to Thomas R. Hendricks, the estate of Marjorie J. Hendricks and John R. Henderson.




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2.4.5  Encumbrances




Prior to February 1, 2010, Calais was in default on approximately US$10.5million based on the following:




Note
Amount (approximate) (US$000s)Original Notes
$7,700Additional Caribou Loan
$1,450Congo Chief Note
$380Purchase Agreement
$9,530Duffy Note
$1,100Total Debt
$10,600




Brigus Gold (Apollo Gold) Transaction




On December 9, 2009, Apollo Gold Corporation (the “Company”) entered into a replacement letter of intent (the “New LOI”) with Elkhorn Goldfields LLC (“Elkhorn”), Calais Resources Inc. and Calais Resources Colorado, Inc. (together with Calais Resources Inc., “Calais”) pursuant to which Elkhorn agreed, subject to the terms and conditions contained in the New LOI, to purchase all the outstanding capital stock in Montana Tunnels Mining, Inc. (“Montana Tunnels”), an indirect wholly owned subsidiary of the Company, which holds the Company’s 50% interest in the Montana Tunnels Mine and mill, the Diamond Hill mine and mill and any and all ancillary assets related thereto.




On February 1, 2010, Apollo Gold, Inc., entered into a definitive purchase agreement with the Company respect of the Purchase Transaction (the “Purchase Agreement”) and consummated the transactions contemplated thereby.




On February 1, 2010, Apollo Gold, Inc., a direct wholly owned subsidiary of the Company and the sole shareholder of Montana Tunnels (the “Seller”), Elkhorn and Calais entered into a definitive purchase agreement in respect of the Purchase Transaction (the “Purchase Agreement”) and consummated the transactions contemplated thereby.




Note that Montana Tunnels is a wholly owned subsidiary of Apollo Gold which subsequently merged with Linear Gold to become Brigus Gold.




Pursuant to terms of the Purchase Agreement, Montana Tunnels sold all of the capital stock of Montana Tunnels in exchange for notes valued at approximately US$9.5million.  Pursuant to the Purchase Agreement, Montana Tunnels agreed to forebear on the Original Notes and the Congo Chief Note (each of which, as noted above, is past due) until February 1, 2011.




In an Extension Agreement dated June 8, 2011, Brigus agreed to extend the forbearance period to October 31, 2011 in exchange for a cash payment of $1,000,000.  The funds were applied to accrued but unpaid interest on the Notes.




The Duffy Note




On August 1, 2005, the Company issued a note payable to a group of shareholders (The Duffy Group (“Duffy”)) for US$807,650, in exchange for US$681,000 originally infused into the Company as Share Capital, and interest accrued from the date of each infusion totaling US$126,650.  The note payable was secured by a trust deed on the Caribou Townsite and Mine.




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Consolidated Caribou Project
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NI 43-101 Technical Report on Resources




By December 15, 2005, the Company was no longer able to make its scheduled payments and was in default.  Since then, the note was renegotiated and restructured several times until February, 2010 when the accrued interest totaled approximately US$1.1million.




On February 19, 2010, the Duffy Group entered into an agreement with Brigus and Calais whereby the Duffy group received 10,306,790 shares of Calais common stock in connection with the forgiveness of US$453,347 in debt to Calais, the remaining balance of US$653,021 owed to Calais was assigned to Brigus, and the Duffy Group agreed to assign its right to title and interest to the “Caribou” loan property to Brigus.




On January 13, 2011, Brigus Gold agreed to extend the forbearance period to June 30, 2011, for the notes held by Brigus Gold, which are secured by the Colorado assets of the Company.




2.5
Environmental Liabilities and Permitting




The Project holds an active mine permit under the Colorado Division of Reclamation Mining and Safety (CDRMS) Permit M1977410, issued Nov 3, 1980.  This is a 110(2) permit, which limits ore extraction to 70,000stpy, approximately 200stpd (63,500tpy, approximately 181tpd) and land disturbances to less than 10ac (4ha) total.




Current mine disturbance is 2.0ac (0.8ha).  A US$15,400 bond is held by CDRMS for final reclamation of the property.




2.5.1  Required Permits and Status




The Cross Mine holds CDRMS Permit M1977410, issued Nov 3, 1980.  This is an active mine permit.  The mine can currently produce run of mine (RoM) ore for shipment to a mill.  The mine activities are a legal nonconforming use under the Boulder County Land Use Code.  Additionally, Calais holds the following permits:




·
Explosives permit No. 5-CO-013-33-1H-00625


·
Water Quality NPDES permit CO-00322751;


·
MSHA ID 0502730;


·
Colorado Air Pollution Emissions Notice (APEN) Permit No. 09BO0439F;


·
Stormwater Plan Permit No. COR040242; and


·
County building and grading permits.




Calais has announced plans to expand the current permitted operations.  Proposed activities include the development of a new mine access and expanded underground mine workings; construction and operation of an on-site surface mill; construction of an ore storage building; development of a new access and safety road connecting two currently disconnected mine areas; implementation of site drainage controls, and other site improvements.  An amendment to the existing CDMRS permit is required for these expansion activities, as well as an increase in the posted reclamation bond.  The permit disturbance will be increased to 9.35ac (3.78ha).  The current CDRMS 110 permit surface disturbance may be expanded to a maximum of less than 10ac (4ha).  RoM production greater than 70,000stpy (63,500tpy) or surface disturbance of 10 (4ha) or more acres requires Calais to permit under CDRMS 112 regulations.




Along with the amendment to the mine permit, the expansion activities trigger a Special Use Review under the Boulder County Land Use Code.  A Special Use Review Application, prepared by Walsh Environmental Scientists and Engineers LLC, was submitted in April 2008 and approved in September 2008.  The proposed mine expansion can meet the applicable criteria of





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the County Land Use Code,  Additional county building permits, county grading permits, and amendments to existing stormwater permits, NPDES permits, and APEN permits are required following approval of the expansion plans.




2.5.2  Compliance Evaluation




The Cross Mine complies with all applicable state and federal regulations as well as contemporaneous reclamation of permitted disturbed areas and surrounding historic mining disturbances.









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Figure 2-1:  Consolidated Caribou Project General Location Map







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Figure 2-2:  Consolidation Caribou Project Claims










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Consolidated Caribou Project
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NI 43-101 Technical Report on Resources




Exhibit 2-1: Consolidated Caribou-Patented Claims




Rec.
No.
Claim Name
Mineral Survey
Tax No.1
1
Airshaft
116
287682
2
Alpine lode
13271
286543
3
Amanda lode
13172
287184
4
American Flag lode
12790
270155
5
American lode
14286
273856
6
Anaconda lode (100% subsurface minerals, full mining easement)
12934
271447
7
Apex lode
14286
273858
8
Arizona (west 900')
54
287689
8A
Arizona lode (East 500 feet)
54
2806710
9
Arlet No. 1 lode
16705
2701711
10
Arlet No. 2 lode
16705
2701712
11
Arlet No. 3 lode
16705
2701713
12
Arlet No. 4 lode
16705
2701714
13
Barablas lode
15588
2806615
14
Belcher lode
150
2748716
15
Bob Tail lode (100% subsurface minerals)
13180
2714417
15A
Bob Tail lode (full mining easement)
1318018
16
Brazilian lode
13367A
2807619
17
Brazilian millsite
13367B
2807620
18
Broken Bow lode (subsurface minerals)
13146
2911321
19
California lode
20483
2806722
20
Canadian lode (Undivided 3/8)
666
50450823
20A
Canadian lode (Undivided 3/8)
666
2784324
21
Caribou lode
37
2806725
22
Carry lode
660
2806726
23
Central lode
481
27643-0127
24
Chief lode
15637
2713928
25
Columbia lode
167
2806729
26
Comstock lode
52
2818430
27
Conger
94A
27292-0131
28A
Congo Chief lode
2030532
28
Cross lode
518
2738533
29
Cross millsite
20681B
2738534
30
Cross No. 2
20681A
2738535
31
Crown Point lode
6823
2738536
32
Defiance lode
5868
2876737
33
Develinglode
13510
2818138
34
Douglas lode
47
2806739
34A
Dutch Park Lode (conservation easement)
1683840
36
East Idaho lode (Undivided 50%)
346
2840941
37
East St. Louis lode
14592
2701542
38
Emilie lode (Undivided 1/3)
L6I99
2857543
39
Enterprise lode
19828
2798544
40
Eureka lode
13685
2818445
41
Extension lode
92
2806746
42
Fannie lode
659
2806747
43
Federal lode
91
2806748
44
Garfield lode (Undivided 3/8)
522
2768649
44A
Garfield lode (Undivided 5/8)
522
2876250
45
Gilpin County lode
12933
2846551
46
Golconda lode
192
2806752
47
Gold Coin
18574
2865453
48
Grand Island lode
61
2806754
49
Grand View lode
297
2806755
50
Grant County lode
115
28067


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Exhibit 2-1: Consolidated Caribou-Patented Claims (Continued)




Rec.
No.
Claim Name
Mineral Survey
Tax No.56
51
Hidden Treasure lode
105
2806757
52
Homestead lode
13471
2846558
52A
Idaho Extension Lode
17159
53
Idaho lode (39/143)
96A
2794660
54
Idaho millsite (221/858)
96B
2794761
55
Iron King 2 lode (minerals only - Boulder Co Surface; T. S. Hendricks RoFR)
16776
14187362
56
Iron King lode (minerals only- Boulder Co Surface; T. S. Hendricks RoFR)
16776
14187363
57
Iron Wonder lode (minerals only-Boulder Co Surface; T. S. Hendricks RoFR)
16776
14187364
58
Isabel lode (aka Isabella)(Und. 10/12)
170
2806965
59
Isabella (aka Isabel) (Undivided 1/6)
170
2874066
60
IXL lode
85
2692767
61
Jay lode
169
2806768
62
Juliet lode
13272
2738569
63
Kalamazoo lode
76
2806770
64
Klondyke (aka Klondike) lode
14592
2701571
65
Lafayette lode (100% subsurface minerals)
12934
2714472
65A
Lafayette lode (full mining easement)
1293473
66
Laramie County lode
13471
2846574
67
Laramie County No. 2 lode
13471
2714775
68
L. S. Root Mill Site
117
2743676
69
Last Chance lode
14246
2821377
70
Little Eddie lode
716
2818478
71
Lost lode
56
2806779
72
Main (a/k/a Maine)
102
2876880
73
Mammoth lode
13272
2738581
74
Monadnock lode (a/k/a Modadnoc)
274
2851082
75
Monitor lode
227
2823583
76
Monticello lode
15637
2713984
77
Mt. Vernon lode
46
2748685
78
Nation lode
12985
2778986
79
Nation No. 2 lode
15637
2778987
80
Nation No. 3 lode
15637
2778988
81
National Placer
17718
2701789
82
Nautilis (sic) a/k/a Nautilus lode
452
2818590
83
New York lode
344A
2823591
84
New York Millsite
344B
2823592
85
No Name lode
77
2806793
86
Non Pareil
6853
2807294
87
North Star lode
5269
2845695
88
Northpark lode
20483
2806796
89
Northwestern lode
429
2851097
90
Ontario lode (Southeasterly 500 feet)
55
2806798
90A
Ontario lode (West 900 feet)
55
2748799
91
Ophir lode
587
27940100
92
Pandora #1 lode
20597
28182101
93
Pandora #4 lode
20597
28182102
94
Pay Rock lode
8480
27794103
95
Ponderosa lode
13172
28322104
96
Poorman lode
42
28067105
97
Potosi
48
28654106
98
Promise lode
149
28183107
99
Protection lode
13272
27385108
100
Rare Metals lode
20681A
27385109
101
Rare Metals Millsite
2068IB
27385110
102
Ready Cash lode
6852
28767


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Exhibit 2-1: Consolidated Caribou-Patented Claims (Continued)




Rec.
No.
Claim Name
Mineral Survey
Tax No.111
103
Rico lode
14286
27385112
104
Roberts Placer (minerals only - Boulder County Surface)
14284113
105
Romeo lode
13272
27385114
106
7-49 lode (Undivided 1/3)
16199
28575115
107
Seven Thirty lode
71
28067116
108
Sherman lode
93
28067117
109
Silver Brick lode
159
28767118
110
Silver Dollar lode
654
28067119
111
Silver Point lode
39
27643120
112
Smuggler lode
13219
28059121
113
Socorro lode
104
28067122
114
St. Louis lode
12756
27120123
115
Spencer lode
168
28067124
116
Standard No. 6 lode (N. & W. of Arlet No. 1 - See deed #2104541)
16705
27017125
117
Standard No. 8 lode (N. & W. of Arlet No. 1 - See deed #2104541)
15088
27017126
118
Standard No. 9 lode (N. & W. of Arlet No. 1 - See deed #2104541)
16705
27017127
119
Staten Island lode
124
28238128
120
Sunny View lode
13471
27147129
121
Syndicate lode
15609
27385130
122
Tacoma lode
13272
27385131
123
Ten Fortv
287
28768132
124
Toledo lode
20483
28067133
125
Windy Point lode
16926
27643134
126
Worcester lode
13271
28654135

St. Louis lode
12745136

Eagle Bird
12790137

East Idaho
346











SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
2-13

NI 43-101 Technical Report on Resources




Exhibit 2-2: Consolidated Caribou-Unpatented Claims




Serial No
Claim Name/Number
County
Claim Type
Mr  Twn  Rng Sec1
CMC230687
APOLLO #09
BOULDER
LODE CLAIM
06 0010S 0730W 0082
CMC230688
APOLLO #12
BOULDER
LODE CLAIM
06 0010S 0730W 0083
CMC230689
APOLLO #13
BOULDER
LODE CLAIM
06 0010S 0730W 0084
CMC230690
APOLLO #14
BOULDER
LODE CLAIM
06 0010S 0730W 0055
CMC230691
APOLLO #18
BOULDER
LODE CLAIM
06 0010S 0730W 0056
CMC230692
APOLLO #19
BOULDER
LODE CLAIM
06 0010S 0730W 0057
CMC230693
APOLLO #20
BOULDER
LODE CLAIM
06 0010S 0730W 0058
CMC224379
APOLLO #21
BOULDER
LODE CLAIM
06 0010S 0730W 0059
CMC224380
APOLLO #22
BOULDER
LODE CLAIM
06 0010S 0730W 00510
CMC204780
BEAR #01
BOULDER
LODE CLAIM
06 0010S 0730W 00811
CMC204781
BEAR #02
BOULDER
LODE CLAIM
06 0010S 0730W 00812
CMC204782
BEAR #03
BOULDER
LODE CLAIM
06 0010S 0730W 00813
CMC204783
BEAR #04
BOULDER
LODE CLAIM
06 0010S 0730W 00814
CMC182017
BEAR #05
BOULDER
LODE CLAIM
06 0010S 0730W 00815
CMC201312
BEAR #06
BOULDER
LODE CLAIM
06 0010S 0730W 00816
CMC201313
BEAR #07
BOULDER
LODE CLAIM
06 0010S 0730W 00917
CMC204784
BEAR #08
BOULDER
LODE CLAIM
06 0010S 0730W 00918
CMC204785
BEAR #09
BOULDER
LODE CLAIM
06 0010S 0730W 00919
CMC204786
BEAR #10
BOULDER
LODE CLAIM
06 0010S 0730W 00920
CMC245167
BLACK BEAR #01
BOULDER
LODE CLAIM
06 0010S 0730W 00821
CMC245168
BLACK BEAR #02
BOULDER
LODE CLAIM
06 0010S 0730W 00822
CMC245169
BLACK BEAR #03
BOULDER
LODE CLAIM
06 0010S 0730W 00823
CMC245170
BLACK BEAR #04
BOULDER
LODE CLAIM
06 0010S 0730W 00824
CMC245171
BLACK BEAR #05
BOULDER
LODE CLAIM
06 0010S 0730W 00725
CMC245172
BLACK BEAR #06
BOULDER
LODE CLAIM
06 0010S 0730W 00726
CMC245173
BLACK BEAR #07
BOULDER
LODE CLAIM
06 0010S 0730W 00627
CMC245174
BLACK BEAR #08
BOULDER
LODE CLAIM
06 0010S 0730W 00628
CMC245175
BLACK BEAR #09
BOULDER
LODE CLAIM
06 0010S 0730W 00629
CMC245182
BLACK BEAR #16
BOULDER
LODE CLAIM
06 0010S 0730W 00630
CMC245183
BLACK BEAR #17
BOULDER
LODE CLAIM
06 0010S 0730W 00631
CMC245184
BLACK BEAR #18
BOULDER
LODE CLAIM
06 0010S 0730W 00532
CMC245185
BLACK BEAR #19
BOULDER
LODE CLAIM
06 0010S 0730W 00533
CMC245186
BLACK BEAR #20
BOULDER
LODE CLAIM
06 0010S 0730W 00534
CMC245187
BLACK BEAR #21
BOULDER
LODE CLAIM
06 0010S 0730W 00835
CMC245188
BLACK BEAR #22
BOULDER
LODE CLAIM
06 0010S 0730W 00836
CMC245189
BLACK BEAR #23
BOULDER
LODE CLAIM
06 0010S 0730W 00537
CMC245190
BLACK BEAR #24
BOULDER
LODE CLAIM
06 0010S 0730W 00538
CMC245191
BLACK BEAR #25
BOULDER
LODE CLAIM
06 0010S 0730W 00539
CMC245192
BLACK BEAR #26
BOULDER
LODE CLAIM
06 0010S 0730W 00540
CMC245193
BLACK BEAR #27
BOULDER
LODE CLAIM
06 0010S 0730W 00541
CMC245196
BLACK BEAR #30
BOULDER
LODE CLAIM
06 0010S 0730W 00542
CMC245197
BLACK BEAR #31
BOULDER
LODE CLAIM
06 0010S 0730W 00543
CMC245198
BLACK BEAR #33
BOULDER
LODE CLAIM
06 0010S 0730W 00544
CMC245199
BLACK BEAR #34
BOULDER
LODE CLAIM
06 0010S 0730W 00545
CMC245200
BLACK BEAR #35
BOULDER
LODE CLAIM
06 0010S 0730W 00546
CMC245201
BLACK BEAR #36
BOULDER
LODE CLAIM
06 0010S 0730W 00747
CMC245202
BLACK BEAR #37
BOULDER
LODE CLAIM
06 0010S 0730W 00748
CMC245203
BLACK BEAR #38
BOULDER
LODE CLAIM
06 0010S 0730W 00749
CMC245204
BLACK BEAR #39
BOULDER
LODE CLAIM
06 0010S 0730W 00750
CMC245205
BLACK BEAR #40
BOULDER
LODE CLAIM
06 0010S 0730W 00751
CMC245206
BLACK BEAR #41
BOULDER
LODE CLAIM
06 0010S 0730W 00752
CMC245207
BLACK BEAR #42
BOULDER
LODE CLAIM
06 0010S 0730W 00753
CMC246237
BLACK BEAR #49
BOULDER
LODE CLAIM
06 0010S 0730W 010


SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
2-14

NI 43-101 Technical Report on Resources





Exhibit 2-2: Consolidated Caribou-Unpatented Claims (continued)




Serial No
Claim Name/Number
County
Claim Type
Mr  Twn  Rng Sec54
CMC246238
BLACK BEAR #50
BOULDER
LODE CLAIM
06 0010S 0730W 01055
CMC246239
BLACK BEAR #51
BOULDER
LODE CLAIM
06 0010S 0730W 00956
CMC246240
BLACK BEAR #52
BOULDER
LODE CLAIM
06 0010S 0730W 00957
CMC246241
BLACK BEAR #53
BOULDER
LODE CLAIM
06 0010S 0730W 00958
CMC246242
BLACK BEAR #54
BOULDER
LODE CLAIM
06 0010S 0730W 00959
CMC246256
BLACK BEAR #68
BOULDER
LODE CLAIM
06 0010S 0730W 00460
CMC246257
BLACK BEAR #69
BOULDER
LODE CLAIM
06 0010S 0730W 00461
CMC246258
BLACK BEAR #70
BOULDER
LODE CLAIM
06 0010S 0730W 00462
CMC246259
BLACK BEAR #71
BOULDER
LODE CLAIM
06 0010S 0730W 00463
CMC246260
BLACK BEAR #72
BOULDER
LODE CLAIM
06 0010S 0730W 00564
CMC246261
BLACK BEAR #73
BOULDER
LODE CLAIM
06 0010S 0730W 00565
CMC246262
BLACK BEAR #74
BOULDER
LODE CLAIM
06 0010S 0730W 00566
CMC246263
BLACK BEAR #75
BOULDER
LODE CLAIM
06 0010S 0730W 00567
CMC246264
BLACK BEAR #76
BOULDER
LODE CLAIM
06 0010S 0730W 00568
CMC246265
BLACK BEAR #77
BOULDER
LODE CLAIM
06 0010S 0730W 00569
CMC246266
BLACK BEAR #79
BOULDER
LODE CLAIM
06 0010S 0730W 00570
CMC246267
BLACK BEAR #81
BOULDER
LODE CLAIM
06 0010S 0730W 00471
CMC246268
BLACK BEAR #82
BOULDER
LODE CLAIM
06 0010S 0730W 00472
CMC246269
BLACK BEAR #83
BOULDER
LODE CLAIM
06 0010S 0730W 00473
CMC246270
BLACK BEAR #84
BOULDER
LODE CLAIM
06 0010S 0730W 00474
CMC246271
BLACK BEAR #85
BOULDER
LODE CLAIM
06 0010S 0730W 00475
CMC246272
BLACK BEAR #86
BOULDER
LODE CLAIM
06 0010S 0730W 00476
CMC246273
BLACK BEAR #87
BOULDER
LODE CLAIM
06 0010S 0730W 00477
CMC246274
BLACK BEAR #88
BOULDER
LODE CLAIM
06 0010S 0730W 00378
CMC204763
GRIZZLY BEAR #01
BOULDER
LODE CLAIM
06 0010S 0730W 00979
CMC204764
GRIZZLY BEAR #02
BOULDER
LODE CLAIM
06 0010S 0730W 00980
CMC204765
GRIZZLY BEAR #03
BOULDER
LODE CLAIM
06 0010S 0730W 00981
CMC204766
GRIZZLY BEAR #04
BOULDER
LODE CLAIM
06 0010S 0730W 00982
CMC204767
GRIZZLY BEAR #05
BOULDER
LODE CLAIM
06 0010S 0730W 00983
CMC204768
GRIZZLY BEAR #06
BOULDER
LODE CLAIM
06 0010S 0730W 00984
CMC204769
GRIZZLY BEAR #07
BOULDER
LODE CLAIM
06 0010S 0730W 00985
CMC204770
GRIZZLY BEAR #08
BOULDER
LODE CLAIM
06 0010S 0730W 00986
CMC204771
GRIZZLY BEAR #09
BOULDER
LODE CLAIM
06 0010S 0730W 00987
CMC204772
GRIZZLY BEAR #10
BOULDER
LODE CLAIM
06 0010S 0730W 00988
CMC204773
GRIZZLY BEAR #11
BOULDER
LODE CLAIM
06 0010S 0730W 00989
CMC204774
GRIZZLY BEAR #12
BOULDER
LODE CLAIM
06 0010S 0730W 00990
CMC204775
GRIZZLY BEAR #13
BOULDER
LODE CLAIM
06 0010S 0730W 01091
CMC204776
GRIZZLY BEAR #14
BOULDER
LODE CLAIM
06 0010S 0730W 01092
CMC204777
GRIZZLY BEAR #15
BOULDER
LODE CLAIM
06 0010S 0730W 01093
CMC204778
GRIZZLY BEAR #16
BOULDER
LODE CLAIM
06 0010S 0730W 00994
CMC204779
GRIZZLY BEAR #17
BOULDER
LODE CLAIM
06 0010S 0730W 00995
CMC227600
GRIZZLY BEAR #18
BOULDER
LODE CLAIM
06 0010S 0730W 00896
CMC227601
GRIZZLY BEAR #19
BOULDER
LODE CLAIM
06 0010S 0730W 00897
CMC252768
KODIAK BEAR NO 1-RELOC
BOULDER
LODE CLAIM
06 0010S 0730W 00498
CMC252495
KODIAK BEAR NO 2
BOULDER
LODE CLAIM
06 0010S 0730W 00499
CMC252496
KODIAK BEAR NO 3
BOULDER
LODE CLAIM
06 0010S 0730W 004100
CMC252497
KODIAK BEAR NO 4
BOULDER
LODE CLAIM
06 0010S 0730W 004101
CMC252498
KODIAK BEAR NO 5
BOULDER
LODE CLAIM
06 0010S 0730W 004102
CMC231003
PANDORA
BOULDER
LODE CLAIM
06 0010S 0730W 005103
CMC231004
PANDORA NO 2
BOULDER
LODE CLAIM
06 0010S 0730W 005104
CMC231005
PANDORA NO 3
BOULDER
LODE CLAIM
06 0010S 0730W 005105
CMC204787
PLEASANT VIEW
BOULDER
LODE CLAIM
06 0010S 0730W 009




SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
3-1

NI 43-101 Technical Report on Resources




3
Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 7)




3.1
Topography, Elevation and Vegetation




The Project is situated within the Front Range of the Southern Rocky Mountains.  Topography is characterized by gentle to moderately sloped hillsides at elevations ranging from 9,000ft (2,743m) to 10,500ft (3,200m) above sea level.  The hills and ridges are covered mainly by residual soil and glacial till, which is drained by gentle to deeply incised creeks.  Outcrop is generally rare, perhaps 5% or less over the entire property.




Vegetation is typical of the Front Range, varying locally between heavy forest and mountain meadows.  The north facing slopes are densely wooded with Lodgepole Pine, Engleman Spruce and Douglas fir.  The low-lying areas are forested with Quaking Aspen, Western Willow and Red Alder.  South facing slopes are lightly wooded with Ponderosa Pine, Lodgepole Pine, Rocky Mountain Juniper and Quaking Aspen (Turnburke 2007).




The Project portal and auxiliary buildings are located on the south side of a moderately steep valley formed by Coon Track Creek.  This drainage separates Caribou Hill to the west and Boulder County Hill to the east.  Local relief as measured from the hilltops to the valley floor is approximately 500ft (152m).




3.2
Climate and Length of Operating Season




The Project has a mountainous continental climate typified by frequent change.  Average minimum winter temperatures are 20°F to 30°F (-7°C to -1°C) and maximum summer temperatures are 65oF to 75°F (18°C to 24°C).  Annual precipitation averages 18in (381mm) of rain and 139in (3,531mm) of snow.  April and May have the most precipitation; summers are generally dry with brief but intense thunderstorms.  (Turnburke, 2007)




The surface exploration season begins in early May and continues through late November.  Underground work can continue year around.




3.3
Physiography




Colorado is divided into two major geographical regions: the Eastern Plains, and the Rocky Mountains.  The Project is located along the eastern flank of the Front Range of the Southern Rocky Mountains with an average elevation of 9,500ft (2,896m) above sea level.  The topography of the mine site is fairly gentle however, many of the surrounding mountains are steep and rugged.  Similarly, many of the nearby drainages are deeply incised.  In general, the local geomorphology is controlled by east-west trending spur ridges separated by drainage valleys.  A large bench called Caribou Flat is located approximately 1mi southwest of the mine.  This area covers nearly 1mi2(2.6km2).




3.4
Access to Property




The Property is approximately 35 minutes from the city of Boulder, to the town of Nederland along Colorado State Highway 119.  The road access from Nederland to the Project is about 15 minutes, over 4.7mi (7.6km) of County Road 128.  The Project has year around access.  The Project site is adjacent to the county road.


SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
3-2

NI 43-101 Technical Report on Resources




3.5
Surface Rights




Most of the claims which constitute the Project property are patented private property owned 100% by Calais.




3.6
Local Resources and Infrastructure




The town of Nederland, Colorado (population 1,562) provides basic hotel, restaurant, and shopping facilities.




3.6.1  Access Road and Transportation




Nederland is easily accessible, and is located 62mi (100km) from Denver International Airport on US Interstate and State Highways.  From Nederland, County Road 128 is a two lane all season gravel road capable of handling heavy truck traffic.




The Denver and Rio Grande Railroad runs through Rollinsville, Colorado approximately 3mi (4.8km) south of Nederland.




3.6.2  Power Supply




Electrical power to the mine is furnished by the Public Service Company Colorado via a 25kV, 3MW, 3-phase AC overhead line from Nederland.  Current power delivery at the site is three phase 480V, 300kVA capacity.




3.6.3  Water Supply




Potable water is provided by a 275ft (84m) deep well drilled in front of the shop building.  Calais also owns a 75% of one share of the historic Farmer’s Ditch Company.  The water is adjudicated to the Project.  Calais also has other water rights available for lease.  The portal discharges a small amount, which by Colorado law is considered to be an unregulated use of water unless it is put to beneficial use in which case, a water right must be obtained.




3.6.4  Buildings & Ancillary Facilities




There are several buildings located on the Property.  At the Cross Mine portal, a shop building incorporates an office, small warehouse, a one bay repair shop and a small mine dry housing safety equipment.  A large warehouse building is located near the portal, which provides storage for drill core, the main mine air compressor and various larger mining supplies.  At the Caribou site there is a large 2-story structure housing a shop, offices, dry and parts storage.  At the Comstock site, there is a hoist building and a large metal warehouse.  There is also a headframe at the Comstock mine.  These buildings are in good condition.  Two small cabins are also located nearby but these buildings are currently not in use.




3.6.5  Tailings Storage Area




There are no tailings on the mine property.




3.6.6  Waste Disposal Area




Most of the underground development waste rock has been used to create valley fill platforms, which provide level surface for the mine facilities.  There are no specific mine waste dumps located on the mine property – Caribou does have a large waste rock area.  Historically, waste rock was used by Boulder County in their road maintenance operations.  Boulder County and the





SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
3-3

NI 43-101 Technical Report on Resources








USFS have expressed interest in using future waste rock from the Project for future County road improvement projects.




Since the mine claims are located on private property and the topography is favorable, continued valley fill waste can be used to accommodate future underground development material allowing sufficient buffer zones to nearby drainages.  The recently revised Boulder County permit allows the storage of the waste rock on the site.




3.6.7  Manpower




Due to the Project’s close proximity to several major population bases, there should be no problems securing sufficient work force.  Housing is readily available in Nederland, Boulder and other small communities throughout the area.
















SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
4-1

NI 43-101 Technical Report on Resources




4
History(Item 8)




4.1
Ownership




The Project property has a 135-year history of ownership.  The mine was first discovered and developed by C.M. Carol in about 1876 during the silver boom at the nearby Caribou Mine and was reported to have been worked until about 1886.




In 1890, George Teal, a prominent Colorado mining man, hired Ernest LeNeve Forester, to reopen the mine.  This was designed to be a test-mining program over a two-month period to evaluate the potential profitability.  At this time, the property consisted of one patented claim, the Cross Survey #518(Foster and Carrol 1890).




The next period of mine ownership began in 1918 when Teal partnered with Todd Dofflemyer, purchased the property and founded the Cross Gold Mining Company.  By 1937, the property included three patented claims, three unpatented claims and one mill site claim (Teal 1937).  By 1939, the property had grown to include 11-patented claims, two unpatented claims and two mill site claims (Burlingame 1939).  A reported disagreement between Teal and Dofflemyer forced the closure of the mine in late 1939.




The mine remained inactive and flooded until 1974 when Thomas Hendricks obtained a long-term mining lease from the Dofflemyer family, which included a 10% NSR.  Hendricks then entered a joint venture agreement with Columbine Minerals of Denver Co. who funded the dewatering and rehabilitation of the mine (Hendricks 1998).




In 1983, Hendricks entered into a joint venture agreement with Power Petroleum, a Canadian registered company, but could not re-open operations due to the prohibitively high Dofflemyer royalty.  Hendricks and Power Petroleum, therefore chose to place the mine on care and maintenance.  The Project remained on care and maintenance until 1986 when Hendricks entered into joint venture agreement with East West Minerals of Sidney, Australia.




During the East West partnership, the Dofflemyer family agreed to sell their ownership and their 10% NSR for US$750,000.  All of these claims were then subject to a 5% NSR royalty, if the price of gold were to exceed US$800/oz-Au and payable to Tusco (Barrett and Schuiling 1988).




By May of 1989, East West Minerals had lost a significant investment in an unrelated property and was forced to withdraw from the joint venture.  Additionally, Power Petroleum’s interest was purchased for US$200,000 and the Columbine Minerals 5% NSR was purchased for US$122,000.  Once East West pulled out Hendricks purchased their entire interest in the Project.




Over the next several years Hendricks’s partnered with several others and focused primarily on continued exploration and resource development.  By 1997, Hendricks entered an option  agreement with Calais for an earned ownership of the Project, and in 1998, Calais completed its full acquisition of the Project.




4.2
Past Exploration and Development




4.2.1  Cross Project




The Cross Project has experienced three major phases of underground development followed by an extended period of exploration drilling.


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Calais Resources Inc.

Consolidated Caribou Project
4-2

NI 43-101 Technical Report on Resources




The first phase occurred during the initial discovery and subsequent mine development from about 1876 to 1886.  The mine development during this period is described as a shaft 140ft (43m) deep with sublevels at -50ft (15m) and -100ft (30m) all located within the Cross Vein.  The -100ft (30m) level was connected to surface by a 200ft (61m) cross cut.  The ore recovered during this mining phase is believed to have been toll processed at a nearby stamp mill, which serviced several other small mines active in the area.




A second major phase of mine development occurred between 1933 to 1939 under the ownership of the Cross Gold Mining Company.  During this period, development included an 850ft (259m) crosscut, a winze 235ft (72m) long and development on the -75ft (23m) level, the -150ft (46m) level and the -225ft (69m) level.  The Cross Gold Mining Company had developed within the Cross, Crown Point and Rare Metals Veins and mentioned underground exploration to intersect the Romeo Vein.  At this time, all mine work had focused mainly on ore development and very little actual mining had been conducted.  No mill existed on the site and development ore was shipped to the ASARCO smelter in Leadville, Colorado.




The third era began in June of 1973 and continued to 1983.  This work was focused primarily on mining of known veins as well as the development of newly discovered veins.  Several new veins were developed including the East and West Romeo Veins where much of the production was focused.  Ore was trucked to the former Allied Flourspar Mill in Boulder Co. that had been retrofitted to produce a flotation concentrate.  The precious metal concentrate was shipped to the smelters of Cominco at Trail B.C, and ASARCO smelters in East Helena, Montana and El Paso Texas.  Burdened by a 15% NSR and declining gold prices, mining was suspended in 1986.




In 1983 a new phase of exploration work began which included extensive underground sampling and drilling.  The drilling was conducted both underground and on surface.  The underground targets were the deeper and lateral extensions of the known veins and the surface targets were down dip projections of outcrop exposures and lateral continuations of known veins.




In 1988, an underground development program was begun on the newly discovered Apache Vein.  A cross cut was driven on the portal level northwest from the western end of the Rare Metals vein for 100ft (30m) where it intersected the Apache Vein.  Drifting on the Apache vein continued to the west for approximately 150ft (46m).  Within this distance three raises and one sublevel were also driven.  In 1993, the underground drifting and sampling program was reinitiated along the Apache and North Apache Veins at the portal level.  Approximately 800ft (244m) of drifts, raises and sublevels were completed.  This further expanded the known mineralization along the Apache Vein and confirmed the width and grade of the North Apache Vein.




Between late 1982 and 1998 a total of 116 drillholes were completed totaling 62,384ft (19,015m).  This entire drill core remains on site.  It is stored in weatherproof buildings, is neatly organized and stacked on heavy duty core racks.  The core boxes are in excellent condition, well labeled and easily accessible.




Currently, the Cross Project has been developed on four main levels and ten additional sub-levels (Figure 4-1).  The primary underground access is from a portal, which services a winze accessing all the lower levels.  All levels are outfitted by rail track.  The first level at the winze is the 9,693ft (2,954m) elevation and daylights to the portal.  This level has approximately 2,700ft 823m) of drifting which access the Rare Metals, Cross, Crown Point, West Romeo, Apache and North Apache Veins.  The second level at the winze is the 9,637ft (2,937m) elevation.  This level


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August 29, 2011





Calais Resources Inc.

Consolidated Caribou Project
4-3

NI 43-101 Technical Report on Resources





has approximately 1,150ft (350m) of drifting which accesses the Rare Metals, North Rare Metals, Cross, Crown Point and West Romeo Veins.  The third level at the winze is the 9,575ft (2,918m) elevation.  The level has approximately 750ft (229m) of development drifting which accesses the Rare Metals, Cross, Crown Point and West Romeo Veins.  The fourth level at the winze is the 9,509ft (2,898m) elevation.  This level has approximately 740ft (226m) of drifting which accesses the Rare Metals, Cross, Crown Point, East Romeo and Hopewell Veins.  All total there are currently 5,340ft (1,628m) of drift development, approximately 52 raises and at least 12 stopes.  The underground workings were surveyed and well documented during 1988 and this information was carefully drafted on 1:20 scale level plans.  The underground was last accessible during the 1990 drilling program.  By 1993 it was flooded to the portal level as it remains today.




4.2.2  Caribou Project




Between 1980 and 1984 a new surface facility was constructed at the portal of the Idaho Tunnel.  The Idaho Tunnel, which is the 500ft (152m)–level of the Caribou was re-opened and re-equipped over a 4,000ft (1,219m) length to the Caribou shaft.  Included in this installation was a 4.16kV underground distribution system, including 2 substations.




The Caribou shaft was dewatered and rebuilt to the 1230ft (375m)-level.  Core drilling occurred on the 500 (152m)-level and the 1230m (375m)-level.  The Company also performed geologic mapping and sampling during this time.  Two tunnels were also driven on 500 (152m)-level, one to crosscut the North Poorman vein and the other to crosscut the Golconda vein.  However, development to the Golconda vein ended approximately 85ft (26m) from the vein.




4.3
Historic Mineral Resource and Reserve Estimates




Historic resource and reserve estimates were first reported during the 1930s and have continued to evolve to through the late 1990s.  Burlingame (1939) compiled the earliest documentation of the reserve development work at the Cross Mine.  At that time, the mine had been developed down to the fourth level and the Cross, Crown Point and Rare Metals Veins had been exposed by drifting.  Sampling was reportedly conducted along all drifts within the first through third levels and along all raises within the veins.  The typical sample spacing was at 10ft (3m) intervals and only gold and silver values were used to assign economic value.  The results of the work are listed in Table 4.3.1 (Burlingame 1939).




The next resource estimation for the Cross Mine was compiled in 1988.  At this time, further development work had been completed on all four levels of the mine, several new raises were driven and several new veins had been discovered.  In addition, approximately 6,000ft (1,829m) of drilling was completed from both surface and underground.  The underground development was all tested by continuous channel samples typically spaced on 10ft-15ft (3.0m-4.6m) intervals.  Drillholes were sampled in the areas of obvious alteration or veining.  The resource estimation was compiled using polygonal estimation techniques within long sections.  The tonnage factor used was 12ft3/st (2.7t/m3).  The resource estimate was classified as material that could potentially be recovered by open pit and underground mining methods.  The results of this work are listed in Table 4.3.1 (Barrett and Schuiling 1988).




In 1990, the Cross Mine’s resource estimate was updated to incorporate the results from ten new drill holes which had tested the deeper extensions of previously known veins below the fourth level.  All of the data and procedures employed during 1988 were used for this estimate.  This resource was slightly more sophisticated in that in employed better reconciliation in three





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dimensions using regularly spaced cross sections and level plans.  The results of this work is listed below in Table 4.3.1 (Barrett 1990).




In 1998, the Cross Mine’s resource estimate was again updated to incorporate the results of underground development and drilling conducted since the 1990 estimation.  The major changes were the addition of the newly discovered Apache Vein and the extension of the Potosi Vein.  Both located west of the main mine development.  The deep resources within some previously estimated veins were re-estimated at this time using similar methods as previously and quite liberal projection distances between widely spaced drillholes.  The veins and zones which were not recalculated at this time, were slightly modified from Barrett and Schuiling’s (1988), and Barrett’s 1990 original estimations and included in the 1998 report.  The results of this work is listed in Table 4.3.1 (Akright 1998).




Pincock, Allen and Holt (PAH) were retained in 1998 by Calais to review the resource estimations of the Cross Mine completed by Akright (1998).  They too, created a polygonal resource based on long section projections of the only the veins which had been estimated by Akright.  They also presented the additional resources originally estimated by Barrett and Schuiling (1988), and Barrett (1990).  The result of this work is listed in Table 4.3.1 (Stevens 1998).




Note that methodologies employed during the historical resource estimations for the Project and the subsequent results are not NI 43-101 compliant, they are classified at the authors discretion and do not meet current CIM classification standards.  They are not reported by any cutoff guidelines, and are only described herein for a historical recounting of the deposit.




Table 4.3.1:  Historical Mineral Resource and Reserve Estimates




Year
Source
Mining method/ Resource Category
st
AuEq*

Grade oz/st
Au

Value/oz
Ag

Value/oz1939
Burlingame
Underground/ Proven & Probable
15,000
0.397*
$35
$0.711988
Barrett and Schuiling
Open Pit/ Indicated & Inferred
273,000
0.149
$450
$6.501988
Barrett and Schuiling
Underground/ Indicated & Inferred
250,000
0.323
$450
$6.501990
Barrett
Open Pit/ Indicated & Inferred
314,976
0.212
$450
$6.501990
Barrett
Underground/ Indicated & Inferred
215,978
0.390
$450
$6.501998
Akright
Underground/ Measured
165,138
0.420
$350
$5.501998
Akright/Barrett
Underground/ Indicated
36,762
0.384
$350
$5.501998
Akright/Barrett
Open Pit/ Indicated
274,052
0.153
$350
$5.501998
Akright
Underground/ Measured
125,850
0.445
$350
$5.501998
Stevens
Underground/ Measured
166,135
0.541
$350
$5.501998
Stevens
Underground/ Measured
125,850
0.556
$350
$5.50


* Au Equivalent calculated from listed Au and Ag dollar values






4.4
Historic Production




4.4.1  Cross Mine




Historic production from the Cross Mine has occurred during two development/mining phases.  During the mid to late 1930’s the Cross Minet experienced a sustained period of mainly development work.  At this time, the main crosscut, winze and four levels of drifting were completed.  A minor amount of stoping is noted in the literature but there are no records of actual production.  The historical records note the lack of a mill on site however, no reference of toll milling from nearby facilities is indicated.


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During the period of 1973 to 1990 the Cross Mine was reopened and retrofit for small scale production.  The earliest production occurred in 1976 the when mine was producing about 10stpd (9tpd), by 1980 a production rate of 80stpd (73tpd) had been achieved and the mine employed 11 workers.  The ore was being trucked to the former Allied Flourspar Mill in Boulder Co., which had been retrofit to produce a flotation concentrate.  The precious metal concentrate was shipped to the smelters of Cominco at Trail B.C, and ASARCO smelters in East Helena, Montana and El Paso Texas.




This production was primarily from within the Cross, Crown Point, East Romeo, West Romeo, Juliet and Rare Metals Veins.  Hendricks Mining Co (1991) reports that total production between 1977 and 1986 was in the order of 27,000st (24,500t).  During that period, the mine is reported to have produced 5,000oz of gold, 125,000oz of silver and several hundred thousand pounds of lead and zinc (Barrett and Schuiling 1988)  Burdened by a 15% NSR and gold prices which had declined from US$600/oz to US$400/oz by 1983, the mining was suspended.




4.4.2  Caribou Mine




Historic production at the Caribou Mine commenced in 1869 and continued uninterrupted until the War Closure Act of 1940.  Operations resumed in 1945 and continued until 1955 when the owner closed the mine.  Concentrate was shipped to the Caribou Consolidated smelter in Nederland until 1919, when the smelter burned down.  Subsequent production was shipped to the ASARCO smelter in Leadville, Colorado.




Over the history of operations, the Caribou Mine veins produced 20Moz of silver, and a substantial amount of gold.  A total of 31 veins were mined.











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Figure 4-1:  3-D View of the Cross Underground Development







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5
Geological Setting (Item 9)




5.1
Regional Geology




This portion of Colorado is underlain by Precambrian basement rocks comprising the North American Craton, which has been intruded by Late Cretaceous igneous units.  The basement rocks experienced several periods of Precambrian deformation ranging from deep, ductile to more shallow brittle features.  Deeply rooted structural zones within the Precambrian rocks are linked to the development of the much younger Colorado Mineral Belt (CMB).  This belt consists of a northeast-southwest regional trend of mineralization and ore deposits that is approximately 250mi (402km) long and 80mi (129km) wide.




The oldest rocks in the area are the Idaho Springs Gneiss and the Swandyke Hornblende Gneiss.  The Idaho Springs Gneiss is dated by a peak metamorphic event at 1.775-1.700Ga (Finiol 1992, Hedge et al 1967).  This unit varies from banded quartz biotite gneiss to well foliated quartz biotite sillimanite schist, each of these contain abundant migmatites.  The Swandyke Hornblende Gneiss is believed to be contemporaneous or slightly younger than the Idaho Springs Gneiss (Finiol 1992).  This unit consists of interlayered amphibolites, calc-silicates and schists.  These rocks were likely formed during the Middle Proterozoic when the Mojave and Yavapai provinces were accreted onto the Wyoming Archean Province.  This event was followed by the development of the igneous rocks comprising the Boulder Batholith dated at 1.65-1.73Ga.  The batholith consists primarily of granodiorite but ranges between gabbro and granite.  These may have been intruded syn-kinematic to the metamorphism as witness by concordant contacts with the older units (Hedge et al 1967).  The youngest Precambrian units in the area are the Silver Plume Batholith.  This unit is dated at 1.35-1.48Ga, and consists of unfoliated granites and quartz monzonites with contacts discordant to the surrounding rocks.




The regional Precambrian history has played an important role in the subsequent development of the CMB.  Tewto and Sims (1963) believe that the CMB follows an ancient zone of weakness defined by NE trending shear zones of Precambrian age.  In many places, this major shear is flanked by smaller en echelon structures.  Movement originated along these structures at about 1.4Ga and has continued throughout the history of the Precambrian rocks present (Wilson and Sims 2003).  The early deformation involved ductile shearing accompanying regional folding and development of a pervasive anisotropy that was reactivated later in the Precambrian during a more brittle movement phase.




The Paleozoic history of the region is dominated by the development of a passive margin forming the western boundary of the North American Craton.  During much of this time, the highlands of the area were eroded, transporting sediment westward and depositing it at the eastern limit of the Colorado Plateau sedimentary sequence.  During the late Devonian, the Antler Arc collided with the western North American margin creating a back arc marine basin.  As this deformation proceeded eastward, the Uncompahgre Uplift and the Ancestral Rocky Mountains were creating during the late Pennsylvanian.  The area remained relatively stable until the Late Cretaceous when the onset of the Laramide Orogeny began, the origin of which remains debatable.  A popular theory is that the subduction of the Farallon plate changed to a very shallow angle displacing the active zone eastward to the deeply rooted Ancestral Rocky Mountains where uplift and pluton development occurred (Blakey 1997).  It was at this time, when the deeply rooted Precambrian shear zones became crucial to the development of the





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CMB.  These structures focused the intrusive plutons; they channeled mineralization fluids and formed zones of structural weakness, which were again reactivated to develop zones of dilation and vein deposition.  Magmatism within the CMB occurred during two main phases, the earliest and most extensive from about 70-60Ma and a later more localized event between 57-42Ma (Gable 1984).  In the earlier phase, intrusive activity occurred throughout the entire length of the CMB.  In the later phase intrusive activity was limited to the central and northeast parts.  The intrusive rocks are comprised of a bimodal compositional range.  Calc-alkaline intrusive units occur throughout the belt but are concentrated in the central part.  In contrast, alkaline intrusives typically occur near the northeast and southwest terminations of the belt.  In this area, the igneous intrusive rocks associated with Laramide activity consist primarily of the Caribou Stock.  This unit has a monzonite to quartz monzonite composition.




5.2
Local Geology




The Project lies near the northeast limit of the CMB.  It is hosted within the Precambrian Idaho Springs Gneiss and the Late Cretaceous Caribou Monzonite.  The local geology of the Project is very well documented in a Masters Research thesis by Kerry Holland (1994).  Much of the following text is derived from this thesis.




5.2.1  Local Lithology




In the vicinity of the Mine area, there are four common rock types.  These include: the Precambrian age, Idaho Springs Gneiss, Boulder Creek Granodiorite and Swandyke Hornblende Gneiss; and the Tertiary age, Caribou Monzonite (Figure 5-1).




The Idaho Springs Gneiss consists of a well-foliated and banded gneiss composed of medium to coarse grained quartz-biotite-plagioclase-orthoclase with accessory magnetite and apatite.  The unit has a zebra appearance due to the differentiation of biotite within the lithic banding.  Granite migmatites comprise nearly one-half of its total volume.  The migmatite consists of coarse grained, fairly planar bodies which are predominantly parallel foliation but also clearly cross cut it.  Mica rich schist units also occur within the gneiss, hosting sillimanite that attests to the high peak metamorphic grade the unit has experienced.




The Swandyke Hornblende Gneiss consists of a dark gray to black, medium to fine grained, well-foliated amphibolite unit.  It is composed primarily of hornblende and plagioclase with lesser pyroxene, biotite and quartz.  The unit occurs in two relatively continuous bodies located south of the mine and likely represents small, localized mafic intrusions that were subsequently metamorphosed in the Precambrian.




The Boulder Creek Granodiorite consist of a weakly foliated paleo-igneous unit.  It is composed of fine to medium-grained quartz-K-spar-plagioclase-biotite and minor hornblende.  It is differentiated from the gneiss mainly by the lack of conspicuous banding, but does have well developed foliation near its contacts.




The Caribou Stock is extremely variable in composition.  It consists predominantly of monzonite and quartz-monzonite but also ranges to dioritic and gabbroic phases.  The monzonite phases are composed of medium-grained plagioclase-orthoclase-quartz-biotite-clinopyroxene-hornblende with accessory magnetite and apatite, giving the unit a black color.  The stock has been dated at 62.6Ma placing it within the older phases of CMB igneous activity (Marvin et al 1974).


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5.2.2  Alteration




Alteration has been subdivided into five types (Holland 1994).  These include from oldest to youngest; the muscovite-sericite-phengite-chlorite type (MSCP), adularia type, carbonate type, muscovite-sericite-phengite-chlorite-adularia-ankerite type (MSPCAA) and the smectite-kaolinite type.




The earliest phase of MSCP alteration appears as a bleached clay rich, white to pale green envelope around veins.  It has an inner zone rich in muscovite-sericite-phengite and chlorite.  This passes outward into a predominantly chlorite rich zone.  The sericite-chlorite and phengite are very fine grained (<100μm) and commonly replace primary mafic minerals.  Muscovite is fine to medium grained becoming coarser grained outward from the veins.  The chlorite in the outer zone is also medium grained.




The adularia alteration overprints the MSCP and is associated with specular hematite and secondary quartz.  It is distinguished by fine-grained adularia giving the rock a distinctive pink color.  The adularia alteration also shows a distinct zoning.  It has euhedral coarser grains associated with quartz close to the veins and passes into anhedral finer grains without quartz outward from the veins.




The carbonate alteration is closely associated with the slightly later MSPCAA alteration and macroscopically is very difficult to differentiate.  The mineralogy consists of rhombohedral carbonate grains mainly replacing quartz.




The MSPCAA alteration has similar texture to the MSCP alteration and may have formed during a continuous evolution of the proceeding types.  It clearly overprints the earlier MSCP.  The MSPCAA alteration also shows distinctive zonation outward from the veins, which is reflected by a color change from a bleached pale green color outward to a partially bleached gray color.  Adjacent to the veins, fresh orthoclase passes outward to a zone of secondary quartz and adularia.  This grades into a sericite-chlorite-phengite zone that replaces the orthoclase.  Further, outward, a zone of inter-grown muscovite and ankerite are replacing biotite which passes into to a zone of ankerite replacing hornblende, augite and some magnetite.




The smectite-kaolinite alteration appears as a light blue-green friable rock with abundant biotite.  It occurs primarily in the monzonite and only within zones that were not affected by the earlier alteration types.




The distribution of alteration is intimately associated with the host unit.  Within the Idaho Springs Gneiss, the alteration halos tend to be narrower, typically less than 6in adjacent to discrete veins and wider in stockwork zones.  The Caribou Monzonite hosts much larger alteration halos.  Here the width of the alteration is dependent on the width of the veins and its associated type of mineralization.  In general, the presence of adularia is intimately tied to the precious metal mineralization and potassium concentration can be used as a local and regional exploration tool.




5.2.3  Structure




The structural history of the Project has been long-lived and very complex.  The oldest deformational events are preserved within the Precambrian units and these have subsequently been overprinted by a rich history of deformation through the present day.


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The earliest preserved structures are the regional foliation and shear fabrics within the Idaho Springs Gneiss and along the contacts of the Boulder Creek Granodiorite.  These fabrics developed during regional Precambrian metamorphism, and have influenced all subsequent deformational events.  The regional foliation within the immediate Project area strikes predominantly northeast and dips steeply north-northwest.  The foliation does display a range of orientations that may be due to a later folding or due to deflection along steeply dipping shear zones.  Precambrian shear zones have not been mapped in the mine area but are believed to have exerted strong influence on the younger brittle structures that control fault and vein development (Francis 1987).




The younger, brittle structures present in the Project area consist predominantly of faults and veins, which cut all rock types.  These features host the mineralization and are believed to have formed both proceeding and during the emplacement of the precious and base metals.  In many cases, earlier faults were subsequently dilated and became veins and earlier veins have been overprinted by fault movement.  The faults and veins occur in two predominate orientations.  One set strikes east to east-southeast dipping vertical and the other set strikes north to north-northeast dipping steeply to the east and west.




The major faults structures appear to be oriented along an east-southeast strike and dip steeply north to vertical.  These structures locally cut the earlier metamorphic foliation but appear to tie into older deeply rooted shear zones (Holland 1994).  Holland (1994) noted the presence of six different kinematic indicators that indicated two episodes of fault movement.  The earliest was left lateral strike-slip movement along the east-west striking structures.  This was overprinted by right lateral strike-slip movement along minor east-northeast striking structures.  The Rare Metals Vein appears to represent a major east-west vertical fault structure that was subsequently dilated and filled by quartz veining.  This structure likely passes westward into the east-southeast striking, vertical dipping Apache, North Apache and Potosi Veins.




Vein formation was intimately linked to the faulting and nearly all of the known veins oriented parallel to the north-northeast fabric root into the east-west fault structures.  Underground mapping has shown that where the north-northeast striking veins intersect the east-west striking Rare Metals Vein the structures appear to merge within a zone of increased dilation.  This relation and the general orientation of the two structures suggest that the north-northeast striking veins have likely formed as an en echelon vein set related to left lateral movement along the east-west faults.




The north-northeast vein sets have two distinctive dip orientations.  Those in the western part of the mine area, namely the Romeo, Arapahoe and Veins dip steeply to the east.  In contrast, those in the eastern part of the mine area, namely the Crown Point, Cross and Hopewell dip steeply to the west.  Deep drilling below the fourth level has shown that these veins appear to merge downward into a “root zone”.




Holland (1994) proposed that the structures present at the Project tie into the regional Arapaho Pass Fault (APF) and the Junction Ranch Faults (JRF).  These are well-known Precambrian fault zones originally mapped by Lovering and Goddard (1950).  The APF is mapped along strike to the west where it disappears under glacial cover.  The JRF is also mapped along strike but to the southeast.  Geller (1993) proposed that these two structures were important in localizing the emplacement of the Caribou Monzonite.  Holland (1994) further refined this idea to suggest that left lateral movement on the structures created a dilatational fault jog between the two structures.


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This same model is then used to explain the presence of the large open space fill veins at the Project.






















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Figure 5-1:  Local Lithologies of the Project







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6
Deposit Type (Item 10)




6.1
Geological Model




The origin of mineralization at the Project has been explained by two different models.  These both involve hydrothermal processes but differ as to whether the deposit was formed within a predominantly mesothermal or epithermal environment.  Waldemar Lingren first subdivided the genetic processes of hydrothermal mineralization in 1933 as; epithermal, mesothermal and hypothermal.  This classification was used primarily to describe the depth of formation and the source of mineralizing fluids.




Epithermal deposits are generally believed to have developed by ascending fluids of igneous emanations.  They are typically formed at depths less than 3,300ft (1,006m) under low confining pressures with temperatures up to 300°C.  Veins are the most common host but disseminated mineralization also occurs.  Gold and silver are the most common ore minerals with silver typically more abundant than gold.  The gangue mineralogy is typically quartz and calcite, at depth adularia can occur.  Hydrothermal alteration is pronounced, with abundant silicification flanked by clay alteration (Panteleyev 1988).




Mesothermal deposits are generally believed to have developed deeper than epithermal deposits, generally between 4,000ft-12,000ft (1,219m-3,658m) below surface under higher pressures and at temperatures between 175°-300°C.  The source of fluids is believed to be prograde metamorphism and dewatering of deep crustal material.  They are characterized by gold greater than silver with associated base metals.  Gangue mineralogy consists of crystalline white quartz commonly with ankerite.  Fuchsite alteration is also common especially within more basic host units.  Pyrite and or pyrrhotite can also be present.




Earlier workers in the Project area focused their attention to the Caribou Mine located approximately 3,500ft (1,067m) northwest but at similar depths.  Miller (1983) conducted an extensive study of polished sections and concluded that the typical mineral assemblage represented a low temperature Pb-Ag mesothermal event.  Francis (1987) also studied the mineralization at the Caribou mine and noted that fluid inclusion data provided a poor fit to a typical epithermal deposit but did not confirm the previously proposed mesothermal origin.




Barrett and Schuiling (1988) spent several years logging core and mapping the underground at the Project.  This work was incorporated into their understanding of the deposit while working towards a model of mineralization to be used to further their exploration efforts.  They rejected the epithermal origin has proposed by Dentler and Jansen, in favor of a mesothermal model.  They cited four factors, which support the mesothermal origin.  These included simple ore mineralogy, insignificant metal zonation, minor presence of adularia and ubiquitous k-spar-sericite- chlorite alteration.




The most recent geochemical and mineralogical study of the Project was conducted by Holland (1994).  Although considerable work was done detailing the sequence and styles of mineralization and alteration, a genetic model of mineralization was not proposed, only that mineralization had occurred by hypogene processes, basically indicating that either epithermal or mesothermal processes could be involved.




Based on the work specific on the Project, the majority of researchers have favored an epithermal origin of the mineralization.  It is obvious that the characteristics of both epithermal and


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mesothermal environments are present here.  However, the observations by Barrett and Schuiling and Holland’s noted presence of an ankerite alteration component do support the mesothermal environments.  It is certainly possible that the deposits in this area are located at the transition depth between mesothermal and epithermal environments.





















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7
Mineralization (Item 11)




7.1
Mineralized Zones




Individual veins range in width from inches to tens of feet and consist of open space fill zones containing quartz and disseminated sulfides flanked by mineralized and non-mineralized alteration zones.  Overall, the mineralization has an average width of 5ft (1.5m).  Altered host rocks within and adjacent to veins show more limited sulfide mineralization due to a lesser amount of rock fracturing and open space fill.  Precious metals grades in the Project typically run 0.05-1.0oz/st-Au (1.7-34.3g/t-Au) and 0.2-30.0oz/st-Ag (6.8-1,029g/t-Ag).  Weathering has partially oxidized sulfide minerals to all depths tested to date.  The veins are distributed within two main sets, those that strike predominately east-west and those striking north-northeast.  Table 7.1.1 lists the known veins of the Cross Mine, their approximate known dimensions and how they have been tested.




Table 7.1.1:  Cross Mine Veins




Name
Strike

Azimuth
Dip
Average Strike

Length (ft)
Average Dip

Length (ft)
Tested byRare Metals
80
-90
400
800
Drifting and drillingAnaconda
45
-65
900
600
Shaft and drillingNorth Rare Metals (Copper Seam)
83
-90
250
100
Drifting and drillingApache
114
-90
850
600
Drifting and drillingNorth Apache
108
-90
600
450
Drifting and drillingPotosi
114
-90
600
150
DrillingJuliet
26
-90
125
400
DrillingWest Romeo
21
-85E
135
500
Drifting and drillingEast Romeo
20
-85E
160
375
Drifting and drillingArapaho
20
-90
115
300
DrillingCrown Point
23
-85W
175
500
Drifting and drillingCrown Cross
18
-65W
120
85
DrillingCross
15
-55W
175
285
Drifting and drillingWest Hopewell
16
-80W
165
285
DrillingEast Hopewell
12
-78W
160
300
Drilling




7.2
Surrounding Rock Types




The rock types surrounding the mineralized veins are the Idaho Springs Gneiss and the Caribou Monzonite Stock.  The contact between these two units strikes northwest-southeast through the mine area dipping near vertical.  The majority of the major veins within the area historically mined occur within the Idaho Springs Gneiss.  The north-northeast striking set appears to thin or pinch out to the southwest where they cross the lithic contact into the Caribou Monzonite.  In contrast, the east-west striking veins located west of the historic mine area do not decrease in magnitude where they cross into the monzonite.  As proposed above, the north-northeast striking vein sets appear to be largely dilatational structures.  The fact that they are more prevalent within the gneiss could largely be due to the fact that this unit had a pre-existing metamorphic fabric which is semi parallel to the veins and has provided natural planes of weakness during the dilation.  In contrast, the monzonite has a more equigranular crystalline texture lacking mica that resulted in a much more competent unit.  Also as noted above, the east-west striking set of veins appear to be localized along earlier fault structures.  In this case, the fault planes clearly have


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crosscut the metamorphic fabric and appear to have been dominated to the point where lithologic competence was not a factor that limited their development.




7.3
Relevant Geological Controls




The dominant controls on gold, silver, lead and zinc mineralization at the Project are structural channeling along dilatational fault and vein planes within an environment chemically favorable for the precipitation of electrum and base metal sulfides.  Deep-seated regional structures appear to have been active at the time of mineralization and have played a vital role in the structural preparation of the host rocks and channeling of the mineralizing fluids.  The fluids and their contained metals are believed to have been derived either from a deeper magmatic source rock or from deep metamorphic processes associated with the Laramide Orogeny.




7.4
Type, Character and Distribution of Mineralization




Holland (1994) conducted an extensive study of the paragenesis of mineralization at the Cross Mine identifying seven distinct stages.  These include:




·
Fine grained quartz-pyrite ±molybdenite;


·
Medium to coarse grained quartz-pyrite ± sericite-hematite-sphalerite-galena;


·
Carbonate stage calcite and dolomite;


·
Main base and precious metal stage with sphalerite-galena-chalcopyrite-electrum-acanthite;


·
Sulfosalt stage with chalcopyrite-stromeyerite-tetrahedrite-tennantite-proustite-pyrargyrite-famatinite;


·
Dolomite; and


·
Supergene stage covellite-chalcocite-digenite-malachite-azurite-gold-silver-goetite-lepidocrite.




The phase one fine grained quartz-pyrite stage, appears as blue-gray aphanitic quartz.  Quartz is anhedral and pyrite is anhedral to euhedral, both minerals are less than 500μm.




The phase two medium to coarse-grained quartz-pyrite stage commonly occurs with the phase one mineralization but within fractures that cross cut it.  Both occur within poorly to well-banded veins.  The quartz and pyrite are euhedral, quartz grains are up to 2.0cm in length and pyrite grains are up to 1.0cm diameter.  This phase of pyrite is commonly replaced by base metals and it is typically surrounded by the quartz phase.  Both these phases are associated with specular hematite, sphalerite and galena that were deposited along grain boundaries contemporaneous within this phase of mineralization.




The phase three carbonate stage, consists of dolomite, calcite or ankerite within open space fill veins.  These minerals are typically less than 1mm in diameter.  Lack of twinning made identification of the precise carbonate difficult.




The phase four base and precious metal stage, also occurs within open space fill veins.  Base metals in order of abundance are sphalerite, galena and chalcopyrite.  In many cases fine-grained chalcopyrite, less than 20μm was deposited first in quartz vugs.  This was followed bycoarse-grained sphalerite, up to 1.0cm diameter that has abundant inclusions of chalcopyrite.  Galena was introduced next as open space fill and replacement within earlier pyrite.  The galena is generally 0.1-1.0mm in diameter but can be up to 5.0mm.  Microprobe analysis showed that it contained less than 50ppm Ag.  A second and more extensive phase of chalcopyrite occurred


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next as open space fill and replacement of pyrite.  This occurs as anhedral grains 1-300μm in diameter.  Electrum deposition is believed to have occurred with the second chalcopyrite phase.  The electrum grains range from 1-200μm in diameter but the majority are less than 20μm.  They occur predominantly at grain margins, the majority with chalcopyrite and a large component with sphalerite.  Microprobe analysis of electrum grains showed a large range in Au/Ag ratios but a definite cluster of points does occur at 70% Au and 30% Ag.




The phase five sulfosalt stage, consists of mineralization along thin fracture fills and as replacements primarily within the chalcopyrite and sphalerite deposited in phase four.  The sulfosalts are typically 5-20μm in diameter however, tennantite occurs up to 50μm and tetrahedrite occurs up to 300μm.




The phase six dolomite stage, consist solely of euhedral dolomite grains 1-3mm in diameter.  These occur both as open space fill in quartz-pyrite veins and as fracture or breccia fill in the phase four sulfides.




The final phase seven supergene stage, occurs near surface where meteoric waters have oxidized the primary sulfide minerals.  This has mainly affected the chalcopyrite creating a variety of copper oxides plus native sulfur.  Native silver has also been observed as irregular masses with a sieve texture or as wires.




The mineralization at the Project like most precious metal deposits, has occurred by a complex interaction of several different fluid phases.  In general, the deposit can be classified as a low to moderate sulfur system.  The gold and silver are mainly hosted by electrum with 70% Au and 30% Ag.  Copper is hosted by chalcopyrite and Zinc by sphalerite.  Common gangue minerals are quartz, pyrite and carbonates.  Nearly all phases of mineralization have occurred within open space fill veins and these same structures have been active throughout the history of mineralization.
















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8
Exploration(Item 12)




8.1
Surveys and Investigations




Exploration work at the Project has consisted primarily of development drifts and raises, surface and underground geologic mapping, rock chip and continuous channel sampling and diamond core drilling from surface and underground.




The Cross Gold Mining Company obtained the original patented Cross mining claim in 1933 and over the next six years expanded it into 11 patented claims, 2 unpatented claims and 2 mill site claims.  They drove the main access adit, sank the winze and developed on four levels of the mine including numerous raises and sublevels.  This work was aimed primarily at reserve development and very little actual mining was done.  The development work was typically sampled on 10ft (3m) intervals and these results were incorporated into reserve estimates.  The current data files do not have any of the sample locations or sampling results from this era of exploration.




The next period of exploration and development at the Cross Mine began in 1973 when Hendricks Mining Co. obtained the property and began to reopen the underground workings.  By 1977, they had access to all levels of the mine and began producing ore that was shipped to a mill near Boulder, Colorado.  For the next six years, the primary focus was the development and mining of the known veins accompanied by limited amounts of exploration drifting.  This mining was primarily from within the Cross, Crown Point, East Romeo, West Romeo and Rare Metals Veins as well as the Juliet stockwork.  Based on the historic production figures presented in Section 4.4 of this report included development, crosscut and Juliet stockwork material, which lowered the average recovered grade of the mined material to about 0.19oz/st (6.5g/t) Au and 4.6oz/st (158g/t) Ag.




By 1982, the emphasis at the Cross Mine had shifted toward exploration drilling to test for lateral and down dip extensions of the known veins and the delineation of new veins.  This method of exploration continued intermittently for the next fifteen years resulting in twelve different series of holes drilled both from surface and from underground.  A total of 116 drillholes were completed, 60 from surface and 56 from underground.




In 1982, the GL series of underground drilling was completed.  This included thirteen diamond core holes all collared on the fourth level near the southern end of the Cross Vein.  These holes were targeted in three main areas.  Four of the holes were drilled horizontally or slightly upward to test the area east of the Cross Vein, these intersected the mineralization that would later be called the East and West Hopewell Veins.  Four of the holes were drilled horizontal to the west to test for the extension of the Crown Point, Arapahoe and Romeos Veins, one of these continued west of the two Romeo Veins into the area of the present day Juliet Vein.  Four more holes were drilling steeply inclined or vertical to test the down dip extensions of several known veins.  One drill hole was oriented up dip on the Cross Vein to test between levels.  Nearly all of the drillholes intersected significant mineralization.




In 1983, the H series of underground drilling was completed, also from the fourth level.  During the GL series of drilling, the steeply inclined holes had indicated that mineralization did indeed continue with depth and the intensity of veining appeared to increase.  The H Series included five drill holes all targeted at the down dip extension of the known veins.  These holes further


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substantiated the existence of increased veining and mineralization with depth and began to define what was referred to as the “root zone”.




In 1984, the exploration program shifted to surface drilling with the CR Series.  This included six drillholes which were all collared about 350ft (107m) southeast of the mine area and angled steeply back to the northwest in order to further test the area east of the Cross Vein and in particularly the deep eastern continuation of the Rare Metals Vein.  All but two of the drill holes intersected significant mineralization.  The Rare Metal and North Rare Metals veins were extended and several new structures located east of the mine area were discovered which remain unnamed and relatively undefined to date.




The next drilling program was conducted in 1987 with the three different series of drillholes.  The EW Series was comprised of five drillholes, all located on surface approximately 100ft-400ft (30m-122m) west of the mine area.  These holes were designed to test down dip from surface mapping of the Apache Vein and to test for an eastern continuation of the nearby Potosi Vein.  They all intersected significant mineralization confirming the presence of the two targeted veins and providing evidence for the existence of the North Apache Vein.  The RM Series, was comprised of seven drillholes also located on surface but collared about 200ft (61m) southeast of the mine area and oriented steeply to the north.  These drillholes provided infill and step out drilling on the deep Rare Metals Vein and intersected even more structures east of the Cross Vein and west of those encountered by the CR Series.  The DDH Series included five underground drillholes all located on the fourth level.  These targeted two main areas including; the deeper, southern extension of the Arapaho and Romeo Veins and the deeper, central and western extension of the Rare Metals Veins.  The Arapaho Veins were confirmed, however the Romeo Veins did not show good mineralization.  The central part of the deeper Rare Metals Vein was confirmed but extension to the north was not successful.




The PO Series of drillholes were completed in 1988.  This consisted of 10 holes all drilled from surface and concentrated at the western extent of the Potosi, North Apache and Apache Veins.  Unfortunately over half of these holes were drilled parallel the known strike of these veins and were not very helpful in determining their true orientation, thickness or grade.  Those holes, which were oriented perpendicular to the veins, did provide infill and step out confirmation of the veins.




Also in 1988, an underground development program at the Cross Mine was begun on the newly discovered Apache Vein.  A crosscut was driven on the portal level northwest from the western end of the Rare Metals vein for 100ft (30m) were it intersected the Apache Vein.  Drifting on the Apache vein continued to the west for approximately 150ft (46m).  Within this distance, three raises and one sublevel were also driven.  This work confirmed that the Apache Vein was of minable width and good grade.  Concurrent with this development, nearly all of the historic underground workings were carefully surveyed, geologically mapped and extensively channel sampled.  In addition, surface mapping was completed.  This information was all well documented on 1:20 scale level plans that are currently available in the data files.  A large program of re-logging and infill sampling of previously drilled core was also conducted at this time.




In 1990, the C90 series of drillholes were completed in two main locations.  The first ten holes were collared underground on the 4th level near the intersection of the Romeo and Rare Metals Veins oriented steeply to the south into the “Root Zone”.  These holes nearly all intersected


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strong mineralization providing further confirmation to the deeper vein zones.  The next seven holes were collared on surface to test for a western continuation of the Apache, North Apache and Potosi Veins and to test for down dip extensions of these same structures in the areas previously drilled.  The western extension of these veins was not well mineralized however they were confirmed to continue down dip.




In 1993, the SW, APT and MP Series of holes were drilled.  The SW Series was drilled from several locations underground all at the first level.  At this time the underground below this level was flooded.  These holes targeted three areas including the deep “Root Zone”, the Arapaho Vein located between the Romeo and Crown Point Veins and a southern extension of the Crown Point Vein.  As previously, the deep “Root Zone” produced good results.  The Arapahoe vein was confirmed but did not produce very high-grade results and a southern extension of the Crown Point Vein was not found.  The APT Series consists of nine underground drillholes located within the newly completed Apache drift.  These were nearly all oriented horizontal toward the north to provide infill drilling of the North Apache and Potosi Veins.  Most of these holes did confirm grade within these veins.




The MP Series included eleven drillholes, all located on surface mainly collared approximately 450ft (137m) northwest of the mine area.  These were all angled steeply back to the southeast targeting the deepest yet untested portions of the “Root Zone”.  Six of these holes ranged between 1,000ft-1,500ft (305m-457m) deep.  Although several areas of near surface mineralization were encountered, the deep drilling did not produce any significant results.




Also in 1993, the underground drifting and sampling program was reinitiated along the Apache and North Apache Veins at the portal level.  Approximately 800ft (244m) of drifts, raises and sublevels were completed.  This further expanded the know mineralization along the Apache Vein and confirmed the width and grade of the North Apache Vein.  Other exploration work included a district wide aeromagnetic survey completed by AeroDat of Canada, an extensive soil geochemical sampling program and another large program of re-logging and infill sampling of previously drilled core.




In 1995, Echo Bay Mines was participating in a joint venture exploration program at the Project.  They completed eight holes in the CR-95 series of drilling at the Project.  These were drilled from surface and from the first level underground targeting several different areas.  The two underground holes were targeted to test the mineralization that had been found southeast of the mine area.  These did encounter several weakly mineralized zones.  Four of the surface drillholes were targeted deep in the system, similar to those in the MP Series.  Only one of these intersected significant mineralization within what is now correlated to be the deep Apache Vein.  Two additional drill holes were located approximately 1,200ft (366m) north and northwest of the mine area.  The drillhole to the northwest was targeting the pegmatite breccia zone on Idaho Hill.




In 1997, one drillhole was completed and in 1998 five additional holes were completed.  These are listed as the CR-97 and CR-98 Series.  They were all drilled from surface and collared approximately 550ft (168m) northeast of the mine area.  They are oriented toward the south, southwest and west presumably testing for the northern extensions of the main cross veins north of the rare Metals Vein.  All of these holes exceeded 1,000ft (305m) deep and two were in excess of 2,000ft (610m) deep.  They did encounter a few localized zones of strong mineralization but in general were largely barren.


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8.2
Interpretation




The 1982-1998 exploration drilling and sampling programs can support a NI 43-101 resource estimation.  These programs mapped, sampled and diamond core drilled extensions to all known veins, discovered several new veins and indicated several areas of anomalous mineralization.  The exploration programs were well thought-out and conducted in a professional manner.  Drilling was conducted by reputable contactors and most of the deeper drillholes were surveyed for downhole deviation.  The core was logged, split and sampled properly.  All samples were analyzed using appropriate assay procedures of the time.  The drill logging and assay results were correctly compiled onto cross-sections.  The exploration work described above resulted in the delineation of anomalous gold mineralization located within at least 14 veins, each of which average 3ft (1m) in true thickness along 300ft (91m) of strike length and 350ft (107m) of down dip extent.  The drilling and assay results of the exploration work described above were subsequently incorporated into historical resource estimates (Barrett and Schuiling (1988), Barrett (1990), Rescan (1996), Akright (1998), Stevens (1998)) as discussed in Section 4.3.




All of the exploration work completed between 1983 and 1996 was conducted by Hendricks Mining Co or various joint venture partners.  The drilling and historical resource estimations completed during 1998 were conducted by or under the supervision of Calais Resources.

















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NI 43-101 Technical Report on Resources




9
Drilling(Item 13)




9.1
Type and Extent of Drilling




As discussed in Section 8 there have been numerous drilling campaigns completed by several different operators throughout the history of the Cross Mine.  A total of 181 drillholes have been drilled and placed in the drillhole database at the Project.  The drilling is nearly all diamond core and is presumed to have been completed by wireline machines typical of the era.  An overview of the drillhole database is shown in Exhibit 9-1.  Drillhole locations are shown in Figure 9-1.




9.1.1  Procedures




In general, there is no average drill hole spacing on the majority of the Cross Mine veins.  Typically, infill drill holes were positioned between 25ft to 125ft (7.6m to 38m) from adjacent holes.  Core recovery was not recorded on the majority of the drill logs.  Three of the holes completed early in the drilling history during the C90 Series have recovery data and some RQD data.  The recovery was typically in the 95-100% range and RQD values were consistently high.  It is presumed that since core recovery was typically excellent, it was not standard logging procedure to measure and record it.




Nearly all of the drillholes are inclined in a wide range of orientation.  Approximately 25% of the drillholes have been surveyed for downhole deviation.  These measurements were taken by three main techniques.  Acid dip tests were taken on one H Series drillhole and four C-90 Series drillholes.  The C-90 measurements were taken every 200ft-300ft (61m-91m) down hole.  Single shot camera measurements were used on four of the SW series drillholes.  Gyroscopic surveys were performed by Strata Data Inc. on most of the MP series and all of the CR-95, CR-97 and CR-98 Series drillholes.  The CR-95 series were surveyed every 50ft (15m) down hole and the MP, CR-97 and CR-98 series were surveyed every 100ft (30m) downhole.  In relation to total drillhole depth, none of the holes 0ft-500ft (0m-152m) long were surveyed, 32% of the holes 500-999ft (152m-304m) long were surveyed and 81% of the holes 1,000ft-2,300ft (305m-701m) long were surveyed.  Based on the fact that the majority of the deeper holes were surveyed and that the drillhole spacing is not considered tight for this type of deposit the lack of downhole surveys is not considered to have negatively impacted the resource estimate of this report.




The drill collars are all reported to have been surveyed by licensed, legal surveyors Drexel Barrel of Boulder County  Drill collar coordinates are all listed in local imperial mine grid coordinates.  Documentation within the existing mine records include some original collar surveys of the C-90, MP and EW series drillholes on Drexel Barrel letterhead signed by Kent Albers.




The deepest drillhole is 2,950ft (899m) in length and the shortest is 53ft (16m).  The average drillhole length is 538ft (164m).




9.2
Results




A total of 181 drillholes totaling 149,102ft (45,446m) were completed at the Cross Mine over ten different years by seven different operators.  The summary and interpretation of all drilling results indicates that anomalous gold mineralization is located within at least 14 different veins each of these ranging from about 3ft-10ft (1m-3m) in true thickness along 300ft-1,800ft (91m-549m) of strike length and 350ft-2,000ft (107m-610m) of down dip extent.  The drillholes are oriented in a wide range of azimuth and dip directions targeting two predominate vein orientations.  Therefore, the drillholes intercepts do not represent true vein thickness.  Rather,


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true thickness is a wide range of the drillhole intercept distance and an average cannot be presented here.




SRK is of the opinion that the drilling operations were conducted by professionals, the core was handled, logged and sampled in an acceptable manner by professional geologists, and the results are suitable for support of a NI 43-101 compliant resource estimation.












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NI 43-101 Technical Report on Resources


Figure 9-1:  Generalized Drillhole Location Map









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Exhibit 9-1:  Drillhole Database




No.
Hole ID
Easting (ft)
Northing (ft)
Elevation (ft)
Depth (ft)
Depth (m)1
APT2
9334
10280
9705
120
372
APT3
9330
10282
9705
81
253
APT4
9335
10277
9703
89
274
APT5
8905
10445
9708
75
235
APT6
8905
10445
9708
169
526
APT7
8905
10432
9708
80
247
APT8
9146
10320
9708
212
658
APT9
9147
10320
9705
104
329
C1230-1
6575
11745
8955
201
6110
C1230-10
6690
11845
8955
180
5511
C1230-11
6699
11838
8955
260
7912
C1230-12
6562
11729
8955
297
9013
C1230-13
6565
11734
8955
300
9114
C1230-14
6672
11688
8955
261
8015
C1230-2
6581
11749
8955
0
016
C1230-3
6584
11746
215
385
11717
C1230-3-11
6584
11746
8955
260
7918
C1230-4
6581
11723
8955
326
9919
C1230-5
6582
11729
8955
305
9320
C1230-6
6581
11726
8955
432
13221
C1230-7
6579
11712
8955
607
18522
C1230-8
6561
11717
8955
557
17023
C1230-9
6570
11715
8955
596
18224
C90-1
9528
10204
9515
388
11825
C90-10
9527
10203
9515
263
8026
C90-11
8778
10290
9899
768
23427
C90-12
8778
10290
9899
731
22328
C90-13
8599
10382
9900
727
22229
C90-14
8599
10382
9900
596
18230
C90-15
9185
10538
9901
569
17331
C90-16
9280
10541
9898
562
17132
C90-17
9280
10541
9898
736
22433
C90-2
9527
10207
9515
398
12134
C90-3
9524
10200
9515
445
13635
C90-4
9523
10204
9515
163
5036
C90-5
9522
10206
9515
176
5437
C90-6
9521
10206
9515
199
6138
C90-7
9528
10202
9515
239
7339
C90-8
9520
10205
9515
297
9140
C90-9
9521
10205
9515
234
7141
CR-03-125
8775
12723
9915
1,234
37642
CR-03-126
8775
12723
9915
1,700
51843
CR-03-127
8165
13090
9865
350
10744
CR-04-128
8140
13050
9865
2,925
89245
CR-04-129
8189
13114
9863
2,222
67746
CR-04-130
8189
13114
9863
1,846
56347
CR-04-131
8152
12973
9860
1,625
49548
CR-1
10056
9952
9676
946
28849
CR-2
10145
9898
9676
1,077
32850
CR-4
9913
10047
9688
798
24351
CR-6
10056
9952
9676
954
29152
CR-95-100
9702
10029
9693
500
15253
CR-95-101
9702
10028
9693
527
16054
CR-95-106
10101
9939
9676
1,673
51055
CR-95-107
9037
10475
9861
1,645
501


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NI 43-101 Technical Report on Resources




Exhibit 9-1:  Drillhole Database (Continued)




No.
Hole ID
Easting (ft)
Northing (ft)
Elevation (ft)
Depth (ft)
Depth (m)56
CR-95-108
9495
11622
10021
630
19257
CR-95-109
8363
10799
9948
1,276
38958
CR-95-110
6897
12119
9951
1,738
53059
CR-95-111
9651
10505
9798
1,168
35660
CR-95-112
9648
10506
9797
1,000
30561
CR-97-101
10100
10325
9700
1,313
40062
CR-97-102
6370
12275
9920
1,700
51863
CR-97-103
6370
12275
9920
2,000
61064
CR-97-104
7850
13255
9840
1,900
57965
CR-97-105
8195
13720
9840
1,400
42766
CR-97-106
8195
13720
9840
1,500
45767
CR-97-107
8705
13010
9900
1,500
45768
CR-98-108
10123
10521
9753
2,300
70169
CR-98-109
10124
10528
9738
1,350
41170
CR-98-110
10124
10528
9738
2,250
68671
CR-98-111
10140
10535
9738
1,200
36672
CR-98-112
10140
10535
9738
1,200
36673
CR-98-113
8650
12980
9897
1,400
42774
CR-98-114
8173
13148
9865
2,000
61075
CR-98-115
8173
13148
9865
2,400
73276
CR-98-116
7742
12350
9875
2,400
73277
CR-98-117
8920
14465
9815
1,500
45778
CR-98-118
8920
14465
9815
2,400
73279
CR-98-119
8920
14465
9815
1,900
57980
CR-98-120
8920
14465
9815
1,600
48881
CR-98-121
8500
13880
9880
1,500
45782
CR-98-122
8500
13880
9880
1,500
45783
CR-98-123
8500
13880
9880
1,400
42784
CR-98-124
7742
12350
9875
2,700
82385
DDH-1
9563
10160
9516
113
3486
DDH-2
9559
10158
9516
94
2987
DDH-3
9561
10159
9516
96
2988
DDH-4
9560
10157
9516
64
1989
DDH-5
9560
10157
9516
80
2490
DDH2-1955
6581
11749
8955
130
4091
DDH3-1955
6690
11845
8955
195
5992
EW-1
9370
10318
9821
194
5993
EW-2
9269
10345
9834
159
4894
EW-3
9167
10280
9844
262
8095
EW-4
9063
10379
9852
251
7796
EW-5
9017
10331
9857
270
8297
EXP-06-1
9964
9768
9728
1,000
30598
EXP-06-2
9964
9768
9728
1,000
30599
EXP-06-3
9964
9768
9728
1,000
305100
EXP-06-4
9964
9768
9728
1,000
305101
EXP-A
8800
14250
9845
1,700
518102
EXP-B
8170
15550
10015
2,100
640103
EXP-C
8170
15550
10015
1,000
305104
EXP-D
10150
15560
9775
2,000
610105
EXP-E
8000
11420
9990
2,300
701106
EXP-F
8900
11300
10070
800
244107
EXP-G
8180
9820
9955
2,000
610108
EXP-H
6100
12240
9965
2,200
671109
EXP-I
8180
9820
9955
600
183


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Exhibit 9-1:  Drillhole Database (Continued)




No.
Hole ID
Easting (ft)
Northing (ft)
Elevation (ft)
Depth (ft)
Depth (m)110
EXP-J
8180
9820
9955
700
213111
EXP-K
7725
12360
9875
1,000
305112
EXP-L
8710
12200
9935
1,000
305113
EXP-M
5800
12600
9980
2,400
732114
EXP-N
5460
11260
10165
1,500
457115
EXP-O
8740
10430
9880
1,200
366116
EXP-Q
8900
11300
10070
1,800
549117
EXP-R
9150
16650
9825
2,400
732118
EXP-S
7850
13255
9840
1,800
549119
EXP-T
7850
13255
9840
1,700
518120
EXP-U
6650
12200
9940
1,900
579121
EXP-W
7850
13255
9840
2,100
640122
EXP-X
9150
16650
9825
2,200
671123
GL-1
9559
10116
9516
27
8124
GL-10
9575
10118
9519
91
28125
GL-11
9578
10120
9518
32
10126
GL-14
9576
10124
9513
120
37127
GL-2
9563
10114
9515
52
16128
GL-4
9580
10121
9515
55
17129
GL-5
9578
10116
9515
71
22130
GL-6
9578
10108
9515
37
11131
GL-7
9557
10129
9513
150
46132
GL-8
9555
10128
9512
324
99133
GL-9
9560
10117
9515
110
34134
H-1
9553
10127
9512
261
80135
H-2
9555
10128
9512
184
56136
H-3
9554
10126
9513
311
95137
H-4
9559
10127
9513
400
122138
H-5
9513
10196
9510
309
94139
HG-1
6775
11287
9765
876
267140
HG-2
6780
11277
9765
993
303141
HG-3
6780
11277
9767
586
179142
MP-1
9768
9891
9763
1,148
350143
MP-10
10275
9750
9676
1,300
396144
MP-2
9338
10542
9875
942
287145
MP-3
9339
10540
9875
1,148
350146
MP-4
9339
10545
9878
477
145147
MP-5
9207
10517
9871
324
99148
MP-6
9207
10517
9871
688
210149
MP-7
9207
10517
9871
1,350
411150
MP-8
9207
10517
9871
489
149151
MP-9
12035
8650
9500
824
251152
PO-1
9149
10418
9853
185
56153
PO-10
9514
10379
9817
407
124154
PO-2
9057
10472
9864
202
62155
PO-3
8891
10568
9895
72
22156
PO-4
9045
10421
9852
134
41157
PO-6
9087
10512
9876
251
76158
PO-7
9084
10515
9877
282
86159
PO-8
8977
10519
9876
298
91160
PO-9
9203
10359
9835
154
47161
RM-1
9771
9892
9763
824
251162
RM-2
9768
9892
9763
805
245163
RM-3
9573
9825
9830
1,023
312


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Consolidated Caribou Project
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NI 43-101 Technical Report on Resources








Exhi bit 9-1:  Drillhole Database (Continued)




No.
Hole ID
Easting (ft)
Northing (ft)
Elevation (ft)
Depth (ft)
Depth (m)164
RM-4
9768
9890
9763
870
265165
RM-5
9191
10391
9840
1,342
409166
RM-5A
9191
10391
9840
238
73167
RM-6
9932
10012
9688
653
199168
RM-7
9191
10391
9840
788
240169
SW-1
9440
10148
9705
196
60170
SW-10
9327
10275
9707
460
140171
SW-11
9327
10275
9707
500
152172
SW-12
9327
10275
9707
518
158173
SW-13
9327
10275
9707
149
45174
SW-2
9440
10148
9705
80
24175
SW-3
9550
10085
9696
121
37176
SW-4
9547
10083
9696
130
40177
SW-5
9547
10083
9696
56
17178
SW-6
9547
10083
9696
110
34179
SW-7
9642
10115
9693
208
63180
SW-8
9642
10095
9695
231
70181
SW-9
9642
10095
9695
300
91Total
-
-
-
149,102
45,446









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NI 43-101 Technical Report on Resources




10
Sampling Method and Approach (Item 14)




The details on core sampling procedures are not present in the property documentation.  Many companies of that era did not document their routine sample and analytical handling procedures as a matter of course.  The information presented below is derived from personal communications with Tom Hendricks who was project manager throughout all of the modern drilling campaigns and from personal observations of the remaining drill core.




10.1
Sampling Methods




All drill core in the various drilling programs, was first inspected and quick logged for gold and silver mineralization.  Observations on the nature and occurrence of mineralization were noted in drill logs.  Mineralized core was marked with flagging for sampling in variable lengths.  The original assay lengths range from 0.1ft-21ft (0.03m-6.4m) with an average of 3.4ft (1.0m).  Typically, samples were collected both from the vein zone and from within the less-mineralized zones above and below it.  The core was split with a mechanical splitter perpendicular to any dominant fabric.  One-half of the core was then gathered, bagged and identified by drillhole and distance down hole at the start of the interval.  The remaining half core and all un-sampled core was placed in core rack storage for future reference where it remains today.  The core was sampled during three main programs.  The core drilled during 1982-1984 was partially sampled at the time it was drilled.  During 1987-1990 the core drilled in those years as was partially sampled and the core drilled in previous years was also infill sampled.  In 1993-1994 the core drilled in 1993 was sampled as well as all core which had been previously drilled was further infill sampled.  All core drilled during 1995, 1997 and 1998 was sampled at the time it was drilled.




10.2
Factors Impacting Accuracy of Results




The 1982-1998 drilling programs were conducted by professional geologists and drillers who undoubtedly performed to the standards of the mining industry.  Drillers of the era were expected to accurately record the runs and depths of the drill on the core boxes and in daily drill reports, and for helpers to pull the core from the barrel and assign correctly in the box with regards to sample polarity.  The geologists of the era were expected to accurately mark and record intervals with an engineering-scale tape measure.  Based on information within the well-documented drill logs, SRK is of the opinion that the drilling and geological personnel assigned to the project performed according to industry standards and carried out their duties accordingly.




10.3
Sample Quality




The drill logs from both the AX and NQ size core holes indicate average core recoveries were typically in excess of 95%.  Recoveries on this magnitude inherently ensure that a good sample has been provided by the drilling contractor.  Because the mineralization at the Project is relatively high grade, the gold distribution can exhibit variance caused by particle size effects.  In this case, assays derived from the larger sized NQ core will provide a better sample than the smaller EW and AX size core.  To date, there has been no indication that gold mineralization at the Project exhibits such particle size effects.




SRK is of the opinion that the drilling and geological staff ensured that all drill samples met client and industry standards for production and delivery.


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10.4
Relevant Samples




The samples of importance to the exploration program were the mineralized vein and adjacent wall rock material.  Careful geologic logging provided the necessary information required to determine the widths of mineralization and the sample intervals that would accurately characterize and quantify them.  The average sample interval of 3.4ft (1.0m) discussed above, is appropriate for the nature of the gold mineralization and generally, will not incorporate any higher-grade intervals within longer, lower grade intervals.  The sampled intervals are noted on the geologic drill logs for each hole that correspond to a lithologic notation entry and the later recorded respective gold and silver assays.

















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11
Sample Preparation, Analyses and Security (Item 15)




The details on sample preparation and analytical procedures at the Cross Mine described by Barrett and Schuiling (1988) are short but present.  Missing from the report are discussions of security measures employed during sample handling and delivery.  Many companies of that era did not document their routine sample and analytical handling procedures as a matter of course.




11.1
Sample Preparation and Assaying Methods




Information available to document sample preparation and assaying methods used during the original sampling of the 1982-1984 drillholes is incomplete.  The hard copy records of these holes contain original assay certificates from Skyline Labs Inc. in Wheat Ridge Colorado, which report gold and silver assays determined by fire assay.  Based on the available drill logs, it appears that the majority of the sampling in these holes was actually conducted during the 1987 and 1994 programs.




In the Barrett and Schuiling (1988) report, the authors state that:




“Fifty percent splits of the available core, complete pulverization of samples, fire assays using one assay ton, and occasional crosschecks between labs were consistently used to maintain the accuracy and precision of the assays.  Most of the sample preparation and analyses were undertaken by the Skyline or Cone laboratories in the Denver metropolitan area.”




Other assays listed within this report were conducted by Root and Simpson.  Barrett ran the exploration program at the Project from 1987 to 1990 and based on the supporting documentation, SRK has no reason to believe that the sample preparation and analysis changed during this period.




Based on the available original assay certificates, the 1993 drilling and 1994 sampling programs were also analyzed by Skyline Labs and Cone Geochemical in Lakewood, Co.  These list gold and silver assays determined by fire assays, presumably using a one assay ton charge as previously.




The 1995 drilling samples were all analyzed by Cone Geochemical and Barringer Laboratories in Golden Co.  The original assay certificates from Cone list that gold was analyzed in a 20g charge by fire assay with and an atomic absorption finish producing a 6% precision.  Silver was analyzed by a four acid digestion and determined by atomic absorption for a 5% precision.  The Barringer certificates list that both gold and silver were analyzed by fire assay with an atomic absorption finish but they do not list the assay charge used.  Many of the samples taken during 1995 and sent to both labs, were also analyzed by four acid digestion and atomic absorption method for their Cu, Pb, Zn, Hg, Sb and As content.




There is no information describing the sample preparation or analysis methods used during the 1997 or 1998 programs conducted by Calais.




11.2
Quality Controls and Quality Assurance




There is no discussion provided in the documentation supplied to SRK of QA/QC procedures used by any of the historical operators in the handling and treatment of analytical samples, or the use of blanks, duplicates, and standards inserted into the assay pulp stream.  SRK frequently has


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to rely on the historic professional levels of expertise and sample handling that were expected of project geologists and assay labs of the time.  The performance of fire assay analysis for gold and silver is a standard method employed from the days of pick and shovel prospectors to current day.  The certification of analytical labs to ISO 9001/9002 standards was not in effect in the early 1980’s or 1990’s.  SRK presumes that reputable labs such as Skyline, Cone, Root and Simpson and Barringer conducted sufficient and rigorous internal check program on the Project samples to ensure precision and accuracy in their analyses.




Barrett and Schuiling (1988) report that duplicate assays were performed by Skyline labs and Cone Geochemical for samples taken during the 1987 to 1990 drilling programs.  There are no references in the reports that any significant issues were ever encountered during these programs.  During the 1993 exploration program, Hendricks Minerals Canada conducted duplicate sampling from the two RM Series drillholes completed in 1987 and one MP Series drillhole completed in 1993.  The literature does not specify whether these were core or pulp duplicates but the files suggest that pulp samples from a variety of assay grades which were originally assayed at Skyline Labs were sent to Cone Geochemical for a duplicate analysis.  The data here clearly shows excellent reproducibility between the two labs.




11.3
Interpretation




SRK is of the opinion that the analytical work performed by the Skyline, Cone, Root and Simpson and Barringer Labs on the Cross Mine mineralization was good, and suitable for use in resource estimation.  The fire assay with an atomic absorption finish method is commonly used for gold and silver analysis today.




There are no references in any of the documents supplied to SRK pertaining to security procedures in effect at the drill site and field camp.  During the late 1980’s and 1990’s it was not a standard component of project reporting to document the routines of the project operation.  Industry and corporate standards have always been to prohibit any outsiders to handle or inspect fresh drill core at any stage of exploration operations.  The drill core is typically picked up at the drill site by the geologist or designated assistant, or delivered by the driller at the end of shift.  At the core logging facility, only the geologist and assistant help are permitted to handle and prepare the core.  Transportation of the split bagged core to a laboratory facility is usually handled by commercial carriers in bulk form in boxes, larger sacks, pallets, or buckets.




SRK assumes the drill core for the 1982-1998 program was handled in the accustomed industry manner by drill contractors, geologists, and transportation carriers, and was not compromised by outsiders.




Operators during the 1987 to 1993 exploration programs conducted duplicate assay analysis of core pulps.  The results of this work showed that neither Skyline Labs nor Cone Geochemical reported any systematic bias in their results.









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NI 43-101 Technical Report on Resources




12
Data Verification (Item 16)




12.1
Quality Control Measures and Procedures




Data supporting the Cross Mine compiled within the electronic database was verified by SRK to the original hard copy data source.  The electronic database was constructed in two main phases, both involved direct input from hard copies of the original drill logs and assay certificates.  The drill logs consist of standardized, hand written or typed paper log sheets that included from, to, intervals, rock type codes, geologic descriptions, sample intervals and assay results.  They are organized by drilling series and each lists the property name, start date, completion date, logged by, bearing, dip, and most list the collar coordinates in local imperial mine grid.  Many of the original assays certificates were available to validate the drill log assay values.  The original database was constructed in about 1993 under the supervision of Robert Akright by Maptek Inc of Denver Colorado.  There are no specific details as to how this was completed.  However, it appears that Maptek input the data from the drill logs or assay certificates to electronic templates specific to the project.  Verification of the database was apparently not carried out during this phase of work.  A reference by Stevens, (1998) indicates that several problems were encountered during his manipulation of the data and recommended that the database be verified in the near future.  The database as it was presented to SRK consisted of four Excel spreadsheets.  These contained collar locations surveyed in local imperial mine coordinates, drillhole orientations with downhole deviation surveys, assay intervals with elemental analyses and geologic intervals with rock types for some of the holes.




Once SRK began to verify the database as part of this study it became apparent that a significant portion of the 1993 and 1994 infill assaying program as well as all of the underground channel sampling were absent.  As part of this study, SRK carefully reviewed all of the historic drill logs, channel sample maps, assay certificates, and compared them to what was in the original electronic database.  This work resulted in expansion of the assay database from 4,600 original values to the current 7,486 values.




The author and QP of this report has verified the electronic database of the Cross Mine.  Ninety five percent of the drill collars were verified mainly to the original drill logs but some to original surveyor’s reports.  Ninety five percent of the drillhole orientation data was also verified, mainly to drill logs but also to original contractor downhole survey files.  Ninety two percent of the assay data was verified.  Of this, 57% was verified to original assay certificates and 43% was verified to assay data listed on the original drill logs.  Where available, original drill logs assay values were checked against assay certificates and no mistakes were noted on the drill logs.




12.2
Limitations




SRK relies on the industry professionalism of Hendricks Mining, Good Mining Co, Power Petroleum, East-West Minerals, Gwalia USA, Hendricks Minerals Canada, Echo Bay Mines and Calais Resources to have collected and presented the exploration data with utmost regards to accurate transfer and entry of data.






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13
Adjacent Properties (Item 17)




The Project is located within the historic Caribou Mining Camp that sits within the larger Grand Island Mining District.  The mining district encompasses at least 15 historic mines including; Boulder County, Potosi, Native Silver , Seven Thirty, Idaho, Silver Point, and St Louis Mines (Watts et al 1983).  The most significant of these are the Caribou and Boulder County Mines (Figure 13-1).  Calais owns all of the properties described below except for the Boulder County Mine.




The Boulder County Mine is located approximately 5,000ft (1,500m) east of the Project.  It was a historic producer intermittently between 1885 and the late 1950s.  It was primarily a gold mine with high silver credits.  Historical production records report that 130,000t of ore were produced with 22,000oz of gold and 283,000oz of silver.  The Boulder County Mine is hosted within relatively narrow and high grade veins which strike predominantly east-west.  They are all located within the Pre-Cambrian Gneiss and have been traced for thousands of feet on strike and over a thousand feet down dip.  The mine has been developed on three main levels by a cross-cut portal and two shafts.




Most of the remaining nearby mines are relatively small with limited development.  The Potosi Mine is located adjacent to the Cross, approximately 700ft (213m) northwest.  It went into production in the mid-1920s and continued into the mid-1930s.  Development consisted of a winze 500ft (152m) deep and workings on five levels.  The mine is hosted within the northwest extension of the Potosi Vein within the Caribou Monzonite.  The veins are described as 2ft-20ft (0.6m-6.1m) wide, known for 100ft (30m) along strike and containing primarily gold, silver and lead (Joyce 1927, 1932).  The Seven Thirty and native Silver Mines are located approximately 3,800ft (1,160m) northwest of the Project along the trend of the Caribou mineralization.  The Native Silver Mine was developed by a shaft 580ft (177m) deep accessing several levels with aggregate lengths of over 700ft (213m).  The vein is described as 4ft-5ft (1.2m-1.5m) wide hosting mainly silver and lead.  In 1883 the mine was reported to have produced US$1,000,000 of metal.  The Seven Thirty Mine is just 100ft (30m) north of the Native Silver.  It was developed by a shaft accessing several levels.  The host vein is reported to have been relatively thin and low grade near surface but opened up to a “pay vein” 2ft (0.6m) wide 200ft (61m) down dip.  The Idaho and Silver Point Mines are located approximately 2,500ft (762m) north-northwest of the Project.  The Idaho Mine was developed by a shaft 180ft (55m) deep and a cross cut 300ft (91m) long.  It was primarily a gold producer with silver credits.  The Silver Point Mine was worked to a depth of 250ft (76m) where it was reportedly producing ore that averaged 2.0oz/st (69g/t) Au and 150oz/st (5,100g/t) Ag.  The St. Louis Mine is located approximately 1,000ft (305m) north of the Project.  It has been developed by a shaft 335ft (102m) deep and was large enough to warrant a mill and aerial tramway.  The ore is reported to contain primarily gold (Moore et al 1957).




In summary, the district is rich in silver, gold-silver and gold bearing veins hosted within the Idaho Springs Gneiss and the Caribou Monzonite.  The major veins typically strike northeast-southwest and dip 65° to the north.  Production in the district had its heyday during the late 1800s.  The various mines and claims have historically been owned by numerous titleholders and until recently were never consolidated.  In 1993, Hendricks Minerals Canada consolidated most of the property ownerships and these have now been transferred into Calais Resources.


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NI 43-101 Technical Report on Resources
 Figure 13-1:  Mines Adjacent to the Project










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Consolidated Caribou Project
14-1

NI 43-101 Technical Report on Resources




14
Mineral Processing and Metallurgical Testing (Item 18)




Resource Development Inc., (RDi) completed a metallurgical test program on the Cross Mine mineralization for Calais.  The testwork included sample compositing, composite characterization, Bond’s ball millwork index determination, flotation tests, thickening and filtration studies.




The objectives of the metallurgical study were; (1) to determine if a bulk-sulfide concentrate should be produced or two separate concentrates, namely lead and zinc concentrate, should be produced, and (2) generate data for sizing major equipment for the optimum flowsheet.




RDi received samples from four different areas of the Cross Mine for the present study.  Bulk samples were collected from four of the main veins accessed on the portal level.  These included the; Rare Metals, Romeo, Crown Point and Apache Veins.  Metallurgical studies were conducted on the four individual samples plus a composite sample of all four veins.




The metallurgical testwork was undertaken on a composite sample prepared from the four individual samples.




The following sections present the test procedures and results obtained in the present study.




14.1
Mineral Processing/Metallurgical Testing Analysis




14.1.1  Sample Preparation and Characterization




Some of the “as received” samples were wet.  Therefore, all the four samples were air dried prior to crushing.  Each dried sample was separately crushed to nominal 6 mesh and a representative split was taken out for head analyses.  The remaining samples were all blended together to prepare a composite sample.




The composite sample was split into 1kg charges using a twenty-way rotary splitter.  A 1kg sample was pulverized to nominal 150 mesh as well as the individual samples and submitted for gold and silver analyses using one-assay-ton fire assay technique, copper, lead, and zinc analyses using four acid digestion followed by Atomic Adsorption analyses and XRF analyses.




The test data are summarized in Tables 14.1.1 through 14.1.3.  The test results indicate the following:




·
The gold and silver values varied significantly in the different veins in the mine.  For example, gold assay varied from a low of 13.6g/t in the Apache vein to a high of 25.9g/t in the Romeo vein.  The silver assay varied from a low of 142.3g/t in the Crown Point vein to high of 949.7g/t in the Apache vein.  Similar trends were noted for copper, lead and zinc assays;




·
The composite sample assayed 17.3g/t Au, 315.5g/t Ag, 0.18% Cu, 1.20% Pb and 1.16% Zn;




·
The XRF analyses indicated that the predominant host rock minerals were SiO2, Al2O3, Fe2O3and K2O.  The SiO2 content varied from 64.6% to 85.3%.  Hence, the ore will have varying hardness; and


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·
XRF analyses also indicated that the ore contained only traces of detrimental sulfide-bearing elements other than copper, lead, zinc and pyrite.  Arsenic, cobalt and nickel values were less than 100ppm each.




Table 14.1.1:  Head Analyses of Cross Mine Samples




SampleElement
No. 1

(Rare Metals Vein)
No. 2

(Romeo Vein)
No. 3

(Apache Vein)
No. 4

(Crown PT Vein)
CompositeAu, g/t
25.45
25.93
13.58
18.38
17.28Ag, g/t
346.80
304.80
949.66
142.26
315.51% Cu
0.1086
0.1792
0.4780
0.0354
0.1816% Pb
0.6620
1.622
1.916
0.806
1.198% Zn
0.7180
0.6520
3.240
0.1158
1.164






Table 14.1.2:  XRF Analyses of Cross Mine Samples




SampleElement %
No. 1

(Rare Metal Vein)
No. 2

(Romeo Vein)
No. 3

(Apache Vein)
No. 4

(Crown PT Vein)
CompositeNa2O
0.08
0.06
0.10
0.08
0.06MgO
0.67
0.33
1.25
0.24
0.67Al2O3
10.6
6.01
11.8
6.79
8.58SiO2
77.2
85.3
64.6
84.0
77.8P2O5
<0.05
0.05
0.53
0.10
0.13S
1.31
0.91
1.93
0.10
1.34Cl
<0.02
<0.02
<0.02
<0.02
<0.02K2O
4.96
2.55
6.56
3.09
4.23CaO
0.05
0.06
3.44
0.07
0.74TiO2
0.47
0.25
0.52
0.19
0.35MnO
0.07
0.06
0.21
0.04
0.10Fe2O3
4.41
4.16
6.25
4.28
5.51BaO
0.06
0.24
0.04
0.15
0.14







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Table 14.1.3:  XRF Analyses of Cross Mine Samples




Element ppm
SampleNo. 1

(Rare Metal Vein)
No. 2

(Romeo Vein)
No. 3

(Apache Vein)
No. 4

(Crown PT Vein)
CompositeV
47
30
72
41
43Cr
65
55
<10
51
50Co
14
19
47
13
28Ni
<10
<10
<10
<10
<10W
10
<10
<10
<10
<10Cu
696
1390
2780
290
2120Zn
8730
5620
30400
955
7400As
49
59
<20
<20
56Sn
58
91
<50
<50
98Pb
4580
9790
12400
6260
9650Mo
169
544
1240
1510
967Sr
134
302
292
777
362U
<50
<50
<50
<50
<50Th
<50
<50
<50
<50
<50Nb
15
14
20
11
15Zr
130
89
126
167
137Rb
112
61
122
69
91Y
39
26
43
24
38




14.1.2  Bond’s Ball Mill Work Index




Bond’s ball mill work index was determined for the composite sample at 100 mesh grind.  Bond’s ball mill work index was determined to be 15.29 for the composite sample.




14.1.3  Grind Studies




A series of laboratory grind tests were performed to determine the grind time required for the desired product size.  1kg charges were ground in a rod mill for 50% solids for pre-determined grind times and wet screened at 400 mesh.  The coarse and fine fractions were filtered and dried.  The plus 400 mesh fraction was dry screened.  The screen fraction were weighed and the total particle size distribution calculated.




The results are summarized in Table 14.1.4.  The data was used to calculate times required for P80 of 65, 100, 150 and 200 mesh.




Table 14.1.4:  Laboratory Grind Size-Grind Time Data for Rod Mill (1kg Charge)




Grind Time, min
Grind Size P80,μm10
28020
12230
78




14.1.4  Rougher Flotation Tests




Two processing options were evaluated.  The first option was to produce a bulk-sulfide concentrate and the second option was to produce two separate concentrates, namely lead concentrate and zinc concentrate.


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A review of historical test work provided by the client and preliminary economics indicated that majority of the values in the ore are for the precious metals and they can readily be floated into a bulk-sulfide concentrate.




Bulk Flotation




A series of nine flotation tests were run to evaluate the following process variables:




·
Primary grind size;


·
pH; and


·
Supplementary collectors and frothers.




Timed concentrates were collected for a total flotation time of 12 minutes.  The flotation test conditions are summarized in Table 14.1.5.  The flotation test data results are summarized in Table 14.1.6.  The test result indicate the following:




·
The finer the primary grind, the higher the gold and silver recoveries in the rougher concentrate.  The gold and silver recoveries at a P80 of 100 mesh were 91.8% and 84.2% respectively.  The weight recovery was 10.7%;


·
Addition of Cytek aeropromotors 404 or 3477 to the flotation process did not improve gold and silver recoveries.  Hence a simple reagent suite consisting of potassium amyl xanthate and methyl isobutyl carbonyl (MIBC) is recommended for the flotation process;


·
Higher pH in the flotation test did improve gold and silver recoveries slightly (Tests 2, 7, 8).  However, the weight recovery was also higher at a higher pH.  A flotation pH of 9 to 10 is recommended for the plant; and


·
The timed concentrate data, indicates that 12 minutes of flotation time was more than sufficient for maximizing recovery of precious metals at an acceptable concentrate grade.




Table 14.1.5:  Bulk Sulfide Flotation Process Conditions (Flotation Time:  12min)




Test No.
Grind

P80 mesh
pH
Reagents, g/tPAX
AP404
AP3477
MIBC
AF651
100
natural
90
–
–
40
–2
150
natural
90
–
–
40
–3
200
natural
90
–
–
40
–4
150
natural
60
60
–
40
–5
150
natural
60
–
60
40
–6
150
natural
90
–
–
–
887
150
9
90
–
–
40
–8
150
11
90
–
–
40
–9
65
natural
90
–
–
40
–


Note:  Natural pH = + 7.5






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Table 14.1.6:  Flotation Test Results









Based on these test results, one 10kg flotation test was performed in a 1ft3 (0.03m3) cell to generate concentrate and tailings for thickening and filtration studies.  The tests were performed at a natural pH using potassium amyl xanthate as collector and methyl isobutyl carbonal as frother.  The weight and precious metal recoveries were slightly lower than first series of tests because the concentrate was floated for 12 minutes instead of 18 minutes in a larger cell.  The test data results are summarized in Table 14.1.7.




Table 14.1.7:  Flotation Test Data




Description
Concentrate
Tailing
Cal. FeedRecovery %:Wt.
9.7
90.3
100.0Au
86.3
13.7
100.0Ag
79.0
21.0
100.0Cu
83.0
17.0
100.0Pb
58.2
41.8
100.0Zn
89.3
10.7
100.0Grade, g/tAu
114.40
1.96
12.87Ag
2.933.0
83.7
360.3Cu
13.300
300
1,591Pb
58.200
4,500
9.713Zn
93.000
1,200
10.112




Sequential Flotation




A flotation test was performed using the sequential flotation scheme of depressing zinc and floating lead and copper minerals first followed by reactivation of zinc minerals and floating a zinc concentrate (Test No. 10).




The test data are summarized in Table 1.4.8.  The test results indicated that majority of the zinc minerals floated into the lead/copper concentrate despite the addition of zinc cyanide depressant.  Due to the complexity of the reagents used in this flotation, this scheme was not pursued any further.




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Table 14.1.8:  Selective Lead and Zinc Flotation Results (Test No. 10)




Description
Pb Rougher Conc
Zn Rougher Conc
Tailing Assay, g/t
Cal. Feed, g/tRecovery %: Wt.
5.2
2.1Au
89.6
2.8Ag
75.0
4.9Cu
75.5
4.8Pb
42.6
2.8Zn
86.4
5.2Grade g/tAu
270.37
20.50
1.30
15.80Ag
5285.5
859.9
79.9
369.0Cu
27,100
4,300
400
1,881Pb
84,200
13,800
6,100
10,352Zn
183,200
27,400
1,000
11,099


Note:  Primary Grind P80 of 150 mesh


14.1.5  Cleaner Flotation Test




The objective of bulk-sulfide cleaner flotation test was to determine if one could reduce concentrate weight without significant loss of recovery of precious metals in the cleaner flotation tailing.




Rougher concentrate was generated using potassium amyl xanthate and MIBC at a pH of 11 and a primary grind of P80 of 150 mesh.  The rougher flotation time was 12 minutes.  The flotation test data are summarized in Table 14.1.9.  The test results indicate the following:




·
The rougher concentrate , assaying 168g/t Au and 3,820g/t Ag, recovered 90.9% of gold and 82.1% of silver in 8.2% of the weight;


·
The first-cleaner concentrate was floated for 3 minutes.  The concentrate, assaying 222g/t Au and 4,758g/t Ag, recovered 63.8% of gold and 54.0% of silver in 4.4% of the weight; and


·
The first-cleaner flotation tailing assayed 107g/t Au and 2,791g/t Ag.  The cleaner tailings contained 27.1% of gold and 28.2% of silver.




Based on these results, a decision was made not to have the rougher concentrate upgraded in the cleaner-flotation circuit because of significant loss of values in the cleaner-flotation tailing.






Table 14.1.9:  Cleaner Flotation Test Results




Product
Float
Recovery, %
Grade, g/tTime, min
Wt.
Au
Ag
Cu
Pb
Zn
Au
Ag
Cu
Pb
ZnCleaner 1 Conc.
3
4.4
63.8
54
57.1
33.4
74.3
222.58
4,758.8
24,247
73,331
182,286Cleaner 1 Tails
–
3.9
27.1
28.2
27.7
35.6
15.8
106.65
2,791.1
13,100
92,800
42,200Cal. Rougher Conc.
12
8.2
90.9
82.1
84.9
69
90.2
168.16
3,820.4
18,812
84,371
112,763Rougher Tailings
–
91.8
9.1
17.9
15.1
31
9.8
1.51
74.5
300
3,400
1,100Cal. Feed

100
100
100
100
100
100
15.21
382.4
1,822
10,555
10,278




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14.1.6  Thickening Tests




Thickening tests were performed on the rougher flotation tailing and concentrate in order to size the equipment required for the process flowsheet.




Following the screening of flocculants in beaker tests, thickening tests were performed in 1,000mL cylinders for flotation tailings and 500mL cylinders for flotation concentrate.




Thickening of Flotation Tailing




A total of four thickening tests were performed with varying amounts of flocculent.  The test data a results are summarized in Table 14.1.10.  Unit areas requirements were calculated for different underflow densities.  The tailings thicken quickly with a small addition of the flocculent.




Thickening of Flotation Concentrate




A total of three thickening tests were performed with varying amounts of flocculent.  The test data are summarized in Table 14.1.11.  Unit area requirements were calculated for 50% solids in the thickener underflow.




Table 14.1.10:  Thickening Test Results for Flotation Tailing




Test No.
Flocculent g/t
Underflow Density % Solids
Unit Area, m2/t/day4
0.0
55
0.09681
4.2
55
0.05752
6.3
55
0.03833
8.3
55
0.0314


Note:  Flocculent employed is a high molecular weight acryl amide/sodium acrylate copolymer with 32% charge (Great Divide GF 5326)




Table 14.1.11:  Thickening Test Results for Flotation Concentrate




Test No.
Flocculent g/t
Underflow Density % Solids
Unit Area, m2/t/day6
0.0
50
0.05107
2.7
50
0.03298
5.3
50
0.0302


Note:  Flocculent used was FG 5326




14.1.7  Filtration Tests




Filtration tests were performed on thickened rougher flotation tailing and thickened concentrate in order to size the filtration equipment required for the process flowsheet.




Filtration of Flotation Tailing




A total of four filtration tests were performed with varying amounts of form and cycle time to simulate the disk and drum filters.  The test data summarized in Table 14.1.7.1 indicates filtration rate of 126.7 dry lbs/ft2-hr for disk filter and 50.6 dry lbs/ft2-hr for drum filter.  Due to the higher capacity of the disk filters, we have sized them in the process flowsheet.  The moisture content for the filter cake in both cases was ± 25%.




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Filtration of Flotation Concentrate




Two filtration tests were performed for the thickened concentrate due to the limited amount of concentrate available for the study.  The test data summarized in Table 14.1.12 indicates filtration rate of 118.3 dry lbs/ft2-hr for the disk filter.  The filter cake will contain a moisture content of 21.6%.




Table 14.1.12:  Filtration Data for Flotation Concentrate and Tailings




Sample
% Solids Feed
Filter Type
Form Type
Form Factor
Cycle Time, minute
Filtration Rate dry lb/ft2/hr
% Solids Product
Filter Cake in. ThickRougher Con
53
Disk
Normal
3
1
118.3
78.4
1/4Rougher Con
53
Disk
Normal
3
2
80.3
78.6
1/4Rougher Tailing
46
Disk
Normal
3
1
126.7
75
7/32Rougher Tailing
46
Disk
Normal
3
2
73.2
76
5/16Rougher Tailing
44
Drum
Normal
6
2
50.6
75
7/32Rougher Tailing
46
Drum
Normal
6
4
35.6
78
1/4




14.1.8  Conceptual Process Flowsheet




A conceptual process flowsheet was developed and is shown in Figure 14-1.  The underground ore would be processed in a primary jaw crusher.  The crusher product would be screened on a 1/4in screen deck and the coarse fraction would be conveyed to a secondary crusher.  The crusher product would be send back to the 1/4in screen deck.  The screen undersize would be stored in a fine ore bin.




The ore would be conveyed from the fine ore bin to a ball mill.  The ball mill discharge would be classified using cyclones or rake classifier.  The classifier overflow consisting of 80% finer than 100 mesh would go to flotation and the classifier underflow would go back to the mill.  Potassium amyl xanthate and methyl isobutyl carbonal would be added ahead of the flotation cells.




The rougher concentrate would be thickened, filtered, dried and bagged for shipment to the buyer.




The flotation tailings would also be send to a thickener.  The thickener underflow would be filtered and the filtered material would be used for backfill in the mine.  The process water would be collected and recycled in the flowsheet.




14.2
Summary




The highlights of the study indicate the following:




·
The composite sample prepared from the four individual samples, assayed 17.3g/t Au, 315g/t Ag, 0.182% Cu, 1.198% Pb and 1.164% Zn;


·
The sample had a Bond’s ball mill work index of 15.29;


·
Both bulk-sulfide flotation and sequential lead and zinc flotation schemes were evaluated.  The bulk-sulfide flotation was determined to be best for maximizing precious metals recoveries;


·
Several process variables were evaluated for the bulk-sulfide flotation scheme.  They included primary grind, pH, supplementary collectors and frothers and cleaner flotation.  The optimum process conditions were determined to be a primary grind of P80 of 100 mesh or finer, pH of 9 to 10 and reagent suite of potassium amyl xanthate and methyl


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isobutyl carbonyl.  Cleaner flotation resulted in significant loss of precious metals to the cleaner tailing;


·
The rougher bulk-sulfide flotation will recover approximately 11% of the weight and ±90% of gold and ±85% of silver values; and


·
Thickening and filtration tests were performed on both flotation concentrate and tailings to size thickeners and filters.  The tailings can be used for backfilling the mine.












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15
Mineral Resource Estimate (Item 19)




15.1
Qualified Person of the Mineral Resource Estimate




Dr. Bart Stryhas constructed the geologic and resource model discussed below.  He is responsible for the resource estimation methodology and the resource statement.  Dr. Stryhas is independent of the issuer applying all of the tests in Section 1.4 of NI 43-101.




15.2
Drillhole Database




The drillhole database was partially compiled by previous contractors to Calais, it was completed and verified by SRK.  It is determined to be of high quality.  The database consists of three Microsoft Excel spreadsheets containing collar locations surveyed in local mine grid coordinates, drillhole orientations with down hole deviation surveys and assay intervals with elemental analyses.  The appropriate codes for missing samples and no recovery were used during the modeling procedures.




The database contains information from 116 drillholes totaling 62,384ft combined with an additional 499 continuous channel samples totaling 1,863ft.  The drilling and sampling campaigns were conducted over ten years and were organized in 9 Series.  The maximum drillhole depth is 2,300ft and the average is 538ft.  Most holes were drilled inclined steeply over a wide range of azimuth directions and dip angles.  Twenty five percent of the holes were surveyed for down hole deviations using either acid dip tests, single shots or gyroscopic surveys.  In relation to total drillhole depth, none of the holes 0-500ft long were surveyed, 32% of the holes 500-999ft long were surveyed and 81% of the holes 1000-2300ft long were surveyed.




15.3
Geology




The dominant controls on gold, silver, lead and zinc mineralization at the Cross Mine are structural channeling along dilatational fault and vein planes within an environment chemically favorable for the precipitation of electrum and base metal sulfides.  Deep-seated regional structures appear to have been active at the time of mineralization and have played a vital role in the structural preparation of the host rocks and channeling of the mineralizing fluids.




Individual veins range in width from inches to tens of feet and consist of open space fill zones containing quartz and disseminated sulfides flanked by less mineralized alteration halos.  To date, a total of 14 main veins, each of which average 3ft in true thickness along 300ft of strike length and 350ft of down dip extent.  Altered host rocks within and adjacent to veins typically show limited mineralization due to a lesser amount of rock fracturing and open space fill.  The veins are distributed within two main sets, those which strike predominately east-west to northwest-southeast and those striking north-northeast.  Significant mineralization also occurs within smaller vein structures or breccia zones that have not yet been thoroughly tested or correlated into larger structures.  The main veins and the smaller veins were each estimated using different modeling procedures.




15.4
Block Model




The block model was constructed within the mine grid easting and northing coordinates and true elevation limits listed in Table 15.4.1.  A 3ft cubic block size was chosen as an appropriate dimension for an underground smallest mining unit.  Historical underground workings were digitized from four main levels and ten sublevels surveyed and mapped in 1988.  Raises and


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stopes were also digitized from these same surveys.  Three dimensional solids were created from this information assuming that drift backs were 8ft high and that stopes and raises extended half way to the level above if they were not mapped on upper levels.  It is unlikely that 100% of the actual underground development has been documented.  SRK does not think that enough undocumented workings exist to presents a material risk in the current resource estimate.  All underground development was coded into the block model, it was not assigned grade and was assigned a density of zero.




Table 15.4.1:  Block Model Limits




Orientation
Minimum (ft)
Maximum (ft)
Block Dimension (ft)Easting
8,600
10,200
3Northing
9,900
10,700
3Elevation
8,700
10,000
3




15.5
Compositing




The raw gold and silver assay data was first plotted on histogram and cumulative distribution graphs to understand its basic statistical distribution.  The gold histogram shows a strong positive skewness and the cumulative distribution curve illustrates a continuous population set with a distinct break in continuity at 35g/t Au.  The silver histogram shows a similar positive skewness and its cumulative distribution curve illustrates a continuous population set with a distinct break in continuity at 800g/t Ag.  The original assay lengths range from 0.1 to 21ft with an average of 3.4ft.  For the modeling, these were composited down hole into 3ft lengths with breaks at the vein boundaries.  All un-sampled intervals were assigned a zero grade.  During the grade estimation, the composited gold values were capped at 35g/t resulting in 9 composites ranging between 39g/t and 91.5g/t Au being reduced to 35g/t Au.  The composited silver values were capped at 800g/t resulting in 22 composites ranging between 820g/t and 1,935g/t Ag being reduced to 800g/t Ag.  Further capping was applied to certain metals in certain veins during the model validation as discussed in Section 15.9.  The mineralization at the Cross Mine caries a significant silver credit.




15.6
Specific Gravity




SRK conducted a specific gravity study on the drill core to be used for this resource estimation.  A total of 44 samples were selected from a range of mineralization grades within seven different veins and a variety of depths.  These included:  13 samples from material with less than 1.0g/t Au; 6 samples from material with Au grades between 1.0-3.0g/t and 25 samples from material with Au greater than 3.0g/t.  The SG testing was conducted by ALS Chemex in Reno Nevada, an accredited testing laboratory.  The results showed that the no-grade/low-grade material has a slightly lower density than the higher grade material.  For this study, all non-vein and un-mineralized material was assigned a density of 2.635 g/cm3(0.08230st/ft3) and all vein or mineralized material was assigned a density of 2.649g/cm3(0.08273st/ft3).  Specific gravity was assigned in the block model based on the block centroid locations within the vein wire frame solids and the indicator value assigned for the non-vein material as discussed below.


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15.7
Variogram Analysis




The grade estimation was conducted using two different methods depending on weather the mineralized material was enclosed within a major vein or not as described in Section 15.8.  Since not all mineralization is hosted within mapable veins, a conditional indicator approach was used to estimate grade within the non-vein material.  Indicator flags were assigned to the composites based on an Au equivalent value of 2.0g/t




The variogram analysis was conducted on three variables including: Au composites, Ag composites and indicator values.  These analyses were differentiated into two different domains based to the vein orientations.  The north domain includes the east-west and northwest-southeast striking, Rare Metals, North Rare Metals, Apache, North Apache and Potosi Veins.  The south domain includes all of the remaining veins which are striking mainly north-northeast.  In each of the domains, variograms were constructed using Vulcan software along all directions within the plane of the mineralization for each of the three composite groups.  The resulting range, nugget and sill differential values are presented in Table 15.7.1 below.




Table 15.7.1:  Variogram Results for the Cross Mine




Domain/ Orientation
Variable
Range (ft)
Nugget
C1 Sill DifferentialNorth/ Azimuth 114°, Vertical
Au Composites
60
9
32.5North/ Azimuth 114°, Vertical
Ag Composites
95
5000
50,000North/ Azimuth 114°, Vertical
Indicator Flags
30
0.020
0.023South/ Azimuth 20°, Vertical
Au Composites
40
13
41South/ Azimuth 20°, Vertical
Ag Composites
75
4000
16,600South/ Azimuth 20°, Vertical
Indicator Flags
21
0.037
0.038




15.8
Grade Estimation




Geologic hard boundaries were used to confine the grade estimation within the main vein structures and a categorical indicator method was used to estimate the mineralization outside of the main vein structures.  The vein wireframe shapes were constructed by level plans using the mapping available from Barrett and Schuiling (1988) and Holland (1994) combined with drill hole composite data.  This resulted in the delineation of 14 distinct vein structures as described previously in Section 7.1.




The grade estimation of the mineralized material not included within the main vein structures was conducted using a categorical indicator approach due to the strong spatial grade variability seen in the drilling data.  This method first separates the composite data into lower grade and higher grade groups based on an appropriate cut-off value, in this case 2.0g/t-Au.  Indicator values are then flagged into the composite data such that values below 2.0g/t-Au are flagged with a “0” and those above are flagged with a “1”.  These composite indicators values are then interpolated into the block model thus creating indicator block values between 0 and 1.  The indicator values were interpolated by Ordinary Kriging using the nugget and C1 sill differential parameters listed above in Table 4.6.1.  A min/max of 1/3 composites with no octant restriction was used.  The estimation in the north domain was allowed to search within a 25ft x 25ft x 2ft ellipsoid, oriented within the mineralization plane striking 114° and dipping -90°.  In the South domain, the estimation was allowed to search within a 21ft x 21ft x 2ft ellipsoid, oriented within the mineralization plane striking 20° and dipping -90°.  The interpolation criteria were derived


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mainly from numerous trials and visual inspection of the results combined with the variogram analysis of the indictor flags.




This procedure effectively assigns a probability to each block as to whether it would be above the 2.0g/t-Au cut-off.  Blocks assigned with a value of 0.1 have a 10% probability, a 0.5 have 50% probability and those with a 1.0 have a 100% probability.  For this model, all blocks assigned with a value of 0.3 or 30% probability and above, are considered to be within the 2.0g/t-Au grade shell.  The composites are next flagged with the interpolated block indicator values so that all composites located within the grade shell can be selected during the grade interpolation.  The flagging procedure forces the grade interpolation to use all composites located within the indicator blocks regardless of the grade.  The categorical indicator technique precludes the necessity of creating very complex wire frame grade shells to control grade assignment.




The next step was to run Au and Ag grade interpolations within the veins and indicator blocks of the two orientation domains.  Blocks within each vein were estimated using only composite data from within that same vein.  Numerous grade estimations were conducted using a variety of different modeling criteria.  The results of each estimation, were analyzed by point validation.  This procedure removes a drillhole from the database and then estimates grade for all the composites within it.  It then removes the next drillhole etc. until all composites have been estimated.  An x-y scatter plot is then constructed from the estimated versus actual grades to evaluate the correlation.  Numerous point validation runs are made to test the effects of different of min/max composites per block, octant search limitations and minimum number of drillholes required to assign grade.  Once an optimal set of estimation parameters are determined by point validation, the actual grade interpolation is then conducted.




For the Au and Ag grade assignment, the veins and indicator blocks within the north domain were allowed to search within a 40ft x 40ft x 25ft ellipsoid, oriented within the mineralization plane striking 114° and dipping -90°.  In the South domain the estimation was also allowed to search within a 40ft x 40ft x 25ft ellipsoid, oriented within the mineralization plane striking 20° and dipping -90°.  All block were estimated using a minimum of 1 and maximum of 8 composites per block.  No restriction was placed on the number of drillholes required to assign grade and no octant restriction was used.  The search ellipsoids are based somewhat on the variography but also on the author’s evaluation of what is appropriate for the deposit.  The low minimum number of composites per block and the relatively short search ranges were used to allow grade assignment in areas of sparse drilling and to avoid excess estimation in unwarranted areas.  These techniques were chosen to try to emulate the vein style of mineralization and prevent grade dilution into excessive blocks.




15.9
Block Model Validation




The Cross Mine model was verified using two procedures.  First, the interpolated block grades were visually checked on sections and bench plans for comparison to the composite assay grades.  Second, statistical comparisons were made between the interpolated block data, and the 3ft composite data within each of the veins and indicator domains.  The statistical comparisons showed that the original capping levels of 35gtp Au and 800g/t Ag were appropriate for most of the veins however, several of the veins required further capping.  This issue was seen within the veins and domains where there was relatively limited data and a few high grade intercepts were being used to estimate too many blocks.  More restricted capping was applied to these veins and the model was then rerun and then re-verified.  Five veins were further capped as follows: North


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Rare Metals Au=14g/t, Ag=250g/t; Juliet Ag=75g/t; West Hopewell Ag=400g/t; East Hopewell Au=10g/t, Ag=50g/t and the North Domain Indicator blocks Ag=450g/t.  The results of the final model validation are presented below in Table 15.9.1






Table 15.9.1:  Statistical Comparisons of Au g/t and Ag g/t within Composite Assays and Block Model Assays of Each Vein and Model Domain




Vein/Domain

Variable
Mean Au g/t

# of values

Mean Ag g/t

# of valuesApache

Comps
3.7

232

117

234Blocks
3.4

14,721

84

15,355North Apache

Comps
9.8

63

136

63Blocks
6.5

3,802

98

3,789Potosí

Comps
2.8

138

170

141Blocks
2.4

4,547

89

4,537North Rare Metals

Comps
5.7

28

127

28Blocks
5.6

2,538

118

2,532Rare Metals

Comps
9.0

181

218

178Blocks
6.9

14,283

109

13,567Juliet

Comps
4.2

93

28

79Blocks
4.1

4,694

26

4,606West Romeo

Comps
8.8

104

54

104Blocks
7.9

3,663

38

3,719East Romeo

Comps
6.3

164

67

161Blocks
6.1

4,992

57

4,881Arapaho

Comps
5.6

55

99

52Blocks
3.9

3,311

81

3,302Crown Point

Comps
7.3

156

108

144Blocks
6.3

6,596

89

6,451Crown Cross

Comps
5.2

32

41

32Blocks
4.6

1,115

31

1,115Cross

Comps
5.2

119

73

118Blocks
4.2

3,461

58

3,454West Hopewell

Comps
5.1

32

65

33Blocks
4.1

2,362

59

2,367East Hopewell

Comps
5.4

25

19

25Blocks
5.3

3,622

18

3,622North Domain Indicator

Comps
3.7

449

65

450Blocks
3.3

27,777

64

27,655South Domain Indicator

Comps
4.4

681

32

653Blocks
4.1

32,554

29

32,485




15.10
Resource Classification




The Mineral Resources are classified under the categories of Measured, Indicated and Inferred according to CIM guidelines.  Classification of the resources reflects the relative confidence of the grade estimates.  This is based on several factors including; sample spacing relative to geological and geo-statistical observations regarding the continuity of mineralization, data verification to original sources, specific gravity determinations, accuracy of drill collar locations,


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accuracy of topographic surface, quality of the assay data and many other factors, which influence the confidence of the mineral estimation.  No single factor controls the resource classification rather each factor influences the end result.  Generally, most of the factors influencing the resource classification in the Cross Mine are positive.  The resources have been classified as indicated and inferred based primarily on sample spacing as indicated by drilling density and underground development.  For the resource classification, a solid shape was constructed around the core of the deposit where most drillholes are spaced less than 50ft apart and the veins have been exposed, mapped and channel sampled.  All blocks located within this area were classified as indicted and all blocks located outside of it were classified as inferred.  Figure 15-1 is a 3-D view showing the extents of the Indicated Resource boundary




15.11
Mineral Resource Statement




The Cross Mine mineral resource statement is presented below in table 15.11.1.  The results reported in the resource statement have been rounded to reflect the approximation of grade and quantity which can be achieved at this level of resource estimation.




The resource is reported at a 0.2oz/st Au cut-off based on a mining cost of US$85.00/st, a transport cost of US$45.00/st, a crushing and processing cost of US$132.00/st, recovery of 95%, G&A cost of $32.00/st and a US$1,200/oz Au value.  The effective date of the Mineral Resource estimate is February 8, 2011.




Table 15.11.1:  Cross Mine Mineral Resource Statement




Resource Category
Au oz/st Cut-off
kst
Au Grade (oz/st)
Ag Grade (oz/st)
Contained Au

(oz)
Contained Ag

(oz)Indicated
0.2
33
0.360
5.4
11,824
175,170Inferred
0.2
32
0.335
2.2
10,850
71,860




Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  Mineral Resource estimates do not account for mineability, selectivity, mining loss and dilution.  These Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves.  There is also no certainty that these Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied.




15.12
Mineral Resource Sensitivity




The grade tonnage distributions of the indicated and inferred mineral resources at the Cross Mine are presented in Tables 15.12.1 and 15.12.2 and Figures 15-2 and 15-3.




Table 15.12.1:  Cross Mine Indicated Mineral Resource Sensitivity




Au oz/st  Cut-off
kst
Au Grade (oz/st)
Ag Grade (oz/st)
Contained Au

(oz)
Contained Ag

(oz)0.10
71.3
0.242
3.71
17,240
264,5470.15
46.7
0.304
4.60
14,211
214,8620.20
32.8
0.360
5.34
11,824
175,1680.25
24.4
0.407
5.95
9,929
145,0520.30
19.1
0.444
5.83
8,469
111,185


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Table 15.12.2:  Cross Mine Inferred Mineral Resource Sensitivity




Au oz/st  Cut-off
kst
Au Grade (oz/st)
Ag Grade (oz/st)
Contained Au

(oz)
Contained Ag

(oz)0.10
80.3
0.218
1.74
17,543
139,7200.15
48.1
0.282
2.12
13,552
101,9650.20
32.4
0.335
2.22
10,848
71,8590.25
22.0
0.386
2.48
8,516
54,7040.30
14.7
0.443
2.89
6,513
42,495

















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Figure 15-1:  Cross Project 3-D View of Indicated Resource Boundary





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Figure 15-2:  Grade versus Tonnage Relations within the Indicated Mineral Resource at the Cross Project







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Figure 15-3:  Grade versus Tonnage Relations within the Inferred Mineral Resource at the Cross Project







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16
Other Relevant Data and Information (Item 20)




There is no other relevant data or information to include in this report.


















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17
Interpretation and Conclusions (Item 21)




17.1
Exploration




The 1982-1998 exploration programs were responsible for advancing the Cross Mine from an under explored condition to that which can support a NI43-101 resource estimation.  These programs mapped, sampled and diamond core drilled extensions to all known veins, discovered several new veins and indicated several areas of anomalous mineralization.  The exploration programs were well thought out and conducted in a professional manner.




Drilling was conducted by reputable contactors and most of the deeper drillholes were surveyed for down hole deviation.  The core was logged, split and sampled properly.  All samples were analyzed using appropriate assay procedures of the time.  The drill logging and assay results were correctly compiled onto cross-sections.




The exploration work resulted in the delineation of anomalous gold mineralization located within at least 14 veins, each of which average 3ft (1m) in true thickness along 300ft (91m) of strike length and 350ft (107m) of down dip extent.  The drilling and assay results of the exploration work described above were subsequently incorporated into historical resource estimates (Barrett and Schuiling (1988), Barrett (1990), Rescan (1996), Akright (1998), Stevens (1998) as discussed in Section 4.3.




17.2
Analytical and Testing Data




SRK is of the opinion that the analytical work performed by the Skyline, Cone, Root and Simpson and Barringer Labs on the Cross mineralization was good, and suitable for use in resource estimation.  The fire assay with an atomic absorption finish method is commonly used for gold and silver analysis today.




There are no references in any of the documents supplied to SRK pertaining to security procedures in effect at the drill site and field camp.  During the late 1980’s and 1990’s it was not a standard component of project reporting to document these routines of the project operation.  Industry and corporate standards have always been to prohibit any outsiders to handle or inspect fresh drill core at any stage of exploration operations.  The drill core is typically picked up at the drill site by the geologist or designated assistant, or delivered by the driller at the end of shift.  At the core logging facility, only the geologist and assistant help are permitted to handle and prepare the core.  Transportation of the split bagged core to a laboratory facility is usually handled by commercial carriers in bulk form in boxes, larger sacks, pallets, or buckets.




SRK assumes the drill core for the 1982-1998 program was handled in the accustomed industry manner by drill contractors, geologists, and transportation carriers, and was not compromised by outsiders.




Operators during the 1987 to 1993 exploration programs conducted duplicate assay analysis of core pulps.  The results of this work showed that neither Skyline Labs nor Cone Geochemical reported any systematic bias in their results.




17.3
Resource Estimation




The Cross Mine resource estimation is based on information from 116 drillholes totaling 62,384ft combined with an additional 499 continuous channel samples totaling 1,863ft.  The drillhole database was completed and verified by SRK personnel and is determined to be of high


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quality.  The resource estimation employed wire frame solids shapes of the 14 main veins and a categorical indicator technique to develop a 2.0g/t Au grade shell for mineralization not encompassed by the main veins.  The model blocks are uniform 3.0ft x 3.0ft x 3.0ft cubes and all block grade estimates were made using 3.0ft down hole composites.  An Ordinary Kriging grade estimation algorithm was employed using a minimum of 1 and a maximum of 8 composites with no octant search restriction and no restriction on the number of drillholes.




The results of the resource estimation provided a CIM classified Indicated Mineral Resource of 33kst of material with an average grade of 0.360oz/st Au and an additional Inferred Mineral Resource of 32kst of material with an average grade of 0.335oz/st Au both using a 0.2oz/st Au cut-off.  The quality of the Cross Mine drilling and sampling data is very good and the Mineral Resource was classified mainly according to the general drillhole spacing and underground sampling on the veins.




17.4
Summary




SRK was commissioned by Calais to prepare a NI 43-101 compliant Technical Report on Resources for the Project including a description and evaluation of historical exploration work and a resource estimate categorized by CIM guidelines.  This objective has been met.  The historical data was found to be collected and documented by appropriate techniques and verified by modern standards in sufficient detail to support the mineral resource estimation of this report.






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18
Recommendations(Item 22)




18.1
Recommended Work Programs




Infill and step out drilling continuing west along the Apache/Golconda veins and along the Anaconda veins should be completed at the Cross Mine area.  This would be the first phase of a comprehensive drilling program to estimate resources.




Additional drill programs, should then focus on the No Name Vein, the Caribou Park Zone, the Pandora/Pomoroy Mountain Veins, the Idaho Hill Veins, and the area between the Boulder County and Cross Mine.




18.1.1  Costs




Table 18.1.1 shows a proposed budget for recommended phase 1 drilling program




Table 18.1.1:  Phase I and Phase II Drilling Recommendations




Phase I Drilling ProgramCore Drilling Apache/Golconda and Anaconda (60,000ft)
Year 1
US$2,400,000Project management and general overhead

US$250,000Total
12 Months
US$2,650,000Phase II Resource EvaluationNI 43-101 Technical Report
3 Months
$150,000









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19
References(Item 23)




Akright, R.L. (1998), Gold and Silver Resource Review-Cross and Caribou Mines Area-Boulder County, Colorado, Internal company report June 1998, 11p plus appendices
  Barrett, L.F. and Schuiling, W.T. (1988), Project Status and Recommendations for Continued Evaluation of the Cross Mine, Internal company report, June 14, 1988, 117p plus appendices
  Barrett, L.F. (1990), Immediate Mine Area Resources- Cross Mine- Boulder Co, Colorado, Internal company report, 5p plus appendices
  Blakey, R.C. (October, 1997), Paleogeography of the Southwestern U.S., Geologic Society of America Presentation October 1997, www2.nau.edu/rcb7/paleogeowus.html


Burlingame, W.E. (July 19, 1939), Report on the Property of the Cross Gold Mining Company, Caribou, Colorado, Internal company report, July 19, 1939. 13p




Dentler, P.L. (1984), Geology and Ore Deposits of the Cross Mine, Bolder Co, Colorado, unpublished MSc thesis, University of Colorado, 108p




Finion, L.R. (1992), Petrology, Paleostratigraphy, and paleotectonics of a Proterozoic Metasedimentary and Metavolcanic Sequence in the Colorado  Front Range, unpublished MSc. Thesis, Colorado School of Mines, 283p




Forster, E.L. and Carroll, C.M. (July 2, 1890), Report to Mr. George teal on the Cross Gold Mine, Internal company report, July 2, 1890, 6p




Francis, K.A., (1987), Geology and Geochemistry of the Caribou Mine, Boulder Co. Colorado, unpublished MSc thesis, University of Colorado, 120p




Gable D.J., (1984), Geologic Setting and Petrochemistry of the Late Cretaceous-Early Tertiary Intrusives in the Northern Front Range Mineral Belt, Colorado, United States Geologic Survey Professional Paper 1280, 33p




Geller, B.A., (1993), Mineralogy and Origin of the Telluride Deposits in Boulder Co. Colorado, unpublished PhD. Dissertation, University of Colorado, 731p




Hedge, C.E., Peterman, Z.E., and Braddock, W.A. (1967), Age of the Major Precambrian Regional Metamorphism in the Northern Front Range, Colorado, Geological Society of America Bulletin, v 78, p 551-558




Hendricks, T. S. (1991), The Cross Gold Mine-An Update, Hendricks Mining Co. internal company report June 1, 1991. 4p




Hendricks, T.S. (1998), Historic Summary-Caribou District Mines- Hendricks mining Co.- Caribou, Colorado, Internal company report January 12, 1998. 5p




Jansen, G.L., (1984), Petrographic Data on the Cross Gold Mine, unpublished United States Bureau of Mines Report, 22p




Jobodwana, M., (1991), Geochemistry, Ore Mineralogy and Hydrothermal Alteration of the Cross Gold Mine, unpublished MSc thesis, University of Colorado, 128p


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Joyce, J.T. (1927), Bureau of Mines Inspectors Report, State of Colorado Bureau of Mines, June 18th 1927, 2p




Joyce, J.T. (1932), Bureau of Mines Inspectors Report, State of Colorado Bureau of Mines, January 5th 1932, 2p




Lovering, T.S. and Goddard, E.N., (1950), Geology and Ore Deposits of the Front Range, Colorado, United States Geological Survey Professional Paper  #223, 319p




Marvin, R.R., Young, E.J. Mehnert, H.H. and Naeser, C.W. eds (1974), Summary of Radiometric Age Determinations on Mesozoic and Cenozoic Igneous Rocks and Uranium Base Metal Deposits in Colorado, Isochron/West, no. 11, 41p




Miller, H.W., (1983), Mineralogical Report on the Caribou Mine, Boulder Co. Colorado, internal company report Hendricks Mining Co. Inc., 3p




Moore, F.B., Cavender, W.S. and Kaiser, E.P., (1957), Geology and Uranium Deposits of the Caribou Area, Boulder Co. Colorado, United States Geological Survey Bulletin 1030-N, 21p




Panteleyev, A., (1988), A Canadian Cordilleran Model for Epithermal Gold-Silver Deposits, Ore Deposit Models Geological Association of Canada Special reprint Series, 13p




Stevens, M.G. (1998), Cross/Caribou Mines Geologic Resource Calculation Review-PAH Project No 9219.00, Internal company report, July 17, 1998, 8p




Teal, G.H. (1937), Brief report on Mining Properties of the Cross Mining Company, Caribou Colorado, Internal company report, February 1, 1937. 11p




Turnburke Associates, (August 29, 2007), Town of Nederland Colorado Strategic Master Plan, Public document Turnburke Associates Landscape Architectural Planning, August 29, 2007, 27p




Tweto, O and Sims P.K. (1963), Precambrian Ancestor of the Colorado Mineral Belt, Geological Society of America Bulletin, v 74, no. 8, p 991-1014




Watts, Griffis and McQuat Ltd (July 7, 1983), Assessment of the Caribou District Mining Properties Caribou Colorado for North American Power Petroleums Inc., internal company report July 7, 1983, Toronto Canada, 20p




Wilson, A.B. and Sims, P.K. (2003), Colorado Mineral Belt Revisited-An Analysis of New Data, United States Geological Survey Open File Report 03-046, 4 p plus plates






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20
Glossary and Abbreviations




20.1
Mineral Resources and Reserves




20.1.1  Mineral Resources




The mineral resources and mineral reserves have been classified according to the “CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines” (December 11, 2005).  Accordingly, the Resources have been classified as Measured, Indicated or Inferred, the Reserves have been classified as Proven, and Probable based on the Measured and Indicated Resources as defined below.




A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.  The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.




An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.  The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes.




An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed.




A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity.




20.1.2  Mineral Reserves




A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study.  This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.  A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.


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A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study.  This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.




A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study.  This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.








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20.2
Glossary




Table 20.2.1:  Glossary




Term
DefinitionAssay:
The chemical analysis of mineral samples to determine the metal content.Capital Expenditure:
All other expenditures not classified as operating costs.Composite:
Combining more than one sample result to give an average result over a larger distance.Concentrate:
A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the ore.Crushing:
Initial process of reducing ore particle size to render it more amenable for further processing.Cut-off Grade (CoG):
The grade of mineralized rock, which determines as to whether or not it is economic to recover its gold content by further concentration.Dilution:
Waste, which is unavoidably mined with ore.Dip:
Angle of inclination of a geological feature/rock from the horizontal.Fault:
The surface of a fracture along which movement has occurred.Footwall:
The underlying side of an orebody or stope.Gangue:
Non-valuable components of the ore.Grade:
The measure of concentration of gold within mineralized rock.Hangingwall:
The overlying side of an orebody or slope.Haulage:
A horizontal underground excavation which is used to transport mined ore.Hydrocyclone:
A process whereby material is graded according to size by exploiting centrifugal forces of particulate materials.Igneous:
Primary crystalline rock formed by the solidification of magma.Kriging:
An interpolation method of assigning values from samples to blocks that minimizes the estimation error.Level:
Horizontal tunnel the primary purpose is the transportation of personnel and materials.Lithological:
Geological description pertaining to different rock types.LoM Plans:
Life-of-Mine plans.LRP:
Long Range Plan.Material Properties:
Mine properties.Milling:
A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product.Mineral/Mining Lease:
A lease area for which mineral rights are held.Mining Assets:
The Material Properties and Significant Exploration Properties.Ongoing Capital:
Capital estimates of a routine nature, which is necessary for sustaining operations.Ore Reserve:
See Mineral Reserve.Pillar:
Rock left behind to help support the excavations in an underground mine.RoM:
Run-of-Mine.Sedimentary:
Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks.Shaft:
An opening cut downwards from the surface for transporting personnel, equipment, supplies, ore and waste.Sill:
A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection of magma into planar zones of weakness.Smelting:
A high temperature pyrometallurgical operation conducted in a furnace, in which the valuable metal is collected to a molten matte or doré phase and separated from the gangue components that accumulate in a less dense molten slag phase.Stope:
Underground void created by mining.Stratigraphy:
The study of stratified rocks in terms of time and space.Strike:
Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction.Sulfide:
A sulfur bearing mineral.Tailings:
Finely ground waste rock from which valuable minerals or metals have been extracted.Thickening:
The process of concentrating solid particles in suspension.Total Expenditure:
All expenditures including those of an operating and capital nature.Variogram:
A statistical representation of the characteristics (usually grade).


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Abbreviations




All currency is in U.S. dollars.  Market prices are reported in US$ per troy oz of gold and silver.  Tons are imperial short or 2,000lbs, unless otherwise stated.  The following abbreviations are typical mining terms that may be used in this report.






Table 20.2.2:  Abbreviations




Abbreviation
Unit or TermA
ampereAA
atomic absorptionA/m2
amperes per square meterAg
silverAu
gold°C
degrees CentigradeCCD
counter-current decantationCIL
carbon-in-leachCoG
cut-off gradecm
centimetercm2
square centimetercm3
cubic centimetercfm
cubic feet per minuteCRec
core recoveryCTW
calculated true width°
degree (degrees)dia.
diameterEIS
Environmental Impact StatementEMP
Environmental Management PlanFA
fire assayft
foot (feet)ft2
square foot (feet)ft3
cubic foot (feet)g
gramgal
gallong/L
gram per literg-mol
gram-molegpm
gallons per minuteg/st
grams per short tonha
hectaresHDPE
Height Density Polyethylenehp
horsepowerHTW
horizontal true widthICP
induced couple plasmaID2
inverse-distance squaredID3
inverse-distance cubedIFC
International Finance CorporationILS
Intermediate Leach SolutionkA
kiloampereskg
kilogramskm
kilometerkm2
square kilometerkoz
thousand troy ouncekst
thousand short tonskstpd
thousand short tons per daykstpy
thousand short tons per yearkV
kilovoltkW
kilowattkWh
kilowatt-hourkWh/st
kilowatt-hour per short tonsL
literLps
liters per second  SRK Consulting (U.S.), Inc.

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   lb
poundLHD
Long-Haul Dump truckLLDDP
Linear Low Density Polyethylene PlasticLOI
Loss On IgnitionLoM
Life-of-Minem
meterm2
square meterm3
cubic metermt
metric tonnemasl
meters above sea levelmg/L
milligrams/litermm
millimetermm2
square millimetermm3
cubic millimeterMME
Mine & Mill EngineeringMoz
million troy ouncesmt
metric tonnesMt
million tonsMTW
measured true widthMW
million wattsm.y.
million yearsNI 43-101
Canadian National Instrument 43-101oz
troy ounceoz/st
ounces per short tons%
percentPMF
probable maximum floodppb
parts per billionppm
parts per millionQA/QC
Quality Assurance/Quality ControlRC
rotary circulation drillingRoM
Run-of-Mines
secondSG
specific gravityst
short ton (2,000 pounds)t
ton (2,204.6 pounds)tph
tons per hourtpd
tons per daytpy
tons per yearTSF
tailings storage facilityμm
micron or micronsV
voltsVFD
variable frequency driveW
wattXRD
x-ray diffractionyr
year




SRK Consulting (U.S.), Inc.

Caribou_NI 43-101_Resources_161800.050_KG_006.doc
August 29, 2011












Appendix A






Certificate of Author











SRK CONSULTING
SRK Consulting (U.S.), Inc.

7175 West Jefferson Avenue, Suite 3000

Lakewood, CO

USA 80235



denver@srk.com

www.srk.com



Tel:   303.985.1333

Fax:  303.985.9947








CERTIFICATE of AUTHOR








I, Bart A. Stryhas Ph.D. CPG # 11034 do hereby certify that:





1.
I am a Principal Resource Geologist of:





SRK Consulting (U.S.), Inc.


7175 W. Jefferson Ave, Suite 3000


Denver, CO, USA, 80235




2.
I graduated with a Doctorate degree in structural geology from Washington State University in 1988.  In addition, I have obtained a Master of Science degree in structural geology from the University of Idaho in 1985 and a Bachelor of Arts degree in geology from the University of Vermont in 1983.




3.
I am a current member of the American Institute of Professional Geologists.




4.
I have worked as a Geologist for a total of 23 years since my graduation from university with experience in minerals exploration, mine geology, project development and resource estimation.  I have conducted resource estimations since 1988 and have been involved in technical reports since 2004.




5.
I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.




6.
I am responsible for all sections of the report titled “Updated NI 43-101 Technical Report on Resources, Calais Resources Inc., Consolidated Caribou Project, Boulder County, Colorado, USA” and dated August 29, 2011 (the “Technical Report”) relating to the Caribou Consolidated Project.  I visited the Caribou Consolidated property on February 20, 2008.




7.
I have had prior involvement with the property that is the subject of the Technical Report.  I was the QP responsible for all sections of the report titled “NI 43-101 Technical Report on Exploration, Calais Resources Inc., Consolidated Caribou Project, Boulder County, Colorado, USA” and dated February 8, 2011 relating to the Caribou Consolidated Project











Group Offices:

Africa

Asia

Australia

Europe

North America

South America
Canadian Offices:

Saskatoon    306.955.4778

Sudbury             705.682.3270

Toronto             416.601.1445

Vancouver    604.681.4196

Yellowknife 867.445.8670
U.S. Offices:

Anchorage      907.677.3520

Denver                 303.985.1333

Elko                      775.753.4151

Fort Collins    970.407.8302

Reno                     775.828.6800

Tucson                 520.544.3688




SRK Consulting (US), Inc.
Page 2 of 2






8.
I am independent of the issuer applying all of the tests in Section 1.4 of National Instrument 43-101.




9.
I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.




10.
I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.




11.
As of the date of the certificate, to the best of the qualified person’s knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.








Dated this 29th Day of August, 2011.







“Signed”


Dr. Bart A. Stryhas
















Updated NI 43-101 Technical Report on Resources, Calais Resources Inc., Consolidated Caribou Project, Boulder County, Colorado, USA, February 8, 2011








Dated this 29th Day of August, 2011.













“Signed”                                                                                     “Sealed”




Dr. Bart Stryhas, PhD, CPG                                                     CPG # 11034