Tacora Scully Mine FS NI43101 20180205

Feasibility Study
Technical Report for the

Scully Mine Re-Start Project
Wabush, Newfoundland & Labrador
Prepared for:
Tacora Resources Inc.

102 NE 3rd Street, Suite 120
Grand Rapids, Minnesota 55744
Prepared by:
G Mining Services Inc. Louis-Pierre Gignac, P. Eng. G Mining Services Inc.

7900 Boul. Taschereau, Suite 200 Rejean Sirois, P. Eng. G Mining Services Inc.
Brossard, QC, J4X 1C2 Étienne Bernier, P. Eng. G Mining Services Inc.
Karl-Emmanuel Giroux, P. Eng. Ausenco
Rémi Lapointe, P. Eng. Ausenco
Ausenco Martin St-Amour, P. Eng. Ausenco
555 Boul. René-Lévesque Ouest, Suite 200 David Sims, P.Geo Ausenco
Montréal, QC, H2Z 1B1 Craig Bugden, P. Eng. SEM Limited
Effective Date: December 22, 2017

Issue Date: December 22, 2017
IMPORTANT NOTICE
This report was prepared as a National Instrument 43-101 Technical Report, in accordance with
Form 43-101F1, for Tacora Resources Inc. by Ausenco and G Mining Services Inc. The quality of
information, conclusions, and estimates contained herein is based on: i) information available at
the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions,
and qualifications set forth in this report.
Tacora Resources Inc. is authorized to file this report as a Technical Report with Canadian
Securities Regulatory Authorities pursuant to Canadian securities legislation. Except for the
purposes legislated under Canadian securities law, any other use of this report by any third party
is at that party’s sole risk.
Qualified Persons
Prepared by:
_Louis-Pierre Gignac____________ Date: December 22, 2017

Louis-Pierre Gignac, P.Eng.,
Co-President
G Mining Services Inc.
_Rejean Sirois_________________ Date: December 22, 2017

Rejean Sirois, P.Eng.,
Vice-President Geology
_Étienne Bernier_______________ Date: December 22, 2017

Étienne Bernier, P.Eng.,
Project Engineer
_Karl-Emmanuel Giroux__________ Date: December 22, 2017

Karl-Emmanuel Giroux, P.Eng.,
Ausenco
_Rémi Lapointe_________________ Date: December 22, 2017

Rémi Lapointe, P.Eng.,
Ausenco
_Martin St-Amour_______________ Date: December 22, 2017

Martin St-Amour, P.Eng.,
Ausenco
_David Sims_______________ Date: December 22, 2017

David Sims, P.Geo.,
Ausenco
_Craig Bugden_______________ Date: December 22, 2017

Craig Bugden, P.Eng.,
Sikumiut Environmental Management Limited
Tacora Resources Inc. Feasibility Study Technical Report
Table of Contents
1 EXECUTIVE SUMMARY 1-1

Summary of average life-of-mine metrics ..................................................................... 1-1
Introduction ................................................................................................................... 1-2
Access, Local Resources and Infrastructure ................................................................ 1-3
Geology ......................................................................................................................... 1-4
Mineral Resource Estimate ........................................................................................... 1-5
Mineral Reserves .......................................................................................................... 1-7
Mining ........................................................................................................................... 1-9
Mineral Processing and Metallurgical Testing ............................................................ 1-11
Recovery Methods ...................................................................................................... 1-12
Crushing and Ore Handling .................................................................... 1-15
Grinding .................................................................................................. 1-15
Wet Concentration and Tails Thickener ................................................. 1-16
Dryers ..................................................................................................... 1-16
Dry Concentration ................................................................................... 1-17
High Manganese By-Product .................................................................. 1-17
Tailings Management ............................................................................. 1-18
Mine Infrastructure ...................................................................................................... 1-18
Port Infrastructure ....................................................................................................... 1-19
Tailings and Surface Water Management .................................................................. 1-19
Environment ................................................................................................................ 1-20
Market Studies ............................................................................................................ 1-22
Capital Cost Estimate ................................................................................................. 1-24
Operating Cost Estimate ............................................................................................. 1-27
Plant Maintenance Program ....................................................................................... 1-29
Economic Analysis ...................................................................................................... 1-29
Financial Model and Results ................................................................... 1-30
Interpretation and Conclusions ................................................................................... 1-30
Geology and Mineral Resources ............................................................ 1-30
Mining and Mineral Reserves ................................................................. 1-32
Processing .............................................................................................. 1-33
Transportation ......................................................................................... 1-34
Tailings Storage Facility and Dams ........................................................ 1-34
Electrical, Instrumentation and Controls ................................................. 1-35
Recommendations ...................................................................................................... 1-35
Geology and Mineral Resources ............................................................ 1-36
Mining and Mineral Reserves ................................................................. 1-36
Environmental Permitting ........................................................................ 1-37
Processing .............................................................................................. 1-37
Table of Contents December 22, 2017 Page i

Tailings Storage Facility and Dams ........................................................ 1-38

Plant Structures and foundations............................................................ 1-38
Electrical, Instrumentation and Controls ................................................. 1-38
Plant Maintenance .................................................................................. 1-39
Project Execution .................................................................................... 1-39
2 INTRODUCTION 2-1
Background ................................................................................................................... 2-1
Scope ............................................................................................................................ 2-2
Basis of the Report ....................................................................................................... 2-3
Project Description ........................................................................................................ 2-3
Qualified Persons and Site Visits .................................................................................. 2-4
3 RELIANCE ON OTHER EXPERTS 3-1
4 PROPERTY DESCRIPTION AND LOCATION 4-1
Property Description & Location ................................................................................... 4-1
Mineral Titles ................................................................................................................. 4-3
Lot #1 ........................................................................................................ 4-4
Lots #2, #3 and #4 .................................................................................... 4-4
Wabush Mountain Area ................................................................................................ 4-5
Flora Lake Tailings Disposal Area ............................................................ 4-5
Mining Lease #1............................................................................................................ 4-7
Wabush Mountain Area ................................................................................................ 4-7
Tailings .......................................................................................................................... 4-7
Royalties, Agreements, Encumbrances........................................................................ 4-7
Mineral Royalties ...................................................................................... 4-7
Encumbrances .......................................................................................... 4-7
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURES AND
PHYSIOGRAPHY 5-1
Access .......................................................................................................................... 5-1
Climate .......................................................................................................................... 5-1
Local Resources ........................................................................................................... 5-1
Infrastructure ................................................................................................................. 5-2
Roads ........................................................................................................ 5-2
Process Facility ......................................................................................... 5-2
Services Buildings & Ancillary Facilities ................................................... 5-2
Power Supply & Distribution ..................................................................... 5-3
Water Supply & Tailings Storage .............................................................. 5-3
Rail & Port Infrastructure .......................................................................... 5-3
Physiography ................................................................................................................ 5-4
6 HISTORY 6-1
Prior & Current Ownership ............................................................................................ 6-1
Exploration & Development History .............................................................................. 6-1
Historic Drilling .............................................................................................................. 6-2
Historical Production ..................................................................................................... 6-2
Table of Contents December 22, 2017 Page ii

Historic Resource Estimate .......................................................................................... 6-2

7 GEOLOGICAL SETTING 7-1
7.1 Regional Geology ......................................................................................................... 7-1
7.2 Local Geology ............................................................................................................... 7-5
7.2.2 Mineralisation ............................................................................................ 7-7
7.2.3 Structural Geology .................................................................................. 7-11
8 DEPOSIT TYPES 8-1
9 EXPLORATION 9-1
Gravity Surveys ............................................................................................................. 9-1
Magnetic Surveys ......................................................................................................... 9-1
10 DRILLING 10-1
Previous Drilling .......................................................................................................... 10-1
Pre-1969 drilling .......................................................................................................... 10-1
Drilling programs 1969-2005 ...................................................................................... 10-1
Drilling Programs Around the Boot Area..................................................................... 10-8
Drilling Program 2008 – Geotechnical Program ......................................................... 10-8
Drilling Program 2010 and 2011 ................................................................................. 10-8
Drill Hole Locations ................................................................................................... 10-10
Downhole Surveys .................................................................................................... 10-10
Core Shack ............................................................................................................... 10-10
Core Logging ............................................................................................................ 10-11
11 SAMPLING, PREPARATION, ANALYSES AND SECURITY 11-1
Core Logging .............................................................................................................. 11-1
Exploration Drill Core Logging ................................................................ 11-1
Blasthole Logging and Sampling ............................................................ 11-5
Core Sampling, Security and Chain-of-Custody ......................................................... 11-7
Sampling Summary..................................................................................................... 11-7
Analytical Laboratories................................................................................................ 11-7
Sample Preparation and Analytical Procedures ......................................................... 11-8
Analysis ....................................................................................................................... 11-8
Crude Grades ......................................................................................... 11-8
Weight Recovery and Concentrate Grades ............................................ 11-9
Specific Gravity Measurements .................................................................................. 11-9
Quality Assurance and Quality Control Procedures ................................................. 11-10
Conclusions .............................................................................................................. 11-10
12 DATA VERIFICATION 12-1
Introduction ................................................................................................................. 12-1
Outline of Re-Sampling Program and Sample Selection............................................ 12-1
Comparison Between Scully Database and SGS Assay Results – Crude Fe% ........ 12-3
Comparison Between Scully Database and SGS Assay Results – Crude Mn % ...... 12-5
Comparison Between Scully Database and SGS Assay Results – Crude Magnetite %12-
6
Table of Contents December 22, 2017 Page iii

Quality Assurance and Quality Control ....................................................................... 12-8

Bulk Density ................................................................................................................ 12-9
Recommendations .................................................................................................... 12-10
Conclusion ................................................................................................................ 12-10
13 MINERAL PROCESSING AND METALLURGICAL TESTING 13-1
Introduction ................................................................................................................. 13-1
Feed material .............................................................................................................. 13-3
Mn Reduction Line ...................................................................................................... 13-5
Concentrate Grade ..................................................................................................... 13-7
14 MINERAL RESOURCE ESTIMATE 14-1
Introduction ................................................................................................................. 14-1
Exploration Drill Holes ............................................................................ 14-1
Blast Hole Database ............................................................................... 14-8
Modelling ..................................................................................................................... 14-8
Geology Model ........................................................................................ 14-9
Fault Block Domains ............................................................................. 14-12
Structural Domains ............................................................................... 14-13
Overburden ........................................................................................... 14-15
Topography Surface ............................................................................. 14-15
Statistical Analysis .................................................................................................... 14-15
Assay Statistics ..................................................................................... 14-16
Compositing .......................................................................................... 14-22
Exploratory Data Analysis ..................................................................... 14-22
Blasthole vs. Composite Comparison – Q:Q Plots ............................... 14-27
Grade Capping...................................................................................... 14-31
Variography........................................................................................... 14-32
Block Modelling ......................................................................................................... 14-35
Block Model Parameters ....................................................................... 14-35
Rock Type Model and Estimation Domains .......................................... 14-36
Density Model ....................................................................................... 14-38
Estimation Methodology ....................................................................... 14-39
Weighted-averaging of estimated grades ............................................. 14-42
Mineral Resource Classification ............................................................................... 14-43
Block Model Estimation Validation............................................................................ 14-45
Visual Validation ................................................................................... 14-46
Statistical Validation .............................................................................. 14-46
Quantile: Quantile Plots ........................................................................ 14-49
Local Statistical Validation – Swath Plots ............................................. 14-51
Blastholes Vs. Exploration Drill Holes Reconciliation ........................... 14-54
Constrained Mineral Resources ............................................................................... 14-56
Optimization Parameters ...................................................................... 14-56
Open-Pit Constrained Mineral Resource .............................................. 14-56
Grade Sensitivity Analysis .................................................................... 14-58
15 MINERAL RESERVES ESTIMATE 15-1
Table of Contents December 22, 2017 Page iv

Summary..................................................................................................................... 15-1
Resource Block Model ................................................................................................ 15-2
Pit Optimization ........................................................................................................... 15-4
Pit Slope Geotechnical Assessment ....................................................... 15-4
Mining Dilution and Ore Loss.................................................................. 15-9
Pit Optimization Parameters ................................................................. 15-10
Open Pit Optimization Results .............................................................. 15-11
Mine Design .............................................................................................................. 15-19
Slope Design Criteria ............................................................................ 15-19
Ramp Design Criteria ........................................................................... 15-19
Open Pit Mine Design Results .............................................................. 15-21
Mineral Reserve Statement ...................................................................................... 15-26
16 MINING METHODS 16-1
Introduction ................................................................................................................. 16-1
Mine Designs .............................................................................................................. 16-1
Open Pit Phases ..................................................................................... 16-1
Overburden and Waste Rock Storage .................................................... 16-5
Ore Stockpiles ......................................................................................... 16-8
Mine Haul Roads .................................................................................... 16-8
Production Schedule ................................................................................................... 16-9
Production Schedule Optimization.......................................................... 16-9
Mine Production Schedule ...................................................................... 16-9
Mill Production Schedule ...................................................................... 16-24
Mine Operations and Equipment Selection .............................................................. 16-30
Mine Operations Approach ................................................................... 16-30
Drilling and Blasting .............................................................................. 16-30
Ore Control ........................................................................................... 16-33
Loading ................................................................................................. 16-33
Hauling .................................................................................................. 16-34
Dewatering ............................................................................................ 16-38
Road and Dump Maintenance .............................................................. 16-42
Support Equipment ............................................................................... 16-42
Mine Maintenance................................................................................. 16-42
Mine Management and Technical Services .......................................... 16-43
Roster Schedules.................................................................................. 16-43
Equipment Usage Model Assumptions ................................................. 16-44
Fleet Management ................................................................................ 16-46
Pit Slope Monitoring .............................................................................. 16-46
Electric Cable Handling ........................................................................ 16-47
Aggregate Plant .................................................................................... 16-47
Mine Equipment Requirements ................................................................................ 16-47
Mine Manpower Requirements ................................................................................. 16-49
17 RECOVERY METHOD 17-1
Introduction ................................................................................................................. 17-1
Flowsheet Process Description and Mass Balance .................................................... 17-3
Table of Contents December 22, 2017 Page v

Milling Methodology and Concentrate Handling ......................................................... 17-7

Crushing and Ore Handling .................................................................... 17-7
Grinding ................................................................................................ 17-10
Wet Concentration and Tails Thickener ............................................... 17-10
Dryers ................................................................................................... 17-11
Dry Concentration ................................................................................. 17-11
High Manganese By-Product ................................................................ 17-12
Concentrate Silo Load-Out ................................................................... 17-14
Tailings Management ........................................................................... 17-16
Water Balances ......................................................................................................... 17-16
Instrumentation and Controls .................................................................................... 17-19
Instrumentation ..................................................................................... 17-19
Controls ................................................................................................. 17-19
18 PROJECT INFRASTRUCTURES 18-1
General ....................................................................................................................... 18-1
Rail & Port Infrastructure............................................................................................. 18-1
On Site Track .......................................................................................... 18-1
Railcars ................................................................................................... 18-1
Main Railway........................................................................................... 18-2
Train Unloading and Ship Loading ......................................................... 18-2
Buildings (Process and Non-Process) ........................................................................ 18-2
Structural Repairs ................................................................................... 18-2
Tailings Impoundment Area (TIA) ............................................................................... 18-3
Geotechnical ............................................................................................................. 18-16
Electrical Installations ............................................................................................... 18-16
46 kV Power Distribution ...................................................................... 18-16
4.16 kV & 600 V Power Distribution...................................................... 18-17
Instrumentation and Controls .................................................................................... 18-17
Instrumentation ..................................................................................... 18-17
Controls ................................................................................................. 18-18
19 MARKET STUDY 19-1
Material Analysis ......................................................................................................... 19-3
Description and Key Uses ...................................................................... 19-3
2.2 Iron Ore Types .................................................................................. 19-5
Iron Ore Industry Value Chain ................................................................ 19-6
Market Overview ......................................................................................................... 19-9
Overview ............................................................................................... 19-10
Global Crude Steel Production ............................................................. 19-11
Global Steel Demand Outlook .............................................................. 19-13
Iron Ore Demand ...................................................................................................... 19-15
Changes and Trends in Iron Ore Demand ........................................... 19-15
Iron Ore Demand by Key Regions and Countries ................................ 19-17
Chinese Steel Industry .......................................................................... 19-17
Indian Steel Industry ............................................................................. 19-19
Table of Contents December 22, 2017 Page vi

Outlook for Traditional Markets............................................................. 19-20

Outlook for other developing nations .................................................... 19-20
Iron Ore Supply ......................................................................................................... 19-20
Changes and Trends in Iron Ore Supply .............................................. 19-21
Iron Ore Supply by Region and Key Countries ..................................... 19-25
Supply Growth Limitations .................................................................... 19-27
Iron Ore Pricing ......................................................................................................... 19-29
Iron Ore Pricing Dynamics .................................................................... 19-29
Iron Ore Price Outlook .......................................................................... 19-31
Value in Use Characteristics ................................................................. 19-33
Scully Mine Overview................................................................................................ 19-35
Introduction ........................................................................................... 19-35
Product Overview.................................................................................. 19-36
20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL 20-1
Related Information..................................................................................................... 20-1
Environmental Studies ................................................................................................ 20-1
Air ............................................................................................................ 20-2
Upland Habitat ........................................................................................ 20-2
Aquatic Habitat........................................................................................ 20-3
Cultural and Historic Resources ............................................................. 20-3
Water ...................................................................................................... 20-3
Hazardous Materials Management ......................................................... 20-4
Tailings and Waste Rock ........................................................................ 20-4
Environmental Issues.................................................................................................. 20-5
Ambient Air Quality ................................................................................. 20-5
Soil / Groundwater contamination........................................................... 20-6
Operational Requirements .......................................................................................... 20-6
Tailings and Waste Management ........................................................... 20-6
Site Monitoring ........................................................................................ 20-7
Water Management ................................................................................ 20-8
Required Permits and Status ...................................................................................... 20-9
Permits .................................................................................................... 20-9
Bonds .................................................................................................... 20-12
Social and Community .............................................................................................. 20-12
Municipalities ........................................................................................ 20-12
Indigenous Communities ...................................................................... 20-13
Mine Closure ............................................................................................................. 20-15
Remediation and Reclamation .............................................................. 20-15
Estimated Reclamation Costs............................................................... 20-16
21 CAPITAL, SUSTAINING AND OPERATING COSTS 21-1
Capital Expenditure Estimate ..................................................................................... 21-1
Capital Expenditure Summary ................................................................ 21-1
General ................................................................................................... 21-3
Sustaining Capital Costs Estimate............................................................................ 21-23
Table of Contents December 22, 2017 Page vii

Mining initial Capital and Sustaining Capital ............................................................. 21-25

Operating Costs ........................................................................................................ 21-31
Basis of Estimate .................................................................................. 21-31
Exchange Rates.................................................................................... 21-31
Operating Costs Summary ................................................................... 21-31
Exclusions ............................................................................................. 21-35
Mine Operating Costs ........................................................................... 21-37
Crushing and Processing Operating Cost Estimates ........................... 21-40
Tailings and Surface Water Management ............................................ 21-43
General (G&A) Operating Costs Estimate ............................................ 21-44
Concentrate Transportation .................................................................. 21-47
Port Facilities ........................................................................................ 21-48
22 ECONOMIC ANALYSIS 22-1
Assumptions ............................................................................................................... 22-1
Macro-Economic Assumptions ............................................................... 22-1
Royalty and Impact and Benefit Agreements ......................................... 22-3
Technical Assumptions ........................................................................... 22-3
Financial Model and Results ....................................................................................... 22-3
Sensitivity Analysis ..................................................................................................... 22-8
23 ADJACENT PROPERTIES 23-1
Quebec Iron Ore – Bloom Lake .................................................................................. 23-1
ArcelorMittal – Mont-Wright & Fire Lake ..................................................................... 23-1
Iron Ore Company of Canada ..................................................................................... 23-1
24 OTHER RELEVANT DATA AND INFORMATION 24-1
Project Execution Plan ................................................................................................ 24-1
Purpose ................................................................................................... 24-1
Summary Scope of Work and Work Breakdown Structure (WBS) ......... 24-1
Execution Strategy .................................................................................. 24-2
Services Rendered by Tacora PM Team ............................................... 24-6
Commissioning and Ramp-up ................................................................ 24-7
Project Schedule ..................................................................................... 24-8
Plant Maintenance Program ..................................................................................... 24-10
Mine Operation Readiness ....................................................................................... 24-10
Risk Management ..................................................................................................... 24-12
Methodology ............................................................................................................. 24-12
Results ...................................................................................................................... 24-14
Conclusions .............................................................................................................. 24-17
25 INTERPRETATION AND CONCLUSIONS 25-1
Geology and Mineral Resources ................................................................................ 25-1
Mining and Mineral Reserves ..................................................................................... 25-2
Processing .................................................................................................................. 25-4
Transportation ............................................................................................................. 25-4
Tailings Storage Facility and Dams ............................................................................ 25-4
Table of Contents December 22, 2017 Page viii

Electrical, Instrumentation and Controls ..................................................................... 25-5

26 RECOMMENDATIONS 26-1
Geology and Mineral Resources ................................................................................ 26-1
Mining and Mineral Reserves ..................................................................................... 26-2
Environmental Permitting ............................................................................................ 26-3
Processing .................................................................................................................. 26-3
Tailings Storage Facility and Dams ............................................................................ 26-4
Plant Structures and foundations ................................................................................ 26-4
Electrical, Instrumentation and Controls ..................................................................... 26-4
Project Execution ........................................................................................................ 26-5
Plant Maintenance ...................................................................................................... 26-5
27 REFERENCES 27-1
28 ABBREVIATIONS 28-1
Table of Contents December 22, 2017 Page ix

List of Figures
Figure 1.1: Mine Production ......................................................................................................................... 1-9
Figure 1.2: Scully Mill Flow Sheet .............................................................................................................. 1-14
Figure 1.3: Estimated Historical and Forecast Global Iron Ore Price, 2011-2020 (Real 2017) ................. 1-24
Figure 1.4: Operating Costs over the Project Life ...................................................................................... 1-28
Figure 1.5: After-Tax Cash Flow and Cumulative Cash Flow Profiles ....................................................... 1-30
Figure 4.1:Project Location........................................................................................................................... 4-2
Figure 4.2: Mining Lease Locations ............................................................................................................. 4-3
Figure 4.3: Tailings Impoundment Area ....................................................................................................... 4-6
Figure 4.4: Bloom Lake Rail Easement ........................................................................................................ 4-8
Figure 4.5: Fresh Water Pumping System Easement .................................................................................. 4-9
Figure 5.1: Rail Network ............................................................................................................................... 5-4
Figure 7.1: Simplified Regional Geological Map (J. Conliffe et al., 2012) .................................................... 7-2
Figure 7.2: Simplified Regional Geological Map of the Labrador Trough (from Gross, 2009) ..................... 7-3
Figure 7.3: Schematic Geological Map of the Scully Region Showing an Approximate Current Pit Outline 7-6
Figure 7.4: Stratigraphic Column of the Sokoman Formation at Scully ....................................................... 7-8
Figure 7.5: Contact between Basal Silicates (Unit 61) and the Lower Member (53) in the Pit Wall ............ 7-9
Figure 7.6: Core Photos of Lower Member Ore ........................................................................................... 7-9
Figure 7.7: Pit Wall Showing the Contacts Between the Lower and Middle Member Sub-Units, and the Middle
Quartzite. .................................................................................................................................................... 7-10
Figure 7.8: Core Photos from Middle Member Ore .................................................................................... 7-11
Figure 7.9: Schematic Section Through East Pit Showing Reverse Fault Affecting Stratigraphy ............. 7-12
Figure 8.1: Time Distribution of the Iron Formation Deposition (from Bekker et al., 2010) .......................... 8-1
Figure 9.1: Bouguer (top) and First Vertical Derivative (bottom) images of the gravity survey over Scully
Deposit.......................................................................................................................................................... 9-2
Figure 9.2: Total Magnetic Intensity (left) and First Vertical Derivative (right) images from the 2010 ground
magnetometer survey (shown in UTM coordinates) .................................................................................... 9-3
Figure 10.1: East Pit and East Pit East Historical Drilling .......................................................................... 10-5
Figure 10.2: South Pit Historical Drilling 1969-2005 .................................................................................. 10-6
Figure 10.3: West Pit and Boot Area Historical Drilling 1969-2005 ........................................................... 10-7
Figure 10.4: Drilling Programs on Boot Area 1991, 2004, 2005, 2010, 2011 and 2012 ............................ 10-9
Figure 11.1: Example of Drill Core Prepared for Logging .......................................................................... 11-2
Figure 11.2: Schematic of Blasthole Sampling Methodology ..................................................................... 11-5
Figure 11.3: Example of Blasthole Sheets Used for Logging..................................................................... 11-6
Figure 12.1: Re-Sampling Program 2017 (Scully Mine) - Collecting Drill Core for Sampling .................... 12-2
Figure 12.2: Re-Sampling Program 2017 (Scully Mine) – Collecting Coarse Rejects for Sampling.......... 12-2
List of Figures December 22, 2017 Page x

Figure 12.3: Re-Sampling Program 2017 (Scully Mine) – Location of The Samples ................................ 12-3
Figure 12.4: Correlation for Fe % Between the Scully Database (X-Axis) and The SGS Reanalyses (Y-Axis)
– All Data .................................................................................................................................................... 12-4
Figure 12.5: Correlation for Fe % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-Axis)
– Close-Up of Data Between 20% and 50% Fe ......................................................................................... 12-4
Figure 12.6: Correlation for Mn % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-Axis)
– All Data .................................................................................................................................................... 12-5
Figure 12.7: Correlation for Mn % Between the Scully Database (X-Axis) and The SGS Reanalyses (Y-Axis)
– Close-Up of Data Between 0% And 8% Mn ............................................................................................ 12-6
Figure 12.8: Correlation for Magnetite % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-
Axis) – All Data ........................................................................................................................................... 12-7
Figure 12.9: Correlation for Magnetite % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-
Axis) – Close-Up of Data Between 0% And 4% Magnetite ........................................................................ 12-7
Figure 12.10: Assay Results for CRM 463 – Crude Fe %.......................................................................... 12-8
Figure 12.11: Assay Results for Inserted Blanks – Crude % ..................................................................... 12-9
Figure 12.12: Assay Results for Duplicates Submitted to SGS – Crude Fe % .......................................... 12-9
Figure 13.1: Wabush Historical Concentrate Production .......................................................................... 13-1
Figure 13.2: Mn Reduction Separation Principle ....................................................................................... 13-6
Figure 13.3: Magnetic vs. High Tension Separation .................................................................................. 13-7
Figure 13.4: Historical Grade Production ................................................................................................... 13-8
Figure 13.5: Mn Reduction Line Impact in the Total Production Concentrate ........................................... 13-9
Figure 13.6: Chemistry Correlation Between Historical and Productive Concentrate Grade .................. 13-10
Figure 14.1: Section 2513mE Showing Earlier Drilling in Blue, and Later Drilling in Red, Looking East .. 14-3
Figure 14.2: View Looking North-East Showing Pre-1985 Drilling (Blue) and Post-1985 Drilling (Red) ... 14-4
Figure 14.3: Plan View of the Diamond Drill Holes Located Inside the Block Model Area (Blue Outline) . 14-6
Figure 14.4: Probability Plot (Left) And Histogram (Right) Or Raw Sample Lengths in The Assay Table (in
Metres)........................................................................................................................................................ 14-7
Figure 14.5: 2D Geological Sections Imported into Leapfrog GEO™ for the Base of Unit 34 (Base of Middle
Member). Looking North-East. ................................................................................................................. 14-10
Figure 14.6: Cross-Section 1677me In Leapfrog Geo™ Looking East Showing the Stratigraphy and Drilling
.................................................................................................................................................................. 14-11
Figure 14.7: View of the East Pit Showing the Reverse Fault (Looking North), Current Pit Topography and
Drilling ....................................................................................................................................................... 14-12
Figure 14.8: Section 6398N (Looking North) Showing Reverse Fault and Vertical Displacement of Geological
Units .......................................................................................................................................................... 14-13
Figure 14.9: Plan View Showing the Structural Domain Definition .......................................................... 14-14
Figure 14.10: Section View (1829 mE) Looking East Showing the Structural Domains and the Geological
Units .......................................................................................................................................................... 14-14
List of Figures December 22, 2017 Page xi

Figure 14.11: Cumulative Probability Graphs for Crude Fe % Raw Assays Inside the Upper (Left), Middle
(Right) and Lower (Bottom) Members ...................................................................................................... 14-18
Figure 14.12: Cumulative Probability Graphs for Crude Mn % Raw Assays Inside the Upper (Left), Middle
(Right) and Lower (Bottom) Members ...................................................................................................... 14-19
Figure 14.13: Cumulative Probability Graphs for Crude Magnetite % (Satmagan) Raw Assays Inside the
Upper (Left), Middle (Right) and Lower (Bottom) Members ..................................................................... 14-21
Figure 14.14: Correlation Plots of the Upper (Left), Middle (Right) and Lower (Bottom) Members ......... 14-26
Figure 14.15: Scatter Plots Comparing WTREC and Fe % (Crude) For the Middle Member (Left) and Lower
Member (Right). Colours and Contours Reflect Point Density ................................................................. 14-27
Figure 14.16: Q:Q Plots for Crude Fe % Comparing Blastholes (X Axis) and Exploration Drill Holes (Y-Axis)
for the Upper (Left), Middle (Right) and Lower (Bottom) Members .......................................................... 14-28
Figure 14.17: Q:Q Plots for Weight Recovery % (WTREC) Comparing Blastholes (X Axis) and Exploration
Drill Holes (Y-Axis) for the Upper (Left), Middle (Right) and Lower (Bottom) Members .......................... 14-30
Figure 14.18: Probability Plots of Sio2 % Concentrate by Rock Code for Outlier Identification ............... 14-32
Figure 14.19: Example of Variogram Model for Crude Fe % for the Lower Member. Major Axis (Left) and
Semi-Major Axis (Right)............................................................................................................................ 14-35
Figure 14.20: Cross-Section 1677mE Showing the Dominant Rock Type .............................................. 14-37
Figure 14.21: Plan View of the Base of The Current Pit Showing the Rock Type Attribute (Overburden Blocks
Are Hidden) .............................................................................................................................................. 14-37
Figure 14.22: Bulk Density Measurements from Re-Assay Program Vs. Crude Fe (%) Compared with
Regression Curve Applied in Block Model ............................................................................................... 14-39
Figure 14.23: Section 3197mE - Example of Pass 1 Search Ellipse Orientations and Structural Domains 14-
41
Figure 14.24: Section 3197me Showing Preliminary Mineral Resource Classification (Top) and Smoothed
Mineral Resource Classification (Bottom). ............................................................................................... 14-45
Figure 14.25: Section 3653 - Block Grades Vs. Composite Grades for Crude Fe % (top), Mn % (Middle) and
SAT % (Bottom)........................................................................................................................................ 14-47
Figure 14.26: Q:Q Plot Comparing Crude Fe % Block Grades (X-Axis) and Composite Grades (Y-Axis) for
Measured Resources (Left) and Indicated + Inferred Resources (Right) for Rock Code 53 ................... 14-50
Figure 14.27: Q:Q Plot Comparing Crude Mn % Block Grades (X-Axis) and Composite Grades (Y-Axis) for
Measured Resources (Left) and Indicated + Inferred Resources (Right) for Rock Code 53 ................... 14-50
Figure 14.28: Q:Q Plot Comparing Crude SAT % Block Grades (X-Axis) and Composite Grades (Y-Axis) for
Combined Measured and Indicated Resources for Rock Code 53 .......................................................... 14-51
Figure 14.29: Swath Plots by Easting for Crude Fe % (Top), Mn % (Middle) and SAT % (Bottom) for
Measured and Indicated Mineral Resources Combined. ......................................................................... 14-52
Figure 14.30: Interpolated Block Grades from Exploration Drill Holes (X-Axis) Vs. Average Blasthole Grades
Within a Given Block (Y-Axis). Fe (Left), Mn (Right) and Weight Recovery (Bottom) with Point Density
Contours. .................................................................................................................................................. 14-55
List of Figures December 22, 2017 Page xii

Figure 14.31: 3D View Showing Fe % Grade Blocks Located Inside the USD 79/t Open Pit Whittle Shell 14-
58
Figure 14.32: Grade-Tonnage Curve, Measured and Indicated Resources Inside USD 79/t Open Pit
Optimized Shell ........................................................................................................................................ 14-60
Figure 14.33: Grade-Tonnage Curve, Inferred Resources inside USD 79/t Open Pit Optimized Shell ... 14-60
Figure 15.1: Wabush Iron Formation Stratigraphic Column ....................................................................... 15-3
Figure 15.2: Final Pit Slope Geotechnical Domains ................................................................................... 15-9
Figure 15.3: Schematic Representation of Three Mining Schedule Configurations: (a) Worst-Case Mining
Schedule; (b) Best-Case Mining Schedule; and (c) Intermediate Mining Schedule ................................ 15-15
Figure 15.4: M&I Pit by Pit Graph ............................................................................................................. 15-18
Figure 15.5: MII Pit by Pit Graph .............................................................................................................. 15-18
Figure 15.6: Double Lane Ramp Profile Design ....................................................................................... 15-20
Figure 15.7: Single Lane Ramp Profile Design ........................................................................................ 15-20
Figure 15.8: Mine Haulage Roads ............................................................................................................ 15-20
Figure 15.9: Tacora Mine Status Map & Lidar.......................................................................................... 15-22
Figure 15.10: : Tacora Mine Final Pit Design ........................................................................................... 15-23
Figure 15.11: Final Pit Design vs. Whittle Shell ....................................................................................... 15-24
Figure 15.12: Final Pit Design vs. Whittle Shell Section View ................................................................. 15-25
Figure 16.1: Final Pit Design ...................................................................................................................... 16-3
Figure 16.2: Geotechnical Bench Slope Design Recommendations ......................................................... 16-5
Figure 16.3: Waste Storage Dumps ........................................................................................................... 16-7
Figure 16.4: Mine Production ................................................................................................................... 16-10
Figure 16.5: Stockpile Inventory ............................................................................................................... 16-11
Figure 16.6: Production Schedule – 2018 ................................................................................................ 16-14
Figure 16.10: Production Schedule – 2022 .............................................................................................. 16-18
Figure 16.15: Production Schedule – 2044 (End of Life of Mine) ............................................................ 16-23
Figure 16.16: Mill Feed Grades ................................................................................................................ 16-26
Figure 16.17: Concentrate Grades and Weight Recovery ....................................................................... 16-29
Figure 16.18: Truck Requirement - Required vs. Budgeted ..................................................................... 16-38
Figure 16.19: Currently Flooded pits ........................................................................................................ 16-39
Figure 16.20: Equipment Hour Usage Model ........................................................................................... 16-45
List of Figures December 22, 2017 Page xiii

Figure 16.21: Mine Manpower Requirements .......................................................................................... 16-50

Figure 17.1: Scully Mill Flow Sheet ............................................................................................................ 17-4
Figure 17.2: Scully Mill Mass Balance for 5.8 Mtpy ................................................................................... 17-5
Figure 17.3: Scully Mill Mass Balance for 6.1 Mtpy ................................................................................... 17-6
Figure 17.4: Existing Mill Complex ............................................................................................................. 17-7
Figure 17.5: Primary Crushing Rock Breaker – New Rock Breaker Installation Proposition Layout ......... 17-9
Figure 17.6: High Manganese By-Product Storage ................................................................................. 17-13
Figure 17.7: Train Load-Out Facilities Storage Capacity Upgrade from 124 to 168 Rail Cars ................ 17-15
Figure 17.8: Simplified Mill Water Balance (5.8 Mtpy) ............................................................................. 17-17
Figure 17.9: Simplified Mill Water Balance (6.1 Mtpy) ............................................................................. 17-18
Figure 18.1: Flora Lake Tailings Storage Facility – Future Tailings Storage- Estimated Tailings Surface on 31
Dec 2023 – Capacity = 52 Million Tonnes(5 years) ................................................................................... 18-5
Figure 18.2: Flora Lake Tailings Storage Facilities Profiles from Discharge Points to North and South Flora
Lake Capacity = 52 Million Tonnes (5 years) ............................................................................................. 18-6
Figure 18.3: Flora Lake Tailings Storage Facilities Current Available Storage (7.25 Years) – Estimated
Tailings Surface on 31 Dec 2025 – Capacity = 78.4 Million Tonnes......................................................... 18-7
Figure 18.4: Flora Lake Tailings Storage Facilities Profiles from Discharge Points to North and South Flora
Lake Capacity = 78.4 Million Tonnes ......................................................................................................... 18-8
Figure 18.5: Flora Lake Tailings Storage Facilities – Future Dike Expansion and Tailings Storage – estimated
Tailings Surface on 31 Dec 2034 – Capacity = 184 Million Tonnes......................................................... 18-10
Figure 18.6: Flora Lake Tailings Storage Facilities Cross Sections of Starter Dike and Upstream Raise South
Extension Capacity = 184 Million Tonnes ................................................................................................ 18-11
Figure 18.7: Flora Lake Tailings Storage Facilities – Future Dike Expansion and Tailings Storage – Estimated
Final Tailings Surface at End of LOM (31 Dec 2044) – Capacity = 297 Million Tonnes .......................... 18-13
Figure 18.8: Flora Lake Tailings Storage Facilities Cross Sections of Starter Dike and Upstream Raise –
South Extension 2: Stage 1 and 2 – Capacity = 297 Million Tonnes ....................................................... 18-14
Figure 19.1: BOF Steel Production Flow Chart .......................................................................................... 19-4
Figure 19.2: EAF Steel Production Flow Chart .......................................................................................... 19-5
Figure 19.3: Iron Ore Process Flow ........................................................................................................... 19-7
Figure 19.4: Estimated Crude Steel Production by Key Country and Region, 2011–2020 ..................... 19-12
Figure 19.5: Estimated Steel Consumption by Key Country and Region, 2011-2020 ............................. 19-13
Figure 19.6: Estimated Global Iron Ore Demand by Key Country and Region, 2011–2020 ................... 19-16
Figure 19.7 : Estimated Chinese Steel Exports, 2011–2016 ................................................................... 19-18
Figure 19.8: Estimated Global Iron Ore Supply by Key Country and Region, 2011–2020 ...................... 19-21
Figure 19.9: Estimated Grades of Sinter Fines, 2011-2020 ..................................................................... 19-24
Figure 19.10: Estimated Grades of Iron Ore Concentrate, 2011-2020 .................................................... 19-25
Figure 19.11: Estimated Historical and Forecast Global Iron Ore Price, 2011-2020 (Real 2017) ........... 19-31
Figure 19.12: Comparison of Selected Sinter Product Estimated Grades ............................................... 19-34
List of Figures December 22, 2017 Page xiv

Figure 20.1: First Nation Reserve Locations ............................................................................................ 20-14

Figure 21.1: Operating Costs over the Project Life .................................................................................. 21-33
Figure 21.2: Weight of Average Operating Costs by Component ............................................................ 21-34
Figure 22.1: After-Tax Cash Flow and Cumulative Cash Flow Profiles ..................................................... 22-4
Figure 22.2: Pre-tax NPV8%: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate ........................................................................................................................................... 22-8
Figure 22.3: Pre-tax IRR: Sensitivity to Capital Expenditure, Operating Cost, Price and
USD/CAD Exchange Rate .......................................................................................................................... 22-9
Figure 22.4: After-tax NPV8%: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate ......................................................................................................................................... 22-10
Figure 22.5: After-Tax IRR: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate ......................................................................................................................................... 22-10
Figure 24.1: Project Schedule .................................................................................................................... 24-9
Figure 24.2: Probability Impact Diagram ................................................................................................. 24-12
Figure 24.3: Risk Map ............................................................................................................................. 24-15
List of Figures December 22, 2017 Page xv

List of Tables
Table 1.1: Mineral Resources Estimate for the Scully Deposit at a 20% Fe Lower Cut-Off ........................ 1-7
Table 1.2: Tacora Mine Mineral Reserve Estimate ...................................................................................... 1-8
Table 1.3: Scully Mine Reactivation Design Criteria (Years 3 and After @ 6 Mtpy) .................................. 1-13
Table 1.4: Estimated Historical and Forecast Iron Ore Prices, 2011-2035 (Real 2017) ............................ 1-24
Table 1.5: Capex Estimate Summary per EWP ......................................................................................... 1-25
Table 1.6: Capex Estimate Summary per Area .......................................................................................... 1-26
Table 1.7: Summary of Average Production Period Operating Costs ........................................................ 1-27
Table 1.8: Financial Indicators Under Base Case Assumptions ................................................................ 1-29
Table 2.1: Areas of Responsibility ................................................................................................................ 2-3
Table 2.2: Qualified Persons Summary........................................................................................................ 2-4
Table 4.1: Land Control Summary ............................................................................................................... 4-3
Table 6.1: Historical Production (1965 – 2014) ............................................................................................ 6-3
Table 10.1: Drilling Summary ..................................................................................................................... 10-3
Table 11.1: Example of Drill Logging Sheet for Exploration Drilling........................................................... 11-3
Table 11.2: Sampling Sheet Written by Geologist, and Filled by Laboratory Staff .................................... 11-4
Table 12.1: Bulk Density Measurements on Drill Core from the Middle and Lower Members ................ 12-10
Table 13.1: Pit Sub-Unit in The Mining Plant ............................................................................................ 13-4
Table 13.2: Pit Sub-Unit JkSimMet Simulation Result .............................................................................. 13-5
Table 13.3: Performance in the first Mn reduction line Result ................................................................... 13-6
Table 13.4: Historical Concentrate Composite Analysis. ........................................................................... 13-7
Table 13.5: Product Quality Used for this Study ........................................................................................ 13-9
Table 14.1: List of Drill Holes Located Inside the Block Model Limits ........................................................ 14-2
Table 14.2: Attributes Within the Drill Hole Database, and Their Abundance Compared to Total Meterage
.................................................................................................................................................................... 14-5
Table 14.3: List of Fold Limb Orientations Defining the Structural Domains ........................................... 14-15
Table 14.4: Attribute Averages for Crude Assays .................................................................................... 14-16
Table 14.5: Attribute Averages for Concentrate Assays .......................................................................... 14-16
Table 14.6: Descriptive Statistics of Crude Attributes – 6 m Composites ................................................ 14-23
Table 14.7: Descriptive Statistics of Concentrate Attributes – 6 m Composites ...................................... 14-24
Table 14.8: Grade Capping Applied to Composites for Grade Estimation ............................................... 14-31
Table 14.9: Variogram Parameters for Crude Attributes in the Variographic Domain ............................. 14-34
Table 14.10: Rotation Angles Defining the Major and Semi-Major Axes ................................................. 14-34
Table 14.11: Block Model Settings (SC17_FINAL) .................................................................................. 14-35
Table 14.12: List of Attributes Found in The Block Model SC17_FINAL ................................................. 14-36
Table 14.13: Resulting Density Values by Rock Code ............................................................................. 14-38
List of Tables December 22, 2017 Page xvi

Table 14.14: Anisotropy Search Ellipsoid Orientations Presented by Structural Domain ........................ 14-42
Table 14.15: Search Ellipse Ranges by Pass .......................................................................................... 14-42
Table 14.16: Global Statistical Comparison Between Composites and Blocks for Measured and Indicated
Blocks ....................................................................................................................................................... 14-48
Table 14.17: Mineral Resources Estimate for the Scully Deposit at a 20% Fe Lower Cut-Off ................ 14-57
Table 14.18: Grade and Tonnage Sensitivity to Cut-Off Grade (Measured and Indicated Resources)... 14-59
Table 14.19: Grade and Tonnage Sensitivity to Cut-Off Grade (Inferred Resources) ............................. 14-59
Table 15.1: Tacora Mine Mineral Reserve Estimate .................................................................................. 15-1
Table 15.2: Block Model Framework .......................................................................................................... 15-2
Table 15.3: Weighted Average Block Model Attributes .............................................................................. 15-2
Table 15.4: Pit Slope Design Criteria ......................................................................................................... 15-8
Table 15.5: Pit Optimization Parameters.................................................................................................. 15-11
Table 15.6: M&I Whittle Shell Results ...................................................................................................... 15-12
Table 15.7: MII Whittle Shell Results ....................................................................................................... 15-13
Table 15.8: M&I Pit by Pit Results ............................................................................................................ 15-16
Table 15.9: MII Pit by Pit Results ............................................................................................................. 15-17
Table 15.10: Resource to Reserve Reconciliation ................................................................................... 15-26
Table 15.11: Proven & Probable Reserve by Sub-Unit ............................................................................ 15-27
Table 15.12: Tacora Mine Mineral Reserve Estimate .............................................................................. 15-28
Table 16.1: Pit Design Summary by Sector ............................................................................................... 16-2
Table 16.2: Pit Phase Design Criteria ........................................................................................................ 16-4
Table 16.3: Waste Storage Capacities ....................................................................................................... 16-6
Table 16.4: Waste Pile Design Criteria ...................................................................................................... 16-6
Table 16.5: Stockpile Design Criteria ......................................................................................................... 16-8
Table 16.6: Haul Road Segments .............................................................................................................. 16-9
Table 16.7: Mine Production Schedule Detail by Period .......................................................................... 16-12
Table 16.8: Stockpile Inventory Schedule ................................................................................................ 16-13
Table 16.9: Mill Ramp-Up ......................................................................................................................... 16-24
Table 16.10: Mill Production Schedule Detail by Period .......................................................................... 16-25
Table 16.11: Mill Production Schedule Detail by Sub-Unit by Period ...................................................... 16-27
Table 16.12: Concentrate Production Detail by Period ............................................................................ 16-28
Table 16.13: Classification of Rock Strengths (Brown, 1980) .................................................................. 16-31
Table 16.14: Drill & Blast Parameters ...................................................................................................... 16-32
Table 16.15: Loading Specifications ........................................................................................................ 16-34
Table 16.16: Speed Limits ........................................................................................................................ 16-35
Table 16.17: Rolling Resistance ............................................................................................................... 16-35
Table 16.18: Cycle Time Components ..................................................................................................... 16-35
Table 16.19: Ore Haulage Results ........................................................................................................... 16-36
List of Tables December 22, 2017 Page xvii

Table 16.20: Waste Haulage Results ....................................................................................................... 16-37

Table 16.21: Groundwater Model Results ................................................................................................ 16-41
Table 16.22: Water Quantity in Flooded Pits............................................................................................ 16-41
Table 16.23: Equipment Usage Model Assumptions ............................................................................... 16-46
Table 16.24: Equipment Requirements .................................................................................................... 16-48
Table 17.1: Scully Mine Reactivation Design Criteria (Years 1 to 2 at 5.8 Mtpy) ...................................... 17-2
Table 17.2:Scully Mine Reactivation Design Criteria (Years 3 and After at 6.1 Mtpy) ............................... 17-3
Table 18.1: Tailings Production per Year ................................................................................................... 18-3
Table 19.1: Estimated Historical and Forecast Iron Ore Prices, 2011-2035 (Real 2017) ........................ 19-32
Table 19.2: Comparison of Scully Sinter Specification with Peers and Benchmarks .............................. 19-36
Table 20.1: MMER and CofA Water Quality Monitoring Stations............................................................... 20-8
Table 20.2: Tacora Mine Permits ............................................................................................................. 20-10
Table 20.3: Financial Assurance Requirement ........................................................................................ 20-12
Table 21.1: Capex Estimate Summary per EWP ....................................................................................... 21-1
Table 21.2: Capex Estimate Summary per Area ........................................................................................ 21-2
Table 21.3: Division of Responsibility per EWP ......................................................................................... 21-4
Table 21.4: Units of Measurements ......................................................................................................... 21-15
Table 21.5: Equipment and Materials Pricing........................................................................................... 21-17
Table 21.6: Equipment and Materials Comparison .................................................................................. 21-19
Table 21.7: Major Area and Element of Scope ........................................................................................ 21-25
Table 21.8: Pre-Production Mining OPEX ................................................................................................ 21-26
Table 21.9: Equipment Capital Investment .............................................................................................. 21-27
Table 21.10: Equipment Purchase Schedule ........................................................................................... 21-28
Table 21.11: Equipment Capital Expenditure Schedule ........................................................................... 21-30
Table 21.12: Other Work Capital Expenditure Schedule ......................................................................... 21-30
Table 21.13: Exchange Rates ................................................................................................................. 21-31
Table 21.14: Summary of Average Production Period Operating Costs .................................................. 21-32
Table 21.15: Summary of Average Production Period Operating Costs .................................................. 21-36
Table 21.16: Major Equipment Hourly Operating Cost ............................................................................ 21-37
Table 21.17: Mine Operating Cost Summary by Activity.......................................................................... 21-38
Table 21.18: Mine Operating Costs Detail by Period ............................................................................... 21-39
Table 21.19: Average Crushing and Processing Operating Cost Summary (Life of Mine) ...................... 21-41
Table 21.20: Tailings and Surface Water Management OPEX (in CAD, without Contingency) .............. 21-44
Table 21.21: Site Support (G&A) and Corporate Operating Cost Summary............................................ 21-47
Table 22.1: Financial Indicators Under Base Case Conditions .................................................................. 22-1
Table 22.2: Macro-Economic Assumptions ................................................................................................ 22-2
Table 22.3: Technical Assumptions ........................................................................................................... 22-3
Table 22.4: All-In Sustaining Cost Breakdown ........................................................................................... 22-5
List of Tables December 22, 2017 Page xviii

Table 22.5: Project Evaluation Summary – Base Case ............................................................................. 22-6

Table 22.6: Summary Cash Flow Statement.............................................................................................. 22-7
Table 22.7: Sensitivity Tables at Flat IODEX 62% Fe Prices................................................................... 22-11
Table 24.1 – Existing Areas at the Scully Mine .......................................................................................... 24-2
Table 24.2: Packaging Strategy ................................................................................................................. 24-4
Table 24.3: Consequence and Opportunity Potential ............................................................................. 24-13
Table 24.4:Extreme Risks ........................................................................................................................ 24-15
List of Tables December 22, 2017 Page xix

1 EXECUTIVE SUMMARY
Summary of average life-of-mine metrics
Parameter Unit Value

Economic Assumptions
Reference Price (Platt's 62% Fe) USD/dmt con. 69.8
Concentrate Adjusted Price (65% Fe) USD/dmt con. 82.2
Concentrate Adjusted Price (65.9% Fe) USD/dmt con. 85.2
Exchange Rate CAD/USD 1.2886
Mining & Processing
Total Tonnage Mined Mt 831.4
Ore Tonnage Mined Mt 443.7
Strip Ratio w:o 0.87
Mining Dilution % 3.4
Mining Recovery % 97
Maximum Annual Mining Rate Mtpy 35.8
Average Annual Processing Rate Mtpy 17.2
Weight Recovery % 34.91
Average Fe Grade in feed % 34.83
Concentrate Tonnage Production Mt 154.9
Average Annual Concentrate Tonnage Production Mtpy 6.0
Concentrate Fe Grade % 65.9%
Cost Parameters
Mining CAD/dmt con. 14.50
Processing plant CAD/dmt con. 12.08
Water & tailings operations CAD/dmt con. 0.85
General and administration CAD/dmt con. 1.96
Other CAD/dmt con. 0.46
Cash Cost FOB Mine CAD/dmt con. 29.85
Concentrate transportation & handling CAD/dmt con. 16.32
Cash Cost FOB Pointe Noire CAD/dmt con. 46.17
Royalties CAD/dmt con. 6.05
Cash Cost FOB Pointe Noire including Royalties CAD/dmt con. 52.22
Economic Results
Initial Capital M CAD 205.5
Sustaining Capital M CAD 441.7
After-Tax NPV @ 8% M CAD 1,120.6
After-Tax Internal Rate of Return % 40.7
After-Tax Payback Period Yrs 2.6
Section 1 December 22, 2017 Page 1-1

Introduction
The Scully mine (“Scully Mine” or “Scully” or the “Project”) is located 5 km from Wabush and Labrador City
in Newfoundland and Labrador. Tacora Resources Inc. (“Tacora”) plans to restart production of the Scully
Mine in 2018. This report contains the plans and information to restart the project adhering to the standards
and reporting regulations of the National Instrument 43-101 - Standards of Disclosure for Mineral Projects
("NI 43-101"). No previous NI 43-101 technical reports have been issued on the property by any previous
owner. Emphasis is placed on redesigning and upgrading the concentrator facilities to increase production
rates and reduce manganese content to below 2%.
Iron ore was first reported in the Wabush area in 1933. In 1956, Picklands Mather & Company (“PM”) began
work on the project and started the first intensive geological, metallurgical and economic investigation. A pilot
plant was built and successfully produced 100,000 tonnes of concentrate.
The Scully Mine was operated by PM, a subsidiary of Moore-McCormack Resources, from 1965 to 1986
when PM was acquired by Cleveland-Cliffs Inc. (“Cliffs”) who operated it from 1986 until being put on care
and maintenance in February 2014. For most of its life, the mine was a joint venture owned by Stelco (37.9%),
Dofasco (24.3%), Inland Steel (15.1%), Acme Steel (15.1%) and Cliffs (7.7%) but after various mergers and
acquisitions in the North American steel industry the ownership was consolidated between Cliffs, ArcelorMittal
and U.S. Steel Canada whereby each company respectively owned a joint venture percent ownership of
26.8%, 28.6% and 44.6%. Cliffs exercised their right of first refusal in February 2010 to acquire 100%
ownership of the property for approximately USD 88 million.
The Scully Mine and associated pellet plant located at Pointe Noire under Cliffs had the capacity of producing
6 million tonnes of iron ore pellets per year via three (3) Dravo Straight Grate Induration machines. An
integrated rail system was used to move the iron ore concentrate product to the pelletizer, located at Pointe-
Noire near Sept-Iles, Quebec utilizing a bottom dump unloading system. From there the product could be
shipped via boat to clients in America or elsewhere on the seaborne market. The product produced from the
Scully Mine contained higher than normal levels of manganese due to the geology of the deposit. The Scully
Mine’s integrated mine and pellet plant facilities produced two (2) types of iron ore pellets with varying
manganese levels as controlled only by the ore blends as the concentrating process was unable to reduce
the manganese content in the ore.
Cliffs shutdown the pellet plant in May 2013 followed by the mine and concentrator in February 2014, thus
placing the site under a care and maintenance program. The closure was due to increased costs, reduced
production rates and a dramatic decrease in seaborne iron ore prices combined with a decrease on pellet
premium pricing. On November 19, 2014 Cliffs announced the pursuit of exit options from its Eastern

Canadian iron ore operations, and on May 20, 2015, Cliffs commenced restructuring proceedings under
Companies’ Creditors Arrangement Act (Canada) (“CCAA”), ultimately selling the Scully Mine and other
Eastern Canadian assets. The Scully Mine was sold to Tacora in July of 2017. The asset purchase agreement
between Tacora and Wabush Iron Co. Limited, Wabush Resources Inc. and Wabush Lake Railway Company
Limited was executed through a court supervised process under the CCAA.
Tacora has undertaken certain steps to restart the mine and significantly improve the cost structure. Steps
by Tacora include: (a) the negotiation and signing of a new Collective Bargaining Agreement (“CBA”) with
the United Steelworkers (“USW”) union, incorporating high performance work systems including a significant
amount of variable compensation; (b) execution of a new 6 year iron ore concentrate purchase contract off-
take agreement with a subsidiary of Cargill, Incorporated (“Cargill”) whereby Cargill is required to purchase
all of the initial 6-years of production from the Scully Mine; (c) the purchase of long lead time mining
equipment to shorten start-up time; (d) the negotiation of a comprehensive amendment to the mineral lease
for the Scully Mine ore body; (e) a decision was made to sell concentrate instead of pellets thereby removing
any constraints that historically came from pellet production; and (f) the execution of a new life of mine rail
transportation agreement with the Quebec North Shore and Labrador Railway (“QNS&L”) railway, owned by
Iron Ore Company of Canada (“IOC”), for the transportation of product from Wabush to Sept Isle. The
remaining resources at the Scully Mine consist of high-manganese iron ore located above, below and around
previous operations. Four additional manganese reduction lines using modern rare earth magnetic separators
will be installed to supplement the two existing manganese reduction lines to reduce the manganese content
to less than 2% and silica to less than 3% in the finished product. The concentrator annual production rate is
planned to ramp-up to about 6 Mt per year of iron ore concentrate at a final product iron of 65.9% iron content
with only 1.4% manganese and 2.6% silica.
Access, Local Resources and Infrastructure
The mine site lies 3 km west of the town of Wabush and 3.5 km south of Labrador City. The central
geographical coordinates are 52° 54; 26.7” N and 66° 54’ 34.6” W. A 4-km road connects the site to
Highway 500 and Highway 389 which is accessible by road from Baie-Comeau on the north shore of the
Saint Lawrence River. The Wabush airport is 3 km from the mine site within the city limits of Wabush. The
Scully Mine is 950 km North East of Montreal by plane or 1,250 km by highway.
The rail access to the port consists of two separate segments. The first segment uses QNS&L railway from
Wabush to Arnaud Junction in Sept-Îles and from there, the second section is from Arnaud junction to Pointe-
Noire (Sept-Îles), property of “Les Chemins de Fer Arnaud”, Sept-Îles, Quebec, where the concentrate will
be unloaded, stockpiled, and loaded on vessels. The second segment is owned by the Government of

Quebec through the Sociéte du Plan Nord, which acquired these assets from Cliff’s bankruptcy of Canadian
assets, originally Wabush Railway Company Limited.
The towns of Wabush and Labrador City are well established with populations of 1,861 (2011) and
7,367 (2011), respectively. The unemployment rate of Wabush and Labrador City are of 11.1% and 8.5%
respectively with an unemployment rate of 13.7% across the province of Newfoundland and Labrador (these
statistics are taken from the 2016 Census from Statistics Canada). The two (2) towns are located 5 km apart
from one another and they contain the infrastructures and necessities to house the employees and their
families who live there including, indoor shopping centers, hotels, lower, middle and high school, a community
center and a hospital.
The mine site is connected to the Newfoundland & Labrador Hydro electrical network. Power is generated at
Churchill Falls, 200 km to the East. The Churchill power station has the second largest hydroelectric
generating capacity in North America at 5,428 MW installed. A 46-kV electrical grid on site electrifies the mine
area powering mine equipment and pumping stations.
The site already contains the necessary structures for mining from the previous owner. This includes: mine
electrical infrastructure; a maintenance facility with 5 bays and cranes; warehouses; wash bay; explosive
storage; machine shop; dewatering equipment; fuel storage; administration buildings; a concentrator plant;
and required rail load-out and track infrastructure. The buildings are in good condition to support the restart
of the Scully Mine and will require minor capital to bring into working order. The concentrator will undergo
some maintenance prior to restart with the installation of additional processing equipment.
Geology
The Scully Mine lies within the Labrador Trough in Western Labrador. The Sokoman Formation is an iron
formation that consists of three iron bearing formations, named the Upper, Middle and Lower Iron Formations.
The Sokoman Formation is more than 300 m thick near the Scully Mine and has been subjected to two
episodes of folding and metamorphism during the Hudsonian and Greenville orogenies, resulting in a
complex structural pattern in the Wabush Area. The younger Menihek and Shabagamo Formations and the
older Denault, Attikamagen, and Wishart Formations all outcrop in the vicinity of the mine site. The mineral
deposit that defines the Scully Mine consists of folded and faulted stratigraphic beds of iron-bearing units
within the regional Sokoman Iron Formation.
The ore minerals are hematite (specularite), magnetite, and martite. The waste minerals are quartz and
hydrated iron oxides such as limonite and goethite. Manganese oxides also occur in bands or are
disseminated throughout the iron-bearing units.

The geological interpretation for the Scully deposit is based primarily on diamond drilling data and 2D
sectional interpretations by representatives of Cliffs in 2014. The geology of the deposit is well understood.
Mineral Resource Estimate
G Mining Services Inc. (“GMS”) was mandated by Tacora to produce the Mineral Resource estimate for the
Tacora Mine Project. The Mineral Resource estimate was prepared in accordance with the Canadian Institute
of Mining, Metallurgy and Petroleum (“CIM”) Standards for Mineral Resource and Mineral Reserves (2014)
as incorporated in NI 43- 101. The Scully Mine Mineral Resource presented herein was prepared under the
supervision and approved by Réjean Sirois, P. Eng., from GMS. Mr. Sirois is an independent “Qualified
Person” as defined in NI 43- 101.
No prior NI 43-101 compliant Mineral Resources have been reported to date for the Scully Deposit. Therefore,
no comparisons can be made with previous Mineral Resource estimates, nor detailed reconciliation can be
undertaken due to the disparate nature of historical production data.
Geovia GEMS™ and Leapfrog GEO™ software were used to facilitate the resource estimation process
including geological modelling, geostatistical and variography analysis, and grade interpolation. The resource
model was prepared in November 2017, using all of the drill holes available in the zone of interest as of the
end of July 2017.
Drilling and blasthole data was initially converted from feet into meters, and validated for erroneous surveys
and collars, missing intervals and out-of-range values. Geological wireframes for each geological unit were
constructed using the drill hole intercepts, and the 2D sectional interpretations by site geologists. Fault blocks
were also modelled, and structural domains were interpreted according to the dip and dip direction of each
fold limb. Drill hole assay data was composited to 6 m run-lengths, using the geological units as boundaries.
Various statistical analysis was undertaken on the assay attributes of the composites, in addition to
variography for each Member (Lower, Middle and Upper). Block modelling was undertaken using a
percentage-style model, with a block size of 20 m x 20 m x 12 m. Crude assay attributes Fe, Mn and
Satmagan were estimated using ordinary kriging, with weight recovery and concentrate attributes (Fe conc.,
Si Conc., Mn Conc., Satmagan Conc.) estimated using Inverse Distance Squared. Kriging was undertaken
using four estimation passes, with Inverse Distance interpolation using a single-pass. The resulting block
model was visually validated against the composites on a section-by-section basis, and by using statistical
validations such as domain-wise descriptive statistics, swath plots and quantile plots (Q:Q plots). The
estimation was also compared to blasthole data to ensure reproducibility of the blasthole grades. Bulk density
was determined using a regression curve based on crude Fe %, and confirmed by laboratory density
determinations undertaken as part of the resampling program in 2017.

The Mineral Resource estimate was classified into Measured, Indicated and Inferred categories based on
estimation pass, and the classification is in accordance with the CIM Definition Standards on
Mineral Resources and Mineral Reserves.
The Measured and Indicated Mineral Resource for the Scully Deposit is estimated at 734 Mt at an average
grade of 34.6% Fe, and the Inferred Mineral Resource at 237 Mt at an average grade of 34.1% Fe. Table 1.1
presents the resource estimation tabulation by category.
The Mineral Resources are reported within the conceptual open pit shell at a cut-off grade of 20% Fe. The
conceptual pit shell represents potentially extractable Mineral Resources in the Measured, Indicated and
Inferred categories using an iron ore concentrate price of USD 70/t (CAD 90.2/t) plus a USD 9/t (CAD 11.6/t)
adjustment for Fe content for a total of USD 79/t (CAD 101.8/t). In addition, only rock codes 22, 31, 32, 33,
34, 51, 52 and 53 were included in the Mineral Resource.

Table 1.1: Mineral Resources Estimate for the Scully Deposit at a 20% Fe Lower Cut-Off
Tonnage Fe SiO2 Mn Sat
Fe Mn SAT WTREC
Classification (dry) Conc. Conc. Conc. Conc.
kt % % % % % % % %
Measured 213,650 35.1 2.3 5.6 36.6 64.5 3.6 2.0 6.8
Indicated 520,760 34.3 2.4 5.8 35.4 63.5 3.8 2.5 7.7
Total M&I 734,410 34.6 2.4 5.7 35.7 63.8 3.8 2.4 7.4
Inferred 236,973 34.1 2.1 5.8 34.6 64.0 3.8 2.1 8.9
Notes on Mineral Resources:
1. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
Standards for Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee
on Reserve Definitions and adopted by CIM Council May 10th, 2014.
2. The independent and qualified person for the 2017 Scully resource estimate, as defined by NI 43101, is Réjean Sirois,
P. Eng., from G Mining. The effective date of the estimate is December 6th, 2017.
3. The Mineral Resources are estimated at a cut-off grade of 20% Fe.
4. The Mineral Resources are estimated using a long-term iron price of USD 79/dmt con (USD 70/dmt con for iron plus
a USD 9/dmt con adjustment for Fe content) with an exchange rate of 1.25CAD/USD.
5. The Mineral Resources are reported within an optimized Whittle shell based on Measured, Indicated and Inferred
categories.
6. “SAT” stands for Satmagan or Saturation Magnetization Analyser, an instrument which measures magnetite in ores.
7. “Conc.” Characteristics are result of shaker table testing and represent attributes of spiral concentrate prior to
magnetic separation upgrading.
8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty
that all or any part of the Mineral Resource will be converted into Mineral Reserves.
9. The number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding
effects; rounding followed the recommendations in NI 43-101.
10. The concentrate grades stated in the table above are derived from the Wilfley shaking table process. These values
are only indicative of potential concentrate quality and will be affected by plant performance and any
modifications/enhancements such as the proposed manganese reduction circuit.
Mineral Reserves
The Mineral Reserve for the Tacora Mine is estimated at 443.7 Mt at an average grade of 34.8% Fe and
2.58% Mn as summarized in Table 1.2. The Mineral Reserve estimate was prepared by GMS. The resource
block model was also generated by GMS.
The mine design and Mineral Reserve estimate have been completed to a level appropriate for feasibility
studies. The Mineral Reserve estimate stated herein is consistent with the CIM definitions and is suitable for
public reporting. As such, the Mineral Reserves are based on Measured and Indicated (“M&I”) Mineral

Resources, and do not include any Inferred Mineral Resources. The Inferred Mineral Resources contained
within the mine design are treated as waste.
Table 1.2: Tacora Mine Mineral Reserve Estimate

Proven &
Mineral Reserves by Category Proven Probable
Probable
Crude ore tonnage k dmt 145,030 298,643 443,672
Crude iron grade % Fe 35.06 34.72 34.83
Crude manganese grade % Mn 2.41 2.67 2.58
Concentrate tonnage k dmt 51,042 103,863 154,905
Concentrate iron grade % Fe 66.16 65.75 65.89
Concentrate manganese grade % Mn 1.17 1.51 1.39
Concentrate silica grade % SiO2 2.55 2.59 2.58
Total Weight recovery % 35.19 34.78 34.91
Total Fe recovery % 66.42 65.85 66.04
Notes on Mineral Reserves:
1. The Mineral Reserves were estimated using the Canadian Institute of Mining, Metallurgy and
Petroleum (CIM) Standards for Mineral Resources and Reserves, Definitions and Guidelines prepared
by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council May 10th, 2014.
2. Mineral Reserves based on February 2014 depletion surface merged with an updated Lidar dated
September 2017.
3. Mineral Reserves are estimated at a cut-off grade of 27% weight recovery for all sub-units except sub-
unit 52 which is 30%. In addition, sub-unit 34 must have a ratio of weight recovery to iron of at least 1.
4. Mineral Reserves are estimated using a long-term iron price reference price (Platt’s 62%) of
USD 60/dmt and an exchange rate of 1.25 CAD/USD. An Fe concentrate price adjustment of
USD 9/dmt was added as an iron grade premium.
5. Bulk density of ore is variable but averages 3.33 t/m3.
6. The average strip ratio is 0.87:1.
7. The Mineral Reserve includes a 3.4% mining dilution and a 97% ore recovery.
8. The number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals
are due to rounding effects; rounding followed the recommendations in NI 43-101.
Golder Associates Ltd. (“Golder”) was mandated by Tacora to produce a feasibility level pit slope design
study to support the mine designs. The recommendations from this study have been used as an input to the
pit optimization and design process. The Golder scope included geotechnical and hydrogeological
evaluations to provide slope design criteria for the open pit. No major pit slope failures have occurred or are
present, but all catch benches are filled with material.

Mining
The operation consists of a conventional surface mining method using an owner mining approach with electric
and diesel hydraulic shovels and mine trucks. Some major mine equipment required for the restart of the
project, such as drills and hydraulic shovels, are present on site as this equipment was acquired early on in
2017. The study consists of resizing the open pit based on parameters outlined in this study and producing
a life-of-mine (“LOM”) plan to fill the mill to capacity subject to constraints with a mining rate of 35 Mtpy
(Figure 1.1).
Figure 1.1: Mine Production
40,000 1.60
35,000 1.40
30,000 1.20
Strip Ratio (W:O)

25,000 1.00
Tonnage (kt)
20,000 0.80
15,000 0.60
10,000 0.40
5,000 0.20
- -
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
Ore Waste Strip Ratio
Drill and blast specifications are established to effectively single pass drill and blast a 12 m bench. For this
bench height a 349 mm blast hole size is proposed with a 6.5 m burden by 7.5 m spacing with 1.5 m of sub-
drill in ore. The blast pattern in waste is identical with adjusted explosive column height. These drill
parameters, combined with a high energy bulk emulsion with a density of 1.2 kg/m3, result in a powder factor
of 0.50 kg/t for ore and 0.45 kg/t for waste. Blast holes are initiated with electronic detonators and primed
with 450 g boosters. The bulk emulsion product is a gas-sensitized pumped emulsion blend specifically
designed for use in wet blasting applications.
The majority of the loading in the pit will be done by two hydraulic shovels equipped with a 24 m3 bucket. The
shovels are matched with a fleet of 211 metric tonnes payload mine trucks. The project already owns two

24 m3 hydraulic front shovels (one electric and one diesel) and one 17m3 diesel front shovel. The hydraulic
shovels will be complemented by one production front-end wheel loader with a 12 m3 bucket. The truck fleet
reaches a maximum of 16 units excluding equipment replacement.
Mining of the Scully Mine is planned with seven pit sectors referred to as Boot Pit, West Pit Extension North,
West Pit Extension South, West Pit, South Pit, East Pit West and East Pit East. Mining has taken place in all
of these pit sectors except for Boot Pit which was in the Cliffs LOM plan where only initial efforts to strip
overburden and prepare production benches had been undertaken.
The pit area measures approximately 5.4 km in an east-west direction and is approximately 2.1 km north-
south in relation to the South Pit. The final pit contains 443.7 Mt of ore at an average grade of 34.83% Fe,
2.58% Mn and 5.43% SAT. This Mineral Reserve is sufficient for a 26 year mine life with possibilities for
expansion at higher iron ore prices and the conversion of Inferred Mineral Resources to Measured and
Indicated Mineral Resources. A total of 831.4 Mt is to be mined for an overall strip ratio of 0.87:1.
The plant ramp-up and commissioning period is two months from November 2018 to December 2018. Mining
activities are started earlier in August 2018. A single 12 h shift is planned for the first month before going into
full operation the next month with two 12 h shifts per day. A total tonnage mined of 5.0 Mt is planned for 2018.
The mill throughput achieves 100% production rate targeted at about 6 Mt per year of concentrate from 2021
onwards.
Mining for the first two years will begin in new pits above the current water level as extensive dewatering is
required before mining can take place in the previous pits. For this study, three distinct dewatering activities
were planned. The first consists in the dewatering of the flooded pits to restart mining and to allow for in-pit
dumping. The first pits to dewater are the West and South pits. Dewatering starts as early as May 2018.
Water will be pumped using barges and submersible electrical pumps. The East pits will be dewatered using
the same methodology from 2019. The dewatering of the flooded pits is completed in 2020.
The second dewatering activity to take place is the long hole dewatering. All the infrastructure is present on
the western end of the pit along the Long Lake boundary. It consists of a series of long holes pumping water
seepage from the Long Lake into the West Pit. The water pumped is sent back into the Long Lake through a
series of pipes. The Eastern infrastructure is yet to be built but an extensive study was done by Piteau
Associates Engineering Ltd. In 2005, the study determined the number of holes to be drilled and the cost for
the drilling of the holes plus all required infrastructure. This cost was reported in the current study with
inflation.

Finally, sump pumps will be installed at pit bottoms or on working benches when water is present. Numerous
electrical submersible pumps are still present on site. Water pumped in the pit, will first be sent to a
sedimentation pond before being released in the surrounding lakes.
Mineral Processing and Metallurgical Testing
The Scully Mine mineral processing facility is a mature plant that has been producing from 1965 to 2014. No
major modifications are required before restarting production. However, to increase performance and
availability, the following modifications are required before restarting operation of the plant:
• New hydraulic rock hammers will be installed at the primary crushers to reduce down time when frozen
material plugs the operation.
• A new belt magnet for removing tramp metal will be installed on conveyor 1B.
• The #6 autogenous grinding mill will have its drive replaced like the five others grinding mills.
• A new feed chute design will be installed to prevent material plugging on 5 of the 6 mill lines.
• Replacement of the mill oversize return pumps to a more reliable and properly sized pump will be
completed to allow oversize material to be recirculated to the mill feed chutes.
• The replacement of the existing High Tension Separators with four (4) lines of magnetic separators
(Manganese reduction lines) to supplement the two (2) existing magnetic separators will be completed
prior to plant restart.
Based on these modifications, improved operation and maintenance practices and industry benchmark, it is
considered feasible to achieve the target availability of 92%.
No new metallurgical testing is anticipated or needed before the start up due to the historical nature of the
plant operations.
It is important to limit the quantity of ore from South Pit and the lower member in any given year, due to
magnetite content and grindability, to maintain good throughputs. To meet the grinding throughput
requirement of 358 tph parameters were set to limit the ore from South Pit and lower member unit 52 to less
than 30% in any given blend. Specifically, lower member unit 52 needs to be limited to less than 15% and
not to be blended with any other sub unit 52 from other pits. Because of the magnetite content and the higher
grindability characteristics the unit 52 needs to be limited in the blend. The south pit lower member sub unit 51
is also set to be limited at 30%.
In order to limit the quantity of manganese in the concentrate below 2.0% and have access to a larger ore
reserve, the additional four (4) Mn reduction lines will be installed alongside the two (2) existing lines. It was

observed that for a weight recovery of 90% and an iron recovery of 96.5%, it can be expected to achieve a
50% manganese reduction and a 44% silica reduction resulting in concentrate characteristics of 65.9% iron,
1.4% manganese and 2.6% silica.
The first manganese reduction pilot unit, line 1, was operational in 2008. Since the 1st quarter of 2010
improvements to line 1 were made and the second line was installed in 2011. These lines successfully
achieved the removal of manganese, therefore validating the implementation of the additional 4 lines.
Recovery Methods
For the first two full production years (Years 1 to 2) the plant capacity is established at 5.8 Mtpy of concentrate
with an ore processing rate of 2,150 tph and a plant availability at 89%. For Years 3 to 20, the capacity
increases at 6.1 Mtpy of concentrate with an ore processing rate of 2,200 tph and plant availability at 92%.
The plant has been sized to meet the ore processing rate at a rate of 2,200 tph.
The general design criteria and parameters for the years three (3) and more are shown in Table 1.3.

Table 1.3: Scully Mine Reactivation Design Criteria (Years 3 and After @ 6 Mtpy)
Parameter Value Unit Sources
Concentrate Production 6,130,000 dmt/yr C
Mill availability 92% % Annual Hours C
Hrs Production 8059 HPA C
Concentrate Nominal Tonnage 761 dmt/hr C
Weight Recovery of Process Plant 35% % (wt) C
Nominal Mill Feed Rate 2198 dmt/hr C
Head Grade 35% % Fe B
Concentrate Grade 65.9% % Fe C
Concentrate Grade 2.58% % Silica C
Concentrate Grade 1.39% % Mn C
Metal (Iron) Recovery 65% Unit % C
Tails Tonnage 11,586,763 dmt/yr C
Tails Grade 19% % Fe C
Capacity ROM 17,716,763 dmt/yr C
Mill Recirculating Load 130% % recirculated B
Tyler Screen Oversize 23% % slipt B
Rougher Spiral Recirculating Load 111% % recirculated B
Rougher Spiral Con 47% % slipt B
Note: Sources: A. Tacora
The above criteria are valid for Year 3 and B. Soutex
after C. Calculated or Historical data
D. Ausenco
The process description that follows was written in association with a Simplified Flow Diagram and can be
found in Figure 1.2.

Figure 1.2: Scully Mill Flow Sheet

Crushing and Ore Handling
The ore will be hauled by 211 tonne mine trucks. The trucks will discharge into two 54” x 74” primary gyratory
crushers each driven by a 335 kW (450 HP) motor, at a nominal feed rate of 2,150 tph. Each crusher has a
capacity of 3861 tph so only one is required to operate. The ore will be crushed at minus 8’’ (203 mm) and
will be transferred by two 60’’ belt conveyors to bins ahead of the grinding circuit. Two new hydraulic
hammers (one for each crusher) will break down any oversize rocks in the crusher cavity.
The capacity of the crushing circuit is limited at 3,200 tph by the transfer conveyors. The crude ore storage
bins have to be kept full at all time. There is an excess of 1,000 tph compared to the mills throughput to build
the storage in the event of feed interruption.
A belt magnet system will be installed to remove the tramp metal and avoid stopping the transfer conveyers
for metal removal on the belt.
The primary gyratory crusher auxiliaries will include a crusher lubrication unit (including oil heaters and oil
cooling fans), a spare main shaft and a complete set of relining platforms and liners removal pans. To facilitate
maintenance and operation, the crusher area is serviced by an overhead crane.
Grinding
From the 22,000 metric tonne capacity crude ore storage bin, the ore is fed by vibratory feeders onto the mill
feed conveyors. The dimension of each mill is 24 feet in diameter and 8 feet long.
Mills discharge through a trommel screen where the screen undersize is fed into a wet vibrating screen with
1 mm width poly slots. Screen undersize is pumped to the spirals and screen oversize is pumped back into
the mills. To reduce downtime, the recirculation pumps lining will be replaced.
The grinding process is wet, fully autogenous and requires no mechanical or chemical additives. To increase
the availability of the grinding circuit, mill gears will be replaced (Mills 1 to 5 were completed prior to the plant
closure – Mill 6 will be done prior to restart). Secondly, for 5 of the 6 lines (line 4 already completed) the mill
feed chute and feed conveyor will be modified to improve material flow and reduce the water addition that
was required to avoid chute plugging.

Wet Concentration and Tails Thickener
The first stage of the concentration circuit is the rougher spirals. A total of 960 spirals (160 for each line),
supplied by Mineral Technologies were installed in 1998. Spiral tails are pumped to a cyclone where the
underflow is pumped to the tailings basin. The overflow is thickened in a 280 ft diameter thickener using
flocculent to 35% solids (as original operation) before being pumped to the tailings basin with cyclone
underflow. The solids concentration will gradually be increased to 45% to limit the amount of fresh water
required to make up for the water sent to the tailings. With the characteristics of the tailings and the
dimensions of the thickener, reaching 45% is considered feasible. However, there is an uncertainty that the
added load on the rake and the torque increase can be handled by the equipment without modifications. To
mitigate this risk, the increase in solids ratio will be performed gradually during the first year and the
equipment will be closely monitored.
The pre-concentrated iron-ore from the rougher spirals enters the hydro separators where the lighter waste
material is "floated" from the denser iron-ore concentrate through the use of a concurrent upflow of water
through a bed of concentrate. The iron-ore concentrate continues to the drum filters, the tails go to the
hydrosizer overflow cyclone. A total of 12 Linatex hydrosizers (2 by line), with dimension of 7 feet by 7 feet
were installed in 1997.
The pre-concentrate from the hydro separators is deposited on 12 drum filters (2 by line) rotating drum filters
where steam and vacuum pressure is used to remove excess water prior to drying the concentrate. The drum
filters are used to reduce the amount of water / moisture in the concentrate, so the fluo-solid dryers will
consume less energy (Bunker C) in the drying process.
Dryers
Moist concentrate from drum filters enters the fluo-solid dryers and is dried using hot air which fluidizes a bed
of concentrate. A combination of electrically generated steam indirectly and Bunker C fuel burners directly
heat the fluidizing air. Each of the three (3) fluo-solid dryers can operate independently, but to meet plant
capacity rates require that two be operated simultaneously.
The dry pre-concentrate is transferred to the dry concentrate storage bin before going to the dry magnetic
concentration.
These dryers were installed in 1963 and some work will be completed before restarting the plant. Refractory
and structural work will be performed in Dryer #2. In addition, the dryers’ combustion system will be upgraded
to improve safety, reliability, efficiency and maintainability and ease of operation.

The dryer’s off-gas scrubbers will be retrofitted with rod deck venturi technology in order to meet the
obligations of Tacora to improve the particulate emission rates of the dryers.
Dry Concentration
The dry pre-concentrate is processed by two series stages of low intensity magnetic separation (“LIMS”), and
the LIMS tails are processed by two series stages of high intensity magnetic separation (HIMS).
The LIMS are fed with ore by the means of the LIMS Vibratory Feeders. The LIMS is the first stage of the
Mn Removal Circuit where the magnetite is separated from the ore to produce the LIMS concentrate, while
the LIMS tails fall to the second stage of the Mn Removal Circuit, the HIMS Roughers.
The Rougher HIMS Separator is a double drum unit. It receives the LIMS tails which fall by gravity through
the two Rougher feed chutes. The Rougher separator is the second stage of the Mn Removal Circuit where
hematite is separated from silica and pyrolusite to produce the Rougher HIMS Concentrate, while the
Rougher tails that contain silica, pyrolusite and some remaining hematite are sent to the third stage of the
Mn Removal Circuit, the Scavenger HIMS.
The Scavenger HIMS receives the Rougher Separators tails which fall by gravity through the Scavenger
HIMS feed chute. The Scavenger HIMS is the last processing stage of the Mn Removal Circuit where
hematite is separated from silica and pyrolusite in order to produce the Scavenger HIMS Concentrate, while
the Scavenger tails containing most of the silica and pyrolusite fall on the tails conveyor #20.
The dry tails from the Mn reduction circuit enters in the High Tension (“HT”) separator scavengers. The tail
is final tails and the concentrate is going to a HIMS for produce the final concentrate. The separator tails,
high manganese by product will be stockpiled. The Scavenger HIMS final concentrate is mixed with other
concentrate on the loadout conveyer.
High Manganese By-Product
During processing, a high manganese by-product will be created at rate of 7 tph and stored in high
manganese stockpile located approximately 250 meters northeast of the concentrator building.
Tacora plans to develop a sales strategy to sell and ship this manganese oxide material in future years.
Additionally, Tacora will investigate the feasibility of additional manganese recovery from fine iron losses in
the spiral tailings which combined with the 7 tph flow stream above might be sufficient to consider a project
to convert this concentrated pyrolusite ore into ferromanganese alloy thus capitalizing on the low cost

electricity at the Scully Mine location. Tacora management has prior experience building and operating the
type of electric furnace (SAF) needed for ferromanganese alloy production from the manganese oxide by-
product. The upside from these opportunities was not included in the economic evaluation of the project.
The largest concern with the manganese stockpile at the Scully Mine would be fugitive dust. While the mine
is operating, Tacora will have a program in place to ensure the stockpile is regularly wetted. If the manganese
by-product is not sold as ore, at closure the pile will be contoured and seeded to establish a vegetative cover
to prevent subsequent erosion and dust dispersion.
Tailings Management
The tailings thickener overflow is directed to the process water tank. The tailings thickener feed is dosed with
flocculants to avoid fines build-up in the process water distribution system. The tailings thickener underflow,
at around 45% solids, is pumped to the tailings disposal pumpbox for pumping to the tailings pond. The slurry
is pumped through three (3) lines with each having two (2) pumps connected in series located in the milling
building. A third stage of pump was installed but is bypassed. In addition, on each line, there are a total of
10 booster pumps located along the pipeline between the plant and the tailings disposal area.
Mine Infrastructure
Service buildings and ancillary facilities exist and are in good condition to support the re-start of operations.
This infrastructure includes:
• Mine fleet maintenance facility with 5 bays and 50 t overhead crane;

• Wash bay within the maintenance facility;
• Auxiliary mine maintenance facility with 7 bays and 10 t overhead crane;
• Warehouse;
• Machine shop, electrical shop, paint shop and welding shop;
• Explosives storage magazines;
• Mine dewatering equipment and sedimentation ponds;
• Fuel storage tanks;
• Administration building.

Port Infrastructure
The concentrate is unloaded from railcars at Pointe Noire and stockpiled onto the former Wabush Yard, which
is owned by SFP Pointe-Noire (“SFPPN”). The yard has a capacity of approximately 2,000,000 t of
concentrate and once investment into a connection conveyor is completed, concentrate and can be either
loaded directly onto a vessel at Dock 30 or multi-user Dock 35 or stockpiled to be reclaimed and loaded at a
later date.
A new multi-user dock, Dock 35, owned by the Port of Sept-Iles, was built at Pointe-Noire in 2013. The dock
has a capacity of 50 Mtpa via two 10,000 tph travelling ship loaders. The dock was designed to receive up to
400,000 DWT Chinamax vessels.
Tailings and Surface Water Management
The proposed mill will produce approximately 289 million tonnes of tailings over a period of 26 years
(2019 – end of 2044). Between 2023 and 2044, the tailings output will vary between 9.7 to 12.5 million
tonnes per year, with an average of 11.2 million tonnes per year.
The tailings are considered low risk tailings from an acid leach and chemical standpoint; therefore, liners will
not be required for tailings storage. As no flotation stream is involved in the process of the tailings, the material
pumped to the tailings impoundment area is relatively coarse, allowing for good drainage and use as
construction material for future embankments. The existing storage capacity, with the current dikes, is
sufficient for at least 7 years of storage. Capital cost, in the form of new equipment or dike raises, is not
required for this period and it is assumed that the current pumping capacity is sufficient to discharge at the
planned locations. Future costs for tailings infrastructures have been estimated and included in the economic
modelling of the project.
New construction is not planned for at least five years, the studies and detailed engineering can be carried
out during the initial four years of operation for the first south extension, and after year 2030 for the second
south extension. Given the low cost of upstream construction methods using tailings, adjustments resulting
from geotechnical or stability studies are not expected to result in cost increases/decreases beyond the
accuracy of the current feasibility study.
The decant water will report indirectly to North Flora Lake (“NFL”) via South Flora Lake (“SFL”). Tailings will
not be deposited directly into NFL, which will act primarily as a polishing system for the decant water and
help prevent suspended sediments from continuing downstream towards Wabush Lake.

Environment
Tacora prepared and submitted an Environmental Assessment Registration (“EA Registration”) to the
Government of Newfoundland and Labrador on September 28, 2017 in accordance with the Newfoundland
and Labrador Newfoundland and Labrador Environmental Protection Act (NL EPA, Part 10). The
Government placed the document on a public notice period, responded to public comments, and released
the reactivation project from further environmental assessment on November 21, 2017.
The EA Registration included discussions regarding the physical features of the project, natural habitat,
potential resource conflicts, and socioeconomic influences of this site. These various factors were considered
from reactivation, continued operation and eventual closure and rehabilitation of the mine site. There was
also another EA Registration document prepared and submitted by the previous owners in November 2015,
but that document was written with a focus on mine closure and site rehabilitation.
Tacora has prepared and submitted three (3) plans and one (1) application to the Government of
Newfoundland and Labrador in support of this facility that relate to environmental and other operational
impacts of resuming operations at the Tacora Mine. These are:
• Reactivation Plan: a document that describes Tacora’s plan to restore the site from its current
condition to operational readiness;
• Development Plan: a document that describes the resumed operations of the mine and associated
facilities for the remaining mine life;
• Rehabilitation and Closure Plan: the document that outlines mine closure and site rehabilitation for
future land use. This plan includes Closure cost estimates that were used to document necessary
financial assurance to the Government of Newfoundland and Labrador;
• Operating Certificate of Approval application: this document describes the environmental control,
monitoring and reporting measures that Tacora will follow to assure compliance with federal and
provincial environmental regulations.
The previous owners conducted air emissions testing (2000 through 2011) to determine pollutant emission
rates for various aspects of the facility operations and these rates were then used as some of the input values
into an air dispersion computer model that intends to simulate potential ambient air quality impacts to the
local area from facility operations over many years. Other model inputs include fugitive emissions from other
mining related activity such as storage piles and vehicular traffic. The modeling report from 2014 indicated
potential exceedances of ambient air quality standards for various groups of particulate matter. While the
computer simulation predicts possible ambient air quality standard exceedances, two actual ambient air-

monitoring stations located downwind of the site have not recorded an actual exceedance attributable to
facility operations in the multiple years that the monitors have been in service.
The project site is situated in a region with typical boreal forest ecosystems and wildlife communities. Given
that the area has been subjected to industrial activity for over 50 years, wildlife has adapted either to avoid
the area or to conduct some or all of their life cycle stages within the suitable areas of the mine site. Large
mammals rarely occur in the mine site and no hunting is permitted within the boundaries therefore no
anticipated resource conflicts are expected with respect to big game. Minimal clearing and grubbing are
required, however, to avoid adverse effects on migratory birds and bird species of special conservation
concern, all clearing activities will be conducted in accordance with accepted protocols related to avoidance
of disturbing nesting sites. Tacora’s no hunting, fishing, or trapping policy will be implemented throughout the
construction and operation of the Project, therefore no other wildlife conflicts are anticipated.
The area affected by Tacora’s operations has been subjected to industrial activity for over 50 years, and fish
resources have been able to conduct some or all of their life cycle stages within suitable areas of the mine
site. There will be no additional physical alteration of fish habitat or reduction in fisheries productivity
associated with the re-activation of the Tacora Mine. Tacora is fully compliant with all fisheries compensation
and offsetting required under the Fisheries Act (Canada). This applies to all historical activities and planned
reactivation of the mine as related to mining and processing activities and associated deposition of mine
tailings and associated effluents. Tacora is also continuing all required monitoring of effluent discharges and
water quality as required under the federal Metal Mining Effluent Regulations (MMER), Canadian Council of
Ministers of Environment (CCME) guidelines and provincial (Certificate of Approval) criteria including acute
and sub-lethal biological testing. Tacora will implement a no fishing policy throughout the operation of the
mine; therefore, no fisheries productivity conflicts are anticipated.
Water treatment associated with tailings management consists of natural (unaided) settling of solids in Flora
Lake, approved under MMER for tailings management. Water quality in Flora Lake, as measured at its
discharge (Final Discharge Point under MMER) at the Flora Lake Outlet Arm to Flora River and then Wabush
Lake, is consistently in compliance with the metal and suspended solids criteria in the federal MMER and
provincial Environmental Control Water and Sewer Regulations (ECWSR) and the acute lethality criteria in
the MMER. The typical water quality as measured and reported also meets or exceeds the CCME criteria for
Protection of Freshwater Aquatic Life.
The cost to decommission and reclaim the open pits, waste rock dumps, ore handling and processing
facilities, tailings management area and all of the related infrastructure associated with the Scully Mine
site is estimated to be CAD 41,738,730. The cost estimate was determined by reviewing and updating the
approved 2014 cost estimate completed by the previous owner, Cliffs, with Tacora making changes to reflect

revisions as part of the new 2017 draft closure plan, additional research, recent contractor estimates, and
changes mandated by the Department of Natural Resources are discussed throughout the Plan. Where
possible costs based on current knowledge for activities were used. This estimate includes costs for an
ongoing environmental monitoring program which will extend beyond closure and costs for maintenance and
geotechnical inspections are also included in this estimate.
Market Studies
AME Consulting Limited (“AME”) was engaged by Tacora to produce a report on the iron ore industry,
including an overview of the Scully Mine iron ore project. The AME report provides an overview of the supply
and demand dynamics of the iron ore industry, the different grades of iron ore sinter fines and concentrate,
as well as short term price outlook and an assessment of how the Scully Mine product fits in the market.
The Scully Mine project aims to produce a high grade iron ore concentrate with iron content of 65.9% from
the restart of mining operations. The product was considered to be a high quality iron ore concentrate in the
past and is expected to be a high in grade with respect to iron content with a very low LOI feature, and low
in impurities such as silica, alumina, sulfur, and phosphorus, characteristics that are desirable, and generally
attract a premium to the CFR China 65% benchmark. The product will be exported into the seaborne market
through Pointe-Noire, near Sept-Iles, Quebec. The quality adjusted CFR China costs for the project are
expected to be lower than most other Canadian concentrate producers.
Iron ore is primarily used in the steel industry and is one of the key raw materials in the iron making process;
along with coke and limestone in a blast furnace, and natural gas or coal in a direct reduction furnace. The
global iron ore market is expected to be around 2.1 Bt in 2017, and is forecast to grow at a CAGR of around
2%.
China remains the largest market for iron ore globally, and is forecast to account for approximately 58% in
2017. Chinese domestic steel consumption is estimated to increase by around 36 Mt in 2017 to around
717 Mt. AME estimates Chinese crude steel supply to increase by around 3% to approximately 835 Mt
in 2017. Chinese total iron ore demand is estimated to be just over 1.2 Bt in 2017, an almost 4% increase on
2016. Meanwhile, Chinese demand for seaborne iron ore is expected to increase by over 2% in 2017 to
991 Mt when compared to 2016, despite domestic production increasing for the first time since 2013.
Increased profitability, and renewed focus of environmental regulation has resulted in a structural change in
the consumption of iron ore in China, with lower grade iron ore receiving larger discounts to the CFR China
62% benchmark, while higher grade iron ore is earning larger premiums to the CFR China 62% benchmark
(the actual 65Fe to 62Fe spread for the TSI for the 4th quarter of 2017 has averaged over CAD 20 per dmt).
There has been an increased focus on high grade iron ore, which has the advantages of increasing blast

furnace productivity, while at the same time, reducing pollution from blast furnaces and sintering operations,
which can be the most polluting part of the steel making process.
Elsewhere, traditional iron ore demand markets in Europe and North Asia, are expected to see modest
demand growth with CAGRs of around 1%. India is expected to be the fastest growing consumer of iron ore
with CAGR of around 9% from 2017-2020, to become the second largest consumer, overtaking Japan.
Iron ore supply is expected to increase by around 3% in 2017, on the back of increased demand from steel
producers. This growth is expected to moderate through to 2020 achieving a CAGR of around 1% to reach
almost 2.2 Bt.
Iron ore supply is highly concentrated, with just three countries, Australia, Brazil and China, accounting for
around 69% in 2016, and the four largest companies accounting for around 50% of production. Brazil is the
largest producer of high grade iron ores, and in turn, Brazil’s largest producer, Vale, is the largest producer
of high grade ores. The next largest producer of high grade ore is China; however, production is expected to
decline over the period to 2020, as high cost production exits the market in favour of low cost imported
material. The two largest sources of new iron ore supply are Hancock's Roy Hill in Australia and Vale's S11D
in Brazil; however, only S11D will produce high grade ores; whereas Roy Hill is producing comparably lower
grade material. In almost all cases outside Brazil, the ability to produce higher grade ores requires
benefication through processing methods such as those used in Canada and at the Scully Mine.
Throughout 2017, the CFR China 62% iron ore spot price has been volatile, reaching a high USD 95/t
(CAD122.4/t) towards the end of February and ranging to lows around USD 60/t (CAD 77.3/t). AME forecasts
the price to average USD 71/t (CAD 91.5/t ) in 2017, reflecting an expectation that Chinese demand for higher
grade and quality iron ore will continue with the focus on increasing productivity, and also to offset higher
coking coal costs. As a result of new low cost supply, the price is expected to dip to USD 60/t (CAD 77.3/t)
in 2018 and 2019 and as new low cost supply is absorbed, the price is expected to increase again to USD 61/t
(CAD 78.6/t) in 2020. Over the longer term, AME expects demand and supply balance with long-term iron
ore prices expected to be structurally higher than historical levels, mainly on the back of increased operating
costs.
The premium for high grade ores with 65% iron content have increased throughout 2017, to reach a peak in
the third quarter of over 30% when compared against the price for iron ore containing 62% iron. AME expects
this pricing spread to ease marginally in the short term, but remain elevated above long-term levels, as steel
mills focus on productivity with an average of around 20%. The long-term shift is expected to be driven by
ongoing drive to reduce pollution through increased productivity and efficiency in integrated steel works, by
focusing on higher grade raw materials.

Table 1.4: Estimated Historical and Forecast Iron Ore Prices, 2011-2035 (Real 2017)
2021-2025
2026-2030
2031-2035
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
USD/t
Iron Ore
62% Fe CFR Tianjin Spot Price 168 129 136 97 55 58 71 60 60 61 62 72 73
65.9% Tacora Fines CFR North China 89 74 74 77 77 89 88
Source: AME
Figure 1.3: Estimated Historical and Forecast Global Iron Ore Price, 2011-2020 (Real 2017)
Source: AME
Capital Cost Estimate
The re-start of the Scully Mine requires an initial capital expenditure (“CAPEX”) of CAD 205.5 M inclusive of
contingency (13.0%) but exclusive of applicable taxes, escalation, risk and management reserves. The
accuracy of the estimate is at ± 16.4% given the methodology and level of confidence with respect to the
project definition. Table 1.5 presents the CAPEX summary by Engineering Work Package (“EWP”) and
Table 1.6 by project area.
This Capex estimate is intended to assist Tacora in seeking the necessary funding to execute the Scully Mine
re-start project.

Table 1.5: Capex Estimate Summary per EWP

Total Costs
EWP # and Description Manhours
(k CAD)
01 - Dryer Re-Built, #2 19,351.8 3,437
02 - Mill Gear Replacement, #6 2,587.7 1,021
03 - 1B Belt Magnet 1,101.1 313
04 - Fresh Water Header 1,561.6 218
05 - Mill Feed Chute 4,053.2 879
06 - Mill screen oversize and spiral feed pump 1,089.5 389
07 - Manganese Reduction 25,526.8 8,360
08 - Primary Crusher Rock Hammer 3,895.1 1,995
09 - Tails line improvement - -
10 - Added loadout bin capacity 22,696.5 14,707
11 - Plant Structural Repairs 1,815.8 405
12 - Dryer PLC Update 6,082.1 1,212
13 - Electrical Refurbishment 15,495.0 4,757
14 - New Instrumentation 1,791.6 298
15 - Rod Deck Conversion 2,868.9 630
16 - Plant PLC Upgrade 1,428.7 2,020
17 - Railcars and Tripack - 4,030
18 - Rail Track - 287
19 - Mining - 105,732
SUB-TOTAL: DIRECT COSTS 111,345.3 150,690
INDIRECTS (excluding escalation and risk) 2,226.9 54,782
TOTAL 113,572.2 205,472
Note: Numbers may not add due to rounding

Table 1.6: Capex Estimate Summary per Area

Area # and Description Manhours Total Costs (k CAD)
00 – General / Unassigned 8,230.1 3,460
01 - Site Preparation and Plant Layout - -
02 - Jean River Crossing - -
03 - Temporary Construction Facilities - -
04 - Yard Piping: Water Supply 1,561.6 218
05 - Roads and Railways - 4,317
06 - Tailings Disposal 84.7 328
07 - Electrical Distribution 2,180.1 578
08 - Boiler Room 12.1 21
09 - Switch Room and Switch Yard 6,688.0 2,264
10 - Water Pump House 344.6 112
11 - Maintenance Shops and Warehouse - -
12 - Administration Building - -
13 - Crusher Building 3,802.3 2,064
14 - Ore Conveyors - -
15 - Ore Storage 12.1 64
16 - Mill Building 33,257.2 10,649
17 - Dryer Building 28,254.4 5,258
18 - Concentrate Conveyors - -
19 - Loadout Bin 22,708.6 14,740
20 - Thickeners - -
21 - Classifier Building 1,101.1 313
22 - Truck Storage - -
23 - Mobile Equipment 3,108.5 106,304
24 - Mine Infrastructure - -
910 - EPCM - 2,642
920 - CONSTRUCTION FIELD INDIRECTS - -
930 - FREIGHT AND LOGISTICS - 372
940 - VENDOR REPRESENTATIVES - 2,058
950 - COMMISSIONING 2,226.9 245
960 - TACORA / OWNER'S COSTS - 23,865
970 - Contingency - 25,600
980 – Escalation (excluded) - -
990 – Risk (excluded) - -
SUB-TOTAL: INDIRECT COSTS 2,226.9 54,782
TOTAL 113,572.2 205,472

Operating Cost Estimate
A summary of the average operating cost over the life of mine is show in Table 1.7.
Table 1.7: Summary of Average Production Period Operating Costs
Production Period Average

Description CAD/t CAD/dmt
% of Costs
processed concentrate
Mining 5.06 14.50 31.4%
Processing plant 4.22 12.08 26.2%
Water & tailings operations 0.30 0.85 1.9%
General & administration and other 0.84 2.42 5.2%
Cash Cost FOB Mine 10.42 29.85 64.7%
Concentrate transportation & handling * 5.70 16.32 35.3%
Cash Cost FOB Pointe Noire 16.12 46.17 100.0%
Royalties 2.11 6.05
Cash Cost FOB Pointe Noire including Royalties 18.23 52.22
USD-Equivalent Cash Cost FOB Pointe Noire 14.15 40.52
including Royalties
* Includes price adjustments which are function of iron ore price

Figure 1.4: Operating Costs over the Project Life

Plant Maintenance Program
An important part of the improved plant availability is based on the reduced downtime of the production lines.
Past issues were studied and Tacora developed new preventive maintenance schedules and procedures to
minimize downtime. In addition, a work agreement was reached with the United Steelworkers which allows
the possibility to hire contractual manpower to minimize shutdown durations. Critical unreliable equipment or
components were identified and their modification or replacement is included in the CAPEX.
Economic Analysis
The economic assessment of the Scully Mine Restart project of Tacora Resources Inc. is based on Q4 2017
price projections in U.S. currency and cost estimates in Canadian currency. An exchange rate of CAD 1.2886
per USD 1 was assumed to convert particular components of the cost estimates USD market price
projections into CAD. No provision was made for the effects of inflation. The evaluation was carried out on a
100%-equity basis. Current Canadian tax regulations were applied to assess the corporate tax liabilities,
while the terms of the Nalco-Javelin (Mineral Lands) Act of 1957 are applied in lieu of the standard mining
tax regulations of Newfoundland and Labrador. The financial indicators under base case conditions are
presented in Table 1.8.
Table 1.8: Financial Indicators Under Base Case Assumptions

Base Case Financial Results Unit Value
Pre-Tax Results
NPV @ 6% M CAD 2,104
NPV @ 8% M CAD 1,640
NPV @ 10% M CAD 1,298
Internal Rate of Return % 48.7
Payback Period years 2.4
After-Tax Results
NPV @ 6% M CAD 1,447
NPV @ 8% M CAD 1,121
NPV @ 10% M CAD 880

A sensitivity analysis reveals that the Project’s viability will not be significantly vulnerable to variations in
capital and operating costs, within the margins of error associated with feasibility-study-level estimates.
However, the Project’s viability remains more vulnerable to the CAD/USD exchange rate and the larger
uncertainty in future iron ore market prices.
Financial Model and Results
Figure 1.5 illustrates the after-tax cash flow and cumulative cash flow profiles of the Project for base case
conditions. Note that the total height of a particular bar (i.e., after-tax cash flow plus corporate and mining
taxes) represents the before-tax cash flow.
Figure 1.5: After-Tax Cash Flow and Cumulative Cash Flow Profiles
300 4000
CUMULATIVE AFTER-TAX CASH FLOW (M CAD)

3000
200
AFTER-TAX CASH FLOW (M CAD)
2000
100
1000
0 0
-1000
-100
-2000
-200
-3000
-300 -4000
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
YEARS
Corporate and Mining Taxes After-tax Cash Flow Cumulative After-tax Cash Flow
Interpretation and Conclusions
Geology and Mineral Resources
The geological interpretation for the Scully deposit is based primarily on diamond drilling data and
2D sectional interpretations by representatives of Cliffs in 2014. The geology of the deposit is well
understood.

The mineralization is found in three main members (Upper, Middle and Lower) of the Sokoman Formation.
Each member is subdivided into sub-units, which present different ore mineralogy, recoveries and
contaminant levels. The mineralization controls of the deposit are also well understood.
The protocols followed to collect sample data post-2002 are considered sufficient for NI 43-101 purposes.
No evidence of established protocols was found for drillings prior to 2002; therefore, confidence in this
information is lower. Sampling has been undertaken based on geological logging, and is adequate for the
mineralization style and size of the deposit.
QAQC samples submitted as part of the reanalysis program returned values within expectations. No
QAQC data was available for historical drilling (all drilling pre-2014), and all historical analyses were
undertaken by the on-site laboratory. The laboratory was not certified. GMS considers this insufficient,
however Scully was a long-term past producer of iron ore concentrate, and has demonstrated the ability of
reconcile grade with the geological model. GMS has outlined considerable recommendations to return the
laboratory and sampling practice on site to NI 43-101 compliance.
Réjean Sirois, P. Eng., from GMS, supervised re-sampling of drill core during the site visit on August 17- 18th,
2017 to validate the grades of the assays in the drilling database. GMS believes the check assay results are
sufficient, however a reduction of 7% was noted in the reanalyses for Fe %.
The geological model includes a total of 13 lithology units which were modelled using the provided
2D sectional interpretations and the coded drill hole database. 3D wireframe solids were produced in
Leapfrog™ and are representative of the folded lithologies present in the Scully deposit.
Each bedding orientation is appropriately defined within the 14 structural domains dividing the geological
model.
Mineral Resources were estimated in the mineralization and structural domains, using Geovia GEMS™ from
6.0 m long composites using four ordinary kriging interpolation passes. Blastholes were included in a small
initial pass, and the remaining three passes only used exploration drill holes. Each search ellipse was
incrementally larger than the previous, and was based on variogram ranges and the drill holes spacing.
The performance of the block model to predict resource estimates was evaluated through global and local
validation methods, including visual comparisons, descriptive statistics, swath plots, Q:Q plots and blasthole
data comparisons. No production data was available to validate the accuracy of the model to true known
grade. Block grades were found to reproduce composite grades sufficiently in the block model.

The Mineral Resources are reported within a Lerchs-Grossman open pit shell and are effective November 1st,
2017, using a cut-off of 20% Fe and a long-term iron price USD 70/t (CAD 90.2/t) plus a USD 9/t (CAD 11.6/t)
adjustment for Fe content. as follows:
• Open pit Measured and Indicated Mineral Resources total 734 Mt at an average grade of 34.6% Fe.
• Open pit Inferred Mineral Resources total 237 Mt at an average grade of 34.1% Fe.
Mineral Resources were classified into Measured, Indicated and Inferred categories according to the CIM
Definition Standards on Mineral Resources and Mineral Reserves as adopted by
National Instruments 43- 101 Canadian Standards of Disclosure for Mineral Projects (“NI 43-101”).
Mining and Mineral Reserves
Open pit optimization was conducted using Whittle software to determine the optimal economic shape of the
open pit to guide the pit design process. Pit optimizations use an iron ore price of USD 60/t (CAD 77.3/t) plus
a USD 9/t (CAD 11.6/t) adjustment for Fe content and utilized an exchange rate of 1.25 CAD/USD.
The mine design and Mineral Reserve estimate have been completed to a level appropriate for feasibility
studies. Definitions for Mineral Reserve categories used in this report are consistent with the CIM definitions
as adopted by NI 43-101. The Mineral Reserve estimate is based on a cut-off of 27% for weight recovery for
all sub-units except sub-unit 52 which is 30%. In addition, sub-unit 34 has a ratio of weight recovery to iron
of at least 1.
Proven and Probable Mineral Reserves are estimated to be 443.7 Mt an average grade of 34.83% iron and
2.58% manganese for 154.9 Mt of iron concentrate at 65.9% Fe. Lower member ore (sub-units 51, 52 & 53)
represent 62% of the tonnage, Middle member ore (sub-units 31 to 34) represent 32% and Upper member
ore (sub-unit 22) the remaining 6%.
An owner mining approach with conventional open pit mining techniques is planned on 12 m benches with a
final 24 m bench height excavated in most pit walls. Bench face angles, and berm widths are variable by
domain. The bench face angles are designed to follow the bedding plane for Domain 3 in the hanging wall.
The inter-ramp angles range from 32 to 46 degrees.
Tacora has purchased three used hydraulic shovels and three used production drills from equipment re-
sellers. The equipment hours have been considered in the replacement schedule and the cost of these units
have been considered as sunk costs for this feasibility study.

Loading in the pit will be done with a fleet of already owned hydraulic and a front-end loader yet to be
purchased. The loading fleet is matched with mining trucks which have yet to be purchased. The fleet reaches
a total of 16 hauling units in the second half of the LOM.
Production drilling will be accomplished with three electric rotary blasthole rigs which are already purchased
for the project. No pre-split drilling is planned due to the incompetent nature of the rock mass.
The Tacora open pit has been divided into seven sectors referred to as East Pit East, East Pit West, West
Pit, South Pit, West Pit Extension South, West Pit Extension North and Boot Pit. The final pit design consists
of pushbacks to the existing pit limits and a deepening of the current excavation. Most of the tonnage
remaining to be mined is from the West Pit (24%), East Pit West (21%) and South Pit (20%). The initial mining
is conducted on higher elevation benches well above the current water levels in the pit. Dewatering of the
pits will be undertaken in advance of mining with a combination of well fields on the west side of the pit and
in-pit sumps.
Waste rock will be stored in several waste dumps around the pit limits including the North Dump, NW Dump,
SW Dump and South Dump. In addition, two in-pit dumps are planned to reduce haulage costs and footprint
impact. One dump is located in West Extension and the other in East Pit West which will receive 40% of the
total waste mined.
The LOM plan details 26 years of production (2019 to 2044) which assumes two years of ramp-up (2019 &
2020) before achieving in 2021 the target production rate of about 6 Mt of concentrate per year. Mining pre-
production activities are initiated in Q3-2018. The concentrator starts processing ore in Q4-2018
(November 2018) with a transition to commercial operations in 2019.
The peak mining rate of approximately 35.8 Mt is reached in 2036 with a peak of 40 Mt moved. The average
mining rate is 31.8 Mt/yr over the LOM.
The open pit generates 387.7 Mt of overburden and waste rock for a strip ratio of 0.87:1 over the LOM with
45.8 Mt of ore transiting through stockpiles for blending purposes and to balance mining and milling
constraints. A total of 831.5 Mt is mined from the pits.
Processing
The concentrator has operated for around 50 years; consequently, the process for treating the ore is proven
and considered robust. With a well-established and projected iron recovery of 65.9%, there exists significant
upside opportunities to improve overall iron recovery in the future by equipment additions to scavenge iron

from spiral tails. Studies by Scully Mine and Cliffs personnel showed promising potential for fine iron recovery
by various methods including but not limited to flotation, Kelsey jigs and magnetic separation.
The process plant produced more than 6 million tonnes of concentrate for two years in the past. Therefore, it
is considered feasible to reach the target throughput.
Several repairs and modifications are performed to improve plant reliability, especially the mills feeding
system and mills drive.
High tension separators are converted to dry magnetic separation for higher reliability and proper manganese
removal. Two lines were already converted in the past operations, so this process is considered robust and
proven.
Transportation
The concentrate storage capacity will be increased to allow the loading of 168 car trains. This will include
additional buffer storage of dry concentrate.
Concentrate will be transported by train to Pointe-Noire where it will be loaded onto ships. Rail haulage is
contracted out to QNS&L up to Sept-Iles. From there, trains are transported to Pointe-Noire by Chemin de
Fer Arnaud. Train unloading and ship loading is contracted out to SFPPN. This operation will use the same
unloading facilities as the original operations and the new shiploader. SFPPN will be responsible for the
refurbishment of the existing equipment to meet required throughput.
Contracts mentioned above have been agreed with the service providers for the planned production rate
except for SFPPN.
Tailings Storage Facility and Dams
The existing storage facility will be used with an estimated capacity sufficient for 7 years. As this capacity is
depleted, planning and construction of new dikes and additional pumping capacity will be required.
Current capacity is available without needing to directly discharge tailings into NFL.
To meet life of mine targets for tailings impoundment, the storage capacity of NFL and part of its surrounding
watershed is required.

After almost 50 years of deposition, there exists a substantial tonnage of tailings in the tailings basin at Flora
Lake. Due to gravity segregation from slurry discharge of the tailings a large high grade delta containing
significant iron units has been created over the 50 years of prior operations. This iron resource presents a
potentially attractive opportunity for mining and processing of iron bearing tailings to recover iron. Such
recycling operations present an excellent improvement in sustainability of iron mining operations and should
be investigated in due course. The new mineral lease covering the Scully Mine comprehends such a
possibility and provides an incentive for such sustainable recycling of tailings by providing a 40% reduction
in the royalty rate applicable to concentrate produced from tailings.
Electrical, Instrumentation and Controls
The assessment and work plan regarding electrical and instrumentation consists of many equipment
replacement or upgrades. For example, all 46kv breakers will be replaced, all emergency generators need
replacement, the lighting system requires an upgrade, as well as other electrical work.
All the equipment that are not currently energized wil have to be tested prior to start-up. Required repairs will
be done following these testings.
Most of the instrumentation is considered in good working condition. The control room equipment will require
upgrade.
Recommendations
The following recommendations are put forward for the continuation of this Project into the next phases which
are: detailed engineering, procurement, and construction:
It is Tacora’s intent to be operational by November 2018 as per the plan put forth in this study. For this to
become a reality, it is imperative that critical path purchase orders for mining trucks and plant’s project
detailed engineering be placed in early February. Operational employees will have to be hired back in a
timely fashion to allow time for training and participation in the commissioning activities planned for the third
quarter of 2018.
In the development of the feasibility engineering study, drawings which were used as references for this study
were not issued “For Construction” or “As Built”. During the detailed engineering phase of this project, further
field surveys will be required to determine the “as-built” conditions of the existing brown-field facilities.

For all future drilling and sampling campaigns (including blasthole drilling), implementation of a
comprehensive QAQC protocol including the insertion of certified blanks, certified reference material
(CRM standards) and field duplicates regularly into the sample stream is recommended.
The XRF analysis methodology should be reviewed by an external expert. The current fused bead
methodology uses an extremely small sample size considering the half-bench-scale composite lengths (i.e.
for each 5 – 10 m composite of NQ drill core, only 0.8 g of pulverised sample is used for analysis). GMS
recommends adjusting the methodology to use a larger sample size (i.e. pressed pellet), which generally
uses between 8 and 15 g of pulverised material (depending on pellet diameter). In addition, currently hand-
written laboratory certificates should be replaced by an automated system which reduces the chance of
human-induced errors.
Specific gravity readings should be taken regularly on drill core, and downhole density logs are acquired for
new drilling.
All exploration and blasthole sampling and logging data should be stored in a comprehensive, centralised,
fit-for-purpose drilling database which is exclusively managed by a geological database administrator.
GMS recommends further investigating the impact of including excessively long samples (longer than the
bench height) in the resource estimation. If drill core is still available for these drill holes, G Mining
recommends re-sampling these intervals using smaller sample lengths.
Regarding the resource estimation, GMS recommends that the Scully Deposit is unfolded for the purposes
of variography, so more accurate ranges of the variogram can be determined. In addition, GMS recommends
using a variable search ellipse orientation during resource estimation (dynamic anisotropy) to avoid the use
of structural domains.
Characterization of the stockpiles present on site should be done to be able to use this material when
commissioning the plant or to generally include them in mineral reserves as they have been excluded from
the study.

There are inferred resources within the current pit designs which have been excluded from the economic
analysis and mine plan for this study. It is recommended to establish a definition drilling program to increase
the level of confidence and resource category of these resources in due time according to the mine plan.
Additional hydrogeological investigations are recommended for the East, South and Boot Pits to investigate
groundwater infiltration.
Additional waste rock storage options should be investigated. In the event of expanded larger open pit limits
optimized for higher iron ore prices additional waste dump storage capacity will be required and may limit or
defer the possibilities of in-pit waste storage.
Investigations on the pumping procedure for the flooded pits into the surrounding lakes must be done with
the Newfoundland and Labrador authorities as limitations may apply. There is sufficient time in the mining
schedule before the dewatering of flooded pits becomes critical for the mining schedule compliance.
Recommendations were made, by the geotechnical consultants, for further work to gain confidence in pit
slope design.
Environmental Permitting
Design water management system to collect runoff water from mine infrastructure. An offset was left in the
designs for ditches and ponds.
Processing
Confirm environmental requirements to refurbish the dryer scrubbers. Perform detailed engineering for the
required modifications. Confirm that the dryer fan can handle the new scrubber design pressure loss.
Perform dust collection study at the dryer building (Dry concentrate handling).
Perform dust collection study at the loadout facility.
Validate if the torque system of the tailings thickener can be operated at 45% solid during the first months of
operation. The goal is to reduce the water reclaimed (to save energy and water pumps maintenance cost).

Optimization study (Spring 2018): Geotechnical and liquefaction studies on finer tailings to determine if dam
construction on interior tailings is feasible to increase storage capacity. Existing literature review can begin
in Winter 2018. Optimize tailings discharge plan to avoid freezing or seepage issues.
Review water management alternatives.
Spring 2018: Updated annual tailings dam inspection report.
Spring 2018: Optimize discharge plan.
Spring 2019: Tailings beach survey. Review discharge plan and update volume projections with actual
tailings data. Repeat on yearly basis.
Spring 2019: Plan schedule for geotechnical investigations and detailed engineering of starter dikes.
Spring 2019: Size cyclones and test efficiency for obtaining low fines content tailings construction materials.
Conduct laboratory testing.
Plant Structures and foundations
Prior to any start-up activities, a detailed structural inspection must be undertaken for all plant structures and
foundations to ensure their integrity and that their capacity is adequate. The previous structural audit done
by BBA in 2012, classified several items as critical (Risk rating 4); however, many of these were not repaired
/ completed. Any damage / corrosion which may have occurred since the 2012 audit should also be assessed.
Electrical equipment testing should start as early as possible to reveal whether there are problems with the
electrical equipment and allow for budgeting and repairs.
E&IC works shall be done as early as possible while most of the plant is not operational. PLC upgrade will
have some lead time for the programming and off-site testing.

Plant Maintenance
As a significant part of the improved availability is based on the reduced downtime of equipment, over the life
of the mine Tacora must continuously identify and perform the required maintenance as well as monitor the
efficiency of the maintenance tasks. In addition, the described work culture (section 1.1) must be maintained.
Project Execution
Old documentation does not meet modern standards and needs to be updated and made usable for all future
projects and for plant maintenance.
Implement bridge phase so that Engineering can start the development of the deliverables to a level sufficient
to support the issue of Requests for Inquiry (RFI’s) for critical equipment and materials as well as lump sum
packages.

2 INTRODUCTION
Background
Tacora acquired the assets associated with the Scully Mine located in Wabush, Newfoundland and Labrador,
Canada as announced by press release on July 19, 2017. The asset purchase agreement with Wabush Iron
Co. Limited, Wabush Resources Inc. and Wabush Lake Railway Company Limited was executed under a
court supervised process under the CCAA.
The Scully Mine, also referred to as Scully Mines, was operated by Cliffs Mining Company, a subsidiary of
Cliffs from 1986 when Cliffs acquired PM to its closure in February 2014. PM designed and built the facilities
and began operations in 1965. Scully Mine had the capacity to produce up to 6 million tonnes of iron ore
pellets per year. The former operation included a pellet plant located at Pointe-Noire near Sept-Iles.
Cliffs shut the pellet plant in May 2013 and then the mine and concentrator in February 2014 at which time
the site was placed under care and maintenance. On November 19, 2014, Cliffs announced the pursuit of
exit options from its Eastern Canadian iron ore operations.
Several efforts have been undertaken by Tacora to restart the Scully Mine including:
• The negotiation and signing of a new collective bargaining agreement with the United Steelworkers
union;
• Establishment of a 6-year iron sales agreement with Cargill for the purchase of 100% of high grade
iron ore concentrate produced through to 2023;
• Negotiated a new mineral lease valid to May 2055 with improved commercial terms;
• Execution of a new life of mine rail transportation agreement with the QNS&L railway, for the
transportation of product from Wabush to Sept Isle;
• Purchase of several pieces of mobile mining equipment including shovels and rotary drills to allow for
a rapid start-up of operations;
• A decision was made to sell concentrate instead of pellets thereby the mine has been de-bottlenecked
from pellet production;
The remaining resources of the Scully Mine consist of high-manganese iron ore, primarily at depth below the
existing operations and near surface as pushbacks to the existing open pit. To achieve a concentrate with a
manganese content below 2%, it is planned to install four (4) additional manganese reduction lines in the

concentrator (magnetic separation). Cliffs piloted a manganese reval circuit and commissioned two (2) lines
in the plant which demonstrated its efficiency in reducing manganese with an incrementally modest cost.
Additional manganese removal lines are required to treat the entirety of the mill feed and is a primary focus
of the restart plan.
Scope
Tacora engaged Ausenco and GMS to complete an independent feasibility study for the restart of the former
Scully Mine in Wabush. No previous NI 43-101 Technical Report has been issued on the property by the
former owner and operator Cliffs.
The scope of the project mainly consists of adding manganese reduction lines in the concentrator to decrease
the manganese content in the final concentrate to below 2% and undertake various plant refurbishments
required for the concentrator building and equipment to operate reliably at the planned production rate.
The operation is planned to ramp-up to a steady state annual production rate of 6 Mt per year of iron
ore concentrate with an iron grade in excess of 65% iron. An updated Mineral Resource and reserve
was estimated with an associated LOM plan. Several pieces of mine equipment have been
purchased for the project. A mine equipment fleet assessment was undertaken and additional
equipment requirements were estimated to achieve the production targets.
A number of scope elements were prepared by additional consultants including Golder Associates, Sikumiut
Environmental Management Limited (“SEM”) and AME. Table 2.1 provides a summary of the areas of
responsibility and associated firms.

Table 2.1: Areas of Responsibility
Scope Company
Geological model; Mineral Resource estimate; data verifications GMS

Mineral reserve estimate; mine plan; mining methods and equipment requirements;
GMS
explosives supply; mine operating and capital cost estimation
Pit slope geotechnical assessment; mine hydrogeological model Golder
Mineral processing; recovery methods; mass balance; concentrator and G&A operating
Ausenco
cost estimation
Manganese removal line integration; plant and equipment refurbishments capital cost
Ausenco
estimation;
Tailings storage facility design; tailings management; tailings filling plan Ausenco
Concentrate rail transportation; port facilities Tacora
Environmental impact assessments; permitting SEM
Concentrate marketing AME
Economic analysis Ausenco/GMS
Basis of the Report
Information presented in this Technical Report is based on the following:
• Information provided by Tacora;
• Manganese removal line commissioning reports;
• Various engineering reports and assessments of the former Scully Mine;
• Previous operations data;
• COREM – core sample characterization testwork.
Project Description
The Scully Mine project includes the following elements:
• A new mining plan and additional mobile equipment including:
o Purchase of mine trucks;

o Purchase of support equipment such as track-dozers, graders, etc.;
o Purchase of mine dispatch system and radio network;
• Reuse of the mine maintenance facility, workshops and washbay;

• Reuse of the explosives magazines with an upgrading of the emulsion storage site in accordance with
supplier specifications;
• A new waste rock management plan including dump expansions, raises and in-pit dumping;
• Open pit dewatering;
• Installation of rock breakers at the primary crushers;
• Concentrator upgrade with the conversion of HT separation lines to magnetic separation for better
manganese removal;
• Revised tailings management plan and storage facilities in accordance with new mine plan;
• Additional rail loadout storage capacity to accommodate larger trains;
• Upgrade of the dryer burner system;
• Upgrade of the dryer scrubbers for better environmental performance;
• Completion of several equipment modifications or upgrades to improve plant availability.
Qualified Persons and Site Visits
All QPs who participated on the study visited the site with the exception of Rémi Lapointe, Martin St-Amour
and David Sims.
The list of QPs and their areas of responsibility and site visit dates are summarized in Table 2.2.
Table 2.2: Qualified Persons Summary

Name of QP Company Site Visit QP Sections
Louis-Pierre Gignac, P. Eng. GMS Sept 16-17, 2017 Section 2, 4, 5, 6, 15, 19, 22, 25.2, 26.2 and 27
Réjean Sirois, P Eng.. GMS Aug 17-18, 2017 Section 6, 7, 8, 9, 10, 11, 12, 14, 25, 26
Étienne Bernier, P Eng. GMS Aug 31-Sept 1, 2017 Section 16, 21, 23, 24, 27
Karl-Emmanuel Giroux, P Eng.. Ausenco Aug 31-Sept 1, 2017 Section 1, 18 (except 18.4), 25, 26, 27
Rémi Lapointe, P Eng. Ausenco No site visit Section 1, 13, 17,21,25, 26, 27
Martin St-Amour, P Eng. Ausenco No site visit Section 21
David Sims, P.Geo Ausenco No site visit Section 18.4
Craig Bugden. P Eng. SEM Previously visited site Section 20

3 RELIANCE ON OTHER EXPERTS
The authors have written this report using existing information gathered from previous studies and
engineering work, past operations, historical operational data from the plant, historical data from the mining
operation of the Scully Mine, technical field surveys and a metallurgical test work campaign. The existing
technical data and information was sourced from the document archives of the Scully Mine. The authors of
this report have not carried out a thorough review of each consultant’s work. The sections provided for this
report were supplied by reputable consultants, and there is no reason to doubt the validity of the information.
The marketing Section 19 was provided by AME. AME offers site engineering models for energy, metals and
mining industries. AME’s technical specialists, advanced analytics, comprehensive database and extensive
software tools enable their clients to find opportunities, invest efficiently, improve productivity and reduce
costs. AME’s iron ore mine project database covers over 95% of global-traded iron ore supply as well as over
100 mines within China. With detailed site-level information for each asset, including production and costs
and analysis of technical performance, AME offers unrivalled performance benchmarking and a nuanced
supply-side perspective.
The environmental Section 20 of the report was provided by SEM. SEM is the largest wholly Newfoundland
and Labrador owned and operated environmental consulting firm in the province. It is registered as an Inuit
Business with the Nunatsiavut Government and is considered as an Aboriginal Business under Federal
Government criteria.
A thorough review of both the geotechnical and hydrogeological parameters were completed for this study.
The reviews lead to new geotechnical parameters for the mine infrastructures and new assumptions for
dewatering the site when in operation. Both reviews were performed by Golder, a very reputable consultant
known across the metals and mineral sector.
The track owned by Tacora was inspected by Ingénierie Rivval which is a consulting firm specialized in rail
transportation. Their estimation of the required repairs was used for Section 21.
Railcars were inspected by Pierre Malouf Consulting; a consultant specialized in freight cars. The following
specialists also participated in the inspection:
• John Coleman Car Specialist, Ronsco Inc.;
• Tony (Anthony) Dias Air Brake Specialist, Ronsco Inc.;
• Mike Trickett Welding Inspector, Acuren Group Inc.

4 PROPERTY DESCRIPTION AND LOCATION
Property Description & Location
The Scully Mine is located in the south-west corner of Labrador, three (3) kilometres from the town of Wabush.
Geographically, the mine is located approximately between 52°53.5' and 52°55.5' latitude and 66°54' and
66°58' longitude. The open pits are located west of the town of Wabush and are reachable via the plant
access road off Highway 530 while the tailings disposal area (Flora Lake) is situated east of the town. The
deposit is part of the Labrador Trough and covers an area of approximately 23 km2.
Many other iron ore mines are located in proximity of the Scully Mine: to the south-west, in the Quebec
Province, are the Mount-Wright mine and the Bloom Lake project; to the north of the Scully Mine, in Labrador,
is the IOC Mine (Figure 4.1).

Figure 4.1:Project Location

Mineral Titles
Surface control is a combination of owned real property and leased surface rights. There are no federal lands,
including national parks or Canadian Forces bases proximate to the Project area and the Project is wholly
located within the province of Newfoundland and Labrador. The mining lease locations (Figure 4.2) and their
land control are summarized in Table 4.1.
Figure 4.2: Mining Lease Locations
Table 4.1: Land Control Summary
Original Size
Description Surface Minerals
(ha)
Lot #1 1,450.4 Leased Included
Lot #2 1,517.8 Owned Leased
Lot #3 2,688.5 Owned Leased
Lot #4 595.7 Owned Leased
Wabush Mountain Area 911.7 None Leased

Lot #1
The industrial site and open pits are located within the area shown on Figure 4.2 as “Mining Lease Lot # 1”.
The surface and mineral rights on this parcel are leased from the Government of Newfoundland and Labrador.
This 99-year lease will expire in 2055. The lease history has two aspects: the leases themselves and the
various mergers and acquisitions of lease parties.
The original Lot #1 lease was issued from the Province of Newfoundland (the “Crown”) to the Newfoundland
and Labrador Corporation Limited (“NALCO”) in May 1956. NALCO immediately signed a lease with
Canadian Javelin Limited (“Javelin”) for the same lands and minerals, effectively passing the Crown’s Lot #1
lease to Javelin. In the fall of 1959, Javelin further passed the Crown’s Lot #1 lease to Wabush Iron Co.,
Limited (“Wabush Iron”) and thereby consolidated some other leases into a single, overarching document for
the surface use and mineral rights to Lot #1. These various agreements have been amended from time to
time, but the overall lease path remains as described.
Over the ensuing years, mergers, acquisitions and divestitures have changed the names of these legal
entities, but the lease path remains the same. The NALCO interest is now controlled by Knoll Lake Minerals
(“Knoll Lake”). Javelin’s position is owned by an affiliate of MFC Bancorp, Ltd. (“MFC”). Wabush Iron’s interest
now belongs to Tacora.
Lots #2, #3 and #4
As part of the APA, Tacora obtained the surface rights to all of Lots #2, #3, and #4 “excepting all portions of
that real property that have been sold, conveyed, or assigned…to any third parties… registered in the
Registry of Deeds for Newfoundland and Labrador”. The previous owners had been selling real property to
third parties for several years, and any unsold residential or commercial property within the municipal
boundary of Wabush were explicitly excluded from the APA.
The majority of the land area that has been removed from Lots #3 or #4 over time have been residential and
commercial properties within the Wabush municipal limits. A portion of Lots #2, #3 and #4 had been sold to
Quebec Iron Co. when they purchased the Bloom Lake facility and associated rail spur that crosses the
northern portion of these lots.

Wabush Mountain Area
Tacora did not acquire the surface rights to what is referred to in Figure 4.2 as “Mining Lease Wabush
Mountain”. The previous owner gave up those surface rights in December 2016. Mineral rights are described
in Table 4.1.
Flora Lake Tailings Disposal Area
The “Tailings Disposal Area” shown on Figure 4.2 and further depicted in Figure 4.3 with 2017 aerial imagery
is formally called the Flora Lake Tailings Impoundment Area (“TIA”) within various regulatory approval
documents. The footprint of this TIA is a combination of Tacora owned property within Lot #3 and Crown
property that was the shoreline of Flora Lake in 1957 when the license was granted to Tacora’s predecessors
for a tailings disposal area. The lease has a term that coincides with the surface and minerals lease for Lot #1,
which also expires in 2055.

Figure 4.3: Tailings Impoundment Area

Mining Lease #1
Mineral rights underlying the surface of Government Lot #1 are included in the original surface lease that has
been described above in the section relating to surface rights. These mineral rights are retained by Tacora
until 2055.
Wabush Mountain Area
The Crown leased mining rights to NALCO on May 15, 1962. As was done with other leases, NALCO
immediately assigned this lease to JAVELIN. JAVELIN subsequently assigned the lease to WABUSH, and
then it was included in the APA.
Tailings
Ownership of the iron units contained within tailings remain the property of the original mining lease, as they
are treated consistent with that of ore.
Royalties, Agreements, Encumbrances
Mineral Royalties
Mineral royalties on ore and any reprocessed tailings follow the existing lease agreements as identified for
Lot #1 surface rights. Tacora pays a royalty to MFC, who pays an agreed amount to Knoll Lake, who in turn
satisfies the requirements of the original Crown lease (as amended).
Encumbrances
When the Bloom Lake mining site was developed, a railway spur was constructed along the northern portion
of the Scully Mine site. Portions of this railway are located on Lot #1, and thus there is an existing easement
for two portions of the Bloom Lake Railway. These easements do not affect the mining plans for the
Scully Mine. Figure 4.4 shows these easements overlaid on a 2017 aerial photograph.
Similarly, Tacora has an easement across a land parcel that was sold in 2016 for part of the Bloom Lake
railway. The easement is needed for access and operation of the fresh water pumping system that existed
before the Bloom Lake railway was constructed. Figure 4.5 shows this existing infrastructure on a 2017-aerial
photograph overlaid by the parcel boundary.

Figure 4.4: Bloom Lake Rail Easement

Figure 4.5: Fresh Water Pumping System Easement

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURES AND

PHYSIOGRAPHY
Access
The Town of Wabush is located 320 km north of Sept-Iles, Quebec on the north shore of the St-Lawrence
River. St. John's, Newfoundland is 1,200 km southeast of Wabush while Montreal is 1,016 km to the
southwest. Labrador City is 6.4 km from Wabush and Fermont, Quebec is 32 km west of Wabush. The
process facility is accessed by 2.5 km plant access road off the 503 Highway.
The Trans Labrador Highway and Route 389 connect the region to Quebec and Eastern Labrador by road.
The roads connect Labrador West to Baie Comeau and Goose Bay with an 8-hour trip. These routes are
remote, with no communications infrastructure and limited rest and service areas.
Climate
Wabush has a subarctic climate with precipitations much higher than usual for this type of climate due to the
persistent Icelandic Low, which gives the region some of the rainiest and snowiest weather in all of Canada.
In summer, cloudiness is very high due to the lakes nearby and the unstable northerly airstreams that prevail.
In a wet year, Wabush can receive up to 1,185 mm of precipitation (Environment Canada, 2012). Conversely,
in a dry year, Wabush receives only 675 mm of precipitation. The temperatures range from -40oC to +25oC.
Local Resources
The towns of Wabush and Labrador City are well established with populations of 1,861 (2011) and
7,367 (2011), respectively. The unemployment rate of Wabush and Labrador City are of 11.1% and 8.5%
respectively with an unemployment rate of 13.7% across the province of Newfoundland and Labrador (these
statistics are taken from the 2016 Census from Statistics Canada). The two (2) towns are located 5 km apart
from one another and they contain the infrastructures and necessities to house the employees and their
families who live there including, indoor shopping centers, hotels, lower, middle and high school, a community
center and a hospital. Air transportation needs for the communities are served daily by the Wabush Airport.

Infrastructure
Roads
Various mine roads on the property provide access to all the mining areas and waste dump areas. The Scully
Mine Tailings Line Road connects the process plant to the tailings storage facility and crosses the 503
Highway.
Process Facility
The process facility complex includes crushers, mills, spirals, hydro-sizers, dryers, separation units, load out
bins, ore trains and maintenance shops. The process facility is further described in Section 17 on recovery
methods.
The re-start of the concentrator requires the refurbishment of equipment and buildings and the installation of
manganese reduction lines.
Services Buildings & Ancillary Facilities
Service buildings and ancillary facilities exist and are in good condition to support the re-start of operations.
These infrastructures include:
• Mine fleet maintenance facility with 5 bays and 50 t overhead crane;
• Wash bay within the maintenance facility;
• Auxiliary mine maintenance facility with 7 bays and 10 t overhead crane;
• Warehouse;
• Machine shop, electrical shop, paint shop and welding shop;
• Explosives storage magazines;
• Mine dewatering equipment and sedimentation ponds;
• Fuel storage tanks;
• Administration building.

Power Supply & Distribution
The mine site is connected to the Newfoundland & Labrador Hydro electrical network. Power is generated at
Churchill Falls, 200 km to the East, The Churchill power station has the second largest hydroelectric
generating capacity in North America at 5,428 MW installed.
A 46 kV electrical grid on site electrifies the mine area powering mine equipment and pumping stations.
Water Supply & Tailings Storage
A pumping station and water intake structure located east of the process facility on Little Wabush Lake
provides water for iron ore beneficiation and potable water consumption. During the last seven (7) years of
the former operation, an average of 16.4 M m3 of water was consumed.
Rail & Port Infrastructure
The Mine and Port facilities are connected by a railway. The railway (Figure 5.1) goes from the mine to a
connection with the QNS&L railway, owned by IOC, at Wabush, NL by Arnaud's sister railway, the Wabush
Lake Railway. QNS&L operates the railway between Wabush, NL and Arnaud Jct., QC. At Arnaud Jct.,
Chemin de fer Arnaud owns the segment to Pointe-Noire, Quebec. The railway is owned by Rail Enterprises,
Inc., a division of IOC.
The Wabush railways are comprised of two Canadian short line railways:
• Wabush Lake Railway is 3 km long and connects the Scully Mine to the Northern Land Railway at
Wabush Junction;
• The Arnaud Railroad is a 35 km common carrier, which connects to the QNS&L Railway northeast of
Sept-Îles at Arnaud Junction and terminates at the Wabush port complex at Pointe-Noire. The railroad
primarily transports iron ore and has the potential to transport other commodities with total capacity
of 20 Mtpy.
The Arnaud Railway and port infrastructure are also a critical piece of infrastructure to other neighbouring
mining operations in the Labrador Trough that need to transport materials to, and/or from, Pointe-Noire. The
Arnaud Railway is the only railway connecting Pointe-Noire and the QNS&L Railway at the Arnaud Junction.
The dock facility at Pointe-Noire provides access to Dock 30 and 35 with more than 50 Mtpy of capacity and
the capability to load up to 150,000 t vessels at Dock 30 and up to 400,000 t vessels at Dock 35.

Figure 5.1: Rail Network
Physiography
The mine is located in an area of undulating hills that reach elevation highs of 686 metres and low areas with
elevations of approximately 533 metres. The ground cover consists of barren rock, marsh and coniferous
forests.
There are several lakes within the area of the mine or the adjacent boundaries including Jean Lake, Knoll
Lake, Flora Lake, Wahnahnish Lake, Little Wabush Lake, Harrie Lake, Quartzite Lake, Vern Lake, and Long
Lake.

6 HISTORY
Prior & Current Ownership
The Scully Mine was operated by PM, a subsidiary of Moore-McCormack Resources from 1965 to its 1986
when PM was acquired by Cliffs who operated it from 1986 until being put on care and maintenance in
February 2014. For most of its life, the mine was a joint venture owned by Stelco (37.9%), Dofasco (24.3%),
Inland Steel (15.1%), Acme Steel (15.1%) and Cliffs (7.7%) but after various mergers and acquisitions in the
North American steel industry the ownership was consolidated between Cliffs, ArcelorMittal and U.S. Steel
Canada whereby each partner owned with joint venture percent ownerships of 26.8%, 28.6% and 44.6%
respectively. Cliffs exercised their right of first refusal in February 2010 to acquire 100% ownership of the
property for approximately USD 88 million.
Cliffs shutdown the pellet plant in May 2013 followed by the mine and concentrator in February 2014, thus
placing the site under a care and maintenance program. The closure was due to increased costs, reduced
production rates and a dramatic decrease in seaborne iron ore prices combined with a decrease on pellet
premium pricing. On November 19, 2014 Cliffs announced the pursuit of exit options from its Eastern
Canadian iron ore operations and on May 20, 2015, Cliffs commenced restructuring proceedings under the
CCAA, ultimately selling the Scully Mine and other Eastern Canadian assets. The Scully Mine was sold to
Tacora in July of 2017. The APA was executed through a court supervised process under the CCAA.
Exploration & Development History
Iron ore deposits were first reported in the Wabush area in 1933. It was only in 1956, when PM became
interested in the deposit that field work began. In 1957, intensive geological, metallurgical and economic
investigation of the property started. A temporary camp was established and the construction of a 700 tonne
per day pilot plant was started in 1959. During 1960 and 1961 the pilot plant produced 100,000 tonnes of
concentrate for blast furnace tests.
In 1961, contracts were awarded for the construction of a processing plant and related infrastructures with a
capacity of 5.4 million tonnes of concentrate. Around the same time, harbour facilities construction began in
Pointe Noire, Sept-Iles. The plan was to ship the ore as sinter feed; however, in 1963, a decision was made
to build a 4.9 million tonne capacity pelletizing plant also in Pointe Noire. In 1965, both the Wabush and
Pointe Noire facilities were completed and inaugured in the presence of government officials. In 1967, the
pelletizing plant capacity was expanded to its actual capacity of 6.0 million tonnes. The Scully Mine was
named after Mr. V.W. Scully, former chairman of the board of Stelco Inc.

Historic Drilling
Overall, 1,005 drill holes were completed between 1969 and 2013 for a total of 77,622 meters. A more
complete description of the drill programs is described in Section 10.
Historical Production
The Scully Mine operated continuously from 1965 to February 2014 with the mining and concentrating at
Wabush and the subsequent stage of pelletizing done at Pointe Noire near Sept-Iles. Table 6.1 presents the
historical production at the Scully Mine.
The Scully Mine was first operated during the 1960’s without regard to the overall manganese content of the
concentrate produced. This continued into the 1980’s when concentrate commercial specifications required
a much lower manganese content in the final product. To achieve this lower manganese content, mine
operations moved away from a blend consisting of both Middle (low manganese) and Lower Member ores
(higher manganese) to one predominately made up of Middle Member ores. Problems achieving the required
manganese content continued despite moving to a mostly Middle Member blend until mining shifted into the
West Pit Extension during the 1990’s. Cliffs recognized that operations based solely on lower manganese
Middle Member ores would limit the life of the mine and thus started extensive investigations into finding a
processing approach that would solve this issue. This ultimately led to the manganese reduction circuit
developed by Cliffs.
One consequence of switching to a middle member blend was softer ores than historically processed at
Wabush. Once blasted, they contained mostly sand sized particles with limited amount of coarser material.
Given that the plant uses autogenous grinding, according to certain reports the decrease in the amount of
coarser material negatively impacted on the concentrator performance.
The Scully Mine was operated until February of 2014 at which time the mine was idled and all workers were
laid-off, thus placing the site under a care and maintenance program.
Historic Resource Estimate
The last historic resource for the Wabush property was published by Cliffs in 2013. At the time of this resource
estimate the decision to idle the operation had been taken and for this reason previously reported Mineral
Reserves were reclassified as mineralized material.

In their 2012 Annual Report, Cliffs stated a Measured and Indicated Mineral Resource of 200.4 Mt at 35.1%
iron based on a cut-off grade of 25% weight recovery (16.5% Fe).
Table 6.1: Historical Production (1965 – 2014)
Iron Ore mined Waste mined Final Concentrate

Year
(Mt) (Mt) Production (Mt)
2014 N/A N/A 0.300
2013 8,880 5,602 2,535
2012 10,504 5,714 3,016
2011 10,068 7,072 3,122
2010 11,733 5,043 3,776
2009 7,313 2,945 2,662
2008 12,378 8,133 4,158
2007 13,172 8,125 4,638
2006 12,916 11,628 4,209
2005 16,267 9,426 5,306
2004 11,411 4,780 3,728
2003 14,005 7,195 4,974
2002 12,726 8,555 4,482
2001 12,202 8,207 4,419
2000 17,412 10,784 5,836
1999 15,887 9,316 5,337
1998 16,947 10,403 5,689
1997 15,051 8,893 5,122
1996 16,846 8,416 5,659
1995 17,523 5,446 5,344
1994 15,489 6,300 4,835
1993 14,313 5,367 4,554
1992 13,778 4,618 4,519
1991 14,306 5,220 4,595
1990 18,914 6,895 5,702
1989 19,483 6,011 6,050
1988 19,574 5,027 5,979
1987 16,068 4,801 4,948
1986 13,911 6,566 4,582
1985 16,410 7,369 5,409
1984 16,799 7,996 5,535
1983 12,153 6,280 4,117
1982 10,014 5,258 3,224
1981 16,632 8,655 5,581
1980 16,244 9,014 5,064
1979 17,651 6,395 6,062
1978 12,611 5,582 3,676
1977 17,362 6,014 5,514

Iron Ore mined Waste mined Final Concentrate

Year
(Mt) (Mt) Production (Mt)
1976 17,399 6,258 5,523
1975 9,133 3,409 2,870
1974 17,336 5,511 5,599
1973 17,989 4,737 5,544
1972 15,251 3,211 4,384
1971 17,751 2,688 5,743
1970 16,554 2,386 5,672
1969 10,155 2,475 3,400
1968 16,080 2,961 5,200
1967 13,858 2,552 5,180
1966 10,745 1,271 3,902
1965 7,852 1,225 2,533

7 GEOLOGICAL SETTING
7.1 Regional Geology
The Scully Mine iron deposit lies at the southern end of the Labrador Trough within the geological Grenville
Province. Figure 7.1 shows the regional geological location of the Scully Mine (Conliffe et al., 2012). The
Labrador Trough extends along the margins of the eastern boundary of the Superior-Ungava craton for more
than 1,200 km and is up to 75 km wide at its central part. The Scully Mine deposit is located within the
Parautochton Deformation Belt of the Grenville Province of the Canadian Shield, just south of the Grenville
Front. The Grenville Front, the northern limit of the Grenville Province, truncates the Labrador Trough,
separating the Churchill Province greenschist metamorphic grade part of the Labrador Trough rocks from the
highly metamorphosed and folded amphibolite to granulite metamorphic grade rocks, which are their
equivalent in the Grenville.

Figure 7.1: Simplified Regional Geological Map (J. Conliffe et al., 2012)
The western half of the Labrador Trough, consisting of a thick sedimentary sequence, can be divided into
three sections based on changes in lithology and metamorphism (north, central and south). The Trough is
comprised of a sequence of Proterozoic sedimentary rocks including iron formations, volcanic rocks and
mafic intrusions known as the Kaniapiskau Supergroup. The Kaniapiskau Supergroup consists of the Knob
Lake Group in the western part of the Trough and the Doublet Group, which is primarily volcanic, in the
eastern part. The Kaniapiskau Supergroup within the Grenville is highly metamorphosed and complexly
folded and is named the Gagnon Group. It occurs as numerous isolated segments. From the base to the top,
it includes a sequence of gneisses and schists, a group of chemically precipitated sediments, and more
schists, including some distinctive aluminous varieties. Gabbro sills intrude parts of the Gagnon Group, and
granites are found in the gneiss.

The Central or Knob Lake Range section extends for 550 km south from the Koksoak River to the Grenville
Front located 30 km north of Wabush Lake. The principal iron formation unit, the Sokoman Formation, part
of the Knob Lake Group, forms a continuous stratigraphic unit that thickens and thins from sub‐basin to sub‐
basin throughout the fold belt.
The southern part of the Trough is crossed by the Grenville Front. The rocks in the Grenville Province to the
south are highly metamorphosed and complexly folded. Iron deposits in the Grenville part of the Labrador
Trough comprise Bloom Lake, Lac Jeannine, Fire Lake, Mounts Wright and Reed, and the Luce, Humphrey
and Scully deposits in the Wabush area. The high‐grade metamorphism of the Grenville Province is
responsible for recrystallization of both iron oxides and silica in primary iron formation, producing coarse‐
grained sugary quartz, magnetite, specular hematite schists (meta‐taconites) that are of improved quality for
concentrating and processing. Figure 7.2 shows the simplified geological map of the Labrador Trough.
Figure 7.2: Simplified Regional Geological Map of the Labrador Trough (from Gross, 2009)
In the region, at least two stages of deformation are recognized. The first stage produced linear belts that
trend northwest, like the well-defined structural trends in the central part of the Labrador geosyncline; the

second stage formed linear belts that trend east to northeast, parallel with the major structural trends
developed in the Grenville Province. Folds now present reflect both stages of deformation in form and
orientation. For example, in the Wabush Lake area, folds trend N20ºE and in the central part of the area,
around Lamelee Lake and Midway Lake, N35°W. Isoclinal and recumbent folds overturned to the west or
southwest are common, and it is inferred that this deformation produced thrust faults striking northwest and
dipping east. Structures developed during the earlier stage of deformation are believed to have been similar
to those now seen in the central part of the Labrador geosyncline, and it is highly probable that the structures
produced by this early stage of deformation in the south and those in the central and northern regions were
the result of the same orogeny.
The second stage of structural deformation took place during the Grenville orogeny between 0.8 and 1.2 Ga
years ago. Its effects are not so intense north of Wabush Lake near the margin of the Grenville belt as they
are throughout the region to the south. Near the margin of the Grenville belt cross-folds trending east or
northeast appear to be superimposed on the earlier northwest-trending structures. Around Mount Wright and
farther south, the trend of the overall structure is east to northeast and the prevailing dip of foliation is 55°N.
Tightly folded and faulted structures developed during the earlier stage of deformation were further deformed
by folding and faulting during the Grenville orogeny. Oblique sections through the resulting complex fold
structures are exposed at the present erosion surface. Many of the minor folds appear to plunge steeply to
the northwest, but the axes of these folded folds are not straight for any appreciable distance.
Regional structures developed during the Grenville orogeny play out against the stable craton area of the
ancient Superior Province. Folds and faults along the northwest margin of the Grenville Province trend west,
and the general pattern of folds overturned to the south or southeast formed in conjunction with north-dipping
reverse faults indicates overriding of the northerly blocks towards the southeast. The relative amount of
movement between adjacent fault blocks is suggested by the position of iron-formation in local structures.
The iron-formation and associated metasedimentary rocks, which were derived from an assemblage of
continental shelf-type sediments, do not appear to extend south beyond a line trending northeast from the
Hart-Jaune River linear to Plaine Lake and northeast to Ossokmanuan Lake. Granite-gneisses, charnockites,
and anorthosites are part of the rock assemblage south of this line. These typical deep-seated Grenville rocks
may have been thrust northwest along a system of faults that coincide with this line. The large suite of gabbro
intrusions in the area between Wabush Lake and Ossokmanuan Lake probably were intruded along faults in
this linear zone.

7.2 Local Geology
Information relating to the local geology at Scully is derived from O’Leary (1972) who explains in detail each
individual unit and their properties.
7.2.1.1 General
The Scully Mine lies within the Labrador Trough in Western Labrador. The Sokoman Formation is an iron
formation that consists of three iron bearing formations, named the Upper, Middle and Lower Iron Formations.
The Sokoman Formation is more than 300 m thick near the Scully Mine and has been subjected to two
episodes of folding and metamorphism during the Hudsonian and Greenville orogenies, resulting in a
complex structural pattern in the Wabush Area. The younger Menihek and Shabagamo Formations and the
older Denault, Attikamagen, and Wishart Formations all outcrop in the vicinity of the mine site. The mineral
deposit that defines the Scully Mine consists of folded and faulted stratigraphic beds of iron-bearing units
within the regional Sokoman Iron Formation. A local geological map and legend are presented in Figure 7.3.

Figure 7.3: Schematic Geological Map of the Scully Region Showing an

Approximate Current Pit Outline

7.2.2 Mineralisation
The ore minerals are hematite (specularite), magnetite, and martite. The waste minerals are quartz and
hydrated iron oxides such as limonite and goethite. Manganese oxides also occur in bands or are
disseminated throughout the iron-bearing units.
A stratigraphic column is presented in Figure 7.4. All units are overlain unconformably by glacial till
(overburden) and underlying the Lower Member is a silicate-rich iron formation known as the Basal Silicates
(considered the footwall waste unit). Unfolded, the average thickness of the formation is about 800 feet. Each
member is split up into separate numeric sub-members, which reflect the changes in ore characteristics
(mineralogy, hardness, manganese abundance).
The following information has been sourced from O’Leary (1972), which contains detailed descriptions of
each ore member.

Figure 7.4: Stratigraphic Column of the Sokoman Formation at Scully
7.2.2.1 Basal Silicates
Near surface, the basal silicates comprise narrow bands of quartz, limonite and goethite, with pyrolusite in
bands running parallel to the bedding. Characteristically, these have high iron assays with very low weight

recovery. Fresh samples from drill holes show a layered quartz-amphibole assemblage. Green biotite and
chlorite are also common, and garnets become more abundant near the base of the member. The footwall
contact is shown in the pit wall in Figure 7.5.
Figure 7.5: Contact between Basal Silicates (Unit 61) and the Lower Member (53) in the Pit Wall
7.2.2.2 Lower Member Ore
This is generally a hard, dense, blue quartz-hematite rock, with little or no limonite (except where fibrous
silicates along the bedding planes of the ore are altered). Generally, the ore is distinctly banded, with
segregation of hematite, magnetite and quartz. Magnetite is common, increasing toward the base of the unit.
Vugs are rare and abundant manganese oxides occur in bands and disseminated throughout the ore. Near
the base, the layers of hematite and magnetite give way to an amphibole assemblage, which near the surface
has altered to limonite. The unit is characterized by intermediate iron and iron unit recovery values. The
Lower Member contains an internal thick interbed of limonite-rich ore which presents low weight recoveries
(sub-unit 52).
Typical examples of Lower Member Ore are shown in Figure 7.6.
Figure 7.6: Core Photos of Lower Member Ore

7.2.2.3 Middle Quartzite
This is a narrow but persistent band of quartzite which runs the entire length of the orebody. Iron minerals,
including limonite and goethite, and more rarely hematite, and pyrolusite fill lenses, joints and cracks.
Because of its distinct lithology, this horizon has been widely used as a marker horizon in the structural
interpretation of the orebody.
7.2.2.4 Middle Member
This is invariably a coarse-grained, blue specularite-quartz rock. Hematite often makes up more than 50 per
cent by weight of the rock. The ore is usually soft and friable, breaking down to constituent grains on drying.
This is normally explained by intense weathering and removal of silica. Elsewhere, similar leaching of the
ores at Knob Lake (O’Leary, 1972) is demonstrated in part by the presence of depressions and crevices filled
with lacustrine clays and argillite and containing fossil plants of Cretaceous age. Evidence of leaching of this
nature on a similar scale is not found at Wabush Mine.
Figure 7.7: Pit Wall Showing the Contacts Between the Lower and Middle Member Sub-Units, and
the Middle Quartzite.
The magnetite content of the member is low, but increases rapidly toward the base. Manganese is present
as earthy pyrolusite in small vugs that vary in size from half a cm to 5 cm diameter. It also occurs disseminated
through the ore, as distinct bands and included in the hematite and magnetite grains, both as separate mineral
phases and in solution in the hematite and magnetite crystals. The ore is noticeably banded and has a sub
micaceous high lustre. Hematite and quartz are often completely segregated into bands. Massive, hard,
mixed quartz-hematite bands, with a pink hue, are also common. Hematite in this association is non-
micaceous and has a dull lustre. Hematite and quartz are cemented by a fine-grained magnetite matrix. The
nature of the contact between Middle Member ore and the Middle Quartzite varies, but there is often a layer

of limonite-rich, oxidised ore known as sub-unit 34 (Figure 7.7) which is sometimes considered waste. Typical
examples of Middle Member ore are shown in Figure 7.8.
Figure 7.8: Core Photos from Middle Member Ore
7.2.2.5 Upper Member
This lies immediately beneath the hanging-wall carbonaceous quartzite and is a quartz-goethite-limonite rock
with varying amounts of magnetite and specularite. Quartz grains are stained with limonite, giving this
member a dirty brown appearance, and bands of colloidal goethite up to 15 cm. wide are relatively common.
The Upper Member varies from a hard-fine-grained through coarse grained and friable to a soft earthy variety.
It is thought that the limonite coatings of quartz grains have been produced by weathering near surface. The
member is characterized by low iron and a poor weight recovery, making it the least attractive of the three
(3) ore members.
7.2.3 Structural Geology
The Scully Deposit can be divided into two distinct structural areas. Bounded to the east by the Wabush Lake
lies a series of northwest-trending folds. This trend continues as far west as the west end of Knoll Lake,
where the folds transition to an east-west trend.
The interpretation by O’Leary (1972) explains a series of simple folds in the east plunging gently to the
southeast and cut by an almost vertical fault zone, 75 meters wide, which is believed to be barren of ore
minerals. The area to the west is described as a succession of a synform, an antiform and a second synform
to the south. The axes plunge east in the eastern part of the fold system, and west in the western part.

The most prominent structural feature in the East Pit, geologically, and as far as mining considerations are
concerned, is a reversed fault which runs approximately in a northwest direction through the orebody
(Figure 7.9). This fault dips steeply to the east, with the basement rocks thrown up some 75 meters on the
western side. The fault is marked by a series of clay seams, varying in color from pink to a light cream. In
addition, the fault is characterized by elevated level of manganese, giving assays as high as 6 or 7 percent.
The sooty black appearance of the ore against the lighter clay provides a striking contrast and the fault can
be traced quite easily along strike as mining advances. A number of small parallel fault zones have been
traced.
Figure 7.9: Schematic Section Through East Pit Showing Reverse Fault Affecting Stratigraphy
The Scully deposit is heavily influenced by the presence of folding, which occurs along three principal axes;
F1, F2 and F3.
F1 folds with axes striking northwest are asymmetrical to overturned, with alternately steep and gently dipping
limbs. The axial planes dip steeply south. In the East Pit, the axial trend is north-northwest; east of the fault,
it is almost north-south.
F2 folds occur along axes which run east-west in the West and South Pit areas, and west-southwest in the
East Pit. In the West and South Pit, the folds are broad open syncline/anticline/syncline structures. The axial
planes dip steeply south and probably reach vertical. Folds plunge to the east in the eastern part of the area,
and west in the western part resulting in a domal setting. In the East Pit, the folds of this system plunge gently
and slightly modify the plunge of the F1 folds.
F3 folds striking north-south are only seen in the West Pit area. They alter the axes of the F1 and F2 folds so
that plunges change from an easterly to a westerly direction within a hundred feet.

8 DEPOSIT TYPES
The Scully Deposit mineralization style is a deposit typical of the Superior-Lake type of Iron Formations.
The peaks in iron sedimentation took place between ~2.65 and 2.32 Ga and again from ~1.90 to 1.85 Ga.
Their deposition is linked to geochemical and environmental evolution of Earth, the Great Oxidation Event
(GOE) at ca. 2.4 Ga, the growth of continents as well as to mantle plume activity and rapid crustal growth
(see Figure 8.1).
Figure 8.1: Time Distribution of the Iron Formation Deposition (from Bekker et al., 2010)

The Labrador Trough contains four main types of iron deposits:
• Soft iron ores formed by supergene leaching and enrichment of the weakly metamorphosed cherty
iron formation; they are composed mainly of friable fine grained secondary iron oxides (hematite,
goethite, limonite);
• Taconites, the fine‐grained, weakly metamorphosed iron formations with above average magnetite
content and which are also commonly called magnetite iron formation;
• More intensely metamorphosed, coarser‐grained iron formations, termed metataconites which contain
specular hematite and subordinate amounts of magnetite as the dominant iron minerals;
• Minor occurrences of hard high‐grade hematite ore occur southeast of Schefferville.
Secondary enrichment included the addition of secondary iron and manganese which appear to have moved
in solution and filled pore spaces with limonite‐goethite. Secondary manganese minerals, i.e., pyrolusite and
manganite, form veinlets and vuggy pockets. The types of iron ores developed in the deposits are directly
related to the original mineral facies. The predominant blue granular ore was formed from the oxide facies of
the middle iron formation. The yellowish‐brown ore, composed of limonite‐goethite, formed from the
carbonate‐silicate facies, and the red painty hematite ore originated from mixed facies in the argillaceous
slaty members.
All iron ore deposits in the Labrador Trough formed as chemical sediments on a continental margin which
were lithified and variably affected by alteration and metamorphism that had important effects upon grade,
mineralogy and grain size. Faulting and folding led to repetition of sequences in many areas, increases the
surface extent and mineable thicknesses of the iron ore deposits. Underlying rocks are mostly quartzite or
mica schist. Transition from these rocks and the mineralized iron formation may take place over up to 10
meters vertically. All rock sequences have been heavily metamorphosed by intense folding phases that are
part of the Grenville Orogen.
Iron formation sequences range commonly from 25% to 40% iron oxide, mainly hematite of the specularite
type with minor amount of magnetite (remainder mostly quartz) and can have true thicknesses (ignoring minor
intercalated bands of schist and quartz rock) of up to 200 m. It is these sequences that are of economic
importance.
For iron formation to be mined economically, the iron content must generally be greater than 30%, but also
iron oxides must be amenable to concentration (beneficiation) and the concentrates produced must
concentrate specifications (with minimal deleterious elements such as silica, aluminum, phosphorus, sulphur
and alkalis). Iron formations repeated by regional folding produce favourable strip ratios due to repeated
synclines, and this structural setting is typical of the Wabush area.

9 EXPLORATION
Only limited information exists regarding non-drilling exploration activities at the Scully Mine. No data relating
to geological mapping, surface sampling or other non-drilling prospecting activities was found by GMS in the
data provided. This is perhaps due to the outcropping nature of the orebody and the early onset of mining
which negated the need for early stage prospecting activities.
Numerous magnetic and gravity surveys have been conducted at Scully, including a historic magnetic survey
from the 1960’s and two recent surveys over the Boot Pit area. Details of these surveys are presented below.
Gravity Surveys
In November 2006, a gravity survey was carried out within the mining lease, west of the Wabush townsite.
The purpose of this survey was to detect potential economic iron ore bodies around the pits. The survey was
undertaken by Geosig Inc. Five hundred and forty-nine (549) gravity stations were taken along with
coordinates and altitude measurements. The survey focused on the Boot Pit area, south and north of West
Pit Ext North, West Pit, South Pit and east of South Pit. The survey revealed several anomalies suggesting
the presence of buried masses of iron beneath shallow cover sediments. Bouguer anomalies and the first
vertical derivative are shown in Figure 9.1.
Magnetic Surveys
A historical magnetic survey was undertaken on the Boot Pit in the 1960’s (actual year unknown). No further
information is available for this survey, and the data is only available as a scanned hard-copy.
In October 2010, a detailed ground magnetometer survey was undertaken between mine grid sections 5000E
and 7500E (in feet). The purpose of the survey was to provide detail for structural interpretation on Boot area.
The survey was undertaken with a line spacing of between 100 and 150 feet, using a CDGPS walk-mag
setup. A drilling campaign was undertaken on the Boot area in 2011 to follow up on these anomalies to better
understand the geology. Figure 9.2 presents the data from this survey.

Figure 9.1: Bouguer (top) and First Vertical Derivative (bottom) images of the gravity
survey over Scully Deposit

Figure 9.2: Total Magnetic Intensity (left) and First Vertical Derivative (right) images from the 2010 ground magnetometer survey
(shown in UTM coordinates)

10 DRILLING
All data relating to drilling undertaken at the Scully Deposit are in the Scully Mine Grid coordinates system
(feet). GMS received drilling information in PDF format classified by year and drill hole. Data is reasonably
complete from 1969 onwards, however a large proportion of the drilling in the drilling database pertains to an
unknown period, referred to as “historical drilling” in this Section 10.
Available information includes general notes, laboratory results and logs. Drilling information was recorded
manually until 1986, included the laboratory results. From 1986 onwards, data was recorded digitally in
Microsoft Excel™ format, and is generally more complete. From 2005 onwards, some drilling reports are
available which summarise the drilling methods, core photos, and other supporting data.
Previous Drilling
Information pertaining to the 1969-2013 drilling programs are presented below. A total of 1,005 drill holes
were performed on the property for a total of 77,622 meters. Subsequent to the production of the block model,
GMS found 6 drill holes from 2013 (WPX13 prefix) which were not included in the drill hole database provided.
These drill holes were not included in the resource estimate.
Pre-1969 drilling
Out of the 1,005 drill holes present in the database, 507 holes do not include proper identification to retrace
the year they were drilled.
GMS believes that these drill holes were drilled in the early stages of the mine development. From 1969, drill
holes began to be prefixed with the year of drilling and continued using that nomenclature until the mid 2000’s.
These holes appear to be early drilling defining the initial, near surface resources at Scully. According to
these drill hole ID’s, they were likely drilled during different phases. Initially, in the West Pit South, South Pit
and the East Pit, the drill hole sequence shows a systematic drilling spacing of 150 meters which covers the
pits. An additional infill drill hole sequence shows a drilling spacing of 75 meters, which allowed for a better
definition of the ore body.
Drilling programs 1969-2005
Most of the post-1969 drilling was undertaken to develop the resources of the East Pit, South Pit and the
West Pit South, which is shown in Figure 10.1, Figure 10.2 and Figure 10.3. The topography shown was
surveyed in September 2017. Numerous drilling contractors were used: Longyear, Dominik Drilling, I.R

Drillmaster, Forage Mercier, Lantech, Major Ideal and Logan. The majority of drilling was undertaken using
NQ size drill rods.
A summary of drilling by year is presented in Table 10.1, which was constructed using the original drill logs
provided in the data pack.

Table 10.1: Drilling Summary

Number Total meters
Year of drill Hole prefix(s) (converted Type of drilling Comments
holes from feet)
1969 15 69- 1,687 Diamond drilling Canadian Longyear Limited - Mostly East Pit
1970 14 70- 1,015 Diamond drilling East pit and South Pit
1971 24 71- 3,059 Diamond drilling I.R. Drillmaster - West Pit South and South Pit development
1972 8 72- 358 Diamond drilling I.R. Drillmaster - Mostly East Pit along trend
I.R. Drillmaster, Inspiration - South Pit development, East Pit and

1973 41 73- 3,392 Diamond drilling
East Pit East
1974 47 74- 1,785 Diamond drilling I.R. Drillmaster - Mainly West Pit South, South Pit and East Pit
I.R. Drillmaster, Dominik - West Pit South, South Pit and East Pit
1976 50 76- 3,918 Diamond drilling
development and definition
1982 14 82- 894 Diamond drilling I.R. Drillmaster - West Pit Ext. North
1983 20 83- 1,184 Diamond drilling East Pit development
1991 41 91- 4,453 Diamond drilling Longyear - West Pit Ext. North, Boot area and East Pit East
1994 24 94- 2,270 Diamond drilling Dominik Drilling - South Pit, East Pit and West Pit Ext. North
1996 14 96- 2,427 Diamond drilling Dominik Drilling - South Pit

Number Total meters

Year of drill Hole prefix(s) (converted Type of drilling Comments
holes from feet)
1997 20 97- 3,334 Diamond drilling Forage Mercier - South Pit exploration for south extension
1998 45 98- 3,211 Diamond drilling Lantech - South Exploration of West Pit South
2001 7 2001- 1,070 Diamond drilling Major Ideal - Exploration for extension of West Pit Ext. North
2004 27 2004- 2,798 Diamond drilling Logan - Development & definition of East Pit East
WP05,WX05,
Forage Mercier - Boot area, West Pit South, East Pit for development
2005 33 EW05,EE05, 3,060 Diamond drilling
& definition
SW05, HL05
WX08,SP08, BT08,
2008 22 1,510 Diamond drilling Lantech - All Pits and Boot area for ore hardness research
EPE08, EPW08
Lantech - Boot area and West Pit South for Exploration, ore control
2010 13 BT10, WP10 1,768 Diamond drilling
and modeling purposes
2011 23 BT11, WP11 2,208 Diamond drilling Lantech - Exploration, ore control and modeling purposes
WPX12,SP12,
2012 13 1,758 Diamond drilling Orbit Lantech - Boot area, South Pit and East Pit East
BT12, EPE12
2013 6 WPX13 585 Diamond drilling Logan
Unknown 490 29,878 Unknown Unknown
Total 1,005 77,622

Figure 10.1: East Pit and East Pit East Historical Drilling

Figure 10.2: South Pit Historical Drilling 1969-2005

Figure 10.3: West Pit and Boot Area Historical Drilling 1969-2005

Drilling Programs Around the Boot Area
A total of 48 holes covering 6,089 meters were drilled on the Boot area, an unmined syncline of the middle
and lower members. Figure 10.4 shows the location of these drill holes. Drilling of the Boot Pit is relatively
recent (compared to other areas), with the majority of drilling undertaken in the 2000’s.
Drilling Program 2008 – Geotechnical Program
The 2008 diamond drill program goals were to provide samples for an ore hardness research project
conducted by Corem Consulting. Due to budget limitations, the Corem research project was stopped in early
2009. After a request to continue the ore hardness project internally, work on the 2008 drill core was
completed by CTG geologists in 2009.
CTG carried out the logging and sampling of the 22 diamond drill holes totalling 1,510 m for standard assaying
by the Scully lab. New initiatives were developed to replace the Corem ore hardness research and facilitate
the design of a new ore competence index at Scully.
Drilling Program 2010 and 2011
21 drill holes totalling 3,306 m were drilled for exploration and/or control and modelling purposes in the West
Pit and Boot areas of Scully Mine. The goals were to obtain closer spaced and deeper diamond drill
information in the West Pit and to aid in structural modelling in Boot area. The West Pit holes encountered
Lower Member ores, while the Boot holes encountered Middle and Lower Member ores and basement
lithologies. Drilling was contracted to Lantech and Orbit Lantech Drilling.

Figure 10.4: Drilling Programs on Boot Area 1991, 2004, 2005, 2010, 2011 and 2012

Drill Hole Locations
GMS was unable to find references or procedures regarding how drill hole collars were surveyed. Pre-1991
drill collars appear to have been rounded to match the drill lines (250 feet spacing), therefore the precision of
these drill collar locations is considered poor. GMS found evidence of significant rounding of XY collar
coordinates in the database. A hand-written survey sheet containing high-precision coordinates was found
from 2004; however, they were found to be rounded to the nearest drill section in the database.
The more recent drilling in the database shows better precision, with drill collar survey precision to the nearest
foot (0.3 m) and often to decimal precision.
Although varying levels of imprecision may be present for the historical drill holes in the database, the newer
drill hole collars show sufficient precision for this style of deposit.
Downhole Surveys
Minimal information regarding down hole surveys is available in the data package provided to GMS. Several
survey sheets referring to acid tests were located for 2004 drill holes. In addition, drilling reports (Jongewaar,
2010) mention that a flex-it tool was used to record drill hole dips, however the azimuths were rejected due
to magnetite interference. Downhole geophysical surveying was undertaken in 2011 by DGI Geosciences
(Jongewaar, 2011) in the surrounds of the Boot Pit, but this focused on televiewer data rather than downhole
survey information.
Core Shack
From the initial days of exploration drilling (late 50’s) until the mid-1980’s, the drill core and various samples
were stored in the Hay Lake core shack. Having fallen into a state of disrepair, the core generated from the
1990’s drilling campaign was moved the South Pit powder magazine. In 2005, the powder magazine building
was deemed unsafe. Upon the completion of the drilling program in late 2008, no practical storage area
existed for drill core. The core was subsequently stored inside the classifier building. In the winter of 2009,
samples and drill core were disrupted by warehouse personnel. This resulted in the destruction of some of
the sample materials before they could be analysed. As of 2017, the core samples on site seem to be
scattered into various areas (pers. comm. Réjean Sirois, VP, Geology and Resources, GMS).

Core Logging
The core was logged using standard verified methods. Rock types were identified, and intervals were
measured. Geological logging took into account the general colour of the rock, the relative percentage of
constituents, the grain size distribution, the alteration, the contact with other rocks, the texture and the
variation of these elements, when significant. Geotechnical features in the core, such as core recovery, rock
quality designation (RQD), fractures and joints, foliation, granulometry, friability, rock strength, and
weathering, were also described in the logs. The mineralized units to be sampled were identified depending
on the mineral content and considered geological contacts. They were also named using a specific
nomenclature relating to the stratigraphic column.
Core logging and Sampling is discussed further in Section 11

11 SAMPLING, PREPARATION, ANALYSES AND SECURITY
The information contained within this section was sourced from a series of standard operating procedures
provided to GMS by representatives of Tacora. The procedures outline best practises for the logging,
sampling and analysis of both exploration and blasthole drill holes, all of which was all conducted exclusively
on the Scully Mine Site. Procedures were generally put in place between 2002 and 2007, and there is little
information available regarding sampling, preparation and analysis before this time.
Core Logging
Core logging was determined to be the responsibility of the mine geologist at Scully, and is outlined in the
procedure 0092002 Diamond Drill-Core Logging (Revised12.01.09).doc. The procedure was updated in April
2009 to reflect the change from the original data management system “medsystem” to the more centralised
database within the Maptek Vulcan software environment. In addition, a procedure exists for logging
blastholes (0092003 Blast Holes Logging (Revised11.25.09).doc), which explains the techniques for logging
drill cuttings.
Exploration Drill Core Logging
Proposed drilling was initially classified into one of five (5) categories; new deposit, delineation, in-fill,
structural and grade information. Once the drilling purpose was determined, factors such as recovery,
overburden depth, angle of drilling were considered when selecting drill core diameter, and a cost estimate
was presented. Three (3) to four (4) contractors were invited to submit bids, with the final selection based on
factors such as cost, experience and availability. Drill hole sites were surveyed and cleared, core shack and
drilling supplies were made available and the laboratory was notified.
Upon arrival of contractors, safety procedures were conveyed to drilling contractors, and drilling was
conducted using best practises to meet the requirements of Scully Mine. The majority of drill core at Wabush
is of NQ diameter (4.8 cm).
Core was logged using a logging sheet in Microsoft Excel (example shown in Table 11.1), giving a full
description of core recovery, structure, oxide distribution, grain size, friability, degree of oxidation, clay bands,
brecciation, folding and faulting. Drill core was then divided into composites for sampling. Composite lengths
were determined by geological contacts, grade variations, oxidation or simply by reducing thick zones into
smaller more manageable composites. The procedure emphasises that composites should be greater than
15 feet (4.6 m) and less than 30 feet (9.1 m). An example of drill core is shown inFigure 11.1.

Composites were bagged and tagged twice (one tag inside the bag, one tag on the outside) showing
drill hole ID and the downhole interval. Supporting information was forwarded to the laboratory in the form of
a sampling sheet (example shown in Table 11.2). The procedure emphasises that composites are to be
analysed for five (5) elements; Fe %, Magnetite % (Satmagan), Mn %, SiO2 % and WTREC % (weight
recovery).
Core logging and sampling intervals were transferred into the Maptek Vulcan database and the original
spreadsheet was saved onto the computer network. A hard copy of each diamond drill log was stored in the
geologist’s office.
Figure 11.1: Example of Drill Core Prepared for Logging

Table 11.1: Example of Drill Logging Sheet for Exploration Drilling

Table 11.2: Sampling Sheet Written by Geologist, and Filled by Laboratory Staff

Blasthole Logging and Sampling
The procedure for logging and sampling blastholes follows as illustrated in Figure 11.2.
During the drilling phase the rotary drill operator/blasters samples the drill cuttings of each blast hole using a
three (3) foot long plastic pipe with a three (3) inch inside diameter. The sample pipe is inserted vertically into
the drill cuttings at the highest part of the cone (about 6-8” from the drill hole) and forced downward with a
hammer until it reaches the bottom of the cone. The pipe is than dug out and tipped horizontally to keep the
cuttings from falling out and emptied into a sample bag, which is tagged and numbered with the grid blast
hole numbering system; one tag goes inside the bag and another is attached outside. The sample is
approximately 5-8 lbs in weight.
Figure 11.2: Schematic of Blasthole Sampling Methodology
According to the procedure, blasthole logging is the responsibility of the Chief Mining Engineer, however it is
unclear who is charged with the actual logging (likely the drilling operators).

From the vertical channel cut from the blast hole cone, information was gathered and recorded in a field
notebook by drill number and material logged relating to the position of the vertical channel (i.e. top, middle,
bottom) or the percentage of the vertical channel. A rough visual estimate was made relating to crude Fe %,
Mn % and other properties, and was recorded as the following values; Low, Average or High. Samples were
gathered as previously discussed, and sent to the laboratory. Logging information was plotted up, and
checked off against the survey record sheet to ensure all blastholes had been recorded (Figure 11.3).
Laboratory analyses were compared with the visual estimates (when analyses become available). Any large
discrepancies relating to weight recovery between the visual estimates and laboratory results were followed
up and samples were re-analysed as required.
Shovel maps were produced, and data was uploaded to the computer network. Ore, overburden and member
contacts were marked on the shovel maps, in addition to faults and Mn-rich and magnetite-rich zones.
Figure 11.3: Example of Blasthole Sheets Used for Logging

Core Sampling, Security and Chain-of-Custody
All drilling, core sampling, sample preparation and analyses were undertaken at the Scully Mine site since
the mine started operating. Drill core logging, sample selection and compositing were undertaken under the
supervision of the Mine Geologist, with the laboratory technicians responsible for the sample preparation and
subsequent analyses. Blasthole sample collection and logging were the responsibility of the chief mining
engineer and the drilling operators. All sample materials were kept on the Scully Mine site during the sampling
and analysis process. In 2008, an ore characterisation research project was initiated, and samples were
prepared from three drill holes to be sent to COREM Consulting in Quebec City. However, due to budget
constraints, this project was curtailed before any samples were sent off-site.
GMS could not find any information relating to drill core or samples that were sent off-site to umpire
laboratories, therefore the chain-of-custody remained confined to the Scully Mine site at all times.
Sampling Summary
The procedures outlining sample collection and preparation are considered sufficient for the style and scale
of deposit mined at Scully. GMS believes that the data collected since the procedures were employed (2002)
is of sufficient quality and quantity to have confidence in its application during resource estimation.
GMS notes that no sampling procedures are available pre-2002, therefore GMS has lower confidence in the
data. As sampling and logging data was not available in a centralised database (detailed logging, core
recoveries, etc.) GMS could not further assess the impact in a spatial context, and thus was not further
considered.
Analytical Laboratories
Since operations began at Scully, all sample analysis has been undertaken using the laboratory located on
site. The laboratory consists of shaker tables (Wilfley tables), XRF analysers (Philips) and Satmagan
analysers, operated by various employees of Cliffs Natural Resources.
GMS is not aware of any other laboratories that analysed samples from Scully, and has not found any
evidence of umpire assaying or check assays. In addition, GMS did not find evidence that the Scully
laboratory was certified or audited externally.

Sample Preparation and Analytical Procedures
Core sample preparation is described for exploration samples in procedure 0103039 Exploration Sample
Preparation.doc, which states that laboratory attendants are responsible for the collection preparation and
analysis of samples in accordance with the sampling intervals provided by the mine geologist. In addition,
procedure 0103029 Blasthole sampling.doc is available, outlining the steps followed during blast hole
sampling. The procedure states that drilling operators or blasters are deemed responsible for the collection
of samples from blast holes, and delivering them to the laboratory. The section manager – mine operations
provide oversight of this process, ensuring that the procedure is followed correctly.
Samples were transferred from the bags (or buckets) into pans, along with the tags which were found on the
outside and inside of the sample bags. Samples were dried in the oven overnight. After drying, each sample
was crushed in a jaw crusher and then a roll crusher and screened through a 20-mesh screen. Any material
+ 20-mesh was fed through the roll crusher again until 100% of material passes through. The material was
rolled thoroughly on the rolling mat to homogenise the sample before splitting. Splitting was undertaken using
a riffle splitter to produce a 50 g head sample, a 2000 g shaker table sample and finally 3000 g is retained
for storage. If the sample was greater than two (2) bags in size, then each bag was treated separately and
only ½ of the riffled material was retained from each bag, re-homogenised on the rolling table and a final re-
split was undertaken to obtain the desired portions for analysis.
Analysis
As mentioned in Section 11.5, the laboratory produced two sample splits (50 g and 2000 g) which followed
two (2) different sample streams resulting in three final sets of analyses; Crude (head) grades, Concentrate
grades and Tails grades. XRF sample preparation, fused bead creation and subsequent analysis was
described within the file John Libal – Xrf procedure.docx, which outlines the entire process.
Crude Grades
The 50 g sample (already crushed to -20 mesh during sample preparation) was pulverised and a sub-sample
of 25 g was taken, processed in a scatter box and passed through 200 mesh. Material not passing 200 mesh
was re-sent to a scatter box and processed again through 200 mesh until all the sample passes. This 25 g
subsample is then transferred into a manila packet and labelled accordingly with a shift and sample matrix
type.
Reagents were prepared (10% Citric acid solution and Lithium nitrate solution), and fused beads were created
using a 10:1 ratio of flux (50% Lithium Tetra Borate, 50% Lithium Meta Borate) to pulverised sample. 0.8 g

of pulverised sample was mixed with 8 g of flux. The mix was then placed in a platinum crucible with 1 ml of
reagent (Lithium nitrate), and fused using a Phoenix machine. The resulting bead was then removed, and
the sample ID was written on top. Apparatus was subsequently cleaned using citric acid and sonic baths.
Sample beads are sent to the XRF operator. The XRF machine was calibrated daily using certified laboratory
standards, where 20 standards were analysed to ensure accuracy is maintained. If standards did not meet
the calibration verification criteria, the laboratory supervisor was notified. A Philips PW2400 was used to
analyse sample beads.
Weight Recovery and Concentrate Grades
The following information is found within a procedure called Preparation of the Mine Sample – Document No
0103036 (shaker table test.pdf), which contains the operational settings of the Wilfley tables used to produce
concentrate and tailings.
Concentrate analysis was undertaken using a Wilfley table (shaker table). 2000 g samples are presented to
the Wilfley table as a size of -20 mesh (<0.8 mm) at a uniform rate through the vibrating feeder. Water is fed
at a regulated pressure of 62 gauge. The slope of the table was usually run at the steepest slope, and
remained constant throughout the test. Concentrate and tailings were collected in separate collection pans,
and were carefully decanted at the end of the process to avoid any loss of material. The two (2) resulting
samples are filtered, dried in the oven and weighed. Weights are recorded, and the percent weight recovery
is calculated based on the two sample weights as shown by the equation below:

100

The concentrate and tailings are then rifled individually down to 50 g, and sent to the XRF sample stream for
analysis (as described in Section 11.6).
Specific Gravity Measurements
No specific gravity measurements from the Scully Mine were available. Specific gravity was not routinely
measured as part of exploration sampling, assumedly due to an emphasis on concentrate weight recoveries
and grades (the final product).

Quality Assurance and Quality Control Procedures
There is little mention of regular quality assurance/quality control (“QAQC”) procedures within the data
package supplied to GMS. Apart from the certified standards used during the calibration of the XRF
equipment, no evidence of blanks, certified standards or field duplicates into the sample stream have been
observed. Since operations commenced in 1964, it appears the Scully laboratory did not adopt typical
laboratory standardisation, and no consistent QAQC protocols were implemented during the life of the mine.
Typical QAQC protocols would include the regular insertion of blank material, externally certified reference
material (“CRMs”), and field duplicates collected from drill core, and is essential to maintain the integrity of
the assaying process. Without a strong QAQC protocol, inconsistencies or bad-practises during the sampling
process cannot be detected, and will remain inherent in the data.
GMS embarked on an independent re-assaying program to confirm the validity of the assay database, which
is discussed in detail in Section 12.
Although little QAQC data exists, GMS is encouraged that comprehensive sampling and analysis procedures
were put in place from 2002 onwards, and that the mine has been operational for many decades without
significant issues with grade reconciliation.
Conclusions
GMS considers the previously described sampling and analysis procedures as acceptable for use in resource
estimation considering the style of mineralisation and the size of the Scully deposit. However, there are
numerous outstanding issues that need to be addressed to improve the performance of the laboratory and
reduce the potential for significant errors. These are discussed in Section 26 as recommendations.
In summary, the laboratory at the Scully Mine requires significant improvements to ensure that future
production is guided by robust data, and that contaminant levels (Mn %, magnetite %) can be accurately
analysed for mine planning purposes.

12 DATA VERIFICATION
Introduction
Due to the lack of sampling and assaying QAQC protocol in the past at Scully, GMS undertook a
comprehensive check-assay and data verification program to validate the diamond drilling database to
determine if it is suitable for resource estimation purposes. A separate report containing more details on the
re-sampling program is presenting in the Appendix, and the information presented below represents a
summary of the re-sampling program.
Outline of Re-Sampling Program and Sample Selection
A list of samples from the available core boxes and coarse rejects was prepared by GMS. The selection of
samples was undertaken randomly within the foreseen future mining pit design. A total of 3,369 samples
were found to be located within the future mining areas.
GMS believes that a selection of between 165 and 200 samples (representing between 5 and 6% of all data)
will be sufficient to perform the comparison between historical assay grades within the current drilling
database, and the re-assays derived from core boxes and coarse reject bags. Blanks, Standards and
Duplicates were inserted within the samples flow to adhere to a valid QAQC protocol (around 40 QAQC
samples were inserted).
The re-sampling process took place at site between August 17th and August 29th, 2017. GMS
Qualified Person (QP) was present at site between August 17th and 18th to supervise the process. A written
procedure was prepared by GMS to ensure that the process was well documented and followed the NI 43-101
guidelines. A total of 167 samples were collected (105 core samples and 62 coarse rejects), and
44 QAQC samples (12 duplicates, 17 CRMs and 15 blanks) were inserted in the sample flow. A total of
10 core samples were collected to assess the bulk density of the various rock-types.
Mr. Anthony Cranford from Tacora was named as responsible for the 2017 re-sampling program and he was
assisted by two workers (Figure 12.1 and Figure 12.2).

Figure 12.1: Re-Sampling Program 2017 (Scully Mine) - Collecting Drill Core for Sampling
Figure 12.2: Re-Sampling Program 2017 (Scully Mine) – Collecting Coarse Rejects for Sampling

The independent assay laboratory selected by Tacora was SGS Canada, Lakefield, Ontario and the project
coordinator was Mr. Tom Watt from SGS. The final assay results were received on the October 11th and 12th
of 2017. GMS received the assay results in PDF and CSV format.
GMS reviewed the assay results and have prepared the following comparisons between the assay results
contained within the Scully database and the SGS re-analysis results. The location of the samples is
presented in Figure 12.3. Most of the selected samples are located inside the Boot Pit, where more recent
drilling was conducted and drill core is in relatively good condition.
Figure 12.3: Re-Sampling Program 2017 (Scully Mine) – Location of The Samples
Comparison Between Scully Database and SGS Assay Results – Crude Fe%
The comparison between the assay results for Crude Fe % is presented in Figure 12.4 and Figure 12.5. GMS
observes that although the correlation is good (R2 of 0.41), the general trend shows that on average the SGS
Fe % results are around 7% lower (2% lower in grade value) than the Scully database. GMS does not believe
that this difference is critical, since the Scully Mine is a past producer. However, the reader should be aware
that the Fe % grade of the Scully drilling database is likely slightly over-estimated compared the SGS re-
analyzes. SGS is a certified laboratory, and the Scully laboratory was not certified to the knowledge of GMS.

Figure 12.4: Correlation for Fe % Between the Scully Database (X-Axis) and The SGS Reanalyses (Y-
Axis) – All Data
Figure 12.5: Correlation for Fe % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-
Axis) – Close-Up of Data Between 20% and 50% Fe

Comparison Between Scully Database and SGS Assay Results – Crude Mn %
The comparison between the assay results for Crude Mn % is presented in Figure 12.6 and Figure 12.7. The
correlation between the assay results is good at an R2 of 0.69. At higher Mn grades, the SGS results are
generally lower than the Scully database, however this could be influenced strongly by outliers.
Figure 12.6: Correlation for Mn % Between the Scully Database (X-Axis) and the SGS Reanalyses (Y-
Axis) – All Data

Figure 12.7: Correlation for Mn % Between the Scully Database (X-Axis) and The SGS Reanalyses
(Y-Axis) – Close-Up of Data Between 0% And 8% Mn
Comparison Between Scully Database and SGS Assay Results – Crude Magnetite %
The comparison between the assay results for Crude Magnetite % is presented in Figure 12.8 and
Figure 12.9. The correlation between the assay results is good at an R2 of 0.65. At higher Magnetite % grades
in the SGS results, we observe lower Magnetite % assays in the Scully database.

Figure 12.8: Correlation for Magnetite % Between the Scully Database (X-Axis) and the SGS
Reanalyses (Y-Axis) – All Data
Figure 12.9: Correlation for Magnetite % Between the Scully Database (X-Axis) and the SGS
Reanalyses (Y-Axis) – Close-Up of Data Between 0% And 4% Magnetite

Quality Assurance and Quality Control
In addition to check assays comparing the Scully laboratory to the certified SGS laboratory, GMS inserted
regular blanks, CRMs and duplicates to assess the performance of the SGS laboratory during the re-assay
campaign. Only results for crude Fe % are shown in this report, however all results can be reviewed in the
Appendix.
The results showed no areas of concern, as they all fall within acceptable limits for QAQC purposes. The
results of Certified Reference Material (CRM) 463 are presented in Figure 12.10 for Crude Fe %. All results
are within +/- 3 SD, and no failures were observed. Figure 12.11 shows no issues with the blanks that were
inserted within the flow of samples, as all of them are at the detection limit of the analysing instrument. The
duplicates all performed well, and an example is shown in Figure 12.12.
Figure 12.10: Assay Results for CRM 463 – Crude Fe %

Figure 12.11: Assay Results for Inserted Blanks – Crude %
Figure 12.12: Assay Results for Duplicates Submitted to SGS – Crude Fe %
Bulk Density
The results of the ten (10) samples measured for bulk density is presented in Table 12.1. Bulk density was
measured using the Archimedes method (a water displacement method where the sample is weighted in air,
and then weight in water). Bulk density is calculated as the mass of the sample in air divided by the volume

(difference between the mass in air and water). The bulk density measurements show that there is a
correlation between crude Fe % and density (R2 of 0.35) when ignoring a single outlier.
Table 12.1: Bulk Density Measurements on Drill Core from the Middle and Lower Members
HOLE-ID FROM TO LENGTH ROCKTYPE FE MN MAG NEW SAMPLE_NUMBER DENSITY
BT12-01 169 177 8 33 35.30 0.01 0.27 4426 2.55
BT11-03 110.0 120.0 10.0 53 29.09 5.78 1.01 4270 2.88
BT11-04 560 573 13 51 36.07 3.60 2.77 4355 2.97
BT11-03 41 50 9 52 34.30 1.69 1.89 4424 2.97
BT11-01 320 326 6 51 29.24 3.71 0.61 4357 3.00
BT11-05 340.0 350.0 10.0 52 28.85 0.21 0.81 4276 3.18
BT12-01 376.0 386.0 10.0 34 43.00 0.39 4.12 4292 3.21
BT11-05 630 639 9 53 38.41 2.40 2.30 4353 3.25
BT11-05 330 340 10 52 35.76 0.14 1.49 4346 3.41
BT11-01 360.0 370.0 10.0 34 40.79 0.42 2.70 4252 3.48
Recommendations
GMS outlines its recommendations relating to the re-assaying program below:
• The correlation between the Scully drilling database and the SGS assay results for Fe % is
acceptable, however the trend appears to show that the Scully drilling database slightly over-
represents (over estimates) Crude Fe %. GMS does not consider this critical, due the operating history
and emphasis on concentrate grades. However, the reader should be aware of this conclusion;
• Blanks, duplicates and CRM results were returned in line with expectations;
• No bulk density database exists for the Scully Mine. The collection of ten (10) samples during the re-
sampling program shows that the values are acceptable for an iron deposit of this style, however
10 measurements is considered limited and not conclusive. GMS recommends that bulk density
sampling should be done systematically every 20 metres downhole on all new drilling, to capture the
variability between rock types. A piece of core of around 10 cm in length should suffice for the testing
using the water displacement method. Core should be waxed prior to testing if porosity is a concern.
Conclusion
GMS believes that the 2017 re-assaying program was completed according to Best Practices for Mining
Companies, and conforms to NI 43-101 guidelines.

13 MINERAL PROCESSING AND METALLURGICAL TESTING
Introduction
The Wabush plant was in operation from 1965 to 2014. Over the years, many metallurgical testwork
programs and other mineralogical studies were carried out to ensure a continuous and stable operation.
Twice the plant produced more than 6 million tonnes of concentrate per year. Removing the pellet plant in
Sept Isle as part of the supply chain with the plan of selling concentrate to the seaborne market will remove
any constraints that historically came from pellet production. Without those constraints of pellet production
the equipment capacities at the Scully Mine support concentrate production in excess of 6 million tonnes per
year.
Figure 13.1: Wabush Historical Concentrate Production
Based on this historical information and the modifications made before start-up, it is possible to produce more
than 6 million tonnes of concentrate with this plant.

• For a mature plant such as the Wabush plant, no major modifications of the process are needed
before restarting the operations. In order to increase performance and availability of the plant, the
following modifications are required to be made before resuming operations:
• New hydraulic rock hammers will be installed at the primary crushers to reduce down-time when
frozen material plugs the operation.
• A new belt magnet for removing tramp metal will be installed on conveyor 1B.
• The #6 autogenous grinding mill will have its drive replaced like the five others grinding mills.
• Material transfer into the mill causes plugging from the actual feed chute design. Unplugging requires
water addition in the chute, thus bringing the solid content into the mill as low as 40%. This results in
a lowermilling efficiency, disrupted size distribution, and a poor control of the % of solids fed to the
spirals where slurry density impacts recovery. A new feed chute design will be implemented to prevent
material plugging on 5 of the 6 mill lines similar to the successful design previously implemented to
mill line #4.
• Replacement of the mill oversize return pumps to a more reliable and properly sized pump will be
completed to allow oversize material to be recirculated to the mill feed chutes.
• The replacement of the existing High-Tension Separators with six (6) lines of magnetic separators
(Manganese reduction lines) will be completed prior to plant restart. Two of these six lines were
completed prior to the plant being closed. The installation of the final four lines will be completed as
replicas of the first two. As a part of the replacement of this equipment new electrical gear will be
installed within the existing building footprint to upgrade the power supply to the new equipment.
These modifications were identified as being critical following the examination of the various studies that were
performed during the previous operation of the mine, in particular, BBA’s asset integrity assessment (2012).
Other modifications could be required as the plant is put in operation and its performance monitored. It is
critical that this monitoring is done thoroughly and that corrective actions are taken rapidly. Considering the
above modifications and the maintenance practices and work organization to be implemented (see section
24.2), a target plant availability was calculated at 92% based on Tacora’s management team operating
experience. These assumptions were considered for this study as Tacora’s operation and maintenance
practices will be implemented for the Wabush mine. Modern similar plants are designed at 92% availability
(industry benchmark). Based on those same benchmarks, plants can operate at 95% when operated with the
best practices, while third world country plants operate at around 90% availability. Under the condition of
maintaining best operating and maintenance practices, it is then considered realistic to achieve the target
value of 92%. For the first two years of operation, the target is set at 89% to allow for ramp up and
modifications and improvements that will be required as the plant resume operations.

Feed material
All units in the mining plan showed in the Table 13.1 are the same as the ones mined during the previous
operations, excluding the boot. Some resampling and chemical testing were coordinated by GMS and
confirmed that there are no differences with previous results as outlined in chapter 12. No new metallurgical
testing is anticipated or needed before the start up because of the historical nature of the plant operations.
Based on the reserves that are available and the previous grind data tested at Corem (see report T-787, T-
919 and T-1298), it is important to limit the quantity of ore from south pit and sub unit 52 in any given year
(magnetite content and the higher grind ability characteristics (A*b<200)) to maintain good throughputs.
According to the data reported by GMS for mineable material, there is a fair amount of this material as seen
in Table 13.1. To meet the grinding throughput requirement of 358 tph as per the process worksheet
parameters were set to limit the ore from south pit and sub unit 52 to less than 30% in any given blend.
Specifically sub unit SP52 needs to be limited to less than 15% and not to be blended with any other sub
unit 52 from other pits. Because of the magnetite content and the higher grind ability characteristics (A*b<200)
the unit 52 need to be limited in the blend. The south pit sub unit SP51 is also set to be limited at 30%. These
limits have been accommodated for in the mine schedule as seen in Section 16.

Table 13.1: Pit Sub-Unit in The Mining Plant

COREM report no. T1298 released in 2012, made the characterization of core samples and was used as a
resource to determine the limits set forth. Table 13.2 below is extracted from this report and shows the
JKSimMet simulation result for the major unit in the feed process plant.
Table 13.2: Pit Sub-Unit JkSimMet Simulation Result

Sample characteristics Sample grindability
Sample Density Energy Fresh Feed Grindability
A b ta A.b Load (%Vol)
(g/cc) (kW) (tph) (kWh/t)
SP-51 75.98 1.75 0.72 3.27 132.72 655 260 2.52 19.61
SP-52 78.22 1.37 0.53 3.08 107.52 626 216 2.90 19.58
SP-53 75.45 2.69 1.68 3.35 203.34 671 307 2.19 19.62
WP-51 91.32 7.63 1.50 3.57 696.33 742 738 1.01 19.60
WP-51 91.32 7.63 2.00 3.57 696.33 740 725 1.02 19.58
WP-52 71.09 2.41 1.74 3.15 171.13 638 242 2.64 19.65
WP-53 86.65 4.04 2.08 3.28 350.34 676 442 1.53 19.62
EP-51 87.94 3.20 2.18 3.40 281.30 685 380 1.80 19.62
EP-52 81.58 1.59 0.68 3.28 129.52 656 258 2.54 19.58
EP-53 81.72 3.35 1.53 3.37 273.42 684 406 1.68 19.63
Mn Reduction Line
In order to limit the quantity of Manganese in the concentrate below 2.0% and have access to a larger ore
reserve, the additional four (4) Mn reduction lines will be installed. The Project Report 2156 –
Mn reduction Plant Metallurgical Summary and the technical note – Mn Circuit Testing Review, both
produced by Soutex, explain and demonstrate the manganese and silicate reduction performance. It was
observed that for a weight recovery of 90% and an iron recovery of 96.5%, it can be expected to achieve a
50% manganese reduction and a 44% silica reduction
The first pilot unit, line 1, was operational in 2008. The confirmation of the efficiency of this new line was
published in the Soutex report 2156 and is reproduced in the table below.

Table 13.3: Performance in the first Mn reduction line Result
Since the 1st quarter of 2010 improvements of line 1 were made and also implemented in the second line
installed at the end of 2011. These lines successfully achieved the removal of manganese depicted in
Figure 13.2, therefore validating the implementation of the additional 4 lines.
Figure 13.2: Mn Reduction Separation Principle
The Pyrolusite (MnO2) separation is different if we use the High Intensity Magnetic Separation (“HIMS”)
technology or the High tension Separation (HT) technology. For the first technology the Manganese oxide
(MnO2) is eliminated with the tailings. With the HT technology the Pyrolusite is separated from the Silica and
remains with the concentrate. Figure 13.3 shows the Pyrolusite behaviour for these two technologies.

Figure 13.3: Magnetic vs. High Tension Separation
Concentrate Grade
With the installation of the new Manganese reduction lines, the grade of iron will increase with the reducing
of Mn and silicate content. To optimize the production of the grade of concentrate a statistic study was made
with the historical production data from Scully Mine during the years 2007 and 2014.
Firstly, it is important to determine the impact of other elements in concentrate. Based on the historical data
the impurities except Manganese and Silicate are considered negligible. The table below shows the average
and the standard deviation for each of them.
Table 13.4: Historical Concentrate Composite Analysis.
Assay Fe SiO2 Mn Al2O3 CaO MgO K2O TiO2 P S Cr Zn LOI
Unit % % % % % % % % % % % % %
Average 65.4 2.97 1.82 0.128 0.021 0.023 0.029 0.026 0.007 0.029 0.010 0.012 0.77
Std. dev. 0.59 0.20 0.43 0.036 0.041 0.018 0.026 0.013 0.005 0.014 0.061 0.010 0.19

The figure below represents the historical data for the last 7 years of operations and the relation between the
Mn + SiO2 with the iron grade in the final concentrate.
Figure 13.4: Historical Grade Production
Because of the feed grade and the Mn grade change in 2009, the statistical analysis was focused on the
period between April 2009 and February 2014. The real impact of the addition of the two (2) new lines on
manganese reduction on the total concentrate production quality is shown in the graph below.

Figure 13.5: Mn Reduction Line Impact in the Total Production Concentrate
If we compare the data between 27/05/2009 and 08/05/2012 to the period of 30/05/2012 to 05/02/2014, when
the two manganese reduction lines are in full operation, the concentration of Mn was reduced from 2.07% to
1.85% and for the same period the iron grade increase of 0.24% (from 65.15% to 65.39%). With the
conversion of the 4 lines the concentrate grade can be estimate at 65.9% iron with 2.58% SiO2 and 1.39%
of Manganese. Because no other data is available we estimate that the concentration of the minor impurities
will not change.
Table 13.5: Product Quality Used for this Study
SiO2+MnO2
Fe SiO2 Mn Al2O3 CaO MgO K2O TiO2 P S Cr Zn LOI Total
+LOI
65.9 2.58 1.39 0.129 0.021 0.022 0.029 0.025 0.007 0.029 0.011 0.011 0.8 99.972 5.529
The reduction of impurities is very conservative and represent 2.07-1.39 /2.07 = 33% for Mn and
2.91-2.58/2.91 = 12% for SiO2. If we compare with historical data, the product concentrate target is shown in
the figure below and can be achieve with high confidence.

Figure 13.6: Chemistry Correlation Between Historical and Productive Concentrate Grade

14 MINERAL RESOURCE ESTIMATE
Introduction
GMS received the drill hole database in csv format on the 31/07/2017 from representatives of
Tacora Resources Inc, Grand Rapids, Minnesota. The data comprised of three files; a collar file
(wab_2013_ddh_collar.csv), a survey file (wab_2013_ddh_survey.csv) and an assay file
(wab_2013_ddh_assay.csv) that contained the relevant chemical analyses and a single logging code. In
addition, a blasthole drilling database was provided on 07/09/2017 as a single csv file
(wab_2013_mod_082313_bhs_sample.csv) which contained XYZ coordinates and chemical analyses.
No prior NI 43-101 compliant Mineral Resources have been reported to date for the Scully Deposit. Therefore,
no comparisons can be made with previous Mineral Resource estimates, nor detailed reconciliation can be
undertaken due to the disparate nature of historical production data.
No central QAQC database was available, and supporting drilling information was provided in .pdf format in
a folder structure classified by year.
All drilling data received was converted to metres using a factor of 0.3048. Down hole intervals (all in feet)
were converted, and collar coordinates in the local mine grid were also multiplied by this factor.
Exploration Drill Holes
The drilling database provided contains 1,005 drill holes from historical drilling programs which occurred up
to 2012. A total of 77,096 metres of drill core covers the Scully Mine area (of which 76,643 m of down hole
interval data is available).
All drilling was used in the production of the resource block model. A list of the drill holes present in the drilling
database is presented in Table 14.1 by year of drilling.

Table 14.1: List of Drill Holes Located Inside the Block Model Limits
Average
Number of Meterage
Year Hole ID Drill Hole
Holes (m)
Length
Incremental numeric values from 1 to 1063, with many missing
Unknown 490 29,878 61
values
1969 -
Prefix 69-, 70- 71-, 72-, 73- and 74- 149 11,287 76
1974
1976 Prefix 76- 50 3,918 78
1982 -
Prefix 82-, 83- 34 2,078 61
1983
1991 Prefix 91- 41 4.486 109
1994 Prefix 94- 24 2,488 104
1996 -
Prefix 96-, 97-, and 98- 79 8,991 113
1998
2001 Prefix 2001- 7 1,070 153
2004 -
Prefix 2004-, EE05-, EW05-, HL05-, SW05-, WP05-, WX05- 60 5,854 98
2005
2008 Prefix WX08-, SP08-, BT08-, EPE08-, EPW08- 22 1,462 69
2010 - Prefix BT10-, WP10-, BT11-, EPE11-, SP11-, WP11-, BT12-,
49 5,584 114
2012 EPE12-, SP12-, WPX12-
Total number of holes within block model limits 1005 77,096 77
A large proportion of the drilling database in terms of total meterage are from an unknown time period (39%
of drilled metres), and are assumed to be very early, pre-production drill holes. They are defined by an
incremental numerical drill hole ID, whereas drilling after 1969 contain a reference to the year within the drill
hole prefix. Most of these drill holes are located within the mined portions of the deposit, thus do not add
significantly to the geological model beneath the current pit topography.
Figure 14.1 shows an example of historical drilling (1974-1976 drill holes in blue) compared to more recent
drilling (1996 drill holes in red), where the lower un-mined units of the stratigraphy are defined by more recent
drilling.

Figure 14.1: Section 2513mE Showing Earlier Drilling in Blue, and Later Drilling in Red, Looking
East
Historical drilling activities consisted of shallower drill holes, likely targeting near surface resources with a
focus on short-term production. Since around 1985, deeper drilling has attempted to better define the extent
of mineralisation below surface, reflected by the deeper average drill hole length. .
Figure 14.2 shows the drilling coloured by year underlain by the west pit, west extension pit and boot pit. The
post-1985 drilling generally defines the unmined regions or the deposit (predominantly the boot pit, and the
southern wall of the west extension pit) which are considered key targets for future mining activities.

Figure 14.2: View Looking North-East Showing Pre-1985 Drilling (Blue) and Post-1985 Drilling (Red)
The assay table in the drilling database contains crude grades for Fe % and Mn %, which are present in most
of drilling intervals (89% of total meterage), and crude grades of magnetite % (Satmagan) which are present
in 77% of the total meterage.
Regarding concentrate grades, iron, manganese, silica and weight recovery are present in between 84% and
88% of the total meterage, however magnetite % of the concentrate is only present in 27% of the total
meterage. Table 14.2 summarizes the attributes found within the drilling database.

Table 14.2: Attributes Within the Drill Hole Database, and Their Abundance Compared to Total
Meterage
Percentage of
Valid sample
Attribute Description total
intervals
meterage
CRFE Crude grade Fe % (head grade) 69,414 m 89%
CRMN Crude grade Mn % (head grade) 69,051 m 89%
CRMAG Crude grade Magnetite % (head Satmagan grade) 59,420 m 77%
WTREC Weight Recovery, expressed as a percentage 68,615 m 88%
CONFE Concentrate Fe % 65,334 m 84%
CONSI Concentrate Si % 64,999 m 84%
CONMN Concentrate Mn % 65,046 m 84%
CONMAG Concentrate Magnetite % (Satmagan) 21,301 m 27%
Figure 14.3 shows the location of drill holes compared to the current pit topography.

Figure 14.3: Plan View of the Diamond Drill Holes Located Inside the Block Model Area
(Blue Outline)
In general, sampling of drill core has been conducted according to geological contacts at sample lengths less
than the given bench height of 12.2 m (sample lengths are usually 3 m, 4.5 or 6 m); however around 5% of
the samples in the assay table have a sample length greater than 12.2 m (see Figure 14.4). Samples greater
than the bench heights are considered less representative due to the high ratio between the initial sample
weight and the final pulverised sample weight. On the other hand, confidence in the weight recovery % of
concentrate increases with sample size.
Samples with a length greater than 12.2 m are generally distributed evenly across the deposit. There are
insufficient samples to make a robust statistical comparison with the samples less than 12.2 m in length.
GMS considers that removing these samples would have a detrimental effect on grade continuity, and a
cohesive Mineral Resource classification would not be possible. Therefore, GMS believes these samples
should be retained during geological modelling and estimation.

Figure 14.4: Probability Plot (Left) And Histogram (Right) Or Raw Sample Lengths in The Assay
Table (in Metres)
The drilling database, which was imported into Geovia GEMS™ software was validated before proceeding
to resource modelling and grade estimation. The following is a list of the validation checks executed on the
drill hole database, and any errors found:
• Checked for duplicate drill hole collar locations and hole numbers. Six pairs of drill holes were found
to share the same collar coordinates and downhole positions;
• Checked collar locations for zero or extreme values. No errors were found;
• Performed visual inspection of drill holes for unusual azimuths, dips, and deviations. No errors were
found;
• Cross-checked collar lengths against the final depths of the assay table. Twenty-five drill holes
contained assay data longer than end-of-hole in the collar file, some caused by the conversion factor
from feet to meters which produced minor rounding errors. These drill holes were lengthened to
accommodate for the assay data. In addition, 31 drill holes contain end of hole depths longer than the
assay data. These were cross-checked against the original drill logs;
• Ran validity checks for out-of-range values, missing intervals, overlapping intervals, out-of-sequence
intervals, etc. (3 missing intervals identified);
• Checked the accuracy of the length field in the provided assay interval table. Twenty-one intervals
were found to contain incorrect lengths (based off to – from calculations).

Although numerous errors were found in the drilling database, GMS believes the database is acceptable for
resource estimation. GMS corrected any minor errors found, and reimported the drilling database into
Geovia GEMS™. Recommendations will be made relating to the drilling database in Section 26.
Blast Hole Database
The production blast hole database was provided to GMS in CSV format on September 7th, 2017. The
database contains a single 40ft sample per blast hole, with each sample analysed for crude and concentrate
attributes. Blastholes were converted to meters (using a factor of 0.3048), and subsequently flagged with the
geological wireframes presented in Section 14.2.1.
Blasthole grades were reviewed on-section and compared with exploration drill holes for suitability. Crude
Fe % and Mn % were found to correlate well with existing drilling and geological interpretations. However,
crude Magnetite % in the blast hole database was found to be significantly lower than the surrounding
exploration drill holes. For this reason, the crude Magnetite % data in the blast hole database will be not
considered further in the resource estimation.
Modelling
GMS was provided with various wireframes by representatives of Maptek™ Colorado, which were built based
on sectional interpretations produced by Cliffs geologists before the mine ceased production in 2014.
Geological sections were spaced 76 m (the nominal drill spacing, 250 ft), and were orientated depending on
the strike azimuth of the deposit (sections orientated north-south for boot, west, west extension and south
pits, and orientated east-west for the east pit).
GMS imported the provided wireframes into Geovia GEMS™, and reviewed them according to the following
criteria:
• Geological representation – are wireframes globally representative of the geologically logged units in
the drilling.
• Fit for purpose – are wireframes closed, snapped to geological boundaries observed in drilling, with
minimal extrapolation beyond the limits of the data. Are the wireframes suitable for block modelling?
Although the wireframes were a good representation of the sectional geological interpretation, GMS found
that they were not snapped to geological intervals in the drilling. Any drill holes off-section were not honoured
by the wireframes, resulting in large disparities between the off-section drill holes and the wireframes.

The following modelling approach was proposed to produce a robust geological model:
1. Create 2D cross-sections from provided wireframes on each major drill section (76 m spacing).
2. Import drill hole logging interval data and 2D cross-sections into Leapfrog GEO™ to build a geological
model using implicit modelling techniques.
3. Build a surface for the basal contact of each unit in the stratigraphic column using the polylines to
guide the interpretation, and the drill hole geological contacts as the base information layer.
4. Cut all stratigraphic units by a base of overburden surface, modelled from filtered drill hole intercepts.
5. Honour any faults that may offset the units (East Pit) by using separate fault blocks to constrain
surface generation.
6. Produce 3D solids of each stratigraphic unit for use in block modelling. The geological model will
represent the deposit as “unmined” (i.e. before production commenced), to ensure that cross-
validation can be undertaken against the blast hole database to measure the accuracy of the block
model. For reporting purposes, only blocks below the current pit topography will be reported as
Mineral Resources.
Geology Model
Due to the inconsistencies with the existing geological interpretation (mentioned in Section 14.2), GMS
produced a new geological model using the rock code provided in the downhole assays table (geol). Using
Leapfrog GEO™ software, a geological model was built using various stratigraphic modelling techniques and
constraints. The stratigraphic column used during modelling is presented in Section 7.
All formations of the stratigraphic column were modelled:
1. Upper Member (rock codes 21, 22, 23) characterised generally as low-manganese (0.6% - 0.8% Mn),
goethite-rich, oxidised, specularite-poor (apart from rock code 22);
2. Middle Member (rock codes 31, 32, 33, 34) characterised generally as moderate manganese (1.2% -
.1.6% Mn), specularite-rich, high-quality ore with high weight recoveries;
3. Lower Member (rock codes 51, 52, 53) characterised as high-manganese (1.5% – 3.0% Mn),
specularite-rich, with high weight recoveries;
4. Un-mineralized units comprising of glacial overburden (rock code 11), middle quartzite (rock code 41)
and the footwall basal silicates (rock code 61).

To produce cross-sections in Geovia GEMS™, the geological wireframes provided were cut on each major
drill section (76 metre spacing) to produce a set of 2D interpretations, one for the base of each unit. These
were imported into Leapfrog GEO™ to help guide the construction of each geological surface. An example
is shown in Figure 14.5.
Figure 14.5: 2D Geological Sections Imported into Leapfrog GEO™ for the Base of Unit 34 (Base of
Middle Member). Looking North-East.
GMS reviewed the cross-sections for the base of each geological unit in Leapfrog GEO™ to ensure that
polylines honoured fault intersections and displacements (especially in the East Pit region). Drill hole interval
data was imported and underwent further validations to ensure that the stratigraphic column was robust and
any over-turned folds were well represented in the cross-sections and the drilling data.
Surfaces were then constructed using the Stratigraphic Sequence tool in Leapfrog GEO™ using a
combination of drilling intercepts and 2D cross-sectional polylines in the process. The surfaces were snapped
to drill hole intercepts (i.e. the surfaces pass accurately through geological boundaries in the drilling), however
polylines were used only to guide the interpretation (no snapping).
The geological model was split into two main fault blocks, which is discussed in Section 14.2.2.
All units of the stratigraphic column were constrained by the base of overburden (Section 14.2.4). A cross-
section example of the new geological model is shown in Figure 14.6.

Figure 14.6: Cross-Section 1677me In Leapfrog Geo™ Looking East Showing the Stratigraphy and
Drilling

Fault Block Domains
The iron formations of the Scully deposit have been affected by post-mineralisation folding and faulting,
resulting in two key distinct structural domains. The western domain is characterised by an asymmetrical,
occasionally overturned (boot pit) E-W striking succession of synforms and antiforms, with axial planes
dipping between 45 degrees and vertical to the south. No large-scale faulting has been observed in the
western domain. The eastern domain is characterised by a more shallowly folded succession of N-S trending
antiforms and synforms, with a significant reverse fault striking NW-SE steeply dipping to the NE. This reverse
fault raises the western block, resulting in basements rocks up-thrusted to surface (Figure 14.8). The
geological units in the eastern block have been deformed near vertically near the reverse fault.
GMS built a fault surface using the sectional interpretations supplied, and used the fault surface to separate
the geological model into two fault blocks (west and east). The reverse fault is shown in 3D in Figure 14.7.
Figure 14.7: View of the East Pit Showing the Reverse Fault (Looking North), Current Pit
Topography and Drilling

Figure 14.8: Section 6398N (Looking North) Showing Reverse Fault and Vertical Displacement of
Geological Units
Structural Domains
Due to the folded nature of the Scully deposit, the geological model was divided into multiple structural
domains. A structural domain was modelled for each fold limb, where the orientation (dip and strike) of the
geological units are comparable. Wireframes of the fourteen (14) structural domains are illustrated in
Figure 14.9 (plan view) and Figure 14.10 (cross section view).
Table 14.3 lists the fold limb orientations of each structural domains. These orientations will be used as
search ellipse orientations during grade estimation.

Figure 14.9: Plan View Showing the Structural Domain Definition
Figure 14.10: Section View (1829 mE) Looking East Showing the Structural Domains and the
Geological Units

Table 14.3: List of Fold Limb Orientations Defining the Structural Domains
Plane Orientation
Domain
Dip Direction Dip
1 180 -30
2 180 -65
3 185 -20
4 10 -50
5 190 0
6 190 -27
7 10 -30
8 90 -40
9 270 -25
10 80 0
11 65 -50
12 75 -20
13 250 -25
14 90 0
Overburden
A base of overburden surface (rock code 11) was constructed using logged drill hole intercepts from drilling
conducted only from the original topographic surface. Several drill holes located within the pit contained the
overburden code (11), which likely represented loose material affected by previous blasts (not true glacial
till). These were filtered out, and only valid overburden intercepts were retained for modelling.
Topography Surface
As the geological units are constrained by the base of overburden surface, no topography was applied in the
geological model. A topography will be applied and discussed when reporting the Mineral Resources later in
this report.
Statistical Analysis
This section will focus mainly on the crude assay attributes which will be reported in the Mineral Resource
(crude Fe, Mn and Magnetite %). Weight recovery (WTREC) will also be assessed, as it is an important
attribute for calculation of the reserves. However, this attribute is strongly influenced by the performance of
the shaker table (and the crude Fe % grade) and mineralogy.

Assay Statistics
Group-wise averages of the crude assays and concentrate assays were computed using R statistical
software. Assays were grouped by geological units as per the stratigraphic column shown in Section 7, and
are presented in Table 14.4 and Table 14.5.
Table 14.4: Attribute Averages for Crude Assays
Average Downhole Magnetite No. of

Stratigraphy ROCKCODE Fe % Mn %
Thickness (m)* % Assays**
21 33.2 32.04 0.60 6.48 211
Upper Member 22 26.5 35.33 0.69 5.40 320
23 29.9 30.59 0.72 5.64 854
31 27.1 36.75 1.29 3.63 1237
32 15.2 29.69 1.48 3.37 431
Middle Member
33 25.2 38.41 1.68 5.06 1829
34 19.0 36.77 1.60 6.78 1271
Middle Quartzite 41 12.8 23.30 2.53 3.59 623
51 14.6 35.66 3.06 5.37 981
Lower Member 52 19.0 31.37 1.42 4.56 816
53 27.0 36.01 3.03 5.54 1807
Basal Silicates 61 - 33.59 1.92 6.48 877
*Downhole thickness is not representative of true thickness
**Number of assays derived from the CRFE attribute. There are 15% less samples analysed for CRMAG compared to CRFE
Table 14.5: Attribute Averages for Concentrate Assays
Average Fe SiO2 Mn No. of

WT Mag Conc
Stratigraphy ROCKCODE Downhole Conc Conc Conc
REC % Assays**
Thickness (m)* % % %
21 33.2 21.96 66.19 2.93 0.71 14.65 190
Upper Member 22 26.5 34.44 66.41 3.10 0.77 8.78 319
23 29.9 20.28 66.69 3.35 0.89 11.75 758
31 27.1 44.85 65.96 3.16 1.29 3.27 1217
32 15.2 27.28 64.35 3.58 1.88 2.21 406
Middle Member
33 25.2 45.50 65.40 3.55 1.53 3.17 1811
34 19.0 30.57 64.83 3.63 1.72 6.35 1212
Middle Quartzite 41 12.8 11.04 55.85 7.39 5.23 6.58 463
51 14.6 39.54 63.28 4.26 3.05 4.63 977
Lower Member 52 19.0 26.72 64.83 3.86 1.66 3.65 780
53 27.0 40.54 63.38 3.89 2.96 5.27 1787
Basal Silicates 61 - 16.82 61.72 4.37 2.70 15.19 704
*Downhole thickness is not representative of true thickness
**Number of assays derived from the CONFE attribute. There are 62% less samples analysed for CONMAG compared to CONFE

The averages confirm that the higher-quality iron formations are the rock codes 22, 31, 33, 34, 51, and 53,
which present higher Fe grades and higher weight recoveries. The attribute that differentiates these higher
quality iron formation is manganese, which is generally low in the Upper Member (0.6% – 0.7%), moderate
in the Middle Member (1.2% – 1.6%), and high in the Lower Member (1.4% - 3.1%). Weight recoveries
generally correlate with crude Fe grade (higher crude grade, higher weight recovery), although this is not true
for the Upper Member which is dominated by goethite and contains significant magnetite which has proven
in the past problematic for recoveries.
Cumulative probability plots are shown for crude Fe % grades in Figure 14.11 separated by rock code. Due
to the negatively skewed distributions associated with crude Fe % raw assays, no outliers were identified.
Probability plots were also generated for crude Mn % for each rock code with in the three Members, and are
presented in Figure 14.12. The plots show more typical positively skewed data (which often exhibit outliers).
Potential outliers exist for crude Mn % in rock code 31 (Middle Member), however these will be readdressed
after compositing.

Figure 14.11: Cumulative Probability Graphs for Crude Fe % Raw Assays Inside the Upper (Left), Middle (Right) and Lower (Bottom)
Members

Figure 14.12: Cumulative Probability Graphs for Crude Mn % Raw Assays Inside the Upper (Left), Middle (Right) and Lower (Bottom)
Members

Finally, probability plots were also generated for crude Magnetite % for each rock code within the three
Members, and are presented in Figure 14.13. The plots show a large spread of % magnetite with the Middle
Member, with a potential sub-population present in rock code 33, 34 and 53. O’Leary (1972) describes
magnetite increasing with depth in the Lower Member and the Middle Member, however this relationship is
not observed constantly across the deposit.
Spatial interrogation of crude Magnetite % reveals that magnetite is isolated to the western edge of the South
Pit, and is generally present in rock codes 33, 34 and 53 (as described by O’Leary, 1974). As this
concentration of high-magnetite reflects a separate spatial sub-domain, no capping will be applied to the
crude Magnetite % attribute.
Probability plots were also examined for the concentrate attributes in the raw assays. Concentrate SiO2 %
displayed potential outlier populations, and these will be addressed after compositing to evaluate if grade
capping should be implemented. Fe % and Mn % concentrate grades did not display any significant outliers.

Figure 14.13: Cumulative Probability Graphs for Crude Magnetite % (Satmagan) Raw Assays Inside the Upper (Left), Middle (Right) and
Lower (Bottom) Members

Compositing
As shown in Section 14.1.1, most assay lengths are between 3 and 12 m, reflecting quarter, half and full
bench heights (current bench heights are 40 ft in height). GMS considers a composite length of 6 m suitable
to provide enough resolution within the block model for mine planning purposes.
Composites were subdivided by rock code with a maximum length of 6 m permitted, and end of interval
composites less than 1 m were discarded. Statistical checks were made between the raw assays and the
composites to ensure that the composites are representative of the original assays (i.e. total accumulations
of length multiplied by crude Fe % were compared to ensure the loss of “metal” during compositing was
minimal).
Exploratory Data Analysis
This section describes various statistical methods applied to the composite and blast hole databases to
determine an appropriate grade estimation strategy, and to ensure that statistical populations in the database
are well represented in the final block model.
Preliminary mine scheduling studies have shown that most of the future production tonnage will come from
the Lower Member (units 51, 52 and 53), with the remaining tonnage provided by the Middle Member. Only
minor tonnage will be sourced from the Upper Member. Therefore, the following section will focus mainly on
the Middle and Lower Members of the stratigraphy.
Descriptive statistics of the 6.0 m composites generated for the crude attributes are summarized in
Table 14.6, and the concentrate attributes are summarized in Table 14.7.

Table 14.6: Descriptive Statistics of Crude Attributes – 6 m Composites

Rock Coeff.
Attribute Stratigraphy Mean Median St Dev Variance # of Obs.
Code of Var.
21 31.39 31.24 6.92 47.91 0.22 264
Upper Member 22 34.69 34.69 4.97 24.66 0.14 421
23 31.20 30.92 4.70 22.09 0.15 1088
31 36.61 36.80 4.62 21.38 0.13 1408
32 30.42 31.79 8.30 68.85 0.27 555
Middle Member
Crude Fe % 33 38.51 38.37 4.74 22.44 0.12 1920
34 36.47 36.90 5.44 29.56 0.15 1389
Middle Quartzite 41 24.53 26.53 10.50 110.32 0.43 853
51 35.48 36.30 5.13 26.28 0.14 902
Lower Member 52 31.13 30.72 4.61 21.24 0.15 916
53 35.75 35.65 4.56 20.79 0.13 1836
21 0.55 0.25 1.08 1.16 1.97 256
Upper Member 22 0.68 0.42 0.86 0.75 1.26 421
23 0.77 0.36 1.21 1.46 1.58 1084
31 1.28 0.78 1.42 2.03 1.11 1397
32 1.75 1.11 1.98 3.92 1.13 551
Middle Member
Crude Mn % 33 1.64 1.35 1.46 2.14 0.89 1917
34 1.59 1.07 1.72 2.96 1.08 1389
51 2.92 2.33 2.48 6.17 0.85 901
Lower Member 52 1.32 0.64 1.97 3.88 1.49 913
53 2.95 2.14 2.72 7.38 0.92 1835
21 6.27 1.71 8.42 70.86 1.34 242
Upper Member 22 6.11 1.99 7.68 58.97 1.26 383
23 5.25 1.37 7.76 60.26 1.48 979
31 3.76 1.50 5.53 30.55 1.47 1305
Crude 32 3.77 1.39 6.05 36.61 1.61 510
Middle Member
Magnetite % 33 5.04 2.02 7.20 51.89 1.43 1800
(Satmagan) 34 7.37 2.80 10.47 109.62 1.42 1288
51 6.25 3.12 8.07 65.06 1.29 803
Lower Member 52 4.85 1.79 7.02 49.32 1.45 745
53 6.31 2.80 8.40 70.49 1.33 1472

Table 14.7: Descriptive Statistics of Concentrate Attributes – 6 m Composites
Rock St Coeff. # of
Attribute Stratigraphy Mean Median Variance
Code Dev of Var. Obs.
21 23.87 23.70 13.29 176.54 0.56 262
Upper Member 22 34.95 35.88 13.08 171.06 0.37 419
23 22.38 20.87 12.22 149.29 0.55 1085
31 44.28 45.29 10.75 115.63 0.24 1407
32 30.68 29.06 14.07 198.00 0.46 551
Weight Middle Member
33 46.19 47.04 10.87 118.20 0.24 1911
Recovery %
34 30.45 29.45 13.91 193.50 0.46 1385
51 39.08 40.18 12.37 153.06 0.32 902
Lower Member 52 27.68 27.61 9.72 94.58 0.35 915
53 39.96 40.33 11.81 139.49 0.30 1829
21 65.86 67.03 3.26 10.66 0.05 254
Upper Member 22 66.25 66.90 3.24 10.52 0.05 416
23 66.54 66.91 8.64 74.59 0.13 1028
31 65.95 66.50 2.37 5.62 0.04 1393
32 64.36 65.42 4.55 20.67 0.07 532
Concentrate Middle Member
33 65.64 66.00 2.15 4.62 0.03 1905
Fe %
34 65.13 66.16 4.07 16.57 0.06 1359
51 63.70 64.54 4.07 16.56 0.06 899
Lower Member 52 65.36 66.33 3.71 13.77 0.06 899
53 63.55 64.40 3.81 14.53 0.06 1823
21 0.61 0.29 1.23 1.51 2.00 254
Upper Member 22 0.77 0.39 1.06 1.13 1.38 416
23 0.87 0.36 1.54 2.36 1.76 1028
31 1.28 0.72 1.58 2.51 1.24 1391
32 2.16 1.06 2.73 7.45 1.26 530
33 1.48 1.04 1.48 2.19 1.00 1905
Mn %
34 1.67 0.96 2.14 4.59 1.29 1358
51 2.89 2.08 2.65 7.01 0.92 899
Lower Member 52 1.45 0.61 2.49 6.20 1.72 898
53 2.92 2.22 2.55 6.51 0.87 1822

Rock St Coeff. # of
Attribute Stratigraphy Mean Median Variance
Code Dev of Var. Obs.
21 3.51 2.97 2.56 6.53 0.73 254
Upper Member 22 3.37 2.89 3.25 10.57 0.97 415
23 3.12 2.72 2.61 6.80 0.84 1023
31 3.17 2.90 1.59 2.54 0.50 1392
32 3.50 3.05 2.19 4.78 0.62 532
SiO2 % 33 3.38 3.11 1.63 2.66 0.48 1893
34 3.36 2.84 2.59 6.70 0.77 1352
51 3.91 3.18 3.42 11.72 0.88 895
Lower Member 52 3.48 3.11 2.08 4.32 0.60 894
53 3.73 3.29 2.80 7.84 0.75 1820
21 10.21 2.70 15.80 249.60 1.55 102
Upper Member 22 9.78 3.36 14.10 198.89 1.44 174
23 9.03 1.80 18.02 324.63 2.00 396
31 4.92 1.59 9.44 89.17 1.92 295
32 2.93 0.85 5.03 25.33 1.72 216
Magnetite % 33 3.36 1.68 4.30 18.50 1.28 552
(Satmagan) 34 7.76 4.19 10.12 102.37 1.30 504
51 5.98 2.60 8.15 66.47 1.36 366
Lower Member 52 3.89 2.00 5.75 33.02 1.48 317
53 7.04 3.17 11.85 140.45 1.68 614
The composite statistics confirm the remarks made in Section 14.3.1. In addition, it appears that historical
sampling practises have introduced a possible bias in relation to preferential sampling of rock codes 31, 33
and 34, which were considered higher quality mineralisation compared to other rock codes. Rock codes 32,
51 and 52 are under-represented in the composites, however this may be due to the thinner nature of these
units compared to the major ore units. The Upper Member (rock code 21, 22, 23) does not contribute largely
to the tonnage of remaining in-pit resources at Scully.
To investigate potential relationships between the crude and concentrate attributes in the composites,
correlation plots were produced by grouping rock codes into each Member (Upper, Middle and Lower).
Results are shown in Figure 14.14.

Figure 14.14: Correlation Plots of the Upper (Left), Middle (Right) and Lower (Bottom) Members
The key differences between the correlation plots are that there is only a very weak correlation between
weight recovery (WTREC) and crude Fe % in the Upper Member, compared to a much stronger correlation
for the Middle and Lower Member. This could be due to the different mineralogy and rock textures, with the
Upper Member dominated by goethite, and banded (rather than massive) resulting in lower recoveries.
Weak correlations exist between Mn % and SAT % and their concentrate counterparts, indicating that
magnetite and manganese levels have been maintained after shaker table treatment.
Scatter plots comparing WTREC and crude Fe % are presented in Figure 14.15 for the Middle and Lower
Members, showing the strengthening correlation as crude Fe % increases.

Figure 14.15: Scatter Plots Comparing WTREC and Fe % (Crude) For the Middle Member (Left) and
Lower Member (Right). Colours and Contours Reflect Point Density
Blasthole vs. Composite Comparison – Q:Q Plots
To enable the global comparison between the blast hole database and the exploration drilling database, blast
holes were flagged using the wireframes constructed in Section 14.2.1. Q:Q plots were then constructed
comparing the distributions of the two datasets to confirm that the composites are globally representative of
the blasthole database.
Q:Q plots are useful in comparing the distributions of two datasets, and can identify any differences in bias
(i.e. a shift in the mean), skewness (asymmetry of the distributions) or kurtosis (i.e. the “tightness” of the
distribution in relation to any outliers). Two identical distributions will follow the center diagonal line. The slope
of the Q:Q plot curve reflects the difference in kurtosis of the two distributions.
As the wireframes were modelled based on the diamond drill holes only, there could be local variations in
grade between the blast holes and drill holes, however when considered as the 3 main Members (Upper,
Middle and Lower) these differences should be insignificant. In addition, all blast holes are 12.2 m in length,
so their spatial accuracy in relation to geological boundaries is poor.
Figure 14.16 presents Q:Q plots for crude Fe% comparing blast holes and exploration drill holes for the
3 Members (Upper, Middle and Lower).

Figure 14.16: Q:Q Plots for Crude Fe % Comparing Blastholes (X Axis) and Exploration Drill Holes (Y-Axis) for the Upper (Left), Middle
(Right) and Lower (Bottom) Members

The Q:Q plot comparisons show that the blasthole database shows lower variability for crude Fe % than the
exploration drill holes for the Upper Member. For the Middle Member, the distributions are near identical,
indicating that the blasthole and exploration drill hole database are very similar regarding their distributions
of crude Fe %. Finally, the distributions of crude Fe % are similar for the Lower Member, apart from the
blasthole database contains a population of samples assaying less than 25% Fe compared to the exploration
drill holes. These samples could belong to the Middle Quartzite or the Basal Silicates (above and below of
the Lower Member respectively), and are likely the result of localised differences between the geological
wireframes, and the true geology.
A key attribute for determining the final tonnage of concentrate during mine planning will be the weight
recovery attribute (WTREC). Therefore, it is important to analyse the distributions of the blast holes and
exploration drill holes for this attribute to ensure there is no bias observed, and that WTREC can be
confidently incorporated into the block model. Q:Q plots for WTREC are shown in Figure 14.17.
Section 14 December, 2017 Page 14-29

Figure 14.17: Q:Q Plots for Weight Recovery % (WTREC) Comparing Blastholes (X Axis) and Exploration Drill Holes (Y-Axis) for the Upper
(Left), Middle (Right) and Lower (Bottom) Members
Section 14 December, 2017 Page 14-30

Q:Q plots of weight recovery % (WTREC) show that the blast holes and exploration drill holes show very
similar distributions for the Middle and Lower Members. For the Upper Member, a bias is present where
weight recoveries are generally higher in the blast holes than the exploration drill holes. This may lead to a
more conservative estimate of weight recovery in the block model for the Upper Member.
Q:Q plots were also reviewed for crude Mn %, and were found to be satisfactory, with the blasthole database
a good representation of the exploration drilling database. Q:Q plots of concentrate grades were also
reviewed, and no significant bias was found between the blast holes and exploration drilling for the Middle
and Lower Members.
No blasthole comparisons were made for Magnetite %, as the blastholes were rejected due to data integrity
concerns.
Grade Capping
Section 14.1.1 concluded grape capping would be revisited after compositing, to evaluate the impact of
compositing on the grade attributes. Probability plots of the composites were re-assessed, and grade capping
was chosen and summarised in Table 14.8.
Table 14.8: Grade Capping Applied to Composites for Grade Estimation
Crude Weight Fe % SiO2 % Mn %

Rock Crude Crude Magnetite %
Magnetite Recovery
Code Fe % Mn % Con. Con. Con. Con.
% %
21 - - - - - - - -
22 - - - - - 10 - -
23 - - - - - - - -
31 - 6 - - - - - -
32 - - - - - 15 - -
33 - - - - - - - -
34 - - - - - 20 - -
51 - - - - - 20 - -
52 - - - - - - - -
53 - - - - - 20 - -
SiO2 % concentrate grades show significant outliers in many rock codes. The vast majority of values for
SiO2 % concentrate lie between 0% and 10%, however outliers occur up to 50% SiO2. For this reason, SiO2 %
concentrate grades were capped to between 10% and 20% based on probability plots of individual rock
codes. These plots are presented in Figure 14.18.

Figure 14.18: Probability Plots of Sio2 % Concentrate by Rock Code for Outlier Identification
Variography
3D directional variography was conducted on the 6 m composites, grouped into their respective Member
(Upper, Middle and Lower). The complex folding of stratigraphy at Scully means producing representative
variograms is difficult without applying complex unfolding algorithms on the composites. An alternative
strategy was adopted, where composites located in similar structural domains (structural domains were
grouped based on orientation of bedding) were grouped, and then grouped again into their respective
Member (Upper, Middle and Lower). This created variographic domains with sufficient data to derive
representative experimental variograms.
Structural domains 1, 3 and 6 were grouped (Figure 14.19), as they share a common dip and strike of bedding
(shallow dip to the south). Variographic domains for the Lower, Middle and Upper Members contained 641,
2225, 1375 composites respectively.
Directional semi-variograms were generated in Geovia GEMS™ for crude Fe%, Mn% and Magnetite % within
the previously described variographic domain. Semi-variograms were produced every 5 degrees azimuth and
5 degrees dip increments. The spread angle was set to 30 degrees, with a bandwidth of 200 m. A lag distance
of 75 m was applied. The manually-fitted variogram models included a nugget effect and two spherical
structures
The parameters of the semi-variograms modelled are summarized in Table 14.9.

First Spherical Structure Second Spherical Structure

Variable
Member C0 Ranges (m) Ranges (m)
Sill Sill
Major Semi-Major Minor Major Semi-Major Minor
Upper 0.12 0.16 130 98 43 0.28 425 320 141
Crude Fe % Middle 0.02 0.30 114 75 36 0.25 487 320 154
Lower 0.15 0.16 129 79 26 0.21 504 306 102
Upper 0.34 0.34 97 81 29 0.96 540 447 164
Crude Mn % Middle 0.43 0.47 107 75 35 0.70 865 612 153
Lower 0.56 1.62 126 126 55 0.58 435 435 191
Upper 7.6 19.9 169 169 79 29.2 370 370 172
Crude Magnetite % Middle 17.1 30.5 122 122 92 16.0 414 414 147
Lower 7.0 24.0 93 87 93 9.4 481 450 137
Table 14.10 presents the rotation angles defining the anisotropy for each combination of attribute and
Member.

Table 14.9: Variogram Parameters for Crude Attributes in the Variographic Domain
First Spherical Structure Second Spherical Structure
Variable Member C0 Ranges (m) Ranges (m)
Sill Sill
Major Semi-Major Minor Major Semi-Major Minor
Upper 0.12 0.16 130 98 43 0.28 425 320 141
Crude Fe % Middle 0.02 0.30 114 75 36 0.25 487 320 154
Lower 0.15 0.16 129 79 26 0.21 504 306 102
Upper 0.34 0.34 97 81 29 0.96 540 447 164
Crude Mn % Middle 0.43 0.47 107 75 35 0.70 865 612 153
Lower 0.56 1.62 126 126 55 0.58 435 435 191
Upper 7.6 19.9 169 169 79 29.2 370 370 172
Crude Magnetite % Middle 17.1 30.5 122 122 92 16.0 414 414 147
Lower 7.0 24.0 93 87 93 9.4 481 450 137
Table 14.10: Rotation Angles Defining the Major and Semi-Major Axes
Rotation
Structural Domain
Major Azi Major Plunge Semi-Major Dip Semi-Major Azi
Upper 080° 0° -20° 170°
Crude Fe % Middle 100° 0° -20° 190°
Lower 095° 0° 0° 005°
Upper 105° 0° -20° 195°
Crude Mn % Middle 100° 0° -20° 190°
Lower 105° 0° -20° 195°
Upper 100° 0° -20° 190°
Crude Magnetite % Middle 100° 0° -20° 190°
Lower 100° 0° -20° 190°
Concentrate grades are strongly influenced by factors such as the performance of the recovery equipment
(shaker tables), crushing sizes and other non-geological parameters. For this reason, GMS believes that
undertaking variography on these attributes is unnecessary.
An example of the variogram model for crude Fe % for the Lower Member is given in Figure 14.19.

Figure 14.19: Example of Variogram Model for Crude Fe % for the Lower Member. Major Axis (Left)
and Semi-Major Axis (Right)
Block Modelling
The block model for the Scully Deposit was set in Geovia® GEMS 6.7.4 environment.
Block Model Parameters
The drilling pattern, the thickness of the zones, the complexity of the geological model and the open pit mine
planning considerations guided the choice of block dimensions. The block model parameters are summarized
in Table 14.11.
Table 14.11: Block Model Settings (SC17_FINAL)
Origin(1) Block Size

Axis Number of Blocks
(m) (m)
X 917 20 352 Columns
Y 3654 20 240 Rows
Z 804 12 85 Levels
1. The origin is at the minimum X, minimum Y and maximum Z. No rotation was applied
A series of attributes required during the block modelling development were incorporated into the block model
project. Table 14.12 presents the list of attributes found in the block model SC17_FINAL in the folder “WA”.

Table 14.12: List of Attributes Found in The Block Model SC17_FINAL

Origin of
Model Name (units) Description
Attribute
Lithology codification (11, 21, 22, 23, 31, 32, 33, 34, 41, 51, 52, 53,
Rock Type
Geology and 61)
Structural Models STRUCT Structural domain codification (100 to 1400)
STROCK Litho-structural domain codification (Rock Type, Structural Domain)
DENS_WA (g/cm3) Weighted Average specific gravity
FE_WA (%) Weighted Average estimated grade for Crude Fe %
MN_WA (%) Weighted Average estimated grade for Crude Mn %
SAT_WA (%) Weighted Average estimated grade for Crude Magnetite %
Grade Variables WTREC (%) Weighted Average estimated grade for Weight Recovery
FE_CONC_WA (%) Weighted Average estimated grade for Concentrate Fe %
SI_CONC_WA (%) Weighted Average estimated grade for Concentrate Si %
MN_CONC_WA (%) Weighted Average estimated grade for Concentrate Mn %
SAT_CONC_WA (%) Weighted Average estimated grade for Concentrate Magnetite %
Mineral Resource Iron recovery from Heavy Liquid Separation (HLS) composites,
CLASS
Classification estimation by Ordinary Kriging
Kriging PASS_WA Kriging Pass for Crude Fe % (1, 2, 3 ,4 or 5)

Performance SAMPLE_WA Number of Samples used during estimation of Fe %
Indicators SLOPE_WA Slope of Regression for Fe %
Rock Type Model and Estimation Domains
Rock type models relied on a combination of geological and structural wireframes as presented in
Section 14.2. Due to the folded nature of the deposit, and narrow width of some geological units (compared
to the bench height), a block-percentage style model was adopted. This method will ensure a more
representative grade is estimated within blocks shared by multiple geological units, and is an alternative to
sub-blocking. Once a block pertaining to numerous rock codes is estimated, the various grades and
percentages within that block will be used to calculate a single weighted-average grade for each block.
Checks were made between the volumes of the wireframes, and the resulting volumes of the blocks to ensure
that the rock codes within the block model were representative.
Estimation domains were created by concatenating the structural domains (1 – 14) with the geological rock
codes of the iron formations (21, 22, 23, 31, 32, 33, 34, 41, 51, 52, 53) to produce individual estimation
domains (attribute named STROCK in the block model).
Views of the Rock Type Domain attribute are illustrated in Figure 14.20 and Figure 14.21.

Figure 14.20: Cross-Section 1677mE Showing the Dominant Rock Type
Figure 14.21: Plan View of the Base of The Current Pit Showing the Rock Type Attribute
(Overburden Blocks Are Hidden)

Density Model
As no existing bulk density measurements available for the Scully Deposit, GMS used a regression formula
derived from typical Sokoman Formation rocks in the Labrador Trough iron ore district to assign bulk densities
to the block model. These values were then validated by laboratory measurements taken as part of the re-
sampling program described in Section 11.
The regression curve for bulk density is based on the crude Fe % values in the block model and
an adjustment factor (0.9) to account for the more friable nature of the mineralisation at Scully. The equation
is presented below:
#
0.0002" 0.0157" 2.758 0.9
Any resulting density values less than 2.7 g/cc were adjusted upwards to a value of 2.7 g/cc. Blocks pertaining
to overburden (rock code 11) were assigned a density of 2.2 g/c, and blocks pertaining to the Middle Quartzite
and the Basal Silicates (rock codes 41 and 61 respectively) were assigned a rock code of 2.7 g/cc.
Density values presented in Table 14.13 are average values for each rock type within the optimized pit shell
using a cut-off of 20% Fe.
Table 14.13: Resulting Density Values by Rock Code
Rock Density
Member
Code (g/cm3)
Overburden 11 2.20
21 3.08
Upper Member 22 3.16
23 3.12
31 3.19
32 3.15
Middle Member
33 3.25
34 3.16
Middle Quartzite 41 2.70
51 3.11
Lower Member 52 3.12
53 3.19
Basal Silicates 61 2.70

The regression curve was subsequently compared to laboratory measurements undertaken as part of the re-
sampling program. The results are shown in Figure 14.22, and GMS concludes that the density regression
equation used in the block model is an acceptable representation of the laboratory measurements.
Figure 14.22: Bulk Density Measurements from Re-Assay Program Vs. Crude Fe (%) Compared with
Regression Curve Applied in Block Model
Estimation Methodology
Grade estimates were carried out using a combination of Ordinary Kriging (OK) and
Inverse Distance Square (ID2). A four- pass estimation methodology was adopted for the following attributes;
crude Fe (%), crude Mn (%), crude SAT (%), weight recovery (%), concentrate Fe (%), concentrate Mn (%),
concentrate SiO2 (%), and concentrate SAT (%).
Geological boundaries were considered as hard boundaries during grade estimation. Structural domains
were considered as soft boundaries, to allow composites (within the same rock code) to be shared between
the different fold limbs of the Scully Deposit. Geovia® GEMS 6.7.4 software was used to produce the grade
estimates.

Ordinary Kriging (OK) was used in the estimation of crude Fe %, Mn % and SAT % for the Upper, Middle and
Lower Members (rock codes 21, 22, 23, 31, 32, 33, 34, 51, 52 and 53). The kriging strategy is summarized
below:
• First Pass: A minimum of 9 and a maximum of 18 composites within the Pas 1 search ellipse ranges,
using a combination of the exploration drill hole composites and the blast hole composites. Blast holes
were used in the estimation of Fe % and Mn %, and were not used to estimate SAT % (due to their
poor representation of exploration drill hole grades).
• Second Pass: A minimum of 6 and a maximum of 18 composites within the Pass 2 search ellipse
ranges. Only blocks which were not estimated during the first pass could be estimated during the
second pass. Only exploration drill hole composites were used for this pass.
• Third Pass: A minimum of 3 and a maximum of 10 composites within the Pass 3 search ellipse
ranges. Only blocks which were not estimated during the first and second pass could be estimated
during the third pass. Only exploration drill hole composites were used for this pass
• Fourth Pass: A minimum of 1 and a maximum of 10 composites within the Pass 4 search ellipse
ranges. Only blocks which were not estimated during the first, second or third pass could be estimated
during the fourth pass. Only exploration drill hole composites were used for this pass.
Inverse Distance Squared (ID2) approach used to estimate weight recovery % (WTREC) and concentrate
grades (Fe %,Mn % SiO2, and SAT %) within all rock codes apart from the Overburden (11) and Basal
Silicates (61). The estimation strategy for these attributes is summarized below:
• Single Pass: A minimum of 1 and a maximum of 18 composites, using the Pass 4 search ellipse
ranges. Only exploration drill hole composites were used in the estimation of these attributes.
Finally, any remaining un-estimated blocks were assigned the average grade of the rock type for each grade
variable (pass 5).
Table 14.14 details search ellipse orientations by structural domain (structural domains were converted to
100 – 1400 to enable the concatenation of the estimation domains). Ranges and orientations of the ellipses
were determined from the orientation of structural domains (fold limbs), and the ranges observed in the
variograms. An example is shown in Figure 14.23, and search ellipses ranges are shown in Table 14.15.

Grade capping was applied for concentrate SiO2 and crude Mn % attributes, as summarised in Table 14.8.
No high-grade transition limits, or high-grade thresholds were applied during estimation.
Figure 14.23: Section 3197mE - Example of Pass 1 Search Ellipse Orientations and Structural
Domains

Table 14.14: Anisotropy Search Ellipsoid Orientations Presented by Structural Domain
Rotation
Structural Domain (GEMS ZXZ in Degrees)
Z X Z
100 0 30 0
200 0 65 0
300 -5 20 0
400 -10 -50 0
500 -10 0 0
600 -10 27 0
700 -10 -30 0
800 90 40 0
900 95 -25 0
1000 100 0 0
1100 115 50 0
1200 105 20 0
1300 110 -25 0
1400 90 0 0
Table 14.15: Search Ellipse Ranges by Pass
Search Ellipse Ranges

PASS
X Y Z
1 100 75 20
2 200 150 40
3 300 200 60
4 400 250 80
Weighted-averaging of estimated grades
As a “percentage” type block model was used during estimation, weighted average grades for each estimated
attribute were calculated for each block. The calculation used the various rock types present in each block
and their respective grades and percentages to calculate a final grade for each 20m x 20m x 12m block.
Weighted-average densities were also calculated in a similar fashion. These attributes will be used for final
Mineral Resource reporting.

Mineral Resource Classification
The CIM Definition Standards on Mineral Resources and Mineral Reserves, prepared by the CIM Standing
Committee on Resource Definitions and adopted by the CIM council on May 10th, 2014, provide standards
for the classification of Mineral Resources and Mineral Reserves estimates into various categories. The
category to which a Mineral Resource or Mineral Reserve estimate is assigned depends on the level of
confidence in the geological information available on the mineral deposit, the quality and quantity of data
available, the level of detail of the technical and economic information which has been generated about the
deposit, and the interpretation of that data and information. Under CIM definition standards:
• 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 or grade continuity. The estimate is based on limited information
and sampling gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes.
• 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 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 drill holes 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, and 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 drill holes that
are spaced closely enough to confirm both geological and grade continuity.
In addition, the classification of interpolated blocks was undertaken by considering the following criteria:
• Quality and reliability of drilling and sampling data;
• Distance between sample points (drilling density);
• Confidence in the geological interpretation;

• Continuity of the geological structures and the continuity of the grade within these structures;
• Variogram models and their related ranges (first and second structures);
• Statistics of the data population;
• Quality of assay data.
For the Scully Deposit, a preliminary Mineral Resource classification was produced utilising estimation pass,
where Pass 1 represents Measured Resources, Pass 2 represents Indicated Resources, and Pass 3
represents Inferred Resources. Pass 4 was reserved for potential future resources. This method considers
sample spacings, extrapolation of grades and the variogram ranges, and is a commonly applied method to
produce an appropriate Mineral Resource classification.
The preliminary classification resulted in generally cohesive zones of Measured and Indicated Mineral
Resources, however several areas showed an interspersion of classifications, which creates an irregular and
mismatched appearance (Figure 14.24, top image).
GMS developed a smoothing algorithm to produce more cohesive zones of Mineral Resource classifications.
For each block, an average of the pass attribute (PASS_WA) from the 6 surrounding blocks was calculated,
and is shown in Figure 14.24 (bottom image). The result was a cleaner, more continuous
Mineral Resource classification attribute (CLASS).

Figure 14.24: Section 3197me Showing Preliminary Mineral Resource Classification (Top) and
Smoothed Mineral Resource Classification (Bottom).
Block Model Estimation Validation
Every step of the block modelling process, including assay and composite database, topography, drill hole
location, down-hole survey, geology interpretation, geological coding, block model development and resource
estimation and classification, was reviewed to ensure fair representation of the available data in the Scully
resource model.
More specific validations were completed on the Scully block model including visual checks, global validations
(such as Q:Q plots, comparative statistics) and local validations (swath plots and blasthole reconciliation).

Visual Validation
The visual checks consisted of visualization of slices of the block model, mineralized zones, and exploration
drill hole and blast hole databases. The slicing was performed vertically on 76 m intervals and horizontally
on 12 m intervals (bench by bench). The composites were visually compared with the different model
attributes (rock types, grades) along the strike length of the deposit.
The ordinary kriged attributes Crude Fe %, Mn % and SAT % were found to be a good visual representation
of the drill hole composites, and are shown in Figure 14.25.
Statistical Validation
A statistical comparison between drill hole composites used in the interpolation and block grades was
performed to evaluate if samples used in the estimation are globally represented in the block model. The
inclusion of blast holes into the first estimation pass complicated the reconciliation of grade between the drill
hole composites and the block model grades. Declustering weights based on crude Fe % were applied to the
composites in an attempt for overcome the clustering of data caused by the blast holes.

Figure 14.25: Section 3653 - Block Grades Vs. Composite Grades for Crude Fe % (top), Mn %
(Middle) and SAT % (Bottom)

Table 14.16: Global Statistical Comparison Between Composites and Blocks for Measured and Indicated Blocks
Reduction in Coeff. Of
Composites Blocks % Change in Grade
Rock Variation % of Block
Code No. No. Model (M+I)
FE % MN % SAT % FE % MN % SAT % FE % MN % SAT %* FE MN SAT*
Obs** Obs
21* 31.57 0.54 6.27 1265 31.95 0.45 5.21 5957 1.2% -19.4% -20.3% -19% -5% -15% 3%
22 34.70 0.60 6.02 3190 34.65 0.62 4.70 8384 -0.2% 2.3% -28.2% -27% -64% 0% 4%
23* 31.74 0.70 5.16 6721 31.88 0.71 4.41 22230 0.4% 0.5% -16.9% -31% -37% -7% 10%
31 36.00 1.22 3.75 10940 35.88 1.23 2.95 25707 -0.4% 1.4% -27.1% -46% -45% -23% 11%
32 32.17 1.86 3.72 6170 32.20 1.95 3.43 15167 0.1% 4.8% -8.4% -31% -25% -31% 7%
33 37.92 1.62 5.02 19048 37.77 1.61 3.75 36270 -0.4% -0.4% -33.7% -35% -32% -15% 16%
34 36.58 1.53 7.36 12502 36.26 1.58 6.79 31343 -0.9% 2.8% -8.5% -35% -50% -18% 13%
51 34.51 2.89 6.22 5788 34.22 3.02 7.25 21639 -0.8% 4.2% 14.3% -50% -33% -26% 9%
52 31.92 1.43 4.86 6233 31.87 1.53 4.72 23810 -0.2% 6.2% -2.9% -41% -31% -19% 10%
53 35.73 3.06 6.31 10488 35.74 3.30 5.94 42092 0.0% 7.4% -6.1% -46% -28% -25% 18%

Global reproduction of the mean composite grades was achieved for crude Fe % and Mn %; however SAT %
was more problematic to reconcile. This is likely due to the influence of very high-magnetite zones skewing
the statistics in the blocks compared to the composites.
Concentrate grades were also compared, and global block grades were found to be within 10% of the
composite grades for each rock code.
Quantile: Quantile Plots
In addition to descriptive statistics, Q:Q plots were generated to assess the distribution of crude and
concentrate grades of composites against blocks on a rock code by rock code basis. These plots are useful
in assessing the degree of smoothing (conditional bias) observed during the grade estimation process, and
can identify any significant over/under estimation of grades.
Measured Resources were compared separately to Indicated Mineral Resources for crude Fe % and Mn %
due to the inclusion of blast hole composites into the estimation of Measured Mineral Resources. For the
remaining attributes, Measured and Indicated Mineral Resources were grouped to produce the Q:Q plots.
Examples of Q:Q plots for rock code 53 (the most significant contributor to future production) are shown in
Figure 14.26, Figure 14.27 and Figure 14.28.
Regarding crude Fe % grades, smoothing is present (and expected) in the Measured Resource due to the
dense spacing of the blast holes and the comparatively large search ellipse and variogram ranges resulting
in elevated levels of conditional bias. For Indicated and Inferred Mineral Resources, smoothing is observed
to a lesser extent, as the spatial configuration of composites to blocks is more typical of the distances
observed in the variogram models.

Figure 14.26: Q:Q Plot Comparing Crude Fe % Block Grades (X-Axis) and Composite Grades (Y-
Axis) for Measured Resources (Left) and Indicated + Inferred Resources (Right) for Rock Code 53
Regarding Mn %, smoothing is within acceptable limits, with good reproduction of grades at each end of the
distributions. A small positive bias exists in the blocks at lower crude Mn % grades.
Figure 14.27: Q:Q Plot Comparing Crude Mn % Block Grades (X-Axis) and Composite Grades (Y-
Axis) for Measured Resources (Left) and Indicated + Inferred Resources (Right) for Rock Code 53

Regarding crude SAT %, minimal conditional bias is observed, with excellent reproduction of the composite
distribution for rock code 53. No significant shift in mean grades were observed for any of the crude grades.
Figure 14.28: Q:Q Plot Comparing Crude SAT % Block Grades (X-Axis) and Composite Grades (Y-
Axis) for Combined Measured and Indicated Resources for Rock Code 53
Q:Q plots for concentrate grades were also compiled by rock code, and showed varying degrees of
smoothing due to the single-pass methodology adopted.
Local Statistical Validation – Swath Plots
The swath plot method is considered a local validation, which works as a visual mean to compare estimated
block grades against composite grades within a 3D moving window. In addition, it can identify possible bias
in the interpolation (i.e. over/under estimation of grades).
Swath plots were generated for all rock codes of the Upper, Middle and Lower Member, at increments of
76 m (Easting) for all crude and concentrate grades. Only blocks within Measured or Indicated classifications
were considered.
Peaks and lows in estimated grades should generally follow peaks and lows in composites grades in well
informed areas of the block model, whereas less informed areas can occasionally show some discrepancies
between the grades.

Figure 14.29 presents the results of the swath plots for the crude grades for rock code 53. Local reproduction
of grade is considered acceptable, and no significant bias is observed in any of the crude grades.
Swath plots were also produced for concentrate grades, and no issues were identified.
Figure 14.29: Swath Plots by Easting for Crude Fe % (Top), Mn % (Middle) and SAT % (Bottom) for
Measured and Indicated Mineral Resources Combined.


Blastholes Vs. Exploration Drill Holes Reconciliation
To assess the application of blastholes during the estimation process, GMS compared the average grade of
blastholes within each block against the interpolated grade using only the exploration drill holes. This method
is considered a reconciliation exercise between the two datasets (the blastholes representing “true grade” of
the block, and the interpolated grades from exploration drill holes representing the “predicted” grade). The
following steps were followed:
• Calculate the average grade of the blastholes for attributes Fe, Mn and WTREC that are spatially
contained within a given block (point to block transfer).
• Interpolate attributes Fe, Mn and WTREC using only the exploration drill holes on a rock code by rock
code basis. Calculate weighted average grades for each block using the rock code percentages.
• Produce scatter plots comparing the blasthole grades and the interpolated grades.
The results are shown in Figure 14.30.

Figure 14.30: Interpolated Block Grades from Exploration Drill Holes (X-Axis) Vs. Average Blasthole
Grades Within a Given Block (Y-Axis). Fe (Left), Mn (Right) and Weight Recovery (Bottom) with
Point Density Contours.
This validation was designed to assess how accurately the exploration drilling could predict the crude grades
of the blastholes. Fe and Mn % blasthole grades were reconciled with a relatively minor range of error,
however weight recovery proved more problematic to reconcile. Although no significant bias was observed,
the large range of error for WTREC could be due to local inaccuracies of geological interpretation, or non-
geological factors such as shaker table performance, grind size, etc.

Constrained Mineral Resources
Optimization Parameters
Before exporting the block model to the Whittle pit optimization software, each block was given a material
code, following different quality and location constraints. The standard requirements regarding the quality of
the material sent to the mill, which support the determination of these limits, are discussed in Mineral
Processing and Metallurgical Testing.
A Lerchs-Grossman open-pit shell was produced using Whittle and the same optimization parameters as
used for reserves except that all Mineral Resource categories were included in the optimization process and
a concentrate adjusted price of USD 79/dmt (CAD 101.8/t) was used (i.e. +USD 10/dmt compared to the
reserve price assumption).
Open-Pit Constrained Mineral Resource
The Measured and Indicated Mineral Resource for the Scully Deposit is estimated to 734 Mt at an average
grade of 34.6% Fe, and Inferred Mineral Resource to 237 Mt at an average grade of 34.1% Fe. presents the
resource estimation tabulation by category.

Table 14.17: Mineral Resources Estimate for the Scully Deposit at a 20% Fe Lower Cut-Off
Tonnage Fe SiO2 Mn Sat
Fe Mn SAT WTREC
Classification (dry) Conc. Conc. Conc. Conc.
kt % % % % % % % %
Measured 213,650 35.1 2.3 5.6 36.6 64.5 3.6 2.0 6.8
Indicated 520,760 34.3 2.4 5.8 35.4 63.5 3.8 2.5 7.7
Total M&I 734,410 34.6 2.4 5.7 35.7 63.8 3.8 2.4 7.4
Inferred 236,973 34.1 2.1 5.8 34.6 64.0 3.8 2.1 8.9
Notes on Mineral Resources:
1. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
2. The independent and qualified person for the 2017 Scully resource estimate, as defined by NI 43-101, is Réjean
Sirois, P. Eng., from G Mining. The effective date of the estimate is December 6th, 2017.
3. The Mineral Resources are estimated at a cut-off grade of 20% Fe.
4. The Mineral Resources are estimated using a long-term iron price of USD 79/dmt con (USD 70/dmt con for iron plus
a USD 9/dmt con adjustment for Fe content) with an exchange rate of 1.25CAD/USD.
5. The Mineral Resources are reported within an optimized Whittle shell based on Measured, Indicated and Inferred
categories.
6. “SAT” stands for Satmagan or Saturation Magnetization Analyser, an instrument which measures magnetite in ores.
7. “Conc.” Characteristics are result of shaker table testing and represent attributes of spiral concentrate prior to
magnetic separation upgrading.
8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty
that all or any part of the Mineral Resource will be converted into Mineral Reserves.
10. The concentrate grades stated in the table above are derived from the Wilfley shaking table process. These values
are only indicative of potential concentrate quality and will be affected by plant performance and any
modifications/enhancements such as the proposed manganese reduction circuit.
The Mineral Resources are reported within the conceptual open pit shell at a cut-off grade of 20% Fe
(Figure 14.31). The conceptual pit shell represents potentially extractable Mineral Resources in the
Measured, Indicated and Inferred categories using an iron ore concentrate price of USD 70/t (CAD 90.2/t)
plus a USD 9/t (CAD 11.6/t) adjustment for Fe content for a total of USD 79/t (CAD 101.8/t). In addition, only
rock codes 22, 31, 32, 33, 34, 51, 52 and 53 were included in the Mineral Resource.

Figure 14.31: 3D View Showing Fe % Grade Blocks Located Inside the USD 79/t Open Pit Whittle
Shell
Grade Sensitivity Analysis
The sensitivity of the block model estimates to the iron cut-off grade selection is illustrated in Figure 14.32 for
Measured and Indicated Mineral Resources, and in Figure 14.33 for Inferred Mineral Resources. Only
resources located within the USD 79/t (CAD 101.8/t) optimized pit shell were used for this analysis. Tonnage
quantities and iron grades are presented in Table 14.18 and Table 14.19 for cut-off grades ranging from 15%
to 40%.
The key point of inflection on the grade-tonnage curve is at a Fe % cut-off of 30%, where there is a large drop
in tonnage between 30% and 35% Fe.

Table 14.18: Grade and Tonnage Sensitivity to Cut-Off Grade (Measured and Indicated Resources)
Cut-Off Tonnage Mn SAT

Fe Mn SAT WTREC Fe Conc. SiO2 Conc
Grade Fe (dry) Conc. Conc.
% Mt % % % % % % % %
15% 737 34.5 2.4 5.7 35.7 63.7 3.7 2.4 7.4
20% 734 34.6 2.4 5.7 35.7 63.8 3.8 2.4 7.4
25% 726 34.7 2.4 5.7 35.9 64.0 3.8 2.4 7.4
30% 678 35.1 2.4 5.6 36.4 64.1 3.7 2.4 7.4
35% 351 37.1 2.5 4.8 39.1 64.3 3.7 2.4 6.2
40% 26 41.5 2.0 3.5 42.0 65.1 3.4 1.7 4.7
Table 14.19: Grade and Tonnage Sensitivity to Cut-Off Grade (Inferred Resources)
Cut-Off Tonnage Mn SAT

Fe Mn SAT WTREC Fe Conc. SiO2 Conc
Grade Fe (dry) Conc. Conc.
% Mt % % % % % % % %
15% 237 34.1 2.1 5.8 34.6 64.0 3.8 2.1 8.9
20% 237 34.1 2.1 5.8 34.6 64.0 3.8 2.1 8.9
25% 235 34.2 2.1 5.8 34.7 64.1 3.8 2.1 8.9
30% 214 34.8 2.2 5.5 35.4 64.3 3.8 2.2 8.4
35% 92 37.2 2.5 4.7 39.2 64.3 3.6 2.4 6.8
40% 9 41.7 1.6 4.3 43.0 65.1 3.8 1.5 6.2

Figure 14.32: Grade-Tonnage Curve, Measured and Indicated Resources Inside USD 79/t Open Pit
Optimized Shell
Figure 14.33: Grade-Tonnage Curve, Inferred Resources inside USD 79/t Open Pit Optimized Shell

15 MINERAL RESERVES ESTIMATE
Summary
The Mineral Reserve for the Tacora Mine is estimated at 443.7 Mt at an average grade of 34.83% Fe and
2.58% Mn as summarized in Table 15.1. The Mineral Reserve estimate was prepared by GMS. The
resource block model was also generated by GMS. The mine design and Mineral Reserve estimate have
been completed to a level appropriate for feasibility studies. The Mineral Reserve estimate stated herein is
consistent with the CIM definitions and is suitable for public reporting. As such, the Mineral Reserves are
based on Measured and Indicated (“M&I”) Mineral Resources and do not include any Inferred Mineral
Resources. The Inferred Mineral Resources contained within the mine design are treated as waste.

Mineral Reserves by Category Proven Probable Proven & Probable
1. The Mineral Reserves were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
2. Mineral Reserves based on February 2014 depletion surface merged with an updated Lidar dated September 2017.
3. Mineral Reserves are estimated at a cut-off grade of 27% weight recovery for all sub-units except sub-unit 52 which
is 30%. In addition, sub-unit 34 must have a ratio of weight recovery to iron of at least 1.
4. Mineral Reserves are estimated using a long-term iron price reference price (Platt’s 62%) of USD 60/dmt and an
exchange rate of 1.25 CAD/USD. An Fe concentrate price adjustment of USD 9/dmt was added as an iron grade
premium.

Resource Block Model
The resource block model was prepared by GMS in September 2017 where each lithological unit was
modelled with precision. The block model framework information is presented in Table 15.2. Average block
properties were calculated based on the weighting of the various units and a majority rock type was assigned
(Table 15.3). In addition to the modelled iron grade, other interpolated attributes include manganese,
magnetite, shaker table weight recovery, shaker table iron grade, shaker table silica grade, shaker table
manganese grade and shaker table magnetite grade. The shaker table results are used to predict plant
performance and plant concentrate grades with adjustments for the manganese reduction lines.
Table 15.2: Block Model Framework
Model Setting Value

X Origin 917
Y Origin 3,654
Z Origin 804
Block Size in X Direction 20
Block Size in Y Direction 20
Block Size in Z Direction 12
Number of Blocks in X Direction 350
Number of Blocks in Y Direction 240
Number of Blocks in Z Direction 85
Table 15.3: Weighted Average Block Model Attributes
Model Attributes Model Abbreviation

3
Weighted average density (t/m ) DENS_WA
Weighted average iron grade (%) FE_WA
Weighted average manganese grade (%) MN_WA
Weighted average magnetite content (%) SAT_WA
Weighted average shaker table weight recovery (%) WTREC_WA
Weighted average shaker table iron (%) FE_CONC_WA
Weighted average shaker table manganese (%) MN_CONC_WA
Weighted average shaker table silica (%) SI_CONC_WA
Weighted average magnetite (%) SAT_CONC_WA
Resource category PASS_FINAL

The Wabush Iron-Formation comprises five members as presented in Figure 15.1 totalling more than
300 meters in thickness through the centre of the Scully property. Two members have no iron content of
economic interest; the Middle Quartzite between the Lower and Middle Members and the Basal Silicates at
the bottom of the column. These units, along with the overlying overburden, are treated as waste units.
Figure 15.1: Wabush Iron Formation Stratigraphic Column
Block Model Geological

O/W
Code Formation
Unit 11 Overburden Waste
Sub-unit 21 Waste
Sub-unit 22 Upper Member Ore
Sub-unit 23 Waste
Sub-unit 31 Ore
Sub-unit 32 Ore
Middle Member
Sub-unit 33 Ore
Sub-unit 34 Ore
Unit 41 Middle Quartzite Waste
Sub-unit 51 Ore
Sub-unit 52 Lower Member Ore
Sub-unit 53 Ore
Unit 61 Basal Silicates Waste
The middle sub-unit of the Upper Member (sub-unit 22), the Middle Member and the Lower Member are
potential iron ore mostly in its oxide form as hematite (Fe2O3) and to a lesser extent as magnetite (Fe3O4).
The main gangue mineral in the iron formation is quartz or silica.
The weight recoveries in the ore units are variable and have been measured with a shaking table. The
shaking table results of drill samples have been interpolated in the block model and are used to estimate
the weight recoveries in the concentrator by applying a 90% scaling factor or derating factor to reflect actual
plant performance.

The objective is to produce a concentrate above 65% iron and a manganese grade of less than 2%.
Typically, a weight recovery of at least 25% is required to achieve the required product quality. The
magnetite content of the ore is tracked in the scheduling to limit the magnetite content to less than 10%.
Ore with high magnetite content is generally harder and therefore reduces the concentrator throughput.
Pit Optimization
Open pit optimization was conducted to determine the optimal economic shape of the open pit to guide the
pit design process. This task was undertaken using the Whittle software which is based on the Lerchs-
Grossmann algorithm. The method works on a block model of the ore body, and progressively constructs
lists of related blocks that should, or should not, be mined. The method uses the values of the blocks to
define a pit outline that has the highest possible total economic value, subject to the required pit slopes
defined as structure arcs in the software. This section describes all the parameters used to calculate block
values in Whittle.
For this Feasibility Study, Measured and Indicated Mineral Resource blocks were considered for
optimization purposes. However, sensitivities were run using the complete resource by including the Inferred
Mineral Resource blocks.
The pit optimization process was prevented from encroaching into existing nearby lakes by enforcing a hard
boundary constraint. A 120 m buffer was maintained with Little Wabush Lake on the east side and a 100 m
buffer with Long Lake on the west side. The rail right of way east of East pit is respected by preventing a
pushback of the pit wall.
Pit Slope Geotechnical Assessment
Golder was retained by Tacora to conduct a desktop data review, senior site visit and a pit slope design
evaluation to support this feasibility study. The recommendations from this study have been used as an
input to the pit optimization and design process.
15.3.1.1 Rock Mass Characterization
The rock mass can generally be described as moderately strong (UCS in the range of 40 to 70 MPa) and
of fair quality (GSI in the range of 30 to 60). It appears that no laboratory rock testing has been carried out
to confirm the intact rock strengths. The Piteau (2003) report indicates that field strength estimates were
made on cores collected during the drilling of hydrogeological wells in 2002. However, those values were

unavailable for review during the preparation of this report. Those values should be reviewed to confirm the
assumption used herein.
The rock mass is characterized by the deep penetrative weathering and oxidation of some iron bearing
units, causing the degradation of the hematite minerals into limonite (waste) and, consequently, the
reduction of the intact rock strength.
Large (site-scale) geological structures of the Wabush deposit consist of folds, contact zones (which may
exhibit poor rock mass quality or limonitic alteration) and bedding. A large sub-vertical, north-south trending
fault separates the East and East-East Pit areas from the West, West Pit Extension and South Pit areas
(i.e., at about 17000E). Based on differences in static water levels on either side of the fault, it is suggested
that this fault acts as a groundwater barrier.
Bedding is dominant throughout the Wabush deposit, tends to follow the folding anticlines and synclines,
and is a major control of the pit slope configuration. In addition to bedding, there are two major joint sets,
labelled bedding joints and cross-joints. These joint sets provide release planes for planar failure along the
bedding planes or ravelling of rock blocks from the bench face. The cross-joints strike approximately
orthogonal to bedding and dip steeply to sub-vertically, whereas the bedding joints strike approximately
parallel to bedding and dip approximately normal to bedding.
15.3.1.2 Previous Mining Experience at Wabush
At the mine closure, five open pits were in operation: West Pit Extension, West Pit, South Pit, East Pit West,
and East Pit East. West pit extension is the deepest pit, with a depth of 105 m below the Duley lake level,
located to the West.
No deep-seated rock mass failure was reported to have occurred on the up to 133 m high slopes (FW:
108 m at 30°/ 60 m at 35°; HW: 133 m at 40°/60 m at 52°). However, three multi-bench slope failures were
reported being kinematically controlled and following where bedding was undercut by the excavation.
Kinematic control observations:
• Where bedding was steeply dipping (i.e. > 45°) out of the slope, it was observed that undercutting of
bedding planes results in excessive back-break and the creation of unstable undercut blocks.
• Where bedding was dipping less than about 30° to 35° out of the slope, it was observed that
undercutting of bedding planes did not lead to widespread back-break of the bench faces. However,

undercutting slopes with bedding in this range of dip did result in a planar failure where the
unbenched slope with face at 65° was 35 m (115 ft) high. Slope water pressure on the basal failure
plane was a potential contributor to the instability, (Golder 2012).
Most of the footwall benches and many of the hanging wall benches are now filled by debris and provide
limited rockfall catchment area (Picture 15.1). It is inferred that the poor bench quality observed on site is
related to operational procedures. Implementing improved procedures could yield better quality benches.
Picture 15.1: West Pit North Slope
15.3.1.3 Stability Evaluations
For preliminary analysis, a minimum offset of 50 m from the toe of a waste dump to the crest of a hanging
wall slope with an height of 170 m and overall pit slope angles of 52° was kept. The results of limit equilibrium
2D analysis indicate that the waste dumps can be located at 50 m of the pit crest with no significant effect
on pit slope stability. This analysis has not been optimized.
There will be rock pillars located between the lakes and the Boot pit (to the west) and the East Pit East (to
the east). Slope stability analysis of the pit shells provided by GMS yielded factors of safety ≥ 1.3 for
assumed reasonable slope water conditions. Precedent experience at the operation indicates that active
dewatering will be required for production.

Bi-linear failures were evaluated for moderately to steeply dipping bedding. Factors of safety above 1.3 were
achieved for an assumed reasonable slope water condition that may require active dewatering to achieve.
Planar failure was evaluated for shallow dipping bedding between 25° and 35° with a bedding friction angle
of 30° and a cohesion of 15 kN based on back analysis of stable and unstable slopes (Golder 2012).
Analyses showed that:
• Where bedding is dipping less than 25°, an inter-ramp angle of 46° can be used for a slope up to
120 m high, for the cohesion that was assumed from the back-analysis and a range of slope water
levels in a tension crack and along the basal failure plane.
• Where bedding is dipping between 25° and 35°, the bench face angle can undercut bedding for a
12 m high (single) bench. However, it becomes marginally stable for a double 24 m bench, in
particular, if the phreatic surface is assumed to be elevated, daylighting on the slope face.
15.3.1.4 Slope Design Criteria
There do not appear to be any deep-seated or overall stability concerns with the slopes exposed to date.
However, the lack of catch-berms in most areas and the potential for bench scale instability that could be a
hazard to operations personnel indicate that modifications to the design and operating practices should be
explored and evaluated.
Slope designs are based on the dip of the bedding relative to the wall orientation.
• The maximum bench face angle will be 65° except on footwall with steeper dips, up to 70°.
• Catch-bench widths are based on Newfoundland and Labrador legislation, the modified Ritchie
formula (Ryan and Prior 2000) with additional width added for backbreak.
• For shallow dipping beds that are significantly flatter than the friction angle bench geometries
(Domain 1a) the achievable bench face angle is assumed limited to 65° due to assumed crest loss
on bedding and observed slope conditions.
• For bedding in the range of the friction angle of the beds (25° to 44°) the inter-ramp angle shall range
between 30° and 32° with single benching (12 m). In Domain 1b the achieved bench face angles is
assumed limited to 65° due to back-break on bedding at the crest. In Domain 2, steeper bedding,
the achieved bench face angle is assumed limited to 50° due to back-break on bedding at the crest.

• In Domain 1b the IRA is limited to 30° to control potential multi-bench planar failure on bedding,
triggered by the overcoming of the cohesion component of the bedding plane strength with increased
slope height and exacerbated by slope water.
• In Domain 2 the IRA is limited to 32° to control potential multi-bench planar failure on bedding. This
domain allows for uncertainty in the actual strength the bedding plane. It is like Domain 1b only for
slightly steeper bedding.
• In Domain 3, the bedding is dipping steeper than its strength, and bench face angles are equal to
the dip of the bed. Based on slope observations, achieved bench face angles can be steeper than
65°, up to 70°, where this conforms to bedding.
• Endwalls and hanging walls are assumed to behave like Domain 1a, based on slope observations.
The pit slope design criteria by slope domain is summarized in Table 15.4 and graphically in Figure 15.2.
Table 15.4: Pit Slope Design Criteria
Geotechnical Bench Face Bench Height Bench Width Inter-Ramp

Rock Slope Profiles Angle (deg.) (m) (m) Angle (deg.)
Domain 1 & end walls 65 24 12.0 46.0
Domain 2 50 12 9.1 32.0
Domain 3 Bedding dip 45⁰ 45 24 10.0 35.2

Figure 15.2: Final Pit Slope Geotechnical Domains
Source: Golder Associates Ltd.
Mining Dilution and Ore Loss
A mining dilution assessment was made by evaluating the number of contacts for blocks above an economic
cut-off grade (“COG”). The block contacts are then used to estimate a dilution skin around ore blocks
representing the expected dilution during mining. The dilution skin consists of 1.5 m of material in a north-
south direction (across strike) and 1.5 m in an east-west direction (along strike). The dilution is therefore
specific to the geometry of the ore body and the number of contacts between ore and waste.
For each mineralized block in the resource model a diluted grade and density are calculated by taking into
account the grade and density of the surrounding blocks.
For pit optimization in Whittle no mining dilution was applied but was subsequently estimated to estimate
Mineral Reserves and the final production schedule. This dilution estimate included in the Mineral Reserves
was estimated at around 3.4%. A 3% ore loss factor was applied.

Pit Optimization Parameters
A summary of the pit optimization parameters is presented in Table 15.5. It is important to note that the
parameters presented in this table may be different than the parameters used in subsequent sections of the
report. Table 15.5 represents the initial parameters at the onset of the study and were subsequently refined
as reflected in the final production schedules and economic evaluation. A reference iron ore price (Platt’s
62% CFR China) of USD 60/t (CAD 77.3/t) concentrate and an exchange rate of 1.25 CAD/USD. A price
adjustment of USD 3/t (CAD 3.9/t) per 1% iron was applied (i.e. USD 9/t for a 65% iron concentrate). The
iron ore price assumption is deemed conservative with respect to long-term forecasts.
The plant weight recovery is based on the shaker table weight recovery with a 95% iron recovery applied
for the manganese reduction lines. The plant weight recovery is adjusted for a target 65% iron concentrate.
Subsequently developed weight recovery and concentrate grade relationships were established and used
to develop the final production schedule.
The total logistics cost, including rail transport from mine to Pointe-Noire port, port handling and ocean
freight to China, is estimated at CAD 36.34/t and is deducted to estimate an FOB Tacora Mine site
concentrate price of CAD 49.91/t.
Unit reference mining costs are used for a “reference mining block” located near the pit crest or surface and
are incremented with depth which corresponds to the additional cycle time and resulting incremental hauling
cost. The reference waste mining cost is estimated at CAD 2.20/t with an incremental depth factor of
CAD 0.024/t per 12 m bench. The reference ore mining cost is slightly different for the various pit sectors
due to the distance to the primary crusher. The reference ore mining cost ranges from CAD 2.38/t to
CAD 2.50/t.
The overall slope angles utilized in Whittle are based on the inter-ramp angles recommended from Golder
Associate’s pit slope study with provisions for ramps and geotechnical berms. The overall slope angles
range from 28 to 42 degrees.

Table 15.5: Pit Optimization Parameters
Optimization Parameters Values

Mining dilution % 0%
Mining recovery % 97%
Royalty % 0%
Weight recovery (crude to concentrate) % 35.4% avg.
Revenues
Concentrate iron grade % Fe 65.0%
Concentrate moisture content % 0%
Reference price (Platt's 62%) USD/dmt con. 60.00
Fe concentrate price adj. (65% Fe) USD/dmt con. 9.00
Concentrate adjusted price CFR China USD/dmt con. 69.00
Concentrate adjusted price CFR China USD/dmtu 106.15
Exchange rate CAD/USD 1.25
Concentrate adjusted price CFR China CAD/dmt con. 86.25
Rail transportation & Port (Tacora to Pointe-Noire Port) CAD/dmt con. 16.10
Ocean freight (Pointe-Noire to China) CAD/dmt con. 20.24
Total concentrate logistics costs CAD/dmt con. 36.34
Concentrate adjusted price FOB Tacora Mine CAD/dmt con. 49.91
Ore Based Costs
Processing cost CAD/dmt ore 3.81
G&A costs CAD/dmt ore 2.25
Total ore based cost CAD/dmt ore 6.06
Mining Costs & Parameters
Reference waste mining cost CAD/dmt mined 2.20
Reference ore mining cost Boot Pit CAD/dmt mined 2.50
Reference ore mining cost West Pit (North & South) CAD/dmt mined 2.43
Reference ore mining cost West Pit, East Pit, South Pit CAD/dmt mined 2.38
Incremental bench cost CAD/t/12 m 0.024
Reference elevation RL 600
Open Pit Optimization Results
The Whittle nested shell results are presented in Table 15.6 using only the Measured and Indicated (“M&I”)
resource and in Table 15.7 with complete resource including the Inferred (“MII”). The MII optimization results

are generated for resource reporting purposes. The nested shells are generated by using revenue factors
to scale up and down from the base case selling price.
Table 15.6: M&I Whittle Shell Results
Pit Rev. Iron Total Ore Fe Strip Con.

Shell Factor Price (kt) (kt) % Ratio (kt)
1 0.60 41 192 185 41.2 0.04 106
2 0.62 43 2,263 2,076 40.5 0.09 1,097
3 0.64 44 7,777 7,221 38.4 0.08 3,549
4 0.66 46 22,536 21,005 37.1 0.07 9,530
5 0.68 47 48,934 45,039 36.5 0.09 19,239
6 0.70 48 102,740 91,021 36.0 0.13 36,822
7 0.72 50 244,342 195,367 35.7 0.25 75,903
8 0.74 51 349,144 269,434 35.6 0.30 102,285
9 0.76 52 446,641 330,674 35.4 0.35 123,789
10 0.78 54 532,350 379,930 35.4 0.40 140,683
11 0.80 55 597,903 414,196 35.4 0.44 152,240
12 0.82 57 677,256 446,922 35.4 0.52 163,927
13 0.84 58 744,064 472,582 35.4 0.57 172,984
14 0.86 59 775,392 483,266 35.4 0.60 176,810
15 0.88 61 806,833 494,295 35.4 0.63 180,524
16 0.90 62 844,789 506,105 35.3 0.67 184,597
17 0.92 63 872,312 514,579 35.3 0.70 187,401
18 0.94 65 897,080 521,515 35.3 0.72 189,743
19 0.96 66 925,219 528,812 35.3 0.75 192,219
20 0.98 68 947,946 534,579 35.3 0.77 194,118
21 1.00 69 967,231 538,957 35.3 0.79 195,622
22 1.02 70 975,657 540,810 35.3 0.80 196,250
23 1.04 72 995,982 545,155 35.3 0.83 197,705
24 1.06 73 1,015,324 548,966 35.3 0.85 199,004
25 1.08 75 1,020,850 549,987 35.3 0.86 199,350
26 1.10 76 1,027,485 551,199 35.3 0.86 199,755
27 1.12 77 1,055,505 555,608 35.3 0.90 201,349
28 1.14 79 1,061,773 556,648 35.3 0.91 201,699
29 1.16 80 1,064,683 557,129 35.3 0.91 201,861
30 1.18 81 1,069,887 557,883 35.3 0.92 202,129
31 1.20 83 1,074,563 558,541 35.3 0.92 202,361
*Concentrate calculated at 65% Fe concentrate grade

Table 15.7: MII Whittle Shell Results
Pit Rev. Iron Total Ore Fe Strip Con.

Shell Factor Price (kt) (kt) % Ratio (kt)
1 0.60 47 192 185 41.2 0.04 106
2 0.62 49 2,263 2,076 40.5 0.09 1,097
3 0.64 51 8,106 7,540 38.5 0.08 3,699
4 0.66 52 24,464 22,855 37.1 0.07 10,336
5 0.68 54 56,838 51,871 36.6 0.10 22,106
6 0.70 55 120,926 105,912 36.1 0.14 42,851
7 0.72 57 280,901 224,437 35.7 0.25 87,231
8 0.74 58 426,963 325,420 35.5 0.31 123,527
9 0.76 60 560,773 409,467 35.5 0.37 153,236
10 0.78 62 698,448 485,871 35.4 0.44 179,782
11 0.80 63 852,961 561,122 35.4 0.52 206,131
12 0.82 65 918,108 590,998 35.4 0.55 216,299
13 0.84 66 966,126 610,757 35.3 0.58 223,029
14 0.86 68 1,061,353 645,621 35.3 0.64 234,984
15 0.88 70 1,113,057 664,654 35.2 0.67 241,250
16 0.90 71 1,181,275 687,332 35.2 0.72 248,774
17 0.92 73 1,218,252 698,727 35.2 0.74 252,591
18 0.94 74 1,245,722 706,227 35.2 0.76 255,170
19 0.96 76 1,285,919 716,751 35.2 0.79 258,794
20 0.98 77 1,322,665 726,174 35.2 0.82 261,947
21 1.00 79 1,344,233 731,398 35.2 0.84 263,688
22 1.02 81 1,350,469 732,753 35.2 0.84 264,154
23 1.04 82 1,360,028 734,857 35.2 0.85 264,851
24 1.06 84 1,375,643 738,196 35.2 0.86 265,949
25 1.08 85 1,399,026 742,899 35.2 0.88 267,512
26 1.10 87 1,410,754 744,957 35.2 0.89 268,237
27 1.12 88 1,415,611 745,882 35.2 0.90 268,534
28 1.14 90 1,419,743 746,548 35.2 0.90 268,767
29 1.16 92 1,423,990 747,263 35.2 0.91 269,002
30 1.18 93 1,425,704 747,569 35.2 0.91 269,098
31 1.20 95 1,429,591 748,237 35.2 0.91 269,304
*Concentrate calculated at 65% Fe concentrate grade
Pit by pit results are generated with the nested shells based on three mining approaches to estimate the net
present value (“NPV”) of operating cash flow discounted at 8%. A schematic of these approaches is
presented in Figure 15.3.

The worst case is based on mining a given pit shell bench by bench from the top down. It is referred to as
the “worst case” as it produces the lowest NPV; however, it has the advantage of almost always being
practical.
The best case is based on mining each nested shell one by one up to the final shell. This is referred to as
the “best case” because it produces the highest NPV. It is almost never practical but provides a theoretical
maximum value to aim for through practical phasing approaches. The difference with the worst case gives
an indication of the value to be generated by phasing the pit.
The specified case is generated by imposing a more practical phasing approach and provides a more
realistic target and phasing evaluation for the pit. In the present case, a two-phase approach was evaluated.
The pushback chooser module in Whittle evaluates which combination of nested shells can produce the
highest NPV.
Pit shell 13 is selected from the M&I optimizations as the optimum final pit shell which corresponds to a
USD 58/t (CAD 72.5/t) pit shell (Revenue Factor 0.84). This shell selection aims to maximize the discounted
operating cash flow of the project. Shell 13 has a total tonnage of 744 Mt including 472 Mt of ore at an
average grade of 35.4% Fe.

Figure 15.3: Schematic Representation of Three Mining Schedule Configurations:

(a) Worst-Case Mining Schedule; (b) Best-Case Mining Schedule; and (c) Intermediate Mining
Schedule
Source: Whittle

Table 15.8: M&I Pit by Pit Results
Best Case Specified Worst Case Ore Waste Strip

Pit Disc. @ 8% Disc. @ 8% Disc. @ 8% Tonnage Tonnage Ratio
Shell (M CAD) (M CAD) (M CAD) (kt) (kt) (W:O)
1 4 4 4 185 7 0.04
2 36 36 36 2,084 179 0.09
3 110 110 110 7,245 532 0.07
4 270 270 270 21,097 1,439 0.07
5 491 490 489 45,131 3,804 0.08
6 810 804 802 91,118 11,622 0.13
7 1,281 1,253 1,245 195,487 48,855 0.25
8 1,475 1,427 1,411 269,565 79,579 0.30
9 1,583 1,519 1,495 330,817 115,824 0.35
10 1,644 1,566 1,531 380,077 152,273 0.40
11 1,676 1,584 1,542 414,391 183,512 0.44
12 1,700 1,593 1,540 447,117 230,139 0.51
13 1,714 1,593 1,528 472,823 271,241 0.57
14 1,719 1,591 1,522 483,523 291,870 0.60
15 1,723 1,588 1,514 494,568 312,266 0.63
16 1,726 1,584 1,503 506,392 338,397 0.67
17 1,728 1,580 1,496 515,042 357,270 0.69
18 1,729 1,574 1,487 521,994 375,086 0.72
19 1,730 1,568 1,479 529,322 395,897 0.75
20 1,730 1,562 1,467 535,342 412,604 0.77
21 1,730 1,557 1,459 539,780 427,452 0.79
22 1,730 1,555 1,456 541,661 433,996 0.80
23 1,730 1,548 1,443 546,006 449,976 0.82
24 1,730 1,541 1,431 549,817 465,507 0.85
25 1,730 1,539 1,426 550,838 470,011 0.85
26 1,729 1,536 1,419 552,050 475,435 0.86
27 1,729 1,522 1,399 556,460 499,045 0.90
28 1,728 1,519 1,392 557,499 504,274 0.90
29 1,728 1,518 1,390 557,981 506,702 0.91
30 1,728 1,516 1,387 558,778 511,110 0.91
31 1,728 1,513 1,383 559,436 515,126 0.92

Table 15.9: MII Pit by Pit Results
Best Case Specified Worst Case Ore Waste Strip

Disc. @
Pit Disc. @ 8% Disc. @ 8% Tonnage Tonnage Ratio
8%
Shell (M CAD) (M CAD) (M CAD) (kt) (kt) (W:O)
1 4 4 4 185 7 0.04
2 36 36 36 2,084 179 0.09
3 114 114 114 7,564 542 0.07
4 290 290 290 22,964 1,500 0.07
5 553 552 551 51,976 4,863 0.09
6 909 901 899 106,010 14,916 0.14
7 1,390 1,358 1,347 224,558 56,343 0.25
8 1,607 1,552 1,531 325,571 101,392 0.31
9 1,716 1,639 1,607 409,643 151,131 0.37
10 1,776 1,678 1,632 486,109 212,339 0.44
11 1,813 1,693 1,629 561,903 291,058 0.52
12 1,823 1,690 1,615 592,123 325,985 0.55
13 1,829 1,685 1,602 612,162 353,964 0.58
14 1,835 1,675 1,583 647,101 414,251 0.64
15 1,838 1,670 1,569 666,283 446,774 0.67
16 1,840 1,656 1,543 689,079 492,196 0.71
17 1,841 1,650 1,534 700,518 517,734 0.74
18 1,842 1,644 1,526 708,316 537,406 0.76
19 1,842 1,638 1,516 718,929 566,990 0.79
20 1,842 1,632 1,502 728,473 594,191 0.82
21 1,842 1,627 1,492 734,114 610,119 0.83
22 1,842 1,626 1,489 735,498 614,972 0.84
23 1,842 1,623 1,482 737,676 622,352 0.84
24 1,842 1,619 1,473 741,014 634,628 0.86
25 1,842 1,613 1,464 745,718 653,309 0.88
26 1,842 1,610 1,457 747,776 662,978 0.89
27 1,842 1,608 1,454 748,701 666,909 0.89
28 1,842 1,606 1,451 749,427 670,317 0.89
29 1,842 1,605 1,448 750,156 673,834 0.90
30 1,842 1,604 1,447 750,521 675,183 0.90
31 1,842 1,603 1,445 751,249 678,343 0.90

Figure 15.4: M&I Pit by Pit Graph
1,200,000 2,000
Selected Shell 13 1,800
1,000,000
1,600
Disc. Cash Flow @ 8% (M$)

1,400
800,000
1,200
Tonnage (kt)
600,000 1,000
800
400,000
600
400
200,000
200
0 0
1 5 9 13 17 21 25 29
Pit Shell
Ore Tonnage Wst Tonnage Best Case DCF
Spec. Case DCF Worst Case DCF
Figure 15.5: MII Pit by Pit Graph
1,600,000 2,000
1,800
1,400,000
1,600
1,200,000
1,400
Disc. Cash Flow @ 8% (M$)

1,000,000
1,200
Tonnage (kt)
800,000 1,000
800
600,000
600
400,000
400
200,000
200
0 0
1 5 9 13 17 21 25 29
Pit Shell
Ore Tonnage Wst Tonnage Best Case DCF
Spec. Case DCF Worst Case DCF

Mine Design
Slope Design Criteria
The final pit was designed using a single bench configuration for Domain 3 wall and double benching
configuration for other domains to a final height of 24 m. The pit slope profile is based on recommendations
by Golder as presented in Section 15.3.1. The slope profile is based on recommended batter angles with
catch bench width recommendations for an inter-ramp angle ranging from 32 to 46 degrees. A 20 m
geotechnical berm is introduced every 120 m or four double-benches where ramp segments do not pass in
the slope to reduce the vertical stack height.
Most of the open pit surface has already been stripped from past operations but some overburden tonnage
remains to be mined. Some portions of the waste rock dumps are mined to allow for the pushbacks and is
reported as overburden.
Ramp Design Criteria
The ramps and haul roads are designed for the largest equipment being a 240-tonne (211 tonne) class haul
trucks with an operating width of 7.3 m. For double lane traffic, industry best-practice is to design a haul
road of at least 3.5 times the width of the largest vehicle, in this case, at least 25 m. Ramp gradients are
designed at 10%.
A shoulder barrier or safety berm on the outside edge will be constructed of crushed rock to a height equal
to the rolling radius of the largest tire using the ramp. The rolling radius of the truck tire is 1.8 m. These
shoulder barriers are required wherever a drop-off greater than 3 m exists and will be designed at 1.1H:1V.
A ditch planned on the highwall will capture run-off from the pit wall surface and manage snow removal. The
ditch will be 3.7 m wide on the highwall side and 2.7 m wide on the berm side; to facilitate drainage of the
roadway, a 2% cross slope on the ramp is planned.
The double lane ramp width is 36.6 m wide (Figure 15.6) and the single lane ramp is 19.7 m wide
(Figure 15.7). Single lane ramps are introduced in the pit bottom when the benches start narrowing and
when the mining rates will be significantly reduced.

Figure 15.6: Double Lane Ramp Profile Design
Author: Etienne Bernier

Double Lane Ramp Profile Design
Date: October 2017
Figure 15.7: Single Lane Ramp Profile Design

Single Lane Ramp Profile Design
Date: October 2017
Figure 15.8: Mine Haulage Roads

Mine Haulage Roads
Date: October 2017

Open Pit Mine Design Results
The starting status map is presented in Figure 15.9 and the final pit design in Figure 15.10. The final pit is
divided into pit sectors according to historical designations. These sectors are subdivided as separate mining
phases for subsequent scheduling.
The pit sectors include the following:
• East Pit East;
• Eat Pit West;
• West Pit;
• West Pit Extension South;
• West Pit Extension North;
• South Pit;
• Boot Pit.
The final pit layout was designed with the current pit status map taken into consideration with respect to ramp
entrances and road networks in order to keep the primary crusher accessible as well as access to waste
dump locations. It is planned to have in-pit waste dumping in East Pit West and in the West Pit Extension.
The pushbacks to existing pits allowed for a mining width of 80 m with some narrower areas at 60 m. The
Boot Pit is a new pit that was never mined historically but was partially stripped of overburden.
The final pit design closely follows the guiding Whittle shell as presented in Figure 15.11 and Figure 15.12.

Figure 15.9: Tacora Mine Status Map & Lidar
Boot Pit
East Pit East
South Pit

Tacora Mine Status Map & Lidar
Date: October 2017

Figure 15.10: : Tacora Mine Final Pit Design
Boot Pit
West Pit Ext. North East Pit East
Legend:
Grey = Topo South Pit
Red = Toe Line
Blue = Crest Line

Tacora Mine Final Pit Design
Date: October 2017

Figure 15.11: Final Pit Design vs. Whittle Shell
Legend:
Pink = Design
Green = Shell

Final Pit Design vs. Whittle Shell
Date: October 2017

Figure 15.12: Final Pit Design vs. Whittle Shell Section View
700 Y
600 Y South Pit

500 Y
400 Y
West Pit
300 Y
200 Y
1000 X
1100 X
1200 X
1300 X
1400 X
1500 X
1600 X
1700 X
1800 X
1900 X
2000 X
2100 X
2200 X
2300 X
100 X
200 X
300 X
400 X
500 X
600 X
700 X
800 X
900 X
0X
100 Y
Legend:
Grey = Topo
Pink = Design
Green = Shell
Author: LP Gignac
Final Pit Design vs. Whittle Shell Section View
Date: October 2017

Mineral Reserve Statement
The Mineral Reserve and stripping estimates are based on the final pit design presented in the previous
section. The Proven and Probable Mineral Reserves are inclusive of mining dilution and ore loss. The total
ore tonnage before dilution and ore loss is estimated at 442 Mt at an average grade of 34.94% Fe and
2.61% Mn. The dilution envelope around the remaining ore blocks results in a dilution tonnage of 15.2 Mt at
an average grade of 31.75% Fe and 1.92% Mn.
The dilution tonnage represents 3.4% of the ore tonnage before dilution and the dilution grade is estimated
from the block model and corresponds to the average grade of the dilution skin. Table 15.10 presents a
Mineral Resource to Mineral Reserve reconciliation.
Table 15.10: Resource to Reserve Reconciliation
Tonnage Grade Grade

Resource to Reserve Reconciliation
(kt) (Fe %) (Mn %)
Ore before dilution & mine recovery 442,158 34.94 2.61
Add: Mining dilution (3.4%) 15,237 31.75 1.92
Less: Mining loss (3.0%) (13,722) 34.83 2.58
P&P Mineral Reserve 443,672 34.83 2.58
The Proven and Probable Mineral Reserves total 443.7 Mt at an average grade of 34.83% Fe and 2.58% Mn
(Table 15.12). The total tonnage to be mined is estimated at 831.3 Mt for an average strip ratio of 0.87 which
includes overburden.
The Proven and Probable Mineral Reserve by stratigraphic sub-unit is presented in Table 15.11.
Approximately 40% of the ore tonnage is from sub-unit 53 which has a high manganese content of 3.51%.
The upper member (sub-unit 22) represents 6% of the reserve; the middle member (sub-units 31 to 34)
represent 32% of the reserve; and the lower member (sub-units 51, 52 and 53) represent 62% of the Mineral
Reserve.

Table 15.11: Proven & Probable Reserve by Sub-Unit
Proven & Probable

Sub-Unit
Ore (kt) % % Fe % Mn % SAT
22 25,372 6% 33.62 0.70 4.47
31 37,991 9% 35.10 1.50 2.96
32 17,820 4% 33.63 1.87 2.73
33 75,094 17% 36.67 1.71 4.43
34 10,542 2% 35.29 2.20 6.82
51 61,918 14% 32.67 3.14 6.94
52 39,611 9% 32.88 1.96 6.89
53 175,326 40% 35.47 3.51 5.86
Total 443,672 100% 34.83 2.58 5.43


Proven &
Mineral Reserves by Category Proven Probable
Probable

1. The Mineral Reserves were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
Standards for Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing
Committee on Reserve Definitions and adopted by CIM Council May 10th, 2014.
2. Mineral Reserves based on February 2014 depletion surface merged with an updated Lidar dated September 2017.
3. Mineral Reserves are estimated at a cut-off grade of 27% weight recovery for all sub-units except sub-unit 52 which
is 30%. In addition, sub-unit 34 must have a ratio of weight recovery to iron of at least 1.
4. Mineral Reserves are estimated using a long-term iron price reference price (Platt’s 62%) of USD 60/dmt and an
exchange rate of 1.25 CAD/USD. An Fe concentrate price adjustment of USD 9/dmt was added as an iron grade
premium.
8. The number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to
rounding effects; rounding followed the recommendations in NI 43-101.

16 MINING METHODS
Introduction
GMS was mandated by Tacora to prepare a feasibility level mining study and Mineral Reserve estimate for
the Project.
The mine was previously owned by Cliffs until it and was closed and placed on care in maintenance in
February 2014. Since this time the pumps have been removed and the open pits have filled with water from
surface and groundwater inflows. The remaining Mineral Reserves are mined from pushbacks around the
existing open pits and from the deepening of certain pit areas. The restart of operations is initially focused on
mining pushbacks on upper levels which will provide time for dewatering operations to lower water levels in
due course.
The operation consists of a conventional surface mining method using an owner mining approach with electric
and diesel hydraulic shovels, mine trucks and electric drills. Tacora has purchased the loading and drilling
fleet in anticipation of the restart. However, mine trucks and support equipment are required prior to restart
of operations.
The mine study consists of resizing the open pit based on parameters outlined in this section and producing
a LOM plan that targets a production rate of about 6 Mt per year of iron ore concentrate.
Mine Designs
Open Pit Phases
Mining of the Tacora open pit is planned with seven pit sectors referred to as Boot Pit, West Pit Extension
North, West Pit Extension South, West Pit, South Pit, East Pit West and East Pit East. The tonnages
associated with each mining sector are summarized in Table 16.1 and are presented in Figure 16.1. Mining
has taken place in all of these pit sectors except for Boot Pit which was in the Cliffs LOM plan and only initial
efforts to strip overburden and prepare production benches had been undertaken.
The largest pit sector in terms of tonnage with 200 Mt of combined ore and waste is the West Pit which has
a low strip ratio of 0.64. The West Pit is the deepest section with a pit floor at elevation 444 for pit wall height
of 200 m. The West Pit Extension North is the smallest phase with 32 Mt and the highest strip ratio of 2.97
which results from maintaining sufficient mining for the pushback.

The pit area measures approximately 5.4 km in an east-west direction and is approximately 2.1 km north-
south in relation to the South Pit.
The final pit contains 443.7 Mt of ore at an average grade of 34.83% Fe, 2.58% Mn and 4.74 % SAT. This
mineral reserve is sufficient for a 26 year mine life with possibilities for expansion at higher iron ore prices
and the conversion of inferred resources to measured and indicated. A total of 831.5 Mt is to be mined for an
overall strip ratio of 0.87:1.
Table 16.1: Pit Design Summary by Sector
Pit Ore Crude Ore Grades Waste S.R. Total

Sector (kt) % Fe % Mn % SAT (kt) (W:O) (kt)
Boot Pit 38,302 35.37 2.32 1.47 27,140 0.71 65,443
West Pit Ext. North 8,159 34.76 3.09 1.83 24,299 2.98 32,458
West Pit Ext. South 74,886 34.30 3.62 9.81 32,644 0.44 107,529
West Pit 121,837 35.03 3.17 4.24 78,375 0.64 200,212
South Pit 76,190 34.20 2.00 7.72 88,240 1.16 164,430
East Pit West 86,018 35.28 1.89 2.62 86,307 1.00 172,325
East Pit East 38,280 35.00 1.59 6.82 50,714 1.32 88,994
Total 443,672 34.83 2.58 5.43 387,719 0.87 831,391
Note: Ore tonnage and grades inclusive of dilution

Figure 16.1: Final Pit Design
Boot Pit
West Pit Ext. North

East Pit East
Legend:
Grey = Topo
Red = Toe Line
Blue = Crest Line South Pit

Tacora Mine Final Pit Design
Date: November 2017

The pit design slope profiles adhere to recommendations generated by Golder Associates according to three
main profiles as summarized in Table 16.2. The inter-ramp angles vary from 46 to 32.0 degrees based on a
final 12 to 24m bench height. The third domain recommendation varies with the dip of the ore body, ranging
from 35.2 to 52deg IRA. It was set to a bedding dip of 50 deg across the domain at 38.5deg IRA. This
assumption simplifies the design, which in turn becomes more feasible. Also, with the IRA for a bedding dip
50deg at the lower end of the domain, the design becomes more conservative, thus more robust without
compromising significant value.
The pit slope profile has a geotechnical catch bench every 120 m of vertical stack height. This geotechnical
catch bench mitigates risks from overbank hazards on the pit wall. Overbank hazards result from muck that
spills down the slope of the previous pit phase filling the catch benches. The design allows the catch bench
to be accessed to remove debris.
Table 16.2: Pit Phase Design Criteria
Geotechnical
Domain 1 Domain 2 Domain 3
Pit Design Profiles
Vertical bench height (m) 24 12 24
Bench face angle (deg.) 65 50 50
Avg. Catch berm width (m) 12 9.1 10
Inter-ramp angle (deg.) 46 32 38.5
Ramp width (m) 36.6 36.6 36.6
Overall slope angle (deg.) 38.2 27.7 32.7

Figure 16.2: Geotechnical Bench Slope Design Recommendations
Overburden and Waste Rock Storage
A total of 388 Mt of waste material is mined throughout the life of mine. At least 230 Mt has to be stored in
waste dumps outside the pits. Waste rock storage is planned in depleted pits and in conventional waste
storage area (dumps) outside of pits. In the early years of the project, waste material will be stored to the
south of the pits, on waste dumps South and South West and inside the West Extension in-pit dump. Later,
as the project expands to the East, the North Dump becomes active. Once the East Pit West is depleted,
waste material is stored in this pit allowing for lower haulage costs and a reduced environmental impact. The
North West dump is used for waste rock coming from West Pit extension North and Boot Pit in the later years
of the project.
The waste dumps located outside of the pits are mostly designed above historic waste storage locations. The
new waste dumps are built in 12 m stacks with 14 m catch benches allowing for rehabilitation when filled to
maximum capacity. A 40 m distance was kept from the base of the new waste dumps to the limit of the historic

ones upon which they are built. This distance was kept to allow for drainage infrastructures around the new
waste dumps.
Waste dump design and location are presented in Figure 16.3. Waste dump metrics are presented in
Table 16.3 and Table 16.4.
Table 16.3: Waste Storage Capacities
Capacity Capacity Surface

Waste Dump % Filled
(Mt) (M m3) Area (ha)
South West Dump 82.1 38.1 770.0 100%
South Dump 43.4 20.1 834.6 80%
North Dump 76.6 35.5 760.0 100%
North West Dump 51.5 23.9 703.9 100%
West Extension In-Pit Dump 72.6 33.7 558.0 100%
East Pit West In-Pit Dump 70.4 32.7 570.7 100%
Total 396.7 184.2 4,197.2 98%
Table 16.4: Waste Pile Design Criteria
Avg. Catch Pile Face Overall

Approximate
Waste Dump Bench Angle Slope angle
Height (m)
Width (m) (deg) (H:V)
South West Dump 14 35 2.5:1 60
South Dump 14 35 2.5:1 60
North Dump 14 35 2.5:1 60
North West Dump 14 35 2.5:1 72
West Extension In-Pit Dump 14 35 2.5:1 72
East Pit West In-Pit Dump 14 35 2.5:1 84

Figure 16.3: Waste Storage Dumps
NW Dump North Dump
West Ext.
East Pit West

in-pit Dump
SW Dump
South Dump
Author: G Mining
Waste Storage Dumps
Date: November 2017
Overburden was not included in this study as most of the overburden present on site was removed in previous
operations. It will be important, once in operation, to closely monitor the presence of overburden. If and when
found, it will have to be stored in a specific location to be re-used when rehabilitation of the site is performed.
Throughout the LOM, 1.1 Mt of waste rock will be required for aggregate requirements throughout the mine
life.

Ore Stockpiles
Ore stockpiles are located close to the crusher location (to the East). The stockpile location has an
approximate 11.0 Mt capacity. Stockpiling exceeds 11.0 Mt towards the middle of the mine life to help feeding
the mill while complying to the different constraints
The stockpile design criteria are presented in Table 16.5. The area used for stockpiling has more capacity
thus allowing for the creation of multiple stockpiles with different ore characteristics to simplify rehandling and
blending activities.
Table 16.5: Stockpile Design Criteria
Catch Bench Pile Face Overall Approximate Max

Ore Stockpile Characteristics Width Angle Slope Angle Height Capacity
(m) (deg) (H:V) (m) (Mt)
Stockpile at max. capacity 14 35 2.5:1 30 11.0
Mine Haul Roads
Most of the haul roads are already existing. However, adjustments and additional roads are required to
access the new waste storage locations and accommodate the new pit exit locations. Mine haul road profiles
are presented in Table 16.6.
Haul road 1 is the longest road to build. It will link all the southern infrastructures (dumps and pits) to the
crusher. An offset of 60 m was kept between the pit rim and railways where applicable. This offset allows for
the construction of the 41 m wide haul road and a service road. The cost for building the road was calculated
based on a cut & fill analysis performed in AutoCAD.
Haul Road 2 & 4 require work on historic waste dumps. If built in the warmer months of the year, they will
require much less work as waste material can more easily be pushed.
Haul Road 3 is simply a by-pass from the north of the west extension to the south. It will allow for a much
shorter haul path to the crusher for material coming from West extension North and Boot.

Table 16.6: Haul Road Segments
Haul Road
Length (m)
Segment Number
Mine Road 1 4,120
Mine Road 1.1 1,225
Mine Road 2 727
Mine Road 2.1 689
Mine Road 3 473
Mine Road 4 419
Production Schedule
Production Schedule Optimization
The LOM schedule was optimized using Minemax Scheduler software to maximize the project value
according to various constraints and to achieve various blending constraints. The optimal schedule guided
the detailed schedule presented hereafter. The optimization was based on the pit sectors established for the
pit and related mineral reserves.
Mine Production Schedule
The mine production schedule is completed on a quarterly basis during the pre-production period and first
year of commercial production and on an annual basis thereafter. The mine pre-production is initiated in the
third quarter of 2018 and transitions to commercial operations in the last quarter of 2019 after commissioning
the plant. The mine pre-production period lasts a total of 6 months which is planned to allow for a gradual
commissioning of mining equipment, hiring and training.
The objectives of the LOM plan are to maximize discounted operating cash flow of the Project subject to
various constraints:
• Limit pre-production mining to upper bench levels unaffected pit water;
• Supply ore to plant to produce about 6 Mt/y of iron ore concentrate;
• Supply ore to the plant according to the contaminant level constraints;
• Limit the mining rate to approximately 35.5 Mt/y;
• Limit the vertical drop down rate to 5 benches per phase per year;
• Limit stockpile levels to less than 12 Mt (approximately 8.4 months of mill feed).

The mine will start with day shift for the first two months (August and September 2018) and then operate on
two shifts per day thereafter (Q4 2018).
The peak mining rate is 35.8 Mt mined with 40 Mt moved in 2036. The average mining rate is 31.8 Mt/yr
during operations.
Stockpiling reaches 11.4 Mt in 2029. This stockpiling level is required to achieve the mill feed constraints and
requires certain ore types to be stockpiled and others reclaimed. Over the LOM a total of 45.8 Mt is rehandled
from stockpile. The annual mine production and stockpile inventory are presented in Figure 16.4 and
Figure 16.5.
Figure 16.4: Mine Production
Mining Schedule
40,000 1.60
35,000 1.40
30,000 1.20
Strip Ratio (W:O)

25,000 1.00
Tonnage (kt)
20,000 0.80
15,000 0.60
10,000 0.40
5,000 0.20
- -
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
Ore Waste Strip Ratio

Figure 16.5: Stockpile Inventory
Stockpile Balance
14,000
12,000
10,000
kt
8,000
6,000
4,000
2,000
-
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
On-Spec High SAT High Mn

Table 16.7: Mine Production Schedule Detail by Period
Total Ore Waste Strip SP Total

Period Mined Mined Mined Ratio Rehandle Moved
(kt) (kt) (kt) (W:O) (kt) (kt)
Q1-2018 - - - - - -
Q2-2018 - - - - - -
Q3-2018 1,337 616 721 1.17 - 1,337
Q4-2018 3,740 2,169 1,571 0.72 - 3,740
Q1-2019 7,283 3,928 3,355 0.85 - 7,283
Q2-2019 7,587 3,876 3,711 0.96 - 7,587
Q3-2019 8,213 2,527 5,686 2.25 863 9,076
Q4-2019 9,974 3,916 6,058 1.55 1,973 11,947
2020 32,014 17,236 14,778 0.86 - 32,014
2021 34,014 18,318 15,696 0.86 - 34,014
2022 33,844 15,994 17,850 1.12 3,134 36,978
2023 33,042 18,948 14,094 0.74 3,618 36,660
2024 30,244 19,453 10,791 0.55 4,361 34,605
2025 32,862 19,549 13,313 0.68 3,020 35,882
2026 31,223 17,077 14,146 0.83 4,259 35,481
2027 31,607 21,117 10,490 0.50 4,329 35,936
2028 32,531 16,843 15,688 0.93 5,177 37,708
2029 29,029 18,705 10,324 0.55 - 29,029
2030 29,766 17,208 12,558 0.73 717 30,483
2031 30,199 15,020 15,179 1.01 2,799 32,998
2032 33,801 17,526 16,275 0.93 176 33,977
2033 31,980 15,630 16,350 1.05 900 32,880
2034 35,192 16,862 18,330 1.09 - 35,192
2035 35,464 16,654 18,810 1.13 - 35,464
2036 35,790 14,415 21,374 1.48 4,211 40,000
2037 35,522 15,608 19,914 1.28 786 36,308
2038 34,295 15,602 18,693 1.20 734 35,029
2039 31,476 16,127 15,349 0.95 67 31,543
2040 27,913 16,452 11,461 0.70 - 27,913
2041 27,879 14,902 12,977 0.87 2,625 30,505
2042 30,589 17,129 13,460 0.79 315 30,904
2043 28,770 17,327 11,444 0.66 1,213 29,984
2044 24,211 16,938 7,273 0.43 524 24,735
2045 - - - - - -
Total 831,391 443,672 387,719 0.87 45,802 877,193

Table 16.8: Stockpile Inventory Schedule
On-Spec High SAT High Mn Total

Period
(kt) (kt) (kt) (kt)
Q1-2018 - - - -
Q2-2018 - - - -
Q3-2018 432 - 184 616
Q4-2018 972 - 184 1,156
Q1-2019 2,103 - 184 2,287
Q2-2019 2,344 - 492 2,836
Q3-2019 1,973 - - 1,973
Q4-2019 266 1,979 - 2,245
2020 1,850 1,979 - 3,829
2021 3,354 1,979 - 5,333
2022 219 3,618 - 3,838
2023 2,300 - 3,233 5,533
2024 1,172 6,039 - 7,211
2025 4,259 3,020 1,765 9,043
2026 1,632 4,494 1,765 7,891
2027 - 1,798 9,476 11,274
2028 2,974 1,359 5,870 10,202
2029 4,210 1,359 5,870 11,438
2030 4,395 1,359 5,152 10,906
2031 3,981 1,359 2,837 8,177
2032 4,144 1,359 2,837 8,339
2033 4,144 458 2,837 7,439
2034 4,526 458 2,837 7,821
2035 4,543 458 2,837 7,837
2036 2,225 458 2,837 5,520
2037 1,439 458 2,837 4,734
2038 705 458 2,837 4,000
2039 638 458 2,837 3,933
2040 1,383 458 2,837 4,677
2041 - - 2,052 2,052
2042 - - 1,737 1,737
2043 - - 524 524
2044 - - - -
2045 - - - -

Figure 16.6: Production Schedule – 2018
Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Source: G Mining
Date: November 2017

Figure 16.15: Production Schedule – 2044 (End of Life of Mine)
Source: G Mining
Date: November 2017

Mill Production Schedule
The mill production schedule is presented in Table 16.10. The ramp-up and commissioning period is two
months from November 2018 to December 2018 (Table 16.9). A total tonnage of 18.0 Mt is planned for 2018.
From 2019 there is a continued ramp-up to full production rate but is in operation from 2019. The mill
throughput achieves 100% throughput targeted at 6.11 Mt from 2021 onwards.
Table 16.9: Mill Ramp-Up
Concentrate
Mill Ramp-Up Schedule Period Treatment
Tonnage (kt)
Q4-2018 (Nov & Dec) Pre-production 552
Q1-2019 Operations 962
Q2-2019 Operations 1,167
2020 Operations 5,468
2021+ Operations ± 6,000

Table 16.10: Mill Production Schedule Detail by Period
Mill Feed Mill Feed Grades

Period
(kt) % Fe % Mn % SAT
Q1-2018 - - - -
Q2-2018 - - - -
Q3-2018 - - - -
Q4-2018 1,628 34.39 2.95 4.24
Q1-2019 2,797 34.74 2.94 4.77
Q2-2019 3,327 34.74 3.04 5.04
Q3-2019 3,390 34.08 2.84 6.05
Q4-2019 3,644 34.60 2.22 8.72
2020 15,653 34.56 2.57 8.73
2021 16,814 34.99 2.99 7.06
2022 17,489 34.02 2.44 9.12
2023 17,253 34.30 3.22 7.61
2024 17,775 33.73 3.40 9.01
2025 17,717 34.39 3.02 8.87
2026 18,229 34.10 2.07 9.27
2027 17,735 34.07 3.03 9.92
2028 17,915 34.54 3.04 5.71
2029 17,470 35.43 2.36 2.73
2030 17,740 35.20 2.30 3.21
2031 17,749 34.72 2.50 3.19
2032 17,364 34.83 2.55 2.51
2033 16,530 34.86 2.14 4.11
2034 16,480 34.73 3.06 3.75
2035 16,637 35.22 2.89 3.72
2036 16,733 35.33 2.62 3.21
2037 16,395 35.22 2.76 4.35
2038 16,336 34.96 2.12 5.26
2039 16,194 35.20 1.98 5.84
2040 15,708 35.34 1.50 5.43
2041 17,527 35.00 2.20 3.18
2042 17,443 35.45 2.47 3.30
2043 18,540 35.23 2.61 1.92
2044 17,462 35.89 2.49 4.19
Total 443,672 34.83 2.58 5.43

Figure 16.16: Mill Feed Grades
35.89
36.50
35.45
35.43
35.34
35.33
35.23
35.22
35.22
35.20
35.20
36.00
35.00
34.99
34.96
34.86
34.83
34.73
34.72
35.50
34.56
34.54
34.53
34.39
34.39
34.30
35.00
34.10
34.07
34.02
33.73
34.50
34.00
33.50
33.00
32.50
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Crude % Fe
3.40
4.00
3.22
3.06
3.04
3.03
3.02
2.99
2.95
3.50
2.89
2.76
2.74
2.62
2.61
2.56
2.55
2.50
2.49
2.47
2.44
3.00
2.36
2.30
2.20
2.14
2.12
2.07
1.98
2.50
1.50
2.00
1.50
1.00
0.50
-
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Crude % Mn
12.00
9.92
9.27
9.12
9.01
8.87
8.73
10.00
7.60
7.06
6.26
8.00
5.84
5.71
5.43
5.26
4.35
4.24
4.19
4.11
6.00
3.75
3.72
3.30
3.21
3.21
3.19
3.18
2.73
2.51
4.00
1.92
2.00
-
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Crude % SAT

Table 16.11: Mill Production Schedule Detail by Sub-Unit by Period
Unit 22 Unit 31 Unit 32 Unit 33 Unit 34 Unit 51 Unit 52 Unit 53

Period
(kt) (kt) (kt) (kt) (kt) (kt) (kt) (kt)
Q1-2018 - - - - - - - -
Q2-2018 - - - - - - - -
Q3-2018 - - - - - - - -
Q4-2018 - - - - - 512 226 891
Q1-2019 - - - - - 846 394 1,557
Q2-2019 - - - 43 23 841 553 1,868
Q3-2019 - - - 0 0 602 860 1,927
Q4-2019 - 6 36 416 35 510 634 1,994
2020 - 24 41 1,694 132 3,075 2,640 8,077
2021 48 142 202 2,587 230 3,259 1,794 8,552
2022 701 118 240 1,520 355 3,698 3,276 7,575
2023 - 2 34 1,895 268 2,355 3,033 9,654
2024 459 531 141 534 10 2,163 2,370 11,568
2025 2,605 155 132 1,687 248 1,931 1,776 9,182
2026 2,963 524 124 1,255 116 2,239 2,725 8,283
2027 700 82 11 231 109 3,031 2,631 10,940
2028 2,991 1,056 560 2,252 273 1,746 931 8,106
2029 2,797 1,777 851 3,228 499 2,149 1,037 5,133
2030 654 1,794 810 3,063 496 2,689 1,039 7,195
2031 2,210 2,704 956 3,667 363 2,555 823 4,473
2032 884 3,394 1,191 4,335 1,049 2,116 1,266 3,128
2033 197 1,993 1,152 5,614 1,052 1,726 955 3,840
2034 - 2,383 620 1,868 289 4,810 1,786 4,724
2035 296 3,049 749 2,497 936 2,088 930 6,092
2036 982 3,369 935 2,260 381 1,419 870 6,516
2037 717 2,102 727 2,510 659 306 602 8,771
2038 2,245 4,712 836 2,714 722 1,056 797 3,253
2039 1,822 2,166 878 4,052 487 1,908 849 4,033
2040 1,714 3,575 1,167 3,999 534 1,299 639 2,781
2041 119 2,044 1,584 8,144 358 1,631 206 3,441
2042 6 171 752 2,902 873 3,533 1,640 7,566
2043 253 105 1,824 4,335 25 3,163 1,203 7,631
2044 10 11 1,268 5,790 19 2,661 1,127 6,575
Total 25,372 37,991 17,820 75,094 10,542 61,918 39,611 175,326

Table 16.12: Concentrate Production Detail by Period
Concentrate Weight Concentrate Grades

Period
(kt) Rec. (%) % Fe % Mn % SiO2
Q1-2018 - - - - -
Q2-2018 - - - - -
Q3-2018 - - - - -
Q4-2018 552 33.88 65.77 1.79 2.11
Q1-2019 962 34.37 65.63 1.84 2.25
Q2-2019 1,167 35.08 65.66 1.77 2.32
Q3-2019 1,164 34.34 65.60 1.65 2.59
Q4-2019 1,251 34.33 66.44 1.12 2.23
2020 5,468 34.93 65.95 1.45 2.41
2021 6,046 35.96 65.77 1.63 2.38
2022 6,023 34.44 66.04 1.36 2.41
2023 6,067 35.17 65.62 1.70 2.49
2024 6,069 34.15 65.59 1.79 2.37
2025 6,066 34.24 65.69 1.68 2.41
2026 5,988 32.85 66.43 1.07 2.32
2027 6,062 34.18 65.63 1.67 2.51
2028 6,081 33.94 65.45 1.81 2.55
2029 6,022 34.47 65.98 1.29 2.62
2030 6,001 33.83 66.21 1.21 2.40
2031 6,026 33.95 65.99 1.35 2.51
2032 6,015 34.64 66.07 1.16 2.69
2033 6,011 36.36 66.13 1.22 2.51
2034 6,050 36.71 65.70 1.51 2.67
2035 6,045 36.34 65.76 1.45 2.68
2036 6,046 36.13 65.81 1.36 2.74
2037 6,074 37.05 65.51 1.42 3.09
2038 5,992 36.68 66.34 1.06 2.46
2039 5,982 36.94 66.42 0.93 2.55
2040 5,968 37.99 66.58 0.79 2.54
2041 6,035 34.43 65.85 1.34 2.72
2042 6,065 34.77 65.56 1.48 2.91
2043 6,068 32.73 65.55 1.50 2.90
2044 5,538 31.71 65.67 1.36 2.96
Total 154,905 34.91 65.89 1.39 2.58

Figure 16.17: Concentrate Grades and Weight Recovery
40.00
37.99
35.00
37.05
36.94
36.71
36.68
36.36
36.34
36.13
35.96
35.17
34.93
34.77
34.64
34.54
34.47
34.44
34.43
34.24
34.18
34.15
33.94
33.95
33.88
33.83
32.85
32.73
30.00
31.71
25.00
20.00
15.00
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Plant Adjusted Weight Recovery (WRCC)
80.00
75.00
66.58
66.43
66.42
66.34
66.21
66.13
66.07
66.04
65.98
65.99
65.95
65.85
65.85
65.81
65.77
65.77
65.76
65.70
65.69
65.67
65.62
65.63
65.59
65.56
65.55
65.51
65.45
70.00
65.00
60.00
55.00
50.00
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Concentrate - % Fe
2.00
1.80
1.81
1.79
1.79
1.60
1.70
1.68
1.67
1.63
1.40
1.57
1.51
1.50
1.48
1.45
1.45
1.42
1.20
1.36
1.36
1.36
1.35
1.34
1.29
1.22
1.21
1.00
1.16
1.07
1.06
0.80
0.93
0.79
0.60
0.40
0.20
-
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Concentrate - % Mn

Mine Operations and Equipment Selection
Mine Operations Approach
Mining is to be carried out using conventional open pit techniques with electric and diesel powered hydraulic
shovels and mining trucks in a bulk mining approach with 12 m benches. An owner mining open pit operation
is planned with the outsourcing of certain support activities such as explosives manufacturing and blasthole
loading.
Drilling and Blasting
Drill and blast specifications are established to effectively single pass drill and blast a 12 m bench. For this
bench height a 349 mm (13¾ in.) blast holes size is proposed with a 6.5 m burden by 7.5 m spacing with
1.5 m of sub-drill. This blast hole size has been used in the past and historically, production blasting was the
same in all areas of the mine with a typical blast involving about 200 holes and about 350 kt per blast.
The rotary drill rigs purchased for the project (2x 49 HR electric and 1x CAT MD6640 electric) have a hole
size range of 251 mm to 406 mm.
Blasting will be accomplished with a high energy bulk emulsion with a density of 1.2 kg/m3 result in a powder
factor of 0.50 kg/t for ore and 0.45 kg/t for waste. Blast holes are initiated with electronic detonators and
primed with 450 g boosters. The bulk emulsion product is a gas sensitized pumped emulsion blend
specifically designed for use in wet blasting applications.
Field estimates of intact rock strength range from approximately R3 to R4 (medium strong to strong) for the
lower member ores while unit 61 (basal silicates) ranges from R0 to R2 (extremely weak to weak) according
to Brown classification scheme outlines in Table 16.13.

Table 16.13: Classification of Rock Strengths (Brown, 1980)
Approximate
Grade Description Field Identification Range of
UCS (MPa)
R6 Extremely Strong Rock Specimen can only be chipped with geological hammer >250
Specimen requires many blows of geological hammer
R5 Very Strong Rock
to fracture it 100 – 250
Specimen requires more than one blow of geological
R4 Strong Rock
hammer to fracture it 50 – 100
Cannot be scraped or peeled with a pocket knife,
R3 Medium Strong Rock specimen can be fractured with single firm blow of
geological hammer 25 – 50
Can be peeled by a pocket knife with difficult, shallow
R2 Weak Rock indentations made by firm blow with point of geological
hammer 5 – 25
Crumbles under firm blow with point of geological
R1 Very Weak Rock
hammer and can be peeled by a pocket knife 1–5
R0 Extremely Weak Rock Indented by thumbnail 0.25 – 1
The average drill productivity for the production rigs is estimated at 43 m/h instantaneous with an overall
penetration rate of 19.4 m/h. The overall drilling factor represents time lost in the cycle when the rig is not
drilling such as move time between holes, moves between patterns, drill bit changes, etc. The average drilling
productivity inclusive of a 6% redrill factor is estimated at 2,792 t/h in ore and 2,356 t/h in waste due to the
different material densities.
Blasting activities will be outsourced to an explosives provider who will be responsible for supplying and
delivering bulk explosives in the hole. The mine engineering department will be responsible for designing
blast patterns and relaying hole information to the drills via the wireless network.
Blasthole loading and firing activities will be performed on day shift only. During full production, the blasting
team will consist of eight individuals as follows:
• 1x blaster and 1x blaster helper per crew (2 crews on rotation by explosives provider)
• 1x bulk truck operator per crew (2 crews on rotation by explosives provider)
• 1x stemming loader operator (2 crews by Owner)
All accessories and blasting consumables will be purchased through the bulk explosive supplier. Budgeting
of explosives products and services is based on proposals received from suppliers, although no final
agreement has been made. The cost for blast movement monitoring has been included in the blasting cost.

In this feasibility study, a mobile 18t emulsion repump truck has been planned which will be loaded from two
emulsion storage tanks on site all of which has been planned as leases from the explosives provider. The
explosives magazines present on site are adequate and will be reused.
Table 16.14: Drill & Blast Parameters
Drill and Blast Parameters Ore Waste

Drill Pattern
Explosive Density g/cm3 1.2 1.2
Hole Diameter in 13.75 13.75
Diameter (D) mm 349 349
Burden (B) m 6.50 6.50
Spacing (S) m 7.50 7.50
Subdrill (J) m 1.50 1.50
Stemming (T) m 5.00 7.00
Bench Height (H) m 12.0 12.0
Blasthole Length (L) m 13.5 13.5
Pattern Yield
Rock Density t/bcm 3.33 2.81
BCM/hole bcm/hole 585 585
Yield per Hole t/hole 1,948 1,644
Yield per Meter Drilled t/m drilled 144 122
Powder Factor kg/t 0.50 0.45
Weight of Expl. per Hole kg/hole 977 474
Drill Productivity
Re-drills % 6% 6%
Pure Penetration Rate m/h 43.0 43.0
Overall Drilling Factor (%) % 45% 45%
Overall Penetration Rate m/h 19.4 19.4
Drilling Productivity t/h 2,792 2,356
Drilling Efficiency holes/h 1.43 1.43
Final wall blasting practices will be very similar to production blasting and will not involve pre-split holes. Pre-
split blasting practices are not recommended due to incompetent nature of the rock mass. The spacing on
the back holes will be reduced and all back row holes are drilled without subgrade, a lighter charge and no
stemming. Along the wall, there will typically be only one hole fired per delay. The final wall blast will be
carried out as trim blasts that are no more than four rows deep and blasted to a free face.

Ore Control
The ore control program will consist of establishing dig limits for ore and waste in the field to guide loading
unit operators. A high precision system combined with an arm geometry system will allow shovels to target
small dig blocks and perform selective mining. The system will give operators real-time view of dig blocks,
ore boundaries, and other positioning information. Physical flagging in the field will also be implemented.
The ore control boundaries will be established by the technical services department based on grade control
information obtained through blast hole sampling with post-blast boundaries adjusted for blast movement
measurements made using a BMM® system. A blast movement monitoring system has been included in the
blasting cost for 20% of the blasts.
Historically, table tests were conducted to establish a weight recovery for the sample but are lengthy and
cannot be performed for each blasthole. It is proposed to assay each blasthole individually to estimate crude
iron, manganese and magnetite.
Loading
The majority of the loading in the pit will be done by one electric drive and one diesel drive hydraulic face
shovels equipped with a 24 m3 bucket. The shovels are matched with a fleet of 221 t payload capacity mine
trucks. The project already owns two 24m3 hydraulic front shovels (one electric and one diesel) and one 17m3
diesel front shovel. The hydraulic shovels will be complemented by one production front-end wheel loader
(“FEL”) with a 12 m3 bucket.
Although interchangeable, the hydraulic shovels will primarily be operating in ore and waste while the wheel
loaders will primarily be used for re-handling operations. The loading units have been optimized to maximized
the lower operating cost of the electric front shovel, while reducing has much as possible the movement of
loading units in each loading areas. The loading productivity assumptions for all types of loading tools in ore,
waste and overburden are presented in Table 16.15.
In ore, the 24 m3 shovel are expected to achieve a productivity of 3,451 t/h based on a 4 pass match with the
mine trucks and an average load time of 2.6 minutes. The productivity in waste will decrease at 2,361 t/h due
to the lower density of material.
The 17 m3 shovel is expected to achieve a productivity of 2,483 t/h based on a 5 pass match with the mine
trucks and an average load time of 3.80 minutes in ore. The productivity in waste will decrease at 1,732 t/h
due to the lower density of material.

The wheel loader is expected to achieve a productivity of 2,070 t/h based on a 7 pass match and an average
load time of 5.25 minutes. In waste, the loader productivity decreases to 1,837 t/h.
Table 16.15: Loading Specifications
Shovel Shovel Shovel Shovel FEL FEL

Loading Unit
(24 m3) (24 m3) (17 m3) (17 m3) (12 m3) (12 m3)
Truck Truck Truck Truck Truck Truck
Haulage Unit
(221 t) (221 t) (221 t) (221 t) (221 t) (221 t)
Material Ore Wst/Ovb Ore Wst/Ovb Ore Wst/Ovb
Rated Payload t 221 221 221 221 221 221
Heaped Volume m3 147 147 147 147 147 147
3
Bucket Capacity m 24 24 17 17 12 12
Bucket Fill Factor % 90% 90% 90% 92% 90% 90%
In-Situ Dry Density t/bcm 3.33 2.81 3.33 2.81 3.33 2.81
Moisture % 3% 3% 3% 3% 3% 3%
Swell % 40% 40% 40% 40% 40% 40%
Wet Loose Density t/lcm 2.45 2.07 2.45 1.69 2.45 2.07
Actual Load Per Bucket t 52.92 44.65 37.48 25.86 27.32 23.05
Passes (Decimal) # 4.18 4.95 5.90 8.55 8.09 9.59
Passes (Whole) # 4.00 5.00 6.00 8.50 8.00 9.50
Actual Truck Wet Payload t 212 223 225 220 219 219
Actual Truck Dry Payload t 206 217 218 261 212 213
Actual Heaped Volume m3 86 108 92 130 89 106
Payload Capacity 96% 101% 102% 99% 99% 99%
Heaped Capacity 59% 73% 62% 88% 61% 72%
Cycle Time
Truck Exchange min 0.70 0.70 0.70 0.70 0.60 0.60
First Bucket Dump min 0.10 0.10 0.10 0.10 0.10 0.10
Average Cycle Time min 0.60 0.60 0.60 0.60 0.65 0.65
Load Time min 2.60 3.20 3.80 5.30 5.25 6.23
Cycle Efficiency % 75% 75% 75% 75% 75% 75%
Number of Trucks Loaded per h # 17.31 14.06 11.84 8.49 8.57 7.23
Production / Productivity
Avg. Prod. dry tonnes /h t/h 3,557 3,048 2,586 2,216 1,819 1,537
Hauling
Haulage will be performed with 221 tonnes class mine trucks. The truck fleet productivity was estimated using
Talpac software. Cycle times have been digitized and estimated for each period for each dumping location
depending on the type of material.

The assumptions and input factors for the Talpac simulations are presented in Table 16.16, Table 16.17 and
Table 16.19.
A speed limit of 50 km/h was applied except for the travel down ramps where the speed was limited to
30 km/h.
Table 16.16: Speed Limits
Site Location Speed Limit (km/h)

Pit on working bench, near dump face 50
Downhill Ramp < -5% 30
Mine Road and Ramps 50
Table 16.17: Rolling Resistance
Rolling Resistance
Road Type
(%)
Main Road 2.50
Ramp 3.50
Pit floor and near dump face 3.50
Table 16.18: Cycle Time Components
Ore Waste
Cycle Time Component Cycle Cycle
(min) (min)
Truck Average Load Queue Time 1 1.73 2.03
Truck Average spot Time at Loader 0.85 0.85
Truck Average Loading Time 2.60 3.20
Truck Average Dump Queue Time - -
Truck Average Spot Time at Dump 0.85 0.85
Truck Average Dumping Time 0.74 0.74
Note 1: Average Load Queue Time corresponding to ½ spot and loading time
The fuel consumptions were also estimated with Talpac which generates a specific engine load factor
depending on the proportion of the travel on ramp grades and on flatter gradients. Generally, the fuel burn
rate increases with depth as a longer period of time is spent on grade.
The following tables present the results for the haulage study. When cycle times decrease going forward in
the schedule it is due to the mining of benches higher in the pit when new mining phases are initiated.

The total haul hours required by period determines the number of trucks required throughout the LOM. The
truck fleet reaches a maximum of 16 units in 2032 and remains at this level until 2038 before it starts
decreasing as a result of a drop in mining rate.
Table 16.19: Ore Haulage Results
Average
Hauling Average Fuel
Distance Travel
Phase Hours Cycle Time Consumption
(m) Velocity
(h) (min) (L/NOH)*
(km/h)
2018** 10,375 6,294 28.5 28.6 194.8
2019** 6,912 27,987 18.7 34.7 168.3
2020 10,053 35,033 25.0 33.1 206.9
2021 10,550 38,778 26.1 32.7 218.1
2022 8,415 30,645 23.6 29.9 199.0
2023 11,043 41,921 27.3 32.3 213.7
2024 9,170 39,741 25.2 29.9 202.0
2025 8,674 38,705 24.4 29.5 202.8
2026 7,605 31,790 23.0 28.2 201.1
2027 10,781 49,128 28.7 29.5 218.2
2028 6,238 29,951 21.9 24.7 202.5
2029 9,596 45,188 29.8 25.0 226.5
2030 8,600 38,353 27.5 24.9 215.1
2031 5,791 27,635 22.7 21.8 208.0
2032 8,833 43,669 30.7 22.1 222.5
2033 9,915 39,678 31.3 24.2 221.4
2034 11,630 45,163 33.0 26.6 219.2
2035 10,131 42,002 31.1 25.0 217.0
2036 9,808 36,901 31.6 23.7 212.3
2037 11,670 42,830 33.8 25.9 225.7
2038 10,233 41,012 32.4 23.9 224.6
2039 10,074 42,261 32.3 23.7 224.3
2040 10,993 47,154 35.3 23.1 232.0
2041 13,841 44,196 36.6 27.9 225.1
2042 14,213 51,904 37.4 27.9 228.4
2043 16,754 56,425 40.2 30.1 226.5
2044 15,545 55,566 40.5 27.7 226.1
Total / Avg. 10,689 1,069,910 30.5 27.2 216.6
* NOH : Net Operating Hour (Defined in Figure 16.19)
**Numbers may vary from OPEX estimate as numbers presented are for Q4 only

Table 16.20: Waste Haulage Results
Average
Hauling Average Fuel
Distance Travel
Phase Hours Cycle Time Consumption
(m) Velocity
(h) (min) (L/NOH)*
(km/h)
2018** 2,980 2,739 14.7 25.3 93.8
2019** 3,275 18,365 13.3 34.6 107.0
2020 3,669 20,654 15.7 27.4 135.1
2021 5,037 22,486 17.7 30.2 171.7
2022 6,372 30,203 20.9 29.0 176.6
2023 2,930 15,957 14.0 27.9 120.1
2024 6,615 18,964 21.7 28.3 182.7
2025 5,476 20,605 19.1 28.8 156.7
2026 7,221 26,960 23.5 27.4 184.2
2027 2,706 12,695 14.9 22.4 141.0
2028 5,858 28,157 22.1 24.3 182.1
2029 6,179 20,821 24.9 21.6 186.0
2030 9,345 31,986 31.4 23.6 206.0
2031 10,291 39,475 32.1 25.3 205.7
2032 8,474 42,292 32.0 20.9 203.1
2033 5,324 29,741 22.4 21.6 142.4
2034 5,753 32,463 21.8 24.4 154.5
2035 4,432 37,492 24.6 15.7 178.7
2036 5,513 39,619 22.9 21.8 160.8
2037 5,473 36,078 22.3 22.4 168.5
2038 6,056 36,926 24.4 21.8 175.4
2039 4,929 27,844 22.4 20.1 174.4
2040 4,563 20,757 22.3 18.7 174.2
2041 5,045 21,702 20.6 23.4 175.8
2042 4,501 21,480 19.7 22.5 177.6
2043 4,755 19,581 21.1 21.2 184.5
2044 5,812 15,022 25.5 19.6 195.0
Total / Avg. 5,919 691,064 23.0 23.6 172.8
* NOH : Net Operating Hour (Defined in Figure 16.19)
**Numbers may vary from OPEX estimate as numbers presented are for Q4 only

Figure 16.18: Truck Requirement - Required vs. Budgeted
18
16
14
12
Nb. Units
10
-
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
Units Required Units Budgeted
Dewatering
16.4.6.1 Previous Dewatering Experience at Wabush
Major water inflows were observed by the Scully operation. At the mine closure in 2014, 20 dewatering wells
were active between the West Pit Extension and Duley Lake. An additional 10 inactive wells are also present
between the West Pit Extension and Duley Lake. Pumping rates before the closure of the mine in 2014 were
of the order of 26,500 GPM in the West Pit alone (Amec, 2014). At the same time, dewatering rates in the
East-Pit-East and East-Pit-West were of 4,000 and 4,500 US GPM, respectively (Amec, 2014). Dewatering
in the East-Pit-East and East-Pit-West was accomplished using a series of pit sumps (Golder, 2006a).
16.4.6.2 Hydraulic Connection with Surrounding Lakes
Golder (2006b) carried out a geophysical survey to assess the lake bottom conditions at Duley Lake adjacent
to the West Pit Extension and at the Little Wabush Lake adjacent to the East-Pit-East.
The survey identified anomalies in the geophysical data, which were identified as potential sinkholes that
may connect Duley Lake with the underlying permeable iron ore bearing units.
The geophysical survey did not identify any anomalies indicative of sinkholes in the Little Wabush Lake.

Knoll and Vern Lakes are assumed to be disconnected or weakly connected to the mine’s hydrogeological
system. This is suggested by the reported negligible final dewatering rate of the South Pit (0 USgpm, Amec,
2014), despite the large elevation difference between the lakes (Vern Lake: 1,851 ftasl [feet above sea level],
Knoll Lake: 1,772 ftasl) and the bottom of the existing South Pit (1,540 ftasl), which implies a hydraulic
gradient between the lakes and the South Pit of the order of .05 to 0.1. In addition, Vern Lake is underlain by
the Denault and Wishart formations, which will not be intersected by the projected pit, and Knoll Lake is
underlain by the Wishart and Attikamagen Formations, which will not be intercepted by the projected pit.
Moreover, Knoll Lake rests to the east of the north-south fault that separates the West Pit from the East-Pit-
West. This fault has been interpreted as a groundwater barrier by Piteau (2001).
Similarly, Quartzite Lake, located north of the East-Pit-East and East-Pit-West, at an elevation of 1,767 ftasl,
is underlain by the Wishart Formation and hence is considered as hydraulically disconnected from the
geological units intercepted by the proposed pit expansion.
Figure 16.19: Currently Flooded pits
16.4.6.3 Ground Water Model
A 3D numerical groundwater model was created using FEFLOW, a finite element groundwater software that
solves the groundwater flow equation. The model was divided into six units, corresponding to the geological
units used on site:
Upper Member Lower Member

Middle Member Basal Silicate
Middle Quartzite Wishart Quartzite

The lakebed sediments under Duley Lake were analysed using a permeameter, which yielded an average
hydraulic conductivity of 1.6x10-7 m/s (Piteau, 2001). The lakebed sediments are underlain by a till with an
unknown hydraulic conductivity, which was assumed to be greater than the lakebed sediments. The model
lumped the lakebed sediments and the underlying till into a single layer located below Duley Lake and Little
Wabush Lake. This layer was assigned a hydraulic conductivity of 1x10-6 m/s and a thickness of 3 m. At
Duley Lake, the sinkholes observed during the GPR survey were introduced as elements with the same
hydraulic conductivity as the underlying rock formations. Vern and Knoll Lakes were not included in the model
since they are assumed to be perched and therefore not connected geological units present at the mine.
The model was calibrated to match the dewatering rates reported by Amec (2014) prior to mine closure. The
model was then used to estimate the steady-state groundwater inflow into the mine once the final target depth
is reached at all pits.
The hydraulic properties of the rock at the South Pit, Boot Pit and West Pit are assumed to correspond to
those estimated by the calibration of the model at the West Pit Extension.
Two cases were evaluated using the groundwater model: a base case with the calibrated hydraulic
conductivities and an upper range case, which used the 80th percentile of the available hydraulic
conductivities for units in the East-Pit-East and East-Pit-West (Table 16.21).
The mining sequence was not considered in these estimates and inflow may increase for a given area
depending on the mining sequence. A preliminary modelling exercise that considered deepening of the East-
Pit-West before deepening the East-Pit-East suggests that if this were to occur, infiltration into the East-Pit-
West would be approximately 6,600 USgpm.
Groundwater modelling simulations have shown that the operation of the dewatering system at West Pit
Extension would control most of the water inflow coming from Duley Lake. Given that the maximum proposed
depth of the deepened West Pit will be similar to that of the existing West Pit Extension–West Pit is planned
to be 12 m deeper–large ground water inflow is not expected at West Pit.

Table 16.21: Groundwater Model Results
Base Case Upper range

Pit
(USgpm) (USgpm)
East-Pit-East 6,600 9,700
East-Pit-West 3,500 7,800
South Pit 3,600 3,600
West Pit Expansion 26,500 26,500
West Pit 400 400
Boot Pit 6,200 6,200
Total 46,800 54,200
16.4.6.4 Dewatering
For this study, three (3) distinct dewatering activities were planned. The first consists in the dewatering of the
flooded pits to restart mining and to allow for in-pit dumping. The first pits to dewater are the West and South
Pits. Dewatering starts as early as May 2018. Water will be pumped using barges and submersible electrical
pumps. The East Pit will be dewatered using the same methodology from 2019. The quantities to dewater
are presented in the Table 16.22. The dewatering of the flooded pits is completed in 2020.
Table 16.22: Water Quantity in Flooded Pits
Pit Location 000 m3

West & South Pit 25,000
East Pit 31,150
The second dewatering activity to take place is the long hole dewatering. All the infrastructure is present on
the western end of the pit along the Long Lake frontier. It consists of a series of long holes pumping water
seepage from the Long Lake into the West Pit. The water pumped is sent back into the Long Lake through a
series of pipes. The Eastern infrastructures are yet to be built but an extensive study was done by Piteau
Associates Engineering LTD. In 2005. The study determined the number of holes to be drilled and the cost
for the drilling of the holes plus all required infrastructures. This cost was reported in the current study with
inflation. The long hole dewatering will be performed with Gould Pumps. Numerous pumps are found on site.
Finally, sump pumps will be installed at pit bottoms or on working benches when water is present. Numerous
electrical submersible pumps are still present on site. Water pumped in the pit, will first be sent to a
sedimentation pond before being released in the surrounding lakes.

Road and Dump Maintenance
Waste and ore storage areas will be maintained by a fleet of two 899 HP and two 630 HP track-type dozers.
Also, a 500 HP wheel dozer will be available on site, mainly dedicated to the maintenance of the mine roads
and the loading areas.
Mine roads will be maintained by two 18 ft blade motor graders. A water/sand truck will be used in summer
time to suppress dust by spreading water. During winter months, the unit will convert into a sand truck to
spread road aggregate for added traction on snow/ice. Two smaller trucks will also be available (1 x water
truck and 1 x sand truck) to maintain the areas inaccessible to the larger truck.
For snow removal activities, a 350 HP loader will be used either with a snow blade or with a snow blower for
cleaning around buildings and in critical areas. If needed, an IT loader from the maintenance department can
give additional support.
Support Equipment
All miscellaneous construction related work, such as berm construction, water ditch cleaning will be done by
one 49 t excavator. This unit will be equipped with a hydraulic hammer for boulders clearing after blasts.
For open pit service, two mechanic service trucks are planned, one fuel truck, one lube truck and one lowboy.
Four light towers are required to illuminate critical workplaces such as at the loading face, stockpile area, and
waste dump points. In other places, the electrical network of the pit could be used for lighting.
Several other pieces of equipment are planned to support the mining activities: one boom trucks (28 t crane),
one 230 HP IT loader, one small 5t forklift for the maintenance facility. A 789D tractor with a low-boy trailer
will be available for moving tracked equipment around the property.
Mine Maintenance
Tacora has not signed for a maintenance and repair contract (“MARC”) for its mobile equipment fleet.
Consequently, the maintenance department has been structured to fully manage this function, performing
maintenance planning and training of employees. For activities such as major components replacement, the
project will rely on the local dealer and manufacturer support. Thus, a provision for an external contract was
budgeted as a yearly contractor fee for all major equipment.

All required tire services for the mining equipment (such as tire pressure and wear monitoring, tire rotation,
tire replacement and repairs) have been assumed as outsourced and the contractor fees have been budgeted
as part of the maintenance budget.
Since specialized tooling is required to perform the regular maintenance department’s activities (i.e. lift
stands, kidney looping units, machines diagnostic tools, hydraulic torque wrenches and general shop tools
such as presses, nitrogen charging kits, air tools), the cost for the replacement and repair of those tools have
been included in the operating expenditures throughout the mine life.
A Computerized Maintenance Management System (CMMS) will be necessary to manage maintenance and
repair operations. This system will track all maintenance costs while keeping a service history and of each
machine. The specific software package will have to be selected to integrate with the ERP that the project
will select and utilize. This package will also require an interface or integration to external systems such as
the dispatch and condition monitoring system.
Mine Management and Technical Services
The mine is headed by a mine manager who is responsible for the overall management of the mine.
Superintendent positions in operations, technical services and maintenance report directly to the mine
manager. The Senior Geologist will report to the technical services superintendent.
The operations department is composed of one foreman per crew (4 in total). A mine dispatcher is planned
on each shift. To increase operator level performance and organize structured training programs a mine
trainer is planned on day shift for the first three years of the project. Training after the three year period will
be outsourced. The operations department includes 7 staff employees at peak level.
The engineering and geology team will provide support to the operations team by providing short-term and
long-term planning, grade control, surveying, mining reserves estimation and all other technical functions.
Operating costs for this group includes salaries, office supplies, software fees, survey and grade control
supplies, etc. The engineering and geology team includes 17 employees.
Roster Schedules
The workforce is to be sourced locally from neighboring communities such as Fermont (Qc), Labrador City
(NL) or Wabush (NL). Except for some certain administrative positions which would be on a standard 8 hour
shift 5 days on/2 days off, the rest of the crews will be working 12-hour shifts with a 4 on / 4 off rotating

schedule. Four crews are required to operate on a continuous basis 24-hours per day 365 days per year.
This schedule for rotational employees results in 2,184 scheduled hours of work per year.
Equipment Usage Model Assumptions
The equipment hour usage model utilized to plan equipment requirements and productivity is illustrated in
Figure 16.20. The typical equipment usage model assumptions are established by equipment groupings as
presented in Table 16.24. The annual net operating hours (“NOH”) varies approximately between 5,000 and
5,400 hours per year.

Figure 16.20: Equipment Hour Usage Model
The definitions are as follows:

• Calendar hours – defined as 8,760 hours/year
• Unscheduled hours – scheduled outages including statutory holidays, planned shutdowns and scheduled
down shifts
• Scheduled hours – total calendar hours less unscheduled hours
• Down hours – time unit is mechanically inoperable due to preventive maintenance or unscheduled
breakdowns
• Available hours – is scheduled hours less down time
• Standby hours – time the equipment is available but not manned or used
• Gross operating hours (GOH) – available hours less idle or standby
• Operating delay hours - time the unit is available, manned, but not producing or effective
• Net operating hours (NOH) – the difference between GOH and operating delays
KPI calculations:
• NOH = Net Operating Hours
• GOH = NOH + Delay
• Total Hours = NOH + Delay + Standby + Down
• Availability = (NOH + Delay + Standby) / (NOH + Delay + Standby + Down)
• Use of Availability = (NOH + Delay) / (NOH + Delay + Standby)
• Net Utilization = (NOH + Delay) / (NOH + Delay + Standby + Down)
• Effectiveness = NOH / (NOH + Delay) = NOH / GOH
• Overall Equipment Efficiency (OEE) = NOH / Total Hours
Source: G Mining
Equipment Hour Usage Model
Date: Aug. 2016

Table 16.23: Equipment Usage Model Assumptions
Equipment Usage Assumptions Shovels Loaders Trucks Drills Ancillary

Days in period days 365 365 365 365 365
Availability % 80 80 82 85 85
Use of Availability % 90 90 90 85 85
Utilization % 72 72 73.8 72.3 72.3
Effectiveness % 80 80 80 85 80
OEE % 57.6 57.6 59.0 61.4 57.8
Total Hours h 8,760 8,760 8,760 8,760 8,760
Down Hours h 1,752 1,752 1,577 1,314 1,314
Delay Hours h 1,261 1,261 1,293 949 1,266
Standby Hours h 701 701 718 1,117 1,117
Gross Oper. Hours (GOH) h 6,307 6,307 6,465 6,329 6,329
Net Oper. Hours (NOH) h 5,046 5,046 5,172 5,380 5,063
Fleet Management
A fleet management system (including hardware and software) has been budgeted. This system will manage
in real-time the operation, monitor machine health, and track key performance indicators (“KPIs”). The system
will be managed by a dispatcher on each crew who will control the system which will send operators onscreen
instructions to work at peak efficiency.
Both capital expenditure and on-going yearly fees (Opex) have been budgeted in the study.
The shovels will be fitted with a high precision global positioning system (GPS). This system will improve the
productivity and bench grade control, and can be integrated with the mine planning software.
The production drills will also be equipped with a high precision system. This system will help to guide rigs
into position and assure holes are drilled to the correct depth and location.
Pit Slope Monitoring
Slope movement monitoring is planned for the open pit to gather measurements and confirm assumptions in
order to assure safe working conditions. Initial slope movement monitoring would consist of using prisms
read by manual or automated surveys with at least two permanent total stations established in climate
controlled enclosures to ensure full coverage of the open pit. The initial prism monitoring will provide
movement response data to verify visual observations and confirm if the slope is performing adequately.

A permanent, fully-automated monitoring system using Lidar or radar could be considered for the long term
if warranted based on review of prism monitoring results from the first year or two of slope performance.
The slope movement monitoring data will be important for the calibration of numerical models required for
detailed design updates during the mine life. The pit phasing approach will allow for adjustments to the final
design based on observations and knowledge gained with the interim pit phases.
Electric Cable Handling
An evaluation of capital and operating cost was made for the mining cable management and electrification of
the pit since the mine will operate one electric front shovels and three electric drills.
The operation of a 550 HP wheel loader with a removable cable reel attachment has been budgeted to handle
the electric cables required for the various production units. The pit circumference is mostly already electrified
by aerial lines, but a provision has been calculated to cover for modifications and/or additions of aerial electric
lines. The south aerial lines are first moved to allow for mine infrastructures. A permanent sub-station must
also be relocated because of the south-west dump. Once mining starts in East pit east, the power lines to the
north have to be relocated along with another permanent substation.
Many portable substations, skid mounted, are present on site.
Aggregate Plant
To support the project and the need for crushed rock of different granulometry, an external contractor will be
hired. This contractor will supply and operate the aggregate plant and all the associated costs have been
calculated as a cost per tonne of the crushed rock.
The main usage of crushed rock is for the road capping (84% of total). The aggregate will be used to increase
traction during winter months, and to maintain and repairs all the site roads during summer time. The other
usage of importance is to produce aggregate for stemming all the blast holes (16% of total).
Mine Equipment Requirements
Besides the drilling and main loading equipment that are already purchased, the project needs to acquire the
haul trucks, dozers and ancillary equipment. For the used unit, their hourmeter reading was used to evaluate
the time of replacement of each units. The equipment requirements are presented in Table 16.24.

Table 16.24: Equipment Requirements
2021- 2026- 2031- 2036- 2041-

Equipment Requirement 2018 2019 2020
2025 2030 2035 2040 2045
Major Equipment
Electric Prod Drill 2 3 3 3 3 3 3 3
Electric Hydraulic Shovel (24 m³) 1 1 1 1 1 1 1 1
Diesel Hydraulic Shovel (24 m³) - 1 1 1 1 1 1 -
Diesel Hydraulic Shovel (22 m³) - 1 1 1 1 1 1 1
Wheel Loader (20 m³) - 1 1 1 1 1 1 1
Mining Truck (240t) K 6 10 11 12 14 16 16 15
Track Dozer (899HP) 1 2 2 2 2 2 2 2
Track Dozer (600HP) 2 2 2 2 2 2 2 2
Motor Grader 18ft 2 2 2 2 2 2 2 2
Wheel Dozer 500HP 1 1 1 1 1 1 1 1
Water/Sand Truck 1 1 1 1 1 1 1 1
Support Equipment
Excavator (49t) 1 1 1 1 1 1 1 1
Hydraulic Hammers for 49t Exc. 1 1 1 1 1 1 1 1
Wheel Loader 350HP 1 1 1 1 1 1 1 1
Wheel Loader 200HP 1 1 1 1 1 1 1 1
Snow Blower 1 1 1 1 1 1 1 1
Snow Plow (Blade) for IT Loader 1 1 1 1 1 1 1 1
Small Water Truck 1 1 1 1 1 1 1 1
Small Sand Truck 1 1 1 1 1 1 1 1
Pick-up Truck 16 16 16 16 16 16 16 16
6kW - 4 Lamps Light Tower 4 4 4 4 4 4 4 4
Lowboy & Tractor (150t) 1 1 1 1 1 1 1 1
Boom Truck 28 t 1 1 1 1 1 1 1 1
Service Truck (Platform) 1 1 1 1 1 1 1 1
Mechanical Service Truck 1 1 1 1 1 1 1 1
Fuel Truck 1 1 1 1 1 1 1 1
Lube Truck 1 1 1 1 1 1 1 1
IT Loader (Toolcarrier) 1 1 1 1 1 1 1 1
Mobile Air Compressor 2 2 2 2 2 2 2 2
Mobile Welding Machine 4 4 4 4 4 4 4 4
Mobile Genset 2 2 2 2 2 2 2 2
5T Lift Truck 1 1 1 1 1 1 1 1
Tire Manipulator - - - - - - - -
Skidsteer 96HP 1 1 1 1 1 1 1 1
Cable Handling Equipment 1 1 1 1 1 1 1 1
Manlift 60ft 1 1 1 1 1 1 1 1

2021- 2026- 2031- 2036- 2041-

Equipment Requirement 2018 2019 2020
2025 2030 2035 2040 2045
Vertical Man Lift 26' 1 1 1 1 1 1 1 1
Scissor Lift 35' RT 1 1 1 1 1 1 1 1
Spare Box for Haul Trucks 1 1 1 1 1 1 - -
Spare Bucket for Shovels 1 1 1 1 1 1 - -
Dewatering
Long Hole Dewatering 40 40 40 40 40 40 40 40
In-Pit Dewatering 8 8 8 6 4 4 6 6
Mine Manpower Requirements
The mine manpower requirements over the LOM is represented in the Figure 16.21 below. The total mine
operations team will vary over the mine life from 128 to a peak at 147 people required. Contractors are
planned for blasting activities. The peak is reached in 2032 with a max of 231 employees, then a reduction
occurs in 2038 as the yearly tonnages slowly decreases. The first year, 2018, is a fractional year with the
pre-production ramp-up, thus explaining the reduction in number of employees.
The mine maintenance group will get to a maximum of 67 employees of which 11 are staff members. The
mine engineering group will have a total of 9 employees whereas the mine geology team reaches a maximum
of 8 employees.
These figures represent the anticipated manpower to operate the mine but may be split between Tacora
direct employees and contract work.

-
50
100
150
200
250
Section 16
2017 - -
2018 96 48 9 8
2019 128 60 9 8
2020
Tacora Resources Inc.
132 64 9 8
2021 132 64 9 8
2022 131 63 9 8
2023 131 59 9 8
2024 131 63 9 8
2025 131 63 9 8
Mine Ops
2026 131 59 9 8
2027 135 63 9 8
2028 135 59 9 8
2029 135 63 9 8
2030 139 63 9 8
Mine Maint
2031 139 63 9 8
2032 147 67 9 8
December 22, 2017

2033 147 67 9 8
2034 147 67 9 8
Mine Eng.
2035 147 67 9 8
2036 147 67 9 8
Figure 16.21: Mine Manpower Requirements
2037 147 67 9 8
Geology
2038 143 67 9 8
2039 139 63 9 8
2040 139 63 9 8
2041 139 63 9 8
2042 139 63 9 8
2043 139 63 9 8
2044 127 59 9 8
Page 16-50
2045 - -
Feasibility Study Technical Report
17 RECOVERY METHOD
Introduction
The process plant parameters used are based on:
• past operation of the plant;
• existing equipment and the studies made by Soutex for the evaluation of the Manganese reduction
lines;
• optimisation of the actual plant;
• Test work conducted by COREM during 2008 and 2012 (as part of project T-787, T-919 and T-1298);
• Soutex report for the Manganese removal lines and the optimisation report for the existing plant;
• Reports by Cliffs, the previous owner;
• information provided by Tacora;
• industry standard practices or literature.
For the first two full production years (Years 1 to 2) the plant capacity is established at 5.8 Mtpy of concentrate
with ore processing rate of 2150 tph and plant availability at 89%. The plant has been sized to meet the
general design criteria and parameters for the first two years at a rate of 5.8 Mtpy of concentrate as indicated
in the general design criteria and parameters for the years 1 to 2 shown in Table 17.1.
For Years 3 to 20, the capacity increases to 6.1 Mtpy with ore processing rate of 2200 tph and plant
availability at 92%. The general design criteria and parameters for year three (3) and beyond are shown in
Table 17.2

Table 17.1: Scully Mine Reactivation Design Criteria (Years 1 to 2 at 5.8 Mtpy)
Mill availabilty 89% % Annual Hours A/C*
Concentrate Grade 2.58% % Silica B
Concentrate Grade 1.39% % Mn B
Mill Recirculating Load 130% % (wt) B
Tyler Screen Oversize 23% % (wt) B
Rougher Spiral Recirculating Load 111% % (wt) B
Rougher Spiral Con 47% % (wt) B
B. Soutex
The above criteria are valid for the first 2 years of
LOM and do not take into account the ramp-up C. Calculated or Historica data
after Year 2. D. Ausenco
*See Chapter 13 for explanation of the availability value.

Table 17.2:Scully Mine Reactivation Design Criteria (Years 3 and After at 6.1 Mtpy)

Mill availabilty 92% % Annual Hours A/C*
Concentrate Grade 2.58% % Silica B
Concentrate Grade 1.39% % Mn B
Mill Recirculating Load 130% % (wt) B
Tyler Screen Oversize 23% % (wt) B
Rougher Spiral Recirculating Load 111% % (wt) B
Rougher Spiral Con 47% % (wt) B
The above criteria are valid for Year 3 and after B. Soutex
C. Calculated or Historica data
D. Ausenco
*See Chapter 13 for explanation of the availability value.
Flowsheet Process Description and Mass Balance
The process description that follows was written in association with a Simplified Flow Diagram and can be
found in Figure 1.2. The mass balances of the two capacities associated with the flowsheet are shown in
Figure 17.2 and Figure 17.3.

Figure 17.1: Scully Mill Flow Sheet

Figure 17.2: Scully Mill Mass Balance for 5.8 Mtpy

/----------- SOLIDS -----------\ /----- WATER -----\ /------------ SLURRY ------------\ Solids Solids
Flow Description No. Units Split/per MTPH GPM SpG MTPH GPM MTPH GPM SpG Vol% Wt%
Ore (crusher feed) 1 2150 2691 3.5 90 394 2240 3086 3.20 87.2% 96.0%
Crusher Product 2 2150 2691 3.5 90 394 2240 3086 3.20 87.2% 96.0%
Mill Water W1 6 333 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Mill Fresh Feed 3 6 358 2150 2691 3.5 544 2394 2694 5086 2.33 52.9% 79.8%
Mill Recirculating Load 130%
Mill Discharge 2793 3496 3.5 1273 5607 4066 9103 1.97 38.4% 68.7%
Tyler Screen Feed Water W14 0 0 2.7 2140 9424 2140 9424 1.00 0.0% 0.0%
Tyler Screen Feed 6 2793 3496 3.5 3413 15031 6206 18527 1.48 18.9% 45.0%
Tyler Screen Oversize 4 23% 642 804 3.5 275 1212 918 2016 2.00 39.9% 70.0%
Oversize Sump Water W2 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Mill Recirculated Feed 5 642 804 3.5 729 3212 1372 4016 1.50 20.0% 46.8%
Tyler Screen Undersize 7 77% 2150 2692 3.5 3138 13818 5289 16510 1.41 16.3% 40.7%
Rougher Spiral Recirculating Load 7+15 111% 2392

Sump Water W3 0 0 2.7 1098 4836 1098 4836 1.00 0.0% 0.0%
Rougher Spiral Feed 8 960 2392 2994 3.5 4442 19561 6834 22555 1.33 13.3% 35.0%
Spiral Water W4 0 0 2.7 1526 6720 1526 6720 1.00 0.0% 0.0%
Rougher Spiral Con 9 47% 1112 1132 4.3 910 4007 2022 5139 1.73 22.0% 55.0%
Rougher Spiral Tails 11 54% 1280 1862 3.0 5058 22274 6338 24136 1.16 7.7% 20.2%
Hydrosizer overflow (Cyclone feed) 10 27% 303 308 4.3 1017 4480 1320 4788 1.21 6.4% 22.9%
Hyrdosizer cyclone overflow 14 20% 61 79 3.4 812 3573 873 3653 1.05 2.2% 7.0%
Hyrdosizer cyclone underflow 15 80% 242 229 4.6 206 907 448 1136 1.74 20.2% 54.0%
Rougher Spiral Tails (Cyclone Feed) 11 1280 1862 3.0 5058 22274 6338 24136 1.15631 7.7% 20.2%
Rougher Spiral tails cyclone overflow 12 8.5% 109 159 3.0 3888 17119 3997 17278 1.02 0.9% 2.7%
Rougher Spiral tails cyclone underflow 13 91.5% 1171 1704 3.0 1171 5155 2341 6858 1.50 24.8% 50.0%
Teeter Water W5 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Hydrosizer underflow 16 809 767 4.6 347 1527 1156 2294 2.22 33.4% 70.0%
Drum Filter Cake 17 809 767 4.6 34 148 843 915 4.06 83.8% 96.0%
Filtrate 18 0 0 2.7 313 1379 313 1379 1.00 0.0% 0.0%
Gravity Circuit recovery 37.6%
Dry Spiral Concentrate 19 6 135 809 767 4.6 0 0 809 767 4.65 100.0% 100.0%
LIMS Con 20 6% 49
LIMS Tails 21 94% 761
Rougher HIMS Feed 21 761

Rougher HIMS Con 22 53% 405
Rougher HIMS Tails 23 47% 356
Scavenger HIMS Feed 23 356

Scavenger HIMS Con 24 77% 273
Scavenger HIMS Tails 25 23% 83
Mn Reduction Line Con 26 89.8% 727

Primary Line Weight recovery 33.8%
HT Scavenger 1st Stage Feed 25 83

HT Scavenger 1st Stage Con 27 29% 24
HT Scavenger 1st Stage Mids 28 0% 0
HT Scavenger 1st Stage Tails 29 71% 58
HT Scavenger Total Tails 32 58 88 2.92 0 0 58 88 2.92 100.0% 100.0%

Reslurrification Water W6 0 0 2.65 108 477 108 477 1.00 0.0% 0.0%
HT Scav HIMS Feed 33 0.2063158 24

HT Scav HIMS Con 34 70% 17
HT Scav HIMS Tails (High Mn Con) 35 30% 7
Total Dry Con - CON LOADOUT 64 744

Figure 17.3: Scully Mill Mass Balance for 6.1 Mtpy

/----------- SOLIDS -----------\ /----- WATER -----\ /------------ SLURRY ------------\ Solids Solids
Flow Description No. Units Split/per MTPH GPM SpG MTPH GPM MTPH GPM SpG Vol% Wt%
Ore (crusher feed) 1 2200 2754 3.5 92 404 2292 3158 3.20 87.2% 96.0%
Crusher Product 2 2200 2754 3.5 92 404 2292 3158 3.20 87.2% 96.0%
Mill Water W1 6 333 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Mill Fresh Feed 3 6 367 2200 2754 3.5 546 2404 2746 5158 2.34 53.4% 80.1%
Mill Recirculating Load 130%
Mill Discharge 2858 3577 3.5 1282 5644 4140 9221 1.98 38.8% 69.0%
Tyler Screen Feed Water W14 0 0 2.7 2211 9736 2211 9736 1.00 0.0% 0.0%
Tyler Screen Feed 6 2858 3577 3.5 3493 15380 6351 18958 1.48 18.9% 45.0%
Tyler Screen Oversize 4 23% 657 823 3.5 282 1240 939 2063 2.00 39.9% 70.0%
Oversize Sump Water W2 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Mill Recirculated Feed 5 657 823 3.5 736 3240 1393 4063 1.51 20.2% 47.2%
Tyler Screen Undersize 7 77% 2201 2755 3.5 3211 14140 5412 16894 1.41 16.3% 40.7%
Rougher Spiral Recirculating Load 7+15 111% 2448

Sump Water W3 0 0 2.7 1124 4948 1124 4948 1.00 0.0% 0.0%
Rougher Spiral Feed 8 960 2448 3064 3.5 4546 20016 6993 23080 1.33 13.3% 35.0%
Spiral Water W4 0 0 2.7 1526 6720 1526 6720 1.00 0.0% 0.0%
Rougher Spiral Con 9 47% 1138 1158 4.3 931 4100 2069 5259 1.73 22.0% 55.0%
Rougher Spiral Tails 11 54% 1309 1906 3.0 5140 22635 6450 24541 1.16 7.8% 20.3%
Hydrosizer overflow (Cyclone feed) 10 27% 310 316 4.3 1031 4538 1341 4853 1.22 6.5% 23.1%
Hyrdosizer cyclone overflow 14 20% 63 81 3.4 820 3610 883 3691 1.05 2.2% 7.1%
Hyrdosizer cyclone underflow 15 80% 247 234 4.6 211 928 458 1162 1.74 20.2% 54.0%
Rougher Spiral Tails (Cyclone Feed) 11 1309 1906 3.0 5140 22635 6450 24541 1.1573 7.8% 20.3%
Rougher Spiral tails cyclone overflow 12 8.5% 112 162 3.0 3943 17361 4054 17523 1.02 0.9% 2.8%
Rougher Spiral tails cyclone underflow 13 91.5% 1198 1743 3.0 1198 5275 2396 7018 1.50 24.8% 50.0%
Teeter Water W5 0 0 2.7 454 2000 454 2000 1.00 0.0% 0.0%
Hydrosizer underflow 16 828 784 4.6 355 1563 1183 2347 2.22 33.4% 70.0%
Drum Filter Cake 17 828 784 4.6 35 152 863 936 4.06 83.8% 96.0%
Filtrate 18 0 0 2.7 320 1411 320 1411 1.00 0.0% 0.0%
Gravity Circuit recovery 37.6%
Dry Spiral Concentrate 19 6 138 828 784 4.6 0 0 828 784 4.65 100.0% 100.0%
LIMS Con 20 6% 50
LIMS Tails 21 94% 778
Rougher HIMS Feed 21 778

Rougher HIMS Con 22 53% 415
Rougher HIMS Tails 23 47% 364
Scavenger HIMS Feed 23 364

Scavenger HIMS Con 24 77% 279
Scavenger HIMS Tails 25 23% 85
Mn Reduction Line Con 26 89.8% 743

Primary Line Weight recovery 33.8%
HT Scavenger 1st Stage Feed 25 85

HT Scavenger 1st Stage Con 27 29% 25
HT Scavenger 1st Stage Mids 28 0% 0
HT Scavenger 1st Stage Tails 29 71% 60
HT Scavenger Total Tails 32 60 90 2.92 0 0 60 90 2.92 100.0% 100.0%

Reslurrification Water W6 0 0 2.65 111 488 111 488 1.00 0.0% 0.0%
HT Scav HIMS Feed 33 0.2063158 25

HT Scav HIMS Con 34 70% 17
HT Scav HIMS Tails (High Mn Con) 35 30% 7
Total Dry Con - CON LOADOUT 64 761

The mass balance and flowsheet are based on the fact that the six (6) lines of production are converted from
the existing High Tension Separators to six (6) lines of magnetic separators (Manganese reduction lines).
After more than 46 years of operation this plant is well known and the description will be focused on the
changes made in the process plant.
Milling Methodology and Concentrate Handling
The plan site for the mill complex is shown in the Figure 17.4 below.
Figure 17.4: Existing Mill Complex
Crushing and Ore Handling
The ore will be hauled by 240 short tonne mine trucks. The trucks will discharge into two 54” x 74” primary
gyratory crushers each driven by a 335 kW (450 HP) motor, at a nominal feed rate of 2,150 tph. Each crusher
has a capacity of 3861 tph so only one is required to operate. The ore will be crushed at minus 8’’ (203 mm)
and will be transferred by two 60’’ belt conveyors to bins ahead of the grinding circuit. Two new hydraulic
hammers (one for each crusher) will break down any oversize rocks in the crusher cavity.

The capacity of the crushing circuit is limited at 3200 tph by the transfer conveyors. The crude ore storage
bins have to be kept full at all time. There is an excess of 1000 tph compared to the mills throughput to build
the storage in the event of feed interruption.
A belt magnet system will be installed to remove the tramp metal and avoid stopping the transfer conveyers
for metal removal on the belt.
The primary gyratory crusher auxiliaries will include a crusher lubrication unit (including oil heaters and oil
cooling fans), a spare main shaft and a complete set of relining platforms and liners removal pans. To facilitate
maintenance and operation, the crusher area is serviced by an overhead crane.

Figure 17.5: Primary Crushing Rock Breaker – New Rock Breaker Installation Proposition Layout

Grinding
From the 22 000 metric tonne capacity crude ore storage bin, the ore is fed by vibratory feeders onto the mill
feed conveyors. Each feeds one of the six fully autogenous mills at a rate up to 400 mt per hour per mill. The
dimension of each mill is 24 feet in diameter and 8 feet long.
Mills discharge through a trommel screen where the screen undersize is fed into a wet vibrating screen with
1 mm width poly slots. Screen undersize is pumped to the spirals and screen oversize is pumped back into
the mills. To reduce downtime, the recirculation pumps lining will be replaced.
The grinding process is wet, fully autogenous and requires no mechanical or chemical additives. To increase
the availability of the grinding circuit, all the Mill gear will be replaced (Mills 1 to 5 were completed prior to the
plant closure – Mill 6 will be done prior to restart). Secondly, for 5 of the 6 lines (line 4 already completed) the
mill feed chute and feed conveyor will be modified to improve material flow and reduce the water addition
that was required to avoid chute plugging.
Wet Concentration and Tails Thickener
The first stage of the concentration circuit is the rougher spirals. A total of 960 spirals (160 for each line),
supplied by Mineral Technologies were installed in 1998. Spiral tails are pumped to a cyclone where the
underflow is pumped to the tailings basin. The overflow is thickened in a 280 ft diameter thickener using
flocculent to 35% solids (as original operation) before being pumped to the tailings basin with cyclone
underflow. The solids concentration will gradually be increased to 45% to limit the amount of fresh water
required to make up for the water sent to the tailings. With the characteristics of the tailings and the
dimensions of the thickener, reaching 45% is considered feasible. However, there is an uncertainty that the
added load on the rake and the torque increase can be handled by the equipment without modifications. To
mitigate this risk, the increase in solids ratio will be performed gradually during the first year and the
equipment will be closely monitored.
The pre-concentrated iron-ore from the rougher spirals enters the hydro separators where the lighter waste
material is "floated" from the denser iron-ore concentrate through the use of a concurrent upflow of water
through a bed of concentrate. The iron-ore concentrate continues to the drum filters, the tails go to the
hydrosizer overflow cyclone. A total of 12 Linatex hydrosizers (2 by line), with dimension of 7 feet by 7 feet
were installed in 1997.
The pre-concentrate from the hydro separators is deposited on 12 drum filters (2 by line) rotating drum filters
where steam and vacuum pressure is used to remove excess water prior to drying the concentrate. The drum

filters are used to reduce the amount of water / moisture in the concentrate so the fluo-solid dryers will
consume less energy (bunker c) in the drying process.
Dryers
Moist concentrate from drum filters enters the fluo-solid dryers and is dried using hot air which fluidizes a bed
of concentrate. A combination of electrically generated steam indirectly and bunker c fuel burners directly
heat the fluidizing air. Each fluo-solid dryer can operate independently, but to meet plant capacity rates
require that two be operated simultaneously.
The dry pre-concentrate is transferred to the dry concentrate storage bin before going to the dry magnetic
concentration.
These dryers were installed in 1963 and some work will be completed before restarting the plant. Refractory
and structural work will be performed in Dryer #2. In addition, the dryers’ combustion system will be upgraded
to improve safety, reliability, efficiency and maintainability and ease of operation.
The dryers off-gas scrubbers will be retrofitted to a rod deck venturi technology in order to meet the required
dust emission rates.
Dry Concentration
The dry pre-concentre is processed by two series stages of low intensity magnetic separation (“LIMS”), and
the LIMS tails are processed by two series stages of high intensity magnetic separation (HIMS).
The Low Intensity Magnetic Separators (LIMS) are fed with ore by the means of the LIMS Vibratory Feeders.
The LIMS is the first stage of the Mn Removal Circuit where the magnetite is separated from the ore to
produce the LIMS concentrate, while the LIMS tails fall to the second stage of the Mn Removal Circuit, the
HIMS Roughers.
The Rougher HIMS Separator is a double drum unit. It receives the LIMS tails which fall by gravity through
the two Rougher feed chutes. The Rougher separator is the second stage of the Mn Removal Circuit where
hematite is separated from silica and pyrolusite to produce the Rougher HIMS Concentrate, while the
Rougher tails that contain silica, pyrolusite and some remaining hematite are sent to the third stage of the
Mn Removal Circuit, the Scavenger HIMS.

The Scavenger HIMS receives the Rougher Separators tails which fall by gravity through the
Scavenger HIMS feed chute. The Scavenger HIMS is the last processing stage of the Mn Removal Circuit
where hematite is separated from silica and pyrolusite in order to produce the Scavenger HIMS Concentrate,
while the Scavenger tails containing most of the silica and pyrolusite fall on the tails conveyor #20.
The dry tails from the Mn reduction circuit enters in of High Tension (HT) separator scavengers. The tail is
final tails and the concentrate is going to a HIMS for produce the final concentrate. The separator tails, high
manganese by product will be stockpiled. The Scavenger HIMS final concentrate is mixed with others
concentrate on the loadout conveyer.
High Manganese By-Product
During processing, a high manganese by-product will be created at rate of 7 tonne/hr and stored in high
manganese stockpile located approximately 250 meters northeast of the concentrator building as shown in
Figure 17.5.

Figure 17.6: High Manganese By-Product Storage

The stockpile will be constructed to a maximum elevation of 7 meter high with gradual slopes on the sides to
reduce the effect of fugitive dust. The chemistry of the manganese stockpile is % Fe (low: 33.38, high: 43.36),
SiO2 (low: 4.14, high; 5.39), and % Mn (low: 25.31, high: 36.02) with a size distribution of +48 M (50% retain),
-48 M+100 M (30% retain), -100 M+200 M (15% retain) and -200 M (5% retain). Tacora plans to develop a
sales strategy to sell and ship this material in future years.
The largest concern with the manganese stockpile at the Scully Mine would be fugitive dust. While the Scully
Mine is operating, Tacora will have a program in place to ensure the stockpile is regularly wetted. If the
manganese by-product is not sold as ore, at closure the pile will be contoured and seeded to establish a
vegetative cover to prevent subsequent erosion and dust dispersion.
Concentrate Silo Load-Out
The concentrate from dry concentration is transferred by a belt conveyor to the load-out silos over the rail
track. The transfer conveyor is equipped with a belt scale to monitor plant production. From the load-out silos,
the concentrate is loaded into a freight train for transportation to the port facilities. The load-out silos are
equipped with a dust collection system. Out of the five (5) 3000 metric tonne capacity silos, four (4) were
used as live storage to fill freight trains (up to 130 cars) while the fifth silo was used as a manual top-off. The
new operation will be based on 168 cars freight trains. Two new silos at 3000 metric tonne capacity will be
installed to store the required concentrate. This represents more storage capacity than required but it will
provide the plant with additional buffer storage.

Figure 17.7: Train Load-Out Facilities Storage Capacity Upgrade from 124 to 168 Rail Cars

Tailings Management
The tailings thickener overflow is directed to the process water tank. The tailings thickener feed is dosed with
flocculants to avoid fines build-up in the process water distribution system. The tailings thickener underflow,
at around 45% solids, is pumped to the tailings disposal pumpbox for pumping to the tailings pond. The slurry
is pumped through three (3) lines with each having two (2) pumps connected in series located in the milling
building. A third stage of pump was installed but is bypassed. In addition, on each line, there are a total of
10 booster pumps located along the pipeline between the plant and the tailings disposal area.
Water Balances
Based on the design criteria developed for the process plant and on the proposed flowsheet, mass and water
balances have been developed for a production of 5.8 Mtpy of concentrate produced and for a production of
6.1 Mtpy.

Figure 17.8: Simplified Mill Water Balance (5.8 Mtpy)

Water
Feed 2150 96.0%

2240 394
4000
USGPM H2O
Grinding Feed 2150 68.3%
3148 4394
22980
USGPM H2O
Spiral/Gravity Circuit Con 809 70.0% Tails 1171 50.0%
1156 1527 2341 5155
Thickener 170 3.5%

Filter Cake 809 96.0% 4870 20692
843 148
Thickener 0 0.0%
313 1379
Dryer Product 809 100%
809 0 High Mn Stock 2 100%
148 2 0
USGPM H2O
Dry Mag Sep Con 744 100% Tails 58 35.0% 1399 48.5% Total Tails Discharge
744 0 167 477 2887 6549
477 Total Thickener 170 3.3%

USGPM H2O 5183 22071
Tails
Water Header 21154

(Reclaimed Water) USGPM H2O
Process Water 27456

Load out Final Con 743 100.0% Consumption USGPM H2O
743 28
Required Fresh 6303
Water USGPM H2O
5.8 M MTPY @ 89% Plant Availability 2,948,228,081 US Gallons per year

Figure 17.9: Simplified Mill Water Balance (6.1 Mtpy)
MTPH SOLIDS % SOL

MTPH SLURRY USGPM H2O
Water
Feed 2200 96.0%

2292 404
4000
USGPM H2O
Grinding Feed 2200 68.7%
3200 4404
23398
USGPM H2O
Spiral/Gravity Circuit Con 828 70.0% Tails 1198 50.0%
1183 1562 2395 5273
Thickener 174 3.5%

Filter Cake 828 96.0% 4936 20967
862 152
Thickener 0 0.0%
320 1410
Dryer Product 828 100%
828 0 High Mn Stock 7 100%
152 7 0
USGPM H2O
Dry Mag Sep Con 761 100% Tails 60 35.0% 1431 48.5% Total Tails Discharge
761 0 170 488 2953 6699
488 Total Thickener 174 3.3%

USGPM H2O 5256 22377
Tails
Water Header 21439

(Reclaimed Water) USGPM H2O
Process Water 27886

Load out Final Con 761 100.0% Consumption USGPM H2O
761 0
Required Fresh 6447
Water USGPM H2O
6.13 M MTPY @ 92% Plant Availability 3,015,804,425 US Gallons per year

Instrumentation and Controls
Instrumentation
Existing instruments will be reused as the plant was operational before shut down and no major problems
with the existing instruments were reported. For safety reasons, all 21 nuclear sources from the instruments
were removed at shut-down so new ones will be bought and installed. General inspection of all instruments
will be performed and if required instruments will be removed, repaired and calibrated to achieve operational
readiness.
In the dryer area due to modernisation of the controls instruments will need to be either replaced with new
ones or retrofitted to connect to the new control circuits. Detailed engineering will be required for the work to
be done.
Lines 3 to 6 will be converted to manganese reduction (magnetic separation) and all instruments coming with
it will be integrated into the new PLC.
In the load-out area new instruments (level transmitters, plugged chute, limit switches, etc.) will be provided
for the 2 new bins. Additional pull cords will be provided for the extended tripper conveyor and some
instruments will be relocated as needed. All existing limit switches for the car cover opening system will be
relocated and rewired.
Controls
Existing plant controls are based on old and obsolete Rockwell PLC 5 technology. Some areas have been
already modernized by previous owner, but many strategic areas still rely on the old technology. Rockwell
has developed a replacement kit that saves a lot of time at installation and does not require modification of
the existing wiring. The replacement kit will be used in order to minimize the impact on the existing wiring and
to avoid confusions and wire misplacements. Migration of the existing programming onto new platform will
also be performed. Major upgrade of servers, firewalls and operator stations will be performed in order to
bring the level of automation and controls up to the today’s standards.
Dryers will have major upgrade on the control system and brand new panels with new
Rockwell ControlLogix PLC will be installed. New programming shall be developed based on updated control
philosophy and detailed design of the burner management system.

Manganese reduction lines 3 to 6 will be equipped with new PLC’s and control system based on the
equipment supplier’s control philosophy.
Load-out PLC is old and will be replaced. The two new bins added will be integrated into this PLC and
programming will be modified to suit the new operation.
The plant communication protocol will be migrated to Ethernet TCP/IP.

18 PROJECT INFRASTRUCTURES
General
The vast majority of the existing plant infrastructure will be reused. See Chapter 5 for detailed description.
Most of these infrastructures are more or less in the same condition as they were when the plant was shut
down; nevertheless, some repair work will be necessary prior to the plant restart.
Rail & Port Infrastructure
As during original operations, transportation & handling of the concentrate will be done by rail using the same
railcars.
On Site Track
The track owned by Tacora includes all tracks and sidings up to the connection with the former Northern
Lands Line which is now the property of QNS&L. The railway network includes some internal siding tracks
such as:
• Tank Farm track;
• Loop track;
• Car Shop Repair track;
• Material Storage track.
The tank farm and loop tracks were inspected by a third-party firm and a report with recommended repairs
was issued. These repair costs are included in the CAPEX.
Railcars
The original railcars were inspected by a third-party firm and 365 were found to be in acceptable condition,
out of a total of 427 available cars. These cars will be refurbished as recommended in the inspection report.
Two trains of 168 cars each will be used to ship the concentrate leaving 29 cars as spares. The estimated
repair costs are included in the CAPEX estimate. Purchasing or leasing agreement was still under negotiation
at the time of the writing of this report.

The car loading and unloading will be as per the original operations (top loading / bottom unloading using the
existing hatch opening mechanism).
Main Railway
The on-site track connects to the QNS&L track at the Wabush Lake junction, east of the overpass over route
H-500. Trains will be brought at this junction and will be picked up and transported to Sept-Iles Arnaud
junction under the responsibility of QNS&L.
Train Unloading and Ship Loading
Trains will be picked up by SFPPN at Arnaud junction and moved to the existing unloading facilities at Pointe-
Noire where the concentrate will be unloaded and stockpiled. The concentrate will be reclaimed by the
refurbished existing (or new) reclaimer and then conveyed to either the existing dock #30 or the new multi-
user dock and shiploader (#35). The refurbishment of existing equipment as well as the operations in Pointe-
Noire will be the responsibility of SFPPN. A separate study was performed by Ausenco to confirm the logistics
of concentrate handling and transportation.
Buildings (Process and Non-Process)
Structural Repairs
Several areas of the plant will require structural repairs prior to start-up. In 2012, BBA consultants performed
a detailed structural audit. The audit identified 480 items and each were assigned a risk rating and repair
timeline; 66 of them were classified as requiring attention within a 1-year period. Tacora has reviewed this
list of 66 critical items and advised that repairs to 21 items were already completed. Of the 45 items remaining,
13 were identified as needing to be completed prior to start-up.
Additionally, 18 items were included in the Structural Preventive Maintenance OPEX Costs for 2014 by Cliffs;
Tacora has identified 2 out of these 18 items to be added to the critical items list, bringing the total of structural
items requiring repair to 15. The costs associated with the repairs of these 15 items are included in the
CAPEX estimate.
It should be noted that Ausenco did not assess the criticality of the identified structural repairs and relied
entirely upon Tacora’s assessment of risk for these items related to start-up. It must be emphasized that a
thorough structural assessment of the plant facilities be undertaken prior to any start-up operations.

Tailings Impoundment Area (TIA)
The proposed mill will produce approximately 283 million tonnes of tailings over a period of 27 years (2018 –
end of 2044). The production will commence in November 2018, and the approximate tailings volume
pumped to the TIA will ramp up as follows:
Table 18.1: Tailings Production per Year
Tailings production
Year (X 106 metric tonnes)
Oct 01 – Dec 31, 2018 : 1.1
2019 : 8.6
2020 : 10.2
2021 : 10.8
2022 : 11.5
2023 – 2044 : 9.7 to 12.5 per year
(average of 11.2)
Between 2023 and 2044, the tailings output will vary between 9.7 to 12.5 million tonnes per year, with an
average of 11.2 million tonnes per year. Refer to Section 17 for detailed tailings production information.
The tailings are considered low risk tailings from an acid leach and chemical standpoint; therefore, liners will
not be required for tailings storage. As no flotation stream is involved in the process of the tailings, the material
pumped to the TIA is relatively coarse, allowing for good drainage and use as construction material for future
embankments.
The existing storage capacity, with the current dikes, is sufficient for at least 7 years of storage. Capital cost,
in the form of new equipment or dike raises, is not required for this period and it is assumed that the current
pumping capacity is sufficient to discharge at the planned locations.

Drawings 102114-006-C-0101 to 102114-006-C-0110 show the conceptual TIA configuration, including

important construction milestones. The drawings can be found in the Section ‘s appendices. The figures are
presented in imperial to maintain consistency with previous works and elevations on the tailings, and avoid
conversion errors/discrepancies. Future reference in this section to these drawing will be abbreviated to the
numbers following the “C-” in the drawing identification. Shown in the figures are the following stages of
tailings discharge and dike construction:
• Drawings C-0109 to C-0110
o The five-year, 52 million tonne storage is shown. Approximately one third of South Flora
Lake is filled. Line 1 will only be used as needed when the other lines are under
maintenance. This is to avoid tailings reaching North Flora Lake or impacting the
reclaimed tailings area. Slope angles were based on the previous 5-year filling plan
issued in 2014 (Golder Associates, April 2014, report number 002-12-1221-0093 RA
Rev0). These slopes were chosen as the start-up tailings feed is expected to be
approximately the same density as the previous operations, and gradually ramped up to
higher densities.
o The existing storage is estimated to be sufficient until December 31, 2025 without
impacting North Flora or the 1,821 ft drainage channel contour. Due to the increased
slurry thickness expected compared to previous operations, the tailings beach should be
surveyed every 6 months to 1 year to update these projections with realistic tailings beach
angles.

Figure 18.1: Flora Lake Tailings Storage Facility – Future Tailings Storage- Estimated Tailings Surface on 31 Dec 2023 – Capacity =
52 Million Tonnes(5 years)

Figure 18.2: Flora Lake Tailings Storage Facilities Profiles from Discharge Points to North and South Flora Lake Capacity =
52 Million Tonnes (5 years)

Figure 18.3: Flora Lake Tailings Storage Facilities Current Available Storage (7.25 Years) – Estimated Tailings Surface on 31 Dec 2025 –
Capacity = 78.4 Million Tonnes

Figure 18.4: Flora Lake Tailings Storage Facilities Profiles from Discharge Points to North and South Flora Lake Capacity =
78.4 Million Tonnes

o Pre 2025: The extension of the south dike will start before year 2025. Starter dyke
required and under drainage recommended. Stripping required for starter dike and
recommended underlayer foundation.
o 2025 – 2034: The south-dike extension will be continuously raised upstream until
the dike reaches 1,950 feet. During this period, the 1,821 feet contour on the east
side of the tailings will be exceeded. South Flora Lake will be completely filled.
o Pre 2034: The south-dike extension will be continued further south. Starter dike
required, and under drainage recommended. Stripping required for starter dike and
recommended underlayer foundation.

Figure 18.5: Flora Lake Tailings Storage Facilities – Future Dike Expansion and Tailings Storage – estimated Tailings Surface on 31 Dec
2034 – Capacity = 184 Million Tonnes

Figure 18.6: Flora Lake Tailings Storage Facilities Cross Sections of Starter Dike and Upstream Raise South Extension Capacity = 184
Million Tonnes

o 2034 – 2044 (Stage 1): The south extension dike will be continued further south past
South Flora Lake. The first bench will be continuously raised upstream until an
elevation of 1,950 feet.
o 2034 – 2044 (Stage 2): The second bench will be continuously raised upstream until
reaching 1,990 feet by the end of LOM.

Figure 18.7: Flora Lake Tailings Storage Facilities – Future Dike Expansion and Tailings Storage – Estimated Final Tailings Surface at End
of LOM (31 Dec 2044) – Capacity = 297 Million Tonnes

Figure 18.8: Flora Lake Tailings Storage Facilities Cross Sections of Starter Dike and Upstream Raise – South Extension 2: Stage 1 and 2
– Capacity = 297 Million Tonnes

The above configuration is contingent on geotechnical investigations, detailed engineering, and stability
analysis and permitting. Since new construction is not planned for at least five years, the studies and detailed
engineering can be carried out during the initial four years of operation for the first south extension, and after
year 2030 for the second south extension. Given the low cost of upstream construction methods using
tailings, adjustments resulting from geotechnical or stability studies are not expected to result in cost
increases/decreases beyond the accuracy of the current feasibility study.
Starter dams will be constructed for the new south extensions, and the stripped material stockpiled for future
reclamation or used for additional organic matter as part of ongoing progressive rehabilitation. Stripping or
grubbing of the basin area is not anticipated. In order to improve drainage and reduce compaction costs from
previous years of operations, the tailings will be cycloned in non-freezing months at the TIA to provide
construction materials with suitable permeability, density, and drainage properties. For new constructions,
this should help alleviate some of the previous operation’s seepage issues that were observed in the faces
of the existing embankments. While not required, or costed in the current study, a drainage layer that extends
from under the starter dike, and out into the tailings basin, may improve drainage and help reduce seepage
from the face of new dikes. It is recommended to review this option in detailed engineering and optimization.
For the current study, it is assumed that the resulting cycloned material will be sufficient for dike construction.
During detailed scheduling, it may be necessary to compensate with some non-cycloned material, and require
additional compaction.
Embankment construction should be carried out in non-freezing months whenever possible to avoid
construction over undrained tailings with high ice content. Due to the constricted construction period, raises
should not exceed more than 3 m (10 feet) per year to allow drainage and pore pressure dissipation. Planning
of the starter dam and dike raise schedule should account for this, unless supported by additional
geotechnical and seepage studies.
During start-up, the current thickener will produce pulps of 30 to 35% solids by weight, and increased
gradually to the target solid thickness of 45% by weight. The increased solids content of the slurry will result
in changes in the tailings beach slopes from those observed during the past operations. The tailings beach
slope should be regularly surveyed, and adjustments made to the future estimated storage capacity.
As a contingency for potential variance in storage, a conservative beach tailings density of 1.6 metric
tonnes/m³ is used for the storage estimates. Deep, consolidated tailings are likely to achieve a higher bulk
density, up to 1.9 tonnes/m³± locally, resulting in lower storage volume requirements and costs for dam
construction thus prolonging the serviceable life of the existing and future storage capacity.

Discharge of the tailings is to be carried out using two lines, that will be relocated regularly to allow drainage
of the coarse material near the discharge point, and to avoid thick layers of frozen tailings that may not fully
thaw during the future construction periods.
The decant water will report indirectly to North Flora Lake (NFL) via South Flora Lake (SFL). Tailings will not
be deposited directly into North Flora Lake, which will act primarily as a polishing system for the decant water
and help prevent suspended sediments from continuing downstream towards Wabush Lake.
Geotechnical
In addition to required studies discussed in Section 18.4, a geotechnical study will be required at the load out
area for the design of the new silos foundations.
Electrical Installations
46 kV Power Distribution
Scully Mine is fed from Wabush Terminal Station by two power lines at 46 kV. Each line can individually
provide full load for the mine operation. At present, line 1 is not in use. Line 2 is energized and in good shape.
The two power lines feed the main outdoor Switchyard that distributes the power at 46 kV to the Scully Mine,
Tailings, Pumphouse and the Mill Outdoor Switchyard. Both Main Switchyard and Mill Switchyard are
equipped with old 46 kV breakers that do not meet the technical requirements of the network and will require
replacement. New breakers are already available at site and kept in very good shape. The tailings power line
has been kept energized during the extended shut-down period and is presently in good working order. The
mine power line was repaired and energized. Some parts of the line are under water in the mine pit and their
condition can’t be evaluated until the mine is dewatered. Pumphouse power line will also require testing and
repairs before energization.
Mill Transformer Switchyard is equipped with aerial bus bar supported by metal structure and insulators.
There are six main power transformers connected to the bus bar via 46 kV breakers. Transformers T1 & T2
are 46/4.16 kV-10/13.3/16.6 MVA and provide power to a double busbar, 3,000 A, 4.16 kV switchgear.
Transformer T4 is 46/4.16 kV- 20 MVA and feeds directly Electric Boiler No.1. Transformers T5 & T6 are
46/13.8 kV- 15/20/25 MVA and feed a double busbar, 1,200 A switchgear that provides power to all low
voltage (600 V and below) loads. Transformer T5, part of the distribution system and several dry-type
13.8/0.6 kV- 1 MVA transformers were kept operational during the shut-down period to provide essential
services to the plant and are in good working order.

Transformer T6 had a fault condition and was disconnected from the grid prior to the main shut-down and
has not been investigated or checked since. Based on the historic information available, the main possible
cause of the shut-down may be moisture in the 13.8 kV busbar. In general, all busbars from the main outdoor
transformers have to be checked for moisture and if needed, gaskets have to be replaced and bus
compartments dried out before any energization.
4.16 kV & 600 V Power Distribution
The majority of the equipment will be reused. All major cables, transformers, MCC and switchgears will be
inspected and tested before re-energized. All E-rooms will require cleaning and painting.
The existing emergency generators have not been maintained during the shut-down and are to be replaced
with new ones. Based on the historical data of the past few years, while the plant was in operation it was
decided to install only two generators of 1.3 MW capacity and the third one will only be installed later if load
increases.
All Variable Speed Drives presently installed in the plant are old Rockwell 1336 model and are no longer
supported by the manufacturer. Spare parts are unavailable. All drives will be replaced by the new Rockwell
line Powerflex 755 or equivalents.
In the manganese reduction area, all power distribution related to lines 3 to 6 will be removed including MCC
16-13B and 16-13C. New equipment, including Variable Speed Drives, will be installed.
Instrumentation and Controls
Instrumentation
All instruments will be reused. No major addition or replacement is deemed necessary. Some cleaning,
calibration and testing will be required on some of the instruments.
During the shut-down and for safety reasons, 21 nuclear sources have been removed. New nuclear sources
of the same type as the ones before will have to be purchased and installed.

Controls
The majority of the PLC’s are old and no longer supported (model Rockwell PLC 5). They will all be replaced
and the cost is included in the CAPEX estimate. Previous owners have started that process, but there are
some critical process areas that are still using the old PLC 5.
During the PLC replacement process, the old proprietary communication protocol will also have to be
replaced with the new Ethernet (TCP/IP) that is more common and user friendly.
The main control room will require major upgrade. New work-stations, server, historian and firewall will be
installed to boost the security of the system and comfort for the operators (associated cost included in the
CAPEX).
Existing burner management drying system will be replaced with new, fully automated and PLC integrated
system and are included in the CAPEX estimates.

19 MARKET STUDY
AME has been engaged by Tacora to produce an industry report on the iron ore industry, including an
overview of the Scully Mine. The report provides an overview of the supply and demand dynamics of the iron
ore industry, the different grades of iron ore sinter fines and concentrate, as well as short term price outlook.
The report also introduces the Scully Mine, and how its costs and product fit into the market.
Tacora purchased certain assets from Cliffs’ Scully Mine in July 2017. From this, they have developed the
Scully Mine project which aims to produce a high-grade iron ore concentrate with an iron content greater than
65% from the restart of mining operations. The product was considered to be a high-quality iron ore
concentrate in the past and is expected to be a high in iron grade, and low in impurities such as silica, alumina
and phosphorus, characteristics that are desirable, and generally attract a premium to the CFR
China 65% benchmark. The product will be exported into the seaborne market through Pointe-Noire, near
Sept-Iles, Quebec. The quality adjusted CFR China costs for the project are expected to be lower than other
Canadian concentrate producers.
Iron ore is primarily used in the steel industry and is one of the key raw materials in the iron making process;
along with coke and limestone in a blast furnace, and natural gas or coal in a direct reduction furnace. The
global iron ore market is expected to be around 2.1 Bt in 2017, and is forecast to grow at a CAGR of around
2%.
China remains the largest market for iron ore globally, and is forecast to account for approximately 58% in
2017. Chinese domestic steel consumption is estimated to increase by around 36 Mt in 2017 to around
717 Mt. AME estimates Chinese crude steel supply to increase by around 3% to approximately 835 Mt in
2017. Chinese total iron ore demand is estimated to be just over 1.2 Bt in 2017, an almost 4% increase on
2016. Meanwhile, Chinese demand for seaborne iron ore is expected to increase by over 2% in 2017 to
991 Mt when compared to 2016, despite domestic production increasing for the first time since 2013.
Increased profitability, and renewed focus of environmental regulation has resulted in a structural change in
the consumption of iron ore in China, with lower grade iron ore receiving larger discounts to the CFR China
62% benchmark, while higher grade iron in earning larger premiums to the CFR China 62% benchmark.
There has been an increased focus on high grade iron ore, which has the advantages of increasing blast
furnace productivity, while at the same time, reducing pollution from blast furnaces and sintering operations,
which can be the most polluting part of the steel making process.
Elsewhere, elsewhere, traditional iron ore demand markets in Europe and North Asia, are expected to see
modest demand growth with CAGRs of around 1%. India is expected to be the fastest growing consumer of

iron ore with CAGR of around 9% from 2017-2020, to become the second largest consumer, overtaking
Japan.
Iron ore supply is expected to increase by around 3% in 2017, on the back of increased demand from steel
producers. This growth is expected to moderate through to 2020 achieving a CAGR of around 1% to reach
almost 2.2 Bt.
Iron ore supply is highly concentrated, with just three countries, Australia, Brazil and China, accounting for
around 69% in 2016, and the four largest companies accounting for around 50% of production. Brazil is the
largest producer of high grade iron ores, and in turn, Brazil’s largest producer, Vale, is the largest producer
of high grade ores. The next largest producer of high grade ore is China, however, production is expected to
decline over the period to 2020, as high cost production exits the market in favour of low cost imported
material. The two largest sources of new iron ore supply are Hancock's Roy Hill in Australia and Vale's S11D
in Brazil; however, only S11D will produce high grade ores; whereas Roy Hill is producing comparably lower
grade material. In almost all cases outside Brazil, the ability to produce higher grade ores requires
benefication through processing methods such as those used in Canada and at the Scully Mine. Throughout
2017, the CFR China 62% iron ore spot price has been volatile, reaching a high USD 95/t (CAD 122.4/t)
towards the end of February and ranging to lows around USD 60/t (CAD 77.3/t). AME forecasts the price to
average USD 71/t in 2017 (CAD 91.5/t), reflecting an expectation that Chinese demand for higher grade and
quality iron ore will continue with the focus on increasing productivity, and also to offset higher coking coal
costs. As a result of new low-cost supply, the price is expected to dip to USD 60/t (CAD 77.3/t) in 2018 and
2019 and as new low cost supply is absorbed, the price is expected to increase again to USD 61/t (CAD78.6/t)
in 2020. Over the longer term, AME expects demand and supply balance with long-term iron ore prices
expected to be structurally higher than historical levels, mainly on the back of increased operating costs.
The premium for high grade ores with 65% iron content have increased throughout 2017, to reach a peak in
the third quarter of over 30% when compared against the price for iron ore containing 62% iron. AME expects
this pricing spread to ease marginally in the short term, but remain elevated above long-term levels, as steel
mills focus on productivity with an average of around 20%. The long-term shift is expected to be driven by
ongoing drive to reduce pollution through increased productivity and efficiency in integrated steel works, by
focusing on higher grade raw materials.

Material Analysis
Description and Key Uses
• Iron ore is primarily used in the steel industry and is one of the key raw materials in the iron making
process; along with coke and limestone in a blast furnace (“BF”), and natural gas or coal in a direct
reduction furnace. The blast furnace is the most commonly used iron making process. Blast furnace
feedstocks include DSO lump and sinter, as well as blast furnace grade pellets agglomerated from
pellet feed. In China, blast furnaces continue to be the dominant steel-producing method. In a blast
furnace, iron ore is converted into primary iron (hot metal/pig iron) which is around 96% iron, and
subsequently becomes feed material for Basic Oxygen Furnaces (“BOF”) in the production of steel.
Pig iron can also be used in Electric Arc Furnaces (“EAF”).
• Direct reduction is a process used to make solid or molten iron products by using natural gas or coal
as a reductant. The most common feed material for the direct reduction process is pellets produced
from high grade magnetite concentrate. Direct reduction plants are generally operated in the Middle
East as the region has access to inexpensive and abundant supplies of natural gas and energy. Indian
coking coal quality is generally poor, but availability of thermal coals means some producers rely more
heavily on the direct reduction process. There are typically three products produced in a direct
reduction plant: direct-reduced iron (“DRI”), hot briquetted iron (“HBI”) and hot DRI. DRI and HBI
products, as well as scrap, are generally used as feed material in EAFs to produce molten steel.

Figure 19.1: BOF Steel Production Flow Chart
Source: AME
Steelmaking is the second step after iron making and involves the refining of the products from the iron
making stage into liquid steel. This process can be accomplished in a BOF or an EAF. The BOF process
injects gaseous oxygen into the furnace as the primary agent for auto-thermic generation of heat. This results
in the oxidation of dissolved elements like carbon, silicon, manganese and phosphorus — and to a limited
extent, the oxidation of the iron. BOF steelmaking is the most widely used production method, accounting for
around 74% of crude steel production in 2017. To produce steel through BOF, the proportion of pig iron as
part of the feed is typically over 70%, with scrap accounting for the remainder of the feed.
EAF, on the other hand, is generally included in the basic design of a typical mini-mill plant for melting scrap
or for taking sponge iron from a DRI plant. The main advantage of the arc furnace lies in its flexibility in
accepting charge materials in any proportion, namely scrap, molten iron, pre-reduced material and pellets. It
is possible to have precise control of the refining reactions because the electric power can be carefully
controlled to impart heat to the bath at different desired rates. The EAF produces molten steel, which is used
for high-grade alloy steel-cutting tools, die steels, and stainless steel, where the metal must be refined and
melted under rigidly controlled conditions to minimise the introduction of impurities.

Figure 19.2: EAF Steel Production Flow Chart
Source: AME
2.2 Iron Ore Types
Iron ore is generally produced from two types of ores: haematite and magnetite. The type of iron ore deposit
will often determine the final iron ore product that can be produced. Magnetite ores are mostly lower in iron
content than haematite and as such, must be beneficiated to produce finer grained concentrate products.
Haematite
Haematite ore (Fe2O3) is a high grade ore mainly found in large deposits of haematite rock formed by the
in-situ enrichment of a protore already enriched in iron, most commonly a banded iron formation (“BIF”) which
consists of thin layers of iron oxides. Generally, the range of ore head grades, or contained iron content, for
haematite deposits is greater than 55% Fe and may reach levels up to 70% Fe. Haematite ore has commonly
been found in large-scale deposits in Brazil, Australia and India. When haematite ore is of sufficient contained
iron content, it may be mined and processed using crushing and screening procedures before being exported
for use in steel mills as direct ship ore (DSO).

Magnetite
Magnetite (Fe3O4) deposits have relatively lower contained iron content than haematite deposits, typically
grading between 25-40% Fe. It is mainly found in BIFs located in several countries, including China, Russia,
Ukraine, and the Americas.
• Due to its lower iron content compared to haematite, magnetite ore requires beneficiation to be
converted into a higher grade concentrate product to be viable for commercial use. Magnetite is
processed into an iron ore concentrate via the beneficiation process. This concentrate product
subsequently becomes feedstock for sinter or pellets, depending on grain size, which are used in the
production of steel.
• Magnetite is generally magnetic and possesses polarity in its naturally occurring state. The magnetic
properties of magnetite permit magnetic separation techniques to produce iron concentrates. Due to
its lower iron content compared to haematite ores, magnetite requires an energy intensive grinding
process to liberate the iron ore from its associated natural matrix. Different ore bodies require different
grind sizes to allow adequate concentration of the iron content.
• The grinding phase is a costly process in the beneficiation stage which reduces the ore to a very fine
size (roughly consistent with a cosmetic face powder) and separates the iron from undesirable non-
iron impurities such as silica or sand. This is universally achieved through magnetic separation.
• A variety of magnetic separation techniques can be employed. Each utilises the magnetic properties
of the ore to separate the desired iron content from the undesirable non-iron materials (such as
silica/sand). Under this process, magnetite ores are typically finely grounded to <0.1mm and the
grounded ore is mixed with water to create slurry and fed through magnetic separators. Iron-bearing
material ‘sticks’ to the separator and is transferred to the next process phase while waste materials
are discarded. Plants may employ as many as five magnetic separation stages at progressively finer
grind sizes before producing a final concentrate.
Iron Ore Industry Value Chain
The most important quality of an iron ore product is the Fe grade, or contained iron content, which is required
to be within a particular range for commercial use in different steelmaking processes. While iron ore in-situ
grades vary widely within a range of 25% up to around 70%, iron ore products generally contain iron content
levels above 50% depending on the steelmaking process. The steel type is largely dictated by the amount of
processing each product must undergo before it can be used to make steel.

Figure 19.3: Iron Ore Process Flow
Source: AME
Lump
Lump ores, derived from DSO deposits which are typically haematite and/or goethite rich, are naturally
occurring, unbeneficiated coarser lumps of iron ore. Lump products are commonly over 6.3mm and under
31.5mm in size. Upon crushing and screening of the ore, lump ores are shipped directly to the steel mills, at
which point the product is further screened by size before being fed into the blast furnace. Lump ores that do
not break into smaller pieces during transportation and do not quickly decrepitate (break down under thermal
load) in the blast furnace are highly valued by steel makers. Lump ores typically command a premium over
fines as the product can be directly charged into the blast furnace and relatively fewer deposits worldwide
produce lump ore.
Lump ores suitable for direct reduction plants — which require a high percentage of iron concentration, low
acid impurity and very low friability feed — are even more limited. Currently, major lump-producing countries
include Australia, South Africa, Brazil and India.

Sinter Fines
Sinter fines make up the bulk of the world’s ROM ore supply, estimated to be around 53% for 2017. Due to
their small size (below 6mm), fines are generally considered to be unsuitable for use in a blast furnace without
first being processed. Fines are agglomerated into coarser BF/DRI feedstock such as sinter or pellets prior
to being used in the iron making process.
Fines products containing iron content closer to the standard 62% Fe benchmark (with relatively limited
processing) are commonly derived from haematite DSO fines. These typically range from 55% to 65% Fe
grade, and generally consist of particles less than 6mm in diameter. This product is created through simple
processing stages involving screening, crushing, and sometimes wet processing if required. Primarily used
as sinter feed, fines are shipped to the customer or a downstream sinter plant for further agglomeration.
Pellet Feed/Concentrates
Pellet feed/concentrates are fines and ultra-fines which have undergone a beneficiation process. Pellet
feed/concentrates are generally beneficiated from magnetite ore and exhibits higher iron grades and lower
levels of impurities compared to DSO products. While magnetite deposits account for the vast majority of
beneficiated ore bodies, there are several notable beneficiated haematite deposits, particularly in North
America. These are the Tilden, Carol Lake, Wabush and Mont Wright deposits. These iron formations consist
mainly of haematite, magnetite and quartz whereby haematite is generally present as specularite.
Concentrates are commonly ground and used as feed to produce pellets used in both the blast furnace and
direct reduction processes of iron making. On occasion, concentrate product may be blended with sinter feed
in the sintering process.

Relative to DSO products, pellet feed/concentrate possess “value-in-use” qualities which may attract a quality
premium in pricing, including comparatively higher iron content, low impurities, and exothermic, energy-
efficient qualities in the blast furnace steelmaking process. The price premiums and discounts applied across
the value chain vary over time and in particular, higher value products such as lump and pellets are
susceptible to changing market conditions.
Pellets
Pellets are the product of an agglomeration process that mixes very fine pellet feed with a binder (e.g. a slurry
of bentonite), with the mixture rolled into “green” balls. The product is then fired on a grate or in a kiln to
produce the final indurated product, consisting of “balls” with about 8-20 mm. Similar to lump, pellets can be
charged straight into a blast furnace or into a direct reduction plant.
Pellets tend to have the highest value-in-use characteristics, and hence have generally commanded the
highest pricing premium. Furthermore, pellets generally have a more stable chemical composition and lower
levels of impurities compared to sinter or lump. Pelletising plants in the Commonwealth of Independent States
countries, Brazil, Canada and Sweden are generally located near or are adjacent to mine sites or loading
terminals.
Pellets suitable for the production of direct reduced iron generally contain a combined content of silica and
alumina below 2%. These high valued products command up to 10% premium over traditional BF grade
pellets, given the special chemical requirements
Market Overview
Iron ore is mainly used as a raw material for the manufacture of steel. Steel is one of the most widely used
materials in the world given its applications in the construction, automobile and consumer durables sectors.
Therefore, the underlying trend of iron ore demand is primarily driven by that of steel production. Over the
past decade, industrialisation and urbanisation mainly occurred in developing countries such as China.
During the course of this development, China became the world’s largest steel producer and also the largest
importer of iron ore. Increased urbanisation rates in China, along with large investments in construction,
power and infrastructure over the past fifteen years, have driven Chinese steel demand and therefore its
demand for iron ore.
From a supply perspective, iron ore is mainly mined in three countries: Australia, Brazil and China, which
account for around 69% of iron ore supply. In 2017, around 49% of the iron ore supply is estimated to come
from the “Big Four” major producers: Vale, Rio Tinto, BHP Billiton and FMG.

Overview
Despite the increase in iron ore demand in 2017, the iron ore market is still currently in a relative state of
oversupply, although less than that seen in recent years. The gradual slowdown in the world economy has
contributed to the slowdown in demand growth of iron ore since 2012.
However, with China remaining the largest market for iron ore globally, accounting for an estimated 58% in
2017, changes in China impact the global market. The three prongs of Chinese government policy, economic
stimulus, the shutting of illegal induction furnaces, and environmental restrictions, has seen iron ore
experiencing volatility in 2017. The stimulus boosted steel demand and the iron ore market in the first half of
2017. The shutting of illegal induction steel mills tightened steel supply and strengthened margins for the rest
of the industry. Finally, production restrictions to curb airborne pollution over the winter heating season has
caused steel mill to strive for maximum production and stockpiles. This lead to a shift in iron ore demand from
Chinese steel mills to focus on higher grade iron ores.
• Chinese domestic steel consumption is estimated to increase by around 36 Mt in 2017 to around

717 Mt. AME estimates Chinese crude steel supply to increase by around 3% to approximately 835 Mt
in 2017. Chinese total iron ore demand is estimated to be just over 1.2 Bt in 2017, an almost 4%
increase on 2016. Meanwhile, Chinese demand for seaborne iron ore is expected to increase by over
2% in 2017 to 991 Mt when compared to 2016, despite domestic production increasing for the first
time since 2013.
• Chinese supply is estimated to have an increase of 19 Mt in 2017. However, AME estimates Chinese
domestic iron ore production will fall again in 2018 to around 196 Mt, as current fall in iron ore prices
are believed to be insufficient to maintain the increase seen this year from Chinese.
AME expects the market to remain oversupplied over the period 2018-2020 as the market is still slowly
absorbing an increase in new, low cost supply out of Australia and Brazil. However, this oversupply is not
spread evenly across the market, with most stockpiled material being lower grade materials, generally below
60% iron. The adjustment process might take longer than expected, and this is expected to lead to sustained
operational cost pressure for many iron ore producers.
Over the longer term, demand is expected to continue to grow, driven by the urbanisation and industrialisation
of developing countries such as India or those in Southeast Asia. Demand for steel and its raw materials is
driven by new construction projects and industrial growth as their economies develop. From the supply
perspective, increasing capital intensity is to be expected, as ore grades stabilise and then gradually
decrease. As many of the most easily accessible and richest orebodies have been exploited, mining
companies are expected to encounter relatively high strip ratios and incur higher costs for mining going

forward. Also as grades decline, more iron ore miners may move towards beneficiating their ores, adding
further cost pressures to these operations. Together with potentially higher financing costs, there are
considerable entry barriers for new projects. As the current market surplus is gradually absorbed, steel
makers are increasingly focusing on high grade iron ores in order to blend out this oversupply of lower grade
material. These factors may also help in bringing the iron ore market to a relatively balanced position in the
future.
Global Crude Steel Production
Steel is one of the most commonly used metal alloys in the world due to its wide applications. In its various
forms of alloys, Steel can be customised for different requirements of construction projects at a relatively low
cost. It is also widely used in the automotive market due to its relative strength and low costs when compared
with other materials. It is estimated to contribute to around 60% of the weight of an average car. Steel is also
featured in a large variety of domestic household appliances and packaging materials. Thus, it is suggested
that the consumption for finished steel tracks that of global economic growth and in particular, the pace of
urbanisation around the world that contributes to large scale construction activities.
The steel industry largely operates on a regional basis, as freight costs are typically high in relation to the
steel product’s value, reducing its competitiveness if the product is shipped for a long distance. In addition,
potential trade routes for steel can also be challenged by import quotas, anti-dumping duties and
countervailing duty orders.
In 2016, global crude steel production rebounded from a weak start to end the year up 0.4% to 1.6Bt, as steel
output was buoyed by recovering demand and prices. In China, crude steel production rose over 1% year on
year to 808 Mt, as more steelmakers returned into the market on restored profitability. Indian crude steel
output was up around 7%, or 6.5 Mt, to 96 Mt for the year, benefitting from new projects and robust demand.
On the other hand, production from steelmakers in the UK dropped 31% to 8 Mtpa due to plant shut downs,
while Brazilian output also dropped around 9% to 30 Mtpa due to the domestic economic recession.

Figure 19.4: Estimated Crude Steel Production by Key Country and Region, 2011–2020
Source: AME
According to the World Steel Association, global crude steel production is expected to increase by around
4% to almost 1.7Bt in 2017. In 2016, growth was less than 1%. Growth in Chinese steel output is the main
driver for the recent strength, but the rapid growth anticipated in India is expected to be the largest source of
future growth. Between 2018 and 2020, AME forecasts steel supply to grow at a CAGR of around 1.6% to
almost 1.8Bt, primarily from the expanding Indian steel industry and other emerging economies.
In China, the industry continues its restructuring in an attempt consolidate and streamline production, reduce
operating costs, eliminate excess capacity and move polluting operations away from urban areas. Recent
significant mergers have included Shangang’s acquisition of Dongbei Special Steel, and Jianlong’s
acquisition of Beiman, Jianglong has announced that they will continue to try and increase. their production
capacity from 23 to 50 Mtpa through mergers and acquisitions by 2020.
In Europe, consolidation also continues with ThyssenKrupp making headlines with several asset sales as it
transitions from its core business of producing steel into a technology conglomerate. ThyssenKrupp struck a
deal to sell the Companhia Siderurgica do Atlantico SA to the Latin American steelmaker Ternium in February
2017. And then in September 2017, they agreed to merge their European steel operations with Tata Steel
Europe to form ThyssenKrupp Tata Steel, setting up what would be the second largest steelmaker in Europe.
London based metals trading and manufacturing company, Liberty House Group has purchased a number
of steelmaking assets in both the UK and Australia, including Arrium’s Whyalla works located in South
Australia. An ArcelorMittal-Marcegaglia conglomerate (AM Investco) has been selected as the preferred
bidder for ILVA’s steelmaking assets in Italy, which includes the 6 Mtpa Taranto works.

Although India is expected to achieve quick capacity growth in the forecast period, steel projects in the
country, particularly those led by players in the private sector and foreign players, are more vulnerable to
delays, primarily on acquiring the required approvals and securing financing. Korea’s POSCO eventually
cancelled its long-planned 12 Mtpa steel project in Odisha due to its land acquisition problems, and because
it was required to secure its captive iron ore mines via public auction. Metallurgical coal supply and
infrastructure for imported raw material may also pose as another bottleneck for new Indian steel capacity.
But despite these ongoing issues, India is expected to be the largest source of steel production growth of the
medium term.
Global Steel Demand Outlook
From a demand perspective, global apparent steel demand is considered to have grown by around 4% in
2017 after having increased by around 1% in 2016, thanks to a second half rebound in China. elsewhere,
demand growth in India and South East Asia, as well as recovery in European steel demand. Global steel
demand is forecast to grow at a CAGR of just under 2% from 2018 to 2020 to reach around 1.7Bt.
Figure 19.5: Estimated Steel Consumption by Key Country and Region, 2011-2020
Source: AME
As the third largest steel consumer after China and the US, India is projected to be a key growth driver in the
short term, as its economy gathers momentum amidst greater optimism under the new government, which,
among other things, has pledged to significantly boost spending on infrastructure development. Steel demand

growth in India is estimated to increase by around 6% in 2017, stronger than the growth rate of around 4%
in 2016. However, steel demand growth in India has progressively slowed from around 12% a year in 2009–
2010 as the wider economy lost pace. The growth rate for Indian steel demand is forecast to grow to around
7% year-on-year over the period 2018-2020.
The more mature economies of Japan and Korea are expected to see flat steel demand of around 64 Mt and
55 Mt respectively, whilst Europe is expected to see modest growth from an estimated 167 Mt in 2017, to
reach around 176 Mt by 2020, a modest CAGR of just under 2%.
Economies that sit in the emerging class of the development cycle include India, Indonesia, Brazil and
Vietnam. Of these countries, India has the most potential to impact steel demand in the long term. Currently
at an early stage in the development cycle, per capita steel consumption was only around 60 kg in 2014 and
GDP around USD 2,050bn. Urbanisation levels are relatively low in India at around 32%, which is also
indicative of its being low in the development cycle. China recorded the highest growth of around 10% CAGR
in steel consumption per capita over the last decade, rising to around 520kg per capita in 2014 with
urbanisation levels at 54%, and per capita consumption still well below peak usage experienced by developed
economies (~640 kg for Japan; and ~1,200 kg for South Korea). The South Korean economic model has
relied heavily on the export of steel-intensive products, such as automotive units, ships etc. The relative
disparity between South Korea’s population and the rest of the world compared to China and the rest of the
world suggests that China’s peak steel intensity is unlikely to match that of South Korea.
Steel production per capita has decreased in some parts of the developed world, as manufacturing industries
have moved offshore, and the services sector has grown to dominate GDP. The US, for example,
experienced peak crude steel production in 1973 of around 137 Mt, followed by a significant drop in
production in 1982, and then cycling between 80 Mt and 95 Mt over the last two decades. Steel consumption,
on the other hand, has maintained a relatively consistent level between the 1970s and the present, cycling
around 350 kg per capita. The discrepancy between production and consumption has been met by imported
steel, as no net loss is encountered as the steel manufacturing base shifted to less developed economies.
In more developed markets—such as the US, EU and the more developed East Asian economies—changes
in apparent steel consumption are linked more to the business cycle. This is clearly shown by the sharp
downturn in 2008 and 2009 when steel production and consumption crashed in developed economies—per
capita consumption fell to around 190kg in the US for 2009. Economies that are still moving up the economic
chain were less impacted; production in China continued to expand strongly at that time.

Iron Ore Demand
Changes and Trends in Iron Ore Demand
Global iron ore demand is forecast to increase by almost 4% in 2017 to 2,068 Mt, compared to less than 1%
growth in 2016. A continuation of this moderate recovery is expected in 2018, with forecast growth of around
2%. Demand is forecast to grow at a four year CAGR of around 2% over 2017–2020 to 2,173 Mt, as global
steel production growth recovers. This is in comparison to a CAGR of around 2% over the last five years
(2013–2017), and around 3% over the last decade.
• Over the past decade, iron ore demand was driven by the industrialisation and urbanisation of
developing countries, in particular China. During this time, Chinese iron ore demand grew at a CAGR
of 8.2% or 633 Mt to 1.2 Bt. However, as the profile of Chinese growth transitions away from exports
and investment towards domestic consumer-related and services consumption, steel production is
not expected to grow as quickly as GDP. In 2009–2013, steel use grew at a CAGR of 10% to 540kg
per capita before dipping in 2014–2015.
• Global crude steel production is estimated to have increased by less than 1% in 2016 after a drop of
around 3% in 2015. In 2017, global crude steel production is forecast to lift by almost 4% and by
around 2% in 2018. Chinese crude steel production, which accounted for around 50% of global
production in 2016, is estimated to have increased by less than 1% in 2016 to 808 Mt. AME forecasts
Chinese crude steel production, which is the dominant influence on global iron ore demand, to lift by
over 3% in 2017. China’s steel production started to recover in 2017, with cumulative steel production
up around 6% year on year for the first eight months of the year. Closure of induction furnaces
removed low quality steel from the market, and saw a temporary diversion of scrap to integrated steel
mills, but this had no lasting effect on iron ore demand. The recovery is supported by better steel
demand and steel margins, as China’s construction sector remained robust, infrastructure
development, and additionally supported by the elimination of induction furnace capacity.
• While China remains the key country for steel production, much of future steel production growth will
come from India, where steel output is estimated to have grown by over 7% in 2016 to 96 Mt, despite
problems with supply of domestic raw materials. Indian crude steel production is forecast to grow by
around 7% in 2017 and a further 7% in 2018, as infrastructure and fixed asset investment increases.
In addition, Vietnam’s steel production is forecast to almost double in 2017, followed by a 15% growth
in 2018 and 16% in 2019, due to the commissioning and ramp up of the Ha Tinh integrated steel
works.
• Although it is unlikely that another country will be able to replicate the demand boost delivered by
China in volume terms, other developing markets, such as India and Vietnam are expected to

experience rapid growth in their domestic steel industries, driving up their iron ore demand from a low
base, at a high pace over the medium term. The Indian government aims to more than double the
country’s steel capacity to 300 Mt by 2030. Although this goal appears to be optimistic, we do expect
considerable expansion in India’s steel industry and iron ore demand in the medium term. By 2020,
India is expected to achieve steel production of 127 Mt, which corresponds to an iron ore demand of
around 165 Mt.
• Technological changes are not expected to have a significant influence on iron ore demand over the
forecast period. Basic oxygen furnace (BOF) capacity, which dominates Chinese steelmaking and
contributed around 74% of 2017 global crude steel production, is expected to continue to constitute
the majority of global steelmaking capacity. Increased availability of scrap is not expected to pose a
significant threat to iron ore demand over the forecast period, as the substantial quantities of steel
used in China are unlikely to return to the scrap pool until after AME’s forecast period for two reasons.
Firstly, the average lifecycle of steel is generally up to 40 years (when used in construction); secondly,
the BOF steelmaking route—which only uses a limited portion of scrap in feed — overwhelmingly
dominates Chinese steel production (accounting for around 90% of the total).
Figure 19.6: Estimated Global Iron Ore Demand by Key Country and Region, 2011–2020
Source: AME

• In the mid-1990s, around 80% of total supply chain profits were captured by steelmakers, compared
with only 20% for miners. However, the profit share structure shifted well and truly in favour of
upstream producers between 2005 and 2014. During this period, there was a trend towards vertical
integration among steel producers; however, with significant iron ore supply coming into the market
over the short to medium term, this will ease the pressure to invest upstream going forward.
In the longer term, China’s demand growth is expected to slow further as steel production approaches its
natural peak of just below 900 Mt. By this time, the other major emerging economies, such as India, Brazil
and Vietnam, will become more important. Although influential, this demand is not expected to compensate
for the slower rates of demand growth in China. Collectively, these countries will add around 30 Mt of iron
ore demand from 2017 to 2020. Consequently, total growth is anticipated to be lower in percentage terms.
Iron Ore Demand by Key Regions and Countries
The key iron ore consuming regions are in Asia again as they take up more than 60% of crude steel
production. Consistent with the case for crude steel production, the three largest iron ore consuming countries
are China (59% share in 2017), Japan (6%) and India (6%). A slight anomaly is that the US only consumes
around 2% of global iron ore, despite having a global steel production share of around 5% in 2017. This is
attributable to the prevalence of electric arc furnace (EAF) technology for steel production in the US, which
uses scrap steel instead of iron ore as a raw material. Going forward, we anticipate little change in terms of
the production share over the medium term. A notable change will be that as Indian steel production grows
at a faster rate than its peer countries, it is anticipated to consume more iron ore. India is expected to be the
second-largest iron ore consuming country in 2020, overtaking Japan and taking up an 8% share of global
iron ore demand.
Chinese Steel Industry
In the early 2000s, China added substantial steel production capacity in response to strong domestic steel
consumption growth driven by significant government investment on infrastructure projects and by the
growing real estate sector. China has since become the world’s largest producer of steel, and has accounted
for around 45–50% of global steel supply since 2009. China has historically been a net importer of steel but
as a result of capacity expansions over the past two decades, it became the largest net exporter of steel in
2007. However, as Chinese GDP growth slows there has been a decrease in Chinese steel demand
Figure 19.7 .

Figure 19.7 : Estimated Chinese Steel Exports, 2011–2016
The Chinese steel exports came about due to lower Chinese domestic steel consumption growth since 2013
and domestic overcapacity, so producers diverted output to export. According to the Chinese Customs
Department, China steel exports increased from around 47 Mt in 2011 to a peak of 110 Mt in 2015. However,
exports fell marginally in 2016, to around 106 Mt, as stimulus increased internal demand for steel in China,
which has seen exports fall significantly over 2017, down over 20% in the January- October period of 2017.
As the largest steelmaking province in China, Hebei province alone plans to eliminate ironmaking capacity
and steelmaking capacity. By the end of 2020, total steelmaking capacity is planned to be no more than
200 Mt within the province. Currently, Hebei’s steel industry accounts for around one-quarter of total capacity
in China and one-tenth of global capacity.
Continued capacity elimination throughout 2017, along winter steel-making production cuts implemented for
the winter of 2017-18, has seen capacity utilisation of steel mills increase. As blast furnaces are a
volumetrically constrained process, the main way to increase production through a blast furnace is to increase
the grade of the iron used and increase PCI rates. This has resulted in iron ore demand focusing on higher
grade raw materials in order to increase steel production through productivity gains, and take advantage of
the current high steel prices through incremental increases in output. Higher grade iron ores also have the
advantage of reducing pollution in the sintering process, by increasing the efficiency of fuel use in this stage
of ferrous feed preparation. The sintering process can be the most polluting part of the steel making process.
In terms of overall provincial production breakdown, the Chinese steel industry is largely concentrated around
the coastal provinces of Hebei, Jiangsu, Shandong and Liaoning, which together accounted for around 53%

of total Chinese output for 2016, according to the National Bureau of Statistics (NBS). For many steel mills,
their locations are in part due to the proximity to major domestic iron ore mines, particularly for plants in Hebei
and Liaoning. Other plants are located near large iron ore ports, such as the north-eastern ports of Qingdao
and Tianjin, to economically source imported iron ore.
The estimated increase in Chinese iron ore production in 2017 is not expected to be sustained. Production
is expected to decrease to around 197 Mt by 2020, a negative CAGR of around -4%.
Indian Steel Industry
In 2016, India was the second-largest steel producing country behind China and Japan. While India is a
significant producer of crude steel, its steel output in 2016 was less than 12% of China’s total crude steel
output during the same period. Indian crude steel production increased by approximately 7% in 2016 year on
year, up from the almost 2% (year on year) experienced in 2015. However, the rate of growth is expected to
drop marginally to around 6% in 2017. The longer-term steel production outlook for India is favourable, driven
by estimated growth in key steel consuming sectors such as automobiles, infrastructure, construction and
manufacturing.
The steel production outlook is expected to be supported by its National Steel Policy, which aims to triple
domestic crude steel production capacity from 100 Mt in 2013 to 300 Mt by 2030. To promote measures to
achieve this ambitious production target, Indian steelmakers with annual production capacities of more than
2 Mt established the Indian Steel Association (ISA), which also aims to tackle key growth challenges such as
escalating project costs and the long-term sourcing of raw material supplies. Economic growth and increasing
industrialisation and urbanisation in India are expected to be a key driver for global iron ore demand growth
in the medium and long term.
Apparent finished steel demand in India grew around 4% year on year to around 84 Mt in 2016. Indian
demand is estimated to grow over 6% in 2017. From the supply side, to meet growing demand and achieve
the production target set by the Indian Government, major Indian steelmakers such as JSW Steel and SAIL
are expanding capacities. Although India has the largest sponge iron (direct reduced iron) sector globally,
new capacity will largely adopt the basic oxygen furnace route (BOF), since iron ore resources in India are
abundant. On the assumption that the Indian Government will continue to increase spending on infrastructure
and encourage fixed asset investment, it is estimated that steel demand in India may rise to around 112 Mt
by 2020. This is expected to translate into steel supply growth and underlying demand for iron ore.

Outlook for Traditional Markets
• Japan, being the second-largest crude steel producing country in 2016, and was estimated to
consume around 131 Mt of iron ore last year. However, going forward, it is expected to grow at a
slower pace compared to other developing countries, such as India, with a CAGR of less than 1%
over the period to 2017-2020.
• Europe is expected to be the second-largest crude steel production and iron ore consuming region,
after Asia. Germany is the key driver country in terms of European appetite for steel and iron ore, with
finished steel demand forecast to a post GFC high of around 42 Mt by 2020. Of the estimated 158 Mt
of iron ore consumed in Europe in 2016, around 42 Mt, or around 27%, of this was accounted for by
Germany. In comparison, the next largest consumers, France and Turkey, accounted for around 15 Mt
and 16 Mt respectively, or around 9% and 10%.
• South Korea is also a traditional steel producing and exporting country and its finished steel use on a
per capita basis was the highest globally in 2016, at 1,130 kg/ capita. In the short term, iron ore
demand is expected to rise moderately by around 2% to around 80 Mt in 2017. A driver of steel
production will be the appetite for Korean imports from Asia and Japan in particular.
Outlook for other developing nations
Economies that sit in the emerging class of the development cycle include India, Indonesia, Brazil and
Vietnam. Of these, India has the most potential to impact steel demand in the medium- to long term. Currently,
India is at a very early stage in the development cycle; per capita steel consumption was only around
63 kg/capita in 2016, with GDP of USD 2,185 bn and relatively low urbanisation levels (approximately 33%).
In developing Asia, Vietnam is another country with considerable growth potential. It is forecast to increase
its crude steel production by over 20% in the medium term (from 2018–2020). Formosa Plastics Group (FPG)
is constructing an integrated steel plant with a planned capacity of 22.5 Mtpa in Vietnam. With this believed
to come online in the short to medium term, demand for iron ore is expected to increase considerably.
Indonesia, a country with an estimated low steel use per capita, may also see its demand for iron ore rise
considerably from a low base, should the economy develop.
Iron Ore Supply
A large proportion of global iron ore supply is not situated in proximity to major steelmaking regions and
consequently there is a large internationally traded seaborne iron ore market. China, being the largest steel

producing country, is also the largest importer of seaborne iron ore. According to China Customs Data, China
was estimated to have imported around 1,024 Mt of iron ore in 2016. The supply chain starts with ores being
mined in major producing countries such as Australia, Brazil and China (which together account for around
69% of iron ore supply in 2016) and shipped to major consuming countries such as China, Japan and India.
In 2016, around 50% of the iron ore supply is estimated to come from the “Big Four” major producers: Vale,
Rio Tinto, BHP Billiton and FMG.
Changes and Trends in Iron Ore Supply
In 2017, AME estimates global iron ore supply (on a dry metric tonne basis) at around 2.1 Bt. This is around
3% higher than 2016, as additional production from new projects, as well as growth from smaller players in
the major producing regions. In 2018, global iron ore supply is also expected to grow by around 3%. Between
2018 and 2020, AME forecasts global iron ore supply to grow at a CAGR of under 1% to around 2.2 Bt.
Figure 19.8: Estimated Global Iron Ore Supply by Key Country and Region, 2011–2020
Source: AME
• The key driver for iron ore supply is the major producers. In the event of the iron ore price falling, the
major producers have demonstrated the ability to cut the cost of production and sustain margins, they
may increase or sustain production volume so as to grab market share from the higher-cost, marginal
producers. This may slow down the process where supply is to decrease in response to low prices.

• The major producers typically hold the assets with larger operating scale and lower costs. Vale in
Brazil and Rio Tinto and BHP Billiton in Australia have iron ore operations with FOB cash costs as
low as USD 10–25/t, attributable to economies of scale and established infrastructure systems. With
almost all the major producers occupying the lower half of the cost curve, production growth from the
majors is maintained despite lower prices.
• Rio Tinto’s Pilbara production was up around 3% quarter on quarter to 79.7 Mt (100% wet basis) in
the June Quarter of 2017. Production and shipments in the March Quarter were affected by weather
and guidance for 2017 was recently revised to the low end of the original 330–340 Mt estimate. BHP’s
West Australian Iron Ore (WAIO) production was around 70 Mt (100% wet basis), 12% higher than
March Quarter after also being weather affected. BHP released WAIO production forecast of
275,280 Mt for next financial year ending June 2018, and still expects to reach system capacity of
290 Mtpa in FY 2019. Vale’s iron ore production was around 92 Mt in the June Quarter, an increase
of around 6% on the March Quarter, also due to weather. Vale’s 2017 guidance was reduced to the
lower end of the original 360-38 0Mt range.
• Vale has also lowered its production plan to 360–380 Mt and 380–400 Mt for 2017 and 2018,
respectively, as well as 420–450 Mt for 2019 and 2020. Given current weakness in the pellet market,
Vale is not expected to replace lost production from Samarco from other pellet operations in the near
term, and instead intends to restart production at its Tubarão pellet plant in 2019 and 2020, adding
another 5–6 Mt to its total pellet output. Additionally, Vale is seeking to rebalance its production mix
by reducing the amount of high silica product it produces.
• Two new sources of low cost supply are ramping up production between 2017 and 2020 and are the
main drivers of the medium term supply profile. Roy Hill Holdings shipped around 17 Mt in the six
months to June 2017 from its Roy Hill mine in Western Australia but lifted this to around 13 Mt in the
September quarter and achieved nameplate run rate of 55 Mtpa in September. However, annual
production is expected to be less than 44 Mtpa in 2017 and the project is expected achieve a full year
of nameplate production in 2018. Vale reported first commercial production from the 90 Mtpa S11D
mine in the Northern System, Brazil, in January 2017. The ramp up of this project will take
approximately four years as the rail duplication component of the project is completed. The first year
of full production is expected to be 2020. On completion, the project will add a net 75 Mtpa to Vale’s
output, as higher cost production is reduced elsewhere in the system. AME expects that this 25 Mtpa
reduction will come mainly from the Southern and South-eastern Systems.
• There were strong signs of elastic Chinese supply re-entering the market enticed by the run up in iron
ore prices to over USD 90/t (CAD 116/t) in March and over USD 75/t (CAD 96.6/t) in August. Year to

date 2017 cumulative ROM production increased 5% year on year to August to but this is not expected
to last as prices decline and imports remain competitive. Cumulative January - August Indian exports
to China, also increased by over 115% to around 21 Mt.
• Identified new iron ore production capacity is estimated at around 36 Mtpa in 2017. AME forecasts
additional capacity of 13 Mtpa coming into the market in 2018, followed by around 35 Mtpa of
additional capacity commissioning out to 2020.
• The first 10 Mtpa stage of Rio Tinto’s Silvergrass mine was officially opened in late August 2017.
LKA’s 9 Mtpa Leveäniemi project, has been slowed and is currently operating at a reduced capacity
of around 1 Mtpa and not forecast to reach full production capacity until 2019. LKAB has also stated
it requires the Kiruna to Narvik rail line upgraded to dual track to achieve its long-term expansion plans
with the lines current capacity being reached by 2020. The restart of Champion Iron’s 7 Mtpa Bloom
Lake mine in Canada is not expected until early 2018, along with the restart of Tacora’s 6 Mtpa Scully
Mine re-start project at Scully Mine in the second half of 2018.
• AME estimates that around 35 Mtpa of new capacity could come on line from greenfield and
brownfield projects, which are classified by AME as ‘committed’ and ‘probable’, between 2018 and
2020. Most of this capacity is for replacement of mining depletion and includes a further 10 Mtpa
expansion of Rio Tinto’s Silvergrass to 20 Mtpa and an additional 11 Mtpa at Rio Tinto’s Yandicoogina
mine to bring capacity to 70 Mtpa.
• In the longer term, producers will prioritise brownfield over the greenfield projects, given the lower risk
and investment required. Additionally, AME has identified around 66 projects, including Simandou,
with ultimate combined capacity of around 700 Mtpa, which are in the planning and feasibility stage.
• The availability of lumps is expected to decrease over the longer term with future iron ore supply
expected to be mainly composed of fines and pellets. New greenfield DSO projects, such as Vale’s
S11D, as well as brownfield expansions of existing DSO operations, will be preferred over lower grade
magnetite, commonly developed in the northern hemisphere (e.g. in Canada, the United States,
Sweden, Ukraine and Russia).
• Since the failure of the Samarco tailings dam in Brazil, the disposal of tailings generated by wet
processing has become a major environmental issue. This has driven development of new dry
processing technology for lower grade ores. It is expected over the long term, the highest growth could
come from concentrate supply requiring extensive grinding and magnetic and flotation separation

techniques as higher grade DSO haematite orebodies are depleted and lower grade magnetite
dominant deposits become the dominant ore source.
• Undeveloped, high-quality, large-scale deposits are now more commonly located in remote areas,
away from existing rail and port facilities, or near infrastructure where there is limited capacity
available. New iron ore projects for delivery in the longer term will have higher capital intensity, given
the need to develop associated rail or road networks and port infrastructure. Examples are the
40 Mtpa Mbalam-Nabeba project in Cameroon and the 100 Mtpa Simandou project in Guinea.
Figure 19.9: Estimated Grades of Sinter Fines, 2011-2020
Source: AME
• Sinter fines will remain the dominant form of iron ore produced between 2017 and 2020 at around
49% of global supply by 2020. This assumes technology to reduce emissions associated with sintering
is applied cost effectively. Haematite projects, which produce both DSO lump and sintering fine ores,
have been more successful in securing funding than pellet feed projects over the past decade given
the lower operating costs. Despite the recent increase in high grade fines from Vale’s S11D project,
the fines market remains relatively evenly balanced between low, medium and high-grade products.
In the long term, while haematite projects are expected to remain favoured, more funding may be
channelled to concentrate projects as concentrate supply growth outpaces lump and sinter fines, as
most new projects are expected to require beneficiation to produce the quality that the market
requires.

• Production of low and mid-grade iron ore concentrates was traditionally dominated by China. As
Chinese iron ore production has diminished, this has resulted in the iron ore concentrate market to be
further focused on producing high grades. Despite their being plans for high grade concentrate
projects in Australia, most new productions of high-grade concentrate are expected to be focussed
on the traditional producing regions of Canada, Europe and the CIS.
Figure 19.10: Estimated Grades of Iron Ore Concentrate, 2011-2020
Source: AME
Iron Ore Supply by Region and Key Countries
From a country perspective, Australia, Brazil and China are expected to make up approximately 69% of global
iron ore supply in 2017. We anticipate the production share to have few changes in the short to medium term.
A notable change is that despite China experiencing increased production this year, it is anticipated to resume
its decline as prices weaken. higher estimated cash cost.

Australia
Australia is expected to remain as the largest iron ore producing country in the short to medium term, as
major mining companies such as Rio Tinto and BHP Billiton are committed to sustain production over the
coming years. In addition, Australia is the largest supplier of iron ore to China, and is expected to remain one
of the largest global seaborne exporters of iron ore going forward. In 2016, Australia shipped approximately
548 Mt of iron ore to China, or around 59% of the country’s total import requirements.
Brazil
Brazil is expected to remain as the second-largest iron ore producing country, as well as the second largest
global seaborne exporter. Vale SA is the country’s largest iron ore producer. The short-term production profile
is supported by the anticipated ramp up at the Serra Norte operation and the ramp-up of S11D project this
year.
China
In addition to being the largest consumer of iron ore, China is also the third iron ore producer. While Chinese
production was estimated at 206 Mt (or approximately 10% of global supply) in 2016, production levels are
estimated to increase in the short term as high prices in late 2016 and early 2017 incentivised supply to
return. It is noted that Chinese domestic mines often have a higher cash cost of operation than those from
other countries.
Iron ore production in China is concentrated in the provinces of Hebei, Sichuan, Liaoning, Shanxi and Inner
Mongolia. Iron ore resources are mostly found in lower-grade magnetite deposits, and it is not uncommon for
mines to produce ROM ore with grades of around 20–30% Fe. Unlike the higher-grade (>58% Fe) Direct
Shipping Ore (DSO) products from Australia and Brazil, Chinese-mined iron ore often requires further
beneficiation to produce iron ore concentrate (with a typical grade of 65–66% Fe) before it can be used in the
steelmaking process. Such beneficiation processes, for instance, grinding and magnetic separation, are
generally energy intensive and therefore may result in higher costs of production.
China’s iron ore industry is fragmented and comprises numerous small-scale, high-cost producers. The
largest iron ore mining operators are generally the mining divisions of state-owned steel enterprises such as
Ansteel and HBIS. As such, many iron ore mines are captive to their parent company’s steel plants. Smaller
Chinese mines without captive beneficiation capacity generally sell their ore to central processing plants for
concentration prior to sintering or pelletising. The market may become more concentrated going forward, as
per the theme of industry consolidation and merging of large steel companies.

India
Historically, India was one of the major iron ore producing countries. However, its position in the export market
has diminished since 2011, when the Indian Government began to tackle illegal mining through the
implementation of mining bans, which led to an estimated 40% decline in iron ore supply from 2009 to 2013.
The bans were lifted in 2014 but the resumption of mining was delayed while new regulations were
implemented. As a result of the bans, a stockpile of 15.5 Mt of iron ore accumulated, which the state
government auctioned. With policy changes in early 2016, Indian exports recovered in 2016 be around 19 Mt,
from around 4 Mt in 2015. The recovery has continued into 2017, with exports expected to be around 37 Mt
for the year.
Over the longer term, however, India is expected to remain largely self-sufficient in terms of iron ore supply
and is unlikely to emerge as a major source of seaborne iron ore demand. Restarted capacities are expected
to continue to be mostly reserved for the domestic steel sector.
Other regions
There is potential for additional supply capacity in West Africa to commission over the longer term as the
region contains some of the largest undeveloped iron ore sources such as the Simandou deposit in Guinea.
However, they are expected to carry a higher political risk and generally lack supporting infrastructure.
In Canada, additional supply capacity over the longer term is estimated to be more than 40 Mtpa, from
projects such as Tacora Resources’ Scully project at Scully Mine, Champion Iron’s Bloom Lake and Fire Lake
North projects, and the Kamistiatusset project. Like projects in West Africa, Canadian projects typically also
require investment in port and rail infrastructure, although for some projects there may receive assistance
from provincial governments. As well as being relatively distant from key Asian markets, some iron ore
projects in Canada including Baffinland Iron Ore Mines’ Mary River face weather restrictions which limit
shipping windows.
Supply Growth Limitations
The iron ore industry has undergone a period of rationalisation over the past four years, with production costs
falling up to 50% from their peaks in 2012 and 2013. This cost improvement has allowed more producers to
remain in the market longer, despite lower prices; however, this is not seen as sustainable over the longer
term. Operating costs will once again increase in real terms, and together with other factors, these may limit
the long-term growth potential of global iron ore supply.

• Increasing capital intensity is to be expected as ore grades stabilise and then gradually decrease.
Lower grades require increased plant size and throughput for the same metal unit output. As the
world’s most easily accessible and richest orebodies have been largely exploited, mining companies
are being forced to dig deeper and are encountering higher strip ratios. Longer transport distances
will also lead to greater production costs for newer projects developed in the forecast period. New
deposits will be deeper, increasing the capital required for pre-stripping. Increasing capital intensity is
expected to lift the barriers to entry for new mines. Operating costs are also expected to rise
moderately. While labour costs are forecast to increase in real terms, in the long term, pressure from
higher diesel prices are expected to be limited due to an anticipated flat growth profile for the crude
oil price.
• Financing costs for resources are anticipated to increase. In recent years, debt financing costs have
been held down by continuous loose monetary policies. Higher interest rates (and discount rates) are
expected to increase hurdle rates for projects. Projects will only be economic if the long-run price is
sufficiently high enough to cover a miner’s cost of capital, which at current prices and production costs
is not occurring except for majors like Rio Tinto and BHP Billiton.
In addition to the operation cost perspective, infrastructure limitations and political risks may also provide
further constraints.
• Infrastructure constraints: Transport networks and the logistics of transporting iron ore from project to
market are fundamental determinants to the viability of a project. Whilst the more developed iron ore
producers are facing infrastructure delays, transport networks in West Africa and other developing
regions are in many cases still under-developed. AME considers that transport will be a material
impediment to the development of many projects over the next decade. For example, if a developing
nation has ports infrastructure with relatively limited facilities, this may lead to high throughput time,
high turnaround time for ships, slower loading rates and delays due to break-downs. There are also
potential difficulties in loading Capesize vessels for undeveloped ports, leading to a higher utilisation
of smaller vessels. These factors may then be translated into port congestions, higher incidence of
demurrage costs and overall high costs, eroding margins for iron ore producers and limiting the supply
growth rate.
• Political Risk: There may be increased political risk associated with exploration and operations in
developing areas such as Africa. Political risk is reflected in increased capital costs. This takes into
account the fact that many new developments are remote from the target markets and have unstable
government regimes. For politically unstable regimes, supply of key production inputs such as

electricity and labour may have considerably higher volatility due to ongoing social issues, giving a
cause for production suspension or delay.
Iron Ore Pricing
Iron Ore Pricing Dynamics
Under the traditional “annual contract pricing system”, iron ore was priced through annual negotiations
between the world’s largest steelmakers and their suppliers. A large steel company—usually from Japan or
Europe, and more recently from China—would reach a pricing agreement with one of the three largest
producers, BHP Billiton, Rio Tinto or Vale, and the first agreed price would then be set as the point of
reference for all subsequent iron ore contracts within a given timeframe. Prices were generally based on the
Japanese Financial Year (“JFY”) (April 1 of current calendar year to March 31 of following calendar year)
during the first quarter of each year.
In JFY 2009, through CISA, the major steel makers in China took a more collaborative role in price
negotiations. In the same year, the 40-year-old pricing system broke down as negotiations dragged on
beyond the customary April settlement date amid a volatile spot pricing environment. From April 2010, iron
ore pricing largely shifted from annual fixed pricing to quarterly pricing.
Spot Pricing
In recent years, spot pricing has been widely adopted among market players with reference to the Platts 62%
Fe Fines IODEX. Rio Tinto and BHP Billiton now largely negotiate iron ore sales on this basis. In deriving the
unit price for the content of iron, the average of Platts 62% Fe IODEX assessments, which are on a CFR
North China basis, over a particular historical reference period is taken. From this, freight costs over the same
period are deducted. The resulting figure is then divided by 62 to derive the value of each percent of iron
content, also called the dry metric tonne unit price. The unit price is multiplied by the iron content of each
product to derive a FOB Australia price of fines, while for lump ores, a premium is added. Additionally, there
are extra penalties factored in to account for high levels of deleterious materials, as well as when the iron
grade drops below the minimum specified in the benchmark.
While the pricing principal adopted has been largely identical in market settlements, the historical reference
period of the IODEX used to determine prices varies from mill to mill. Depending on the levels of iron ore
inventories kept at a steel mill and the frequency, mode and pricing of steel sales, some have used IODEX
assessments for the three months preceding the quarter or the three month period commencing four months
prior to the quarter. For example, January to March for determining June prices, or December to February

assessments for June prices. Other quotation periods include the month of delivery, 5 days before and after
the notice of readiness at the discharge port.
Value-in-Use Adjustments
In determining the price of a particular iron ore product, miners and steel mills are believed to consider four
key factors. These are the iron content, the chemical composition/impurities, granulometric characteristics
and freight costs. Prices for iron ore products are generally set against the 62% Fe Fines Spot Price CFR
North China benchmark prices and adjusted for value-in-use and freight differentials.
Value-in-use is a term used to describe the adjustments made against a benchmark price to account for
differences in ore quality. The costs incurred at a steel mill are influenced, to an extent, by differing ore
chemistries. The premium and discount applied to the benchmark price for a specific ore is calculated from
the difference in iron content to the benchmark and the impurity levels relative to trigger grades (e.g. silica
levels over 5.5%). Key impurities considered are silica, alumina, phosphorus and sulphur.
A high iron content feed is typically preferred by steelmakers, as higher Fe reduces transport costs on a Fe
unit basis and increases the iron content yield. Silica levels above 5.5% are considered high, and can raise
the blast furnace slag volumes and the fuel rate (and in turn, the coke consumption rate). Conversely, large
amounts of very low silica content ores (less than 1%) often require the use of siliceous ore or olivine to
restore normal sinter silica levels.
Reasonable levels of alumina content can generally improve the sinterability of fine ores by enhancing balling
characteristics. Alumina typically allows the lime-to-silica ratio to be higher and helps to increase the sinter
strength and reduction disintegration index (“RDI”) of the sinter. The RDI is a quantitative measure of the
degree of disintegration of the sinter that is likely to occur in the upper portion of the blast furnace after some
reduction.
Sulphur can have the impact of making steel brittle and primarily enters the blast furnace through coke and
coal injection, and to a lesser extent, iron ore. An increase in sulphur content increases the blast furnace
sulphur load, the flux requirement, blast furnace slag volume and coke rate, and lifts hot metal
desulphurisation costs.
High phosphorus levels are detrimental to the quality of the steel and also increase the steelmaking slag
volumes and reduce the ability of the furnace operator to recycle basic oxygen furnace (BOF) slag. As such,
phosphorus is considered to be undesirable in ferrous raw materials.

Iron Ore Price Outlook
A volatile spot price for 62% Fe fines, CFR China basis, saw an increase in this price from around
USD 45/t (CAD 56/t) in January 2016 to around USD 80/t (CAD 103/t) in mid-December with a yearly average
price of USD 58/t (CAD 74.7/t) by the end of the year. This volatility continued into 2017 with the spot price
for iron ore reaching USD 95/t (CAD 122.4/t) towards the end of February. AME forecasts the price to average
USD 71/t (CAD 91.5/t) in 2017, reflecting an expectation that Chinese demand for higher grade and quality
iron ore will continue with the focus on increasing productivity, and also to offset higher coking coal costs. As
a result of new low cost supply, the price is expected to dip to USD 60/t (CAD 77.3/t) in 2018 and 2019 and
as new low cost supply is absorbed, the price is expected to increase to USD 61/t (CAD 78.6/t) in 2020. Over
the longer term, AME expects demand and supply balance with long-term iron ore prices expected to be
structurally higher than historical levels, mainly on the back of increased operating cost.
Figure 19.11: Estimated Historical and Forecast Global Iron Ore Price, 2011-2020 (Real 2017)
Source: AME
The coking coal price increase in late 2016, believed to be a combination of the supply side reforms in China,
the cutting of domestic coal production, flooding in Hebei province and shortages in Australian export supply
towards the end of 2016, lifted the 62% Fe fines spot price. In addition, it also increased the 62% - 58% Fe
fines spot price differential as steel producers sought higher grade iron ore to improve blast furnace
productivity and offset the higher cost of coking coal.

Additionally, the 2016 and 2017 Chinese government stimulus flowed through to steel production, iron ore
demand and lifted iron ore prices. Iron ore prices rose throughout 2016 with a strong acceleration in the fourth
quarter of 2016 due to temporary supply driven deficit and spiked coking coal prices. The higher price held
during the first quarter of 2017 as coking coal supply continued to be constrained. The second quarter of
2017 saw the price fall as market participants factored in the looming over supply and actual supply was
boosted from the majors after weather impacted production at their operations in Q1 2017. S11D and Roy
Hill ramped up production and Chinese swing producers returned to the market incentivised by the high prices
of the previous six months. September’s sharp price rise was driven by high steel prices and margins which
lead to high demand for high grade ore. The demand for high grade pushed up the 62% Fe price but also
increased the spread in prices between high and low grade or. During the September Quarter of 2017, 58%
Fe ore traded on average USD 18/t or 25% below the 62% price while 65% Fe ore traded USD 19/t or 26%
above. The looming Chinese Government steel capacity and sintering cuts to reduce air pollution over winter
are so far supporting the higher iron ore price and the lump and pellet premium as steel mills build both
finished steel stocks premium grade ores in preparation for the cuts but are expected to fade as steel
production slows over winter.
The increase in the iron ore 62% - 58% Fe price differential has affected revenues for producers such as
Atlas Iron and Fortescue Metals Group, but has not induced any closures. The most significant withdrawal of
low grade supply remains BHP’s 80 Mtpa Yandi operation which is expected to close around 2022 on
depletion of Ore Reserves. Atlas Iron has announced development of the 4 Mtpa Corunna Downs project
(Mineral Resource of 65 Mt at 57% Fe) to maintain its production profile as other mines close on exhaustion
of Ore Reserves. First production is expected in the March Quarter of 2018. Notwithstanding these expected
changes in lower grade supply, AME does not expect any significant disruption in the supply of lower grade
iron ore resulting from the current 62% - 58% Fe differential spread.
Table 19.1: Estimated Historical and Forecast Iron Ore Prices, 2011-2035 (Real 2017)
2021-2025
2026-2030
2031-2035
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
USD/t
Iron Ore
65.9% Tacora Fines CFR North China 89 74 74 77 77 89 88
Source: AME
A general widening of the 62% Fe fines and 65% Fe fines pricing spread has been observed since mid 2016,
believed to be driven by higher demand for ferrous products with high value-in-use, such as high-grade fines
and pellets to reduce coking coal consumption. If based only on iron content, it would be expected that the

65% premium would be approximately 4.8%. However, the spread peaked at the end of the third quarter of
2017 at over 30%. AME expects this pricing spread to ease marginally in the short term, but remain elevated
above long-term levels, as steel mills focus on productivity with an average of around 20%. The long-term
shift is expected to be driven by ongoing drive to reduce pollution through increased productivity and
efficiency in integrated steel works, by focusing on higher grade raw materials.
Over the long term, AME expects steel producers to keep driving productivity improvements, better margins
and produce higher quality steel products which could support the demand for medium to higher quality iron
ore products. As a result, AME expects that this dynamic will be supportive of continued price recovery in the
longer term.
Iron ore demand from China between 2018 and 2020 is expected to decline at a CAGR of 0.1%, while
demand from India is expected to grow at a CAGR of 9.1%. In the United States, better economic conditions
and steel import restrictions should continue to support iron ore demand with growth at a three year CAGR
of 5.3% between 2018 and 2020, contributing to an increase in global iron ore demand. The US demand will
be supplied by local mines with some imports from Brazil and Canada.
Value in Use Characteristics
In determining the price of a particular iron ore product, miners and steel mills consider four fundamental
factors. These are the iron content, the chemical composition/impurities, granulometric characteristics and
freight costs. That is to say, ores with identical compositions, delivered from the same point of origin will
theoretically have the same price on a delivered basis.
Value-in-use is a term used to describe the adjustments made against a benchmark price to account for
differences in ore quality. Prices for iron ore products are generally set against the 62% Fe Fines Spot Price
CFR North China benchmark prices and adjusted for value-in-use and freight differentials. The benchmark
62% Fe Fines Spot Price is typically considered to have the following quality parameters: 4.5% silica (SiO2),
2% alumina (Al2O3), 0.075% phosphorous (P), 8% moisture and 0.02% sulphur (S). The costs incurred at a
steel mill are influenced, to an extent, by differing ore chemistries. The premium and discount applied to the
benchmark price for a specific ore is calculated based on the difference in iron content to benchmark and the
impurity levels relative to trigger grades (i.e. silica over 5.5%). Key impurities considered are silica, alumina,
phosphorus and sulphur.

Figure 19.12: Comparison of Selected Sinter Product Estimated Grades
Source: Company Reports, Presentations, AME
A high iron content feed is typically preferred by steelmakers as higher iron content reduces the effective
transport costs on a Fe unit basis and increases the iron content yield of the sinter. The benchmark iron
content for iron ore is considered to be 62% per dry metric tonne (dmt). Currently, the iron unit adjustment is
estimated to be around USD 1.20/dmt (CAD 1.55/t) per 1% of iron content above 62%. Higher iron content
tends to attract a premium above the standard adjustment, when the iron content is above 63.5%.
Generally, the standard range for silica is from 4.5% to 5.5% to match the desired silica level of sinter
products. Therefore, silica levels above 5.5% are considered high and can raise the blast furnace slag
volumes and the fuel rate (and, in turn, the coke consumption rate). Silica discounts are currently estimated
to be around USD 3.10 (CAD 4.00/t) per dry metric tonne per 1% of silica content over 4.5%. Conversely,
large amounts of very low silica content ores (less than 1%) often require the use of siliceous ore or olivine
to restore normal sinter silica levels. Chinese domestic concentrates typically have a higher silica level of
around 5%, and historically have been used to blend with imported fines in the sintering process.
Declining Chinese domestic sintering concentrate has led to falling silica discount as Chinese steelmakers
have greater tolerance to higher silica seaborne product as a substitute.
Alumina content generally improves the sinter ability of fine ores by enhancing balling characteristics. Higher
levels of alumina allow the lime to silica ratio to be higher, and this increases the sinter strength and reduction

disintegration index (RDI) of the sinter. The RDI is a quantitative measure of the degree of disintegration of
the sinter that is likely to occur in the upper portion of the blast furnace after some reduction. For Australian
ores, sales agreements often stipulate penalties for every 1% in excess of anywhere between 2% to 3%
alumina. Alumina discounts are currently estimated to be around USD 2.50/dmt (CAD 3.22/t) per 1% of
alumina content over 2%.
Sulphur can have the impact of making steel brittle and primarily enters the blast furnace through coke and
coal injection, and to a lesser extent, iron ore. An increase in sulphur content increases the blast furnace
sulphur load, the flux requirement, blast furnace slag volume and coke rate, and lifts hot metal
desulphurisation costs.
High phosphorus levels are detrimental to the quality of the steel and also increase the steelmaking slag
volumes and reduce the ability of the furnace operator to recycle basic oxygen furnace (BOF) slag. As such,
phosphorus is especially undesirable in ferrous raw materials. Some Chinese steel makers are known to
reject cargoes with phosphorus levels above 0.075% and sulphur above 0.07%. Those that are accepted are
typically with material discount requests. The size of the discount will not necessarily be linked to the cost of
dephosphorisation or desulphurisation, as there could be other market-related contributing factors.
Loss on ignition (LOI) is the weight loss when volatile components bound in the mineral structure are driven
off by heating. The main volatile is water-bound in goethite and limonite. The CO2 bound in carbonate
minerals (siderite, calcite, and dolomite) is the other main source of volatiles. Iron ore with a higher LOI
impacts on the efficiency of the sintering process though increased fuel rates through the sintering process.
Scully Mine Overview
Introduction
The Scully Mine is located approximately 2 km south of Labrador City, in the Canadian province of
Newfoundland and Labrador. Geologically, the mine is located in the Labrador Trough, which also contains
other iron ore operations, such as Rio Tinto’s Carol Lake and Champion Iron’s Bloom Lake. The iron ore of
the region is a coarse-grained haematite which can be concentrated without the need for fine grinding. This
allows for the production of a nominal 65% sinter feed product.
The mine operated from 1965 up until 2014, when Cliffs closed the mine for economic reasons. During its
time of operation, the output of the mine was used as captive pellet feed for the Scully Mine pelletizing plant
in Pointe-Noire to produce blast furnace grade pellets. In 2017, Tacora Resources purchased the mine, with
the intention of restarting operations in 2018.

Product Overview
Based on the typical specifications for the Scully Sinter product, as supplied by Tacora, AME was able to
compare the key parameters to other high-grade fines products, as well as the standard benchmarks.
Table 19.2: Comparison of Scully Sinter Specification with Peers and Benchmarks
Source: AME, Tacora Resources, Company Reports
The iron ore content of the Scully Sinter product, at 65.9% is just above the high grade bench mark iron
content of 65%, and as such would be expected to attract a premium. This is also higher than the largest
brand of high grade sinter in the seaborne market, the Carajas Sinter Feed blend. However, this is less than
other Labrador Trough producers, such as Bloom Lake, with 66.2% iron.
Scully’s silica content is low at 2.6%, which is low against other Labrador Trough producers and high-grade
benchmarks of 4.4% and 3.5%, respectively. However, this is higher than the Carajas blend. With Chinese
domestic ores typically having higher silica content, low silica iron ores are sought for blending.
Scully’s alumina levels are very low at 0.2%, which is typical of Labrador Trough ores, and well below
benchmark specifications and other high-grade ores. Additionally, with very low phosphorous levels, again
below benchmark and other high-grade iron ores, make this advantageous for blending with lower grade ores
which typically have higher levels of these deleterious elements.
The LOI of the Scully product is expected to be very low at 0.5%. This is advantageous, as it can increase
the efficiency of the sintering process. This compares to a 2-5% LOI typically seen in Brazilian ores and up
to 10% LOI seen from some lower grade ores from the Pilbara.

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL
This feasibility study chapter will discuss reasonably available information on environmental, permitting, and
social or community factors related to the project. As this is the reactivation of an existing site that has
operated for more than 50 years, there is a well-developed record of environmental matters for this mine.
Related Information
Tacora prepared and submitted an Environmental Assessment Registration (EA Registration) to the
Government of Newfoundland and Labrador on September 28, 2017 in accordance with the Newfoundland
and Labrador Newfoundland and Labrador Environmental Protection Act (NL EPA, Part 10). The Government
placed the document on a public notice period, responded to public comments, and released the reactivation
project from further environmental assessment on November 21, 2017.
The EA Registration included discussions regarding the physical features of the project, natural habitat,
potential resource conflicts, and socioeconomic influences of this site. These various factors were considered
from reactivation, continued operation and eventual closure and rehabilitation of the mine site.
Environmental Studies
The 2017 EA Registration document described above is the most recent overall environmental study
completed at this site. There was also another EA Registration document prepared and submitted by the
previous owners in November 2015, but that document was written with a focus on mine closure and site
rehabilitation.
Tacora has prepared and submitted three (3) plans and one (1) application to the Government of
Newfoundland and Labrador in support of this facility that relate to environmental and other operational
impacts of resuming operations at the Scully Mine. These are:
• Reactivation Plan: a document that describes Tacora’s plan to restore the site from its current
condition to operational readiness,
• Development Plan: a document that describes the resumed operations of the mine and associated
facilities for the remaining mine life,
• Rehabilitation and Closure Plan: the document that outlines mine closure and site rehabilitation for
future land use. This plan includes Closure cost estimates that were used to document necessary
financial assurance to the Government of Newfoundland and Labrador.

• Operating Certificate of Approval Application: this document describes the environmental control,
monitoring and reporting measures that Tacora will follow to assure compliance with federal and
provincial environmental regulations.
Air
The reactivation of the Scully Mine will result in airborne emissions from mining, processing ore, material
handling operations and tailings disposal. These are all activities that have been historically associated with
this mine site. Airborne emissions challenges at the site are known, documented and must be managed to
minimize any potential adverse environmental impact going forward.
The previous owners conducted air emissions testing (2008 through 2011) to determine pollutant emission
rates for various aspects of the facility operations and these rates were then used as some of the input values
into an air dispersion computer model that intends to simulate potential ambient air quality impacts to the
local area from facility operations over many years. Other model inputs include fugitive emissions from other
mining related activity such as storage piles and vehicular traffic. The modeling report from 2014 indicated
potential exceedances of ambient air quality standards for various groups of particulate matter. While the
computer simulation predicts possible ambient air quality standard exceedances, two actual ambient air-
monitoring stations located downwind of the site have not recorded an actual exceedance attributable to
facility operations in the multiple years that the monitors have been in service.
Upland Habitat
The 2015 (Cliffs) and 2017 (Tacora) EA Registration documents are the only known studies that discuss
upland habitat. Considering that there is no expansion projected, no additional impacts are anticipated on
plant or wildlife habitat. No plants with a protected status are known in the area. Wildlife habitat loss occurred
with the historical construction and mining operations and the abundance and availability of similar habitats
nearby is believed to provide suitable replacement.
The project site is situated in a region with typical boreal forest ecosystems and wildlife communities. Given
that the area has been subjected to industrial activity for over 50 years, wildlife has adapted either to avoid
the area or to conduct some or all of their life cycle stages within the suitable areas of the mine site. Large
mammals rarely occur in the mine site and no hunting is permitted within the boundaries therefore no
anticipated resource conflicts are expected with respect to big game. Minimal clearing and grubbing are
required, however, to avoid adverse effects on migratory birds and bird species of special conservation
concern, all clearing activities will be conducted in accordance with accepted protocols related to avoidance

of disturbing nesting sites. Tacora’s no hunting, fishing, or trapping policy will be implemented throughout the
construction and operation of the Project, therefore no other wildlife conflicts are anticipated.
Aquatic Habitat
The 2015 (Cliffs) and 2017 (Tacora) EA Registration documents are the most recent studies that discuss
aquatic habitat. Over the years, the mine has implemented fisheries habitat improvement projects for
offsetting impacts from various site projects.
The project site is situated in a region with abundant aquatic resources including many small and large lakes,
rivers, and associated streams and fish communities. The area affected by Tacora’s operations has been
subjected to industrial activity for over 50 years, and fish resources have been able to conduct some or all of
their life cycle stages within suitable areas of the mine site. There will be no additional physical alteration of
fish habitat or reduction in fisheries productivity associated with the re-activation of the Tacora Mine. Tacora
is fully compliant with all fisheries compensation and offsetting required under the Fisheries Act. This applies
to all historical activities and planned reactivation of the mine as related to mining and processing activities
and associated deposition of mine tailings and associated effluents. Tacora is also continuing all required
monitoring of effluent discharges and water quality as required under the federal Metal Mining Effluent
Regulations (MMER), Canadian Council of Ministers of Environment (CCME) guidelines and provincial
(Certificate of Approval) criteria including acute and sub-lethal biological testing. Tacora will implement a no
fishing policy throughout the operation of the mine; therefore, no fisheries productivity conflicts are
anticipated.
Cultural and Historic Resources
There are no existing environmental studies that focused on cultural or historical resources. The
2017 EA Registration document completed by Tacora discussed positive socio-economic impacts of the
reactivation of an existing brownfield industrial site that has operated for more than 50 years.
Water
The 2017 EA Registration, Development Plan and Rehabilitation & Closure Plan all describe water resource
impacts related to reactivation, operations and eventual closure of the Tacora Mine. Surface water quality
monitoring at the mine site was conducted for many years and there is a long, well documented history of
water quality monitoring results.

Hazardous Materials Management
20.2.6.1 Soil and Groundwater contamination
The facility has operated a fuel tank farm for many years, storing Bunker C fuel oil, diesel fuel and some small
amount of gasoline. Over the years, there have been documented spills to the extent that a Phase II
Environmental Site Assessment and Qualitative Risk Assessment was completes in December 2011 and a
further Phase III Environmental Site Assessment was conducted in November 2012. The results of these
studies are discussed below in Section 20.3.
20.2.6.2 Lead Based Paint, Asbestos Containing Materials, and PCBs
Due to the site’s age, there are areas of facility’s structures that contain lead based paint, asbestos containing
materials (ACM) and a few remaining PCB filled fluorescent light ballasts. The province defines Lead Based
paint as having greater than 0.06% lead by weight, and ACM with asbestos concentrations greater than 1%.
The most recent site survey was conducted in June 2013.
The previous owners confirmed to the Provincial government in a letter from May 2002 that as of 1997 the
only remaining equipment on site with the potential to contain PCBs in concentrations greater than 50 ppm
may be some fluorescent light ballasts.
Tailings and Waste Rock
20.2.7.1 Tailings Impoundment Area
There are documented inspections for the Flora Lake Tailings Impoundment Area (TIA) for 2102, 2103
and 2014, these inspections were conducted by Golder and Associates. The reports indicate that the dikes
are stable and water levels (measured via piezometers) remain at levels that do not impact dike stability. As
expected, water levels dropped measurably after plant operations were curtailed and the TIA continued to
dewater.
In December 2012, Cliffs also retained AECOM to complete an external audit of the dike design, suitability
and operational condition of the existing TIA dikes.
Finally, there is a draft TIA dike safety review prepared by AMEC in December 2016. This report was prepared
in support of the intended mine closure and implementation of the Rehabilitation & Closure plan for the TIA.

As such, it emphasized ongoing revegetation efforts and surface water management to minimize potential
erosion impacts on water quality.
20.2.7.2 Waste Rock Piles
AMEC completed a slope stability evaluation of waste rock piles (WRP) in November 2016. The objectives
of this evaluation were to provide a preliminary assessment of the stability of WRP, determine the location of
safety berms on the current waste rock piles, and answer geotechnical questions in the Comments on Scully
Mine / Scully Mine Rehabilitation and Closure Plan sent in April 2016 by the Department of Natural Resources
(DNR). The WRPs are currently constructed at the angle of repose, in their current state the WRPs are
considered to be marginally stable. While the WRPs have been in place for the life of the mine, there is
evidence of tension cracks at the top of some slopes and also of previous slope failure.
From an engineering standpoint, the recommendation for slope stabilization, and determination of slope
factor of safety (FoS), depend on the future planned use for the area and a review of the consequences in
the event of a slope failure. Currently there are no official guidelines for the required FoS for slope stability.
The required FoS for seismic slope stability is generally recommended to be 1.1 or greater. From the slope
stability analysis performed in this study it was found that a slope of approximately 2H:1V may provide a
FoS of 1.4 to 1.5. However, this study was performed without a comprehensive geotechnical investigation.
Depending on the future use of the land around the mine, and lack of geotechnical information, a FoS of 2
may be warranted, which would require a reduction of slopes to approximately 3H:1V.
Environmental Issues
The following environmental issues will not materially affect Tacora’s ability to extract the mineral resources,
but are existing conditions that require continued monitoring and ongoing resolution.
Ambient Air Quality
As discussed above in Section 20.2.1, the site’s past air emissions testing results did not support the site
passing an ambient air quality dispersion model. While the installed air monitoring stations have not shown
any actual exceedances attributed to the mine, the regulatory expectation is that the computer model results
are satisfactory.
Tacora will repair and upgrade the existing particulate emissions control equipment as part of the facility
reactivation and then complete additional air emissions testing within 12 months of resumed operations to
quantify the rebuilt equipment’s performance. These test results will be used as updated dispersion model

inputs and the computer modeling process repeated. This emissions testing and subsequent dispersion
modeling process is then repeated on a four-year basis throughout the mine’s operational life.
Soil / Groundwater contamination
Groundwater quality monitoring at the site has been restricted to a monitoring program in the tank farm area
associated with requirements from the ESAs previously completed in this area. There are 18 monitoring wells
associated with the program and the numerous assessments conclude that there are small areas of
petroleum-contaminated groundwater that will be monitored as part of a contaminated soil
Remediation Action Plan (RAP) for this fueling area. The RAP has yet to be approved by regulatory
authorities, but the closure cost estimate retains an allowance for implementing the RAP.
Operational Requirements
The environmental operating requirements are specified within the Development Plan (ongoing operations)
and the Rehabilitation & Closure Plan (post-closure activities) submitted to the Department of Natural
Resources.
Tailings and Waste Management
Tailings deposition will continue in the Flora Lake TIA and is described within Section 18.4 of this study. The
environmental considerations with respect to this part of the facility operations is largely that of ongoing
vegetation efforts that improve basin stability and minimize the potential for both erosion and fugitive dust
emissions. The vegetation work is an integral portion of the progressive rehabilitation work specified within
the Rehabilitation and Closure Plan.
Slope stability and additional vegetation of waste rock stockpiles is another aspect of the progressive
rehabilitation work identified in the Rehabilitation and Closure Plan. To the extent supported by the mining
plans, future waste rock placement can be incorporated into the existing stockpile locations to improve
existing stockpile stability. Then additional vegetation work can be incorporated to reduce erosion potential
and thus further improve slope stability.
Solid waste management and on-site disposal will continue under provincial regulatory requirements and a
site specific Certificate of Approval for landfill operations. The Approval includes descriptions of allowed and
disallowed materials, management techniques and reporting requirements to ensure that materials are
properly handled.

Site Monitoring
Water quality monitoring has been conducted to address requirements under MMER and includes monitoring
effluent quality and water quality in receiving waters and at reference locations on a schedule as specified in
the regulations. This also includes sub-lethal toxicity testing annually for the Flora Lake FDP. Monitoring
results are reported to Environment and Climate Change Canada (ECCC) through their online
Regulatory Information Submission System (RISS). Environmental Effects Monitoring (EEM) is also
conducted under the MMER on a three-year cycle with the most recent cycle (Cycle 5) reported on
November 2017.
Metal mining environmental effects monitoring data are submitted into the Regulatory Information Submission
System (RISS) maintained by ECCC. Tacora has reviewed historical data in RISS for exposure (Wabush
Narrows, Long Lake, and Flora Outlet Arm) and reference sites (Walsh River and Jean River) for
exceedances of MMER authorized limits of arsenic, copper, lead, nickel, zinc and total suspended solids
(TSS). The only exceedances in that database for the period 2004 to 2016 are for TSS (> 30 mg/L) at Flora
Outlet Arm associated with seasonal spring runoffs that temporarily re-suspend solids during high flow rates.
Water and effluent quality monitoring is conducted under the mine’s Certificate of Operations (CoA), including
acute lethality biological testing. Monitoring results are reported to the NDMAE through their
Environmental Database Management System (EDMS).
Tacora will continue monitoring of effluent discharges and water quality as required under the federal (MMER,
CCME guidelines) and provincial (CofA) criteria, including acute and sub-lethal biological testing. Table 20.1
provides a summary of water sampling locations, as related to the applicable regulations.

Table 20.1: MMER and CofA Water Quality Monitoring Stations

Regulatory Requirement
MMER Real Time NDMAE
MMER Sub- Stream NDMAE Acute NDMAE
Location (Site) MMER
Water Lethal Flow and Effluent Lethality Water
EEM
Quality Toxicity Water Quality Toxicity Quality
Tests Quality Tests
Jean River X X
Walsh River X X X
Virot Lake X X X
Long Lake (West
Pit Dewatering X X X
Settling Basin)
Wabush Narrows X
Flora Outlet Arm X X X X X X X
Tailings Line
Emergency Dump X X X
Basin #1
East Pit
Dewatering X X X
(Sylvio Basin)
Knoll Lake X X X
West Pit
Extension Deep X
Well Discharge
The two existing ambient air quality monitoring stations will remain operational throughout the mine life unless
the Province determines they are no longer required. One of the two stations monitors total particulate matter
less than 100 microns (TPM), Particulate matter less than 2.5 microns (PM 2.5) and sulfur dioxide (SO2).
The second station monitors TPM and PM2.5.
Water Management
Surface water drainage patterns will not materially change during the site reactivation period. Any reactivation
related grading changes will be temporary in nature and the surface watersheds will remain as with previous
operations. At the plant site, surface water drains into the settling basins south of the plant, where it is treated
and eventually released into Knoll Lake. There are no planned modifications to any watershed associated
with the plant site.

Water treatment associated with tailings management consists of natural (unaided) settling of solids in
Flora Lake, approved under MMER for tailings management. Water quality in Flora Lake, as measured at its
discharge (Final Discharge Point under MMER) at the Flora Lake Outlet Arm to Flora River and then
Wabush Lake, is consistently in compliance with the metal and suspended solids criteria in the federal MMER
and provincial Environmental Control Water and Sewer Regulations (ECWSR) and the acute lethality criteria
in the MMER. The typical water quality as measured and reported also meets or exceeds the CCME criteria
for Protection of Freshwater Aquatic Life.
Pit dewatering is an ongoing part of this facility that has the potential to impact surface water quality at the
associated discharge points. There are no anticipated concerns with pollutants during reactivation as all
discharges will be pumped water from the pits with no mineral processing activity. During operations, pit
dewatering discharge locations are routinely and frequently sampled for water quality as part of the
MMER and NDMAE compliance.
Required Permits and Status
Permits
The Tacora Mine has a number of regulatory permits that must be renewed or issued to operate. These
requirements and associated status are shown in Table 20.2.

Table 20.2: Tacora Mine Permits

Issuing Department Title Date Issued Expiry Date Status
Federal
Amendment to The Metal
Mining Effluent Regulations Complete - ECCC has been notified of the change
Environment and Climate
Designating Flora Lake and Feb 5, 2009 N/A in mine ownership as per requirements under the
Change Canada (ECCC)
Three Streams as a Tailings MMER
Impoundment Area (TIA)
TACORA to complete monitoring requirements of
Fisheries and Oceans Fisheries Act Authorization Amended
N/A the FAA. Transfer of the FAA to TACORA
Canada (DFO) (FAA) for the Vern-Hay Project Mar 4, 2016
requested in early November.
Licence to Store, Manufacture Contractor to be engaged by TACORA to obtain
Natural Resources Canada TBD TBD
or Handle Explosives necessary approvals
Provincial
Update required every 5 years Plan submitted 21 November 2017; pending
Development Plan January 2018
after date Indigenous and government review
Plan submitted June 9, 2017; Financial Assurance
Update required every 5 years
Department of Natural Reclamation and Closure Plan January 2018 approved July 2017; pending Indigenous and
after date
Resources government review
Separate application; issued following approval of
Mill License January 2018 TBD the Development and Reclamation and Closure
Plans

Tacora Mine Permits (Cont’d)
Issuing Department Title Date Issued Expiry Date Status

Environmental Assessment
November 21, 2017 N/A Project Released
Registration
Water Use License Renewal application submitted 21 November 2017;
Aug 12, 2008 July 1, 2014
(WUL-03-067) pending Indigenous and government review
Water Use License Anticipated Application submitted 21 November 2017; pending

Department of Municipal TBD
(Pit dewatering - new) December 2017 Indigenous and government review
Affairs and Environment
(DMAE)
Certificate of Approval Application submitted 21 November 2017; pending
May 21, 2012 May 31, 2016
(CofA), (#AA12-055569) Indigenous and government review
Memorandum of Agreement
Updated MOA draft ready at Water Resources
(MOA) to Operate a May 23, 2013 Mar 31, 2016
Division
Hydrometric Station
(CofA), Waste Management Requested transfer of existing CofA to TACORA on
Feb 10, 2017 Dec 31, 2017
(LB-WMS17-01001G) November 27, 2017
Blasters Safety Certificate TBD TBD Contractor to obtain approvals
Magazine License TBD TBD Contractor to obtain approvals
Approval for Storage and

Renewal and transfer of previous approvals is
Handling of Gasoline and TBD TBD
Service NL required
Associated Products
Fuel Tank Registration TBD TBD As above
Approval for Used Oil Storage
TBD TBD As above
Tank System
Material Lift Certificates TBD TBD As above
Boiler and Pressure Vessels TBD TBD As above

Bonds
There are three (3) financial assurance requirements that Tacora had to put forward regarding environmental
remediation protection; one for mine reclamation and two related to fisheries habitat restoration. These
requirements have been met by issuing appropriate Letters of Credit (LOC) or escrow account to the required
regulatory authorities.
Table 20.3: Financial Assurance Requirement

Program Regulatory Why Amount & Status
Authority
Rehabilitation & Closure Plan DNR Closure (without CAD 36.751 M escrow account
reactivation) established July 18, 2017
Mine Closure Before resuming operations, escrow
account balance must increase to
CAD 41.738 M
Authorization for Permanent Alteration, Fisheries and Flora Riverine CAD 97 K LOC issued July 17, 2017
Disruption or Destruction (PADD) of Oceans Canada Monitoring program
Fish Habitat, under the Fisheries Act
Fisheries Act Authorization #06-04-001 Hay Riverine & Loon CAD 111.5 K LOC issued
amendment2 Lake Enhancement July 17, 2017
Social and Community
Tacora has been in regular contact with the local communities as well as with the Indigenous governments
and organizations having a stated interest to the area. These community and stakeholder consultation
activities have included frequent meetings with Mayors and Councils, local businesses, Indigenous leaders,
local political representatives, local interest groups, provincial and federal regulators.
Municipalities
Tacora met with elected officials from Labrador City and Wabush on July 25, 2017 to provide an introduction
to the company and business overview of the mine. Also attending were elected provincial and federal
representatives. Tacora has met privately with Wabush elected officials on July 25, August 15, and
October 27, 2017 to discuss matters of mutual importance.
The Town of Wabush desires to enter into a “Grant in Lieu of Taxes” agreement that would be similar to one
previously in effect with the previous mine owners. The mine is located outside of the municipal taxing district,
thus the desire for a separate agreement. It is not proposed as an agreement related to any type of

environmental performance issue, but solely as a revenue generating instrument for the municipality. These
types of agreements are typical in the region, as the communities depend on the mining industry to support
municipal capabilities such as emergency response. Tacora has started discussions with the
Wabush Town Council on such an agreement in principle, but there have been no specific negotiations to
date.
Indigenous Communities
The Quebec-Labrador Peninsula area has five distinct Indigenous groups claiming traditional and Aboriginal
rights to all or part of the Project area. The communities served by these groups and organizations are shown
in Figure 20.1. Several of the Indigenous governments and organizations have overlapping territorial or land
claims. However, the land claims of Quebec Indigenous groups in Labrador have not been accepted for
negotiation by the Government of Newfoundland and Labrador.
The Labrador Innu Nation, representing Innu in the communities of Natuashish and Sheshatshiu, claims
Aboriginal rights and title to most of Labrador. Their land claim was accepted for negotiation by the
Government of Canada and the Government of Newfoundland and Labrador, with formal negotiations
beginning in 1991. An Agreement-in-Principle was signed in November 2011 and a Final Agreement is
presently being negotiated. TACORA is beginning meetings and negotiations with the Innu Nation regarding
a likely Impacts and Benefits Agreement (IBA), even though the mine reactivation does not have any
additional impacts on historical Indigenous rights.
A second group with asserted land claims to the Labrador west region is the Innu Nation of Takuaikan
Uashat Mak Mani-Utenam (Uashat or ITUM). The Uashat live in two settlements within their reserve,
Uashat and Maliotenam, both on the Quebec North Shore, near Sept-Iles. Although the Uashat’s land claim
has not yet been accepted by the Newfoundland and Labrador government, Tacora is beginning discussions
with the Uashat to identify areas of mutual benefit for both parties.
The third group that claims historical land use rights within Labrador west is the Innu Nation of Matimekush-
Lac John (MLJ). The people were traditionally members of the Uashat located adjacent to Sept-Iles, this band
voluntarily moved to the Schefferville region in the early 1950s when the Quebec North Shore & Labrador
(QNS&L) Railroad was completed. Tacora is in the process of negotiating a Memorandum of Understanding
with MLJ to set a framework for ongoing discussions and possible IBA negotiation.

Figure 20.1: First Nation Reserve Locations

Also located in the Schefferville, QC area is the Naskapi Nation of Kawawachikamach (Naskapi). They were
originally a small nomadic tribe, settling in Fort Chimo in the mid-1800s, before moving to Schefferville in the
1950s. The Naskapi relocated to the present site of Kawawachikamach, approximately 16 km north of
Schefferville in the 1980s following the James Bay Settlement. To date Tacora has not entered into any MOU
or IBA discussions with the Naskapi Nation.
The final Indigenous group that Tacora is working with is the NunatuKavut Community Council (NCC). Also
identified as NunatuKavut, the members of this group self-identify as Southern Inuit, as per their 2010 land
claim assertion document entitled Unveiling NunatuKavut. NCC states that its 6,000 members live in
23 Labrador communities, seventeen of which are on the southeast coast from Paradise River to L’Anse au
Clair. It also states that members reside in six other communities in central and western Labrador, including
Happy Valley-Goose Bay and Labrador City. NunatuKavut has filed a comprehensive land claim with the
province of Newfoundland and Labrador as well as with the federal Government of Canada. Tacora has met
with NCC’s leadership and is beginning discussions about areas of mutual benefit.
Mine Closure
The Rehabilitation and Closure Plan (RCP) uses the approach developed by the previous owner of Scully
Mine, Cliffs, in their 2014 Plan and adjusted it to reflect the requirements in the draft
2010 Mining Act Guidelines and recent meetings with Department of Natural Resources, Mining Division
staff. The rehabilitative measures presented have been developed at a conceptual level for the purpose of
preparing the RCP and to provide the basis for estimating the cost of closure.
Remediation and Reclamation
Closure of the site will consist of the following elements:
• Removal and appropriate disposal of all hazardous chemicals, reagents and materials from both the
mine and surface facilities that could otherwise present a risk of future environmental harm;
• Demolition and removal of all above-grade buildings, foundations (to 300 mm below grade) and other
infrastructure (e.g., overhead piping, electrical cables) no longer required once the mine has closed;
• Shipping and sale of salvageable material if prevailing salvage markets and scrap prices and
associated economics permit; otherwise these materials will be removed for approved disposal off
site;
• Disposal of all non-salvageable, non-hazardous demolition debris into an approved on-site or near-
site waste disposal site;

• Cleanup of all surface yards including removal and appropriate disposal of all materials;
• Assessment of soil contamination in the area of the surface facilities and implementation of
appropriate management measures (i.e., remediation or Human Health and Ecological Risk
Assessment) to address contaminated soils identified;
• Removal of fencing, recontouring of roadways and restoration of natural drainage patterns wherever
practical;
• Decommissioning of seven tunnels;
• Re-vegetation of the tailings management area to control erosion and, where practical, re-vegetation
of the plant and non-flooded mine site footprints (as dictated by soil availability). If soil availability is
limited, other means such as hydroseeding will be used;
• Natural flooding of the open pits to enhance environmental stability and re-establish natural drainage
patterns;
• Berming of the open pits to reduce accessibility;
• Berming of the waste dump crests and vegetating the dump slopes that are visible from the towns of
Wabush and Labrador City as well as Duley Lake; and
• Monitoring activities and programs to evaluate site erosion, pit wall stability, surface water and
groundwater quality, pit infilling, site access control and treated and revegetated areas, including
implementation of required corrective measures to deal with environmental concerns that may arise
in the post-closure time period.
Estimated Reclamation Costs
The cost to decommission and reclaim the open pits, waste rock dumps, ore handling and processing
facilities, tailings management area and all of the related infrastructure associated with the Scully Mine site
is estimated to be CAD 41,738,730. The cost estimate was determined by reviewing and updating the
approved 2014 cost estimate completed by the previous owner, Cliffs, with some changes to reflect revisions
envisioned in the 2016 draft closure plan, additional research, recent contractor estimates and changes
mandated by the Department of Natural Resources as discussed throughout the Plan. Where possible costs
based on current knowledge for activities were used. This estimate includes costs for an ongoing
environmental monitoring program which will extend beyond closure. Additional long-term monitoring costs
are included for maintenance and geotechnical inspections.

The following criteria and assumptions have been considered in completing the cost estimates:
• The cost estimate was derived largely from updating the original cost estimates completed in 2011
and 2014;
• An inflation rate of 10.3% was applied using the Canadian consumer price index for the Province of
Newfoundland and Labrador;
• The volumes and quantities were obtained from a study carried out by Applied Technical Resources
Inc. (ATR Inc.) of Wheeling, West Virginia entitled "Asset Retirement Obligation Study" of Scully
Mines. ATR Inc. conducted a survey of each building and provided estimated costs for asbestos
removal, building and equipment demolition and removal and for the breakup and removal of all above
and at grade concrete. The estimates prepared by ATR Inc. were in USD and converted to CAD using
the exchange rate on February 27, 2003 (USD 1 = CAD 1.39). The current estimates use the ATR Inc.
estimates, corrected for inflation using the Bank of Canada consumer price index;
• All costs are in Canadian funds for all labour, materials and equipment;
• All costs are in year 2017 dollars with no allowance made for escalation;
• The estimate assumes that all surface buildings and infrastructure will be demolished after the
facilities have been cleared of process materials and after all potentially hazardous materials have
been removed. Material and equipment will be disposed of at the on-site waste disposal facility or
disposed of offsite. Only materials and equipment that have been decontaminated and/or have had
all potentially hazardous products removed (i.e., removal of hydrocarbons, asbestos, insulation,
reagents and chemicals, etc.) would be placed into the on-site landfill in accordance the Waste
Disposal Plan;
• The estimate assumes that experienced third party contractors would be retained to demolish most
of the surface buildings. The contractors would also be responsible for the removal and disposal of all
potentially hazardous materials such as chemicals, reagents, glycol, lubricants, hydrocarbons,
hydraulic fluids, refractory materials, instruments containing nuclear source material, PCB containing
light ballasts, etc. The contractor will be tasked with the removal of any asbestos siding and/or
insulation materials, demolition and removal of the buildings and their contents including the
demolition and removal of all above and at grade concrete foundations. Mobilization and
demobilization costs have been included in the cost estimate;
• Costs have been included for the clean out of all hydrocarbon storage tanks and for the demolition
and disposal of these facilities following cleaning;
• Costs have been included for the removal from site of remaining chemicals, hydrocarbons, etc. that
cannot be returned to the original suppliers;

• Costs have been included for the demolition and removal of all above ground utilities, such as power
distribution lines and poles, pipelines and trestles and site rail lines; and
• Reclamation cost estimates for the remaining tailings materials not already reclaimed have been
based on actual experience developed by Scully Mine in the successful reclamation of tailings in the
North Basin of Flora Lake.

21 CAPITAL, SUSTAINING AND OPERATING COSTS
Capital Expenditure Estimate
Capital Expenditure Summary
The re-start of the Scully Mine requires an initial capital expenditure (“CAPEX”) of CAD 205.5 M inclusive of
contingency but exclusive of applicable taxes, escalation, risk and management reserves. The accuracy of
the estimate is at ± 16.4% given the methodology and level of confidence with respect to the project definition.
Table 21.1 presents the CAPEX summary by Engineering Work Package (“EWP”) and Table 21.2 by project
area.
Table 21.1: Capex Estimate Summary per EWP
Total Costs
EWP # and Description Manhours
(k CAD)
01 - Dryer Re-Built, #2 19,351.8 3,437
02 - Mill Gear Replacement, #6 2,587.7 1,021
03 - 1B Belt Magnet 1,101.1 313
04 - Fresh Water Header 1,561.6 218
05 - Mill Feed Chute 4,053.2 879
06 - Mill screen oversize and spiral feed pump 1,089.5 389
07 - Manganese Reduction 25,526.8 8,360
08 - Primary Crusher Rock Hammer 3,895.1 1,995
09 - Tails line improvement - -
10 - Added loadout bin capacity 22,696.5 14,707
11 - Plant Structural Repairs 1,815.8 405
12 - Dryer PLC Update 6,082.1 1,212
13 - Electrical Refurbishment 15,495.0 4,757
14 - New Instrumentation 1,791.6 298
15 - Rod Deck Conversion 2,868.9 630
16 - Plant PLC Upgrade 1,428.7 2,020
17 - Railcars and Tripack - 4,030
18 - Rail Track - 287
19 - Mining - 105,732
INDIRECTS (excluding escalation and risk) 2,226.9 54,782
TOTAL 113,572.2 205,472

Table 21.2: Capex Estimate Summary per Area

Area # and Description Manhours Total Costs (k CAD)
00 – General / Unassigned 8,230.1 3,460
01 - Site Preparation and Plant Layout - -
02 - Jean River Crossing - -
03 - Temporary Construction Facilities - -
04 - Yard Piping: Water Supply 1,561.6 218
05 - Roads and Railways - 4,317
06 - Tailings Disposal 84.7 328
07 - Electrical Distribution 2,180.1 578
08 - Boiler Room 12.1 21
09 - Switch Room and Switch Yard 6,688.0 2,264
10 - Water Pump House 344.6 112
11 - Maintenance Shops and Warehouse - -
12 - Administration Building - -
13 - Crusher Building 3,802.3 2,064
14 - Ore Conveyors - -
15 - Ore Storage 12.1 64
16 - Mill Building 33,257.2 10,649
17 - Dryer Building 28,254.4 5,258
18 - Concentrate Conveyors - -
19 - Loadout Bin 22,708.6 14,740
20 - Thickeners - -
21 - Classifier Building 1,101.1 313
22 - Truck Storage - -
23 - Mobile Equipment 3,108.5 106,304
24 - Mine Infrastructure - -
910 - EPCM - 2,642
920 - CONSTRUCTION FIELD INDIRECTS - -
930 - FREIGHT AND LOGISTICS - 372
940 - VENDOR REPRESENTATIVES - 2,058
950 - COMMISSIONING 2,226.9 245
960 - TACORA / OWNER'S COSTS - 23,865
970 - Contingency - 25,600
980 – Escalation (excluded) - -
990 – Risk (excluded) - -
SUB-TOTAL: INDIRECT COSTS 2,226.9 54,782
TOTAL 113,572.2 205,472

General
The current chapter outlines the methodology used for the development of the capital cost estimate (CAPEX)
by defining the sources of data, the assumptions and the exclusions.
21.1.2.1 Objective
The objective of this Capex estimate is to establish the cost baseline for Tacora’s Scully Mine re-start Project
by performing engineering in order to increase the project definition to a FS level, i.e. between 10% and 40%
per AACE, and hence supporting the FS estimate.
21.1.2.2 Type of Estimate and Accuracy
This Capex estimate qualifies as Class III – Feasibility Study Estimate – per AACE recommended practice
R.P.18R-97. The accuracy of this Capex estimate has been assessed at +/- 16.43%.
21.1.2.3 Scope coverage of the FS Capex Estimate
The Capex estimate includes all of the Project’s direct and indirect costs, complete with the associated
contingency. As the Project is scheduled to be executed in 2018, escalation, which is estimated to be
marginal, is excluded. Although a risk assessment was performed, no risk reserve has been included.
The Capex covers all costs to be expanded during the period starting at the acceptance by Tacora’s Board
of Directors of this FS and ending on October 31st, 2018.It should be noted that any further studies beyond
this FS, including the analysis of various business cases, options and/or scenarios, are explicitly excluded.
Also excluded from this Capex estimate are OPEX costs.
21.1.2.4 Mandate and Division of Responsibility
Ausenco is responsible for developing the estimate for the scope of work under its responsibility and for
compiling the estimates developed by Tacora and G-Mining, as obtained.
Table 21.3 presents a division of responsibility matrix per Engineering Work Package (EWP). Although
MTO’s and capex were not entirely developed by Ausenco, thorough analyses of MTO’s developed by others
and budgetary proposals obtained by Vendors and Contractors, both supplemented by Ausenco’s experience
has lead Ausenco to take ownership, under all reserves and within the limits set out throughout this document.

Table 21.3: Division of Responsibility per EWP
Responsibility
EWP # and Description Scope of Work / MTO
Capex Estimate
Engineering development
01 - Dryer Re-Built, #2 Tacora Ausenco Ausenco
02 - Mill Gear Replacement, #6 Tacora Ausenco Ausenco
Tacora / Ausenco
03 - 1B Belt Magnet Ausenco Ausenco
(E&I)
04 - Fresh Water Header Tacora Ausenco Ausenco
Tacora / Ausenco
05 - Mill Feed Chute Ausenco Ausenco
(E&I)
06 - Mill screen oversize and spiral feed
Tacora Ausenco Ausenco
pump
Tacora / Ausenco
07 - Manganese Reduction Ausenco Ausenco
(E&I)
08 - Primary Crusher Rock Hammer Tacora / Ausenco Ausenco Ausenco
09 - Tails line improvement – CANCELLED n/a n/a n/a
10 - Added loadout bin capacity Tacora / Ausenco Ausenco Ausenco
11 - Plant Structural Repairs Tacora / Ausenco Ausenco Ausenco
12 - Dryer PLC Update Tacora Ausenco Ausenco
13 - Electrical Refurbishment Tacora Ausenco Ausenco
14 - New Instrumentation Tacora Ausenco Ausenco
15 - Rod Deck Conversion Tacora / Ausenco Ausenco Ausenco
16 - Plant PLC Upgrade Tacora Ausenco Ausenco
17 - Railcars and Tripack Tacora Tacora Ausenco
18 - Rail Track Tacora Tacora Ausenco
19 - Mining G Mining G Mining G Mining
900 – INDIRECTS Tacora / Ausenco Tacora / Ausenco Tacora / Ausenco
21.1.2.5 Project Description
The following paragraphs describes high level scopes for each EWP:
01 - #2 Dryer Re-Build:
The scope of this work is to supply refractory materials, equipment, labor, room and board, travel, living
expenses and supervision to perform required rebuild of the #2 Fluosolid dryer at concentrator facility in
Wabush. This scope is based off from previous dryer condition; further inspection may be needed to build a
more concise level of detail. The scope issued for budgetary proposal consisted of:

• Verification of the existing conditions and review of documents. The contractor shall visit, examine
and check the current and foreseeable conditions, as to raise awareness of all the problems, which
could affect the cost, or realization of the project.
• Demolition and removal from site of all refractory and steel noted below.
• Installation of all anchors necessary for the refractory installation
• Complete refractory rebuild of the firebox section, from the slab to the cone section 12’, cone section
2’10” and 1’ above the cone section.
• Complete floor replacement.
• Complete refractory and steel replacement of the horizontal combustion chamber and first 8’ from
firebox.
• Supply and install of one burner block.
• Supply of one heat shield
• Supply and installation of two refractory lined expansion joints. One at elevation 48’3” and the other
approximately 4’ from the firebox.
• Bake out of refractory materials to 600 F.
Scope excluded from the retained proposal and included by Ausenco and hence forming part of the capex
estimate consists of: dome brick, slab and tuyeres; pre-heater duct; propane supply during construction;
permitting for propane use; governmental inspection of propane piping; removal of existing heat insulated
ceiling panels and replacement with a new one.
02 - Mill Gear Replacement, #6
The scope of this work is to supply materials, equipment, labor, room and board, travel, living expenses and
supervision to perform required rebuild of the #6 mill gear replacement. Scope details are as follows:
• Removal of existing bull gear, intermediate gear set, motor, inching drive and sole plate.
• Cleaning/ sand blasting/ cosmoline removal from new gear sets and sole plate supplied by Tacora.
• Removal of existing grout under sole plate, roughing surface for new grout and pouring of new grout
under new sole plate to manufactures specifications.

• Installation of new bull gear, intermediate gear set and sole plate to manufactures specifications.
• Installation of removed motor and inching drive to manufactures specifications.
• Alignment of entire driveline back through the motor per manufacture specifications.
• Lubrication of driveline per Tacora’s direction.
• Full runout of driveline per manufactures specifications.
• Produce report of all clearances (root and backlash) from runout that meets manufactures
specifications
estimate consists of: installation of anchor bolts for the new drive equipment; removal and re-installation of
the existing lube system.
03 - 1B Belt Magnet
supervision to perform the installation of the 1B Belt Magnet. Scope includes:
• Verification of the existing condition and review of documents. The contractor shall visit, examine and
check the current and foreseeable conditions, as to raise awareness of all the problems, which could
affect the cost, or realization of the project.
• Install Belt Magnet supplied by Tacora as per manufacturer’s specifications including all mechanical
and electrical works.
• Install drop chute supplied by Tacora as per manufacturer’s specifications.
• Test the operation of the belt magnet to owner satisfaction
estimate consists of: electrical and instrumentation; third party inspection of fire protection system, following
its re-installation.
04 - Fresh Water Header
supervision for the scope pertaining to the replacement of an existing heat traced water line. A total of 215
meters of 6” diameter insulated carbon steel pipe for heat traced water supply and return need to be replaced

as the line froze and broke. The line, identified as line #8 in one of Kaiser’s drawing, is located inside a below
grade tunnel running from the classifier building to the mill building.
05 - Mill Feed Chute
supervision to perform required Mill Feed Chute and Feed Conveyor Changes (5 of 6 lines). Scope includes:
• Cut 5 conveyor belting in order to shorten as shown in the drawings.
• Remove/replace structural steel on 5 feed conveyors as shown in the drawings
• Remove/re-install 5 feed conveyor head pulleys
• Slice 5 feed conveyors together to new desired length to accommodate shorter frame length
• Remove/re-install 5 mill feed chutes.
• Remove dead bed and install slope plate as shown in the drawings.
• Prime/paint all new structural steel.
• All work areas are to be kept clean of material and debris.
estimate consists of electrical and instrumentation hookup.
06 - Mill screen oversize and spiral feed pump
New recirculation and spiral feed pumps need to be procured and installed; the scope consists of the removal
of the existing pumps and installation of new pumps; the pump design still need to be addressed; an
allowance is carried in the capex estimate to cover for the procurement of the pumps. It is assumed that the
pumps’ motors have already been procured by Tacora .

07 - Manganese Reduction
supervision to perform required engineering, demolition and installation of the MN reduction lines 3-6 and
newly constructed EE room. Scope includes:
and check the current and foreseeable conditions, as to raise awareness of all the problems which
could affect the cost or realization of the project.
• Design/engineer needed modification to EE room to accommodate removal of HT electrical gear and

installation of MN reduction equipment electrical gear. If additional HT electrical gear needs to be
removed to create space this can be accepted.
• Demolition and removal of HT unit’s lines 3-6, associated pipe work, associated electrical works and
associated dust collection.
• Demolition of flooring to accommodate MN reduction machines as depicted on drawings.
• Supply and construct of EE room modifications including, electrical lineups, buckets, drives and
associated cabling and cable tray.
• Supply and installation of designed floor modifications below MN reduction machines lines 3-6 all
levels.
• Installation of MN reduction lines 3-6.
• Running and terminating all wiring associated with MN reduction lines 3-6.
• Supply and installation of dust collector piping as associated with MN reduction lines 1-2.
• Installation of trolley beam for rail hoist as depicted on drawings.
estimate consists of electrical and instrumentation work.

08 - Primary Crusher Rock Hammer
supervision to perform required engineering, demolition and installation of two (2) new rock breakers at the
crusher ROM bin. Scope includes:
• Removal of ore and garbage from the ROM bin (performed by Tacora);
• Construction of Concrete piers.
10 - Added loadout bin capacity
supervision to perform required engineering and construction of two (2) x 3000 t load out bins. The scope of
work is defined below, per major discipline.
Demolition
Dismantling and removal of cladding, equipment door and supporting structural steel on end walls per
Elevations E-E and F-F on ref drawing 19-6-SS and lower enclosed shed from grid lines E3 to E5 ref drawing
19-4-SS
Demolition of foundations, walls, slab on grade, curbs, rail and accessories from grid lines E3 to end of slab
between grid lines E5 and E6 ref drawings 19-2-SC and 19-3-SC and 11298.
Concrete
Piling, foundations, piers and walls. Ref drawings 19-1-SC and 19-2-SC
New slab on grade, rails and rail accessories. Ref drawing 11298

Structural Steel
Modifications to existing steel at demolition battery limits
Supply, fabrication and erection of new structural steel for:
• upper conveyor housing ref 19-1-SS and 19-4-SS
• lower train shed ref 19-4-SS, 19-6-SS and 19-8-SS
• Conveyor support floor structure elev: 89’-0” ref 19-1-SS
• Service platform elev: 16’-10” ref 19-3-SS
Mechanical
Dismantling of existing car opening mechanism and relocation to new position – ref drawing 19-007-M;
New bins
• Installation of new 3000 T bins.;
• Supply and install bin discharge chute and gate including hydraulic cylinders (2x) – ref drawings
13005, 19-006-M;
• Supply and install new 25 HP hydraulic unit including tubing to new hydraulic cylinders;
Tripper extension (see reference drawings listed on GA 102114-19-M-001)
• Cut belt;
• Dismantle and relocate head frame, pulley and drive to new location;
• Remove existing pulleys and install new pulleys on the tripper conveyor (supplied by others) as below
sketches:
• Install new conveyor section between relocated head frame and existing conveyor – supplied by
others in pre-assembled 20 ft sections;
• Detach end of seal belt and splice new extension (70 ft long, supplied by other) and attach to new
feed slot end (2 sides) – ref 19-016-M;

• Install new belt extension (70ft long, supplied by others) and splice;
• Dust collection
Architectural
New cladding and roofing for end walls and lower level train shed ref 19-1-SS, 19-4-SS, 19-6-SS
New equipment and new man doors ref: elevation F-F dwg. 19-6-SS
11 - Plant Structural Repairs
supervision to perform required detailed engineering, shop fabrication as well as installation or repairs to the
existing structure that has deteriorated through the years. The scope is based on a BBA report dated 2012
along with subsequent inspection performed by Cliffs, both amended by Tacora.
As part of the risk assessment and included in the recommendation chapter of this FS, a thorough
assessment of the existing structure along with all repairs necessary for safety and/or plant re-start should
be envisaged. The Capex estimate pertaining to structural repairs is limited to Tacora’s assessment and
Ausenco makes no representation of its completeness and accuracy. Due to the uncertainty in the detailed
scope of work for the 15 identified plant structural repair items and the exact repair requirements, the
estimated costs were established from data provided by Tacora.
12 - Dryer PLC Update
The scope of work for the plant PLC includes the addition of instruments for the new burner management
system.
13 - Electrical Refurbishment
The scope of work is based on a visual inspection along with additional requests issued by Tacora
(i.e. replacement of obsolete VFD’s). The scope is also based on assumptions and only testing of the existing
electrical equipment will confirm whether or not changes or modifications need to be performed.

14 - New Instrumentation
The scope of work is based on a visual inspection and consist in the installation of nuclear sources and re-
calibration of the instruments.
15 - Rod Deck Conversion
supervision to perform required detailed engineering, procurement and installation of a rod deck venturi
scrubber as well as dismantling of the existing multivane scrubber. It is assumed that the construction work
will entail opening the scrubber shell to a sufficient size to enable the entry of construction workers and
equipment inside the scrubber as well as to enable removal of the existing multivane scrubber and installation
of the rod deck
16 - Plant PLC Upgrade
The scope of work for the plant PLC upgrade includes the addition of instruments necessary to migrate from
the old, obsolete, system to a new system.
17 - Railcars and Tripack
supervision to perform the following.
• Repair crack in car underframe;
• Repair at end of cars;
• Repair air brakes;
• Repair side sills;
• Repair or replace strikers;
• Replace roller bearings.
The costs associated to the refurbishment of railcars’ trucks have been transferred to sustaining capex.

18 - Rail Track
supervision to perform the following rail track work:
• Remove vegetation;
• Clean track platform;
• Repair battered joints, where necessary;
• Replace rails on the tank farm tracks;
• Replace switch point on the tank farm track;
• Move barrier post at road crossing;
• Addition of kick board and flashing on bridge;
• Addition of Jordan rails on bridge deck.
19 - Mining
The scope of this work is to estimate the CAPEX to achieve the desired mining operations ramp-up to supply
the required ore quantities for mill commissioning and to determine
Part of the scope involves the purchase of mining equipment needed for mining operations ramp-up. Also
included, costs related to mining operations for the pre-production period. Finally, the remaining portion of
the investment, is for mining road construction to give access to the newly designed mine infrastructures.
The CAPEX estimate considers the currently available equipment and infrastructures on site.
The estimate is based on quotes from suppliers.
Organisation and Coding Structure
21.1.2.6 Estimating
For the purposes of this FS, the estimate was managed by Ausenco and it was Ausenco’s lead estimator’s
responsibility to manage the estimate and coordinate with Tacora and G Mining.

21.1.2.7 Estimate Coding
Estimate coding eases the interaction with scheduling, cost control, construction as well as commissioning
and operations. The following sub-sections list the various codes used for each element of cost.
21.1.2.8 Area
The project is divided into main areas as listed below:
Area Area Area

Area Description Area Description Area Description
# # #
Site Preparation and Plant Switch Room and Switch
101 109 117 Dryer Building
Layout Yard
Concentrate
102 Jean River Crossing 110 Water Pump House 118
Conveyors
Temporary Construction Maintenance Shops and
103 111 119 Load out Bin
Facilities Warehouse
104 Yard Piping: Water Supply 112 Administration Building 120 Thickeners
105 Roads and Railways 113 Crusher Building 121 Classifier Building
106 Tailings Disposal 114 Ore Conveyors 122 Truck Storage
107 Electrical Distribution 115 Ore Storage 123 Mobile Equipment
108 Boiler Room 116 Mill Building 124 Mine Infrastructure
21.1.2.9 Engineering Work Packages (EWP’s)
The project is also divided into Engineering Work Packages developed on the basis of the scope of work to
be developed.
EWP EWP EWP

EWP Description EWP Description EWP Description
# # #
Primary Crusher Rock
01 Dryer Re-Built, #2 08 15 Rod Deck Conversion
Hammer
02 Mill Gear Replacement, #6 09 Tails line improvement 16 Plant PLC Upgrade
03 1B Belt Magnet 10 Added load out bin capacity 17 Railcars and Tripack
04 Fresh Water Header 11 Plant Structural Repairs 18 Rail Track
05 Mill Feed Chute 12 Dryer PLC Update 19 Mining
Mill screen oversize and spiral
06 13 Electrical Refurbishment
feed pump
07 Manganese Reduction 14 New Instrumentation

21.1.2.10 Currency Codes and Currency Exchange Rates
All costs are expressed in their native currency; currency exchange rates were established based on OANDA
web site and are dated November 02, 2017. The base currency is the Canadian Dollar (CAD). The only
currency used other than the Canadian dollar is the U.S. dollar and the exchange rate is 1.2886 CAD/USD.
21.1.2.11 Units of Measurement
The units of measurements are based on the International System of Units; following is a list of units of
measure to be used:
Table 21.4: Units of Measurements
Description Unit of Measure (symbol)

Distance (short) meter (m)
Distance (long) Kilometer (km)
Area (small) Square meter (m2)
Area (large) Hectare (ha)
Volume (small) Litre (l)
Volume (large) Cubic meter (m3)
Weight (small) Kilogram (kg)
Weight (large) Metric tonnes (t)
Time Day (d) / hour (h)
Labour man-day (md) / man-hour (mh)
Unit EACH (ea)
21.1.2.12 Estimate Presentation
The Capex estimate is presented to Tacora as an Open Book Estimate (OBE). It forms part of a separate
document.
21.1.2.12.1 Estimating Methodology
The following sources of information and data were used for the Capex estimate development.
21.1.2.13 Labour Costs
Base unit man-hours along with productivity factors were developed using Contractor’s budgetary proposals,
where applicable, or developed internally; based on in-plant movement as well as extended workweek, 21%

is added to labour manhours to cover for productivity loss. With respect to the added loadout bin capacity,
i.e. EWP #10, an additional 30% is included to cover for the scope of work scheduled to be performed while
the plant will be in operations; it applies to structural steel, architectural, mechanical, electrical and
instrumentation. Costs associated to labour, namely travelling, room & board, supervision , safety, QA/QC,
equipment rental as well as schedule related sub-contracts are also affected; a 20% is added to these costs.
Labour rates developed internally are inclusive of the following:
• Base salaries;
• Fringe benefits;
• All applicable social charges, fees, contributions & premiums;
• Personal Protective Equipment (PPE);
• Union delegates;
• Workers rotational transportation, as appropriate;
• Room and board, as appropriate;
• Workers and staff local transportation;
• Construction equipment costs c/w rental, operations and maintenance;
• Tools & consumables c/w freight & logistics costs;
• Site direct supervision;
• Sub-contractors’ overhead & profit.
For contractors, travelling, room & board, construction equipment as well as site direct supervision are
estimated separately.
21.1.2.14 Workweek and Rotations
Depending on the planned duration for each EWP, the workweek for construction will vary between 5 days
at 10 hours per day and 6 days at 10 hours per day, so as to secure the plant start-up date scheduled for
November 2018. Where applicable, the rotation schedule for construction will be 3 weeks in followed by 1
week of R&R.

21.1.2.15 Equipment and Material Costs
The source of pricing along with their associated pricing type are listed in Table 21.5.
Table 21.5: Equipment and Materials Pricing

EWP Vendor / Contractor and Pricing
EWP title Costs (CAD)
# Element of Scope: Type
01 Dryer Re-Built, #2 Contractor; major scope Budgetary 3,245,958
Internal Ausenco: dome,
Allowance 190,774
pre-heater duct
02 Mill Gear Replacement, #6 Contractor: major scope Budgetary 969,035
Vendor; sole plate supply Budgetary 39,886
Internal Ausenco: anchor
bolts installation, lube Allowance 12,320
system
03 1B Belt Magnet Contractor: major scope Budgetary 279,386
Internal Ausenco: E&I, 3rd
party inspection of fire Allowance 33,921
protection
04 Fresh Water Header Internal Ausenco: Estimated 217,897
05 Mill Feed Chute Contractor: major scope Budgetary 832,466
Internal Ausenco: E&I Estimated 46,363
Vendor: pump supply only.
Mill screen oversize and spiral feed
06 Firm proposal but pump Allowance 32,274
pump
spec to be modified
Internal Ausenco: pump
Allowance 356,712
installation
07 Manganese Reduction Contractor: major scope Budgetary 6,412,050
Internal Ausenco: E&I Estimated 1,947,534
Vendor: rock hammer
08 Primary Crusher Rock Hammer Budgetary 1,163,881
supply
Internal Ausenco: Civil,
structural, architectural, Estimated 707,540
electrical, instrumentation
Internal Ausenco: rock
Estimated 123,958
breaker installation only
Tacora: removal of ROM
N/A 0
and debris (incl. with OPEX)
10 Added loadout bin capacity Contractor: major scope Budgetary 14,179,568
Internal Ausenco:
mechanical (dust collector),
Estimated 527,771
electrical and
instrumentation
11 Plant Structural Repairs Tacora Allowance 405,132
Internal Ausenco: electrical
12 Dryer PLC Update Estimated 1,212,387
and instrumentation
13 Electrical Refurbishment Estimated 4,756,731
and instrumentation
14 New Instrumentation Estimated 298,207
and instrumentation
Vendor: rod deck venture
15 Rod Deck Conversion Budgetary 60,000
supply
Internal Ausenco:
dismantling, demolition and Allowance 528,632
mechanical installation
Internal Ausenco: additional
Allowance 41,094
ducting

EWP Vendor / Contractor and Pricing

EWP title Costs (CAD)
# Element of Scope: Type
16 Plant PLC Upgrade Estimated 2,019,628
and instrumentation
Railcar inspector,
17 Railcars and Tripack Inspection of Wabush Budgetary 4,030,345
Railcars
Rail track inspector, Track
18 Rail Track Budgetary 286,610
Inspection
G-Mining: mine equipment
and mine support
19 Mining Budgetary 105,732,410
equipment, pre-prod, mine
roads
SUB-TOTAL: DIRECT COSTS 150,690,469
900 Indirect Costs Estimated 54,781,701
SUB-TOTAL: INDIRECT COSTS 54,781,701
TOTAL: 205,472,170
The following table presents a comparison table for the various packages for which two (2) or more quotations
were received or for the packages estimated internally by Ausenco. Costs underlined are selected for the
CAPEX estimate.

Table 21.6: Equipment and Materials Comparison

EWP # EWP title Vendor / Contractor Costs (CAD) Comment
Well detailed proposal;

03 1B Belt Magnet Contractor 1: 279 386
better scope coverage.
Contractor 2: 379 173

05 Mill Feed Chute Contractor 1: 832 486
Contractor 2: 956 241

07 Manganese Reduction Contractor 1: 5 712 050
Contractor 2: 8 995 340
Added loadout bin Bolted assembly: less

10 Contractor 1: silo supply only 4 164 600
capacity site work
Scope of work more or
less defined; welded
Vendor 1: silo supply only 1 980 000
assembly; incomplete
proposal;
Contractor 1: conveyor parts supply only 100 000
63 000 Scope of work more or

Vendor 2: conveyor parts supply only
less defined;
Contractor 1: concrete demolition only (no 109 250
qty)
In-House Ausenco: concrete demolition only 25 566 Preliminary engineering
(36 m3) only
1 498 450 Comparable to in-house

Contractor 1: concrete works only (not qty)
Ausenco
In-House Ausenco: concrete works only 1 484 427 Comparable to
(342 m3) Contractor 1Contractor 1
Contractor 1: steel supply only (no qty) 1 536 000
In-House Ausenco: steel supply only (82t + 533 172 Preliminary engineering
270m2) only
21.1.2.16 PM, E, P and CM Services
The cost estimate for engineering services were developed by Ausenco; engineering services costs consists
of, without limitation, the following:
1. Salaries, fringes, uplifts, recruitment, overhead, etc.;
2. Expenses (i.e. business and rotational travelling, including in-transit costs, etc.);
3. IT services;
4. Home office support and expenses (communications, IT services, IT equipment, courier, printing,
office space, furniture, consumables, stationery, etc.).

Engineering services costs are based on the validation – only – of the existing installations and do not include
any provision for modifications of any kind, other than those identified through this FS.
The cost estimate for project management, procurement and construction management services are included
with Tacora Owner’s costs.
21.1.2.17 Site Indirect Costs
Site indirects are included with Tacora Owner’s costs; they consist of, without limitation and as applicable,
the following:
1. Power distribution through tie-ins to the existing reticulation;
2. Construction water through the existing plant water distribution;
3. Existing offices on site will serve for PM, P and CM; it is assumed that field office supply and IT
equipment (computers and monitors, courier, printing, furniture, consumables, etc.) are included.
4. Communications are included and they include monthly fees. It is assumed that cellular phones and
short wave radios are included as well.
5. The existing tank farm will be used for all requirements by the Tacora PM team under the self-
performed execution platform and distributed as free issue consumables to sub-contractors where
applicable.
6. Existing infrastructures for the management of sewerage, construction waste (dry and wet, hazardous
and non-hazardous) and garbage, including collection, treatment and disposal is included.
7. Maintenance of existing access and in-plant roads, parking and walkways is included.
8. Access control and monitoring will be managed through existing installations;
9. Existing lay down and storage areas, as well as warehousing, complete with, but not limited to,
materials management and materials handling equipment, fencing, signage and lighting will be used
for the construction phase. Costs for related labour is included.
10. Site security will be ensured by Tacora’s staff;
11. Existing light vehicles will be used for the construction phase;
12. Existing first aid and medical installations will be used for the construction phase;

13. Site Surveying is included;
14. NDE and QA/QC testing, including laboratory services, are included;
15. General and final clean-up is included.
21.1.2.18 Owner’s Costs
Owner’s costs are included with Tacora OPEX during the construction period.
21.1.2.19 Other Costs
The following assumptions form the basis for the calculations of other direct costs:
• Heavy lifts are included with contractors bid, as applicable;
• Testing (hydro, pneumatic, leak) is included with the proposals;
• Logistics and freight are included with the contractors’ proposals. Where necessary, an allowance for
land transportation, estimated at 5% of equipment and materials costs, is included.
• POV and commissioning are included with the proposals.
21.1.2.20 Contingency
The project contingency was evaluated using a probabilistic approach developed from an assessment of the
accuracy for each EWP (for the direct costs) and for each area (for the indirect costs). A simulation was run
using the @Risk software; the output gives a contingency of CAD 25.6 M representing 13.7% of all costs.
21.1.2.21 Escalation
All costs are expected to be expanded during the year 2018 and hence, no allowance for escalation is
included.
21.1.2.22 Risk Analysis
The Tacora, AUSENCO and G-Mining project team members assisted in a risk workshop session to identify
potential CAPEX and OPEX risks (both threats and opportunities) to be captured in a risk register. Each risk
was assigned a likelihood and a severity rating along with mitigation measures. At this stage, no risk
assessment has been developed and it is recommended that when entering the next phase, such an

assessment be developed so as to integrate the costs associated with each mitigation along with post-
mitigation/residual risk reserve.
Estimate Qualifications
Estimates are developed within a frame of reference which is defined by assumptions and exclusions grouped
under estimate qualifications.
21.1.2.23 Assumptions
The following is a list of assumptions that enabled the development of the estimate:
1. Construction, POV and commissioning will be performed in 2018;
2. Estimate assumes logical sequences in work activities and that sequence in work activities will not be
altered;
3. PM, E, P and CM team will be in sufficient quantity so as not to delay the execution;
4. PM, E, P and CM team will have construction expertise so as not to delay the execution;
5. Estimate assumes engineering will be sufficiently developed to support lump sum type contracts.
6. Estimate assumes no contract of the Time and Material type;
7. Estimate assumes engineering will be sufficiently developed to support construction and to avoid
rework.
8. Direct craft labour will all be sourced from the province of Newfoundland and Labrador;
9. Direct craft labour will be a combination of journeymen and apprentices, all of which will be part of a
union;
10. Labour decree will remain effective throughout the construction period;
11. On-site accommodations will be sufficient in quality and quantity in order to avoid labour disruption
12. Access to site will be allowed 7 days per week and 24 hours per day
13. Estimate assumes smooth transition between phases
14. Estimate assumes that the source, quantity and quality for power, fuel, water will be suitable for the
construction phase.
15. Overburden disposal will be within plant limits

16. Estimate assumes that the source, quantity and quality of engineered fill and backfill material will be
suitable;
17. Estimate assumes no variation to the baseline project schedule
18. No interruption in job continuity
19. Estimate assumes normal peak workforce and ramp-up.
21.1.2.24 Exclusions
Following are items specifically excluded from the baseline estimate.
1. Any and all taxes;
2. Currency fluctuation from the rates set out;
3. Escalation;
4. Work stoppage resulting from a labour dispute;
5. Work stoppage resulting from community relations dispute;
6. Work stoppage resulting from environmental issues;
7. Allowance for turnovers;
8. Scope change;
9. Allowance for carry-over work;
10. All costs beyond start-up
11. Allowance for rework as a result of failed QA/QC inspection
12. Costs associated with the remediation of deficiencies
13. Change to the labour decree
14. Allowance for underground obstructions
15. Delays, including those caused by permitting issues, project financing, etc.
Sustaining Capital Costs Estimate
The scope of work forming part of the sustaining capex consists of major and support mining equipment as
well as mine dewatering, tailings storage facilities that will need to be expanded in years 2025, 2034 and
2039. Also included with sustaining capex is a skid mounted booster pump house to be added in 2025 along

with a skid mounted cyclone cluster. The cyclone cluster will enable the production of the appropriate material
to build the dikes. Additional tailings pipelines in year 2025 and in year 2034 are also part of the sustaining
capex. The direct costs are based on preliminary engineering quantities as well as in-house rates.
Finally, sustaining capital costs related to repairing the railcars and Tripack trucks will be incurred during the
early stage of the mine operations period; the direct costs are based on the refurbishment option extracted
from the Wabush railcars’ inspection report.
Indirect costs are factored from the direct costs. The following table presents a summary of the sustaining
capex costs.

Table 21.7: Major Area and Element of Scope

Costs
Major Area and Element by Scope
(CAD)
Mining
Major Equipment 216,465,801
Support Equipment 22,657,006
Dewatering 17,563,200
Equipment, Other -
Sub Total: Mining 256,686,007
Process Area
Tailings Area: Pipeline 3,724,125
Tailings Area: Mobile Pumphouse 444,000
Tailings Area: Mobile Cyclone 582,400
Sub Total: Process Area 4,750,525
Tailings Area
Tailings Area: Stripping, Extension 1 425,000
Tailings Area: Starter Dikes, Extension 1 10,250,000
Tailings Area: South Extension 1 56,250,000
Tailings Area: Stripping, Extension 2 275,000
Tailings Area: Starter Dikes, Extension 2 6,875,000
Tailings Area: South Extension 2 24,000,000
Tailings Area: Stripping, Extension 2.5 200,000
Tailings Area: Starter Dikes, Extension 2.5 4,687,500
Tailings Area: South Extension 2.5 18,625,000
Sub Total: Tailings Area 121,587,500
Railcar Repairs 44,844
Sub-Total Direct 383,068,875
Owner's Costs 641,321
Engineering Services 475,053
Contingency: Mining 25,668,604
Contingency: Other Costs 31,874,811
Sub-Total Indirect 58,659,785
Total Direct & Indirect
441,728,660
(escalation and risk are excluded)
Mining initial Capital and Sustaining Capital
As previously mentioned, the initial and sustaining capital for the mining portion of the study was performed
by G Mining Services Inc.

21.3.1.1 Mining Pre-Production
The pre-production capital includes mining of 2.6 Mt. This pre-stripping is necessary to achieve the plant’
commissioning objectives. This initial capital consists in capitalization of mining operating costs.
Table 21.8: Pre-Production Mining OPEX
Activity Cost (k CAD)

Mine Operations 625
Mine Geology 283
Mine Maintenance Admin. 1,759
Mine Engineering 468
Drilling 494
Pre-Split Drilling and Blasting -
Blasting 1,518
Loading 354
Hauling 1,352
Dewatering 557
Dump Maintenance 581
Road Maintenance 880
Grade Control 48
Support Equipment 653
Electrical Cable Handling 130
Topo Drilling Contract -
Overburden Mining Contract -
Aggregate Plant 29
Sub-Total In-Situ Mining 9,731
Rehandling -
Total Mining Cost 9,731
21.3.1.2 Mining Equipment
An equipment requirement was estimated to achieve the life of mine production schedule based on
achievable equipment productivities comparable to similar operations. From this equipment requirement, a
purchase schedule was established along with a replacement schedule based on expected equipment life.
The cost of equipment is based on quotes obtained from vendors.
An initial purchase of mining equipment of CAD 87.7 M is required which excludes CAD 7.09 M of remaining
payments for already purchased equipment. A major portion (2/3) of this initial investment is for the 240 t haul
trucks (CAD 35 M).

Table 21.9: Equipment Capital Investment

Sustaining Total
Equipment Capital Schedule Initial Capital
Capital Capital
Major Equipment
Electric Prod Drill - 56,186 56,186
Electric Hydraulic Shovel (24 m³) - 10,312 10,312
Diesel Hydraulic Shovel (24 m³) - - -
Diesel Hydraulic Shovel (22 m³) - - -
Wheel Loader (20 m³) 6,534 6,534 13,068
Mining Truck (240 t) K 58,439 105,190 163,628
Track Dozer (899 HP) 2,529 17,706 20,236
Track Dozer (600 HP) 3,012 9,035 12,047
Motor Grader 18 ft 2,722 5,445 8,167
Wheel Dozer 500 HP - 6,059 6,059
Water/Sand Truck 3,835 - 3,835
Support Equipment
Excavator (49t) 628 3,142 3,771
Hydraulic Hammers for Excavator 49t 77 619 696
Wheel Loader 350HP 738 2,951 3,688
Wheel Loader 200HP 493 2,957 3,450
Snow Blower 155 620 775
Snow Plow (Blade) for IT Loader 45 - 45
Small Water Truck 250 750 1,000
Small Sand Truck 250 750 1,000
Pick-up Truck 270 4,320 4,590
6kW - 4 Lamps Light Tower 41 206 247
Lowboy & Tractor (150t or 181t) 3,726 - 3,726
Boom Truck 28t 232 696 928
Service Truck (Platform) 155 464 619
Mechanical Service Truck 322 644 966
Fuel Truck 300 300 600
Lube Truck 300 300 600
IT Loader (Toolcarrier) 513 513 1,026
Mobile Air Compressor - 206 206
Mobile Welding Machine - 77 77
Mobile Genset - 103 103
5T Lift Truck - 64 64
Tire Manipulator - - -
Skidsteer 96HP - 521 521
Cable Handling Equipment - 959 959
Manlift 60ft - 515 515
Vertical Man Lift 26' - 361 361
Scissor Lift 35' RT - 619 619
Spare Box for Haul Trucks - - -
Spare Bucket for Shovels - - -
Dewatering
Long Hole Dewatering - 15,463 15,463
In-Pit Dewatering - 2,100 2,100
Other
Specialized Software 668 - 668
FMS - Communication Network 451 - 451
Dispatch Licences and install services 1,016 - 1,016
Summary
Total Mine Equipment CAPEX 87,702 - 87,702
Total Mine Equipment Sustaining Capital - 256,686 256,686
TOTAL CAPEX 87,702 256,686 344,388

Table 21.10: Equipment Purchase Schedule

2021- 2026- 2031- 2036- 2041-
Equipment Purchase Schedule Total 2018 2019 2020
2025 2030 2035 2040 2045
Electric Prod Drill 7 - 1 - 1 3 - 2 -
Electric Hydraulic Shovel (24 m³) 1 - - - - - - 1 -
Diesel Hydraulic Shovel (24 m³) - - - - - - - - -
Diesel Hydraulic Shovel (22 m³) - - - - - - - - -
Wheel Loader (20 m³) 2 1 - - - 1 - - -
Mining Truck (240t) K 28 10 1 1 - 2 14 - -
Track Dozer (899HP) 8 2 - - 2 - 2 2 -
Track Dozer (600HP) 8 2 - - 2 - 2 2 -
Motor Grader 18ft 6 2 - - - 2 - 2 -
Wheel Dozer 500HP 4 - 1 - - 1 1 1 -
Water/Sand Truck 1 1 - - - - - - -
Excavator (49t) 6 1 - - 1 2 1 1 -
Hydraulic Hammers for Excavator 49t 9 1 - - 2 2 1 2 1
Wheel Loader 350HP 5 1 - - 1 1 - 1 1
Wheel Loader 200HP 7 1 - - 1 2 1 1 1
Snow Blower 5 1 - - 1 1 - 1 1
Snow Plow (Blade) for IT Loader 1 1 - - - - - - -
Small Water Truck 4 1 - - 1 - 1 1 -
Small Sand Truck 4 1 - - 1 - 1 1 -
Pick-up Truck 102 6 - 10 22 16 16 26 6
6kW - 4 Lamps Light Tower 24 4 - - 8 4 4 4 -
Lowboy & Tractor (150t ) 1 1 - - - - - - -
Boom Truck 28t 4 1 - - 1 - 1 1 -
Service Truck (Platform) 4 1 - - 1 - 1 1 -
Mechanical Service Truck 3 1 - - - 1 1 - -
Fuel Truck 2 1 - - - 1 - - -

2021- 2026- 2031- 2036- 2041-

Equipment Purchase Schedule Total 2018 2019 2020
2025 2030 2035 2040 2045
Lube Truck 2 1 - - - 1 - - -
IT Loader (Toolcarrier) 2 1 - - - - 1 - -
Mobile Air Compressor 8 - - - 2 2 2 2 -
Mobile Welding Machine 4 - - - - 4 - - -
Mobile Genset 16 - - 2 2 4 4 2 2
5T Lift Truck 1 - - - 1 - - - -
Tire Manipulator - - - - - - - - -
Skidsteer 96HP 8 - 1 - 2 1 2 2 -
Cable Handling Equipment 1 - - 1 - - - - -
Manlift 60ft 4 - 1 - - 1 1 1 -
Vertical Man Lift 26' 4 - 1 - - 1 1 1 -
Scissor Lift 35' RT 4 - 1 - - 1 1 1 -
Spare Box for Haul Trucks 1 1 - - - - - - -
Spare Bucket for Shovels - - - - - - - - -
Long Hole Dewatering 240 - 40 - 40 40 80 40 -
In-Pit Dewatering 28 - 8 - - 6 6 6 2
Specialized Software 4 4 - - - - - - -
FMS - Communication Network 1 1 - - - - - - -
Dispatch Licences and install services 1 1 - - - - - - -

Table 21.11: Equipment Capital Expenditure Schedule
2021- 2026- 2031- 2036- 2041-

Equipment Capital Schedule (k CAD) Total 2018 2019 2020
2025 2030 2035 2040 2045
Major Equipment 293,537 79,601 15,385 5,844 16,097 46,538 91,400 38,672 -
Support Equipment 50,851 10,631 3,616 1,422 6,964 8,594 9,867 7,862 1,896
Total Equipment CAPEX 344,388 90,232 19,001 7,266 23,061 55,132 101,267 46,534 1,896
Initial CAPEX 87,702 87,702 - - - - - - -
Sustaining CAPEX 256,686 2,529 19,001 7,266 23,061 55,132 101,267 46,534 1,896
Note: Initial CAPEX excludes remaining payments for already purchased equipment (CAD 7,087 k)
21.3.1.1 Mine Road Construction, Mine Electrical Work and Dewatering Infrastructures for the East Pit
The total CAPEX for other work to be performed throughout the life of mine is presented in Table 21.12. It totals CAD 30.2 M for the project life which
corresponds to CAD 0.04/t.
Table 21.12: Other Work Capital Expenditure Schedule
2021- 2026- 2031- 2036- 2041-

Other Work Capital Schedule (k CAD) Total 2018 2019 2020
2025 2030 2035 2040 2045
Mining Road Construction 10,368 1,212 3,637 970 1,941 - 2,607 - -

Mine Electrical Work 4,678 - 2,312 - - - 2,366 - -
Dewatering Infra.- East Pit 15,161 - - - 4,658 7,580 2,922 - -
Total CAPEX 30,206 1,212 5,949 970 6,599 7,580 7,895 - -
Initial CAPEX 1,212 1,212 - - - - - - -
Sustaining CAPEX 28,994 - 5,949 970 6,599 7,580 7,895 - -

Operating Costs
Basis of Estimate
The operating cost for the project has been estimated at a feasibility study level with an accuracy of ±15%.
The following basic data pertains to the estimate:
• The estimate base date is fourth quarter of 2018.
• The estimate is expressed in Canadian dollars (CAD).
• No allowance has been made in the estimate for escalation from the base date, growth or changes in
currency exchange rates.
• All import duties and taxes are excluded from the estimate (and are not expected to apply as all
consumable and reagent pricing is FOB).
• No estimate contingency has been considered.
Exchange Rates
Table 21.13 shows the long-term exchange rates used to develop the operating cost estimate.
Table 21.13: Exchange Rates
CAD Exchange Rate
CAD 1 AUD 0.9885

CAD 1 USD 1.2886
CAD 1 EUR 1.4986
CAD 1 CAD 1.000
CAD 1 RAND 0.0913
Operating Costs Summary
Project operating costs have been divided into five major cost centres:
• Mining operating costs were estimated by GMS
• Processing plant operating costs were estimated by Ausenco with data from Tacora

• Concentrate transportation & handling costs were estimated from a contract agreement with
service providers
• Water and tailings management and operations costs were estimated by Ausenco with data
from Tacora
• Site support (G&A) costs were estimated by Ausenco with data from Tacora
A summary of the average operating cost over the life of mine is shown in Table 21.14.

Description CAD/t CAD/dmt
% of Costs
processed concentrate
Mining 5.06 14.50 31.4%
Processing plant 4.22 12.08 26.2%
Water & tailings operations 0.30 0.85 1.9%
General & administration and other 0.84 2.42 5.2%
Cash Cost FOB Mine 10.42 29.85 64.7%
Concentrate transportation & handling * 5.70 16.32 35.3%
Cash Cost FOB Pointe Noire 16.12 46.17 100.0%
Royalties 2.11 6.05
USD-Equivalent Cash Cost FOB Pointe Noire 14.15 40.52
including Royalties
* Includes price adjustments which are function of iron ore prices
Operating costs vary with time according to the total material mined, the concentrator throughput and the
concentrate output, which are all provided in the production schedule, in Section 16. A summary of the
variation in operating cost per tonne of concentrate produced during the project life is shown in Figure 21.1.
It is important to note, the first period is the operating cost for the two last months of 2018, the period 2 to 5
represented the four quarters of 2019 and the period 6 to 30 represent annual operating cost from 2020 to
2044.

Figure 21.1: Operating Costs over the Project Life

Average operating costs have been separated into various cost components. Figure 21.2 presents the
relative weight of each cost component. It can be observed that there are five major costs for this project:
• Maintenance costs
• Energy costs, including fuel and electricity
• Labour costs
• Reagents, consumables including wear parts and explosives
• Concentrate transportation & handling.
Figure 21.2: Weight of Average Operating Costs by Component

The top five cost drivers for the operating cost estimate are as follows:
1. Concentrate transportation & handling costs (34.83% of total operating costs). This is by far the largest
operating cost incurred by the project.
2. Labour costs (18.01% of total operating costs). This includes all operations and maintenance
personnel.
3. Maintenance materials cost (16.48% of operating costs) which includes maintenance parts.
4. Beneficiation plant energy consumption, including electricity, bunker C and fuel (16.34% of operating
costs).
5. Reagents, consumables including wear parts and explosives (14.02% of total operating costs).
Exclusions
The operating costs exclude:
• Escalation or exchange rate fluctuations
• Exploration costs
• Contingency
• Import duty and taxes (not expected)
• First fill reagents and consumables (in capital cost estimate)
• Sustaining capital (in economic model cash flow)
• Interest and financing charges (assumed 100% equity basis)
Table 21.15 presents the operating cost summary by year for all areas of the project. All areas will be detailed
in this chapter.


Mine Operating Costs
The mine operating costs are estimated from first principles for all mine activities. Equipment hours required
to meet the LOM plan are based on productivity factors or equipment simulations. The delivered fuel price to
site used in estimating mining costs is CAD 0.70/L. The mine wage scale established for the project has
operators making between CAD 47.90/h and CAD 54.36/h, including benefits and bonus allowances. The
major equipment hourly operating costs are presented in Table 21.6 exclusive of operating labour.
Table 21.16: Major Equipment Hourly Operating Cost
Maint. Fuel Elect. Parts &

Machines Hourly Cost (CAD/h) Lube GET Tires Total
Labour Repairs
Electric Prod Drill 36.86 - 11.50 165.22 5.50 8.54 - 227.62

Electric Hydraulic Shovel (24 m³) 33.91 - 34.36 308.33 3.74 178.35 - 558.69
Diesel Hydraulic Shovel (24 m³) 39.31 195.92 - 298.34 18.00 178.35 - 729.92
Diesel Hydraulic Shovel (22 m³) 35.38 145.77 - 270.16 10.46 10.46 - 472.24
Wheel Loader (20 m³) 18.67 98.06 - 211.75 11.81 42.24 90.50 473.03
Mining Truck (240t) K 20.15 138.43 - 127.27 4.36 8.40 42.00 340.60
Track Dozer (899HP) 19.16 69.89 - 158.90 3.50 19.76 - 271.22
Track Dozer (600HP) 15.23 47.43 - 107.60 2.42 16.39 - 189.07
Motor Grader 18ft 16.71 25.44 - 34.69 2.16 14.68 11.07 104.75
Water/Sand Truck 9.83 90.70 - 68.04 9.36 - 36.59 214.52
Wheel Dozer 500HP 12.78 35.49 - 83.22 3.19 10.12 15.40 160.21
For the major mining equipment, the parts and repair costs are based on a life cycle costing strategy.
The average mining cost during operations is estimated at CAD 2.71/t mined, including re-handling costs.
The mining costs are higher during start-up or pre-production with an average of CAD 3.77/t mined as this
includes training and mine operational readiness costs. The average mining cost during the early years of
operations is below average and increases, due to increased haulage distances and pit deepening in the
later years. This operating cost estimate includes capital repairs, which are not treated as sustaining capital.
Haulage is the major mining cost activity, representing 33% of total costs, followed by blasting (18%), and
loading (10%). Loading and haulage for stockpile re-handling is also captured as a separate activity.
Salaries and maintenance parts are the dominant cost by element representing 26% each of total costs,
followed by fuel (17%) and bulk explosives (14%).

Table 21.17: Mine Operating Cost Summary by Activity
Cost Cost Cost

Total Cost % of
Activity (CAD/t (CAD/t (CAD/t
(k CAD) OPEX
mined) milled) con dmt)
Mine Operations 52,962 0.06 0.12 0.34 2%
Mine Maintenance Admin. 126,051 0.15 0.28 0.81 6%
Mine Geology 25,197 0.03 0.06 0.16 1%
Mine Engineering 47,452 0.06 0.11 0.31 2%
Grade Control 7,624 0.01 0.02 0.05 0%
Electrical Cable Handling 18,535 0.02 0.04 0.12 1%
Drilling 166,061 0.20 0.37 1.07 7%
Blasting 395,482 0.48 0.89 2.55 18%
Pre-Split Drilling and Blasting - - - - -
Loading 211,424 0.25 0.48 1.36 9%
Hauling 745,285 0.90 1.68 4.81 33%
Dump Maintenance 172,460 0.21 0.39 1.11 8%
Road Maintenance 130,741 0.16 0.29 0.84 6%
Dewatering 26,681 0.03 0.06 0.17 1%
Support Equipment 98,462 0.12 0.22 0.64 4%
Aggregate Plant 5,683 0.01 0.01 0.04 0%
Sub-Total In-Situ Mining 2,230,098 2.68 5.01 14.36 99%
Rehandling 25,937 0.03 0.06 0.17 1%
Total Mining Cost 2,256,034 2.71 5.08 14.56 100%
Total Mining Cost (Pre-Prod) 9,731 3.77 0.00 0.06 0%
Total Mining Cost (Operations) 2,246,303 2.71 5.06 14.50 100%
*CAD 0.53/t rehandled

Table 21.18: Mine Operating Costs Detail by Period
2021- 2026- 2031- 2036- 2041-

Mining Activities (M CAD) Total 2018 2019 2020
2025 2030 2035 2040 2045
Mine Operations 53.0 1.0 2.2 2.1 10.0 9.9 10.0 9.9 7.9
Mine Geology 25.2 0.5 1.0 1.0 4.8 4.8 4.8 4.8 3.8
Mine Maintenance Admin. 126.1 2.9 5.4 5.0 23.7 23.2 24.1 23.7 18.0
Mine Engineering 47.5 0.8 1.8 1.8 9.0 9.0 9.0 9.0 7.2
Drilling 166.1 1.0 5.5 6.2 33.3 30.4 34.7 32.4 22.6
Pre-Split Drilling and Blasting - - - - - - - - -
Blasting 395.5 2.9 14.8 15.8 77.9 74.2 78.2 77.3 54.5
Loading 211.4 0.7 7.8 11.4 47.8 38.6 40.0 36.5 28.7
Hauling 745.3 2.7 13.4 24.0 122.8 139.8 163.3 156.4 123.0
Dewatering 26.7 0.8 1.5 1.5 4.6 4.4 4.4 4.4 5.2
Dump Maintenance 172.5 1.1 5.1 6.8 33.3 32.8 34.2 32.9 26.3
Road Maintenance 130.7 1.6 4.4 4.9 24.2 25.2 24.4 25.3 20.8
Grade Control 7.6 0.1 0.3 0.3 1.4 1.4 1.4 1.4 1.2
Support Equipment 98.5 1.2 3.6 3.7 18.7 18.7 18.7 18.9 14.9
Electrical Cable Handling 18.5 0.2 0.7 0.7 3.5 3.5 3.5 3.5 2.8
Topo Drilling Contract - - - - - - - - -
Overburden Mining Contract - - - - - - - - -
Aggregate Plant 5.7 0.0 0.1 0.2 1.0 1.0 1.1 1.1 0.9
Sub-Total In-Situ Mining 2,230.1 17.6 67.6 85.1 416.1 416.7 451.7 437.5 337.7
Rehandling 25.9 - 1.6 - 8.0 8.2 2.2 3.3 2.7
Total Mining Cost 2,256.0 17.6 69.2 85.1 424.1 424.9 453.9 440.8 340.4
Total Mining Cost (Pre-Prod) 9.7 9.7 - - - - - - -
Total Mining Cost (Operations) 2,246.3 7.8 69.2 85.1 424.1 424.9 453.9 440.8 340.4

Crushing and Processing Operating Cost Estimates
21.4.6.1 Basis of Estimate
Both crushing and processing plants operating costs were estimated based on:
• Tacora’s recommendations for labour rates, fuel costs, electricity and miscellaneous expenses,
reviewed against Ausenco’s database for reasonableness;
• Electrical, reagent and consumable consumptions
• Process design criteria provided by Tacora
• Mine production schedule provided by GMS
21.4.6.2 Inclusions
The crushing and processing operating cost estimate includes:
• Labour for supervision, management and reporting of on-site organizational and technical activities
directly associated with the crushing and processing plants
• Labour for operating and maintaining crushing and processing plants
• Auxiliary labour costs
• Fuel, reagents, consumables and maintenance materials for crushing and processing plants
• Electrical power consumption
• Bunker C for dryers and boilers
• Laboratory operations
• External consultants/contractors
21.4.6.3 Summary
Table 21.19 provides the average cost per tonne of concentrate per production period for crushing and
processing. Processing costs include power, reagents, consumables, fuel, maintenance spares, as well as
labour.

Table 21.19: Average Crushing and Processing Operating Cost Summary (Life of Mine)
Description Production Period Average
CAD/t ore CAD/t dry

concentrate
Power ; Electrical cost 0.70 2.02
Bunker C (for dryers and steam generation) 0.77 2.21
Fuel 0.01 0.02
Power Total 1.48 4.25
Labour ; Management, project team, service labour 0.25 0.71
Operation 0.56 1.61
Maintenance 0.41 1.18
Labour total 1.22 3.50
Consumables, reagents and maintenance materials 1.30 3.74
Building maintenance 0.06 0.16
Auxiliary fleet (operation and maintenance) 0.15 0.43
Total Processing Plant Operating Costs 4.21 12.08
Cost concentrate shipped 5.15 14.75
Railcar maintenance 0.03 0.07
Total Processing Plant Operating Costs - Including 9.39 26.90

transportation & handling
*Laboratory cost include in labour and consumables reagent and maintenance materials cost
**Numbers may not add due to rounding
21.4.6.4 Power
Power costs were calculated using the grid power rate based on NALCOR rates as per current published
rates. The firm rate cost is CAD 0.025078/kWh and the development Energy Charges per kWh is CAD 1.68.
Power was calculated based on the previous power consumption with an estimated Scully demand forecast
at 49 MW. When operating at full capacity, the total power cost is around 11 million by year and the total
demand cost around CAD 1 M for an annual cost of CAD 12 M. No additional power is necessary for the
restart of the operation. The new equipment, especially the Mn reduction lines are not expected to consume
more electricity than the removed equipment (principally the high tension circuit).

21.4.6.5 Reagents, Consumables and Maintenance Materials
Crushing and processing plant reagent and consumable costs were estimated based on the previous
operating cost. The costs were based on calculated consumption rates and unit costs supplied by vendors,
or pro-rated based on historical consumptions. Reagent and consumable costs include transport to site.
Annual maintenance costs include consumables, lubricants and wear parts, but exclude labour, were
separated in labour cost line.
Other consumables and wear parts costs were estimated based on the previous plant operation data. Drying
and train loading consumables and wear parts costs were adjusted to account for the increased concentrate
production.
21.4.6.6 Labour
Salaries for the hourly employees are based on the new collective agreement.
The rosters and salaries were benchmarked against similar operations, and include fringe benefits and
inconvenience bonuses. Fringe benefits were established at 13% for all employees and vacation at 8% by
year. Production bonus is fixed at 15%, for all the positions.
Labour auxiliary costs were estimated as a separate item, based on the labour roster. The auxiliary costs
include a yearly allowance per employee for general consumables and health and safety equipment.
Operating materials, office supplies and employee training and induction programs were estimated as a
percentage of yearly labour costs.
21.4.6.7 Bunker C
Because all the concentrate produced is dried in three dryers, the bunker C consumption is the major energy
cost, higher than electricity. A bunker C cost at CAD 0.51/L delivered to site was considered. The
consumption is based on historical drying requirements estimated at 176,000 Btu/tonne. For a production of
6.1 Mtpy of concentrate a total of 27 M liters is necessary, including what is required for steam generation.
The cost is CAD 2.21/t of concentrate produced.
With the investments planned to rebuild dryer no.2, reduction in air infiltration is expected. Consumption of
Bunker C will probably be reduced. This reduction was not considered in this OPEX estimation.

21.4.6.8 Building Maintenance
Annual process plant building maintenance was established, using the maintenance costs from the previous
years of operation and is established at 5% of the cost for Plant Repair & Maintenance.
21.4.6.9 Laboratory Services
Operating costs of the on-site laboratory were estimated based on the cost of the previous years of operation.
All costs included labours, consumables, reagents and maintenance of the laboratory. This cost is included
in the process plant costs.
Tailings and Surface Water Management
The opex includes the operating costs, required each year, during the mine operation. A summary table of
opex costs for the tailings, water management and operation is presented at the end of the section (Table
21.8). Only the cycloning operation from the coarse tailings is included in this estimate. The cost for dyke
building is included in the sustaining CAPEX costs.
21.4.7.1 Work force
This section includes operators and maintenance labour for the operation of the tailings pond area. This
includes the pumping stations, the pipeline and the dyke inspection. The cost for the first pumping station at
the process plant and the tailings thickener are not included in this section.
21.4.7.2 Equipment, material and maintenance cost
All equipment, parts, pumps, valves, pipes are included in this section. The replacement cost of each
equipment and part and the cost of maintenance are included in this section. The pumping station stages are
included in this section. The estimating cost, come from the previous operating cost center for tailings 34000.
21.4.7.3 Energy cost
The energy consumption of the booster stations is based on a mill availability of 92% and is the major energy
consumption of this section.

21.4.7.4 Cycloning operation
During the life of the mine, a total of 21 Mt of coarse tailing will be necessary for building the dam and for
material backfill. The tailings from the process plant will be cycloned during the summer time, each year, to
prepare this material (coarse tailings). The fines discharged by the overflow will go to the tailings pond and
the coarse materiel will be stockpiled close to the dam. The cost for cycloning is estimated CAD 0.25/t of
coarse material stockpiled.
21.4.7.5 Dust Emissions Mitigation Measures, Progressive Restoration and Instrumentation
Dust emission mitigation measures and progressive restoration will be required throughout the operational
life of the site.
Operating costs for dust monitoring and control include the application of dust emission suppressor on
exposed areas of the tailings storage facility for the first five years. Progressive revegetation efforts will spread
over a reasonable time period until the end of the mining operation.
Table 21.20: Tailings and Surface Water Management OPEX (in CAD, without Contingency)
Years 2020 to
Total 2018 2019
Activity 2044
Workforce 14,632 92 559 559
Equipment and material 45,343 286 1,733 1,734
Energy cost 28,933 182 1,105 1,105
Maintenance cost 34,382 217 1,314 1,314
Cycloning operation 6,498 0 168 253
Dust emission mitigation measures &
2,600 0 100 100
progressive restoration
Total OPEX Costs (k CAD) 132,389 777 4,979 5,065
General (G&A) Operating Costs Estimate
21.4.8.1 Estimating Method
Operating cost estimates were prepared by Ausenco in collaboration with Tacora and are based on historical
data. The estimate for on-site G&A was broken down into the following categories:
• Automobile Expense
• Computer and Internet Expenses

• Employee Education & Training
• Insurance Expense
• Lease and Options Expense
• License & Fees
• Meals and Entertainment
• Office Supplies
• Permit fees
• Technical Work Expense
• Office Rent Expense
• Travel
• Contract Services
The corporate expense is included in this section, all data comes from Tacora’s management. It breaks down
into the following categories:
• Management Services - Director Fees
• Management G&A
• Marketing - International
• Marketing - Domestic
• Automobile Expense
• Bank Service Charges/LOC Fees
• Computer and Internet Expenses
• Dues & Subscriptions
• Employee Education & Training
• Insurance Expense
• Charitable Contribution
• Lease and Options Expense
• Copier Lease
• Contracted Services

• License & Fees
• Meals and Entertainment
• Office Supplies
• Permit fees
• Audit and Tax Work Expense
• Professional Fees
• Property tax
• Office Rent Expense
• Telephone Expense
• Travel
• Utilities
• General Overhead
21.4.8.2 Summary
The G&A costs include support to operations, G&A personnel, health, safety and environmental programs as
well as miscellaneous project costs. An average annual G&A operating cost of CAD 11.6 M was estimated.
Costs are summarized by category in Table 21.21.

Table 21.21: Site Support (G&A) and Corporate Operating Cost Summary

Item CAD /t dry
CAD /t Ore
Concentrate
G&A Site
Automobile Expense 0.008 0.024
Computer and Internet Expenses 0.001 0.002
Employee Education & Training 0.013 0.036
Insurance Expense 0.038 0.110
Lease and Options Expense 0.091 0.259
License & Fees 0.001 0.004
Meals and Entertainment 0.001 0.004
Office Supplies 0.004 0.012
Permit fees 0.004 0.011
Technical Work Expense 0.001 0.002
Office Rent Expense 0.013 0.036
Travel 0.001 0.002
Contract Services 0.014 0.041
Total G&A site 0.19 0.55
Corporate
Total Employee Related Expenses 0.32 0.91
Total Cost Other Expenses 0.17 0.50
Total Corporate 0.49 1.41
Total general G&A (site support G&A and Corporate) 0.68 1.96
The majority of G&A costs are based on costs being incurred by Tacora currently or during the previous
year’s operations, as well as supplier proposals. The following sections describe the build-up of operating
costs in the site support (G&A) area.
Concentrate Transportation
Costs for concentrate transportation were established by Tacora based on a contract with the rail transport
providers. The cost of concentrate transportation is variable according to the wet tonnage of concentrate
produced and does not consider transport and handling losses. Tacora has executed a rail contract with
Quebec North Shore & Labrador (QNS&L).
An additional operating cost for the railcar maintenance was added to this transport cost. The cost of railcar
maintenance was established at CAD 1,305 per car annually.

Port Facilities
Costs for port services were developed by Tacora based on negotiations with SFPPN and the Port of Sept
Iles. The cost of port services is variable, according to the wet tonnage of concentrate produced and does
not consider handling losses.
The average annual concentrate transportation, port and berth cost was established at CAD 14.75/t of
concentrate.

22 ECONOMIC ANALYSIS
The economic assessment of the Scully Mine is based on Q4 2017 price projections in U.S. currency and
cost estimates in Canadian currency. An exchange rate of CAD 1.2886 per USD was assumed to convert
particular components of the cost estimates and USD market price projections into CAD. No provision was
made for the effects of inflation. The evaluation was carried out on a 100%-equity basis. Current Canadian
tax regulations were applied to assess the corporate tax liabilities, while the terms of the Nalco-Javelin
(Mineral Lands) Act of 1957 are applied in lieu of the standard mining tax regulations of Newfoundland &
Labrador. The financial indicators under base case conditions are presented in Table 22.1.
Table 22.1: Financial Indicators Under Base Case Conditions
Base Case Financial Results Unit Value

Pre-Tax Results
NPV @ 6% M CAD 2,104
NPV @ 8% M CAD 1,640
NPV @ 10% M CAD 1,298
After-Tax Results
NPV @ 6% M CAD 1,447
NPV @ 8% M CAD 1,121
NPV @ 10% M CAD 880
A sensitivity analysis reveals that the Project’s viability will not be significantly vulnerable to variations in
capital and operating costs, within the margins of error associated with feasibility-study-level estimates.
However, the Project’s viability remains more vulnerable to the CAD/USD exchange rate and the larger
uncertainty in future iron ore market prices.
Assumptions
Macro-Economic Assumptions
The main macro-economic assumptions used in the base case are given in Table 22.2. Annual price
forecasts for both 65.9%, 65% and 62% iron ore concentrate were provided by AME Advisory. Details on the
derivation of these price forecasts are given in Section 19 of this report. The sensitivity analysis examines a
range of prices 30% above and below the base case forecast.

Table 22.2: Macro-Economic Assumptions
Item Unit Value

Iron Ore Concentrate Price (65.9% CFR China) – Year 1 USD/t 74.00
Iron Ore Concentrate Price (65% CFR China) – Year 1 USD/t 72.00
Iron Ore Concentrate Price (62% CFR China) – Year 1 USD/t 60.00
Exchange Rate (spot rate for cost estimates) CAD/USD 1.2886
Discount Rate % per year 8
Discount Rate Variants % per year 6 and 10
AME Advisory provided annual market price projections for 62%, 65% and 65.9% iron concentrate over the
first 17 years of production of the project in the form of point estimates for years 1 and 2 of production, and
high and low estimates in increments of five (5) years for year 3 onwards. The price projection chosen over
the production period (base case) consists of the AME Advisory point estimates over years 1 and 2 and the
lower values of the high and low estimates for year 3 onwards. Year 17 prices were extended over the rest
of the production period. The price projection for the first production year is USD 74 per tonne for the
65.9% Fe concentrate. An exchange rate of 1.2886 USD per CAD (USD 0.7760/CAD) was used as basis for
the purposes of developing capital and operating cost estimates and converting the USD market price
projections into Canadian currency. The sensitivity of base case financial results to variations in the exchange
rate was examined. Those cost components which include U.S. content originally converted to Canadian
currency using the original exchange rate were adjusted accordingly.
The current Canadian tax system applicable to Mineral Resource Income was used to assess the Project’s
annual tax liabilities. These consist of federal and provincial corporate taxes as well as provincial mining
taxes. The federal and provincial corporate tax rates currently applicable over the Project’s operating life are
both 15.0% of taxable income. Under the terms of the Nalco-Javelin (Mineral Lands) Act of 1957, a royalty of
CAD 0.22 per gross tonne is assessed by the province in lieu of the regular mining taxes.
The economic assessment was carried out on a 100%-equity basis. Apart from the base case discount rate
of 8.0%, two (2) variants of 6.0% and 10.0% were used to determine NPV of the Project. These discount
rates represent possible costs of equity capital.

Royalty and Impact and Benefit Agreements
This project is subject to a life of mine mineral royalty agreement. Under the terms of this agreement, a royalty
of 7% of FOB Pointe Noire net revenues (after substraction of certain deductible costs) is payable to a third
party. A reduced royalty of 4.2% is provided for certain special situations. A provision has also been made
for annual payments under an Impact and Benefit Agreement with local First Nations communities.
Technical Assumptions
The main technical assumptions used in the base case are given in Table 22.3.
Table 22.3: Technical Assumptions

Item Unit Value
Open Pit Resource Mined k tonnes 443,672
Average Head Grade at Process Plant % Fe 34.8
Design Processing Rate k tonnes/year 17,500
Average Stripping Ratio w:o 0.874
Mine Life years 26
Average Weight Recovery % 34.9
Average Concentrate Grade % Fe 65.9
Concentrate Production k tonnes 154,905
Average Mining Costs ($/tonne RoM) 5.06
Average Processing Costs ($/tonne RoM) 4.22
Average Water & Tailings Management Costs ($/tonne RoM) 0.30
Average Mine Site G&A Costs† ($/tonne RoM) 0.35
Average Corporate G&A Costs ($/tonne product) 1.41
Average Other Costs ($/tonne product) 0.46
Average Concentrate Transport & Port Costs ($/tonne product) 16.32
Average Royalty Payments ($/tonne product) 6.05
Average Total Costs ($/tonne product) 52.22
†
Includes Provision for IBA payments.
Financial Model and Results
Figure 22.1 illustrates the after-tax cash flow and cumulative cash flow profiles of the Project for base case
conditions. Note that the total height of a particular bar (i.e., after-tax cash flow plus corporate taxes and
provincial Crown royalties) represents the before-tax cash flow. The intersection of the after-tax cumulative
cash flow curve with the horizontal dashed line represents the after-tax payback period of 2.6 years.

Figure 22.1: After-Tax Cash Flow and Cumulative Cash Flow Profiles
A summary of the evaluation results is given Table 22.5 and Table 22.6. Table 22.6 gives the summary cash
flow statement, both for base case conditions.
The summary and cash flow statement indicate that the total pre-production (initial) capital costs, excluding
the working capital requirement, were evaluated at CAD 205.5 M. The total sustaining capital requirement
was evaluated at CAD 441.7 M. Mine closure costs in the form of trust fund payments at the start of mine
production were estimated at an additional CAD 41.7 M (CAD 36.7 M of this amount has already been paid;
a balance of CAD 5.0 M remains to be paid).
The cash flow statement shows a capital cost breakdown by area over the one-year pre-production period of
the Project. Working capital requirements were estimated at about 1 month of total annual operating costs.
In addition, this additional working capital is provided for the pre-payment of concentrate transport costs and
lines of credit. Since operating costs vary annually over the mine life, additional amounts of working capital
are injected or withdrawn as required.
The total revenue derived from the sale of iron ore concentrate was estimated at
CAD 13,697 M FOB Pointe Noire, representing an average of CAD 88.42/t of concentrate. The total

operating costs were estimated at CAD 8,089 M, or on average, CAD 52.22/t of concentrate. Table 22.4
presents the all-in sustaining cost breakdown.
Table 22.4: All-In Sustaining Cost Breakdown
Concentrate Unit Cost

Description CAD/dmt USD/dmt
concentrate concentrate
Exchange Rate 0.7760x
Mining 14.50 11.25
Processing plant 12.08 9.37
Water & tailings operations 0.85 0.66
General & administration and other 2.42 1.88
Cash Cost FOB Mine 29.85 23.16
Concentrate transportation & handling * 16.32 12.66
Cash Cost FOB Pointe Noire 46.17 35.83
Royalties 6.05 4.70
Ocean Freight 19.48 15.12
Total Delivered Cost 65.9% Fe 71.70 55.64
Sustaining Capex 2.85 2.21
All-In Sustaininig Cost for 65.9% Fe 74.56 57.86
Less: 65.9% Premium Received by Tacora (17.96) (13.94)
All-In Sustaining Cost Comparable to 62.0% Fe 56.59 43.92
The financial results indicate a pre-tax NPV of CAD 1,640 M at a discount rate of 8.0%. The pre-tax
Internal Rate of Return (“IRR”) is 48.7% and the payback period is 2.4 years (measured from the start of
commercial production).
The after-tax NPV is CAD 1,121 M at a discount rate of 8.0%. The after-tax IRR is 40.7% and the payback
period is 2.6 years.

Table 22.5: Project Evaluation Summary – Base Case
Item Unit Value

Total Revenue FOB M CAD 13,697.2
Total Operating Costs M CAD 8,088.7
Initial Capital Costs (excludes Working Capital) M CAD 205.5
Sustaining Capital Costs M CAD 441.7
Mine Rehabilitation Trust Fund Payments Payable M CAD 5.0
Total Pre-tax Cash Flow M CAD 4,972.0
Pre-tax NPV @ 6% M CAD 2,103.8
Pre-tax IRR % 48.7
Pre-tax Payback Period† Years 2.4
Total After-tax Cash Flow M CAD 3,466.4
After-tax NPV @ 6% M CAD 1,447.1
After-tax NPV @ 8% M CAD 1,120.6
After-tax NPV @ 10% M CAD 880.0
After-tax IRR % 40.7
After-tax Payback Period† Years 2.6
†
Measured from the start of commercial production
Note: The net present values given in the tables above are based on the mid-year convention rather than
the more common end-of-year convention. Some financial experts favour the mid-period convention for
projects in which cash flows occur more or less continuously through time, as is the case for industrial
projects. Using this convention, cash flows are assumed to occur in the middle of each year and are
discounted as such. A net present value determined in this manner is greater than that obtained using the
conventional method. The ratio of the larger value over the lesser value is simply (1+i)0.5, in which “i”
represents the annual discount rate. This relationship is exact as long as all cash flow components follow the
same convention. The internal rate of return is not affected by this issue.

Table 22.6: Summary Cash Flow Statement

SCULLY MINE RESTART PROJECT – TACORA RESOURCES INC.
All monetary values in M CAD -1 1 2 3 4 5 6 7 8 9 10 11 12 13
Revenue FOB 39.1 322.3 408.3 452.7 450.9 454.2 454.4 484.9 564.3 571.3 573.1 567.5 565.5 559.3
Mine Site Operating Expenses 23.1 172.8 201.9 202.6 215.2 205.0 206.9 207.8 221.1 215.6 212.9 210.6 217.3 213.6
Rail Transport 8.5 69.7 84.4 93.9 93.5 94.2 94.2 94.2 99.0 100.2 100.6 99.6 99.2 100.3
Adjusted EBITDA 7.5 79.8 122.0 156.2 142.1 155.0 153.3 183.0 244.1 255.4 259.7 257.3 249.0 245.5
Initial Capital Expenses 205.5 0.0

Sustaining Capital Expenses 20.9 8.0 9.3 1.3 9.6 13.8 15.4 17.4 22.0 7.7 22.8 26.2 92.7
Mine Closure Assurance Payments 5.0 0.0 0.0
Change in WC requirements 40.2 -7.2 -9.1 1.0 -0.8 0.2 -0.1 1.1 -0.4 -0.2 -0.2 0.5 -0.2 0.4
Federal Corporate Taxes 0.0 5.2 18.3 17.2 19.9 20.0 24.6 33.8 35.4 36.2 35.9 34.4 32.3
Quebec Corporate Taxes 0.0 5.2 18.3 17.2 19.9 20.0 24.6 33.8 35.4 36.2 35.9 34.4 32.3
Quebec Mining Taxes 1.0 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3
PRE-TAX CASH FLOW -246.0 66.0 123.1 145.9 141.7 145.2 139.6 166.5 227.2 233.6 252.2 234.0 223.0 152.3
AFTER-TAX CASH FLOW -246.1 65.0 111.5 108.0 105.9 104.1 98.3 115.9 158.2 161.5 178.5 160.9 153.0 86.5
15 16 17 18 19 20 21 22 23 24 25 26 Total
Revenue FOB 557.9 561.6 561.2 561.2 563.8 556.1 555.2 553.9 560.2 563.0 563.3 513.7 13,697.2
Mine Site Operating Expenses 216.7 218.5 236.1 217.5 221.5 215.5 224.5 210.6 213.7 214.3 222.0 205.3 5,561.1
Rail Transport 100.0 100.7 100.6 100.6 101.1 99.7 99.5 99.3 100.4 100.9 101.0 92.2 2,527.6
Adjusted EBITDA 241.3 242.4 224.5 243.1 241.2 241.0 231.2 244.0 246.0 247.8 240.3 216.2 5,608.5
Initial Capital Expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 205.5
Sustaining Capital Expenses 20.6 16.3 8.6 20.9 14.3 11.2 28.1 9.0 6.2 7.5 6.0 0.0 441.7
Mine Closure Assurance Payments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0
Change in WC requirements 0.2 1.5 -1.6 0.4 -0.6 0.7 -1.2 0.3 0.1 0.6 -1.8 -26.6 -3.0
Federal Corporate Taxes 31.1 31.8 29.7 32.9 32.8 33.1 31.6 33.6 34.3 34.9 34.0 32.7 736.0
Quebec Corporate Taxes 31.1 31.8 29.7 32.9 32.8 33.1 31.6 33.6 34.3 34.9 34.0 32.7 736.0
Quebec Mining Taxes 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.2 33.5
PRE-TAX CASH FLOW 220.5 224.6 217.4 221.8 227.5 229.0 204.4 234.7 239.8 239.6 236.1 255.5 4,972.0
AFTER-TAX CASH FLOW 157.0 159.7 156.6 154.7 160.6 161.6 139.8 166.3 169.9 168.5 166.7 189.0 3,466.4

Sensitivity Analysis
A sensitivity analysis has been carried out, with the base case described above as a starting point, to assess
the impact of changes in initial capital costs (“CAPEX”), operating costs (“OPEX”), product price (“PRICE”)
and the USD/CAD exchange rate (“FX RATE”) on the Project’s NPV at 8.0% and IRR. Each variable was
examined one at a time. An interval of ±30 % with increments of 10 % was used for the first three (3) variables.
An interval of -15% to +30% (slightly over par) was used for the USD/CAD exchange rate (an increase in the
USD/CAD exchange rate signifies an increase in the value of the Canadian dollar with respect to the
U.S. dollar). The U.S. content associated with the capital cost and operating cost estimates were adjusted
accordingly for each exchange rate assumption.
The before-tax results of the sensitivity analysis, as shown in Figure 22.2 and Figure 22.3, indicate that, within
the limits of accuracy of the cost estimates in this Study (±15%), the Project’s before-tax viability does not
seem significantly vulnerable to the under-estimation of capital and operating costs, taken one-at-a-time. As
seen in Figure 22.2, the NPV is more sensitive to variations in Opex than Capex, as shown by the steeper
slope of the Opex curve. As expected, the NPV is most sensitive to variations in price and the USD/CAD
exchange rate. The NPV becomes marginal at the lower limit of the price interval but remains positive at the
upper limit of the exchange rate interval examined. A break-even net present value (i.e., a NPV @ 8% equal
to zero) is achieved at a price variation of about -29%, which corresponds to CFR China concentrate prices
of USD 52.32, USD 50.90 and USD 42.42 per tonne (for 65.9%, 65% and 62% Fe concentrate, respectively)
in the first production year.
Figure 22.2: Pre-tax NPV8%: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate

Figure 22.3 shows variations in internal rate of return, and provides the same conclusions. The horizontal
dashed line represents the base case discount rate of 8%.
Figure 22.3: Pre-tax IRR: Sensitivity to Capital Expenditure, Operating Cost, Price and
USD/CAD Exchange Rate
The same conclusions can be made from the after-tax results of the sensitivity analysis as shown in
Figure 22.4 and Figure 22.5. Figure 22.4 indicates that the Project’s after-tax viability is mostly vulnerable to
a reduction in price and increase in the USD/CAD exchange rate, while being less affected by the under-
estimation of capital and operating costs. The NPV becomes slightly negative in the lower portion of the price
interval, but remains positive at the upper limit of the exchange rate interval examined. A break-even net
present value (i.e., a NPV @ 8% equal to zero) is achieved at an approximate price variation of -31%, which
corresponds to CFR China concentrate prices of USD 52.27, USD 49.88 and USD 41.57 per tonne (for
65.9%, 65% and 62% Fe concentrate, respectively) in the first production year.

Figure 22.4: After-tax NPV8%: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate
Figure 22.5 showing variations in internal rate of return, provides the same conclusions.
Figure 22.5: After-Tax IRR: Sensitivity to Capital Expenditure, Operating Cost, Price and USD/CAD
Exchange Rate
Table 22.7 presents a sensitivity at flat iron ore prices for different iron content premiums with respect to the
IODEX 62% Fe.

Table 22.7: Sensitivity Tables at Flat IODEX 62% Fe Prices

Sensitivity at Various Flat Price Cases with $14 Premium for 65% Fe (US$/dmt, 62% Fe, CFR Tianjin)
62% Quality Pre-Tax NPV (C$ M) After-Tax NPV (C$ M) IRR (%) Payback (yrs) Cash Costs
IODEX Premium 6% 8% 10% 6% 8% 10% P-T A-T P-T A-T (US$/dmt)2
45 14 196 106 40 101 34 -15 11.6% 9.3% 8.6 9.1 37.69
55 14 1,020 784 610 687 520 396 33.3% 27.6% 3.3 3.6 38.33
65 14 1,758 1,392 1,121 1,206 949 758 52.9% 43.7% 2.1 2.3 39.74
75 14 2,505 2,008 1,638 1,730 1,382 1,122 73.4% 60.0% 1.6 1.7 41.17
Feasibility Study1 2,104 1,640 1,298 1,447 1,121 880 48.7% 40.7% 2.4 2.6 40.52
Sensitivity at Various Flat Price Cases with $22 Premium for 65% Fe (US$/dmt, 62% Fe, CFR Tianjin)
62% Quality Pre-Tax NPV (C$ M) After-Tax NPV (C$ M) IRR (%) Payback (yrs) Cash Costs
IODEX Premium 6% 8% 10% 6% 8% 10% P-T A-T P-T A-T (US$/dmt)2
45 22 854 640 483 570 418 306 27.2% 22.7% 4.2 4.5 38.22
55 22 1,677 1,319 1,053 1,149 897 710 48.2% 40.0% 2.3 2.6 38.86
65 22 2,415 1,927 1,564 1,667 1,325 1,070 68.0% 55.8% 1.7 1.9 40.27
75 22 3,163 2,543 2,082 2,192 1,757 1,434 88.9% 72.4% 1.3 1.5 41.69
Feasibility Study1 2,104 1,640 1,298 1,447 1,121 880 48.7% 40.7% 2.4 2.6 40.52
(1) Based on Low Case pricing scenario
(2) Cash cost includes mining, processing, water & tailings management, mine site G&A, corp. G&A, con transport & logistics, and royalties

23 ADJACENT PROPERTIES
The Scully Mine is situated in an active iron ore mining district, as illustrated in Figure 4.1.
Quebec Iron Ore – Bloom Lake
The Bloom lake project is located 22 km west of Wabush. Consolidated Thompson Iron Mines Limited began
the construction of the mining infrastructures in 2008 and commenced mining operations in 2010 with the
phase 1 concentrator plant. As part of an expansion plan to increase the mine production, the design and
construction of a second concentrator plant was initiated to increase nominal capacity to about 15 million
tonnes of concentrate per annum.
The mine was sold to Cliffs in 2011, which continued the phase 2 construction project and conducted mining
operations until they were suspended in December 2014, due to financial distress caused also by a sharp
decrease of iron ore prices.
In January 2015, Cliffs sought creditor protection, resulting in the mine being then put on a strict care and
maintenance program, and placed into creditor protection.
In April of 2016, Québec Iron Ore Inc. (QIO), a wholly-owned subsidiary of Champion Iron Limited
(Champion) acquired the Bloom Lake assets through its subsidiary Québec Iron Ore Inc.
ArcelorMittal – Mont-Wright & Fire Lake
ArcelorMittal owns two mines in the area. The Mont-Wright Mine is 10 km south-west of Wabush, while the
Fire Lake Project is about 68 km south. Both mines have a combined production of 26 Mt of concentrate per
year.
Iron Ore Company of Canada
Approximately 20 km north of the Scully Mine is the IOC whose major shareholder is the international mining
group Rio Tinto. The mine currently has a production rate of 22 Mt of concentrate each year and its latest
open pit Wabush 3 is expected to start producing ore in the second half of 2018. Ore is sent to a concentrator
for upgrading to 65-67% iron. Upgrading takes three processes involving the spiral, magnetite and hematite
plants. Most of the concentrate is pelletized with the remainder sold as concentrate. IOC's 2016 combined
iron ore sales totalled 18.2 Mt compared to 17.9 Mt in 2015.

24 OTHER RELEVANT DATA AND INFORMATION
Project Execution Plan
Purpose
The Project Execution Plan (PEP) is issued to describe the overall strategy and organizations required for
the execution of the restart of the Scully Mine. More specifically, the PEP:
• Outlines the scope of work;
• Describes the scope of services and organizations deployed on the Project;
• Provides the execution strategy and schedule.
Summary Scope of Work and Work Breakdown Structure (WBS)
24.1.2.1 Summary Scope of Work;
The summary scope of work consists of the following elements:
Engineering Work Packages (EWP’s)

01 - Dryer Re-Built, #2
02 - Mill Gear Replacement, #6
03 - 1B Belt Magnet
04 - Fresh Water Header
05 - Mill Feed Chute
06 - Mill screen oversize and spiral feed pump
07 - Manganese Reduction
08 - Primary Crusher Rock Hammer
09 - Tails line improvement – CANCELLED
10 - Added loadout bin capacity
11 - Plant Structural Repairs
12 - Dryer PLC Update
13 - Electrical Refurbishment
14 - New Instrumentation
15 - Rod Deck Conversion
16 - Plant PLC Upgrade
17 - Railcars and Tripack
18 - Rail Track
19 - Mining

24.1.2.2 Scully Mine Areas
The following table lists the existing areas at the Scully Mine.
Table 24.1 – Existing Areas at the Scully Mine
Area # and Description

00 – General / Unassigned
01 - Site Preparation and Plant Layout
02 - Jean River Crossing
03 - Temporary Construction Facilities
04 - Yard Piping: Water Supply
05 - Roads and Railways
06 - Tailings Disposal
07 - Electrical Distribution
08 - Boiler Room
09 - Switch Room and Switch Yard
10 - Water Pump House
11 - Maintenance Shops and Warehouse
12 - Administration Building
13 - Crusher Building
14 - Ore Conveyors
15 - Ore Storage
16 - Mill Building
17 - Dryer Building
18 - Concentrate Conveyors
19 - Loadout Bin
20 - Thickeners
21 - Classifier Building
22 - Truck Storage
23 - Mobile Equipment
24 - Mine Infrastructure
Execution Strategy
24.1.3.1 Overview
The execution strategy of the restart of the Scully Mine consists of a self-managed execution with a
combination of lump sum contracts. Tacora’s self-performed organization will be an integrated team of
Tacora’s managers, staff, manual labour and operators supplemented with outside resources.

This strategy is based on the following considerations:
• The fast track nature of the project in that it is the Client’s desire for the Scully Mine facilities to be
fully operational by the Fall of 2018;
• Brownfield environment, where construction and operations activities will coexist;
• The scope of work will only require a light project structure;
• Limited staffing of the Tacora team during the execution phase.
The Self-Performed strategy will minimize total project cost and will optimize utilization of current and new-
hire Tacora personnel, providing a seamless transition from construction to operation.
The following provides an overview of the execution strategy for the three major areas, i.e. process plant and
mine.
• Process Plant: lump sum contracts for the majority of the EWP’s will be managed directly by Tacora’s
site management team.
• Mine: scope pertaining to the mine, i.e. mine’s pre-production and mine development, complete with
mining equipment, will be executed by Tacora operators, either current or new hire.
24.1.3.2 Project Phases
24.1.3.2.1 Pre-execution Phase
It is anticipated that a bridge phase be implemented so that Engineering can be developed to a level sufficient
packages. That said, some RFI’s can be issued to procurement in the early stages of the execution phase.
During this pre-execution phase, the schedule prepared during the Feasibility Study Phase will be further
developed so as to define the baseline schedule; the estimate prepared during the Feasibility Study will serve
as the basis for the control budget. Risk mitigation plans as well as post mitigation risk reserve to be managed
by TACORA will be assessed.
The bridge phase shall cover the period between the draft issue of this Feasibility Study and the approval of
this FS by Tacora’s Board of Directors scheduled for January 2018.

24.1.3.2.2 Execution Phase
The execution of the Scully Mine re-start project will commence upon sanction by Tacora’s
Board of Directors.
24.1.3.3 Project Organization
24.1.3.3.1 Overview
The self-performing execution strategy is dictated in consideration of Tacora’s objectives of optimizing the
project cost by reducing overhead inherent to standard outsourced execution platforms. It’s also a result of
the small scope of work. It enables expeditious team formation by eliminating the process of formal requests
for proposal of EPCM services. Outside resources can supplement Tacora’s self-performed team through
loans of personal, forming an integrated team.
The role of Tacora’s self-performed / integrated team will be to develop and implement procedures,
processes, systems and associated tools to manage engineering, procurement, construction, pre-operational
verification and commissioning of the Scully Mine re-start project.
With the exception of the lump sum contracts, the self-performed approach entails Tacora to manage all other
project risks. It should be notes that any risk to be borne by lump sum contractors will inevitably be converted
as project costs to Tacora, whether or not risks actually materialize.
24.1.3.4 Packaging Strategy
For the purposes of the execution of Tacora Scully Mine re-start project, the packages will generally be
aligned with EWP’s:
Table 24.2: Packaging Strategy

Package Description T&C Type Pricing Source
Lump sum package: supply Bidding process, 3 bids
T01 - Dryer Re-Built, #2
and install minimum
T02 - Mill Gear Replacement, #6
and install minimum
T03 - 1B Belt Magnet
and install minimum
T04 - Fresh Water Header
and install minimum
T05 - Mill Feed Chute
and install minimum

Package Description T&C Type Pricing Source

Lump sum package: Bidding process, 3 bids
T06 - Mill screen oversize and spiral feed pump
installation only minimum
Purchase Order: pump Bidding process, 3 bids
P01 – Pump for mill screen oversize and spiral feed
supply minimum
T07 - Manganese Reduction
and install minimum
T08 - Primary Crusher Rock Hammer
Purchase Order: rock Bidding process, 3 bids
P02 - Rock Breaker
breaker supply minimum
09 - Tails line improvement – CANCELLED N/A N/A
T10 - Added loadout bin capacity: demolition, earthworks Lump sum package: supply Bidding process, 3 bids
and concrete and installation minimum
C10 - Added loadout bin capacity: steel, mechanical, Bidding process, 3 bids
Cost plus contract: install only
electrical and instrumentation minimum
P10A - Platework for loadout silos and including stairs, Purchase order: material for Bidding process, 3 bids
platforms, nozzles, access hatch, guard rails, etc. silo minimum
Purchase order: conveyor Bidding process, 3 bids
P10B - Material for conveyor extension
extension minimum
Purchase order: dust Bidding process, 3 bids
P10C - Dust collection
collection minimum
Purchase order: hydraulic Bidding process, 3 bids
P10D - Hydraulic gates
gates minimum
Multiple purchase orders: Bidding process, 3 bids
P10E - Other materials for silo
material for silo minimum
Unit rates contract: supply Bidding process, 3 bids
C11 - Plant Structural Repairs
and install minimum
Bidding process, 3 bids
C12 - Dryer PLC Update Cost plus contract: install only
minimum
Purchase order: PLC Bidding process, 3 bids
P12 - PLC equipment (includes material for EWP 16)
equipment supply minimum
C13 - Electrical Refurbishment Cost plus contract: install only
minimum
P13A - Electrical equipment (includes requirements for Multiple purchase orders: Bidding process, 3 bids
other EWP’s) electrical equipment minimum
P13B - Electrical bulk (includes requirements for other Multiple purchase orders: Bidding process, 3 bids
EWP’s) electrical bulk minimum
C14 - New Instrumentation Cost plus contract: install only
minimum
Multiple purchase orders: Bidding process, 3 bids
P14 - New Instrumentation
instruments minimum
Purchase Order: rod deck Bidding process, 3 bids
P15 - Rod Deck Conversion
venturi minimum
T15 - Rod Deck Conversion
C16 - Plant PLC Upgrade Cost plus contract: install only
minimum
P17 - Railcars and Tripack Purchase Order
minimum
Cost plus contract: supply Bidding process, 3 bids
C18 - Rail Track
and install minimum
Multiple purchase orders for Bidding process, 3 bids
P19A – Mining, major equipment
mining equipment minimum
P19B – Mining, support equipment
P19C – Mining equipment, others
Self perform for mine roads
S19 – Pre-production mining and overall mine work N/A
and pre-production mining

It should be noted that some equipment and materials are already in Tacora’s possession and will be used
for the execution. Tacora will identify equipment and materials available upon detailed definition of the actual
requirements.
For all types of packages, protocols for the calculations of cost variations resulting from scope changes
(addition and subtraction) will be developed in order to ease any contractual dispute and limit claims.
Services Rendered by Tacora PM Team
24.1.4.1 Detailed Engineering and Procurement
Early in the detailed engineering phase and on the basis that the bridge phase is adopted by Tacora,
Engineering will issue RFI’s for critical equipment and materials as well as for lump sum packages to be
processed by procurement so that Requests for Quotation (RFQ’s) can be issued shortly thereafter.
To meet the project schedule early, partial commitments to vendors will be necessary to obtain and
incorporate vendors’ data (namely drawings, specifications, structural and electrical loads, etc.) in detailed
engineering.
24.1.4.2 Construction
Construction activities will benefit from the existing installations on site.
• Site access will be monitored and controlled using the existing gates and fencing;
• The existing medical facilities will be used for all issues pertaining to health and injuries;
• The existing services contracts on site will be maintained (i.e. road maintenance, waste management,
facilities’ maintenance);
• The existing power distribution will be used for construction. It will be Tacora’s responsibility to obtain
all necessary permits for contractors on site to tap onto existing electrical reticulations;
• Room and board as well as transportation will be under contractors’ responsibilities;
• Existing overhead cranes and hoists will be certified and used by contractors, as necessary;
• Existing plant warehouse and laydown areas, c/w material handling equipment, will be made available
for equipment, materials and construction equipment storage and handling;

• Existing heavy and light vehicles workshops will be made available for the maintenance and repair of
vehicles;
• Existing plant roads and walkways will be used for in-plant movement. No further temporary in-plant
roads and walkways will be developed.
Secure perimeter demarcation will address access and permitting requirements as well as ES&H
management protocols between construction activities and any parallel operations activities.
Pre-planning for construction laydown areas, access/egress requirements from work areas.
Construction will include demolition and dismantling, concrete placement, steel erection, plate work
installation, mechanical equipment and piping installation along with the installation of electrical,
instrumentation and control.
Commissioning and Ramp-up
Commissioning will be conducted by the Tacora’s self-performed/integrated team, supported by a

commissioning coordinator; the commissioning coordinator will develop the operational-readiness
assessment and handover checklists, as well as schedule the commissioning activities.
The commissioning activities flowing from mechanical completion will include the development of
performance testing criteria combined with test programs along with the delivery of the POV,
Dry Commissioning and Wet Commissioning phases. Tacora’s operations will be responsible for the start-up
of the plant as well as for ramp up to nominal plant capacity.
Commissioning schedule; the schedule needs to be developed for all the commissioning activities that
include: the pre-operation check activities, the operational check activities and the production ramp-up steps.
Each system within the schedule needs to be tracked to measure the progress of the commissioning
activities; making sure to comply to the schedule established.
Pre-operational and operational check teams: Pre-operational and operational check teams composed of
operation, maintenance, construction and OEM need to be created to perform these activities. These teams
are in charge of performing all the testing required to ensure that equipment is ready to proceed up to the
ramp - up.
Define the pre-operational and operational check process: As part of the process, detailed checklists
should be produced and be completed by skilled personnel to verify the proper installation of new or relocated

equipment as per industry best practices. Their primary intention is to be instrumental in ensuring that
equipment is suitably prepared for performance testing.
Production ramp-up plan: The ramp-up plan means to start operating the plant under the normal operating
design conditions. The ramp-up plan identifies the material flow rate to be used at each step in the ramp-up
plan. During the testing, inspections are to be made to identify any problems that could avoid raising the
material flow rate to the next level targeted. Any issues encountered need to be fixed before moving to the
next flow rate stage. When the material flow rate meets the design capacity or as defined per contract, the
site production department becomes the owner of the operations.
Deficiencies management process: During the pre-operational checks, the operational checks and the
ramp-up phase, deficiencies could be found. Some deficiencies will have to be fixed right away and others
could be delayed by the commissioning team. These deficiencies need to be recorded in an action plan with
owners and target dates and tracked for progress. Some deficiencies could only be resolved after the
handover to the operation. A detail business process to manage the deficiencies needs to be established.
It is important to note that the plant start-up is forecast to commence prior to the completion of EWP10 added
load out capacity and EWP8 Primary Crusher Rock Hammer. Those packages will remain in construction
while the plant is commissioned, requiring shutdowns when those systems are brought on-line.
Project Schedule
The project schedule is presented in Figure 24.1.

Figure 24.1: Project Schedule

Plant Maintenance Program
An important part of the improved plant availability is based on the reduced downtime of the production lines.
During past operations, it was frequent that a line was stopped before the planned shutdown. In some
occasions, several of these unplanned shutdowns could happen. This was caused by misaligned preventive
maintenance (PM) schedules and man power constraints.
Tacora has developed new PM schedules that align the maintenance on equipment that is part of the same
line. For example, each mill line will be set on a 2900 hours running schedule after which it will be shutdown
and maintenance on all equipment on the line will be performed. BBA identified the recirculating pump as
being one of the weak points in terms of reliability. The replacement of this pump on each mill line by a more
adapted model is included in the CAPEX. This is considered to allow the whole mill line to be able to operate
for the planed 2900 hours. BBA also identified the length of the scheduled maintenance as having a negative
impact on availability. In particular, the relining of the mill feed chute was considered as a major contributor
to the duration of the shutdown. With the planed modifications (based on already modified line 4 as included
in the CAPEX), this equipment will require significantly less maintenance. In addition, Tacora will develop
work procedures based on their experience in other similar plants to safely and efficiently perform the tasks.
The same philosophy will be applied to all critical lines or equipment of the plant. Tacora plans to use the
Ellipse asset management system along with implementing today's best practices around predictive
maintenance
To address the issue of manpower availability, in the agreement reached with the United Steelworkers,
Tacora has included a clause that allows them, when required, to bring in contractors as additional manpower
to perform maintenance tasks. In addition, the compensation structure within this agreement is linked with
safety, quality production and shipment of concentrate. It is believed that this will encourage employees to
bring forward problems and improvements. Tacora also promotes a work culture that empowers decision
making and continuous improvements. The flat management structure is organized in a way that managers
are close to the personnel which allows for a quick follow-up on suggestions made or issues raised.
Mine Operation Readiness
Several activities are recommended to be undertaken prior to the re-start of operations. The following are
listed by function:
• Maintenance Function
• Selection and implementation of mine maintenance management system;

• Establishment of preventive maintenance schedule;
• Pre-start inspection of each equipment (batteries, brakes, oils, fire suppression, etc.) and repairs if
required;
• Establishment of preventive maintenance program and schedule;
• Establishment of spare parts lists for each equipment model and negotiation of consignment with
suppliers.
Operations Function:
• Preparation of induction programs and training or certification for operators;
• Establishment of standard operating procedures (drilling, blasting, loading, etc.);
• Establishment of consumables list and inventory for tires, ground engaging tools, drilling tools, etc.;
• Selection and implementation of mine dispatch and radio communication systems ideally prior to
equipment re-start.
Technical Services Function:
• Selection and implementation of specialized software for mining engineering, survey and geology
functions;
• Implementation of survey control stations;
• Establishment of grade control sampling protocols and readiness of laboratory to perform assays
(calibration of equipment, etc.).
Dewatering of Flooded Pits:
• Confirmation with competent authorities of dewatering of flooded pits into surrounding lakes;
• Inspection of dewatering equipment for restart;
• Elaborate detailed dewatering schedule to meet production schedule needs.

Risk Management
There was a risk review session held on November 15th, 2017 in Montreal to review the risks associated with
the Scully Mine. The meeting was held on Ausenco's premises and involved representatives from Tacora,
GMS and Ausenco.
The objective of the meeting was to identify the risks and opportunities for the above-mentioned project as
well as evaluate their severity and potential mitigation measures or follow-up actions.
Methodology
The review consisted in reviewing the risks identified by the participants prior to the risk session, to identify
new risks, and to rank the risks using the Probability and Impact Diagrams (PID) shown below. Note that both
risks and opportunities (or positive risks) were identified and ranked during the session.
Mitigation actions were identified for each risk whenever possible.
Figure 24.2: Probability Impact Diagram
The combination of risk level and risk likelihood results in an overall risk ranking as per the coloured section
of the risk matrix. The risk consequence and opportunity potential were evaluated as per the following tables.

Table 24.3: Consequence and Opportunity Potential
The risk register is included in the Appendix. The table columns are as follows:
• Item #
• Risk/Opportunity: Indicates whether the item is a risk or an opportunity
• Category: Indicates under which category the risk/opportunity falls

- Construction
- Community
- Engineering
- Environment
- Financial
- Health & Safety
- Operations
- Human Resources
- Project Management
- Owner's Risks
- Security
• Risk/Opportunity Description: Risk Severity / Opportunity Potential : Indicates the

"consequence" and "likelihood" of the item and the corresponding "level". See tables above and PID
for the various consequences and likelihoods respectively.
• Risk Mitigation / Opportunity Follow-up Action
• Risk Severity after Mitigation.
Results
A total of 46 risks and 6 opportunities were identified.
Ideally, the mitigated risks would all be low or moderate, but all projects are bound to include certain risks,
which have a “high” or “major” impact level, even after mitigation.
The risk maps below show the number of risks per severity before and after mitigation.

Figure 24.3: Risk Map
The following table in lists the “Extreme” risks and their associated mitigation plan.
Table 24.4:Extreme Risks

# Assessment Description
2 B5 Plant structural repairs have yet to be completed

Cause
Based on BBA Audit, several items identified as critical (Risk rating 4), were not repaired /
completed. Many of these have been classified by Tacora as "not needed for start-up" and have
therefore not been included in the CAPEX estimate.
Effect
Reduced mill throughput would result in less concentrate produced therefore affect revenues.
Increase the capital spending for start-up.
Action Item
Prior to any start-up activities, a detailed structural assessment must be undertaken, which may
result in additional necessary repairs and associated Costs.

10 C4 Unpredictable equipment behaviour during start-up.

Cause
The plant has been in care and maintenance mode for a few years now and there is a potential for
unforeseen break-downs when the plant is put back in operation.
Effect
Reduced mill throughput would result in less concentrate produced therefore affect revenues.
Increase the capital spending for start-up.
Action Item
Pre-start-up assessment of equipment. Repair costs can be lowered if repairs are identified early.
27 D5 Tailing Dams Slope Stability

Cause
Wrong slope stability analysis and poor construction practises
Effect
Potential loss of life in the event of failure for workers in area or downstream of rupture. Significant
loss of habitat for fisheries and potential destruction of wetland areas High. Production down time,
fines, legal liability in the event of loss of life. High reputational cost. Fines and legal liability Down
time of mine resulting in loss of jobs.
Action Item
Slope stability analysis and proper construction practices.
37 B4 Low Productivity of Construction Crew

Cause
Poorly defined scope of work. Inadequate supervision of construction work
Effect
Schedule delays and cost overruns
Action Item
Put in place proper contracting strategy.
Avoid Time and Material contract scheme whenever possible.
Have well defined scope of work.
Bring engineering to a sufficient completion level to support lump sump contracting.

42 B5 Health & Safety during construction phases

Cause
Poorly defined H&S program during the construction phase may lead to higher potential for injuries
Effect
Potential loss of life, production down time, fines, legal liability in the event of loss of life. High
reputational cost. Fines and legal liability
Action Item
Put H&S plan in place and appoint safety officers on site.
Conclusions
It is highly recommended that additional risk review sessions be planned in the next phases of the Project to
monitor the implementation of the mitigation actions and keep the risk register up to date.

25 INTERPRETATION AND CONCLUSIONS
• The geological interpretation for the Scully deposit is based primarily on diamond drilling data and 2D
sectional interpretations by representatives of Cliffs in 2014. The geology of the deposit is well
understood.
• The mineralization is found in three main members (Upper, Middle and Lower) of the Sokoman
Formation. Each member is subdivided into sub-units, which present different ore mineralogy,
recoveries and contaminant levels. The mineralization controls of the deposit are also well
understood.
• The protocols followed to collect sample data post-2002 are considered sufficient for NI 43-101
purposes. No evidence of established protocols was found for drilling prior to 2002; therefore,
confidence in this information is lower. Sampling has been undertaken based on geological logging,
and is adequate for the mineralization style and size of the deposit.
• QAQC samples submitted as part of the reanalysis program returned values within expectations. No
QAQC data was available for historical drilling (all drilling pre-2014), and all historical analyses were
undertaken by the on-site laboratory. The laboratory was not certified. GMS considers this insufficient,
however Scully was a long-term past producer of iron ore concentrate, and has demonstrated the
ability of reconcile grade with the geological model. GMS has outlined considerable recommendations
in Section 26 to return the laboratory and sampling practise on site to NI 43-101 compliance.
• Réjean Sirois, P. Eng., from GMS, supervised re-sampling of drill core during the site visit on
August 17-18th, 2017 to validate the grades of the assays in the drilling database. GMS believes the
check assay results are sufficient, however a reduction of 7% was noted in the reanalyses for Fe %.
• The geological model includes a total of 13 lithology units which were modelled using the provided
2D sectional interpretations and the coded drill hole database. 3D wireframe solids were produced in
Leapfrog™ and are representative of the folded lithologies present in the Scully deposit.
• Each bedding orientation is appropriately defined within the 14 structural domains dividing the
geological model.
• Mineral Resources were estimated in the mineralization and structural domains, using Geovia
GEMS™ from 6.0 m long composites using four ordinary kriging interpolation passes. Blastholes were
included in a small initial pass, and the remaining three passes only used exploration drill holes. Each
search ellipse was incrementally larger than the previous, and was based on variogram ranges and
the drill holes spacing.

• The performance of the block model to predict resource estimates was evaluated through global and
local validation methods, including visual comparisons, descriptive statistics, swath plots, Q:Q plots
and blasthole data comparisons. No production data was available to validate the accuracy of the
model to true known grade. Block grades were found to reproduce composite grades sufficiently in
the block model.
• The Mineral Resources are reported within a Lerchs-Grossman open pit shell and are effective
November 1st, 2017, using a cut-off of 20% Fe and a long-term iron price of USD 79/dmt con
(CAD 101.8/t). as follows:
• Open pit Measured and Indicated Mineral Resources total 734 Mt at an average grade of
34.6% Fe.
• Open pit Inferred Mineral Resources total 237 Mt at an average grade of 34.1% Fe.
• Mineral Resources were classified into Measured, Indicated and Inferred categories according to the
CIM Definition Standards on Mineral Resources and Mineral Reserves as adopted in NI 43-101.
• Open pit optimization was conducted using Whittle software to determine the optimal economic shape
of the open pit to guide the pit design process. Pit optimizations use an iron ore price of USD 69/dmt
(CAD 88.9/t) for a 65% iron concentrate and an exchange rate of 1.25 CAD/USD.
• The mine design and Mineral Reserve estimate have been completed to a level appropriate for
feasibility studies. Definitions for Mineral Reserve categories used in this report are consistent with
the CIM definitions as adopted by NI 43-101. The Mineral Reserve estimate is based on a cut-off of
27% for weight recovery for all sub-units except sub-unit 52 which is 30%. In addition, sub-unit 34 has
a ratio of weight recovery to iron of at least 1.
• Proven and Probable Mineral Reserves are estimated to be 443.7 Mt an average grade of 34.83%
iron and 2.58% manganese for 154.9 Mt of iron concentrate at 65.9% Fe. Lower member ore (sub-
units 51, 52 & 53) represent 62% of the tonnage, Middle member ore (sub-units 31 to 34) represent
32% and Upper member ore (sub-unit 22) the remaining 6%.
• An owner mining approach with conventional open pit mining techniques is planned on 12 m benches
with a final 24 m bench height excavated in most pit walls. Bench face angles, and berm widths are
variable by domain. The bench face angles are designed to follow the bedding plane for Domain 3 in
the hanging wall. The inter-ramp angles range from 32 to 46 degrees.

• Tacora has purchased three used hydraulic shovels and three used production drills from equipment
re-sellers. The equipment hours have been considered in the replacement schedule and the cost of
these units have been considered as sunk costs for the Feasibility Study.
• Loading in the pit will be with a fleet of hydraulic shovels consisting of one Komatsu PC4000-6 (diesel),
one Komatsu PC5500-6E (electric), one Komatsu PC5500-6 (diesel) and a 20m3 front-end loader yet
to be purchased. The loading fleet is matched with 240-tonne class mining trucks which have yet to
be purchased. The fleet reaches a total of 16 units in later half of the LOM.
• Production drilling will be accomplished with three electric rotary blasthole rigs which are already
purchased for the project. The blasthole diameter will be 349 mm (13 ¾ in.) with a 6.5 m by 7.5 m
pattern for a targeted powder factor of 0.45 kg/t in waste and 0.50 kg/t in ore. No pre-split drilling is
planned due to the incompetent nature of the rock mass.
• The Tacora open pit has been divided into seven sectors referred to as East Pit East, East Pit West,
West Pit, South Pit, West Pit Extension South, West Pit Extension North and Boot Pit. The final pit
design consists of pushbacks to the existing pit limits and a deepening of the current excavation. Most
of the tonnage remaining to be mined is from the West Pit (24%), East Pit West (21%) and South Pit
(20%). The initial mining is conducted on higher elevation benches well above the current water levels
in the pit. Dewatering of the pits will be undertaken in advance of mining with a combination of well
fields on the west side of the pit and in-pit sumps.
• Waste rock will be stored in several waste dumps around the pit limits including the North Dump, NW
Dump, SW Dump and South Dump. In addition, two in-pit dumps are planned to reduce haulage costs
and footprint impact. One dump is located in West Extension and the other in East Pit West which will
receive 40% of the total waste mined.
• The life-of-mine (“LOM”) plan details 26 years of production (2019 to 2044) which assumes two years
of ramp-up (2019 & 2020) before achieving in 2021 the target production rate of about 6 Mt of
concentrate per year. Mining pre-production activities are initiated in Q3-2018. The concentrator starts
processing ore in Q4-2018 (November 2018) with a transition to commercial operations in 2019.
• The peak mining rate of approximately 35.8 Mt is reached in 2036 with a peak of 40 Mt moved. The
average mining rate is 31.8 Mt/yr over the LOM.
• The open pit generates 387.7 Mt of overburden and waste rock for a strip ratio of 0.87:1 over the LOM
with 45.8 Mt of ore transiting through stockpiles for blending purposes and to balance mining and
milling constraints. A total of 831.5 Mt is mined from the pits.

Processing
• The concentrator has been operating for around 50 years; consequently, the process for treating the
ore is proven and considered robust.
• The process plant produced more than 6 million tonnes of concentrate for two years in the past.
Consequently, it is considered feasible to reach the target throughput.
• Several repairs and modifications are performed to improve plant reliability, especially the mills
feeding system and mills drive.
• Adequate preventive maintenance planning and structure of the work contract are considered key
factors to the improved availability.
• High tension separators are converted to dry magnetic separation for higher reliability and proper
manganese removal. Two lines were already converted in the past operations so this process is
considered robust.
Transportation
• The concentrate storage capacity will be increased to allow the loading of 168 car trains compared to
original 124 cars operation. This will include additional buffer storage of dry concentrate.
• Concentrate will be transported by train to Pointe-Noire where it will be loaded onto ships.
• Rail haulage is contracted out to QNS&L up to Sept-Iles. From there, trains are transported to Pointe-
Noire by Chemin de Fer Arnaud. Train unloading and ship loading is contracted out to SFPPN. This
operation will use the same unloading facilities as the original operations and the new shiploader.
SFPPN will be responsible for the refurbishment of the existing equipment to meet required
throughput.
• Contracts mentioned above have been agreed with the service providers for the planned production
rate except for SFPPN.
• The existing storage facility will be used with an estimated capacity sufficient for 7 years. As this
capacity is depleted, planning and construction of new dikes and additional pumping capacity will be
required.
• Current capacity is available without needing to directly discharge tailings into North Flora Lake

• To meet life of mine targets for tailings impoundment, the storage capacity of South Flora Lake and
part of its surrounding watershed is required.
• All 12 46 kV old breakers will be replaced with new ones already available on site.
• Existing equipment will be subject to testing before start-up as it is impossible to evaluate the state of
the equipment prior to proper testing.
• No transformer, cable or motor repair is scheduled. Testing will be performed throughout the restart
of the process. Based on these tests, detailed assessment will be performed whenever necessary. It
is impossible to evaluate the state of the equipment without proper testing.
• Existing equipment (transformers, MCC’s, cables) that are energized and in operation will not be
tested or evaluated as part of the plant restart.
• Most of the switchgears and MCC are in an acceptable state. Mould and moisture were discovered in
excessive amount on some units. The actual situation will be evaluated during the check–up, cleaning
and testing. In some areas, testing can only be done after an extensive period of drying.
• Old emergency generators are unusable and shall be replaced with new ones.
• Only partial repair of the lighting system is scheduled (150 fixtures).
• It was assumed that fire alarm system was operational and compliant with the fire code before
shutdown. Only minor start-up and checking (plus fire panel battery replacement) is scheduled.
• 10% of the instruments are assumed to require calibration or testing.
• Burner management system upgrade is based on a quotation provided in 2014. Due to a lack of time,
detailed engineering cannot be done and detailed evaluation of the work involved is not possible.
• There are 21 instruments that require nuclear sources (original ones removed at shut-down). Only
replacement of these sources is scheduled. All existing instruments are in good working order.
• Programming migration from old PLC5 to the new ControlLogix is based on percentage of hardware
supply and only during detailed estimate will the work be evaluated properly.
• Old communication protocol will be changed to Ethernet TCP/IP.
• All old and obsolete Variable Speed Drives will be replaced with new ones.
• Control room equipment (server, historians, firewall, etc.) will be replaced with new ones.

26 RECOMMENDATIONS
The following recommendations are put forward for the continuation of this Project into the next phases which
are: detailed engineering, procurement, and construction:
It is Tacora’s intent to be operational by November 2018 as per the plan put forth in this study. For this to
become a reality, it is imperative that critical path purchase orders for mining trucks and plant’s project
detailed engineering be placed in early February. Operational employees will have to be hired back in a
timely fashion to allow time for training and participation in the commissioning activities planned for the third
quarter of 2018.
In the development of the feasibility engineering study, drawings which were used as references for this study
were not issued “For Construction” or “As Built”. During the detailed engineering phase of this project, further
field surveys will be required to determine the “as-built” conditions of the existing brown-field facilities.
For all future drilling and sampling campaigns (including blasthole drilling), implementation of a
comprehensive QAQC protocol including the insertion of certified blanks, certified reference material
(CRM standards) and field duplicates regularly into the sample stream is recommended. This protocol will
help to identify shortcomings in the current operating procedures, and could result in better reconciliations
with blasthole and production data. This will be critical when trying to accurately quantify contaminants such
as Mn % and Magnetite % which historically have been difficult to reconcile. In addition, external umpire and
check assaying should be included in the procedure.
The XRF analysis methodology should be reviewed by an external expert. The current fused bead
methodology uses an extremely small sample size considering the half-bench-scale composite lengths (i.e.
for each 5 – 10 m composite of NQ drill core, only 0.8 g of pulverised sample is used for analysis). GMS
recommends adjusting the methodology to use a larger sample size (i.e. pressed pellet), which generally
uses between 8 and 15 g of pulverised material (depending on pellet diameter). In addition, currently hand-
written laboratory certificates should be replaced by an automated system which reduces the chance of
human-induced errors.
Specific gravity readings should be taken regularly on drill core, and downhole density logs are acquired for
new drilling. This will assist significantly in characterising the ore units (which present variable porosity and
mineralogy), and creating a new bulk density model for mine planning purposes.

All exploration and blasthole sampling and logging data should be stored in a comprehensive, centralised,
fit-for-purpose drilling database which is exclusively managed by a geological database administrator. This
system should reduce the amount of manual data entry and result in better database integrity. These systems
can commonly be linked to logging packages that will further assist with accurate data collection.
GMS recommends further investigating the impact of including excessively long samples (longer than the
bench height) in the resource estimation. If drill core is still available for these drill holes, G Mining
recommends re-sampling these intervals using smaller sample lengths.
Regarding the resource estimation, GMS recommends that the Scully Deposit is unfolded for the purposes
of variography, so more accurate ranges of the variogram can be determined. In addition, GMS recommends
using a variable search ellipse orientation during resource estimation (dynamic anisotropy) to avoid the use
of structural domains.
Characterization of the stockpiles present on site should be done to be able to use this material when
commissioning the plant or to generally include them in mineral reserves as they have been excluded from
the study.
There are Inferred Mineral Resources within the current pit designs which have been excluded from the
economic analysis and mine plan for this study. It is recommended to establish a definition drilling program
to increase the level of confidence and resource category of these resources in due time according to the
mine plan.
Additional hydrogeological investigations are recommended for the East, South and Boot Pits to investigate
groundwater infiltration. More specifically:
• Start a groundwater level monitoring program.
• Drill and conduct hydraulic tests at Boot Pit, South Pit, East-Pit-East and East-Pit-West.
• Validate the perched condition hypothesis for Knoll and Vern Lakes.
• Carry out additional geophysical surveys in the Duley and Little Wabush Lakes areas.
• Update the groundwater model with the data obtained during the field operations.

Additional waste rock storage options should be investigated. In the event of expanded larger open pit limits
optimized for higher iron ore prices additional waste dump storage capacity will be required and may limit or
defer the possibilities of in-pit waste storage.
Investigations on the pumping procedure for the flooded pits into the surrounding lakes must be done with
the Newfoundland and Labrador authorities as limitations may apply. There is sufficient time in the mining
schedule before the dewatering of flooded pits becomes critical for the mining schedule compliance.
Recommendations were made for further work to gain confidence in pit slope design. Additional work would
include:
• Drilling geotechnical holes and the installation of wire piezometers to verify pore pressure buildup;
• Carrying out uniaxial compressive strength tests on samples from geotechnical holes for all geological
units;
• Carrying out 4 direct shear tests along bedding planes;
• Review variation in unit quality, related to degree of weathering;
• Gather structural data and review potential kinematic failures on the hanging walls and end walls;
• Install an inclinometer in the east wall of the East Pit East.
Environmental Permitting
Design water management system to collect runoff water from mine infrastructure. An offset was left in the
designs for ditches and ponds.
Processing
Confirm environmental requirements to refurbish the dryer scrubbers. Perform detailed engineering for the
required modifications. Confirm that the dryer fan can handle the new scrubber design pressure loss.
Perform dust collection study at the dryer building (Dry concentrate handling).
Perform dust collection study at the loadout facility.
Validate if the torque system of the tailings thickener can be operated at 45% solid during the first months of
operation. The goal is to reduce the water reclaimed (to save energy and water pumps maintenance cost).

Optimization study (Spring 2018): Geotechnical and liquefaction studies on finer tailings to determine if dam
construction on interior tailings is feasible to increase storage capacity. Existing literature review can begin
in Winter 2018. Optimize tailings discharge plan to avoid freezing or seepage issues.
Review water management alternatives.
Spring 2018: Updated annual tailings dam inspection report.
Spring 2018: Optimize discharge plan.
Spring 2019: Tailings beach survey. Review discharge plan and update volume projections with actual
tailings data. Repeat on yearly basis.
Spring 2019: Plan schedule for geotechnical investigations and detailed engineering of starter dikes.
Spring 2019: Size cyclones and test efficiency for obtaining low fines content tailings construction materials.
Conduct laboratory testing.
Plant Structures and foundations
Prior to any start-up activities, a detailed structural inspection must be undertaken for all plant structures and
foundations to ensure their integrity and that their capacity is adequate. The previous structural audit done
by BBA in 2012, classified several items as critical (Risk rating 4), however, many of these were not repaired
/ completed. Any damage / corrosion which may have occurred since the 2012 audit should also be
assessed.
Existing e-rooms need very extensive cleaning and painting.
Inspection by local electrical authorities and safety inspector.
Control rooms (primary crusher, main CR and boiler CR) have very low lighting levels and require new
furniture.

Electrical equipment testing should start as early as possible to reveal whether there are problems with the
electrical equipment and allow for budgeting and repairs.
Hire core E&I team to perform some of the activities required for the start-up as part of the learning curve.
Buy only 2 emergency generators and evaluate, during start-up testing, if a third one is required.
E&IC works shall be done as early, as possible while most of the plant is not operational. PLC upgrade will
have some lead time for the programming and off-site testing.
Project Execution
Old documentation does not meet modern standards and needs to be updated and made usable for all future
projects and for plant maintenance.
Implement bridge phase so that Engineering can start the development of the deliverables to a level sufficient
packages.
Plant Maintenance
As a significant part of the improved availability is based on the reduced downtime of equipment, over the life
of the mine Tacora must continuously identify and perform the required maintenance as well as monitor the
efficiency of the maintenance tasks. In addition, the described work culture (section 1.1) must be maintained.

27 REFERENCES
AME Consulting Limited, (November 17, 2017), Tacora Resources Inc. Iron Ore Market Report.
BBA, (July 17, 2012), Scully Mine Site Facility Asset Integrity Assessment.
Cliffs, (2011), Manganese Removal Process: from Project Status to production, CIM Congress, Montreal.
Cliffs, (June 30, 2010), Manganese Reduction Plant Benefits, Scully Mines, Labrador.
COREM, (August 2008), Characterization of Core Samples Drop Weight Test and JKSimMet Simulation
Results, Report T-919.
COREM, (March 2, 2012), Core Sample Characterization Teswork, Report T-1289.
Fracflow Consultants inc, (August 19, 1997), Development for Dewatering and Water Control Plan for Scully
Mines, Labrador.
Golder Associates, (December, 2017), Draft-Feasibility Level Pit Slope Design Report. 001-1786882-RE-
RevA-FS_Pit_Slope_Design.pdf
MAG GLOBALL LLC, (October 18, 2017), Tacora 5Year Model, Document submitted by Joe Nielsen.
Magnetation, Improved Recovery and Throughput Justifications.
Picklands Mather and Co. (June 1973), Scully Mines Dewatering Study Phase 1, Wabush, Labrador.
Picklands Mather and Co., (1989), Scully Mines Dewatering Study.
Piteau Associates Engineering Ltd (Piteau), (June 2002), Scully Mines Cliffs Company Phase 1 and 2
Dewatering Well Program, west Pit Extension – Scully Mine, Well Completion and Dewatering Status Report,
Project 2196, Wabush, Labrador.
Piteau Associates Engineering Ltd (Piteau), (June 2001), Scully Mines Cliffs Mining Company West Pit
Extension Dewatering Study, Project 2196, Scully Mine, Wabush, Labrador.

Piteau Associates Engineering Ltd (Piteau), (October 2005), East Pit Dewatering Study, Scully Mine, Project
2666, Wabush, Labrador.
Soutex inc., Report: Mn reduction Plant Metallurgical Summary, Project 2156.
Soutex inc.,(February 2008),Technical note; Mn Circuit Testing Review, Project 2156.
Soutex inc., (2002), PFD001 - Scully Mine Simplified Process Flow Diagram, Project 2234.
Tacora,(September 11 2017), Tacora Mine Process Plant Worksheet, Document submitted by Jonathan
Sgarlata.
Scully Mines Conc. (October 30, 2017), Costs YTD VS 2008 Budget, Document submitted by Joe Nielsen.
Scully Mines (2008), Actual Cost- SM, Document submitted by Joe Nielsen on October 30, 2017.
Wabush, (1965-2012), Historical Production Data.

28 ABBREVIATIONS
Abbreviations Full Description
CAD Canadian Dollar

CAGR Compound Annual Growth Rate
CAPEX Capital Expenditure
CIM The Canadian Institute of Mining, Metallurgy and Petroleum
CFR Cost and freight (CFR) - legal term used in international trade
CoG Cut-off Grade
dmt Dry Metric Tonnes
DWT Dead Weight Tonnage
DNR Department of Natural Resources
ETP Effluent Treatment Plant
F Degrees Fahrenheit
Fe Iron
FEL Front End Loader
FoB Free on Board
FoS Factors of Safety
FS Feasibility Study
G Giga – (000,000,000’s)
g Gram
g/cc Density unit (Gram per cubic centimeter)
GDP Gross Domestic Profit
gpt or g/t Grams per tonne
g/L Gram per liter
G&A General & Administration
GMS G Mining Services Inc.
GPS Global Positioning System
h Hour
h/d Hours per day
h/y Hours per year
h/wk Hours per week
hp Horsepower
Hz Hertz
IRR Internal Rate of Return
ISO International Organization for Standardization
k Kilo – (000’s)
kg Kilograms
kg/t Kilograms per tonne

kV Kilovolts
km Kilometer
km/h Kilometer per hour
kPa Kilopascal
KPIs Key Performance Indicators
kt Kiloton
kW Kilowatts
kWh Kilowatts per hour
L Liter
LOM Life of Mine
M Mega or Millions (000,000’s)
m Meter
masl Meters above sea level
M&I Measured and Indicated
MII Measured Indicated and Inferred
MCC Motor Control Center
m/min Meter per minute
Mn Manganese
m/s Meter per second
m2 Square meter
m3 Cubic meter
mg Milligram
mg/L Milligram per liter
mm Millimeter
ml Milliliter
min Minute
Mo Month
Mt Million tonnes
Mtpd Metric tonne per day
Mtpy Metric tonne per year
MVA Megavolt-ampere
MW Megawatt
NI 43-101 National Instruments 43-101- Canadian Standards of Disclosure for Mineral Projects
NOH Net Operating Hours
NPI Net Profit Interest
NPV Net Present Value
OK Ordinary Kriging Methodology
OPEX Operating Expenditures

PEA Preliminary Economic Assessment

PFS Pre-feasibility Study
Pb Lead
PV Present Value
QC Province of Quebec
QP Qualified Person
RC Reverse Circulation
RoM Run-of-mine
rpm Revolutions per minute
SAT Saturation Magnetization Analyzer
Sec Second (time)
STP Sewage Treatment Plant
t Tonnes (1,000 kg) (metric tonne)
t/y or tpy Tonnes per year
t/d or tpd Tonnes per day
t/h or tph Tonnes per hour
TIA Tailings Impoundment Area
t/m3 Tonnes per cubic meter
tph Metric tonnes per hour
TRS Tailings Reclaim Sump
TSF Tailings Storage Facility
TTP Thickened Tailings Plant
UCS Unconfined Compressive Strength
USD United States Dollar
V Volt
VAT Value Added Tax
wk Week
W:O Stripping Ratio (Waste to Ore ratio)
WTREC Weight Recovery
y Year

Tacora Scully Mine FS NI43101 20180205

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Tacora Scully Mine FS NI43101 20180205

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Feasibility Study

Technical Report for the

Wabush, Newfoundland & Labrador

Tacora Resources Inc.

G Mining Services Inc. Louis-Pierre Gignac, P. Eng. G Mining Services Inc.

Effective Date: December 22, 2017

_Louis-Pierre Gignac____________ Date: December 22, 2017

_Rejean Sirois_________________ Date: December 22, 2017

_Étienne Bernier_______________ Date: December 22, 2017

_Karl-Emmanuel Giroux__________ Date: December 22, 2017

_Rémi Lapointe_________________ Date: December 22, 2017

_Martin St-Amour_______________ Date: December 22, 2017

_David Sims_______________ Date: December 22, 2017

_Craig Bugden_______________ Date: December 22, 2017

1 EXECUTIVE SUMMARY 1-1

Table of Contents December 22, 2017 Page i

Tailings Storage Facility and Dams ........................................................ 1-38

Table of Contents December 22, 2017 Page ii

Historic Resource Estimate .......................................................................................... 6-2

Table of Contents December 22, 2017 Page iii

Quality Assurance and Quality Control ....................................................................... 12-8

Table of Contents December 22, 2017 Page iv

Table of Contents December 22, 2017 Page v

Milling Methodology and Concentrate Handling ......................................................... 17-7

Table of Contents December 22, 2017 Page vi

Outlook for Traditional Markets............................................................. 19-20

Table of Contents December 22, 2017 Page vii

Mining initial Capital and Sustaining Capital ............................................................. 21-25

Table of Contents December 22, 2017 Page viii

Electrical, Instrumentation and Controls ..................................................................... 25-5

Table of Contents December 22, 2017 Page ix

List of Figures December 22, 2017 Page x

List of Figures December 22, 2017 Page xi

List of Figures December 22, 2017 Page xii

List of Figures December 22, 2017 Page xiii

Figure 16.21: Mine Manpower Requirements .......................................................................................... 16-50

List of Figures December 22, 2017 Page xiv

Figure 20.1: First Nation Reserve Locations ............................................................................................ 20-14

List of Figures December 22, 2017 Page xv

List of Tables December 22, 2017 Page xvi

List of Tables December 22, 2017 Page xvii

Table 16.20: Waste Haulage Results ....................................................................................................... 16-37

List of Tables December 22, 2017 Page xviii

Table 22.5: Project Evaluation Summary – Base Case ............................................................................. 22-6

List of Tables December 22, 2017 Page xix

Summary of average life-of-mine metrics

Parameter Unit Value

Section 1 December 22, 2017 Page 1-1

Section 1 December 22, 2017 Page 1-2

Access, Local Resources and Infrastructure

Section 1 December 22, 2017 Page 1-3

Section 1 December 22, 2017 Page 1-4

Mineral Resource Estimate

Section 1 December 22, 2017 Page 1-5

Section 1 December 22, 2017 Page 1-6

Notes on Mineral Resources:

Section 1 December 22, 2017 Page 1-7

Table 1.2: Tacora Mine Mineral Reserve Estimate

Notes on Mineral Reserves:

Section 1 December 22, 2017 Page 1-8

Figure 1.1: Mine Production

Strip Ratio (W:O)

Section 1 December 22, 2017 Page 1-9

Section 1 December 22, 2017 Page 1-10