About the Broken Hammer Project

On March 18, 2014, Wallbridge announced that its Board of Directors had approved the production decision for the Broken Hammer copper and platinum group metal project in Sudbury, Ontario. Construction and operation of the Broken Hammer pit started in April, 2014.

 

On March 24, 2014, Wallbridge announced that had entered into a definitive custom milling agreement with Northern Sun Mining Corp. (TSX:NSC) to provide for the custom milling of Wallbridge's Broken Hammer project at NSC's Redstone Mill in Timmins, Ontario. Pursuant to the terms of the agreement, Northern Sun will be responsible for the handling and milling of such ore. The agreement is for approximately a one year term based on a minimum of 800 tonnes per day and milling is expected to begin on or about June 30, 2014. The Redstone mill will generate both a gravity concentrate and a floatation concentrate which will then be conveyed to copper smelters or refinery for further treatment.

 

The Broken Hammer project is an open pit operation which will be used to extract approximately 195,000 tonnes of in-pit Cu-Ni-PGE mineral reserve utilizing the services of William Day Construction Limited, a local mining contractor. The ore will be transported to Northern Sun's Redstone facility in Timmins, Ontario and subsequently the concentrates are under a contract with a nearby copper smelter. The Definitive Agreement with Northern Sun is expected to be finalized this week and the construction and subsequent production is expected to commence in April 2014. The open pit mining is expected to be completed within 10-12 months at an average daily rate of approximately 800 tonnes of ore per day.

 

Summary of the Broken Hammer Updated Mineral Resource Estimate

 

An updated resource estimate prepared by Roscoe Postle Associates Inc. ("RPA") according to CIM Standards was filed in a NI 43-101 technical report on the property dated July 27, 2012 (refer to June 19, 2012 press release). This resource was later updated in September 2013 incorporating additional mineralization intersected while conducting geotechnical studies. Summary of the Updated Mineral Resource is in Table 1 below.

 

Table 1: Updated mineral resource estimate, with an effective date of September 12, 2013

 

The Qualified Person for the Broken Hammer resource estimates is Mr. Bruce Churchill, P. Geo., who prepared the 2012 resource estimate contained in the prefeasibility study for the Broken Hammer Project dated October 8, 2012 which was filed on August 2, 2012 and the updated resource in September 2013 (see Press Release dated September 18, 2013). Mr. Churchill is a Qualified Person under NI 43-101 and is independent of Wallbridge.

 

Wallbridge prepared an updated in-pit mineral reserve estimate based on a global mining recovery of 95% and 5% dilution (at zero grade). Table 2 below summarizes the in-pit reserve.

 

Table 2: Mineral Reserve estimate, with an effective date of February 28, 2014

 

 

The Qualified Person for the Broken Hammer updated reserve estimate is Mr. Marz Kord, P. Eng., President & CEO for Wallbridge. The updated Mineral Reserve estimate is based on updated economic inputs and does not represent a material difference from the previous Mineral Reserves estimated by RPA Inc.(see Press Release dated September 18, 2013).

 

Wallbridge estimates that the project is expected to generate an Earnings Before Interest & Taxes (EBIT) of $5.84M and a net cash flow of $4.8 M.

 

The parameters used in the evaluation of the project are as follows:

 

 

 

Summary of projected revenue, operating costs and capital expenses are as follows:

 

 

 

Capital Costs

 

The total capital cost to build the Broken Hammer open pit is estimated to be $1.04M. Specific details are as follows: