YELLOWHEAD MINING INC. : http://www.yellowheadmining.com/ : QwikReport

Harper Creek Project

Location and Ownership

The project is located approximately 90 km north-north-east of the city of Kamloops in south-central B.C. The Company now holds mineral tenures with an area of 41,861 ha (618 ha subject to a 2.5% NSR), plus it controls tenures with an area of 775 ha optioned from Cygnus Mines (a US Steel subsidiary) and subject to a 3% NSR capped at $3 million, bringing the total controlled tenures to 42,636 ha.

History

Noranda Exploration and US Steel discovered the deposit in 1966. The two companies conducted exploration separately until 1971, when they formed a joint venture to explore their claims, which lasted until 1981. Drilling on the main deposit totalled 24,007 meters in 147 holes. In 1996, American Comstock drilled 2,847 metres in 8 holes. Yellowhead has acquired and digitized the data from the prior programs and recovered partial or complete drill core from 128 historical holes on site.

Yellowhead Mining was formed in 2005. In 2005 and 2006, five claim groups were acquired or optioned by Yellowhead Mining on the historical drilling area and contiguous parts of the Eagle Bay Assemblage, the mineralogical group which includes the Harper Creek deposit.

Geology and Mineralization

The Harper Creek Project is an extensive volcanogenic sulphide system, with a mineralized envelope greater than 2.0 km along strike, over 2.0 km down dip, in a 1 kilometre thickness of volcano-sedimentary stratigraphy, and open along strike, down dip and at depth.

Copper mineralization is tabular, striking east-west and dipping about 15° -- 25° to the north with a number of high copper grade cores that persist with depth within a multi-phased stringer zone. The deposit is open to the north and along strike.
Harper Creek is hosted in the Eagle Bay Assemblage, comprised of the Lower Paleozoic Greenstone Belt. There are intensely altered sequences of black shales, mudstones, mafic and felsic flows and tuffs.

A broad lower-grade zone of copper and gold/silver is linked to multi-phased stringer or feeder zones. Higher grade copper-bearing massive sulphides are adjacent to porphytic rhyolite flows. Vertical zonation ranges from upper lead/zinc/silver/barite/pyrite to deeper copper(some zinc)/silver/gold/pyhrrotite.

Typical intercepts represent different potential mining zones of the deposit:
Exploration

During late 2005 and early 2006, the company re-logged and re-analysed historical drill core recovered from the site, and produced a NI43-101 data compilation report. Beginning spring 2006, Yellowhead completed a 1,000 line kilometre airborne geophysical survey, identifying several high priority targets for further exploration. Also in 2006, a 12-hole, 4,077 metre in-fill drilling program intersected several high grade zones and confirmed the volcanogenic massive sulphide characteristics of the deposit. At least ten horizons have been identified, with both open-pit and underground potential.

In 2007, Yellowhead completed a 15,904 metre, 40-hole drill program. The first six step-out holes down-dip all encountered multiple mineralized horizons including massive sulphide zones.

In 2008 through April, the company drilled another 7,655 metres in 23 holes.

Significant exploration potential as ore body remains open along strike, down
dip and at depth.

NI 43-101 Resource Estimate - March 2008

Scott Wilson RPA provided a resource update in March 2008 based on drill results to the end of 2007, as follows:

Indicated      
Cut-off Tonnage CU Contained Copper
% Cu Kt % Cu #
0.50 42,012.423 0.599 554,402,552
0.40 103,682.162 0.506 1,156,305,122
0.30 249,606.897 0.411 2,260,816,849
0.20 538,392.309 0.322 3,825,564,144
0.10 934,554.452 0.249 5,137,217,105
       
Inferred      
Cut-off Tonnage CU Contained Copper
% Cu Kt % Cu #
0.50 7,961.244 0.602 105,590,145
0.40 16,523.336 0.519 188,962,246
0.30 33,750.404 0.430 320,220,350
0.20 64,692.196 0.342 487,327,336
0.10 118,950.972 0.254 666,101,433

Environment

Phase I environmental assessment work has been completed with water quality baseline sampling in the field and regional desk studies. Phase II is being carried out through 2011 in advance of permit applications. The company has entered the Environmental Assessment process with the federal and provincial governments.

First Nations and Local Communities

The Company is cognizant of its responsibility to address the needs and aspirations of the local and regional First Nations and local communities, and has begun consultation with these groups including visits from their representatives to the site. The Company plans to conduct its exploration and development of Harper Creek in an economically, socially and environmentally responsible manner, and to set objectives and maintain operations that are in the best business interests of the Company's shareholders, First Nations and local communities.

Internal Studies and Feasibility Study Plan

Internal company studies (not NI 43-101-compliant) were completed by Yellowhead Mining in 2008, based on the NI 43-101 resource, which considered a range of throughputs from 15,000 tonnes/day to 90,000 tonnes/day and related pit optimizations based on comparable project economics. From these studies a 70,000 tonnes/day rate and a 0.2% copper cut-off was determined to be optimal (*). Pit profiles from these studies are shown on the maps page. These pit profiles demonstrate a very low 18-year life-of-mine strip ratio of 0.83:1 (*). The pit-optimized resource is currently estimated at 454 million tonnes with 2.9 billion pounds of contained copper plus unquantified gold and silver (*).

The Company intends to commence an NI-43-101 economic study following completion of sufficient financing, to include a drill program to expand and upgrade a portion of the Indicated and Inferred Resources to Measured Category, plus geotechnical and condemnation drilling, further detailed pit optimization modelling, metallurgical studies, geotechnical and tailings studies, design and costing, environmental assessment process, and First Nations and other community engagement.

(*) not NI 43-101 compliant

Metallurgical Results

Metallurgical tests to date on both higher and lower head grade material resulted in very good concentrates, as demonstrated below:

Head Grade Concentrate Assay Recoveries
Cu Au Ag Au Ag Cu Au Ag Cu
% g/t g/t g/t g/t % % % %
0.75 .17 4.0 4.8 91.5 28.8 64.7 68.0 88.0
0.35 (Lock Cycle) .05 1.0 1.6 106.9 30.93 35.4 64.3 86.6

Work is ongoing to enhance precious metals recoveries. Deleterious elements in ore and concentrates are well below levels that would attract penalties, making this clean concentrate desirable for blending with dirtier concentrates from other mines at the smelter.

Project Team

The project team has included the following experts:


Harper Creek Movies

Harper Creek Block Model

Harper Creek Pit
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This page was created on Tue Sep 7, 2010 at 9:52:14 PM Pacific Time.