Eaglehead Project

History

The Eaglehead project was first explored in 1963 with drainage sampling staged from Eaglehead Lake.  Copper mineralization was found in intrusive outcrop in the creek in what is now known as the Camp Zone.

Imperial Oil Ltd. optioned the property in 1970 and drilled 30 diamond drill holes between 1971 and 1976. Esso Resources Ltd (formerly Imperial Oil) with joint venture partner Nuspar Resources drilled a further 25 holes between 1977 and 1981.

Carmax acquired the property by staking after Homestake Mining let the claims lapse and has expanded the claims to cover 11,410 hectares.

Location and Property

The property is located approximately 1,100 km north of Vancouver and approximately 48 km east of Dease Lake, a town of approximately 400 people, in northwestern British Columbia. The northwest-southeast oriented property extends approximately 28 km along strike from Eaglehead Lake at its northwestern extremity to approximately 8 km past Tournigan River in the southeastern part of the property.  The property comprises 31 mineral claims consisting of 613 cells covering a total area of approximately 11,410 hectares (ha) in the Liard Mining Division of British Columbia.

Geology

Copper and molybdenum mineralization on the Eaglehead Property is typical of porphyry Cu-Mo systems associated with hydrothermal alteration assemblages within intermediate volcanic rocks and granodioritic and monzonitic rocks, similar to other porphyry copper deposits within the Quesnel Trough of British Columbia.  Mineralization is contained in altered rocks, which are localized by geological structures, and range in size from 5 m to more than 100 m wide and more than three kilometres long.  Mineralization is comprised of altered zones, quartz stockworks, and hydrothermal breccia zones that contain disseminated chalcopyrite and other sulphide minerals.  Past work has identified six target areas, and Carmax is hopeful that additional porphyry Cu-Mo targets may be discovered on the property.

Exploration

From 1971 to 2011, a total of 33,202 metres has been drilled in 120 drill holes.

In 2010 the Company retained Agnerian Consulting Ltd to undertake a review of exploration results to date and prepare an NI 43-101 Technical Report, which was completed and filed on SEDAR on January 12, 2011.  (See www.sedar.com.)

Exploration to date has outlined at least six areas (East, Far East, Bornite, Camp, Pass and West zones) with porphyry-type copper-molybdenum mineralization on the property.  Prior published drill results have indicated that the East Zone and the Bornite Zone host west-northwest trending porphyry type Cu-Mo mineralization within variably hydrothermally altered granodioritic rocks.  In general, low grade gold and silver values are associated with Cu-Mo mineralization.  The mineralized zones in both areas range in horizontal thickness from 5 m to 70 m within a hydrothermally altered and mineralized zone ranging from 200 m to 250 m in total width.

The company also notes that Cu-Mo mineralization is open along strike and at depth, and extends across the contact zone between the granodiorite and felsic volcanic rocks.

For the 2011 drill program, core sample were sent for assay analysis at Acme Laboratories in North Vancouver B.C, and a summary of the mineralized intercepts can be found on SEDAR at www.sedar.com

The assay results to date indicate extensions to previously known mineralization in the East and Bornite zones, with Cu, Mo, and Au values with grades ranging from 0.16% Cu to 3.33% Cu over drill core intervals ranging from 3 m to 161 m.  The individual mineralized zones in both areas range in horizontal (true) thickness from 5 m to 80 m.

The mineralized zones in both areas extend more than 400 m at depth within hydrothermally altered and mineralized zones that are approximately 500 m wide and 700 m to 800 m long. 

Resource Estimation

In 2012 the company engaged Roscoe Postle Associates Inc. (RPA) of Toronto to complete an independent estimate of NI 43-101 compliant Mineral Resources of the East and Bornite zones taking into consideration the results received from the 2011 exploration program.  The report has been completed and a NI 43-101 compliant technical report was filed on SEDAR on June 29, 2012.

The NI 43-101 report Inferred Mineral Resources estimate includes only two of the six mineralized target areas that have been identified on the property.  The resources are based on a program of diamond drilling 8,300 meters in 25 holes in 2011, as well as historical drilling.

The Inferred Mineral Resource estimate totals 102.5 million tonnes at an average grade of 0.29% Cu, 0.010% Mo, and 0.08 g/t Au. The resources were estimated at a cut-off grade of 0.16% copper equivalent ("CuEq") and contain approximately 662 million pounds copper, 22 million pounds molybdenum, and 265,000 ounces gold.

The Mineral Resources are contained within two conceptual open pits, the East and Bornite zones, and constitute approximately 69% of total mineralization above the grade cut-off.  The breakdown of the Mineral Resources of the two zones is shown in Table 1.

Notes:

1. CIM definitions were followed for Mineral Resources.
2. Mineral Resources are estimated using long-term metal prices of US$4.00/lb. Cu, US$17.00/lb. Mo, US$1,400/oz Au, and a US$/CAD$ exchange rate of 1.00.
3. The copper equivalent (CuEq) calculation includes a provision for different metallurgical recoveries and smelter pay-out.
4. Metallurgical and payable recoveries are assumed to be 80% for base metals and 67% for gold.
5. Silver was not used to determine CuEq values.
6. Mineral Resources were estimated using a pit discard cut-off grade of 0.16% CuEq.
7. The numbers for tonnage, average grade, and contained metals are rounded figures.
8. These resources are constrained by a Whittle optimized pit shell and constitute approximately 69% of total mineralization of the block model within a conceptual open pit.

The company notes that due to non-standard sampling techniques in historic drilling, some of the past drill holes were not included in the current in-pit resource estimate.

Resource Estimation

The estimate was carried out using a block model constrained by 3D wireframes of the principal mineralized domains. Grades for copper, molybdenum, and gold were interpolated into the blocks using Inverse Distance to the Third Power (ID3) weighting. The estimate was further constrained by a Whittle pit shell, generated to demonstrate that the mineralized bodies have a reasonable probability of economic extraction, as stipulated in NI43-101 and the CIM Definition Standards and Guidelines.

On the basis of a statistical analysis of the sample data, top cuts applied to the Eaglehead sample data were 7.5% Cu, 0.250% Mo, and 2.5 g/t Au. These top cuts were applied to the sample assays prior to compositing.

The block model used comprises an array of 10 m x 10 m x 5 m blocks, oriented parallel to the property grid.  A bulk density of 2.7 t/m³ was applied.

The resulting estimate of Mineral Resources was classed as Inferred.

RPA has recommended additional drilling and related work, with a proposed exploration budget of approximately $2.5 million.  This includes 8500 metres of drilling in 28 holes, as well as additional ground geophysics, structural mapping, detailed mineralogical studies and metallurgical testing.  All of this would lead to an updated Mineral Resource estimate upon completion.