Tiger Deposit
(carbonate replacement, oxide gold deposit)

TIGER DEPOSIT HIGHLIGHTS

  • Discovered and defined carbonate replacement style oxide and sulphide gold mineralization at the Tiger Deposit from 2006 to 2010
  • Completed 26,844 m of drilling in 150 holes at the Tiger Deposit
  • Total measured and indicated oxide and sulphide resources of 5,680,000 tonnes at a grade of 2.66 g/t gold containing 485,700 ounces of gold*
  • ATAC has begun the process of permitting an all-season tote road to the Rau Trend and Tiger Deposit
  • 2,500' private airstrip located 8 km from the Tiger Deposit and 40 person all-season camp
  • Studies and geophysical evidence suggests that much of the 35 km long Rau Trend may be underlain by a large intrusive complex that is responsible for the extensive gold mineralization
  • NPV(5%) of $106.6 million and an IRR of 34.8% before tax, and an NPV(5%) of $75.7 million and an IRR of 28.2% after tax, with an all-in sustaining cost of US$864/oz
  • Pre-production capital cost of $109.4 million and life-of-mine (“LOM”) sustaining capital costs totaling $8.3 million
  • Total project life increases to approximately 9 years, including 1 year of construction and pre-stripping followed by 6 years of owner-operated open-pit mining and 2 years of reclamation
  • Approximately 302,307 ounces of gold produced at an average undiluted grade of 3.81 g/t gold

Updated Tiger PEA completed in 2016:

  • NPV(5%) of $106.6 million and an IRR of 34.8% before tax, and an NPV(5%) of $75.7 million and an IRR of 28.2% after tax, with an all-in sustaining cost of US$864/oz
  • Pre-production capital cost of $109.4 million and life-of-mine (“LOM”) sustaining capital costs totaling $8.3 million
  • Total project life increases to approximately 9 years, including 1 year of construction and pre-stripping followed by 6 years of owner-operated open-pit mining and 2 years of reclamation
  • Approximately 302,307 ounces of gold produced at an average undiluted grade of 3.81 g/t gold
  • Compared to the 2014 PEA, the 2016 PEA extends the mine life by 2 years, more than doubles the pre-tax NPV(5%) and increases the pre-tax IRR by 4.8%

Tiger Deposit Highlight Oxide Drill Results

HOLE FROM
(m)
TO
(m)
INTERVAL
(m)
GRADE
(g/t)
RAU-09-19 43.59 71.63 28.04 24.07
RAU-09-23 60.35 87.78 27.43 9.72
RAU-09-41 71.63 96.10 24.47 19.59
RAU-09-46 16.15 72.84 56.69 5.95

True widths for highlight Tiger Oxide drill holes are estimated to be 70% - 90% of intersected widths

Geology & Mineralization

Geology

Exploration conducted by ATAC between 2006 - 2010 focused along a 15 km long ridge system underlain by Paleozoic carbonate rocks. Carbonate strata at the southeast end of the ridge system is intruded by a small early Tertiary (62.9+0.5 Ma) granite stock. Work along the 15 km trend comprised widely spaced soil geochemical surveys, airborne VTEM, ZTEM and magnetic geophysical surveys plus geological mapping and prospecting. More than a dozen gold and/or silver, copper exploration targets have been defined. Detailed work at the southeastern end of this trend focused on the Tiger Deposit and included grid soil geochemical surveys and diamond drilling of 150 holes.

The Tiger Deposit is a stratabound, structurally-controlled gold deposit that trends northwest, dips moderately northeast and is characterized by replacement of host karst limestone by iron carbonate minerals. It is 800 m long, 100 to 200 m wide, and up to 96 m thick. Mineralization is contained within a zone of small-scale folding and shearing, which is itself developed in and adjacent to a regionally extensive corridor of highly strained rocks that may reflect a deep seated fault zone. The mineralized system is defined by a series of stacked and folded limestone horizons intercalated with locally extensive mafic flows and volcaniclastic units. Most of the exploration has been directed toward the Discovery Horizon, although there is evidence for at least two additional stratabound intervals of gold mineralization.

Mineralization

Gold occurs in both sulphide and oxide material. Sulphide mineralization is accompanied by, and developed within, dolomitized limestone, which is replaced by ferruginous dolomite and iron carbonate minerals. Sulphide species consist of disseminated to banded pyrite, with subordinate arsenopyrite and pyrrhotite, and minor bismuthinite and sphalerite. Small amounts of disseminated scheelite are also present. The main sulphide minerals exhibit at least three stages of mineralization. Sulphide-bearing mineralization averaged 4.04 g/t gold over 96.01 m from hole Rau-09-66.

Oxide mineralization is completely devoid of sulphide minerals and ranges from very competent, weakly porous limonitic mud to rubbly porous limonitic grit. The oxide appears texturally amorphous in most intersections but occasionally exhibits residual color banding that may represent relict sulphide textures. Complete oxidation extends up to 250 m from surface. The best oxide grades (e.g., hole Rau-09-19, which assayed 24.07 g/t gold across 28.04 m) and deepest oxidation occur where north-striking extensional faults intersect the regional northwest-striking structure.

NI 43-101 Mineral Resources*

NI 43-101 Mineral Resource Estimate*

Type Classification Au Cut-off (g/t) Tonnes > Cut-off Grade>Cut-off Contained Metal
Au (g/t) Ag (g/t) Au (oz) Ag (oz)
Oxides Measured 0.50 2,600,000 3.10 4.77 259,100 398,700
Indicated 0.50 1,720,000 2.47 4.10 136,300 226,700
Sulphides Indicated 1.00 1,360,000 2.07 0.56 90,300 24,500
Total M+I 5,680,000 2.66 3.56 485,700 649,900
Oxides Inferred 0.50 280,000 1.52 5.67 13,700 51,000
Sulphides Inferred 1.00 2,950,000 1.84 0.47 174,800 44,600
Total Inferred 3,230,000 1.81 0.92 188,500 95,600
*Please see the disclosure page on this website for the Tiger Deposit Preliminary Economic Assessment and Mineral Resource Estimate disclosure

Preliminary Economic Assessment 2016*

Preliminary Economic Assessment 2016*

Highlights from the 2016 PEA, with the base case gold price of US$1,250/oz and an exchange rate of CA$1.00 equal to US$0.78 are as follows. Unless specified otherwise, all values are shown in Canadian dollars.

  • NPV(5%) of $106.6 million and an IRR of 34.8% before tax, and an NPV(5%) of $75.7 million and an IRR of 28.2% after tax, with an all-in sustaining cost of US$864/oz;
  • Compared to the 2014 PEA, the 2016 PEA extends the mine life by 2 years, more than doubles the pre-tax NPV(5%) and increases the pre-tax IRR by 4.8%;
  • Approximately 302,307 ounces of gold produced at an average undiluted grade of 3.81 g/t gold;
  • Total project life increases to approximately 9 years, including 1 year of construction and pre-stripping followed by 6 years of owner-operated open-pit mining and 2 years of reclamation; and,
  • Pre-production capital cost of $109.4 million and life-of-mine (“LOM”) sustaining capital costs totaling $8.3 million.

Mining and Processing

The Tiger Project has been modeled as an owner-operator, conventional truck-and-shovel open-pit mining operation with a conventional CIP gold recovery process. Year-round operations would be supported via a 68 km tote road, which connects the project to the Yukon highway system, near Keno City.

Mineralized material will be loaded into 40 tonne articulated trucks and delivered to the process plant, located 1 km southwest of the pit. High-grade mineralized material will be sent directly to the primary crusher, while low-grade stockpile material will be stored close to the primary crusher. Waste material from the pit will be stored in two waste dumps, located at the northwest and southwest sides of the pit. A total of 3.2 Mt of the Mineral Resource and 15.6 Mt of waste rock will be produced from the pit during the 7 years of mining operations and pre-stripping. The LOM average gold grade of mined oxide and sulphide resources is 4.06 g/t and 2.99 g/t, respectively. The LOM stripping ratio (defined as waste material mined divided by Mineral Resources mined) is 4.9.

Due to the soft nature of the mineralization and host rock, a single stage of crushing will be performed by a MMD sizer. Crushed material will be ground to 80% passing 75 microns using a semi-autogenous grinding mill and a ball mill in series before cyanide leaching in a conventional CIP circuit. The leach tailings will be detoxified and stored in a lined facility within the Tiger Valley. Gold will be refined into doré bars on site through a standard Adsorption, Desorption and Recovery treatment. Based on the results of metallurgical testwork and the mining schedule, projected LOM average recoveries are 90.3% for oxide mineralization and 57.7% for sulphide mineralization.

The processing plant will operate year-round at a rate of 1,500 tonnes per calendar day, and will achieve full throughput in Year 2. Peak annual production will be approximately 86,555 oz of gold in Year 2, with a LOM average annual production of approximately 50,000 oz gold, excluding the final year which will operate for a reduced period.

Key Improvements over the 2014 PEA:

The 2016 PEA envisions a conventional year-round operation and has improved upon all aspects of the 2014 PEA. Key improvements include:

  • Increased the pre-tax NPV(5%) by $54.4M;
  • 36% increase in total recovered ounces;
  • Project life extended by 2 years;
  • Pre-tax payback period reduced to 1.85 years;
  • Tote road access: supports year-round operations and simplifies project logistics;
  • 100% CIP process: simplified and conventional process allows for year-round operations and reduces LOM sustaining capital costs;
  • Relocated and consolidated project infrastructure: reduced overall environmental footprint and haulage costs; and,
  • Year-round operations: alleviates logistical and staffing challenges associated with seasonal access and operations.

Table I: Comparison of Key Results and Parameters

2014 PEA 2016 PEA*
Gold Price (US$/oz) $1250 $1250
Exchange Rate (US$/CA$) 0.92 0.78
Pre-tax NPV(5%) (millions) $52.2 $106.6
Pre-tax IRR 30.0% 34.8%
Post-tax NPV(5%) (millions) $33.67 $75.71
Post-tax IRR 21.5% 28.2%
Recovered Gold 221,558 oz 302,307 oz
Average Gold Grade 3.72 g/t 3.81 g/t
Average Oxide Recovery 89.8% 90.3%
Average Sulphide Recovery 0% 57.7%
Pre-production Capital (millions) $92.3 $109.4
Sustaining Capital (millions) $26.5 $8.3
Payback (pre-tax) 2.2 years 1.85 years
Payback (post-tax) 2.6 years 1.93 years
Pre-production Period 1 year 1 year
Mine Life 4 years 6.2 years
Closure Period 2 years 2 years
Project Life 7 years 9.2 years
Process Hybrid CIL/Heap Leach CIP
Production Rate 3,300 tpd 1,500 tpd
Operational Period Seasonal (158 days) Year-round (365 days)
Strip Ratio 5.6:1 4.9:1
Access Method Winter Road Tote Road

* The 2016 PEA does not consider silver resources.


Table II: Summary of Gold Price Sensitivity (0.78 US$/CA$)

Gold Price (US$/oz) $1,200 $1,250 $1,300
Pre-tax Cumulative Net Cash Flow ($M) $130.1 $149.4 $168.7
Pre-tax NPV(5%) ($M) $90.8 $106.6 $122.3
Pre-tax IRR 30.8% 34.8% 38.8%


Table III: Summary of Exchange Rate Sensitivity (US$1,250/oz Au)

Exchange Rate (US$/CA$) 0.76 US$/CA$ 0.78 US$/CA$ 0.80 US$/CA$
Pre-tax Cumulative Net Cash Flow ($M) $162.0 $149.4 $137.4
Pre-tax NPV(5%) ($M) $116.9 $106.6 $96.8
Pre-tax IRR 37.4% 34.8% 32.3%

Capital and Operating Costs

Total LOM capital costs are $117.7 million, with $109.4 million in pre-production costs and $8.3 million in sustaining capital. To minimize initial capital costs, the PEA has assumed that modular equipment would be used where possible and that some equipment and facilities will be leased.

The following tables summarize the project capital and operating costs.

Table IV: Pre-Production and Sustaining Capital Costs

Area Pre-Production ($M)* Sustaining ($M)* LOM ($M)*
Site Infrastructure $8.1 - $8.1
Tote Road $11.0 - $11.0
Open Pit Mining** $13.2 $0.03 $13.2
Materials Crushing and Handling $2.0 - $2.0
Process Plant $29.7 - $29.7
Tailings and Water Management $7.9 $6.1 $14.0
Project Indirects $19.8 - $19.8
Owner’s Costs $1.2 - $1.2
Contingencies*** $16.5 $2.2 $18.7
Total $109.4 $8.3 $117.7

* Totals may not add exactly due to rounding.
** Includes capitalized pre-production mining costs. Major mining equipment is leased.
*** Contingencies were factored on an area-by-area basis depending on the detail level of each estimate.


Table V: Operating Costs

Description LOM Average
Mining Cost ($/t mined)* $4.31
Processing Cost ($/t processed) $26.98
G&A ($/t processed) $12.38
Surface Services ($/t processed) $3.80
Equipment Leasing ($/t processed) $1.68

*Not including capitalized pre-production mining costs


ATAC is very pleased with the increased value of the Tiger Deposit shown in this updated PEA relative to the initial 2014 PEA and believes that opportunities exist to further enhance the economics of the project. Some key opportunities include:

  • Significant potential exists to increase the resource base and life expectancy of the project with the exploration of more than 15 early-stage satellite oxide gold targets and geochemical anomalies;
  • Additional geotechnical studies may permit steeper pit slopes, which would further reduce the strip ratio and could potentially allow additional known resources to be accessed;
  • Additional diamond drilling within the sulphide zone would convert inferred resources to the indicated category and could potentially lead to the inclusion of additional known sulphide resources; and,
  • Additional diamond drilling targeting high-grade oxide structures (including 162.0 g/t gold over 2.90 m in Rau-09-019) could better define high-grade domains for inclusion in future resource estimates.

Environmental and Community Engagement

Since 2008, ATAC has completed comprehensive water, heritage, wildlife and fisheries studies. ATAC will continue environmental baseline work and ongoing studies as it advances the Tiger Deposit and other targets throughout the Rackla Gold Project.

Community and First Nation engagement began in 2008, and an Exploration Cooperation Agreement with the First Nation of Na Cho Nyak Dun (“NNDFN”) was signed in 2010. This Exploration Cooperation Agreement with the NNDFN provides a framework within which exploration activities and environmental regulatory process on ATAC’s Rackla Gold Project have been and will continue to be carried out. The Rackla Gold Project lies exclusively within the Traditional Territory of the NNDFN.

Tiger Tote Road

Access to the Rau Trend and Tiger Gold Deposit, 55 km northeast of Keno City, would be by means of a tote road, which ATAC intends to permit and construct to support advanced exploration activities. The proposed tote road would branch off the Hanson Lake Road west of Keno City and is envisioned as a gated, single-lane (5 m wide) and radio-controlled road suitable for vehicles that support advanced exploration at the Tiger Deposit and throughout the Rau Trend. The total length of the tote road would be approximately 68 km and would consist of 53 km of new road and upgrading of 12 km of pre-existing winter road.

For the purposes of this PEA, the full cost of the tote road is included in the pre-production capital costs.

ATAC has been active in preparing for permitting the tote road to the Rackla Gold Project. Discussions regarding access and development of the Tiger Deposit with the NNDFN, local communities and other interested parties has been ongoing for more than seven years. Recent meetings in March, April and June 2016 included several town meetings in Mayo, Whitehorse and Keno City to discuss the proposed tote road. Details of this consultation can be found here on ATAC’s website.

*Please see the disclosure page on this website for the Tiger Deposit Preliminary Economic Assessment and Mineral Resource Estimate disclosure

Drill Results

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