Favorable Feasibility for Yukon’s Wolverine Project

- Yukon Zinc Corp. has received an optimized feasibility study of its Wolverine base and precious metals project from Wardrop Engineering that pronounces the project technically and economically viable. The Wolverine project is located in south-central Yukon, 195 km northwest of Watson Lake and 135 km southeast of Ross River. The feasibility study forecasts average annual production of 53,400 mt of zinc, 4,860 mt of copper, 6,010 mt of lead, 4.9 million oz of silver, and 20,200 oz of gold in the zinc, copper, and lead concentrates during the first three years of operation. Capital cost to develop the project is estimated at $183.2 million before a contingency of $24.3 million and working capital of $15 million.

The optimized feasibility study covers all aspects of the development of a 1,400- mt/d underground mine. Diluted proven and probable mining reserves total 5.2 million mt, grading 9.66% zinc, 0.91% copper, 1.26% lead, 281.8 g/mt silver, and 1.36 g/mt gold, sufficient for an eight-year production plan. Conversion of inferred resources into mining reserves could extend mine life an additional three years.

An initial 5 x 5-m ramp access to the upper part of the Wolverine mineral zones was completed in the fall of 2005. This ramp will be rehabilitated as the main production access. A drift-and-fill stoping method will be employed for ore extraction, using trackless diesel mining equipment. Stopes will be mined in 4-m-high horizontal lifts. Stoping blocks will be 20 m high, comprising five stope lifts each. Paste backfill will be employed as the primary fill system.

Extensive test work by SGS Lakefield and Process Research Associates has confirmed the application of dense media separation as an effective pre-concentration step and standard flotation as providing reasonable metal recovery to produce saleable concentrates.

The project development plan includes construction of a 24-km, all-weather gravel road from the property to the Robert Campbell highway. Zinc, copper, and lead concentrates will be trucked 860 km to the Port of Stewart, British Columbia, for transshipment
to smelters in Asia.

As of mid-February 2007, Yukon Zinc had not secured financing for the Wolverine project, and the company remained uncertain as to when infrastructure construction would begin. Then-current planning called for initiation of construction of the all-weather road and mobilization of equipment during the first half 2007. Commissioning of the mill was tentatively scheduled for the fourth quarter of 2008, with full production by the first quarter of 2009.