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Broken Hammer Open Pit Mine (in closure state)

Broken Hammer Operation

The Broken Hammer project was discovered by Wallbridge’s exploration team, with the first identification of mineralization in 2003.

Based on the positive results of a 30,000 tonne bulk sample in 2011, Wallbridge initiated a prefeasibility study and permitting process in preparation for the operation of Broken Hammer deposit as a small open pit operation.

Wallbridge received all required permits for the operation of its Broken Hammer open pit project in 2014.  Additionally, in March 2014, Wallbridge entered into a custom milling agreement with Northern Sun Mining Corp. (“Northern Sun”) (TSXV:NSM) for the handling and milling of Wallbridge’s Broken Hammer ore at Northern Sun’s Redstone mill in Timmins, Ontario.    The decision to process the Broken Hammer ore in Timmins was based on the fact that the improved PGM recoveries at the Redstone Mill offset the cost of transportation of the ore for the 350 kilometers distance from the mine.  Stripping operations at the Broken Hammer open pit commenced in June 2014, ore production commenced in July 2014, and construction of the site infrastructure such as roads and water treatment pond was completed in August 2014.  The Broken Hammer open pit project achieved full production in August 2014.

During 2014 and 2015, approximately 1,440,000 tonnes of waste and 295,000 tonnes of ore were mined at the Broken Hammer mine and processed at the mill, representing a 52% increase in tonnes of ore relative to the 2013 mineral reserve estimate.  Increased tonnage was a result of the copper-PGM veins on every bench being thicker and more continuous than estimated in the 2013 mineral reserve estimate as well as slightly higher mining dilution.

During 2014 and 2015, 10,265 tonnes of copper concentrates were delivered to the nearby copper smelter with average grade of 24.15% copper and 60.4 grams per tonne PGM (18.6 g/t platinum, 34.5 g/t palladium and 7.3 g/t gold).  In addition, 180 tonnes of high grade gravity concentrates were produced and shipped to a PGM smelter in Europe with average PGM grade of 1,924 grams per tonne (1,551 g/t platinum, 145 g/t palladium and 228 g/t gold).

Wallbridge completed mining the Broken Hammer deposit by October 30, 2015.  The Project Economics table (Non-GAAP) below summarizes the Broken Hammer project performance against the project forecast at the time the production decision was made. The Broken Hammer operations generated approximately $47.1 million in revenue before any smelting charges and other charges. This revenue is subject to adjustment as one shipment of gravity concentrate to the smelter has not yet been settled. Total costs including mining, transportation, milling, smelting, and general & administrative charges were approximately $44.1 million before capital expenditures, forward sales and foreign exchange contracts, and royalties. The net cash flow excluding prior exploration and evaluation costs, closure plan costs, and other costs is approximately $1.9 million.