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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May 2004
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Commission File Number
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FNX Mining Company Inc.
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(Translation of registrant's name into English)
55 University Avenue
Suite 700, Toronto, Ontario
M5J 2H7
(416) 628-5929
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40F.
Form 20-F Form 40-F X
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Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______________
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DOCUMENTS INCLUDED AS PART OF THIS REPORT
Document
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1 Technical Report on Mineral Properties in the Sudbury Basin,
Ontario for FNX Mining Company Inc., an update to March 23, 2004.
DOCUMENT 1
FNX Mining Company Inc
23 March, 2004
TECHNICAL REPORT ON MINERAL PROPERTIES IN
THE SUDBURY BASIN, ONTARIO
FOR
FNX MINING COMPANY INC.
AN UPDATE TO 23 MARCH, 2004
Report Prepared by
James M. Patterson, BA (Hons. Geology), Ph.D., P.Geo., DIC
Vice President Exploration
FNX Mining Company Inc
700, 55 University Avenue
Toronto, Ontario, Canada 23 March, 2004
FNX Mining Company Inc
23 March, 2004
Table of Contents
Page
EXECUTIVE SUMMARY I
1. INTRODUCTION.......................................................1
2. THE SUDBURY AREA ..................................................3
2.1 General...................................................3
2.2 Physiography & Climate....................................3
3. GEOLOGY OF THE SUDBURY AREA........................................3
3.1 The Sudbury Structure.....................................4
3.1.1 Sudbury Breccia..................................4
3.1.2 Whitewater Group.................................5
3.1.3 Sudbury Igneous Complex (SIC)....................5
3.2 Mineral Deposits..........................................6
3.2.1 Contact Deposits.................................6
3.2.2 Offset Deposits..................................6
3.2.3 Footwall Deposits................................7
4. SOURCES, HANDLING AND VERIFICATION OF DATA.........................7
4.1 Data Sources..............................................7
4.2 Data Verification.........................................8
4.3 Sampling Method & Approach................................9
4.4 Sample Preparation & Security............................10
4.5 Sample Preparation & Analyses............................11
4.6 Assay Quality Assurance / Quality Control................12
4.7 Sample Security..........................................13
4.8 Data Verification........................................14
5. FNX MINING -- SUDBURY PROJECT.....................................15
5.1 Infrastructure & Staffing................................15
5.2 Exploration Statistics...................................15
6. SAFETY, HEALTH & ENVIRONMENT......................................16
7. RESOURCES & RESERVES..............................................17
7.1 McCreedy West / Levack...................................17
7.1.1 McCreedy West - Reserves........................19
7.1.2 McCreedy West Resources.........................19
7.2 Levack Resources.........................................20
7.3 Other Properties.........................................20
8. PROPERTIES........................................................21
8.1 McCREEDY WEST MINE PROPERTY..............................21
8.1.1 Location, History, Infrastructure & Environment.21
8.1.2 Property Geology............................... 25
8.1.3 Deposit Types...................................25
FNX Mining Company Inc
23 March, 2004
8.1.4 Contact-Type (Ni + Cu) Deposits.................27
8.1.4.1 Upper Main Deposit.....................27
8.1.4.2 Inter Main Deposit.....................29
8.1.4.3 East Main Deposit......................35
8.1.5 Footwall-Type (Cu + PGM) Targets................37
8.1.5.1 700 Deposit............................37
8.1.5.2 950 Deposit............................39
8.1.5.3 PM Deposit............................ 39
8.1.6 Resources & Reserves............................46
8.1.7 Mining......................................... 46
8.1.8 Recommended Work Program and Budget.............48
8.2 LEVACK MINE PROPERTY.....................................49
8.2.1 Location, History, Infrastructure & Environment.49
8.2.2 Property Geology & Mineralization...............52
8.2.3 Deposits........................................54
8.2.3.1 1300 Deposit...........................54
8.2.3.2 No.7 Deposit & 7 Extension (7 X).......56
8.2.3.3 # 3 Deposit Area.......................58
8.2.3.4 1900 Deposit...........................58
8.2.4 Resources.......................................60
8.2.5 Recommended Work Program and Budget.............60
8.3 NORMAN PROPERTY..........................................61
8.3.1 Location, History, Infrastructure & Environment.61
8.3.2 Property Geology & Mineralization...............62
8.3.3 Targets.........................................65
8.3.3.1 North Deposit..........................65
8.3.3.2 South Zone..............................67
8.3.3.3 2000 Deposit...........................67
8.3.3.4 Sublayer Lens A (Ni)...................71
8.3.3.5 Offset Exploration.....................71
8.3.3.6 Sublayer Exploration...................72
8.3.3.7 Other Exploration (Cougar Zone)........72
8.3.4 Recommended Work Program and Budget.............74
8.4 VICTORIA PROPERTY........................................75
8.4.1 Location, History, Infrastructure & Environment.75
8.4.2 Property Geology & Mineralization...............78
8.4.3 Targets.........................................78
8.4.3.1 No.4 Zone..............................80
8.4.3.2 West Zone..............................80
8.4.3.3 No. 1 West Zone........................83
8.4.3.3.1 No. 1 West Zone - Shallow....83
8.4.3.3.2 No. 1 West Zone - Deep.......83
8.4.3.4 No.2 West Zone.........................83
8.4.3.5 Far West Zone..........................86
8.4.3.6 Powerline Deposit......................86
8.4.3.7 Offset Dyke Targets....................87
8.4.4 Recommended Work Program and Budget.............89
FNX Mining Company Inc
23 March, 2004
8.5 KIRKWOOD PROPERTY....................................... 90
8.5.1 Location, History, Infrastructure & Environment.90
8.5.2 Property Geology & Mineralization...............92
8.5.3 Targets.........................................92
8.5.3.1 West Zone..............................92
8.5.3.2 Lower East and 3800....................94
8.5.4 Recommended Work Program and Budget.............94
8.6 NORTH RANGE FOOTWALL ....................................94
9. CONCLUSIONS & RECOMMENDATIONS.....................................97
10. BUDGET...........................................................102
11. CERTIFICATE......................................................104
REFERENCES................................................................105
APPENDICES: 1 Abbreviations & Conversions
FNX Mining Company Inc
23 March, 2004
List of Tables
Table Page
1 Sudbury Project Properties - Production History 1
2 Status of Drilling Program at 23 March, 2004 16
3 Summary of Mineral Reserves (at December 31, 2003) 18
4 Summary of Mineral Resources - McCreedy West/Levack
(as at March 23, 2004) 18
5 Sudbury Project Properties 21
6 McCreedy West - Graded Assays Inter Main Deposit
(within Reserve Area) 31
7 McCreedy West: PM Deposit - 2003/04 Graded Assays 41
8 McCreedy West: Reserves 46
9 McCreedy West: Resources (in addition to reserves)
(as at March 23, 2004) 46
10 Levack: 1900 Deposit - Graded Assays 2002 drilling 59
11 Levack: Summary of Mineral Resources (at Dec. 31, 2003) 60
12 Norman: North Deposit - Graded Assays (2003 drilling) 65
13 Norman: 2000 Deposit - Graded Assays (2003/04 drilling) 68
14 Norman : Sublayer Lens A- Graded Assays 71
15 Norman : Offset Exploration - Graded Assays 71
16 Norman: SIC Exploration - Graded Assays 72
17 Norman: Cougar Zone - Graded Assays 72
18 Victoria: Powerline Deposit- Graded Assays 87
19 Sudbury Project -Budget 103
FNX Mining Company Inc
23 March, 2004
LIST OF FIGURES
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Figure # Title Page
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1 Sudbury Basin: Simplified Geology and Property Locations 2
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2 McCreedy West Mine - Location 24
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3 McCreedy West Mine - Deposit Target Areas 26
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4 McCreedy West Mine - Upper Main Deposit 28
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5 McCreedy West Mine - Inter Main Deposit 34
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6 McCreedy West Mine - East Main Deposit 36
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7 McCreedy West Mine - 700 Deposit - Detail of Vein 38
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8 McCreedy West Mine - PM Deposit 45
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9 Levack Mine - Location 51
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10 Levack Mine - Longitudinal Section showing Targets Areas 53
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11 Levack Mine - 1300 Deposit 55
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12 Levack Mine - No.7 Deposit & 7 Extension (7X) 57
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13 Levack Mine - 1900 Deposit 59
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14 Norman Property - Location 63
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15 Norman Property - Longitudinal Section showing Target Areas 64
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16 Norman Property - North Deposit 66
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17 Norman Property - 2000 Deposit 70
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18 Norman Property - Surface Geology & Mineralized Zones 73
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19 Victoria Property - Location Map 77
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20 Victoria Property - Surface Geology & Target Areas 79
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21 Victoria Property - Longitudinal Section & Targets 81
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22 Victoria Property - West Zone Below Mined Area (3000L) 82
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23 Victoria Property - No.2 West Zone 85
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24 Victoria Property - Powerline Deposit 88
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25 Kirkwood Property - Location 91
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26 Kirkwood Property - Target Areas 93
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27 North Range Footwall - Mines & Target Area 96
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FNX Mining Company Inc.
23 March 2004
Executive Summary
This update report has been prepared in conjunction with senior technical
personnel in the Sudbury exploration offices of FNX Mining.
On 10 January, 2002, Fort Knox Gold Resources Inc.( the predecessor company to
FNX Mining Company Inc. (the "Company" or "FNX"), a public Company trading on
the Toronto Stock Exchange (FNX), signed an Option to Purchase Agreement with
Inco Limited (Inco) whereby FNX could acquire a 100% interest in five Sudbury
Basin mineral properties.
The property package includes former producing mines known as the Victoria,
McCreedy West, Levack, Norman and Kirkwood mines. A Joint Venture was formed,
effective 10 January, 2002, between the Company and Dynatec Corporation Inc.
The Joint Venture, owned as to 75% by the Company and as to 25% by Dynatec,
will explore, develop and, if economically appropriate, mine these properties.
The Sudbury Joint Venture (SJV), having exceeded the required $30.0 million in
expenditures on the Properties by December 1, 2003, is now vested and owns
100% interest in the mineral rights to the five Properties.
Dr. James M. Patterson, BA Hons Geology, Ph.D., P.Geo., DIC., Vice President
of the Company, prepared the original Technical Report, dated 7th November,
2001, while an independent consultant, prepared the update reports dated 31st
May, 2002; 9th May, 2003 and is the Qualified Person under NI 43-101
responsible for this current technical report.
The subject properties, comprising some 4,500 acres (1,820 hectares), are all
located within 35 km of downtown City of Greater Sudbury. Located in
Northeastern Ontario some 400 km from Toronto and with a population of
165,000, Sudbury is the major centre in northeastern Ontario for mining,
medicine, education, business and commerce, and government administration.
Access is excellent with the city being well served by air, rail and road.
The area has a history of nickel and copper mining stretching back over 100
years with two of the world's major nickel producers, Inco Limited and
Falconbridge Limited having been active in the area since 1902 and 1928
respectively. These companies have extensive mining, smelting and refining
operations in the area and these constitute the largest fully integrated
mining complex in the world. The nickel-copper-platinum group metals
(Ni-Cu-PGM) orebodies at Sudbury constitute the world's largest known
concentration of Ni-Cu sulphides. Platinum Group Metals, gold and cobalt are
among important byproducts recovered from these ores.
FNX Mining Company Inc.
23 March 2004
The Sudbury Basin, the major topographic feature of the area and forming an
elliptical ring some 60 km in the northeast direction by 28 km wide, is also
the most important feature of economic interest. This Basin, also referred to
as the Sudbury Structure, is the geological expression of events triggered by
the impact of a giant meteorite approximately 1.8 billion years ago and which
led to the formation of the well known and economically important Ni-Cu-PGM
deposits upon which Sudbury has been built.
Modeling of the Sudbury Structure suggests that the original crater caused by
the meteorite was more than 150 km in diameter. Erosion has exposed the
smaller, lower portion of the crater and tectonic squeezing and thrusting has
deformed the once circular structure into the elliptical shape of today.
Extensive thrusting of the South Range exposes a deeper level of the Sudbury
Igneous Complex (SIC) compared to the North and East Ranges.
All five of the project areas lie within the confines of the Sudbury Structure
that straddles the boundary between the Archean Superior Province and the
Early Proterozoic Southern Province. The Late Proterozoic Grenville Province
and its northern limit, the Grenville Front, lie some 10 km south of the
Sudbury Structure.
The Superior Province Archean rocks to the north of the Sudbury Structure
consist mainly of granitic plutons and gneisses and minor volcanic rocks of
the Levack Gneiss Complex which has been dated at 2.7 billion years and which
were subsequently deformed and metamorphosed.
South of the Superior Province is the younger Southern Province of Early
Proterozoic age represented by metavolcanic and metasedimentary rocks
deposited between 2.49 billion and 2.2 billion years ago. These rocks are
extensively intruded by younger sills and dykes of Nipissing Diabase,
(approximately 2.2 billion years).
The Mineral Deposits associated with the Sudbury Structure constitute the
largest known concentration of nickel-copper sulphides in the world. Total
reserves and production are estimated at approximately 1.6 billion tonnes of
ore. Metal production to date from these deposits exceeds 8.5 million tonnes
of nickel and 8.4 million tonnes of copper. By-products from this production
include cobalt, platinum, palladium, gold, silver, osmium, iridium, rhodium
and ruthenium.
The vast bulk of sulphides in the Sudbury ores consist essentially of varying
proportions of pyrrhotite, chalcopyrite and pentlandite with varying amounts
of other Cu-, Ni-, Co-, PGM-bearing minerals and gold.
Three main types of ore deposits, Contact, Footwall and Offset Dyke types are
recognized.
The Contact Deposits occur along the lower contact of the SIC in areas where
Sublayer is preserved in embayments in the footwall contact. These embayments
are the topographic expression of what were originally troughs or rills in the
wall of the impact crater (major lunar craters commonly exhibit this feature)
and, having acted as traps for Sublayer material, they account for the
pipe-like geometry of many of the Sudbury orebodies. Terraces in the crater
wall have also acted as Sublayer traps and many ore zones occur at sites where
there is a flattening of the footwall to form ledges or terraces where
sulphides are concentrated.
FNX Mining Company Inc.
23 March 2004
Contact deposits on the South Range have little interaction with the footwall
rocks. The footwall contact is generally sharp and inclusions of footwall
material in the sublayer are minor. On the North Range the contact deposits
commonly penetrate into the brecciated granitic footwall forming a granite
breccia-type ore below the sublayer. Copper and precious metals tend to
concentrate in the granite breccia-type ore. All the properties within the
Company's Sudbury Project include contact type Cu-Ni deposits.
Footwall Deposits are offshoots of Contact deposits. They tend to occur more
on the North Range than the South Range. Brecciated footwall rocks adjacent to
contact Ni-Cu sulphide deposits can act as a conduit for mineralizing fluids
and as a medium for deposition of sulphides. A distinct metal zoning occurs
between Contact Deposits and the Footwall Deposits in that the Contact
Deposits have low Cu/Ni ratios and low PGM content compared to the high Cu/Ni
ratios and enriched PGMs in the Footwall Deposits. These observations can be
applied in exploration. A contact deposit with low Cu/Ni ratios and PGM
content indicates the possible presence of a high Cu high PGM footwall deposit
in adjacent footwall breccia. Footwall deposits occur on the North Range in
the McCreedy West and Levack properties.
The Offset Deposits are located in the radial and concentric quartz diorite
offset dykes and occur as thin, steeply dipping sheets to steeply plunging
pipes in barren to weakly mineralized quartz diorite. The deposits consist of
cores of inclusion-bearing sulphide ore surrounded by quartz diorite with
variable sulphide dissemination and confined within the width of the offset,
which is commonly less than 100 m. Offset-type mineralization occurs on the
Norman and Victoria properties.
The properties included in the package have all been mined by Inco. Two of the
deposits, McCreedy West (15.8 million tons mined) and Levack (66.6 million
tons), were substantial mines. The other properties each had total production
less than 6 million tons.
Inco accumulated a vast amount of data (over 8,000 boreholes) during their
exploration and mining of the subject properties and these data were made
available for examination by FNX. The information reviewed consists primarily
of diamond drillholes and associated sampling, assaying, plans and sections.
The essential details of these data are not in the public domain and originate
exclusively from Inco data files. Review of data has focused primarily on the
mineralized areas at each of the properties.
The original Patterson Report (dated November, 2001) was based solely on
information generated and provided by Inco Limited. Inco has not guaranteed or
warranted the accuracy or completeness of the data and information that it
provided to FNX and expressly disclaims any and all liabilities for any
representations, warranties or omissions in the written information or oral
communications made to FNX and any subsequent communications made by FNX
regarding the data or the properties.
FNX Mining Company Inc.
23 March 2004
FNX and its consultants have independently verified the drill assay data
received from Inco. The Company has also completed comprehensive studies of
the detail assay records, has re-graded portions of the boreholes that
intersected the mineralized zones of interest and produced longitudinal cross
sections of the mineralized zones. Dr. Patterson conducted a detailed audit of
the Company's borehole grading calculations and confirmed that the results
accurately represent the graded assay intersections.
Spiteri Geological and Mining Consultants Inc. (SGM) was retained by FNX to
review Inco's information and procedures and to conduct an independent check
sampling and assay program of Inco's assay methods and results. The SGM
reports, dated 27 July, 2001 and 1 November, 2001, have been filed.
Since inception of the FNX-Dynatec Company Sudbury Joint Venture exploration
program a significant amount of new data has been generated on the Properties.
From March 2002 to March 23, 2004, a total of 570,000 ft of surface diamond
drilling has been completed in 458 drill holes. As access has been gained to
the underground workings, more of the drilling at McCreedy West has been
carried out from underground locations and to date 252 underground holes have
been completed for 118,165 ft. The current rig disposition is 7 surface and 5
underground rigs.
Exploration personnel operating out of two offices in the Sudbury area now
number 35, comprising 22 geoscientists, 7 technicians and 6 support staff. In
addition to local administration and management the personnel in the Sudbury
office manage programs at Norman and Victoria while those at Levack, service
the exploration at the McCreedy Mine property and the Levack and North Range
Footwall projects.
The Kelly Lake Road core facility in Sudbury is now dedicated to Norman and
Victoria core while the Levack facility handles the core and sample load from
the McCreedy West mine underground operations and also from the North Range
exploration projects. .
Both Sudbury Project offices have been equipped with the necessary computer
software and hardware required to manage an aggressive exploration program
such as that being undertaken by the Company.
Our Joint Venture partners, Dynatec Corporation Inc, have set up an office,
warehouse, machine shops and other required facilities at the McCreedy West
mine site and employ some 111 persons.
Ore shipments to the Inco Clarabelle mill began in May 2003 and, following a 3
month hiatus, were reinstituted on a regular basis in late September 2001.
Approximately 103,000 tons of ore, 93% of which was nickel ore, were delivered
to the mill in the reporting period.
FNX Mining Company Inc.
23 March 2004
The FNX corporate head office remains at 55 University Avenue, Toronto and it
is anticipated that the current staff of seven persons will be supplemented by
two or three additional key appointees.
As activities progressed to the feasibility and mining stages much more
activity has taken place on the environmental aspects of the program. All
baseline (characterization) studies have been completed on all properties and
additional information compiled and filed in support of closure plan
amendments at McCreedy West and Levack.
As personnel levels have increased a Joint Health & Safety committee has been
established to ensure the development and maintenance of a healthy and safe
workplace for all personnel.
FNX has implemented a Safety, Health and Environmental Policy whereby the
Company states its commitment to conducting its business in a safe and
environmentally responsible manner.
The McCreedy West Mine Property (804 acres, 325.4 ha) is located 34 km
northwest of Sudbury in Levack Township. The property has been explored since
the early 1900s and mining commenced in 1974. Production to mine closure in
1998 totaled 15,758,000 tons averaging 1.70% Cu, 1.44% Ni, 1.3 g/ton TPM. The
Mine is located at the western limit of an extensively mineralized 8.5 km long
portion of the North Range of the SIC. This part of the North Range
encompasses all of the major Inco and Falconbridge past and current producing
mines of the North Range (Strathcona, Coleman, Levack, McCreedy East, Onaping,
McCreedy West, and Hardy).
The Joint Venture inherited well maintained surface and underground
infrastructure. The Main Ramp completely reconditioned by the Joint Venture
and all necessary ventilation, electrical and pumping facilities are
operational. The 1600 Level track haulage drift has been completely
reconditioned to the Levack Mine. Mine development at McCreedy West includes
access to the Inter Main Deposit from both the 950L and the 1450L,
Mining has commenced in the Upper Main, East Main and Inter Main contact-type
nickel-rich deposits while stoping is continuing on the 700 footwall-type
copper-rich deposit. Currently mining is at the rate of 650 tons per day and
it is expected to achieve the target of 1000 tpd by mid 2004.
Ore shipments to the Clarabelle Mill of Inco Limited began in May 2003 but
were interrupted by a labour dispute. Shipments to the mill have been
continuous since their resumption in October 2003. Shipments to date total
approximately 95,000 tons of nickel ore and 8,000 tons of copper- total
precious metal ore. The McCreedy West ore is mined, hauled to surface via the
ramp, crushed and sampled on site and then trucked to the Inco central
Clarabelle Mill complex, a distance of approximately 30 km.
FNX Mining Company Inc.
23 March 2004
Our JV mining partner, Dynatec Corporation, has constructed all the necessary
office, machine shops, an electrical substation and crusher/sampling system to
support the exploration and mining activity at the mine site.
Mineralization occurs as Contact- and Footwall-type deposits. Previous
operations exploited both Contact Cu-Ni mineralization along the base of SIC
and within the granite breccia-filled embayment, and Footwall Cu-Ni-PGM
mineralization in the footwall Sudbury Breccia environment.
The Contact Deposits are related to a suite of sulphide and inclusion-rich
sublayer norites and leucocratic granitic breccias. The orebodies occupy
embayment structures that penetrate into the footwall of the SIC. These
contact deposits are typified by Ni contents much higher than the Cu content,
and contain negligible precious metal values. The depletion in Cu and PGMs in
these zones is reflected in the high Cu and PGM values in the adjacent
Footwall Deposits and may be a useful exploration guide.
The exploration program has focused on testing and upgrading the previously
identified near-term production targets through a diamond drilling program.
This program has been successful in that independently audited resource
estimates have been established for four of the previously known zones at
McCreedy West and also for a new discovery. Reserves, adequate to support a
mining rate of 1000 tpd, have been estimated at McCreedy West and additional
resources discovered.
The Upper Main Ni-Cu Deposit was previously mined from the 250 ft Level to the
600 Level but mineralization extends 100 to 150 ft below the 600 Level, and
was the target of FNX drilling. FNX drilling established an indicated resource
of 48,000 tons grading 1.9% Ni and 0.5% Cu with a further 128,000 tons grading
1.4% Ni and 0.4% Cu in the inferred category. In July 2003, 36,100 tons of the
indicated resource on the contact lens was upgraded to a probable reserve
grading 0.36% Cu, 1.61% Ni. Mining was initiated at the Upper Main Deposit in
May 2003 and, to 23 March 2004, approximately 23,000 tons of ore grading 0.3%
Cu and 1.2% Ni were mined.
The East Main Ni-Cu Zone occurs between 200 and 920 ft levels, east of the
main ramp. It is characterized by massive to inclusion-rich massive sulphide
situated at or near the base of the SIC contact. A portion of this zone was
mined above the 950 Level in 1997. In February 2003, FNX estimated an
indicated resource for the East Main of 167,000 tons at 0.35% Cu, 2.54% Ni. In
July, 2003, a subset of this resource was upgraded to a probable reserve of
131,000 tons grading 0.35% Cu, 2.27% Ni. Mining has commenced on the 420 and
450 Levels and to date approximately 29,500 tons grading 0.4% Cu and 2.1% Ni
have been mined from the East Main.
Following the discovery of the Inter Main Deposit in 2002, an aggressive
follow-up drilling program, from both surface and underground platforms during
2003 established an indicated resource (independently audited) of 866,000 tons
grading 0.24% Cu, 2.02 % Ni for the Inter Main. During the period April 1,
2003 to March 23, 2004, 135 holes were completed at the Inter Main from, for a
total of 59,200 ft. These holes have helped to define the Inter Main Deposit
at 50 ft centres over half of the deposit, as currently known, and 80 to 100
ft centres over the remainder of the deposit.
FNX Mining Company Inc.
23 March 2004
In July, 2003, following additional in-fill drilling, this resource was
upgraded to an independently audited mining reserve of 1,070,000 tons grading
0.21 % Cu and 1.88 % Ni. An additional inferred resource of 112,000 tons at
0.53% Cu and 2.31% Ni was also identified at this time along the western
margins of the Inter Main.
Mining has now commenced on the Inter Main Deposit in sills leading from the
950 Level and 1400 Level Inter Main access ramps. By the second Quarter of
2004, these ramps should connect, and mining of the Inter Main Deposit can
begin in earnest. To date some 47,000 tons of ore have been mined in the Inter
Main at a grade of 0.3% Cu and 1.8% Ni.
Increased definition of the Inter Main Deposit towards the southwest became
possible late in 2003 as development of suitable underground drilling
platforms progressed. A resource estimate for that portion of the
mineralization occurring between 1300 and 1700 levels defined an inferred
resource of 505,000 tons grading 1.7% Ni and 0.23% Cu. As exploration has
progressed in this direction it appears that the Inter Main may merge into the
top part of a deposit formerly referred to as the Boundary Deposit.
The Footwall Type Cu-Ni-PGM vein deposits are represented by the 700; 950 and
PM Deposits.
The 700 Deposit deposit, located between the 500 and 700 Levels, is part of an
eastward-plunging and south-dipping structural zone contained within an area
of footwall Sudbury Breccia that extends from surface to a depth of at least
3000 ft. Mineralization within the 700 Deposit is restricted to sharp walled
veins which cross cut both the Sudbury Breccia matrix and clasts.
Individual veins, ranging in thickness from several inches up to 13 ft, are
composed of massive chalcopyrite with accessory pentlandite, millerite and
pyrrhotite, and have strike and dip lengths ranging from 25 to 350 ft. Prior
to the mine closing in 1997, 41,000 tons of ore were produced from the narrow
veins and averaged 5.35% Cu, 0.56% Ni, 4.0 g/t TPM.
In February 2003, FNX estimated an indicated and measured resource in the 700
Deposit of 139,000 tons at a grade of 6.1% Cu, 0.81% Ni, 0.18 oz/ton (5.6 g/t)
TPM. In July, 2003, a subset of this resource was upgraded to a probable
reserve of 119,000 tons grading 6.83% Cu, 0.75% Ni, 0.17 oz/ton (5.3 g/t) TPM.
Mining of the veins by narrow vein mining methods commenced early in 2003 with
production to 23 March, 2004 amounting to 10,300 tons grading 6.53% Cu, 0.7%
Ni, 4.1 g/t TPM. Drilling in the 700 Deposit in 2004 will be for production
purposes.
FNX Mining Company Inc.
23 March 2004
The 950 Deposit is located to the east of the 700 deposit and consists of a
zone of massive chalcopyrite, pentlandite and pyrrhotite veins ranging in
thickness from 4 inches to 6.5 ft. The veins appear to have the same grade and
physical characteristics as the 700 veins. The FNX 2002 program culminated in
a resource estimate of 520,000 tons grading 1.4% Cu, 0.3% Ni, 5.3 g/t TPM in
the indicated category.
Though no additional work was carried out during the report period, a short
exploration ramp will be completed into the 950 Deposit during 2004 and the
information generated from this ramping, together with the associated drilling
program, will permit an upgrade of the indicated resource to a reserve
category later in the year.
The PM Deposit occurs in footwall Sudbury Breccia located between the 1,450
and 2,500 ft Levels. It consists of a zone (33 ft to 200 ft thick) of narrow,
irregular Cu-PGM stringers, joint fillings and disseminations hosted within a
wider zone of Sudbury Breccia. The deposit dips to the south at 35-45(degree)
and has a strike length of approximately 900 ft. A plunge direction has yet to
be confirmed but appears to be to the east at 35(degree).
From April 1, 2003 to March 23, 2004, FNX completed 85 underground holes at
the PM Deposit for a total of 51,039 ft, and a grand total of 118 drillholes
for 88,298 ft since inception of the program. Most of this drilling was
completed from the 1600 and 950 Levels with the objective of testing the
continuity of the mineralization; increase confidence levels and add to the
understanding of the geologic controls to mineralization.
In 2004, an additional 60,000 ft of drilling is planned for the PM Deposit.
This drilling will provide increased definition of most of the deposit at 50
to 80 foot centres, and attempt to expand the limits of the known deposit.
The success of the 2003 and previous drilling programs, led the Sudbury Joint
Venture to initiate an advanced exploration and bulk sampling program in mid -
2003. A PM access ramp was driven from the 1500 Level of the main ramp, and by
the end of March 2004, 700 ft of this ramp had been completed. In 2004, the
access ramp will be driven across the main portion of the PM Deposit,
remaining in mineralization throughout. Cross cuts will be driven at various
intervals along the access ramp to permit larger bulk samples to be collected.
The increased geologic knowledge derived from the bulk sample and drilling
data, will provide the basis for a mineral resource estimate, which, when
combined with the metallurgical information generated, will lead to the
completion of a final feasibility study by summer 2004.
The initiation of production at McCreedy West within 14 months of the
commencement of the program was a major achievement. Steady production of 1000
tpd is imminent and the target for 2004 is 300,000 tons of ore.
FNX Mining Company Inc.
23 March 2004
Exploration continues to expand the Inter Main and it is anticipated that the
completion of the PM exploration ramp and associated bulk samples will provide
a long term base for continuing mining at McCreedy West.
The planned exploration program for 2004 is estimated at $4.6 million.
The Levack Mine Property (811 acres, 328.4 ha) is located 34 km northwest of
Sudbury in Levack Township and immediately adjacent to the McCreedy West
property. Access is via a year round highway and a rail spur passes within 1
km of the property site.
The Levack Mine, the first deposit discovered on the North Range, was
discovered in 1887. Production started from the No.1 inclined shaft in 1915.
Following reopening in 1937 the three-compartment No. 2 Shaft was sunk to a
depth of 4,050 ft During the 1930s and 40s additional orebodies were
discovered. The Mine operated continuously from 1937 until closing in 1997.
The total ore production was 66,600,000 tons grading 1.31% Cu, 2.00% Ni, 1.3
g/t TPM.
During 2003, FNX focused on targeting under-explored contact and footwall
zones near the #3 and #7 Orebodies. In the first quarter of 2004, FNX
initiated an underground and surface drilling program at Levack designed to
better define the 1300 and 1900 Deposits. UTEM surveys were completed on most
of the 2003 holes as an aid for advancing exploration objectives.
A major development at the Levack Mine in 2003 was the evaluation of the Inco
mineral resource inventory (MRI) and confirmation of resources. Integration of
these data with those defined by FNX modeling of the 1300, 1900 and No.7
Extension Deposits resulted in a total indicated and measured resource of 4.6
million tons at 1.03% Cu, and 2.06% Ni. The total inferred resources are 1.0
million tons at 0.9% Cu, and 2.0% Ni. These resource estimates were completed
in-house by FNX personnel and consultants and were reviewed and audited by
independent consultants Roscoe Postle Associates.
The No. 2 Shaft remains accessible and usable, subject to refurbishing, to
approximately the 3,600 ft Level. A ventilation system using the available
raises, drifts and shafts is in use to service the McCreedy East Mine (Inco)
return air. For the purposes of access and drilling, the 1600 Level has been
rehabilitated from the McCreedy West Mine main ramp to the Intermediate - 1300
Deposit area (11300E) at the Levack Mine.
The orebodies at the Levack Mine are contained within terrace structures that
have acted as traps for the sublayer material that hosts sulphide
mineralization. Brecciated granodiorite, granodiorite gneiss and migmatites of
the Levack complex form the footwall to the deposits and are referred to as
megabreccia.
FNX Mining Company Inc.
23 March 2004
Cu-Ni-PGM sulphide mineralization occurs in several zones which penetrate the
footwall rocks to varying degrees. The orebodies consist of thick lenses and
stringers of massive Cu-Ni sulphide situated at or near the contact between
granite breccia and the Levack footwall complex. Each zone has an area of
associated Cu-PGM-rich sulphides that occurs as a stockwork of massive
stringers in the footwall Sudbury Breccia.
This property is covered by the joint Inco-Falconbridge environmental closure
plan, which also covers McCreedy West. As activity at Levack accelerates the
environmental considerations are becoming increasingly important.
A major development at the Levack Mine in 2003 was the evaluation of the Inco
mineral resource inventory (MRI) and confirmation of resources. Integration of
these data with those defined by FNX modeling of the 1300, 1900 and No.7
Extension Deposits resulted in a total indicated and measured resource of 4.6
million tons at 1.03% Cu, and 2.06% Ni. The total inferred resources are 1.0
million tons at 0.9% Cu, and 2.0% Ni. The identification of these resources
has provided the motivation for advancing surface and underground exploration
in anticipation of a mine re-opening in 2004.
The Contact - Type Deposit targets include the 1300 Deposit which has a strike
length of 650 ft, a dip length of 590 ft and dips 45(degree) to the south. It
is characterized by massive to inclusion-rich massive sulphide stringers
consisting of pyrrhotite, pentlandite and chalcopyrite, and is hosted by
sublayer norite and granite breccia sublayer. Significant FNX intersections in
the 1300 Deposit include 0.5% Cu, 2.1% Ni over 56.7ft and 0.7% Cu, 1.6% Ni
over 79.1ft
The 1300 Deposit will be the focus of much of the 2004 exploration drilling
program and the 20,000 ft planned for this drill program (from both surface
and underground platforms) should be sufficient to upgrade the inferred
resource of 349,000 tons at 0.7% Cu, 1.9% Ni to a reserve category..
The No. 7 and & Extension Deposits of Ni-Cu contact-type mineralization are
located down dip and to the west of the Levack Main Orebody. Partially mined
prior to the Levack Mine shutdown, these contact deposit contains significant
resources and will be an initial focus for production.
The irregular nature of the mineralization in this deposit is intensified by
the occurrence of thickened units of granite breccia which appear to be
related to a disruption and displacement of the ore. The dominant host rocks
for the pyrrhotite-pentlandite-chalcopyrite-pyrite mineralization are the
granite breccia and the sublayer norite.
The No. 7 Extension (No. 7X), has similar geology and ore mineralogy to the
No. 7 Deposit, but is less intensely drilled. The mineralization appears to be
associated with an elongate, trough-like zone approximately 200 ft wide and
extending 1000 ft down dip. Thirty-seven Inco boreholes with 48 intersections,
26 of which are greater than 10 ft, cut the zone, and assays show that Ni
values exceed copper values by a ratio of at least 2:1 with negligible PGE
value.
FNX Mining Company Inc.
23 March 2004
In 2003, three holes were completed into the No.7 Deposit. Significant
intersections from this drilling include 0.15% Cu, 1.2% Ni, over 36.1 ft, and
0.69% Cu, 2.51% Ni, 0.94 g TPM over 15.5 ft.
The 2004 drilling on the No. 7 Extension (9,600 ft) will focus on defining the
upper portions of the deposit and will be partially completed from surface,
and partially from the 1600 Level in the mine. The focus of this drilling
campaign will be to provide the data necessary to upgrade the No. 7 Extension
inferred resource of 123,173 tons grading 0.23% Cu, 1.25% Ni..
The Footwall - Type Deposit mineralization is represented by the No.3 Deposit,
which is situated 3,600 ft east of the No. 2 shaft and up dip from the Levack
No.3 Orebody. It has been explored by two historic surface drill holes and
several underground exploration drill holes.
The 2003 FNX drilling program was designed to test the down dip proximal
footwall to the No. 3 Deposit in an attempt to locate any associated Cu-Ni-PGE
mineralization. This drilling intersected several narrow Cu-Ni-PGE - rich
veins which assayed 2.22% Cu, 0.93% Ni, 5.45 g TPM over 12.2 ft.
Two other holes were drilled as follow-up to this mineralization. One of these
holes was faulted off (Fecunis Fault) prior to intersecting target depth,
while the second did not intersect any significant mineralization.
In 2004, an additional 7,000 ft of drilling has been allocated to test the
relatively untested, though highly prospective, footwall environment around
the No. 3 Orebody.
The 1900 Deposit is regarded as a hybrid of the Ni-rich and Cu-Ni-PGE-rich
deposit types. This 650 ft by 150 ft deposit is hosted in a mixed unit of
granite breccia with Sudbury Breccia, and is overlain by a 450 ft wide
meta-gabbroic-ultramafic block, upon which the 1300 Deposit is positioned.
Below the deposit, the footwall rocks are composed of granodiorite gneiss and
Sudbury Breccia.
Mineralization within this deposit occurs as narrow fracture controlled
veinlets, and locally massive zones consisting of
chalcopyrite-pyrrhotite-pentlandite with minor millerite. The mineralization
appears to be dominantly associated with granite breccia in the south-west,
but in the north-east it is associated more with the Sudbury Breccia.
The 1900 Deposit contains significant PGE mineralization and narrow (< 3 ft)
mineralized intercepts with enriched Cu and PGM values, typical of the
footwall vein- type Cu-PGE mineralization, occur in the lower parts of some of
the boreholes.
In 2004, 20,000 ft of drilling, budgeted at $2.5 million, have been allocated
for testing both the 1300 and 1900 Deposits.
FNX Mining Company Inc.
23 March 2004
The Norman Property (1,111 acres, 449.8 ha), is located in Norman Township 32
km north-northeast of Sudbury.
The property has been intermittently explored since 1971 by surface drilling
and geological mapping. The former Whistle open pit mine is located on the
property and interrupted mining between 1988 and 1997 produced 5.71 million
tons grading 0.33% Cu, 0.95%Ni and 0.034% Co. The Whistle contact-type deposit
was located in an embayment from which the Whistle Offset (formerly referred
to as the Parkin Offset) trends in a north-eastward direction away from the
SIC.
The Offset extends north-eastward from the Whistle embayment as a vertically
dipping dyke varying in thickness from 50 ft to greater than 300 ft, and
consisting of irregular, discontinuous lenses of quartz diorite within a wider
zone of Sudbury Breccia.
Three zones of Cu-Ni-PGM mineralization have been discovered along the
Whistle Offset. The mineralization occurs as discontinuous and irregular veins
and lenses of massive chalcopyrite as well as chalcopyrite stringers, fracture
fillings and disseminations.
The North Deposit has been exposed at surface over a 100ft by 300ft area.
Mineralization occurs as a set of sub-parallel, north-east trending,
sub-vertical lenses hosted within the like-trending Whistle Offset dyke.
Lenses consist of a concentration of Cu-PGM-Ni-bearing veins and lesser
disseminated mineralization within inclusion quartz-diorite and metabreccia.
Massive chalcopyrite veins range from inches to 15 ft wide.
FNX's exploration program on the North Deposit from April 2003 to the 23 March
2004 consisted of detailed geological interpretation and diamond drilling.
Four diamond drill holes (2,809 ft) were completed to verify the geological
model and provide addition information within areas of widely spaced drilling.
A geological and mineral interpretation completed in 2003 predicts a deposit
of 600 ft strike length and 600 ft vertical depth extent
Near term work on the North Deposit will consist of detailed resource
estimation and pre-feasibility study. Some additional drilling will to test
for predicted high grade lenses within the North Deposit which may not be
fully delineated. Additionally, there is potential for expansion of the North
Deposit to both the northeast and southwest
Exploration on the South Zone by FNX to date has been limited to geophysical
surveying and two diamond drill holes (1675 ft) beneath the known
mineralization in 2002. No work was undertaken on the South Zone in 2003.
FNX Mining Company Inc.
23 March 2004
Future exploration on the South zone will consist of detailed geological
modeling, interpretation and diamond drilling, if warranted.
The 2000 Deposit lies at a vertical depth of 1600 to 2500 ft from surface,
below the Whistle embayment, which hosted the Ni-rich contact mineralization
mined in the Whistle pit. The 2000 Deposit mineralization consists of Cu + PGE
+ Ni rich chalcopyrite +/- millerite +/- pentlandite veins, stringers,
fracture fillings and disseminations within Whistle Offset dyke below the
sublayer embayment.
A total of 26 holes (75,279.2 ft) has been completed by FNX since the last
report dated May 9, 2003, yielding impressive intersections including: 13.8%
Cu, 1.0% Ni, 8.1 g/t TPM over 114.4 ft in hole FNX4130, within which an 18.8
ft section graded 19.9% Cu, 3.1% Ni, 12.9 g/t TPM
FNX drilling has established significant mineralization over a 900 ft by 600
ft area. This phase of drilling has demonstrated the continuity of a higher
grade body within the mineralized envelope and has supported the evolving
geological interpretation and deposit model.
Future exploration on the 2000 Deposit in 2004 will include: limited diamond
drilling within the known deposit in order to provide sufficient information
to support a decision to proceed with advanced underground exploration and
drilling to establish the limits of the mineralized system.
A total of 13 holes (9596.7 ft) was drilled to test contact style Ni-rich
lenses in the sublayer proximal to the Whistle Pit at a vertical depth of 400
to 550 ft. Lens A consists of three known tabular bodies in close proximity,
the largest is currently 375 ft strike length by 200 ft dip length.
Significant intersections include 0.2% Cu, 1.0% Ni over 262.7 ft, and
including 0.2% Cu , 2.7% Ni over 15.1 ft.
Fifteen short holes (581.4 ft) were drilled to test the depth extent of
surface Ni mineralization in the sublayer immediately to the east of the
Whistle pit. These intersections delineated a small tonnage deposit
Other targets included the Cougar Zone, an as yet undelineated body of
mineralization that has repeatedly been intersected by drillholes targeting
the 2000 Deposit. The mineralization consists of chalcopyrite veins +/-
millerite +/- PM minerals. Hole FNX4071 intersected 4.0% Cu, 0.1% Ni over 18.3
ft.
The Norman property includes approximately 2 kilometres of Sudbury Igneous
Complex contact which has seen limited exploration in the past. . Four holes
(8,508 ft) were drilled to test the SIC for contact style Ni mineralization,
one of which intersected 0.5% Cu, 1.32% Ni over 10.7 ft.
The former Whistle open pit mine site is currently being reclaimed under a
conceptually approved closure plan. FNX has implemented monitoring programs at
the property in order to collect the data required to support operational
permit applications and define existing environmental liabilities. The data
that have been collected will identify existing liabilities and support permit
applications for advanced exploration and, if warranted, production.
FNX Mining Company Inc.
23 March 2004
The 2004 exploration budget, excluding any allowance for the underground
advanced exploration programs on the North and 2000 Deposits, is budgeted at $
3.3 million.
The Victoria Property, (1,282.9 acres, 519.3 ha) is located 30 km southwest of
Sudbury in Denison Township.
Copper and nickel sulphide mineralization was discovered in 1886 and the
property has been mined intermittently since 1900. The total historical
production for the Victoria property was 1,543,000 tons grading 2.26% Cu and
1.57% Ni, + approximately 2 g/t Total Precious Metals (TPM). Infrastructure
remaining at Victoria consists of a three-compartment vertical shaft measuring
5.0 ft by 13.5 ft, sunk to a depth of 3000 ft, with development on 18 Levels.
The property was abandoned by Inco, the underground workings flooded, and the
shaft capped. No surface infrastructure remains.
The property is situated at the junction of the SIC and the Worthington quartz
diorite offset dyke, approximately 6.5 km northeast of Inco's Totten property
for which resources in excess of 10 million tonnes and grading approximately
2.0% Cu, 1.5% Ni and 4.8 g/t PGM have been announced. The Cu-Ni-PGM sulphide
mineralization at the Victoria property is characterized by a complex
assemblage of irregular lenses of chalcopyrite, pentlandite and pyrrhotite.
The lenses dip and plunge steeply and are typically pipe-like.
FNX has initiated a baseline monitoring program to characterize current
conditions at target exploration areas at the Property. The program has
focused on both terrestrial and aquatic systems. The data that have been
collected will identify existing liabilities and support permit applications
for advanced exploration and production.
FNX has completed 167 holes (101,079 ft) on the Victoria Property. The focus
during 2003 was geological interpretation and modeling of the No. 2 West Zone.
Two holes drilled to test the easterly extension of the high grade
shear-hosted mineralization intersected 0.4% Cu, 1.0 % Ni, 1.7 g/t TPM over
29.5 ft, including 0.5% Cu, 1.5 % Ni, 3.5 g/t TPM over 7.8 ft.
The other highlight of the Victoria exploration program was the discovery of
the Powerline Deposit. Near surface drilling by FNX in 2002 intersected
similar lower grade, stringer sulphide mineralization above the 100 ft level.
Deeper drilling on the zone (>100 ft) resulted in the discovery of high-grade,
massive to semi-massive sulphide mineralization extending to depth, the high
grade core of which assayed 6.7 % Cu, 1.3% Ni, 13.3 g/t TPM over 42.3 ft
FNX Mining Company Inc.
23 March 2004
The 2003 drilling focused on defining the limits of the Powerline Deposit and
to locate a possible extension below the 600 ft vertical level, where
mineralization was truncated by a fault. Drilling during the year also tested
for a possible western strike extension of the Powerline Deposit. This
drilling encountered a second, though smaller, massive sulphide lens grading
up to 4.9% Cu, 1.9% Ni and 15.2 g/t TPM over 6.3 ft Drilling down-plunge and
further to the west of the Powerline Deposit encountered no significant
mineralization.
From April 1, 2003, to March 23, 2004 an additional 6,099 ft were drilled
around the Powerline in 13 holes Future work on the Powerline Deposit will
include detailed 3-D modeling, drilling to locate the displaced faulted
extension of the deposit and resource estimation.
In the second half of 2003 drilling focused on quartz diorite bodies located
in the southern and eastern portions of the Victoria Property. Using UTEM
responses and historic intersections, the Sudbury Joint Venture completed nine
drill holes totaling 12,599 ft targeting the quartz diorite areas. While
several of the holes intersected anomalous mineralization, no intervals of
economic significance were identified
The 2004 exploration program entails further investigation of offset-hosted
targets and computer block modeling and resource evaluations on the No. 2 West
and Powerline deposits.
Proposed exploration expenditures for the 2004 Victoria program are budgeted
at $ 0.13 million.
The Kirkwood Property (473.0 acres, 191 ha) is located in Garson Twp., some 11
km northeast of Sudbury.
Copper and nickel sulphide mineralization was discovered in 1892 and in 1969 a
new vertical, three-compartment shaft was excavated to a depth of 2,100 ft.
The total historical production from the Kirkwood property was 2,695,000 tons
grading 1.00% Cu and 0.90% Ni.
Underground exploration outlined extensive contact mineralization and also
mineralization associated with a quartz diorite dyke. There has been limited
surface exploration drilling and mapping completed at Kirkwood since the mine
closure and flooding in 1977.
Infrastructure at Kirkwood consists of a three-compartment vertical shaft to a
depth of 2100 ft. The underground workings are flooded and the shaft is
capped. There are open pits and associated auxiliary buildings as well as mine
water settling ponds on the site. Hydroelectric power is currently available
to the project site.
The Kirkwood property is located towards the southeast end of the Sudbury
Basin at the contact between the SIC and the Elsie Mountain metavolcanics. The
contact strikes east-west and dips steeply to the south.
FNX Mining Company Inc.
23 March 2004
Cu-Ni-PGM sulphide mineralization has been defined in six distinct zones. The
higher-grade Main and East orebodies were mined during the period 1969 to
1976, leaving unrecoverable remnant pillars of mineralization. The West, Lower
East and 3800 zones contain unmined low-grade Cu-Ni-PGM mineralization.
Additional evaluation of these zones is warranted to determine if there is
potential for mineable zones of higher-grade material with possible PGM
enrichment.
An environmental site characterization was completed by a third party
consultant in the first quarter 2004. This study defined existing mining
disturbances at the property, delineated watershed boundaries and established
an upstream and a downstream monitoring station in the on-site creek. These
monitoring programs will maintain compliance with regulatory requirements and
will also establish an environmental baseline so as to distinguish between
existing and incremental liabilities resulting from Joint Venture activities.
The 3800 Zone of Cu-Ni-PGM mineralization consists of a vertical zone of
disseminated and inclusion massive Cu-Ni sulphide along the contact between
the SIC and metamorphosed volcanic and sedimentary rocks. The 3800 Zone has a
330 ft strike length, a dip length of 660 ft, and a true thickness of 10-50 ft
All the exploration targets at Kirkwood are deep (below the 2000 level) with
existing drill intersections, for the most part, of marginal economic grade.
Though this project does not warrant a substantial exploration effort at this
time it is proposed to complete the data compilation as a first step towards
identifying new targets.
Expenditures for the 2004 program will be in the order of $0.12 million...
The North Range Footwall Exploration Project offers an early stage exploration
opportunity with potential to host significant footwall Cu-Ni-PGM deposits
similar to those mined in the North Range of the Sudbury Basin. As noted
above, both the McCreedy West and Levack Properties contain Footwall Deposits
which have been mined. Footwall targets have been identified for follow up on
both of the Properties. Of special interest is the high precious metal content
of these Footwall deposits
All of the major Inco and Falconbridge past and current producing mines of the
North Range (Strathcona, Coleman, Levack, McCreedy East, Onaping, McCreedy
West, Hardy) occur within an extensively mineralized 8.5 km-long portion of
the North Range of the SIC. Obviously this is an important exploration target.
The McCreedy West and Levack Properties cover some 50% of this target area.
Limited exploration to date in the footwall rocks to the north of the McCreedy
West and Levack properties has demonstrated the potential of this belt which
is approximately 4 km long by 1 km wide.
FNX Mining Company Inc.
23 March 2004
The aim of the Footwall Project drill program is to test the footwall rocks
along the entire strike length of the contact, up to 1 km into the footwall.
As well as testing the geology, these holes, ideally spaced at 400 m
intervals, will serve as platforms for in-hole UTEM surveys to locate off-hole
anomalies. The program has been modified in that shallower holes have been
drilled closer to the contact to assist in determining the geometry of the
host Sudbury Breccia package.
In the period April 1, 2003 to 23 March 2004, 13 footwall holes, varying in
length from 459 to 4065 feet, were completed on the Levack and McCreedy West
properties for a total of 18,928 feet. Downhole UTEM geophysical surveys
completed on one of these holes did not identify any significant anomalies
that could be attributed to sulphides. UTEM surveys on three other holes are
pending.
Local mapping of the footwall environment during the summer of 2003 has
provided the basis for the initial holes of the 2004 footwall drilling
program. These holes, located 500 ft behind the Main Orebody, were designed to
follow-up anomalous Pt and Pd values associated with Cu veining in
recrystallized Sudbury Breccia. One of these holes (FNX6019) intersected 0.8%
Cu, 2.0% Ni, 1.74 g/t TPM over 12.45 ft, at a depth of 100 ft below surface.
The focus of the 2004 footwall program will be to complete drill holes that
take advantage of the extensive geological mapping and interpretation that
formed a large part of the 2003 program. This will include drilling from both
underground and surface platforms into areas of Sudbury Breccia that are
deemed to have the correct characteristics for potentially hosting Cu-Ni-PGE
deposits.
To complete this program, the North Range Footwall Project has been budgeted
25,000 feet of drilling in 2004 at a cost of $0.97
FNX has completed resource estimates at McCreedy West (0.82 million tons)
grading 0.3% Cu, 1.7% Ni, and at Levack (5.5 million tons grading
approximately 1% Cu, 2.0% Ni).
Reserves, in addition to these resources amount to 1.24 million tons grading
0.2% Cu, 1.9% Ni in the contact deposits at McCreedy West with an additional
0.12 million tons grading 6.83% Cu, 0.75% Ni, 0.17 oz/t in the McCreedy West
footwall deposits.
These in-house resource estimates have been audited and verified by
independent consultants, Roscoe Postle Associates Inc.
Mining commenced in the second Quarter of 2003 and to the end of the report
period 105,500 tons of Ni-rich ore and 10,300 tons of l Cu-rich ore had been
mined at McCreedy West
The total work program as outlined above is budgeted at $12.5 million.
FNX Mining Company Inc.
23 March 2004
1. INTRODUCTION
On 10 January, 2002, Fort Knox Gold Resources Inc., the predecessor company to
FNX Mining Company Inc., (the Company or FNX), signed an Option to Purchase
Agreement with Inco Limited (Inco) by which FNX could acquire a 100% interest
in five Sudbury Basin mineral properties for which, as previously indicated,
Inco had no current mining or development plans.
The property package includes former producing mines known as the Victoria,
McCreedy West, Levack, Whistle (Norman Property) and Kirkwood mines (Figure
1). The Option required continuing exploration and, if warranted, development
of the subject properties under a 52 month program within which the Company
must spend $30.0 million to earn its interest. Upon signing the Agreement with
Inco, the Company formed the Sudbury Joint Venture with Dynatec Company. This
Joint Venture, owned as to 75% by the Company and as to 25% by Dynatec, will
explore, develop and, if economically appropriate, mine these properties.
The Sudbury Joint Venture (SJV), having exceeded the required $30.0 million in
expenditures on the Properties by December 1, 2003, is now vested and owns
100% interest in the mineral rights to the five Properties.
The following Table demonstrates the mining history on the properties
acquired.
TABLE 1: Sudbury Project Properties - Production History
----------------------- ---------- -------------- --------------- --------------------------------- --------
% oz/t g/t
----------------------- ---------- -------------- --------------- --------------------------------- --------
Property Years Tons Cu Ni Pt Pd Au TPM TPM
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
Victoria 1900-23 890,000 2.99 2.12 Na na na na
1973-78 650,000 1.26 0.83 na na na 0.07
Total 1,540,000 2.26 1.57 na na na +0.06(1) +2.0
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
McCreedy West 1974-98 15,800,000 1.70 1.44 0.02 0.02 0.01 0.05 1.5
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
Levack 1915-29 na
1937-97 66,600,000 1.31 2.00 0.02 0.02 0.01 0.05 1.5
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
Norman2 1988-91 na
1994-97 5,710,000 0.33 0.95 na na na 0.01 0.3
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
Kirkwood 1914-16 71,600 1.53 2.81 na na na na
1969-76 2,488,000 0.99 0.87 na na na na
Open Pit 1970-72 134,800 0.96 0.53 na na na na
Total 2,694,400 1.00 0.90 na na na na
----------------------- ---------- -------------- -------- ------ -------- ------- ------ --------- --------
Notes: (1) Total PMs estimated in line with production data from 1973-1978 (JMP)
(2) Production from the Whistle Mine.
na: Not assayed or assays unavailable for these elements
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Sudbury Basin : Simplified Geological Map
& Location of Cu-Ni-PGM Properties]
FNX Mining Company Inc.
23 March, 2004
2. THE SUDBURY AREA
2.1 General
The properties covered by this report are located in close proximity to the
City of Greater Sudbury, in northeastern Ontario, and approximately 400 km
north of Toronto. With a population of some 165,000, Sudbury is the major
centre in northeastern Ontario for mining, medicine, education, business and
commerce, and government administration.
The area has a history of nickel and copper mining stretching back over 100
years with two of the world's major nickel producers, Inco Limited and
Falconbridge Limited having been active in the area since 1902 and 1928
respectively. These companies have extensive mining, smelting and refining
operations in the area and these constitute the largest fully integrated
mining complex in the world. The nickel-copper-platinum group metals
(Ni-Cu-PGM) orebodies at Sudbury constitute the world's largest known
concentration of Ni-Cu sulphides. Total reserves and historic production are
estimated at 1.66 billion tonnes of ore with production in excess of 8.5
million tonnes of nickel metal and 8.4 million tonnes of copper metal.
Platinum Group Metals, gold and cobalt are among important byproducts
recovered from these ores.
2.2 Physiography and Climate
The area is located in the Canadian Shield with a typical topography of low,
rocky hills interspersed with numerous lakes and swamps. Elevations range from
230 to 460 m above sea level with local relief in the order of 30 to 60 m. The
major topographic feature of the area is the Sudbury Basin which forms an
elliptical ring some 60 km in the northeast direction by 28 km wide. The
topographically higher outer portions of the Basin are formed by igneous rocks
of the Sudbury Igneous Complex (SIC). The northern, southern and eastern parts
of the rim are referred to as the North Range, South Range and East Range
respectively. The central part of the Basin is occupied by low-lying, flat
agricultural land.
The dominant vegetation type is temperate boreal forest which, before the
onset and growth of the mining industry, supported a thriving lumber industry.
The climate is northern temperate with warm summers and cold winters. Average
temperatures range from 24.8o C in the summer to minus 8.40 C in winter and
with annual precipitation of 62.2 cm of rain and 247.5 cm of snow.
3. GEOLOGY OF THE SUDBURY AREA
All five of the project areas lie within the confines of the Sudbury Structure
(Figure 1). This structure straddles the boundary between the Archean Superior
Province and the Early Proterozoic Southern Province. The Late Proterozoic
Grenville Province and its northern limit, the Grenville Front, lie some 10 km
south of the Sudbury Structure.
FNX Mining Company Inc.
23 March, 2004
The Superior Province Archean rocks to the north of the Sudbury Structure
consist mainly of granitic plutons and gneisses and minor volcanic rocks of
the Levack Gneiss Complex which has been dated at approximately 2700 Ma and
which were deformed and exposed to peak metamorphic conditions by a 2640 Ma
tectonic event.
South of the Superior Province is the Early Proterozoic Southern Province of
metavolcanic and metasedimentary rocks deposited between 2490 and 2200 Ma.
These rocks are extensively intruded by sills and dykes of Nipissing Diabase
dated at approximately 2200 Ma.
3.1 The Sudbury Structure
Superimposed on the rocks of the Superior and Southern Provinces is the
Sudbury Structure. This is the geological expression of events triggered by
the impact of a giant meteorite approximately 1850 Ma ago, followed by
deposition of fallback material and Whitewater Group sediments, intrusion of
the Sudbury Irruptive Complex (SIC), and formation of the well known and
economically important Ni-Cu-PGM deposits.
Modeling of the Sudbury Structure suggests that the original crater caused by
the meteorite was more than 150 km in diameter. Erosion has exposed the
smaller, lower portion of the crater and tectonic deformation and thrusting
has deformed the once circular structure into the elliptical shape of today.
Extensive thrusting of the South Range exposes a deeper level of the SIC
compared to the North and East Ranges.
There are three main lithological components recognizable within the Sudbury
Structure:
1) Sudbury Breccia- brecciated rocks surrounding the structure,
2) Sudbury Igneous Complex (SIC) and
3) The Whitewater Group sediments occupying the centre of the
basin.
3.1.1 Sudbury Breccia
An important feature of an impact site is the extensive brecciation of the
rocks around the point of impact. This is particularly evident in the host
rocks to the Sudbury Structure that form the footwall to the SIC. This
impact-derived brecciation is commonly referred to as "Sudbury Breccia" and is
concentrated in the country rocks close to the SIC and decreases in intensity
outward for a distance of up to 80 km.
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23 March, 2004
Sudbury Breccia occurs as erratic and irregular zones of brecciated country
rock, characterized by extreme variability in distribution, size and geometry.
Zones of Sudbury Breccia vary from many meters across to thin veins. Angular
to semi-rounded clasts of country rock, varying in size from minute fragments
to massive boulders, occur in a finely-comminuted, dark, locally flow-banded
matrix. The matrix is thought to have formed by the rapid injection of locally
crushed and frictionally melted material created by the passage of the shock
wave caused by impact and is referred to as pseudotachylite. Close to the SIC,
the Sudbury Breccia matrix commonly displays thermal metamorphic effects and
is locally termed meta-Sudbury Breccia.
Of vital importance for ore formation is that Sudbury Breccia, adjacent to
Ni-Cu sulphide deposits at the SIC footwall contact, has provided an
environment conducive to the migration of copper and precious metals into the
footwall to form Cu/PGM-rich orebodies.
3.1.2 Whitewater Group
Occupying the centre of the Sudbury Structure is the Whitewater Group of
sediments formed by the fallback into the crater of impact debris and the
subsequent erosion of surrounding debris fields into the basin created by the
impact. The Whitewater Group consists of the Onaping, Onwatin and Chelmsford
formations. The Onaping and Onwatin formations show a fining upwards sequence
from very coarse debris deposits at the base to very fine muddy sediments at
the top. The Onaping formation is interpreted as representing fallback of
impact debris into the crater. Many clasts in the Onaping Formation display
shock (impact) metamorphic effects.
Overlying the Onwatin slate is the Chelmsford sandstone, a well-bedded and
gently folded turbidite sequence of greywacke sandstones.
3.1.3 Sudbury Igneous Complex (SIC)
The 1850 Ma SIC is divided into a lower unit of norite overlain by
transitional quartz gabbro and micropegmatite and was intruded between the
base of the impact crater and the overlying Onaping formation.
Many of the Ni-Cu-PGM deposits of the Sudbury Basin are hosted by the
Sublayer, a stratigraphic unit defined by the Sublayer Norite and Footwall (or
Granite) Breccia. The Sublayer Norite is a sulphide-rich, igneous-textured,
xenolith-bearing quartz norite. The Footwall Breccia matrix is
variably-textured and granodioritic. The Sublayer occurs as a discontinuous
layer up to several hundred metres thick in depressions or embayments between
the footwall and the overlying main mass norite. The xenoliths in the Sublayer
are dominantly of gabbroic, noritic, gneissic, and ultramafic composition.
FNX Mining Company Inc.
23 March, 2004
Radiating from and concentric to the SIC are dyke-like bodies of quartz
diorite termed "offsets" that have been interpreted to infill major
impact-derived fracture zones. Radial offsets connect to the SIC, whereas the
concentric dykes commonly show no physical connection to the SIC. The radial
offset dykes average less than 100 m wide, and become narrower with increasing
distance from the junction with the SIC.
The offsets host Ni-Cu-PGM deposits and have spawned a number of very
productive mining operations (Copper Cliff North, Copper Cliff South, Totten).
3.2 Mineral Deposits
The orebodies associated with the Sudbury Structure constitute the largest
known concentration of nickel-copper sulphides in the world. Total reserves
and production are estimated at approximately 1.6 billion tonnes of ore. Metal
production to date from these deposits exceeds 8.5 million tonnes of nickel
and 8.4 million tons of copper. By-products from this production include
cobalt, platinum, palladium, gold, silver, osmium, iridium, rhodium and
ruthenium.
The bulk of sulphides in the Sudbury ores consists essentially of varying
proportions of pyrrhotite, chalcopyrite and pentlandite with varying amounts
of other Cu-, Ni-, Co-, PGM-bearing minerals and gold.
Three main types of ore deposits are recognized: Contact, Offset Dyke and
Footwall.
3.2.1 Contact Deposits
The Contact Deposits occur along the lower contact of the SIC in areas where
Sublayer is preserved in embayments in the footwall contact. The embayments
are interpreted to be the topographic expression of what were originally
troughs or rills in the wall of the impact crater (major lunar craters
commonly exhibit this feature). These troughs have acted as traps for Sublayer
material and account for the pipe-like geometry of many of the Sudbury
orebodies. Terraces in the crater wall have also acted as Sublayer traps and
many ore zones occur at sites where there is a flattening of the footwall to
form ledges or terraces where sulphides are concentrated.
All the properties within the Company's Sudbury Project include contact type
Cu-Ni deposits.
3.2.2 Offset Deposits
The Offset Deposits are located in the radial and concentric quartz diorite
offset dykes and occur as thin, steeply dipping sheets to steeply plunging
pipes in barren to weakly mineralized quartz diorite. The deposits consist of
massive, semi-massive and stringer sulphide ore hosted by inclusion-bearing
quartz diorite and inclusion-free quartz diorite with variably disseminated
sulphide. They are typically confined within the width of the offset, which is
commonly less than 100 m.
FNX Mining Company Inc.
23 March, 2004
Offset-type mineralization occurs on the Norman and Victoria project areas.
3.2.3 Footwall Deposits
Footwall deposits may be offshoots of contact deposits although the connection
is not always well-defined. Brecciated footwall rocks adjacent to contact
Ni-Cu sulphide deposits may have acted as a conduit for mineralizing fluids
and as a medium for the deposition of sulphides. Where connected there is a
distinct metal zoning between Contact Deposits and the accompanying Footwall
Deposits in that the Contact Deposits have low Cu/Ni ratios and low total PGM
content compared to the high Cu/Ni ratios and enriched total PGM content in
the Footwall Deposits. These observations can be applied in exploration.
Footwall deposits occur on the North Range in the McCreedy West and Levack
properties.
4. SOURCES, HANDLING AND VERIFICATION OF DATA
4.1 Data Sources
Inco had accumulated a vast amount of data (over 8,000 boreholes) during their
exploration and mining of the subject properties. These data were made
available for examination by FNX. The information reviewed consists primarily
of diamond drillholes and associated sampling, assaying, plans and sections.
The essential details of these data are not in the public domain and originate
exclusively from Inco data files. Review of data has focused primarily on the
mineralized areas at each of the properties.
The original Patterson Report (dated November, 2001) was based solely on
information generated and provided by Inco Limited. Inco has not guaranteed or
warranted the accuracy or completeness of the data and information that it
provided to FNX and expressly disclaims any and all liabilities for any
representations, warranties or omissions in the written information or oral
communications made to FNX and any subsequent communications made by FNX
regarding this information which is referred to by the SJV as "historic data"
or the properties.
FNX and its consultants have independently verified the drill assay data
received from Inco. The Company has also completed comprehensive studies of
the detail assay records, has re-graded portions of the boreholes that
intersected the mineralized zones of interest and produced longitudinal cross
sections of the mineralized zones.
FNX Mining Company Inc.
23 March, 2004
Since inception of the FNX-Dynatec Sudbury Joint Venture exploration program a
significant amount of new data has been generated on the Properties resulting
in an increasing dependence on these new data as the project advances. During
the period April 1, 2003 to March 23, 2004, FNX completed 114 surface diamond
drillholes (177,177 ft) on four of the five Properties. In addition a further
133,021 ft were completed in 290 holes from underground locations in the
reconditioned McCreedy West mine workings.
In sections of this report dealing with the presentation of data on the five
properties the Imperial System is used. Activity on the project properties
dates back to the early part of the 20th Century and a large database relating
to surveying, exploration, development and production had been generated prior
to the introduction of the Metric System to Canada. To avoid errors in
translating such a vast amount of data into the Metric System and to
facilitate reference to the large existing database, it was decided to
continue with the Imperial System when presenting the data. Borehole
coordinates and intersection lengths are recorded in ft. Historic Inco assays
for precious metals (Pt, Pd, Au and Total Precious Metals) were reported in
troy ounces/short ton. Precious Metal assays for the current FNX program are
reported by the laboratory in grams/metric tonne and these are maintained as
such in the database. Conversion is made to Imperial Units for consistency
during resource estimation.
4.2 Data Verification
As previously reported, FNX and its consultants reviewed in detail the assay
records of all Inco boreholes that intersected the mineralized zones and
calculated weighted grade averages for the portions of the boreholes that
intersected the mineralized zones. Dr. Patterson conducted a detailed audit of
the Company's borehole grading calculations and confirmed that the results
accurately represent the graded assay intersections.
Spiteri Geological and Mining Consultants Inc. (SGM) was retained by FNX to
review Inco's information and procedures and to conduct an independent check
sampling and assay program of Inco's assay methods and results. The SGM
reports, dated 27 July, 2001 and 1 November, 2001, have been filed on SEDAR.
Roscoe Postle Associates Inc. (RPA), an independent geological and mining
consulting company, was retained by FNX to undertake an independent audit of
the FNX in-house resource/reserve estimates on part of the McCreedy West
resource inventory. This audit, to National Instrument 43-101 standards, and
dated March 5, 2003, included a review of sample preparation and laboratory
practices and procedures. The RPA report has been filed with SEDAR and the
following comments have been made by RPA on FNX Data Verification procedures:
FNX Mining Company Inc.
23 March, 2004
"The FNX staff surveyor spots the hole collars and does the final
coordinate pick up at the casings after hole completion. Some
checking and verification has been done by a registered Ontario land
surveyor.
All FNX surface holes have been surveyed down-hole under contract by
Sperry-Sun Drilling Services of North Bay, ON. A gyro-based
instrument is used to take azimuth and dip measurements at nominal 50
ft or 100 ft intervals with a final recording at the toe. Drilling is
monitored while in progress using Reflex EZ-Shot instrumentation at
100 ft intervals.
FNX routinely assays for Ni, Cu, Co, Pt, Pd, Au, Fe, S, Pb, Zn and As
and has established quality assurance and quality control (QA/QC)
procedures according to best practices as established by the OSC/TSE
Mining Standards Task Force (1999). Review by RPA confirms that QA/QC
is followed to ensure good assaying quality. Repeat assays for QA/QC
precision and accuracy monitoring are kept in separate digital files
but are not averaged with original values in the database. Assay
values less than detection limit are entered at one half the
detection limit.
RPA has reviewed Inco proprietary drilling, data collection and
assaying procedures and found them to be industry standard or better
and is of the opinion that the FNX drilling and assay database is
adequate for resource and reserves estimation".
4.3 Sampling Method and Approach
The details of the Roscoe Postle findings have been included in earlier
reports filed on SEDAR. The RPA recommendations have been implemented and some
changes have occurred.
The sampling protocols currently employed by FNX are as follows:
Sample material is obtained from diamond drill coring which includes NQ size
for surface drillholes and BQ size for underground drillholes. The NQ core is
sawn in half by diamond sawing whereas BQ core is sampled whole. Samples are
then tagged, packaged and shipped for preparation and assay at independent,
accredited, commercial laboratories.
Drill core is logged by FNX geologists and information is digitally recorded
using Century Systems DH Logger software on individual laptop computers. At
the end of each day this information is "copied in" to the FNX central
database and the drill log on the laptop remains the editable version. When a
hole is finished and logging is completed, the drill log is "checked in" to
the central database and the version on the central database becomes the
editable version. This system allows a duplicate copy of the log to be stored
separately, while ensuring that only one of these copies remains editable.
Geological data recorded include lithology, sulphide minerals and percentage
of each, alteration minerals and abundance, veining type and orientation,
structures and assay sample intervals.
Assay sample intervals are defined by the geologist under the following
conditions; (i) the hole cuts a previously defined mineralized envelope; (ii)
the core contains notable sulphide mineralization; (iii) favourable conditions
exist for mineralization (i.e. alteration, rock type) based on previous
drilling and assaying in similar environments. Sample lengths do not exceed 5
ft and are predominantly within the 2 - 5 ft range. Wherever possible,
individual assay samples are defined by geological boundaries and/or
mineralization styles.
FNX Mining Company Inc.
23 March, 2004
Individual, unique sample numbers are assigned to sample intervals in sequence
and sample numbers are independent of hole numbers. Standards and blank
samples are inserted in the sample sequence at predefined intervals. Sample
numbers are marked on the core with a china marker at the start of each sample
interval. Standards are inserted at a frequency of 1 in every 40 samples; the
name of the standard is written in the tag book and entered into the central
database, but remains "blind" to the lab. Blank samples are unmineralized and
unaltered felsic norite core which has been selected from Levack drill holes
FNX2004 and FNX2022. The blanks are inserted similarly to standards in the
sample sequence at a frequency of 1 per 100 samples, typically within or
immediately after well-mineralized intervals. This is done to monitor "carry
over" within the sample preparation equipment. The samples, standards and
blanks are recorded in the sample book and digitally, using the DH Logger
software. The entire length of the drillhole is digitally photographed, both
wet and dry.
All drillholes are recorded in a Diamond Drilling Journal, located at the
sampling station in the core logging facility. The journal is readily
accessible and it is the responsibility of all workers involved in the
processing of drill core to maintain this journal. All details related to the
processing of drill core are recorded in this journal, including assay sample
intervals, sample sequences and special instructions to the laboratory.
4.4 Sample Preparation & Security
Core from surface holes (NQ size) which has been marked for assaying is cut in
half by the core technicians using a diamond blade rock saw. After cutting,
the core is rinsed to prevent sample contamination. One half of the core is
returned to the core box and retained, the other half is placed in sample bags
labeled with the assigned sample number. The retained half of the core is then
labeled with the corresponding sample number. The same half of the core is
consistently sampled throughout a continuous sample interval. Sample tags are
removed from the sample tag book, one is placed with the assay sample in the
shipping bag and the other is stapled inside the core box at the beginning of
the sample interval. Sample bags are stored in the secure core facility prior
to shipping to the Lakefield sample preparation facility in Sudbury. The saw
and sampling area is hosed down after each hole, and thoroughly cleaned daily.
The saw blade is sharpened/cleaned periodically (several times a day) with a
masonry brick. This reduces carry over of metals between samples.
Filled sample bags are placed in sequential order by sample number. Standards
and blanks are inserted in their sequential position. Samples are shipped, in
sequence including standards and core blanks, in large plastic shipping crates
which are secured prior to shipment and either delivered to the sample
preparation facility once or twice weekly by the core technician or shipped by
commercial carrier. Accurate waybill receipts and chain of custody reports are
maintained. Any discrepancies in received materials or security devices are
promptly reported. For each batch of samples shipped a laboratory submittal
form is completed. One copy goes with the samples and a duplicate is filed at
the FNX office for reconciliation. The submittal form identifies the
Corporation's name, samples and project name. Each sequential sample series is
entered on a single line with the first and last sample as well as the total
number of samples together with assaying and any special instructions e.g.
instructions to freeze samples which may be required for metallurgical test
purposes.
FNX Mining Company Inc.
23 March, 2004
Drillcore boxes are clearly labeled with "Dymo Tape" on the front end,
identifying drillhole number, box number and depths of the core contained in
each box. Core to be kept is stored in a secure enclosure on the property
pending assay results. After assays are received and checked, the core is kept
in either the Annex Warehouse racks or sent to the Frood-Stobie core storage
facility.
4.5 Sample Preparation & Analyses
Prior to June 2003, sample preparation was completed at ALS Chemex,
Mississauga, as described in previous reports, and analyses were completed at
ALS Chemex, Vancouver. Since June 2003, sample preparation has been done by
SGS Lakefield, Sudbury Operations and analyses are completed at ALS Chemex,
Vancouver. ALS Chemex holds ISO9002 accreditation and participates in the
proficiency testing that is required to achieve ISO17025 accreditation. SGS
Lakefield holds ISO17025 accreditation.
On arrival at the preparation facility, samples are received, checked against
the submittal forms and weighed. Samples are entered and progress is monitored
using the Laboratory Information Management System (LIMS).
The entire sample is crushed in a Rhino Jaw crusher to 85% passing -10 mesh
(2mm). Sieve tests are done periodically to monitor grain size. Samples are
split in a riffle splitter to achieve a 200-225 gram split. The sample splits
are pulverized using a ring mill for approximately two minutes to achieve 90%
passing -200 mesh. The pulp is sealed in paper envelopes with the affixed
digital label and shipped via courier to the ALS Chemex laboratory in
Vancouver. A confirmation of shipping, including submittal form number, number
of samples, and waybill number is faxed from the sample preparation laboratory
to the FNX exploration office.
Upon arrival at the ALS Chemex Lab in Vancouver, the pulps are once again
checked against the submittal form, weighed and entered into the ALS Chemex
LIMS. Samples are then posted to the lab's secure website where their progress
can be monitored by selected FNX staff with secure access permission. Once the
assays are finalized a digital copy of the certificate is e-mailed to FNX. The
geologist responsible for QA/QC loads the assays into the central database. A
paper copy is also mailed to the FNX exploration office and archived.
FNX Mining Company Inc.
23 March, 2004
All analytical assay results are stored within FNX's central database, along
with all the logged data from the drill core. The integration of these data
with the drillhole logs allows for QA/QC monitoring and data export into
Datamine.
In the ALS Chemex Lab, Vancouver, 0.2 g of the pulp is fused with 2.6 g of
sodium peroxide at 650(0)C. The resulting melt is cooled and dissolved in 250
ml of 10% hydrochloric acid. The solution is analysed by inductively couple
plasma - atomic emission spectrometry (ICP-AES) and the results corrected for
spectral interference. Calibration solutions for the ICP-AES must be prepared
in a similar fashion to achieve matrix matching. The elements Ni, Cu, Co, Pb,
Zn, As, Fe and S are reported. Detection limits are 0.005% for Ni and Cu;
0.002% for Co.
For Pt, Pd and Au determinations, a 30 g (1 assay ton) pulp is fused by fire
assay furnace to produce a lead button and then cupelled to yield a precious
metal bead. The bead is digested in a solution of 2% hydrochloric acid and the
solution is analyzed by ICP-mass spectrometer (ICP-MS). Detection limits are
0.03 g/t (0.001 oz/ton) for Pt, Pd and Au.
For As and Ag determinations, the pulp is treated using Aqua Regia which
consists of treating a sample with a 3:1 mixture of hydrochloric and nitric
acids. The dissolved sample is then analysed using atomic absorption (AA).
Detection limits for Ag is 0.2 ppm.
FNX stores all pulps but keeps and freezes coarse rejects for selected
mineralized intervals only. The coarse rejects for mineralized intersections
are frozen to prevent oxidation and to ensure that the samples remain in good
condition for future repeat assays or metallurgical testing.
4.6 Assay Quality Assurance/Quality Control
Since the beginning of the Sudbury Joint Venture exploration program FNX has
retained Analytical Solutions Inc., to review and audit FNX's sampling and
assaying programs and to make improvements to QA/QC procedures where warranted
(Bloom, 2003 & 2004). This has ensured continuous independent monitoring of
our entire sample preparation and assaying procedures. Internally generated
reports (weekly and quarterly) are submitted to Analytical Solutions for
review, comment and recommendations. In addition, Analytical Solutions
personnel visit our operations and the service laboratories regularly thereby
ensuring constant oversight of all aspects of this component of the
exploration program.
The quality control system employed by FNX includes the use of reference
materials, blanks and check assays. During the period April 2003 to March
2004, a total of 23,826 samples was assayed and the QA/ QC program confirmed
that the assays are acceptable.
FNX Mining Company Inc.
23 March, 2004
Control blank core samples are inserted at a rate of 1 per 100 samples.
Currently the core blanks come from Levack drillholes FNX2004 and FNX2022.
Reference standards are inserted at a rate of 1 per 40 samples for both
precious and base metals. Standards currently being used include GBM399-10 and
900-3 from Geostats, Australia, PGMS-1, 2 and 4 from CDN Resource Laboratories
B.C., SU-1a and PTC-1a both from CANMET and LDI-1, a standard from Lac des
Iles which has not undergone round robin assaying. Checks assays are being
done at a rate of 1 in per 40 samples. The checks are randomly selected during
sample preparation and analyzed at SGS Lakefield Research, Lakefield, Ontario.
ALS Chemex and SGS Lakefield perform standard internal QA/QC to ensure
reliable results. The QA/QC program identified some cases of sample switches
(less than 10 cases) and concerns regarding the accuracy of PGE assays.
Preparation of new pulps and/or re-assaying was done at no cost by ALS-Chemex.
There were no indications of critical systematic biases. Based on check assays
at SGS Lakefield, additional PGE check assays have been undertaken since the
approximately 400 check assays showed a minor bias towards higher values for
Pt and Pd at ALS-Chemex. The reference materials submitted to SGS Lakefield
were biased low for some sample batches which may account for the differences.
These differences are in the order of 0.01 gpt Pd and 0.03 gpt Pt (Lavigne et
al. Internal QA/QC Report, 2003).
The QA/QC program will be expanded to include tests on sub-sampling of the
crusher material (90% passing 2 mm) and the second half of the drill core. Due
to issues regarding confidence in the `expected values' for the commercial
reference materials FNX is preparing a series of reference materials made from
ore at existing operations and certified by submission to five or more
laboratories. One reference material, containing 25% Cu and 1.5% Ni, has been
prepared by TSL and additional reference materials at lower grades are being
prepared.
4.7 Sample Security
Roscoe Postle in a report entitled "Review of the Mineral Resources and
Mineral Reserves of the McCreedy West Mine Property, Sudbury Area" and dated
August 22, 2003 describe the following FNX procedures which are still in
effect:
"At the drill site core box and lids are fibre taped shut after filling
and core boxes are retrieved by FNX technicians on a timely basis and
delivered to the core logging facility.
After core processing, sulphide-mineralized intersections key to resource
estimation remain racked in the core facility buildings that are locked
when unattended by FNX personnel. Footwall and hanging wall sublayer core
is stored in outside racks enclosed within barbed wire-topped chain link
fence compounds under lock and key. Permanent core storage is at the Inco
Frood-Stobie core farm. Core for upper sections of holes intersecting
barren Upper and Middle layer SIC units (waste) is dumped at Inco's core
disposal site at Frood-Stobie.
Bagged samples, and container-packed samples tamper-proof sealed for
shipping to ALS Chemex, are kept within the core facility buildings until
loaded for commercial trucking. The high level of digital integration and
software verification for data transfer eliminates most human error and
makes tampering of sample results difficult."
FNX Mining Company Inc.
23 March, 2004
4.8 Data Verification
"RPA checked original assay certificates with a number of drill logs and
corresponding database entries and found no errors in the FNX work.
Sampled intervals of core in core boxes for resource intercepts were
checked against drill logs for seven holes and RPA's visual estimates of
Cu and Ni grades in core were in line with recorded assays. Core sampling
is well-managed to reduce sample length measurement error at the primary
data collection stage. Core recovery is generally very good with broken,
ground or lost core in sulphide sections infrequent. The sampling is
better than industry standard, in RPA's opinion. Only one error of 0.1 ft
in a recorded sample interval was noted and this was due to a smeared
footage block ".
In this report the term PGM refers to Platinum Group Metals and includes
Platinum (Pt), Palladium (Pd), which comprise the major part of the PGMs, +
Ruthenium, Rhodium, Osmium and Iridium. The term TPM refers to Total Precious
Metals and includes the PGMs + gold. All intersection lengths referred to in
this report are lengths of drill core and should not be interpreted as being
true widths. A list of abbreviations and conversion factors is included in
Appendix 1.
FNX Mining Company Inc.
23 March, 2004
5. FNX MINING - SUDBURY PROJECT
5.1 Infrastructure & Staffing
Following the signing of the agreements with Inco and Dynatec on January 10,
2002, the Corporation very quickly mobilized the program. An office was opened
in Sudbury in March 2002 and the staff grew rapidly to the current level of
35, comprising 22 geoscientists, 7 technicians and 6 support staff. This staff
is now dispersed between three locations. The main office, at Kelly Lake Road
in Sudbury, handles local administration together with the Norman, Victoria
and Kirkwood projects. The exploration office at Levack services the
exploration at the McCreedy Mine property and the Levack and North Range
Footwall projects. Four geologists are located at the McCreedy West minesite.
The two core logging and sampling facilities continue with the Kelly Lake Rd.,
in Sudbury, now dedicated to Norman and Victoria core, and that at Levack
which handles the core and sample load from the McCreedy West mine underground
operations and also from the North Range exploration projects. . Both Sudbury
Project offices have been equipped with the necessary computer software and
hardware required to manage an aggressive exploration program such as that
being undertaken by the Corporation.
Our Joint Venture partners, Dynatec Corporation Inc, have set up an office,
warehouse, machine shops and other required facilities at the McCreedy West
mine site and employ some 111 persons.
The FNX corporate head office remains at 55 University Avenue, Toronto and it
is anticipated that the current staff of seven persons will be supplemented by
several additional key appointees.
5.2 Exploration Statistics
Since inception of the drilling programs in late March 2002, a total of
570,000 ft of surface diamond drilling has been completed in 458 drill holes.
As access has been gained to the underground workings, more of the drilling at
McCreedy West has been carried out from underground locations and to date 252
underground holes have been completed for 118,165 ft (Table 2). The current
rig disposition is seven surface rigs and five underground rigs. Our surface
drilling operations are carried out by Major Drilling., with one rig at
McCreedy West, two at Levack, and three at Norman. Our underground drilling
has been contracted to Boart Longyear with four rigs drilling various deposits
in the McCreedy West mine and one underground at the Levack Mine. In the
period 1 April, 2003 to 23 March, 2004, FNX completed 114 surface diamond
drillholes (177,177 ft) on four of the five Properties. In addition a further
133,021 ft were completed in 290 holes from underground locations in the
reconditioned McCreedy West mine workings.
FNX Mining Company Inc.
23 March, 2004
Table 2: Drilling Program: From Inception to 23 March, 2004
------------------------- ------------------------ ---------------------- -------------------------
SURFACE UNDERGROUND TOTALS
------------------------- ------------------------ ---------------------- -------------------------
# Holes Ft # Holes Ft # Holes Ft
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
McCreedy West - S 71 115,316 252 118,165 323 233,481
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
Levack 40 87,628 40 87,628
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
Norman 158 220,757 158 220,757
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
Victoria 167 101,079 167 101,079
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
North Range F/W 22 45,952 22 45,952
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
TOTALS 458 570,732 252 118,165 710 688,897
------------------------- ---------- ------------- ---------- ----------- ------------ ------------
Approximately 23,800 samples were sent for assay during the period April 1,
2003 to March 23, 2004 with the total since inception being 49,500 assays.
6. SAFETY, HEALTH & ENVIRONMENT
The directors, management, employees and contractors of FNX Mining place the
highest priority on ensuring the best practices of safety, health, environment
and community relations are practiced in every Company activity. Together with
our Sudbury Joint Venture partner, FNX Mining constantly reviews performance
in these areas and takes all necessary steps to ensure a safe and healthy
workplace, meeting or exceeding all regulatory standards and maintaining open
communication with the communities in which we work. The Joint Venture and its
contractors worked without a lost-time injury in the period from 1 April, 2003
to 31 March, 2004. Despite this excellent record the Joint Venture remains
vigilant in order to provide the required training and instill best practices
to continue this record into the future.
The Company's Joint Health and Safety Committee continued its regular
workplace inspections and meetings in order to comply with regulatory
requirements and to promote a safe and healthy workplace environment. Worker
and management representatives on the committee have completed the required
certification courses with the Mines, Aggregates Safety and Health Association
(MASHA).
FNX continues its regular training of employees and holds regular meetings
with contractors in order to promote sound work practices and compliance with
Company Policy. As a minimum, field staff receive general orientation from the
Northern Center for Advanced Technology (NORCAT), standard Workplace Hazardous
Materials Information System (WHMIS) training and Emergency First Aid
training. FNX is continually updating its Orientation Program and
indoctrinates new personnel and new contractors with the objective of
increasing awareness of safety, health and environmental issues. Procedures
are reviewed with employees on a monthly basis. Requirements and standard
operating procedures are outlined in the Safety, Health and Environmental
Orientation Manual, which is updated on an annual basis as a minimum.
FNX Mining Company Inc.
23 March, 2004
FNX has implemented a Safety, Health and Environmental Management System. The
Management System clearly outlines inspection standards and frequency for the
Joint Venture Properties in the Sudbury Basin. The document also outlines
record keeping requirements and procedures for reporting and addressing
potential compliance issues to appropriate members of upper management. The
Management System is a vehicle for monitoring Company activities and
maintaining compliance with both corporate and regulatory requirements.
FNX implemented a medical surveillance program with a third party health-care
provider to monitor the condition of employees and ensure employees are fit
for the work that they have been hired to perform. The program includes
regular examinations and testing to monitor the capabilities of employees
prior to hire, at appropriate intervals after employment commences and prior
to returning to work after an injury or illness.
7. RESOURCES AND RESERVES
7.1 McCreedy West/Levack
The 2003 Technical Report (dated May 9, 2003 and filed on SEDAR May 21, 2003)
outlined resource estimates for five of the seven known deposits at McCreedy
West Mine, which totaled 1,740,000 tons in the measured and indicated
categories and a further 376,000 tons in the inferred category. The resources
were contained within the Inter Main, Upper Main and East Main contact-type
deposits and the 700 and 950 footwall -type vein deposits (RPA Report, March,
2003).
During the current reporting period, resources for the Inter Main and East
Main deposits were updated to reflect additional drilling. A change in minimum
mining width, additional drilling and raising were incorporated in the 700
Deposit resource update, Resources for four of the five deposits were
converted to probable reserves (RPA Report, August 2003). An additional
505,000 tons in the inferred category were added to the southwest extension of
the Inter Main Deposit and announced in a news release dated February 23,
2004. These additional resources were also reviewed by RPA.
In addition, at the Levack Mine, FNX estimated a total of 4.6 million tons in
the measured and indicated resource categories and further 981,000 tons in the
inferred resource category.
Roscoe Postle Associates Inc. (RPA) were retained to review the Corporation's
internally generated resource and reserve estimates for the McCreedy West Mine
and Levack Mine. The report for the McCreedy West Mine is entitled "Review of
the Mineral Resources and Mineral Reserves of the McCreedy West Mine Property,
Sudbury Area, Ontario", and dated August 22, 2003. The report covering the
Levack Mine is entitled "Review of the Mineral Resources of the Levack Mine
Property, Sudbury Area, Ontario", and dated October 3, 2003. Both of these
reports were authored by Richard Routledge, M.Sc (Appl.), P.Geol., and filed
with SEDAR on August 29, 2003 and October 9, 2003, respectively.
FNX Mining Company Inc.
23 March, 2004
Where possible, FNX's mineral resource estimates are completed in-house using
3-dimensional computer block modeling and inverse distance (IDX) grade
interpolation using Datamine software. Resource estimation summary reports are
produced describing the model parameters used, including number of drill
holes, assay and composite statistics, estimate methodology and interpolation
parameters, volume-tonnage validation and nearest neighbour interpolation
validation of the model. The McCreedy West Inter Main, East Main, Upper Main,
and 950 Footwall Vein deposits were estimated using this methodology. The 700
Footwall Vein resource estimation was based on updating and modifying an
earlier Inco estimate using the cross sectional polygon method. At the Levack
Mine resources for the 1300, 1900 and No. 7 deposits were completed using
3-dimensional block modeling as described above. The remaining mineral
resources at Levack were prepared using the Inco Levack Mine Mineral Resource
Inventory (MRI). The deposits within the MRI were modeled on cross sections
spaced at 70 ft, intervals and resource estimates were completed using the
cross sectional polygonal method. Reference should be made to the Levack
Mineral Resource report by RPA for more detailed methodology. Tables 3 and 4
present the current status of resources/reserves at the Corporation's
properties:
Table 3: Summary of Mineral Reserves (1 & 2) (as at December 31, 2003)
----------------------------------------------------------------------------------------------------------------
McCREEDY WEST MINE
----------------------------------------------------------------------------------------------------------------
Tons (3) Ni Cu Pt Pd Au TPM(5)
---------------- ---------------------------- ----------- ------- -------- -------- -------- ------ ------------
Category (000s) % oz/ton
---------------- ---------------------------- ----------- ---------------- -------------------------------------
Probable Contact Deposits (4) 1,237.1 1.91 0.23
---------------- ---------------------------- ----------- ------- -------- -------- -------- ------ ------------
Footwall Deposits (4) 119.0 0.75 6.83 0.05 0.08 0.04 0.17
---------------- ---------------------------- ----------- ------- -------- -------- -------- ------ ------------
Total 1,356.1
---------------- ---------------------------- ----------- ------- -------- -------- -------- ------ ------------
Table 4: Summary of Mineral Resources (additional to Reserves) (1 & 2) (at March 23, 2004)
---------------------------------------------------------------------------------------------------------------
McCREEDY WEST MINE
---------------------------------------------------------------------------------------------------------------
Tons(3) Ni Cu Pt Pd Au TPM(5)
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
(000s) % oz/ton
---------------- ---------------------------- ----------- ---------------- ------------------------------------
Indicated Contact Deposits(4) - - - - - - -
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Footwall Deposits(4) 520.0 0.27 1.44 0.07 0.07 0.02 0.16
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Total 520.0 0.27 1.44 0.07 0.07 0.02 0.16
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Inferred Contact Deposits 821.3 1.67 0.31 - -
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Footwall Deposits 8.2 0.85 7.44 0.08 0.12 0.06 0.26
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Total 829.5
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
LEVACK MINE
---------------------------------------------------------------------------------------------------------------
Tons(3) Ni Cu Pt Pd Au TPM(5)
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
(000s) % oz/ton
---------------- ---------------------------- ----------- ---------------- ------------------------------------
Measured Contact Deposits 2,415.0 2.11 1.07 - - - -
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Indicated Contact Deposits 2,182.8 1.99 0.90 - - - -
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Total Contact Deposits 4,596.8 2.06 1.03 - - - -
--------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
Inferred Contact Deposits 981.3 1.97 0.86 - - - -
---------------- ---------------------------- ----------- -------- ------- -------- -------- -------- ---------
FNX Mining Company Inc.
23 March, 2004
The following notes will assist in understanding the constraints and controls
to the reserve/resource Estimates:
(1) The classification of mineral reserve and mineral resource
estimates is consistent with the classification system
prescribed by the Canadian Securities Administrators in
National Instrument 43-101, "Standards of Disclosure for
Mineral Products," using estimation methodologies and
parameters appropriate to each project.
(2) The mineral resource estimates are compiled by FNX Mining
Company and Dynatec Corporation and have been reviewed and
approved by Roscoe Postle Associates. The estimates have also
been reviewed by FNX's Vice President Exploration James M.
Patterson, Ph.D., P. Geo., in his capacity as FNX's designated
Qualified Person.
(3) Mineral reserves and resources are shown on a 100% basis.
Mineral resources which are not mineral reserves have not been
fully evaluated or have not demonstrated economic viability
under current market conditions.
(4) The McCreedy West contact deposits include the Upper Main, East
Main and Inter Main Deposits, while footwall deposits include
the 700 and 950 deposits.
(5) TPM: Total precious metals.
7.1.1 McCreedy West - Reserves
o All reserve estimates, cut-off grades and nickel equivalency are
based on estimates of long-term metal prices of ($US): copper=$0.90
per pound (/lb.), nickel=$3.50/lb., platinum=$525 per ounce (/oz.),
palladium=$350/oz., gold=$350/oz. and a Canadian dollar of U.S.$0.67.
o Reserves are the mineable economic portion of the resources. Contact
deposit reserve estimates include mining dilution at grades estimated
by dilution modeling and include mining recovery of approximately
95%. Mining cut-off for reserves was determined from net smelter
return (NSR) based on the Inco Off-Take Agreement metal
accountability and feasibility study estimated mining costs. Nickel
equivalent cut-off grades range from 1% to 1.4% depending on mining
method.
o Contact deposits consist of two ft of dilution in the hangingwall and
one foot of dilution in the footwall. In cut and fill areas there is
an additional 2% dilution from fill and 1% dilution from metal loss
in fill. Dilution is assumed to be zero grade.
o The footwall deposit (700 Deposit) reserve estimate is based on the
fully diluted resource and used the same NSR-mining cut-off approach
as for the contact deposits, which approximates a cut-off grade of
1.6% nickel equivalent. Veins are diluted to six or seven ft true
mining width depending on orientation, plus an additional nine inches
on both hangingwall and footwall for veins exceeding minimum mining
width. Dilution is assumed to be zero grade.
7.1.2 McCreedy West - Resources
o All resource estimates, cut-off grades and nickel equivalency are
based on estimates of long-term metal prices of ($US):
copper=$0.90/lb., nickel=$3.50/lb., platinum=$525/oz.,
palladium=$350/oz., gold=$350/oz. and a Canadian dollar of U.S.$0.67.
o Contact deposit resource estimates are based on a 1% nickel cut-off
grade and a minimum eight ft true width.
o The footwall resource estimates are based on nickel equivalent
cut-off grades of approximately 1.6% nickel for the 700 deposit and
0.75% for the 950 deposit.
o The footwall resource estimates are based on a minimum true mining
width of six or seven ft for the 700 deposit diluted resource,
depending on vein dip, and a minimum true width of eight ft for the
950 deposit resource.
o Resource estimates for the 700 footwall deposit includes internal and
external mining and sill dilution, while estimates for the contact
deposits and the 950 footwall deposit include internal dilution.
FNX Mining Company Inc.
23 March, 2004
7.2 Levack Resources
o All resource estimates, cut-off grades and nickel equivalency are
based on estimates of long-term metal prices of ($US):
copper=$0.78/lb., nickel=$3.95/lb., platinum=$650/oz.,
palladium=$185/oz., Gold=$350/oz. and a Canadian dollar of US$0.70.
o Resource estimates are based on a 1% nickel cut-off grade and a
minimum eight ft true width.
o Measured and indicated resources include 10% dilution at zero grade.
7.3 Other Properties
A number of resource estimations are in progress for several other deposits
within the Joint Venture properties. A geologically-conditioned simulation
investigation is in progress on the PM Deposit at McCreedy West and on the
2000 Deposit on the Norman Property. These deposits are Cu-Ni-PGM vein systems
which can be difficult to model using conventional inverse distance
interpolation methods. The geologically based simulations on these deposits
should provide a more robust resource model from which to base future advanced
exploration and production decisions. It should be noted that the exploration
ramp advancing into the PM Deposit will provide much additional information as
to the controls on mineralization thereby permitting a better understanding
and application of the model. Plans also include resource estimation for the
Powerline and No. 2 West Deposits at the Victoria Mine property using computer
generated block modeling.
FNX Mining Company Inc.
23 March, 2004
8. PROPERTIES
All of the subject properties are located within 35 km of Sudbury (Figure 1),
and the mineral rights are owned 100% owned by the Sudbury Joint Venture
(Table 5). Ownership is primarily by patent but two are mining leases
renewable in 2007.
Table 5: Sudbury Project Properties
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
PROPERTY TWP AREA OWNER Km MINE PATENTS LEASES
Acres SJV % from
Sudbury
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
Victoria Denison 1,282.90 100 30 Yes 2 -
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
McCreedy West Levack 804.24 100 34 Yes 7 -
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
Levack Levack 811.37 100 34 Yes 6 -
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
Norman North Norman 1,111.33 100 32 Yes - 2*
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
Kirkwood Garson 473.00 100 11 Yes 3 -
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
TOTALS 4,482.84 18 2
--------------- ------------ ----------- -------------- ------------ ----------- --------------- -------------
Note *: 5 mining parcels held under 2 leases (287 & 288) renewable April 1, 2007
The historic production and grades are presented in Table 1.
Graded assays, both historic and those generated by FNX personnel, have been
audited by the writer. The method employed for the historic assays was to
regrade the complete set of assays for the Victoria Property and carry out
spot checks on the other properties by recalculating a selection of the
sections graded by FNX. Both calculations compare very favourably and
certainly within acceptable limits for the requirements of this report. The
graded sections prepared by FNX have also been checked by the writer in the
normal course of verifying data for release to the public.
References to resources and/or reserves are based on in-house estimates which
have been independently audited by Roscoe Postle Associates Inc. (RPA), an
independent consulting firm with considerable expertise and experience in
undertaking such studies. Excerpts from the RPA reports are included verbatim.
8.1 McCreedy West Mine Property
8.1.1 Location, History, Infrastructure & Environment
The McCreedy West Mine project area, comprising 804.24 acres (325.4 ha) of
mining rights contained in seven mining patents, is located 34 km northwest of
Sudbury in Levack Township. Road access is excellent and the site is served by
an active rail spur.
FNX Mining Company Inc.
23 March, 2004
The Mond Nickel Company purchased the McCreedy West (formerly Levack West)
property in 1913 and Inco acquired the property in 1929 following the merger
with Mond. In 1939 surface diamond drilling discovered the Main zone. In 1970
development of the access ramp from surface and the haulage drift from Levack
1600 Level was initiated. Mining of the orebodies commenced in 1974, and
production came from the Upper Main, Middle Main, Lower Main and Footwall
orebodies. Production to 1998 totaled 15,758,000 tons averaging 1.70% Cu,
1.44% Ni, 1.3 g/t TPM.
During the last two years of this historic production, mining of the high
grade Cu-PGM-Au-Ni veins of the 700 Footwall Vein Complex was initiated,
yielding 40,965 tons grading 5.35% Cu, 0.56% Ni and 4.0 g/ton TPM. This
operation was used as a test site for narrow vein mining techniques.
The infrastructure at McCreedy West includes a -20% grade 20 ft x 16 ft ramp
decline to the 1,600 ft Level with average level development spaced at 150 ft
intervals. Since inception of the Joint Venture in January 2002, this ramp has
been reconditioned and made safe to the 1600 Level. In addition the 6,900 ft
of the 1600 Level track haulage drift to Levack Mine has also been
reconditioned. The 950 L has been reconditioned and a drill cross cut
excavated. A ramp to access the Inter Main Deposit is nearing completion
between the 950 and 1400 levels of the mine and an exploration ramp into the
PM Deposit has progressed 700 ft. Mining development and stope mining is
continuing at various levels of the mine into the 700 Vein Complex, Upper
Main, East Main and Inter Main deposits. Water, electricity and air systems in
the mine have been reconditioned and are operating efficiently. At the present
time, five underground drill rigs are in operation and all underground
activities are supported by the required surface facilities. Mine water is
being drained to Levack Mine along the 1600 Level drift and pumped through the
McCreedy East/Coleman Mine shaft
The property is covered by a joint Inco-Falconbridge environmental closure
plan which is being continually updated. The Sudbury Joint Venture has posted
an environmental bond with Inco Limited to cover any incremental environmental
liabilities over and above those identified in the Inco Closure Plan for the
McCreedy West/Levack Properties.
As infrastructure has been refurbished and production has resumed at McCreedy
West, monitoring at the site is now structured to meet compliance and due
diligence requirements rather than to provide baseline data. Existing
liabilities (i.e. metal concentrations in soil) that could be impacted by the
Joint Venture's activities were characterized prior to resuming production.
Monitoring of local air and surface water quality is performed to supplement
the existing monitoring programs being carried out by Inco and Falconbridge as
part of their approvals for neighbouring mines.
The temporary pile of non-reactive rock is monitored by site personnel, as per
the Certified Waste Rock Monitoring Program. The pile and its management will
be audited by a third party consultant on a semi-annual basis until the rock
is backhauled underground.
FNX Mining Company Inc.
23 March, 2004
Preliminary engineering for the crusher building and backfill plant have been
completed. An amendment to the Levack-Onaping Closure Plan has been submitted
to the Ministry of Northern Development and Mines (MNDM) to approve these
additional site features. An application for a site-wide Certificate of
Approval (Air) will be updated to reflect these additional emission sources.
Approval of the amendment and the Certificate of Approval are anticipated in
2nd Quarter 2004.
The annual Public Information Session regarding the McCreedy West operations
is planned for second quarter 2004 in the community of Levack to update the
community regarding the Joint Venture's activities at both McCreedy West and
the immediately adjacent Levack property.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - MCCREEDY WEST PROPERTY: Levack Township]
FNX Mining Company Inc.
23 March, 2004
8.1.2 Property Geology
The McCreedy West Mine occurs at the western limit of an extensively
mineralized 8.5 km long portion of the North Range of the SIC. This part of
the North Range encompasses all of the major Inco and Falconbridge past and
current producing mines of the North Range (Strathcona, Coleman, Levack,
McCreedy East, Onaping, McCreedy West, and Hardy).
The contact style ore zones are hosted in a suite of sulphide and
inclusion-rich sublayer norites and leucocratic breccias. The footwall zones
are hosted within a fine grained pseudotachlytic unit known as the Sudbury
Breccia. Hangingwall rocks comprise basal mafic norite with the felsic norite
of the main SIC overlying the mineralized zones. Brecciated rocks of the
Levack Complex, consisting of granodiorite, granodiorite-gneiss and
migmatites, form the footwall to the deposits. The ore-hosting sublayer phase
consists dominantly of granite breccia with subordinate sublayer norite and
xenolithic norite.
8.1.3 Deposit Types
At the McCreedy West Mine, mineralization occurs as Contact and Footwall
Deposits. Previous operations exploited both Contact Ni-Cu mineralization
along the base of SIC within Sublayer Norite and granite breccia-filled
embayments, and Footwall Cu-Ni-PGM mineralization in the footwall Sudbury
Breccia environment.
The Contact Deposits on the property (Inter Main, Upper Main, and East Main),
(Figure 3), are related to a suite of sulphide and inclusion-rich sublayer
norites and leucocratic granitic breccias. The orebodies occupy embayment
structures and traps that often penetrate into the footwall of the SIC. These
embayment structures are characterized by significant thickening of the mafic
norite and sublayer units accompanied by thicker zones of granite breccia.
Hanging-wall rocks composed of basal mafic norite and felsic norite of the
main SIC overlie the contact mineralized zones. Brecciated rocks of the Levack
complex consisting of granodiorite, granodiorite gneiss and migmatites form
the footwall to the deposits.
These contact deposits are typified by Ni contents much higher than the Cu
content, and contain negligible precious metal values. The depletion in Cu and
PGMs in these zones is reflected in the high Cu and PGM values in the adjacent
Footwall Deposits.
The Footwall Type Cu-Ni- PGM vein deposits are represented by the 700 Vein
Complex; 950 Vein Complex; and the PM Deposit.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - MCCREEDY WEST DEPOSITS: Vertical Section]
FNX Mining Company Inc.
23 March, 2004
8.1.4 Contact-Type Ni-Cu Deposits
8.1.4.1 Upper Main Deposit
The Upper Main Deposit comprises two mineralized lenses; a contact and a
hanging wall lens (Figure 4). Both lenses consist of disseminated to massive
pyrrohotite-pentlandite-chalcopyrite-pyrite predominately hosted within
granite breccia. The higher grade contact lens is between 8 and 18 ft in
width, and occurs over a strike extent of 300 ft, and a down dip extent of 250
ft within sublayer norite and granite breccia. The volumetrically larger, but
lower grade, hanging-wall lens ranges from 10 to 25 ft in width, and occurs
over a strike extent of 650 ft, and a down dip extent of 180 ft. This latter
lens is strictly contained within a narrow granite breccia package. Unlike
other known contact zones at McCreedy West, the location of the mineralization
does not appear to be controlled by the morphology of the lower contact. The
contact lens occurs along a topographically unremarkable hanging-wall -
footwall contact at a dip of approximately 38o, whereas the hanging-wall lens
occurs up to 130 ft away from the contact at a sub-horizontal orientation
Prior to FNX's involvement at the McCreedy West Property, Inco Ltd. had mined
the Upper Main Zone, between the 250 ft Level and the 600 ft Level, and
completed 5 holes in the un-mined section of the hanging-wall lens and 13
holes in the contact lens. FNX has completed a further 14 holes on the Upper
Main from both surface (2,018. ft) and underground (2,782 ft). These holes
have helped to define the limits of the contact lens, as well as to provide
additional internal and extensional data for the hanging-wall lens. A typical
intersection on the contact lens is represented by borehole FNX0008 (0.5% Cu,
2.1% Ni over 17.7 ft), whereas a typical intersection on the hanging-wall lens
is contained in FNX 3000 (0.55% Cu, 1.73% Ni over 25.0 ft).
In February 2003, FNX estimated an indicated resource of 48,000 tons in the
Upper Main contact lens which graded 0.46% Cu, 1.87% Ni. An inferred resource
of 128,000 tons in the hanging-wall lens graded 0.31% Cu, 1.44% Ni. In July
2003, 36,100 tons of the indicated resource on the contact lens was upgraded
to a probable reserve grading 0.36% Cu, 1.61% Ni. These figures have been
independently verified and audited by consultants Roscoe Postle Associates
(March, 2003). With the completion of the 2003 drilling program and reserve
estimation, mining was initiated at the Upper Main Deposit in May 2003. To the
end of March 2004, approximately 23,000 tons of ore grading 0.3% Cu and 1.2%
Ni were mined.
There are no current plans to carry out any further drilling on the Upper Main
Deposit during 2004. The contact lens has received sufficient drilling and
mining is proceeding on schedule. The hanging-wall lens however will require
further infill drilling prior to the initiation of any mining.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - MCCREEDY WEST MINE PROPERTY: Upper Main Deposit
West-East Inclined Section (Looking N - Dipping 41 degree S)]
FNX Mining Company Inc.
23 March, 2004
8.1.4.2 Inter Main Ni-Cu Deposit
The Inter Main Deposit (Figure 5) consists of nickel-rich, Sudbury Basin
contact-type and hanging-wall mineralization. The main body of mineralization
is controlled by footwall irregularities, and gneissic blocks and fragments in
the hanging-wall at or near the contact of the Sudbury Igneous Complex (SIC)
with the underlying footwall. The reserve model of the Inter Main suggests
that mineralization occurs over a strike direction of at least 1100 ft and
down dip for 800 ft. Recent drilling has shown the potential for significant
additions to the reserve tonnage. The dominant mineralization is associated
with physical traps at the base of the SIC however, mineable hanging-wall
lenses occur throughout the ore body. The dominant host rock for both contact
and hanging-wall environments is granite breccia.
The contact and hanging-wall style sulphides consist of pyrrhotite-pentlandite-
chalcopyrite-pyrite, and are characterized by various textural styles; the most
common include: inter granular disseminations, blebs, blocks, fragments,
laminated semi-massive and massive sulphides, and uniform massive sulphides
with net textured pentlandite. The style of mineralization is highly dependent
upon rock type association, as well as proximity to traps along the contact.
In March 2002, FNX completed its first hole into this previously undefined
deposit, and intersected 52.3 ft of 3.17% Ni and 0.37% Cu. This intersection
hastened the pace of exploration at the Inter Main, resulting in the
completion of 38 surface holes in 2002 at a spacing of 50 to 200 ft. In 2003,
the rehabilitated 1600 Level drift at McCreedy West provided an ideal platform
from which to complete infill and expansion drilling of the Inter Main. In
addition, initiation of Inter Main access ramps from the 950 level and the
1400 level have also provided critical drilling platforms. In total, 135 holes
were completed at the Inter Main from April 1, 2003 to March 23, 2004, for a
total of 59,200 ft and the results of this drilling are presented in Table 6.
These holes have helped to define the Inter Main Deposit at 50 ft centres over
half of the deposit, as currently known, and 80 to 100 ft centres over the
remainder of the deposit.
In February 2003, an indicated resource of 866,000 tons grading 0.24% Cu and
2.02% Ni was announced for the Inter Main Deposit. In July, 2003, following
additional in-fill drilling, this resource was upgraded to a reserve of
1,070,000 tons grading 0.21 % Cu and 1.88 % Ni. An additional inferred
resource of 112,000 tons at 0.53% Cu and 2.31% Ni was also identified at this
time along the western margins of the Inter Main. These figures have been
independently verified and audited by consultants Roscoe Postle Associates
(RPA).
Mining has now commenced on the Inter Main Deposit in sills leading from the
950 Level and 1400 Level Inter Main access ramps. By the second Quarter of
2004, these ramps should connect, and mining of the Inter Main Deposit can
begin in earnest. To date some 47,000 tons of ore has been mined in the Inter
Main at a grade of 0.3% Cu and 1.8% Ni.
FNX Mining Company Inc.
23 March, 2004
The exploration objective in 2004 at the Inter Main Deposit, is to continue
with required production drilling within the reserve area, and to test for
extensions by completing 33,200 ft of proximal and distal exploration drilling
outside of the reserve. The proximal targets will include:
o The Western Extensions
This area of sparse drilling south of the 950 Level and along the
western margins of the Reserve Area of the Inter Main Deposit is
situated very close to infrastructure, but remains a challenge to
define with drilling from underground platforms. In 2003, only three
holes were drilled into the western extensions of the Inter Main
Deposit. The best intersections from these holes include: FNX0155:
0.35% Cu, 1.73% Ni over 13.3 ft and FNX0173: 066% Cu, 3.78% Ni over
21.7 ft
In 2004, 6500 ft of drilling will be completed in 5 holes from
surface into the western extensions. These holes will complement
historical INCO drilling, (0.28% Cu, 3.74% Ni over 20.3 ft and 0.25%
Cu, 2.26% Ni over 18.0 ft) and should allow for the completion of an
upgraded resource model. Currently an inferred resource of 112,000
tons at 0.53% Cu and 2.31% Ni is defined for this portion of the
Inter Main Deposit.
o The Eastern Extensions
In this target area the objective is to complete sufficient
exploration drilling to add resources along the eastern extensions of
the Inter Main Reserve Area. In 2003, seven holes were drilled in
this area, intersecting up to 1.1% Ni over 12.5 ft.
Distal targets include poorly drilled areas well to the east of the
current known limits of the Inter Main, that have near term potential
for adding additional resources. These targets will be drilled from
the 1600 level.
o The South Western Extensions
Previous drilling and mining on the 1450 level by INCO had suggested
the potential for this area to host a significant Ni resource. Recent
surface drilling by FNX (FNX3066: 1.3% Ni, 0.2% Cu over 97.5ft; and
FNX3067: 1.3% Ni, 0.2% Cu over 62.0 ft) has confirmed this potential.
Increased definition of the south western extensions of the Inter
Main Deposit became possible late in 2003 as development of suitable
underground drilling platforms progressed. The data derived from this
drilling allowed for the completion of both a geological model and a
resource model for that portion of the mineralization which occurs
between 1300 and 1700 levels. This modelling has defined an inferred
resource estimated at 505,000 tons grading 1.7% Ni and 0.23% Cu. In
2004, increased definition of this part of the Inter Main Deposit
will be accomplished with the completion of 20 holes for 12,000 ft.
This drilling should provide the confidence required for the
completion of an upgraded resource model leading ultimately to a
reserve estimation.
FNX Mining Company Inc.
23 March, 2004
Table 6: McCreedy West: Inter Main Deposit - Graded Assays within Reserve Area
---------------- -------------------------------- ---------------------
Borehole Feet %
-------------------------------- ---------------------
From To Length Cu Ni
---------------- ---------- ---------- ---------- ---------- ----------
FNX0085 576.0 611.5 35.5 0.2 1.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0086 545.0 547.4 2.4 0.1 1.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0087 468.5 505.0 36.5 0.2 2.2
---------------- ---------- ---------- ---------- ---------- ----------
FNX0091 380.0 395.0 15.0 0.3 1.5
---------------- ---------- ---------- ---------- ---------- ----------
FNX0098 551.8 568.8 17.0 0.3 2.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0104 546.0 568.0 22.0 0.3 2.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0112 489.7 512.6 22.9 0.1 1.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0122 501.2 516.5 15.3 0.2 3.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0123 461.2 495.0 33.8 0.2 3.2
---------------- ---------- ---------- ---------- ---------- ----------
FNX0124 477.7 506.3 28.6 0.2 3.5
---------------- ---------- ---------- ---------- ---------- ----------
FNX0125 467.0 502.0 35.0 0.2 3.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0126 456.8 497.4 40.6 0.3 2.8
---------------- ---------- ---------- ---------- ---------- ----------
incl. 465.4 487.3 21.9 0.2 3.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0127 453.3 460.0 6.7 0.2 3.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0128 467.1 535.0 67.9 0.3 1.8
---------------- ---------- ---------- ---------- ---------- ----------
incl. 467.1 495.0 27.9 0.3 2.7
---------------- ---------- ---------- ---------- ---------- ----------
and 514.0 535.0 21.0 0.4 1.5
---------------- ---------- ---------- ---------- ---------- ----------
FNX0138 567.6 572.7 5.1 0.3 1.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0148 379.0 425.0 46.0 0.3 2.9
---------------- ---------- ---------- ---------- ---------- ----------
incl. 399.5 420.5 21.0 0.3 3.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX0149 444.0 447.5 3.5 0.2 1.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0156 484.4 548.3 65.9 0.1 1.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0157 494.4 523.3 28.9 0.1 0.9
---------------- ---------- ---------- ---------- ---------- ----------
incl. 494.4 501.7 7.3 0.2 1.5
---------------- ---------- ---------- ---------- ---------- ----------
and 513.6 523.3 9.7 0.2 1.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0174 466.8 490.9 24.1 0.3 2.2
---------------- ---------- ---------- ---------- ---------- ----------
incl. 478.3 487.9 9.6 0.3 3.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0176 408.8 414.7 5.9 0.4 2.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0177 403.7 418.1 14.4 0.4 4.4
---------------- ---------- ---------- ---------- ---------- ----------
incl. 403.7 413.4 9.7 0.4 5.2
---------------- ---------- ---------- ---------- ---------- ----------
FNX0182 501.6 535.0 33.4 0.2 3.2
---------------- ---------- ---------- ---------- ---------- ----------
incl. 509.8 529.5 19.7 0.3 4.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0183 480.7 525.0 44.3 0.2 3.2
---------------- ---------- ---------- ---------- ---------- ----------
FNX0184 434.3 458.6 24.3 0.2 1.4
---------------- ---------- ---------- ---------- ---------- ----------
incl. 434.3 446.7 12.4 0.2 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0185 461.4 530.0 68.6 0.4 1.4
---------------- ---------- ---------- ---------- ---------- ----------
incl. 477.0 500.0 23.0 0.5 2.5
---------------- ---------- ---------- ---------- ---------- ----------
incl. 477.0 487.5 10.5 0.6 4.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0186 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0187 526.5 544.2 17.7 0.2 4.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0188 441.4 495.3 53.9 0.4 1.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX Mining Company Inc.
23 March, 2004
---------------- -------------------------------- ---------------------
Borehole Feet %
-------------------------------- ---------------------
From To Length Cu Ni
---------------- ---------- ---------- ---------- ---------- ----------
incl. 441.4 454.3 12.9 0.6 4.2
---------------- ---------- ---------- ---------- ---------- ----------
FNX0206 546.3 571.9 25.6 0.3 2.1
---------------- ---------- ---------- ---------- ---------- ----------
incl. 546.3 558.9 12.6 0.4 3.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0207 501.6 519.6 18.0 0.2 1.8
---------------- ---------- ---------- ---------- ---------- ----------
incl. 501.6 513.3 11.7 0.2 2.4
---------------- ---------- ---------- ---------- ---------- ----------
FNX0215 500.9 519.2 18.3 0.1 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0216 532.8 548.7 15.9 0.4 1.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0217 500.8 536.4 35.6 0.4 1.8
---------------- ---------- ---------- ---------- ---------- ----------
incl. 500.8 520.8 20.0 0.5 2.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0218 505.1 521.4 16.3 0.3 2.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0219 526.2 542.3 16.1 0.3 1.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0228 498.0 532.5 34.5 0.2 2.6
---------------- ---------- ---------- ---------- ---------- ----------
incl. 498.0 511.9 13.9 0.2 3.4
---------------- ---------- ---------- ---------- ---------- ----------
FNX0229 490.0 496.0 6.0 0.3 1.2
---------------- ---------- ---------- ---------- ---------- ----------
and 514.0 532.2 18.2 0.1 1.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0230 516.0 527.5 11.5 0.4 1.6
---------------- ---------- ---------- ---------- ---------- ----------
and 611.5 619.8 8.3 0.3 0.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX0231 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0233 444.6 488.0 43.4 0.2 1.5
---------------- ---------- ---------- ---------- ---------- ----------
incl. 446.7 454.9 8.2 0.3 3.1
---------------- ---------- ---------- ---------- ---------- ----------
incl. 477.0 488.0 11.0 0.2 3.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0234 425.2 442.8 17.6 0.6 2.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0236 564.1 568.6 4.5 0.3 1.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0244 395.7 416.2 20.5 0.3 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0263 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0264 132.5 136.5 4.0 0.3 1.8
---------------- ---------- ---------- ---------- ---------- ----------
and 153.5 159.4 5.9 0.6 4.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0265 nsv
---------------- ---------- ---------- ---------- ---------- ----------
FNX0266 62.1 63.2 1.1 0.2 3.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0267 81.8 88.6 6.8 0.2 4.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0294 67.4 92.0 24.6 0.3 4.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0295 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0297 147.5 156.0 8.5 0.2 1.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX0325 212.3 213.0 0.7 0.4 3.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0327 52.8 95.9 43.1 0.4 2.0
---------------- ---------- ---------- ---------- ---------- ----------
incl. 52.8 67.0 14.2 0.6 3.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0329 78.0 176.5 98.5 0.2 1.6
---------------- ---------- ---------- ---------- ---------- ----------
incl. 78.0 108.0 30.0 0.4 2.7
---------------- ---------- ---------- ---------- ---------- ----------
incl. 169.1 176.5 7.4 0.3 3.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0330 190.7 205.2 14.5 0.2 2.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0331 87.7 128.3 40.6 0.2 1.1
---------------- ---------- ---------- ---------- ---------- ----------
incl. 87.7 106.5 18.8 0.2 1.7
---------------- ---------- ---------- ---------- ---------- ----------
incl. 120.6 128.3 7.7 0.1 1.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX Mining Company Inc.
23 March, 2004
---------------- -------------------------------- ---------------------
Borehole Feet %
-------------------------------- ---------------------
From To Length Cu Ni
---------------- ---------- ---------- ---------- ---------- ----------
FNX0332 107.6 110.5 2.9 0.1 1.7
---------------- ---------- ---------- ---------- ---------- ----------
and 147.4 154.2 6.8 0.2 1.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0333 141.8 158.9 17.1 0.5 2.6
---------------- ---------- ---------- ---------- ---------- ----------
incl. 142.6 151.4 8.8 0.4 3.3
---------------- ---------- ---------- ---------- ---------- ----------
and 259.3 279.0 19.7 0.3 1.3
---------------- ---------- ---------- ---------- ---------- ----------
incl. 271.5 279.0 7.5 0.4 2.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0334 103.7 132.8 29.1 0.4 1.2
---------------- ---------- ---------- ---------- ---------- ----------
incl. 103.7 110.0 6.3 1.1 1.8
---------------- ---------- ---------- ---------- ---------- ----------
incl. 120.4 132.8 12.4 0.3 1.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0335 139.1 152.0 12.9 0.5 3.3
---------------- ---------- ---------- ---------- ---------- ----------
and 196.7 212.9 16.2 0.6 3.2
---------------- ---------- ---------- ---------- ---------- ----------
and 276.5 280.0 3.5 0.5 3.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0338 95.9 123.9 28.0 0.8 2.7
---------------- ---------- ---------- ---------- ---------- ----------
incl. 97.3 106.5 9.2 0.8 4.0
---------------- ---------- ---------- ---------- ---------- ----------
incl. 111.7 121.6 9.9 0.8 3.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0375 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0376 187.0 191.2 4.2 0.1 0.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0380 613.1 637.8 24.7 0.2 0.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX0427 137.0 152.7 15.7 0.2 2.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0429 245.4 253.9 8.5 0.1 1.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0430 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0431 154.2 167.7 13.5 0.2 2.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0432 133.8 145.6 11.8 0.4 1.8
---------------- ---------- ---------- ---------- ---------- ----------
FNX0433 78.7 88.8 10.1 0.2 2.7
---------------- ---------- ---------- ---------- ---------- ----------
FNX0434 104.2 144.5 40.3 0.3 2.3
---------------- ---------- ---------- ---------- ---------- ----------
FNX0439 180.7 199.7 19.0 0.1 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0440 244.1 303.3 59.2 0.1 1.5
---------------- ---------- ---------- ---------- ---------- ----------
FNX0441 nsv
---------------- ---------- ---------- ---------- ---------------------
FNX0442 230.9 283.9 53.0 0.1 2.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0443 173.0 188.0 15.0 0.2 2.4
---------------- ---------- ---------- ---------- ---------- ----------
FNX0444 143.1 150.0 6.9 0.1 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0444B 160.6 163.6 3.0 0.2 4.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0600 109.2 120.2 11.0 0.1 2.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0602 124.0 126.5 2.5 0.3 3.1
---------------- ---------- ---------- ---------- ---------- ----------
FNX0603 141.6 251.4 109.8 0.2 1.3
---------------- ---------- ---------- ---------- ---------- ----------
incl. 141.6 210.0 68.4 0.2 1.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0604 93.1 116.1 23.0 0.2 3.6
---------------- ---------- ---------- ---------- ---------- ----------
FNX0605 135.0 204.2 69.2 0.1 1.4
---------------- ---------- ---------- ---------- ---------- ----------
incl. 135.0 169.5 34.5 0.1 2.0
---------------- ---------- ---------- ---------- ---------- ----------
FNX0607 150.6 155.0 4.4 0.5 1.9
---------------- ---------- ---------- ---------- ---------- ----------
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Inter Main Ni-Cu Deposit]
FNX Mining Company Inc.
23 March, 2004
8.1.4.3 East Main Deposit
The East Main Deposit occurs to the east of the main ramp between surface and
920 Level, and consists of semi-massive to massive pyrrhotite-pentlandite-
chalcopyrite-pyrite contact-style mineralization. The central portion of the
deposit occupies a south easterly trending embayment that extends from
surface, down dip to a depth of at least 600 ft below surface (Figure 6). The
mineralized zone is typically between 8 and 25 ft thick and predominantly
occurs near the base of the granite breccia horizon adjacent to the gneissic
footwall rocks. In the southern, down dip extension of the East Main, the
mineralization splays into two narrow zones, each between eight and 15 ft
wide, and separated by 12 - 30 ft of weakly mineralized granite breccia and
sublayer.
The East Main Deposit is located close to surface infrastructure, which has
made the logistics of drilling more complex. However, in mid April 2003, a
near term surface production drilling program was completed. This program
consisted of 6,803 ft of drilling in 11 holes, at 50 to 80 ft centres.
Intersections demonstrating the potential of this deposit are:
o 0.85% Cu, 3.05%, Ni over 14.1 ft in drillhole FNX3058
o 0.83% Cu, 2.70%, Ni, over 21.8 ft in drillhole FNX3063
o 0.41% Cu, 4.67%, Ni, over 18.8 ft in drillhole FNX3048
o 0.41% Cu, 3.43%, Ni, over 25.4 ft in drillhole FNX3037
In February 2003, FNX estimated an indicated resource for the East Main of
167,000 tons at 0.35% Cu, 2.54% Ni. In July, 2003, a subset of this resource
was upgraded to a probable reserve of 131,000 tons grading 0.35% Cu, 2.27% Ni.
This estimate was verified by Roscoe Postle Associates.
With the completion of the East Main exploration crosscut from the 950 Level,
testing of this deposit switched to underground drilling. This drilling
confirmed the known extent of the East Main mineralization, limiting the
proximal potential of this deposit to the east. However, this drill program
did provide additional encouragement for the up dip potential of the western
extensions of the Inter Main Deposit. No drilling is scheduled for the East
Main Deposit in 2004, as the 2003 program was sufficient to define the mineral
reserve. Mining has commenced on the 420 and 450 Levels and to date
approximately 29,500 tons grading 0.4% Cu and 2.1% Ni have been mined from the
East Main.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - EAST MAIN DEPOSIT]
FNX Mining Company Inc.
23 March, 2004
8.1.5 Footwall-Type Cu-PGM Deposit Targets
The Footwall Type Cu-Ni-PGM vein deposits are represented by the 700 Deposit,
950 Deposit, and the PM Deposit. The spatial relationships of these are shown
on Figure 3.
8.1.5.1 700 Deposit
This deposit, located between the 500 and 700 Levels, is part of an
eastward-plunging and south-dipping structural zone contained within an area
of footwall Sudbury Breccia that extends from surface to a depth of at least
3000 ft Mineralization within the 700 Deposit is restricted to sharp walled
veins which cross cut both the Sudbury Breccia matrix and clasts. Individual
veins, ranging in thickness from several inches up to 13 ft, are composed of
massive chalcopyrite with accessory pentlandite, millerite and pyrrhotite, and
have strike and dip lengths ranging from 25 to 350 ft (Figure 7). Prior to the
mine closing in 1997, 41,000 tons of ore were produced from the narrow veins
and averaged 5.35% Cu, 0.56% Ni, 4.0 g/t TPM.
One hundred-ninety three historic drillholes with 437 significant
intersections have been reported from this zone. One hundred-twenty eight
(29.3%) of the intersections are in excess of 15.0 g/t TPM, with the highest
being 110.0 g/t over 0.4 ft
In February 2003, FNX estimated an indicated and measured resource in the 700
Deposit of 139,000 tons at a grade of 6.1% Cu, 0.81% Ni, 0.18 oz/ton (5.6 g/t)
TPM. In July, 2003, a subset of this resource was upgraded to a probable
reserve of 119,000 tons grading 6.83% Cu, 0.75% Ni, 0.17 oz/ton (5.3 g/t) TPM.
This estimate was verified by independent consultants Roscoe Postle
Associates.
In 2003, 22 holes were completed at the 700 Vein Complex for a total of 3600
ft. This drilling was designed mostly to assist production, as the exploration
potential proximal to the vein system is limited by extensive historical
drilling. Mining of the veins by narrow vein mining methods commenced early in
2003 with production to the end of March, 2004 amounting to 10,300 tons
grading 6.53% Cu, 0.7% Ni, 4.1 g/t TPM. Drilling in the 700 Deposit in 2004
will be for production purposes.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - 700 DEPOSIT]
FNX Mining Company Inc.
23 March, 2004
FNX Mining Company Inc.
23 March, 2004
8.1.5.2 950 Deposit
The 950 Deposit (Figure 3) is located to the east and down plunge from the 700
Deposit described above. This deposit comprises two distinct styles of
mineralization: (i) massive chalcopyrite, pentlandite and millerite veins
ranging in thickness from 3 inches to 3.0 ft, and (ii) a broader zone of
irregular stringers and disseminated chalcopyrite blebs. The veins exhibit a
steep southerly apparent dip on geological cross-sections, while the broader
package of mineralization appears to dip more shallowly to the south,
sub-parallel to and within a wide zone of footwall Sudbury Breccia.
Preliminary drilling on the 950 Deposit by Inco Ltd. had suggested the
potential for a sizeable high grade mineralized deposit. Twenty-one drillholes
yielded 54 significant intersections, 22 of which were greater than 10 ft
In October 2002, FNX began a short underground exploration drilling program
from the rehabilitated 550-600 Levels of the McCreedy West Mine. Fifteen
diamond drill holes were completed between 2450 and 2600 sections for a total
of 10,832 ft This drilling helped to define the 950 Deposit (on 50 to 80 ft
centres ) over a strike length of 200 ft with a down dip extent of 600 ft
Intersections demonstrating potential from the 950 Deposit drilling include:
o 2.4% Cu, 0.3% Ni, 5.1 g/t TPM over 24.0 ft in hole FNX0016
o 2.4% Cu, 0.3% Ni, 5.1 g/t TPM over 24.0 ft in hole FNX0016
o 1.2% Cu, 0.6% Ni, 4.8 g/t TPM over 33.6 ft in hole FNX0017
o 5.1% Cu, 0.1% Ni, 6.8 g/t TPM over 37.1 ft in hole FNX0019
In February, 2003, an indicated resource of 520,000 tons, grading 1.44% Cu,
0.27% Ni and 5.28 g/t TPM, was estimated for the 950 Deposit. This estimation,
by FNX, was verified by independent consultants Roscoe Postle Associates
(March, 2003).
In 2004, a short exploration ramp will be completed into the 950 Deposit and
the information generated from this ramping together with the associated
drilling program will permit completion of a reserve estimation later in the
year.
8.1.5.3 PM Deposit
The PM Deposit is located below the 1450 Level at McCreedy West Mine within a
broad package of footwall Sudbury Breccia. Mineralization typically consists
of chalcopyrite +/- millerite +/- pendlandite + PGM (Pt+Pd Bismuth Tellurides)
within a mineralized envelope which generally dips 38(degree) to the
southeast. The mineralization style varies throughout the deposit but in
general terms it consists of the following which make this deposit potentially
amenable to bulk mining:
FNX Mining Company Inc.
23 March, 2004
1. Discontinuous narrow veins and stringers of chalcopyrite +/-
millerite. Although discontinuous, the veins maintain a general
trend which dips shallowly to the SE. The sulphides tend to wrap
around clasts in the Sudbury Breccia rather than cross cut.
2. Disseminated chalcopyrite within the matrix of Sudbury Breccia
3. Blebs of chalcopyrite which have replaced the mafic components of
some clasts.
4. Extreme low sulphide zones (0.1 to 0.2% S) with high precious metals
that are associated with narrow sulphide veinlets and disseminated
chalcopyrite and millerite.
Prior to FNX's involvement at McCreedy West Mine, Inco Ltd. had completed 44
drill holes in the PM Deposit. These yielded 44 significant intersections, 34
of which are greater than 20 ft thick.
The first hole drilled on the property by FNX Mining (FNX3000) intersected
250.7 ft (150 ft true width) of 1.17% Cu, 0.22% Ni and 6.24 g/t TPM. This hole
transected the heart of the PM Deposit, with the mineralization style
consisting of narrow fracture fill and replacement veins and disseminations.
Other holes drilled closer to the eastern margins of the deposit encountered
indistinguishable low sulphide type mineralization consisting of veinlets and
disseminations. One of these holes (FNX3022), intersected 64.10 ft grading
0.07% Cu, 0.05% Ni, and 15.15 g/t TPM.
From April 1, 2003 to March 23, 2004, FNX completed 85 underground holes at
the PM Deposit for a total of 51,039 ft, and a grand total of 118 drillholes
for 88,298 ft since inception of the program. Most of this drilling was
completed from the 1600 and 950 Levels with the objective of testing the
continuity of the mineralization; increase confidence levels and add to the
understanding of the geologic controls to mineralization. In 2004, an
additional 60,000 ft of drilling is planned for the PM Deposit. This drilling
will provide increased definition of most of the deposit at 50 to 80 foot
centres, and attempt to expand the limits of the known deposit.
The success of the 2003 and previous drilling programs, led the Sudbury Joint
Venture to initiate an advanced exploration and bulk sampling program in mid -
2003. A PM access ramp was driven from the 1500 Level of the main ramp, and by
the end of March 2004, 700 ft of this ramp had been completed. In 2004, the
access ramp will be driven across the main portion of the PM Deposit,
remaining in mineralization throughout. Cross cuts will be driven at various
intervals along the access ramp to permit larger bulk samples to be collected.
The increased geologic knowledge derived from the bulk sample and drilling
data, will provide the basis for a mineral resource estimate, which, when
combined with the metallurgical information generated, will lead to the
completion of a final feasibility study by summer 2004.
FNX Mining Company Inc.
23 March, 2004
Table 7: McCreedy West - PM Deposit : 2003 / 2004 Drilling - Graded Assays
-------------- --------------------------------- ------------------- -------------------------------------
Borehole Feet % g/t
-------------- --------------------------------- ------------------- -------------------------------------
From To Length Cu Ni Pt Pd Au TPM
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0056 684.6 751.1 66.5 1.1 0.1 1.3 2.0 1.1 4.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 684.6 693.9 9.3 1.2 0.3 1.6 3.3 5 9.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 703.3 715.4 12.1 1.4 0.1 2.1 3.9 1.3 7.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 743.6 751.1 7.5 2.4 0.1 3.5 3.8 0.3 7.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0057 630.5 720.3 89.8 1.9 0.4 2.8 3.3 1.2 7.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 686.6 720.3 33.7 3.5 0.5 5.4 6.4 2.3 14.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 712.8 720.3 7.5 8.5 1.3 13.8 14.5 7.9 36.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0058 544.8 553.3 8.5 1.6 1.1 1.5 2.6 0.9 5.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 605.7 642.6 36.9 1.4 0.4 1.5 2.0 0.8 4.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 664.8 666.0 1.2 6.9 1.6 16.8 16.6 3.1 36.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0059 616.4 625.5 9.1 4.2 0.4 2.1 3.1 1.7 6.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 653.4 675.0 21.6 0.4 0.1 1.2 1.0 0.4 2.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0060 690.0 694.8 4.8 1.8 0.2 1.9 4.0 0.5 6.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 728.0 774.8 46.8 0.4 0.1 1.1 1.2 0.2 2.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 761.3 774.8 13.5 0.2 0.1 1.9 2.3 0.2 4.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 821.2 829.0 7.8 0.1 0.1 3.3 3.0 0.2 6.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0061 613.7 645.5 31.8 1.2 0.4 1.4 1.9 0.4 3.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 637.0 645.5 8.5 2.1 1.0 2.8 2.9 0.3 5.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0062 527.0 670.3 143.3 0.8 0.2 1.4 1.8 0.5 3.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 527.0 579.8 52.8 1.0 0.2 0.9 1.5 0.4 2.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 609.4 670.3 60.9 0.9 0.2 2.4 2.6 0.7 5.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 648.7 670.3 21.6 0.9 0.2 3.8 3.3 0.7 7.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0063 490.2 497.1 6.9 2.7 0.5 1.1 1.4 1.8 4.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 598.8 608.1 9.3 0.4 0.1 0.9 0.9 2.2 4.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0064 399.9 405.0 5.1 5.1 0.3 0.4 1.2 0.5 2.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 509.8 518.7 8.9 9.0 1.1 4.9 7.1 7.0 19.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0065 535.2 551.6 16.4 1.3 0.2 1.5 1.7 0.3 3.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0092 347.5 510.0 162.5 0.2 <0.1 1.1 1.9 0.2 3.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 356.5 371.5 15.0 0.4 0.3 3.6 9.1 0.2 12.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 391.0 406.0 15.0 0.9 0.1 1.9 3.5 1.7 7.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 470.0 510.0 40.0 0.1 0.1 2.3 2.8 0.1 5.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 495.0 510.0 15.0 <0.1 <0.1 4.0 3.6 <0.1 7.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0093 255.0 355.0 100.0 0.8 0.3 2.3 5.7 1.1 9.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 335.0 355.0 20.0 2.5 1.2 7.4 23.3 4.7 35.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0094 235.0 245.0 10.0 0.6 0.5 3.0 4.8 0.7 8.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 314.0 317.0 3.0 15.7 1.3 26.3 52.5 22.4 101.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0095 264.0 355.0 91.0 0.5 0.4 3.0 3.9 1.3 8.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 264.0 318.0 54.0 0.8 0.6 4.6 6.0 1.0 11.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 345.0 355.0 10.0 0.1 0.1 1.8 2.8 6.9 11.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0096 200.0 320.0 120.0 0.2 <0.1 1.8 2.0 0.2 4.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 200.0 225.0 25.0 0.5 0.1 5.5 5.2 0.4 11.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 275.0 295.0 20.0 0.4 0.1 1.7 3.0 0.4 5.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 365.0 375.0 10.0 0.3 0.7 4.2 5.3 1.5 10.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0097 316.5 335.0 18.5 0.8 0.3 5.8 4.2 0.4 10.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0105 260.0 404.8 144.8 0.4 0.1 1.8 2.8 0.8 5.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX Mining Company Inc.
23 March, 2004
-------------- --------------------------------- ------------------- -------------------------------------
Borehole Feet % g/t
-------------- --------------------------------- ------------------- -------------------------------------
From To Length Cu Ni Pt Pd Au TPM
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 260.0 305.0 45.0 0.5 0.1 2.5 2.8 1.7 6.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 345.0 368.0 23.0 1.2 0.3 3.4 7.1 1.4 11.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 398.4 404.8 6.4 0.5 0.7 7.2 13 0.2 20.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0106 262.7 426.6 163.9 0.3 0.1 1.0 1.4 0.2 2.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 262.7 275.7 13.0 1.2 0.2 1.5 4.5 0.7 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0106 343.8 360.8 17.0 0.9 0.4 3.9 6.4 1.0 11.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 407.4 426.6 19.2 0.1 0.1 2.3 1.9 0.2 4.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0107 254.3 340.5 86.2 0.4 0.1 1.2 1.9 0.4 3.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 254.3 256.6 2.3 0.6 0.1 3.6 6.3 3.4 13.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 286.7 298.5 11.8 1.0 0.2 3.1 4.5 0.6 8.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0108 239.3 323.7 84.4 0.9 0.3 2.4 3.1 1.2 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 239.3 240.2 0.9 11.0 0.2 21.8 33.4 6.9 62.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 292.7 323.7 31.0 2.0 0.9 5.0 6.6 2.9 14.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0109 218.0 350.8 132.8 0.2 0.1 1.4 2.3 0.2 3.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 218.0 242.0 24.0 0.3 0.3 2.9 5.7 0.7 9.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 325.8 350.8 25.0 0.8 0.3 3.6 5.4 0.5 9.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0110 291.0 370.0 79.0 0.6 0.1 3.2 4.4 0.7 8.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 300.0 335.0 35.0 1.0 0.2 6.0 7.7 1.4 15.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0114 595.0 600.0 5.0 0.7 0.1 3.2 1.7 1.9 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 625.0 635.0 10.0 0.9 0.1 1.3 1.9 0.4 3.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0115 610.7 701.3 90.6 1.4 0.2 2.0 2.4 0.9 5.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 610.7 615.2 4.5 3.6 0.6 4.9 5.8 1.7 12.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 655.7 701.3 45.6 1.8 0.1 2.6 3.3 1.2 7.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0116 544.4 560 15.6 0.3 0.1 1.2 1.4 0.3 2.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0117 362.2 370.6 8.4 2.0 0.5 0.4 0.9 0.9 2.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 474.6 501 26.4 0.6 0.2 1.5 1.3 0.7 3.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 524.0 529.1 5.1 2.8 0.6 1.6 4.9 0.5 7.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0118 345.9 348.1 2.2 6.2 0.4 0.4 1.0 0.3 1.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 587.2 628.3 41.1 0.4 <0.1 0.7 0.6 0.2 1.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0119 482.4 491.5 9.1 1.5 0.5 1.2 2.1 0.9 4.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0120 413.7 415.0 1.3 14.1 0.0 1.2 7.6 0.2 9.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 435.0 436.4 1.4 11.2 3.0 2.5 3.9 0.6 6.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0121 474.0 479.4 5.4 10 0.3 1.6 3.9 0.8 6.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0131 314.5 355.0 40.5 1.8 0.2 3.2 4.0 0.9 8.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 314.5 326.0 11.5 6.0 0.5 9.0 11.9 2.4 23.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 350.0 355.0 5.0 0.6 0.3 4.5 4.6 1.9 11.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0132 320.8 325.0 4.2 20.5 8.2 36.9 91.6 11.9 140.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0133 323.5 327.5 4.0 4.3 0.9 7.1 16.5 3.3 26.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0134 295.6 304.6 9.0 0.4 0.1 1.3 2.1 0.5 3.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0135 350.0 357.7 7.7 1.3 2.4 9.8 3.0 0.2 12.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0139 397.6 403.6 6.0 0.5 0.4 10.9 12.4 0.6 23.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0140 390.0 420.8 30.8 0.2 <0.1 2.3 3.0 0.3 5.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 410.0 420.8 10.8 0.3 0.1 5.0 5.2 0.6 10.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 451.6 456.6 5.0 0.0 0.0 4.0 2.7 <0.1 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0151 237.5 344.5 107.0 0.8 0.1 1.8 2.1 2.7 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 311.5 313.0 1.5 17.3 0.5 19.3 24.1 161 204.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 332 344.5 12.5 2.2 0.7 4.4 7.3 1.9 13.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX Mining Company Inc.
23 March, 2004
-------------- --------------------------------- ------------------- -------------------------------------
Borehole Feet % g/t
-------------- --------------------------------- ------------------- -------------------------------------
From To Length Cu Ni Pt Pd Au TPM
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 332 335.0 3.0 9.1 2.7 18.1 30.3 3.6 52
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0152 220 380.0 160 0.5 0.2 1.4 2 0.3 3.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 220 255.0 35.0 1.4 0.8 3 5.4 0.7 9.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 277.5 281.8 4.3 2.9 0.7 6.8 11.3 1.8 19.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 355 380.0 25.0 0.1 0 2.9 2 0.4 5.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 405 410.0 5.0 0.2 <0.1 3.3 2.5 0.4 6.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0154 249.6 349.1 99.5 0.9 0.1 2.1 2.8 0.3 5.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 281.1 308.6 27.5 1.3 0.1 2.7 4.1 0.5 7.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0158 80.0 83.8 3.8 0.6 0.2 1.6 2.4 0.8 4.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0159 132.9 144.3 11.9 0.3 0.2 1.6 2.1 0.3 4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0160 142.5 148.9 6.4 2.2 0.1 4.1 4.3 0.7 9.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0179 130.4 171 40.6 0.8 0.1 1.1 1.0 0.2 2.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 130.4 139.3 8.9 1.8 0.5 2.8 1.6 0.3 4.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0180 78.0 86.1 8.1 4 0.3 3.8 4.3 1.4 9.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0181 104.3 128.8 24.5 0.7 0.1 1.2 1.5 0.2 2.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0189 245 327.5 82.5 0.8 0.1 1.9 2.2 0.7 4.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 300 327.5 27.5 1.3 0.2 3.5 4.1 0.8 8.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0190 205 290.0 85.0 1.4 0.1 2.8 4.1 1.6 8.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 244 277.5 33.5 2.7 0.2 5.4 8.3 3.6 17.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0191 177.5 280.0 102.5 0.9 0.1 1.9 2.4 0.5 4.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 177.5 200.0 22.5 1.9 0.1 1.9 3.7 0.3 5.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 225 237.5 12.5 1.4 0.3 3.3 3.9 1.7 8.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 267.5 280.0 12.5 1.4 0.2 4.1 5 0.7 9.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0196 210.0 307.9 97.9 0.9 0.1 1.3 1.8 0.3 3.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 333.5 340.5 7.0 2.3 0.7 5.7 6.2 1.9 13.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0197 186.1 335.1 149.0 1 0.2 2.6 3.4 0.5 6.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 280.4 306.6 26.2 3.4 0.9 9.4 12 1.5 22.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0198 209.4 221.4 12.0 1.9 0.5 15.5 10.3 2.9 28.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 254.4 301.4 47.0 0.7 0.2 2.2 2.7 1.5 6.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0199 226.8 231.8 5.0 1.1 0.2 3.6 4.9 2.3 10.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 292.3 298.3 6.0 0.3 0.2 6.6 5.6 0.4 12.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0201 167.2 292.2 125.0 0.6 0.1 2.1 2.4 0.6 5.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 167.2 185.2 18.0 1.2 0.2 5.7 4.9 0.7 11.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 232.7 250.7 18.0 1.1 0.3 4.0 4.7 1.1 9.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 269.2 292.2 23.0 0.6 0.2 2.2 3.0 1.0 6.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0203 195.1 202.3 7.2 4.2 1.0 7.3 9 5.1 21.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0204 138.5 188.4 49.9 0.7 0.3 1.5 1.5 0.4 3.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 138.5 155.5 17.0 1.6 0.8 3.5 3.1 1.0 7.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0205 282.3 449.8 167.5 0.8 0.2 1.4 1.8 0.7 3.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 351.3 365.3 14.0 1.5 0.2 2.4 3.8 1.0 7.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 391.8 416.3 24.5 1.5 0.6 3.1 3.4 2.5 9.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0208 nsv
-------------- ---------- --------- ------------ ------- ----------- -------------------------------------
FNX0220 175.0 255.0 80.0 1.1 0.2 2.2 2.3 0.7 5.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 221.8 255.0 33.2 1.9 0.3 3.9 4.0 1.2 9.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0221 166.1 210.9 44.8 0.8 0.2 1.9 2.1 0.3 4.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 198.3 210.9 12.6 1.3 0.3 3.5 3.6 0.3 7.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0222 157.7 221.5 63.8 1.1 0.2 2.1 2.9 0.7 5.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX Mining Company Inc.
23 March, 2004
-------------- --------------------------------- ------------------- -------------------------------------
Borehole Feet % g/t
-------------- --------------------------------- ------------------- -------------------------------------
From To Length Cu Ni Pt Pd Au TPM
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0223 157.5 260.0 102.5 1.2 0.4 2.3 3.4 0.7 6.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 235.0 260.0 35.0 2.0 0.4 3.8 5.8 1.4 11
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0224 215.4 289.5 74.1 1.1 0.3 2.7 3.2 0.9 6.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 248.1 263.1 15.0 2.3 0.6 4.2 6.3 2.1 12.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 280.2 289.5 9.3 1.9 0.2 8.1 7.3 1.5 16.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0225 170.0 322.5 152.5 0.8 0.2 2.2 1.9 1.8 5.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 170.0 180.0 10.0 0.8 0.2 6.7 3.4 1.8 11.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 200.0 225.0 25.0 1.2 0.2 1.7 2.0 2.0 5.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 245.0 322.5 77.5 1.0 0.3 2.9 2.5 2.6 7.9
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 260.0 275.0 15.0 2.0 0.4 4.0 4.6 1.1 9.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 310.0 322.5 12.5 2.8 0.9 10.6 6.8 13.8 31.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 405.0 415.0 10.0 0.1 0.1 3.5 2.7 0.2 6.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 485.0 495.0 10.0 0.2 0.0 3.2 2.5 0.5 6.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0226 140.0 285.0 145.0 0.6 0.2 1.7 1.8 0.6 4.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 185.0 255.0 70.0 0.7 0.3 2.2 2.5 0.7 5.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0227 160 325.0 165.0 0.8 0.1 1.6 1.8 1.1 4.6
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 160 180.0 20.0 1.5 0.6 2.6 3.7 1.3 7.5
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 285 325.0 40.0 1.3 0.1 3.5 3.2 3.3 10.0
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0241 251.8 256.8 5.0 2.0 0.1 4.9 6.6 2.8 14.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 319.8 327.2 7.4 8.3 1.8 13.6 24.8 3.3 41.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0242 nsv outside deposit
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0243 215 225.0 10.0 0.5 0.2 1.7 1.4 0.3 3.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 305 335.0 30.0 1.4 0.2 6.8 5.1 0.4 12.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 322.5 330.0 7.5 4.8 0.8 21.4 15.4 0.4 37.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0247 417.8 423.8 6.0 2.7 0.5 8.6 11.8 2.8 23.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 538.8 548.8 10.0 <0.1 <0.1 9.2 34.2 0.0 43.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0254 254.9 257.9 3.0 4.2 4.3 12.6 32.4 2.7 47.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 304.7 381.2 76.5 2.2 0.3 3.5 4.7 0.5 8.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 304.7 334.7 30.0 1.8 0.2 3.9 6 0.9 10.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 368.7 376.2 7.5 13.8 2.3 16.7 20.1 0.5 37.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0255 330.0 400.0 70.0 0.5 0.1 2.6 3.1 0.5 6.2
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 355.0 362.5 7.5 1.6 0.2 11.2 10.9 1.3 23.4
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
incl. 375.0 390.0 15.0 0.8 0.1 3.4 5.2 1.0 9.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0256 365.0 375.0 10.0 0.3 0.1 1.8 2.8 0.2 4.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 391.8 395.6 3.8 0.5 0.1 3.1 3.6 0.4 7.1
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 431.6 432.1 0.5 19.8 0.7 40.6 83.2 0.5 124.3
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
and 470.0 475.0 5.0 <0.1 <0.1 1.6 5.0 0.0 6.7
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX0271 148.7 159.0 10.3 1.5 0.2 2.4 1.8 0.6 4.8
-------------- ---------- --------- ------------ ------- ----------- ---------- -------- -------- --------
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - PM DEPOSIT]
FNX Mining Company Inc.
23 March, 2004
8.1.6 Resources & Reserves
The 2003 Technical Report (dated May 9, 2003 and filed on SEDAR May 21, 2003)
outlined resource estimates for five of the seven known deposits at McCreedy
West Mine, which totaled 1,740,000 tons in the measured and indicated
categories and a further 376,000 tons in the inferred category. The resources
were contained within the Inter Main, Upper Main and East Main contact-type
deposits and the 700 and 950 footwall -type vein deposits. These resources
were reviewed and audited by Roscoe Postle Associates (RPA Report March,
2003).
During the current reporting period, resources for the Inter Main and East
Main deposits were updated to reflect additional drilling. A change in minimum
mining width, additional drilling and raising were incorporated in the 700
Deposit resource update. Resources for four of the five deposits were
converted to probable reserves (RPA Report, entitled " Review of the Mineral
Resources and Mineral Reserves of the McCreedy West Mine Property, Sudbury
Area, Ontario", and dated August 22, 2003 was authored by Richard Routledge,
M.Sc (Appl.), P.Geol., and Graham G. Clow B.Sc., P.Eng). As announced in a
news release dated February 23, 2004, an additional 505,000 tons of resource
in the inferred category were added to the Southwest Extension of the Inter
Main Deposit These additional resources were also reviewed by RPA.
Table 8: McCreedy West Mine - Reserves
---------------- ---------------------------- ----------- -------- -------- ------- -------- ------- -----------
Category Tons Ni Cu Pt Pd Au TPM
---------------- ---------------------------- ----------- ----------------- ------------------------------------
(000s) % oz/ton
---------------- ---------------------------- ----------- -------- -------- ------- -------- ------- -----------
Probable Contact Deposits 1,237.1 1.91 0.23
---------------- ---------------------------- ----------- -------- -------- ------- -------- ------- -----------
Footwall Deposits 119.0 0.75 6.83 0.05 0.08 0.04 0.17
---------------- ---------------------------- ----------- -------- -------- ------- -------- ------- -----------
Total 1,356.1
---------------- ---------------------------- ----------- -------- -------- ------- -------- ------- -----------
Table 9: McCreedy West Mine - Resources (in Addition to Reserves)
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Category Tons Ni Cu Pt Pd Au TPM
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
(000s) % oz/ton
---------------- ---------------------------- ----------- ----------------- ------------------------------------
Indicated Contact Deposits - - - - - - -
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Footwall Deposits 520.0 0.27 1.44 0.07 0.07 0.02 0.16
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Total 520.0 0.27 1.44 0.07 0.07 0.02 0.16
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Inferred Contact Deposits 821.3 1.67 0.31 - - - -
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Footwall Deposits 8.2 0.85 7.44 0.08 0.12 0.06 0.26
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
Total 829.5
---------------- ---------------------------- ----------- -------- -------- ------- -------- -------- ----------
8.1.7 Mining
The underground mine operations are accessed via a decline extending from
surface to the 1600 Level. Men and material are transported via the -20% grade
ramp to the mine working levels. Emergency egress from the mine is via a raise
ladderway system extending from surface to the 1600 Level.
Ventilation is supplied to the mine using the existing #1 and #2 Fresh Air
Raises. Fresh air enters the mine through the #1 Raise, which is equipped with
two 150 HP 72 inch fans located on surface. Fresh air is also drawn into the
mine through the #2 Raise by a 150 HP 72 inch fan located on the 1080 foot
level underground. The majority of the exhaust air travels up the main access
ramp to surface, with a smaller quantity leaving the mine via the Return Air
Raise to surface. Mine air is heated during the winter months by the existing
burner units installed atop the #1 and #2 Raises.
FNX Mining Company Inc.
23 March, 2004
Production from the mine by the FNX-Dynatec Joint Venture commenced in May
2003 from the 700 Complex and Upper Main Deposits. The production rate at the
mine and shipments to the Inco mill steadily increased throughout the year as
access development progressed for the Inter Main and East Main Deposits. Daily
shipped tonnage per mine operating day had averaged 840 tons for the month to
March 23. Once more mining faces are available in the Inter Main it is
expected that mine production and shipments will attain the targeted 1,000
tons per mine operating day by mid year.
Mining methods are dictated mainly by ore geometry and the need to minimize
dilution. In the Footwall 700 Vein Deposit shrinkage mining is utilized in the
steeper veins while conventional up-dip panel mining is used in the flatter
veins. The Upper Main Contact Deposit utilizes mechanized cut and fill stoping
and a combination of mechanized and conventional (captive) cut and fill
stoping is being used on the East Main. For the Inter Main Deposit, initial
ore production was from sill development required to outline the extent of the
zone followed by production from both longhole and mechanized cut and fill
stoping. An internal ramp system has been driven to provide access to the
Inter Main Deposit from the 950 and the 1450 Levels at the eastern end of the
mine.
Backfilling consists of unconsolidated waste produced from the mine
development. Waste backfill will be placed in the mined stopes and various
identified unfilled stopes and redundant levels in the mine from previous
operations. A deferred fill program is planned for the 700 Deposit due to the
stoping methods used, namely sequenced panel and shrinkage. Backfill will be
selectively placed once stopes have been completed and mucked out.
Ore is mucked to temporary storage bays where, following loading into trucks
with 8yd3 and 9yd3 diesel LHD units, it is transported to surface in 36 and 55
ton underground haulage trucks. Development waste is dumped directly into
previously mined out areas or hauled to surface for temporary storage prior to
returning underground as backfill.
The ore hauled from the mine is placed on a surface coarse-ore stockpile
within a Process Containment pad which contains the crushing and sampling
systems and the associated stockpiles and collects and diverts to treatment
any surface water runoff from the stockpile pad. The design and construction
of the stockpile pad has been completed by a third party engineering
consultant The ore is reduced to a nominal -1" size through a 2-stage crushing
circuit and then passed through a sampling tower for grade determination.
Samples are sent to a third party laboratory for grade determination. A radial
stacker is employed to stack segregated fine ore piles on a batch basis. The
crushed and sampled ore is then loaded and trucked to Inco's weigh scale and
then dumped at the Clarabelle Mill for processing. The only processing
undertaken by the Joint Venture at the McCreedy West site is primary crushing
of the ore. This reduces any environmental liability to the minimum. Milling
and refining of the ore is subject to the terms of a processing Off-Take
Agreement with Inco.
Compressed air is supplied to the mine at 100 psi by 1600 cfm and 1000 cfm
screw compressors installed on surface. Air is distributed underground by an 8
inch diameter pipe located in the Emergency Manway. A 69 kV power line extends
to the McCreedy West substation located on the site. Electrical power for the
mine is provided to the mine from the main substation. Power is fed at 4160
volts to the mine by two 2/0 main feeder cables.
Underground communications are supplied through a Femco phone system at fixed
locations, and through the leaky-feeder radio system. The fleet of mobile
equipment for the mine production operations was purchased in 2003.
The McCreedy West mine operations are committed to a high standard of
environmental stewardship. Sustainability is an important issue for every
department, and involves protecting human health, reducing the impact of
mining on the ecosystem, and returning the site to a state compatible with a
healthy environment. A series of management systems for maintenance,
environmental activities and occupational health and safety have been
implemented. Currently, operations at McCreedy West are in compliance with
applicable corporate standards and environmental regulations.
FNX Mining Company Inc.
23 March, 2004
As part of the environmental program established at the mine to ensure the
mining activities do not impact the site conditions, the collection and
diversion of any potentially impacted surface water runoff is done. The
Process Containment and Stockpile pad collects and diverts any surface water
runoff from the stockpile pad to treatment. This engineered pad includes
adequate storm water storage capacity, an impermeable liner, and proper
drainage; all of which conform to environmental standards. Effluent water
runoff is collected and diverted to the underground mine drainage system to
the 1600 Level, then over to the Levack Mine and is eventually pumped to
surface by Inco from the Coleman/McCreedy East Mine and treated at the
Strathcona water treatment plant Depending on backfill requirements, waste
produced from the mine development may be hauled and temporarily stored on
surface on the containment pad.
The closure plan developed for the McCreedy West mine provides for "walk away"
closure. The potential for acid rock drainage from the mine activity is
limited to materials placed and processed on the stockpile pad. At closure,
the stockpile pad will be transported underground to fill the remaining mine
workings. There is no water discharge from the site. There are presently no
tailings ponds or waste treatment facilities on the McCreedy West Mine site
and none are planned.
Public information sessions are held with the local communities and issues
raised are documented, and addressed, resulting in periodic review and
analysis of the mine closure plans
8.1.8 Recommended Work Program and Budget
The primary objective of the 2004 program is to increase the resource and
reserve base at McCreedy West Mine by completing a program of detailed
evaluation of historical FNX and Inco data, in collaboration with a program of
collecting new data through diamond drilling, exploration drifting and
associated underground mapping and sampling.
During 2004, the diamond drill program will mostly originate from underground
platforms on the 950, 1400 and 1600 Levels, and will consist of 88,000 ft of
near term production and advanced exploration drilling, and 10,000 ft of
pre-development drilling. Most of this drilling will be focused towards
providing increased confidence at the Inter Main and PM Deposits, as well as
exploring for additional mineralization beyond their currently known limits.
In addition, 5,200 ft of surface drilling have been allotted for near term
production drilling in the western extensions of the Inter Main Deposit. This
drilling should provide the required level of confidence to elevate the
inferred resource to an indicated or measured category.
The initiation of the PM Ramp in 2003 provides FNX the opportunity to gain a
better understanding of the PM Deposit through a program of detailed mapping
and sampling. This program will continue during 2004 as the ramp continues
through the heart of the deposit. The information gathered from this program,
will assist our understanding of the controls of this important deposit and
facilitate our decision making ability as we move towards feasibility.
The planned 2004 exploration budget for the McCreedy West property is
estimated at $4.6 million, with an additional $2.0 million estimated for the
PM Deposit advanced exploration ramp.
FNX Mining Company Inc.
23 March, 2004
8.2 Levack Mine Property
8.2.1 Location, History, Infrastructure & Environment
The Levack Mine property, comprising 811.37 acres in six mining patents, is
located 34 km northwest of Sudbury (Figure 1) in Levack Township and
immediately adjacent to the McCreedy West property described above (Figure 9).
Access is via a year round highway and a rail spur passes within 1 km of the
property site.
The Levack Mine, the first deposit discovered on the North Range, was
discovered in 1887 and patented in 1889. The Mond Nickel Company acquired the
property in 1912 and production started from the No.1 inclined shaft in 1915.
Following the merger with Inco in 1929 the surface plants were destroyed by
fire and the mine was closed. Following reopening in 1937 the
three-compartment No. 2 Shaft was sunk to a depth of 4,050 ft. In 1939 the
No.1 and No.2 East Orebodies were discovered and the No.3 and No.4 Orebodies
were discovered by diamond drilling in 1947. The No.3 internal shaft was
collared in 1950.
The Levack Mine operated continuously from1937 until closing in 1997. The
total ore production was 66,600,000 tons grading 1.31% Cu, 2.00% Ni, 1.5 g/t
TPM.
FNX Mining Company began exploration on the Levack property in March, 2002.
During 2003, FNX focused on targeting under-explored contact and footwall
zones near the #3 and #7 Orebodies. In the first quarter of 2004, FNX
initiated an underground and surface drilling program at Levack designed to
better define the 1300 and 1900 Deposits. UTEM surveys were completed on most
of the 2003 holes as an aid for advancing exploration objectives.
A major development at the Levack Mine in 2003 was the evaluation of the Inco
mineral resource inventory (MRI) and confirmation of resources. Integration of
these data with those defined by FNX modeling of the 1300, 1900 and No.7
Extension Deposits resulted in a total indicated and measured resource of 4.6
million tons at 1.03% Cu, and 2.06% Ni. The total inferred resources are 1.0
million tons at 0.9% Cu, and 2.0% Ni. These resource estimates were completed
in-house by FNX personnel and consultants and were reviewed and audited by
independent consultants Roscoe Postle Associates. The RPA report, by Richard
Routledge M.Sc., P. Geol., dated October 3, 2003, and entitled "Review of the
Mineral Resources of the Levack Mine Property, Sudbury Area, Ontario", was
filed on SEDAR. The identification of these resources has provided the
motivation for advancing surface and underground exploration in anticipation
of a mine re-opening in 2004.
FNX Mining Company Inc.
23 March, 2004
Much of the infrastructure at Levack Mine remains accessible. The No. 2 Shaft
remains accessible and usable, subject to refurbishing, to approximately the
3,600 ft Level. A ventilation system using the available raises, drifts and
shafts is in use to service the McCreedy East Mine (Inco) return air. For the
purposes of access and drilling, the 1600 level has been rehabilitated from
the McCreedy West Mine main ramp to the Intermediate - 1300 Deposit area
(11300E) at the Levack Mine (Figure 10).
FNX Mining Company Inc.
23 March, 2004
The surface infrastructure includes the collar house, hoist room with hoist
and miscellaneous surface buildings including the sand plant. Hydroelectric
power is currently available to the project site. The surface load out and
rail car loading area are functional. Re-entry to the Levack workings will not
conflict with the current McCreedy East operations of Inco.
This property is covered by the joint Inco-Falconbridge environmental closure
plan, which also covers McCreedy West. As activity at Levack accelerates the
environmental considerations are becoming increasingly important.
A Certificate of Approval (Sewage) is in place to handle sanitary sewage and
all mine water reports to the Strathcona effluent treatment facility. In order
to supplement the information that is provided in the Levack-Onaping Closure
Plan, a site characterization will be completed by a third party consultant in
April 2004. This will serve to define existing mining disturbances at the
Levack property, delineate watershed boundaries and establish upstream and
downstream monitoring stations in the nearby receiving waters.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - LEVACK PROPERTY]
8.2.2 Property Geology & Mineralization
The Levack Mine is located on the northwest margin of the SIC. It is situated
within the Levack trough, an 8.5 km long structure that generally strikes
northeast, dips at 40-45(degree) southeast and contains all of the major North
Range deposits (Figure 1).
The Ni-rich orebodies at the Levack Mine are contained within terrace
structures that have acted as traps for the sublayer material that hosts
sulphide mineralization. In these terrace environments the thickened sequence
of sublayer, consists dominantly of granite breccia with sublayer norite
containing sulphide mineralization. The orebodies comprise thick lenses and
stringers of massive Ni-Cu sulphide situated at or near the contact between
granite breccia and the Levack footwall complex. The sulphides in the granite
breccia are typically disseminated, blebby or inclusion - rich massive
sulphides consisting of pyrrhotite, pentlandite, chalcopyrite and minor
pyrite.
In addition, the Ni-rich contact deposits (Levack Main, No. 1, No. 2, No. 3,
No. 4 and No. 7 Deposits) have areas of associated Cu-PGM-rich sulphides, which
occur as stockworks of massive stringers in the footwall Sudbury Breccia.
Hanging-wall rocks consist of a basal mafic norite overlain by felsic norite
of the SIC. Brecciated granodiorite, granodiorite gneiss and migmatites of the
Levack Complex form the footwall to the deposits and are referred to as
mega-breccia. The sulphide mineralization and the host rocks have been
disrupted by northwest-trending faults.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - LEVACK PROPERTY]
FNX Mining Company Inc.
23 March, 2004
FNX Mining Company Inc.
23 March, 2004
8.2.3 Deposits
The Ni-rich deposits of interest at Levack Mine are represented by the 1300,
No. 7 and the No. 3 Deposits. The 1900 Deposit can be regarded as a
hybrid-type exhibiting features of both Ni-rich and Cu-Ni-PGE - rich types. As
previously noted, mineralization within the deposits may be transitional from
Ni-rich sections to more Cu enriched zones.
The other prime target area at the Levack Mine is the large expanse of
footwall rock extending north from the SIC contact. This setting is the host
for a number of high grade Cu-Ni PGM vein-type deposits on the North Range,
immediately adjacent to the FNX ground.
8.2.3.1 1300 Deposit
The 1300 Deposit (Figure 11) is more or less typical of the contact-style
mineralization observed on the North Range. This 250 ft x 650 ft deposit
extends from the 1000 Level to the 1500 Level of the Levack Mine, and is
defined by a sub-horizontal lower portion and a sub vertical upper portion.
The lower portion occurs at the contact between sublayer norite and a mixed
unit of ultramafic-gabbroic/granite breccia rocks. The upper portion dips at
55(degree) and is completely within the mixed ultramafic-gabbroic/granite
breccia unit. The mineralization is consistent with a nickel-rich contact
deposit, consisting of massive, semi-massive, blocky and blebby
pyrrhotite-pentlandite-chalcopyrite-pyrite mineralization.
Historically, Inco had completed 7 holes into the 1300 Deposit with the
following intersections demonstrating the potential;
o 1.10% Cu, 3.33% Ni, over 65.7 ft in drillhole 971410
o 0.80% Cu, 3.63% Ni over 5.8 ft in drillhole 28320
o 0.48% Cu, 1.30% Ni, over 74.5 ft in drillhole 971450
In 2002, FNX completed 23 holes, testing both the 1300 and 1900 deposits.
Significant FNX intersections in the 1300 Deposit include:
o 0.5% Cu, 2.1% Ni over 56.7ft in drillhole FNX2013
o 0.6% Cu, 1.8% Ni over 61.1ft in drillhole FNX2007
o 0.7% Cu, 1.6% Ni over 79.1ft in drillhole FNX2009
The 1300 Deposit will be the focus of much of the 2004 exploration drilling
program. The sub-horizontal portion of the deposit must be drilled from
surface, whereas the sub-vertical portion of the 1300 Deposit will be drilled
from the rehabilitated 1600 Level drift The 20,000 ft planned for this drill
program should be sufficient to upgrade the inferred resource of 349,000 tons
at 0.7% Cu, 1.9% Ni to a reserve category..
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - 1300 DEPOSIT INCLINED SECTION
(Looking North, Dip: -42 degree)]
FNX Mining Company Inc.
23 March, 2004
8.2.3.2 No.7 Deposit & 7 Extension (7X)
This area of Ni-Cu contact-type mineralization is located down dip and to the
west of the Levack Main Orebody (Figures 10 & 12). Partially mined prior to
the Levack Mine shutdown, this contact deposit contains significant resources
and will be an initial focus for production.
The main bodies of mineralization at the No. 7 Deposit are controlled by:
1) local perturbations of the footwall gneissic rock, which result in
sulphide traps on the contact, and
2) blocks and clasts of the footwall in the hanging-wall Granite
Breccia.
The irregular nature of the mineralization in this deposit is intensified by
the occurrence of thickened units of granite breccia which appear to be
related to a disruption and displacement of the ore. The dominant host rocks
for the pyrrhotite-pentlandite-chalcopyrite-pyrite mineralization are the
granite breccia and the sublayer norite.
In addition to the partially mined portions of the deposit, an undeveloped
exploration area to the east of this deposit has significant potential. This
area, known as the No. 7 extension (No. 7X), has similar geology and ore
mineralogy to the No. 7 Deposit, but is less intensely drilled. The
mineralization appears to be associated with an elongate, trough-like zone
approximately 200 ft wide and extending 1000 ft down dip. Thirty-seven Inco
boreholes with 48 intersections, 26 of which are greater than 10 ft, cut the
zone, and assays show that Ni values exceed copper values by a ratio of at
least 2:1 with negligible PGE value.
Historical intersections demonstrating potential are
o 0.93% Cu, 1.64% Ni over 78.7 ft in drillhole 886930
o 0.54% Cu, 5.78% Ni over 3.2 ft in drillhole 900460
o 0.48% Cu, 1.53% Ni over 36.0 ft in drillhole 466820
In 2003, three holes were completed into the No.7 Deposit. Significant
intersections from this drilling include:
o 0.15% Cu, 1.2% Ni, over 36.1 ft in drillhole FNX2034
o 0.69% Cu, 2.51% Ni, 0.94 g TPM over 15.5 ft in drillhole
FNX2037
In 2004, 9,600 ft of drilling is planned for the No. 7 Deposit. This drilling,
which will focus on defining the upper portions of the No. 7 Extension, will
be partially completed from surface, and partially from the 1600 Level in the
mine. The focus of this drilling campaign will be to provide the data
necessary to upgrade the No. 7 Extension inferred resource of 123,173 tons
grading 0.23% Cu, 1.25% Ni.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - 7 Deposit Inclined Section]
FNX Mining Company Inc.
23 March, 2004
8.2.3.3 No. 3 Deposit Area
The No. 3 Deposit is a partially mined Ni-Cu-PGE contact-type mineralized body
located 3,600 ft east of the No. 2 shaft (Figure 10) in a large footwall
embayment. This orebody is atypical of most other North Range contact-type
deposits because of the strong association of Ni-dominant mineralization with
Sudbury Breccia rather than with granite breccia.
The 2003 FNX drilling program was designed to test the down dip proximal
footwall to the No. 3 Deposit in an attempt to locate any associated Cu-Ni-PGE
mineralization. This drilling intersected several narrow Cu-Ni-PGE - rich
veins in FNX2030 which assayed 2.22% Cu, 0.93% Ni, 5.45 g TPM over 12.2 ft.
Two other holes were drilled as follow-up to this mineralization. One of these
holes was faulted off (Fecunis Fault) prior to intersecting target depth,
while the second did not intersect any significant mineralization.
In 2004, an additional 7,000 ft of drilling has been allocated to test the
relatively untested, though highly prospective, footwall environment around
the No. 3 Orebody
8.2.3.4 1900 Deposit
The 1900 Deposit is located down dip from the mined Intermediate Deposit,
(Figure 10) and is regarded as a hybrid of the Ni-rich and Cu-Ni-PGE-rich
deposit types. This 650 ft by 150 ft deposit is hosted in a mixed unit of
granite breccia with Sudbury Breccia, and is overlain by a 450 ft wide
meta-gabbroic-ultramafic block, upon which the 1300 Deposit is positioned.
Below the deposit, the footwall rocks are composed of granodiorite gneiss and
Sudbury Breccia.
Mineralization within this deposit occurs as narrow fracture controlled
veinlets, and locally massive zones consisting of
chalcopyrite-pyrrhotite-pentlandite with minor millerite. The mineralization
appears to be dominantly associated with granite breccia in the south-west,
but in the north-east it is associated more with the Sudbury Breccia. The
north-eastern end of the 1900 trends towards the back of the No. 3 Deposit,
whereas the 1900 mineralized horizon may merge with the 1300 mineralized
horizon, up dip and to the west.
Moderate to intense potassium feldspar-epidote-albite alteration is often
associated with 1900 Deposit mineralization. The 1900 Deposit contains
significant PGE mineralization and narrow (< 3 ft) mineralized intercepts with
enriched Cu and PGM values, typical of the footwall vein- type Cu-PGE
mineralization, occur in the lower parts of some of the boreholes.
Inco previously completed 15 drillholes that returned 18 intersections in the
deposit, with seven being greater than 10 ft. Intersections demonstrating
potential include
o 1.94% Cu, 2.60% Ni, 4.4 g/t TPM over 87.4 ft
o 1.28% Cu, 0.35% Ni, 14.3 g/t TPM over 8.1 ft
o 3.32% Cu, 4.87% Ni, 10.6 g/t TPM over 5.3 ft
FNX Mining Company Inc.
23 March, 2004
Though no drilling was carried out by FNX on the 1900 Deposit during 2003, six
holes drilled during 2002 (Figure 13) intersected significant intersections in
and around the 1900 Deposit as follows:
Table 10: Levack 1900 Deposit - Graded Assays (FNX - 2002 drilling)
-------------- ---------------------------------- ---------------- ---------------------------------
DDH Feet. % g/t
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
From To Length Cu Ni Pt Pd Au TPM
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2000 1,797.7 1,813.0 15.3 0.81 0.52 0.57 1.96 0.07 2.61
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2001 2,067.8 2,150.4 82.6 0.96 0.97 0.84 0.89 0.06 1.79
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
incl. 2,130.5 2,150.4 19.9 2.81 1.95 1.67 1.15 0.18 3.00
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
incl. 2,141.7 2,150.4 8.7 5.28 4.35 3.08 1.87 0.13 5.07
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2009 1,993.1 2,000.0 6.9 0.77 0.96 1.46 0.96 0.34 2.76
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2012 1,781.1 1,794.6 13.5 1.42 1.41 1.24 2.20 0.28 3.72
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2014 2,008.0 2,037.3 29.3 1.19 1.25 0.98 1.17 0.10 2.26
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
incl. 2,015.0 2,037.3 22.3 1.33 1.37 1.09 1.28 0.10 2.47
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
FNX2015 1,769.2 1,790.3 21.1 2.25 0.97 1.07 1.43 0.18 2.68
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
1,829.6 1,836.8 7.2 0.56 2.63 1.68 2.21 0.09 3.98
-------------- ---------- ----------- ----------- -------- ------- -------- -------- ------- -------
In 2004, 20,000 ft of drilling have been budgeted for testing both the 1300
and 1900 Deposits. Due to the proximity of the 1900 Deposit beneath the 1300
Deposit, all of the holes into the 1900 Deposit will also test priority areas
in the 1300 Deposit.
[GRAPHIC OMITTED - 1900 Deposit-inclined Plan]
FNX Mining Company Inc.
23 March, 2004
8.2.4 Resources
The receipt of the Inco Levack Mineral Resource Inventory (LMRI) during the
year permitted the Company to estimate a total of 4.6 million tons grading
2.06% Ni, 1.03% Cu in the measured and indicated resource categories and an
additional 981,000 tons grading 1.97% Ni, 0.86% Cu in the inferred resource
category.
These estimates were reviewed and audited by independent consultants, Roscoe
Postle Associates and their report, entitled "Review of the Mineral Resources
of the Levack Mine Property, Sudbury Area, Ontario", authored by Richard
Routledge, M.Sc (Appl.), P.Geol and dated October 3, 2003 was filed with SEDAR
on October 9, 2003.
At the Levack Mine resources for the 1300, 1900 and No. 7 deposits were
completed using 3-dimensional block modeling as described in section 7. The
remaining mineral resources at Levack were prepared using the LMRI data and
modeling the deposits on cross sections spaced at 70 ft, intervals. The
resource estimates were completed using the cross sectional polygonal method.
Table 11: Levack Mine -Summary of Mineral Resources (as at December 31, 2003)
--------------------------------------------------------------------------------------------------------
LEVACK MINE
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
Tons(3) Ni Cu Pt Pd Au TPM(5)
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
(000s) % oz/ton
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
Measured Contact Deposits 2,415.0 2.11 1.07 - - - -
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
Indicated Contact Deposits 2,182.8 1.99 0.90 - - - -
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
Total Contact Deposits 4,596.8 2.06 1.03 - - - -
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
Inferred Contact Deposits 981.3 1.97 0.86 - - - -
---------------- --------------------- ----------- -------- ------- -------- -------- -------- ---------
The following parameters were used in determining the Levack resources:
1. All resource estimates, cut-off grades and nickel equivalency are based on
estimates of long-term metal prices of ($US): copper=$0.78/lb.,
nickel=$3.95/lb., platinum=$650/oz., palladium=$185/oz., Gold=$350/oz. and
a Canadian dollar of US$0.70.
2. Resource estimates are based on a 1% nickel cut-off grade and a minimum
eight ft true width. 3. Measured and indicated resources include 10%
dilution at zero grade.
8.2.5 Recommended Work Program and Budget
The prime objective in 2004 is to upgrade as quickly as possible the near term
production targets (1300, 1900 and No. 7X deposits) from inferred resources to
reserve status. This will be achieved by a program of detailed diamond
drilling and geological interpretation. In addition, it is important that
drilling continues to test under-explored areas of the contact and footwall.
FNX Mining Company Inc.
23 March, 2004
To accomplish the 2004 program, 44,600 ft of underground and surface drilling
have been allocated to the Levack Project, with 29,600 ft of this budget to be
used for definition purposes and 15,000 ft destined for exploration of the
contact and proximal footwall.
The exploration expenditures for this program are estimated at $2.5 million.
In addition to this exploration budget, it is anticipated that a program to
recondition the Levack #2 shaft to facilitate advanced exploration from
underground drill platforms will be initiated in order to permit upgrading of
the resources established during the year and to determine the feasibility of
their being mined.
8.3 NORMAN PROPERTY
8.3.1 Location, History, Infrastructure & Environment
The Norman property, comprising 1,111.33 acres (449.8 ha), is located in
Norman Township 32 km north-northeast of Sudbury (Figures 1). The mining
rights are held under ten-year mining and surface rights leases, 287 and 288,
and are renewable April 1, 2007. Excellent road access is available and the
main Ontario line of the CNR passes approximately 6.5 km west of the project
site.
The property has been intermittently explored since 1971 by surface drilling
and geological mapping. The former Whistle open pit mine is located on the
property and was in production between 1988 and 1991 and again between 1994
and 1997. The mine produced 5.71 million tons grading 0.33% Cu, 0.95% Ni,
0.034% Co. The Whistle contact-type deposit was located in an embayment from
which the Whistle Offset trends in a north-eastward direction away from the
SIC. Three zones of PGM-Cu-Ni mineralization (North, South and 2000 Deposits)
have been partially delineated in the Whistle Offset, the North and South to
the northeast of the Whistle open pit and the 2000 in the Offset below the
open pit.
The former Whistle open pit mine site is currently being reclaimed under a
conceptually approved closure plan. FNX has implemented monitoring programs at
the property in order to collect the data required to support operational
permit applications and define existing environmental liabilities. In
accordance with established protocols, FNX initiated a baseline monitoring
program to characterize current conditions at target exploration areas at the
Norman Property. The program has been carried out with the participation of
Wahnapitae First Nation, and has focused on both terrestrial and aquatic
systems. The data that have been collected will identify existing liabilities
and support permit applications for advanced exploration and, if warranted,
production.
The terrestrial assessment focused on the identification of biological values
and the information generated has been used to sterilize certain areas from
surface development. As part of this assessment, land within the property
boundary was classified in accordance with the Forest Ecosystem Classification
System. Assessment work also quantified metal levels in vegetation and soil in
the vicinity of the proposed project site.
FNX Mining Company Inc.
23 March, 2004
The aquatic assessment examined surface water and sediment quality, as well as
the fish and benthic invertebrate communities. Watershed boundaries have been
delineated within the property boundary and creek flows in the receiving
environment are being monitored on a continuous basis.
A groundwater monitoring program has been in effect since autumn 2002.
Additional monitoring wells will be installed as part of a Certified
Groundwater Monitoring Program.
With the advancement of biological studies and field exploration work, a
conceptual site plan has been defined for an advanced underground exploration
project at the property. The proposed project site is external to the Whistle
Mine closure plan area and watershed. In order to allow site development to
commence and the advanced exploration project to proceed, all applications for
the required permits are in the final stages of submission to government.
Consultation is continuing with Wahnapitae First Nation and the community has
been involved in the planning for the project. The Corporation and Wahnapitae
First Nation are currently working towards a Memorandum of Understanding and
Statement of Principles to promote effective communication between the two
parties and to create a constructive and mutually beneficial relationship.
The first Public Information Session, an integral part of the permiting
process, is scheduled for second quarter 2004 in the community of Capreol to
update the community regarding the SJV's activities at the Norman property.
8.3.2 Property Geology & Mineralization
The Norman property is located (Figures 1 & 14) at the northeast apex of the
SIC where the strike of the SIC changes from the east-west direction of the
North Range to the north-south direction of the East Range. The property
includes the Whistle embayment and the southern portion of the Whistle Offset
dyke.
The Offset extends north-eastward from the Whistle embayment into the gneissic
footwall rocks as a vertically dipping dyke varying in thickness from 50 ft to
greater than 300 ft, and consisting of irregular, discontinuous lenses of
quartz diorite within a wider zone of Sudbury Breccia.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Norman Property: Norman Township]
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Norman Property: Conceptual Advanced
Exploration Infrastructure]
FNX Mining Company Inc.
23 March, 2004
8.3.3 Targets
Within the Norman Property, multiple zones of PGM-Cu-Ni mineralization have
been discovered along the Whistle Offset (Figure 15).
8.3.3.1 North Deposit
The North Deposit has been exposed at surface over a 100 ft by 300 ft area
where the overburden has been stripped exposing the offset dyke.
Mineralization occurs as a set of sub-parallel, north-east trending,
sub-vertical lenses hosted within the like-trending Whistle Offset dyke.
Lenses consist of a concentration of Cu-PGM-Ni-bearing veins and lesser
disseminated mineralization within inclusion quartz-diorite and metabreccia.
Sulphide veins range from inches to 15 ft wide and can be generalized into two
types:
(i) more continuous breccia veins with matrix chalcopyrite
(+PGM+Ni minerals) and
(ii) less continuous extensional veins of massive chalcopyrite
(+PGM+Ni minerals).
Veins anastomose around blocks contained within the offset dyke while
structures, most commonly N-S trending, result in oblique offsets to their
overall north-east trend.
FNX's exploration program on the North Deposit from April 2003 to the 23 March
2004 consisted of detailed geological interpretation and diamond drilling. A
total of four diamond drill holes (2,809 ft) was completed to verify the
geological model and provide addition information within areas of widely
spaced drilling (Figure 16). Table 12 presents intersections from this
drilling. A geological and mineral interpretation completed in 2003 predicts a
deposit of 600 ft strike length and 600 ft vertical depth extent.
Table 12: Norman - North Deposit - Graded Assays 2003
--------------- ----------- ---------------------------------- ----------------------- -----------
Ft % g/t
--------------- ----------- ---------------------------------- ----------------------- -----------
DDH From To Length Cu Ni TPM
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
FNX4145 419.9 428.3 8.4 1.4 0.3 4.6
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
FNX4146 582.5 607.5 25.0 1.2 0.2 1.7
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
and 647.7 656.0 8.3 10.4 0.3 10.2
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
and 678.4 689.9 11.5 1.6 0.3 4.4
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
FNX4147 308.5 538.5 230.0 2.6 0.2 2.7
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
incl. 308.5 389.7 81.2 6.4 0.4 6.0
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
incl. 347.3 389.7 42.4 11.7 0.5 10.5
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
FNX4148 207.8 323.0 115.2 1.1 0.1 1.2
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
incl. 259.5 266.4 6.9 9.9 0.2 9.2
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
incl. 295.5 323.0 27.5 1.5 0.1 2.0
--------------- ----------- --------- ---------- ------------- ------------- --------- -----------
Near term work on the North Deposit will consist of detailed resource
estimation and pre-feasibility study. Some additional drilling is recommended
to test predicted high grade lenses within the North Deposit which may not be
fully delineated. Additionally, there is potential for expansion of the North
Deposit to both the northeast and southwest.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Norman Property North Deposit:
Longitudinal Section (Looking West)]
FNX Mining Company Inc.
23 March, 2004
8.3.3.2 South Zone
The South Zone is also located within the Whistle Offset dyke and some 350 ft
southwest and along strike from the North Deposit. Mineralization, which has a
confirmed strike length of 200 ft and a dip length of 250 ft, is similar to
that in the North Deposit. The mineralization appears to be open down dip,
along strike and down plunge to the west.
Exploration on the South Zone by FNX to date has been limited to geophysical
surveying and two diamond drill holes (1675 ft) beneath the known
mineralization in 2002. The area was covered by the airborne EM survey as well
as the ground EM-31 survey in conjunction with the North Deposit surveying. No
work was undertaken on the South Zone in 2003. Future exploration on the South
zone will consist of detailed geological modeling, interpretation and diamond
drilling, if warranted.
8.3.3.3 2000 Deposit
The 2000 Deposit (Figure 15) lies at a vertical depth of 1600 to 2500 ft from
surface, below the Whistle embayment, which hosted the Ni-rich contact
mineralization mined in the Whistle pit. The 2000 Deposit mineralization
consists of Cu + PGE + Ni rich chalcopyrite +/- millerite +/- pentlandite
veins, stringers, fracture fillings and disseminations within Whistle Offset
dyke below the sublayer embayment.
A total of 26 holes (75,279.2 ft) has been completed by FNX since the last
report dated May 9, 2003, yielding impressive intersections I as presented in
Table 13 and including: 13.8% Cu, 1.0% Ni, 8.1 g/t TPM over 114.4 ft in hole
FNX4130, within which an 18.8 ft section graded 19.9% Cu, 3.1% Ni, 12.9 g/t
TPM
FNX drilling has established significant mineralization over a 900 ft by 600
ft area (Figure 17). This phase of drilling has demonstrated the continuity of
a higher grade body within the mineralized envelope and has supported the
evolving geological interpretation and deposit model. Borehole geophysical
surveys have been completed on a number of drillholes using the UTEM-4 system.
Future exploration on the 2000 Deposit in 2004 will include:
o limited diamond drilling within the known deposit in order to
permit a resource estimation and to provide sufficient
information to support a decision to proceed with advanced
underground exploration.
o drilling to establish the limits of the mineralized system.
FNX Mining Company Inc.
23 March, 2004
Table 13: Norman: 2000 Deposit - Graded Assays 2003/04
--------------- ---------- ---------------------------------- ----------------------- -----------
DDH Feet. % g/t
--------------- ---------- ---------------------------------- ----------------------- -----------
From To Length Cu Ni TPM
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4092 nsv
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4093 SM 1844.5 2329.2
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4094 2366.0 2420.0 54.0 2.5 0.2 3.6
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2366.0 2376.8 10.8 7.1 0.5 2.8
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2399.4 2420.0 20.6 2.4 0.1 7.6
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2399.4 2412.0 12.6 3.4 0.2 10.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2490.0 2505.0 15.0 0.5 0.0 5.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4095 2042.4 2237.9 195.5 1.7 0.2 1.7
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2124.0 2237.9 113.9 2.4 0.2 2.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2131.9 2136.0 4.2 7.7 0.4 4.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2150.0 2153.4 2.9 16.4 2.3 13.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2199.1 2237.9 38.9 3.6 0.2 4.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2199.1 2206.6 7.6 0.9 0.1 7.2
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2220.0 2237.9 18.0 7.4 0.3 6.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2221.5 2225.5 4.0 27.5 0.1 14.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4096 1922.9 2098.0 175.1 1.9 0.2 1.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
1922.9 1925.4 2.5 20.2 1.9 8.2
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
1942.0 1949.8 7.8 4.8 0.2 2.1
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
1960.9 1964.4 3.5 5.2 0.2 2.9
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2049.9 2098.0 48.1 3.2 0.4 3.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2078.4 2098.0 19.6 6.3 0.2 6.7
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2088.8 2098.0 9.2 13.1 0.3 11.9
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2229.8 2238.0 8.2 3.5 0.2 2.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4097 SM 1864.5 2187.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4098 SM 1942.0 2014.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4099 SM 1130.3 2125.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4121 1933.0 2169.8 236.8 3.0 0.2 3.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2064.7 2169.8 105.1 5.5 0.2 5.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2075.1 2091.6 16.5 12.4 0.3 5.9
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2121.3 2169.8 48.5 6.7 0.2 7.7
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2124.4 2145.1 20.7 10.6 0.2 11.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2245.0 2249.3 4.3 4.1 0.1 8.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4122 SM 1828.6 1831.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4123 2570.5 2697.6 127.1 1.8 0.2 3.5
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2570.5 2572.0 1.5 1.5 2.2 28.6
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2578.7 2589.6 11.0 12.0 0.1 8.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2643.0 2697.6 54.6 1.4 0.4 5.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2643.0 2673.1 30.2 2.1 0.6 7.9
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2654.0 2673.1 19.1 2.7 0.2 11.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4124 SM 2071.5 2284.1
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4125 SM 1925.8 2085.8
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4126 SM 2054.1 2055.1
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4127 2453.9 2456.8 2.9 0.7 <0.1 9.6
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2564.4 2605.4 41.0 0.9 <0.1 5.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2577.3 2591.3 14.0 1.3 0.1 3.3
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2602.9 2605.4 2.5 2.5 0.1 53.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2704.8 2716.7 11.9 0.7 0.1 3.4
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2832.0 2844.9 12.9 0.6 <0.1 6.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2840.6 2844.9 4.3 0.9 0.1 15.7
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2967.2 2979.0 11.8 0.8 0.2 1.7
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX4130 2665.9 2780.3 114.4 13.8 1.0 8.1
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2665.9 2707.4 41.5 19.5 0.9 10.1
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2724.6 2743.4 18.8 19.9 3.1 12.9
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2736.6 2743.4 6.8 7.9 7.2 12.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
2762.1 2769.1 7.0 26.2 1.1 11.0
--------------- ---------- ----------- ----------- ---------- ----------- ----------- -----------
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Norman Property: 2000 Deposit
Longitudinal Section (Looking Northwest)]
FNX Mining Company Inc.
23 March, 2004
8.3.3.4 Sublayer Lens A
A total of 13 holes (9596.7 ft) was drilled to test contact style Ni-rich
lenses in the sublayer proximal to the Whistle Pit at a vertical depth of 400
to 550 ft (Figure 15). Lens A consists of three known tabular bodies in close
proximity, the largest is currently 375 ft strike length by 200 ft dip length.
Table 14 lists significant intersections
Table 14: Norman: Sublayer Lens A - Graded Assays
------------------------------------------------------------------------
Feet. %
------------------------------------------------------------------------
DDH From To Length Cu Ni
------------------------------------------------------------------------
FNX4057 nsa
------------------------------------------------------------------------
FNX4059 195.0 457.7 262.7 0.2 1.0
------------------------------------------------------------------------
507.1 532.3 25.2 0.2 1.8
------------------------------------------------------------------------
517.2 532.3 15.1 0.2 2.7
------------------------------------------------------------------------
FNX4060 179.1 416.7 237.6 0.2 0.8
------------------------------------------------------------------------
379.7 411.7 32 0.2 1.2
------------------------------------------------------------------------
FNX4061 182.5 500.3 317.8 0.1 0.6
------------------------------------------------------------------------
367.8 393.4 25.6 0.2 1.2
------------------------------------------------------------------------
FNX4062 138.0 543.2 405.2 0.1 0.7
------------------------------------------------------------------------
454.1 469.0 14.9 0.2 1.1
------------------------------------------------------------------------
FNX4063 172.4 386.2 213.8 0.1 0.7
------------------------------------------------------------------------
318.2 381.2 63.0 0.2 0.9
------------------------------------------------------------------------
500.8 545.2 44.4 0.2 0.9
------------------------------------------------------------------------
623.8 638.4 14.6 0.4 0.8
------------------------------------------------------------------------
FNX4064
------------------------------------------------------------------------
FNX4069 575.4 635.1 59.7 0.1 1.0
------------------------------------------------------------------------
606.0 635.1 29.1 0.2 1.4
------------------------------------------------------------------------
8.3.3.5 Offset Exploration
General exploration in addition to that on the 2000, North, South and Lens A
nickel targets consisted of surface mapping and drilling. 9 (Figure 18).
A total of 8 drillholes (17,560 ft) was completed within the Whistle Offset
outside of the known mineralized zones in previously unexplored areas.
Significant mineralization is listed in Table 15. Geological interpretation
and 3-D modelling of the offset was improved with this drilling.
Table 15: Norman: Offset Exploration - Graded Assays
-------------------------------------------------------------------------------
Feet. % g/t
-------------------------------------------------------------------------------
DDH From To Length Cu Ni TPM
-------------------------------------------------------------------------------
FNX4053 nsa
-------------------------------------------------------------------------------
FNX4058 nsa
-------------------------------------------------------------------------------
FNX4065 nsa
-------------------------------------------------------------------------------
FNX4067 nsa
-------------------------------------------------------------------------------
FNX4068 1910.25 1913.30 3.05 1.69 3.57 13.79
-------------------------------------------------------------------------------
FNX4070 nsa
-------------------------------------------------------------------------------
FNX4072 1383.10 1398.90 15.80 2.08 0.06 1.31
-------------------------------------------------------------------------------
FNX4073 nsa
-------------------------------------------------------------------------------
FNX Mining Company Inc.
23 March, 2004
8.3.3.6 Sublayer Exploration
A total of four holes (8,508 ft) was drilled to test the SIC for contact style
Ni mineralization. Two of these holes were planned to target offset locations
in conjunction with the Sublayer target and their total footage (4858 ft) has
also been reported in section 8.3.3.5 Offset Exploration above.
Table 16: Norman: SIC Exploration - Drillhole Assay Intersections
-------------------------------------------------------------------------------
Ft % g/t
-------------------------------------------------------------------------------
DDH From To Length Cu Ni TPM
-------------------------------------------------------------------------------
FNX4153 nsa
-------------------------------------------------------------------------------
FNX4066 nsa
-------------------------------------------------------------------------------
FNX4067 332.20 335.20 3.00 0.14 1.22 0.06
-------------------------------------------------------------------------------
FNX4067 932.65 937.20 4.55 0.36 1.21 0.31
-------------------------------------------------------------------------------
FNX4068 437.00 447.70 10.70 0.50 1.32 0.32
-------------------------------------------------------------------------------
A total of 15 short holes (581.4 ft) was drilled to test the depth extent of
surface Ni mineralization in the sublayer immediately to the east of the
Whistle pit. These intersections delineated a small tonnage deposit
8.3.3.7 Other Norman Exploration - Cougar Zone
The Cougar Zone is an as yet undelineated body of mineralization that has
repeatedly been intersected by drillholes targeting the 2000 Deposit. The
mineralization consists of chalcopyrite veins +/- millerite +/- PM minerals.
Vein orientations and concentrations have not been established. A single hole
(2500 ft) was drilled to test west of the Whistle embayment for footwall style
mineralization and intersected as presented in Table 17.
Table 17: Norman: Cougar Zone - Graded Assays
--------------------------------------------------------------------------------
Target Feet. % g/t
--------------------------------------------------------------------------------
DDH From To Length Cu Ni TPM
--------------------------------------------------------------------------------
FNX4071 Cougar 1372.3 1377.9 5.6 3.4 0.6 0.9
--------------------------------------------------------------------------------
and 1602.3 1620.6 18.3 4.0 0.1 1.4
--------------------------------------------------------------------------------
Mapping of the SIC contact, the embayment and the offset from the embayment to
the North Deposit has been partially completed and is continuing. Additional
mapping in the footwall of the SIC and within the Whistle Offset to the
northeast of the North Deposit is planned.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Norman Property: Surface Geology and Mineralized Zones]
FNX Mining Company Inc.
23 March, 2004
8.3.4 Recommended Work Program and Budget
The main emphasis of the 2004 exploration program is dedicated to drilling on
the 2000 Deposit and testing the SIC contact environment on the Norman
Property. Exploration on the 2000 deposit will consist of infill drilling
within the known mineralized envelope and continued drilling to define the
limits of the mineralized system and possible extensions of the deposit. This
drilling will facilitate a decision on a future underground advanced
exploration program.
The Norman property includes approximately 2 kilometres of Sudbury Igneous
Complex contact which has seen limited exploration in the past. Two zones of
significant mineralization (Whistle West and Wildcat zones) have been
previously identified along the contact (Figure 17). A ground EM survey was
completed in early 2004 and this will help drillhole targeting at moderate
depths along the SIC contact. In addition, much of the SIC contact on the
Norman property is below the penetration limits of EM geophysical surveys and
will require drilling and borehole EM surveying to help direct the
exploration. Other potential areas of interest on the Norman property include:
1 the extensive Sudbury Breccia zones which can host footwall style
mineralization,
2 Ni rich contact style mineralization extending below the Whistle
Pit (Lens B),
3 the northeast extension of the Whistle Offset dyke,
4 Southwest extension of the Whistle Offset beneath the SIC, south of
the known 2000 Deposit.
The above program is budgeted at $ 3.3 million.
In addition to the above program and budget, the drilling at both the Norman
North and 2000 deposits has indicated bodies of mineralization which require
further investigation prior to permitting resource/reserve estimations. It is
apparent that continued drilling from surface will not provide the necessary
information and consideration is being given to going underground on both
deposits. The Norman 2000 may be accessed by a shaft while a ramp may be the
most appropriate means of accessing the North Deposit. The purpose of this
advanced exploration program will be to develop a better understanding of ore
controls, grade distribution, continuity of mineralization and allow the
recovery of bulk samples for metallurgical testwork. These activities will
culminate in a feasibility study to determine the viability of mining one or
both deposits. This program has been budgeted separately.
FNX Mining Company Inc.
23 March, 2004
8.4 VICTORIA PROPERTY
8.4.1 Location, History, Infrastructure & Environment
The Victoria Property, comprising 1,282.9 acres (519.3 ha) of mining rights
contained in two patented mining parcels, is located 30 km southwest of
Sudbury in Denison Township (Figures 1 & 19). Access is via paved roads and a
rail spur from the main CPR line is located 2.5 km south of the property.
Copper and nickel sulphide mineralization was discovered in 1886. Following
the 1899 acquisition of the property by the Mond Nickel Company, ore
production and shaft sinking continued from 1900 to 1918. In 1918 a vertical
three-compartment production shaft was sunk to a depth of 3,012 ft During the
period 1900-1923, 888,000 tons of ore averaging 2.99% Cu and 2.12% Ni were
produced. Following cessation of mining in 1923 the mine was flooded. The
property was acquired by Inco in 1931 following the merger with Mond Nickel.
During the period 1945-1964, 175 surface exploration holes were drilled to
delineate the Victoria West low-grade zone. The mine was dewatered in 1969 and
production resumed in 1973. A total of 649,000 tons of ore averaging 1.26% Cu,
0.83 % Ni, 0.067 oz/ton Pt-Pd-Au was produced between 1973 and 1978 when the
mine was closed and flooded. The principal extraction methods at that time
were shrinkage and long-hole mining. The total historical production for the
Victoria property was 1,543,000 tons grading 2.26% Cu and 1.57% Ni, + TPM.
(Table 1). The TPMs, in the order of + 2 g/t, are extrapolated from the
production data for 1973-78.
Infrastructure at Victoria consists of a three-compartment vertical shaft
measuring 5.0 ft by 13.5 ft, sunk to a depth of 3000 ft, with development on
18 Levels. Exploration drifts were driven on the 1350 and 3000 ft Levels.
Following termination of mining activity in 1978 the, the underground workings
were flooded, and the shaft capped. No surface infrastructure remains. Some
closure work has been done on the site under Inco's ongoing environmental
reclamation program. The site of the old shaft has been fenced off and grassed
over.
FNX has initiated a baseline monitoring program to characterize current
conditions at target exploration areas at the Property. The program has
focused on both terrestrial and aquatic systems. The data that have been
collected will identify existing liabilities and support permit applications
for advanced exploration and production. The terrestrial assessment focused on
the identification of biological values (i.e. provincially significant
wetlands; presence of rare, threatened or endangered species, heron rookery,
etc) that require protection. This information has been used to sterilize
certain areas from surface development. As part of this assessment, land
within the property boundary was classified in accordance with the Forest
Ecosystem
FNX Mining Company Inc.
23 March, 2004
Classification System. Assessment work also quantified metal levels
in vegetation at the property. A sampling campaign to determine the metal
content of upper soil horizons within the proposed site footprint will be
completed prior to re-establishing infrastructure at the site.
The aquatic assessment, conducted in accordance with Environment Canada's
Environmental Effects Monitoring guidance documents, examined surface water
and sediment quality, as well as the fish and benthic invertebrate
communities. Surface water monitoring has been on-going. Watershed boundaries
have been delineated within the property boundary and creek flows in the
receiving environment are continuously monitored.
A site characterization will be completed by a third party consultant in
second quarter 2004. This will serve to define existing mining disturbances at
the Victoria property.
The Company has held introductory meetings with Sagamok and Whitefish Lake
First Nation. In addition, the Company holds regular discussions with
recreational users including the Sudbury Trail Plan regarding the snowmobile
trails on the property.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: Denison Township]
FNX Mining Company Inc.
23 March, 2004
8.4.2 Property Geology & Mineralization
The Victoria property is situated at the junction of the SIC and the
Worthington quartz diorite offset dyke, approximately 6.5 km northeast of
Inco's Totten property. Other mineralized locations are known along the
Worthington Offset between the Victoria property and the Totten Mine. Two of
these, the adjacent McIntyre deposit and the AER/Kidd Copper property, located
3 km further southwest from the Victoria property, were the objects of small
mining operations.
Within the property, both the footwall contact of the SIC and the Worthington
Offset Dyke dip steeply about the vertical. Both intrude sheared and
metamorphosed mafic volcanic and sedimentary rocks of the Stobie Formation.
Zones of Sudbury Breccia occur throughout the property as discontinuous
lenses. Late quartz diabase and olivine diabase dykes cross-cut all
lithologies. Two dominant structural shear directions, one set trending
northwest-southeast and the other trending northeast-southwest, have been
defined and these control the distribution of mineralization on the property.
The Cu-Ni-PGM sulphide mineralization at the Victoria property is
characterized by a complex assemblage of irregular lenses of chalcopyrite,
pentlandite and pyrrhotite. The lenses dip and plunge steeply and are
typically pipe-like (Figure 3). The complex structural features of the
property have caused remobilization of the sulphides and control the lateral
extent and dimensions of the mineralization.
8.4.3 Targets
Numerous zones of Cu-Ni-PGM mineralization are present on the Victoria
property (Figures 20 & 21) and four of these, the No. 4 Zone; West Zone; No. 1
West and No. 2 West Zones, have been mined. In addition to the above, there
are several other known mineralized zones on the property which have not been
the focus of historical production. These include the Far West Zone, the East
Zone, the Dyke Zone, and the newly discovered Powerline Zone. The main focus
of the FNX exploration program has been the shallow, previously unmined
portions of the No. 1 and No. 2 West Zone, the Far West zone, and the
down-plunge potential of the No. 4 zone. In addition, limited exploration has
been completed on the numerous quartz diorite offset dykes bodies on the
property, resulting in the discovery of the Powerline Zone in late 2002.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: Geology Plan]
FNX Mining Company Inc.
23 March, 2004
8.4.3.1 No. 4 Zone
The No. 4 Zone lies 820 ft east of the Victoria shaft and contains Cu-Ni-PGM
bearing sulphides hosted by diorite, quartz diorite, metagabbro and
metasedimentary rocks. The zone lies along a southeast striking trend of
discontinuous quartz diorite and Sudbury Breccia, which is host to both the
West and No.4 zones. The No. 4 zone was mined above 750 ft Level. The possible
down dip extension of the No.4 Zone represents an area of 400 by 2200 ft
During the 2003 season four holes were drilled east of the No. 4 Zone to
follow-up mineralization in an historic hole and an associated off-hole UTEM
anomaly outlined by FNX in 2002. Three of these holes intersected variable
widths of stringer to semi-massive mineralization grading up to 0.5% Cu, 1.2 %
Ni, 2.4 g/t TPM over 4. 9ft. This drilling, while identifying a thin,
continuous zone of mineralization along the edge of the Quartz Diorite and
confirming the geological model, failed to intersect mineralization of
economic significance.
8.4.3.2 West Zone
The West Zone was the focus of previous production at Victoria and was mined
to a depth of 3,000 ft Cu-Ni-PGM sulphide mineralization occurs as
structurally controlled massive to inclusion-rich massive sulphide adjacent to
the SIC contact and graded assays for representative historic holes drilled
below the mined-out area are as follows:
o 2.6% Cu, 1.0% Ni, 3.6 g/t TPM over 5.2 ft in drillhole 470920
o 1.1% Cu, 0.5% Ni, 1.9 g/t TPM over 18.0 ft in drillhole 470930
o 2.1% Cu, 1.3% Ni, 4.6 g/t TPM over 21.4 ft in drillhole 501340
These holes (Figures 21 & 22) confirm that the mineralization extends at least
a further 700 ft below the 3000 Level. The intersection in DDH 501340 is
located some 250 ft below 3000 Level, while the downward continuation of the
mineralized envelope to at least 3700 L was confirmed by drillhole 470980.
These holes are widely spaced and more detailed drilling is required to
further explore this zone.
Though no exploration or diamond drilling was carried out during 2003, surface
exploration drilling and borehole UTEM-4 is recommended to test the
down-plunge extension of the West Zone.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: Longitudinal Section
(Looking North) Target Areas]
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: Longitudinal Section (Looking North)
West Zone Below 3000 L]
FNX Mining Company Inc.
23 March, 2004
8.4.3.3 No. 1 West Zone
The No. 1 West Zone, (Figure 21), is located 330 ft west of the Victoria shaft
and consists of a structurally controlled, steeply plunging, zone of Cu-Ni
sulphides. The zone has been traced from surface to approximately the 2000
Level where it is still open to depth. The zone may be best divided into
shallow and deep sections. Both sections have been explored primarily by
diamond drilling from both surface and underground with a drift on the 1350
Level serving as a drilling platform for the deeper section
8.4.3.3.1 No. 1 West Zone - Shallow
During 2002 FNX completed 20 diamond drillholes, totalling 6,087 ft within the
shallow part of the No. 1 West Zone. The drilling was completed on
approximately 50 ft centers and the assay results (presented previously) are
consistent with historical Inco drilling and have defined the mineralization
over a 350 ft strike length and down to the -200 ft vertical level, including
a thicker core with 100 -150 ft strike length. Intersections from the core of
the zone include: 0.6% Cu, 0.8% Ni, 2.7 g/t TPM over 90.7 ft (including 0.8%
Cu, 1.9% Ni, 9.6 g/t TPM over 17.4 ft) and 0.8% Cu, 0.7% Ni, 1.9g/t TPM over
68.0 ft .
No drilling was completed on the Shallow portion of the No.1 West zone during
2003. Future work will include re-evaluation of the data compiled to date and,
if warranted, resource evaluation and or more drilling on the zone.
8.4.3.3.2 No. 1 West Zone - Deep
The results from historic drilling the deeper part of this zone indicated
significant mineralization over substantial intersection: These previously
reported intersections include1.56% Cu, 2.55% Ni, 5.1 g/t TPM over 20.4 ft.
and 0.89% Cu, 0.19% Ni, 0.21 oz/t TPM over 11.4 ft. These intersections
support the presence of a mineralized envelope within which local higher
values are present and it should be noted that drillhole 615550 is open down
dip. Though FNX has not tested this zone it warrants additional exploration
drilling, as it appears to be open down dip and down plunge towards the 3000
ft Level.
Analogies with other deposits along the Worthington Offset suggest that
significant PGM mineralization could occur at increased depth in this
geological environment.
8.4.3.4 No.2 West Zone
The No.2 West Zone, (Figures 20 & 23), is adjacent to and some 400 ft west of
the No.1 West Zone. The Zone is similar to the No. 1 West in that
historically, a shallow, near-surface, zone has been outlined by drilling. The
zone is hosted in sublayer norite hosted with a Ni-Cu-PGE zone at the base of
the SIC. It consists of narrow, steeply dipping lenses, of high grade
mineralization contained within a wider interval of low grade mineralization
in the sublayer norite. Three styles of mineralization are recognized,
including a broad sheet of stringer to locally massive sulphide at the base of
the sublayer unit, blebby sulphides within the sublayer norite and stringer
sulphides concentrated along shear zones within the sublayer. A narrow zone of
high grade, massive Cu-Ni-TPM mineralization exists within the broad envelope
of mineralization at the base of the sublayer. This high grade core was
partially mined by Inco from the 1350 Level.
FNX Mining Company Inc.
23 March, 2004
Exploration by FNX in 2002 outlined the stringer to semi-massive sulphides at
the base of the SIC over a 900 ft strike length and also defined the high
grade massive core from surface down to the 800 ft vertical level, to within
400 ft of the previously mined portion. This zone returned intersections
grading up to 3.12% Cu, 2. 03 % Ni, 4.11 g/t TPM over 44.4 ft
Work on the No. 2 West Zone in 2003 focused on geological interpretation and
modeling to facilitate resource estimation. A detailed surface structural
mapping program was integrated with the drillhole data to help with geological
modeling and interpretation. In addition, two holes were drilled to test the
eastern extension of the high grade shear hosted mineralization within the
sublayer. These holes were targeted 100 ft east of the known mineralization,
at the 400 ft and 600 ft vertical level. Both holes intersected significant
mineralization grading up to 0.4% Cu, 1.0 % Ni, 1.7 g/t TPM over 29.5 ft,
including 0.5% Cu, 1.5 % Ni, 3.5 g/t TPM over 7.8 ft.
Historic drilling has tested the No. 2 West Zone to below the 3000 Level and
two holes demonstrate the potential of this deep part of the zone as follows:
2.03% Cu, 0.35% Ni, 1.6 g/t TPM over 34.6 ft at the 1900 Level and 1.11% Cu,
0.66% Ni, 3.6 g/t TPM over 162.7 ft immediately below the 3000 Level. FNX has
not completed any exploration on the deep portions of the No. 2 West zone to
date.
For 2004 the Victoria Property exploration program will focus on further
delineation and infill drilling of the No. 2 West Deposit. For these purposes
4,800 ft of surface diamond drilling is allocated to facilitate a
pre-feasibility study.
Historic drilling has tested the No. 2 West Zone to below the 3000 L (Figure
21) and two holes demonstrate the potential of this deep part of the zone with
2.03% Cu, 0.35% Ni, 1.6 g/t TPM over 34.6 ft at the 1900 Level and 1.11% Cu,
0.66% Ni, 3.6 g/t TPM over 162.7 ft immediately below the 3000 Level.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: No. 2 West Zone
Longitudinal Section (Looking North)]
FNX Mining Company Inc.
23 March, 2004
8.4.3.5 Far West Zone
Historical drilling by Inco on the Far West Zone identified significant widths
of low grade Cu-Ni mineralization within sublayer rocks at the contact of the
Sudbury Igneous Complex. As part of the 2002 FNX exploration program, four
holes were drilled on the down-plunge trend of the historical drilling to
explore for a higher grade core within the low grade sulphide zone. No
high-grade or massive sulphide zones of economic significance were indicated
from the FNX drilling (results previously reported). . Borehole UTEM surveys
were completed and the responses indicate a broad zone of weak conductivity.
No work was completed on the Far West Zone during the 2003 exploration season.
8.4.3.6 Powerline Deposit
The Powerline Deposit is a new discovery made by FNX Mining in 2002. The zone
is located approximately 1,100 ft south of the No. 4 Zone at the western
termination of an east-west striking quartz diorite body (Figures 20 & 24).
The mineralization is associated with a narrowing of the host quartz diorite
Offset Dyke where the wallrocks of the dyke comprise zones of intensely
sheared Sudbury Breccia. Near surface drilling by FNX in 2002 intersected
similar lower grade, stringer sulphide mineralization above the 100 ft level.
Deeper drilling on the zone (>100 ft) resulted in the discovery of high-grade,
massive to semi-massive sulphide mineralization extending to depth. . The high
grade core of the zone returned assays (previously reported) up to 6.7 % Cu,
1.3% Ni, 13.3 g/t TPM over 42.3 ft and including 7.7% Cu, 1.5% Ni, 15.5 g/t
TPM over 35.8ft
The 2003 drilling focused on defining the limits of the Powerline Deposit and
to locate a possible extension below the 600 ft vertical level, where
mineralization was truncated by a fault. Drilling during the year also tested
for a possible western strike extension of the Powerline Deposit. This
drilling encountered a second, though smaller, massive sulphide lens grading
up to 4.9% Cu, 1.9% Ni and 15.2 g/t TPM over 6.3 ft Drilling down-plunge and
further to the west of the Powerline Deposit encountered no significant
mineralization.
In total, since April 1, 2003, to March 23, 2004 an additional 6,099 ft were
drilled around the Powerline in 13 holes (Table 18 & Figure 24). Future work
on the Powerline deposit will include detailed 3-D modeling and resource
estimation.
Future work on the Powerline Deposit will include exploration for the possible
fault displaced extension of the zone as well as detailed 3-D modeling and
resource estimation.
FNX Mining Company Inc.
23 March, 2004
Table 18: Victoria Property - Powerline Deposit: Graded Assays - 2003
------------ ------------------------- --------------- ------------------------------
Borehole Ft % g/t
------------ ------------------------- --------------- ------------------------------
From To Length Cu Ni Pt Pd Au TPM
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1135 191.9 194.4 2.5 0.69 1.72 0.20 2.43 0.03 2.66
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
and 384.2 387.5 3.3 2.64 0.84 0.64 1.73 4.03 6.40
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1136 232.8 233.7 0.9 1.34 0.32 0.72 0.86 0.12 1.70
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1137 289.3 290.6 1.4 6.22 0.47 0.27 1.38 0.18 1.83
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1138 63.9 64.9 1.0 1.32 0.60 0.43 0.65 0.11 1.19
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1140 15.8 19.2 3.4 0.75 0.51 0.11 1.06 0.05 1.22
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1141 14.9 16.3 1.4 1.17 0.54 0.08 1.15 0.31 1.54
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1142 411.5 412.4 0.9 0.92 0.44 0.02 5.10 0.19 5.31
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
and 416.1 417.4 1.3 2.88 0.24 0.10 0.63 0.03 0.76
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1147 43.50 44.90 1.40 0.21 2.15 0.78 1.54 0.12 2.44
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
and 48.70 49.70 1.00 0.68 0.57 0.16 1.43 0.05 1.64
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1148 49.00 55.30 6.30 4.90 1.85 2.64 12.36 0.21 15.21
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1150 153.50 154.30 0.80 0.40 1.44 0.90 4.64 0.07 5.61
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1151 122.20 124.00 1.80 1.50 1.31 1.26 3.40 0.11 4.77
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1152 57.60 62.90 5.30 0.76 2.28 0.29 3.77 0.04 4.10
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
FNX1153 124.10 130.60 6.50 0.43 1.93 0.57 3.31 0.17 4.04
------------ ------- -------- -------- ------- ------- ------ ------- ------- -------
8.4.3.7 Offset Dyke Targets
In the second half of 2003 drilling focused on quartz diorite bodies located
in the southern and eastern portions of the Victoria Property. A downhole
Pulse EM survey using historic drill holes helped to direct the exploration
efforts. Using the EM responses and historic intersections, the Sudbury Joint
Venture completed nine drill holes totaling 12,599 ft targeting the quartz
diorite areas. While several of the holes intersected anomalous
mineralization, no intervals of economic significance were identified.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Victoria Property: Powerline Deposit Longitudinal
Section (Looking South West)]
FNX Mining Company Inc.
23 March, 2004
Recommended Work Program and Budget
As noted above the Victoria property is in-board from the Totten deposit which
is also on the Worthington Offset dyke. A new deposit with published resources
in excess of 10 million tonnes and grading approximately 2.0% Cu; 1.5% Ni and
4.8 g/t PGM has been announced by Inco. It is anticipated that the announced
resources will be increased significantly. The important point of this analogy
is that this new deposit has been found below and adjacent to an older deposit
which was mined during the 1960s.
Much of the FNX exploration program in 2003 program focused on the
under-explored Quartz Diorite bodies on the Victoria property. Evaluation of
the new data acquired from the drilling, along with historical data will
enable more complete 3-D re-modeling of the structurally complex Quartz
Diorite bodies and develop a better understanding of their relationship with
other geological units and structures on the Victoria Property. These new data
should assist in defining irregularities (which commonly focus sulphide
mineralization) within the offsets, and possibly generate new exploration
targets on the property.
The No. 2 West Deposit mineralization is open in several directions. Computer
block modeling and resource evaluation will be completed on the deposit to
help define its economic potential and whether or not further drilling is
necessary at this stage. The Powerline deposit and it's newly drilled western
extension should be modeled and a resource estimation completed.
A budget of $133,000 (4,800ft drilling) has been approved for the 2004
Victoria exploration program
FNX Mining Company Inc.
23 March, 2004
8.5 KIRKWOOD PROPERTY
8.5.1 Location, History, Infrastructure & Environment
The Kirkwood property, comprising 473.0 acres in three patented mining
parcels, is located in Garson Twp., some 11 km northeast of Sudbury, (Figures
1 & 25). The property is easily accessible by road and a rail line passes
approximately 1.0 km south of the project area.
Copper and nickel sulphide mineralization was discovered in 1892 and the
property was purchased by the Mond Nickel Company. During the period
1914-1916, three shallow shafts (38 m; 61 m; & 18 m) were excavated and
production totalled 71,600 tons grading 1.53% Cu and 2.81% Ni. The mine was
closed and flooded in 1916. The property was acquired by Inco following the
acquisition of Mond Nickel and exploration drilling was carried out during the
period 1947-1964.
In 1969 a new vertical, three-compartment shaft was excavated to a depth of
650 m. A total of 2,488,000 tons of ore averaging 0.99% Cu and 0.87% Ni was
produced from the Main and East orebodies between 1969 and 1976. A total of
134,000 tons of ore grading 0.96% Cu and 0.53% Ni was produced from a small
open pit from 1970-1972. The total historical production from the Kirkwood
property was 2,695,000 tons grading 1.00% Cu and 0.90% Ni.
Exploration drifts were driven on the 1,000 and 2,000 ft levels and
underground drilling was carried out to the east and west of the shaft. This
program outlined extensive contact mineralization in the West Zone and contact
mineralization in the 3800 Zone to the east. In addition, mineralization
associated with a quartz diorite dyke was also outlined to the east of the
shaft. There has been limited surface exploration drilling and mapping
completed at Kirkwood since the mine closure and flooding in 1977.
Infrastructure at Kirkwood consists of a three-compartment vertical shaft
measuring 9 ft by 18 ft, excavated to a depth of 2100 ft Level development
occurs on the 100, 200, 300, 400, 600, 800, 1,000, 1,200, 1,600 and 2,000 ft
levels. The underground workings are flooded and the shaft has been capped.
There are open pits and a head frame with associated auxiliary buildings as
well as mine water settling ponds on the site. Hydroelectric power is
currently available to the project site.
An environmental site characterization was completed by a third party
consultant in the first quarter 2004. This study defined existing mining
disturbances at the property, delineated watershed boundaries and established
an upstream and a downstream monitoring station in the on-site creek. These
monitoring programs will maintain compliance with regulatory requirements and
will also establish an environmental baseline so as to distinguish between
existing and incremental liabilities resulting from Joint Venture activities.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Kirkwood Property Garson Township]
FNX Mining Company Inc.
23 March, 2004
8.5.2 Property Geology & Mineralization
The Kirkwood property is located towards the southeast end of the Sudbury
Basin at the contact between the SIC and the Elsie Mountain metavolcanics
(Figures 1). The contact strikes east-west and dips steeply to the south. The
footwall norite is medium-grained and generally sheared at and adjacent to the
contact. The hangingwall consists of a series of metamorphosed sediments and
volcanics with minor schist zones.
An east-trending quartz diorite dyke occurs south of the norite contact within
a zone of Sudbury breccia, which parallels the norite contact.
8.5.3 Targets
Cu-Ni-PGM sulphide mineralization at Kirkwood has been defined in six distinct
zones. These are the Main, East, West, Lower East, Quartz Diorite and 3800
zones. Four of these zones are shown in Figure 30. The higher-grade Main and
East orebodies were mined during the period 1969 to 1976, leaving
unrecoverable remnant pillars of mineralization. The West, Lower East and 3800
zones contain low-grade Cu-Ni-PGM mineralization, which has not been mined.
Additional evaluation of these zones is warranted to determine if there is
potential for mineable zones of higher-grade material with possible PGM
enrichment.
8.5.3.1 West Zone
The West Zone, lying to the west of the shaft and down dip from the East Zone
(Figure 26), consists of a large mass of disseminated sulphides with minor
massive sulphide bands within norite adjacent to the contact with the
volcanics and sediments. The Zone extends 2000 ft west of the main shaft, dips
steeply south and has an average thickness of 30 ft Cu-Ni-PGM mineralization
has been defined from surface to a depth of 4,300 ft Below this level the zone
is unexplored. Two areas of elevated PGM values (>1.5 g/ton) have been defined
within the larger West Zone mineral envelope.
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - Kirkwood Property: Longitudinal Section
(Looking North Target Areas)]
FNX Mining Company Inc.
23 March, 2004
8.5.3.2 Lower East/3800 Zones
The Lower East and 3800 Zones (Figure 26) can be combined, as one is probably
a continuation of the other. They occur within a broader zone of elevated PGM
mineralization (>1.5 g/t) that plunges to the east at 55(degree). Both zones
have been partially defined by underground drillholes.
The Lower East Zone lies between the 2000 and 3000 Levels and up-plunge from
the 3800 Zone. It consists of disseminated sulphides within norite adjacent to
the contact with the volcanics and sediments. It dips steeply south, has a
strike length of 500 ft and an average thickness of 50 ft
The 3800 Zone of Cu-Ni-PGM mineralization (Figure 261`) is situated on the
3800 Level and centred on section 38200 E. It consists of a vertical zone of
disseminated and inclusion massive Cu-Ni sulphide along the contact between
the SIC and metamorphosed volcanic and sedimentary rocks. The 3800 Zone has a
330 ft strike length, a dip length of 660 ft, and a true thickness of 10-50 ft
Six historic drillholes (previously reported) yielded seven intersections,
five of which are greater than 10 ft, ranging from 2.9 to 81.2 ft
Intersections include 2.31% Cu, 1.28% Ni, 2.7 g/t TPM over 29.0 ft
8.5.4 Recommended Work Program and Budget
FNX has carried out an airborne geophysical survey over the property but no
substantial ground work has been done. Data compilation has been initiated on
this property which, though having potential, is ranked lower than the other
properties described. No field work, apart from the environmental site
characterization, and airborne survey has been carried out. The main target
remains the Lower East and 3800 Zones and the intervening area together with
the depth potential in the untested area below the 4000 Level.
The 2004 program, comprising the continuation of data compilation and limited
ground follow-up, is budgeted at $112,000.
8.6 NORTH RANGE FOOTWALL EXPLORATION
As previously noted, all of the major Inco and Falconbridge past and current
producing mines of the North Range (Strathcona, Coleman, Levack, McCreedy
East, Onaping, McCreedy West, Hardy) occur within an extensively mineralized
8.5 km-long portion of the SIC. Obviously this is an important exploration
target and some 50% of this prolific area is included in the Sudbury Project
Properties subject to this agreement. Of particular interest is the extent of
high-grade Footwall Cu-Ni-PGM deposits on the east side of the Fecunis Fault
compared with that on the west (FNX) side. There is no compelling reason why
such deposits should not occur on the FNX ground and the Footwall exploration
program is designed to test this hypothesis.
FNX Mining Company Inc.
23 March, 2004
The McCreedy West Mine and Levack Mine properties cover some 4 km of this
strike and limited exploration to date in the footwall rocks to the north of
the mines has demonstrated potential for this belt.
Within the McCreedy West property, previous wide-spaced drilling has indicated
favourable zones of Sudbury Breccia with trace Cu-Ni-PGM sulphide
mineralization. On the adjacent Levack property, the brecciated footwall rocks
have been tested by a small drilling program and surface mapping has
identified large zones of favourable footwall Sudbury Breccia.
The aim of the Footwall Project drill program is to test the footwall rocks
along the entire strike length of the contact, up to 1 km into the footwall.
In addition to testing the geology, these holes will serve as platforms for
in-hole UTEM surveys to locate off-hole anomalies.
In the period April 1, 2003 to 23 March 2004, 13 footwall holes, varying in
length from 459 to 4065 feet, were completed on the Levack and McCreedy West
properties for a total of 18,928 feet. Downhole UTEM geophysical surveys
completed on one of these holes did not identify any significant anomalies
that could be attributed to sulphides. UTEM surveys on three other holes are
pending.
Local mapping of the footwall environment during the summer of 2003 has
provided the basis for the initial holes of the 2004 footwall drilling
program. These holes, located 500 ft behind the Main Orebody, were designed to
follow-up anomalous Pt and Pd values associated with Cu veining in
recrystallized Sudbury Breccia. One of these holes (FNX6019) intersected 0.8%
Cu, 2.0% Ni, 1.74 g/t TPM over 12.45 ft, at a depth of 100 ft below surface.
The focus of the 2004 footwall program will be to complete drill holes that
take advantage of the extensive geological mapping and interpretation that
formed a large part of the 2003 program. This will include drilling from both
underground and surface platforms into areas of Sudbury Breccia that are
deemed to have the correct characteristics for potentially hosting Cu-Ni-PGE
deposits. To complete this program, the North Range Footwall Project has been
budgeted 25,000 feet of drilling in 2004 at a cost of $0.97 million...
FNX Mining Company Inc.
23 March, 2004
[GRAPHIC OMITTED - North Range Footwall: Project Levack Embayment
Longitudinal Section]
FNX Mining Company Inc.
23 March, 2004
9. CONCLUSIONS & RECOMMENDATIONS
FNX Mining Company Inc. has exercised their option to acquire five highly
regarded mineral properties (all former producers) in the Sudbury Mining Camp.
FNX (75%), together with their joint venture partner (25%), now own 100%
interest in the mineral rights on the properties.
The potential of these properties is illustrated by the fact that the Joint
Venture commenced ore production at the McCreedy West mine in May 2003, only
14 months after commencement of the exploration program.
Commercial ore production was declared at McCreedy West from November 2003,
and the mine is now ramping up the production rate to the planned 1000 tpd by
mid 2004.
The infrastructure available in the Sudbury Area (mills, smelters and
refineries) together with the mining culture and ready availability of all
services required by an exploration and mining company enhances the value of
these acquisitions and supports more efficient and cost effective mine
development.
The high value of Sudbury ores together with the variety of metals is more
beneficial than reliance on one or two metals. The precious metal content of
the Sudbury ores is also attractive.
FNX has added significantly to the very large historic database made available
by Inco Limited and emphasis is increasingly being placed on these new data.
In the 23 months since field operations began the Company has completed
570,732 ft of diamond drilling in 458 holes from surface and a further 118,165
ft in 252 holes from underground locations. Approximately 49,500 samples have
been sent for assay.
During the year reserves were established at the McCreedy West Mine and these
were audited and confirmed by independent consultants Roscoe Postle Associates
(RPA). Additional resources, also confirmed by RPA, were established at
McCreedy West.
Review of the Inco mineral inventory at Levack led to the establishment of a
most significant mineral resource for that former producer. Yet again, these
in-house estimates made to NI 43-101 standards, were audited and confirmed by
RPA.
RPA also confirmed that FNX practices and procedures meet or exceed industry
standards as required by NI 43-101.
At present seven surface drill rigs and five underground rigs are in operation
focusing on in-fill and exploration drilling at McCreedy West; definition and
exploration at Levack; and detailing the Norman 2000 with a view to making a
decision to initiate an underground advanced exploration program on the North
and 2000 Deposits.
FNX Mining Company Inc.
23 March, 2004
As activities progressed to feasibility and mining stages much more activity
has taken place on the environmental aspects of the program. All baseline
(characterization) studies have been completed on all properties and additional
information compiled and filed in support of closure plan amendments at
McCreedy West and Levack.
Currently, 35 persons comprise the FNX exploration staff in Sudbury, with 25
of these being geoscientists. Two exploration offices are maintained, one in
Sudbury and the other in Levack.
Ore shipments from McCreedy West to the Inco mill commenced in May 2003 and,
following an interruption during the summer, were reinstituted on a continuous
basis in September. From the inception of mining in May 2003 some 140,000 tons
of ore have been shipped to the mill to date.
Mine development, stope preparation and mining have all accelerated at
McCreedy West and currently some 110 persons are employed at the mine.
A review of the properties leads to the following conclusions &
recommendations:
McCreedy West
o The property is located within the western part of the 8.5
km-long North Range mineralized belt which has hosted 16
current and past producers.
o Contact and Footwall deposits have been mined at McCreedy
West (16 million tons) and the differing mineralogy offers
the ability for selective mining as metal prices vary.
o FNX and its Sudbury Joint Venture partner began mining in May
2003 and have shipped 140,000 tons of ore, primarily Ni-rich
contact ore, to the Inco Clarabelle mill.
o FNX declared commercial production from November, 2003.
o Exploration continues at McCreedy West with 71 surface holes
(115,316 ft) and 252 underground holes (118,165 ft) having
been completed on the property since inception of the FNX
program.
o The availability of additional more advantageously positioned
drill platforms resulting from rehabilitated and new mine
openings has led to more emphasis on underground drilling.
o The previously reported independently audited resource
estimate of 1.74 million tons in the measured and indicated
categories were upgraded to 1.36 million tons in the probable
reserves status. This will support Phase 1 Mining for 5 years.
o In addition to these reserves, Mineral resources were boosted
to 0.83 million tons in the indicated and inferred
categories, by the addition of a further 0.5 million tons in
the Inter Main deposit.
o Drilling continued to develop the potential of the PM Deposit
to the extent that an exploration ramp is being excavated
across the deposit in as part of a feasibility to determine
the economic viability of the deposit. Bulk samples will be
taken for metallurgical purposes and will include samples of
both sulphide-rich and low sulphide PGM-rich material.
FNX Mining Company Inc.
23 March, 2004
It is recommended that drilling to extend and delineate the known deposits be
continued, that the exploration ramp into the PM Deposit be advanced as
quickly as possible and that continued testing of new target areas be
continued in order to augment the reserve/resource base thereby significantly
extending the mine life.
Levack Property
o Previous mining at this property, located immediately east of
the McCreedy West Mine, produced in excess of 66 million tons
of Cu-Ni-TPM ore from both Contact and Footwall - type
deposits.
o FNX has completed 40 surface drillholes (87,628 ft) and
tested two main target areas- 1300 and 1900 Zones.
o A review of the Inco mineral inventory for Levack combined
with data from FNX drilling has resulted in a resource
estimation of 4.6 million tons grading 2.1% Ni and 1.0% Cu in
the measured and indicated categories. These estimates have
been independently audited and verified by consultants Roscoe
Postle Associates.
o The 1600 Level from the adjacent McCreedy West mine to Levack
has been rehabilitated for its entire length of 6,800 ft and
drill stations established in the old Levack workings.
Diamond drilling from these underground platforms has just
started and is focused on upgrading the resources as part of
a feasibility study to determine the viability of reopening
the Levack Mine.
o Other targets have been identified and these will continue to
be tested by drilling from surface.
It is recommended that the planned drilling programs be pursued aggressively
with a view to completing the Levack feasibility study later this year.
In addition to the budgeted expenditures, it is anticipated that positive
results at Levack and/or McCreedy West PM deposit will necessitate the
reconditioning of the Levack #2 shaft. This item will require an additional
budget.
Norman Property
o This property is located along the Whistle Offset dyke to the
northeast of the former Whistle mine.
o Drilling has identified three zones of Cu-Ni -TPM
mineralization over a strike length of 2000 ft and from
surface to a depth of 2000 ft together with initial testing
of other targets.
o 158 drillholes have been completed for a total of 220,757 ft
in the three zones
FNX Mining Company Inc.
23 March, 2004
o Though no resource estimates have been undertaken on the
North Deposit, additional drilling has assisted in our
understanding of the controls to mineralization.
o An additional 26 holes (75,279 ft) have been completed on the
2000 Deposit, centered around 2,000 ft below the Whistle Open
Pit mine.
o This drilling has outlined an area of significant Cu (Ni)
-TPM grades within an envelope of lower grade mineralization.
o Drilling is continuing on the 2000 Deposit.
o Limited drilling has extended the area of the Ni resource
immediately below the Whistle Pit.
o It is apparent that a feasibility study of the viability of
the North and 2000 Deposits cannot be completed without an
advanced underground exploration program to develop adequate
information on the controls to, and distribution of, the
mineralization. Upon completion of the in-fill drilling on
the 2000 Deposit, a decision will be made whether to proceed
with this underground program.
It is recommended that the planned exploration program as outlined proceed and
that, following the completion of the drilling on the North and 2000 Deposits,
a decision to proceed with an underground exploration program be made. Such a
program would be budgeted in addition to the approved 2004 exploration budget.
Victoria
o 167 holes have been completed by FNX for 101,079 ft of
diamond drilling.
o Both Contact and Offset - type deposits have been confirmed.
o The shallow drilling has confirmed the presence of
significant shallow mineralization with open-pit potential in
the #2 West Zone Contact Zone and has discovered a high grade
massive sulphide core to the zone.
o The Powerline Deposit, discovered during 2003, contains
significant Cu, Ni and TPM values. Follow up drilling
outlined a small tonnage deposit and also found a satellite
deposit along strike to the west. These discoveries, drilled
to shallow depths, demonstrate the potential of the offset
environment on the Property and will require additional
drilling.
o Resource estimate studies are being undertaken on the #2 West
deposit and will be carried out on the Powerline Deposit
o The presence of significant TPM values will enhance the value
of any ore produced.
It is recommended that the budgeted exploration program be completed in order
to continue assessment of this Property.
FNX Mining Company Inc.
23 March, 2004
Kirkwood
o Historic drilling has outlined a potential target at this
former producer.
o An airborne geophysical survey and preliminary data
compilation have been completed.
o An environmental site characterization, setting the
environmental baseline before substantial site disturbance,
has been completed by an independent consultant.
It is recommended that the limited exploration program, budgeted at $112,000
be undertaken.
North Range Footwall Exploration
This is essentially a grass roots exploration of the potential for near
surface footwall-type Cu-Ni-TPM deposits in a 4.5 km section of the North
Range mineralized belt.
o Footwall mineralization has been mined in the McCreedy West
and Levack mines down dip to the south make this project very
attractive.
o Surface occurrences of footwall-type mineralization are known
for in excess of 1500 ft into the footwall on both properties
o Footwall deposits are being mined at a distance of 3000 to
4000 ft into the footwall on adjacent properties.
o Mapping, surface geophysical surveys and drilling have shown
the presence of favourable mineralized Sudbury Breccia and
narrow Cu - TPM veins with high grades have been intersected.
o The program includes follow up of these veins in addition to
testing new targets developed from continuing exploration.
Drilling will be from both surface and underground platforms.
It is recommended that the 2004 exploration program, budgeted at $0.97
million, be completed.
Recommendations
It is recommended that FNX Mining Company Inc. proceed with the technical
programs outlined for each of the properties and that the 2004 program,
budgeted at $12.5 million, be executed.
FNX Mining Company Inc.
23 March, 2004
10. BUDGET
The work program as outlined above is budgeted at $12.5 million including
administration and contingency allowances (Table 19).
The objectives of this program are;
o to upgrade the resource estimates made for some of the
targets to reserve status;
o to complete resource estimates for those deposits which have
been advanced during the 2002 exploration program
o to investigate the potential viability of other known
deposits
o to continue to carry out all activities in an environmentally
sound and safe manner
The work program recommended for the McCreedy West mine will use the
underground workings for drill platforms thereby reducing drill costs
significantly while permitting a much more rapid assessment to be undertaken.
As in 2002, all components of the overall program are flexible in that full
expenditure of the budgeted amount for each property will depend on results
and uncommitted funds may be re-allocated to aggressively pursue the most
successful programs.
As at April 30th 2003, total expenditures, since inception, on the Sudbury
Joint Venture, including underground exploration reconditioning and
development amount to $21,100,000
FNX Mining Company Inc.
23 March, 2004
SUDBURY JOINT VENTURE - FNX MINING EXPLORATION BUDGET - 2004
----------------------------------------------- ----------------------------- --------- -----------
TABLE 19: EXPLORATION BUDGET
----------------- ----------------------------- ----------------------------- --------- -----------
ACTIVITY MCCREEDY WEST LEVACK NORTH NORMAN
RANGE
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SURFACE UNALLOCATED U/G SURFACE UNALLOCATED U/G
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
DRILLING
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
Surface $143,520 $680,000 $642,500 $1,649,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
U/G $2,086,800 $472,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
PRE DEV DRLG $250,160
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
PERSONNEL $325,000 $337,500 $201,600 $95,000 $270,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
CAD/GIS $40,650 $40,650 $13,550 $40,650
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
IT $38,200 $26,400 $14,700
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
RES/RES $125,000 $125,000 $10,000 $100,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
QA/QC $51,600 $51,656 $51,600
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SAFETY HEALTH $25,000 $20,000 $7,200
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
ENVIRONMENTAL $125,000 $80,000 $180,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
GEOPHYSICS $46,500 $142,250 $55,000 $180,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
STR. GEOLOGY $29,250 $19,500 $0 $29,250
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
PROP.MAINTEN.
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
PREFEASIBILITY $110,000 $86,000 $140,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
VEHICLES $30,000 $40,000 $30,000 $10,000 $10,900 $35,000
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SUDBURY ADMIN $124,125 $124,125 $124,125
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SUB-TOTAL $298,520 $805,325 $2,824,460 $983,906 $557,275 $568,000 $826,950 $2,821,525
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
7% INDIRECT $20,896 $56,373 $197,712 $68,873 $39,009 $39,760 $57,887 $197,507
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SUB-TOTAL $319,416 $861,698 $3,022,172$1,052,779 $596,284 $607,760 $884,837 $3,019,032
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
CONTINGENCY $31,942 $86,170 $302,217 $105,278 $59,628 $60,776 $88,484 $301,903
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
SUB-TOTAL $351,358 $947,868 $3,324,389$1,158,057 $655,913 $668,536 $973,320 $3,320,935
----------------- --------- --------- --------- ---------- -------- --------- --------- -----------
----------------- ----------------------------- ----------------------------- --------- -----------
TOTAL $4,623,615 $2,482,506 $973,320 $3,320,935
----------------- ----------------------------- ----------------------------- --------- -----------
[Table continued]
SUDBURY JOINT VENTURE - FNX MINING EXPLORATION BUDGET - 2004
------------------------------------------------------------------------------------------
TABLE 19: EXPLORATION BUDGET
----------------- ----------- -------- ------------------------ --------- ---------------
ACTIVITY VICTORIA KIRK DRILLING OTHER TOTAL
WOOD
----------------- ----------- -------- ------- --------- ------ --------- ---------------
HOLES FT $/FT $
----------------- ----------- -------- ------- --------- ------ --------- ---------------
DRILLING
----------------- ----------- -------- ------- --------- ------ --------- ---------------
Surface $132,480 $0 70 119,100 $27.5 $3,247,500
----------------- ----------- -------- ------- --------- ------ --------- ---------------
U/G 200 108,000 $23.7 2,558,800
----------------- ----------- -------- ------- --------- ------ --------- ---------------
PRE DEV DRLG 30 10,000 $23.7 250,160
----------------- ----------- -------- ------- --------- ------ --------- ---------------
PERSONNEL $83,600 $14,000 $100,000 1,326,700
----------------- ----------- -------- ------- --------- ------ --------- ---------------
CAD/GIS $27,100 162,600
----------------- ----------- -------- ------- --------- ------ --------- ---------------
IT $14,700 $25,000 94,000
----------------- ----------- -------- ------- --------- ------ --------- ---------------
RES/RES $40,000 $0 390,000
----------------- ----------- -------- ------- --------- ------ --------- ---------------
QA/QC $10,000 164,856
----------------- ----------- -------- ------- --------- ------ --------- ---------------
SAFETY HEALTH $2,900 $1,400 56,500
----------------- ----------- -------- ------- --------- ------ --------- ---------------
ENVIRONMENTAL $92,900 $18,375 $130,000 626,275
----------------- ----------- -------- ------- --------- ------ --------- ---------------
GEOPHYSICS $0 $0 423,750
----------------- ----------- -------- ------- --------- ------ --------- ---------------
STR. GEOLOGY $4,875 $12,200 97,500
----------------- ----------- -------- ------- --------- ------ --------- ---------------
PROP.MAINTEN. $50,000 50,000
----------------- ----------- -------- ------- --------- ------ --------- ---------------
PREFEASIBILITY $85,400 $130,000 551,400
----------------- ----------- -------- ------- --------- ------ --------- ---------------
VEHICLES $11,000 $5,000 171,900
----------------- ----------- -------- ------- --------- ------ --------- ---------------
SUDBURY ADMIN $49,650 $24,825 446,850
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
SUB-TOTAL $554,605 $125,800 227,100 $385,000 10,618,791
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
7% INDIRECT $38,822 $8,806 $0 $26,950 $743,315
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
SUB-TOTAL $593,427 $134,606 $0 227,100 $411,950 11,362,106
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
CONTINGENCY $59,343 $13,461 $0 $0 $41,195 $1,136,211
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
SUB-TOTAL $652,770 $148,067 $0 227,100 $0 $453,145 12,498,317
----------------- ----------- -------- ------- --------- ------ --------- ---------------
----------------- ----------- -------- ------- --------- ------ --------- ---------------
TOTAL $652,770 $148,067 300 237,100 $453,145 12,498,317
----------------- ----------- -------- ------- --------- ------ --------- ---------------
FNX Mining Company Inc.
23 March, 2004
11. CERTIFICATE
CERTIFICATE
To Accompany the Technical Report dated March 23, 2004
Property Report, Sudbury, Ontario Cu-Ni-PGE Properties
(Victoria, McCreedy West, Levack, Norman and Kirkwood)
I, Dr. James M. Patterson, BA (Hons. Geology), Ph.D., P. Geo., DIC., do
hereby certify that:
1. I reside at 2292 Carol Road, Oakville, Ontario, L6J 6B6.
2. I am Vice President, Exploration of FNX Mining Company Inc.
3. I am a registered Practicing Member of the Association of Professional
Geoscientists of Ontario (Registration No. 0419); Member of the
Prospectors & Developers Association of Canada; Founding President Irish
Association for Economic Geology and a former Member of the Society of
Economic Geologists. I hold an Honours Geology Degree (BA Hons) from
Trinity College, University of Dublin, Ireland; a Ph.D in Mining Geology
from the Royal School of Mines, University of London, England and a
Diploma of Imperial College, University of London, England. I have
practised my profession as a geologist for over 40 years and have worked
in Europe, SE Asia and North America. During my career I have worked with
the private sector, government geological surveys, Canadian International
Development Agency and have completed assignments for the UN. For the past
4 years I have been involved in exploration programs in the Sudbury Basin
and am familiar with the geology and mineral deposits of that area.
4. I am a qualified person for the purposes of National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101").
5. Since October 2001, I have been intimately associated with the Project
and have been intimately involved with all aspects of the FNX Mining
Company Inc. exploration program since its initiation in January 2002.
6. I have prepared the Technical Report in its entirety and have drawn on
information supplied by Senior Project Personnel in the Corporation's
Sudbury offices.
7. I am not aware of any material fact or material change with respect to
the subject matter of the Technical Report which is not reflected in the
Technical Report, the omission to disclose which makes the Technical
Report misleading.
8. I have read NI 43-101 and Form 43-101F1 and have prepared the Technical
Report in compliance with NI 43-101 and Form 43-101F1 and in conformity
with generally accepted Canadian mining industry practices.
Dated as of the 23rd day of March, 2004
/s/ James M. Patterson
-------------------------------------
Dr. James M. Patterson, P.Geo (0419)
FNX Mining Company Inc.
23 March, 2004
REFERENCES
FNX Mining Company Inc.
o Confidential Records and Files from February 2002 to April, 2004
o Public News Releases
o SEDAR Filings
Inco Limited
o Confidential Corporation Files
Ontario Geological Survey
o The Geology and Ore Deposits of the Sudbury Structure,
Special Volume 1, 603 pages. 1984
Patterson, James M.
o Technical Report on Mineral Properties in the Sudbury Basin, Ontario,
for FNX Mining Company Inc., An Update to 30 April, 2003 : 9 May, 2003
o An Update to Technical Report on Mineral Properties in the Sudbury
Basin, Ontario, for Fort Knox Gold Resources Inc. : 31 May, 2002
o Technical Report on Mineral Properties in the Sudbury Basin, Ontario,
for Fort Knox Gold Resources Inc. : 7 November, 2001
Roscoe Postle Associates Inc
o Review of the Mineral Resources of the Levack Mine Property, Sudbury
Area, Ontario; Prepared for FNX Mining Company Inc., 3 October, 2003
(Filed on SEDAR)
o Review of the Mineral Resources & Mineral Reserves of the McCreedy
West Mine Property, Sudbury Area, Ontario; Prepared for FNX Mining
Company Inc., 22 August, 2003 (Filed on SEDAR)
o Review of the Mineral Resources of the McCreedy West Mine Property,
Sudbury Area, Ontario; Prepared for FNX Mining Company Inc., 5 March,
2003. ( Filed on SEDAR)
Spiteri Geological & Mining Consultants Inc. (SGM)
o Fort Knox Project, Sudbury, Ontario. Independent Check Sampling &
Assaying Program: July 27, 2001
o Fort Knox Gold Resources Inc. Technical Review & Mineral Asset
Valuation of Sudbury Area Properties, Sudbury Ontario; November 1,
2001
FNX Mining Company Inc.
23 March, 2004
Appendix: 1
ABBREVIATIONS AND CONVERSIONS
--------------- -------------- -------------------------- -----------------
Abbreviation Metal Minerals Chemical
Formula
--------------- -------------- -------------------------- -----------------
Au Gold Au
--------------- -------------- -------------------------- -----------------
Co Cobalt
--------------- -------------- -------------------------- -----------------
Cu Copper Chalcopyrite CuFeS2
--------------- -------------- -------------------------- -----------------
Ni Nickel Pentlandite, Millerite (FeNi)S; NiS
--------------- -------------- -------------------------- -----------------
Pd Palladium
--------------- -------------- -------------------------- -----------------
Pt Platinum
--------------- -------------- -------------------------- -----------------
Pyrrhotite Fe1-XS
--------------- -------------- -------------------------- -----------------
Ag Silver
--------------- -------------- -------------------------- -----------------
Additional abbreviations are as follows: PGM - Platinum Group Metals
TPM - Total Precious Metals = Pd + Pt + Au
It should be noted that Pt + Pd values are greater than Au, and that Au rarely
contributes more than 20% of the TPM content.
The following table will assist in conversions from metric to imperial
equivalents.
------------------------- --------------------------- ----------------
To Convert From To Multiply By
------------------------- --------------------------- ----------------
Centimetres Inches 2.54
------------------------- --------------------------- ----------------
Metres Ft 3.218
------------------------- --------------------------- ----------------
Kilometres Miles 0.621
------------------------- --------------------------- ----------------
Hectares Acres 2.471
------------------------- --------------------------- ----------------
Tonnes Short tons 1.102
------------------------- --------------------------- ----------------
Grams Ounces (Troy) 0.032
------------------------- --------------------------- ----------------
Grams per tonne Ounces (Troy) per ton 0.029
------------------------- --------------------------- ----------------
The factor used to convert ounces (Troy) per short ton (oz/t) to grams per
short ton (g/t) is 31.1048 grams.
BHID : Borehole Identification No
All intersection lengths referred to are lengths of drill core and should not
be interpreted as being true widths.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FNX MINING COMPANY INC.
Date: May 14, 2004 By: /S/ JOHN ROSS
------------------ ------------------------------
Name: John Ross
Title: Chief Financial Officer