2016 Met-Chem Resource Estimate

The mineral resource estimate was prepared by Met-Chem Canada (“Met-Chem”), a division of DRA Americas and press released on June 7, 2016.  The resource estimate, includes resources from 3 zones referred to as the South West, North East and Centre North zones, as summarized in the following table (Table 1).  A significant portion of the estimate is derived from the South West Zone.  All zones are open along strike and down dip and have potential for expansion.

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The mineral resource for the Silicon Ridge Project incorporates assay results from 71 diamond drill holes totaling 11,822 metres (“m”) and from 510 m of surface channel samples.  The estimate was prepared using a block model constrained with 3D wireframes of the principal mineralized domains.  Values for SiO2, Al2O3, TiO2 and Fe2O3 were interpolated into blocks using Inverse Distance Squared (“ID2”).  A preliminary open pit optimization algorithm was run on the estimated grade block model to constrain the resources and to support the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) requirement that Mineral Resources have ‘reasonable prospects for eventual economic extraction’.  Only mineralization contained within the preliminary pit shell has been included in the resource estimate.

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              Table 1: Silicon Ridge Pit Constrained Resource Estimate

 

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Notes:

1. CIM definitions (May 10, 2014) were followed for classification of Mineral Resources.

2. Cut-off grades of 98.1% SiO2, 0.8% Al2O3, 0.075% TiO2 and 0.24% Fe2O3.

3. Density of 2.65 g/cm3.

4. The resources are constrained by a Lersch Grossman (LG) optimized pit shell using MineSight software.

5. LG pit shell defined using the following constraints:

   1. 50 degree slope

   2. Offset of 85m from lakes and wetlands

   3. Product sales price of $200/t and $100/t for high value and ferrosilicon, respectively

   4. Processing cost of $16.84/t and $45.84/t of feed for high value and ferrosilicon, respectively

   5. Mining cost of $6.73/t and a G&A cost of $2/t

(All pricing and costing will be refined for the PEA.)

1. Mineral Resources are not Mineral Reserves and have no demonstrated economic viability.  The estimate of Mineral Resources may be materially affected by mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors (“Modifying Factors”).

2. Numbers may not add due to rounding.

3. Effective date of the resource estimate is June 7, 2016.