The study team completed its work in November 1995. Aspects of the original feasibility study were re-visited and updated in late 1996 and early 1997 in a feasibility update focusing principally at modifications to the metallurgical flow-sheet and process, access road updated design and costs, mining methods and mine scheduling optimization, and attendant updates to all other project components resulting from these modifications. The summary presented herein describes the project details from the cumulative feasibility study work and permitting process.

The 1997 Feasibility Study update concluded that the Tulsequah project was feasible with positive economic results. The study estimated a total pre-production capital cost of CAN$148 million for a 2466 tonne/day production rate with an operating cost of $58.61/tonne of ore. In 1997 the study used long-term metal prices of $0.95/lb of copper, $0.57/lb of zinc, $0.28/lb lead, $385/oz gold and $5.00/oz for silver, all in $US at an exchange rate of CAN$1.00 = US$0.735. On a 100% project equity basis this was forecast to generate a pre-tax internal rate of return on investment (IRR) of 20.44%.

At present Redfern is commencing a new Feasibility assessment of the project utilizing the resource model estimated by AMEC Americas Ltd. in February 2005. The new resource estimate, completed to the standards of National Instrument 43-101 establishes a higher confidence resource. The Feasibility Study update is proceeding first with an assessment of the appropriate mine plan and production schedule. This will be followed by a complete update of the past Feasibility work to allow for current costs and revenue projections in the context of an updated economic model for the deposit. Results will be released once the work is completed. As much of the elements of the project will not be significantly modified the discussion below, related to the 1995 and 1997 engineering work, provides a useful description of the project.

Project description and results

Access

Presently the only access to the mine site is by air. Shallow-draft boat access is available to the confluence of the Tulsequah and Taku Rivers, however the Tulsequah river is not easily navigated due to high and variable flows and debris hazards.

As part of the Feasibility Study, Redfern reviewed a number of potential access options for the project. These included:

1. road access to the Taku river connecting with seasonal shallow draft barging from a constructed barge landing;
2. road construction to potential deep water sites on the lower Taku river;
3. slurry pipeline and road combinations to the lower Taku river and;
4. road access to connect with the public highway system near Atlin.

The only feasible access option proved to be construction of an all-weather single lane road connecting the project site with public roads serving the community of Atlin. The planned road route includes upgrading of 45 kilometres of existing roads and construction of 117 kilometres of new road for a total length of 162 kilometres.

Once road access was established as the only feasible alternative, several different route options were considered. The selected route provided the best combination of suitable stable terrain, natural hazard risk management (avalanches, floods etc), maximized avoidance of sensitive wildlife habitat and appropriate design for fish habitat at stream crossings. This route avoids the highest value habitat in the Taku river valley by utilizing the valleys of Shazah creek and Nakonake river to the Sloko river. From the Sloko crossing, the route climbs to traverse a northeast to northwest arc in the broad highlands south of Atlin, crossing the O' Donnel River and follows existing roads in the Wilson and Spruce creek valleys to connect with highway 7 immediately north of Atlin.

The 1995 Feasibility Study and the 1997 Feasibility Update utilized the verified geological resource estimates and further considerations of proposed mining methods, processing, infrastructure requirements and other material factors in deriving a ‘mineable reserve’ in conformity with National Policy 2A and the CIM 1996 Bulletin. This "mineable reserve" corresponds to a proven and probable reserve as defined by NI 43-101 with the exception of the inclusion in it of a portion of the inferred resource. Classification of the "mineable reserve" into proven and probable was not done, although a portion of this material should be classified as proven. A $45.00 NSR cut-off grade and a 4-meter minimum mining width were used for this estimate. The "Cominco reserve" was also reduced to 435,163 tonnes to reflect the uncertainty surrounding recovery of reserves above the 120 Level (i.e. in the vicinity of the old stopes and workings).

It is anticipated that future work at the Tulsequah Project will incorporate new resource and reserve estimates in conformity with the current NI 43-101 standards.

Metallurgy and Process

The Tulsequah mineralization consists of massive to semi-massive concentrations of sulphides consisting of, in order of abundance, pyrite, sphalerite, chalcopyrite (± tennantite/tetrahedrite) and galena. Native gold is also present. Metallurgical testing has proceeded on various sample batches of drill core comprising representative composites of the projected run-of-mine ore feed to a conventional mill and processing circuit. Variations of this feed representing high and low-lead abundance were also conducted as well as a larger scale test on fresh bulk samples obtained directly from the H lens exposed in the 5200 level underground workings.

Picture Below: Coarse visible gold in drill core



Results from the metallurgical work were also compared with the experience obtained during the earlier mine production at the Tulsequah Mine from production records and reports. This work has generated a proposed flow sheet for the project using conventional grinding and flotation processes for a sequential separation of five concentrates:

1. Crushing and grinding followed by jig and centrifugal separation of a gold-rich gravity concentrate
2. Copper-lead “bulk” flotation followed by separate stages of copper and lead separation to produce separate copper and lead concentrates
3. Zinc flotation and production of zinc concentrate
4. Pyrite flotation for environmental segregation and disposal of pyrite concentrates.
   

The Tulsequah sulphide lenses are fine to medium grained and provide good separation characteristics and recoveries. The metallurgical process has been developed in a very conservative manner and has been verified by independent testwork conducted by a major mining and metals company. Overall grades and recoveries of pay metals are projected as follows:



Mine Plan

The mine plan envisaged three main phases of mine development. Access and development will primarily take place in the non-acid-generating rocks of the hanging wall through a spiral decline ramp with development of a connecting internal winze (shaft) to commence in year 1 of operations. On shaft completion the main crushing plant will be established at the base of the mine. Crushed ore will be conveyed to an underground primary grinding mill excavated within the massive competent gabbro sill unit on the 5200 level (60m level). The ground ore will be slurry pumped to the flotation plant and processing facilities located on surface.

It is proposed to use sublevel retreat longhole mining methods on 30m sublevels with delayed paste backfill for ground control and storage of potential acid-generating mine waste products. For all mine stope backfill at or below the 0m level, pyrite concentrates and PAG (potential acid-generating) waste rock will be added to seal these components below the levels of mine flooding on ultimate mine closure. PAG rock encountered during mining development will be temporarily stored in the temporary PAG waste storage site on surface before being returned to backfill stopes.

Waste management

Solid waste produced by the mine will consist of development waste rock, both potentially acid-generating (PAG) and non-PAG, as well as pyrite concentrate and sulphide-reduced tailings. Separate storage sites will be located on surface for these products, which will be differentiated on an ongoing basis during mining development and operations.

PAG rocks and any temporary ore stockpiles will be placed in the temporary PAG waste site which will be lined and have drainage collection and treatment installations. PAG rocks will be returned to the underground stopes as they are mined and backfilled. All PAG waste will be returned to the mine prior to final mine flooding so as to eliminate potential sources of acid generation. Non-PAG waste rock will be stored separately for ultimate re-contouring and re-vegetation at permanent mine closure.

Pyrite concentrates will be stored in a separate lined facility pending reclamation and incorporation in the mine backfill below the 0m level. The backfill plant will use tailings material, cement, PAG rocks and pyrite concentrate for these locations. For areas above the 0m level, particularly for the old mine workings and stopes which are a current source of acid mine drainage, a separate backfill program will be conducted using only low-sulphide tailings and cement to seal the old stopes and any residual ore or PAG rocks. It is anticipated that this will, over several years, result in a dramatic reduction in acid generation from the historic workings and potentially eliminate any need for post-closure collection and treatment programs for mine drainage.

The main tailings impoundment will be the depository for all low-sulphur tailings in excess of that required for backfill use. It is expected that approximately 50% of the mine tailings production will be returned to the underground mine in the form of backfill. The remaining 50% will be stored in a ring-dyke tailings impoundment located approximately 4 kilometres north of the mine at a site which is protected from natural hazards. The low-sulphur tailings will be very close to acid-neutral but to ensure their neutral state, locally-quarried limestone will be crushed, ground and mixed in slurry form at 3% by weight with the tailings. This will ensure that the tailings will not be acid-generating or a source of metals contamination.

Since the tailings will not be potentially acid generating, there is no requirement to keep them submerged. On mine closure, they will be drained, contoured and re-vegetated for permanent reclamation.

Environmental protection measures

In consideration of Redfern’s commitment to construct and operate the Tulsequah project to the highest standards, and in keeping with the high-quality environment surrounding the Tulsequah Mine, the project has gone to great lengths to exceed requirements and protect the natural environment.

Some of these measures are listed below:

Mine site:

• A pyrite flotation circuit will be incorporated into the flotation plant which will recover 99% of pyrite. The low-sulphide tailings will be further neutralized with limestone addition prior to disposal in the impoundment, thereby ensuring a neutral tailing.
• The mined stopes below the 0m level will be filled with a paste backfill which will include the pyrite concentrate. This will minimize potential oxidation of mined stopes and accompanying acid generation.
• The old stopes from the 1950s will be filled with paste backfill made from desulphurized tails. This will ensure that potential acid rock drainage is minimized and also ensure proper closure.
• The existing acid generating waste dumps from the historic operations will be returned underground below the water table to prevent further acid rock drainage.
• The proposed mine plan will ensure minimal development in potential acid generating rock. All development rock will be closely monitored and potential acid generating rock will be returned underground.
• A contingency pump-back well system will be installed downstream of the tailings pond and monitored for metals in seepage. Pump-back systems will be activated if seepage concentration is detected above desired thresholds.
• All mine and process waters will be collected and recycled or processed through a treatment plant to remove acidity and metals prior to discharge to the environment.
  

Access road

• The road will be operated as a restricted access non-public road to minimize potential impacts to wildlife and fish resources.
• All mine staff will be required to adhere to a no-fishing and no-hunting policy while on the project site or road. A firearm prohibition will be in effect.
• No recreational use of the road by mine employees or contractors will be allowed.
• A manned gate will be installed to control traffic on the road. Mine traffic will report any unauthorized use to enforcement agencies.
• On mine closure the access road will be deactivated and reclaimed unless access management control and protection is assumed by another entity through government approval.