Lithium Resources & Reserves

Mineral Resources Estimates

SGS Canada Inc. (“SGS”) completed the Mineral Resource update using the digital database supplied by Nemaska (as of August 21st, 2017) which included channel data. The cut-off grade of the reported Mineral Resources is 0.43% Li2O. from trenches and drill holes data completed by Nemaska since 2009. The database used to produce the Mineral Resource estimate was derived from a total of 593 channels and diamond drill holes, including historical diamond drill holes and unassay channels.


The Mineral Resource was estimated from a resource block model interpolated using ordinary kriging. The 2017 geological model was updated with the new exploration information from 2016 and 2017; the analytical data contained within the wireframe solids was then normalized, to 2 m length composites. The composite data was used to interpolate the Li2O grade of blocks by ordinary kriging on a regularly spaced defined grid that fills the 3-D wireframe solids. The mineral resources of Whabouchi are designed and reported using an open-pit mining perspective. An optimized pit shell model using the pit optimization software MineSight© was produced, by MC-DRA, in 2016 and later
validate in October 2017, using the completed block model. The interpolated blocks located below the bedrock/overburden interface, within the optimized pit shell and above a determined cut-off grade comprise the mineral resources. The blocks are then classified based on confidence level using proximity to composites, composite grade variance and mineralized solids geometry. The 3D wireframe modeling, block model, and mineral resource estimate were completed by SGS based on information provided by Nemaska.


The final mineral resource estimates within the open pit are reported at a cut-off of 0.3% Li2O and totals 16,953 Mt, with an average grade of 1.57% Li2O in the Measured category, 20,403 Mt, with an average grade of 1.41% Li2O in the Indicated category, with an additional 6,687 Mt, with an average grade of 1.37% Li2O in the Inferred category.


The underground mineral resource estimates are reported at a cut-off of 0.60% Li2O and totals 12,000 t of measured resources at an average grade of 1.87% Li2O, 233,000 t of indicated resources with an average grade of 1.59% Li2O and 9,376 Mt of inferred resources with an average grade of 1.39% Li2O.

Whabouchi Deposit in Pit Mineral Resource Estimate

Resource  Category Tonnage (t)*  Li2O Grade (%) Cut-Off Grade (Li20%)
Measured 16,953,000 1.57 0.30
Indicated 20,403,000 1.41 0.30
Measured + Indicated 37,356,000 1.48 0.30
Inferred 6,687,000 1.37 0.30

Note: The Mineral Resource estimate has been estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definitions Standards for Mineral Resource and Mineral Reserve in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mineral resources which are not Mineral Reserve do not have demonstrated economic viability. Inferred Mineral Resource are exclusive of the Measured and Indicated Resources.

Bulk density of 2.71 t/m³ is used.
Effective date November 24th, 2017.
Blocks touching the pit were taken out,
*Rounded to the nearest thousand.

Whabouchi Deposit Below Pit  Mineral Resource Estimate

Resource  Category Tonnage (t)*  Li2O Grade (%) Cut-Off Grade (Li2O)
Measured 12,000 1.87 0.60
Indicated 233,000 1.59 0.60
Measured + Indicated 245,000 1.60 0.60
Inferred 9,376,000 1.39 0.60

Note: The Mineral Resource estimate has been estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definitions Standards for Mineral Resource and Mineral Reserve in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mineral resources which are not Mineral Reserve do not have demonstrated economic viability. Inferred Mineral Resource are exclusive of the Measured and Indicated Resources.
Bulk density of 2.71 t/m³ is used.
Effective date November 24, 2017.
Blocks touching the pit were taken out,
*Rounded to the nearest thousand.

Mineral Reserves - Whabouchi Project

Reserve Category Tonnage (Mt) Li2O Grade (%)
Open Pit
Proven 15.5 1.56
Probable 8.5 1.48
Proven and probable 24.0 1.53
Underground
Proven 1.5 1.36
Probable 11.1 1.13
Proven and probable 12.7 1.16
Combined Proven and probable 37.0 1.40

Open Pit Mineral Reserve
The effective date of the Mineral Reserve estimate is November 7th, 2017. The Whabouchi deposit was estimated using the updated resource model that was prepared by SGS. The Mineral Reserves are the portion of the Measured and Indicated Mineral Resources that have been identified as being economically extractable and which incorporate mining losses and the addition of waste dilution. The cut-off grade for the open pit mine was calculated to be 0.34% Li2O. The first step in the Mineral Reserve estimate was to carry out a pit optimization analysis.

The pit optimization analysis used economic criteria to determine the cut-off grade and to what extent the deposit can be mined profitably. The pit optimization analysis was done using the MS-Economic Planner module of MineSight® Version 12.0-3. The optimizer uses the 3D Lerchs-Grossman algorithm to determine the economic pit limits based on input of mining and processing costs and revenue per block.

The pit optimization analysis identified the pit shell that should be used as the basis for the open pit design. The additional Measured and Indicated Mineral Resource that is outside the limits of this optimized pit shell were then evaluated as an underground mining operation. The cut-off grade for the open pit mine was calculated to be 0.34% Li2O.


An open pit was designed with an overall pit slope of 56° which was based on a geotechnical study that was completed by Journeaux Assoc. The pit has 20 m high benches and the ramp will be 20 m wide with a maximum grade of 10%. The pit will be approximately 1,350 m long and 340 m wide at surface with a maximum pit depth from surface of 223 m. The open pit design includes 15.5 Mt of Proven Mineral Reserve and 8.5 Mt of Probable Mineral Reserve for a total of 24.0 Mt at a grade of 1.53% Li2O. In order to access these reserves, 1.4 Mt of overburden, 69.4 Mt of waste rock (including Inferred Mineral Resource) must be mined. This total waste quantity of 70.9 Mt results in a stripping ratio of 3.0 to 1. Table 1.6 presents the open pit Mineral Reserve for the Whabouchi deposit. The Mineral Reserve account for mining dilution.

Underground Mineral Reserve Estimate

The underground mine will be developed at the end of the open pit life and will take over the production once the open pit reserves will be depleted in Year 24.

The underground mine will be accessed via a mine portal located at elevation 162.5 m and a main ramp that connects to the seven (7) haulage drifts sub-levels located on the footwall side of the orebody. The sub-levels will be spaced at every 30-metre in elevation at Levels 182 m, 152 m, 122 m, 92 m, 62 m, 32 m and 2 m.

The underground Mineral Reserve was estimated at 12.7 Mt grading 1.16% Li2O of Proven and Probable Mineral Reserve Categories. The reserve includes dilution and recovery and was estimated using an underground mining cost of $ 29.52/t ore and the economic parameters presented in Section 21.0 of the Report. The underground cut-off grade was calculated at 0.63% Li2O. The cut-off grade is used to determine at what point material being mined will generate a profit after paying for the mining, processing, transportation and G&A costs. Table 1.7 presents the underground Mineral Reserves for the Whabouchi deposit. The Mineral Reserves account for mining dilution.