On October 7, 2015, Zephyr announced that a preliminary mine plan (“Mine Plan”) on the Dawson Gold Project (“Dawson”) located in Freemont County, Colorado, USA, was filed on SEDAR (www.sedar.com). MineTech International Limited of Halifax, Nova Scotia completed the work at a preliminary economic assessment level of accuracy. The Mine Plan addresses all aspects pertaining to mine design, mine scheduling, mining method, proposed equipment, manpower, underground capital and operating cost, but does not include surface capital costs, processing, or the general and administrative costs of the proposed operation.

 

Highlights include: 

 

• Recoverable ounces gold to mill – approx. 27,300 oz/year; total in current Mine Plan – 120,700    ounces 

 

• Mining Cost* - Underground - US$80/ton (US$88/tonne) - US$310/oz - Open pit - US$36/ton  (US$37/tonne) - US$125/oz 

 

• Capital Cost - US$12.3 million (Mining Only) 

 

• Mining Rate - Daily Nominal Rate: 300 tons (272 tonnes) Yearly Average Rate: – 105,000 tons          (100,000 tonnes) 

 

• Diluted Recoverable Resources** in current Mine Plan:

    -Dawson Segment – 448,700 tons @ 0.26 oz/ton (407,000 tonnes @ 8.92 g/t);

    -Windy Gulch Segment – 14,800 tons @ 0.27 oz/ton (13,400 tonnes @ 9.20 g/t)

    - Total – 463,500 tons@ 0.26 oz/ton (420,400 tonnes @ 8.93 g/t) 

 

• Dilution – 7.5 to 23%; average 14.5% • Mine Access (U/G) – Portal and 15 ft. x 11 ft., -15% decline (4.6 x     3.4m) totaling approximately 2,500 ft. (762 m) to the 6125 ft level in year 1 

 

• Mining Method – Predominantly fully mechanized, longhole sublevel open stoping 

 

* Mining costs include all development and production costs. Capital costs are not included. 

** Recoverable resources estimated utilizing a 3.0 g/t cutoff, 40 g/t cap and a 95% mine recovery. The    entire mineral resource is currently classified as “Inferred.” Inferred Mineral Resources are based  upon widely spaced samples and are speculative in nature. They are considered too speculative  geologically to have the economic considerations applied to them that would enable them to be    categorized as “mineral reserves.” 

 

The report is titled Mine Design for the Dawson Property, located in Colorado, USA, dated August 26, 2015, and was prepared for Zephyr by Patrick Hannon, P.Eng., and Doug Roy, P.Eng. of MineTech International Limited.