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View Related News Release - April 22, 2010



Oblique satellite image of Kitsault Project located at the end of Alice Arm (Google Earth)

Kitsault Project Overview

  • Kitsault is one of the top five primary Molybdenum development assets worldwide.
  • It is a high-grade resource with existing infrastructure consisting of an electricity grid and ocean and road access.
  • It is permitted, but will need an amendment for tailings disposal and the resultant environmental assessment.
  • An ongoing reclamation plan is already in place.
  • Avanti will be able to benefit from the extensive historical geologic, production and other data compiled by others during Kitsault's prior two periods of production.
  • While it is early in the re-evaluation of the three Molybdenum deposits, there are some initial ideas for additional exploration that might lead to expansion of the resources and the possible discovery of previously unknown Molybdenum deposits. An airborne geophysical survey is needed to define areas of interest outside of the known deposits.
Location

The Kitsault Molybdenum mine is located 600 m above sea level, within a couple kilometers of tidewater on Alice Arm, in the Skeena Mining Division of British Columbia. It is 140 km northeast of Prince Rupert, British Columbia, and is easily accessible by air service or boat from Prince Rupert, or by road from the town of Terrace.

History

The deposit was first staked in 1911. At that time, the major focus was a polymetallic vein with silver values, located southeast of the Molybdenum deposit. Although some work was done on the project in the 1920s and early 1930s, the ground lay idle until 1959 when Kennco Exploration (Western) Ltd. commenced a program of diamond drilling. Kennco announced the presence of an orebody in late 1964, containing 36 million tonnes averaging 0.138% Mo (0.23% MoS2), and began construction of a mine at a capital cost of $30 million. Between January 1968 and April 1972, approximately 9.3 million tonnes of ore were produced with about 22.9 million pounds of Molybdenum recovered.

Kitsault Production History


Production Year

Tonnes
Mined

Tonnes
Milled

Kilograms Mo
Recovered

Pounds Mo
Recovered

Recovered
Grade % Mo

Calculated Head
Grade % Mo*

1967

154,952

80,484

7,370

16,291

0.009%

0.010%

1968

6,155,958

1,948,617

2,263,283

5,002,761

0.116%

0.128%

1969

5,240,818

2,137,782

2,595,907

5,737,993

0.121%

0.134%

1970

6,230,662

2,443,242

2,661,384

5,882,723

0.109%

0.120%

1971

4,488,088

2,246,336

2,177,404

4,812,934

0.097%

0.107%

1972

996,422

473,208

762,043

1,684,420

0.161%

0.177%

1981

8,259,450

1,840,717

548,929

1,213,353

0.030%

0.033%

1982

6,816,600

2,228,831

2,556,679

5,651,283

0.115%

0.126%

Total

38,342,950

13,399,217

13,572,999

30,001,757

0.101%

0.111%

* Calculated Head Grade at 90% Historic Mill Recovery - BC Minfile data


Geology

The Kitsault property contains three known Molybdenum deposits: Kitsault, Bell Moly, and Roundy Creek, all of which are within the western margin of the Bowser basin in the Intermountain tectonic belt, a few kilometers east of the Coast Plutonic Complex. Hosts for mineralization of these three deposits are thermally metamorphosed interbedded argillite and greywacke of the Upper Jurassic to Lower Cretaceous Bowser Lake Group, and the intrusive lithologies of the Lime Creek Intrusive Complex, Clary Creek Stock, and Roundy Creek instrusive complex, respectively. Intrusives associated with Molybdenum mineralization at Kitsault, Bell Moly, and Roundy Creek are multiphase diorite, quartz monzonite, and younger felsic units. Cross cutting relationships within the intrusive indicate that multiple mineralizing events produced the Molybdenum deposits.



Kitsault, Bell Moly, and Roundy Creek are intrusive related Molybdenum deposits that form zones of mineralization that are generally annular in plan and arcuate in section. Except for the chemistry and mineralogy of the source intrusive, there are many similarities to Climax-type Molybdenum deposits. Similar deposits include Ajax (Dak River), Cannivan Gulch, Bald Butte, Pine Nut, Buckingham, and Creston. These are distinct for the quartz monzonite batholithic type where Molybdenum mineralization has more of a lenticular shape and commonly related to the youngest phases of the batholiths.

Typical examples of the batholithic type are Endako, Adanac, Mount Tolman, and Thompson Creek.

NI - 43 - 101 Compliant Resource Estimate



On August 5, Avanti announced a Canadian Institute of Mining, Metallurgy and Petroleum (CIM) compliant resource estimate for the Kitsault Molybdenum Mine. At a 0.04% Mo cut-off grade, this estimate contains an Indicated resource of 158 million tonnes grading 0.10% Mo, containing 348 million pounds of Molybdenum, and an additional Inferred resource of 133 million tonnes grading 0.08% Mo, containing 235 million pounds of Molybdenum. This resource estimate was the subject of a National Instrument 43-101 (NI 43-101) Technical report entitled "Technical Report, Kitsault Molybdenum Property, British Columbia," which was filed on SEDAR that date. The qualified persons ("QP"), as this term is defined in NI 43-101, who endorsed this Technical Report were Jeffrey Volk, P. Geo., and Roger C. Steininger, PhD, CPG.

The resource estimate was created utilizing drill hole sample assay results generated during three major periods of drilling by Kennco Explorations (Western) Ltd., Climax Molybdenum Corporation of British Columbia Ltd., and Amax of Canada Ltd.





The majority of drilling occurred prior to mine production in the late 1960's, from 1974 to 1978, and again in 1981 to 1982. There are a total of 139 drill holes in the Kitsault database, with a cumulative length of 27,651 metres. Individual holes range in length from 3m to 763m in length and average 199m in length. Drill hole spacing averages approximately 60m throughout most of the deposit area.

The indicated and inferred categories were limited to an optimized pit shell using a Molybdenum price of $20/lb; a metallurgical recovery of 89%; unit mining cost and combined processing and G&A costs of US$2.00 and US$9.50, respectively; and slope angles of 40° in all areas. The mineral resources are reported at a cut-off grade to reflect the "reasonable prospects" for economic extraction.

The mineral resources statement for the Kitsault Molybdenum project is summarized in the table below:

Mineral Resource Statement

Kitsault Molybdenum Deposit* - July 16, 2008

 

 

 

 

 

 

Grade

 

 

 

Contained Metal

Resource
Classification

Quantity
(mt)

 

Molydbenum
(%)

Silver
(g/t)

Lead
(%)

WO3
(%)

 

Molydbenum
(Mlbs)

Silver
(Moz)

Lead
(Mlbs)

WO3
(Mlbs)

Indicated**

158

 

0.100

4.31

0.022

0.008

 

348

22

78

0.880

Inferred**

133

 

0.080

3.70

0.018

0.007

 

235

16

52

0.667


*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$20.00/lb of Molybdenum, and a metallurgical recovery of eighty-nine percent for Molybdenum. Silver, Lead and WO3 were not used in the pit optimization.
**Reported at a cut-off grade of 0.04% Molybdenum contained within a potentially economically mineable open pit.

Kitsault Deposit - 2012 Mineral Resource Statement Update