By adding gold and silver extraction, the PEA announced by the company on May 30 supersedes an October 2012 feasibility study that was limited to the evaluation of heap leaching of oxide copper to produce cathode copper, and did not include the recovery of the precious metals found at the Carmacks deposit.

The measured and indicated resources within the proposed open pit at Carmacks total 11.55 million metric tons grading 0.805 percent soluble copper, 0.46 grams per metric ton gold and 4.58 g/t silver.

The project is located near the village of Carmacks in central Yukon Territory. The PEA will be filed on SEDAR within the next 45 days.

The PEA, updated to include the recovery of gold and silver, will be followed by a second phase of re-engineering and optimization of the mine and processing plan. Upon completion of phase ii study, considering improvement opportunities, a new prefeasibility or feasibility study will be prepared for project financing purposes.

The previous potential open pit mine plan remains unchanged from that proposed in the feasibility study and is the basis of the PEA. Estimated capital and operating costs for the recovery of gold and silver are added to the estimate for copper recovery to provide new capital and operating costs for the PEA.

Copper North reported that the results of the preliminary leach test work and modeling of gold and silver recovery are positive and a broader study is warranted.

By recovering the gold and silver recovery, the PEA projects:

• Net revenues to increase roughly 28 percent, from US$677 million to US$870 million;

• Net cash from operations increases by 42 percent, from US$333 million to US$471 million;

• Life of mine operating cost increases 15 percent, from US$344 million to US$398 million;

• Life of mine cash operating cost, after gold and silver credits, decreased from US$1.59 per pound to US$1.07/lb. for copper;

• Pre-tax net present value (discounted at 8 percent) to be US$66 million and after-tax NPV(8 percent) to be US$32 million;

• Pre-tax internal rate of return to be 15 percent and after-tax IRR to be 12 percent;

• Copper recovery remains unchanged at 85 percent, gold recovery is 78 percent and silver recovery 75 percent;

• Cap-ex to increase from US$178 million to US$225 million;

• Potential life-of-mine annual production to be 30 million pounds copper, 17,300 ounces gold and 165,000 ounces silver; and

• A mine life of about eight years.

The base case metal price in the feasibility study was US$3.20/lb. copper. For continuity purposes the PEA base case pricing for copper remains US$3.20/lb., with gold at US$1330/oz and silver at US$21.50/oz. An exchange rate of C$1.00 equals US90 cents has been assumed in the PEA.

“The results of the preliminary economic assessment are quite favorable and confirm that the recovery of gold and silver alongside copper recovery is feasible and provides a very positive potential improvement in project economics,” said Copper North President and CEO Harlan Meade, Ph. D. “The inclusion of gold and silver recovery into the previous mine and processing plan, provides an opportunity to reconsider leach alternatives for operational efficiency. The proposed phase 2 plan includes a review of various copper, gold and silver leach alternatives.”

Copper North said the addition of capital and operating costs for gold and silver recovery, to those from feasibility study, are conceptual and substantial additional work is required to provide the certainty of a feasibility study.

The PEA evaluation has also indicates an opportunity to reduce capital and operating cost utilizing vat leach technology. The evaluation of vat leaching of copper, compared to the heap leach method, is in progress.

Benchmarking with other projects indicates that there may also be an opportunity to reduce capital by taking a different approach to engineering and procurement; this opportunity is also under review.