Croinor
Critical Elements Corporation has concluded two joint-venture agreements with Blue Note Mining Inc. (formerly X-Ore Resources Inc.) with the objective of acquire an interest of 50% in the Croinor project located in the Pershing. Vauquelin and Haig townships in the Abitibi region of Quebec. The property located 75 km by road from Val-d'Or covers an area of 4518 hectares and is composed of 289 contiguous claims and a mining lease of 90 hectares.
The first joint-venture (Croinor 1) includes the Croinor deposit which is located on the Mining Lease and adjacent claims. A 43-101 report prepared in November 2005 by Carl Pelletier. M. Sc. P. Geo from the firm Innovexplo Inc. of Val-d'Or. Quebec a copy of which is available in the Critical Elements Corporation profile on www.sedar.com - confirms the following resource estimate:
HIGHLIGHTS OF PREFEASIBILITY STUDY AND PEA(1)
| Parameters | Prefeasibility Results | PEA Results(2) |
| Resources included in Mine Plan(2) | 566.872 t at 6.64g/t(3) | 583.285 t at 6.64g/t (Measured Indicated) 105.876 t at 7.13 g/t (Inferred)(3) |
| Proven and probable mineral reserve | 566.872 t at 6.64g/t(3) | N/A |
| Total contained gold | 120.883 oz | 124.503 oz (Measured Indicated) 24.287 oz (Inferred) |
| Mine life(including 18-month pre-production) | 5 years (58 months) | 5 years (65 months) |
| Daily mine production | 425 t/day ramping up to 675 t/day in year 4 | 425 t/day ramping up to 760 t/day in year 3 |
| Gold recovery | 97.5% | 97.5% |
| Annual gold production | 21.259 to 41.578 oz | 22.785 to 47.477 oz |
| LOM recovered gold | 117.956 oz | 145.073 oz |
| Average cash operating cost | $164/tonne | $160/tonne |
| Average cash operating cost | US$762/oz | US$731/oz |
| Capital cost(4) | $ 37.4 million(4) | $ 38.5 million(4) |
| Total cost per ounce | US$1022/oz | US$951/oz |
| Total revenue | $166 million | $203.9 million |
| Total operating cost | $87 million | $104.2 million |
| Total project cost | $124 million | $142.7 million |
| Total operating cash flow (before tax and royalties) | $47.2 million | $66.7 million |
| Estimated mining and income taxes | $12.5 million | $18.2 million |
| Net cash flow (After tax and royalties) | $31 million | $42.1 million |
| Pre-tax NPV (7% discount ) | $30.6 million | $42.8 million |
| Pre-tax IRR | 57 % | 70 % |
| After-tax NPV (7% discount ) | $21 million | $28.9 million |
| After-tax IRR | 44 % | 53 % |
| Payback period | 38 months | 36 months |
| Pre-production period(including 41.115t of production) | 18 months | 18 months |
(1) Bloomberg base case consensus forecasts as of December 19. 2011.
| 2012 | 2013 | 2014 | 2015 | |
| Gold price ($US/oz) | 1.834 | 1.893 | 1.572 | 1.506 |
| Exchange rate ($C/$US) | 1.03 | 1.01 | 1.04 | 1.01 |
(2) The reader is cautioned that the results of the PEA is preliminary in nature; it includes Inferred mineral resources that are too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. and there is no certainty that the PEA will be realized.
(3) Tonnage and grade take into account the mining dilution and recovery.
(4) Includes 17.9M sustaining/working capital in the case of Prefeasibility Study. 19.10M sustaining/working capital in the case of PEA and capitalized preproduction operating costs net of associated revenue in all cases.
> These resources are within 200 meters from surface
> Critical Elements Corporation has acquired a 50% interest on the mining lease and the adjacent claims.
The property consists of 29 mining claims covering 1.291.91 hectares and is located on the boundary of the Pershing and the Louvicourt townships. It is easily accessible with a main forestry road and then older forestry roads that are in good condition. The company can earn a 50% working interest in the Matchi-Manitou property located in Eastern Abitibi roughly 30 km to the northeast of the village of Louvicourt in Quebec.
A surface sampling program has in the past confirmed the presence of strong anomalies in copper. zinc and silver. This program was followed by soil geophysics exploration - magnetometric and InfiniTem surveys to better delineate drill targets. Critical Elements Corporation has just completed a detailed compilation of predecessor`s work and is currently completing a geophysical survey.
(3) Tonnage and grade take into account the mining dilution and recovery.
(4) Includes 17.9M sustaining/working capital in the case of Prefeasibility Study. 19.10M sustaining/working capital in the case of PEA and capitalized preproduction operating costs net of associated revenue in all cases.
| Mineral Resource Estimate | |||||||||
| Category | Cut-off 3 g/t Au | Cut-off 4g/t Au | Cut-off 5g/t Au | ||||||
| tonnes | g/t | ounces | tonnes | g/t | ounces | tonnes | g/t | ounces | |
| Measured | 112.39 | 7.0 | 25.30 | 80.51 | 8.4 | 21.75 | 59.39 | 9.8 | 18.72 |
| Indicated | 848.26 | 7.5 | 204.72 | 599.56 | 9.1 | 176.86 | 447.32 | 10.7 | 154.99 |
| Total Measured and indicated | 960.70 | 7.4 | 230.00 | 680.10 | 9.0 | 198.70 | 506.70 | 10.6 | 173.70 |
| Inferred | 227.75 | 7.0 | 51.51 | 160.14 | 8.5 | 44.07 | 102.42 | 10.9 | 35.88 |
> These resources are within 200 meters from surface
> Critical Elements Corporation has acquired a 50% interest on the mining lease and the adjacent claims.
| > ECONOMIC STUDY ON CROINOR PROJECT > ESTIMATE ON CROINOR PROJECT - NEW 43-101 |
Matchi-Manitou
The property consists of 29 mining claims covering 1.291.91 hectares and is located on the boundary of the Pershing and the Louvicourt townships. It is easily accessible with a main forestry road and then older forestry roads that are in good condition. The company can earn a 50% working interest in the Matchi-Manitou property located in Eastern Abitibi roughly 30 km to the northeast of the village of Louvicourt in Quebec.
A surface sampling program has in the past confirmed the presence of strong anomalies in copper. zinc and silver. This program was followed by soil geophysics exploration - magnetometric and InfiniTem surveys to better delineate drill targets. Critical Elements Corporation has just completed a detailed compilation of predecessor`s work and is currently completing a geophysical survey.