TSXV: NSC $ 0.07 +0.00 +0% Volume: 3,500 April 22, 2017

mcwatters mine

The McWatters nickel deposit is located approximately 29 kilometers southeast of the city of Timmins, Ontario, Canada in Langmuir Township and about 9.5 km east of the Redstone Mine.

RESERVES AND RESOURCES

Nickel sulphide mineralization at the McWatters Mine occurs in two zones: the upper lower grade disseminated sulphide zone and the lower high grade massive sulphide zone.

A National Instrument 43-101 compliant resource calculation was released in October 2005. After additional definition drilling was completed in the fall of 2007, an updated NI 43-101 compliant resource was subsequently released on December 18, 2008. The technical report stated an indicated resource of 665,308 tonnes of mineralization grading 0.72% Ni in the upper zone and 49,562 tonnes grading 3.93% Ni in the lower zone with an inferred resource of 13,829 tonnes grading 3.39% Ni in the lower zone. The feasibility study of December 18, 2009 estimated the Probable Mineral Reserves at 872,000 tonnes with an average grade of 0.70% Ni using a nickel price of US$15,430 per tonne (US$7.00 per pound) and an exchange rate of $1.00 CDN = $0.90 US. The life of mine for the McWatters project was two years at an average production rate of 1800 tonnes per day.

PRODUCTION

Ramp development was completed to the 155m level in early January 2010. Cut and fill mining on the 155m level commenced firstly and commercial production was declared in January 2010. An open pit allows removal of the crown pillar with the balance of the mine exploited with sublevel caving to the 140m level. The production was stopped in February 2011 due to problems with the Redstone Mill's tailings storage facility.

Mining was restarted in Q1 2012 after the Redstone Mill tailings pond issues were resolved. Unfortunately in August of 2012, mine production was again halted due to poor market conditions. It was the discovery of asbestos in January 2013 that has pushed the site into closure. Subsequent to this, the McWatters Mine was permanently closed with rehabilitation planned for 2014, 2015 and 2016.