PROJECT MANAGEMENT REPORT ON MINTO MINE

BYDISHA GARDI (205) MBATECH-CHEMICAL

INTRODUCTION
The Minto Mine is located 240km north of Whitehorse, Canada. It is a high grade coppergold mine that started its commercial production on October 1, 2007. It is owned 100% by Minto Explorations Ltd., a wholly owned subsidiary of Capstone Mining Corp.

Capstone Mining Corp acquired Minto Explorations and all other project interests, including a partially constructed but dormant construction site, in June 2005. Within two years from acquisition, Capstone re-drilled the mineral resources to mineral reserve standards, completed a bankable feasibility study, arranged project financing, built a new mine and reached commercial production. In the two years following that the mine has undergone a tremendous change ; it has been expanded twice , there is an increase in throughput by more than 100 % and also discovered five new deposits. The Mine is basically an open pit mining operation with conventional crushing, grinding, and flotation to produce copper concentrates with significant gold and silver credits. In December 2007, pre-feasibility study for the expansion of the copper-gold mine was done. The study benefited because it laid out a path for significant increase in copper production and also increased mineral reserves, enhancing project economics.

The basic steps done in mining while handling the project are :

MINERAL EXPLORATION
The first role of engineering in mines is the discovery of a mineral deposit and the determination of the profitability of a mine. The Minto mine plan focused on accessing and milling the high grade ore in Minto deposits. When the exploration was done , MintoEx commissioned a gravity gold recovery plant to recover the free gold that was present in grinding circuit. In order to assess the possible opportunity of large scale open pits ,prefeasibility study was done where optimizing the copper costs and lowering operating cost were discussed.

MINERAL DISCOVERY
Mining engineers are involved in the mineral discovery stage by working with geologists to identify a mineral reserve. The first step in discovering an ore body is to determine what minerals to test for. The geologists and engineers drill core samples and conduct surface surveys searching for specific compounds and ores.

MINERAL DETERMINATION
After the mineral is located , the engineers determines the ore properties. Once it is done , the next step is to determine the quantity of ore. The geologists identified a possible expansion and thus resource expansion was done in Minto mine.

RESOURCE EXPANSION
In 2006, Capstone geologists identified a possible extension to the Minto Main deposit, 130m south of the pit currently under development. An aggressive drill program in 2006 resulted in the discovery and definition of a significant new mineral resource called Area 2. Within few months of expansion , Area 2 was converted into mineral reserve which considerably increased the throughput and also increased copper-gold production.

PROJECT FEASIBILITY
Feasibility is the process of investigating a need , problem , and solutions in sufficient detail to determine if a solution is economically viable and worth developing. The feasibility study can happen multiple times and with different parties in a project: minimally the customer performs a study to determine if the project is worth supporting or not; the contractor also performs one to determine if the project is worth pursuing. A mining feasibility study is an evaluation of a proposed mining project to determine whether the mineral resource can be mined economically. There are three types of feasibility study used in mining, order of magnitude, preliminary feasibility and detailed feasibility.

ORDER OF MAGNITUDE
Order of magnitude feasibility studies are an initial financial appraisal of an indicated mineral resource. Depending on the size of the project an order of magnitude study may be carried out. It will involve a preliminary mine plan, and are the basis for determining whether or not to proceed forward with an exploration program.

PRELIMINARY FEASIBILITY
Preliminary feasibility studies or "pre-feasibility studies" are more detailed than order of magnitude studies. The pre-feasibility study explains and gives accuracy whether the project is profitable .A pre-feasibility study on Minto mine had following highlights:

 Hatch conducted a Definitive Feasibility Study ("DFS") on the Minto Main deposit in
2006 and positive results of the study led to the construction of the mine and mill. Commercial production was declared on October 1, 2007 with ore being extracted exclusively from the Main pit.

 In 2006, geologists identified a possible extension to the main deposit, 130m south of
the pit currently under development. An aggressive drill program was conducted which resulted in the discovery and definition of a significant new resource called Area 2. To assess the economic potential of the Area 2 resource, a Pre-feasibility Study ("Area 2 PFS") was completed under the supervision of SRK Consulting (Canada) Inc. and published in 2007.  The pre-feasibility study for the Phase IV expansion ("Phase IV PFS") of the Minto copper-gold mine details, with ore to be extracted from new mineralized areas discovered since 2006.  On preliminary analysis, the underground option appears to have a more attractive investment profile. As a result, the underground option is being prioritized in 2010, offering the potential for higher production and/or lower costs than those outlined in the Phase IV PFS.  Mine life extended to 2018 with an average of 45 million pounds of copper production per year

DETAILED FEASIBILITY
Detailed feasibility studies are the most detailed and will determine definitively whether or not to proceed with the project. The detailed feasibility analysis determines the

cost of operation and there is an accuracy of around 70-80% of the projects profit .

PROJECT RISKS & OPPORTUNITIES

 Time-to-time approval of permit is necessary, delays could lead to considerable losses;  Exchange rates, metal prices and external influences;  Grade control, given the relatively narrower mineralized horizons in the Phase IV pits as compared to the Minto Main pit. The most important opportunities to improve the project are:  Optimization of mine plan to smooth out the production profile and optimize stripping;  A conceptual level review was completed that involves underground extraction of higher grade ore, eliminating the need for further plant expansions and allowing processing of higher grade ore sooner than in an expanded open pit scenario.  Discovery of new mineral resources and mineral reserves.

ECONOMICS
SRK reports that the estimated economic benefit of mining the Minto Phase IV deposits is sufficient to take the Phase IV expansion project to the next level. While more detailed work will be required to optimize the project, there is adequate economic justification for MintoEx to proceed with further work and, in particular, the application for licence and permit amendments from the Yukon Government.