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REGIONAL NEWS - U.S. & CANADA Estimated proven and probable reserves at KSM total 38.2 million oz of gold in 2.164 billion mt at an average grade of 0.55 g/mt gold. Proven and probable reserves are derived from estimated total measured and indicated resources of 49 million oz of gold in 2.780 billion mt at an average grade of 0.55 g/mt gold, including allowances for mining losses and dilution. A near-surface, higher-grade gold zone at the Mitchell deposit will allow average annual gold production of 830,000 oz/y during the first seven years of operation, substantially above the mine-life average of 508,000 oz/y. The updated PFS envisages a com- bined open-pit/underground mining opera- tion. During the initial 25 years of mine life, all ore will be mined by open-pit meth- ods. As mining at the Mitchell deposit switches to block caving in year 26, daily production will decline to an average of approximately 90,000 mt/d over the remaining 30 years of mine life. Over the entire 55-year mine life, ore will be fed to a flotation mill that will pro- duce a combined gold-copper-silver con- centrate for transport by truck to the near- by deep-water sea port at Stewart, British Columbia. Extensive metallurgical testing confirms that KSM can produce a clean concentrate, with an average copper grade of 25%. A separate molybdenum concen- trate and gold-silver doré also will be pro- duced at the KSM processing facility. Start-up capital costs for the KSM proj- ect are estimated at $5.31 billion. Average operating costs over the project's life are estimated at $13.64/mt milled before base metal credits. Life-of-mine total costs per ounce of gold produced at base-case metal prices, including all capital and net of byproduct credits, are estimated at $603/oz. Cliffs Initiates Chromite Project Feasibility Study Cliffs Natural Resources has initiated a fea- sibility study at its chromite project in the Ring of Fire area of northern Ontario. The study will build further on current technical and economic evaluations, and a clearly defined project description will enable envi- ronmental assessment to move forward, Cliffs said, in announcing the study. Discussions between Cliffs and the gov- ernment of Ontario have resulted in agree- ment in principle on key elements of the chromite project, including development of provincial infrastructure. The company has www.e-mj.com JUNE 2012 • E&MJ; 17 selected Sudbury, Ontario, as its future fer- rochrome processing facility site based on economic and technical factors that include transportation logistics, labor, long mining tradition, community support and access to electrical power. Before Cliffs can make a final decision on the project in its entirety, the company must receive provincial and federal envi- ronmental assessment approvals, negotiate mutually acceptable agreements with affected First Nations communities, work with governments to address the lack of infrastructure in the Ring of Fire area, and complete its commercial and technical feasibility studies. Cliffs currently anticipates that a major- ity of the project's anticipated capital com- (Continued on p. 50)