Lac Minerals Development of Hemlo

"INTRODUCTIONThe Hemlo area is located in Northern Ontario, some 350 km east of Thunder Bay along highway 17. Hemlo is Canada's largest, recent discovery of gold ore. Three companies, Lac, Noranda, and Teck are currently developing mines and processing facilities in the area. A combined milling capacity of approximately 10,000 tonnes per day will ultimately be available in the area. The gold yield will be between 750,000 to 1,000,000 ozs. per year. This will slightly more than double Ontario's gold production but only represents 2.5% of the total world gold production.Lac Minerals Ltd. is substantially committed to the gold mining business. Lac currently operates four (4) gold mines and mills and produces 300,000 ozs. per year. Lac's Hemlo development will put the company in the position of number one gold producer in Canada.The Lac Hemlo ore body has an estimated reserve of 37 million tonnes at 6.2 g/t. The mining will take place at an initial rate of 3,000 t/d commencing in the first quarter of 1986. The mine and plant will be expanded to 6,000 t/d in 1988. At this capacity, Lac will be the largest producer in the Hemlo area.1. GEOLOGYThe orebody is divided into two (2) zones for mining purposes. The 'A' Zone is to the east and dips to the Northeast from surface to 300 m below surface. This zone has a strike length of 250 m to 300 m at an average width of 20 m. The upperpart of the zone will be mined by open pit and the remainder from underground. The 'B' Zone, to the north west of the 'A' Zone, although lined up is not necessarily an extension of 'A' Zone. 'B' Zone has a known strike length of 600 m and is open to depth and along the strike. It is over 70 m wide in the core. This zone holds most of the property's known reserves. 'C' Zone with narrow gold zones is under exploration in the south west portion of the property."