Ongoing Program

Given today’s metal prices, Buchans Minerals believes the Lundberg  & Engine House resources warrants further detailed examination to determine the viability of it becoming an operating open pit mine. The Company has now embarked on a bench scale metallurgical program to determine the recoverability of the metals from the resource and a preliminary mining plan.

The preliminary mine plan will initially optimize open pit mine shells for each of the four resource thresholds at the 1% combined Zn, Pb, Cu Threshold and the 1.0%, 1.5% and 2.0% Zn thresholds identified in the table below. Each of the four open pit scenarios will be evaluated to produce a final pit design, optimum tonnage through-puts and mining schedules (with grades and stripping ratios) for a mill located at Lundberg. As part of the mining plan, both open pit and underground mining methods will be considered.

In conjunction with the bench scale metallurgical tests currently ongoing at SGS laboratories, the preliminary mining plan will be evaluated with a view to potentially proceeding with a national instrument 43-101 compliant Preliminary Economic Assessment (“PEA”) thereafter. The bench scale metallurgical tests and the preliminary mining plan are anticipated to be completed in the Autumn of 2010. Should the company decide to proceed with the PEA, the optimum production schedule and tonnage throughputs determined by the preliminary mine plan and the metallurgical results will be incorporated into a total mine design that will include the processing plant design, site development, capital costs, operating costs and a cash flow model determining the internal rate of return and net present value of the project under current and projected economic conditions.

2008 Re-Discovery

In 2008, Buchans Minerals researched archive files from the former Buchans Mine, located in the town of Buchans in central Newfoundland and successfully identifying a zone of mineralization peripheral to the former Lucky Strike mine and underlying portions of the former mine infrastructure. This mineralization was subsequently named the Lundberg and Engine House zones and was the subject of a drill program that resulted in a NI 43-101 compliant Inferred resource (using a 1% combined Zn+Pb+Cu threshold) of 20.7 million tonnes with a combined Zn+ Pb+ Cu grade of 2.78%. (Royal Roads news release of November 7^th, 2008).

Lundberg Resource

Table 1a outlines the Lundberg Inferred Resource Estimate at various zinc thresholds; Table 1b outlines the Lundberg Inferrred Resource Estimate using a threshold of 1% combined copper, lead and zinc.  Table 2a outlines the Engine House Inferred Resource Estimate at various zinc thresholds; Table 2b outlines the Engine House Inferred Resource Estimate using a threshold of 1% combined copper, lead and zinc.

Table 1a.  Lundberg Inferred Resource Estimate (100% owned) 

Table  1b.  Lundberg Inferred Resource Estimate (1% combined Cu+Pb+Zn)

Table 2a.  Engine House Inferred Resource Estimate (100% owned) 

Table 2b. Engine House Inferred Resource Estimate (1% combined Cu+Pb+Zn)