Technical Report Bovill Project: Pre-Feasibility Study · 2020. 2. 18. · Technical Report Bovill...

Technical Report

Bovill Project: Pre-Feasibility Study

PREPARED FOR:

I-Minerals Inc.

PREPARED BY:

Mr. Steven B. Kerr, C.P.G., Principal Consultant - Geology, Millcreek Mining Group

Mr. Alister D. Horn, MMSA (QP), Principal Consultant – Mining, Millcreek Mining Group

Effective Date: February 18, 2020

Report Date: March 31, 2020

Project Number: 190079

I-MINERALS – 190084

BOVILL PROJECT TECHNICAL REPORT

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TABLE OF CONTENTS

SUMMARY .................................................................................................................... 1-1

EXECUTIVE SUMMARY ........................................................................................ 1-1

CONCLUSIONS AND RECOMMENDATIONS ............................................................. 1-4

Mineral Resources ................................................................................ 1-4

Mining ................................................................................................... 1-4

Mineral Processing ............................................................................... 1-5

Mineral Reserves .................................................................................. 1-5

Recommendations ................................................................................ 1-5

ECONOMIC SUMMARY ......................................................................................... 1-6

Capital and Operating Costs ................................................................. 1-6

TECHNICAL SUMMARY ........................................................................................ 1-7

Property Description ............................................................................. 1-7

Geology and Mineralization .................................................................. 1-8

Exploration ........................................................................................... 1-9

Mining Method ...................................................................................... 1-9

Infrastructure ...................................................................................... 1-10

Mining Processing .............................................................................. 1-10

Environmental, Permitting and Social Considerations ......................... 1-11

INTRODUCTION ............................................................................................................ 2-1

GENERAL ........................................................................................................... 2-1

PROJECT BACKGROUND ..................................................................................... 2-1

SCOPE OF WORK ............................................................................................... 2-2

QUALIFIED PERSONS .......................................................................................... 2-3

SITE INSPECTIONS .............................................................................................. 2-3

RELIANCE ON OTHER EXPERTS ................................................................................ 3-1

PROPERTY DESCRIPTION AND LOCATION .............................................................. 4-1

PROPERTY LOCATION ......................................................................................... 4-1

MINERAL TENURE ............................................................................................... 4-3

ENVIRONMENTAL LIABILITIES AND PERMITTING ..................................................... 4-6

Environmental Liabilities ....................................................................... 4-6

Required Permits and Status ................................................................ 4-6

Exploration Activities............................................................................. 4-6

Mining Activities .................................................................................... 4-6

OTHER SIGNIFICANT FACTORS AND RISKS ........................................................... 4-7



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ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY .......................................................................................................... 5-1

ACCESIBILITY AND TRANSPORTATION .................................................................. 5-1

CLIMATE ............................................................................................................ 5-1

PHYSIOGRAPHY .................................................................................................. 5-2

LOCAL RESOURCES AND INFRASTRUCTURE ......................................................... 5-2

HISTORY ....................................................................................................................... 6-1

IDAHO FIRE BRICK AND CLAY COMPANY (1910-1955) .......................................... 6-1

U.S. BUREAU OF MINES AND U.S. GEOLOGICAL SURVEY (1942-1956) .................. 6-1

THE ANACONDA COMPANY (1919, 1952-63) ........................................................ 6-2

U.S. BUREAU OF MINES (1953-1963) ................................................................. 6-2

A.P. GREEN REFRACTORIES COMPANY (1956-1993) ........................................... 6-2

J.R. SIMPLOT COMPANY (1956-1974) ................................................................. 6-2

SEVERAL COMPANIES (1983-1986) ..................................................................... 6-3

NORTHWEST KAOLIN INC. (1999-2002) ............................................................... 6-3

HAMMOND ENGINEERING (1998-PRESENT) .......................................................... 6-3

I-MINERALS INC. (1999- PRESENT) ...................................................................... 6-4

GEOLOGICAL SETTING AND MINERALIZATION ....................................................... 7-1

REGIONAL GEOLOGY .......................................................................................... 7-1

PROPERTY GEOLOGY ......................................................................................... 7-3

Belt Supergroup (Yb) ............................................................................ 7-3

Thatuna Granodiorite (Kgd) .................................................................. 7-3

Potato Hill Volcanics (Tphy, Trdy) ......................................................... 7-4

Columbia River Basalts (Tcrb) .............................................................. 7-4

Latah Formation (Tsb) .......................................................................... 7-4

Palouse Formation ............................................................................... 7-5

STRUCTURAL GEOLOGY...................................................................................... 7-5

MINERALIZATION ................................................................................................ 7-5

MINERAL OCCURRENCES .................................................................................... 7-6

DEPOSIT TYPES ........................................................................................................... 8-1

EXPLORATION ............................................................................................................. 9-1

PROCEDURES AND PARAMETERS OF SURVEYS AND INVESTIGATIONS ..................... 9-1

SAMPLING METHODS AND SAMPLE QUALITY ........................................................ 9-1

RESULTS AND INTERPRETATION .......................................................................... 9-1

DRILLING .................................................................................................................... 10-1

RESULTS AND INTERPRETATION ...................................................................... 10-14



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SAMPLE PREPARATION, ANALYSES AND SECURITY ........................................... 11-1

SAMPLING METHOD AND APPROACH .................................................................. 11-1

Core Samples ..................................................................................... 11-1

Channel Samples ............................................................................... 11-2

Bulk Samples...................................................................................... 11-2

ANALYSES ....................................................................................................... 11-2

Geochemistry ..................................................................................... 11-2

Material Characterization .................................................................... 11-3

Density Determinations ....................................................................... 11-6

SECURITY MEASURES....................................................................................... 11-6

QUALITY CONTROL/QUALITY ASSURANCE .......................................................... 11-7

Reference Samples ............................................................................ 11-7

Duplicate Samples ............................................................................ 11-10

OPINION ON ADEQUACY .................................................................................. 11-12

DATA VERIFICATION ................................................................................................. 12-1

VERIFICATION OF CORE LOGS ........................................................................... 12-1

DATABASE VERIFICATION .................................................................................. 12-1

LIMITATIONS ..................................................................................................... 12-3

OPINION ON DATA ADEQUACY ........................................................................... 12-3

MINERAL PROCESSING AND METALLURGICAL TESTING .................................... 13-1

HISTORICAL TESTING ........................................................................................ 13-1

PREVIOUS AND UPDATED TESTING .................................................................... 13-3

Representative Sample Collection ...................................................... 13-3

Comminution ...................................................................................... 13-7

Clay Processing .................................................................................. 13-7

Clay Filtration.................................................................................... 13-13

Clay Production Pilot Plants .............................................................. 13-14

Sand Processing .............................................................................. 13-17

Tailings Processing .......................................................................... 13-19

Sand / Clay Hydrocyclone Separation .............................................. 13-20

Kaolin Flash Calciner Testing- .......................................................... 13-20

MINERAL RESOURCE ESTIMATES .......................................................................... 14-1

DRILL HOLE DATABASE ..................................................................................... 14-1

GEOLOGY OF THE RESOURCE ESTIMATION ........................................................ 14-1

GEOLOGIC MODEL ............................................................................................ 14-2

Grade Capping ................................................................................... 14-2

Compositing ....................................................................................... 14-2

Variography ........................................................................................ 14-3



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Density ............................................................................................... 14-3

Topography ........................................................................................ 14-4

RESOURCE MODELING...................................................................................... 14-4

MODEL VALIDATION ........................................................................................ 14-14

RESOURCE CLASSIFICATION ........................................................................... 14-18

MILLCREEK AUDIT .......................................................................................... 14-18

MINERAL RESOURCE STATEMENT ................................................................... 14-19

MINERAL RESERVES ................................................................................................ 15-1

INTRODUCTION ................................................................................................. 15-1

Mineral Reserve definition .................................................................. 15-1

Probable Mineral Reserve definition ................................................... 15-2

Proven Mineral Reserve definition ...................................................... 15-3

Modifying Factors definition ................................................................ 15-3

PIT OPTIMIZATION ............................................................................................ 15-3

Economic Parameters ........................................................................ 15-4

NSR Calculations and Cutoff Grades .................................................. 15-5

Slope Parameters ............................................................................... 15-6

Pit-Optimization Results ..................................................................... 15-7

Ultimate Pit Limit Determination .......................................................... 15-9

PIT DESIGNS .................................................................................................... 15-9

Bench Height ...................................................................................... 15-9

Pit Design Slopes ............................................................................. 15-11

Haulage Roads ................................................................................. 15-11

Pit Phasing ....................................................................................... 15-11

DILUTION ....................................................................................................... 15-14

ESTIMATED RESERVES ................................................................................... 15-14

MINING METHOD ........................................................................................................ 16-1

MATERIAL TYPES ............................................................................................. 16-1

MINING METHOD .............................................................................................. 16-1

MINE-WASTE FACILITIES ................................................................................... 16-1

MINE-PRODUCTION SCHEDULE ......................................................................... 16-2

EQUIPMENT SELECTION .................................................................................... 16-7

MINE PERSONNEL ............................................................................................ 16-7

RECOVERY METHODS .............................................................................................. 17-1

INTRODUCTION ................................................................................................. 17-1

PROCESS DESCRIPTION .................................................................................... 17-1

PROCESS OVERVIEW ........................................................................................ 17-1

ROM STOCKPILING AND CRUSHING CIRCUIT SUMMARY ...................................... 17-3



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CLAY/ SAND SEPARATION CIRCUIT SUMMARY .................................................... 17-3

CLAY CIRCUIT SUMMARY .................................................................................. 17-3

SPECIALITY SANDS CIRCUIT .............................................................................. 17-4

TAILINGS SUMMARY .......................................................................................... 17-4

MINE INFRASTRUCTURE AND LAYOUT .................................................................. 18-1

MINE LAYOUT ................................................................................................... 18-1

FACILITY LAYOUT ............................................................................................. 18-1

Buildings ............................................................................................. 18-3

TRANSPORTATION AND LOGISTICS ..................................................................... 18-3

Roads ................................................................................................. 18-3

Ore Transport ..................................................................................... 18-5

Reagent Supply and Transport ........................................................... 18-6

Product Transport ............................................................................... 18-6

Water Distribution ............................................................................... 18-6

Electricity ............................................................................................ 18-7

Natural Gas ........................................................................................ 18-8

Fuel Storage, Supply, and Distribution ................................................ 18-8

Communications ................................................................................. 18-8

HUMAN RESOURCES ........................................................................................ 18-8

TAILINGS DISPOSAL .......................................................................................... 18-8

TSF Design Criteria .......................................................................... 18-10

TSF Site Description ......................................................................... 18-11

TSF Design Features ........................................................................ 18-12

TSF Construction .............................................................................. 18-12

TSF Operation .................................................................................. 18-13

TSF Design Assessments ................................................................ 18-14

TSF Instrumentation and Monitoring ................................................. 18-15

TSF Closure ..................................................................................... 18-15

MARKETS AND CONTRACTS ................................................................................... 19-1

METAKAOLIN .................................................................................................... 19-1

Introduction ......................................................................................... 19-1

Kaolin Background ............................................................................. 19-1

Metakaolin Product ............................................................................. 19-1

Metakaolin Market .............................................................................. 19-2

Metakaolin Pricing and Contracts ....................................................... 19-4

HALLOYSITE ..................................................................................................... 19-5

Introduction ......................................................................................... 19-5

Halloysite Background ........................................................................ 19-5

Halloysite Market ................................................................................ 19-7



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Pricing and Contracts ......................................................................... 19-9

SAND PRODUCTS ............................................................................................. 19-9

ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

..................................................................................................................................... 20-1

INTRODUCTION ................................................................................................. 20-1

ENVIRONMENTAL STUDIES ................................................................................ 20-1

Environmental Setting ......................................................................... 20-1

Environmental Study Requirements .................................................... 20-2

Summary of Environmental Studies .................................................... 20-2

ENVIRONMENTAL PERMITTING ........................................................................... 20-9

Mine Permitting ................................................................................. 20-12

Air Quality Permitting ........................................................................ 20-12

Cultural Resources ........................................................................... 20-13

Migratory Bird Act and Bald and Golden Eagle Protection Acts ........ 20-13

Subsurface Sewage Disposal ........................................................... 20-14

Potable Water ................................................................................... 20-14

Water Rights ..................................................................................... 20-14

ENVIRONMENTAL, SOCIAL, AND COMMUNITY IMPACTS ...................................... 20-14

Stakeholder Engagement ................................................................. 20-14

Social Impacts .................................................................................. 20-17

Environmental Impacts ..................................................................... 20-18

Threatened and Endangered Species and Wildlife Assessment ....... 20-20

WASTE MANAGEMENT .................................................................................... 20-21

REHABILITATION AND CLOSURE ....................................................................... 20-22

CAPITAL AND OPERATING COSTS .......................................................................... 21-1

MINE CAPITAL COSTS ....................................................................................... 21-1

Assumptions and Approach ................................................................ 21-1

Capital Costs - General ...................................................................... 21-2

Initial Capital ....................................................................................... 21-3

Sustaining Capital ............................................................................... 21-4

Working Capital .................................................................................. 21-4

MINE OPERATING COSTS .................................................................................. 21-4

Contract Mine Operating Costs ........................................................... 21-4

Owner’s Mine Operating Costs ........................................................... 21-5

Owner’s Plant Operating Costs ........................................................... 21-6

ECONOMIC ANALYSIS .............................................................................................. 22-1

INTRODUCTION ................................................................................................. 22-1

ASSUMPTIONS .................................................................................................. 22-1



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ECONOMIC CRITERIA ........................................................................................ 22-1

Production .......................................................................................... 22-1

Pricing and Revenues ......................................................................... 22-2

Taxes and Royalties ........................................................................... 22-2

Capital Costs ...................................................................................... 22-3

TAXES AND ROYALTIES ..................................................................................... 22-3

Royalties ............................................................................................. 22-3

Federal Tax ........................................................................................ 22-3

State Corporate Income Tax ............................................................... 22-3

Mine License Tax ............................................................................... 22-3

Property Tax ....................................................................................... 22-3

Depreciation / Depletion ..................................................................... 22-3

Tax Loss Carryforwards ...................................................................... 22-4

CASH FLOW ..................................................................................................... 22-4

SENSITIVITY ANALYSIS ...................................................................................... 22-6

ADJACENT PROPERTIES .......................................................................................... 23-1

OTHER RELEVANT DATA AND INFORMATION ....................................................... 24-1

INTERPRETATION AND CONCLUSIONS .................................................................. 25-1

CONCLUSIONS ................................................................................................. 25-1

Mineral Resources .............................................................................. 25-1

Mining ................................................................................................. 25-1

Mineral Processing ............................................................................. 25-2

Project Economics .............................................................................. 25-3

Mineral Reserves ................................................................................ 25-3

Environmental Studies, Permitting, and Social or Community Impact . 25-4

RISKS AND OPPORTUNITIES .............................................................................. 25-5

Risks .................................................................................................. 25-5

Opportunities ...................................................................................... 25-5

RECOMMENDATIONS ................................................................................................ 26-1

REFERENCES ............................................................................................................. 27-1



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LIST OF TABLES

Table 1.1 Audited Mineral Resource Estimate ......................................................................... 1-3

Table 1.2 Proven and Probable Reserves* .............................................................................. 1-4

Table 1.3 Initial CapEx Summary ............................................................................................ 1-6

Table 1.4 Contractor OpEx Summary ...................................................................................... 1-7

Table 1.5 Owner’s OpEx Summary ......................................................................................... 1-7

Table 2.1 Responsible Qualified Persons ................................................................................ 2-3

Table 4.1 Mineral Leases ........................................................................................................ 4-4

Table 10.1 Summary of Drilling at Bovill Project .................................................................... 10-1

Table 10.2 Bovill Project Drillholes ........................................................................................ 10-2

Table 11.1 Clay Code Assignment ........................................................................................ 11-6

Table 12.1 Database Verification Holes................................................................................. 12-2

Table 13.1 Sample Locations ................................................................................................ 13-4

Table 13.2 Summary of Test-Work and Reporting ................................................................. 13-6

Table 13.3 Clay Processing Product Recoveries and Brightness ........................................ 13-10

Table 13.4 Product Yields (Based on previous mine plan and testing samples) .................. 13-10

Table 13.5 Vacuum Filtration Results .................................................................................. 13-14

Table 13.6 Summary of Key Processing and Final Product from 2017 Pilot Plant ............... 13-15

Table 13.7 Summary of Key Processing and Final Product ................................................. 13-17

Table 13.8 XRD Analysis of the Tailings Composite Sample ............................................... 13-19

Table 13.9 Product Data Summary ..................................................................................... 13-23

Table 14.1 Capping and Compositing Results ....................................................................... 14-3

Table 14.2 block model density values .................................................................................. 14-4

Table 14.3 block model dimensions ...................................................................................... 14-5

Table 14.4 percentage of model blocks in clay shell .............................................................. 14-5

Table 14.5 Resource Estimation Parameters ...................................................................... 14-12

Table 14.6 Resource Estimation High-Grade Restrictions ................................................... 14-13

Table 14.7 Grade Estimation Performance Parameters ...................................................... 14-15

Table 14.8 Statistical Validation .......................................................................................... 14-16

Table 14.9 Nearest Neighbor Validation .............................................................................. 14-17

Table 14.10 Mineral Resource Summary ............................................................................ 14-20

Table 15.1 Pit Optimization Economic Parameters ................................................................ 15-4

Table 15.2 Whittle Pit Optimization Results ........................................................................... 15-8

Table 15.3 Proven and Probable Reserves* ........................................................................ 15-14

Table 15.4 Proven and Probable Reserves with Associated Waste ..................................... 15-15

Table 16.1 Mine Production Schedule ................................................................................... 16-4

Table 16.2 Annual Ore Delivery to the Plant .......................................................................... 16-5

Table 16.3 Annual Stockpile Balance .................................................................................... 16-6



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Table 18.1 Building and Structure Details of Bovill Process Plant.......................................... 18-3

Table 18.2 Tailings Storage Facility Design Parameters ....................................................... 18-9

Table 18.3 Summary of TSF Design Criteria and Assumptions ........................................... 18-11

Table 18.4 TSF Design Storage Capacity and Stage Design Life ........................................ 18-13

Table 18.5 Hydrotechnical Modeling Results ....................................................................... 18-14

Table 20.1 Required Environmental Permits ....................................................................... 20-10

Table 20.2 Summary of Estimated Disturbance and Reclamation for Bovill Project ............. 20-19

Table 20.3 Summary of Waste Generation and Disposal/Reuse Methods ........................... 20-21

Table 21.1 Initial CapEx Summary ........................................................................................ 21-3

Table 21.2 Contractor OpEx Summary .................................................................................. 21-5

Table 21.3 Owner’s OpEx Summary ..................................................................................... 21-7

Table 22.1 Cash Flow Summary ........................................................................................... 22-5

Table 22.2 Results of Economic Analysis .............................................................................. 22-6

Table 25.1 Project Economics ............................................................................................... 25-3



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LIST OF FIGURES

Figure 4.1 General Location Map ............................................................................................ 4-2

Figure 4.2 Locations of Mineral Leases ................................................................................... 4-5

Figure 7.1 Regional Geology of the Bovill Project .................................................................... 7-2

Figure 10.1 Drilling Locations for Bovill Project ...................................................................... 10-2

Figure 11.1. UOI Reference Material Tests ........................................................................... 11-9

Figure 11.2. UOI Reference Material Test with Bias Correction ............................................. 11-9

Figure 11.3. UOI vs GMT -325 Mesh Duplicates ................................................................. 11-11

Figure 11.4. UOI vs CCL -325 Mesh Duplicates .................................................................. 11-11

Figure 13.1 Metallurgical Sample Location and Pit Outlines .................................................. 13-5

Figure 13.2 GMT Clay Testwork Processing Flowsheet ........................................................ 13-9

Figure 13.3 Finished Halloysite Product Brightness ............................................................ 13-12

Figure 13.4 Flash Calcining System Schematic ................................................................... 13-22

Figure 14.1 Limits of Nested Clay Shells ............................................................................... 14-7

Figure 14.2 I-minerals Block Grade Cross-Section WBL ....................................................... 14-8

Figure 14.3 I-minerals Block Grade Cross-Section Middle Ridge .......................................... 14-9

Figure 14.4 I-minerals Block Grade Cross-Section Kelly’s Hump North ............................... 14-10

Figure 14.5 I-minerals Block Grade Cross-Section Kelly’s Hump South .............................. 14-11

Figure 15.1 Pit Slope Parameters* ........................................................................................ 15-7

Figure 15.2 Ultimate Pit Design ........................................................................................... 15-10

Figure 17.1 Process Flow Diagram ....................................................................................... 17-2

Figure 18.1 Mine Layout ........................................................................................................ 18-1

Figure 18.2 Plant and Infrastructure Layout ........................................................................... 18-2

Figure 18.3 Moose Creek Road Upgrades ............................................................................ 18-4

Figure 18.4 Mine Haul Road Upgrade ................................................................................... 18-5

Figure 18.5 Mine Haul Road Upgrade - Typical Section ........................................................ 18-6

Figure 18.6 Tailings Facility Staging Plan ............................................................................ 18-10

Figure 19.1 Increase in Published* Interest in Halloysite ....................................................... 19-6

Figure 20.1 Area Drainage Map ............................................................................................ 20-6

Figure 20.2 General Geology Map ........................................................................................ 20-7

Figure 20.3 Community Map ............................................................................................... 20-16

Figure 21.1 Owner’s OpEx Summary .................................................................................... 21-7

Figure 22.1 Revenues over Life-of-Mine ................................................................................ 22-2

Figure 22.2 Sensitivity to Costs ............................................................................................. 22-6

Figure 22.3 Sensitivity to Prices ............................................................................................ 22-7



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UNITS

acre-ft acre-foot

AC alternating current

A ampere

A-hr ampere-hour

atm atmosphere

avg average

BBL barrel

Ga billion years

BHP brake horsepower

btu British thermal unit

ft3 cubic foot

CFM cubic feet per minute

CFS cubic feet per second

in3 cubic inch

yd3 cubic yard

d day

dB decibel

° degree

°F degree Fahrenheit

DC direct current

$ dollars (United States dollars, unless otherwise stated)

dozen dozen

fph feet per hour

fpm feet per minute

fps feet per second

ft foot

ft-lb foot-pound

gal gallon

gpm gallons per minute

gps gallons per second

Hz Hertz

HP horsepower



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hr hour

In inch

kt kilotons (short)

ktpa kilotons (short) per annum)

kV kilovolt

kVA kilovolt-ampere

kW kilowatt

kWh kilowatt-hour

MW megawatt

mi mile

mph miles per hour

M million

Ma million years

min minute

mo Month

ppb parts per billion

ppm parts per million

p per (imperial)

/ per (metric)

% percent

lb pound

lb/ft3 pounds per cubic foot

PSF pounds per square foot

PSI pounds per square inch

PSIA pounds per square inch absolute

PSIG pounds per square inch gauge

rad radian

rad/s radians per second

RPM revolutions per minute

RPS revolutions per second

RMS root mean square

s second

T tesla

t short tons



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tpd short tons per day

tph short tons per hour

tpm short tons per month

Tpy short tons per year

TSF Tailings Storage Facility

S.G. specific gravity

ft2 square foot

in2 square inch

yd2 square yard

STP standard temperature and pressure

% vol volume percent

V Volt

VA Volt-ampere

W Watt

Wh Watt-hour

wk week

wt weight

% wt weight percent

yd yard

yr year

SG Specific Gravity

Note: Unless otherwise noted, or to be consistent with previous reporting, this

document uses common imperial units, and all economic reporting is in constant

(2019) US dollars.



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ABBREVIATIONS

AACE Association for the Advancement of Cost Engineering

Alchemy Alchemy Kaolin Corporation

ALS ALS Global

AMSL above mean sea level

ASTM American Society for Testing and Materials

AZ Arizona

Bilfinger Bilfinger Water Technologies Incorporated

BMP Best Management Practices

CCL Commercial Clay Laboratory

CIM Canadian Institute of Mining Metallurgy and Petroleum

CRB Columbia River Basalts

CWA Clean Water Act

DCF Discount cash flow

DOT Department of Transportation

D.I. De-ionized

ECOS Environmental Conservation Online System

FOB Free-on-board

G&A General and Administrative

GMT Ginn Mineral Technology

HEC-HMS Hydrologic Engineering Center – Hydrologic Modeling System

HDPE High-Density Polyethylene

HNT Halloysite Nanotubes

ID Idaho

ID2 Inverse Distanced Squared

IDAPA Idaho Administrative Procedure Act

IDEQ Idaho Department of Environmental Quality

IDFG Idaho Department of Fish and Game

IDL Idaho Department of Lands

IDWR Idaho Department of Water Resources

IFCC Idaho Fire Brick and Clay Company

IMM Idaho Industrial Minerals

JD Jurisdictional Determination



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LOI Loss-on-ignition

LOM life-of-mine

MDA Mine Development Associates

Millcreek Millcreek Mining Group

MK Metakaolin

MR Middle Ridge

MRL Mineral Research Laboratory

MSGP Multi-Sector General Permit

MSHA Mine Safety and Health Administration

NEPA National Environmental Policy Act

NKH North Kelly’s Hump

NOE Notification of Exploration

NOI Notice of Intent

NPDES National Pollutant Discharge Elimination System

NTNC non-transient non-community

OEM Original Equipment Manufacturer

PCA Portland Cement Association

PCC precipitated calcium carbonate, or portland cement concrete

PEM palustrine emergent march

PFS Pre-Feasibility Study

PFW palustrine forested wetland

PJD preliminary jurisdictional determination

PM particulate matter

PTC Permit to Construct

QA/QC Quality-assurance / quality-control

QP Qualified Person

RDI Resource Development Corporation

ROM run-of-mine

RWi Modified Bond Rod Mill Work Index

SCM supplemental cementitious materials

SEM Scanning Electron Microscopy

SHPO State Historic Preservation Office

SKH South Kelly’s Hump

SWPPP Stormwater Pollution Prevention Plan



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TAPPI Technical Association of the Pulp and Paper Industry

TGM Technical Guidance Manual for Individual and Subsurface Sewage Disposal Systems

TMDL Total Maximum Daily Load

UOI University of Idaho

US United States

USACE United States Army Corps of Engineers

USBM United States Bureau of Mines

USEPA United States Environmental Protection Agency

USFS United States Forest Service

USFWS United States Fish and Wildlife Service

USGA United States Golf Association

USGS United States Geological Survey

UT Utah

WBL Washington Brick and Lime

WRCC Western Regional Climate Center

XRD X-Ray Diffraction

XRF X-Ray Fluorescence



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SUMMARY

EXECUTIVE SUMMARY

Millcreek mining Group (Millcreek), in conjunction with Mine Development Associates

(MDA) has prepared this Technical Report on the Bovill kaolin and halloysite clays project

(the Bovill Project) on behalf of the project owner and issuer, I-Minerals Inc. (I-Minerals).

The purpose of this Technical Report is the describe the current pre-feasibility study and

state the related mineral resource and reserve estimations.

Since 1999, I-Minerals have acquired the relevant leases for the area currently considered

for the Bovill Project and have conducted various drilling exploration studies, as well as

pre-feasibility, and feasibility level studies. I-Minerals have offices in Idaho and Vancouver,

Canada, and are listed on both US and Canadian exchanges.

The Bovill Project is located in Latah county, in north-central Idaho, within an area referred

to as the ‘Idaho Clay District’ which lies between the towns of Moscow and Bovill. Mining

in the district began as early as 1910 and continues to this day.

The Bovill Project has been planned as an open-pit truck and excavator operation. Only

open-pit mining methods are considered for mining at Bovill. Material being mined consists

of clays, sands, and soils, and no drilling or blasting is anticipated. Mining operations will

occur in various smaller pits, with the operations being performed by a mining contractor.

The mining rate will average approximately 243 kilotons per year (ktpa). Waste will be

disposed of in external dumps, as well in backfill of the pits. Halloysite grades average

8.3% and kaolinite grades average 17.7% through the life-of-mine (LOM).

The mine will be accessed and supplied using existing forest roads with some

modifications for safety and effectiveness. Electrical power and natural gas will tie-into

existing nearby networks. Process water will generally be available from run-off from the

tailing area, or provided by water wells or a surface reservoir, while potable water will be

provided by potable water wells. Tailings disposal will consist of a dry stack storage facility

located near the process plant.

The Bovill Project has been the subject of a number of comprehensive test-work programs

extending back nearly a decade. Previous test work, including additional test work

completed by Ginn Mineral Technology (GMT) in 2019, successfully processed material

from the resource using production scaled systems to generate metakaolin, a standard-

grade HalloPure® halloysite; a high-purity ULTRA HalloPure® halloysite; and specialty

sands. (HalloPure® and ULTRA HalloPure® are registered trademarks of the branded



1-2

products that I-Minerals intend to produce and market. Any further reference to ‘HalloPure’

or ULTRA HalloPure within this report is to those trademarked products.)

Ore will be fed to the plant with a front-end loader for comminution then fed to a sand/clay

separation circuit using cyclones. Sand will be sent to dry stack tailing with the exception

of a screening operation to produce specialty sand. Clays will be split, with the oversize

fraction sent to waste and the halloysite and kaolin cyclone overflow fraction transferred

to a fractionation centrifuge to separate the halloysite and kaolin fractions. The halloysite

can then subjected to differential flotation to upgrade standard halloysite to a premium

halloysite product, while the kaolin is conditioned, filtered, dried and calcined to form

metakaolin. The calcined metakaolin is milled to produce the final product.

A 3D block model of the deposit was generated and then audited to confirm its validity.

The portion of the deposit with reasonable prospects for eventual economic extraction was

considered to be mineral resource. Millcreek considers the kaolinite and halloysite

mineralization at the Bovill Project to be amenable to extraction using open-pit mining

methods. Since the previous resource report, the commodity quartz & K-spar sands are

no longer considered resources. No cut-off grade has been applied to the resource

because all recovered material in the resource estimation contains sufficient kaolinite or

halloysite to be mined for a profit.

The table below presents the Mineral Resource Statement for the Bovill Project, audited

and confirmed by Millcreek:



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Table 1.1 Audited Mineral Resource Estimate

Classification Resource Area Tons

(000s) Kaolinite

(%) Halloysite

(%) Kaolinite

Tons (000s) Halloysite

Tons (000s)

Measured

Kelly's Hump 3,540 13.08 3.86 463 137

Middle Ridge 2,180 10.95 4.15 239 91

Sub-Total 5,720 12.27 3.97 702 228

Indicated

Kelly's Hump 7,500 14.81 2.77 1,110 208

Middle Ridge 5,140 17.91 3.61 920 185

WBL 2,900 13.31 1.62 386 47

Sub-Total 15,540 15.56 2.83 2,416 440

Measured & Indicated

Kelly's Hump 11,040 14.26 3.12 1,574 344

Middle Ridge 7,320 15.83 3.77 1,159 276

WBL 2,900 13.31 1.62 386 47

Total 21,260 14.67 3.14 3,119 667

Overall pit slope angle in soil was 34°, in mineralized material, 43°.

Optimized pit extents were constrained by the lease boundaries and delineated wetlands areas, both of which were provided by HDR Engineering Inc. (2013).

Total Kaolinite recovery assigned to 95%.

Values Presented here have been rounded to reflect the level of accuracy.

The geology Qualified Person (QP) is not aware of or perceives any environmental,

permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant

factors having any material impact on the resource estimate other than what is discussed

in this report.

Reasonable mining costs and plant recoveries were used as early-stage inputs to the pit-

shell optimization model. Optimized pit shells were designed accounting for bench design,

ramps, dilution, etc. Mine planning and economic modelling based on those pit shells were

then found to demonstrate the feasibility of economic recovery of a portion of the mineral

resource. These mineral reserves are summarized as follows:



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Table 1.2 Proven and Probable Reserves*

Proven Probable Total P&P

Total (kt) 1,310 1,868 3,178

Halloysite (%) 8.8 8.0 8.3

Halloysite (kt) 115 149 264

Kaolinite (%) 11.1 22.4 17.7

Kaolinite. (kt) 145 418 563

NSR ($/ton) $108 $123 $117

* Notes on Mineral Reserves: • Reserves are based on a $40.00 NSR cutoff grade and pit designs. • Rounding of numbers in mineral reserves listed above may cause apparent

inconsistencies.

In Millcreek’s opinion, these estimates are in accordance with guidelines proposed by the

CIM and referenced by NI 43-101.

The accuracy of resource and reserve estimates is, in part, a function of the quality and

quantity of available data and of engineering and geological interpretation and judgment.

Given the data available at the time this report was prepared, the estimates presented

herein are considered reasonable. However, they should be accepted with the

understanding that additional data and analysis available subsequent to the date of the

estimates may necessitate revision. These revisions may be material. There is no

guarantee that all or any part of the estimated resources or reserves will be recoverable.

CONCLUSIONS AND RECOMMENDATIONS

MINERAL RESOURCES

The geologic resource model has been audited, validated, and independently re-created.

The model was found to produce a reasonable representation of the deposit and its

mineral resources.

Total measured and indicated resources were found to be 21,260 kt of mineral-bearing

ore, yielding 3,119 kt of kaolinite and 667 kt of halloysite.

MINING

The deposit at the Bovill Project has been found to be amenable to economic extraction

using surface mining methods, with a standard ‘truck-shovel’ approach, and with little or

no need for drilling and blasting. It is proposed that a contractor be used for mining



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operations. The mine plan has been developed to produce approximately 11 ktpa of

halloysite and 23 ktpa of kaolinite, from an average of 233 kt of total ore and waste are

mined each year, during ‘steady state’ production after project ramp-up.

MINERAL PROCESSING

The main products that I-Minerals intends to produce through this facility are metakaolin,

standard and high-purity grade halloysite and a specialty sand product.

A reasonable design has been proposed for the processing plant administration facilities,

dry stack tailings system, and all required infrastructure including power, gas, and water

supplies.

The process design comprises five main areas: run-of-mine (ROM) stockpiling and

crushing, clay / sand separation through the use of hydrocyclone classifiers; kaolin and

halloysite clay separation by centrifuge; kaolin calcination and milling to produce

metakaolin; upgrading; and product preparation. The various tailings streams will be

collected and sent to a thickener, and then a pressure filter, to produce a low-moisture

tailings cake suitable for disposal in the (dry-stack tailings) DST facility.

MINERAL RESERVES

• An ‘optimized pit shell’ approach was followed in order to develop a pit shell development strategy that optimizes cash flow, and accounts for the various

economic sensitivities of the project.

• Reasonable mining costs and plant recoveries were used as early-stage inputs to the optimization model. The economic pit shell slopes were found to be generally

insensitive to constraint by geotechnical parameters. Optimized pit shells were

designed accounting for bench design, ramps, dilution, etc.

• The mineral Proven and Probable reserves are comprised of 3,178 kt of ore, producing 264 kt of halloysite and 563 kt of kaolinite.

Mineral resources that are not mineral reserves do not have demonstrated economic

viability.

RECOMMENDATIONS

In Millcreek’s opinion, the pre-feasibility work summarized in this Technical Report

demonstrates the economic viability of the project.



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It is recommended that the next study phase be performed at a ‘feasibility study’ level, or

higher, in order to demonstrate the economic feasibility of the project and develop a more

detailed estimate of the project value to support major investment decisions.

ECONOMIC SUMMARY

CAPITAL AND OPERATING COSTS

Initial capital costs, including a 15% contingency, are summarized in the table below:

Table 1.3 Initial CapEx Summary

Item CapEx ($ 000)

Contractor

Mobilization $133

Site Preparation $254

Pre-Production Opex $936

Sub-Total $1,323

Owner's Operations

Eng. & Office Equip. $60

GPS / Survey Equip. $80

Light Vehicles $111

Buildings $100

Pre-Production Opex $2,592

Sub-Total $2,943

Owner's Plant

Eng. and mgmt., misc. $5,171

Mechanical, equip./ install. $13,982

Structural, equip./ install. $10,249

Electrical, equip./ install. $5,698

Civil, equip./ install. $2,673

Sub-Total $37,772

Capital Contingency (15%) $6,306

TOTAL $48,344



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Sustaining capital for the remainder of the LOM is estimated at $5.9M, or approximately

$205,000 per year. It was assumed that the initial working capital would be equal to

approximately 50% of the operating cost in Year 1 (results in working capital of $3.5M).

The following tables summarize the mining costs including both contractor and owner

mining costs. The total LOM costs were estimated to be $244M or $38.66 per ton

(including both waste and ore) mined. This amount excludes $3.5M of capitalized

contractor and owner pre-production costs.

Table 1.4 Contractor OpEx Summary

* Total tons are combined tons waste stripped, and mined ore

Table 1.5 Owner’s OpEx Summary

Task OpEx ($ 000) OpEx ($/total ton*)

Labor (Owner's ops) $7,350 $1.16

M&S (operations) $746 $0.12

Labor (plant) $85,754 $13.56

M&S (plant) $71,113 $11.24

Reclamation & Closure

$7,219 $1.14

G&A $36,234 $5.73

TOTAL $208,416 $32.95

* Total tons are combined tons waste stripped, and mined ore

TECHNICAL SUMMARY

PROPERTY DESCRIPTION

The Bovill Project is located near the town of Bovill in Latah County in northern Idaho

(Figure 4.1). The project is located approximately 30 miles east-northeast of Moscow,

Idaho and approximately 72 miles southeast of Spokane, Washington, the closest major

city to the project. The nearest, large communities are Moscow, Idaho (population 25,000),

Task OpEx ($ 000)

Ore Mining $11,879

Waste Stripping $8,951

Stockpiling $14,914

Road Maintenance $381

TOTAL $ $36,125

TOTAL ($/total ton)* $5.71



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located about 30 miles west- southwest of the Bovill Project, and Lewiston, Idaho

(population 32,000), located about 42 miles southwest of the Bovill Project.

Several miles of power lines will need to be constructed, connecting the nearest substation

to the plant site. Natural gas is available from a pipeline that extends from Moscow to

Bovill (approximately 2 miles of additional pipeline will need to be constructed). Water

required for processing will primarily come from a small reservoir north of the Bovill Project

site, with potable water provided by on-site wells.

Mineral tenure is held through 11 mineral leases, all of which are on State of Idaho

endowment lands.

Since 1910 the area has been identified an exploited for its clay deposits by operators

including Anaconda and J.R. Simplot. I-Minerals acquired rights to mineral leases to the

project area in 1999 and has undertaken various exploration programs and mining studies.

GEOLOGY AND MINERALIZATION

The region surrounding the Bovill Project is dominated by late Precambrian

(Mesoproterozoic) sedimentary rocks of the Belt Supergroup (Belt). The Belt covers large

portions of western Montana, northern Idaho and parts of Washington and Wyoming.

Saprolitization of exposed intrusive rocks resulted from intense weathering in a humid,

warm to hot climate during the Miocene epoch. During the same general timeframe, the

Columbia River basalts were erupted, and the Latah Formation (lacustrine) sediments

were deposited (Hosterman, et al., 1960). In response to the strong weathering, much of

the plagioclase feldspar and at least some of the mica in the near-surface portions of the

Thatuna intrusives were altered to one or more varieties of clay minerals. The depth limit

of weathering may initially have been fairly uniform; however, subsequent erosion has left

a variable weathering profile with thickness roughly dependent on topography. At present,

the depth of weathering may exceed 100 ft along ridges and be less than 3 ft in some

valleys.

The residual deposits consist primarily of kaolinite and halloysite clay intermixed with

grains of K-feldspar and quartz. Kaolinite and halloysite clay comprise the mineral deposit.

Minerals of economic interest include:

• Halloysite, an aluminosilicate clay mineral with hollow tubular morphology

• Kaolinite, a hydrated aluminum silicate clay mineral, used in ceramics, rubber, plastics, etc. and when calcined becomes a metakaolin clay, or dehydroxylated



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kaolin clay, which is reactive (Pozzolan) and enhances the strength, density and

durability of concrete and ceramics.

EXPLORATION

Seven drilling campaigns have been completed on the Bovill Project since 2000.

Three types of samples have been collected from the Bovill Project to characterize the

clay deposits: 1.) Drill core samples to support resource estimation; 2.) Channel samples

for metallurgical characterization; and 3.) Bulk samples for metallurgical test work.

Subsequent test work on whole rock geochemistry and material characterization was

undertaken, and I-Minerals has completed a program of QA/QC.

A site visit was completed to the Bovill Project by Mr. Steven Kerr, Principal Geologist for

Millcreek, on September 19, 2019. Mr. Kerr is a QP for this pre-feasibility study (PFS).

Millcreek completed a series or routine verifications to ensure reliability of the compiled

databases provided by I-Minerals. This work including checking the compiled databases

with lithologic contacts and noted alteration with the field logs. Likewise, the analytical

results for drill holes were checked against a database, and with the input files used to

setup a geologic model. Millcreek found no significant errors in our audit.

Millcreek is of the opinion that good professional judgment, and appropriate exploration

and scientific methods were utilized in the collection and interpretation of the data used in

this report. The sampling data is sufficient and spaced appropriately to support the

resource estimation. However, users of this report are cautioned that the evaluation

methods employed herein are subject to inherent uncertainties.

MINING METHOD

The deposit at the Bovill Project has been found to be amenable to economic extraction

using surface mining methods, with a standard ‘truck-shovel’ approach, and with little or

no need for drilling and blasting. It is proposed that a contractor be used for mining

operations. The mine plan has been developed to produce approximately 10 ktpa of

halloysite products and 20 ktpa of metakaolin, from an average of 233 kt of total ore and

waste are mined each year.

Waste dumps include both external dumps, which are located outside of designed pits,

and backfill dumps, which are designed over some of the pit designs.

Proven and Probable Reserves were used to schedule mining and plant production, and

Inferred Resources inside of the pit were considered waste. The final production schedule

uses trucks and excavators as required to produce the ore to be fed into the process plant



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and maintain stripping requirements. All ore material is hauled to a centralized stockpile

before being processed. A small loader and up to five small 10-yd3 haul trucks will be

used to move the ore from this stockpile to the plant stockpile. A mining contractor will

operate the mine 8 months of the year, to minimize the impacts of inclement weather,

while the stockpile will provide feed to the plant throughout the year.

I-Minerals proposes a production ramp-up schedule in order to allow time for key markets

to further develop. The ramp-up in production is based on percentages of the maximum

throughput which starts at 27.5% in year 1, then 55% in year 2 followed by 81.5% in year

3 and full production in year 4 and beyond. Total ore throughput at the plant was designed

to be at 130,000 tons per year. Halloysite grades average 8.3% and kaolinite grades

average 17.7% through the life of mine.

INFRASTRUCTURE

The Process Plant and associated infrastructure follow an existing ridgeline, which

topography lends itself to an effective facility layout with the majority of the plant equipment

to be located on stable, cut ground.

The mine will be accessed and supplied using existing forest roads with some

modifications for safety and effectiveness. Electrical power and natural gas will tie-into

existing nearby networks. Process water will generally be available from run-off from the

tailing area, or provided by water wells, while potable water will be provided by potable

water wells. Tailings disposal will consist of a dry stack storage facility located near the

process plant.

Local communities will supply the labor for the project with no on-site housing to be built.

MINING PROCESSING

The Bovill Project has been the subject of a number of comprehensive testwork programs

extending back nearly a decade. Previous testwork was for the production of both sands

and clays. Currently, the focus is the production of clays which include Bovill Kaolin,

HalloPure halloysite and ULTRA HalloPure. Previous test work, including additional test

work completed by GMT in 2019, successfully processed material from the resource using

production scaled systems to generate these commercial products.

The main products that I-Minerals intends to produce through this facility are:

• Metakaolin

• Standard grade HalloPure halloysite

• High-purity ULTRA HalloPure halloysite



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• Specialty sand (excluded from the mineral resource and reserves estimates).

Ore will be feed to the plant with a front-end loader which feeds a single stage crusher.

Crushed ore will feed a sand/clay separation using cyclones to separate the products.

Sand will be sent to dry stack tailing with the exception of a screening operation to produce

specialty sand.

Clays will be split to produce a minus 20 micron cut, with the oversize fraction sent to

waste. The halloysite and kaolin cyclone underflow will be transferred to a fractionation

centrifuge to separate halloysite from the kaolin clays.

The kaolin will be conditioned filtered, dried and calcined to form metakaolin. The calcined

metakaolin is then milled to produce the final product.

Both the standard and high purity halloysite products will be produced in the same

equipment train, which will be operated as needed. The clays are both dried and milled

prior to shipment.

ENVIRONMENTAL, PERMITTING AND SOCIAL CONSIDERATIONS

To support the Bovill Project’s mine and environmental permitting requirements, the

following baseline environmental studies and surveys have been conducted:

• Wetlands and Vegetative Survey

• Water Resource Assessment (Surface and Groundwater)

• Threatened and Endangered Species and Wildlife Assessment

• Air Quality Assessment

• Cultural Resources Assessment

Several plans and permits are required for the Bovill Project, including:

• An Idaho Mine Operation and Reclamation Plan, administered through IDL.

• An Air Quality Permit, administered by Idaho Department of Environmental Quality (IDEQ)

• A Clean Water Act Section 402 National Pollutant Discharge Elimination System General Permit for Discharges from Construction Activities, and Multi-Sector



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General Permit for Stormwater Discharges Associated with Industrial Activity,

administered by the U.S. Environmental Protection Agency (USEPA).

• A Section 404 Nationwide Permit 14 (linear transportation projects) from the U.S. Army Corps of Engineers (USACE)

• A Subsurface Sewage Disposal Permit for the site’s septic system and a Public Non-Community Water Supply System Permit for the site’s potable water system,

both of which are administered by IDEQ

• Proof of application of water to beneficial use for water permit rights received or the Section 16 reservoir and groundwater, administered by the Idaho Department

of Water Resources (IDWR)

No listed threatened or endangered species or critical habitat as identified under the

Endangered Species Act, have been identified. A “no effects” for cultural resource impacts

under the National Historic Preservation Act is anticipated. Overburden, waste rock, ore,

and tailings characterization have been completed and the materials are not acid

producers.

The amended Idaho Mine Operation and Reclamation Plan and permit application should

be finalized and filed with Idaho Department of Lands (IDL) shortly after issuance of this

Technical Report.



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INTRODUCTION

GENERAL

Millcreek Mining Group (Millcreek), in conjunction with Mine Development Associates

(MDA, a division of RESPEC) has prepared this Technical Report on the Bovill kaolin and

halloysite clays project (the Bovill Project) on behalf of the project owner and issuer, I-

Minerals Inc. (I-Minerals).

I-Minerals have acquired the relevant leases for the area currently considered for the Bovill

Project and have conducted various drilling exploration studies, as well as pre-feasibility,

and feasibility level studies. I-Minerals have offices in Idaho and Vancouver, Canada, and

are listed on both US and Canadian exchanges.

Millcreek Engineering was formed in 1997 and is an integrated company that has been

providing expertise and experience in bulk materials handling, mechanical, civil, structural,

electrical, and process engineering to mining and power utility companies for over 20

years. The Millcreek Mining Group was formed in 2014 as a division of Millcreek

Engineering. Our professionals all have extensive experience (approximately 20 - 30

years +) in both consulting and industry, with a focus on coal, oil shale, base and precious

metals, agri-minerals and industrial minerals. Millcreek’s personnel have prepared

numerous feasibility-level studies, reserve certifications, and have authored independent

technical reports for public reporting purposes (JORC, NI 43-101, and SEC) over a wide

range of commodities.

Unless otherwise noted, or to be consistent with previous reporting, this document uses

common imperial units, and all economic reporting is in constant (2019) US dollars.

PROJECT BACKGROUND

Latah county, in north-central Idaho, is host to an area referred to as the ‘Idaho Clay

District’ which lies between the towns of Moscow, and Bovill, and encompasses several

deposits bearing refractories clays and other industrial minerals. Mining in the district

began as early as 1910, and continues to this day, with operators or interested parties

including the US Bureau of Mines (USBM), and United States Geological Survey (USGS),

Anaconda, J.R. Simplot, and various smaller mining companies.

Since acquisition of mineral leases in 1999, I-Minerals has performed extensive core

drilling and geologic assessment of the deposit, as well as various estimates of geologic

resources and economic reserves, including an updated NI 43-101 Prefeasibility Technical

Report in 2014 (by SRK Consulting), a NI 43-101 Feasibility Technical Report in 2016 (by



2-2

GBM Engineers), and a current NI 43-101 Resource Technical Report in 2019 (SRK

Consulting and HDR).

Following recent feasibility level work, it was proposed that the project value could be

enhanced by eliminating the production of sands and focusing on three products:

metakaolin, standard, and premium grade of Halloysite. This document summarizes the

efforts of Millcreek and MDA to prepare a pre-feasibility level of study on the economic

viability of the project.

SCOPE OF WORK

The scope items to cover certification of the resource and reserve estimates for the project

include:

• Preliminary data collection and review

• Site visit and data gathering

• Geologic information review and validation

• Mineral ownership / control validation

• Resource estimate / validation

• Metallurgical testing

• Mineral processing

• Project Infrastructure

• Environmental review

• Mine plan review and validation

• Marketing review

• Capital and operating cost estimate for the plant

• Capital and operating cost review for the mine and operations

• Project economics

• NI43-101 reserve certification and reporting

It was assumed that the previous work of other consultants would be used, as applicable.

• HDR provided guidance on previous work on environmental aspects of the property, including hydrogeology, permitting and closure



2-3

• MDA updated the pit optimization analyses, pit plans, dump designs and production schedules, as well as mining capex and opex schedules

• Input on the marketing and pricing of halloysite products was provided by DURTEC GmBH, of Germany

• Input on the marketing and pricing of metakaolin was provided by KMR, of Reno, NV

• SRK provided the geologic assessment, resources estimation and geologic model

• Tetra Tech previously proposed a design for tailings facilities and associated infrastructure, which has been used in this PFS for the purposes of assumed

design and updated cost estimation.

QUALIFIED PERSONS

The various responsible qualified persons (QPs) for the pre-feasibility study described in

this report are summarized in Table 2.1, and include:

Table 2.1 Responsible Qualified Persons

QP Name Sections of Responsibility

MDA (Tom Dyer) Items 15 - 16

Millcreek (Steven Kerr) Items 4 - 12, 14; contribute to Items 1, 3, 23, 25, 26, 27

Millcreek (Rainer Stephenson) Items 13, 17, 18; contribute to Items 1, 3, 25, 26, 27

Millcreek (Alister Horn) Items 2, 21 - 22; contribute to Items 1, 3, 23, 25, 26, 27

SITE INSPECTIONS

Of the responsible QPs for the project, Mr. Tom Dyer and Mr. Steve Kerr have made

personal site inspections that are considered to be current.

• Mr. Tom Dyer inspected the project site on January 7th, 2015. Mr. Dyer is a Principal Engineer with MDA.

• Mr. Steven Kerr inspected the project site on September 19, 2019. Mr. Kerr is a Principal (Geology) with Millcreek.



3-1

RELIANCE ON OTHER EXPERTS

This technical report has been prepared by QPs who relied on a variety of sources for

their data and information.

Mineral tenure and ownership information was provided by I-Minerals, and Millcreek is not

aware of, and has not relied on, any independent legal opinion as to project tenure and

ownership, royalties and other encumbrances. Such information is relevant to Items 2 and

22.

Millcreek has relied on both previous and currently updated work by HDR concerning the

current status of environmental studies and permitting, as covered in Item 20. This work

is primarily covered in extracts from HDR’s document ‘0530-RPT-019’, updated in March,

2020.

Millcreek was guided by I-Minerals in our assumptions on how taxes might be applied, as

well as on corporate overhead costs. These were review by Millcreek and confirmed to be

reasonable before inclusion in the economic model, as covered in Item 22.

Information on kaolin products and metakaolin pricing is based on work by Mr. Thomas

Adams, P.E. President of KMR Collaborative (KMR), and from phone interviews and email

and written correspondence shared between December, 2019 and February, 2020. KMR

are a materials, engineering and marketing firm with a focus on the cement industry and

a leading expert in the cement industry, particularly in the field of supplemental

cementitious materials (SCMs) and the use of pozzolans.

Information on halloysite products and markets is based on work by Dr. J. Schomburg of

DURTEC GmbH (DURTEC) and from phone interviews, email correspondence and a

presentation shared between September, 2019 and February, 2020. DURTEC are a

leader in mineral-based applications for nanotechnology and clean technology, with

specific expertise in halloysite. DURTEC are particularly familiar with the proposed

products to be produced at Bovill.

Information from both KMR and DURTEC was used in Items 19 and 22, and both groups

are considered to be independent of I-Minerals.



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PROPERTY DESCRIPTION AND LOCATION

PROPERTY LOCATION

The Bovill Project is located near the town of Bovill in Latah County in northern Idaho

(Figure 4.1). The project is located approximately 30 miles east-northeast of Moscow,

Idaho and approximately 72 miles southeast of Spokane, Washington, the closest major

city to the project. Boise, the state capitol, is located approximately 227 miles south of

Bovill. The Bovill Project is situated at latitude 46° 52' 43.5" N, longitude 116° 25' 47.2" W.

alisterhText BoxBOVILL PROJECT GENERAL LOCATION MAP



4-3

MINERAL TENURE

Mineral tenure is held through 11 mineral leases with a combined area of 5,140.64 acres,

administered by the Idaho Department of Lands (IDL). Lands administered by IDL carry a

mandate to generate revenue for the state’s public-school system and other state

institutions through leasing and sales of timber, grazing and extraction of petroleum and

mineable materials. IDL lands are categorized as Fee Simple (FS) or Minerals Only (MO)

lands. The State owns both surface and mineral rights on its endowment lands, whereas

on MO lands, the State owns mineral rights only and surface rights are owned by another

entity. The majority of I-Minerals leases are located on State of Idaho land. Mineral tenure

for kaolin and clay products do not extend onto MO lands.

Table 4.1 provides a summary of the 11 mineral leases held by I-Minerals, and Figure 4.2

shows the locations of the mineral leases. Millcreek requested and reviewed current lease

documents from IDL and found all leases to be active and in good standing. In 2018 all 11

mineral leases were amended, providing clarifications to the term and expiration of the

leases. The mineral leases carry a lease term of 10 years, effective March 1, 2013, and

so long thereafter as kaolin, clay, quartz, mica, feldspar, feldspathic by-products, clay by-

products, metalliferous minerals, or any of them, are produced in paying quantities, or as

much longer thereafter as the Lessee in good faith shall conduct mining operations

thereon.



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Table 4.1 Mineral Leases

Lease Number Township Range Acres

E410005 41 North 1 West 172.00

E410006 41 North 1 East 377.75

E410007 41 North 1 East 400.00

E410008 40 North 1 West 583.97

E410009 40 North 1 West 629.50

E410010 41 North 1 West 604.96

E410011 41 North 1 West 555.92

E410012 41 North 1 West 121.41

E410013 41 North 1 West 640.00

E410014 41 North 1 West 575.13

E410015 41 North 1 West 480.00

Total 5140.64

The State of Idaho retains a 5% gross sales royalty due upon commencement of any

mineral production.



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ENVIRONMENTAL LIABILITIES AND PERMITTING

ENVIRONMENTAL LIABILITIES

The Leases held by I-Minerals cover areas of historic open pit mining. These areas include

open pit mines, waste dumps and tailings areas. At this time, there are no known

environmental liabilities associated with the exploration work conducted by I-Minerals, and

all activities to date are covered under general State and Federal authorizations for

exploratory work. I-Minerals submitted an original bond of $750 to the IDL to cover

environmental liabilities associated with its exploration work. This bond remained in place

throughout the work, but it was refunded in December 2012. On November 1, 2010, the

State of Idaho revised its bonding program requiring I-Minerals to pay a reclamation bond

of $100 per lease per year until 2019. In addition, in June 2014, I-Minerals posted an

additional bond in the amount of approximately $6,200 for additional exploration on

currently held leases. This bond was refunded upon I-Minerals submitting a $20,000 bond

for work under an Instrument Amendment to the Operating and Reclamation Plan (ORP)

approved April 26, 2017. All reclamation bonding is current through October 19, 2017, and

the IDL has approved all reclamation conducted to date.

The QPs are not aware of any significant environmental liabilities at present which would

of the estimate of mineral resources or reserves on the project at this time.

REQUIRED PERMITS AND STATUS

I-Minerals is currently permitted for the following activities at the Bovill Project site (IDL

mineral leased lands):

EXPLORATION ACTIVITIES

I-Minerals conducted exploration activities in accordance with Idaho Administrative

Procedure Act (IDAPA) 20.03.02.060 - Exploration Operations and Required Reclamation.

I-Minerals filed an original Notification of Exploration (NOE) to the IDL in 2000, which was

subsequently amended for surface exploration and drilling programs. Exploration

disturbances have been reclaimed and approved by the IDL.

MINING ACTIVITIES

I-Minerals is permitted through an approved Mine Plan of Operations and Reclamation

Plan from IDL for the mining of approximately 10 acres of feldspathic sands from June

through October for up to 10 years (2012 through 2022). The feldspathic sands were

deposited as tailings from clay mining operations that occurred on or near the I-Minerals

mineral leases between 1956 and 1974. These activities are conducted under a National

Pollutant Discharge Elimination System's (NPDES) Multi-Sector General Permit (MSGP)



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for stormwater Discharges Associated with Industrial Activities (Permit Number

IDR053100). The stormwater permit became effective on November 8, 2012 and has been

extended until June 4, 2020.

A review of project plans identified a range of environmental permits, review processes,

and authorizations required for construction, operation, and closure. Development of the

Bovill Project will require approval of a Plan of Operations and Reclamation Plan by IDL

(IDAPA 20.03.02), and an updated notice-of-intent (NOI) for coverage under the NPDES

MSGP for industrial activities (Sector J3: Mineral Mining and Dressing/Clay, Ceramic, and

Refractory Materials). I-Minerals submitted to IDL an Operating and Reclamation Plan on

April 4, 2017, which was approved on October 26, 2017. Mining cannot start until the

reclamation bond is paid, which has been delayed until an amendment to the ORP is made

to the current operation plan contained in this document and a new bond is calculated. In

addition, a State air quality permit will be required for emission sources, including dryer

stacks and fugitive dust. Closure of the mine requires IDL approval of a Mine Site

Reclamation and Tailings Closure Plan as discussed above. Also, monitoring of certain

resources will likely be mandated through the State mine permitting process as well as

through the Federal NPDES stormwater general permit. I-Minerals applied for water rights

in the name of the State to withdraw water from the Section 16 Reservoir and from

groundwater wells to help support mine activities and received them February 8, 2017.

A goal of the Bovill Project design is to avoid disturbances in jurisdictional wetlands or

other waters, so that a Clean Water Act Section 404 permit will not be required, or at

Technical Report Bovill Project: Pre-Feasibility Study · 2020. 2. 18. · Technical Report Bovill...

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