Terrane Metals Corp. - QwikReport

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Berg Project

Terrane Metals' second significant asset is the Berg Project located in west-central British Columbia, Canada, some 84 km southwest of Houston, BC and 22 km northwest of the currently operating Huckleberry Mine. From 1965 to 1980, Kennecott Exploration Ltd and Placer Dome Inc completed 119 diamond drill holes totaling 20,128 metres on the property and developed a significant copper-molybdenum resource. The Joint Venture partners also completed numerous metallurgical tests, environmental studies, and financial analysis on the Berg Project. Development plans envisaged an open pit mining operation. The Project was shelved in the early 1990's due to declining metal prices and the two Joint Venture partners shifting their attention to other parts of the world.

In 2006, Terrane Metals obtained 100% ownership of the Berg Project and reactivated the property to evaluate the potential of bringing the Project to commercial production. Terrane has completed over 22,500 metres of diamond drilling in 60 holes, testing the depth potential of the deposit and investigating the molybdenum-rich core zone near the contact of the Berg Stock. In May 2009 Terrane announced a revised NI 43-101 compliant Mineral Resource Estimate for the Berg Project, a 36% expansion over the previous resource estimate (see table below).

BERG MINERAL RESOURCE ESTIMATE⁽¹⁾
At 0.30% Copper Equivalent Cutoff Grade

Category	Tonnes (millions)	Cu (%)	Mo (%)	Ag (g/t)	Cu lbs (millions)	Mo lbs (millions)	Ag ozs (millions)
Measured	53.3	0.48	0.030	4.5	559	36	7.7
Indicated	452.7	0.28	0.038	3.7	2,783	376	53.7
Measured & Indicated	506.0	0.30	0.037	3.8	3,342	412	61.4
Inferred	144.6	0.23	0.033	2.5	739	107	11.7

Note:

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
Copper equivalent grades are calculated using metal prices of US$1.60/lb Cu, US$10/lb Mo, US$10/oz Ag and take into account forecast metallurgical recoveries into separate copper and molybdenum concentrates.

Key Highlights:

July-September 2006 -- Terrane acquires Placer Dome's and Kennecott's share of JV to become 100% owner of the Berg Project
May 2007 -- Initiated Environmental Baseline Study as well as Public and First Nations consultation programs
May-October 2007 -- Completed 11,289 metres of diamond drilling in 29 core holes. Verified and expanded the historic resource.
December 2007 -- Created new 3-D geological model; Completed preliminary metallurgical test-work
April 2008 -- Announced first NI 43-101 compliant Resource Estimate with contained metals of 2.5 Billion lbs Copper, 299 Million lbs Molybdenum, 25 Million ozs Silver
May-October 2008 -- Completed Phase II diamond drilling program of 11,661 metres in 31 core holes designed to expand the existing resource and investigate higher-grade molybdenum and silver mineralization discovered during the 2007 work program
May 2009 -- Announced a 36% expansion of Measured and Indicated Resources to 506 million tonnes containing 3.3 billion lbs copper, 412 million lbs molybdenum and 61.4 million ozs silver. Inferred Resources contain an additional 0.7 billion lbs copper, 107 million lbs molybdenum and 11.7 million ozs silver.

Ongoing Exploration and Development

The Berg Deposit is a classic calc-alkaline porphyry deposit. Copper-molybdenum-silver mineralization is hosted in andesite and quartz diorite, forming a contiguous ring-shaped deposit with a strike length of 2.2 km and horizontal width of 300 metres around a circular monzonite stock. Within this widespread porphyry-style mineralization a 2,000 metre long, 50 to 140 metre wide molybdenum-rich stockwork zone exists associated with the monzonite-andesite contact. Mineralization has been drill tested to a vertical depth of 850 metres and is open to expansion.

The 2007 work program included a 29 hole -- 11,289 metre core drilling program designed to test for continuation of the historic resource laterally and at depth and to provide modern data for the NI 43-101 compliant resource estimate. The average hole depth for the 2007 drilling was 390 metres; approximately 220 metres deeper than the historic drill holes. All of the drill holes intersected long widths of copper and molybdenum porphyry-style mineralization.

The 2007 drilling program at Berg for the first time outlined thick panels of molybdenum-rich stockwork mineralization within the much broader porphyry-style zones. In the South Zone all five widely-spaced drill holes intersected the molybdenum-rich stockwork, defining a 50 to 120 horizontal metres wide zone localized at the monzonite-andesite contact over a vertical distance of 500 metres. In the Northeast Zone molybdenum-rich mineralization was again intersected in all 10 holes drilled in the vicinity of the monzonite-andesite contact. Here the molybdenum-rich zone was found to have a horizontal width ranging from 100 metres to 140 metres and was intersected over a vertical distance of 420 metres. The 2007 drill program was also successful in discovering the potential of the poorly tested West Zone with Hole 162 intersecting 356.6 metres of 0.29% Cu, 0.057% Mo and 24.5 g/t Ag (0.98% copper equivalent) across the monzonite-andesite contact.

The 2008 work program included a 31 hole -- 11,266 metre core drilling program designed to expand the April 2008 Mineral Resource and to investigate zones of higher-grade molybdenum and silver mineralization defined in 2007. The program successfully connected the West, South and Northeast Zones into a contiguous ring-shaped deposit with a strike length of 2.2 km and horizontal width of +300 metres. In addition, significant intervals of higher grade molybdenum and silver mineralization with associated copper were again intersected with Hole 178 returning 147.4 metres of 0.097% Mo and Hole 169 returning 386.6 metres of 7.4 g/t Ag, respectively.

The 2008 drilling program successfully expanded the molybdenum-rich core zone, defining a steeply-inclined 2 km long panel adjacent to the Berg Stock with an estimated true width ranging from 50 to 140 metres. Molybdenum-rich mineralization has been drill tested to a vertical depth of 850 metres and is open to depth. Notable drill holes that intersected molybdenum-rich mineralization included: Hole 167 with 65.7 metres grading 0.125% Mo, Hole 176 with 75.0 metres grading 0.100% Mo, and Hole 197 with 57.7 metres grading 0.109% Mo. Drill Hole 194 is also notable in that it is the deepest hole completed to date at Berg and returned 844.5 metres grading 0.048% Mo. The hole bottomed in similar mineralization 850 vertical metres below surface.

Geometry of the molybdenum-rich core zones and grade distribution within them offers a number of higher grade-lower tonnage development scenarios. The table below summarizes the Berg Mineral Resource estimate at a 0.030% molybdenum cut off, representative of the molybdenum-rich core zone within 450 metres of surface.

BERG MINERAL RESOURCE ESTIMATE -- MOLYBDENUM RICH CORE ZONE⁽¹⁾
At 0.03% Molybdenum Cutoff Grade

Category	Tonnes (millions)	Cu (%)	Mo (%)	Ag (g/t)	Cu lbs (millions)	Mo lbs (millions)	Ag ozs (millions)
Measured	22.4	0.48	0.048	5.0	236	24	3.6
Indicated	285.3	0.26	0.050	3.7	1,613	313	33.9
Measured & Indicated	307.7	0.27	0.050	3.8	1,848	336	37.4
Inferred	96.3	0.17	0.046	2.4	369	97	7.6

Note:

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

The 2008 program better defined the near-surface, flat-lying supergene-enriched copper horizon. The supergene horizon is extensive across the Berg resource area with a vertical thickness ranging from 40 to 200 metres. Supergene mineralization is typically covered by less than 40 metres of leached cap and overburden, and underlain by +700 metres of hypogene mineralization. Preliminary metallurgy work indicates that copper, molybdenum and silver will report to separate copper and molybdenum concentrates. Average recoveries from the supergene-enriched horizon are estimated at 83% Cu, 61% Mo, and 67% Ag.

The geometry and near-surface nature of the supergene-enriched copper horizon offers the opportunity for a high-grade starter pit. The table below summarizes the Berg Mineral Resource for the supergene-enriched horizon at a 0.30% copper equivalent cut off.

BERG MINERAL RESOURCE -- SUPERGENE HORIZON⁽¹⁾
At 0.30% Copper Equivalent Cutoff Grade

Category	Tonnes (millions)	Cu (%)	Mo (%)	Ag (g/t)	Cu lbs (millions)	Mo lbs (millions)	Ag ozs (millions)
Measured	53.3	0.48	0.030	4.5	559	36	7.7
Indicated	82.6	0.37	0.026	3.4	679	47	9.0
Measured & Indicated	135.9	0.41	0.028	3.8	1,239	83	16.7
Inferred	17.7	0.33	0.021	1.8	128	8	1.0

Note:

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

Drill Hole 194 is notable from the 2008 program in that it is the deepest drill hole completed to date at Berg. It tested the vertical extent of the hypogene porphyry system below leached cap in the Northeast Zone. The hole returned 844.5 metres of 0.28% Cu, 0.048% Mo and 4.5 g/t Ag (0.76% copper equivalent) over the entire length of the hole. The hole bottomed in similar mineralization 850 vertical metres below surface.

In May 2009, Terrane announced an updated resource estimate incorporating the 2008 drilling program. Measured and Indicated Resources expanded by 36% over the previous reported resource to 506 million tonnes containing 3.3 billion lbs copper, 412 million lbs molybdenum and 61.4 million ozs silver. Inferred Resources contain 0.7 billion lbs copper, 107 million lbs molybdenum and 11.7 million ozs silver, demonstrating the potential to continue expanding the Berg resource.

The Berg Project is ideally situated near infrastructure associated with the Huckleberry Mine and has the potential to be a significant producer of copper and molybdenum. Terrane Metals will continue to advance the project by investigating mine development scenarios. Terrane is committed to the highest level of environment stewardship and community consultation.

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This page was created on Thu Sep 9, 2010 at 11:07:52 PM Pacific Time.