Overview

Select Resources currently possesses two types of properties, metal properties and industrial mineral properties. The metal properties, as currently understood, derive most of their value from their potential precious metal content. This is exclusively true for the Richardson property, and expected to be true for the Shorty Creek property. The Shorty Creek prospect also contains evidence of copper and molybdenum. Properties such as these are generally viewed and valued by their size and grade (coupled with other spatial considerations). Grade is usually expressed in the form of troy ounces (of gold) per short ton (of rock), or in the metric system, grams (of gold) per metric ton (of rock) for precious metals group (gold, silver, and platinum group) and by per cent of the elemental metal, for metals like molybdenum, and the suite of base metals including copper, lead, zinc and similar metals. Thus Richardson and Shorty Creek are likely to be graded by the concentration of the valuable metal per ton of rock. Profitability is usually expressed as a function of the cost to produce the relevant unit of metal. For example if it costs $400 to mine, refine, and sell one ounce of gold mined from the Richardson property and gold sells for $800 per ounce, the mine makes $400 per every ounce of gold it sold. The industrial minerals properties are quite different. The Calder property is a quarry, which sells most, if not all, the product it removes from the ground. Thus properties like these are simply valued on a per-ton basis. If it costs $10 per ton to quarry the stone, and $30 to crush, ship and sell it, any price over $40 per ton would yield profit. Thus the valuation of Calder will be based on the number of tons of raw material sold, whereas the valuation of the Richardson and Shorty Creek properties will be based on the amount and cost of metal extracted and sold and will be described on an ounce or pound of metal basis.