January 26, 2017

Happy Creek’s Fox tungsten project updated to 486,000 tonnes of 0.817% WO3 (Indicated) and 361,000 tonnes of 1.568% WO3 (Inferred)

January 26th, 2017 – Vancouver, British Columbia. Happy Creek Minerals Ltd. (TSXV: HPY) (the “Company”), is pleased to announce an update to its mineral resource estimate completed in accordance to NI 43-101 for the Ridley Creek zone and a first-time resource for the BN zone on its 100% owned Fox tungsten property. The Fox property is located 75 km northeast of 100 Mile House in the south-central Cariboo, British Columbia, Canada.

The Fox property consists of a recently discovered, large scale, 10 km by 3 km tungsten skarn mineral system containing seven mineralized zones at surface. All zones are open in extent. The current resource is for the Ridley Creek and BN zones. The price used for the current estimate is US$166.5/ MTU, or US$16.65/Kg WO3 in concentrate.

The total Indicated Resources for the Ridley Creek zone amount to 486,000 tonnes grading 0.817% WO3. The total Inferred Resource is now 361,000 tonnes grading 1.568% WO3 for the Ridley Creek and BN zones combined. These grades are thought to be comparable to the Cantung property in the Northwest Territories, regarded as among the highest grade mines in the western world. The selected cut-off for the material amenable to open pit extraction is 0.2% WO3. For material amenable to underground extraction, a cut-off of 0.55% WO3 was applied.

Table 1: Resource Estimate at 0.2% and 0.55% WO3 Cut-off

ZONE

CLASSIFICATION

Cut-off WO3
(%)

Tonnes

(t)

WO3 (%)

WO3 MTU

WO3 (kg) Contained

Ridley Creek

Indicated in-pit

>0.2

329,000

0.729

250,000

2,500,000

Ridley Creek

Indicated - underground

>0.55

157,000

0.940

147,000

1,470,000

Ridley Creek zone

Indicated total

486,000

0.817

397,000

3,970,000

Ridley Creek

Inferred in-pit

>0.2

14,000

0.630

9,000

90,000

Ridley Creek

Inferred - underground

>0.55

93,000

0.825

77,000

770,000

BN

Inferred - underground

>0.55

254,000

1.892

480,000

4,800,000

Ridley Creek and BN zone

Inferred total

361,000

1.568

566,000

5,660,000

Note: Cut-off determined by using a WO3 price of US$166.5/MTU WO3 in concentrate.

David Blann, P.Eng., President and CEO, comments: “One of our stated goals for 2016 was to expand the resource base for the project and we have increased the total contained kg of WO3 by two and a half times while significantly increasing the overall resource grade. The additional drill holes in Ridley Creek provided better geological control. A tighter envelope on the high-grade mineralization with a re-configured resource pit shell have captured the higher grade with a low strip ratio of 3.3:1. Mineralization below the pit shell contains grade that is thought to be readily accessible underground from the bottom of the pit. We also drilled seven more successful holes at the BN zone that together with drill holes from 2012, has returned an inferred resource grade of 1.892% WO3. The Ridley Creek and BN zones remain open to further expansion along with several others that have only received limited exploration work to date. As a new discovery in the western world, we are pleased with the results of the 2016 program and we plan to continue advancing the 100% owned Fox as a leading new tungsten project.”

A summary and geological interpretation of exploration work completed in 2016 along with plans for 2017 are pending.

Table 2a, b and c shows the sensitivity of the model to changes in cut-off with the selected cut-off highlighted.

Table 2a: Sensitivity to cut-off grade for the Ridley Creek zone within the resource constraining pit shell

Zone

Classification

WO3 Cut-off

Tonnage

WO3

WO3

(%)

(T)

(%)

(MTU) contained

Ridley Creek within the resource constraining shell

Indicated

> 0.7

196,000

0.919

180,000

> 0.55

262,000

0.846

222,000

> 0.4

304,000

0.797

242,000

> 0.3

318,000

0.778

247,000

> 0.2

329,000

0.759

250,000

> 0.1

355,000

0.715

254,000

Inferred

> 0.7

7,000

0.764

5,000

>0.55

9,000

0.727

7,000

> 0.4

13,000

0.661

9,000

> 0.3

14,000

0.641

9,000

> 0.2

14,000

0.630

9,000

> 0.1

15,000

0.611

9,000


Table 2b: Sensitivity to cut-off grade for the Ridley Creek zone below the resource constraining shell (Underground amenable)

Zone

Classification

WO3 Cut-off

Tonnage

WO3

WO3

(%)

(T)

(%)

(MTU) contained

Ridley Creek below the resource constraining shell (Underground)

Indicated

> 1.0

60,000

1.273

76,000

> 0.8

92,000

1.139

105,000

> 0.7

111,000

1.073

120,000

> 0.6

137,000

0.994

136,000

> 0.55

157,000

0.940

147,000

> 0.4

208,000

0.827

172,000

> 0.3

231,000

0.780

180,000

Inferred

> 1.0

15,000

1.189

18,000

> 0.8

43,000

0.988

43,000

> 0.7

65,000

0.910

59,000

> 0.6

85,000

0.849

72,000

> 0.55

93,000

0.825

77,000

> 0.4

131,000

0.725

95,000

> 0.3

148,000

0.681

101,000

Table 2c: Sensitivity to cut-off grade for the BN Zone Inferred resource amenable to underground extraction.

Zone

Classification

WO3 Cut-off

Tonnage

WO3

WO3

(%)

(T)

(%)

(MTU)

BN Zone

Inferred

> 1.0

191,000

2.252

431,000

> 0.8

222,000

2.067

458,000

> 0.7

237,000

1.985

469,000

> 0.6

248,000

1.924

477,000

> 0.55

254,000

1.892

480,000

> 0.4

272,000

1.798

489,000

> 0.3

291,000

1.702

495,000

The quantity and grade of reported Inferred resources in this estimation are conceptual in nature, and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Resource. It is uncertain if further exploration will result in upgrading them to an Indicated or Measured Resource category.

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

Tungsten assays are reported in percent WO3 (tungsten trioxide), the compound for which tungsten market prices are published. Quantities of WO3 are traditionally reported in Metric Ton Units, which are equal to 10 kg of WO3. For example, a grade of 0.8% WO3 contains 8 kg of WO3/tonne.

A NI 43-101 technical report for the Fox Tungsten Project mineral resource estimate will be filed on SEDAR within 45 days.

NOTES ON THE MINERAL RESOURCE ESTIMATE PARAMETERS AND METHOD

  • Mineral resources are estimated in conformance with the CIM Mineral Resource definitions referred to in NI 43-101 Standards of Disclosure for Mineral Projects. This mineral resource estimate is an update of the March 15th, 2016 estimate conducted by Geoquest Consulting Ltd. and AGP Mining Consultants Inc. covering the Ridley Creek Zone (RC Zone). The estimate is also a first-time resource estimate for the BN zone.
  • The estimate was completed based on the concept of a small scale, open pit and underground room and pillar operation for the RC Zone and a small scale underground room and pillar mining operation for the BN Zone. No other zones on the Fox Tungsten Project were evaluated.
  • All samples prior to the 2016 drill campaign were sent to the Agat Laboratory facility in Vancouver, B.C., using a chain of custody, where they were prepared and analyzed first with an aqua regia digest and ICP-ICP/MS finish to provide a multi-element analyses. For samples within and adjacent to the tungsten-mineralized domain, a peroxide fusion digestion and ICP/OES finish was performed in triplicate and averaged, providing results in percent W (tungsten). A portion of these that returned greater than 0.6% tungsten, were again repeated using XRF analyses.
  • For the 2016 drill campaign, the samples were sent to SGS Laboratory facility located in Vancouver. Samples were crushed to 90% passing 2mm. A 250g split was pulverized to 85% passing 75 microns. The samples were first analysed with an aqua regia digest and ICP-ICP/MS finish to provide a multi-element analyses. For tungsten, all samples were analysed using a peroxide fusion digestion and ICP/AES finish. Over limits tungsten samples were re-analysed with pyrosulphate fusion XRF.
  • All assays received for tungsten (W) are converted to WO3 by multiplying W by 1.261.
  • The quality control and quality assurance program remain the same as previous years. For every 10 samples submitted, Happy Creek Mineral inserted either a blank, a certified reference standard, or a ¼ core duplicate sample in the sequence. In addition, Agat and SGS Laboratory conducts its own quality assurance/quality control (QA/QC) and reports these with every work order.
  • The RC Zone model was interpolated with 60 core holes and 10 trenches completed by Happy Creek from 2010 through to 2016, totalling 6,100 metres and containing 2,005 assays. The BN Zone model is supported by 14 drill holes completed by Happy Creek in 2012 and 2016 totalling 1,916 meters of drilling and containing 447 assays.
  • The 3D wireframes developed to control the grade interpolation of the resource model were based primarily on lithology, and included the construction of a mineralized wireframe within the calc-silicate/skarn lithology to control the extent of the mineralization to reasonable distance from the drill data. At the RC Zone the model was enhanced by the addition of the high grade probabilistic model in order to reduce the dilution of the higher-grade material with the adjoining lower-grade material. This methodology assumes a certain degree of selectivity which can be achieved via the selection of small equipment, mining on 2.5-meter flitches and the use of a UV lamp.
  • Happy Creek preferentially samples the drill core in either 1 m or 2 m intervals. The nominal composite length was 2.5 m. The composite intervals were created moving downward from the collar of the holes toward the hole bottoms. Composites lengths are automatically adjusted by the software to leave no remnants at the lithological boundaries.
  • For the treatment of outliers on the RC Zone, raw assays were capped at 7.0% and 0.45% WO3 in the CSSK (calc-silicate) and GRA (granite) domains respectively, in combination with a search restriction applied on composite values greater than 2.5% WO3. The procedure used allows the deposit to retain the high-grade assays while limiting their influence during the interpolation to a maximum of 40 m x 30 m x 10 m (length x width x height). At a 0.1% WO3 cutoff, the capping strategy removed 4.4% of the metal in the Indicated and Inferred categories. The BN Zone assays were capped at 6% WO3. A high-grade search restriction was not necessary since the coefficient of variation was less than 2.0 indicating the data does not show a high variability.
  • Densities were determined from 613 representative rock samples from the RC Zone using industry standard methods. For the material within the mineralized zone, a density of 2.855 g/cm3 was applied to the calc-silicate lithology, and 2.707 g/cm3 applied to the granite lithology. There was no density measurement for BN Zone samples. The material was assigned the RC-Zone calc-silicate lithology density.
  • A (3D) geological and block model was generated using Geovia Gems software. The block model matrix size of 5 m x 5 m x 2.5 m (width x length x height) was selected with consultation with the engineering team from AGP, and was based on the size deemed suitable for an open pit mining scenario drilling in 5-meter bench and mining in 2.5-meter flitches on the RC Zone. The model matrix is also suitable for a room and pillar operation at the RC and BN Zone.
  • A good variogram was obtained using the 3D data within the RC Zone mineralized envelope. The direction and plunge represented by the variogram coincide with the known interpreted plunge of the mineralization at the RC Zone. The nugget effect is moderate, at 55% of the sill value. At 96% of the sill, the maximum range is a little less than 100 m. The definition of the variogram near the origin was reasonable. The grade model was interpolated using ordinary kriging, and validated using inverse distance squared and nearest neighbour models. The BN zone had too few data points to generate a reliable variogram therefore the grade model was interpolated using an inverse distance squared and a nearest neighbour check models.
  • The interpolation was carried out in multiple passes with increasing search ellipsoid dimensions. For both zones, the classification was based primarily on the pass number, followed by an adjustment to the class model, based on diamond drilling density (core area), the distance to the closest sample. The krige efficiency was used as a modifier on the RC Zone.
  • No mining plans have yet been completed for the deposit; however, from the geometry of the deposit, it seems likely that open pit mining, followed by an underground operation, may be considered for future extraction of the RC Zone. The BN Zone will likely be mined via a room and pillar operation with ramp access.
  • Preliminary metallurgical test work to date is based on several surface bulk samples, and indicates the scheelite (tungsten mineral) can be recovered using primarily gravity methods and/or flotation to produce potentially acceptable commercial grades and containing no deleterious elements that would affect its ability to be sold. Potential by-products of zinc indium, bismuth, gold and silver have not been included in the resource estimate at this stage, but may be included in a future PEA, after more detailed metallurgy is performed.
  • Under CIM definitions, Mineral Resources should have a reasonable prospect of economic extraction. A tungsten price of US$166.52/MTU of WO3 in concentrate was used for the cut-off estimation. In order to assess the Mineral Resources an in situ resource cut-off grade of 0.20% WO3 has been applied for potential open pit resources and 0.55% WO3 for potential underground material
  • To further assess reasonable prospects of economic extraction, a Lerchs-Grossman (LG) optimized shell was generated to constrain the potential open pit material. Parameters used to generate this shell included:
  • -50° slopes for the pit shell
    -CDN$8/t mining, CDN$26/t milling, CDN$10/t G&A operating costs
    -75.8% WO3 recovery to a 68% WO3 concentrate
    -US$166.52/MTU WO3 in concentrate price, based on a recently negotiated long term price by an established tungsten producer. As a check, a calculation using the three year trailing average APT price arrived at a similar price.
    -0.80 US$/CDN$ forex rate
    -economics applied to Indicated and Inferred materials.
    The LG shell was constrained from extending up a steep bank to the west into a high strip area that would be more readily exploited by underground methods. A CDN$50/t underground mining cost was applied assuming room and pillar mining with good ground conditions and dilution control.

  • The quantity and grade of reported Inferred resources in this estimation are conceptual in nature, and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Resource. It is uncertain if further exploration will result in upgrading them to an Indicated or Measured Resource category.
  • Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  • Rounding of tonnes as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

Qualified Persons

David Blann, P.Eng., Director of the Company, is a Qualified Person as defined by National Instrument 43-101 and is responsible for the overall preparation and approval of the technical information disclosed in the news release.

Pierre Desautels, P.Geo. Principal Resource Geologist of AGP Mining Consultants Inc. Qualified Person under NI 43-101 who is independent of the Company, has prepared and authorized the release of the mineral resource estimates presented herein. Jay Melnyk, Eng., Principal Mining Engineer of AGP Mining Consultants Inc. and Qualified Person under NI 43-101 guidelines has reviewed the technical content of the News Release in relation to cut-off determination and the resource constraining shell.

On behalf of the Board of Directors,

“David E Blann”

___________________________

David E Blann, P.Eng.

President, CEO

FOR FURTHER INFORMATION, PLEASE CONTACT:
David Blann, President, CEO
Corporate Office:
Phone: 604.662.8310
Email: Info@happycreekminerals.com

Website: www.happycreekminerals.com

Corporate Communications:
Ron Birch: Phone: 250.545.0383
Toll Free: 1.800.910.7711

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

David Blann, P.Eng., Director, is a Qualified Person as defined by National Instrument 43-101 and is responsible for the preparation and approval of the technical information disclosed in the news release.

This press release contains “forward-looking information” within the meaning of applicable securities laws, including statements that address capital costs, recovery, grade, and timing of work or plans at the Company’s mineral projects. Forward-looking information may be, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “planned”, “continue”, “expect”, “thought to”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “opportunity”, “further” and others, or which describes a goal or action, event or result such as “may”, “should”, “could”, “would”, “might” or “will” be undertaken, occur or achieved. Statements also include those that address future mineral production, reserve potential, potential size or scale of a mineralized zone, potential expansion of mineralization, potential type(s) of mining, potential grades as well as to Happy creek’s ability to fund ongoing expenditure, or assumptions about future metal or mineral prices, currency exchange rates, metallurgical recoveries and grades, favourable operating conditions, access, political stability, obtaining or renewal of existing or required mineral titles, licenses and permits, labour stability, market conditions, availability of equipment, accuracy of any mineral resources, anticipated costs and expenditures. Assumptions may be based on factors and events that are not within the control of Happy creek and there is no assurance they will prove to be correct. Such forward-looking information involves known and unknown risks, which may cause the actual results to materially differ, and/or any future results expressed or implied by such forward-looking information. Additional information on risks and uncertainties can be found within Financial Statements, Prospectus and other materials found on the Company’s SEDAR profile at www.sedar.com. Although Happy creek has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Happy creek withholds any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by law.

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