Page 57 1 . 866. 822. 40 22 C A L L T O L L F R E E ! V I S I T U S A T : S A V E U P T O 4 0 % O N S E L E C T E D M O D E L S & S I Z E S W H I L E B U I L D I N G S U P P L I E S L A S T P ROJ E C T M A N A G E M E N T C U STO M D ESI G N ED A N D EN G I N EER ED TO Y O U R N EED S EX T 17 w w w . n o r s t e e l . c o m L I M IT E D T I M E O F F E R! Q U A LI TY | D U R A B I LI TY | SP EED O F D ELI V ER Y EV ER Y TH I N G Y O U R P R O JEC T D ESER V ES S U P P L Y IN G B U IL DIN GS A C ROS S C A N A D A A S S EEN O N TV C A LL N O W A N D R EC EI V E $1 , 000 I N O P TI O N S A B SO LU TEL Y F R E E ! W I TH Y O U R B U I LD I N G P U R C H A SE! P L US cal l now and we wi l l desi gn a cust om st eel bui l di ng f or you at no char ge. S om e condit ions apply . NS17 Ad_NS17 Ad 11-11-01 10:50 AM Page 1 Page 56 By Gregory Reynolds Based on a Preliminary Economic Assessment (PEA) Sage Gold Inc. is able to release details on its proposed Clavos Gold Mine now slated for the fourth quarter of this year . Sage is a mineral exploration and de - velopment company that has primary interests in near -term production and exploration properties in Ontario. Its main propertie s are the Clavos Gold deposit in the City of T immins and the L ynx deposit and other exploration properties in the Beardmore-Gerald - ton Gold Camp. Sage president and CEO Nigel Lees comments “thi s positive and very ro - bust PEA is a signifcant step towards bringing the Clavos deposit into pro - duction and advancing our strategy to develop positive cash fow over the near term. Despite the diffcult market environ - ment, we belie ve the projec t can be fnanced due to the near term proft potential, a low initial capita l cost of $14.1 million, rapid two year payback and an excellent return on investment. The company plans to minim ize eq - uity dilution on production fnancing through securing debt and/or gold backed fnancing.” The Clavos is a joint venture between Sage (now owns 60 per cent) and St Andrew Goldfelds Ltd (now owns 40 per cent). The Clavos was in production briefy between mid-2005 until August 2006 and again until May 2007. The Clavos mine is located in Ger - man, Stock and Cler gue T ownships and comprises 69 patented and leased claims and 14 unpatented clai ms. The patents leases and claims are wholly owned by SAS save three claims where SAS had a 40% interest in a joint venture arrangement with Gold - corp Inc. Sage says $46 million was invested by St. Andrew (trading as SAS) on the development of the Clavos de - posit. It is located in the prolifc T im - mins Mining Camp and very close geographically (20 km) to Goldcorp’ s high grade Hoyle Pond mine that has produced more than 2.4 millio n ounc - es since 1985 and is still in operation. Clavos is also located 10 km from the Brigus gold mill in Stock T ownship. A NI43-101 new resource estimate in October 2012 includes Indicated min - eral resources of 1,258,400 tonnes at 4.81 g/t Au totalling194,600 ounces of gold and Inferred mineral resourc - es of 796,000 tonnes at 4.7 g/t Au representing 120,000 ounces. These resources are reported at a base case cut-of f grade of 2.75 g/t Au and in - dividual assays have been capped at 60g/t. Existing infrastructure is in place in - cluding under ground ramp access to the 300 metre level, under ground lev- els developed every 25 metres, power to the site, surface ventilation system, and a water management system. The project is fully permitte d up to 2019. There are a number of millin g facili - ties within the general area which, subject to favourable commercial arrangements, are considered to be suitable for processing the Clavos JV mineralized material, Sage said. Highlights of the PEA study include: • Net present value of $23.2M (pre-tax)and $12.6M (after - tax) at a 8% discount • Internal rate of return of 71% (pre-tax) and 47% (after -tax) based on US$1500/oz gold price • Annual average production of approximately 20,000 oz. of gold per year • Initial CAPEX of $14.1 mil - lion • T wo year payback from start of production with seven year mine life • A verage head grade of gold ranging from 6.45 g/t in year one to 4.37g/t in year seven. A mine production rate of 600 tonnes per day was selected as being opti - mum for the mineralized structures contained within the Clavos deposit. This tonnage was based on a 2.75 g/t cut-of f proposed tonnage estimate, with a 60 g/t cut grade, and would permit a life of mine of seven years to extract 70% of the outlined mineral resource estimated tonnage of Indi - cated 1,258,400 tonnes plus Inferred 796,000 tonnes. The PEA is based on Roscoe Postle Associates Inc.’ s independe nt Min - eral Resource Estimate, in accor - dance with National Instrument 43- 101 (NI43-101) and Form 43-101F1 guidelines that defned an Indicated mineral resource of 1,258,400 tonnes at 4.81 g/t Au totalling 194,600 ounces of gold and Inferred mineral resources of 796,000 tonnes at 4.7 g/t Au representing 120,000 ounces. These resources are reported at a base case cut-of f grade of 2.75 g/t Au and individual high assays have been capped at 60.0 g/t. Seven year life is estimated for Sage’ s new Clavos Mine