IDM Mining Ltd.
TSX VENTURE : IDM

IDM Mining Ltd.

July 12, 2016 09:00 ET

IDM Mining's Updated Preliminary Economic Assessment for Red Mountain Gold Project Demonstrates Increased Annual Production and Robust Economics

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 12, 2016) - IDM Mining Ltd. (TSX VENTURE:IDM) ("IDM" or the "Company") is pleased to announce the results of an updated Preliminary Economic Assessment (the "2016 PEA") for the Red Mountain Gold Project (the "Project"), located in northwestern British Columbia near the town of Stewart, BC. The 2016 PEA report is authored by JDS Energy and Mining Ltd. ("JDS") with input from a number of other specialized and experienced consulting and advisory firms in the areas of infrastructure development, metallurgy, environmental science and geology.

"The 2016 PEA confirms the potential for a near-term, low CAPEX and OPEX, high-grade underground gold-silver mine," said Rob McLeod, President and CEO of IDM Mining. "The Project Economics are complimented by the significant exploration upside for the project near current resources as well as throughout the Property."

IDM commissioned the 2016 PEA to incorporate the new mine and infrastructure plan for the Project, confirm capital, operating costs and development timelines. This updated study confirms the anticipated low capital and operating costs, robust economic potential and near-term production profile of the Project, from the previous preliminary economic assessment announced on July 24, 2014 (the "2014 PEA"). Highlights of the 2016 PEA base case analysis are as follows (all amounts are in Canadian dollars unless otherwise indicated):

Base case economics utilize a gold price of US$1,250 per ounce and silver price of US$15 per ounce and an exchange rate of C$1.00 equals US$0.80.
The pre-tax base case economics indicate a Net Present Value (NPV) of $133.1 million at a 5% discount rate with an Internal Rate of Return (IRR) of 42.4% and a 1.9 year payback of initial capital.
The after-tax base case economics indicate a NPV of $86.6 million at a 5% discount rate with an IRR of 32.3% and a 2.0 year payback of initial capital.
Due to the wide nature of the mineralized zones, the majority of the deposit is amenable to bulk underground longhole mining methods. The project utilizes a year round design processing rate of 1,000 tonnes per day (tpd) and underground mining rate of 1,500 tpd for 8 months per year.
Average life of mine head grade is 7.0 g/t Au and 21.5 g/t Ag.
Life of project direct operating cost is estimated at US$441 per ounce of gold recovered. Net of the silver by-product, costs drop to US$418 per ounce.
Initial capital costs are estimated at US$89.0 million, CAD$111.2 million, which includes a 10% contingency.
The economic model assumes base case gold recovery rates ranging from 90.1% to 88.0% for gold and 84.6% to 76.0% for silver, depending on the mineralized zone.
Average annual payable production has increased by 25% over the 2014 PEA to 70,000 ounces of gold and 194,000 ounces of silver.
Mine life is estimated at 5 years with a 15 to 18 month pre-production period.
Opportunity to reduce project capital costs include sourcing used mining and processing equipment and possible sharing of infrastructure costs for the road and powerline with an established independent power producer looking to develop a run-of-river hydroelectric project adjacent to the proposed mill site location.
Opportunity to increase potentially mineable ounces through the conversion of additional inferred resource by way of infill drilling, as recommended by JDS, and through immediately proximal exploration efforts.

"Red Mountain is currently in the permitting process including continued dialogue with the Nisga'a First Nation and is planning to file a Project Application report in late 2016 under the BC Environmental Assessment Act and Canadian Environmental Assessment Act," said Michael McPhie, Executive Chairman of IDM. "Our comprehensive 2016 field program including: resource delineation drilling, engineering, metallurgy and environmental baseline work will support our Feasibility Study which is anticipated for early 2017."

The 2016 PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and that there is no certainty that the 2016 PEA will be realized. Please see the important disclosure under "Cautionary Note Regarding the 2016 PEA" below.

JDS was engaged by IDM in April 2016 to produce an updated Independent Preliminary Economic Assessment for the Red Mountain Gold Project with input from a number of other specialized and experienced consulting and advisory firms. A technical report prepared in compliance with the requirements of the Canadian Securities Administrators' National Instrument 43-101 ("NI 43-101") will be filed on SEDAR and the Company's website within 45 days. The technical report is being prepared by Gord Doerksen, P.Eng a qualified person independent of the Company in accordance with section 1.5 of NI-43-101.

THE RED MOUNTAIN GOLD PROJECT

The 17,125 hectare Red Mountain Gold Project is located in northwestern BC, 15km northeast of the Town of Stewart. Discovered in 1989, the property was explored extensively until 1996 by Lac Minerals Ltd. and Royal Oak Mines Inc., with 466 diamond drill holes and over 2,000 meters of underground development completed, along with extensive engineering and environmental baseline work. Additional studies were completed over the past 12 years by Seabridge, North American Metals Corp. ("NAMC") and Banks Island Gold Ltd. ("Banks Island").

Red Mountain is a porphyry-related hydrothermal gold system, located in the Stikine terrain. Gold mineralization is associated with, and partially hosted within an early to mid-Jurassic multi-phase intrusive complex, with associated volcanic and volcaniclastic rocks and sediments. Many gold mineralized zones occur on the Property, including four primary mineralized zones and multiple satellite zones with established resource estimates. The three main mineralized zones (Marc, AV and JW) have been folded, and are separated by dip-slip fault zones. The 141 Zone is a parallel mineralized zone located 200 meters southwest. These mineralized zones are moderate to steeply dipping, roughly tabular and vary in widths from one to forty meters, averaging about sixteen meters in thickness. Gold and silver mineralization is associated with stockworks, disseminations and patches of coarse grained pyrite. Alteration facies includes strong quartz-sericite alteration.

Red Mountain 2016 Preliminary Economic Assessment Results

A summary of the 2016 PEA results based on a gold price of US$1,250 per ounce (2014 PEA - US$1,250) and silver price of US$15 per ounce (2014 PEA - US$20) is as follows:

Key Aspects and Assumptions of the PEA Study

Parameter Unit 2016 PEA
Value
2014 PEA
Value
Mine Life Years 5.0 5.0
Resource Mined M tonnes 1.8 1.4
Total Mined M tonnes 1.8 1.4
Throughput Rate tpd 1,000 1,022
Avg Au Head Grade g/t 7.00 7.25
Avg Ag Head Grade g/t 21.45 24.44
Au Payable k oz 348 277
k oz/yr 70 56
Ag Payable k oz 965 852
k oz/yr 194 171

Summary Economics 2016 PEA: US$1,250/oz. gold (2014 PEA - US$1,250), US$15/oz. silver (2014 - US$20)

2016 PEA 2014 PEA
Total LOM Pre-Tax Free Cash Flow C$ M $178.1 $119.4
Average Annual Pre-Tax Free Cash Flow C$ M $35.9 $23.9
LOM Income Taxes C$ M $57.7 $40.1
Total LOM After-Tax Free Cash Flow C$ M $120.4 $79.2
Average Annual After-Tax Free Cash Flow C$ M $24.3 $15.9
Discount Rate % 5% 5%
Pre-Tax NPV C$ M $133.1 $90.1
Pre-Tax IRR % 42.4% 43.3%
Pre-Tax Payback Years 1.9 1.3
After-Tax NPV C$ M $86.6 $57.6
After-Tax IRR % 32.3% 32.9%
After-Tax Payback Years 2.0 1.5
2016 PEA 2014 PEA
US $ C $ US $ C $
Cash Cost ($/oz) 440.61 550.77 516.23 543.40
Cash Cost ($/oz) Net of By Product 417.93 522.41 454.73 478.66
2016 PEA - Exchange rate of $1.00 equals US$0.80 was used
2014 PEA - Exchange rate of $1.00 equal US$0.95 was used

Sensitivities

Metal Price Sensitivity:

Au Price
US$/oz
Ag Price
US$/oz
Pre-Tax
NPV5%
(C$M)
Pre-Tax
IRR
Pre-Tax
Payback
After-Tax
NPV5%
(C$M)
After-Tax
IRR
After-Tax
Payback
$1,150 $13.80 100.6 34.1% 2.2 65.6 26.0% 2.3
$1,250 $15.00 133.1 42.4% 1.9 86.6 32.3% 2.0
$1,350 $16.20 165.6 50.4% 1.7 107.6 38.4% 1.8
$1,450 $17.40 198.1 58.1% 1.5 128.6 44.5% 1.7

Source: JDS (2016). Based on exchange rate of C$1.00 equals US$0.80

Discount Rate Sensitivity:

Discount Rate Pre-Tax NPV C$M After-Tax NPV C$M
0% $178.1 $120.4
5% $133.1 $86.6
7% $118.3 $75.5
8% $111.4 $70.4
10% $98.7 $60.9
12% $87.3 $52.3

Summary of Operating Costs

Operating Cost $/t processed LOM (C$M)
Mining 55.07 96.9
Processing 40.01 70.4
Site Services 4.33 7.6
G&A 9.67 17.0
Total 109.08 191.9

Opportunities to Enhance Value

In addition to the favourable economics outlined in the 2016 PEA, there are numerous opportunities to further enhance project value through additional resource expansion and optimization work at Red Mountain.

  • In the spring of 2016, IDM signed an MOU with Bridge Power Corp., an independent power producer with run-of-river hydroelectric generation rights to Bitter Creek. The companies are committed to sharing environmental baseline data, and potentially capital costs for construction of the access road and powerline. This would result in substantial potential cost savings to the Capital and Operating Costs at Red Mountain.
  • Additional Inferred Resources in the JW zone and down-dip tail zones could be potentially converted into mineable ounces through infill drilling.
  • The main mineralized trend is open for expansion along strike to the northwest of the JW Zone, where the mineralized horizon has been traced through drilling for an additional 800 meters. The AV and JW tail zones are open for expansion down-dip, and the 141 Zone is open for expansion to the northwest and southeast. Additional drilling in these areas could potentially expand the resource base.
  • Exploration potential on the property has been greatly enhanced since 1994 by glacial recession surrounding the deposit. A considerable area that was previously under ice is now exposed for the first time and available for exploration proximal to the Red Mountain gold/silver-bearing sulphidation system.
  • The purchase of used processing equipment, which is presently available from several sources, would lower capital costs and shorten engineering, procurement and construction timelines.

Risks

It is the conclusion of the QPs that the 2016 PEA summarized in this technical report contains adequate detail and information to support the potentially positive economic result. The 2016 PEA proposes the use of industry standard equipment and operating practices. To date, the QPs are not aware of any fatal flaws for the Project.

The most significant potential risks associated with the Project are uncontrolled dilution, operating and capital cost escalation, permitting and environmental compliance, unforeseen schedule delays, changes in regulatory requirements, ability to raise financing and metal price. These risks are common to most mining projects, many of which may be mitigated, at least to some degree, with adequate engineering, planning and pro-active management.

Capital Costs

The capital cost (the "CAPEX") estimate includes all costs required to develop, sustain, and close the operation for a planned 5-year operating life. The construction schedule is based on an approximate 24-month build period. The accuracy of this estimate is (-20/+30%).

The high-level CAPEX estimate is shown in the table below; the sustaining capital is carried over operating Years 1 through 5, and closure costs are projected in Year 6.

Capital Cost Summary and 2014 Comparison

2016 PEA 2014 PEA
Area Pre-Production
(C$ M)
Sustaining
(C$ M)
Total
(C$M)
Pre-Production
(C$ M)
Sustaining
(C$ M)
Total
(C$M)
Mine 14.5 26.4 40.9 10.5 4.8 15.3
Site Development 12.0 - 12.0 - - -
Mineral Processing 33.4 - 33.4 23.8 - 23.8
Tailings Management 6.2 6.2 12.4 3.7 11.6 15.3
Infrastructure 13.5 - 13.5 19.7* 0.6 20.3
Indirect Costs Incl. EPCM 15.6 0.6 16.1 8.6** - 8.6
Owners Costs 6.0 - 6.0 - - -
Closure Costs - 8.6 8.6 - 1.4*** 1.4
Salvage Value - (5.0) (5.0) - - -
Subtotal Pre Contingency 101.1 36.9 138.0 66.2 18.4 84.7
Contingency 10.1 4.2 14.3 9.9 2.8 12.7
Total Capital Costs 111.2 41.1 152.3 76.1 21.2 97.4
Source: JDS 2016
*Includes Power, Infrastructure, Surface Equipment and Site Access Road
**Includes Owner, Indirect and EPCM costs
***Net of salvage value

The variances of the 2016 and 2014 CAPEX estimates are based on the following:

  • Mining CAPEX increased due to:
    • a significant increase in capital development associated with accessing additional more remote mineable resources such as the 141, JW Lower, AV Lower and Marc footwall zones
    • a 50% increase in mobile equipment requirements related to the increase in production from 1,000 t/d in 2014 to approx. 1,500 t/d in 2016
    • a concordant increase in mine infrastructure costs related to the higher production rates in the 2016 PEA
  • Mineral Processing costs increased in 2016 due to:
    • A change in flow sheet from a whole-ore leach process to flotation-leach which reduces operating costs and gives greater flexibility for varying mineralization types
    • inclusion of gravity concentration
    • a change of comminution circuit from secondary to tertiary crushing and from a rod-ball mill circuit to a ball mill and re-grind mill
    • the use of a Merrill Crowe gold recovery system as opposed to an adsorption, desorption and refining (ADR) process to handle silver:gold grade ratios in excess of over 4:1, at times, in the mine life
    • significantly more detail in the 2016 cost estimation covering areas underestimated in the 2014 PEA such as buildings ($5M), concrete and steel.
  • Tailings management costs increased in the pre-production period in the 2016 PEA due to a new facility location at Bromley Humps and additional initial storage needed due to increased annual production. The overall tailings facility cost decreased for the LOM, in spite of the facility capacity being increased, due to the favourable 2016 PEA location.
  • Infrastructure, Indirect, Owner and EPCM costs were significantly more in the 2016 PEA estimate. Some of the drivers for the cost increase are:
    • Significantly greater detail in the estimate covering areas previously factored, especially earthworks
    • Use of recent experience of costs from JDS's construction of the Silvertip and Gahcho Kue mines
    • Freight cost inclusion for all items
  • Net closure cost increased in the 2016 PEA, in general, due to increased footprint of operating two sites
  • Contingency was reduced to 10% in 2016 from 15% in 2014 due to significantly improved detail in the CAPEX estimate in 2016 PEA.

Mining

The Red Mountain deposit is proposed to be mined using two underground mining methods, based on geometry and grade of the mineralized zones:

  • Longhole stoping ("LH") for mining blocks dipping steeper than 55°, which represents about 70% of mineable tonnage. This is the preferred mining method from a productivity and operating cost perspective; and
  • Drift and Fill ("D&F") for mining blocks with dips of less than 55° and zones not amenable to LH stoping, which represents about 22% of mineable tonnage; and

The remaining 8% of the potentially mineable tonnage comes from access and stope cross-cut development.

Cemented and un-cemented rock fill will be used as backfill to maximize mining recovery. The deposit will initially be accessed from the existing portal and exploration ramp in addition to a new portal accessing the top level of the mine and acting as a ventilation exhaust. A third lower access to be used for haulage will be added in Year 1 of the mine life. Access ramps will be driven at maximum grade of 15% at a 4.5 m by 4.5 m profile to accommodate 30 tonne haul trucks. Level spacing is variable up to a maximum of 30 m. Mineralized zone development will be on a 4.0 m x 4.0 m profile.

The initial mine design was based on basic assumptions to generate lower limits for cut-off grades (the "COG") for the two planned mining methods. A value of 3.65 g/t Au was determined as the COG for longhole stoping and 4.75 g/t Au for D&F mining. These COG's were used to design initial mining shapes.

The 2016 PEA mine plan focusses on accessing and mining higher grade material early in the mine life. As such, the plan commences with mining of Marc, followed by AV, and then JW and 141 zones. The mine production rate is targeted at 1,500 tpd.

Mining recovery and dilution factors were applied to each mining shape based on the mining method used.

Mine Production Schedule

Zone Unit Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Mineable Tonnage Tonnes 2,000 312,000 379,000 379,000 380,000 307,000 1,759,000
Gold Grade g/t 5.33 7.93 7.65 7.06 6.38 5.97 7.00
Silver Grade g/t 22.08 29.39 29.55 15.74 17.97 14.69 21.45
Gold Ounces Oz 400 80,000 93,000 86,000 78,000 59,000 396,400
Silver Ounces Oz 1,700 295,000 360,000 192,000 219,000 145,000 1,212,700
Lateral Development M 1,074 4,635 4,396 4,591 4,326 3,932 22,954
Vertical Development M 49 86 384 59 67 8 652
Cemented Rock Fill (CRF) m3 - 61,431 26,255 37,211 23,371 2,823 151,092
Waste Fill m3 - 40,612 93,560 90,281 78,265 86,578 389,296
Source: JDS (2016)

Recovery Methods

The results of the metallurgical test work together with financial evaluation data, were used to develop metallurgical design criteria, which in turn were used to design the process facility for the Project.

The testwork has shown that Red Mountain mineralization can be treated using conventional mineral processing techniques for the recovery of gold and silver doré. A trade-off study was conducted to compare processing the mill feed material using either a whole-ore leach or a flotation/regrind/leach circuit. The flotation/regrind/leach circuit was selected due to estimated lower operating costs of approximately 15%, similar capital costs and slightly lower recoveries when compared to a whole-ore leach plant.

The plant will process material at a rate of 1,000 tpd with an average life of mine ("LOM") head grade of 7.0 g/t gold and 21.5 g/t silver.

The plant will consist of the following unit operations:

  • 3-Stage Crushing and Fine Ore Storage;
  • Primary and Secondary Grinding;
  • Gravity Concentration and Intensive Cyanidation;
  • Flotation, Dewatering and Regrind;
  • Cyanide Leaching and CCD Thickening;
  • Cyanide Destruction;
  • Merrill Crowe and Gold Refining; and
  • Tailings Disposal at the Tailing Management Facility.

The grinding circuit product size is targeted at approximately 80% passing (P80) 150 microns, and the rougher concentrate will undergo further grinding to at least a P80 of approximately 20 microns, before the leaching stage. The flowsheet includes 3-stage crushing, 2-stage ball mill circuit, gravity gold recovery, flotation, regrind, leaching, CCD thickeners, Merrill Crowe and gold refinery. The tailings will be pumped to a tailings management facility (the "TMF"). The crushing circuit will operate at an availability of 70%. The milling and leaching circuits will operate 24 hours per day, 365 days per year at an availability of 92%.

Project Infrastructure

The project envisions the upgrading or construction of the following key infrastructure items:

  • Approximately 25 km access road from Highway 37A to the project site;
  • Crushing and grinding circuits and gold extraction plant located at Bromley Humps ;
  • Tailings management facility and impoundment located at Bromley Humps;
  • Temporary development waste storage areas (note that waste rock generated by development and mining is rehandled into the underground workings as backfill);
  • Administration office, mine dry, maintenance shop, warehouse and emergency camp;
  • Electrical connection to BC Hydro, transmission line adjacent to the seasonal access road and on-site substation and distribution network;
  • Process and fire water storage and distribution; and
  • Sewage septic system.

These key items would be constructed during a two-year pre-production period. The access road and right-of-way for the electrical power transmission line are constructed early in the pre-production period.

Environment, Reclamation, First Nations and Stakeholder Engagement

The Project has been designed to minimize any short and long-term environmental impacts and to ensure that the Project provides lasting benefits to local communities while generating substantial economic and social advantages for shareholders, employees, and the broader community. IDM respects the traditional knowledge of the Aboriginal peoples who have historically occupied or used the Red Mountain project area. The project area watershed is relatively undisturbed by human activities with the exception of an access road that was constructed in the late 1990s but is currently decommissioned.

The objective is to retain the current watershed and local ecosystem integrity as much as possible during the construction and operation of the Project. Upon closure and reclamation of the Project, the goal will be to return the relatively small-disturbed areas to a level of pre-mine existence.

Pursuant to section 3(1) of the Reviewable Projects Regulation, the proposed production capacity for the Project exceeds the criteria of 75,000 tonnes per annum (t/a) of mineral material for a new mineral mine and is undergoing a provincial and federal environmental assessment under the British Columbia Environmental Assessment Act (BC EAA) and the Canadian Environmental Assessment Act (CEAA). Significant steps in the process have been undertaken successfully and IDM is planning to file a Project Application report in late 2016 that will fulfill the requirements of both BC and Canada. Approval for the Project under BC EAA and CEAA is expected in the second half of 2017. Provincial permitting for the Project will be pursued concurrently with the environmental assessment process.

Restoration activities are planned to consist of covering the tailings management facility to minimize infiltration. Covers will be graded to create natural drainage to reduce erosion. All underground development rock will be placed as backfill in the mining process. Infrastructure will be removed and disturbed sites regraded to natural slopes. The access roads will be deactivated in accordance with the Forest Practice Code. It is planned to hydrostatically seal the lower underground portal with an engineered bulkhead.

Resource Estimate

Numerous resource estimates were completed from 1989 to present. The drilling database consists of historical drilling most of which has been carried out by LAC in the early 1990s. Between 2000 and 2001, North American Metals Corporation (NAMC) relogged all of the mineralized intervals and carried out an extensive database validation of the drill database. Banks Island Gold drilled two holes in the Marc zone in 2013 and IDM drilled five holes in the deposit in 2014, three holes targeting the 141 zone and two holes targeting the AV zone. IDM also drilled seven exploration holes targeting other areas on the Red Mountain gold project in 2014.

On April 4, 2016 IDM Mining announced an updated Resource Estimate for the Red Mountain Project, prepared by Dr. Gilles Arsenault, P.Geo ("ACS") and Andrew Hamilton, P.Geo (the "Technical Report"). The updated mineral resources for the Red Mountain Project are reported at a 3.0 g/t Au cut-off.

Classification Tonnage Au
(g/t)
Ag
(g/t)
Oz Au Oz Ag
Measured 847,200 9.38 34 255,400 920,700
Indicated 794,600 7.29 18 186,100 459,100
Measured + Indicated 1,641,800 8.36 26 441,500 1,379,800
Inferred 548,100 6.10 9 107,500 153,700

A 3D block model was created using Geovia GEMs Version 7.2 to represent the lithological and structural characteristics specific to the Red Mountain deposit. This model was used as a framework for the grade model, which relied on geostatistical analysis of the sample data and a detailed understanding of the geology to produce a robust estimate of the resource.

The model is rotated 045º counter-clockwise from the UTM grid so that blocks are orthogonal to the drill sections (azimuth of 315º) and mine grid. Block size was set to 4 m x 4 m x 4 m to better define the mineralized zones and to stay consistent with previous resource estimates. The rock type element in the block model was coded for all zones using a 0.001% selection process. The rock and percent models were then updated with specific codes for each of the mineralized zones.

Gold grades were interpolated within the individual zones using ordinary kriging and multiple passes. Grades were only interpolated into blocks if the blocks had not been interpolated by a previous pass.

Bulk density was interpolated using Inverse distance weighted to the second power. For those blocks that had insufficient density data to generate a block estimate, the block densities were assigned the average density for the rock type.

In order to determine the quantities of material satisfying "reasonable prospects for economic extraction", ACS assumed a minimum mining cut off of 3 g/t gold representing an approximate mining cost of $160.

ACS is unaware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political issues that may adversely affect the Mineral Resources presented in the Technical Report.

ACS considers that the blocks with grades above the cut-off grade satisfy the criteria for "reasonable prospects for economic extraction" and can be reported as a Mineral Resource.

Red Mountain Mineral Resource Statement at a 3 g/t Gold Cut-off Effective April 4, 2016

Zone Tonnage
(tonnes)
In-situ
Gold
Grade
(g/t)
In-situ
Silver
Grade
(g/t)
Contained
Gold
(troy
ounces)
Contained
Silver
(troy
ounces)
Marc Zone
Measured 642,800 9.84 38 203,400 784,500
Indicated 17,100 10.14 25 5,600 13,500
Inferred 2,600 12.44 28 1,100 2,300
AV Zone
Measured 204,500 7.91 21 52,000 136,100
Indicated 505,000 7.45 21 120,900 333,500
Inferred 35,100 10.18 19 11,500 21,600
JW Zone
Indicated 114,100 9.57 13 35,100 48,300
Inferred 176,100 7.38 10 41,800 59,300
141 Zone
Indicated 158,400 4.82 13 24,500 63,900
Inferred 55,000 5.12 6 9,100 9,800
Marc Footwall
Inferred 44,200 6.29 6 8,900 8,700
AV Lower Zone
Inferred 44,900 5.11 6 7,400 9,100
JW Lower Zone
Inferred 120,600 4.4 4 17,100 14,200
132 Zone
Inferred 69,600 4.81 13 10,700 28,600
Total Measured & Indicated 1,641,600 8.36 26 441,500 1,379,800
Total Inferred 548,100 6.1 9 107,500 153,700
Source: ACS (2016)

Mineral resources were estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserve Best Practices" Guidelines. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. The Mineral Resources may be affected by subsequent assessment of mining, environmental, processing, permitting, taxation, socio-economic and other factors.

Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred mineral resources will ever be upgraded to a higher category. Mineral resources that are not mineral reserves have no demonstrated economic viability.

TECHNICAL REPORT

JDS Energy & Mining Inc., a full service, British Columbia-based, Engineering, Procurement, Construction & Management firm, is the principal consultant for the 2016 PEA. The executive summary of the 2016 PEA, prepared by JDS, and subsequently a technical report will be posted on the Company's website www.IDMmining.com and the technical report will be filed on SEDAR www.sedar.com within 45 days.

Gord Doerksen, P.Eng. of JDS Energy & Mining Inc., a 'Qualified Person' for the purpose of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian securities administrators ("NI 43-101") has approved the disclosure of, and is the qualified person responsible for, the scientific and technical information in this news release inclusive of the Resource Estimate information. He has verified the data disclosed.

Rob McLeod, P.Geo, President and CEO of IDM Mining Ltd and a 'Qualified Person' under NI 43-101 has reviewed and approved the technical content of this release.

ABOUT IDM MINING LTD.

IDM Mining Ltd. is mineral exploration and development company based in Vancouver, BC, Canada. The Company's current exploration activities are focused on precious metals in British Columbia and Yukon, with a primary focus on the high grade underground Red Mountain Project which has entered the BC and Canadian environmental assessment process Further information can be found on the Company's website at www.IDMmining.com.

ON BEHALF OF THE BOARD of IDM Mining Ltd.

Robert McLeod, President, CEO and Director

Cautionary Note Regarding the 2016 PEA: The 2016 PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Readers are encouraged to read the technical report when it is filed.

Forward-Looking Statements: Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to proposed exploration and development activities and their timing, resource estimates and potential mineralization, the 2016 PEA, including estimates of capital and sustaining costs, anticipated internal rates of return, mine production, estimated recoveries, mine life, estimated payback period and net present values, opportunities to enhance the value of the Red Mountain Project and other plans and objectives of IDM. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others and in addition to those described elsewhere in this release, delays in obtaining or inability to obtain required government or other regulatory approvals, permits or financing, the risk of unexpected variations in mineral resources, grade or recovery rates, of failure of plant, equipment or processes to operate as anticipated, of accidents, labor disputes, and unanticipated delays in completing other development activities, the risk that estimated costs will be higher than anticipated and the risk that the proposed mine plan and recoveries will not be achieved, equipment breakdowns and bad weather, the timing and success of future exploration and development activities, exploration and development risks, mineral resources are not as estimated, title matters, third party consents, operating hazards, metal prices, political and economic factors, competitive factors and general economic conditions.

In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: required approvals, permits and financing will be obtained; the proposed exploration and development will proceed as planned; with respect to mineral resource estimates, the key assumptions and parameters on which such estimates are based; that the proposed mine plan and recoveries will be achieved, that capital costs and sustaining costs will be as estimated, and that no unforeseen accident, fire, ground instability, flooding, labor disruption, equipment failure, metallurgical, environmental or other events that could delay or increase the cost of development will occur, and market fundamentals will result in sustained metals and minerals prices. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

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