Endeavor, Australia 

Overview

The Endeavor mine, is an underground silver and base metal operation, and associated mill facility, located in north-central New South Wales, Australia, about 447 miles (720 kilometers) from Sydney. The ore reserves at Endeavor are covered by five consolidated mining leases issued by the state of New South Wales to Cobar Operations Pty. Limited (“Cobar”), a wholly-owned subsidiary of CBH Resources Ltd. (“CBH”), which in turn is a wholly owned subsidiary of Toho Zinc Co. Ltd., a company listed on the Tokyo Stock Exchange. The leases form a contiguous block of 10,121 acres in size and expire between 2019 and 2027.

Access to the mine is by paved roads 30 miles (18 kilometers) to the northwest from the community of Cobar. Power to the mine and processing facilities is provided by the grid servicing the local communities. The property and equipment are maintained in good working condition by CBH through a regular preventive maintenance program with periodic improvements as required.

Operations

The zinc-lead-silver deposit currently mined at Endeavor was discovered in 1973. Initial production commenced in 1983, and the mine operated continuously until acquired by CBH from Pasminco on September 12, 2003. The mine employs bulk mining methods and utilizes a conventional flotation mill to produce a concentrate that is sold to a third-party smelter. Mining consists of longhole stoping and ore is broken by blasting rings of holes while retreating from an open slot raise.  Broken muck is picked up and loaded into underground trucks and taken to either the underground crusher or to the surface. Crushed ore is hoisted up the production shaft.

Geology and Exploration Potential

Endeavor is situated at the northern end of the Cobar Basin, a broad sedimentary basin that contains silver, lead, zinc and lesser amounts of copper mineralization contained within sulfide lenses hosted in fine-grained sedimentary rocks of the Paleozoic-aged Amphitheatre Group. The sulfide lenses that host silver and base metal mineralization at Endeavor are elliptically-shaped, steeply southwest-dipping and strike to the north-northwest. Principal ore minerals are galena, sphalerite and chalcopyrite. Silver occurs with both lead- and zinc-rich sulfide zones.

The ore reserves at Endeavor are covered by five consolidated mining leases issued by the state of New South Wales to Cobar Operations Pty. Limited ("Cobar"), a wholly-owned subsidiary of CBH Resources Ltd. ("CBH"), which in turn is a wholly owned subsidiary of Toho Zinc Co. Ltd., a company listed on the Tokyo Stock Exchange. The leases form a contiguous block of 10,121 acres in size and expire between 2019 and 2027.

CBH conducts exploration to define new reserves at the mine from both underground and surface core drilling platforms. CBH conducts exploration to define new reserves at the mine from both underground and surface core drilling platforms. For fiscal year ended June 30, 2012, which is the fiscal year used by the operator (CBH), the exploration expenditure at the mine was $0.7 million ($0.7 million AUD). Budgeted exploration for 2013 is approximately $0.4 million ($0.4 million AUD).

Outlook

Endeavor's proven and probable reserves measured 13.3 million ounces of silver at year-end 2012. Measured and indicated resources totaled 24.1 million ounces of silver and inferred resources were 3.8 million ounces of silver.

Please refer to the latest quarterly financial results news release for updated operational guidance.

1. Non-GAAP financial measure. Please see Reconciliation to GAAP table.
2. Please see Reserves and Resources statement.