Texasgulf Inc. and Subsidiaries, as Successor in Interest to Texasgulf Inc. and Subsidiaries - Page 5

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               Generally, metal production in Ontario and elsewhere has               
          four phases:  (1) Exploration; (2) development; (3) mining; and             
          (4) processing.                                                             
               1.   Exploration                                                       
               The exploration phase consists of finding and delineating              
          ore reserves.  These activities range from prospecting to                   
          exploring by aircraft with advanced scientific techniques such as           
          electromagnetic and seismic surveying.  Texasgulf Canada                    
          discovered minerals near the Kidd Creek Mine by using airborne              
          exploration techniques.                                                     
               2.   Development                                                       
               The development phase includes activities needed to bring a            
          mineral reserve into production.  For an underground mine,                  
          development activities include sinking a shaft, adit (an almost             
          horizontal entrance to a mine), or ramp from the surface of the             
          ground into the mineral reserves.  For an open pit mine, such as            
          the Kidd Creek Mine, development activities include removing                
          waste rock that separates the ore from the surface.                         
               3.   Mining                                                            
               The mining phase is the process of extracting ore from the             
          ground, typically by blasting and mechanical removal.                       
               4.   Processing                                                        
               The processing phase generally includes three different                
          stages:  (a) Milling or concentrating; (b) smelting; and (c)                





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Last modified: May 25, 2011