DOME MOUNTAIN MINE

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Metal Mountain Resources Inc.

The Dome Mountain Mine is located approximately 38 kilometres due east of the town of Smithers in northwest British Columbia, Canada. The property consists of 41 contiguous mineral claims and one mining lease comprising a total area of 10,970.9 hectares. The claims are road accessible from Smithers by 64 kilometres of mostly gravel all-weather roads. The Town of Smithers, with a regional population of approximately 15,000, is a major centre for resource industries operating in northwest British Columbia. It is located approximately 400 kilometres from deep water ocean ports in Prince Rupert, Kitimat and Stewart, has an airport with daily service to Vancouver, and has access to the CN rail-line. Several exploration companies and diamond drill contractors have offices in the town. Smithers has readily available, skilled mine and construction labour as well as connections to electric power and natural gas.

Metal Mountain acquired mineral tenures that cover the past-producing Dome Mountain Mine with the intention of reopening the mine and exploring for additional gold-silver resources. Since acquiring the property, Metal Mountain has completed 9,631 metres of in-fill and exploration drilling, a NI 43-101 resource estimate, and a NI 43-101 prefeasibility study in addition to baseline environmental and engineering studies. Dome Mountain Mine Permits In August 2010, Mines Act Permit M-237 and Environmental Management Act Permit 104869 were issued, in the name of Gavin Mines Inc. Gavin Mines Inc., a wholly owned subsidiary of Metal Mountain will be the operating company for the Dome Mountain Mine. Gavin Mines Inc. was named to honour the late Gavin Tattersall, former President, CEO and Senior Founder of Metal Mountain. Prefeasibility Study In September 2010, a Prefeasibility Study (PFS) was completed by independent consultants Christine Linden and Steve Cutler of Linden Mining & Consulting. The results of the PFS are favourable and demonstrate that the project development model as presently conceived is technically feasible. The complete PFS can be viewed here.

Mineral Reserves

The total probable mineral reserve for the Dome Mountain Mine is 135,131 tonnes at an average grade of 11.2 grams per tonne of gold. The conversion of indicated resources to probable reserves at Dome Mountain was based on the stope outlines and dimensions for resources at or above a diluted 7.9 gram per tonne gold cut-off grade. Where development warranted, an incremental cut-off of 4.7 grams per tonne gold was employed.

Summary of Financial Analysis

The PFS covers all aspects of project development, including underground mining, toll processing by cyanidation, transportation of ore, and all related infrastructure. Linden developed a financial model from capital quotations, estimates from suppliers, manufacturers, contractors and experience based on similar operations in British Columbia. The analysis shows a strongly positive internal rate of return (“IRR”) of 208% and a positive net present value (“NPV”) of $13.67 million at a discount rate of 5%. The net cash flow is based on a 2 year operating schedule. The CAD$/US$ exchange rate was assumed to be CAD$1.00 = USD$0.956. The analysis used a gold price of US $1,054 per troy ounce and a silver price of US $15.72 per troy ounce.

Historical Exploration, Development and Production

The Dome Mountain area has a long history of exploration that resulted in the discovery of numerous gold bearing quartz-sulphide veins. Gold mineralization was first located on the property in the late 1800s and considerable surface and underground work was done in 1923- 24. Resumption of exploration in the 1980s led to the discovery of the Boulder Vein System in 1985. Underground mining was initiated in August 1991 by Timmins Nickel Inc. and its joint venture partner, Habsburg Resources Inc. and ceased in May 1993. During this period 43,900 tonnes at an average grade of 12.0 grams per tonne gold were reportedly mined from shrinkage stopes accessed from trackless drift developments on the 1290 and 1370 levels. The ore was shipped off-site to either the Equity Silver mill near Houston, BC or to the Westmin Premier mill near Stewart, BC for toll milling.

Exploration (2008-2009) Prior to Metal Mountain acquisition of the Dome Mountain Mine, Eagle Peak Resources Inc. conducted the following exploration and development on the property from 2008-2009: In 2008, Eagle Peak Resources Inc. conducted soil geochemistry, 3D induced polarization and magnetic surveys over the Boulder Vein system and its projected extension to the east. These surveys were designed as an orientation of the geochemical and geophysical signatures related to the known veins and structures as an aid to further exploration. Between July 28 and September 24, 2009, Eagle Peak Resources Inc. conducted a drill program of 46 HQ holes totaling 5,705 metres. Most of the drilling was conducted on the Boulder Vein system to in-fill the existing drill pattern and to confirm the results from the pre-2009 drilling. Exploration drilling of coincident soil geochemistry and 3D induced polarization anomalies by Eagle Peak Resources Inc. in 2009 intersected a quartz vein that assayed 19.07 grams per tonne gold over the 0.6 metre interval from 49.4 to 50.0 (Drill hole DM09-046). This intersection is located approximately 400 metres northeast of the 1290 portal and may represent the discovery of a new vein. In addition to diamond drilling, Eagle Peak Resources Inc. conducted considerable underground sampling. The vein exposures in the stopes accessed from the 1290 level were washed, mapped and chip sampled. Samples were taken from the quartzcarbonate-sulphide veins and the surrounding wall rock alteration at right angles to the vein. A total of 193 chip samples were collected for analysis.

NI 43-101 Resource Calculation





Mineral Processing And Metallurgical Testing

The metallurgical testing was conducted by PRA Metallurgical Division of Inspectorate America Corp., in Richmond, BC under the direction of Matt Bolu, P.Eng. The purpose of the testing was to investigate the recovery of gold and silver by flotation, cyanide leaching and heap leaching at the pre-feasibility level.

Whole ore cyanide leach tests were conducted using conventional process conditions as widely practiced in the industry. Test results indicate that the samples as tested were highly amenable to cyanidation, producing high precious metal recoveries in leach solutions. Gold recoveries in leach solutions varied from 86.5 to 96.0 percent. Silver recoveries on the other hand were lower and varied from 28.3 to 33.6 percent.

Exploration 2010

Metal Mountain conducted a small diamond drill program (10 holes) in February 2010. 2 holes (DM-10-055 and DM-10-056) were planned as condemnation drilling in the area of a proposed tailings pond, approximately 1300m northeast of 1290m (Lower) Portal. The other 8 holes (DM-10-047 to DM-10-054) were exploration holes, designed to test for the extension of the Boulder Footwall Vein structure found in Dome Mountain Mine. For more information on the 2010 drilling, see the Dome March 15, 2010 news release.

Results from exploration drilling indicate a 400-metre horizontal extension of the Boulder Footwall Vein from mine workings, over a vertical extent of 140 metres. High gold assays indicate the grade potential within the vein structure. Additional drilling is recommended to follow up on these results. For more information on the 2010 drilling, including assay results, see the April 13, 2010 news release.

Exploration Potential

Management of the Company believes there is considerable opportunity to increase the mineral resources of the Dome Mountain Mine through additional infill drilling on the Boulder Vein system and further exploration drilling. In addition to the Boulder Vein system, the project is host to the Cabin, Elk, Forks, 9800, Free Gold, Ptarmigan, Eagle, Gem, Raven, Hawk, Chance, Hoopes, Jane and Pioneer Veins. The Cabin Vein is interpreted as the westward extension of the Boulder Vein. The other veins mentioned are separate from the Boulder Vein system.

The veins occur in a roughly northwest-southeast 12 km trend from southeast of Dome Mountain to Mt. McKendrick. This trend may reflect the presence of a deep-seated structure. Based on the results of exploration to date and on the deposit model, there is significant potential to develop mineral resources on the Forks, Elk, Free Gold and 9800 Veins and to discover new veins.

Production and Development Schedules

Mine production and development have been scheduled for a 22-month period, targeted to commence in 2012, dependant on available finances.

The mine schedule is designed to deliver an average of 205 tonnes of ore per day to an offsite mill over a 22-month period. A summary of the production schedule is shown in the table below.



Mine Operating Costs

Estimated mine operating costs are based on signed contracts where they exist. In the absence of a contract agreement, industry standard rates were used. The total overall cost is estimated at $260.38 per tonne and the mining cost component is estimated at $125.10 per tonne. The mining costs can be broken into the categories listed in the table below.



Milling and Related Costs

Ore will be hauled to surface and placed in a stockpile. The ore will then be crushed to size and loaded into highway haul trucks for transport to an offsite mill facility for further processing and gold/silver recovery. It is anticipated that the mill charges for the ore processing will include a $50.00 per tonne refining charge, and payment on 95% of the recovered gold and silver. Estimated costs associated with milling and refining of the ore is outlined in the table below.



General and Administrative Operating Costs

The estimated general and administrative costs are $3.66 per tonne as shown tabulated in the table below.



Total Operating Costs

The total operating costs used in the Dome Mountain life of mine plan are shown in the table below, based on an average of 205 tonnes per day.



Capital Expenditures

The 205 tonne per day Dome Mountain Mine is estimated to achieve full production in 2012. Estimated capital costs involved are shown in the table below. Capital equipment costs are relatively low as most equipment is to be leased.



Total Costs

The total life of mine estimated cost per tonne for the Dome Mountain Mine is based on current contract rates and current industry standard estimated costs. The overall cost is estimated at $260.38 per tonne. A breakdown of the total cost per tonne is listed in the table below.



Preproduction Budget

Capital Expenditures*                                                                                            $4,313,700

Exploration Budget

Phase 1 Expenditures                                                                                            $1,371,950

TOTAL                                                                                                                 $5,685,650


*As of December of 2011, all infrastructure necessary for production to commence is complete and the preproduction capital expenditures have already been incurred.