The Syama gold deposit lies on the northern margin of the Archaean-Proterozoic Leo Shield which forms the southern half of the West African Craton. The Syama tenements straddle the regional boundary between interbedded basalt and argillite of the Kadiana-Madinani terrain with polymict conglomerate and sediments of the Kadi ok) terrain.

The mine stratigraphy in the region of the Syama open pit was originally established by Randgofd and has subsequently been refined as mining has provided an extensive exposure for geological mapping and structural evaluation. The most significant geological work was conducted in 2007 by geological consultants Jigsaw Geoscience Pty Ltd who completed a comprehensve review and ??? interpretation of all previous geological data to establish a definitive mine stratigraphy.

From west to east the stratigraphy contains an un-mineralised hangingwall zone consisting principally of basalt and andesite, a 200m to 300m thick mineralised sequence of altered and pyritic basalt, greywacke and intrusive rocks. On the footwall side polymict andesitic conglomerate forms the eastern boundary of the sequence.

The Syama Bananso Fault Zone is an extensive regional structure located on the sharp contact with the conglomerate. While the mine stratigraphy dips at 60° toward the west it is in an overturned position with younger rocks toward the east. The spatial distribution, geometry and character of lamprophyre units intruding the sequence is considered an important factor in the mineralising event as they display an intimate geometric relationship with alteration and mineralisation.

Within the mineralised zone pyrite is the dominant sulphide mineral accompanying gold. It is found as disseminations in highly altered basalt and sediment, within breccia matrix and in sheeted quartz veinlets. The pyrite content can be up to 15% but generally represents less than 5% of the rock mass. Gold occurs in three forms comprising native gold, electrum and solid solution gold in pyrite. The majority of gold present is refractory while the reduced amount of free gold observed is up to 300pm in size but predominantly fine grained.

The planned transition of Syama to an underground mining operation has provided an opportunity to fundamentally review all aspects of the Syama operation.

Through the various stages of mining evaluation, it was determined that Sub Level Caving (“SLC") represented the optimal mining method to develop the extensive sulphide orebody beneath the open pit. This mining method will provide controlled, high productivity ore delivery from the deposit. Industry experts from Snowden Mining Industry Consultants outlined the following advantages of SLC at Syama:
• SLC is highly mechanised, well understood and used in many locations around the world and is able to deliver the required production rate to replace open pit production at a comparable cost.
• The orebody geometry and geotechnical conditions are suited to SLC.
• The subsidence zone will not affect critical infrastructure.

There is a well-established sulphide treatment plant at Syama that the Company has been operating successfully for the last seven years. Additional metallurgical testwork was developed to confirm gold extraction characteristics of future underground ore to ensure it was able to be processed through the current flowsheet. The current processing plant is designed to treat the primary Syama ore where the gold is dominantly refractory and located within sulphides. The sulphides require roasting to oxidise and release the gold ahead of the routine carbon in leach (“CIL") process. The product from roasting, the calcine, is then fed to the CIL circuit. The roasting process also oxidises the majority of the organic carbon which would otherwise cause preg-robbing in the cyanide leach train.

Observations gained from the test work program included the following:
• The Syama underground ore remains double refractory and can be treated effectively with the existing Syama flowsheet.
• The underground ore exhibited the same comminution characteristics as the open pit ore and was very consistent in all samples tested showing uniform characteristics.
• The underground ore continues to respond well to flotation.
• The underground dilution rock exhibited softer comminution characteristics than the ore and does not affect flotation performance.