The term Candelones Project refers to the area within the Concession in which the Candelones Main (CM), Candelones Extension (CE) and Candelones Connector (CMC) deposits are located. The deposits that comprise the Candelones Project are entirely contained within the confines of the property.

The Candelones deposits feature anomalous gold, silver, copper, lead and zinc mineralization. To date, all mineralization is confined to brecciated dacite volcanoclastics where they are in contact with andesite volcanics/volcanoclastices (CMC, CE) or dacite volcanics (CM).

Mineralization is currently interpreted to be a product of a hybrid type system. Volcanogenic massive sulphide (VMS) in a shallow water, back arc basin setting, is interpreted to have introduced low tenor copper, lead and zinc mineralization, coeval with deposition of the host dacite volcanoclastics, over a widespread area. Post mineral uplift developed extensive folding and faulting, interpreted to have produced extensive brecciation within the dacite volcanoclastic unit. The brecciated dacites offered ideal pathways for later, epithermal mineralization events associated with the late calc-akaline intrusives mapped elsewhere in the Tireo Formation that are possibly largely buried within the Concession limits. Hydrothemal fluid flow related to these buried intrusives is interpreted to have introduced the majority of the gold and silver into the Candelones deposits. The final stage of mineralizatio ........

Due to the fact that the targeted mineralization is located at or near the surface topography, it was determined that mining of the deposit would be best performed by open pit rather than underground methods.

The Candelones Starter Pit will primarily be mined using hydraulic excavators, which are easily able to free dig the mineralized overburden and oxidized rock and waste down to the transition material. The PEA assumes that only the transition leach feed and transition waste will require blasting. The total amount of rock that will require blasting is 14% of the total and will be encountered during the latter half of the mine life.

The leach feed to be sent to a primary crusher will be oxidized saprolitic material which will not be blasted, transition material which is partially oxidized and is planned to be blasted 75% of the time, and fresh unoxidized sulphide rock which will be blasted 100% of the time and will use a higher powder factor.

The production requirement for the Candelones Project was to establish a mining rate that would achieve an optimal balance between capital cost minimization and operating cost minimization. This was achieved through the adoption of a three-year mine life, with all mineralized rock above the cut-off grade going directly to the primary crusher and then onto the leach pad.

Mining of the Candelones Starter pit will generally be executed in 4 m benches, using 2 m flitches where preferred. Whereas ........

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