The Granada deposit is a quartz-vein mesothermal gold deposit hosted by late Achaean Temiscaming sedimentary rock and younger syenite porphyry dykes dated at 2673±3 Ma as per works by Davis in 1991. The dykes belong to a late tectonic alkaline magmatic suite that hosts the mesothermal gold mineralization in the Kirkland Lake and Timmins gold camps of Ontario and also of Duparquet which is north of Rouyn-Noranda, in the Province of Quebec. The mineralization is mainly confined to the conglomerate/greywacke package of event S1 of the Granada Formation.

Granada gold mineralization is hosted by east-west trending smokey grey, fractured quartz veins and stringers. Free gold occurs at vein margins or within fractures of the quartz veins or sulphides. Late northeasterly-trending sigmoidal faults also host high grade gold mineralization. Accessory minerals include tourmaline, carbonate, chlorite, and disseminated sulphides. Pyrite is the dominant sulphide typically occurring within the immediate wall rock to the quartz veins. Minor pyrite does occur within the veins themselves. Additional sulphides such as chalcopyrite, arsenopyrite sphalerite and galena are present in trace amounts. Fuchsite (chromium mica) is present in the immediate wall rock to the quartz veins.

The gold grade at Granada varies due to coarse free gold in the mineralized structures. Apparently discontinuous, the mineralized structures are relatively continuous as demonstrated by assay grade continuity on the following cross section and the geometry of the underground workings. Due to the continuity of the structures, it was decided to remodel the mineralization in thin, higher-grade zones for
more concentrated mining.

The mineralized zones are being cut in blocks which are shifted in majority to the north.

The sub-vertical NNE faults affect the plunge and the author believes it is steeper with depth as per historical records of fault intersections in underground workings and observations in cross-sections.

The thickness of the conglomerate unit hosting the mineralized zones is over 300 metres. Within this package, it has been possible to observe different distinct mineralized zones with disseminated gold grades between the zones.

Most of the economic mineralization on the Granada property is related to late quartz veining. Several sets of veins have been recognized on the property. From north to south, historically the more important vein sets are referred to as: 5, B, A, 1, 3 and 2. The veins trend generally east-west direction and dip between 35° to 50° to the north. They are sub-concordant with sedimentary contacts. Quartz veins within syenite dykes and sills tend to follow the trend of the unit.

A portion of the gold occurs as free coarse gold while the remaining is mostly associated with sulphides.

The current report presents the scenario of Phase I – Open Pit with custom milling to IamGold Westwood (former Doyon) mill in Abitibi. The scenario schedules to produce 550 tpd of ore over 3 years which should be hauled to the Iamgold mill and process in batches.

The mining of Granada deposit will follow the standard practice of an open-pit operation with the conventional drill and blast, load and haul cycle, using a drill / truck / excavator mining fleet, and supported by a fleet of auxiliary equipment. The run-of-mine (RoM) will be drilled, blasted and loaded by hydraulic excavators and delivered by trucks to an ore stockpiling area.

The ore will then be loaded onto transport trucks and delivered to the Iamgold processing plant, approximately 43 km from the mine site while the waste rock material will be hauled to the waste disposal areas near the pits or backfilled into the mined pits.

During this study, SGS came to the conclusion that the riskier item associated to mining is the control of the mining dilution during the operations. The ore zones are relatively thin following a 45-55 degrees dip and are favorable to an important dilution. In this study, SGS estimated the dilution to 25% at a gold grade of 0.00 g/t. Based on our experience and on similar operations, these estimates are judged acceptable but a considerable effort will be required during the operations to achieve these values. The effect of an increase in mining dilution is to lower the average mill feed grade and directly affect the project profitability. As is can be seen in the sensitivity analysis, the overall project profitability is extremely sensitive to the mill feed grade. SGS recommends to pursue the analysis of calculating the mining dilution during a feasibility study by considering various approaches such as lower the height of the benches in ore material, do in-fill drilling, increase the assaying of the ore zones, control and follow the ore blasts movements, etc.

The previously PEA Technical Report (2013) was based on the assumptions that the Granada gold deposit could be put in production at a rate of 7,500 tonnes per day over a period of 11years. An on-site concentrator with gravity-cyanidation processing was included in the economic study.

Production was to come from an open pit designed to supply 6,500 tonnes per day (tpd) and an underground (U/G) mine supplying 1,000 tpd. The underground operation was planned to operate from a main ramp only, avoiding the cost of sinking a shaft. Two mining methods were proposed for the UG production, both as variants of the Cut-and Fill methods.

At least for some time, all ore from the Gold Bullion project will be processed in batches at the IamgoldDoyon mill (IMG). The mill originally built in the 1970’s was completely refurbished between 2011 and 2013 in order to efficiently process the Westwood ore.

The actual scenario for Gold Bullion (GBB) is to mine by open pit between 175,000 and 200,000 tonnes of ore per year at a rate of 550 tonnes per day and have the ore processed at IMG. The IMG mill has ample capacity to process some 2,420 tonnes of ore from the Westwood Mine every day. But for the first two years, due to mine development, the ore from the Westwood Mine will be processed at a rate of only 600,000 tpy or some 2,380 tpd, five days per week. Subsequently, the tonnage will eventually increase gradually to reach the annual nominal capacity of 850,000 tpy at the beginning of the fourth year. In the mean time the Gold Bullion ore will permit to close part of the gap between the Westwood Mine throughput and the IMG mill nominal capacity of 3,200 tpd.

The original scenario between GBB and IMG was in line with 50,000 tonne batches, every 63 to 64 days IMG would stop milling the Westwood ore for a period of 15 days and will process the GBB ore at a rate of 2400 tpd, 24 hours per day, 7 days per week. To ensure that the IMG mill never runs short of ore during the 15 days allotted to GBB, the mill will stop processing the Westwood ore only when at least 30,000 tonnes of the GBB ore will be stockpiled at Doyon and another 20,000 tonnes stockpiled at Granada.

The ore having an average grade of 4.24 g/t will be hauled by trucks on a distance of approximately 43 km from the Granada mine to IMG and discharged on a dedicated pad nearby the crusher house. When convenient, the ore will be dumped directly on the 27” aperture crusher hopper grizzly by the incoming trucks. If not, the ore will be retrieved from the pad and delivered to the surface crusher with a front end loader. Oversize will be left aside or break with the existing hydraulic rock breaker. Crushing is done with a 1.07 m x 1.22 m jaw crusher and the crushed ore is conveyed to the two 2,800 tonne mill ore bins.

Grinding of the Granada ore will be done using the 2,700 HP SAG mill in close circuit with a primary battery of 500 mm hydrocyclones. Cyclones overflow feeds a 1,000 HP ball mill in close circuit with a secondary battery of 600 mm hydrocyclones. Because of the smaller size of the Knelson concentrator (30”), it is possible that only a portion of the secondary hydrocyclones underflow will pass by the gravity separator to be followed by a Gemini shaking table. The other portion, or the whole gravity separator tailings, as the case may be, will report to the 1,000 HP ball mill. The gravity circuit concentrate will go directly to the refinery. Secondary cyclone overflow reports by gravity to the 27 m leaching thickener.

The existing leaching circuit remained the same as it was when Doyon was processing its own ore. The circuit has a 60-hour retention time at the mill nominal feed rate of 3,200 tpd. Since the Granada ore needs only 48 hours to get +95% gold dissolution, in order not to over cyanide and risking to reprecipitate the gold in the in the last leaching tanks, tanks 155 and 160 may be bypassed. The circuit will thus comprise 5 primary and 2 secondary CIL tanks followed by 5 CIP tanks. Loaded carbon is screened and reports to the loaded carbon tank. Leaching tails undergo the cyanide destruction circuit.

The carbon elution – refining circuit comprises mainly a loaded carbon tank, an acid wash tank, a carbon strip vessel, a bank of electrowinning cells and an induction furnace. Stripped carbon is reactivated in a horizontal kiln, quenched and classified. Classifier oversize is ready to be reused while very fine carbon particles are filtered in a filter press and sent to the Xstrata Horne smelter.

The tailings from the CIP circuit will be treated in the mill SO2-AIR cyanide destruction plant to eliminate the cyanide. The cyanide destruction circuit comprises mainly two 250 m3 reactors in parallel in which SO2 is added probably on the form of sodium bisulphite. Air is injected to the reactors with a blower. If needed, some lime and copper sulfate could be added to the reactors.

If required by IMG, prior to be sent to the tailings ponds the mill tailings will be desulfurized. Main desulfurization machinery includes two 2.8 m x 3 m conditioners, one 20 m3 rougher unit cell and 2 banks of four DR-180 scavenger flotation cells. Concentrate will be pumped to the Westwood 20 m paste backfill thickener while the desulfurization tailings will report to the main tailings pond.

The flotation (desulfurization) tailings will be pumped to the tailings pond 3 West and allowed to settle. Supernatant water will then be pumped to the polishing pond 3 East. Clear water from the polishing pond will finally be pumped to the process water reservoir.

Based on previous metallurgical testing it is probable that 50% of the gold will be recovered at the gravity circuit and out of the remaining 50%, another 90% will be recovered from the leaching of the gravity tailings for a total gold recovery of 95%.