The Sugar Zone Deposit is interpreted as an orogenic, mesothermal gold deposit located in a zone of high strain within the Dayohessarah Greenstone Belt. The Deposit is hosted in mediummetamorphic grade (amphibolite) rocks that exhibit ductile deformation and have been intruded by felsite and porphyry sills. The gold is associated with silica-sulphide-potassic alteration.

In the Sugar Zone Gold Deposit, gold mineralization occurs in quartz veins, quartz stringers and quartz flooded zones predominantly associated with narrow porphyry sills, porphyry contact zones, hydrothermally altered mafic metavolcanics and, rarely in weakly altered mafic metavolcanics. The mineralization occurs in three parallel zones, the Upper, Lower and Footwall Subzones, that range in thickness from 1.5 to 10 m, strike at 140° and dip between -65° and -75° to the west. The three subzones are separated by 20 to 30 m of non-mineralized metavolcanics. The Sugar Deformation Zone is a high strain deformation zone associated with the mineralization with a northwest trend and dips west at 65o to 75o . The mineralization has been defined for over 1.5 km strike length and to a vertical depth of over 1,200 m and remains open along strike and at depth. Fine to coarse-grained specks and blebs of visible gold are common in the Sugar Zone quartz veins, usually occurring within marginal, laminated or refractured portions of the veins. Quartz veins and silicified rocks also contain varying amounts of pyrrhotite, pyrite, chalcopyrite, galena, sphalerite, molybdenite and arsenopyrite.

Other mineralized zones have been observed between, above and below the Sugar Zone Upper and Footwall Subzones, in diamond drilling. Most of these intercepts are believed to be quartz veining originating in either the Upper or Footwall Subzone, that have been diverted from the sheared part of the zone, up to 15 m from the main bodies of mineralization. One of these zones is the Lynx Zone, which lies east of the southern end of the Sugar Zone.

The Middle Zone, located between the Sugar and Wolf Zones, may represent the extension of the Sugar Zone to the north. The zone occurs within a highly strained package of massive and pillowed flows exhibiting various degrees of biotite alteration. Gabbro sills and flows are common about the zone. Similar to the Sugar Zone, a weak Upper and Footwall Zone may locally be developed. The zone typically ranges from 1.5 to 10.0 m in thickness.

Middle Zone gold mineralization is often associated with quartz veins and veinlets hosted within a package of altered mafic volcanic and feldspar porphyry. The gold mineralization is often accompanied by 1-5% pyrrhotite and pyrite with local sections of minor galena and sphalerite. Galena is normally indicative of higher grades and the presence of visible gold.

The auriferous Wolf Zone lies along strike of the Sugar Zone, and may represent the northern extension of the SDZ. It is defined as highly strained packages consisting of variously altered mafic volcanic flows and gabbros. The zone ranges in true thickness from 0.5 to 8.0 m.

The Wolf Zone is made up of highly sheared mafic metavolcanics, and a network of intrusive, intermediate quartz-feldspar porphyry dykes/sills. Alteration in the mafic volcanic and gabbro units consists mainly of silicification (both pervasive and quartz veining), diopside alteration and magnesium rich, brown biotite alteration. Alteration within the intermediate porphyry units consist of mostly silicification, with small amounts of magnesium-rich brown biotite, and no diopside. The zone is observed in trenches to pinch and swell over 30 m.

Wolf Zone gold mineralization mostly occurs in quartz veins, stringers and quartz flooded zones predominantly associated with porphyry zones, and hydrothermally altered basalts and gabbros. Fine-grained specks of visible gold are occasionally observed in the Wolf Zone quartz veins. The visible gold itself is often observed to be concentrated within thin fractures, indicating some degree of remobilization. Quartz veins and floods also contain varying amounts of pyrrhotite, pyrite and occasional galena. The presence of galena is a strong indicator of the presence of visible gold. Pyrite and pyrrhotite form most of the total sulphides, but do not appear to be
directly related to the presence of gold mineralization.

The Sugar Zone and Middle Zone mineralization typically comprises tabular, narrow veins, approximately 1.5 m to 3 m thick, and dipping at around 70° to the southwest. Excessive dilution is potentially a major risk to operating success in narrow mineralization. Longitudinal longhole retreat stoping was selected as appropriate for this Deposit based on the favourable geometry, current geotechnical knowledge and success of the Bulk Sample trial mining. Both the ore and the host rock are sufficiently competent to facilitate the void sizes required for effective longhole stoping.

The longhole open stoping mining method provides the following advantages:
- Safe – personnel do not enter the production mining voids (remote-controlled equipment only).
- Proven – many instances of the methods application throughout the world.
- Highly mechanized – reduces personnel exposure to health and safety risks.
- Easy access to resources – skilled labour and equipment are readily accessible locally and around the world.
- Low cost – leverages off large drill and blast scale and minimization of development.

Paste backfill is the primary fill type and has the following advantages:
- Reduces the need for rock pillars, maximizing ore recovery.
- Reduces the duration of the stoping cycle.
- Reduces the number of diesel powered loading and hauling units underground thereby reducing the overall primary ventilation.
- Reduces the size of the surface tailings storage facility.

The paste backfill plant was designed to generate paste backfill at a rate of 320 m3 of backfill per day. The schedule calls for an average paste backfill rate of 210 m3 of total backfill per day, implying a 65% utilization factor of the paste backfill plant. An agitator truck (typical concrete delivery truck) will transport the paste backfill from the paste backfill plant to various paste backfill holes located along strike directly above the orebody. All critical paste backfill lines will be duplicated or “twinned” to permit filling activities to continue in the event of line blockage. Underground reticulation lines will direct the paste backfill from the bottom of the surface delivery hole along the levels and into the stopes and will comprise drilled holes, steel pipe and HDPE pipe. Paste backfill barricades will be constructed in the lower sill drives using predominantly waste rock that is sealed with dry-mix shotcrete. Each barricade will be removed prior to blasting the next stope.

Primary and Secondary Crushing
The crushing area consists of three modules, a Jaw Unit, a Screener Unit and a Cone/Secondary Crusher Unit. The ROM material from underground is fed directly to the Primary Jaw Crusher (through a grizzly) and ROM bin. This material is then screened through a vibrating screen with a 13 mm aperture, the undersize reports to the fine feed stockpile and the oversize to the secondary crusher.

The Jaw unit includes a 15-minute capacity ROM Bin, Vibrating Grizzly Feeder and C80 Jaw Crusher to reduce the material from a 400 mm topsize to a 45 mm P80. The jaw crusher is fed by a vibrating grizzly feeder (“VGF”) set to scalp at 5 cm (2 inches). VGF oversize reports to the jaw, and undersize -5 cm (-2 inches) bypasses directly to the screen feed conveyor. Crusher circuit simulations show 50% of the feed passing to the crusher with a 5 cm (2 inches) grizzly spacing. The screen feed conveyor is equipped with a metal detector which will automatically stop the belt. Tramp metal is manually removed from the belt.

The Cone/Secondary Crusher Unit consists of an intermediate surge bin, vibrating feeder and HP100 cone crusher. The material from the cone crusher is returned to the jaw crusher discharge belt to return to the classification screen.

Grinding
The process plant feed conveyor is fitted with a weightometer to monitor and control the feed rate to the ball mill. The weightometer is also used to proportionally add water to the grinding circuit based on feed tonnage.

The grinding area is made up of a 3 m diameter x 5.8 m long (10 ft diameter x 19 ft long), 800 kW ball mill in closed circuit with a cyclone pack. The mill is designed to produce a P80 75 microns grind size.

Ore is fed to the ball mill at a controlled rate, nominally 36.5 dry tph, and water is added to the feed chute to achieve the desired milling density. Product from the ball mill discharges through a trommel with the oversize reporting to the scats bunker where it is periodically removed by a skidsteer loader and returned to the circuit via the clean-up hopper.

Trommel undersize gravitates to the guard screen feed hopper where it is further diluted to achieve the required cyclone feed density before entering the pair of gravity concentrators. The gravity concentrators operate in a staggered manner so that their backwashing and flushing cycles are staggered.

Once the material has passed through the gravity concentrators the cyclone feed pump delivers slurry to the cyclone cluster which has a duty and standby arrangement. Cyclone underflow gravitates to the ball mill, while cyclone overflow gravitates to the sulphide flotation circuit.

Two vertical spindle sump pumps, one located at the feed end of the ball mill and another at the discharge end of the mill service the area. The concrete floor under the ball mill area is sloped to the sumps to facilitate cleanup. Grinding media for the ball mill is introduced by use of a dedicated kibble and the grinding building gantry crane.

The existing process plant currently produces both a gold doré bar and a bagged gold concentrate through gravity concentration and flotation circuits, respectively. The process plant was originally commissioned at 575 tpd and is awaiting a permit to increase the production rate incrementally to its nameplate 800 tpd. The increase in production will be achieved by running the crushing plant longer every day and increasing the speed of various mechanical equipment items within the process plant.

The major process steps in the existing process plant are as follows:
- Primary and Secondary Crushing
- Fine Feed Storage (Stockpile)
- Grinding (Ball Mill)
- Gravity Concentration
- Flotation
- Concentrate Thickening and Filtration
- Tailings Thickening
- Reagents Makeup
- Process Water, Clean Water, Fire Water
- Paste Backfill.

Gravity Recovery
The gravity circuit takes the ball mill discharge and sends it to a guard ........