The Windjammer (3), Gap, Southwest and 55 Zone Deposits of the Golden Highway Property can be classified as mesothermal lode gold deposits in an Archean greenstone belt setting. This deposit type is a significant source of gold mined in the Superior and Slave provinces of the Canadian Shield. Dubè and Gosselin (2007) have recently published an overview of greenstonehosted gold deposits in Canada. These deposits are typically quartz-carbonate vein hosted and are distributed along crustal-scale fault zones that mark convergent margins between major lithological boundaries such as those between volcano-plutonic and sedimentary domains.

Gold mineralization in the northern corridor is found in the sheared and altered mafic and ultramafic metavolcanics that define the northern DPFZ as it crosses the Property. Gold mineralized zones include Twin Creeks and Windjammer North with numerous occurrences between them along 3 km of the Destor Porcupine Fault Zone (DPFZ). Windjammer North is one of six gold zones included in this updated resource and PEA report and is located immediately north of Windjammer Central. Additional mineralization is associated with altered syenite bodies within and in contact with the DPFZ (Last Chance zone) further to the west southwest along strike.

Gold mineralization in mafic volcanics is typically in individual quartz-carbonate veins, breccia zones, and stockworks of quartz veinlets with 2–5% very fine pyrite and occasional visible gold. Veining is accompanied by often pervasive ankerite, silica, sericite, chlorite, hematite, and fuchsite alteration of wall rocks.

The Last Chance Zone is a syenite hosted gold zone found in porphyritic syenite intrusives in contact with sheared and locally altered ultramafic and mafic of the Destor. The fault contact has generated fracture/breccia zones in the syenite with gold mineralization in quartz-carbonate stringers and hematite alteration with up to 5% pyrite with some local overlap into altered ultramafic rocks.

Five of the six gold zone resources have been defined in the southern corridor to date and are the primary focus of this report. The mineralization in the 55 Zone, Southwest Zone, Gap Zone and Windjammer South have a combined strike length of 4 km strike length along the south (hanging wall) side of the iron formation. In this setting additional gold mineralization occurs southwesterly along strike from the 55 Zone (Dyment 3 and Western Zone). Windjammer Central is the fifth gold zone resource located immediately north of the Windjammer South iron formation and is also within the southern corridor Timiskaming meta-sediments that form the footwall to the steep northerly dipping Destor volcanics of Windjammer North.

The 55 Zone mineralization has been traced over a strike of 1,000 m, a depth of 250 m and reaches a width of 200 m. The Southwest zone consists of three fault displaced blocks over a strike of 1,200 m, with a width of 10 to 100m and depths ranging from 250 to 1,200 m. A separate deeper vein zone is located 225 m in the hanging wall of the BIF. The Gap bridges the area over 500 m along the iron formation between the Southwest Zone and Windjammer South with no change in mineralization style. It has been traced over 450 m strike, a depth of 400 m and width of 200 m into the hanging wall sediments. Windjammer South has been traced by drilling for 650 m along strike, to depth approximately 450 m and locally extends into the BIF hanging wall sediments for 300 m. Windjammer Central has been tested over 750 m of strike along the volcanic contact, to a depth of 450 m and into the sediments for 350 m.

Most of the gold mineralization occurs in altered sediments (ankerite + silicification) with locally disseminated pyrite. Stockwork veining is the most common style across all the sediment hosted zones and consists primarily of flat extensional quartz-ankerite-pyrite veins. Less common are sub-horizontal to shallow dipping quartz-feldspar veins, quartz-ankerite-chlorite veins in multiple orientations and quartz carbonate chlorite tension gash veins. Veining and fractures are associated with variably intense ankerite–pyrite haloes. Stockwork veins are typically narrow (0.5-3.0 cm), but may reach 0.30 to 1.50 m. The majority of thicker veins are often brecciated and found proximal to the BIF contact. Mineralized intervals range from 5-40 m in thickness and are often closely stacked.

The mineralized deposits at the Golden Highway Project will be mined by a combination of conventional open pit methods, which will be applied to mineralization located closer to surface and underground retreat long-hole methods for mineralization located at depth. The mining methods and production capacity have been chosen to match an ultimate milling throughput rate of 25,000 tpd. This total will be composed of 22,000 tpd from the open pit and 3,000 tpd from the underground mine.

Open pit mining will extract the portion of the mineral resources located closer to surface. This operation will utilize conventional and well established open-pit mining practices, with successive drill and blast, load and haul cycles using a drill/shovel/truck mining fleet. The overburden and waste rock material will be hauled to overburden and waste disposal areas near the pit or use as backfill. The run-of mine mineralization will be loaded by hydraulic shovels and delivered by mining haul trucks to the primary crusher or stockpile near the crusher.

Underground mining methods will be used to exploit the mineral resources located at depth. The underground mining operations will be accessed by an inclined ramp and a vertical shaft.

OPEN PIT MINING:
These surface mineralized deposits are grouped into three designated open pit mining operations: the 55 Zone Pit, the SW Zone Pit and the NE Zone Pit. The open pits are scheduled to produce 22,000 tpd of mineralization and a total of 75 million tonnes per year of overburden, waste and mineralization combined.

The NE Zone pit would be developed in three phases. The two other open pits would each be developed in a single phase.

UNDERGROUND MINING:
An underground mining operation would access and extract the Potentially Mineable Portion of the Mineral Resources located at depth below the proposed SW Zone open pit location.

Initial access to the underground deposit will be via a portal and decline with an inclination of - 15%. This decline will connect with the -230 m level, at a total vertical depth of 550 m. Mining of the potentially mineable portions of the mineral resources located above this elevation will be via the decline for access and haulage of material to surface. Concurrent with production from the decline, a circular, concrete lined vertical shaft measuring approximately 6.5 m in diameter, will be excavated from surface down to a depth of 1,170 m. It is expected that this shaft and its associated hoisting and support facilities will be commissioned after four years of decline access mining, allowing production to commence down to the -800 m level.

The primary mining method envisaged for the underground mining operation is conventional longitudinal longhole retreat with paste backfill.

Sub-levels (“undercuts” and “overcuts”) from the access cross-cuts will be located at 30 m vertical intervals. Sublevel drifts would be developed in the mineralized zones to the full width of the Potentially Economic Portion of the Mineral Resources. These drifts would provide access for the successive operations of slot raise development, blasthole drilling and blasting, load/haul/dump (“LHD”) mucking and backfill placement. A 1.8 m by 1.8 m slot ventilation / backfill raise would be driven at the end of each stope.

Blastholes measuring 92 mm in diameter would then be drilled from the sublevel either up or down to adjacent sublevels. These blastholes would typically be drilled on a 2.0 m burden and fan spacing, in order to break the rock into the open slot and stope. The blasting powder factor necessary to produce adequate fragmentation of the rock, using emulsion explosives, is estimated to be approximately 0.60 kg/t.

Remotely operated LHD units would remove broken mineralization from the stope and from the excavated sublevel drifts. The stopes would be backfilled primarily with cemented paste backfill, supplemented with waste rock. A sill pillar will be left in place under mined out areas.

As the stope advances, paste backfill and development waste would be placed in the mined out area of the stopes from the level above.

Crushed ore is ground to a K80 of 74 microns in a two stage grinding circuit at an average rate of approximately 25,000 t/d (8,750,000 t/a). Ground product from the grinding circuit is fed to a cyanidation/ CIP circuit for gold extraction. A conventional carbon elution circuit recovers gold which is smelted to yield a doré product.