The Project lies within the western Basin and Range structural province in the northern portion of the Walker Lane structural trend which follows the California-Nevada border. The project sits on the eastern flank of the Virginia Range approximately 20 miles northeast of the historic Comstock Lode Ag-Au District.

At Talapoosa, Tertiary rhyolitic tuffs with interbedded rhyolitic lava and vesicular basalt form the base of the volcanic sequence and are overlain by predominantly dacitic and andesitic volcanic and related intrusive rocks with interbedded sedimentary rocks. Late Pliocene to Pleistocene basaltic rocks, are widespread throughout the region and represent the youngest episode of volcanism and are post-mineralization.

Cenozoic faulting, tilting and warping is associated with regional extension and oblique and strike-slip faulting and mineralization.

At Talapoosa, the mineralized area as defined by drilling to-date, is approximately 2,200 ft long, up to 1,000 ft wide, and up to 500 ft thick/down-dip and centered around the northwest trending Talapoosa and associated faults. Gold and silver mineralization occurs as quartz-chalcedony vein, hydrothermal breccias surrounded by margins of stockwork veining. Gold primarily occurs as native gold and in electrum. The upper 70 meters is predominantly oxidized, with the bulk of the oxide mineralization being contained within the Main, Dyke Adit, and East Vein Zones.

Approximately 80% of the resource occurs within the Bear Creek Footwall and Hangingwall Zones. Mineralization trends northwesterly with a steep dip and occurs within a central core of massive chalcedony veins and hydrothermal breccia up to 50 m wide, surrounded by a halo of stockwork veins up to 150m thick. Alteration of the rocks hosting Bear Creek Zones mineralization includes propylitic propylitic, phyllic, silicic, argillic, and opaline types, all of which are present at the Project.

The precious metal-bearing quartz veins, stockworks, and breccias at Talapoosa are of the low-sulphidation epithermal type mineralization which formed from boiling of volcanic-related hydrothermal systems.

Emplacement of mineralization is generally restricted to within 1 km of the paleosurface (Panteleyev 1996). Veins typically have strike lengths in the range of hundreds to thousands of metres; productive vertical extent is seldom more than a few hundred metres. Vein widths vary from a few centimetres to metres or tens of metres. Gangue mineralogy is dominated by quartz and/or chalcedony, accompanied by lesser and variable amounts of adularia, calcite, pyrite, illite, chlorite, and rhodochrosite.

Vein mineralogy is characterized by gold, silver, electrum and argentite with variable amounts of pyrite, sphalerite, chalcopyrite, galena, tellurides, rare tetrahedrite and sulphosalt minerals. Crustiform banded quartz veining is common, typically with interbanded layers of sulphide minerals, adularia and/or illite. Regional structural control is important in localization of low sulphidation epithermal deposits. Higher grades are commonly found in dilational zones, in faults, at flexures and splays.

The mine design consists of three mining areas: the Main Pit, Dyke Adit, and the East Hill Pit. Under the current analysis, the Main Pit and Dyke Adit combine into one open pit instead of two separate pits. Approximately 90% of production is from the Main Pit area, with 7% from the Dyke Adit area, and the remaining 3% from the East Hill area.

The overall strip ratio is 1.47 units of waste to each unit of mineralized material production.

Waste rock storage areas will be located toward the northeast and southwest sides of the pit areas in as close proximity as possible to the mining areas so as to minimize waste haulage distances. These areas were sized to store a combined 90Mt of waste rock.

Industry standard surface mining techniques formed the basis of mine production. This Base Case Scenario used CAT 992 – 16.5 yd3 wheel loaders and CAT 777 100st trucks as production prime movers.

Gold and silver from the Talapoosa deposit will be recovered using industry standard heap leach cyanidation and Merrill Crowe gold precipitation techniques. Merrill Crowe processing of the pregnant solution was preferentially selected as the appropriate metallurgical extraction and recovery scenario given the grade of the material and the relatively high ratio of recovered gold to silver. Saleable doré product containing the recovered gold and silver will be shipped to an established refinery.

The mineralized material of economic value will be crushed to a P80 = 10 mesh, the final crushing step employing an HPGR because of its’ effectiveness at increasing fracture surfaces within a crushed product.

Crushed material will be drum agglomerated and conveyed to a radial stacker by which it is placed in 20 ft. lifts on the heap. Drip emitters will be used to distribute leach solution to the top of the lift at a rate of 0.004 gpm ft2. The heap and solution pond is designed to allow for 60 days of primary leaching and 60 days if intermediate solution leaching (preg building).

Pregnant solution from the heap is pumped to a Merrill Crowe processing facility wherein the gold and silver are recovered. The filter cake is treated to separate and safely recover any mercury that may have entered the leach circuit. Once treated, the filter cake is transferred to smelting furnaces. Fluxes are added and the material is smelted, producing doré.

The Talapoosa Project site is located in an area with a negative water balance allowing the project to be designed and built as a zero-discharge facility.

Detoxification of residual cyanide in the heap and the process solutions will commence through natural degradation. The bulk of the cyanide will degrade naturally over time with more stringent chemical detoxification processes possibly being applied if needed before facilities closure.