At the Mirado project the gold mineralization in the Main zone is primarily associated with stockwork and disseminated sulphides in variably altered rock. The characteristics of the gold mineralization in the Main zone are similar to intrusion-related gold mineralization (Robert et al. 2005). These atypical deposits display similar regional-scale controls as orogenic deposits. They differ in styles of mineralization, metal association, interpreted crustal levels of emplacement, and relative age. Those gold deposits show a close spatial association with high- level porphyry stocks.

The gold mineralization at the Mirado Project that is the subject of this report is mainly associated with the zone historically named the Main Zone (and also referred to as the South zone is some historical reports). The shaft is located in the North zone located approximately 400 m northeast of the pit, but almost all exploration work since the 1960’s has been focused on the Main Zone that is in the vicinity of the open pit.

Mineralization defined in the current report forms three lenses north-northwest striking lenses with up to 300 m strike length and widths of 10 to 50 m. The lenses dip west at 45 to 60o and are separated by barren intervals that are 20 to 30 m wide. The strike of the mineralized zones is broadly conformable with the regional northwest lithological and structural trends, however, the dip appears to be discordant to the described lithological trends.

Gold mineralization is structurally controlled and has been identified along north-northwest trending shear zones. North-south trending brittle structures have also been recognized on the property as being favourable for gold mineralization.

Weiershauser and El-Rassi (2013) report that a west-northwest striking shear zone is associated with the Main Zone in the vicinity of the open pit. This shear zone separates massive tuff in the south from tuff with a penetrative planar fabric in the north. North of the shear zone, on the north side of the open pit, agglomerate and lapilli tuff show foliation formed by elongated clasts. The shear zone itself is characterized by tightly spaced cleavage, locally with an oblique mineral lineation. From the Main zone open pit to the North Zone the felsic tuff generally exhibits westnorthwest striking cleavage of varying intensity. The shear zone dips approximately 80 degrees to the north-northeast.

Weiershauser and El-Rassi (2013) also report that a north-northeast-striking fault observed in core (Boreholes MD13-28, MD13-06, MD13-37) appears to coincide with the southeast limits of the main auriferous zone. This fault is characterized by slickensides with chlorite, and broken core and may correlate with a northeast-striking fault with subhorizontal lineation and sinistral sense-of-shear documented on the south side of the open pit.

Gold mineralization in the Main zone commonly occurs in highly silicified fragmental rock with varying amounts of pyrite and subordinate chalcopyrite and sphalerite. Sulphide mineralization occurs as stringers, blebs and disseminations. The distribution of gold is highly variable. The current resource model is based mainly on mineralization envelopes broadly defined by sulphide mineralization.

Weiershauser and El-Rassi (2013) report that some gold occurs at and near the contact with a rhyolite which, based on information from core logging, forms an irregular body on the south side and below the Main zone.

In the North zone, gold mineralization is associated with a series of sulphide, quartz, and quartz carbonate veinlets parallel to the shear zone foliation. The strike continuity of the veins is good.

Bourne (1985) reports that the North zone was mined in five parallel stopes for about 500 feet along strike on the 250 foot level and can be traced for about 1,000 feet along strike. The North zone extends to the 500 foot level and is open at depth.

The PEA proposes a conventional truck and shovel open pit mining operation to extract the Mineral Resources at the Mirado Project.

Some marginal material marginally sub-economic mineralized with gold grades near but below the cut-off grade, will be stockpiled separately for possible future processing.

For pit optimization, a base case gold price of US$1,300/oz was used along with an inter-ramp pit slope of 45°. The Mineral Resources were compared in terms of gold ounces potentially produced and the related waste/overburden stripping ratios. Of special interest was the rate of increase (or decrease) of certain factors in these comparable pit shells, as the open pit shells went deeper.

The ultimate pit would measure approximately 500 m long by 350 m wide and have an ultimate depth of approximately 100 m. Stable inter-ramp slope angles on the order of 50 degrees have been utilized in the pit design.

Open pit mining will utilize conventional and well established open-pit mining practices, with successive drill and blast, load and haul cycles using a drill/loader/truck mining fleet. The overburden and waste rock material will be hauled to overburden and waste disposal areas near the pit.

Since the life-of-mine (“LOM”) currently being contemplated is relatively short, the entire mining operation would be run on a contractor basis. The mining methods and production capacity have been chosen to match a projected ultimate process plant throughput rate of 1,000 tonnes per day (“tpd”). This total will be composed entirely of feed from the open pit mining operation. Open pit mining would proceed as successive pre-strip and hard rock mining operations, and follow the down dip trend of the mineralized deposit.

An open pit optimization was carried out in order to identify an optimal, conceptual open pit mining operation. A number of Lerchs-Grossmann pit shells were generated by varying the gold price. The base case scenario that was selected assumed a cut-off grade of 1.0 Au g/t, which corresponds to a gold price of US$1,300 per oz, process plant feed and waste mining costs of $3.55 and $3.25 per tonne respectively, overburden mining costs of $3.00 per tonne and process plant feed crushing hauling and processing costs of $33.40 per tonne and G&A costs of $2.00 per tonne. Hard rock pit slopes were assumed to be stable at a 50 degree inter-ramp slope. Reducing the cut-off lower than this 1.0 g/t Au grade effectively accelerated the incremental increase in the waste stripping ratio to undesirable levels.

The open pit mining dilution was estimated to be 20%, at a grade of 0.65 Au g/t. Mineralized material extraction in the open pit mine is estimated to be 97%. A summary of open pit diluted and extracted resources considered for mining was determined, as well as associated overburden and waste rock removal.

The ultimate pit would measure approximately 500 m long by 350 m wide and have an ultimate depth of approximately 100 m.

An initial pre-strip operation of approximately 900,000 tonnes of overburden and waste rock will be required before process plant feed production could commence. Stable inter-ramp slope angles on the order of 50 degrees have been utilized in the pit design. Clay materials encountered during stripping and mining will be hauled from the pit and used to cover and encapsulate the potentially acid producing (“PAG”) waste rock storage piles. The overburden and waste rock would be hauled to separate disposal areas and the process plant feed would be hauled to the primary crusher.

Orefinders will also provide the engineering control and grade control sampling and assaying during the hard rock mining phase. The key mining equipment provided by the contractor would likely include front end loaders and haulage trucks. Once hard rock mining operations commence, track mounted diesel powered drill rigs will be employed for blasthole drilling. The ancillary mobile equipment fleet provided by the contractor will likely include a road grader, a water/sander truck, bulldozers, and a fuel/lubrication truck. Field service vehicles and pick-up trucks will be provided by the Company and contractor, as required. The Company’s equipment would be maintained at the contractor’s shop by contractor maintenance personnel.

The construction of an on-site processing facility would not be justified given the current estimates of the quantity of potential process plant feed that can be produced by the Project.

The run-of-mine (“ROM”) mineralization will be loaded into mining haul trucks by front end loaders and delivered to a primary crushing facility near the pit rim, or to a stockpile near the crusher. The size of the mineralized rocks will be reduced by the crusher to 100% passing 0.15 m.

From the primary crusher, the material will be delivered by highway transport truck to be delivered to the toll processing facility.

The closest ore processing facility is the operating Macassa Process Plant, which is operated by Kirkland Lake Gold Ltd.

The construction of an on-site processing facility would not be justified given the current estimates of the quantity of potential process plant feed that can be produced by the Project.

P&E is aware of several potential toll processing facilities within a moderate trucking distance, which may be amenable to accepting process plant feed from the Mirado property. Toll processing through one of the process plants in the area is contemplated.

At the present time, toll processing at one of the process plants in the area is contemplated. It is assumed for the purpose of this report that a direct cyanidation plant with gold recovery from solution via activated carbon (as opposed to flotation followed by cyanidation of concentrate) will be selected. The primary unit operations will be:

- Crushing and grinding of ore, employing conventional crushing and grinding or semi-autogenous (SAG) grinding followed by ball milling and classification to produce a ground p ........