The metals of primary interest at the Property are gold and silver. These metals are intimately associated with lead, zinc and copper in various forms and concentrations throughout the mineralizing system. Gold and silver enriched mineralization is developed within a northwest trending structural corridor, which is interpreted to have focused fluid flow away from weak porphyry centres related to a Late Cretaceous stock in the southeastern corner of the Property. Several of the mineralized structural zones are continuously mineralized for strike lengths of up to 2,400 m, and at least one of the structures is mineralized to a depth of 520 m down-dip from the current geographic surface. The mineralized structures remain open to extension along strike and down-dip.

Fluid inclusion work reveals that the veins formed at shallow depths (<1 km) and have low to intermediate sulfidation epithermal fluid characteristics (Main, 2015). Textures and mineralogy observed at the Property share a number of similarities with Carbonate Base Metal (CBM) deposits (Tarswell and Turner, 2013).

CBM deposits are a recently recognized sub-class of epithermal deposits that encompass a family of similar deposits located around the world. CBM deposits have mainly been discovered around the Pacific Rim and include multi-million ounce gold deposits such as Porgera (New Guinea), Buritica (Colombia) and Kelian (Indonesia).

The CBM class of deposits has yet to be identified elsewhere in the Yukon, but some researchers have recognized that mineralization on the Property has some of the characteristics of mineralization now categorized as CBM deposits (ex. Smuk, 1999). Given the limited academic research on the Property and the absence of significant syn-mineralization carbonate, more studies need to be undertaken.

The Property lies within the northern part of the Mount Nansen Gold Camp (MNGC), a northwest trending structural belt that hosts more than 30 known mineral occurrences (Figure 7.3), several of which are categorized as deposits and have produced historically and as recently as 1999 (Hart and Langdon, 1997).

Mineralization within the MNGC is dominated by gold-silver rich structures associated with a zonation model ranging from weak porphyry copper molybdenum centres, outward to transitional anastomosing sheeted veins, and lastly to more cohesive and continuous base and precious metal veins. The age of the mineralizing events within the MNGC is now considered to be Late Cretaceous.

The main mineralized structural zones range from 1 to 100 m wide and are usually associated with feldspar porphyry dykes. Mineralization occurs within veins, sheeted veinlets and some tabular breccia bodies. The host granodiorite exhibits pervasive weak argillic alteration immediately adjacent to, and up to 30 m peripherally from, them. Sericitization and potassic alteration are developed directly adjacent to hydrothermal channel ways. The granodiorite is magnetite bearing except where the magnetite has been replaced by sulphide minerals around and within mineralized structures.

Depth of surface oxidation ranges from 5 to 100 m below surface, depending on fracture intensity, the type of mineralization and local geomorphology. The deepest weathering occurs in wide, pyritic veins located along ridge tops or on south facing slopes.

Detailed evaluation of oriented drill core and measurements taken from trench exposures has identified two main structural orientations that control mineralization. The primary structural set strikes between 135° and 155° and dips 60° to 80° to the southwest. The secondary mineralized trend strikes between 110° and 130° and dips 60° to 70° to the south. The secondary structures may represent either Riedel shears of the primary structural set or a separate structural event altogether. The best gold mineralization is sometimes localized in areas where the two structural trends converge. The plunge of these structural intersections is towards the southeast.

Quartz is the dominant gangue mineral in veins in Work Area 2. It occurs in a variety of textures including chalcedonic, comb, banded, speckled and vuggy. Smoky quartz is the most common colour variation, but milky and clear quartz are locally abundant. Carbonate occurs mainly as ankerite and rhodochrosite and typically ranges between 5 and 20% of the veins by volume.

Breccias form tabular bodies consisting of heterolithic wallrock clasts, which include granodiorite and various volcanic or sub-volcanic lithologies. Matrices are enriched with fine grained, disseminated to blebby pyrite, arsenopyrite, sphalerite and galena. Breccias are mostly observed within drill core from the Klaza zone where they range up to 2 m in width.

Mineralization within most structures is interpreted to be spatially and genetically related to porphyry dykes, which strike northwesterly and dip steeply to moderately toward the south. The dykes pinch and swell in three dimensions and are usually unmineralized. Some faults identified to date likely post-date emplacement of the dykes as they are occasionally cut by mineralized veins.

The known surface mineralization on the Dade claims (Work Area 3) is hosted in two, sinusoidal zones of quartz veining and stockwork (V1 and V2) striking about 040° and dipping 60°-75° north, hosted in coarse-grained hornblende-quartz granodiorite to diorite gneiss (Burrell, 2013). V1 (formerly, the Grizzly Vein) and V2 are epithermal quartz vein and stockwork zones that exhibit pervasive silicification and moderate to strong clay alteration. In 2011, trenching exposed V1 over widths of 9 to 20 m along a 175 m strike length and V2 over widths of 2 to 12 m along a 125 m strike length (Burrell, 2013). The veins comprise white to grey quartz with boxwork limonite and locally 1-3% disseminated arsenopyrite and pyrite.

Vein systems contained in two distinct zones - Klaza nad BRX. Each zone can be further broken down by relative location: West, Central, East. The two zones lend themselves to open pit mining as the mineralized veins are located close to surface. The surrounding topography is moderately steep with sufficient flat areas suitable for the placement of waste dumps and stockpiles. The climate is favourable to open pit mining, with relatively light precipitation, predominantly in the summer.

Mineralization has been identified through exploration drilling below the potential open pits to a depth of approximately 450 m below surface; both zones remain open at depth and along strike. Both the BRX and Klaza vein systems are amenable to mining by underground methods, In the Cental Klaza zone potential exists in the eastern extremity for underground mining.

Open pit mining method:

AMC proposes to mine the open pits using a conventional truck and excavator mining method. At this stage,AMC has assumed that a 5 m bench height would be adopted and mineralized material mined in two 2.5 m flitches to increase mining selectivity.

Three 30 t excavators would be required to mine waste and mineralized material. The productivity of one 30 t excavator has been estimated at 396 t/hr in mineralized material, 439 t/hr in oxide waste and 354 t/hr in fresh waste. The hydraulic excavators are planned to load 30 t articulated dump trucks. At peak production in Year 1, five trucks are projected to be required.

The majority of the material will require blasting. Only a marginal portion of the material mined may be free-dug by excavators. AMC estimates that three top hammer drills would be required for production and contour drilling along the side of the hills.

Underground mining method:

The mining method selection criteria are based on:
• Vein geometry – Depth, shape, thickness and plunge.
• Rock quality – Mineralized rock and host rock competency (structures, stress and stability).
• Vein variability – Vein uniformity, continuity and grade distribution.
• Economics – Metal recovery, value attributed to mineralization, productivity, capital and operating costs, safety.

The BRX and Klaza zones consist of several near vertical veins averaging 0.5 m to 3 m in width. The strike length averages approximately 1,200 m for both zones and the vertical extent is approximately 450 m below surface.

Relative to current overall knowledge of the Klaza deposits, AMC considers that the most appropriate method is mechanized longhole open stoping. Longhole open stoping methods generally provide relatively high productivity within reasonable cost limits. It is also the most common method applied to narrow veins requiring a fair amount of selectivity, whilst maintaining reasonable production rates.

Based on geotechnical recommendations, an inter level spacing of 30 m is selected for the longhole benches. Relative to the anticipated vein width, AMC notes that longhole drilling accuracy will be very important in mining operations.

Access to the underground is via a single ramp (5 m by 5 m). Crosscuts are developed from the ramp to each level. Development along the strike of the vein is 4 m by 4 m.

Waste sourced from underground development and open pit mining will be used to fill the stopes as they are mined. A maximum open stope length of 24 m prior to filling with waste rockfill is assumed for supported stopes.

The processing facility will feature standard crushing, SAG and ball mill grinding followed by sequential lead, zinc and arsenopyrite flotation circuits. The arsenopyrite concentrate will then be treated by pressure oxidation and cyanide leaching to recover gold.

Crushing will take place using a jaw crusher ahead of stockpiling with 24 hour live capacity (1,650 t). The crushed material will feed into a SAG mill followed by a ball mill operated in closed circuit with hydrocyclones, to grind the mineralized rock to 80% passing 70 microns. The cyclone overflow would then report to the flotation circuit.

The flotation circuit begins with lead roughers, with the lead rougher concentrate stream then subjected to regrinding in a ball mill down to a size of 80% passing 28 microns. The regrind product is then cleaned in three stages to produce a final lead concentrate. The lead concentrate is then thickened and fed to an Acacia intensive leach reactor to recover gold, ahead of filtration and washing, and sale to a lead smelter.

Lead circuit tailings are conditioned ahead of zinc rougher flotation, with zinc rougher concentrate subjected to regrinding to 80% passing 32 microns. The zinc regrind product is then cleaned in two stages to produce a final zinc concentrate, which is thickened and filtered ahead of sale to a zinc smelter.

Zinc circuit tailings are conditioned ahead of arsenopyrite rougher flotation with the arsenopyrite rougher concentrate thickened ahead of hydrometallurgical processing.

Thickened arsenopyrite concentrate continuously feeds storage tanks providing five days of surge capacity ahead of the pressure oxidation (POX) circuit, to allow for autoclave downtime while the mill-flotation plant continues to operate. The POX autoclave circuit is followed by hot cure, neutralization, gold leaching and CIP recovery circuits. The POX autoclave and downstream processes have been sized to operate at an effective 85% availability.

The hot slurry from the autoclave flash vessel is treated through a hot cure stage to cure the basic iron sulphates (BIS), and break down the BIS into ferric sulphate and iron hydroxide into solution.

After hot curing, two-stage counter-current decantation (CCD) is used to separate acid liquor from the solid residue. Overflow solution from the first CCD is directed to a neutralization process using cheaper limestone to reduce cost. This neutralized liquor is directed to a lined Hydromet Residue Storage pond. Overflow from this pond will flow into the main flotation tailings storage facility (TSF).

The second CCD underflow slurry is neutralized with lime to pH 10 and transferred to a series of cyanide leach tanks, followed by a set of carbon in-pulp (CIP) pump cell tanks. The total leach and CIP residence time is 36 hours. The CIP circuit is operated counter-current with gold loaded carbon removed batch-wise from each pump cell. The CIP tails are pumped to cyanide destruction, which uses the INCO Air/SO2 process before pumping to the Hydromet Residue Storage pond. Sodium metabisulphite (SMBS) is used to replace SO2, to reduce transportation and handling hazards.

Loaded carbon from the CIP plant circuit is acid washed, neutralized and then stripped of gold in two elution columns. Eluate is circulated through electrowinning cells where gold is deposited on the cathodes, removed and the gold and silver precipitate (sludge) filtered and placed in a calcining oven with a retort system to remove any mercury before smelting in an induction furnace. The furnace is tapped to produce gold and silver doré bars which are cleaned and weighed prior to storage in the gold room safe, ready for dispatch.

Carbon is periodically regenerated in an electric kiln at 650°C to remove contaminants and reactivate the carbon, which is returned to the CIP circuit.

Thickened lead concentrate is leached to recover gold and silver using an Acacia intensive cyanide leach process. The process includes concentrate storage, leaching, and slimes removal with electrowinning of gold and silver. High gold recoveries from the lead concentrate are expected, at or above 85%. Electrowon gold and silver (sludge) washed from the cathodes is bagged and transported to the mill gold room for drying and smelting. The leached lead concentrate residue is pressure filtered and washed, with filtrate solutions sent to cyanide detoxification. The clean, filtered lead concentrate cake (7% moisture) is sampled, weighed and bagged for dispatch to a lead smelter.