Gold-bearing quartz veins at the Property are hosted by Ordovician metavolcanic and metasedimentary rocks of the Catchers Pond Group.

The Hammerdown vein system consists of a series of stacked gold vein zones situated within a 250 m long section of a 1,800 m long shear zone. A cross-section through the centre of the deposit is shown on Figure 7.5. Its eastern boundary is the Rumbullion Fault, a northeasterly trending right lateral fault, to the east of which is the Rumbullion gold zone which hosts several narrow, high-grade gold vein zones. To the west, the Hammerdown vein system pinches out approximately 75 m to the southwest of a strong flexure in the shear zone which rotates the shear from east-west at Hammerdown to the southwest. This southwest trending shear extends for several hundred metres and hosts the Muddy Shag gold zone containing two or three gold veins from which several good gold intersections have been returned.

At depth, the entire shear zone, including most gold zones, are cut off by the extensive Captain Nemo Fault, which is a north dipping, normal fault with some strike slip movement. Geological interpretation indicates downdrop of the Hammerdown area to be several hundred meters. As the Captain Nemo Fault cuts through the Hammerdown shear at an oblique angle, veins are cut off at depths varying from 150 to 250 m.

At Hammerdown, the main vein systems, designated Ml and M2, are respectively located along the north and south contacts of a fairly continuous, sill-like felsic porphyry body with the enclosing sheared mafic volcanics. The M2 vein is the stronger of the two. Both veins dip predominantly to the north although at depth they rotate to a steep southerly dip. The veins also appear to plunge to the west but high- grade shoots within the plane of the vein plunge steeply to the east.

The Hammerdown hanging wall veins, designated (from south to north) N, O, P, and Q, mostly occur in relatively undeformed mafic volcanics with a minor iron formation component and leucoxene-bearing mafic dykes. Felsic porphyry sills are present but do not influence the siting of the veins like the porphyry associated with Ml and M2. The veins have longer strike lengths compared to the main veins, but do not extend as far down dip. Some vein merging or bifurcation was observed. Dips progressivelyshallow from south to north but are still quite steep (80°). High-grade shoots within individual veins (i.e. "O" vein) have steep easterly plunges.

The primary mining method at Hammerdown would be longitudinal retreat longhole mining.

Longhole mining sub-levels will be vertically spaced 15 m apart and accessed via reconditioned existing ramps and headings or newly driven 4.0 m wide by 4.0 m high access ramps. Each sub-level entrance will be driven 4.0 m high by 4.0 m wide and will include a re- muck station and ventilation raise access to allow larger equipment onto the level from the ramp.

Approximately 10% of the Hammerdown ore will be mined using a mechanized cut and fill (MCF) method, with all of this MCF mining being performed in areas that are not amenable to longhole mining. Primary access to the sill cut at the bottom elevation of all MCF stopes will be created, with the cut and fill crews developing a single centrally located 40 m long by 3.0 m wide by 3.0 m high downgrade access ramp. On each level, the multiple veins allow a set of MCF stopes, which will be accessed by lateral headings driven transverse to the veins from the access ramp. Once all of the MCF stopes at the sill cut elevation have been mined, all of the stope openings will be backfilled to within 1 m of the back with uncemented rock while the access ramp and the lateral connections will be left unfilled to make room for the down broken rock.

Starting at the entrance to the access ramp, a 2.0 m thick portion of the ramp will be down broken and the rock left in place. The lateral connections between the set of stopes will be down broken 2.0 m in thickness and about half of the rock will be removed. Once the rockwork is complete, 2.0 m thick slices will be taken in the stopes with the ore extracted by a 1- tonne LHD to the base of the access ramp. This procedure will be repeated until 15 vertical metres of ore have been mined, with the last cut being nearly tight filled to provide as solid a working base as possible for the next 15 m high MCF lift. A total of one 3.0 m high sill cut and six 2.0 m high down break cuts will be required to complete each 15 m high set of MCF stopes.

Primary underground access will be via the existing mine portal and the upper portions of the historical main ramp system.

The upper portion of the existing Hammerdown Zone ramp will be reconditioned to 9950 m Level, where a 4.0 m wide by 4.0 m high bypass drift will be driven around the western extremity of the orebody to the hanging wall side of the deposit. A new 4.0 m wide by 4.0 m high main ramp will be driven on the hanging wall side of the orebody from the 9950 m Level location up to 9995 m Level and down to 9750 m Level.

Sub-levels will be driven off of the Main Access ramps every 15 vertical metres with the exception of 9885 m Level in the Main Zone. At that location there will be an additional 5 m between levels to accommodate a sill pillar to allow establishment of a second mining front in the Hammerdown to ensure the 400 mtpd production rate is maintained.

Each sub-level access will begin with a 15 m long by 4.0 m wide by 4.0 m high utility area that includes a sub-level re-muck cut-out, sump, transformer station, and ventilation raise access. This will allow larger 7-tonne LHDs to load 20-tonne trucks without incurring excessive development costs or reducing the overall productivity of ore haulage that will occur with the use of smaller equipment.

Beyond this utility area, the remainder of the main stope accesses will be driven 3.0 m wide by 3.0 m high. The stope accesses are sized larger than the sills to allow second gear travel and thereby faster travel speeds for higher productivity with the primary production 3.5-tonne LHDs.

Total sub-level development requirements were further minimized by using sill headings for access to further stopes wherever possible. These rock headings will be driven with similar dimensions as the ore sills as they will be used for access and to allow a retreat sequence for the furthest stopes. So in the longhole mining areas, these rock headings will be 2.7 m wide by 2.7 m high, and in the cut and fill areas they will be 1.7 m wide by 2.7 m high.

The Hammerdown ore will be crushed to minus 3 inches directly at the mine site before being transported to the Nugget Pond Mill. There it will be dumped on the ground and periodically transferred to a 300-tonne capacity crushed ore storage silo using a loader and the crushed ore silo feed conveyor.

The grinding circuit is composed of a 186 kW (250 hp) SAG mill and a 336 kW (450 hp) ball mill. The SAG mill runs in open circuit. The ball mill is operated in closed circuit with a cyclone cluster composed of two cyclones. The underflow product from the two cyclones is recirculated to the ball mill, while the overflow is sent to a trash screen.

The trash screen underflow is first thickened and then goes to the leach circuit, composed of four tanks. Each tank is equipped with an agitator. The discharge of the leach circuit flows to the carbonin-pulp (CIP) circuit, which is composed of six agitated tanks. The slurry goes from one tank to the other by gravity. Carbon is pumped counter-current to the slurry. Inter-stage screens help retain carbon to prevent it from flowing with the slurry. Loaded carbon is pumped from the first CIP tank onto a carbon recovery screen, which returns the underflow to the same tank.

Loaded carbon retained on the carbon recovery screen is sent to an elution column. The elution solution is heated using an electric heater. The pregnant strip solution is sent to the electrowinning cell where the leached gold is deposited on cathodes. These are then dried and mixed with flux in a refining furnace and the gold is poured into doré bars.

The barren strip solution is returned to the elution column to begin the cycle again. Barren carbon from the elution column is washed with acid and rinsed. Then the carbon is regenerated in an electric reactivation kiln, quenched, screened and returned to the last carbon-in- pulp tank. Fresh carbon is added as required via the carbon sizing screen.

The slurry from the CIP circuit passes through a carbon safety screen to collect fine carbon particles that may have passed through the inter-stage screens. The underflow is sent to the cyanide destruction reactor while the overflow, which contains fine loaded carbon, is collected in a tote bin. After the cyanide destruction stage, the slurry is pumped to the tailings pond.