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

HAMMERDOWN-RUMBULLION-MUDDY SHAG VEIN SYSTEM
The Hammerdown-Rumbullion-Muddy Shag vein system consists of a series of stacked gold vein zones hosted within a 250 m long section of an 1,800 m long shear zone informally labelled the Hammerdown Deformation Zone. The vein system is now considered to be a single deposit however, historical definition drilling has identified internal faults that have served to segregate the veins into several mineralized domains.

Geologically, the Hammerdown deposit is situated close to the contact of a Lower Ordovician mafic sequence of ophiolitic origin with an overlying felsic island arc sequence. The contact area was uplifted, folded and intensely sheared, then invaded by early Silurian quartz feldspar porphyry dykes, which were closely followed by the gold-bearing quartz-sulphide veins.

The gold-bearing veins throughout the mineralized system consist essentially of vein quartz with 5% to 20% pyrite occurring as massive stringers and dense disseminations. Base metal sulphides total about 1%, with zinc content equaling combined copper and lead values. Minor bismuth occurs as native metal as well as the sulphosalt hammarite.

Gold is intimately associated with all sulphide phases, occurring as discrete grains within sulphides, at sulphide grain boundaries and, occasionally in quartz fractures near sulphide grains. There is a direct relationship between sulphide content and gold grade in veins. The gold is always fine grained, with 80% being of grain size less than 20 µm. The largest grain size is slightly over 100 µm along the long axis; relatively little visual gold occurs in the deposit.

In addition to quartz, gangue minerals include chlorite and carbonate (calcite and ankerite) with minor rutile. Hydrothermal alteration of mafic wall rocks consists mainly of muscovite/sericite and calcite, with minor rutile, creating a light bleaching halo usually similar in thickness to the gold-bearing vein.

HAMMERDOWN GOLD VEINS
At Hammerdown, the more robust main veins are located along the north and south contacts of a fairly continuous, sill-like felsic porphyry body intruding the sheared mafic volcanic host. The veins dip predominantly to the north although at depth they rotate to a steep southerly dip due to drag folding has they near the Captain Nemo Fault. The veins also appear to plunge to the west but high-grade shoots within the plane of the vein plunge steeply to the east. These larger veins were the target for the 2000 to 2004 cut and fill mining phase by Richmont and have therefore been predominantly mined out, however the updated wireframes in this report have determined that some of the veins remain at the peripheral edges of the historical mining, probably due to the higher cut-off grade used at the time in defining mining blocks.

The Hammerdown hanging wall veins to the main veins mostly occur in less deformed mafic volcanics with a minor iron formation component and leucoxene-bearing mafic dykes. Felsic porphyry sills are present but smaller and do not seem to influence the location of the veins like the larger QFP associated with the larger main veins. The hanging wall veins generally do not have the same depth extension as the larger vein system therefore they do not reach the Captain Nemo Fault. They do exhibit merging and/or bifurcation both along strike and vertically. Dips progressively shallow from south to north but are still quite steep (80°). High-grade shoots within individual veins have steep easterly plunges.

The footwall veins to the main veins are hosted by strongly sheared mafic and felsic volcanics and volcaniclastics intruded by felsic porphyry sills. As with the Main Zone, the porphyries play a significant role in localizing the veining, with the strongest veins occurring along the southern contact of the sills. Dips are near vertical and all footwall veins are truncated by the Captain Nemo Fault.

In addition to the gold rich quartz/sulphide veins described above the 2018 and 2019 infill, diamond drilling intersected a lower-grade mineralized unit that is located in the footwall near the intersection of the Captain Nemo Fault and the Rumbullion Fault (Figures 7.4 and 7.5). The unit, described as a sheared felsic volcanic, is intensely altered with disseminated pyrite and localized minor base metals along with sections of pervasive sericite and/or silica. The unit has a characteristic schistose fabric and it is unclear at this point if the mineralization is stratigraphically or structurally controlled. The unit returned gold assay grades up to 3.54 g/t gold over 2.63 m (see Maritime Press releases June 4, 2018 and July 11, 2019).

ORION VEIN SYSTEM
The Orion gold deposit is hosted by strongly deformed metavolcanics and metasedimentary units of the Ordovician Catchers Pond Group. Near surface this assemblage is overturned, topping to the northwest but dipping steeply to the southeast, though there appears to be a flexure that warps the stratigraphy to near vertical to steeply northwest at depth. This flexure has a moderate north-easterly plunge of 30° to 40°. A major fault zone (Horsehead Fault) has thrust the Catchers Pond Group assemblage over younger, less deformed and possibly sub-aerial volcanics of the Shoal Pond Group (informal name) correlative with the Silurian age Springdale Group (Moore et al., 2002). This northerly striking fault dips 50° to the east and terminates the Orion Gold zones to the west. As the fault trends oblique to the N50E strike of the Orion vein system, the base of the gold zones plunges about 40° to the northeast. Recent drilling has encountered high-grade gold in the veins close to the fault, indicating a possible structural relationship of high-grade gold with the plunge of the Horsehead Fault.

The Discovery Zone, as the name suggests, was the first to be discovered at the Orion deposit. The zone is situated near the transition from the “mixed” mafic-felsic schist. This vein zone consists of single to multiple less than 1 to 30 cm quartz-calcite veins (mainly 2 to 5 cm) with 1 to 3% pyrite (locally to 10%) and minor amounts of light-coloured sphalerite and chalcopyrite. One vein contained 50 occurrences of visible gold, but otherwise visible gold is generally rare. The hosting schists often have a distinct yellow ochre sericite developed adjacent to the veining. Silicification is also common.

Geochemically, the zone has twice the zinc and copper content compared to the Orion Main Zone but similar, though very low, amounts of silver and lead.

The Main Zone is situated within the felsic schist generally 10 to 30 m northwest of the Discovery Zone. Like the Discovery Zone, it can be traced along strike for 950 m.

The Main Zone consists of multiple 0.5 to 15 cm quartz-calcite veins (mainly 1 to 3 cm) and strong patchy silicification with 5% to 10% disseminated pyrite (up to 25%) with minor, though locally abundant chalcopyrite and sphalerite. Visible gold was observed in two drillholes. The host schists are strongly sericitic, silicified, and locally display salmon-coloured bleaching.

The EMS Zone is the smallest of the three significant zones at the Orion deposit.

The Project has a previously-mined open pit and underground mine on site. Current metal pricing, coupled with greater understanding of the deposits and improved sorting technology, is providing the opportunity to evaluate a restart scenario at the Project.

Both the Hammerdown and Orion deposits within the Project are amenable to initial open pit mining followed by underground extraction in AGP’s opinion.

The Hammerdown open pit has the highest contained value and is mined first in the sequence followed by Orion. The mining of the open pits also prepares the way for the underground mining at both of the deposits. In the case of Orion, the underground mining covers a period of seven years. Hammerdown’s underground is only over a three-year period with reduced tonnage but significantly higher grade than Orion. It works around the older workings to develop new zones previously unexploited.

Hammerdown contains 1.9 Mt of sorter feed grading 4.23 g/t gold in the open pit design and 0.2 Mt of sorter feed grading 7.58 g/t gold in the underground mine beneath the pit. The total waste rock to mine at Hammerdown is 28.8 Mt for an open pit strip ratio of 15.3:1 (waste: sorter feed).

The Orion deposit holds 0.6 Mt grading 2.38 g/t gold in the open pit and 1.7 Mt grading 3.86 g/t in the accompanying underground mine. Waste moved in the Orion open pit is 4.9 Mt for a strip ratio of 8.4:1 (waste: sorter feed).

The open pit mineral resource cut-offs were 1.0 g/t and the underground mineral resource cut-off were 2.4 g/t. The underground designs used a 2.5 g/t gold cut-off at Orion and a 3.0 g/t gold cut-off at Hammerdown. The higher underground cut-off at Hammerdown was due to rockfill required in some of the stopes to facilitate feed extraction of the higher-grade material.

The feed to the plant has been diluted. The open pit calculation is based on a 0.4 m dilution skin on contacting blocks. The result of the dilution calculation was an 85% increase in sorter feed tonnage and a 46% lower feed grade for Hammerdown. In the Orion open pit, the dilution increased the sorter feed tonnage by 72% and resulted in a 46% grade reduction. Underground dilution was estimated at 61% for Hammerdown and 50% for Orion.

The production schedule is designed to provide 700 tpd of feed to the Nugget Pond mill over an 8.5-year operating mine life after 1 year of pre-production stripping. The pits are sequenced to minimize initial stripping and provide higher feed grades in the early years of the mine life. This is accomplished with stockpiling of lower-grade material. A total of 4.42 Mt of feed will be sent to the sorter with an average grade of 4.00 g/t. This will yield 2.14 Mt of mill feed grading 7.81 g/t that will be trucked to the Nugget Pond mill. Rejects from the sorting plant will be stored in the waste dump.

Waste material totals 33.7 million tonnes plus the additional 2.3 million tonnes of reject from the sorting plant for a total of 36.0 million tonnes. This is placed in the waste dump. The strip ratio of the open pit material is 13.7:1 (waste:feed) not counting the rejects.

The open pits are built on 5 m benches with safety berm placement every 20 m. Minimum mining widths of 35-40 m were maintained in the design. Ramps are designed at a 10% gradient and vary in width from 15.6 m (single lane width) to 20.4 m (double lane width). They have been designed for 46t haulage trucks.

Longhole stoping was selected as the preferred mining method due to the fair/good orebody and country rock ground conditions, the dip and thickness of the deposit, and relatively shallow depths and attendant low to moderate stress conditions.

The regular, steep dipping geometry of the veins indicates a longhole stoping method to be appropriate at both Hammerdown and Orion deposits. The width of the economic veins typically varies from less than 1 m to around 10 m. At Hammerdown, average true thickness is 2.0 m and at Orion, average vein true thickness is 2.5 m, with some pinching and swelling exhibited at both deposits.

The Mineral Resource grades are lower at Orion. A vertical sub-level interval of 16 m was planned to allow for an unrecoverable sill pillar, with a height equivalent to 0.75 of the vein thickness or a minimum of 2.0 m, whichever is the greater, to be located immediately below each mining level. This sub-level interval was selected to reflect the narrowness of the stopes. The minimum stope width was planned to be 1.2 m. Stopes were planned to be 25 m measured along strike, separated by an unrecoverable rib pillar 2.5 m thick. Up-hole drilling will be employed from the lower stope drive with holes extending to the base of the sill pillar. The stopes will not be backfilled after extraction, support being provided by the rib and sill pillars together with regional pillars. This style of blind up-hole longhole stoping allows stoping to commence at the top of the deposit and extend downwards, retreating from the orebody extents towards a central stope access location on each mining level.

The Mineral Resource grades are higher at Hammerdown than at Orion. For this reason, stope sill pillars will be minimized through the use of uncemented rockfill in most stopes. Blind up-hole retreat stoping will only be used at Hammerdown when access to the upper level is not possible, typically due to the lack of access in and around historic workings in the immediate area. The vertical sub-level interval was reduced to 14 m due to the elimination of the majority of the stope sill pillars. As a result of the narrower stopes at Hammerdown, a smaller 2.0 m wide rib pillar will separate adjacent 25 m long stopes. In most cases, stopes will be taken full height to the upper sub-level. Either up-hole or down-hole stope drilling can be employed. After completion, the stope will be backfilled using uncemented rockfill. The minimum stope width was planned to be 1.2 m. This style of longhole stoping requires stoping to commence at the bottom of the deposit (or vein) and extend upwards. The rock filled stope will provide the working floor for the next stope above.

Mining for both the open pit and underground will be completed by local contractors. Smaller equipment will be used in both areas. The open pit will be mined with 41t articulated trucks and Cat 390 class excavators. The underground fleet will include one boom jumbos, and 1.0 to 6.5t LHDs. A longhole drill will also be part of the mining equipment.

The waste dump will be located between the Orion and Hammerdown pits. It will store material from both open pits and excess rock from the underground operations. A total volume of 16.4 Mm3 has been designed and it is sufficient for the mine needs.

RUN-OF-MINE PRE-CONCENTRATION (SORTING)
The sorting plant will include:
— Contractor operated crushing and screening circuit;
— Screen undersize (fines) conveyor bypass to load-out facility;
— Sorting.
— Due to the varying levels of dilution accompanying the mineralization, the contractor crushing plant will be designed to facilitate a throughput of 1,400 t/d with average life-of-mine (LOM) feed grade of approximately 4.0 g/t Au. Both the crushing and sorting circuits will operate at an availability of 70%, which results in a nominal plant throughput of 54 t/h, with a capacity up to 83 t/h to process lower-grade material at a higher rate.

The recovery method will consist of the following unit operations:
— Primary Crushing – A vibrating grizzly feeder and jaw crusher in open circuit, producing a final product P80 of approximately 57 mm.
— Secondary Crushing – Single-stage cone crusher in closed circuit with a primary single deck vibrating screen, producing a final product P80 of approximately 30 mm.
— Screening – A primary screen in closed circuit with the secondary crusher followed by a secondary screen that will receive the primary screen undersize to screen out the fines, (this may also be achieved by a single double-deck screen and will be under the contractor’s purvey).
— Sorting – Two sorting machines in series acting as a rougher and scavenger will produce both waste material and product.
— Crushed Material Stockpile – Two stockpiles will be produced from the sorting facility: one for product being conveyed to a load-out facility and trucked for further processing, and the other re-handled to either the waste rock or low-grade stockpiles.

CRUSHING
Material will be delivered from the mine to feed the crushing plant that consists of two stages of crushing. The plant will process 54-83 t/h of material and produce a final product P80 of approximately 50 mm. The sorting circuit will reject approximately 60% of the sorter feed material while maintaining gold recovery of 90-94%. With a recombining of the screen undersize fines, the overall gold recovery is expected to range between 93.0-95.8% at an average of 94.6% with 25-36 t/h of concentrate product produced.

PRIMARY CRUSHING
Material will be stockpiled near the jaw crusher on the ROM pad and fed by a Front-End Loader (FEL) through a 500 mm aperture static grizzly into a feed hopper. Oversize material from the static grizzly will be removed for later size reduction.

A vibrating grizzly feeder will draw material from the feed hopper at a rate of 54-83 t/h. The vibrating grizzly oversized material will feed directly into a jaw crusher with an installed power of approximately 90 kW. The primary crushing stage will produce a product P80 of approximately 57 mm at a crusher closed side setting (CSS) of 90 mm.

The screen feed conveyor will collect crushed product from both stages of crushing and feed a primary 2,438 mm x 6,096 mm (8’ x 20’) vibrating screen. The screen will have an aperture size of 50 mm and the oversize material will be conveyed to the secondary crusher for further size reduction. The -50 mm final product will discharge onto a conveyor that feeds the secondary screen.

SECONDARY SCREENING
Primary screen undersize will be conveyed to the secondary 2,438 mm x 6,096 mm (8’ x 20’) vibrating screen. The screen will have an aperture size of 12.7 mm, with the oversize material feeding the sorting machines and the undersize or fines, P80 of approximately 9.7 mm, being conveyed directly through the sorting facility to the concentrate product stockpile. The fines conveyor passes through the sorting facility and is loaded with sorting product from the machines for conveyance to the load out facility.

NUGGET POND MILL
CRUSHING, STORAGE, AND GRINDING
[This area will be fitted with new equipment items]
Mineralized material will be crushed to a nominal 80% -2 inches at the mine site as part of the sorting process. Low-grade material will be rejected by the sorter, and the upgraded product will be transported by road to the Nugget Pond facility. Upon arrival, trucks will be weighed, then contents will be dumped before being crushed to 100% -1/2” using a new portable crushing unit.

Crushed rock will be transported by conveyor to a small (600 tonne) covered storage stockpile that will provide almost 24 hours of surge capacity ahead of the new grinding circuit. Material will be pulled from the stockpile in a controlled fashion (variable speed feeder), and transported to the new mill by a conveyor.

A new 700 kW ball mill and classification circuit will be installed within an extension to the south side of the existing hydromet building. Crushed material from the Project will be fed to this new mill by conveyor, whereupon it will be ground to the required 80% -58 µm in preparation for cyanidation.

The new grinding circuit will consist of a ball mill in closed circuit with hydrocyclones. Cyclone underflow slurry will gravitate back to the mill feed spout for combination with fresh feed, whilst the cyclone overflow slurry will gravitate to the existing trash screen for removal of any tramp material. Trash screen undersize slurry will gravitate towards the leaching circuit for further processing.

Mill feed rate will be controlled at approximately 30 tonnes per hour.

A two-stage processing approach is anticipated for the Project:
1. Mined material mine will be pre-concentrated at the mine site using modern particle sorting technology to reduce the daily throughput rate from 1,400 tpd to approximately 700 tpd (i.e. the sorting process will reject roughly 50% of the mined mass as a low gold grade, low sulphide waste stream.

2. The on-site sorting plant “concentrate” will be transported by road to an existing gold mill, located approximately 140-km away on the Baie Verte Peninsula. The plant utilizes established Carbon in Pulp (CIP) technology to recover the gold into a doré product for sale.

RUN-OF-MINE PRE-CONCENTRATION (SORTING)
The sorting plant will include:
— Contractor operated crushing and screening circuit;
— Screen undersize (fines) conveyor bypass to load-out facility;
— Sorting.
— Due to the varying levels of dilution accompanying the mineralization, the contractor crushing plant will ........