Gold mineralization occurs in veins associated with multiple faulting and folding events in the Coeur d’Alene Mining District. The mineralization occurs as gold- quartz veins associated with an orogenic deposit type. The orogenic system at the Golden Chest appears to have an association with igneous rock activity. Hence, the vein deposits may be described as intrusion-related orogenic gold. The principal vein being exploited at the Golden Chest Mine is associated with the Idaho Fault, which juxtaposes the quartzites of the upper Prichard Formation against finer-grained argillites, also of the upper Prichard Formation.

Veins occur adjacent to the Idaho Fault both in its footwall, and in its hangingwall. The mineralization occurs in two types of quartz veins, banded and massive. These veins are generally conformable to bedding in the Proterozoic age Prichard Formation. The banded veins, which occur primarily in argillite, contain, pyrite, arsenopyrite, galena, sphalerite and visible gold. Thicker, massive veins occur in quartzite and contain pyrite, galena, chalcopyrite, sphalerite, scheelite and visible gold.

The Company’s core drilling rig was restarted in the fourth quarter of 2020 with drilling on the north end of the property in the Katie-Dora area. This hole intercepted three narrow quartz veins with an average true thickness of 20 centimeters with gold grades ranging from 10 to 75 gpt gold.

Golden Chest includes both open-pit and underground operations.

Underhand drift and fill is the mining method and cemented rock fill (CRF) utilizing waste rock mixed with cement slurry is used for backfill. A total of 1,828 cubic meters of backfill were placed during the year and 75 meters of development were completed as well. The company added a second 2-cubic meter LHD and a second drill jumbo in the third quarter. A second mining crew was added in the third quarter to complement the added equipment and increase the mining rate in the stopes and begin the downward development of the Main Access Ramp (MAR) to lower ore reserves. A wireless communication system was also installed at the mine which will resulted in increased operational efficiency and safety.

In 2020, NJMC continued its open pit mining operation which commenced in August of 2016. Mining advanced from the 1059 bench to the 1032 bench. Ore tonnes and grade in the Klondike Pit were lower than expected because of historic stopes in the Klondike where high grade material had been mined out by the old-timers. These stopes were unmapped so therefore unexpected.

The New Jersey Mill is a fully-permitted, 360-tonne per day, flotation mill and concentrate leach plant (“CLP”) located two miles east of Kellogg, Idaho, in the Coeur d'Alene Mining District.

In October 2016, the Company resumed operations at the New Jersey Mill, processing ore extracted from open and underground of the Golden Chest.

NJMC is the JV manager and retains a 65% interest in JV assets as well as the right to process its own ore at the rate of 3,000 tonnes per month and to allocate unused and excess capacity in its role as manager. The property covered by the JV agreement includes the crushing circuit, grinding circuit, gravity circuit, flotation circuit, CLP, buildings and surface rights only over the patented mill site claim. Unpatented mill site claims are also part of the JV.

The gravity circuit is comprised of a vibrating screen and a Knelson Concentrator and will be used to process a portion of the recirculating load in the grinding circ ........