Gold mineralisation at Salave is related to hydrothermal alteration of the host granodiorite. The highest gold grades are associated with intense albite-sericite alteration with fine- grained arsenopyrite, commonly disseminated as fine needles, pyrite and stibnite. Destruction of the original texture is a major feature of the most intensively altered and mineralised granodiorite. Quartz veins, and quartz-carbonate molybdenite-bearing veins present in the deposit do not contain gold and represent a separate mineralising event.

BDG consider the Salave deposit to be an intrusive related gold deposit with similarities to other intrusions related gold deposit models including Fort Knox, Pogo and Donlin Creek in Alaska and Telfer and Boddington in Western Australia.

The Salave gold deposit is hosted mainly by the strongly altered Salave granodiorite at its western boundary, close to the contact with the Los Cabos sedimentary sequence.

Most of the gold mineralisation has been delineated within an area 400 m wide, 500 m long and 350 m deep. Gold mineralisation occurs in a series of stacked, north to northwest trending, shallowly southwest dipping irregular lenses related to faults and fracture zones that are parallel to the contact of the intrusive and metasedimentary rocks. The faults and fracture zones appear to be related to one or more vertical structures some of which contain high-grade gold mineralisation. These structures may play an important role as conduits and opening shallow dipping structures with subsequent deposition of hydrothermal solutions, particularly at the contact with the metasediments.

Previous explorers noted that the attitude of the sheeted alteration-mineralisation zones mirrors that of the overlying metasedimentary rocks. In places, these lenses may be sub-horizontal. The dimensions of the individual mineralised zones range from 50 m to 300 m in length, 10 m to 150 m in width, and 5 m to 60 m in thickness, with an average thickness in the order of 20 m. Narrow zones of gold mineralisation are also present within the Los Cabos metasedimentary rocks, possibly reflecting later reactivation and leakage.

Given environmental and community considerations, the PEA has only evaluated underground mining operations. The primary mining method selected for detailed analysis in this study was the vertical retreat mining (“VRM”). Sub-level stoping was considered as a secondary method applicable to specific vertical thin geometries (<15m length). Rock and paste fill will be used as backfill to maximise mining recovery.

The mine design was based on basic economic assumptions to create mineable stope outlines. A value of 2 g/t was assumed as mine cut-off grade. Mining dilution and mineralised material loss factors were also applied to each mining shape to reflect the selected mining method.

The mine production rate targets a 0.70 Mtpa of RoM. A conceptual mine layout was designed including stopes and development with 60m levels and 3 x 20m sub-levels. The total mineralised material from stopes, drives and sill pillar recovery (50%) will total 9.2Mt at 3.87 g/t Au.

In order to minimise potential social and environmental issues, processing of Salave mineralised material has been limited to crushing, grinding and flotation, with concentrates exported via local ports. Mine feed will be crushed on surface at a rate of 0.7 Mtpa, and then be processed via conventional SAG and ball milling followed by sulphide flotation and thickening.

The run-of-mine will feed a primary jaw crusher with a capacity of 400 t/h with a physical availability of 70% with design factor of 20%.

From an intermediate stockpile, the coarse material will feed the mill circuit which consists of a conventional SAG and ball mill configuration working in close circuit with the cyclones.

The flotation circuit consists of a number of cells of 300-400 m3 capacity (9-10 cells of 40 m3 each) with two conditioning tanks for pH stabilisation and reagents.

The final stage consists of tailings thickening to minimise the fresh water consumption, and to recycle process water. A ‘paste’ thickener will achieve a product of 70-75% of solids.

Based on flotation test work conducted to date, it is assumed that 97% of the gold head grade will be recovered in the flotation concentrate that will be thickened, filtered and bagged for shipping to customers.