The Mangazeisky Property contains two main deposit types: epigenetic polymetallic silver-lead-zinc veins (metasediment hosted), and porphyry (copper, gold, silver). The majority of the exploration, and the existing resources, are focused upon the polymetallic silver-leadzinc veins. The veins are sulphide-rich, containing sphalerite, galena, silver, and sulphosalt minerals in a carbonate and quartz gangue.

The Property contains several explored areas that host more than 100 occurrences of mineralisation. The mineral occurrences are concentrated within a 35-km long corridor. These main mineralised areas include: Yasny, Burny, Mukhalkansky, Zabyty, Zabyty-2, Mangazeisky, Strezhevoy, Vertikalny, Porfirovy-Borisovsky, Vostochny, Nizhny Endybal (NizhneEndybal), VerkhneEndybal, Jilny, Bezymyanny, Orogondia and Kis-Kue.

The mineralization of Mangazeisky North is mainly associated with banded brecciated textures. The following minerals are present: Native silver, acanthite, stephanite, polybasite, canfieldite, pyrargyrite, miargyrite, diaphorite, tetrahedrite, owyheeite, freieslebenite, boulangerite, arsenopyrite, sphalerite, pyrite, galena and chalcopyrite. The veins are strata-bound, occurring on contacts between strata, particularly around sandstone units, and tend to be dilated towards the hinge of the local fold structure. It is noted that the strongest silver mineralisation occurs within the central core of the veins, this also correlates with the zones of strongest oxidation.

The Vertikalny vein has been traced on surface for 5.1 km. The under-explored southeast portion, identified in 1990 by Yangeologia, possibly extends to the Endybal River valley. To the northeast, along the areas where oxide material is identified, the vein swells from 3 to 15 m. Further northeast, the zone splits into two. The eastern branch, which is obscured by a siltstone bed, was traced by individual grab samples in erosional windows. The mineralisation occurs as sandstone breccias with quartz or siderite cement, abundant hydrous ferric oxides that results from the oxidation of sphalerite and galena.

The Zabyty occurrence was discovered in 1934 and further explored in 1992 to 1994. Mineral occurrences are concentrated on the walls and in the watershed of the Fedor-Yuryage River. Mineralisation occurs as a structurally disturbed zone that intersects stratigraphy under a gravelite layer in the same stratigraphic level as the Strezhevoy mineralised body. The total width of the steeply dipping zone is 50 to 60 m (up to 2 km), striking at 315 to 340º. A single trench, developed by JSC Yangeologia in 1991, returned 1,906.5 g/t silver, 59.3% lead and 1.85% zinc from sandstone breccia cemented with sulphides.

units. The sediments above the stocks contain veinlets of sphalerite. The stock itself hosts quartz-galena-chalcopyrite veinlets, brecciated intermediate dykes, brecciated sandstone with argentiferous healed with galena-quartz cements, oxidised intrusive with disseminated sulphides. In most cases the stock is obscured by the overlying sediments.

Based on data by V.V. Shoshin (Nekrasov. et al. 1997) mineralisation at Orogondia is connected with a near conformable mineralised zone of shearing with a strike of 325 to 345° that can be traced for up to 4 km. Most of the mineralisation reports on the surface of medium-grained sandstones as sulphide-quartz-siderite veinlets, of 0.5 to 2 m wide (average thickness is 0.8 m).

This zone is a complex vein system of approximately 600 m in length with a thickness of up to 5 m, but averaging approximately 0.9 m. The thickness of the individual veins within the larger vein system varies from 10 to 20 cm. In addition, parallel mineral zones are associated with the main deposit. The average grade of silver of the zone is 2,652 g/t. The mineralised veins are situated within medium and coarsegrained sandstones and siltstones, overlying a lower conglomerate unit. A significant amount of a black organic substance (shungite) is present in the cement, binding the particles of the sedimentary units together. In the areas where there has been hydrothermal reworking of the sandstones, shungite forms lenses and flakes in association with coarse-crystalline drusy quartz. The underlying layers of sandstone contain disseminated silver mineralisation and are within the same stratigraphy as the Nizhny Endybal deposit.

The Mukhalkansky mineralisation is represented by two galena bearing veins. The first vein, which cross-cuts the stratigraphy has been traced for 800 m and has an average width of 0.2 m and contains an average silver content of 1,295.4 g/t. The vein is confined to a tectonic fault that was accompanied by brecciation of the enclosing rocks during its formation. The vein is orientated parallel to the Nuektaminsky fault and is believed to be its mineralisation supplying fragment. The second vein is a concordant vein in its mode of occurrence and is confined to a stratum of thin layer sandstones. The second vein branch can be traced for approximately 500 m and has a width of between 0.2 and 0.4 m. The average silver content of the second vein is 2,328.7 g/t.

The Bezymyanny mineralisation is composed of several zones confined to inter-stratal ruptures. The mineral veins are located along the contacts of medium-grained and fine-grained sandstone strata. Veins are traced for 500 m with a thickness ranging from between 2 to 5 cm and 34 to 40 cm. The mineralisation content varies from 756 to 24,433 g/t silver, 0.4 to 1.5 g/t gold, 0.1 to 7.81% lead and 0.1 to 0.8% zinc.

The Nizhny Endybal deposit has been known since 1774 under the name “Kokovin Silver Mine”. The style of the mineralisation at Nizhny Endybal takes the form of a stockwork style network of thin veins, as illustrated in Figure 7.7. Concentrations of the stockwork are accumulated into lens shaped bodies as shown in Figure 7.8. The mineralisation is associated with siderite veins, which are principally parallel or subparallel to bedding. However, occasional sub-vertical veins are present, which crosscut the bedding planes. The veins are predominantly 1 to 2 cm in thickness, but occasionally up to 10 to 15 cm. The thicker veins include veinlets of fahlore and vugs filled with fahlore crystals. Galena may also be present as separate veins, but the silver mineralisation does not appear to be directly related to the presence of galena.

The watershed of the Sirelendge-Fedor and Yuryage rivers is prospective for silver mineralisation. Several grab samples selected from among frost heave, characterise disseminated and vein-like mineralisation in altered sandstones.

Mineralisation in the Porfirovy area is associated with quartz, quartz-carbonate and quartz-sulphide veins and veinlets hosted by rhyolite and dacite porphyry. The copper and gold potential of the area has only recently been recognised and the copper-silver soil geochemical results indicate an anomalous area that corresponds with the intrusive complex. Locally the rhyolite has been silicified and the feldspars exhibit argillic alteration.

A conventional mining method operation consisting of drill and blast, load and haul is planned for the open pit. The mining operation will be carried out as an owner operated whilst the blasting operation will be carried out using a blasting contractor until an owner blasting crew is employed during the mine operation.

The deposit is approximately 1 km in length and ranges in width between 0.5 to 8.0 m. This geometry will require selective mining, accurate grade control and relatively smaller load-and-haul equipment to minimise the mining dilution and losses.

Drilling and blasting is planned in 10-m benches, with a blasthole diameter of 76 mm. Loading will be carried out in four, 2.5-m stacks or three, 3.3-m intervals using backhoe excavators. Twenty-tonne trucks were selected for waste and ore haulage. Following test blasts during pre-production, the option of blasting on 5 m will be investigated. Tetra Tech believes that this will not materially change the operating cost estimate and may have advantages for grade control. Double benching on the final pit wall could also be considered.

An analysis of the mining methods available to exploit a narrow vane, steeply dipping ore body such as the Vertikalny deposit identified two main contenders, namely sublevel open stoping and shrinkage stoping. Tetra Tech selected sub-level open stoping as it offers the most favourable outcome in the three key areas of safety, cost, and dilution.

Numerous underground stope optimisation runs were performed using Datamine MSO software to develop stope shapes for various minimum mining widths and vertical level spacings. The MSO analyses concluded that a 25-m vertical-level spacing, with a top and bottom ore drive yielding an effective 22-m vertical stope drilling height, is appropriate for the Vertikalny deposit. The high- grade mineralisation envelopes were modelled with surrounding lower grade mineralisation and, when targeting stope shapes within higher grade mineralisation, it is possible to have portions of the low-grade mineralisation as part of the planned mining dilution.

Mining loss factors were applied to simulate the possible blockages that could occur with very narrow planned stopes. Accurate small diameter blasthole drilling, together with an adequate powder factor and accurate blast initiation, should mitigate the risks of stope blockages.

The process flowsheet consists of a standard crushing and milling circuit, followed by gravity concentration and agitated tank leach of the gravity tails. The gravity concentrates will be processed by intensive cyanidation. The leached slurry from the tank leach and intensive cyanidation will go through a simple counter current decantation washing system and the solution will be processed by direct electrowinning to recover silver metal.

A standard crushing and milling circuit will be employed to produce a suitable feed for gravity concentration and cyanide leaching at a size of typically 80% minus 75 µm. The gravity concentrate will be leached in an Intensive Leach Reactor (ILR), such as an ACACIA reactor in order to dissolve the high-grade silver from the gravity concentrate with cyanide. The resultant silver-bearing solution from the ILR will then be pumped directly to the dewatering circuit prior to the direct electrowinning process.

The gravity tailings will ........