Deposit Geology and Mineralisation
Significant mineralization identified on the property occurs within the Hod Maden Fault Zone, which at surface is a broadly north-northeast striking corridor of gossanous and locally argillic/phyllic hydrothermal alteration, up to 300 m wide, that extends for more than seven kilometres. Locally, it has intense pyrite/chalcopyrite mineralization with a significant component of supergene clay alteration.

The deposit is partitioned into a northern Main Zone and the contiguous South Zone, with the third area of mineralization located 500 m further south at the old Russian Mining area.

Main Zone: At least two styles of high-grade gold-copper mineralisation have been identified at the Main Zone:
(i) The predominant multiphase quartz-sulfide (pyrite-chalcopyrite) ± hematite/jasper breccia bodies; and
(ii) Semi-massive to massive sulphides (pyrite-chalcopyrite).

Prior to 1923, small-scale mining by Russian mining interests of narrow, high grade polymetallic veins was undertaken in the now-named old Russian Mining area. Ancient slags have also been intersected in alluvial material overlying the Main Zone. The two primary mineralisation styles are related to different mineralising events, with the semi to massive sulphide mineralisation representing an earlier mineralisation event and the multiphase breccia a later epigenetic (perhaps deep epithermal?) event. The Main Zone deposit is subvertical in nature, and currently has dimensions of around 400 m in length (N-S), 50 - 70 m true thickness, and a down-dip extension in excess of 300 m.

Overall, the highest grade gold-copper mineralisation at Hod Maden (typically >15 g/t Au but locally >100 g/t Au, and 2+% Cu) is aligned along the eastern margin of the Main Zone: this domain of very high grade mineralisation is typically 15+ m thick (true width), is remarkably continuous in both the vertical and from section to section, and currently contains a substantial majority of the in-situ metal content of the Hod Maden deposit. All mineralisation intersected to date at Hod Maden Main Zone is sulphide; no oxide (and only limited supergene enrichment occurs near surface - minor replacement of chalcopyrite by chalcocite), which is interpreted to be a direct result of the high erosion rates experienced in rugged terrains.

Hydrothermal alteration associated with the gold-copper mineralisation at Main Zone is dominated by chlorite, with the flanking wall rocks typically displaying argillic and phyllic alteration assemblages. At vertical depths of 450 m or more below surface, late-stage anhydrite brecciation of the multiphase gold-copper breccias is common and results in the dilution of pre-existing gold-copper grades. Both the form and source of this anhydrite is unclear, with the main possibilities being that it represents a “cap” to a deep, yet undiscovered intrusive phase, or may simply be to fluids circulating within the Hod Maden Fault Zone. Deep drilling will be required to better understand the nature and distribution of this anhydrite.

From a geochemical perspective, the Hod Maden gold-copper mineralisation contains only minor concentrations of Ag and trace concentrations of deleterious elements such as As, Sb, Bi, and Hg. These characteristics will play an important role in future development studies, as metallurgical studies completed to date have shown the amenability of Hod Maden ores to produce high quality flotation concentrates.

The South Zone is hosted dominantly in dacitic volcanic rocks and breccias, and comprises network quartz veins, veinlets, and breccia. Pyrite is the dominant sulphide phase, with relatively minor chalcopyrite. In contrast to the Main Zone, where chlorite is the dominant alteration mineral phase associated with gold-copper mineralisation, sericite dominates in the South Zone. Both hematite and jasper also occur but in significantly lower abundances within the South Zone. Exploration drilling will continue to evaluate the resource potential in the South Zone and will progressively move southwards towards the area of the pre1923 Russian mining activity.

DEPOSIT TYPES
The Project area is prospective for several deposit types. The Hod Maden properties are located in the Eastern Pontides metallogenic province, a tectonic belt comprising part of a volcanic island-arc system. The province is of Jurassic through Miocene age and hosts a great number of base metal deposits. The province extends over an area of more than 500 km east-west and 50 km to 75 km northsouth, and consists of a 2,000 m to 3,000 m thick sequence of volcanic rocks with minor intercalations and lenses of marine sediments which are divided into three stratigraphic cycles. The ratio of economically important base metal deposits changes along the general strike of the province from east (Cu>>Pb+Zn) to west (Pb+Zn>>Cu).

The current view of MARL/Lidya in relation to the genetic model for Hod Maden favors a sub-volcanic hydrothermal model with the bulk of the breccia style mineralization formed between the epithermal and porphyry levels. This is similar to the high-sulfidation epithermal type but lacking significant concentrations of enargite and silver.

The Hod Maden deposit will be mined entirely utilizing underground mining techniques to minimise disturbance on the surface where a mosque and burial ground are located directly above the deposit. The deposit consists of a main and southern area however very little economic mineralisation is currently modelled in the south area.

The underground mine will be divided into two distinct mining zones with a modified drift and fill (DAF) underground mining technique applied to the Poor Ground Zone (PGZ) above 780mRL (Upper Mine) and long hole stoping (LHS) applied to the more competent ground conditions below 780mRL (Lower Mine). The bulk of the mineralisation is located below 780mRL however gold and copper grades are highest above 780mRL and reduce with deposit depth.

The lower mine will be accessed through a single portal north of the deposit with secondary egress, fresh air intake and primary exhaust through vertical shaft development. The upper mine will be accessed through two shafts located north and south of the mineralisation.

The main area extends 450 m vertically from surface over a strike distance of approximately 300 m. For the lower mine level spacing will be 25 m and for the upper mine, DAF levels will be extracted primarily in 3m high increments.

The lower mine will use electric-hydraulic jumbos for excavation and ground support with diesel powered LHD loaders and articulated dump trucks for material handling. Ground support will use fibrecrete extensively. Stopes will be drilled using electric-hydraulic top hammer long hole drills.

The upper mine will utilise excavators and rotary cutters for excavation and frontend loaders, bobcats, LHD’s and shaft gantry cranes for material handling. Fiber-reinforced sprayed concrete will be used extensively for primary support of tunnels.

For the lower mine ore will be trucked to the surface ROM pad located approximately 500 m from the portal in the Maden Valley. Waste will be trucked to a temporary waste dump near the portal from where it will be rehandled to a permanent waste dump through an access tunnel to the Saliçor Valley. For the upper mine ore and waste will be hoisted to the surface via each of the shafts and then rehandled to the ROM pad or temporary waste dump.

From portal construction the mine has an expected life of 15 years, of which there will be 13 years of processing the 8.7 Mt Mineral Reserve.

Mining Method Selection
The deposit, in general, lends itself to underground mining as although it is located close to surface, the surrounding topography is mountainous and generally not well suited to the placement of large waste dumps and stockpiles. Open pit mining was also considered unsuitable due the commitment to minimise disturbance of the mosque and burial ground located directly above the main area of the Hod Maden deposit.

The two main underground mining methods selected for Hod Maden are LHS and DAF.

LHS was selected for the more competent ground conditions in the lower mine due to the flexibility of the mining method and the suitable geometry of the deposit - steeply dipping with moderate width. The DAF mining method is suitable for the poor ground conditions encountered in the upper section of the deposit. The underhand mining method allows high recovery while limiting exposure to poor ground conditions.

Modified Drift and Fill Mining
A modified form of DAF mining is proposed in the PGZ from the base of the overburden to the 780mRL elevation. Civil excavation techniques will be utilised to establish an ACP to support the alluvium and surface features. The ACP will be constructed at shallow depth using soft ground tunnelling methods, with sprayed concrete linings. Subsequent undercut DAF levels will have “subheadings” and “cross subheadings” developed on alternate (perpendicular) orientations in the shadow of the ACP. All drives will be filled with high strength cemented aggregate fill (CAF) backfill to ensure the ability to mine adjacent drives and undercut levels.

Long Hole Stoping
The LHS mining method will be utilsed in the orebody below the 780mRL elevation where the bulk of the mineralisation occurs and will consist of transverse and longitudinal LHS. Transverse LHS will apply in the wider zones (>14 m) and longitudinal in the narrower extremities and south areas of the orebody.

Transverse LHS is a mechanised mining method where the strike of the stope is perpendicular to the strike of the orebody. Ore drill drives are developed from the footwall to the hangingwall from a footwall drive which is subparallel to the orebody.

The transverse LHS will be extracted in a primary/secondary sequence with paste backfill ensuring high recovery of the reserve. The width of the orebody is up to 60 m which enables two stoping panels of approximately 30 m width to be mined sequentially from hangingwall to footwall.

The LHS mining method requires that a proportion of the blasted stope ore be extracted using tele-remote loader operation.

The steady state ore production rate from the Hod Maden underground mine is estimated to be in the range of 700,000 tonnes to 800,000 tonnes per annum. The mine plan in both the upper mine and the lower mine is limited by the extraction sequence, number of concurrent mining areas, activity rates and activity preparation durations. The mine plan averages 780,000 tonnes per annum for the eight years from Y3 to Y10 inclusive with 4 year ramp up and 3 year ramp down periods.

Crushing
The Crushing Circuit will operate at a nominal crushing rate of 120 dry t/h. A ROM pad for storage of ore delivered by mine haul trucks will be established adjacent to the crushing plant feed bin (ROM bin). The ore will be stored in four separate covered stockpiles, and will be reclaimed from the stockpiles by Front End Loader (FEL) for delivery to the ROM Bin. A static grizzly above the ROM Bin screens out oversize ore. The ROM Bin will discharge via a variable speed feeder to the Primary Jaw Crusher. The crushed ROM will be conveyed to the Crushed Ore Bin. Given the Project is an underground mine, it is expected that ground supports and other tramp will regularly find their way to the plant feed, and the circuit will be equipped with a magnet to collect tramp not removed manually on the ROM pad.

Ore Storage and Reclaim
The Coarse Ore Bin will provide a surge capacity of 14 hours at the design milling rate. Crushed ore will be withdrawn from the bin by a variable speed reclaim feeder. The reclaim feeder will discharge onto the Primary Mill Feed Conveyor and conveyed to the Primary Mill.

Primary Grinding and Classification
The 2.4 MW Primary Mill will discharge into the Cyclone Feed Hopper via a trommel screen fitted to the discharge trunnion, and pumped to a cluster of hydrocyclones. Pebbles/scats that may arise will be washed in the trommel and subsequently recycled to the Primary Mill or discarded to a bunker if barren.

The hydrocyclone overflow will gravitate to the Bulk Flotation Trash Screen, whilst the coarse underflow will be recycles to the Primary Mill. The Primary Mill hydrocyclone overflow will be sampled and analysed by a Courier 6G On Stream Analyser (OSA) for multiple elements including iron, copper and gold, and used for metallurgical control of the plant. The particle size distribution of the primary hydrocyclone overflow (bulk rougher flotation feed) will be measured by a particle size analyser (PSA).

The processing plant, will have the capability of treating 800,000 dry tonnes of underground ore per year (dry t/y) of gold bearing copper sulfide material over the life-of-mine (LOM). The plant design will incorporate crushing, grinding, and flotation techniques to maximise the recovery of copper and gold from the ore.

The ore to be processed has been classified into two main categories; Regular Ore and Pyrite Ore. The flowsheet will be reconfigured when processing Pyrite Ore to maximise the recovery of gold.

The Regular Ore flowsheet is summarised as:
- Primary ore crushing of ROM to produce a crusher product size of 80% passing 77 mm;
- Primary milling in closed circuit with hydrocyclones to produce an 80% passing 106 µm grind size;
- Bulk flotation of the primary ground material to generate a bulk concentrate. The bulk concentrate will be directed to the Regrind Circuit. The bulk flotation tails will be directed to the Secondary Grinding Circui ........