The Karouni Gold Project deposits are situated on the west-northwest trending Greenstone Belts of the Palaeoproterozoic Barama-Mazaruni Supergroup interspersed with extensive Granitoid Batholiths also of Trans-Amazonian age. Basement lithologies in the project area are partially obscured by a veneer of Tertiary to Holocene sedimentary cover.

Primary gold mineralisation is exposed at several localities within the Karouni Project, the most notable being the Hicks, Smarts and Larken Zones along the northern extremity of the project. Here the White Sand Formation cover has been removed by erosion to expose the underlying mineralised Palaeoproterozoic greenstone successions of the Trans-Amazonian Barama-Mazaruni Group.

Gold mineralisation within the Karouni Gold Project comprises mesothermal quartz, quartz-carbonate, quartztourmaline structurally controlled lodes, veins, stockworks and breccia zones variously hosted by Mafic to Intermediate Volcanics and Volcanoclastics, Carbonaceous Shales and syntectonic Granitoid Stocks. Gold is commonly accompanied by pyrite and less commonly arsenopyrite, in the latter instance particularly where hosted by Carbonaceous Shales and Phyllites. In essence, the style of mineralisation is entirely consistent with similar gold-bearing Archaean and Palaeoproterozoic greenstone terrains world-wide. Gold workings associated with recent alluvial deposits are notable along virtually all streams and rivers throughout the project area, where the barren White Sand Formation cover has been removed by erosion.

Gold mineralisation at the Hicks Deposit is hosted by a northwest trending, sub-vertical to steeply southwest dipping shear zone some 2,500m in strike length and up to 60m wide in places. The shear has developed within Basalts and Andesites comprising the footwall Greenstone Succession along the north-eastern limb of a shallowly northwest plunging anticline. Auriferous mineralisation is also noted at the contacts of PorphyryGranite intrusives. The shear is comprised of semi-continuous zones of quartz lenses and quartz-carbonate veining or brecciating.

At the Smarts Deposit gold is hosted by a northwest trending, sub-vertical to steeply southwest dipping shear zone 2,800m in strike length and up to 60m wide. The shear zone has developed within Basalts and Andesites comprising the footwall Greenstone Succession along the northeast limb of a shallowly northwest plunging anticline. Auriferous mineralisation is also noted at the contacts of porphyry-granite intrusives. The shear zone is comprised of semi-continuous zones of quartz lenses and quartz-carbonate veining or brecciation.

Mining at Karouni uses conventional open pit mining methods with 50t hydraulic excavators and 40t articulated dump trucks. A total of 189,000t of ore and approximately 4.1Mt of waste have been mined from start up in November 2014 to December 2015. The mine plan includes extraction of ore from three separate deposits, Smarts, Hicks and Larken, by open pit mining, and an underground mine at Smarts. The Smarts deposit is approximately 1km north of the run of mine (“ROM”) stockpile and process plant (Figure 5). Hicks deposit is approximately 3km south of the ROM stockpile; Larken deposit is approximately 2.5km east of the ROM stockpile.

The pits at Smarts and Hicks are made up of a number of staged pits. The underground mine plan is based on a conceptual plan to extract the deeper high grade resources below the Smarts open pits with standard mechanised mining equipment accessed via a decline from the bottom of Smarts 3 pit applying Avoca underground mining methods.

Total open pit ore mined in the LOM schedule is 3.9Mt at a grade of 3.1g/t Au containing 396 thousand ounces (“kozs”) of gold. Underground ore mining is scheduled to commence in 2017 and continue over a four year period with a total of 0.81Mt mined at a grade of 5.0g/t Au containing 131kozs Au. This underground inventory includes Inferred and unclassified resources which comprise approximately 40% of the total scheduled ore.

The mining inventory from both open pit and underground for the LOM totals 4.7Mt at a grade of 4.5g/t Au containing 527kozs; the split of the contained gold is 25% from underground and 75% from open pit mining, of which around two thirds is from open pit reserves.

Auralia Mining Consulting (“Auralia”) carried out the mine planning and scheduling of the open pits at Smarts, Hicks and Larken. Auralia prepared Ore Reserves for Smarts 1, 2, 3 and 4 and Hicks 1, 2 and 3 pits. In the LOM schedule the four Smart pit stages are included together with the mining of Hicks 3 pit. Hicks 1 and 2 have been re-optimised and are now mined together in an enlarged pit referred to as Hicks Cutback. The cutback includes the current Hicks 1 and 2 ore reserves but also incorporates substantial additional resources.

The crushing circuit is based on the use of a Metso C 120 jaw primary crusher followed by a HP 500 secondary cone crusher and a double deck vibrating screen with the screen oversize from both decks being returned to the cone crusher for further crushing. The crushed product will be transferred via a conveyor to a covered mill feed stockpile, which has a live capacity sufficient for 24hr of production. The mill feed will be drawn from the stockpile using an open slot and a belt feeder with variable speed control. There is an emergency mill feed system in place to allow for crusher overhauls and down time. The emergency mill feed system utilises a feed hopper mounted over the mill feed conveyor belt. The mill feed conveyor will have a weightometer to record production and to control the mill feed tonnage rate. Lime slurry will be added to the mill feed chute as required to maintain a high pH (10.5) in the milled ore, which will prevent cyanide losses by volatilisation.

The grinding circuit will consist of a 3.2MW ball mill with the grind size being controlled by a bank of six hydrocyclones of which four will be in use with two on standby. Grinding balls will be added to the mill, manually as required.

The Karouni gold ore processing plant design is based on testwork on a range of ore samples carried out for Troy at several laboratories in Western Australia. The plant was constructed during 2015 and commissioning commenced in October; first gold production occurred on 20 November 2015.

The process includes two-stage crushing of the ore followed by grinding to around 80% finer than 75 microns (“µm”), gravity recovery of coarse gold, dewatering of the ground ore in a thickener, cyanide leaching using the carbon-in-leach (CIL) process, recovery of adsorbed gold from the carbon, electrowinning of the gold from solution, and smelting of electrowinning sludge. Cyanide in CIL tailings is destroyed using the metabisulphite/air process. Design throughput is 1Mtpa.

The mill product will be controlled by the use of hydro-cyclones to produce the desired feed size to the leach circuit. A pre-leach thickener will be used to control leach feed density. Oversize material re ........