The CSH217 deposit is a large bulk tonnage low grade style of gold mineralization hosted within a ductilebrittle shear zone in Proterozoic sediments. Earlier property work and recent drilling data suggest that the gold mineralization was emplaced along the major southwesterly trending ductile-brittle shear zone. The ductile-brittle shear zone, which crosscuts the original bedding structure at about 10º, controlled the mineralization.

The shear zone is parallel to the foliation of the regional metamorphism, which is also parallel to the synclinal fold axis and deformation style typical of many greenstone and slate-belt terranes. Folding continued beyond the point of rupture, with the strain taken up in the developing shear zone. The quartzsulphide veinlets are boudinaged within the foliation and were clearly deposited early in the deformational history and are perhaps related to basin dewatering during regional folding, typical of “Slate Belt” gold districts.

The host rocks to the gold mineralization on the CSH217 property are mainly carbonaceous phyllite, schist, and slate within the lower members of the Bilute Formation.

The gold mineralization is composed of thin (1 to 10 mm) sulphide and quartz-sulphide seams/veinlets, stringers, and boudinaged lenses, which are concordant with the bedding and foliation and trend along the shear zone. Much quartz vein material has been logged in the drill holes associated with the higher grade gold sections. Most of these “veins” are probably derived from remobilization of siliceous exhalative layers in the hydrothermal process, perhaps related to basin dewatering during regional deformation and metamorphism. The higher-grade gold zones are parallel or sub-parallel the regional metamorphic foliation texture. In most cross-sections connecting of the higher-grade intervals shows relatively consistent dip angles of the mineralization zones ranging from 82-85o in the Northeast Zone, and 87-89o and dipping opposite in the Southwest Zone.

The principal type of mineralization is native gold occurring directly with the sulphides in the seams and in association with the quartz “vein” material. Mineralogical work by SGS Lakefield in Canada on composite weathered and fresh mineralization samples found 77% of gold was free in the sulphide composite and 100% of the gold was free in the weathered sample (SGS Lakefield Research Limited, January 22, 2003). Pyrite and phyrrotite are the most abundant sulphides with their total content generally ranging between 1 and 2 percent. The mineragraphic investigations by Jinshan identified the “pyrite” as melnikovite pyrite or zwischen-product, a disequilibrium mixture of pyrite, iron oxides, secondary magnetite commonly intergrown with marcasite that can be distinctively aligned in lamellar fashion. This texture was shown to develop along the 0001 cleavage of adjacent pyrrhotite.

The quartz vein and sulphide seam contacts are all knife sharp with no alteration selvage in the host rocks. The hydrothermal alterations of the host rocks are rather weak, with only chlorite and silica alterations noticed in the drill logs. The host sediments are moderately to strongly metamorphosed to phyllite and schist with abundant sericite. Andalusite crystals up to 3 cm in length are prominently developed in the schists. The andalusite schist interface is parallel to original bedding. Development of andalusite is likely to be related to original alumina content and regional metamorphism. In the Northeast Zone a major andalusite schist unit with intercalated slate-phyllite layers occurs in the footwall side, and about onefourth of the gold mineralization hosted in this unit. In the Southwest Zone, about one-third of the gold mineralization is within the andalusite schist, which occurs in the hangingwall side only.

Surface work and diamond drilling has tested the mineralized zone and stratigraphy over a continuous strike length of 4.8 kilometers trending southwesterly across the CSH217 property with drilling to a maximum vertical depth of 260 metres. The mineralized sections are variable in width achieving a maximum width of 150 metres in the eastern part of the property.

The open pit Mining takes place on 6 m benches using percussion drills, excavators, wheel loaders, and offroad trucks of the 40 t class that are currently being increased to 100 t class trucks.

The Northeast pit will be mined in 4 phases as shown in the bench plan and section below. Phase 1 through 3 are radial expansions of the pit. Phase 4 willexpand the pit to the northwest and to depth. A single spiral ramp will be used to access the pit bottom linking to the Phase 3 ramp on the south side of the pit. The Southwest Pit will be mined in 1 phase.

On July 29, 2019, the CSH mine provided an updated mine plan and life of mine production schedule due to the short term interruptions of mining activities caused by a series of wall failures in the second half of 2017.[2019 AIF F-40, p. 10]

Based on the finalized studies, the Company has adopted an updated pit design for the Northeast Zone in accordance with the pit limit optimization study carried out by Changchun Gold Design Institute. The ultimate pit wall slopes have been reduced to 36.5 degrees from 42 degrees for the south wall and 38 degrees from 44 degrees for the north wall, respectively.[2019 AR, p. 56]

The CSH Gold Project has two open-pit mining operations and was operating at a 30,000 tpd capacity during Phase I. The Company completed Phase II expansion construction and entered into commercial production in the fourth quarter of 2014. Since the commencement of Phase II commercial production, CSH has increased its processing capacity to 60,000 tpd. As part of the Phase II expansion, a second heap leach pad was created with a valley between the initial Phase I heap leach pad and the newly created Phase II heap leach pad.[2019 AIF F-40, p.36]

In July 2019, CSH updated its mine plan based on a result of latest ultimate limit optimization, in which the production rate was reduced to 40,000 t/d with a life of mine of seven years as of 2019.[2019 AIF F-40, p.36]

The main processes applied to the heap leaching of the ore at the CSH mine are consistent with typical heap leach operations and consist of:

• Mining ore and waste
• 3 stages of crushing to 80 ........