Northern Nevada has a large number of very significant gold deposits. These are primarily related to the Carlin, Getchell, Battle Mountain – Cortez, and Northern Nevada Rift (NNR) trends. Two of these trends may be projected through or adjacent to the Mine area. The style of mineralization relating to these trends include the Epithermal Low Sulfidation mineralization along the NNR and the Carlin type mineralization.

In the Mine area, exploration and mining has been focused on three types of mineralization:
- Mercury in laterally extensive near-surface replacement silica zones and more localized sinter deposits, principally in the middle tuff unit;
- Disseminated gold in the middle and lower tuff units, andesite, and the Ordovician Vinini Formation beneath the hot spring mercury deposits; and
- Deeper high-grade gold-silver quartz-adularia veins and fracture zones in the Vinini Formation.

Hot spring-related silicification produced surface sinters, silicified bodies beneath the sinters, and widespread, generally bedding parallel, silicification in volcanic and sedimentary rocks. Cinnabar is the only ore mineral in these silica-rich deposits, and it is intergrown with chalcedony and opal (Wallace, 2003). All of the principal areas of known gold mineralization in the Mine area are associated with these silicified areas, occurring beneath them in underlying Tertiary or Paleozoic rocks at various depths below the principal silicified horizons. ........

Access to the mining areas will be from haulage drifts; up to 15 feet wide and between 15 feet to 17 feet high. Drift gradients vary from ±15% to reach the desired elevation.

Mining methods used are longhole stoping, cut and fill stoping, or shrink stoping. The final choice of mining method will depend upon the geometry of the stope block, proximity to main access ramps, ventilation and escape routes, the relative strength or weakness of the mineralized material and adjacent wall rock, and finally the value or grade of the mineralized material. The choice of mining method will not be made until after the stope delineation and definition drilling is completed.

Longhole stoping has the highest degree of mechanization of the three expected mining methods at the Mine and is the lowest cost method. This method requires the greatest amount of waste development and can be mined to a minimum width of three feet. The potential for unplanned wall dilution with this method is the greatest.

Stope development drifting is planned at nominal five feet wide and 10 feet high to accommodate the production drill and load haul dump (LHD) scoops. Levels are located at 38 foot vertical intervals to control dilution and may be increased as experience is gained in mining the Gloria veins. Stope widths are designed to a 3.5-feet minimum mining width or the vein width plus 1 foot of dilution.

To prepare an area for longhole stoping, access for the mobile ........

Klondex will process all of the ore from the Mine at the Midas mill located 18 miles from the mine, saving significant money in ore transport costs.