Mineralization at the Santa Luz Project is consistent with an orogenic gold deposit type.

At the Project, gold mineralization is mainly related to quartz-carbonate-sulphide veining and breccia filling hosted in sheared and hydrothermally altered rocks. Breccia may be comprised dominantly of carbonaceous sedimentary, dacitic, or other volcanic rocks, depending on local geology.

Gold mineralization is associated with two main types of quartz veins. The most common type is foliation-parallel, white to grey coloured, strike north-south, and generally less than one metre wide veins. They may be deformed and boudinaged or may appear undeformed. Where deformed, they are associated with stretch lineations related to transcurrent or thrust movements. The second type of commonly observed quartz veins are most likely related to late northeast-striking structures. These structures are in predominantly brittle or ductilebrittle faults that crosscut all other structures, including foliation, and display a general dextral sense of movement. The veins associated with these structures are normally black or dark grey and are thicker than the north-south striking veins. Fluid assisted hydraulic breccia is commonly associated with these veins.

Mixed veins, characterized by black and milky-coloured quartz, are found in strongly broken zones, mainly at the intersections of the north-south structures with the northeast-southwest structures. These intersections host voluminous and high-grade gold quartz veins and silicified breccia.

The host rocks of the gold mineralization exhibit weak to moderately strong alteration. The most common observed hydrothermal alteration features are albitization, carbonatization, sulphidation, sericitization, and silicification. Host rocks are locally entirely replaced by albite, quartz, sericite and carbonate minerals. Mineralized zones range in thickness from a few metres to tens of metres and have relatively long strike and dip lengths. Geologic models show mineralization at C1 has a north-south strike length of approximately 1,550 m, width of roughly 1,400 m orthogonal to strike, and a depth extension of 840 m. Mineralization ranges in thickness from 15 to 55 m with good continuity along strike and down dip. Dacitic mineralization accounts for approximately 45% of the deposit, with carbonaceous mineralization accounting for 55% of the deposit.

Santa Luz will be a conventional truck and shovel open pit mining operation. The ore and waste rock will be drilled and blasted, loaded onto trucks, and hauled to the crusher area, stockpile areas, or waste rock piles. Ancillary activities will include, but not be limited to, road maintenance, road dust control, site dewatering, dump and stockpile maintenance, grade control, and tailings facility heavy equipment support (as needed). Mining operations are scheduled to start in the first half of 2018.

The original processing plant at Santa Luz was placed in operation in mid-2013 and was shutdown in September 2014 by a previous owner. The original plant was carbon-in-leach (CIL), which did not operate well, with low gold recovery rates associated with carbonaceous ores. Subsequent metallurgical testing programs, including the operation of a pilot-scale plant, has demonstrated that resin-in-leach (RIL) will be successful for the project with estimated gold recovery rates of 84%.

The updated process plant will include crushing and grinding, RIL, elution, and electrowinning. The crushing section of the plant is part of the original facility and requires only minor improvements. The grinding section will be upgraded to two mills operating in series: the original SAG mill and a new ball mill.

Most of the construction capital is related to the installation of the RIL circuit, which primarily consists of a pre-aeration tank, two conditioning tanks and five stirred RIL tanks in series. The process used in gold recovery using resin is similar to the use of activated carbon, but the gold is adsorbed onto the resin beads rather than activated carbon grains. Gold recovery using resin offers all the advantages of the more common carbon recovery, with some additional benefits: i) the size of the resin beads (1 mm) is more consistent than natural carbon, allowing for easier control, ii) improved flow characteristics of resin beads, and iii) better recovery rates from ores containing high levels of organic compounds. Resin technology for gold recovery has been used at mines in South Africa, USA (Nevada), Malaysia, and in Russia.