The Pine Grove Property is located within the Walker-Lane mineral trend. According to Stone (2008), the style of mineralization encountered at the Pine Grove project most closely resembles the “Shear Zone” subtype of the “Plutonic-Related Au Quartz Veins and Veinlets L02” deposit type as described by Lefebure and Hart (2005). In particular, the gold mineralization at the Pine Grove project has the following features in common with the “Plutonic-Related Au Quartz Veins and Veinlets L02” deposit type:

Commonly found in tectonic settings of continental margin sedimentary assemblages where intruded by plutons behind margin arcs. Typically developed late in the orogeny or post-collisional settings.

Host rocks are equigranular granodiorite with associated, highly differentiated, porphyritic dikes.

Mineralization can be divided into intrusion-related, epizonal, and shear veins. Intrusionrelated mineralization typically occurs in widespread sheeted vein arrays parallel to the major structural trends. Veins are commonly just hairline fractures to a few centimeters wide and hosted by extensional shears. Veins contain native gold, pyrite, chalcopyrite, and pyrrhotite. Gangue consists of quartz, and sulfides comprise less than 3 percent of the veins. Epizonal mineralization is typically less focused and may be disseminated or occur as replacements. The shear-vein style of mineralization may occur in fault zones outside of the pluton.

Alteration ........

Hydraulic excavators and rubber-tired front-end loaders were chosen as primary loading units. The loading units were matched to the contractor specified 100-ton haul trucks. This equipment is a good match for the size of the conceptual pits. Initial pit development may be performed using same equipment fleet as specified for production mining.

In general, backfilling of the Wheeler pit is considered economically and environmentally appropriate. Since the Wheeler Pit would conceptually be mined first, it would probably be backfilled with waste from the Wilson pit. As mining progresses, a minor quantity of fill material may be required on a bench by bench basis to provide temporary ramps in areas with difficult access. Access ramps to the upper levels of the pits would mainly be internal to the pits and would be mined out as the pit progresses downward.

The Wheeler Pit would conceptually be mined out at the beginning of Year 3. The Wilson Pit would be completed during the third quarter of Year 4. Crusher feed is assumed to be 80,000 tons per month. Contractor production will be about 275,000 total tons per month for the first twelve months of mining and then will increase to approximately 300,000 total tons per month through the remainder of the mine life.

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