Gold mineralization in and around the Berezitovy property is related to explosive breccia within granitic gneisses. At the Berezitovy Deposit, this is present within a north-northwest trending and steeply southwest dipping zone of brecciated and hydrothermally altered granodiorite. This zone, and several other zones of similar orientation in the general area, may represent regional scale tension gashes developed between the east northeast trending Severa and Yuzhna Sergachinski faults. The uplifted block, which contains the gold mineralized zones, is in contact with younger sedimentary rocks on either side. Several granitic dikes are parallel to the regional trend and are mineralized close to the main zone.

The Berezitovy property is situated in a geological environment amenable to mesothermal gold deposits. The geological model is gold mineralization associated with metasomatic alteration and quartz flooding in granitic and granodioritic rocks. Observations on underground surface exposures, drill core and mineralogical studies suggest that the near surface oxidation zone is very shallow (5-7 metres deep) and mineralization is predominantly sulphide.

A set of east trending andesite porphyry and lamprophyre dykes cut the deposit and are generally not mineralized. Higher gold values, however, commonly occur along the dyke contacts and some gold mineralization occurs within the dykes. A post mineral diorite dyke separates the deposit into two parts; a northern area containing the North Zone and a southern one containing the Central and South Zones. All mineralization south of this dyke is referred to as the South Zone (or Zone 1) and all of the mineralization north of this dyke as the North Zone (or Zone 2). The main diorite dyke is 5 to 10 metres wide, trends eastnortheast and dips steeply to the northwest.

At Berezitovy, gold is associated with polymetallic sulphides and quartz-sericite (berezite) metasomatic alteration. Locally, tourmaline, garnet and epidote are also common. The overall outline of the mineralised zone is due to the juxtaposition of two inverted cone shaped structures (breccia pipes), which have provided channel ways to the hydrothermal fluids and the associated gold-polymetallic mineralisation. The presence of shard fragments in the breccia may also indicate volcanic activity predating the mineralisation. The breccia contains fragments of diorite material within a groundmass of very fine-grained granitic and gneissic material.

Gold mineralisation, commonly in the range of 0.5-15g/t Au, is present in various facies of brecciated zones with disseminated sulphides and in silicified rocks. Sulphide mineralisation consists predominantly of pyrite, sphalerite and galena. Gold is commonly present in solid solution with silver as electrum.

High grade portions of mineralisation (greater than 10g/t Au) are uncommon and are present within narrow zones of limited strike extent, commonly 20-80m long and 2-10m wide.

Berezitovy is mined using a conventional open pit mining system, mining top-down bench by bench and employing drill and blast of ore and waste rock combined with truck haulage to the surface. Both ore and waste is loaded using hydraulic excavators and electric shovels, with 45t and 55t diesel powered BELAZ and CAT off highway trucks for transport of rock either directly to the primary crusher or to the waste and ore stockpiles.

Two types of drill rigs are used at the site for the purposes of drilling blast holes, specifically a Sandvik Pantera 1,500 and an Atlas Copco DM-45. The rigs operate with 127mm and 152mm (176) diameters respectively.

Standard drill and blast techniques are used at Berezitovy, with presplitting adopted to increase bench definition, control over break and reduce rock fracture. Efforts to maintain effective drilling and rock fragmentation by reducing the blasthole grid are necessary as a result of the hardness of the rock mass. Therefore, a grid of 4.5mx4.5m (Figure 16.2) is used for waste and, generally, a denser grid of 3.5mx3.5m is used for ore to achieve greater fragmentation. After blasting, approximately 3% of fragmentation is oversized. In addition, specific blast patterns, hole size and charge layouts are used for final wall delineation.

A Nonel initiation system is utilised. Explosives include the use of ANFO for dry blasts and an emulsion for wet blasts.

Blasting is performed on alternate days, with a blast exclusion zone of 200m for excavators, and 700m for personnel and all other machinery.

The process plant had a throughput of approximately 1.4Mtpa, with 250t/hr through the CIP plant.

Ore is removed from the pit and delivered to one of two stockpiles: on-balance/mediumgrade ore stockpile containing 1,398,020t at an average grade of 1.71g/t Au; and a offbalance low-grade ore stockpile containing 2,519,140t at an average grade of 0.74g/t Au.

Ore is delivered to the main plant feed hopper using a Front End Loader. The hopper is fitted with a 1.1 x 0.8m grizzly and oversize material is broken using a hydraulic hammer drill. Ore is extracted from the hopper using an apron feeder and transferred to a jaw crusher, which reduces the material to less than 200mm. The crushing rate is variable depending on the ore being treated but typically averages 250tph. The crushing units are shut-down for maintenance work 6 days a month.

The primary crushed ore is then conveyed to a crushed ore stockpile, containing approximately 49,800t of ore at an average grade of 1.98g/t Au. The stockpile suffers from segregation of the coarser material, which tends to gravitate to the bottom of the stockpile. Ore is reclaimed from the crushed ore stockpile using three feeders.

Ore is ground in a SAG mill – ball mill circuit to a size of 80% passing 74µm. The SAG mill is 6.7m x 2.4m and fitted with a fixed speed 1,800kW motor. Approximately 250tph of material is fed to the SAG mill, where it is ground at 75% solids. The SAG mill was originally fitted with a 12.5mm discharge grate, which restricted the mill throughput. The size of the grate has now been increased to 18mm. A major problem of the SAG mill is the production of approximately 20t of critical size material every day. Previously, this material was recycled back to the crushed ore stockpile. In late 2011, a KSD 600 crushing unit was installed within the grinding circuit to process this critical size material.

The 8.5 x 4.4m ball mill is powered by a 2,240kW motor. Previously, a number of problems with the ball mill meant that the optimum ball loading could not be reached and the target grind size was not being achieved, resulting in a reported recovery loss of 2%. Numerous repairs and a recommendation from Irgredmet to implement a 23% ball loading have rectified this problem.

The milling rates of this original circuit ranged from 185 to 220tph.

During the second half of 2010, a new 4.5 x 6m ball mill was installed in parallel with the existing circuit. In September 2011, it had increased milling rates to an average of 250tph. The various modifications made to the grinding circuit appear to have resolved the issue of under grinding the material, with 80 82% now passing 74µm.

The mills are out of operation for an average of 6 days a month for maintenance work, which accounts for a plant utilisation factor of 0.81.

The addition of cyanide to the grinding circuit causes problems with sampling, as the mill water contains solubilised gold, thus necessitating the analysis of both solid and liquid phases in order to obtain an accurate gold assay.

The cyclone overflows are screened using a combination of Delkor Screens to remove wood chips and vegetation.

The ground pulp, at roughly 24% solids, passes to a 24m diameter thickener. The thickener overflow is returned to the grinding circuit and the underflow, at 52-53% solids, is pumped to the leach tanks.

There are eight leach tanks, each with a capacity of 430m3. The tanks are air sparged but the levels of dissolved oxygen are not determined. Cyanide is added to tanks 1 and 5 and the pH is maintained at 11.5.

Carbon adsorption takes place in six 330m3 adsorption tanks. Previously, 28t of Malaysian carbon was used in the circuit. This has recently been substituted for new Thai carbon, the optimised loading of which into the column is still under review. An initial loading of 84t yielded unsatisfactory tailings grades. Approximately once a week, the carbon loading is reduced by between 5-6t to measure the effect on the grade of the tailings. If still deemed to be unsatisfactory, the carbon loading is reduced by a further 5-6t until an optimised loading level is reached.

The loaded carbon, typically assaying 1.5kg/t Au is screened and passes to desorption. Carbon reactivation is achieved partially in a kiln, and partially via an acid-wash process.

Gold is recovered from the carbon using a conventional desorption-electrowinning and smelting process.

There are three desorption circuits, one capable of processing 6m3 of carbon, while the other two are capable of processing 4m3 of carbon each. The units are of Chinese manufacture and are capable of stripping carbon down to 120ppm Au.

Electrowinning takes place in four 4m3 electrowinning cells. There is one back-up cell should maintenance work be required on one of the four operating cells. The cathode sludge, which assayed 177kg/t Au, is smelted on site to produce doré.

The smelter is involved in the monthly production of approximately 700kg of doré, typically assaying: 32-34% Au; 32-34% Ag; as well as quantities of Zn, Pb and Cu.