The Tonopah property contains a low-sulfidation epithermal gold system associated with near vertical quartz-adularia-gold veins hosted by Ordovician black argillite of the Palmetto Formation and Tertiary rhyolitic volcanics and also in association with a discontinuity at the contact with the top of the Palmetto Formation and lower sequence of the Tertiary volcanics. Gold bearing veins occur in a series of enechelon clusters along a 1.5-mile northwest-trending band of mineralization. Contact related gold mineralization is also seen along this entire band. The main altered and mineralized zones are overlain by alluvial gravels, sand dunes, and playa deposits.

Structural geology significantly influences the distribution of mineralization and alteration at Tonopah. The Rye Patch fault system is a complex, oblique-slip fault system with numerous northwest trending splays, believed to be associated with north-south trending compressional stress common in the Walker Lane structural trend. Subordinate steeply dipping, north-south striking extension fractures developed between the two bounding strike slip faults.

Detailed structural studies of bedrock exposures and oriented core from 22 drill holes indicate that alteration and mineralization developed between two moderately northeast dipping faults with rightlateral strike slip movement. Veins and hydrothermal breccias developed along sub-parallel, north-south extension fractures that terminate at the northwest ........

The Tonopah Property as planned in this report has a project life of 8 years, consisting of 2 years of preproduction, 5 years of mining and heap stacking, and one year of final gold recovery, pad rinsing and reclamation work. Mining will be done using traditional, open pit surface mining techniques. Mine operating and capital costs assume self-mining.

Three successive phases for the pit were designed based on the Lerchs-Grossman shape analysis and minimum push-back widths. These designs account for limitations based on minimum mining widths and wall angles indicative of operational feasibility. Pit exits have been designed to the north and east pit edges where feasible to minimize haul distances to the crusher and waste dump locations. The ultimate pit shape was based on the boundaries in the 91% price Lerchs-Grossman shape discussed in the previous sub-section. The target for road gradient through the main portion of the pits was 10%, with a 12% target in the final two benches. However, some stretches of road exceed the 10% target in small localized areas. A more detailed pit design will be done in future studies.

The ultimate pit shown is the combination of three phases composed of combinations of smaller pit bottoms within the greater geometry. There are a total of seven smaller pit bottoms in the ultimate shape. The first phase takes the first and highest grade pit threshold. The second phase includes four additional pit bottoms. The third and fin ........

Mineralization scheduled for mining is trucked to a 3 stage crushing plan located near the north eastern edge of the final pit. After crushing the material will be conveyed and stacked on the leach pad for gold recovery.

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