Mineralization Styles
Mineralization at Bayan Khundii consists of gold ± silver in massive-saccharoidal, laminar and comb-textured quartz ±hematite veins, multi-stage quartz-adularia-chalcedony ±hematite veins, quartz-hematite breccias, along late fractures (±hematite/ specularite), and as disseminations within intensely illite-quartz altered pyroclastic rocks, where it is commonly associated with hematite that partially or completely replaced pyrite grains. Gold mineralization is mostly hosted in parallel NW-SE trending, moderately-dipping (approximately 45°) zones that range in width from 4 to 149 m.

No gold ± silver mineralized veins or breccias have been noted in the unconformably overlying Jurassic sedimentary rocks or basalt, indicating these rocks represent an unmineralized cover sequence. Some gold ±silver enrichment has been noted in basal conglomerate containing angular, altered, and possibly mineralized Lower Carboniferous Ulziithar Formation tuff clasts, near the unconformity.

Gold mineralization at surface is present in three separate areas over a 1.7 km NE trend. These include the SW Prospect area (550 m x 300 m), the NE Prospect area (300 m x 300 m), located approximately 0.7 km to the northeast, and the NE Extension located an additional 500 m to the northeast. Most of the exploration work to date, and all of the Bayan Khundii mineral resource, lies within the SW Prospect area which includes the Gold Hill, Striker, Midfield and North Midfield zones. The NE, and NE Extension Prospect areas have undergone limited exploration drilling with anomalous gold mineralization intersected in a number of drill holes. The remainder of observations in this section are based on mapping, trenching and drilling within the Gold Hill, Striker, Midfield and North Midfield zones.

Quartz Veins and Breccia Zones
Quartz veins and hematite and/or quartz breccias were observed to have variable orientations and commonly form irregular networks of quartz and hematite veins and breccias within SE-NW and E- W trending, SW-dipping, structures. Individual quartz veins, commonly with comb-textures, were observed to vary in width from <1 mm to 2-3 cm over 10 to 30 cm along individual veins. Some quartz veins were noted to form bifurcating veins sets, whereas other veins were noted to form along parallel fractures with common ‘jump over’ structures. The vein orientations are thought to reflect the orientation of pre-existing fractures, with comb-textured veins possibly representing open-space infillings of structurally-controlled void spaces within a main relay ramp extensional structure as noted in Section 8.2 below. Some quartz veins have narrow (<1-2 mm wide) illite- quartz alteration selvages; however, most quartz veins at Bayan Khundii do not have alteration selvages.

Several large composite quartz veins (=2 m wide) were noted to include comb-textured quartz ±adularia, brecciated and mottled-textured massive quartz, and minor chalcedony with hematite ±specularite veins and veinlets and, in a few veins, hematite breccias. These large composite veins are interpreted as forming from multiple pulses of silica and Fe-oxide rich auriferous fluids. The two largest multi-stage auriferous quartz-adularia-chalcedony veins were intersected in drill holes BKD- 98 and BKD-99 (2.0 m and 1.7 m wide respectively).

An irregular-shaped, sinuous, SE-trending hydrothermal quartz breccia was mapped for approximately 125 m through the Striker Zone. Other quartz-breccia zones throughout the Southwest Prospect area, are interpreted to be linear-shaped, however, surface exposure is somewhat limited and these breccia zones may prove to be irregular-shaped as more mapping and drilling information is acquired.

Some tourmaline breccias and tourmaline alteration zones to the west of the Striker Zone contain brecciated fragments of quartz veins and also comb-textured quartz overgrowths on tourmalinized fragments, suggesting a complex inter-relationship between quartz veining and tourmaline alteration events. The relationship between gold mineralization and tourmaline is unclear, however, most tourmaline was observed to the west of the Striker Zone where limited gold mineralization has been encountered to date and there is only rare to trace tourmaline in the Striker and Midfield zones, suggesting these features may be from separate events.

DEPOSIT TYPE
The Interpretation of Bayan Khundii favors a low-sulphidation epithermal deposit hosted within a corridor of en-echelon extensional faults.

The Bayan Khundii site is comprised of the open-pit mine, processing plant and integrated waste rock and dry cake tailings storage facility. Additional infrastructure for maintenance facilities and an accommodation village are included. The proposed mine uses conventional open-pit truck and shovel methods for ore extraction.

Initial evaluation of Whittle™ pit shells was completed based on geotechnical and economic parameters to determine potentially economically minable material. The Whittle™ optimization process identified three main pit areas defined as Striker, Midfield and North Midfield. Subsequently, three stages of pit design and development were planned based on the Whittle™ optimization output. The pit exit level is approximately 1,232 meters above sea level (“MASL”) and reaches a maximum depth of 1,088 MASL at the North Midfield Pit.

Overall mining inventory within the ultimate pit design is 34.6 million tonnes (“Mt”) of which 31.2 Mt is classified as waste and 3.4 Mt is classified as ore. The average grade for process plant feed is 3.7 g/t gold containing approximately 409 thousand ounces (“Koz”) of gold in total.

The designed process plant throughput rate is 600 thousand tonnes per annum (“Ktpa”) with 450Ktpa for the first year of operations and 600 Ktpa from Year 2 onwards. The total productive mine life is 6 years, with an additional 3 months of pre-production to generate waste for construction of the run-of -mine stockpile (“ROM”) and integrated waste facility (“IWF”) in advance of process plant commissioning. An average of 8.9 Mtpa of total ex-pit production is required from Year 1 to 3 and this progressively reduces down to 1 Mtpa from Year 4 to Year 6, at which time ore from the North Midfield zone is sufficiently exposed to generate consistent process plant feed.

To satisfy the productivity and selectivity required over the life of mine, bulk waste excavation will be undertaken with two 75-tonne-class backhoe configuration excavators and selective waste excavation and ore excavation will be undertaken with a single 36-tonne-class backhoe configuration excavator. 55-tonne rigid frame dump trucks will be used to move ore and waste material, maximizing overall truck utilization, and unifying the truck spare parts stock. A single 40-tonne ADT truck was selected for tailings haulage from the process plant to the tailing cells located within the IWF.

Both production and control drilling are needed during mining operations. Production drilling is for bulk waste material, and control drilling is for wall blast, selective waste and ore blast.

Ancillary and support fleet were also selected based on the project scale and experience from similar projects.

Crushing
There are 2 permanently installed crusher circuits and each circuit consisting of:
• ROM bin;
• Apron feeder;
• Vibrating grizzly, to allow the passing of smaller material;
• Jaw crusher; and
• Discharge conveyor.

Both circuits discharge to a common SAG feed surge bin, which has an apron feeder discharging to the SAG mill feed conveyor. The SAG feed surge bin has an overflow chute to allow material to be stockpiled as an emergency crushed stockpile, which is fed back to the SAG mill feed belt when required via a hopper and belt feeder.

This is to ensure that minor disturbances in the ROM feed and crushing rate are not affecting the constant feed to the grinding circuit, and giving a measure of control to the plant feed rate. This is critical to ensure consistency in the grind size, and control over the mill circuit.

The ROM bin has been sized to accommodate a 773 size truck, as proposed for the use in the mining operation, but the plant feed is envisioned to be a combination of direct tip, and front end loader from the ROM to control feed blend on a day to day basis.

A grizzly will be placed over the feed bin to control oversize material to minimize crusher blockages, and any material that pegs the grizzly will be managed by a rock breaking hammer fixed to an excavator.

From the apron feeder, smaller material passes through the vibrating grizzly, directly to the discharge conveyor, while larger material is crushed to a nominal P80 100 mm by the Jaw Crusher and then discharges to the conveyor.

It is conveyed to the SAG feed surge bin, which will have approximately 1 hour capacity, allowing for shift changes, loader refueling and in-field servicing, and minor crusher downtime, without affecting the feed to the grinding circuit.

Emergency stockpile reclamation is to a small hopper of approximately 2 loader buckets, to a belt feeder. As with the SAG feed surge bin reclaim feeder, these will be controlled via a belt weigh scale on the SAG mill feed conveyor, to ensure a consistent feed rate to the grinding circuit

Grinding
After additional modelling work on the overall comminution circuit, conducted by Orway Mineral Consultants-Perth, AU (“OMC”), the mill sizes were changed to accommodate the likely range of rock hardness expected to be encountered, and a variable speed drive specified for the SAG mill. The SAG mill classification has been changed from a cyclone pack to a screen, with a 2 mm aperture. The SAG mill is grate discharge, while the ball mill is an overflow mill. SAG mill speed will be used, as a manual adjustment, to control SAG mill circulating load, while water addition rate will be used to control the fluidity of the mill contents and to minimize recirculation of undersize material.

Ball mill discharge size will be controlled by cyclone pressure.

It is predicted that maintenance cycles can be spaced at every six months for major mill maintenance and liner changes. This will allow these maintenance periods to be done in the fall and spring, to minimize planned downtime during the winter months.

The process plant design basis has an overall plant operating time of 92% or 8,060 hours per annum. The process plant has been designed to produce up to approximately 79.0 Koz/a gold as doré bar (Yr 5), but averages approximately 63.5 Koz over the life of mine.

Key criteria selected for the process plant design are:
• Ore throughput of 600,000 tpa, or 1,800 tonnes per day;
• Nominal feed Size of 300 mm, based on the small block size, and close pattern drill and blast;
• Grinding product of nominal P80 of 60 µm;
• Plant operating time of 92%;
• Average ore head grade of 3.71 g/t for gold;
• Ore head grade capped at 4.5 g/t planned over a month interval;
• Short term head grade capped at 6 g/t (constrained by the elution capacity); and
• LOM average gold recovery of 93%.

The Bayan Khundii orebody is a relatively simple ore to process in that it is a gold orebody containing some silver, has low levels of sulphide and base meta ........