The Goldex deposit is a large, relatively low-grade body defined by the intensity of stockwork veins and gold grades rather than by individual veins. Most of the gold at Goldex occurs as microscopic particles associated with pyrite, while the rest is in the form of coarse native gold grains of up to a few millimetres in size. There are several zones of gold mineralization with isolated ore-grade intercepts over mineable widths on the property, and all of them except the South Zone are hosted by the Goldex Granodiorite.

While the main concentration of gold mineralization is the GEZ zone, which extends from 500 metres to 800 metres below surface, we are now aggressively exploring the D Zone, which is located about 150 metres below GEZ. Although not yet fully defined, the D zone is very similar to GEZ in geology, style of mineralization and, potentially, in size.

The M zone extends from 200 to about 370 metres below surface and dips steeply to the north, with gold-bearing quartz-tourmaline-pyrite veins and veinlets similar to the GEZ. The E zone extends from approximately 700 to 850 metres below surface, just east of the GEZ. The E zone contains relatively fewer quartz-tourmaline-pyrite veins and veinlets than the GEZ.

The surface facilities at Goldex include a head frame, a hoist room, an ore storage facility, a processing plant, a paste backfill plant and a surface building containing a mechanical shop, a warehouse and an office. In addition, the Goldex property has a 790 metre deep shaft (Shaft #1), which historically was used to provide access to underground workings. Shaft #1 is now used for ventilation of the underground workings. Shaft #1 is scheduled to be dismantled in the spring of 2018 and the surface area rehabilitated as part of the ongoing rehabilitation program.

The sinking of a new production shaft was completed in 2007. This shaft (Shaft #2) is a 5.5-metre diameter shaft with a 50-centimetre thick concrete lining and is used for ventilation as well as hoisting purposes. Shaft #2 is 865 metres deep and includes five stations. A refurbished friction hoist was installed for production and service duties and an auxiliary hoist was installed for emergency and personnel service.

Rehabilitation of the old ramp near Shaft #1 was completed in 2015 to access the upper portion of the M Zone. The ramp will be used for getting material into the mine and as an emergency exit. In addition, a new heating system at surface was installed in early 2015.

The Company mines the M and E Zones using primary and secondary stope methods. Drilling is carried out with ITH drills. Production holes are either 4.5 or 6.5 inches in diameter. Bulk emulsion is used as the primary explosive for stope blasting. For both zones, stopes are approximately 55 metres high. The width and length of individual stopes vary based on local rock mass quality, but an average stope is expected to range between 60,000 and 120,000 tonnes. Ore handling in the M Zone is done with 15 yard load-haul-dump machines. This equipment unloads into an ore pass accessible from each level. In the E Zone, located below the bottom of Shaft #2, ore handling is done with 15 yard load-haul-dump machines and 45 tonne trucks.

All stopes are supported with 10-15 metre cable bolts. In addition, the stability of certain stopes is remotely monitored in real time. The Company also uses paste backfill to allow for a high extraction ratio and to increase long term stability.

The same mining method used in the M and E Zones is used in the Deep 1 Zone, except that a Rail-Veyor system is used for ore handling between the lowermost level of Deep 1 (Level 120) and the current ore handling facilities (Level 76). The Rail-Veyor loading system on Level 120 is fed via a rock breaker room at Level 115. For Levels 85 to 115, 15 yard load haul dump machines unload into an ore pass reporting to the rock breaker room on Level 115. For the stopes on Level 120, 45 tonne trucks are used for ore handling to Level 115.

The Goldex processing facility starts with a two-stage crushing process, followed by a two-stage grinding circuit that comprises a semi-autogenous grinding (SAG) mill and a ball mill. The grinding target is to reduce 80% of the ore to a diameter of 140 microns or less. Most of the ground ore is fed to the gravity circuit that recovers about two-thirds of the gold, which is then smelted on site to form doré bars. Flotation recovers the rest of the gold, producing a gold-bearing pyrite concentrate.

Half of the flotation tails go to the new paste backfill plant, where they are mixed with Portland cement GU to form a paste at 77% solids. This paste is pumped underground to fill and solidify in stopes once they have been mined out. The rest of the flotation tails are being used to complete the rehabilitation of the historic Manitou mine site, 22 kilometres away, in partnership with the Quebec Government.

The pyrite concentrate is thickened and trucked to the LaRonde co ........