Gold mineralization on the Gold Springs project is characterized by structurally controlled vein and stockwork systems that are laterally extensive forming wide corridors of mineralization that are traceable over a strike length of several kilometres. The structural zones are a combination of Basin and Range through-going faults and ring fracture systems associated with caldera margins. Within these structurally prepared zones, mineralization takes the form of discreet veins, breccias, sheeted vein zones, stockwork veins, and zones of disseminations. The veins exhibit quartz, adularia, and low sulfide contents that are typical of a deposit type referred to as “low-sulfidation epithermal deposits” (Robert, et al., 2007).

Mineralization in the Gold Springs area is characterized by large through-going structural corridors hosting veins, breccias, and disseminated gold and silver mineralization in altered rocks. These are generally north-striking faults and structures that are the primary control for the low sulfidation-type gold bearing quartz veins, with subsidiary northeast and northwest striking veins also noted in the target areas. In addition, caldera margins, collapse features, and breccias provide areas of structural preparation and host mineralization within the Grey Eagle resource area. Andesite and latite flows are the primary host rocks to the gold-silver mineralization in the district and were intercepted during drilling conducted by GSLLC at the North Jumbo, South Jumbo, Thor, State Section, Midnight, Grey Eagle, and White Point target areas.

In general, the gold mineralization in the Gold Springs area consists of structurally controlled quartzadularia +/-calcite veins, hydrothermal breccias, and associated stockwork and sheeted veins, in addition to broad areas of disseminated mineralization. Host rocks adjacent to the veins and stockwork zones are variably silicified and exhibit sericitic (illite), argillic, and propylitic alteration in a general progression away from the major vein structures. Mineralization also occurs in the Gold Springs rhyolite ash-flow tuff that locally overlies the andesites, and here the mineralization occurs as stockworks surrounded by broad areas of sericitic (illite) alteration associated with the presence of fluorite. There are at least two distinct episodes of gold mineralization observed in the project area.

The dominant orientation for vein systems in the District is north-northwest to north-northeast with variable dips to the east and west. Individual veins may be segmented and occur in a regional belt or zones of mineralization that trend north to south. On a local scale, there are some distinct differences observed in the styles of mineralization between the North Jumbo, South Jumbo, Thor, and Grey Eagle zones, which are described below in detail in the following section for each of the target areas.

Within the vein zones, quartz is generally coarse-grained crystalline and appears in crustiform, colloform banding, comb, and pseudomorphs of bladed carbonate forms. The quartz veins are generally white to light grey and greenish in color. Multiple episodes of veining are evident from the replacement textures and the different varieties of vein material being crosscut by subsequent veins.

Sulfides are uncommon in the veins and generally constitute <1% of the veins, but when observed, they typically occur as pyrite, predominantly in the Jumbo Trend. Pyrite is observed disseminated throughout lateral or vertical zones within the host matrix or as blocky or equant crystals along fracture surfaces. Gangue minerals include calcite (with occasional iron and/or manganese carbonates), fluorite, and locally abundant amounts of adularia.

The Jumbo-South Jumbo zones, referred to generally as the Jumbo Trend, is defined as a prominent northsouth striking structural zone of veins, stockworks and breccias that cut altered and mineralized andesites and latites. The Grey Eagle resource is characterized by numerous veins cutting hematite-altered andesites. A younger stage of mineralization in the Gold Springs caldera consists of pipe-like bodies that cut the rhyolite dome and intra-caldera flows where gold mineralization is associated with late stage hematite and fluorite in breccias that form pipe- like bodies. An example of this is the Pope and Charlie Ross areas where gold mineralization occurs in stockworks, fractures, and veins cutting welded tuffs on the margins of the Gold Springs caldera.

The Gold Springs deposit is a near-surface epithermal gold system most suitable for open pit mining and heap leach gold recovery. GRE has used that approach for economic analysis.

The schedules for Grey Eagle and Jumbo were broken out into Phase 1 and Phase 2, where Phase 1 included all material within the $700 pit, and Phase 2 included remaining material, approximating a phased pit design. Additional design work will likely better balance the annual leach and waste stripping and metal production.

Pre-stripping of waste and/or tuff was included if either of the following criteria were true: waste or tuff occurred on a bench that had no corresponding leachable material or the tonnage of waste or tuff on a bench exceeded seven times the tonnage of leachable material on that bench. The production rate for pre-strip benches was set to two times the leach material production rate, or 30,000 tpd.

For all other benches, all waste and tuff on a bench were scheduled to be mined over the same duration as the leach material on that bench (i.e., if the leach material mining duration on a bench was 10 days, all waste and tuff on that bench, regardless of quantity, were also mined during those same 10 days). This scheduling method resulted in some years with high waste and/or tuff quantities relative to the leach material quantity mined. GRE used pre-stripping and phasing, as described above, as much as possible to smooth out the production, but the limitations of the scheduling program resulted in some inefficiencies.

The Gold Springs project would employ open pit mining with a conventional heap leach system on a 365 day per year 24 hour per day basis. The heap leach will utilize both run-of mine (ROM) and crushed material. The ROM is delivered directly from the open pit to the heap via the mine haul trucks. The trucks will pass under a silo that will deposit a measured amount of lime on the load for pH control. Higher grade ore will be subjected to primary and secondary crushing. The haul trucks will dump into the jaw crusher pocket or in a nearby stockpile. The final crushed product will be conveyed to a fine ore bin that will fill dedicated haul trucks for transport to the heap leach. These trucks will also pass under the lime silo for pH control. The crushing circuit is conducted in an open circuit configuration to minimize screening and conveyors.

The heap leach would consist of a suitable area lined with a containment system, typically a linear lowdensity polyethylene (LLDPE) liner ........