The rock units present within the NX Gold Mine belong to the Nova Xavantina Volcano-Sedimentary Sequence, part of the upper regional Cuiabá Group.

The volcano-sedimentary rock units, and some diorite dykes, are strongly foliated and frequently display intense transposition. There are two main phases of folding recognized at the NX Gold Mine.

The first phase of folding is associated with a variably oriented, shallowly to moderately dipping schistosity (S1). The S1 schistosity is deformed by a crenulation cleavage (S2) oriented generally 234/66 but varying in strike from 190 to 270 degrees with westerly to northerly dips varying between 30 and 80 degrees. Both foliations (schistosity and cleavage) are present at the mine and at least as far as the Cristal vein located 1,800 metres to the northeast of the mine.

The development of the S2 cleavage is heterogeneous and is generally better developed near the mine to a point where the S1 is completely re-oriented along the S2 foliation planes.

Known gold mineralization at the NX Gold mine is structurally controlled and hosted in two major sulphide-rich quartz veins, with hyaline quartz druse, dipping 40 degrees to the north- northeast and striking between east-west and west-southwest. The veins are hosted in strongly deformed metamorphosed sedimentary rock units and diorite that trend generally to the northeast with a 30 to 65-degree dip to the northwest. The veins exhibit a typical laminated pattern in parallel with the vein contacts. The laminations are characterized by alternating centimetric to decimetric quartz bands and foliated host rocks indicating multiple pulses of mineralized fluids during their formation.

The Buracão vein is located on the western part of the property and includes a primary laminated vein measuring 100 metres in length and dipping 45 degrees to the northwest in the upper portion of the mine and 70 metres in length dipping 40 degrees to the northwest in the lower portion of the mine. The average thickness of the vein is 4.5 metres with a maximum thickness of up to 6 metres.

The Brás vein is located to the east of the Buracão vein and includes a primary laminated vein measuring 220 metres in length in the upper part of the mine and 50 metres in length in the lower levels of the mine. The average thickness of the vein is 5 metres with a maximum thickness of up to 10 metre.

The gold mineralization in both veins is associated with sulphides that are primarily disseminated within the quartz, but can also be associated with very minor goldbearing sulphides disseminated in the host rocks. The veins generally contain 2 to 15 percent total sulphide represented largely by pyrite and galena, with minor chalcopyrite, bornite, pyrrhotite, and sphalerite. Higher gold grades are generally associated with galena, chalcopyrite, bornite, and sphalerite.

The veins are frequently bordered on the eastern and western edges by discontinuous tectonic/hydrothermal breccias typically less than 2 metres thick. Breccias with a siliceous matrix contain angular fragments of quartz veins, and a matrix that contains pyrite and galena. This type of breccia demonstrates gold grades that are generally below 5 grams per tonne of gold. Breccias with a carbonaceous matrix contain subrounded to sub-angular fragments of diorite and quartz vein. The matrix contains fine pyrite dust, and some minor fragments of quartz vein have been shown to contain pyrite. Breccias with carbonaceous matrix do not have demonstrated gold grades.

Underground mining operations (primary ramp development) at the NX Gold Mine started in 2009 with the opening of the main mine portal at level +300 (surface elevation). The current development of the underground mine reaches level -195 for the Brás vein and +43 Level for the Buracão vein. Ore above levels -115 and +61 for the Brás and Buracão veins, respectively, have been assumed to have been extracted for the purposes of the current Mineral Reserves and no sill pillar recovery is planned. Current operating depths are 450 meters and 250 meters below surface for the Brás and Buracão veins, respectively.

The mining method applied to the ore bodies is the overhand cut and fill, with waste from development used as fill. The selection of this method is a function of the average geometries of the ore bodies and the competence of the footwall and hanging wall.

Brás and Buracão Average Orebody Dimensions:
Vein Brás:
Dip (°) - 32 to 45;
Avg. Strike Length (m) - 100;
Avg. Thickness (m) - 6.0.
Vein Buracão:
Dip (°) - 32 to 40;
Avg. Strike Length (m) - 70;
Avg. Thickness (m) - 2.5.

All development supporting the mines continued operation, including the primary ramp, occurs in the footwall of the deposits. The distance between permanent excavations and the mining area is maintained at 30 meters.

The Brás vein is divided into vertical panels of 64 meters with interlevel spacing of 15 meters, while the Buracão vein is divided into vertical panels of 35 meters with interlevel spacing of 14 meters. The maximum hydraulic radius adopted for inter-levels is 4 meters and the mining blocks are separated by pillars 5 meters long along strike and 5 meters high along the dip of the ore body.

Production from cut-and-fill inter-levels is approximately 4,000t/month and 1,250t/month at the Brás and Buracão veins, respectively.

Mining cycles.
The mining cycle for cut-and-fill at the Brás vein can be described as follows:
1. Drilling of 51 mm diameter and 3.8 meter deep holes using S1D jumbos;
2. Detonation using cartridge explosives on a charge ratio of 1.06 kg per drilled meter;
3. Loading using a JCB telescopic handler with a 4.5-tonne capacity;
4. Loading and transportation of ore to the surface using 6-tonne capacity LHD loaders and 20-tonne capacity trucks;
5. Scaling using S1D jumbos;
6. Filling using 20-ton trucks and LHD loaders to maintain the stability of the ramp;
7. Drilling for rock support using S1D Jumbos;
8. Reinforcement of hanging wall with grouted splitsets and cables.

The mining cycle for cut-and-fill at the Buracão vein can be described as follows:
1. Drilling of 40 mm diameter and 1.4-m deep holes using jackleg hammers;
2. Detonation using cartridge explosive on a charge ratio of 1.35 kg per blasted tonne;
3. Loading and transport of material with 700kg tonne capacity Bobcat loaders to the loading site;
4. Loading and transportation of ore to the surface using 6 tonne capacity LHD loaders and 20 tonne capacity trucks;
5. Manual scaling;
6. Drilling for rock support and installation of splitsets using jackleg hammers.

The Nova Xavantina Plant includes a conventional 3-stage crush; ball milling; centrifugal gravity concentration (Falcon); intensive cyanidation - ILR (GEKKO); hydrocyclones; flotation (rougher, scavenger and cleaner); pre-lime and CIL of the flotation concentrate; desorption (atmospheric pressure Zadra stripping); acid washing (before and after desorption); and smelting. The Nova Xavantina Plant has been in operation since 2012.

Using an apron feeder, the 100mm to 500mm coarse material is loaded into a Simplex SXBM 9060 jaw crusher with a closed-side setting (“CSS”) of 100 mm for primary crushing. Undersize material (sub 100mm) is moved to the SIMPLEX SXPL 6024/2D double-deck classification screen by a belt feeder for further separation of particle sizes of 22mm to 10mm.

Oversize fractions (greater than 20mm) and the fractions between 20mm and 10mm are transported by conveyor to the secondary and tertiary cone crushers, respectively. The secondary cone crusher is ........