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

Historic and the current known extent of gold mineralization at the NX Gold mine are
structurally controlled and hosted in four major sulphide-rich quartz veins/bodies, from west to east: Buracão, Santo Antonio, Brás and Matinha. The veins are hosted in strongly deformed metamorphosed sedimentary rock units and diorite that trend generally to the northeast. The veins exhibit a typical laminated pattern parallel with the vein contacts. The laminations are
characterized by alternating quartz bands and foliated host rocks indicative of multiple pulses of mineralized fluids during formation.

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 Santo Antonio vein is located centrally between the Brás and Buracão veins, within the same structural corridor. The vein has the same geologic characteristics of the Brás and Buracão veins and similar mineralization characteristics, including range of gold grades and sulphide concentrations. The primary difference between the Santo Antonio vein and the historically mined veins of Brás and Buracão, is that mineralization does not outcrop at surface and the dominant plunge direction, to date, is opposite of that the Brás and Buracão veins, particularly within the upper panel of the Santo Antonio vein.

The Matinha vein has had limited drilling to date and is located at the eastern extent of known mineralization. The Matinha vein plunges in the same direction as the Santo Antônio vein. While mineralization encountered to date is similar to the other veins, it has exhibited lower gold grades. Additional work in this area is planned to further evaluate continuity of grade and
thickness.

The gold mineralization in all 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 typically bordered on the eastern and western edges by discontinuous breccias of less than 2 metres in thickness. Breccias can be described as those with a siliceous matrix containing angular fragments of quartz veins, a matrix containing pyrite and galena typically containing gold grades less than 5 grams per tonne, and as breccias with a carbonaceous
matrix containing sub-rounded to sub-angular fragments of diorite and quartz vein. Breccias with a carbonaceous matrix have not been found to contain meaningful concentrations of gold.

Ore is currently produced from the Santo Antonio vein– an east-west striking, shear-zone hosted, quartz vein, accessed from a single mine portal and decline and from the Buracão vein.

Economic gold and silver mineralization at the NX Gold Mine is structurally controlled within the Araés shear zone. Gold and silver are currently mined from a major sulphide-rich, laminated quartz vein dipping approximately 40 degrees to the north-northwest and striking to the west-southwest – the Santo Antonio vein, which achieved first production during the fourth quarter of 2019. Prior to the second half of 2019, mining activities occurred in the Brás and Buracão veins, located to the east and west of Santo Antonio, respectively.

The current development of the underground mine is at level -220 in the Santo Antonio vein.

Incorporating geotechnical design parameters, the Santo Antonio vein was sub-divided into two main panels on level -65 (upper) and level -170 (lower) corresponding to the delineation between rock mass quality of the vein. The upper level is, in general, of lower rock quality, thus underhand cut and fill has been selected as the mining method of choice, incorporating the use of cemented paste backfill. The lower panel, which exhibits better rock quality and strength characteristic, will continue to employ the use of inclined room and pillar, with full recovery of the pillars expected utilizing cemented paste in an ascending operation.

The Santo Antonio vein measures, on average, over a total strike length ranging from 150 meters to 300 meters, features an average dip ranging from 32 to 40 degrees and has an average thickness of 3.0 meters. Localized thickening of between 5.0 and 6.0 meters has been observed within the lower panel during operations.

The mining cycle for inclined room in pillar operations within the lower panel of the Santo Antonio vein can be described as follows:

1. 40 mm diameter blasthole drilling at 1.4m depth using jackleg hammers;
2. Installation and blasting of cartridge explosives with a charge ratio of 1.35 kg per blasted tonne of ore / waste;
3. Loading and transport of material with 2-tonne capacity slusher / scraper to the loading drift;
4. Loading and transportation of the ore to the surface using 6-tonne capacity LHD loaders and 20-tonne capacity haul trucks;
5. Manual scaling;
6. Drilling for rock support and installation of splitsets using jackleg hammers according to geotechnical support requirements;
7. Paste fill used as backfill following the primary stage of mining; and,
8. Pillar recovery


The mining cycle for underhand cut-and-fill operations within the upper panel of the Santo Antonio vein can be described as follows:

1. 40 mm diameter blasthole drilling at 1.4m depth using jackleg hammers;
2. Installation and blasting of cartridge explosives with a charge ratio of 1.35 kg per blasted tonne of ore / waste;
3. Loading and transport of material with 2-tonne capacity slusher / scraper to the loading drift;
4. Loading and transportation of the ore to the surface using 6-tonne capacity LHD loaders and 20-tonne capacity haul trucks;
5. Manual scaling;
6. Drilling for rock support and installation of splitsets using jackleg hammers according to geotechnical support requirements;
7. On completion of mining, backfill the stope using cemented paste; and,
8. Frontal attack of the next 3.0 meter slice.

The Nova Xavantina Plant includes a conventional 3-stage crush; ball milling.

Crushing
The nominal rate of the crushing unit is 80tph.

ROM material is transported by trucks from the underground mine and stored in surface buffer piles, with a storage capacity of 3,000 tonnes. From there it is taken up a loader to the feed hopper.

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 a SIMPLEX SXBC 12194 CS with a CSS of 20mm, and the tertiary cone crusher is a SIMPLEX SXBC 12194 CC with a CSS of 12mm. Ore from secondary and tertiary crushers is discharged onto the first screening belt which closes the crushing circuit.

Undersized material (sub 10mm) is placed on the second belt feeder to feed the ball mill.

Grinding
The nominal rate of the grinding unit is 44.5 tph.

Grinding consists of a 12 ft by 19 ft, 1,400 horsepower ball mills, loaded with a 30% charge of steel balls up to 80 mm in diameter. The ball mill operates in a closed circuit with a 15-inch diameter hydrocyclone. The circulating load within the milling circuit is approximately 400%.

In the milling circuit, hydrocyclone underflow passes through a 2mm mesh diameter screen, with the oversize returning to the mill. Approximately one-third of underflow is used as feed for the Falcon centrifugal concentrator and the balance is returned to the mill.

Hydrocyclone overflow with a target P80 of 150 microns is used as flotation feed after passing
through a 1m x 1.5m vibrating screen with mesh diameter of 1 mm.

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.

The plant processes ore produced from the mine into finished doré bars containing gold and silver, as well as lesser amounts of lead.

The Nova Xavantina Plant has the capacity to process in excess of 300,000 tonnes of ore per year. The plant is currently forecast to operate at approximately 45% (160,000 tonnes per year) of its installed capacity, on average, over the current life of mine.

Ore feed into the Nova Xavantina Plant averages 12 g/t gold and 22 g/t silver. The ore of the NX Gold Mine is difficult to process given the ........