The target mineralisation at the Project’s V1 and V2 deposits are characteristic of typical nickel laterite deposits formed in a seasonally wet tropical climate, on weathered and partially serpentinised ultramafic rocks.

The Vermelho nickel deposits consist of two hills named V1 and V2 (after Vermelho 1 and Vermelho 2), aligned on a northeast-southwest trend, overlying ultramafic bodies. The ultramafic bodies have had an extensive history of tropical weathering, which has produced a thick lateritic profile of nickel-enriched limonite and saprolite at V1 and V2.

The V1 and V2 deposits form flat lying topographical highs, where V1 body reaches heights of around 500 m, standing out from the adjacent terrain about 175 m whereas the V2 body has a maximum height of 450 m. The flattened terrain adjacent to the two bodies represents the gneiss ground that hosts the layered intrusion of Vermelho. The V2 hill is located approximately 2 km southwest of V1. The V1 hill has a deformed convex-concave shape (convex to northeast), and extends for approximately 2.4 km east-west, ranging from 700 m to 1.6 km north-south. The V2 hill has an east-west elongation, and extends for approximately 1.9 km east-west, ranging from 600 m to 900 m north-south. The V1 deposit has an average thickness of 53 m and a maximum thickness of 146 m, whereas the V2 deposit has an average thickness of 56 m and a maximum thickness of 115 m.

The ultramafic bodies are erosional relicts ........

Typical truck and excavator mining using contractors is proposed. The proposed mining cycle would include the following primary activities:
• Grade control;
• Clearing, stripping and stockpiling of topsoil;
• Drill and blast (where necessary);
• Haulage, stockpiling and re-handling of ore and sheeting material;
• Rehabilitation of mining areas with stockpiled topsoil.

Ore will be hauled from the pit to stockpiles or to ROM. Ore from the long-term stockpiles is then re-handled and hauled from these stockpiles to the ROM for further re-handle into the plant.

Waste will be placed on external waste dumps. Pits are not intended to be backfilled at this stage, as the waste component for this Project is low and mineralised material is at the base of the pits which may be economic. Backfilling pits remain an opportunity for the Project to reduce mining costs.

The primary aim of this mining operation will be to maximise margin, particularly in the early life of the mine, and to supply ore to the processing plant so it that maintains a constant acid consumption below 350 kg/t HPAL feed. The mining layout and methodology relies on a combination of mining selectivity and stockpiling. The stockpiling strategy proposed in this study relies on dividing ore into different stockpiling ranges to maximise nickel grade and control acid consumption. The stockpile categories are based on material type and profit per tonne (PPT), or revenue ........

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