The Kilgore deposit is a zoned, low sulfidation (LS) epithermal hot spring precious metals (Au, silver [Ag]) deposit the result of caldera-related volcanic activity. These deposits are commonly bulk-tonnage, lowgrade, and amenable to open-pit mining. Numerous scientific articles have been written and published on this deposit type concerning its origins, physical, chemical, and geological settings, recognition criteria, major- and trace-element geochemistry, zoning, alteration types, ore mineralogy, ore grades and distribution of ore, and mining characteristics. Models are described in papers by Buchanan (1981), Silberman (1982), and Berger (1985), among others, and the reader is referred to these for more information on the subject.

Gold mineralization at Kilgore occurs within two suites of receptive host rocks: 1) in rocks of volcanic or subvolcanic origin, including the Tlt, Tap, and the sub-vertical granitoid dikes, dike swarms, and granite to granodioritic bodies that intrude it, and 2) the sedimentary turbidites composed of arkosic sandstones and siltstones, and carbonaceous shales of the Aspen Formation.

Gold mineralization in the volcanic and related intrusive rocks contains high grade zones as a result of weak to moderate vein development and open space fracture-fill, together within a broad, low grade halo of disseminated gold within variably silicified and argillically altered rocks. Gold content appears to decrease rapidly to lower grades (l ........

Conventional open pit mining methods using drill, blast, load, and haul mining are applicable to the Kilgore deposit.

The PEA evaluated pits that were generated excluding the Aspen material and pits that were generated including the Aspen material. Based on review of metallurgical test work of the Aspen Formation, which shows variable recovery for different zones, GRE assumed 60% of the Aspen material would be leachable, while the other 40% was considered waste. Similarly, 60% of the reported gold ounces within the Aspen rock type were included as contained ounces and the other 40% were considered waste. GRE recommends additional geologic analysis of the Aspen Formation to identify and model the good- performing metallurgical domain relative to the portion that requires CIL or CIP processing efforts.

GRE evaluated two leaching options for each of the ultimate pit designs:

- crushing of all material above the mining cutoff grade;

- a combination of run-of-mine (ROM) and crushing:
- ROM of all material above a cutoff grade of 0.004 opt (0.14 g/T) up to the mining cutover grade;
- crushing of all material above the mining cutover grade.

Each pit was evaluated at five mining cut-off grades: 0.006 opt (0.2057 g/T), 0.007 opt (0.24 g/T), 0.008 opt (0.274 g/T), and 0.009 opt (0.309 g/T), and 0.010 opt (0.343 g/T).

The Kilgore deposit includes potentially recoverable silver content as well as gold. Silver a ........

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Modeling of the heap operation on a monthly basis over the projected mine life indicates that operation of the HLF requires a water supply with an approximate average flowrate of 259 gpm (59 m3/hr). An additional 88 gpm (20 m3/hr) is required for mine, shop, and office water consumption.