The LS deposit is a polymetallic, VMS deposit. VMS ore deposits are a type of metal sulphide deposits which are associated with and created by volcanic-associated hydrothermal events in submarine environments. They occur within environments dominated by volcanic or volcanic derived volcano sedimentary rocks, and the deposits are coeval and coincident with the formation of the volcanic rocks. VMS deposits form on the seafloor around undersea volcanoes along many mid ocean ridges, and within back-arc basins and forearc rifts.

VMS deposits are characterized by clusters of lenses occurring within a distinct stratigraphic layer. The extensive alteration zone on the property suggests that hydrothermal activity was prolonged and that additional lenses associated with separate alteration zones may exist.

The entire Property (exploration permit) is covered by a paleo-fluvial fan that ranges in thickness up to 200 metres (m) within the Tertiary Sado Basin and averages 135 m over the deposit area. The Tertiary sedimentary rocks unconformably overlie rocks of the Volcano-Sedimentary Complex of the IPB. This sequence of rocks ranges in age from Upper Famenian to Middle Visean and is represented on the property by a northwestsoutheast lineament which is approximately 8 km long and over 1 km wide.

The LS Project currently comprises two known deposits, the Venda Nova North and South Deposits. The deposits are folded, faulted, and interpreted to occur mostly on the subvertical-overturned and intensely faulted limb of a south-west-verging anticline (Matos et al. 2003).

The Venda Nova North Deposit is comprised of gossan (GO) mineralisation resulting from weathering of the underlying primary massive sulphide (MS) mineralization which in turn is underlain and surrounded by copper-rich stringer / fissure / stockwork mineralisation.

The Venda Nova South Deposit comprises copper-rich stringer / fissure / stockwork mineralisation and isolated gold-rich silicified zones which appear to be structurally controlled. It is hosted in a unit locally known as the iVfr. The iVfr is heterogeneous, being composed of intricately interleaved dacitic-andesitic-basaltic volcanic rocks.

There are four types of mineralization at the LS Property: primary MS mineralization, GO mineralization resulting from weathering of the primary mineralization, copper-rich stringer / fissure / stockwork mineralization, and gold-rich silicified zones which appear to be structurally controlled. To date, the mineralized system of the North deposit has been drill tested over a strike extent of approximately 500 m and appears to be open to the south and east. Recent geophysical surveys have found three anomalies, similar in signature to that of the North deposit (former LS-1), continuing to the south-east along strike, over 900 m. The furthest of these anomalies has been drill tested and it is the South deposit (former LS-1 Central deposit).

The MS mineralization occurs in steeply dipping to vertical isoclinal folded volcanic rocks. Primary MS mineralization has been intersected in several diamond drillholes. This mineralization has variable, but significant, base and precious metal values. The best example of this style of mineralization was intersected in drillhole PX-04 and, most recently, in drillholes LS_MS_01 and LS_MS_02. The MS body appears to be cut by postmineral faults and its relationship to the surrounding stratigraphy is not well understood. The faulting has likely caused a displacement of the continuation of the deposit. The thick overburden cover and the depth of the mineralized body precludes drilling the deposit with a shallow dipping drillhole. For this reason, most of the drilling on the deposit has been either with vertical or steeply dipping drillholes. This has resulted in drillhole intersections that are less than ideal and almost parallel to the primary stratigraphy of the sulphide body. The true thickness of the deposit therefore cannot be determined from single vertical drillhole intersections. The 2017 drillholes were all angled, which helped in the interpretation of the deposit. The thickness of the deposit is inferred as being somewhere between holes that intersected the MS and those that have intersected the footwall or hanging-wall rocks. Additional drilling is required to determine the size of the known MS deposit. GO mineralization results from the weathering of primary MS mineralization. It is preserved at LS because of the Tertiary sedimentary rocks covering the palaeosurface, in a situation analogous to the Las Cruces copper deposit in Spain.

GO mineralization at LS seems to be comprised of a lead rich leached cap, underlain by a precious metal-rich supergene enrichment zone. This is well displayed in hole LS-09. Copper-rich stringer / fissure stockwork mineralization consists of sulphide veins and stringers in chloritic volcanic rocks, and represents alteration associated with the feeder system to the MS mineralization. This type of mineralization is well-developed in other IPB deposits such as Feitais (Aljustrel) and Neves Corvo and is best typified by the intersections in drillhole LS-20.

The Lagoa Salgada Project is planned to be mined using underground mining methods. The option of open-pit mining was discarded due to the characteristics and depth of the orebody.

The proposed underground mine design supports the extraction of 2.0 million tonnes of ore per year (“Mtpa”) through a combination of transverse sublevel stoping and cut&fill. Paste backfill is used in both mining methods to maximise ore recovery and productivity. A main decline, starting from the surface portal located close to the processing plant, will be used to access the mine. This main decline then splits into two ramps, one for each mine zone (i.e., “North and South”). A fleet of LHDs (load-haul dumps) and trucks will be used for the loading and hauling of material from production areas to the orepass system. From the orepass collecting points, trucks will haul the ore to the surface. Waste is also transported to the surface by trucks.

A pre-production development programme will be required to provide access to the initial stoping levels in the North Zone during the first two years. Production will start in the second year, reaching the nominal plant feed in the fourth year.

The mine portal will be situated close to the processing plant. The main ramp bifurcates into two independent declines, one for each mine area. In each zone, the internal decline connects all working levels.

The ramps were designed with a 25m turning radius and a maximum gradient of 13%. Although the design does not provide for passing bays, it allows for an additional 25% of decline design meters if future developments require it.

Working levels were placed at vertical intervals of a 25 m, defined by the stope height, and accessed through the internal declines. The footwall drives and declines were set back from the ore contact at a minimum of 40 m and 70 m, respectively. The typical stoping level configuration is fresh and return airways are placed at the ends of the sublevels and the level access is located at the middle of the footwall drive.

The cut&fill mining method has been selected for the upper levels in the North orebody (levels 42, 50 and 67). All other areas will be mined using the sublevel stoping method.

- subscription is required.

The Process Design Criteria for the project is developed based on available data including the project schedule and benchmark IPB operation details. The plant is designed for a total of 2Mtpa or 250tph throughput to produce two concentrates. Based on this, the plant LOM is expected to be 14 years. The crushing plant is designed at 65% availability, while the main plant will operate at 92% availability.

Based on head grades of 0.31% for Cu, 1.44% for Zn, and 1.22% for Pb the average commodity recoveries are 80% for the Cu SW and 25% for the Cu MS, 80% for the Zn, and 75% for the Pb respectively. It is to be noted that due to fluctuations of the head grades of the different minerals from the initial years of operation through the LOM, the plant has been designed for the range of head grades of each mineral, rather than on the average grades. Same logic has been used as part of the equipment selection and sizing.

The conceptual methodology process flowsheet envision ........