Haile gold mineralization occurs as an en echelon 5 km long by 1.5 km wide cluster of moderately to steeply-dipping ore lenses within a ENE-trending anticlinorium. Eleven named gold deposits are recognized at Haile. From west to east these include Champion, 601, Small, Mill Zone, Haile, Ledbetter, Mustang, Red Hill, Palomino, Snake and Horseshoe. Ore body geometry, depth, size, grade, mineralogy and alteration are variable between deposits. Ore zone geometry is strongly controlled by post-mineral folding and position within the Haile anticlinorium. Some of the deposits coalesce, especially in the central part of the district around the large Ledbetter deposit. Ore lenses are typically 50 to 300 m long, 20 to 100 m wide, and 5 to 30 m thick.

Gold mineralization at Haile is mostly hosted by folded laminated siltstone and greywacke of the upper Persimmon Fork Formation and is capped by less permeable volcanic rocks. Mineralization is typically within 100 meters of the sediment-volcanic contact. Mineralized zones at Ledbetter, Red Hill and Snake are partly hosted in volcanic rocks.

Gold mineralization at Haile is disseminated and occurs in silicified and pyrite-rich metasediments with local K feldspar and molybdenite. Mineral zonation is a quartz-sericite-pyrite+-K feldspar+- gold (QSP), sericite +- pyrrhotite propylitic (chlorite-calcite-epidote) haloes. QSP mineralized zones are tens of meters wide. Sericite envelopes range in thickness from tens to hundreds of meters and are controlled by protolith, structural permeability and post-mineral folding. Within the mineralized zones, quartz is dominant (60% to 80%), pyrite is moderate (1% to10%), and sericite is variable at 5% to 20%. Two silicification events are observed in the mineralized zones. Early massive silicification is finely disseminated to diffuse. Later silicification is manifested as matrix fill in tectonic and hydrothermal breccias and as stock work veinlets. Sericite alteration is commonly expressed as sericite schists due to sericite replacement of micaceous layers in metasediments, imparting a tannish white color. Bleaching and/or argillisation is weakly developed within and adjacent to sericite zones. Propylitic alteration is characterized by increased chlorite (5% to 20%) and a mottled texture with blebs of 3 to 5 mm calcite aggregates. Late calcite +- quartz veining is focused along fault zones.

High-grade zones >3 g/t Au are characterized by intense silicification, anastomosing quartz veins, hydrothermal breccias and >1% fine-grained pyrite. Pyrite grain size is typically <20 microns and occurs as stringers, lenses and banded layers, including graded beds and reworked sulfide sediment. High grade zones are focused where ENE faults coincide with anticline axes in folded metasediments adjacent to the overlying metavolcanic rocks. The Horseshoe deposit averages over 4 g/t and occurs within a tight anticline dissected by ENE-trending, NW-dipping faults.

Oxidation at Haile extends to depths of 20 to 60 meters and is deepest along faults and in folded volcanic rocks. Hematite and goethite are strongest near surface, accompanied by saprolite, and decreased at depth to weak joint stains.

Gold spatially correlates with molybdenite, silver, arsenic, antimony, molybdenum, and tellurium at Haile (Mobley et al., 2014). Arsenopyrite, chalcopyrite, galena, and sphalerite are rarely associated with gold mineralization.

Mining at Haile is undertaken by open pit, utilizing 5m benches in ore and 10m in waste, at a rate of approximately 63,000 tonnes per day. Ore and waste are hauled by a fleet of 12 - 90t CAT 777F haul trucks supplemented by 3 - 150t CAT 785D units. The primary ore loading unit is a 230t CAT 6020B excavator while the primary waste loading tool is a 190t Hitachi 1900 shovel.

The mine plan produces 2,840 ktons of gold bearing ore in production year 1 for delivery to the processing plant (6,350 tpd for 365 days/year). Total material movement of 22,300 ktonnes/year (63,000 tpd) is planned in year 1, then steadily increases to 35,000 ktonnes/year (95,900 tpd) by year 5 of the operation.

A combination of hard rock and soft rock will be encountered in the deposit during the mining process. Drilling and blasting will be required for the hard rock units at Haile. The coastal plain sands will not require blasting. Saprolite will require drilling in ore zones for ore control but will require only localized blasting near the bedrock contact.

Potentially acid generating waste rock is stored on a lined facility with lo-grade ore (0.36 g/t – 0.82 g/t). Non-acid generating waste rock is stored in multiple Overburden Storage Areas (OSA’s) positioned across the property. Higrade ore (+0.82 g/t gold) is delivered to the ROM pad where a CAT992 rubber tired loader transfers the ore to the ore bin for crushing.

The open pit mining method currently in practice is well suited to the Haile orebody because of the orebody’s shallow to moderate dip, extensive strike length and thickness.

A conventional flotation and cyanide leaching flow sheet is used at HGM. The following summarizes the current operating process used to extract gold and silver.

The process plant consists of the following major components:

• Crushing and conveying;
• Storage and stockpiling of ore and reclaim;
• Grinding;
• Flotation;
• Regrinding of concentrate;
• Carbon in leach (CIL) recovery of precious metal values from reground flotation concentrate and flotation tailings;
• Acid washing and elution of precious metal values from CIL loaded carbon;
• Electrowinning and refining of precious metal value;
• Thermal regeneration of eluted and carbon and recycle to CIL; and
• CIL tailing thickening, cyanide recovery, detoxification and pumping of slurry to storage.

A relatively compact RoM ore area is provided for either direct tipping of ore deliveries, or storage and re-handling, into the crusher.

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