Gold mineralisation at Kailis is hosted in quartz-sericite schist within a broad north trending, shallow to moderately dipping (40-50 degrees east) shear zone with a strike length in excess of 1800m. Mineralised intervals are often narrow (3-8m) but thicken to 15-20m in places. Structural studies identified narrow sub vertical NE-SW trending quartz vein sets that cross cut the main shear zone as possible controls on high grade mineralisation. The best gold grades tend to occur in the oxide and transitional zones with lower grades in the fresh rock. Mineralisation is open at depth but closed along strike.

Kailis is currently in production and active grade control infill and Resource extension program will be undertaken as part of normal mining activities.

The Kailis deposit is amenable to mining using the open pit mining method. The deposit has successfully been mined by open pit in the past. There are reasonable grounds to assume that in the future this deposit will again be mined by conventional open pit load and haul operations.

The Kailis Gold Mine operated as an open pit mine from 2000-2001. All documentation relating to the operation parameters for the pit have been obtained and well understood. Since acquiring the Kailis assets Saracen has undertaken a detailed feasibil ty study with mining and processing parameters updated to reflect current conditions.

Mining at the Kailis open pit recommenced under Saracen ownership in April 2017.

Mining method currently employed is conventional hydraulic excavator and dump truck fleet, with 360t and 120t class excavators used. The class of excavator employed matches with those currently utilized at Thunderbox mining and as well as those operated at SGM’s Carosue Dam Operations, providing good comparative cost data for financial modelling, as well as a reliable database of production and productivity rates. Kailis deposit will be mined as large cutback, extending the existing pit both to the west and east. Appropriate mine schedule and lead time has been applied to allow continuous efficient mining operation.

Based on historical mining at Kailis, gold recovery factors for oxide and transition ore are around 94% and that the gravity gold recovery is as high as 65%.

The ore reserve will be treated at the established Thunderbox processing facility. The Thunderbox Process Plant is a CIL cyanide leach plant incorporating a gravity circuit which is appropriate for the extraction of gold from free milling gold ores.