The geology of the property consists of metamorphosed Devonian sedimentary rock overlain by a volcanic and sedimentary sequence of Permian age and remnant scraps of probable Jurassic volcaniclastic units, intruded by Jurassic plutons ranging from diorite to granite in composition and including rhyolitic phases mainly as dikes. Petrographic study suggests simple, single-pulse injections of the intrusions, with late-stage generation/expulsion of felsic phases and contemporaneous concentration of metal-rich fluids.

Mineralization at ATO is probably related to the Jurassic intrusive magmatic rocks as sources of heat, metals, and fluids. The main ATO system is associated with a stratigraphic unit that appears to be localized in a graben or collapse feature that is possibly but not certainly Jurassic in age; any stratigraphy could potentially be prospective for this style of mineralisation. The ATO mineralisation appears to have occurred as a protracted single-stage process in separately upward-flaring pipe-shaped bodies, with temperatures ranging from ~300-350°C at depth to possibly ambient temperature in surficial sinter.

Metal zonation: In a broad sense, metal zoning shows a clear, classic pattern of intrusion-centred copper (plus or minus molybdenum, tungsten, gold, and other elements) outward to country-rock hosted lead, zinc, and silver (plus or minus gold, arsenic, antimony, mercury, and other elements). It is presumed that this lateral zonation also occurs vertically, as evidenced by increasing copper values at depth in ATO.

It is believed that the ATO deposit is an epithermal gold and polymetallic deposit of transitional sulphides in breccia pipes in a Mesozoic continental rift zone in eastern Mongolia. Formation of breccia pipe: Tectonic-magmatic activities began to take place in the area around ATO deposit in Early Jurassic when hydrothermal and metasomatic alterations and mineralisation were formed in relation to intrusions and dykes. Absolute age of an intrusive massive located outside and east of ATO prospect area was determined to 189 million years.

The pipes that have been identified in the deposit are aligned in a row in a structure with a trend from southeast to northwest and form mineralisation with differing horizontal geochemical zonation with certain metallic concentrations. Noel White (2001) devised a pattern of flow of fluids based on this geochemical zonation similarity with that found adjacent to porphyry copper intrusions. White’s model postulates that the horizontal mineral zonation between the ATO pipes could originate from a large intrusion (such as a porphyry copper) located tens of kilometres away from ATO deposit.

The mining method selected for the Project is a conventional open pit operation with rigid body mining trucks, hydraulic excavators, and wheel loaders. The Project consists of two (2) separated mining areas: the ATO and the Mungu Pits. Only open pit mining is considered in this Report; however, the Mungu Pit is open at depth and only a small portion can be mined economically. Therefore, there is an opportunity for the Mungu Pit to be expanded to an underground mine once the open pit reserves are depleted.

The oxide ore will be transported by truck from the pit to the leach pad, and the transition and fresh ore will be transported by truck to either a stockpile or the mill. Waste material will be deposited in waste stockpiles. Ore sent to the mill is a combination of transition and fresh material; however, there is no need for a particular blend of these ores. Marginal ore (above the marginal COG, but below the mining COG) will be mined and processed throughout the LOM to supplement leach pad and mill feeds. The mine will operate year-round, seven (7) days a week, twenty-four (24) hours a day (two 12-hour shifts). 35 days of downtime are considered due to weather delays as well as holidays, for a total of 330 operating days a year.

The mine plan was based on a production rate of 1.2 Mtpa of oxide ore at the leach pad and 2.20 Mtpa of transition and fresh ore at the mill. Mine planning was performed using Hexagon MinePlan Schedule Optimiser (MPSO) module based on the final pit designs, the intermediate pushbacks described in the following section, and the mineral resources block model. The mine plan was estimated on a monthly basis for the first three years of mill use, and then annually for the LOM. The ATO pit was separated into three (3) pushbacks while the Mungu pit, due to its small size, was considered to be a single pushback.

The crushing circuit is designed for a capacity of 2.2 Mtpa and will be installed as part of the Phase 1 expansion.

A three-stage crushing circuit will reduce run-of-mine (ROM) material from an F100 of 800 mm to a P80 of 10 mm. The primary crushing circuit is utilised for an annual operating time of 5,694 h/a or 65% utilisation and operates in open circuit. ROM material is dump-fed into ROM hoppers, installed in parallel. The primary crusher feed will be drawn from the ROM hoppers by vibrating grizzly feeders to feed primary jaw crushers, installed in parallel. Grizzly feeder undersize (U/S) is bypassed and conveyed to a primary crushing screen allowing for U/S material to be stockpiled. Jaw crusher product from both streams is combined with primary crushing screen oversize (O/S) and conveyed to the primary crushed ore stockpile. The primary crushed ore stockpile has a feed rate of 361 tph with a full capacity of 5,953 t. Primary crushed material is reclaimed via three vibrating pan feeders at a controlled rate of 313 t/h to feed the secondary and tertiary crushing circuit via a conveyor.

The secondary and tertiary crushing circuits are utilised for an annual operating time of 6,570 h or 75% utilisation and operates in closed circuit with screens. Secondary crusher product is screened with U/S reporting to the fine ore (mill feed) stockpile and O/S from the secondary crushing screen is conveyed to one (1) of three (3) tertiary crushing bins and distributed evenly via fixed trippers. Tertiary crushing is completed using three cone crushers installed in parallel in a closed circuit. The cone crusher product is conveyed to dry screens for classification. O/S material is combined with secondary crushing screen O/S and recirculated to the tertiary crushing bins. Tertiary screen U/S is combined with the secondary screen U/S and conveyed to the fine ore stockpile which has a live capacity of 1,400 t.

Crushed ore product is reclaimed via one of two apron feeders installed underneath the fine ore stockpile. Fresh feed is collected at a controlled rate to feed the concentrator feed conveyor. The concentrator is utilised for an annual operating time of 90% utilisation.

The grinding circuit consists of two-stage sequential grinding with a primary ball mill in closed circuit with a classification screen followed by a secondary ball mill in closed circuit with hydrocyclones. Fresh feed is weighed prior to discharging into the primary ball mill feed trolley and combined with process water. The product is discharged through a trommel with O/S screened out and discharged to a scats bunker. U/S is discharged into a pump box and pumped to a classification screen. The O/S is gravitated back to the primary grinding mill and combined with fresh feed while U/S material with a transfer size (T80) of 720 µm is gravity-fed to the secondary grinding feed pump box for further size reduction.

The secondary grinding circuit operates in a reverse feed arrangement, with feed classified by a hydrocyclone cluster to bypass fines. The ball mill product is discharged through a trommel with O/S screened out and discharged to a scats bunker. U/S is discharged into the secondary grinding feed pump box and recirculated for further classification and size reduction. The cyclone underflow is fed into the secondary grinding mill feed trolley, along with process water. The overflow is sampled, and gravity fed to the lead rougher flotation conditioning tank via a trash screen to remove foreign material.

The Phase 2 Concentrator will consist of collecting the crushed ore beneath the ore storage building, conveying to the concentrator, milling, flotation, and dewatering unit operations to produce saleable concentrates of lead, zinc, and pyrite. Tailings will be disposed of in the new Tailings Storage Facility (TSF).

Lead Concentrate Flotation
Grinding product is combined with process water and reagents and mixed thoroughly. The slurry is conditioned and fed to the lead rougher flotation cells. The circuit consists of six (6) tank cells. The lead rougher flotation concentrate is pumped to the lead regrind circuit to liberate the base metal sulphide minerals present to allow for cleaning and separation. The regrind circuit consists of a tower mill operating in open circuit with a scalping cyclone. The overflow material at a P80 of 17 µm combines with lead rougher regrind mill discharge and is sent to the first lead cleaner flotation stage. Lead rougher flotation tailings a ........