The Black Fox Complex is located with other gold deposits near the Destor-Porcupine Deformation Zone. The auriferous zones seem to be associated with an orogenic gold occurrence related to longitudinal shear zones (greenstone-hosted quartz-carbonate vein deposit). They correspond to structurally controlled, complex epigenetic deposits hosted in deformed metamorphosed terranes.

The life of mine (LOM) plan supporting the mineral reserve estimate for Black Fox Mine herein contains a total of 395,000 tonnes with an average gold grade of 8.88 g/t for a total of 113,000 ounces of contained gold. These figures include application of 15 percent dilution.

The production rate is based on available stopes as of October 31, 2017 (the time that the assets were transferred from Primero to McEwen Mining Ontario). Consequently, the mine has a variable monthly mining rate, averaging approximately 500 tonnes per day. The average ounces recovered at the mill per day is approximately 140, which is equal to an average of 4,200 ounces per month over the 26 months in the LOM.

The LOM duration is 2 years and 2 months with no ramp down period during the final year of the plan (2019). The current mineral reserves are exhausted by the end of December 2019.

LOM development requirements are approximately 4,400 metres total. This development consists of 935m of ramps, and 2,030 metres of lateral development, 1,280 metres of sills and 140 metres of raises.

The mine is accessed by a portal located at a bench at a depth of 87 metres within the Black Fox Pit.

Stopes are typically mined in 15-metre lengths along the strike with widths varying from 5 up to 20 metres.

The mining method is long hole retreat. The stope sequencing has generally been top-down as new ore is found at depth.

Cemented hydraulic backfill is used in almost all stopes. Stopes are mined in alternating sequence using backfilled stopes as pillars for subsequent mining of adjacent stopes.

Ore mined is crushed and hauled to the mill.

Crushing is currently carried out at the Black Fox mine site via a contract service (LPL Contracting).

The crushed material is conveyed from the fine ore bin to the feed chute of the primary ball mill which is operated in closed circuit with three (3) hydro cyclones. The cyclone underflow is recirculated to the ball mill while the overflow is further ground in one of the two (2) regrind mills. The regrind mills are operated in closed circuit with five (5) secondary cyclones. The overflows from the secondary cyclones flow to a vibrating trash screen. The trash screen undersize falls into the thickener feed pump box. The head sampler removes feed aliquots on 20-minute intervals from the thickener feed line.

A gravity circuit comprised of a fines riffle and a coarse riffle in series is present in the mill. The gravity circuit was installed as a trial unit and has yet to be commissioned. The riffles are currently not being used without any future commissioning being planned.

There is a #6 Deister shaking table in the grinding section that is currently not in use.

The ground slurry is then pumped to a thickener for dewatering. The thickener underflow is pumped to the first of two (2) leach tanks. An alternate head sampler exists on the leach feed line but is currently not in service. The slurry flows by gravity from the first tank to the second. Lime slurry is added to the first leach tank for pH control.

The overflow from this leach tank flows to a series of two (2) additional leach tanks and four (4) CIL tanks, where the gold now in solution is adsorbed onto 6 to 12 mesh granular carbon.

Six (6) CIL tanks are present at the mill complex, however tanks #1 and #2 are currently being used as the two (2) additional leaching tanks as their inter-tank screen assemblies are not currently installed. If warranted, tanks #1 and #2 can be commissioned after installation of their interstage screens.

The four leach tanks and the four CIL tanks provide a minimum of 36 hours of residence time. Each operational CIL tank is equipped with an interstage screen and a carbon-transfer pump and is agitated to maintain the solids in suspension. Air is injected in the bottom of the leach tanks and in each CIL tank for gold dissolution. Carbon is advanced in the opposite direction to the slurry flow (counter-current) until it reaches CIL tank #3. It can then be pumped to the loaded carbon screen feeding the 3-tonne strip circuit. The loaded carbon oversize flows to the loaded carbon tank. Fresh and regenerated carbon is added into the last CIL tank.

The solution from the last CIL tank overflow goes over the safety screen to the tails surge tank. The screen prevents the loss of carbon in the eventuality of a failure of the last CIL tank interstage screen. The carbon is recovered at the screen oversize. The screen undersize is discharged to the tailings dam. A tailings sampler removes residual product on 20-minute intervals from the final tails discharge line.

From the loaded carbon tank, the carbon is transferred to the carbon strip vessel where the gold is removed from the carbon by a concentrated solution of caustic soda and sodium cyanide at 142°C. The pregnant solution flows out of the strip tank through a heat exchanger to an electro winning cell where the gold is plated onto stainless steel electrodes. Periodically the gold sludge is removed from the electrodes by pressure washing. It is then pumped out of the electro winning cell into a filter press where it is dewatered. On a regular basis the sludge is removed from the filter press, dried and smelted in an induction furnace before being poured to produce a doré bar. The tails from the electrowinning cell are pumped into a barren solution tank. From there they are pumped through the heat exchanger and an electric inline heater back into the strip vessel. Stripped carbon is transferred from the strip vessel to an acid wash tank where scaling is removed by a 3 percent nitric acid wash before the carbon is sent through a carbon regeneration kiln. The kiln is operated at 650°C to remove volatile contaminants from the carbon.

The discharge from the kiln falls into a quench tank. New carbon is also added to this tank and, after attrition, it is transferred to the reactivated carbon sizing screen where fine carbon is removed. The oversize from that screen falls into the carbon conditioning tank from where it is transferred to the CIL circuit as required. The original 1-tonne batch strip circuit remains as an alternative stand-by circuit.