The Pilar Mine is located in the southern part of the MCSA Mining Complex within the Curaçá Valley. The geology of the mine consists of a high-grade metamorphic terrain, composed of gneiss and migmatite of the Caraíba Complex that were intruded by mafic, ultramafic and late granitic rocks. The mafic and ultramafic intrusions are mainly composed of pyroxenite, norite, and gabbro. The melanorite is a term used for logging purpose to describe a host rock, either a gneiss, a gabbro or a norite, that is intruded by several mafic-ultramafic dykes that are too small individually to be logged separately.

Mineralization at the Pilar Mine is composed of copper sulphides in the form of chalcopyrite, bornite and rarely chalcocite that occur in four different styles: disseminated, veins, massive, and brecciated. Other sulphide minerals include millerite, pyrite and pyrrhotite. Magnetite is the dominant oxide mineral and occurs intergranular together with chalcopyrite and bornite. The sulphides are heterogeneously distributed in the pyroxenite units in the form of lenses that trend N-S, dip steeply to the west and range from less than 1 meter to 20 meter thick. The mineralized bodies occur in sharp contact with migmatites and at variable angle to the main foliation of the host-rock. Strongly foliated sub-vertical anastomosing shears as well as brittle faults cross-cut and locally displace the mineralization.

Mining operations were assumed to be the same as for the Deepening Inferred Project, using a combination of transverse stoping and longitudinal stoping mining method. Dilution was set to 1.0m, comprised of 0.5m for the hanging wall, 0.5m for the footwall and a maximum waste percentage of 75%.

In support of the Deepening Inferred Project, an additional 15km of horizontal development is required when compared to the Deepening Extension Project. In support of the Deepening Inferred Project, an additional 554 m of vertical development is required when compared to the Deepening Extension Project.

Extraction of mined material from the Deepening Inferred Project required the addition of two new panels below -1381L, as the production panels and supporting infrastructure to be built from level -1069 to -1381 are shared by the Deepening Extension Project. The primary ramp continues at depth beyond the Deepening Extension Project and is designed to follow the mineralization to the north. The bottom of the new external hoisting shaft that will be built in support of the Deepening Extension Project will be completed to the -1075 Level. Two new panels with 4 production levels each are designed below -1381 Level in support of the Deepening Inferred Project.

For the Deepening Extension Project the same mining method will be employed as the rest of the Pilar UG Mine. A panel height reduction from 35m to 26m will be applied to improve mining recovery and reduce dilution. The mining sequence will be divided based upon the presence of both narrow and thick stopes within the mine design. Longitudinal will be applied to narrow stopes (shown in blue below) and transverse will be applied to thick stopes (shown in red below). The planned modifications to the mining sequence and stope design for the Deepening Extension Project is expected to provide less overbreak and dilution, enhance the stability of the operation and improve mining recovery.

The Pilar UG Mine has previously employed the following mining methods: Sublevel Stoping, VRM and Vertical Crater Retreat (“VCR”). VRM is the method currently employed, whereby ore is removed from the stope after it is blasted and cemented paste backfill is pumped into the mined stopes to ensure geotechnical stability prior to advancing to adjacent stopes.

The current VRM method in currently in use varies in dimensions, with an average stope height of 35m.

The Pilar UG Mine ramp development utilizes a maximum design grade of 15% and 25m radius on center. Ramp design targets an average distance of 20m from the ramp to ore gallery access to limit access development requirements.

Gallery access design dimensions of 5.0m x 5.5m are employed due to the size of the equipment operated by MCSA and the infrastructure necessary for further development of the galleries (ventilation ducts and production equipment access). Production gallery design dimensions are 4.5m x 4.8m. Transport crosscuts are located at an average distance of 35m from the orebody and are made parallel to the mineralized zone.

The material (ore and waste) produced from the Deepening Extension Project will be directed to a new external vertical shaft, that will connect the underground mine at the level -1,075 to the surface. The new transportation shaft will be commissioned in early 2025.

All stope excavations are backfilled with cemented paste or rockfill. All areas are designed to use cemented paste as the main backfill system. Paste fill uses a combination of flotation tailings and cement, which is used to fill mined out stope volumes to provide additional support, reduce in-situ stresses and increase mine recoveries. Paste comprised of thickened tails and approximately 4% cement by weight is gravity fed from the paste fill plant to the underground workings as called for in the production sequence. Paste backfill will be delivered to Deepening Extension Project via the existing surface borehole located adjacent the existing paste plant. Two new lines will be built for the P1P2W and Baraúna mining areas, as shown below.

All the development for the Deepening Extension Project will be performed utilizing MCSA’s own equipment and personnel. Production activities will be performed using radial long-hole drills for blast holes. Loading (mucking) will be performed using long haul dump trucks (“LHDs”) and 27 tonne conventional trucks will be used for ore haulage. Production crews will share emulsion loading vehicles for blasting of the stopes. Loading and transportation will be done with 10 cubic yard LHDs between stopes in the production levels and stockpiles. From the stockpiles the material will be directly loaded to trucks with 10 cubic yard LHDs. Transportation to the underground crusher will be done using 27 tonne conventional t trucks. The proposed mucking/haulage fleet was selected to accommodate excavations 5.0m wide by 5.5m high. For the purposes of this Report, the existing loader and truck combination fleet type was selected for operational synergies. For waste haulage, the same trucks will be used as currently in operation.

All ore is transported for treatment at the Caraíba Mill.

The Deepening Inferred Project is expected to utilize the same infrastructure that will be built in support of the Deepening Extension Project, including a new external shaft.

The expansion to increase capacity to 4.2Mtpa of annual mill throughput requires the installation of quaternary crushing, additional increase in screening capacity, upgrades to the flotation circuit to ensure residence time is not impacted, and an increase in concentrate filtration capacity. While there are a number of options available for quaternary crushing, the characteristics of the Caraíba ore make it amenable to High Pressure Grinding Roll (“HPGR”) crushing. Additional laboratory testwork is planned to confirm the HPGR sizing and design route and has been included in the capital cost estimates.

As a result of increased demands for the quality and delivery of paste associated with the Deepening Extension Project, modi ........