Medgold’s exploration programmes in southwest Serbia have targeted magmatic-hydrothermal type mineralization related to Cenozoic magmatism in the Western Tethyan Metallogenic Belt, with deposit styles including porphyry, epithermal, skarn and carbonate replacement deposits (CRD).

The Property hosts three identifiable mineralized zones at the Barje Deposit, the Liska Prospect and the Karamanica Prospect.

The Barje Deposit
The Barje Deposit is the most advanced mineralized zone within the Property. It is located on an east-west trending ridge at elevations ranging from approximately 1100 m in the east to 1300 m in the west. Historical prospecting located two main areas of outcropping gold and base metal mineralization at Barje. Medgold’s drilling has confirmed the continuation of mineralization between and to the west of the discovery outcrops in an area of 700 m east-west by 250 m north-south (Medgold Resources Corp, 2019a). Said mineralization is controlled by a hydrothermal breccia, of up to 20 m in thickness, following a structure inclined approximately 18° towards the south. This structure cuts a fault-bounded sequence of schist and conglomerate above a dacite sill intruded along a detachment surface at the top of the Crnook basement. While mineralization is strongest in the hydrothermal breccia, a halo of lower-grade mineralization is also found in the overlying rocks. The hydrothermal breccia comprises transported clasts of the local wall-rocks cemented by a matrix of quartz ± calcite/siderite and sulphide minerals, including pyrite, arsenopyrite, sphalerite, galena and more rarely chalcopyrite and tennantite. Grains of electrum up to around 50 µm in size and containing approximately 60% Au and 40% Ag, have been observed microscopically within the higher-grade mineralization.

The Liska Prospect
The Liska Prospect is situated 1500 m southwest of the Barje Deposit at an elevation of approximately 900 m. During 2019, Medgold carried out drilling. The combined area of mineralization reported from State drilling and Medgold’s drilling is approximately 680 m north-south by up to 270 m east-west.

The mineralization is associated with a flat-lying faulted boundary between overlying conglomerate units and underlying schist units; these appear to be similar lithologies to the conglomerates and the lower schist units, respectively, at Barje. Mineralization occurs at and below the boundary between the conglomerates and the schist with thicknesses of up to approximately 50 m. The zone outcrops at surface in the south of the Prospect and continues to depth under higher topography to the north.

The current spacing of Medgold’s drill holes does not allow geostatistical calculation of continuity within the mineralization; estimates using Medgold and historical State data suggest continuity in the order of 100 m to greater than 250 m north-south and 50 metres to 100 metres east-west. Mineralization consists of quartz-pyrite veins of up to approximately 4 centimetres in width containing sphalerite and galena.

The Karamanica Prospect
The Karamanica Prospect covers numerous minor occurrences of gossan, alteration and vein related mineralization recognized during exploration by Yugoslav State agencies between the 1950s and 1980s. The State exploration work led to the discovery of the Podvirovi occurrence. Rock sampling by Medgold has confirmed the presence of hydrothermal alteration and veining with elevated levels of gold and base-metals at multiple locations within the Prospect but with no significant continuity between elevated values. Scout drilling by Medgold during 2019 intersected only minor lead-zinc mineralization in quartz-carbonate veins associated with a fault zone and the margin of a porphyritic intrusion.

The Barje Deposit is relatively thick, flat-lying and situated under shallow to medium-depth overburden. Initially both low-cost open pit, as well as underground methods with higher selectivity were considered, however open pit methods were preferred on account of the overall low stripping ratio and generally low RQD of the rock mass Mining via open pit methods using hydraulic excavators and wheel loaders charging articulated dump trucks for haulage of both waste and potentially economic material is therefore projected. Mining activities at Barje will include free- digging of the weathered zones, the blasting of fresh rock, and loading, hauling and dumping of the respective materials, plus mining support activities. The removal and stockpiling of topsoil will be performed prior to mining.

A preliminary geotechnical characterization was undertaken, including logging of resource drill holes geotechnically for RQD, plus visual observation of cores for validation. RQD is generally low to moderate, with values ranging from 20% to 70%, although higher RQD was determined for the calcareous schists. Preliminary overall slope angles of between 37° (West) and 41° (East) were selected. No testing or modelling of pit hydrogeology has been completed to date, however reasonable provisions for pit water management including perimeter dykes and diversion ditches, in-pit water collection ditches, and in-pit pumps and collection systems to transfer water from the open pits to discharge points for settling, and potentially treatment prior to discharge, have been made.

Due to the relatively short mine life the pit stages were scheduled in periods of three months to ensure that the mine capacity was smoothed out as much as possible and that the stockpile levels were controlled in order to provide some smoothing of the grade profile. The total mine life is almost eight years with two years of stockpile reclaim at the end.

Mining will commence in two distinct areas. Firstly, to the east where the waste stripping ratio is relatively low, and it is possible to access the HG_BX material close to surface. However, in this area the deposit pinches out to the east and does not extend in depth more than 50 m below surface.

The next main area of mining will be in the central portion where the topography again helps as there is a low stripping ratio and high-grade ROM can be accessed quickly by expanding the pit from the south. This logically means that the pit exit will be to the south and the plant should be located to the south east of the pit. Low grade material can also be stockpiled near this pit exit in the valley that runs to the south east

A total waste rock storage capacity of 26 Mt is required. This can be contained within the valley to the north of the pit and will entail a relatively short haul from the upper benches of the stages by developing haul routes to the north around the contour of the hill.

The initial toe of the Waste Rock Storage Facility (WRSF) will need to be established with a compacted foundation keyed into the bedrock. The WRSF can then be developed by backfilling the valley from east to west with lifts of 10m and face angle of 25°. Catch berms will be left at 10m intervals in order that a final profile angle of less than 18° can be obtained by dozing down the faces during rehabilitation.

It should be possible to progressively rehabilitate the WRSF over time with surface topsoil that has been stockpiled separately for this purpose. It may also be possible to consider in pit disposal of waste once Stage 1 has been mined out, and further in-pit disposal could take place once Stage 3 is mined out. A water diversion system will be required to divert surface run-off away from the WRSF as the catchment area at the head of the valley is substantial. The low-grade stockpile will be built up during the life of the mine as while a combination of high and low grade material is processed in the early stage of the life of the mine, and it is estimated that the maximum capacity will be around 1.5 Mt.

The low-grade stockpile should be placed as close as possible to the plant to reduce costs.There is an area to the south east of the pit, next to the southern pit exit, that would provide sufficient capacity for this material. The stockpile has been designed with a face angle of 35° and berm width of 5m on each 10m lift. The stockpile designed capacity is in excess of 2 Mt.

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Recovery of gold is via grinding and flotation to a saleable bulk Au-Ag concentrate. The concentrate obtained from the LG_Sch material is of lower grade than that from the HG_BX material and payability of metal content is likely to be lower. The two material types will be processed in the same concentrator but at different times, i.e., on a campaign basis, in order to maximize revenue from the higher-grade material. Laboratory test work has shown that the same grind size and flotation parameters are applicable to both material types and can result in commercially viable products.

Overflow from the mill cyclones enters an agitated tank in which the slurry is conditioned with flotation reagents. Based on the laboratory test work, potassium amyl xanthate (PAX) is used as a sulphide collector and methyl isobutyl carbinol (MIBC) as a frother.

Concentrate from the rougher cells is reground (P 80 of 30 µm) before it passes to cleaner cells for upgrading. The rougher conc ........