Ni43-101Feasibility Study Technical Report on the Curraghinalt Gold

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

NI 43-101 FEASIBILITY STUDY TECHNICAL REPORT ON THE CURRAGHINALT GOLD PROJECT NORTHERN IRELAND

Qualified Persons Company Prepared for: Garett Macdonald, P.Eng. JDS Energy & Mining Inc. Michael Makarenko, P.Eng. JDS Energy & Mining Inc. Indi Gopinathan, P.Eng. JDS Energy & Mining Inc. Dalradian Resources Inc. Stacy Freudigmann, P.Eng. JDS Energy & Mining Inc. Suite 416 – 207 Queens Quay West Jean-François Couture, P.Geo SRK Consulting (Canada) Inc. Toronto, ON M5J 1A7 Bruce Murphy, P.Eng. SRK Consulting (Canada) Inc. Cam Scott, P.Eng. SRK Consulting (Canada) Inc.

EFFECTIVE DATE: DECEMBER 12, 2016 William Harding, C.Geol. SRK Consulting (UK) Ltd. Effective Date: December 12, 2016 REPORT DATE: JANUARY 25, 2017 i

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

NOTICE JDS Energy & Mining, Inc. prepared this National Instrument 43-101 Technical Report, in accordance with Form 43-101F1, for Dalradian Resources Inc. The quality of information, conclusions and estimates contained herein is based on: (i) information available at the time of preparation; (ii) data supplied by outside sources, and (iii) the assumptions, conditions, and qualifications set forth in this report. Dalradian Resources Inc. filed this Technical Report with the Canadian Securities Regulatory Authorities pursuant to provincial securities legislation. Except for the purposes legislated under provincial securities law, any other use of this report by any third party is at that party’s sole risk.

Effective Date: December 12, 2016 ii

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Contents

Contents ...... iii Tables and Figures...... xii List of Appendices ...... xix 1 Executive Summary ...... 1-1 1.1 Introduction ...... 1-1 1.2 Location, Access and Ownership ...... 1-1 1.3 History, Exploration and Drilling ...... 1-2 1.4 Geology & Mineralization ...... 1-2 1.5 Mineral Resource Estimate ...... 1-4 1.6 Mineral Reserve Estimates ...... 1-1 1.7 Mining ...... 1-1 1.8 Metallurgical Testing and Mineral Processing ...... 1-5 1.9 Recovery Methods ...... 1-6 1.10 Infrastructure ...... 1-7 1.11 Environment and Permitting ...... 1-9 1.12 Capital Costs ...... 1-10 1.13 Reclamation & Closure ...... 1-12 1.14 Operating Costs ...... 1-13 1.15 Economic Analysis ...... 1-15 1.16 Conclusions ...... 1-17 1.17 Recommendations ...... 1-19 2 Introduction ...... 2-1 2.1 Qualifications and Responsibilities ...... 2-1 2.2 Units, Currency and Rounding ...... 2-2 2.3 Sources of Information ...... 2-2 3 Reliance on Other Experts ...... 3-1 4 Property Description and Location...... 4-1 4.1 Location ...... 4-1 4.2 Mineral Tenure ...... 4-1 4.3 Location of Mineralized Zones ...... 4-5 4.4 Underlying Agreements ...... 4-8 4.5 Permits and Authorization...... 4-8 4.6 Environmental Liabilities & Considerations ...... 4-8 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 5-1 6 History ...... 6-1 6.1 Acquisition History ...... 6-1 6.2 Exploration History ...... 6-2 6.3 Historical Mineral Resource Estimates ...... 6-9 6.4 Historical Production ...... 6-9

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7 Geological Setting and Mineralization...... 7-1 7.1 Regional Geology ...... 7-1 7.2 Property Geology ...... 7-5 7.2.1 Dalradian Supergroup – Licences DG1, DG2, DG3, DG4, DG5 and DG6...... 7-5 7.2.2 Tyrone Igneous Complex – Licence DG2...... 7-8 7.2.3 Carboniferous ...... 7-11 7.3 Mineralization ...... 7-13 7.3.1 The Curraghinalt Gold Deposit ...... 7-13 7.3.2 Tyrone Volcanic Group ...... 7-16 8 Deposit Types ...... 8-1 8.1 Orogenic Gold Deposits ...... 8-1 8.2 Volcanic Massive Sulphide Deposit Model ...... 8-3 9 Exploration ...... 9-1 9.1 Exploration 2010 – 2011 ...... 9-1 9.2 Exploration 2012 – 2013 ...... 9-6 9.3 Exploration 2014 – 2016 ...... 9-8 9.3.1 Underground Development Program ...... 9-9 10 Drilling ...... 10-1 10.1 Drilling by Riofinex (1970’s) ...... 10-3 10.2 Drilling by Celtic Gold (1987) ...... 10-3 10.3 Drilling by Ennex (1984 – 1999) ...... 10-3 10.3.1 Underground Sampling by Ennex (1987 - 1989) ...... 10-4 10.4 Drilling by Nickelodeon (1999) ...... 10-4 10.5 Drilling by Tournigan (2003 – 2008) ...... 10-4 10.6 Drilling by Dalradian (2010 – 2016) ...... 10-5 10.6.1 Underground Core Sampling by Dalradian (2013 – 2016) ...... 10-8 10.6.2 Sampling of Historical Core ...... 10-8 10.7 Underground Sampling by Dalradian (2013 – 2016)...... 10-8 10.8 SRK Comments ...... 10-9 11 Sample Preparation, Analyses, and Security ...... 11-1 11.1 Riofinex (1970s) ...... 11-1 11.2 Celtic Gold (1987) ...... 11-1 11.3 Ennex (1984 – 1999) ...... 11-1 11.4 Underground Sampling by Ennex (1987 – 1989)...... 11-2 11.5 Nickelodeon (1999) ...... 11-2 11.6 Tournigan (2003 – 2008) ...... 11-2 11.7 Dalradian (2010 – 2016) ...... 11-2 11.8 Specific Gravity Data ...... 11-2 11.9 Quality Assurance and Quality Control Programs ...... 11-3 11.9.1 Ennex (1984 – 1999) ...... 11-3 11.9.2 Nickelodeon (1999) ...... 11-3 11.9.3 Tournigan (2003 – 2008) ...... 11-3 11.9.4 Dalradian (2010 – 2016) ...... 11-4 11.10 SRK Comments ...... 11-1

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12 Data Verification ...... 12-1 12.1 Verifications by Ennex ...... 12-1 12.2 Verifications by Nickelodeon ...... 12-1 12.3 Verifications by Tournigan ...... 12-1 12.4 Verifications by Dalradian ...... 12-1 12.5 Verifications by SRK ...... 12-2 12.5.1 Site Visits ...... 12-2 12.5.2 Database Verifications...... 12-2 12.5.3 Verifications of Analytical Quality Control Data ...... 12-3 12.5.4 Verification of Geological Modelling ...... 12-6 12.6 SRK Comment ...... 12-7 13 Mineral Processing and Metallurgical Testing ...... 13-1 13.1 Testing & Procedures ...... 13-1 13.2 Mineralogical Evaluations ...... 13-3 13.2.1 Mineralogy ...... 13-3 13.3 Test Work ...... 13-5 13.3.1 Historical Metallurgical Testing ...... 13-5 13.3.2 Feasibility Study Metallurgical Test Work ...... 13-11 13.4 Other Design Considerations ...... 13-23 13.5 Relevant Results ...... 13-23 13.5.1 Process Design Criteria and Metallurgical Projections ...... 13-24 13.5.2 Comminution Design Criteria ...... 13-24 13.5.3 Flotation Design Criteria ...... 13-24 13.5.4 Regrind Design Criteria ...... 13-25 13.5.5 CIL Design Criteria ...... 13-25 13.5.6 Cyanide Destruction Design Criteria ...... 13-25 13.6 Preliminary Recovery Estimate ...... 13-26 13.7 Future Metallurgical Work ...... 13-26 14 Mineral Resource Estimate ...... 14-1 14.1 Introduction ...... 14-1 14.2 Resource Database ...... 14-2 14.3 Geological Interpretation and Modelling ...... 14-2 14.3.1 Structural Fault Modelling ...... 14-3 14.3.2 Pelite Model ...... 14-6 14.4 Specific Gravity ...... 14-7 14.5 Resource Estimation Methodology ...... 14-10 14.5.1 Composite Statistics, and Capping ...... 14-10 14.5.2 Variography...... 14-14 14.5.3 Block Model Parameters ...... 14-17 14.5.4 Estimation ...... 14-17 14.5.5 Estimation Sensitivity Assessment ...... 14-18 14.5.6 Block Model Validation ...... 14-20 14.6 Classification ...... 14-24 14.7 Mineral Resource Statement ...... 14-24

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14.8 Grade Sensitivity Analysis ...... 14-27 14.9 Grade Sensitivity Analysis ...... 14-28 14.10 Comparison with Previous Mineral Resource Statement ...... 14-35 15 Mineral Reserve Estimates ...... 15-1 15.1 Cut-off Grade Criteria ...... 15-1 15.2 Dilution ...... 15-2 15.2.1 External Dilution ...... 15-2 15.2.2 Backfill Dilution ...... 15-5 15.2.3 Fault Dilution ...... 15-7 15.3 Mining Recovery ...... 15-8 15.4 Mineral Reserve Estimates ...... 15-9 16 Mining Methods ...... 16-1 16.1 Introduction ...... 16-1 16.2 Deposit Characteristics ...... 16-1 16.3 Geotechnical Analysis and Recommendations ...... 16-1 16.3.1 Mine Geotechnical...... 16-1 16.3.2 Geotechnical Design ...... 16-5 16.3.3 Geotechnical Design Approach ...... 16-7 16.3.4 Dilution and Trial Stoping...... 16-8 16.3.5 Backfill Design...... 16-10 16.3.6 Ground Support Recommendations ...... 16-10 16.3.7 Vertical Infrastructure ...... 16-12 16.3.8 Extraction Sequencing...... 16-12 16.3.9 Crown Pillar and Subsidence ...... 16-15 16.3.10 Mine Access ...... 16-16 16.4 Mine Planning Criteria ...... 16-17 16.5 Mining Methods ...... 16-18 16.5.1 Longhole Mining ...... 16-19 16.5.2 Resue Mining ...... 16-23 16.5.3 Cut-and-Fill ...... 16-28 16.5.4 Longhole Uppers Stoping ...... 16-30 16.6 Mine Design ...... 16-30 16.6.1 Existing Underground Infrastructure ...... 16-30 16.6.2 Mine Design Criteria ...... 16-31 16.6.3 Stope and Mine Plan Optimization ...... 16-33 16.6.4 Level Access Design and Layouts ...... 16-33 16.6.5 Access ...... 16-33 16.6.6 Development Types ...... 16-34 16.7 Mining Dilution and Recoveries ...... 16-34 16.8 Mine Services ...... 16-34 16.8.1 Mine Ventilation ...... 16-34 16.8.2 Water Supply ...... 16-37 16.8.3 Dewatering ...... 16-37 16.8.4 Electrical Distribution ...... 16-40 16.8.5 Mine Communications ...... 16-46

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16.8.6 Compressed Air ...... 16-46 16.8.7 Explosives and Detonator Storage ...... 16-46 16.8.8 Fuel Storage and Distribution ...... 16-49 16.8.9 Mobile Equipment Maintenance ...... 16-49 16.8.10 Mine Safety ...... 16-49 16.9 Unit Operations ...... 16-50 16.9.1 Drilling ...... 16-50 16.9.2 Blasting ...... 16-56 16.9.3 Ground Support ...... 16-56 16.9.4 Mucking ...... 16-57 16.9.5 Hauling...... 16-57 16.9.6 Backfill ...... 16-58 16.9.7 Loose Fill ...... 16-59 16.10 Paste Backfill ...... 16-60 16.10.1 Tailing Production ...... 16-62 16.10.2 Tailing Storage ...... 16-62 16.10.3 Filtration Area ...... 16-62 16.10.4 Paste Production ...... 16-62 16.10.5 Water Loop and Auxiliaries ...... 16-63 16.10.6 Underground Paste Distribution ...... 16-68 16.11 Mine Equipment ...... 16-72 16.12 Mine Personnel ...... 16-73 16.13 Mine Production Schedule ...... 16-76 16.13.1 Mine Development...... 16-76 16.13.2 Mine Production ...... 16-79 17 Recovery Methods ...... 17-1 17.1 Introduction ...... 17-1 17.2 Process Design ...... 17-2 17.2.1 Process Design Criteria ...... 17-2 17.3 Plant Design ...... 17-4 17.4 Processing Labour ...... 17-1 17.5 Process Plant Description...... 17-2 17.5.1 Primary Crushing ...... 17-2 17.5.2 Crushed Ore Stockpile and Reclaim ...... 17-2 17.5.3 Grinding ...... 17-2 17.5.4 Rougher\Flotation ...... 17-3 17.5.5 Thickening and Regrind ...... 17-3 17.5.6 Carbon in Leach (CIL) ...... 17-3 17.5.7 Carbon Acid Wash, Elution, and Regeneration ...... 17-4 17.5.8 Gold Electrowinning and Refining ...... 17-5 17.5.9 Cyanide Destruction ...... 17-5 17.5.10 Tailing Thickening and Filtration ...... 17-5 17.5.11 Water Supply and Consumption ...... 17-6 17.5.12 Air Supply ...... 17-6 18 Project Infrastructure and Services ...... 18-1

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18.1 Overview and Design Criteria ...... 18-1 18.1.1 General Infrastructure Design Criteria ...... 18-5 18.2 Foundation Soil and Site Conditions ...... 18-5 18.2.1 Infrastructure Foundation Preparation Recommendations ...... 18-6 18.3 On-Site Infrastructure ...... 18-8 18.3.1 Process Building ...... 18-10 18.3.2 Truck Shop and Warehouse Building ...... 18-12 18.3.3 Mine Dry and Office Complex ...... 18-14 18.3.4 Fuel Storage ...... 18-16 18.3.5 Warehouse...... 18-16 18.3.6 First Aid & Emergency Vehicle Storage ...... 18-17 18.3.7 Waste Management ...... 18-19 18.3.8 Ancillary Structures ...... 18-19 18.4 Dry Stack Facility ...... 18-29 18.4.1 Dry Stack Layout and Storage Quantities ...... 18-29 18.4.2 Waste Classification ...... 18-31 18.4.3 DSF Design...... 18-31 18.4.4 Dry Stack Facility Construction ...... 18-38 18.4.5 Dry Stack Facility Closure Concept ...... 18-41 18.5 Geochemistry ...... 18-42 18.5.1 Introduction ...... 18-42 18.5.2 Methodology ...... 18-43 18.5.3 Waste Rock...... 18-43 18.5.4 Tailings ...... 18-44 18.5.5 Paste Backfill ...... 18-45 18.5.6 DSF ...... 18-47 18.5.7 Underground Facility ...... 18-47 18.6 Surface Water Management ...... 18-48 18.6.1 Introduction ...... 18-48 18.7 Mine Water Demands and Supply ...... 18-52 18.8 Surface Water Hydrology...... 18-55 18.8.1 Runoff from Natural Peat Catchments ...... 18-55 18.8.2 Runoff from Disturbed Mine Site Areas ...... 18-56 18.8.3 Dry Stack Infiltration and Runoff Rates ...... 18-56 18.9 Groundwater and Underground Water Inflows ...... 18-57 18.10 Flood Storage Requirements ...... 18-58 18.11 Mobile Equipment...... 18-60 18.12 Manpower ...... 18-60 18.13 G&A Personnel ...... 18-61 19 Market Studies and Contracts ...... 19-1 19.1 Metal Prices ...... 19-1 19.2 Contracts ...... 19-4 19.2.1 Royalties ...... 19-4 20 Environmental Studies, Permitting and Social or Community Impact ... 20-1 20.1 Introduction ...... 20-1

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20.1 Introduction ...... 20-1 20.2 Project Location ...... 20-1 20.3 Environmental Approvals Required to Proceed with the Project ...... 20-2 20.3.1 Mining Licences ...... 20-2 20.3.2 Planning Permission ...... 20-2 20.3.3 EIA Requirement ...... 20-5 20.3.4 Mine Waste Management Plan ...... 20-6 20.3.5 Other Environmental Approvals ...... 20-8 20.3.6 Historical Planning Approvals and Associated Liabilities ...... 20-9 20.4 Environmental and Social Setting ...... 20-9 20.4.1 Regional and Local Setting ...... 20-9 20.4.2 Topography, Seismicity and Soils ...... 20-13 20.4.3 Climate...... 20-13 20.4.4 Water ...... 20-13 20.4.5 NORM and Radon ...... 20-16 20.4.6 Ecological Environment ...... 20-17 20.4.7 Social Environment ...... 20-18 20.4.8 Cultural Heritage ...... 20-19 20.5 Landscape and Visual Setting ...... 20-20 20.6 Noise ...... 20-20 20.7 Air Quality ...... 20-20 20.8 Environmental and Social Issues ...... 20-21 20.8.1 Planning Permission and Environmental Approvals ...... 20-21 20.8.2 Area of Outstanding Natural Beauty (AONB) ...... 20-21 20.8.3 Ecological and Water Impacts ...... 20-21 20.8.4 Noise ...... 20-22 20.8.5 Air Quality ...... 20-22 20.8.6 Hazardous Substances ...... 20-22 20.8.7 DSF, Paste Backfill and Mine Waste Management ...... 20-22 20.9 Closure Requirements and Costs ...... 20-23 21 Capital Cost Estimate ...... 21-1 21.1 Summary & Estimate Results ...... 21-1 21.2 Capital Cost Profile...... 21-4 21.3 Scope of Estimate ...... 21-5 21.4 Key Estimate Assumptions ...... 21-6 21.5 Key Estimate Parameters ...... 21-6 21.6 Estimate Responsibility Matrix ...... 21-6 21.7 Basis of Estimate ...... 21-7 21.7.1 Labour Rates ...... 21-7 21.7.2 Fuel & Energy Supply ...... 21-8 21.7.3 Underground Mining ...... 21-8 21.7.4 Site Development ...... 21-9 21.7.5 Surface Construction (Plant & Site Infrastructure) ...... 21-10 21.7.6 Surface Equipment Fleet ...... 21-11 21.7.7 Communications & IT Infrastructure ...... 21-11

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21.7.8 Power Transmission Line ...... 21-11 21.7.9 Dry Stack Facility ...... 21-11 21.7.10 Indirect Costs ...... 21-12 21.7.11 Detailed Engineering ...... 21-13 21.7.12 Owners Costs ...... 21-13 21.7.13 Salvage Value ...... 21-15 21.7.14 Closure Costs ...... 21-15 21.7.15 Cost Contingency ...... 21-16 21.7.16 Capital Estimate Exclusions ...... 21-17 22 Operating Cost Estimate ...... 22-1 22.1 Introduction & Estimate Results ...... 22-1 22.2 Operating Cost Profile ...... 22-2 22.3 Operational Labour Rate Buildup ...... 22-2 22.4 Mining Operating Costs ...... 22-3 22.4.1 Underground Mining ...... 22-3 22.5 Processing Operating Costs ...... 22-7 22.5.1 Mineral Processing OPEX ...... 22-8 22.5.2 Water Treatment Plant OPEX ...... 22-8 22.5.3 Dry Stack Facility OPEX ...... 22-9 22.6 General & Administration Operating Costs ...... 22-10 22.6.1 G&A Labour ...... 22-10 22.6.2 G&A Services & Expenses ...... 22-10 22.7 Taxes ...... 22-11 22.8 Contingency ...... 22-11 23 Economic Analysis ...... 23-1 23.1 Introduction ...... 23-1 23.2 Economic Results...... 23-1 23.3 Economic Sensitivities ...... 23-1 23.4 Economic Model Inputs ...... 23-3 23.4.1 Metal Production ...... 23-3 23.4.2 Revenues and NSR Parameters ...... 23-3 23.4.3 Royalties ...... 23-4 23.4.4 Capital, Operating, and Closure Costs ...... 23-4 23.4.5 Working Capital ...... 23-4 23.4.6 Taxes ...... 23-4 24 Adjacent Properties ...... 24-1 25 Other Relevant Data and Information ...... 25-1 25.1 Project Execution & Development Plan ...... 25-1 25.1.1 Introduction ...... 25-1 25.1.2 Project Execution Locations ...... 25-1 25.1.3 Project Development Schedule Overview ...... 25-1 25.1.4 Project Management ...... 25-3 25.1.5 Engineering ...... 25-5 25.1.6 Procurement & Contracting ...... 25-6

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25.1.7 Logistics & Material Management ...... 25-8 25.1.8 Commissioning...... 25-13 26 Interpretations and Conclusions ...... 26-1 27 Recommendations ...... 27-1 28 References ...... 28-1 29 Units of Measure, Abbreviations and Acronyms ...... 29-1

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Tables and Figures

Table 1.1: Mineral Resource Statement*, Curraghinalt Gold Project, Northern Ireland, SRK Consulting (Canada) Inc., May 5, 2016 ...... 1-5 Table 1.2: Curraghinalt Mineral Reserve Estimate...... 1-1 Table 1.3: Capital Cost Summary ...... 1-11 Table 1.4: Reclamation & Closure Cost Summary ...... 1-12 Table 1.5: Operating Cost Summary ...... 1-14 Table 1.6: Summary of Economic Results ...... 1-15 Table 1.7: Cash Cost Summary ...... 1-16 Table 2.1: QP Responsibilities ...... 2-2 Table 4.1: Curraghinalt Project Mineral Licences ...... 4-4 Table 6.1: Historical Exploration of DG1...... 6-3 Table 6.2: Historical Exploration of DG2...... 6-5 Table 6.3: Historical Exploration of DG3...... 6-6 Table 6.4: Historical Exploration of DG4...... 6-7 Table 6.5: Historical Exploration DG5 ...... 6-8 Table 6.6: Historical Exploration DG6 ...... 6-8 Table 7.1: Stratigraphy of the Dalradian Supergroup ...... 7-6 Table 7.2: List of Modelled Quartz Veins ...... 7-13 Table 7.3: Definitions for Geometry of the Vein System ...... 7-15 Table 9.1: Summary of 2011 Prospecting Samples ...... 9-2 Table 9.2: Exploration Targets within the Tyrone Volcanic Group ...... 9-4 Table 9.3: Exploration Targets within the Dalradian Supergroup ...... 9-5 Table 9.4: Summary of Exploration Work by Dalradian between 2014 and 2016 ...... 9-8 Table 10.1: Summary of Drilling at Regional Targets Completed by Dalradian ...... 10-6 Table 11.1: Summary of Samples Used by Tournigan (2003-2009) ...... 11-4 Table 11.2: Summary Control Samples Produced by Dalradian (2010-2016)...... 11-5 Table 12.1: Summary of Analytical Quality Control Data Produced by Tournigan (2003-2008)...... 12-4 Table 12.2: Summary of Analytical Quality Control Data Produced by Dalradian on the Curraghinalt Gold Deposit (2010-2016) ...... 12-5 Table 13.1: Summary of Test Work Completed ...... 13-2 Table 13.2: Summary of Mineral Content of Vein Composites ...... 13-4 Table 13.3: Comminution Test Result Summary ...... 13-7 Table 13.4: Static Settling Test Result Summary ...... 13-9 Table 13.5: Summary Comminution Results ...... 13-12 Table 13.6: Variability Comminution Data ...... 13-12 Table 13.7: Cyanidation Results – Effect of Regrind Size ...... 13-16 Table 13.8: Settling Tests Data ...... 13-21 Table 13.9: Oxygen Consumption in Leach ...... 13-22 Table 13.10: Key Comminution Design Criteria ...... 13-24 Table 13.11: Key Flotation Circuit Design Criteria ...... 13-24 Table 13.12: Key Regrind Circuit Design Criteria ...... 13-25 Table 13.13: Key Leach Circuit Design Criteria ...... 13-25 Table 13.14: Key Cyanide Destruction Circuit Design Criteria ...... 13-26

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Table 13.15: Preliminary Recovery Projections ...... 13-26 Table 14.1: Statistics on Vein Thickness ...... 14-3 Table 14.2: 31 Excluded Boreholes...... 14-11 Table 14.3: Uncapped and Capped Composite Statistics for Gold ...... 14-12 Table 14.4: Variogram and Search Angle Specification for Each Domain ...... 14-15 Table 14.5: Summary of Global Variogram Parameters in Datamine Convention...... 14-16 Table 14.6: Curraghinalt Block Model Specification ...... 14-17 Table 14.7: Summary of Estimation Search Parameters ...... 14-18 Table 14.8: SRK Sensitivity Analysis on Estimation Parameters Using Capped Composites from Domain 6 (T17) ...... 14-19 Table 14.9: Comparison of Estimators for Domain 6 ...... 14-20 Table 14.10: Mineral Resource Statement*, Curraghinalt Gold Project, Northern Ireland, SRK Consulting (Canada) Inc., May 5, 2016 ...... 14-26 Table 14.11: Global Block Model Quantities and Grade Estimates* at Various Cut-Off Grades ...... 14-27 Table 14.12: Impact of Dilution for Minimum 1.0 Metre Thickness, Assuming Zero Grade in Waste ... 14-29 Table 14.13: Impact of Dilution for Minimum 1.0 Metre Thickness, with Estimated Grade in Waste.... 14-30 Table 14.14: Impact of Dilution for Minimum 1.2 m Thickness, Assuming Zero Grade in Waste ...... 14-31 Table 14.15: Impact of Dilution for Minimum 1.2 Metre Thickness, with Estimated Grade in Waste.... 14-32 Table 14.16: Impact of Dilution for Minimum 1.8 m Thickness, Assuming Zero Grade in Waste ...... 14-33 Table 14.17: Impact of Dilution for Minimum 1.8 Metre Thickness, with Estimated Grade in Waste.... 14-34 Table 14.18: Comparison between January 2014 and May 2016 Mineral Resource Statements ...... 14-36 Table 15.1: Cut-off Grade Criteria ...... 15-2 Table 15.2: Longhole Dilution – Green Rock Mass Domain ...... 15-3 Table 15.3: Longhole Dilution – Yellow Rock Mass Domain (with cable bolts) ...... 15-3 Table 15.4: Longhole Dilution – Pink Rock Mass Domain (with cable bolts) ...... 15-3 Table 15.5: Longhole Uppers Dilution – Green Rock Mass Domain ...... 15-4 Table 15.6: Longhole Uppers Dilution – Yellow Rock Mass Domain ...... 15-4 Table 15.7: Longhole Uppers Dilution – Pink Rock Mass Domain...... 15-4 Table 15.8: Longhole Uppers Dilution - Red Rock Mass Domain ...... 15-4 Table 15.9: Cut & Fill and Development Dilution ...... 15-5 Table 15.10: Backfill Dilution ...... 15-5 Table 15.11: Mine Reserves and Dilution ...... 15-6 Table 15.12: Longhole Stoping Additional Dilution Due to Faulting ...... 15-7 Table 15.13: Mining Recoveries ...... 15-9 Table 15.14: Curraghinalt Mineral Reserve Estimate ...... 15-9 Table 16.1: Ground Support Recommendations for Long Term Access and Short Term Production Excavations ...... 16-11 Table 16.2: Preliminary Ground Support Recommendations for Vertical Infrastructure Based on Alimak Mining ...... 16-12 Table 16.3: Mine Planning Criteria ...... 16-18 Table 16.4: Dalradian Test Stoping Results ...... 16-23 Table 16.5: Dalradian Resue Test Results ...... 16-25 Table 16.6: Mine Design Criteria Development Dimensions ...... 16-31 Table 16.7: Summary LOM Power Requirements ...... 16-42 Table 16.8: Paste Plant Process Design Criteria ...... 16-61 Table 16.9: Recommended Paste Mix Designs ...... 16-68

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Table 16.10: Paste Mix Recipe - 700kpa Mix ...... 16-68 Table 16.11: Piping Type ...... 16-72 Table 16.12: Underground Mobile Equipment Fleet (average number of units) ...... 16-72 Table 16.13: Mine Management...... 16-73 Table 16.14: Mine Operations - Production ...... 16-74 Table 16.15: Mine Services ...... 16-74 Table 16.16: Mine Maintenance ...... 16-75 Table 16.17: Technical Services ...... 16-75 Table 16.18: Total Mine Workforce ...... 16-75 Table 16.19: Annual Production Schedule ...... 16-81 Table 16.20: Annual Mine Production by Mining Method ...... 16-82 Table 16.21: Annual Mine Development Metres ...... 16-82 Table 16.22: Annual Backfill Placement ...... 16-82 Table 16.23: iGantt Development Productivities ...... 16-83 Table 16.24: iGantt Stoping Productivities ...... 16-84 Table 16.25: Summary Mine Schedule Results ...... 16-85 Table 17.1: Major Process Design Criteria ...... 17-3 Table 17.2: Processing Labour ...... 17-1 Table 18.1: Infrastructure Elevations ...... 18-7 Table 18.2: Curraghinalt Site Fuel Usage ...... 18-16 Table 18.3: Infrastructure Dimensions ...... 18-19 Table 18.4: Curraghinalt Site Electrical Load ...... 18-24 Table 18.5: Freight Quantities – Construction Site Traffic ...... 18-28 Table 18.6: Freight Quantities – Operations Site Traffic ...... 18-29 Table 18.7: Summary of Design Parameters and Design Criteria ...... 18-32 Table 18.8: Summary of DSF Design Details ...... 18-33 Table 18.9: Evolution of Catchments Draining to the East and West Ponds from the Dry Stack Area . 18-52 Table 18.10: Summary of Key Catchments draining to East and West Ponds...... 18-52 Table 18.11: Mine Make-up Water Requirements ...... 18-53 Table 18.12: Runoff from Natural Peat Catchment ...... 18-56 Table 18.13: Infiltration Rates for Dry Stack Facility ...... 18-57 Table 18.14: Underground Water Inflow Rates ...... 18-57 Table 18.15: Summary of Model Inputs ...... 18-59 Table 18.16: Site Support Equipment ...... 18-60 Table 18.17: Site Support Manpower Crew ...... 18-61 Table 18.18: G&A Personnel ...... 18-61 Table 19.1: NSR Assumptions Used in the Economic Analysis ...... 19-1 Table 19.2: Metal Price and Exchange Rate used in the Economic Analysis ...... 19-4 Table 20.1: Components of the Planning Application Package ...... 20-4 Table 20.2: Consultancies Contributing to the EIA...... 20-6 Table 20.3: Required Environmental Consents to be obtained by Dalradian ...... 20-8 Table 21.1: Capital Cost Summary ...... 21-1 Table 21.2: Foreign Exchange Rates & Exposure ...... 21-6 Table 21.3: Estimate Responsibility Matrix ...... 21-7 Table 21.4: Contract Labour Rates ...... 21-8 Table 21.5: Surface Construction Basis of Estimate ...... 21-10

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Table 21.6: Salvage Value Estimate ...... 21-15 Table 21.7: Reclamation & Closure Cost Summary ...... 21-16 Table 21.8: Closure Assurance Payments ...... 21-16 Table 22.1: Operating Cost Summary ...... 22-1 Table 22.2: Total Labour Table Construction and Operations ...... 22-3 Table 22.3: Mining Operating Cost Summary ...... 22-3 Table 22.4: Underground Mining Labour Costs ...... 22-4 Table 22.5: Underground Mining Fuel Costs ...... 22-5 Table 22.6: Underground Equipment Costs...... 22-6 Table 22.7: Underground Mining Power Costs ...... 22-6 Table 22.8: Mining Consumables Costs ...... 22-7 Table 22.9: Processing Operating Cost Summary ...... 22-7 Table 22.10: Water Treatment Operating Cost ...... 22-9 Table 22.11: DSF Operating Cost ...... 22-9 Table 22.12: General & Administration Operating Cost Summary...... 22-10 Table 23.1: Summary of Economic Results ...... 23-2 Table 23.2: Cash Cost Summary ...... 23-3 Table 23.3: Condensed Annual Cash Flow Model ...... 23-4 Table 23.4: Smelter Terms ...... 23-4 Table 25.1: Project Summary Schedule ...... 25-2 Table 25.2: Major Construction Contracts (Capital Phase) ...... 25-7 Table 25.3: Freight Quantities ...... 25-8 Table 25.4: Major Construction Commodities & Man-Hours ...... 25-12 Table 25.5: Major Construction Milestones...... 25-12 Table 27.1: Estimated Post-Feasibility Budget ...... 27-2

Figure 1.1: Property Geology ...... 1-3 Figure 1.2: Annual Estimated Mine Production by Mining Method at Curraghinalt...... 1-2 Figure 1.3: Annual Mined Gold Grade & Ounces at Curraghinalt ...... 1-2 Figure 1.4: Primary Mine Infrastructure Design (Looking North-East) ...... 1-3 Figure 1.5: Example of Underground Development at Curraghinalt (106-16 Vein), Long Section ...... 1-4 Figure 1.6: Annual Ore and Waste Development ...... 1-5 Figure 1.7: General Site Layout ...... 1-8 Figure 1.8: Life of Mine Capital Cost Profile (Annual & Cumulative Capital Costs) ...... 1-13 Figure 1.9: Life of Mine Operating Cost Profile ...... 1-14 Figure 1.10: Annual and Cumulative After-Tax Cash Flows ...... 1-15 Figure 1.11: After-Tax NPV5% Sensitivities ...... 1-16 Figure 1.12: After-Tax IRR Sensitivities...... 1-17 Figure 4.1: General Location Map ...... 4-1 Figure 4.2: Locations of Principal Veins and Adit on DG1 ...... 4-6 Figure 4.3: Curraghinalt Gold Deposit Location ...... 4-7 Figure 5.1: Northern Ireland Property Licence Map, Major Road Access ...... 5-2 Figure 5.2: General View of the Curraghinalt Deposit Area Looking East...... 5-3 Figure 7.1: Regional Geology of Northern Ireland ...... 7-2 Figure 7.2: Regional Geology of the Southern Sperrin Mountains...... 7-4 Figure 7.3: Section across the Sperrin Nappe and Omagh Thrust Fault ...... 7-5

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Figure 7.4: Property Geology ...... 7-7 Figure 7.5: Tyrone Igneous Complex Geology ...... 7-10 Figure 7.6: Modelled Quartz Veins ...... 7-14 Figure 8.1: Orogenic Gold Deposit Model ...... 8-1 Figure 8.2: Volcanogenic Massive Sulphide Deposit Model ...... 8-4 Figure 9.1: Geophysical Surveys and Exploration Targets on the Northern Ireland Property ...... 9-2 Figure 9.2: Exploration Sampling by Dalradian on the Northern Ireland Property ...... 9-3 Figure 9.3: 2012 Curraghinalt East Soil Survey Area ...... 9-7 Figure 10.1: Distribution of Core Boreholes at the Curraghinalt Deposit ...... 10-2 Figure 12.1: Distribution of Samples by Operator ...... 12-7 Figure 12.2: Oblique Section Looking Northeast Showing the Distribution of Boreholes by Generation 12-8 Figure 12.3: Oblique Section Looking Northeast Showing the Distribution of Samples by Generation .. 12-9 Figure 13.1: Photomicrograph of Rougher Concentrate (T4, KM3258) ...... 13-4 Figure 13.2: Gold Recovery to Gravity Concentrate with Varying Mass Percentage...... 13-6 Figure 13.3: Gold Leach Recovery with Varying NaCN Concentrations ...... 13-8 Figure 13.4: Vacuum Filtration Results ...... 13-10 Figure 13.5: Primary Grind Size vs. Gravity Recovery ...... 13-14 Figure 13.6: Primary Grind Size vs. Gravity/Rougher Flotation Recovery ...... 13-15 Figure 13.7: Gold Recovery from Concentrate Leach at Varying Cyanide Doses ...... 13-17 Figure 13.8: Mass Pull vs. Au/ Ag Recovery Curve ...... 13-18 Figure 13.9: Au/ Ag Leach Recoveries ...... 13-19 Figure 13.10: Grade vs. Au/ Ag Recovery Curve ...... 13-20 Figure 14.1: Distribution of Modelled Faults at Curraghinalt ...... 14-5 Figure 14.2: Indicator Variogram for Pelite Identifier ...... 14-7 Figure 14.3: Specific Gravity Statistics by Domain...... 14-8 Figure 14.4: Relationship between Sulphur and Specific Gravity ...... 14-9 Figure 14.5: Probability Plot and Capping Sensitivity Curve for Domain 6 (T17), Core Samples ...... 14-14 Figure 14.6: Global (inverted) Correlogram for Gold ...... 14-17 Figure 14.7: Quantile-Quantile Comparison of Block Estimates to Declustered Composites for Domain 6 ...... 14-21 Figure 14.8: Longitudinal Section for Domain 6: Comparison of Block Estimates and Informing Composites (top), and Estimation Pass Number to Boundary for Indicated/Inferred Categories (bottom) ...... 14-22 Figure 14.9: Swath Plot Comparison of Block Estimates with All Composites (left column) and Only Borehole Composites (right column) Along Easting (top row), Northing (middle row) and Elevation (bottom row) ...... 14-23 Figure 14.10: Grade Tonnage Curves ...... 14-28 Figure 15.1: Green Stopes with Faulting ...... 15-7 Figure 15.2: Longhole Stoping Additional Dilution Due to Faulting ...... 15-8 Figure 16.1: Summary Slide Presenting the Geotechnical Field Program including Drill Hole Information and Underground Mapping ...... 16-3 Figure 16.2: Isometric View (Looking West) of Modelled Fault Structures. Discontinuous Flat Faults shown as Transparent for Clarity ...... 16-5 Figure 16.3: T17 Vein showing the Various Geotechnical Domains ...... 16-7 Figure 16.4: Dilution Sensitivity within the Green and Yellow Domains, based on the Dip of the Stope and the Stope Length ...... 16-9

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Figure 16.5: Schematic of The Recommended General Extraction Sequence, with Protection Pillars being Retained along The Cross-Cuts ...... 16-13 Figure 16.6: A Longitudinal View Depicting the Recommended Extraction Sequence of a Single Vein with the Sill Pillars ...... 16-14 Figure 16.7: 3D Evaluation of a Minor Principal Stress Plot ...... 16-15 Figure 16.8: Predicted Subsidence (Section and Plan) over the Proposed Underground Mining ...... 16-16 Figure 16.9: Ore Tonnes by Mining Method ...... 16-19 Figure 16.10: Longhole Open Stoping ...... 16-21 Figure 16.11: Dalradian Test Stoping ...... 16-22 Figure 16.12: Resue Cut & Fill Mining Method ...... 16-24 Figure 16.13: V75 Vein, 150 Level - Resue (Waste First) Before & After ...... 16-26 Figure 16.14: V75 Vein, 150 Level - Resue (Waste First) Before & After ...... 16-26 Figure 16.15: V75 Vein, 170 Level - Resue (Ore First) Before & After ...... 16-27 Figure 16.16: V75 Vein, 170 Level - Resue (Waste First) Before & After ...... 16-27 Figure 16.17: Cut & Fill with Uppers ...... 16-29 Figure 16.18: Existing Underground Workings - Section and Plan Views ...... 16-30 Figure 16.19: Primary Mine Infrastructure Design (Looking North-East)...... 16-32 Figure 16.20: Mine Design Long Section (106-16 Vein Looking North) ...... 16-32 Figure 16.21 Primary Ventilation Network ...... 16-36 Figure 16.22: Dalradian Dewatering Single Line Diagram ...... 16-38 Figure 16.23: Sump and Booster Pump Station...... 16-39 Figure 16.24: Dalradian Underground Mine Power Distribution Single Line Diagram ...... 16-41 Figure 16.25: Dalradian Underground Mine Power Distribution Block Diagram ...... 16-44 Figure 16.26: Detonator Magazine ...... 16-47 Figure 16.27 : Bulk Explosives Magazine ...... 16-48 Figure 16.28: 4.5 m x 4.5 m Development Drill Pattern...... 16-51 Figure 16.29: 4.0 m x 4.0 m Drill Pattern ...... 16-52 Figure 16.30: 3.0 m x 3.5 m Development Drill Pattern...... 16-53 Figure 16.31 Sub-Level Ore Development Drill Pattern ...... 16-54 Figure 16.32 Cut-and-Fill Lift Resue Drill Pattern ...... 16-55 Figure 16.33: Yearly Underground Haulage Summary ...... 16-58 Figure 16.34: Backfill Schedule ...... 16-59 Figure 16.35: Paste Backfill System Flowsheet ...... 16-64 Figure 16.36: Underground Paste Plant Plan View ...... 16-66 Figure 16.37: Underground Paste Plant Section A ...... 16-67 Figure 16.38: Paste Distribution Long Section ...... 16-70 Figure 16.39: Paste Distribution Cross Section ...... 16-71 Figure 16.40: Mine Labour by Year ...... 16-73 Figure 16.41: Annual Waste Development ...... 16-78 Figure 16.42: Annual Ore Development ...... 16-78 Figure 16.43: Annual Ore and Waste Development...... 16-79 Figure 16.44: Annual Ore Production ...... 16-80 Figure 16.45: Annual Mined Gold Grade & Ounces ...... 16-81 Figure 16.46: Mined Grade Distribution (all veins) ...... 16-86 Figure 16.47: Life of Mine Ore Extraction Sequence ...... 16-87 Figure 16.48: Life of Mine Development Sequence ...... 16-88

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Figure 16.49: Yearly Ore Production by Mining Method ...... 16-89 Figure 17.1: Plant Summary Flow Diagram ...... 17-5 Figure 17.2: Crushing ...... 17-6 Figure 17.3: Process Plant ...... 17-7 Figure 18.1: Location Map of the Curraghinalt Project Property ...... 18-2 Figure 18.2: Regional Map of the Curraghinalt Project Property ...... 18-3 Figure 18.3: Curraghinalt Site Layout ...... 18-4 Figure 18.4: Typical Stratigraphic Column ...... 18-6 Figure 18.5: Curraghinalt Site Infrastructure ...... 18-9 Figure 18.6: Process Building Layout – West and East Sections ...... 18-11 Figure 18.7: Truck Shop/Warehouse Floor Areas ...... 18-13 Figure 18.8: Mine Dry and Office Complex Layout ...... 18-15 Figure 18.9: Warehouse Building ...... 18-17 Figure 18.10: Mine Rescue Structure ...... 18-18 Figure 18.11: Flow Diagram ...... 18-21 Figure 18.12: NIE Route Proposal ...... 18-23 Figure 18.13: Proposed Shipping Routes ...... 18-27 Figure 18.14: DSF Location and General Layout ...... 18-30 Figure 18.15: DSF Storage Requirements through Year 11 ...... 18-31 Figure 18.16: Layout of DSF Underdrains (in blue) and Toe Drain (in grey) ...... 18-35 Figure 18.17: Typical Underdrain Section (with perforated pipe, below the HDPE liner in red) ...... 18-36 Figure 18.18: Typical Toe Drain Section ...... 18-36 Figure 18.18.19: Layout of DSF Overdrains (primary in solid green, secondary in dashed green) ...... 18-37 Figure 18.20: Evolution of the Dry Stack Facility ...... 18-39 Figure 18.21: Options for Utilizing Waste Rock in the DSF ...... 18-40 Figure 18.22: Cover Design Option for DSF Closure ...... 18-42 Figure 18.23: Conceptual model of the Post Closure scenario for the DSF ...... 18-47 Figure 18.24: Mine Site Area showing Main Catchments ...... 18-54 Figure 19.1: Gold Price History (Kitco Spot) ...... 19-1 Figure 20.1: Location of the Curraghinalt Project ...... 20-1 Figure 20.2: Regional setting of the Curraghinalt Project ...... 20-11 Figure 20.3: Local setting of the Curraghinalt deposit ...... 20-12 Figure 20.4: Watercourses Draining the Project Site ...... 20-14 Figure 21.1: Initial Capital Cost Distribution ...... 21-3 Figure 21.2: Sustaining/Closure Capital Cost Distribution ...... 21-4 Figure 21.3: Capital Cost Profile (Closure Years not Shown) ...... 21-5 Figure 22.1: Distribution of Operating Costs ...... 22-1 Figure 22.2: Life of Mine Operating Cost Profile ...... 22-2 Figure 22.3: Underground Mining Operating Costs, by Activity ...... 22-4 Figure 22.4: Underground Mining Operating Costs, by Cost Component ...... 22-5 Figure 23.1: Annual and Cumulative After-Tax Cash Flows (Undiscounted) ...... 23-2

Figure 23.2: After-Tax NPV5% Sensitivities ...... 23-1 Figure 23.3: After-Tax IRR Sensitivities...... 23-2 Figure 23.4: Discount Rate Sensitivity on NPV ...... 23-2 Figure 23.5: Gold Production Schedule ...... 23-3 Figure 25.1: Preliminary Project Management Team Organization Chart ...... 25-3

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Figure 25.2: Construction Management Responsibilities ...... 25-11

List of Appendices Appendix A: QP Certificates

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1 Executive Summary

1.1 Introduction This report summarizes the results of the Feasibility Study (FS) completed by JDS Energy & Mining Inc. (JDS) as commissioned by Dalradian Resources Inc. (Dalradian) for The Curraghinalt Gold Project (the project), and was prepared in accordance with the Canadian Securities Administrators’ National Instrument 43-101 and Form 43-101F1, collectively referred to as National Instrument (NI) 43-101. The Curraghinalt Gold Project is a precious metals resource project located in County Tyrone, Northern Ireland. Based on the Proven & Probable Reserves, a subset of the Measured & Indicated resource base, the project will develop up to 16 mineralized vein systems over an 11-year production period by way of a ramp access underground mine, flotation and cyanide leach processing facility capable of processing an average of 1,500 tonnes per day (t/d), a dry-stacked filtered facility (DSF) for storing filtered tailings and waste rock, and related infrastructure.

1.2 Location, Access and Ownership The Curraghinalt Gold Project is located within Dalradian’s Northern Ireland Properties, six licence areas spanning more than 120,000 hectares in County Tyrone and County Londonderry, Northern Ireland. The Curraghinalt gold deposit is located near the centre of the Northern Ireland Properties, in County Tyrone, approximately 127 km west of Belfast by road and 15 km northeast of the town of Omagh. Access to the Curraghinalt deposit is via a number of paved highways and local roads. The topography consists of rolling hills and broad valleys. The farmland is grazing land predominantly for cattle and sheep. Relief ranges between about 100 metres above sea level (masl) in the major river valleys to a maximum elevation of approximately 550 masl. Local climate conditions are temperate, with an average annual temperature of 9°C, and average daily temperatures varying between 4°C and 15°C throughout the year. The project area is characterized by annual rainfall in the order of 1,150 to 1,350 millimetres (mm) per annum, with high seasonality. The wettest period is between October and January and the driest period between April and July. Snowfall is usually restricted to areas of higher elevation and normally occurs on 10 days or less per year. Exploration activities can generally be conducted year-round. To the extent known by JDS, there are no option agreements or joint venture terms in place for the property, nor obligations on land covered by claims comprising the property.

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1.3 History, Exploration and Drilling Gold was recognized in the gravels of the Moyola River to the east of the property as early as 1652, and in the 1930s, an English company reported plans for alluvial gold mining in a prospectus. Documented exploration in the area dates back to the early 1970s through a number of companies. In October 2009, Dalradian Resources Inc. completed a purchase and sale agreement with Tournigan to acquire all of the issued and outstanding shares of Dalradian Gold Ltd., which included the licences, mineral rights, and surface rights (including easements) in the Area of Interest. The Area of Interest was defined in the agreement as Mineral Prospecting Licences DG1, DG2, TG- 3, and TG-4; the latter two being renamed to DG3 and DG4 by the Department of Enterprise, Trade and Investment (DETI) after the acquisition. From 2010 to 2016, Dalradian continued with a program of prospecting, mapping, geophysical and geochemical surveys, channel sampling and diamond drilling to expand the Mineral Resource and convert Inferred resources into Measured & Indicated classes. This included limited prospecting work on licences DG5 and DG6 which were granted to the company in June 2016. Since 2010, Dalradian has drilled 347 boreholes (102,691 m) on the Curraghinalt gold deposit and 32 boreholes (9,042 m) on other regional targets. In 2015 to 2016, Dalradian completed an advanced exploration program including underground development, bulk sampling and test stoping on a number of mineralized veins at the Curraghinalt project. Since 2010, the work completed on Curraghinalt has resulted in a 7-fold increase in overall resources.

1.4 Geology & Mineralization On the Curraghinalt property, Neoproterozoic aged rocks of the Dalradian Supergroup underlie DG1, DG3, DG4, DG5 and DG6 and form the Sperrin Mountains (Figure 1.1). Licence DG2 is largely covered by the Tyrone Igneous Complex within the Midland Valley Terrane, one of the largest areas of ophiolitic and arc-related rocks within the British and Irish Caledonides. The Dalradian Supergroup is divided into the Argyll Group and Southern Highland Group, both comprised of predominantly clastic marine sediments deposited in a rift basin. The oldest rocks on the property belong to the Newtownstewart Formation (Argyll Group) which is exposed in the core of the recumbent Sperrin Fold and is flanked by Dungiven Limestone Formation (Table 7.1) on DG3 and DG4. The Southern Highland Group is interpreted to flank the Argyll Group on both limbs of the Sperrin Fold although the stratigraphy differs markedly between the north and south limbs. Mitchell (2004) notes that “an absence of distinctive marker horizons allied to lateral facies changes makes correlation difficult between formations and results in the different nomenclature north and south of the fold axis”. The Southern Highland Group comprises a thick sequence of turbiditic arenite and pelitic metasediments with rare volcaniclastic (green bed) and calcareous schist units. Progressing southeastward onto DG1, the Southern Highland Group is exposed and is divided from northwest to southeast into the Dart, Glenelly, Glengawna and Mullaghcarn Formations. The mineralized quartz- carbonate veins of the Curraghinalt deposit are hosted by the Mullaghcarn Formation.

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High grade gold mineralization occurs as a series of west-northwest trending, moderately to steeply dipping, subparallel stacked veins and arrays of narrow extension veinlets. These veins are hosted by the Neoproterozoic Dalradian rocks in the central section of the Sperrin Mountains, and represent the largest known gold deposit in the United Kingdom. Figure 1.1: Property Geology

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1.5 Mineral Resource Estimate The current Mineral Resource estimate was prepared by SRK Consulting (Canada) Inc. (SRK) with an effective date of May 5th, 2016. Underground Mineral Resources are reported at a cut-off grade of 5.0 g/t gold based on a gold price of United States dollars (US$)1,200/oz and a gold recovery of 95%. Mineral resources are not Mineral Reserves and do not have demonstrated economic viability.

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Table 1.1: Mineral Resource Statement*, Curraghinalt Gold Project, Northern Ireland, SRK Consulting (Canada) Inc., May 5, 2016

Measured Indicated Inferred Avg.

Rock Thickness Domain Tonnage† Grade Au Metal Tonnage† Grade Au Metal Tonnage Grade Au Metal Code (m) (ʹ000 t) Au (g/t) (000 oz) (000 t) Au (g/t) (ʹ000 oz) †(ʹ000 t) Au (g/t) (ʹ000 oz)

No.1 1 0.82 7 17.11 4 762 12.69 311 292 16.09 151 106-16 2 0.79 2 22 1 960 11.97 369 601 12.07 233 V75 3 0.74 5 22.18 3 492 13.06 207 1,085 9.57 334 Bend 4 0.71 203 7.74 50 779 7.39 185 Crow 5 0.9 393 12.53 158 1,329 9.52 407 T17 6 0.76 12 37.94 15 697 13.89 311 481 8.78 136 Mullan 7 0.78 512 10.61 175 902 10.41 302 Sheep Dip 8 0.59 1 15.12 0 248 11.23 90 715 11.76 270 Road 9 0.64 125 8.63 35 449 9.42 136 Slap Shot 11 0.61 1 12.17 0 347 9.21 103 179 9.82 57 V55 12 0.63 127 7.92 32 41 11.31 15 Sperrin 13 0.48 182 8.48 50 126 8.87 36 Causeway 14 0.69 255 9.99 82 20 11.46 7 Grizzly 15 0.56 158 11.48 58 92 9.34 28 Slap Shot Splay 16 0.47 28 6.93 6 20 6.24 4 Bend Splay 17 0.55 96 10.63 33 20 9.34 6 Total 0.73 28 26.99 25 5,583 11.53 2,069 7,130 10.06 2,306 * Mineral resources are not Mineral Reserves and have not demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. Underground Mineral Resources are reported at a cut-off grade of 5.0 g/t gold based on a gold price of US$1,200/oz and a gold recovery of 95%. † Tonnage was calculated using a density formula defined by SRK based on sulphur estimates. Source: SRK, 2016

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1.6 Mineral Reserve Estimates The effective date for the Mineral Reserve estimate contained in this report is December 12, 2016 and was prepared by JDS. All Mineral Reserves in Table 1.2 are Proven and Probable Mineral Reserves. The Mineral Reserves are not in addition to the Mineral Resources, but are a subset thereof. The Qualified Person (QP) has not identified any risk including legal, political, or environmental that would materially affect potential Mineral Reserves development. Table 1.2: Curraghinalt Mineral Reserve Estimate

Diluted Au Au Ag Ag

Tonnes Grade Ounces Grade Ounces Category (‘ 000t) (g/t) (‘000 Oz) (g/t) (‘ 000 Oz)

Proven 28 18.93 17 10.0 9 Probable 5,211 8.48 1,421 3.9 655 TOTAL 5,239 8.54 1,438 3.9 664 Notes: The Qualified Person for the Mineral Reserve estimate is Michael Makarenko, P. Eng., of JDS Energy & Mining Inc. Mineral Reserves were estimated using a $1,200 /oz gold price and gold cut-off grade of 5.0 g/t. Other costs and factors used for gold cut-off grade determination were mining, process and other costs of $165 /t, transport and treatment charges of $6.00 /oz Au. A royalty of $71.50 /oz Au and a gold metallurgical recovery of 94% were assumed. Silver was not used in the estimation of cut-off grades but is recovered and contributes to the revenue stream. Tonnages are rounded to the nearest 1,000 t, gold grades are rounded to two decimal places, and silver grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained gold and silver are reported as thousands of troy ounces. Rounding as required by reporting guidelines may result in summation differences Source: JDS, 2016

1.7 Mining The FS mine plan is based on a ramp access underground mining operation producing and average of 1,400 t/d of ore from a blend of mining methods, including lateral development, cut & fill and longhole (i.e. longhole stoping, upper retreat and pillar recovery). Annual ore production by mining method and grade and gold ounces are shown in Figures 1.2 and 1.3.

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Figure 1.2: Annual Estimated Mine Production by Mining Method at Curraghinalt

Source: JDS (2016)

Figure 1.3: Annual Mined Gold Grade & Ounces at Curraghinalt

Source: JDS (2016)

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Initial mine development at Curraghinalt will take place from the existing exploration adit and from a newly ramp access which will be collared near the proposed process plant site. Mining methods selected for the Curraghinalt project were chosen to maintain mining flexibility and selectivity for the various anticipated ground conditions. The majority of Mineral Reserves will be mined by longhole open stoping (66% combined longhole, uppers and pillar recovery), plus 17% cut & fill and 17% from development in ore. The mine design will use 18 m sub-levels (floor to floor) and strike lengths averaging 15 m depending on geotechnical parameters. The average diluted stope width will be 1.6 m; however, widths can vary between 1.2 to 3.5 m. The minimum mining width is 1.0 m. Paste backfill, produced in a backfill plant located underground, will be made from a mixture of tailings and cement and will be the primary backfill material, with unconsolidated waste rock from development headings used where possible. An internal ore pass system will direct ore and waste to the haulage levels where diesel powered haul trucks will transport the material to surface via the main ramp that will daylight adjacent to the process plant. Figure 1.4: Primary Mine Infrastructure Design (Looking North-East)

Source: JDS (2016)

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Figure 1.5: Example of Underground Development at Curraghinalt (106-16 Vein), Long Section

Source: JDS (2016)

A comprehensive geotechnical characterization program was completed by SRK in 2016 to bring the overall characterization of the project to a FS level (SRK 2016). The selection of mining methods is driven primarily by geotechnical considerations, interpreted geometry of the veins and distribution of estimated precious metal values within those veins. The permanent ventilation network will consist of three components: primary ventilation fans, secondary fans and auxiliary fans. The two main ventilation fans will be each 2.13 m diameter and equipped with 149 kW motors. Each fan will be capable of delivering 110 m3/sec of fresh air. The fans will be installed in two underground locations to reduce noise on surface. Each fan will feed a different fresh air ventilation raise. Fresh air will be directed to the active mining levels through the two ventilation raises. Level ventilation will be controlled primarily by regulators, ducting, and auxiliary fans. Exhaust air will be directed up the mine ramp and decline. In addition, a series of 4.0 m x 4.0 m Alimak exhaust raises will collect and direct exhaust air out of the mine. Air from the exhaust airways will not be reused again in work areas. Mine water and ground water will be collected on each of the cross-cuts. As two levels will be accessed per footwall drive, the lower level will have drain holes drilled into the cross-cut of the level below. Gravity will be used to collect the water on level sumps and feed into larger pumping stations. A total of four pumping stations will be installed underground at Curraghinalt. Peak total ground water flow was modelled and estimated at 18.9 L/s with an overall average groundwater ingress estimated at 6.2 L/s. Level accesses, cross-cuts, and most other mine development will be driven at an average +2% grade to direct mine water flows towards drainage drill holes, or intermediate sumps.

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The principal method of backfilling mined out will be with paste backfill comprised of filtered tailings, water, and cement in varying proportions. The use of cemented backfill enables secondary stopes along strike to be mined directly adjacent to the primary backfilled stopes without a rib pillar, and prevents sterilization of adjacent veins. Loose waste rock from mine development headings will also be used as backfill when appropriate. Annual ore and waste development is shown in Figure 1.6. Figure 1.6: Annual Ore and Waste Development

Source: JDS (2016)

1.8 Metallurgical Testing and Mineral Processing A significant amount of metallurgical test work has been undertaken on the Curraghinalt project prior to the FS as previously summarized in the 2014 PEA (Micon, NI 43-101 Technical Report Preliminary Economic Assessment, Curraghinalt Project, Northern Ireland, October 30, 2014). The 2015/2016 metallurgical test programs included mineralogy, comminution, gravity separation, flotation, cyanidation, cyanide destruction and solid/liquid separation studies. Historical and FS test work results indicate that the mineralization responded well to flotation and to cyanide leaching for precious metal extraction. The process selected for the Curraghinalt project is based on test work described in Section 13 and is comprised of crushing, grinding, flotation of a concentrate, cyanide leaching of the concentrate, carbon adsorption, cyanide destruction, carbon elution and regeneration, gold refining, dry stack tailings and paste backfill. Grindability test work indicated that the hardest 75th Percentile Bond Work Index (BWi) was 13.7 kWh/t and the SAG Mill Comminution test (SMC) A*b was 54.9, which places the mineralization in the moderate or medium hardness classification for comminution and amenable to SAG milling.

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The overall recoveries for gold above a 5 g/t mine cut-off ranged from 93.9 to 94.8% excluding solution losses. Typical operational inefficiencies can vary from 0.3 to 1% and therefore the life of mine (LOM) mine plan weighted average gold recovery was estimated at 94.3%.

1.9 Recovery Methods The process plant utilizes conventional technology and equipment, which are standard for the industry. The process plant is designed to process 1,500 t/d, or 511,000 tonnes per year (t/y) at 92% overall plant availability, operating for 365 days per year. Run of Mine ore will be fed through a jaw crusher and stored in a covered stockpile, prior to being fed into the grinding circuit. The grinding circuit will consist of a SAG mill operating in closed circuit with a hydrocyclone cluster. Material from the crushed ore stockpile will be fed to the SAG mill via the SAG mill feed conveyor. The grinding circuit will operate at a nominal throughput of 68 tonnes per hour (t/h) (fresh feed), and produce a final particle size P80 of 240 µm. Cyclone underflow will be fed to a rougher flotation circuit where standard flotation reagents will be added to produce a flotation concentrate. The concentrate will then be thickened and fed to a small regrind mill where it will be reground to a particle size of P80 of 50 µm. The regrind product will be pumped to the Carbon in Leach (CIL) circuit, designed to provide 48-hours of residence time. As the slurry flows through the CIL tanks, it will be leached and the dissolved gold and silver will be adsorbed onto activated carbon. Activated carbon will be moved to a standard washing and stripping stage to produce a gold-rich solution, referred to as a pregnant solution. Pregnant solution from the strip circuit will be pumped to the refinery for electrowinning to produce a gold sludge. Pregnant solution will be pumped through the electrowinning cell and the resulting barren solution will be pumped back into the barren solution tank for reuse, with periodic bleeding to the CIL circuit. Gold-rich sludge from the electrowinning cell will then be washed off the steel cathodes into the sludge holding tank. Periodically, the sludge will be drained, filtered, dried, mixed with fluxes and smelted in an electric direct-fire induction furnace to produce gold doré. This process will take place within a secure and supervised area. The Northern Ireland gold doré will be stored in a vault to await shipment.

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1.10 Infrastructure The Curraghinalt project’s key support infrastructure includes the following (see Figure 1.7):  A 2.0 km access road between the plant site and the Crockanboy Road;  Haul road between mine portal and process plant;  Process plant with security, administration, and warehousing facilities;  Underground paste backfill plant to provide cemented paste to the underground workings;  Mine support facilities including mobile equipment maintenance, mine personnel facilities, and first aid / mine rescue;  Explosive storage facilities ( temporary on surface and permanent underground);  Utility infrastructure for the site, including: water, sewer, fire protection, & communications;  A 33 kV power transmission line connected to the national electricity grid;  Mine water sediment settling ponds and water treatment plant;  Surface water handling infrastructure to manage local runoff from the facilities; and  DSF for storing filtered tailings and waste rock within a lined area.

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Figure 1.7: General Site Layout

Source: JDS (2016)

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1.11 Environment and Permitting The primary approvals required to proceed with the Curraghinalt project are a mining licence and planning permission. Planning permission has to be obtained before a mining licence can be granted. Completion of an Environmental Impact Assessment (EIA) process and submission of an Environmental Statement (ES) and a mine waste management plan are prerequisites to the submission of the application for planning permission. In preparation for submitting a planning application, the Proposal of Application Notice for the Curraghinalt Project was submitted to Department for Infrastructure (DfI) in August 2016 and formal community consultation events were undertaken in November 2016. The formal community consultation builds on the ongoing stakeholder engagement program run by DGL for more than four years. Statutory consultees are being engaged through the DfI. The parties responsible for assisting Dalradian with the compilation of the planning application and supporting documentation are:  Turley, a planning consulting company that is well established in Northern Ireland - responsible for collation of the planning application;  SRK Consulting (UK) Ltd. (SRK), which is responsible for coordination of the EIA process and compilation of the ES report and the mine waste management plan.

There are number of sensitive features in the project environment that have been taken into account in the design of the project. Key features are as follows:  The project is located in the Sperrin Mountain Area of Outstanding Natural Beauty (AONB);  The Owenkillew and Owenreagh Rivers are within the River Foyle and Tributaries Special Area of Conservation (SAC), which supports a significant presence of Atlantic salmon (Salmo salar) and otter (Lutra lutra);  The Owenkillew River is a SAC, which incorporates the Owenkillew River Area of Special Scientific Interest (ASSI) as well as Drumlea and Mullan Woods ASSI and Owenkillew and Glenelly Woods ASSI, and it features the largest population of freshwater pearl mussel (Margaritifera margaritifera) in Northern Ireland, as well as extensive beds of Stream Water Crowfoot (Ranunculus penicillatus ssp penicillatus);  The Owenreagh River is a proposed ASSI for the feature of freshwater pearl mussel;  Much of the higher ground across the ridge is covered with peat of varying thickness and quality, supporting habitats that are recognized as priority habitats in Northern Ireland and are also listed under Annex I of EU Habitats Directive.

The predominant land use on the topographic ridge between the Owenkillew and Owenreagh Rivers is farming, comprised of multiple small farm holdings. The farmland is grazing land predominantly for cattle and sheep. Residential dwellings and commercial properties in the vicinity of the project are

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DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY predominantly clustered around the hamlet of Rouskey to the west and the village of Greencastle to the south-east of the development. Rouskey and Greencastle also have a number of community facilities (school, outdoor leisure facility, churches, and community centres). Residential buildings are also situated along the major roads in the area, including the B46 Crockanboy Road, but are not present along the topographic ridge. Dalradian has acquired the land necessary for the development of the project. There are a number of small privately owned land holdings adjacent to the proposed project infrastructure site. The project will provide significant opportunities for economic development. Benefits will include employment, training, payment of taxes and the financial contribution to the local economy during construction and operation. The project will directly employ between 350 – 425 people at various times during construction and through the mine life. The various socio-economic impacts will be described in a socio-economic impact assessment report being prepared as part of the EIA and planning application. The principal risk to the project relates the potential delays in dealing with the technical issues described in Chapter 20 of this document. Dalradian will need to continue working closely with the regulatory authorities and provide detailed information to prove the effectiveness of mitigation measures developed to manage the various impacts. Dalradian has invested in developing constructive relationships with its neighbours as well as other project-affected communities. Through consultation processes, stakeholders have raised concerns about the project. These are being addressed in the early project design and management plans as far as possible. Ongoing consultation with neighbouring landowners and other community stakeholders will be required during the life of the project to ensure that any concerns are swiftly resolved. As part of the Feasibility Study, Dalradian commissioned SRK and JDS to prepare a conceptual level closure plan and determine the associated costs for the full restoration of the site post mining. The closure concepts are described in Chapter 20 and the associated costs are reported elsewhere in this document.

1.12 Capital Costs LOM project capital costs are estimated to total US$ 357M, consisting of the following distinct phases:  Pre-production Capital Costs – includes all costs to develop the property to an average of 1,400 t/d underground production rate. Initial capital costs total $192M (including $18M contingency) which will be expended over a 24-month pre-production construction and commissioning period; and  Sustaining & closure capital costs – includes all costs related to the acquisition, replacement, or major overhaul of assets during the mine life required to sustain operations, and costs related to the progressive and final closure. Sustaining capital costs are estimated to be $165M (including $6M in contingency) and are expended in operating Year 1 through Year 11.

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The capital cost estimate was compiled utilizing input from experienced engineers, contractors, and suppliers. Wherever possible, bottom-up first principle estimates were developed and benchmarked against other projects of similar size and site conditions. Table 1.3 presents the capital cost summary for pre-production, sustaining, and closure capital costs in Q4 2016 dollars with no escalation. Table 1.3: Capital Cost Summary

Pre-Production Sustaining/ Total WBS Area (M$) Closure (M$) (M$) 1000 Mining 45.9 142.6 188.5 1100 Underground Equipment 11.7 31.8 43.5 1200 Underground Infrastructure 6.9 13.0 19.9 1300 Capital Development 13.9 97.7 111.7 1400 Capitalized Production Costs 5.3 - 5.3 1500 Paste Plant 8.1 - 8.1 2000 Site Development 8.7 2.0 10.7 2100 Bulk Earthworks (Pads) 3.9 0.9 4.8 2200 Site Roads 1.8 1.1 2.9 2300 Surface Water Management 2.8 - 2.8 2400 Access, Fencing, & Traffic 0.2 - 0.2 3000 Ore Crushing & Handling 6.5 1.4 7.9 3200 Crushing & Screening 3.0 1.4 4.4 3300 Fine Ore Storage & Reclaim 3.1 - 3.1 3400 Dust Management 0.4 - 0.4 4000 Mineral Processing Plant 36.9 4.1 41.0 4100 Process Plant Building 6.6 4.1 10.7 4200 Grinding 5.7 - 5.7 4300 Flotation & Pre-Leaching 2.9 - 2.9 4400 Cyanide Leaching 4.9 - 4.9 4500 Adsorption, Desorption, & Regeneration 2.9 - 2.9 4600 Refinery 0.4 - 0.4 4700 Cyanide Destruction & Tailings 7.6 - 7.6 4800 Reagents 1.9 - 1.9 4900 Process Utilities 3.9 - 3.9 5000 On-Site Infrastructure 28.9 - 28.9 5100 Electrical Supply & Distribution 9.3 - 9.3 5200 Water Supply, Distribution, & Treatment 8.8 - 8.8 5400 Waste Management 0.7 - 0.7 5500 Ancillary Buildings 6.1 - 6.1 5600 Surface Mobile Equipment 2.8 - 2.8 5700 Bulk Fuel Storage & Distribution 0.1 - 0.1 5800 IT, Communications, & Software 1.0 - 1.0 6000 Off-Site Infrastructure 4.9 - 4.9 6100 Power Transmission Line 4.9 - 4.9 7000 Dry Stack Facility 1.4 2.6 4.0

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Pre-Production Sustaining/ Total WBS Area (M$) Closure (M$) (M$) 7100 Dry Stack Facility 1.4 2.6 4.0 8000 Project Indirect Costs 12.7 2.2 14.9 8100 On-Site Contract Services 0.8 - 0.8 8200 Temporary Facilities & Utilities 1.3 - 1.3 8300 Contractor Indirect Costs 2.2 - 2.2 8400 Freight 5.2 2.2 7.4 8500 Startup & Commissioning 3.1 - 3.1 9000 Engineering & Procurement 7.8 - 7.8 9100 Engineering & Procurement 7.8 - 7.8 9800 Owners Costs 13.2 - 13.2 9810 Project & Construction Management 4.9 - 4.9 9820 Pre-Production Milling 2.3 - 2.3 9830 Pre-Production General & Administration 6.0 - 6.0 C100 Closure & Reclamation 7.5 3.9 11.4 C101 Closure Assurance 7.5 (7.5) - C102 Closure Costs (Net of Salvage) - 11.4 11.4 Subtotal Pre-Contingency 174.3 158.8 333.1 9900 Contingency 17.6 6.4 24.0 Total Capital Costs 192.0 165.1 357.1 Source: JDS (2016)

1.13 Reclamation & Closure Table 1.4 summarizes the closure costs within the model. Progressive closure activities occur throughout the mine life. Demolition activities occur during Year 11 based on the actual reserve. Progressive reclamation of the site will take place throughput the mine life and as cells of the dry stack are completed. Ongoing monitoring and maintenance activities are incurred between Year 12 and Year 16. Table 1.4: Reclamation & Closure Cost Summary

Total Cost Category % (US$ M) Progressive Closure (activities occurring during 3.4 22 operations) Demolition & Closure 9.8 64 Ongoing Monitoring & Maintenance 2.1 14 Total 15.3 100 Source: JDS (2016)

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Figure 1.8: Life of Mine Capital Cost Profile (Annual & Cumulative Capital Costs)

200 400 354 356 356 357 357 334 175 350 312 293 150 271 300 132 254 234 125 250 192 100 200

75 150 60

50 42 100 Period Capital Cost $CAD M) $CAD Cost Capital Period 20 23 19 21 20 25 17 50 CumulativeCapital Cost ($CAD M) 2 0.5 0.5 0.5 0 0 -2-11234567891011

Source: JDS (2016)

1.14 Operating Costs LOM operating costs for the project are estimated to average US$123.54/t processed. This includes the following sectors:  Underground mining;  Mineral processing; and  General & administration (G&A).

The operating costs exclude off-site costs (such as shipping and refining costs), taxes, and royalties. These cost elements are used to determine the net smelter return (NSR) in the economic model, and are described in Section 23. Table 1.5 presents a summary of the LOM operating costs, with no escalation.

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Table 1.5: Operating Cost Summary

Average Life of Mine US$/t Sector US$ M/year US$ M processed Underground Mining 42.0 442.4 84.44 Processing 13.8 145.8 27.83 G&A 5.6 59.0 11.27 Total Operating Costs 61.4 647.3 123.54 Source: JDS (2016)

All operating costs are included in the economic cash flow model according to the production schedule. Figure 1.9: Life of Mine Operating Cost Profile

100 300

90 270

80 240

70 65 65 65 210 63 62 61 62 61 59 60 180 53 50 150

40 120 32 30 90

20 60 Period Operating Cost (US$ M) (US$ Cost Operating Period 10 30 Unit OperatingCost ($US/t processed) 0 0 1234567891011 Underground Mining Processing General & Administration Unit Operating Cost

Source: JDS (2016)

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1.15 Economic Analysis Based on the FS findings, it can be concluded that the project is economically viable at estimated metal prices with an after-tax Internal Rate of Return (IRR) of 24.4% and a Net Present Value (NPV) of US$301.3M at a 5% discount rate. Table 1.6: Summary of Economic Results

Parameter Unit Value

Gold Price US$/oz 1,250 Silver Price US$/oz 17.00 Exchange Rate US$:C$ 0.75 Exchange Rate US$:GBP 1.20 Exchange Rate US$:EU 1.05 Pre-Tax NPV5% US$ M 371.7 Pre-Tax IRR % 27.8 Pre-Tax Payback years 3.6 Total Taxes US$ M 96.7 Corporate Tax Rate % 17.0 After-Tax NPV5% US$ M 301.3 After-Tax IRR % 24.4 After-Tax Payback years 4.0 Break-Even After-Tax Gold Price US$/oz 865 Payback is calculated on annual cash flows without considering discount rates or inflation. Source: JDS, 2016

Figure 1.10: Annual and Cumulative After-Tax Cash Flows

Source: JDS (2016)

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Table 1.7: Cash Cost Summary

Parameter Unit Value

Total Cash Costs US$ M 754 Silver By-Product Credits US$ M (6) Net Cash Costs US$ M 748 Closure, Reclamation & Remediation US$ M 4 Sustaining Capital Expenditure US$ M 161 All-in Sustaining Cash Costs US$ M 913 Gold Sales 000 payable Au oz 1,355 LOM All-In Sustaining Cash Unit Costs $/payable oz 674 Initial CAPEX US$ M 192 Total All-in Sustaining & Construction Unit Costs $/payable oz 815 Source: JDS (2016)

To determine project value drivers, a sensitivity analysis was performed on the NPV and IRR. The project proved to be most sensitive to changes in the metal pricing and gold grades, and least sensitive to changes in exchange rate. Figure 1.11: After-Tax NPV5% Sensitivities

Sensitivity, After-Tax NPV @ 5% 600

500

400

300

200

100 After-Tax NPV @ 5% (US$M) 5% @ NPV After-Tax - -25% -20% -15% -10% -5% Base +5% +10% +15% +20% +25% Au Price 58 107 157 205 253 301 349 397 445 493 541 Au Grade 58 108 157 206 253 301 349 397 445 493 541 Recovery 57 107 157 205 253 301 349 OPEX 381 365 349 333 317 301 285 270 254 238 222 CAPEX 381 365 349 333 317 301 285 270 254 238 222 GBP F/X 394 376 357 338 320 301 283 264 246 227 208

Source: JDS (2016)

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Figure 1.12: After-Tax IRR Sensitivities

Sensitivity, After-Tax IRR 40%

35%

30%

25%

20%

15% After-Tax IRR

10%

5% -25% -20% -15% -10% -5% Base +5% +10% +15% +20% +25% Au Price 9% 13% 16% 19% 22% 24% 27% 29% 32% 34% 36% Au Grade 9% 13% 16% 19% 22% 24% 27% 29% 32% 34% 36% Recovery 9% 13% 16% 19% 22% 24% 27% OPEX 30% 29% 28% 27% 25% 24% 23% 22% 21% 20% 19% CAPEX 34% 32% 30% 28% 26% 24% 23% 21% 20% 19% 17% GBP F/X 31% 29% 28% 27% 26% 24% 23% 22% 21% 20% 18%

Source: JDS (2016)

1.16 Conclusions Results of this FS demonstrate that the Curraghinalt project warrants development due to its positive, robust economics. It is the conclusion of the QPs that the FS summarized in this technical report contains adequate detail and information to support a FS analysis. Standard industry practices, equipment and design methods were used in this FS and except for those outlined in this section, the report’s authors are unaware of any unusual or significant risks, or uncertainties that would affect project reliability or confidence based on the data and information made available. For these reasons, the path going forward must continue to focus on obtaining the environmental permit approval, while concurrently advancing key activities that will reduce project execution risk and time. Risk is present in any development project. Feasibility engineering formulates design and engineering solutions to reduce that risk common to every mining project such as resource uncertainty, mining recovery and dilution control, metallurgical recoveries, political risks, environmental and social schedule and cost overruns, and labour sourcing.

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Potential risks associated with the Curraghinalt project include:  Permitting – Gold mining is a relatively new industry for Northern Ireland. Regular communication with all local stakeholders is a key step in the permitting process.  Grid Power – The permitting and construction of the main power line between the grid and the plant site rests with Northern Ireland Energy. A delay in receiving grid power to the plant site would require that remote power generation be used until grid power is established.  Groundwater - Groundwater inflows have been modelled and the mine development plan addresses estimated flows as well as potential variations that can be controlled by mining techniques. Increases in the actual amount of groundwater encountered would impact development costs. Drilling for drainage, and operational definition drilling included in the mine plan will help to identify specific water bearing zones with higher than expected flows to establish control and/or management procedures. As well, initiating certain development earlier in the mine life to allow more time for dewatering may prove cost effective.  Mine Dilution - Grade control and proper mining execution when implemented will maintain minimal unplanned dilution, which would minimize potential impacts on grade, throughput, and operating costs. Additional test stoping at Curraghinalt will help to verify dilution estimates.  Geomechanical Conditions – Comprehensive studies were done to accurately estimate anticipated ground conditions and appropriate ground support methods to ensure a safe work environment. Unforeseen changes in ground conditions could pose a safety risk and require changes to the ground support system or mine design. Accumulating and analyzing geotechnical information of planned mining areas through diamond drilling ahead of production would help reduce this risk.  Cyanide Management – The use of cyanide in the process plant requires that staff and contractors receive the required training and follow safe handling procedures as directed by the International Cyanide Management Code, to which Dalradian will become a signatory.

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conditions than expected. If proven, some of these areas could be converted from cut & fill mining to longhole which would reduce mine operating cost in these areas and increase the throughput.  Corporate Tax Rate – The UK Government has indicated that it will lower the corporate tax rate from 17% to 12.5%. If enacted, this change in tax rate will have a positive impact on the project’s economics.  Production Rate – Potential exists to increase the mine production rate above 1400 t/d through further refinements to the mine design, including further geotechnical investigations.  Ore Sorting – The use of optical and laser technologies to sort the ore prior to processing has the potential to discard waste material within the ore feed, thereby increasing the grade entering the process plant and freeing up capacity. The technology could also affect the mine cut-off grade such that lower grade resource may become economic to mine as the internal waste material could be separated. Initial test work has been positive and further tests are ongoing.  Increased Gold Recovery – Further metallurgical test work and flow sheet optimization of the process plant may lead to higher gold recoveries, and therefore higher revenue.  Construction Costs - Civil construction capital cost may be reduced by additional engineering to better balance cut-and-fill of the plant site and water management infrastructure.  Concrete Reduction - Opportunity exists to reduce concrete quantities with more geotechnical investigation during detailed engineering.  Used Equipment – Opportunity exists to purchase good quality used equipment that meets design specifications at a fraction of the quoted new prices in the FS.

1.17 Recommendations The project exhibits robust economics with the assumed gold price, exchange rate and consumables pricing. The recommended development path is to continue efforts to obtain the environmental permit approval while concurrently advancing key activities that will reduce project execution time and help minimize costs. Associated project risks are manageable, and identified opportunities can provide enhanced economic value. From project risks and opportunities, the following were identified as critical actions that have the potential to strengthen the project and further reduce risk and should be pursued as part of the project development plan.

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 Complete additional exploration diamond drilling to expand the resource base;  Complete additional infill diamond drilling to convert more of the Inferred Mineral Resource into Measured & Indicated resources;  Initiate further geotechnical investigations and study on currently classified weaker ground conditions within the Feasibility Study mine plan;  Conduct additional geotechnical studies on building site, dry stack storage foundations and closure plan to further optimize the design;  Continue with further refinements to the mine plan ahead of mine construction;  Conduct further test work on the viability of employing ore sorting technology as a method of rejecting waste in the plant feed and increasing head grade in the process plant; and  Investigate the potential to purchase used equipment to reduce project capital costs.

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2 Introduction

JDS Energy & Mining Inc. (JDS) was commissioned by Dalradian Resources Incorporated (Dalradian) to carry out a NI 43-101 Feasibility Study (FS) and Technical Report for The Curraghinalt Gold Project (Curraghinalt or the project), which is an advanced exploration gold project owned by Dalradian and located in the County of Tyrone, Northern Ireland, United Kingdom, approximately 100 km west of Belfast. The project contains several gold deposits within an exploration concession covering an area of more than 120,000 hectares (ha). The Curraghinalt Gold project, comprising 16 gold-bearing veins, is proposed to be mined by conventional underground longhole and cut & fill mining methods at an annual average rate of 511,000 tonnes per annum (t/a). Underground openings will be backfilled with a combination of paste fill and unconsolidated waste rock. Run of mine (ROM) ore will be hauled to surface via the main access ramp where it will be crushed and stored in a covered stockpile prior to entering the processing plant. Gold will be extracted through standard flotation and concentrate leaching methods to produce a final gold doré product. Water for the process and paste backfill plants will be sourced from surface runoff and water pumped from the underground mine. A network of diversion ditches and catchment ponds will be utilized to capture site runoff prior to water treatment and discharge. Tailings will be filtered and trucked to a dry stack storage tailings facility (DSF) adjacent to the process plant. A total of 1.35 Moz of gold is planned to be recovered over an 11-year mine life. This report presents the results of the FS, in accordance with the Canadian Securities Administrators’ National Instrument (NI) 43-101 and Form 43-101F1, collectively NI 43-101, guidelines. Five previous technical reports were prepared for The Curraghinalt Gold Project documenting exploration work completed by Dalradian on The Curraghinalt Gold Project in 2007, 2010, 2012, 2014 and 2016. The most recent technical reports were a Preliminary Economic Assessment (PEA) dated October 30, 2014, an updated PEA, dated May 2016 and a Mineral Resource report, dated May 2016. All technical reports were filed on SEDAR.

2.1 Qualifications and Responsibilities The Qualified Persons (QPs) preparing this report are specialists in the fields of geology, exploration, Mineral Resource and Mineral Reserve estimation and classification, geotechnical, environmental, permitting, metallurgical testing, mineral processing, processing design, capital and operating cost estimation, and mineral economics. None of the QPs or any associates employed in the preparation of this report has any beneficial interest in Dalradian and neither are any insiders, associates, or affiliates. The results of this report are not dependent upon any prior agreements concerning the conclusions to be reached, nor are there any undisclosed understandings concerning any future business dealings between Dalradian and the QPs. The QPs are being paid a fee for their work in accordance with normal professional consulting practice. The following individuals, by virtue of their education, experience and professional association, are considered QPs as defined in the NI 43-101, and are members in good standing of appropriate professional institutions/associations. The QPs are responsible for the specific report sections as follows in Table 2.1

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Table 2.1: QP Responsibilities

QP Company Site Visit Report Section(s) June 27, 2015 Oct. 26, 2015 1, 2, 3, 4, 5, 6, 18.1, Jan. 21, 2016 18.3,18.11, 18.12, Garett Macdonald, P.Eng. JDS Energy & Mining Inc. April 4, 2016 18.13, 21, 22, 24, 25, Sept. 19, 2016 26, 27, 28, 29 Oct. 21, 2016 October 26-27, 16.1,16.2, 16.4, 16.5, 2015 Mike Makarenko, P.Eng. JDS Energy & Mining Inc. 16.6, 16.7, 16.8, 16.9, September 19, 16.10, 16.11, 16.12 2016 January 22-26, Indi Gopinathan, P.Eng. JDS Energy & Mining Inc. 19, 23 2016 November 23-29, Jean-François Couture, P.Geo SRK Consulting (Canada) Inc. 7, 8, 9, 10, 11, 12, 14 2014 January 26, 2016 Stacey Freudigmann, P.Eng. JDS Energy & Mining Inc. and November 13, 17 15, 2016 May 22, 2016 and Bruce Murphy, P.Eng. SRK Consulting (Canada) Inc. 16.3 May 30, 2016 November 26-28, 18.6, 18.7,18.8, 18.9, William Harding, C.Geol. SRK Consulting (UK) Ltd. 2014 18.10 September 2013, Rob Bowell, C.Geol SRK Consulting (UK) Ltd. January 19-22, 18.5 2016 November 25-26, Cam Scott, P.Eng SRK Consulting (Canada) Inc. 18.2, 18.4 2016 November 26-28, Jane Joughin, Pri.Sci.Nat SRK Consulting (UK) Ltd. 2014 and 22-23 20 January 2016 Source: JDS (2016)

2.2 Units, Currency and Rounding The units of measure used in this report are as per the International System of Units (SI) or “metric” except for Imperial units that are commonly used in industry (e.g., ounces (oz.) and pounds (lb.) for the mass of precious and base metals). All currency figures quoted in this report refer to US dollars (US$ or $) unless otherwise noted. Frequently used abbreviations and acronyms can be found in Section 26.This report includes technical information that required subsequent calculations to derive subtotals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, JDS and the QPs do not consider them to be material.

2.3 Sources of Information This report is based on information collected by JDS during site visits performed as stated in Table 2.1 and on additional information provided by Dalradian throughout the course of JDS’s investigations. Other information was obtained from the public domain. JDS has no reason to doubt the reliability of the information provided by Dalradian.

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3 Reliance on Other Experts

The QP’s opinions contained herein are based on information provided by Dalradian and others throughout the course of the study. The QPs have taken reasonable measures to confirm information provided by others and take responsibility for the information. Non-QP specialists relied upon for specific advice include:  Hoy Dorman – Traffic and Road Infrastructure;  Kaya Consulting - Water Balance Calculations;  Osisko Mining - Technical Services Backfill plant design and Test Work;  SLR Consulting – Peat Specialists;  Turley – Planning Specialists;  Hatch – Process Plant Design;  Allnorth Consulting – Site Plan Drafting;  Wardell Armstrong – Cyanide Management;  Land Use Consultants – Landscape Management;  Quod – Economics Planning Submission; and  Corvus Consulting – Environmental Consulting.

The QPs used their experience to determine if the information from previous reports was suitable for inclusion in this technical report and adjusted information that required amending.

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4 Property Description and Location

4.1 Location The Northern Ireland property (formerly the Tyrone project) is located in County Tyrone and County Londonderry, Northern Ireland. The Curraghinalt deposit is found on the property, approximately 100 km west of Belfast by road and 15 km northeast of the town of Omagh. Access to the Curraghinalt deposit is via a number of paved highways and local roads. The centre of the property is located at approximately 7.105° longitude west and 54.719° latitude north. Figure 4.1: General Location Map

Source: Dalradian (2016)

4.2 Mineral Tenure Dalradian’s property in Northern Ireland measures approximately 120,000 ha comprising six contiguous areas (DG1, DG2, DG3, DG4, DG5 and DG6), to which the Company has title. There are two elements comprising the titles—mineral Prospecting Licences (Prospecting Licences), and mining lease option agreements (Option Agreements) for gold and silver – which are controlled by two separate government bodies, as described in more detail below. Dalradian does not hold any other titles.

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Dalradian holds, through its wholly-owned subsidiary Dalradian Gold Limited (Dalradian Gold), a 100% interest, subject to net smelter returns (NSR) and royalties described below, in Option Agreements and Prospecting Licences in counties Tyrone and Londonderry, Northern Ireland, United Kingdom. The Crown Estate Commissioners have entered into Option Agreements with Dalradian Gold for gold and silver on six contiguous areas referred to as DG1, DG2, DG3, DG4, DG5, and DG6. The Department for the Economy has granted to Dalradian Gold Prospecting Licences for all metals over the same six areas. The Crown Estate Commissioners Option Agreements have a six-year term and can be renewed indefinitely. Prospecting Licences and Option Agreements in Northern Ireland are issued for six- year periods and may be renewed (or extended) subject to relevant conditions being met and satisfied at the Crown Estate Commissioners discretion. After the end of each year, a progress work report is submitted within three months of the licence anniversary date to the licensing authorities. Included in the reports is summary of the work performed for the year and a summary of the spending. At the end of each six-year period, a full reissuing application process must be undertaken, whereby a full six-year work report is submitted to the licensing bodies along with a new application for another six-year period. Renewals, extensions, and reissuing are not automatic. The Option Agreements for DG1 to DG6 have a renewal term expiring on December 31, 2021. The current Prospecting Licences for DG1 and DG2 (named DG1/14 and DG2/14) expire December 31, 2017, at which point they can be extended for another two years. The Prospecting Licences for DG3 and DG4 (named DG3/11 and DG4/11) have a renewal term expiring April 23, 2017, at which point they can be reapplied for on a new six-year agreement. Tournigan Gold Corp (Tournigan) held the licences DG1-DG4 from 2002 to late 2009, at which time they were transferred to Dalradian. The licences outline the annual general work program to be undertaken on the six licences. The Department for the Economy is required to consult with other departments and with public bodies concerning its intention to issue a licence, and is also required to place notices in the Belfast Gazette and at least one local newspaper. This is primarily to allow the owners of surface land within the area under application the opportunity to make their views known. The Department for the Economy notes that a draft licence and a ‘letter of offer’ are provided to applicants once all comments have been considered. The letter of offer may contain a number of conditions, although the Department for the Economy notes that, at the prospecting stage, it is usually sufficient for the applicant to inform all listed contacts of its plans and progress. When the conditions set out in the letter of offer are accepted and the terms of the draft licence agreed upon, the licence is executed by the Department for the Economy and the company. The Department for the Economy states that planning permission is not required for early stage exploration under Part 16 Class A of the General Permitted Development Order (Northern Ireland) 2015 subject to specified limitations and conditions, although the local council must be informed of the planned work, including the nature and scale, time, and location of the company’s drilling activities, and locations.

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The current Department for the Economy (DfE) Prospecting Licences for DG1 and DG2 (named DG1/14 and DG2/14) expire December 31, 2017, at which point they can be extended for another two years. The Prospecting Licences for DG3 and DG4 (named DG3/11 and DG4/11) have a renewal term expiring April 23, 2017 at which point they can be reapplied for under a new six- year licence. Every six years (i.e., after two 2-year extensions), Dalradian must reapply for the Prospecting Licences before the Licences expire. Reapplication for the Prospecting Licences for DG1 and DG2 will be required in 2017 and for DG3 and DG4 in 2016/2017. Crown Estate Commissioners (CEC) Option Agreements for all six licences have a renewal term expiring December 31, 2021. The CEC Option Agreements have a six-year term and can be renewed indefinitely at the CEC’s discretion. The six pieces of property are often referred to simply as DG1, DG2, DG3, DG4, DG5, and DG6 or DG-1, DG-2, DG-3, DG-4, DG-5, and DG-6 (with or without hyphens). In this report they will be referred to as DG1, DG2, DG3, DG4, DG5, and DG6 although some older figures provided herein show them as DG-1, DG-2, DG-3, and DG-4, as well as DG-01, DG-02, DG-03, and DG-04.

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Table 4.1: Curraghinalt Project Mineral Licences

CEC CEC DfE DfE DfE DfE Licence Area Licencee Area Effective Date of Effective First Second Date of Number (km2) Date Expiry Date Extension Extension Expiry Dalradian Gold Rousky DG1/14 167.5 01/01/2016 31/12/2021 01/01/2014 01/01/2016 01/01/2018* 31/12/2019 Limited Dalradian Gold Creggan DG2/14 184.5 01/01/2016 31/12/2021 01/01/2014 01/01/2016 01/01/2018* 31/12/2019 Limited Dalradian Gold Strabane DG3/11 248 01/01/2016 31/12/2021 24/04/2011 24/04/2013 24/04/2015 23/04/2017** Limited Dalradian Gold Plumbridge DG4/11 244 01/01/2016 31/12/2021 24/04/2011 24/04/2013 24/04/2015 23/04/2017** Limited Dalradian Gold Claudy DG5/16 211 01/01/2016 31/12/2021 01/06/2016 N/A N/A 31/05/2022 Limited Dalradian Gold Dungiven DG6/16 177 01/01/2016 31/12/2021 01/06/2016 N/A N/A 31/05/2022 Limited Area names are from DfE records *Subject to application & approval **New 6-year licence will be applied for to continue licence coverage from 24.04.2017 to 23.04.2023

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The Mineral Resource Estimate presented in this report is located entirely on the property covered by licence DG1.

4.3 Location of Mineralized Zones Details of the locations of the mineralized zones, the portal, and adit are shown in Figure 4.2. The location of the Curraghinalt gold deposit relative to the boundaries of DG1 and DG2 can be seen in Figure 4.3.

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Figure 4.2: Locations of Principal Veins and Adit on DG1

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Figure 4.3: Curraghinalt Gold Deposit Location

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4.4 Underlying Agreements A NSR royalty of 2% is payable to Minco plc (Minco) on a portion of DG1 that includes the Curraghinalt gold deposit. The NSR was inherited with the property when it was acquired by Dalradian in 2009. More information on prior ownership is presented in Section 5.1. As provided in the option Agreements, a 4% royalty will be payable to the CEC upon production of silver and/or gold.

4.5 Permits and Authorization For exploration work, formal notice of intention to enter land to carry out work must be given, and the agreement of landowners sought, before entering any property. Compensation is generally payable to the landowner for access and use of the land during exploration. Dalradian has obtained all necessary permits and certifications from governmental agencies to allow for exploration on the property. This includes three permits for the recent underground exploration program, including approval from Northern Ireland regulators for a number of management plans governing items such as waste, water, noise, traffic, and dust.

4.6 Environmental Liabilities & Considerations JDS is not aware of any material environmental liability arising from Dalradian’s ownership of the Curraghinalt property. Much of the property occurs within the Sperrin Mountains, which are designated an Area of Outstanding Natural Beauty. In addition, there are a number of protected and special interest areas around the project. The nearest Areas of Special Scientific Interest to the project are the Owenkillew and Owenreagh Rivers, the Mullaghcarn/Mountfield Quarry, Murrins, Cashel Rock, Boorin Wood, and Black Bog. The nearest Special Areas of Conservation include Drumlea and Mullan Woods, Owenkillew River, and Black Bog. Environmental baseline studies were initiated by SLR Consulting for Dalradian in June, 2010 and have included collecting data on meteorology, hydrology, hydrogeology, water quality, sediment quality, acid rock generation potential of the mineral and waste rock, flora, terrestrial and aquatic fauna, air quality, visual resources, cultural heritage resources, and the local socio-economy. Dalradian continues to gather environmental baseline data to be used in the preparation of an environmental and social impact assessment and, in addition, more detailed site specific environmental studies are ongoing. Dalradian does not currently have a permit for mining the Curraghinalt gold deposit. Dalradian commenced the environmental and social impact assessment at the end of 2014 to examine the potential impacts of a full mine build, as well as options for the elimination or mitigation of such impacts. SRK UK is lead and coordinating environmental consultant for preparation of the environmental and social impact assessment. The report, together with a project description, will form the basis of a planning application for the full mine build anticipated to be submitted to the Department of the Environment.

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Dalradian and SRK UK along with other consultants began formal stakeholder engagement with the Department and statutory consultees for the environmental and social impact assessment in December 2015 with an initial meeting with the Department of Environment officials. This was followed by other government agency meetings and initial community consultations in January 2016. The purpose of these meetings is to receive government agency, community, and other stakeholder feedback to input into the project description and environmental and social impact assessment. To date, more than 700 stakeholders have attended various consultation events and meetings to hear about the proposed mine and give their feedback.

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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

Access to the property is via a number of highways and local roads, including the B48 from Omagh to Gortin, and the B46 from Gortin to Greencastle. Local county roads, private roads, and farm tracks provide generally good access within the property. Figure 5.1 shows the network of local roads and rivers around the property area. The topography consists of rolling hills and broad valleys. Glacial deposits and peat cover much of the area, resulting in mixed forest and heathlands, as well as farmland in the valleys. Relief ranges between around 100 masl in the major river valleys to a maximum height of approximately 550 masl. Local climate conditions are temperate, with an average annual temperature of 9°C, and average daily temperatures varying between 4°C and 15°C throughout the year. The project area is characterized by annual rainfall in the order of 1,150 – 1,350 mm per annum, with high seasonality. The wettest period is between October and January and the driest period between April and July. Snowfall is usually restricted to areas of higher elevation and occurs on 10 days or less per year. Exploration activities can generally be conducted year-round. The town of Omagh (population 22,000) provides lodging and local labour, as well as the smaller local villages Gortin, Rouskey and Greencastle. Few experienced mining personnel are available locally, although there is a small mining industry in Northern Ireland (salt and gold), and the Irish Republic has a number of underground base metal mines. There is a large quarrying industry in Northern Ireland. The principal economic activities in the area of the licences are sheep farming and, to a lesser extent, the raising of beef cattle. Belfast is the capital city of Northern Ireland and supports a population of approximately 330,000 inhabitants. From Belfast, Omagh and the project can be reached by paved road, more than half of which is dual carriageway (limited access highway). The over-road distance is approximately 110 km, and requires less than 1.5 hours in good weather. A domestic and an international airport serve Belfast, together offering frequent daily flights to the rest of the UK, Europe and United States. Belfast Port is Northern Ireland's principal maritime gateway and logistics hub, serving the Northern Ireland economy and increasingly that of the Republic of Ireland. Around 70% of Northern Ireland's and 20% of the entire island's seabourne trade is handled at the Port each year. The village of Gortin is located a few kilometres from the Curraghinalt project at the western edge of licence DG1 (Figure 5.1). Dalradian Gold has a field office there, as well as storage facilities, all of which are rented. Gortin is centrally located within the licence areas and well situated to support the exploration program. Dalradian also leases an office and core storage facility in Omagh near the road leading to Gortin. Geology and administration staff are located there, as well as the principal core logging and storage facility. The village of Greencastle and the hamlet of Rouskey lie east of Gortin along the Crockanboy Road. A principal power substation is located at Plumbridge, approximately 22 km north of Omagh, and the main 110 kV power line runs just outside Omagh. Local water resources are abundant.

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Figure 5.1: Northern Ireland Property Licence Map, Major Road Access

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Figure 5.2: General View of the Curraghinalt Deposit Area Looking East

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6 History

6.1 Acquisition History The property containing the Curraghinalt deposit was initially acquired by Ulster Base Metals (which later became Ulster Minerals) in 1981, an entity which later became a wholly-owned subsidiary of Ennex International plc (Ennex). Ennex conducted exploration on the property between 1982 and 1999. Ennex sold its interest in Ulster Minerals to Nickelodeon in January 2000. In August 2000, the name of Nickelodeon was changed to Strongbow Resources Inc., and subsequently to Strongbow Exploration Inc. (Strongbow). In February 2003, Tournigan Gold Corp (Tournigan) entered into an option agreement with Strongbow to earn an interest of up to 100% in the Curraghinalt deposit, located within a prospecting licence known as UM-11/96. Terms included staged exploration expenditures of C$4.0M over a period of seven years, the delivery of a bankable Feasibility Study, and issuing shares to Strongbow at a price based on a 90-day trading average. At the same time, Tournigan entered into a similar option agreement with Strongbow for its Tyrone project, located within prospecting licence UM-12/96. Tournigan established Dalradian Gold as a wholly-owned subsidiary through which it would earn its interests in the Curraghinalt (UM-11/96) and Tyrone (UM-12/96) properties. In the following year (February 2004), Tournigan entered into a letter agreement with Strongbow for the outright purchase by Tournigan of all of the issued and outstanding shares of Ulster Minerals through the issue of five million shares of Tournigan. The earlier option agreements were terminated and replaced by the letter of agreement. A NSR of 2% held by Ennex was transferred to Minco plc. Full transfer of ownership in Ulster Minerals to Tournigan was completed in December 2004. Tournigan then applied to the licensing authorities, and received licences TG-3 and TG-4 (for both minerals and precious metals), to the northwest of UM-11/96 and UM-12/96. Ulster Minerals licences UM-11/96 and UM-12/96 were later renamed UM-1 and UM-2, and ultimately DG1 and DG2. During the renaming and re-registering process, the internal boundary between DG1 and DG2 was reoriented from east-west to a position that reflects the approximate location of the Omagh Thrust Fault (see geological descriptions in Section 7 and Figure 7 2). Details of the current licences and option agreements are provided in Section 4. In October 2009, Dalradian completed a purchase and sale agreement with Tournigan to acquire all of the issued and outstanding shares of Dalradian Gold, which included the licences, mineral rights, and surface rights (including easements) in the Area of Interest. The Area of Interest is defined in the agreement as Mineral Prospecting Licences DG1, DG2, TG-3, and TG-4; the latter two being renamed to DG3 and DG4 by DETI after acquisition (refer to Section 4). In June 2016, mineral Prospecting Licences DG5 and DG6 were granted to Dalradian Gold by the Department for the Economy (DfE), formerly the Department for Enterprise, Trade, and Investment (DETI).

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6.2 Exploration History Gold was recognized in the gravels of the Moyola River to the east of the property in 1652, and in the 1930s, an English company reported plans for alluvial gold mining in a prospectus. Documented exploration in the area dates back to the early 1970s, when companies such as AMAX Exploration of the UK, Consolidated Goldfields, Selection Trust, and Riofinex completed grassroots exploration campaigns over the areas covered by DG1, DG2, DG3, and DG4. Following the 1975 report titled “The Geology and Metalliferous Mineral Potential of the Sperrin Mountains Area” by the Geological Survey of Northern Ireland (GSNI), the ground covered by the licences comprising the property received renewed interest by a number of companies. Licence DG1 has been the focus of most of the historical exploration on the property, as outlined in Table 6.1

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Table 6.1: Historical Exploration of DG1

Company Year Work Completed Area AMAX Exploration of UK Inc. 1971–1972 Soil sampling Glencar Explorations Ltd. 1977–1978 Soil sampling, panning Detailed prospecting, 1983–1987 Ennex geochemistry, geophysics Curraghinalt 1983–1987 68 trenches (2,856 m) 63 diamond drill holes (6,387 1983–1987 m) Stream and soil sampling, DE5 Licence: included Dungannon 1983–1984 panning, and geological Golan Burn mapping Detailed soil sampling, mapping prospecting DE5 Licence: included Dungannon/Celtic Gold 1985 Percussion overburden Garvagh, Slievebeg drilling (Pionjar)–107 sites; RC Drilling – 50 holes Detailed soil sampling, DE5 Licence mapping Prospecting VLF surveys; RC drill holes – Dungannon/Celtic Gold 1986–1987 Garvagh 19 holes Diamond drill holes – 55 Garvagh holes August 1987– Underground development Ennex Curraghinalt March 1989 program (797 m) May 1995– 59 diamond drill holes (4,980 Ennex Curraghinalt March 1996 m) June 1996– 50 diamond drill infill holes Ennex Curraghinalt June 1997 (5,400 m) Due diligence underground Nickelodeon 2000 channel samples 226 mobile metal ions(MMI) Strongbow 2000–2003 Glenlark geochemistry samples Ground IP geophysical Strongbow 2000–2003 Glenlark survey Strongbow 2000–2003 Trench T10 Glenlark 22,910 soil samples, geophysical survey, DG1 Tournigan 2003–2007 prospecting 26 diamond drill holes (4,391 Curraghinalt m) 7 drill holes Glenlark Tournigan 2007–2009 Resource Estimate (2007) Curraghinalt 4 deep diamond drill holes Curraghinalt Source: Dalradian (2016)

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The four phases of exploration at Curraghinalt, conducted by Ennex between 1983 and 1997, are summarized as follows: Phase 1 (1983 to July 1987):  Detailed prospecting, geochemistry, and geophysics; and  68 trenches (2,856 m) and 63 diamond drill holes (6,387 m).

Phase 2 (August 1987 to March 1989):  Underground development program, including development of an adit (412 m), lateral drifting (325 m), and raising (60 m);and  Lateral development using a Dosco SL 120 road header.

Phase 3 (May 1995 to March 1996):  Detailed and reconnaissance drilling to test previously inadequately drilled veins; and  Reconnaissance drilling of veins to the southwest of previously-drilled areas (total 59 holes (4,980 m)).

Phase 4 (June 1996 to May 1997):  Infill drilling on 25 m to 30 m centres in the main vein areas (drilling of 50 holes (5,400 m)).

Between 1997, when Ennex transferred its interest to Nickelodeon, and late 2002, when the agreement was signed between Strongbow and Tournigan, little work was done at Curraghinalt. The Tournigan exploration at Curraghinalt can be broken into several phases. Phase 1, 2003 to January 2005:  22,910 soil samples collected;  Small geophysical survey conducted;  Mapping and prospecting on the DG1 Licence area;  26 diamond drill holes (4,391 m) drilled at Curraghinalt;  Seven diamond drill holes drilled at Glenlark.

Phase 2, January 2005 to 2007:  Two diamond drill holes drilled in the area of the Crows Foot-Bend; and  24 diamond holes drilled (infill drilling) on the Southeast Extension target.

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Phase 3, 2007 to 2009:  Resource estimate completed by Micon (November 29, 2007);  Four deep diamond drills holes completed. After completion of the 2007 drill program, Tournigan ceased all exploration activity at the Curraghinalt deposit; except for some prospecting on TG 3 and TG-4 in 2008, the property remained inactive until its acquisition by Dalradian in 2009.

Exploration programs on the ground currently covered by Licence DG2 initially targeted base metals; later both gold and base metals were sought. Historical exploration on DG2 is summarized in Table 6.2. Table 6.2: Historical Exploration of DG2

Company Year Type of Work Consolidated Gold Fields 1970 Soil, stream and prospecting surveys Stream surveys, soil surveys, IP and EM Selection Trust Exploration 1971–1972 surveys, trenching Rio Tinto Finance & Exploration 1972 Soil and stream surveys (Riofinex) Rio Tinto Finance & Exploration Soil and stream surveys, magnetic and IP 1973 (Riofinex) surveys, panning, trenching Rio Tinto Finance & Exploration Magnetic, IP, prospecting, drilling, pits, soil 1974 (Riofinex) reconnaissance, and follow-up surveys Glencar Explorations Ltd 1977–1978 Panning, soil surveys Ulster Base Metals Limited 1982 Prospecting, VLF survey VLF and magnetic survey, soil and deep Ulster Base Metals Limited 1983 overburden surveys, prospecting Ulster Base Metals Limited 1984 Prospecting Prospecting, deep overburden surveys, Ulster Base Metals Limited 1985 magnetic, IP and VLF surveys Drilling, prospecting, deep overburden survey, IP Ennex International Plc 1986 and magnetic surveys, panning Trenching, drilling, prospecting, deep overburden Ennex International Plc 1987 surveys, IP, VLF and magnetic surveys Deep overburden surveys, magnetic and IP Ennex International Plc 1988 surveys Ennex International Plc 1989 IP and VLF surveys, prospecting Ennex International Plc 1997 Deep overburden surveys Strongbow Resources 2001 Soil (MMI) at Crosh Tournigan Gold Corporation 2004 Prospecting Source: Dalradian (2016)

The principal target of interest for Ennex on DG2 was the Cashel Rock showing, where a gold mineralized silicified rhyolite breccia outcrop is exposed at surface. At this location, 15 shallow drill holes targeted the zone just below surface. The results and example sections were presented in Hennessey and Mukhopadhyay (2010). They are not relevant to the Mineral Resource estimate for the Curraghinalt deposit presented in this report, and are not repeated here.

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Licences DG 3 and DG4 have also been the subject of regional scale exploration programs (Table 6.3 and Table 6.4); however, there has not been follow-up drilling of any targets on these licences. Table 6.3: Historical Exploration of DG3

Company Name Year Work Completed AMAX Exploration of UK, Inc. 1971–1972 Soil surveys Glencar Exploration Ltd. 1974 Stream surveys Glencar Exploration Ltd. 1975 Soil and stream surveys Glencar Exploration Ltd. 1977–1978 Soil surveys and panning Ulster Base Metals Ltd. 1982 Prospecting Ulster Base Metals Ltd. 1982–1983 Panning Soil, stream, and deep Dungannon Explorations Ltd. 1983 overburden surveys, panning Dungannon Explorations Ltd. 1984 Deep overburden surveys Deep overburden and VLF Ulster Base Metals Ltd. 1985 surveys, panning, prospecting Dungannon Explorations Ltd. 1985 Deep overburden surveys Ennex International Plc. 1986 Prospecting and panning Soil and deep overburden Dungannon Explorations Ltd. 1986 surveys, prospecting, panning IP, VLF and deep overburden Ennex International Plc. 1987 surveys, prospecting Dungannon Explorations Ltd. 1987 Stream and soil surveys Soil and deep overburden Celtic Gold Plc. 1987 surveys, prospecting, panning Deep overburden surveys, Ennex International Plc. 1988 prospecting Deep overburden, stream, and Celtic Gold Plc. 1988 soil surveys, trenching, prospecting, panning Ennex International Plc. 1989 Magnetic surveys, prospecting Celtic Gold Plc. 1989 Stream Deep overburden surveys, Celtic Gold Plc. 1996 prospecting Stream surveys, panning, Brancote Mining Ltd. 1997 prospecting Billiton UK Resources 1997 Magnetic survey Ennex International Plc. 1997 Deep overburden survey Magnetic, IP, Stream, deep Brancote Mining Ltd. 1998 overburden and soil surveys, prospecting, panning Magnetic surveys, Brancote Mining Ltd. 1999 prospecting, panning Tournigan Gold Corporation 2004 Prospecting Source: Dalradian (2016)

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Table 6.4: Historical Exploration of DG4

Company Name Year Work Completed Glencar Explorations Ltd. 1977–1978 Soil surveys, panning Rio Tinto Finance & Exploration (Riofinex) 1982 Stream surveys, panning Deep overburden, soil and Dungannon Exploration Ltd. 1983 stream surveys, panning Rio Tinto Finance & Exploration (Riofinex) 1983 Stream surveys, panning Dungannon Exploration Ltd. 1984 Deep overburden surveys Dungannon Exploration Ltd. 1985 Soil surveys Deep overburden surveys, Ulster Base Metals Ltd. 1985 panning, prospecting Dungannon Exploration Ltd. 1985 Deep overburden surveys Deep overburden surveys, Ennex International Plc. International Plc. 1986 soils, panning, and prospecting Ennex International Plc. 1987 Prospecting Deep overburden and VLF Ennex International Plc. 1988 surveys, panning, prospecting Stream and soil surveys, Celtic Gold Plc. 1988 panning, prospecting Magnetic surveys and Ennex International Plc. 1989 prospecting Celtic Gold Plc. 1989 Stream surveys Ennex International Plc. 1995 Soil surveys Stream and soil surveys, Brancote Mining Ltd. 1997 panning, prospecting Biliton UK Resources 1997 Magnetic surveys Ennex International Plc. 1997 Deep overburden surveys Stream, soil, and magnetic Brancote Mining Ltd. 1998 surveys, panning, prospecting Tournigan Gold Corporation 2004 Soil surveys, prospecting Source: Dalradian (2016)

Licences DG5 and DG6 have also been the subject of regional scale exploration programs (Table 6.5 and Table 6.6) with minimal follow-up drilling.

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Table 6.5: Historical Exploration DG5

Company Year Work Completed Ulster Base Metals 1985 52 Panning locations Ulster Base Metals 1986 Panning Dungannon Exploration Ltd 1987 186 Recon Soil samples Ennex 1988 5 Prospecting samples Ennex 1989 15 Prospecting samples 483 Soil samples, 65 Prospecting samples, 222 Panning Brancote 1997 locations, 219 Stream samples, VLF survey Billiton UK Resources 1997 Airborne Magnetic and Radiometric surveys

Panning, 655 Soil samples, 77 Prospecting samples, 46 Deep Brancote 1998 Overburden samples, VLF and IP surveys, three Diamond Drillholes (379m total)

Table 6.6: Historical Exploration DG6

Company Year Work Completed Selection Trust Exploration Ltd. 1971 Stream Sampling Ennex 1984 2 Prospecting samples Ulster Base Metals 1985 89 Deep Overburden Samples (Recon), 15 Panning locations Ennex 1986 82 Panning locations Dungannon Explorations LTD 1987 11 Soil samples Ennex 1988 1 Deep Overburden sample, 85 Panning Ennex 1989 4 Prospecting samples Brancote 5 Panning, five Stream samples 1997 Billiton UK Resources Airborne Magnetic and Radiometrics Brancote 1998 19 Prospecting samples, 67 Panning, 63 Stream samples,

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6.3 Historical Mineral Resource Estimates In May 1997, a polygonal resource estimate was prepared on behalf of Ennex by CSA Group (CSA, 1997). The estimate was prepared on a minimum mining width of 1.25 m and at a cut-off grade of 6 g/t Au. It is an historical estimate and is provided for information purposes only. It predates and is not compliant with NI 43-101, and should not be relied on. Tully prepared a Mineral Resource estimate in 2005 (Tully, 2005); Micon completed a Mineral Resource estimate on the Curraghinalt deposit for Tournigan in 2007 (Mukhopadhyay, 2007), and again in 2010 for Dalradian (Hennessey and Mukhopadhyay, 2010). The 2005, 2007, and 2010 estimates were NI 43-101-compliant, and are considered to be historical estimates under the current version of the instrument (June 30, 2011). The 2005, 2007, and 2010 estimates can be found on SEDAR (www.sedar.com), filed under Tournigan and Dalradian. Micon also completed a Mineral Resource estimate in 2011 (Hennessey et al., 2012a) upon which Micon prepared a PEA (Hennessey et al., 2012b), followed by and PEA in 2014 (Maunula et al, 2014) and an updated 2016 Mineral Resource estimate (SRK, 2016).

6.4 Historical Production There is no evidence of any historical mineral production from the property. There is no record that the mineralized material removed by Ennex during bulk sampling in 1987 was ever processed.

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7 Geological Setting and Mineralization

7.1 Regional Geology The bedrock geology of Northern Ireland is a complex assemblage of units deposited from the Mesoproterozoic to the Paleogene (British Geological Survey, 2016). It can be divided into four quadrants (Figure 7.1):  Northwest - composed predominantly of the Proterozoic Dalradian Supergroup and the early Ordovician Tyrone Igneous Complex;  Southeast - composed mainly of rocks of the Southern Uplands-Down-Longford terrane, an allochthonous prism composed of an Ordovician and Silurian turbidite sequence;  Southwest - underlain mainly by Upper Palaeozoic sedimentary rock deposited in continental to marine environments; and  Northeast - underlain by the early Palaeogene (60 – 55 Ma), subaerial Antrim Lava Group and minor underlying Paleozoic units.

The local geology of the project area comprises three main rock groups:  Dalradian metasediments in the Grampian terrane to the north of the Omagh Thrust;  The Tyrone Igneous Complex in the Midland Valley terrane south of the Omagh Thrust; and  Upper Palaeozoic sedimentary rocks which are widely distributed throughout these terranes.

Mitchell (2004) described the tectonic evolution of Northern Ireland from which the following is summarized. The Caledonian orogenic belt of the British and Irish Caledonides resulted from the progressive closure of the Iapetus Ocean and Tornquist Sea during the early Palaeozoic. Assembly and docking of the terranes that form the basement in Northern Ireland commenced in mid- Ordovician time and continued for 80 Ma through the Silurian and finished in the Early Devonian. Final closure was accommodated by sinistral strike-slip movement on terrane bounding faults. Northern Ireland covers three of the seven suspect terranes that together constitute the Caledonian Orogen in Ireland. From north to south, these are referred to as the Central Highlands (Grampian) Terrane, Midland Valley Terrane, and the Southern Uplands-Down-Longford Terrane. Dalradian’s Northern Ireland property straddles two of these terranes: the Central Highlands to the north (DG1, DG3, DG4, DG5, and DG6) and the Midland Valley to the south (DG2). The Central Highland Terrane consists of Moinian (Mesoproterozoic) and Dalradian (Neoproterozoic-Cambrian) rocks and Caledonian igneous intrusions. The Dalradian Supergroup that hosts the Curraghinalt gold deposits comprises Neoproterozoic metasediment and mafic meta-igneous rocks which were deposited on the Laurentia passive continental margin between ca. 800 – 500 Ma (Strachan et al., 2002; Cooper and Johnston, 2004).

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Dalradian sedimentation was terminated by an arc-continent collision during the Ordovician Grampian event of the Caledonian Orogeny (Hollis et al., 2012), followed by polyphase deformation and regional metamorphism at ca. 475 – 465 Ma (Friedrich et al., 1999). Figure 7.1: Regional Geology of Northern Ireland

Source: British Geological Survey DiGMapGB (1:625K).

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The southern margin of the terrane is marked by the concealed Fair Head-Clew Bay Line, which is interpreted as the southwesterly extension or major splay of the Highland Boundary Fault in Scotland. This forms a major terrane bounding structure. The associated regional magnetic lineament that extends southwestwards to Clew Bay in County Galway is located 10 km north of the Variscan (Carboniferous) northwest dipping Omagh Thrust Fault. The Omagh Thrust Fault is part of the Fair Head – Clew Bay Line, and separates Dalradian rocks to the north from the underlying Ordovician Tyrone Igneous Complex to the south (Cooper and Mitchell, 2004) (Figure 7.2). The Midland Valley Terrane in Northern Ireland comprises Upper Paleozoic, Mesozoic and Paleogene rocks. However, in County Tyrone, a late Ordovician to early Silurian succession is exposed with part of an early Ordovician ophiolite and island arc volcanic complex (Tyrone Igneous Complex) at its base. The Tyrone Igneous Complex is comprised of the Tyrone Plutonic Group and the Tyrone Volcanic Group (Cooper and Mitchell, 2004). The Tyrone Plutonic Group forms the upper part of a ca. 484 – 480 Ma suprasubduction zone ophiolite. It was accreted with the ca. 475 – 469 Ma Tyrone Volcanic Group island arc onto an outboard micro-continental block prior to the ca. 470 Ma Grampian event of the Caledonian Orogeny (Cooper et al., 2008, 2011; Hollis et al., 2012, 2014). At the core of the Tyrone Igneous Complex is the fault bounded Central Inlier. This consists of psammitic and semipelitic paragneiss known as the Corvanaghan Formation (Cooper and Johnston, 2004) of Moinian affinity. This formation originally formed part of the Central Highlands Terrane, and was metamorphosed and deformed prior to ca. 468 Ma (Chew et al., 2008). It represents part of an outboard segment of Laurentia, possibly detached as a microcontinent prior to arc continental collision (Chew et al., 2008).

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Figure 7.2: Regional Geology of the Southern Sperrin Mountains

Source: From Rice et al. (2016).

The Grampian orogeny resulted in crustal thickening (folding - D1), nappe structures (recumbent southeast-facing folds - D2), and peak metamorphism (development of crenulation cleavage - D3) (Cooper and Johnston, 2004). Orogenic collapse was followed by exhumation, extension and partial melting at ca. 470 – 450 Ma (Alsop and Hutton, 1993; Flowerdew et al., 2000; Clift et al., 2004). The mid-Silurian Scandian event of the Caledonian Orogeny saw the final closure of the Iapetus Ocean. This was recorded in Northern Ireland with magmatism and further deformation (Kirkland et al., 2013). Peak metamorphism of the Grampian orogeny coincided with the southeast-directed emplacement of the Dalradian Supergroup over the Tyrone Igneous Complex along the Omagh Thrust Fault (Figure 7.2 and Figure 7.3). This event overlapped with the intrusion of arc-related plutons into the Tyrone Volcanic Group at ca. 470 – 464 Ma (Cooper et al., 2008 and 2011; Hollis et al., 2012 and 2014). Orogenic collapse was coeval with the development of regional scale extensional shearing and accompanied by northeast trending quartz veins (Alsop and Hutton, 1993), that coincide with the earliest phase of gold mineralization at Curraghinalt.

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Figure 7.3: Section across the Sperrin Nappe and Omagh Thrust Fault

Source: From Rice et al. (2016)

7.2 Property Geology 7.2.1 Dalradian Supergroup – Licences DG1, DG2, DG3, DG4, DG5 and DG6 Licences DG1, DG3, DG4, DG5, and DG6 are underlain by Neoproterozoic aged rocks of the Dalradian Supergroup that form the Sperrin Mountains (Figure 7.4). The Dalradian Supergroup is divided into the Argyll Group and Southern Highland Group, both comprised of predominantly clastic marine sedimentary rocks deposited in a rift basin. The oldest rocks on the property belong to the Newtownstewart Formation (Argyll Group), which is exposed in the core of the recumbent Sperrin Fold and is flanked by Dungiven Limestone Formation (Table 7.1) in DG3 and DG4. The Southern Highland Group is interpreted to flank the Argyll Group on both limbs of the Sperrin Fold although the stratigraphy differs markedly between the north and south limbs. Mitchell (2004) notes that “an absence of distinctive marker horizons allied to lateral facies changes makes correlation difficult between formations and results in the different nomenclature north and south of the fold axis.” The Southern Highland Group comprises a thick sequence of turbiditic arenite and pelitic metasedimentary rocks with rare volcaniclastic (green bed) and calcareous schist units (Figure 7.4). Progressing southeastward onto DG1, the Southern Highland Group is exposed and is divided from northwest to southeast into the Dart, Glenelly, Glengawna and Mullaghcarn formations.

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The mineralized quartz-carbonate veins of the Curraghinalt deposit are hosted by the Mullaghcarn Formation. Table 7.1: Stratigraphy of the Dalradian Supergroup

Group Formation Lithology Mullaghcarn Semi-pelite, psammite, pelite Black graphitic pelites, psammite, semi- Glengawna pelite Southern Highland Volcaniclastic semi-pelite, semi-pelite, Glenelly psammite Schistose amphibolite, feldspathic and Dart calcareous semi-pelite Limestone, pelite, semi-pelite, Dungiven psammite, quartzite, basaltic pillow Argyll lavas, volcaniclastic sediments Quartzose psammite and thin pelite Newtownstewart interbeds

7.2.1.1 Dart Formation At the base of the Dart Formation, in contact with the underlying Dungiven Limestone Formation is the Glenga Amphibolite Member, which is interpreted as a resedimented volcaniclastic siltstone and sandstone. The remainder of the formation consists of conglomerate, psammite, schistose semi- pelite, and a volcaniclastic member. 7.2.1.2 Glenelly Formation The Glenelly Formation comprises silvery to greenish-grey schistose pelite and semi-pelite with minor psammite and limestone. Plagioclase porphyroblasts are ubiquitous in the rocks of this formation with more localized occurrences of small euhedral garnet and randomly distributed needles of tourmaline. Also present is a volcaniclastic member, and a limestone and calcareous semi-pelite member.

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Figure 7.4: Property Geology

Source: Modified from British Geological Survey DiGMapGB (1:625K) and Geological Survey of Northern Ireland (1:10K)

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7.2.1.3 Mullaghcarn Formation The Mullaghcarn Formation is host to the Curraghinalt gold deposits and the Alwories prospect, and consists predominantly of semi-pelites and psammites with subordinate pelite horizons and chloritic semi-pelites. Although not subdivided on the GSNI maps because of lack of outcrop (Figure 7.4), a variation in magnetic intensity is apparent in the regional Tellus geophysical data suggesting internal variations are present. The southern boundary of the Dalradian Supergroup is marked by the Omagh Thrust Fault (Figure 7.4), a moderately northwest dipping thrust fault active as late as the Carboniferous. 7.2.1.4 Deformation and Metamorphism of the Dalradian Supergroup The following is summarized from Mitchell (2004). At least four phases of deformation are recognized in Dalradian rocks on the property:  D1 - Weakly preserved as barely discernible folds and cleavage;  D2 - Dominant deformation of the Grampian Orogeny associated with the formation of major regional southeast-facing recumbent anticlines including the Sperrin Fold;  D3 - Southeast-directed deformation in the south Sperrin mountains resulted in minor southeasterly-verging folds and low angle, north northwest dipping thrust faults such as the Omagh Thrust Fault which transposed Dalradian rocks to the south southeast over the early Ordovician Tyrone Igneous Complex; and  Post-D3 - Late deformation associated with localized sets of kink bands and late stage brittle fractures.

The Dalradian Supergroup in Northern Ireland preserves a thermal and pressure gradient increasing from lower greenschist facies in the north to lower amphibolite facies in the south, close to the Omagh Thrust Fault. 7.2.2 Tyrone Igneous Complex – Licence DG2 The following is taken from Hollis (2012). “Licence DG2 is largely covered by the Tyrone Igneous Complex, which is exposed over approximately 350 square kilometres, within the Midland Valley Terrane and is one of the largest areas of ophiolitic and arc-related rocks exposed along the northern margin of Iapetus within the British and Irish Caledonides. It is broadly divisible into the ophiolitic Tyrone Plutonic Group and the younger arc-related Tyrone Volcanic Group. The northwestern edge of the Tyrone Igneous Complex is bounded by the Omagh Thrust Fault, which has emplaced Neoproterozoic Dalradian Supergroup metasedimentary rocks above the Tyrone Volcanic Group. Within the central regions of the complex (to the southeast of DG2), the structurally underlying metamorphic basement (Tyrone Central Inlier) is exposed. A suite of granitic to tonalitic plutons (ca 470 to 464 Ma) intrudes the Tyrone Igneous Complex and Tyrone Central Inlier (Cooper et al., 2011).”

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“The Tyrone Plutonic Group is interpreted to represent the uppermost portion of a dismembered suprasubduction zone ophiolite and is characterized by layered, isotropic and pegmatitic gabbros, sheeted diabase dikes and the occurrence of rare pillow lavas (Cooper et al., 2011 and references therein). Layered olivine gabbro has provided a uranium-lead zircon age of 479.6 ± 1.1 Ma (Cooper et al., 2011). Accretion to the Tyrone Central Inlier must have occurred prior to the intrusion of a 470.3 Ma ± 1.9 Ma tonalite, which contains inherited Proterozoic zircons and roof pendants of ophiolitic material (Cooper et al., 2011).” “The Tyrone Volcanic Group forms the upper part of the Tyrone Igneous Complex and comprises mafic to intermediate pillowed and sheeted lavas, tuffs, rhyolite, banded chert, ferruginous jasperoid (ironstone) and argillaceous sedimentary rocks (Mitchell, 2004). The Tyrone Volcanic Group (473 Ma ± 0.8 Ma, Cooper et al., 2008) is interpreted to have formed within a peri-Laurentian island arc/back-arc, which was accreted to the Tyrone Central Inlier following emplacement of the Tyrone Plutonic Group (Draut et al., 2009; Cooper et al., 2011).” Hollis et al., (2012) have revised the stratigraphy of the Tyrone Volcanic Group based on mapping and geophysics (Figure 7.5) and the following is summarized from that work. The lower part of the Tyrone Volcanic Group is restricted to south of the Beaghmore Fault (southwestern and eastern blocks) and is dominated by basaltic to andesitic lavas and volcaniclastic rocks, with subsidiary agglomerate, layered chert, ferruginous jasperoid (ironstone), finely laminated argillaceous sedimentary rocks, and rare rhyolite breccia, deformed into the northeast trending upright Copney anticline. All units in the lower Tyrone Volcanic Group have been subjected to varying degrees of hydrothermal alteration and are characterized by regional sub-greenschist- to greenschist facies metamorphic assemblages. Abundant sills of undeformed quartz ± feldspar porphyritic dacite cut all stratigraphic levels of the Tyrone Volcanic Group.

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Figure 7.5: Tyrone Igneous Complex Geology

Source: After Hollis et al., 2012

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North of the Beaghmore Fault, the Greencastle and Broughderg formations of the upper Tyrone Volcanic Group are exposed as a conformable sequence dipping between 35 and 60° to the northwest. Dalradian metasedimentary rocks overlie the succession along its western edge, separated by the low angle Omagh Thrust Fault, which dips around 30° to the northwest (Alsop and Hutton, 1993). The crosscutting nature of the Omagh Thrust Fault provides a relatively complete section through the upper part of the Tyrone Volcanic Group, which has been metamorphosed to chlorite-grade greenschist facies. Further south, sub-greenschist facies metamorphic assemblages are preserved around Formil. Hydrothermal alteration and associated zinc-lead-copper (gold) mineralization are widespread within the Greencastle and Broughderg formations. Mineralization is characterized by pyrite-sphalerite–galena and chalcopyrite in locally silicified, sericitic and/or chloritic tuff/rhyolite (Clifford et al., 1992). Between Racolpa and Broughderg, bodies of tonalite and sills of quartz ± feldspar porphyry intrude both formations. The Greencastle Formation is a relatively thick succession dominated by chloritic, locally sericitized and siliceous quartzo-feldspathic crystal tuff, flow-banded and brecciated rhyolite, rhyolitic lapilli tuff, lesser diorite, rare arkosic sandstone, and localized occurrences of hornblende-phyric tuff. The overlying Broughderg Formation is a diverse succession of intermediate to felsic crystal and lesser lapilli tuff/schist, rhyolite (e.g., around Crosh), vesicular basalt, argillaceous sedimentary rocks, layered chert, and black ironstone (silica- magnetite) with bedded pyrite. A late suite of I-type, calc-alkalic, tonalitic to granitic plutons intrude the Tyrone Igneous Complex and Tyrone Central Inlier (Draut et al., 2004). Recent uranium-lead zircon geochronology indicates these were intruded between c. 470 and 464 Ma (Cooper et al., 2011). A gently northwest dipping cleavage intensifies northwards in the volcanics towards the Omagh Thrust Fault, and is correlated with the S3 fabric in the Dalradian Supergroup. The Laght Hill Tonalite has variable relationships with the fabric in the volcanics—early stage tonalite porphyry bodies are deformed by it, but the main body itself cuts the fabric and contains xenoliths that contain the fabric. This suggests that magmatic activity outlasted the overthrusting of the volcanics by the Dalradian (Hollis, 2012). Hollis et al., (2014) suggest the Tyrone Igneous Complex of Northern Ireland represents a possible broad correlative of the Buchans-Robert’s Arm Belt of Newfoundland, host to some of the most metal rich volcanogenic massive sulphide deposits globally. Stratigraphic horizons prospective for volcanogenic massive sulphide mineralization in the Tyrone Igneous Complex are associated with rift-related magmatism, hydrothermal alteration, synvolcanic faults, and high level subvolcanic intrusions (gabbro, diorite, and/or tonalite). Locally intense hydrothermal alteration is characterized by sodium-depletion, elevated silica, magnesium oxide, barium/strontium, bismuth, antimony, chlorite-carbonate-pyrite alteration index (CCPI). On the property, stratigraphic horizons favourable for volcanogenic massive sulphide mineralization occur in the Greencastle Formation and in the Broughderg Formation, all of which contain occurrences of base and precious metal mineralization (Hollis et al., 2014). 7.2.3 Carboniferous Two Carboniferous basins are present within the licence area: the Omagh Basin comprises the Omagh Sandstone Group to south and the Newtownstewart Outlier comprises the Owenkillew Sandstone Group to the north (Figure 7.4). There are also two Carboniferous groups, the Roe Valley Group and the Tyrone Group, that lie in the north, within the boundary of DG6.

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7.2.3.1 Omagh Sandstone Group The Omagh Sandstone Group rests unconformably on Dalradian rocks. The basal unit is up to 100 metres thick and is composed of non-fossiliferous red sandstone with calcrete nodules, and quartz pebble conglomerates (Mitchell, 2004). Much of the remaining sequence is dominated by channel sandstone and siltstone that contain Courceyan to early Chadian miospores. However, thin algal limestones with evaporite replacement textures occur locally. Some of the limestones contain rare brachiopods. The exact thickness of this group is difficult to estimate based on the amount of uplift, folding, and erosion that has taken place (Mitchell, 2004). 7.2.3.2 Owenkillew Sandstone Group The Owenkillew Sandstone Group also rests unconformably on the Dalradian rocks and comprises approximately 1,500 m of predominantly non-marine strata present within a half graben. Rock types include greenish-grey and purplish-red sandstone and siltstone, with thin beds of algal laminated limestone (Mitchell, 2004). Mudstones containing miospores have indicated an early Chadian age. The group is thought to have formed in an inter-cratonic basin with current indicators suggesting the sediment source is to the north (Mitchell, 2004). 7.2.3.3 Roe Valley Group The Roe Valley Group consists of two formations, the Spincha Burn and Barony Glen Formations, which lies unconformably over the Dalradian metasediments. The Spincha Burn Formation comprises a 25 m to 100 m thick succession of conglomerate beds with clasts consisting solely of vein quartz and green psammites. Interbedded sandstone beds are very coarse and unfossiliferous. The Barony Glen Formation is 150 m to 200 m thick. Its lower sections are dominated by calcrete, mudstones and siltstones with some palaeosols. This lower section has been interpreted as pedogenic and lacustrine deposits. In its upper sections thin limestones and grey mudstones become dominant, marking a transition to a marginal marine environment. Miospores, Schopfites claviger and Auroraspora macra place this formation within the Courceyan. (Mitchell, 2004). 7.2.3.4 Tyrone Group The Tyrone Group is comprised of two formations, the Iniscarn Formation which is overlain by the Altagoan Formations. After a disconformity, the Iniscarn Formation has a 400 m thick succession of purplish to brown conglomerates and breccias. The lower half of the Iniscarn Formation is a conglomerate with large rounded clasts up to 2 m long in a coarse matrix, while the upper half transitions into poorly sorted, angular feldspathic breccias. The Altagoan Formation is comprised of the Drumard and Mormeal members. The lower Drumard member is a 300 m thick package of unfossiliferous, fining upwards series of purple brown sandstones, siltstones and mudstones. The overlying 250 m thick Mormeal member consists of mudstone and channelized sandstones. It also includes five narrow evaporite beds that contain calcite pseudomorphs of halite and gypsum (Mitchell, 2004).

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7.3 Mineralization 7.3.1 The Curraghinalt Gold Deposit High grade gold mineralization occurs as a series of west-northwest trending, moderately to steeply dipping, subparallel stacked veins and arrays of narrow extension veinlets. These veins are hosted by the Neoproterozoic Dalradian rocks in the central section of the Sperrin Mountains, and represent the largest known gold deposit in the United Kingdom. The Mineral Resource model discussed herein focusses on a set of 16 prominent gold-bearing quartz veins that occur mainly within psammites, semi-pelites, and pelites of the Dalradian Argyll Group, within the Mullaghcarn Formation. Auriferous quartz veins exist between the main modelled veins, but their continuity is difficult to demonstrate at the current drill spacing. The quartz vein system was investigated by core drilling and is partly exposed in underground workings. Surface exposures of the vein system are limited to the Curraghinalt and Attagh Burns (creeks), as well as a variety of surface trenching excavations completed in 2003 and in the late 1980’s. The veins range from a few centimetres to over 3 m wide. The modelled veins extend 1,300 m along strike, but the vein system is traceable along strike for at least 1,950 m with similar strike aligned veins occurring over approximately 4 km from Alworries in the east to Scotchtown in the west. The veins have been traced from surface to a depth of approximately 1,200 m. The vein system remains open along strike and at depth. On average, the quartz veins dip between 55° and 75° to the north. The modelled veins are listed in Table 7.2 and shown in Figure 7.6. In 2007, Dave Coller, PGeo, EurGeol, prepared an initial review of the geological setting of the Curraghinalt vein system. Coller (2007) recognized that the west-northwest trending vein system comprises multiple veins and vein branches (Table 7.3). Table 7.2: List of Modelled Quartz Veins

Domain Number* Vein Name Domain 1 No.1 Domain 2 106-16 Domain 3 V75 Domain 4 Bend Domain 5 Crow Domain 6 T17 Domain 7 Mullan Domain 8 Sheep Dip Domain 9 Road Domain 11 Slap Shot (East, West) Domain 12 V55 Domain 13 Sperrin (East, West) Domain 14 Causeway Domain 15 Grizzly (East, West and Mid) Domain 16 Slap Shot Splay Domain 17 Bend Splay * Domain 10 is not used, as such there are 16 modelled veins

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Figure 7.6: Modelled Quartz Veins

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Table 7.3: Definitions for Geometry of the Vein System

Type Characteristic Representation Comments Series of veins which probably Previously defined as all link in 3D, with one main single veins, several Envelope encompassing all the Vein complex vein or several en-echelon vein zones and linked vein branches high grade veins and many branches are potentially branches economic In detail, internal vein segments and Large single or closely spaced Width of zone containing veins associated veinlets have Vein zone branching veins regarded as a defined as one vein with average separate Au assays but single vein grade as on drill sections would be mined as a single vein Larger branches often Veins branch connections high grade and may be Vein branch between veins zones within a Separate veins in drill sections mined by linkage to vein complex [sic] main vein zone Could be defined as Major veins that may link or Separate significant vein zones separate vein Other veins occur between vein not named complexes with more complexes drilling

In 2012, Miron Berezowski, recognized two main vein sets:  Shear (D) veins - west-northwest trending, steeply dipping  Extensional (C) veinlets - arrays of narrow extension veinlets

Single or multiple D veins form vein zones while vein complexes are anchored by a vein zone and are flanked by C-vein arrays. The D or shear veins are thought to be hosted in west-northwest trending shear zones dipping moderately to steeply to the northeast and with good strike continuity. D veins are often laminated and include slivers of wall rock, evidence of incremental development. Additionally, D veins are commonly brecciated. The C veinlets are southeast trending, steeply dipping extension veins which are oriented obliquely to the D veins. They show evidence of open space filling, are never brecciated, and do not have sheared margins. The vein system is cut by two east-west, steeply north-dipping, 4 to 7 m wide ductile shear zones: the Crowsfoot shear and the Kiln Shear. The Kiln Shear also shows evidence of brittle reactivation as indicated by the presence of gouge zones along the contact between the highly strained ductile rocks within the shear zone and the Dalradian metasedimentary wallrocks. The Kiln Shear clearly disrupts and displaces the vein zones (D veins) with observed oblique dextral-normal kinematics. Vein zones are entrained within the Kiln Shear and previous workers (Boland, 1997) have suggested that the shears have controlled vein emplacement or at least served to produce wider mineralized segments.

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The vein swarm has been traced along strike for approximately 1,950 m, across strike for approximately 800 m and down dip for over 1,000 m by prospecting, trenching, and drilling. Sixteen modelled veins are included in the current resource estimate. Of these veins, some are less continuous and form eastern and western portions. These include Slap Shot (East and West), Sperrin (East and West) and Grizzly (East, West and Mid). Vein splays have also been identified, including Slap Shot Splay and Bend Splay. Petrographic work by Clarke (2004) has documented that the gold mineralization at Curraghinalt occurs in quartz-pyrite-carbonate veins and is associated with variable abundances of carbonate, chalcopyrite, and tennantite-tetrahedrite. Gold is commonly in the form of native gold and more rarely as electrum (>20 weight percent silver), and occurs primarily along fractures in pyrite, as inclusions in pyrite, and at pyrite grain contacts with carbonate and quartz. Most native gold grains are associated paragenetically with carbonate, chalcopyrite, tennantite-tetrahedrite, and telluride minerals infilling fractures in pyrite. The seven veins studied at the time have similar mineralogy. Native gold was observed in samples from all veins and grains range in size from 2 µm to 150 µm. 7.3.2 Tyrone Volcanic Group The Tyrone Volcanic Group hosts a number of other gold and gold-plus base metal prospects. Hollis et al., (2014) have identified stratigraphic horizons associated with rift-related magmatism, hydrothermal alteration, synvolcanic faults, and high level subvolcanic intrusions, which are prospective for volcanogenic massive sulphide mineralization. Hollis et al., (2014) suggest that the Tyrone Volcanic Group is broadly correlative with the Buchans-Robert’s Arm Belt of Newfoundland, which is host to numerous volcanogenic massive sulphide deposits.

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8 Deposit Types

Dalradian’s Northern Ireland property has potential to host two distinct deposit types. Licences DG1, DG3, DG4, DG5, and DG6 which includes the Curraghinalt gold deposits, has potential to host orogenic gold deposits. Licence DG2, underlain by the Tyrone Igneous Complex, has potential to host volcanic massive sulphide mineralization, as well as porphyry copper-gold, and iron-gold exhalites (Hollis et al. 2014, Hollis et al. 2015, British Geological Survey, 2016).

8.1 Orogenic Gold Deposits Rice et al. (2016) noted that the timing of gold mineralization at Curraghinalt (ca. 462.7 – 452.8 Ma) closely followed peak metamorphism associated with the Grampian event of the Caledonian Orogeny. It is temporally linked with an extensional setting following orogenic uplift and collapse. Rice et al. (2016) concluded that Curraghinalt is more likely an orogenic (rather than intrusion related) gold deposit. Thus an orogenic gold deposit model best describes the Curraghinalt vein system (Figure 8.1). Figure 8.1: Orogenic Gold Deposit Model

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Source: After Goldfarb, 2005

Commonly referred to as mesothermal gold deposits in the past, these orogenic ores were formed during compressional to transpressional deformation processes at convergent plate margins in accretionary and collisional orogens. In both types of orogen, hydrated marine sedimentary and volcanic rocks have been added to continental margins during tens to some 100 million years of collision. Subduction-related thermal events, episodically raising geothermal gradients within the hydrated accretionary sequences, initiate and drive long-distance hydrothermal fluid migration. The resulting gold-bearing quartz veins were emplaced over a unique depth range for hydrothermal ore deposits, with gold deposition from 15 to 20 km to the near surface environment. On the basis of their depth of formation, the orogenic deposits are best subdivided into epizonal (<6 km), mesozonal (6 to 12 km) and hypozonal (>12 km) classes (Groves at al., 1998). The following has been summarized from Tomkins (2013b). Orogenic gold deposits dominantly form in metamorphic rocks in the mid- to shallow crust (5 – 15 kilometres depth), at or above the brittle-ductile transition, in compressional settings that facilitate transfer of hot gold-bearing fluids from deeper levels (Goldfarb et al., 2005; Groves et al., 1998; Phillips and Powell, 2009). The term orogenic is used because these deposits likely form in accretionary and collisional orogens (Groves et al., 1998). There are two plausible sources for the gold: (1) metamorphic rocks, from which fluids are generated as temperatures increase; and (2) felsic-intermediate magmas, which release fluids as they crystallize. Gold-bearing magmatic- hydrothermal deposits are enriched in many elements, including sulphur, copper, molybdenum, antimony, bismuth, tungsten, lead, zinc, tellurium, mercury, arsenic, and silver (e.g., Goldfarb et al., 2005; Richards, 2009). Such deposits have been referred to as gold-plus deposits (e.g., Phillips, 2013), but most orogenic gold deposits fall into the alternative group of gold-only deposits. These are characterized by elevated sulphur and arsenic, and have only minor enrichments in the other elements. The vast majority of orogenic gold occurred in three periods in geologic time: the Neoarchean (ca. 2700-2400 Ma), the Paleoproterozoic (ca. 2100-1800 Ma), and a third period from ca. 650 Ma continuing throughout the Phanerozoic (Goldfarb et al., 2001). World-class gold deposits are generally 2 to 10 km long, approximately 1 km wide, and are mined down dip to depths of 2 to 3 km. Most orogenic gold deposits contain 2% to 5% sulphide minerals and have gold/silver ratios from 5 to 10. Arsenopyrite and pyrite are the dominant sulphide minerals, whereas pyrrhotite is more important in higher temperature ores and base metals are not highly anomalous.

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8.2 Volcanic Massive Sulphide Deposit Model The volcanic stratigraphy of the Tyrone underlying licence DG2 is a potential host to volcanic massive sulphide deposits. Volcanogenic massive sulphide deposits are syngenetic, stratabound, and in part stratiform accumulations of massive to semi-massive sulphide that form seafloor hydrothermal systems at or near the seafloor (Gibson et al., 2007; Galley et al., 2007). The deposits consist of two parts: a concordant massive sulphide lens (>60 percent sulphide minerals), and discordant vein-type sulphide mineralization, commonly called the stringer or stockwork zone, located within an envelope of altered footwall volcanic and or sedimentary rocks (Gibson et al., 2007). Recently, volcanogenic massive sulphide deposits have been classified by host lithologies that define a distinctive time-stratigraphic event (Barrie and Hannington, 1999; Franklin et al., 2005). These five different groups are:  Bimodal-mafic dominated volcanic – Cu rich;  Mafic back-arc (ophiolite associated) – Cu rich;  Pelitic mafic back-arc;  Bimodal felsic-dominated volcanic – Zn rich; and  Siliciclastic – felsic.

The order of the lithologic groups above reflects a change from the most primitive volcanogenic massive sulphide environments, represented by ophiolite settings, through oceanic-rifted arc, evolved rifted arcs, continental back-arc, to sedimented back-arc. Hollis et al. (2014) have identified the Lower Tyrone Volcanic Group as having formed in a bimodal-mafic arc to back-arc, and the Upper Tyrone Volcanic Group as having characteristics of the bimodal felsic model (Figure 8.2). Gold-rich volcanogenic massive sulphide deposits are viewed as a subtype where the gold content exceeds the associated combined copper, lead, and zinc grades.

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Figure 8.2: Volcanogenic Massive Sulphide Deposit Model

Source: Galley et al., 2007

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9 Exploration

Information for the time frame 2010 to 2014 has been extracted largely from the previous technical report (Micon, 2014). Since 2010, Dalradian has drilled 347 boreholes (102,691 m) on the Curraghinalt gold deposit, and 32 boreholes (9,042 m) on other regional targets. In addition, airborne and ground geophysical surveys, prospecting, mapping, and geochemical surveys have been completed. Drilling is discussed in Section 10.

9.1 Exploration 2010 – 2011 In 2011, Dalradian commissioned Patterson, Grant and Watson Limited (PGW) of Toronto, Ontario to reprocess available geophysical data acquired previously during the government funded Tellus South-West survey (Figure 9.1). All available historical ground induced polarization, magnetic, very low frequency electromagnetic, and resistivity data were also reprocessed over the four licence areas. Based on this work, 23 exploration targets within the four licences were identified. Dalradian evaluated these targets based on published geology and a more detailed data compilation. Following this initial work, Dalradian carried out prospecting work on all four licences in the first and second quarters of 2011. A total of 929 samples were collected, 143 of which yielded assays results greater than 0.25 gram gold per tonne (g/t gold). A summary of the samples is provided in Table 9.1. The locations of the prospecting samples are shown in Figure 9.2. After the initial prospecting campaign, Dalradian integrated and evaluated existing exploration data and newly acquired information, and selected 19 of the initial 23 exploration targets for detailed exploration work, including core drilling. The targets can be split into two distinct groups: those within the Tyrone Volcanic Group on licence DG2, and those within the Dalradian Supergroup in licence areas DG1, DG3, DG4, DG5, and DG6. The Tyrone Volcanic Group is an environment favourable for the formation of volcanogenic massive sulphide deposits and contains an abundance of float with volcanogenic massive sulphide-style mineralization. Gold and base metal mineralization is most prevalent within the upper part of the volcanic sequence. Historical prospecting results include siliceous tuffs yielding 16.1% (percent) lead and 1.5 g/t gold, as well as chloritic tuffs yielding 8.8% zinc, 1.2% lead, and 1.7 g/t gold.

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Figure 9.1: Geophysical Surveys and Exploration Targets on the Northern Ireland Property

Table 9.1: Summary of 2011 Prospecting Samples

Total No. of No. of Outcrop No. of Float Gold Value No of Samples Licence Area Samples Samples Samples Range (g/t) > 0.25 g/t Au DG1 316 139 177 0.01 – 44.96 88 DG2 270 144 126 0.01 – 5.48 31 DG3 184 86 98 0.01 – 14.08 22 DG4 159 97 62 0.01 – 2.07 2 Source:

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Figure 9.2: Exploration Sampling by Dalradian on the Northern Ireland Property

A summary of exploration targets is shown in Table 9.2 and Table 9.3 for targets in the Tyrone Volcanic Group and the Dalradian Supergroup, respectively. Following target identification, Dalradian started a regional scout drilling program. Two boreholes were completed at target Broughderg, and one borehole was completed at target Tullybrick. However, no significant mineralization was intersected in any of these boreholes and in late 2011, Dalradian suspended the scout drilling program in order to gather additional geological information to better define drilling targets.

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Table 9.2: Exploration Targets within the Tyrone Volcanic Group

Target Significant Historical Target Name Area Sample Type Geology Defined By Samples Drilling Historical drilling, Auriferous trenching, chert- magnetic high, magnetite 750 m 1.5 m at 2 shallow Broughderg Au soil Trench horizon. x 350 m 4.36 g/t Au boreholes geochemistry, Interpreted to mineralized be exhalative outcrop and unit float EM, Au and Zn– 1.63 g/t Au Pb–Cu soil Outcrop of and 4.3 2.9 km geochemistry, altered tuffs in 15 shallow Cashel Bridge percent Prospecting x 1.9 km mineralized poorly boreholes Cu+Pb+Zn outcrop and exposed area from outcrop float Rhyolite– Au soil tonalite contact 5.48 g/t Au 750 m geochemistry with abundant Mulnafye from quartz Prospecting None x 500 m and mineralized angular quartz float float float with visible gold Rhyolite Historical drilling breccia with and trenching, Historical gold and base EM, Au soil shallow 350 m metals. 15 shallow Cashel Rock geochemistry, borehole: Borehole x 300 m Airborne boreholes and mineralized 3.63 m at geophysics outcrop and 30.12 g/t Au shows new EM float anomalies EM, IP, magnetic Mineralized geophysics, Zn– Historical ironstone 4.5 km Cu soil Prospecting: Bonnety Bush Prospecting overlying None x 700 m geochemistry, 4.54 g/t Au in altered tuffs and mineralized ironstone and basalts outcrop and float Auriferous EM, Au soil 2.19 g/t Au rhyolite geochemistry, and 2.99 3.5 km breccias and Crosh and mineralized percent Prospecting None x 2.2 km tuffs with outcrop and Cu+Pb+Zn galena and float from outcrop sphalerite EM and IP, Zn– Cu soil Historical Altered 1.2 km geochemistry, Prospecting: volcanic tuffs Tullybrick Prospecting None x 1 km and mineralized 1.87 g/t Au in with quartz outcrop and float veins float

Source: Dalradian (2016)

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Table 9.3: Exploration Targets within the Dalradian Supergroup

Target Target Significant Sample Historical Area Geology Name Defined By Samples Type Drilling Trench: 9.5 m at 5.64 percent Zn+Pb Historical Metasediment- EM, IP, and prospecting: hosted quartz vein 7 km mineralized 141.2 g/t Au Trench and and stratiform 12 shallow Glenlark x 600 m outcrop from float Prospecting gold and base boreholes and float Recent metal prospecting: mineralization 33.94 g/t Au from float Au soil Graphitic pelite- geochemist hosted breccia 2 km ry, 10.52 g/t Au Scotch Town Prospecting zone up to 50 m None x 50 m mineralized from float. wide and 2 km subcrop long and float Quartz float, 200 44.96 g/t Au and East 1.8 km Mineralized m east of drilled 32.80 g/t Au Prospecting None Curraghinalt x 375 m float mineralization at from float Curraghinalt Au soil geochemist Quartz vein, 2 km 1.5 km ry, Channel: 0.88 m Alwories Channel east along strike None x 700 m mineralized @ 39.43 g/t Au from Curraghinalt outcrop and float Historical Historical Quartz vein 4.5 drilling, 1 km shallow km west along 44 shallow Golan Burn mineralized Borehole x 600 m borehole: 0.6 m strike from boreholes outcrop at 61.43 g/t Au Curraghinalt and float 22.4 g/t Au from Au soil quartz float 3.36 geochemist Wide range of North 7.5 km g/t Au from ry and Prospecting float styles in river None Curraghinalt x 600 m silicified mineralized valley metasediment float float Au soil geochemist 2.5 km 11.68 g/t Au Quartz float in Fallagh ry and Prospecting None x 650 m from float river valley mineralized float 14.08 g/t Au Au soil from quartz float geochemist Float train of with pyrite. 8.18 2.3 km ry, silicified Gortin Glen g/t Au from Prospecting None x 1.7 km mineralized metasediments silicified outcrop and quartz veins metasediment and float float Au soil Silicified quartzite 2 km geochemist 2.96 g/t Au from with Bessy Bell Prospecting None x 1.5 km ry, outcrop disseminated and mineralized fracture fill pyrite

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Target Target Significant Sample Historical Area Geology Name Defined By Samples Type Drilling outcrop and float Au soil 1.63 g/t Au from Rylagh/ 2.3 km geochemist graphitic pelite Silicified graphitic ry, outcrop 3 shallow Prospecting pelite and quartz mineralized 1.88 g/t Au from boreholes veins Glengawna x 0.9 km outcrop outcropping and float quartz vein 4 km Au soil geochemist Quartz breccias ry, 2.35 g/t Au from Coneyglen Prospecting with pyrite in None mineralized float x 1 km metasediments outcrop and float 2 km Au soil geochemist ry, 2.07 g/t Au from Quartz vein with Glenerin Prospecting None x 1 km mineralized outcrop pyrite outcrop and float Dart Formation 2 km Panned 80 g/t Au in Yes, for a and Killeter Crockdooish Concentrat panned Prospecting base metal Quartzite x 1.6 km e concentrates anomaly Formation 1.4 km Mineralized 26 g/t Au in Possible outcrop, outcrop, >10 g/t mineralized shear Meeny Hill Prospecting, None x 1.2 km panned Au in panned zone in Dart concentrate concentrates Formation 1.8 km 5.7 g/t Au in float Prospectin 187.8 g/t Au, Samples in Dart g, Panned Formation and Feeny 59.07 g/t Au, Prospecting None x 1.5 km Concentrat 29.56 g/t Au in Barony Glen e panned Formation concentrates Source: SRK (2016)

9.2 Exploration 2012 – 2013 In April 2012, Dalradian commissioned Geotech Ltd. (Geotech) of Aurora, Canada to carry out a helicopter-borne versatile time domain electromagnetic and magnetic survey. The survey consisted of 1,009 survey line-kilometres in three separate survey blocks approximately 20 km northeast, 17 km northeast, and 14 km northeast of Omagh (Figure 9.1). Survey lines in the northernmost survey block were flown in a northwest to southeast direction with survey lines spaced 100 m apart. Three tie lines were flown perpendicular to the principal survey direction at a line spacing of 1000 m. The central survey block, which covers approximately 10 km along the Curraghinalt trend, was flown at a 50-metre line spacing in a north-easterly direction (30°) with perpendicular tie lines flown at a 500-metre line spacing. The survey lines in the south block were flown in a north-south direction with a line spacing of 100 m; tie lines were flown perpendicular with a spacing of 1,000 m. Terrain clearances were 43 and 69 m for the electromagnetic and magnetic sensors, respectively.

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The airborne survey was unable to detect conductive horizons caused by the sulphide bearing veins that host the gold mineralization at Curraghinalt. However, the conductivity, apparent resistivity, and magnetic signatures were able to resolve stratigraphic subdivisions and contacts. In addition to the airborne geophysical survey, Dalradian initiated a detailed soil geochemistry survey on licence DG1 to extend the existing geochemistry grid (Figure 9.3). A gold-in-soil anomaly was interpreted in the Alwories area (Anomaly A on Figure 9.3), and was followed up with drilling in the summer of 2012. Figure 9.3: 2012 Curraghinalt East Soil Survey Area

Source : Dalradian (2016)

A second soil survey was initiated in the Fallagh area in late 2012 (Figure 9.3). Based on encouraging gold-in-soil results, Dalradian completed trench 13-FA-T01. Although bedrock mineralization was not intersected, a sample of quartz-carbonate vein in the till within the trench yielded 14.65 g/t gold; a float sample discovered near the trench returned 91.5 g/t gold. Prospecting was carried out concurrently with the soil survey on licence DG1, and as a separate campaign on the other three licences. On DG1, 185 samples were collected, with 63 of them yielding results above 1 g/t gold. On licence DG3, a total of 313 bedrock and float samples were collected, and a total of 30 samples returned results in excess of 0.5 g/t gold.

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The most anomalous results were returned from the known prospects of Bessy Bell, Pollan Burn/Gortin Glen, and Rylagh/Erganagh. On DG4, a total of 168 bedrock and float samples were collected, but only three samples returned results in excess of 0.5 g/t gold. In the Glenlark area, 52 panned concentrate samples were collected, following-up on three boreholes completed in the area.

9.3 Exploration 2014 – 2016 Between January 1, 2014 and November 30, 2016, Dalradian continued to explore across the entire tenement, but focused most work on the Curraghinalt deposit area. Table 9.4 summarizes the exploration work completed in this time frame. The location of prospecting, soil, and stream samples are shown in Figure 9.1. Several outcropping veins exposed over 3 to 4 m on licence DG3 were sampled during prospecting at Rylagh. One sub-horizontal vein returned a result of 139.5 g/t gold and follow-up duplicate samples returned assays of 168.0 g/t gold and 42.4 g/t gold from selective grab samples. A program of deep overburden sampling was completed in early 2016, yielding a multi-element anomaly adjacent to outcropping veins in a stream section. Table 9.4: Summary of Exploration Work by Dalradian between 2014 and 2016

Licence Area Work Completed Area 77 prospecting samples Various 107 soil samples Omagh Thrust Fault Transect, Glenerin 31 stream sediment samples Various Fallagh, Six Towns, Omagh Thrust Fault DG1 571 deep overburden samples Transect Underground face samples Curraghinalt Core drilling Curraghinalt & Alwories Underground development program Curraghinalt 19 prospecting samples Various 944 soil samples Formil & Mulnafye DG2 7 stream sediment samples Various 396 deep overburden samples Crosh & Formil 201 prospecting samples Various Bready, Bessy Bell, Dears Leap, Learden, 938 soil samples DG3 Newtownstewart 210 stream sediment samples Various 430 deep overburden samples Rylagh 57 prospecting samples Various Knockbane Mtn, Umrycam Hill, Balix, Goles, 911 soil samples Glensass DG4 117 stream sediment samples Various 139 deep overburden samples Glensass 75 prospecting samples Various 95 stream sediment samples Various DG5 18 prospecting samples Various DG6 102 stream sediment samples Various

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9.3.1 Underground Development Program As of January 13, 2017, Dalradian completed approximately 989 m of underground development, increasing the total development on the project to 1,785 m with the Ennex tunneling work completed in the 1980s, including drifts, cross-cuts, raises, drilling chambers, and safety bays. The development work was conducted largely via single-boom vein-runner jumbo drill, and via jackleg stoper for the raising. An existing 1.8-metre wide and 59-metre long inclined borehole was converted to an exhaust raise and fitted with an Alimak conveyance that served as a secondary egress and means of conveying materials. At the top of the borehole a 30kW fan was installed, as were several small buildings for the storage of blasting materials. In addition to new development, Dalradian completed the mapping of all remaining historical underground workings at either 1:250-scale or 1:500-scale, with emphasis on structural geology, vein characterization and morphology, alteration, and lithology. New development was mapped at 1:250-scale or 1:100-scale on advance during production. Subsequent detailed back-mapping along vein drives was undertaken after their completion and return of assays. Dalradian sampled 230 faces for a total of 878 face samples between August 2, 2015 to July 6, 2016. As of October 31, 2016, there are a total of 1,297 channel samples. Sludge samples of percussion boreholes were also taken in several localities underground, totalling 70 samples and 1,224 samples of blasted rock (muck samples) were also taken as of November 8, 2016.

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10 Drilling

Historical drilling on the Northern Ireland property dates back to the 1970s and was carried out in a number of campaigns until 2008. Most of the historical drilling was at the Curraghinalt deposit, including a number of underground boreholes completed while the Ennex adit was being excavated (Figure 10.1). Celtic Gold completed some drilling at the Golan Burn prospect. The remainder of the historical drilling targeted other prospects on areas of current licences DG1 and DG2. Core size for surface boreholes at Curraghinalt was generally HQ (63.5 mm) and BQ (36.4 mm). Occasionally HQ-sized boreholes were reduced to NQ (47.6 mm) at depth. Most of the core from former operators is stored at Dalradian’s core facility in Omagh, Northern Ireland, including the Celtic Gold core from Golan Burn. Dalradian completed significant additional core drilling from 2010 to 2016.

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Figure 10.1: Distribution of Core Boreholes at the Curraghinalt Deposit

Source : SRK (2016)

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10.1 Drilling by Riofinex (1970’s) From 1973 to 1974, Riofinex Ltd. completed seven boreholes (920 m) on a base metal target in the Cashel Rock area in current licence area DG2. None of the boreholes intersected significant mineralization. No information exists regarding the drilling procedures or the sampling methods and approaches employed by Riofinex.

10.2 Drilling by Celtic Gold (1987) Celtic Gold completed 55 core boreholes (3,717 m) on the Golan Burn prospect that straddles the licence boundary between current licences DG1 and DG3. An additional 69 short, reverse circulation boreholes are mentioned by Micon (2014) but could not be verified by SRK. Salient results from the core drilling include: 6.84 g/t gold in borehole DG-14, 9.3 g/t gold over 0.4 m in borehole DG-18, and 61.4 g/t gold over 0.6 m in borehole DG-41. These boreholes were drilled outside the Curraghinalt gold deposit area. No information exists regarding the drilling procedures or the sampling methods and approaches employed by Celtic Gold.

10.3 Drilling by Ennex (1984 – 1999) Ennex in a joint venture with Ulster Base Metals completed two drilling programs at Curraghinalt. The first phase, between 1985 and 1989, included surface and underground core boreholes. The second phase, between 1995 and 1997, consisted of surface core boreholes. In total, Ennex completed 187 core boreholes (17,991 m) from surface and 26 core boreholes (659 m) from underground. Ennex completed eight core boreholes (441 m) in the Glenlark area in licence DG1 north of the Curraghinalt deposit area. Notable intersections from borehole DDH 90-200 include 2.09 g/t gold and 3.7 g/t silver over 1.93 m, as well as 8.19 g/t gold, 14.8 g/t silver. And 1.11% lead plus zinc over 0.75 m (CSA, 1987) In addition, Ennex completed 21 core boreholes (1,348 m) in the Cashel Rock area on the DG2 licence. A small number of thick very low anomalous gold zones were intersected (up to 145 m grading 0.4 g/t gold), with some shorter, higher grade core length intervals, including 4.3 g/t gold over 5.45 m, 1.3 g/t gold over 6.9 m, and 30.6 g/t gold over 3.63 m. In addition, Ennex completed 14 reconnaissance core boreholes in the Tyrone Volcanic Group rocks, including four at each Formil (324 m) and Cashel Bridge (249 m), six at Aghascrebagh-Crouck (442 m), and six other (258 m). Drilling procedures used by Ennex remain undocumented. After completion of boreholes, collars were cemented. During the 1980s, collar surveys were conducted by measuring the distance from a known baseline. Collars of boreholes completed in the 1990s were surveyed using a total station and/or GPS receivers. Surveys were conducted by John Barnett and Associates Ltd. and Land Survey Services in the 1980s and 1990s, respectively.

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10.3.1 Underground Sampling by Ennex (1987 - 1989) During the original development of the Curraghinalt adit from 1987 to 1989, Ennex completed an underground sampling program, including back, face, wall, and muck samples along the length of the Sheep Dip, T17, and No.1 drifts. The current database contains 310 historical Ennex underground channels (485 m) for a total of 910 samples. Individual sample lengths varies between 4 cm and 1.52 m, with an average length of 0.52 m. Face samples were taken daily, or very regularly, and have accompanying face maps that show rough sketches of vein and mineralization position, along with indications of structure and lithology. The maps are not to scale, and they lack structure measurements and channel location on the face. Back channel samples were taken along the back of the Sheep Dip, T17, and No.1 drifts. Back sampling was done after face and muck sampling, in between existing channels to achieve a maximum distance of 1 m between channels. Wall samples were taken in place of back samples, where the ground was less competent, or where the main vein was present only along the wall. A series of muck samples were also taken during drift development, with one muck sample taken per eight trams of rock mucked from each heading. Information about channel sampling can be found plotted on historical maps, as well as documented in monthly reports and on individual face map sheets for the No.1, T17, and Sheep Dip drifts. Channel sample information was digitally compiled in 1999 in Techbase software, along with all other historical assay information. Techbase exports were used initially to populate the main database at the time. Historical underground sampling was reviewed and verified in 2014 by Dalradian staff.

10.4 Drilling by Nickelodeon (1999) Nickelodeon did not complete any drilling on the project area, but carried out additional sampling on existing core. No information exists regarding the sampling methods and approaches employed by Nickelodeon for sampling of historical core.

10.5 Drilling by Tournigan (2003 – 2008) Tournigan completed 59 core boreholes (12,565 m) between 2003 and 2008. Tournigan contracted Irish Drilling Limited (Irish Drilling) based in Loughrea, County Galway to perform all drilling on the project. Drilling equipment consisted of Boyles Brothers 37, mounted on a Go-Tract 1000. The majority of the drilling was carried out using HQ-size equipment. NQ-sized equipment was used in difficult drilling situations where HQ-sized casing was required. Each drill site was located with a GPS receiver, staked, and then photographed prior to moving the drill rig onto the site. Down-hole surveys were completed on all boreholes using an Encore Reflexit smart multi-shot tool instrument at the bottom of the borehole and every 6 m to the casing. Tully (2005) reports that a Tropari survey instrument was used for the first four boreholes in the Tournigan program.

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On completion of a borehole, Celtic Surveys Ltd. surveyed the collar using the Irish National Grid to the nearest centimetre. All sites were cleared on completion and re-photographed. Core was delivered daily from the drill site to the core shed by Irish Drilling and placed sequentially on trestles. A geologist checked all the core markers, measuring between them to identify any lost core and potential tag errors. Core was orientated and logged on 1:100 purpose-designed logging sheets. Logging information included lithologies, structure, alteration, rock quality data (RQD), mineralization, and any other observations deemed important. Core recovery varied from 90 to 97% except in pelitic units and fault zones. Based on recommendation made by Micon in the summer of 2007, Tournigan started to photograph vein intersections as part of the routine logging procedures. Once core was logged, vein material was sampled. According to Tully (2005), all quartz vein material within known vein systems was sampled. Vein material with high sulphide or breccia content was usually sampled separately. Sample lengths varied from 0.25 to 0.5 m in primary veins, and 5 to 15 cm in undefined smaller adjacent veins. In addition to vein material, Tournigan took additional samples from wall rock adjacent to sampled vein material.

10.6 Drilling by Dalradian (2010 – 2016) Since acquiring the project in 2010, Dalradian has completed 347 core boreholes (102,691 m) from surface and underground stations in the Curraghinalt deposit area (Figure 10.1). In addition, Dalradian completed 32 core boreholes (9,042 m) on regional targets elsewhere on the property (Table 10.1). Drilling was carried out by Irish Drilling until 2012, when Dalradian commissioned Major Drilling Group International Inc. (Major) to perform drilling tasks. In October 2015, Dalradian signed an additional contract for drilling operations with Mason & St John Ltd. (Mason). In December 2015, two more drills were mobilized to site by Priority Drilling. Underground drilling was completed in January 2016, and the surface drilling was completed in February 2016. A short underground drilling program was completed between March and April 2016 for stope definition. Similar to procedures used by Tournigan, surface drilling primarily used HQ-sized equipment. NQ- sized equipment was used where ground conditions required a reduction in core size. Since April 2015, Dalradian has used an ACT 2 tool for oriented core. Starting in October 2015, all surface drilling was completed using triple tube equipment. The vast majority of boreholes are drilled towards the south or the south-southwest in order to intercept the generally north-northeasterly dipping gold mineralized veins.

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Table 10.1: Summary of Drilling at Regional Targets Completed by Dalradian

Target Number of Boreholes Metres Drilled Year Alwories 19 6272.7 2012 and 2015 Broughderg 2 525 2011 Cashel Rock 2 402.5 2011 and 2012 Glenlark 3 651 2012 Glenmacoffer 3 594.1 2013 Scotchtown 2 351.6 2011 and 2012 Tullybrick 1 244.8 2011 Total 32 9,041.7 Source : SRK (2016)

Collar locations were identified using GPS receivers prior to drilling; drills were oriented using a compass. Prior to 2015, all collars were independently surveyed once drilling was completed. Starting in 2015 all collars are surveyed by Dalradian surveyors using a total station. Down-hole surveys were carried out by drill operators during active drilling using a single shot Reflex EZ-Trac instrument. The boreholes were subsequently resurveyed upon completion using a Reflex multi-shot tool with readings taken every 6 m. Underground drilling utilized NQ-size equipment until October 2015, when Dalradian switched to triple tube NQ3 equipment. Front-sight and back-sights were installed by the underground surveyors for reference by drill crews on setup via string line. Borehole specifications were +/- 3° on azimuth and +/- 2° on dip. In cases where a borehole was not within the design parameters, the borehole in question would be re-collared. Completed underground boreholes were labelled by the drillers with a wooden wedge and aluminum tag. Upon completion of drilling at a station, Dalradian underground surveyors surveyed the borehole collar locations and calculated the collar azimuth and dip of the borehole by surveying two prisms mounted in a steel pipe partly inserted into the borehole. Until 2011, core was brought from drill sites to the core logging facility located in Gortin at the end of each day, where core was logged by the geologists and stored in Gortin. In 2011, Dalradian’s core logging and storage facilities moved to Omagh, approximately 15 km from Gortin. Since then, core is securely stored overnight in Gortin before being transported to Omagh where logging and sampling as well as final storage occurs. Underground core is transported directly to the Omagh facilities. Core logging procedures have been updated from time to time to improve certain aspects of the procedures. Logging was carried out by geologists assigned to the project by Aurum until July 2011, and subsequently by Dalradian staff. Tournigan initiated photography of all vein material in August 2007. Presently, Dalradian photographs all core, and the photographic record, along with a digital copy of the striplog and backup of recorded data are stored in a separate file for each borehole. A historical re- photographing program was initiated in conjunction with the historical core evaluation project (HCEP) and remains ongoing, to date three quarters of the historical core has been photographed.

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Until 2012, Dalradian’s sampling approach was as follows. All sulphide bearing quartz vein material intersected by drilling was sampled. A geologist selected core sample intervals with a length between 0.1 and 0.3 m. The 0.3-metre sample length was selected so that an entire sample could be pulverized at the laboratory, eliminating the need to split the crushed sample. Samples in unmineralized wall rock had lengths of up to 1 m. Sample intervals honoured geological contacts, including mineralization styles. Sample intervals were marked on the core as well as on core boxes. Core was sawn lengthwise for sampling. Preprinted sample tags were used; one part of the tag was stapled to the core box, while another was placed with the half-core sample in a numbered sample bag. Brief mineralogical descriptions of individual samples were added to the sample tags. The second half of the sawn core remained in the core box for reference. Sample numbers were verified at the end of a shift and individual sample bags were placed in large, pre-addressed plastic bags for shipment. The large bags were sealed with cable ties. All core was brought from the drills at the end of shift, and was stored in a rented lockable storage facility on the main street of Gortin, across the road from the field office. Until November 2011, core was sawn at a nearby farm, and core boxes with unmineralized core were stored in a concrete- floored barn at that location. Core boxes with mineralized core were returned to the industrial building where they were kept under lock and key. In November 2011, Dalradian leased a new office and core facility in nearby Omagh, where all logging, sampling, and storage took place. The Omagh facility is located in a secure fenced area. The core storage and logging facility is kept locked when unoccupied. Unshipped samples are also stored at this location. In September 2012, Dalradian revised their logging and sampling procedures. Prior to core logging, core was aligned such that the foliation trended from the upper left of the core boxes to the lower right. The core was washed and inspected for out-of-sequence core pieces. At this point, metre blocks added by the drill crew were verified. Every metre was marked on the core to aid in recovery assessment, RQD measurements, and logging. Sampling intervals (From and To) was marked on the core boxes. Sample tags for analytical quality control samples were added to the core boxes to preserve a continuous series of sample numbers. In February 2015, Dalradian revisited the sampling procedures again and made the following changes to account for oriented core. Core was placed in an angle iron and each piece locked together in order to achieve an accurate orientation of the core. An orientation line was drawn along the core with blue crayon to mark the bottom of the borehole, metre marks were drawn on the core, and the core was returned to the core box. The protocols for the selection of sampling intervals also changed:  D veins are sampled with a minimum sample length of 0.25 m and a maximum length of 0.50 m. The sample length was adjusted to correlate with the 0.50-metre composite length used for geology and Mineral Resource modelling;  C veining and sericitic-chloritic altered shear intervals were sampled at intervals from 0.25 to 1.0 m;  Where a vein intersection is expected based on the geological model, but the core shows no veining, structures or alteration will be sampled at 0.5-metre intervals; and

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 A minimum of two samples are taken before and after the selected sample interval, these samples are up to 1.0 m in length.

10.6.1 Underground Core Sampling by Dalradian (2013 – 2016) Underground core was sealed with a lid at the drill rig and boxes were transported out of the adit and placed directly on the core delivery truck each day. Underground muck and chip samples were also placed on the core delivery truck by the geologist. The core truck was parked overnight at the secure local site, and all samples were transported the following morning to the Omagh logging facilities. Logging of core from underground drilling follows the same procedures applied to core from surface drilling. Underground chip and muck samples were labelled, packaged, and shipped similar to core samples. 10.6.2 Sampling of Historical Core In 2013, Dalradian relogged and re-sampled archived core of surface boreholes drilled in the central area of the deposit, 12,061 m were relogged and 12,790 samples were collected. As part of the resampling program, Dalradian also photographed the core. In 2015, Dalradian acquired the core from the boreholes drilled by Celtic Gold. These were transported to Omagh and relogged, verified, and selectively sampled, 292 additional samples were taken.

10.7 Underground Sampling by Dalradian (2013 – 2016) In 2013, Dalradian completed an initial underground channel sampling program. Sampling involved cutting a 4 cm wide channel along the wall of the main tunnel. The majority of the channels were cut on the western wall, except through the cross-cuts of the T17 and No.1 drifts where the channels were cut on the eastern wall. Cutting and sampling was not possible in certain limited zones due to support structures in place. In total, 450 individual samples were collected. Dalradian continued underground sampling in 2015 and 2016. Sampling was carried out in the underground development along veins during advance, across the full width of the face for each round (typically 3 m in horizontal drifting and 1.8 m in raising). After washing the active development face, the geology of the round was described in detail and mapped (at chest height) at 1:250-scale. This mapping served as the basis for the sampling. Distinct geological and alteration zones were sampled separately via panel chip sampling. The locations of samples were measured using a laser rangefinder referencing a surveyed control point. Samples were collected by taking small chips on a regular grid with a rock hammer. Since samples were delineated by geological domains, no strict minimum horizontal thickness applied to the zone of interest. Maximum horizontal sampling width generally did not exceed one metre. The production geologist collected 4 to 5 kg of material per sample from the face, comprising chips of about 3 to 5 cm in diameter. Panel style sampling resulted in a composite of material confined to the sample zone, from approximately two thirds of the height of the face and, in the case of samples from the mineralized zone, in volumetric proportion based on relative abundance of mineralization versus gangue.

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Due to blasting, it was found that sulphide and quartz-carbonate gangue were equally fractured on the face, ensuring that neither material was over-sampled due to the ease or difficulty of collection. Sample collection along raising in the V75 stope block was made in the same way as described above, except that the east and west ribs were both sampled. Samples were placed in labelled bags along with sample tags, and secured with cable ties. The horizontal interval of the sample was recorded in a sample book and added to the database at the end of the day. Other information also recorded included the date and shift, heading and vein name, dimensions of the face and distance from a control point, vein thickness, and dip, estimate of face grade, drift azimuth, and sample descriptions. A digital, georeferenced photo was taken of the cleaned, sampled, painted face as evidence of what was sampled.

10.8 SRK Comments SRK reviewed the core logging and sampling procedures used by Dalradian and, as far as known, by previous operators. In the opinion of SRK, the core logging and sampling procedures used by Dalradian are consistent with generally accepted industry best practices and are, therefore, adequate for an advanced exploration project. Drilling, core logging and sampling procedures followed by previous operators are, in part, difficult to assess; however, after analysis of exploration data, SRK considers that historical data are sufficiently reliable to inform geology and Mineral Resource models.

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11 Sample Preparation, Analyses, and Security

Exploration samples collected by Ennex, Tournigan, and Dalradian since 1984 were submitted to OMAC Laboratories Ltd. (OMAC Labs) in Loughrea, Ireland. Nickelodeon submitted samples to Chemex Labs Limited (Chemex) in Vancouver for sample preparation and analyses. Both facilities are independent, commercial geochemical laboratories that operated independently from the companies. No information exists regarding laboratories used by Riofinex and Celtic Gold. Tournigan used an unspecified laboratory operated by ALS Chemex in Canada for umpire testing of samples from core collected by Ennex. Dalradian used Geolabs Ltd. (Geolabs) in Birmingham, England for geotechnical testing of select samples. Geolabs is accredited to ISO 17025:2005 by the United Kingdom Accreditation Service, issue number 013 for tests used by Dalradian. OMAC Labs was acquired in July 2011 by the ALS group of laboratories, and is currently operating as ALS Loughrea, although OMAC Labs remains the official business name that appears on all assay certificates. ISO 9000 series standards were first published in 1987, and the ISO 17025 standard was first published in 1999 and as such could not have been applied during the early part of the exploration history of this project. Since 2006, OMAC Labs and subsequently ALS Loughrea have been accredited to ISO 17025 for geochemical analyses, including those used by Dalradian. The laboratory is accredited by the Irish National Accreditation Board (INAB), with Registration Number 173T.

11.1 Riofinex (1970s) No information exists about sample preparation procedures, analytical techniques, and sample security employed by Riofinex in the 1970s.

11.2 Celtic Gold (1987) No information exists about sample preparation procedures, analytical techniques, and sample security employed by Celtic Gold in 1987.

11.3 Ennex (1984 – 1999) Sample preparation, analyses and security procedures for core samples taken by Ennex are poorly documented and are therefore difficult to review. SRK understands that samples were assayed for gold using a mix of wet assay methods and fire assay methods. For a large number of samples the assay method is undocumented. Sample sizes comprised 30 and 50 g charges. The preparation techniques are undocumented; assaying techniques are only partly documented. Assay records are preserved on paper logs, and have been digitized by Dalradian.

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11.4 Underground Sampling by Ennex (1987 – 1989) Sample preparation, analyses, and security procedures for underground chip samples taken by Ennex are undocumented. However, SRK considers that underground samples were treated the same way surface core samples were processed.

11.5 Nickelodeon (1999) No information exists regarding sample preparation and analysis, or sample security for samples taken by Nickelodeon.

11.6 Tournigan (2003 – 2008) Sample preparation and analytical procedures are described in Micon (2007). Samples were dried and crushed to less than 2 mm using a jaw crusher. The crushed samples were split using a riffle splitter, and a 1 kg subsample was pulverized to 100 µm. Gold was analyzed using a 50 g sample by fire assay with an atomic absorption spectroscopy finish (Package AU4). Approximately 10% of all samples were subjected to repeat analysis using packages AU5 and AU1 comprising a 30 g subsamples digested in a concentrated aqua regia solution, extracted with methyl isobutyl ketone (MIBK) and analyzed by atomic adsorption spectroscopy. A further 10% of this sample suite was re-analyzed using the same methodology.

11.7 Dalradian (2010 – 2016) Sample preparation and analytical procedures used by Dalradian largely mirror those by Tournigan, with the exception of using almost exclusively 50 g charges for fire assay analyses (OMAC Labs code Au-AA26). Samples grading over 100 g/t gold were re-analyzed with a gravimetric finish (OMAC Labs code Au-GRA22). Gold analyses by fire assay with gravimetric finish were conducted on 50-gram charges to increase accuracy compared to analyses conducted on 30 g charges.

11.8 Specific Gravity Data Specific gravity of various rock types and vein mineralization was measured by Tournigan and Dalradian using a water immersion method. As of March 3, 2016, a total of 2,518 specific gravity measurements were provided to SRK on core intervals, including 668 located within the modelled shear veins. The average specific gravity within the shear veins is 2.8. A bilinear relationship between sulphide content and density exists within the veins. The relationship of sulphur and specific gravity measurements was used to model the specific gravity of the quartz vein domains considered for Mineral Resource evaluation (see Section 14.4 below). The average waste rock density of pelite, semi-pelite, and psammite combined, containing no shear veins is 2.73. Between March 3, 2016 and December 6, 2016, Dalradian obtained an additional 5,810 specific gravity measurements, of which 1,568 are located within the mineralization model.

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11.9 Quality Assurance and Quality Control Programs Quality control measures are typically set in place to ensure the reliability and trustworthiness of the exploration data. These measures include written field procedures and independent verifications of aspects such as drilling, surveying, sampling and assaying, data management, and database integrity. Appropriate documentation of quality control measures and regular analysis of quality control data are important as a safeguard for project data and form the basis for the quality assurance program implemented during exploration. Analytical control measures typically involve internal and external laboratory control measures implemented to monitor the precision and accuracy of the sampling, preparation, and assaying process. They are also important to prevent sample mix-up and to monitor the voluntary or inadvertent contamination of samples. Assaying protocols typically involve regularly duplicating and replicating assays and inserting quality control samples to monitor the reliability of assaying results throughout the sampling and assaying process. Check assaying is normally performed as an additional test of the reliability of assaying results. It generally involves re-assaying a set number of sample rejects and pulps at a secondary umpire laboratory. 11.9.1 Ennex (1984 – 1999) There is no evidence that Ennex used an analytical quality assurance and quality control program. 11.9.2 Nickelodeon (1999) Nickelodeon did not institute an analytical quality assurance and quality control program for its resampling program of historical Ennex core. 11.9.3 Tournigan (2003 – 2008) Tournigan instituted an analytical quality assurance and quality control program for core samples involving the use of blanks and certified reference material samples. Tournigan further relied on pulp duplicate testing carried out as part of the internal laboratory quality control program routinely maintained by OMAC Labs to monitor analytical results on an ongoing basis. Tournigan’s analytical quality control program is described by Micon (2007). Commercial certified reference material (over a range of gold grades) was sourced from CDN Resource Laboratories Ltd. of Langley, BC (CDN-GS-XX) and Rocklabs Limited (Rocklabs) of Auckland, New Zealand. Use of reference material from Rocklabs was limited to two occurrences in the database reviewed by SRK. The specifications of the control samples used by Tournigan are summarized in Table 11.1. According to Micon (2007), blank material was sourced from limestone from the Irish Midlands, near Lisheen. The insertion rate of standard reference material and blank samples was approximately one in 10 samples. According to Micon (2007), results from analytical quality control samples were monitored on an ongoing basis to ensure reliability of analytical results delivered by the primary laboratories used. SRK was unable to determine performance gates implemented by Tournigan that determined when certain assay batches were sent for re-assay based on the performance of analytical quality control samples submitted with the regular assay stream.

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Table 11.1: Summary of Samples Used by Tournigan (2003-2009)

Au SD* Au SD* Control Sample Control Sample (ppm) (ppm) (ppm) (ppm) CDN-GS-11 3.4 0.14 CDN-GS-12 9.98 0.37 CDN-GS-3B 3.47 0.13 CDN-GS-15A 14.83 0.31 CDN-GS-5C 4.74 0.24 CDN-GS-15 15.31 0.29 CDN-GS-5a 5.1 0.14 CDN-GS-20 20.6 0.34 CDN-GS-6P5 6.74 0.23 SH35 1.32 0.04 CDN-GS-14 7.47 0.31 SN38 8.57 0.16 CDN-GS-10A 9.78 0.27 * SD = standard deviation

In addition to analytical quality control procedures implemented on samples collected by Tournigan, Tournigan submitted 43 samples from historical core drilled by Ennex for umpire assaying to OMAC Labs as well as to a laboratory operated by ALS Chemex at an unspecified location in Canada. 11.9.4 Dalradian (2010 – 2016) Dalradian continued to apply the same analytical quality control procedures first introduced by Tournigan. During the first phase of underground channel sampling in 2013, Dalradian used 44 analytical quality control samples (23 blanks and 21 standards). Chip sampling procedures in 2015 were adjusted to mirror the insertion rate of analytical quality control samples to that of core samples. During the first years of operation by Dalradian, the number of reference materials was high. More recently, Dalradian has reduced the number of reference material types to streamline the data analysis. Table 11.2 summarizes the standard reference material used by Dalradian between 2010 and 2016 for its Northern Ireland properties. Blank material continued to be sourced from limestone from the Lisheen area in the Midlands of Ireland. The insertion rate of blank and standard reference material was approximately one in 10 and one in 15, respectively. More recently, the insertion rate has been reduced to one blank or standard in 10.

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Table 11.2: Summary Control Samples Produced by Dalradian (2010-2016)

Low Grade Gold (0-1ppm) Medium Grade Gold (1-5ppm) High Grade Gold (>5 ppm)

Standard Standard Standard ID Expected Value SD* Inserts Expected Value SD* Inserts Expected Value SD* Inserts ID ID

SF67 0.835 0.021 551 SG66 1.086 0.032 345 SL46 5.867 0.17 25 SF57 0.848 0.03 103 SH35 1.323 0.044 24 SL51 5.909 0.136 103 SH41 1.344 0.041 101 SL61 5.931 0.177 572 SH65 1.348 0.028 100 SN38 8.573 0.158 24 SH55 1.375 0.045 96 SN60 8.595 0.223 795 SJ63 2.632 0.055 477 SN50 8.685 0.18 102 SJ53 2.637 0.048 202 CDN-GS-10A 9.78 0.165 1

SJ39 2.641 0.083 28 HiSilP1 12.05 0.368 333 CDN-GS-5C 4.74 0.14 1 SP59 18.12 0.36 588 SP37 18.14 0.38 122 SP49 18.34 0.34 101 SQ36 30.04 0.6 123 SQ48 30.25 0.51 192 Total 654 Total 1,374 Total 3,081

* Standard Deviation

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11.10 SRK Comments SRK reviewed the sample handling and preparation procedures and those used by the independent certified laboratories contracted by Dalradian. In the opinion of SRK, the sampling preparation, security, and analytical procedures used by Dalradian are consistent with generally accepted industry best practices and are, therefore, adequate for an advanced exploration project. Sample handling and preparation procedures followed by previous operators are, in part, difficult to assess. However, after analysis of exploration data, SRK considers that historical data are sufficiently reliable to inform geology and Mineral Resource models, especially considering that exploration data collected by Ennex, Nickelodeon, and Tournigan amount to approximately 6.5 percent of all available exploration data available for the Curraghinalt project.

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12 Data Verification

12.1 Verifications by Ennex It is unclear to SRK if Ennex conducted any verification of exploration data. If such verifications were conducted they are not documented.

12.2 Verifications by Nickelodeon It is unclear to SRK if Nickelodeon conducted any verification of exploration data. If such verifications were conducted they are not documented.

12.3 Verifications by Tournigan Collar elevations were compared to a digital elevation model generated by BKS Surveys from aerial photography. In cases where the collar elevations measured at the borehole collar differed from the elevation of the model survey, the elevation of the borehole was adjusted to match that of the topographic survey. Tournigan implemented a program to track the performance of assay data by inserting standard reference material, blank samples, and field duplicate samples into the general sample stream. However, it is unclear how Tournigan utilized the information from the analytical quality control samples and whether Tournigan had established performance gates to trigger re-assays of certain sample batches that performed outside of those performance gates.

12.4 Verifications by Dalradian For the verification of drilling data, Dalradian relies partly on verification processes built into DataShed and LogChief software used for logging core and storage of data. Possible data errors such as logging interval overlaps, end-of-hole values higher than the length of the borehole, missing information etc., are detected automatically and cause error messages within the program. A manual override of information automatically added to the logging information by the software is possible. As part of the analytical data verification, Dalradian submitted 264 samples to Activation Laboratories Ltd. (Actlabs) in Ancaster, Canada for umpire testing. The samples cover a range of gold values and were assayed by fire assay with a gravimetric finish (Actlabs method code 1A3-50 Au) on 50-gram aliquots. In late 2015, Dalradian commissioned OMAC Labs to investigate the performance of fire assays with atomic absorption finish using 30-gram aliquots versus 50-gram aliquots and the influence of coarse gold on the methods’ performance using a screen fire assay methodology as verification. The study was conducted on 63 samples with a range of gold values from various locations within the deposit area. The results indicate that analyses conducted on 30-gram aliquots show, on average, lower gold values than those analyses conducted on 50-gram aliquots. Results from the latter sample size correlate well with assay results obtained from screen fire assays, suggesting that the occurrence of coarse gold has a direct impact on assay accuracy.

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During the construction of the quartz vein wireframes, any questionable or missing borehole intervals coinciding with interpreted vein intersections were examined using Dalradian’s extensive core photograph library. Some of these missing borehole intervals were due to poor recovery or fault zones. Where possible, any un-assayed intervals were identified, relogged, cut and assayed.

12.5 Verifications by SRK 12.5.1 Site Visits In accordance with NI 43-101 guidelines, several members of the SRK team visited the Curraghinalt deposit to inspect the property, conduct field investigations, and hold discussions with Dalradian site personnel. Dr. Couture visited the project from November 23 to 29, 2014 as part of this initial brainstorm and kick-off meeting focused on SRK work related to the preparation of a Preliminary Feasibility Study. During the site visit, Dr. Couture examined core and underground exposures, and interviewed project personnel. Mr. Hrabi visited the project from November 25 to December 3, 2014 to conduct underground mapping in the accessible parts of the adit, and T17 and No.1 drifts, and examined representative core intervals. The purpose of this work was to study the controls on gold mineralization, the geometry and distribution of the gold mineralized veins, and the characteristics of all fault sets cutting the deposit. Mr. Hrabi conducted a second site visit from November 22 to December 3, 2015. The purpose of this visit was to document and evaluate the quality assurance and quality control processes employed by Dalradian, including visiting the ALS Loughrea laboratory used for most the assay analyses; to conduct additional mapping in the newly developed and rehabilitated underground adit and drifts; and to examine additional oriented core from the 2015-2016 drilling program as the basis for developing a revised three-dimensional fault model for the project. 12.5.2 Database Verifications SRK verified the database provided up to March 2, 2016. SRK conducted a series of routine verification to ensure the reliability of the electronic data provided by Dalradian. These verifications included checking the digital data against original assay certificates, where possible. SRK audited approximately 6 percent, 8 percent, and 5 percent, of data generated by Ennex, Tournigan, and Dalradian, respectively. SRK identified only four entries errors; no issues were identified for data generated by Tournigan or Dalradian. Because a large amount of historical data informs the geology and Mineral Resource model, SRK performed additional verifications and validations of the historical data in order to assess the overall data quality of the exploration database and to assess possible risks associated with potentially poorly documented data. For each distinct time period, SRK assessed:  Number of core boreholes completed;  Total number of metres drilled;  Drilling contractor(s);  Size of the boreholes;  Whether the core is still available and if so where;

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 Survey method for collar and down-hole surveys;  Surveying company;  Availability of other borehole data;  Sampling procedure;  Sample intervals and number of samples taken;  Analytical laboratories and analytical methods used; and  Analytical quality control procedures and documentation.

Historical data, especially those collected by Ennex, are poorly documented and supported by analytical quality control data. Data documentation and support improve with decreasing age of the data, culminating in well documented and supported data collected by Dalradian during the most recent drill program. However, after concluding the data verification of all data and comparing assay data from recent resampling programs with corresponding historical data, SRK concludes that no analytical bias exists between historical and recent assay data. SRK has not verified the updated database since March 2, 2016. 12.5.3 Verifications of Analytical Quality Control Data Dalradian provided SRK with external analytical control data produced between 1984 and March, 2016. The data were produced by Ennex, Nickelodeon, Tournigan, and Dalradian. All data were provided in Microsoft Excel spreadsheets; SRK understands that the information was extracted by Dalradian from the master Maxwell Geoservices Datashed database. SRK aggregated the assay results of the external analytical control samples for further analysis. Where available, standards and blank data were summarized on time series plots to highlight the performance of the control samples. Where available, paired data (preparation, pulp, umpire, and lab internal pulp duplicate assays) were analyzed using bias charts, quantile-quantile, and relative precision plots. The type of analytical quality control data collected by each past and present operator, and their performances are discussed below. 12.5.3.1 Ennex (1984 – 1999) Ennex did not submit analytical quality control samples into the general sample stream. Subsequent resampling of core by Nickelodeon included analytical quality control samples. Samples were chosen randomly by laboratory staff for repeat analysis from additional pulp material. 12.5.3.2 Nickelodeon (1999) Nickelodeon did not carry out drilling or trenching on the Curraghinalt deposit, but carried out resampling of existing core produced by Ennex. The analytical quality control data collected by Nickelodeon comprises 62 samples sent for analysis. SRK was unable to determine whether Nickelodeon submitted core samples, pulp, or coarse reject material to the laboratory.

12.5.3.3 Tournigan (2003 – 2008)

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Tournigan implemented analytical quality control procedures comprising the insertion of standard reference material as well as preparation duplicate samples and pulp duplicate samples into the sample stream. Tournigan did not submit blank samples and did not submit samples to a secondary laboratory for umpire assaying. Approximately 10% of samples analyzed by the laboratory were chosen randomly by laboratory staff for repeat analysis from additional pulp material. A summary of analytical quality control data produced by Tournigan is shown in Table 12.1. Table 12.1: Summary of Analytical Quality Control Data Produced by Tournigan (2003-2008)

Gold Total (%) Comment (g/t) Sample Count 2,442 Blanks 444 18.18 Standards 248 10.16 GS-10A 19 0.78 CDN Resource Laboratories 9.78 GS-11 19 0.78 CDN Resource Laboratories 3.4 GS-12 20 0.82 CDN Resource Laboratories 9.98 GS-14 38 1.56 CDN Resource Laboratories 7.47 GS-15 39 1.6 CDN Resource Laboratories 15.31 GS-15a 10 0.41 CDN Resource Laboratories 14.83 GS-20 40 1.64 CDN Resource Laboratories 20.6 GS-3B 15 0.61 CDN Resource Laboratories 3.47 GS-5A 20 0.82 CDN Resource Laboratories 5.1 GS-5C 19 0.78 CDN Resource Laboratories 4.74 GS-6P5 9 0.37 CDN Resource Laboratories 6.74 Pulp Duplicates 350 14.33 Preparation Duplicates 17 0.7 Total QC Samples 1,307 53.52 Source

The performance of the control samples is largely mediocre with failure rates, defined as samples more than two standard deviations below or above the expected value, between 10% and 40% for nine out of 13 standards used. Pulp duplicate data show good reproducibility with a correlation coefficient of 0.95. 12.5.3.4 Analytical Quality Control Data by Dalradian (2010 – 2016) Dalradian largely continued analytical quality control procedures implemented by Tournigan until late 2015 when Dalradian implemented certain changes and conducted an umpire assaying program. Approximately 10% of samples analyzed by the laboratory were chosen randomly by laboratory staff for repeat analysis from additional pulp material. A summary of analytical quality control data produced by Dalradian is shown in Table 12.2. While Dalradian initially used a large number of standard reference materials, more recently seven different types with a range of gold values have been used consistently. Overall, the performance of

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DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY these materials is acceptable with failure rates below 5% for those samples used most recently. The use of standard reference materials with higher failure rates (for example Rocklabs SQ48 with a failure rate of approximately 30%) has been discontinued by Dalradian. Reproducibility of core assays from pulp is satisfactory with a correlation coefficient of 0.87. Similar to the performance of standard reference material, the performance of blank samples has improved significantly since 2013. Reproducibility of assays of underground face samples from pulp is very good with a correlation coefficient of 0.99. The available dataset for this type of analytical quality control sample is small with 47 sample pairs available for analysis. However, more recent pulp duplicate data for core samples acquired in 2015 and 2016 have similarly good reproducibility with a correlation coefficient of 0.99. Hence, recent exploration data from underground face samples are comparable with those from recent core samples. Table 12.2: Summary of Analytical Quality Control Data Produced by Dalradian on the Curraghinalt Gold Deposit (2010-2016)

Total (%) Comment Gold (g/t) Sample Count 58,869 Standards 4,627 7.9 SF57 42 0.1 Rocklabs 0.85 SF67 483 0.8 Rocklabs 0.85 SG66 233 0.4 Rocklabs 1.09 SH35 24 0 Rocklabs 1.32 SH41 77 0.1 Rocklabs 1.34 SH65 48 0.1 Rocklabs 1.35 SH55 72 0.1 Rocklabs 1.38 SJ63 552 0.9 Rocklabs 2.63 SJ39 27 0 Rocklabs 2.64 SJ53 146 0.2 Rocklabs 2.64 CDN-GS-5C 1 0 CDN 4.74 SL46 25 0 Rocklabs 5.87 SL51 80 0.1 Rocklabs 5.91 SL61 701 1.2 Rocklabs 5.93 SN38 24 0 Rocklabs 8.57 SN60 825 1.4 Rocklabs 8.6 SN50 76 0.1 Rocklabs 8.69 CDN-GS-10A 1 0 CDN 9.78 HiSilP1 332 0.6 Rocklabs 12.05 SP59 518 0.9 Rocklabs 18.12 SP37 98 0.2 Rocklabs 18.14 SP49 44 0.1 Rocklabs 18.34

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Total (%) Comment Gold (g/t) SQ36 99 0.2 Rocklabs 30.04 SQ48 99 0.2 Rocklabs 30.25 Blanks 1,455 2.5 Limestone Pulp Duplicates 254 0.4 Preparation Duplicates 17 0 Total QC Samples 6,353 10.8 Source : SRK (2016)

12.5.4 Verification of Geological Modelling The wireframe interpretation of the boundaries of the quartz veins considered for Mineral Resource evaluation was constructed by Dalradian using Datamine Studio 3. This interpretation was subsequently audited by SRK. Hanging wall and footwall surfaces were constructed by creating a triangulated irregular network (TIN) with vertices defined by a set of hanging wall and footwall points for each vein. Before modelling all sample intervals were composited to 0.5 metre intervals from the top of bedrock surface down each hole, ignoring geological boundaries. Each vertex was snapped to a composite interval. The perimeter extents of the surfaces were clipped to a manually created polyline, clipped to the overburden surface as necessary, and joined to form a closed solid wireframe. The choice of points was based on the extents of logged gold mineralized shear veins (D veins). Other vein types such as extensional veins (C veins) can also be auriferous but were only included when immediately adjacent to, or within a modelled D vein interval. The first version of the vein wireframes examined by SRK on February 22, 2016, contained 18 wireframes. The review showed selection biases, inconsistent or contradictory interval selections irregular wireframe outer limits, or minor interval selection errors. SRK also suggested adding one splay to the Bend vein. The inconsistencies were fixed by Dalradian. The use of compositing prior to modelling irrespective of geology boundaries introduces a false true width for the modelled veins. In some instances, small veins straddling composite contacts are extended to 1-metre width. As a result there are minor discrepancies between the location of some vein intervals in the borehole samples and the composites. Where this occurs, there is a minor selection bias that SRK considers not material. The final geology model received on April 1, 2016 includes 20 vein wireframes combined into 16 domains.

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12.6 SRK Comment SRK carried out a detailed quality control review including the review of analytical quality control programs and their performance carried out by Ennex, Tournigan, and Dalradian between 1987 and March 2016. The aim of this review was twofold: a) to verify the reliability of exploration data, and b) to identify whether historical data would impact the reliability of the exploration data as a whole. Paired assay data examined by SRK show that assay results can be reproduced by OMAC and ALS from replicate or duplicate pulps. Rank half absolute difference (HARD) plots show for the available data sets that between approximately 60% and 85% of the samples the HARD value is below 10%. Dalradian also submitted sample pulps originally assayed by ALS to ActLabs for umpire laboratory testing. Approximately 82% of the umpire check assay pairs tested have a HARD value below 10%. In the opinion of SRK, the paired data results are consistent with results expected from gold mineralization. In the review of potential risk introduced by historical data, SRK identified the following issues:  Lack of analytical quality control data prior to 2000;  High failure rate of blank samples during discrete periods; and  High failure rate of certain control samples used.

The sampling data collected by Dalradian (55,029 core samples) far outweigh historical sampling data collected by Ennex (1,551 core samples) and Tournigan (2,289 core samples) (Figure 12.1), significantly reducing the risk introduced by the use of historical data that may be less reliable because the associated sampling data are less well documented. Figure 12.1: Distribution of Samples by Operator

Ennex Tournigan Dalradian 2015 - 2.6% 2016 3.9% 18.8%

Dalradian2015 18.8%

Dalradian 2010 - 2013 55.8%

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SRK investigated the spatial distribution of the historical boreholes relative to the resource domains and the influence of recent resampling programs on the spatial distribution of overall recent sampling (Figure 12.2 and Figure 12.3). Much of the historical Ennex and Tournigan samples are located in areas where significant infill drilling was completed by Dalradian or along the periphery of the deposit. As a result, although the incompletely documented historical data pose a certain risk to the reliability of the geology and Mineral Resource model informed by these data, SRK believe that this risk is adequately mitigated by resampling and the infill drilling conducted by Dalradian. Overall, SRK considers analytical results from core sampling conducted at Curraghinalt are globally sufficiently reliable for the purpose of resource estimation. The data examined by SRK do not present obvious evidence of analytical bias. Figure 12.2: Oblique Section Looking Northeast Showing the Distribution of Boreholes by Generation

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Figure 12.3: Oblique Section Looking Northeast Showing the Distribution of Samples by Generation

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13 Mineral Processing and Metallurgical Testing

The metallurgical test work carried out to support the development of the Curraghinalt project and which creates the basis of this section was summarized, managed and directed by Stacy Freudigmann P.Eng. with JDS Energy & Mining Inc. As permitted by Item 3 of Form 43-101F1 – Technical Report, published by the Canadian Securities Administrators (Form 43-101F1), the Qualified Person (QP) responsible for the preparation of this Section has relied upon certain reports, opinions and statements of certain experts who are not Qualified Persons. These reports, opinions and statements, the makers of each such report, opinion or statement and the extent of reliance are described herein.

13.1 Testing & Procedures A number of test work programs have been undertaken on the Curraghinalt project since 1985, as illustrated in Table 13.1. Test work programs completed by independent reputable metallurgical laboratories, using primarily drill core samples from exploration drilling, included but were not limited to characterization and mineralogical studies, comminution studies, gravity concentration tests, flotation, and leach and settling tests. Historical test work results indicated that the mineralization responded well to flotation and to direct agitated cyanide leaching for precious metal extraction. In previous project development phases prior to the 2016 metallurgical program, testing was undertaken on composites blended from various veins and different areas of the deposits on the Curraghinalt property. More recent test work through the Feasibility Study metallurgical program was carried out on flowsheet optimization composites, constructed to represent the resource as it was understood during that period (Q1 2016), and also on variability composites, to determine the variability of individual samples, selected to represent the grade, lithology and spatial aspects of the resource. Testing on the optimization composite was designed to develop the flotation-leach flowsheet. The resulting flowsheet, and more closely defined process variables, were then used to determine the metallurgical performance of a number of variability composites, evaluating both gold and silver recoveries.

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Table 13.1: Summary of Test Work Completed

Year Laboratory/ Consultant Report No. Mineralogy Comminution Gravity Flotation Cyanidation Solid/Liquid Separation Cyanide Detoxification Other 1985 Lakefield Research Ltd. 2936 Report 1 X X Diagnostic Leach 1986 Lakefield Research Ltd. 2936 Report 2 X X X X 1986 Lakefield Research Ltd. 2936 Report 3 X X 1989 Lakefield Research Ltd. 3588 Report 4 X X X X 1999 International Metallurgical and Environmental Inc./ Peter Taggart Report No.1 X X X 2012 SGS Canada, Lakefield Research Ltd. 13471-001 Final Report X X X Heavy Liquid Separation 2012 ALS Metallurgy KM3258 X X X X X 2013 ALS Metallurgy KM3258 Phase II X X 2013 ALS Metallurgy KM3841 X X Minor Element 2015 ALS Metallurgy KM3986 X X X X Locked Cycle Test 2015 Bureau Veritas Minerals Commodities Canada Ltd. 1501204 X 2015 Paterson & Cooke DRC-32-0147 X X Rheology, Paste Backfill 2015 Base Met Labs Ltd. BL0012 X X X X X Humidity Cell 2016 Base Met Labs Ltd. BL0075 X X X X X X X Source: JDS (2016)

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13.2 Mineralogical Evaluations 13.2.1 Mineralogy Historically, mineralogical analyses were conducted by the following laboratories:  Lakefield Research Ltd. (Lakefield) on head samples, gravity concentrate samples, T17 and Sheep Dip vein composites;  International Metallurgical and Environmental Inc. (IME) on high and low sulphide composites determining sulphur speciation;  SGS Canada (SGS) on both waste and vein samples;  ALS Metallurgy (ALS) on composite and concentrate samples including, photomicrographs, Bulk Mineral Analysis with Liberation (BMAL) and Quantitative Evaluation of Minerals by SCANning electron microscopy QEMSCAN™ work;  Base Met Ltd. (Base Met) undertaking mineral composition of the vein composites.

Mineralogical work indicates that gold mineralization at Curraghinalt occurs in quartz-pyrite veins and is associated with variable abundances of carbonate, chalcopyrite, and minor amounts of tennantite-tetrahedrite. In general, carbonate, chalcopyrite, and tennantite-tetrahedrite are paragenetically later than quartz and pyrite, and fill fractures in the latter. Gold occurs mainly as the native metal or more rarely as electrum (>20 wt% Ag) and is found primarily along fractures in pyrite, as inclusions in pyrite, and at pyrite grain contacts with carbonate and quartz. Most native gold grains are associated with carbonate, chalcopyrite, and minor amounts of tennantite-tetrahedrite, and telluride minerals. Samples from numerous veins were assessed and the mineralogy was observed to be generally similar in all the veins found at Curraghinalt. A sample of Master Composite (MC) 12-1A was ground to approximately 80% passing 106 µm and was submitted for BMAL and QEMSCAN analyses at ALS. The main conclusions of these analyses are summarized below.  Pyrite was the dominant sulphide mineral observed in the analyzed composite, measuring approximately 5.5% of the feed. Minor chalcopyrite was also observed, measuring about 1%;  The dominant minerals were quartz and muscovite, being approximately 51% and 25% by weight of the feed, respectively;  The copper sulphides and pyrite were well liberated, being approximately 83% on average. About 16% of the copper sulphides were locked in binary with pyrite. The liberation data indicates that a primary grind coarser than 106 µm could be used in the rougher circuit of a flotation flowsheet; and  Chalcopyrite accounted for the majority of the copper sulphide minerals in the feed.

The 2015 results from Base Met’s mineralogy on the vein composites indicated that the dominant copper-bearing mineral occurring in the vein composites also was chalcopyrite.

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Table 13.2: Summary of Mineral Content of Vein Composites

Composite Composite Minerals 106- Sheep Minerals 106- Sheep Crow No. 1 T17 Crow No. 1 T17 16 Dip 16 Dip

Chalcopyrite 0.2 0.2 0.3 0.3 0.2 Quartz 59 58 60 48 49

Tetrahedrite 0.1 <0.1 <0.1 0.1 0.1 Muscovite 19 19 19 27 26

Other <0.1 <0.1 <0.1 <0.1 <0.1 Feldspars 5 7 5 6 6 Sulphides Pyrite 6.4 4.1 5.9 3.5 5.8 Ankerite 6 7 5 4 4 Others 4 4 5 11 8 Source: Base Met (2015)

Pyrrhotite was not identified in the samples analyzed by Base Met, by ALS, nor by SGS, but was was only identified in a single sample in the 1986 Lakefield Research (LR) test work. The level of organic carbon in the samples studied by ALS and Base Met was also found to be negligible. The dominant minerals observed by Base Met were quartz and muscovite at 55% and 22%, on average, respectively, with pyrite averaging 5.1%, which aligns well with the previous 2012 ALS work. At ALS, a rougher concentrate sample was submitted for mineral examination, illustrated in the photomicrograph below, and was generated from a rougher flotation on the MC 12-1A, ground to approximately 80% passing 141 µm. It can be observed in these images that, as previously observed in the mineralization mineralogical analysis, the gold particles in the rougher concentrate Figure 13.1: Photomicrograph of Rougher Concentrate (T4, KM3258)

Source: ALS (2012)

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13.3 Test Work 13.3.1 Historical Metallurgical Testing 13.3.1.1 Pre-2012 Metallurgical Test Work The historical test work from 1985 to 1989 examined the amenability of the samples to gravity concentration. The gravity recovery of gold, using a Wilfley table followed by cleaning on a Mozley concentrator, varied from 26 to 52% Au. Test work undertaken in 1999 with a Knelson concentrator decreased the observed variability in the tested samples when compared to the previous historical gravity test work and ranged from 50 to 52% Au. A Bond Ball Mill Work Index (BWi) test completed by Lakefield in 1986 on a composite sample returned a value of 15.4 kWh/t. Historical cyanidation test work returned metal extractions typically averaging 95% for gold and approximately 80% for silver. A grind of approximately 85% passing 200 mesh (75 µm) and a leach time of 48 hours at 1 g/L NaCN dose was found generally effective on whole ore leaching (WOL). Sodium cyanide consumptions in direct cyanidation tests were variable but generally elevated between 1.0-2.4 kg/t. Where solution assays were available, they showed increased copper and thiocyanate (CNS) concentrations, and it was concluded that copper sulphides were the most likely cause for the raised cyanide consumptions. SGS undertook test work in 2011 to investigate Heavy Liquid Separation (HLS) as a means of reducing the amount of feed material reporting to process through density separation by rejecting the waste portion that would come from the mine as dilution. The tests indicated that, using this pretreatment of the plant feed, it was possible to reject up to 50% of the feed material into the waste stream; however, gold loss into the reject material was approximately 4%. As part of that test work program, SGS completed cyanide leach tests on samples of the rougher concentrate and rougher tailings from the sinks and float portions of the HLS test. Extractions were approximately 90% Au on average, and indicated that there is likely a strong dependency on particle size, independent of grade. The sinks concentrate from the HMS test was also submitted for flotation testing. Gold and silver rougher recoveries were 99% and 95%, respectively (relative to the flotation feed), into 42% of the mass. This test work suggested that a relatively coarser grind is likely possible prior to flotation. The flotation results indicated that the gold occurrence was strongly associated with sulphides, which is consistent with the mineralogical observations. 13.3.1.2 2012-2015 Metallurgical Test Work A program of test work was carried out by ALS Metallurgy (ALS) on a representative composite sample approximating the LOM average head grade of 8.1g/t gold. Laboratory testing was conducted using a gravity-flotation circuit, on samples ground to approximately 80% passing 140 μm prior to flotation, and produced a bulk rougher concentrate grading 82.8 g/t gold and 59 g/t silver. ALS completed a single BWi test on composite sample 12-1B, which returned a value of 15.2 kWh/t, agreeing with the historical test completed by Lakefield. ALS also completed a single Abrasion Index (Ai) on the same composite which returned a value of 0.1278 g.

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Gravity concentration test work achieved 81% and 76% gold recovery into a concentrate of 6% and 5% mass pull for composites 12-1A and 12-1B, respectively. Additional testing achieved gold recoveries into the gravity concentrates of 61.5% and 67.9% with mass pulls of 3.1% and 3.4%, and 29.4% and 24.2% with mass pulls of 0.2%. These results suggest a good correlation between mass pull and gold recovery into the gravity concentrate as illustrated in Figure 13.2. Figure 13.2: Gold Recovery to Gravity Concentrate with Varying Mass Percentage

90 80 70 60 Au)

50 40 30 Recovery 20 10 0 01234567 Mass Pull (%)

Source: JDS (2016)

The flotation testing by ALS focused on producing a rougher concentrate, both with and without a gravity circuit prior to flotation. Gold recoveries into the flotation concentrate without a gravity circuit were 98.8 to 99.4% (Composite 12-1A), and 94.7 to 95.3% (Composite 12-1B), and 70.0 to 74.6% (Composite 12-1A) when a gravity circuit was used ahead of the flotation circuit. Overall gold recoveries from this test program of 99.4%, with 29.4% of the gold reporting to the gravity circuit, and 70.0% reporting to a bulk rougher concentrate, demonstrated a potential alternative processing method compared to the WOL process used as the base case scenario previously. A number of other series of WOL and flotation tests were also undertaken with the main results summarized as follows;  Pre-aeration on the leaching process was demonstrated not to be required;  Lead Nitrate as an additive to the leaching process was also demonstrated not to be required, which would be expected with the almost non-existent presence of pyrrhotite as observed in the mineralogy;  The tests to determine the amount and effect of graphitic carbon in the mineralization demonstrated that there was only a minor trace amount present and that it was not deleterious to the flotation or leaching processes;

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 An initial grind size evaluation determined that for the tested composites tested a grind of approximately 80% passing 141-148 μm for WOL and approximately 80% passing 44 μm for the cyanide leaching of the flotation concentrate were optimal;  Increasing the cyanide concentration on the leach tests indicated an improvement in recovery could be achieved;  The testwork program undertaken at Base Met in 2015 assessed the metallurgical response of two main flow sheets; WOL and bulk flotation, followed by cyanidation of the flotation concentrate, on five vein composites (106-16, No.1, T17, Crow & Sheep Dip) and a single MC. Vein composite grades ranged from 5.4 to 11.2 g/t Au and 4.2 to 9.6 g/t Ag with the MC at 8.2 g/t Au and 4.6 g/t Ag, while copper was present in all the samples, at relatively low levels of around 0.1%. Carbon was measured at less than 0.5% and again, no preg-robbing effects were observed during cyanidation;  The BWi testing was conducted using a closing screen sizing of 212µm, resulting in a product sizing averaging approximately 80% passing 169 µm. At this closing screen sizing, the five recorded composites work indices were averaging 12.5 kWh/t; and  The mineralization was measured to be moderately abrasive, with abrasion indices between 0.07 to 0.16 g and an average of 0.11 g. SMC tests resulted in an average drop weight index (DWi) of 3.7 kWh/t. These values indicated that the Curraghinalt mineralization would be moderately soft.

Table 13.3 summarizes the results from the comminution test work undertaken at ALS. Table 13.3: Comminution Test Result Summary

DWi Sample ID Bond BWi kWh/t Abrasion Index A x b kWh/m3 106-16 Comp 12.8 0.108 63.4 4.27 Crow Comp 13.4 0.161 67.9 4.01 No. 1 Comp 12.7 0.122 69.9 3.96 Sheep Dip Comp 11.5 0.087 79 3.47 T-17 Comp 12 0.071 91.8 2.97 Source: Base Met, 2015

Rougher flotation of the MC measured greater than 95% Au recovery for all of the tests, employing a primary grind size of approximately 80% passing 145 µm, and using Potassium Amyl Xanthate (PAX) as the collector. The majority of this recovery was to the rougher concentrate with typically less than 2% of the gold being recovered to the scavenger concentrate. When gravity concentration was included prior to flotation, about 24% of the gold was recovered to the concentrate. This concentrate graded 747 g/t Au. This in turn led to the flotation concentrates grading lower, however, the overall recovery of gold did not appear to be influenced by either the inclusion or exclusion of the gravity concentration stage.

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Overall gold extractions were lower from the WOL tests than for the combined gravity/flotation/leach tests. For WOL, gold extraction after 48 hours measured up to 90%. For tests on the gravity/flotation/leach flowsheet, gold recovery measured between 90 and 94%. For the flotation concentrates from the MC tests, gold recovery generally improved as the cyanide concentration increased and as the regrind size decreased. On average, across all concentrate leach tests, gold extraction was 95%, with a range between 94 and 96% for the groups of cyanide concentrations of 1, 500 ppm and 10,000 ppm. Gold extraction kinetics were greatly enhanced at the higher cyanide concentration of 10,000 ppm. The high sodium cyanide concentration did also result in increased consumption during the leach stage. Sodium cyanide consumption measured, on average, 0.8 kg/t of MC for the lower sodium cyanide concentration leaches (1,500 ppm and 2,000 ppm sodium cyanide) and 1.5 kg/t for the 10,000 ppm tests. Lime consumption measured on average 0.2 kg/t. Carbon In Leach testing on the MC did not appear to improve gold extraction; however, silver recorded higher recoveries in these tests (8% on average). Silver recovery also increased when a higher pulp density of 50% solids was employed. In the remaining tests, silver recovery measured between 63% and 69%. On the vein composites, the Sheep Dip vein had the lowest flotation gold recovery, measuring approximately 91%, while the Crow and 106-16 Composites exhibited the highest gold recoveries of around 98%. The weighted average recovery from the vein composites matched that of MC 15-A at 96% Au. Copper and silver recoveries measured, on average, 92% and 86%. Figure 13.3: Gold Leach Recovery with Varying NaCN Concentrations

100 90 80 70 60 50 40 30 20

Gold Recovery -Gold Recovery percent 10 0 106-16 No. 1 T17 Crow Sheep Dip Wt Avga MC 15-A Whole Ore Leach Float/Con Leach @1500ppm NaCN Float/Con Leach @2000ppm NaCN Float/Con Leach @10000ppm NaCN

Source: Base Met (2015) The first set of cyanidation tests on rougher concentrates from the vein composites were conducted at 1, 500 ppm sodium cyanide (NaCN) concentration with the second set at 2,000 ppm NaCN concentration. An additional test was conducted on the No.1 Composite at 10,000 ppm.

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In the first set of tests, the Sheep Dip composite had a lower leach recovery than the other composites, recovering only 82% of the gold from the flotation concentrate. Gold recovery was still increasing at the end of the test (after 48 hours). This composite performed much better in the second test with higher NaCN concentration, during which 95% of the gold was recovered. Gold extractions were higher using the flowsheet involving flotation, with approximately resulted in 92% Au overall recovery. Sodium cyanide and lime consumptions using this flowsheet measured about 1.0 kg/t and 0.2 kg/t of flotation feed, respectively. Whole ore cyanidation resulted in, on average, 6% lower gold extraction as compared to the flowsheet involving flotation/cyanidation. Higher sodium cyanide concentrations in the leaching stage were evaluated and tended to result in higher gold extractions. On the MC, increasing the concentration from 1,500 to 2,000 ppm NaCN resulted in about 1.5% higher gold extraction. Increasing it again from 2,000 to 10,000 ppm resulted in an additional 1.6% higher gold extraction, and gold kinetics were greatly improved. Copper was present in all the tested samples and, given the relatively good liberation characteristics of the samples, it may be possible to produce a copper concentrate. This would lower the mass throughput feeding the cyanidation circuit, and potentially lower sodium cyanide consumption. 13.3.1.3 Solid-Liquid Separation Test Work Two solid-liquid separation programs have been conducted on the Curraghinalt mineralization. The first flocculant screening and static settling tests were undertaken in July 2015 and were conducted at Base Met on flotation tailings, concentrate and leach residue produced from the MC. As part of that sample testing program, both flotation tailings and detoxed leach residue samples were sent to Paterson & Cooke (P&C) for solid-liquid separation testing and paste backfill assessment. A full report was published in September 2015. Base Met undertook a preliminary flocculant screening test utilizing anionic, cationic and non-anionic flocculants, resulting in the anionic (Magnafloc 156) producing the fastest settling rate and clearest supernatant in that test series. This flocculant was then tested as follows in Table 13.4 indicating that a dosage of approximately 5-10 g/t would produce the best overall performance. Table 13.4: Static Settling Test Result Summary

Dosage Free Settling Rate Final Density Product (g/t) (mm/min) (% solids)

T22 Scavenger Tailings 0 6 57 T22 Scavenger Tailings 2 264 54.8 T22 Scavenger Tailings 5 233 53.9 T22 Scavenger Tailings 10 353 49.9 T22 Scavenger Tailings 20 380 46.6 T22 Ro and Scav Con - Unleached 10 180 57 T33/34 Leach Residue 10 133 52.4 P&C tested the flotation tailings and detox leach residue and were able to achieve favourable settling conditions under the following conditions:

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 Float Tails: 10-15% solids feed, 30-35g/t anionic flocculant (Magnafloc 919) producing 64% solids underflow; and  Detox Leach Residue: 5-10% solids feed, 20-25g/t slightly anionic flocculant (Magnafloc 10) producing 64% solids underflow.

In their flocculant screening, P&C did not reassess Magnafloc 156 or flocculant dosages less than 15g/t as tested by Base Met, as the objective of the P&C work was to produce a high underflow density for paste backfill. P&C was able to produce a 58.5% underflow density on the detox leach residue using a 10% solids feed density and a flocculant dose of 15g/t. 13.3.1.4 Filtration Filtration test work was carried out by P&C on flotation tailings and the methodology was designed to replicate vacuum disk filtration in terms of filter leaf submersion, form, and both dry and total cycle times. High filtration rates were measured, with increased loading observed with increased feed density and faster cycle times. The resulting cakes measured between 20 to 22% moisture. Figure 13.4: Vacuum Filtration Results

Source: P&C (2015)

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13.3.1.5 Cyanide Detoxification Test Work As part of the 2015 Base Met test programs, samples were sent to the BV Minerals division of Bureau Veritas Commodities Canada Ltd. in Vancouver in 2015 for detoxification test work. The SO2/O2 cyanide destruction process was successful in reducing the levels of CNWAD to the target of less than 5.0 mg/L, achieving 0.07 mg/L of CN Total and less than 0.05 mg/L CNWAD.

A detox feed slurry containing 974.2 mg/L CNWAD was effectively treated and resulted in a stable final CNWAD of less than 0.05 mg/L under reaction conditions of 5.3 g SO2 / g CN Total, a pH of 8.7 and six hours of retention time; however, 1.5 mg/L CNWAD was achieved after a residence time of 60 minutes under the same conditions. Copper catalyst addition was required at 0.7g/g CN Total in this test work to achieve the final result. 13.3.2 Feasibility Study Metallurgical Test Work Base Met Laboratories in Kamloops, BC, completed a comprehensive test work program on the Curraghinalt mineralization between January and April of 2016 which included;  Comminution;  Gravity concentration;  Bulk flotation;  Mineralogy;  Dewatering (solid/ liquid separation);  Oxygen uptake testing;  Viscosity evaluation; and  Cyanidation.

Over one and a half tonnes of Curraghinalt samples (a mix of coarse rock sample and drill core), was received for testing; 277 samples from 11 drill holes were taken as they passed through each discreet vein for flotation testing, while an additional 236 intervals were sampled for comminution testing, and the bulk vein material generated five different composites for the test work program. The test work program for Curraghinalt was designed to optimize the overall process for gold extraction, and to provide an understanding of the variability in the metallurgical response for the Feasibility Study. 13.3.2.1 Comminution Test Work Comminution test work was undertaken, testing the Crusher Work Index (CWi) on material from four of the veins and the two waste rock types, the SAG Mill Comminution (SMC) and Bond Ball Mill Work Index tests (BWi) on the comminution variability composites, and Abrasion indexes (Ai) on vein material from five vein deposits and the optimization composite. The summary of the results from the comminution test work can be found in Table 13.5 and indicates that the mineralization from each of the tested veins appears to be relatively soft to moderate in hardness and amenable to SAG milling. The abrasiveness of the rock is also relatively low.

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Table 13.5: Summary Comminution Results

Abrasion Bond BWi DWi Sample ID Index (kWh/t) (kWh/m3) (g) 106-16 Composite 12 0.15 3.84 No. 1 Composite 12.6 0.13 4.84 T17 Composite 12.7 0.14 2.28 V75 Composite 11.2 0.13 3.41 T17A Composite 14 Optimization Composite 12.5 Source: Base Met

The SMC results shown in Table 13.6 indicate that the variability samples measured an average drop weight index (DWi) of 4.9 kWh/m3 which could indicates that the mineralization would be quite amenable to SAG milling. The sample test results range between being moderately soft to moderately hard at 2.28 to 6.87 kWh/m3, respectively. Table 13.6: Variability Comminution Data

DWi BWi Sample ID 3 (kWh/m ) A * b (kW-hr/tonne) T-17 Comp. 2.28 125.3 12.7 V-75 Comp. 3.41 80.2 11.2 106-16 Comp 3.84 72 12 No-1 Comp. 4.84 56.4 12.6 106-16-1 5.11 53.641 13.1 106-16-2 5.13 54.614 13.4 106-16-3 6.35 43.818 14.2 Bend 5.68 48.503 13.8 Causeway 3.41 80.303 10.5 Crow-1 3.18 85.675 13.4 Crow-2 4 69.212 14.1 Crow-3 5.61 48.618 14.4 Mullan-1 4.16 67.26 13 Mullan-2 4.86 55.524 13.8 Mullan-3 4.46 63.336 14.4 No.1-1 4.52 60.99 14.4 No.1-2 4.32 55.488 13.4 No.1-3 3.15 84.608 11.1 Road 5.64 48.02 11.6

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DWi BWi Sample ID 3 (kWh/m ) A * b (kW-hr/tonne) Sheep Dip 6.32 44.25 14.8 Slapshot 5.29 53.784 14.4 Sperrin 5.62 49.364 12.9 T17-1 4.91 55.237 14 T17-2 2.96 89.04 11 T17-3 4.84 58.183 14 V55 5.3 52.008 12 V75-1 5.05 55.335 14.3 V75-2 6.87 39.42 13.6 V75-3 4.85 56.212 13.3 Source: Base Met (2016)

A closing screen size of 212µm was used for the Bond Ball Mill Work Index (BWi) tests with an average product sizing of approximately 162µm K80. The average BWi measured 13.3 kWh/t, ranging from 10.5 to 14.8 kWh/t across the 25 composites, indicating the mineralization to be of moderate hardness. Bond Low Impact Crusher tests were conducted on rock samples specifically supplied by Dalradian Resources for this testing. The average work index for each sample set ranged from 6.9 to 9.2 kWh/t, which would be considered very soft with respect to crushing. 13.3.2.2 Optimization Test Work A series of flotation and leaching tests were completed to optimize the process flowsheet and associated variables. The primary grind – recovery relationship was assessed for both gravity and rougher flotation. There does appear to be an impact of primary grind sizing on gravity gold recovery as illustrated in Figure 13.5. Gravity gold recovery at primary grind sizes between 106 and 145 µm K80 measured between 28% and 49% whereas at 340 to 460 µm K80 recovery measured 17 to 20% respectively.

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Figure 13.5: Primary Grind Size vs. Gravity Recovery

60.0

50.0 Au)

40.0

30.0 Recovery

20.0

Gravity 10.0

0.0 0 100 200 300 400 500 Grind Size (P80 um)

Source: JDS (2016)

Intensive leach optimization test work was also undertaken on the gravity concentrate, the results indicate that a NaCN dose of 2,000 ppm or above at a grind of approximately 80% passing 44 µm using NaOH at a pH of 12 for a residence time of 48 hours achieved a gold extraction of 99.6%. Overall cyanide consumption of NaCN for that test (T69) was 0.18kg/t. Increasing cyanide dose showed limited benefit to the overall extraction at 24 or 48 hours, and only gave an increase in gold extraction of approximately 3% at the 6-hour mark.

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Figure 13.6: Primary Grind Size vs. Gravity/Rougher Flotation Recovery

100.0

98.0 Au)

(% 96.0

94.0 Recovery

92.0

90.0 Flotation

88.0

86.0

Gravity/Rougher 84.0

82.0 0 100 200 300 400 500 600 700 Grind Size (P80 um)

Source: JDS (2016)

Overall gold recovery, to the combined pan, rougher and scavenger flotation concentrates, was also impacted by primary grind, more so once the grind size increased above approximately 80% passing 300µm such that a primary grind size of approximately P80 240 µm was selected. Six of the optimization tests on the optimization composite excluded gravity concentration, and these tests were at relatively coarse primary grind sizes. One of these, Test 74, was undertaken to produce products for downstream testing and consumed 150 kg of feed mass. Tests 56, 65, 71 and 72 measured overall rougher flotation gold recoveries of between 98.9% and 99.4%, despite excluding gravity concentration. Comparatively, tests 10 and 11, which had the same primary grind time and included gravity concentration, measured gold recoveries of 99.3% and 99.4% respectively. This would potentially indicate that gravity concentration might not be required to achieve similar gold recoveries to the rougher flotation concentrate. Test 58 was conducted to evaluate flash flotation. The nominal primary grind sizing for this test was approximately 80% passing 650µm (K80). At this sizing, about 85% of the gold was recovered to the rougher concentrate. Gold was still being readily recovered in the fourth rougher stage and longer residence times might allow for higher rougher flotation recovery or an assessment of coarse particle flotation. However, the practicality of running longer flotation times at plant scale at such coarse primary grind sizes would need to be further evaluated. These optimization tests were initially undertaken on a high grade composite due to limited sample mass available; however, the flowsheet variables were confirmed on both a low grade and LOM grade composite with similar results.

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Cleaning flotation of the rougher concentrate was also assessed, and upon completion of the variability program it was shown that cleaning of the rougher concentrate with no regrind resulted in a gold recovery decrease of approximately 2% and mass pull decrease on average of approximately 6%. Leach parameters were evaluated through 23 cyanidation bottle roll tests that were conducted on the bulk Test 17 combined rougher and scavenger concentrate sample. Tests 32 to 37 were undertaken at 2,000 ppm NaCN concentration, and Tests 54 to 55, at 5,000 ppm NaCN concentration, tested the effect of particle size. These tests are summarized in Table 13.7. Table 13.7: Cyanidation Results – Effect of Regrind Size

Au Overall Reagent Grind 48hr Gold Calculated NaCN pH Residue Cons. - kg/t plant feed Test Size Extraction Au Feed (ppm) Assay (P µm) (%) (g/t) 80 (g/t) NaCN NaOH T32 138 2000 11 82.2 112 20.1 0.71 0.08 T33 65 2000 11 91.3 107 9.32 1.16 0.04 T34 45 2000 11 92.7 116 8.47 1.52 0.02 T35* 35 2000 11 80.5 117 22.8 1.6 0.01 T36* 23 2000 11 64.5 110 39.3 1.69 0.05 T37* 14 2000 11 62 110 42 1.74 0.24 T54 45 5000 11 95.4 110 5.1 2.58 0.06 T55 35 5000 11 94.2 113 6.53 3.09 0.06 Note: * DO levels of +15mg/L could not be maintained. Source: JDS (2016)

At a finer particle size, difficulties were encountered maintaining dissolved oxygen (DO) levels above 15 mg/L, despite oxygen sparging at each reading. It appears that this lower DO resulted in reduced gold extractions at sizes of approximately 80% passing 35µm and finer. For test 55, the DO was maintained above 15 mg/L, but gold extraction was no better than test 54, which had the same cyanide concentration but a slightly coarser particle size of approximately 80% passing 45 µm. Sizes coarser than approximately 80% passing 45µm (65µm and 138µm K80) also had poorer gold recoveries than the equivalent test at approximately 80% passing 45µm K80. Thus, 45µm K80 appeared to be the optimal particle sizing for this sample. Further optimization test work and mineralogy would be required to refine the gold recoveries of the samples with finer grinds.

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Figure 13.7: Gold Recovery from Concentrate Leach at Varying Cyanide Doses

100.0 Au)

90.0 (% 80.0 70.0 60.0 Extraction 50.0 40.0 Leach

30.0 20.0 10.0 Concentrate 0.0 0 1000 2000 3000 4000 5000 6000 NaCN Dose (ppm)

Source: JDS (2016)

A number of other optimization tests were carried out including an assessment of the cyanide dose on the leach recovery and tailings residue grade. From the results performed on this concentrate sample reground to approximately 80% passing 45um, with and without CIL, tailings residues increased once the NaCN dose used decreased below 2,000 ppm. A slight improvement in recovery and tailings grade was observed when a NaCN dose of 5,000 ppm was used. Further test work would be required to evaluate the 5,000 ppm result; however, the average cyanide consumption increased to 2.7 kg/t from 1.6 kg/t for the 2,000 ppm NaCN tests. At the time, trade-off calculations indicated that increasing the sodium cyanide dose from an optimized 2,000 ppm result to 5,000 ppm was not economical, and consequently 3,000 ppm NaCN was selected for the variability test work. Additional test work would be required to further refine the 2,000 to 5,000 ppm result. A summary of results using other cyanide bottle roll test conditions on the Test 17 flotation concentrate are as follows:  Pre-oxidation, involving 12 hours of oxygen sparging prior to the test, did not improve extraction;  The addition of lead nitrate did not improve gold extraction in the range of 20 to 250 g/t;  The use of cement instead of lime to modulate pH had a minor adverse effect on gold extraction. Cement consumption was much higher than lime consumption;  Higher pulp densities, as compared to 33% by weight, resulted in relatively decreased gold extractions;  Lowering the cyanidation concentration from 2,000 ppm resulted in much lower gold recoveries and increased tailings grades;  Lowering the pH to 10 improved gold extraction by about 0.7%. Raising the pH lowered gold extraction by about 7%; and

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 Raising the cyanide concentration to 5,000 ppm increased gold extraction by about 2.7%, despite the test having a pH of approximately 12. Cyanide consumption was substantially higher at this concentration, however.

13.3.2.3 Variability Test Work A flotation test was conducted on each of the process variability composites at a nominal grind size of approximately 80% passing 240µm. Based on the flotation optimization test work, the tests did not include gravity concentration. PAX was used as the collector and Methyl IsoButyl Carbonyl (MIBC) as the frother. Rougher flotation gold extraction, weighted for the average LOM mine plan head grade, averaged 97.7% across the 61 samples with a mass pull of approximately 11.2%. The extraction of gold from the flotation concentrate cyanidation stage alone had a weighted average of 96.3%. Figure 13.8 illustrates the rougher mass pull and gold recovery for the 61 variability samples. Figure 13.8: Mass Pull vs. Au/ Ag Recovery Curve

100.0 20.0 90.0 18.0

Au) 80.0 16.0

(%) (%

70.0 14.0

60.0 12.0 Pull 50.0 10.0 Mass

Recovery 40.0 8.0 30.0 6.0

20.0 4.0 Rougher Flotaiton 10.0 2.0 0.0 0.0 F E E E E C B C C C B A A B B A A H G H G

16 16 16 ‐ Dip ‐ Dip ‐ T17 V75

V55 T17 V75

No.1 No.1 Road Crow Bend Crow 106 Mullan 106 Sperrin 106 Sperrin Slapshot Sheep Sheep Causeway Deposit/Composite

Rougher Recovery Mass Pull

Source: Base Met (2016)

Average rougher recovery, when weighted for average LOM gold head grade, was 98.1% across the 61 samples. Average rougher recoveries, weighted for average LOM head grades, for silver and copper measured 84.3% and 98.5%, respectively. About 2% recovery difference was also observed between the rougher and cleaner concentrate for these elements.

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Recombined rougher concentrate from each of the flotation variability composites was tested for amenability to cyanidation. A single Carbon In Leach (CIL) Cyanidation bottle roll test was conducted on each of the composites. Each rougher concentrate sample was reground to a nominal grind size of approximately 80% passing 45 µm prior to the bottle roll test. Leach recoveries for Au and Ag for the different veins are shown in Figure 13.9. Relative silver and copper extractions in the cyanidation circuit averaged 71% and 14% respectively. Sodium cyanide consumption was moderate, averaging at 1.3 kg/t of fresh feed. Figure 13.9: Au/ Ag Leach Recoveries

100.0 120.0 90.0 100.0

80.0 (%) (%)

70.0 80.0 60.0 Recovery Recovery

50.0 60.0 40.0 Leach Leach

40.0 30.0 20.0 Gold

20.0 Silver 10.0 0.0 0.0 F E E E E C B C C C B A A B B A A H G H G

16 16 16 ‐ Dip ‐ Dip ‐ T17 V75

V55 T17 V75

No.1 No.1 Road Crow Bend Crow 106 Sperrin Mullan 106 106 Sperrin Slapshot Sheep Sheep Causeway Deposit/Composite

Gold Leach Recovery Silver Leach Recovery

Source: Base Met (2016) "Three QA/QC samples were sent to SGS for testing. The flotation recoveries average 98.1% Au and grind size correlate very well with the Base Met work and the respective CIL recoveries (97.2% Au) at the target grind size under the same conditions also correlate within 0.5%. Two of the samples were overground down to 22um and 26um P80, and the same result seen in the optimization test work was observed, namely the leach recovery decreased when the grind was finer than approximately 80% passing 40um. As previously indicated, further test work and mineralization study should be undertaken to understand this phenomenon, however, grind to the target p80 of 50um achieved CIL recoveries as was observed in the variability test work. “

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13.3.2.4 Feasibility Recovery Projections The overall recoveries for gold above a 5 g/t mine cut-off ranged from 93.9 to 94.8% without solution losses. Typical operational inefficiencies can vary from 0.3 to 1% and the LOM mine plan weighted average gold recovery was estimated at 94.3%. From the variability data illustrated in Figure 13.10, it can be seen that there was indeed a grade/recovery relationship for silver, but based on a weighted average head grade from the mine plan, the estimated silver recovery was 57.9%. Figure 13.10: Grade vs. Au/ Ag Recovery Curve

100.0 90.0 80.0 Au)

70.0 (% 60.0 50.0 Recovery 40.0 30.0 Overall 20.0 10.0 0.0 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 Grade (g/t)

Gold Silver

Source: Data taken from Base Met Labs (2016)

13.3.2.5 Solid/Liquid Separation Test Work Settling tests were conducted on rougher tailings and CIL residues from the variability program, covering 14 veins and the optimization composite #2, which was created from the comminution composites to represent the LOM grade. Results are summarized in Table 13.8. Rougher tailing settling rates were relatively consistent with free settling rates measuring between 177 and 195 mm/minute. Compaction densities were also quite consistent measuring on average 58% solids. CIL residue at finer grinds had settling rates that were slower and less consistent compared to rougher tailing settling rates. Free settling rates for the CIL residues measured between 14 and 68 mm/minute to an average ultimate compaction density of 47% solids.

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Table 13.8: Settling Tests Data

Free Settling Rate Final Density Composite ID Product (mm/min) (% solids)

Test 73 Rougher Tailings 179 55.7 Opt Comp #2 Test 76 Cyanide Residue 68 52.6 Test 79 Rougher Tailings 177 56.4 Slapshot B Test 78-80 Cyanide Residue 36 47.8 Test 82 Rougher Tailings 194 57.9 Bend C Test 81-83 Cyanide Residue 40 46.5 Test 85 Rougher Tailings 189 60.3 Sperrin B Test 84-87 Cyanide Residue 19 44 Test 89 Rougher Tailings 188 58.4 Causeway B Test 88-90 Cyanide Residue 43 48.6 Test 93 Rougher Tailings 178 57.7 Road C Test 91-94 Cyanide Residue 61 48.6 Test 97 Rougher Tailings 182 57.5 Crow C Test 95-99 Cyanide Residue 20 44 Test 102 Rougher Tailings 181 55.6 Mullan C Test 100-104 Cyanide Residue 14 48.5 Test 107 Rougher Tailings 191 56.9 Sheep Dip C Test 105-108 Cyanide Residue 14 43.7 Test 102 Rougher Tailings 194 57.7 No.1 D Test 109-115 Cyanide Residue 56 47.9 Test 117 Rougher Tailings 195 57.6 V55 B Test 116-118 Cyanide Residue 53 48.4 Test 121 Rougher Tailings 193 58.8 T17 D Test 119-124 Cyanide Residue 29 47.7 Test 128 Rougher Tailings 184 58.9 V75 D Test 125-130 Cyanide Residue 30 47.7 Test 136 Rougher Tailings 184 58.8 106-16 F Test Cyanide Residue 18 46.6 Source: Base Met (2016)

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13.3.2.6 Oxygen Uptake Rate Determination Test Work Reground combined rougher/scavenger concentrate was utilized to determine the oxygen uptake characteristics of the mineralization. Oxygen Consumption results are displayed in Table 13.9. Table 13.9: Oxygen Consumption in Leach

Hours 0 1 2 3 4 5 6 24 Oxygen Consumption 0.007 0.002 0.11 0.177 0.181 0.156 0.147 0.116 mg/L/hr Source: JDS (2016)

Although the oxygen consumption within the first two hours appears to be low, it is more than likely significantly higher as the initial dissolved oxygen measurements at time zero for these intervals was less than 1 mg/L. A satisfactory dissolved oxygen level at time zero for the intervals was not achieved until after three hours. The sample exhibits relatively high oxygen consumption with demand not decreasing until after four hours. 13.3.2.7 Detoxification Test Work As part of the 2016 Base Met test programs, samples were sent to Kemetco Research Inc., Vancouver (Kemetco), to optimize the cyanide detoxification process and deliver representative treated detox effluent samples for environmental testing on two grades, high grade (HG) and LOM grade (LG), of flotation concentrate. The two samples were each ground and subjected to a CIL process using representative test conditions. The relatively higher NaCN addition to the leach and higher sulphide levels in the concentrates resulted in relatively higher levels of sulphate, cyanate and thiocyanate in solution. Consequently, direct detoxification of the CIL tailings resulted in elevated levels of sulphate above 5,000 ppm, causing consolidation issues with the paste fill. The barren leach slurry tailings resulting from each leach was then diluted to 20% solids and decanted, to mimic the introduction of a cyanide recovery thickener in an effort to reduce the level of sulphate in the CIL tailings and eliminate the paste fill consolidation issue. This step produced both a separate supernatant solution and thickened slurry sample for detox testing. The test products from the HG concentrate were split into smaller test lots and used for detox optimization testing (due to sufficient mass being available) and test products from the LG concentrate were used for confirmation of the process parameters through continuous bulk testing under optimized conditions.

In total, 14 bench scale detoxification tests were performed. The SO2/O2 cyanide destruction process was successful in reducing the levels of CNWAD to the target of less than 5.0 mg/L for all streams and the principal results obtained from the detox testing were as follows:

 HG tailings slurry sample: CNWAD was reduced to 0.277 ppm, Cu to 0.16 ppm, and Fe to

0.51 ppm using a 5:1 SO2:CNWAD ratio, 15 ppm Zn and pH 9, with a 150 minute retention time. Copper did not work as effectively as zinc as a catalyst for this feed;

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 HG solution sample: CNWAD was reduced to 0.313 ppm and Cu to 4.37 ppm using a 5:1

SO2:CNWAD ratio, 15 ppm Cu and pH 8.5, with a 150 minute retention time. Replacement of copper with zinc as the catalyst may further improve results;

 LG slurry: CNWAD was reduced to 0.651 ppm, Cu to 0.5 ppm and Fe to 11.9 ppm using a 5:1

SO2:CNWAD ratio, 30 ppm Zn and pH 9, with a 120 minute retention time; and

 LG solution: CNWAD was reduced to 0.739 ppm, Cu to 3.22 ppm and Zn to 0.12 ppm using a 5:1

SO2:CNWAD ratio, 15 ppm Cu and pH 8.5, with a 150 minute retention time.

Overall, the detox optimization tests identified suitable conditions for consistently meeting target levels for CNWAD removal from this effluent. Replacement of the copper catalyst with zinc improved the slurry detox efficiency; however, the effect of the zinc catalyst on the solution detox was not investigated due to sample restrictions, and is recommended for future work. If significant changes to the process chemistry are needed in the future, particularly if any treated effluent is recycled back into the circuit, additional detox testing would be advisable, potentially extending to locked cycle testing of detox in combination with CIL testing.

13.4 Other Design Considerations Only traces of mercury have been observed in the composites sampled. Typically, if the mercury level is below 50 ppm in the process plant feed, in gold districts where mercury is present, it is not expected to be an issue downstream, either as a competitor for gold in the extraction process or for health reasons. 50 ppm is an experience-based guideline as it is dependent on the extraction potential of the mercury and its geological form. Above 50 ppm, mercury mitigation actions may be required, however, it is understood that the Curraghinalt process facility has included these abatement processes in the design.

13.5 Relevant Results The results from the previously reported metallurgical test programs concluded with the following flowsheet:  Primary grind to approximately 80% passing 240µm, followed by flotation and CIL of the rougher concentrate ground to approximately 80% passing 50 µm.

Based on an analysis of the metallurgical results, the gravity concentrator was removed from the grinding circuit during the design phase as it did not benefit gold recovery. Cleaner flotation was also removed from the process flowsheet as it did not benefit gold recovery.

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13.5.1 Process Design Criteria and Metallurgical Projections The process plant design criteria and metallurgical projections developed for the selected option were based on an analysis of the test work completed between 2015 and 2016. This is detailed in the following sections below. 13.5.2 Comminution Design Criteria The design was based on the 75th percentile of the available results. A summary of the key comminution design criteria is presented in Table 13.10. The comminution design criteria selected shows very moderate values for comminution. Table 13.10: Key Comminution Design Criteria

Description Units Value Source Bond Ball Mill Work Index kWh/t 13.7 BL0075 (Base Met 2016) Bond Abrasion Index g 0.137 BL0075 (Base Met 2016) SMC Axb 54.9 BL0075 (Base Met 2016) Source: JDS (2016)

13.5.3 Flotation Design Criteria Flotation results from the 2016 Feasibility Study test work were used to estimate flotation recovery. Gold grade vs. rougher recovery curves were created from test data and empirical equations were then generated to predict gold and silver recoveries. A summary of the key process design criteria for the flotation area is presented in Table 13.11. A flotation feed F80 of approximately 240µm was selected. Tests 59 to 61 incorporated only 10% of the PAX dosage of other tests; 4.2 g/t instead of 42 g/t. Despite this reduction in dosage, gold recoveries were similar to other tests. Table 13.11: Key Flotation Circuit Design Criteria

Description Units Value Source Flotation Feed F80 µm 240 BL0075 (Base Met 2016) Flotation Circuit Recovery Au % 97.7 BL0075 (Base Met 2016) Ag % 69.6 BL0075 (Base Met 2016) Flotation Mass Pull % 11.2 BL0075 (Base Met 2016) Flotation Reagent Dosage PAX g/t 42 BL0075 (Base Met 2016) MIBC g/t 28 BL0075 (Base Met 2016) Source: JDS (2016)

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13.5.4 Regrind Design Criteria A summary of the key process design criteria for the concentrate regrind is presented in Table 13.11. A final regrind size of approximately 80% passing 50 µm was selected. The Bond Ball Mill Work Index (BBMWi) was used to size the regrind mill for the Curraghinalt process facility. Table 13.12: Key Regrind Circuit Design Criteria

Description Units Value Source Regrind Feed F80 µm 240 BL0075 (Base Met 2016) Regrind Size P80 µm 50 BL0075 (Base Met 2016) BBMWi kWh/t 13.7 BL0075 (Base Met 2016) Source: JDS (2016)

13.5.5 CIL Design Criteria Cyanidation results from the 2016 Base Met test program were used to develop the leach circuit design criteria. Recovery projections for Curraghinalt are based on all tests conducted at a grind size of approximately 80% passing 50 µm. Further test work is recommended to confirm recovery projections and assumptions for Curraghinalt. A summary of the key process design criteria for the leach area is presented in Table 13.13. Table 13.13: Key Leach Circuit Design Criteria

Description Units Value Source CIL Feed F80 µm 50 BL0075 (Base Met 2016) CIL Retention Time hrs 48 BL0075 (Base Met 2016) Leach Circuit Recovery Au % 96.3 BL0075 (Base Met 2016) Ag % 82.8 BL0075 (Base Met 2016) Oxygen Consumption t/d 4.2 BL0075 (Base Met 2016) and Design Criteria Lime Consumption kg/t 0.1 BL0075 (Base Met 2016) Cyanide Consumption kg/t 1.23 BL0075 (Base Met 2016) Source: JDS (2016)

13.5.6 Cyanide Destruction Design Criteria The cyanide destruction data is limited. Therefore, industrial standards were used to develop preliminary reagent requirements and operating conditions for the circuit. Further test work is recommended to confirm reagent requirements for the other deposits and to more fully define the process variables. A summary of the key process design criteria for cyanide destruction is presented in Table 13.14.

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Table 13.14: Key Cyanide Destruction Circuit Design Criteria

Description Units Value Source Detox Retention Time - Slurry min 120 Kemetco (2016) Detox Retention Time - Solution min 150 Kemetco (2016) Slurry Operating pH - Slurry - 9 Kemetco (2016) Slurry Operating pH - Solution - 8.5 Kemetco (2016)

SO2 Consumption - Slurry g SO2/g CNWAD 5:01 Kemetco (2016)

SO2 Consumption - Solution g SO2/g CNWAD 5:01 Kemetco (2016) Zinc Concentration - Slurry mg/L 30 Kemetco (2016) Copper Concentration - Solution mg/L 15 Kemetco (2016) Source: JDS (2016)

13.6 Preliminary Recovery Estimate The recoveries used were estimated based on the methodology discussed in the previous section. Table 13.15 presents the recovery estimates used for economic projections. Table 13.15: Preliminary Recovery Projections

Au Ag Recovery (%) (%) Flotation Recovery 97.7 69.6 Leach Recovery 96.3 82.8 Overall Recovery 94.3 57.6 Source: JDS (2016)

13.7 Future Metallurgical Work Substantial testing has been undertaken on the Curraghinalt mineralization. Additional testing that may be beneficial to the project includes:  Comminution: It is recommended that additional BWi tests are undertaken at a finer closed screen size to confirm energy requirements around the regrind size. It is recommended that coarse beneficiation and ore sorting should be assessed as based on the mineralogy; there is potential for these processes to provide additional value to the project;  Gravity Concentration: The test work undertaken indicates that gravity may not be required to achieve the same overall recovery. Additional confirmation tests should be undertaken on select variability samples to further confirm this;  Flotation: Additional test work at lower dosages of reagent should be undertaken to further refine the operating cost through the next level of engineering. It is suggested that coarse particle flotation should also be assessed as it may reduce footprint and add value to the project;

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 Optimum Grind: The results indicated that a coarse grind of approximately 80% passing 240 µm provided value to the project. Additional test work is recommended to understand the reduced leach recovery when the regrind size is finer than approximately 80% passing 45-50µm;  Cyanide Addition: The test programs to date have focused on developing the preliminary process variables for leaching while attempting to improve gold recovery. There are results indicating a NaCN concentration up to 5,000 ppm might be beneficial in improving metallurgical recoveries and this should be further assessed as cyanide and gold prices vary. As is to be expected when coarse gold is present in the mineralization (as it is with Curraghinalt), there is some variation in the gold assays. It is suggested that sufficient variability test work be undertaken for the flotation/leach process at noted conditions for the Feasibility Study; however, it is recommended that additional study, including screen fire assays and applying the variability data to date utilizing geo-metallurgical techniques, is required to more fully understand the gold recovery relationship and improve gold recovery modelling. Should an alternative flowsheet be assessed or process variables change as determined by future study, it is recommended that additional variability testing be undertaken;  Solid-Liquid Separation: Although there are a number of solid-liquid separation tests, it is highly recommended that in the next phase of engineering, additional solid-liquid testing be undertaken to confirm the thickening, rheology and filtration design parameters. Thickeners have been sized on static settling tests and it would be beneficial to have vendors undertake dynamic testing prior to placing orders to confirm sizing parameters;  Detoxification: Additional oxidation test work should be undertaken to optimize the cyanide detoxification process conditions, including the use of zinc sulphate as a catalyst on the solution detoxification process. If significant changes to the process chemistry are required in the future, particularly if any treated effluent is recycled back into the circuit, additional detoxification testing would be advisable, potentially extending to locked cycle testing of detoxification in combination with CIL testing; and  Bulk Material Handling: In the next phase of engineering, the calculated volumes in stockpiles and material flow characteristics assumed through chutes could be further refined based on results from bulk material test work.

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14 Mineral Resource Estimate

14.1 Introduction This section describes the methodology and summarizes the key assumptions considered to prepare the geology and Mineral Resource model. In the opinion of SRK, the resource evaluation reported herein is a reasonable representation of the global gold Mineral Resources of the Curraghinalt gold deposit at the current level of sampling. The Mineral Resources have been estimated in conformity with the widely accepted CIM Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines and are reported in accordance with the Canadian Securities Administrators’ National Instrument 43-101. Mineral resources are not Mineral Reserves and have not demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserve. The construction of the geology and Mineral Resource model was a collaborative effort between Dalradian and SRK personnel. Vein wireframe modelling was carried out by Dr. Robert Morrison, P.Geo (APGO #1723) MAusIMM (CP# 112012) of Dalradian, with review and auditing of the wireframes by Blair Hrabi, P.Geo (APGO #1723) and Dominic Chartier, P.Geo (OGQ #0874). Structural fault modelling was completed by Mr. Hrabi. Geostatistical analysis, variography, and Mineral Resource modelling were undertaken by Dr. David Machuca, with the assistance of Dr. Oy Leuangthong, P.Eng (PEO # 90563867). All technical work was supervised by Glen Cole, P.Geo (APGO #1416) and Dr. Jean-François Couture, P.Geo (APGO #0197). SRK began reviewing aspects of the Mineral Resource modelling workflow and inputs in September 2015, with the aim to facilitate the audit process and to provide input to the fall 2015/winter 2016 drill program for which Dalradian was preparing. The initial database used for the fall 2015 Mineral Resource review work consisted of 470 core boreholes (98,561 m) and 310 underground channels sampled between 1984 and up to May 2013. This review work consisted of reviewing Dalradian’s capping practices, variography, estimation methodology, and classification criteria. The outcome of this early review laid the foundation for how the Mineral Resource estimation would be constructed following the winter 2016 drilling program. The final database for this Mineral Resource model has an effective date of March 2, 2016, with a total of 586 core boreholes (131,643 m), last included borehole is 16-CT-369, and 497 underground channels sampled (1,863 m). Studio 3 Datamine software (version 6.5) was used by Dalradian to construct the geological solids and the Mineral Resource block model. SRK used a combination of Datamine, Leapfrog, Gocad, and GSLib software to audit the assay data for geostatistical analysis, construct the block model, estimate gold grades, and tabulate Mineral Resources. The Mineral Resource Statement was prepared by Dr. Leuangthong and Dr. Couture, who are independent Qualified Persons pursuant to NI 43-101. The effective date of the Audited Mineral Resource Statement for the Curraghinalt deposit is May 5, 2016. It represents the eighth Mineral Resource evaluation prepared for the Curraghinalt gold project.

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14.2 Resource Database The database used to evaluate the Mineral Resources of the Curraghinalt gold deposit includes 586 core boreholes (131,643 m) and 497 underground channels (1,863 m). The drilling and chip data were acquired by Ennex (1987 – 1999), Tournigan (2003 – 2008), and Dalradian (2010 – 2016). Ennex used BQ-sized equipment for underground drilling and HQ as well as NQ-sized equipment for surface boreholes. Tournigan and Dalradian used HQ and NQ-sized equipment for all boreholes. All three companies used the smaller diameter equipment for drilling in difficult ground conditions. The survey of borehole collars and down-hole surveys for underground boreholes completed by Ennex is undocumented. Collars of surface boreholes completed by Ennex were surveyed initially by chaining from a baseline and later using a total station and GPS receivers of unknown type. Information about down-hole survey methods are unavailable. Collar locations of boreholes completed by Tournigan were surveyed using GPS equipment. The elevations were later adjusted to coincide with a topographic surface generated from a Lidar survey. Down-hole surveys on the first four boreholes completed by Tournigan were carried out with a Tropari instrument; all later boreholes were surveyed with a Reflex multi-shot tool every 6 m. Collars of boreholes completed by Dalradian were surveyed by an independent survey company. Elevations were adjusted to coincide with a Lidar-generated topographic surface. Down-hole surveys were completed with EZ-Trac and Reflex multi-shot tools every 6 m.

14.3 Geological Interpretation and Modelling The bulk of the gold mineralization at Curraghinalt is hosted in narrow, parallel auriferous quartz- carbonate-sulphide veins. Twenty vein wireframes were constructed in Datamine Studio 3 by Dalradian. Related vein wireframes were combined to form 16 resource domains. A summary of the verification conducted by SRK on the vein domains is presented in Section 0. To restrict the impact of very small sample intervals, borehole sample intervals were composited down-hole at 0.5-metre intervals from borehole collars prior to modelling the veins. The domains were modelled on the extents of logged gold mineralized shear veins (D veins), snapped to 0.5- metre fixed length composites. Other vein types such as extensional veins (C veins) can also be auriferous but were only included when immediately adjacent to, or within a modelled D vein interval. The veins were modelled as a solid by combining TIN surfaces for the hanging wall and footwall surfaces, clipped to a specific outline. The veins generally strike west-northwest and dip moderately to steeply to the north northeast at 50 to 65° (Figure 7.6 in Section 7.3.1). The thickness of the veins is predicated by the choice of 0.5- metre composites. The true thickness of the modelled vein wireframes averages 0.73 m but can be as much as 4 m thick. The domains are listed in Table 14.1 with statistics on domain thickness for each domain. The veins are cut by a network of late brittle faults. Each fault is typically narrow, and the vein offset across each fault is usually small. A separate fault model was created but the vein wireframes were not broken across all faults to avoid creating a large number of small domains and considerably complicating resource modelling work.

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The block model includes a grade element for each vein block, including where intersected by a fault. The fault intersection blocks were subsequently reclassified to avoid reporting those blocks as part of the Mineral Resource Statement. Table 14.1: Statistics on Vein Thickness

Domain Vein Vein Thickness (m) Thickness Percentiles (m) Number Name Average Maximum 25th 50th 75th 1 No.1 0.82 4.12 0.59 0.78 1 2 106-16 0.79 3.45 0.55 0.72 0.94 3 V75 0.74 2.25 0.54 0.72 0.89 4 Bend 0.71 2.44 0.49 0.65 0.84 5 Crow 0.9 3.17 0.56 0.73 1.09 6 T17 0.76 3.62 0.5 0.67 0.92 7 Mullan 0.78 3.91 0.48 0.68 0.94 8 Sheep Dip 0.59 2.17 0.46 0.57 0.69 9 Road 0.64 1.69 0.49 0.64 0.78 11 Slap Shot (East, West) 0.61 2.13 0.5 0.55 0.72 12 V55 0.63 2.4 0.46 0.55 0.74 13 Sperrin (East, West) 0.48 2.5 0.37 0.45 0.54 14 Causeway 0.69 3.12 0.5 0.64 0.8 15 Grizzly (East, Mid, and West) 0.56 1.64 0.43 0.51 0.69 16 Slap Shot Splay 0.47 1.27 0.38 0.44 0.54 17 Bend Splay 0.55 2.11 0.41 0.48 0.61 Combined 0.73 4.12 0.49 0.65 0.86

14.3.1 Structural Fault Modelling A three-dimensional fault model was created based on the integration of borehole data, underground mapping, and topographic data with direct observations made during two site visits in 2014 and 2015. The data available for the modelling includes underground mapping, oriented core and televiewer data from 2015-16 boreholes, and core photographs. Overall, the fault model is a complex network consisting of 32 faults divided into three main generations (Figure 14.1). These include:  Fourteen west-northwest-trending, moderately north northeast-dipping brittle-ductile fault zones and related splays that host and are coincident with the mineralized shear (fault-fill) veins at Curraghinalt;  Two major west-trending, moderately to steeply north-dipping brittle-ductile shear zones (the Kiln and Crowsfoot shear zones) that entrain and partly dismember the mineralized veins;

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 Sixteen brittle faults of several orientations that post-date both the mineralized veins/faults and the brittle-ductile shear zones, including: o Three flat to very shallowly dipping faults; o Eleven northeast to north northeast trending faults; o One west-northwest trending brittle fault close in orientation to the vein filled faults; and o One north northeast trending, steeply dipping graphitic fault.

Observations from underground mapping and core include numerous other faults that have not been modelled, either due to their narrow widths, an inability to correlate between adjacent boreholes, or small observed offsets along these faults.

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Figure 14.1: Distribution of Modelled Faults at Curraghinalt

Three-dimensional Leapfrog model of all modelled faults relative to mine infrastructure. Brittle-ductile vein-hosting faults (gold); Kiln and Crowsfoot shear zones (magenta); Northeast, north northeast, and northwest trending brittle faults (dark blue); Flat brittle faults (light blue); Graphitic fault (green).

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The brittle-ductile faults related to the quartz veins generally strike west-northwest (275 – 295°) and dip moderately to steeply (55 – 75°) to the north northeast. Individual strands range between 10 – 75 cm wide but can be part of a series of fault splays up to 10 m wide. The faults related to the veins commonly anastomose and splay along their lengths. Northwest- striking splays off the main trend have been observed to terminate in a series of extensional C veins, and north northwest trending segments hosting gold mineralized D veins can be linked by west striking segments that may or may not contain mineralized veins. The structures hosting the gold mineralized veins are variably developed, with the Bend, V75, and Causeway veins having limited deformation associated with them. Direct observations of movement sense along the gold mineralized faults is limited, but most of the observed kinematic indicators, together with the orientation of the extensional C veins (northwest- striking, steeply northeast-dipping), suggest a sinistral extensional movement sense along these faults. Rare reverse kinematic indicators along the faults indicated a reverse movement sense, suggesting reactivation of the faults has occurred throughout their history. The gold mineralized veins are hosted in a series of related brittle-ductile faults that post-date development of a strong penetrative foliation and associated lineation that is pervasive across the property. The Kiln and Crowsfoot shear zones are potentially long-lived structures with latest movements possibly postdating the gold mineralized veins and related faults. It is clear from observation in the adit and from drill core that the shear zones entrain and dismember the gold mineralized veins and do not simply offset them. The shear zones are not themselves mineralized outside the influence of the veins. The Crow vein and the Crowsfoot shear zone in particular are subparallel for a significant portion of their length. Previous resource models cut all veins across the Kiln Shear zone into hanging wall and footwall segments. The current vein model has been substantially changed from previous versions and the displacement observed in the previous model is not consistently observed in the current wireframe model. As such the vein wireframes were not cut by the Kiln and Crowsfoot shear zones but the rotation and coincidence of some veins along the shear zones is thought to represent the effects of the deformation of the veins along these shear zones. Repeated observations in the adit and drifts make it clear that the dominantly northeast trending brittle faults post-date the gold mineralized veins and offset them, typically on the decimetre scale, with a maximum of 10 m of horizontal separation. The flat faults were also observed to cut and slightly offset the mineralized veins. Observations from underground mapping suggests these faults are discontinuous and there is low confidence in the deeper modelled faults beyond the immediate intersection identified in the boreholes. The confidence in the amount of displacement and the exact geometry of the brittle fault surfaces away from the adit, combined with a relatively small amount offset suggests that cutting all vein wireframes at each brittle fault is not appropriate and implies a level of certainty in their geometry that is not justified. 14.3.2 Pelite Model SRK constructed a lithology model to delineate pelite to assist with geotechnical evaluations of the rock mass quality. The distribution of pelite was modelled using an indicator kriging approach. Composites of 1.0-metre lengths were coded as 1 for pelite if the lithology was coded as Spe (pelite) or Spg (graphitic pelite); all other composites were coded as zeros.

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Indicator variograms were modelled (see Figure 14.2), with continuity orientations that independently confirmed structural geology interpretations. A 5 m by 5 m by 5 m model was kriged to calculate the probability of pelite. Solid wireframes were generated at a 96% probability threshold (i.e., 96% probability to be pelite); this probability threshold was chosen based on declustering the proportion of pelite found within the 1.0-metre composite data used for this exercise. Some moderate cleaning of the wireframes was carried out to remove edge effects from the estimation method and in areas where the drilling is sparse. Figure 14.2: Indicator Variogram for Pelite Identifier

14.4 Specific Gravity Tournigan and Dalradian measured specific gravity on small representative core pieces of selected sample intervals using a water displacement technique. A total of 668 specific gravity measurements are located within the resource domains. The specific gravity data for the domains combined and individually are summarized in Figure 14.3 using a top cut of 3.50 and a bottom cut of 2.46 to remove outliers. For domains with sufficient sample population, the specific gravity value range and mean is consistent between domains, showing that specific gravity can be determined globally. There is insufficient specific gravity data to interpolate in the block model. There is a strong bilinear relationship between sulphide content and density within the domains. Figure 14.4 shows the relationship of sulphur and specific gravity measurements on semi-log cross plot and quantile- quantile plot. Formulas were derived to estimate block density is based on sulphur content:  If sulphur is less than 4.0% : SG=0.033·ln(S) + 2.73;  If sulphur is greater or equal to 4.0 percent: SG=0.195·ln(S) + 2.51.

A total of 1,477 density measurements were taken in waste rock, outside the vein domains. The average specific gravity of waste rock is 2.73.

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Figure 14.3: Specific Gravity Statistics by Domain

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Figure 14.4: Relationship between Sulphur and Specific Gravity

Cross Plot SG vs Sulphur (%)

N = 652 pairs

10.00

1.00 S (%)

0.10

0.01 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 SG

Q-Q Plot SG vs Sulphur (%)

N = 652 pairs

10 SG=0.195·ln(S) + 2.51 SG: 2.78 if S≥4 S (%): 4.0

1 S (%) SG=0.033·ln(S) + 2.73

0.1 if S<4

0.01 2.02.22.42.62.83.03.23.43.63.84.0 SG

Top: Semi-log Cross plot, bottom: Quantile-Quantile plot

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14.5 Resource Estimation Methodology SRK reviewed geology and Mineral Resource evaluation work carried out by Dalradian in September 2015, with the aim to assist Dalradian in the preparation for a new Mineral Resource model. This review was based on the data considered by Micon in 2014 and an additional 85 core boreholes drilled up to August 2015. Of these 85 core boreholes, assay results for only 46 boreholes were available. The resource domains for that review were constructed during the summer of 2015, using 0.5-metre composites calculated down-hole from the borehole collar; this significantly differs from the 2.0-metre composites used in wireframe construction for the resource model used in the PEA. From that review, SRK and Dalradian determined that geostatistical analyses, variography and estimation parameters should be adjusted for each domain separately. Classification criteria were also reviewed as part of the study. Following that interim review, Dalradian completed a substantial infill drilling campaign that included a total of 181 core boreholes (51,479 m) and 185 underground face samples compared to the 2014 resource database. This represents a substantial increase to the database (64% increase in boreholes based on total metre drilled). The following subsections describes the assumptions, process, and decisions made by Dalradian and SRK to construct a new Mineral Resource model to support the ongoing Feasibility Study. 14.5.1 Composite Statistics, and Capping Dalradian composited original sample intervals at 0.50 m from the collar down the hole ignoring geological boundaries. Prior to compositing, there were 92,589 sample intervals averaging 1.4 m in length. This includes 47,915 sample intervals grading 0.01 (g/t gold) and higher at an average length of 0.55 m with a mode of 1.0 m. After compositing, there are 261,436 composites using a mode 1 composite approach in Datamine. This large increase in number composites is largely attributed to the breaking of long, unmineralized intervals into regular 0.5-metre composites. Unsampled or missing intervals were assigned a gold grade of zero. Absent values in veins include missing core, inadequate recovery or fault-disrupted intervals. Dalradian removed 31 core boreholes (Table 14.2), four of which were drilled by Dalradian, including down dip holes and underground holes, prior to compositing in an effort to minimize bias and difficulties in vein interpretation caused by strings of samples in parallel or subparallel directions to a vein plane. These removed boreholes are listed below, and are excluded from the composites database. SRK reviewed the five surface boreholes, and verified that survey issues and borehole orientation presented challenges to their inclusion. SRK understands that the collar information for the 5000 series underground boreholes were not corrected at the time adit position was refined. In general, SRK does not believe the exclusion of these 31 boreholes from the modelling process is material.

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Table 14.2: 31 Excluded Boreholes

Count Borehole ID Count Borehole ID Count Borehole ID Count Borehole ID 1 90-47 9 5170-4 17 5170-12 25 5170-20 2 13-CT-192 10 5170-5 18 5170-13 26 5170-21 3 13-CT-191 11 5170-6 19 5170-14 27 5170-22 4 12-CT-176 12 5170-7 20 5170-15 28 5170-23 5 13-CT-180 13 5170-8 21 5170-16 29 5170-24 6 5170-1 14 5170-9 22 5170-17 30 5170-25 7 5170-2 15 5170-10 23 5170-18 31 5170-26 8 5170-3 16 5170-11 24 5170-19

The 0.5-metre composites used to generate the geology wireframes were extracted within each of the 16 resource domains. Table 14.3 summarizes the uncapped and capped statistics of these composites. SRK analyzed the statistics on the basis of domains and data source, and found that the core and face composites data vary significantly in summary statistics. As such, capping was performed on a by domain basis and considered core and face composites separately.

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Table 14.3: Uncapped and Capped Composite Statistics for Gold

Uncapped Composites* Capped Composites* Domain Domain Name Mean Std Min Max Mean Std Max Count CoV CoV (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) All Composites 1 No.1 Vein 573 15.15 18.22 0 137.1 1.2 14.09 14.28 70 1.01 2 106-16 Vein 518 12.43 15.43 0 162.81 1.24 11.98 13 60 1.09 3 V75 Vein 351 17.37 23.65 0.02 234 1.36 15.84 16.82 90 1.06 4 Bend Vein 136 7.91 14.69 0 142.6 1.86 6.6 7.2 30 1.09 5 Crow Vein (E, W) 190 10.3 15.66 0 123.44 1.52 9.43 11.66 50 1.24 6 T17 Vein 847 24.36 43.33 0 413.6 1.78 21.81 30.9 125 1.42 7 Mullan Vein 257 11.52 18.85 0 198.43 1.64 10.28 11.96 50 1.16 8 Sheep Dip Vein 184 13.18 20.2 0 169.38 1.53 11.09 11.65 40 1.05 9 Road Vein 58 9.66 12.05 0 55.22 1.25 8.34 8.81 25 1.06 11 Slap Shot (E, W) 264 9.14 12.41 0 126.89 1.36 8.51 8.93 35 1.05 12 V55 Vein 119 8.63 16.87 0 144.48 1.96 7.5 10.38 50 1.38 13 Sperrin Vein (E, W) 129 7.04 10.16 0 69.05 1.44 6.74 8.75 40 1.3 14 Causeway 180 10.45 23.85 0 294.54 2.28 8.76 9.59 45 1.09 15 Grizzly Vein (E, M, and W) 120 10.44 14.79 0 103.21 1.42 9.32 10.3 40 1.11 16 Slap Shot Splay Vein 50 8.16 8.65 0 48.44 1.06 7.81 7.26 32 0.93 17 Bend Splay Vein 68 11.17 14.81 0 73.75 1.33 10.18 11.79 40 1.16 Total 4044 14.7 25.87 0 413.6 1.76 13.34 18.58 125 1.39 All Core Composites 1 No.1 Vein 438 13.97 18.16 0 137.1 1.3 12.69 13.14 50 1.04 2 106-16 Vein 483 11.83 15.07 0 162.81 1.27 11.4 12.58 60 1.1 3 V75 Vein 259 13.95 16.91 0.02 123.86 1.21 12.92 12.89 50 1 4 Bend Vein 136 7.91 14.69 0 142.6 1.86 6.6 7.2 30 1.09 5 Crow Vein (E, W) 190 10.3 15.66 0 123.44 1.52 9.43 11.66 50 1.24 6 T17 Vein 425 18.51 35.34 0 372.7 1.91 16.85 24.88 120 1.48 7 Mullan Vein 257 11.52 18.85 0 198.43 1.64 10.28 11.96 50 1.16 8 Sheep Dip Vein 155 12.77 21.22 0 169.38 1.66 11.09 11.65 40 1.05 9 Road Vein 58 9.66 12.05 0 55.22 1.25 8.34 8.81 25 1.06 11 Slap Shot (E, W) 228 8.73 12.89 0 126.89 1.48 8.51 8.93 35 1.05 12 V55 Vein 119 8.63 16.87 0 144.48 1.96 7.5 10.38 50 1.38 13 Sperrin Vein (E, W) 129 7.04 10.16 0 69.05 1.44 6.74 8.75 40 1.3

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Uncapped Composites* Capped Composites* Domain Domain Name Mean Std Min Max Mean Std Max Count CoV CoV (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) 14 Causeway 180 10.45 23.85 0 294.54 2.28 8.76 9.59 45 1.09 15 Grizzly Vein (E, M, and W) 120 10.44 14.79 0 103.21 1.42 9.32 10.3 40 1.11 16 Slap Shot Splay Vein 50 8.16 8.65 0 48.44 1.06 7.81 7.26 32 0.93 17 Bend Splay Vein 68 11.17 14.81 0 73.75 1.33 10.18 11.79 40 1.16 Total 3295 12.16 20.38 0 372.7 1.68 11.03 14.18 120 1.29 All UG Face Composites 1 No.1 Vein 135 18.99 17.88 0.05 103.7 0.94 18.68 16.69 70 0.89 2 106-16 Vein 35 20.72 17.73 2.83 76.2 0.86 20.02 15.78 60 0.79 3 V75 Vein 92 26.91 34.61 0.04 234 1.29 23.97 22.77 90 0.95 4 Bend Vein 5 Crow Vein (E, W) 6 T17 Vein 422 30.3 49.44 0 413.6 1.63 26.83 35.28 125 1.31 7 Mullan Vein 8 Sheep Dip Vein 29 15.45 13.02 0.55 47.37 0.84 15.45 13.02 47.37 0.84 9 Road Vein 11 Slap Shot (E, W) 36 11.75 8.31 3.41 36.94 0.71 11.75 8.31 36.94 0.71 12 V55 Vein 13 Sperrin Vein (E, W) 14 Causeway 15 Grizzly Vein (E, M, and W) 16 Slap Shot Splay Vein 17 Bend Splay Vein Total 749 25.94 40.51 0 413.6 1.56 23.53 29.26 125 1.24 * Std = standard deviation; Min = minimum; Max = maximum; Cov = coefficient of variation

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Probability plots and sensitivity curves were assessed in determining an appropriate capping value. Figure 14.5 shows an example of these plots illustrated for Domain 6 (T17) considering only the core composites.. In addition to gold modelling, SRK was also tasked with estimating sulphur, silver, copper, molybdenum, and arsenic. These secondary metals do not contribute to the economic value of the gold mineralization, but may impact on process recovery or environmental waste management. The density of the gold mineralization varies considerably between samples. Density variation is largely caused by the amount of sulphide present within a domain, SRK used a relationship between sulphur and measured specific gravity to model the distribution of density in the block model. The other metals were not capped, except sulphur that was capped at 20%. Figure 14.5: Probability Plot and Capping Sensitivity Curve for Domain 6 (T17), Core Samples

14.5.2 Variography SRK and Dalradian calculated and modelled variograms for gold in each domain in both September 2015 and in March 2016. Various orientations were considered, including those aligned with the intersection of the C-vein and the domain. While greatest continuity was found aligned with these geological structures, the variograms per domain are highly sensitive to calculation parameters. SRK considers that the confidence in the individual domain variograms is low, particularly for less-informed domains.

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SRK also performed variography on various groupings of domains, but ultimately chose to model a global variogram based on all core composites to ensure consistency and robustness of the grade estimation. The global model was adjusted by domain to align with the geological structure (see Table 14.4). This approach was taken for gold, sulphur, copper, silver, arsenic, and molybdenum. The modelled variograms are summarized in Table 14.5. Figure 14.6 shows the global gold variogram modelled. Table 14.4: Variogram and Search Angle Specification for Each Domain

Datamine Angles (degrees) Domain Names Domain OZ OX OY SAXIS1 = 3 SAXIS2 = 1 SAXIS3 = 2 No.1 Vein 1 323 40 -44 106-16 Vein 2 322 37 -41 V75 Vein 3 320 30 -41 Bend Vein 4 323 43 -39 Crow Vein (E,W) 5 323 42 -37 T17 Vein 6 323 40 -43 Mullan Vein 7 326 49 -46 Sheep Dip Vein 8 324 46 -53 Road Vein 9 323 41 -49 Slap Shot (E,W) - between V75 and 106-16 11 322 38 -41 V55 Vein (Between No 1 and T17) 12 323 42 -48 Sperrin Vein (E,W) - between Mullan and Sheep Dip 13 325 46 -53 Causeway – between 106-16 and No.1 14 324 45 -42 Grizzly (E,W,M) – between T17 and Mullan 15 326 50 -51 Slap Shot Splay – south of Slap Shot East 16 325 48 -46 Bend Splay – North of Bend 17 326 51 -41

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Table 14.5: Summary of Global Variogram Parameters in Datamine Convention

SDIST SDIST SDIST SDIST SDIST SDIST SDIST SDIST SDIST Element Nugget cc Type 1* 2* 3* cc Type 1 2 3 cc Type 1 2 3 (m) (m) (m) (m) (m) (m) (m) (m) (m) Au 0.25 0.4 Exp 10 15 1 0.1 Sph 95 15 2 0.25 Sph 95 95 8 S 0.25 0.45 Exp 10 15 2 0.15 Sph 70 20 5 0.15 Sph 70 95 8 Cu 0.25 0.45 Exp 15 8 2 0.15 Sph 60 18 5 0.15 Sph 60 40 8 Ag 0.25 0.45 Exp 10 5 2 0.2 Sph 80 20 2 0.1 Sph 80 80 5 As 0.25 0.45 Exp 20 10 2 0.15 Sph 75 30 5 0.15 Sph 75 60 7.5 Mo 0.25 0.45 Exp 4 10 2 0.15 Sph 30 30 5 0.15 Sph 120 120 7 * Note that all ranges for an exponential model must be divided by three for Datamine parameter file. Ranges summarized above have not been divided by 3.

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Figure 14.6: Global (inverted) Correlogram for Gold

14.5.3 Block Model Parameters A block model was constructed to cover the entire extent of the gold deposits. Block size was set at 5 m by 5 m by 5 m for parent cells, and subcells at 0.5-metre resolution to honour the geometry of the modelled mineralization. Subcells were assigned the same grade as the parent cell. No rotation was applied. The block model coordinates are based on an Irish Grid TM65. The block model definition is summarized in Table 14.6. Table 14.6: Curraghinalt Block Model Specification

Block Size (metres) Axis Origin* Number of Cells Parent Sub-cell X 5 0.5 256,400 320 Y 5 0.5 385,750 250 Z 5 0.5 -800 220 * Irish Grid TM65

14.5.4 Estimation The block model was populated with a gold value using ordinary kriging, informed by composite data and three estimation runs with progressively relaxed search ellipsoids and data requirements. Table 14.7 summarizes the search parameters used for each estimation pass. Each domain was estimated using a hard boundary approach that is using only the composites from that domain. A pass “zero” was included to allow the use of the underground face samples, within a limited 10-metre radii. Indicator variograms of the face samples were calculated to establish that their continuity is limited to 10 m. All subsequent passes used only the capped core borehole composites.

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Table 14.7: Summary of Estimation Search Parameters

Parameter Pass 0 Pass 1 Pass 2 Pass 3 Interpolation method Ordinary kriging Ordinary kriging Ordinary kriging Ordinary kriging Data set Core + Face Core Core Core Search range X 10m 1 x Var range 2 x Var range 6 x Var range Search range Y 10m 1 x Var range 2 x Var range 6 x Var range Search range Z 10m 15m 30m 90m Minimum number of 5 5 4 1 composites Maximum number of 12 12 15 15 composites Octant search No No No No Maximum number of composites per 3 3 3 3 borehole

14.5.5 Estimation Sensitivity Assessment The final estimation parameters summarized in Table 14.7 were selected after reviewing the results of a series of estimation changes in various parameters (see Table 14.8). This sensitivity analysis was performed on Domain 6 (T17), which was selected because of its volume, data quantity, and types of data available. All cases are compared on the basis of tonnage estimated, average grade, and contained metal at various cut-off grades, with particular interest at zero cut-off and the reporting cut-off grade of 5 g/t gold.

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Table 14.8: SRK Sensitivity Analysis on Estimation Parameters Using Capped Composites from Domain 6 (T17)

Cap Value Search Pass 1 Pass 2 Pass 3 (g/t gold) Ellipse Case Data Max / Pass Core Face Min.* Max.* Min.* Max.* Min.* Max.* Hole* 1** 1 Core + Face 175 175 8 12 6 10 4 8 3 60/80/8 2 Core + Face 175 175 5 12 3 15 1 20 3 60/80/8 3 Core + Face 175 175 11 24 2 24 2 24 3 60/80/8 4 Core + Face 175 175 5 12 4 15 1 15 3 60/80/8 5 Core + Face 80 75 8 12 6 10 4 8 3 40/90/10 6 Core + Face 80 75 5 12 3 15 1 20 3 40/90/10 7 Core + Face 80 75 11 24 2 24 2 24 3 40/90/10 8 Core + Face 80 75 5 12 4 15 1 15 3 40/90/10 9 Core 80 NA 5 12 4 15 2 15 3 80/60/8

10 Core + Face†(5) 80 75 5 12 4 15 2 15 3 80/60/8

11 Core + Face†(10) 80 75 5 12 4 15 2 15 3 80/60/8

Final Core + Face†(10) 120 125 5 12 4 15 1 15 0 95/95/15 †(x) Limiting influence to constrained by x metres * Min refers to minimum number of data; max refers to maximum number of data; max/hole refers to maximum number of composites per borehole ** Search radii for Passes 2 and 3 are two times and six times the first pass search

Cases 1 to 4 considered the combined core and face sample composites, using a capping value of 175 g/t gold, a consistent search ellipsoid, and varied only the data parameters. Cases 5 to 8 considered separate capping for core and face samples at 80 g/t gold and 75 g/t gold, respectively, and a search radii consistent with the variogram modelled from the capped data set. Data specification was varied in the same sequence as Cases 1 to 4. The result of these initial eight cases was to assess the sensitivity of the block estimates to optimistic versus conservative thresholds, data requirements and search radii. The percentage difference between Cases 2 to 4, relative to Case 1, is less than 3% in tonnage, grade and contained metal at zero cut-off. Similar results are found for Cases 6 to 8, relative to Case 5. This suggests that the impact of data selection is immaterial. On the basis of change-of-support validation, Case 8 data parameters were chosen as the final set, thereby requiring at least two boreholes to inform the first two passes. A comparison of the set of Cases 1 to 4 to Cases 5 to 8 show that for the same estimation parameters (e.g., Case 1 versus Case 5), using a lower capping value (with search radii that reflects the capped data set) has less than a 1% and 2% impact on the average grade and contained metal, respectively at zero cut-off. At a cut-off grade of 5 g/t gold, the lower capping threshold reduces contained metal by 1%. It should be noted that capping analysis identified a possible intermediate capping values of 120 g/t gold for core composites and 125 g/t gold for face composites.

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Based on the minimal impact of capping threshold found in this sensitivity study, SRK chose to proceed with the intermediate capping thresholds for grade estimation. Cases 9 to 11 investigated the impact of data sources, and limiting the influence of face samples to within 5 and 10 m of a block. The percentage difference in tonnes, grade and contained metal, of Cases 9 to 11, relative to Case 8, is less than 0.1% at zero cut-off, and less than 0.3% at a 5 g/t gold cut-off grade. The impact of face samples, unconstrained or constrained within a limited radii, is immaterial. SRK chose to use face samples within a 10-metre limited radii in the final estimation strategy. In all 11 cases analyzed, the variogram and search ellipsoid correspond to the capped data used for that estimation scenario. All these considered only the composites within Domain 6. As noted in Section 14.5.2, the global variogram is deemed to be the most reliable and the final estimation strategy for all domains uses this singular model. This is reflected in the final search radii in Table 14.8. 14.5.6 Block Model Validation Following the estimation sensitivity analyses on Domain 6, SRK considered statistical comparisons between ordinary kriging estimates and alternate estimators at a zero cut-off grade for Domain 6. Table 14.9 shows there is less than 3% difference in the contained metal between ordinary kriging, and inverse distance weighting to a power of two and three estimates at a zero cut-off grade. Table 14.9: Comparison of Estimators for Domain 6

Cut-off Grade Estimation Quantity Grade Metal Difference (g/t) Method (x1000 t) (g/t) (oz) in Metal* (%)

0 OK 1,390 10.77 492 ID2 1,390 10.69 478 -2.89% ID3 1,390 10.48 468 -1.96% * At 0 g/t gold cut-off, and relative to the ordinary kriging estimates

SRK also compared the ordinary kriging block model distribution with the declustered, change-of- support corrected distribution of the informing composites for Domain 6. Declustering mitigates the influence of preferential sampling of borehole data. This often results in a distribution of composites whose mean statistic is often comparable to that of the estimated model. Further, a change-of- support correction using the Discrete Gaussian model is applied to account for the volume difference between the composite scale and the final block volume scale. Figure 14.7 shows the quantile- quantile comparison of the gold distribution from the block model and the expected grade distribution following declustering and change-of-support corrections for Domain 6. Overall, the mean grades from the block model is higher than those predicted from declustering. The quantile-quantile plot shows that the block model is appropriately smooth, as predicted by change- of-support.

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Figure 14.7: Quantile-Quantile Comparison of Block Estimates to Declustered Composites for Domain 6

For all domains, SRK validated the block model using a visual comparison of block estimates and informing composites for each domain. Figure 14.8 shows an example of a long section for Domain 6 which compares the composite data to the estimated block grades, and also the estimation pass to the Indicated/Inferred boundary. A swath plot considering all domains was also generated, along easting, northing and elevation using 20-metre intervals (see Figure 14.9). For each swath, SRK compared two composite distributions against the block model: (a) all composites (Figure 14.9, left column), and (b) only the composites from boreholes (Figure 14.9, right column). The swath comparisons clearly show that while the face samples were used for estimation in locally constrained manner, the block model grades are most influenced by the composites from boreholes. As expected, the profile of the block model grade is smoother than that from the composites, but follows along the same general trends.

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Figure 14.8: Longitudinal Section for Domain 6: Comparison of Block Estimates and Informing Composites (top), and Estimation Pass Number to Boundary for Indicated/Inferred Categories (bottom)

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Figure 14.9: Swath Plot Comparison of Block Estimates with All Composites (left column) and Only Borehole Composites (right column) Along Easting (top row), Northing (middle row) and Elevation (bottom row)

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14.6 Classification Criteria used for block classification are: Measured: Blocks estimated in Pass 0, within a 10 m by 10 m by 10 m search radii, requiring a minimum of two boreholes and a minimum of five composites from either core and/or underground face samples. The mean average distance of informing composites for this category is approximately 25 m; on average, seven boreholes inform the blocks in this category. Indicated: Blocks estimated in the first pass above or within a 95 by 95 by 15 m search radii, where the thinnest axis corresponds to the direction of vein thickness, using a minimum of two boreholes. The mean average distance of informing composites for this category is 50 m; on average, these blocks are informed by six boreholes. Inferred: All blocks not classified as Measured or Indicated in the passes above, and all other blocks whose grade was estimated. SRK examined the classification visually by inspecting sections and plans through the block model. SRK concludes that the parameters used to define Measured blocks reasonably reflect estimates that can be considered to be at a high confidence level, material classified as Indicated reflect estimates made with a moderate level of confidence within the meaning of CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014), and all other material is estimated at a lower confidence level. Additionally, SRK applied a post-smoothing filter on the classified material to ensure continuity within the classification categories. In particular, the boundary between Indicated and Inferred is intentionally drawn as parallel or perpendicular to potential underground levels, to facilitate underground mine planning. The modelled veins are cross-cut by a network of late brittle faults. The amount of offset is typically small. To avoid complicating resource modelling work, vein wireframes were not broken across each fault. Some vein wireframes bend around a fault and thus create volumes which do not exist. Further the quality of the rock mass near such faults may pose geotechnical challenges. For these reasons, SRK reclassified the vein blocks in proximity to a fault to avoid reporting those blocks into the Mineral Resource Statement, SRK expanded each of the fault surfaces by 0.5 m in both directions perpendicular to the fault plane to create a fault thickness of 1.0 m. With the exception of the Kiln and Crowsfoot shear zone faults, sub-blocks within all other faults were coded as 99 and remain unclassified. These blocks retain information on all metal and density attributes.

14.7 Mineral Resource Statement CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) define a Mineral Resource as: “[A] concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.”

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The “reasonable prospects for eventual economic extraction” requirement generally implies that quantity and grade estimates meet certain economic thresholds and that Mineral Resources are reported at an appropriate cut-off grade that takes into account extraction scenarios and processing recovery. SRK considers that the Curraghinalt deposit is amenable to underground extraction. Through discussions with Dalradian, SRK considers that it is reasonable to report as underground the Mineral Resources those classified blocks above a cut-off grade of 5.0 g/t gold. This is based on a gold price of US$1,200 per troy ounce and a gold recovery of 95%. SRK delivered to Dalradian a sub-block model with a single classification per block and undiluted gold grade. The Mineral Resource Statement reported herein is based on an undiluted block model, and excludes fault blocks. SRK is satisfied that the Mineral Resources were estimated in conformity with the widely accepted CIM Estimation of Mineral Resource and Mineral Reserve Best Practices Guidelines. The Mineral Resources may be affected by further infill and exploration drilling that may result in increases or decreases in subsequent Mineral Resource estimates. The Mineral Resources may also be affected by subsequent assessments of mining, environmental, processing, permitting, taxation, socio- economic, and other factors. The Mineral Resource Statement for the presented in Table 14.10 was prepared by Dr. Oy Leuangthong, P.Eng (PEO#90563867) and Dr. Jean-François Couture, P.Geo (APGO#0196). Drs. Leuangthong and Couture are independent Qualified Persons as this term is defined in NI 43-101. The effective date of the Mineral Resource Statement is May 5, 2016.

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Table 14.10: Mineral Resource Statement*, Curraghinalt Gold Project, Northern Ireland, SRK Consulting (Canada) Inc., May 5, 2016

Measured Indicated Inferred Avg. Tonnage Rock Thickness Grade Au Au Metal Tonnage Grade Au Metal Tonnage Grade Au Metal Domain † Code (m) (g/t) (000 oz) † (000 t) Au (g/t) (ʹ000 oz) †(ʹ000 t) Au (g/t) (ʹ000 oz) (ʹ000 t) No.1 1 0.82 7 17.11 4 762 12.69 311 292 16.09 151 106-16 2 0.79 2 22 1 960 11.97 369 601 12.07 233 V75 3 0.74 5 22.18 3 492 13.06 207 1,085 9.57 334 Bend 4 0.71 203 7.74 50 779 7.39 185 Crow 5 0.9 393 12.53 158 1,329 9.52 407 T17 6 0.76 12 37.94 15 697 13.89 311 481 8.78 136 Mullan 7 0.78 512 10.61 175 902 10.41 302 Sheep Dip 8 0.59 1 15.12 0 248 11.23 90 715 11.76 270 Road 9 0.64 125 8.63 35 449 9.42 136 Slap Shot 11 0.61 1 12.17 0 347 9.21 103 179 9.82 57 V55 12 0.63 127 7.92 32 41 11.31 15 Sperrin 13 0.48 182 8.48 50 126 8.87 36 Causeway 14 0.69 255 9.99 82 20 11.46 7 Grizzly 15 0.56 158 11.48 58 92 9.34 28 Slap Shot Splay 16 0.47 28 6.93 6 20 6.24 4 Bend Splay 17 0.55 96 10.63 33 20 9.34 6 Total 0.73 28 26.99 25 5,583 11.53 2,069 7,130 10.06 2,306

* Mineral resources are not Mineral Reserves and have not demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. Underground Mineral Resources are reported at a cut-off grade of 5.0 g/t gold based on a gold price of US$1,200 per ounce and a gold recovery of 95 percent. † Tonnage was calculated using a density formula defined by SRK based on sulphur estimates.

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14.8 Grade Sensitivity Analysis The Mineral Resources of Curraghinalt are sensitive to the selection of the reporting cut-off grade. To illustrate this sensitivity, block model quantities and grade estimates at various cut-off grades are presented in Table 14.11 and grade tonnage curves are presented in Figure 14.10. Table 14.11: Global Block Model Quantities and Grade Estimates* at Various Cut-Off Grades

Measured Indicated Inferred Cut-off Au (g/t) Quantity Grade AuMetal Quantity Grade AuMetal Quantity Grade AuMetal (ʹ000 t) Au(g/t) (ʹ000 oz) (ʹ000 t) Au(g/t) (ʹ000 oz) (ʹ000 t) Au(g/t) (ʹ000 oz)

0.01 32 24.2 25 6,455 10.45 2,168 8,254 9.18 2,435 1 31 24.89 25 6,430 10.49 2,168 8,233 9.2 2,434 2 30 25.65 25 6,369 10.57 2,165 8,081 9.35 2,428 3 30 26.05 25 6,226 10.76 2,153 7,975 9.44 2,420 4 29 26.52 25 5,936 11.11 2,120 7,676 9.67 2,386 5 28 26.99 25 5,583 11.53 2,069 7,130 10.06 2,306 6 28 27.41 25 5,102 12.09 1,984 6,437 10.55 2,183 7 27 28.11 24 4,582 12.73 1,875 5,582 11.17 2,004 8 26 28.53 24 4,017 13.46 1,739 4,514 12.03 1,746 9 26 28.99 24 3,463 14.26 1,587 3,604 12.92 1,498 10 25 29.64 24 2,947 15.09 1,430 2,925 13.73 1,291 * The reader is cautioned that the figures in this table should not be misconstrued with a Mineral Resource Statement. The figures are only presented to show the sensitivity of the block model estimates to the selection of a cut-off grade.

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Figure 14.10: Grade Tonnage Curves

14.9 Grade Sensitivity Analysis At the request of Dalradian, SRK considered the impact of dilution on the gold grade within each modelled domain. Specifically, this involved the evaluation of Mineral Resources at a minimum of 1.0 m, 1.2 m, and 1.8 m true widths. For each case, SRK also considered the impact of assigning a grade or not to the waste dilution. To estimate a gold grade into the waste blocks, SRK capped all waste composites at 3.0 g/t gold and used an inverse distance weighting (power of three) algorithm. Search orientations and ranges were consistent with the second pass estimation within the mineralized veins (Table 14.7), with the exception of the minor axis search which was specified as 20 m. For a minimum of 1.0 m true width of the mineralized veins, Table 14.12 and Table 14.13 summarize the impact of dilution when waste blocks are assigned a zero grade and an estimated grade, respectively.

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Table 14.12: Impact of Dilution for Minimum 1.0 Metre Thickness, Assuming Zero Grade in Waste

Measured Indicated Inferred

Au Domain Rock Code Tonnage† Grade Au Metal Tonnage† Grade Au Metal Tonnage† Grade Au Metal (ʹ000 t) Au (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 (ʹ000 t) Au (g/t) (ʹ000 oz) oz) No.1 1 8 14.42 4 852 10.77 295 327 13.91 146 106-16 2 2 18.36 1 972 10.96 342 663 9.89 211 V75 3 6 19.23 3 546 11.16 196 1,019 8.41 276 Bend 4 124 7.77 31 639 6.81 140 Crow 5 366 11.42 135 1,214 9.3 363 T17 6 13 36.05 15 763 12.01 295 372 8.59 103 Mullan 7 456 9.81 144 829 9.53 254 Sheep Dip 8 1 12.16 0 271 8.74 76 923 8.15 242 Road 9 104 7.16 24 483 7.57 118 Slap Shot 11 1 10.3 0 325 7.71 81 198 7.16 46 V55 12 79 7.54 19 48 8.7 14 Sperrin 13 113 8.03 29 97 6.68 21 Causeway 14 223 9.17 66 21 10.07 7 Grizzly 15 154 9.47 47 87 8.04 22 Slap Shot Splay 16 12 6.52 2 5 6.23 1 Bend Splay 17 62 8.74 17 8 8.37 2 Total 31 24.18 24 5,421 10.32 1,799 6,932 8.81 1,964 % Dif. To Undiluted 10% -10% -1% -3% -10% -13% -3% -12% -15% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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Table 14.13: Impact of Dilution for Minimum 1.0 Metre Thickness, with Estimated Grade in Waste

Measured Indicated Inferred

Domain Rock Tonnage† Grade Au Metal Tonnage† Grade Au Au Metal Tonnage† Grade Au Au Metal Code (ʹ000 t) Au (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz) No.1 1 8 14.38 4 856 10.78 297 328 13.89 147 106-16 2 2 18.48 1 977 10.95 344 665 9.9 212 V75 3 6 19.29 3 548 11.16 197 1,029 8.41 278 Bend 4 125 7.76 31 645 6.81 141 Crow 5 370 11.4 136 1,217 9.29 364 T17 6 13 35.85 15 765 12.01 296 375 8.58 103 Mullan 7 459 9.8 145 833 9.52 255 Sheep Dip 8 1 11.94 0 272 8.76 77 928 8.16 243 Road 9 106 7.14 24 485 7.58 118 Slap Shot 11 1 10.12 0 328 7.72 81 200 7.17 46 V55 12 81 7.52 20 49 8.71 14 Sperrin 13 114 8.03 29 97 6.69 21 Causeway 14 224 9.17 66 21 10.09 7 Grizzly 15 155 9.45 47 87 8.04 23 Slap Shot Splay 16 12 6.51 2 5 6.2 1 Bend Splay 17 63 8.71 18 8 8.37 2 Total 32 24.02 25 5,454 10.31 1,808 6,970 8.81 1,974 % Dif. To Undiluted 12% -11% -1% -2% -11% -13% -2% -12% -14% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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For a minimum of 1.2 m true width of the mineralized veins, Table 14.14 and Table 14.15 summarize the impact of dilution when w aste blocks are assigned a zero grade and an estimated grade, respectively. Table 14.14: Impact of Dilution for Minimum 1.2 m Thickness, Assuming Zero Grade in Waste

Measured Indicated Inferred

Rock Au Au Au Domain Code Tonnage† Grade Metal Tonnage† Grade Metal Tonnage† Grade Metal

(ʹ000 t) Au (g/t) (ʹ000 (ʹ000 t) Au (g/t) (ʹ000 (ʹ000 t) Au (g/t) (ʹ000 oz) oz) oz) No.1 1 8 13.41 4 862 10.07 279 331 13.21 141 106-16 2 2 17.07 1 969 10.46 326 669 9.07 195 V75 3 7 15.34 3 574 10.2 188 929 8.01 239 Bend 4 102 7.72 25 519 6.65 111 Crow 5 345 11.19 124 1,174 9.05 342 T17 6 14 32.34 15 787 11.22 284 318 8.52 87 Mullan 7 431 9.54 132 759 9.36 228 Sheep Dip 8 1 10.25 0 259 8.14 68 901 7.39 214 Road 9 84 6.91 19 444 6.94 99 Slap Shot 11 1 9.36 0 291 7.23 68 163 6.74 35 V55 12 70 7.21 16 49 7.81 12 Sperrin 13 98 7.75 24 71 6.41 15 Causeway 14 201 8.9 58 22 9.13 7 Grizzly 15 147 8.82 42 83 7.32 20 Slap Shot Splay 16 9 6.2 2 3 5.96 1 Bend Splay 17 57 8.76 16 7 8.5 2 Total 34 21.63 24 5,285 9.83 1,670 6,443 8.43 1,747 % Dif. To Undiluted 20% -20% -4% -5% -15% -19% -10% -16% -24% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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Table 14.15: Impact of Dilution for Minimum 1.2 Metre Thickness, with Estimated Grade in Waste

Measured Indicated Inferred Au Au Domain Rock Tonnage† Grade Au Metal Tonnage† Grade Metal Tonnage† Grade Metal Code (ʹ000 t) Au (g/t) (ʹ000 oz) (ʹ000 t) Au (g/t) (ʹ000 (ʹ000 t) Au (g/t) (ʹ000 oz) oz) No.1 1 9 13.11 4 872 10.06 282 334 13.18 141 106-16 2 2 17.26 1 977 10.45 328 676 9.07 197 V75 3 7 15.41 3 578 10.2 190 942 8 242 Bend 4 103 7.71 26 526 6.65 112 Crow 5 350 11.15 125 1,178 9.05 343 T17 6 14 32.32 15 792 11.21 285 322 8.51 88 Mullan 7 435 9.52 133 765 9.33 230 Sheep Dip 8 1 10.57 0 262 8.15 69 910 7.39 216 Road 9 85 6.9 19 447 6.95 100 Slap Shot 11 1 9.48 0 297 7.22 69 166 6.75 36 V55 12 71 7.21 16 50 7.83 13 Sperrin 13 99 7.75 25 72 6.41 15 Causeway 14 204 8.88 58 22 9.15 7 Grizzly 15 149 8.81 42 83 7.34 20 Slap Shot Splay 16 9 6.18 2 3 5.95 1 Bend Splay 17 58 8.71 16 7 8.5 2 Total 35 21.48 24 5,340 9.81 1,685 6,503 8.43 1,762 % Dif. To Undiluted 22% -20% -3% -4% -15% -19% -9% -16% -24% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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For a minimum of 1.8 m true width of the mineralized veins, Table 14.16 and Table 14.17 summarize the impact of dilution when w aste blocks are assigned a zero grade and an estimated grade, respectively. To determine a 1.8 m width, SRK considered the revised wireframes from the 1.2 m case, and expanded the wireframe on the footwall side by 0.2 m, and on the hanging wall side by 0.4 m . This case was appended to the original sensitivity study, and no density revision was required. Table 14.16: Impact of Dilution for Minimum 1.8 m Thickness, Assuming Zero Grade in Waste

Measured Indicated Inferred

Rock Domain Tonnage† Grade Au Au Metal Tonnage† Grade Au Au Metal Tonnage† Grade Au Au Metal Code (ʹ000 t) (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz) No.1 1 10 10.77 3 797 8.52 218 358 10.78 124 106-16 2 3 12.85 1 977 8.65 272 574 7.68 142 V75 3 8 12.53 3 603 8.07 156 678 6.88 150 Bend 4 60 7.24 14 224 5.84 42 Crow 5 297 10.24 98 1,066 7.77 266 T17 6 17 26.7 15 838 9.05 244 244 7.48 59 Mullan 7 371 8.38 100 632 8.24 167 Sheep Dip 8 1 8.22 0 191 6.99 43 565 6.32 115 Road 9 41 6.13 8 195 6.38 40 Slap Shot 11 1 7.55 0 163 6.31 33 67 6.11 13 V55 12 41 6.23 8 38 6.43 8 Sperrin 13 69 6.67 15 22 5.9 4 Causeway 14 155 7.93 39 22 7.23 5 Grizzly 15 114 7.79 28 52 6.22 10 Slap Shot Splay 16 2 5.73 0 0 5.15 0 Bend Splay 17 52 6.94 12 4 5.73 1 Total 41 17.74 23 4,771 8.4 1,289 4,743 7.52 1,147 % Dif. To Undiluted 42% -34% -6% -15% -27% -38% -33% -25% -50% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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Table 14.17: Impact of Dilution for Minimum 1.8 Metre Thickness, with Estimated Grade in Waste

Measured Indicated Inferred

Rock Domain Tonnage† Grade Au Au Metal Tonnage† Grade Au Au Metal Tonnage† Grade Au Au Metal Code (ʹ000 t) (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz) (ʹ000 t) (g/t) (ʹ000 oz)

No.1 1 10 10.78 4 822 8.5 225 362 10.79 126 106-16 2 3 12.99 1 995 8.66 277 590 7.66 145 V75 3 8 12.64 3 616 8.08 160 696 6.89 154 Bend 4 61 7.23 14 237 5.83 44 Crow 5 308 10.15 101 1,078 7.79 270 T17 6 17 26.32 15 849 9.05 247 251 7.48 60 Mullan 7 377 8.38 102 639 8.22 169 Sheep Dip 8 2 8.24 0 198 6.98 44 579 6.31 118 Road 9 41 6.15 8 200 6.38 41 Slap Shot 11 1 7.48 0 168 6.31 34 71 6.1 14 V55 12 43 6.27 9 39 6.46 8 Sperrin 13 70 6.69 15 23 5.91 4 Causeway 14 158 7.93 40 22 7.32 5 Grizzly 15 115 7.81 29 54 6.23 11 Slap Shot Splay 16 2 5.71 0 0 5.16 0 BendSplay 17 53 6.97 12 4 5.76 1 Total 42 17.53 24 4,877 8.4 1,317 4,845 7.51 1,170 % Dif. To Undiluted 48% -35% -4% -13% -27% -36% -32% -25% -49% † For mineralized blocks, tonnage was calculated using a density formula defined by SRK based on sulphur estimates. For waste blocks, a specific gravity of 2.73 was assigned.

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14.10 Comparison with Previous Mineral Resource Statement Table 14.18 compares the January 2014 with the May 2016 Mineral Resource Statements. Overall, there has been a significant increase in the Measured and Indicated contained metal with a slight reduction in Inferred contained metal. While Measured quantities remain negligible in 2016, the Indicated Mineral Resource contained metal has more than doubled. Most of this change may be attributed to the significant change in the borehole database, with 51,480 m of drilling executed since May 2013 (cut-off date of drilling for 2014 model). This represents a 64% increase to the borehole database. This new information improves the confidence in the continuity of the gold mineralization and the classification. Furthermore in 2016, the mineralized domains were interpreted and modelled based on 0.5-metre composites instead of the 2.0-metre composites in 2014. This significantly impacts interpreted vein thickness. From an accounting perspective, the three Attagh domains from 2014 are excluded, yet the overall number of veins considered in 2016 increased to 16 veins from 12 veins in 2014. SRK notes that while the total classified quantity of material above cut-off has increased by only 16%, the narrower definition of veins has allowed for less dilution and contributes to increasing the average grade by 9% for all classes of material. This combination of increased tonnage and increased grades yields an overall increase in contained gold by 26%. The infill drilling conducted in 2015 successfully upgraded the classification of material that was previously classified as Inferred into an Indicated category, while improving the overall confidence in the geological continuity of the modelled mineralization.

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Table 14.18: Comparison between January 2014 and May 2016 Mineral Resource Statements

Percentage Difference Jan-14 May-16 Jan. 2014 to May 2016 Gold Contained Gold Contained Gold Contained Class Quantity Grade Gold Quantity Grade Gold Quantity Grade (g/t) Gold (%) (%) (%) (kt) (g/t) (koz) (kt) (koz)

Measured 23 20.15 15 28 26.99 25 22 34 64 Indicated 2,976 10.34 989 5,583 11.53 2,069 88 11 109 Meas + Ind 3,000 10.42 1,004 5,611 11.61 2,094 87 11 109 Inferred 8,006 9.67 2,488 7,130 10.06 2,306 -11 4 -7

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15 Mineral Reserve Estimates

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study (PFS). This Feasibility Study includes adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. Mineral Reserves are those parts of Mineral Resources, which, after the application of all mining factors, result in an estimated tonnage, and grade that is the basis of an economically viable project. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the economic mineralized rock and delivered to the treatment plant or equivalent facility. The term “Mineral Reserve” need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals. Mineral Reserves are subdivided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve. The reserve classifications used in this report conform to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classification of NI 43-101 resource and reserve definitions and Companion Policy 43-101CP. These are listed below. A “Proven Mineral Reserve” is the economically mineable part of a Measured Mineral Resource demonstrated by at least a PFS. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. Application of the Proven Mineral Reserve category implies that the QP has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability. A “Probable Mineral Reserve” is the economically mineable part of an Indicated Mineral Resource, and in some circumstances a Measured Mineral Resource, demonstrated by at least a PFS. The study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

15.1 Cut-off Grade Criteria Mining reserve values were calculated from resource block model tonnes and grades to define a gold cut-off grade (COG) to determine the mineable portions of the Curraghinalt deposit. Mineable stopes and drifts were defined based on COG values greater than 5.0 g/t Au after dilution and mining recoveries are applied. Some lower value or incremental material, less than 5.0 g/t Au, is also included in the mining reserve. The incremental material is predominately development ore that had to be excavated to mine the stope in its vicinity. The parameters used for the calculation were based on the data shown in Table 15.1.

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Table 15.1: Cut-off Grade Criteria

Item Unit Value Gold Price US$/oz 1,200 Payable Metal % Au 99.8 Refining/Transportation US$/oz 6.00 Royalty US$/oz 71.50 Total Operating Cost US$/t milled 165.00 Process Recovery % 94.00 Source: JDS (2017)

15.2 Dilution Three types of dilution were applied to the stope and development designs:  External dilution – Additional material that is mined outside of the mineralized vein;  Backfill dilution – run of mine (ROM) waste, and/or paste back fill expected to fall into the stope being mined from adjacent stopes and/or inadvertently scraped off the stope floors during mucking; and  Fault dilution – Additional material that is outside the mineralized vein based on the potential faulting in the stope.

15.2.1 External Dilution External dilution estimates have been defined by geotechnical rock mass domains, stope strike length & dip, and mining method. The dilution estimates are based on Curraghinalt test stoping results, and expected unplanned dilution from historical data or the Equivalent Linear Overbreak/Slough (ELOS) method. Geotechnical rock mass domains have been defined by SRK for each mineralized vein and based on rock conditions, and not only lithology. The rock mass domains are:  Good (1-Green): Strong rock with moderate to low foliation and jointing;  Moderate (2-Yellow): Competent rock with moderate to strong foliation and jointing;  Moderate/Poor (3-Pink): A subset of Moderate/Poor; and  Poor (4-Red): Weak or broken rock with low RQD and/or intact strength.

The geotechnical rock mass domains are discussed in more detail in Section 16.3. Dilution estimates for sub-level and uppers longhole stoping are summarized in Table 15.2 to Table 15.8.

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Table 15.2: Longhole Dilution – Green Rock Mass Domain

Strike Length Dip Class Level Spacing HW Dilution FW Dilution Total Dilution (m) (°) (m) (m) (m) (m) 15 < 60 18 0.37 0.18 0.55 15 60 – 70 18 0.33 0.17 0.50 15 > 70 18 0.23 0.12 0.35 20 < 60 18 0.40 0.20 0.60 20 60 – 70 18 0.37 0.18 0.55 20 > 70 18 0.27 0.13 0.40 Source: JDS (2016)

Table 15.3: Longhole Dilution – Yellow Rock Mass Domain (with cable bolts)

Strike Length Dip Class Level Spacing HW Dilution FW Dilution Total Dilution (m) (°) (m) (m) (m) (m) 15 < 60 18 0.63 0.32 0.95 15 60 – 70 18 0.50 0.25 0.75 15 > 70 18 0.43 0.22 0.65 20 < 60 18 0.73 0.37 1.10 20 60 – 70 18 0.63 0.32 0.95 20 > 70 18 0.57 0.28 0.85 Source: JDS (2016)

Table 15.4: Longhole Dilution – Pink Rock Mass Domain (with cable bolts)

Strike Length Dip Class Level Spacing HW Dilution FW Dilution Total Dilution (m) (°) (m) (m) (m) (m) 15 < 60 18 0.68 0.34 1.02 15 60 – 70 18 0.62 0.31 0.93 15 > 70 18 0.55 0.28 0.83 20 < 60 18 0.88 0.44 1.32 20 60 – 70 18 0.83 0.42 1.25 20 > 70 18 0.78 0.39 1.17 Source: JDS (2016)

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Table 15.5: Longhole Uppers Dilution – Green Rock Mass Domain

Level Strike Length Dip Class HW Dilution FW Dilution Total Dilution Spacing/Height (m) (°) (m) (m) (m) (m) 8 < 60 10 0.19 0.09 0.28 8 60 – 70 10 0.17 0.08 0.25 8 > 70 10 0.12 0.06 0.18 15 < 60 10 0.25 0.13 0.38 15 60 – 70 10 0.23 0.11 0.34 15 > 70 10 0.16 0.08 0.24 Source: JDS (2016)

Table 15.6: Longhole Uppers Dilution – Yellow Rock Mass Domain

Level Strike Length Dip Class HW Dilution FW Dilution Total Dilution Spacing/Height (m) (°) (m) (m) (m) (m) 8 < 60 10 0.29 0.14 0.43 8 60 – 70 10 0.25 0.13 0.38 8 > 70 10 0.22 0.11 0.33 15 < 60 10 0.39 0.19 0.58 15 60 – 70 10 0.34 0.17 0.51 15 > 70 10 0.30 0.15 0.45 Source: JDS (2016)

Table 15.7: Longhole Uppers Dilution – Pink Rock Mass Domain

Level Strike Length Dip Class HW Dilution FW Dilution Total Dilution Spacing/Height (m) (°) (m) (m) (m) (m) 8 < 60 10 0.47 0.24 0.71 8 60 – 70 10 0.38 0.19 0.57 8 > 70 10 0.29 0.15 0.44 Source: JDS (2016)

Table 15.8: Longhole Uppers Dilution - Red Rock Mass Domain

Level Strike Length Dip Class HW Dilution FW Dilution Total Dilution Spacing/Height (m) (°) (m) (m) (m) (m) 8 All dips 10 0.63 0.32 0.95 Source: JDS (2016)

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Cut & fill and sub-level development are completed by resue mining, where ore and waste are mined separately to minimize dilution from the development and long hole method. Resue mining is described in Section 16.5.2. Dilution estimates for cut & fill and development based on a 0.7 m minimum ore mining width is summarized in Table 15.9. Table 15.9: Cut & Fill and Development Dilution

HW Dilution FW Dilution Total Dilution Total Dilution Rock Mass Domain (m) (m) (m) (%) Green 0.04 0.04 0.08 10 Yellow 0.04 0.04 0.08 10 Pink 0.05 0.05 0.10 15 Red 0.07 0.07 0.14 20 Source: JDS (2016)

All external dilution is expected to carry a gold grade of 0.5 g/t based on the analysis completed by SRK in their “Waste Grade – Curraghinalt Resource Model” Memo dated October 28, 2016. An additional 0.1 m of ‘floor’ dilution at zero grade has been added to sub-level development, to account for some residual waste taken during the ore portion of resue mining in the ultimate 3.5 m H x 4.6 m W drift. 15.2.2 Backfill Dilution Backfill dilution is summarized by mining method in Table 15.10 and carries no gold grade. Table 15.10: Backfill Dilution

Floor Fill Dilution Vertical Fill Dilution Mining Method (m) (m) Longhole 0.20 0.50 Longhole Uppers & Pillars 0.10 0.50 Cut & Fill 0.10 N/A Source: JDS (2016)

Additional sources of dilution include Inferred resource dilution. Any Inferred resource class material within the mining reserve stope and development shapes has been treated as waste and has been assigned zero metal grades. Inferred dilution comprises approximately 8,145 t or 0.16% of the reserve respectively. The total external, backfill and Inferred dilution is approximately 21% of the total mining reserve.

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Table 15.11: Mine Reserves and Dilution

Cut-off Diluted Average Diluted Gold Overbreak Mining Method Grade Tonnes Grade Ounces Dilution Percent

(g/t) (t) (g/t) (Oz. Au) (%)

Longhole 5 1,584,580 8.44 429,863 25 Uppers 5 1,353,706 6.99 304,419 25 Pillars 5 501,465 6.33 102,055 35 Cut & fill (C&F) 3 907,322 9.99 291,543 12 Slash Development - 892,167 10.81 309,963 11 TOTAL 5,239,240 8.54 1,437,842 21 Previously Mined 4,142 8.54 1,074 Material

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15.2.3 Fault Dilution Fault dilution estimates have been defined by the percentage of red geotechnical rock mass domains in green and yellow geotechnical rock mass domains. The additional dilution is due to faulting which has the potential to impact the estimated ELOS dilution. Stope strike length & dip and mining method are not relevant to the fault dilution, as Section 15.2.1 addresses external dilution, and the fault dilution is in addition to the external dilution. An example of faulting within a stope is illustrated in Figure 15.1. Approximately 20% of the green stope is the red geotechnical domain. Therefore, an additional 0.20 m of dilution is added to the external dilution. The fault material does carry a gold grade of 0.5 g/t. Fault dilution is summarized in Table 15.12 based on the curves in Figure 15.2. Figure 15.1: Green Stopes with Faulting

Source: JDS (2016)

Table 15.12: Longhole Stoping Additional Dilution Due to Faulting

Red Percentage Green Domain Yellow Domain (%) (m) (m) 0 0.00 0.00 10 0.11 0.20 20 0.20 0.36 30 0.28 0.48 40 0.35 0.56 50 0.40 0.60 Source: JDS (2016)

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Figure 15.2: Longhole Stoping Additional Dilution Due to Faulting

Additional Dilution Due to Faulting 1 0.9 0.8 (m) 0.7 y = ‐2x2 + 2.2x 0.6 Dilution

0.5 0.4 0.3 y = ‐0.6667x2 + 1.1333x Additional 0.2 0.1 0 0% 10% 20% 30% 40% 50% 60% Precent Red Tonnes

Yellow Estimated Green Estimated Poly. (Yellow Estimated) Poly. (Green Estimated)

Source: JDS (2016)

15.3 Mining Recovery Mining or extraction recovery is a function of mineralized material left behind due to operational constraints typical in the mining process. The longhole mining method is largely dependent on the accuracy of longhole drilling and explosive detonation to properly fracture the ore. Where holes deviate from the ore limits, some material will remain hung up and may never report to the stope floor for recovery. Lesser factors considered to affect recoveries in longhole mining include ragged mucking floors, limited visibility for remote mucking and operator error. Mining recoveries by mining type and rock mass domain have been applied based on industry norms as well as JDS operational experience in stopes and drifts of similar size and dip and are summarized in Table 15.13.

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Table 15.13: Mining Recoveries

Mining Recovery Mining Method Rock Mass Domain (%) Longhole Green/Yellow 95 Longhole Pink 90 Longhole Uppers & Pillars Green/Yellow 95 Longhole Uppers & Pillars Pink 90 Longhole Uppers & Pillars Red 85 Cut & Fill All 95 Sub-level Development All 95 Source: JDS (2016)

15.4 Mineral Reserve Estimates The mining stope and sub-level designs with external & backfill dilution and ore recovery factors applied determined the Mineral Reserve estimate shown in Table 15.14. Table 15.14: Curraghinalt Mineral Reserve Estimate

Diluted Au Au Ag Ag

Tonnes Grade Ounces Grade Ounces Category (kt) (g/t) (koz) (g/t) (koz) Proven 28 18.93 17 10.0 9 Probable 5,211 8.48 1,421 3.9 655 TOTAL 5,239 8.54 1,438 3.9 664 Notes: The QP for the Mineral Reserve estimate is Michael Makarenko, P. Eng., of JDS Energy & Mining Inc. Mineral Reserves were estimated using a $1,200 /oz gold price and gold cut-off grade of 5.0 g/t. Other costs and factors used for gold cut-off grade determination were mining, process and other costs of $165 /t, transport and treatment charges of $6.00 /oz Au. A royalty of $71.50 /oz Au and a gold metallurgical recovery of 94% were assumed. Silver was not used in the estimation of cut-off grades but is recovered and contributes to the revenue stream. Tonnages are rounded to the nearest 1,000 t, gold grades are rounded to two decimal places, and silver grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained gold and silver are reported as thousands of troy ounces. Rounding as required by reporting guidelines may result in summation differences Source: JDS (2016)

The Mineral Reserves identified in Table 15.14 comply with CIM definitions and standards for a NI 43-101 Technical Report. Detailed information on mining, processing, metallurgical, and other relevant factors are contained in the followings sections of this report and demonstrate, at the time of this report, that economic extraction is justified. This study did not identify any mining, metallurgical, infrastructure or other relevant factors that may materially affect the estimates of the Mineral Reserves or potential production.

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16 Mining Methods

16.1 Introduction The mine design and planning for Dalradian is based on the resource model completed by SRK in 2016, as detailed in Section 14 of this report. Three underground mining methods were selected for Dalradian; sub-level longhole open stoping (LH), cut & fill (C&F), and longhole uppers (LHUP). Mining method selection was driven primarily by geotechnical rock quality, vein geometry, and vein continuity. Unless geotechnical and geometry characteristics required either C&F or uppers, longhole mining was the preferred mining method due to higher productivities and lower mining costs compared to either C&F or LHUP.

16.2 Deposit Characteristics “The Curraghinalt gold deposit is a high grade orogenic gold deposit characterized by a series of west-northwest trending, moderately to steeply dipping, stacked quartz-carbonate-sulphide veins and arrays of narrow and short extension veinlets. The Mineral Resource model discussed herein focusses on 16 prominent gold-bearing quartz veins. Subordinate auriferous quartz veins exist between the main modelled veins, but their continuity is difficult to demonstrate at the current drilling spacing. The quartz-carbonate-sulphide vein system was investigated by core drilling and is partly exposed in underground workings. The veins range from a few centimetres to over 4.4 m wide. The veins have been traced from surface to a depth of approximately 1,200 m. They remain open along strike and at depth. On average, the quartz veins dip between 55° and 75° to the north. The Mullaghcarn Formation is host to the Curraghinalt gold deposit and consists predominantly of semi-pelites and psammites with subordinate pelite horizons and chloritic semi-pelites, bounded to the south by the Omagh Thrust Fault, a moderately northwest dipping thrust fault active as late as the Carboniferous.”

16.3 Geotechnical Analysis and Recommendations 16.3.1 Mine Geotechnical SRK undertook a substantial geotechnical evaluation program on the Curraghinalt project that included a geotechnical field investigation program designed to characterize the rock geotechnical conditions and support the underground mine and infrastructure design, structural geology review, a detailed evaluation of geotechnical design domains, and the development of geotechnical design guidelines within each of these domains. These guidelines included excavation design parameters, estimates of dilution, as well as support requirements. This was followed by a numerical modelling assessment of the proposed extraction sequence, as well as the potential for surface subsidence. The various elements of the geotechnical evaluation program and their findings are discussed in more detail below.

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16.3.1.1 Field Program The geotechnical field data acquisition program was completed as two drilling campaigns during the summer and winter of 2015. SRK staff was on-site for the duration of the field program, and was responsible for data collection, training, quality assurance and quality control, and general program management. Basic geotechnical core logging was implemented for all resource exploration drill holes in the summer, and was carried out by Dalradian for the remainder of the exploration program. Detailed geotechnical core logging was carried out by SRK or Dalradian technicians under the supervision of SRK. SRK’s geotechnical data acquisition/investigation program included the following:  Geotechnical core logging: 14 resource and four geotechnical specific drill holes were geotechnically logged in detail for a total length of 5,600 m. Basic geotechnical data (recovery, fracture count, estimated intact rock strength) collection was implemented for the remaining resource exploration drill holes of the summer and winter 2015 program;  Photo review logging: review of a large number of representative resource drill holes located in the mineable resource areas;  Geophysical surveys: five drill holes were fully or partially surveyed for a length of approximately 1,600 m. The survey included the use of acoustic and optical televiewer;  Underground structural mapping: 52 stations (approximately 20 m apart), covering all accessible underground excavations as of February 2016, were window mapped; and  Portal site investigation: Two drill holes (32 m and 41 m) were logged at the planned box cut and portal location.

In addition to the field program oversight, SRK staff conducted structural mapping in the existing underground workings and assessed excavation performance.

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Figure 16.1: Summary Slide Presenting the Geotechnical Field Program including Drill Hole Information and Underground Mapping

Note: the two portal holes are not shown.

16.3.1.2 Structural Geology The 3D fault model that was created for the Curraghinalt project is based on the integration of drill hole data, underground mapping in the adit and drifts, and topographic data with direct observations made during two site visits by SRK structural geologist, Blair Hrabi, and independent consultant Dr. Brett Davis Thirty-two fault structures divided into three main generations were identified, and subsequently modelled. The complex fault network includes:  Fourteen west-northwest-trending, moderately northeast-dipping brittle-ductile fault zones and related splays that host and are coincident with the mineralized shear (fault-fill) veins;

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 Two (major west-trending), moderately to steeply north-dipping brittle-ductile shear zones that entrain and partly dismember the mineralized veins;  Sixteen brittle faults of several orientations that post-date both the mineralized veins/faults and the brittle-ductile shear zones, including: o Three flat to very shallowly dipping faults; o Eleven northeast- to north northeast trending faults; o One west-northwest-trending brittle fault close in orientation to the vein filled faults; and o One north northeast trending steeply dipping graphitic fault.

The structures are expected to impact the stoping in several ways. Fault-fill veins and the ductile shear zones are associated with weaker/broken rock which can impact the hanging wall and footwall rock mass over larger areas. The north northeast – south southeast trending brittle structures cuts across the mineralized veins and the affected areas are expected to be limited to the area immediately adjacent to the structures. Discontinuous flat faults are interpreted in the upper part of the orebody and these can be associated with a weaker rock mass of varying thickness. The structures cut across the veins, potentially acting as release planes within the stopes. Developing raises through these flat structures in the upper, more weathered areas proved difficult during the trial mining. The weak and broken nature of the rock mass surrounding some of these structures is expected to influence stability and excavation performance. The characteristics and orientation of these structures were considered during the geotechnical evaluation and domaining. Recommendations were provided for potential influences of the various structures on the mining methods, stope dimensions, dilution, and support requirements. These were based on the condition of the structures and the likely impact on stability during mining. The main access decline will be located in the footwall where the structural interpretation is limited. The development is expected to intersect the faults in a number of locations; however, the predicted ground conditions combined with additional ground support are expected be sufficient to maintain the general infrastructure design.

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Figure 16.2: Isometric View (Looking West) of Modelled Fault Structures. Discontinuous Flat Faults shown as Transparent for Clarity

16.3.1.3 Hydrogeology SRK completed a hydrogeological assessment for the Curraghinalt project to develop a hydrogeological characterization of the proposed underground mine including LOM groundwater ingress to the underground workings and to assess the risks associated with groundwater in the context of the mine design. Based on this assessment, the majority of mine inflows will come from intersection of or connection to faults or areas of broken ground through open joints. The indicated inflows are considered to be relatively low, and are not expected to impact geotechnical assessments or mining conditions. 16.3.2 Geotechnical Design 16.3.2.1 Geotechnical Domains A thorough evaluation of geotechnical parameters, laboratory strength testing, kinematic, empirical and numerical analyses has been conducted to support the underground mine design. A detailed lithology model, accurately reflecting the occurrence of the weaker pelite and semi-pelite rock masses could not be established due to the complexity of the inter-tonguing nature of the deposit. As a result of this, the geotechnical evaluation focused on a drill hole based assessment of the rock mass forming the immediate hanging wall and footwall of the mineralized veins. These drill holes were individually assessed based on the lithology logging data provided by Dalradian, the structural model, and the geotechnical data acquired from the field program for each major vein system.

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Based on this assessment, four geotechnical domains with unique geotechnical characteristics were defined:  Open Stoping (Green Domain): represents the most competent rock mass in the deposit. It is comprised of massive (RQD greater than 80%) psammite and semi-pelite with high intact rock strength (>80 MPa). Foliation parallel fractures are less pervasive in this domain. The rock mass rating (RMR) ranges between 55 and 65 corresponding to Fair to Good rock mass class.  Open Stoping – Increased Dilution (Yellow Domain): is characterized by moderately jointed rock quality designation (RQD) (between 60 and 80%) rock mass formed primarily in semi-pelite lithology. Foliation is well developed in this domain and existing underground developments commonly show blocks forming along a steeply dipping joint set and a foliation parallel joint set. Intact rock strength is estimated as 45 megapascal (MPa) and the RMR ranges between 50 and 55.  Open Stoping – Reduced Span (Pink Domain): consists of rock mass that is formed by highly jointed (RQD between 40% and 60%) semi-pelite, or moderately fractured (RQD between 60% and 80%) but weak pelite. These rock masses are expected to perform in a similar manner when excavated and the domain is suitable for longhole stoping with reduced stope dimensions or shrinkage mining.  Cut-and-Fill (Red Domain): represents the least competent rock mass which is not deemed suitable for massive mining due to increased fracture frequency (RQD less than 40%) and weak intact rock strength. This domain, described as “very poor”, consists of very weak or broken rock typically found along the major faults and shear zones. Excavations in this domain will require limited spans and appropriate support to maintain stability.

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Figure 16.3: T17 Vein showing the Various Geotechnical Domains

16.3.3 Geotechnical Design Approach Excavation stability assessments have been completed using well established empirical and semi- empirical relationships and engineering experience. These relationships enable estimates to be made of the expected mining conditions and support requirements based on a detailed description of the rock mass, excavation geometry, and prevailing stress conditions. The design procedure involves two steps: the quality of the rock mass is rated using a pre-defined classification system, and then the expected performance of the underground openings is predicted using an empirically derived stability correlation with the rock mass quality. 16.3.3.1 Geotechnical Design Criteria (Man Entry Excavations) The required man entry design spans (3 to 5 m) have been reviewed based on the critical span design curve presented by Ouchi et al. (2004). In the static stress condition, the excavations in the Green and Yellow domains are expected to remain stable with standard ground support (i.e. rock bolt and mesh). Additional ground support (i.e. rock bolt, mesh and shotcrete) will be required in the Pink and Red domains to maintain a stable operating span.

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16.3.3.2 Geotechnical Design Criteria (Stope Design and Dilution) 16.3.3.2.1 Stope Design For non-man entry excavation, such as longhole stopes, designs were completed using the modified Matthews stability curve after Stewart and Forsyth (1995), and the failure iso-probability curves developed by Mawdesley and Trueman (2003). A range of stope dimensions were evaluated for stability and dilution. The rock mass conditions allow for the following mining methods: In the Green and Yellow domains, the recommended maximum stope dimensions are 15 to 20 m long (along strike) by 1.2 m wide based on the 18 m sub-level spacing (floor to floor). The stope length should be adjusted based on varying steepness of mineralized veins and acceptable hanging wall and footwall dilution. The weaker Pink domain is not suitable for longhole open stoping at full 18 m sub-level height. An alternative option was assessed, where cut-and-fill mining is combined with a modified open stoping method to reduce the unsupported span of the hanging wall and footwall. The mining layout will consist of two or three levels of cut-and-fill mining (3.5 m W × 3.5 m H) followed by smaller open stopes with vertical height ranging between 7.5 and 11.0 m. Open stoping mining methods are considered high risk in the Red domain. This domain is more suited to a cut-and-fill/drift and fill mining method. 16.3.4 Dilution and Trial Stoping Empirical estimates, benchmarking, and calibration which considered trial stoping have been used to come up with the dilution estimates for the various mining methods/ geotechnical domains:  Green Domain: 0.40 – 0.60 m (open stopes) 0.35 – 0.55 m (reduced span stopes);  Yellow Domain: 0.85 – 1.10 m (open stopes) 0.65 – 0.95 m (reduced span stopes) with cables;  Pink Domain: 0.55 – 1.10 m (reduced span stopes) with cables; and  Red Domain: 1.6 m with cables.

16.3.4.1 Trial Stoping The trial stoping program was successful in demonstrating the effectiveness of the longhole stooping method and provided a useful indication of expected dilution. In two of three trial stopes the actual dilution was less than expected at 29% and 10% in stopes 1 and 2 respectively. The third trial stope, the shallowest of the three, had dilution of 64% with post-mining volume corrected to reflect removal of a single 190 t non-dilutory slab which fell into the stope void in the absence of normal operational ground support methods and after mucking. With definition drilling conducted during normal mine operations the project will have additional data on ground conditions to better predict the presence of potential wedges and plan stope designs accordingly.

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The trial stoping program was designed steeper than the average dip of the general stoping geometries, and was mined with limited interaction with other production excavations. In the core of the deposit, there is expected to be more interaction with the occurrence of more tightly stacked veins and greater extraction. This will likely result in higher levels of dilution, but this will be offset by better performance in the stopes where limited to no interaction occurs. There are definite opportunities of controlling dilution by using the definition drilling to predict wedge or faults, by reduced stope runs, accelerated paste filling, and the tactical implementation of stope support. These approaches will be important in the Yellow and Pink domains as well as the areas impacted by fault structures. Figure 16.4: Dilution Sensitivity within the Green and Yellow Domains, based on the Dip of the Stope and the Stope Length

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16.3.5 Backfill Design The selected mining methods, which are variations of longhole stoping and cut-and-fill, require backfill to manage stability and achieve the planned extraction. Paste fill produced from the processed tailings and binding agents (e.g. cement) is required in longitudinal stopes and closure areas where mining progresses towards previously mined areas. The closure areas will require placement of a higher strength plug or slab where the backfill will be undermined, with regular backfill in the rest of the stope. All excavations should be completely filled to minimize the space for potential failure and rock settlement that could result in surface subsidence. This requirement is especially critical in the shallow areas of the mine where stope failure is more likely to cause surface subsidence. Required backfill strengths are:  In stopes (backfill is only exposed on one narrow end side), 150 – 200 kPa; and  Sill Mat Areas (backfill is undermined when sill pillar is removed), 400 – 500 kPa.

16.3.6 Ground Support Recommendations Ground support requirements have been determined using several widely accepted empirical design charts including Barton et al. (1974), Grimstad and Barton (1993), Laubscher (1990), and previous SRK experience. The empirical design recommendations have been adjusted based on SRK’s understanding of the expected rock mass conditions within the various geotechnical domains. Table 16.1 lists ground support recommendations for the anticipated range of conditions in geotechnical domains for varying development spans and orientations. Wider mining spans than those considered will require ground support designed on a case by case basis, including those for the underground backfill plant.

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Table 16.1: Ground Support Recommendations for Long Term Access and Short Term Production Excavations

Excavation Ground Support Class (Geotechnical Domains) Type of Excavation Dimensions Class I (Green) Class II (Yellow) Class III (Red)

Excavation Excavation 1.8 m resin rebar on 1.5 m 4.5m x 4.5m to 5m 2.1 m resin rebar on 1.2 m Main Ramp spacing within the ring and x 5m square pattern. Galvanized 1.2 m between rings. Drive wire mesh. Back and Galvanized wire mesh. Back 2.1 m resin rebar on 1.0 m square pattern. Black wire mesh and sidewalls up to 1.5 m from and sidewalls up to 1.5 m 75 mm shotcrete/75 mm FRSC, 0.5 m from floor. floor. from floor. Intersection / Remuck Bays Interse ction Interse ction No intersections to be mined in this domain. 3.0 m resin rebar on 1.2 m Based on individual Other service drifts 4m x 4m square pattern. Galvanized intersection review wire mesh. (assumption 30%)

Excavation Excavation Footwall drifts 4.5m x 4.5m 1.8 m resin rebar on 1.5 m 2.1 m resin rebar on 1.2 m Excavations spacing within the ring and square pattern. Galvanized Drive 1.2 m between rings. wire mesh. Back and

Life 2.1 m swellex on 1.0 m square pattern. Black wire mesh and 75 Galvanized wire mesh. Back sidewalls up to 1.5 m from mm shotcrete/75 mm FRSC, 0.5 m from floor. and sidewalls up to 3.0 m floor. from floor. Intersection / Remuck Bays Intersection (off - vein) No intersections to be mined in this domain. Intersection (off - vein) 3.0 m resin rebar on 1.2 m Cross cuts 4m x 4m Based on individual square pattern. Galvanized intersection review wire mesh. (assumption 30%)

Intersection Intersection 1.8 m resin rebar on 1.2 m 2.1 m resin rebar on 1.0 m Intersection Closure areas Intersection and 5 square pattern. Galvanized square pattern. Galvanized 2.1 m coated swellex on 1.0 m square pattern. Black wire mesh Intersections – m along cross- wire mesh. wire mesh and 75 mm shotcrete/75 mm FRSC. Cross-cuts/Ore Drifts) cuts and ore drifts 4.0m cables on a 2.0 m 4.0 m cables on a 2.0 m 4.0 m plasitc coated Super Swellex on a 2.0 m square patterm square patterm square patterm

Excavation Excavation 1.5 m tendons on 1.2 m 1.5 m tendons on 1.0 m Excavation square pattern. Black wire square pattern. Black wire 1.5 m Swellex on 1.0 m square pattern. Wire mesh and 50 mm Sub-level drifts in ore 3.0m W x 3.0m H mesh. Back and sidewalls up mesh. Back and sidewalls up shotcrete/50 mm FRSC, 0.5 m from floor. to 2.0 m from floor. to 1.0 m from floor. Stoping Long Drive Support 6 × 4 m cables installed in the drive back and haning Open Stope Support Open Stopes None Required wall side wall. Cable collars N/A spaces 1.0 m apart and fanned out. 2.5 m inter ring spacing.

Class IIIA Class IIIB Excavation 1.5 m tendons on 1.2 m 1.5 m tendons on 1.0 m Fill Open square pattern. Black wire square pattern. Black wire mesh. Back and sidewalls up 1.5 m Swellex on 1.0 m square Cut & Fill in ore 3.0m W x 3.0m H mesh. Back and sidewalls up 1.5 m Swellex on 1.2 m square

and to 2.0 m from floor. pattern. 50 mm Fiber reinforced to 1.0 m from floor. pattern. Black wire mesh, 0.5 m shotcrete/ black mesh and from floor. (maximum tunnel Cut shotcrete, 0.5 from floor strike length 50 - 75 m between (maximum tunnel strike length accesses) 50m between accesses)

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16.3.7 Vertical Infrastructure Pilot holes have not yet been drilled for the planned locations of ventilation raises. As such, existing nearby drill holes have been used as a guide to the potential local rock mass conditions, and to develop the ground support requirements for the vertical infrastructure per varying lithology. The McCracken and Stacey (1989) empirical method of assessing raise stability was utilized. Based on the assessment of the planned locations, the raises are not expected to remain stable if left unsupported through the faults and weaker zones. Ground support is considered to be necessary for the raise development and long term stability. Table 16.2 summarizes the support recommendations based on the planned ventilation raise location and stability assessment. It is considered essential to drill a diamond core geotechnical raise pilot hole at the location of each of the proposed raises to confirm the rock quality and unit thicknesses prior to excavation. The excavation method, geometry, and ground support can then be tailored to the specific conditions encountered. Table 16.2: Preliminary Ground Support Recommendations for Vertical Infrastructure Based on Alimak Mining

Ventilation Raise Dimensions Rock Type 3.0 x 3.0 m 4.0 x 4.0 m 1.5 m resin rebar on a 1.0 m square 1.5 m resin rebar on a 1.0 m square Psammite pattern with wire mesh pattern with wire mesh 1.5 m resin rebar on a 1.0 m square 1.8 m resin rebar on a 1.0 m square Semi-pelite pattern with wire mesh pattern with wire mesh 1.5 m resin rebar (better ground) or 1.8 m resin rebar (better ground) or grouted self-drilling anchors (poor grouted self-drilling anchors (poor Pelite ground and faults) on a 1.0 m ground and faults) on a 1.0 m square pattern with wire mesh and square pattern with wire mesh and 50 mm shotcrete 50 mm shotcrete

16.3.8 Extraction Sequencing The overall sequence of veins extraction is recommended to be broadly based on using a footwall to hanging wall approach retaining protection pillars on the cross-cuts, see Figure 16.5. These protection pillars would then be extracted on a hanging wall to footwall approach, retreating out of the cross-cuts. The cross-cut protection pillars need to be of sufficient strike width to prevent over- stressing as the levels of extraction increase.

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Figure 16.5: Schematic of The Recommended General Extraction Sequence, with Protection Pillars being Retained along The Cross-Cuts

Within the vein, the extraction sequence is to be overhand between sill pillar areas, retreating from the centre between cross-cuts, back towards the cross-cut, see Figure 16.6. This will result in a steep en-echelon advancing stope face that closes up towards the sill pillar on the cross-cut position.

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Figure 16.6: A Longitudinal View Depicting the Recommended Extraction Sequence of a Single Vein with the Sill Pillars

Between immediate, closely spaced veins (< 20 m), where stope interaction is to be expected, the stoping should lead within the footwall vein by at least two stopes, in order to prevent adverse interaction. Figure 16.7 illustrates an example of the expected stope interaction resulting in low confining stress and a tensile zone.

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Figure 16.7: 3D Evaluation of a Minor Principal Stress Plot

Note: low confining stress and tensile zones are expected to form between closely spaced veins which will impact stope stability and dilution

16.3.9 Crown Pillar and Subsidence 16.3.9.1 Crown Pillar Requirements Crown pillar assessments have been completed using the Scaled Span method after Carter (2008) for proposed excavation within 50 vertical metres from surface that consists of development drives (cross-cuts, strike drives), underground infrastructure (backfill chamber), and mining blocks (longhole stoping, cut-and-fill). Rock mass characteristics of the Red domain were used, and 5 m were deducted from measured crown thickness to account for overburden soil. Based on the assessment, a minimum crown pillar thickness of 20 m with tight backfill is necessary to provide a Class F crown pillar with a factor of safety of 2.0 and a 50 – 100 year lifespan. 16.3.9.2 Subsidence Numerical modelling was completed with FLAC3D continuum software to assess the influence of underground excavations on crown pillar stability, hanging wall stability, and the potential for subsidence. Due to uncertainty related to complexity of geology, a sensitivity analysis was also carried out by varying the strength parameters of the rock mass. Figure 16.8 shows the model result on plan view, and a vertical section through the high extraction area.

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The main findings from the assessment are:  The extent of subsidence changes with the rock strength and 3D nature of stope interaction; and  Minimal non-damaging horizontal strains are expected at surface.

Even though the rock is of moderate strength, minimal subsidence is expected at surface (less than 20 mm). This is largely based on the dipping nature of the orebody and the fact that all production excavations are planned to be tightly backfilled. Figure 16.8: Predicted Subsidence (Section and Plan) over the Proposed Underground Mining

Note: Subsidence Is Expected To Be Very Limited, In The Order Of Tens Of Millimetres.

As underground mining progresses near the surface, it is recommended that surface impacts of mining are regularly monitored through instrumentation, surface surveys, and by visual inspections on surface and at underground excavations. Other means of surface monitoring such as high- resolution satellite radar interferometry imagery (InSAR) or aerial drone Lidar mapping should also be considered given the extent of the mine. SRK recommends the installation of permanent subsidence survey monuments over the mine workings and conducting annual high precision subsidence surveys to monitor subsidence. An east- west and north-south subsidence transit, where access allows, would provide confirmation of the anticipated subsidence and provide evidence of minimal subsidence effects to local stakeholders. 16.3.10 Mine Access 16.3.10.1 Portal Preliminary portal box cut excavation slope design parameters and ground support recommendations have been provided based on data collected from two vertical geotechnical drill holes within the proposed box cut location and surface geotechnical investigations (SRK, 2016) for the plant site and rock dumps in the vicinity of the portal.

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Permanent slopes in the overburden should be excavated at 2H:1V (30°), and slopes within weathered rock should be excavated at 1H:1V (45°). The slopes should be vegetated to manage water runoff and prevent erosion. A minimum 10 m rock face of Fair rock (RMR 50 to 60) is recommended to establish a 5 m (vertical thickness) brow above the portal. A 3 m catch berm should be maintained at the overburden-weathered rock contact to protect equipment and personnel from local bench instability and loose rock. Cut-off and toe drains are recommended around the perimeter of box cut, at the toe of overburden slope, and at the portal. Excavation support recommendations include self-drilling spiling, rebar, cables and shotcrete in the brow area and start of the decline. Exposed benches will likely need to be shotcreted to maintain long term integrity. Final support guidelines are to be developed once the box cut has been opened and the appropriate brow exposed. Below the immediate portal area, decline ground support should follow the general infrastructure ground support guidelines. These recommendations should be revisited once site specific data is collected or rock faces are exposed. Some level of cover drilling along the axis of the proposed decline will aid in the prediction of rock mass conditions and the associated mining and support requirements. 16.3.10.2 Spiral Access Ramp The planned footwall access ramp locations should be further geotechnically tested once the decline is developed close to the orebody. This will need to consider the location of the weaker pelite lithological units and the orientation and location of the major structures in the footwall relative to the vein system.

16.4 Mine Planning Criteria The mine planning criteria for the Curraghinalt project are listed below:  The pre-production mine development period will be approximately one year, with the duration being split between surface preparations, portal construction at the new portal location near the mine plant, and underground ramp and infrastructure development from both the existing exploration adit and the new portal location. Ore will be extracted in the first quarter of Year 1 and ramps up quarterly from 28%, 69%, 93% to 103% of the full average of 1,400 t/d production rate. After Year 1, the mine and mill will operate at a steady state of 100% or an average of 1,400 t/d, average of 511,000 tonnes per annum (t/a);  Underground mining and maintenance will be carried out by Owner, supplemented by contracted supervision and training staff;  Contractors will be utilized for Alimak raise development;  Conventional, trackless diesel-electric mining equipment will be utilized; and  Mined voids will be filled with paste fill and/or mine development waste. Some mining voids will remain open.

Other key mine planning criteria are summarized in Table 16.3.

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Table 16.3: Mine Planning Criteria

Parameter Unit Value Operating Days per Year Days 365 Shifts per Day Shifts 2 Hours per Shift Hour 10 and 12 Work Roster Days on-off-on-off 5-4-4-5 Nominal Ore Mining Average Rate t/d 1,400 Annual Ore Mining Average Rate t/a ~511,000 variable, from block model. 2.85 Ore Density t/m3 average Waste Density t/m3 2.7 Swell Factor 1.35 Source: JDS (2016)

Gold grade cut-off value, dilution and mining ore recovery criteria have been defined previously in Sections 15.1 to 15.3 of this report.

16.5 Mining Methods Three underground mining methods were selected for Dalradian; sub-level longhole open stoping (LH), cut & fill (C&F), and longhole upper stoping (LHUP). The bulk of the mining will be done with a longhole drill in a combination of LH and LHUP. C&F stopes will be prevalent in areas where ground is weaker and the vein is less continuous. Uppers will be taken after three lifts of C&F are mined and the vertical mining height of the upper is 7.25 m. Pillars will be mined using the LH method in all geotechnical zones, but will only be mined on retreat near the end of the mine life. Figure 16.9 illustrates the ore tonnage breakdown by mining method. Substantial mill feed will come from development ore.

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Figure 16.9: Ore Tonnes by Mining Method

Source: JDS (2016)

16.5.1 Longhole Mining LH will be used where rock quality and ground conditions allow and where vein thickness is relatively uniform. It is the highest productivity method selected for the production phase, but given many veins are relatively narrow, considerable preparation is required to maintain stope inventory. LH is the least selective of the mining methods when applied over long vertical distances due to drill hole deviation and vein geometry variations. To mitigate these effects, longhole drilling distances at Dalradian will be limited to 14.5 m, which is well within equipment capabilities and will give little drill hole deviation. Sub-level spacing will be kept consistent at 18 m (floor to floor) throughout the mine. However, depending on the geotechnical zone, the strike length of the LH stopes varies. In the Green geotechnical zone, a strike of 20 m is used, while 15 m and 8 m are used in the Yellow and Pink zones, respectively. A minimum mining width of 1.0 m was used for planning purposes. If the mineralized vein was less than the minimum width, internal planned dilution was included to increase the width to 1.0 m. During top and bottom sub-level sill development, mine geologists will inspect and map headings to identify structural controls and collect channel samples as part of the mine grade control protocol. Information from channel sampling and mapping in the top and bottom sills will be used, in conjunction with exploration and definition drilling results, to identify the economic limits and complete final stope designs. Mine experience to date verifies that structural boundaries can be used to define vein and stope limits.

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Mining engineers will use all collected grade control information to prepare drill hole and blasting sequences to minimize extraction dilution and maximize ore recovery. Mine surveyors will then locate and mark drill hole locations and provide drill hole lengths and orientations for drilling. Blast holes will be drilled from the upper drift to the lower drift using a cross bit and drilled to break-through into the lower drift to verify drilling accuracy. If the hole deviates significantly from the design, a new hole will be drilled. The drill hole spacing will be 0.40 m using a zipper pattern for a minimum stope width of 1.0 m. The longhole mining cycle will begin with blasting the slot raise to provide a free face for the first longhole round and initial empty volume for blasted swell. Production blasting will begin at the stope ends and retreat to the cross-cut. Figure 16.10 shows a typical mining sequence for LH at Dalradian.

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Figure 16.10: Longhole Open Stoping

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16.5.1.1 Longhole Mining Test Stopes During 2016, Dalradian Resources mined three test stopes underground at the Curraghinalt project. Test stoping added value and credibility to the design and dilution assumptions. Test stope details from Dalradian press releases are listed below. The test stopes are shown in Figure 16.3 and results are summarized in Table 16.4. “The test stopes were adjacent areas along the V-75 vein. Stope 1 was 16 m long and 15.7 m high, while Stope 2 was 20 m long and 15.5 m high, showing potential for faster mine scheduling using longer stopes. Orica Mining Services aided in the design of the test stoping program, while CMAC- Thyssen worked alongside Dalradian staff in drilling and blasting the test stopes. The design of the stopes was based on 100% recovery of the vein using zipper drilling to reduce the amount of drilling, the powder factor and minimize dilution. The dilution anticipated by the preliminary geotechnical model was 41% on Stope 1 with a length of 15 m, whereas actual results were 29% dilution with a 16 m length. For Stope 2, the geotechnical model predicted 39% dilution on a length of 20 m, whereas actual results were 10% dilution (length unchanged). “Stope 3 was 15 m long and 14.1 m high. Orica Mining Services aided in the design of the test stoping program, while CMAC-Thyssen worked alongside Dalradian staff in drilling and blasting the test stopes. The design of the stopes was based on 100% recovery of the vein using zipper drilling to reduce the amount of drilling, the powder factor and minimize dilution. The dilution anticipated by the preliminary geotechnical model was 85% on Stope 3 with a length of 15 m, whereas actual results were 64% dilution with a 15 m length.” Figure 16.11: Dalradian Test Stoping

Source: JDS (2016)

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Table 16.4: Dalradian Test Stoping Results

Expected Actual Estimated Avg Estimated Dilution Dilution Dip Tonnes Contained Stope Width Grade on on (°) (t) Ounces (m) (g/t) Design Design (oz) (%) (%) 1 Design 1.1 73° 774 14.83 353 - 1 Actual 1.4 73° 1,029 13.27 439 41 29 2 Design 1.3 76° 1,128 18.4 562 - 2 Actual 1.33 76° 1,244 24.34 973 39 10 3 Design 1.1 55° 655 10.63 224 - 3 Actual 1.8* 55° 1,001 9.41 303 85 64 Total Design 2,557 1,139 Total Actual 3,274 1,715 *not including a wedge on the footwall that fell during the last blast and was removed separately Source: Dalradian (2016)

16.5.2 Resue Mining On vein ore development and C&F mining at Dalradian is primarily done using the resue or split-shot mining method. Ore and waste are blasted and mucked in two different steps. Depending on the vein width, the ore or the waste might be blasted first. If more waste than ore is present in the current production face, then waste is blasted first. If there is more ore than waste, then the ore is taken first. For design purposes, a minimum mineralized vein width of 0.7 m was used. The entire round is drilled using a single-boom jumbo. Either the ore or waste is blasted, and then mucked using a 4 tonne class Load-Haul-Dump unit (LHD). On the next shift, the remaining holes are loaded and the rest of the round is taken and mucked with the 4 t LHD. After both blasts, the area is scaled and ground support installed. Resue mining, while it has slightly higher costs and lower productivities because of two blasting and mucking cycles, the method reduces the dilution tonnage to the mill and allows for a larger longhole drill to be used. There are enough production faces open at any given time to maintain the average 1,400 t/d mine production feed. A cross section of the resue sequence is shown in Figure 16.4.

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Figure 16.12: Resue Cut & Fill Mining Method

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16.5.2.1 Resue Mining Test Resue mining development was tested on-site at Curraghinalt during the summer of 2016 in the V75 150 level where there is a high angle vein, and V75 170 level where there is a low angle vein. All four split shots were loaded with stick powder emulsion and the spacing along the vein contact was 0.30 m between holes and 0.30 m from the vein contact to ensure that minimal damage was done to the vein while blasting. The holes on the vein contact were then taken at the end of the blast. By delaying the holes near the vein contact, a large enough free face was created that the main force from the blast didn’t affect the stability of the vein. Table 16.5: Dalradian Resue Test Results

Round Location Blast Holes Blast Holes Mining Dimensions Test No. (Vein, Level) Ore Waste Sequence Figure (L x W x H)

(m) 1 V75, 150 3.0 x 2.4 x 3.5 6 25 Waste, ore Figure 16.13 2 V75, 150 3.0 x 3.0 x 3.5 8 25 Waste, ore Figure 16.14 3 V75, 170 3.0 x 2.9 x 3.5 32 6 Ore, waste Figure 16.15 4 V75, 170 3.0 x 2.9 x 3.5 14 25 Waste, ore Figure 16.16 Source: Dalradian (2016)

By first blasting and removing the waste and then blasting the ore, a 50% reduction in dilution tonnage was observed during the tests. Spit-shot test results are shown in Figure 16.13 to Figure 16.16.

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Figure 16.13: V75 Vein, 150 Level - Resue (Waste First) Before & After

Source: Dalradian (2016)

Figure 16.14: V75 Vein, 150 Level - Resue (Waste First) Before & After

Source: Dalradian (2016)

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Figure 16.15: V75 Vein, 170 Level - Resue (Ore First) Before & After

Source: Dalradian (2016)

Figure 16.16: V75 Vein, 170 Level - Resue (Waste First) Before & After

Source: Dalradian (2016)

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16.5.3 Cut-and-Fill C&F mining methods were selected for areas that have lower quality rock or where the vein is not continuous enough for LH. The C&F mining cycle begins with developing the first cut from the cross-cut. Once the first cut is mined to completion, it is backfilled using paste, waste, or a combination of the two. The backfill should be placed as close to the back as possible. Once backfilling is nearly complete, the back is taken down and used to form an internal 15% ramp to the next C&F lift. The process repeats until the third and final cut is complete. The last C&F lift will remain open until the LHUPs are mined. At that point the LHUP and final C&F lift are backfilled from the level above. Avoca mining and backfilling can occur if there is access to both ends of the production panel. Whenever possible, internal ramping on vein is utilized to minimize waste generation and reduce costs. The initial C&F lift is 3.5 m high with a width of 2.3 m at the back and 4.6 m at the sill with one rib being vertical and the opposite side dipping parallel to the vein. The second and third lifts are 3.625 m high and have a width of 2.0 m at the back and 4.5 m at the sill. The deposit average for C&F shanty back is 56°. Stopes are developed on the lowest level first, and each subsequent stope or 3.625 m lift is developed above the depleted and backfilled stope. Mining direction is bottom-up. Cut-and-fill mining will be utilized in thinner areas where LH stopes are not economic. C&F will also be used in areas of poor ground conditions where larger stopes are not geotechnically possible. C&F is a lower productivity, higher cost mining method than LH stoping, but provides highly selective mining with minimal dilution. C&F production rounds will be sized with irregular walls to match the ore boundaries. Figure 16.12 shows a cross section of the C&F mining with the resue method/steps. The internal ramping and uppers are visible in the long section of Figure 16.17.

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Figure 16.17: Cut & Fill with Uppers

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16.5.4 Longhole Uppers Stoping Longhole uppers stoping accounts for 26% of planned mill feed and are an important option as it offers additional production flexibility and minimizes access development of individual 3.6 m high lifts. Longhole upper stopes are designed and planned in areas where the ground is not geotechnically suitable for LH. Uppers are taken in areas where C&F mining occurs and are typically mined from the third and final lift of the C&F to the next mining level. The vertical height of the upper stope from back to sill is 7.25 m, which is half the height of LH. Uppers stope development begins with sill cuts driven on vein at the top and bottom of the uppers stope block. Before uppers are drilled and blasted, mine geologists will inspect, channel sample, and mark the boundaries of economic mineralization. Strike lengths of 15 m or 7.5 m are used and varied based on geotechnical parameters. Blasted ore is mucked from the lower extraction drift. If access is available from both ends of the upper level, the mining sequence can be nearly continuous with Avoca backfilling. If there is not access at either end of the stope, then the uppers void will be backfilled with structural paste. Once the paste has cured, the next upper stope will be mined. Figure 16.17 shows the mining sequence of the longhole uppers stoping.

16.6 Mine Design 16.6.1 Existing Underground Infrastructure Current mine workings consist of a 3 m x 3 m access ramp, a ventilation raise to surface, vein exploration development and longhole test stopes. The existing workings have been incorporated and utilized for access, ventilation and as a production level in the FS design, and will provide initial access during the pre-production period until the mine ramp has been completed. Figure 16.18: Existing Underground Workings - Section and Plan Views

Source: JDS (2016)

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16.6.2 Mine Design Criteria Development profiles and gradients were selected based on the equipment specifications, ventilation requirements and selected sub-level spacing as shown in Table 16.6. Table 16.6: Mine Design Criteria Development Dimensions

Maximum Development Heading Parameters Width (m) Height (m) Gradient (%) Mine Decline - Capital (Surface to 108 m elevation) 4.5 4.5 12.6 Mine Ramp - Capital (level connections) 4.5 4.5 15 Footwall - Capital 4.5 4.5 2 Remuck and Sumps - Capital 4.5 4.5 15 Cross-cut - Capital 4 4 15 Vent Access - Capital 4 4 2 Sub-level Waste 3 3.5 2 Sub-level Ore 3 3.5 2 Cut & Fill Ramp 3 3.5 18 Cut & Fill Waste 3 3.625 2 Cut & Fill Ore 3 3.625 2 Alimak Nest 4.5 8.5 2 Source: JDS (2016)

Figure 16.19 shows an illustration of the primary ramps, portals, ventilation raises, ore and waste passes in relation to the rest of the deposit. The FS design has mining down to the -280 elevation based on the Measured and Indicated resources.

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Figure 16.19: Primary Mine Infrastructure Design (Looking North-East)

Source: JDS (2016)

Ore passes will be driven by Alimak at 2.4 m x 2.4 m, Ventilation raises require a larger profile for ventilation volumes and will be driven at 4 m x 4 m also by Alimak mining. Sub-level spacing of 18 m floor to floor was selected striking the desired balance of managing stope dilution, production rate and the capital intensity of required development. A mine design long section is shown in Figure 16.20. Figure 16.20: Mine Design Long Section (106-16 Vein Looking North)

Source: JDS (2016)

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16.6.3 Stope and Mine Plan Optimization Mine planning for the Curraghinalt project was completed by using Maptek© Vulcan 3D (Vulcan) and Minemax© iGantt software. Vulcan’s stope optimization software was utilized to generate optimum stope shapes within the resource block model. Based on geotechnical criteria provided by SRK, stope dimensions of 1.0 m wide x 14.5 m tall x 7.5 m along strike were run through the stope optimizer using a cut-off grade of 5.0 g/t Au. The resulting stope optimizer shapes were reviewed in plan and section and adjusted as necessary to improve grade, tonnage, and/or mineability of each stope shape. LH stopes were restricted to Green and Yellow geotechnical zones as defined by SRK. For the remaining resource above cut-off grade, resue mined C&F stopes were designed with uppers. iGantt scheduling software was used to optimize the mine production schedule by maximizing the NPV, subject to constraints including maximum lateral development rates, maximum production rates, maximum backfill rates, minimum backfill cure times, and extraction sequence. Key Scheduling constraints were as follows:  220 m per month per drill jumbo;  2 x Two-boom jumbos;  10 x Single-boom jumbos; and  Average 1,400 t/d mine production.

16.6.4 Level Access Design and Layouts Sub-level access and footwall drives will be developed at 36 m vertical intervals from the main mine internal ramp. Each footwall drive will access two mining levels. Cross-cuts will be driven on 18 m (floor to floor) vertical intervals to access all veins on the level, and access drifts will be driven on vein as much as possible. Mine geologists will map and channel sample development headings to identify structural boundaries, and to verify location and intervals of economic veins for near-term mine design and planning. Concurrently, definition drilling will be performed to obtain additional information for mine planning and stope design. An extensive definition drilling program has been included in the operating plan. The information collected during development and operations will be used to reconcile with the resource model and use experience gained to improve resource estimation methodologies. 16.6.5 Access Surface access to the Curraghinalt underground mine will be primarily via the new portal and main ramp. Occasional access will be from the existing exploration adit. The new portal will be accessed from the main access road scheduled for construction prior to pre-production mining activities. These two portals will serve all mine access requirements for the mine life. Additionally, there will be two new ventilation raises to surface in addition to the existing ventilation raise.

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16.6.6 Development Types Lateral development types include conventional electric-hydraulic jumbo drill & blast for main, internal & access ramps, footwall drives, cross-cuts, sumps, maintenance facility, and other excavations for mine services. Contract Alimak raise climbers will be used to develop waste & ore passes (2.4 m square) and ventilation raises (4.0 m square). Conventional raising is not anticipated on-site.

16.7 Mining Dilution and Recoveries See Sections 15.5 and 15.6 for details on mining dilution and recovery parameters that were developed and utilized for stope design.

16.8 Mine Services 16.8.1 Mine Ventilation The ventilation network and fresh air supply quantities were designed to comply with U.S. and Canadian ventilation standards which align with Northern Ireland ventilation regulations. Required airflows were determined at multiple stages during the mine life, using equipment fleet numbers, utilizations, specific engine types & exhaust output, and number of personnel working underground. For Curraghinalt, the following was determined:  Equipment being purchased and utilized underground will meet the new Tier 3 or Tier 4 U.S. Environmental Protection Agency (EPA) diesel emission standards;  During peak production, 122 m3/sec (259 kcfm) will be required to remove diesel emissions;  An allowance of 25%, 30 m3/sec (63.5 kcfm) for mine leakage;  Total 216 employees at 3.0 m3/min/person (106 cfm) underground will require 10.8 m3/sec (22.8 kcfm); and  The additional 35.2 m3/sec (74.6 kcfm) is for worker comfort, air quality, and network inefficiencies due to the high number of production faces.

Total designed ventilation capacity is 198 m3/sec (420 kcfm). Initially, surface fans, vent ducting, and booster fans will be used to advance underground development from the existing exploration adit and the new portal location. During pre-production, the peak ventilation quantity required will occur in the 4th quarter of pre- production year minus one 71.3 m3/sec or 151 kcfm. After the connection is made between the exploration adit and the new main decline, intake fans will be installed underground, and fresh air will intake from the exploration adit, existing ventilation raise, and a new ventilation raise. Air will exhaust up the main ramp and decline, as well as a new exhaust raise to surface. The permanent ventilation network will consist of three components: primary ventilation fans, secondary fans and auxiliary fans. The main ventilation fans will be two 2.13 m diameter underground mine fans equipped with 149 kW motors.

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Each fan is capable of delivering 110 m3/sec of fresh air. The fans are installed in two underground locations to control noise on surface. Each fan feeds a different fresh air ventilation raise. Fresh air will be directed to the active mining levels through the two ventilation raises. Level ventilation will be controlled primarily by regulators, ducting, and auxiliary fans. Exhaust air will be directed up the mine ramp and decline as well as a series of 4.0 m x 4.0 m Alimak exhaust raises will collect and direct exhaust air out of the mine. Air from the exhaust airways will not be reused again in work areas. Figure 16.21 shows the primary ventilation circuit to support mine production. The underground paste plant is in positive pressure fresh air and can operate during shift change and blasting. Mine air doors are not required for the ventilation system to balance. Brattice will be installed at ore pass dump locations to control dust.

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Figure 16.21 Primary Ventilation Network

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16.8.2 Water Supply During pre-production mine development, two mine water supply systems will be utilized. One at the exploration adit and a temporary system at the new portal until the connection will be made between the two development sectors. Once the decline will be connected to the internal ramp, the main water source will be moved from the exploration adit to the new portal location. Production water requirements are estimated to average 6 to 8 litres per second (L/s) with a peak demand of 12.1 L/s. Water from surface will be pumped to an intermediate holding/transfer tank located near the portal at the 206 m level at a design rate of 12 L/s. From this location, water will piped down the decline and onto the working levels. The surface tank will supply water for the upper levels, and fire water and water to the paste fill plant. Level switches installed in the intermediate and surface tanks will be connected to pump controls to maintain supply. 16.8.3 Dewatering Used mine water and ground water is collected on each of the cross-cuts. As there are two levels accessed per footwall drive, the lower level has drain holes drilled into the cross-cut of the level below. This allows system simplifies the need for pumps. Gravity is used to collect the water on level sumps and feed into larger pumping stations. A total of four pumping stations are installed underground at Curraghinalt. Each system consists of a 56 kW (75 hp) submersible pump and a 149 kW (200 hp) horizontal booster pump. Water from each of the pump stations is fed into piping and sent to the next pump station. Pump stations are installed at -280 m, -182 m, +72 m, and +108 m. Peak total ground water flow was modelled and estimated at 18.9 L/s with an overall average groundwater ingress estimated at 6.2 L/s. Level accesses, cross-cuts, and most other mine development will be driven at an average +2% grade to direct mine water flows towards drainage drill holes, or intermediate sumps. As much of the ground water flowing into the mine will be captured and settled or filtered before using as mine service water and/or for dust control. Pumps, designed to handle up to 10% solids, will discharge water to the mine portal where it will be used by the mine plant or treated on surface. The cost for sumps, pumps and excavations are included as sustaining capital. The dewatering single line diagram is shown in Figure 16.22 and a typical sump and booster station is shown in Figure 16.23.

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Figure 16.22: Dalradian Dewatering Single Line Diagram

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Figure 16.23: Sump and Booster Pump Station

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16.8.4 Electrical Distribution The Curraghinalt underground mine will be fed from one main overhead line power feeder from the surface 33 kV substation. Taller overhead line poles from the portal to the substation are planned such that the incoming utility power will be on the top cross-member and the mine portal power feed will be on the lower cross-member. The two parallel overhead lines will be connected to two 5 Mega Volt Amp MVA step down transformers located at the mine portal. Refer to Figure 16.24 for details.

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Figure 16.24: Dalradian Underground Mine Power Distribution Single Line Diagram

Source: Hatch (2016)

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The underground mine will be distributed at 11 kV. A total of three major power feeders from the portal mine switchgear will provide the electrical distribution for the underground mining operation. Two of these feeders will power the major underground mining equipment; the third separate underground feeder will power the paste plant and main ventilation fans. All required power feeder cables will be routed through the main ramp decline and cross-cut development sections via permanently installed overhead messenger cables. Mine Power Centres (MPC) will step down the 11 kV to 1000 V for mining development equipment, 400 V for utility loads, and 3.3 kV for the main ventilation fans. The demand load for pre-production development is estimated to require 3.93 MVA at the start of development and will increase to 6.12 MVA as the mine development and mineral ore extraction progress. Table 16.7 summarizes estimated mine power requirements by period. Table 16.7: Summary LOM Power Requirements

Year Total Connected Load (kW) Total Utilized Load (kW) -2 (pre-production) 1,164 - -1 (pre-production) 2,473 496 1 4,088 1,779 2 4,743 2,382 3 4,971 2,629 4 4,971 2,659 5 4,781 2,373 6 4,987 2,795 7 5,040 2,648 8 4,773 2,520 9 4,773 2,485 10 4,638 2,557 11 3,630 2,062 Source: JDS (2016)

16.8.4.1 Surface Infrastructure A modular electrical room housing 11 kV switchgear (with feeder protection and ground fault detection and protection relays) will be located outside the mine portal. The switchgear will include a generator-bus breaker and tie-breaker for the event when an outage occurs and the generator will provide backup power supply to the underground loads. A generator electrical room housing three 1 MW, 400 V standby rated generators and associated control equipment will also be located outside the mine portal. A step-up transformer is required to connect the generators to the 11 kV system. These three 1 MW generators will be used for temporary power during the entire pre-production development of the underground mine. Pre- production development is scheduled to begin in Year -1 and will be completed in Year 1.

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Temporary generator power is required for Year -1 and will be used for backup power supply after the end of Year 1. A total of three oil-filled transformers will be installed outside the mine portal. Two 5 MVA, 33 kV- 11 kV transformers will power the mining operation and one 3 MVA, 400 kV-11 kV transformer will step-up the generator voltage to 11 kV for mine power distribution. 16.8.4.2 Underground Equipment The stope mining sequencing will be dynamic. While one stope may be in production, the adjacent area might be in development. Portable MPCs are to be located every 700 m to power mining equipment. The MPCs shall be standardized to handle the largest anticipated load and can be easily relocated, as required, by the mining sequence. Refer to Figure 16.25 for details.

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Figure 16.25: Dalradian Underground Mine Power Distribution Block Diagram

Source: Hatch (2016)

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It is estimated that three 750 kVA, 1000 V development MPCs (Type 1) powering mining equipment are required for the initial heading advance. Three additional Type 1 MPCs are required for production activity; this assumes the mining equipment fleet will be mining three to four sub-levels per year with development for the work face decline advancement. An estimate of 16 x 750 kVA 400V utility MPCs (Type 2) powering fans, dewatering pumps, and lighting are required for the mining pre-production. Three of these Type 2 MPCs are required at the main decline ramp with three MPCs for the haulage decline ramp, and about 10 MPCs are required for the active face development and decline advancement. A portion of the Type 2 MPC’s will be reused in later development; however, additional Type 2 MPC’s will be required to be purchase during mine life. From the LOM model, it is estimated that one Type 2 MPC is required at each second development ramp corner. About six MPCs are required at every other level for ventilation and/or dewatering. The estimated 10 MPCs from pre-production activity are reused during the production years. A 2 MVA paste plant MPC (Type 3) will power the paste plant loads, and a 2 MVA utility MPC (Type 4) will provide power to the main ventilation and booster fans. It is suggested that the quantity of these MPCs be re-evaluated during the detailed engineering phase, as the LOM design and layout will be more accurately defined. Temporary and permanent development switch rooms would be spaced every 350 m. Each of these switch rooms will include a 11 kV rated mining junction box to sub-feed the various MPCs. The temporary switch rooms will be activated and decommissioned as mining activities are sequenced through successive levels. The junction boxes in the switch rooms will be left in place. MPCs in the temporary switch rooms will be reused in the next temporary switch room as mine development progresses. Isolation disconnects for cross-feeding of power cables will be required at every second level of the mine development. These switches allow for maintenance of cables or MPCs without disrupting downstream equipment or major underground power outages. Sequencing of the switches for power disruption scenarios is suggested to be studied during the detailed engineering phase. Variable Frequency Drives (VFD) are assumed to be included with the vendor packages for the main ventilation fans. Requirements of VFDs and specifications are suggested to be re-evaluated during the detailed engineering phase. The mine communication design for the process control system, Wi-Fi, tele-remotes, and personnel tracking system are suggested to be considered during the detailed engineering phase. 16.8.4.3 Underground Cables The two main underground power feeders will be sized to limit the voltage drop to within 3% on the 11 kV system. The cable length of the two main underground power feeders is estimated based on the mine plan quantities and the LOM model. The cable length for the pre-production years is estimated by taking the total length of each 4.5 m x 4.5 m ramp, capital work faces, and the 4 m x 4 m cross-cuts. An approximate 7,750 m of cabling will be required for the two main underground power feeders.

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For the production years, the total cable length is estimated by taking the total length of the capital ramp and work faces, with the total length of Year 2 to 5 cross-cuts and applying a 50% reuse factor to the capital cross-cuts of Year 6 to 12. This assumes that the first four production years (Year 2 to 5) will require all new cabling for mine maturity; at Year 6, 50% of the cables from Year 2 can be reused for Year 6 mining activity. This same methodology is then applied to the remaining other years. Estimated messenger cable lengths were based upon the same methodology as the power feeder cables, but with a 75% reuse factor for the 3 m x 3.5 m sub-levels and drifts. The mining equipment feeder cables will have quick-disconnect type cable connecters installed to the MPCs. This allows for dynamic and rapid movement of MPCs from one area to another – minimizing labour hours. 16.8.4.4 Optimization Cable length optimization will be completed during the detailed engineering phase. Labour hours for mine production are recommended to be estimated during the detailed engineering phase of the design. A detailed power system analysis of the underground mine is recommended during the detailed engineering phase of the design to ensure power quality and reliability of the underground mine. 16.8.5 Mine Communications An underground network with wireless communications will be included. Mobile equipment operators, light vehicles, and supervisors will be equipped with hand-held radios to communicate with personnel on surface. Communication protocols will be used to ensure safe travels on the ramps and decline. The wireless system will be in place to facilitate an autonomous equipment operation should Dalradian choose to utilize the feature included in the specified equipment. 16.8.6 Compressed Air Larger mining equipment often has built-in air compressors and does not need to be connected to the mine compressed air system. However, compressed air will be required by certain mining equipment. Location specific demands for compressed air will be met using portable electric compressors which can be relocated as mining progresses. 16.8.7 Explosives and Detonator Storage Explosives will be stored underground in permanent magazines, while detonation supplies (NONEL, electrical caps, detonating cords, and etcetera) will be stored in a separate underground magazine. Underground powder and cap magazines will be on the main ramp at elevation 124 m and 119 m, a distance of 35 m from each other. Day boxes will be used as temporary storage for daily explosive consumption. Additional storage of explosives on surface will be required during the first two years. The design and layout of the detonator magazine and bulk explosives magazine are shown in Figure 16.26 and Figure 16.27.

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Figure 16.26: Detonator Magazine

)

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Figure 16.27 : Bulk Explosives Magazine

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16.8.8 Fuel Storage and Distribution An equipment fueling and lube station will be located near the portal to provide fuel for the mobile underground equipment fleet. Additionally there will be two mobile fuel and lubrication vehicles to service equipment underground. The utilization of fuel and lubrication portable SatStat are also in consideration (Rock-Tech supplier). 16.8.9 Mobile Equipment Maintenance Mobile underground equipment will be maintained in the surface shop located near the mine portal. A mechanics truck will be used to perform minor repairs underground. A maintenance supervisor will provide a daily maintenance work schedule, ensure the availability of spare parts and supplies, and provide management and supervision to maintenance crews. The supervisor will also provide training for the maintenance workforce. A maintenance planner will schedule maintenance and repair work, as well as provide statistics of equipment availability, utilization and life cycle. A computerized maintenance system is recommended to facilitate planning. The equipment operators will provide equipment inspection at the beginning of the shift and perform small maintenance and repairs as required. An underground maintenance facility with an equipment wash bay, lube & oil change bays, jackleg repair, electrical shop, and warehouse will be constructed for routine services and small repairs. All equipment requiring a major service, and component change-out or repairs will be taken to the surface facility. 16.8.10 Mine Safety Self-contained portable refuge stations will be provided in the main underground work areas. The refuge chambers are designed to be equipped with compressed air, potable water, and first aid equipment; they will also be supplied with a fixed telephone line and emergency lighting. The refuge chambers will be capable of being sealed to prevent the entry of gases. The portable refuge chambers will be moved to the new locations as the working areas advance. There will also be two permanent lunch rooms, which will also function as refuge stations. Fire extinguishers will be provided and maintained in accordance with regulations and best practices at the underground electrical installations, pump stations, fueling stations, and other strategic areas. Every vehicle will carry at least one fire extinguisher of adequate size. All underground heavy equipment will be equipped with automatic fire suppression systems. Primary mine access will be through the main portal and decline. Secondary emergency egress will be through the fresh air raises on each level and connecting to the existing exploration adit. The raises will be equipped with all the necessary equipment to provide secondary egress.

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16.9 Unit Operations 16.9.1 Drilling There are five principal drilling machines selected for Dalradian. Each has their own primary use:  Electric-hydraulic development drill jumbos;  Two-boom jumbos for large dimension development rounds;  Single-boom jumbos for small development and production headings;  Mechanized bolters – Narrow vein unit for ground support installation;  Electric-hydraulic longhole drills – Compact units, for production, uppers longhole and cable bolt drilling;  Electric-hydraulic in the hole hammer (ITH) drill – Slot raise, utility drill hole drilling; and  Jackleg drills – Safety bay drilling, services drilling, etc.

Drilling productivities (metre/percussion hour) were built up from first principles and actual Curraghinalt performance varying by drilling machine type and heading dimensions. Jumbo drilling rates vary from 37.5 m/hr in small headings to 75 m/hr in large headings, and longhole drill machines average 12.9 m/hr. Smaller headings such as on vein ore development will be conducted by single-boom electric jumbo drills. The single-boom jumbos will be equipped with 3.05 m (10”) drill steel and will advance an average 7.2 m/d per machine throughout the mine, which equates to approximately 2.4 rounds per day per machine or 1.2 rounds per shift. Capital ramps, cross-cuts, footwall drives and other large headings will be developed by two-boom electric jumbo drills. Jumbos will be equipped with 4.88 m (16”) drill steel and will advance an average 7.2 m/d per machine throughout the mine, which equates to approximately 1.5 rounds per day per machine. Typical jumbo drill patterns for Dalradian development and C&F mining are depicted in Figure 16.28 though Figure 16.32.

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Figure 16.28: 4.5 m x 4.5 m Development Drill Pattern

Source: JDS (2016)

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Figure 16.29: 4.0 m x 4.0 m Drill Pattern

Source: JDS (2016)

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Figure 16.30: 3.0 m x 3.5 m Development Drill Pattern

Source: JDS (2016)

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Figure 16.31 Sub-Level Ore Development Drill Pattern

Source: JDS (2016)

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Figure 16.32 Cut-and-Fill Lift Resue Drill Pattern

Source: JDS (2016)

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16.9.2 Blasting Blasting crews will be trained and certified in Northern Ireland for explosives use. Bulk or packaged emulsion will be used for production blasting and development rounds. Boosters, primers, detonators, detonation cord and other ancillary blasting supplies will also be utilized. Smooth blasting techniques may be used as required in headings, with the use of trim powder/bulk emulsion for loading the perimeter holes. Bulk explosives will be stored in a secure underground powder magazine in accordance with current Northern Ireland explosives regulations. The blasting crews will pick up the estimated quantities of explosives required for each shift using explosives transport vehicles and deliver those explosives to working faces and explosives-loading equipment underground. Excess explosives and accessories will be returned to the secure powder magazine every shift. All explosives and detonators in and out of the magazines will be documented as per Northern Ireland explosives regulations. During the pre-production period, blasting in the development headings will be done at any time during the shift when the face is loaded and ready to blast. All personnel underground will be required to be in a designated Safe Work Area during blasting. During the production period, a central blast system will be used to initiate blasts for all loaded development headings and production stopes at the end of each shift. Where ventilation allows, multi-blasting of isolated high priority development headings is possible. 16.9.3 Ground Support Ground support will be installed in accordance with specifications based on geotechnical analysis provided by SRK for the various rock qualities expected (see Section 16.3). Electric-hydraulic bolters and shotcrete spraying machines will be used. Some ground support may be installed using jackleg drills. There will be a shotcrete batch facility located near the portal area and transmixers have been included in the mining equipment list to deliver mix to the shotcrete spraying machine underground. Ground support will be installed post-mucking of the blasted drift. No additional development will be commenced in the heading prior to the installation of ground support. In areas where resue mining occurs, the waste and ore will both be blasted and mucked prior to ground support installation. At no time will mine workers be under unsupported ground. Different ground support criteria are recommended for various types of ground conditions, rated from good to poor, and largely associated with the fault and shear zones. Discretion will be made by the development lead as to which ground support is required, with additional review and recommendations provided by the on-site geotechnical engineer. Regular pull tests will be conducted on-site to ensure adequate installation of resin rebar, split set, and cables bolts are being done. Shotcrete, when required, will also be sampled by use of splatter boards and in-situ coring to be tested for strength and adequacy. Rock bolts and screen will be installed from a narrow vein bolter machine. Jackleg and stoper drills will be available and used in areas the bolter cannot access or during times of maintenance.

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Cable bolts will be installed in intersections and along sub-level LH drifts when required. Cable bolts may be installed shortly after the development behind the development crew as to maintain the advance rate of the drift. When intersections will be located in poor ground conditions, shotcrete and cable bolts will be installed prior to development of the intersection. 16.9.4 Mucking The largest LHD with a nominal 7.5 yd3 (14 t) bucket capacity will be used for primary ramp development and excavation of other larger development headings or stopes. Additionally, the largest LHD will load trucks from the bottom of the rock passes. The mid-size LHD has a 6 yd3 (10 t) bucket capacity and will be used for ore handling from remucks to ore passes, footwall drives, cross- cuts, internal ramps, excavation of stopes, and construction of backfill barricades. The smallest LHD has a 2.6 yd3 (4 t) bucket capacity and will be used to muck out longhole sill drifts and for working in C&F stopes. The 4 t LHD is necessary to keep the resue drifts the smallest possible and reduce waste tonnage and dilution. Development LHD’s will typically muck a blasted round to a nearby remuck bay in order to clear the working face prior to ground support installation. Rock temporarily stored in the remuck is then either trammed to a rock pass or loaded into a haul truck. Where development headings are proximal to C&F stopes, development waste rock will get trammed to the C&F stope for backfill. Stope ore will be mucked with LHD and either direct trammed or trucked to the rock pass system. In- mine haulage distances will be limited to approximately 400 m and the utilization of scoop operate from surface will allow to muck between shift during blasting sequence. Mucking will be performed by LHD machines for all C&F and waste development drifts. In LH stopes, an LHD equipped with remote control will be utilized in order to keep personnel away from unsupported ground. Muck will be hauled at a maximum of 200 m to a nearby remuck drift or directly into haul trucks. When applicable, waste rock will be hauled directly to empty LH stopes or LH Uppers that are ready for non-structural backfill placement. 16.9.5 Hauling Muck will be hauled to surface by 30 t underground haul trucks. Trucks will be loaded at remuck stations by LHD machines. In most cases, trucks will be restricted to loading at remuck stations due to the increase back height requirements for LHDs to load over the side of the truck box. Trucks will haul muck to surface and dumped in ore and waste piles, to be re-handled by surface equipment for transport to the mill site. Each of the three cross-cuts on any mining level will have at least one rock pass. This allows the smallest and mid-sized LHDs to muck without needing to load the haul trucks. Rock passes are 90 m vertical and service multiple mining levels. There is one set of three ore passes per mining horizon. The large 7.5 yd3 LHD will load the underground haul trucks at the bottom of the ore passes. See Figure 16.33 for a summary of ore and waste tonnes hauled during the LOM production period.

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Figure 16.33: Yearly Underground Haulage Summary

Source: JDS (2016)

16.9.6 Backfill The principle method of backfilling for Dalradian will be with paste backfill comprised of filtered tailing, water, and cement at varying proportions. Loose Rock Fill (LRF) or waste fill (WF) will be used in C&F stoping, LH Uppers, and LH stoping operations and to fill stope voids that do not require engineered paste backfill. Paste fill and the paste backfill plant are described in Section 16.10. Figure 16.34 below depicts the backfill requirements over the course of the mine life.

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Figure 16.34: Backfill Schedule

Source: JDS (2016)

16.9.7 Loose Fill Development waste will be used as LRF, especially in C&F mining areas. This development waste rock can also be used for filling longhole stopes that do not require engineered backfill. A key driver for the Curraghinalt project is to limit the environmental impact by placing PAG material in the underground backfill. Primary stopes will receive structural backfill in the form of cemented paste, which will be comprised of de-watered tails from the processing facility. Secondary stopes will receive a non-structural backfill in the form of mine waste rock. Where there is insufficient waste rock available, paste will be used in secondary stopes. Where applicable, mine waste rock will be deposited underground into secondary stopes not requiring structural backfill. Waste will be placed into stopes by LHD machines either directly from blasted development drifts, remuck drifts, or specified dumping areas. Waste will be delivered by 30 t trucks between mining levels where necessary, as well as from a temporary waste stockpile on surface. Ejector beds will be equipped in the trucks to allow dumping into remucks or along the footwall drive near the stope to be filled. It should be noted that backfilling tight to the back is important for structural integrity, and is often difficult without specified rammer jammer equipment. As such, it is recommended that, where possible, waste rock is used to fill the majority of a stope, and that non-structural paste fill is deposited afterwards to ensure tight fill to the back.

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16.10 Paste Backfill A key driver for the Dalradian project is to limit the environmental impact by the potential to use all of the pelite and semi-pelite waste and tailings in the underground backfill and disposing of the balance in the DSF. Dalradian’s approach is to reduce the potential acid rock drainage (ARD) of the MWSF. This is meant to address long term environmental concerns and mitigation strategies for the site, with the intent to utilize all PAG material in backfill. Both surface and underground locations were considered for the placement of the paste backfill plant. The underground location was preferred to reduce the surface footprint; it will also allow for a central location near the top of the orebody. There are a number of other operational considerations which also favour the underground plant location. These include reduced maintenance and risk for pumping of slurry, rather than cemented paste, underground from the processing plant, as well as lower pressures for the paste pumps and distribution system, and greater flexibility to deliver lower slump paste to the mine. Should the surface to underground system fail, a pipe full of cemented paste backfill would require redundant pumps to clear the blockage, if possible. If the blockage could not be cleared the result would be hardened paste that would require considerable cost and effort, and lost productivity before resuming backfilling. Redundant pumps would be installed to ensure pumps are available in case of breakdown. The backfill plant will be located underground near the upper centre of the planned production zones. This location was selected to reduce the capital cost of paste pumps and redundancy, as well as to reduce operating costs (from binder, paste pump power and maintenance). The overall philosophy is to pump thickened slurry from surface to the underground paste plant, where vacuum filtration, cement addition, mixing and paste pumping/distribution will be carried out. According to the LOM plan, the Curraghinalt mine will operate at an approximate annual production rate of 511,000 t/y. The milling plan shows that the tailings concentrator production rate will be an average of 626 t/d, with 180 t/d from the detox tailings, and the remaining 446 t/d from the flotation tailings. The paste fill plant is capable to achieve 900 t/d The plant capacity was designed primarily around the requirement that the plant and all pumps/pipeline transport systems will be sufficiently robust to operate over a normal range of throughput, depending on backfilling requirements. As a result, backfilling will be conducted at an almost steady state, requiring an average of 92% utilization of the operating time of the mill. This utilization also requires redundancy within the plant and ample time for maintenance. Moreover, with the numerous locations to backfill and an average 1,400 t/d ore production rate, the plant capacity eliminates the backfill as a bottleneck in the mining cycle. Paste plant design criteria are listed in Table 16.8.

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Table 16.8: Paste Plant Process Design Criteria

Parameter Value Unit Paste Plant - General Availability 92 % Hours per day 24 hour Annual operating day 365 day Paste Plant – Feed Detoxification Tailing Solid feed rate 180 t/d Solid content 40 % w/w Solid Specific Gravity 3.5 t/m³ D50 20 micron Flotation Tailing Solid feed rate 446 t/d Solid content 55 % w/w Solid Specific Gravity 2.8 t/m³ D50 141 micron Average Paste Plant Production (wet) Production per day 429 m³ Paste production per hour 19.4 m³/h Production per hour 38,9 t/h Solid content 75.5 % Paste specific gravity 2 t/m³ Binder content 3.5 % General Use Cement (GU) ratio 30 % Blast Furnace Slag (BFS) ratio 70 % Source: WSP (2016)

Complete details of the paste plant and distribution system design are found in the following WSP Canada Inc. reports:  Curraghinalt Gold project, Paste Backfill Study, Final Report (A) dated September 2016; and  Underground Paste Backfill Distribution, Preliminary design dated September 2016.

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16.10.1 Tailing Production The process plant will generate two types of tailings: detoxification tailings from gold cyanidation circuit and flotation tailings. The tailing from detoxification must be completely used to produce paste. An average of 180 dry tons per day will be sent to the paste backfill plant. The flotation tailings will complete the volume required for the paste production. Detoxification tailings represent about 29% of the total weight of tailings. 16.10.2 Tailing Storage Detoxification and flotation tailings are mixed and stored at the process plant facility. The mix ratio will be controlled by the process plant based on the paste recipe. The pre-mixed tailings are pumped underground to the filter feed tank at a rate of 57 t/h. The tank has a live volume of 130 m³, which gives three hours (3h) residence time for a tailings slurry at 50% solid. It is agitated to maintain solid in suspension. Two horizontal pumps (filter feed pump), one on standby, feeds the tailings slurry to the disc filter reservoir. The pump speed will be modulated to maintain a constant level in the reservoir. 16.10.3 Filtration Area An agitated 12-discs unit filter with a 10 ft (3.05 m) diameter disc will increase the tailings solid content from 50% to approximately 80% solid. The filtration area will also include the disc filter accessories: vacuum pump, snap blow tank, vacuum receiver and filtrate pump. The filtered tailings (the cake) will fall at a rate of 17 m³/h through a chute, onto a 1,500 mm disc filter conveyor, equipped with a belt and weighing scale. The scale will modulate the binders and make-up water addition. The material will then be carried to a continuous paste mixer. 16.10.4 Paste Production The cake will drop into a single shaft continuous mixer. The two binders will be constantly added into the paste mixer based on the filter cake weight. The make-up water will moisturize the feed continuously, using a spray pipe system. A constant paste flow of approximately 20 m³/h will be discharged from the mixer into a paste hopper equipped with two auger conveyors, to ensure constant feed to the piston pump. A High Density Solid Pump will send the final product to the stope. This pump will be an oil-hydraulic piston pump. Each cylinder will contain 35 L and will pump at a rhythm of 11.5 strokes per minute. General use cement (GU) and blast furnace slag (BFS) will be stored in two silos with a live capacity of 75 t. The silos will be equipped with aeration pads, an aeration cone, a manual slide gate and a rotary airlock feeder. The silos will also be equipped with a 24” (61 cm) width belt scale conveyor to control the binder addition. This will provide more flexibility in case the recipe changes during the operation. The belt scale conveyors will be provided with a total dust confine enclosure with access doors. The scale conveyors will feed a common screw conveyor which conveys the GU and BFS to the paste mixer.

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The silos will be located underground beside the paste mixer. GU and BFS will be delivered by a downpipe from the surface. A 150 m drill hole complete with casing will be drilled and lined to supply the two binders. A prefabricated shelter will protect the drill hole access at the surface. 16.10.5 Water Loop and Auxiliaries When the paste backfill plant will stop its operation, the tailings enclosed into the 3 km pipeline between the process plant and the paste plant will be sent into a dedicate stope. Cleaning water will be supplied by the process plant to empty the line. An average of 24 m³/h of waste water will be sent back to the process plant via a 10 m³ waste water return pump box. The waste water will consist of a mix of filtrate water, sump pump water, disc filter cleaning water (drain and sector wash tank) and process water make-up water, as needed. The underground mine will supply fresh water to a 50 m³ tank to feed the equipment requiring water: vacuum pump ring seal water, slurry and filtrate pumps gland seal water. Furthermore, fresh water will be required for the paste recipe, equipment cleaning and line purging.

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Figure 16.35: Paste Backfill System Flowsheet

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Major components of the underground paste backfill plant will include the following:  Filter feed tank, pumps, and agitator;  Drill hole wash tank and pumps;  Underground silos cement, slag storage and metering system;  Process water tank and pumps;  Disc filter (12 discs x 3.2 m diameter) with vacuum pump and ancillary equipment;  Filter cake conveyor and weigh belt;  Continuous high-intensity paste mixer complete with washing system;  Paste pump complete with hydraulic power pack; and  High pressure paste pipeline flush pump.

The underground paste plant general arrangement is shown in Figures 16.36 and 16.37.

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Figure 16.36: Underground Paste Plant Plan View

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Figure 16.37: Underground Paste Plant Section A

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The backfill plant has been located centrally underground near the top of the deposit. This location was selected to reduce the area of disturbance on surface and to reduce the need to extend the tailings pipeline and power cables further than absolutely required. Tables 16.9 and 16.10 outline various paste mix designs. Table 16.9: Recommended Paste Mix Designs

Unit 200 kpa 500 kpa Binder Content % 3.5 3.5 General Use Cement (GU) % 30 30 Blast Furnace Slag (BFS) % 70 70 Curing Time days 12 12 Slump In 8 8 Yield Stress Pa 250 Pa 300 pa Wt% Solids % 75.5 75.5 Paste Density Kg/m3 2000 2000 Source: WSP (2016)

Table 16.10: Paste Mix Recipe - 700kpa Mix

Volume per 1,000m3 Weight per 1,000m3 Tailings Solids 485 1,460 Water from Tailings 366 365 Make-up Water 124 123 GU Cement 10 15 BFS 24 36 Total 1,000 2,000 Source: WSP (2016)

16.10.6 Underground Paste Distribution The underground paste distribution limits are illustrated by a “distribution cone”. See Figure 16.38 and Figure 16.39 for a representation of the paste distribution. The distribution network is limited by the piston pump pressure which is actually 50 bar. Depending mining design capacity, a bigger pump shall be selected to cover a larger area (enlarge distribution cone) or by using secondary mobile pump. Most of the levels have three cross-cuts (West, Centre and East) to reach the mineralized veins. On every third level interval, a distribution station will be installed for each cross-cut (West, Centre and East) which are covered by the distribution cone. Drill holes complete with casing and/or permanent pipeline will distribute the paste from the plant to each main drift distribution stations. From the distribution stations, a permanent pipeline will be installed all along the main drift.

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A set of temporary pipes will be installed as needed in order to forward the paste from the main drift to the targeted stope. The pump limitation has not been taken into consideration to determine the piping distribution system. That means, where a distribution station is planned, the permanent piping network was designed to reach the entire main drift, even if parts of it is located outside the distribution cone. The outgoing paste from the plant goes directly into distribution stations. Each distribution station forward the paste to the permanent piping, installed along the nearest main drift. From there, temporary piping will be used to reach the targeted stope, located on the same level or on two lower levels via a drill hole. With this configuration, less of the permanent pipe line will be used. The piping used in the underground paste distribution system is in Table 16.11.

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Figure 16.38: Paste Distribution Long Section

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Figure 16.39: Paste Distribution Cross Section

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Table 16.11: Piping Type

Pipeline Pipe Type End Pipe Process Plant to Paste Plant 4" Steel Pipe Grooved – Surface and Underground Ramp Piping Schedule 40 Process Plant to Paste Plant 4" Steel Pipe Butt Weld – Drill hole Casing Schedule 40 6" Steel Pipe Paste Plant to Stations Butt Weld Schedule 40 6" Steel Pipe Stations to Main Drift (Permanent Pipes) Grooved Schedule 40 6" Steel Pipe Main Drift to Stopes (Temporary Pipes) Grooved Schedule 40 Source: WSP (2016)

16.11 Mine Equipment All underground mine equipment required to meet the LOM plan is summarized in Table 16.12. Table 16.12: Underground Mobile Equipment Fleet (average number of units)

Equipment Type -1 1 2 3 4 5 6 7 8 9 10 11 Drill Jumbo 2 Boom 2 2 2 2 2 2 2 2 1 1 0 0 Drill Jumbo 1 Boom 1 10 10 10 10 9 9 7 7 7 7 1 Drill Longhole 1 2 5 5 5 3 3 6 6 6 6 6 Drill DTH 0 1 1 1 1 1 1 1 1 1 1 1 LHD (4t/2.6yd) 0 7 8 8 8 8 8 8 8 8 8 4 LHD (10t/6yd) 0 2 2 2 2 2 2 2 2 2 2 1 LHD (14t/7.5yd) 2 3 3 3 3 3 3 2 2 2 2 1 Haulage Truck - 30 t 1 6 8 7 8 7 8 7 7 7 7 5 Bolter 2 6 6 6 6 6 6 4 3 3 3 1 Emulsion Charger 2 2 2 2 2 2 2 2 2 2 2 1 Jacklegs/Stopers 10 10 10 10 10 10 10 10 10 10 10 10 Scissor Lift 2 3 3 3 3 3 3 2 2 2 2 1 Shotcrete Sprayer 2 2 2 2 2 2 2 2 2 2 2 1 Personnel Carrier 1 2 2 2 2 2 2 2 2 2 2 1 Fuel / Lube Truck 1 2 2 2 2 2 2 2 2 2 2 2 Boom Truck 1 1 1 1 1 1 1 1 1 1 1 1 Transmixer 1 2 2 2 2 2 2 2 2 2 2 1 Motor Grader 1 1 1 1 1 1 1 1 1 1 1 1 Utility Vehicle 1 2 2 2 2 2 2 2 2 2 2 2 Backhoe with Rock Breaker 0 1 1 1 1 1 1 1 1 1 1 1 Telehandler 1 1 1 1 1 1 1 1 1 1 1 1 Mechanics Truck 1 2 2 2 2 2 2 2 2 2 2 2 Supervisors/Tech Truck 4 6 8 8 8 8 8 8 8 8 8 6 Total 37 76 84 83 84 80 81 77 75 75 74 51

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16.12 Mine Personnel LOM personnel requirements are summarized in Figure 16.40. Figure 16.40: Mine Labour by Year

Source: JDS (2016)

Table 16.13 to Table 16.17 show minimum and maximum numbers of personnel planned for the LOM for Mine Management, Operations, Mine Services, Mine Maintenance, and Technical Services, respectively. These numbers don’t include the milling plant personnel. Table 16.13: Mine Management

Pre- Position Average Maximum Production Mine Superintendent 1 1 - Mine Superintendent 0 1 1 Maintenance Manager 1 1 1 Technical Services Manager 1 1 - Technical Services Manager - - 1 Mine Foreman 1 1 1 Mine Clerk 1 1 1 Subtotal 5 5 5 Source: JDS (2016)

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Table 16.14: Mine Operations - Production

Pre- Position Average Maximum Production Shift Supervisor 7 8 8 Blasting Supervisor 4 4 4 Trainer 8 16 12 Trainer-Expat 0 4 4 Blaster 7 8 8 Blasting Helper - - - Development Services/Shotcrete 8 10 10 Waste Development Miner 5 8 8 LH Production Miner 22 28 22 Ore Development Miner 27 40 40 LHD Operator (Large) 15 20 20 LHD Operator (Small) 27 32 32 Haul Truck Operator 25 32 30 Bolter Operator 15 24 24 Jackleg/Stoper Miner - - - Grader Operator 4 4 4 Nipper/Equipment Operator 7 8 8 Mining Operations (Production) 179 238 234 Source: JDS (2016)

Table 16.15: Mine Services

Position Average Maximum Pre-Production Paste Plant Operators 7 8 8 Backfill Miner 4 4 4 Backfill Helper 4 4 4 Mine Electrician 7 8 8 Mining Operations (Services) 21 24 24 Source: JDS (2016)

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Table 16.16: Mine Maintenance

Position Average Maximum Pre-Production Maintenance Supervisor 1 1 1 Maintenance Planner 1 1 1 Heavy Equipment Mechanic 14 20 20 Mechanic Helper 7 8 8 Welder 7 8 8 Electric/Hydraulic Mechanic 6 8 8 Mine Maintenance 35 46 46 Source: JDS (2016)

Table 16.17: Technical Services

Position Average Maximum Pre-Production Senior Mine Engineer 1 1 1 Geotechnical Engineer 1 1 1 Chief Geologist 1 1 1 Ventilation Engineer 1 1 1 Chief Surveyor 1 1 1 Mine Surveyor 2 2 1 Surveyor Helper 3 3 2 Geologist 4 4 2 Sampler 2 2 2 Short Term Mine Planner 2 2 2 Project Engineer 1 1 1 Long Term Mine Planner 1 1 1 Technician 2 2 2 Technical Services 19 22 18 Source: JDS (2016)

Table 16.18: Total Mine Workforce

Department Average Maximum Pre-Prod Management 5 5 5 Mine Operations - Production 179 238 234 Mine Services 21 24 24 Mine Maintenance 35 46 46 Technical Services 19 22 18 Total 260 335 327

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Modern, large scale underground hard rock mining is new to Northern Ireland, and for this reason, several key positions will be filled with experienced expatriate professionals. Skilled expatriate miners will also be included in the early years of mine life as trainers and operators. Contract supervision will oversee mine operations for the first four years of operation. Mine supervision will include mine management, training officers, maintenance planners, development and production leads, and shift supervisors. Contracted supervision will transition to the local workforce over time, as the mine staff becomes adequately trained.

16.13 Mine Production Schedule The following factors were considered in the estimation of the underground mine production rate:  Mining inventory tonnage and grade;  Geometry of the mineralized zones;  Amount of required development;  Stope productivities; and  Sequence of mining and stope availability.

The underground mine production rate of an average of 1,400 t/d is considered appropriate due to the high degree of mechanization and potential high productivities of the selected stoping methods and available working faces and/or stopes. Based on the presence of several mineralized zones and ability to have production from different sub-levels, JDS considers the underground production rate to be achievable. On average, 118 LH and 173 uppers stopes are mined per year. During production, there are two to three mining horizons in production, with an average of three active levels per horizon, for a total of six to nine levels active at any time. Each of the three cross-cuts on the level intersects 10 to 14 veins. This brings the total number of potentially active working headings totals at 360 to 756. The underground mine life is estimated at nearly 11 years in addition to the 12 months of pre- production. 16.13.1 Mine Development Mine development is divided into two periods: pre-production development (prior to commercial production) and ongoing development (during commercial production). The objective of pre- production development is to provide an access to higher grade areas and prepare enough resources to support the mine production rate when access to the lower levels is being established. Pre-production development is scheduled to:  Develop a new portal location;  Develop a decline and ramp;  Mine ore stopes prior to production;  Provide access for trackless equipment;  Provide ventilation and emergency egress; and

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 Install mining services.

During pre-production, development crews will start working on surface to excavate a portal for underground access. Following this, a development crew will work to drive a decline towards the internal ramp and install cross-cuts for ventilation raises, sumps, remuck stations, magazines, shops, safety bays, electrical cut outs, and lay downs. A second development crew will begin development from the existing exploration adit and drive towards the new internal ramp and decline. Vertical raise development will be done with contract mining crews as ventilation drifts become available. During pre-production, the mining crews will:  Excavate a portal box cut for a 4.5 m W x 4.5 m H size entrance;  Develop 2,115 m of decline and ramp to access mining levels within the mine plan;  Develop 1,735 m of footwall drives and cross-cuts to gain access to production zones;  Develop 286 m of service drifts for remucks, sumps, electrical bays, refuge stations, lay downs, and magazines;  Excavate 14,175 m3 for the underground paste plant;  Develop 356 m of Alimak ventilation raises; and  Install ladders for secondary egress.

The development schedule was planned based on first principles estimated cycle times for jumbo and raise development, and benchmarked against best practices of North American mining operations and contractors. The underground mine ramp continues to be developed as higher levels are mined out. The internal ramp is completed in Year 7 of the mine life. Total underground capital and sustaining lateral waste development are 42,998 m and 17,512 m, respectively. Underground capital development averages 5,375 m/a or 14.7 m/d from Year -1 to Year 7 when all underground capital is completed. Lateral waste development averages 1,459 m/a or 4.2 m/d over the 12-year project life. Annual waste development is shown in Figure 16.41. Total ore sub-level development is 197,960 m and averages 17,996 m/a or 47.1 m/d over the 11-year ore production period. Annual ore development is shown in Figure 16.42. Annual ore and waste development is shown in Figure 16.43.

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Figure 16.41: Annual Waste Development

Source: JDS (2016)

Figure 16.42: Annual Ore Development

Source: JDS (2016)

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Figure 16.43: Annual Ore and Waste Development

Source: JDS (2016)

16.13.2 Mine Production The criteria used for scheduling underground mine production at the Curraghinalt mine were as follows:  Target the mining blocks with higher profitability in the early stages of mine life to improve project economics;  An average annual mill feed production rate of 511 kt/a was scheduled, including ore from development and stopes;  The mine will operate two 10-hour shifts per day, 365 days per year (12-hour shift in some sectors);  Provide enough production faces to support a daily mine production rate of an average of 1,400 t/d; and  Minimize mobile equipment requirements by smoothing ore and waste development.

The stope cycle times and productivities were estimated from the first principles and bench marked with other operations. Over the LOM, it will require eight LH stopes, nine LH Uppers and six C&F and/or development headings working at any time to meet daily production requirements of 1,400 t/d.

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The average mined grades for the 11-year mine life are 8.54 g/t gold, 3.94 g/t silver, and 0.10% copper. Annual production by ore source and metal grades are shown in Figure 16.44 and Figure 16.45. Figure 16.44: Annual Ore Production

Source: JDS (2016)

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Figure 16.45: Annual Mined Gold Grade & Ounces

Source: JDS (2016)

Detailed mine planning and scheduling has been done quarterly for pre-production and the first two years of the mine life, and then transitioned to annuals for the remainder of the mine life, but has been summarized annually in this report. The annual mine production schedule is provided in Table 16.19 and shows annual summaries of ore and waste tonnage mined, ore grades and backfill quantities. Ore waste and backfill tonnages have been rounded to the nearest thousand. Table 16.19: Annual Production Schedule

Unit Total Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Mined Waste kt 7,444 218 863 889 842 874 781 839 530 504 504 532 63 Mined Ore kt 5,239 0 373 511 511 511 511 511 511 511 511 511 266 Gold Grade g/t 8.54 9.98 8.46 8.45 8.9 8.81 10.1 10.46 10.97 8.17 6.61 5.61 6.23 Gold koz 1,437 0 101 138 146 144 165 171 180 134 108 92 53 Source: JDS (2016)

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Table 16.20: Annual Mine Production by Mining Method

Mining Method Units Total Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 LH Stoping kt 1,585 0 114 142 120 184 226 223 257 195 92 33 0 LH Uppers kt 1,354 0 63 151 177 119 94 96 104 129 183 217 20 LH Pillars kt 501 0 0 0 0 0 0 0 9 51 92 117 233 Cut & Fill kt 907 0 52 118 102 83 78 83 76 90 110 106 8 Source: JDS (2016)

Table 16.21: Annual Mine Development Metres

Mine Development Units Total Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Ore Development km 198 0 21 23 22 22 19 20 15 18 18 19 2 Waste Development km 60 5 9 8 8 7 8 9 5 1 1 1 0 Total Metres Developed km 258 5 30 31 30 30 27 28 19 19 19 19 2 Lateral Advance Rate m/day 61 14 81 84 81 82 75 77 52 51 52 52 12 Raise Development km 2.9 0.3 0.4 0.2 0.5 0.3 0.4 0.6 0.1 0 0 0 0 Source: JDS (2016)

Table 16.22: Annual Backfill Placement

Mine Backfill Units Total Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Waste Backfill kt 5,351 595 620 566 568 608 549 361 465 478 471 72 595 Paste Backfill kt 3,055 175 175 280 321 321 203 298 333 308 298 335 183 Source: JDS (2016)

The Curraghinalt underground mine schedule was optimized using Minemax™ iGantt schedule optimizer software. To produce a balanced schedule, inputs and constraints that represent the design, mining productivities and unit operations were included in the optimization process. Table 16.23 details the maximum daily development rates used.

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Table 16.23: iGantt Development Productivities

Single Headings Advance Rate (m/d) Ramp 6 Footwall Drives 5 Remucks and Sumps 5 Lateral Ventilation Access 4 Cross-cuts 5 Cut-and-Fill Ramps (waste) 5 Cut-and-Fill Take Down Back (waste) 4.5 Sub-Level Waste 5 Alimak Nest 4.5 Paste Plant Excavation 3.87 Sub-Level Ore Development 2.95 Cut-and-Fill Lifts 2.95 Alimak Ore Pass 4 Alimak Vent Raise 3.5 Source JDS (2016)

Development and production ramp-up were modelled using initial periods of reduced productivities. Pre-production scheduling guidelines were established to:  Ensure sufficient development to sustain ore production when plant construction and commissioning will be complete;  Include only development that was required for pre-production;  Adequate longhole stope preparation and initiation of longhole mining in selected locations; and  Provide a development ore stockpile for plant commissioning.

The ore mining rate was capped at an average of 1,400 t/d and development was constrained to limit the equipment fleet on-site and reduce early capital expenditures. A number of schedule iterations and manual adjustments to the sequence were made in order to produce a robust, sensible, and realistic schedule. Table 16.24 shows stope productivity constraints used in iGantt as part of the mine schedule. The productivities were adjusted to account for differing backfill times. For example, the longhole uppers are more apt to be Avoca backfilled and the pillars will be primarily backfilled with waste rock.

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Table 16.24: iGantt Stoping Productivities

Mining Method Ore t/d Longhole Stoping 52 Longhole Pillar Stopes 100 Longhole Upper Stopes 65 Source JDS (2016)

The schedule targets the upper portion of the Curraghinalt deposit early in the mine life. By targeting the upper portion, the pre-production period is reduced to 12 months. Multiple iterations and decline designs were considered; however, the pre-production period was three to six months longer. The schedule takes into account a maximum of four and minimum of two mining horizons active at any given time. Each mining horizon will be comprised of five 18 m sub-levels (floor to floor) with two to four levels active at any given time. This promotes sharing of available resources and mine infrastructure, while reducing congestion on individual levels and maintaining a steady production rate. Production mining will begin at the lowest level of each mining area and follows a logical ascending sequence. Final results of the iGantt schedule were organized such that physical metres, tonnes and ounces were broken down into different categories for direct use in the cost model. From the final schedule, cost model requirements including items such as the mining fleet, manpower, consumables, ventilation, pumping, and power were determined and used to develop costs from first principals. Reports were generated by quarter from the start of development (pre-production) through to the first two years of production, annually for the remainder of the mine life. See Table 16.25 for a summary of mine schedule results, and Figures 16.46 to 16.48 for mine development and ore extraction sequence.

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Table 16.25: Summary Mine Schedule Results

Year -1* Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Total Mine Plan Quantities Unit LH Stoping ktonnes - 114 142 120 184 226 223 257 195 92 33 - 1,585 LH Uppers ktonnes - 63 151 177 119 94 96 104 129 183 217 20 1,354 LH Pillars ktonnes ------9 51 92 117 233 501 Total Stoping Ore ktonnes - 177 293 298 303 319 319 370 375 367 367 252 3,440 Cut & Fill ktonnes - 52 118.2 102 83 78 83 76 90 110 106 8 907 Development Ore ktonnes - 145 100 112 125 113 109 65 46 34 37 6 892 Total Development Ore ktonnes - 197 217.84 213 208 192 192 141 136 144 144 14 1,799 Grand Total Ore Mined ktonnes - 374 511 511 511 511 511 511 511 511 511 266 5,239 Mined Au Grade gpt 9.98 8.46 8.45 8.9 8.81 10.1 10.46 10.97 8.17 6.61 5.61 6.23 8.54 Mined Ag Grade gpt 4.15 3.58 3.71 3.83 3.57 3.69 4.26 4.59 3.86 3.92 3.31 5.81 3.94 Total Waste ktonnes 219 863 889 843 874 781 839 530 505 505 533 63 7,444 Total Lateral Waste Development m 5,168 8,657 7,797 7,461 7,449 8,328 8,556 4,474 1,072 931 491 127 60,511 Total Ore Development m 46 20,942 22,896 22,114 22,433 19,033 19,720 14,479 17,606 18,069 18,509 2,112 197,960 Grand Total Lateral Development m 5,214 29,599 30,693 29,576 29,882 27,361 28,276 18,953 18,679 19,000 19,000 2,239 258,470 *Less than 1,000 tonnes mined in Year -1 Source: JDS (2016)

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Figure 16.46: Mined Grade Distribution (all veins)

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Figure 16.47: Life of Mine Ore Extraction Sequence

Source: JDS (2016)

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Figure 16.48: Life of Mine Development Sequence

Source: JDS (2016)

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Figure 16.49 shows yearly ore production by mining method. Figure 16.49: Yearly Ore Production by Mining Method

Source: JDS (2016)

Mined gold ounces will average slightly over 130,000 oz/year over the life of the mine. Gold production peaks in Year 7 at over 170,000 oz and gradually decreases for the remaining mine life. Total lateral development advance rates will average 65 m/d during Years 1 to 11. This average rate is achievable due to multiple mining areas and headings simultaneously under development. A total of 258,470 m lateral development and 2,921 m vertical development are planned. All the vertical development will be developed using a raise climber.

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17 Recovery Methods

This section of the report describes recovery methods used in the Curraghinalt process facility. The process selected for the Curraghinalt project is based on test work described in Section 13 and consists of a flotation cyanide leach and carbon adsorption process comprising crushing, grinding, cyanide leaching of flotation concentrate, carbon adsorption, cyanide destruction, carbon elution and regeneration, gold refining, dry stack tailings and paste backfill. The process plant is designed with a nominal capacity of 1,500 t/d. The crushing circuit is designed to operate 24 hours per day at a utilization of 33% with sufficient capacity to crush the entire daily production within 12 hours if necessary. The milling and leaching circuits will operate 24 hours per day, 365 days per year at an availability of 92%. The overall LOM recoveries based on test work are expected to be approximately 94.3% for gold and 57.6% for silver. The grinding circuit product size is targeted at 80% passing (P80) 240 microns and the flotation concentrate will undergo further grinding to P80 50 microns before the leaching stage. The flowsheet includes one stage crushing, SAG mill circuit, flotation, regrind, CIL, acid wash, elution, carbon regeneration, gold refining, cyanide destruction and dry stack or paste backfill of the tailings. The crushing circuit will operate at an availability of 70%.

17.1 Introduction The plant will consist of the following unit operations:

 Primary crushing – A mobile jaw crusher in open circuit producing a final product P80 of 110 mm;  Crushed ore stockpile and reclaim – A 24-hour live storage, covered, crushed material stockpile with two reclaim belt feeders feeding the SAG mill feed conveyor;  Primary grinding – A SAG mill in closed circuit with hydrocyclones producing a final product P80 of 240 µm;

 Flotation followed by pre-leach thickening and regrind to a P80 of 50 µm;  Cyanide leaching of flotation concentrate and carbon adsorption – Gold leaching by cyanidation, facilitated by oxygen, followed by adsorption of solution gold onto carbon particles;

 CIL tailings thickening and overflow (O/F) destruction to <5 ppm CNWAD (weak acid dissociable);

 Cyanide destruction – Destruction of cyanide slurry via sodium metabisulphite for SO2, air and

zinc sulphate to <5 ppm CNWAD (weak acid dissociable). Detoxed slurry will be combined with a portion of flotation tailings for deposition underground as paste;  Carbon elution and regeneration – Acid wash of carbon to remove inorganic foulants, elution of carbon to produce a gold-rich solution, and thermal regeneration of carbon to remove organic foulants;

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 Gold refining – Gold electrowinning (sludge production), filtration, drying, and smelting to produce gold doré.

17.2 Process Design

17.2.1 Process Design Criteria The process design criteria and mass balance detail the annual ore and product capabilities, major mass flows and capacities, and plant availability. Consumption rates for major operating and maintenance consumables can be found in the operating cost estimate described in Section 22. Key process design criteria are given in Table 17.1.

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Table 17.1: Major Process Design Criteria

Area Criteria Unit Nominal Value General Gold g/t 7.94* Silver1 g/t 3.16 Daily throughput t/d 1,500 Process plant availability % 92 Overall Gold recovery % 94.3 Availability/Utilities % 33 Crushing Number of crushing stages - 1

Crushing System product size (P80) mm 110 Stockpile Capacity (live) t 1,500 Grinding Bond Ball mill work index (212 µm) kWh/t 13.7

SAG mill product size (P80) µm 240 Flotation Rougher retention time min 18 Design factor - 2 Mass pull % 18 Concentrate Thickening Thickener loading rate t/h/m2 0.25 Thickener diameter m 9 Thickener underflow density % 50

Regrind Regrind mill product size (P80) µm 50 CIL, Carbon Loading Number of CIL tanks # 10 CIL slurry feed rate m3/h 10 CIL carbon retention time h 48 CIL carbon concentration mg/L 59 Loaded carbon grade g/t 14,769 Carbon plant capacity t 2.0 Acid Wash, Elution, Recovery Acid Used - HCl No. of Acid Wash Vessels # 1 Acid Wash Batch Size t 2.0 Number of elution vessels # 1 Elution batch size t 2.0 EW recovery % 99 EW capacity m3 1 – 3.54 CIL Tailings Thickening Thickener loading rate t/h/m2 0.25 Thickener diameter m 9.0 Thickener underflow density % 65 Cyanide Destruction Destruction time h 3.0 Number of tanks # 2

Feed CN(WAD) mg/L 367

Discharge CN(WAD) mg/L <5

SO2:CN(WAD) - 5:1 Paste Backfill Feed flowrate t/h 31 Paste density % 75 Tailings Thickener Thickener loading rate t/h/m2 0.70 Thickener diameter m 12 Thickener underflow density % 55 Tailings Filter Number of filters # 2 – 1 operating Filter Cake Moisture % 15 1 Note: Silver is not included in the precious metal economics *average grade of composite samples for metallurgical test work

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17.3 Plant Design A summary of the process flowsheet appears as Figure 17.1. Models of the crushing and process facilities are given in Figure 17.2 and Figure 17.3, respectively.

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17.4 Processing Labour Several key positions will be filled with experienced expatriate professionals in order to successfully startup mill operations. Skilled expatriate professionals will be included in the early years of mine life as trainers and operators. Table 17.2 lists the total processing labour positions. Table 17.2: Processing Labour

Area / Position Rotation Headcount Process Operations Mill Operations Superintendent (Expat) 5x2 1 Operations Shift Foreman 5x2 2 Mill Admin Assistant 5x2 1 Control Room Operator 4x4 4 Crusher/FEL Operator 4x4 2 Grinding/Regrind/Flotation Operator 4x4 4 Leach/Detox/Paste Operator 4x4 4 ADR Plant Operator 4x4 4 Tailings Filter Operator 4x4 4 Reagent Helpers/Operator 4x4 4 Mill Labourer 5x2 6 Subtotal - Process Operations 36 Process Maintenance Maintenance Planner 5x2 2 Electrician Apprentice 5x2 2 Electrician 5x2 2 Instrumentation Technician 5x2 1 Millwright 5x2 2 Subtotal - Process Maintenance 9 Process Technical Services Sr. Metallurgical Engineer (Expat) 5x2 1 Metallurgical Engineer (Process Control) 5x2 1 Metallurgical Technician 5x2 1 Subtotal - Process Technical Services 3 Water Treatment Plant Water Treatment Plant Operator 4x4 4 Subtotal - Water Treatment Plant 4 Tailings Management Heavy Equipment Operator 4x4 4 Subtotal - Tailings Management 4 Total - Processing 56

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17.5 Process Plant Description

17.5.1 Primary Crushing Material from underground mining operations will feed an apron feeder - primary jaw crusher system, which produces a product size P80 of 110 mm. Feed material will be hauled by 30 t haul trucks to the run of mine stockpile or from underground. Material will be stockpiled near the jaw crusher or direct dumped through a static grizzly into a dump pocket. Stockpiled material will be re-handled. Oversize material from the static grizzly will be removed reduced using a rock breaker. An apron feeder will draw material from the dump pocket at a nominal rate of 189 t/h and discharge directly into the primary jaw crusher (1,200 mm x 870 mm, 160 kW). The crusher discharge will feed the stockpile feed conveyor. The crusher will operate 24 hours per day but the production can be done in 12 hours to reduce the noise impact if needed.

17.5.2 Crushed Ore Stockpile and Reclaim The crushed ore storage facility will consist of a dome-covered stockpile with two in-line belt feeders located within a corrugated pipe reclaim tunnel. The belt feeders will transfer ore to the conveyor feeding the SAG mill. The fine ore stockpile will have a 1,500 t live capacity that can support process plant operations for 24 hours when the crushing plant is not operating. The stockpile will be approximately 35 m in diameter and 14.7 m high which will correspond to approximately three days storage. Each belt feeder will be capable of providing a total throughput of 68 t/h to the plant when required.

17.5.3 Grinding The grinding circuit will consist of a SAG mill operating in closed circuit with a hydrocyclone cluster. Material from the crushed ore stockpile will be fed to the SAG mill via the SAG mill feed conveyor. The grinding circuit will operate at a nominal throughput of 68 t/h (fresh feed), and produce a final particle size P80 of 240 µm. The SAG mill will be 6.1 m in diameter by 2.44 m effective grinding length driven by a 1.3 MW motor. Water will be added to the SAG mill to maintain the ore charge in the mill at a constant slurry density of 70%. Slurry will overflow from the mill to a trommel screen, attached to the mill discharge end. The mill trommel screen oversize will overflow into a trash bin for removal from the system. The SAG mill hydrocyclone cluster will classify the feed slurry into coarse and fine fractions. The coarse underflow will flow back to the SAG mill feed end for additional grinding. The overflow with a nominal P80 of 240 µm will flow by gravity to the flotation conditioning tank.

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17.5.4 Rougher\Flotation Cyclone overflow will flow by gravity to the rougher circuit conditioning tank. The rougher circuit will consist of 6 to 10 m3 flotation cells operating in series with a step down between cells of 200 mm. The rougher flotation has the capacity to provide 18 minutes of residences time and has been designed to recover up to approximately 18% of the flotation feed tonnage to a concentrate. The rougher tailings will flow to the final tailings pumpbox. The rougher concentrate will be pumped to the pre-leach thickener for thickening prior to regrinding.

17.5.5 Thickening and Regrind The rougher concentrate will be pumped to a vibrating trash screen for removal of trash material and then feed the concentrate thickener. Flocculant solution (anionic polyacrylamide) will be added to the thickener feed to promote the settling of the solids. The concentrate thickener will have a diameter of 9 m and produce a thickened product of 50% solids in the underflow. The thickener overflow will flow by gravity to the process water tank. The underflow slurry from the concentrate thickener will be pumped to a regrind mill, 244 kW.

Ceramic media will be used to reduce the concentrate to a final produce size of P80 of 50 µm. The slurry at a density of 50% solids will flow from the regrind to the CIL circuit.

17.5.6 Carbon in Leach (CIL) The regrind product will be pumped to the first of 10 m by 6 m diameter by 6 m high CIL tanks. The CIL circuit is designed to provide 48-hours of residence time. Each tank includes an agitator, carbon transfer pump and inter-stage screen. All leach tanks will be located outside and adjacent to the main process building. As the slurry flows through the 10 CIL tanks, it will be leached and the dissolved gold and silver will be adsorbed onto activated carbon. The average carbon concentration in the CIL circuit is expected to be approximately 25 g/L with the exception of the first tank, which will operate at a higher target concentration of 50 g/L to maximize adsorption. As the slurry proceeds through the circuit, metal values in the solids and solution will progressively decrease. Carbon will leave the first CIL tank once metal loading reaches its maximum. The carbon is transferred countercurrent to the slurry flow to maximize precious metal recovery. Loaded carbon will be collected and transferred to the acid wash tank at a rate of 2 t/d. The tailings stream from the CIL circuit will flow by gravity onto a stationary safety screen to capture any carbon particles that may have escaped from the final CIL tank. Captured carbon particles will be collected in bins. Safety screen undersize will then be pumped to the CIL tailings thickener for dewatering prior to CN destruction. The CIL tailings overflow will report to a separate cyanide destruction circuit prior to being pumped directly to the water treatment plant. Lime slurry will be added to the first and second leach tanks to maintain protective alkalinity at a design pH of 10.0 to prevent evolution of hydrogen cyanide gas (HCN). Cyanide will be added to the circuit at a rate of approximately 1.23 kg/t plant feed. Oxygen will be sparged from the bottom of the leach tanks.

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17.5.7 Carbon Acid Wash, Elution, and Regeneration 17.5.7.1 Carbon Acid Wash Loaded carbon at 2 t/d, will be treated with a 3% hydrochloric acid solution in the acid wash tank to remove calcium deposits, magnesium, sodium salts, silica, and fine iron particles. Organic foulants such as oils and fats are unaffected by the acid and will be removed after the elution step by thermal reactivation utilizing a kiln. The carbon will first be rinsed with fresh water. Acid will then be pumped from the dilute acid tank to the acid wash vessel. Acid will be pumped upward through the acid wash vessel and overflow back to the dilute acid tank. The carbon will then be rinsed and neutralized with fresh water to remove the acid and any mineral impurities. A recessed impeller pump will transfer acid washed carbon from the acid wash vessel into the elution vessel. Carbon slurry will discharge directly into the top of the elution vessel. Under normal operation, only one elution will take place each day. 17.5.7.2 Carbon Stripping (Elution) The carbon stripping (elution) process will utilize barren solution to strip the carbon to create a pregnant solution, which will be pumped through electrowinning and back to the strip column. The strip column will be a carbon steel tank which will hold approximately 2 t of carbon. During the strip cycle, solution containing approximately 1% sodium hydroxide and 0.1% sodium cyanide at a temperature of 140°C (280°F) and 450 kPa (65 psi) will be circulated through the strip vessel. Solution exiting the top of the elution vessel will be cooled below its boiling point by the heat recovery heat exchanger. Heat from the outgoing solution will be transferred to the incoming cold solution, prior to the cold solution passing through the solution heater. An electric boiler will be used as the primary solution heater. 17.5.7.3 Carbon Regeneration A recessed impeller pump will transfer the stripped carbon from the elution vessel to the kiln feed dewatering screen. The kiln feed screen doubles as a dewatering screen and a carbon sizing screen, where fine carbon particles will be removed. Oversize carbon from the screen will discharge by gravity to the carbon regeneration kiln feed hopper. Screen undersize carbon, containing carbon fines and water, will drain by gravity into the carbon fines tank. Subsequently, the carbon fines will be collected into bags for disposal. An electric fired horizontal kiln with residual heat dryer will be utilized to treat 2 t of carbon per day, equivalent to 100% regeneration of carbon. The regeneration kiln discharge will be transferred to the carbon quench tank by gravity, cooled by fresh water and/or carbon fines water prior to being pumped back into the processing circuit. The carbon regeneration will use residual heat from the kiln to heat the pre-dryer. To compensate for carbon losses by attrition, new carbon is added to the carbon attrition tank along with fresh water, mixed and pumped to the kiln discharge screen. The fresh carbon will be combined with the regenerated carbon in the quench tank.

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17.5.8 Gold Electrowinning and Refining Pregnant solution from the strip vessel will be pumped to the refinery for electrowinning to produce a gold sludge. Pregnant solution will be pumped through the electrowinning cell and the resulting barren solution will be pumped back into the barren solution tank for reuse, with periodic bleeding to the CIL circuit. Gold-rich sludge will then be washed off the steel cathodes in the electrowinning cell (using high pressure water) into the sludge holding tank. Periodically, the sludge will be drained, filtered, dried, mixed with fluxes and smelted in an electric direct-fire induction furnace to produce gold doré. This process will take place within a secure and supervised area. The Northern Ireland gold doré will be stored in a vault to await shipment.

17.5.9 Cyanide Destruction The cyanide destruction of CIL tailings thickener underflow will consist of two mechanically agitated 3 tanks, each with a capacity of 72 m . Cyanide will be destroyed using the SO2/air process. Treated slurry from the cyanide destruction circuit will flow by gravity to the paste holding tank, combined with a portion of tailings for a total of 31 t/h solids and pumped to the paste backfill facility. Filtrate from the paste filters will be returned to the plant and used as dilution water. The cyanide destruction circuit will treat thickened slurry from the CIL tailings thickener, process spills from various contained areas and process bleed streams. Process air will be sparged near the bottom of the 4.0 m diameter by 4.0 m high cyanide destruction tanks, under the agitator impeller. Lime slurry will be added to maintain the optimum pH of 8.5 to 9.0 and zinc sulphate (ZnSO4) will be added as a catalyst. Sodium metabisulphite (SMBS) will be dosed into the system as a solution as the source of SO2. This system has been designed to reduce the total cyanide concentration to less than 5 mg/L CN(WAD) prior to transfer to the paste backfill facility. Test work results indicate concentrations significantly below the target of 5 mg/L. CIL tailings overflow will be mixed in the 3.5 m diameter by 3.5 m high cyanide destruction tank for 1.5 hours. A similar reagent regime used for cyanide destruction of the underflow slurry will be followed for the CIL tailings thickener overflow. The solution will be pumped to the water treatment plant once the cyanide concentration is reduced to less than 5 mg/L CN(W AD).

17.5.10 Tailing Thickening and Filtration Tailings from the flotation circuit will be thickened in a 12 m diameter thickener. The overflow will flow by gravity to the process water tank and the underflow at a density of 55% solids will be pumped to the tailings filter stock tank. An 8 m diameter by 8 m high stock tank will provide eight hours of surge capacity to the tailings filters. Two filters, one on standby, will process approximately 46 t/h. The tailings will be filtered to reduce the moisture to 15% prior to loading the solids into trucks for deposition at the dry stack facility. The filtrate will be pumped via the tailings thickener overflow to the process water tank to be reused in the process.

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17.5.11 Water Supply and Consumption The following types of water will be used in the process plant.  Process water: overflow water from the concentrate thickener and tailings thickener will be used as process water. Process water will be used predominantly in the grinding circuit to dilute slurry to the required densities.  Fresh water: fresh water for the process plant will be used as reagent make-up water, gland water, and for cooling water in the strip circuit boiler. The estimated fresh water consumption in the process plant is approximately 15 to 20 m3/h.  Reclaim water: water reclaimed from the catchment impoundments or directly form the water treatment plant will be used as make-up water in the process as required. The estimated reclaim water consumption is approximately 100 m3/h total, with approximately 25 m3/h make-up from fresh water and water reclaimed from the catchment impoundments or water treatment plant.

17.5.12 Air Supply The air distribution system to supply instrument, plant, and process air will be centralized except for the crushing area air system. The following compressed air supply centres are planned:  An air compressor will be located in the crusher area;  Two air compressors will be designated to supply blowing air to the filters; and  An instrument and plant air system with compressors (one duty and one standby), dryers, filters, and receivers will be provided and located with the process air compressors in a compressor room inside the plant building.

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18 Project Infrastructure and Services

18.1 Overview and Design Criteria The Curraghinalt gold deposit is located in Northern Ireland - in County Tyrone, approximately 127 km west of Belfast by road, 15 km northeast of the town of Omagh, and 7 km east of the village of Gortin. The deposit is located on exploration licence DG1. The location of the Curraghinalt site is shown in Figure 18.1. The site will be accessible by existing public roads with an additional 1.9 km of constructed road to access the site from the south main road (Crockanboy Road). The proposed Curraghinalt site layout is shown in Figure 18.2.

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Figure 18.1: Location Map of the Curraghinalt Project Property

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Figure 18.2: Regional Map of the Curraghinalt Project Property

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Figure 18.3: Curraghinalt Site Layout

Source: JDS 2016

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18.1.1 General Infrastructure Design Criteria The design of the facilities was dictated by the location of the site, general topography and limits of Dalradian’s land holdings. Accordingly, the facilities will be of an appropriate quality to ensure safe and reliable operation, while being fit-for-purpose to minimize cost. Some examples of resultant design elements that derived from this philosophy included:  Use of prefabricated structures where appropriate to reduce on-site direct and indirect costs;  Use of fabric-covered buildings where practical;  Use of compacted-fill floors where appropriate;  Minimized project and building footprint to optimize earthworks, productivity and piping/power distribution;  Minimized difference in elevation and the horizontal distances between the portal, mill site, crushing plant, and waste rock storage facility (WRSF), in order to minimize the capital and operating costs for truck haulage, roads, earthworks, and pipelines between these elements;  Plant site designed to minimize landscape and visual impacts of the overall structures; it is envisioned that the process plant buildings will be constructed in an excavation set into the hillside, surrounded by an existing paddock of trees;  Plant site designed to blend in with the surrounding land cover. The colours will consist of a dark green shade for the exterior cladding and roof structures;  Use of structural painting only where needed for protection or safety (e.g. fuel tanks not painted);  Respect for environmental design requirements, such as set back from water courses;  Consideration for site water management requirements;  Consideration for traffic management and safety;  Consideration for climatic conditions; and  Consideration for local wind patterns with respect to noise, dust, and other atmospheric emissions.

18.2 Foundation Soil and Site Conditions SRK was retained by Dalradian to conduct an overburden geotechnical investigation for the Curraghinalt gold deposit. The field study was carried out between December 2015 and January 2016, and was designed to support a feasibility level engineering design of surface infrastructure and waste management facilities. The program was specifically designed for the geotechnical characterization of the foundation conditions for the dry stack tailings facility (DSF), the processing plant and the surrounding areas where associated infrastructure might be required. The program included the collection of soil and weathered bedrock samples from test pits and drill holes for geotechnical laboratory testing. Figure 18.3 presents a typical stratigraphic column for the area of the performed field investigation.

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This typical log was completed based on the current information from test pits and drill holes. Soil units were simplified based on their primary component, as observed in the field. Figure 18.4: Typical Stratigraphic Column

18.2.1 Infrastructure Foundation Preparation Recommendations The primary crusher, covered stockpile and plant site will be constructed on cut-and-fill pads as shown in Figure 18.5. The plant site will have maximum cuts of up to 10 m at the uphill (north) and fills of up to approximately 3 m on the downhill (south) side. Critical structures that cannot tolerate differential settlements such as the process plant will be founded on competent bedrock. The currently planned cut depths are anticipated to reach fresh,

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competent bedrock. However, this will be further confirmed for the critical facility locations during detailed design studies. Drilling and blasting will be required for the fresh bedrock and possibly for the upper weathered bedrock. Weathered rock will not be suitable for reuse as structural fill, and will be placed in thin lifts in the DSF. Non-critical structures that are able to tolerate minor differential settlements will be designed on fill sections of the pads. Fill will consist of free-draining, coarse, granular materials, and preferably angular durable rock fill to prevent buildup of excess pore pressures. Where structural fill is to be placed on an existing natural slope, the fill will be keyed into the natural slope by excavating steps into the slope at the edge of successive lifts of structural fill. Rock fill pads will be constructed in lifts no greater than 1.5 m with the maximum rock size limited to 0.9 m. Engineered slopes constructed of structural or rock fill will be made at a gradient of 2H:1V or flatter. Buildings will be set back a minimum of 10 m from the crest of fill slopes. Table 18.1: Infrastructure Elevations

Max Cut Depths Pad Elevation Building Elevation Infrastructure (m) (masl) (masl) Mobile Maintenance Shop 0 261 270.2 Process Plant 10 264 281 Covered Stockpile 6.8 265 278 Warehouse 0 261 267 Laydown 3 264 n/a Mine Rescue 0 261 268 Parking Lot 0 260 n/a Crusher 3 265 277.5 Admin Building 0 261 263.5 Source: Allnorth (2016)

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18.3 On-Site Infrastructure As much infrastructure as possible will be located close to the process plant in order to make the operation of the site efficient and limit the size of the environmental footprint. The major infrastructure at the Curraghinalt site will consist of the following below and is illustrated in Figure 18.5.  Crusher system;  DSF/WRSF;  Process-related facilities;  Water storage ponds;  Truck shop and warehouse;  Mine dry and administrative complex;  Mine Rescue;  Backup power generation;  Utilities;  Temporary surface powder magazine;  Storage areas, warehousing;  Fuel and lube storage; and  Site water management and treatment facilities.

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Figure 18.5: Curraghinalt Site Infrastructure

Source: JDS (2016)

Note: WWTP = waste water treatment plant Source: JDS (2016)

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18.3.1 Process Building The process plant will be located in a pre-engineered building. The building will measure 58 m wide by 102 m long by 18 m tall and will come equipped with a 10 t overhead crane for equipment maintenance. Figure 18.6 shows the planned layout of the process building.

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Figure 18.6: Process Building Layout – West and East Sections

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18.3.2 Truck Shop and Warehouse Building The truck shop complex at site will consist of a 54 m long by 18 m wide by 9 m tall structural steel, pre-engineered building designed to accommodate repair and maintenance of mining equipment and light vehicles. The shop is equipped with a parts room, offices and lunch room. The total floor area of the truck shop will consist of four truck bays, and one wash bay, each 8 m wide by 18.3 m deep, totalling an area of 870 m2.

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Figure 18.7: Truck Shop/Warehouse Floor Areas

Source: Hatch (2016)

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The service bays are designated for the service and repair of the major mining equipment which includes 30 t haul trucks and 6 m3 front-end loaders. The facilities will include automatic hose reels in one bay for dispensing engine oil, transmission fluid, hydraulic oil, air, solvent, diluted coolant, and grease. The truck shop will be equipped with a 10 t overhead crane that will be accessible by all service bays. The building is heated to 10°C by glycol air handlers and unit heaters. Tire repair will be done outside, weather permitting. In poor weather, tire repair will be done in the shop with the appropriate safety measures, such as personnel access control and clearances. 18.3.2.1 Laydown Area Laydown areas for major process plant consumables are located to the east of the truck shop building for storage of spare parts that do not require protection from the elements. A separate construction laydown area has not been designated but the office pad was developed to allow for sufficient space around the infrastructure to store materials and equipment, should additional storage area for construction materials be required. 18.3.3 Mine Dry and Office Complex The 1,070 m2 mine dry and office complex will be constructed from modular units manufactured off- site and in compliance with highway transportation size restrictions. Modules will rest on wood cribbing. The complex will comply with all building and fire code requirements and be provided with sprinklers throughout. The mine dry facility will service construction and operations staff during the life of the project. It will be capable of servicing 160 workers during shift change and contain the following:  Male and female clean and dirty lockers; and  Showers and washroom facilities with separate male and female sections.

A male : female ration of 6:1 was assumed.

The site office facility will contain the following items:  Private offices;  Main boardroom; and  Mine operations line-up area.

A layout of the mine dry/office complex can be found in Figure 18.8.

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Figure 18.8: Mine Dry and Office Complex Layout

Source: JDS (2016)

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18.3.4 Fuel Storage Fuel storage capacity has been designed for a one week period of diesel consumption at full production to supply mining and ancillary equipment, and backup power generation. This capacity accommodates the fuel delivery weekly to replenish the 50,000L double lined tank. Table 18.2 provides the annual fuel consumption for the Curraghinalt site. Table 18.2: Curraghinalt Site Fuel Usage

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Area (‘000 L) Mining 3,416 3,878 3,870 3,951 3,797 3,962 3,294 3,178 3,147 3,164 1,064 Operations Tailings 130 130 130 130 130 130 130 130 130 130 130 Management Surface & 238 238 238 238 238 238 238 238 238 238 238 Infrastructure Earthworks 70 47 47 Total Fuel 3,784 4,246 4,238 4,366 4,212 4,330 3,662 3,546 3,515 3,532 1,432 Source: JDS (2016)

The fuel and lubes are planned to be located on a constructed pad adjacent to the shop and the warehouse. This area has been selected for safe and practical fuel loading and unloading. The fuel tank bund will be lined with High Density Polyethylene (HDPE) for spill containment. Fuel dispensing equipment for mining, plant services, and freight vehicles will be located adjacent to the fuel tank bund; the fueling area will drain into the bund which will consist of a sump to allow for the proper collection of any contaminated fuels. The fuel would be pumped into a tank that will be constructed of a 50,000L double lined tank. The tanks fuel area will be provided with standard instrumentation and controls to monitor and safely manage the inventory in the tanks. Refueling will be provided by an off-site contractor every five to seven days. 18.3.5 Warehouse A warehouse to house spares and other plant maintenance supplies will be constructed besides the mobile maintenance shop. This building will comprise a structural steel, pre-engineered building. A separate reagent warehouse will be constructed within the processing plant.

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Figure 18.9: Warehouse Building

Source: Hatch (2016)

18.3.6 First Aid & Emergency Vehicle Storage A mine rescue structure will include storage for site emergency vehicles. This building will comprise a structural steel, pre-engineered building.

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Figure 18.10: Mine Rescue Structure

Source: Hatch (2016)

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Table 18.3: Infrastructure Dimensions

Approximate dimensions Approximate Height Building (Width (m) x Length (m)) (m) Administration Building 17 x 39 2.5 Mine Dry 40 x 28 3 Warehouse 15.3 x 18.3 6 Process Plant 58 x 102 17 Crusher Building 26 x 25 12.5 First Aid & Emergency Vehicle 10 x 13 6 Storage Mobile maintenance shop 18.3 x 47.4 9.2 Assay Lab 13 x 32 4 Covered Stockpile 43 x 43 13 Source: JDS (2016)

18.3.7 Waste Management All hazardous waste will be transported off-site by an authorized waste carrier and to appropriate licenced local waste disposal facilities. Recyclable waste is also expected to be back-hauled by transport trucks to suitable off-site recycling facilities for proper disposal. Non-hazardous, non-leaching, inorganic garbage will also be collected and disposed of off-site to the appropriate licenced local waste disposal facility. 18.3.8 Ancillary Structures An assay laboratory will be located adjacent to the process plant. This facility will serve the plant’s assay, environmental, and metallurgical requirements. The laboratory will consist of prefabricated modules and ancillary equipment, such as drying ovens, dust and fume control, and heating equipment. 18.3.8.1 Utilities and Services 18.3.8.1.1 Sewage Treatment Plant (STP) Sewage will be treated by a membrane bioreactor (MBR) plant that will be constructed, assembled and tested prior to shipment to site. A sludge drying system will also be provided in a separate 40 ft (12 m) container. The dewatered sludge will be disposed off-site to the appropriate licenced waste disposal facility. The treatment plant will include influent screening, an equalization/bioreactor tank (to handle the daily peaks in flow), a membrane system, a treated effluent storage tank and UV disinfection. The treated effluent will be regularly tested prior to being discharged to the surrounding environment. 18.3.8.1.2 Fresh/Fire Water

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Fresh water is planned to be extracted from the clean water pond located east of the plant site. Fire water will be stored at the bottom of the tank while the fresh water will be drawn off the top portion of the tank. 18.3.8.1.3 Potable Water Potable water will be sourced from the main Northern Ireland Water connection. A 90 mm pipe will be installed following the public road highway to site, including necessary pumps to provide pressure of 1.5 Bar. The connection has been sized for up to 300 people based on a consumption of 50 L per person per day for the office staff and 150 L per person per day for the mine workers. There is an added 15% design factor. Hence, average daily domestic water usage is estimated to be 32,000 L/day. 18.3.8.1.4 Water Treatment Plant Membrane technology has proven itself to be an effective method to remove heavy metals that are problematic to treat with conventional lime precipitation. Because membrane technology is an absolute filter for most of multivalent heavy metals, removal rates of > 99% can be achieved. Two types of membrane technology have been selected for this project Ultrafiltration (UF) and Low Pressure and High Pressure Reverse Osmosis (RO). The UF Membrane system will be used as pretreatment of the water as feed to the RO membrane system. The UF membrane system will comprise Hollow-Fibres with a nominal pore size of 0.04 microns. This system, operating at a nominal pressure of 2 to 4 Bar, will run with slight cross-flow for approximately 55 minutes and will then be backwashed for five minutes. The membranes will remove all suspended solids, bacteria, algae and soluble organic material of > 50,000 molecular- weight and supply ultra clean feed to the RO system. The Low Pressure RO system will use membrane with nominal pores sizes of 0.0005 microns. It will operate at a 10 to 15 Bar pressure to separate the feed into a concentrate stream and a permeate stream. The concentrate flow rate will be approximately 10 to 20% of the feed flow rate. With this very tight pore size, over 97.5% of all salts and metal ions will be rejected into the concentrate stream. The clean permeate stream will be suitable for direct surface discharge into the environment. After a 80 to 90% recovery, the concentrate from this membrane system will be sent to a hydrodesulphurization (HDS) (seeded reactor) to precipitate calcium sulphate back to saturation; the supernatant from the HDS will then be processed with another UF and high pressure RO to achieve nominally 0.75 to 1.5 m3/h (90% recovery) of concentrate at 100,000 to 120,000 ppm to be sent to a Brine Crystallizer. Membrane technology’s absolute barrier-layer provides an excellent removal of heavy metals and makes it very attractive in helping to meet difficult discharge standards. To ensure quality, the conductivity of the permeate (clean water from the RO membranes) is simply monitored; because the conductivity is monitored in real time, it provides assurance that the membranes and related components are functioning properly and are producing high quality water to meet the stringent discharge standards.

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Continuous ventilation will be provided for all personnel-occupied spaces, as well as select unoccupied spaces. Ventilation rates will vary depending on the level of occupancy and the intended use of the space, in accordance with applicable codes and standards. Ventilation systems will include make-up air units for continuous supply of tempered air, exhaust fans to provide the required number of air changes per hour, and localized exhaust fans to remove fumes, where required. The process plant includes dust control and fume extraction systems. Figure 18.11: Flow Diagram

Source: MDS 2016

18.3.8.1.5 Site Communications Communication facilities will comprise a redundant fibre communication backbone system, which will link and manage the data transmission of the distributed control system (DCS), third party programmable logic controllers (Plcs), motor controls, fire detection system, and computers around the mine site. It is expected that the site will be connected to the local phone system network. In the case that this would not be possible, then a Voice over Internet Protocol (VoIP) telephone system would be required. 18.3.8.1.6 Fire Protection System The site facilities will be protected, at a minimum, from fire in accordance with applicable codes and standards. The fire alarm system will consist of manual pull stations at building exits and audible and visual notification devices throughout the work areas.

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All surface mobile equipment will be fitted with fire extinguishers. The fleet of mining equipment will also contain fire suppression systems. The firewater main, hydrant, and standpipe system will service the Curraghinalt site facilities by a fire water tank and modularized pump unit. The fire water pump system will include a main pump and jockey pump which are electrically powered and a diesel-driven standby pump. The fire water pumping system will be housed in a modular building. All buildings and conveyors will have fire extinguishers and some will have standpipe systems. There are no sprinkler systems inside the truck shop or the process plant. The backup power generators, being large diesel engines, will each have a Liquid Vehicle System (LVS) fitted. The administration offices and mine dry will be fitted with sprinklers connected to the firewater main. 18.3.8.2 Power Supply 18.3.8.2.1 Power Generation and Distribution Power will be supplied to the mine by connecting to the national high voltage electricity grid. A new 33kV power line from the Strabane 110/33kV substation will be developed by Northern Ireland Electricity Networks (NIE) to supply power to the mine. The Northern Ireland Energy (NIE) distribution system for the mine will also include the switchgear and circuit breakers necessary to receive the power at site and new switchgear and circuit breakers at the 110/33kV main substation in Strabane. There would be two substation transformers each with a capacity of 10 MVA that reduce voltage to 3.3 kV for on-site distribution. The 3.3 kV medium voltage network will be used for the primary electrical distribution and for feeding large loads such as the primary crusher, SAG and ball mills. Distribution circuits run from the main substation to the secondary substation and the electrical room located on the south-east corner of the process plant. Additionally, a 1.2 MW emergency generator would be located on-site to supply power for essential mine area loads during potential power outages, primarily to sustain the agitating process, pumping and ventilation in critical areas. The NIE has proposed an indicative route for the power line between the Strabane substation and the mine site. This is illustrated in Figure 18.12. The route alignment will be refined following the process outlined above. The route could change by more than 500 m on either side of the line in Figure 18.12. The alignment will be influenced by negotiations with land owners, environmental and engineering considerations. It is anticipated that all access and working areas will be within 1 km of the line. Thirty-four (34) km of the power line to the site will consist of an overhead line, plus an additional 4 km underground power line. The overhead line will comprise three conductors suspended on single wood poles and double wooden poles (H poles). The conductors will consist of All Aluminum Alloy Conductors (AAAC). The poles will be designed to suspend and maintain adequate clearance between the conductors. The span between the poles will be 80 to 100 m. The above-ground height of most poles will be in the order of 11 m, but will range from 9 to 17 m depending on the terrain. The poles will have a below ground depth of 2 to 3 m.

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Figure 18.12: NIE Route Proposal

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Table 18.4: Curraghinalt Site Electrical Load

Connected Peak Average Annual Energy

(kW) (kW) (kW) Annual (kWh) Ore Crushing And Handling 765 586 493 2,719,484 Process Plant 6,304 4,707 3,863 20,018,807 On-Site Infrastructure 435 318 318 3,106,708 Underground Mine 5,040 5,039 2,316 21,164,914 Grand Total 12,544 10,650 6,990 47,009,913 Source: Hatch (2016)

18.3.8.3 Site Roads The road network for the Curraghinalt site will consist of haul roads and service roads. There will be a series of roadways constructed around the site; these include the site access road, south bypass road, mine portal, road to the DSF and plant site. On-site facilities will be constructed in a compact manner to minimize the potential for impacts from dust, noise and visual disturbance. The site roads will be built using compacted rock fill overlying locally derived soil with an 8 m road width. The final road surfacing will be complete with 200 mm crush surfacing and asphalt paving. This will mitigate any dust issues. The development of site will commence with the construction of the access roads which will start at Crockanboy Road and progress into site. The roads will consist of newly constructed roadway and the use of existing roads when suitable. New roads will be constructed using localized embankment rock fills and, when necessary, will be sourced from the infrastructure earthworks activities. Appropriate thicknesses of road bed material will be utilized according to the existing ground conditions and local cut/fill material. Culverts and water diversion measures will be installed as per the final design details. The site will have 1 km of surface haul roads and 2.5 km of service roads. Service roads will be used for smaller vehicles (i.e. light trucks) to access infrastructure such as the process plant, mine dry, administration and laydowns. Service road design criteria are as follows:  Design vehicle: light / medium truck;  Minimum width of traveling surface: 6 – 8 m;  Design Speed: 50 km;  Side slopes: 2H:1V; and  Maximum Grade: 8%.

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18.3.8.3.1 Access Road Site will commence with the construction of the access roads which will start at Crockanboy Road developing towards site. The roads will consist of newly constructed roadway and the use of existing roads when suitable. Phase 1 – Initial site access: Completion of rough grading, sufficient for access by construction equipment and light vehicles. The road will be suitable for the delivery of small quantities of construction freight but will not be of sufficient quality to support the delivery of equipment and bulk materials to support the overall program. Phase 2– Completion of the road design by softening vertical gradients, widening corners, installing drainage systems, applying slope stabilization, and placing road surfacing. The road will be sufficient for the delivery of heavy process equipment and full trailer loads. This will include the completion of the south bypass road. The roads will be constructed using localized embankment rock fills and, where necessary, will be sourced from an off-site quarry. Appropriate thicknesses of road bed material will be utilized according to the existing ground conditions and local cut/fill material. Culverts and water diversion measures will be installed as per the final design details. 18.3.8.3.2 Haul Road The main haul road will run from the portal to the crusher. Additional haul roads will be constructed to access the topsoil/peat stockpile, waste rock berm and the DSF. The haul road construction will be completed in two parts. The first phase will allow hauling the peat and topsoil to the appropriate designated stockpiles. A portion of the Phase 1 haul road will incorporate the main haul road and then direct south as indicated on the site plan. The remaining construction of the main haul road will be completed to the portal as per the outlined design criteria below. The main haul roads will consist of a minimum rock fill of 0.7 m completed with a surface layer of 200 mm of 50 mm minus material which will be manufactured off-site. The length of the portal haul road is 520 m with a 6 m running surface, including a turn out mid-way between the portal and the crusher to allow trucks to give right of way to the loaded vehicle. During the construction phase prior to finalized design, temporary surface water management facilities such as water conveyance channels, storm water ditches and sediment control measures will be required as part of the ongoing infrastructure work. Excavation of channels and/or ditches into overburden soils should be avoided where possible and above-ground solutions should be selected once final design has been completed.. If it proves necessary to excavate, these facilities will have to be over-excavated and lined. Final diversion channels will be constructed as per the final SRK design.

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Haul road design criteria are as follows:  Design vehicle: haul Trucks;  Minimum width of traveling surface: 6m wide, 4% Crossfall;  Design Speed: 30 km;  Side slopes: 2H:1V;  Maximum Grade: 10%; and  Safety berms for fills more than 3 m in height: 1 m.

18.3.8.4 Road Transport Materials and equipment will be brought to site by road from both Belfast and Londonderry. Figure 18.13 and Figure 18.14 show the key transportation routes to and from the site location. During construction, it is estimated that there will be an average of 58 loads per day delivered to site with an additional 70 staff vehicles. During operations, the average daily load transported to site is estimated to be seven. Staff vehicles during this time will peak at approximately 123 per day. Table 18.5 and Table 18.6 show the total freight tonnages associated with the construction and operation of the mine.

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Figure 18.13: Proposed Shipping Routes

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Table 18.5: Freight Quantities – Construction Site Traffic

Proposed Construction Site Traffic Vehicles Per Day Deliveries Delivery Details / Day / HGVs Only Year 1 Year 2 Recycled Aggregate from Project Site 10,920 35.0 0.0 Manufactured Aggregate 6,074 9.7 9.7 Site Wide Concrete (including lean-concrete) 3,520 5.6 5.6 Other (includes Cyanide) 1,872 3.0 3.0 Mechanical & Electrical 682 0.2 2.0 Piping (Overland HDPE) 655 0.1 2.0 Piping + Ducting, (Process, Utility + Civil Engineering) 624 1.0 1.0 Diesel 478 0.8 0.8 Liners / Geogrids (HDPE, Geotextile, GCL, Geonet) 468 1.0 0.5 Structural Steel + Cladding 425 0.4 1.0 Power & Control Cable 343 0.1 1.0 Ore From Project Site 329 1.0 1.0 Main / Ancillary Building Materials, DPC, Blocks, 214 0.2 0.5 Abnormal Loads, Cranes, Cabling + Trays 190 0.1 0.5 Explosives, Emulsion & Detonators 187 0.3 0.3 HGV - Total One Way 26,980 58.5 28.9 HGV - Total Two Way 53,960 117.0 57.9 Staff Vehicles (Day - Assume 4 staff per vehicle) One Way 70.0 70.0 Staff Vehicles (Day - Assume 4 staff per vehicle) Two Way 140.0 140.0 Total Combined HGV & Staff Vehicles one way 128.5 98.9 Total Combined HGV & Staff Vehicles two way 257.0 197.9 Source: Hoy Dorman 2016

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Table 18.6: Freight Quantities – Operations Site Traffic

Proposed Operations Site Traffic Average No. Vehicles Per Day Delivery Details / Day / HGVs Only Other (includes cyanide) 3.0 Cement 1.0 Slag 1.0 Brine reject solution 1.0 Gold mine complex consumables 0.3 Diesel deliveries 0.3 Explosives 0.3 HGV - Total One Way 6.9 HGV - Total Two Way 13.8 Staff Vehicles (Day - Assume 2 No per vehicle) One Way 123.0 Staff Vehicles (Day - Assume 2 No per vehicle) Two Way 246.0 Total Combined HGV & Staff Vehicles one way 129.9 Total Combined HGV & Staff Vehicles two way 259.8 Source: Hoy Dorman 2016

18.4 Dry Stack Facility The DSF will store approximately half of the tailings and a third of the waste rock produced over the life of the mine. The balance of the tailings and waste rock will be used as backfill within the underground mine. While the level and focus of this design is directed to the FS, consideration has also been given to the range of potential EIA requirements. 18.4.1 Dry Stack Layout and Storage Quantities The DSF will comprise an area of 18 ha and is designed for co-disposal of filtered flotation tailings and Net Acid Generation (NAG) waste rock. The DSF will store 2.9 Mm3 of mine waste (tailings and waste rock) in two cells, the maximum height of which will be approximately 51 m (Figure 18.14). The expansion potential needed to meet the EIA mine waste storage requirements will require the addition of a third cell, thereby increasing the DSF layout area to 28 ha and providing storage for a total of 4.8 Mm3 of mine waste.

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Figure 18.14: DSF Location and General Layout

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The mine waste production schedule is illustrated in Figure 18.15. After initial ramp-up, the annual waste rock volumes will be relatively uniform and similar to the annual tailings volumes for the first half of the 11-year mine life. Thereafter, the waste rock volumes will decrease significantly, with only modest waste rock quantities reporting to the DSF in Years 8 to 11. In Year 11, a net reduction in waste rock storage quantity is expected due to the use of waste rock as erosion protection on the external slopes of the DSF. The waste rock schedule beyond Year 11 has not yet been developed for the full EIA. Figure 18.15: DSF Storage Requirements through Year 11

0.24 3.00 0.22 2.75 0.20 2.50 0.18 2.25 0.16 2.00 0.14 1.75 0.12 1.50 0.10 1.25 0.08 1.00 0.06 0.75 Cumulative Volume (Mm3) (Mm3) Volume Cumulative Incremental Volume (Mm3)0.04 0.50 0.02 0.25 0.00 0.00

Tailings (incremental volume) Waste Rock (incremental volume) Tailings (cumulative volume) Waste Rock (cumulative volume) Total Volume

18.4.2 Waste Classification According to UK legislation, specifically a 2006 extractive waste directive, the DSTF should be classed as a Category A mine waste facility. In order to establish appropriate geotechnical and hydro-technical design criteria, the DSTF has also been assigned a “significant” consequence classification based on dam safety guidelines published by the Canadian Dam Association. 18.4.3 DSF Design The design parameters and design criteria related to the DSF are summarized in Table 18.7. A summary of the main DSF design details is provided in Table 18.8 and a description of the design, with figures, is provided below.

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Table 18.7: Summary of Design Parameters and Design Criteria

Description Value Facility Hazard Classification Category A (UK legislation); Significant (CDA) Waste Rock Production Rate (FS) Varies Waste Rock Storage Requirement1 1.02 Mm3 Tailings Production Rate (FS) Varies Tailings Storage Requirement1 1.86 Mm3 Total Tailings and Waste Rock Storage Requirement (FS) 2.9 Mm3 by volume1 Total Tailings and Waste Rock Storage Requirement (EIA) 4.8 Mm3 by volume1 11 years (FS); 20 years (EIA and planning Production Life1 application)4 Tailings Specific Gravity 2.72 Deposited Tailings Dry Density2 1.6 t/m3 ~15½ - 17½% (geotechnical; ww/ws); Deposited Tailings Moisture Content3 ~13 - 15% (metallurgical; ww/wt) Facility Hazard Classification Category A; Significant (CDA, 2014) AEP for Earthquake Design Ground Motion ½ way between the 1:100 and 1:1,000 year events Peak Ground Acceleration (PGA) 0.02g Short term (Static) 1.3 Minimum Required Stability Long term (Static) 1.5 Factor of Safety During Earthquake 1.0 (Pseudo-Static) Note(s): 1. Provided by JDS. 2. The maximum Proctor dry density from a single test was 1.65 t/m3. Expect lower values in the field. 3. Data from other projects and sources indicate the tailings moisture content as it leaves the plant is generally very close to its optimum moisture content. The optimum moisture content from a single Proctor test was 16.5% as a geotechnical moisture content and 14.2% as a metallurgical moisture content. 4. The EIA footprint includes additional area for potential resource expansion, outside the footprint defined in the Feasibility Study.

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Table 18.8: Summary of DSF Design Details

Description Value DSF Final Layout Platform Elevation 280 masl (FS); 2831 masl (EIA and planning) Platform Width 700 m Maximum Height 54 m Slopes 3H: 1V with 5 m benches every 10 vertical metres Footprint Approx. 28 ha Primary Seepage Barrier HDPE liner Outer Shell Slopes 3H: 1V with 5 m benches every 10 vertical metres Thickness 0.5 m Toe Drain (Buttress) Average Height Nominally 3 to 5 m Outside Slope 3H: 1V Inside Slope 2H: 1V Underdrains Total Length 1 km Overdrains Total Length 3.2 km Seepage collection ditch Total Length 1.2 km Depth 2 m Side Slopes 2H: 1V

The DSF will be underlain by an HDPE liner in order to prevent contact water from seeping into the underlying foundation soils. All peat and topsoil will be stripped from the DSF footprint before the liner is installed. In addition, to enhance the stability of the DSF, underdrains (each of which will have a perforated drainage pipe) will be constructed of NAG waste rock below the liner in the main drainage channels that intersect the site. (Figure 18.15 and Figure 18.16) Above the liner, NAG waste rock will be used to construct a toe drain (Figure 18.17) and a herring-bone system of overdrains to maintain low phreatic levels within the DSF (Figure 18.19). The DSF will be constructed as three staged cells (Stage 1 to 3) to minimize front-end capital costs and facilitate progressive closure (Figure 18.20). For each cell, it is expected that stripping of the peat and topsoil, and installation of the drainage systems and HDPE liner, will be completed before tailings deposition occurs in the respective cell. Filtered tailings and NAG waste rock will be trucked to the DSF, spread with a dozer and compacted with a smooth drum vibratory roller in maximum 0.3 m thick lifts. The DSF platform will be graded at all times to keep water from ponding on the platform surface and to promote the movement of water away from the southern face of the DSF.

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A waste rock outer shell will be constructed progressively on the external surface of the DSF to prevent potential erosion associated with moderate to heavy rainfall. The construction and operation of Cell 1 will occur from Years -2 to 5; from Years 4 to 11 at Cell 2; and from Years 10 to 20 at Cell 3. Incremental to waste rock required for the construction of the underdrains, overdrains, toe drain and erosion-resistant outer shell, additional quantities of NAG waste rock will report to the DSF. Portions of this additional waste rock will be used to construct internal access roads and ramps within the DSF, and potentially as vertical extensions of the overdrains and toe drain to facilitate the drawdown of phreatic levels within the DSF (Figure 18.21). Excess waste rock which is not used for roads and/or vertical drains will be encapsulated as horizontal lifts within the filtered tailings.

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Figure 18.16: Layout of DSF Underdrains (in blue) and Toe Drain (in grey)

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Figure 18.17: Typical Underdrain Section (with perforated pipe, below the HDPE liner in red)

Figure 18.18: Typical Toe Drain Section

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Figure 18.19: Layout of DSF Overdrains (primary in solid green, secondary in dashed green)

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18.4.4 Dry Stack Facility Construction The DSTF will be constructed as three staged cells (Stage 1 to 3) to minimize front-end capital costs and facilitate progressive closure (Figure 18.20). For each cell, it is expected that stripping of the peat and topsoil, and installation of the drainage systems and HDPE liner, will be completed before tailings deposition occurs in the respective cell. Filtered tailings and NAG waste rock will be trucked to the DSTF, spread with a dozer and compacted with a smooth drum vibratory roller in maximum 0.3 m thick lifts. The DSTF platform will be graded at all times to keep water from ponding on the platform surface and to promote the movement of water away from the southern face of the DSTF. A waste rock outer shell will be constructed progressively on the external surface of the DSTF to prevent potential erosion associated with moderate to heavy rainfall. The construction and operation of Cell 1 will occur from Years -2 to 5; from Years 4 to 11 at Cell 2; and from Years 10 to 20 at Cell 3. Incremental to waste rock required for the construction of the underdrains, overdrains, toe drain and erosion-resistant outer shell, additional quantities of NAG waste rock will report to the DSTF. Portions of this additional waste rock will be used to construct internal access roads and ramps within the DSTF, and potentially as vertical extensions of the overdrains and toe drain to facilitate the drawdown of phreatic levels within the DSTF (Figure 18.21). Excess waste rock which is not used for roads and/or vertical drains will be encapsulated as horizontal lifts within the filtered tailings.

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Figure 18.20: Evolution of the Dry Stack Facility

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Figure 18.21: Options for Utilizing Waste Rock in the DSF

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18.4.5 Dry Stack Facility Closure Concept The DSTF will be progressively reclaimed as the facility is constructed in stages from east to west. The conceptual cover design for the DSTF slopes (Figure 18.22) consists of the following layers (from bottom to top):  Above the waste rock erosion protection layer, a 0.2 m thick tailings layer;  Double-textured HDPE liner to limit infiltration if needed after more investigation;  Thick, non-woven geotextile (if required) to protect the top surface of the liner;  A 0.15 m thick sand and gravel layer as a drainage layer;  A 0.5 m thick mixed growth media / topsoil layer to facilitate vegetation establishment; and  A vegetative cover.

The cover design for the final platform and benches is as above, except the drainage layer will be excluded (Figure 18.22). A HDPE liner cover is assumed as worst case scenario, conservative alternative for closure. Further study is recommended to optimize and provide the best option for closure.

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Figure 18.22: Cover Design Option for DSF Closure

18.5 Geochemistry 18.5.1 Introduction SRK has undertaken a geochemical characterization study to assess the Acid Rock Drainage and Metal Leaching (“ARDML”) potential from waste rock and tailings (flotation tails and detox tailings) from the proposed development at the Curraghinalt project, Northern Ireland. This section details the approach taken, presents the main findings of the work and draws conclusions on the potential for acid generation and metal release both during and after mining operations. The purpose for the geochemical study is to ensure that any listed chemical parameters will be appropriately characterized and managed in operations and through closure. The source of the chemical parameters is from naturally occurring minerals in the rock extracted and the natural weathering of these rocks. In addition chemicals used in the mining and extraction of minerals may have residual amounts left on the mine waste rock. These chemicals also require characterization in order to identify appropriate management controls. It should be understood that the findings are predominantly presented in a factual materials characterization context for the test work and modelling that has been progressed in support of the FS. Mitigation measures are currently being finalized to allow for a demonstration that the water environment will be protected through robust impact assessment.

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18.5.2 Methodology A series of short term (‘static’) and longer term (‘kinetic’) geochemical tests were undertaken to allow the geochemical characterization of waste rock and tailings materials. The “static” tests generally comprise of screening tests to determine the magnitude whereas “kinetic” tests allow the development of chemical reactions to be observed and the time related rate of these reactions to be determined. 18.5.3 Waste Rock The ARDML assessment involved two static test work programs conducted in 2013 and 2016. A total of 61 spatially representative core samples (plus four duplicates) were selected from three major lithological units in order to represent the waste rock material; 41 samples were analyzed in 2013 and an additional 24 during 2016. 18.5.3.1 Potential for Acid Generation Acid Base Accounting (ABA) and NAG measurements were made on all of the samples. Paste pH was only reported for the 2013 samples, values ranged from 7.3 to 9.2 with an average paste pH of 8.5 s.u. indicating that the samples were not generating acid at that time. The total sulphur concentrations ranged from 0.01 wt% to 3.31 wt% with an average of 0.26 wt% for the samples collected. Sulphide sulphur content ranged from 0.01 wt% to 3.26 wt% with an average of 0.26 wt% indicating that the majority of total sulphur comprises sulphide sulphur. According to the Directive 2006/21/EC, based upon the sulphide sulphur content, 53 of the samples would be classified as “inert” and 12 “non-inert”. Overall the ABA results showed that 81% were non-acid forming, 8% were potentially acid forming and the remaining 11% were uncertain. The five potentially acid forming samples were distributed throughout the sample area and belonged to two lithology groups, one sample was from the semi-pelite (Ssp) lithology group and four were from the Psammite (Sps) lithology group. Based on the samples collected, the Pelite (Spe) group does not exhibit acid generating potential, with all samples being classified as non-acid forming. 18.5.3.2 Potential for Metal Leaching A two-stage deionized water leach was carried out to assess constituent availability and mobility in the waste rock samples. The results of the leach test can be used to identify the presence of leachable constituents and readily soluble salts stored in the material as well as provide an indication of their availability for dissolution and transport in response to precipitation events. Leachates generated during the deionized water leach test can be classed as ‘near-neutral, low- metal waters’ based on circum-neutral to moderately alkaline pH (7.9 to 9.2) and total Ficklin metal (Cu + Cd + Co + Ni + Pb + Zn) concentrations less than 0.05 mg/L. This supports the findings of the ABA and NAG test work results, which indicate that the majority of waste rock material has low potential for long term acid generation. As part of the NAG test an aggressive hydrogen peroxide leach was undertaken on the samples in order to assess the potential for high level metal release given complete oxidation of sulphide minerals in the samples. The NAG leachate was analyzed for a full suite of metal and metalloid ions.

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18.5.4 Tailings Three tailings samples were generated and analyzed in 2013 (bulk rougher tailings, detox leach tailings and scavenger tailings). Due to changes in the proposed processing method, a further three tailings samples were generated and analyzed in 2016 (bulk rougher tailings, detox leach tailings and backfill tailings). All of the tailings samples underwent a static test work suite similar to the waste rock samples including:  ABA;  Multi-Element Assay of solids;  Deionized Water Leach – the 2013 tailings samples underwent a single batch method using Standard MEND SFE methodology, a liquid:solid ratio of 3:1 is used with agitation for 24 hours. The 2016 tailings samples underwent a standard European two-stage leach test (EN12457-3); and  Net Acid Generation (NAG) with leachate analysis.

The three tailings samples collected as part of the 2013 program underwent humidity cell testing using a standard ASTM D5744-96 protocol.

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18.5.5 Paste Backfill The cemented paste backfill (CPB) samples were constructed from the tailings samples generated in 2016 from pilot test work conducted by JDS. Monolithic leach tests (MLT) were carried out on representative samples of tailings that were blended together in similar proportions to the proposed large scale CPB recipe. The test work was carried out under JDS supervision by the Unité de Recherche et de Service en Technologie Minérale (URSTM) in Quebec. Initially an optimal recipe was determined using process waters, two tailings samples (desulphurized and pyritic / detox tailings) and two binder materials (GU Portland cement and blast furnace slag). The aim was to obtain a mixture that would obtain a mechanical strength of 700 kPa after 7-10 days of curing time. This assessment involved:  Physical, chemical and mineralogical characterizations of the two tailings, the two binders and the mixing water;  Slump curve determination on uncemented paste backfill with the determined ratio of desulfurized and pyritic/detox tailings (75-25 %);  Assessment of the unconfined compressive strength (UCS) of different CPB recipes prepared with the determined ratio of tailings; and  Assessment of paste rheological behaviour with binders at different solid contents.

Once an optimal recipe was established, two CPB mixtures were generated and reactivity rates after 28 days of curing were evaluated. This stage involved:  Chemical and mineralogical characterizations of the CPB recipes after 28 days of curing time including XRF whole rock analysis, acid digestion and ICP to determine chemical composition, ABA testing and mineralogy;  Reactivity testing using a Toxic Characteristic Leaching Procedure (TCLP), Synthetic Precipitation Leaching Procedure (SPLP) and MLT; and  Chemical and mineralogical characterizations of each CPB recipe after MLT.

The two recipes, Slag-GU 70-30 at 5 and 7%, after 28 days of curing were used for the reactivity assessment, mixture characterizations and the MLT. Similar to other short term leach tests carried out on the CPB blocks, the MLT tests showed both mixtures to have a low reactivity and low potential for metal (loid) leaching. However after 36 days a decrease in concentrations of alkaline elements from phyllosilicate minerals such as muscovite, due to lower dissemination rates resulted in a gradual decrease in pH (still above pH 9 after 64 days of MLT) and an increase in sulphate concentrations and EC values. ABA tests classified the leach residues as acid generating with an NNP <-20 kg CaCO3/t but this is mitigated by cementation. Test work revealed that the NNP and metals concentrations did not change significantly before and after the monolithic leaching tests.

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Mineralogical assessment showed that compositions did not alter significantly during the MLT and there was no significant weathering or crack development indicating that the paste backfill should perform well if flooded.

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18.5.6 DSF For the surface facility during LOM, the seepage complies with the most likely groundwater regulations that will be applied for the operation. During LOM, the runoff source term is largely compliant with the likely discharge criteria that will be applied for the project with management required through the water treatment plant for four non-hazardous pollutants (formerly list 2). Post closure the seepage from the facility remains compliant with the most likely groundwater regulations as long as in the long term the infiltration to the facility remains close to or below the levels achieved immediately after closure. The following figure (Figure 18.23) illustrates the conceptual model for the closure of the DSF and the various streams that were modelled. Figure 18.23: Conceptual model of the Post Closure scenario for the DSF

Source: SRK (2016)

18.5.7 Underground Facility During LOM operation the water is pumped from the underground mine and treated before reuse or discharge to the environment. Post closure the dewatering pumps will be switched off and the groundwater allowed to rebound to pre-mining levels. The groundwater is estimated to have rebounded after 55 years and at this point the water will emanate from the existing adit location and (if test work during post closure monitoring indicates) pass through a passive water treatment system before discharge to the environment. It is predicted that the underground mine should maintain hydraulic containment during the rebound phase and after the rebound phase is complete the quality of the water contained within the mine will

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gradually improve (through dilution from shallow and deep GW) as the reactive materials underneath the rebounded water table will not be exposed to air and will not generate ARDML. With a backfill deposition method that ensures that the paste backfill material isolates the majority of exposed wall rock surfaces and that backfilled waste rock where practicable is placed in stopes that will not be continually flushed with water then the majority of parameters are in full compliance with the likely groundwater regulations for the rebounded mine and with the likely surface water discharge criteria that will be applied. This work will be constrained for the Environmental Impact Assessment as necessary. There are four identified parameters that require management during operations and this will be achieved through the proposed treatment plant. Adit chemistry is predicted to be compliant (compared to the most likely project discharge criteria) for all parameters apart from Sn, and Ag that will removed by water treatment. Post the non-hazardous pollutants are not predicted to t cause animpact to GW baseline values. No groundwater samples representative of the deeper level have been sampled at this time; as groundwater mineralization is expected to increase with depth the current modelling is likely conservative.

18.6 Surface Water Management A hydrology and hydraulic analysis was prepared for the maximum extent of the project at the end of mine life. The analysis used the FS mine plan, including the underground design, waste dumps, crusher and process plants, roads and other support facilities. The design uses hydrologic information to estimate runoff volumes, peak flow rates and catchments. The design is not intended to be the final configuration for drainage collection, but simulates a probable configuration relevant to the design scenario presented for the mine site. The calculations outlined below are conservative in terms of total anticipated runoff, pond storage, and conveyance capacity. 18.6.1 Introduction A number of building strategies are to be implemented on the project site to control and limit storm water pollution and runoff. A series of diversion berms and interceptor ditches will be installed across the site to divert clean runoff sourced from the catchments above the project away from the main elements of surface infrastructure. Precipitation falling within the boundaries of the infrastructure areas will be captured in drains and will be diverted to an attenuation pond and interceptor for settlement of suspended solids and removal of oil and grease respectively.

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18.6.1.1 Proposed Infrastructure Area Layout and Catchments The proposed infrastructure area is shown in Figure 18.24. It lies in the headwaters of two small watercourses (Pollanroe Burn and Unnamed watercourse) that drain to the Owenreagh River, which is a main tributary of the Owenkillew River. This area will include the following infrastructure;  Processing plant, stockpile, haul road, crusher, warehouse and car park;  Dry stack tailings and waste rock storage area;  East and west diversion ditches;  Mine water management ponds; east ponds and west pond;  Clean water pond;  Treatment plant; and  Access road to mine site.

The aims of the water management plan can be summarized in three main concepts; 1. Capture, storage and treatment of all water, potentially of poor quality, which is in contact with mining activities and infrastructure; 2. Limit natural runoff from outside of the proposed infrastructure area from contacting the mine infrastructure in order to reduce water volumes needing to be treated; 3. Capture of clean (non-contact) surface water runoff from upslope and within the proposed infrastructure area to be available for fresh water use in the mining operations. Ore processing will require fresh water input; it will be possible to provide most of this by treated contact water, but there will be a need for approximately 9 m3/hour (2.5 L/s) of additional fresh water.

The proposed infrastructure area will be bounded to the north, east and west by berms and associated ditches (Figure 18.25) that will capture natural surface water runoff from catchments upslope of the proposed infrastructure area (Figure 18.26) and route it away from contacting with mine site infrastructure: Flows from the north of the proposed infrastructure area will be routed to a clean water pond located to the north-east of the mine site area. Water will be stored in the clean water pond (with a capacity of 67,500 m3) to be a source of additional make-up water for the ore processing and to maintain a minimum flow in the Pollanroe Burn, which is located directly south of the mine site, where treated water will report to and be discharged.. Water will also be discharged from the clean water pond as a compensation flow to the Pollanroe Burn. The clean water pond will also have a spillway to allow for free overflow during extreme events or should the pond be full.  The diversion berm along the eastern edge of the proposed infrastructure area will capture surface water from hillslopes located on the eastern side of the catchment, and route it around the periphery of the mine to ultimately discharge into the Pollanroe Burn on the slopes below;  The diversion ditch along the western edge of the DSF will capture surface water runoff from the slopes on the western side of the catchment. For the FS mine design, this water will be routed to

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the west pond, which is located on southern edge of the DSF \, so that it can provide additional fresh water for use in the mine.

Runoff landing within the mine site area will be routed through a series of ditches to three water storage ponds.  The upper east (20,500 m3 capacity) and lower east ponds (27,700 m3 capacity) will receive surface water runoff and seepage from the mine infrastructure area and that part of the DSF footprint that will receive waste during the LOM. The ponds will also receive water pumped from the underground workings, as well as groundwater entering the basal drain to the waste rock. Runoff from these areas will need to be treated before discharge. The ponds are provided with spillways for emergency safety conditions. However, during operations, there should be zero uncontrolled discharge from these ponds.

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 The west pond (29,800 m3 capacity) receives runoff from the part of the DSF that will not be utilized for waste storage during LOM (11 years). It will also receive runoff from the west diversion ditch. Water within the west pond will be used as make-up water in the process plant. As the water in the pond will be fresh from undeveloped ground, there will be no need to treat the water before use, or provide any storm water attenuation. Excess water entering the pond will be allowed to flow over the spillway to Pollanroe Burn.

A water treatment plant will be located to the south of the east and west water ponds. Water from the treatment plant will be pumped back to the process plant to be used as make-up water. Any excess treated water will be discharged to the Pollanroe Burn close to the treatment plant. All water released to the Pollanroe Burn will need to be of sufficient quality to meet the site water permit. The water treatment plant proposed at the site will be based on reverse osmosis (RO) technology, with a two-stage RO system to meet water quality requirements at the site. The plant will be designed by JDS. The proposed system will include a crystallizer to limit the volume of the plant effluent. Many RO systems have a brine waste, but the proposed system will have a solid residue with water losses of less than 0.5% of the inflow to the treatment plant. Drinking and other sanitary water will be provided by a piped mains water supply. Sewage will be treated and discharged to the Pollanroe Burn at the same location as effluent from the water treatment plant used for treating mine water. Drinking, sanitary water and sewage will be kept on a separate system different from the mine water management system. The DSF will be progressively developed from east to west across the mine site, with Figure 18.23 illustrating the approximate evolution of the facility over time. It is noted that at the end of the FS mine life, there will be no waste material stored in the western part of the site. The facility will have a basal liner, with a sub-drain below the facility. The sub-drain will receive any water seepage from the waste rock and tailings area and local groundwater. A series of internal drains will route any seepage water within the facility to the east pond. The DSF will be progressively reclaimed and will be covered by an engineered liner (HPDE liner is a possible option) and soil cover. More information on the DSF can be found in Section 18.4 of this report. The evolution of the planned DSF in terms of catchment areas draining to the east and west ponds are outlined in Table 18.9. Other key catchments envisioned to be flowing to each part of the mine are summarized in Table 18.10. Water management infrastructure within the site has been designed for a 1 in 100-year storm event.

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Table 18.9: Evolution of Catchments Draining to the East and West Ponds from the Dry Stack Area

West Pond Catchments (km2) East Pond Catchments (km2) End of Year Natural Active Reclaimed Dry Natural Active Reclaimed Dry Catchment Dry Stack Stack Catchment Dry Stack Stack a-1 0.088 0 0 0.15 0.045 1 0.088 0 0 0.086 0.105 5 0.088 0 0 0.077 0.114 b9 0.088 0 0 0 0.132 0.057 11 0.088 0 0 0 0.134 0.057 a Waste rock deposited in waste rock and tailings storage area in Year -1 b Assumed that by end Year 9 half of area of Cell 1 will be reclaimed. This is assumed and not based on any current closure plan. Table gives areas at end of given year

Table 18.10: Summary of Key Catchments draining to East and West Ponds

Catchment West Pond Catchments (km2) East Pond Catchments (km2)

Dry Stack Area 0.088 0.191 Mine infrastructure (disturbed) 0.1 Mine infrastructure (natural) 0.025 0.075 Roads 0.01 Diverted natural catchments 0.06 Pond Areas 0.005 0.005 Source: SRK (2016)

18.7 Mine Water Demands and Supply The mine water requirements are summarized in Table 18.11. These are based on several components of the process water balance, and are assumed to be constant through the mine life. The characterization and hydrological analysis of the mine area and surrounding catchment has shown that it is possible for the bulk of this make-up water to come from runoff, both within the footprint of the mine and from the surrounding catchments, with the residue coming from inflows to the underground mine. This is supported by the results of a detailed mine water balance that demonstrate there is a low risk of water shortage at the mine site.

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In terms of water supply for the operation, treated mine water is considered as the first source of fresh/clean water within the mine site. If there is insufficient treated water, then water will be sourced from the west pond first, and the clean water pond subsequently. Table 18.11: Mine Make-up Water Requirements

Requirement Rate (m3/hr) Comment Process Water 22.16 Needs to be fresh or treated water Reagent Water 2 Needs to be fresh or treated water Gland Water 7.5 Needs to be fresh or treated water Does not need to be fresh or treated Spray Water 10 water. Can be recycled from Process Plant Water required for dust suppression or Other 1 other use Total Required 42.66 10 m3/hr can be untreated for Spray Water recycled within system 23.54 Water. Other 13.54 m3/hr needs to be treated before reuse Fresh water, either treated or from ‘New’ Water Required 19.12 fresh water storage

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Figure 18.24: Mine Site Area showing Main Catchments

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18.8 Surface Water Hydrology Predictions of monthly flow rates from the mine site area and surrounding catchments are based on:  Analysis of gauged flow data for watercourses close to the mine site. This includes data collected as part of the baseline monitoring program (SRK, February 2017) and from the Rivers Agency national gauged flow data set; and  Development of methods for calculating runoff for mine site areas, i.e., from tailings and waste rock area and natural (peat dominated) catchments.

As the water balance is based on monthly data input, the analysis focusses on monthly and annual totals. There are four key types of catchment planned at the mine site;

1. Natural undisturbed catchment areas: these are almost entirely covered in peat of varying depth; 2. Exposed tailings/waste rock: these are the parts of the tailings and waste rock dry stack area undergoing active creation and are composed of exposed, un-vegetated tailings and waste rock; 3. Reclaimed tailings/waste rock: once active deposition has been completed, the dry stack areas will be reclaimed through the placing of a soil cover; and 4. Plant site and roads: hard standing areas or disturbed ground with higher runoff totals.

The approaches taken to calculate the runoff and seepage rates for the water management ponds are described below. 18.8.1 Runoff from Natural Peat Catchments A key control for runoff from peat catchments is the moisture content in the upper layers of the peat. In turn, these depend on the rainfall and evaporation impacting the peat in the days prior to any rainstorm. In order to model this process, a simple hydrological model was used, which represents the peat surface as a series of water storage units in which the water level responds to rainfall and evaporation. The model was then run for the last 50 years. The soil conditions in the model were varied to produce a good fit to expected monthly and annual runoff rates, predicted from the available gauged flow data. The model predictions are summarized in Table 18.12. These show that the model reproduces annual runoff totals similar to those generated for the low annual target runoff in Table 18.13.

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Table 18.12: Runoff from Natural Peat Catchment

Likelihood of Exceedance Modelled Annual Runoff (mm) Target Runoff (mm) Return Period (%) Natural Peat Catchment Low High 99.50 1 in 200 dry 341 385 495 99 1 in 100 dry 375 415 534 98 1 in 50 dry 412 449 577 95 1 in 20 dry 468 499 641 90 1 in 10 dry 518 543 698 80 1 in 5 dry 578 597 768 50 Median 693 700 900 20 1 in 5 wet 808 803 1032 10 1 in 10 wet 868 857 1102 5 1 in 20 wet 917 901 1159 2 1 in 50 wet 973 951 1223 1 1 in 100 wet 1010 985 1266 0.50 1 in 200 wet 1045 1015 1305

18.8.2 Runoff from Disturbed Mine Site Areas Disturbed mine site areas will include the process plant, offices and associated parking areas. At the detailed design stage, it is assumed that these areas may have their own local attenuation and drainage systems. It may also be possible to route runoff from areas that do not contact with mine material (e.g., worker’s car parks) direct to the environment with local treatment (settlement). This would reduce the flows to the east pond. However, in this assessment, it is assumed that all runoff will be routed to the east pond. It is assumed that these areas have an annual runoff rate of 75% of annual precipitation, with runoff distributed consistent with the average monthly runoff in Table 18.13. This is considered suitable for annual runoff calculations. For storm water calculations, a runoff rate of 90% is considered for the disturbed areas. 18.8.3 Dry Stack Infiltration and Runoff Rates The dry stack area will be comprised of a mix of waste rock and non-reactive tailings. There will be a basal liner that will prevent infiltration to the subsurface and a series of drains that will route seepage water and surface water runoff to one of the east ponds. The dry stack areas will be progressively reclaimed, with the mine material capped by an impermeable liner with a vegetated soil layer on top. The sequencing of the formation of the dry stack is summarized in Figure 18.23. The dry stack has been designed by SRK Consulting and details of the designs are provided in the report titled: Curraghinalt Project – Dry Stack Facility Feasibility Design Report. The following infiltration rates for the dry stack pre- and post-cover placement were taken into consideration for the design, as listed in Table 18.13.

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Table 18.13: Infiltration Rates for Dry Stack Facility

Infiltration Rate1 Surface Comments (%) Waste rock comprises 45 to 50% of mine Waste rock – no cover 50 waste reporting to the DSF in five of the first seven years Ensure a layer of tailings is present on Tailings – no cover 30 the crest of the DSF before the cover is installed Consists of a mixture of topsoil and peat Rudimentary cover 25 to 30 obtained from stripping within the DSF footprint Engineered cover (to be Includes an HDPE geomembrane, hence 0.50 investigated more) the very low infiltration rate Note 1: Infiltration Rate = % of Mean Annual Precipitation (MAP) Source: SRK (2016)

An infiltration rate of 40% has been considered for the active dry stack (average of values for tailings and waste rock), with only 0.5% seepage into the reclaimed cover, assuming a soil layer with HDPE membrane below. This will be confirmed in detailed engineering.

18.9 Groundwater and Underground Water Inflows The flow rate from the underground workings is summarized in Table 18.14, and is based on groundwater modelling data provided by SRK. Table 18.14: Underground Water Inflow Rates

Year Underground flow (L/s) 1 5.39 2 8.33 3 10.26 4 8.59 5 7.37 6 7.29 7 7.87 8 10.46 9 10.14 10 8.76 11 8.25 Source: SRK (2016)

Groundwater is also expected to enter the underdrain of the dry stack area, with SRK predicting a ground water inflow of 190 m3/day. This water will be routed to the east pond.

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18.10 Flood Storage Requirements A storage volume of 23,600 m3 is calculated for a 1 in 100 year 24-hour storm event + 20%. The east ponds will need to be operated with at least this volume of water available in the ponds for storm water storage. The calculations assume that the treatment plant is operating during the event and is able to remove water from the pond at a rate of 160 m3/hour. If the water level in the ponds rises close to the spill level, the following emergency measures will be available;  Water from the east pond is pumped underground for emergency storage in the underground workings. Water is to be pumped back to the surface after the end of the flood event;  Water from the east pond could be pumped to the west pond for emergency storage. This would require the west pond to be operated in winter months as a flood storage facility, with water levels held as low as possible. It would be possible to divert all inflows to the west pond around the pond to the Pollanroe Burn and have the water level in the west pond lowered by pumping.

These calculations have been undertaken based on the assumption that the ponds will need to be operated to provide storage for a 24-hour rainfall event with a 1 in 100-year return period + 20%. However, there is a risk that regulators may require additional storage, since the ponds will contain poor quality water. While this will be determined during the permitting process, this study has also conducted sensitivity runs for a 1 in 1000 year 24-hour storm to pre-empt such concerns. The results suggest that it is possible to control a storm of this magnitude through lowering the operational level of the ponds.

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Table 18.15: Summary of Model Inputs

Model Parameter or Method Description Physical Parameters Mine Life Clean Water Pond = 67,500 m3 Upper East Pond = 20,500 m 3 Pond Volumes Lower East Pond = 27,700 m3 West Pond = 29,800 m3 Consistent with rates and methods described in Runoff Rates Section 18.1. Catchment Areas Based on Section 18.6 and Section 18.7 The east pond (mine water pond) will be operated at a level that provides sufficient flood storage to allow Freeboards in East and West Ponds retention of a 1 in 100-year rain event without spilling to the environment. The ponds will need to be operated with a freeboard of 23,600 m3 Water Management Mine Water Demand See Table 18.11 160 m3/hour The model tries to maximize the treatment rate where Maximum Treatment Rate possible to keep the water levels in the east ponds below the required operating level for storm water storage as low as possible (to reduce the risk of spillage) Treated water is used to provide fresh water make-up Discharge of Treated Water to the process. Any treated water that is not required for the process is discharged to the Pollanroe Burn A compensation flow is discharged from the clean water pond at a constant rate of 12.7 m3/hour, Compensation Flow equivalent to the 95th percentile flow for the mine site area. This is to maintain flows in the watercourse downstream of the mine Not modelled as no information is available to date. Seepage from Impoundments However, volumes considered were small compared to overall balance

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18.11 Mobile Equipment Mobile site support equipment provides support to operations at the Curraghinalt site. A list of site support equipment is provided in Table 18.16. Table 18.16: Site Support Equipment

Equipment Description Quantity Diesel Pick-up Truck – Toyota PC 6 5 T Telehandler 1 10T Picker Truck 1 Water Truck 1 Tractor w/ Deck Trailer 1 44 Passenger Bus 1 Tool Carrier - Cat 966K (c/w Attachments) 1 Skid Steer Loader (1Cu.M) 1 Excavator (~2.0 CU.M) 1 Rock Breaker Attachment 1 3 T Forklift - Warehouse - CAT 2DP6000 1 65ft Man-Lift - Genie S-65 1 65T Crane (Rental) 1 Source: JDS 2016

18.12 Manpower The site support manpower crew will provide support to the operations and will be responsible for the following activities:  Infrastructure facilities maintenance and repairs;  Transferring of freight from the storage areas to the warehouse and operation centres;  Waste management duties (water treatment, hazardous waste handling);  Plant site snow removal;  Site water management; and  Surface road maintenance.

Table 18.17 provides the composition of the site support crew.

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Table 18.17: Site Support Manpower Crew

Labour Position On-site Labour

Surface foreman 1 Facilities maintenance - tradesman 1 Electrician 1 Mobile equipment operator 1 Labourers/apprentices 2 Mobile equipment operator – road maintenance 1 Total support crew (on-site) 7 Source: JDS (2016)

18.13 G&A Personnel The General & Administrative crew will provide support in the areas of management and administration, accounting, Human Resources and community relations. Table 18.18 lists the composition of the G&A personnel. Table 18.18: G&A Personnel

Position Staff/Hourly Quantity G&A Management & Administration Mine General Manager Staff 1 Site Administrator Staff 1 Subtotal – Management & Administration 2 Accounting Controller Staff 1 Accounting & Taxes Manager Staff 1 Accounting Coordinator Staff 2 Subtotal - Accounting 4 Human Resources & Training HR Superintendent Staff 1 HR Coordinator Staff 1 Trainer Staff 2 Subtotal – HR & Training 4 Community Relations Manager, External Affairs Staff 1

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Position Staff/Hourly Quantity Community Relations Coordinator Staff 1 Subtotal - Community Relations Staff 2 IT & Communications IT/Telecom. Technician Staff 2 Subtotal - IT & Communications 2 Procurement & Logistics Procurement/Contracts/Logistics Manager Staff 1 Procurement/Contracts Agent Staff 1 Logistics Supervisor Hourly 1 Warehouse Operators Hourly 2 Multi-Equipment Operator Hourly 1 Subtotal - Logistics 6 Health & Safety Health, Safety, and Security Manager Staff 1 Health & Safety Coordinator Hourly 2 Subtotal - Health & Safety 3 Environment Environmental Manager Staff 1 Environmental Technician Staff 2 Subtotal - Environment 3 Security Security Officer (Gate/Mags, Full Time) Contract 2 Subtotal - Security 2 Facilities Management & Maintenance Site Services Foreman Staff 1 Electrician Hourly 1 Multi-Equipment Operator Hourly 1 Skilled Labourers Hourly 2 Subtotal - Surface Infrastructure & Maintenance 5 Total G&A 33 Source: JDS (2016)

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19 Market Studies and Contracts

JDS obtained current indicative terms for payable metal, treatment and refining charges from a leading precious metal merchant for the anticipated doré production from the Curraghinalt project. The terms were reviewed and found to be acceptable by QP Indi Gopinathan, P. Eng. Detailed market studies on the potential sale of gold from Curraghinalt were not completed. No contractual arrangements for shipping, port usage, or refining exist at this time. Table 19.1 outlines the terms used in the economic analysis. Table 19.1: NSR Assumptions Used in the Economic Analysis

Assumptions Unit Value Au Payable % 99.95 Ag Payable % 99.00 Au Refining Charge US$/oz 2.26 Source: JDS (2016)

19.1 Metal Prices The precious metal markets are highly liquid and benefit from terminal markets around the world (London, New York, Tokyo, and Hong Kong). Historical gold and silver prices are shown in Figure 19.1 and 19.2, and demonstrate the change in metal prices from 2000 to 2016. Figure 19.1: Gold Price History (Kitco Spot)

Source: JDS (2016)

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Figure 19.2: Silver Price History (Kitco Spot)

Source: JDS (2016)

Historical average exchange rates are shown in Figure 19.3, Figure 19.4 and Figure 19.5. Figure 19.3: Noon US$:C$: Foreign Exchange Rate – Bank of Canada

Source: JDS (2016)

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Figure 19.4 - Noon US$:GPB: Foreign Exchange Rate – Bank of Canada

Source: JDS (2016)

Figure 19.5 - Noon US$:EUR: Foreign Exchange Rate – Bank of Canada

Source: JDS (2016)

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The gold price used in the economic analysis is based on the spot rate during November 2016, sourced from Kitco. The exchange rates used in the economic analysis are based on the spot rates during November 2016. A sensitivity analysis was completed as part of the overall economic analysis. The results of this are discussed in Section 23. Table 19.2 outlines the metal price and exchange rate used in the economic analysis. Table 19.2: Metal Price and Exchange Rate used in the Economic Analysis

Assumptions Unit Value Au Price US$/oz 1,250 Ag Price US$/oz 17 F/X Rate US$:C$ 0.75 US$:GBP 1.20 US$:EUR 1.05 Source: JDS (2016)

19.2 Contracts 19.2.1 Royalties There is a 2% net smelter return royalty (NSR) on the property, payable to Minco Plc. In addition, the Crown Estate Commissioners Royalty (CEC) of 4% is applied to recovered gold and silver.

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20 Environmental Studies, Permitting and Social or Community Impact

20.1 Introduction This chapter identifies the environmental approvals required to proceed with the Curraghinalt project and the status of the studies that are being undertaken to provide the supporting documentation for the approvals. It also identifies key environmental and social issues, corresponding management requirements and mine closure requirements.

20.2 Project Location The Curraghinalt project is located in County Tyrone in Northern Ireland, approximately 15 km northeast of the town of Omagh, 7 km east of the village of Gortin and between the hamlet of Rouskey and the village of Greencastle. The location of the Curraghinalt deposit in Northern Ireland is shown in Figure 20.1. Figure 20.1: Location of the Curraghinalt Project

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20.3 Environmental Approvals Required to Proceed with the Project The primary approvals required to proceed with the Curraghinalt project are a mining licence (Section 20.3.1) and planning permission (Section 20.3.2). Planning permission has to be obtained before a mining licence can be granted. Completion of an Environmental Impact Assessment (EIA) process and submission of an Environmental Statement (ES) (Section 20.3.3) and a mine waste management plan (Section 20.3.4) are prerequisites to the submission of the application for planning permission. 20.3.1 Mining Licences The Department for the Economy (DfE) administers Prospecting Licences and mining licences for exploration and development of base metals and other minerals through the Mineral Development Act (Northern Ireland) of 1969. The Geological Survey of Northern Ireland (GSNI) supports and advises DfE. Precious metals such as gold and silver belong to the Crown Estate Commissioners CEC. Thus, licences for mining precious metals also have to be obtained from the CEC. Normally, once DfE has issued a licence, CEC will issue a concurrent licence. Dalradian currently has six Prospecting Licences as outlined in Section 4 to progress from exploration to development, Dalradian will apply for the mining licences from DfE and CEC. When considering applications for mining licences, DfE investigates the technical and financial resources of the applicant and takes advice from appropriately qualified mining consultants to ensure that the proposed mine design is based on adequate geological data, and that potentially hazardous conditions have been located and defined. The DfE also consults other regulatory authorities, including the Health and Safety Executive for Northern Ireland about the safety aspects of the proposed mine. 20.3.2 Planning Permission 20.3.2.1 Requirement The planning application for the Curraghinalt project will be submitted by Dalradian to the Department for Infrastructure (DfI). The decision to grant planning permission will be taken by DfI in terms of the Planning Act (Northern Ireland) of 2011. This Act came into force in April 2015. Although the Act transferred most planning functions from central government to district councils, the DfI remains responsible for processing planning applications deemed to be of regional significance. Dalradian received confirmation in May 2015 (from the then Department of the Environment) that the Curraghinalt project is classified as a regionally significant development. The DfI will take the decision on granting planning permission with reference to the planning application and supporting documentation and in consultation with interested regulatory authorities referred to as “statutory consultees”. The supporting documentation must include a record of consultation with other stakeholders including local communities. Section 27 of the Planning Act (Northern Ireland) 2011 requires that Pre-Application Community Consultation (PACC) is undertaken for a major/ regionally significant development. As part of this requirement, developers need to submit a Proposal of Application Notice (PAN) to the planning authority at least 12 weeks before submitting a formal planning application.

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The PAN should explain the nature of the proposed development and the proposed community consultation with details on who will be engaged, the form of the engagements and timetable for the engagements. The planning authority has 21 working days to respond to the PAN and comment on the proposed community consultation. 20.3.2.2 Status Dalradian aims to submit the planning application to the DfI in 2017 following completion of the ES (Section 20.3.3) and the mine waste management plan (Section 20.3.4). The PAN for the Curraghinalt project was submitted to DfI in August 2016 and the formal PACC events were undertaken in November 2016. The stakeholder engagement for the Curraghinalt project is not limited to the formal PACC. A stakeholder engagement program is being implemented for the project to meet the requirements of the planning and EIA processes as well as the wider project activities. Statutory consultees are being engaged through DfI as part of the process of Pre-Application Discussions (PADs) which has been ongoing since 2015. Consultation with other stakeholders is managed by Dalradian. Dalradian has a team of community liaison officers and has been engaging local communities for over four years. The supporting documentation that will accompany the planning application is listed in Table 20.1. The parties responsible for assisting Dalradian with the compilation of the supporting documentation are also identified in this table. Principal consultants are:  Turley, a planning consultancy that is well established in Northern Ireland - responsible for collation of the planning application; and  SRK Consulting (UK) (SRK), which is responsible for coordination of the EIA process and compilation of the ES report and the mine waste management plan.

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Table 20.1: Components of the Planning Application Package

Responsible organization/ Components Documents author (on behalf of Dalradian) Guide to the Application Turley Application Covering Letter Turley Planning Application Fee Turley Planning Application Forms including P1 and P1B (Additional Information Turley Required in Respect of Applications for Mineral Workings) Transport Assessment Form Hoy Dorman Design and Access Statement Turley Pre-Application Community Turley Planning Submission Consultation (PACC) Report Planning Statement Turley Sustainability Statement Turley Economic Report Quod Travel Plan Hoy Dorman SRK Consulting (UK) (SRK) Mine Waste Management Plan (collated by SRK with design inputs from JDS and SRK) Planning application drawings – see below Shadow Habitats Regulations Corvus Consulting Assessment ES Chapters, Appendices, Figures and Non-Technical Summary – refer to the ES table of contents The ES includes an Environmental SRK (and appointed specialists) and Social Management Plan for the Construction and Operational Phases of the Project (Chapter 9) Detailed Project Description, including SRK (collated by SRK with input a Construction Method Statement from JDS) Cyanide Management Plan Wardell Armstrong Environmental Statement Mine Waste Management Plan JDS (with input from SRK) SRK (plan) and JDS (cost Mine Closure Plan and Cost Estimate estimate) Landscape Management Plan Land Use Consultants (LUC) Ecological Management Plan SLR Consulting (SLR) Peat Management Plan SLR Shadow Habitats Regulations Corvus Consulting Assessment Economic Report Quod Turley, Hoy Dorman, Teague & Planning and architectural drawings Sally, Hatch Drawings Landscape drawings LUC Engineering drawings Hoy Dorman, Allnorth Pollution Prevention & Control Permit PPC Application Form Wardell Armstrong Application Supporting Information Wardell Armstrong

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20.3.3 EIA Requirement 20.3.3.1 Requirement The requirements for an EIA in Northern Ireland are set out in the Planning (Environmental Impact Assessment) Regulations (Northern Ireland) 2015, which enact the EU EIA Directive (Directive 2011/92/EU). These regulations define what projects should be subject to EIA, the information to be included in the ES, who should be consulted as part of the EIA process, and the procedures for submitting and advertising an EIA. In Northern Ireland, the ES is not subject to a specific EIA approval decision as is the case in many other countries. Instead, it is a supporting document that informs the decision to grant planning permission. The Curraghinalt project is classified as an “EIA development” in terms of Schedule 2 of the EIA Regulations. The EIA Regulations include provisions for stakeholder engagement, including optional opportunities for engagement prior to EIA report submission and mandatory engagement activities following submission. Once the ES is submitted, the developer (Dalradian in the case of the Curraghinalt project) must make it available for review by the public. The planning authority will publish notice of the planning application by local advertisement and will allow the public to provide representations within four weeks. The notice will include details on where the ES can be viewed or obtained. The planning authority will also consult the district council and other authorities, providing at least four weeks for bodies to make representations. The planning authority may also request further information from the developer relating to the ES at this stage. The developer should provide further information within three months of the request, unless otherwise agreed in writing. If further environmental information is required and provided, another consultation period commences. If a public local inquiry or hearing is called by the planning authority to consider representations made on the application, the Planning Appeals Commission (PAC) will publish notice of the event by stating the time, date and place of the inquiry or hearing and the arrangements for making representations. The PAC will report back to the Minister for Infrastructure with a recommendation. The Minister will make the final decision on the planning application having regard to the PAC recommendation, although he/she is not bound by it. 20.3.3.2 Status The EIA for the Curraghinalt project is well advanced. The baseline studies have been completed and the impact studies are being completed. The EIA will be documented in an ES, which will be finalized in Quarter 1 of 2017. SRK is responsible for overall management of the EIA process, which has involved coordination of a team of specialists responsible for conducting baseline and impact assessment studies across a range of environmental and social disciplines. The consultancies contributing to the EIA are identified in Table 20.2. An EIA scoping report was produced to enable both regulatory authorities and other stakeholders to comment on the scope of the EIA. In December 2015, SRK/Turley submitted a request to DfI to provide a formal scoping opinion on the scope of the EIA.

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Comments were received from various regulatory authorities over the period January to March 2016 and a formal response was received from the DfI on 9 August 2016. These comments and the comments recorded during the PACC process have been taken into account in the preparation of the ES. Table 20.2: Consultancies Contributing to the EIA

Role Company EIA Coordination SRK Consulting (UK) Ltd Air quality Envest Environmental Ltd. Archaeology and cultural heritage Gahan and Long Ltd Climate SRK Consulting (UK) Ltd SLR Consulting Ltd and Penny Ecology Anderson Associates Groundwater SRK Consulting (UK) Ltd Health RPS Group Plc (RPS) Landscape and visual Land Use Consultants Specialists Noise and vibration Envest Environmental Ltd. Radon and naturally occurring RPS Group Plc radioactive material (NORM) Socio-economic Quod Soils SLR Consulting Ltd. Kaya Consulting Limited and Surface water SRK Consulting (UK) Ltd Traffic and transportation Hoy Dorman Limited

20.3.4 Mine Waste Management Plan 20.3.4.1 Requirement A mine waste management plan has to be submitted concurrently with the planning application in terms of the Planning (Management of Wastes from Extractives Industries) Regulations (Northern Ireland) 2015. These mine waste regulations transpose the EU Mine Waste Directive. The aim of this directive is to prevent, or reduce as far as possible, the production of waste and the potential harmful effects of such waste on the environment and human health. Information to be included in mine waste management plan is defined in Regulations 6, 9, 12 and 13 of the mine waste regulations. For each waste stream, the plan must include details on:  The source of the waste, and intentions to minimize, treat and/ or recover waste;  Waste characterization;  Waste transport and deposition methods;  Potential impacts on environment and human health;  Design and management of the waste disposal facilities and activities:

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 Detail of control and monitoring measures to secure the stability of the waste and to prevent pollution of air, soil, surface water and groundwater; and  A plan for closure. Any proposed Category A facilities at the mine site need to be clearly identified. Waste disposal facilities are classified as Category A facilities if:  Failure of the facility or incorrect operation could give rise to a major accident as determined by means of a risk assessment;  Any contained waste is classified as hazardous;  And/or it contains any substances classified as dangerous.

Where Category A facilities are to be developed, the waste management plan must include a major accident prevention policy, safety management system and internal emergency plan. Regulation 8 of the mine waste regulations requires that there is a financial guarantee in place for the closure of the mine waste facility prior to commencement of mine waste management operations. Regulations 9(1)(e) and (f) require that the planning authority ensures that there are suitable arrangements in place for closure of the facility and Regulation 15 requires the planning authority to determine the quantum and form of financial guarantee. With respect to closure cost estimation, it is noted that Section 76 of the Planning Act (Northern Ireland) 2011 can require developers undertake specific actions and/or provide financial assurances. Section 76 also states that where financial assurances are required, they should be in the form of a payment of a specified amount or an amount determined in accordance with the instrument by which the agreement is entered into and, if it requires the payment of periodical sums, require them to be paid indefinitely or for a specified period. 20.3.4.2 Status The mine waste management plan for the Curraghinalt project is being collated by SRK. Information for the mine waste management plan is being provided by the project engineers (JDS and SRK). The mine waste management plan includes:  The dry stack tailings facility (DSF), for dry stack tailings and waste rock placed on surface;  Paste backfill placed in the mine workings; and  Ponds on the proposed surface infrastructure site.

The design proposals for these facilities take account of relevant legislation. Geochemistry studies have been undertaken to inform the design of these facilities as discussed in Section 18.5. The final classification of wastes and categorization of the DSF and paste backfill are still to be completed. Mitigation measures will ensure the facilities do not fail and do not result in the pollution of surface waters.

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20.3.5 Other Environmental Approvals Dalradian will be required to obtain various environmental consents for the project. Consents required for the Curraghinalt project that have been identified to date are listed in Table 20.3. For the power line to the project site, Northern Ireland Energy (NIE) Networks will apply for approval to develop the power line from the Strabane substation to the project site. The primary approvals required are:  Planning permission from both Fermanagh & Omagh District Council and Derry City and Strabane District Council, under the Planning (Development Management) Regulations (Northern Ireland) 2015;  Consent for the installation and keeping installed of an overhead electric line from the DfE, under Article 40 of the Electricity (Northern Ireland) Order 1992.

Table 20.3: Required Environmental Consents to be obtained by Dalradian

Activity Responsible Regulatory Authority Consent Required Fermanagh and Omagh District Storage of hazardous substance Hazardous Substances Consent Council (FODC) or call in by DfI Department of Agriculture, Environment & Rural Affairs (DAERA) Water discharge – Water Management Unit of the Discharge Consent Northern Ireland Environmental Agency (NIEA) Storm water discharge DfI – Rivers Agency Schedule 6 Consent Alteration to watercourse DfI – Rivers Agency Schedule 6 Consent Mine dewatering DAERA – All of NIEA Abstraction Licence Internal access DfI Abandonment Order Pollution prevention DAERA – IPRI of NIEA PPC Permit Storage of explosives Department for Justice Explosives Licence Department for Communities - Historic Excavation Excavation licence Environment Division Control of Major Accident Hazards Processing plant Health and Safety Executive NI (COMAH) Consent Sewage disposal Northern Ireland Water Consent to Discharge Private water supply Northern Ireland Water New Water Connection Radioactive substances DAERA – NIEA Radioactive Substances Consent Transporting waste on public road DAERA – Waste Management Unit Waste Carriers Licence Pollution Prevention & Control Supporting Information Wardell Armstrong Permit Application

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20.3.6 Historical Planning Approvals and Associated Liabilities In 1987, planning permission (K/363/86) was granted to construct underground exploration tunnels, including a portal entrance on the hillside, an adit, three underground headings, stockpiles (topsoil, soil and rock), and ancillary buildings. The planning permission was implemented and following the exploration program, the site was fully restored with the exception of the ventilation shaft, the adit and the underground exploration tunnels. In January 2014, Dalradian obtained planning permission (K/2013/0072/F) to establish an exploration compound, upgrade the existing access, and extend the underground exploration workings in order to access and define the deposit and to sample the mineralized material for off-site metallurgical testing. The program associated with the planning permission is still being implemented. The planning application for the underground exploration program set out three potential scenarios for decommissioning and restoration of the site. The scenario now applicable to the Curraghinalt project is that where the majority of the current site infrastructure will be retained. Under the new planning application, the existing exploration infrastructure will be incorporated into the mine development.

20.4 Environmental and Social Setting Detailed information on the setting of the Curraghinalt project has been collected by means of specialist investigations. There have been two main suites of baseline studies for the Curraghinalt project. The first suite was undertaken over the period 2011 and 2013 primarily to provide a baseline for the underground exploration program, but also to provide information for future mine planning. The studies were led by SLR. The second suite of baseline studies focused on the environment of the proposed mine development described in this ES. These studies were undertaken over the period 2015 and 2016. They were coordinated by SRK (Section 20.3.3). The second suite of studies takes account of the 2011 – 2013 program; it builds on the available data and provides more detailed information on areas that could be impacted by the proposed mine development. The following sections briefly outline the setting of the project taking account of information that has become available from the baseline studies. 20.4.1 Regional and Local Setting The regional and local settings of the Curraghinalt project are shown in Figure 20.2 and Figure 20.3, respectively. The project is located on the southern edge of the Sperrin Mountains, an upland region in Northern Ireland. The mine and infrastructure areas are located within an area comprising a topographic ridge that includes the high points of Mullydoo (325 m above ordnance datum – AOD), Crocknamoghil (335 m AOD) and Crockanboy Hill (287 m AOD). The ridge forms the drainage divide between the Owenkillew and Owenreagh Rivers, which originate in the upland areas of the Sperrin Mountains further to the east of the proposed mine and infrastructure areas.

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There are a number of sensitive features in the project environment that have been taken into account in the design of the project. Key features are as follows:  The project is located in the Sperrin Area of Outstanding Natural Beauty (AONB);  The Owenkillew and Owenreagh Rivers are within the River Foyle and Tributaries Special Area of Conservation (SAC), which supports a significant presence of Atlantic salmon (Salmo salar) and otter (Lutra lutra);  The Owenkillew River is also a SAC, which incorporates the Owenkillew River Area of Special Scientific Interest (ASSI) as well as Drumlea and Mullan Woods ASSI and Owenkillew and Glenelly Woods ASSI, and it features the largest population of freshwater pearl mussel (Margaritifera margaritifera) in Northern Ireland, as well as extensive beds of Stream Water Crowfoot (Ranunculus penicillatus ssp penicillatus);  The Owenreagh River is a proposed ASSI for the feature of freshwater pearl mussel;  Much of the higher ground across the ridge is covered with peat of varying thickness and quality, supporting habitats that are recognized as priority habitats in Northern Ireland and are also listed under Annex I of EU Habitats Directive.

The predominant land use on the topographic ridge between the Owenkillew and Owenreagh Rivers is farming, comprised of multiple small farm holdings. The farmland is rough grazing land predominantly for cattle and sheep. Residential dwellings and commercial properties in the vicinity of the project are predominantly clustered around the hamlet of Rouskey to the west and the village of Greencastle to the south-east of the development. Residential buildings are also situated along the major roads in the area, including the B46 Crockanboy Road, but are not present along the topographic ridge. Dalradian has acquired the land necessary for the development of the project. There are a number of small privately owned land holdings adjacent to the proposed project infrastructure site.

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Figure 20.2: Regional setting of the Curraghinalt Project

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Figure 20.3: Local setting of the Curraghinalt deposit

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20.4.2 Topography, Seismicity and Soils The ridge hosting the Curraghinalt deposit is part of the Sperrins Mountains. The main spine of the Sperrins Mountains lies to the north of this ridge. Many of the peaks in the Sperrins range are over 500 m with the highest peaks to the north. Northern Ireland is classified as having a low seismic hazard rating. No events have been recorded in Northern Ireland above 3 ML and there have been no earthquakes recorded in the vicinity of the Curraghinalt deposit since records began. The upland areas of the project site are dominated by peats, while the valley floor areas are characterized by soils derived from alluvium (alluvial fines and sands & gravels) with localized peaty deposits. The valley flanks are underlain by a variety of mainly poorly drained acidic soil types, dominantly gleys or peaty gleys, with smaller areas of better draining podzols. 20.4.3 Climate The climate of Northern Ireland is moderated by its proximity to the Atlantic Ocean. Although there is seasonality (with winter months between December and February being colder, darker and wetter than the summer months of June to August), the influence of the Atlantic tends to produce relatively cool summers and warm winters. The project area is characterized by annual rainfall in the order of 1,150 to 1,350 mm per annum, with high seasonality. The wettest period is between October and January and the driest period between April and July. An automated weather station has been installed at the project site. The data collected has been compared with a number of comparable meteorological office sites within a 30 km radius. Average annual temperatures at the site follow historical data patterns. Temperature data illustrate the seasonality of the location, with the lowest temperatures recorded in winter (December to February) and the highest temperatures recorded in summer (June to August). Temperatures at the site between February 2012 and September 2015 averaged 8.6°C, with a maximum of 26.6°C in July 2013 and a low of -5.5 °C in March 2013. Wind speed at the site averaged 4.1 m/s for the full period of recordings. The wind direction was predominantly from a west and south-east direction. 20.4.4 Water 20.4.4.1 Surface Water The Curraghinalt project is in the Owenkillew River catchment in the Foyle River basin (Figure 20.2). The proposed surface infrastructure site is directly in the catchment of the Owenreagh River, a tributary of the Owenkillew River, and is principally drained by the Pollanroe Burn. The confluence of the Owenreagh River with the Owenkillew River is 9 km downstream of the proposed surface infrastructure site (Figure 20.3 and Figure 20.4). The Foyle River discharges into Lough Foyle near Derry, in County Londonderry, and ultimately into the Atlantic Ocean.

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Figure 20.4: Watercourses Draining the Project Site

All the rivers named above have conservation importance. They are recognized as being notable for their physical diversity, especially in the upper reaches, and the richness and naturalness of their plant and animal communities. The rivers are within the Northern Ireland North-Western River Basin. River basin management plans are prepared, and updated on a six-year cycle, in Northern Ireland in accordance with legislation transposed from the EU Water Framework Directive. The plans summarize the state of the water environment and define actions to protect and improve the water environment. The first set of river basin management plans were prepared in 2009 and the second set of plans were produced in 2015. The current status of, and future objectives for, the rivers draining the project site are given in the 2015 management plan for the Northern Ireland North-Western River Basin, which was prepared by the Northern Ireland Environment Agency (NIEA), as outlined below.  The stretch of the Owenkillew adjacent to the project site is currently of Good status although the 2021 and 2027 objectives reduce to Moderate. This reduction in objective is unexplained.  The stretch of the Owenreagh adjacent to the application site is currently of Good status with upstream waterbodies also of Good status.  The Mourne River is currently of Moderate Ecological Potential with objectives of Good Ecological Potential. The Upper Foyle transitional water is of Moderate status. The receiving

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Foyle Harbour and Faughan water body is of Moderate Ecological Potential and is termed a heavily modified water body. Finally, Lough Foyle is of Good status.

Overall, the background water quality in watercourses downstream of the project sites reflects the natural mineralization of the project area and the wider effects of peaty soils and agricultural activity in the local catchments. Average pH is circum-neutral and within guideline values although pH of individual samples ranges quite widely, from 5.3 to 8. Electrical conductivity, a reflection of dissolved ions in the water, is fairly consistent at between 100 and 122 µS/cm. Existing nutrient levels in the watercourses often exceed ideal values for freshwater pearl mussels. Total suspended solids are generally low, elevated levels are generally correlated with high flows associated with heavy rainfall. Concentrations of metals are generally below guideline values but concentrations of cadmium, copper, iron, mercury, manganese, selenium and zinc sometimes exceed environmental quality standards defined in legislation, specifically the Water Framework Directive (Classification, Priority Substances and Shellfish Waters) Regulations (Northern Ireland) 2015. 20.4.4.2 Groundwater The project is located in the area of the Gortin Groundwater Body, which is characterized as having limited potential for significant abstraction. This groundwater body incorporates the entire catchments of the Owenkillew, Glenelly and Mourne Rivers. In the fresh bedrock inter-granular porosity is negligible and flow is typically either restricted to fractures and joints in the upper weathered horizons or fractures formed by faulting. The dominant zone of flow is consistent with the highly weathered horizons, in the upper 10 to 30 m. Flow paths are generally short (tens to hundreds of metres). Bedrock aquifers may be locally confined where overlain by thicker deposits of clayey till. The quality of water in the groundwater bodies in the Owenkillew Local Management Area are classified as having an overall good status. Hydrogeological studies for the Curraghinalt project have established that fracture flow is the dominant flow mechanism in the bedrock with most flow occurring in the upper, weathered zone (up to approximately 20 m depth). The bedrock aquifer is low-yielding with limited potential for significant abstraction. The superficial alluvial and glaciofluvial deposits in the area are generally localized to river valley and low-lying areas, with the exception of the thin glacial outwash deposits recorded upslope, at the proposed infrastructure site. Typically the peat has very low hydraulic conductivity and high storage. Groundwater levels in the weathered bedrock superficial deposits are close to surface and closely mirror topographic elevation. The hills forming the ridge between the Owenkillew and Owenreagh Rivers therefore comprise a hydraulic divide with groundwater flowing away from the high ground towards the valleys. Groundwater levels in the deeper fresh bedrock are generally similar to shallow deposits, however do not follow topographical lows. Piezometeric groundwater levels in the fresh bedrock in valley areas are greater than shallow units indicating a natural upward gradient and discharge to the river valleys. Groundwater levels in the deeper fresh bedrock are generally similar to shallow deposits, however do not follow topographical lows.

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Most groundwater flow is shallow, discharging locally and rapidly to surface waters. Within the river valleys some limited discharge from bedrock to glaciofluvial and alluvium aquifers is likely to occur. The water table in intact peatland fluctuates only a little, but is usually close to the surface, naturally either above or below usually by only centimetres. The storage and the runoff behaviour of the peat varies significantly with very small changes in water level. The peat stores water in dryer periods but is prone to flashy high discharges when the water level is higher during wetter periods. All groundwaters in the area are fresh quality, with bedrock groundwater characterized by a weakly mineralized calcium or sodium bicarbonate signature and low to neutral pH. Sands and gravels groundwater has a similar calcium bircarbonate and low/neutral pH chemistry. Peat groundwaters typically have a sodium chloride signature and are acidic and oxidizing with low total dissolved solids and a high iron content. In general the groundwater shows an increase in total dissolved solids and electrical conductivity with depth from the superficial sediments, to the weathered bedrock and in turn the fresh bedrock. Similarly there is a general increase in many metal concentrations with depth. This is likely a result of the reduced interaction with freshwater recharge to the deeper formations and increased age of the groundwater at depth (i.e. increased water mineralization). The only groundwater abstraction licence in the vicinity of the study area is held by Cemex NI Ltd, approximately 2 km from the project infrastructure area. Private (non-regulated) groundwater abstractions, including wells and springs, are quite commonplace across the region and 135 abstraction points were identified from a groundwater user survey undertaken between October 2015 and February 2016 within the project area. 20.4.5 NORM and Radon Geological sources of naturally occurring radioactive material (NORM) and radon gas in the environment of the Curraghinalt project have been studied by RPS. The baseline NORM assessment found the overlying soils surrounding the Curraghinalt deposit to have intermediate uranium concentrations (1.6 mg/kg to 2.3 mg/kg) for Northern Ireland and indicate the underlying bedrock formations to have low uranium and thorium concentrations. Geochemical characterization studies of rock samples confirmed the low concentrations. Concentrations of uranium and thorium in groundwater and surface water in the area of the project were also found to be low. RPS found no evidence to suggest that NORM levels in the waste tailings and tailings leachate will be at a level necessitating classification of the waste as NORM waste, which would be subject to regulation. Radon monitoring of local buildings shows the average activity concentration is below the workplace limit and is below established UK radon Action Level of 200 Bq/m3. Radon concentrations in groundwater were found to below the 100 Bq/L radon limit for drinking water. Radon monitoring of existing underground locations was undertaken in the passively vented adit and unventilated areas. The radon activity in unventilated areas can be elevated above the workplace limit of 400 Bq/m3. But when the ventilation is activated, the levels are reduced below the workplace limit. The concentrations of radon in the ventilation fan exhaust were between 23 and 33 Bq/m3.

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20.4.6 Ecological Environment Peat covers the crest of the ridge between the Owenkillew and Owenreagh Rivers. The peat supports a complex mosaic of blanket bog, wet heath, marshy grassland and acid grasslands. Downgradient from the open areas of peatland on the crest, there is a patchwork of fields. These are typically bounded by earthbanks at higher elevations and by hedgerows further downslope. The fields are predominantly under improved and semi-improved grasslands. However, pockets of peat remain and support a mosaic of mire and wet heath habitats. The ridge forms a watershed for a number of small burns that typically have stoney substrates and are lined with trees in their lower reaches. Water levels in the burns are highly variable and respond rapidly to any rainfall event. The Owenkillew and Owenreagh Rivers are large fast flowing rivers with riffle, pools and glide features. The valley slopes are deeply undulating and dissected by numerous tributary burns. The river floodplain and the lower slopes of the valley comprise a patchwork of small fields predominantly under improved and semi-improved grassland and typically bounded by hedgerows, but with the occasional larger and flatter fields used for arable production. Scattered throughout the lower slopes are a number of small copses and semi-natural broadleaved woodlands, the most notable being Drumlea and Mullan Woods on the south bank of the Owenkillew River. The ecological baseline studies for the project include:  A peat study that defines the depth and character of peat across the project sites;  Terrestrial habitat surveys across project sites;  Surveys for badgers, bats, breeding and wintering birds, reptiles, amphibians and invertebrates, including marsh fritillary butterfly;  A river habitat survey, a fisheries assessment and a biological water quality assessment;  Surveys for otter and fresh water pearl mussel in the Owenkillew and Owenreagh Rivers.

A number of the habitats within the application site are considered likely to fulfil the criteria of the habitats protected at the European level (EU Annex I Habitats), specifically:  Blanket bogs (and a priority habitat where active);  Molinia meadows on calcareous, peaty or clayey-silt-laden soils; and  Northern Atlantic wet heaths with Erica tetralix.

Habitats identified within the application site that are likely to represent Northern Ireland Priority Habitats are:  Blanket bog;  Hedgerows (where species-rich);  Lowland heath;  Mixed Ashwoods;

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 Ponds;  Purple moor-grass and rush pastures;  Rivers (including tributaries and headwater streams); and  Upland flushes, fens and swamps.

European protected species that are known to occur in the rivers draining the project area include the following species listed in Annex II of the EU Habitats Directive: Atlantic salmon (Samo salar); river lamprey (Lampetra fluviatilis); lamprey (Petromyzon marinus); freshwater pearl mussel (Margaritifera margaritifera); and otter (Lutra lutra). Nationally protected species known to occur in the area of the project include the European protected species listed above, various species of bat and the following species: Marsh fritillary butterfly (Eurodyras aurinia); smooth newt (Lissotriton vulgaris); common lizard (Zootoca vivipara); and badger (Meles meles). A cottage on the proposed infrastructure site was found to host bats. The cottage was confirmed as roost supporting common pipistrelle and soprano pipistrelle bats. The freshwater pearl mussel is Northern Ireland’s only globally 'Endangered' species (IUCN 1996). The Owenkillew has been designated as an SAC with freshwater pearl mussel as a primary feature. The Owenreagh is a candidate ASSI for its freshwater pearl mussel population. The areas of the Owenkillew and Owenreagh upstream of the application site contain significant mussel beds and juveniles were observed. No mussels were found downstream of the proposed Curraghinalt project infrastructure site in the Owenreagh River. One small population of mussels is present in the Owenkillew River downstream of the Curraghinalt adit and existing infrastructure for the exploration program. 20.4.7 Social Environment The project is located in the Local Government District (LGD) of Fermanagh and Omagh. The current LGD was established in April 2015 when the separate district councils of Fermanagh and Omagh were merged. The nearest large settlements are Omagh, Strabane and Cookstown, which provide service, retail and education centres for the wider Sperrins area. The socio-economic baseline study defined the Owenkillew Ward, within the LGD of Fermanagh and Omagh, as the potential project socio-economic impact area. The administrative boundaries of the Owenkillew Ward correlate with the statistical geography boundaries for the Owenkillew Super Output Area (SOA). According to the 2011 Census there were 2,350 people living within the Owenkillew SOA, with a population density of 0.13 persons per ha. The low population density is indicative of the rural, sparsely populated nature of the area. The population of the Owenkillew SOA grew by 7.5% from 2,187 in 2001. Farming comprises a key component of the local economy and is the predominant land use in the Owenkillew SOA. The pattern of farm holdings in the local area is typically multiple small units comprising rough grazing predominantly for cattle and sheep.

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There are no residential or commercial buildings in use on the sites proposed for project infrastructure. There is one cottage (Pollan Rua Cottage) on the proposed site for the plant and DSF, this is owned by Dalradian. The nearest building to the proposed infrastructure site boundary is a detached residential property located about 50 m south of the turning from the B46 onto the project access road. The nearest building to the ventilation system and existing adit is a detached residential property located on the Camcosy Road. There are three residential properties and five workplaces within 500 m of the DSF; these are comprised of farms on the south side of the topographic ridge. The nearest community facilities (school, outdoor leisure facility, churches, and community centres) are located in the village of Greencastle and the hamlet of Rouskey. As of October 2016, there were 32 new developments implemented, consented or pending consideration within 5 km of the proposed surface infrastructure site. Of these, 66% relate to domestic extensions or single dwellings, 22% relate to single wind turbines and 12% relate to electricity or communications infrastructure (usually to supply electricity to the wind turbine). Within 15 km of the proposed surface infrastructure site, there are 12 large scale proposed developments including three extractive industry developments and seven wind farm projects. The three extractive developments are: a proposed shale mineral extraction project; an extension of an existing mineral extraction site; and retrospective planning for extraction of sand and gravel. As the project is in an AONB, there are a number of parks and recreational facilities in the general vicinity of the project including the 1,500 Gortin Glen Forest Park (10 km to the southwest) and An Creagán forest (10 km to the southeast). Recreational facilities include:  Cycle routes through the Sperrin Mountains; there are seven national demarcated routes in the wider area, two of which pass approximately 2 km from the proposed infrastructure area; and  The Owenkillew River, which is kayaking, canoeing, angling and salmon and sea trout fishing. The stretches accessible for canoeing are approximately 12 km downstream of the project site.

20.4.8 Cultural Heritage A search of the Historic Buildings database identified no listed buildings within the proposed infrastructure site. Two listed buildings were identified within the 3 km search radius. The first building is St. Mary's Church, Crockanboy Road, Rouskey. The second building is Campbells Bridge over Glensawisk Burn, Aghnamirigan Road, Greencastle. This is a five-span stone bridge, built circa 1850. A total of eight archaeological monuments of regional importance were identified within the 3km search radius of the centre of the proposed infrastructure site. A reverse viewshed analysis was conducted for each of the eight monuments (RVA). The analysis established that there will be no inter-visibility between the identified monuments and the proposed development site. This is primarily as a result of local topography creating a visual barrier between the monuments and the proposed development site. As such there is no impact upon the setting of these monuments or listed buildings.

The project infrastructure site itself and the ground above the Mineral Resource area are of limited archaeological significance. The character of the proposed infrastructure site is almost entirely

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DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY agricultural, with surviving cultural heritage assets consisting of 19th Century farmsteads and evidence of a historic track crossing the site.

20.5 Landscape and Visual Setting The development is proposed within the Sperrins AONB. The AONB designation helps to protect, conserve, promote and facilitate public access to landscapes of national importance for the people who live there, visitors and everyone who comes to enjoy their special qualities. Very little descriptive information exists for the Sperrin AONB, and no management plan exists for the area. Management plans are often developed for AONBs to set out appropriate management measures to conserve and enhance the landscape quality of these designated landscapes. LUC consultants have conducted a comprehensive landscape and visual impact assessment for the development and recommendations have been incorporated into the project design and location of infrastructure during the course of the Feasibility Study.

20.6 Noise The Curraghinalt project is set in a predominantly rural area with generally low noise levels associated with traffic and agricultural activities. The area in closer proximity to Greencastle village is more urbanized with noise sources associated with traffic, housing estate developments, a school, a pub and a restaurant.

20.7 Air Quality Air quality in the Curraghinalt project area is generally good, with low emission concentrations and dust deposition rates. Existing air emission sources are dominated by rural activities and include vehicle exhausts, suspension of dust particles from vehicle movements and agricultural practices. In closer proximity to Greencastle village, the area becomes more urbanized with higher volumes of traffic corresponding to an increase in emission concentrations and dust deposition rates. The air quality monitoring results indicate baseline air quality is within the relevant limit values for sulphur dioxide and nitrogen oxides, benzene, toluene, ethylbenzene, xylenes and volatile organic carbon. Minor exceedances of particulate matter, dust and metal deposition limit values have occurred during the surveys but these are either considered anomalous results or confined to areas around the exploration adit and are not dust sensitive residential locations. Some exceedances would be expected as the area is known to have localized high background levels of arsenic in soils as this metal is strongly associated with the gold mineralization.

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20.8 Environmental and Social Issues The following section below identifies environmental and social issues that present challenges for the project. 20.8.1 Planning Permission and Environmental Approvals Obtaining planning permission as outlined in Section 20.3.2 requires active management and open communication with the authorities and other stakeholders. Given the scale of the development proposed, the planning authorities will require time to evaluate all the aspects of the project. There are also a series of related authorizations and permits that will be required. A number of these will have to be applied for in parallel with the planning application. This coupled with a degree of public opposition to the development could result in additional time required for the planning and permitting approval process. 20.8.2 Area of Outstanding Natural Beauty (AONB) As noted above, the project is within an AONB. This has been taken into consideration in the planning of the project and the siting of project infrastructure. The site selected for the plant and DSF makes use of a natural dip in the topography on the southern side of the Crocknamoghil ridge. This mitigates the visual impact of the project infrastructure from the main spine of the Sperrin Mountains to the north. The DSF has also been sited and constrained in size to ensure that at its maximum size, the crest does not break the natural skyline from key view-points. 20.8.3 Ecological and Water Impacts The project infrastructure has been sited to avoid habitats of conservation importance but it has not been possible to completely avoid all such habitats. The surface infrastructure has been positioned so that the continuous peatland covering the ridge between the Owenkillew and Owenreagh Rivers is avoided as much as possible. There is some peat at the site of the process plant and the DSF and the habitats associated with this peat are of conservation importance. The project will also disturb habitats that are or could be occupied by protected species including various species of bat, Marsh fritillary butterfly, smooth newt, common lizard and badger. Dalrdian is developing an ecological mitigation and compensation plan, which includes compensation measures for losses or damage to ecological features that are unavoidable and aims to achieve a net biodiversity gain. These measures are being discussed with regulatory authorities and interest groups. The proposed compensation measures include actions for protection and enhancement of retained areas of peatland habitats and for enhancement of peatland habitats lying outside the proposed infrastructure site, the provision of alternative roosting sites for bats, and enhancement of suitable habitats in safe areas for newts and lizards. The project is also being designed to prevent significant impacts on water quality in the Owenkillew and Owenreagh Rivers and hence on the protected species that these rivers host. As noted already in this chapter, the Owenkillew River has been designated as an SAC with freshwater pearl mussel as a primary feature. The Owenreagh River is a candidate ASSI for its freshwater pearl mussel population. Freshwater pearl mussels are sensitive to water quality.

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Dalradian has to provide regulatory authorities with the confidence that the water management measures in the project design will ensure compliance with the water quality objectives for the Owenreagh and Owenkillew Rivers. The project is proposing reverse osmosis treatment technology for process water treatment prior to release to the environment. The assessment of impacts on the rivers will take into consideration the other discharge consents already granted for discharge of treated sewage to the Owenreagh River both upstream and downstream of the proposed infrastructure area. Interpretation of the results of the geochemical studies for the project is still ongoing. The implications for ground water quality and eventual discharges from the flooded mine working post closure are being modelled. The geochemical studies are also looking at the quality of water associated with the seepage from the DSF. The mine waste management plan that will accompany the planning application will have to demonstrate there is no long term impact of any significance on ground and surface waters. 20.8.4 Noise A number of residential homes and farm buildings are located within a 500 m radius of the proposed infrastructure site boundary. Dalradian and the design engineers have incorporated a number of elements into the project design to minimize the noise impacts such as berms, siting of buildings behind tree stands and use of noise-dampening building materials. The noise impact study is not fully completed yet, but results from the study to date indicate that the levels from the operation will be lower than applicable daytime, evening and night-time noise limits at receptor locations. 20.8.5 Air Quality The air quality and dust levels from the construction and operation of the proposed Curraghinalt project are predicted to be lower than the relevant air quality and dust standards and guideline limit values and to have negligible impacts on neighbouring land users. 20.8.6 Hazardous Substances The use of cyanide in the process plant will be strictly regulated and controlled under various permitting conditions associated with approvals from both the Health and Safety Executive NI and the NIEA. In addition, Dalradian has declared that it will become a signatory of the International Cyanide Management Code. This will commit the company to the implementation of internationally recognized management systems for the transport storage, handling, use and destruction of cyanide. It will also result in regular audits by independent, approved auditors to ensure all regulations and standards are being implemented by the company. 20.8.7 DSF, Paste Backfill and Mine Waste Management As noted above, the project will have to provide a mine waste management plan to accompany the planning application. This will require each of the main waste streams to be categorized based on the findings of the geochemistry studies. Final mitigation measures related to the handling and placement of waste will depend on the outcomes of the geochemistry study. The mitigation measures will ensure the mine waste facilities do not fail from a structural perspective and do not cause water pollution. The detail for the disposal of wastes still has to be agreed with the regulators.

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20.9 Closure Requirements and Costs As part of the Feasibility Study, Dalradian commissioned SRK and JDS to prepare a conceptual level closure plan and determine the associated costs for the full restoration of the site post mining. The closure costs are reported elsewhere in this document (Section 21.). Key closure concepts are as follows:  With the exception of the NIE substation, all infrastructure associated with the mining and mineral processing will be decommissioned and dismantled. To the extent possible, materials and equipment will be made available for reuse or recycling. Any contaminated material, equipment and soil will be removed for appropriate treatment and disposal. Inert material will be removed or covered over and the entire site covered in soil and revegetated. All rehabilitation will be done according to the recommendation of the ecology specialists and appropriate to the agreed post closure land use.  The various ponds associated with the proposed infrastructure area will have their sides re- graded to make the areas safe and sections of the ponds will be backfilled to create diverse ecological habitats. Some ponds will remain in place to attenuate rainfall runoff and act as sediment control structures until a steady state is achieved post closure.  All equipment will be removed from the mine and the workings will be allowed to flood naturally. The decline will be permanently sealed. The adit will be made safe to prevent access but engineered to allow water to drain from the workings. This water will feed a passive water treatment system prior to discharge to the Curraghinalt Burn.  The site will be actively monitored for a minimum of five years post closure.

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21 Capital Cost Estimate

21.1 Summary & Estimate Results LOM project capital costs total $357M, consisting of the following distinct phases:  Pre-production Capital Costs – includes all costs to develop the property to an average of 1,400 t/d production. Initial capital costs total $192M (including $18M contingency) and are expended over a 24-month pre-production construction and commissioning period; and  Sustaining & closure capital costs – includes all costs related to the acquisition, replacement, or major overhaul of assets during the mine life required to sustain operations, and costs related to the progressive and final closure. Sustaining capital costs total $165M (including $6M in contingency) and are expended in operating Years 1 through 11.

The capital cost estimate was compiled utilizing input from experienced engineers, contractors, and suppliers. Wherever possible, bottom-up first principle estimates were developed and benchmarked against other projects of similar size and site conditions. Table 21.1 presents the capital cost summary for pre-production, sustaining, and closure capital costs in Q4 2016 dollars with no escalation. Table 21.1: Capital Cost Summary

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Pre-Production Sustaining/ Total WBS Area (M$) Closure (M$) (M$) 4500 Adsorption, Desorption, & Regeneration 2.9 - 2.9 4600 Refinery 0.4 - 0.4 4700 Cyanide Destruction & Tailings 7.6 - 7.6 4800 Reagents 1.9 - 1.9 4900 Process Utilities 3.9 - 3.9 5000 On-Site Infrastructure 28.9 - 28.9 5100 Electrical Supply & Distribution 9.3 - 9.3 5200 Water Supply, Distribution, & Treatment 8.8 - 8.8 5400 Waste Management 0.7 - 0.7 5500 Ancillary Buildings 6.1 - 6.1 5600 Surface Mobile Equipment 2.8 - 2.8 5700 Bulk Fuel Storage & Distribution 0.1 - 0.1 5800 IT, Communications, & Software 1.0 - 1.0 6000 Off-Site Infrastructure 4.9 - 4.9 6100 Power Transmission Line 4.9 - 4.9 7000 Dry Stack Facility 1.4 2.6 4.0 7100 Dry Stack Facility 1.4 2.6 4.0 8000 Project Indirect Costs 12.7 2.2 14.9 8100 On-Site Contract Services 0.8 - 0.8 8200 Temporary Facilities & Utilities 1.3 - 1.3 8300 Contractor Indirect Costs 2.2 - 2.2 8400 Freight 5.2 2.2 7.4 8500 Startup & Commissioning 3.1 - 3.1 9000 Engineering & Procurement 7.8 - 7.8 9100 Engineering & Procurement 7.8 - 7.8 9800 Owners Costs 13.2 - 13.2 9810 Project & Construction Management 4.9 - 4.9 9820 Pre-Production Milling 2.3 - 2.3 9830 Pre-Production G&A 6.0 - 6.0 C100 Closure & Reclamation 7.5 3.9 11.4 C101 Closure Assurance 7.5 (7.5) - C102 Closure Costs (Net of Salvage) - 11.4 11.4 Subtotal Pre-Contingency 174.3 158.8 333.1 9900 Contingency 17.6 6.4 24.0 Total Capital Costs 192.0 165.1 357.1 Source: JDS (2016)

Figure 21.1 and Figure 21.2 present the capital cost distribution for the pre-production and sustaining phases. The majority of the sustaining capital estimate relates to expansion of the DSF area and waste rock storage facility foundations.

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Figure 21.1: Initial Capital Cost Distribution

Site Development Contingency 5% 9%

Mining incl. Paste Plant Indirect/Owner 24% Costs 21% Processing Facilities Infrastructure incl. 23% DSF 18%

Source: JDS (2016)

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Figure 21.2: Sustaining/Closure Capital Cost Distribution

1% 3% 4% 3% 2% 1%

86%

Mining Site Development Processing Facilities Infrastructure incl. DSF Indirects/Owners Costs Closure Contingency

Source: JDS (2016)

21.2 Capital Cost Profile All capital costs for the project have been distributed against the development schedule in order to support the economic cash flow model. Figure 21.3 presents an annual life of mine (LOM) capital cost profile (excluding closure years).

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Figure 21.3: Capital Cost Profile (Closure Years not Shown)

200 400 354 356 356 357 357 334 175 350 312 293 150 271 300 132 254 234 125 250 192 100 200

75 150 60

PeriodCapital Cost C$ M) 50 42 100 Cumulative Capital Cost (C$ (C$ M) Cost Capital Cumulative 23 21 25 20 17 19 20 50 2 0.5 0.5 0.5 0 0 -2-11234567891011

Note: Closure activities occurring in year 11 are shown net zero in the above graph, as they are funded from the closure assurance reserve account, established earlier in the mine life. Refer to section 21.7.14.1 for additional details. Source: JDS (2016)

21.3 Scope of Estimate The Curraghinalt capital estimates include all costs to develop and sustain the project at a commercially operable status. The capital costs do not include the costs related to operating consumables inventory purchased before commercial production; these costs are considered within the working capital estimate described in Section 23. Sunk Costs and Owners Reserve accounts are not considered in the Feasibility Study estimates or economic cash flows.

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21.4 Key Estimate Assumptions The following key assumptions were made during development of the capital estimate:  The capital estimate is based on the contracting strategy, execution strategy, and key dates described within the Project Execution Plan described in Section 25 of this report.  Underground mine development activities will be performed by the Owner’s forces.  All surface construction (including earthworks) will be performed by contractors.

21.5 Key Estimate Parameters The following key parameters apply to the capital estimates:  Estimate Class: The capital cost estimates are considered Class 31 feasibility cost estimates (-15%/+20%). The overall project definition is estimated at 30%.  Estimate Base Date: The base date of the capital estimate is December 1st, 2016. No escalation has been applied to the capital estimate for costs occurring in the future. Proposals and quotations supporting the Feasibility Study Estimate were received in Q2 & Q3 of 2016.  Units of Measure: The International System of Units (SI) is used throughout the capital estimate;  Currency: All capital costs are expressed in US$. Table 21.2 presents the exchange rates used for costs estimated in foreign currencies and the portions of the capital costs estimated in those currencies.

Table 21.2: Foreign Exchange Rates & Exposure

Initial Capital Sustaining Capital Total Capital Currency X:US$ US$M % US$M % US$M % US Dollar (US$) 1.00 119 62 51 31 170 48 Canadian Dollar (C$) 0.75 24 13 25 15 49 14 British Pound (GBP) 1.20 48 25 86 52 134 38 Euro 1.05 1 0 2 1 3 1 Total 192 100 165 100 357 100 Totals may not add due to rounding Source: JDS (2016)

21.6 Estimate Responsibility Matrix This capital cost estimate was developed collaboratively by engineers, procurement specialists, and cost estimators. JDS is responsible for the overall management, development, assembly, and accuracy of the overall capital cost estimate with input from companies as noted in Table 21.3.

1 ACEE defines a Class 3 estimate as a budget authorization estimate based on 10% to 40% project definition, semi- detailed unit costs with assembly level line items, and an accuracy of between -20%/+30% and -10%/+10%.

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Table 21.3: Estimate Responsibility Matrix

Quantity Notes/ Item / Area Unit Cost Determination Exceptions Underground Mining JDS JDS Paste Plant WSP JDS Site Development Allnorth JDS Process Facilities HATCH JDS On-Site Infrastructure Electrical Supply & Distribution HATCH HATCH Water Treatment Plant SRK JDS Other Water Systems JDS JDS Waste Management Systems JDS JDS Ancillary Buildings JDS JDS Surface Mobile Equipment JDS JDS Bulk Fuel Storage & Distribution JDS JDS Communications JDS/DRI JDS/DRI Power Transmission Line NIE NIE Load list by HATCH Dry Stack Facility SRK JDS Project Indirect Costs JDS JDS Engineering & Procurement JDS JDS Owners Costs JDS/DRI JDS/DRI Taxes JDS/DRI JDS/DRI Reliance on advisor Contingency JDS JDS Source: JDS (2016)

21.7 Basis of Estimate 21.7.1 Labour Rates 21.7.1.1 Contract Labour Rates Contractor labour rates were built up by applying appropriate burdens to base labour rates obtained during a local labour survey to determine all-in commodity unit labour rates.

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Table 21.4: Contract Labour Rates

Category Civil Conc. Struct. Arch. Mech. Pipe Elec. Control Direct Rate (1) 20.25 20.25 24.30 24.30 24.30 24.30 24.30 27.00 Transportation & Facilities 1.90 1.90 1.90 1.90 1.90 1.90 1.90 1.90 Warehouse & Tool Crib 0.00 1.50 1.50 1.50 6.36 6.36 6.36 1.50 Tools/PPE/Consumables 1.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 Training & Awards 0.60 0.60 0.60 0.60 1.10 1.10 1.10 1.10 Supervision 4.85 5.55 6.36 6.36 7.43 7.43 7.43 7.00 Non-Productive Time 4.85 5.55 6.36 6.36 7.43 7.43 7.43 7.00 Overhead & Profit 8.49 9.71 11.13 11.13 13.01 13.01 13.01 12.25 All-in Rate 42.44 48.56 55.65 55.65 65.03 65.03 65.03 61.25 Note 1: Direct rate includes payroll and social burdens, and shift premiums Source: JDS (2016)

21.7.1.2 Operational (Owner) Labour Rates Operational labour rates were built up from first principles, in consultation with Dalradian human resources and legal resources. Base rates are based on current Dalradian salaries for similar positions, and legal and union premiums and benefits were built up to create all-in rates. Operational labour rates and staffing levels are described further within Section 22. 21.7.2 Fuel & Energy Supply 21.7.2.1.1 Fuel Fuel consumption is based on the engineered estimates within the various direct WBS areas of the estimate. Fuel pricing of US$1.031/L, inclusive of delivery to site, is based on quotations received from local fuel suppliers. 21.7.2.1.2 Electricity Supply Permanent power costs are based on the estimated demands for underground and surface facilities, and a budgetary utility cost of US$0.093/kWh provided by Northern Ireland Energy (NIE). 21.7.3 Underground Mining 21.7.3.1 Underground Mobile Equipment Underground mining equipment quantities and costs were determined through buildup of mine plan quantities and associated equipment utilization requirements. Budgetary quotes were received and applied to the required quantities. 21.7.3.2 Underground Infrastructure Design requirements for underground infrastructure were determined from calculations by engineers with specialized knowledge of ventilation, dewatering, paste backfill, and material handling design. Budgetary quotations were received for major infrastructure components. Allowances have been made for miscellaneous minor items, such as initial PPE, radios, water supply, refuge stations, and small air compressors. Acquisition of underground infrastructure is timed to support the mine plan requirements.

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21.7.3.3 Capital Development Capital development includes the labour, fuel, equipment usage, power, and consumables costs for lateral and vertical development required for underground access to stopes and underground infrastructure.  It is assumed that all lateral development and conventional raises will be performed by Dalradian staff, and that Alimak raises will be performed by a contractor.  Lateral development fuel, equipment usage, power, and consumables requirements were developed based on the mine plan requirements. Manufacturer database equipment usage rates were applied to the required operating hours. Quotations were obtained for consumables and the rates described in Section 21.7.2 were applied for fuel and power.  Lateral development labour requirements were determined by the required equipment fleet in operation. Supervision and support services were pro-rated to the development costs, based on the mix of underground activities occurring. Operational labour rates were applied as described in Section 22.  Budgetary quotations for Alimak raises were obtained from a contractor and applied to the mine plan quantities.

21.7.3.4 Capitalized Development Costs Capitalized development costs are defined as mine operating expenses (operating development, ore extraction, mine maintenance, and mine general costs) incurred prior to the introduction of ore to the processing facilities and the commencement of project revenues. They are included as a pre- production capital cost. The basis of these costs is described in Section 22, Operating Costs, as they are estimated in the same manner. Capitalized development costs are included in the asset value of the mine development and are depreciated over the mine life within the financial model. 21.7.4 Site Development Site development includes all costs to develop the plant site area, including:  Bulk cut/fill, rough, and final grading for all roads & pads;  Water management structures, including surface drainage features and water storage ponds;  Earthen liners (for water storage ponds);  Site fencing; and  Site and road paving.

Earthworks quantities were developed from a 3D civil model. Other earthworks and site development quantities were developed based on-site layouts and requirements typical of similar projects. An engineering quantity allowance of 20% was added for overbuild, spillage, and wastage.

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It is assumed that all site earthworks will be performed by a contractor, with no Owner supplied construction or support equipment provided. Local contractor unit rates were obtained and applied to the engineered quantities. 21.7.5 Surface Construction (Plant & Site Infrastructure) Table 21.5 presents a summary of the basis on which the processing facilities and surface infrastructure elements for the project have been estimated. Table 21.5: Surface Construction Basis of Estimate

Commodity Estimate Basis Equipment Budget quotations were solicited from qualified suppliers for the major equipment identified in the flowsheets and Major Equipment equipment register. A proposal accuracy of +/- 15% was requested from suppliers. In-house data (firm and budgetary quotations from recent Minor Equipment projects) was used for minor or low value equipment. Installation (Labour & Materials) Quantities were developed from 3D models. Site Preparation Budgetary unit rates were obtained from local contractors. Quantities were developed from 3D model layouts and design calculations. Allowances were made for lean- Concrete concrete where required. Budgetary unit rates were obtained from local contractors. Quantities were determined from 3D models, design calculations, and general arrangement drawings, with Structural Steelwork factored considerations for minor steel and connections. Database unit pricing from similar projects used for detailing, supply, fabrication, and erection costs. Quantities for plate work, abrasion resistant ducting, and other mechanical plate work were developed based on general arrangement (“GA”) drawings and expertise with Mechanical Bins and Chutes similar operations. Database unit pricing from similar projects used for supply, fabrication, and installation costs. Piping quantities for lines four inches and above were developed, based on line lists developed from process and instrumentation diagrams (“P&IDs”), and rough lengths determined from GA drawings. Process Piping and Valves Database unit pricing from similar projects used for spool detailing, supply, fabrication, and installation costs for large bore (≥4”) Small bore piping (<4”) was factored. Electrical equipment specifications and quantities are based on single line diagrams. Electrical Equipment Database unit pricing for equipment purchase and installation man-hours were applied to the electrical equipment list. Electrical material quantity take-offs for wire, cable tray, Electrical Bulks junction boxes, etc. were based on single line diagrams and GA drawings.

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Commodity Estimate Basis Database unit pricing for materials and installation man- hours were applied to the engineered quantities. Factored at a range of 5-20% of mechanical equipment Instrumentation costs, depending on process area. Construction Equipment Construction equipment costs are included according to the tasks performed and the crew hours involved. This Construction Equipment Rentals/Usage account is used for rentals and any purchase of commonly shared equipment, scaffolding, and subcontractor equipment charges. Permanent Equipment Upgrades & Overhauls A sustaining capital allowance of has been allowed in years 1 through 11 for the overhaul or improvements to processing facilities. This allowance is calculated as 2% Process Equipment Overhauls of the total direct costs of the crushing and reclaim area, plus 1% of the direct costs of the mineral processing plant; equating to a total annual allowance of approximately $500k. Source: JDS (2016)

21.7.6 Surface Equipment Fleet Surface equipment fleet requirements are based on experience at similar operations, and considering site conditions specific to the project. Waste rock/tailing handling equipment requirements are based on equipment utilization requirements for the haulage operations. No equipment replacements are anticipated for the surface equipment fleet. Database unit pricing has been applied to the surface equipment fleet quantities. Prevailing used equipment purchase costs have been used for some for low utilization equipment. 21.7.7 Communications & IT Infrastructure Network infrastructure, workstations, and engineering software for the project was specified and priced by DRI. A budgetary quotation was obtained for the installation of a leased fibre line (internet) and a telephone connection. 21.7.8 Power Transmission Line The 33kV power line design, supply, and installation requirements and costs of US$4.9M were developed by the local power authority (Northern Ireland Electricity) as a standalone project. 21.7.9 Dry Stack Facility Dry stack storage facility earthworks quantities were developed from engineering drawings by the design engineer. Budgetary unit rates obtained from local contractors have been applied to the engineered quantities. It is assumed that DSF construction will be performed by a contractor, during both the construction and operations phase. Progressive closure of the DSF (an engineering cover design and soil cover) is included within the closure costs, described in Section 21.7.14.

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21.7.10 Indirect Costs 21.7.10.1 General Construction Services A provision has been allowed for a crew of five personnel for 15 months during the bulk of construction activities to provide miscellaneous construction support beyond the capacity of DRI’s Site Services group. Duties include waste management, movement/maintenance of temporary facilities, road maintenance, material receiving, and other such duties as required. Material allowances were included for the procurement of general site consumables not related to specific contractor scopes, such as bulk lumber, maintenance parts for temporary facilities, safety program supplies, site services supplies, and short term equipment rentals. 21.7.10.2 Temporary Buildings Temporary office requirements have been estimated based on the development schedule and contracting strategy for the project. Modular style offices are envisioned to house supervisory and administrative staff from the Project Management group and the various construction contractors. Estimates were included for the rental of modular lunchrooms and ablution facilities to align with the development schedule and anticipated construction manpower population on-site. 21.7.10.3 Temporary (Construction) Power Temporary power required to service construction activities and temporary buildings was estimated from experience at other similar sized projects. Three large generators will be located to provide construction power to the underground mine, construction office complexes, and the process plant site. Several smaller generators will be rented to provide construction power at ancillary areas of the site (such as the water treatment plant). Costs are included for the rental of the generators, fuel and parts for operations, and a generator mechanic on a callout service. Small generators (less than 20kW) will be provided by contractors and the costs for the acquisition and usage of these are included in the construction equipment costs. 21.7.10.4 Contractor Indirect Costs The following contractor indirect costs are burdened within the labour crew rates described in Section 21.7.1.1:  Transportation & Facilities;  Warehouse & Tool Crib;  Tools/PPE/Consumables;  Training & Awards;  Supervision;  Non-Productive Time; and  Overhead & Profit.

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On top of the contractor indirect rates identified above, two percent of the direct costs were included in the estimate for contractor mobilization. A lump sum allowance was included for the purchase of scaffolding materials. Scaffolding erection and maintenance is included in the direct costs. 21.7.10.5 Freight Freight costs during the construction phase have been developed based on the estimated number of loads. A total of approximately 1,200 cargo loads is estimated (exclusive of fuel, cement, and explosives), at an average cost of approximately $4,350/load. Freight costs include applicable customs fees, brokerage, and temporary warehousing. A 7% allowance of purchase price for underground mobile equipment acquisitions has been applied within the sustaining capital estimates. Fuel, cement, and explosive commodity pricing includes delivery to site, and is thus excluded from the freight costs within the freight WBS. 21.7.10.6 Commissioning & Spare Parts Commissioning activities have been estimated on the basis that the construction contractors will complete all pre-commissioning activities up to the introduction of first ore, at which time, DRI’s processing staff will assume care, custody, and control of the plant and begin process commissioning and ramp-up. Spare parts, first fills, and vendor assistance costs have been factored based on similar projects:  2.5% of mechanical equipment costs for capital & commissioning spare parts;  First principles estimate for initial mill charges;  Allowance for first fills; and  2% of mechanical equipment costs for vendor construction and commissioning support.

21.7.11 Detailed Engineering Engineering costs within the estimate are based on budgetary quotations received from entities involved in the development of the Feasibility Study. 21.7.12 Owners Costs Owner’s costs are items that are included within the operating costs during production. These items are included in the initial capital costs during the construction phase and capitalized. 21.7.12.1.1 Project & Construction Management The Project and Construction Management estimate for Curraghinalt is based on an Owner self- performed execution strategy. Project and Construction Management staffing is based on experience with similar sized projects. A schedule of rates was applied against a staffing plan aligned with the project schedule and execution plan described in Section 25.

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21.7.12.2 Process Plant Operations The following processing related costs are included in the initial capital:  Management, technical, operations, and maintenance labour employed during the construction phase; and  Energy costs for power consumed during process commissioning and ramp-up activities.

21.7.12.3 Water Treatment Plant Operation The following cost elements are included in the initial capital costs for operation of the water treatment plant for 12 months:  Technical and operations labour;  Power supply;  Reagents, parts, and 3rd party services; and  Brine disposal fees.

21.7.12.4 Pre-Production G&A – Labour Costs for general and administrative labour are included for the following sectors:  Management & administration;  Accounting;  Human resources & training;  Community relations;  IT & communications;  Procurement & logistics;  Health & safety;  Environmental;  Security; and  Facilities management & maintenance. 21.7.12.5 Pre-Production G&A – Equipment Costs for Dalradian owned site support equipment usage are included for the following sectors:  Site Services;  Warehouse/material management;  Security;  Health, safety, & environment; and  Admin/management.

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21.7.12.6 Pre-Production G&A – Expenses & Services Costs for general and administrative expenses and fees are included for the following sectors:  Waste disposal ;  Permanent infrastructure power & maintenance ;  Safety and medical items;  Environmental costs;  Human resources (training, recruitment);  Construction insurance;  Community relations & programs;  Legal & regulatory, including property tax;  External consulting;  IT & communications; and  Site office costs.

21.7.13 Salvage Value Much of the capital equipment brought to site will have some resale value even at the end of mine life. Table 21.6 presents a summary of the purchase price of the equipment and the expected resale value after considering the costs of disassembly and shipment to the port of Belfast. These costs are included as a credit to the project at the end of the mine life (Year 11). Table 21.6: Salvage Value Estimate

Capital Costs Estimated Residual Cash Value Sector (US$ M) Value (US$ M) Underground Mining Equipment 41.3 5% 2.1 Crushers 0.5 10% 0.1 Grinding Mills 2.8 10% 0.3 Pressure Filters 1.8 10% 0.2 Paste Backfill Equipment 3.4 5% 0.2 Power Generation Station 2.2 25% 0.6 Effluent Treatment Plant Equipment 7.4 5% 0.4 Surface Equipment Fleet 2.8 5% 0.1 Total 62.3 3.8 Source: JDS (2016)

21.7.14 Closure Costs Reclamation and closure activities are described in Section 20. Table 21.7 summarizes the closure costs within the model. Progressive closure activities (the DSF engineering/soil cover) occur throughout the mine life. Demolition and closure activities occur during Year 11. Ongoing monitoring and maintenance activities are incurred between Year 12 and Year 16.

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Table 21.7: Reclamation & Closure Cost Summary

Total Cost Category % (US$ M) Progressive Closure 3.4 30 (activities occurring during operations) Demolition & Closure 9.8 86 Ongoing Monitoring & Maintenance 2.1 18 Salvage Value (3.8) (33) Total 11.4 100 Source: JDS (2016)

21.7.14.1 Closure Assurance Costs Closure assurance payments have been included within the capital costs to allow for the reserve accounts that are anticipated to shelter the closure liability. Closure assurance payments are timed to align with the expansion of property disturbance (primarily through expansion of the dry stack facility) as illustrated in Table 21.8. The sum of the closure assurance payments is equal to the total closure liability ($15.3M) less the estimated salvage value of the property upon closure ($3.8M). Table 21.8: Closure Assurance Payments

Category Timing Value (US$ M) Initial Closure Assurance Year -1 7.5 Dry Stack Facility Expansion #1 Year 1 1.3 Dry Stack Facility Expansion #2 Year 4 1.3 Dry Stack Facility Expansion #3 Year 5 1.3 Total 11.4 Source: JDS (2016)

21.7.15 Cost Contingency Contingency is a provision for project costs that will likely occur, but cannot be accurately defined or estimated. Including project contingency in a capital cost estimate is necessary to determine the most likely project cost. A contingency ranging exercise was completed with area leads to apply contingency to the supply and installation cost components of the estimate, by WBS. Applied contingencies ranged from 0 to 20%. The result of this analysis derived an overall contingency of US$17.6 million or 10.1% for pre- production capital costs. The project contingency currently included in the estimate does not include provisions for management reserve.

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21.7.16 Capital Estimate Exclusions The following items have been excluded from the capital cost estimate:  Working capital (included in the financial model);  Financing and interest costs;  Currency fluctuations;  Lost time due to severe weather conditions beyond those expected in the region;  Lost time due to force majeure;  Additional costs for accelerated or decelerated deliveries of equipment, materials or services resultant from a change in project schedule;  Warehouse inventories (i.e. operating spare parts), other than those supplied in initial fills, capital spares, or commissioning spares;  Any project sunk costs (studies, exploration programs, etc.);  Closure bonding; and  Escalation cost.

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22 Operating Cost Estimate

22.1 Introduction & Estimate Results Life of mine (LOM) operating costs for the project average $123.54/tonne processed. This includes the following sectors:  Underground mining;  Mineral processing; and  G&A.

The operating costs exclude off-site costs (such as shipping and refining costs), taxes, and government royalties. These cost elements are used to determine the net smelter return (NSR) in the economic model, and are described in Section 23. Table 22.1 presents a summary of the LOM operating costs, expressed in US$ with no escalation. Figure 22.1 illustrates the distribution of operating costs amongst the cost sectors. Table 22.1: Operating Cost Summary

Average Life of Mine $/t Sector US$ M/year US$ M processed Underground Mining 42.0 442.4 84.44 Processing 13.8 145.8 27.83 G&A 5.6 59.0 11.27 Total Operating Costs 61.4 647.3 123.54 Source: JDS (2016)

Figure 22.1: Distribution of Operating Costs

General & Administration 9%

Processing 23%

Mining 68%

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Source: JDS (2016)

The operating cost estimate was compiled utilizing input from engineers, contractors, and suppliers with operations experience. Wherever possible, bottom-up first principle estimates were developed and benchmarked against other projects of similar size with similar site conditions.

22.2 Operating Cost Profile All operating costs for the project have been time phased against the development schedule in order to support the economic cash flow model. Figure 22.2 presents an annual LOM operating cost profile. Figure 22.2: Life of Mine Operating Cost Profile

100 300

90 270

80 240

70 65 65 65 210 63 62 61 62 61 59 60 180 53 50 150

40 120 32 30 90

20 60 Period Operating Cost (US$ M) (US$ Cost Operating Period 10 30 Unit OperatingCost (US$/t processed) 0 0 1234567891011 Underground Mining Processing General & Administration Unit Operating Cost

Source: JDS (2016)

22.3 Operational Labour Rate Buildup Operational staff labour rates have been built up by applying legal and discretionary burdens against base labour rates. Wage scales were defined and applied to the various operational positions based on skill level and expected salary. Dalradian human resources personnel were involved in the buildup and verification of the operational labour rates.

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LOM averages 381 positions during operations. Levels will fluctuate depending on the amount of underground development. Temporary of contracts workers will be used. Table 22.2 lists the total labour positions per discipline for the construction and operations phases. Table 22.2: Total Labour Table Construction and Operations

Position Construction Operations Mining 119 291 Processing 24 56 G&A 33 33 Total 176 380

22.4 Mining Operating Costs The mining operating costs include the following functional areas:  Underground Mining;  Waste development – costs related to the drilling, blasting, mucking, and hauling of main ramps, raises, drifts and attack ramps;  Production – costs related to the drilling, blasting, mucking, and hauling of ore;  Backfill – costs related to backfill operations, including the paste plant;  Mine Maintenance – maintenance labour costs that support all other sectors; and  Mine General – costs related to mine support activities, such as technical services, shared infrastructure, support equipment, and definition drilling.

Table 22.3: Mining Operating Cost Summary

Average Life of Mine US$/t Area US$ M/year US$ M processed Waste Development 7.6 80.4 15.35 Production 24.5 257.9 49.22 Backfill 2.6 27.1 5.17 Mine Maintenance 2.6 27.2 5.20 Mine General 4.7 49.7 9.49 Total Mining Operating Cost 42.0 442.4 84.44 Source: JDS (2016)

22.4.1 Underground Mining 22.4.1.1 Underground Mining Labour Underground mining staffing levels related to production activities are built up based on the productivities (man-hours) required for mining activities occurring within a given time period. As such, mining manpower fluctuates throughout the mine life.

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Mine labour (including supervision and support) related to development drifting is distributed between capital development (sustaining capital costs) and operating development (operating costs), based on the activities being performed within a given time period. As such, only a portion of the mine staffing is allocated within the mining operating costs. Table 22.4: Underground Mining Labour Costs

Average Life of Mine US$/t Area US$ M/year US$ M processed Lateral Waste Development 4.8 50.7 9.68 Production 3.7 39.4 7.53 Backfill 0.7 7.5 1.44 Mine Maintenance 2.5 25.9 4.95 Mine General 1.3 13.7 2.62 Total Underground Mining Costs 13.0 137.3 26.21 Source: JDS (2016)

Figure 22.3: Underground Mining Operating Costs, by Activity

Mine General 11% Maintenance 6% Development 18% Backfill 6%

Production 59%

Source: JDS (2016)

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Figure 22.4: Underground Mining Operating Costs, by Cost Component

Power Definition Drilling 4% 5% Fuel 7%

Labour 31%

Equipment 20%

Consumables 33%

Source: JDS (2016)

22.4.1.2 Underground Mining Fuel Consumption Underground mining fuel consumption has been built up based on the required equipment operating hours dictated by the mine plan for development or production based equipment, and annual allowances for support or fixed infrastructure equipment, based on experience at similar operations. The unit fuel price used in the estimate is US$1.031/litre, inclusive of delivery to site. Table 22.5: Underground Mining Fuel Costs

Average Life of Mine US$/t Area US$ M/year US$ M processed Lateral Waste Development 0.1 1.5 0.29 Production 2.5 26.3 5.02 Backfill 0.4 4.7 0.89 Total Underground Mine Fuel Cost 3.1 32.5 6.20 Source: JDS (2016)

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22.4.1.3 Underground Mining Equipment Operations Underground mining equipment usage costs are based on the equipment operating hours required to meet the life of mine plan. Equipment usage costs include unit costs ($/hr) for the following elements:  Maintenance parts;  Tires;  Lubricants;  Boxes, buckets, and ground engaging tools; and  Equipment rentals (explosives pump).

Unit costs for the elements above have been obtained from equipment manufacturers databases. Equipment replacements and major (mid-life) overhauls are included in the sustaining capital costs. Table 22.6: Underground Equipment Costs

Average Life of Mine US$/t Area US$ M/year US$ M processed Lateral Waste Development 0.4 4.3 0.82 Production 7.4 77.6 14.81 Mine General 0.8 8.0 1.53 Total Underground Equipment Costs 8.5 89.9 17.16 Source: JDS (2016)

22.4.1.4 Underground Mining Power Electrical power consumption has been based on the equipment connected loads, discounted for operating time and the anticipated operating load level. Underground mining power includes the power consumption of the underground paste plant. Electricity unit cost is based on a budgetary rate of $0.093/kWh. Table 22.7: Underground Mining Power Costs

Average Life of Mine US$/t Area US$ M/year US$ M processed Lateral Waste Development 0.0 0.2 0.03 Production 0.9 9.0 1.73 Backfill 0.5 5.1 0.97 Mine General 0.1 0.8 0.14 Total Underground Consumables Costs 1.4 15.1 2.88 Source: JDS (2016)

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22.4.1.5 Underground Mining Consumables Mining consumable usage rates are built up based on the mine plan quantities for development and production activities. Unit costs are typically based on budgetary quotations. Minor item costs are based on catalog or database values. Three percent of the base quoted or database pricing for consumables has been added within the commodity pricing for delivery (freight) to site. Table 22.8: Mining Consumables Costs

Average Life of Mine US$/t Area US$ M/year US$ M processed Lateral Waste Development 2.3 23.7 4.53 Production 10.0 105.5 20.15 Backfill 1.4 14.5 2.76 Mine Maintenance 0.1 1.3 0.25 Mine General 0.1 1.1 0.22 Total Mine Consumables Costs 13.9 146.2 27.90 Source: JDS (2016)

22.4.1.6 Definition Drilling An all-in quoted budgetary rate of US$78/m has been applied to the definition drilling quantities within the LOM plan. This equates to a total LOM cost of US$21.5M or US$4.09/t processed.

22.5 Processing Operating Costs The process operating costs can be separated into three distinct areas: mineral processing, water treatment, and dry stack facility operation. Table 22.9 presents a summary of the process operating costs by area. The subsections below provide the build ups of each area. Table 22.9: Processing Operating Cost Summary

Average Life of Mine US$/t Area US$ M/year US$ M processed Mineral Processing Plant 11.8 124.1 23.69 Labour 3.3 34.5 6.59 Power 2.4 24.9 4.74 Grinding Media 0.5 5.1 0.98 Liners & Wear Parts 0.5 5.2 1.00 Reagents 2.1 22.3 4.26 Maintenance Parts 0.8 8.5 1.62 Contract Maintenance 0.1 1.5 0.29 Other Items 2.1 22.0 4.20 Water Treatment Plant 1.4 15.3 2.91 Dry Stack Facility 0.6 6.4 1.23 Total 13.8 145.8 27.83 Source: JDS (2016)

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22.5.1 Mineral Processing OPEX 22.5.1.1 Mineral Processing Labour Milling operations and maintenance staffing levels have been built up based on experience at similar operations. Labour costs are based on fully burdened staffing wage bandings, as described in Section 22.3. 22.5.1.2 Mineral Processing Power Electrical power consumption has been based on the equipment connected loads, discounted for operating time and the anticipated operating load level. The total estimated process plant energy consumption is 24.24MWh/year. At an estimated power cost of $0.093/kWh, this equates to US$26.1M/year or US$4.74/t processed. 22.5.1.3 Grinding Media & Liners Grinding media and liners for the grinding mills and primary crusher have been estimated on a kilogram/tonne basis, based on experience at similar operations. Budgetary quotations were received for parts supply. 22.5.1.4 Reagents Milling reagent consumption rates have been determined from the metallurgical test data or experience from other operations (when test data was not available). Unit pricing is based on budgetary quotations. 22.5.1.5 Maintenance Parts Annual maintenance parts costs have been factored at a rate of four percent of the direct capital costs of the equipment within each area. 22.5.1.6 Contract Maintenance & Tooling Annual allowances have been included for local contract labour to perform mill liner replacements and to provide ad-hoc surge maintenance labour during planned shutdowns. An allowance of $3/man-hour is applied to all process staff for general plant consumables and small tools. 22.5.1.7 Other Contract Services Budgetary quotations were received for the design, supply, erection, and operation of the oxygen plant and assay lab. An all-in annual facility fee is applied to the operating costs, covering the facility amortization as well as all labour, maintenance, and consumables. 22.5.2 Water Treatment Plant OPEX The water treatment plant sector includes all costs related to the operation of the water treatment plant. It is assumed that the mineral processing management and maintenance staff will also carry responsibility for the supervision and maintenance of the water treatment plant. Water treatment operating costs were assembled from first principles, based on the estimated flow volumes, unit power and reagent consumptions, and provisions for maintenance services. Budgetary

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quotations were received to develop unit costs for chemicals, consumables, and off-site brine disposal fees. Table 22.10: Water Treatment Operating Cost

Average Life of Mine US$/t Item US$ M/year US$ M Processed Labour 0.3 3.0 0.57 Power 0.1 1.1 0.22 Chemicals & Consumables 0.1 1.0 0.20 Maintenance Parts & Services 0.1 1.2 0.23 Brine Disposal Fees 0.8 8.9 1.69 Total 1.4 15.3 2.90 Source: JDS (2016)

22.5.3 Dry Stack Facility OPEX DSF operating costs include the costs to load, transport, place, and compact dried tailing material from the filtration area of the process plant the dry stack facility by means of articulated surface haul trucks. Table 22.11: DSF Operating Cost

Average Life of Mine $/t Area US$ M/year US$ M Processed Labour 0.3 3.0 0.57 Equipment Operations 0.3 3.4 0.66 Total 0.6 6.4 1.23 Source: JDS (2016)

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22.6 General & Administration Operating Costs Table 22.12: General & Administration Operating Cost Summary

Average Life of Mine US$/t Sector US$ M/year US$ M processed G&A Labour 2.3 23.8 4.54 Management & Administration 0.2 1.9 0.36 Accounting 0.3 3.3 0.63 Human Resources 0.3 3.2 0.60 Community Relations 0.2 1.7 0.32 IT & Communications 0.1 1.2 0.23 Procurement & Logistics 0.4 3.7 0.71 Health & Safety 0.2 2.6 0.50 Environment 0.2 2.1 0.40 Security 0.1 1.3 0.26 Site Services & Facilities 0.3 2.8 0.54 Surface Support Equipment 0.4 4.6 0.88 Water & Waste 0.1 0.5 0.10 Infrastructure Power & Maintenance 0.7 7.2 1.37 G&A Services & Expenses 2.2 22.9 4.38 Personal Protective Equipment 0.0 0.4 0.07 Health & Safety 0.0 0.2 0.04 Environmental & Training 0.2 2.0 0.38 Human Resources 0.3 2.8 0.53 Operations Insurance 1.1 12.0 2.29 Community Relations 0.1 0.5 0.10 Legal & Regulatory 0.2 2.3 0.44 External Consulting 0.1 1.1 0.20 IT & Communications 0.2 1.6 0.30 Site Office Costs 0.0 0.1 0.03 Total 5.6 59.0 11.27 Source: JDS (2016)

22.6.1 G&A Labour G&A staffing levels have been built up based on experience at similar operations. Labour costs are based on fully burdened staffing wage bandings. 22.6.2 G&A Services & Expenses G&A services and expenses have been estimated in consultation with current Dalradian area managers, and with consideration for other similar operations. Major items (logistics, mobile equipment, and insurance) are built up from first principles. Minor items are factored, based on other estimate parameters (such as number of staff) or are general allowances.

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22.7 Taxes Value-added tax (VAT or IVA) applies to goods and services provided in Northern Ireland; however, VAT is fully refundable for operating expenses. As such, no provisions for VAT are included in the operating cost estimates. Provisions are allowed within the working capital in the economic model to account for the time lag in payment and recuperation of VAT.

22.8 Contingency No operating cost contingency provision has been included in the estimate.

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23 Economic Analysis

23.1 Introduction

An engineering economic model has been developed to collate the results of the study work contained within earlier sections of this report, in order to estimate and evaluate project cash flows and economic viability. The financial evaluation includes: determination of the Net Present Value (“NPV”), Internal Rate of Return (“IRR”), and payback. Pre-tax estimates of project values were prepared for comparative purposes, and then after-tax estimates were developed to approximate the true investment value. The economic model enables evaluation of the project’s sensitivities to changes in metal prices, grades, exchange rates, operating costs, and capital costs to determine their relative importance as drivers of project value. Section 23.2 summarizes the economic results, Section 23.3 provides the results of an economic sensitivity analysis, and Section 23.4 provides additional details relating to the various key inputs within the economic model.

23.2 Economic Results

Based on the findings of the FS, it can be concluded that the project is economically viable with an after-tax IRR of 24.4% and an NPV of $301.3M at a 5% discount rate. Table 23.1 presents the results of the evaluated scenario.

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Table 23.1: Summary of Economic Results

Parameter Unit Value

Gold Price US$/oz 1,250 Silver Price US$/oz 17.00 Exchange Rate US:C$ 0.75 Exchange Rate US:GBP 1.20 Exchange Rate US:EU 1.05 Pre-Tax NPV5% US$ M 371.7 Pre-Tax IRR % 27.8 Pre-Tax Payback years 3.6 Total Taxes US$ M 96.7 Corporate Tax Rate % 17.0 After-Tax NPV5% US$ M 301.3 After-Tax IRR % 24.4 After-Tax Payback years 4.0 Break-Even After-Tax Gold Price US$/oz 865 Payback is calculated on annual cash flows without considering discount rates or inflation.

Source: JDS (2016)

Figure 23.1: Annual and Cumulative After-Tax Cash Flows (Undiscounted)

150 750

100 500

50 250

- - -2-11234567891011

(50) (250) Net After-Tax Cashflow (US$ M) (US$ Cashflow Net After-Tax

(100) (500) M) (US$ Cashflow After-Tax Cumulative Period Cashflow Cumulative Cashflow (150) (750)

Source: JDS (2016)

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Table 23.2 provides a summary of the project costs, and provides cash costs per unit for comparative purposes. Table 23.2: Cash Cost Summary

Parameter Unit Value

Total Cash Costs US$ M 754 Silver By-Product Credits US$ M (6) Net Cash Costs US$ M 748 Closure, Reclamation & Remediation US$ M 4 Sustaining Capital Expenditure US$ M 161 All-in Sustaining Cash Costs US$ M 913 Gold Sales 000 pay Au Oz 1,355 LOM All-In Sustaining Cash Costs $/pay Oz 674 Initial CAPEX US$ M 192 Total All-in Sustaining & Construction Costs $/pay Oz 815 Source: JDS (2016)

Table 23.3 presents a condensed annual cash flow model for the evaluated scenario.

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Table 23.3: Condensed Annual Cash Flow Model

Pre- Productio Life of Year - Year - Year Year Year Year Item Unit Productio Year 1 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 n Mine 2 1 2 10 11 12-16 n

Mine Schedule

Total Ore Mined k tonne - 5,239 5,239 - - 374 511 511 511 511 511 511 511 511 511 266 -

Au Grade g/t - 8.5 8.5 - - 8.5 8.5 8.9 8.8 10.1 10.5 11.0 8.2 6.6 5.6 6.2 -

Ag Grade g/t - 3.9 3.9 - - 3.6 3.7 3.8 3.6 3.7 4.3 4.6 3.9 3.9 3.3 5.8 -

Processing Schedule Total Ore k tonne - 5,239 5,239 - - 374 511 511 511 511 511 511 511 511 511 266 - Processed Au Recovery % - 94% 94% - - 1 94% 94% 94% 94% 94% 94% 94% 94% 94% 94% -

Ag Recovery % - 58% 58% - - 1 58% 58% 58% 58% 58% 58% 58% 58% 58% 58% -

Recovered Au k oz - 1,356 1,356 - - 96 131 138 136 156 162 170 127 102 87 50 -

Recovered Ag k oz - 384 384 - - 25 35 36 34 35 41 44 37 37 31 29 -

Net Smelter Return

Au Payable US$ M - 1,694.1 1,694.1 - - 119.8 163.6 172.3 170.5 195.5 202.5 212.3 158.1 127.9 108.6 62.8 -

Ag Payable US$ M - 6.5 6.5 - - 0.4 0.6 0.6 0.6 0.6 0.7 0.7 0.6 0.6 0.5 0.5 - Refining & Assay US$ M - (3.1) (3.1) - - (0.2) (0.3) (0.3) (0.3) (0.4) (0.4) (0.4) (0.3) (0.2) (0.2) (0.1) - Costs Transportation & US$ M - (1.8) (1.8) - - (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) (0.1) - Insurance Royalties US$ M - (102.0) (102.0) - - (7.2) (9.8) (10.4) (10.3) (11.8) (12.2) (12.8) (9.5) (7.7) (6.5) (3.8) - Net Smelter US$ M - 1,593.7 1,593.7 - - 112.6 153.9 162.0 160.4 183.8 190.4 199.7 148.8 120.5 102.2 59.3 - Return Operating Costs

US$/t - 84.44 84.44 - - 108.90 89.55 90.45 89.14 85.73 83.98 65.84 82.50 82.49 82.04 65.91 - Underground Mining US$ M - (442.4) (442.4) - - (40.7) (45.8) (46.2) (45.6) (43.8) (42.9) (33.6) (42.2) (42.2) (41.9) (17.6) -

US$/t - 27.83 27.83 - - 32.87 26.57 26.60 26.67 26.79 26.87 27.01 26.97 26.99 27.22 37.63 - Processing US$ M - (145.8) (145.8) - - (12.3) (13.6) (13.6) (13.6) (13.7) (13.7) (13.8) (13.8) (13.8) (13.9) (10.0) -

US$/t - 11.27 11.27 - - 15.37 10.69 10.60 10.58 10.60 10.56 10.58 10.84 10.88 10.84 15.61 - General & Administration US$ M - (59.0) (59.0) - - (5.7) (5.5) (5.4) (5.4) (5.4) (5.4) (5.4) (5.5) (5.6) (5.5) (4.2) - 126.8 US$/t - 123.54 123.54 - - 157.14 127.66 126.39 123.11 121.41 103.43 120.32 120.36 120.10 119.15 - Total Operating 1 Costs US$ M - (647.3) (647.3) - - (58.8) (64.8) (65.2) (64.6) (62.9) (62.0) (52.9) (61.5) (61.5) (61.4) (31.7) -

Production Income 174.3 US$/t - 180.64 180.64 - - 144.09 189.45 187.45 236.57 251.22 287.41 170.88 115.40 79.88 103.62 - 6 Operating Income US$ M - 946.4 946.4 - - 53.9 89.1 96.8 95.8 120.9 128.4 146.9 87.3 59.0 40.8 27.6 -

Capital Expenditures Mining incl. Paste US$ M (45.9) (142.6) (188.5) (0.4) (45.6) (34.3) (18.4) (15.7) (18.9) (15.6) (19.9) (18.7) (1.1) - - - - Plant Site Development US$ M (8.7) (2.0) (10.7) (7.7) (1.1) (2.0) ------Ore Crushing & US$ M (6.5) (1.4) (7.9) (0.4) (6.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) - Handling Mineral Processing US$ M (36.9) (4.1) (41.0) (8.4) (28.5) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) - Plant On-Site US$ M (28.9) - (28.9) (20.0) (8.9) ------Infrastructure Off-Site US$ M (4.9) - (4.9) (2.7) (2.2) ------Infrastructure Tailings US$ M (1.4) (2.6) (4.0) (1.4) - (1.1) - - (0.7) (0.7) ------Management Project Indirects US$ M (12.7) (2.2) (14.9) (2.4) (10.3) (1.2) (0.1) - (0.1) (0.0) (0.2) (0.5) (0.1) - - - - Detailed US$ M (7.8) - (7.8) (7.1) (0.6) ------Engineering Owners Costs US$ M (13.2) - (13.2) (3.1) (10.0) ------

Contingency US$ M (17.6) (6.4) (24.0) (6.8) (10.9) (1.2) (0.9) (0.8) (1.1) (0.9) (0.9) (0.6) (0.0) - - - -

Total Capital Costs US$ M (184.5) (161.2) (345.7) (60.3) (124.2) (40.4) (19.9) (17.0) (21.3) (17.8) (21.5) (20.3) (1.6) (0.5) (0.5) (0.5) -

Closure Costs

Closure Assurance US$ M (7.5) 7.5 - - (7.5) (1.3) - - (0.6) (0.6) 0.7 - - 0.5 0.9 5.9 2.1 Progressive & Final US$ M - (15.2) (15.2) - - - - - (0.7) (0.7) (0.7) - - (0.5) (0.9) (9.8) (2.1) Closure Closure & US$ M - 3.8 3.8 ------3.8 - Monitoring Closure Costs Net US$ M (7.5) (3.9) (11.4) - (7.5) (1.3) - - (1.3) (1.3) ------Salvage Working Capital

Working Capital US$ M (9.2) 9.2 - - (9.2) (0.6) (0.5) 0.4 (2.1) (0.5) (1.1) 3.6 2.3 1.5 2.7 3.6 -

Cash Flows Net Pre-Tax Cash US$ M (201.2) 790.5 589.3 (60.3) (140.9) 11.6 68.7 80.2 71.1 101.3 105.8 130.2 88.0 60.0 43.1 30.7 - flow Cum. Pre-Tax (120.9 US$ M (201.2) 589.3 589.3 (60.3) (201.2) (189.6) (40.8) 30.3 131.7 237.5 367.7 455.6 515.6 558.6 589.3 589.3 Cash flow ) Taxes US$ M - (96.7) (96.7) - - (0.7) (7.6) (9.7) (10.1) (14.9) (16.5) (20.0) (10.9) (6.4) - - - Net After-Tax US$ M (201.2) 693.8 492.6 (60.3) (140.9) 10.9 61.1 70.4 61.0 86.4 89.3 110.2 77.1 53.6 43.1 30.7 - Cash flow Cum. After-Tax (129.2 US$ M (201.2) 492.6 492.6 (60.3) (201.2) (189.9) (58.8) 2.2 88.7 178.0 288.3 365.3 418.9 461.9 492.6 492.6 Cash flow ) Source: JDS (2016)

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23.3 Economic Sensitivities

To test project value drivers, a sensitivity analysis was performed on the project’s NPV and IRR. The results of this analysis are shown in Figure 23.2 and Figure 23.3. The project proved to be most sensitive to changes in the metal pricing and gold grades.

Figure 23.2: After-Tax NPV5% Sensitivities

600

500

400

300 (US$M) 200

After-Tax NPV @ 5% @ NPV After-Tax 100

- -25% -20% -15% -10% -5% Base +5% +10% +15% +20% +25% Au Price 58 107 157 205 253 301 349 397 445 493 541 Au Grade 58 108 157 206 253 301 349 397 445 493 541 Recovery 57 107 157 205 253 301 349 OPEX 381 365 349 333 317 301 285 270 254 238 222 CAPEX 381 365 349 333 317 301 285 270 254 238 222 GBP F/X 394 376 357 338 320 301 283 264 246 227 208

Source: JDS (2016)

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Figure 23.3: After-Tax IRR Sensitivities

40% 35% 30% 25% 20% 15% After-Tax IRR 10% 5% -25% -20% -15% -10% -5% Base +5% +10% +15% +20% +25% Au Price 9% 13% 16% 19% 22% 24% 27% 29% 32% 34% 36% Au Grade 9% 13% 16% 19% 22% 24% 27% 29% 32% 34% 36% Recovery 9% 13% 16% 19% 22% 24% 27% OPEX 30% 29% 28% 27% 25% 24% 23% 22% 21% 20% 19% CAPEX 34% 32% 30% 28% 26% 24% 23% 21% 20% 19% 17% GBP F/X 31% 29% 28% 27% 26% 24% 23% 22% 21% 20% 18%

Source: JDS (2016)

Figure 23.4 presents the pre-tax and after-tax NPV profile for the project, showing the sensitivity of discount rates against the project’s NPV. Figure 23.4: Discount Rate Sensitivity on NPV

$700

$600

$500

$400

$300 Pre-Tax24% IRR: 28% IRR:After-Tax NPV (US$ (US$ M) NPV $200

$100

$0 0% 5% 10% 15% 20% 25% 30% 35% Pre-Tax NPV After-Tax NPV

Source: JDS (2016)

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23.4 Economic Model Inputs 23.4.1 Metal Production Mining and milling production is based on the respective mine and plant schedules, and recovery parameters determined through metallurgical testing.

Figure 23.5: Gold Production Schedule

200 1,500 180 1,350 160 1,200 140 1,050 120 900 100 750 80 600 60 450 40 300 20 150 Period Payable Gold (k oz)

- - Cumulative Payable Gold (k oz) 1234567891011 Period Payable Gold Cumulative Payable Gold

Source: JDS (2016)

23.4.2 Revenues and NSR Parameters 23.4.2.1 Revenues Annual revenue is determined by applying estimated metal prices to the annual payable metals estimated for each operating year. Sales prices have been applied to LOM production without escalation or hedging. The revenue is the gross value of payable metals before refining charges and transportation charges. Metal sales prices used in the base case evaluation are US$1,250/oz for gold and US$17/oz for silver. 23.4.2.2 NSR Parameters Table 23.4 presents a summary of the NSR parameters used in the model. No contractual arrangements for shipping or refining exist at this time; however, the refining terms have been validated by third party subject area experts and deemed appropriate.

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Table 23.4: Smelter Terms

Parameter Unit Value Payable Gold % 99.95 Payable Silver % 99.00 Refining & Handling Charges US$/ounce Au 2.26 Assumed Shipments per Year # shipments 52 Average Shipment Cost US$/ounce Au 1.34 Source: JDS (2016)

23.4.3 Royalties The project is subject to two royalty payments, which have been considered in the economic evaluation:  Minco Royalty, calculated as 2% of the NSR and payable to Minco Plc.  Crown Estate Commissioners Royalty (CEC), calculated as 4% of the value of recovered metals and payable to the Crown. Total life of mine royalty payments are estimated to be US$102M. 23.4.4 Capital, Operating, and Closure Costs Section 21 and Section 22 of this report present the details and basis of the capital and operating cost estimates, respectively. Each of the cost estimates were aligned to the construction and production schedules to produce the respective cash flows. 23.4.5 Working Capital Working capital has been calculated based on the following parameters:  Average 15 days accounts receivable terms;  Average 30 days accounts payable terms;  Two months of consumables parts inventories; and  30 days carrying cost for the refund of VAT payments.

Working capital in pre-production is estimated at $9.2M. The working capital account peaks in Year 7 at $13.7M. Working capital is progressively recaptured at the end of the mine life and the final value of the account is $0. 23.4.6 Taxes The tax calculations in the financial model are based on the current tax laws in Northern Ireland. The corporate tax rate used in the model is 17.0% of adjusted net income, which was generated following. Deductions for capital cost allowances and available tax loss carryforwards. The resulting effective LOM tax rate is estimated at 10.2%

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24 Adjacent Properties

This section is derived from the previous technical report (Micon (2014)). To the southwest of the Curraghinalt deposit is the Cavanacaw deposit, which is located on the 189 km2 licence OM 1/09 held by Galantas Gold Corporation (Galantas). The processing plant was reported by Galantas as commissioned in January 2007. An NI 43-101-compliant resource estimate was prepared by Galantas (Phelps and Mawson, 2013) dated June 12, 2013, and filed on SEDAR on July 23, 2013. Galantas reported contained gold as follows:  Measured - 3,300 oz Au;  Indicated - 92,000 oz Au; and  Inferred - 231,000 oz Au.

The property was recently producing at a small scale, with production in 2013 reported as 1,349 oz. Au, 2,622 oz. Ag, and 36.3 t Pb. However, Galantas reports no sales for the 6 months to June 2014, so it appears the mine has shut. Neither Micon nor JDS has verified this information and it is not necessarily indicative of the mineralization on Dalradian’s property.

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25 Other Relevant Data and Information

25.1 Project Execution & Development Plan 25.1.1 Introduction The purpose of the Curraghinalt Project Execution Plan (PEP) is to provide a framework for managing the engineering, procurement, and construction phases of the Curraghinalt project (the project), and describes the project development strategies that were considered to form the basis for the capital cost estimate and project schedule within the Curraghinalt project Feasibility Study (FS). The PEP for the FS is based on the following principles:  Promote safety in design, construction, and operations to succeed;  Use fit-for-purpose designs, constructions, and operations;  Establish permanent infrastructure early, to the extent practical, to minimize costs of temporary construction facilities; and  Negotiate contracts with suppliers, contractors, and engineers with proven track records in European mine developments; 25.1.2 Project Execution Locations Dalradian currently operates a corporate office in Omagh. It is not expected that any significant volume of project work will be performed in this office; however, it will be used as a hub for project meetings as required. Detail design will be performed by firms specializing in engineering for mining and milling project. In the field, Dalradian will initially maintain a small office in Omagh during the start of project development until infrastructure is available at site. Starting in Q2, the centre of activity will shift to the project site as major construction activities kick- off and major procurement ramps down. The project strategy is to have the majority of personnel based at the project site to avoid the need for large satellite offices. 25.1.3 Project Development Schedule Overview A resource-loaded level 3 project schedule was developed for the project, using the capital cost estimate as the basis for on-site man-hours to drive activity durations. Table 25.1 presents a summary (level 1) schedule for the development of the Curraghinalt project. The critical path for the project runs through the detailed engineering and construction activities related to the processing facilities. Other near-critical activities include construction of Phase 1 (initial access) of the main access road, site preparations (earthworks and temporary facilities), and establishment of the Water Treatment Plant. Table 25.1 presents a detailed basis of schedule and offers additional commentary surrounding critical and near-critical activities.

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Table 25.1: Project Summary Schedule

Year -2 Year -1 Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Major Milestones

Permit Received

Engineering & Procurement

DD Powerline & Power Studies

DD Contact Water Treatment Plant

DD Tailings Storage Facility

DD Paste Plant

DD Process Plant

Procurement & Delivery of Major Eq.

Earthworks & Mining

Main Access Road

Tailing Storage Facility (Phase 1)

Site Earthworks

U/G Paste Plant Construction

Underground Mine Development

Infrastructure

Contact WTP Installation/Comm.

Admin / Mine Dry / Mine Rescue

Mine Warehouse

Mine Maintenance

On-Site Utilities

33kV Powerline Construction

Process Facilities

Process Plant Civil/Struct/Arch

Crushing & Reclaim Civil/Struc/Arch

Crushing & Reclaim Area

mechanical, piping, electrical, and instrumentation (MPEI)

Process Plant MPEI

Commissioning & Startup

Pre-Op Equip & Systems Testing

Begin Process Commissioning (First Gold)

*DD = Detailed Design

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25.1.4 Project Management 25.1.4.1 Organization & Responsibilities The Project Management Team (“PM Team”) will be an integrated team comprised of the Owners personnel, the contractor, and various engineering sub-contractors. The PM Team will oversee and direct all engineering, procurement, and construction activities for the project. Figure 25.1 presents a representative preliminary organization chart Figure 25.1: Preliminary Project Management Team Organization Chart

25.1.4.1.1 Senior Project Management Overall delivery of the project to the defined metrics will be the responsibility of the Dalradian Project Director. The Project Director will provide high level direction to the PM Team, with support from the contractor and the Owner’s Pre-Operational team to manage project activities. The construction management (CM) Project Manager will be responsibility for the execution of project activities, including detailed engineering, procurement, logistics, construction, commissioning, and Project Controls. 25.1.4.1.2 Owners Operations Team A portion of the Owner’s Operations team will be mobilized during the project development phase for functions required over the life of mine (i.e. not limited to construction support):  Mining operations, including maintenance;  Environmental;  Security;  Accounting;

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 Community Relations;  Human Resources;  Site Services (Construction Manager responsible during construction); and  Site Purchasing (Materials Manager responsible during construction).

25.1.4.1.3 Engineering Team The Engineering Manager will oversee, coordinate, and integrate Engineering activities. The engineering team will consist of various engineering sub-contractors, who will develop the detailed designs and specifications for the project, and then transition to the field to provide quality assurance (QA), field engineering, and commissioning support. 25.1.4.1.4 Procurement Team The Engineering Manager will oversee and manage procurement activities undertaken by engineering contractors (formation and administration of engineering and construction contracts will be overseen and managed by the Contracts Manager). The procurement/logistics team will use the prepared engineering design packages to obtain competitive tenders, and secure vendors and construction contractors to provide the appropriate goods and services. 25.1.4.1.5 Logistics Team The Logistics/Materials Manager will oversee and coordinate all logistics activities. The logistics team will determine and coordinate the best methods for the movement of materials, equipment, and people to, from, and at the project site. 25.1.4.1.6 Construction Management Team The Construction Manager will lead the CM Team and be responsible for construction safety, progress, and quality. The CM Team will coordinate and manage all site activities to ensure construction progresses on schedule and within budget. 25.1.4.1.7 Commissioning Team The Commissioning Manager will oversee the commissioning team, and be responsible for the timely handover of process and infrastructure systems to the Owner once construction activities have been substantially completed. The commissioning team will be supported by discipline engineering resources to complete pre-commissioning activities and obtain technical acceptance and transfer care, custody, and control of completed systems to the Owner. 25.1.4.1.8 Project Controls Team The Project Controls Manager will oversee the Project Controls team, and be responsible for the development, implementation, and administration of the processes and tools for project estimating, cost control, planning, scheduling, change management, progressing, and forecasting.

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25.1.4.2 Project Procedures During the project setup phase (immediately upon project approval), a project Procedures Manual will be developed, which will outline standard procedures for site construction. This document will focus on the interfacing between the Owner, engineering contractors, and address delegation of authority, change management, procurement workflows, QA, and reporting standards. 25.1.5 Engineering 25.1.5.1 Engineering Execution Strategy The general engineering execution strategy for the project will be to utilize multiple engineering firms with specialized knowledge of their assigned scope. Coordination of engineering interfaces and overall management of engineering schedule and deliverables will be the responsibility of the Engineering Manager. The following major engineering contract packages have been identified for the project:  Detailed engineering & procurement of process facilities and select on-site infrastructure and field engineering support;  Detailed engineering of DSF and associated water diversion structures;  Site access road engineering support;  Water treatment plant design;  Hydrological characterization;  Geochemical analysis;  Water balance design;  Power transmission line detailed design; and  Paste plant process design.

25.1.5.2 Engineering Management 25.1.5.2.1 Baseline Engineering Data Engineering data from the FS, including (but not limited to) design criteria, flow sheets, material take- offs, and drawings are considered the engineering baseline data, and form the basis for the capital cost estimate and schedule. Deviations from these baseline engineering inputs, beyond clarifying and finalizing scope, and detailing of designs will be subject to the project change management processes. 25.1.5.2.2 Design Criteria Approval The project critical path includes timely completion of engineering activities. To prevent delays or late changes in engineering deliverables and to keep efforts focused, a formal engineering approval procedure will be enacted for the project.

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25.1.5.2.3 Engineering Progress & Performance Monitoring Each engineering contractor will provide a deliverables list as part of their services proposal. Deliverables (and their associated budgets) will be grouped into logical Engineering Work Packages (EWPs), which will be used as the metric for tracking engineering progress for the project. 25.1.6 Procurement & Contracting 25.1.6.1 Procurement Execution Strategy The general procurement execution strategy for the project will involve utilizing known suppliers, with a preference for local or regional suppliers and construction contractors. The engineering subcontractor procurement Manager (under the direction of the Engineering Manager) will have overall responsibility for the majority of pre-purchased procurement and contract formation activities. Contract administration will be the responsibility of the Contracts Manager on-site. 25.1.6.2 Construction Contracting Strategy Table 25.2 presents a listing of the major contract packages identified for the project. For the purpose of the Feasibility Study, all mechanical, piping, electrical, and instrumentation (MPEI) works have been identified as performed by a single entity within the project estimate and schedule. During project execution, a minimum of two MPEI contractors will be engaged to avoid reliance on the performance of a single entity. During contractor pre-qualifications, if multi-discipline contractors cannot be sourced, then a horizontal contracting strategy will be employed (separate contractors for each trade, i.e. mechanical, piping, electrical, and instrumentation). The strategy for the underground mining activities on the project is to use Owner forces, with select seconded trainers from contract labour providers.

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Table 25.2: Major Construction Contracts (Capital Phase)

Estimated Estimated Contract PBS Contract Man-Hours Value ($M US) Type

CC001 Bulk Earthworks 60,700 6.6 Unit Rate CC002 Tailing Facility & Diversion Channel Construction 36,000 4.3 Unit Rate CB001 Concrete Installations 79,500 4.9 Unit Rate

CE001 HV Power Transmission Line Installation 24,100 2.8 Lump Sum

CE003 Underground Electrical Distribution 24,700 5.3 Lump Sum

CA001 Plant Site Architectural Works 32,600 4.6 Lump Sum

CS001 Structural Steel Supply & Erection 266,300 17.8 Unit Rate

CS002 Ancillary Buildings Supply/Install 5,000 0.5 Lump Sum

CG001 Mechanical/Piping/Electrical/Instrumentation #1 60,700 6.6 T&M CG003 Pre-Operational Commissioning Support 36,000 4.3 T&M Overall Note: man-hours include direct and indirect personnel, for the construction (capital) phase only

25.1.6.3 Procurement Schedule & Critical Activities Procurement activities will be prioritized to schedule critical items, both due to fabrication/delivery time of the equipment (such as the grinding mill package and underground mining equipment), and due to the necessity to obtain certified vendor data to complete structural and foundation designs. Tendering and award of the following packages are considered time critical:  Main access road construction;  Detailed engineering packages, particularly the Tailing Storage Facility, and Processing and Infrastructure packages;  Water treatment plant;  Site earthworks; and  Concrete installations.

25.1.6.4 Selection of Suppliers & Contractors A competitive bidding process will be applied to achieve the best commercial and technical results from the procurement effort. During the project setup phase, any preferred vendors will be identified and sole source strategies implemented into the procurement plan. Local involvement will form part of the bid evaluation scoring criteria in order to give preference for suppliers and contractors in the UK (specifically Northern Ireland).

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The level of vendor quality surveillance/inspection (VQS) required for each package will be established during bid evaluations, and will be determined by evaluating a supplier’s ability to achieve suitable quality according to specifications and project QA requirements. 25.1.7 Logistics & Material Management 25.1.7.1 Logistics Execution Strategy The general logistics strategy for the project is as follows:  Ensure expediting activities achieve the project schedule requirements;  Manage freight movement on a global basis to maximize leveraging the freight tonnage/volume to optimize cost associated with the movement of freight; and  Identify and optimize various aspects such as logistics, customs clearance and local content.

25.1.7.2 Shipping Routes Materials and equipment will be brought to site by road from both Belfast and Londonderry which will be the location international freight will be shipped to. All road transport is on paved road, with the exception of the 1.5 km site access road, which will be constructed with a gravel surface until Year 1 of operation. 25.1.7.3 Freight Quantities Table 25.3 presents the estimated international and domestic freight quantities for the project. Table 25.3: Freight Quantities

Grouping Loads Tonnes Pre-purchased Equipment 398 6,900 Contractor Equipment & Materials 715 15,000 Misc. Field Packages 95 1,150 Mining Consumables 153 3,050 Diesel Fuel 50 850 Explosives 16 400 Total 1,427 27,350

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25.1.7.4 Shipping Constraints The following considerations, based on a detailed road survey between Belfast and Londonderry Port and site, will be made in the design of shipping units for the project, or when considering any pre-assembly opportunities.  Width: 5.90 m;  Height: 4.85 m;  Maximum length: 18.29 m; and  Maximum weight: 60-80 t including truck & trailer. Early in the construction phase of the project, before the main access road is widened and graded to design, small quantities of freight will need to be mobilized to the project, including temporary facilities. Transportation of this freight on the main access road may require the assistance of tracked equipment. International freight will be containerized to the greatest extent possible to reduce port and yard handling fees, and to expedite offloading at site. 25.1.7.5 Pre-Assembled Equipment Pre-assembly strategies reduce overall site man-hours and the associated indirect costs, but require more careful engineering and logistics planning. The following goods have been identified for pre- assembly within the FS estimate:  Electrical houses;  Water treatment plant;  Fuel tanks;  Water and process tanks (up to 5 m diameter);  Fuel loading/unloading station;  Conveyors (shipped in prefabricated lengths); and  Transfer towers, braced frames, and stair towers.

25.1.7.6 Site Materials Strategy The general strategy for site materials control is as follows:  Control and supervise materials movement at site through materials/inventory control from receiving, preservation, inventory and free-issue to contractor to meet the project requirements for equipment and materials procured by the construction team or Dalradian (process equipment, as an example);  Leverage contractor methods and procedures for receipt, storage, and retrieval of materials procured within their scope of work;  Utilize a common labour pool for warehouse and laydown staff (equipment operators & labourers) for the management and movement of freight, except for items requiring special handing or rigging (such as structural steel);

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 Utilize a single temporary warehouse to be used for the receipt and storage of all equipment requiring climate controlled indoor storage. Equipment and material that do not require climate controlled storage will be stored in laydown areas within the construction site. Use of sea containers and/or temporary shelters will be required to store goods that need to be protected construction.

25.1.7.7 Construction Execution Plan Overview The main objectives of the construction execution strategy for the Curraghinalt project include:  Execute all activities with a goal of Zero harm to people, assets, the environment, or reputation;  Strive to eliminate process, operational and maintenance safety hazards;  Meet or exceed environmental regulatory and permit requirements to minimize impact;  Deliver a high quality facility that meets or exceeds the defined project goals;  Establish and maintain a high level of motivation by providing a positive working environment for all personnel;  Identify and remove barriers that affect project progress;  Cultivate an atmosphere of positive social impact in the surrounding communities; and  Identify outstanding achievements during construction and commissioning of the project.

The path of construction for the Curraghinalt project is driven by two main critical paths:  Key infrastructure development early in the schedule to support the start of pre-production mining activities for the development of underground workings and ore production; and  Concurrent construction of the processing and ancillary areas to allow early operations.

The overall construction duration, from the start of the main access road construction to the commissioning of commercial production will be approximately 18 months. 25.1.7.8 Site Management During the construction phase, the construction project manager and the mine project manager (or their designate) will carry overall responsibility for the project site. A division of area responsibility will be established between the construction project manager and mine project manager. 25.1.7.9 Construction Management The Construction Manager will be responsible for construction contractors oversight. Figure 25.2 shows the CM responsibility for the superintendents.

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Figure 25.2: Construction Management Responsibilities

25.1.7.10 Safety Management A comprehensive Safety Management Plan (“SMP”) will be developed prior to site mobilization. The SMP will address overall safety policies, procedures, and standards for the project, including standard operating practices and emergency response plans. 25.1.7.11 Quality Management Construction quality will be managed through the implementation of a Site Quality Management Plan (“SQMP”), which will detail the site quality management systems to be used for all construction activities. The SQMP encompasses all activities of the project, including design, procurement and construction. Site QA is the responsibility of the Field Engineering team, and is verification that QC is being performed by the contractor, subcontractor, laboratory and third party inspection services. 25.1.7.12 Construction Quantities Table 25.4 presents the estimated major commodity quantities for the project. Quantities are based on the Feasibility Study engineering take-offs and capital estimate.

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Table 25.4: Major Construction Commodities & Man-Hours

Commodity Quantity Discipline UOM Quantity Power Transmission Line km 38 Bulk Earthworks – Total Cut m3 369,000

Bulk Earthworks – Total Fill m3 418,500

Bulk Earthworks – Crushed Material m3 95,900

HDPE Liners m2 116,000

Site Wide Concrete (including lean-concrete) m3 5,200

Structural Steel (excluding buildings) Tonne 830

Process Buildings (Crusher & Plant) m2 3,400

Ancillary Buildings – m2 5,273 Mechanical (Crushing and Plant Area Only) # tagged equip 258 Cable Tray km 2,100 Power Cable km 18,700 Note: Piping and electrical quantities above do not include the WTP or Paste Plant – only monetary allowances were made in the piping and electrical estimates for these areas.

25.1.7.13 Construction Milestones Table 25.5 presents the major construction milestones for the project. Table 25.5: Major Construction Milestones

Milestone Date Begin Main Access Road Construction Month 1 Begin Portal Construction (Enabling Works) Month 1 Initial Site Development (Enabling Works) Month 1 Site Accessible by Tractor Trailers Month 2 (allows heavy equipment deliveries) Begin Bulk Earthworks/ Site Development Month 2 Begin Process Plant Construction Month 4 (Concrete Installations) Complete Phase 1 WRSF Month 3 Commission Water Treatment Plant Month 3 Begin Underground Mining Month 3 Mechanically Complete Process Facilities Month 13 Commercial Production Declared Month 18

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25.1.8 Commissioning 25.1.8.1 Commissioning Methodology Progressive commissioning for the Curraghinalt project will be performed by subsystem. A system will be defined as a logical grouping of equipment or systems that can be placed in service more or less by itself and that contribute to a common purpose or functionality. A system may also be a facility or a building. Subsystems will be defined during detailed engineering. 25.1.8.2 Commissioning Safety & Training The Health, Safety, and Environmental Plan (HSE Plan) developed during execution will address specific safety procedures that will apply during the commissioning stage of the project. The commissioning and turnover phase presents significant and unique safety risks. A comprehensive lock-out tag-out program is an effective control to manage these risks. 25.1.8.3 Commissioning Stages  Construction Release (Stage 1): Construction contractor completes a system subject to agreed punch list items.  Pre-Operational Equipment Testing (Stage 2): Energize and test individual equipment within subsystems to ensure functionality; includes equipment functionality tests controlled by the Plant Control System (signed off loop diagrams).  Pre-Operational Systems Testing (Stage 3): Systems tested with water, air and insert materials, and capable of continuous and safe operation with all instrumentation connected, the control system operational, and all interlocks functional.  Ore Commissioning (Stage 4): Plant ready to accept ore and all operating and maintenance staff are fully trained to operate and maintain the plant; individual systems operate successfully under load for a defined period of time.  Ramp-Up (Stage 5): Increase ore feed design throughput rate.

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26 Interpretations and Conclusions

Results of this Feasibility Study demonstrate that the Curraghinalt project warrants development due to its positive, robust economics. It is the conclusion of the QPs that the FS summarized in this technical report contains adequate detail and information to support a feasibility level analysis. Standard industry practices, equipment and design methods were used in this Feasibility Study and except for those outlined in this section, the report authors are unaware of any unusual or significant risks or uncertainties that would affect project reliability or confidence based on the data and information made available. For these reasons, the path going forward must continue to focus on obtaining the environmental permit approval, while concurrently advancing key activities that will reduce project execution time. Risk is present in any development project. Feasibility engineering formulates design and engineering solutions to reduce that risk common to every mining project such as resource uncertainty, mining recovery and dilution control, metallurgical recoveries, environmental and social impact, political risks, schedule and cost overruns, and labour sourcing. JDS is of the opinion that these risks have been clearly identified and mitigation measures have been considered. Potential risks associated with the Curraghinalt project include:  Environmental Permitting – There is risk to the project related to potential delays in receiving the required environmental and construction permits to construct the mine. Dalradian will need to continue working closely with the regulatory authorities and provide detailed information to prove the effectiveness of mitigation measures developed to manage the various impacts. Dalradian has invested in developing constructive relationships with its immediate neighbours as well as other project-affected communities. Through consultation processes, stakeholders have raised normal concerns about the project. These are being addressed in the project design and management plans as far as possible. Ongoing consultation with neighbouring landowners and other community stakeholders will be required during the life of the project to ensure that any concerns are swiftly resolved.  Groundwater - The extent to which the inflow estimates are realized, require that the development plan addresses mitigating variation. Increases in the actual amount of groundwater encountered would impact development costs. Drilling for drainage, and operational definition drilling included in the mine plan will help to identify specific water bearing zones with higher than expected flows and establish control and/or management procedures. As well, initiating certain development earlier in the mine life to allow more time for dewatering may prove cost effective.  Geomechanical Conditions – Comprehensive studies were done to accurately estimate anticipated ground conditions in the proposed underground mine. There is a risk that a larger percentage of the ore must be extracted using C&F in certain areas rather than the longhole method resulting in higher costs. This risk can be managed by completing additional geotechnical investigations and study on areas identified in the Feasibility Study has potentially having weaker ground conditions.

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The FS has highlighted several opportunities to increase mine profitability and project economics, and reduce identified risks.  Inferred Resources – Inferred resources are not included in the production schedule; however, a plan to infill drill specific areas could significantly improve the project economics. Operational definition drilling will test Inferred resources as part of the production sequence. The conversion of existing Inferred resources and the identification of additional Inferred resources that can be converted into Measured & Indicated classes, and potentially into Proven & Probable Reserves, will have a compounding positive effect in that the development per ore tonne will be decreased as well as vertical mining advance rates.  Infill Drilling – Additional infill drilling has the potential to increase the confidence in the resource estimate of the deposit and increase overall gold grade.  Geotechnical – Additional geotechnical investigation at the deposit, especially in areas identified as having relatively weaker ground conditions in the Feasibility Study, will assist in optimizing the mine design and ground support recommendations in these areas. Potential exists, if proven, to shift the mining method in these areas from higher cost cut & fill to lower cost longhole stoping leading to an improvement in project economics and the production rate.  Corporate Tax Rate – The Feasibility Study used the existing 17% tax rate. The UK government has indicated publicly that a tax rate of 12.5% is planned. If enacted into law this change in tax rate will have a positive effect on the project economics.  Mine Design – Further optimization of the Feasibility Study mine design, including the results from additional geotechnical investigations, has the potential to increase the mine production rate and lower operating costs.  Increased Gold Recovery - Potential exists to increase gold recovery through further metallurgical test work and optimization of the process flow sheet.  Ore Sorting – The use of optical and laser ore sorting technology has the potential to separate waste rock contained within the feed entering the process plant. Applying ore sorting technology ahead of the process plant could increase the head grade and free up plant capacity and possibly have a positive impact on project economics and can also reduce the cut-off grade and increase the ore body recovery..  Used Equipment – Potential exists to reduce project capital costs by acquiring used equipment that meets the required specifications. This would have a positive impact on the project’s economics and reduce the lead time for ordering.  Construction Costs - Civil construction capital cost may be reduced by additional engineering to better balance cut-and-fill of the plant site and water management infrastructure.  Concrete Reduction - Opportunity exists to reduce concrete quantities with more geotechnical investigation during detailed engineering.

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27 Recommendations

Due to the positive, robust economics, it is recommended to expediently advance the Curraghinalt project to construction and development, and then production. The recommended development path is to continue efforts to obtain the environmental permit approval while concurrently advancing key activities that will reduce project execution time. Associated project risks are manageable, and identified opportunities can provide enhanced economic value. The project exhibits robust economics with the assumed gold price, currency exchange rates, and consumables pricing. The risks are acceptable as well. Value engineering and recommended fieldwork should be advanced in preparation of permit approval in order to de-risk the construction schedule and minimize costs. From the identified project risks and opportunities, the following were noted as critical actions that have the potential to strengthen the project and further reduce risk and should be pursued as part of the project development plan. Regarding the Section 1.15 opportunities, recommendations are as follows:  Inferred Resources – Continue with exploration drilling program designed to find additional Inferred Resources, and convert existing Inferred Resources, into higher confidence Measured & Indicated Resources.  Infill Drilling – Conduct further infill exploration drilling within the ore zones planned in the Feasibility Study in order to optimize the mine plan.  Geotechnical – Perform additional geotechnical investigations at the Curraghinalt deposit, especially in areas identified as having relatively weaker ground conditions in the Feasibility Study.  Mine Design – Continue with optimizing the Feasibility Study mine design, including the results from additional geotechnical investigations.  Increased Gold Recovery - Conduct further metallurgical test work and optimization of the process flow sheet.  Ore Sorting – Investigate the use of ore sorting technology as a method to increase the mill feed grade and reject waste rock by completing metallurgical test work and trade-off studies.  Used Equipment – Engage an engineering & construction firm to source quality used equipment that meets the required specifications. Conduct trade-off studies to ensure used pieces of equipment are cost effective to the project.  Basic & Detailed Engineering – Initiate basic and detailed engineering work to finalize engineering designs and prepare work packages for procurement.

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Table 27.1: Estimated Post-Feasibility Budget

Description Cost ($ M) Exploration and Infill Diamond Drilling 10.0 Technical Studies 2.3 Detailed Engineering 7.7 Total 20.0

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28 References

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Cooper, M.R., Crowley, Q.G., and Rushton, A.W.A., 2008. New age constraints for the Ordovician Tyrone Volcanic Group, Northern Ireland: Journal of the Geological Society of London, v. 165, p. 333–339. Cooper, M.R., Crowley, Q.G., Hollis, S.P., Noble, S.R., Roberts, S., Chew, D., Earls, G., Herrington, R., and Merriman, R.J., 2011, Age constraints and geochemistry of the Ordovician Tyrone Igneous Complex, Northern Ireland: Implications for the Grampian orogeny: Journal of the Geological Society of London, v. 168, p. 837–850, doi:10.1144/0016-76492010-164. Cooper, M.R and Johnston, T.P., 2004, Central Highlands (Grampian) terrane-metamorphic basement, in Mitchell, W.I. ed., The geology of northern Ireland: Geological Survey of Northern Ireland, p. 25-40. Cooper, M.R and Mitchell, W.I., 2004, Midland Valley terrane, in Mitchell, W.I. ed., The geology of northern Ireland: Geological Survey of Northern Ireland, p. 25-40. CSA, 1997. Polygonal Resource Calculation of a 1.25 m Minimum Mining Width at the Curraghinalt Deposit, prepared for Ennex International, May, 1997. Draut, A.E., Clift, P.D., Chew, D.M., Cooper, M.J., Taylor, R.N., and Hannigan, R.E., 2004. Laurentian crustal recycling in the Ordovician Grampian orogeny: Nd isotopic evidence from western Ireland: Geological Magazine, v. 141, p. 195–207. Earls, G., Hutton, D.H.W., Wilkinson, J.J., Moles, N., Parnell, J., Fallick, A.E., and Boyce, A.J., 1996, The gold metallogeny of northwest Northern Ireland: Geological Society of Northern Ireland Technical Report 96/6, 107 p. Flowerdew, M.J., Daly, J.S., Guise, P.G., and rex, D.C., 2000, Isotopic dating of overthrusting, collapse and related granitoid intrusion in the Grampian orogenic belt, northwestern Ireland: Geological Magazine 137, p. 419-435. Franklin, J.M, H.L. Gibson, I.R. Jonasson, and A.G. Galley, 2005, Volcanogenic Massive Sulphide Deposits: in Hedenquist, J.W., Thompson, J.F.H., Goldfarb, R.J., and Richards, J.P., eds., Economic Geology, 100th Anniversary Volume, The Economic Geology Publishing Company, 523-560. Friedrich, A.M., Hodges, K.V., Bowring, S.A., and Martin, M.V., 1999, Geochronological constraints on the magmatic, metamorphic and thermal evolution of the Connemara Caledonides, western Ireland: Journal Geological Society London 156, p. 1217-1230.1999 Galley A.G., Hannington M.D., Jonasson I.R., 2007. Volcanogenic massive sulphide deposits. In: Goodfellow WD (ed.). Mineral deposits of Canada: a synthesis of major deposit—types, district metallogeny, the evolution of geological provinces, and exploration methods. Gibson, H.L., Allen, R. L., Riverin, G., and Lane, T. E., 2007. The VMS Model: Advances and Application toExploration Targeting In Proceedings of Exploration 07: Fifth Decennial International Conference on Mineral Exploration edited by B. Milkereit, 2007, p. 713-730. Goldfarb R.J., Groves D.I., Gardoll S., 2001, Orogenic gold and geologic time: a global synthesis: Ore Geology Reviews, v. 18, p. 1–75. Goldfarb R.J., Baker T., Dube B., Groves D.I., Hart C.J.R., Gosselin P., 2005, Distribution, character, and genesis of gold deposits in metamorphic terranes, in Hedenquist J. W., Thompson J. F. H.,

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Tomkins A.G., 2013a, A biogeochemical influence on the secular distribution of orogenic gold: Economic Geology and the Bulletin of the Society of Economic Geologists, v. 108, p. 193–197. Tomkins A.G., 2013b, On the source of orogenic gold. Geology – Geological Society of America - http://geology.gsapubs.org/content/41/12/1255.short?rss=1&ssource=mfr Tomkins A.G., 2010, Windows of metamorphic sulphur liberation in the crust: Implications for gold deposit genesis: Geochimica et Cosmochimica Acta, v. 74, p. 3246–3259. Tully, John V., January 27, 2005. Technical Review Report on the Curraghinalt Gold Property, Exploration Licence UM-1/02 (UM-11/96), County Tyrone, Northern Ireland, prepared for Tournigan Gold Corporation. Wilkinson, J.J., Boyce, A.J., Earls, G., and Fallick, A.E., 1999, Gold remobilization by low- temperature brines: Evidence from the Curraghinalt gold deposit, Northern Ireland: Economic Geology 94, p. 289-296. Barton N., Lien R., Lunde J. 1974. Engineering classification of rock masses for the design of tunnel support. Rock Mech. May, 189-236. Carter, T.G., Cottrell, B.E., Carvalho, J.L., and Steed, C.M. 2008. Logistic Regression improvements to the Scaled Span Method for dimensioning Surface Crown Pillars over civil or mining openings Grimstad, E., Barton, N. 1993. Updating the Q-System for NMT. Proceedings of the International Symposium on Sprayed Concrete – modern use of wet mix sprayed concrete for underground support, Fagernes. 46-66. Oslo: Norwegian Concrete Assn. Laubscher, D.H. 1990. A geomechanics classification system for the rating of rock mass in mine design. J. S. Afr. Inst. Min. Metall., Vol. 90, no. 10, 257-273p. Mawdesley, C. Trueman R. Whiten W. 2001. Extending the Mathews stability graph for open stope design. Trans. IMM (Section A). Volume 110, p A27-39 McCracken, A., Stacey, T.R. 1989. Geotechnical risk assessment for large-diameter raise-bored shafts. Proc. Conference on Shaft Engineering, Harrogate, 5-7, 309-316p. Ouchi, A., Pakalnis, R., Brady, E. 2004. Update of Span Design Curve for Weak Rock Masses. Proc. of the 99th Annual AGM-CIM Conference. SRK Consulting. 2016. Curraghinalt Project – 2015/2016 Overburden Geotechnical Investigation Program. Stewart S. B.V., Forsyth W.W. 1995. The Matthews method for open stope design. CIM Bull., 88, no. 992, 45-53

Effective Date: December 12, 2016 28-5

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Hennessey, B. T. and Mukhopadhyay, D. K., 2010. A Mineral Resource Estimate for the Curraghinalt Gold Deposit and a Review of a Proposed Exploration Program for the Tyrone Project, County Tyrone and County Londonderry, Northern Ireland. An NI 43-101 Technical Report for Dalradian Resources Inc., 122 pp. Filed on SEDAR, www.sedar.com. Hennessey, B.T. and Mukhopadhyay, D. K. 2012a. An Updated Mineral Resource Estimate for the Curraghinalt Gold Deposit, Tyrone Project, County Tyrone And County Londonderry, Northern Ireland. An NI 43-101 Technical Report for Dalradian Resources Inc., 134 pp. Filed on SEDAR, www.sedar.com. Hennessey, B.T., Foo, B., Damjanovic, B., Villeneuve, A. and Jacobs, C., 2012b. A Preliminary Economic Assessment of the Curraghinalt Gold Deposit, Tyrone Project, Northern Ireland. An NI 43- 101 Technical Report for Dalradian Resources Inc., 297 pp. Filed on SEDAR, www.sedar.com. Micon, NI 43-101 Technical Report Preliminary Economic Assessment, Curraghinalt Project, Northern Ireland, October 30, 2014 Micon, NI 43-101 Updated Technical Report Preliminary Economic Assessment, Curraghinalt Project, Northern Ireland, May, 2016 SRK, Jan. 2017, Water Management Report for the Curraghinalt Gold Feasibility Study, Northern Ireland. SRK, Feb. 2017, Surface Water Baseline Report for the Curraghinalt Project, Northern Ireland. SRK, Feb. 2017, Surface Water Baseline Report for the Curraghinalt Project, Northern Ireland. Curraghinalt Gold project, Paste Backfill Study, Final Report (A) dated September 2016; and Underground Paste Backfill Distribution, Preliminary design dated September 2016.

Effective Date: December 12, 2016 28-6

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

29 Units of Measure, Abbreviations and Acronyms

Symbol/Abbreviation Description ' Minute (Plane Angle) " Second (Plane Angle) or Inches ° Degree °C Degrees Celsius 3D Three-Dimensions A Ampere a Annum (Year) AA Atomic Absorption ac Acre ADR Adsorption-Desorption-Recovery AES Atomic Emission Spectroscopy amsl Above Mean Sea Level ANFO Ammonium Nitrate/Fuel Oil ARD Acid Rock Drainage Au Gold BD Bulk Density BFA Bench Face Angles BTU British Thermal Unit BV/h Bed Volumes Per Hour C$ Dollar (Canadian) Ca Calcium CBA Cooperation And Benefits Agreement CCA Capital Cost Allowance CDE Canadian Development Expense CDP Cyanide Detoxification Plant CEE Canadian Exploration Expense CF Cumulative Frequency cfm Cubic Feet Per Minute CHP Combined Heat And Power Plant CIC Carbon-In-Column CIM Canadian Institute Of Mining And Metallurgy CIM Canadian Institute Of Mining cm Centimetre CM Construction Management cm2 Square Centimetre cm3 Cubic Centimetre COG Cut-Off Grades Cr Chromium CSA Canadian Securities Administrators Cu Copper CV Coefficient of Variation d Day d/a Days per Year (Annum) d/wk Days per Week

Effective Date: December 12, 2016 29-1

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Symbol/Abbreviation Description dB Decibel dBa Decibel Adjusted DCS Distributed Control System DGPS Differential Global Positioning System dmt Dry Metric Ton EA Environmental Assessment EDA Exploratory Data Analysis EMR Energy, Mines and Resources EP Engineering and Procurement Engineering, Procurement and Construction EPCM Management FEL Front-End Loader FISS Fisheries Information Summary System FOB Free On Board FOC Fisheries and Oceans Canada FS Feasibility Study ft Foot ft2 Square Foot ft3 Cubic Foot ft3/s Cubic Feet Per Second g Gram G&A General And Administrative g/cm3 Grams Per Cubic Metre g/L Grams Per Litre g/t Grams Per Tonne gal Gallon (Us) GCL Geosynthetic Clay Liner GJ Gigajoule GPa Gigapascal gpm Gallons Per Minute (US) GSC Geological Survey of Canada GTZ Glacial Terrain Zone GW Gigawatt h Hour h/a Hours Per Year h/d Hours Per Day h/wk Hours Per Week ha Hectare (10,000 M2) HCR Haggart Creek Road HG High Grade HLP Heap Leaching Pads HMI Human Machine Interface hp Horsepower HPGR High Pressure Grinding Rolls HPW Highways And Public Works HQ Drill Core Diameter Of 63.5 Mm HSE Health, Safety and Environmental HVAC Heating, Ventilation, and Air Conditioning

Effective Date: December 12, 2016 29-2

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Symbol/Abbreviation Description Hz Hertz ICMC International Cyanide Management Code ICP Inductively Coupled Plasma ICP-MS Inductively Coupled Plasma Mass Spectrometry in Inch in2 Square Inch in3 Cubic Inch IP Internet Protocol IRR Internal Rate Of Return JDS JDS Energy & Mining Inc. K Hydraulic Conductivity k Kilo (Thousand) KCA Kappes, Cassiday & Associates KE Kriging Efficiency kg Kilogram kg Kilogram kg/h Kilograms Per Hour kg/m2 Kilograms Per Square Metre kg/m3 Kilograms Per Cubic Metre km Kilometre km/h Kilometres Per Hour km2 Square Kilometre KNA Kriging Neighbourhood Analysis kPa Kilopascal kt Kilotonne kV Kilovolt KV Kriging Variance kVA Kilovolt-Ampere kW Kilowatt kWh Kilowatt Hour kWh/a Kilowatt Hours Per Year kWh/t Kilowatt Hours Per Tonne L Litre L/min Litres Per Minute L/s Litres Per Second LAN Local Area Network LDD Large-Diameter Drill LDRS Leak Detection And Recovery System LG Low Grade LG Lerchs- Grossman LOM Life Of Mine m Metre M Million m/min Metres Per Minute m/s Metres Per Second m2 Square Metre m3 Cubic Metre m3/h Cubic Metres Per Hour

Effective Date: December 12, 2016 29-3

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Symbol/Abbreviation Description m3/s Cubic Metres Per Second Ma Million Years mamsl Metres Above Mean Sea Level MAP Mean Annual Precipitation masl Metres Above Mean Sea Level Mb/s Megabytes Per Second mbgs Metres Below Ground Surface mbs Metres Below Surface mbsl Metres Below Sea Level MCC Motor Control Centres mg Milligram mg/L Milligrams Per Litre min Minute (Time) mL Millilitre Mm3 Million Cubic Metres MMER Metal Mining Effluent Regulations mo Month MPa Megapascal MRE Mineral Resource Estimate Mt Million Metric Tonnes MVA Megavolt-Ampere MW Megawatt MWMT Meteoric Water Mobility Tests MWTP Mine Water Treatment Plant NAD North American Datum NG Normal Grade Ni Nickel NI 43-101 National Instrument 43-101 Nm3/h Normal Cubic Metres Per Hour NPVS NPV Scheduler NQ Drill Core Diameter of 47.6 Mm NRC Natural Resources Canada OIS Operator Interface Stations OP Open Pit ORE Ore Research And Exploration OREAS Ore Research & Exploration Assay Standards OSA Overall Slope Angles oz Troy Ounce P.Geo. Professional Geoscientist Pa Pascal PAG Potentially Acid Generating PEA Preliminary Economic Assessment PEP Project Execution Plan PFS Preliminary Feasibility Study Plc Programmable Logic Controller PLS Pregnant Leach Solution PMF Probable Maximum Flood ppb Parts Per Billion

Effective Date: December 12, 2016 29-4

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Symbol/Abbreviation Description ppm Parts Per Million psi Pounds Per Square Inch QA/QC Quality Assurance/Quality Control QKNA Qualitative Kriging Neighbourhood Analysis QMA Quartz Mining Act QML Quartz Mining Licence QMS Quality Management System QP Qualified Person QQ Quartile-Quartile RC Reverse Circulation RMR Rock Mass Rating ROM Run Of Mine rpm Revolutions Per Minute RQD Rock Quality Designation s Second (Time) S.G. Specific Gravity SARA Species At Risk Act Scfm Standard Cubic Feet Per Minute SEDEX Sedimentary Exhalative SG Specific Gravity SRK SRK Consulting Services Inc. SVOL Search Volume t Tonne (1,000 Kg) (Metric Ton) t/a Tonnes Per Year t/d Tonnes Per Day t/h Tonnes Per Hour TCR Total Core Recovery tph Tonnes Per Hour ts/hm3 Tonnes Seconds Per Hour Metre Cubed TSS Total Suspended Solids US United States US$ Dollar (American) UTM Universal Transverse Mercator V Volt VEC Valued Ecosystem Components VoIP Voice Over Internet Protocol VSEC Valued Socio-Economic Components w/w Weight/Weight WAD Weak Acid Dissociable WBS Work Breakdown Structure wk Week wmt Wet Metric Ton WRSA Waste Rock Storage Area WUL Water Use Licence μm Microns μm Micrometre

Effective Date: December 12, 2016 29-5

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Abbreviation Description AAAC All Aluminum Alloy Conductors ABA Acid Base Accounting AONB Area of Outstanding Natural Beauty ARD Acid rock drainage ARDML Acid Rock Drainage and Metal Leaching ASSI Area of Special Scientific Interest BFS Blast Furnace Slag BMAL Bulk Mineral Analysis with Liberation C&F Cut & fill CCPI Chlorite-carbonate-pyrite alteration index CEC Crown Estate Commissioners CIL Carbon in Leach CM Construction management COG Cut-off grade COMAH Control of Major Accident Hazards CPB Cemented paste backfill DCS Distributed control system DETI Department of Enterprise, Trade and Investment DfE Department for the Economy DfI Department for Infrastructure DSF Dry-stacked filtered facility EIA Environmental Impact Assessment ELOS Equivalent Linear Overbreak/Slough EPA Environmental Protection Agency ES Environmental Statement FODC Fermanagh and Omagh District Council FS Feasibility Study G&A General & administration GA General arrangement GSNI Geological Survey of Northern Ireland GU General Use HARD Half absolute difference HCEP Historical core evaluation project HG High grade HLS Heavy Liquid Separation HSE Health, Safety, and Environmental INAB Irish National Accreditation Board

Effective Date: December 12, 2016 29-6

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Abbreviation Description IRR Internal Rate of Return LG LOM grade LGD Local Government District LHD Load-Haul-Dump LOM Life of mine LR Lakefield Research LRF Loose Rock Fill LVS Liquid Vehicle System MAP Mean Annual Precipitation MC Master Composite MIBC Methyl IsoButyl Carbonyl MIBK Methyl isobutyl ketone MLT Monolithic leach tests MPC Mine Power Centres MPEI Mechanical, piping, electrical, and instrumentation NAG Net Acid Generation NIE Northern Ireland Energy NIEA Northern Ireland Environmental Agency NORM Naturally occurring radioactive material NSR Net smelter return P&C Paterson & Cooke PAC Planning Appeals Commission PACC Pre-Application Community Consultation PAN Proposal of Application Notice PAX Potassium Amyl Xanthate PGW Patterson, Grant and Watson PM Project Management QA Quality Assurance RO Reverse Osmosis RPS RPS Group Plc SAC Special Area of Conservation SMC SAG Mill Comminution SMP Safety Management Plan SOA Super Output Area SPLP Synthetic Precipitation Leaching Procedure SQMP Site Quality Management Plan TCLP Toxic Characteristic Leaching Procedure

Effective Date: December 12, 2016 29-7

DALRADIAN RESOURCES INC. CURRAGHINALT FEASIBILITY STUDY

Abbreviation Description TIN Triangulated irregular network UCS Unconfined compressive strength Unité de Recherche et de Service en Technologie URSTM Minérale VAT Value-added tax VFD Variable Frequency Drives VoIP Voice over Internet Protocol WF Waste fill WOL Whole ore leaching WRSF Waste rock storage facility

Effective Date: December 12, 2016 29-8

APPENDIX A QP CERTIFICATES SRK Consulting (UK) Limited 5th Floor Churchill House 17 Churchill Way City and County of Cardiff CF10 2HH, Wales United Kingdom E-mail: [email protected] URL: www.srk.co.uk Tel: + 44 (0) 2920 348 150 Fax: + 44 (0) 2920 348 199 CERTIFICATE OF AUTHOR

I,Eur Geol Robert John Bowell PhD CChem CGeol., do hereby certify that:

2. I am currently employed as a Corporate Consultant, Geochemistry, at SRK Consulting (UK) Limited with an office at Churchill House, 17 Churchill Way, Cardiff, CF10 2HH;

3. I graduated with a BSc joint Honours degree in Chemistry and Geology in 1987 from the University of Manchester, UK; an MPhil and PhD in Geochemistry in 1989 and 1991 from the University of the Southampton, UK; 4. I have practiced my profession in the field of mining geology, geochemistry and metallurgy in the mining industry continuously since 1987;

5. I am a Registered Professional Chemist with the Royal Society of Chemistry (332782) and a Registered Professional UK Geologist with the Geological Society of London (1007245) and the Federation of European Geologists (GSL1007245);

6. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101;

7. I visited the Curraghinalt Project site in September 2013 and from 19 to 22 January 2016;

8. I am responsible for Section 18.5 of this Technical Report;

9. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

10. I have had no prior involvement with the property that is the subject of this Technical Report

11. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, this Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;

12. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Rob Bowell.”

Eur Geol Robert John Bowell PhD Cchem CGeol.

Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG, Group Offices: Africa Wales, United Kingdom. Asia SRK Consulting (UK) Limited Reg No 01575403 (England and Wales) Australia Europe North America South America SRK Consulting (Canada) Inc. 1500 – 155 University Avenue Toronto, Ontario, Canada M5H 2B7

T: +1.416.601.1445 F: +1.416.601.9046

[email protected] www.srk.com

CERTIFICATE OF QUALIFIED PERSON

To accompany the report entitled NI 43-101 Feasibility Study Technical Report on the Curraghinalt Gold Project, Northern Ireland and having an effective date of December 12, 2016.

I, Jean-François Couture, do hereby certify that:

1) I am a Corporate Consultant (Geology) and an associate of the firm of SRK Consulting (Canada) Inc. with an office at Suite 1500, 155 University Avenue, Toronto, Ontario, M5H 3B7; 2) I am a graduate of the Université Laval in Quebec City with a BSc in Geology in 1982. I obtained a MScA in Earth Sciences and a PhD in Mineral Resources from Université du Québec à Chicoutimi in 1986 and 1994, respectively. I have practiced my profession continuously since 1982. From 1982 to 1988, I conducted regional mapping programs in the Precambrian Shield of Canada, from 1988 to 1996; I conducted mineral deposit studies for a variety of base and precious metals deposits of hydrothermal and magmatic origins. From 1996 to 2000, I was a Senior Exploration Geologist responsible for the development, execution and management of exploration program for base and precious metals in Precambrian terranes, including volcanogenic sulphide deposits. Since 2001 I have authored and co-authored several independent technical reports on several base and precious metals exploration and mining projects worldwide; 3) I am a Professional Geoscientist registered with the Association of Professional Geoscientists of the province of Ontario (APGO#0197) and l’Ordre des Géologues du Québec (OGQ#1106); 4) I have visited the subject projects form November 23-29, 2014; 5) I have read the definition of Qualified Person set out in National Instrument 43-101 and certify that by virtue of my education, affiliation to a professional association, and past relevant work experience, I fulfill the requirements to be a Qualified Person for the purposes of National Instrument 43-101; 6) I, as a Qualified Person, am independent of the issuer as defined in Section 1.5 of National Instrument 43-101; 7) I am responsible for Sections 7 to 12, and 14 of this technical report; 8) In 2016, I have co-authored a previous technical report about the subject property 9) I have read National Instrument 43-101 and confirm that this technical report has been prepared in compliance therewith; 10) As of the effective date of this technical report, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

[“signed and sealed”] Toronto, Ontario Jean-François Couture, PGeo (APGO#0197) January 25, 2017 Corporate Consultant (Geology)

Local Offices: Group Offices: Saskatoon Africa Sudbury Asia Toronto Australia Vancouver Europe Yellowknife North America South America

PARTNERS IN JDS Energy & Mining Inc. ACHIEVING Suite 900 – 999 West Hastings Street MAXIMUM Vancouver, BC V6C 2W2 RESOURCE t 604.558.6300 DEVELOPMENT VALUE jdsmining.ca

CERTIFICATE OF AUTHOR

I, Stacy Freudigmann, P. Eng., do hereby certify that:

2. During the period of this project I was contracted as Project Manager with JDS Energy & Mining Inc. with an office at Suite 900 - 999 West Hastings Street, Vancouver, British Columbia, Canada;

3. I am a graduate of James Cook University with a B.Sc.(Hons) in Industrial Chemistry (1996) and Curtin University, Western Australia School of Mines with a Grad.Dip. Metallurgy (1999).

I have practiced my profession continuously since 1996. I have held senior process and metallurgical production and technical positions in mining operations in Canada and Australia. I have worked as a consultant for over six years and have performed metallurgical management, process management, project management, cost estimation, scheduling and economic analysis work for a number of engineering studies and technical reports located in Latin America, Europe, Asia Pacific, USA and Canada.

I am a Professional Engineer (P.Eng. License #33972) registered with the Association of Professional Engineers, Geologists of British Columbia.

I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43- 101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.;

4. I visited the Curraghinalt project on the 26th of January 2016 and again on the 15th of November 2016;

5. I am responsible for Sections 13 and 17 of this Technical Report;

6. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

7. I have had no prior involvement with the property that is the subject of this Technical Report

8. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, this Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;

9. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(Original signed and sealed) “Stacy Freudigmann, P.Eng.”

Stacy Freudigmann, P. Eng.

PARTNERS IN JDS Energy & Mining Inc. ACHIEVING Suite 900 – 999 West Hastings Street MAXIMUM Vancouver, BC V6C 2W2 RESOURCE t 604.558.6300 DEVELOPMENT VALUE jdsmining.ca

CERTIFICATE OF AUTHOR

I, Mathangi (Indi) Gopinathan, P. Eng., C.P.A., C.M.A., do hereby certify that:

2. I am currently employed as a Project Manager with JDS Energy & Mining Inc. with an office at Suite 3670 – 130 King Street West, Toronto, Ontario, M5X 1E2;

3. I am a graduate of the University of Toronto with a B.A.Sc. in Civil Engineering, 1996 (P.Eng., 2001) and Chartered Professional Accountant (C.P.A., C.M.A., 2008);

I have worked in operations, financial and management positions at mining companies and financial institutions in Canada over the past 18 years. I have been an independent consultant for over one year, and have managed studies, performed G&A cost analysis, tax and economic analyses and report writing for mining projects worldwide;

I am a Registered Professional Engineer in Ontario (#90483173) and Registered Chartered Professional Accountant in Ontario (#31026349);

4. I visited the Curraghinalt project on January 22-26, 2016;

5. I am responsible for Sections 19, 23 of this Technical Report;

6. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

7. I have had no prior involvement with the property that is the subject of this Technical Report

9. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Mathangi (Indi) Gopinathan, P.Eng.”

Mathangi (Indi) Gopinathan, P. Eng., C.P.A., C.M.A.

SRK Consulting (UK) Limited 5th Floor Churchill House 17 Churchill Way City and County of Cardiff CF10 2HH, Wales United Kingdom E-mail: [email protected] URL: www.srk.co.uk Tel: + 44 (0) 2920 348 150 Fax: + 44 (0) 2920 348 199 CERTIFICATE OF AUTHOR

I, William Harding, CGeol, do hereby certify that:

2. I am currently employed as a Principle Consultant, Hydrogeology, at SRK Consulting (UK) Limited with an office at Churchill House, 17 Churchill Way, Cardiff, CF10 2HH;

3. I graduated with a BSc Honours degree in Earth Sciences in 1986 from Oxford Brookes University, UK and an MSc in Hydrogeology in 1991 from the University of the Birmingham, UK; 4. I have practiced my profession in the field of hydrogeology in the mining industry since 1992;

5. I am an accredited Chartered Geologist and Fellow of the Geological Society of London in the UK;

6. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101;

7. I visited the Curraghinalt Project site on 26 to 28 November 2014;

8. I am responsible for Sections 18.6 (surface water management), 18.7 (mine water demand and supply), 18.8 (surface water hydro), 18.9 (groundwater and UG water inflows) and 18.10 (flood storage requirements) of this Technical Report;

9. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

10. I have had no prior involvement with the property that is the subject of this Technical Report

12. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “William Harding

William Harding, CGeol.

Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG, Group Offices: Africa Wales, United Kingdom. Asia SRK Consulting (UK) Limited Reg No 01575403 (England and Wales) Australia Europe North America South America SRK Consulting (UK) Limited 5th Floor Churchill House 17 Churchill Way City and County of Cardiff CF10 2HH, Wales United Kingdom E-mail: [email protected] URL: www.srk.co.uk Tel: + 44 (0) 2920 348 150 Fax: + 44 (0) 2920 348 199 CERTIFICATE OF AUTHOR

I, Jane Joughin, Pr.Sci.Nat., do hereby certify that:

1. This certificate applies to the Technical Report entitled “NI 43-101 Feasibility Study Technical Report on the Curraghinalt Gold Project, Northern Ireland”, with an effective date of December 12, 2016, (the “Technical Report”) prepared for Dalradian Resources Inc.; 2. I am currently employed as a Corporate Consultant, Environmental & Social Management, at SRK Consulting (UK) Limited with an office at Churchill House, 17 Churchill Way, Cardiff, CF10 2HH; 3. I graduated with a BSc Honours degree (Life Sciences) in 1986 from the University of Natal, South Africa, and with an MSc (Life Sciences) in 1989 from the University of the Witwatersrand, South Africa; 4. I have practiced my profession in the field of environmental and social management in the mining industry continuously since 1991; 5. I am a Registered Professional Environmental Scientist, registered with the South African Council of Natural Scientific Professions (Registration Number: 400057/94); 6. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101; 7. I visited the Curraghinalt Project site on 26 to 28 November 2014 and 22 to 23 January 2016; 8. I am responsible for Section 20 of this Technical Report; 9. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101; 10. I have had no prior involvement with the property that is the subject of this Technical Report 11. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, this Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading; 12. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Jane Joughin.”

Jane Joughin, Pr.Sci.Nat.

Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG, Group Offices: Africa Wales, United Kingdom. Asia SRK Consulting (UK) Limited Reg No 01575403 (England and Wales) Australia Europe North America South America PARTNERS IN JDS Energy & Mining Inc. ACHIEVING Suite 900 – 999 West Hastings Street MAXIMUM Vancouver, BC V6C 2W2 RESOURCE t 604.558.6300 DEVELOPMENT VALUE jdsmining.ca

CERTIFICATE OF AUTHOR

I, Garett Macdonald, P. Eng., do hereby certify that:

2. I am currently employed as Vice President Project Development with JDS Energy & Mining Inc. with an office at Suite 3670, 130 King Street West, Toronto, ON M5X 1E2;

3. I am a graduate of Laurentian University with a B.Eng. in Mining Engineering, 1996. I have practiced my profession continuously since 1996;

I have worked in technical, operations and management positions at mines in Canada. I have been an independent consultant for over one year and have managed preliminary economic assessments, prefeasibility studies, feasibility studies and technical due diligence reviews.

I am a Registered Professional Mining Engineer in Ontario (#90475344)

I visited the Curraghinalt project on June 27, 2015, October 26, 2015, January 21, 2016, April 4, 2016, September 19, 2016 and October 21, 2016

4. I am responsible for Sections 1,2,3,4,5,6,18.1, 18.3, 18.11, 18.12, 18.13, 21,22,24,25,26,27,28,29 of this Technical Report;

5. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

6. I have had no prior involvement with the property that is the subject of this Technical Report

7. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, this Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;

8. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Garett Macdonald, P.Eng.”

Garett Macdonald, P. Eng.

PARTNERS IN JDS Energy & Mining Inc. ACHIEVING Suite 900 – 999 West Hastings Street MAXIMUM Vancouver, BC V6C 2W2 RESOURCE t 604.558.6300 DEVELOPMENT VALUE jdsmining.ca

CERTIFICATE OF AUTHOR

I, Michael Makarenko, P. Eng., do hereby certify that:

2. I am currently employed as Senior Project Manager with JDS Energy & Mining Inc. with an office at Suite 900 – 999 West Hastings Street, Vancouver, British Columbia, V6C 2W2;

3. I am a graduate of the University of Alberta with a B.Sc. in Mining Engineering, 1988. I have practiced my profession continuously since 1988;

I have worked in technical, operations and management positions at mines in Canada, the United States, Brazil and Australia. I have been an independent consultant for over ten years and have performed mine design, mine planning, cost estimation, operations & construction management, technical due diligence reviews and report writing for mining projects worldwide;

I am a Registered Professional Mining Engineer in Alberta (#48091) and the Northwest Territories (#1359);

4. I visited the Curraghinalt project on October 26-27, 2015 and September 19, 2016;

5. I am responsible for Sections 16.1, 16.2, 16.4-16.12 of this Technical Report;

6. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101;

7. I have had no prior involvement with the property that is the subject of this Technical Report;

9. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Michael Makarenko, P. Eng.”

Michael Makarenko, P. Eng.

SRK Consulting (Canada) Inc. 2200–1066 West Hastings Street Vancouver, BC V6E 3X2

T: +1.604.681.4196 F: +1.604.687.5532 [email protected] www.srk.com

CERTIFICATE OF AUTHOR

I, Bruce Murphy, P. Eng., do hereby certify that:

2. I am currently employed as a Principal Consultant with SRK Consulting (Canada) Inc. with an office at Suite 2200, 1066 West Hastings Street, Vancouver, BC, V6E 3X2;

3. I am a graduate of University of the Witwatersrand, Johannesburg, South Africa with a M.Sc. degree in Mining Engineering. I have practiced my profession continuously since graduation (1989) working in the rock engineering field on operating mines till 2002 and then in the consulting field.

I am a Registered Professional Mining Engineer in British Columbia (#44271)

I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of NI 43-101;

4. I visited the Curraghinalt project on 22 May 2016 – 30 May 2016, and 15 September 2016 – 20 September 2016.

5. I am responsible for Section 16.3 of this Technical Report;

6. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43- 101;

7. I have had no prior involvement with the property that is the subject of this Technical Report

9. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Bruce Murphy, P.Eng.”

Bruce Murphy, P. Eng.

U.S. Offices: Canadian Offices: Group Offices: Anchorage 907.677.3520 Saskatoon 306.955.4778 Africa

Denver 303.985.1333 Sudbury 705.682.3270 Asia

Elko 775.753.4151 Toronto 416.601.1445 Australia Fort Collins 970.407.8302 Vancouver 604.681.4196 Europe Reno 775.828.6800 Yellowknife 867.873.8670 North America Tucson 520.544.3688 South America

SRK Consulting (Canada) Inc. 2200–1066 West Hastings Street Vancouver, BC V6E 3X2

T: +1.604.681.4196 F: +1.604.687.5532 [email protected] www.srk.com

CERTIFICATE OF AUTHOR

I, Cameron C. Scott, P. Eng., do hereby certify that:

1. This certificate applies to the Technical Report entitled “NI 43-101 Feasibility Study Technical Report on the Curraghinalt Gold Project, Northern Ireland”, with an effective date of December 12, 2016, (the “Technical Report”) prepared for Dalradian Resources Inc. 2. I am a Principal Consultant (Geotechnical Engineering) with the firm of SRK Consulting (Canada) Inc. (SRK) with an office at Suite 2200, 1066 West Hastings Street, Vancouver, British Columbia, Canada. 3. In 1974, I obtained a B.A.Sc. degree in Geotechnical Engineering from the University of British Columbia. In 1984, I obtained an M.Eng. degree in Civil Engineering from the University of Alberta. 4. I have practiced my profession continuously since 1974 and have worked as a Geotechnical Engineer for a total of 42 years. Most of my professional practice has focused on the geotechnical and hydrogeological aspects of mining, including the site selection, design, permitting, operation and closure of mine waste facilities in Canada, the Americas, Europe, Africa and the former Soviet Union. 5. I have been a Professional Engineer registered with the Association of Professional Engineers and Geoscientists of British Columbia (#11523) since 1978. 6. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of NI 43-101; 7. I visited the Curraghinalt project on November 25 and 26, 2014 and on March 4, 2016; 8. I am responsible for Section 18.2 and 18.4 of this Technical Report; 9. I am independent of the Issuer and related companies applying all of the tests in Section 1.5 of the NI 43-101; 10. I have had no prior involvement with the property that is the subject of this Technical Report 11. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, this Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading; 12. I have read NI 43-101, and the Technical Report has been prepared in accordance with NI 43-101 and Form 43-101F1.

Effective Date: December 12, 2016 Signing Date: January 25, 2017

(original signed and sealed) “Cameron C. Scott, P.Eng.”

Cameron C. Scott, P. Eng.

U.S. Offices: Canadian Offices: Group Offices: Anchorage 907.677.3520 Saskatoon 306.955.4778 Africa

Denver 303.985.1333 Sudbury 705.682.3270 Asia

Elko 775.753.4151 Toronto 416.601.1445 Australia Fort Collins 970.407.8302 Vancouver 604.681.4196 Europe Reno 775.828.6800 Yellowknife 867.873.8670 North America Tucson 520.544.3688 South America

CCS JDS.Dalradian.Curragnihalt FS QP Certificate.CScott.2017‐01‐23__1page_signed January 2017