Notes on Mineral Reserves: The mineral reserve statement is as of 23th day of September 2016. Mining will comprise two sequential phases: open pit and underground. The open pit (the first four years of production) will consist of a conventional drill, blast, load, and haul operation, using the current fleet on site, supplemented with leased equipment. Capital for the open pit will only be spent on trucks, lighting units, pumps, site office facility, and light vehicles.
As Vertikalny is a steeply dipping ore body in the range of 60 to 90°, for underground mining the shrinkage stoping method using a modern, trackless style operation with electrical powered jumbos will be employed. Mining will advance from the bottom upwards in horizontal slices, with a portion of the broken ore left in place from which miners can work. Three areas were identified for the mine design: the North, Central, and South zones. The North and Central zones will be accessed by ramp and the South Zone by adit.
In accordance with Russian standard practice the open pit design includes 30% dilution and 95% mining recovery. Given the selectivity of the underground mining method and equipment, the dilution was limited to 15 cm on each of the hanging wall and footwall (30 cm total) and integrated into the stope optimisation process. It is assumed that 95% of the diluted material, including pillar material, will be recovered. The open pit and underground cut-off grades are 250 g/t and 450 g/t, respectively.