CORDILLERA

Dallaglio invested in Pickstone Peerless Mine in 2014. As at 30 June 2020 the underlying claims had a total measured and indicated resource of 368,313 ounces (11,456 kg), and a total resource (including inferred) of (24,553 kg) 789,424 ounces.

Included within this resource were proven and probable in- pit reserves of 218,607 ounces (6,799 kg) and in-pit inferred resources of 19,173 ounces (596 kg). Open pit mine with a strip ratio of approximately 18:1, with ore processed through a plant on site with a maximum capacity of 33,000 t/month.

The ore body is not refractory in nature with an average recovery of approximately 85%. Full complement of supporting infrastructure including staff housing, office, stores, grid power, boreholes, and road infrastructure. Over 2015-2018 US$14 million was invested to develop the processing plant and subsequently upgrade its capacity. Since 2015, 2,984kg (95,938 ounces) of gold have been produced at the mine.

120 km southwest of Harare and 20km south-southeast of the town of Chegutu at a latitude of 18° 17.5’ S, longitude 30° 13’ E and an altitude of around 1,200m.

BEFORE & AFTER DALLAGLIO

Slide to the right for Pickstone Mine in 1918, to the left for Pickstone Peerless Mine in 2020.

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Historic Production

The area has been worked, initially from scattered pits followed by two main periods of production from 1905 to 1919 and 1956 to 1972. Since that time various junior companies have conducted exploration and very small-scale production over the tenements but none have done sufficient work to provide a significant Resource, except Mutapa in 1998.

Early Mining

The Concession and Duchess Hill claims were first pegged in the latter part of the 19th century. Mining by European settlers began in 1905 but by 1919 most of the workings had been abandoned, including Pickstone and Peerless. In 1949 Lonhro amalgamated these claims and after a brief period of production, sold them to RTZ in 1960. The Pickstone mine remained in production until 1971.

Pickstone Mine

The original Pickstone Mine exploited lenticular quartz veins on the northwest flank of Duchess Hill. By 1912 two shafts to 23m established a 305-m strike over a 3.9m reef width. The mine closed in 1919 because of poor recoveries from the sulphide ores and for 30 years there was little activity until Lonrho took over the properties. Lonhro had positive results from five exploratory drillholes and exposed four main orebodies. This led to re-opening of the mine in 1956. RTZ increased throughput in 1964 and maintained this until closure in 1971.

The mine operated with a government subsidy for the last seven years of its life and virtually all of the reserves were depleted. Falling grades, a fixed gold price, sanctions and the security situation all played a part in the decision to close the mine.

Peerless Mine

The Peerless Mine was the most important of four original small-scale operations along the Peerless trend extending 1,600m from the western Newspaper Mine to beneath the Football Field Dump in the east. The trend is marked by a series of shallow pits and the larger Peerless Pit itself. RTZ opened two underground levels at Peerless and completed 19 core holes along 1,500m of the strike in 1960. Despite the positive drill results, trial mining and feasibility studies, RTZ never brought the Peerless sulphides into production. Between 1974 and 1976 RTZ revisited the Peerless Mine with a view to augmenting mill feed at the group’s Patchway operation some 50km away, but this plan was never implemented. The Newspaper deposit, situated at the western end of the Peerless Trend, is the third most important old mine in the area.

Masasa Mines Exploration 1987 – 1995

Masasa Mines (Pvt) Ltd, the Zimbabwean subsidiary of Delta Gold NL of Australia, secured an option to purchase the Pickstone-Peerless Property from RTZ in 1987. Their main objective was to establish a pittable oxide resource along the Peerless Trend. During their nine years of activity, Masasa also studied the potential for underground resources at both Peerless and Pickstone and engaged consultants to examine the amenability of tailings retreatment at the Big Red and Concentrate Dumps. They sampled old trenches along the Peerless and Concession-Duchess Hill Trends and mapped most of the project area at 1:5,000 scale. Masasa’s work culminated in a project review by an independent geologist in 1996 which, besides being critical of the calibre of the exploration work, recommended that Masasa retain the property based on the potential of the Peerless oxides and sulphides. Despite this, Masasa terminated its exploration.

Weston Mining (Pvt) Ltd 1993 – 1997

Masasa’s work culminated in a project review by an independent geologist in 1996 which, besides being critical of the calibre of the exploration work, recommended that Masasa retain the property based on the potential of the Peerless oxides and sulphides. Despite this, Masasa terminated its exploration. Weston Mining retreated portions of the old tailings dumps and commissioned metallurgical work on the Concentrate Dump by the Geomet Research Laboratory. Their report suggested that a cyanide leach on a washed product of a fine regrind could result in 60-70% gold recoveries.

North Rand NL

North Rand NL, an Australian company, arranged a takeover of the Masasa option in 1996 and also purchased Weston Mining’s tribute rights. North Rand geologically mapped the area and chip sampled various accessible sites across the mineralised zones. This work mirrored the problems of Masasa’s earlier sampling where the broad anomalous zones were successfully identified but with random, high individual assays. North Rand were unable to further their exploration following an unsuccessful attempt to list on the Australian Stock Exchange and IndoMin Ltd of Canada acquired the Masasa and Weston tributes from RTZ.

Mutapa Minerals Exploration 1997 – 1999

In 1997 IndoMin Ltd, a Canadian junior mining company, took over the North Rand agreement, exercised the option with RTZ and acquired the Pickstone-Peerless project area. IndoMin was renamed Battlefield Minerals Corporation, which wholly owned Mutapa Minerals (Pvt) Ltd, the Zimbabwean operating company.

Mutapa started exploration in November 1997 with the primary objective of establishing a near-surface Resource over the Peerless Trend. During this exploration, funding problems and failure of a dump retreatment operation led to bankruptcy and cession of the property to the African Banking Corporation (ABC).

PICKSTONE FAST FACTS

1888: The first claims, Concession Hill 319 & Concession 320 were granted to Charles Dunnell Rudd by Lobengula, the King of the Ndebele.

1913: Pickstone Gold Mines Limited was formed.

1907-1921: 105,681 tons @11.95g/t yielding 40,604 oz.

1949-1960: Lonrho PLC purchased & reopened the mine in 1956 (7,000tpm).

1960-1971: Rio Tinto. Pickstone shaft 750 meters deep & strike of 1.25km. 15,000tpm. Opened Peerless UG.

2,042,465t @7.20g/t yielding 472,805 oz (1905-1919 & 1956-1971).

1987-1995: Delta Gold NL of Australia, (Masasa Mines) exploration.

1997-1999: Mutapa Mines of Canada. Peerless Resource not mined.

2000-2004: The African Banking Corporation.

2004-2014: African Consolidated Resources (ACR >>VAST). Exploration.

2014: The JV company, (Breckridge Investments 100%), commenced Pickstone- Peerless gold mine production 3Q-2015.

150 km northwest of Harare and 4km southeast of Guruve.

Delta Gold Zimbabwe (DGZ) owns the Eureka gold mine, located near Guruve, north of Harare. Eureka has had multiple owners since its discovery but most notably the Australian mining company DGZ, who owned and operated the mine between 1995 and 2003. DGZ was purchased by Dallaglio in April 2018.

The in pit reserve is a measured 373,603 thousand ounces and will allow DGZ roughly 5 years of open pit operations at 100,000 tons of ore per month to mine this reserve. A future scoping study will be used to determine at which point to change to underground mining. The potential inferred underground reserve of 560,380 ounces will add approximately 9 years of mining making the current life of mine 14 years. A future drilling program will determine the actual life of mine.

Eureka is a brown fields project and the purchase by Dallaglio included a pit already stripped to 35m as well as a significant amount of existing plant requiring refurbishment. The Eureka repair and refurbishment project commenced on 17 January 2020 and is due for completion in July 2021 by which time the team shall have built a state of the art CIL plant capable of processing 100,000 tons per month. The operating plant shall produce between 140-200kg of gold per month and create over 1000 direct and indirect jobs for the local economy.

EUREKA AFTER DALLAGLIO

Slide to the right for Eureka Mine in 2018, to the left for Eureka Mine in 2020.

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Discovery and History

First mining began in the area at Eureka in 1906 to 1908.

Underground mining at the mine site commenced in 1950. Mineral rights ownership changed hands several times until Phillip Griffiths – active partner (and his brother) of Impinge Mines (Pvt) Ltd acquired the mine.

1906 to 1908 – claims tributed by the French South African Development Company
1918 to 1933 – Ainsle worked the claims
1934 to 1943 – R. Francis worked the tenements
1950 to 1951 – Southeys worked the claims
1961 t0 1965 – F. Ways worked the claims while in 1962 the claims were on tribute to W.G. Kinsey.

Delta Gold Zimbabwe Operations – (A DGNL Australian Held Company)

Delta Gold Zimbabwe and its exploration arm Masasa Mines P/L signed a Joint venture agreement with Phillip Griffiths of Impinge mines in August 1995 and tenements exploration commenced. Resource estimation was carried out by Resource Services Group (RSG) of Perth, WA. Cotaminous / adjacent gold tenements held by the Guruve Mining Syndicate were also acquired by Delta Gold in August 1996.

Eureka gold mine (an open pit operation by DGZ) commenced mining in January 1999 and poured its first gold on target in June 1999. Exploration in the 1998 / 1999 had been successful in delineating significant Au resources / reserves for commercial exploitation. The Eureka gold plant was then one of the world’s first plants where all known gold processing methods had been blended viz gravity recovery, heap leaching and carbon in leach.

In 2000 when DGNL left Zimbabwe, they left the Eureka mine assets on care and maintenance under Placer Dome South Africa (PDSA) who carried out a viability study in September 2003.

Mmakau Mining and Shaft Sinkers Operation

A consortium of South African business corporations (Shaft Sinkers, Mmakau mining and IDC) in June 2005 subsequently acquired the Eureka mineral and infrastructural assets from Pacer Dome SA (PDSA).

The consortium dewatered the Eureka pit, sank an in-pit 29.5m deep vertical shaft on the 1160m bench, constructed shaft bank infrastructure (within the old pit shell) and continued the old heap leach stack resprays/ back sprays recovering gold. The shaft headframe was fabricated on site. Some mine operations were then curtailed in November 2006 – a cost-cutting move.

Open-pit and leach operations continued to February 2008. The assets were then placed on care and maintenance.

In October 2008, the consortium hired the Umkwazi group who conducted a scoping study.

Further Resources / Reserve Check

Resource / reserve check studies were conducted for Delta Gold Zimbabwe between April 2011 and August 2015 when 22 confirmatory diamond holes (9407m) were drilled by consultants TWP Projects of SA. Bulk samples were collected for diagnostic metallurgical studies and a Preliminary economic assessment (PEA) conducted.

Project Vending

Delta Gold Zimbabwe placed the Eureka mineral assets on the market / project vending between 2015 and 2018. Potential investors who assessed the project include Makomo resources, Mwana Africa, Rand Gold, Batanai resources and Vast resources/ Dallaglio.

Work by Dallaglio from 2018 to 2020

The mineral and infrastructural assets were subsequently 100% acquired by Dallaglio in 2018, who immediately embarked on a site clean up exercise, worker recruitments, renovations / infrastructure refurbishments and Eureka gold pit dewatering. Dallaglio then obtained Special grant 6510 to consolidate title and drilled 10 potable water boreholes. A traditional mine blessing ceremony was held in 2020 and fast track major construction works embarked on.

EUREKA FAST FACTS

1906-1995: various phases of small-scale UG mining (to 4-Lvl; <120m). 12,220oz (380kg) @3.8g/t

1995-2005: Delta Gold. Open pit, Heap Leach operation. Mined to <50m from surface. 1 millions tons was processed @ 1.78g/t yielding 57,228oz (1,780kg) Closed due to gold price & deteriorating stability. Placed on Care & Maintenance in 2003.

2005-2018: Shaft-Sinkers (Mmakau Mining/IDC): Deep drilling for UG mining (22 holes; 9,407m). Installation new shaft down to 2-Lvl. Processed old ROM boulders and re-treated the HL. Placed on Care & Maintenance in 2006.

2018: Dallaglio purchased Delta Gold which owned Eureka Mine from Mmakau Mining and the IDC of South Africa in April

2018 with CTC approval granted in March 2019.

Total of 46 RC holes drilled, totaling 4,000 metres and a total of 133 diamond core holes totaling 21,000 metres (21kms).

A total Resource (including Inferred) of 16.6 million tons at an average grade of 2.24 g/t, delivering 1,199,080 ounces (to a depth of 650 m).

A total Measured and Indicated Resource of 12.9 million tons at an average grade of 2.29 g/t delivering 945,807 ounces.

In-pit reserves of 0.75g cut off 6,922,883 tonnes at 1.87g/t totaling 12,923 kgs or 415,468 oz down to a pit depth of 230 metres.

The Special Grant has been converted into 53 Mining Blocks and 6 Registered sites

5 competent persons reports have been done since the 1990s, with the latest one completed in 2012 by TWP Projects. Dallaglio have reviewed and verified these reports.