Historic undergound development at the San Antonio mine was typically completed through

initial drifting down the axis of the SAM unit during development of each level over the

entire projected strike of the mineralized zone. Horizontal drill holes were then completed at

a spacing of approximately 100 feet apart (50-150 feet) to both the hangingwall and footwall

of the SAM unit. Consequently, within the historic area of underground development, it is

unlikely that new vein systems of any significant size are undiscovered. Exploration is also

limited, particularly to the northwest in upper levels of the mine, by the thickness of the

SAM unit, which thins to less than 100 feet, and consequently could not support the

development of large vein systems due to limitations of their strike length, and abundance of

melagabbro.

The morphology and size of veins within the Deep East zone (Figure 18), located by

previous underground drilling, are still undefined, since it is only tested by a limited number

of drill holes that have been drilled down the SAM unit. This zone may represent the next

en echelon step to stockwork veins down plunge from the 97 and A veins that are currently

being mined. If so, a north to northwest trending stockwork vein system similar to the A

vein with peripheral stockwork veins and associated 16-type shear veins, may be developed

in this area. Further drilling from the existing exploration drift at the southeastern end of 32

level would allow effective testing of the Deep East zone at an optimum drilling angle.

Holes could be drilled down the dip of the SAM unit in several fences spaced along the 32

level drift with an easterly azimuth, which would allow the holes to cross both stockwork

and 16-type veins at angles of 30-90 degrees. There is potential for a further en echelon

stockwork vein step to the east of the Deep East vein system. Based on the spacing of the

97, A and Deep East veins, another stockwork system could occur 300-600 feet east, down

plunge in the SAM unit, of the Deep East vein system.

The limits of vein systems at depth in the current area of mining have not yet been defined.

Based on vein distributions in upper levels of the mine (Figures 5, 6), it is likely that 16-

type shear veins in the current area of mining will persist much further to depth than

stockwork veins, such as the A vein system. The increasing magnitude of displacement and

strike length of the 16-type shear veins currently being mined suggests that they will

probably persist for at least several hundred feet; shear veins with similar magnitudes of

displacement in upper levels of the mine such as the 16, 27, and 61/63 veins had plunge

lengths of 2200-3500 feet. Those in the current area of mining have been mined to date

over plunge lengths of approximately 500-1500 feet, depending on the vein. The strike and

dip length of the A vein system as defined by mining to date is similar to that of the 40, 50

and 60 veins developed in higher levels of the mine (Figure 6). This suggests that if the

limits of A vein system is similar in lateral dimensions to these veins, that most of this vein

system has been developed, and that it may be limited at depth. At the time of this study,

the A vein system on the lowest level of development, 4790 level, was significantly

narrower than on levels above, suggesting that it may be thinning. Thus, for long term mine

planning, it will be necessary to identify through drilling, whether the A vein system

continues, since significant tonnage per level will be lost if mining at depth is restricted to

the shear veins alone.

Below the current area of mining and the en echelon set of stockwork veins defined by the

97-A-Deep East set, there is potential for a new en echelon array of east-stepping stockwork

veins 500-1500 feet down dip to the north-northwest in the SAM unit (Figure 18). If a new

set of veins is developed, it may be linked to vein systems currently being mined by

dominant 16-type shear veins such as the C and 96 veins, just as sets of stockwork veins are

linked by shear veins on upper mine levels. Following these shear veins out to depth with

drilling may allow identification of such a vein system.

Southeast of the thickest portions of the SAM unit, the unit thins again to 200-400 feet

thick, the thickness in which historically and currently exploited veins are best developed

(Figure 4). Although tested by drilling and drifting on some levels, further evaluation of

this area which is on the southeastern margins of the area of historic underground

development is warranted, since potential exists for a symmetrical distribution of vein

systems on the other side of this thick lobe (Figure 18). Potential may be best at the eastern

end of en echelon stepping stockwork vein systems, such as the 40-50-60 vein set, for

further en echelon steps.

Two other potential exploration targets within or near existing mine workings include

(Figure 18):

a) The D shaft area between 30 and 4920 levels. Vein systems in the 30-200 subdrift

and Puff subdrift areas, which form part of the 97 stockwork vein system, may

continue down dip to the north, north of the D shaft area, for several levels. The

Deep West vein system may also be continuous from the lower levels (4860, 4920

levels) upward into this area. Veins in this area could be easily drilled tested, and

ultimately accessed, from several existing levels around the shaft.

b) Shear veins 50-200 feet in the footwall of the C shear vein system below 5040

level. Drilling and displacement of the SAM unit hangingwall suggests that a

narrow shear vein system and possible associated stockwork veins is developed in

the footwall of the C vein on 4920 level for example, several drill intersections

approximately 100 feet in the footwall of the C vein correspond with the position of

a step in the SAM unit footwall contact. Although drilling suggests that the vein

system here is narrow, this vein system is close to existing mine workings and

could be easily drill tested and accessed. It may represent the top of a new shear

vein in the footwall of the C vein, and when drilling at deeper levels, it is

recommended that some holes be extended into this area to test if this vein system

expands with depth.

Potential exists for the discovery of new mineralized zones within other portions of the

SAM unit outside of the direct area of the mine workings, and in other mafic volcanic and

gabbro units on other parts of the property. Outside of areas of know mineralization and

underground development, only the top 600 feet of the SAM Unit has been explored by

surface drilling and near-surface underground development, mainly southeast of the mine.

Modeling of the three dimensional geometry and thickness of the SAM unit may allow

identification of thick lobes of the SAM unit that could form prospective sites for vein

systems, and displacements in contacts that may reflect the passage of mineralized shear

zones through the unit. For example, sinistral displacements of the SAM unit on shear

zones parallel to the 16-type veins have been previously identified 3000-5000 feet southeast

of the main shaft in near surface underground development and drilling (Figure 1). These

have the potential to host 16-type shear veins at depth, or could be associated with nearby

shear vein/stockwork vein networks.

Other prospective areas outside the direct area of the mine include:

(i) A band of mafic volcanic rocks and gabbro (termed Unit A) that occurs within felsic

volcanic rocks 1500-2500 feet south of the SAM unit under Rice Lake. This unit is

rheologically and mineralogically similar to the SAM unit, and has the potential to host San

Antonio style vein systems. Limited near surface drilling, and some drilling from

underground where Unit A passes close to underground workings has tested this unit, and

some minor gold mineralization has been previously identified. As at San Antonio, fault

displacements, zoned alteration and areas of high extension vein density may provide

indicators to mineralization. The unit has been intersected on several levels by the San

Antonio mine workings and parts of it could be explored by underground drilling. Although

parts of the near surface projection of the unit are not on Harmony property, the northeast

dip of the unit brings it onto the mine property within 2000 feet of surface for most of its

strike length; this is the area most easily accessible to exploration from the existing mine

workings. A particularly prospective area is at the southeastern margin of the San Antonio

property where the Normandy Creek shear zone is projected to intersect this unit (Figure 1).

This structure is host to gold mineralization to the northeast at the San Norm prospect, and

may contain, or bifurcate into, auriferous vein systems where it intersects unit A.

(ii) On the western margin of Rice Lake, the Rice Lake shear zone may form a prospective

host to mineralization where it intersects the SAM unit and Unit A. This structure is a

dextral syn-D2 shear zone that occurs in an area of high rheologic contrast at the

unconformable contact between the Bidou Lake subgroup and the clastic San Antonio

formation (Figure 1). The area is unexposed, but has been tested by several drill holes.

Compilation and review of the data is recommended if further exploration of the San

Antonio property is pursued by Harmony.

1. The SAM unit behaved as a rheologically competent body during regional deformation,

acting as a relatively brittle host within which semi-brittle fractures and shear veins

preferentially formed. Refraction of D2 fabrics, and formation of shear zones within the unit

allowed strain accommodation between the highly varying rheology of the SAM unit and

surrounding rocks that allowed dilatancy, fluid focusing and vein formation preferentially

within the SAM unit.

2. Mineralization is developed in the upper, leucogabbro portion of the SAM unit, suggesting

that the leucogabbro may form the most rheologically and chemically favorable part of the

unit for the formation of brittle fractures and shear veins. In addition, shear zone and 16-type

shear vein displacement is greatest at the hangingwall of the SAM unit, and the footwall

contact is frequently not displaced, or shows less displacement at the projection of shear

zones across the unit. This suggests that the shear zones dissipate as they cross the SAM

unit, possibly due to accommodation of strain internally. Basal portions of the SAM unit,

composed of melagabbro may be rheologically weaker and behave in a more ductile manner

than the leucogabbro hangingwall due to their greater abundance of chlorite after mafic

minerals. Variable rheology may also explain the preferential development of veins in the

leucogabbro. Thus, in future mine exploration, recording in drill logs and tracking of

different gabbro types on plans and sections are recommended to potentially identify most

favorable areas (leucogabbro) for mineralization. The strong affinity for veins in the upper,

hanging wall portion of the SAM unit may also reflect the entry of hydrothermal fluids and

vein controlling structures from the hangingwall.

3. Vein systems within the SAM unit are best developed along the northern periphery of a

series of thick lobes of the unit that together define an east-northeast plunging thickened

area. These thick portions of the gabbro may be primary and/or result from boudinage due to

deformation. General plunge of this thickened area is parallel to regional L2 elongation

lineation suggesting at least some structural influence. Further tracking of the SAM unit

thickness at depth may aid in following ore shoots and veins, or identification of other

prospective areas in the unit where it is of optimum thickness. Similar thickness occurs on

the south side of the thick lobe of the unit, immediately southeast of the mine workings.

Further evaluation of this area is warranted.

4. Degree of foliation development, and strain state of veins and dykes indicate that strain is

inhomogeneous in the SAM unit, and increases with depth. Increasing strain within the

SAM unit corresponds with an increase in the density, spacing, number and displacement of

16-type shear veins with depth, and with a focusing of the known vein systems from a strike

length of more than 2000 feet in upper levels to 1000 feet or less in the current mining area,

although the latter may in part be an artifact of the smaller amount of development and

drilling than on the upper levels. The changes suggest the focusing of strain into a narrower

portion of the gabbro, and increasing ductile behavior at depth, possibly due to increasing

pressure/temperature conditions at depth, or to narrowing of any potential controlling shear

zone at depth. These changes are also accompanied by thinning of the average width of

stockwork veins at depth, and a tendency for them to become en echelon in their distribution.

5. The northeast-plunging area of mineralization defined by currently and historically

producing veins may have been controlled by: (i) formation of vein controlling structures due

to buttressing by the thick gabbro lens, and resulting strain accommodation at the margins of

this thick lobe, (ii) intersection of a sinistral shear zone developed in hangingwall

metavolcanic rocks, that refracts into ore controlling structures as it enters the gabbro, and/or

(iii) the local orientation of the SAM unit hangingwall contact, which bends to westnorthwest

from northwest trends where the SAM unit is thickest.

6. 16-type shear veins, stockwork veins and extension veins are spatially related and form

interconnected fracture networks. Although all vein types are variably affected by D2 strain,

manifested as folding and boudinage, D2 fabrics are also rotated and brecciated within veins,

and progressively younger veins exhibit less strain, indicating syn-D2 formation of vein

systems. The occurrence of the same generations and orientations of extension veins in both

stockwork and shear veins, joining of stockwork veins and shear veins, similar structural

timing, and conjugate nature of the kinematics of each vein system suggests that the 16-type

and stockwork veins formed synchronously. Kinematic indicators, suggest that 16-type shear

veins accommodated predominantly sinistral shear sense with little vertical component.

Stockwork veins, while predominantly extensional structures, frequently display minor

dextral displacements that are conjugate to the 16-type shear veins. Shear veins may also

terminate at their western or upper ends in stockwork vein systems that splay off their

southern footwall side, defining horsetail-like geometries, in which some of the shear strain

on the shear veins is accommodated at their termination points by dilational opening of

stockwork veins. The two vein types frequently together form triangular wedges of abundant

veining in leucogabbro that extend inward from the hangingwall of the SAM unit, defining

wedge-shaped zones of block failure.

7. Adjacent to both 16-type shear veins and stockwork vein systems, density of all

generations of quartz extension veins, and the degree of associated sericite-Fe-carbonatealbite-

pyrite alteration rapidly increase within the SAM unit. The increase in vein density

occurs within a broader halo of chlorite-calcite alteration that overprints metamorphic

epidote, magnetite, and primary mafic silicate minerals within the SAM unit. Recording of

vein density, alteration mineralogy, and magnetic susceptibility in drill logs and underground

maps, and their tracking on cross sections and plans would aid in identifying proximity to

new vein systems in exploration drilling and drifting.

8. In lower mine levels currently the focus of mining, all shear veins displace the

hangingwall contact of the SAM unit in a sinistral sense. Tracking of the morphology of the

SAM unit hangingwall may thus aid in identifying further displacements elsewhere that may

indicate the presence or location of new shear veins, or the continuity of known veins. These

patterns further emphasize the value of continuing modeling and contouring of gabbro

contacts and thickness, which may allow definition of areas that may host new vein systems.

Where possible, locations of contacts should be established during drilling. Thus, where

holes are planned to terminate near SAM unit contacts, it is recommended that that they are

extended to better establish the contact position.

9. Both stockwork and 16-type shear vein systems exhibit a periodicity to their

development. Above 26 level, shear veins are spaced at 300-700 feet apart; this spacing

decreases to 200 feet apart in the current area of mining. Stockwork veins occur in four

clusters spaced 500-1200 feet apart in plan. In lower portions of the mine, the lower two

sets of stockwork veins are composed of en echelon stockwork veins that step progressively

east along shallow east plunging axes. The lower set of stockwork veins, defined mainly by

the 97 and A veins, continues to step to the east into the Deep East area, suggesting that the

Deep East zone may represent the next stockwork step in that set. If so, there is potential

for a further step to the east of Deep East. In addition, there is also potential for another

new set of en echelon stockwork veins and associated shear veins 500-1500 feet below

(east-northeast) of the current area of mining of similar size to the 97 – A – Deep East set of

stockwork veins and associated shear veins. To further delineate the Deep East zone and

any potential further en echelon steps to the east of it, further drilling from the existing

exploration drift at the southeastern end of 32 level would allow effective testing of this area

at an optimum drilling angle. Holes could be drilled down the dip of the SAM unit in

several fences spaced along the 32 level drift with an easterly azimuth, which would allow

the holes to cross both stockwork and 16-type veins at angles of 30-90 degrees. Since

drilling access is limited, testing for a further, new en echelon set of stockwork veins deeper

in the SAM unit would have to be completed by drilling down the dip of the SAM unit;

drilling from the northwestern portion of the lowest mine level, or construction of a drilling

drift in that direction, would allow drilling at close to an optimum east-northeast direction.

10. In addition to the potential targets in point 9 above, the following potential exploration

targets near, or within the current mine workings:

a) The D shaft area between 30 and 4920 levels. Vein systems in the 30-200 sub and

Puff sub area, which form part of the 97 stockwork vein system, may plunge down

dip to the north, north of the D shaft area, for several levels. The Deep West vein

system may also continue from the lower levels upward into this area.

b) The down dip extent of veins currently being mined on the lowest mine levels. The

increasing length and displacement of shear veins suggest that they may continue

significantly to depth for at least several hundred more feet. However, the

associated A stockwork vein system is thinning and may not continue significantly

further to depth; its thickest, and best developed portions will probably plunge

progressively further north as mining proceeds downward, in the plunge direction

typical of stockwork vein systems in this part of the mine.

c) Drilling suggests that a small shear system is developed 100-150 feet in the footwall

of the C shear vein system below 5040 level. This may represent the tip of a new

shear vein system that could be tested by extending some C vein definition drilling

holes further in its footwall.

d) Further en echelon steps of stockwork veins east of and beyond the 40, 50, and 60

stockwork veins between 18 and 24 levels. Evaluation of this area between surface

and 18 level is also warranted, since southeast of the historically mined area the unit

obtains the 200-400 foot optimum thickness that contains most of the vein systems

to the northwest.

Immediately to the northwest of areas of known mineralization the SAM unit, the unit thins

rapidly to less than 200 feet thick, and potential for significant veins is limited by the

narrow thickness of the host unit.

11. Outside the immediate area of the mine workings, high exploration potential exists for

the discovery of new vein systems in several environments within the San Antonio property:

(i) in other portions of the SAM unit where the unit forms thickened lobes of optimum

thickness, or where sinistral east-west trending shear zones that may represent the

manifestation of vein controlling structures laterally or vertically, are developed, (ii) in unit

A, a gabbro-mafic volcanic unit that occurs south of and parallel to the SAM unit, and

which has the potential to host similar styles of mineralization, particularly where the

Normandy Creek shear zone is projected to intersect it, and (iii) where the northwest

trending Rice Lake shear zone intersects the SAM unit and unit A.

12. The syn-D2 structural timing of vein systems at the San Antonio mine is similar to that

of the dextral, southeast-trending Wanipigow and Manigotagan shear zones that bound the

Rice Lake greenstone belt. The orientations and kinematics of stockwork veins and 16-type

shear veins are consistent with formation as extensional veins, and sinistral antithetic shear

veins, respectively, in a transpressive environment controlled by these shear zones. This

setting is similar to many other Archean gold systems, which occur in minor structures

adjacent to, and coeval with, crustal-scale shear zones.