Geology

The Chelopech deposit represents one of Europe’s largest producing gold and copper mines. The deposit comprises a number of discrete ore bodies within an andesitic to dacitic volcanic complex of hostrocks on the northern side of a north-easterly trending jog in the regional, east-west trending Balkan fault. The hostrocks in turn comprise a portion of an Upper Cretaceous magmatic and sedimentary assemblage preserved within a north to east trending graben. Basement rocks exposed to the south and east of Chelopech include Precabrian granitoid gneisses, two-mica schists, quartzites and amphipolites.

The northern and north-eastern part of the volcanic complex has been eroded off whilst the southern part has been deeply down faulted by part of the Balkan fault complex. During the first volcanic stage the copper-gold-pyrite mineralisation was deposited. The second stage of volcanic activity was centred to the east of Chelopech - and is illustrated in the figure below.

In the following stages, sub-volcanic porphyritic andesites, porphyritic syeno-granodiorites and intrusive rhyodacites where injected into the basement. These bodies host and localise several large copper porphyry deposits which run northwesterly across the deposit, including the Elatsite porphyry copper stockwork deposit (5 km north west), the Medetski Reka gold copper deposit (5 km south east) and the Medet porphyry copper molybdenum deposit (10 km north). This is illustrated schematically in the figure below.

Mineralisation
The Chelopech ores are developed largely in altered andesitic and dacitic lavas, with the balance being hosted in interbedded fine grained tuffs and agglomerates. The original wallrocks were brecciated and altered during mineralization largely destroying their original fabric. In the mine area the mineralisation is spatially associated with, and restricted to, the andesitic volcaniclastic zones, and is sulfide-dominated and constrained within areas of intense silica and to a lesser extent advanced argillic alteration. The orebodies comprise lenses, discrete pipes and branched and converging geometries. They have been grouped into two mining areas termed the Central and Western Zones, comprising eleven orebodies and nine orebodies respectively. Of these, six are considered significant to the defined resources; these are 18, 19E, 19W in the Central zone and 103, 150 and 151 in the Western zone. Lenses comprising the orebodies vary from 150 – 300m in length, 30 – 120m in diameter and extend for up to 350m down dip.

Silica-sulphide mineralisation is tectonically controlled and predominantly located along, and proximal to, fault structures and, in the case of the larger ore bodies, at their intersections. The ores have between 50% to 75% silica content. The ore is brittle and fractures well with blasting but is very abrasive. The sulphide content of the ores is generally low, with a ubiquitous background of 5% to 10% pyrite, with sulphide content as high as 30% in well mineralised stockworks, and up to almost 100% in the massive orebodies.

The principal ore minerals in the Chelopech deposit are pyrite, tennantite, enargite-luzonite, chalcopyrite, gold and bornite together with subordinate famatinite, sphalerite and galena. Quartz, barite, dickite and kaolinite are the dominant gangue minerals with chlorite, ankerite and gypsum being minor contributors. The overall mineralogy of the Chelopech deposit is complex and to date 71 mineral species have been identified.

Ore Resource
Surface exploration commenced in 1956 and has been carried out extensively throughout the deposit area with approximately 550 diamond drill holes producing 76mm (approximately HQ) core. Many hole were wedged, giving multiple ore body intersections. Most surface holes are vertical or steeply inclined and average 600-700m in depth with some holes extending down to 1000m below surface.
The holes were drilled 50m apart along section lines 50m and occasionally 25m apart. Due to bore hole deviations in depth, some intersections were up to 100m-130m apart and required infill drilling for resource status. The current mine underground drill spacing is nominally 20m square
In 2004, an extensive delineation drilling program totalling, 33,000m of underground diamond drilling, was completed with the objective to upgrade as much of the inferred resource as possible to the indicated category.

The Chelopech Mine Mineral Resources currently stand at:

Lower Cutoff 4.0 (AuEq)	Tonnes (Million)	Gold		Copper
		Grade (g/t)	Au Oz (000)	Grade (%)	Cu (t) (000)
Measured	3.13	4.7	473	1.8	56
Indicated	21.80	3.9	2,733	1.4	305
M&I	24.93	4.0	3,206	1.5	361
Inferred	6.50	3.2	669	1.2	78

This Resource Statement has been prepared and reported in accordance with the Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects of February 2001 ("the Instrument") and the classifications adopted by CIM Council in August 2000.