The Sao Francisco deposit is an epigenetic shear-hosted and structurally controlled lode gold orebody, composed of one centimetre to five centimetre wide, sericitic quartz veins containing free gold. The orebody occurs in a hydrothermal alteration zone along the axial plane of an anticlinal foldwithin the basal Fortuna Formation of a 1,200 metre-thick sequence of clastic sediments known as the Aguapeí Group. Gold occurs as free gold and frequently as coarse nuggets associated with quartz, as laminations along the fracture planes, and within limonite boxworks after pyrite and arsenopyrite.
Modern day exploration at the Sao Francisco mine has occurred periodically from 1990 through 2008. Exploration activities conducted during this period included diamond drilling, reverse circulation drilling, metallurgical testing and bulk sampling, with a total of 90,580 metres drilled. The Company conducted a program of exploration through 2009 – 2011 aiming to check the continuity of the mineralization near the mine. Seventeen drill holes were drilled totalling 3,070 metres. The Company continued to drill and a further 43 drill holes were drilled totalling 5,144 metres; however this data was not yet available for the September 30, 2011 Mineral Resource and Mineral Reserve estimates.