The mineral deposits at Topia are adularia-sericite-type, silver-rich, polymetallic epithermal veins. Silver-gold-lead-zinc mineralization is found in fissure-filling veins along sub-parallel faults cutting andesitic flows, breccias, and pyroclastic rocks. Deposits are usually characterized by multiple veins in areas measuring 10 to 15km2 with individual veins generally less than 2m in thickness but up to 3-4km in length.

The Topia district lies within the Sierra Madre Occidental (SMO), a north-northwest-trending belt of Cenozoic-age rocks extending from the US border southwards to approximately 21°N latitude. The belt measures roughly 1,200 km long by 200 km to 300 km wide. Rocks within the SMO comprise Eocene to Miocene age flows and tuffs of basaltic to rhyolitic composition with related intrusive bodies.

The Topia area is underlain by a km thick package of Cretaceous and Tertiary andesite lavas and pyroclastic rocks which are, in turn, overlain by younger rhyolitic flows and pyroclastics.

The volcanic sequence is transected by numerous faults, some of which host the mineralized veins in the district. There are two sets of faults: one striking 320° to 340° and dipping northeast and the other striking 50° to 70° and dipping steeply southeast to vertically. The northeast-trending faults are the principal host structures for precious and base metal mineralization.

Mineralization within the veins consists mainly of massive galena, sphalerite, with lesser pyrite, arsenopyrite, and tetrahedrite in a gangue of quartz, barite, and calcite. The vein constituents often include minor adularia and sericite, and the wider fault zones contain significant proportions of clay as both gouge and alteration products. Ore minerals occur as cavity-filling masses, comprising millimeter-scaled crystals of galena and sphalerite. Some observations on metal zoning include, the lower parts of the mines are reported to contain slightly higher copper-gold content than at higher elevations; high silver grades are associated with higher proportions of base metals; the mines are located over an extreme range of elevations (1,000 – 1,800masl) on the Property and that each has vertical limits of mineralization from 100-200m with the deeper seated and more southern mines tending to have more arsenopyrite and the more western mines having more pyrite.

The veins range in thickness from a few centimeters to two meters. They are very continuous along strike, with the main veins extending more than 4km. The Madre vein has been mined for 3.5km and the Cantarranas vein for 2.4km. Many of the other veins have been mined intermittently over similar strike lengths. Vertically, the veins grade downward to barren coarse-grained quartz-rich filling and upwards to barren cherty quartz-calcite-barite vein filling. The main host rock is andesite of the Lower Volcanic Series, which is usually competent, making for generally good ground conditions within the mine. In wider sections, with greater clay content and/or zones of structural complexity, ground conditions are less favourable.

Topia consists of several mines, which comprise Argentina, 15-22, San Miguel, 9 North, San Juan, Recompensa, Hormiguera, El Rosario, La Prieta, El 80, and Durangueno.

The Topia underground mining operation producing approximately 225tpd (operating) from fourteen (14) mines on 52 separate veins using conventional mining methods, including resuing.

Mining at Topia generally consists of development along very narrow veins. Mining is selective using jacklegs, however, where possible, mechanized cut and fill is deployed. All mines are accessed via adits and ramps, although internal passes are constructed to access the upper and lower ore zones. Rock integrity at the mines at Topia is considered favorable, but on rare occasions roof support, in the form of rock bolting, and occasionally wire mesh, is required.

Mining is conducted by contractors and in-house miners sourced from nearby communities and outside cities, and utilizes equipment owned mostly by the Company. Mine contractors and equipment are alternated between the mines to accommodate the variations in production plans.

For the narrower veins at Topia, mining is conducted by modified cut and fill stoping (resuing) to selectively mine the ore and leave the waste for backfill. In a stope the ore is blasted and extracted first, then the wall rock is blasted as stope fill. Drilling is performed with jackleg drills and ore is hand mucked in the stope and dropped down timber crib muck passes which are carried upwards as the stoping advances. Ore is hand sorted at the face so that only the higher-grade ore is removed from the stope. Man-access and ventilation is provided in timber crib manways adjacent to the muck passes. The level interval for the stopes is typically 40m.

From the muck passes the ore is pulled via manual chutes, loaded into small rail cars and hand trammed to a dump at the portal. At the surface ore dump the ore may again be hand sorted to remove waste material. Waste from the hand sorting or from excess development is generally dumped over the bank of the hillside at these smaller mines. Ore is then picked up by front end loader and loaded into highway-style 10t- to 20t-capacity dump trucks to be hauled to the mill.

Along the Argentina and Don Benito veins, in the Argentina and 1522 Mines’ respectively, there are significant areas with vein widths of 0.5 to one meter. In these wider areas the mining is planned based on mechanized cut and fill mining with resuing to selectively mine the ore and leave the waste for backfill. Equipment used are small 2yd3 LHD’s for development and 1yd3 and 0.5yd3 LHD’s for mucking in the stopes. Development access is provided via decline. Ground support consists of rock bolts and mesh as required. Rock bolts include a combination of cement-grouted rebar and split set which gives initial support from the split set bolt and then longer-term support from the cement grouted portion of the bolt.

Sublevels are 40m apart in the mechanized cut and fill. Waste is generated from material beside the vein, which is blasted separately from the ore and then left as fill, or from the waste development in the mine.

Lifts in the cut and fill stopes are taken with horizontal holes (breasting) as the use of uppers drilling (to increase productivity and production) generated a ragged back in the stope and led to problems with ground support.

Ore is hauled from the stopes by LHD and then loaded into a truck for haulage to the mill.

Coarse ore is placed in one of six bins, which provides a means for segregation of ore types for batch processing or blending. Ore is passed through a grizzly to a 15” x 24” jaw crusher and then over a 6’ x 12’ vibratory screen. Oversize (>3/4 in) from the screen is sent to a secondary cone crusher, and then conveyed to a 200t-capacity fine ore bin.

Segregation of sulphide particles is achieved by means of a grinding circuit comprising three ball mills and two 10”-dia. cyclones. Fine ore is fed to one of either a 6’ x 14’ or 5’ x 10’ ball mill. When the larger unit is in use, the product is passed through the cyclones, with the oversize fed back into the ball mill. If the smaller mill is used, the oversize from the cyclones goes to a 4’ x 8’ ball mill which operates in closed circuit with the cyclones. Final grind size is 65% passing 74µ.

The mill employs conventional crushing, grinding, and flotation to produce lead and zinc sulfide concentrates. The operation normally runs seven days a week, 24 hours per day, with a weekly maintenance shift. The conventional wet tailings handling system was transitioned to dry stack by construction of a filtration facility that commenced operation in 2017.

A nominal 260tpd flotation concentrator with surface bins, crushing facilities, grinding mills, flotation cells, and a concentrate dewatering circuit.

The ore stream passes to a lead flotation circuit comprising primary and secondary rougher and cleaner flotation cells, followed by a similarly configured zinc circuit. Concentrates are dried to 10% moisture content by means of disc filters and shipped via trucks to the port of Manzanillo for sale to a concentrate buyer.

During 2017 the Company installed tails thickener and filter press to enable dry stacking of tails. As well, upgrades were completed ........