Vein deposits at La Guitarra have physiochemical and mineralogical characteristics of the Intermediate Sulphidation epithermal type and fit thevein deposit model proposed by Buchanan(1981). Epithermal deposits form atshallow depths in volcanic-hydrothermal and geothermal environments. They define a spectrum with two end members, low and high sulfidation (Hedenquist et al., 1998). Intermediate Sulphidation epithermal deposits form part of the epithermal spectrum and their genesis is complex due to the involvement of fluids with meteoric or magmatic origin during their formation and to the fluid evolution.

There are in excess of one hundred epithermal veins within the property in five main vein systems: Comales–Nazareno, Coloso (Jessica and Joya Larga veins), La Guitarra (NW, Central and SE zones), Mina de Agua and El Rincón. The vein systems at La Guitarra property form a belt with an approximate width of 4 km that strikes NW – SE in excess of 15 km. Individual veins pinch and swell and vary in width from tens of centimetres to more than twenty metres. Economic zones, widths usually between 1 and 4 metres, are embedded in quartz (vein structure) having widths up to 20 metres (e.g. Guitarra vein). The ore shoots or economic zones can either be localized in the hanging wall or the foot wall of the vein structure.

Gangue mineralogy consists of banded quartz, amethyst quartz, colloform chalcedony, finegrained crystalline quartz, calcite, fluorite, pyrite, marcasite, barite, anhydrite, illite–smectite, adularia and alunite. Anhydrite and alunite veins are observed mostly filling narrow fractures. The ore mineralogy consists of proustite – pyrargyrite solid solution, electrum, acanthite, polybasite, sphalerite, galena and chalcopyrite. Secondary minerals such as malachite and smithsonite – hydrozincite (calamines) have been observed in some of the veins at Mina de Agua. According to Camprubí et al. (2006), the vein stratigraphy of the La Guitarra deposit can be grouped in three mineralization stages: a) stage I is dominated by a base-metal sulfide association whereas stages II and III contain most of the precious-metal assemblages. Relative mineral abundance in each mineralization stage shows an increase on the content of Ag–Au bearing phases with time (Camprubí et al., 2006). Stage II is the most important in volume and contains the main mineralization. Base-metal sulfides precipitated early in all mineralization stages, their relative content increases with depth at any stage (Camprubí et al., 2006).

The main textures observed in the veins are coarse banding, fine banding, colloform, bladed quartz, and breccia textures. Fine banding, colloform banding (particularly dark bands containing fine grain sulfides) and bladed quartz textures have been observed to correlate with higher silver and gold concentrations. This association is not surprising since colloform banding (chalcedony) and bladed textures are commonly associated with boiling and boiling is an important mechanism for deposition of precious metals in the epithermal environment. The breccias usually contain angular quartz clasts that range in size from a few millimetres to tens of centimetres and are supported by a silicified matrix or cemented by quartz or quartz and marcasite.

Spatial association, orientation, mineralogy as well as gas chemistry and microthermometry analysis suggest that the veins along the property may have had a common source and therefore could be cogenetic. Thus, the aforementioned characteristic could apply to the five vein systems.

The La Guitarra Silver Mine comprises two operating mines, La Guitarra and Coloso, and three past producing areas, the Nazareno, Mina de Agua and El Rincón, which are now considered as exploration areas.

Given the narrow vein conditions, mining in La Guitarra Silver Mine is undertaken using primarily the conventional overhand cut-and-fill mining method, with limited application of longhole stoping in areas where the vein is found with thickness of 3 or more metres in width.

The cut-and-fill stoping cycle is started with blast holes drilled using hand held jackleg drills followed by blasting using conventional mining explosives. After blasting, LHD’s are used to muck the blasted ore. The cut and fill stopes are generally 100 m in length along strike and extend between levels which are typically spaced 15 to 30 m apart vertically. Each cut is 2.5 to 3.0 m in height. Depending on ground conditions, the blast holes are drilled either upward or horizontally. Waste and mineralized material below cut-off grade is blasted down and used as backfill as needed.

ROM material delivered from the mine is dumped into a masonry coarse ore bin of a 100 tonnes capacity. The coarse ore bin is equipped with a steel rails grizzly in its upper part. The grizzly has openings of 10” x 10”; oversize material is reduced in size using a hydraulic hammer.

Crushing circuit include 24” x 36” primary jaw crusher.

The grinding section is comprised of four independent milling circuits. The dimensions and sizes
of the equipment that form the 4 milling circuits are listed below:
- 5’ x 9’ Marcy Mill (100 HP), 10” cyclone, SRL Denver 3”x3” 15 HP pumps;
- 8’ x 6’ Allis Chalmers Mill (300 HP), 15” cyclone, SRL Denver 5”x4” 20 HP pumps;
- 6’ x 6’ Marcy Mill (100 HP), 10” cyclone, SRL Denver 3”x3” 15 HP pumps;
- 7’ x 10’ Chinese manufacture mill, 15” cyclone, Goulds 5”x4” 25 HP pumps.

The mill at the La Guitarra flotation plant processes a silver and gold–bearing mineral through a flotation method producing a bulk Au/Ag concentrate. The installed plant capacity of the processing plant is 520 tonnes per day.

The processing plantf lowsheet consists of two-stage crushing, ball mill grinding, and a bulk flotation of the ore to concentrates, followed by thickening and filtering of the concentrates.