Veins in the Cerro Los Gatos deposit show textures and gangue mineralogy (local chalcedony and calcite, and quartz-replaced lattice texture calcite) that indicate a relatively high-level hydrothermal system in the boiling environment. Breccia with clasts of vein quartz indicates a protracted hydrothermal system during multiple faulting events, a positive sign for economic epithermal veins. It has been interpreted that mineralized-ore shoots may extend relatively far down dip, possibly to at least 250 m.

Mineralization at Cerro Los Gatos is characterized by, silver, lead, zinc, and copper sulfides and their corresponding oxides, along with fluorite, manganese, barite, and traces of gold associated with quartz and calcite veins. The veins vary in orientation from West-Northwest to Northwest to North-Northwest to North-Northeast and vary in thickness from 1 m to 8 m in outcrop but displaying much greater true thickness at depth. Study of the veins in hand specimens and thin sections suggest they are epithermal in origin and are likely of intermediate sulfidation composition.

Mineralization at the Cerro Los Gatos deposit is associated with a series of West-Northwest trending veins hosted in volcanic rocks on the footwall side of a listric normal fault contact. The hanging wall of the fault is comprised of epi-clastic sediments.

Economic mineralized grades are not present at surface; however, epithermal alteration textures are present and aided in the discovery of the deposit. The general Northwest trending East dipping Cerro Los Gatos vein system is persistent with a mapped extension in the order of 10 km, true widths of as much as 30 m at depth as demonstrated by diamond drilling, and local associated veining up to 50 m wide. Banded quartz veins and breccias are cemented by quartz, calcite, and abundant manganese oxides.

A study based on geological characteristics and silver-lead-zinc (arsenic-antimony-mercury) anomalous sections of the vein resulted in the discovery of the Cerro Los Gatos listric-shaped mineralized horizon hosting steeply to shallowly dipping mineralized-shoots at depth. Mineralization of interest occurs for approximately 2,500 m in length, between an elevation varying roughly between 1,200 masl and 1,400 masl through a mineralized vertical extension of between 50 m and 250 m and an estimated average in the order of 200 m. The reported average drilled width of the structure is in the order of 8.9 m. It is noted that some sections of the vein required deeper drilling and some holes intersected mineralization of interest.

The top of the mineralized horizon at Cerro Los Gatos is generally located at an elevation of 1,400 masl. The surface is in the order of 1,570 masl ± 50 masl.

Mineralization of interest and high-grade mineralization have been identified in the different vein systems at the Los Gatos project. Lead, zinc, and silver have been identified from epithermal quartz veins at the surface and from drilling intersections, while smaller, but important quantities of gold and copper associated with the veins have been intersected. Anomalous values have, thus far, been identified in the Cerro Los Gatos, Esther, Amapola, Cieneguita, San Luis, Paula, Rodeo, San Agustín, Boca de León, Lince and Mezcalera zones. Drilling has identified a continuous geometry of the mineralization in the Cerro Los Gatos, Esther, and Amapola zones.

Lead mineralization occurs primarily as galena and lead oxide minerals of varying grain sizes that are disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units.

Zinc mineralization occurs as sphalerite and zinc silicate minerals of variable grain sizes disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units. Sphalerite ranges from yellow to brown in color and is deposited in a similar style but is not always associated with the galena mineralization.

Silver mineralization occurs as acanthite (argentite) and native silver and has been detected in thin sections as proustite as small inclusions within galena grains.

Copper mineralization occurs as chalcopyrite and occasional native copper disseminated within quartz veins. Gold mineral species have not been identified visually but are present in small quantities in assay results.

The veins themselves display variable gangue mineralization, depending on the depth of exposure within the epithermal environment. It is common to observe calcite or manganese oxide mineralization at high levels within the epithermal system, which transitions to barite, fluorite, and quartz at lower levels. Adularia, albite, and alunite have also been observed within the veins but only in small percentages and usually at high elevation levels. Within the mineralized portions of the veins, it is common to see quartz with minor fluorite and occasional minor calcite associated with lead, zinc, silver, copper, and gold mineralization. The veins are typically rhythmically banded on a scale of 1 mm to 10 mm per band, with repeated pulses of quartz carrying the metals and other gangue minerals. It is common to see multiple pulses of mineralization where small veins crosscut each other. It is also common to see various coloration of quartz in the multiple pulses, ranging from milky white to vitreous gray to amethystine purple (P. Pyle, 2010).

It is apparent that most of the economic mineral values are associated with sulfide mineralization. Oxide mineralization is limited at depth, and is commonly related to fracture, breccia zones, and open spaces within the veins.

The underground mine design has been created to support a steady-state production rate of 2,500 tpd of ore. The sequence of mining has been planned to begin with the Central Zone (CZ), which has already been accessed via the existing decline developed down to the 1400 Level. The mine plan includes using cut and fill methods for the entirety of the CZ, in a top down sequence, starting in the central portion.

The NorthWest Zone (NWZ) has been planned to be mined concurrently with the CZ via longhole stoping methods with sublevels developed at 20 m vertical intervals. Portions of the NWZ thicker than 9 m (footwall to hanging wall) will be mined using transverse longhole mining. Areas less than 9 m in width will be mined using longitudinal longhole mining.

Production has started at the Los Gatos Project. A combined overhand and underhand approach have been chosen in order to optimize the mining sequence based on the existing excavation extents in order to meet the production and grade requirements of the mine. A mix of overhand and underhand
mining has been implemented, starting on the 1390 Levels in both the NWZ and the CZ.

Limited production began in November 2018 and has been able to continue at a constant ramp-up through to the present time. Due to the underhand approach, sill pillars are designed at necessary intervals in both cut-and-fill (CAF) and longhole stoping (LHS) blocks. The underhand longhole stoping areas require re-mining or undercutting of the bottom sill drifts compared to the overhand approach.

Modern trackless mobile equipment is being utilized for most mining activities. LHDs and dedicated underground trucks are used for ore/waste loading and transport from the underground workings through an internal ramp system and portal that connects all levels to surface.

Based on the deposit geometry and anticipated geomechanical conditions, underground mining of the Los Gatos Resource incorporates both longhole and drift-and-fill mining methods. The existing exploration decline from surface has been extended to provide primary access and delivery of services. The ramp is also used for haulage of ore and waste from the underground operations.

Primary Crushing
Run-of-mine (ROM) ore is transported to the crushing plant area by rear-dump trucks and dumped into an open stockpile for manual metal removal.

The primary crushing line consists of a dump hopper, grizzly screen, rock breakers, crusher and associated dust collection and transfer equipment. Run of Mine (ROM) ore is dumped into the dump hopper using a front-end loader. The grizzly screen oversize feeds the jaw crusher. Two mobile rock breakers are available, one to service the crusher or screen and another one to service ROM area stockpile. The crusher reduces the size of run-of- mine ore from maximum 610 mm to approximately 100% passing 175 mm. Crushed ore drops onto a belt conveyor that transports the crushed ore to a covered crushed ore stockpile.

Crushing production rate is monitored by belt scale mounted on the conveyor. Tramp iron is removed using a magnet is located at the discharge of the primary crusher discharge conveyor. A metal detector has been installed over conveyor. Dust is controlled in the dump pocket with water sprays and dust collector vents positioned at the conveyor transfer points. An air compressor and instrument air dryer have been installed for operation and maintenance. A mobile crane is used for maintenance of the primary crusher.

Crushed Ore Conveying, Transport and Storage
Primary crushed ore is stockpiled in a covered dome. A reclaim tunnel has been installed beneath the stockpile. The stockpile contains approximately 3,000 tonnes of “live” ore storage and a total of 18,000 tonnes of storage. When required, ore is moved from the “dead” storage area to the “live” storage area by front-end loader or bulldozer.

Ore is withdrawn from the coarse ore reclaim stockpile by variable speed belt feeders. The feeders discharge to the transfer conveyor belt. The transfer conveyor discharges to the SAG mill in the grinding circuit. The ore reclaim rate is monitored by a belt scale mounted on the conveyor.

Dust control in the stockpile area is performed by the wet type dust collector systems. There are two dust collector systems, one to control dust at the discharge of the stockpile feed conveyer, and another to control dust in the ore reclaim tunnel.

Grinding
Ore is ground to rougher flotation feed size in a semi-autogenous (SAG) mill primary grinding circuit and a ball mill secondary grinding circuit.

The SAG mill operates in closed circuit with a vibrating screen. Water is added to the SAG mill to produce a slurry and the ore feed size is reduced as it traverses the SAG mill. The SAG mill discharges onto a double deck screen with 6.35 mm bottom openings. Screen oversize is recirculated to the SAG mill feed chute by a series of conveyors. Screen undersize flows by gravity to the cyclone feed pump box. A belt scale mounted on the recycle conveyor monitors the SAG mill recycle rate. The target SAG grind is 80% passing 1,381 microns.

Secondary grinding is performed in a ball mill. The ball mill operates in closed circuit with hydrocyclones. Ball mill discharge is combined with vibrating screen undersize in the cyclone feed pump box and is pumped to hydrocyclone clusters. Combined slurry is pumped using variable speed horizontal centrifugal slurry pumps (one operating and one standby) to the cyclone clusters. Hydrocyclone underflow flows by gravity to the ball mill. Hydrocyclone overflow (final grinding circuit product at 80% minus 45 microns) flows by gravity to the tramp oversize screen positioned prior to flotation circuit.

Cyclone overflow is sampled by primary samplers and analyzed by the lead and zinc on-stream analyzer for metallurgical control prior to flotation. Cyclone overflow from cyclone cluster is also monitored for particle size distribution by a particle size monitor.

Zinc sulfate (ZnSO4) and sodium cyanide (NaCN) is added into the ball mill.

Grinding balls are added to the SAG mill and ball mill by ball loading systems. Air compressors and an instrument air dryer provide service and instrument air for operations and maintenance. An overhead crane has been installed for maintenance of the grinding mills.

Regrinding
Lead rougher concentrate is pumped to the lead regrind cyclone feed pump box and combined with the regrind mill discharge. The combined slurry is pumped using fixed speed horizontal centrifugal slurry pumps (one operating and one spare) to a hydrocyclone cluster. Overflow from the regrind cyclone cluster (final regrind circuit product) is sampled for particle size distribution analysis by the lead regrind cyclone particle size monitor, analyzed by the lead and zinc on-stream analyzer and flows by gravity to the lead cleaner conditioning tank and cyclone underflows by gravity to the lead regrind mill. Product from the regrind mill reports to the lead regrind cyclone feed pump box.

Zinc rougher concentrate is pumped to a zinc regrind hydrocyclone feed pump box and combined with the zinc regrind mill discharge. The combined slurry is pumped using fixed speed horizontal centrifugal slurry pumps (one operating and one spare) to the zinc regrind hydrocyclone cluster. Overflow from the zinc regrind cyclone cluster is sampled by sampler for particle size distribution analysis by the zinc regrind cyclone particle size monitor, analyzed by the lead and zinc on-stream analyzer and flow by gravity to the zinc cleaner conditioning tank and underflows by gravity to the zinc regrind mill. Product from the regrind mill reports to the zinc regrind cyclone feed pump box.

The Project processing facility is designed to treat 2,500 tpd of lead, zinc and silver material at an operational availability of 92 percent. The processing flow sheet for the Project is a standard flow sheet that is commonly used in the mining industry, including conventional flotation recovery methods typical for lead-zinc material.

Cyclone overflow, the grinding circuit product, is fed to the flotation plant. The flotation plant consists of lead and zinc flotation circuits. The lead flotation circuit consists of rougher flotation and three-stage cleaner flotation. The zinc flotation circuit consists of rougher flotation and five-stage cleaner flotation.

High levels of fluorine have been encountered in the ore from the mine since the original
feasibility study was completed and since initial construction of the mill was completed. The fluorine removal has required alterations to the milling process and an additional deep-froth flotation cell has been adde ........