The deposits at El Peñón are low to intermediate epithermal gold-silver deposits, hosted in steeply dipping fault-controlled veins following rhyolite dome emplacement. Gold and silver mineralization comprises disseminations of electrum, native gold and silver, acanthite, silver sulphosalts and halides, plus accessory pyrite occurring with quartz, adularia, carbonates, and clay minerals. These minerals were deposited from boiling of low salinity fluids circulating in a hydrothermal system driven by the Eocene to Paleocene magmatism. Late stage oxidation has occurred to a depth of 400 m below surface.

The deposit comprises many individual tabular, steeply dipping zones or shoots that are amenable to mining by both underground and surface methods. Vein widths range from decimetre-scale to over 20 m. Individual mineralized shoots measure from less than one kilometre to four kilometres in strike length, and up to 350 m in the down-dip direction. Gold grades range up to hundreds of grams per tonne but are more typically less than 30 g/t. Silver grades are in the order of hundreds to thousands of grams per tonne.

There are thirteen main vein zones and many subsidiary veins in nine vein systems that have supported, support currently, or are planned to support surface and underground mining operations. The veins strike predominantly north south and dip steeply to the east and west. North-northeast to northeast-striking fault zones are also host to mineralized zones, however, the relative proportion of the overall deposit is small. The principal mineralized veins are Al Este, Bonanza, Cerro Martillo/Dorada, Dominador, El Valle/Discovery Wash, Fortuna, Martillo Flats, Pampa Campamento, Playa, Providencia, Quebrada Colorada, Quebrada Orito, and Vista Norte.

Gold and silver mineralization consists of disseminated electrum, native gold, native silver, silver sulphosalts, and silver halides occurring in a gangue of predominantly quartz, adularia, carbonate, and clay. Electrum is the most common form of precious metals in the deposit and occurs as micron- to millimetre-size subrounded and irregular grains. Two phases of electrum are present: a primary phase, which contains approximately 55% Au to 65% Au, and a secondary phase, which has resulted from supergene processes that have remobilized silver, and which typically consists of over 95% Au.

The mining method utilized at El Peñón is the Bench and Fill Method, which is a narrow vein longhole stoping method followed by a combination of consolidated and unconsolidated backfill to provide the required support for continued mining. Development of the overcut, or drill drift, and the undercut, or mucking drift, is completed at the required dimensions of four metres in width to permit operating clearances for both the longhole drill rigs and the load-hauldump (LHD) equipment. These drifts are advanced using a “split-blast” method whereby the vein material is mined first and then the remainder of the drift waste material is slashed out and mucked. This waste material is later used for unconsolidated backfill.

Stoping dimensions are 7.5 m or 15 m in strike length and from 6 m to 16 m in height and widths vary from one metre to six metres. Production holes are drilled with the longhole drill then loaded, blasted, and mucked with six cubic yard scooptrams, dumped into 30 tonne trucks and hauled to the surface stockpile. Waste backfill or cemented rockfill is placed as required.

Underground mine infrastructure includes the required ramps, cross-cuts for access and various lateral development, as well as excavations for power stations, mine sumps, refuge stations, maintenance shops, and other facilities. Ventilation raises are driven as required to provide the air requirement to meet mine regulations for the mine workers and operating underground equipment. Other installations include a shotcrete plant, backfill plant, and communications system. The total mine system extends for approximately ten kilometres on strike and covers a vertical extent of approximately 500 m, from the highest portal collar elevation to the lowest mine workings.

The process plant and associated facilities process run-of-mine (ROM) ore that is delivered to the primary crusher, using the main processes listed below:

• Crushing
• Grinding and pre-leaching thickening
• Leaching
• Counter-current decantation concentrate solution recovery
• Clarification, zinc precipitation and precipitate filtering
• Refining
• Tailings filtering
• Tailings disposal.

The El Peñón processing plant has a nominal production capacity of approximately 1.533 million tpa of stockpiled and mined ore.

ROM ore is dumped from a seven cubic metre capacity front-end loader (CAT 988H) through a 600 mm square-grid grizzly into 100 t capacity hopper. A 1,500 mm wide apron feeder is used to transfer ore from the dump hopper to the jaw crusher. Fine material is collected and transported directly to the conveyor belt that carries primary crushed material. Coarse material is fed into a 950 mm x 1,250 mm jaw crusher that produces a product with P80 of 63.5 mm. Crushed material is transported by a conveyor belt into a 1,500 t capacity bin. Additionally, an auxiliary crushing product stockpile is located to the northwest of the bin. The stockpile has a capacity of 10,800 t and covers an area of approximately 40 m x 60 m.

The SAG mill is fed by crushed material, and milling solution, to achieve the required pulp concentration inside the mill. Sodium cyanide (NaCN) solution is added as a leaching agent.

The SAG mill operates in series with a ball mill which feeds a battery of hydrocyclones. The underflow of the hydrocyclones returns to the SAG mill. Pebbles formed in the SAG mill are discharged by a trommel into a conveyor belt, which transports the pebbles to return to the mill feed conveyor belt. Alternatively, the pebbles may be mixed with crushed material to be recirculated to the grinding circuit. The concentration of the pulp fed to the hydrocyclones circuit is controlled on-line via density measurements through a nuclear density gauge.

The classification circuit consists of six hydrocyclones with four hydrocyclones operating, and two on stand-by. Overflow of the cyclones consists of a pulp which contains between 38% and 40% solids with a P80 of 150 µm. Particle size is controlled on-line through a PSI 300 particle analyzer. The overflow is fed to the grinding thickener. The underflow is recirculated to the SAG mill.

From the unclarified solution pond, the solution is pumped to four clarifying filters that clarify solutions to a maximum turbidity of one nephelometric turbidity unit (NTU). Clarified solutions are transported into the clarified rich solution pond for subsequent zinc precipitation.

Gold and silver leaching starts at the SAG mill, where NaCN is added, resulting in an extraction of approximately 75%.

The grinding thickener underflow is leached in six mechanically agitated reactors, with a capacity of 7,279 m3 , in a cyanide rich environment maintained by the addition of cyanide in the grinding and leaching steps. Oxygen is also added to favor the dissolution kinetics. The oxygen is homogenized with the pulp through recirculation pumps that propel the pulp to a Filblast type oxygen mixer. Oxygen is supplied from a liquid oxygen storage tank. Under normal conditions, the discharge of the last reactor is sent to the first thickener of the countercurrent decantation (CCD) circuit.

The leached pulp, with a 45% to 55% solids concentration, is transported by gravity to the CCD circuit. The CCD circuit consists of four high capacity counter-current thickeners. The objective of this circuit is to wash the pulp and recover the rich solution. The wash-solution flows counter-current to the solids flow increasing in precious metals concentration. The overflow of the first CCD thickener (CCD0) is transported by gravity to the mill solution pond, while the discharge of the last CCD thickener (CCD3) is pumped to the filtration area.

In normal operating conditions, the Merrill Crowe process consists of the following stages:
• Deaeration of the clarified solution by circulating the fluid through a vacuum tower.
• Gold and silver are precipitated with the addition of zinc to the deaerated solution.
• Filtering of gold, silver, and zinc precipitates.

The rich clarified solution (maximum flow of 275 m3 /h) is deaerated before entering the zinc precipitation stage, which is performed in the vacuum tower. The vacuum tower is a 10.4 m3 capacity reactor which achieves a rich deaerated solution with a concentration of less than 1 ppm of O2. The reject solution that exits the tower is fed to the press filters.

Precipitates obtained from the filter presses are deposited in trays with a capacity of approximately 50 kg of precipitate with 30% moisture content. Four retort furnaces eliminate the humidity and the mercury contained in the precipitate. Each furnace is loaded with eight trays, kept at a temperature of 538°C for about 20 hours under vacuum conditions. The product (calcine) is fed to the melting furnaces.

A reverberation furnace, which uses liquefied gas and air/oxygen to reach 1,220°C is used for smelting. Calcine is fed to the furnace through a screw feeder. The melt consists of two phases, the upper part of the slag, which is of lower density (2.5 g/L) and melts at 850°C, is formed by silica (flux) and impurities such as copper, iron, zinc and others; and the lower phase of the slag which consists of doré. This lower phase is of higher density (15 g/L), melts at 1,000°C and is mainly composed of silver and gold, with small amounts of impurities. The slag is poured into 50 kg capacity conical steel containers, while the doré is poured into 165 kg capacity ingot molds. Emissions from the refining furnace are collected by a hood and passes through a high temperature bag filter to recover the precious metal particles contained in the gases. The solidified slag is recirculated to the crushing stage of the plant in order to recover trapped gold and silver. The doré is removed from the ingot mold and loaded with a fork lift to the bar cleaner to remove the attached slag. After this process, the bars are removed and stored, for later weighing and shipping.