Skarn-style mineralization has developed in limestone and dolomite of the Morelos Formation, limestone and sandstone of the Cuautla Formation, and intercalated sediments of the Mezcala Formation where these rocks have been intruded by Paleocene granodiorite stocks. Skarn-hosted mineralization has developed along the contacts of the intrusive rocks and the enclosing carbonate-rich sedimentary rocks.

Three major deposits and one smaller deposits have been delineated to date: Major deposits include - El Limón (includes El Limón Sur), Guajes, and Media Luna and a smaller deposits Sub-Sill. Gold and silver mineralization at ELG deposits extends over 3,700 m along strike with widths up to 90 m. Copper, gold and silver mineralization at Media Luna covers at least an area of 1.4 km x 1.2 km, with widths ranging from 4 m to greater than 70 m in thickness.

At the Sub-Sill area, several skarn zones have been identified along the contacts of the carbonate rich sediments and marbles of the Cuautla and Morelos formations and sills fingering out from the main granodiorite stock. High grade gold mineralization has been intercepted in all the different skarn horizons. Within the skarn zones individual shoots of mineralization vary in strike length from approximately 50 meters up to 200 meters, with apparent thickness varying from 2 meters to 36 meters.

El Limón
Gold mineralization at El Limón occurs in association with a skarn body that was developed along a 2 km- long corridor following the northeast contact of the El Limón granodiorite stock. The skarn zone occurs at the stratigraphic level of the Cuautla Formation where marble is in contact with hornfelsed sedimentary rocks of the Mezcala Formation. Skarn alteration and mineralization at El Limón are fairly typical of calcic gold-skarn systems. Zones of coarse, massive, garnet-dominant skarn appear within and along the stock margin, with fine-grained pyroxene-dominant skarn more common at greater distances from the contact with the stock. Significant gold mineralization at El Limón is dominantly associated with the skarn, preferentially occurring in pyroxene-rich exoskarn but also hosted in garnet-rich endoskarn that has been affected by retrograde alteration.

Sub-Sill
The Sub-Sill area is located between the El Limón and El Limón Sur ore deposits and under the El Limón Sill. At the Sub-Sill area, several skarn zones have been identified along the contacts of the carbonate rich sediments and marbles of the Cuautla and Morelos formations and sills of granodiorite interpreted as fingering out from the main El Limón granodiorite intrusion stocks. High grade gold mineralization has been intercepted in all the different skarn horizons, mainly associated with exoskarns with retrograde alteration. Within the skarn zones individual shoots of mineralization vary in strike length from approximately 50 meters up to 200 meters, with apparent thickness varying from 2 meters to 36 meters. The trend of the overall skarn system in the Sub Sill area is N-S to NE-SW and dips between 35° to 45° to the northwest, and appears to connect to previously recognized skarn and gold mineralization at the Limón Sur deposit 200 meters to the SW.

Mineralization at the Sub-Sill deposit is primarily gold, associated with variable contents of silver and copper. Gold occurs in low and high sulfidized pyrrhotite rich skarns, while silver and copper mineralization is primarily determined by the degree of sulfidation of the host skarn. Mineralization is strongly associated with a late stage retrograde alteration characterized by amphiboles, chlorite, calcite ± quartz ± epidote, affecting pyroxene-garnet marble related exoskarn and granodiorite porphyry related endoskarn. Locally mineralization occurs in narrow lenses of massive sulfides.

Guajes
The Guajes East skarn zone is developed in the same lithologies on the opposite side of the same intrusion that is present at El Limón. Drilling indicates the skarn development at Guajes East is 300 m wide, up to 90 m thick, and is continuous along at least 600 m of the northwest edge of the intrusion. At Guajes East, the intrusion underlies the sedimentary rocks and dips about 30° to the west, sub-parallel to bedding. There are also a number of shallow-dipping intrusive sills at Guajes that crosscut the skarn and although they are occasionally mineralized at or near their contacts, for the most part, the sills are non-mineralized. As of end of March 2018, the Guajes East zone has been mined out.

Gold and silver mineralization at El Limón and Guajes extends over 1,700 m along strike with widths up to 90 meters. Mineralization at El Limón has been intercepted to a depth of 470 m from surface and intercepted at Guajes to a depth of 300 m from surface. The deepest mineralization known to date was intercepted to a depth of 650 m from the surface between the Sub-Sill deposit and Limón Sur.

The deposits and occurrences are considered to be examples of gold- and gold–copper-type skarn deposits.

Mining at the ELG Mine Complex is being carried out by two methods, open pit method in the Guajes, El Limón and El Limón Sur pits and by underground for the ELG UG mine currently focused on the Sub Sill zone.

The ELG deposit is being mined principally by open pit mining methods. Underground mining is underway in the ELG UG (Sub-Sill zone), which is located at a depth where open pit mining is not economic due to adverse strip ratio.

The ELG pit slopes are comprised primarily of competent rock. Weaker rock has however been observed in close proximity to the known major faults and near surface topography.

ELG OPEN PIT
Surface haul roads are in general designed 25 m in width (including allowances for a drainage ditch and shoulder safety berm) at gradients up to 10.5% to support two-way uninterrupted haulage by 90-tonne class mining trucks. Because of the steep terrain, construction of mine access and haul roads is challenging. To minimize cut excavations mine roads utilized for pit access only are generally designed 18 m in width at gradients up to 10.5%, which is considered adequate for single lane equipment traffic. Pullouts are required for large vehicle passing.

All pits are designed with 7 m bench heights, which match the vertical dimension of the mineral resource blocks. Pit walls are designed with catchbenches at 14 m intervals (i.e., double benched) or at 21 m intervals (triple benched). In general, based on geotechnical parameters, Guajes pit walls located to the west of the La Amarilla fault are designed with catchbenches at 14 m intervals, whereas pit walls to the east of the fault (i.e., the higher pit walls) are designed with catchbenches at 21 m intervals. The El Limón and El Limón Sur pits are designed with catchbenches at 21 m intervals.

In-pit haulage ramps in general are designed 25 m in width at 10% gradient. Near pit bottom the haulage ramp designs are narrowed to 18 m, which is suitable for single lane traffic by the 90 tonne class haulage trucks currently in operation.

ELG UNDERGROUND – SUB-SILL ZONE MINING
The ELG Underground Mine consists of two main work areas; the Sub-Sill and ELD. The Sub-Sill zone is currently being developed and the ELD is the subject of a drilling program to support mine planning. A main ramp from Portal No. 1 (1172EL) provides access to both the Sub-Sill and ELD ramps. The ELD and Sub-Sill ramps start at an intersection approximately 235 m down the main ramp. ELD exploration drill bays have been developed approximately 300 m down the ELD ramp from the Sub-Sill/ELD ramp intersection and the development of the Sub-Sill resource occurs approximately 350 m along the Sub-Sill ramp.

The Sub-Sill zone as it is currently understood consists of several lenses that are relatively flat lying with a dip varying from approximately 30 to 45 degrees and extends from 1115 meters elevation in the upper part of the mine, to 1,000 meters elevation in the lower areas. The mineral resource extends approximately 150 meters along strike (north-south) with a variable thickness up to 12 meters thick. The elevation of the main portal is at 1115 meters elevation.

The predominant underground mining method in the Sub-Sill Zone is Mechanized Cut and Fill (MCAF).

The stope design process begins with the mineral resource estimate block model which has dilution and mining recovery adjusting factors applied to tonnage and grades. An in-situ cut-off grade is applied to the mineral resource block model and a 5 m high cut is planned. The mining shapes are evaluated with respect to the mineral resource block model to determine cut tonnage and grades against the cut-off grade to determine if it is included in the mine plan.

Backfill is important in the overall stability of the underground workings. All mining areas at the Sub-Sill Zone will be backfilled with either cemented (CRF) or uncemented rockfill (URF).

Two identical crushing systems are installed to crush Run Of Mine (ROM) ore from the El Limón and Guajes pits. A RopeCon® conveyor system delivers ore from the El Limón crusher located at the rim of the El Limón pit to the processing plant.

The RopeCon is a bulk material and unit load handling conveyor that combines the benefits of well proven technologies, the Ropeway and the conventional conveyor belt. The El Limón RopeCon conveys the El Limón ore over approximately 1 km horizontal and 300 m vertical distance. RopeCon was installed in 2015 and has been in operation since 2016.

At each crusher location, a crusher feed hopper, with 200 tonnes of capacity, is fed directly from rear dump haul trucks of 100 tonne capacity each. The crusher feed hopper feeds the 1.067 m by 1.651 m primary gyratory crushers that produce a 150-mm size product to feed the SAG mill circuit. Crushed ore at the Guajes pits’ crushing plant is withdrawn from the crusher discharge hopper by a 1.37 m wide by 6 m long apron feeder feeding a 1.219 m wide by 149 m long belt conveyor. The conveyor transports the ore to a coarse ore stockpile. Crushed ore from the El Limón pit crushing plant is withdrawn from the crusher discharge hopper by a 1.37 m wide by 6 m long apron feeder feeding the RopeCon® conveyor, which transports crushed ore to the coarse ore stockpile. The coarse ore stockpile has a live capacity of 14,000 tonnes.

Crushed ore is reclaimed by two reclaim feeders delivering feed to the SAG mill in the grinding circuit by a 1.22 m wide by 200 m long conveyor belt.

Ore is currently ground to a final product size averaging 80% minus 83 microns in a SAG primary and ball mill secondary grinding circuit.

Primary grinding is performed in a 9.15-meter diameter by 4.15-meter (effective grinding length) long SAG mill with a 7,000-kilowatt motor. It operates in closed circuit with a SAG mill discharge screen and pebble crusher. Cyanide addition to the grinding circuit although originally done has been discontinued as sufficient cyanide is in recycled process water.

Secondary grinding is effected in a 7.3 m diameter by 12.65 m (effective grinding length) long ball mill with two 7,000- kilowatt motors operated in closed circuit with hydrocyclones. Hydrocyclone underflow flows by gravity to the ball mill. Hydrocyclone overflow (final grinding circuit product) reports by gravity to the pre-leach thickener.

The grinding circuit, including the thickener, is decoupled from the back end of the process (tailings filtration) to avoid disruptions to grinding caused by short-term stoppages in the filtration area. The front end can operate up to six hours, prior to having to shut down. During this time, grinding thickener underflow can be stored in up to three leach tanks which are then slowly emptied with slurry processed through the regular leach tanks after the tailings filters are returned to normal operation.

The design basis for the ELG Process Plant is 14,000 tonnes per day at 90% mill availability. The ELG Process Plant has been in commercial operation since March 2016 and is currently operating at ~13,000 tpd. The current bottleneck in the ELG Process Plant is the grinding circuit, which is currently being optimized to balance the workload between the SAG Mill, Ball Mill and Pebble Crusher.

The basic process flow is crushing, grinding, agitation leaching, carbon adsorption, carbon acid and cold washes, carbon desorption (stripping), carbon regeneration, gold electrowinning, gold refining, tailing detoxification, tailing filtration and disposal. The ELG Process Plant designed for the ELG Mine Complex utilizes processes and equipment that is standard for the industry. In late 2016, the decision was made to add a SART plant to the process to alleviate operational issues caused by the presence of soluble copper in the ore. The SART plant is expected to be in full operation Jul ........