The mineralization has been identified over approximately 1.8 km of strike length at the Project and has been subdivided into four fault-bounded zones referred to as Los Planes, Intermediate, Las Colinas, and La Colpa, Los Planes is the best known of the areas and is the most densely drilled. Local normal and listric faulting displaces and truncates the mineralized zones (Herdrick, 2009). Much of the outcrop is covered by pediment that thickens to the east, featuring cobbles and boulders of schist and gneiss.

Los Planes
Mineralization extends along a north-south strike length of approximately 800 m. Drilling has encountered continuous mineralization to depths of 380 m from the surface. Mineralization generally varies between 1 and 20 m in thickness. Mineralization thickness is highly variable due to the stockwork-style of mineralization, and zones can locally coalesce into broader intervals over 100 m in thickness. Mineralization is interpreted to be open along strike to the north and at depth. Mineralization is hosted in diorites and gabbros within a large shear zone that dips between 75º and 45º to the west and horizontally to very shallowly to the east. The shear zone is broken into subunits that are defined by their structure, alteration, and degree of mineralization.

Las Colinas & Intermediate
Las Colinas and Intermediate zones appear to be genetically related, and are separated by postmineral normal faults that effectively truncate mineralization between the northern (Intermediate) and southern (Las Colinas) zones. The faults that bound Intermediate to the north and south dip away from each other at 50º to the north and 55º to the south, respectively. Known mineralization in the Colinas zone is truncated to the south by the mineral tenement boundaries. The deposits dip approximately 50º to 60º to the west, and are hosted in shear zones measuring over a km in strike length. Shear zones are generally competent in both zones, and is described as being composed of potassium feldspar and quartz in a matrix of sericite, chlorite, and quartz (AMEC, 2011). The mineralized zones vary in thickness, and are generally thinner to the south in the Las Colinas zone. Perhaps the most notable difference between the zones is the conspicuous absence of a well-developed stockwork zone at Las Colinas. Much like the mineralization at Los Planes, Au grades in the Intermediate zone are best associated with the stockwork zones characterized by elevated sulfide content.

La Colpa
Mineralization at La Colpa is interpreted to be a sheeted vein complex with intermediate stockwork zones. Due to the unpredictable nature of this mineralization, the number of parallel veins varies within the zone from two to six sequential structures. The stockwork zones are hosted in cataclastic units with a schist footwall, and are weakly chlorite/sericite altered. Originally, the mineralization was interpreted to be hosted in a shear zone dipping to the west at about 10º to 20º and composed of cataclasite and mylonite, with alteration dominated by sericite, silicification, and local K-feldspar. The dip of these units has been reinterpreted to be about 50º to 60º dip after more information was acquired in the recent expanded drilling program.

The pits are designated as North or Los Planes, Intermediate and Las Colinas pits; the North Pit was designed with three phases. The resulting pit designs defined 60.2 Mt of Measured and Indicated resource with an average grade of 0.85 g/t Au and 0.5 Mt of Inferred resources averaging 0.84 g/t Au. The average strip ratio is 3.1:1. At a 4 MTPY production rate, it is expected the potential mine life to be in excess of 15 years. The production schedule targeted a consistent total mine tonnage of approximately 18 MTPY.

The final dimensions of the proposed open pits detail the potential size of the operation and are not limited by infrastructure restrictions. Potential restrictions may include additional required permitted space for future heap leach pads and partial relocation of the highway that connects the towns of San Antonio and San Juan de los Planes.

Dimensions of the North Pit are 1200m north-south and 800 m east-west. The Intermediate pit is 400m x 400m and it merges with the North Pit where both pits share the main ramp. The Colinas pit is located to the south of the Intermediate Pit and has a dimension of 650 m in the north-south direction and 400 m in the west-east direction.

Two primary waste dumps are located to store waste from the North, Intermediate and Las Colinas pits. The North waste dump is located 100 m west and north of the North Pit, and will contain the waste rock produced by the North pit and part of the Intermediate pit. The second waste dump is located west of the Las Colinas Pit and will be used during stripping of the Intermediate Pit. The North pit could potentially be used for waste from the Intermediate and Las Colinas pits.

The Project has been designed as an open-pit mine with a heap leach operation utilizing a multiplelift, single-use leach pad. Leach-grade material will be crushed, stockpiled, reclaimed, and stacked on the leach pads with a stacking system at a nominal rate of 456 t/hr. The stacked material will be leached with a low-grade cyanide solution and the pregnant solution will be processed in a carbon adsorption circuit to extract gold and silver. The final metal recovery from the loaded carbon (desorption) will be processed off-site at a client owned facility (La Colorada Mine).

Lime will be added to the crushed material on the conveyor and the material will be transported via conveyor directly to the leach pad for stacking via 914 mm overland conveyors. The overland conveyors will transfer the crushed material to a series of grasshopper transfer conveyors to a horizontal indexing conveyor. The horizontal indexing conveyor will feed the material to a 914 mm wide radial stacker. The heap will be constructed retreating up the slope of the pad.

The leach pads will be a multiple-lift, single-use type pad designed for 100 days of leaching. Leaching solution will be supplied to the material with drip emitters and or sprinklers depending on the water balance within the system. Solution will be applied at a rate of 10 L/hr/m2. The dilute cyanide leach solution will percolate through the stack and collect on the geomembrane liner at the base of the heaps. A series of drainage pipes below the heap and above the liner, in place before stacking, will collect and deliver the solution to the pregnant solution pond.

Solution collected in the pregnant pond will be pumped to the adsorption circuit with submersible pumps. The absorption circuit is designed to process 1,000 m3/hr of pregnant solution. The adsorption plant will consist of two-trains of five each cascade style adsorption vessels containing 3.5 t of activated carbon per vessel. Each train will be capable of processing 500 m3/hr of pregnant solution.

The carbon treatment process, including desorption, acid washing and thermal regeneration, will be performed off-site at the La Colorada Project. Twenty-one tonne batches of loaded carbon will be transported to the La Colorada Project for processing weekly.

Transport of the loaded carbon will be accomplished by first loading the carbon into super sacks, and then the sacks will be allowed to drain for a few days. The drained, loaded carbon sacks will then be loaded into steel transport bins. The transport bins are sized to allow double wide and double high stacking in a 12 m standard shipping container.

Stripped carbon will be shipped back to the Project from La Colorada in a similar manner and placed back into the adsorption circuit. Each batch of stripped carbon will be acid washed at the La Colorada facility.

Precious metals will be stripped and electroplated onto cathodes at the La Colorada Project. The cathodes will be washed, dried and smelted in batches weekly.