Three principal zones of sulfide mineralization have been identified within a broad area of skarn alteration in the vicinity of San Rafael and nearby El Cajón. The San Rafael Main Zone consists of masses of sulfide grains that occur as replacements at an unconformable contact between what is believed to be Tertiary dacite tuff and Cretaceous limestone. Although it can be difficult to determine the host rock when total sulfide content is 90 to 100%, most of the massive sulfide replacement mineralization appears to be hosted in the dacite tuff. It contains silver, lead, and zinc mineralization with lessor gold and copper. The main minerals are pyrite, pyrrhotite, sphalerite, and galena with minor marcasite, chalcopyrite, and magnetite. This mineralization in the San Rafael Main Zone is often associated with quartz-sericite-pyrite alteration that has been interpreted as more distal skarn alteration. It has also been suggested that the San Rafael Main Zone displays many similarities to volcanogenic massive-sulfide deposits, such as those found in the Guerrero Terrane in central Mexico.

Mineralization within the Main Zone at San Rafael is primarily massive, sulfide-replacement material, which can contain greater than 90% sulfides, dominantly pyrite and pyrrhotite. The sulfide body is discrete, tabular, and lies along the shallow-dipping dacite tuff - limestone contact (Figure 7.3) where it has been referred to as “massive-sulfide mineralization” in previous reports. The zinc, lead, and silver, for the most part, lies within the body of sulfide replacement and consists of sphalerite and galena. The contacts of all elemental zones generally overlap within the massive sulfide, but mineral-shell boundaries and their internal grade distribution are not necessarily coincident.

The silver-gold “Upper Zone” lies within the Tertiary volcanic rocks about 50 to 100m above the Main Zone sulfide replacement of the San Rafael deposit. The Upper Zone is composed of irregular, subhorizontal layers sub-parallel to the Main Zone. Mineralization consists of sulfides, but sulfide content is much less than in the Main Zone. Weak base-metal mineralization occurs with the silver.

The Zone 120 at San Rafael occurs not as a single horizon, but as multiple bedding- and intrusivecontact-related mineralized horizons. The Zone 120 mineralization is interpreted to occur along nearvertical contacts between diorite and skarn-altered limestone in the lower parts, and in quartz-sericitepyrite-altered volcanic rocks in the upper parts. The Zone 120 mineralization extends upwards to overlap the Main Zone mineralization (Figure 7.3). Mineralization is associated with generally 2 to 10% sulfides and is more irregular in shape and more variable in mineral character than the San Rafael Main Zone. It consists of silver-copper-gold mineralization in the form of chalcopyrite and tetrahedrite with minor pyrite, galena, sphalerite, arsenopyrite, chalcocite, jalpaite, native silver, copper, and bismuth. This mineralization accompanies pyroxene-garnet-calcite skarn alteration. A skarn-altered limestone is the host at El Cajón and is also believed to be one of the host units at the Zone 120. Both skarn alteration and sulfide mineralization are spatially associated with intermediate dikes, sills, and small stocks.

The Zone 120 in the eastern portion of the San Rafael deposit contains silver-copper-gold mineralization within garnet-pyroxene-calcite skarn. The strong metasomatic alteration and the close spatial relationship with a large dioritic intrusion suggest that the Zone 120 represents a proximal skarn deposit. Silver-lead-zinc mineralization, in the form of massive sulfide replacements in the Main Zone, and to a lesser extent in the Upper Zone, is associated with quartz-sericite-pyrite alteration. This alteration and mineralization type is believed to be a more distal phase of the skarn system.

A hybrid underground cut-and-fill/room and pillar mining method has been selected to extract material from the Main and Upper Zones at San Rafael due to the depth, the shallow-dipping angle of the mineralization and the variable thickness of the mineralization.

For the purpose of mine planning, the mining zones were grouped in 16m high x 50m long mining panels. Access to the panels will be provided by attack ramps located approximately 65m away from the panels to allow for the appropriate maximum ramp gradient. Attack ramps will provide access to adjacent panels. A main production drift and a series of cross-cuts will be developed at the sill of each panel. Then the panels will be mined sequentially in 4m lifts by driving 4m x 4m drifts; the drifts will have a maximum length of 50m leaving vertical pillars as required for ground control and stability.

The Los Braceros process plant is a conventional polymetallic concentrator currently producing zinc, lead, and copper concentrates. It is currently treating ore from the Nuestra Señora mine at a nominal throughput of 1,500 tonnes per day. For the San Rafael ores, only lead and zinc concentrates will be produced with a design nominal daily throughput of 1,800 tonnes per day. The increased throughput will be possible following installation of a different primary ball mill and conversion of the two existing ball mills to secondary mills. Adequate capacity already exists in the flotation, dewatering and tailings handling circuits.

To process the San Rafael sulfide ore at 1,800 tonnes per day and a P80 of 106µm, additional grinding capacity is required and will be in the form of a 3.4 meter diameter, 4.3 meter long 1,119 kW ball mill. This mill will serve as the primary grinding mill and will discharge to the existing two ball mills currently serving as primary mills. The new grinding mill and much of the infrastructure exists at the plant site today, but remains to be installed and commissioned.

Key processing equipment includes:
• Three-stage crushing plant; 0.76 meter x 1.07 meter jaw crusher, 1.67 meter standard cone crusher, 1.67 meter shorthead cone crusher;
• 800 tonne fine ore bin;
• Primary ball mill: 3.4 meter x 4.3 meter, 1119 kW (new addition);
• Secondary grinding mills: Two each, 3.0 meter x 3.2 meter, 600 kW;
• Concentrate regrind mills; two vertical mills (new addition);
• Wemco 300ft3 rougher cells (lead and zinc);
• Galigher Agitair 54C x 40 and Denver Sub-A cleaner cells (lead and zinc);
• Four each 2.44 meter diameter x 3.65 meter drum filters;
• Bins and hoppers;
• Related support equipment – tanks, pumps, blowers, feeders, and instrumentation; and
• Engineered tailing storage facility.