The San Luis vein system is a typical volcanic hosted low sulphidation epithermal quartz/precious metal deposit. The deposit is very similar to numerous other volcanic-hosted epithermal vein deposits that occur in the Rocky Mountain, Sierra Nevada, Sierra Madre, and Andean cordilleras, including those in districts in Ouray/Telluride and Creede, Colorado, Silver Peak, Nevada, Guanajuato, Fresnillo, and Pachuca, Mexico, and Morococha, Quirivilca, and Casapalca, Peru.

Vein gangue mineralization in the San Luis deposit consists of quartz, chalcedony, calcite and minor adularia. Gold occurs as electrum and silver is present as acanthite, other silver sulphosalts, and electrum. Other sulphides include trace amounts of pyrite, chalcopyrite, galena and sphalerite The veins display common epithermal textures including crustiform banding that often display the interlayers of quartz and sulfide minerals described in Item 10. Bands are frequently disrupted, indicating repeated pulses of mineralization. Lattice textures in which calcite crystals have been replaced by quartz and brecciation are also common characteristics. Faulting and fracturing are key elements in the localization of mineralization in the vein system. Mineralized “shoots” typically occur in dilational zones that are the result of a variety of local stresses, and often these stresses are repeated along the length of a vein structure, resulting in multiple mineralized-shoots.

The Ayelén vein is the ........

The selected mining method is “mechanized overhand cut and fill”. This method is very selective, both in the horizontal and vertical directions, handles weak ground well, and allows a reasonable productivity (generally about 3 to 5 tonnes per manshift in the mine) in the mining process. Mining will be performed conventionally with stoper drills and small, captive, electric scoops.

There is the potential to use mill tailings for hydraulic backfill but this requires further evaluation. Waste rock can be economically hauled to the stopes from mine development (when available), or from the broad colluvium deposits located near each mine entrance.

The stope is prepared with a backfill/ventilation raise in the center of the stope, and two, vertical access raises (1.5m x 3.0m) on the strike of the vein, located at the stope extremities. These access raises are as wide as the mineralization, or the minimum mining equipment width requirement, and about two meters in depth. At the San Luis Project, the second cut will be accessed by ramping from the first cut inside the stope. This succession is planned for each new cut, leaving the equipment used for drilling and mucking captive in the stope until the level above is reached. This can lower productivity in the stope considerably, since all equipment repairs and maintenance must be performed in the stope. It also requires that extra stopes be prepared at all times to provide the programmed plant feed when scheduled ........

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Gold and silver will be extracted from San Luis ore by a combination of gravity and cyanide leach processes. The plant will operate at a nominal capacity of 400 tonnes per day.

The process flow sheet includes two-stage crushing and screening, fine ore storage, grinding and classification, gravity concentration, cyanide leaching, thickening and CCD washing of leach discharge slurry. Leached tailings will be discharged to a tailings storage facility near the process plant with cyanide solution being recycled to the process circuit. Pregnant leach solution will be clarified and deaerated prior to the injection of zinc dust to precipitate gold and silver. Precipitates will be collected in a filter press, then dried and smelted to produce doré bars for final refining offsite. The crushing and screening circuits as well as smelting section will operate on day shift only. All other process facilities will operate 24 hours a day.

The processing criteria consider:
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