The deposits at Diablillos, are high sulphidation epithermal silver-gold deposits, derived from activity of hydrothermal fluids in a relatively shallow environment, often associated with fumaroles and hot springs.

Principal economic minerals include native gold, acanthite, electrum, chalcocite, covellite, bornite, and enargite/luzonite, with accessory pyrite, chalcopyrite, sphalerite, tetrahedrite/tennantite, galena, marcasite, arsenopyrite, silver sulphosalts and tellurides. Dominant gangue minerals are quartz and pyrite, occasionally with barite. Alteration is characterized by lateral and vertical zonations of silicic, advanced argillic, argillic, sericitic, and phyllitic facies. Rocks typically have a bleached appearance owing to the acidity of the mineralizing solutions. These deposits can encompass a wide range of geometries from large lower-grade bulk-minable variants to smaller, higher-grade narrow vein types.

There are a number of mesothermal and epithermal precious and base metal occurrences situated along the trend of the Diablillos Cerro Galán fault zone within the northern and central Puna, including Diablillos, Incahuasi, Cóndor Yacu, Inca Viejo, and Centenario. Many of the mineral occurrences are spatially, and probably genetically, related to small Tertiary stocks and extrusive domes that are usually hydrothermally altered with disseminated and vein-hosted lead, zinc, silver, and gold (± tin, antimony, copper, and molybdenum) mineralization (Coira et al., 1993, quoted in Wardrop, 2009).

There are seven known mineralized zones on the Diablillos property, with the Oculto zone being the most important and best explored. These mineralized zones are:
1. Oculto including the Zorro and Cerro Bayo subzones
2. Fantasma
3. Laderas
4. Pedernales including the Pedernales Sur subzone (including Truchas and Saddle showings) and Pedernales Norte subzone (including Vicuna, Corderos Suri, and Guanaco showings)
5. Cerro del Medio
6. Cerro Viejo
7. Cerro Viejo Este

Oculto is the principal deposit on the property and is the locality of the bulk of the present Mineral Resource. It is a high-sulphidation epithermal silver-gold deposit derived from remnant hot springs activity following Tertiary-age local magmatic and volcanic activity. It is evidenced at surface by a broad zone of intense acid leaching located on the flank of Cerro Bayo, although the economic mineralization does not outcrop. Host rocks at surface are hornblende porphyritic andesite which has been intruded by a dacite porphyry body (or bodies) which are hypothesized to be the thermal driver(s) for the mineralization (Tate, 2018). The andesites overlie a basement assemblage of phyllites and granitic rocks. At the contact of the andesite with the basement, there is a paleo-surface occupied by a discontinuous conglomerate unit of widely ranging thickness. Recent review of drilling results suggests that this unit appears to thicken along a trend corresponding to one of the predominant controlling structures to mineralization and that this zone is coincident with broader lateral extent of the mineralization. Tate (2018) suggests that the conglomerate filled a paleo-trough related to that structure, which later reactivated and provided a conduit for ore-forming fluids.

The deposit is strongly oxidized down to depths in the order of 300 m to 400 m below surface. In the oxide zone, precious metal mineralization consists of native gold, chlorargyrite, comparatively less common iodargyrite, and locally common bismuthinite (Stein, 2001). These minerals occur as fine grained fracture-fillings and vug linings in association with quartz, jarosite, plumbojarosite, hematite, and goethite. Other accessory minerals include alunite, barite, native sulphur, and bismoclite.

Stein (2001) reported the occurrence of a high grade zone of native gold, native silver, and acanthite with accessory chlorargyrite, iodargyrite, and jalpäite in the southwest extremity of the deposit. Gangue minerals in this zone included quartz, alunite, jarosite, and iron oxides, along with intergrowths of barite.

Hypogene mineralization comprises vein- and breccia-hosted sulphides and sulphosalts underlying the oxide zones. Primary sulphide and sulphosalt minerals include pyrite, galena, enargite, chalcopyrite, sphalerite, tennantite, and matildite. Accessory minerals include barite and alunite. Incipient supergene enrichment was observed by Stein (2001), with covellite partially replacing chalcopyrite and polybasite replacing tennantite.

The precious metal mineralization throughout the deposit occurs as extremely fine grains along fractures and in breccias or coating the inside of vugs and weathered cavities. Mineral grains are very difficult to identity in core or hand specimen, and much of the identification of these minerals was done using electron microscope or microprobe.

The Diablillos Project consists of open pit mining at the Oculto and Fantasma deposits, which combined have 18 months pre-stripping and eight years of full production.

The Project as currently designed will be an open pit mining operation consisting of two separate open pits, one at Oculto and one at Fantasma.

Mineralized material from Oculto and Fantasma will be hauled directly to the run-of-mine (ROM) stockpile. The process plant will feed material to the primary crusher from the stockpile as required using a front-end loader (FEL).

Mining is proposed to be carried out by a contractor as a conventional truck and shovel operation. Contract mining will be used rather than owner mining to accommodate variable annual material movement quantities, which requires flexibility in mobile mining equipment fleet size. This option further reduces the up front capital expenditures associated with mobile mining equipment purchases.

Mine production is scheduled to be carried out at a normal and high throughput (HTP) rate of 6,000 tpd to 7,500 tpd of mineralized material, respectively.

Stripping ratios are expected to average 4.6 over the LOM plan for the combined operation of Oculto and Fantasma.

The production plan contemplates a commissioning and ramp up period prior to full production in the second half of Year 1 with annual production thereafter of approximately 2.2 Mt of mineralized material for the LOM. All mineralized material from Fantasma is fed into the process plant during Year 1.

The processing facility has been selected as a conventional silver processing plant that incorporates crushing, grinding, agitated leaching, counter current decantation (CCD), cyanide recovery, Merrill-Crowe zinc precipitation, refining and tailings disposal. The design basis for the process plant is 6,000 tpd of mineralized material, or 2.19 Mtpa of mineralized material. The equipment has been sized to achieve this throughput with operating availabilities of 70% in the crushing circuit and 91% in the grinding and cyanidation sections.

The three-stage crushing circuit delivers crushed material to a fine ore storage bin. The crushed material is withdrawn from the bin to feed a 6.0 MW ball mill that has a centrifugal gravity recovery circuit included in the design.

The cyclones overflow will gravitate to a trash screen for the removal of tramp material. Trash screen undersize will flow by gravity to the first of 6 agitated leach tanks, each sized at approximately 14 m diameter by 14 m high and each with a working volume of 1897 m3. This will provide an approximate total residence time of 24 hours at the design pulp flowrate. Lime will be added to the circuit tanks to maintain a pH set point and cyanide solution will be added to each tank to maintain the required free cyanide levels for leaching.

Slurry will gravitate from the final leach tank and report to the CCD wash circuit. The aim of this circuit is to separate the pregnant solution produced from leaching, containing the dissolved silver and gold, from the leach residue. The circuit will consist of four 30 m diameter high-rate thickeners. The underflow produced from the thickener will be pumped from thickener to thickener before reporting to the two stage cyanide recovery thickener circuit. Thickener overflow from the CCD thickeners will gravitate from thickener No. 4 all the way to thickener No. 1, allowing for washing of the leach residue through each stage of the CCD Circuit. The overflow from CCD thickener No. 1 will gravitate to the Merrill-Crowe zinc precipitation circuit.

Overflow solution from the cyanide recovery circuit along with barren solution produced from the Merrill-Crowe zinc precipitation circuit will be combined as wash water addition to the CCD circuit. This combined solution is added to CCD thickener No. 4 and will result in an expected wash efficiency of 98%.

Underflow slurry from CCD thickener No. 4 will be pumped to the two stage cyanide recovery thickeners. This circuit operates in a similar fashion to the main CCD circuit, however, this circuit splits the final overflow solution so that part is used for washing in the main CCD circuit and part of this solution is sent to the process water tank, so the cyanide rich solution can be re-circulated back to the grinding circuit as well as the CCD circuit. The underflow from cyanide recovery thickener No. 2 will be pumped to the cyanide detoxification circuit.

Flocculant will be pumped to all of the seven thickeners in the complete circuit to aid in the settling of the leach residue in these thickeners.

The Merrill-Crowe circuit is the recovery step for the dissolved silver and gold in solution as produced from the leaching circuit and washed through the CCD circuit. The circuit utilizes the addition of zinc dust to precipitate the precious metals from solution. The circuit has been sized to operate at a solution feed rate of 800 m3 /h.