The Caballo Blanco property and Almaden Minerals neighboring El Cobre property includes at least two distinct deposit types, defined as high-sulphidation epithermal gold and porphyry copper gold respectively.

The Caballo Blanco property lies at the eastern end of the Trans Mexican Volcanic Belt and is underlain by sub-aerial basalts, andesites and diorite dykes of Miocene age that are in turn covered by a sequence of felsic quartz tuffs, andesitic ‘dome’ complexes, volcaniclastics and younger intrusive dacitic plugs. Capping the volcanic package are Pliocene alkaline basalt flows that are commonly well preserved as small flat highland plateaus.

At least two large areas of epithermal precious metal occur within the current Caballo Blanco property, referred to as the Northern Zone and Highway Zone. Mineralization is confined to altered varieties of upper Miocene andesitic domes and dacitic intrusives.

In the Northern Zone and Highway Zone, gold mineralization is associated with vuggy silica breccia surrounded by large and distinct haloes of various mixtures of clay alteration including alunite, dickite, and pyrophylite. The elongate and silicified gold rich mineralization at La Paila likely formed from fluid rising along a north trending fault structure well above a deeper intrusive ‘heat source’. It is interesting that similar silica and clay alteration zones and or soil anomalies have been recognized at La Cruz, Red Valley and Highway Zone, all of which lie along a north-south linear trend greater than nine kilometers in length.

It is proposed that the La Paila deposit is amenable to be developed as an open pit mine. Mining of the deposit is planned to produce a total of 49.3 million tonnes (Mt) of heap leach feed and 81.8 Mt of waste (1.7:1 overall strip ratio) over a seven and a half year mine operating life. The current life of mine (LOM) plan focuses on achieving consistent heap leach feed production rates, mining of higher grade material early in schedule, and balancing grade and strip ratios.

The mining sequence was divided into a number of stages designed to maximize grade, reduce pre-stripping requirements in the early years and maintain the heap leach at full production capacity.

The open pit mining activities for the Caballo Blanco pit were assumed to be primarily undertaken by a mining contractor as the basis for this preliminary economic assessment. An operating bench of 10 meters was assumed for the preliminary mine planning.

The fleet has an estimated maximum capacity of 70,000 t/d total material, which will be sufficient for the life-of-mine (“LOM”) plan.

Two hundred and fifty millimeter diameter blast hole drills are planned to perform the majority of the production drilling in the mine (both mineralized and waste rock), with the 165 millimeter diameter hydraulic drill to be used for secondary blasting requirements and may be used on the tighter spaced patterns required for pit development blasts. The main loading and haulage fleet is planned to consist of 90 tonne haul trucks, loaded primarily with the diesel-powered 15 m3 hydraulic front shovels or a12 m3 wheel loader, depending on pit conditions.

As pit conditions dictate, the D10-class dozers are planned to rip and push material to the excavators, as well as maintaining the waste dumps and heap leach pad.

The open pit work schedule is based on two twelve hour shifts per day, seven days per week, 365 days per year.

The crushing system is fed from 40 tonne end-dump haul trucks bringing run-ofmine (ROM) material from the pit.

ROM is fed to the crushing plant by end-dumping material directly into a dump hopper or by reclaiming material to the dump hopper from a ROM crusher feed stockpile. The dump hopper is equipped with a belt feeder discharging into a vibrating grizzly screen fitted out with 150 mm gratings.

Screen oversize discharges to a primary jaw crusher with a closed-side setting of 125 mm. Crushed particles are combined with the grizzly screen undersize forming a coarse product stream. Eighty percent of these particles will pass through the primary system at minus 140 mm, or P80 140 mm. The coarse product is moved to the next
stage of crushing via conveyor belt.

The conveyor belt moves coarse material from the primary crusher to a coarse ore storage bin which feeds the secondary crusher circuit. Coarse material is drawn from the bin by an apron feeder ........