Mineralization is hosted in two veins with a general strike of N60W, dipping between 45 to 60 degrees southwest. The host rock of the veins is comprised of the Zacatecas formation, a mid to late Triassic turbidite sequence, consisting of beds of dark grey, green and grayish-green shale, sandstone, conglomerate and siltstone. The veins extend over a length of 2.5 to 3.0 kilometers, and to a depth of at least 150 to 200 meters, as determined from available drilling data (Rodriguez et al., 1987). Each of the Rosario I and Rosario II veins vary in width from 0.4 to 2.5 meters. Mineralization appears to have occurred in three stages, with the third stage precipitating the silver bearing minerals. This deposit has been described as a mesothermal vein system based on temperature (195 to 338°C), although mineralization is typical of other deposits in Mexico which are described as epithermal. Abundant sulfides, sphalerite pyrite and galena with subordinate amounts of chalcopyrite, arsenopyrite and hematite, can be found within the veins. Additional minerals identified through electron microscopy include freibergite, tetrahedrite, boulangerite, pyrargyrite, argentite, stromeyerite, and diaphorite (Rodriguez et al., 1987).

The Rosario Veins at the Rosario Project are vein filled faults defined as mesothermal within epithermal limits.

Based on fluid inclusion work in quartz and calcite, Palacios and Arriaga (1994) postulated that the mineralization in the Rosario ........

The Rosario Project currently includes the Rosario Mine and the Membrillo Prospect. The Company suspended operations at the Cinco Estrellas property in late 2017.

At the Membrillo Prospect the Company completed access to Levels 1, 2 and 3 on the main Membrillo vein as well as on the San Rafael vein.

Current primary source of mill feed is the Membrillo Prospect, a mesothermal, low sulphidation polymetallic vein system of Ag, Au, Zn and Pb that carries to surface.

Management remains focussed on increasing tonnes of mineralized material processed at the milling facility with the objective of reaching 400 tpd before the end of Q3 2020 with improved head grades. Additional mining equipment (two sccoptrams) was procured for the project in the second quarter of 2020 which should result in an increase of production towards the target amount.

Management is continuing to seek cost savings measures and on the technical side has changed to horizontal mining on the veins from previously mining the veins vertically with a view to realizing better dilution control.

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