The La Colorada deposit is an atypical gold-silver deposit located in the centre of Sonora. It is not similar to the typical epithermal systems of the SMO with a marked northwest control and lesser northeast structures.

Fluid inclusion studies by Albinson (1997) indicated mineralizing temperatures for the deposit were mostly in the high 200°C to mid-300°C range and the system was a relatively hot epithermal environment. Albinson classified the veining at La Colorada as either deep epithermal or high level magmatic-mesothermal in origin. He went on to state that the system was likely related to shallow level plutons emplaced above a copper porphyry system. His studies also identified two styles of mineralization. The first was the main structurally-controlled primary hydrothermal quartz vein system with associated gold-silver and base metal mineralization. The second represented an overprinting supergene enrichment of gold. This younger gold event is hosted by cross cutting fractures with associated iron oxides. In the samples studied, he identified high-grade zones of coarse gold with oxides that filled cross cutting vugs and fractures. Albinson theorized that the gold was leached out of adjacent primary veins.

The La Colorada vein system is post-intrusive and post-skarn in age and may be termed either deep epithermal or high-level magmatic-mesothermal in origin and developed above a copper porphyry system.

The significant mineralized occurrences include the La Colorada/Gran Central, El Crestón, and Veta Madre deposits.

La Colorada/Gran Central Deposit
Gran Central is geologically similar to El Crestón-Minas Prietas, and also composed of quartz veins and stockworks localized within the Gran Central Fault system. Mineralization is mainly hosted in a diorite stock which contains roof pendants of siltstone and lesser calc-silicate hornfels. Quartz feldspar porphyry dikes up to 2 m in width cut the diorite. The youngest rocks are a few pre-mineral mafic dikes up to 2 m in thickness. At the eastern end of the deposit, the diorite is in fault contact with and covered by andesite rocks. The andesite is less altered and oxidized than the underlying diorite and unmineralized (Lewis, 1995). The historical underground workings extend to a depth of 300 m. The east-west trending Gran Central Fault is the main controlling structure and has a north dip averaging 50°. The Gran Central Fault consists of several subparallel splays, where quartz veins, stockworks and breccia zones are often associated with claychlorite gouge. Alteration minerals are similar to those found at El Crestón-Minas Prietas; however, calcite is a common gangue mineral and siderite veins and local amethyst are present (Lewis, 1995). Footwall rocks tend to be more heavily altered than hanging wall rocks. Fine native gold is present in the deposit. Sulphide minerals range between 1% and 3% by volume and are distributed within the unoxidized portions of the deposit. Sulphides include galena, sphalerite, lesser chalcopyrite, minor tetrahedrite, and traces of chalcocite and covellite.

Gold-bearing quartz veins and stockworks within the La Colorada vein system are hosted in an east-west-striking fault zone with a north dip averaging 45°. Veining is hosted by rhyolite porphyry and diorite rocks and is within the same dioritic stock which hosts the Gran Central deposit. The zone averages about 20 m thick. Lewis (1995) states that according to historical records, mineralization is terminated at a depth of approximately 200 m by a flat fault, below which nonmineralized granite is present. Mineralogy and alteration are similar to El Crestón-Minas Prietas. Mineralization is approximately 450 m along strike, 200 m wide, and 150 m in vertical extent.

The northeast striking quartz breccia/vein/stockwork zones are the main mineralization control in this deposit.

El Crestón
The El Crestón and Minas Prietas veins constitute the largest vein system on the La Colorada Project and were originally mined as separate deposits. These vein zones are now recognized as being part of the same mineralized system and are being developed as one mine. El Crestón refers to the central open pit area, while Minas Prietas is located within the eastern portion of the open pit. Mineralization is approximately 1,000 m along strike, 250 m wide, and 250 m in vertical extent.

The veins generally strike east to east-northeast, dipping an average of 75° N (Lewis, 1995). The veins have well-defined contacts and below the 100 m level are simple with few spurs and parallel veins. Typically, the best metal grades are found where the veins are thickest. Although the veins represent distinct mineralized zones, they coalesce and bifurcate in a subparallel series of principal veins and associated stockworks. Pre-mineral faulting created open fractures that were later filled by the vein systems. Minor post-mineral fault offsets of a few metres are common.

Lithologies in the El Crestón-Minas Prietas deposit include siltstone, shale, and chert of the Paleozoic Mine Sequence; diorite, monzonite and quartz feldspar porphyry of the intrusive suite; hornfels and skarn derived from the sedimentary sequence; and andesite (Lewis, 1995).

Alteration styles to varying degrees include hematization, the formation of manganese oxides, and silicification. Other reported alteration products include argillization, potassic alteration, sericitization, and chlorite alteration. Deep red hematite is a prominent and obvious feature of the mineralized system. Manganese oxides are reportedly associated with some of the higher gold values. Structurally, the Colorada Sur Fault is the main controlling feature. It has a variable easterly strike which has an average azimuth of 060° and dips vertically to steeply north.

Veta Madre
Veta Madre is located 1.5 km east of the El Crestón-Minas Prietas open pit and consists of a zone of extensive alteration associated with the Colorada Sureste Fault. Rock types include siltstone, diorite, monzonite, granite, rhyolite feldspar porphyry, and dacite. Argonaut drill programs have determined that a down-faulted, and generally higher-grade, portion of the vein system continues a significant distance to the west. Mineralization is approximately 500 m along strike, 200 m wide, and 200 m in vertical extent.

Production at La Colorada has been ongoing since 2012 with the majority of ore being sourced from the Gran Central open pit. Mining ceased in Gran Central in 2018 and production is sourced from the El Creston and Veta Madre open pits.

Pit Design
The open pit designs were created by Argonaut regional staff in Hermosillo and transferred to La Colorada for implementation by both operations and mine contractors. Mine design is comprised of four mine phases. The first was mined and finished in 2019 and Phase 2 was finished in 2020. Phase 3 is actively being mined and Phase 4 is the final layback. Veta Madre consists of four phases for eventual extraction and Phase 1 is actively being mined. Phases 2 and 3 will extend the open pit to the west and Phase 4 will be the final layback.

For the El Crestón and Veta Madre pits, the ramp width was sized at 25 m (truck factor of 3.5) which can safely support Cat 777 (or equivalent) sized mining trucks. One-way access of 15 m was applied at the pit bottom after stripping requirements were met.

El Crestón Pit Parameters:
Inter-ramp Slope: 51°, 41°, 49°, 46º;
Bench Face Slope: 67°, 65°, 70°;
Berm Width: min.5 m max.7 m;
Bench Mining Height: 5 m;
Bench Height: 15 m;
Ramp Width: 2 Ways 25 m;
Ramp Width: 1 Way 15 m;
Ramp Gradient: 10%.

Veta Madre Pit Parameters:
Inter-ramp Slope: 46º, 48°, 51º, 53º;
Bench Face Slope: 67°;
Berm Width: 7 m;
Bench Mining Height: 5 m;
Bench Height: 15 m;
Ramp Width: 2 Ways 25 m;
Ramp Width: 1 Way 12 m;
Ramp Gradient: 10%.

Phase Design
Phase designs for both pits are largely driven by the effective mining widths and its influence on access to the Mineral Reserves. The same design parameters used in the final pit design were incorporated into the phase designs.

The two phases are generally two to three ramp widths wide and the targeted minimum mining width is 25 m. Up to two benches per month were included in the mine production schedule. Small mining widths combined with aggressive bench sinking rates add additional risk to production targets that must be met by the contractor.

Each phase has a ramp connecting to the existing infrastructure. The ramps were used in the El Crestón pit design to act as catch benches in the North-East pit wall.

The Veta Madre phase design is comprised of four phases. Phase 1 is a small starter pit, Phase 2 opens up the deposit along strike and Phases 3 and 4 focus on the south-west portion of the deposit at depth.

The open pit designs for El Crestón and Veta Madre defined approximately 20.1 Mt of ore with an average grade of 0.56 g/t Au and average strip ratio of 5.8:1 (waste:ore). At an average 4.2 Mt/year production rate, the estimated mine life is about seven years (including two years of prestripping). The production schedule targets maximum total mine tonnage of 27 Mt/year.

The total in situ gold ounces placed on the leach pads were targeted at 180 koz Au/year for 2022-2024 after which point mining at both El Crestón and Veta Madre will be at the pit bottom allowing for 162 koz Au to be placed in 2026 and 2027. The total mining rate between the two open pits reached a maximum of 75 kt/d.

Waste Rock Storage Facilities There are three major waste rock storage facilities (WRSF) for La Colorada. The Gran Central Infill WRSF stores the majority of the El Crestón waste while the Veta Madre Norte WRSF will take the majority of waste material from Veta Madre. The El Crestón WRSF will also receive waste from El Crestón and Veta Madre. And the Veta Madre South WRSF will store waste from Veta Madre. The WRSF designs are sufficient for disposal of the waste material defined in the La Colorada LOM plan.

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La Colorada is an open pit mine and heap leach operation using a multiple-lift, single-use leach pad. Ore is crushed to P80 3/8 in (9.5 mm) at 12,000 t/d and conveyed by overland conveyor to a mobile conveyor stacking system on the leach pad where the ore is stacked in 10 m lifts. The stacked ore is leached for 90 days with dilute sodium cyanide solution and the resulting pregnant solution is processed through a 750 m3/hr gravity-cascade carbon adsorption circuit to extract gold and silver. The loaded carbon is acid washed and stripped in 5 t batches by pressure-Zadra stripping and electro-winning. Carbon is regenerated by rotary kiln every third pass through the circuit. Electro-winning sludge is dried and smelted onsite into doré bars for shipment.

Heap Leaching
Leach pad capacity is approximately 4.6 Mt. Construction of a new leach pad extension (Pad 4C) is planned to start during 2022 which will provide approximately 4 Mt of additional capacity.

The heap ........