Deposits within the Peñasquito Operations are considered to be examples of breccia pipe deposits developed as a result of intrusion-related hydrothermal activity.

In addition to the deposit types already identified and exploited, there is potential for additional deposit styles within the extensive Peñasquito Operations area, including base metal skarns and porphyry-related disseminated deposits in geological settings as indicated in Figure 8-1. Exploration for these mineralization styles is ongoing.

Peñasco and Brecha Azul are funnel-shaped breccia pipes, which flare upward, and are filled with brecciated sedimentary and intrusive rocks, cut by intrusive dikes.

The larger diatreme, Peñasco, has a diameter of 900 m by 800 m immediately beneath surface alluvial cover, and diatreme breccias extend to at least 1,000 m below surface. The Brecha Azul diatreme, which lies to the southeast of Peñasco, is about 500 m in diameter immediately below alluvium, and diatreme breccias also extend to at least 1,000 m below surface. Porphyritic intrusive rocks intersected in drilling beneath the breccias may connect the pipes at depth.

The Peñasco and Brecha Azul diatremes are considered to represent breccia-pipe deposits developed as a result of Tertiary intrusion-related hydrothermal activity. Alteration, mineral zoning, porphyry intrusion breccia clasts, and dikes all suggest the diatreme-hosted deposits represent distal mineralization some distance above an underlying quartz-feldspar porphyry system.

Manto-style sulphide replacements of carbonate strata have been discovered beneath the clastic-hosted disseminated sulphide zones, and adjacent to the diatreme pipes. The mantos consist of semi-massive to massive sulphide replacements of subhorizontal limestone beds, as well as cross-cutting chimney-style, steeply-dipping, fracture and breccia zones filled with high concentrations of sulphides.

Garnet skarn-hosted polymetallic mineralization has been identified at depth between the Peñasco and Brecha Azul diatremes. The skarn has horizontal dimensions of approximately 1,000 m by 1,200 m and is open at depth.

Both deposits are centered on diatreme breccia pipes, the Peñasco diatreme at Peñasco, and the Brecha Azul diatreme at Chile Colorado. The diatremes contain and are surrounded by disseminated, veinlet and vein-hosted sulphides and sulphosalts containing silver and gold.

Mineralization consists of disseminations, veinlets and veins of various combinations of medium to coarse-grained pyrite, sphalerite, galena, and argentite (Ag2S). Sulphosalts of various compositions are also abundant in places, including bournonite (PbCuSbS3), jamesonite (PbSb2S4), tetrahedrite, polybasite ((Ag,Cu)16(Sb,As)2S11), and pyrargyrite (Ag3SbS3). Stibnite (Sb2S3), rare hessite (AgTe), chalcopyrite, and molybdenite have also been identified. Telluride minerals are the main gold-bearing phase, with electrum and native gold also being identified.

Gangue mineralogy includes calcite, sericite, and quartz, with rhodochrosite, fluorite, magnetite, hematite, garnets (grossularite-andradite) and chlorite–epidote. Carbonate is more abundant than quartz as a gangue mineral in veins and veinlets, particularly in the “crackle breccia” that occurs commonly at the diatreme margins.

Breccia-hosted mineralization is dominated by sulphide disseminations within the matrix with lesser disseminated and veinlet-controlled mineralization in clasts. All breccia types host mineralization, but the favoured host is the intrusion-clast breccia. Much of the mineralization within the Peñasco and Brecha Azul pipes lies within the intrusion-clast breccia.

All of the dike varieties may also be mineralized, and they are almost always strongly altered. Mineralization of dikes occurs as breccia matrix fillings, disseminations and minor veinlet stockworks at intrusion margins, and veinlets or veins cutting the more massive dikes. Mineralized dikes form an important ore host in the Peñasco diatreme but are not as abundant in Brecha Azul.

Open pit mining is undertaken using a conventional truck-and-shovel fleet, currently consisting of 74 Komatsu 930-960 haul trucks, five Bucyrus/Caterpillar 495 (57 m3) rope shovels, two hydraulic shovels (one Komatsu PC8000 and one PC 5500), and three Komatsu WA1200 loaders. The fleet is supported by 12 blast hole production drills, track dozers, rubber tire dozers, excavators, and graders.

With the exception of two of the haul trucks, the mining fleet is owner-operated. Maintenance of mine equipment is covered by MARC contracts.

Drilling for all materials is on 15 m benches drilled with 1.0 to 1.5 m of sub-drilling. Drill patterns range from 9.00 m x 9.00 m in overburden to 4.30 m x 5.00 m in sulphide ore. Blasting is carried out primarily with conventional ANFO explosives, supplied by an explosives contractor. Appropriate powder factors are used to match ore, waste, and overburden types.

The Peñasquito Operations consist of a heap leach gold and silver recovery facility that can process a nominal 25,000 t/d of oxide ore and a sulphide plant that processes a nominal 130,000 t/d of sulphide ore.

Oxide Ore
Run-of-mine (ROM) ore is delivered to the heap leach pile from the mine by haul trucks. Lime is added to the ore, prior to addition of the ore to the pad. Ore is placed in 10 m lifts, and leached with cyanide solution. Pregnant leach solution is clarified, filtered, and de-aerated, then treated with zinc dust to precipitate the precious metals. The precipitated metals are subsequently pressure filtered, and the filter cake smelted to produce doré.

Sulphide Ore
Run-of-mine sulphide ore is delivered to the crusher dump pocket from the mine by 290 tonne rear-dump-haul trucks. The crushing circuit is designed to process up to 148,000 tonnes per day of run-of-mine sulphide ore to 80% passing 159 millimetres. A near-pit sizing conveyor (NPSC) has since been included to support higher throughput by facilitating waste removal.

Product from the gyratory crusher discharges into a 500 t surge pocket directly below the crusher. The crusher feeds, via an apron feeder, a coarse ore stockpile that has a 91,800 t live capacity. In turn, five apron feeders reclaim ore from the coarse ore stockpile to two semi-autogenous grind (SAG) mills operating in closed circuit with pebble crusher. Each SAG mill operates with two ball mills.

The pebble crushing circuit includes two crushers (plus a spare unit) and one HPGR unit. The first crusher is fed directly with coarse ore stockpile material and the product dry screened. The oversize from the screen together with the oversize from the SAG trommel screen constitutes the feed to the second crusher. The crushed product together with the fines produced by the first crusher are discharged to a bin. This crushed product can be fed to the HPGR or directly to the SAG mills.

Each grinding circuit reduces the crushed ore from a P80 passing 159 mm size to P80 passing 125 µm. The SAG trommel screen undersize (minus 19 mm material) discharges to a common sump. Secondary grinding is performed in four ball mills, operating in closed circuit with cyclones. Ball mill discharge is combined with SAG mill trommel screen undersize and the combined slurry is pumped to the primary cyclone clusters. Cyclone underflow reports back to the ball mills. Cyclone overflow (final grinding circuit product) flows by gravity to the lead flotation circuit.

The lead rougher flotation consists of six rows of rougher flotation machines in parallel, each row consisting of five self-aspirating cells. Lead rougher concentrate is pumped to the lead regrind mill circuit, or bypassed directly to the lead cleaner conditioning tank. Tailings from the lead rougher cells flows by gravity to the zinc rougher conditioner tanks. This material is conditioned with reagents to activate the sphalerite and associated precious metals. Rougher lead concentrate is reground in closed circuit with cyclones. Product at a P80 value of 30–40 µm is cleaned in a three-stage cleaner circuit. Reagents are added into the rougher flotation circuit, and to the cleaner flotation cells on an asrequired basis.

Tailings from the lead circuit flow by gravity to the zinc rougher conditioner tanks. One conditioner tank is installed for each bank of zinc rougher flotation cells. The conditioner tanks provide retention to facilitate pH adjustment with lime and activation of the sphalerite by copper sulphate addition. Sodium isopropyl xanthate (SIPX) is added to collect the zinc associated with activated sphalerite. Frother is added as required.

The slurry in the conditioners overflow to the zinc rougher flotation circuit, which consists of six banks of six tank-type, self-aerating, rougher flotation cells. Tailings from all rows of zinc rougher cells are combined in a tailings box and flow by gravity to a tailings pond. The rougher zinc concentrate is reground in vertimills operating in closed circuit with cyclones. Product at a P80 of 30–40 µm is cleaned in a three-stage cleaner circuit. Reagents are added into the cleaner flotation cells as required.

Final lead and zinc concentrates are thickened, pressure filtered, and trucked to inland smelters or to ports for overseas shipment.

The Pyrite Leach Project started production in November 2018 and is expected to recover approximately 35% of the gold and 42% of the silver currently reporting to the tailings and is expected to add production of over 1 million ounces of gold and 45 million ounces of silver over the current life of the mine. The PLP plant processes the existing plant tails, feeding a sequential flotation and leach circuit with precious metals recovered through a Merrill Crowe process, producing doré as the final product. Tails from the new plant will report to the existing tailings storage facility. As the plant is ramped up to achieve design recovery, there will be ongoing optimization of the circuit chemistry and regrind performance.

The Carbon Pre-flotation circuit “CPP”, which is integral to the performance of the PLP and existing plant, was commissioned in the second quarter 2018 as planned and the circuit has now treated six million tonnes of high-carbon ore and is now operating and exceeding initial performance expectations. The completion of the CPP de-risks not only stockpile material, it also enhances flexibility to sequence ores and has the capability to process the complex organic carbon ore types remaining in the reserves. CPP achieved commercial production on October 1, 2018.

The CPP circuit consists of three stages of flotation to remove organic carbon from the cyclone overflow prior to the existing lead flotation circuit.