Cerro Vanguardia is located in the core of the 60,000km2 Deseado Massif, one of the most extensive volcanic complexes in southern Patagonia, Argentina. The Deseado Massif is an extensive rhyolite province of Middle to Upper Jurassic age deposited over Paleozoic low-grade metamorphic basement rocks. These rocks are exposed in erosional windows through overlying Cretaceous sediments and Tertiary to Quaternary basalts. The orebodies comprise a series of epithermal vein deposits (low-sulphidation deposit) containing gold and large quantities of silver, produced as a by-product.

The mineralisation is concentrated in steeply dipping quartz veins that cut the flat-lying ignimbrites and volcaniclastic rocks. The Cerro Vanguardia district contains around 100 gold and silver-bearing epithermal veins for a cumulative exposed vein strike extension of more than 240km. Fifty-seven veins are currently known to contain economic gold and silver mineralisation.

All veins at Cerro Vanguardia consist mainly of quartz and adularia containing minor electrum, native gold, silver sulphides and native silver as fine-grained disseminations. Vein textures are mainly characterised by colloform-crustiform banding, pseudomorphic quartzlattice textures, massive-to-vuggy quartz veins and vein breccias. 40Ar/39Ar dating on adularia from the Osvaldo Diez vein yielded ages of 153.4 ±1.46Ma, 152.9 ±2.75Ma and 155.1 ±3.0Ma, while the age of the thick sequence of ignimbrites hosting the veins has been dated between 166 to 150Ma.

The Middle to Upper Jurassic ignimbrites and volcanic rocks from Chon Aike formation hosts a low-sulphidation epithermal type gold and silver deposit. The thickness of the ignimbrite sequence is estimated to have exceeded 1,000m, but some lateral variations have been identified across the district. Epithermal Au-Ag bearing structures cut across all Jurassic rocks in the stratigraphy. The two main ignimbrite units, Masiva-Lajosa and Granosa, host the majority of mineralised veins. The Masiva-Lajosa ignimbrite occurs at the top of the sequence whilst the Granosa ignimbrite occurs towards the bottom. These two ignimbrites are separated by two thinner, polymictic ignimbrite units (Brechosa and Brechosa Base) and a sequence of stratified crystal to ash-rich tuffs (Estratificada unit). The base of the sequence is a mixed unit of stratified ignimbrite intercalated with fine-grained tuffs (Estratificada Inferior ignimbrite).

Cerro Vanguardia deposit is a series of veins and mined using open pit techniques. There are around 15 open pits with variable contents of gold, silver and base metals.

Open pit mines employed conventional truck and shovel mining method with a double bench height of 20m and contributes 60% of the ore. Open pit mining is distributed between multiple operating pits, typically five to ten at any one time, depending on the plant feed requirements.

Underground mines are utilizing longhole stoping. There are four underground mines that are operated at the same time, located on the Osvaldo 8, Cuncuna, Serena and Zorro veins. Three more are in development (Liliana, Osvaldo 7 and Loma del Muerto CB6). Underground mining represents around 40% of total production, a percentage that will increase in the coming years.

The ore that arrives from the mine to the profit plant is reduced in size through three crushing stages: a primary jaw crusher, a secondary cone crusher and a tertiary cone crusher, respectively, in this way a 9 mm product is obtained to collect in the dome.

Under an aluminum dome of 70 m in diameter by 21 m in height, is the system of mixing, collecting and recovery of crushed ore. The dome can store between 14 and 15 thousand tons. This serves as a lung to feed the mill when there are maintenance tasks in the crushing area. Once deposited the ore enters through a hopper and is transported by a belt to the ball mill.

Milling
At this stage water is added to the mineral to obtain a pulp and inside the mill begins grinding. Three-inch steel balls collide with the ore at high speed and by cataract effect grinding occurs. The ball mill works in closed circuit with a battery of cyclones.

Fresh ore, process solution and reagents are added to the mill. Among the reagents are lime and cyanide. In this way the process of leaching gold and silver begins.

The process solution transports the leached metals and finely ground ore to the grinding thickener. In this thicker the rich solution in the overflow is obtained, which feeds the clarification cones and a pulp with a high percentage of solid by the underflow, which feeds the leaching circuit.

The underflow of the grinding thickener feeds the stirring leach ponds. Stirring leaching is performed in six tanks equipped with double agitators with shaft aeration and diffuser at the end. The tanks of 900 m3 capacity each, are equipped with baffles and feeding drawers. Pipes are available to adjust the concentration of cyanide in the leach tanks.

The metallurgical plant has a daily capacity estimated at 3,500tpd (1.2Mtpa), with gold and silver grade of around 4.25g/t and 120g/t, respectively. The plant comprises the following stages: crushing, milling, conventional leaching in tanks, counter current decant system in thickeners (CCD circuit), a CIL process, acid wash, elution, conventional Merrill Crowe process to recover gold and silver with metallic zinc, and a cyanide recovery plant (Cyanisorb).

Additional to the processing plant there is a heap leach pad, with an annual capacity of 1.5Mtpa with gold and silver grade of around 0.7g/t and 20g/t, respectively. The pregnant solution from this process goes directly to the CCD circuit in the process plant and to the Merrill Crowe process for gold and silver recovery.

The process involves the following steps:

High grade ore:
• Three stages of crushing;
• Stockpiling and blending;
• Grinding in a ball mill.

Low grade ore: