Known mineralization within the La Fortuna Project area is spatially associated with calc-alkaline intrusions, with different zones exhibiting a combination of geological characteristics and gold-silver grades of both porphyry and epithermal mineralization styles. Collectively the zones at La Fortuna may be best characterized as intrusion- related ‘transitional’ deposits. They consist mainly of a hydrothermally altered breccia “pipe”, tabular in shape, similar in nature to other quartz-sulphide gold ± copper ± silver epithermal breccia deposits.

The Project area hosts numerous historic adits, and gold-silver showings including the historic La Fortuna Mine (and extensions) and the Ramada, PN, and Cerro Pelon zones to name a few.

Mineralization in the La Fortuna Mine area appears to be spatially associated with a series of parallel fault structures (approximately 1.5–2 km apart) and related to tourmalinized quartz monzonite breccia bodies which are located along the periphery or flanks of a north-northwest striking, west dipping, tabular quartz monzonite intrusive that appears to be approximately 60 m wide and forms a prominent topographic ridge prominent in the mine area. These fault structures and tourmaline breccia bodies have been the source of significant historical mining activity within the Project area.

La Fortuna Mine
The La Fortuna deposit is hosted within a tabular mineralized body that is up to 60 m thick and dips 30° to the west. The lower part of the body rests on a healed breccia base while the upper part consists of quartz stringers and veinlets extending up into the hanging wall.

La Fortuna hosts gold, silver and copper mineralization which occurs as disseminations, stockwork veinlets and fracture fillings. It is noteworthy that the degree of mineralization is directly related to the intensity of brecciation or fracturing and the amount of sulphides (pyrite). Mineralization remains open at depth and along strike. Similar style mineralization exists at surface approximately 400–500 m south of the current resource and can be traced along strike for at least 200 m.

Photomicrograph studies of mineral concentrate indicate gold and silver grains and minerals are present along the grain boundaries of the chalcopyrite and pyrite. Disseminated pyrite within the altered and unaltered wall rocks appears to be associated with some precious metal values. Significant values are found with the quartz-sericite-pyrite-chalcopyrite±tourmaline stockworks and the grades are dependent on the intensity of the fracturing. Thin limonite coatings are common on sulphides exposed by earlier mining. Limonite, hematite and malachite plus azurite occur occasionally within the poorly defined oxide zones.

Ramada Zone
The Ramada Zone lies on a parallel fault structure approximately 2 km northeast of the La Fortuna Mine with a strike length that can be traced at surface for over 600 m. Two groups of showings comprise the Ramada Zone:
• A southern group of showings is mostly covered with overburden. However, a 7 m length of quartz vein is exposed which is 3.3 m wide. Samples taken by Fernando Gold across the vein returned assays of 18 g/t Au and 176 g/t Ag over a width of 3.3 m. Further south the vein is exposed in a creek bed and a sample 3.7 m wide returned results of 4.33 g/t Au and 105 g/t Ag. This site also has a small caved adit and may be the location of two core holes drilled by CRM, which had intercepts of 2.2 m at 5.49 g/t Au, 204.8 g/t Ag and 3.3 m at 2.35 g/t Au and 17.6 g/t Ag.
• The northern group of showings consist of a series of small veins which so far have only returned anomalous gold values.

PN Zone
The PN Zone structure is located approximately 1.5 km northeast of the Ramada Zone and can be traced on surface for approximately 1.5 km. The structure host numerous historic mine workings like La Plomosa, Santa Fe, Guadalupe, Higuerita and Buena Vista. Sampling from this area returned gold grades ranging from 1 to 10 g/t Au and 50 to 400 g/t Ag.

Cerro Pelon Zone
The Cerro Pelon Zone (previously Los Cajones) is located to the south of the La Fortuna Mine. The zone was the subject of historical geochemical sampling by the CRM which outlined a large area of “anomalous” gold approximately 1,500 m long and 200–500 m wide. Gold assays included sample values as high as 10.1 g/t.

Other Zones
There are numerous other zones on the Property which have had various names over the years. These include:
• El Toro Zone – The El Toro prospects are located about 3.5 km west-northwest of the old San Fernando plant site. Some pyrite, chalcopyrite and copper carbonates are present on the dump of the old mine workings and in a caved adit. The limonitic zone is reportedly 150 m wide and 700 m in length. Sampling by CRM showed a 1 m sample assaying 28.4 g/t Au and 283 g/t Ag. Another sample averaged 4.8 g/t Au and 67.2 g/t Ag over a 4 m length. A dump sample assayed 3.6 g/t Au and over 50 g/t Ag.
• La Tocaya Zone – The La Tocaya Zone approximately 200 m east of the La Fortuna Mine’s Level #2 Eastern Portal. Strong sulphides occur adjacent to a major northwest-trending fault which includes trace to 1% pyrite, chalcopyrite, and malachite. The alteration zone is approximately 15–20 m wide and 60–70 m long but steep topography inhibits exact measurement. The La Tocaya Zone appears to be a parallel and separate fault related zone from the main La Fortuna Zone.
• Meloncita East Zone – Meloncita East is located approximately 600 m south-southwest of the La Fortuna Mine. A geological mapping and sampling program outlined an alteration zone with highly anomalous gold values extending from the El Fuego zone of the La Fortuna mine area. The alteration and mineralization found at the Meloncita East zone is very similar to the alteration and mineralization found at the La Fortuna mine main surface showing. It is thought that the two zones are in fact the same zone although the exact surface extension of the Meloncita East Zone, to the north, can only be assumed since extensive overburden cover is present. Faulting is assumed to play a significant role in offsetting the zone. The Meloncita East Zone consists of an alteration zone approximately 20–40 m wide extending approximately 700 m north.
• La Cantarana Zone – La Cantarana lies 1.9 km southwest of the La Fortuna mine and 500 m southwest of the Meloncita West Zone. Historical rock sampling returned anomalous values of up to 6 g/t Au over an area covering approximately 300 m x 50 m.

Mineralization at La Fortuna extends close to surface and is amenable to conventional open pit methods utilizing front-end loaders and trucks. Pit bench heights are assumed to be 5 m in order to provide good ore/waste selectivity, although the use of larger bench heights in zones consisting predominantly of waste should be considered as part of future optimization studies.

Overall average pit slopes with the benches/ramps in place are approximately 43° for three sides and 41° overall for the north wall. Rock competency is reasonable and higher pit slopes may be considered once the appropriate geotechnical information is available.

Mineralized and waste material will be hauled using 25-t trucks approximately 500 m (maximum) to the mineralized stockpile and waste dump locations near the mine. Crushed stockpile material is then transported to the plant processing facilities located at a distance of less than 1.5 km from the mine.

The 2016/2017 testwork suggested the issue of elevated cyanide consumption (due to the presence of copper) and low silver recovery (due to the silver occurring mainly as sulphides and sulphosalts) could be better addressed by flotation of the gravity tails and sale of the copper/silver/gold concentrate. Based on the successful results of this testwork program, a proposed flowsheet is shown in the Process Description hereafter.

This flowsheet has assumed the potential to cyanide leach the flotation tail; however, this option is currently not likely to be economic as it contains less than 5% of the gold. This decision can be revisited in the future should the project resources expand and the economics surrounding the additional cyanidation stages are positive.

Process Description

Crushing and Stockpiling
Portable crushing and screening equipment will be utilized at the mine site to process approximately 1,200 t daily. Crushing operations are planned as a two-stage circuit with a screen to separate the final product size material for grinding.

Crushing will be performed on a nominal six days per week schedule. Coarse ore and fine (crushed) ore stockpiles are utilized to separate the mining and milling operation.

Run of mine (ROM) material is trucked to the crushing plant and dumped into stockpiles located near the crushing equipment. The two-stage crushing reduces the rock from a maximum feed size of 400 mm down to 80% passing 18 mm. The crushed material is trucked to two fine (crushed) ore stockpiles feeding to each mill.

An external contractor will supply and operate the crushing equipment as well as the transfer of crushed coarse material to the stockpiles located at the mill site. All crushing and transfer equipment will be portable in nature and independently powered via diesel drives.

Process Plant
Based on the metallurgical testwork completed on samples of the La Fortuna mineralization, the process plant for the recovery of gold, silver and copper concentrates includes the following basic stages:

1) Single-stage primary grinding with ball mills to produce material of 80% passing 300 microns.

2) Production of a gold concentrate via the use of centrifugal gravity concentrators incorporated into the primary grinding circuit.

3) Bulk flotation on the gravity concentrator tails to produce a sulphide/gold bulk concentrate.

4) Regrinding of the bulk concentrate and cleaner flotation to produce a copper/silver concentrate for sale.

5) Production of additional gravity gold concentrate via the use of centrifugal gravity concentrators incorporated into the regrinding circuit.

6) Thickening of the bulk flotation tailings for filtration and containment at site.

7) Cyanide leaching of the gravity concentrates to extract the gold/silver.

8) Recovery of gold/silver from leach solutions to produce a concentrate (on carbon) for shipment for final gold/silver production.

9) Treatment of a “bleed” stream from the solution not recycled to leaching to destroy any residual cyanide prior to its disposal to tailings.

The processing plant produces two products:

- A high-grade gravity gold concentrate (~5,000 g/t) with 45% of the gold in the plant feed reporting to the gold concentrate.

- A copper concentrate with gold and silver credits. 90% of the copper in the plant feed is recovered in the copper concentrate. As well, 85% of the silver and 45% of the gold reports to the copper concentrate. The grade of the copper concentrate is 18% copper, and an average of 122.2 g of gold per tonne and 1,255 g of silver per tonne.