The two significant silver-gold epithermal structures discovered to date on the Juanicipio property are known as the Valdecañas and Juanicipio veins. Both veins strike east-southeast and dip 35° to 70° with an average of about 58° southwest. Both display the metal zonation typical of the Fresnillo District and epithermal veins in general, of an upper precious metal “Bonanza” zone grading downwards into a deeper base metal zone. The Valdecañas structure hosts the majority of the Mineral Resources currently estimated on the property.

The vein extends beyond the Juanicipio property boundaries in both the northwest and southeast directions. It varies in true thickness from less than one metre up to 25.8 m, averaging approximately five metres. Generally, the precious metals rich zone is 400 m to 450 m in vertical extent with an additional 50 m vertical extent of base metal dominant zone. The vein structure is made up of one main vein and three parallel to subparallel smaller veins. Descriptions of the geometry, location, and grades are presented in Section 14. The various vein panels making up the overall Valdecañas vein structure are now referred to as: V1E, V1W, V2W, and HW1.

Mineralization consists of precious metal rich, banded, or brecciated quartz-pyrargyriteacanthite-polybasite-galena-sphalerite veins. The Valdecañas veins have undergone multiple mineralizing events as suggested by various stages of brecciation and quartz sealing, local rhythmic microcrystalline quartz-pyrargyrite banding, and open-space cockscomb textures and vuggy silica. The veins exhibit the characteristic metal zoning of the principal veins in the Fresnillo district, observed as a change from silver and gold rich zones at the top to increased base metals in the deeper intersections. Notably, the gold rich mineralization cuts across the silver rich zones, which in turn cut earlier base-metal dominant stages indicating complex multi-stage mineralization as is seen separately in other parts of the district.

Within 10 m to 20 m of the vein, the wall rocks are progressively and pervasively silicified and cut by quartz veinlets carrying pyrite-sphalerite-galena sulphide minerals. Alteration in the volcaniclastic/sedimentary host rock farther away from the vein is characterized by weak pyritization, moderate clay alteration, and calcite veining.

The Juanicipio Vein was discovered in 2003 by MAG prior to the discovery of the Valdecañas system, which is located 1,100 m to the north. Discovery hole JI03-01 intersected two metres averaging 630 g/t Ag and 11.4 g/t Au at a vertical depth of approximately 515 m. Thirty-five drill holes contributed to the definition of this vein and the current Mineral Resource estimate includes the Juanicipio Vein. In general, the zone averages greater than 530 g/t Ag, 4.00 g/t Au with low Pb and Zn values. The Juanicipio Vein is referred to as JV1 most statistical and modelling examinations.

The 2012 PEA considered a longhole stoping mining method with pastefill. AMC undertook site visits to other operating mines in the area to review the details of the mining methods used and the application of rock fill. The primary mining method continues to be longhole stoping, however some cost savings and production efficiencies were identified with waste rock fill over pastefill. Waste rock is now considered as the primary backfill and in the wider stopes where more than one longitudinal pass is required, cemented rock fill will be utilized.

The mine access is via twin declines to the top of the mineralization. The access route then splits into three internal ramp systems on 20 m sub-level spacing, with central accesses to the vein as well as footwall drives to the extents of the mineralization to allow placement of rock fill. Stopes 20 m high (floor to floor) are mined from the extents back to the central access (retreat) with rock fill placed within 20 m of the retreating face.

In the lower levels of the mine, the vein widens out to a maximum thickness of approximately 30 m. In these areas, the vein will be mined in two longitudinal passes with a maximum width of 15 m. The footwall stope will be taken first over the full strike length, followed by the hangingwall stope. Cemented rock fill will be used in the footwall stope to minimize fill dilution into the hangingwall stope.

The processing plant will have a nominal capacity of 4,000 tpd and consists of comminution circuit, with underground primary crushing, secondary crushing and milling on surface, followed by sequential flotation to produce a silver-rich lead concentrate, followed by a zinc concentrate and a gold-containing pyrite concentrate.

Mineralized material transport
The underground crusher will process the run- of-mine (ROM) material by using a primary jaw crusher to reduce the material from a nominal 500 mm to a 100% passing size (P100) of 178 mm (P80 of 87 mm). The mineralized material will then be transported by means of a conveyor belt discharging directly onto the mill stockpile.

Mineralized material stockpile
The main objective of the mineralized material stock pile is to maintain continuity of the operation of the processing plant and to allow blending of different mineralized material grades, if required, and a consistent sizing of material. The stockpile a ........