The Juanicipio deposit consists of two main vein systems, the Valdecañas vein system and the Juanicipio vein, which are significant silver-gold epithermal structures. The Valdecañas vein system consists of five veins (V1E, V1W, HW1, VANT, and V2W) and the Juanicipio vein (VJUA). Both systems strike eastsoutheast and dip 35° to 70° with an average dip of about 58° southwest. The Valdecañas vein system displays the metal zonation typical of the Fresnillo District and epithermal veins in general, of an upper precious metal zone (Bonanza Zone) grading downwards into a deeper base metal zone (Deep Zone). There is significant evidence for a repeat of this zonation in the deeper reaches, perhaps reflecting “stacked” boiling levels (Buchanan, 1981). The Valdecañas structure hosts the majority of the Mineral Resources currently estimated on the Property.

The Juanicipio vein is located some 1,100 m to the south of the Valdecañas vein. Thirty-five drillholes contribute to the definition of this vein. Overall, Juanicipio is a much thinner vein and appears to have a higher gold content; however, this interpretation is based on a limited number of overall samples. Mineralization styles and host rocks are the same as those for Valdecañas.

The Valdecañas vein system has undergone multiple mineralizing events as suggested by various stages of brecciation and quartz sealing, local rhythmic microcrystalline quartz-pyrargyrite-acanthite banding, and open-space cocks-comb textures and vuggy silica. The vein system exhibits 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 (Bonanza Zone) to increased lead and zinc in the deeper reaches (Deep Zone), with copper coming in at the deepest levels.

The Valdecañas vein system has undergone multiple mineralizing events as suggested by various stages of brecciation and quartz sealing, local rhythmic microcrystalline quartz-pyrargyrite-acanthite banding, and open-space cocks-comb textures and vuggy silica. The vein system exhibits 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 (Bonanza Zone) to increased lead and zinc in the deeper reaches (Deep Zone), with copper coming in at the deepest levels.

The primary mining is longhole stoping, wich production rate of 4,000 tpd. Some cost savings and production efficiencies have been identified with the use of waste rock fill, which is now considered as the primary backfill; in the wider stopes where more than one longitudinal pass is required, cemented rock fill will be utilized.

The proposed mining method employs zone access via three internal ramps on 20 m sub-levels, as well as footwall access 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 (on retreat) with rock fill placed within 20 m of the blasting face.

In the lower levels of the vein, 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 prevent waste entering the hanging wall stope.

Truck haulage, shaft hoisting, and conveying have been considered for transferring mineralized rock and waste from the mine workings to surface. All waste not placed directly in stopes will be trucked to surface via twin access declines, where it will be stockpiled and later used for backfilling stopes as they are mined out. In early mining, mineralized rock from development and stoping will be trucked to a rock pass feeding the underground crusher. The crusher station is located on 1950 RL, from where the mineralized rock will be transferred to surface via a main conveyor (base at 1940 RL). The decline portal for the conveyor is near the projected processing plant location.

An underground winze (780 m in length) will be sunk in the hangingwall of the mineralization. The winze is planned to eventually hoist (after Year 8) mineralized rock from the loading station on 1300 RL to the top of the shaft on 2040 RL. Mineralized rock is transferred directly from the skips to the decline conveyor via a rock pass and loading station.

It is envisaged that mining will be carried out using modern trackless mining equipment. The proposed mine ventilation circuit will include a number of ventilation raises, raise-bored from surface.

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 acts as a buffer to any delays experienced in underground production. The stockpile will have a live capacity for two days of mill operation (8,000 t). From the stockpile, the mineralized material is delivered by a frontend loader (FEL) onto the conveyor leading to the semi-autogenous grinding (SAG) mill via a vibrating feeder.

Grinding and classification
The main objective of grinding and classification is to liberate the valuable minerals in the mineralized material by reducing the material size and classifying it to reach a final product size (P80) of 60 microns. This is the minimum size required to generate the metal recoveries determined during metallurgical test work. An automated process control system will be implemented to ensure consistent grinding of the mineralized material. There will be a SAG mill - ball mill grinding circuit with subsequent processing in a flotation circuit. The SAG mill will operate in closed circuit with a vibrating screen. The ball mill will operate in closed circuit with hydrocyclones.

The material from the stockpile is fed via three variable speed feeders that discharge onto the conveyor belt that feeds the SAG mill. The discharge of the SAG mill flows over a vibrating screen and the oversized material is returned to the SAG mill by means of a conveyor belt system.

The underflow of the screen flows under gravity to a pump-box where, together with ball mill discharge, it is transferred by centrifugal pumps to a bank of D-10 hydrocyclones. The fines resulting from the classification with a P80 of 60 microns, i.e. cyclone overflow, constitute the feed to the lead flotation circuit.

Cyclone overflow is transferred to a vibrating screen to eliminate trash and present a clean feed to flow by gravity to the lead circuit conditioning tank. The ball mill receives the coarse underflow from the cyclone for regrinding and its discharge is then again combined with the SAG mill screen undersized material and returned to the hydrocyclones to separate the fines and coarse material. This results in a closed grinding circuit to achieve a product size P80 of 60 microns. Slurry from the ball mill discharge pump-box is transferred via a further horizontal centrifugal pump to a Knelson centrifugal concentrator to recover some of the gravity recoverable gold and silver from the grinding circuit. The feed to the Knelson is screened, with the underflow feeding the Knelson concentrator and the oversize returned to the ball mill.

The concentrate from the Knelson concentrator is pumped directly to the lead concentrate thickener. The Knelson concentrator tails flow by gravity back to the ball mill discharge pump-box.

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.

Lead flotation circuit
The general objectives of the lead circuit are to obtain a concentrate of lead with the least amount of impurities and recover as much as possible of the mineralogical species containing gold, silver, lead and copper. The cyclone overflow feeds by gravity to the conditioning tank for the lead flotation circuit, where the pH is adjusted and collectors, together with frother and zinc and pyrite depressants are added. Subsequently the overflow of the conditioning tank also flows by gravity to the lead flotation circuit. This circuit consists of the rougher 1, rougher 2, scavenger sections, and three stages of cleaning. The roughe ........