The Santa María deposit type can be described as an epithermal quartz - calcite vein system. Typical banded epithermal textures are observed in underground workings and drill core. Brecciated mineral textures filled by quartz and calcite are common. Low concentrations of galena and sphalerite and the presence of silver minerals indicate an elevated level of exposure within the epithermal system.

The geology of the property is dominated by rocks of the Parral Formation, rhyolites, granodioritic intrusive and a post-mineral basaltic cap on the eastern edge. The Santa María mineral deposits are hosted in and adjacent to a rhyolitic dike and granodioritic rocks. Veins are observed hosted by skarns and silicified limestones of the Parral Formation and the Tertiary rhyolite dike

Santa María Main Vein
The primary Santa María vein gently curves following the contact of the associated rhyolite dike and can be traced on surface for 1,150 m. The current demonstrated down dip extent is 260 m and remains open at depth and along strike.

The vein occupies a fault zone near the contact between the Parral Formation sediments and the Tertiary dike. Breccia textures healed by quartz gangue are common in the vein. The vein varies in width between 1 and 4 meters with an average width of 2 meters. The dip of the vein is north varying between 75 and 85 degrees. In the underground workings, occasional post mineral normal faults can be observed to offset the mineralization locally.

At surface the vein is oxidized, and oxidation extends irregularly to ~75 meters depth. In the easternmost portion of the vein sulfide mineralization is preserved in the footwall of a cross-cutting fault. Oxide portions of the vein are characterized by strong iron oxides including goethite and hematite. The observed sulfide minerals are galena and sphalerite with rare occurrences of acanthite and ruby silver sulfosalts.

Santa María Dos Vein
The Santa María Dos vein is a hanging wall splay from the Santa María Main vein. It diverges from the Main vein close to the entrance of the Santa María decline and can be traced along surface for 1,050 m. The vein has been drilled down-dip for approximately 200 m where it intersects the Main Vein. The Santa María vein is open along strike to the east.

The vein appears to occupy a fault zone near the contact between Parral Formation limestones and an east-west striking diorite dike. The vein varies in width from 0.25 to 3.5 m and average width is around 1 m. The vein dips to the south varying between 65 and 85 degrees.

At surface the vein appears as a narrow, oxidized banded and brecciated quartz vein. Oxidation is variable. In the west it extends to 40 m depth, and in the east up to 150 m depth. Oxide parts of the vein are characterized by iron oxides including goethite and hematite, and in the sulfides zone of the vein sulfide minerals are dominated by pyrite with minor galena and sphalerite.

North Vein
The North vein crops out approximately 350 m north of the Main vein and can be traced along surface for 350 m. The western extension is covered by post-mineral basalts. The vein varies in width from 0.15 to 2.2 m with an average of 0.8 m. The vein has been explored by several small prospect pits.

The vein has a northeast strike and is steeply dipping (80o to the NW or SE depending on the vein limb). The vein appears to be offset by a NW striking fault. The host rocks are the Parral Formation limestones.

At surface the vein is a narrow oxidized banded and brecciaed quartz vein with variable oxidation and rare pyrite.

Cervantes Vein
The Cervantes vein crops out 450 m to the east of the Santa María vein system and has been mapped and sampled over a 900 m strike length.

The vein varies in width from 0.25 to 1.3 m with an average of 0.6m. The vein is explored by several prospect pits and shafts and in the center of the system, and an 80 m long tunnel has been developed on the vein exploring an area where sulfide mineralization occurs.

The vein has a north-south strike and dips steeply (80o ) to the west within a narrow fault zone within the Parral Formation limestones. On the surface the vein is a narrow banded and brecciated quartz-calcite vein and with variable oxidation. Adjacent to the small mine, the vein has a northeast strike and is steeply dipping (80o to the NW or SE depending on the vein limb). The vein appears to be offset by a NW striking fault. The host rocks are the Parral Formation limestones. The vein contains moderate iron oxides and iron oxide staining. However, the vein cropping out above the small mine working contains significant sulfides including sphalerite, galena and pyrite.

The existing underground facilities would be used to gain access to the new underground Resources using the current adit on the western end of the property. The mine plan includes 353,000 tonnes of mill feed from stoping activities using 2 mining methods: resue cut and fill and sublevel stoping with fill.

The Santa Maria resource is a narrow vein deposit that has with a vertical to near vertical dip. There are two primary structures, the Santa Maria vein and the Santa Maria Dos vein. The true width of the material that may be planned for extraction is 0.6 m to 3.7 m.

The planned extraction uses two types of stoping: Sublevel and Fill, and Resue Cut and Fill. The general operation utilizes handheld pneumatic jackleg drills for the development and production drilling, 2 LCY LHD units for all mucking and filling tasks, and 15 Tonne haul trucks for the transportation of ROM material for both process feed and waste. The mine work force will be sourced locally from the Parral, Chihuahua region with a few transient miners from other regions. The operation will employ 80 to 90 persons including the General and Administrative staff. The mine production schedule is planned to average ±200 tpd (tonnes per day) of ROM material for processing at toll plants in Parral, and ±125 tpd of development waste. Fill requirements will be sourced from development waste and nearby alluvial deposits.

The mining width is the definitive control in the stope type selection process. The resue stope method will be employed for areas less than 2.4-meters in width and a minimum mining width of 0.75-meters will be employed. The sublevel stoping will be employed for all areas that are greater than 2.4-meters. The two mining methods can be used in the same stope; resue the narrow areas and sublevel stoping the areas that are wider.

The current analysis supports Resue cut and fill for areas of the vein that have a final mining width less than 2.4 m and sublevel stoping will be employed for areas greater than 2.4 m. The vertical extent selected for both stope types is 30 m and 31 m sloped distance in areas of the vein that are not vertical.

The development drift is 3.0 m wide by 3.0 m high and driven at a maximum grade of ±15 percent. Development drifts will be excavated by miners with jackleg drills during the production drilling cycle. The muck cycle will be completed with 2.0 LCY LHD units. Explosives used for the excavations will be gelatin dynamite for the primer, ANFO as the primary explosive, and LP delay shock tubing blasting caps for the initiation. Active working faces will be ventilated with Axivane fans providing ventilation air to the face in 30-inch brattice cloth ventilation tubing. The drift will be equipped with 6-inch diameter HDPE tubing for compressed air, 4-inch diameter tubing for water discharge, and 2-inch steel tubing for freshwater delivery to the work areas. Active mining faces will use air powered diaphragm pumps to remove ground water and drill water. This water will be pumped to sumps strategically located throughout the ramp system for removal from the mine using electrically powered submersible pumps.

Each 30 m panel will require three sublevels: one sublevel at the base level (0 m level), the second sublevel locate +10 m above the base sublevel, and the third sublevel located +10 m above the second sublevel. Vein accesses, ±10 m, will be driven from the development ramp to the vein structure. The dimensions of sublevels are the mining width of the ROM material by 3.0 m in high and are started from the intersection of the access to the vein.

The initial panel, designated as the +0m to +10 m panel, is 7 m in height and will be mined at the width of the defined ROM material, starting at one extent or the other. The production drilling of the panel will be done using a small hydraulic Longhole drill rig. The production drill holes will be drilled downward and break into the base sublevel. This enables the confirmation that the holes bottom in the correct location, thus reducing unnecessary dilution. Explosives will be loaded into the production blast holes from the top. Plugs will be installed in the bottom of the holes. The second cut designated as the +10 m to +20 m panel, is extracted in the same fashion as the 0 m to +10 m panel, with the production drilling done from the +20 m sublevel. Mucking of the blasted material will be done from the 0 m base sublevel using an LHD unit equipped with remote control. The remote control eliminates the danger that exists in the open stope area to an operator. There are two possibilities for extracting the last, upper most, panel:

1.) Fill the void left by extracting the two lower panels and sublevels with waste (barren rock), then extract the panel by drilling the production holes vertically upward while working off the placed fill, or;
2.) Drill the production blasting holes vertically upward from the +20 m sublevel while drilling the second panel’s production holes, blasting both panel simultaneously.

The internal waste (barren rock) areas that exist within the defined stopes in the sublevels will be mined identical to the ROM material. The two materials will be segregated by blasting barren material or the ROM mineralized material separately. Waste zones within the extents of the panels will not be extracted but left in place as support pillars. These barren zones will be identified by sampling and visual inspection on the sublevels.

It is currently envisioned that both mixed and sulfide materials will undergo toll-milling at a facility with sulfide flotation circuits. Per information provided by the facility, the maximum total throughput for the flotation circuit is 250 tonnes per day. The flotation circuit contains both lead and zinc flotation but will be operated as to produce a bulk sulfide silver gold bearing concentrate.

The oxide ore will be cyanide leached at the toll-milling facility. The option for processing mixed and sulfide tailings in the leach circuit exists to improve the recovery of gold and silver as indicated by testwork.

In the event further test work indicates that regrinding is necessary, at present there is no regrind mill in the proposed facility. The inclusion of a regrind mill, most likely in the form of a small tower mill due to generally smaller footprints, would incur additional CAPEX not currently evaluated within the economic analysis. This additional unit CAPEX ........