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 308 Ktonnes of mill feed from stoping activities using 2 mining methods, namely cut and fill and sublevel stoping.

The mining conditions for the Santa María deposit are narrow vein hard rock. The true width of the vein planned for mining (prior to dilution) varies from 0.6 m to 3.7 m. Two vein systems are part of this conceptual analysis, the Santa María and the Santa María Dos veins. The depth of mining is planned to be between 100 and 380 m below surface or at elevations between 1910 and 1580 amsl.

For the preliminary economic assessment, two mining methods were selected, Sublevel Stoping and Cut and Fill. The decision to mine using one method or the other is based upon which method provides the best diluted Net Smelter Return (NSR). This is preliminary and should be refined based on better understanding of dilution, mining costs, recoveries and smelter terms.

Sublevel stoping has been envisaged as overhand longitudinal retreat. The stopes will be developed through driving drifts spaced 30 m apart along the vein from crosscuts off the main ramp. These drifts will form the base of the stopes, from which blasted material will be mucked and will be the main levels forming the mine. In between the main levels one or two sublevel will be driven which will be used to access stopes for drilling of production blast holes. Sublevels will be driven along the vein either directly off crosscuts from the main ramp or by access raise from the main levels. As such blast hole drilling equipment would be required to be capable of being hoisted up 1.5 by 1.5 m access raise. The driving of sublevels will be done by jackleg and slusher. The sublevels will be spaced 10 to 15 m apart from which both upholes and down holes could be drilled. The stope sequencing will be such that blasted material will be dropped to the main level from which it will be mucked using a narrow scooptram (1.6 m wide). Sill and rib pillars would be left between stopes to maintain regional stability.

Cut and fill mining has been considered as a combination of mechanized drill and blast and jackleg mining. The method may use both overcut and undercut blasting. The stope would first be developed to extents by driving a drift along the vein using either jackleg or jumbo drilling. From this level undercuts and/or overcuts will be blasted successively. Due to the narrow nature of the deposit and because minimal fill material is available, it has been assumed that waste rock will need to be blasted to act as fill. This would come from hanging wall of the vein, blasted in separate blasts from the vein.

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.

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 ........