The San Sebastián del Oeste area, including the Terronera Project, is underlain by an intermediate to felsic volcanic and volcaniclastic sequence correlated with the middle to lower Cretaceous Lower Volcanic Group of the Sierra Madre Occidental geological province. This volcano-sedimentary sequence consists of shale, sandstone, and narrow calcareous-clayey interbeds overlain by tuffs, volcanic breccias, and lava flows of mainly andesitic composition. The volcano-sedimentary units crop out in the north-central part of the district. Further to the north, granitic to granodioritic intrusive rocks are present.

In the San Sebastián del Oeste district, silver and gold mineralization represents the upper portion of an epithermal vein system. Illite, sericite, and adularia are characteristic alteration assemblages that typically occur in the veins and in the vein wall rocks. In higher elevation
areas, where limited mining (colonial-era artisanal mining), has occurred, such as the El Hundido and Real de Oxtotipan mines, the quartz is amorphous and milky white, indicative of a low-temperature environment.

The epithermal veins' silver-gold ± base metal mineralization is hosted in structurally controlled quartz and quartz breccia veins. The principal Terronera Vein has been traced by drilling for 1.5 km on strike and from the surface to the maximum depth of drilling at 546 m. The Terronera Vein strikes at approximately 145° and dips 80° east. The actual width of the principal Terronera Vein ranges from 1.5 to 15 m and averages 3.9 m. In addition to the main Terronera Vein, there are additional hanging wall and footwall veins. The veins are primarily hosted in volcanic flows, pyroclastic, and epiclastic rocks and associated shales and their metamorphic counterparts (Lewis and Mulahwi (2012); Munroe (2013)).

Metallic minerals include galena, argentite, and sphalerite associated with quartz, calcite, and pyrite gangue constituents. Munroe (2013) reported that high silver and gold values from 2011 sampling of underground workings in the Terronera Vein were primarily obtained from crystalline quartz veins, drusy in places, with limonite and manganese oxides lining box works after sulphides and fine-grained disseminated pyrite and traces of dark grey sulphides, probably silver sulphides.

Regionally, known deposits contain polymetallic sulphide mineralization in wide vein structures. The veins at higher elevations may represent the tops of ore shoots containing significant silver and gold mineralization at depth.

High-level hydrothermal systems form low-sulphidation epithermal deposits from depths of ~1 km to surficial hotspring settings. Deposition is related to regional-scale fracture systems related to grabens, (resurgent) calderas, flow-dome complexes, and rarely, maar diatremes. Extensional structures in volcanic fields (normal faults, fault splays, ladder veins, and cymoid loops) are common; locally graben or caldera-fill clastic rocks are present. High-level (subvolcanic) stocks and dikes and pebble breccia diatremes occur in some areas. Locally resurgent or domal structures are related to underlying intrusive bodies.

Most types of volcanic rocks can host the deposit type; however, calc-alkaline andesitic compositions predominate. Some deposits occur in areas with bimodal volcanism and extensive subaerial ash-flow deposits. A less common association is with alkalic intrusive and shoshonitic volcanic rocks. Clastic and epiclastic sediments can be associated with mineralization that develops in intra-volcanic basins and structural depressions.

Ore zones are typically localized in structures but may occur in permeable lithologies. Upwardflaring ore zones centred on structurally controlled hydrothermal conduits are typical. Large (> 1 m wide and hundreds of metres in strike length) to small veins and stockworks are familiar with lesser disseminations and replacements. Vein systems can be laterally extensive, but ore shoots have a relatively limited vertical extent. High-grade mineralization is commonly found in dilational zones in faults at flexures, splays, and cymoid loops. Textures typical of low-sulphidation deposits include open-space filling, symmetrical and other layering, crustification, comb structure, colloform banding, and multiple brecciation.

Deposits can be strongly zoned along strike and vertically. Deposits are commonly zoned vertically over 250 to 350 m from a base metal-poor, gold–silver-rich top to a relatively silver-rich base metal zone, and an underlying base metal-rich zone grading at depth into sparse base metal, pyritic zone. From surface to depth, metal zones can contain gold–silver–arsenic– antimony–mercury, gold–silver–lead–zinc–copper, or silver–lead–zinc. In alkalic host rocks, tellurides, vanadium-mica (roscoelite), and fluorite may be abundant, with lesser molybdenite.

The Terronera mine will be accessed via three declines developed from the surface. An internal decline will be used to access the La Luz deposit. The declines are designed at approximately 15% grade and will be developed as single face headings. The declines will collar on separate portals located at the process plant, the mine dry, and a temporary access portal at the upper level of the Terronera deposit. The dual decline will incorporate re-muck/sump and re-muck/electrical substation cut-outs on a nominal 159 m spacing. Passing bays are not included in the ramp design as the design supports using a dedicated decline for material transport to the surface, reducing the potential traffic interferences from routine operations.

Approximately 59% of the Terronera deposit will be mined using transverse and longitudinal SLS.

Transverse SLS is a high productivity and lower-cost mining method compared with CAF or drift-and-fill methods. The stope dimensions will be a maximum of 20 m high x 15 m wide x 15 m long and a minimum mining width of 8 m. The stopes will be mined in a bottom-up sequence and in a primary then secondary sequence laterally. Primary stopes will be backfilled with cemented rockfill. Secondary stopes will be filled with uncemented rockfill.

In areas where the ore is less than 8 m thick across strike, longitudinal SLS will be employed. Stopes will be mined in a bottom-up sequence. After the top and bottom cuts are established, the stoping sequence can commence. Deep ground support will be added according to the ground conditions. A 1.8 m x 1.8 m slot raise will be drilled with holes breaking through to the bottom level.

To maximize recovery of the Mineral Reserve, in the areas of the Terronera deposit where the rock mechanics properties are poorer, CAF mining will be employed to minimize the exposure of hanging wall during the mining cycle.

The La Luz deposit will be extracted using the shrinkage stoping method. Shrinkage is applicable to La Luz due to the geometry and size of the deposit. La Luz has vertical extents from of 220 m and lateral extents of 360 m. The deposit thickness ranges from 1.0 to 1.5 m.

The underground mine designs were developed to provide access to the ore, accommodate infrastructure, and offer efficient routes for ventilation and ore and waste handling, including:
• Primary development: capital infrastructure including ramps, levels, sumps, shops and associated infrastructure. Endeavour Silver mining personnel will perform primary development;
• Vertical development: capital infrastructure including raise bore, and Alimak raises. This development is to support ventilation and material handling;
• Secondary development: internal ramps and level accesses that connect the primary development with the mining blocks;
• Ore development: development to support production by mining method. Transverse SLS, longitudinal SLS, and CAF. Methods were selected primarily by local deposit geometry and rock mechanics conditions.

Mine Access
Decline 1 will collar at the process plant pad and serve as the primary ore haulage route out of the Terronera and La Luz deposits. Decline 1 accesses Terronera at an elevation of 1,200 m above sea level and La Luz at 1,235 m above sea level. An interim ventilation raise will be developed 775 m down the ramp to develop an early fresh air loop. Access to ventilation raise 1 will be established at elevation 1,248 m to support reaming of the ventilation raise and the establishment of the ventilation loop. Cut-outs for electrical sub-stations and re-muck bays will be developed on a 150-m spacing.

Decline 2 provides primary access for personnel and material transport into the mine. The decline is collared at elevation 1,454 m above sea level and accesses the mine at elevation 1,400 m above sea level and is limited to a 15% grade. A connection to ventilation raise 1 is planned at elevation 1,415 m to support reaming and establish a ventilation loop when completed.

Decline 3 is collared at elevation 1,640 m and provides access to the underground installation of the raise-bore for pilot and reaming of the second section of the ventilation raise 2. Decline 3 also provides early access to the oxide portion of the deposit.

Ramps
An internal ramp provides access to the mine sub-levels from the declines and allows development and early production from the oxide and transition zones. The inter-level ramp system connects the mining levels and provides access to the mining levels from the decline access. This provides routing for ore and waste haulage from production and development headings to ore passes or for transit to the surface. The internal ramp system extends from elevations 1,560 to 1,120 m. The dimensions of the ramp (5.0 m wide x 5.0 m high) consider a 30-tonne haulage truck with an overall gradient of 14%.

Crushing and Stockpiling
The crushing circuit will comprise a (50 t) dump ore pocket fitted with a stationary Grizzly with a 305 mm by 305 mm opening. The Grizzly oversize will be broken with a hydraulic breaker. A grizzly feeder will send the ore to a 635 mm by 1,270 mm primary jaw crusher fitted with a 112kW drive to reduce the material to minus 70 mm. The crushed material and the feeder undersize will be transported to subsequent stages of screening and crushing in a closed circuit to further reduce the material to minus 10 mm. The double-deck screen will be where the first oversize will feed a secondary cone crusher operating with a 25 mm CSS. The second oversize will feed a tertiary cone crusher operating with a 12 mm CSS. Both cone crushers are fitted with a 150 kW drive. The crushers' discharge will return to the screen feed end. Conveyor belts will be used to transport the intermediate and fine crushed materials throughout the entire crushing circuit. The crushing circuit design provides a weigh scale for accounting purposes and a belt magnet and a metal detector to protect the cone crushers from iron coming from underground mining operations. The finely crushed product with a P80 of 6.7 mm will be transported to a fine ore bin with an 870 t live capacity.

Grinding Circuit
The grinding circuit design consists of a single stage of grinding in a primary ball mill. The vein materials at Terronera have been classified as very hard with a 75th percentile BWi of 19.1 kWh/t.

A variable speed belt feeder draws the crushed ore from the fine ore bin and feeds it onto a conveyor belt that transports the crushed material to a 4.4 m diameter by 7.5 m effective grinding length primary ball mill. The mill will be fitted with a 2,200 kW drive. The material is ground to 80% minus 70 µm in a closed circuit with a battery of cyclones of 250 mm diameter. Grinding media will be added to the mill to ensure an effective and efficient grind. Some flotation collector and frother will be added to the ball mill discharge to allow for conditioning. Cyclone overflow at approximately 35% solids will be sent to a trash screen for removal of debris. After trash removal, the clean slurry will be directed to the flotation process.

ROM material from La Luz and Terronera veins will be transported via haul trucks to one of three 10,000 t coarse material stockpiles located approximately 200 m from the plant. The stockpiles are separated by the ore type: sulphide, transition, and oxide. Alternatively, ROM material can be directly transported to one of three 2,300 t capacity stockpiles located at the plant. Ore from the stockpiles is transported to the primary crusher dump pocket by a frontend loader. The crushing circuit is designed to process 1,700 dry tpd in 16 hours of operation. The beneficiation plant will operate continuously 365 days per annum with an assumed availability of 92%. The bulk density of the ROM material is 2.61 t/m3 with an average moisture content of 4%. The beneficiation plant will produce a precious metal-bearing high-grade concentrate as the final product.

The processing methodology selected consists of the following processing circuits:
• Stockpiles (2,000 t capacity);
• ........