The silver-gold with associated base metal mineralization in the Terronera epithermal veins occurs 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 surface to the maximum depth of drilling at 546 m. The Terronera Vein strikes at approximately 145° and dips 80° east. The true width of the principal Terronera Vein ranges from 1.5m to 15m and averages 3.9m.

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 (2013), Munroe (2014)).

The silver-gold ± base metal mineralization in the epithermal veins is hosted in structurally controlled quartz and quartz breccia veins. 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.

Metallic minerals include galena, argentite, and sphalerite associated with gangue constituents of quartz, calcite and pyrite. Munroe (2013) reported that elevated Ag and Au 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 boxworks 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.

The underground operations at Terronera and La Luz mines will both be accessed via ramps. In the case of Terronera, the ramp accesses will connect to the deposit via:

• A main haulage drift from the north with the portal approximately 200mfrom the mill. The ramp will access the deposit at the 1,250m level near the western end of the deposit M1
• The West ramp with portal location at the 1,480m elevation for early access to the western blocks of the deposit, as well as early access to the 1,380m elevation footwall access drift
• The M9 ramp, located at the 1,527m elevation for early access to the central and eastern portions of the deposit.

Ore from both the Terronera and La Luz deposits will be transported via 30-t low-profile haul truck to surface. Terronera will have a truck haulage way for transporting ore from underground directly to a stockpile in front of the process plant area, whereas all material from La Luz deposit is envisioned to be hauled entirely by contractor truck to the same stockpile area.

Terronera will use MCF mining as its primary mining method and longhole retreat as the secondary method whilst La Luz will be mined primarily using longhole retreat mining and resue cut and fill mining as the secondary mining method.

Both deposits will use backfill comprising either cemented or non-cemented rock fill or later in the mine life, cemented or non-cemented quarry rock fill. Cement contents will vary from 4 to 8% by mass as required.

Development of both deposits will begin at the same time, the first day of month 8 of Year -3. Until the Terronera process plant is complete at the end of Year -1, Month 12, ore from the La Luz deposit will mined as quickly as possible, placed on a surface stockpile and loaded into a surface haul truck and trucked approximately 600 kms to Endeavour Silver’s Bolañitos process plant for processing, whilst the Terronera mill is being brought into production.

Production from La Luz will average roughly 240 tpd over its life, with the Terronera deposit’s production ramping up to 1,600 tpd across the year spanning Year 1, Month 7 through to Year 3, Month 1. Production will remain at a total 1,600 tpd across both deposits until Year 9, Month 10, when it will gradually decline to about 1,270 tpd by the end of Year 10, and the end of the mine life.

Longhole Retreat Mining with Backfill
Longhole retreat mining will be used in both the Terronera and La Luz deposits where applicable. Each cycle of longhole mining will be followed by fill placement.

Longhole mining will take place by accessing the stoping areas with waste ramps from the footwall. Once encountering the ore, a sill cut, on multiple sublevels will be driven to both longitudinal extremities of the ore zones. Once the ore zone extremities have been reached, longhole drilling from the upper sublevel to the lower sublevel will take place and a slot will be developed at the end of the designated stoping block followed by regular longhole drilling throughout the stope block proper. The stope will be developed to a length appropriate to the geotechnical parameters, is this case 15 m long. Long hole blasting will then be carried out, starting with the slot, then the rest of the ore body until the designated length is reached. Mucking with 3.0 m3 LHDs will be carried out from the lower sublevel, in remote-controlled fashion as required, until the stope has been mucked clean.

At this point, high-cement content rock fill will be placed in the lower sublevel at the entrance to the stope, then the rest of the stope will be filled with CRF of a lower cement level, or, if conditions dictate, no cement at all. All filling will be carried out from the top sublevel with LHD units mucking backfill from the remuck close to the ramp. Backfill may also be placed using haul trucks driving directly to the open stope and placing backfill with their ejector trays. This would reduce the cycle time for placing backfill. Once a stope has been filled, the cycle will be repeated, first by continuing to retreat with the next longitudinally adjacent panel until reaching the last panel, which will be access by the ramp, at which point, the cycle will be repeated by mining the next set of sublevels located vertically above the first set of sublevels.

Mechanized Cut and Fill Mining
MCF involves the excavation of ore material from a cut, followed by placement of backfill to allow for mining of the next vertical lift. The backfill material will be rock fill or quarry rock, consolidated or unconsolidated, depending on its intended application. Numerous sub-types of MCF mining exist. This method will be used where the veins lie flatter or where the ground is too faulted to open it up for longhole retreat mining.

With MCF mining, the ore body is accessed from the footwall through a waste crosscut. When the ore is encountered, drifting along the ore (taking the sill cut) until the reaching the end of the stope is carried out. Once this sill cut is completed, it will be backfilled with either cemented or uncemented rockfill or quarry rock to provide a working platform for the next lift. However, the stope will not be tight-filled to the back (roof). A small void (approximately 0.5- 0.6 m high vertically) will be left to provide void for the level above to be blasted into, thus removing the need for drilling a cut on the drift above.

Where an artificial sill pillar is required, the sill cut will be filled with 8% CRF so that MCF can take place lower in the deposit, working up to and under this concrete-reinforced fill. Filling practices above this (4% CRF for future lateral exposure, UCF for unexposed areas) will be carried out for the remainder of the mining cycle.

Generally, each MCF stope will comprises five “lifts” to create a nominal level spacing of 20 m; however, certain areas may have more, or fewer, lifts as required for mining operations. Drift widths are generally optimized for a 6.7-t class LHD unit and are at least 3.0 m wide, however in certain areas where thin cuts are required, a 3.5-t class LHD will be used in drifts as narrow as 2.1 m wide.

Each lift will be 200-450 m long and will be accessed via attack ramps from the closest principal ramp. The set of attack ramps will intersect the stoping block centrally, subdividing the first lift into two working areas extending 100-250 m along strike and repeating this pattern for subsequent lifts. The maximum gradient of the attack ramps will be ±15%. As each lift is completed, the back (roof) of the attack ramp will be slashed out to provide access to the lift above, and the process will repeat until the level is completed, at which point mining operations will relocate to the level above. All drift-and-fill mining operations will progress within a level in an overhand fashion to limit the requirements for personnel to access areas underneath consolidated fill. The minimum mining width of the equipment planned to be use at Terronera is 2.1 m, making the drift-and-fill method an inappropriate choice due to excessive dilution of the vein.

Resue Mining
The La Luz deposit consists of a single narrow vein which rarely exceeds 1 m in width and is normally significantly narrower. Resue mining, where the ore from the lift above is mined from the lift below prior to mining the waste and filling the drift below, has therefore been selected to reduce dilution, use the same mining fleet between Terronera and La Luz, and reduce the overall mining costs of the La Luz vein by reducing both the amount of waste that must be hauled out of the stope and the amount of backfill that will later be required to be placed within the stope.

Crushing and Stockpiling
The crushing circuit will comprise a 24 t dump ore pocket fitted with a stationary grizzly with a 12 inch by 12 inch opening. The grizzly oversize will be broken with a hydraulic breaker. A grizzly feeder will send the ore to a primary jaw crusher to reduce the material to minus 70mm. The crushed material and the dust fines from the feeder will be transported to subsequent stages of screening and secondary crushing in closed circuit to further reduce the material to minus 10 mm. Conveyor belts will be used to transport the intermediate and fine crushed materials throughout the entire crushing circuit. The crushing circuit design provides weigh scales, a crushed ore sampling system and magnetic separators to protect the cone crusher from iron coming from underground mining operations. The finely crushed product will be transported to a fine ore bin with 870 t live capacity.

Grinding Circuit
The grinding circuit design consists of a single stage primary ball mill. The ores from the Terronera deposit have been classified as hard with an average BWi of 17.3 kWh/t.Optimization of the grinding circuit design will be necessary to ensure that the specified target particle size will be achieved during normal plant operation.A variable speed belt feeder will transport the crushed material from the fine ore bin to the primary ball mill. The material will be ground to 80% minus 70 µm in closed circuit with a battery of cyclones. Some flotation collect or will be added into 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.

The run-of mine (ROM) material will be transported to a coarse material storage patio with haul trucks. The crushing circuit is designed to process 1,600 dry tpd in 16 hours of operation. The beneficiation plant will operate continuously 365 days per annum. The beneficiation plant availability is assumed to be 92%. The bulk density of the ROM material is anticipated to be 2.61 t/m3 with average moisture content of 4%. The beneficiation plant will produce a precious metal- bearing concentrate as final product.

The processing methodology selected consists of the following processing circuits:
• Stock pile (2,000 t capacity)
• Crushing plant (three stage - closed circuit – 1,600 tpd capacity)
• Fine ore storage (1,600 t capacity)
• Primary grinding (1,600 tpd capacity)
• Flotation (1,600 tpd capacity)
• Flash flotation
• Roughers
• First and second cleaners.
• Final concentrate sedimentation and filtration (1,600 tpd capacity)