The Property hosts two stratigraphically controlled mineral deposits. The two deposits, Taylor Deposit (Taylor Sulphide and Taylor Deeps) and the Central Deposit.

Mineralization has been subdivided in to two mineral-types, sulphide (CRD, Skarn and vein) and oxide (Manto). The Taylor Deposit sulphide CRD mineralization is developed within two domains. The upper mineralized domain consists of the Concha Formation, Scherrer Formation and Epitaph Formation of the Paleozoic sequence around the patented Alta claim block. Continuity of CRD mineralization in the Paleozoic-age carbonate formations extends for 2,500 ft (762 m) along strike (Northwest 310°) and 1,500 ft (457 m) laterally (Northeast 40°) beneath the Northwest edge of the Hardshell claim extending across the entire Alta claim to the Southeast edge of the Trench claim block. Thickness of mineralization varies depending on the stratigraphic horizon. The average thickness of mineralization, on the basis of drillhole intercepts, for each stratigraphic host is: Concha – 200 ft (61 m), Scherrer – 60 ft (18 m) and Epitaph 300 ft (91 m). The lower domain of mineralization is characterized by calc-silicate mineralogy and occurs between contact of the Older Volcanics and Paleozoic sediments at a depth of 3,400 ft (1,036 m) below the surface. The average thickness of mineralization in this zone is 75 ft (23 m) and extends for 2,600 ft (790 m) from the southeast edge of the Alta claim towards the center of the Trench claim (Northwest 310°). Laterally (Northeast 40°), the mineralization extends 1,500 ft (457 m).

Sulphide mineralization in the Taylor Deposit also occurs as calc-silicate skarn type mineralization that contains patches and massive, wholesale replacements of carbonate by very-fine-grained, massive, wollastonite-diopside and rhodonite, generally white to pink, very-fine-grained to aphanitic, hard and massive. Significant, sparse zones with coarse-grained, radiating crystal aggregates up to 2 cm and common coarse-grained, euhedral-subhedral galena, sphalerite, chalcopyrite and pyrite are present. Massive replacements of carbonate by galena, sphalerite, chalcopyrite and pyrite are not uncommon, up to 20 ft (6 m) thick. Light green, massive, coarse-grained garnet with abundant sulphides as disseminations, pods, masses and interstitial replacements are sparsely noted, deep within the Epitaph Formation and is directly related to intrusive dikes and sills. This style of sulphide mineralization is not as common but is present.

Vein-hosted sulphide mineralization occurs in northwest trending structural zones (Northwest 310°) and is interpreted as being high-angle (75° - 85° to the core axis) and dipping to the northeast. Vein thicknesses vary from 1.5 ft (0.5 m) up to 6 ft (2 m) and can occur as single veins or vein zones up to 20 ft (6 m) thick with a strike length of 5,000 ft (1,524 m). The veins are comprised of white, massive quartz with open-space, growthzoned quartz crystals and contain coarse grained sulphides (pyrite, galena and sphalerite). Quartz–sulphide veins have been noted in all stratigraphic formations on the Property and are believed to be related to CRD mineralization in the Paleozoic sequence, “Hardshell Zone” and the veins exploited by ASARCO in the Meadow Valley Andesite on the Trench Claims.

The Central Deposit is comprised of oxide mineralization-type (Manto). The oxidized rhyolites overlying the mantostyle mineralization and the carbonate units contain irregular patches and zones of veinlet-controlled hematitelimonite and sooty Mn-oxide with accessory silver mineralization. Manto-style mineralization in rocks of rhyolitic composition is dominated by black, sooty cryptomelane, with or without yellowish orange secondary lead-oxides and with quartz-dominant gangue mineralogy. Manto-style mineralization in carbonate rocks does not typically contain lead-oxides. Strong, pervasive gray, silicification is also present and calcite occurs as veinlets, vugs and fracture fillings. Drill core intercepts containing rhodochrosite and pink calcite are not uncommon and rarer intercepts of hard pinkish rhodonite-bustamite have also been noted.

Call & Nicholas, Inc. (CNI) undertook the preliminary geotechnical study for the underground works on the Project. The recommended mining method is sub-level open stoping (SLOS). Mining will take place initially from the primary stopes followed by secondary stopes. The recommended maximum stope dimensions for mining parallel to strike in the Concha are 148 ft H by 69 ft L by 50 ft W (45 m H by 21 m L by 15 m W) and in the Epitaph are 100 ft H by 45 ft L and 50 ft W (30 m H by 14 m L by 15 m W). While CNI recognize a third rock type, the Scherrer, is rich in mineralization and is planned for mining, it was not separated as a distinct geotechnical domain. Any mining that occurs within the Scherrer should follow the criteria of the Epitaph rock type.

Stope dimensions were optimized for height, rather than length. In both domains, because of the geologic joint fabric, mining perpendicular to the strike of the deposit allows for greater achievable dimensions. Analyses were limited to a depth of 4000 feet (1,219 m).

Primary crushing
ROM material is transported to the crushing plant area by rear-dump trucks. The primary crushing line consists of a dump hopper, grizzly screen, rock breakers, crusher and associated dust collection and transfer equipment. ROM material is dumped into the dump hopper using a front end loader. The grizzly screen oversize feeds the jaw crusher. Two mobile rock breakers are available, one to service the crusher or screen and another one to service the ROM area stockpile.

The crusher reduces the ROM size from a maximum of 19.7 in (500 mm) to approximately P100 of 9.6 in (243 mm). Crushed material drops onto a belt conveyor that transports it to a stockpile. The crushing production rate will be monitored by a belt scale mounted on the conveyor. Tramp iron will be removed using a magnet that will be located at the discharge of the primary crusher discharge conveyor. A metal detector will be installed over the conveyor. Dust is controlled in the dump pocket with water sprays and dust collector vents positioned at the conveyor transfer points. An air compressor and instrument air dryer will be installed for operation and maintenance. A mobile crane will also be installed for maintenance of the primary crusher.

Crushed material conveying, transport and storage
Primary crushed material will be stockpiled on the ground. A reclaim tunnel will be installed beneath the stockpile. The stockpile will contain approximately 10,000 tons of “live” storage (9,072 tonnes). When required, the material will be moved from the “dead” storage area to the “live” storage area by a front-end loader.

Material will be withdrawn from the coarse reclaim stockpile by variable speed belt feeders. The feeders will discharge to the transfer conveyor belt. The transfer conveyor will discharge to the SAG mill in the grinding circuit. The reclaim rate will be monitored by a belt scale mounted on the conveyor.

Dust control in the stockpile area will be achieved using a wet type dust collector system. One of the two dust collector systems will be installed to control dust at the discharge of the stockpile feed conveyor and another one will be installed to control dust in the reclaim tunnel.

Grinding and flash flotation
The mineralized material will be ground in a SAG mill primary grinding circuit and a ball mill secondary grinding circuit

The SAG mill will operate in closed circuit with a vibrating screen. Water is added to the SAG mill to produce a slurry and the material feed size is reduced as it traverses the SAG mill. The SAG mill discharges onto a double deck screen with 8.0 mm sized bottom openings. Screen oversize is recirculated to the SAG mill feed chute by a series of conveyors. Screen undersize will flow by gravity to the cyclone feed pump box. A belt scale mounted on the recycle conveyor will monitor the SAG mill recycle rate. The target SAG grind is P80 of 2,178 microns.

Secondary grinding will be performed in a ball mill. The ball mill will operate in closed circuit with hydrocyclones. Ball mill discharge will be combined with vibrating screen undersize in the cyclone feed pump box and will be pumped to hydrocyclone clusters. Combined slurry will be pumped using variable speed horizontal centrifugal slurry pumps (one operating and one standby) to the cyclone clusters.

Hydrocyclone overflow (final grinding circuit product at 80% minus 105 microns) will flow by gravity to the tramp oversize screen positioned prior to the flotation circuit.

Cyclone overflow will be sampled by primary samplers and analysed by the lead and zinc on-stream analyser for metallurgical control prior to flotation. Cyclone overflow from the cyclone cluster will also be monitored for particle size distribution by a particle size monitor.

Zinc sulfate (ZnSO4) and sodium cyanide (NaCN) will be added into the ball mill.

Grinding balls will be added to the SAG mill and ball mill by ball loading systems. Air compressors and an instrument air dryer will provide service and instrument air for operations and maintenance. An overhead crane will be installed for maintenance of the grinding mills.

The project processing facility is designed to treat 10,000 tpd of lead, zinc and silver material at an operational availability of 92%. The processing flow sheet for the project is a standard flow sheet that is commonly used in the mining industry, including conventional flotation recovery methods typical for lead-zinc material.

Run-of-mine (ROM) material will be crushed in a primary jaw crusher that is located adjacent to the underground mine portal. From there it will be conveyed to the processing facilities where it will be ground to 80 percent finer than 105 microns in a semi-autogenous grinding (SAG) and ball milling circuit.

The mineralized material is further processed in a flotation circuit consisting of lead flotation followed by zinc flotation. The majority of the silver will be recovered in the lead flotation circuit and some silver will also be collected in the zinc flotation circuit.

Lead sulfide will be recovered in a rougher flotation ba ........