The Guanaco-Amancaya Operation is located in the Central Depression of northern Chile, which is a north-northeast striking Paleocene to early Eocene morphostructure formed as part of a volcanic arc under extensional and/or transtensional conditions. The structure extends for 3,000 km, is composed of mafic to felsic volcanic rocks of calc-alkaline affinity, typically affected by extensive alteration, and has gabbroic to dacitic intrusive and subvolcanic bodies emplaced over its length. These rocks are grouped into the Cinchado (north) and Chile-Alemania (south) formations that lie unconformably over Cretaceous volcanic rocks. During the middle Eocene, the change of convergence angle and the acceleration of subduction resulted in crustal thickening, eastward migration of the volcanic arc, and the onset of the Incaic orogeny, which uplifted the Incaic Range and produced giant middle to late Eocene copper porphyry deposits to the east.

The Guanaco deposits are considered examples of structurally controlled high-sulphidation epithermal systems.

The most important structural features related to gold mineralization at Guanaco follow east-west and east-northeast to west-southwest trends. Gold bearing structures are all steeply inclined ledges (veins) composed of massive vuggy and cryptocrystalline quartz of replacement origin. Individual ledges are up to five metres wide, however, more commonly they appear to comprise several impersistent siliceous strands separated by altered, but barren, wall rock. The ledge structures extend for at least four kilometres along strike, although gold concentrations are confined to relatively restricted shoots. The ledges, formerly mined underground, and afterward in the Dumbo, Defensa, and Perseverancia open pits, contain the largest mineralized shoots, which reportedly extended for up to 300 m vertically. Further west, the mineralized shoots defined to date appear to be more restricted, both laterally and vertically. For example, individual shoots discovered at Cachinalito West range vertically from 50 m to 150 m and occur at slightly different elevations along closely spaced, parallel structures rather than within a single continuous ledge.

The deposit at Amancaya is an epithermal gold-silver deposit hosted in a steeply dipping, structurally controlled quartz vein emplaced on a volcano-tectonic basin. Gold mineralization comprises disseminations of native gold and silver, electrum, silver sulphosalts, and accessory sphalerite, galena, chalcopyrite, and pyrite occurring with quartz, adularia, carbonates, clay minerals, limonite, and manganese oxides. These minerals were deposited from boiling of dilute saline fluids circulating in a hydrothermal system driven by the Eocene to Paleocene magmatism. The hydrothermal vein systems are considered an LS type based on their metal content and the volcano-tectonic setting.

The Inesperada deposit is an HS breccia controlled epithermal gold deposit, hosted in phreatomagmatic tuffs and breccias. Alteration zonation is characterized by a silica-quartz-alunite-jarosite core surrounded by a quart-alunite-dickite alteration halo, changing outwards to a quartz-kaolinite assemblage. Gold mineralization is directly controlled by the morphology of the conduit of the phreatomagmatic unit. Mineralization depth is estimated to be greater than 100 m, the large part of which is oxide, changing below 2,400 MASL to a sulphide association of silica-quartz-alunite-pyrite alteration, with enargite and traces of chalcopyrite, chalcocite, and covellite.

Guanaco Mineralization
Native gold forming lamellae and coarse and fine grains is the most important economic mineral, although it is rarely visible. Disseminated pyrite is the most common mineral in the non-weathered mineralized material; enargite, luzonite, and minor chalcopyrite are present in the deeper horizons. Chalcocite and covellite, together with copper carbonates, silicates, and a number of rare copper arsenates (chenevixite, ceruleite) have been found in secondary-enrichment zones.

Important gangue minerals are quartz, tabular barite, pink alunite, kaolinite (in substitution of feldspars in zones affected by advanced argillization), hematite, chlorite, and epidote. Pervasive silicification commonly replaces all the primary rocks, whereas vuggy silica resulting from extreme acid leaching is a preferred host of the gold mineralization.

In the Cachinalito vein system, the economic mineralization appears to form 50 m to 150 m long clusters, locally known as “bolsones”. A narrow vertical range (less than 150 m) corresponding to relatively restricted paleo-depth conditions seems to have been relevant for economic gold deposition. The majority of the gold mineralization is concentrated between 2,500 MASL and 2,650 MASL. High grade shoots (up to 180 g/t Au), 0.5 m to 3.0 m wide, have been mined. Lower grade halos, below 2 g/t Au, reach 20 m in width.

The oxidation zone extends down to 150 m and is relatively free of copper. Gold grades in this zone are generally high, sometimes exceeding 50 g/t.

Inesperada Area
Phreatomagmatic tuffs and breccias occur in andesitic lava flows and their fragments are found along second order northwest-southeast structures possibly related to an extensional to transtensional tectonic regime.

Alteration is primarily associated with highly permeable phreatomagmatic rocks and strongly fractured andesitic rocks close to the contact between the units. The alteration zonation is characterized by a silica– quartz-alunite-jarosite core surrounded by a quartz-alunite-dickite alteration halo, changing outwards to a quartz-kaolinite assemblage developed over tuff and phreatomagmatic breccias. The outermost zone represents a halo of white micas that are developed mainly in the andesitic volcanic rocks.

Both gold mineralization and associated alteration are controlled by the morphology of the conduit of the phreatomagmatic unit. Mineralization depths are estimated to be greater than 100 m, with mineralization above 2,400 MASL being generally oxide and mineralization below 2,400 MASL being generally sulphide, characterized by a silica-quartz-alunite-pyrite association, with enargite and traces of chalcopyrite, chalcocite, and covellite.

Amancaya Mineralization
Amancaya is a vein hosted gold-silver deposit. The principal minerals are pyrite, galena, and sphalerite, with native gold, electrum, acanthite, chlorargyrite, and silver sulphosalts (pyrargyrite) also present. Native gold and electrum are rarely visible. There are three major veins in the mine area, the Central Norte and Central Sur veins, which have been mined, and the Oeste vein, not mined yet, all of which are quartz veins with hematite, jarosite, siderite-ankerite, and manganese oxides. The description of the veins follows.

Norte Vein
The Central Norte vein is banded and has a brecciated centre with milky quartz fragments. It extends for 850 m along strike in a N15°E direction, dipping between 77° and 90° to the east. Its thickness varies between 0.25 m and 3.0 m. It is characterized by high contents

Sur Vein
The Central Sur vein is a brecciated vein with banded quartz fragments. It extends for 600 m along strike in a N30°W direction, dipping between 59° and 88° to the east. Its thickness varies between 0.18 m and 3.5 m. It is characterized by low levels of manganese oxides, and siderite is the predominant carbonate. Galena and sphalerite become more abundant in the vein with depth.

Oeste Vein
The Oeste vein is a brecciated vein with banded quartz fragments. Based on the current knowledge, it extends for 250 m along strike in a N15°E direction, dipping between 60° and 75° to the west. Itsthickness varies between 0.5 m and 3.0 m. It is characterized by low contents of manganese oxides and carbonates.

The Guanaco-Amancaya Operation consists of the Guanaco Mine (Guanaco) and Inesperada satellite deposit (Inesperada), the Amancaya Mine (Amancaya), and the Guanaco heap leach pads (Heap Reprocessing project).

Mining at Guanaco was discontinued in February 2020. Amancaya is currently in production.

The LOM plan for the Guanaco-Amancaya Operation extends over 12 years. Amancaya continues operating throughout 2022, however, output tapers off in 2023 as operations wind down. Open-pit mining at Inesperada starts in 2023 when Amancaya's Mineral Reserves are exhausted. The pit operates until its reserves run out at the end of 2025. Heap Reprocessing begins in 2023 and continues through to 2033. The heaps will be reprocessed in reverse order of their numbering, starting with Heap III. Heap II comes on stream in 2027, near the end of Heap III's production. Leaching of Heap I begins in 2030 and continues to the end of the mine life in 2033.

Amancaya
The mining method at Amancaya is sublevel open stoping (SLS). The mine has a 15 m sublevel interval, and the production drifts have a 4.0 m wide by 4.2 m high profile. An ore horizon between sublevels is developed by driving crosscuts to the deposit and advancing ore drives along the vein at the upper and lower sublevels. The vein between the upper and lower ore drives is drilled with longholes and blasted in benches. In the first inter-sublevel horizon, the longholes can be drilled as upholes or downholes. A vertical crater retreat (VCR) drop raise is advanced between the upper and lower ore drives, providing a slot for initiating bench blasting. The blasted ore is mucked from the lower ore drive using a load-haul-dump unit (LHD) equipped for radio remote control operation. Pillars measuring approximately 8 m horizontally and 4 m vertically are left every 30 m along strike immediately below the upper ore drive level to support the hanging wall. The mined-out stopes are not backfilled in most cases and remain permanently open. The mining sequence is top-down, so mining proceeds to the next lower horizon. The only access to the stope is via the lower ore drive; therefore the longholes must be drilled as upholes.

Amancaya has six geotechnical units, which have been characterized and classified according to rock quality indices. The rock quality of these units ranges from fair to good, according to the RMR B89 index. Amancaya’s ground support procedures vary according to the geotechnical unit and excavation type. Except for those driven in weathered rock, production drifts require only scaling for ground control. Development drifts, intersections, and production drifts passing through weathered rock require cement grouted helicoidal rockbolts and a 50 mm layer of shotcrete.

Amancaya’s output is planned at approximately 660 tpd throughout 2022 but tapers off in 2023 as operations wind down. The Mineral Reserves are exhausted in the third quarter of 2023. Approximately a quarter of the production comes from drifting through the veins and the remainder from longhole benching. All infrastructure and equipment required for the remaining mine life are already in place; consequently, there are no capital expenditures for these items in the LOM plan.

Heap Reprocessing
Austral Gold plans to reprocess the material in the three spent heap leach pads at the Guanaco site. The previous owner leached Heaps I and II from 1992 to 1997, while Austral Gold processed Heap III from 2010 to 2017. The material in each heap will be loaded onto trucks, hauled to the crushing facility, crushed to P80 of 3.3 mm, redeposited at a different heap leach pad, and releached to recover part of the remnant gold and silver. Austral Gold plans to reprocess the heaps in reverse order of their numbering: Heap III first, then Heap II, and lastly Heap I.

Austral Gold will reprocess Heap III from 2023 to 2027. Its material has a sufficiently small particle size distribution to feed it directly to the HPGR. After crushing, Heap III's material will be hauled to and deposited at a new heap leach pad called Heap IV. During Heap III's reprocessing campaign, Heap IV's pad lining system will be extended two times, once in 2024 and again in 2025, to provide capacity for receiving all of the material.

Austral Gold plans to reuse the Heap III pad for reprocessing the remaining two heaps. Heap II's campaign will commence in 2027 once Heap III's material has been removed, leaving its pad is available. Heap III's pad lining system will be extended in 2026 to accommodate all the Heaps I and II material. Heap II’s campaign will continue until 2031. Heap I will be reprocessed from 2030 until mine closure in 2033.

The material in Heaps I and II is coarser than that of Heap III and consequently requires additional crushing, first with the secondary crusher and then the HPGR. The secondary crusher will be available for Heap Reprocessing after the Inesperada open pit is exhausted.

The pre-production activities in 2022 include sourcing and leasing the mobile equipment, hiring personnel, installing the Heap IV pad lining system, and constructing the HPGR crushing facility.

Inesperada Open Pit
Mining will be carried out by a contractor using a conventional truck and shovel mining method with the mine operating 24 hours/365 days per year. All the key mining activities including topsoil/overburden removal, drilling, blasting, loading, and hauling will be carried out by contractors. The production equipment will be supported by bulldozers, graders, and water trucks (operated by the mining contractor). Austral Gold will be responsible for mine administration and technical services including grade control, engineering, surveying, and mine planning.

The local topography is generally flat and does not present any major challenges to open pit mining. The final pit is approximately 120 m deep. The mean topography elevation is 2,515 MASL with the final pit bottom located at 2,395 MASL. The pit will be mined as a single phase vertically, bench by bench, to the final pit extent.

Ore material will be hauled ex-pit and transported to the processing facility by truck, which will be contractor operated. Waste material will be sent to a waste rock dump located on the west side of the pit.

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The project infrastructure, including the processing facility at Guanaco, was refurbished and upgraded by Austral Gold between September 2009 and March 2010. GCM restarted leach pad stacking in September 2010 and the first gold bar was poured in December 2010. With the acquisition and start of mining at Amancaya, a milling and agitated cyanide leaching circuit was constructed, beginning operation in 2017. GCM discontinued loading of the heap leach pads in 2017 and subsequently directed all ore to the mill. Solution application on the heaps continued until operations were uneconomic at which time the ore was rinsed with water to remove residual cyanide and gold entrained in the heap.

GCM plans to reprocess the existing heaps (Heaps I, II, and III) by excavating the material, crushing it through a quaternary HPGR crushing circuit and placing the crushed material on a new heap leach, Heap IV. A fourth stage HPGR crushing circuit will be integrated into the existing 300 tph three stage crushing plant, which currently produces a P80 5.3 mm product, to produce a final product of P80 3.3 mm. The HPGR circuit design project is currently in the design and permitting stages.

The existing Guanaco operations and proposed Heap Leach reprocessing project includes:
• Crushing;
• Primary jaw crushing;
• Secondary cone crushing and screening;
• Tertiary cone crushing and screening;
• Trucking of ore to the leach pad;
• Heap Leaching, Carbon-in-Column (CIC) and Anglo American Research Laboratory (AARL) Carbon Elution, and EW;
• Permanent leach pads;
• Intermediate and pregnant solution ponds and pregnant solution pumps;
• CIC precious metal adsorption circuit;
• Acid wash column;
• AARL carbon elution circuit;
• EW;
• Barren solution tank and barren pumps;
• Drying oven;
• Induction furnace;
• Heap Reprocessing Project in the Design and Permitting Phases;
• Excavation of existing heap leach pads, Heaps I, II, and III;
• Crushing the material through a four stage HPGR crushing circuit to P80 3.3 mm;
• Loading the crushed material onto a new heap leach pad, Heap IV;
• Leaching and metal recovery using existing solution handling and carbon adsorption circuits;
• Milling, Agitated Cyanide Leaching, and Merrill Crowe Cementation;
• Reversing conveyor to feed crushed ore to either the heap leach operation or the milling circuit;
• Covered stockpile;
• Single stage ball milling circuit operated in closed circuit with hydrocyclones;
• Pre-leach thickener;
• Three stage agitated leach circuit;
• Three stage counter current decantation (CCD) thickening circuit;
• Filter feed tank and plate and frame pressure filters to recover solution and to produce filtered tailings;
• Loading of the tailings with a front end loader and truck haulage to the dry tailings storage facility.
• Dry tailings deposit;
• Refurbished Merrill-Crowe circuit for precious metal recovery including: Clarifying filters, De-aeration tower, Zinc cementation (i.e., precipitation), Precipitate filters.

Heap Leaching and ADR
The leach pad is designed in strips that are stacked to a height of three metres. After ore is dumped onto the pad by trucks, it is leveled using a dozer. Irrigation drip tubes are used to apply barren solution to the ore. Solution then percolates through the leach pad and is collected in a system of pipes. In the pipes, the pregnant solution flows by gravity to the pregnant solution pond. From the pond, the pregnant solution is pumped to the adsorption, desorption, regeneration (ADR) plant. While an intermediate pond is available for use as part of a solution enrichment system, it has never been used. An emergency pond is also available to accommodate excess solution that may be generated during extreme storm events or upset conditions.

The ADR plant has a design capacity of approximately 400 m3 /h. The adsorption circuit consists of one train of five CIC columns. Solution flows by gravity from column one through column five in sequential order. Solution flowing from column five is barren solution, which is pumped to the barren solution tank. Cyanide is added to the barren solution and is pumped to the leach pad for subsequent leaching of ore.

Activated carbon is advanced counter-currently to the solution flow. That is, fresh or reactivated carbon is placed in column five. On a batch basis, carbon is advanced from column five to column four, from column four to column three, and so on until loaded carbon is removed from column one and directed to the desorption circuit. In the desorption circuit, carbon is first acid washed. After acid washing the carbon is moved to a carbon elution column. The desorption circuit consists of two circuits that operate in parallel. One circuit is designed to treat two tonnes of carbon and the second circuit is designed to treat one tonne of carbon. After elution, the activated carbon is regenerated in a gas-fired carbon regeneration kiln. After regeneration, the carbon is returned to the CIC circuit.

The elution circuit is a split AARL circuit. During elution, hot caustic cyanide solution is used to strip the precious metals from the activated carbon producing another pregnant solution that contains higher concentrations of precious metals. In the split AARL circuit, eluate from the first half of the elution cycle is collected in the electrolyte tank. Solution from the second half of the elution, which has lower concentrations of precious metals, is collected in the eluate mix tank for use in the first half of the next elution cycle.

Solution from the electrolyte tank is pumped to the EW circuit. At Guanaco, three EW cells are operated in parallel. The precious metal is removed from the solution by plating onto steel wool cathodes. A high pressure washer is used to remove the sludge from the cathodes. The sludge is dried, mixed with fluxes, and smelted in an induction furnace to produce doré bars. The bars are shipped off-site for further refining.

Milling Operation
Crushed ore is reclaimed from the covered stockpile to the grinding circuit, which includes a single stage ball mill that operates in closed circuit with hydrocyclones. Ball mill discharge slurry is screened with a trommel and pumped to a cyclone cluster. The cyclone underflow is returned to the ball mill and cyclone overflow with a target grind size of P80 150 µm which flows to the pre-leach thickener. Thickener underflow at 50% solids by weight, is pumped to a three stage agitated leaching circuit, providing 48 hours of retention time. Overflow from the thickener is process water. Slurry discharges from leaching to the CCD thickener washing circuit.

Barren solution from the Merrill-Crowe circuit is used as wash water in the CCD thickening circuit and flows counter current to the slurry flow from thickener 3 to thickener 1. Overflow from thickener 1 is pregnant solution feeding the Merrill-Crowe plant. Underflow from thickener 3 is washed tailings. The tailings slurry flows to the filter feed tank. Two plate and frame pressure filters are used to wash and dewater the tailings to produce a filter cake containing less than 20% moisture by weight, which is loaded into trucks and transported to the dry TSF.

The Merrill-Crowe plant is an existing plant that was refurbished for use in the new milling circuit. Since Amancaya ore contains higher concentrations of silver than from Guanaco ore, the Merrill-Crowe process is preferred over activated carbon as the precious metal recovery process. Pregnant solution is pumped through clarifying filters where suspended solids are removed from the solution and on to the de-aeration tower. The de-aeration tower is a packed column that is operated under vacuum to remove oxygen from the solution to enhance the zinc cementation (commonly called precipitation) process. Zinc dust is added to the clarified, de-aerated solution where the gold and silver ions are reduced to form solid metal “precipitat