The Caylloma polymetallic and silver-gold rich veins are characteristic of a typical low sulfidation epithermal deposit according to the classification of Corbett (2002) having formed in a relatively low temperature, shallow crustal environment. The epithermal veins in the Caylloma District are characterized by minerals such as pyrite, sphalerite, galena, chalcopyrite, marcasite, native gold, stibnite, argentopyrite, and various silver sulfosalts (tetrahedrite, polybasite, pyrargyrite, stephanite, stromeyerite, jalpite, miargyrite and bournonite). These are accompanied by gangue minerals such as quartz, rhodonite, rhodochrosite, johannsenite (Mn-pyroxene) and calcite.

Veins in the Caylloma District show structural patterns and controls typical of other vein systems hosted by Tertiary volcanic rocks in the western Peruvian Andean range. The Caylloma District vein system was developed as a set of dilatational structures as a consequence of tension generated during the main compressional event of the Andes. Veins are persistent along strike and dip. Locally, veins are displaced by post-mineral faulting along a north-northwest bearing. Horizontal displacement along these faults is minor and ranges from centimeters up to a few meters. No significant vertical displacement is observed on the structures. The vein system is not affected by any folding.

Three types of hydrothermal alteration have been identified at the Caylloma Mine: (1) quartz- adularia; (2) quartz-illite; and (3) propylitic. The quartz-adularia (+pyrite +/-illite) alteration is restricted to the margins of the veins, with the thickness of the altered zone being generally proportional to the thickness of the vein. The width varies from a few centimeters to a few meters. Quartz replaces the volcanic matrix in the rocks, and quartz plus adularia occur as small veinlets or colloform bands. Pyrite is disseminated in the veinlets and in iron-manganese minerals in the wall rock. Illite is a product of alteration of the plagioclase and matrix of the volcanic host rocks. Quartz-adularia is absent in the upper parts of the vein systems. The alteration assemblage in the upper portions of the vein systems consists of a narrow selvage of quartz-illite near the vein. Quartz-illite grades into quartz-adularia at depth. Propylitic alteration is widespread throughout the property and may be regional in nature and unrelated to mineralizing events. The propylitic alteration is a fine aggregate of chlorite, epidote, calcite and pyrite.

There are two distinct types of mineralization at the Caylloma Mine, one with predominately elevated silver values (San Cristobal, La Plata, Bateas, San Carlos, Apostoles, San Pedro, and El Toro veins), and the other being polymetallic with elevated silver, lead, zinc, copper, and gold values (Animas, Nancy and Santa Catalina veins).

A supergene oxide horizon has been identified which contains the following secondary minerals: psilomelane, pyrolusite, goethite, hematite, chalcocite, covelite and realgar (Corona and Antimonio veins). The oxide zone is thin, with no evidence of secondary silver enrichment.

Veins are tabular in nature, with open spaces filled by episodic deposition of metallic sulfides and gangue minerals. According to Echavarria et al., (2006) most of the minerals, both silver and base metals, are related to the deposition of manganese mineralization occurring in bands, comprised of quartz, rhodonite, rhodochrosite and sulfides.

Vein systems at the Caylloma Mine have a general northeast-southwest bearing and predominant southeast dip. Host rocks are pyroclastic breccias, effusive andesitic lavas and volcaniclastics of the Tacaza volcanic group.

There are two different types of mineralization at Caylloma; the first is comprised of silver- rich veins with low concentrations of base metals. The second type of vein is polymetallic in nature with elevated silver, lead, zinc, copper, and gold grades.

Mineralization in these vein systems occurs in steeply dipping ore shoots ranging up to several hundred meters long with vertical extents of over 400 m. Veins range in thickness from a few centimeters to 20 m, averaging approximately 1.5 m for silver veins and 2.5 m for polymetallic veins.

Silver veins
The silver vein systems outcrop in the central and northern portions of the Caylloma District, with the best exposures of mineralization between the Santiago River, Chuchilladas and Trinidad streams. The mineralization is composed primarily of colloform banded rhodochrosite, rhodonite, and milky quartz, with silver sulfosalts present in certain veins. Vein systems extend to the eastern flank of the Huarajo Stream. Exposures in this area consist of quartz-calcite with low concentrations of manganese oxides. Silver veins can be sub-divided into two groups, 1) those that have sufficient geological information to support Mineral Resource estimates and 2) those that have been identified as exploration targets.

1) Bateas/Bateas Piso/Bateas Techo, La Plata/Cimoide La Plata, San Cristobal, San Pedro, San Carlos, Paralela/Ramal Paralela, Carolina, and Don Luis II.
2) Eureka, El Toro, San Pedro Oeste, Apostoles, Santa Rosa, La Peruana, Vilafro Sur, Cerro Vilafro, Cailloma 6, Condorcoto, Llocococha, Pampuyo-Pumanuta, Giro, Antacollo.

Polymetallic veins
A series of polymetallic veins has been identified in the southern and central portions of the Caylloma Mine. These vein systems tend to be greater in strike length and thickness when compared to the silver vein systems. The main metallic minerals associated with the polymetallic veins are galena, sphalerite, pyrite, chalcopyrite, and in some zones pyrargyrite. The polymetallic veins can also be sub-divided into two groups, 1) those that have sufficient geological information to support Mineral Resource estimates and 2) those that have been identified as exploration targets.

1) Animas, Animas NE, Cimoide ASNE, Ramal Techo ASNE, Santa Catalina, Soledad, Silvia, Pilar, Patricia, Nancy, and Rosita veins.
2) El Diablo and Antimonio veins.

The mining method applied in the exploitation of the main vein (Animas) is overhand cut-and-fill using either mechanized, semi-mechanized or conventional extraction methods. All mining is undertaken by contractors in a southwest to northeast direction following the strike of the vein. Production capacity at the mine is 1,500 tpd. The following describes the cut-and-fill mechanized, semi-mechanized, and conventional extraction methods.

Mechanized cut-and-fill
Mechanized mining uses a jumbo drill rig and scoop tram for loading. The ore haulage is performed by trucks. Rock support is applied through rock bolts and shotcrete. The average mining width ranges between 3.5 m and 17 m. Mechanized mining is regarded as only being suitable for the Animas, Animas NE and their associated splays, as well as the Nancy vein based on the geological structure and geotechnical studies. Mechanized cut-and-fill comprises 93 % of mining planned in the LOM.

The mechanized mining sequence includes: drilling (with a jumbo drill rig), blasting, support, loading (with a scoop tram) and haulage.

Semi-mechanized cut-and-fill
Semi-mechanized mining is performed using handheld drilling equipment (jacklegs) and scoops for loading. Ore haulage is performed by truck. Rock support is supplied using rock bolts installed using manual drilling and installation techniques. Semi-mechanized mining is applied to narrow veins with average widths between 0.8 m and 2.0 m.

The semi-mechanized mining sequence involves: drilling (with jacklegs), blasting, support, loading and haulage. Depending on vein width, once the ore has been extracted the walls have to be drilled and blasted in order to allow the minimum working width, especially for the loading equipment.

Conventional cut-and-fill
Conventional mining is performed using handheld drilling equipment (jacklegs) and scrapers for loading. The ore haulage is done with trucks and the support is applied with rock bolts in manual form. This system is applied in narrow veins with average widths between 0.5 m and 0.8 m. This mining method is only applicable to the Bateas, La Plata, Cimoide La Plata and San Cristobal veins that are scheduled for mining in the final years of the LOM.

The mining production period extends from 2019 to 2023, almost five years. At full production the planned mining rate is 1,500 tpd (535,500 tonnes per annum). Planned LOM production is 2.63 Mt at an average silver grade of 77 g/t, gold grade of 0.18 g/t, lead grade of 2.11 %, and zinc grade of 3.69 %.

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The Bateas processing plant is a typical flotation operation and consists of five stages: crushing; milling; flotation; thickening and filtering and tailings disposal. Each of the main stages is comprised of multiple sub-stages. A summary of each stage is as follows:

- Crushing: includes three stages, primary, secondary, and tertiary;

- Milling: includes two stages, primary and secondary;

- Flotation: consists of two operating flotation circuits (lead–silver, and zinc) and one copper flotation circuit on standby;

- Thickening and filtering are performed separately for the concentrates, which after filtering undergo a drying process before being placed in their respective storage bins to await transportation;

- Tailings disposal: Final tailings are classified through cyclones. The coarse fraction (underflow) is placed onto a concrete pad and transported to the mine to be used as hydraulic fill. The finer fraction (overflow) is pumpe ........