The Cerro Blanco deposit is a classic hot springs-related, low sulphidation quartz-chalcedony-adularia-calcite vein system.

The Cerro Blanco district consists of localized precious metal veins and small stockwork deposits which occur over an area more than 20 km in diameter. The Cerro Blanco gold deposit occurs within the largest mineralized area in a hydrothermal alteration zone covering an area about 5 km long and 1 km wide. This zone exhibits the effects of strong, pervasive hot spring type hydrothermal alteration.

The current gold resource occurs under a small hill and is confined within an area about 400 m by 800 m. The gold deposit is characterized by both high angle and low angle banded chalcedony veins, locally with calcite replacement textures. High angle mineralized faults and discontinuous stockwork zones host some of the highest gold grades. Gold bearing structures in the Cerro Blanco Project area extend 2 km to the northwest of the gold deposit and occur largely confined within the hydrothermal alteration zone. Exposures are poor and locally covered by alluvium and post-mineral rocks. Veins outside the resource area tend to be narrow and host narrow high-grade shoots. They are, so far, of limited economic interest. Gold bearing structures extend at least 1 km south and southwest of the deposit under valley fill and post-mineral rocks. The southern area has good exploration potential for additional veins. However, exploration in this area was discontinued due to the presence of boiling water flashing to steam.

Geothermal well No. 7 located about 0.5 km southwest of the deposit encountered a 27 m zone averaging 6.3 g/t Au and 22 g/t Ag at a depth of 634 m. The upper 6 m of this zone averages 23.9 g/t Au and 79 g/t Ag.

Vein Zones
A petrographic description of four vein zones, from Economic Geology Consulting (Thompson, et al., 2006), concluded that the veins consist of crustiform banded chalcedony, quartz, adularia, calcite, sulphides, and visible gold. The samples represent nearly 300 m elevation range. Bladed calcite or pseudomorphs after bladed calcite were seen in all four samples. Bladed calcite is a rapid deposition texture, common when calcite precipitates from boiling fluids. A wide variety of recrystallization textures in quartz and chalcedony may also indicate changing fluid conditions and periodic boiling. The only significant depth-related textural or mineralogical change noted was an increase in quartz relative to chalcedony (Thompson, et al., 2006).

Opaque minerals include pyrite, marcasite, acanthite, miargyrite (one sample), and visible gold. Disseminated grains occur in most textures of quartz, chalcedony, adularia, and calcite. Sulphides and visible gold also fill interstices between adularia, quartz, and chalcedony (Thompson, et al., 2006).

Hydrothermal Alteration
The boiling hydrothermal fluids that formed the Cerro Blanco vein system produced an even larger volume of intensely altered wall rock. Alteration types and zoning are typical of low sulphidation epithermal systems. The remnant sinter above the deposit suggests that the Cerro Blanco system remains largely intact.

The most impressive alteration feature at Cerro Blanco is the large “silica cap” that typically begins at or below 400 m elevation and continues upward to the surface. Silicification continues locally down to 300 m elevation along fault zones and in favourable rock types. Overall, the Cerro Blanco silica cap averages 400 m wide and is 200 m deep for at least a kilometre in strike.

The potentially mineable resources at the Cerro Blanco deposit will be extracted using a combination of longhole stoping (LH) and drift and fill (DF) underground mining methods with paste and rock backfill. The proposed mine plan is expected to reach a target production rate of 1,250 t/d over a total mine life of 10 years. LH stoping will account for about 88% of total production and the remaining 12% will come from development material and DF. The Cerro Blanco deposit will be accessed from surface via a series of declines, and all mineralized material and waste rock will be trucked out of the mine via these declines. In addition to the four existing ventilation raises, a new ventilation raise will be required. To supplement the ventilation provided by the raises, as the ramps are being driven, shorter internal ventilation drop raises will ensure air at the active development face.

The test work has shown that Cerro Blanco mineralization can be treated using three stage crushing, grinding, leaching, CCD thickening and Merrill Crowe for the recovery of gold and silver doré.

Material from the underground mining operations will feed a vibrating grizzly - primary jaw crusher system, which will produce a crushed product size P100 of 115 mm.

Material will be stockpiled near the jaw crusher or direct dumped through a static grizzly into a dump pocket. Stockpiled run of mine (ROM) material will be re-handled by a front-end loader and fed into the crusher. The material will discharge through a static grizzly into a feed hopper. Oversize material from the static grizzly will be removed, for later size reduction, using a rock breaker.

The secondary screen feed conveyor will collect primary crushing circuit product and feed a triple deck vibrating screen. The oversize material from the top two decks, at a size of +30 mm, will be conveyed to the secondary crusher surge bin. Material from the secondary crusher.

Material from the third (lower) deck of the secondary screen will feed the tertiary crusher. The tertiary crusher will reduce the material to a nominal product size of approximately P80 of -10 mm with a CSS of 10 mm. Both the secondary and tertiary cone crusher products will be recycled back to the secondary screen, together with the jaw crusher circuit products.

The grinding circuit will consist of a primary ball mill followed by a secondary ball mill and gravity recovery circuit, operating in closed circuit with a hydrocyclone cluster. The grinding circuit will operate at a nominal throughput of 57 t/h (new feed), and produce a final particle size P80 of 75 µm. The ball mills will both be 3.5 m in diameter by 5.5 m in length driven by 933 kW motors.

The undersize from the screen will flow by gravity to the pre-leach thickener. Flocculant solution (anionic polyacrylamide) will be added to the thickener feed to promote the settling of fine solids. The thickener, which is 8 m in diameter, will thicken the slurry to approximately 50% solids. Thickener overflow will flow by gravity into the process water tanks to be used as make-up water in the grinding circuit and the thickener underflow will be pumped to the leach circuit.

The pre-leach thickener underflow will be pumped to six 12.0 m diameter by 12.0 m high mechanically agitated leach tanks. The circuit will be operated as a single leach train providing 96 hours of residence time. All leach tanks will be located outside and adjacent to the main process building.

Lime slurry will be added at a rate of 5.3 kg/t to the first and second leach tanks to maintain protective alkalinity at a design pH of 10.5 - 11.0, to prevent evolution of hydrogen cyanide gas (HCN). Sodium cyanide at a concentration of approximately 3,000 ppm will be used to leach the gold and silver into solution. Oxygen will be sparged to the bottom of the leach tanks to promote the leach reaction.

The slurry from the last leach tank will be pumped to a series of four 12 m diameter CCD thickeners. The slurry will flow from the first thickener through to the last thickener. The overflow solution will flow countercurrent to the slurry flow to recover the majority of the soluble metals as pregnant solution at the first thickener overflow. The thickener overflow solution will report to the Merrill Crowe circuit and the thickener underflow to the cyanide destruction circuit.

The solution from the first CCD thickener will be pumped through a clarifier filter to remove any residual particulate, and then oxygen will be removed from the clear solution by passing it through a vacuum de-aeration column. Zinc dust will be added to the clarified, de-aerated solution, to precipitate the gold and silver.

The solution containing the gold and silver precipitate produced will be filtered. The filter solids will be dried and then smelted in an induction furnace to produce doré. The barren filtrate solution will circulate back to the last thickener in the CCD train as the wash solution.