Gold mineralization is considered to represent an intrusion-related, low-sulphidation, quartzsulphide, Au and Cu deep epithermal system. These systems often host very fine (refractory) gold in sulphides.

Diatreme flow dome complexes vent to the surface and in all other cases host epithermal Au mineralization, locally cutting or telescoped over older porphyry manifestations.

Rather, the dominance of massive chalcedony in these veins is more typical of formation in an epithermal environment. Petrology work (Lohmeier, 2017) describes bornite replaced by chalcopyrite along with sphalerite (of unknown Fe:Zn ratio) and tetrahedrite as the sulphide minerals, typical of an intrusion-related fluid in a deep epithermal setting. Lohmeier (2017) also recognized a correlation between Au and Ag-Bi-Cu, typical of a low sulphidation deep epithermal geochemical signature.

While any possible association between Au and magnetite is unusual, the final event of quartz- pyrite mineralization is most certainly typical of the intrusion-related low sulphidation quartz- sulphide Au + Cu deep epithermal style.

Overprinting magmatic events include pre-mineral andesite domes, followed by emplacement of polyphasal dacite dome (including some transitional to andesite in composition) and associated diatreme (milled matrix) breccia events. The mineralization of low sulphidation Au is best developed in sheeted quartz veins, breccia clasts and very finely disseminated with a possible supergene component (Corbett, 2019).

Mineralization at the Fenix Gold Project straddles a regionally significant northwest trending structural zone, and mineralization is typically hosted in northwest trending structures.

Three structural systems have been defined at the Project; a northwest fault system, a tensional east-west system, and a late northeast fault system:

- The northwest fault system consists of three principal sub-parallel northwest striking faults which cross cut the northern portion of Fenix Central and Fenix North zones. Dips are vertical to sub-vertical. Strike slip movement partially controls the location of intrusions and mineralization.
- The East-West system is tensional from the NW system. Locally, the EW system is controlling the emplacement of the Black Banded Veins, which are associated with the gold mineralization.
- Post mineralization, sub-vertical northeast trending normal faulting that has divided mineralization into three blocks (Fenix North, Fenix Central and Fenix South)

Oxide-gold mineralization extends northwest over 2.5 km of strike and up to 600 m across strike. Drilling has traced oxide-gold mineralization to 600 m below surface and the resource remains open.

Microscope studies indicate that gold mineralization primarily occurs within black and grey banded veinlets (BBV and GBV) in the breccia complex and the dacitic dome, and secondarily within early chlorite-magnetite-quartz veinlets.

Gold mineralization may be encountered in phreatomagmatic breccia, surrounding hydrothermal breccia, in dacite porphyry and surrounding andesitic dikes and plugs.

Sheeted banded quartz veins vary from white to black/grey bands. The white vein portions comprise bands of massive chalcedony and saccharoidal to fine crystalline quartz. Crystalline quartz is deposited from a cooling fluid and is not an indication of temperature of formation. Vein margins are sharp although wavy coliform dark bands are similar to some epithermal veins.

The dark bands display only local magnetic character, but the dark colour results from most abundant secondary inclusions (Lohmeier, 2017), in a manner similar to other sheeted banded veins in the Maricunga Belt (Muntean and Einaudi, 2000). In hand specimen, higher Au grade mineralization is clearly associated with these veins, which may occur as submicroscopic free Au particles within the dark coloured inclusion-rich bands.

The Fenix Gold Project consists of an open pit mine which will be developed using conventional drill and blast techniques, with an excavator and truck configuration. The mining rate is 20,000 tpd of ore to the crusher, with low-grade to one of two stockpiles, and waste to the waste dump. The mining rate has been determined based on the processing rate, which is primarily a function of the available water. The water supply will be delivered to site by a fleet of trucks from Copiapo. The water supply rate was determined primarily by assessing the practical and sustainable limit to the number of trucks that can make the continual cycle from Copiapo to the mine.

For this mining rate and cost structure, the cut-off grade was determined using Whittle software to be 0.24 g/t Au. To further improve the economics and increase cash flow, a medium grade and lowgrade stockpile will be used. The medium grade material is between 0.30 – 0.4 g/t Au and lowgrade material is between 0.24 – 0.30 g/t Au. Both stockpiles will be located adjacent to the crusher, however the low-grade stockpile will be located close to the pad and maybe treated directly as ROM mineral if metallurgical work indicates an acceptable recovery.

The first year of production has an average production rate of 12,000 tpd of material placed on the leach pad, which reflects the ramp up from 0 to 20,000 tpd. This is due to the starter pit initial phases being located on topographic high points where there is limited work space. The mined grade is 0.76 g/t producing 80 koz of recovered gold.

Mining operates at the full 20,000 tpd capacity between years 2 and 13, and if required, minor top up from stockpiles will ensure that the mine operates at the total mining rate (ore and waste), set at 20.5 Mtpa. The grade mined during this period is 0.536 g/t Au recovering an average of 94.4 koz each year.

Between years 12 and 13 approximately 30% of production is rehandled from the low and medium grade stockpiles to achieve a 20,000 tpd processing rate, and between years 14 to 17 feed to pad is from 100% stockpile rehandle, with an average grade of 0.285 g/t Au recovering an average 39.6 koz from the leach pad each year.

The Fenix Gold Project has approximately 116 million tonnes of ore with an average grade of 0.49 g/t Au, which will be processed at a maximum rate of 20,000 tpd (7.3 million tonnes per year), giving a life of mine of approximately 16 years.

The results of the metallurgical test work carried out between 2010 and 2017 show that the mineral in the Fenix Gold Project is amenable for the recovery of gold by heap leaching.

The mineral will be mined by open pit methods; it will be crushed to 80% passing 4” in a primary crushing circuit and transported in trucks to heap leach pads with a lift height of 10 m. The feed will be leached with a dilute sodium cyanide solution and the gold will dissolve, the gold will be recovered from the pregnant leach solution (PLS) in an adsorption circuit with activated carbon and then recovered in pressure desorption and electro-deposition circuits. The electrolytic precipitate will be filtered and sent to a retort furnace and finally smelted in a furnace to obtain doré bars. The project includes the following unit operations:

- Crushing
- Primary crushing.
- Mineral transport and stacking.

- Heap leach
- Management of solutions.

- ADR plant
- Adsorption.
- Desorption and electro-deposition.
- Acid wash.
- Thermal regeneration.
- Smelting.

The design considers a recovery of 75% gold in the leaching process.