Los Verdes contains molybdenum-(copper-tungsten) mineralization in breccias related to felsic intrusive rocks. A number of features of the deposit appear to place it in the category of a molybdenum-bearing breccia pipe related to a larger porphyry copper-molybdenum system. The indicative features are postintrusive breccias with interstices partly filled by fine-grained tourmaline, molybdenite, copper and varying amounts of tungsten and base-metals minerals, and late quartz-pyrite. Although Los Verdes has a tabular form, rather than pipe-shaped, it meets the definition of this type of deposit.

The mineralization at Los Verdes is of magmatic-hydrothermal origin, consisting originally of sulfide minerals, principally chalcopyrite, pyrite, and molybdenite, and apparently related to the granodiorite. Weathering near the surface has converted some of the mineralization to an oxide facies (principally ferromolybdite plus iron oxides). Some of the metals liberated by oxidation of sulfides have percolated downward, and have re-precipitated as secondary sulfides, mainly chalcocite, in the vicinity of hypogene sulfide minerals.

The mineralized zone on the Los Verdes property is about 300 meters northeast-southwest, and 200 meters northwest-southeast. Its eastern edge is at the Moly Pit, where it is cut off by the Buena Vista Fault. The mineralized zone is centered beneath the ridge extending southwest from the Moly Pit.

The Los Verdes mineralization is centered on a lens-shaped body of veining and stockworking within the granodiorite. The lower levels of the drilled portion of the granodiorite may be barren of mineralization but are typically cut by veins and veinlets of quartz with pyrite. This level is referred to a “hypogene granodiorite”.

At higher levels, the veining and brecciation become abruptly greater, with introduction of copper sulfides and molybdenite. Brecciation and filling of voids by tourmaline and chlorite becomes more abundant upwardly.

A distinct supergene zone is present at Los Verdes, overlying the hypogene mineralization. It is readily defined by Cu values much greater than the oxide zone, often over 1% Cu. Mo and W may be elevated compared to the oxide zone, but less notably. Copper-oxide minerals (notably malachite and azurite) often occur at the top of the zone.

The surface of the mineralized zone at Los Verdes is generally underlain by a near-surface oxide zone, typically carrying about 0.1% Mo, mainly as ferrimolybdite, and up to 0.2% Cu, largely as traces of malachite and azurite. While the same copper minerals may occur in both the oxide and the secondarily-enriched zone, the transition of molybdenum minerals is quite abrupt: ferrimolybdite above, and molybdenite below. Jarosite, and ferritungstite also occur, in addition to limonite. These minerals occur as disseminations and in weakly-defined veinlets in granodiorite.

The mine at Los Verdes will be accessed using conventional truck-shovel open pit mining techniques. Open pit mining operations will be based on a 21 hour per day, 6 days per week schedule for a nominal production rate of approximately 3500 tonnes per day. Mineralised material will be drilled and blasted on 5 meter high benches using a staggered blast hole pattern. Wherever possible waste will be drilled using 10 meter high benches using a wider blast hole spacing. All blasting will be performed using bulk ANFO (ammonium nitrate/fuel oil) explosives.

Primary loading equipment will be hydraulic excavators paired with articulated haul trucks. A preliminary waste storage location has been located approximately 1.5 km southwest of the open pit area. Mineralised material will be hauled by the mine trucks approximately 1.5 km to the main processing plant location. It has been assumed that all mining operations will be performed and directly supervised by a capable Mexican mining contractor.

A portable crushing and screening plant processing approximately 3500 tonnes daily is considered in the design. Crushing operations are currently envisioned as a two-stage circuit -- primary jaw crusher and secondary cone crusher. Crushing will be performed on a nominal 6 days per week schedule. All crushing equipment and related stockpiles will be located close to the process plant site.

ROM material is trucked to the crushing plant and dumped to a feed hopper. The 2-stage crushing reduces the rock from a maximum feed size of 400 mm down to 80% passing 18 mm. The crushed material is conveyed to a stockpile which is designed to have a capacity of 10,000 tonnes adequate for 3 days of plant feed requirements.

An external contractor will supply and operate the crushing equipment as well as the transfer of crushed material to the stockpile. All crushing and transfer equipment will be portable in nature and independently powered via diesel drives.

Crushed ma ........