The Ermitaño project gold and silver deposits form as prominent east–west-trending veins and associated breccias in sub-aerial felsic volcanic rocks. The Ermitaño Vein is delineated by drilling along an 1,850 m strike length and vertically over 550 m, starting at surface.

The regional geology and the form, textures, alteration, and mineralization observed to date within the Ermitaño deposit are diagnostic of low-sulphidation epithermal mineralization. The Ermitaño Vein is hosted in a sequence of volcanic lavas and tuffs and displays epithermal minerals and textures.

Exploration programs that use a low-sulphidation epithermal model are considered appropriate for the Santa Elena and Ermitaño areas. First Majestic is using geochemical and geophysical surveys, and field X-ray fluorescence analyzers and spectrometers as part of its ongoing regional exploration program. Mapping, rock chip sampling and drilling of vein outcrops remain the primary exploration tools at Santa Elena and the Ermitaño project.

Mineralizing fluids are interpreted to have used the Ermitaño Fault as a conduit to form the Ermitaño Vein and sub-parallel tertiary veins which drilling has delineated over 1,800 m along strike and 550 m down dip. The vein is best developed where the structure cuts the older brittle volcanic rocks, where the older volcanic rocks are juxtaposed with younger brittle volcanic rocks, and where the structure shows deflection.

A four-stage vein paragenesis is observed for the Ermitaño Vein. Stage 1 consists of grey quartz, normally cementing breccias, well banded white quartz + pyrite, and calcite pseudomorphs. Stage 2 is dominantly banded and crustiform textured green veins and typically hosts the highest grades of gold and silver. Stage 3 consists of several hydrothermal/tectonic breccia facies with some calcite pseudomorphs, tensile veins, and crack and seal textures. Stage 4 is dominated by white quartz fragments in a hematite + silica cement. The vein assemblage also includes minor adularia, and rarely fluorite and barite.

Sulphide abundance within the Ermitaño Vein, stockwork, and surrounding veins is typically <1–2%, dominated by pyrite with minor galena, sphalerite, pyrrhotite, and chalcopyrite. Gold occurs as native gold or electrum, and silver occurs as electrum, acanthite, and argentite.

The Santa Elena mine operation consists of the Santa Elena underground mine and the Ermitaño project. Mining activities are conducted by both First Majestic and contractor personnel. The Santa Elena and the Ermitaño deposits vary in dip, thickness, and geotechnical conditions along strike and dip. Multiple mining methods are required to achieve the maximum efficient extraction of mineralized material at site. Three well-established methods were selected for mining extraction at Santa Elena:
• Longitudinal longhole stoping;
• Avoca;
• Cut-and-fill.

The Avoca mining method was selected for the Ermitaño project.

Site geology at the Ermitaño project consists of Late Cretaceous andesite and rhyolite volcanic rocks dipping 10° to 45° east-northeast with mineralization hosted by major structures. The geology and mineralization are similar to the Santa Elena deposit located 8 km to the northwest. Low sulphidation epithermal gold and silver mineralization is hosted in the steeply dipping, east trending Ermitaño Fault and other subparallel secondary structures. Vein assemblages consist of massive, banded, bladed, and stockwork quartz, calcite, and adularia. The veins are commonly brecciated and associated with argillic alteration.

Based on the configuration of the deposit, longhole open stoping was selected as the mining method. Three variations of longhole open stoping were considered, driven by economics: Avoca longhole stoping with backfill (cemented and uncemented rockfill), and longhole stoping with pillars. With a typical 75° dip and 25 m floor to floor spacing, a maximum stope strike length of 17 m with instope HW support, or 14m without support was recommended.

Longitudinal longhole mining is suitable where the dip of the orebody is 45° or greater, and the mineralized material is of sufficient width and grade that the estimated dilution does not eliminate the profitable recovery of the ore. Longitudinal longhole mining consists of an undercut level and an overcut level, each accessed from the main ramp or a transportation drift. Each sill is accessed perpendicular from the ramp, and then developed along strike of the vein to the economic extents of the ore. Once sill development is completed on each level, a longhole rig drills production holes between the sills, which are then blasted in retreating vertical slices until the stoping panel is completed. Stope panel lengths are based on a hydraulic radius calculation considering the geotechnical conditions of the area. Once a sufficient strike length has been extracted, mining can progress up-dip and extraction can recommence by opening another mining location. Stopes are designed to a 25 m height (floor of the undercut to the floor of the overcut level) and is the method used when there is no top access available to the planned stoping activities, such as at boundaries of economic mineralisation or at the final lift for mining blocks.

Avoca mining uses longhole stoping techniques to extract the mineralisation. The method is similar to longitudinal longhole stoping, but Avoca also uses a footwall drift that runs parallel to the strike of the orebody offset by 15-20 m (predominately in waste) to access the mineralisation at regular intervals. Secondary crosscuts are then driven into the sill at 35 m intervals, which gives independent access to each stoping panel and allows filling and extraction to occur at different locations along the strike of the mineralisation. The method is planned to be used for the extraction of the levels within a mining block below the sill pillar (lifts 1-4) and uses a sublevel spacing of 25 m between the overcut and undercut levels and uses 102 mm production blastholes.

A minimum mining width of 2.5 m was designed for all mining methods. This is based on a minimum vein width of 1.5 m, plus an allowance for 0.5 m on the hanging wall and footwall. The 0.5 m of dilution on the hanging wall and footwall are added regardless of the vein width, to ensure that the mineable shapes include a reasonable amount of planned dilution. Based on an estimate of mining costs, a COV was calculated and then applied to the different portions of the deposit identified for mining.

The development design incorporates a minimum stand-off distance of approximately 50 m to locate the ramp away from mineralisation. This distance is assumed to avoid damage to the ramp due to ground stress changes and blasting from stope extraction. This stand-off distance also allows sufficient space between the ramp and the orebody for the excavation of the level accesses, stockpiles and sumps, and where needed, slashing for cut-and-fill drifts. A ramp mined with an arched profile will be excavated to a width of 5.0 m and a height of 5.0 m. This profile allows sufficient room to accommodate current underground fleet as well as secondary ventilation ducting and service piping. Other planned development includes the following:
• Access drifts;
• Sills (development on mineralisation);
• Operating waste development (sills mining material below cut-off);
• Sumps;
• Escapeways and accesses to the escapeways;
• Return airways and accesses to the return airways;
• Stockpiles; and,
• Ore-passes and the access to the ore-passes, where required.

The existing crushing circuit at the Santa Elena plant will be used for both Ermitaño material and the Santa Elena blend.

The crushing circuit has a nominal capacity of 240 t/hr and the flowsheet consists of three reduction stages: primary, secondary, and tertiary crushing. The ore from the intermediary stockpile is fed into a coarse ore bin, which is fed to a 20” x 36” primary jaw crusher and reduced to -3” to -4”. This product is transported by a conveyor belt to an 8' x 16’ double deck vibrating screen (scalper). The oversize of the vibrating screen flows into the secondary crusher, an XL400 FLSmidth Raptor Crusher, which reduces the size to ~1”. The discharge from this crusher feeds a closed tertiary circuit, which has two XL400 FLSmidth Raptor crushers and a 10 'x 20' double deck vibrating screen.

The upper deck has 0.75” x 2,375” openings, while the lower section has ¼” x 1” openings. The underside of the screen contains material from 90–97% minus ¼” (6,350 µm). The oversize of the vibrating screen flows back into the tertiary-crushing closed circuit. The undersize product from both vibrating screens is transported by a belt conveyor and discharged into the fine ore stockpiles. The particle size in the fine ore stockpiles has approximately 95% minus ¼” and average moisture content of 3–4%.

A diverter chute and a couple of additional conveyor belts will be installed in Q1-2022, providing the ability for the crushed final product conveyor belt to report not only to the Santa Elena blend crushed ore stockpile but also to the Ermitaño crushed ore stockpile as shown in Figure 17-4. This new arrangement will keep the different ores types separate, providing an additional level of flexibility for campaign processing, facilitating the implementation of different grinding and processing settings.

The crushed ore from respective stockpiles, is fed through a conveyor belt to a primary grinding circuit equipped with a 15’ D x 21-½’ (diameter by length) FLSmidth ball mill operating in closed circuit with an hydrocyclone classification system and a pair of pumps, one operating and one stand-by. Cyanide solution and lime are added to the primary grinding circuit. The final ground product contains approximately 65% -200 mesh particles, equivalent to 106 µm P80. The product from the primary grinding circuit is pumped to the secondary grinding circuit.

The secondary grinding circuit consists of an Outotec High Intensity Grinding Mill (HIG-Mill) with a hydrocyclone classification system, and an agitated buffer tank. The product from the ball mill reports into the agitated buffer tank called rougher feed tank. A first stage of classification is fed from this tank, which produces an overflow of 85% -20 µm separating the slimes. The underflow is re-classified in another cyclopack, that operates in closed circuit reporting the overflow back to the rougher tank. The underflow from the second cyclopack reports to a pumpbox which feeds the secondary grinding HIG-Mill, reducing the particle size to a range of 70-75% -45 µm. The secondary grinding circuit produces two products: slimes (30% by weight) and HIG-Mill product (70% by weight). Both products go to two different thickener tanks which their underflow slurry reports to the leaching circuit.

With the introduction of mineralized material from Ermitaño, the plant will continue to process the Santa Elena blend in campaigns alternating with fresh material from Ermitaño. For the achievement of optimum levels of metal recoveries and the corresponding maximum metal production, the Santa Elena ore will be processed at higher throughput rates than the Ermitaño ore during their corresponding production campaigns. Average operating throughput targets are 3,350 and 2,350 tpd for Santa Elena and Ermitaño, respectively. The rationale behind the throughput difference is due to the higher hardness, abrasiveness, and particle size sensitivity of the Ermitaño ore when compared to Santa Elena ore. Both campaigns are expected to achieve a final particle size 50 microns P80 at their respective optimum operating conditions until the commissioning of the additional tailings filtration circuit, which is based on pressure filtration. After the commissioning is completed in Q3-2022 the grind size ........