At El Castillo, gold is mainly associated with pyrite occurring as fracture fillings or stockworks and also occurring within areas of hydrothermal brecciation. Pyrite with gold also occurs as disseminations especially within intrusive rocks. Within the mine the host environment for gold mineralization is dominated by an alternating pattern of sediments and parallel intrusive sills that strike to the northwest and dip steeply to the northeast. The sedimentary units generally vary from 20 to 40 metres wide as do the intrusive sills. Many of the sills appear to have intruded along bedding planes by splitting the tabular sedimentary blocks into their present positions. This geologic event resulted in the unique alternating pattern of sediments and intrusive sills/breccias that are observed throughout the mine area. Extensive fracturing of the sedimentary blocks created favorable secondary permeability for the deposition of gold mineralization predominately associated with pyrite. As a result of this ground preparation, the northwest striking sediments can be better mineralized than the surrounding intrusive rocks.

There are two main controls to mineralization. The more important of these is a close association between gold and sedimentary stratigraphy that generally strikes northwest and dips to the northeast. The favored permeability and chemistry of these rocks strongly influenced the distribution and geometry of mineralization. The second control to mineralization is related to a northeast structural fabric that provided the main conduits to the mineral system. The combination of these geologic controls resulted in a northeast elongated gold zone that measures approximately 1,600 metres by 1,300 metres.

As with the nearby El Castillo property, the San Agustin Project does not fit entirely into an epithermal classification. The San Agustin deposit appears genetically and spatially related to a quartz monzonite stock with intense phyllic alteration and local tourmaline breccias. These factors may point towards a telescoped system associated with a deeper porphyry center. This is supported by broad zones of potassic alteration that are overlapped by pervasive phyllic alteration; however, locally on surface and in some drill holes boiling textures, suggestive of an epithermal system do occur. Mineralization is mainly associated with sulfides that fill fractures and occur in the matrix of hydrothermal breccias. These form an extensive system of sulfide stockworks dominated by pyrite with lesser percentages of sphalerite and galena. Mineralization is often contained within adularia haloes and can be associated with calcite veinlets.

The mining method employed at the El Castillo Mine consists of traditional open pit drill and blast operations followed by excavator loading of rigid body haul trucks for ore transport to heap leach pad or crusher with waste transported to designated dump locations.

San Agustin Pit, was designed with five mining phases and contains 72.4M t of Indicated mineral resources at an average grade of 0.32 g/t Au and 10.6 g/t Ag. The life-of-mine strip ratio is 0.39:1. Pit resources were broken into two different material types designated for heap leach processing: high-grade and low-grade. At a 6M tpy production rate of high-grade material during the first year and then increasing to 10.8M tpy from the second year to the end of mine life, it is expected that the potential mine life will be 6.5 years. The production schedule targeted a consistent total mine tonnage of approximately 18M tpy, consisting of high-grade, low-grade, and waste material.

The dimensions of the San Agustin Pit are 1,500 m in the east-west and 1,100 m in the north-south directions. One primary waste dump was designed and located 500 m south of the San Agustin Pit. An overview of the San Agustin Pit and waste dump.

El Castillo
El Castillo currently processes gold ore through a conventional heap leaching operation that includes two pads; the East pad and the West pad. Stacked ore is leached with a low-grade cyanide solution and the resulting pregnant leach solution is processed in a carbon adsorption circuit to extract gold. The loaded carbon is trucked to Argonaut's La Colorada Mine for processing through the Corporation's centralized gold recovery plant.

San Agustin
The San Agustin Mine is an open-pit mine with a heap leach operation utilizing a multiple-lift, single-use leach pad. Heap leaching was initiated during September 2017 and began 2018 operations at the rate of 17,000 tonnes per day. During 2019, the crushing and stacking capacity was expanded by an additional 10,000 tonnes per day. Leach-grade ore is crushed, stockpiled, reclaimed, and stacked on the leach pad with a conveyor stacking system. The stacked ore is leached with a low-grade cyanide solution and the res ........