Navidad mineralisation is epithermal, as demonstrated by widespread open space-filling crustiform and cockade textures in the gangue minerals (carbonate, barite) and sulphide assemblages. The abundance of base metals, combined with carbonate-rich gangue, suggests that the deposit is intermediate, rather than low, sulphidation in style. Typical high sulphidation sulphides and gangue minerals are absent, but there is rare late stage kaolinite and minor hydrothermal alunite that implies late ingress of a hypogene acid fluid.

In all of the Navidad deposits the gangue minerals are principally calcite with minor barite. Silica is less important and occurs mostly as chalcedony and late amethyst. Ore minerals recognizable with a hand lens include: native silver, clots of black sulphide comprising argentite/acanthite, discrete grains of sphalerite, galena, chalcopyrite, cuprite, bornite, native copper and copper carbonates (malachite, azurite). Similar styles of mineralisation and a similar paragenesis occur in most of the deposits. However, the proportion of sulphides varies considerably. Loma de La Plata is silver-rich, but is sulphide-poor and contains very low levels of lead, zinc and copper. Various pulses of mineralisation are observed, principally at Galena Hill.

The principal metal association is Ag-Pb. Other associations include Ag-Pb-Cu and Cu-Ag and, more rarely, Ag-Zn. Occasionally there is Ag only, or Cu-Pb-Zn or simply isolated occurrences of these base metals. This suggests that deposition occurred through successive pulses of mineralisation. Gold appears to be totally absent from the system.

Mineralisation is mostly hosted in the upper latite, but important mineralisation occurs in the lower latite at Galena Hill. In a few places the underlying andesite also hosts high grade mineralisation. Deposits with mostly latite-hosted mineralisation include: Loma de La Plata, Valle Esperanza, Calcite Hill, and Galena Hill. Sedimentary rocks and volcaniclastics that overlie or are laterally equivalent to the upper latite also host significant mineralisation. Deposits where the mineralisation is dominantly hosted by these rock types include Calcite NW, Navidad Hill, Barite Hill, and Connector Zone.

High grade mineralisation mostly occurs in permeable host rocks. Examples of primary porosity include coarse volcaniclastic rocks and autobrecciated lava flows. Secondary porosity occurs as crackle brecciation of the brittle lava flows, hydrothermal eruption breccias, and tectonic breccias. At both Valle Esperanza and Loma de La Plata, the autobrecciated upper latite acted as an aquifer, sealed by overlying organic-rich sedimentary rocks (mudstones, limestones). The sediments were unconsolidated and are commonly slumped. Mixing of reduced water, derived from the organic-rich sediments, and rising metal- laden hydrothermal fluid probably triggered sulphide precipitation.

To date, the Navidad Project comprises eight individual mineral deposits in three separate mineralized trends (Navidad, Esperanza and Argenta trends). The six deposits of the Navidad Trend occur along strike over a distance of about 5.8 km and are essentially continuous. They comprise, from northwest to southeast: Calcite NW, Calcite Hill, Navidad Hill, Connector Zone, Galena Hill, and Barite Hill. The Valle Esperanza deposit occurs on the east flank of the Esperanza Trend and is found approximately 400 m south-southwest of Galena Hill. The Loma de La Plata deposit occurs in the north part of the Argenta Trend, approximately 2.2 km southwest from Calcite Hill.

The mining will be done by conventional open cut mining methods with the ore and associated non-economic material being mined on 5 m high benches and the non-economic material only tonnage being mined on 10 m high benches. The ore and non-economic material will be drilled and blasted, then loaded into 150 t trucks by a combination of backhoe loaders (17.0 m3 bucket size) and hydraulic front shovels (23.2 m3). The mine equipment fleet has been sized to accomplish the following tasks:

- Drill and blast the ore and non-economic material tonnage on a combination of 5 and 10 m benches.
- Load ore and non-economic material using either the backhoes (ore and associated noneconomic material on 5 m benches) or the hydraulic shovels (non-economic material on 10 m benches).
- Haul the ore to the primary crusher or adjacent run of mine ore stockpile.
- Haul non-economic material to its final destination, including hauling non-economic material to the 7A tailing impoundment area (but not construction of the embankment).
- Construct and maintain all roads used by the mine equipment, including berms and ditches.
- Maintain all non-economic material storage locations.
- Clean up in active mining areas.
- Other activities as needed to maintain a good working environment in the mine areas.

A processing plant with a capacity of 15,000 tpd has been selected as the optimum size given the separate open cut configuration. The Navidad plant will be designed to process two distinct ore types in campaigns at a total annual rate of 5.475 Mt to produce two distinct and separate flotation concentrates described as a copper-silver concentrate and a lead-silver concentrate. The processing facilities are centered between the Loma de La Plata cut in the west and the Navidad Hill cuts in the east. Tailings dam location 7A has been selected and is 5 km south of the mill. The Loma de La Plata cut and parts of others will provide primarily a copper-silver ore. The Galena Hill cut and parts of others are primarily a lead-silver ore.

Crushing
Run of mine ore is dumped directly into a 54-inch gyratory crusher, or stockpiled on the crusher bench. The crusher is housed in a 23 m high steel building. The rock size is reduced to a P80 of 150 to 200 mm and is then conveyed for stockpiling and feed to the SAG mill.

Grinding
The grinding circuit will be designed to process an average of 15,000 tpd at 91% availability on a 24 hour per day, 365 days per year basis. Ore will be ground to a final product size of 80% passing 100 to 150 microns in a SAG primary and ball mill secondary grinding circuit.

Primary grinding will be performed in a 9.8 m diameter by 5.2 m (effective grinding length) long SAG mill with two 4,474 kW motors. The SAG mill will operate in closed circuit with a SAG mill discharge screen.

Secondary grinding will be performed in a 6.7 m diameter by 9.5 m (effective grinding length) long ball mill powered by two 4,474 kW motors operated in closed circuit with hydrocyclones. The ball mill will discharge over a trommel screen. Ball chips will be rejected out the end of the trommel into a tote bin. Ball mill discharge will be split with a portion feeding the gravity concentrator. The remaining ball mill discharge will be combined with SAG mill discharge screen undersize and gravity concentrator tails in a grinding sump and will be pumped to hydrocyclones for classification. The combined slurry is pumped using variable speed horizontal centrifugal slurry pumps to the primary cyclone cluster. Hydrocyclone underflow is recycled back to the ball mill for further grinding. Hydrocyclone overflow (final grinding circuit product) will flow by gravity to a vibrating trash screen for removal of tramp material. Trash screen oversize will discharge into a tote bin to be periodically removed for disposal. Trash screen undersize will flow by gravity to the rougher conditioner tank. Cyclone overflow will be sampled prior to rougher flotation.

A separate, dedicated slurry pump will feed ball mill discharge to a scalping screen ahead of the continuous gravity machine. The coarse gravity concentrate will be pumped directly to the concentrate thickener. The gravity concentrate will be sampled prior to being combined with concentrate from the cleaner flotation cells. The gravity circuit tails will be returned to the ball mill.

A belt weigh scale will monitor the SAG mill discharge screen oversize recycle back to the mill. The belt scale on the SAG mill feed conveyor will provide a signal for adjusting belt feeder speeds and makeup water addition.

Flotation reagents may be added to the SAG mill feed and may be added to the cyclone feed sump prior to flotation.

Flotation and Regrind
The flotation circuit will consist of one train of rougher cells and two trains of cleaner cells. When copper-silver ore is being processed one cleaner train will be required. When lead-silver ore is being processed both cleaner trains will be required.

The rougher circuit will consist of one train of six 257 m3 tank type, forced air cells, with a drop between each cell and a conditioning tank ahead the first cell. The six cells will be used to float silver, copper and/or lead from the ore. Copper and lead flotation is expected to occur at a natural pH.

Each cleaner train will consist of: a regrind mill, regrind cyclones, a conditioning tank, and one train of eight flotation cells, four first cleaner cells, two second cleaner cells, and two third cleaner cells.

Concentrate Dewatering and Filtration
Concentrate from the third cleaner flotation cells will be pumped to a concentrate thickener. There will be two concentrate thickeners, one for each cleaner line. When processing coppersilver ore one cleaner line and one concentrate thickener will be used. When processing leadsilver ore both cleaner lines and both thickeners will be used. Concentrate thickener overflow from each thickener will flow by gravity and be combined in a single tank and will be pumped to the grinding sump for re-use in the process or may be bypassed to the process water pond. Concentrate thickener underflow from each thickener will be pumped (one operating pump and one standby) to individual agitated storage tanks and then to individual pressure filters. Flocculant will be added as needed to aid in solids settling in the thickeners. There will be two concentrate filters, one for each cleaner line.

Filter cake from each filter will drop onto a discharge conveyor that will feed a concentrate bin feed conveyor. Concentrate from the discharge conveyors may be bypassed to a bulk concentrate storage area. Concentrate from the bin feed conveyor will discharge to a diverter gate and may be directed to a bagging system or to a bulk concentrate storage area. The copper- silver concentrate may be dried before bagging for shipment. Loaders will be used to load lead-silver concentrate in bulk trucks for shipping.