The Chinchillas deposit is considered to be part of the Bolivian tin-silver-zinc belt which occupies the back-arc portion of the central Andes and extends from the San Rafael tin copper deposit in southern Peru to northern Argentina. The Bolivian tin-silver deposits are associated typically with felsic volcanic domes of broadly rhyodacitic composition (Cunningham et al., 1991). The Chinchillas deposit is modeled as a Tertiary aged diatreme volcanic center that has intruded the Paleozoic basement low grade metamorphic sediments. The resulting depression, filled with volcanic breccias and tuffs is approximately 1.5 kilometres in diameter. Mineralization occurs within the basin, hosted in favorable volcanic tuff units, on the margins of the basin within footwall sediments, and across the sediments-volcanic contacts as on structural zones. The mineralization occurs mostly as disseminations, veinlets and matrix filling.

In terms of in situ value, mineralization at Chinchillas is dominated by silver with lesser amounts of lead and zinc. Mineralization occurs as disseminated sulphides and matrix infilling within the volcanic tuffs and as matrix and fracture filling in breccias within the basement meta-sediments. There are rarely mineralized shears, veinlets or vein-like structures within the dacites and volcanics. Within the basement lithologies shears and structures are more commonly mineralized. Depth of oxidation is just a few metres within the volcanics and is insignificant within the basement rocks. Silver, lead and zinc bearing minerals include silver sulfosalts, freibergite, boulangerite, tetrahedrite, schalenblende, sphalerite (zinc and iron), and galena (including argentiferous examples). Associated mineral assemblages include chalcopyrite, quartz, pyrite, siderite, limonites, manganese oxides, cerusite, smithsonite, anglesite and malachite (Marshall and Mustard, 2012 and Coira et al., 1993).

The geologic model for the Chinchillas deposit, as defined to date, includes significant silver-lead-zinc mineralization in four main areas: the Silver Mantos and Mantos Basement zones in the western part of the deposit, and the Socavon del Diablo and Socavon Basement zones in the eastern part. The main structural elements controlling the location of mineralization are: the inverted cone shape of the volcanic diatreme forming the contact between basement sediments and overlying volcanic rocks; and the dominant east-west and subordinate north-west, north and north northeast trending structures that control formation of the Chinchillas volcanic centre. The phreatomagmatic explosion that produced the diatreme generated a symmetrical cylindrical shaped caldera, with mineralized brecciated basement rocks along the contacts and horizontal layers in the tuffs with disseminated mineralization.

Puna Operations is a joint venture comprised of the Pirquitas and Chinchillas properties. The Pirquitas property achieved commercial production in 2009, with mining of the San Miguel open pit ceasing in January 2017. Chinchillas is a silver-lead-zinc deposit located approximately 42 kilometers by road from the Pirquitas property. In 2017, Puna Operations processed Pirquitas stockpiles in the Pirquitas processing facilities. Near-term production growth is anticipated via the development of the Chinchillas deposit.

The Chinchillas deposit will be mined as a conventional open pit operation. Most of the in-pit haulage for both ore and waste will be carried out using 100 tonne haulage trucks. Ore will be mined in five metre benches and stockpiled in a staging area close to the pit. In the staging area, ore will be loaded onto 35 tonne road trucks to be transported to the crusher at the Pirquitas Operation which is 42 kilometres away from the Chinchillas Property. Throughout the mining operation, low grade ore will be stockpiled near the pit rim to be processed at the end of mine life.

Waste rock will be mined and hauled to two major on-site rock storage facilities based on their geochemical characteristics. Some of the mineralized waste will be stockpiled near the pit so that it can be recovered in the case that silver price exceeds $18/oz.

The mining operation will be conducted by the owner and the ore haulage is a contractor-based operation.

The mine is scheduled to operate 355 days a year with two 12-hour shifts a day. At maximum capacity the mine can move 31 kt of material a day.

The amount of mining equipment required for the operation varies by tonnages of material moved in each period.

The general approach is to transfer Pirquitas’ mining equipment that is in sufficient shape to Chinchillas, therefore the condition of the mining equipment at the Pirquitas mine was evaluated.

The Chinchillas material will be processed at a rate of up to 4,000 tpd through the existing Pirquitas Operation process plant.

The existing Pirquitas plant will be used to process the Chinchillas ore types. The plant will require minor re-piping of the silver flotation circuit to accommodate the Chinchillas feed. The Pirquitas preconcentration jig plant will not be used for Chinchillas feed, so the overall flowsheet becomes:
- Primary, secondary and tertiary crushing operations delivering material to an intermediate crushed stockpile.
- Grinding is performed on the feed from the crushed stockpile. Ball mill discharge is pumped through a cyclone system and the oversize is returned to the mill.
- Cyclone overflow is fed into a conditioning tank and flows to the lead/silver flotation circuit.
- The lead/silver recovery circuit includes rougher flotation, rougher concentrate regrinding, and two stages of flotation concentrate cleaning.
- The lead/silver second cleaner concentrate is thickened/filtered and bagged for shipment.
- The tailings from the lead/silver flotation process are routed to a separate conditioning tank ahead of the zinc flotation circuit.
- The zinc recovery circuit includes rougher flotation, rougher concentrate regrinding, and two stages of flotation concentrate cleaning.
- The zinc cleaner concentrate is thickened/filtered and bagged for shipment.
- Tailings from the zinc flotation circuit flow to the tailings thickener.
- Tailings are thickened and stored at a permitted facility on site.

The trucked material will be delivered to suitable stockpiles at the primary jaw crusher. The jaw crusher can be fed directly via 25- to 30-tonne truck dumping or with a front-end loader, and produces a 15cm product size.

Secondary/tertiary crushing and screening operations will reduce this material to an 80% passing size of 9mm. This material is discharged onto a crushed feed stockpile with four feeders located beneath the stockpile.

The crushing circuit was designed to deliver 6,000 tpd of Pirquitas material, and for Chinchillas feed will need to achieve 4,000 tpd to keep up with the grinding circuit.

For Chinchillas ore, the jig circuit will not be used and crushed ore will feed the ball mill circuit directly.

The ball mill circuit grinds crushed ore to the optimum size at a rate of 4,000 tpd. The ball mill is 4.8 metres in diameter by 6.25 metres long with 2,400kW of installed power. The Pirquitas plant was designed for 4,000 tpd. Considering the relative hardness of the two ores and similar target grind size (P80 sizes of 140µm to 160µm), no alterations to the grinding circuit are required. Mill discharge is pumped to a cyclone nest where the underflow is returned to milling operations and the overflow reports to flotation.

The lead/silver flotation section will consist of rougher, rougher concentrate regrinding and two stages of countercurrent concentrate cleaning.

All of the required equipment exists in the Pirquitas Operation, plus optional use of a column flotation cell for additional cleaning. Minor pump and piping changes are required. An existing rougher concentrate 200HP (149kW) Vertimill regrind mill will be recommissioned for Chinchillas ore. All changes will be completed prior to processing.

The zinc flotation section will consist of rougher, rougher concentrate regrinding and one stage of conventional cell concentrate cleaning followed by one stage of column cell cleaning. An existing rougher concentrate 500HP (373kW) Vertimill regrind mill will be recommissioned for Chinchillas ore. All of the required equipment exists in the Pirquitas Operation with no pump or piping changes required.

The Pirquitas silver concentrate dewatering circuit consists of a thickener, holding tank and pressure filter. The capacity is appropriate for Chinchillas lead concentrate production from a 1% lead head grade. However, as higher lead feed grades are mined after the first few years of operation, the existing tin concentrate thickener will be recommissioned along with an additional new filter press to handle the higher lead/silver concentrate production.

The Pirquitas zinc concentrate dewatering circuit consists of a thickener, holding tank and filter. The capacity is appropriate for Chinchillas zinc concentrate production.

After filtering, the concentrates will be bagged into one tonne bulk bags. Sampling will be by manually inserted spear samplers. Pirquitas’ current practice is to composite bulk bag samples for both 12-hour shift production as well as a moving-average, composite of 100 bulk bags for each shipment lot sample.