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/silve ........