Deposits
The mineral resource areas within Project Fenix are classified as low to intermediate-sulphidation epithermal precious metals deposits. Deposits of this type are common throughout the world and are very common throughout the Sierra Madre province of Mexico. The Project Fenix deposits can be silver dominant (El Gallo Silver) or gold dominant (El Gallo Gold). Although the mineral resource areas have differing mineralogy and morphology, all deposits in the Project have quartz stockwork and quartz breccia as the main mineralization hosts.

El Gallo Silver
A low to medium sulphidation silver-dominant epithermal precious metal deposit. Silver mineralization is associated with minor gold as well as anomalous lead and zinc. Certain features of the El Gallo Silver deposit distinguish it from many other typical Mexican epithermal deposits. For example, mineralization is not hosted in through-going fault veins instead it is hosted in breccias and quartz stockwork zones associated with hypabyssal intrusions and pre-existing breccia zones. Often, the mineralized zones are shallowly-dipping, controlled by sill-like intrusive contacts and other lithologic contacts or subhorizontal structures.

El Gallo Gold El Gallo Gold consists of low- to intermediate-sulphidation epithermal gold and silver mineralization. The majority of the El Gallo Gold deposits are gold dominant and locally contain strongly anomalous base metals. Mineralized zones at El Gallo Gold occur as tabular veins or quartz stockwork zones, sometimes occurring as parallel sets

Mineralization
El Gallo Gold
Gold mineralization within the El Gallo Gold Mine area occurs in five deposits along two distinct structural trends. A north-west trending structure hosts the San Rafael and Samaniego deposits. The second structural trend is northeast-striking and includes the Sagrado Corazón, Lupita and Central deposits. Along these structural trends the mineralization is commonly located at flexures and also within numerous substructures that may be parallel, oblique or even perpendicular to the principal trends. These structural trends are characterized by one or more individual structural zones of sheared and brecciated rock resulting from faulting of generally limited displacement. Within these structures the mineralization occurs as pods that pinch and swell both along strike and down dip. These pods may reach a strike length of up to 330 ft (100 m) and widths of up to 100 ft (30 m) Contacts between mineralized material and barren rocks are typically sharp and well defined, and they often correspond with faults that show minor post-mineral movement. These structures have been shown to flatten at depth in some instances, as is the case with the La Prieta vein at the southern (down dip) extension of the Samaniego deposit.

San Rafael
Gold mineralization occurs along the same structural system as Samaniego and is best developed on an east-west main structure dipping 45 °to the south. This mineralization has largely been mined out. The main zone tended to occur at or near a contact between underlying andesite flows and tuffs (footwall volcanics) and overlying andesitic agglomerate (hanging wall volcanics) that dip at a moderate angle to the south-west. The San Rafael deposit was about 400 m (1,300 ft) along strike and gradually horsetails and weakens to the east beyond the intersection with the southeast-striking Las Vacas zone. The San Rafael zone extended approximately 250 m (820 ft) down dip where, below an elevation of 325 m (1,070 ft), it was no longer significantly mineralized. The mined-out portion of the deposit ranged from a few meters to several tens of meters in thickness.

Samaniego
Samaniego consists of a complex north- to northwest-trending structural system that dips about 50° to the south-west and has a strike extent of about 600 m (1,970 ft). Samaniego mineralization is continuous for up to nearly 400 m (1,300 ft) down dip. Four main mineralized vein zones, Upper Samaniego Hill, La Prieta, Lower Samaniego Hill, and High Angle occur within the Samaniego deposit. The deposit appears to be connected structurally to the south to the San Rafael deposits, though mineralization is weakly developed in the area between the two pits. The mineralized structures tend to occur at or above the contact between underlying andesite flows and tuffs and overlying agglomeratic andesite. Individual zones can merge with each other or eventually pinch out laterally. The veins range from a few meters to a few tens of meters in thickness. To the north-west, the Samaniego structural trend is truncated by an east-west fault, with the possible structural offset of the Samaniego trend occurring to the east. Along the down dip extent of the La Prieta vein within the Samaniego deposit, the structure flattens and swells to roughly 30 m (100 ft) thick. Gold grades in this pod, which has an aerial extent of approximately 50 by 100 m (160 x 330 ft), average roughly 0.1 oz/t (3g/t) gold, higher than average for the El Gallo Gold deposits.

Sagrado Corazón-Central-Lupita
Sagrado Corazón-Central-Lupita is a northeast-striking mineralized trend on the south end of the El Gallo Gold Mine area. This structural zone is laterally continuous over a distance in excess of 1,800 m (5,900 ft), from Sagrado Corazón in the south-west through Central to Lupita in the north-east. This zone dips steeply to the southeast at 60-85°. The structural trend occurs at or near the irregular contact between intrusive rocks (predominantly diorite) to the north-west and volcanic rocks (andesitic flows and agglomerate) to the south-east. Locally along the trend, the mineralized zone splits into one or two subparallel zones. Strong silicification associated with the mineralization is resistant to erosion and forms a prominent ridge. Mineralization gradually weakens to the south-west and north-east along the trend. To the northeast it appears to be truncated by a north-south fault, which places a down-dropped block of probably post-mineral tuffs to the northeast. On the south-west end of the trend (Sagrado Corazón), the steeply dipping mineralized zone is generally a few tens of meters thick and extends down dip in excess of 125 m (410 ft) where it weakens. In the Central part of the trend, mineralization at surface is weak and generally is 1 m (3 ft) to 10 m (33 ft) thick. It extends down dip in excess of 100 m (330 ft), where it weakens but is not completely drilled off in some locations. On the north-east (Lupita) part of the trend, the steeply dipping mineralization is more complex, consisting of one to three subparallel zones, with a combined thickness generally of a few tens of meters. Mineralization extends down dip in excess of 100 m (330 ft), where it appears to be closed off.

El Gallo Silver
Mineralization is hosted in siliceous breccia zones and quartz stockwork zones. These zones often occur at lithologic contacts, particularly contacts of the porphyry intrusions (ANDP, QFP). Contacts are usually brecciated and often have adjacent multi-lithic breccia zones. This brecciation is thought to be pre-, synand post-mineral with mineralizing hydrothermal fluids using these zones as a conduit and host. At least one other brecciation event occurred after mineralization as evidenced by many of the breccias containing mineralized clasts. Zones of quartz stockwork veining usually occur adjacent to these breccias.

Mineral zones commonly have tabular geometry oriented sub-horizontally or gently dipping (20 to 30°) both to the north and to the south and often occur in multiple stacked zones. Often, these zones reflect control by sill-like contacts of ANDP or QFP or other lithological contacts but may also reflect shallowdipping structures. Tabular zones vary in width up to about 165 ft (50 m) thick but average about 50 ft (15 m). Their lateral extent in a

Mining Sequence Description
The Project Fenix Phase 1 production starts off with the mining (unloading) of the 3/8” crushed Heap Leach Material from the El Gallo Gold Project by dozing, loading and hauling the material using a bulldozer, two wheel loaders and an articulated dump truck to feed a hopper at the base of the leach pad that will subsequently feed a conveyor that will transport the ore to the processing plant, located immediately adjacent to the heap leach pad.

The mining of the HLM will occur during years one to six and El Gallo Silver (EGS) for Phase 2 begins in year seven and will continue to year ten.

The Project Fenix Phase 2 starts with El Gallo Silver open pit production which is expected to come on stream at the beginning of year seven. Phase 2 plant construction will commence 36 weeks before Phase 1 production (HLM) is depleted in that year. From year seven EGS will supply 100% of the Run of Mine (ROM) required for the mill. El Gallo Silver open pit mine will operate continuously for four years in succession, with the tenth year if the project being its final year of operation.

The mill feed from El Gallo Silver Phase 2 will be trucked over public and purpose-built roads to Project Fenix processing facilities. The estimated total distance that the mineralized material needs to be hauled is 9.3 km for El Gallo Silver.

The unloading of the HLM and the mining of the El Gallo Silver pits will be conducted using two 12-hour shifts per day for 350 days per year. This will require three mining crews. With the current mine production schedule consisting of Mineral Reserves the commercial project life is estimated to be 10 years.

Pit Design Parameters
The pit design parameters for El Gallo Silver are based on those that were used successfully in the four pits mined at the McEwen El Gallo Gold from 2012 -2018 (Samaniego, Sagrado Corazon, Lupita and Central Pits).

Pit design parameters are generally as follows unless otherwise indicated by geotechnical data and using block model for open pit.

- Bench Height: 5m
- Batter Angle: 75 degrees
- Catch Benches: 8m wide every 3 benches (can vary above 8m to facilitate shallower pit slopes where ramps do not decrease the overall pit slope angle adequately)
- Inter Ramp Angle: 51.2 (3 x 5 benches at 75 degrees + 8m catch bench
- Overall Pit Slopes: 42 to 45 degrees
- Ramp Widths: 20 – 25 m where two-way 777 traffic is required; 15m where 2-way ADT or 1 -way 777 traffic is required and 10m where one-way ADT traffic is adequate (i.e. at pit bottoms).
- Ramp Angles: generally, 10 degrees (8 degrees in some of the shallower benches to maximize productivity over the mine life) up to 12 degrees in the bottoms of the pits to help minimize strip ratio required).

Phase 1 Mining (unloading) of the Heap Leach Material (HLM)
Phase 1 of project Fenix involves the reprocessing of the heap leach material at the El Gallo Gold mine that has been mined and leached in the past. Due to the mineral recovery limitations of heap leaching, the existing heap leach still contains approximately 30-35 % of the in situ gold that was originally mined, crushed and placed on the leach pad.

Between the effective date of the initial mineral resource statement (October 2018) and the date of December 31st, 2020, a total of 22,720 Au Oz have been produced from the leach pad according to CMP’s extraction model. These ounces will be deducted from the mineral resource.

When project Fenix will begin processing the HLM on in Year 1, the total tonnes, grade and ounces in the leach pad will be 10,145 M tonnes of total mineral resource, of which 10,018 M tonnes of measured mineral resource and indicated mineral resource will be included in the mine schedule that will support the mineral reserve estimate as being economically feasible to mine.

One hundred percent of the mineral resource in the Heap Leach Material will be reprocessed in the mill including some “must take” material that is considered dilution with grade. This mineral resource is not a consolidated material, and all material must be processed, meaning low grade material will be processed at a cost and also impacting grade.

Whereas the HLM pad is located immediately adjacent to the hopper and there is no need for separating ore from waste the project assumes 100% mining recovery and effectively 0% ore loss due to errors typically associated with accidentally sending ore to waste piles or losing material on ramps and haul roads.

The mining of the heap leached material will be conducted in two 12-hour shifts per day for 350 days per year. This will require three mining crews. Mining will start from the upper part of the heap pushing the material down, either directly to the hopper or to a loader that will tram material to the hopper will push the material down with dozers where it is possible, otherwise loading out of the mining shapes will be conducted selectively using loaders and ADTs. An optimization exercise was conducted in order to guide the unloading process on where to prioritize unloading in order to process higher grade material earlier in the mine plan. .

Unloading of the heap leach material will occur using benches that were designed with 5m height, however in some cases will be required to go over this height, mining double benches at some times (maximum 10m height). For safety reasons, control cuts will be used to avoid vertical walls and operations will maintain natural slope angles during the unloading process that will respect the HLM’s intrinsic angle of repose. Lower lifts in the heap leach pad will have been compacted and will therefore require significant dozing to achieve stability and to create piles that can be loaded out by loader alone and/or a truck and loader combination. The mining plan for the HLM also includes a production constraint on copper grade as testwork has shown cyanide soluble copper levels above 350ppm impact operating cost due to cyanide consumption increase.

Phase 2 Mining El Gallo Silver
The El Gallo Silver mineral resource is located 9.3 km north of El Gallo Gold where the processing plant will be located. The El Gallo Silver mineral resource will require the construction of a 9.3 km haulage road but will only require minimal infrastructure, such as portable magazines, offices, etc.

Phase 1 (El Gallo Gold Heap Leach Material)
Grinding and Classification
The grinding circuit would consist of a single stage overflow ball mill that would operate in closed circuit with hydro-cyclones. The ball mill procured by McEwen following the El Gallo Complex Phase II Project Feasibility Study in 2012 would be utilised for Project Fenix. This reduces capital costs and offers a pragmatic compromise between throughput capacity of the processing plant and maximising gold recoveries.

The ball mill is 5.5 m diameter inside shell by 8.1 m Effective Grinding Length (EGL) and fitted with a 4,100 kW motor. The mill is currently configured to operate at 72% of critical speed. Installed motor power would cater for a maximum ball charge of 34% by volume when the mill has new liners fitted. During normal operation at the ball charge of 31% by volume, the predicted pinion power draw would be approximately 3,500 kW when treating heap leach material. Pulp density within the mill would be designed to be 70% solids.

The mill size prediction was calculated using conventional power-based modelling required to reduce the heap leach residue from a F80 of 8.0 mm to a P80 of 150 µm at a rate of 226 dtph.

Pulp discharging from the ball mill would pass through the mill trommel screen and be diluted to the correct cyclone feed density and then pumped to the cyclone cluster for classification. The cyclone cluster consists of 16 outlets with 14 250CVX20 cyclones fitted and 11 operating at a pressure of 105 kPa to achieve the required product size. Overflow from the cyclones in the grinding circuit would be screened on the trash screen to remove any coarse ore particles, wood, wood fibre or other trash before either the flotation or leaching and adsorption processes are commenced. During the Phase 1 operation the plant would operate with the trash screen undersize reporting to a distribution box feeding into the leach circuit.

Phase 2 (El Gallo Silver)
Three Stage Crushing Using the Existing El Gallo Gold Plant
ROM ore would be delivered by haul trucks to the existing ROM pad. The ore would be reclaimed and delivered to the crushing plant feed bin by a front-end loader (FEL). The existing El Gallo Gold three stage crushing plant would be used to prepare the material for delivery to the grinding circuit. The existing crushing circuit would be required to operate 7 days per week, 24 hours per day at 75% utilisation for the El Gallo Silver campaign, allowing for routine crushing circuit maintenance. The El Gallo Silver sulphide type ore will be crushed to a P80 of 10 mm. When crushing softer El Gallo oxide type ore the bottom deck panels can be removed to generate a coarser product. The crusher product conveyor will be fitted with a weightometer to estimate total crushed tonnes per shift and to control the rate of crusher feed into the plant. Crushed product would report to a surge bin designed to smooth out fluctuations in the mill feed rate caused by crusher feed surges. Under normal operating conditions, the crushing rate into the surge bin will exceed the rate of withdrawal of ore to the milling circuit. The crushed ore will overflow from the surge bin to the stockpile feed conveyor, which will feed an overflow stockpile of 350 tonnes capacity.

Mill feed would be drawn from the crusher surge bin by a variable speed belt feeder. The stockpiled crushed ore would be reclaimed as mill feed by the chain and flight drag feeder that would be relocated after processing the El Gallo Gold HLM. Mill feed from the crusher surge bin or stockpile will be transported to the grinding circuit by the mill feed conveyor. An additional weightometer will be fitted to the mill feed conveyor to indicate the instantaneous and totalised mill feed tonnage and will be used to control the speed of the belt feeder.

Grinding and Classification
The grinding circuit would be common for each phase, except the cyclones would be modified to 250CVX10 cyclones to enable the finer grind size of 80% passing 75 µm to be achieved for the Phase 2 operation.

The mill throughput rate will be ore dependent. During normal operation when treating El Gallo Silver sulphide ore the required pinion power draw would be approximately 3,300 kW. The ball mill will operate with a typical ball charge of approximately 29% ball charge by volume. The mill power prediction was calculated using conventional power-based modelling required to reduce the El Gallo Silver ore from a F80 of 10 mm to a P80 of 75 µm at a rate of 147 tonnes per hour for both sulphide and oxide ore types.

Due to lower hardness of the El Gallo Silver oxide ore the predicted pinion power draw required would be approximately 2,700 kW. When treating oxide ore alone, the ball mill will operate with a low-ball charge of approximately 20%. It is conceivable that the El Gallo Silver ores may be ground at higher rates to produce a finer grind size depending on limitations of the downstream plant.

The Project Fenix treatment facility would process El Gallo Gold heap leach material and El Gallo Silver mineralisation via separate campaigns.

Project Fenix will be developed in two phases. The first phase shall specifically process gold bearing Heap Leach Material (HLM) from the El Gallo Gold heap leach operation. The second phase of the development would process silver rich ore from the El Gallo Silver deposit. Some additional processing equipment will be installed to complement the second phase of development.

During the first phase, the Project Fenix processing facility would initially target gold recovery from the El Gallo Gold HLM ore by conventional grinding, cyanide leaching and the adsorption of solubilised gold onto activated carbon. The treatment facility would initially incorporate the following unit process operations:
- El Gallo Gold HLM reclamation;
- Primary ball milling and classification;
- Leach feed thickening;