The resource areas within Project Fenix are classified as low- to intermediate-sulphidation epithermal precious metals deposits. The Project Fenix deposits can be silver dominant (El Gallo Silver, Palmarito, Carrisalejo), gold dominant (El Gallo Gold, Haciendita), or both (Mina Grande). Although the 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.
Mineralization is hosted in siliceous breccia zones and quartz stockwork zones. These zones often occur at lithologic contacts, particularly contacts of the porphyry intrusions.

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. 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 north-south sense (across strike) is also variable but is often on the order of 650 ft (200 m). An at-or near-surface sub-horizontal mineralized zone averaging about 50 ft (15 m) thick is dominant in many portions of the resource. This near-surface mineralization constitutes a significant portion of the resource. In the central part of the resource, this near-surface mineralization is continuous for up to 1300 ft (400 m) north- south. In places throughout the deposit, mineral zone geometry is irregular probably reflecting control by higher-angle intrusive contacts or irregularly-shaped pre-existing breccia zones.

In mineralized zones in core, silver mineralization is usually observed as dark grey metallic pencil-point size grains of acanthite intergrown with sphalerite, ± galena ± chalcopyrite. In high-grade intervals, acanthite can occur in clots up to 2 to 3 cm (0.8 to 1.2 in), usually intergrown with galena.

El Gallo Silver is a silver-dominant system with low gold values. However, minor local zones of highgrade gold (in the 1 oz/t or 31gpt range) occur associated with strong silver values. A separate mineralized zone called the Gold Zone located approximately 1000ft (300 m) south-east of the eastern portion of the El Gallo Silver deposit hosts gold mineralization with no associated silver. This zone is of insignificant size, consisting of a small area of narrow, near-surface mineralization but can host highgrade gold (up to 280 gpt in rock chip samples).

Palmarito.
The principal mineralized zone at Palmarito is siliceous hydrothermal breccia and quartz stockwork which forms a zone that “wraps” around the siliceous rocks of the dome, giving a horseshoe-shaped outcrop pattern. Because of this morphology, the strike of the mineralized zone varies from north-south to almost east- west and dips from 40-50° to the east and to the north. This zone can achieve widths of approximately 65 ft (20 m). Thinner 3-30 ft (1- 10 m) parallel structures occur locally in the footwall of the main zone. Strong argillisation and oxidation occurs near surface and locally in structural zones. Generally, surface oxidation reaches depths of 65 to 72 ft (20 to 22 m). The degree of supergene leaching is unknown.

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.

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).

San Rafael.
Gold mineralization is best developed on an east-west main structure dipping 45 °to the south. 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).

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. 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° °. 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).

Mina Grande and Haciendita.
At Mina Grande, the principal mineralized structure (Veta Arturo, Los Registros) strikes N40-45W and dips 45-50° north-east. Mineralized widths on this structure are up to 14 m. Subordinate northeaststriking mineralized structures (Reyna de Oro, Nochebuena) trend N40E and dip roughly 60° SE. Mineralization comprizes strong hydrothermal breccia development cemented by white to grey quartz. Mineralization is accompanied by galena, sphalerite (both high and low iron varieties), traces of acanthite, and copper oxide minerals.

Carrisalejo.
Most mineralization is in a near surface low- angle zone that strikes roughly east-west and dips gently to both the north and south at 20- 25°. Thickness of this zone is variable ranging from 3 m to as much as 25 m. Mineralization also occurs along high-angle “feeders” on the north and south sides of the low-angle zone. This mineralization is narrower, usually on the order of 10 to 30 ft (several m up to 10 m). Mineralization is characterized by quartz stockwork and breccias associated with silicification.

El Encuentro.
Mineralization is mostly hosted in an andesite tuff unit and is characterized by quartz breccia-stockwork, in the epithermal- mesothermal range, presenting gold/silver and base metal mineralization. The multi-event breccia-stockwork structures are usually cemented by quartz, iron oxide, epidote and in minor quantity, sulfides. The mineralized structures are 650 to 1300 ft (200 to 400 m) in length and have two preferential directions: N- S and 30-40 NW SE. The alteration of these structures can be extensive, from 65 to 165 ft (20 – 50 m) thick.

The Project Fenix starts off by mining (unloading) of the Heap Leach Material from the EL Gallo Gold Heap Leach Material and processing it in the Phase 1 mill that will be located immediately adjacent to the heap leach pad.

The mining of the Heap Leach Material will occur during years one to four of the project and then will stop for three years before recommencing in the eighth year of the project and continuing until the twelfth and final year of the project.

The El Gallo Silver open pit will come on line in year three and will supply 98% of the mineralized rock to the mill in that year. In year four it will supply 89% of the mill feed with the balance supplied by the Heap Leach Material. El Gallo Silver open pit mine will operate continuously for six years in succession, with the eighth year of the project being its final year of operation.

In year five of the project Palmarito open pit will begin and will supply 10% of the mill feed that year with the balance coming from El Gallo Silver pit.

Palmarito will also continue to mine for six years in succession with year ten of the project being its final year.

n the same year that Palmarito stops, the Carrisalejo Open Pit will begin production for just two years, helping to supplement the mill feed with 8% and 10% of its throughput in years ten and eleven respectively.

El Encuentro will begin some production late in the ninth year of the project with a total contribution of 4% to the mill feed that year and will continue until the end of year eleven of the project, contributing 17% and 29% of the mill feed in years ten and eleven respectively.

The final year of the project sees the mill return to processing only feed from the Heap Leach Material at 60% of its rated annual capacity.

The mine production schedule is based on delivering mineralized material to a mill at the rate of 5,000 t/d or 1,825 Kt/a from the HLM and at reduced tonnages for remote resources due to changes in mill feed BWi. About 52% of the mill feed will come from the El Gallo Gold Heap Leach Material (LOM average 750kT/a),31% of the mill feed is from El Gallo Silver (LOM average 450kT/a), 10% from Palmarito (LOM average 150 kT/a), 4% from Carrisalejo (LOM average 22kT/a), and 4% from El Encuentro (LOM average 61kT/a).

Pit design Parameters are generally as follows unless otherwise indicated by geotechnical data.
- 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 slop 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).

The Project Fenix processing facility would be designed to process material from several different deposits via separate campaigns. The facility would initially be designed to treat the previously treated gold rich Heap Leach Material from the existing El Gallo Gold heap leach operation. The facility, with some additional processing equipment added, would then treat silver rich fresh mineralized feed stock from several other deposits in the region – El Gallo Silver, Palmarito, Carrisalejo and El Encuentro.

A two-phase approach would be utilized to develop Project Fenix, Phase 1 specifically for the gold bearing Heap Leach Material (HLM) from the El Gallo Gold heap leach operation and Phase 2 for the treatment of silver mineralized feed stock from El Gallo Silver.

In Phase 1 the Project Fenix processing facility would initially target gold recovery from the HLM by conventional grinding, cyanide leaching and adsorption of gold onto activated carbon. The treatment ........