The Guadalupe area is enclosed by an east- southeast trending mineralized structure that extends over 2.5 km and is up to 100 meters in width. It is composed of two main veins, Guadalupe and San Manuel, with stockwork and numerous quartz veinlets in between.

Guadalupe (including Laija and West Areas) Deposit.
The Guadalupe area is enclosed by an east-southeast trending mineralized structure that extends over 2.5 km by up to 100 meters in width. It is composed of two main veins, Guadalupe and San Manuel, with stockwork and numerous quartz veinlets in between. The Guadalupe Mine zone presents a southwest steep dip and was developed by underground methods to a depth of some 400 meters, 10-13 production levels, along a strike length of approximately 1,000 meters.

The Guadalupe mineralized structure is enclosed by volcanic rocks of the Lower Volcanic Sequence, which dip gently eastward and consists of andesitic flows and tuffs. This area was divided into three sections for exploration purposes, Guadalupe West, Laija and East.

Chiripa – San Miguel – Noche Buena Deposits. The San Miguel deposit is enclosed by the Chiripa-San Miguel-Noche Buena mineralized structure. It consists of a northwest trending fault system dipping 50-60º to the southwest. It has been traced for a distance of 1.4 km and tested with some stopes, trenches and adits.

The Chiripa-San Miguel structure is enclosed by andesitic rocks of the Lower Volcanic Sequence, which appear to be intruded by an argillic altered, feldspar-horblende-biotite porphyry dike. Mineralization is associated with the brecciated zones along the structure and in proximity to the dike, with apparent concentration at the footwall.
The Noche Buena deposit constitutes the southern extension of the San Miguel zone, and is part of the same mineralized structure.

El Orito Zone.
This is located about 4 km to the north of the Guadalupe mine. It consists of an extended, moderate to strong, argillic alteration zone. It has been explored by surface workings along an apparent structure that shows strong oxidation, quartz veining, and kaolinization. The geologic structure crops out within volcanic rocks of the Upper Series, with orientation to the NW 40-45º SE. The alteration appears to indicate a structure with a length of about 3,000 meters.

Mineralization.
In the Guadalupe de Los Reyes area, gold and silver mineralization have been found along a series of northwesterly and west-northwesterly structural zones. Mineralization in this area is typical of low sulfidation epithermal systems consisting of quartz-adularia veins and stockwork zones. The gold and silver minerals are associated with the quartz. It appears that two stages of silicification occur within the area; the first stage brought commonly banded quartz, typically of a pale yellow-green color, while the second consisted of white crystalline quartz. It appears that the gold and silver minerals are most commonly associated with the first stage yellow-green chalcedonic quartz.

In thin section studies of the host rocks, andesite to felsite are variably altered showing plagioclase converted to potassic feldspar. In many instances the host rock is completely replaced by fine-grained quartz or sericite with relatively abundant adularia. Gold occurs as grains that generally range from 5 to 30 microns, but have been occasionally observed up to 230 microns (0.23 mm) in diameter. Free gold and silver minerals are observed associated with quartz veins and in patches of sericite. Fine grains of pyrite occur typically oxidized to limonite or hematite, which in volume are estimated at less than 0.5 percent.

Alteration consists predominantly of silicification and sericitization. Silicified volcanic rocks typically show partial to complete replacement of the original components by fine-grained quartz. Typical silicification of the enclosing rocks grades from complete replacement by quartz to partial silicification. From the footwall of the structures towards the hanging wall the silicification grades into stockworks. Incipient propylitic alteration appears associated to areas of less dense quartz veining with presence of chlorite and pyrite.

The Guadalupe de los Reyes Project has been divided into East and West areas. The West area open pits are El Zapote North, El Zapote South, San Miguel North, San Miguel South, and Noche Buena. The proposed mining methods for the Guadalupe de los Reyes deposit is conventional open pit methods utilizing off-highway trucks and loaders. Mining is proposed to occur sequentially in five open pits.

The West area pit designs incorporate a 50 degree inter-ramp pit slope depending on rock type. Bench configuration is based on triple benching 5-meter benches with a dig-face angle of 70 degrees. The majority of benches were designed with five-meter-wide benches with 7- meter catch benches. Catch benches were designed at every third bench.

Haul roads were designed for a total width of 15 meters, which accommodates the main haul surface, berms, and ditches. All haul roads were designed not to exceed 10 percent gradients. This haul road width and grade will support the selected truck size.

The recovery method chosen for the Los Reyes is a conventional milling circuit with a gravity and carbon-in-leach (CIL) and heap leach process.