Summary

Deposit type

• Epithermal

Summary:

The project is a low sulphidation, structurally controlled epithermal gold deposit.

Primary mineralization consists of oxides with gold in a metasomatic assemblage of carbonate, epidote, chlorite & minor silica along fractures & fault zones within a tilted conformable package of Tertiary rock.

The property occurs on the east-side of the Dragoon Mountains and is underlain by mixed mafic to felsic peralkaline volcanic rocks. A fault of regional extent bounds the property to the west, and alluvium covers the eastern, northern, and southern extents of the property. A prominent hill, the Mexican Hat Hill dominates, and several smaller hills define the physiography of the property. Several structures of more local extent can be observed on the flanks of the hills on the property and defined by geophysics.

Gold mineralization is associated with moderate to strong oxidized zones of hematite and limonite. Hematite and limonite are directly related to and fill, in part, dominant NE/SW fault and related fractured zones including secondary NW/SE fault and fractured zones. Hematite may be the result of low-temperature alteration of primary or secondary magnetite. Limonite, a secondary mineral after pyrite is common in surface oxidized zones. Malachite and azurite were observed in several locations across the property within trachyte andesite (Webb, 2015). In addition, the main elevated metal assemblage from assay results include Au, Ag, As, Hg and Sb. Limits of mineralized zones have not been determined. No sulphides or visible gold has been identified from surface exploration campaigns.

Three main types of alteration are recognized on the Mexican Hat property. First, carbonate alteration is the most common within all Tertiary volcanic rocks mapped on the property. Carbonate alteration is pervasive and ranges from weak to strong. Second, weak propylitic alteration (epidote + weak chlorite in part) was observed and is association with zones of fracturing accompanied by strong hematization. Third,weak to moderate silicification was observed within and adjacent to some extensional structures. Sericite and K-Feldspar alteration typical of low sulphidation alkali epithermal deposits may be present but these types of alteration were not observed. A Pima or suitable alteration survey may be useful in identifying all alterations present in the main elevated gold/silver zones.

Porphyry-style mineralization including skarn-type end members containing economically recoverable copper, gold, and sometimes lead, zinc, silver and molybdenum occur in this part of Arizona. The Courtland Gleeson district extends up to and may include the Mexican Hat Property. This mineralization is primarily hosted within Mesozoic sediments and younger intrusions. Placer gold deposits occur in places in washes near the base of the Turquois Mountains.

Younger mineralization hosted in rocks including Tertiary volcanic rocks occur in the area, and at Mexican Hat. The association of alkaline to subalkaline volcanic rocks and the presence of low sulphide concentrations together with the geochemistry of these rocks indicates that the Mexican Hat Property is a low sulphidation epithermal gold deposit.

Mining Methods

• Truck & Shovel / Loader

Summary:

The PEA presented in this report considers open-pit mining of the Mexican Hat gold deposit.

The design slope parameters use an 18 m height between catch benches separated by three benches each of 6.0 m height, a 66° bench face angle, and 10 m catch benches or berms. This provides for a 45° inner-ramp angle. The waste dump design includes 12 m lift heights with 12 m catch benches and a 34° slope between benches to achieve an overall slope of 2.5 horizontal to 1.0 vertical.

Within the pit designs, ramps have been established for haul truck and equipment access. The in-pit ramps will only require a single berm. Ramps outside of the pit will require two safety berms. Note that these also show parameters for onelane traffic. These would be used near the bottom of pits where the strip ratio is minimal, and the traffic requirements are low.

The ramps and haul roads assume the use of CAT-777 91-tonne haul trucks with an operating width of 6.1m. For two-way access, the goal of the road design is to allow a running width of near 3.5 times the width of the trucks. MSHA regulations specify that safety berms be maintained at a height of at least ½ of the diameter of the tires of the haul trucks that will travel on roads. The ½ height of the CAT-777 tonne haul trucks tires are 1.35 m. An extra 10% was added to berm height design to ensure that all berms have sufficient height.

Safety berms assume a slope of 1.5 horizontal to 1.0 vertical. Considering that ramps in the pit only need one berm, the road width of 26 m was determined for two-lane traffic, which allows for 3.49 times the operating width of the haul trucks. Single-lane traffic roads are estimated to require 15.5 m which allows 1.77 times the operating width of the CAT-777 haul trucks.

Roads outside of the pit will require two berms and widths are estimated to be 30.5 m allowing 3.46 times the width of the CAT-777 haul trucks.

Road designs are intended to have a maximum of 10% gradient, though some may exceed this for short distances around inside turns. Where switchbacks are utilized, the centerline gradient is reduced to about 8%. This keeps the inside gradient approximately 12%. Switchback designs have not added the detail for super elevation through the curves, but is it assumed that this will be done when they are constructed.

A detailed pit design was completed for Mexican Hat using Surpac™ software (version 6.7). Each of the designs utilize 6.0 m benches with a catch bench installed every third bench, or 18 m.

Mexican Hat pits were designed with five phases. Phase 1 mines the larger main portion of the deposit. Phase 2 continues to expand the main portion of the deposit. Phase 3 expands the main pit to the south and Phase 4 achieves the full depth and extents of the main pit. Phase 5 mines a satellite pit located to the south of the main deposit.

The Mexican Hat pits have a total of 61.1 million tonnes of waste associated with the material to be processed, and thus has an overall strip ratio of 1.87 tonnes of waste per tonne leached.

The total mining rate would ramp up from 5,000 tonnes per day to about 26,500 tonnes per day over a period of 12 months. A maximum of 46,000 tonnes per day is used in later years when the stripping becomes more significant.

Comminution

Crushers and Mills

Summary:

The Mexican Hat project is designed to crush 3.5 million tonnes of resources per annum at a daily rate of 10,000 t/d for 350 days per year. The 2-stage crushing circuit is designed at a 75% availability, equivalent to a crushing rate of about 1,110 t/h. The crushing circuit is designed to crush run-of-mine material in 2 stages from 100% passing feed size of 1,400 mm down to a product at 80% passing 38 mm. The crushing plant will be supplied, operated, and maintained by the crushing contractor.

The crushed material will be conveyed from the crushing plant by a radial stacking conveyor to a crushed material stockpile. The stockpile will have 24 hour live capacity. Crushed material is reclaimed from beneath the stockpile by two reclaim feeders to an overland conveyor where lime will be added from a silo at the required dosage. The crushed material and lime will be conveyed to the heap leach pad for stacking onto the heap leach pad.

Processing

• Smelting
• Carbon re-activation kiln
• Crush-and-stack plant
• Electric furnace
• Heap leach
• Carbon in column (CIC)
• Carbon adsorption-desorption-recovery (ADR)
• Elution
• Filter press
• Solvent Extraction & Electrowinning
• Cyanide (reagent)

Summary:

The Mexican Hat gold deposit will be mined by open pit. Run-of-mine material from the pit will be hauled to a two-stage crushing plant operated by a contractor with a nominal capacity rate of 10,000 t/d of mineralized gold material. The crushed material at 80% passing 38 mm will be conveyed to a crushed material stockpile with a live capacity of 24 hours. Crushed material will be reclaimed from beneath the stockpile by two feeders (4 ft by 15 ft each) and discharged onto an overland conveyor (1,000 m long by 42 inch wide) for conveying the crushed material to grasshopper conveyors at the heap leach pad. Grasshoppers and a radial stacking conveyor will be used to stack the crushed material onto the heap leach pads. The stacking schedule will be 12 hours per day at a rate of 833 t/hr. Lime will be added onto the reclaim conveyor from the stockpile ahead of heap leaching.

The metal recovery from heap leaching will be in an ADR circuit, regeneration, and refinery plant. The plant will have an operation availability of 92% and will be supplied as a vendor package with all the equipment necessary to recover gold from the PLS.

Pregnant solution will gravity flow through the heap leach and be collected in a lined pregnant solution pond. Pregnant solution will be pumped to two trains of 5 CIC in series (total of 10 CIC tanks) where gold in solution is adsorbed onto the carbon. Loaded carbon is advanced in the CIC circuit counter current to the flow of solution. This ensures that the highest-grade gold in solution is in contact with the highest grade loaded carbon and that the lowest grade solution is in contact with the lowest grade carbon to ensure carbon lading efficiency. Loaded carbon is transferred daily from the CIC to the 3 tonne acid wash and elution circuit.

The loaded carbon acid wash is at atmospheric pressure and acid wash solution is circulated to the bottom of the tank and overflows back into the acid wash solution tank at a rate of 2 bed volumes per hour for 1.5 bed volumes. The carbon is then rinsed with water for 30 minutes. After rinsing, the carbon is transferred to the 3 tonne strip vessel where the carbon is stripped under pressure and about 145°C. Strip solution is pumped via the bottom of the strip vessel and flows to the electrowinning circuit where gold is plated onto steel wool. Typically, eleven bed volumes of strip solution are required at a pumping rate of 2 bed volumes per hour.

Stripped carbon will be transferred to the horizontal rotary kiln for regeneration at 750°C. The carbon should be regenerated in the kiln after every desorption stage otherwise carbon loading efficiency will decrease and gold losses in solutions in the CIC will increase.

The gold rich eluate is pumped to the electrowinning cells where a current is passed so that the gold will plate onto the steel wool cathode. The barren solution from electrowinning will recirculate back to the strip solution tank to be used for mixing strip solution. A 20% bleed of barren solution is recommended to avoid buildup of contaminants.

Gold contained sludge from the electrowinning cells will be washed off the cathode and pumped to a plate and frame filter press. Filter cake will be placed in trays into a drying oven. Dried filter cake will be put through mercury retort prior to mixing with smelting flux and put into the electric induction furnace. The slag layer containing impurities will be removed prior to pouring the gold into molds to produce gold doré bars. The doré bars will be cooled, cleaned, sampled, and shipped to market.

Heap Leach Pad Design
The HLF, which includes the HLF, PLS, and event pond is planned to be located north of the proposed pit. The HLF will be constructed in two phases and has been designed for a nominal production rate of 3,500,000 t of mineralized material per year (10,000 tpd) for a total heap capacity of 32.6 Mt assuming a heap bulk density of 1.5 t/m3. The mineralized material will be mined by a standard open pit mining method, crushed to 80% minus 38 mm, and placed through transport and stacking on the HLF in 10-m-high lifts using a conveyor/stacking system. The HLF is anticipated to have a maximum height of 72 m and an overall slope of 2.5H:1V.

The HLF will consist of:
- Liner System;
- Crushed Material Stacking;
- Collection Ponds.

Water Supply

Summary:

Groundwater has been identified as the best source for a water supply to the Project operations. Successful water wells that are presently shut-in have apparently been drilled (Hernandez, pers. com, 2014) within the general project area. Water has been encountered in every drillhole completed on the Property by GMV, often at depths less than 50 m. Pumped water from the wells would be transferred by booster pumps to a freshwater tank for distribution to the various site operations. There would be separate fire and potable water tanks. A formal hydrogeologic study will need to be conducted during the next phase of project advancement to characterize local water quality and supply. Five monitoring wells would be installed around the Project site to check of the water quality for processing and environmental authorities.

Commodity Production

Operational metrics

Personnel

Job Title	Name	Profile	Ref. Date
Consultant - Mining & Costs	Tomas L. Dyer		Oct 20, 2020
Consultant - Recovery Methods & Costs	Francisco Barrios		Oct 20, 2020
President	Ian Klassen		Sep 10, 2024