United States

Mexican Hat Project

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Mine TypeOpen Pit
StagePreliminary Economic Assessment
  • Gold
Mining Method
  • Truck & Shovel / Loader
Mine Life10 years (as of Jan 1, 2020)


GMV Minerals Inc. 100 % Indirect
GMV has 100% interest in the Mexican Hat Project (the “Project”), located about 115 km (72 miles) southeast of Tucson, Arizona.


ContractorContractDescriptionRef. DateSource
unawarded or unknown Mining Contractor mining and crushing will be done at a nominal production rate of 10,000 tpd delivery to a crushing plant and lined heap leach pad. Oct 20, 2020
unawarded or unknown Crushing & Grinding Bids for contract crushing were obtained from 5 contractors from which SE selected the contractor bid for $2.49/t crushed (leached). Oct 20, 2020

Deposit type

  • Porphyry
  • Skarn


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.

Reserves at June 22, 2020

Cut-off 0.20 g/t Au
CategoryTonnage CommodityGradeContained Metal
Inferred 36,733,000 t Gold 0.58 g/t 688,000 oz

Mining Methods

  • Truck & Shovel / Loader


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.


Crushers and Mills

Milling equipment has not been reported.


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.


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


For Mexican Hat, 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.

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.

Recoveries & Grades:

CommodityParameterAvg. LOM
Gold Recovery Rate, % 88
Gold Head Grade, g/t 0.57


CommodityUnitsAvg. AnnualLOM
All production numbers are expressed as metal in doré.

Operational metrics

Daily mining rate 26,500 t *
Daily processing rate 10,000 t *
Annual processing rate 3,500 kt *
Stripping / waste ratio 1.87 *
Waste tonnes, LOM 61,115 kt *
Ore tonnes mined, LOM 32,632 kt *
Total tonnes mined, LOM 93,748 kt *
Tonnes processed, LOM 32,632 kt *
* According to 2020 study.

Production Costs

All-in sustaining costs (AISC) Gold USD 1,136 / oz *  
C1 cash costs Gold USD 951 / oz *  
Assumed price Gold USD 1,600 / oz *  
* According to 2020 study / presentation.

Operating Costs

OP mining costs ($/t milled) USD 7.69 *  
Crushing costs ($/t milled) USD 2.49 *  
Processing costs ($/t milled) USD 6.81 *  
G&A ($/t milled) USD 0.8 *  
Total operating costs ($/t milled) USD 15.3 *  
* According to 2020 study.

Project Costs

MetricsUnitsLOM Total
Initial CapEx $M USD 67.8
Sustaining CapEx $M USD 13
Closure costs $M USD 25.2
Total CapEx $M USD 80.9
OP OpEx $M USD 250.8
Processing OpEx $M USD 222.2
G&A costs $M USD 26.1
Total OpEx $M USD 499.2
Royalty payments $M USD 1.5
Pre-tax Cash Flow (LOM) $M USD 220.4
After-tax Cash Flow (LOM) $M USD 153
Pre-tax NPV @ 5% $M USD 150.6
After-tax NPV @ 5% $M USD 100
After-tax NPV @ 10% $M USD 64
After-tax NPV @ 8% $M USD 77
Pre-tax IRR, % 39.3
After-tax IRR, % 29.3
Pre-tax payback period, years 2.8
After-tax payback period, years 2.8

Heavy Mobile Equipment

Ref. Date: October 20, 2020

HME TypeModelSizeQuantityLeased or
Dozer Caterpillar D10 1 Leased
Dozer Caterpillar D8 1 Leased
Drill 1 Leased
Drill (blasthole) 2 Leased
Explosives Charger 1 Leased
Grader 2 Leased
Loader Caterpillar 992 2 Leased
Truck (haul) 100 t 8 Leased
Truck (water) 20000 gallons 1 Leased


Mine Management

Job TitleNamePhoneEmailProfileRef. Date
Consultant - Mining & Costs Tomas L. Dyer LinkedIn Oct 20, 2020
Consultant - Recovery Methods & Costs Francisco Barrios LinkedIn Oct 20, 2020
Consultant - Recovery Methods & Costs Al Kuestermeyer (303) 714-4848 LinkedIn Oct 20, 2020
President and CEO Ian Klassen (604) 899-0106 info@gmvminerals.com Dec 20, 2023

EmployeesContractorsTotal WorkforceYear
80 120 200 2020

Aerial view:


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