The deposits in the Los Filos Project area are considered to be typical of intrusionrelated gold– silver skarn deposits.

Mineralization is either hosted by or spatially associated with marble formed during contact metamorphism of the carbonates. Massive magnetite, hematite, goethite and jasperoidal silica, with minor associated pyrite, pyrrhotite, chalcopyrite and native gold typically occur in the veins and metasomatic replacement bodies that developed at the contacts between the carbonates and intrusive rocks.

The Los Filos Mine Complex comprises two active open pits (Los Filos Open Pit and Bermejal Open Pit), one active underground mine (Los Filos Underground Mine), one planned open pit mine (Guadalupe Open Pit), and one planned underground mine (Bermejal Underground Mine). Mining is scheduled to commence in Guadalupe Open Pit in Q1 2020. Development mining was underway in 2018 at Bermejal Underground Mine, and ore mining is expected to commence in Q4 2019 based on the current production schedule.

The Expansion Feasibility Study incorporates the potential for: development of the Bermejal underground mine, enlarging the Los Filos open pit mine, re-phasing of the Bermejal open pit into two distinct open pits (Bermejal and Guadalupe).

The site-wide LOM plan for the Los Filos mine complex has contributions from two high-grade underground mines and three large, lower-grade open pits.

Underground Mining

Bermejal Underground
Bermejal underground mine design and cost estimation was completed by SRK Consulting (Canada) Inc. A total of 11 kilometres (km) of horizontal and vertical development will be completed during the initial development period and a further 45 km of development over the life of mine. The mine life extends for nine years producing 6.4 million tonnes (Mt) at 6.57 grams per tonne (g/t) for contained gold of 1.348 Moz (Proven reserves of 0.4 Mt at 7.50 g/t for 0.095 Moz gold and Probable reserves of 6.0 Mt at 6.51 g/t for 1.253 Moz gold). Mining costs of $99 per tonne are based on contractor mining. The mining method is underhand drift and fill with cemented rock fill (CRF) used as backfill. Bermejal underground will have a dedicated CRF production plant. The production rate averages 2,000 tonnes per day (tpd) and peaks at 2,150 tpd. Bermejal underground contributes 31% of the contained gold in the LOM plan.

Los Filos Underground
The Los Filos underground mine is currently operating at over 1,800 tpd and in the LOM plan averages 1,700 tpd with mining costs of $73 per tonne based on owner and contract mining. Reduced operating costs, improved mining efficiencies and additional drilling have enabled the update of the Los Filos underground mine plan to extend to 2021. The reserves are 1.9 Mt at 5.50 g/t for a total of 0.338 Moz gold (Proven reserves of 0.8 Mt at 5.34 g/t for 0.144 Moz gold and Probable reserves of 1.1 Mt at 5.63 g/t for 0.194 Moz gold).

Open Pit Mining
Los Filos utilizes conventional open pit mining methods with an owner-operated fleet supplemented with rental of additional equipment during peak production periods. The average open pit mining costs are $1.41 per tonne mined.

Los Filos Open Pit
The expanded Los Filos open pit has a Proven and Probable reserve of 42.7 Mt at 0.57 g/t containing 0.776 Moz (including dilution and recovery; Proven reserves of 34.1 Mt at 0.59 g/t for 0.645 Moz gold and Probable reserves of 8.6 Mt at 0.47 g/t for 0.131 Moz gold). The mine life was extended seven years to 2027. The Los Filos open pit has an overall strip ratio of 4.0.

Bermejal and Guadalupe Open Pits
The Bermejal and Guadalupe open pits have been split into two open pits and rescheduled to mine the higher-grade Guadalupe ore earlier in the schedule which significantly improves the economics. Guadalupe has a Proven and Probable mineral reserve of 26.3 Mt at 1.55 g/t Au for 1.313 Moz (Proven reserves of 0.2 Mt at 0.35 g/t for 0.003 Moz gold and Probable reserves of 26.1 Mt at 1.56 g/t for 1.310 Moz gold). A pushback in 2020 will open this up as a separate open pit that has a 10-year life. The Guadalupe pit has an overall strip ratio of 8.0.

The Bermejal open pit extends for at least five years to 2025 based on the current reserves. Proven and Probable mineral reserves are 34.0 Mt at 0.54 g/t Au for 0.588 Moz (Proven reserves of 1.3 Mt at 0.47 g/t for 0.019 Moz gold and Probable reserves of 32.7 Mt at 0.54 g/t for 0.569 Moz gold). The overall strip ratio of the Bermejal open pit is 2.7.

The Bermejal underground mine utilizes the existing 1,330-metre exploration ramp as its main access ramp and includes an additional 11 km of development. The 15-month pre-commercial development period and the Expansion Feasibility Study assumes this commences in Q2 2019 and extends to Q3 2020 when the production rate sustains 1,100 tpd. Ore produced prior to start-up of the CIL plant will be sent to the heap leach facility.

The existing ramp extends from 1,428 metre elevation at the bottom of the mined-out portion of the Bermejal open pit to 1,238 metre elevation; mineralization extends to at least 770 metre elevation. The Expansion Feasibility Study contemplates sustaining development continuing to 2026 to provide access to all six mineralized areas. Over 75% of the ounces are from the central zone (zone 5) which has the highest grades and widest intervals of mineralization.

Ore is currently processed by conventional heap leaching methods to recover the contained gold and silver. In addition, installation of carbon-in-leach (CIL) cyanidation processing facilities to
recover gold and silver from higher grade ore sourced primarily from the future Bermejal
Underground mine is being investigated.

The Los Filos carbon-in-leach (CIL) plant design is based on a robust metallurgical flowsheet developed for optimum recovery while minimizing capital expenditure and operating costs. As the CIL plant is an addition to an existing operation, the existing site services (power, water, etc) will be used, where appropriate, to supply the new facilities and the existing (modified) ADR plant will be used for recovery of gold from the loaded carbon.

The flowsheet of the new CIL plant includes crushing, milling, carbon in leach, carbon regeneration and thickening and filtration of the CIL tailings for dry stack storage. The existing ADR plant pressure Zadra / electrowinning circuit will be modified for the higher gold and silver loadings on the carbon and the precious metals will be smelted to doré bars in the existing gold room.

Process plant feed comprises four main ore types: Bermejal Underground (BUG), Bermejal Open Pit (BOP), Los Filos Underground (LFUG) and Guadalupe Deposit (Guadalupe).

The average LOM gold grade is 4.99 g/t Au and 21.0 g/t Ag.

The plant design is considered appropriate for a project with a 10-year operating life. The key criteria for selection of equipment type are cost, suitability for duty, reliability and ease of maintenance. Fabrication and delivery times were then used as criteria for selection between vendors of broadly similar equipment due to the aggressive project schedule. The plant layout provides ease of access to all equipment for operating and maintenance requirements, while maintaining a layout that will facilitate construction progress in multiple areas simultaneously.

The key project design criteria for the plant are:

• Capacity to treat 4,000 tpd (1.46 Mtpa) of varying blends of the main ore types as determined by the Integrated Life of Mine Production Schedule.
• Crushing plant utilization of 75% and CIL and tailings filtration plant utilization of 91.3%, supported by the incorporation of surge capacity and standby equipment where required.
• The grinding plant will grind ores to a P80 of 75 µm and leach them in a CIL circuit for 40 hours to recover an estimated 89% and 40% of the contained gold and silver, respectively.
• Gold will be recovered from the loaded carbon in the existing ADR plant modified to accommodate the higher gold and silver carbon loadings.
• CIL plant tailings will be filtered and washed with barren solution to reduce the entrained cyanide level before delivery, by truck, to a dry stacking facility.
• Sufficient automation and plant control will be incorporated to minimize the need for continuous operator intervention, but to allow manual override and control if and when required.

The process plant design incorporates the following unit process operations:

• ROM ore fed through a static grizzly to a bin providing 270-t surge capacity (i.e., two 136-t haul trucks)

• Apron feeder, vibrating grizzly, primary crusher and conveyor feed to the surge bin

• Crush ore surge bin providing 15 minutes of mill feed surge capacity with an overflow conveyor to a dead stockpile

• Apron feeder drawing from the surge bin to a conveyor feeding the milling circuit

• A single stage SAG mill, in closed circuit with hydrocyclones, to produce a grind size P80 of 75 µm and an overflow slurry density of 40% solids

• A leaching circuit with six CIL tanks to achieve the required 40 hours of residence time for optimum leach recovery

• A tailings thickener for process water recovery and to provide an optimum slurry density for filtration

• Plate and frame pressure filters with cake wash to reduce the filtered tailings cake cyanide content

• Conveyors and two buffer stockpiles for loading filtered tailings into mine haul trucks for transport to long-term storage

• Road transport of loaded carbon to (and return from) the existing ADR plant for gold recovery

• Modifications to one existing ADR plant elution / electrowinning circuit

• New carbon regeneration kiln for the returned barren CIL carbon.

Provision has been made in the layout for future expansion by addition of a ball mill, two additional leach tanks and a fifth tailings filter. Room has been allowed in the layout of the process plant for the installation of a SART (Sulphidization, Acidification, Recycle and Thickening) plant to treat the tailings thickener overflow to recover copper and cyanide from the circuit and allow the economic treatment of ores with a higher cyanide soluble copper content.