Taguas consists of three gold-silver deposits:
• Leonor Vein at Cerro Silla Sur
• Campamento Vein at Cerro Campamento
• The oxide gold-silver mineralization at Cerros Taguas that is the focus of this PEA
report.

Cerro Silla Sur contains a northeast trending and steeply dipping (to the northwest) quartz-pyrite-enargite vein called Leonor. The central portion of the Leonor vein has returned grades of 7 to 42 g/t gold, up to 330 g/t silver and 0.1 to 5 % copper over drill intersections of less than 1 m to 7 m (Hedenquist, 2012). The mineralogical characteristics of the Leonor Vein are consistent with it being of the intermediatesulfidation type as evidenced by increasing amounts of chalcopyrite relative to enargite. Such intermediate-sulfidation veins typify the peripheral portions of high-sulfidation systems, and the elevated zinc and lead contents of Leonor lend support for cooler conditions of formation (Sillitoe, 2011).

The mineralogical characteristics of the Campamento Vein are more consistent with it being of the high-sulfidation type as evidenced by the predominance of enargite over chalcopyrite. The Campamento vein has returned drill intersections 1-3m wide with 5- 35 g/t gold over a vertical interval of at least 100m (Hedenquist, 2012). The uppermost 100 meters of the Campamento vein usually contain only a few percent pyrite and enargite but often contain bonanza grade gold. Sillitoe (2011) proposed that the sulfide deficiency is a hypogene feature, and not the result of supergene oxidation. However, other geologists (e.g. Stewart, 2008; Kowalik, 2015 and 2017) believe that the sulfide and thereby copper deficiency but gold enrichment in the upper parts of the Campamento vein are due to supergene oxidation effects, depleting mobile copper and enriching less mobile gold. If so, the supergene zone should be transitional downwards into veins of massive sulfides, predominantly enargite with lesser pyrite. According to Hedenquist (2012), the amount of enargite in the Campamento vein does increase markedly with depth.

The mineralization in the upper 100 m to 200 m at Cerros Taguas, however, is markedly different from the mineralization at Campamento and Leonor. The mineralization at Cerros Taguas is not a single large vein like is mostly Leonor and Campamento but the product of very numerous small veins. Hedenquist (2012) proposed that Cerros Taguas may be a hydrothermal breccia bordering a felsic flow-dome intrusive. However, the purported intrusive flow dome contains rounded quartz eyes which may be more indicative of a tuff.

The mineralization at the Cerro Taguas Norte, Cerro Taguas Sur, Cerro III and Cerro IV deposits is interpreted to be typical of high-sulfidation epithermal gold mineralization that has undergone supergene oxidation during acid sulfate alteration.

Mineralization at Taguas has the following characteristics that are consistent with the supergene-oxidized high-sulfidation deposit model:

• Near surface emplacement, hosted within Cenozoic aged volcanic units;
• Strong advanced argillic quartz-alunite alteration and saline fluid inclusions with high homogenization temperatures which indicates an acidic, magmatic fluid source
• Gold-silver mineralization in quartz-sulfide veins hosted in volcanic rocks and volcanic breccias
• The presence of jasperoids and clearly visible Fe-oxides at surface identify the
supergene oxide zone.

The mining method proposed for the Taguas Project is conventional truck and shovel open pit mining. Open pit mining was selected because of the near-surface nature of mineralization, the value of the mineralization and the anticipated mining selectivity of mineralized material during the operation.

Whittle software was used to optimize the final pit shell and select phases for the life of mine production plan. The PEA mine design criteria are:

• Approximately 9 Mt/a mining capacity with a plant capacity of 4.2 Mt/a or nominally 12 kt/d
• Metal prices of US$1,300/oz and US$17/oz
• Metallurgical recovery of 87% Au and 52% Ag.

The PEA life of mine (LOM) is ten years during which 38.4 Mt of waste and 37.8 Mt of mineralized material with an average grade of 0.39 g/t Au and 14.5 g/t Ag will be mined.

Production will be achieved with an Atlas Copco ROC D55 drill, up to three Caterpillar 374F loaders and a fleet of up to 21 Volvo FMX 8x4 haul trucks. A fleet of secondary equipment including D6 and D8 dozers, graders and water trucks will be used to support mine production.

It is assumed that a local mining contractor will be used over the life of mine. Operating costs are estimated to vary between US$2.00/t for mineralized material and waste during periods with relatively short haulage distances and US$2.42/t at the end of the life of mine when haulage distances are longer.

The recovery process will be based on crushing and agglomeration at a rate of 12,000 t/d, stacking in 6 m lifts on a permanent heap leach. Followed by gold and silver recovery from the heap leach pregnant solution in a carbon adsorption–desorption–recovery (ADR) plant, and electrowinning, to produce doré gold bars.

Mineralized material from the mine will be delivered by truck to a primary crusher feed hopper. This is discharged by a belt feeder delivering to a vibrating sizing screen that separates oversize mineralized material coarser than 50 mm to feed a cone crusher. The crusher discharge and undersize of the vibrating screen are combined on a collection conveyor belt delivering to a crushed mineralized material storage bin. The crushed mineralized material bin will be discharged by a belt feeder delivering to an agglomerating drum.

Lime and binder, dosed separately, will be added to the agglomerating drum with crushed mineralized material and barren leach solution (BLS). The agglomerated material will be transported on a series of horizontal and grasshopper conveyors and radial stacker system and stacked on a permanent heap pad in 6 m lifts. The heap leach will be irrigated by barren leach solution rich using drip emitters installed over the leaching pad for a period of 23 days. Rain covers will be installed to avoid water excess entering the leaching pad system, and to control the water balance.

Gold rich pregnant leach solution (PLS) will percolate through the leaching pad, be collected in a drainage layer at the base of the heap and conducted to a PLS pond. PLS solution will be pumped to the ADR (Adsorption- Desorption-Recovery) plant for gold and silver recovery. An event pond will provide storage for excess water during storm events and/or to serve as PLS pond.

In the ADR plant, gold and silver will be recovered in a carbon column circuit by adsorption onto carbon. Barren tailings solution will be stored in a solution tank and recycled to the heap leach to irrigate fresh mineralized material. Loaded carbon will be treated in a desorption plant consisting of acid wash and elution, carbon regeneration and electrowinning to produce doré bars.