Mineral deposits in the Las Chispas district are classified as gold and silver, low to intermediate sulphidation epithermal systems, typical of many deposits in Sonora, Mexico.

In northwestern Mexico, much of the exposed geology can be attributed to the subduction of the Farallon Plate beneath the North American Plate and related magmatic arc volcanism. The host rocks to mineralization in the Las Chispas district are generally pyroclastic, tuffs, and rhyolitic flows interpreted to be members of the Lower Volcanic Complex. Locally, volcanic pyroclastic units mapped within the underground workings include rhyolite, welded rhyodacite tuff, lapilli (lithic) tuff, and volcanic agglomerate.

All rock types in the Las Chispas Operation area show signs of extensive hydrothermal alteration. Thin section and TerraSpec™ hyperspectral studies identified alteration consistent with argillic and advanced argillic alteration. Alteration minerals identified include smectite, illite, kaolinite, chlorite, carbonate, iron oxy/hydroxides, probable ammonium, gypsum/anhydrite, silica, and patch trace alunite.

Generally, the host rocks are above the existing water table. Oxidation of sulphides is observed from near-surface to depths greater than 300 m and the presence of secondary minerals is recorded from the Las Chispas historic underground workings approximately 60 m to 275 m in depth from the surface. Strong and pervasive near-surface oxidation is noted to occur i ........

The Las Chispas Operation contains mineralized zones varying in dip and thickness both along strike and at depth. While all geometries are suitably extracted using the longitudinal longhole stoping method, particular areas have been selected for cut and fill mining due to geotechnical considerations. Additionally, resue mining sees limited use to minimize dilution in high-grade narrow veins. Current site practice prioritizes longhole stoping and studies are ongoing to maximize this mining method throughout the deposit where geotechnical conditions allow it. Mining areas are accessed via three portals: the Santa Rosa, Babicanora Central, and Las Chispas Portals.

The longhole longitudinal retreat mining method is used in mining areas where areas where ground conditions are fair to good. longhole stope heights of 15 m to 18 m, as well as a maximum strike length of 25 m, were selected based on geotechnical considerations.

Variations of cut and fill mining methods include cut and fill with breasting and resuing. Cut and fill with breasting will be used in mining areas with adverse ground conditions. Resuing is used in mining areas where the vein thickness is very narrow and the additional dilution through stoping by longhole or cut and fill would bring the grade below cut-off. The level distance for cut and fill and resuing was set at 18 m to reduce the total development required.

The mine plan targets a production rate of 1,200 tpd, achieved throu ........

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