Deposit Type The Guanajuato Mining District is a world-class, high-grade, silver-gold, epithermal vein system with low sulfidation and adularia-sericite alteration. It is historically a well-known, studied, and documented mining district. The Guanajuato veins are typical of most epithermal silver-gold vein deposits in Mexico with respect to volcanic activity, volcanic and sedimentary host rock affinities, mineral paragenesis, silver-gold grades and ratios, vein mineralogy, and alteration styles. Epithermal systems form relatively near the surface, ranging from hot spring style gold and gold-silver mineralization developed in sinter terraces and shallow bedrock with deeper hydrothermal feeder zones to vein deposits and hanging wall splits at depths of several hundred meters. The hydrothermal solutions are driven by heat from volcanic activity. The hot circulating hydrothermal waters rise up through fissures with pressures building up until the hydrostatic pressure is released (sometimes explosively) allowing solutions to boil and precipitate the metallic minerals. Typically, this is a cyclical or recurring event as the fissures repeatedly get plugged and pressures build up until fracturing once again releases the hydrostatic pressure. The typical banding nature of the veins represents the cyclical pressure buildup, release by fracturing, boiling, and precipitation of minerals multiples of times until the system is finally exhausted. These multiple events allow the range of e ........

Guanajuato Silver operates the combined El Cubo and El Pingüico properties to provide feed to the El Cubo mill (also known as the El Tajo plant). Material from the underground mine at El Cubo, combined with mineralized material from other sources, will be the primary feedstock to the El Cubo mill between 2023 and 2028. Although some material from El Pingüico has been processed since 2021, for purposes of this PEA, no additional feed from the El Pingüico stockpiles is projected to be fed to the El Cubo processing facility at this time.

Mechanized cut-and-fill stoping using small LHD (load-haul-dump) machines and handheld jackleg drills is the current mining method. This method does allow for some degree of resuing to eliminate or minimize the amount of waste dilution and to provide fill for the stopes. A small amount of long hole open-stoping has also been utilized. Other methods, such as stull stoping, may be considered in the future.

Development at El Cubo is conventional drill-blast-muck using jumbos for drilling and LHDs and trucks for haulage. Ground support is installed, as required.

At El Pingüico, only material from the surface stockpile has been hauled to the El Cubo concentrator for processing. At this time, no mining methods have been proposed for recovery of the underground stockpiles.

EL CUBO
Starting in 2021, Guanajuato Silver initially extracted mineralized material from El Cubo from stopes that were shut down ........

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