The geological setting of the Morococha District includes a wide range of deposit types. There are four principal types of mineralization in the district, including epi-mesothermal silver-zinc-lead- copper veins, stratiform silver and base metal replacements (mantos), intrusive-sediment contact skarns and mantos, and the quartz porphyry-hosted Toromocho disseminated copper system. The first two types account for the great majority of mineralization at the Morococha mine and are the primary types that have been and will be mined under the current operating plan.

Mineralization at the Morococha mine includes epi-mesothermal silver-zinc-lead-copper veins, bedded silver-base metal replacements or mantos (which together account for the majority of the previously mined and presently known mineralization at the Property), intrusive-sediment contact skarns, and the quartz porphyry-hosted Toromocho disseminated copper system. The size and geometry of individual ore shoots are lithology and structure dependent. Shoots range up to 400 metres in length with some traced for over 800 metres down plunge. Economic widths in the veins range from 0.5 metres to more than 6.0 metres. Vein width averages in the district are on the order of 1.2 metres.

Replacement manto mineralization is generally restricted to receptive stratigraphic horizons where favourable lithologies, especially carbonates, are intersected by mineralized veins or are proximal to pre-mineral intrusive rocks. Mantos can have a significant strike extent where the veins are closely spaced, and can range from less than one metre to up to 12 metres in width.

Ore and gangue mineralogy is similar in veins and mantos but varies considerably across the Property. Sphalerite, galena, and chalcopyrite are the most important primary minerals for zinc, lead, and copper while silver is generally present as freibergite (silver-tetrahedrite) or argentiferous galena. Gangue generally consists of quartz, calcite, barite, and rhodochrosite.

Similar to most large Peruvian polymetallic deposits, Morococha exhibits a distinct lateral and vertical metal zonation. The central Toromocho copper deposit grades outward through a lead-zinc minor silver zone and then into an outermost zone that is richer in silver with significant lead-zinc grades. There is also a distinct trend of higher silver grades at higher elevations on the west side of the Morococha mine. Silver assays of greater than 2,200 grams per tonne are not uncommon above 4,800 metres above sea level, and greater than 300 grams per tonne silver grades are also common in the outer silver-lead-zinc zone above the 4,400 metre elevation. In veins with significant vertical extents, silver grades tend to decrease as zinc grades increase with depth.

The hydrothermal alteration present at Morococha is typical of central Peruvian zoned polymetallic deposits.

Underground mining operations at Morococha consist primarily of long hole open stoping, and some conventional and mechanized overhand cut and fill. Classified tailings pumped hydraulically to stopes and waste rock are used for backfill where needed. Drilling is undertaken with hand held drills or electric hydraulic jumbo drills and the broken ore is removed using scoop trams. Mining of the wider veins and ore bodies has been mechanized with the aim of improving efficiency and operating costs. This mechanization is continuing on the narrower veins.

In the Manuelita and Sulfurosa areas of the mine, locomotives transport the ore in rail cars from the chutes to the shafts for hoisting. Other locomotives then transport the ore in rail cars to an adit where trucks then haul the ore to the stockpiles at the mill. In the Codiciada and Alapampa areas of the mine, ore is transported to underground stockpiles using scoop trams and then loaded onto haul trucks for transportation to surface via a haulage ramp.

The Manuelita (also known as Yauli) shaft has been deepened, and a new loading system is now available for production hoisting from a new mine level 70 metres below the Kingsmill tunnel. The Manuelita shaft is equipped with two 2.6 tonne skips which feed into chutes at an underground adit level from where material is transported in rail cars by a small locomotive to an adjacent surface truck loading facility. Ore is then trucked to the processing plant. The deepening project includes the development of a pumping station and other infrastructure to permit mechanized narrow vein stoping operations.

Crushing
Ore is delivered from the mine to separate stockpiles for blending purposes. The ore is fed into a 600 tonne capacity coarse ore bin after passing through an 8 inch screen. Ore from the bin is fed to the crushing circuit by two 24 inch by 18 inch reciprocating feeders that discharge onto separate 36 inches wide by 50.6 feet long conveyors, which both discharge onto one conveyor of 36 inches wide by 85.3 feet long.

The conveyor discharges onto a 4 foot by 8 foot vibrating grizzly with 3 inch openings. Screen oversize is passed through a FIMA 24 inch by 36 inch primary jaw crusher. Screen undersize material is combined with the primary crusher discharge and transported by a 30 inch by 132 foot long conveyor to a 5 foot by 16 foot Allis-Chalmers single deck screen with 1 inch openings.

Screen oversize is fed by a 30 inch by 84 foot conveyor to a 5.5 foot Symons short head secondary cone crusher to produce an 11 mm product. Discharge from the secondary crusher is transported by three in-line conveyors that send the ore through a 5 foot by 10 foot screen with ¾ inch openings. Oversize from this screen is sent back to the 5.5 foot Symons crusher, closing the secondary crushing circuit, and the undersize of this screen is combined with the undersize of the Allis Chalmers screen to be transferred in a succession of in-line conveyors to one of three fine ore bins that have a total capacity of 1,200 tonnes to feed the grinding circuit.

Grinding and classification
The grinding circuit consists of two stages of grinding and one stage of regrind to produce a final product of 65% passing 200 mesh (or 80% passing 153 microns) that feeds the bulk flotation circuit. Additionally there is a regrind stage for the zinc rougher concentrate at the zinc flotation circuit.

The primary grinding stage consists of a 9 foot diameter by 12 foot long ball mill with a 500 horsepower motor in open circuit with two 20 inch diameter hydro-cyclones, with a third hydro-cyclone available as standby. Underflow from these cyclones is fed to two secondary 8 foot diameter by 6 foot long ball mills with 250 horsepower motors each in closed circuit with the hydro-cyclones. Overflow from the cyclones (50% passing 200 mesh or 80% passing 270 microns) feeds by gravity into two in-line WS-240 flash flotation cells that recover coarse lead particles. Overflow from these cells is fed to a bulk cleaning circuit, while underflow is sent to the principal regrind stage.

The principal regrind stage consists of an 8 foot diameter by 6 foot long ball mill with a 300 horsepower motor in closed circuit with a bank of four 15 inch diameter hydro-cyclones. The overflow from these hydro-cyclones feeds the bulk rougher flotation circuit and the underflow returns to the principal regrind mill.

Additionally there is a zinc regrind circuit for the rougher concentrate from the zinc flotation circuit. This regrind circuit consists of a 6 foot diameter by 6 foot long ball mill with a 100 horsepower motor in closed circuit with a bank of four 10 inch diameter hydro-cyclones. The overflow from these hydro-cyclones feeds the cleaning stage of the zinc circuit and the underflow returns to the zinc regrind mill.

Amistad mill is using froth induced selective flotation technology to produce silver in zinc, lead, and copper concentrates. The mill flowsheet consists of two- stage crushing, ball mill grinding, selective flotation of the ore to concentrates, followed by thickening and filtering of the concentrates.

Flotation
The flotation circuit includes an initial stage of depression of zinc and flotation of a bulk concentrate. The bulk concentrate consists of copper and lead which are treated in a separation circuit with activated carbon to eliminate residues of the collectors used in the previous stage, followed by the flotation of lead and the depression of copper. The tails of the bulk flotation are activated and conditioned with copper sulfate and lime to modify the pH and to produce a zinc concentrate.

The bulk flotation circuit includes two stages of roughing, five stages of cleaning, and three stages of scavenging. The bulk concentrates are sent to the copper-le ........