The Property is located within the Western Cordillera of the Andes Mountains and the regional geology is dominated by Cretaceous aged Machay Group limestones and Tertiary aged Pocobamba continental sedimentary rocks, which are referred to as the Casapalca Red Beds.

These groups have been deformed by the Huaron anticline, the dominant structural feature of the local area. The limestones and sedimentary rocks are strongly folded and intruded by quartz monzonite and quartz monzonite dikes with associated fracturing. Following the intrusion of the dikes, the sedimentary rocks were further compressed and fractured, and subsequently altered and mineralized by hydrothermal fluids forming the Huaron deposit on the Property.

The Huaron mine is a producer of silver, zinc, lead, and copper. Ore mineralogy is made up of tetrahedrite-tenantite (gray copper), sphalerite, galena, and chalcopyrite-enargite as the most abundant ore minerals; gangue minerals mainly represented include quartz, rhodochrosite, rhodonite, manganocalcite, and alabandite.

Research has shown the presence of three different stages of mineralization and related to high temperatures (milky quartz, pyrite, tetrahedrite), intermediate temperatures (milky quartz, pyrite, brown sphalerite, and galena) and low temperatures (barite, siderite, dolomite, blonde sphalerite, galena, argentiferous tetrahedrite, polybasite, chalcopyrite, rhodochrosite, quartz, and calcite). Huarón mineralization is ........

Mining is undertaken using a combination of mechanized cut and fill (C&F) and mechanized sub-level open stoping (SLOS) methods.

The selection of the mining method depends on the location, width, and orientation of the vein to be mined, as well as the ground conditions of the FW and HW. The following sections will further describe the mining methods and their application.

Sub level open stoping
Longitudinal SLOS uses electric hydraulic long hole drills, scoop trams and development waste for backfill. Cement is occasionally added to the waste rock backfill to create a pillar which is stable upon exposure. The dimensions of the mining blocks are based on mining levels, stope layouts, previously experience and geotechnical constraints. Stopes are typically 40 m long but can range between 20 m to 100 m in length. Sub levels spacing varies between 10 m to 12 m apart vertically.

Sub levels, cross cuts, drifts, and ramps are excavated at 3.5 m wide by 3.8 m high in sub level stoping areas. More than 80% of the mine’s production is extracted using the long hole stoping method. SLOS is done at Huaron using this methodology (also known as Avoca mining method) and at times by leaving rib pillars and stopping to fill a mined block when access from the mined side of the stope is not available for backfilling.

The minimum mining width for SLOS is 1.0 m and planned dilution is included in the mine design. Dilution estimates vary according to t ........

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