Gold deposits of the Mulatos district are considered as high sulfidation-state epithermal systems (Austin et al, 2004; Staude, 2001). Epithermal precious metal systems may be classified as high, intermediate, and low sulfidation styles. They are characterized by the sulfidation state of the hypogene sulfide mineral assemblage, and show general relations in volcano-tectonic setting, precious and base metal content, igneous rock association, proximal hypogene alteration, and sulfide abundance (i.e.; John, 2001; Sillitoe; and Hedenquist, 2003). Ore in all occurrences is of the type formed under epizonal conditions, that is, generally within 2 kilometers of the paleo-surface. Past workers have referred to high sulfidation systems as acid-sulphate, enargite-gold, or alunite-kaolinite systems.

Gold occurs in oxide, mixed oxide/sulfide, and sulfide ore types, with pyrite as the primary sulfide mineral. The deposits are amenable to cyanidation in all ore types, but gold extraction decreases with decreasing levels of oxidation.

Precious metal mineralization at Mulatos is associated with intense silicic alteration (mostly vuggy silica), advanced argillic alteration, and the presence of hydrothermal breccias. The original protolith (dacite porphyry flow/tuff, coarse grained volcaniclastites, Breccias), as indicated by surface mapping and core drilling, may have contained in the order of 2-3 percent sulfide as pyrite with various amounts of enargite and tetrahedrite. The principle gold bearing host rock is interpreted a favoured for mineralization due to relatively high primary porosity and its intense fracturing.

Gold mineralization within the Mulatos deposit occurs primarily within areas of pervasive silicic alteration of the volcanic host rocks, and to a lesser extent, within advanced argillic alteration assemblages proximal to silicic alteration. The gold-bearing advanced argillic zones are dominated by pyrophyllite or dickite alteration. Silicic rocks host approximately 80 percent of the contained gold within the deposit.

Free gold is commonly found in hematite-filled fractures. Gold also occurs in pyrite, as gold/silver tellurides, and possibly as a solid solution in some copper sulfide minerals. Supergene oxidation and perhaps remobilization and secondary enrichment of gold have been ongoing since the post-mineral volcanic cover was removed.

The open pit mining is a typical drill, blast, load haul operation with mining in the main pit being done with 9 m bench heights. The mine switched from a 6 m to 9 m bench about two years ago for improved productivity. A 9 m bench will be used at Victor and San Carlos and it is anticipated that a 3 m bench will be used at Yaqui and Pelon to improve selectivity. The open pit schedule calls for an average of 17,500 tonnes per day (tpd) of heap ore to be delivered to the primary crusher except during the rainy season (third quarter of the year) when the schedule is for 16,000 tpd of heap ore. The mill started in early 2012 at 500 tpd which is currently supplied by the open pit mining in the Escondida area of the main pit.

Underground mining planned at Mulatos consists of two primary mining methods, longhole open stoping with delayed backfill and modified drift and fill. The preferred sequence for longhole stopes is to mine from the bottom up. Thus the upper development or drill drift for one stope becomes the lower mucking drift for the stope above after filling the lower stope.

Lower grade from the open pit is processed through four stages of crushing to a target size of 95 percent minus 3/8 inches. Run-of-mine ore is delivered to the primary crusher feed hopper by rear-dump haul trucks. Ore is first crushed to 80%, passing a 15-centimetre screen in the primary jaw crusher. Primary crushed ore is then fed to the secondary cone crusher after which it is conveyed to scalping screens where oversized ore is conveyed to the coarse ore stockpile while undersized ore is discharged and conveyed to the fine ore stockpile.

Ore is withdrawn from the coarse ore stockpile by two variable speed apron feeders and conveyed to three tertiary crushers, each with a dedicated vibrating feeder. The tertiary crushed ore is conveyed to vibrating screen where oversized ore is transferred to and crushed in the single quaternary cone crusher. The quaternary crushed ore is discharged onto the crusher conveyor and recirculated back to the vibrating screen. The undersized screened ore flows to the fine ore collection conveyor, ultimately to the fine ore stockpile. This process has "closed the crushing circuit" such that oversized material is re- circulated through the crushing process and approximately 95% of the ore passes through the 3/8-inch screen to be delivered to the pad. The higher consistency of the crushed product has positively impacted recoveries.

After crushing, lime and cement are added and the ore is conveyed to a pair of agglomerators. Once agglomerated, the ore is delivered to the leach pad for stacking and leaching via a series of portable conveyors ending with a radial stacking conveyor. The heaps are underlain by an impermeable plastic layer on top of a layer of compacted clay.

To extract the gold from the ore, a low-concentration cyanide solution is applied to the ore on the leach pad using a low-pressure irrigation sprinkler system. Alamos installs inter-lift liners on the pad on a periodic basis to reduce percolation time, which decreases the time it takes to extract and produce gold from each lift of the heap.

The resulting gold-bearing solution is channelled to the pregnant solution pond and is then pumped to the carbon-in-column circuit, where gold is recovered from the solution. The barren solution is then recirculated to the heap with added cyanide. Dore bars are produced on site and transferred to a third-party refinery for final recovery of gold and minor amounts of silver.

The high grade mill (gravity plant) was installed in early 2012 and was operating at budgeted throughput rates in 2012. Recoveries were below the budgeted 90 percent level, however, ultimate recoveries remain at 90 percent or higher as high grade mill tails are stacked and recovered on the heap leach pad. Improvements to the functionality of the gravity plant are continuing.