The geology of the project is characterised by hydrothermally altered Tertiary acid (dacite) volcanics associated with the Miocene-aged Cerro Bravos stratavolcano, overlying Paleozoic metasedimets. It contains a number of mineralised sectors, including Arqueros, Teterita, Huantajaya and Chimberos within the Esperanza alteration system. Arqueros, Huantajaya and Chimberos have been mined previously.

Arqueros comprises oxidised silver and gold mineralisation dominated by silver halides and electrum respectively, hosted in high sulphidation epithermal alteration of Tertiary dacitic lapilli tuffs and breccias. The mineralisation is dominated by silver, and defines two domains: a horizontal stratabound mineralisation (‘mantos’), and intersecting vertical silicified mineralised ledges (veins).

The Teterita deposit is a similar albeit a much smaller deposit than Arqueros, comprising oxidised mantos-style mineralisation comprising silver halides also hosted in high sulphidation epithermal alteration of stratified Tertiary dacitic lapilli tuffs and breccias.

The Chimberos deposit is located in an up-thrown block of folded Paleozoic conglomerates, sandstone and shale. Mineralisation is dominated by silver halides in the eastern with some gold as electrum, in the western part show similar characteristic as Arqueros by the gold-rich mineralisation with less silver contain, both styles of mineralisation is hosted by silicified hydrothermal breccia bodies of ........

Open pit mining will be carried out by a suitably skilled open pit mining contractor with specialist skills in operating at the project altitude of 4,000 to 4,200m above sea level. The contractors’ duties will include grade control drilling, blast-hole drilling, blasting, excavation and ore & waste haulage.

The Nueva Esperanza Project consists of three separate open pits; Arqueros, Chimberos and Teterita. All three are located within a two kilometres of each other. Mining will be sequenced to maximise cashflow by extracting the highest value ore blocks as early as possible.

Each pit has been staged with a number of push-backs to assist in maximising cashflow. Lower grade material will be stockpiled and will be treated towards the end of the project. The selection of ore blocks for mining is based on the highest revenue generated by the gold and silver metal. No gold equivalents are used in the selection of mining blocks.

Mining rates are reasonably consistent at 26Mtpa, and utilise a fleet of two excavators, up to two front end loaders, and a fleet of 100 tonne trucks. Approximately 1Mt of ore and waste will be mined prior to the mill being commissioned.

Mining will be completed in six years in order to bring forward high grade material for early processing. The Teterita pit is mined early in the plan due to its higher grade and lower strip ratio. The Arqueros pit also starts early in the mine plan to provide a balance of mill feed ........

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