Pinos Altos is estimated to contain proven and probable mineral reserves of 665,000 ounces of gold and 14.8 million ounces of silver (10.3 million tonnes grading 2.01 g/t gold and 44.78 g/t silver) as at December 31, 2022. The mine transitioned into a mainly underground mining operation in 2018 and 2019.
In 2023, most of the ore at Pinos Altos will be produced from underground deposits (Santo Nino, Cerro Colorado, Oberon de Weber and Sinter), with complementary production from the Reyna de Plata open pit.
At the advanced Cubiro underground project at Pinos Altos, initial production is expected in the second half of 2024, providing additional production flexibility to the Pinos Altos operations.
Geology
Pinos Altos lies in the Sierra Madre gold belt, on the northeast margin of the Ocampo Caldera, which hosts many epithermal gold-silver occurrences. The property is underlain by volcanic and intrusive rocks disturbed by faulting. Its geological focus is a horst structure (an uplifted block of rocks) at least 10 km long by 3 km wide, defined by the Reyna de Plata Fault to the north and the Santo Niño Fault to the south.
Mineralization
The mineral reserves at Pinos Altos are in four zones hosted by the Santo Niño Fault – the El Apache, Oberon de Weber, Santo Niño and Cerro Colorado lenses – as well as the San Eligio lens 600 metres north of the fault, and the Sinter and Reyna de Plata zones in the Reyna de Plata Fault. Most of the mineral reserves at Pinos Altos are located in the steeply dipping Santo Niño vein zone, which is up to 40 metres thick and 2.5 km long, in the adjacent Cerro Colorado zone, and at the Sinter deposit. The Reyna de Plata deposit, 1,740 metres to the southeast of Sinter, consists of low-sulphidation epithermal vein-style mineralization over a 2.5-km strike length in an east-west direction from surface to locally as deep as 250 metres. Other promising zones include the Madrono Zone (southeast of Creston Mascota), and the Cubiro deposit, which is 2 km west of Creston Mascota.
Mining
The Pinos Altos operation has been a series of open pits and an underground mine along the Santo Niño Fault, with first commercial production in November 2009. Surface mining was carried out at the Santo Niño, Oberon de Weber, San Eligio and El Apache pits using conventional open pit mining methods with shovels and trucks. The underground mining method is sublevel stoping (paste backfill) to extract ore from the Santo Niño, Cerro Colorado and Oberon de Weber deposits. The shaft project for hoisting underground ore was completed in June 2016, increasing the planned capacity of the underground mine to 4,500 tonnes/day. Underground mining of the Santo Niño crown pillar was completed in April 2019 — completing the transition of Pinos Altos from a combination surface and underground mine to a mainly underground operation.
In mid-2020, the Company depleted the Bravo Pit at Creston Mascota with residual gold leaching continuing into the first quarter of 2021. The Creston Mascota deposit was depleted in 2020 and the operation reached the end of its mine life.
At the Sinter deposit, located approximately 2 km northwest of the Pinos Altos mine site, production started in the fourth quarter of 2020 from an underground mine and a small open pit. By early 2022, production from the Sinter deposit had moved to underground.
At Reyna de Plata, open pit production began in 2022.
Processing
Ore from the Pinos Altos mine is treated by one of two processes: conventional processing in a mill for higher-grade ore; and a minor amount of heap-leaching for lower grade ore.
The conventional, 5,500-tonnes/day processing plant includes crushing, grinding, gravity concentration and agitated leaching followed by counter-current decantation. During 2017, the Company commissioned a silver flotation plant, which has increased overall silver recovery to an average of 22% in the flotation plant. Gold and silver are recovered using the Merrill-Crowe method, and a refinery produces gold/silver doré bars on site. Metals recovery in the plant averages approximately 94% for gold and 58% for silver.
Exploration
In the Pinos Altos Deep project, exploration drilling has targeted the Santo Nino and Cerro Colorado zones down to 150 metres below the lowermost operating levels at the Pinos Altos underground mine. The program to date is confirming narrow high-grade gold mineralization within broader, low-grade mineralization, demonstrating the potential to add to the mine's mineral reserves.
The Madrono zone is another potential satellite mining opportunity to provide mill feed to extend the mine life at Pinos Altos. The Madrono prospect is just 0.5 km from the Creston Mascota pit and the Bravo Zone. Previous mining in this area included small-scale bonanza production from underground mine development on three levels in the 1930s. Madrono includes at least five gold-silver veins: Molino, Madrono, Santa Martha, Madera and El Salto.
The Reyna East Zone (formerly called Reyna de Plata East) is located along the Reyna de Plata Fault, almost 1,500 metres to the east-southeast of the main Reyna de Plata deposit. Reyna East contains low-sulphidation, epithermal vein-style mineralization, with gold and silver mineralization accompanied by green-clear-white quartz and calcite in veins, stockwork and breccia. The zone extends from surface to a depth of approximately 220 metres and appears to plunge shallowly to the west. It remains open along strike and at depth.
At the Pinos Altos mine in 2023, the Company expects to spend approximately $4.4 million for 21,500 metres of expensed exploration drilling. The two main objectives are to continue to infill and expand the mineral resource at Cubiro, and to test the depth potential of the Cerro Colorado, Santo Nino and Reyna East zones and other targets on the property. Another $2.1 million is budgeted for 11,000 metres of capitalized drilling.
Development Project
The Cubiro deposit, located 9.2 km northwest of the Pinos Altos mine, could potentially supply high-grade ore to the Pinos Altos processing facilities. Underground development is ongoing at Cubiro, with underground exploration and mineral resource conversion drilling underway since 2019. Ramp development and pre-production activities will continue through 2023 into 2024, and initial production is expected in the second half of 2024. Once in production, Cubiro is expected to provide additional flexibility to the Pinos Altos operations.
The positive drilling results from the 2020 exploration program at the Pinos Altos property led to an initial probable mineral reserve estimate at Cubiro of 143,000 ounces of gold and 860,000 ounces of silver (1.5 million tonnes grading 3.00 g/t gold and 18.02 g/t silver) at underground depths and initial probable mineral reserves at Reyna East of 56,600 ounces of gold and 1.5 million ounces of silver (1.2 million tonnes grading 1.47 g/t gold and 39.91 g/t silver) at open-pit depths, as of December 31, 2020. The mineral reserve and mineral resource estimates for Cubiro and Reyna East at year-end 2022 are included in the total mineral reserve and mineral resource estimate for the Pinos Altos property.