Pinos Altos has proven and probable mineral reserves containing 957,000 ounces of gold and 24.5 million ounces of silver (14.5 million tonnes grading 2.06 g/t gold and 52.63 g/t silver) as of December 31, 2019. The mine transitioned into an underground mining operation in 2018 and 2019, with associated higher costs.
Separately, Creston Mascota has open-pit proven and probable mineral reserves containing 61,000 ounces of gold and 1.5 million ounces of silver (758,000 tonnes grading 2.49 g/t gold and 63.05 g/t silver) as of December 31, 2019, including the Bravo deposit located immediately to the south. In 2018, the Creston Mascota pit transitioned to the Bravo pit, with higher costs due to longer hauling distances and higher stripping volumes.
In 2020, the Company expects to start underground production at Sinter and deplete the Bravo Pit at Creston Mascota approximately mid-year while gold leaching is expected to continue through 2020.
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
Pinos Altos mine’s mineral reserves 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 m north of the fault, and the Sinter and Reyna de Plata zones in the Reyna de Plata Fault. More than 35% of the current Pinos Altos mineral reserve is located in the steeply dipping Santo Niño vein zone, which is up to 40 m thick and 2.5 km long, and another 31% of the reserve is in the adjacent Cerro Colorado zone. Sinter currently has 10% of the gold in the Pinos Altos mineral reserve. The Reyna de Plata deposit, 1,740 m 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 m. The property separately has mineral reserves in the Creston Mascota deposit approximately 7 km northwest of the other lenses, and the Bravo Zone adjacent to Creston Mascota. Other promising zones include the Madrono Zone (southeast of Creston Mascota), and the Cubiro deposit, which is 2 km west of Creston Mascota.
Mining
Pinos Altos has been a series of open pits and an underground mine along the Santo Niño Fault. 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 mid-June 2016, increasing the planned capacity of the underground mine to 4,500 tonnes/day. Underground mining of the Santo Niño crown pillar began in late 2017, using long-hole sublevel stoping from surface to extract ore, and was completed in April 2019 — completing the transition of Pinos Altos from a combination surface and underground mine to a fully underground operation.
The Sinter deposit, located approximately 2 km northwest of the Pinos Altos mine, will be mined from underground and a small open pit.
The Cubiro deposit, located approximately 9.2 km northwest of the Pinos Altos mine, could potentially supply high-grade ore to the Pinos Altos processing facilities. Underground development has begun at Cubiro, with underground exploration and mineral resource conversion drilling starting in 2019.
Creston Mascota is an open-pit, heap-leach facility. It employs the same surface mining method as Pinos Altos. Mining transitioned from the Creston Mascota deposit to the Bravo deposit (to the immediate south) during 2018; Bravo also utilizes the Creston Mascota heap leach facilities, with some higher-grade ore from the Bravo pit processed at the Pinos Altos mill.
Processing
Ore from the Pinos Altos mine is treated by one of two processes: conventional processing in a mill for higher-grade ore; and 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 is expected to average 95% for gold and 54% for silver over the remaining life of the mine.
In 2019, the Company began testing samples from Pinos Altos and La India relating to an ore sorting project. To-date, sorting of open pit ore from the Sinter deposit has yielded favourable preliminary results. Similar ore sorting pilot testing is being considered at the Company's other operating sites. In the fourth quarter of 2019, ore from various assets of the Company were tested at the ore sorting pilot plant at Pinos Altos.
The lower grade Pinos Altos ore is treated in a heap-leach system designed to accommodate 5 million tonnes of material over the life of the mine. The heap leach facility is expected to contribute about 1% of the total metal production over the remaining life of Pinos Altos mine. The Company anticipates precious metals recovery in the Pinos Altos heap leach facility will average 74% for gold and 16% for silver.
Most of the Creston Mascota ore is processed using heap-leaching, with some higher grade ore from the Bravo pit processed at the Pinos Altos mill. Creston Mascota’s 4,000-tonne-per-day heap leach facility is similar to the Pinos Altos facility, but includes three stages of crushing and agglomeration, and the precious metals are recovered by a small carbon adsorption circuit. In 2018, work on the Phase V leach pad expansion was completed and stacking of material began at the end of 2018.
Exploration
Several satellite mining opportunities exist around Pinos Altos that are being evaluated for their incremental production potential.
Development of the Sinter satellite deposit at Pinos Altos continued to advance in 2019. The Sinter deposit, located approximately 2 km northwest of the Pinos Altos mine, will be mined from underground and a small open pit.
Other exploration at Pinos Altos is focused on the Reyna East Zone (formerly called Reyna de Plata East) in the southeast of the property and at the Cubiro deposit in the property's northwest, where an exploration ramp is providing additional access for drilling exploration targets from underground.
The Reyna East Zone is located along the Reyna de Plata Fault, almost 1,500 m to the east-southeast of the main Reyna de Plata deposit.
The Reyna East Zone 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. There is a direct correlation between the occurrence of green quartz veinlets and the highest gold values. The zone extends from surface to a depth of approximately 220 m and appears to plunge shallowly to the west. It remains open along strike and at depth.
The Cubiro deposit is located approximately 9.2 km northwest of the Pinos Altos mine and 2 km west of the Creston Mascota deposit. Based on exploration drilling, Cubiro could potentially contribute additional ore to be processed at Pinos Altos and extend its current life of mine.
Development Project
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. Recent results at Madrono are encouraging for the potential of open pit deposits in the Madrono, Santa Martha and Madera veins, as well as significant high gold grades supporting a potential underground mining scenario. Drill results are encouraging for the potential of a broad area of mineralization at the junction of the Madrono and Santa Martha veins. These intercepts indicate the presence of an ore shoot plunging to the southwest with potential to grow at depth and laterally.
The Madrono zone including the El Salto vein continues to be open at depth.