Location

Taviche Mining District, Oaxaca, Mexico
Latitude: 16° 41’ 40” N, Longitude: 96° 42’ 00” W

Commodities

Commodities

Silver, gold

Ownership

Ownership

100%

Land Package

Land Package

71,000 hectares

Operation

Operation

3,000 tpd underground operation

Deposit Type

Deposit Type

High-grade, low sulphidation epithermal vein deposit

Mining Method

Mining Method

Overhand cut-and-fill

Highlights

2016 production: 6.1 million ounces of silver and 46,018 ounces of gold

The San Jose mine was commissioned in July 2011 and began commercial production in September 2011 at a rate of 1,000 tpd. In September of 2013, the mill was expanded from 1,150 tpd to 1,800 tpd and in April 2014, the mill was further expanded to 2,000 tpd without incurring in additional capital investments. Expansion of the mill from 2,000 tpd to 3,000 tpd was initiated in the first quarter of 2015 and successfully commissioned on time and under budget in July 2016.

Location

San Jose is located in the Taviche Mining District (Latitude 16° 41’ 40” N, Longitude: 96° 42’ 00” W) in the southern portion of the state of Oaxaca, approximately 47 road kilometers (one hour drive) south of the city of Oaxaca. Access to the property is excellent and local infrastructure is good.

Geology and Mineralization

The San Jose deposit is a low sulfidation epithermal vein system characterized by mineralized multiphase quartz-carbonate-sulfide veins, hydrothermal breccias and stockwork veining. The mineralized system is hosted within a sequence of Tertiary andesitic volcanic and volcaniclastic rocks.

2017 Production and Cost Guidance

Silver Production
(Moz)

7.1

Gold Production
(koz)

51.9

Cash Cost
(US$/t)

56.7

AISC
(US$/oz Ag)

8.4

Notes:

  1. Cash cost per tonne includes all on-site direct and indirect production costs, community relations expenses, concentrate transportation and corporate management fees. It excludes government royalties and workers participation.
  2. All-in sustaining cash cost (AISC) per ounce of silver is net of by-products gold, lead and zinc

Exploration

Brownfields exploration program budget for 2017 at the San Jose Mine is $7.0 million, which includes 31,000 meters of diamond drilling and 600 meters of underground development for drilling to define future resources. Exploration drilling is in progress at the Trinidad Central zone and on the sub-parallel Ocotlan vein in the San Jose Mine.

Trinidad North Discovery Drilling Highlights

Hole IDFrom
(m)
To
(m)
Interval
(m)
ETW¹
(m)
Ag
(g/t)
Au
(g/t)
Ag Eq²
(g/t)
SJOM-335419.00425.306.303.73,51115.044,413
SJOM-337314.90324.359.456.54983.03680
SJOM-340265.70273.007.304.22,76214.463,630
SJOM-343272.00286.9514.9510.21,1908.451,697
SJOM-345397.65416.6018.9510.33052.44452
SJOM-346293.50303.5010.006.51,5037.761,969
340.50368.0027.5018.86004.20852
SJOM-349A320.00330.2010.204.59294.871,221
367.00375.458.454.11,80813.212,601
SJOM-359389.25395.306.053.48874.041,129
SJOM-364462.05467.305.253.02,57310.773,219
SJOM-369355.30361.005.703.31,0295.941,385
SJOM-378391.15398.307.154.94671.93583
SJOM-386321.45348.5027.0513.03992.15528
SJOM-390413.85421.908.054.06362.93812
SJOM-395414.70420.956.253.38544.971,152
SJOM-401 including339.95374.9034.9518.04262.62583
343.05352.008.954.61,2828.111,768

Notes:

  1. ETW = Estimated true width
  2. Ag Eq values calculated at Au:Ag ratio of 60 based on assumed metal prices of Au = $1,140/oz and Ag = $19/oz and metallurgical recoveries of 89 % for both gold and silver

Reserves and Resources

Mineral Reserves - Proven and Probable

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Contained Metal
Ag
(Moz)
Au
(koz)
San Jose Mine, MexicoProven641861.510.43.1
Probable4,9572501.7339.8275.3
Proven + Probable5,0212491.7240.2278.4

Mineral Resources - Measured and Indicated

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Contained Metal
Ag
(Moz)
Au
(koz)
San Jose Mine, MexicoMeasured112830.650.32.3
Indicated734770.611.814.4
Measured + Indicated846780.612.116.7

Mineral Resources - Inferred

PropertyClassificationTonnes
(000)
Ag
(g/t)
Au
(g/t)
Contained Metal
Ag
(Moz)
Au
(koz)
San Jose Mine, MexicoInferred3,1012521.6625.1165.4

Notes:

  1. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves
  2. Mineral Resources are exclusive of Mineral Reserves
  3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
  4. There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources or Mineral Reserves at San Jose
  5. Mineral Resources and Mineral Reserves are estimated as of June 30, 2016 and reported as of December 31, 2016 taking into account production-related depletion for the period through December 31, 2016
  6. Mineral Reserves for San Jose are estimated using a break-even cut-off grade of 127 Ag Eq g/t based on assumed metal prices of US$19/oz Ag and US$1,140/oz Au; estimated metallurgical recovery rates of 90.5% for Ag and 90.5% for Au and and projected operating costs. Mineral Resources are estimated at a 100 g/t Ag Eq cut-off grade with Ag Eq in g/t = Ag (g/t) + Au (g/t) * ((US$1,140/US$19) * (90.5/90.5)). Proven + Probable Reserves include 2.31 Mt containing 22.3 Moz of silver and 141.0 koz of gold reported at a 130 g/t Ag Eq cut-off grade and Inferred Resources totaling 1.57 Mt containing 13.6 Moz of silver and 80.0 koz of gold reported at a 100 g/t Ag Eq cut-off grade located in the Taviche Oeste concession and subject to a 2.5% royalty
  7. Totals may not add due to rounding procedures
Technical Report

Technical Report

Effective Date: August 20, 2016

Maps and Sections

Maps and Sections

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Photo Gallery

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