Overview

The Topia mine is located near the town of Topia, Durango State, Mexico, approximately 235 kilometres northwest of the city of Durango. The property is accessible by traveling north for approximately 200 km on paved Highway 23, and west for 150 km on a paved and gravel road to Topia. The Topia town is presently served by daily small-aircraft flights from Durango and Culiacan and is the principal centre for the area with schools, shops, a small hospital, and public telephone and internet access.

Topia is a silver-gold-lead-zinc mine consisting of several narrow-vein, underground operations utilizing a modified cut-and-fill mining method known as ‘resuing’. The mines are typically accessed by unpaved mountain roads leading to adits that either follow the veins into the mountains or are driven to cross-cut them. The veins range from 15 to 150 cm wide, with an average of 30 cm. Broken ore is hauled from the mines by eight-tonne truck to the central processing plant on the edge of town.

The plant capacity is approximately 220 tonnes per day average over the year but is being de-bottlenecked to run 270 tonnes per day average and at an instantaneous rate close to 300 tpd on a daily basis. The plant consists of a two-stage crusher which produces a fine ore mill feed (3/4 inch), a grinding circuit consisting of three ball mills, and two conventional flotation circuits producing a high-quality silver- and gold-rich lead concentrate plus a zinc concentrate. The concentrates are transported to the Pacific port of Manzanillo, where they are sold to commodity traders. From Manzanillo, the concentrates are shipped to smelters worldwide for the extraction and refining of metals.

Operating Results

Q4 2021

Q4 2020

Change

FY 2021

FY 2020

Change

Ore processed (tonnes)

14,560

9,959

46%

63,516

57,390

11%

Ag grade (g/t)

301

337

-11%

378

352

7%

Au grade (g/t)

0.74

0.81

-9%

0.83

0.84

-1%

Ag recovery (%)

91%

90%

1%

93%

92%

1%

Au recovery (%)

63%

49%

30%

61%

54%

13%

Silver eq production (oz) (1)

212,006

179,657

18%

1,129,611

1,085,979

4%

Silver production (ounces)

128,647

97,263

32%

716,507

597,190

20%

Gold production (ounces)

218

127

72%

1,047

835

25%

Lead production (tonnes)

235

212

11%

1,385

1,233

12%

Zinc production (tonnes)

406

294

38%

1,849

1,714

8%

Gold eq production (oz) (2)

2,494

1,996

25%

13,290

12,066

10%

  1. Silver equivalent ounces for 2021 were calculated using an 85:1 Ag:Au ratio, and ratios of 1:0.041 and 1:0.049 for the price/ounce of silver to price/pound of lead and zinc, respectively, consistent with the Company's guidance for the year. Silver equivalent ounces for 2020 were calculated using a 90:1 Ag:Au ratio, and ratios of 1:0.058 and 1:0.068 for the price/ounce of silver to price/pound of lead and zinc, respectively, consistent with the Company's guidance for the year.
  2. Gold equivalent ounces for 2021 were calculated using a 1:85 Au:Ag ratio, and ratios of 1:0.0005 and 1:0.0006 for the price/ounce of gold to price/pound of lead and zinc, respectively, consistent with the Company's guidance for the year. Gold equivalent ounces for 2020 were calculated using a 1:90 Au:Ag ratio, and ratios of 1:0.0006 and 1:0.0008 for the price/ounce of gold to price/pound of lead and zinc, respectively, consistent with the Company's guidance for the year.

Resource Estimates

The mineralized veins at Topia are laterally extensive and can locally be followed for more than four kilometres. They are steeply dipping and, due to their narrow width, mine development is ‘on-vein’ rather than parallel to it. Consequently, the veins are drilled at wide spacing from surface to trace their lateral continuity, then detail sampled underground as development progresses. Very little underground exploration drilling is conducted. In this way, Inferred Mineral Resources are defined primarily from surface drilling while these are upgraded to Measured & Indicated Resources once the underground sampling is complete. This methodology also proves adequate as a guide to mine planning.

TOPIA MINERAL RESOURCE ESTIMATES AT MARCH 31, 2021

Classification Tonnage (kt) Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag Eq (g/t) Ag Eq (oz)
Measured 176.0 630 1.92 4.63 4.80 1,085 6,141,106
Indicated 155.8 587 1.75 4.15 4.16 991 4,965,431
M&I 331.8 609 1.84 4.40 4.50 1,041 11,106,538
Inferred 274.6 592 1.44 3.35 3.63 931 8,222,655

Notes:

  1. CIM Definitions were followed for Mineral Resources.
  2. Area-Specific vein bulk densities as follows: Argentina - 3.04t/m3; 1522 - 3.15t/m3; Durangueno -3.15t/m3; El Rosario – 2.92t/m3; Hormiguera - 2.61t/m3; La Prieta - 2.86t/m3; Recompensa - 3.32t/m3; Animas - 3.02t/m3; San Miguel - 2.56t/m3; San Juan – 3.39t/m3; Laura (Hipolito) – 2.85t/m3; and Union de Pueblo – 2.61t/m3.
  3. Measured, Indicated, and Inferred Mineral Resources are reported at a cut-off Net Smelter Return (NSR) in US$, include 1522 Mine $280/t, Argentina Mine $257/t, Durangueno Mine $202/t, Recompensa Mine $245/t, Hormiguera Mine $230/t, El Rosario Mine $345/t, La Prieta $254/t, Animas $287/t, San Miguel $241/t, San Juan $233/t, Laura (Hipolito) $252/t, and Union de Pueblo $241/t.
  4. Total estimates may not agree due to rounding.
  5. A minimum mining width of 0.30 metres was used.
  6. Mineral Resources are estimated using metal prices of US$1,650/oz Au, US$20.00/oz Ag, US$0.85/lb Pb, and US$1.20/lb Zn; and metallurgical recoveries of 92.4% for Ag, 55.4% for Au, 94.3% for Pb, and 90.5% for Zn.
  7. 2021 Mineral Resource Ag Eq oz were calculated using 85:1 Ag:Au ratio, and ratios of 1:0.041 and 1:0.049 for the price/ounce of silver to price/pound of lead and zinc, respectively. The ratios are reflective of average metal prices for 2021.
  8. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource. Inferred Mineral Resources have a high degree of uncertainty as to their economic and technical feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resources can be upgraded to Measured or Indicated Mineral Resources.
  9. There are no known legal, political, environmental, or other risks that could materially affect the Mineral Resource Estimates detailed in this report.

Robert F. Brown, P. Eng., and Mohammad Nourpour, P. Geo., are the Qualified Persons for the Topia Mineral Resource Estimate under the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects. For additional information and disclosure related to the Topia Mineral Resource Estimate, please refer to the news release dated February 11, 2021.

NI 43-101 Technical Report on the Topia Mine

Durango, Mexico   |   March 31, 2021

Download PDF