Exploration:
The Miguel Auza property encompasses 41,498 ha (102,540 acres) and lies on the eastern flank of the Fresnillo Mexican Silver Trend some 150-200 km north of Fresnillo and Zacatecas City, both of which areas have and continue to be the source of a large percentage of Mexican silver, lead and zinc production. The property covers numerous high- and low-sulphide epithermal veins carrying Ag, (Au), Pb, and Zn. The property has been the site of a large amount of historic mining since the time of the Spaniards and as recently as 2008 when SEG (through its Mexican subsidiary) carried out mining and milling on the Calvario Vein system.
The large property has seen very little modern exploration other than on Calvario and its immediate surroundings, and the main thrust of the Company’s exploration program was an evaluation of the regional potential. This work began in late 2009 and in March 2010 the company announced that it had outlined six northwest-trending quartz veins varying in thickness from two to 10 m, with a strike length of up to 1,500 m. The “Madera Veins” are composed of multiple stages of quartz and calcite banding and the quartz shows the multi-stage brecciation and replacement textures typical of epithermal veins. Traces of silver sulfides can be found locally. The lack of significant silver grades in the outcrops explains why these veins have seen only local shallow prospecting and why their potential importance was previously overlooked. A 12-hole drilling program was completed on the veins in June 2010. This drilling confirmed the presence of a large epithermal system with veins which persist to a depth of at least 440 m vertical. Significant amounts of pyrite and pyrrhotite were found in portions of the veins. The best intersection was 1.75 m (estimated true thickness) running 321 g/t (9.4 oz/T) Ag, 0.72% Pb, 0.20% Zn and reported in a press release dated May 25, 2010.
Subsequent exploration focused on regional mapping and reconnaissance, particularly in an area between the Madera and Calvario veins where historic drilling encountered several narrow intersections of over 1,000 g/t (29 oz/T) silver and no significant follow-up was carried out by previous operators. Several other areas of favorable geology and alteration were also investigated. This program was completed in the fall of 2010 and following its documentation and evaluation the Company will determine whether additional work is warranted at this time.
Mining Operations:
The Calvario Vein mining operation, accessed by the King Ramp, was placed on care and maintenance in December 2008. Subsequently, some back filling of the stoped areas has been undertaken to maintain the integrity of the openings should a decision be made to resume mining in the future. The ramp has been developed to a depth of approximately 175 m vertical.
Processing:
A small flotation mill was present on the property when Silver Eagle acquired the property. This mill was expanded and used to process oxide material as Silver Eagle developed the King Ramp and the sulphide portion of the Calvario Vein system. The mill was further expanded and modernized during 2008 and processed Calvario sulphide mineralization for three months until mid-December 2008.
Excellon began shipping Platosa ore to the mill in mid-March 2009. The mill operating schedule is set to match shipments from Platosa and the throughput required to maximize metallurgical results therefore does not always operate seven days a week. Between January 1 and September 30, 2010 a total of 52,309 tonnes grading 835 g/t (24 oz/T) Ag, 6.7% Pb, 8.3% Zn was processed. During the same period 4,102 tonnes of Ag-Pb concentrate grading 8667 g/t (19 oz/T) Ag, 51.28% Zn were produced. Recoveries averaged 76.5% for Ag reporting to the Pb concentrate, 9.8% for Ag reporting to the Zn concentrate for a total of 86.3% Ag recovery. Pb recovery has averaged 69.1% and Zn recovery 75.3%.
During 2010 the concentrate storage area has been expanded and a retractable cover installed for protection during the rainy season and from wind erosion. In addition the tailings management area was expanded.