LA COLORADA
Snapshot
Location: Sonora, Mexico
Status: Operating
Mine: Open pit heap leach
Ownership: 100%
2025 Guidance
Production: 17,500 - 23,300 gold equivalent ounces
AISC: $1,850-$1,950 per gold equivalent ounce
Metals: Gold, Silver
Royalty: 0%
Overview
The La Colorada Mine is located 45 km southeast of the city of Hermosillo, in the State of Sonora, Mexico. is the open pit heap leach mine is situated on a 10,085 ha land package.
The current life of mine plan at La Colorada is to continue production from three sequentially staged deposits: the Junkyard Stockpile, El Crestón pit expansion, and the Veta Madre pit expansion. Within that plan, the company can produce 377,000 ounces of gold over a 6.5 year mine-life.
History
Jesuit missionaries laid claim to the original concessions in 1740 with active small-scale mining until the Mexican Revolution in 1916. From 1876 to 1914 the concessions produced three million ounces of gold.
Modern exploration began in 1991. Eldorado Gold Corporation acquired the project in 1993, quickly developing a bulk tonnage heap leach operation from the historic tailings and three open pits. From 1994 to 2000, Eldorado produced about 290,000 ounces of gold and one million ounces of silver before selling the operation in late 2000 to a private company which continued production through to April 2002.
In 2007, Pediment Gold Corp. purchased the concessions and performed a successful regional mapping program. Pediment drilled the project and made the Veta Madre discovery in 2008.
Argonaut Gold Inc. acquired Pediment Gold in 2010 focusing initially on infill and step-out drilling followed by development of additional open pit resources. In 2012, Argonaut restarted operations and produced about 490,000 ounces of gold and 1.7 million ounces of silver from 2012 to Q1 2024.
Location and Infrastructure
Access from Hermosillo to the mine is via paved Highway 16. Hermosillo is a city of ~1 million people with an international airport and all major mining services. The mine is connected to the national power grid by a 33 kV line with water supplied from nearby wells and pit dewatering.
The mine itself consists of three open pits (Creston, Veta Madre and Gran Central), the heap leach pad and waste dump. Ore is processed through a three stage crushing plant with a nameplate capacity of 12ktpd with gold extracted from the leach solution through an ADR plant and with a blast furnace producing the final dore bar product.
Resources & Reserves
Mineral Reserve Estimate
Mineral Reserve Estimate
Geology
Regionally, La Colorada is located at the boundary between the Basin and Range and Sierra Madre Occidental geologic provinces. The project area is covered in quartzites, marbles, carboniferous limestones, and sandstones intruded by granite, granodiorite, diorite, and andesitic porphyry. Rhyolite tuffs, andesites and a post mineiral basalt flows sit on top of this package. Gold and silver mineralization is present in a low sulphidation epithermal veins, with an east-west Colorada Sur Fault structure controlling mineralization. Sulphides identified include galena, sphalerite, and pyrite. Gold occurs in quartz as electrum containing 70–75% gold and 25–30% silver. Silver-rich mineralization is associated with polymetallic veinlets of galena, sphalerite, and argentite.
The El Crestón veins form the largest vein system on the La Colorada property. Mineralization has been defined along 1,000 m of strike, 250 m wide, and 250 m in vertical extent and remains open both along strike and at depth. Mineralization is found primarily in three wide quartz vein and breccia systems - the North, Intermediate and South Veins. These are hosted in the sediments, diorites and rhyolites, and dip 45-80 degrees to the north.
The Veta Madre vein system is 1.5 km east of the El Crestón open pit. It is approximately 500 m along strike, 200 m wide, and 200m deep. Gold-bearing veins here are hosted in the complex of intrusive rocks. Previous drill programs found that a down-faulted, and generally higher-grade, portion of the vein system continues a significant distance to the west. Mineralization remains open to the west down-plunge at depth and to the east near the surface.
Production Plan
Junkyard Stockpile
The Junkyard Stockpile is a historic waste rock storage facility that is named for the old mining equipment that was stored there by previous owners. The stockpile is located 800 metres southwest of the La Colorada crushing circuit and contains material that was mined from the Gran Central Pit in the mid to late 1990’s.
Heliostar drilled and evaluated the Junkyard Stockpile in 2024 with 57 holes totalling 2,290 metres. Re-processing of the Junkyard stockpile ore commenced in January 2025 and will continue through to the end of the year.
Veta Madre Cutback
The Veta Madre cutback is an expansion to the existing Veta Madre Pit. The Company has applied for a change of soils use permit which would allow exploitation of the 47koz in currently defined open pit reserves.
Creston Pit Expansion
Heliostar identified potential to extend the mine life of the Creston pit utilizing opportunities left by the previous operator. This consists of an additional two phases of pushbacks to access reserves of 312 koz over four years of mining. The initial capital cost for the Crestón pit expansion is estimated at US$54.0M, including a leach pad expansion and pre-stripping costs. The Creston cutback is a permitted expansion of the Creston Pit with the associated leach pad expansion also approved.
Growth
El Dorado Stockpile
This is another stockpile present on site, with material mined from the XX pit in the early 1990s. It contains 5.2 million tonnes with drilling is currently ongoing to define the grade.
Junkyard Tailings
In addition to defining run of mine stockpile material, drilling also encountered historic tailings present beneath. This material represents a potential opportunity to extend the mine life and is currently classified at Inferred resources.
Creston Pit
The focus of Heliostar’s 2024-25 drill program at the Creston pit was twofold – test shallow, undrilled area defined assumed to be waste for gold and extend high grade mineralization at depth. The program was successful on both fronts and the updated technical report will use these new data points to expand reserves and support an optimized mine plan. Adding economic material in areas previously modeled as waste has the double benefit of reducing initial capital requirements for the restart and adding ounces - both improving the economics in the upcoming Feasibility Study. This study will be the basis of a decision for the expansion of production at La Colorada in mid-2025.
Current resources at La Colorada remain open at depth at all the three pits, with historic small scale mine workings that can be seen in the bench faces at Creston and Gran Central pits. Holes from the recent exploration drilling campaign at Creston pit targeting extensions at depth returned hits of an underground tennor. These include:
- 8.85m grading 25.0 g/t gold and 768 g/t silver
- 8.55m grading 5.52 g/t gold and 121 g/t silver
- 5.0m grading 18.0 g/t gold
- 5.0m grading 9.69 g/t gold
- 4.3m grading 9.87 g/t gold
Technical Disclosure
All technical information on the La Colorada Mine is based on a technical report entitled “La Colorada Gold/Silver Mine NI 43-101 Technical Report” with an effective date of October 1, 2021, filed on SEDAR by Argonaut on February 14, 2022 (the “La Colorada Technical Report”). To the best of Heliostar’s knowledge, information, and belief, the La Colorada Technical Report is considered current pursuant to NI 43-101 and there is no new material scientific or technical information that would make the disclosure of the mineral resources, mineral reserves or results of the La Colorada Technical Report inaccurate or misleading.
While the Company considers the La Colorada Technical Report to be current, it plans to prepare an updated technical report based on its revised approach to developing the La Colorada Mine and will file such technical report on or before January 13, 2025.
