Location: Sonora, Mexico
Ownership: 100%
Metals: Gold, Silver
Royalty: 0%
Mine: Open pit
The La Colorada mine benefits from excellent infrastructure, as it is within an hour drive on paved highway from Hermosillo, the capital of the State of Sonora. The mine attracts a talented, skilled workforce and is located close to suppliers.
From 1876 to 1914, La Colorada was a high-grade underground mine. It closed at the start of the Mexican Revolution in 1914. During that period, it produced three million ounces of gold.
From 1993 to 2000, Eldorado Gold Corp. developed a bulk tonnage heap leach operation from several open pits. In 2000, Eldorado sold the production to a private Mexican owner who operated it until April 2002.
(as at October 1, 2021)
Mineral Resources were estimated for three separate mineralized zones at the La Colorada Project. Separate block models were constructed for each deposit.
Mineral Resources were tabulated inside of conceptual pits that were generated using the parameters listed below. The AuEq grades were calculated using ratios of metal prices and metal recoveries in the following equation:
AuEq = (Au + Ag/Equivalency Factor) where
Equivalency Factor = ((Au price in US$/g * Au recovery) / (Ag price in US$/g * Ag recovery))
Notes to accompany the mineral resource table:
(as at December 31, 2022)
Mineral reserves stated in Table 1-5 have an effective date of October 1, 2021. The assumed MXN:USD exchange rate is MXN19:1. The AuEq grades were calculated using ratios of metal prices and metal recoveries in the following equation:
AuEq = (Au + Ag/Equivalency Factor) where
Equivalency Factor = ((Au price in US$/g * Au recovery) / (Ag price in US$/g * Ag recovery))
Notes to accompany mineral reserves table
The Veta Madre deposit has been mined since August 2020. The Company has all mineral rights and surface rights to mine the mineral reserves in Phases 1, 2, and 3. To mine Phase 4, the Company must acquire access to a small parcel of private land and acquire the Pima 3 concession or a right-of-way to strip waste on the Pima 3 concession. The Company has a plan and timeline in place to obtain both the surface access and the legal right-of-way to the Pima 3 area and has reasonable expectations both will be acquired within the required timeframe. The mineral reserves potentially affected in Phase 4 are estimated at 3.9 Mt at an average grade of 0.69 g/t Au and 3.8 g/t Ag.
Other factors that may affect the mineral reserves include:
The geology of La Colorada consists of Paleozoic to Early Mesozoic metasediments cut by Upper Cretaceous volcanics. All of these units are intruded by Tertiary granitic to dioritic phases and andesitic porphyry.
Late-Cretaceous to Tertiary volcanic rocks and associated continental clastic rocks unconformably overlie the Triassic and older rocks. There are two distinct divisions of the volcanics: A Lower Volcanic Complex dated at 100 to 45 million years and an Upper Volcanic Complex dated at 34 to 27 million years.
The Lower Volcanic Complex is composed mainly of andesite with interstratified rhyolitic ignimbrites and minor interstratified basalt. The overlying Upper Volcanic Complex is composed of extensive rhyolite and rhyodacite ignimbrites with minor interstratified basalt. It constitutes the largest ignimbrite field in the world.
The Upper Volcanic Complex unconformably overlies on the Lower Volcanic Complex and infills deeply incised paleotopography in the older rocks. Late Cretaceous to Early Tertiary plutonic rocks (diorite, granodiorite to granite) of the Sonoran Batholith outcrop throughout the region and have been dated from 90 to 40 million years.
The La Colorada Gold District has characteristics of a low sulphidation epithermal-vein type gold-silver deposit. The district underwent a complex hydrothermal history related to Cretaceous plutonic activity, later higher-level plutonic events, and finally a mid-Tertiary vein system. The latter event shares characteristics in common with both a deep epithermal environment and a high-level mesothermal system. Silicification, hematization and argillic alteration can be seen in the older metamorphic and intrusive units.
The Tertiary volcanic rocks are unaltered and post-mineral.
The Company is investigating the potential to develop a low-grade of stockpile. Ongoing work includes drilling and metallurgical testing.
The Creston cutback is a permitted expansion of the Creston Pit. A 12,500-metre drill program is being completed to update the mineral resources ahead of a planned construction decision at the end of Q2, 2025.
The Veta Madre cutback is an expansion to the Veta Madre Pit. The Company has made an application for a change of land use permit which would allow exploitation.
Current resources at La Colorada remain open to depth at the three pits. The Company plans to assess the potential for economic underground resources.
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.
