The San Agustin Mine (formerly the El Castillo Complex) is a gold-silver open pit and heap leach mining operation in the State of Durango. The property comprises nine titled concessions covering 5,884 hectares (“ha”).
The facilities include an open pit, two crushing plants with a combined total 30,000 tonnes per day (“tpd”) capacity, conveyors, multi-lift leach pads, a carbon-in-column and a small Merrill Crowe plant. The San Agustin Mine maintains water rights of 1,000,000 m3/year from one underground aquifer.
Operations at the San Agustin Mine began in 2017. Up to March 2024, the mine has produced 383,598 ounces of gold and 1,911,648 ounces of silver (2017-2024). The San Agustin Mine is currently in operation with 7,568 ounces of gold and 39,319 ounces of silver produced in 1Q 2024.
All technical information on the San Agustin Mine is based on a technical report entitled “San Agustin Gold/Silver Mine NI 43-101 Technical Report” with an effective date of May 15, 2024, filed on SEDAR by Argonaut on May 29, 2024 (the “San Agustin Technical Report”). To the best of Heliostar’s knowledge, information, and belief, the San Agustin Technical Report is considered current pursuant to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“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 San Agustin Technical Report inaccurate or misleading.
While the Company considers the San Agustin Technical Report to be current, it plans to prepare an updated technical report based on its revised approach to developing the San Agustin Mine and will file such technical report within 180 days of this news release.
The San Agustin Mine has four remaining mining phases with probable mineral reserves of 197,000 ounces of gold and 6,709,000 ounces of silver contained.
Heliostar recognises a range of opportunities for resource growth and exploration at the San Agustin Mine, including:
Oxide Reserves - The Company will review and optimize the mine plan considering the current metals price environment
The Corner Permit - The San Agustin Mine contains probable reserves of 8.1 Mt at 0.33 g/t gold and 17.5 g/t silver (86,000 oz gold and 4.54 Moz silver) in a cutback that requires an expansion permit. The Company intends to pursue this opportunity to add mine life to the San Agustin Mine
Sulphide Potential – The San Agustin Mine has significant exploration potential in sulphides below the current pit shell which have not been a focus for reserve growth
Exploration Potential - In 2021, Argonaut acquired a large land package from Fresnillo for US$6 million that increased the land package by 538% to 5,884 Ha. The new ground has seen little exploration since the acquisition. One target at San Agustin, the Consejo Zone, includes an intercept of 1.3 m grading 3,234 g/t silver, 2.85 g/t gold, 15.0% lead and 8.70% zinc (Consejo de Recursos Minerales, 1985). This will be a priority area of exploration for the Company going forward
Note: A qualified person has not been able to independently verify the assay results in the drill intersections presented above and Heliostar plans on conducting additional work at the San Agustin Mine to establish the grades and widths of targets on the property.
The San Agustin Mine operates as part of the same mining complex with the nearby El Castillo gold mine. Mining activities at the El Castillo mine were suspended by Argonaut in December 2023 and reclamation activities have commenced. Re-leaching at El Castillo is expected to finish in the third quarter of 2024. Heliostar anticipates funds generated from operations at the San Agustin Mine will fund the future closure of the El Castillo mine.
