Mercedes
Mineral Resources and Mineral Reserves
The Mercedes property is estimated to contain the following Mineral Resources and Mineral Reserves as of September 30, 2024 (the “2024 Estimates”), as announced on January 29, 2025. The 2024 Estimates are supported by a Technical Report filed on SEDAR+ on March 14, 2025.
2024 Mineral Resource Estimate
| 2024 Mineral Resources (1), Mercedes Mine (effective September 30, 2024) | |||||
|---|---|---|---|---|---|
| Category | Tonnes | Au (gpt) | Ag (gpt) | Contained Au (troy ounces) | Contained Ag (troy ounces) |
| Measured | 792,569 | 6.62 | 58.10 | 168,575 | 1,480,539 |
| Indicated | 1,546,484 | 5.65 | 49.06 | 281,102 | 2,439,101 |
| Measured + Indicated | 2,339,053 | 5.98 | 52.12 | 449,677 | 3,919,640 |
| Inferred | 383,417 | 5.26 | 36.06 | 64,884 | 444,563 |
| Total | 2,722,470 | 5.88 | 49.86 | 514,561 | 4,364,203 |
- 2024 Mineral Resources are inclusive of the 2024 Mineral Reserves
The 2024 Mineral Resource estimate is comprised of ten deposit areas: Barrancas, Diluvio, Gap, Klondike, Lagunas, Lupita, Marianas, San Martin, Rey de Oro and Rey de Oro Hill (see Figure 1, below). Small amounts of peripheral mineralized extensions from four additional deposit areas representing historic mine workings (Aida, Brecha Hill, Casa Blanca and Corona de Oro), previously included in the 2021 Estimates, have been re-categorized as condemned materials and are excluded from the 2024 Mineral Resources summarized above. These areas are currently, and for the foreseeable future, being backfilled with low strength paste. The 2024 Mineral Resources, based on an appropriate cut-off gold grade for each deposit area included in the tabulation, consider different mining extraction scenarios and processing recoveries. The cut-off grades for the various deposits included in the 2024 Mineral Resource vary from 2.1 to 3.0 gpt gold.
The 2024 Mineral Resources were reviewed and validated by GRE based on their review of the Mercedes database, the new geological model, and the Mineral Resource block model including the classification of resources based on drill spacing and geological and grade continuity. GRE reported that the Mineral Resource Estimate block models conform to industry standard practices and show a good correlation with the extensive drill hole database.
2024 Mineral Reserve Calculation
| 2024 Mineral Reserves, Mercedes Mine (effective September 30, 2024) | |||||
|---|---|---|---|---|---|
| category | ORES Tonnes | Au (gpt) | Ag (gpt) | Contained Au (troy ounces) | Contained Ag (troy ounces) |
| Proven | 9,392 | 4.25 | 24.67 | 1,282 | 7,448 |
| Probable | 418,584 | 3.94 | 22.67 | 53,009 | 305,048 |
| Total | 427,976 | 3.95 | 22.71 | 54,291 | 312,496 |
The 2024 Mineral Reserve Calculation comprises five deposit areas: Marianas, Barrancas, Gap, Rey de Oro and Rey de Oro Hill.
Considering relevant mining methods, underground mine designs were created by the Company to determine economic zones for extraction. The mine designs were reviewed and verified by GRE and modified to remove certain areas based on various mining considerations including dilution, likelihood of extraction, recovery factors and stope economics, and taking into account updated operational costs and cut-off grades. Areas with a reasonable expectation for economic extraction were comprised to form the 2024 Mineral Reserves tabulated above.
Planned and unplanned dilution factors were estimated for each Mercedes deposit. Planned dilution includes material required to be excavated for minimum mining widths (3.5 meters) or to address geo-mechanical or geometrical constraints. Capital development costs and operating development costs were estimated to be $4,320 per meter and $2,853 per meter, respectively. Cut-off grades were estimated for each deposit area based on break-even feed grades taking into consideration the mining method and costs specific to each deposit, and processing costs, general and administrative costs, gold price, gold recovery and refinery costs. GRE used the estimated cut-off grade for each deposit to calculate respective Net Smelter Revenue (“NSR”) cut-offs. which were then used to calculate the 2024 Mineral Reserves presented above.
Credits related to revenue from silver extraction were not included as historically the low silver mill recovery at Mercedes does not represent significant value.