Los Gatos

Los Gatos Project Minera Plata Real


A 2500 tonne/day underground mine and processing facility at the Cerro Los Gatos deposit will commission during the second half of 2019 and is expected to produce 5.2 million ounces of silver, 50 million pounds of zinc and 37 million pounds of lead annually at all-in sustaining costs of $5.21/silver ounce.


A silver and zinc-rich epithermal system with significant lead and gold content

Low Risk

Mining-friendly jurisdiction with low regulatory risk. Close to existing surfaced roads, access to grid power and ample water supply


14 zones of mineralization discovered to-date within a contiguous mineral rights position totaling 103,000 hectares



Los Gatos is one of the most exciting virgin discoveries of silver and zinc in North America; this rare new discovery, in the heart of Mexico’s silver belt, will become the Company’s first operating mine. Located within the highly prospective Los Gatos district, Cerro Los Gatos is one of 14 zones with ore grade intercepts and other regional exploration targets. The Cerro Los Gatos, Esther and Amapola zones all have 43-101 compliant resources and the remaining zones have at least one economic ore grade intercept.

All Los Gatos mineral concessions are held by the Company’s 70%-owned subsidiary, Minera Plata Real (MPR), including the Cerro Los Gatos, Esther and Amapola mineral concessions. MPR conducts exploration studies directed to the discovery of new mineral deposits in Mexico. MPR has projects in the state of Chihuahua and conducts geological, geochemical and geophysical studies leading to data interpretation and drilling with the objective of discovering additional zones of mineralization within the Los Gatos silver and zinc dominant epithermal district.

Cerro Los Gatos

The journey to becoming a mine began in 2008 when the Company negotiated surface access rights with local ranch owners and obtained environmental permits for exploration drilling. The subsequent drilling resulted in the Cerro Los Gatos deposit discovery in 2009. Environmental baseline data collection began in May 2010 with environmental studies for the project coming shortly thereafter. In 2011 and 2012, 43-101 compliant resource statements were filed for the Cerro Los Gatos, Esther and Amapola zones. In 2014, Sunshine Silver Mining & Refining Corporation, signed a joint venture agreement with Dowa Metals & Mining Co. Ltd. (Dowa). Through a $50 million investment by Dowa in 2015 and 2016, an exploration decline was developed into the Cerro Los Gatos mineralization, a bulk ore sample was taken and processed in a pilot plant and all technical work to complete a 43-101 compliant feasibility study was conducted. Dowa earned a 30% share of the joint venture through this funding.

Los Gatos: A new high-grade epithermal district in Mexico’s Silver Belt

Highlights from the feasibility study include:

  • A proven and probable reserve containing 9.8 million tonnes grading 247 g/t silver, 4.8% zinc, 2.3% lead and 0.3 g/t gold,
  • An 11.5 year mine life at 2,500 tonnes per day processing rate,
  • Average annual production of 5.2 million ounces of silver, 50 million pounds of zinc, 37 million pounds of lead and respectable gold production,
  • $63 million annual free cash flow, and
  • Production costs of $12.13 and $5.21 per ounce silver on a co-product and bi-product basis, respectively.

The Cerro Los Gatos project is an underground mine with a surface processing facility that is located about 10 kilometers west of the community of San Jose del Sitio in Chihuahua State, Mexico. The community actively supports the project and Cerro Los Gatos is the dominant employer in the region.

In 2017, the $316 million expected preproduction development cost was financed through a $210 million term loan from Dowa and $106 million of equity contribution commitments from the joint venture partners. Environmental permits and surface construction permits were subsequently approved, and full project development began in October 2017. The national electricity provider has committed the 24 mega-watt power requirement for the project and a 60-kilometer power line is under construction with an expected conversion to grid power in March 2019.

Surface construction is expected to be completed during the third quarter of 2019 and the project should be fully commissioned by the beginning of 2020.

Los Gatos Project Timeline

Cerro Los Gatos has significant remaining inferred resource that will be converted to reserves through future definition drilling and it is only one of fourteen known zones of mineralization. Future exploration is expected to provide multiple increases to the current reserves, extend the project’s life and allow expansions to the currently designed production rate.

Map of Los Gatos 14 Zones


Feasibility Study

The Cerro Los Gatos Project feasibility study, completed by Tetra Tech in January 2017, demonstrates that the Project is a profitable silver-zinc-lead project with a four year payback and 11.5 year mine life, at modeled metals’ prices.


Mine Life 11.5 Years
Mining Rate 2,500 tonnes per day
Average Annual Production 9.6 million AgEq Oz.
Average Annual Free Cash Flow $63 million
All-In Sustaining Cost (co-product) $12.13/Ag oz.
All-In Sustaining Cost (by-product) $5.21/Ag oz.
Pre-tax IRR 20.4%
Post-tax IRR 15.9%
Payback Period (post-tax) 48 months
Project Capital:  
Initial Capital: $316 million
Sustaining Capital: $212 million

Feasibility Study based on Ag Price = $20.16/oz., Zn Price = $1.01/lb., Pb Price = $0.92/lb., Au Price = $1318/oz.

Mine Plan

Total diluted and recovered ore tonnes 9,808,433
Diluted NSR $ value/t 167.11
Diluted Ag grade 247.39 g/t


Proven & Probable Reserve (including dilution)

Tonnes 9.8 million
Silver grade 247 g/t
Zinc grade 4.8%
Lead grade 2.3%
Gold grade 0.3 g/t

Feasibility Study NPV Sensitivity

Every $5.00 increase in the silver price adds ~$125 million to the NPV

Every $0.20 increase in the zinc price adds ~$42 million to the NPV



The Los Gatos Project is located in the transition zone between the Sierra Madre Occidental volcanic province of western Mexico and the Mesozoic Chihuahua basin to the east. It is also located in the general union of the Sierra Madre Occidental, Chihuahua, and Parral tectonostratigraphic terranes.

Greater Cerro Los Gatos Veins and Faults

The area is largely characterized by a thick sequence of tertiary volcanic rocks that are generally dissected by a strong north-northwest bearing fault system that divides the area into the plateau and barranca sections and are subdivided in two major units, the Lower Volcanic Group and Upper Volcanic Group, host to several well known gold-silver producing mining districts in Mexico, such as San Dimas-Tayoltita, El Sauzal, Dolores, Palmarejo, Pinos Altos, Parral, San Julian, and Ocampo, one of the largest epithermal precious metal metallogenic provinces. The dominant rocks of the Los Gatos Project are a sedimentary sequence that occur to the southwest of the Cerro Los Gatos discovery.


The Los Gatos Project hosts a series of quartz, quartz-calcite and calcite veins in over 20 separate vein systems that are exposed along a strike length of approximately 12 kilometers and an outcrop belt width of approximately five kilometers. Vein width is generally in the order of one meter, but local wide zones up to eight meters in outcrop and true vein widths in excess of 30 meters have been identified by diamond drilling. Structurally, the veins form two sets, with north and northwest strikes and mostly steep dips. Mineralization at the Los Gatos Project is characterized by silver, lead, zinc and copper sulphides and their oxides, along with fluorite, manganese, barite and traces of gold associated with quartz and calcite veins. The veins vary in orientation from west-northwest to northwest to north-northwest to north-northeast. Study of the veins in hand specimen and thin section suggests that they are epithermal in origin and are likely of intermediate sulfidation composition, showing vein textures and gangue mineralogy that indicate a relatively high-level hydrothermal system in the boiling environment. Breccia with clasts of vein quartz indicates a protracted hydrothermal system during multiple faulting events, a positive sign for economic epithermal veins. It has been interpreted that ore shoots may extend relatively far down dip, possibly to at least 450 meters.



Primary Crusher

Secondary Crusher

2-Stage Grinding

Conventional Flotation
Lead Concentrate
Zinc Concentrate


Lead Concentrate
Test Grind Grades Recoveries
p80, μm Pb % Zn % Au gpt Ag gpt Pb % Zn % Au % Ag %
LCT1 45 60.7 8.98 5.9 5884 89.7 6.0 60.6 73.3
LCT11 75 56.3 11.2 5.8 5271 91.5 9.1 60.2 74.8
Zinc Concentrate
Test Grind Grades Recoveries
p80, μm Pb % Zn % Au gpt Ag gpt Pb % Zn % Au % Ag %
LCT1 45 1.19 56.9 0.52 531 3.1 66.5 9.3 11.6
LCT11 75 0.95 51.8 0.78 552 2.3 62.1 12.1 11.6
  • Overall recoveries: Silver 84.9%, Lead 92.8%, Zinc 72.5%, Gold 69.9%
  • The samples have Axb values of 45-77 and SCSE values of 7.66-9.56 kWh/t, categorizing the samples as softer per JKTech database of SMC tests, which reduces grinding costs
  • The samples have BWI intermediate hardness values of 15.3-18.9 kWh/t
  • 50 tonne bulk sample tested through a pilot plant at SGS Lakefield to confirm recoveries
  • 40-50% of the tailings to be returned underground as paste backfill and remaining tailings deposited into a lined and zero discharge tailings storage facility


Resource Estimates

Cerro Los Gatos Zone Resource Estimate
Resource Classification Tonnes (mm) Silver Equiv. (g/t) Silver (g/t) Zn % Pb % Gold (g/t) Ag Eq oz (mm) Ag oz (mm) Zn lbs (mm) Pb lbs (mm) Au oz (k)
Measured 3.4 618 318 5.4 2.6 0.37 68 35 407 195 41
Indicated 5.8 596 273 5.8 2.8 0.35 111 51 741 361 64
Measured & Indicated 9.2 602 289 5.7 2.8 0.36 178 85 1148 556 105
Inferred 3.6 405 124 4.6 3.0 0.27 47 14 360 238 31



Los Gatos District Exploration Targets

Current NI 43-101 Esther Zone Resource Estimate
Resource Classification Tonnes (MM) Silver Equiv. (g/t) Silver (g/t) Zn % Pb % Gold (g/t) Ag Eq oz (mm) Ag Oz (mm) Zn lb (mm) Pb lb (mm) Au oz (k)
Indicated 0.62 225 113 1.70 0.60 0.04 4.5 2.3 23.2 8.2 0.8
Inferred 2.94 274 87 2.50 1.30 0.10 25.9 8.2 162 84.3 9.5
Current NI 43-101 Amapola Zone Resource Estimate
Resource Classification Tonnes (MM) Silver Equiv. (g/t) Silver (g/t) Zn % Pb % Gold (g/t) Ag Eq oz (mm) Ag oz (mm) Zn lb (mm) Pb lb (mm) Au oz (k)
Indicated 0.46 269 133 2.10 0.70 0.04 4.0 2.0 21.3 7.1 0.6
Inferred 2.29 324 98 3.00 1.60 0.12 23.8 7.2 151.5 80.8 8.8

Source: NI43-101 Technical Report – Cerro Los Gatos Deposit Feasibility Study, Tetratech, January 2017

Regional Exploration Targets

Santa Valeria Zone (100% owned by Sunshine Silver)

Santa Valeria, located east of the Los Gatos Project area, forms the opposing side of the basin in which Cerro Los Gatos lies. A map showing the locations is below:

The Cerro Los Gatos system (area 1 on the map above) is related to a fault structure on the edge of an intravolcanic basin. Our drilling indicates this basin was actively subsiding, and multiple pulses of mineralization may be directly related to the subsidence pattern.

The Santa Valeria project (areas 4, 5, 6, and 7 on the map above) represents a possible “mirror image” of the Cerro Los Gatos system on the eastern margin of the same intravolcanic basin. Much of the volcanic stratigraphy, alteration zones and outcropping epithermal style veins observed at Santa Valeria are similar to those observed at Cerro Los Gatos and therefore, Santa Valeria is capable of hosting an additional large scale resource.

Prior exploration in Santa Valeria occurred from two principal campaigns – by Anglo American/Southern Silver on the Santa Rita (area 6 above) skarn system, and by VVC Exploration, a Canadian Junior company, on the Culantrillo vein system. While the skarn system at Santa Rita shows strong values at the surface, area mapping suggests limited geographic continuity. However, the epithermal vein style mineralization shows good continuity and values in basin parallel structures. A seven-hole drilling campaign and a detailed sampling program of underground workings on the Culantrillo vein was completed by VVC in 2009 with promising results.

We anticipate conducting additional drilling on the Santa Valeria project to further define the vein continuity in this new and prospective area.


Joint Venture

The Los Gatos Project is operated under a joint venture, owned 70% by Sunshine Silver and 30% by Dowa Metals & Mining. Sunshine Silver is the project operator and manages all activities.

Dowa Metals & Mining

Founded in 1884, Dowa has been developing mineral resources in order to secure stable, long-term sources of raw materials for its Akita Zinc/Kosaka Smelting & Refining complex and its Onahama Smelting & Refining complex, both in Japan Dowa’s Akita Zinc is the largest zinc refinery in Japan, producing about 200,000 tons of electrolytic zinc per year, as well as electrolytic cadmium, concentrated sulfuric acid, gold, silver, copper and a number of minor metals.

  • In December 2014, Dowa agreed to purchase 30% of the Los Gatos Project by investing US$50 million over two years
  • Dowa will have life of mine rights to purchase the Los Gatos zinc concentrate at market rates. Lead concentrate will be sold to an independent smelter.
  • All earn-in proceeds were used to fund the exploration, feasibility and early development work at Los Gatos. The feasibility study was completed in January 2017.
Decline Construction ($20.2M)
  • Ramp construction to access the mineralization
  • Enables trial mining and bulk sample collection
  • Provides exploration drilling platforms for further resource delineation
Drilling ($6.8M)
  • Infill drilling within the current resources to confirm continuity
  • Extension drilling to expand the mineral resources
Technical Studies ($7.7M)
  • Geotechnical
  • Hydrogeological
  • Metallurgical
  • Environmental Studies
  • Final Mine Design
Infrastructure Prep ($15.3M)
  • Power line permitting
  • Remaining strategic land purchases
  • Final infrastructure design


Technical Reports


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