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The El Cubo and El Pinguico properties are within the major epithermal mineral vein system common to the Guanajuato area and share many of the same geological, mineralogical, metallurgical characteristics, and mining methods. El Cubo is approximately 8 kilometers (km) from El Pinguico. It is anticipated that both properties will utilize El Cubo’s existing mill infrastructure and administration facilities, processing blended mineralized material from El Cubo and the El Pinguico projects.

The El Pinguico property is located approximately 7 km southeast of the City of Guanajuato and 8 km southwest by road of the El Cubo property. The El Cubo and El Pinguico properties are approximately 8 km apart by road. Due to the vicinity of Guanajuato, the area offers excellent infrastructure with paved district roads, local grid power to both projects, as well as a local skilled labor force.


The mining history of Guanajuato dates back to when the Spanish began exploration for minerals in the region and discovered silver in 1548. Guanajuato soon became one of the premier mining districts of Nueva España (New Spain)

Mining on the El Cubo property has occurred since the 17th Century. In the 19th and 20th Centuries, mining at El Cubo focused on northwest striking veins known as the Villalpando, Dolores, La Loca, and La Fortuna.

In 2012, Endeavour Silver acquired the El Cubo property for US$200m in cash and shares and spent an additional US$40m in to expand the mine and mill capacity. Saleable silver and gold production through 2019 totaled 12,112,892 ounces of silver and 144,100 ounces of gold. Endeavour Silver ceased production at El Cubo in November 2019.

The Mineral Resource estimate used as the basis for this PEA was derived from the previous NI 43-101 Technical Report and computer models developed by Endeavour Silver in 2016 for the El Cubo property and the NI 43-101 Technical Report for the El Pinguico property by Guanajuato Silver in 2017. The Qualified Person (QP) has reviewed the information, estimation methods, and the estimates and is of the opinion that the estimates are reasonable and can be utilized, albeit with some adjustments, for this PEA.

The remaining Mineral Resources, in 2021 at El Cubo, are shown in Table 1.1 and total approximately 1.96 million tonnes.

Table 1.1......
Estimate of the Remaining El Cubo Mineral REsources as of 31 January 2021       

 Classification  Tonnes    Silver Gold   Silver Eq
 g/t Oz g/t  Oz 
 Measured None           
 Indicated 508,055  194 3,169,000  2.44  39,860  389 
Inferred 1,453,000 214 10,004,000 2.78 129,900 435

1. Silver Equivalent calculated using 1 ounce of gold is equal to 80 ounces of silver, on the basis of the average 5-year historic silver and gold prices.
2. Numbers have been rounded.


Table 1.6.......
Commodity Price Sensitivity – Base Case

Assuming a Constant Gold-to-Silver Price Ratio of 1:80

Change in Commodity Price
Silver Price
Gold Price
(US$ millions)
(US$ millions)
-25 14.62 1,169 N/A -38.8 -35.5
-15 16.56 1,325 -25 -9.4 -9.2
-10 17.54 1,375 22 5.4 3.9
0 19.49 1,527 105 32.9 28.5
10 21.44 1,680 243 64.3 56.5
15 22.41 1,756 344 79.0 69.6
25 24.36 1,909 750 108.5 95.9


The Guanajuato Mining District is a world-class, high-grade, silver-gold, epithermal vein system with low sufidation and adularia-sericite alteration and lies along the southern edge of the Mexican Central Plateau (Sierra Madre Occidental Geologic Province). It is historically a well-known, studied, and documented mining district. The Guanajuato veins are typical of most epithermal silver-gold vein deposits in Mexico with respect to volcanic activity, volcanic and sedimentary host rock affinities, silver-gold grades and ratios, vein mineralogy, and alteration styles.

Rock units within the district consist of flow and tuffs of principally basaltic to rhyolitic composition with related intrusive units and sedimentary and volcanoclastic units. The district is cut by many faults, many of which host silver and gold mineralization. The oldest fault set includes pre-mineral deformation during the Laramide orogeny (80-40 Ma) and resulted in west-northwest trending folds and thrust faults. The intermediate set includes an early post-Laramide extension (±30 Ma) set of faults that are both pre-mineralization and mineralization stage. This intermediate set consists of three major systems: the Veta Madre, La Luz, and the Sierra set of faults and fault zones.


The El Cubo and El Pinguico Mines are similar mineralogically and typical of the Guanajuato Mining District. Mineralization is open-ended due to a lack of exploration drilling and development. Vein mineralization is normally 1 to 2 m wide, with mineralized breccia zones of up to 10 m wide. Typical of this style of mineralization, economic concentrations of silver and gold occur in ore shoots distributed vertically and laterally between barren or weakly mineralized portions of the veins. Bonanza grades may occur at the site of vein intersections, such as the nearly perpendicular San Nicolas-Villalpando vein intersection.

El Cubo and El Pinguico mineralization is typical of the classic high-grade silver-gold, banded epithermal vein deposits with low sulfidation mineralization. Silver occurs in dark sulfide and sulfosalt-rich bands within the veins with little mineralization but significant alteration minerals in the surrounding wall rocks. Native silver occurs primarily in the near surface oxidized zones while at depth, the ores contain lead, zinc, and copper sulfides.


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Guanajuato Silver is engaged in the exploration of mineral projects in the Guanajuato region of central Mexico. The Company’s flagship El Pinguico project is a significant past producer of high grade gold and silver and is located just 7km south of the city of Guanajuato, Mexico.