This post is taken from the Technical Report created in 2006. It would be interesting to know what has changed (if anything) over the years with regards to grades and recoveries. So if anyone will be attending the AGM on Thursday, perhaps you could try to find out.

MINERAL PROCESSING AND METALLURGICAL TESTING
Los Laureles
Tailings from Los Laureles have been subjected to metallurgical test work at three
different times; in 1990 by METCOM, in 1999 by Minera El Pilon and in 2001 again at
METCOM. The initial METCOM work involved bottle roll tests to determine the suitability of
cyanidation in the recovery of gold and silver (Iasillo, 1990). Head grades were 2.40 g/t Au, 279 g/t Ag and 2.85% Mn. Test charges included 500 gram of a) “ as received” -10 mesh material, b) material that had been re-milled to 50% -200 mesh and c) re-milled material for which an attempt was made to remove the manganese by lixiviation. Recoveries obtained for the “as received” material were 70.72% for Au & 49.85% for Ag. With milling the recovery for silver increased to 64.06% while that for gold was relatively the same at 68.81%. In addition, the amount of reagents (CN and CaO) were significantly reduced - 0.60 to 0.34 kg/t for CN and 37.40 to 14.21 kg/t for CaO. By removing manganese, recoveries for silver could be increased to 75.96% but only with a very significant increase in reagent consumption.
Details for the test work by Minera El Pilon are incomplete.
In 2001, additional test work was undertaken at METCOM on a blended sample - from
individual samples collected from the surface of the dam, the pits and the adits - that assayed 2.00 g/t Au and 220 g/t Ag. Bottle roll tests were run on “as received” tailings and those that had been subjected to a 15 minute re-grind to produce a product with 80% passing 115 mesh. For the “as received” material recoveries of 58.57% for Au and 32.62% for Ag were obtained after one hour of treatment, which increased to 65.76% for Au and 39.89 for Ag after five days of treatment. Recovery figures for the re-grind material were 67.56% Au and 39.47% Ag after one hour and 73.78% Au and 49.24% Ag after five days. Additionally, a metallic screen analysis indicated that there is no free gold or silver present in the tailings, and a fire assay versus a wet screen analysis indicates that there is water soluble gold in the tailings.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES
Los Laureles
There have been three “mineral reserve” estimations made for the Los Laureles tailings, the
first in 1980 by Consejo (Fonseca Fuentas, 1980 - TI 180034) , a government agency in no way related to the Author, the vendor nor UCR and the other two for Romero, one of the owners of Silver Creek, in 1990 and 2004. For the Consejo estimation, the volume of the dam was calculated from 10, east - west sections for which their areas were determined with a planimeter. Neither the spacings for the sections nor any assumption used in the calculations (ie. valley shape) are stated. Furthermore, it is not clear if the tailings dam was accurately surveyed. A volume of 119,593 m was calculated which was multiplied by a specific gravity (SG) of 1.5 3 (rational not stated) to produce an estimate of 179,393.74 tonnes. The grade for the dam is given
as 0.40 g/t Au and 125 g/t Ag, the average for 116 samples collected at a depth of 30 cm,
presumably from the apron of the dam. As stated in the section titled “MINERALIZATION”
there is some doubt as to the validity of applying this average grade to the dam. Also, as
determined by Baratos (1995), there is some doubt as to the accuracy of the Consejo assay
values. The Consejo “mineral reserve” estimate is deficient in that a) the rational for the
specific gravity factor of 1.5 is not supported, b) the method of survey of the dam is not stated, c) the samples were not taken through the dam, d) the geometry of the dam / valley slope has not been verified and e) there is some doubt as to the accuracy of the assay data. In the Authors opinion based mainly on factors b, c & e, the estimate does not meet the requirements for an “Inferred Mineral Resource” as specified in the CIM Standards on Mineral Resources and Reserves - Definitions and Guidelines adopted by the CIM Council on August 20, 2000 (Postle et al., 2000). It is considered herein as an Historical Resource.
The first estimation for Romero was made by G. Guzman, an independent survey engineer
unrelated to the Author, the vendor and UCR. His methodology to obtain a dam volume of
154,724.72 m is not stated, but he apparently used N-S cross sections spaced 10 m apart. A SG 3 factor of 1.7 (rational not stated) was applied to obtain a 262,510 tonnes. No grade for the dam was given, but is assumed to be the average for the samples taken by Romero of 1.37 g/t Au and 171.7 g/t Ag. In the Authors opinion, the estimate does not meet the requirements for an “Inferred Mineral Resource” as specified in the CIM Standards on Mineral Resources and Reserves - Definitions and Guidelines adopted by the CIM Council on August 20, 2000 (Postle et al., 2000). It is considered herein as an Historical Resource.
R. Silva, a geological engineer (Universidad Autonoma de Mexico) and currently
exploration manager for IMMSA (Industrial Minera Mexico S.A. de C.V.) in Chihuahua,
Mexico, produced the second estimation for Romero (R. Romero, pers. comm). Silva, who is in
no way related to the Author, the vendor nor UCR, digitized the Guzman survey of the tailings dam (Figure 6), and constructed N-S cross sections at 10 m intervals commencing 5 m from the toe of the dam (Figure 14). The area for each section was determined using Autocad software, and was assumed to represent a volume half the distance to the next section. For the most westerly section, section 107, its influence was assumed to be only to the east. That is, any tailings west of section 107 were not included in the estimation. Furthermore, it was assumed that the slope down which the tailings were dumped was planar and not concave, convex or hummocky, and that all trees had been removed from the slope and that the surface of the apron was more or less smooth and level. Silva’s reserve totalled 132,795 m to which a SG of 1.7 was 3 applied to produce 225,750 tonnes. The SG of 1.7 was chosen since the normal factor for quarried road material is 1.8 and 1.7 was used as a conservative figure. The grade attributed to this volume is 2.0 g/t Au and 220 g/t Ag, which is equal to the average for 6 approximate 50 kg samples taken by Romero (from the surface of, the pits in and the adits in the tailings dam) and submitted to Metcon for metallurgical testing. In the Authors opinion, the estimate meets the requirements for an “Inferred Mineral Resource” as specified in the CIM Standards on Mineral Resources and Reserves - Definitions and Guidelines adopted by the CIM Council on August 20, 2000 (Postle et al., 2000).
There are no known environmental, permitting, legal, title, taxation, socio-economic,
marketing, political or other factors that might effect the mineral resource estimate. None came to light in 2001 when Romero had attempted to re-work the tailings, and no problems are foreseen now. The tailings are exposed to the environment, and reworking them, if done in a responsible manner, should pose no threat to the environment. According to Mexican law, the tailings belong to the surface rights holder so that there should be no permitting, legal, title or taxation difficulties. The La Yesca area has a long mining history, and from discussions with the local residents any new venture(s) would be welcome. Silver and gold products, whether they be as bullion, dore, concentrates, etc., are readily marketable within Mexico or abroad. Mexico boasts a stable, democratic government that supports mining, and is, therefore, unlikely to suddenly or drastically alter policy.
Several factors could influence the resource estimate. First, the resource was estimated
assuming that the slope down which the tailings were deposited was a smooth plane. Should the slope be convex or hummocky or not have had the trees removed prior to dumping, then the volume of the tailings could be somewhat less than estimated. Conversely, should the slope be concave, not hummocky or have depression, or had the trees removed prior to dumping, then the resource could be greater than estimated. In addition, no material was considered west of section 107. Should any be present in that area, the estimate would be increased. Second, an assumed specific gravity of 1.7 was used for the resource estimate, and tests are required to determine a more accurate value. Each variation by 0.1 will increase or decrease the estimate by 22,575 tonnes. Third, the grade of the deposit as quoted is the average of 6 samples from different depths and locales in the tailings dam. Whether or not these samples are representative of the grade of the dam remains to be checked. Fourth, there will be inevitable loses during mining.These are not expected to be large as the deposit is well exposed, and no internal dilution is likely. Hauling material up slope to the mill could be problematic, but not insurmountable. Fifth, the potential recoveries as stated in the section titled “MINERAL PROCESSING AND METALLURGICAL TESTING” should be considered as minimums as additional testing can only lead to improved numbers. Sixth, infrastructure should not be a problem. There is more than adequate room to install a mill, there is a year round source of water at hand, and electrical requirements can be supplied easily by a generator.

http://www.ucresources.net/_resources/layesca_43-101.pdf

SRV