Located in the northeastern part of the State of Zacatecas in north-central Mexico, 14 kilometers east of the town of Mazapil, Peñasquito is convenient to road transportation and power. This is a historic mining region, and skilled labour and smelters are readily available.
The property lies within the eastern Mexican fold-belt comprised of folded Mesozoic clastic and carbonate sedimentary units. The world-class Au-Ag-Zn-Pb deposit is centered on two funnel-shaped diatreme breccia pipes, cutting Cretaceous clastic units above a Tertiary felsic intrusive complex. It has a spread within the veinlets and minor fractures where minerals such as electrum, sphalerite, galena and various silver sulfosalts are located.
The orebody is shaped in gaps with clasts in the great diatreme, and calcareous siltstones and sandstones around the mineralized halo are observed. Both gaps ocurr within a covering of hydrothermal alteration, which consists of a core set of sericite, pyrite-quartz-calcite and peripheral halo of pyrite and carbonate alteration. The sheets are located in the underlying limestone valued Gold, Silver, Zinc and Lead in depth.
Disseminated and lesser fracture-controlled electrum, sphalerite, galena, and various silver sulfosalts are hosted by milled-clast breccias within the diatremes, and by calcareous siltstone and sandstone in the surrounding mineralized halo. Both breccia pipes sit within a hydrothermal alteration shell, consisting of a central sericite-pyrite-quartz-calcite alteration assemblage and a peripheral pyrite-carbonate alteration halo. Au-Ag-Zn-Pb sulfide replacements (mantos) occur in the underlying limestone units, beneath the planned open pits and above the source of cross-cutting porphyry dikes.