In September 2012, Wildcat announced it has completed pilot plant-scale testing on a simplified metallurgical process for the recovery of silver and gold from the Hermosa Manto Oxide and Upper Silver Zone material.

The new process centres on the calcining of the Manto Oxide material (manganese hosted silver minerals) followed by traditional agitated cyanide leaching and recovery of silver and gold by standard Merrill-Crowe to produce a silver / gold doré. The calcining, which heats the ore in a reduced environment is performed in a direct fired kiln and is similar to the process used in the cement industry to turn limestone into cement, but at a lower temperature for the Manto Oxide material. The kiln effectively reduces the Manto Oxide material, rendering silver available for direct cyanide leaching. The revised process for the Manto Oxide material greatly reduces the complexity of the planned operation.

Silver recoveries have consistently been above 80%, with silver recoveries in some of the batch kiln tests exceeding 90% and those in the continuous direct fired rotary kiln tests having been up to 89 percent. In the PEA, average silver and gold recoveries are estimated at 82 percent and 90 percent, respectively, for the Manto Oxide Zone. Bench and pilot work continues with the objective to further refine kiln operating parameters to maximize silver recovery while minimizing reagent consumptions. Data has also been obtained for other operating processes including crushing and grinding, solid/liquid separation, and tailings classification.

Currently, minor amounts of copper are also recovered in the leaching process as a copper sulfide concentrate. The Company has completed preliminary test work for treating the leach tails to recover zinc by flotation and manganese by magnetic separation. Metallurgical test work continues in an effort to further recover copper, zinc and manganese. The recovery of these by-products would be incorporated into the process should they prove to be economically viable.

The Upper Silver Zone material, which lies above and adjacent to the Manto Oxide Zone, will be crushed and then combined with the calcined Manto Oxide material, allowing for a single, grinding, cyanide leach and Merrill Crowe circuit for all of the material processed. Wildcat has optimized the grind size of the Upper Silver Zone material and developed a grade/recovery curve for incorporating into future mine modeling activities. Testing has returned silver recoveries of up to 52 percent. In the PEA, average silver and gold recoveries are estimated at 40 percent and 90 percent, respectively, for the Upper Silver Zone.

The pilot plant test work was performed by Hazen Research, Inc. in Golden, Colorado, USA. The pilot plant began operating in June of 2012, processing approximately six tonnes of Manto Oxide and Upper Silver Zone material.

Metallurgical development work is planned using a larger direct-fired, pilot-sized kiln to provide parameters for a full scale commercial operation to support the pre-feasibility study planned to be complete by mid-2013. In addition, testwork is underway for the optimization of silver and by-product recoveries.