Guanaco is located approximately 220km SE of Antofagasta in Northern Chile at an elevation of 2,700m, 45km east of the Pan American Highway and 70km south of El Peñón (Yamana´s successful operation). The trip from Antofagasta takes about three hours. The climate is typical Atacama Desert, with little or no rainfall, and a resulting absence of practically any form of vegetation. The altitude ranges between 2,400 and 2,900 metres, averaging 2,600 metres above sea level.
Gold mineralisation at Guanaco is controlled by pervasively silicified, E/NE trending sub-vertical zones with related hydrothermal breccias. Silicification grades outward into advanced argillic alteration and further into zones with propylitic alteration. Dozens of mineralised veins have been exploited in the district, the most important veins being the Defensa, Perseverancia, Abundancia, and San Lorenzo.
Guanaco recommenced mining operations in August 2010 and poured its first doré bars in October 2010.