Zafranal Pea Final 2013-01-16

7/27/2019 Zafranal Pea Final 2013-01-16

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Report to:

Technical Report and PreliminaryAssessment of the Zafranal Project,Per

Document No. 1295840100-REP-R0001-05


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Report to:

TECHNICAL REPORT ANDPRELIMINARY ASSESSMENT OF THEZAFRANAL PROJ ECT, PER

EFFECTIVE DATE:J ANUARY 16,2013

Prepared by Marinus Andre De Ruijter, P.Eng.

Gregory Z. Mosher, P.Geo.

Hassan Ghaffari, P.Eng.

Monica Danon-Schaffer, Ph.D., P.Eng.

Sabry Abdel Hafez, Ph.D., P.Eng.

Carlos Guzmn

Wilson Muir, P.Eng.

AS/jc

Suite 800, 555 West Hastings Street, Vancouver, British Columbia V6B 1M1Phone: 604-408-3788 Fax: 604-408-3722


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TABLE OF CONTENTS

1.0 SUMMARY ....................................................................................................................... 1-11.1 INTRODUCTION.................................................................................................................. 1-11.2 PROPERTYDESCRIPTION ................................................................................................... 1-31.3 HISTORY............................................................................................................................ 1-31.4 GEOLOGICALSETTING....................................................................................................... 1-41.5 MINERALRESOURCES........................................................................................................ 1-41.6 MINERALPROCESSING ANDMETALLURGICALTESTING........................................................ 1-5

1.6.1 MINERALPROCESSING...................................................................................... 1-51.6.2 METALLURGICALTESTING................................................................................. 1-5

1.7 MINING.............................................................................................................................. 1-51.8 PROJECT INFRASTRUCTURE ............................................................................................... 1-61.9 ENVIRONMENTAL............................................................................................................... 1-71.10 CAPITAL ANDOPERATINGCOSTS ....................................................................................... 1-8

1.10.1 CAPITALCOSTESTIMATE.................................................................................. 1-81.10.2 OPERATINGCOSTESTIMATE............................................................................. 1-8

1.11 ECONOMICANALYSIS......................................................................................................... 1-91.11.1 SENSITIVITYANALYSIS.................................................................................... 1-10

1.12 PROJECTDEVELOPMENTPLAN......................................................................................... 1-121.13 OPPORTUNITIES ANDRECOMMENDATIONS........................................................................ 1-12

2.0 INTRODUCTION .............................................................................................................. 2-13.0 RELIANCE ON OTHER EXPERTS .................................................................................. 3-14.0 PROPERTY DESCRIPTION AND LOCATION ................................................................ 4-15.0 ACCESSIBIL ITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY ............................................................................................................. 5-16.0 HISTORY .......................................................................................................................... 6-1

6.1 ZAFRANALMAINZONE ....................................................................................................... 6-16.2 VICTORIAZONE ................................................................................................................. 6-26.3 SICERANORTEZONE......................................................................................................... 6-26.4 SICERASURZONE............................................................................................................. 6-2

7.0 GEOLOGICAL SETTING AND MINERALIZATION ......................................................... 7-17.1 REGIONALGEOLOGY.......................................................................................................... 7-17.2 PROPERTYGEOLOGY......................................................................................................... 7-2

7.2.1 ZAFRANALMAINZONE...................................................................................... 7-27.2.2 VICTORIAZONE ................................................................................................ 7-47.2.3 SICERANORTEZONE........................................................................................ 7-4


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7.2.4 SICERASURZONE............................................................................................ 7-57.3 MINERALIZATION................................................................................................................ 7-6

7.3.1 ZAFRANALMAINZONE...................................................................................... 7-77.3.2 VICTORIAZONE ................................................................................................ 7-77.3.3 SICERANORTEZONE........................................................................................ 7-87.3.4 SICERASURZONE............................................................................................ 7-8

8.0 DEPOSIT TYPES ............................................................................................................. 8-19.0 EXPLORATION ................................................................................................................ 9-1

9.1 ZAFRANALMAINZONE ....................................................................................................... 9-19.2 VICTORIAZONE ................................................................................................................. 9-19.3 SICERANORTEZONE......................................................................................................... 9-19.4 SICERASURZONE............................................................................................................. 9-1

10.0 DRILLING ....................................................................................................................... 10-110.1 ZAFRANALMAINZONE ..................................................................................................... 10-110.2 VICTORIAZONE ............................................................................................................... 10-210.3 SICERANORTEZONE....................................................................................................... 10-310.4 SICERASURZONE........................................................................................................... 10-4

11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ............................................. 11-111.1 REVERSECIRCULATIONSAMPLING................................................................................... 11-111.2 DRILLCORESAMPLING.................................................................................................... 11-111.3 QUALITYASSURANCE/QUALITYCONTROLPROCEDURES................................................... 11-211.4 STANDARDS..................................................................................................................... 11-211.5 BLANKS........................................................................................................................... 11-611.6

DUPLICATES .................................................................................................................... 11-8

12.0 DATA VERIFICATION ................................................................................................... 12-113.0 MINERAL PROCESSING AND METALLURGICAL TESTING ...................................... 13-1

13.1 INTRODUCTION................................................................................................................ 13-113.2 CHRONOLOGY OFMETALLURGICALTESTWORK................................................................ 13-113.3 MINERALOGY................................................................................................................... 13-213.4 FEEDGRADE................................................................................................................... 13-513.5 MINERALIZEDMATERIALCHARACTERISTICS...................................................................... 13-613.6 GRINDABILITY.................................................................................................................. 13-7

13.6.1 CRUSHERWORKINDEX................................................................................... 13-713.6.2 ABRASIONINDEX ............................................................................................ 13-813.6.3 BONDBALLMILLWORKINDEX ........................................................................ 13-913.6.4 JKSAGMILLCOMMINUTIONTESTRESULTS ................................................... 13-9

13.7 FLOTATIONTESTS.......................................................................................................... 13-1013.7.1 BULKSULPHIDEFLOTATION .......................................................................... 13-1113.7.2 FLOTATIONPROGRAMS................................................................................. 13-1213.7.3 FLOTATIONTESTINGGRINDSIZEEVALUATION............................................ 13-1213.7.4 FLOTATIONCOLLECTORREAGENTEVALUATION.......................................... 13-13


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13.7.5 FLOTATIONPHEVALUATION....................................................................... 13-1413.7.6 FLOTATIONROUGHERFLOTATIONTIME...................................................... 13-1513.7.7 FLOTATIONREGRIND.................................................................................. 13-1513.7.8 FLOTATIONCLEANER PHEVALUATION........................................................ 13-1613.7.9 FLOTATIONLOCKEDCYCLETESTING.......................................................... 13-1613.7.10 FLOTATIONFINALCONCENTRATEELEMENTALANALYSIS............................. 13-1913.7.11 FLOTATIONVARIABILITYTESTS(ROUGHER) ................................................ 13-19

13.8 SETTLINGTESTWORK(TAILINGS) .................................................................................. 13-2413.9 ENVIRONMENTALTESTING.............................................................................................. 13-2413.10 SOLVENTEXTRACTION ANDELECTROWINNINGPROCESSINGFACILITY............................. 13-2413.11 CONCLUSIONS............................................................................................................... 13-2413.12 RECOMMENDEDADDITIONAL TESTWORK....................................................................... 13-24

14.0 MINERAL RESOURCE ESTIMATES ............................................................................. 14-114.1 EXPLORATORYDATAANALYSIS........................................................................................ 14-1

14.1.1 ASSAYS.......................................................................................................... 14-114.1.2 CAPPING........................................................................................................ 14-214.1.3 COMPOSITES.................................................................................................. 14-2

14.2 BULKDENSITY................................................................................................................. 14-214.3 GEOLOGICALINTERPRETATION......................................................................................... 14-314.4 SPATIALANALYSIS........................................................................................................... 14-614.5 RESOURCEBLOCKMODEL............................................................................................. 14-1014.6 INTERPOLATIONPLAN .................................................................................................... 14-1014.7 MINERALRESOURCECLASSIFICATION............................................................................ 14-1114.8 MINERALRESOURCETABULATION.................................................................................. 14-1114.9 BLOCKMODELVALIDATION............................................................................................ 14-14

15.0 MINERAL RESERVE ESTIMATES ................................................................................ 15-116.0 MINING METHODS ........................................................................................................ 16-1

16.1 INTRODUCTION................................................................................................................ 16-116.2 INITIAL INFORMATION....................................................................................................... 16-116.3 PITOPTIMIZATION............................................................................................................ 16-4

16.3.1 TECHNICAL ANDECONOMICPARAMETERS....................................................... 16-516.3.2 PITOPTIMIZATIONOUTPUT............................................................................. 16-616.3.3 MININGINVENTORY......................................................................................... 16-9

16.4 MININGPHASES............................................................................................................. 16-1216.5 MININGSCHEDULE......................................................................................................... 16-13

16.5.1 PLANNINGCRITERIA...................................................................................... 16-1316.5.2 PRODUCTIONPLAN....................................................................................... 16-1416.6 MINEEQUIPMENT FLEET................................................................................................ 16-2016.7 SCHEDULE OFMINEEQUIPMENT .................................................................................... 16-20

17.0 RECOVERY METHODS ................................................................................................. 17-117.1 INTRODUCTION................................................................................................................ 17-1


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17.2 SUMMARY........................................................................................................................ 17-117.3 PLANTDESIGN................................................................................................................. 17-4

17.3.1 MAJORDESIGNCRITERIA................................................................................ 17-417.3.2 OPERATINGSCHEDULE ANDAVAILABILITY........................................................ 17-5

17.4 PROCESSPLANTDESCRIPTION ........................................................................................ 17-517.4.1 PRIMARYCRUSHING....................................................................................... 17-517.4.2 COARSEMATERIALSTOCKPILE ANDRECLAIM.................................................. 17-617.4.3 GRINDING ANDCLASSIFICATION...................................................................... 17-617.4.4 FLOTATION ANDREGRINDCIRCUITS................................................................ 17-717.4.5 CONCENTRATEHANDLING............................................................................. 17-1017.4.6 TAILINGSTHICKENER.................................................................................... 17-1017.4.7 REAGENTHANDLING ANDSTORAGE .............................................................. 17-1117.4.8 ASSAY ANDMETALLURGICALLABORATORY.................................................... 17-1317.4.9 WATERSUPPLY............................................................................................ 17-1317.4.10 AIRSUPPLY.................................................................................................. 17-1417.4.11 ON-LINESAMPLEANALYSIS........................................................................... 17-14

17.5

SOLVENTEXTRACTION-ELECTROWINNINGPROCESSINGFACILITY.................................... 17-14

17.5.1 INTRODUCTION............................................................................................. 17-1417.5.2 SUMMARY..................................................................................................... 17-1417.5.3 PLANTDESIGN.............................................................................................. 17-15

17.6 PROCESSPLANTDESCRIPTION ...................................................................................... 17-1617.6.1 DUMPLEACHING........................................................................................... 17-1617.6.2 SOLVENTEXTRACTION.................................................................................. 17-1717.6.3 ELECTROWINNINGCIRCUIT............................................................................ 17-18

17.7 WATERSUPPLYREVERSEOSMOSISPLANT ................................................................. 17-1818.0 PROJECT INFRASTRUCTURE ..................................................................................... 18-1

18.1 INTRODUCTION................................................................................................................ 18-118.2 PROCESSPLANT ANDANCILLARYFACILITIES.................................................................... 18-418.2.1 FACILITIESDESCRIPTIONS............................................................................... 18-518.3 WAREHOUSE,MAINTENANCE,ANDCONCENTRATEOPERATIONSFACILITIES....................... 18-7

18.3.1 MAINTENANCESHOP ANDWAREHOUSE........................................................... 18-718.3.2 CONCENTRATOROPERATINGFACILITY............................................................ 18-718.3.3 FUELSTORAGE ANDDISTRIBUTION.................................................................. 18-7

18.4 TAILINGSMANAGEMENTFACILITY..................................................................................... 18-718.5 LEACHFACILITY............................................................................................................... 18-818.6 ROADS............................................................................................................................ 18-9

18.6.1 OVERVIEW...................................................................................................... 18-918.6.2 EXISTINGACCESSROADS............................................................................. 18-1018.6.3 NEWACCESSROADS.................................................................................... 18-1018.6.4 SITEROADS................................................................................................. 18-10

18.7 FRESHWATERSUPPLY ANDDISTRIBUTION..................................................................... 18-1118.7.1 SEAWATERDESALINATIONPLAN ................................................................... 18-1118.7.2 PUMPING ANDCONVEYING THEWATER TO THEMINE..................................... 18-1218.7.3 DRINKINGWATERPLANT .............................................................................. 18-12

18.8 POWERSUPPLY ANDDISTRIBUTION................................................................................ 18-12


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18.9 OTHERINFRASTRUCTURE............................................................................................... 18-1319.0 MARKET STUDIES AND CONTRACTS ........................................................................ 19-120.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY

IMPACT .......................................................................................................................... 20-120.1 ENVIRONMENTALSTUDIES................................................................................................ 20-120.2 ENVIRONMENTALPERMITTING.......................................................................................... 20-2

20.2.1 ENVIRONMENTAL IMPACTASSESSMENTS......................................................... 20-220.2.2 OTHERPERMITS............................................................................................. 20-220.2.3 MINECLOSUREPLAN...................................................................................... 20-320.2.4 ENVIRONMENTAL LEGISLATION........................................................................ 20-320.2.5 PERUVIANENVIRONMENTAL GUIDELINES......................................................... 20-520.2.6 APPLICABLE INTERNATIONALSTANDARDS........................................................ 20-5

20.3 ENVIRONMENTALMANAGEMENTPLAN.............................................................................. 20-620.3.1 POTENTIALENVIRONMENTALIMPACTS............................................................. 20-6

20.4 TAILINGSMANAGEMENT................................................................................................... 20-720.4.1 TAILINGSDRAINAGE........................................................................................ 20-720.4.2 TAILINGSMONITORING.................................................................................... 20-820.4.3 TAILINGSFACILITYCLOSURE........................................................................... 20-9

20.5 SULPHIDETAILINGSMANAGEMENT................................................................................... 20-920.6 MINECLOSURE ANDRECLAMATION................................................................................ 20-10

20.6.1 PROGRESSIVERECLAMATION........................................................................ 20-1020.6.2 FINALCLOSURE............................................................................................ 20-10

20.7 SOCIAL ANDCOMMUNITYCONSIDERATIONS.................................................................... 20-1320.7.1 PROJECTLOCATION ANDAREA OFDIRECT INFLUENCE................................... 20-1320.7.2 CONSULTATION WITHCOMMUNITIES.............................................................. 20-1420.7.3 COMMUNITYRELATIONSPLAN....................................................................... 20-15

21.0 CAPITAL AND OPERATING COSTS ............................................................................ 21-121.1 CAPITALCOSTESTIMATES............................................................................................... 21-1

21.1.1 INTRODUCTION............................................................................................... 21-121.1.2 ESTIMATEBASEDATE ANDVALIDITYPERIODEXCHANGERATE........................ 21-221.1.3 ESTIMATEAPPROACH..................................................................................... 21-221.1.5 OWNERSCOSTS............................................................................................ 21-821.1.6 SUSTAININGCAPITAL.................................................................................... 21-1021.1.8 MININGCAPITALCOSTESTIMATE.................................................................. 21-1021.1.9 PROCESSPLANTCAPITALCOSTESTIMATE.................................................... 21-1421.1.10 TAILINGSMANAGEMENTFACILITYCAPITALCOSTESTIMATE........................... 21-1421.1.11 LEACHFACILITY............................................................................................ 21-1521.1.12 POWERSUPPLY............................................................................................ 21-1821.1.13 WATERSUPPLY............................................................................................ 21-18

21.2 OPERATINGCOSTESTIMATES........................................................................................ 21-1921.2.1 SUMMARY..................................................................................................... 21-1921.2.2 MININGOPERATINGCOSTESTIMATE............................................................. 21-2021.2.3 PROCESSPLANTOPERATINGCOSTESTIMATE............................................... 21-2321.2.4 TAILINGSMANAGEMENTFACILITYOPERATINGCOSTESTIMATE...................... 21-2421.2.5 GENERAL ANDADMINISTRATIVECOSTS......................................................... 21-25


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21.2.6 LEACHFACILITYOPERATINGCOSTESTIMATE................................................ 21-2721.2.7 WATERSUPPLYOPERATINGCOSTESTIMATE................................................ 21-29

22.0 ECONOMIC ANALYSIS ................................................................................................. 22-122.1 INTRODUCTION................................................................................................................ 22-122.2 PRE-TAXMODEL.............................................................................................................. 22-2

22.2.1 MINE/METALPRODUCTION INFINANCIALMODEL.............................................. 22-222.2.2 BASIS OFFINANCIALEVALUATIONS.................................................................. 22-4

22.3 SUMMARY OFFINANCIALRESULTS ................................................................................... 22-522.4 SENSITIVITYANALYSIS..................................................................................................... 22-622.5 POST-TAXFINANCIALANALYSIS........................................................................................ 22-822.6 ROYALTIES.................................................................................................................... 22-1022.7 SMELTERTERMS ........................................................................................................... 22-1022.8 TRANSPORTATIONLOGISTICS......................................................................................... 22-10

22.8.1 INSURANCE................................................................................................... 22-1123.0 ADJACENT PROPERTIES ............................................................................................ 23-124.0 OTHER RELEVANT DATA AND INFORMATION ......................................................... 24-1

24.1 PROJECTEXECUTIONPLAN.............................................................................................. 24-124.1.1 INTRODUCTION............................................................................................... 24-124.1.2 PROJECTAPPROACH...................................................................................... 24-124.1.3 PROJECTEXECUTIONSUMMARY ..................................................................... 24-324.1.4 ENGINEERING................................................................................................. 24-424.1.5 PROCUREMENT............................................................................................... 24-424.1.6 CONSTRUCTIONMANAGEMENT........................................................................ 24-524.1.7 CONSTRUCTIONSCHEDULE............................................................................. 24-724.1.8 PRE-OPERATIONALTESTING ANDSTART-UP .................................................. 24-10

25.0 INTERPRETATION AND CONCLUSIONS .................................................................... 25-125.1 RISKANALYSIS ................................................................................................................ 25-125.2 GEOLOGY........................................................................................................................ 25-325.3 MINING............................................................................................................................ 25-325.4 CONCENTRATOR.............................................................................................................. 25-525.5 LEACHFACILITY............................................................................................................... 25-525.6 TAILINGS ANDWATERMANAGEMENT................................................................................ 25-625.7 OWNERSCOSTS............................................................................................................. 25-625.8 ENVIRONMENTAL............................................................................................................. 25-6

26.0 RECOMMENDATIONS .................................................................................................. 26-126.1 SUMMARY........................................................................................................................ 26-126.2 RISKANALYSIS ................................................................................................................ 26-2

26.2.1 SOCIAL/POLITICAL .......................................................................................... 26-226.2.2 ENVIRONMENTAL ............................................................................................ 26-2

26.3 MINING............................................................................................................................ 26-326.4 GEOLOGY........................................................................................................................ 26-3


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26.5 CONCENTRATOR.............................................................................................................. 26-426.5.1 WATERMANAGEMENT .................................................................................... 26-426.5.2 CLEANERFLOTATIONCIRCUITCONFIGURATION............................................... 26-426.5.3 CYCLONEOVERFLOW/ROUGHERFLOTATIONFEED.......................................... 26-426.5.4 WATERTREATMENTPLANT............................................................................. 26-526.5.5 PRIMARYGRINDINGCIRCUIT........................................................................... 26-526.5.6 COPPERRECOVERY ....................................................................................... 26-5

26.6 FUTUREMETALLURGICALTESTWORK.............................................................................. 26-526.7 CONCENTRATEHANDLINGTRADE-OFF.............................................................................. 26-626.8 PRODUCTTRANSPORTATION............................................................................................ 26-626.9 LEACHFACILITY............................................................................................................... 26-626.10 SITELAYOUT................................................................................................................... 26-726.11 TAILINGSMANAGEMENTFACILITY..................................................................................... 26-726.12 WATERSUPPLY............................................................................................................... 26-826.13 POWERSUPPLY ANDDISTRIBUTION.................................................................................. 26-826.14 ENVIRONMENTAL............................................................................................................. 26-8

27.0 REFERENCES ............................................................................................................... 27-128.0 CERTIFICATES OF QUALIFIED PERSON ................................................................... 28-1

LIST OF TABLES

Table 1.1

General Project Information ............................................................................... 1-1

Table 1.2 Zafranal Property Resource Estimate Synopsis ................................................ 1-4Table 1.3 Summary of Mining Details ................................................................................ 1-6Table 1.4 Capital Cost Summary ....................................................................................... 1-8Table 1.5 Operating Cost Summary ................................................................................... 1-9Table 1.6 Metal Production from the Project .................................................................... 1-10Table 2.1 Summary of QPs ................................................................................................ 2-1Table 4.1 Zafranal Property Mineral Concessions ............................................................. 4-3Table 10.1 Zafranal Main Zone Assay Descriptive Statistics ............................................. 10-1Table 10.2 Victoria Zone Assay Descriptive Statistics ....................................................... 10-2Table 10.3 Sicera Norte Zone Assay Descriptive Statistics ............................................... 10-3Table 10.4 Sicera Sur Zone Assay Descriptive Statistics .................................................. 10-4Table 11.1 Zafranal Property Control Samples .................................................................. 11-2Table 11.2 Zafranal Property Standards ............................................................................ 11-3Table 11.3 Zafranal Property Over-Limit Standards .......................................................... 11-4Table 11.4 Zafranal Property Blank Descriptive Statistics ................................................. 11-6Table 11.5 Zafranal Property Over-limit Blanks ................................................................. 11-6Table 11.6 Zafranal Property Duplicate Sample Descriptive Statistics ............................. 11-8Table 13.1 Test Work Programs and Reports ................................................................... 13-2Table 13.2 Mineral Composition of Phase III Composite Samples ................................... 13-3Table 13.3 Mineral Liberation of Phase III Composite Samples ........................................ 13-4


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Table 13.4 Head Values Composite Samples ................................................................ 13-5Table 13.5 Head Values Variability Samples .................................................................. 13-5Table 13.6 Specific Gravity Results by Rock Type Classification ..................................... 13-6Table 13.7 Crusher Bond Work Index Results Phase I .................................................. 13-7Table 13.8 Crusher Bond Work Index Results by Rock Type Classification ..................... 13-8Table 13.9

Abrasion Index Results by Rock Type Classification ...................................... 13-8

Table 13.10 Bond Ball Mill Index Results by Rock Type Classification ............................... 13-9Table 13.11 Drop Weight Index Results by Rock Type Classification ............................... 13-10Table 13.12 Locked Cycle Concentrate Summary ............................................................ 13-19Table 13.13 Variability Tests Comparison of Results ..................................................... 13-22Table 14.1 AMEC-Minproc 2011 Zafranal Main Zone Resource Estimate at 0.2%

Copper Cut-off .................................................................................................. 14-1Table 14.2 Zafranal Property Drillhole and Sample Quantities.......................................... 14-1Table 14.3 Zafranal Mineral Zone Bulk Density Measurements ........................................ 14-3Table 14.4 Zafranal Property Variograms and Search Ellipse Parameters ....................... 14-7Table 14.5 Zafranal Property Block Model Parameters ................................................... 14-10Table 14.6 Zafranal Property Kriged Resource Synopsis at 0.2% Copper Cut-off ......... 14-11Table 14.7 Zafranal Main Zone Kriged Resource Estimate at 0.2% Copper Cut-off ...... 14-12Table 14.8 Victoria Zone Kriged Resource Estimate at 0.2% Copper Cut-off ................. 14-13Table 14.9 Sicera Norte and Sicera Sur Zones Kriged Resource Estimates at 0.2%

Copper Cut-off ................................................................................................ 14-13Table 16.1 Grade-tonnage Table for Zafranal Main........................................................... 16-2Table 16.2 Grade-tonnage Table for Victoria ..................................................................... 16-2Table 16.3 Grade-tonnage Table for Sicera Sur ................................................................ 16-3Table 16.4 Grade-tonnage Table for Sicera Norte ............................................................. 16-3Table 16.5 Inter-ramp and Overall Slopes Recommended for Zafranal Main Pit.............. 16-4Table 16.6 Mining Costs ..................................................................................................... 16-5Table 16.7 Whittle Run Results Zafranal Main Zone .................................................... 16-7Table 16.8 Whittle Run Results - Victoria Zone ............................................................... 16-7Table 16.9 Whittle Run Results Sicera Norte Zone ...................................................... 16-8Table 16.10 Whittle Run Results Sicera Sur Zone ......................................................... 16-8Table 16.11 Zafranal Main Zone Whittle Pit Mineral Resource ......................................... 16-9Table 16.12 Victoria Zone Whittle Pit Mineral Resource ................................................. 16-10Table 16.13 Sicera Norte Zone Whittle Pit Mineral Resource ......................................... 16-11Table 16.14 Sicera Sur Zone Whittle Pit Mineral Resource ............................................ 16-11Table 16.15 Total Mineral Inventory from Whittle Pits ..................................................... 16-12Table 16.16 80,000 t/d Mining Plan Summary By Planning Period ................................... 16-15Table 16.17 80,000 t/d Mining Plan Summary By Planning Period ................................... 16-16Table 16.18 Mining Equipment Requirements ................................................................... 16-21Table 17.1 Major Design Criteria........................................................................................ 17-4Table 17.2 Major Design Criteria for the Leach SX-EW Plant ......................................... 17-15Table 19.1 Commercial Terms for Sale of Products .......................................................... 19-1Table 21.1 Capital Cost Summary ..................................................................................... 21-1Table 21.2 Details of Owners Costs .................................................................................. 21-9Table 21.3 Summary of Mining Costs .............................................................................. 21-11Table 21.4 Mining Pre-production Unit Costs .................................................................. 21-11Table 21.5 Initial Mining Equipment Fleet ........................................................................ 21-12Table 21.6 Other Mining Investments .............................................................................. 21-13Table 21.7 Process Plant Capital Cost ............................................................................ 21-14Table 21.8 Tailings Management Facility Capital Costs .................................................. 21-15Table 21.9 Leach Facility Capital Cost ............................................................................. 21-15


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Table 21.10 Power Supply and Distribution Capital Cost .................................................. 21-18Table 21.11 Water Supply Capital Costs ........................................................................... 21-19Table 21.12 Operating Cost Summary ............................................................................... 21-19Table 21.13 Mine Unit Operating Cost Summary .............................................................. 21-20Table 21.14 Relevant Consumables Prices ....................................................................... 21-20Table 21.15

Mining Operating Cost Summary ................................................................... 21-22

Table 21.16 Concentrator Annual Operating Cost Summary ............................................ 21-23Table 21.17 Tailings Management Facility Sustaining and Operating Costs .................... 21-24Table 21.18 G&A Cost Estimate ........................................................................................ 21-25Table 21.19 Assay Laboratory Costs ................................................................................. 21-26Table 21.20 Leach Facility Supply Costs ........................................................................... 21-27Table 21.21 Leach Facility Operating Cost 10,000 t/a Cathode ..................................... 21-28Table 21.22 Water Supply Operating Cost Estimate ......................................................... 21-30Table 22.1 Metal Production from the Zafranal Project ..................................................... 22-2Table 22.2 Summary of Pre-tax Financial Results ............................................................. 22-5Table 22.3 Components of the Various Taxes ................................................................... 22-9Table 22.4 Summary of Post-tax Financial Results ......................................................... 22-10Table 25.1 Mining Plan ....................................................................................................... 25-4Table 25.2 Mining Pre-production and Production Costs .................................................. 25-4Table 26.1 Recommended Future Work ............................................................................ 26-1

LIST OF FIGURES

Figure 1.1 Property Location Map ....................................................................................... 1-2Figure 1.2 Pre-tax NPV Sensitivity Analysis...................................................................... 1-11Figure 1.3 Pre-tax IRR Sensitivity Analysis ....................................................................... 1-11Figure 1.4 Pre-tax Payback Sensitivity Analysis ............................................................... 1-12Figure 4.1 Property Location ............................................................................................... 4-2Figure 4.2 Zafranal Property Mineral Concessions and Mineral Zone Locations ............... 4-5Figure 7.1 Tectonic Belts of Southeastern Per ................................................................. 7-1Figure 7.2 Zafranal and Victoria Geology............................................................................ 7-3Figure 7.3 Sicera Norte Zone Geology................................................................................ 7-5Figure 7.4 Sicera Sur Zone Geology ................................................................................... 7-6Figure 13.1 Copper Head Grade versus Recovery for Rock Type ................................... 13-11Figure 13.2 LCT Procedure Plenge ................................................................................ 13-17Figure 13.3 LCT Procedure G&T ................................................................................... 13-18Figure 13.4 Rougher Recovery versus Copper Feed Grade G&T Variability Tests ...... 13-20Figure 13.5 Rougher Recovery versus Copper Feed Grade Plenge Variability Tests .. 13-21Figure 13.6 Assay Comparison, Copper Head Grade ...................................................... 13-23Figure 14.1 Perspective View of the Zafranal and Victoria Mineral Zones ......................... 14-4Figure 14.2 Perspective View of the Sicera Norte Mineral Zones ...................................... 14-5Figure 14.3 Perspective View of the Sicera Sur Mineral Zones.......................................... 14-5Figure 16.1 Inter-ramp and Overall Slope Angle by Domain .............................................. 16-4Figure 16.2 General Mine Configuration ........................................................................... 16-13Figure 16.3 Total Tonnage Mining Plan ............................................................................ 16-17Figure 16.4 Concentrator Feed ......................................................................................... 16-18Figure 16.5 Leach Facility Feed ........................................................................................ 16-19


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Figure 17.1 Simplified Process Flowsheet Zafranal Project ............................................ 17-3Figure 18.1 Overall Site Layout ........................................................................................... 18-2Figure 18.2 Site Layout........................................................................................................ 18-3Figure 18.3 Site View from Concentrator Location ............................................................. 18-4Figure 18.4 Plant Site Layout .............................................................................................. 18-5Figure 22.1

Total Metal Production .................................................................................... 22-3

Figure 22.2 Pre-tax Undiscounted Annual and Cumulative Net Cash Flows ..................... 22-5Figure 22.3 Pre-tax NPV Sensitivity Analysis...................................................................... 22-6Figure 22.4 Pre-tax IRR Sensitivity Analysis ....................................................................... 22-7Figure 22.5 Pre-tax Payback Sensitivity Analysis ............................................................... 22-7Figure 24.1 Project Management Organization Chart ........................................................ 24-2Figure 24.2 CM Organization Chart .................................................................................... 24-6Figure 24.3 Preliminary Project Development Schedule Summary .................................... 24-8

GLOSSARY

UNITS OF MEASURE

above mean sea level ...................................................................................................................... amsl

acre .................................................................................................................................................. ac

ampere ............................................................................................................................................. A

annum (year) .................................................................................................................................... a

billion ................................................................................................................................................ B

billion tonnes .................................................................................................................................... Bt

billion years ago ............................................................................................................................... Ga

British Thermal Unit ......................................................................................................................... BTU

centimetre ........................................................................................................................................ cm

cubic centimetre ............................................................................................................................... cm3

cubic feet per minute ........................................................................................................................ cfm

cubic feet per second ....................................................................................................................... ft3/s

cubic foot.......................................................................................................................................... ft3

cubic inch ......................................................................................................................................... in3

cubic metre ...................................................................................................................................... m3

cubic yard......................................................................................................................................... yd3

Coefficients of Variation ................................................................................................................... CVs

day ................................................................................................................................................... d

days per week .................................................................................................................................. d/wk

days per year (annum) ..................................................................................................................... d/adead weight tonnes .......................................................................................................................... DWT

decibel adjusted ............................................................................................................................... dBa

decibel ............................................................................................................................................. dB

degree ..............................................................................................................................................

degrees Celsius ............................................................................................................................... C

diameter ...........................................................................................................................................


13/256

xi 1295840100-REP-R0001-05

dollar (American) .............................................................................................................................. US$

dollar (Canadian) ............................................................................................................................. Cdn$

dry metric ton ................................................................................................................................... dmt

foot ................................................................................................................................................... ft

gallon ............................................................................................................................................... gal

gallons per minute (US) ................................................................................................................... gpmgigajoule........................................................................................................................................... GJ

gigapascal ........................................................................................................................................ GPa

gigawatt............................................................................................................................................ GW

gram ................................................................................................................................................. g

grams per litre .................................................................................................................................. g/L

grams per tonne ............................................................................................................................... g/t

greater than ...................................................................................................................................... >

hectare (10,000 m2) ......................................................................................................................... ha

hertz ................................................................................................................................................. Hz

horsepower ...................................................................................................................................... hp

hour .................................................................................................................................................. hhours per day ................................................................................................................................... h/d

hours per week ................................................................................................................................ h/wk

hours per year .................................................................................................................................. h/a

inch .................................................................................................................................................. "

kilo (thousand) ................................................................................................................................. k

kilogram ........................................................................................................................................... kg

kilograms per cubic metre ................................................................................................................ kg/m3

kilograms per hour ........................................................................................................................... kg/h

kilograms per square metre ............................................................................................................. kg/m2

kilometre .......................................................................................................................................... km

kilometres per hour .......................................................................................................................... km/h

kilopascal ......................................................................................................................................... kPa

kilotonne........................................................................................................................................... kt

kilovolt .............................................................................................................................................. kV

kilovolt-ampere ................................................................................................................................. kVA

kilovolts ............................................................................................................................................ kV

kilowatt ............................................................................................................................................. kW

kilowatt hour ..................................................................................................................................... kWh

kilowatt hours per tonne (metric ton) ................................................................................................ kWh/t

kilowatt hours per year ..................................................................................................................... kWh/a

less than...........................................................................................................................................

Zafranal Pea Final 2013-01-16

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