Ollachea Gold Project PERU NI 43-101 Technical Report on Feasibility Study
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Ollachea Gold Project PERU NI 43-101 Technical Report on Feasibility Study Prepared for: Minera Kuri Kullu S.A. Effective Date: 29 November 2012 Project Number: 65033 IMPORTANT NOTICE This report was prepared as National Instrument 43-101 Technical Report for Minera Kuri Kullu S.A. (MKK) BY AMEC Australia Pty Ltd (AMEC). The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved in AMEC‟s services, based on i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by MKK subject to terms and conditions of its contract with AMEC. Except for the purposed legislated under Canadian provincial and territorial securities law, any other uses of this report by any third party is at that party‟s sole risk. Prepared by: Print name Reviewed by: Print name Approved by: Print name Ollachea Gold Project Ollachea, Peru NI 43-101 Technical Report C ONTENTS 1 SUMMARY ............................................................................................................. 1-1 1.1 Property, Access and Permits ..................................................................... 1-1 1.2 Geology and Mineral Resources ................................................................. 1-2 1.3 Mining and Mineral Reserves ..................................................................... 1-4 1.4 Metallurgical Testwork and Process Design.............................................. 1-10 1.5 Tailings Disposal Facility .......................................................................... 1-11 1.6 Project Operating and Capital Costs ......................................................... 1-11 1.6.1 Operating Cost Estimates ............................................................. 1-11 1.6.2 Capital Cost Estimates .................................................................. 1-14 1.7 Financial Analysis ..................................................................................... 1-14 1.8 Conclusions .............................................................................................. 1-17 1.9 Project Risks and Opportunities ................................................................ 1-17 1.9.1 Geology and Mineral Resources ................................................... 1-17 1.9.2 Mining and Mineral Reserves ........................................................ 1-18 1.9.3 Metallurgy and Mineral Process Design ........................................ 1-20 1.9.4 Recommendations ........................................................................ 1-22 2 INTRODUCTION .................................................................................................... 2-1 2.1 Terms of Reference .................................................................................... 2-2 2.2 Qualified Persons ....................................................................................... 2-2 2.3 Site Visits and Scope of Personal Inspection .............................................. 2-3 2.4 Effective Dates ........................................................................................... 2-3 2.5 Information Sources and References .......................................................... 2-3 3 RELIANCE ON OTHER EXPERTS ........................................................................ 3-1 3.1 Exploration and Mining Concession Tenure ................................................ 3-1 3.2 Surface Rights ............................................................................................ 3-1 3.3 Permitting ................................................................................................... 3-1 3.4 Social and Environmental Impacts .............................................................. 3-2 3.5 Taxation Information ................................................................................... 3-2 4 PROPERTY DESCRIPTION AND LOCATION ....................................................... 4-1 4.1 Property and Title in (Jurisdiction) ............................................................... 4-1 4.1.1 Exploration Concessions ................................................................. 4-2 4.2 Mineral Tenure ........................................................................................... 4-4 4.3 Surface Rights ............................................................................................ 4-4 4.3.1 Agreements and Royalties .............................................................. 4-4 4.4 Permits ....................................................................................................... 4-5 4.5 Environmental Liabilities ............................................................................. 4-5 4.6 Social License ............................................................................................ 4-6 4.7 Comments on Section 4 ............................................................................. 4-6 5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY .................................................................................................. 5-1 5.1 Accessibility ................................................................................................ 5-1 5.2 Climate ....................................................................................................... 5-1 5.3 Local Resources and Infrastructure ............................................................ 5-2 Project No.: 65033 TOC i December 2012 Ollachea Gold Project Ollachea, Peru NI 43-101 Technical Report 5.4 Physiography .............................................................................................. 5-2 5.5 Comments on Section 5 ............................................................................. 5-4 6 HISTORY ............................................................................................................... 6-1 7 GEOLOGICAL SETTING AND MINERALIZATION ................................................ 7-1 7.1 Regional Geology ....................................................................................... 7-1 7.2 Project Geology .......................................................................................... 7-1 7.3 Deposits ..................................................................................................... 7-3 7.3.1 Mineralisation .................................................................................. 7-3 8 DEPOSIT TYPES ................................................................................................... 8-1 8.1 Comments on Section 8 ............................................................................. 8-1 9 EXPLORATION ...................................................................................................... 9-1 9.1 Exploration Potential ................................................................................... 9-2 10 DRILLING ............................................................................................................ 10-1 10.1 Drill Methods............................................................................................. 10-6 10.2 Geological Logging ................................................................................... 10-6 10.3 Recovery .................................................................................................. 10-6 10.4 Collar Surveys .......................................................................................... 10-6 10.5 Down hole Surveys ................................................................................... 10-7 10.6 Geotechnical and Hydrological Drilling...................................................... 10-7 10.6.1 Geotechnical Drilling ..................................................................... 10-7 10.6.2 Hydrogeological Drilling................................................................. 10-7 10.7 Metallurgical Drilling .................................................................................. 10-8 10.8 Sample Length/True Thickness ................................................................ 10-9 11 SAMPLE PREPARATION, ANALYSES, AND SECURITY ................................... 11-1 11.1 Sampling Methods .................................................................................... 11-1 11.1.1 Sample Preparation and Analysis ................................................. 11-1 11.1.2 Adequacy of Procedures ............................................................... 11-3 11.2 Metallurgical Sampling .............................................................................. 11-3 11.2.1 Summary ...................................................................................... 11-3 11.2.2 Background ................................................................................... 11-4 11.2.3 MASTER SAMPLE SELECTION ................................................... 11-6 11.2.4 VARIABILITY SAMPLE SELECTION ............................................ 11-7 11.3 Density Determinations ............................................................................. 11-9 11.4 Quality Assurance and Quality Control ..................................................... 11-9 11.5 Databases ................................................................................................ 11-9 11.6 Sample Security ....................................................................................