Geological Report
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RESOURCE ESTIMATION ON THE DORADO/LAJITAS GOLD PROPERTY MARICUNGA GOLD-COPPER DISTRICT THIRD REGION, REPUBLIC OF CHILE FOR CAPELLA RESOURCES LTD. Dartmouth, Nova Scotia, Canada Effective: August 17, 2011 BRIAN COLE P.GEO. CAPELLA RESOURCES LTD. DORADO / LAJITAS PROJECT TABLE OF CONTENTS 1 SUMMARY .......................................................................................................................... 1 2 INTRODUCTION ..................................................................................................................... 3 3 RELIANCE ON OTHER EXPERTS .................................................................................................. 4 4 PROPERTY DESCRIPTION AND LOCATION ..................................................................................... 4 4.1 PROPERTY DESCRIPTION .............................................................................................................. 4 4.2 TERMS OF ACQUISITION .............................................................................................................. 7 4.2.1 Lajitas Option with Compañia Cerro El Diablo ......................................................................... 7 4.2.2 Agreement between International Mineral Resources, Ltd and the Company ........................ 7 5 ACCESS, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY ..................................... 7 6 PROPERTY HISTORY ............................................................................................................... 9 6.1 DRILLING ................................................................................................................................. 9 6.2 HISTORIC MINERAL PROCESSING AND METALLURGICAL TESTING ......................................................... 10 6.3 HISTORIC MINERAL RESOURCE ESTIMATE ...................................................................................... 10 7 GEOLOGICAL SETTING AND MINERALIZATION ............................................................................. 11 7.1 REGIONAL GEOLOGY ................................................................................................................ 11 7.2 DISTRICT AND PROPERTY GEOLOGY .............................................................................................. 14 7.2.1 Lithology .................................................................................................................................14 7.2.2 Structure .................................................................................................................................15 7.2.3 Alteration ................................................................................................................................16 7.3 MINERALIZATION .................................................................................................................... 17 8 DEPOSIT TYPES ................................................................................................................... 18 9 EXPLORATION .................................................................................................................... 19 9.1 SUMMARY OF ACTIVITIES .......................................................................................................... 19 9.2 GEOPHYSICAL SURVEYS ............................................................................................................. 20 9.2.1 Ground Magnetic and IP Surveys ...........................................................................................20 9.2.2 Hyperspectral Imagery ...........................................................................................................22 9.3 TRENCH SAMPLING .................................................................................................................. 26 9.3.1 2008 Program .........................................................................................................................26 9.3.2 2009/2010 Program ...............................................................................................................27 10 DRILLING ....................................................................................................................... 28 10.1 REVERSE CIRCULATION (2006) ................................................................................................ 28 BRIAN COLE P.GEO. Page i CAPELLA RESOURCES LTD. DORADO / LAJITAS PROJECT 10.2 DIAMOND DRILLING (2008) ................................................................................................... 29 10.2.1 Diamond Drill Holes LJ08008/8A, LJ08009, LJ08010 ..............................................................29 10.2.2 Diamond Drill Hole LJ08011 ....................................................................................................30 10.3 REVERSE CIRCULATION (2009/2010) ....................................................................................... 31 11 SAMPLE PREPARATION, ANALYES AND SECURITY ...................................................................... 33 11.1 SAMPLING METHOD AND APPROACH ........................................................................................ 33 11.1.1 Reverse Circulation Drill Samples ...........................................................................................33 11.1.2 Trench Samples .......................................................................................................................33 11.1.3 Diamond Core Samples ...........................................................................................................33 11.1.4 Control Samples ......................................................................................................................34 11.2 SAMPLING PREPARATION, ANALYSES, AND SECURITY .................................................................... 34 11.2.1 Reverse Circulation Drill Samples ...........................................................................................34 11.2.2 Trench and Diamond Drill Core Samples ................................................................................34 11.2.3 Laboratories ............................................................................................................................35 11.2.4 Sample and Assaying Integrity ...............................................................................................35 12 DATA VERIFICATION ......................................................................................................... 37 13 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................................... 37 14 MINERAL RESOURCE ESTIMATE ............................................................................................ 38 14.1 INTRODUCTION .................................................................................................................... 38 14.2 EXPLORATORY DATA ANALYSIS ................................................................................................ 38 14.2.1 Topographic Base ...................................................................................................................39 14.2.2 Specific Gravity Parameters ....................................................................................................39 14.3 METHODOLOGY AND RATIONALE ............................................................................................. 40 14.4 OXIDE VS. SULPHIDE DISTRIBUTION .......................................................................................... 44 14.5 RESOURCE ESTIMATION MODEL............................................................................................... 47 14.6 LIMITING FACTORS ............................................................................................................... 47 15 ADJACENT PROPERTIES ...................................................................................................... 50 16 OTHER RELEVANT DATA AND INFORMATION ........................................................................... 52 17 INTERPRETATIONS AND CONCLUSIONS ................................................................................... 52 18 RECOMMENDATIONS ........................................................................................................ 52 19 REFERENCES ................................................................................................................... 55 CERTIFICATE OF QUALIFICATIONS AND DECLARATION .......................................................................... 58 BRIAN COLE P.GEO. Page ii CAPELLA RESOURCES LTD. DORADO / LAJITAS PROJECT LIST OF TABLES Table 4.1 Claims controlled by Compãnia Minera Cerro El Diablo at the Dorado Gold Property– Third Region, Chile Table 6.1 Dorado Property RC Drilling Highlights (1997) Table 6.2 Minera Santa Fe Pacific, Dorado (Lajitas) Property Hot Cyanide Procedure Table 10.1 Significant RC Drill Intersections (2006) Table 10.2 Significant Drill Intersections (2008-2010) Table 13.1 Metallurgical Results, Bottle Roll Tests Table 14.1 Lajitas Resource Model Table 15.1 Gold Deposits of the Maricunga Belt, Region III, Chile Table 19.1 Proposed Budget LIST OF FIGURES Figure 4.1 Dorado/Lajitas Property Map Figure 5.1 Dorado / Lajitas Property (photo) Figure 7.1 Map of North Central Chile showing Gold/Silver & Copper Deposits Figure 7.2 Location Map of the Maricunga and El Indio-Pascua Belts relative to other major Neogene Deposits and Districts