Preliminary Economic Assessment Marimaca Project Antofagasta, Ii Region, Chile

PRELIMINARY ECONOMIC ASSESSMENT MARIMACA PROJECT ANTOFAGASTA, II REGION, CHILE

NI 43 101 Technical Report.

Prepared by: Robin Kalanchey (P. Eng.), Ausenco Francisco Castillo (Member of Chilean Mining Commission), Ausenco Scott Weston (P. Eng.), Ausenco Luis Oviedo (Member of Chilean Mining Commission), NCL Ingeniería y Construcción Carlos Guzman (FAusIMM), NCL Ingeniería y Construcción Marcelo Jo (Member of Chilean Mining Commission), Jo & Loyola Consultores de Procesos

Prepared for: Marimaca Copper Report Effective Date: 4 August 2020

Important Notice

This report was prepared as National Instrument 43-101 Technical Report for Marimaca Copper Corp (Marimaca Copper) by Ausenco Engineering Canada Inc., Jo & Loyola Consultores de Procesos and NCL Ingeniería y Construcción (collectively, the “Report Authors”). The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved in Report Authors’ 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 Marimaca Copper subject to terms and conditions of its contract with each of the Report Authors.

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.

Table of Contents

1 Summary ...... 1-1 1.1 Introduction ...... 1-1 1.2 Terms of Reference ...... 1-1 1.3 Project Setting ...... 1-1 1.4 Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements ...... 1-1 1.5 Geology and Mineralization ...... 1-2 1.6 History ...... 1-3 1.7 Drilling and Sampling ...... 1-3 1.8 Data Verification ...... 1-6 1.9 Metallurgical Testwork ...... 1-6 1.9.1 Crush Heap Leach ...... 1-6 1.9.2 ROM Leach ...... 1-7 1.10 Mineral Resource Estimation ...... 1-7 1.11 Mineral Resource Statement ...... 1-8 1.12 Mining Methods ...... 1-11 1.13 Recovery Methods ...... 1-13 1.14 Project Infrastructure...... 1-14 1.15 Environmental, Permitting and Social Considerations ...... 1-15 1.15.1 Environmental Considerations ...... 1-15 1.15.2 Closure and Reclamation Planning ...... 1-16 1.15.3 Social Considerations ...... 1-16 1.16 Markets and Contracts ...... 1-16 1.17 Capital Cost Estimates ...... 1-16 1.18 Operating Cost Estimates ...... 1-17 1.19 Economic Analysis ...... 1-18 1.19.1 Cautionary Statement ...... 1-18 1.19.2 Methodology Used ...... 1-19 1.19.3 Results ...... 1-20 1.19.4 Sensitivity Analysis ...... 1-20 1.20 Risks and Opportunities ...... 1-21 1.21 Interpretation and Conclusions ...... 1-22 1.22 Recommendations ...... 1-22 1.22.1 Geology ...... 1-22 1.22.2 Mining...... 1-22 1.22.3 Metallurgy ...... 1-23 1.22.4 Environmental ...... 1-23 2 Introduction...... 2-24 2.1 Introduction ...... 2-24 2.2 Terms of Reference ...... 2-24 2.3 Qualified Persons ...... 2-24 2.4 Site Visits and Scope of Personal Inspection ...... 2-25 2.5 Effective Dates ...... 2-26 2.6 Information Sources and References ...... 2-26 2.7 Previous Technical Reports ...... 2-26 3 Reliance on Other Experts ...... 3-27 3.1 Introduction ...... 3-27 3.2 Mineral Tenure ...... 3-27 3.3 Markets ...... 3-27 3.4 Taxation ...... 3-27 4 Property Description and Location ...... 4-28 4.1 Introduction ...... 4-28 4.2 Property and Title in Chile ...... 4-28 4.2.1 Mineral Tenure ...... 4-28

4.2.2 Mining Tax ...... 4-28 4.2.3 Surface Rights ...... 4-29 4.2.4 Rights of Way ...... 4-30 4.2.5 Water Rights ...... 4-30 4.3 Ownership ...... 4-30 4.4 Agreements and Options ...... 4-30 4.4.1 Newco Marimaca ...... 4-30 4.4.2 Inversiones Creciente Limitada ...... 4-31 4.4.3 Capax SA ...... 4-32 4.4.4 Compañía Minera Naguayán S.C.M...... 4-32 4.4.5 Proyecta S.A. and Sociedad Contractual Minera Proyecta ...... 4-33 4.4.6 Rayrock Antofagasta S.A.C. and Compañía Minera Milpo S.A.A ...... 4-33 4.5 Mineral Tenure ...... 4-33 4.6 Surface Rights ...... 4-34 4.7 Water Rights ...... 4-39 4.8 Royalties...... 4-39 4.8.1 Newco Marimaca ...... 4-39 4.8.2 Inversiones Creciente ...... 4-39 4.8.3 Capax ...... 4-39 4.8.4 Minera Naguayán ...... 4-39 4.8.5 Proyecta S.A. and Sociedad Contractual Minera Proyecta ...... 4-40 4.8.6 Rayrock ...... 4-40 4.9 Permitting Considerations ...... 4-40 4.10 Environmental Considerations ...... 4-40 4.11 Social Licence Considerations ...... 4-40 4.12 Comments on Section 4 ...... 4-40 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 5-42 5.1 Accessibility ...... 5-42 5.2 Local Resources and Infrastructure ...... 5-42 5.3 Climate ...... 5-43 5.4 Physiography ...... 5-43 5.4.1 Comments on Section 5 ...... 5-44 6 History ...... 6-45 6.1 Project History ...... 6-45 6.2 Production ...... 6-45 7 Geological Setting and Mineralization ...... 7-46 7.1 Regional Geology ...... 7-46 7.2 Project Geology ...... 7-48 7.3 Deposit Description ...... 7-49 7.3.1 Lithologies ...... 7-49 7.3.2 Structure ...... 7-49 7.3.3 Alteration ...... 7-54 7.3.4 Mineralization ...... 7-55 7.4 Comments on Section 7 ...... 7-59 8 Deposit Types ...... 8-61 8.1 Overview ...... 8-61 8.2 Comments on Section 8 ...... 8-61 9 Exploration ...... 9-62 9.1 Surveying, Imagery and Topographic Base ...... 9-62 9.2 Geological Mapping ...... 9-63 9.3 Geochemical Sampling ...... 9-64 9.4 Geophysical Surveys ...... 9-66 9.5 Comments on Section 9 ...... 9-68 10 Drilling ...... 10-69

10.1 Introduction ...... 10-69 10.2 Drill Methods...... 10-69 10.3 Logging Procedures ...... 10-69 10.4 Recovery ...... 10-69 10.5 Collar Surveys ...... 10-69 10.6 Down Hole Surveys ...... 10-72 10.7 Sample Length/True Thickness ...... 10-72 10.8 Comments on Section 10 ...... 10-72 11 Sample Preparation, Analyses and Security ...... 11-73 11.1 Sampling Methods ...... 11-73 11.1.1 Geochemical Sampling ...... 11-73 11.1.2 Reverse Circulation ...... 11-73 11.1.3 Core Sampling ...... 11-73 11.2 Specific Gravity Determinations ...... 11-75 11.3 Analytical and Test Laboratories ...... 11-76 11.4 Sample Preparation and Analysis ...... 11-76 11.5 Quality Assurance and Quality Control ...... 11-77 11.5.1 Introduction ...... 11-77 11.5.2 Check Sample Analysis ...... 11-77 11.5.3 Standard Reference Material Analysis...... 11-79 11.5.4 Duplicate Sample Analysis ...... 11-80 11.5.5 Blank Sample Analysis ...... 11-81 11.6 Analysis of Core vs RC Holes (twin) ...... 11-81 11.7 Databases ...... 11-83 11.8 Sample Security...... 11-84 11.9 Comments on Section 11 ...... 11-84 12 Data Verification ...... 12-86 12.1 Internal Data Verification ...... 12-86 12.2 Data Verifications by NCL ...... 12-86 12.3 Comments on Section 12 ...... 12-86 13 Mineral Processing and Metallurgical Testing ...... 13-87 13.1 Metallurgical Testing ...... 13-87 13.1.1 Geomet I & II ...... 13-87 13.1.2 Geomet III ...... 13-96 13.2 Current and Future Tests ...... 13-98 13.2.1 Geomet IV ...... 13-98 13.2.2 Metallurgical Variability Analysis Plan ...... 13-101 13.2.3 Metallurgical Parameters Optimization ...... 13-101 13.3 Industrial Metallurgical Models ...... 13-101 13.3.1 Copper Recovery ...... 13-101 13.3.2 Acid Consumption ...... 13-106 13.5 Metallurgical Parameters ...... 13-125 13.5.1 Agglomeration ...... 13-125 13.5.2 Crushing Size ...... 13-126 13.5.3 Heap Height ...... 13-127 13.5.4 Irrigation Rate ...... 13-134 13.5.5 Leaching Cycle ...... 13-135 13.6 Conclusions and Recommendations ...... 13-136 14 Mineral Resource Estimates ...... 14-140 14.1 Introduction ...... 14-140 14.2 Geological Models ...... 14-140 14.3 Database Supporting Mineral Resource Estimate...... 14-140 14.4 Sample Coding ...... 14-140 14.5 Composites ...... 14-144 14.6 Contact Analyses ...... 14-144

14.7 Capping/Outlier Restriction ...... 14-144 14.8 Variography ...... 14-145 14.9 Block Model ...... 14-145 14.10 Density Assignment ...... 14-145 14.11 Estimation/Interpolation Methods ...... 14-145 14.12 Block Model Validation ...... 14-148 14.13 Classification of Mineral Resources...... 14-148 14.14 Reasonable Prospects of Eventual Economic Extraction ...... 14-149 14.15 Mineral Resource Statement ...... 14-151 14.16 Factors That May Affect the Mineral Resource Estimate...... 14-153 14.17 Comments on Section 14 ...... 14-154 15 Mineral Reserve Estimates ...... 15-155 16 Mining Methods ...... 16-156 16.1 Summary ...... 16-156 16.2 Throughput Rate Rationalisation Study ...... 16-156 16.3 Input Parameters ...... 16-156 16.4 Geotechnical Considerations ...... 16-157 16.5 Dilution and Mine Losses ...... 16-157 16.6 Cut-off Grades ...... 16-158 16.7 Pit Designs ...... 16-159 16.7.1 Final Pit ...... 16-159 16.7.2 Mining Phases ...... 16-159 16.8 Production Schedule ...... 16-161 16.9 Waste Rock Storage Facilities ...... 16-165 16.10 ROM Leach and Stockpile ...... 16-165 16.11 Drilling and Blasting ...... 16-166 16.12 Mining Equipment ...... 16-166 16.13 Mine Rotation Schedule ...... 16-169 17 Recovery Methods ...... 17-170 17.1 Process Description ...... 17-170 17.2 Production Plan ...... 17-171 17.3 Dry Area and Material Handling ...... 17-172 17.3.1 Crushing Plant and Stockpile Reclaim ...... 17-172 17.3.2 Agglomeration ...... 17-175 17.3.3 Heap Stacking ...... 17-175 17.3.4 Spent Material Reclaim ...... 17-175 17.4 Wet Area and Solution Management ...... 17-175 17.4.1 Heap Leaching Circuit and Irrigation System ...... 17-175 17.4.2 Solution Management and Operating Ponds ...... 17-176 17.4.3 Event Ponds ...... 17-177 17.5 Solvent Extraction ...... 17-177 17.6 Electrowinning ...... 17-178 17.7 ROM ...... 17-179 17.7.1 ROM Mine Plan ...... 17-179 17.7.2 ROM Leaching ...... 17-179 17.7.3 ROM Operating Pond ...... 17-179 17.8 Water and Power Requirements for Processing ...... 17-179 17.9 Consumables...... 17-180 17.10 Design Criteria ...... 17-180 18 Project Infrastructure ...... 18-185 18.1 On-site Infrastructure ...... 18-185 18.1.1 Existing Infrastructure ...... 18-185 18.1.2 Proposed Infrastructure...... 18-185 18.2 Process Facilities ...... 18-186 18.2.1 Crush Heap Leach Facilities ...... 18-186

18.2.2 ROM Leach Facilities ...... 18-187 18.2.3 Ripios Storage facility ...... 18-187 18.2.4 Waste Rock Storage Facility ...... 18-187 18.3 Power Supply ...... 18-188 18.4 Water Management Infrastructure ...... 18-188 18.5 Off-site Infrastructure ...... 18-189 18.5.1 Existing Infrastructure ...... 18-189 18.5.2 Other Infrastructure in the zone ...... 18-190 18.5.3 Proposed Infrastructure...... 18-190 19 Market Studies and Contracts ...... 19-191 19.1 Metal Prices ...... 19-191 19.2 Sulphuric Acid Price in Chile and Peru ...... 19-191 19.2.1 Sources of Sulphuric Acid Supply in the Vicinity of the Marimaca Project ...... 19-191 20 Environmental Studies, Permitting and Social or Community Impact ...... 20-193 20.1 Sustainability Philosophy ...... 20-193 20.2 Environmental and Socioeconomic Setting...... 20-193 20.2.1 Completed Baseline Studies during DIA ...... 20-193 20.2.2 Baseline Studies Required for next stages ...... 20-196 20.3 Environmental Permitting ...... 20-197 20.3.1 Environmental Approvals ...... 20-197 20.3.2 Environmental Sectorial Permits (PAS) ...... 20-200 20.3.3 Sectorial Permits...... 20-201 20.4 Closure Considerations ...... 20-202 20.4.1 Regulatory Considerations ...... 20-202 20.4.2 Closure Measures ...... 20-203 20.4.3 Closure Costs and Financial Assurance ...... 20-203 20.5 Summary of Potential Environmental and Socio-economic Effects ...... 20-203 21 Capital and Operating Costs ...... 21-205 21.1 Cost Estimation Methodology ...... 21-205 21.1.1 Source Data ...... 21-205 21.1.2 Basic Information ...... 21-206 21.1.3 Estimate Classification ...... 21-206 21.1.4 Market Availability ...... 21-206 21.2 Capital Costs ...... 21-206 21.2.1 Overview ...... 21-206 21.2.2 Initial Capital Cost ...... 21-207 21.2.3 Sustaining Capital Costs ...... 21-209 21.2.4 Mine Capital Cost ...... 21-209 21.3 Operating Cost ...... 21-210 21.3.1 Summary ...... 21-210 21.3.2 Mine Operating Cost ...... 21-211 21.3.3 Processing ...... 21-212 22 Economic Analyses ...... 22-220 22.1 Cautionary Statement ...... 22-220 22.2 Methodology Used ...... 22-221 22.3 Financial Model Parameters...... 22-221 22.4 Taxes ...... 22-221 22.5 Working Capital ...... 22-222 22.6 Royalty ...... 22-222 22.7 Economic Analysis ...... 22-222 22.8 Sensitivity Analysis ...... 22-226 23 Adjacent Properties ...... 23-229 24 Other Relevant Data and Information ...... 24-230

25 Interpretation and Conclusions ...... 25-231 25.1 Introduction ...... 25-231 25.2 Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements ...... 25-231 25.3 Geology and Mineralization ...... 25-231 25.4 Exploration, Drilling and Analytical Data Collection in Support of Mineral Resource Estimation ...... 25-232 25.5 Metallurgical Test Work...... 25-232 25.6 Mineral Resource Estimates ...... 25-232 25.7 Mine Plan ...... 25-232 25.8 Recovery Plan ...... 25-233 25.9 Infrastructure ...... 25-233 25.10 Environmental, Permitting and Social Considerations ...... 25-233 25.11 Markets and Contracts ...... 25-233 25.12 Capital Cost Estimate ...... 25-234 25.13 Operating Cost Estimate ...... 25-234 25.14 Economic Analysis ...... 25-234 25.15 Sensitivity Analysis ...... 25-234 25.16 Risks and Opportunities ...... 25-234 25.17 Conclusions ...... 25-236 26 Recommendations ...... 26-237 26.1 Introduction ...... 26-237 26.2 Geology ...... 26-237 26.3 Mining...... 26-237 26.4 Metallurgy ...... 26-237 26.5 Environmental ...... 26-238 27 References ...... 27-239

List of Tables Table 1-1: Pit Shell Input Parameters...... 1-8 Table 1-2: Mineral Resource Statement ...... 1-10 Table 1-3: Pit Shell Input Parameters ...... 1-12 Table 1-4: Estimated Capital Cost ...... 1-17 Table 1-5: Operating Costs ...... 1-18 Table 1-6: Copper Price Sensitivity Summary...... 1-20 Table 4-1: Mineral Title Types...... 4-29 Table 7-1: Lithology Summary ...... 7-50 Table 7-2: Structure Summary ...... 7-53 Table 7-3: Mineral Zone Summary ...... 7-57 Table 10-1: Drill Summary Table...... 10-70 Table 11-1: Samples...... 11-76 Table 11-2: Average SG values ...... 11-76 Table 11-3: Control Programs for Each Drilling Campaign...... 11-78 Table 11-4: Check Sample Analysis, MAR 01–16 Campaign ...... 11-79 Table 11-5: Average CuT and CuS, for DDG and RC drilling...... 11-83 Table 13-1: Chemical and Mineralogical Characterization...... 13-88 Table 13-2: Column Height per Sample ...... 13-89

Table 13-3: M1 to M7 Sulphation Tests Results...... 13-90 Table 13-4: Acid Addition in Agglomeration per Sample...... 13-91 Table 13-5:Column Leaching Results Summary...... 13-92 Table 13-6: Geomet I Iso-pH Test...... 13-93 Table 13-7: Iso-pH tests, CuT recovery and acid consumption ...... 13-97 Table 13-8: Total Copper Recoveries used in Block Model and PEA Mineral Feed Plan...... 13-101 Table 13-9: Summary Results CuT Rec. and Acid Consumption Geomet I and II ...... 13-101 Table 13-10: Solubility Block Model by Mineral Sub-Zone (different cut-off grades)...... 13-105 Table 13-11: Summary CuT Rec. and Acid Consumption iso-pH Test Geomet I and III...... 13-111 Table 13-12: Distribution in Mineral Weight (Samples Marimet 1 to 7)...... 13-112 Table 13-13: Head Chemical Characterization Geomet I and II Samples...... 13-113 Table 13-14: Head Chemical Characterization Geomet III Samples...... 13-114 Table 13-15: Geomet III Selected Columns Operating Conditions...... 13-116 Table 13-16: Acid Consumption Breakdown...... 13-121 Table 13-17: Calculation of Equilibrium Chloride Concentration...... 13-123 Table 13-18: Expected Dissolutions Calculations...... 13-124 Table 13-19: Sulphate Balance and Acid Make-up...... 13-124 Table 13-20: Marimaca Industrial Plant Impurities Balance...... 13-125 Table 13-21: Trade-off Analysis...... 13-133 Table 13-22: Modelled Acid Concentration in Drainage at Different Heap Height...... 13-134 Table 13-23: In pit Resources per Mineral Zone...... 13-137 Table 14-1: CuT Raw Sample Data...... 14-142 Table 14-2: CuT Sample Statistics ...... 14-143 Table 14-3: CuS Sample Statistics ...... 14-144 Table 14-4: Grade Caps ...... 14-145 Table 14-5: Correlograms, Adjusted Models CuT According Structural Domain ...... 14-146 Table 14-6: Correlograms, Adjusted Models CuS According Structural Domain...... 14-146 Table 14-7: Density by Mineralization Type ...... 14-147 Table 14-8: Kriging Plan Parameters ...... 14-147 Table 14-9:D85 Direction for Structural Domains ...... 14-147 Table 14-10: Resource Classification ...... 14-150 Table 14-11: Pit Shell Input Parameters ...... 14-150 Table 14-12: Inter Ramp and Overall Slope Angles ...... 14-151 Table 14-13: Mineral Resource Statement ...... 14-152 Table 14-14: Sensitivity of Tonnes, Grades and Contained Metal ...... 14-153 Table 16-1: Input parameters ...... 16-157 Table 16-2: Dilution and Losses (resource model versus mining model) ...... 16-158 Table 16-3: Cut-off Grades Calculation ...... 16-158

Table 16-4: Variable Cut-off Profile Forecast ...... 16-163 Table 16-5: Mine Production Schedule Forecast ...... 16-164 Table 16-6: Plant Feed Forecast ...... 16-164 Table 16-7: Copper Cathodes Production Forecast ...... 16-165 Table 16-8: Peak Fleet Requirements for Pre-Production and Commercial Production ...... 16-168 Table 16-9: Fleet Requirements by Year ...... 16-168 Table 17-1: 2020 PEA Design Criteria ...... 17-181 Table 19-1: Main acid producers in Chile ...... 19-192 Table 20-1: Additional Baseline Studies Requirements for a DIA ...... 20-197 Table 20-2: Preliminary Analysis of Applicability of EIA ...... 20-199 Table 20-3: Environmental Sectorial Permits (PAS) Approved for the Marimaca 1-23 ...... 20-200 Table 20-4: Preliminary Critical Sectorial Permits ...... 20-202 Table 21-1: Capital Cost Summary ...... 21-207 Table 21-2: Initial Capital Estimate Summary Level 1 Major Area ...... 21-207 Table 21-3: Sustaining Capital by Major Area ...... 21-209 Table 21-4: Mine Capital Cost Estimate Summary ($ M) ...... 21-210 Table 21-5: Operating Cost Estimate Summary ...... 21-211 Table 21-6: Mining Operating Cost Estimate Summary ...... 21-212 Table 21-7 Processing Costs ...... 21-213 Table 21-8 Data Sources for Processing Costs ...... 21-214 Table 21-9: Operating Costs - Power ...... 21-215 Table 21-10: Operating Costs - Consumables and Reagents ...... 21-215 Table 21-11: Main crushing and heap leach consumables ...... 21-216 Table 21-12: Reagents ...... 21-216 Table 21-13: Operating Costs - Maintenance ...... 21-217 Table 21-14: Operating Costs - Labour ...... 21-218 Table 21-15: G&A Cost Summary ...... 21-218 Table 21-16: G&A Costs – Contracts ...... 21-219 Table 22-1: Summary of Project Economics ...... 22-223 Table 22-2: Project Cash Flow on an Annualised Basis ...... 22-224 Table 22-3 Sensitivity Summary...... 22-226 Table 22-4: Pre-tax sensitivity ...... 22-227 Table 22-5 Post-tax sensitivity ...... 22-228

List of Figures Figure 1-1: Core Sampling Process ...... 1-5 Figure 1-2: Projected LOM Cash Flows...... 1-20 Figure 2-1: Project Location Plan ...... 2-25

Figure 4-1: Total Mineral Tenure Holdings ...... 4-35 Figure 4-2: Mineral Tenure, Proposed Open Pit Location ...... 4-36 Figure 4-3: Marimaca Project Provisional Easement ...... 4-37 Figure 4-4: Easement Application ...... 4-38 Figure 5-1: Key Regional Infrastructure ...... 5-43 Figure 5-2: Physiography of the General Project Area ...... 5-44 Figure 7-1: Regional Coastal Cordillera Geology ...... 7-47 Figure 7-2: Project Overview (northeast view) ...... 7-48 Figure 7-3: Project Overview (south view) ...... 7-49 Figure 7-4: Sub-Surface Interpreted Geology Plan ...... 7-51 Figure 7-5: Cross-Section NE 100, Showing Litho-Structure (a) and Mineralization (b) ...... 7-52 Figure 7-6: Structural Zones ...... 7-55 Figure 7-7: Sub-Surface Mineralization Map ...... 7-58 Figure 7-8: Cross-Section Showing Mineralization, Section NW 400 ...... 7-59 Figure 7-9: Cross-Section Showing Mineralization, Section NW 650 ...... 7-59 Figure 7-10: Deposit Model Schematic ...... 7-60 Figure 9-1: Examples of Surface Survey Control ...... 9-62 Figure 9-2: Underground Workings ...... 9-63 Figure 9-3: Example Underground Geological Mapping ...... 9-64 Figure 9-4: Surface Road-Cut Channel Chip Sample Location Plan ...... 9-65 Figure 9-5: Underground Channel Chip Sampling Location Plan ...... 9-65 Figure 9-6: Copper Geochemistry ...... 9-66 Figure 9-7: Pole Reduced Ground Magnetic Plan ...... 9-67 Figure 9-8: Cross section with Interpreted Sulphide Zone, Previously Completed Sulphide Drill Results and Vector Inversion Magnetic Anomaly > 0.03 SI ...... 9-68 Figure 10-1: Drill Hole Collar Plan ...... 10-71 Figure 10-2: Example of Drill Hole Survey and BHTV Data ...... 10-72 Figure 11-1: Core Sample Process ...... 11-75 Figure 11-2: Check Sample Regression MAR 01–16 Campaign ...... 11-79 Figure 11-3: Location of Drill Holes used in RC/Core Comparison ...... 11-82 Figure 11-4: Sequence of data entry ...... 11-84 Figure 11-5: Scatter Plot CuT vs CuS ...... 11-85 Figure 13-1: Particle Size Distribution ...... 13-88 Figure 13-2: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-1, M-3 and M-5...... 13-93 Figure 13-3: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-2 and M-4...... 13-94 Figure 13-4: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-6 and M-7...... 13-94

Figure 13-5: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-1, M-3, M-5, M-6 and M-7 ...... 13-95 Figure 13-6: Mini-columns Total Copper Recoveries...... 13-99 Figure 13-7: 1.5 meters Columns Total Copper Recoveries...... 13-100 Figure 13-8: 1.5 meters Columns Net Acid Consumption...... 13-100 Figure 13-9: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Days). .. 13-102 Figure 13-10: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Leaching Ratio)…………...... 13-102 Figure 13-11: CuT Recovery and Net Acid Consumption P90 ½” Geomet II Columns (vs Days).13-103 Figure 13-12: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Leaching Ratio)…………………...... 13-103 Figure 13-13: Total Copper Recovery and Net Acid Consumption Kinetics for a 4 meters Column (Model)……………………...... 13-104 Figure 13-14: Net Acid Consumption P90 ½” Geomet I Columns vs Added Acid...... 13-107 Figure 13-15: Net Acid Consumption P90 ½” Geomet II Columns vs Added Acid...... 13-107 Figure 13-16: Mine Plan Solubility Ratio by Mineral Subzone...... 13-108 Figure 13-17: AAC vs Solubility Ratio...... 13-109 Figure 13-18: iso-pH Geomet I, II & III Gangue Acid Consumption vs Solubility Ratio...... 13-110 Figure 13-19: Total Copper Recovery Geomet II Selected Columns...... 13-116 Figure 13-20: Total Acid Consumption Geomet II Selected Columns...... 13-117 Figure 13-21: Net Acid Consumption (Gangue) Geomet II Selected Samples...... 13-117 Figure 13-22: Evolution of FeT Concentration in Geomet II Selected Columns...... 13-118 Figure 13-23: Evolution of FeT dissolution Geomet II Selected Columns...... 13-119 Figure 13-24: Aqueous Phase Chloride Balance Diagram...... 13-121 Figure 13-25: Crushed Material Particle Size Distribution...... 13-127 Figure 13-26: ROM Particle Size Distribution...... 13-127 Figure 13-27: Effect of Height on Marimet-1 Columns...... 13-128 Figure 13-28: Effect of Height on Marimet-2 Columns...... 13-129 Figure 13-29: Effect of Height on Marimet-3 Columns...... 13-129 Figure 13-30: Effect of Height on Marimet-4 Columns...... 13-130 Figure 13-31: Effect of Height on Marimet-5 Columns...... 13-130 Figure 13-32: Effect of Height on Marimet-6 Columns...... 13-131 Figure 13-33: Effect of Height on Marimet-7 Columns...... 13-131 Figure 13-34: Total Copper Recovery Kinetics at Different Heap Heights (BROC/ATA Model). .. 13-132 Figure 13-35: Net Acid Consumption Kinetics at Different Heap Heights (BROC/ATA Model). ... 13-133 Figure 13-36: Simplified Leach Circuit Balance Years 1 to 5...... 13-135 Figure 13-37: Simplified Leach Circuit Balance Years 6 to 12...... 13-136 Figure 14-1: 3D Litho-Structural Model ...... 14-141 Figure 14-2: 3D Mineral Zones Model ...... 14-141

Figure 14-3: Details of the Copper Mineral Zones from 3D Wireframes ...... 14-142 Figure 14-4: Mineral Zones Solid (Atahualpa Domain) ...... 14-147 Figure 14-5: Block Model Cross Section ...... 14-148 Figure 14-6: Block Model Cross Section ...... 14-149 Figure 14-7: Geotechnical Zones ...... 14-150 Figure 16-1: Geotechnical Slope Domains ...... 16-157 Figure 16-2: Final Pit Design...... 16-160 Figure 16-3: Open Pit Development Phases ...... 16-161 Figure 16-4: Final Pit and Material Storage Facilities ...... 16-166 Figure 17-1: General Block Diagram ...... 17-171 Figure 17-2: Crushing Plant Flowsheet for Phase 1...... 17-173 Figure 17-3: Crushing Plant Flowsheet for Phase 2...... 17-174 Figure 17-4: ROM and Heap Leaching Diagram ...... 17-176 Figure 17-5: SX Schematic Configuration Phase 1 & 2...... 17-178 Figure 17-6: EW Diagram ...... 17-178 Figure 18-1: Proposed Infrastructure Layout Plan...... 18-186 Figure 18-2: Crush Heap Leach and Ripios Storage Facilities...... 18-187 Figure 18-3: Site Project Electrical Network ...... 18-188 Figure 18-4: Schematic Water Supply and Distribution Network ...... 18-189 Figure 18-5: Non-Paved B-240 Road with Bischofita Covering ...... 18-189 Figure 18-6: Gravel Road which leads to the Marimaca Plant Site ...... 18-190 Figure 22-1: Projected LOM Cash Flows...... 22-222

1 Summary

1.1 Introduction

Marimaca Copper Corporation (Marimaca Copper) requested Ausenco Engineering Canada Inc (Ausenco) to compile a technical report (the Report) on the results of a preliminary economic assessment (2020 PEA) on the Marimaca Copper Project (the Project), located in Antofagasta Province, Chile.

1.2 Terms of Reference

This Report supports the disclosure of the results of the PEA in the news release dated 4 August by Marimaca Copper, entitled “Exceptional PEA Results for the Marimaca Project including $524 million post-tax real NPV8 and 33.5% IRR”.

Companies who contributed to the PEA, in alphabetical order, include:

 Ausenco  Jo & Loyola Consultores de Procesos  NCL Ingeniería y Construcción.

All measurement units used in this Report are metric unless otherwise noted. Currency is expressed in United States (US) dollars ($). The Chilean currency is the peso. The Report uses US English.

1.3 Project Setting

The Project is located in Chile’s Antofagasta Province, Region II, approximately 45 km north of the city of Antofagasta and approximately 1,250 km north of Santiago. The coastal cities of Antofagasta and Mejillones can be accessed from the Project via a well-maintained multi-lane highway. The regional Cerro Moreno airport is located 45 km from the Project. Marimaca is accessible by maintained dirt roads, either from the Cerro Moreno Airport or the Route Antofagasta–Tocopilla.

The Project is located about 39 km north of the Tropic of Capricorn. The climate is dry, and the average annual rainfall is 2–3 mm as an annual average over a 24-hour period. However, rare intense rainfall events of 12–30 mm in a short period can occur. It is expected that any future mining operations will be conducted on a year-round basis.

The Marimaca Project is situated within the Cordillera de la Costa, a mountainous area, with relief ranging from 400–1,000 m elevation. Vegetation is minimal outside of inhabited valleys where irrigation and the “Camanchaca” sea mist that comes from the nearby ocean, support vegetation that is capable of withstanding the desert environment. The Mejillones and Naguayán quebradas drain the Project area from east to west and south to north, respectively.

1.4 Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements

The Project is held 100% by Marimaca Copper. Marimaca Copper has four Chilean subsidiaries that have actual, or eventual, rights over various mining properties that make up the Project:

 Compañía Minera Cielo Azul Limitada (MCAL)

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 Compañía Minera NewCo Marimaca (Newco Marimaca)  Compañía Ivan SpA (Compañía Ivan)  Minera Rayrock Limitada (Rayrock).

There are several agreements and options in force over the mineral tenures. There are also staged payments that must be met for certain of the agreements. As at the report effective date, these had been met as they came due.

Through direct acquisition and option agreements, Marimaca Copper holds 100% of 385 granted concessions and concession applications, covering an area of 74,248 ha. These are, for convenience, divided into two packages:

 Marimaca area: 265 claims (62,568 ha) held in the names of the following Marimaca Copper`s subsidiaries and/or third party companies (according to the Option Agreements): Compañía Minera Cielo Azul Limitada, Compañía Minera Naguayán SCM, Sociedad Contractual Minera NewCo, Sociedad Legal Minera Rodeada Uno, Proyecta S.A. and Sociedad Contractual Minera Proyecto  Iván area: 120 claims (11,680 ha) held in the names of Minera Rayrock Limitada or Compañía Minera Cielo Azul Limitada.

The surface land in the Commune of Mejillones is owned by the State and managed and represented by the Ministerio de Bienes Nacionales. Marimaca Copper has developed a strategy to obtain the necessary surface rights to cover mine, plant, tailings storage facilities and transmission lines. Marimaca Copper holds one easement and a second has been applied for.

Marimaca Copper holds no water rights in the Project area.

The Project is subject to several NSR royalties, which range from 1–2%. Marimaca Copper has the right to buy back some of the NSR percentages for in all of the royalty agreements.

1.5 Geology and Mineralization

The Marimaca deposit appears to be a new deposit style as it does not readily conform to any of the major published geological models. It has affinities with vein-style iron ore–copper–gold (IOCG) deposits and “manto-type” mineralization styles.

The regional geology consists of Jurassic volcanic and intrusive rocks, with minor older Triassic acid volcanic occurrences, intermediate intrusive units, sediments and Palaeozoic metamorphic rocks. The main regional structure is the Atacama Fault System (AFS) which forms the eastern border of the Coastal Cordillera in the region. To the west of the AFS, the Naguayán Banded Fracture Belt (NBFZ) forms an approximately 15 km long and 3 km wide zone of sub-parallel fractures that trend north–south to north–northeast, dipping at 40–60º to the east or southeast. The rhyodacitic-composition regional dyke swarm end members are preferentially associated with the NBFZ.

The local geology consists of monzonite, diorite and monzodiorite intrusions correlated with the Naguayán Plutonic Complex, and dykes belong to the regional bimodal dyke swarm. Alteration related to mineralization consists of development of actinolite and magnetite, with lesser chlorite, sericite, and hematite, that is associated with veins, feeders, and banded rocks. The diorite unit has undergone biotite–magnetite replacement. A major alteration feature is the so-called hanging wall alteration front, which controls the mineralization toward the “top” of the parallel-fractured monzonite and diorite units and the mineralization associated with dikes. Hematite, in association with sericite and pyrite, forms band replacements and veins. The feeders that crosscut the alteration limit displays a well-developed “argillic” halo.

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Supergene oxidation has resulted in the formation of limonite, clays, and copper oxides. Goethite and hematite stain fractures or fill open fractures. Iron oxides can be associated with clay, gypsum and rock flour within fault gouge. Jarosite can occur in the halo of some of the northwest-trending faults zones in the southern part of the Project area.

The Marimaca deposit consists of a supergene copper blanket (oxides and enriched sulphides). The oxide zone is exposed on surface, and has dimensions of about 1.4 km long, 400–600 m in width, and a thickness that ranges from 150–350 m. Mineralization in the Marimaca area has formed in association with the fractures of the NBFZ, and in association with north–south to northeast-oriented “feeder” zones or vein-like structures. It consists of chalcopyrite, moderate to minor pyrite, minor bornite, covellite and primary chalcocite forming massive bodies, zones of replacement and fracture fills. The copper oxide blanket overlies the primary mineralization, which resulted from the alteration of a secondary sulphide- enriched blanket that produced a chemical zonation from brochantite to atacamite at the core of the alteration zone, with a surrounding outboard halo of predominantly chrysocolla, followed by a wad halo.

1.6 History

Small-scale artisanal mining activities were undertaken in the general Project area from the 1990s to mid-2000s. Underground workings are at maximum of 100 m deep.

No modern exploration was undertaken prior to Coro Mining Corp (Coro), a predecessor company to Marimaca Copper, began to assemble the Project ground holdings. The Marimaca deposit was identified in 2016, following a reverse circulation (RC) drill program. Coro subsequently detailed geological surface mapping and rock chip sampling, additional RC drilling, core drilling to support geotechnical and geometallurgical studies, metallurgical testwork, and mining studies. An initial resource estimate was completed in January 2017, and Mineral Reserves were first estimated in 2018.

Coro completed a feasibility study in June 2018 (the 2018 Feasibility Study). This study considered an open pit mining using conventional equipment to feed a refurbished process plant, referred to as the Ivan plant, that would have the capability of producing 10,000 t of cathode copper per year.

The 2018 Feasibility Study is not currently considered to be the preferred Project development option. Marimaca Copper is not treating the study as current, and the Mineral Reserve estimates are also not considered to be current. However, some of the baseline information generated in support of the 2018 Feasibility Study is used in the 2020 PEA.

An Environmental Impact Statement (Declaración de Impacto Ambiental, DIA in the Spanish acronym) and the Mining Safety Regulations and Environmental Qualification Resolution (RCA) was approved on 5 July 2018.

Mineral Resources were updated in late 2019, and that estimate is discussed in Section 14. Coro changed its name to Marimaca Copper in May 2020. A PEA was completed in 2020, and the results of that study are summarized in this Report.

1.7 Drilling and Sampling

A total of 346 RC holes (82,234 m) and 39 core holes (8,976 m) have been completed. The RC drilling was completed by PerfoChile Ltda, with drill hole diameters from 5¾” to 5 ⅝”. Core drilling was performed at PQ (85 mm core diameter), HQ (63.5 mm) and HQ3 (61.1 mm) sizing by Superex, a Chilean drilling contractor. Collar locations were at 100 m or 50 m spacing, as dictated by topography and the ability to construct drill platforms and pad accesses. Drill holes were typically oriented at either 220º or 310º. However, some holes were oriented at 270º to

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test high-grade zones controlled by north–south-trending feeders and veins. Drill holes were angled at -60º.

All drill holes were geologically logged using digital data capturing methods. Information logged included lithology, structure, alteration and mineralization based on drilling intervals, recoveries and analytical results. RC drill cuttings were cleaned prior to geological description. The first pass logging recorded lithology, structure and alteration. Oxide mineralogy was relogged when assay data were received. A chip tray record of the drill holes was stored. Core holes were initially logged for lithology, structure and alteration. When assay data were available, the data were correlated with the logged mineralization. Rock quality designation (RQD) data were also recorded. In addition to measuring deviations, most of the holes were surveyed using an optical televiewer (OPTV or BHTV), which continuously recorded structures and orientation measurements down the length of the drill hole.

Recovery data were recorded for the RC and core drill holes. Measured recoveries are over 95% for both types of drilling, without significant variations and recovery is unrelated to copper grades.

Local contractors carried out the supervision of the drilling operation. An experienced surveyor recorded the collar locations. Collars are marked in the field using PVC pipe and a metal plate with the name of the drill hole. Down hole surveys were completed by either Data Well Services or Comprobe. The instrumentation includes Giroscope NSG for survey and Optv, Hirat and Caliper probes for video. All readings were continuous to the end of the holes.

In the opinion of the QP, the quantity and quality of the lithological, collar and down-hole survey data collected in the drilling programs are sufficient to support Mineral Resource estimation.

Continuous rock sampling along exposures in road cuts was completed during 2018–2019. Samples consisted of continuous chip-channel samples at 2 m intervals for a total 5,120 m of sampling. Detailed and systematic rock sampling was extended to the underground mine workings, using the same criteria and methods from the surface samples. A total of 8,028 m was sampled from the artisanal mine workings. RC drill holes were sampled on a 2 m continuous basis, with all the dry samples riffle split on-site and one quarter sent to the laboratory for preparation and assaying. The description of core sampling is in the Figure 1-1.

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Figure 1-1: Core Sampling Process

Note: Figured prepared by Marimaca Copper. 2020

Specific gravity (SG) was measured systematically on core samples at approximately 20 m intervals. The core samples ranged in length from 7–26 cm. The SG was determined on wax- coated core using a water displacement method where the core was weighed in air, and then in water. Measurements were performed by the Mecánica de Rocas (Rock Mechanics) laboratory at Calama.

Initially, the primary sample preparation and assay laboratory was Geolaquim Ltda. (Geolaquim) in Copiapó. Geolaquim held ISO 9001:2000 accreditations for selected analytical techniques and was independent of Marimaca Copper. From the 2017 infill drilling campaign onward, samples were prepared in the Andes Analytical Assay Ltda (Andes Analytical) Calama laboratory and assayed by the Andes Analytical laboratory in Santiago. Andes Analytical holds ISO 9001:2008 accreditations for selected analytical techniques and is independent of Marimaca Copper. Andes Analytical acted as an umpire laboratory for the 2015 drill campaign. Marimaca Copper did not employ an umpire laboratory for the remainder of the campaigns.

Samples were prepared by drying, crushing to 85% passing 10 mesh, and pulverizing to 95% passing 150 mesh. Total copper (CuT) was analysed using a four-acid digest followed by an atomic absorption spectroscopy (AAS) finish. Soluble copper (CuS) was analysed using a single acid digest, followed by AAS. The analytical quality assurance and quality control (QA/QC) programs involved the use of pulp duplicates for precision analyses, standard reference materials (SRMs) and check samples for accuracy analyses.

To validate the use of data from the core and RC exploration campaigns, a comparison was undertaken of 11 drill holes that were within a maximum of 10 m separation. The average CuT and CuS grades from the core and RC drilling were compared. In the QP’s opinion, these averages are very similar.

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The sample preparation and analytical procedures used by the independent laboratories are in line with industry norms. Sample security practices are acceptable. The analytical data are considered acceptable to support Mineral Resource estimation.

1.8 Data Verification

The exploration and production work completed by Marimaca Copper was conducted using internally documented procedures and involved verification and validation of exploration and production data prior to use of the data in geological modelling and Mineral Resource estimation.

NCL staff performed site visits, and observed core and RC drill sites, collars, and collar monumenting. NCL examined core from several RC and DDH drill holes, finding that the logging information accurately reflected the inspected core and cuttings. The lithology and grade contacts checked by NCL matched the information reported in the core logs. The QP reviewed the drill hole database and concluded that it was adequate to support block models, and Mineral Resource estimates. NCL visually compared the block models against the informing samples on plans and sections to confirm that the estimations were generally an adequate representation of the distribution of the copper mineralization.

The QP is of the opinion that the data verification programs completed on the data collected from the Project are consistent with current industry practices and that the database is sufficiently error-free to support the geological interpretations, Mineral Resource estimation and preliminary mine planning.

1.9 Metallurgical Testwork

Metallurgical testwork was completed in three campaigns, Geomet I, II and III. Geomet IV is underway at the Report effective date. Most of the mineralized material is planned to be crush leached, using crushing, agglomeration, leaching, solvent extraction (SX) and electrowinning (EW). Low-grade mineralized material will be sent to a run-of-mine (ROM) leach.

1.9.1 Crush Heap Leach

Preliminary tests evaluated parameters such as mineral subzone, agglomeration conditions, granulometry, column height, irrigation rates and acid concentration in the irrigation solution. Five mineralization subzones were defined, listed below with their predicted leaching recoveries (calculated over the total copper content of the material that will be processed):

 BROC/ATA: classified as oxide; copper in the form of brochantite and atacamite; 82% recovery  CRIS: classified as oxide; copper in the form of chrysocolla; 77%  WAD: classified as oxide; copper in the form of wad; 65%  MIX: classified as sulphide; mixed oxide/sulphides; 62%  ENR: classified as sulphide; sulphides; 49%.

The overall copper recovery prediction for the combined mineralized subzones is 76%.

Acid consumption is predicted to be 40kg/t for oxide mineralization (BROC/ATA, CRIS and WAD) and 35 kg/t for sulphide mineralization (MIX and ENR). The carbonate content is relatively low and accounts for about 30% of the expected overall acid consumption. The other major acid consumers that will be dissolved are iron and aluminium, which are estimated to represent about 30% and 20% of the overall acid consumption, respectively.

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A particle size distribution after crushing of P90 <1/2” with a content of fines of less than 12% -100# Tyler is considered applicable to the process design.

Agglomeration will be conducted with raffinate solution and concentrated sulphuric acid at the rate of 15–30 kg/t. Later in the proposed mine life, addition of NaCl in the agglomerate is assumed to be used at the rate of 15 kg/t to improve sulphide oxidation during the resting period. Resting time without salt addition is forecast at about 2–3 days. When salt is added, a resting time of 15–30 days will be required. The chloride leaching process is proposed for the later mine plan with the chloride base level defined by the use of seawater and the chloride present in the mineralized material to support the recovery of some of the copper present in the sulphide subzones.

A trade-off analysis between heap height and the area needed for a crush heap leach pad was conducted to determine the preferred combination and leaching time (residence time). The analysis suggested that a 4 m high heap pad and with a total leaching area of 500,000 m2 was the preferred configuration. This combination would result in a leach cycle of 95 days.

An irrigation rate of 12 L/hr/m 2 add by sprinklers was recommended for the crush heap leaching process.

The oxidized mineralization subzones (BROC, CRIS and WAD) are planned to have three days of resting time and 92 days of irrigation, completing a leaching cycle of 95 days. The sulphide mineralization subzones (MIX and ENR) will have 30 days of resting time and 110 days of irrigation, to complete a leaching cycle of 140 days.

For the first part of the 2020 PEA process plan (Years 0 to 5), MIX and ENR mineralization will be mixed with WAD and treated as if they were oxides without the need of salt addition. The latter part of the PEA process plan (Years 6 to 12), oxide and sulphide subzones are planned to be processed in separate leach pad modules.

It is estimated that the plant will operate with high dissolved impurity levels, including chloride (63–73 g/L), iron (40 g/L) and sulphates (200 g/L). As a result, an SX plant with two washing stages was considered for the 2020 PEA, to avoid impurities to report to electrowinning.

1.9.2 ROM Leach

The ROM feed will predominantly be WAD material, which is forecast to achieve a 40% total copper recovery.

The ROM material is recommended to be stacked in 10-m layers, with a leaching cycle of six months, 10 g/L of sulphuric acid in irrigation and a continuous application rate of 5 L/hr/m 2 using drippers.

1.10 Mineral Resource Estimation

Estimation was conducted using commercially available Leapfrog and GEMS software. The primary support for the Mineral Resource estimate is data collected from the 2016, 2017 and 2018 drill programs. All samples without a grade value in the database were eliminated prior to resource modelling. Values labelled <0.001% were changed to 0.001% for both CuT and CuS.

Lithology, structure, and mineralization were interpreted on approximately 50 m-spaced cross-sections that were oriented northeast, northwest, and east–west at 1:1,000 scale. The mineralization interpretations are used as the domains for resource estimation. The domains are brochantite, chrysocolla, enriched, wad CuT ≥0.1%, wad CuT <0.1%, and chalcopyrite. Samples from the database were coded based on the 3D solid codes, based on the solid that contained the sample centroid.

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A review of the sample lengths was conducted to determine if compositing was warranted. This check showed that only three samples within the modelled solids had a length of <1 m. All the remaining samples were 2 m in length. No compositing was conducted as a result. Review of CuT and CuS domain boundaries indicated that all contacts should be treated as hard boundaries. Grade capping was used in all domains to restrict outlier CuT and CuS assay values. In addition, a 5 m search ellipse was used during estimation to locally restrict the samples with grades above the cap value. Prior to estimation, all SG outliers were removed from the 562 SG determinations available. Average SG values were assigned to each of the estimation domains.

Correlograms were computed for five zones considered to be structurally separated (Tarso, Atahualpa, Atahualpa–La Atomica, La Atomica and Marimaca) to provide search distances to be used in estimation. A percentage model was run in GEMS for each mineralized domain. The block size was 5 m x 5 m x 5 m in size, rotated to N 40º E to match the geological section interpretations. The remaining blocks below the surface topography were coded as waste. Grade was interpolated using ordinary kriging (OK) and a series of four passes. Pass 1 resulted in Measured Mineral Resources, Pass 2 in Indicated, and Pass 3 in Inferred. All blocks estimated in the fourth pass were considered unclassified. Model validation used a combination of visual inspection, a nearest-neighbour (NN) analysis, and trend analyses.

Reasonable prospects of eventual economic extraction were addressed by applying a resource pit shell defined using Whittle software and the parameters outlined in Table 1-1. Pit slope angles were derived from a study carried out by Ingeroc S.A, (Ingeroc) in 2019.

Table 1-1: Pit Shell Input Parameters.

Item Unit Value Mining cost $/t 2.00 Heap leach process cost (including G&A and SX/EW cost) $/t 9.00 ROM process cost including G&A $/t 2.50 Selling cost $/lb Cu 0.07 Heap leach recovery % 76 ROM recovery % 40 Pit slope angle Degrees 44–46 Cu price $/lb Cu 3.00

1.11 Mineral Resource Statement

Mineral Resources and Mineral Reserves are reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 2014; the 2014 CIM Definition Standards) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines 2019 edition (2019 CIM Best Practice Guidelines).

Mineral Resources are reported on a 100% basis. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. The Qualified Person for the estimate is Mr Luis Oviedo, CMC, an NCL employee. Mineral Resources are provided in Table 1-2.

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the estimated domains; changes to metallurgical recovery assumptions; changes to the input assumptions used to derive the conceptual open pit used to constrain the estimate; changes to the cut-off grades applied to the estimates; variations in geotechnical, hydrogeological and mining assumptions; forecast dilution; and changes to environmental, permitting and social license assumptions.

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Table 1-2: Mineral Resource Statement

Contained Metal

Tonnes Grade CuT CuS Classification (t x 1,000s) Tonnes Tonnes CuT (%) CuS (%) (kt) (kt) Measured

Brochantite 10,890 0.76 0.55 82 60 Chrysocolla 4,918 0.59 0.45 29 22 Enriched 1,176 0.75 0.17 9 2 Mixed 475 1.02 0.26 5 1 Wad 3 0.27 0.17 0 0 Wad GT 0.1 % 3,260 0.34 0.2 11 7 Total Measured 20,721 0.66 0.44 136 92 Indicated

Brochantite 24,719 0.68 0.49 167 121 Chrysocolla 9,581 0.5 0.37 48 36 Enriched 3,468 0.69 0.14 24 5 Mixed 1,177 0.86 0.21 10 2 Wad 36 0.26 0.14 0 0 Wad GT 0.1% 10,686 0.32 0.18 34 19 Total Indicated 49,666 0.57 0.37 284 184 Measured and Indicated

Brochantite 35,609 0.7 0.51 250 181 Chrysocolla 14,499 0.53 0.4 77 58 Enriched 4,644 0.7 0.15 33 7 Mixed 1,652 0.9 0.22 15 4 Wad 38 0.26 0.14 0 0 Wad GT 0.1% 13,945 0.32 0.19 45 26 Total Measured and 70,387 0.6 0.39 420 276 Indicated Inferred

Brochantite 17,618 0.63 0.42 111 74 Chrysocolla 9,978 0.47 0.33 47 33 Enriched 2,193 0.63 0.13 14 3 Mixed 3,661 0.63 0.15 23 6 Wad 43 0.27 0.09 0 0 Wad GT 0.1% 9,521 0.31 0.17 30 16 Total Inferred 43,015 0.52 0.31 224 132

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Notes to accompany Mineral Resource Table:

1. Mineral Resources are reported using the 2014 CIM Definition Standards. The Qualified Person for the estimate is Mr Luis Oviedo, CMC, an NCL employee. Mineral Resources have an effective date of 15 January 2020 and are reported on a 100% basis.

2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

3. Mineral Resources are reported within a constraining pit shell developed using Whittle™ software. Input assumptions include a copper price of $3.00/lb, mining recovery of 100%, metallurgical recoveries of 76% for CuT leaching and 40% for Cu ROM leaching, a mining cost of $ 2.00/t, processing costs of $9.0/t for leach processing and $2.50/t for the ROM process. General and administrative costs are included in the processing costs.

4. Base case Mineral Resources are reported using a 0.22% total copper (CuT) grade. Tonnages contained in the chalcopyrite subzone are not included in the tabulation.

5. Wad GT0.1% unit corresponds to the “high grade Wad”, which was separated from the low-grade Wad to refine the geological model, better reflecting the grade distribution within the deposit.

6. Mineral Resource contained copper estimates have been rounded as required by reporting guidelines.

1.12 Mining Methods

Open pit mining is contemplated, using equipment conventional to the industry.

The open pit area was divided into three geotechnical zones, with pit slope angles that range from 42–52º. Mining dilution, based on a cut-off grade of 0.2% CuT is assumed to be 2.3% for tonnes, and a contained copper loss of 4.6% will result.

Eight pit phases are planned. phase 1 targets the material with the highest grade in the central area, down to 920 masl. phases 2 and 3 are successive expansion to the north, down to 960 masl and 870 masl, respectively. phase 4 is an almost independent pit at the northern area of the deposit with an exit to the north and a connection with phase 3 for exiting to the primary crusher to the south. This phase will extend to the 890 masl. phase 5 is an expansion to the west of the main pit, to 830 masl. phases 6 and 7 are final expansions to the south and west, respectively to 890 masl and 830 masl. phase 8 corresponds to the final expansion of the north pit, to 880 masl.

A road width of 30 m was selected to accommodate trucks up to 190 t. NCL used a 10% road gradient which is common in the industry for this type of truck. The 2020 PEA mine plan is designed with 10 m benches stacked to 20 m (i.e. double benching) for the geotechnical Zone 1 (East wall). Mining costs are based on blasting 10 m benches for every material type. Additional 20 m wide safety berms were included in the design when the slope height exceeds 150 m, in accordance with geotechnical recommendations.

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Table 1-3: Pit Shell Input Parameters

Item Unit Value Copper price $/lb 3.0 Mine $/t mined 2.10 Mineralized material haulage $/t processed 0.48 Crush Heap leach $/t processed 4.33 Crush Heap leach $/lb 0.25 G&A $/t processed 2.00 ROM Dump leach $/t ROM 2.54 ROM Dump leach $/lb 0.25 Selling cost $/lb 0.07

The mine plan was tailored toward a copper cathode production rate of 40,000 t/y. An initial pre-stripping period of 4.0 Mt would be required to expose sufficient mineralised material to start commercial production in Year 1. The mineralised material mined during pre-stripping will be stockpiled in the stockpile area and will make up part of the Year 1 plant production. The total stockpiled for later re-handling during Year 1 will amount to 139 kt, plus 32 kt of low- grade material. The pre-stripping period will be approximately three months. Three separate mining rates will be used during commercial production. An initial three-year period will mine at a rate of 14.5 Mt/y. This will be followed by a two-year period that will mine at a rate of 18.54 Mt/y, which will meet the initial plant throughput capacity of 5.4 Mt/y. To meet the second plant throughput capacity rate of 9.0 Mt/y a total mining rate of 23.5 Mt/y is required for the remainder of the mine life.

Two waste rock storage facilities area (WRSFs), will be located to the west (WSFN) and south (WSFS) of the pit. A ROM pad area was designed in a flat valley, located in between the WRSFs, where the ROM leach process will take place. The leaching of this low-grade material is planned in 10 m lifts. The mine plan assumes that 42.3 Mt are placed in the facility. The life of mine (LOM) plan stockpiles low-grade material for later re-handling at the end of the LOM to the primary crusher for crush leaching. The low-grade stockpile was designed at the toe of the WSFS and will accommodate 1.3 Mt.

The drilling equipment will consist of diesel units capable of drilling 7⅞” diameter holes in all material types.

The major equipment was selected based on the mine production schedule, nine months of pre-production and approximately 12 years of commercial mining operations. The pre- production period will include an initial pioneering period estimated at six months for preparing initial roads and bench openings and storage material facilities, followed by a pre-stripping period estimated to be three months long. The total material mined during pre-stripping will be 4 Mt. Re-handling of material will be required in Year 1 for material mined during pre- stripping to meet the plant feed requirements. The mining operation will use 22 m 3 hydraulic excavators, 23 m3 front-end-loaders and trucks with a capacity of 150 t. This type of equipment can achieve the required productivity for an annual total material movement of 23.5 Mt. The fleet will be complemented with drill rigs for material delineation. Auxiliary equipment will include track dozers, wheel dozers, motor graders and a water truck. The mine fleet will also include the necessary equipment to re-handle the material from the stockpiles to the primary crusher. This operation will be carried out using a front-end loader and the same 150 t trucks used in the open pit.

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1.13 Recovery Methods

The Marimaca Project will operate a conventional salt acid leaching process consisting of a comminution circuit, crush leach (HL) and ROM leach facilities, SX and EW to produce Grade- A copper cathodes. All leaching will be performed using seawater-based process solutions, with sulphuric acid and salt addition to both acid-leach the copper oxide mineralization and chloride-leach the sulphide copper mineralization sent to crush heap leaching.

Water devoid of chloride for SX/EW requirements will be provided by a dedicated reverse osmosis (RO) plant. The brine RO plant reject stream will be recovered as process water, hence providing additional chloride to the process and making full use of all available water to meet process needs.

The SX plant was designed to operate with high levels of chloride present in the pregnant leach solution (PLS) and includes two organic washing stages that will allow for a low and manageable transfer of chloride to EW through entrainment.

As explained in the sections before the mine plan assumes two mining phases. Phase 1 will run from Year 1 to Year 5 will see primarily oxide mineralization being sent to the crush heap leach at a processing capacity of 5.4 Mt/y. This initial period is expected to see minimal mining of sulphide copper mineralization. The second mine phase will run from Year 6 to Year 12 and assumes that 9 Mt/y of mineralization will be sent to the crush heap leach. The material will still be dominated by oxide copper minerals, but there will be a higher proportion of sulphide copper mineralization, including mixed oxide-sulphide mineralization. Phase 2 of the mine plan requires an expansion of the crushing and leaching facilities. However, the other plant facilities such as the SX/EW units are sized for phase 2 capacity from the start.

The addition of salt is only considered necessary for phase 2 of the mine plan; chloride build up in the leaching solutions is considered sufficient to enhance recovery from the minor copper sulphide fractions during the first stage of the mine plan.

Facilities for copper cathode production will have a nominal capacity of 40,000 t/y Cu. Full cathode production will be achieved during the first phase of the mine plan from processing high-grade mineralized material.

The second phase will treat lower-grade mineralization, requiring a capacity increase to meet the proposed cathode production tonnage from the EW circuit. The design considers an installed power capacity of 30 MVa, with a peak power consumption of 155 GWh per year occuring at year 6, when the second phase starts.

Water requirements are 1,612,000 m³/y for phase 1 and 2,558,000 m³/y for phase 2.

The assumed mine life is 12 years. Mineralization that will be sent to the crush heap leach facility will be crushed at the crushing plant, totals 88,586 kt of copper-bearing mineralization over the LOM.

For phase 1 of the mine plan, which includes a lower capacity first year due to ramp-up considerations, an average of 5,130 kt/y of feed will be delivered during that five-year period, at an average copper grade is 0.78%. Phase 2 will average of 8,991 kt/y including a final year of slightly lower feed at an average copper grade of 0.49%. Recoveries will be about 79% for the first phase of the mine plan, reducing to approximately 74% on average during the second stage.

The crush heap leach plant is designed to process a nominal of 5,400 kt/y for phase 1 of the mine plan, equivalent to a daily balance tonnage of 14,795 t/d (with 365 d/y), consistent with the mine plan for Year 2 to Year 5 . For phase 2 (Year 6 to 12), nominal capacity will be 9,000 kt/y, equivalent to a daily balance tonnage of 24,658 t/d.

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Total copper cathode production is estimated to be approximately 430 kt of cathodes during the LOM, which includes both copper metal recovered from the heap leach and the ROM leach.

1.14 Project Infrastructure

Planned infrastructure will include:

 Road network: The road network includes connections from the open pit to the WRSFs, main processing area, crush leach facilities, ROM leach facilities, maintenance complex, and administrative facilities.  Processing plants: Crushing plant, agglomeration plant, and SX/EW facilities, tank farm, as well as salt and acid storage system.  Conveyor systems: Overland conveyor from the agglomeration plant to the heap leach pad area, a transfer conveyor with tripper car, mobile (grasshopper) and radial stacking conveyors.  Heap leach facilities: On/off acid heap, irrigation system, drainage system for pregnant leach solution (PLS) and intermediate leach solution (ILS) and process ponds.  ROM leach facilities: Permanent acid heap, irrigation system and a drainage system.  Solutions ponds and pumping system: PLS, ILS and raffinate ponds, emergency ponds for the spent rock (ripios) and crush leach facilities and a seawater pond  WRSFs: Two facilities, north and south  Administration building: Offices for mine management and supervisory staff, human resources, accounting, procurement, information technology, and safety staff.  Maintenance workshop: Truck shop, warehouse, and laboratory.  Electrical substation: For the main 110 kV line,  Fuel storage: Tank farm with storage tanks.  Process control system  Communications system  Water supply: potable and process.

Power will be taken from the national grid. The most convenient connection would be with the 110 kV line that follows the B240 road and is about 7 km north of the proposed plant site. For the purposes of the 2020 PEA it was assumed that a tap-off from that line will be permitted. A 7 km, 110 kV line will be built from the tap-off point to the main substation, which will be placed close to the SX/EW plant. From the main substation power will be distributed to the user centers via 23 kV overhead lines.

The water demand is assumed to be supplied by Aguas de Antofagasta S.A. (ADASA), a major Chilean water supplier, are at an expected rate of 1,612,000 m 3/y year for phase 1. phase 2 will need 2,558,000 m 3/y. The make-up water is considered to be extracted by ADASA from an existing seawater pipeline, which also follows the B-240 road. ADASA will deliver the water into Marimaca’ s seawater pond. A reverse RO plant will be required to produce the water quality needed in the SX/EW facilities, and a second RO plant will be installed for the administration building.

The installation of an operational man camp is not considered in this PEA due to the proximity of the project to Mejillones and Antofagasta, it is assumed that the majority of workforce will come from these cities.

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1.15 Environmental, Permitting and Social Considerations

1.15.1 Environmental Considerations

Marimaca Copper received an Environmental Impact Declaration (DIA in the Spanish acronym) in July 2018. The main infrastructure approved in this DIA included: mine pit, WRSF, mineralization stockpile, auxiliary installations (shops, offices, waste management, etc.), and an explosives magazine. The original Marimaca Project considered mineral extraction from the Marimaca 1-23 Claims Project (Marimaca 1-23) and the use of the existing processing plants and auxiliary installations in the Rayrock facilities (Ivan Plant).

Baseline studies for the Marimaca 1-23 DIA were completed within a surface area of 147 ha. This comprised the original Marimaca 1-23 Claims Project area, and depending on the study, additionally covered the area representing an indirect effects study area. Baseline studies included the following:

 Physical environment: climate, meteorology, air quality, noise, natural hazards, soils, hydrology, hydrogeology.  Biotic environment: fauna and flora  Human environment: setting, heritage, archaeology; and visual landscape.

The 2020 PEA represents an expansion of the original Marimaca 1-23 Claims Project and assumes construction of a new processing plant and auxiliary facilities to be located 5 km west of the proposed open pit. This change was evaluated in a 2020 Options Study performed by GEM Gestion y Economia Minera Ltda and it was preferred over the existing Ivan Plant facilities because of the shorter distance to the mine and from Mejillones. The plant complex will include a crushing plant, leach pads, and ripios facilities and is estimated to occupy approximately 281 ha of surface area. In addition, the Project will increase the mine pit footprint, which translates into an increase in tonnage processed and a surface area of the mine of 257 ha. This new configuration will require an environmental permit via a new Environmental Impact Assessment (EIA) or DIA.

The Chilean authorities may require that existing baseline studies be updated for a new DIA or EIA; and based on the type of document, the amount of information needed will differ. Should the project require an EIA, additional studies will be needed to account for seasonal differences and the need for one year’s worth of data for air emissions monitoring.

There are uncertainties that will need to be addressed to confirm DIA or EIA. The expansion of the pit and WRSFs will need to be considered with respect to any additional impact to the surrounding environment. Traffic studies may be required to understand potential disruptions in Mejillones or Antofagasta and or increases in air and noise emissions.

The original Marimaca 1-23 Claims Project received approval for various Environmental Sectorial Permits, (PAS in the Spanish acronym) for infrastructure and activities approved in the 2018 Marimaca 1-23 DIA. The Project will also require various PAS that will have to be included in the new DIA or EIA document. The PAS will have to be amended or renewed based on the new Project areas and/or installations, and some will have to be updated with the modifications to the pit and WRSFs in the mine area.

The Project as described in the 2020 PEA will have to identify and classify the Sectorial Permits (PS in the Spanish acronym) needed along with critical path permits. Among the critical permits are those approved by the mining, water, and roads authorities that have long approval timelines, complex level of technical studies/data required or that have pre-requisites that could impact the Project schedule. To date, Marimaca Copper has not submitted applications for the approved Project installations.

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1.15.2 Closure and Reclamation Planning

The Closure Plan will have to be approved before operation starts and a bond will have to be delivered to the Government of Chile during the first year of operation. The Closure Plan approval is preceded by obtaining all mining permits from Sernageomin, including those for the WRSFs, process plant, and open pits (mine operation). To date, Marimaca Copper has not obtained permits for mine operation, the process plant, or the WRSFs.

No closure and salvage costs have been considered at this stage.

1.15.3 Social Considerations

The area of influence of the Project the Antofagasta Region, and particularly the communities and cities of Mejillones and Antofagasta.

There are no indigenous lands or territories of any kind being claimed in the Project area. The closest indigenous community (Atacama La Grande) is more than 150 km from the Project area.

Formal community consultations have not occurred.

1.16 Markets and Contracts

No formal marketing studies were completed as part of this preliminary economic assessment and as of the effective date, no definitive contracts are in place for purchase of the copper produced or supply of the acid required at Marimaca.

Copper cathode is a common commodity that is traded in transparent and liquid markets. The value of the product is high in relation to their mass and volume and freight costs are not therefore a fundamental driver of expenditure.

Accordingly, for the purpose of the 2020 PEA, it is appropriate to assume that the product can be sold and at standard market rates.

1.17 Capital Cost Estimates

Capital costs were estimated from a variety of sources including derivation from first principles, equipment quotes and factoring from actual costs incurred in the construction of other similar facilities. Costs are estimated in US dollars to an accuracy of ± 25% which is equivalent to an AACE International, Class 4 Estimate.

Capital costs are summarised in Table 1-4 and show initial costs of $ 284.7 M, with sustaining costs of $66 M, for a LOM total capital cost of $350.7 M.

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Table 1-4: Estimated Capital Cost

Estimated Capital Costs Costs ($M)

Mining Equipment 14.0

Mine Development 9.2

Crushing & Agglomeration 22.7

Leaching 43.5

SX-EX Plant 81.1

Infrastructure (incl acid tanks, power supply, buildings) 14.7

Total Direct Costs 185.1

Indirect Costs 42.6

Contingency 56.9

Total Initial Capital Cost 284.7

LOM Sustaining Capital (including Indirect costs) 66.0

Total Life of Mine Capital Cost 350.7

1.18 Operating Cost Estimates

All operating costs are presented in US dollars. Operating cost estimates are accurate to within ±25%. An overall contingency was not explicitly included in the operating cost estimate, yet it does consider contingencies for specific cost contributors to allow for at-present unspecified miscellaneous details, such as electrical consumption of minor auxiliary equipment (sump pumps, dust suppression, maintenance equipment, services).

The operating costs are estimated C1 cash costs over the life of mine, at an average of $1.22/lb. C1 cash costs consist of mining costs, processing costs, site G&A and transport charges and royalties. All in sustaining costs (AISC) are estimated at an average of $1.29/lb. AISC includes cash costs plus sustaining capital.

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Table 21-5 summarizes the LOM average C1 operating costs, including mining, processing and general and administrative (G&A) costs. Average operating cost is $8.68/t of processed mineralized material (ROM and crush leach); offsite transport and royalties is $0.11/t of processed mineralized material. Operating costs consider crush leach tonnes sent to the crusher and subsequent crush leach processing, as well as ROM leaching; ROM mineralized material haulage costs to ROM facility are included in the mining haulage cost.

Table 1-5: Operating Costs

$/t mineral $/lb Cu Operating Cost Processed Processed Mining 3.19 0.44

Processing 4.95 0.69

Site G&A 0.54 0.07

Transport & Royalties 0.11 0.02 Total 8.79 1.22

1.19 Economic Analysis

1.19.1 Cautionary Statement

The 2020 PEA is preliminary in nature, and is partly based on Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the 2020 PEA based on these Mineral Resources will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

The results of the economic analyses discussed in this section represent forward-looking information as defined under Canadian securities law. The results depend on inputs that are subject to several known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those presented herein. Information that is forward- looking includes the following:

 Mineral resource estimates  Assumed commodity prices and exchange rates  Proposed mine production plan  Projected mining and process recovery rates  Assumptions as to mining dilution  Capital cost and proposed operating cost estimates  Assumptions about environmental, permitting, and social risks

Additional risks to the forward-looking information include:

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 Failure of mining methods to operate as anticipated  Failure of plant, equipment or processes to operate as anticipated  Changes to assumptions as to the availability of electrical power, and the power rates used in the operating cost estimates and financial analysis  Ability to maintain the social licence to operate  Accidents, labour disputes and other risks of the mining industry  Changes to interest rates  Changes to tax rates

Calendar years used in the financial analysis are provided for conceptual purposes only. Permits still must be obtained in support of operations; and approval to proceed is still required from Marimaca Copper’s Board of Directors.

1.19.2 Methodology Used

An economic model was developed to estimate annual pre-tax and post-tax cash flows and sensitivities of the project based on an 8% discount rate. It must be noted that tax estimates involve complex variables that can only be accurately calculated during operations and, as such, the after-tax results are approximations. A sensitivity analysis was performed to assess the impact of variations in metal prices, initial capital cost, total operating cost, discount rate and grade. The economic analysis was run on a constant dollar basis with no inflation.

A base case copper price of $3.15/lb is based on consensus analyst estimates and recently published economic studies.

The economic analysis was performed using the following assumptions:

 Construction starting January 1, 2023  Construction costs capitalised by 30% and 70% in Year -2 and Year -1 respectively  Commercial production starting (effectively) on January 1st, 2025, with first revenue and expensed costs in Year +1  Mine life (LOM) of 12 years  Cathode premium of $100/t of copper  Cost estimates in constant 2020 United States dollars with no inflation or escalation  100% ownership with 0.5% royalty payable on mineralized material mined from the Marimaca 1-23 claims and a 1% royalty payable on mineralized material mined from the La Atomica claims  Capital costs funded with 100% equity (no financing costs assumed)  Copper is assumed to be sold in the same year it is produced  No contractual arrangements for refining currently exist

At the effective date of this Report, the project was assumed to be subject to the following tax regime:

 The Chilean corporate income tax system consists of 27% income tax.  Total undiscounted tax payments are estimated to be $430 M over the life of mine.

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1.19.3 Results

The economic analysis was performed assuming an 8% discount rate, with results as summarized in Figure 1-2.

The pre-tax NPV discounted at 8% is $757 M; the internal rate of return IRR is 39.9%; and payback period is 2.4 years.

On an after-tax basis, the NPV discounted at 8% is $524 M; the IRR is 33.5%; and the payback period is 2.6 years.

1.19.4 Sensitivity Analysis

A sensitivity analysis was conducted on the base case pre-tax and after-tax NPV and IRR of the project, using the following variables: metal prices, initial capital costs, total operating cost, and discount rate. The analysis revealed that the Project is most sensitive to revenue attributes such as copper price followed by operating cost and capital cost (Table 1-6).

Figure 1-2: Projected LOM Cash Flows

Projected LOM Cash Flow $210 $1,200

$140 $800

$70 $400

$- $- -2 -1 1 2 3 4 5 6 7 8 9 10111213 $(70) $(400)

$(140) $(800) Flow Cash

$(210) $(1,200)

Post-Tax Unlevered Free Cash Flow Post-Tax Unlevered Free Cash Flow Cash Free Unlevered Post-Tax Post-Tax Cumulative Unlevered Free Cash Flow Free Unlevered CumulativePost-Tax

Note: Figure prepared by Ausenco, 2020.

Table 1-6: Copper Price Sensitivity Summary.

Post-Tax Post-Tax Post-Tax Post-Tax Copper Post-Tax NPV8% NPV8% NPV8% NPV8% IRR Price NPV8% Capital Capital Operational Operational Base Case $/Lb Base Case cost cost cost cost (-10%) (+10%) (-10%) (+10%) $2.85 $408 $434 $381 $455 $360 28.6%

$3.00 $466 $492 $439 $514 $418 31.1%

$3.15 $524 $551 $498 $572 $476 33.5% $3.30 $582 $609 $556 $630 $535 35.7%

$3.45 $640 $667 $614 $688 $592 37.9%

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1.20 Risks and Opportunities

The following risks were identified

 Unexpected variations in quantity of mineralised material, grade, or recovery rates

 Geotechnical considerations during mining being different from what was assumed

 Failure of mining methods to operate as anticipated

 Failure of plant, equipment, or processes to operate as anticipated

 Samples analysed in the Geomet I, II and III metallurgical programs mainly correspond to oxide materials from the Marimaca 1-23. There is a risk that not all of the sulphide materials in the deposit identified as leachable are not amenable to the acid-salt leaching process identified.

 ROM leaching definition was estimated from a benchmark condition, testwork is required to confirm recoveries.

 The current proposed copper recoveries used in the 2020 PEA considers average values for each type of zone mineral. There is a risk of low accuracy in the copper recoveries associated to the mine plan.

 Heap leach defined operating conditions (heap leach height) needs to be confirmed with additional testwork.

 Changes to assumptions as to the feasibility of electrical power connection to the existing powerline, and the power rates used in the operating cost estimates and financial analysis

 Changes to assumptions as to the feasibility of Seawater pipeline connection to the existing seawater pipeline, and the power rates used in the operating cost estimates and financial analysis

 Unrecognised environmental, permitting, or social risks

 Unanticipated reclamation expenses

 Changes to interest rates

 Changes to tax rates

The following opportunities were identified

 Significant increase in mineralization, as further Exploration activities are conducted adjacent the current deposit and in the District.  Conduct a trade-off study for assessing a better economical option of transporting mined mineralized material by conveyor belt rather than hauling by truck from the pit.  Occurrence of positive variations in quantity of mineralised material, grade or recovery rates after an infill drilling campaign is conducted.  Geotechnical considerations during mining being better than what was assumed. This would be confirmed after geotechnical drilling is conducted on the property.

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 Explore even higher leach pad heights after conducting further metallurgical testwork, which could lead to further reduction on the leaching area footprint, thus reducing capital costs.  There is a potentially additional copper leachable material like secondary copper sulphide and mixed that need to be tested and analysed in the next experimental plan, which could lead to an overall increase in average recoveries.  Investigate the potential reduction on the proposed acid consumption unit rate by adding a lower acid concentration solution to the pads.  Conduct detailed topographic survey, which will lead to a better definition of cut and fill costs, as this is a major component of the construction costs.  Investigate the use of alternative power sources, like the solar systems, which could possibly lower the power costs.  Start on the water and power supply contract negotiations, which could lead to a unit cost reduction once a firmer agreement is made.

1.21 Interpretation and Conclusions

Under the assumptions in this Report, the 2020 PEA returns a positive economic return.

1.22 Recommendations The 2020 PEA yielded a positive result and indicates Marimaca is a project which should be advanced to the next phase of development. Given the Project is well advanced from many aspects, it is recommended that the Project progress directly to Feasibility Study, but that a detailed option trade-off study should be completed to ensure that consideration is given to alternative development strategies which may further enhance the value of the Project. The project is well advanced from a metallurgical perspective, but it is recommended to complete an additional phase of testing to further refine and optimize design parameters for the Project. Infill drilling will be required to move the material within the Mineral Resource Estimate, which is currently classified within the inferred category, to the higher confidence categories for the purposes of the Feasibility Study and the eventual declaration of Mineral Reserves.

To complete the recommended list of activities Marimaca Copper estimates that 10 to 12 $M will be required.

1.22.1 Geology

Marimaca Copper should consider generating a set of SRMs from local samples, matrix matched to the mineralization and reflecting deposit grades, for use in future drill campaigns.

It is recommended to conduct an infill drilling campaign using a 50 m grid spacing to provide additional information in the resource estimate area, and to potentially support conversion of existing Mineral Resources to higher confidence categories.

1.22.2 Mining

Geotechnical investigations should be extended to the north area of the pit to validate the recommendations. Stability analysis carried out to the final designed pit suggested some opportunities.

Results of metallurgical test works for recoveries and acid consumptions for both, crush leach and ROM leach processes, may increase the mineral inventory and the pit limits.

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The sulphide mineralisation potential may significantly extend the size of the pit; therefore, the location of the WRSFs and ROM pad should be revisited in the next stage of development of the project.

1.22.3 Metallurgy

METSIM software modelling and metallurgical optimization planning should be conducted to evaluate combinations of operational variables in support of performance optimization. Aspects to examine include granulometry, column heights, agglomeration conditions, and irrigation rates and acidity levels. Other parameters would include review of the copper balance, sulphuric acid, water, NaCl, impurities, solids in each stage of the planned process route.

Additional testwork should be completed to confirm that ROM leaching of the low-grade mineralization is potentially economic.

1.22.4 Environmental

Complete the baseline studies, some of which are underway, to support the preparation of permitting documents. Baseline studies should include fauna and flora, archeology, human component, paleontology and landscape.

Commence development of other preliminary engineering studies that will also support an early preparation of a DIA. In that regard, the following studies should be conducted to support infrastructure designs, in particular for those infrastructures that will remain post-closure:

 Seismic study  Hydrology and hydrogeology  Geomorphology and geological risk  Geotechnical studies  Condemnation drilling

Additional evaluation of the potential for Potential Acid Generation (PAG), ML and groundwater mobilization of contaminants should be conducted to reflect the 2020 PEA project footprint. Such samples should be taken from exploration drill holes.

Conduct an early social perception study on the local communities to determine their perception/expectations about the future project. This will help with defining any compensation plan that should be taken into account by Marimaca Copper.

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2 Introduction

2.1 Introduction

Marimaca Copper Corporation (Marimaca Copper) requested Ausenco Engineering Canada Inc. (Ausenco) compile technical report (the Report) on the results of a preliminary economic assessment (2020 PEA) on the Marimaca Copper Project (the Project), located in Antofagasta Province, Chile (Figure 2-1).

2.2 Terms of Reference

This Report supports the disclosure of the results of the 2020 PEA in the news release dated 4 August by Marimaca Copper, entitled “Exceptional PEA Results for the Marimaca Project including $524 million post-tax real NPV at 8% and 33.5% IRR”.

Companies who contributed to the 2020 PEA, in alphabetical order, include:

 Ausenco.  Jo & Loyola Consultores de Procesos.  NCL Ingeniería y Construcción.

All measurement units used in this Report are metric unless otherwise noted. Currency is expressed in United States (US) dollars ($). The Chilean currency is the peso. The Report uses US English.

2.3 Qualified Persons

This Report was prepared by the following Qualified Persons (QPs):

 Robin Kalanchey (P. Eng.), Ausenco  Francisco Castillo (Member of Chilean Mining Commission), Ausenco  Scott Weston (P. Eng.), Ausenco  Luis Oviedo (Member of Chilean Mining Commission), NCL Ingeniería y Construcción  Carlos Guzman (FAusIMM), NCL Ingeniería y Construcción  Marcelo Jo (Member of Chilean Mining Commission), Jo & Loyola Consultores de Procesos

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Figure 2-1: Project Location Plan

Note: Figure prepared by Marimaca Copper, 2020.

2.4 Site Visits and Scope of Personal Inspection

Mr. Oviedo visited the Marimaca offices and site from 28–31 August 2019. During the visit, he observed active drill sites, and undertook field verification of drill collar locations. He reviewed core logging and sampling procedures at the core storage facility in the project. Mr. Oviedo also reviewed data collection, data and database integrity, and geological model construction with Marimaca Copper staff.

Mr. Guzman visited the Marimaca site on May 23rd, 2018, He completed a personal inspection of the Marimaca Project for one day, involving all, during which he visited the existing facilities at the Ivan Plant and the Marimaca mine area, including previous mined pits, mineralized outcrops and future location of processing plant and material storage areas .

Mr. Jo visited the Marimaca site on January 22nd, 2020, during which time he inspected the exploration camp, sample warehouse, drill sample storage, and drilling zones. He also toured the project site to identify potential locations for the future process plant.

Mr. Castillo performed a site visit on July 23rd, 2020, during which time he inspected the existing infrastructure and toured the Project site to view potential locations for future infrastructure.

As of the effective date, neither Mr Robin Kalanchey nor Mr Scott Weston had visited the Marimaca site.

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2.5 Effective Dates

The Report has several effective dates as follows:

 Close-out date for the database used in Mineral Resource estimation: 3 September 2019  Mineral Resource estimate: 20 January 2020  Date of supply of last information on mineral tenure, surface rights and agreements: 17 April 2020  Date of 2020 PEA economic analysis: 4 August 2020

The effective date of this Report is 4 August 2020.

2.6 Information Sources and References

This Report is based in part on internal company reports, maps, published government reports, and public information, as listed in Section 27 of this Report. It is also based on the information cited in Section 3.

Additional information was sought from Marimaca Copper employees in their areas of expertise.

2.7 Previous Technical Reports

Marimaca Copper, under its former name of Marimaca Copper Mining Corporation (Marimaca Copper Mining), filed the following technical reports on the Project:

 Oviedo L., 2017: Technical report for the Marimaca Copper Project, Antofagasta Province, Region II, Chile: technical report prepared by NCL Ingeniería y Construcción SpA for Marimaca Copper Mining, effective date 24 February 2017, 99 p.  Oviedo, L., 2018: Updated Resource Estimate for the Marimaca Copper Project, Antofagasta Province, Region II, Chile: technical report prepared by NCL Ingeniería y Construcción SpA for Marimaca Copper Mining, effective date 22 May 2018, 130 p.  Quiroga V, E., Oviedo, L., Guzman, C., 2018: Definitive Feasibility Study for Marimaca 1-23 Claim Project, Antofagasta II Region, Chile: technical report prepared by Propipe and NCL Ingeniería y Construcción SpA for Marimaca Copper Mining, effective date 13 June 2018, 354 p.  Oviedo, L., 2020: Updated and Expanded Resource Estimate for the Marimaca Copper Project, Antofagasta Province, Region II, Chile: technical report prepared by NCL Ingeniería y Construcción SpA for Marimaca Copper Mining, effective date 15 January 2020, 217 p.

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3 Reliance on Other Experts

3.1 Introduction

The QPs have relied upon the following other expert report, which provided information on mineral rights, surface rights, royalties, encumbrances, property agreements, product marketability, and taxation of this Report as noted below.

3.2 Mineral Tenure

The QPs have not reviewed the mineral tenure, surface rights, property ownership, royalties or encumbrances, nor independently verified the legal status of the Project area underlying property agreements or permits. The QPs have entirely relied upon, and disclaim responsibility for, information derived from experts retained by Marimaca through the following document:

 Bofill Mir and Alvarez Jana Abogados, 2020: Marimaca Mining Project Legal Opinion: report prepared by Bofill Mir and Alvarez Jana Abogados for Coro Mining, 17 April, 2020

This information is used in Section 4 of the Report. It is also used in support of the Mineral Resource statement in Section 14, and the economic analysis in Section 22.

3.3 Markets

The QPs have fully relied on, and disclaim responsibility for marketing information derived from experts retained by Marimaca through the following document:

 Jorge Jorrat, July 2020, The Sulphuric Acid Market Chile -Perúr

This information is used in Section 19 of the Report. It is also used in support of the economic analysis in Section 22.

3.4 Taxation

The QPs have fully relied on, and disclaim responsibility for taxation information derived from experts retained by Marimaca through the following document:

 Ernst and Young, July 2020, Tax aspects for the financial model of the Marimaca project

This information is utilized to support of the economic analysis in Section 22.

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4 Property Description and Location

4.1 Introduction

The Marimaca Claims and surrounding Marimaca Copper-owned concessions are located in Chile’s Antofagasta Province, Region II, approximately 45 km north of the city of Antofagasta and approximately 1,250 km north of Santiago.

The Project is located at approximately 374,820 E and 7,435,132 S in WGS84 UTM coordinates.

4.2 Property and Title in Chile

Information in this subsection is based on data in the public domain and Chilean law (Chilean Civil Code, Chilean Mining Code, Chilean Tax Law), and has not been independently verified by the QPs.

The following laws regulate the mining industry:

 Constitution of the Republic of Chile  Constitutional Organic Law of Mining  Code and Regulations governing Mining  Code and Regulations governing Water Rights  Laws and Regulations governing Environmental Protection as related to mining.

4.2.1 Mineral Tenure

The concessions have both rights and obligations as defined by an Organic Constitutional Law, enacted in 1982. Concessions can be mortgaged or transferred, the holder has full ownership rights, and is entitled to obtain the rights of way for exploration (pedimentos) and exploitation (mensuras).

Mining rights in Chile are acquired in the stages outlined in Table 4-1.

4.2.2 Mining Tax

A mining tax is calculated as a percentage of the Unidad Tributaria Mensual (UTM or monthly tax unit) and applies to each hectare of land included in the mining exploration or mining exploitation concessions. This tax is paid annually in a single payment before 31 March of each year.

For mining exploitation concessions, the tax rate is currently 10% of a UTM per hectare; for mining exploration concessions, the tax rate is currently 2% of a UTM per hectare. The value of the UTM is adjusted monthly according to the consumer price index (IPC) in Chile.

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Table 4-1: Mineral Title Types.

Mineral Title Size Validity Period Notes Type Minimum is Maximum period of Defined by UTM coordinates. New 100 ha, and two years. The claim pedimentos can overlap with pre-existing maximum is may be reduced in ones. However, the underlying 5,000 ha with size by at least 50% Pedimento (previously staked) claim always takes a maximum at the end of the precedent, providing the claim holder length-to- two-year period, and avoids letting the claim lapse due to a width ratio of renewed for an lack of required payments. 5:1 additional two years Before a pedimento expires, or at any stage during its two-year life, it may be converted to a manifestación. A manifestation may also be filed on any open ground without going through the pedimento filing process. Within 220 days of filing, the applicant must file a “Request for Survey” (Solicitud de Mensura) with the court of jurisdiction, including official publication Manifestación to advise the surrounding claim holders. The applicant may raise objections if they believe their pre-established rights are being encroached upon. The owner is entitled to explore and to remove materials for study only (i.e. the sale of the extracted material is forbidden). If an owner sells material from a manifestation or exploration concession, the concession will be terminated. Within nine months of the approval of the “Request for Survey” by the court, the claim must be surveyed by a government licensed surveyor. Surrounding claim owners may be present during the survey. Once surveyed, presented to the court, and reviewed by the National Mining Mensura Indefinite Service (Sernageomin), the court adjudicates the application as a permanent property right (a mensura), which is equivalent to a “patented claim” or exploitation right subject to the payment of annual fees. Once an exploitation concession has been granted, the owner can remove materials for sale.

4.2.3 Surface Rights

Ownership rights to the subsoil are governed separately from surface ownership. Articles 120 to 125 of the Chilean Mining Code regulate mining easements. The Mining Code grants to the owner of any mining exploitation or exploration concessions full rights to use the surface land provided that reasonable compensation is paid to the owner of the surface land.

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4.2.4 Rights of Way

The Mining Code also grants the holder of the mining concession general rights to establish a right of way (RoW), subject to payment of reasonable compensation to the owner of the surface land. Through a private agreement or legal decision, RoW is granted that indemnifies the owner of the surface land. A RoW must be established for a particular purpose and will expire after cessation of activities for which the right of way was obtained. The owners of mining easements are also obliged to allow owners of other mining properties the benefit of the RoW if this does not affect their exploitation activities.

4.2.5 Water Rights

Article 110 of the Chilean Mining Code establishes that the owner of the record of a mining concession is entitled, by operation of law, to use waters found in the works within the limits of the concession, as required for exploratory work, exploitation and processing, according to the type of concession in which the owner might engage. These rights are inseparable from the mining concession. Water is considered part of the public domain and is independent of land ownership. Individuals can obtain the right to use public water following the Water Code. Under the Code (updated in 1981), water rights are expressed in liters per second (L/s), and usage rights are granted based on total water reserves.

4.3 Ownership

The Project is held 100% by Marimaca Copper. Marimaca Copper has four Chilean subsidiaries that have actual, or eventual, rights over various mining properties that make up the Project:

 Compañía Minera Cielo Azul Limitada (MCAL)  Compañía Minera NewCo Marimaca (Newco Marimaca)  Compañía Ivan SpA (Compañía Ivan)  Minera Rayrock Limitada (Rayrock).

4.4 Agreements and Options

4.4.1 Newco Marimaca

Newco Marimaca owns the Marimaca 1 to 23 and Sor 1 to 16 concessions. Newco Marimaca was incorporated in September 2015 and has an initial 10-year term from the incorporation date. After the initial term, the company can be extended for two-year terms, unless the board of directors decides to wind up the company.

MCAL, and the shareholders of Newco Marimaca (referred to as the vendors), entered into an option agreement in November 2015, whereby MCAL could acquire a total 75% interest in Newco Marimaca. Under the Marimaca option agreement, the Marimaca 1 to 23 mining properties were assigned to MCAL. Newco Marimaca cannot assign or transfer royalty or mining rights to any third party. The Sor 1 to 16 concessions were not specifically stipulated as part of the Marimaca option agreement, and a second option agreement was concluded to include those claims as part of the Marimaca option package.

Under the option terms, MCAL was to acquire 51% of the total shares of Newco Marimaca for $185,000 and had to complete a feasibility study by 6 August 2018. This condition was met. To acquire the remaining 24% of the total shares of Newco Marimaca, MCAL had to pay $1,000, and either have obtained project construction financing, or have purchased a solvent extraction–electrowinning (SX/EW) plant capable of an annual production rate of no less than 1,500 t of copper cathode annually, and contributed this plant to Newco Marimaca, together

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with the surface rights over the plant location. The option contract was terminated by means of public deed dated February 14, 2020 as a consequence of the execution of the Marimaca Sales and Purchase Transaction.

The Marimaca Sales and Purchase Transaction provided for MCAL and a second Marimaca Copper subsidiary, Inversiones Cielo Azul Limitada (ICAL) to purchase the total amount of Newco Marimaca shares issued. The two-company ownership structure is a result of Chilean law that states that Contractual Mining Corporations (Sociedad Contractual Minera) such as Newco Marimaca may not have less than two shareholders.

The price to acquire the remaining 49% interest in Newco Marimaca that MCAL/ICAL did not hold was $12 M, to be paid in tranches, as follows:

 First payment: $6 M on the date of signing of the Sales and Purchase Transaction; this was paid on 14 February 2020 (paid)  $3 M within 20 months of the date of signing of the Sales and Purchase Transaction  $3 M within 24 months of the date of signing of the Sales and Purchase Transaction.

Marimaca Copper, through its subsidiaries, currently owns 100% of Newco Marimaca.

Sociedad Contractual Minera Elenita and Newco Marimaca entered into a mining concession sales and purchase agreement for the Sello Nueve concession. MCAL paid $1,000 at the execution of the sales and purchase public deed.

4.4.2 Inversiones Creciente Limitada

MCAL entered into a 36-month option agreement during October 2017 with Inversiones Creciente Limitada (Inversiones Creciente) to purchase the La Atomica 1 to 10 concessions. The agreement will expire on 14 November 2020.

MCAL will acquire 100% of the La Atómica claims for a total of $6 M with the following payment schedule:

 $20,000 before signing the agreement (paid)  $80,000 at the signature of the option agreement (paid)  $500,000 on November 14, 2018 (paid)  $500,000 on November 14, 2019 (paid)  $500,000 on March 14, 2020. There is an associated monthly interest of 0.75% between November 2019 and March 2020, approximating to $15,000 that must also be paid (paid)  $1 M on November 14, 2020.  $1.055.230 on May 14, 2021.  $2.648.586 on November 14, 2021.

A third party, Manuel Abel Segovia Aguirre Servicios Mineros E.I.R.L., has an existing extractive agreement with Inversiones Creciente. MCAL has allowed the operations to continue with the following provisos:

 Mining must not exceed 2,000 t per month  Material mined must be sent to Empresa Nacional de Minería (ENAMI)

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 Mining activities cannot impede Marimaca Copper’s exploration activities.  When the La Atómica purchase is concluded, workers must leave, and the La Atómica 1 to 10 concessions must be delivered to Marimaca Copper free of all contracts or other encumbrances.

4.4.3 Capax SA

MCAL entered into a sales and purchase agreement on 3 August, 2018 with Capax SA (Capax) for the Anta María Uno 1 and 2, Santa María Dos 1 to 2, Vida Dos 1 to 17, Inca 1 to 2, Sorpresa 1 to 10, Sorpresa II 1 to 15, Atahualpa 1 to 2, Truska Uno 1 to 9, and Truska Dos 1 to 20 (reduced to Truska Dos 1 to 12) concessions.

The purchase price was $5.8 M, consisting of:

 $100,000 payable prior to the execution of the sales and purchase agreement (paid)  $5.7 M paid as at the execution date of the sales and purchase agreement (paid).

A second sales and purchase agreement was concluded with Capax on 18 March 2019, for 50 shares in Sociedad Legal Minera Rodeada Uno del Mineral de Naguayán (SLM Naguayán). SLM Naguayán is the sole owner of the Rodeada Uno to Tres concessions. Commercial considerations included $200,000 payable on execution of the agreement. The 50 SLM Naguayán shares are currently registered to MCAL.

4.4.4 Compañía Minera Naguayán S.C.M.

MCAL entered into a sales and purchase agreement on 3 January 2018, amended 28 November 2019, with Compañía Minera Naguayán S.C.M. (Minera Naguayán) for the Roble 1 1 to 10, Olimpo 1 to 20, Tarso 1 to 13, Macho 1 to 20, San Lorenzo 1 to 10, Sicilia 1 to 20, San Patrick 1 to 20, Morencia 1 to 20, Nepal 1 to 20, to 20 and Cedro I 1 to 20 concessions. The option term will expire 3 January 2022.

The option agreement was subject to $6.5 M in payments, as follows:

 $200,000 on the date the option was signed (paid)  $300,000 on 3 January 2019 (paid)  $400,000 on 3 January 2020 (paid)  $300,000 on 13 April 2020 plus an interest payment of 0.03% per month for the January to April 2020 period, equating to about $9,227 (paid)  $554.639 on 1 February, 2021.  $205.966 on 12 April, 2021.  $1.085.660 on 5 October, 2021.  $3.55 M on 3 January 2022.

Minera Naguayán had existing extraction contracts concluded with a number of third parties.

MCAL has allowed the operations to continue with the following provisos:

 Mining must not exceed 2,000 t per month  Material mined must be sent to ENAMI  Mining activities cannot impede Marimaca Copper’s exploration activities.

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 When the Minera Naguayán purchase is concluded, workers must leave, and the Roble 1 1 to 10, Olimpo 1 to 20, Tarso 1 to 13, Macho 1 to 20, San Lorenzo 1 to 10, Sicilia 1 to 20, San Patrick 1 to 20, Morencia 1 to 20, Nepal 1 to 20, to 20 and Cedro I 1 to 20 concessions must be delivered to Marimaca Copper free of all contracts or other encumbrances.

4.4.5 Proyecta S.A. and Sociedad Contractual Minera Proyecta

MCAL entered into an option to purchase agreement on 6 May, 2019, with Proyecta S.A. and Sociedad Contractual Minera Proyecta over the Mercedes Dos 1 to 6, Llano 15 1 to 15, Llano 16 1 to 15, Llano 17 1 to 35, Llano 18 1 to 36, Llano 19 1 to 40, Llano 20 1 to 46, Llano 21 1 to 50, Llano 22 1 to 50, Llano 23 1 to 50, Llano 24 1 to 10, Llano 25 1 to 10, Llano 26 1 to 2, Llano 29 1 to 10, Llano 31 1 to 5, and the Llano 33 1-20 concessions.

The commercial terms were a fixed $2 M purchase price, payable as follows:

 $50,000 to meet conditions precedent (paid)  $50,000 on 6 September 2020 (paid)  $50,000 on 6 May 2021  $100,000 on 6 November 2021  $125,000 on 6 May 2022  $125,000 on 6 November 2022  $1.4 M on 6 May 2023.

4.4.6 Rayrock Antofagasta S.A.C. and Compañía Minera Milpo S.A.A

MCAL entered into a sales and purchase agreement on 8 June 2017 with Rayrock Antofagasta S.A.C. and Compañía Minera Milpo S.A.A to acquire the Notable Uno 1 to 30, Terrible 1 to 143, Deses V 1 to 27, and Junto 1 to 10 concessions. Under this agreement, MCAL acquired 99.9% of the interest of Minera Rayrock Limitada (Rayrock) and Pablo Mir Balmaceda acquired 0.1% of the total interest of Rayrock. The transfer of the Rayrock’ s interest was distributed as follows:

 Rayrock Antofagasta S.A.C. sold 15.82% in Rayrock to MCAL for $983,748.06.  Compañía Minera Milpo S.A.A. sold 84.08% in Rayrock to MCAL for $5,228,415.78

MCAL, Rayrock Antofagasta S.A.C. and Compañía Minera Milpo S.A.A. entered into a frame agreement that provided the details for the transfer of rights in Rayrock from Rayrock Antofagasta S.A.C. and Compañía Minera Milpo S.A.A. to MCAL.

The Rayrock shareholders agreed to form a spinoff company, Compañía Iván Limitada, where the shareholders were MCAL (99.9%) and Pablo Mir Balmaceda (0.1%). On 16 March 2019, Pablo Mir Balmaceda transferred his interest to MCAL, such that MCAL now holds 100% of Compañía Iván Limitada.

4.5 Mineral Tenure

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 Marimaca area: 265 claims (62,568 ha) held in the names of the following Marimaca Copper subsidiaries: Compañía Minera Cielo Azul Limitada, Compañía Minera Naguayán SCM, Sociedad Contractual Minera NewCo Sociedad Legal Minera Rodeada Uno, Proyecta S.A. and Sociedad Contractual Minera Proyecta  Iván area: 120 claims (11,680 ha) held in the names of Minera Rayrock Limitada or Compañía Minera Cielo Azul Limitada.

A list of the claims that make up the two packages are provided in Appendix A. A summary figure of the mineral tenure holdings is included as Figure 4-1. An inset figure showing the mineral tenure in the location of the proposed pit is included as Figure 4-2

As part of the grant process, the concessions have been surveyed by a government-licensed surveyor.

Under the option terms outlined in Section 4.4, Marimaca Copper is responsible for paying any annual mining licence fees applicable under Chilean laws, and for protecting and maintaining the mining concessions. Marimaca Copper advised NCL that all concession fees were current as of 4 September 2020, and will continue to be paid regularly as due, using a formal status tracking system.

4.6 Surface Rights

The surface land in the Commune of Mejillones is owned by the State and managed and represented by the Ministerio de Bienes Nacionales.

Marimaca Copper has developed a strategy to obtain the necessary surface rights to cover mine, plant, tailings storage facilities and transmission lines.

Marimaca Copper currently has a provisional mining legal easement, and the process to formally grant the easement for a 30-year term is underway. The easement covers 4,465 ha (Figure 4-3) and includes the underlying Miranda I 1 to 146, Miranda II 1 to 30, Miranda III 1 to 130, Miranda IV 1 to 48, Chacaya 1 1 to 200, Chacaya 3 1 to 300, Chacaya 5 1 to 100, Chacaya 7 1 to 300, Chacaya 10 1 to 300, Chacaya 11 1 to 200 and Chacaya 12 1 to 300 concessions.

Marimaca Copper has applied for a second easement, shown in Figure 4-4 This easement covers Marimaca 1-23, La Atomica 1-10 and Atahualpa group.

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Figure 4-1: Total Mineral Tenure Holdings

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 4-2: Mineral Tenure, Proposed Open Pit Location

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 4-3: Marimaca Project Provisional Easement

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 4-4: Easement Application

Note: Figure prepared by Marimaca Copper, 2020. Vertices solicitud de servidumbre = vertices of the easement application; solicitud de servidumbre = easement boundary; concesiones exploitatción Marimaca Copper = exploitation licences held by Marimaca Copper; concesiones exploración Marimaca Copper = exploration licences held by Marimaca Copper; norte = north.

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4.7 Water Rights

Marimaca Copper holds no water rights in the Project area. Water assumptions for the purposes of the 2020 PEA are discussed in Section 18.

For current exploration and testworks water is taken to site as per required by trucks. For the project seawater will be provided by Aguas de Antofagasta S.A. (ADASA), a major Chilean water supplier

4.8 Royalties

As noted in Section 4.2.2, a mining tax applies to each hectare of land included in the mining exploration or mining exploitation concessions.

As a result of the various option agreements, the Project is subject to the following royalties.

4.8.1 Newco Marimaca

A 1.5% net smelter return (NSR) royalty is payable on the sale or transfer of the minerals, metals, or other mineral products (refined or not) from the Marimaca 1 to 23 and Sor 1 to 16 concessions.

MCAL has the right to purchase 1% of the royalty (leaving a 0.5% royalty payable) within 24 months of the start of commercial production from the concessions. The fee payable is $4 M. MCAL also has the right of first refusal to purchase the royalty if a third party makes an offer for the royalty and must match the third-party offer.

4.8.2 Inversiones Creciente

A 1.5% NSR royalty is payable on sale or transfer of the minerals, metals, or other mineral products (refined or not) from the La Atómica 1 to 10 concessions.

MCAL has the right to purchase 0.5% of the royalty (leaving a 1% royalty payable) at any time after the option to purchase the concessions is exercised, for $2 M.

4.8.3 Capax

A 2% NSR royalty is payable on sale or transfer of the minerals, metals or other mineral products (refined or not) from the Anta María Uno 1 and 2, Santa María Dos 1 to 2, Vida Dos 1 to 17, Inca 1 to 2, Sorpresa 1 to 10, Sorpresa II 1 to 15, Atahualpa 1 to 2, Truska Uno 1 to 9, and Truska Dos 1 to 20 (reduced to Truska Dos 1 to 12) concessions.

A 2% NSR royalty is also payable on sale or transfer of the minerals, metals or other mineral products (refined or not) from the Rodeada Uno to Tres concessions.

4.8.4 Minera Naguayán

A 1.5% NSR royalty is payable on sale or transfer of the minerals, metals or other mineral products (refined or not) from the Roble 1 1 to 10, Olimpo 1 to 20, Tarso 1 to 13, Macho 1 to 20, San Lorenzo 1 to 10, Sicilia 1 to 20, San Patrick 1 to 20, Morencia 1 to 20, Nepal 1 to 20, to 20 and Cedro I 1 to 20 concessions.

MCAL has the right to purchase 0.5% of the royalty (leaving a 1% royalty payable) after the option to purchase the concessions is exercised, and within 12 months of commercial production from the concessions, for $2 M. Minera Naguayán cannot transfer the 0.5% royalty to a third party while the MCAL right to purchase is in force.

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MCAL also has the right of first refusal to purchase the remaining 1% royalty if a third party makes an offer for the royalty and must match the third-party offer.

4.8.5 Proyecta S.A. and Sociedad Contractual Minera Proyecta

A 1% NSR royalty is payable on sale or transfer of the minerals, metals or other mineral products (refined or not) from the Mercedes Dos 1 to 6, Llano 15 1 to 15, Llano 16 1 to 15, Llano 17 1 to 35, Llano 18 1 to 36, Llano 19 1 to 40, Llano 20 1 to 46, Llano 21 1 to 50, Llano 22 1 to 50, Llano 23 1 to 50, Llano 24 1 to 10, Llano 25 1 to 10, Llano 26 1 to 2, Llano 29 1 to 10, Llano 31 1 to 5, and the Llano 33 1-20 concessions.

MCAL can purchase the entire NSR royalty within 24 months of the commencement of commercial production from the concessions for $500,000. Proyecta S.A. and Sociedad Contractual Minera Proyecta cannot transfer the royalty to a third party while the MCAL right to purchase is in effect.

4.8.6 Rayrock

The Rayrock Notable Uno 1 to 30, Terrible 1 to 143, Deses V 1 to 27, and Junto 1 to 10 concessions are subject to either a 1.5% NSR or 2% NSR royalty, payable to Compañía Minera Milpo S.A.A. Once a concession is in production, the royalty payments must be made every three months.

The 1.5% NSR royalty is payable on concessions which had an underlying royalty granted to J. Hunt on 3 January 1994, and to J. Hunt and J. Hunt Resource Associates on 1 September 1994.

The 2% NSR royalty is payable on all of the other concessions.

4.9 Permitting Considerations

The Project permitting status is discussed in Section 20.

4.10 Environmental Considerations

The Project environmental status is provided in Section 20. At current moment there is no environmental liabilities identified.

4.11 Social Licence Considerations

The current Project social licence status is outlined in Section 20.

4.12 Comments on Section 4

The QP was provided with legal opinion and information from Bofill Mir & Alvarez Jana and experts retained by Marimaca Copper that supports:

 Marimaca Copper holds 100% of the Marimaca Project  Marimaca Copper is the Project operator  The mineral tenure held is valid and is sufficient to support the declaration of Mineral Resources  Marimaca Copper currently has a provisional mining legal easement, and the process to formally grant the easement is underway.  Royalties in the form of the Chilean mining tax will be payable

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 The Project is subject to several third-party NSR royalties on individual claims, which range from 1–2%, depending on the claim block and applicable option agreement

The QP is not aware of any issues that may affect access, title, or the right or ability to perform work on the Project that are not discussed in this Report.

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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Accessibility

Antofagasta and Mejillones are the closest major centres and are connected by a well- maintained multi-lane highway. The Marimaca Project is accessible by well-maintained dirt roads, one coming from the Cerro Moreno Airport in Antofagasta and the other branching off Route Antofagasta–Tocopilla.

The Antofagasta regional airport is serviced by regional and international flights from Santiago and other destinations daily. The regional Antofagasta Cerro Moreno airport is located 45 km to the south-southwest of the Project location.

High voltage lines that transport energy from the power stations located in Mejillones are also close to the main highway.

5.2 Local Resources and Infrastructure

Antofagasta and Mejillones are modern port cities with all regular services, serving a combined population of approximately 570,000. Numerous mining-related businesses are located in the cities.

Personnel employed by Marimaca Copper mainly come from the Antofagasta region.

There are power lines and water desalination plants in reasonable proximity to the Project.

Mejillones is a mega-port for larger cargo. In addition, there are five thermoelectric plants and the most important sulphuric acid terminal in the north of the country. The installed capacity of electric production currently available at Mejillones is closed to 900 MGW, while the sulphuric acid storage facilities have a capacity of more than 6 Mt/y.

Infrastructure considerations for the PEA are outlined in Section 18.

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Figure 5-1: Key Regional Infrastructure

Note: Figure prepared by Marimaca Copper, 2020.

5.3 Climate

The Project is located about 39 km north of the Tropic of Capricorn. The minimum temperatures vary between 10–15° C and the maximum temperatures between 20–29° C, while the average relative humidity oscillates between 67–70%.

The climate is dry, and the average annual rainfall is 2–3 mm as an annual average over 24 hours. However, storm events can occur, and may result in precipitation of 12–30 mm in a few hours.

5.4 Physiography

The Marimaca Project is located in the Cordillera de la Costa, a mountainous area, with relief ranging from 400–1,000 m.a.s.l. (Figure 5-2).

Vegetation is minimal outside of inhabited valleys where irrigation is used, and areas where the “Camanchaca” sea mist that comes from the nearby ocean supports vegetation that is capable of withstanding the desert environment.

The Mejillones and Naguayán quebradas drain the Project area from east to west and south to north, respectively. The Project is located in an active seismic zone.

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Figure 5-2: Physiography of the General Project Area

Note: Figure prepared by Marimaca Copper, 2020, The figure has a vertical exaggeration of 3x. View toward northeast. CCF = coastal cliff; MP = Mejillones Peninsula.

5.4.1 Comments on Section 5

The existing local infrastructure, availability of staff, and methods whereby goods could be transported to the Project area to support exploration activities are well understood by Marimaca Copper and can support the declaration of Mineral Resources.

The Project covers an area that is sufficient for infrastructure requirements to support a mining operation.

Surface rights are discussed in Section 4.7.

Mining operations in the region are conducted year-round, and it is expected that any operation conducted by Marimaca Copper would also be year-round.

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6 History

6.1 Project History

The Project is located in the “Mineral de Naguayán” district

Small-scale artisanal mining activities were undertaken in the Project area from the 1990s to the mid-2000s. Underground mining and small pits may have produced around 100,000 t of copper oxides between 1–2% of copper. The pits have dimensions of 20 by 15 m getting 20 m in depth. Underground workings are at maximum of 100 m deep. Most of the artisanal production was sold to Minera Michilla SA, ENAMI, and Minera Rayrock Ltda.

During the second half of the past century the Institute of Geological Investigations and ENAMI reported copper oxide mineralization hosted within north–south trending fracture systems. During the early 2000s, a number of junior mining companies inspected the area, but no one undertook further investigations.

The modern exploration in the area had not been conducted until Marimaca Copper Mining now Marimaca Copper, assembled the Project tenure. The Marimaca 1 to 23 claims that cover the main area were staked in 1979.

In April 2016 as result of the reverse circulation (RC) drill program Marimaca was discover. Subsequent, detailed geological surface mapping and rock chip sampling, additional RC, core drilling, geotechnical and geometallurgical studies, metallurgical testworks, and mining studies has been executed. An initial resource estimate was completed in January 2017, and Mineral Reserves were first estimated in 2018.

An Environmental Impact Statement (Declaración de Impacto Ambiental, DIA) and the Mining Safety Regulations and Environmental Qualification Resolution (RCA) was approved on 5 July 2018.

Mineral Resources were updated in late 2019, and that estimate is discussed in Section 14.

Marimaca Copper changed its name to Marimaca Copper in May 2020.

A PEA was completed in 2020, and the results of that study are summarized in this Report.

6.2 Production

No formal production has occurred from the Project area.

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7 Geological Setting and Mineralization

7.1 Regional Geology

The regional geology consists of Jurassic volcanic and intrusive rocks (Figure 7-1), with minor older Triassic acid volcanic occurrences, intermediate intrusive units, sediments and Paleozoic metamorphic rocks. The main regional structure is the Atacama Fault System (AFS) which forms the eastern border of the Coastal Cordillera in the region.

The regional metallogeny is dominated by the occurrence of Cu–Ag “manto-type” deposits that have iron oxide–gold–copper (IOGC) affinities. The classic “manto-type” deposits (e.g. Buena Esperanza, Michilla, Mantos de la Luna, Ivan and Mantos Blancos) are hosted in volcanic rocks that have similar morphologic and mineralization–alteration characteristics, although each deposit has its own particular litho-structural mineralization control. There are also examples of vein-related deposits hosted in intrusions, such as Minitas, Tocopilla, Gatico, Naguayán, Montecristo, that also have IOCG affinities.

The oldest exposed rocks are metasedimentary and intermediate intrusions of late Paleozoic and Triassic age. Early Jurassic to lower Cretaceous age diorite, monzonite and monzodiorite, with lesser gabbro, quartz monzonite and metadiorite, bodies intrude the earlier rocks. These are in turn intruded by bi-modal gabbro to rhyodacite dyke swarms. The dyke swarms have variable orientations, ranging from oldest to youngest, from northeast–southwest to north– south, to northwest–southeast. The dykes are associated with the regional IOCG mineralizing systems.

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Figure 7-1: Regional Coastal Cordillera Geology

Note: Figure prepared by Marimaca Copper, 2020. PG: Puntillas-Galenosa; MCh: Michilla; AN: Antucoya; IZ: Ivan- Zar; MB: Mantos Blancos; JM: Julia-Montecristo). The letter “M” is the location of the Marimaca Project. SudAmerica = South America, Oceano Pacifico = Pacific Ocean, Sistema De Faltas de Atacama = Atacama Fault Zone.

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Overlying all the earlier units along the coastal plain/Mejillones Peninsula are Tertiary-age marine sediments.

To the west of the AFS, the Naguayán Banded Fracture Belt (NBFZ) forms an approximately 15 km long and 3 km wide zone of sub-parallel fractures that trend north–south to north– northeast, dipping at 40–60º to the east or southeast. The rhyodacitic-composition regional dyke swarm end members are preferentially associated with the NBFZ.

A key aspect of regional metallogenesis is the post-Cretaceous geomorphological and climatic evolution that permitted the generation of deep columns of supergene enrichment and oxidation.

7.2 Project Geology

The local geology consists of monzonite, diorite and monzodiorite intrusions correlated with the Naguayán Plutonic Complex, and dykes belong to the regional bimodal dyke swarm.

Mineralization in the Marimaca area has formed in association with the fractures of the NBFZ, and in association with north–south to northeast-oriented “feeder” zones or vein-like structures. It consists of chalcopyrite, moderate to minor pyrite, minor bornite, covellite and primary chalcocite forming massive bodies, zones of replacement and fracture fills. A copper oxide blanket overlies the primary mineralization, which resulted from the alteration of a secondary sulphide-enriched blanket that produced a chemical zonation from brochantite to atacamite at the core of the alteration zone, with a surrounding outboard halo of predominantly chrysocolla, followed by a wad halo.

Figure 7-2 and Figure 7-3 are overview illustrations showing the surface extension of the copper oxide blanket, as expressed by the >0.1% Cu limit from surface mapping, and the eastern limit of alteration, referred to as the hanging wall alteration or “Red Cap”.

Figure 7-2: Project Overview (northeast view)

Note: Figure prepared by Marimaca Copper, 2020. Panoramic view looking northeast, the >0.1% Cu boundary as light-yellow dashed line, and the hanging wall alteration as the darker yellow dashed line. The highest peaks are 1,100 m elevation; the lowest is about 900 m elevation.

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Figure 7-3: Project Overview (south view)

Note: Figure prepared by Marimaca Copper, 2020. Panoramic view looking south showing the main mineralized zones, the >0.1% Cu boundary, and the hanging wall alteration front. The northern limit of mineralization corresponds to a northwest-trending fault that can be observed on the hill above the hanging wall alteration marker.

7.3 Deposit Description

7.3.1 Lithologies

The principal rock types are summarized in Table 7-1. A deposit geology plan is included as Figure 7-4 and a cross-section through the geology is provided in Figure 7-5.

7.3.2 Structure

The key structural elements in the Project area are summarized in Table 7-2.

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Table 7-1: Lithology Summary

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Figure 7-4: Sub-Surface Interpreted Geology Plan

Note: Figure prepared by Marimaca Copper, 2020, after Kovacic, 2017 and IMG, 2019.

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Figure 7-5: Cross-Section NE 100, Showing Litho-Structure (a) and Mineralization (b)

Note: Figure prepared by Marimaca Copper, 2020. Sections are oriented at 220°to the southeast.

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Table 7-2: Structure Summary

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The NBFZ is characterized by decametric sub-parallel fractures that show different types of penetration, filling, spacing and persistence. Fractures can be filled with a clay or limonite gouge.

Feeder faults range from a few centimetres to 10 m in thickness. Strong supergene alteration, limonite staining. and fracture filling as well as copper oxide mineralization are characteristics of the feeder-fault zone. The most prominent feeders close to the hanging wall alteration front, towards the east, display a white clay (albite–sericite) halo. In the central part, hematite-rich fringes and chlorite–hematite halos are common.

Veins are typically 1–3 m wide. In the supergene zone, these have iron oxide fill, and often surrounded by a chlorite halo. At depth, below the oxidation zone, the fill is magnetite. Where associated with dykes, the vein alteration halo is typically actinolite. Veins carrying tourmaline and quartz are common at Atahualpa.

Post-mineral faults are typically northwest-trending, vertical faults, and are associated with late-stage dyke emplacement. Five major zones of associated dyking and northwest-trending faults have been defined (Figure 7-6). These appear to control the supergene alteration and mineralization and influence the orientation of the oxide blanket. The faults are interpreted to divide the mineralized body into discrete panels with different structural orientations, which was used to separate structural domains for resource estimation.

7.3.3 Alteration

The hypogene background alteration consists of calcic–sodic metasomatism.

Alteration related to mineralization consists of development of actinolite and magnetite, with lesser chlorite, sericite, and hematite, that is associated with veins, feeders and banded rocks. The diorite unit has undergone biotite–magnetite replacement. Tourmaline has been observed related to the main feeder veins within the Atahualpa and La Atómica zones.

A major alteration feature is the so-called hanging wall alteration front, which controls the mineralization toward the “top” of the parallel-fractured monzonite and diorite units and the mineralization associated with dykes. Hematite, in association with sericite and pyrite, forms band replacements and veins. The feeders that crosscut the alteration limit displays a well- developed “argillic” halo.

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Figure 7-6: Structural Zones

Note: Figure prepared by Marimaca Copper, 2020. Figure shows structural zones superimposed on Project geology plan. In each zone, the figure in red is a strike rosette plot, and the sphere is a pole weighted contour plot. Black lines demarcate the zone extents.

7.3.4 Mineralization

The Marimaca deposit consists of a supergene copper blanket (oxides and enriched sulphides). Table 7-3 summarizes the characteristics of the main mineralization zones.

The oxide zone is exposed on surface, and has dimensions of about 1.4 km long, 400–600 m in width, and a thickness that ranges from 150–350 m. The shape of the oxide zone is controlled by the parallel fracture system and dikes, with the deeper zones of oxidation typically related to northwest-trending faults. However, the rhyodacitic dykes also have a role in the location of higher copper grade zones, in combination with feeders and veins.

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Figure 7-7 shows the distribution of the principal copper oxide mineralized zones, projected to surface, while Figure 7-8 is a cross-section showing the mineralization distribution. Most of the copper oxides occur as fracture staining and infill within fracture-veins and veinlets. Minerals in the upper copper oxide zone are typically zoned, extending outwards from brochantite, atacamite, chrysocolla and finally wad-rich zones. The brochantite zone contains more than 60% of the brochantite and or atacamite and 30–35% of chrysocolla, and forms high-grade cores. The chrysocolla zone borders the brochantite zone, and typically has >60% chrysocolla. The wad zone is the outermost zone, with the lowest copper grades, and typically displays about 90% non-green copper oxides.

The oxide zone grades into a mixed zone of oxide and sulphide materials. Chalcocite and covellite can occur as both primary and secondary sulphides, forming fracture stains, sulphide coatings, and massive replacement in breccias or veins (bands).

At depth, the primary mineralization is chalcopyrite in association with pyrite. The primary zones are not well defined due to the lack of drill data at depth.

The oxide blanket is better preserved in the southern part of the deposit area. Towards the north and east, it has been partially eroded, resulting in most of the wad and chrysocolla capping being removed. Brochantite that has been altered to atacamite crops out and has a more irregular distribution that is interpreted to be related to the main feeders and veins. Chrysocolla is better preserved closest to the surface at Marimaca, and within some ridges to the north.

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Table 7-3: Mineral Zone Summary

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Figure 7-7: Sub-Surface Mineralization Map

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 7-8: Cross-Section Showing Mineralization, Section NW 400

Note: Figure prepared by Marimaca Copper, 2020. Lix = Leachable

Figure 7-9: Cross-Section Showing Mineralization, Section NW 650

Note: Figure prepared by Marimaca Copper, 2020. Lix = Leachable

Wad is more consistently present towards the deposit eastern and northern margins and has been partially projected down-dip below the hanging wall alteration zone. Mixed zones are irregularly preserved in all of the oxide blanket area. The enriched zone is well preserved in the central part of the blanket.

An idealized schematic model of the deposit is provided in Figure 7-10, showing the precursor sulphide bodies in relation to the development of the oxide blanket.

7.4 Comments on Section 7

In the opinion of the QP, the geological, structural, alteration and mineralization data are sufficient to support Mineral Resource estimation.

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Figure 7-10: Deposit Model Schematic

Note: Figure prepared by Marimaca Copper, 2020. Idealized east–west section. MZD: monzodiorite; DIO: early diorite; MzdP: Monzodiorite Porphyry; PDA: dacitic dike. Sulphide mineralized bodies in red. Oxide blanket in green.

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8 Deposit Types

8.1 Overview

The Marimaca deposit appears to be a new deposit style and does not readily conform to any of the major published geological models.

The deposit occurs in a district that has a number of vein-style IOCG deposits, which have common features including regional metamorphism/metasomatism, Ca–Na alteration, the presence of magnetite and hematite, chalcopyrite as the major copper-bearing mineral, and an overall low sulphide content (Sillitoe, 2003; Richards and Mumin, 2013). The Marimaca deposit setting includes some of these elements.

However, Marimaca also has affinities with “manto-type” mineralization styles, although the monzodiorite mineralization host is unusual, since the known manto-type deposits are typically associated with volcanic piles. If the host rock issue is not taken into consideration, Marimaca is analogous to manto-type copper deposits such as Mantos Blancos (Chavez, 1983) or El Soldado (Boric et al., 2002). The critical role of structures, dykes, and alteration zoning is a common feature in these deposits. The deep and extensive development of supergene alteration and oxidation is similar to that seen at Mantos Blancos.

The sulphide and alteration mineralogy at Marimaca resemble those encountered within IOCG systems; however, the lack of iron oxides and gold and the occurrence of hypogene chalcocite and covellite are not common in IOCG deposits (Richards and Mumin, 2013). These features appear to be more frequent in the “manto-type” deposits. In alteration terms, Marimaca appears to be a hybrid of the manto-type and IOCG deposits.

8.2 Comments on Section 8

Exploration models that use features of the IOCG and manto type deposit styles, based on the information available on Marimaca to date, are likely to be applicable to future exploration activities.

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9 Exploration

Marimaca Copper is currently refining the geological interpretation and model for the Marimaca deposit with a focus on the sulphide potential below the Marimaca deposit and in the areas immediately surrounding the deposit. This work includes reassessing historical drilling data, remapping, sampling and, geophysical campaigns including drone-mounted magnetometry and induced polarization (IP) surveys, to assist with drill target identification to identify potential exploration targets for follow up drilling towards the end of 2020.

A preliminary scout drilling program was completed during the latter part of 2019,. which included 31 RC drill holes targeting the identification of new, near-surface, oxide mineralized copper zones to the north and south of the Marimaca deposit. A total of 27 out of the 31 drill holes encountered zones of oxide copper mineralization that supports additional follow up drilling. Several broad zones of copper mineralization were encountered that were higher- grade than the cut-off grade used in Section 14 for the Marimaca resource estimate.

The Marimaca alteration zone was found to extend for over 10 km across the Project area.

The Marimaca Project remains open to the north and south and at depth. Exploration potential for oxide copper deposits exists within Marimaca Copper’s extensive land holdings.

Based on a preliminary scout drilling program, the results appear to demonstrate structures carrying copper mineralization which may be an expression of Marimaca-style mineralization at depth.

The timeframe for any additional drilling campaigns is dependent on obtaining a Prospecting Environmental Impact Declaration (DIA in the Spanish acronym). The permitting process is underway and is expected to be concluded in late Q3 or early Q4 of 2020.

9.1 Surveying, Imagery and Topographic Base

The topographic base consists of a photographic and photogrammetric survey, using drone technology and digital cameras. The flight resolution was 8–13 cm per pixel, and a digital elevation model (DEM) was generated with interpolated curves at 1 m for use at a 1:1,000 scale. The topographical support is based on conventional topography, which, from official bases, generated a sufficient network of points to balance and orthorectify the image and DEM. The base uses PSAD 56 UTM coordinates. Figure 9-1 shows where the regional survey control points are located (a). It also provides examples of a registered control point (b) and the Atahualpa 1 1/154 co-ordinate base point (c).

The topographic base was updated during 2019. This was merged with the previous base and generated the topography surface used to constrain the Mineral Resource estimate in Section 14.

Underground workings were surveyed, using conventional survey instrumentation. Surveyed lines were used to generate tunnel-solids that were, in turn, used to deplete the resource estimate for the mined voids. An example of the resulting survey data showing the locations of the mined areas is provided in Figure 9-2.

Figure 9-1: Examples of Surface Survey Control

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Note: Figure prepared by Marimaca Copper, 2020.

Figure 9-2: Underground Workings

Note: Figure prepared by Marimaca Copper, 2020. Figure looks towards northeast.

9.2 Geological Mapping

A detailed surface geological map at 1:1,000 scale was completed by Investigaciones Mineras y Geológicas Ltda. (IMG) in 2017 (Kovacic, 2017), which was subsequently updated and

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extended by Marimaca Copper personnel (refer to Figure 7-4). A less detailed 1:5,000 scale was also used on occasion.

Underground workings were mapped and sampled. An example of the resulting mapping is provided in Figure 9-3.

Figure 9-3: Example Underground Geological Mapping

Note: Figure prepared by Marimaca Copper, 2020.

9.3 Geochemical Sampling

A program of road cut sampling was conducted in 2018–2019. Continuous chip samples were taken at 2 m intervals, for a total of 5,120 m of sampling. Sample locations are shown on Figure 9-4. Chip sampling, at 2 m intervals, was also conducted in the underground workings, with 8,028 m sampled. Sample locations are shown on Figure 9-5. The sampling indicated the areas of significant copper anomalism that could be further tested by drilling.

Reconnaissance rock chip sampling was conducted on an approximate 100 x 100 m grid, with sample locations recorded using a hand-held global positioning system instrument (GPS), and reported using PSAD56 UTM coordinates. The 200 ppm and 500 ppm copper contours shown in Figure 9-6 are co-incident with the oxide blanket. Other copper anomalies located above and below the hanging wall alteration zone are interpreted to be either veins or feeders.

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Figure 9-4: Surface Road-Cut Channel Chip Sample Location Plan

Note: Figure prepared by Marimaca Copper, 2020.

Figure 9-5: Underground Channel Chip Sampling Location Plan

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 9-6: Copper Geochemistry

Note: Figure prepared by Marimaca Copper, 2020. Orange line = 200 ppm copper contour; purple line = 500 ppm copper contour; dashed red outline is the outline of the copper block model.

9.4 Geophysical Surveys

Geophysics was not used as an exploration tool during the initial work program that discovered the Marimaca deposit. However, to determine if there was a relationship between mineralization at depth and high magnetite contents, a high-resolution aeromagnetic survey was carried out in 2016 using GeoMagDrone™ technology.

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Figure 9-7 shows the pole-reduced ground magnetics with the >0.1% Cu outline superimposed. A magnetic high lying adjacent to the eastern part of the deposit corresponds to the interpreted down-dip extensions of the mineralization below the hanging wall alteration zone. The easternmost drill holes in this area intercepted diorite that displayed intense magnetite–biotite alteration and disseminated sulphides, chiefly pyrite.

Figure 9-7: Pole Reduced Ground Magnetic Plan

Note: Figure prepared by Marimaca Copper, 2020. Magnetics shown in relation to (a) drill hole grid and (b) Cu block model projected to surface. Red dashed line is the 0.1% Cu outline.

Marimaca Copper completed a drone-mounted, high resolution, magnetic survey in 2020, over an area of 2 by 2 km which is directly over the Marimaca deposit and its immediate surrounding area. The results show a large magnetic anomaly adjacent to and underlying the current projection of Mineral Resource estimate continuity. The magnetic anomaly, which extends to at least 700 m depth below the mineralized area, appears to be controlled by the west–northwest-trending Manolo fault.

A representative east–west cross section is shown in Figure 9-8 demonstrating the correlation between the Marimaca deposit, the deep drilling sulphide intercepts and the projected high magnetic intensity solid, as interpreted using the Magnetic Vector Inversion modelling technique.

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Figure 9-8: Cross section with Interpreted Sulphide Zone, Previously Completed Sulphide Drill Results and Vector Inversion Magnetic Anomaly > 0.03 SI

Note: Figure prepared by Marimaca Copper, 2020.

9.5 Comments on Section 9

Exploration conducted to date has been suitable to identify areas of copper anomalism. Marimaca Copper has a large regional landholding which is prospective for additional copper mineralization.

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10 Drilling

10.1 Introduction

Table 10-1 summarizes the drilling completed to date by year. A total of 346 RC holes (82,234 m) and 39 core holes (8,976 m) have been completed. Drill collar locations are included in Figure 10-1.

10.2 Drill Methods

The RC drilling was completed by PerfoChile Ltda, with drill hole diameters from 5¾” to 5 ⅝”. Core drilling was performed at PQ (85 mm core diameter), HQ (63.5 mm) and HQ3 (61.1 mm) sizing, by Superex, a Chilean drilling contractor.

Collar locations were at 100 m or 50 m spacing, as dictated by topography, and the ability to construct drill platforms and pad accesses. Drill holes were typically oriented at either 220 º or 310 º. However, some holes were oriented at 270 º to test high-grade zones controlled by north–south-trending feeders and veins. Drill holes were angled at -60 º.

10.3 Logging Procedures

All drill holes were geologically logged using digital data capture methods. Information logged included lithology, structure, alteration and mineralization based on drilling intervals, recoveries and analytical results.

RC drill cuttings were cleaned prior to geological description. The first pass logging recorded lithology, structure and alteration. Oxide mineralogy was relogged when assay data were received. A chip tray record of the drill holes was stored.

Core holes were initially logged for lithology, structure, and alteration. When assay data were available, the data were correlated with the logged mineralization. Rock quality designation (RQD) data were also recorded.

In addition to measuring deviations, most of the holes were surveyed using an optical tele viewer (OPTV or BHTV), which continuously recorded structures and orientation measurements down the length of the drill hole (Figure 10-2).

10.4 Recovery

Recovery data were recorded for the RC and core drill holes. Measured recoveries are over 95% for both types of drilling, without significant variations. Recovery is considered to be unrelated to copper grades.

10.5 Collar Surveys

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Table 10-1: Drill Summary Table

Drill Number of Drill Metreage Year Location Purpose Type Holes (m) Exploration RC 15 2,710 2016 Marimaca Infill 100 x 100 m RC 39 8,910 Geometallurgy HQ core 6 2,008 Infill 50 x 50 m RC 59 11,928 Geometallurgy PQ core 4 820 2017 Marimaca HQ3 Geotechnical 6 1,230 core Marimaca Exploration RC 11 2,950 2017– Northeast 2018 La Atomica Exploration RC 14 3,220 Delineation RC 55 12,980 exploration EW exploration RC 6 1,050 La Atomica Manolo sector RC 9 2,120 exploration Geometallurgy PQ core 9 2,203 2018– Exploration RC 61 17,700 2019 Delineation RC 16 4,200 exploration Atahualpa–Tarso EW Exploration RC 32 7,266 Tarso exploration RC 29 7,200 Geometallurgy, PQ 14 2,715 Atahualpa Core Subtotal RC 346 82,234 Subtotal core 39 8,976 All drilling 385 91,210

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Figure 10-1: Drill Hole Collar Plan

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 10-2: Example of Drill Hole Survey and BHTV Data

Note: Figure prepared by Marimaca Copper, 2020.

10.6 Down Hole Surveys

Down hole surveys were completed by either Data Well Services or Comprobe. and the instrumentation included Giroscope NSG for survey and Optv, Hirat and Caliper probes for video. All readings were continuous to the end of the holes.

10.7 Sample Length/True Thickness

Drill holes are angled to best intercept the projected orientation of the mineralization. Typically, drilled widths are longer than true widths. Figure 7-8 and Figure 7-9 provides examples of the drill orientations in relation to mineralization.

10.8 Comments on Section 10

In the opinion of the QP, the quantity and quality of the lithological, collar and down-hole survey data collected in the drilling programs are sufficient to support Mineral Resource estimation:

 Core and RC logging is in line with industry standards  Collar surveys were performed using industry-standard instrumentation  Down-hole surveys performed were performed using industry-standard instrumentation  Recovery data from core drill programs are acceptable.

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11 Sample Preparation, Analyses and Security

11.1 Sampling Methods

11.1.1 Geochemical Sampling

The geochemical sampling programs are discussed in Section 9.3.

11.1.2 Reverse Circulation

Notably, no wet samples were encountered in these drill holes. RC drill holes were sampled on a 2 m continuous basis, with dry samples riffle split on-site and one quarter sent to the laboratory for preparation and assaying. A second quarter was stored on site for reference. The RC chips are stored in the field in old adits, as are coarse rejects of about 8–9 kg weight, obtained from the third riffle pass.

11.1.3 Core Sampling

11.1.3.1 Transfer of Trays to Sampler

The trays are covered using high-density foam to prevent movement in the tray. In turn, the trays are arranged in the truck with the same material to also avoid blows during transportation. The trays are tied firmly so that they will not fall out during the transfer, which must be carried out at low speed.

11.1.3.2 Core Markers

Core markers are placed at the end of each drilling run and must contain the name of the hole, depth, length of the drilled section and the recovery of the drilled section. This information is reviewed and compared with the shift reports and with the physical verification of the sample in the tray. If there are differences, these must be clarified at the time by the supervisor of the drilling company. Corrective actions are taken if necessary.

11.1.3.3 Calculation of Recovery and Regularization

The recoveries of the drilled sections are calculated and the sample actually recovered, the assignment of the sampling support is also made, for this the recovery and drilling a yellow wooden block with the name of the well and the regularized section is located. The trays are also marked, indicating the beginning and bottom of the segment.

11.1.3.4 Fracture Frequency and Rock Quality Designation Measurements

Geotechnical parameters rock quality designation (RQD) and fracture frequency (FF) are recorded, as are visual fractures and faults.

11.1.3.5 Geological Logging

Cores are logged for lithology, structures, mineralogy, and alteration. Geologists mark-up the core for sampling, respecting geological boundaries in accordance with Marimaca Copper’s sampling protocol.

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11.1.3.6 Pre-Split Photography

High definition photographs are taken of the trays, using natural light, and wet core. The photographs are reviewed and approved by Marimaca Resources personnel.

11.1.3.7 Pre-Split Weight Control

The mass of the tray is controlled and recorded before sampling, in order to be able to determine the amount of sample sent for analysis.

11.1.3.8 Splitting and Sampling

The sample is cut into two equal parts using an electro-hydraulic guillotine. One half is kept in the tray and the other half is wrapped, marked and bagged ready to be sent for sample preparation and analysis.

11.1.3.9 Post-Split Weight Control

The core remaining in the core trays is weighed, and the weights recorded. These data are used to monitor the sample weights reported by the laboratory.

11.1.3.10 Post-Split Photography

High definition visual registration of the trays already sampled, trays are placed on the lectern and the photograph is taken with the wet test media to obtain greater enhancement of colours and textures. Photographs also are reviewed and approved by Marimaca Resources.

11.1.3.11 Weight Control of Bagged Sample

All bagged samples are weighed and the weights recorded. These data are used to monitor the sample weights reported by the laboratory.

11.1.3.12 Storage

Core and RC samples are retained as follows:

 RC d “B” and “C” splits are stored in adits on site  RC sample pulps, initial and duplicate RC samples, and core sample pulps (drill holes MAD-07 to MAD-16) are stored in the sample warehouse.  Core trays for core drill holes MAD-01 to MAD-16, ATD-01 to ATD-13, and LAD-01 to LAD-09 are stored in the sample core yard.

Figure 11-1 shows a diagram of the core sampling protocol.

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Figure 11-1: Core Sample Process

Note: Figure prepared by Marimaca Copper, 2020

11.2 Specific Gravity Determinations

Specific gravity (SG) was measured systematically on core samples at approximately 20 m intervals. The core samples ranged in length from 7–26 cm. Each selected piece of core was logged in detail and photographed.

The SG was determined on wax-coated core using a water displacement method where the core was weighed in air, and then in water. Measurements were performed by the Mecánica de Rocas (Rock Mechanics) laboratory at Calama.

Fifty-eight measurements were completed in 2016, 98 in 2017, and 427 in 2018, for a total of 562 measurements as shown in Table 11-1.

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Table 11-1: Samples

Sample Sector Number of Total Types Samples Marimaca 319 Drill hole Atomica 78 502 Atahualpa 105 Underground 30 30 Road Cuts 30 30

The average SG of each estimation unit was calculated based on each mineral zone, eliminating outliers Table 11-2 shows the SG and variance for each of the mineralized zones.

Table 11-2: Average SG values

Mean Variance SZMIN (t/m3) Brochantite 2.639 0.0778 Chalcopyrite 2.719 0.0709 Chrysocolla 2.670 0.0505 Enriched 2.649 0.1043 Waste 2.645 0.0964 Lix 2.663 0.0746 Mixed 2.688 0.0803 Pyrite 2.711 0.0366 Wad 2.642 0.0550

11.3 Analytical and Test Laboratories

From the 2017 infill drilling campaign onward, samples were prepared in the Andes Analytical Assay Ltda (Andes Analytical) Calama laboratory and assayed by the Andes Analytical laboratory in Santiago. Andes Analytical holds ISO 9001:2008 accreditations for selected analytical techniques and is independent of Marimaca Copper.

Andes Analytical acted as an umpire laboratory for the 2015 drill campaign. Marimaca Copper did not employ an umpire laboratory for the remainder of the campaigns.

11.4 Sample Preparation and Analysis

Samples were transferred by laboratory personnel from the Project site to either the Copiapó or Calama facilities for sample preparation. Preparation pulps were returned to the project storage facilities to generate the analysis batches with inserts for the quality assurance and quality control (QA/QC) program.

Upon arrival at the laboratory, the RC and core samples were organized, and the sample numbers recorded. Sample preparation consisted of:

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 Drying at 105°C  Crushing to 85% passing 10 mesh  Splitting using a rotary splitter  Pulverizing a 500–700 g sample to 95% passing 150 mesh  Collection of three samples, two at 125 g each, and one at 250 g  Despatch of the sample envelopes to MCAL for insertion of QA/QC samples.

Total copper (CuT) was analysed using a 1 g digestion with 10 mL mixture HNO 3 + 4 mL HClO 4 + 1 mL H 2SO 4 in 20 mL dilution of 50% HCl for a 100 mL gauge flask, followed by an atomic absorption spectroscopy (AAS) finish. The detection limit was 0.01% CuT.

Soluble copper (CuS) was analysed using 1 g leaching with 50 mL H 2SO 4 in a 250 ml gauge flask, followed by shaking at 130 rpm for one hour, and AAS analysis. The detection limit was 0.01% CuS.

11.5 Quality Assurance and Quality Control

11.5.1 Introduction

The analytical QC programs involved the use of preparation and pulp duplicates for precision analyses, standard reference materials (SRMs) and check samples for accuracy analyses (Table 11-3)

Fine blanks for contamination evaluation were used from 2018 onward. Field duplicates and coarse blanks were not used in any of the analytical campaigns.

11.5.2 Check Sample Analysis

Check samples, consisting of 240 duplicate pulp pairs, were the sole quality control measure for the 2016 MAR 01–16 pilot drilling campaign and were taken at an approximate rate of one check sample for every six samples.

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Table 11-3: Control Programs for Each Drilling Campaign

Drill Check Coarse Pulp Fine Campaign Type Year Laboratory SRM Holes Sample Duplicate Duplicate Blank

Geolaquim/ MAR 01-16 16 RC 2016 Andes X — — — — Analytica

MAR 17-54 38 RC 2016 Geolaquim — X X X —

MAD 01-06 6 Core 2016 Geolaquim — - X X —

Andes MAR 55-111 59 RC 2017 — X X X — Analytica

Andes LAR 01-14 14 RC 2017 — X X X X* Analytica

Andes MAD 07-16 10 Core 2017 — - X X X* Analytica

Andes MAR 112-124 11 RC 2018 — X X X X* Analytica

Andes LAR 15-84 70 RC 2018 — X X X X Analytica

AER 01-03 Andes ATR 01-104 120 RC 2019 — X X X X Analytica TAR 01-13

ATD 01-13 Andes 22 Core 2019 — — X X X LAD 01-09 Analytica

Note: * indicates that these samples were not true blanks, but instead, were low-grade SRMs.

No other check sampling campaigns were completed.

The check samples were evaluated using reduced major axis (RMA) regression plots. In these plots, the coefficient of determination (R 2), should approximate one to be acceptable, and the slope (RMAS), allowing for a bias percentage calculation (1-RMAS), should approximate zero to be acceptable.

Table 11-4 and Figure 11-2 show the check sample evaluation results.

This campaign shows acceptable accuracy in principle, though with moderate uncertainty, due to a lack of appropriate control programs accompanying check samples to the main and especially the umpire laboratory.

However, given that the amount of check samples exceeds industry requirements by a considerable margin, and that the RMA regression shows a decisively strong assay

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correlation between laboratories, the probability of quality control issues in the dataset is mitigated to some extent in the QP’s opinion.

Table 11-4: Check Sample Analysis, MAR 01–16 Campaign

AV Duplicate Check Samples %CuT Bias R2 Pairs Original Duplicate MAR 01-16 240 0.816 0.819 0.01% 0.99

Figure 11-2: Check Sample Regression MAR 01–16 Campaign

Note: Figure prepared by Marimaca, 2020. GLQ = Geolaquim, AAA = Andes Analytica.

11.5.3 Standard Reference Material Analysis

SRMs were sourced from two companies. SRMs from Geostats Pty Ltd (Australia) were used during 2016–2018, with 832 samples of 17 materials, inserted at an approximate rate of one SRM every 16 samples.

SRMs sourced from Intem Ltd. (Chile) were used during 2018–2019, with 1,154 samples of six different SRMs, inserted at an approximate rate of one SRM every 25 samples for RC drill holes and one SRM every 15 samples for core holes.

Geostats’ SRMs come from different sources, depending on the required grade. Intem’s SRMs were prepared from pulp samples sourced from RC drill holes within the Project area, homogenized and analyzed in a round-robin program, to obtain best values (BV).

The QP reviewed the SRM data. The first step was to remove outliers, which were defined as samples with values that exceeded a window of ±3 standard deviations (SD) of each SRM dataset. Outliers should not form more than 5% of the database. The average values of the filtered dataset were compared to the best values, by calculating the bias (AV/BV-1), which should not exceed ±5% (with a tolerance of ±10%). Finally, Shewhart control charts were

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constructed, plotting a time series of the SRM values against acceptability (precision) windows of BV±2*SD / BV±3*SD (round-robin SD) in the case of Geostats SRMs, or BV±5% / BV±10% in the case of Intem SRMs. Assay values surpassing these windows are considered outliers and should remain below 5% of all samples (with an extreme tolerance of 10%), especially in the case of the outermost windows.

The analytical campaigns show acceptable accuracy (bias %) and precision (outliers %) in principle, though with moderate to high uncertainty in some cases, due to the number of different SRMs used (some with very similar copper grades) and the number of samples inserted for each SRM.

Usually, three to five SRMs of different grade values, inserted at an approximate rate of one SRM every 15 samples, are sufficient for a project with only one economically important element. Here, although the insertion rate is appropriate, there are six Intem SRMs and 17 Geostats SRMs. It is because of this that there are usually only a few assays for each SRM, which leads to uncertainty when facing unacceptable percentages, given that a single anomalous sample can take the small dataset past the acceptability windows.

The change of SRM provider and its preparation methodology allowed for better accuracy control in recent campaigns, reducing the number of SRMs used, and increasing the number of samples inserted in each campaign. This, in turn, has led to more reliable SRM analyses, although there are still instances where assays are insufficient to identify a problem with certainty.

The increased insertion rate to one every 25 samples for RC drill holes could lead to uncertainty in shorter campaigns. The number of MRC-2 samples, which is unusually high compared to other materials, probably due to availability, is a further source of uncertainty.

The two recent campaigns show acceptable accuracy (bias %) and precision (outliers %).

11.5.4 Duplicate Sample Analysis

Preparation and pulp duplicate samples were inserted in every campaign, except for the pilot program. The insertion rate for the RC programs was approximately one every 15 samples, resulting in 2,750 coarse duplicate samples and 2,822 pulp duplicate samples. The insertion rate for the core holes was one in 10 samples, resulting 477 pulp duplicate samples.

The QP’s duplicate sample review began with a relative error (RE) analysis, calculating the absolute percentage value of 2*(OA-DA)/(OA+DA), where OA refers to the original assay and DA to the duplicate assay values. Relative errors should generally remain below 20% for coarse duplicate pairs and below 10% for pulp duplicate pairs. The practical detection limit (PDL) was obtained by plotting original assay values against their corresponding relative error and identifying the approximate value where low-grade assays curve upward approaching a vertical limit near the reported detection limit (RDL). This value is the practical detection limit. Duplicate pairs were validated using the hyperbolic method. This function acts as an acceptability boundary, which compensates for higher relative errors at lower grades. Failed pairs should remain below 10% of all duplicate samples.

All campaigns show acceptable precision and insertion rates that far exceed industry requirements. Even though drilling campaign MAR 17-54 is not as good as the rest in terms of percentage of failed pairs and relative error, it is still well within acceptability boundaries. As mentioned in the check sample analysis, the pilot drilling campaign (MAR 01-16) lacks the necessary control program along with the check samples, so it cannot be analyzed for precision. However, the good assay correlation between laboratories hints at an acceptable reproducibility.

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No field duplicates were collected in any campaign, which means that the first split right after drilling is not properly controlled. The QP recommends that Marimaca Copper reduces the coarse and pulp duplicate insertion rates to one in every 25 samples each and it introduces field duplicates at the same insertion rate of one in every 25 samples.

The duplicate sample analysis shows acceptable precision with virtually no observations, other than for the lack of duplicates in the pilot drilling campaign. This issue is somewhat mitigated thanks to the strong correlation between check samples.

11.5.5 Blank Sample Analysis

Blank samples were not included in the 2016–2017 drill campaigns. Since 2018, 912 fine blanks were inserted in the form of a very low-grade SRM (MRC-1, with 0.006% CuT), at an approximate rate of one every 30 samples for RC drill holes and one every 45 samples for core holes. This SRM is technically not a blank because it does not have a copper grade below the RDL, which is usually 0.001% CuT in standard AAS tests, but in the QP’s opinion, it is sufficiently close to the RDL to treat it as such.

The sample review was undertaken by plotting a time series of blank assay values against an acceptability limit of 3–5 times the RDL. As with SRMs, outliers should remain below 5% of all samples. Since MRC-1 is a slightly higher value “blank”, it seems reasonable to use the lower factor (3*RDL) and the acceptability limit as a window of ±3*RDL (±0.003% CuT) from the best value (BV) of the SRM. If there is an unacceptable outlier percentage, blank assay values are plotted against their corresponding previous sample values in an RMA regression, to look for a correlation (high R 2 value) that would imply systematic error and thus contamination during sample preparation (coarse blanks) or assaying (fine blanks).

The campaigns show acceptable results, with no apparent contamination. The lack of blanks in previous campaigns can be relatively mitigated in the QP’s opinion by reviewing the quality controls performed and reported by the laboratory. A review was conducted of the QA/QC protocols used by Geolaquim and the Andes Analytical reports. Both laboratories appear to have well-structured quality control measures in place, including the insertion of blank samples.

Coarse blanks were not included in any campaign, which means that potential contamination during sample preparation is not properly controlled. The QP recommends that Marimaca Copper reduce the current fine blank insertion rates to one every 50 samples and introduce insertion of coarse blanks at the same insertion rate of one every 50 samples.

The blank sample analysis shows no evidence of contamination. The lack of blank samples in previous campaigns, while not irrelevant, is of moderate to low concern, especially after reviewing the quality controls performed and reported by both laboratories. Because the SRM and duplicate sample analyses performed acceptably, it seems reasonable to infer that there is a low probability for contamination in campaigns that are missing blanks.

11.6 Analysis of Core vs RC Holes (twin)

To validate the use of data from the core and RC exploration campaigns, a comparison was undertaken of 11 drill holes that were within a maximum of 10 m separation (Figure 11-3). The GSLib Getpairs routine was used for this work.

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Figure 11-3: Location of Drill Holes used in RC/Core Comparison

Note: Figured prepared by Marimaca, 2020.

The average CuT and CuS grades from the core and RC drilling were compared (Table 11-5). In NCL’s opinion, these averages are very similar. A scatterplot of the CuT and CuS grades from the core and RC drilling is provided in Figure 11-5.

To validate the use of data from the DDH and RC exploration campaigns, samples close to 10m maximum, from both exploration campaigns 11 twin holes were compared. The GSLib getpairs routine was used for this work.

When comparing the averages of CuT and CuS grade of DDH and RC drilling it is observed that these averages are very similar and there is no global error. The Table 11-5 shows the average CuT and CuS, for DDH and RC drilling.

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Table 11-5: Average CuT and CuS, for DDG and RC drilling.

Average (%) Range Pairs CUT_RC CUT_DDH 0 - 10m 0.45 0.43 20,228

Average (%) Range Pairs CUS_RC CUS_DDH 0- 10m 0.24 0.23 16,210

When comparing the scatterplot of CuT and CuS from DDH and RC drilling, it is observed that the pairs of nearby samples have a high dispersion. However, this dispersion is typical of the deposit, since when cross-validating with the nearest neighbor, the same behavior is observed therefore it was concluded that the use of DDH and RC samples together does not introduce a bias in the data. Apart from this geostatistics comparisons, the best correlation corresponds to the 220-azimuth group of drills. This direction corresponds with the most perpendicular to the NW trending fracture system controlling supergene mineralization trend. So, the direction that penetrate the mineralization trend in oblique way may not have good correlations.

11.7 Databases

Assay data were loaded directly from digital assay result files into the final database to minimize sources of error using "LogSon" program, with updates 2018 and 2019.

The mapping of alteration minerals, minerals and ganga is done independently, respecting natural breaks in the case of DDH drilling and AR boxes sampling support. Figure 11-1 shows sequence of the data entry:

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Figure 11-4: Sequence of data entry

Note: Figured prepared by Marimaca Copper, 2020.

The reviews carried out by the QP, including the data entry process to the software’s used for the revision procedure, indicated that there were no major problems, only some minor repetitions or different signs. The lithology, geotechnical parameters, alteration, mineralogy and all numeric data, worked very well in the 3D software’s and in the estimation processes.

11.8 Sample Security

All drilling assay samples were collected by Marimaca Copper personnel or under the direct supervision of Marimaca Copper personnel. Samples were shipped directly from the Project site to the laboratory.

Assay samples are catalogued by appropriately qualified staff at the laboratories. Sample security involved two aspects: maintaining the chain of custody of samples to prevent contamination or mixing of samples and rendering active tampering as difficult as possible.

During site visits, NCL found no evidence of active tampering or contamination of assay samples.

11.9 Comments on Section 11

The QP reviewed the field procedures and performed an extensive analytical quality control review of the data provided by Marimaca Copper. In the opinion of the QP, Marimaca Copper personnel used care in the collection and management of the field and assaying exploration data.

Based on reports and data available, the QP has no reason to doubt the reliability of exploration and production information provided by Marimaca Copper.

The reports and analytical results projected by the QP suggest that, apart from minor to moderate concerns noted in the 2016–2017 campaigns, analytical results delivered by the laboratories used by Marimaca Copper are free of apparent bias.

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The sample preparation and analytical procedures used by the independent laboratories are in line with industry norms. Sample security practices are acceptable.

The data generated from the analytical programs is suitable for use in Mineral Resource estimation.

Figure 11-5: Scatter Plot CuT vs CuS

Note: Figure prepared by Marimaca Copper, 2020.

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12 Data Verification

12.1 Internal Data Verification

The exploration and production work completed by Coro was conducted using internally documented procedures and involved verification and validation of exploration and production data prior to use of the data in geological modelling and Mineral Resource estimation.

During drilling, experienced geologists conducted industry-standard measures designed to ensure the consistency and reliability of the exploration data.

Quality control failures were investigated, and appropriate actions were taken when necessary, including requesting re-assaying of certain sample batches.

12.2 Data Verifications by NCL

Professionals under the supervision of NCL visited the Marimaca properties on December 6– 7, 2016, accompanied by Sergio Rivera, Marimaca Copper’s Vice President of Exploration. The team included Ricardo Palma, P. Eng. and Luis Oviedo P. Geo. NCL carried out a second site visit during 28 to 31 August 2019 to verify aspects of the drill program that was underway at the time.

During the visits, aspects that could impact the integrity of the drill hole database (e.g. core logging, sampling, and database management) were reviewed with Marimaca Copper staff. NCL was able to interview Marimaca Copper staff to ascertain exploration procedures and explanation of protocols written protocols.

NCL toured the Marimaca area and observed core and RC drill sites, collars and collar monumenting. NCL examined core from several drill holes, finding that the logging information accurately reflected the inspected core and cuttings. The lithology and grade contacts checked by NCL matched the information reported in the core logs.

The QP reviewed the drill hole database during preparation of the 2020 resource estimate update and concluded that it was adequate to support block modelling, and Mineral Resource estimation.

NCL also completed statistical comparisons of the global grade of the block model against the informing drilling data. NCL visually compared the block model against the informing samples on plans and sections to confirm that the estimations were generally an adequate representation of the distribution of the copper mineralization.

12.3 Comments on Section 12

The QP is of the opinion that the data verification programs completed on the data collected from the Project are consistent with current industry practices and that the database is sufficiently error-free to support the geological interpretations and Mineral Resource estimation, and preliminary mine planning.

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13 Mineral Processing and Metallurgical Testing

13.1 Metallurgical Testing

Marimaca Copper Corp. has completed three test programs (Geomet I, II and III) to characterize the metallurgical response to samples collected from its Marimaca copper project. Preliminary tests were performed considering parameters such as: mineral subzone, agglomeration conditions, particle size, column height, irrigation rate and acid concentration in the irrigation solution.

Additionally, during the preparation of this document (Section 13 PEA August 2020), a fourth metallurgical testing program was in progress (Geomet IV). Definition of the next steps that include analysis of the metallurgical variability of the deposit and the optimization of the metallurgical parameters is on-going. The experimental results of Geomet IV support the definitions of the current PEA and do not contradict the PEA definitions and assumptions. These results and the complete metallurgical analysis will be part of the next project stage.

The following summarizes each of these metallurgical testing programs and their results.

13.1.1 Geomet I & II

13.1.1.1 Samples

Seven (7) samples where generated for column testing from copper mineralized zones defined during the 2016 drilling campaign. These were obtained from a matrix linking the spatial location with the mineral zones.

A portion of the samples correspond to monzodiorite (diorite with potassium feldspar) affected by an albite-chlorite-actinolite alteration; a minor part to the andesitic and dacitic dikes composition that cut the monzodiorite. Oxide mineralogy is brochantite, atacamite, chrysocolla and wad. Most of the oxide mineralized material occurs as fracture impregnation and filling.

The samples used for this testing were named: Marimet 1, Marimet 2, Marimet 3, Marimet 4, Marimet 5, Marimet 6 and Marimet 7, abbreviated as M1, M2, M3, M4, M5, M6 and M7. Table 13-1 shows the chemical characterization of each sample and a simple description of its mineralogy and location.

13.1.1.2 Analytical Procedure

In April 2017, Geomet was commissioned to start phase 1 of the initial metallurgical program, which considered 7 samples from the three aforementioned metallurgical units and whose scope included the mechanical preparation of the material, its characterization, head particle size analysis, sulphation tests, iso-pH tests, leaching tests at two crush sizes in seven columns of 6” x 1 meter in duplicate including leach residue analysis.

Based on the phase 1 results, Geomet was commissioned again in September 2017 to execute phase 2 of the metallurgical program using the same samples.

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Table 13-1: Chemical and Mineralogical Characterization.

Solubility CuT CuS AAC** Mineralogical Characterization Sample Ratio (%) (%) (location) (RS)*(%) (kg/t) M1 0.88 0.71 80 49 Chrysocolla (Pit 2) Brochantite/atacamite > Supergene M2 1.47 1.17 79 32 sulphide (Pit 2) M3 0.49 0.32 65 53 Wad dominant (Pit 2) M4 0.81 0.71 87 39 Chrysocolla (Pit 1) M5 1.14 0.97 85 39 Brochantite/atacamite (Pit 1) Wad dominant > supergene sulphide M6 0.62 0.47 75 30 (Pit 1) Mixed primary Sulphides-supergene > M7 0.58 0.40 69 23 oxide (High Pit)

*Copper Solubility Ratio or RS defined as the CuS over CuT ratio.

**Analytical Acid Consumption assay: 10 g of sample in 100 mL of 1N sulphuric acid solution for 2 hours.

Crush size

The crush size for these tests was 90% below ½”. Figure 13-1 shows the particle size distribution obtained for each sample.

Figure 13-1: Particle Size Distribution

Note: Figure prepared by Marimaca, 2020.

Irrigation Rate:

The initial tests were performed with an irrigation rate close to 10 L/h/m 2, the new tests were adjusted to a lower rate, approximately 8 L/h/m 2, trying to achieve a higher copper concentration. For the case of the initial tests, 9.5 gpl acid was used, and in the new tests a sulphuric acid concentration around 10.5 gpl was used.

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Acid in Agglomeration:

In the first 1 m height tests, almost all columns reached a deficiency of acid application, with the effluent solution having too high pH to leach the copper. Consequently, a new series of sulphation tests were run to better define the amount of acid to be added to each sample in the agglomeration stage.

Each sample, M1 to M7, was subjected to sulphation tests using three different acid doses of low-, mid- and high-dose.

Column Height

As stated above, most tests were performed at different heights, between 1.6 m and 3 m. Table 13-2 shows the height for each sample in the metallurgical column test executed.

Table 13-2: Column Height per Sample

Sample M1 M2 M3 M4 M5 M6 M7 Column Height (m) 2.7 2.2 1.6 3.0 2.5 3.0 2.8

Leaching Time, Leaching Ratio and Acid Consumption:

Initially, it was determined to use a fixed leach solution ratio of at least 2.5 m 3/t to compensate for the variable column height.

However, all tests were terminated between 64 and 66 days, hence the leaching ratio varied for each one of the columns due to the varying height. Therefore the overall acid consumption, measured in kg/t, was variable for each test, not only for acid addition during the agglomeration stage, but also because of the excess volume of leaching solution passed per tonne of treated material in the lower height columns.

13.1.1.3 Main Results

Sulphation tests

Table 13-3 show the sulphation test results and graphs for the seven samples.

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Table 13-3: M1 to M7 Sulphation Tests Results.

The best sulphation results, metallurgically speaking, are highlighted in yellow and green. The goal of this test is to add sufficient acid, but not excessive, to achieve a pH of 1.8 to 2.1 in the wash water from the agglomerates.

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For samples with the same or similar CuT grade, the sulphation result, at the same particle size, is a clear indicator of the acid soluble copper content (CuS).

The acid addition for each sample to add in agglomeration, resulting from these sulphation tests, is shown in Table 13-4.

Table 13-4: Acid Addition in Agglomeration per Sample.

Sample M1 M2 M3 M4 M5 M6 M7 Added Acid (kg/t) 28 32 27 27 25 21 21

Column Leaching Tests

Table 13-5 shows the general results of each of the tests for the samples M1 to M7 with the 90% -½” particle size distribution.

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Table 13-5:Column Leaching Results Summary.

LEACHING SUMMARY

Head Grade (%) Results ) 2

ID Acid Cu Extraction (%) Account Consumption (kg/t) CuT CuS RS AQ Calc. Final Net or (%) Gross Head Tail Gangue Sample IrrigationRate (L/h/m Height (m) Leach.OFF Ratio Head

Col-29 Marimet-1 8 2.7 3.21 0.88 0.707 80.4 83.6 83.5 83.4 100.2 59.8 48.4

Col-30 Marimet-1 8 2.7 3.15 0.88 0.707 80.4 79.4 82.7 83.4 96.1 60 49.3

Col-31 Marimet-2 8 2.2 3.19 1.47 1.169 79.6 71.5 76.4 77.9 93.5 70.1 53.9 Col-32 Marimet-2 8 2.2 3.21 1.47 1.169 79.6 70.4 76.2 77.9 92.5 69.8 53.8 Col-33 Marimet-3 8 1.6 4.46 0.49 0.318 65.3 68.6 72.6 74.1 94.5 63.7 58.5 Col-34 Marimet-3 8 1.7 4.41 0.49 0.318 65.3 70.5 72.6 73.3 97.2 65.7 60.4 Col-35 Marimet-4 8 3 2.53 0.81 0.706 87.3 77 81.6 82.6 94.4 57 47.4 Col-36 Marimet-4 8 3 2.54 0.81 0.706 87.3 75.9 80.7 81.9 94.1 56.7 47.2 Col-37 Marimet-5 8 2.5 2.91 1.14 0.966 85 78.8 84.2 85.2 93.6 53.2 39.4

Col-38 Marimet-5 8 2.5 2.91 1.14 0.966 85 80.5 83.9 84.5 96 53.7 39.7 Col-39 Marimet-6 8 3 2.61 0.62 0.468 75.1 75.1 76.9 77.5 97.6 46.7 39.5 Col-40 Marimet-6 8 3 2.62 0.62 0.468 75.1 73.3 77.2 78.3 95 46.8 39.8 Col-41 Marimet-7 8 2.8 2.78 0.58 0.398 68.1 62.6 68.5 71.2 91.5 48.8 43.2 Col-42 Marimet-7 8 2.8 3.05 0.58 0.398 68.1 62.8 71.2 74.6 88.3 47.7 42.1

Columns have acceptable metallurgical accounting results with half of them achieving 100+- 5% on a CuT head assay versus CuT “calculated” head basis. The rest achieved 100+-10% or better. Head and leached residue sample pulps where sent for check-assaying with acceptable results.

Sulphuric Acid Consumption

All the Geomet II columns (Table 13-5) and some of iso-pH tests (Table 13-6) reached an acid consumption higher than the Analytic Acid Consumption (AAC) of the sample, which is usually referred as the maximum acid consumption achievable in a typical leaching process as is performed with samples below #150 Tyler mesh at a higher acid content (50 gpl acid).

This high acid consumption may be partially explained due to the fact that the leaching solution does not have any impurities present, such as Fe, Al and Mg, which, if present in the leaching solution, might reduce their dissolution from the mineral.

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Table 13-6: Geomet I Iso-pH Test.

Iso pH Test Head Grade Iso pH Test Results Conditions Sample Soluble. Gross Net H + CuS AAC Time CuT + CuT % CuS/CuT pH H Cons. Cons. % kg/t h Recovery % kg/t kg/t M1 0.937 0.732 78 49 1.5 48 85 44 32 M2 1.502 1.133 75 32 1.5 48 82 64 44 M3 0.456 0.272 60 53 1.5 48 66 42 37 M4 0.851 0.715 84 39 1.5 48 88 50 38 M5 1.157 0.977 84 39 1.5 48 86 35 19 M6 0.622 0.436 70 30 1.5 48 73 29 22 M7 0.626 0.402 64 23 1.5 48 65 44 37

Copper Extraction and Acid Consumption Profiles

The CuT extraction rate and profiles for the tested samples are typical of acid soluble oxide minerals. The initial dissolution, with most of the acid added in agglomeration, is rapid, followed by a slower leaching residual mineral.

Figure 13-2 also shows that M1, M2 and M5, the samples with the highest acid consumption, continues to consume acid almost linearly and continues beyond the 1 m 3/t target leach ratio.

Figure 13-2: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-1, M-3 and M-5.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-3 shows that the M2 and M4 samples continue to consume acid almost linearly and continues beyond the 2 m 3/t target leach ratio.

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Figure 13-3: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-2 and M-4.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-4 shows that the samples which have a lower consumption than the others, M6 and M7, once reaching 1 m 3/t of solution application, start showing un-reacted free acid, which is similar to samples for all mineral types.

Figure 13-4: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-6 and M-7.

Note: Figure prepared by Marimaca, 2020.

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Figure 13-5: Cu Extraction (%), Starting H+ Addition in Agglomeration and Consumption (kg/t) vs Leaching Ratio (m2/t), M-1, M-3, M-5, M-6 and M-7

Note: Figure prepared by Marimaca Copper, 2020.

13.1.1.4 Conclusions

The recoveries and the acid consumption that may be estimated from the performed tests, for the indicated copper grades, are as follows:

 The M1 sample, corresponding to a CuT grade between 1.0% and 0.8% and a mineral- type description as Chrysocolla, has a recovery of 77% and a net (Gangue) acid consumption of 42 kg/t.  The M3 sample, corresponding to a CuT grade between 0.4% and 0.5% and a mineral- type description as Wad -Chrysocolla – Brochantite/Atacamite, has a recovery of 62% and a net (Gangue) acid consumption of 52 kg/t.  The M5 sample, corresponding to a CuT grade between 1.2% and 1% and a mineral- type of Brochantite/Atacamite, has a recovery of 76% and a net (Gangue) acid consumption of 37 kg/t.  The M6 sample, corresponding to a CuT grade between 0.6% and 0.43% and a mineral-type of Wad and Supergene Sulphide, has a recovery of 70% and a net (Gangue) acid consumption of 38 kg/t.  The M7 sample, corresponding to a CuT grade between 0.6% and 0.5% and a mineral- type of Mix of Primary Sulphide and Supergene-Oxides, has a recovery of 58% and a net (Gangue) acid consumption of 40 kg/t.  The M2 sample, corresponding to a CuT grade between 1.5% and 1.3% and a mineral- type of mainly Brochantite/Atacamite with minor Supergene Sulphide, but which has a high sulphuric acid consumption, has a recovery of 67% and a net (Gangue) acid consumption of 50 kg/t.

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The leaching kinetics for all samples is fast, at one-third of the leaching cycle achieving 70% to 80% recovery.

The expected net (Gangue) acid consumption is estimated to be between slightly below 40 kg/t up to 60 kg/t.

13.1.2 Geomet III

13.1.2.1 Samples

In Geomet III the samples tested were of a higher proportion of brochantite/atacamite and chrysocolla mineral-type as these two mineral-types will be treated in the first years from the near-surface (5 to 10 meters) mining. Thirty-seven (37) composites where obtained from 13 drill hole locations - 10 were Reverse Circulation (RC) and 3 were from Diamond Drill Hole (DDH) core.

13.1.2.2 Test Description

This test program included the Head Chemical Characterization of the 37 composites (CuT, CuS, FeT, Al, Mg, CAA, CO3, AlS, FeTS and MgS) and the completion of 42 iso-pH 1.5 tests, 37 of them at 48hrs and 5 at 72 hrs.

13.1.2.3 Main Results

The bottle-roll test results are shown in Table 13-7. The values in red were re-assayed with similar results. The new values are shown in the table. These corrected values for samples M-21, M-25 and M-35 are not well-balanced yet according to related data.

Regarding copper recovery, except for M-21, M-22 and M-23, over 100% of the soluble copper ratio (acid soluble assay) was recovered. This is consistent with this trend in the Geomet II column testing for the oxide mineral-type.

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Table 13-7: Iso-pH tests, CuT recovery and acid consumption

Avg Acid Leach CuT Sol. Copper Recovery Head CuS .CuT Ratio Consumption Sample Time Ratio AQ Rec. Leach ID (%) A.H. C.H. F.T. Gross Net CO 3 CAA (h) (%) (%) Rec./CuS (%) (%) (%) (%) (kg/t) (kg/t) (%) (kg/t) M-4 48 1.01 0.81 80.00 83.3 85.2 85.6 84.7 1.06 35.8 22.9 0.15 28.8 M-5 48 0.74 0.48 64.73 72.7 75.4 76.2 74.8 1.16 30.4 22.1 0.15 35.5 M-6 48 0.37 0.26 70.05 79.8 82.8 83.4 82.0 1.17 44.3 39.8 1.10 48.1 M-7 48 0.87 0.55 63.35 74.6 75.0 75.2 74.9 1.18 33.3 23.3 0.05 37.8 M-8 48 1.66 1.36 81.64 83.5 85.0 85.3 84.6 1.04 40.8 19.4 0.05 40.2 M-9 48 1.13 0.87 77.10 82.4 85.6 86.1 84.7 1.10 40.3 26.0 0.45 50.3 M-10 48 0.67 0.53 79.54 83.9 87.5 88.0 86.5 1.09 39.9 31.2 0.40 37.5 M-10 72 0.67 0.53 79.54 87.0 88.0 88.2 87.7 1.10 42.3 34.0 0.40 37.5 M-11 48 0.61 0.47 76.78 82.6 84.1 84.4 83.7 1.09 39.4 31.6 0.60 34.6 M-12 48 1.05 0.96 90.93 93.4 93.3 93.3 93.3 1.03 42.2 27.0 0.10 48.2 M-13 48 0.65 0.56 86.27 87.4 89.2 89.5 88.7 1.03 33.5 24.8 0.40 52.2 M-13 72 0.65 0.56 86.27 88.4 90.6 90.8 89.9 1.04 40.4 32.4 0.40 52.2 M-1 48 0.50 0.43 85.03 83.2 83.9 84.1 83.7 0.98 45.3 39.6 0.82 36.8 M-2 48 0.46 0.37 81.08 89.8 85.8 85.2 86.9 1.07 44.7 38.8 0.86 37.5 M-3 48 0.62 0.48 77.56 81.2 83.5 84.0 82.9 1.07 47.0 40.1 1.05 35.3 M-14 48 1.77 1.63 91.90 95.3 96.0 96.1 95.8 1.04 75.9 52.7 1.90 83.0 M-15 48 1.32 1.09 82.39 93.7 90.4 90.1 91.4 1.11 71.7 54.2 2.48 69.2 M-16 48 0.83 0.63 75.55 74.6 77.4 78.2 76.7 1.02 64.7 56.4 2.62 70.7 M-17 48 0.38 0.28 74.84 78.5 81.3 81.9 80.5 1.08 81.9 77.8 3.86 75.0 M-17 72 0.38 0.28 74.84 80.5 83.8 84.4 82.9 1.11 85.3 81.0 3.86 75.0 M-18 48 0.78 0.68 87.42 87.0 89.7 90.0 88.9 1.02 39.3 29.6 0.32 61.1 M-19 48 0.54 0.45 82.54 78.6 81.8 82.5 81.0 0.98 57.7 52.2 1.65 58.1 M-20 48 1.14 0.90 78.78 78.8 80.4 80.7 80.0 1.01 78.1 65.7 2.57 68.4 M-21 48 0.82 0.72 88.46 86.0 88.1 88.3 87.5 0.99 18.5 8.8 4.34 30.5 M-22 48 1.18 1.09 92.83 88.6 91.3 91.6 90.5 0.97 66.7 52.4 2.13 44.5 M-23 48 1.65 1.58 95.62 93.4 94.1 94.1 93.9 0.98 97.7 76.9 3.96 86.5 M-23 72 1.65 1.58 95.62 91.4 95.1 95.3 93.9 0.98 104.6 83.9 3.96 86.5 M-24 48 1.62 1.41 86.82 89.4 89.9 90.0 89.8 1.03 51.9 32.0 0.31 37.3 M-25 48 0.40 0.31 77.70 85.1 82.0 81.3 82.8 1.07 33.0 28.1 0.59 18.1 M-26 48 1.05 0.87 82.83 84.6 82.0 81.4 82.7 1.00 41.8 29.1 0.36 49.4 M-27 48 0.54 0.43 80.36 83.1 81.7 81.4 82.1 1.02 35.4 29.2 0.63 33.2 M-28 48 0.43 0.33 78.32 80.8 79.4 79.0 79.7 1.02 43.1 38.2 1.37 38.9 M-29 48 0.57 0.50 88.88 91.6 87.6 87.0 88.7 1.00 60.2 52.9 1.97 46.8 M-30 48 0.85 0.62 73.90 81.7 85.2 85.8 84.2 1.14 48.5 39.2 0.20 38.6 M-31 48 0.59 0.36 62.26 77.4 78.6 78.9 78.3 1.26 32.5 26.4 0.58 38.9 M-32 48 0.72 0.52 72.55 84.1 82.4 82.0 82.8 1.14 40.0 31.6 0.74 27.0 M-33 48 0.47 0.34 71.52 78.4 77.4 77.1 77.6 1.09 48.1 43.0 1.71 71.0 M-34 48 0.76 0.57 74.71 80.9 80.2 80.0 80.4 1.08 51.6 42.7 1.66 41.8 M-35 48 1.04 0.61 58.81 73.9 72.1 71.5 72.5 1.23 46.2 35.5 0.74 12.3 M-35 72 1.04 0.61 58.81 70.3 71.2 71.5 71.0 1.21 52.3 42.1 0.74 12.3 M-36 48 0.42 0.34 80.79 85.0 81.5 80.8 82.4 1.02 59.1 54.1 2.16 46.1 M-37 48 1.84 1.56 84.63 89.7 86.2 85.6 87.2 1.03 79.8 56.8 2.39 71.2

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Note: Sol. Ratio = Soluble ratio, Rec = Recovery

13.1.2.4 Conclusions

The samples tested extracted 4 percentage points more copper than their copper solubility ratio. On average, the total Cu extraction was 84.13% and the average solubility ratio was 79.4%. It can be inferred therefore that under the test conditions a fraction of the acid insoluble copper was dissolved. The net (Gangue) acid consumption averaged 39.3 kg/t for the 37 composites.

13.2 Current and Future Tests

13.2.1 Geomet IV

A fourth metallurgical testing program, Geomet IV, is currently being conducted. This plan uses composite samples from the updated mineral subzones (BROC/ATAC, CRIS, WAD, MIX and ENR) with different levels of copper solubility ratio. Tests include Head Chemical Characterization with sequential copper analysis, particle size characterization, 1.5 iso-pH test with and without seawater, acid and chloride leaching tests in 30 cm mini-columns, four 1.5 m columns and ROM leaching in 1 m 3 iso-containers of a WAD and ferrous oxide low- grade sample with lesser presence of chrysocolla, atacamite and sulphides.

Mini-Column Testing Preliminary Results

Material from 15 composite samples, taken from across the Marimaca deposit, were subjected to 30cm column leach tests to identify total recovered copper and total acid consumption as shown on Figure 13-6. Several different testing parameters were used, including agglomerating with and without NaCl. The results were very favourable, indicating strong recoveries and relatively fast leach kinetics across all samples, relative to the acid soluble copper ratios for the samples. Virtually all samples recovered in excess of the acid solubility ratios, in the case of the Mixed mineral sub-zone, quite materially.

Of note, numerous samples from the brochantite, chrysocolla and copper wad zones observed total copper recoveries exceeding the calculated leaching potential of the samples. This is due to black oxides in these zones, which are acid soluble but have slower leach kinetics and, therefore, are not detected in the acid soluble copper test.

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Figure 13-6: Mini-columns Total Copper Recoveries.

Note: Figure prepared by Marimaca Copper, 2020.

1.5 meters Column Testing Preliminary Results

Testing was completed on three composite samples taken from a variety of areas across the Marimaca deposit. A total of four 1.5 m columns were completed. For Oxide and Combined samples, no additional NaCl was added; for the Combined and Sulphide materials, 15 kg/t of NaCl was added during agglomeration.

Again, the results were favourable, with relatively fast leach kinetics and three of the four columns achieving total copper recoveries in excess of 70% within 60 days (Figure 13-7). One sample, which comprised primarily oxides, which are the dominant copper bearing mineral species in the deposit, reached recoveries exceeding 80% within approximately 40 days.

It was noted that there is a linear relationship between time and acid consumption (Figure 13-8), and that a higher material height produced a lower specific acid consumption while still achieving the recovery rates observed in the testing program. This should allow further optimization of design to lower overall acid recoveries.

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Figure 13-7: 1.5 meters Columns Total Copper Recoveries.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-8: 1.5 meters Columns Net Acid Consumption.

Note: Figure prepared by Marimaca Copper, 2020.

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13.2.2 Metallurgical Variability Analysis Plan

Currently, work is underway to design a test plan to evaluate the metallurgical variability of the deposit using RC drilling samples that spatially reflect the complete deposit and selected core samples. For these tests a complete head characterization, iso-pH test and additional columns from the samples are planned.

13.2.3 Metallurgical Parameters Optimization

By the end of 2020 or the beginning of 2021, additional metallurgical tests will be carried out to optimize the metallurgical parameters determined with previously developed test programs complemented by current testing programs.

These parameters will include, but are not limited to, agglomeration conditions, column height, particle size distribution, irrigation rate, acid concentration and cycle time.

13.3 Industrial Metallurgical Models

13.3.1 Copper Recovery

13.3.1.1 2020 PEA Copper Recovery

Table 13-8 shows the copper recoveries considered in the block model for the 2020 PEA evaluation by mineral type (calculated over the total copper content of the material that will be processed).

Table 13-8: Total Copper Recoveries used in Block Model and PEA Mineral Feed Plan.

Mineral subzone Predominant CuT Recovery Dynamic (SZmin) species Heap BROC/ATA Brochantite/Atacamite 82% CRIS Chrysocolla 77% WAD Copper Wad 65% MIX Mixt 62% ENR Enriched 49% Average 76%

The values for total copper recovery were defined taking into consideration the copper recovery results of the Geomet I and III iso-pH tests, as well as results from Geomet I and II crushed columns (Figure 13-9, Figure 13-10, Figure 13-11 & Figure 13-12) and expectations regarding the influence of seawater use and salt addition during agglomeration. The Geomet IV experimental program included tests with and without salt addition in agglomeration to confirm these assumptions.

Table 13-9: Summary Results CuT Rec. and Acid Consumption Geomet I and II

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Average total copper recovery in iso-pH tests is 79.9%, therefore being higher than the value considered in the current mine plan. The tests on 1m high columns show an average of 72.8% for a time of 35 days, these copper dissolution kinetics (Figure 13-9) show that it is possible to achieve an additional recovery delta for a longer time (positive marginal values). The 1.6 to 3.0 m columns for a 61-day leaching time show an average of 77.4%.

Figure 13-9: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Days).

Note: Figure prepared by Jo & Loyola Process Consultants, 2020.

Figure 13-10: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Leaching Ratio).

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 13-11: CuT Recovery and Net Acid Consumption P90 ½” Geomet II Columns (vs Days).

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-12: CuT Recovery and Net Acid Consumption P90 ½” Geomet I Columns (vs Leaching Ratio).

Note: Figure prepared by Marimaca Copper, 2020.

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In column testing of crushed materials, the highest total copper recoveries correspond to minerals from the oxidized mineral subzones BROC/ATA and CRIS with recoveries close to 80%, followed by the WAD type samples with 70% and the MIX sample with a value closer to 60%.

To scale up these results to deeper columns and longer leaching times, a dynamic METSIM model was built by Jo y Loyola Process Consulting based on the experimental data. The copper dissolution and acid consumption kinetics dependency with the acid concentration were established. The model was calibrated using the experimental data and the total copper recovery and acid consumption kinetics for different depth of bed and leaching times were calculated. The 4 m column model results and the expected total copper recoveries show a good consistency across all different mineral subzones (Figure 13-13).

Figure 13-13: Total Copper Recovery and Net Acid Consumption Kinetics for a 4 meters Column (Model).

Note: Figure prepared by Marimaca Copper, 2020.

The BROC/ATA mineral subzone has a predominant species of atacamite and brochantite, which are highly soluble in sulphuric acid and therefore result in high recoveries through leaching. The mineral subzone CRIS is mainly composed of chrysocolla, a copper silicate with high solubility, although slightly less than atacamite. The WAD subzone is dominated by copper wad which corresponds to a less soluble oxide and therefore lower recoveries are to be expected. In the MIX minerals, in addition to some oxides, there is a significant presence of secondary copper sulphides, which have a low solubility in sulphuric acid but a high solubility in the ferric/chloride environment. Finally, the minerals in the ENR subzone correspond mainly to secondary copper sulphide.

For all minerals, but particularly for those in the MIX and ENR subzones, an estimated total copper recovery is considered for mine planning. This planning incorporates the effect of leaching the secondary sulphide in an acid chloride environment and therefore, recoveries above the sulphuric acid solubility ratio are expected, moving the target towards the "Leach Potential = CuS + CuCN”. Such potential corresponds to the sum of the soluble copper in sulphuric acid and sodium cyanide (determined by a “sequential” copper analysis) and can be

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considered equivalent to the content of acid soluble oxides and secondary sulphide present in the material.

Subsequent to the date when total copper recoveries were defined for the evaluation of the 2020 PEA mine plan, the cyanide soluble copper content was incorporated into the mine block model using the values available in the drilling database. This work is reflected in the report “Cyanurable Copper Estimate for the Marimaca Copper Project, Antofagasta Province, Region II, Chile” elaborated by NCL Engineering and Construction SpA in January 2020.

This report indicates it is possible to verify at the mine-block level the presence of secondary sulphide and thus the appropriate use of leaching in the chloride environment for the project. This planning includes the subzones which are predominantly MIX and ENR, but also includes other subzones where these materials may be elevated (>10%). The pertinent values are summarized in Table 13-10

Table 13-10: Solubility Block Model by Mineral Sub-Zone (different cut-off grades).

Cyanide Cu Mine Plan Leaching Solubility Ratio Ratio CuT Mineral Potential (%RS) (%) Recovery Subzone (%) Oxides Secondary (%) Oxides + SS Sulphide BROC/ATA 62–71 12–20 82–83 82 CRIS 69–72 10–16 82–87 77 WAD 49–58 7–27 61–80 65 MIX 20–27 46–52 72–73 62 ENR 18–21 45–47 65–68 49

The ROM will treat a low-grade oxide material mostly of the WAD type. Based on benchmark values, a total copper recovery of 40% is defined. This value must be corroborated with experimental results from metallurgical tests that adequately reflect the proposed process design.

13.3.1.2 Future Copper Recovery Models (Post-2020 PEA)

The development of metallurgical copper recovery models for the Marimaca deposit under optimized processing conditions is being considered for the future.

The next stages will include the development of models based on:

 Chemical material characterization dependent model with differentiated dissolution factors for CuS, CuCN and CuRes fractions and with factors dependent on the operational conditions used.  Mineralogy dependent model with dissolution factors by species and with factors dependent on the operational conditions being used.

These models will be continuously improved as more information becomes available from the Geomet IV metallurgical tests, variability analysis plan and metallurgical optimization tests.

This modelling is becoming a powerful tool for the evaluation and planning of the project, substantially improving the predictive capacity of the behaviour of minerals in comparison to the criteria used in the 2020 PEA. Some positive aspects that will be considered in the future are optimized particle size distribution, chloride leaching, a better understanding of the mineralogical copper species and its behaviour for the mineral types.

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13.3.2 Acid Consumption

13.3.2.1 2020 PEA Acid Consumption

The following sections contain estimates for sulphuric acid consumption in the Marimaca Project, differentiating between oxide and sulphide materials.

Using the identified trends, an estimated net (Gangue) acid consumption of 40 kg/t for oxide (BROC/ATA, CRIS y WAD) and 35 kg/t for sulphide materials (MIX y ENR) were defined. Those values must be corroborated in future metallurgical characterization and optimization programs.

To optimize the project base case, a strategy to reduce the acid consumption will be evaluated. Options such as those described by (Scheffel, Miller) will be investigated. The idea is to match the acid concentration to the demand of the material during the leach cycle. Given that acid concentration affects the kinetics of acid consumption, options of higher irrigation rate at lower acid concentration is one such option. Both the acid concentration and copper retained by ripios moisture will also be optimized in future testing.

Another aspect that is important to consider is the impurities dissolution from the mineralization because, a higher concentration of impurities in the leaching solution produces a slower dissolution of the impurities from the minerals reducing the reaction of the gangue. The leaching tests were not performed with equilibrium leaching solutions so some decrease in acid consumption can be expected from this effect.

Estimation of Sulphuric Acid Consumption for Oxide Materials

The results of the Geomet I and II column testing indicate that the net acid consumption, under the conditions used for the 1.5 to 3.0m column depth and 50 days of irrigation at a rate of 10 L/h/m2 and 10 g/L of acid average in the range of 40 to 50 kg/t. The summary of these results is presented in Table 13-5. The acid consumption rate is shown in Figure 13-2, Figure 13-3, Figure 13-4 and Figure 13-5 and its connection to the acid fed to the columns in Figure 13-14 and Figure 13-15.

The experimental data indicate a reduction in the specific acid consumption, kgH 2SO 4/t, when the column height increases from 1 to 3 m. This is due to the effect of the acid concentration has on the gangue reaction kinetics. As the acid concentration in equilibrium with the material decreases the acid consumption rate decreases. There is an acid profile through the mineral bed decreasing from the top to the bottom and changing with time allowing the acid to reach the lower fraction of the bed. According to the METSIM model, an equivalent acid consumption is achieved with a 4 m column and 95 leaching days, which is the current process definition (Figure 13-11).

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Figure 13-14: Net Acid Consumption P90 ½” Geomet I Columns vs Added Acid.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-15: Net Acid Consumption P90 ½” Geomet II Columns vs Added Acid.

Note: Figure prepared by Marimaca Copper, 2020.

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Seven samples of the deposit were used in this acid consumption testing, six of which could be classified as oxidized mineral from subzones (BROC/ATA, CRIS and WAD) and one as a mixed mineral (MIX). All of gave solubilities in sulphuric acid that were higher than the average values expected according to 2020 PEA mine plan (Figure 13-16). This means that the samples have a higher proportion of oxidized minerals than the expected composition of the material in the process, at the expense of the sulphide fraction.

Figure 13-16: Mine Plan Solubility Ratio by Mineral Subzone.

Note: Figure prepared by Marimaca Copper, 2020.

A key objective for the Project will be to optimize operating conditions in to control acid consumption. Parameters such as the following must be improved: particle size, heap height, acid dosage in agglomeration, irrigation and frequency rate and the acid concentration in the leaching solution.

Additionally, strategies aimed to adjust the leaching time and acid concentration of the solutions in contact with the material, such as those described by (Scheffel, Miller), will be investigated.

Preliminary but consistent results of the Geomet IV tests show a dependence of the acid consumption rate with the acid concentration in irrigation, which can be used to optimize consumption through changes in operational conditions.

On this basis, and considering the optimization aspects, an average acid consumption for the project of 40 kg/t for oxide and 35 kg/t for sulphide materials were used for the 2020 PEA evaluation. These values must be corroborated with future metallurgical characterization and optimization programs.

Estimation of Sulphuric Acid Consumption of Sulphide Materials

In general, in copper deposits, the oxide mineral gangue consumes more acid than sulphide mineral gangue. To date, Marimaca Copper's experimental programs have been oriented towards the characterization of oxide materials. However, the Marimaca deposit contains

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resources with secondary sulphide content that contributes to the 2020 PEA mining plan, i.e., < 20% of the plant feed.

Considering that the samples used in the column tests with crushed material are mainly oxidized materials, the results of the iso-pH tests from Geomet I and III are used for this estimation, which significantly increases the number of samples characterized.

A total of 44 samples were used in the Geomet I and III metallurgical programs (refer to Table 13-11). It is observed that these were mainly oxides bearings with a ratio of acid soluble copper over 59%.

According to their mineralogical classification, 43 of the samples correspond to mineral subzones BROC/ATA, CRIS and WAD and one to the MIX subzone. The sample classified as MIX shows a ratio of acid soluble copper of 69%, suggesting an oxidized mixed material.

It is necessary to gain a better understanding of the solubility ratio versus the acid consumption for the sulphide material to see if a usable correlation can be developed.

There is no correlation between the AAC and the solubility ratio (Figure 13-17), observing high and low values in the whole range of solubility ratio of the characterized samples.

For the net acid consumption of the iso-pH tests, there is a slight tendency for decreasing net acid consumption when the acid copper solubility ratio decreases (Figure 13-18).

Figure 13-17: AAC vs Solubility Ratio.

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 13-18: iso-pH Geomet I, II & III Gangue Acid Consumption vs Solubility Ratio.

Note: Figure prepared by Marimaca Copper, 2020.

To expand the analysis of this trend, in Table 13-11, the maximum and minimum average values are presented for iso-pH test results subdivided between those with a higher and lower RS than the average of the 2020 PEA mine plan, which assumes 64%.

Although only 3 of the 44 samples were below this value, it is possible to see that total (CHT) and gangue (CHG) acid consumptions are on average lower than the average of those samples with higher solubility, 12.1 and 10.3 kg/t less respectively.

It should be emphasized that the values of these characterizations with pulverized or granulated samples are indicative values of the industrial acid consumption but not necessarily directly related to this parameter.

Considering this trend evidenced by the samples with the lowest solubility ratio, assuming them to have a higher proportion of the sulphide copper, a net acid consumption of 35 kg/t is preliminarily estimated for sulphide, a reduction in relation to the 40 kg/t for oxide materials. This value needs to be better defined with future metallurgical characterization and optimization programs.

13.3.2.2 Future Acid Consumption Models (Post-2020 PEA)

The development of metallurgical models for the acid consumption under the currently assumed process conditions is ongoing, particularly considering the chloride leaching environment and more knowledge about the mineral types.

The next stages of the project include the development of a model dependent on the chemical characterization, copper-bearing species and the gangue mineralogy, as well as the operational conditions used.

This model will be refined as more information becomes available from metallurgical testing.

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Table 13-11: Summary CuT Rec. and Acid Consumption iso-pH Test Geomet I and III.

13.3.2.3 Dissolution and Impurity Balances

To determine the possible sources of impurities in the leach circuit, it is appropriate to review the mineral characterization and the gangue composition.

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Table 13-12 shows the mineralogical copper distribution of the seven characterized samples used in the Geomet I and II tests.

Table 13-12: Distribution in Mineral Weight (Samples Marimet 1 to 7).

Minerals Formula Marimet 1 % Marimet 2 % Marimet 3 % Marimet 4 % Marimet 5 % Marimet 6 % Marimet 7 %

Chalcopyrite CuFeS 2 0.01 0.04 - 0.06 0.03 0.10 0.04

Chalcocite Cu5Fe2+S4 - 0.08 0.06 0.0019 - 0.04 0.10 Covelline CuS - 0.31 - - 0.003 - 0.10 Bornite Cu5Fe2+S4 - 0.02 - - - 0.04 0.02

Copper Wad Cu-Mn-Si Oxides 0.30 0.37 0.31 0.20 0.26 0.30 0.30

Atacamite Cu2(OH)3Cl 0.91 1.43 0.32 0.84 1.26 0.58 0.56 Chrysocolla (Cu,Al)2H2Si2O5(OH)4 0.34 0.25 0.13 0.29 0.44 0.16 0.11 Malachite Cu2(CO3)(OH)2 0.02 0.19 - 0.10 - - - Pyrite FeS2 0.004 0.02 0.49 0.07 0.07 0.08 0.42 Magnetite Fe3O4 - 0.41 0.44 0.52 0.26 0.16 0.15 Hematite Fe2 O3 6.45 8.78 8.53 7.33 7.64 6.11 5.42 Limonite FeOH 2.12 3.29 2.22 0.63 3.15 0.69 0.85 Rutile Ti O2 - 0.34 0.27 0.56 0.15 0.32 0.19 Clay Al4 (Si4O10)(OH)3 10.67 10.29 9.37 10.72 9.64 9.93 10.46 Chlorite (Mg,Al)3(AlSi3O10)(OH)2Mg3(OH) 6 7.69 5.25 7.11 5.51 4.03 5.36 5.69 Amphibole Ca2Mg4Al0.75Fe3+0.25(Si7AlO22)(OH)2 - 0.63 - - 1.75 1.80 0.64 Apatite Ca5(PO4)3(OH)0.33F0.33Cl0.33 - - - - 0.47 0.49 - Sericite KAl2(AlSi3O10)(OH)2 6.31 3.75 5.73 5.30 6.24 6.46 3.50 Plagioclase NaAlSi3O8 12.08 10.69 12.32 12.61 8.01 8.25 10.86 Feldspar NaAlSi3O8 22.62 25.73 25.31 28.32 33.74 34.77 31.38 Biotite K(Mg,Fe++)3[AlSi3O10(OH,F)2 1.23 0.19 0.44 0.44 0.27 0.30 - Calcite CaCO3 2.21 3.44 3.13 2.82 1.08 1.91 1.95 Quartz SiO2 22.16 21.37 16.42 17.86 18.02 18.57 21.73 Epidote CaSrAl2Fe+++(Si2O7)(SiO4)O(OH) 2.64 2.42 6.20 4.50 3.09 3.18 2.74 Tourmaline NaMg3Al6(BO3)3Si6O18(OH)4 0.64 0.25 0.22 0.42 - - 1.26 Plaster Ca(SO4)•2(H2O) 1.43 0.46 0.41 0.89 0.26 0.26 0.93 Jarosite KFe3+3(SO4)2(OH)6 0.17 - 0.55 - 0.14 0.14 0.61 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Sulphide minerals are identified in most of the samples albeit at low but sufficiently significant amount a to play a role in soluble copper content. In samples Marimet-2 and Marimet-7, chalcopyrite, chalcocite, covellite and bornite were observed. In the Marimet-1 sample only chalcopyrite was observed, while in Marimet-3 only covelline. In the Marimet-4 sample, chalcopyrite and chalcocite were observed, while in Marimet-6 chalcopyrite, covellite and bornite were observed, as well as pyrite, except in the samples Marimet-3 and Marimet-7, where it is more frequently observed.

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In the Marimet-1 sample only chalcopyrite was observed, while in Marimet-3 only covellite was noted. In the Marimet-4 sample, chalcopyrite and chalcocite were observed, while in Marimet-6 chalcopyrite, covellite and bornite were observed, as well as pyrite, except in the samples Marimet-3 and Marimet-7, where is more frequently observed.

The samples have a high concentration of hematite, fluctuating in the range of 5.42–8.78%. Limonite, varying between 0.63–3.29% was observed. Pyrite and magnetite were detected at low levels.

Considering the area where the deposit is located, moderate levels of calcite are observed, in the range of 1.08–3.44%. This is a particularly relevant characteristic considering its impact on the acid consumption. This observation is repeated when analysing the carbonate contents obtained in the head characterization of the 43 samples used in Geomet I, II and III, which fluctuate within the range 0.05–3.96%, as shown in Table 13-13 and Table 13-14.

Table 13-13: Head Chemical Characterization Geomet I and II Samples.

CuT CuS Rz FeT Al Mg Mn Cl CO 3 CAA Sample (%) (%) (%) (%) (%) (%) (%) (%) (%) (kg/t) Marimet-1 0.87 0.73 83.87 9.19 8.27 1.09 0.08 0.23 1.00 48.69

Marimet-2 1.50 1.13 75.42 10.69 7.99 1.05 0.09 0.31 1.67 32.49

Marimet-3 0.45 0.26 57.77 11.16 8.01 1.17 0.08 0.26 1.48 53.31

Marimet-4 0.85 0.71 83.99 8.38 8.44 1.16 0.05 0.22 1.28 39.33

Marimet-5 1.16 0.98 84.47 9.76 8.37 0.99 0.07 0.34 0.50 39.37

Marimet-6 0.61 0.44 71.56 7.58 8.71 1.10 0.08 0.24 0.49 30.12

Marimet-7 0.63 0.40 64.19 7.32 8.04 1.28 0.08 0.26 1.08 23.20

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Table 13-14: Head Chemical Characterization Geomet III Samples.

CuT CuSH+ Rz FeT Al Mg CAA CO 3 AlS FeTS MgS Nº (%) (%) (%) (%) (%) (%) (kg/t) (%) (%) (%) (%) 1 1.01 0.81 80.00 6.72 6.85 1.28 28.82 0.15 0.16 0.28 0.04 2 0.74 0.48 64.73 7.33 6.59 1.19 35.54 0.15 0.17 0.38 0.05 3 0.37 0.26 70.05 6.27 6.87 1.42 48.15 1.10 0.13 0.27 0.06 4 0.87 0.55 63.35 9.15 6.79 0.96 37.85 0.05 0.16 0.27 0.04 5 1.66 1.36 81.64 8.92 6.18 1.02 40.25 0.05 0.18 0.39 0.04 6 1.13 0.87 77.10 7.55 6.94 1.46 50.32 0.45 0.18 0.26 0.05 7 0.67 0.53 79.54 5.84 6.77 1.37 37.45 0.40 0.14 0.31 0.07 8 0.61 0.47 76.78 6.07 6.94 1.50 34.55 0.60 0.16 0.35 0.06 9 1.05 0.96 90.93 6.57 6.79 1.47 48.22 0.10 0.19 0.38 0.06 10 0.65 0.56 86.27 4.84 6.78 1.29 52.23 0.40 0.14 0.32 0.05 11 0.50 0.43 85.03 7.23 7.10 1.35 36.76 0.82 0.18 0.48 0.07 12 0.46 0.37 81.08 6.48 7.05 1.00 37.46 0.86 0.19 0.49 0.06 13 0.62 0.48 77.56 7.40 6.35 0.89 35.29 1.05 0.20 0.48 0.08 14 1.77 1.63 91.90 6.24 6.69 0.68 83.04 1.90 0.15 0.29 0.05 15 1.32 1.09 82.39 5.94 7.45 1.09 69.18 2.48 0.15 0.29 0.06 16 0.83 0.63 75.55 7.57 6.48 0.63 70.75 2.62 0.16 0.23 0.05 17 0.38 0.28 74.84 5.76 6.49 0.98 74.97 3.86 0.15 0.37 0.07 18 0.78 0.68 87.42 7.70 6.28 1.03 61.07 0.32 0.24 0.52 0.09 19 0.54 0.45 82.54 6.62 6.60 1.58 58.08 1.65 0.23 0.49 0.16 20 1.14 0.90 78.78 7.37 6.23 1.11 68.36 2.57 0.19 0.47 0.15 21 0.82 0.72 88.46 8.24 6.46 1.01 30.51 4.34 0.20 0.53 0.11 22 1.18 1.09 92.83 7.86 6.34 1.10 44.48 2.13 0.23 0.54 0.12 23 1.65 1.58 95.62 6.61 6.32 0.85 86.53 3.96 0.20 0.43 0.09 24 1.62 1.41 86.82 7.08 6.46 0.90 37.31 0.31 0.27 0.51 0.08 25 0.40 0.31 77.70 4.91 6.66 1.19 18.12 0.59 0.12 0.32 0.06 26 1.05 0.87 82.83 6.02 6.44 1.30 49.38 0.36 0.18 0.39 0.09 27 0.54 0.43 80.36 4.46 6.59 1.31 33.18 0.63 0.13 0.31 0.07 28 0.43 0.33 78.32 6.43 6.81 1.49 38.90 1.37 0.16 0.40 0.10 29 0.57 0.50 88.88 6.92 6.70 1.56 46.83 1.97 0.17 0.45 0.10 30 0.85 0.62 73.90 7.23 7.34 1.35 38.63 0.20 0.18 0.41 0.06 31 0.59 0.36 62.26 6.03 7.17 1.12 38.87 0.58 0.14 0.26 0.04 32 0.72 0.52 72.55 6.86 7.14 1.22 26.95 0.74 0.17 0.41 0.05 33 0.47 0.34 71.52 5.57 7.12 1.22 71.01 1.71 0.12 0.27 0.05 34 0.76 0.57 74.71 6.29 6.91 1.04 41.76 1.66 0.14 0.32 0.05 35 1.04 0.61 58.81 9.75 6.89 1.09 12.31 0.74 0.18 0.35 0.07 36 0.42 0.34 80.79 6.92 6.20 1.27 46.09 2.16 0.14 0.33 0.07 37 1.84 1.56 84.63 6.04 6.06 0.72 71.18 2.39 0.16 0.22 0.10

Notwithstanding this moderate carbonate content, it can also be seen from the chemical characterizations that the analytical acid consumption is in the medium to high range. Therefore, it is important to determine where this consumption comes from, which was also

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observed in the results of the respective metallurgical tests, iso-pH and columns when available

Another important observation from the experimental results was that the acid consumption increases linearly with time of contact with acid solution. This trend was evidenced at the test level with both pulverized and crushed material, in all of them the longer the time the greater the consumption. Therefore, an understanding of their operational control will be key in the development of the project in reducing acid consumption. Preliminary Geomet- IV results also show a dependency of the acid consumption rate on the acid concentration of the irrigation solution.

The total acid consumption can be broken down into its different sources according to the following expression:

Where,

Other reactions that consume acid in heap leaching processes are ferrous to ferric oxidation reactions, typical of operations with bacterial activity, where gaseous oxygen is fixed with protons and generating ferric sulphate and water.

4 2 2 2 In the case of the Marimaca deposit, this generation is not included as no bacterial activity is expected due to the high levels of impurities projected in the leaching circuit but could also occur to a lesser extent without bacteria just by chemical reactions.

Also not included is the generation of acid by hydrolysis of ferric sulphate as this generation is equivalent to the consumption that occurs during hematite dissolution.

6 3 2

3 3 Therefore, when projecting a moderate consumption of sulphuric acid by carbonate/calcite it will be important to estimate the consumptions associated with acid soluble impurities in order to explain the acid consumption data. This will be done using the results of the metallurgical tests completed to date and the best assumptions based on available information.

13.3.2.4 Gangue Acid Consumption

In a solution balance applied to a leaching column, the consumption of acid by the gangue is equivalent to the consumption of total acid minus the consumption by copper dissolution, consumption guided by reactions like :

: 2 2 2 5

: 2 2 2 2 2

By stoichiometry, two masses of H 2SO 4 generate two masses of CuSO 4, therefore the consumption of sulphuric acid is 1.54 kg of acid for each kg of dissolved copper. This same

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relationship is repeated for most of the copper dissolution reactions so the expression Consumption for the gangue can be generalized as:

2 1.54 ∗ Applying this relation to the results of columns C-29, C-33, C-37 and C-42 of Geomet II (Table 13-15), allows a first approximation to the characteristics of the different mineral subzones of the resource, which provide chemical analysis balances for the copper recovery, acid consumption and iron dissolution. The kinetics of copper recovery, total and the gangue acid consumption are presented in Figure 13-19, Figure 13-20 and Figure 13-21.

Table 13-15: Geomet III Selected Columns Operating Conditions.

Copper grade (%) Irrigatio Mas [H 2S0 4] Day Heigh ID Sample n rate (gpl) s Solubili 2 s t (m) CuT CuS (L/h/m ) (kg) ty

Marimet-1 Col-29 8-10 10-12 61 72.8 2.7 0.87 0.73 83.87 (CRIS) Marimet-3 Col-33 8-10 10-12 61 51.9 1.6 0.45 0.26 57.77 (WAD) Marimet-5 Col-37 (BROC/ATA 8-10 10-12 61 80.6 2.5 1.16 0.98 84.47 ) Marimet-7 Col-42 8-10 10-12 62 86.0 2.8 0.63 0.40 64.19 (MIX)

Figure 13-19: Total Copper Recovery Geomet II Selected Columns.

Note: Figure prepared by Marimaca Copper, 2020.

Page | 13-116

Figure 13-20: Total Acid Consumption Geomet II Selected Columns.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-21: Net Acid Consumption (Gangue) Geomet II Selected Samples.

Note: Figure prepared by Marimaca Copper, 2020.

In these graphs, it is possible to verify the linear kinetics of acid consumption over time when the acid supply through irrigation is constant. After 60 days of irrigation, Col-29 reaches a total acid consumption of 59.78 kg/t and a gangue acid consumption of 48.46 kg/t, Col-33 of 63.67 and 58.44 kg/t, Col-37 of 53.23 and 39.16 kg/t and Col-42 of 47.71 and 42.05 kg/t.

Page | 13-117

The apparent decrease in the gangue acid consumption graph that can be seen in the first days corresponds to the washing process of the remaining acid from curing and the sulphated copper, therefore, the real trend can only be seen after this process is completed.

13.3.2.5 Iron Analysis

The material has a high iron content, mostly as hematite. In the iso-pH and column tests a high dissolution has been observed with values in the range of 2.5 to 8 kg/t.

On Figure 13-22, the evolution of the iron concentration in the effluent of the analysed columns can be seen and it is possible to see how in the first 10 days it presents high values to reach a more stable concentration in the range of 2 g/L. These tests were conducted with a non-iron containing irrigation solution, therefore, all that appears in the effluent corresponds to iron dissolved from the material. The graph also includes the value of the concentration of the collected effluent in the 7–8 days after the irrigation was suspended.

Figure 13-22: Evolution of FeT Concentration in Geomet II Selected Columns.

Note: Figure prepared by Marimaca Copper, 2020.

An iron balance in solution was made using the values reported in the balance sheets and the following expressions:

Where:

∗ 0 Since the irrigation solution has no iron this value is zero.

Page | 13-118

∗

∗ This value is estimated based on the final moisture of the ripios and the final iron concentration average in the drainage and final irrigation of the column, distributing it lineally during the test.

The iron dissolution corresponds to:

∗ ∗ Using this expression, it is possible to obtain the iron dissolution dynamics under the test conditions of the evaluated column. (Figure 13-23)

Figure 13-23: Evolution of FeT dissolution Geomet II Selected Columns.

Note: Figure prepared by Marimaca Copper, 2020.

It is possible to observe in Figure 13-23 that after an initial stage of high rate of dissolution due to acid curing, it stabilized and the accumulated dissolution grew lineally with the irrigation time until it stopped (day 61–62) and was maintained during the final drainage days of the column. The increase of dissolution speed after 20 days is significant, possibly associated with the increased availability of acid after copper is dissolved. The values achieved by the different samples were 5.8 kg/t for column C29 of chrysocolla type, 7.5 kg/t for column C33 of copper wad type material, 5.6 kg/t in column C37 of oxidized brochantite/atacamite material and 5.3 kg/t in column C42 of mixed mineral type. The iron dissolution is 6 kg/t in average.

Page | 13-119

Consumption Breakdown

In order to breakdown the gangue acid consumption, most of the impurity solutions observed were assumed to come from oxidized species. The chemical reactions for the consumption of sulphuric acid are as follows, which do not necessarily represent the species found in the material:

Total iron dissolution (Hematite dissolution):

3 3 Aluminium dissolution:

3 3 Magnesium dissolution (fictitious reaction):

The consumption of sulphuric acid by the carbonate ion is calculated by stoichiometry according to the following expression:

Carbonate acid consumption:

∙ 2 The consumption of sulphuric acid by carbonate generates a solid residue, which reduces the sulphate concentration in the solutions.

From the results of the iron analysis of the Geomet II columns, several values are known for the FeT dissolutions for different mineral type subzones, therefore, it is possible to calculate their acid consumption.

For aluminium and magnesium, although no experimental results are available for Geomet II materials, there are values in the Geomet III tests. In those tests, the acid solubility of iron, aluminium and magnesium was measured. In average terms the dissolution of aluminium was 2.5 times the magnesium, so this proportion for the acid consumption breakdown was used.

For the carbonates it was assumed that these come from calcite, with a dissolution of 90% of its value determined in the chemical characterization of the sample.

Additionally, it was considered that 10% of acid consumption comes from other unidentified species.

The approximate breakdown of the consumption of the gangue observed in the selected columns is detailed in Table 13-16 . About 34% of the net consumption (gangue) is due to iron oxide dissolution, 32% to carbonate, 19% to aluminium oxides and 6% to soluble species containing magnesium.

Page | 13-120

Table 13-16: Acid Consumption Breakdown.

13.3.2.6 Chloride Concentration in the Industrial Leaching Circuit

While the completed metallurgical tests Geomet I, II and III do not include chloride in the leaching solution used in the test program, for 2020 PEA purposes it was assumed that seawater would be the main source of water for the project, which imposes a base concentration of chloride in the order of 40 g/L.

In Geomet IV metallurgical tests the chloride leaching conditions are being explored. The benefits of adding sodium chloride and sulphuric acid during the agglomeration and after an extended resting time, is that an oxidation of copper sulphide is promoted due to mainly the cupric/cuprous reactions. The MIX and ENR samples were considered for the addition of salt because of their secondary sulphide copper content. After resting time, 60% of the secondary copper sulphide oxidation is expected, and an additional delta of 10% during the leaching in a chloride medium in a short leaching cycle. The addition of lesser amounts of salt to the oxides is also being evaluated in order to obtain some marginal improvements in the copper recovery. The high level of iron in the leaching solutions may also contribute to the leaching of these sulphide minerals.

From the Geomet IV experimental program, there may be options of working with the natural chloride equilibrium in the leaching circuit or consideration of salt addition in the agglomeration stage.

To forecast the chloride concentration in the leaching solution during commercial operation, the different sources of chloride must be considered, including the use of seawater, the addition of NaCl in the agglomeration and the chloride dissolution from the mineralization due to the presence of atacamite, halite and other chloride containing minerals.

To estimate the chloride equilibrium concentration in the plant, the mass balance Figure 13-24 was used.

Figure 13-24: Aqueous Phase Chloride Balance Diagram.

Note: Figure prepared by Marimaca Copper, 2020.

Page | 13-121

The general equation is:

Where,

∗ ∗ ∗ ∗ ∗

1 ∗ ∗ % ∗ ∗ % ∗ ∗ %

2 ∗ ∗ ∗ % ∗

∗ ∗ ∗ ∗

0 no precipitation.

0 However, in strict terms the ROM heap accumulates inventory. In this first approximation it is be treated as a stationary state output. A dynamic METSIM model should be developed to analyse the evolution of the chloride in the system from the concentration of seawater to an equilibrium chloride concentration.

With this balance it is possible to calculate the equilibrium concentration of the plant as a function of the other operational parameters, as shown in Table 13-17.

With the dosages currently considered in the design criteria, 15 kg/t for sulphide, the process will reach balanced concentrations in the raffinate of 63 and 73 g/L of chloride. About 60% of this chloride will come from the use of seawater.

Due to the expected level of chloride in the leaching circuit, two washing stages are included in the solvent extraction (SX) plant.

Page | 13-122

The expected chloride levels, according to this estimate, will reach MIX and ENR mineral type chloride concentrations in agglomeration over 140 g/L by combining the use of raffinate and the addition of NaCl. This value corresponds to that used by other operations , which have been successful in treating this type of material

Table 13-17: Calculation of Equilibrium Chloride Concentration.

Year Year Parameter Unit 1-5 6-12 Comments Processing Heap OX ktpy 5129 7756 Mining Plan Processing Heap SU ktpy 0 1226 Treated as OX during Year 1 to 5. Processing ROM ktpy 3206 3621 Mining Plan Specific Water Consumption Heap OX m3/t 0.250 0.250 Project estimation Specific Water Consumption Heap SU m3/t 0.278 0.278 Project estimation Specific Water Consumption ROM m3/t 0.125 0.125 Project estimation kg [Cl] Seawater 20 20 Typical value Cl/m 3 kg Salt Dosage Agglom. Heap OX 0 0 Design Criteria NaCl/t kg Salt Dosage Agglom. Heap SU 0 15 Design Criteria NaCl/t NaCl Purity % 95 95 Typical value Cl Dosage Agglom. Heap OX kg Cl/t 0.0 0.0 Calculated Cl Dosage Agglom. Heap SU kg Cl/t 0.0 8.6 Calculated 90% of the average value in the Marimet Cl Dissolution Heap OX kg Cl/t 2.43 2.43 1-7 Samples (2.7 kg/t)

90% of the average value in the Marimet Cl Dissolution Heap SU kg Cl/t 2.43 2.43 1-7 Samples (2.7 kg/t)

In proportion to the ROM's CuT Rec. Cl Dissolution ROM kg Cl/t 1.48 1.48 (40%) and its average RS (65.7%)

Ripios Moisture Heap OX m3/t 0.111 0.111 Moisture 10%wb

Ripios Moisture Heap SU m3/t 0.111 0.111 Moisture 10%wb

Ripios Moisture ROM m3/t 0.075 0.075 Moisture 7%wb

kg/m 3 [Cl] equilibrium 62.8 72.8 Calculated (gpl)

13.3.2.7 Impurity Solution Balances for the Industrial Plant

Using the values established in the previous sections, it is possible to determine an estimated balance for the impurities of the industrial plant. A 15% correction factor is used for expected values at industrial scale when the ROM diluting effect is considered.

With the target acid consumption and the relative proportions of the gangue consumption, the expected dissolutions for the different impurities were determined(Table 13-18). Assuming an acid concentration in the ripios entrainment of 2 g/L and discounting the sulphate precipitation

Page | 13-123

as calcium sulphate, the balance for the dissolved sulphate and the acid make-up is as shown in Table 13-19.

Table 13-18: Expected Dissolutions Calculations.

Impurities Acid Gangue Acid Consumption Dissolution Consumption Dist. kg/t kg/t % Fe 4.374 11.5 33.9 Al 1.175 6.4 18.8 Mg 0.470 1.9 5.6 Others (Zn) 2.268 3.4 10.0

CO 3 6.604 10.8 31.7 Total 34.0 100.0

Table 13-19: Sulphate Balance and Acid Make-up.

Sulphate Balance

Precipitation 10.567 kg SO 4/t

H2SO 4 Make-up 33.524 kg SO 4/t

[SO 4] Balance 206.6 gpl

Industrial H2SO4 Make-up Balance

Gangue Consumption 34.000 kg H 2SO 2/t

Ripios 0.222 kg H 2SO 2/t

Make Up approx. 34.222 kg H 2SO 2/t

Integrating these data with the chloride balance in the previous section, the general balance of impurities for the Marimaca plant is obtained, which is presented in Table 13-20.

Page | 13-124

Table 13-20: Marimaca Industrial Plant Impurities Balance.

Dissolution Impurities SO 4 Impurities Equilibrium Equilibrium Equilibrium Parameter Valence PM kg/t gpl gpl

H2SO 4 1 98.00 2.0 2.0 Cu +2 2 63.54 0.3 0.5 FeT 4.37 39.4 Fe 2+ 2 55.84 0.00 0.0 0.0 Fe 3+ 3 55.84 4.37 39.4 101.5 Na + 1 22.99 2.26 20.4 K+ 1 39.10 Mg +2 2 24.31 0.47 4.2 16.7 Al +3 3 26.98 1.18 10.6 56.4 Other Cations 2 65.38 2.27 20.4 30.0 Ca +2 40.078 -2 CO 3 1 60.00 Cl - 1 35.45 62.8 -2 SO 4 2 96.00 206.6 207.1 Density t/m3 1.15 Ripios Moisture % 10.00 Ripios Moisture m3/t 0.11

There is a good correlation between the sulphate balance calculated through its own balance (206.6 g/L) and the estimation through the dissolved cations (207.1 g/L).

According to this balance, the system will operate with high impurity concentrations, with a significant impact in the solution quality (high viscosity). Considering this phenomena, two washing stages are included in the SX plant, allowing for a proper control of impurities entrainment and transfer.

As for the dissolved iron, a concentration of 40 g/L will be reached, which for the purposes of this assessment was assumed to be in the ferric form. However, some of it can be expected to be in the form of ferrous iron. High levels of ferric ion can aid in the dissolution of copper sulphides but also could adversely impact the electrowin (EW) operation. The washing stage will reduce the iron transfer to EW.

Since the leaching circuit will have a high level of impurities, a lower dissolution will occur at the industrial scale because the effect of the impurity concentration in the dissolution kinetics causes a marginal effect on impurities dissolution and lower acid consumption.

13.5 Metallurgical Parameters

13.5.1 Agglomeration

Good agglomeration is critical to achieving a good metallurgical performance, recovery and acid consumption.

Page | 13-125

The agglomeration assumes the use of raffinate solution and concentrated sulphuric acid between 15 and 30 kg/t, which corresponds to a significant fraction of projected acid consumption for oxide and sulphide materials. The sulphide materials in the second stage (year 6 to 12) consider the addition of 15 kg/t NaCl in the agglomeration drums to improve the sulphide oxidation during the resting period.

Therefore, Geology and Mining must have accurate information about the minerals being sent to the plant so that the acid dose during the agglomeration stage is adequate to obtain the copper recoveries assumed in the production plans.

In the future the geological modelling must incorporate not only the CuT and CuS in acid grades, but also the analytic acid consumption, AAC, cyanide-soluble copper values for each block in the block model, and the copper recovery and sulphuric acid consumption estimated by the models.

Resting time without salt addition is around 2–3 days. When salt is added a resting time of 15 to 30 days must be considered.

13.5.2 Crushing Size

For the 2020 PEA, a particle size distribution after the crushing process of P90 <1/2” with a content of fines of less than 12% -100# Tyler mesh has been considered.

In the Geomet I metallurgical tests, columns with grain sizes P90<3/4" and P90<1/2" were tested in parallel, with an improvement in recoveries due to the use of the finer particle size. For the purposes of the 2020 PEA, i this particle size distribution was maintained as a design parameter, but preliminary analyses of the copper recoveries by particle size indicate that there is still potential to improve the copper recoveries by decreasing the sizing, e.g. at P100<1/2". This will be evaluated in further studies by taking advantage of the good hydrodynamic behaviour of the materials in the tests.

Figure 13-25 presents the particle size distribution of the Geomet I and II tests (P90<3/4” & P90<1/2”).

In order to estimate the theoretical behaviour of the industrial crushing circuit, it is necessary to have the ROM particle size distribution that will feed the primary crusher and the ROM leach. Two different ROM size distributions were considered (Figure 13-26).

Page | 13-126

Figure 13-25: Crushed Material Particle Size Distribution.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-26: ROM Particle Size Distribution.

Note: Figure prepared by Marimaca Copper, 2020.

13.5.3 Heap Height

In the Geomet I and II metallurgical tests, columns with heights from 1 to 3 m were tested without identifying problems for the treatment under these conditions such as excessive compaction or permeability restrictions.

In Figure 13-27 to Figure 13-33 for the same sample, the kinetics of total copper recovery show that in the higher columns (1.6 to 3 m) the copper recoveries are equal or only slightly lower

Page | 13-127

than those of the 1 m high columns. When this difference exists, it is possible to improve the recovery by extending the leaching cycle by 10–20 days. The acid consumptions of the higher columns (1.6 to 3 m) are lower than those of the shallower (0.3 m) columns at the same leaching time and even when a slightly longer cycle time is required to achieve equal recovery.

Figure 13-27: Effect of Height on Marimet-1 Columns.

Note: Figure prepared Marimaca Copper, 2020.

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Figure 13-28: Effect of Height on Marimet-2 Columns.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-29: Effect of Height on Marimet-3 Columns.

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 13-30: Effect of Height on Marimet-4 Columns.

Note: Figure prepared by Marimaca Copper, 2020.

Figure 13-31: Effect of Height on Marimet-5 Columns.

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 13-32: Effect of Height on Marimet-6 Columns.

Note: Figure prepared Marimaca Copper, 2020.

Figure 13-33: Effect of Height on Marimet-7 Columns.

Note: Figure prepared by Marimaca Copper, 2020.

Page | 13-131

An economic trade-off analysis between heap height and constructed leaching area was conducted to determine the preferred combination and leaching time (residence time).

Considering the 2020 PEA mine plan throughput assumptions, leaching areas ranging from 300,000 to 1,000,000 m 2 and heap heights from 1 to 6 m were evaluated. For each scenario, individual net present values (NPVs) were calculated considering the different investments costs, total copper recovery, copper inventory and acid consumption.

A dynamic METSIM model was fitted to the metallurgical experimental data and used for calculating the results for higher heaps and longer leaching times. Kinetics of total copper recovery and acid consumption for each mineral subzone sample and heap height were calculated. Results for BROC/ATA are presented as examples in Figure 13-34 and Figure 13-35.

Figure 13-34: Total Copper Recovery Kinetics at Different Heap Heights (BROC/ATA Model).

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 13-35: Net Acid Consumption Kinetics at Different Heap Heights (BROC/ATA Model).

Note: Figure prepared by Marimaca Copper, 2020.

A differential NPV value was obtained for each scenario and presented in Table 13-21.

Table 13-21: Trade-off Analysis.

Differential NPV (M$) Heap Height (m) Area 1 (m2) Total Area (m2) 1 2 3 4 5 6 200,000 333,333 -155.5 -48.7 -1.2 17.7 -4.4 -42.3 300,000 500,000 -90.1 -8.0 25.7 41.2 37.9 12.4 400,000 666,667 -64.7 2.5 25.1 32.9 34.6 19.6 500,000 833,333 -54.2 0 10.7 10.5 11.3 2.6 600,000 1,000,000 -51.6 -11.4 -11.5 -18.2 -19.2 -29.0

The preferred NPV is achieved with 4m heaps and a total leaching area of 500,000 m 2 (phase 1 + phase 2). This combination defines an average leaching cycle of 95 days. For the 2020 PEA these values are considered as design parameters, however this is still subject to optimization in the next stages of the project.

An important aspect shown by the METSIM model is the low level of sulphuric acid in the deeper levels, which decreases the specific acid consumption, but the free acid is needs to be sufficient for copper dissolution. If the heap height is too greatly increased there is insufficient acid in the lower bed section for the copper reactions. An example of the results for the acid concentration evolution at different height of bed is presented in Table 13-22.

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Table 13-22: Modelled Acid Concentration in Drainage at Different Heap Height.

Acid Leaching days Concentration (gpl) 30 60 90 120 150 180 210 240 270 300 Irrigation 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 Off 1m 6.0 6.4 6.7 7.0 7.3 7.6 7.9 8.1 8.3 8.5 Off 2m 2.8 3.4 3.8 4.1 4.5 4.8 5.2 5.5 5.8 6.1 Off 3m 1.4 2.0 2.4 2.7 3.0 3.2 3.5 3.9 4.2 4.5 Off 4m 0.1 1.1 1.4 1.6 1.9 2.1 2.3 2.6 2.9 3.1 Off 5m 0.0 0.0 0.3 0.7 0.9 1.1 1.2 1.4 1.6 1.8 Off 6m 0.0 0.0 0.0 0.0 0.1 0.4 0.6 0.8 1.0 1.1

The current definition of 4m columns seem to be reasonably supported by the model and the experimental data, but it must be tested in the next project phases. Some combination of higher irrigation rate and lower acid concentration could also be tested.

13.5.4 Irrigation Rate

For the 2020 PEA, an irrigation rate of 12 L/h/m 2 for the crushed material heaps and 5 L/h/m 2 for the ROM leaching is considered. This irrigation rate value is slightly higher than the tested amounts, but it allows for consistency when estimating the global solution plant balances. The use of sprinklers for crushed material heap and drippers for ROM leaching are considered.

In the Geomet I and II metallurgical tests, irrigation rates of 8 and 10 L/h/m 2 were tested, the material was demonstrated to be very competent, and to have good hydrodynamic properties. There is potential to evaluate the use of higher irrigation rates.

The different mineral samples show a low content of fines, -100# Tyler mesh (150 µm) when crushed, between 10–12%. After leaching, a slight degradation is observed, increasing by an additional 1–2% of fine mineral. The ripios moisture is in the range of 9–10%. No flooding problems were detected in the column tests. Minerals have a low clay content. These aspects have a positive impact on the hydrodynamic properties of the crushed materials, and it is estimated that together with the low operating height, they will allow the eventual use of higher irrigation rates in case this will present metallurgical advantages. Within the next phases of the project, a formal hydrodynamic characterization of the material is contemplated with a specialized laboratory to confirm these assumptions.

The first stage of the leaching cycle considers continuous irrigation to accelerate the copper dissolution, but the use of intermittent irrigation may be required in the second leaching cycle to optimize the specific acid consumption, kgH 2SO 4/kgCu, in the last stage of the copper dissolution. In addition, the frequency of irrigation in the second leaching stage will allow, in conjunction with solution recirculation, the management of the copper tenor in the pregnant leach solution (PLS) feed to the SX circuit.

Given the heap height, it is recommended to use sprinklers. With dripper irrigation, it is possible that the surface may not get properly irrigated due to the distance between the drippers.

The sprinklers should be of fine drops, even if they have a smaller irrigation diameter. If drippers are used, it would be better to use 2 L/h emitters, and not below, so as to avoid the dripper labyrinth becoming clogged with solid material and its flow lowered for the fixed operating pressure. It is possible, that with a SX operation which maintains low organic entrainment in the raffinate, that the dripper mesh may be used three or more times.

Page | 13-134

13.5.5 Leaching Cycle

The oxidized minerals (BROC, CRIS and WAD) will have three days of resting time and 92 days of irrigation, completing a leaching cycle of 95 days. The sulphide minerals (MIX and ENR) will have 30 days of resting time and 110 days of irrigation, to complete a cycle of 140 days. During years 1 to 5, to capture their synergy reported in literature, MIX and ENR minerals will be blended preferentially with WAD and treated as oxides without salt addition. Segregated operation for oxide and sulphide minerals is considered in the second period (years 6 to 12). For the ROM, 180 days of continuous irrigation in a permanent heap will be considered. The number of leaching modules for each project stage are defined according to material processing and are presented as part of the process design criteria.

The ROM will be irrigated with raffinate and its rich solution will report to the intermediate leach solution (ILS) pond. For the crushed material heap, a two-stage irrigation cycle is contemplated, irrigating in a first stage with ILS and subsequently with raffinate. Intermittent irrigation strategies can be used to control the copper concentration in the PLS that will be fed to the SX plant. Figure 13-36 and Figure 13-37 present simplified solution balances for the leaching circuit, for years 1 to 5 and years 6 to 12 respectively.

Figure 13-36: Simplified Leach Circuit Balance Years 1 to 5.

Irrigation RF solution ROM Irrigation Fresh ROM Ore 1,421 m3/hr 442 m3/hr 8838 tpd RF Heap Irrigation 1,379 979 m3/hr m3/hr ILS Leached Crushed Fresh Crushed Ore Ore (Ripios) Heap ROM 14795 tpd

960 m3/hr 420 m3/hr

ILS Pond

PLS to SX 1,350 m3/hr

Unit Heap ROM Unit 1st Cycle 2nd Cycle Total ROM Irrigation Rate L/h/m2 12.0 5.0 [Cu] on gpl 1.50 0.34 0.34 Height m 4.0 10.0 Leaching Ratio m3/dmt 2.24 1.59 1.20 Bulk density dmt/m3 1.65 1.80 Leaching Time Days 52.0 40.0 92.0 180 Ripio Moisture %wb 10.0 7.0 [Cu] off gpl 3.53 1.55 1.40 Ore Feed tpd 14,795 8,838 Irrig. Frequency h/d 23.7 21.8 24.0 Copper Grade % 0.780 0.290 Copper Recovery % 70.0 30.0 100.0 Copper Dissolution % 79.8 40.9 Irrigation area m2 116,563 89,664 206,227 Copper Dissolution tpy 33,605 3,824 Total Cu Dissolution tpy 37,430 [H+] on gpl 10.00 10.00 10.00 SX transfer tpy 38,369 [H+] off gpl 2.50 2.80 0.55 Bleed EW aprox % 2.5 Acid agglomeration kg Ind/dmt 20.0 Cu Tail entrainment tpy 289 Copper Production tpy 37,140 Total acid consumption Kg/dmt PLS Flow to SX Plant m3/h 1350 - Agglomeration Kg/dmt 19.0 - 1° Cycle Kg/dmt 17.1 11.4 SX Profile - 2° Cycle Kg/dmt 11.5 Cu PLS a SX gpl 3.53 Net Acid consumption Kg/dmt 38.0 9.5 Cu RF SX gpl 0.28 Kg Ind/dmt 40.0 10.0 H2SO4 PLS a SX gpl 2.50 H2SO4 RF SX gpl 7.50 Leaching Cycle days 95.0 Resting time days 3.0 Irrigation time days 92.0

Note: Figure prepared by Marimaca Copper, 2020.

Page | 13-135

Figure 13-37: Simplified Leach Circuit Balance Years 6 to 12.

Irrigation RF solution ROM Irrigation Fresh ROM Ore 2,132 m3/hr 448 m3/hr 8959 tpd RF Heap Irrigation 2,076 1,684 m3/hr m3/hr ILS Leached Crushed Fresh Crushed Ore Ore (Ripios) Heap ROM 24633 tpd

1,650 m3/hr 426 m3/hr

ILS Pond

PLS to SX 2,025 m3/hr

Unit Heap ROM Unit 1st Cycle 2nd Cycle Total ROM Irrigation Rate L/h/m2 12.0 5.0 [Cu] on gpl 0.99 0.26 0.26 Height m 4.0 10.0 Leaching Ratio m3/dmt 2.02 1.64 1.20 Apparent density dmt/m3 1.65 1.80 Leaching Time Days 52.0 40.0 92.0 180 Ripio Moisture %wb 10.0 7.0 [Cu] off gpl 2.40 0.99 0.99 Ore Feed tpd 24,633 8,959 Irrig. Frequency h/d 21.4 22.6 24.0 Copper Grade % 0.490 0.200 Copper Recovery % 70.0 30.0 100.0 Copper Dissolution % 79.9 41.0 Irrigation area m2 194,077 149,290 343,367 Copper Dissolution tpy 35,196 2,680 Copper Dissolution tpy 37,876 [H+] on gpl 10.00 10.00 10.00 SX transfer tpy 39,242 [H+] off gpl 2.50 4.20 1.05 Bleed EW aprox % 2.5 Acid agglomeration kg Ind/dmt 20.0 Cu Tail entrainment tpy 319 Copper Production tpy 37,557 Total acid consumption Kg/dmt PLS Flow to SX Plant m3/h 2025 - Agglomeration Kg/dmt 19.0 - 1° Cycle Kg/dmt 15.4 10.8 SX Profile - 2° Cycle Kg/dmt 9.7 Cu PLS a SX gpl 2.40 Net Acid consumption Kg/dmt 38.0 9.5 Cu RF SX gpl 0.19 Kg Ind/dmt 40.0 10.0 H2SO4 PLS a SX gpl 2.50 H2SO4 RF SX gpl 5.90 Leaching Cycle days 95.0 Resting time days 3.0 Irrigation time days 92.0

Note: Figure prepared by Marimaca Copper, 2020.

13.6 Conclusions and Recommendations

The mineralization is mainly composed of copper oxides highly soluble in sulphuric acid, highlighting the presence of atacamite, brochantite and chrysocolla. The presence of other less soluble oxides such as copper wad is detected and some copper sulphide not exceeding 20% of the leachable mineralization. The presence of copper associated with iron oxides and clays is also reported.

According to the predominance of these species, mineral subzones have been defined for the resource modelling. BROC/ATA subzone for minerals dominated by Atacamite or Brochantite, CRIS for Chrysocolla, WAD for Copper Wad, MIX for minerals with the presence of both oxides and secondary copper sulphides and ENR for minerals dominated by secondary copper sulphide.

Page | 13-136

Table 13-23: In pit Resources per Mineral Zone.

Measured Indicated Inferred SZmin CuT CuS CuT CuS CuT CuS kt (%) (%) kt (%) (%) kt (%) (%) BROC/ATA 10,890 0.76 0.55 24,719 0.68 0.49 17,618 0.63 0.42 CRIS 4,918 0.59 0.45 9,581 0.5 0.37 9,978 0.47 0.33 ENR 1,176 0.75 0.17 3,468 0.69 0.14 2,193 0.63 0.13 MIX 475 1.02 0.26 1,177 0.86 0.21 3,661 0.63 0.15 WAD 3 0.27 0.17 36 0.26 0.14 43 0.27 0.09 WAD GT 0.1 3,260 0.34 0.2 10,686 0.32 0.18 9,521 0.31 0.17 Total 20,721 0.66 0.44 49,666 0.57 0.37 43,015 0.52 0.31

According to the results of the Geomet I, II and III metallurgical tests, mineralization has suitable metallurgical properties for exploitation by a hydrometallurgical heap leach plant. In particular, a chloride leaching process is proposed using the chloride base level from the use of seawater and the chloride present in the mineralization, which including the addition of NaCl during agglomeration allows for recovery of some of the copper present in the sulphide fractions.

Design criteria were developed for all process stages: crushing, agglomeration, leaching, solvent extraction and electrowinning.

For 2020 PEA mine plan purposes, copper recoveries were developed for each mineral subzone, and comprise 82% for BROC/ATA, 77% for CRIS, 65% for WAD, 62% for MIX and 49% for ENR. These values are sustained by the metallurgical results achieved to date. In the following stages of metallurgical studies such as Geomet IV, currently underway, the metallurgical testing program includes the addition of NaCl to sulphide during agglomeration and irrigation with high chloride concentrations. It is expected that this will further support the total copper recoveries achieved experimentally.

According to the results of the Geomet I and II columns and the trends shown in the Geomet I and III iso-pH tests, the targets for acid consumption in the project are 40 kg/t for oxide (BROC/ATA, CRIS and WAD) and 35 kg/t for sulphide minerals (MIX and ENR). These values that must be verified with future metallurgical characterization and optimization programs.

In the next stages of the project, the control of acid consumption will be one of the objectives. In the different tests performed, the samples show a tendency for a linear increase in acid consumption with prolonged leach time, as well as an effect of the acid concentration on the rate of acid consumption of the minerals has been demonstrated. Future definition of preferred operational parameters, therefore, should consider these aspects, as well as a review of the leaching stage flow diagrams to take advantage of this knowledge.

A 4 m heap height was defined for the 2020 PEA based on METSIM modelling of experimental data and an economic trade-off analysis. This process condition should be tested in the next project phases to ensure acid availability for a proper metallurgical response. Possible future changes in the acid concentration, irrigation rate and management strategy will be considered.

Unlike other deposits in the area, the carbonate content is relatively low and would explain 30% of the expected acid consumption. It is important to note that the system will operate with high quantities of dissolved iron and aluminium, which are estimated to represent about 30% and 20% of acid consumption, respectively.

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It is estimated that the plant will operate with high levels of dissolved impurities, the most relevant levels being chloride (63–73 g/Ll), iron (40 g/L) and sulphates (200 g/L). In future project stages an adequate study of the effect of impurities will be critical, such as the effect on copper recovery, acid consumption, impact on the efficiency of the SX-EW plant, increase in pumping costs and selection of materials, among others. Taking into account these impurity levels, particularly chloride, an SX plant with two washing stages has been considered for the 2020 PEA.

Samples analysed in the Geomet I, II and III metallurgical programs primarily correspond to oxide minerals. To improve estimates for sulphide materials, some samples are included in the Geomet IV program, currently under development, but no results are available.

Low-grade materials will be subject to ROM leaching. This operation has been preliminarily defined in 10-m layers, with a leaching cycle of six months and 10 g/L of sulphuric acid in irrigation and a continuous application rate of 5 L/h/m 2. ROM-rich solutions will be sent to the ILS pond for integration into the crushed material leach circuit.

It is recommended that the different estimates presented in this Report are reviewed when more information becomes available from metallurgical testing, e.g., Geomet IV, variability analysis and metallurgical optimization testing plan. Particularly for the construction of the copper recovery and acid consumption models, it is estimated that the use of the mineralogy of the copper-bearing species and of the gangue will allow a better understanding of the metallurgical performance. In addition, METSIM modelling of metallurgical behaviour will facilitate the evaluation of operational variable combinations for optimizing performance.

It is recommended to improve the characterization and understanding of the copper-bearing mineral species that accompany the predominant species, in order to achieve a better understanding of the metallurgical behaviour of the resource and its preferred processing strategy. This work should support definition of geometallurgical units that can be assigned applicable factors during resource estimation.

It is recommended to develop a metallurgical optimization plan of the process parameters which capture benefits and to demonstrate them, considering at least the following factors:

 Crush size: finer crush size should be explored to improve copper recoveries if they do not impact excessively on acid consumption or hydrodynamic property of the heap.  Heap height: The column height must be optimized to allow an adequate control of the acid consumption.  Agglomeration conditions: Optimal acid and NaCl dosages for the project must be evaluated and their results in copper recovery and acid consumption must be demonstrated.  Irrigation rate and acidity: The combination of irrigation rate and acidity must be optimized to minimize acid consumption. It is presumed that with higher irrigation rates and lower acid concentrations, the consumption of sulphuric acid can be reduced.

It is intended to use all the available metallurgical data to model the mineral behaviour and to study different solution management strategies that allow optimizing the acid consumption. For example, the one proposed by (Scheffel, Miller) considering a first leaching cycle with an irrigation with higher acid concentration and a second cycle with lower acidity.

It is recommended to supplement tests to define the conditions for treatment of low-grade mineralization by ROM leaching.

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It is recommended after defining the preferred operating parameters to complete the metallurgical variability analysis plan under these process conditions in order to demonstrate the applicability of these criteria for the entire deposit.

It is recommended the development of METSIM models for the complete simulation of the plant, thus verifying the consistency of all the assumptions used and becoming a tool to optimize the criteria that define it. These models will generate detailed balances of copper, sulphuric acid, water, NaCl, impurities and solids in each stage and stream of the process (crushing, agglomeration, leaching circuits, SX and EW) and explore different combinations of operational parameters.

It is recommended to evaluate all the studies completed to develop the best understanding of the metallurgical behaviour of the mineralization and the optimization of its process parameters.

During this complete review of the Marimaca mineral characterization and metallurgical response, no fatal flaws where identified and its suitability to be treated by a leaching process is supported.

The current proposed copper recoveries are based on available data. Nonetheless, in next stages, more complete copper recovery and acid consumption models should be developed based on a more detailed mineral characterization.

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14 Mineral Resource Estimates

14.1 Introduction

Estimation was conducted using commercially available Leapfrog and GEMS software.

14.2 Geological Models

Marimaca Copper geologists provided lithology, structure and mineralization interpretations based on vertical paper cross sections that were oriented northeast, northwest, and east– west at 1:1,000 scale. The majority of the deposit area was covered by a set of 50 m-spaced sections.

The lithological units and structural interpretations were based primarily on the detailed surface geology map, as well as underground mine workings maps. Drill hole logging and structural measurements provided additional support for the interpretations. Mineralization zones were based primarily on drill hole logging. No alteration model was constructed as Marimaca Copper is of the opinion that alteration is not a mineralization control.

The interpretations were transferred to transparent overlays, with the lithology and structure as the first dataset, followed by the mineralization interpretations. Atticus Geo Company (Atticus) constructed two models from these data, a litho-structural model (Figure 14-1), and a mineralization model (Figure 14-2 and Figure 14-3). The mineralization interpretations are used as the domains for resource estimation. The domains are brochantite, chrysocolla, enriched, wad CuT ≥0.1%, wad CuT <0.1%, and chalcopyrite.

After comparing the Mineral Resource model against the informing composites and the model statistics, NCL concluded that the modelling approach produced a reasonable and reliable model.

14.3 Database Supporting Mineral Resource Estimate

The primary support for the Mineral Resource estimate is data collected from the 2016, 2017 and 2018 drill programs, totaling:

 346 RC drill holes, comprising 82,234 m of drilling, and 41,784 samples. Of these, 41,461 samples have CuT grades >0, and 41,459 samples have CuS grades >0  39 core holes, comprising 8,976 m of drilling and 4,499 samples. Of these, 4,497 samples have CuT grades >0, and 4,497 samples have CuS grades >0.

All samples without a grade value in the database were eliminated prior to resource modelling. Values labelled <0.001% were changed to 0.001% for both CuT and CuS.

14.4 Sample Coding

Samples from the database were coded based on the 3D solid codes, based on the solid that contained the sample centroid. Table 14-1 summarizes the raw sample data. Table 14-2 and Table 14-3 show the initial and resulting coding statistics. The differences in the numbers of samples are a function of the mineralization and the smoothing of the solid model.

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Figure 14-1: 3D Litho-Structural Model

Note: Figure prepared by NCL, 2020.

Figure 14-2: 3D Mineral Zones Model

Note: Figure prepared by NCL, 2020. Dark green = brochantite; red = mixed; blue – chrysocolla; purple = enriched; light green = wad, and orange–brown = chalcopyrite.

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Figure 14-3: Details of the Copper Mineral Zones from 3D Wireframes

Note: Figure prepared by NCL, 2020.

Table 14-1: CuT Raw Sample Data

N° of Sample in Solid Coded Data

Wad Wad Brochantite Chrysocolla Enriched Mixed Cu Cu Chalcopyrite ≥0.1% <0.1% Brochantite 3,449 246 63 64 447 33 6 Chrysocolla 406 2,074 35 19 323 34 3 Enriched 72 13 988 294 57 12 59 Mixed 135 28 406 497 129 12 13 Wad 647 418 65 63 3,445 282 8 Cu=>0.1 Wad Cu<0.1 39 26 3 2 38 162 Chalcopyrite 21 3 112 31 6 1 596

Waste 55 39 68 18 35 607 18 Lix 206 186 131 126 104 2,355 6 Pyrite 74 7 383 113 6 162 156 No Data 602 167 342 59 199 231 109 Total 5,706 3,207 2,596 1,286 4,789 3,891 974 Original RawData

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Table 14-2: CuT Sample Statistics

Original Raw Data CuT Wad Wad Brochantite Chrysocolla Enriched Mixed Chalcopyrite Cu ≥0.1% Cu <0.1% N° Sample 4,308 2,894 1,495 1,220 4,928 270 770 Mean % 0.683 0.515 0.614 0.691 0.233 0.072 0.682 Std. Dev. 0.781 0.476 0.946 1.220 0.186 0.025 1.244 Coef. of Var. 1.144 0.925 1.540 1.766 0.799 0.349 1.825 Maximum % 14.443 5.006 14.083 19.253 7.188 0.099 13.975 Upper Quartile % 0.827 0.618 0.613 0.674 0.265 0.095 0.642 Median % 0.450 0.375 0.296 0.315 0.178 0.076 0.256 Lower Quartile % 0.248 0.218 0.175 0.182 0.132 0.053 0.141 Minimum % 0.015 0.014 0.029 0.019 0.100 0.012 0.011 Solid Coded Data CuT Wad Wad Brochantite Chrysocolla Enriched Mixed Chalcopyrite Cu ≥0.1% Cu <0.1% N° Sample 5,706 3,207 2,596 1,286 4,789 3,891 974 Mean % 0.637 0.472 0.430 0.469 0.298 0.065 0.480 Std. Dev. 0.910 0.545 0.760 0.882 0.438 0.077 1.016 Coef. of Var. 1.429 1.154 1.770 1.879 1.471 1.179 2.117 Maximum % 19.253 8.087 12.194 12.558 8.623 1.801 13.975 Upper Quartile % 0.751 0.576 0.454 0.437 0.311 0.080 0.448 Median % 0.383 0.303 0.197 0.196 0.195 0.048 0.172 Lower Quartile % 0.184 0.155 0.083 0.091 0.137 0.027 0.091 Minimum % 0.006 0.004 0.003 0.003 0.010 0.002 0.003

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Table 14-3: CuS Sample Statistics

Original Raw Data CuS Wad Wad Brochantite Chrysocolla Enriched Mixed Chalcopyrite Cu ≥ 0.1% Cu <0.1% N° Sample 4,308 2,893 1,495 1,220 4,927 270 770 Mean % 0.544 0.401 0.079 0.255 0.117 0.025 0.035 Std. Dev. 0.722 0.426 0.111 0.531 0.149 0.017 0.057 Coef. of Var. 1.326 1.063 1.406 2.077 1.279 0.666 1.627 Maximum % 13.853 4.661 2.900 6.095 5.584 0.075 0.592 Upper Quartile % 0.652 0.484 0.091 0.237 0.135 0.034 0.038 Median % 0.321 0.270 0.048 0.118 0.076 0.021 0.018 Lower Quartile % 0.155 0.139 0.027 0.068 0.043 0.012 0.008 Minimum % 0.003 0.004 0.002 0.008 0.006 0.002 0.002 Solid Coded Data CuS Wad Wad Brochantite Chrysocolla Enriched Mixed Chalcopyrite Cu ≥ 0.1% Cu <0.1% N° Sample 5,705 3,207 2,596 1,286 4,788 3,891 974 Mean % 0.467 0.356 0.090 0.128 0.162 0.026 0.031 Std. Dev. 0.704 0.459 0.211 0.264 0.294 0.053 0.061 Coef. of Var. 1.506 1.290 2.350 2.058 1.819 2.033 1.929 Maximum % 13.853 6.316 4.246 3.189 6.095 1.542 0.718 Upper Quartile % 0.564 0.437 0.085 0.124 0.172 0.027 0.031 Median % 0.251 0.214 0.036 0.052 0.088 0.013 0.014 Lower Quartile % 0.095 0.088 0.014 0.017 0.045 0.006 0.006 Minimum % 0.001 0.002 0.001 0.001 0.002 0.001 0.001

14.5 Composites

A second check was conducted to determine that there were no samples that had a CuS grade that was higher than the CuT grade (refer to Table 14-2 and Table 14-3). All assays in the resource estimate are the raw sample grades.

14.6 Contact Analyses

Contact plots were conducted between each domain to determine whether CuT estimation should use soft, hard, or firm contacts. The graphs indicated that all contacts were hard, and so domains were independently estimated. All contacts were also treated as hard boundaries, as a result, when estimating CuS.

14.7 Capping/Outlier Restriction

Log-probability curves were used to examine population distributions. Caps were imposed as summarized in Table 14-4. A 5 m search ellipse was used during estimation to locally restrict the samples with grades above the cap value.

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14.8 Variography

Correlograms were calculated, instead of than conventional variograms, for five zones considered to be structurally separated. These are the Tarso, Atahualpa, Atahualpa–La Atomica, La Atomica and Marimaca zones shown in Figure 7-6.

Two approaches were taken. One used the contact analysis populations, the second used all of the samples within the estimation solids. The correlograms generated using the contact analysis population were considered to provide a better representation of the mineralization trends. Down-hole variograms were also modelled.

Table 14-5 and Table 14-6 summarize the variogram parameters used in estimation.

14.9 Block Model

A percentage model was run in GEMS for each mineralized domain. The block size was 5 m x 5 m x 5 m in size, rotated to N 40º E to match the geological section interpretations. An example of the resulting estimate is shown in Figure 14-4, for the Atahualpa zone. The remaining blocks below the surface topography were coded as waste.

Coding validation involved checking of rock codes on screen, in plan and section view.

14.10 Density Assignment

Prior to estimation, all outliers were removed from the 562 determinations available. The average density per zone is provided in Table 14-7. These average values were assigned to each of the estimation domains.

14.11 Estimation/Interpolation Methods

Grade was interpolated using ordinary kriging (OK) and a series of four passes. The anisotropic search parameters are summarized in Table 14-8. In this table, the distance where the correlogram reaches the value equivalent to 85% of the sill, is used as the interpolation range. Table 14-9 provides the search distances used for x, y, and z in each domain.

Table 14-4: Grade Caps

CuT (%) Cap CuS (%) Cap

Brochantite 8.0 6.0 Chrysocolla 3.0 2.5 Enriched 4.2 2.4 Mixed 6.6 1.7 Wad 1.8 1.5 Chalcopyrite 3.9 0.3

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Table 14-5: Correlograms, Adjusted Models CuT According Structural Domain

1st Structure 2nd Structure 3rd Structure Principal Principal Intermediate Area Domain Nugget Range (m) Range (m) Range (m) Azimuth Dip Azimuth Sill 1 Sill 2 Sill 3 X Y Z X Y Z X Y Z Manolo All — — — 0.35 0.4 7 7 7 0.2 20 20 20 0.1 90 90 90 Marimaca All 90 -60 0 0.35 0.4 11 12 4 0.2 115 105 90 0.1 100 150 120 Atahualpa All 35 -37 13 0.35 0.4 25 11 6 0.2 30 110 35 0.1 80 130 250 Atomica Atahualpa All 90 -20 0 0.35 0.3 13 7 9 0.3 30 62 20 0.1 100 100 40 Tarso All — — — 0.35 0.4 9 9 9 0.2 20 20 20 0.1 90 90 90

Table 14-6: Correlograms, Adjusted Models CuS According Structural Domain

1st Structure 2nd Structure 3rd Structure Domai Principal Principal Intermediate Area Nugget Range (m) Range (m) Range (m) n Azimuth Dip Azimuth Sill 1 Sill 2 Sill 3 X Y Z X´ Y Z X´ X Y Manolo All — — — 0.35 0.4 7 7 7 0.2 60 60 60 0.1 100 100 100 Marimaca All 50 -80 0 0.35 0.4 5 18 11 0.2 15 45 30 0.2 130 160 60 Atahualpa All 60 -20 13 0.35 0.4 8 9 7 0.2 55 100 40 0.1 55 110 160 Atomica Atahualpa All 90 -80 0 0.35 0.3 30 9 8 0.2 700 90 60 0.1 120 120 80 Tarso All — — — 0.35 0.4 7 7 7 0.2 35 35 35 0.1 120 120 120

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Figure 14-4: Mineral Zones Solid (Atahualpa Domain)

Note: Figure prepared by Marimaca Copper, 2020.

Table 14-7: Density by Mineralization Type

SZMIN Mean (t/m 3) Brochantite 2.639 Chalcopyrite 2.719 Chrysocolla 2.670 Enriched 2.649 Waste 2.645 Lixiviated 2.663 Mixed 2.688 Pyrite 2.711 Wad 2.642

Table 14-8: Kriging Plan Parameters

Estimation Plan Run 1 Run 2 Run 3 Run 4 Max n° composite per octant 4 4 4 4 Min n° of octants with information 3 3 1 1 Min n° of composites 8 6 4 4 Max n° of composites 12 12 12 12

Search range D85 2 x D 85 4 xD 85 1,000 Min n° of drill holes 2 2 1 1

Table 14-9:D85 Direction for Structural Domains

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D85 D85 D85 Structural Domain Mineral Zones X Y Z (m) (m) (m) Manolo All 6.65 6.65 6.65 Marimaca All 30.50 30.50 26.00 Atahualpa–Atomica All 18.80 30.00 14.20 Atahualpa All 15.50 28.20 9.50 Tarso All 7.56 7.56 7.56

14.12 Block Model Validation

A visual inspection on-screen of plan views and vertical sections of the block model was undertaken to compare the model grades with the drill hole grades. The inspection indicated no material issues.

A second check was to validate the block grades against the raw drill hole data used in estimation, and against declustered grades from a nearest-neighbour (NN) analysis. No global biases were noted.

The third check consisted of trend analyses, where mean block grades were compared with the direct mean and NN declustered mean of the raw drill hole data for each estimation domain. No excessive smoothing was noted, and the estimated mean was considered to be acceptable when compared to the declustered mean. The estimated grades were considered to preserves the mean grades, global variability and tendencies of the original samples.

14.13 Classification of Mineral Resources

The four estimation passes were used to define the confidence category of each block (Table 14-10). Pass 1 resulted in Measured Mineral Resources, Pass 2 in Indicated, and Pass 3 in Inferred. All blocks estimated in the fourth pass were considered unclassified.

Figure 14-5 and Figure 14-6 are cross-sections through the block model showing the classified blocks in relation to the supporting drill holes.

Figure 14-5: Block Model Cross Section

Note: Prepared by Marimaca Copper, 2020.

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Figure 14-6: Block Model Cross Section

Note: Prepared by Marimaca Copper, 2020.

14.14 Reasonable Prospects of Eventual Economic Extraction

Reasonable prospects of eventual economic extraction were addressed by applying a resource pit shell defined using Whittle software and the parameters outlined in Table 14-11.

Pit slope angles were derived from a study carried out by Ingeroc S.A. (Ingeroc) in 2019. The major geotechnical domains are shown in Figure 14-7, and the pit slope recommendations are summarized in Table 14-12)

The applicable cut-off grade for heap leaching was calculated as 0.22% CuT, based on the following:

 Cut-off grade = (Mc + HLc)/((Cu Price – SC) * HL Rec * 2,204.62.

Where:

 Mc = mining cost  HLc = heap leaching cost  SC = selling cost  HL Rec = heap leaching plant metallurgical recovery

Marginal cut-off grades for the heap leach and ROM processes were calculated using the above equation without considering mining costs:

 Marginal cut-off grade heap: 0.18% CuT  Marginal cut-off grade ROM: 0.10% CuT.

The conceptual pit design assumed 5 m benches doubled to 10 m benches, an inter-ramp height of 150 m, and 25 m wide ramps.

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Table 14-10: Resource Classification

Interpolation Search Number of Intercepts Classification Pass Range

1 D85 2 Measured

2 2 x D 85 2 Indicated

3 4 xD 85 1 Inferred 4 1,000 m 1 Unclassified

Table 14-11: Pit Shell Input Parameters

Figure 14-7: Geotechnical Zones

Note: Figure prepared by Marimaca, 2020.

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Table 14-12: Inter Ramp and Overall Slope Angles

Inter-ramp Slope Overall Slope Face Catch Slope Slope IRA Height Backbreak Berm Zone Angle Berm Height Angle β ϒ H a c L α b (m) (º) (º) (m) (m) (m) (m) (º) Z1 47.4 75.0 10.0 2.7 6.5 12.0 150 46 Z2 44.6 70.0 10.0 3.6 6.5 12.0 150 44 Z3 47.4 75.0 10.0 2.7 6.5 12.0 150 46

During the design of the conceptual pit, NCL modified the “percentage model” to an integrated model, such that there was only one value per block and variable. The CuT and CuS grades per block were calculated using the weighted grades and percentages of each of the mineral zones in the block. The final grade value assigned to the block was the grade of the majority mineral zone within the block.

14.15 Mineral Resource Statement

Mineral Resources are reported using the 2014 CIM Definition Standards with an effective date of 15 January 2020. Mineral Resources are reported on a 100% basis. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

The Qualified Person for the estimate is Mr Luis Oviedo, CMC, an NCL employee.

Mineral Resources are provided in Table 14-13. Table 14-4 provides a sensitivity tabulation for the Measured and Indicated Mineral Resource estimates to show the sensitivity of the estimate to changes in cut-off grade, with the base case 0.22% Cu cut-off grade estimate highlighted. Table 14-4 is not additive to Table 14-13.

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Table 14-13: Mineral Resource Statement

Contained Metal Tonnes Grade CuT CuS Classification ( t x 1,000s) CuT CuS Tonnes Tonnes (%) (%) (kt) (kt) Measured Brochantite 10,890 0.76 0.55 82 60 Chrysocolla 4,918 0.59 0.45 29 22 Enriched 1,176 0.75 0.17 9 2 Mixed 475 1.02 0.26 5 1 Wad 3 0.27 0.17 0 0 Wad GT 0.1 3,260 0.34 0.20 11 7 Total Measured 20,721 0.66 0.44 136 92 Indicated Brochantite 24,719 0.68 0.49 167 121 Chrysocolla 9,581 0.50 0.37 48 36 Enriched 3,468 0.69 0.14 24 5 Mixed 1,177 0.86 0.21 10 2 Wad 36 0.26 0.14 0 0 Wad GT 0.1 10,686 0.32 0.18 34 19 Total Indicated 49,666 0.57 0.37 284 184 Measured and Indicated Brochantite 35,609 0.70 0.51 250 181 Chrysocolla 14,499 0.53 0.40 77 58 Enriched 4,644 0.70 0.15 33 7 Mixed 1,652 0.90 0.22 15 4 Wad 38 0.26 0.14 0 0 Wad GT 0.1 13,945 0.32 0.19 45 26 Total Measured and Indicated 70,387 0.60 0.39 420 276 Inferred Brochantite 17,618 0.63 0.42 111 74 Chrysocolla 9,978 0.47 0.33 47 33 Enriched 2,193 0.63 0.13 14 3 Mixed 3,661 0.63 0.15 23 6 Wad 43 0.27 0.09 0 0 Wad GT 0.1 9,521 0.31 0.17 30 16 Total Inferred 43,015 0.52 0.31 224 132

Notes to accompany Mineral Resource Table:

2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

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for CuT leaching and 40% for Cu ROM leaching, a mining cost of $ 2.00/t, processing costs of $9.0/tonne for leach processing and $2.50/t for the ROM process. General and administrative costs are included in the processing costs.

4. Base case Mineral Resources are reported using a 0.22% total copper (CuT) grade. Tonnages contained in the chalcopyrite subzone are not included in the tabulation.

5. Wad GT0.1% unit corresponds to the “high grade Wad”, which was separated from the low-grade Wad to refine the geological model, better reflecting the grade distribution within the deposit.

Mineral Resource estimates have been rounded as required by reporting guidelines.

Table 14-14: Sensitivity of Tonnes, Grades and Contained Metal

Contained Metal Grade Tonnes Classification CuT CuS (t x 1,000s) CuT CuS (kt) (kt) (%) (%) Measured 0.70 7,155 1.09 0.72 78 51 0.50 11,397 0.91 0.61 103 69 0.30 17,865 0.72 0.49 129 87 0.25 19,607 0.68 0.46 134 90 0.22 20,721 0.66 0.44 136 92 0.20 21,467 0.64 0.43 138 93 0.18 22,072 0.63 0.42 139 93 Indicated 0.70 13,180 1.01 0.62 133 82 0.50 23,285 0.83 0.53 193 124 0.30 40,253 0.64 0.42 259 169 0.25 45,995 0.60 0.39 275 179 0.22 49,666 0.57 0.37 284 184 0.20 52,020 0.55 0.36 289 186 0.18 54,109 0.54 0.35 293 189 Measured and Indicated 0.70 20,335 1.04 0.66 211 134 0.50 34,682 0.85 0.56 296 193 0.30 58,118 0.67 0.44 388 256 0.25 65,602 0.62 0.41 409 269 0.22 70,387 0.60 0.39 420 276 0.20 73,487 0.58 0.38 426 279

Note: Footnotes to Table 14-13 also apply to this table. Table 14-14 is not additive to Table 14-13

14.16 Factors That May Affect the Mineral Resource Estimate

Areas of uncertainty that may materially impact the Mineral Resource estimates include:

 Changes to long-term copper price and exchange rate assumptions.  Changes in local interpretations of mineralization geometry and continuity of mineralized zones.

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 Changes to geological and grade shape and geological and grade continuity assumptions.  Changes to interpretations of the structural zones.  Changes to the density values applied as averages to the estimated domains.  Changes to metallurgical recovery assumptions.  Changes to the input assumptions used to derive the conceptual open pit used to constrain the estimate.  Changes to the cut-off grades applied to the estimates.  Variations in geotechnical, hydrogeological and mining assumptions.  Forecast dilution.  Changes to environmental, permitting, and social license assumptions.

14.17 Comments on Section 14

Other than as identified in this Report, the QP is not aware of other environmental, permitting, legal title, taxation, socio-economic or political factors that could affect materially the Mineral Resource estimate.

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15 Mineral Reserve Estimates

This section is not relevant to this Report.

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16 Mining Methods

16.1 Summary

The 2020 PEA is based on the December 2019 updated resource block model. Pit optimization, mine design and mine planning were carried out using this block model and all the available estimated Mineral Resources.

A block size of 5 m E x 5 m N x 5 m RL was selected for the block model. The selected block size was based on the geometry of the domain interpretation and the data configuration.

The 2020 PEA considered the utilisation of innovative strategic mine planning tools based on approximate dynamic and mixed integer linear programming for stablishing the production capacity, mining sequence and mining strategy. The results of these analyses were then validated with classical Lerchs–Grossmann (LG) runs for final pit limits.

16.2 Throughput Rate Rationalisation Study

Marimaca Copper contracted GEM to develop the production strategy for the planned Marimaca operation. GEM used DeepMine software for the analysis of multiple scenarios based the location of the plant, the planned copper production capacity and proposed plant throughput rate.

The evaluation assumed that the SX/EW portion of the plant would produce 40,000 t of copper cathodes per year. Based on the grade distribution within the Marimaca deposit, two throughput rates (crushing, agglomeration, and leaching) were required. The initial period will be at a rate of 5.4 Mt/y for five years, treating the highest-grade available material. This will be followed by seven years at a throughput rate of 9.0 Mt/y that will treat medium-grade material.

The analysis indicated that that the copper cathode production should be complemented by a ROM dump leach operation that would process low-grade material.

The study was reviewed by NCL and was considered suitable for 2020 PEA purposes.

16.3 Input Parameters

The mining cost estimate for the pit optimization process is based on studies undertaken by NCL during 2019. The estimated average mining cost was separated into various components such as fuel, explosives, tires, parts, salaries, and wages, benchmarked against similar current operations in Chile. Each component was updated for fourth quarter 2019 prices and the exchange rate from Chilean Pesos to US dollars. This resulted in an estimated mining cost of approximately $2.10/t. The copper price, processing costs and processing recoveries were provided to NCL by Marimaca Copper.

A summary of the initial input parameters used in the constraining LG pit shell is included in Table 16-1. Table 13-9 showed the processing recoveries by material type.

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Table 16-1: Input parameters

Item Unit Value Copper price $/lb 3.0 Mine $/t mined 2.10 Mineralized material haulage $/t processed 0.48 Crush heap leach $/t processed 4.33 Crush heap leach $/lb 0.25 G&A $/t processed 2.00 Rom leach $/t ROM 2.54 Rom leach $/lb 0.25 Selling cost $/lb 0.07

16.4 Geotechnical Considerations

Based on the geotechnical information obtained from the extensive drilling campaigns conducted at Marimaca, the mining area was divided into three geotechnical zones. In Zone 1, due to favourable geotechnical conditions the overall pit slope angle was approximately 52º assuming double benching at 20 m heights and face angle of 75º. In Zone 2, the overall pit slope angle was reduced to approximately 42º assuming 10 m bench heights and a bench face angle of 70º. Zone 3 was similar to Zone 2, but with a bench face angle of 75 º, which slightly increased the overall slope angle to nearly 45 º. Figure 16-1 shows the locations of the geotechnical zones.

Figure 16-1: Geotechnical Slope Domains

Inter-ramp Slope Overall Slope

ZONE IRA Face Angle Height Backbreak Berm Catch Berm Slope Height Slope Angle

b (°) g (°) H (m) a (m) b (m) c (m) L (m) a (°)

1 55.0 75.0 20.0 5.4 8.6 20.0 150 52.2

2 44.6 70.0 10.0 3.6 6.5 20.0 150 42.3

3 47.4 75.0 10.0 2.7 6.5 20.0 150 44.7

Note: Figure prepared Marimaca, 2020.

16.5 Dilution and Mine Losses

The original block model was based on mineralized material percentages within a parent block of 5 mE x 5 mN x 5 mZ, resulting in a 125 m 3 block volume; this means that every block has

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eventually several portions of mineralized material and waste to represent the interpreted geological wireframes.

To accommodate bulk mining method, a selective mining unit (SMU) of 10 mE x 10 mN x 10 mZ was used. The original blocks from the resource model were combined, mixing the mineralized material and waste, resulting in a fully diluted model for mine planning purposes.

At a cut-off of 0.2% CuT the dilution of the tonnage corresponds to 2.3%, the average copper grade is affected by a factor of 93.3%, and both combined corresponds to a contained copper loss of 4.6%. The dilution factors are dependent on the cut-off grade. At higher cut-offs there is also a loss of the tonnage, higher grade factors and higher contained copper losses, (Table 16-2).

Table 16-2: Dilution and Losses (resource model versus mining model)

Dilution/Losses (%) Cut-off %Cu Tonnes Grade Factor Contained Copper Loss

1.0 -23.1 96.2 26.0 0.9 -20.5 96.4 23.4 0.8 -16.1 95.9 19.6 0.7 -13.5 95.9 17.1 0.6 -8.8 95.2 13.2 0.5 -5.6 94.9 10.4 0.4 -3.3 94.8 8.3 0.3 -1.1 94.5 6.5 0.2 2.3 93.3 4.6 0.1 14.7 86.2 1.1

16.6 Cut-off Grades

Applying the costs and recoveries discussed in Section 16.3, cut-off grades can be for both processing alternatives, crush heap leach and ROM leach. Table 16-3 shows the calculations by type of material. In the case of the crush leach the recoveries are variable. The table also shows the cut-off considering recovered copper grade that was used for mine planning purposes.

Table 16-3: Cut-off Grades Calculation

Item Unit/Material BROC CRIS WAD MIX ENR Price $/lb 3.0 3.0 3.0 3.0 3.0 Heap Leach $/t processed 6.81 6.81 6.81 6.81 6.81 Heap Leach $/lb 0.32 0.32 0.32 0.32 0.32 Recovery Heap Leach % 82% 77% 65% 62% 49% Cut-off Crush Leach %CuT 0.141 0.150 0.177 0.186 0.235 Cut-off Crush Leach %Curec (*) 0.115 0.115 0.115 0.115 0.115 ROM Leach $/t processed 2.54 2.54 2.54 2.54 2.54 ROM Leach $/lb 0.32 0.32 0.32 0.32 0.32 Recovery ROM Leach % 40% 40% 40% 40% 40% Cut-off ROM Leach %CuT 0.107 0.107 0.107 0.107 0.107 (*) %Curec: recovered grade for crush leach, equals %CuT x recovery

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The cut-off grades correspond to the minimum grades that generate a profit for each process. The cut-off grade between the processes, corresponding to the value at which the material above the cut-off grade is sent to crush leach and below the cut-off grade to ROM leach, was considered variable throughout the life of mine (LOM) and is discussed in Section 16.8.

16.7 Pit Designs

Nested pit shells were generated for several revenue factors using Whittle software. Revenue factor 1.0 shell was used as a guide for the final pit design and the analysis of the geometries obtained at lower revenue factors were used for defining the pushbacks or phases.

16.7.1 Final Pit

The final pit design was based on the economic shells obtained at revenue factor 1.0, generated with variable overall slope angles ranging from 42° to 52°depending on the geotechnical domain. The mine design parameters are summarized in Figure 16-1.

Additional 20 m wide safety berms were included in the design when the slope height exceeds 150 m, in accordance with geotechnical recommendations. The final pit design is shown in Figure 16-2.

16.7.2 Mining Phases

Eight pit phases are planned for the Marimaca pit, as shown in Figure 16-3. phase 1 targets the material with the highest grade in the central area, down to 920 masl. phases 2 and 3 are successive expansion to the north, down to 960 masl and 870 masl, respectively.

Phase 4 is an almost independent pit at the northern area of the deposit with an exit to the north and a connection with phase 3 for exiting to the primary crusher to the south. This phase will extend to the 890 masl.

Phase 5 is an expansion to the west of the main pit, to 830 masl. phases 6 and 7 are final expansions to the south and west, respectively to 890 masl and 830 masl.

Phase 8 corresponds to the final expansion of the north pit, to 880 masl.

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Figure 16-2: Final Pit Design

Note: Figure prepared by Marimaca Copper, 2020.

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Figure 16-3: Open Pit Development Phases

Phase 1 Phase 2 Phase 3 Phase 4

Phase 5 Phase 6 Phase 7 Phase 8

Note: Figure prepared by Marimaca Copper, 2020.

16.8 Production Schedule

A mine production schedule was developed to show the mineralised material tonnes, copper grades, waste material and total material by year, throughout the LOM (

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Table 16-5). The distribution of mineralized material and waste contained in each of the mining phases by bench was used to develop the schedule, ensuring that criteria such as continuous material exposure, mining accessibility, and consistent material movements were met.

NCL used Minemax Scheduler for defining the mining strategy.

Minemax Scheduler was configured with the following constraints:

 Input parameters detailed in Section 16.2: copper price, processing costs and recoveries for crush and ROM leach.  Maximum copper production of 40,000 t of copper cathodes per year.  One-year copper recovery delay from ROM leach.  Maximum 10% of copper cathodes production from ROM leach for first three years of production.  Maximum 10 mining benches per phase/year, considering a threshold of 200,000 t per bench.  Ramp-up of 75% for first year, for tonnes and copper cathode production.

Minemax Scheduler results indicated that an initial pre-stripping period of 4.0 Mt would be required to expose sufficient mineralised material to start commercial production in Year 1. The mineralised material mined during pre-stripping will be stockpiled in the stockpile area and will make up part of the Year 1 plant production. The total stockpiled for later re-handling during Year 1 will amount to 139 kt, plus 32 kt of low-grade material. The pre-stripping period will be approximately three months.

Three separate mining rates will be used during commercial production. An initial three-year period will mine at a rate of 14.5 Mt/y. This will be followed by a two-year period that will mine at a rate of 18.54 Mt/y, which will meet the initial plant throughput capacity of 5.4 Mt/y. To meet the second plant throughput capacity rate of 9.0 Mt/y a total mining rate of 23.5 Mt/y is required for the remainder of the mine life.

The mine plan optimization indicated a variable cut-off grade strategy should be followed for the LOM. As the process recovery for the crush leach is variable by material type of, a cut-off using recovered copper (recovered copper equals total copper grade times heap leach recovery) was considered for this process and for the material sent to the low-grade stockpile. The ROM leach cut-off was set as 0.107% Cu, except for those periods where there will be an excess of material to meet the 40,000 t of copper cathode production. Table 16-4 shows the variable cut-off profile applied to the mine plan.

NCL used an in-house software to transfer the results of the Minemax Scheduler in terms of throughput constraints, and total mined annual profile by mining phases and variable cut-off profile. The required annual mineralization tonnes and user-specified annual total material movements were input to the system, which then calculates the mine schedule. It also provides the pit period geometry to ensure mining connectivity for all required destinations.

Mine plan, plant feed and copper cathode production schedules are shown in

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Table 16-5 through Table 16-7 .

Table 16-4: Variable Cut-off Profile Forecast

Crush Mineral Crushed Mineral Heap Heap Leach Low Grade ROM Leach Year Leach (to Stockpile) %Curec %Curec %Cut -1 0.437 0.437-0.422 0.107 1 0.299 0.299-0.299 0.107 2 0.406 0.406-0.398 0.404 3 0.323 0.323-0.323 0.107 4 0.386 0.386-0.384 0.107 5 0.283 0.283-0.247 0.384 6 0.226 0.226-0.226 0.107 7 0.126 0.126-0.126 0.107 8 0.174 0.174-0.174 0.107 9 0.153 0.153-0.153 0.107 10 0.127 0.127-0.127 0.107 11 0.178 0.178-0.178 0.107 12 0.115 0.115-0.115 0.107

Note: (*) %Curec: heap leach recovered copper (%Cu*recovery)

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Table 16-5: Mine Production Schedule Forecast

Heap Leach ROM Leach Total Total Material Mine to Stockpile Year Production Production Waste Mined kt %Cut kt %Cut kt %Cut kt kt -1 139 0.66 32 0.54 1,657 0.27 2,148 3,977 1 3,909 0.57 - - 3,694 0.26 6,759 14,361 2 5,403 0.84 132 0.51 2,434 0.41 6,531 14,500 3 5,401 0.83 - - 3,678 0.25 5,421 14,500 4 5,404 0.84 23 0.52 4,666 0.29 8,446 18,540 5 5,412 0.74 800 0.36 508 0.33 11,820 18,540 6 9,006 0.59 - - 6,036 0.22 8,458 23,500 7 9,018 0.49 - - 2,493 0.18 11,988 23,500 8 9,035 0.51 - - 4,562 0.20 9,904 23,500 9 9,034 0.47 - - 3,032 0.16 11,434 23,500 10 9,002 0.50 - - 2,264 0.16 12,234 23,500 11 9,056 0.47 - - 5,342 0.20 9,103 23,500 12 7,779 0.43 - - 1,924 0.19 5,216 14,919 Total 87,598 0.58 988 0.39 42,289 0.23 109,462 240,337

Table 16-6: Plant Feed Forecast

Crushed Mineral Mine to Stockpile to ROM Leach Heap Leach Stockpile Heap Leach Year kt %CuT Recovery Copper kt %CuT kt %CuT kt %CuT Recovery Copper % Cathodes % Cathodes kt kt -1 171 0.64 1,657 0.27 40.0% 1.8 1 4,048 0.58 79.6% 18.6 139 0.66 3,693 0.26 40.0% 3.9 2 5,400 0.84 79.8% 36.1 135 0.52 2,434 0.40 40.0% 3.9 3 5,400 0.83 80.5% 36.1 1 0.83 3,678 0.25 40.0% 3.7 4 5,400 0.84 79.6% 36.2 28 0.56 4,666 0.29 40.0% 5.4 5 5,400 0.74 77.0% 30.8 812 0.36 508 0.33 40.0% 0.7 6 9,000 0.59 74.3% 39.3 6 0.59 6,036 0.22 40.0% 5.3 7 9,000 0.49 77.0% 34.2 18 0.49 2,493 0.18 40.0% 1.8 8 9,000 0.51 76.8% 35.4 35 0.51 4,562 0.20 40.0% 3.6 9 9,000 0.47 78.3% 33.0 34 0.47 3,032 0.16 40.0% 2.0 10 9,000 0.50 70.7% 31.8 2 0.50 2,264 0.16 40.0% 1.4 11 9,000 0.47 74.7% 31.8 56 0.47 5,342 0.20 40.0% 4.2 12 8,939 0.43 67.6% 25.8 1,159 0.41 1,924 0.19 40.0% 1.5 Total 88,586 0.58 76.3% 389.2 1,298 0.43 1,298 0.43 42,289 0.23 40.0% 39.2

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Table 16-7: Copper Cathodes Production Forecast

Total Copper Cathodes (kt) Year Heap Leach Dump Leach (*) TOTAL

-1 1 18.6 1.8 20.4 2 36.1 3.9 40.0 3 36.1 3.9 40.0 4 36.2 3.7 39.9 5 30.8 5.4 36.3 6 39.3 0.7 40.0 7 34.2 5.3 39.5 8 35.4 1.8 37.2 9 33.0 3.6 36.5 10 31.8 2.0 33.8 11 31.8 1.4 33.3 12 25.8 5.7 31.5 Total 389.2 39.2 428.5

(*) Copper production from Dump Leach is reported one year after the material is placed in the ROM pad, except for Y12

16.9 Waste Rock Storage Facilities

Two waste storage facilities area (WRSFs), will be located to the west (WSFN) and south (WSFS) of the pit. The final configuration is shown in Figure 16-4. The facilities were designed in 40 m lifts. Each lift will be constructed at an approximate angle of repose of 37°. A constant 2.0 t/m 3 loose density was assumed in the design.

The designed capacities for the waste storage facilities are 62.6 Mt for the WSFS and 86.5 Mt for the WSFN. The mine schedule considers the utilisation of 84% of WSFS and 66% of WSFN.

16.10 ROM Leach and Stockpile

A ROM pad area was designed in a flat valley, located in between the WRSFs, where the ROM leach process will take place. The leaching of this low-grade material is planned is 10 m lifts. The design of the facility was developed in three 10 m lifts at an approximate angle of repose of 37° and a set-back of 27 m, resulting in an overall slope angle of no higher than 22° and a maximum slope height of 100 m. A constant 2.0 t/m 3 loose density was assumed in the design. The mine plan assumes that 42.3 Mt are placed in the facility.

The LOM plan stockpiles low-grade material for later re-handling at the end of the LOM to the primary crusher for crush leaching. The low-grade stockpile was designed at the toe of the WSFS at an approximate angle of repose of 37° and a total height of 50 m. The total material placed in this facility will amounts to 1.3 Mt.

The ROM pad and low-grade stockpile locations are also shown in Figure 16-4.

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Figure 16-4: Final Pit and Material Storage Facilities

Note: Figure prepared by Marimaca Copper, 2020.

16.11 Drilling and Blasting

The drilling equipment will consist of diesel units capable of drilling 7 ⅞” diameter holes in all material types. Support units capable of drilling 6½” diameter holes for pre-splitting will also be used. One production unit will be required for pre-stripping and during the first five-year plant throughput period. Later when the mining rate is increased to 23.5 Mt/year the drilling requirement will be two units. The support unit requirement is one during the LOM.

A general design for drilling and blasting patterns was carried out, using benchmark data from similar operations in Chile. According to the drill pattern specified, a blasting powder factor of 131 g/t for waste material and 193 g/t for mineralised material were estimated. Both estimated values are common for fresh rock material.

16.12 Mining Equipment

Mine equipment requirements were calculated based on the annual mine production schedule, the mine work schedule and equipment annual production capacity estimates. This represents the equipment necessary to perform the following duties:

 The pre-production development required to expose material for initial production

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 Mine and transport material to the primary crusher, low-grade stockpile and ROM pad.  Mine and transport waste from the pit to the WRSFs  Maintain all the mine work areas, in-pit haul roads and external haul roads; and maintain the WRSFs  Re-handle the material (load, transport, and auxiliary equipment) from the stockpile to feed the primary crusher.

An average dry bank density of 2.65 t/m 3 was used for mineralised material and 2.67 t/m 3 for waste. The density values are based on the resource block model values for the various materials tabulated from the mine production schedule. The material handling swell was estimated at 30%. NCL assumed a moisture content of 2%, which represents the weight percent of the wet weight of the material. The density of wet and loose material was used to calculate truck allowable payload limits.

A job efficiency factor (operational losses) of 83%, to allow for operational losses, was used to estimate all major units of equipment and productivities; this corresponds to 50 minutes per operating hour.

Trade-off analyses were carried out for several major equipment configurations, for trucks capacities varying from 100–190 t and the corresponding loading equipment for the best match with the trucks. These analyses included input from reputable heavy equipment providers for recommendations on the equipment configurations and productivity estimates.

This Report assumes that the mining operation will use 22 m 3 hydraulic excavators, 23 m3 front-end-loaders and trucks with a capacity of 150 t. This type of equipment is able to achieve the required productivity for an annual total material movement of 23.5 Mt, and will provide sufficient mining selectivity with the excavators as required for good grade control and mining flexibility with the front-end-loaders. The fleet will be complemented with drill rigs for material delineation. Auxiliary equipment will include track dozers, wheel dozers, motor graders and water trucks. The mine fleet will also include the necessary equipment to re-handle the material from the stockpiles to the primary crusher. This operation will be carried out using a front-end loader and the same 150 t trucks used in the open pit.

The peak equipment requirements for the pre-production and mine life are included as Table 16-8. Fleet requirements by year are included in Table 16-9.

One hydraulic excavator and one front-end-loader are required from pre-stripping throughout the LOM.

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Table 16-8: Peak Fleet Requirements for Pre-Production and Commercial Production

Peak Peak Equipment Type Pre-Production Requirement Front-end-loader 23 m3 1 1 Hydraulic excavator 22 m3 1 1 Haul truck 150 t 7 14 Diesel drill (7 ⅞") 1 2 Support drill (6 ½") 1 1 Bulldozer 2 2 Wheel dozer 2 2 Motor grader 2 2 Water truck 2 2 Backhoe 1 1 Lube truck 1 1 Support truck 1 1 Mobile crane 1 1 Lowboy truck 1 1 Tire handler 1 1 Lighting plant 4 5

Table 16-9: Fleet Requirements by Year

Equipment Type -1 1 2 3 4 5 6 7 8 9 10 11 12

Front-end-loader 23 m 3 1 1 1 1 1 1 1 1 1 1 1 1 1 Hydraulic excavator 22 m 3 1 1 1 1 1 1 1 1 1 1 1 1 1 Haul truck 150 t 7 7 8 8 10 10 14 14 14 13 14 13 10 Diesel drill (7 ⅞") 1 1 1 1 1 1 2 2 2 2 2 2 1 Support drill (6 ½") 1 1 1 1 1 1 1 1 1 1 1 1 1 Bulldozer 2 2 2 2 2 2 2 2 2 2 2 2 2 Wheel dozer 2 2 2 2 2 2 2 2 2 2 2 2 2 Motor grader 2 2 2 2 2 2 2 2 2 2 2 2 2 Water truck 2 2 2 2 2 2 2 2 2 2 2 2 2 Backhoe 1 1 1 1 1 1 1 1 1 1 1 1 1 Lube truck 1 1 1 1 1 1 1 1 1 1 1 1 1 Support truck 1 1 1 1 1 1 1 1 1 1 1 1 1 Mobile crane 1 1 1 1 1 1 1 1 1 1 1 1 1 Lowboy truck 1 1 1 1 1 1 1 1 1 1 1 1 1 Tire handler 1 1 1 1 1 1 1 1 1 1 1 1 1 Lighting plant 4 4 4 4 4 4 5 5 5 5 5 5 4

The number of truck units required was obtained by dividing the annual capacity of transport of a truck for each combination and period by the corresponding tonnage according to the defined assignment per loading unit. Truck operating hours were calculated per period, type of material and loading unit dividing the tonnage that has to be transported by the hourly productivity of each combination.

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The total haulage weighted average distance varies from a minimum of 3.9 km to a maximum of 5.2 km. Truck speeds were determined using typical values obtained from supplier information and similar operations. The truck cycle assignments include fixed times for loading, dumping and queuing. Two minutes were added to every cycle for dumping and queuing.

Operational indices considered for the trucks were:

 Availability (MA): Variable profile according to vendor and fleet life  Use of availability (UA): 77.5%  Operational losses: 83% (accounting for operator factor, inspection and training).

The number of trucks required during pre-production is seven. The requirement gradually increases from seven units in Year 1 to a maximum of 14 units in Years 6 to 10, then decreases to the end of the LOM as less material is mined.

The primary duties that will be assigned to the auxiliary equipment are as follows:

 Mine development including access roads, drop cuts, temporary service ramps and safety berms  Waste rock storage area control: this includes maintaining access to the dumping areas and maintaining the travel surfaces  Stockpile storage area control: this includes maintaining access to the stockpile areas and maintaining the travel surfaces  Maintenance and clean-up in the mine and WRF areas  Drilling for pre-splitting.

Equipment types included in the auxiliary mine fleet are:

 Trackdozer (636 HP)  Wheel dozer (530 HP)  Motor grader (280 HP)  Komatsu water truck (75 m3)  Support drill (6½").

In general, two track-dozers, two wheel-dozers, two motor-graders and two water trucks will be required.

16.13 Mine Rotation Schedule

The mine is scheduled to work seven days per week, 365 days per year. Each day will consist of two 12-hour shifts. Four mining crews will rotate to cover the operation (two working and two on time off).

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17 Recovery Methods

17.1 Process Description

The Marimaca Project will operate a conventional salt acid leaching process consisting of a comminution circuit, crushed mineralized material heap leach (HL) and ROM leach facilities, and SX and EW plants to produce Grade-A copper cathodes. All leaching will be performed using seawater-based process solutions, with sulphuric acid and salt addition to both acid- leach the copper oxide mineralization and chloride-leach the sulphide copper mineralization sent to leaching. Figure 17-1 is a simplified block diagram showing the planned process route.

The SX plant has been designed to operate with high levels of chloride present in the pregnant leach solution (PLS) and includes two organic washing stages that will allow for a low and manageable transfer of chloride to EW through entrainment.

The mine plan contains two mining phases. phase 1 will run from Year 1 to Year 5 and will primarily provide oxide mineralization to the crushing plant for subsequent leaching, at a processing capacity of 5.4 Mt/y. This initial period is expected to see minimal mining of sulphide copper mineralization.

The second phase of the mine phase will run from Year 6 to Year 12 and assumes per mine plan that 9 Mt/y of mineralization will be sent to the crushing plant. The material will still be dominated by oxide copper minerals, but there will be a higher proportion of sulphide copper mineralization, including mixed oxide-sulphide type material. To manage the increased tonnage of the phase 2 mine plan, an expansion is planned for the crushing and leaching facilities; other plant facilities such as SX/EW are sized for phase 2 capacity from the start and do not require any expansion.

The addition of salt is only necessary for the second phase of the mine plan; chloride build- up in the leaching solutions is considered sufficient to enhance recovery from the minor copper sulphide fractions present during the first phase of the mine plan.

Facilities for copper cathode production will have a nominal capacity of 40,000 t/y Cu. Full cathode production will be achieved during the first phase of the mine plan from treating high- grade mineralized material. The second phase of the mine plan will treat lower grade mineralization, and thus requires the planned capacity expansion to meet the target cathode production capacity from the EW circuit.

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Figure 17-1: General Block Diagram

Mineral Primary Grizzly Input Crushing

Secondary Screen ROM Input Secondary Tertiary Crushing Crushing

ROM Raffinate Leaching Tertiary Screen Raffinate

Final product P90 = 1/ 2 Cathode Stock Pile Agglomeration Heap Leach SX-EW Production

Ripios

Note: Figure prepared by Ausenco, 2020.

17.2 Production Plan

The project LOM is 12 years. The majority of the mineralization is sent to the process plant for crushing and subsequent stacking for leaching, and totals 88,586 kt of copper-bearing mineralization over the LOM.

Phase 1 of the mine plan includes a lower capacity first year due to ramp-up considerations, and average 5,130 kt/y of feed delivered for crushing during a five-year period, at an average copper grade of 0.78%. phase 2 will average a feed of 8,991 kt/y and includes a final year of slightly lower feed, at an average copper grade of 0.49%. Recoveries will be about 79% for the first phase of the mine plan, reducing to approximately 74% on average during the second phase.

The crushing and leaching plant is designed to process a nominal of 5,400 kt/y for phase one of the mine plan, equivalent to a daily balance tonnage of 14,795 t/d (with 365 d/y), consistent with the mine plan for Year 2 to Year 5. For phase two, nominal capacity will be 9,000 kt/y, equivalent to a daily balance tonnage of 24,658 t/d.

Total copper cathode production is estimated to be approximately 430 kt of cathodes during the LOM, which includes both copper metals recovered from the crush heap leaching and the ROM leaching.

For the first five years, plant feed will consist mainly of oxide mineralization to the plant and will not generally require salt as part of the process. Any sulphides included in the plant feed are expected to benefit from the presence of chloride in solution, as a result of using seawater.

From Year 6 onwards, higher fractions of sulphide type mineralization will be fed to the leach process, and combined with higher proportion of WAD type material, will make it beneficial to use salt addition as part of the agglomeration process. Chloride levels are expected to be high even without salt addition given the use of seawater and the natural chloride build-up that is achieved by Year 6 of the LOM.

As per the process design criteria, during this period occasional salt addition will be used for certain mineralization types during the agglomeration stage to increase chloride ions in solution and thus enhance recovery. The heap leach process defines a different leach cycle for these material types, with slightly longer irrigation cycles.

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17.3 Dry Area and Material Handling

17.3.1 Crushing Plant and Stockpile Reclaim

The comminution circuit will consist of a three-stage crushing plant. A single primary crusher (Sandvik CS660, or equivalent) will be used, which is sized to be amenable for crushing the mineralization at the required throughput for phase 2 of the production plan. No upgrade of primary crusher is required at the end of phase 1.

Secondary crushing duty will be performed by cone crushers (Sandvik CH870i, or equivalent) in a secondary crushing plant sized for phase 1 of the production plan. An expansion of this crushing stage will be required, with addition of a cone crusher and auxiliaries, to treat the higher throughput of phase 2.

Two cone crushers of the same type used for secondary crushing duty will be used for tertiary crushing, and an additional third cone crusher will be required for phase 2 tonnages. The circuit is designed to process the corresponding throughput for each phase of the mine plan and will generate a crushing product of P90 < 12.7 mm (1/2 inch).

A rock breaker will be available for dealing with oversized mineralization that requires mechanical breakage to enter the crusher gape. A dust suppression system based on process water will be included to mitigate dust emissions.

Sizing was performed with vendor support and crushing plant simulators, based on the projected “average” hardness of mineralization throughout the Figure 17-2 LOM. and Figure 17-3 summarize the crushing plant flowsheets of the first and second phase of the mine plan, respectively. A utilization rate of 75% was assumed for the crushing plant.

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Figure 17-2: Crushing Plant Flowsheet for Phase 1

Note: Figure prepared by Marimaca, 2020.

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Figure 17-3: Crushing Plant Flowsheet for Phase 2

Note: Figure prepared by Marimaca, 2020.

A dome-enclosed stockpile for tertiary crusher final product is included in the design and will allow for approximately six hours of continuous feed to the crushed mineralized material leaching facilities at nominal throughput, based on phase 2 tonnage. For phase 1, the stockpile will have capacity for approximately 10 hours of continuous feed to the heap leaching facility. Approximately 9,000 t of live capacity will be available in the stockpile, corresponding to 36,000 t of total capacity including dead volume. The dome structure and the dust suppression system will contribute to the overall control of all dust emissions from the stockpile area.

Feeders beneath the stockpile will reclaim the crushed material and supply feed to the agglomeration area. Reclaim and material handling downstream from the stockpile assumes 70% utilization to allow for the material handling downtime caused by the necessary relocation

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of the multiple portable conveyors (“grasshoppers”) used to stack the crushed material onto the heap leach pad.

17.3.2 Agglomeration

The crushed material will be reclaimed from the stockpile and fed by belt to an agglomeration system, where raffinate, sulphuric acid and occasionally salt (depending on mineralized material type) will be added. The acid dosage will depend of the type of mineralization processed; only sulphide type materials will receive salt addition during phase 2. Approximately, the overall net acid consumption will be 40 kg/t during the LOM for all crushed and leached material.

The use of salt addition and salt water will contribute to chloride ion presence in the leaching solutions; additional chloride will be provided by specific mineralization types that leach chloride, which then builds up chloride level in the leaching solutions until an equilibrium state is achieved. Simulated scenarios by process consultants retained by Marimaca Copper indicate that the build-up of chloride can reach approximate levels of 60 g/l during the first phase of processing, without any salt addition. The presence of chloride ions enhances the copper leaching for sulphide copper species, and hence improves overall copper recoveries.

The agglomeration will be carried out in two agglomeration drums during phase 1. A third drum will be added for phase 2 to deal with the increased capacity. The agglomeration drums are designed for a nominal capacity of 914 t/h each, and are of size D 3.66 m x L 11 m.

A gas extraction and gas scrubber system will installed be for all agglomeration drums, for proper management of gaseous emissions that occur due to reactions caused by close contact between salt, mineralization, acid and raffinate in the agglomeration drums.

17.3.3 Heap Stacking

The agglomerated mineralization will be discharged onto an overland transfer conveyor that feeds the main overland conveyor. From this conveyor, mineralization will be sent to the corresponding heap leach cell to be loaded. A belt tripper will transfer the mineralization to standard grasshopper conveyors that will be laid out to enable a radial telescoping stacker to stack mineralization on the leach pad.

The operating philosophy indicates that when sulphide material types are stacked, during the phase 2, these will be subject to a slightly different leaching cycle of longer duration, to maximize copper recovery.

Ripios will be reclaimed by trucks and mechanical reclaiming and thus flexibility is available for removal of oxide cells prior to completion of their full leaching cells, if required for purposes of adapting the leaching area for the arrival of sulphide materials.

17.3.4 Spent Material Reclaim

Ripios will be reclaimed by mechanical means and transported by truck to a ripios disposal facility adjacent the crush heap leaching area.

17.4 Wet Area and Solution Management

17.4.1 Heap Leaching Circuit and Irrigation System

The irrigation solutions, intermediate leach solution (ILS) and raffinate from the SX, will be pumped from their respective ponds and irrigated onto stacked cells by use of sprinklers that maximize a homogenous wetting of the surface.

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A two-stage leaching cycle is considered, which will allow for integration with ROM leaching solutions.

Fresh mineralization will first be irrigated with ILS during the days defined by the process design criteria, as summarized in Section 17.10 for this stage of the cycle. ILS solution will contain an intermediate copper tenor relative to the PLS and will be acidified with sulphuric acid prior to irrigation, to provide sufficient acid in solution to both neutralize gangue acid consumption and sustain copper leaching. The effluent solution from the cells irrigated with ILS will be recovered in the PLS pond and sent to the SX for copper extraction.

Mineralization that has completed its irrigation cycle with ILS will subsequently be irrigated with raffinate solution derived from the SX plant. Effluent recovered from the cells irrigated with raffinate will be recovered in the ILS pond, where ROM effluent solution will also be recovered. The ILS solution containing copper extracted from ROM leaching and the second stage of crush heap leaching will be pumped from the ILS pond to serve as the irrigation solution for the first stage of the crush heap leaching.

Figure 17-4: ROM and Heap Leaching Diagram

Crushed Mineral from Crushing ROM from mine

Heap Leach Agglomerator Heap Leach Ripios ILS Irrigation Raff Irrigation ROM

ILS Pond ILS ROM Pond PLS Pond

SX - EW Raff ROM Pond

Raffinate Pond Cathode

Note: Figure prepared by Ausenco, 2020.

The crush heap leaching area was sized considered the leaching requirements as per the process design criteria, and has flexibility to enable leaching of sulphide mineralization, considering its longer overall cycle duration, relative to oxide material cycles. The heap leaching area will be increased as part of the plant expansion in phase 2, to support the higher tonnage being mined in the second phase of the mine plan.

Irrigation of ILS and raffinate assumes a specific irrigation rate of 12 L/hr/m 2 for both phases. Testwork has shown that the design criteria for product P80 of the crushing plant allows for good solution percolation for the heap heights considered.

17.4.2 Solution Management and Operating Ponds

A total of three main operational ponds are included in the crush leach area. Ponds are of a traditional design with double HDPE liner and leak inspection systems.

PLS Pond

The PLS pond will be used for recovery of copper pregnant solutions leaving the crush heap leach process. The operating capacity of this pond will be approximately 19,000 m 3, which will allow for an approximate residence time of 14 hrs for phase 1 solution flow and nine hours for

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phase 2 solution flow. The copper-rich solution will be sent to SX for copper transfer from this pond.

ILS Pond

One ILS pond will be used for recovery of the effluent coming from the ROM leaching and the cells irrigated with raffinate solution. The operating capacity of the pond will be approximately 10,000 m 3, which will allow for an approximate residence time of eight hours for phase 1 solution flows and five hours for phase 2 solution flows. This pond will contain an intermediate copper tenor solution, relative to the PLS derived from the crush leaching. ILS solution will be pumped from this pond to provide ILS for irrigation of stacked mineralization.

Raffinate Pond

One raffinate pond will be used for recovery and containment of raffinate solution provided by the SX facility. The operating capacity of this pond will be approximately 19,000 m 3, which will allow for an approximate residence time of 14 hrs for phase 1 solution flows and nine hours for phase 2 solution flows. Raffinate solution will contains the lowest copper tenor and will be used for leaching ROM mineralization and stacked mineralization in cells under the second cycle of the leaching cycle.

17.4.3 Event Ponds

An event pond is included for the management of contingencies and will have an approximate volume of 19,000 m 3.

An additional event pond has been included in the design for management of events from the ripios facility area.

17.5 Solvent Extraction

PLS will be processed in the SX facility, by successive contact stages between aqueous phase PLS and organic phase reagent. Extraction of copper will occur in each extraction stage, allowing selective transfer of copper from the PLS to the SX organic phase stream. The copper-rich organic phase will be subjected to two washing stages with acidified RO water to minimize entrained iron and chloride transfer to the EW, where chloride concentration must be kept below a specified threshold.

A Ketoxime, Aldoxime or a mix, such as LIX984N with modifier based extractant is considered, with use of commercial isoparaffinic high flash point diluent, such as Shellsol D90, as per industry standard usage for copper SX.

Organic washing water will be derived from a RO plant, and is expected to be used in a counter-current washing configuration.

For phase 1, a SX configuration of “Extraction – Washing/Scrubbing – Stripping” is proposed (Figure 17-5). For phase two of the mine plan, the additional PLS will be treated in the same SX plant, and thus a modified configuration from the same plant is required to support the increased flow.

For both phases of the mine plan, the amount of PLS treated by each extraction stage is preserved.

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Figure 17-5: SX Schematic Configuration Phase 1 & 2

Note: Figure prepared by Marimaca, 2020.

17.6 Electrowinning

The EW plant will be where electrowinning of copper takes place. Two current rectifiers will provide the continuous current required for electrowinning, while copper-rich electrolyte will be pumped through the electro-hydraulic circuits that contain the EW cells, while reagents will be added to provide preferred copper winning conditions. A small electrolyte purge stream will be extracted from the EW electrolyte circuit and sent to SX extraction stages and/or raffinate pond, to control build-up of ion contaminants within the electrolyte solution circuit. Purged electrolyte will also be used to acidify the organic washing water.

Individual cathodes will be allowed to grow until ready for harvest (Figure 17-6); once ready, they will be sent to the stripping machine by use of an overhead crane. In this last stage of the process, pure copper cathodes will be separated from the steel plates in the semi- automatic stripping machine.

Figure 17-6: EW Diagram

Note: Figure prepared by Marimaca, 2020.

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Standard acid mist mitigation measures will be implemented through use of FC-1100 addition and a HVAC system. Natural ventilation and use of an open building are to be preferred, to contribute to a low acid mist build-up. Use of 19 mm polypropylene spheres can also be considered for acid mist control, in case natural ventilation is not available, or is insufficient.

The EW plant is designed to produce 40,000 t/y of cathode, using 106 cells with 61 anodes and 60 permanent cathodes. The stripping machine will be semi-automatic and will operate in 12 h shifts.

17.7 ROM

17.7.1 ROM Mine Plan

A total of 42,289 kt of ROM mineralization is included in the 2020 PEA LOM. The copper grade will be approximately 0.3% for ROM material processed during the first five years, whereas during the following years of the LOM, the grade will average 0.2% Cu.

17.7.2 ROM Leaching

ROM leaching will be carried out in parallel to crushed mineralized material heap leaching, to exploit low-grade mineralization and to contribute additional copper. ROM leaching will involve stacking 10-m height lifts in a permanent ROM leach pad; up to 10 lifts of mineralization have been considered in the design.

A particle size of P100<24” is assumed per design criteria. No acid or salt addition will be applied during stacking, but solution management and solution acidification assumes that the net acid consumption will be approximately 10 kg/t of acid, for the ROM mineralization.

A specific irrigation rate of 5 L/h/m 2 of raffinate is defined per criteria for ROM irrigation and use of dripper emitters. ROM effluent will be recovered in the ROM ILS pond from where it will transfer to the main crush heap leach ILS pond. A ROM raffinate pond is included in the design, for receiving raffinate from the crush heap leach raffinate pond and allowing the pumping of ROM irrigation solution.

ROM leaching pads will be constructed using sustaining capital during the initial years of the operation, as described in Section 18.

17.7.3 ROM Operating Pond

ROM ILS Pond

A ROM ILS pond is included in the design which will have an approximate capacity of 3,000 m3. This pond will receive the copper-enriched solution t from ROM leaching.

ROM Raffinate Pond

One ROM raffinate pond is included and will have an approximate capacity of 3,000 m 3. This pond will receive raffinate solution from the heap leach raffinate pond and will supply the ROM irrigation solution.

17.8 Water and Power Requirements for Processing

Overall water consumption for heap leaching is estimated to be 0.24 m 3/t mineral sent to crush heap leaching, and 0.13 m 3/t for ROM material. Based on the projected tonnages for each mine plan phase, the following overall water requirements are estimated for covering leach processing of the plant feed.

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 Phase 1: Overall 1.6 million m 3 of water per annum, equivalent to average balance of 53 L/s of raw seawater  Phase 2: Overall 2.6 million m 3 of water per annum, equivalent to average balance of 84 L/s of raw seawater

Part of the water is directly sent to leaching ponds to replenish process losses. A minor fraction is sent to project RO plant that provides desalinated water to cover SX/EW requirements. All water that is sent to SX/EW, as well as RO plant reject discharge, converges ultimately to process ponds and forms part of the overall water balance.

The project has defined a substation capacity of 30 MVA to provide power for all process equipment. This is estimated to be sufficient to cover the peak and average power demands of the project. From preliminary calculations, based on benchmarked power consumption for similar leach, SX-EW plants in Chile and the Bruno power calculations for the specified crushing circuit design, the LOM peak power requirement is estimated at 155 GWh/y, which is required in production year 6. Year 6 is the year when phase 2 of the mine plan starts, and thus an increased power requirement based on the increased tonnage.

17.9 Consumables

The leaching process defines the following main process materials to sustain the copper cathode production:

 Sulphuric acid: used for acid curing the mineral in agglomeration drums and replenishing lost acidity of solution streams due to acid consumption.  Raw seawater: used to replenish lost solution due to evaporation and water losses in ripios sent to disposal.  Salt (NaCl): used to increase chloride levels when processing sulphide minerals and thus enhancing recovery.  Diesel: used to provide adequately heated solutions sent to EW.  Miscellaneous reagents of SX and EW: SX reagents such as SX extractant (LIX984N) and solvent (Shellsol D90), as well as EW reagents such as FC-1100, cobalt sulphate and Guartec are required, as per standard usage for this application.  Consumables, such as, irrigation drippers, crusher mantles, EW anodes and cathodes, and garnet & sand for electrolyte filters are required to support continuous cathode production, as per standard usage of these technologies.

17.10 Design Criteria

The design criteria are summarized in Table 17-1.

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Table 17-1: 2020 PEA Design Criteria

Item 1 – 5 Year 6 – 12 Year Units

General

Feed Material Flow for 5.4 9.0 Mtpy Design

Copper Grade 0.78 0.49 %

Copper Grade ROM 0.29 0.20 %

Copper Recovery in Crush

Leach

BROC/ATA 82 82 %

CRIS 77 77 %

WAD 65 65 %

MIX 62 62 %

ENR 49 49 %

Feed Material Flow ROM for 4,7 6,0 Mtpy Design

Copper Recovery ROM 40 %

Project LOM 12 Year

SX/EW Nominal Capacity 40,000 tpy

Crushing Plant

Run Time 75 %

Circuit Design Closed with tertiary screen -

Crushing feed size P100 24 24 inch

Crushing Product Size P90 1/2 1/2 inch

Fine content in final product 10 – 12 10 – 12 % -100# Ty

Primary Crusher Type Cone Crusher Cone Crusher

Primary Crusher Quantity 1 1 #

Secondary Screens Quantity 1 2 #

Secondary Crusher Type Cone Crusher Cone Crusher -

Secondary Crusher Quantity 1 2 #

Tertiary Screens Quantity 2 3 #

Tertiary Crusher Type Cone Crusher Cone Crusher -

Tertiary Crusher Quantity 2 3 #

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Item 1 – 5 Year 6 – 12 Year Units

Stockpile

Run Time (reclaim and 70 % downstream)

Capacity 36,164 ton

Residence Time 10 6 hr

Agglomeration

Run Time 70 %

Capacity 5.5 9.0 Mtpy

Quantity 2 3 #

Heap Leaching

Run Time 99 %

Oxide Material Cycle

ILS Irrigation 52 52 Days

Raffinate Irrigation 40 40 Days

Total Leach Cycle (includes 137 128 Days loading, resting, drainage)

Sulphide Material Cycle

ILS Irrigation Not Applicable 55 Days

Raffinate Irrigation Not Applicable 55 Days

Total Leach Cycle (includes Not Applicable 176 Days loading, resting, drainage)

Combined Material Cycle (14% of phase 2 plant feed is considered sulphide type which merits salt addition)

ILS Irrigation 52 52 Days

Raffinate Irrigation 40 42 Days

Total Leach Cycle (includes 137 134 Days loading, resting, drainage)

Process Solutions

PLS

PLS Copper Concentration 3.50 2.40 g/l

PLS Acid Concentration 2.50 2.50 g/l

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Item 1 – 5 Year 6 – 12 Year Units

ILS

ILS Copper Concentration 1.55 0.99 g/l

ILS Acid Concentration 2.80 4.20 g/l

Raffinate

Raffinate Copper 0.34 0.26 g/l Concentration

Raffinate Acid Concentration 10 10 g/l

Leaching Cycle Details

Oxide Material Cycle

Loading 13 8 Days

Resting 3 3 Days

ILS Irrigation 52 52 Days

RF Irrigation 40 40 Days

Draining and unloading 19 17 Days

Safety & operational margin 10 8 Days

Total Operational Cycle 137 128 Days

Sulphide Material Cycle

Loading - 7 Days

Resting - 30 Days

ILS Irrigation - 55 Days

RF Irrigation - 55 Days

Draining and unloading - 21 Days

Free - 8 Days

Total Operational Cycle - 176 Days

ROM Leaching

Run Time 99 %

Total Leach Cycle 180 Days

ROM ILS Copper 1.40 0.99 gpl Concentration

ROM ILS Acid Concentration 0.55 1.05 gpl

Heap Leach Irrigation

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Item 1 – 5 Year 6 – 12 Year Units

Irrigation Rate HL 12 L/h/m 2

Leaching Ratio 1st Leaching 2.2 2.0 m3/ton Cycle (ILS)

Leaching Ratio 2nd Leaching 1.6 1.6 m3/ton Cycle (RF)

Height 4 4 m

ROM Leach Irrigation

Irrigation Rate ROM 5 L/h/m 2

ROM Leaching Ratio 1.20 1.20 m3/ton

Solvent Extraction and Electrowinning

Run Time 98.5 98.5 %

PLS to SX flowrate 1,350 2,025 m3/h

SX plant recovery 95.6 88.0 %

O/A advance ratio 1.1 1.1 -

Current Density 330 (360 for design) A/m 2

Total electrolyte purge flow 5.74 - m3/h

Cathode Stripping Machine 150 - Cat/h Capacity

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18 Project Infrastructure

Infrastructure considered for the Marimaca Project includes water supply, power supply, access roads, sulphuric acid supply and other facilities.

The Marimaca Project is located close to the coast and the ports of Mejillones and Antofagasta; therefore, providing infrastructure requirements will require less capital cost than many other new copper mines.

18.1 On-site Infrastructure

18.1.1 Existing Infrastructure

Other than access roads, no infrastructure currently exists at site.

18.1.2 Proposed Infrastructure

The layout plan for the proposed facilities is shown in Figure 18-1. An overview of the likely infrastructure to be required is based on current design assumptions and includes:

 Road network: The road network includes connections from the open pit to the WRSFs, main processing area, heap leaching facilities, ROM leaching facilities, maintenance complex, and administrative facilities.  Processing plants: Crushing plant, agglomeration plant, and SX-EX facilities, tank farm, as well as salt and acid storage system.  Conveyor systems: Overland conveyor from the agglomeration plant to the heap leach pad area, a transfer conveyor with tripper car, grasshoppers and radial stacking conveyors.  Crush heap leach facilities: On/off acid heap, irrigation system, drainage system for PLS and ILS solution and process ponds.  ROM leach facilities: Permanent acid heap, irrigation system and a drainage system.  Solutions ponds and pumping system: PLS, ILS and raffinate ponds, emergency ponds for the ripios and crush leach facilities and a seawater pond  Waste rock storage facilities: Two facilities, north and south  Administration Building: Offices for mine management and supervisory staff, human resources, accounting, procurement, information technology, and safety staff.  Maintenance workshop: Truck shop, warehouse, and laboratory  Electrical substation: For the main 110 kV line  Fuel storage: Tank farm with storage tanks.  Process control system  Communications system

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 Water Supply: potable and process Figure 18-1: Proposed Infrastructure Layout Plan.

Note: Figure prepared by Ausenco, 2020.

18.2 Process Facilities

18.2.1 Crush Heap Leach Facilities

The heap leach facility will consist of an on/off acid heap. The heap leach design assumes a total of 11 cells in phase 1 and a total of 16 cells in phase 2.

The crush heap leach pad will have a total of nine modules, divided in two phases. phase 1 will have 11 modules for a design of 834 t/h of mineralization, in phase 2 another 5 modules will be added to achieve a feed rate of 1,189 t/h.

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Figure 18-2: Crush Heap Leach and Ripios Storage Facilities.

Waterline

Seawater Pond

Future Expansion

Phase 2

Powerline

Ripios Storage Phase 1

Admin Facilities

SX Process Emergency EW Ponds Pond

Note: Figure prepared by Ausenco, 2020.

18.2.2 ROM Leach Facilities

The ROM leach facilities will be situated 2.5 km northwest of the crush leach facilities. The elevation of the ROM will range from to 700 m to 800 m. Figure 18-2 showed the plot plan considered for the ROM leach facilities.

18.2.3 Ripios Storage facility

The ripios facility will be located 500 m to the west of the heap leach pad (Figure 18-2). The elevation of the ripios storage facility will range from approximately 800 m.a.s.l to 860 m.a.s.l.

18.2.4 Waste Rock Storage Facility

Two waste rock storage facilities are planned, one will be located at the south west of the open pit and the other one will be located It will be situated to the north west of the open pit

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(Figure 18-1). The elevation of the waste storage facility will range from approximately 700 m.a.s.l to 750 m.a.s.l.

18.3 Power Supply

Power will be taken from the national grid. The most convenient connection would be with the existing 110 kV line which follows the B-240 road and is about 7km north of the proposed plant site. For the purposes of the 2020 PEA it was assumed that a tap-off from that line will be authorized. A 7km, 110 kV line will be built from the tap-off point to the main substation, which will be placed close to the SX/EW plant. The substation will be 30 MVA capacity, 110/23kVA in order to supply the project peak process annual demand of 155 GWh/y.

Figure 18-4 shows the electrical network in the general project area and shows:

 The nearest sub-station correspond to Los Chango of Transmisión Eléctrica del Norte Chile, marked by a yellow circle.  The nearest electrical line of 220 kV is that of Cochrane-Encuentro of AES GENER. The line has capacity and an S/E selector can be installed. The location is shown by a red circle. Figure 18-3: Site Project Electrical Network

Note: Figure prepared by Ausenco, 2020.

18.4 Water Management Infrastructure

The water demand is assumed to be supplied by Aguas de Antofagasta S.A. (ADASA), a major Chilean water supplier, are a rate of 1,612,000 m 3/y year for phase 1. phase 2 will need

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2,558,000 m 3/y. The make up water is considered to be extracted by ADASA from an existing seawater pipeline, which also follows the B-240 road. ADASA will deliver the water into Marimaca’s seawater pond. A reverse osmosis (RO) plant will be required to produce the water quality needed in the SX/EW facilities, and a second RO plant will be installed for the administration building.

Figure 18-6 shows a schematic diagram of the water supply and distribution network.

Figure 18-4: Schematic Water Supply and Distribution Network

Note: Figure prepared by Ausenco, 2020.

18.5 Off-site Infrastructure

18.5.1 Existing Infrastructure

Roads

The Project will be accessible from route 1 which is a paved highway that joins Antofagasta and Mejillones; Route B-240 branches off towards the east near Mejillones. This is a non- paved road with a “bischofita” covering (Figure 18-5).

Figure 18-5: Non-Paved B-240 Road with Bischofita Covering

Note: Photography provided by Marimaca, 2020.

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About 10 km to the east of the junction, there is an existing gravel road which leads to the proposed Marimaca plant site, located 7 km to the south (Figure 18-6). This road will be improved, including application of a “bischofita” covering.

Figure 18-6: Gravel Road which leads to the Marimaca Plant Site

Note: Photography provided by Marimaca, 2020.

A similar standard will be used for the internal roads which will connect the different mine and plant installations. The haulage road to be used by mine trucks to carry the mineralization from the mine to the primary crusher is included, as part of the mine design.

18.5.2 Other Infrastructure in the zone

The international airport of Cerro Moreno is situated about 70 km southwest from the Project site.

The Port of Mejillones Port is about 25 km northwest of the project site.

18.5.3 Proposed Infrastructure

Off-site infrastructure that will need either upgrading or installation includes.

 Access road from route B-240  Electrical supply: electrical tap-off facilities, powerline, substation  Seawater: tie-in, expected to be provided by ADASA.

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19 Market Studies and Contracts

No formal marketing study has been completed and as of the effective date no formal contracts have been entered for either sale of the copper cathode product or supply of the sulphuric acid for the Marimaca project.

19.1 Metal Prices

Marimaca Copper provided the forecast long-term copper price used for the 2020 PEA of $3.15/lb. This is within the range of coper pricing currently being used within the industry.

Copper cathodes is a common commodity that is traded in transparent and liquid markets. The value of the product is high in relation to their mass and volume and freight costs are not therefore a fundamental driver of expenditure.

Accordingly, for the purpose of the PEA, it is appropriate to assume that the product can be sold and at standard market rates. No specific marketing study was conducted for the study.

19.2 Sulphuric Acid Price in Chile and Peru

Information regarding sulphuric acid pricing is summarized from Kalkos, (2020).

The CFR Mejillones acid prices to be used for the 2020 PEA should be at the following levels:

1. 2022–2024: $108/t basis, to which should be added $2.00/t for FCA Mejillones and an additional $1.75 for the FCA Marimaca price. 2. 2025–2027: $74/t basis, to which should be added $2.00/t for FCA Mejillones and an additional $1.75 for the FCA Marimaca price. 3. 2028 and onwards: $40/t basis, to which should be added $2.00/t for FCA Mejillones and an additional $ 175/t for FCA Marimaca price.

In each case a $2/t surcharge was added to the base case FCA Mejillones pricing, and a further $1.75/t was added to cover the costs of inland freight to the Marimaca Project (25 km).

19.2.1 Sources of Sulphuric Acid Supply in the Vicinity of the Marimaca Project

Several supply sources are available in the region (Table 19-1), including from smelters, molybdenum plants, roasters, and sulphur-burning plants.

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Table 19-1: Main acid producers in Chile

Note: Data from Cochilco (2018).

Traders who operate in Chile directly and others who do so from their headquarters (e.g. Interacid, SAS, Glencore, Transud, Hexagon, Marubeni, Pan Pacific, Aurubis) can also facilitate sourcing of sulphuric acid supply. It is possible to make direct arrangement with such traders through annual importation agreements. Additionally, it has been detected that there are also two very active Peruvian players in the Chilean market, Southern Peru and Nexa, which between them import between 1– 1.3 Mt/y.

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20 Environmental Studies, Permitting and Social or Community Impact

20.1 Sustainability Philosophy

Marimaca Copper has developed an Environmental Policy and has defined an Environmental Management System which will be applicable to all Project stages and will define responsibilities in order to assure environmental protection in the Project area and mitigate risks. Marimaca Copper intends to monitor and audit all its activities and installations to ensure compliance with its Environmental and Sectorial Permits and will periodically report to authorities as required. In addition, the Project will be audited by Chilean authorities during the construction and operations stages. Marimaca Copper intends to further develop procedures and commitments to align with the spirit of international standards.

Marimaca Copper intends to develop Social Responsibility Policies and Community Relations programs to align with relevant stakeholders. Marimaca Copper recently began the development of a Stakeholder Map and a Socio-Environmental Perception Study with the objective of better understanding community concerns. These will align with the spirit of international standards for mining projects as previously mentioned in the approved RCA.

20.2 Environmental and Socioeconomic Setting

The original Marimaca Project considered mineral extraction from the Marimaca 1-23 Claims Project (Marimaca 1-23) and the use of the existing processing plants and auxiliary installations in the Rayrock facilities (Ivan Plant).

The environmental report Declaracion de Impacto Ambiental or Environmental Impact Declaration (DIA in the Spanish acronym) for Marimaca 1-23 was submitted in December 2017 and approved in July 2018 (RCA N°0129/2018).

No further environmental investigation has been completed for the 2020 PEA, and all information in this report relies on the previous DIA.

20.2.1 Completed Baseline Studies during DIA

Baseline studies were conducted by an independent consultant between 2016 and 2017 to develop the environmental characterization required to support the Marimaca 1-23 DIA.

The main infrastructure in the Marimaca 1-23 DIA included: mine pit, WRSF, mineralization stockpile, auxiliary installations (shops, offices, waste management, etc.), and an explosives magazine storage. The original Marimaca Project considered mineral extraction from the Marimaca 1-23 Claims Project (Marimaca 1-23) and the use of the existing processing plants and auxiliary installations in the Rayrock facilities (Ivan Plant).

Baseline studies for the DIA were completed within a 147 ha study area. This comprised the original Marimaca 1-23 Claims Project area, and depending on the study, additionally covered the area representing an indirect effects study area. Baseline studies included the following:

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20.2.1.1 Climate and Meteorology

The Marimaca 1-23 Project area is located in an ecoregion exhibiting a desertic climate, which is characteristic of the region. The area is dry and the average annual rainfall is 2–3 mm as an annual average over 24 hours. However, storm events can occur, and may result in precipitation of 12–30 mm in a few hours.

Meteorological data for the 2015 calendar year were obtained from the Cerro Moreno station, located 35 km from the Project area. Winds have higher velocities in the spring (September– November) and reach their peak velocities after 7 pm.

20.2.1.2 Air Quality and Noise

According to the Marimaca 1-23 DIA baseline studies, air quality data were obtained for particulate matter (PM) with a diameter less than 10 µm (PM 10 ), particulate matter with a diameter less than 2.5 µm (PM 2.5 ), concentrations from a station in Antofagasta. Continuous data from 2014 and 2015 showed that concentrations of particulates in ambient air comply with daily and annual (average) for maximum allowed values established in the regulations (S.D. N°59/98, S.D. N°45/2001 & S. D. N°12/2011).

Noise measurements were taken at three receptor locations. Two of these receptor locations already exhibited background noise levels above the maximum allowed values for noise propagation (S.D. N°38). This is mainly due to high traffic levels along Route 1 and truck traffic along route B-400.

For both components (air quality and noise), the baseline data were used to model how the resulting ambient air quality and noise levels at receptor points would be affected by the Project during the construction and operations stages.

20.2.1.3 Geology, Geomorphology and Geological Risks

The geology of the study area is described in Section 7 of this Report.

Given the geomorphological characteristics of the region and its evolution, there is a correlation with the changes in landscape that occur due to short but intense rainfall events (every 4–5 years) that generate mud flows and alluvial debris. In the local area, the topographical surface does not present evidence of significant alluvial activities.

Seismic risks in the Project area were initially not considered to be significant in the study “ANTECEDENTES PARA LA TRAMITACIÓN DEL PERMISO AMBIENTAL SECTORIAL MIXTO PASM 137”. In the DIA, the severity of a seismic event was considered more important than the magnitude, given the damage that could occur. A recommendation for a seismic study was included for the post-closure stability of remnant installations (pit and waste rock storage facilities).

20.2.1.4 Soils

The soil in the Marimaca 1-23 project area is mainly composed of saline and clay soils. There is no anthropocentric land-use in the area. The soils support scarce vegetation, mainly bushes. The soils are classified as class VIII according to the U.S. Soil Conservation Service and are not suitable for agricultural use as per Informe Linea Base 2016.

20.2.1.5 Hydrology and Hydrogeology

The baseline studies for the Marimaca 1-23 DIA did not include Project-specific hydrogeological or hydrological studies or modelling (conceptual or numerical). Hydrogeologic

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and hydrologic Information was obtained from secondary sources as per Informe Hidrológico: Proyecto Marimaca, Compañía Minera Cielo Azul Limitada, December 2017.

The Marimaca 1-23 DIA states there are no springs in the study area. The Marimaca 1-23 DIA also states there are no substantial aquifers in the study area.

The Marimaca 1-23 DIA states there are no surface water sources in the study area. North of the mine area there are alluvial creeks along route B-240/B-242, and others exist south of the planned mine along routes B-350/B-400.

20.2.1.6 Fauna

The only type of fauna identified in the Marimaca 1-23 DIA is vultures; no other fauna was observed on site.

Based on other Projects in the area and on registries from agricultural authorities (SAG), a spatial analysis was done on nesting areas of the marine bird Gaviota garuma , and potential occurrences were identified east of the study area. .

20.2.1.7 Flora

A field reconnaissance study was completed in October 2016 to characterize the flora in the study area. No species with a conservation status were reported. The main types of vegetation present are woody shrubs and annual grasses. There was no presence of lichens or fungi due to a lack of humidity and precipitation in the area.

The main type of vascular flora identified belonged to the Nolanacea family, species which are almost entirely restricted to the Atacama and Peruvian deserts. These species are adapted to the arid and mountainous environment of northern Chile where they depend on the camanchaca for their development.

The Marimaca 1-23 area is not located in a conservation area. The Project area is located more than 30 km from La Chimba National Reserve and 23 km from the nearest Conservation Priority Site (Mejillones Peninsula).

20.2.1.8 Archaeological and Paleontological Studies

An archaeological study was completed in December 2016 following sampling guidelines by the National Monuments Council.

Historical references in the Antofagasta region identify human occupation dating back to the Archaic Period (8,000 to 1,700 years B.C.), composed of the Chinchorro groups (traditionally, hunters, gatherers, and fishermen). These groups mainly flourished on the coast. They were involved with textiles, but also agriculture and mining. Eventually, parts of these groups migrated west in search of other resources for economic activities. The coastal communities of the region continued to improve their fishing industry.

In the Marimaca 1-23 Project area, no relevant archaeological sites were identified. Only artefacts from artisanal mining were identified.

20.2.1.9 Landscape

According to the Marimaca 1-23 DIA, landscape characterization was completed based on photo interpretation, geomorphological baseline information, and biophysical attributes obtained for each observation point. In general, the Marimaca 1-23 project area is in a desert landscape, with hills or low mountain chains and valleys dominated by soils void of colour and

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vegetation. In terms of landscape quality, the study considered a low ranking since it is not a unique or representative landscape.

20.2.1.10 Traffic Studies

In the Marimaca 1-23 DIA Addenda, Marimaca Copper noted that the transportation activities would be conducted by third parties and therefore it was not necessary to complete additional traffic census or studies.

20.2.1.11 Socio-Economic Studies

In the Marimaca 1-23 DIA, the socioeconomic baseline area of direct influence of the Project was focused at the local community level, whilst the area of indirect influence was focused at a provincial and regional level.

The population in the region is mainly concentrated in the cities of Antofagasta, Calama and Tocopilla. The population of Mejillones, the nearest community to the Project, is approximately 10,000 people. The main economic activity in the region is mining and commerce, followed by transportation services. In the Marimaca 1-23 DIA, a detailed description of education, health, infrastructure, and logistical services were summarized for the region.

20.2.2 Baseline Studies Required for next stages

The 2020 PEA Project represents an expansion of the original Marimaca 1-23 Claims Project and assumes construction of a new processing plant and auxiliary facilities to be located 5 km west of the proposed open pit. This change was evaluated in 2020 by AMEC Foster Wheeler and it is preferred over the existing Ivan Plant facilities because of the shorter distance to the mine and from Mejillones. The plant complex will include a crushing plant, leach pads, and ripios facilities and is estimated to occupy approximately 281 ha of surface area. In addition, the Project will increase the mine pit footprint, which translates into an increase in tonnage processed and a mine surface area of 257 ha.

This new configuration will require an environmental permit via a new Environmental Impact Assessment (EIA) or DIA. The baseline studies indicated in Table 20-1 will likely be required for a new DIA of the new Project areas and to determine the impacts caused by the new Project activities. Other studies may also require updates. These studies are also relevant to the Environmental Sectorial Permits (PAS) that will be required for the planned modifications. The Chilean authorities may require that existing baseline studies be updated for a new DIA or EIA. The level of effort and detail of additional information will differ for a DIA vs EIA.

Once the 2020 PEA Project definition is frozen, a gap analysis will be completed on the existing baseline studies from the Marimaca DIA, the Marimaca Exploration DIA (2020), and other studies to confirm what additional studies will be required.

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Table 20-1: Additional Baseline Studies Requirements for a DIA

Environmental Justification for Update Components

Air Quality & Noise Given that the logistics transport will change with the change of the plant location, an updated characterization of air quality and noise will be completed along with an air quality dispersion model for the Project’s direct influence area. The noise emissions model will also consider blasting requirements and define the best schedules to minimize impact to the community. Fauna Additional wildlife inventories will be completed for the Project in order consider the expansion of the Project footprint. Flora Additional vegetation inventories will be completed for the Project in order consider the expansion of the Project footprint. Archaeological & The archaeological authority (National Monuments Council) normally Paleontological Studies requests that the corresponding archaeological and paleontological studies be completed in new project areas to identify protected sites. Baseline studies (2016) for the mine area disregarded archaeological sites; given the expansion of the Project footprint, these will be updated. If protected sites are identified, additional studies will be required for the corresponding PAS in the new DIA. Traffic Studies Given the modifications in routes and number of trucks for the expanded Project, these will be characterized along with traffic studies. In addition, Traffic Impact Studies will have to evaluate conditions with and without the Project; these evaluations will have to consider cumulative traffic from nearby industry and projects. Visual Landscape The Project will require a characterization of the visual attributes. Previously prospected areas for Marimaca will require study updates given the expansion of the Project footprint. Hydrology & The Marimaca 1-23 DIA relied on secondary information for hydrology Hydrogeology and hydrogeology and did not consider hydrogeological modelling. Given the Project’s new influence area and more stringent requirements from the Water Authority (DGA), hydrological and hydrogeological studies will be conducted. These studies will require long-term analysis. Socio-economic Studies Socioeconomic studies will be performed with the new Project definition.

Should the project require an EIA instead of a DIA, further additional studies will be needed to account for seasonal differences and the need for one year’s worth of data for air emissions monitoring.

20.3 Environmental Permitting

20.3.1 Environmental Approvals

20.3.1.1 Current Approvals

A DIA was presented for the original Marimaca 1-23 Claims Project in December 2017. The environmental assessment process took seven months and the DIA was approved in July 2018 via document RCA N°0129/2018.

The main installations approved in this DIA included:

 An open pit,

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 A waste rock storage facility and low-grade stockpile,  Auxiliary installations (guard house, lunchrooms, first aid facilities, temporary and permanent waste storage), and  Roads (internal, mining and access).

The Marimaca 1-23 DIA assumed that the Ivan Plant, 20 km south of the mine area would be used. The Ivan Plant is not included in the DIA approval document. No accommodations facilities (mining camp or operations camp) were included in the Marimaca 1-23 DIA, given the original intent that workers would travel by bus directly from Mejillones and Antofagasta.

The Ivan Plant and its subsequent modifications were subject to their own Environmental approvals, via RCA N° 674/1993 and other approval documents. This plant was closed in 2012.

20.3.1.2 Approvals Required for Next Stages

Marimaca Copper will have to request Environmental approval via a new DIA or EIA given the changes to the original project and the new processing plant location.

A preliminary analysis of Article 3 of Supreme Decree N° 40/2012, Environmental Impact Assessment Regulation, identifies the following forms of entry that could apply to the Project:

i.) Mining development projects, including coal, oil and gas projects, including exploration, holdings, processing plants and disposal of mine waste, as well as industrial extraction of aggregates, peat or clay.

b.1) High-voltage electrical transmission line (>23kV).

Chilean environmental legislation allows for two types of submission into the Sistema de Evaluacion de Impacto Ambiental (SEIA l): a DIA or an EIA. The type of document required depends on the presence or absence of characteristics or circumstances that can generate impacts to the environment, communities, and worker health. Mitigation, compensation, and/or offset measures may need to be adopted to control these impacts, as well as the implementation of monitoring programs.

A preliminary (and high-level) analysis of Articles 5-10 of Supreme Decree N° 40/2012 shown in Table 20-2 considered the most significant Project modifications to define the type of Environmental document required. A detailed analysis of the various criteria in each article will have to be completed with better understanding of the baseline characterization of the Project´s influence area and a consideration of the cumulative effects of the entire project (original plus modifications).

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Table 20-2: Preliminary Analysis of Applicability of EIA

Article N° & Content Summary Potential Impacts due to Project Modifications

Due to increase of Project works, installations and production, air Article N°5: Significant adverse effects on emissions and noise propagations models will have to identify the health of population due to amount or impact on population. The Project´s modifications will increase quality of effluents, emissions or waste. amount of waste; however, these will be managed according to appropriate regulations. I

The increase of the Project´s footprint may impact flora, vegetation and fauna; based on baseline studies of new areas Article N°6: Significant adverse effects on which should confirm or discard sensitive species. the quantity of renewable natural There are no wetlands or protected areas near the Project that resources, such as flora, fauna, including could be affected by the expanded study area and design soil, water, and air. modifications. The project will not use local water resources since it will buy seawater from a supplier. In addition, due to desert conditions, there is no soil value for agricultural use.

The Project will not require resettlement of populations. The Article N°7: Resettlement of human Project’s footprint will not alter the closest communities, communities, or significant disruption of life Mejillones and Antofagasta, given the distance. However, the systems and human group customs linked increase of traffic due to transport of materials & workers and to the alteration of the geographical, transport of sulphuric acid will have to be evaluated to confirm or anthropological, socioeconomic dimension, discard significant impact. The probability is low that there will be and basic social welfare. significant impact due to traffic increase and the Project will use roads that are apt for heavy traffic.

Based on the Marimaca 1-23 DIA, the closest indigenous Article N°8: Significant alteration of officially community is 150 km away. Other resources and protected protected resources, given its location areas, such as glaciers, biodiversity areas and wetlands are close to a population protected by special located more than 30 km from the Project area. Therefore, this laws and areas where resources are article would not be applicable based on current Project officially protected. definitions.

Article N°9: Significant alteration of the value of the landscape in terms of Based on the Marimaca 1-23 DIA baseline results, there are no magnitude and duration, of the landscape relevant landscape elements or areas with representative value of the intervened area, due to landscape. A characterization of new Project areas will most external modifications on the resources and likely identify desert characteristics which would discard elements of the environment of an area applicability of this article. with landscape value.

Article N°10: Alteration of monuments, sites In the Marimaca 1-23 DIA, Marimaca Exploration DIA (2020) and anthropological, archaeological, historical other mining project areas, no relevant archaeological sites have value and, in general, sites been identified. A characterization of the new areas will have to belonging to cultural heritage. identify existence of sites with value..

Note: Articles 5 – 10, Title II Of the Generation (or Creation) or Presence of Effects, Characteristics or Circumstances that Identifies Need to Present an Environmental Impact Study, Supreme Decree N°40/2012 Regulation of Environmental Impact Assessment, Ministry of Environment.

It is highly probable that the Project will only require a DIA for its environmental approval. However, as shown in the high-level analysis, there are uncertainties that will have to be reduced with additional baselines studies in order to evaluate sensitivities in the Project’s influence area. The expansion of the pit and waste dumps could have certain complexities that should also be aligned with the environmental sensitivities of the area where the modifications will be located. Traffic studies will have to confirm potential disruptions in Mejillones or Antofagasta and or increases in air emissions and noise propagations. However, given the distance to the closest communities and the high economic value of mining in the region, the Project is not likely to impact socioeconomic indicators.

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20.3.2 Environmental Sectorial Permits (PAS)

The original Marimaca 1-23 Claims Project received approval for various PAS for infrastructure and activities approved in the 2018 DIA, as shown in Table 20-3. Various sectorial permits (PS) require the approval of the corresponding PAS before they are approved; these PAS are referred to as “mixed-PAS”.

Table 20-3: Environmental Sectorial Permits (PAS) Approved for the Marimaca 1-23

Works & D.S. N°40 / 2012 Environmental Installations that Authority article Sectorial Permit trigger PAS

Permit for operation Waste dumps and Mining Ministry Art. 136 of waste dump or mineral storage (Sernageomin) mineral storage

Permit for mine Mining project with closure plan as remnant Mining Ministry Art. 137 defined by Law installations upon (Sernageomin) 20.551. closure

Sewage Treatment Sewage treatment Art. 138 Health authority System Authorization plants

Permit to accumulate Non-hazardous and/or final disposal waste management Art. 140 of household wastes Health authority areas (industrial & and garbage of any domestic) type.

Permit to accumulate Hazardous waste Art. 142 Health authority hazardous waste. management area

Permit for Modification of construction of works water courses due Water authority Art. 156 referred on article to waste dump and (DGA) 294 of the Code of roads crossings Waters

Permit for regularization of Contour channels, Water authority Art. 157 works and defense of roads construction (DGA) natural courses

Installations Permit required for constructed in rural construction of areas. This permit is Ministry of Art. 160 buildings in rural pre-requisite for Agriculture (SAG) areas. construction permits by municipality.

The Project will also require various PAS that will have to be included in the new DIA or EIA document. Based on a preliminary analysis, the PAS in Table 20-3 will have to be amended based on the new Project areas and/or installations, and some will have to be updated with the modifications to the pit and waste rock storage facilities. The applicability of additional PAS will be completed when additional information is available. However, it is anticipated that the following could also be triggered by these modifications:

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 PAS 132: Permit for archaeological, anthropological, and paleontological excavation, if sites are identified in the Project´s influence area.  PAS 139: Truck shop wash system located in mine.  PAS 146: Permit for capture of fauna in conservation status. If species are identified in the Project´s influence area.  PAS 155: Permit required for construction of hydraulic works projects. This could apply to the seawater pond if capacity is greater than 50,000 m3.  PAS 159: Permit for extraction of materials near rivers or water sources. If the Project requires this type of resource.

20.3.3 Sectorial Permits

The Project as described will have to identify and classify the Sectorial Permits (PS in the Spanish acronym) needed along with critical path permits. Among the critical permits are those approved by the mining, water, and roads authorities that have long approval timelines, complexity level of technical studies/data required or that have pre-requisites that could impact the Project schedule. A preliminary list of these is shown in Table 20-4. To date, Marimaca Copper has not submitted sectorial permits for the approved Project installations.

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Table 20-4: Preliminary Critical Sectorial Permits

Critical Sectorial Permits

Closure Plan

Roads access permits

Permit for Construction of Ponds or Reservoirs with walls over 5 m height or more than 50,000 m3 of fill

Authorization for Works in a Water Course (DGA Art.294 letter c))

Authorization for Works Modifying a Water Course

Exploitation Method Authorization (Open Pit)

Authorization for a Stockpile or Waste Dump

Favourable Construction Permit (IFC)

Building Permits

Final Works Reception

Process Plant Operating Permit

Sanitary Landfill Health Permit

Hazardous Waste Area

Process Plant Operating Permit

Sulphuric acid Tanks approval (Health & SEC)

Sulphuric acid Storage & Management Plans (Health)

Sulphuric acid transport permits

Sewage Water Treatment Plant (Health)

Waste management areas (Health)

20.4 Closure Considerations

20.4.1 Regulatory Considerations

The Project will require a Closure Plan, approved by the Mining Authority (Sernageomin) and regulated by Supreme Decree N°41/2012. The Closure Plan will specify closure measures defined through risk assessment and will include an estimate of the closure costs. The Closure Plan will consider all the facilities included in the approved Environmental documents as per Sernageomin’s Methodology Guide. In addition, the Closure Plan approval requires approval of PAS 137, permit for mine closure plan as defined by Law 20.551 which focuses on physical and chemical stability of remaining installations after closure

The Closure Plan will be approved before operation starts, and a bond will be delivered to the Government of Chile during the first year of operation.

The Closure Plan approval is preceded by obtaining all mining permits from Sernageomin, including those for the WRSFs, process plant, and open pits (mine operation).

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20.4.2 Closure Measures

In the Marimaca 1-23 DIA, Marimaca Copper committed to the following measures with respect to the closure stage, among other activities:

 Dismantling of installations, access closure and safety signs. All hazardous substances and hazardous and non-hazardous waste will be properly managed.  For the pit and WRSFs, the design considered safety factors for their physical stability at closure.  A characterization of the mineralization and waste material to be completed during the operations stage. These studies will allow the assessment of acid rock drainage (ARD) potential and presence of groundwater sources to transport the contaminant. Appropriate mitigations measures will be defined to assure chemical stability after closure, as required.  As much as possible, natural contours and landscape will be restored; however, no revegetation was considered.  Post-closure activities defined monitoring of physical stability for the pit and WRSFs for a period of three years.

A geochemical analysis was completed as part of the Marimaca 1-23 DIA on outcrop samples from exploration campaigns. Samples were sent to a laboratory for acid-base accounting (ABA) analysis, which showed that the samples tested were not potentially acid generating (PAG). However, as committed to in the DIA, additional characterization of mineralization and waste materials will have to be completed to assess ARD potential and confirm groundwater sources. This type of information will be required to address chemical stability of the expanded pit, waste rock storage facility and heap leach facilities in the Closure Plan to be submitted with the mining authorities.

The Marimaca 1-23 DIA declared that a stability analysis was conducted in the waste rock storage facilities. Considering the expansion of the pit, waste rock storage facilities and integration of new facilities (leach pads and ripios facility), additional stability analysis will need to be completed in order to confirm that the design criteria are sufficient to address stability risks during the closure stage.

A future closure plan considering the new configuration will need to be developed.

20.4.3 Closure Costs and Financial Assurance

Mining companies are required under Chilean law to provide a bond which is calculated based on the closure costs. The state can execute this bond if the mining company does not comply with the closure commitments. The bond is submitted over a period of 15 years with the amount to cover 20% of the total closure cost submitted during the first year of operation, discounted at a rate defined by the Central Bank of Chile (Sernageomin, 2018).

20.5 Summary of Potential Environmental and Socio-economic Effects

The area of influence of the Project the Antofagasta Region, and particularly the communities and cities of Mejillones and Antofagasta.

There are no indigenous lands or territories claimed in the Project area. The closest indigenous community (Atacama La Grande) is more than 150 km from the Project area.

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Marimaca Copper’s communications strategy will focus on building a positive reputation and supportive environment for project development in the Antofagasta Region and will evaluate how it will adhere to regional policies, plans and development. Specific development strategies are directed to the communities of Mejillones and Antofagasta. A communications plan, communications committee and crisis response management plan will be developed as the Project moves forward to the next stages.

A formal consultation process, as required by the DIA or EIA evaluation has not been conducted as part of the 2020 PEA preparation. In addition, the communications strategy and plan will have to incorporate all modifications from the original Marimaca 1-23 Claims Project.

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21 Capital and Operating Costs

21.1 Cost Estimation Methodology

The estimate is developed based on a mix of material take-offs and factored quantities and costs, semi-detailed unit costs and defined work packages for major equipment supply.

The structure of the estimate is a build-up of the direct and indirect cost of the current quantities; this includes the installation/construction hours, unit labour rates and contractor distributable costs, bulk and miscellaneous material and equipment costs, any subcontractor costs, freight and growth.

The methodology applied, and source data used to develop the estimate is as follows:

 Define the scope of work  Quantified the work in accordance with standard commodities  Structure the estimate in accordance with an agreed WBS  Calculated “all in” labour rates for construction work by major trade groups  Determine the purchase cost of equipment and bulk materials  Determine the installation cost for equipment and bulks  Determine the cost for temporary facilities required at site during the construction period  Established requirements for freight  Determine the costs to carry out detailed engineering design and project management  Determined foreign exchange content and exchange rates  Determined growth allowances for each estimate line item  Determined the estimate contingency value  Undertake internal peer review  Finalized the estimate, estimate basis and obtained sign off by the Study Manager

21.1.1 Source Data

Source data included:

 equipment lists  Scope of work  Process design criteria  General arrangement drawings  Drawings and sketches  Process flow diagrams  Material take-offs  Equipment and bulks pricing

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 Contractor installation (labour rates, historical data)  Vendor equipment and material supply costs  Third party estimates  Historical data  Project schedule

21.1.2 Basic Information

The following basic information pertains to the estimate:

 The estimate base date is 2020  The estimate is expressed in united states dollars  Metric units of measure are used throughout the estimate  Actual estimate accuracy is defined by the stated maturity of the information available

21.1.3 Estimate Classification

The estimate has been prepared in accordance with the recommended practices of the American Association of Cost Engineers (AACE) and has an accuracy range of ±25%.

21.1.4 Market Availability

The pricing and delivery information for quoted equipment, material and services was provided by suppliers based on the market conditions and expectations applicable at the time of developing the estimate.

The market conditions are susceptible to the impact of demand and availability at the time of purchase and could result in variations in the supply conditions. The estimate in this report is based on information provided by suppliers and assumes there are no problems associated with the supply and availability of equipment and services during the execution phase.

21.2 Capital Costs

21.2.1 Overview

Capital costs are summarised in Table 21-1 and show initial costs of $284.7 M, with sustaining costs of $66 M, for a LOM total capital cost of $350.7 M.

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Table 21-1: Capital Cost Summary

Estimated Capital Costs ($M)

Mining Equipment 14.0

Mine Development 9.2

Crushing & Agglomeration 22.7

Leaching 43.5

SX-EX Plant 81.1

Infrastructure (incl acid tanks, power supply, 14.7 buildings)

Total Direct Costs 185.1

Indirect Costs 42.6

Contingency 56.9

Total Initial Capital Cost 284.7

LOM Sustaining Capital (including Indirect costs) 66.0

Total Life of Mine Capital Cost 350.7

21.2.2 Initial Capital Cost

The initial capital cost estimate was summarized at the levels indicated by the following tables and stated in United States Dollars and with no provision for forward escalation. Initial capital costs of $284.7 M are shown in various formats in Table 21-2:

Table 21-2: Initial Capital Estimate Summary Level 1 Major Area

Cost Type Area Total ($M)

Direct Mining Equipment 14.0 Mining Development 9.2 Crushing 21.2 Agglomeration 1.5 Leaching 43.5 SX-EW 81.1 Reagents 1.3 Infrastructure 13.4 Direct Subtotal 185.2 Indirect Indirect Costs 33.3 Owner Costs 9.3 Contingency 56.9 Indirect Total 99.5 Project Total Initial Capital Cost 284.7

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21.2.2.1 Direct costs

The direct costs were estimated by Ausenco. All equipment and material requirements are based on the design information available for the 2020 PEA.

Budgetary capital costs were estimated primarily based on recent quotes from similar projects, Marimaca Copper’s internal database and cost guides. Where recent quotes were not available, reasonable cost estimates or allowances were made or factored from existing data. All capital cost estimates are based on the purchase of equipment quoted new from the manufacturer or estimated to be fabricated new.

A factored cost was prepared for the following.

 Civils (concrete)  Structural steel  Platework  Piping  Electrical and instrumentation  Facilities

Major Earthworks and Liner

Major earthworks and liner include the costs for the construction of the leach pads and associated solution collection ponds as well as platforms for the crushing, conveying and recovery circuits. Earthworks and liner quantities were estimated. Unit rates for earthworks and liner are based on contractor budgetary quotes for a recent project in the area.

Concrete

The civil costs area is factored based on benchmark percentages from a similar project. Concrete costs for the solvent extraction and electrowinning plant have been included in the EPC EW-SX and Tank Farm.

Structural Steel

Structural steel costs are factored based on percentages of mechanical equipment cost experience obtained from similar projects.

Mechanical Equipment

Costs for mechanical equipment are based on an equipment list developed of all major equipment required for the process. Costs are based on recent quotes from Marimaca Copper’s files for similar items and cost guide information or have been factored based on similar equipment. Where costs were not available, reasonable allowances were made. All costs assume equipment will be purchased new from the manufacturer or will be fabricated new.

Installation hours for mechanical equipment is factored based on the equipment supply costs or equipment type.

Budgetary quotes were obtained for the following items:

 Mining fleet

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 Crushing plant  Stacking equipment  SW-EW and tank farm plant (EPC quote)

Piping, Electrical and Instrumentation

The piping cost, electrical cost and instrumentation costs are factored based on percentages of mechanical equipment cost experience on similar projects.

21.2.2.2 Indirect costs

Owners Cost

Owners costs are included in the estimated. These costs have been estimated as 5% of the project direct costs or $9.3M.

Indirect Costs and EPCM

Indirect field costs include temporary construction facilities, construction services, supplies, quality control, survey support, construction equipment, safety, etc. These costs have been estimated as 18% of the project direct costs or $33.3M.

21.2.2.3 Contingency

Contingency has been applied at 25% of the direct and indirect costs. The total project contingency is $56.9M.

21.2.3 Sustaining Capital Costs

The sustaining capital cost estimate has been summarized at the levels indicated in Table 21-3. The estimate has a base date of 2020 and no provision for forward escalation was made.

Table 21-3: Sustaining Capital by Major Area

Cost Type Description Total ($M)

Direct Mine 0

Process 48.2

On-Site Infrastructure 0

Off-Site Infrastructure 0

Indirect Indirect Costs + Contingency 17.8

Total Sustaining Capital Cost 66.0

21.2.4 Mine Capital Cost

The total estimated mining capital costs are summarized in Table 21-4. Initial capital amounts to $ 23.2 M and because of the 13 years (including pre striping) of mine only minor sustaining capital of $ 0.6 M was estimated.

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Table 21-4: Mine Capital Cost Estimate Summary ($ M)

Cost Area Initial Sustaining Total Capital Capital Capital Pre-stripping 4.7 - 4,7 Equipment leasing 4.4 - 4,4 Equipment rebuild - 0.006 0.0 Other investments 2.2 - 2.2 Pioneering roads 5.2 - 5.2 Maintenance infrastructure 6.5 - 6.5 Total 23.2 0.006 23.2

The description of the cost areas contained in Table 21-4 are the following:

 Pre-stripping: Corresponds to the operating cost of the pre-stripping of the required 4 Mt during the first three months before commercial production.  Equipment leasing: The strategy adopted for the mining equipment acquisition corresponds to a leasing option. The value considered as initial capital corresponds to the first three monthly payments for the equipment required during the pre-stripping period. The rest of the payments are considered as operating cost.  Equipment rebuild: Because of the extent of the life of mine, all the equipment is within the typical useful time. Only minor rebuild for support equipment was considered.  Other investment: Corresponds to the acquisition of mining and geology software, geotechnical system, geological equipment, radio equipment and a crew bus.  Pioneering roads: Corresponds to an allowance for the construction of roads to the initial mining areas as well as to the crusher, waste rock storage areas and stockpiles, during an estimated six-month period before pre-stripping.  Maintenance infrastructure: Considers the construction of the heavy equipment maintenance facility for $5.0 M and the explosive magazine for $1.5 M.

21.3 Operating Cost

21.3.1 Summary

The operating costs are estimated C1 cash costs over the life of mine, at an average of $1.22/lb Copper as Cathodes. C1 cash costs consist of mining costs, processing costs, site general and administrative G&A and transport charges and royalties.

All in sustaining costs (AISC) are estimated at an average of $1.29/lb Copper as Cathodes. AISC includes cash costs plus sustaining capital.

All costs are presented in US dollars.

Table 21-5 summarises the LOM average C1 operating costs, including mining, processing and G&A costs. The average operating cost is $ 8.68/t of processed mineralization (ROM and heap leach); offsite transport and royalties is $ 0.11/t of processed mineralization. Operating costs include crush heap leach tonnes sent to crusher and subsequent heap leach processing, as well as ROM leaching; The ROM haulage costs to Rom Dump are part of mining haulage cost.

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Table 21-5: Operating Cost Estimate Summary

$/t mineral $/lb Cu Operating Cost Processed Processed Mining 3.19 0.44

Processing 4.95 0.69

Site G&A 0.54 0.07

Transport & Royalties 0.11 0.02 Total 8.79 1.22

Operating cost estimates are accurate to within ±25%.

An overall contingency was not explicitly included in the operating cost estimate, yet it does consider contingencies for specific cost contributors to allow for at-present unspecified miscellaneous details, such as electrical consumption of minor auxiliary equipment (sump pumps, dust suppression, maintenance equipment, services).

Note that in some tables the totals presented may differ from totals on individual table values because of rounding.

21.3.2 Mine Operating Cost

Mining Opex costs were estimated by building up the cost estimate over the 12-year LOM (excluding pre-stripping) and presents an average annual cost of $ 34.8 million, which is equivalent to $4.72/t of crush heap leach processed mineral.

The basis of the estimate is that the open pit operation will be an Owner-operated mine. Mine operating cost forecasts are included in Table 21-6.

The following assumptions were made:

 Owner open pit mining costs include the sum of operating and maintenance labour, supervisory labour, parts and consumables, fuel and miscellaneous operating supplies.  Personnel are divided into salaried and hourly personnel.  Parts, non-energy consumables, fuel and miscellaneous operating costs were based on the projected mining fleet requirements.  Owner-managed maintenance for the life of mine, with hourly costs per ranges of the life of the equipment.  Explosives costs as per the values used are based on supplier costs obtained during first quarter 2020.  A diesel fuel cost of $0.40/L delivered to site was used in the operating cost estimate, based on local provider quote obtained during second quarter 2020.  The mining equipment fleet acquisition strategy is through a lease option for 60 monthly payments from when the equipment is required according to the mine production schedule. The estimate was based on quotations obtained from reputable heavy equipment providers.

Mining costs include:

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 Salaries and wages: based on an estimate of staff and labour numbers and using labour rates current for Chile, per Marimaca Mining Consultant. Total mine staff is 57 to 58, and mine labour varies by the year and ranges between 100 and 250, averaging approximately 238 in Years 3 to 7.  Fuel and power: based on a listing of required equipment and vendor suggested consumption rates  Consumables: includes tires, replacement parts, lubricants, and ground engagement tools  Additional costs have been included for ‘down the hole’ contract blasting, road/rock/ stemming crushing, mineralized material control sampling, dewatering, and operation of the autonomous haulage system.

The total mine operating cost during commercial production period is $ 418 M. This amounts to $ 1.76 per total tonne of mined material (including re-handling) during this period.

Table 21-6: Mining Operating Cost Estimate Summary

Item LOM Total ($M)

Loading 38.7

Hauling 119.6

Drilling $21.1

Blasting $34.6

Ancillary $39.4

Support $18.1

Mine equipment leasing $78.6

Grade Control $6.0

Engineering and administration $61.9

Total $418

21.3.3 Processing

Processing costs consist of costs for sulphuric acid, power, consumables, maintenance, contracts, labour, are as summarized in Table 21-7. Contracts includes the ripios removal, transport and disposal contract service.

Processing operating costs were estimated based on:

 Marimaca Copper’s recommendations and quotations for sulphuric acid, reagents, water, fuel costs, electricity, miscellaneous expenses, reviewed against Ausenco’s database for reasonableness.  Process criteria definitions which align with the project metallurgical basis for estimate of yearly reagent consumptions.

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 Energy consumptions based on estimates of main consuming equipment in EW, crushing & agglomeration and heap stacking. Crushing simulations consider average hardness for plant feed.  Benchmarked estimates and cost factoring for cost of G&A and maintenance.  Labour rates and proposed organization was established based on benchmarks and Marimaca Copper definitions.  The 2020 PEA mine plan production schedule was used for the operating cost estimation, based on simultaneous crush heap leach and ROM leach processing.  Operating consumables are based on metallurgical bases or benchmarks from similar operations; reagent costs are calculated based on benchmark unit price values for specific process reagents used in SX & EW and use of available vendor information.

The processing operating cost estimate includes:

 Labour for supervision, management and reporting of on-site organizational and technical activities directly associated with processing plant and water supply  Labour for operating and maintaining processing plant and water supply including mobile equipment and light vehicles  Fuel, reagents, consumables and maintenance materials for overall processing and services supply  Power supplied to the site from the main site substation  Seawater supply, in quantity and quality as specified in quotations provided from local water suppliers to Marimaca Copper. Table 21-7 Processing Costs

Annual Cost ($/t Total Processing Cost Annual Cost Annual Cost ($M) mineralized material Item ($/lbCu) processed)

Sulphuric Acid 16.97 1.56 0.22

Power 8.09 0.74 0.10 Consumables & 12.60 1.16 0.16 Reagents Maintenance 4.21 0.39 0.05

Contracts 7.44 0.68 0.09

Labour 4.65 0.43 0.06

Total (w/o G&A) 53.96 4.95 0.69

G&A 5.89 0.54 0.07 Total (w G&A) 59.85 5.49 0.76

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Table 21-8 Data Sources for Processing Costs

Cost Category Source of Cost Data Processing labour Salaries, wages and labour roster for processing were considered from Marimaca Copper definitions and checked against Ausenco databases of similar projects. Reagents Unit costs provided by benchmark operations of similar type and use of cost databases for reagents used by the mining industry, derived from vendors. Consumption rates based on metallurgical basis (chapter 13) for sulphuric acid and salt; benchmarked unit consumption rates for reagents in EW and SX. Consumables Crushers liner and screens were estimated based on benchmarked consumption rates of a crushing plants performing similar crushing duty, and from vendor information. Irrigation network was expressed as a unit cost per m2 and a yearly replacement was assumed. Replacement of anodes and cathodes consider benchmark replacement values. Power Power usage costs were calculated using load factors, operating hours per year and installed equipment power for all main equipment (EW rectifiers, crushing plant, material handling equipment). Factored estimates for energy consumption in SX and solution handling was included, using similar projects as reference. Allowance for power has been included to consider auxiliary equipment to be yet defined (plant air, dust suppression, control systems, lighting, etc.). The grid power cost of $60/MWh was supplied by Marimaca Copper, based on quotations. Maintenance spares and Preliminary estimate for maintenance was derived from a consumables factoring approach, based on benchmark factors for installation and an approximate value for overall project capex; 3% of supplied equipment cost was considered as a yearly amount to cover maintenance work and spares. Supplied equipment costs was estimated from total direct initial capex and an installation factor from benchmarking. Maintenance cost was checked and validated based on considering maintenance costs from projects of similar processing technology.

21.3.3.1 Power

Costs for power for the processing plant were estimated by calculating annual power consumption, derived from installed power as defined by vendor information for the preliminary equipment selected, together with equipment utilization and load factors. Areas where no equipment selection has taken place, a factored approach was used considering similar plants. Power consumption has been estimated as a per tonne basis, and capacity scaling was used to estimate consumption changes due to tonnage differences among years.

Unit cost of power was supplied by Marimaca Copper at $60/MWh.

Annual power consumption is shown in Table 21-9, where the two phases of the mine plan have been separated; approximately twice the tonnage is sent to crush heap leach in the second phase, relative to the first phase. For phase 1 of the mine plan, the unit cost due to power consumption is $1.44 /t (tonnes to heap leach only), while for phase 2 the unit cost is $0.96 /t. Averaged over full LOM, unit cost for power consumption is $1.10 /t (per tonnes to heap leach only).

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Table 21-9: Operating Costs - Power

Phase 1: Phase 1: Phase 2: Phase 2: Power Power Power Power WBS Area Description Consumption Costs Consumption Costs (MWh/y) (k$/y) (MWh/y) (k$/y) 310 Crushing 11,002 660 19,284 1,157 320 Agglomeration & Stacking 10,000 600 14,584 875 330 Leaching & Solution Handling 15,000 900 21,876 1,313 335 TF - SX -EW 85,786 5,147 86,731 5,204 340 Sulphuric Acid & Reagents 1,000 60 1,000 60 Total 122,787 7,367 143,474 8,608

21.3.3.2 Consumables and Reagents

Processing reagent and consumable costs were estimated based on the throughput to heap leach and copper production; ROM leaching impacts the operating cost mainly through its specific sulphuric acid consumption. The costs were based on calculated consumption rates and unit costs supplied by vendors or known values from past projects of similar processing technology. The consumption of reagents was calculated based on the process design criteria and project metallurgy discussed in Section 13.

Crusher liners, and screen deck consumption rates were estimated based on benchmarking similar crushing plants. A similar method was used to estimate reposition of irrigation network piping and drippers / sprinklers.

Costs for consumables and reagents are summarized in Table 21-10 below, which shows individual costs for consumables, reagents and other operating costs.

Table 21-10: Operating Costs - Consumables and Reagents

Annual LOM Average Consumables and Reagents Costs ($M)

Main crushing & heap leach $1.91 consumables

Sulphuric acid $16.97

Seawater $4.91

Diesel $1.86

Salt $0.55

Misc. reagents & consumables $3.38 (SX/EW)

Total $29.57

Note: Acid price based on Kalkos forecast study

Main crushing and heap leach consumables consider the specific items shown in Table 21-11.

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Table 21-11: Main crushing and heap leach consumables

Annual LOM PEA unit cost LOM Consumables Unit Price ($/unit) Average Cost assumptions ($M)

Crushing plant consumables 0.2 $/t (per HL NA 1.48 (crusher mantles, screens) ore)

Irrigation / solution collection 1.5 $/m 2, for each set, 1 set per year 0.43 elements according to HL area

Total 1.91

Main process reagents have been considered as shown in Table 21-12.

Table 21-12: Reagents

Annual LOM Annual Other Reagent Unit Price Average Cost Consumption ($M)

318 cathodes Cathodes Reposition /year (5% annual 338 $/Cathode 0.11 reposition)

65 anodes /year Anode Reposition (1% annual 580 $/Anode 0.04 reposition)

Electrolyte filter anthracite / sands 6 t/y 0.42 $/kg 0.004

Crud Plant Clays 25 t/y 550 $/t 0.023

Extractant (LIX984N) 89 t /year 12,128 $/t 1.08

Diluent (Shellsol D90) 463 m 3 /year 1,252 $/m 3 0.58

Guartec 8.9 t /year 5 $/kg 0.04

Cobalt Sulphate 33 t /year 10 $/kg 0.33

FC-1100 37 m 3 /year 32 $/l 1.17

Total 3.4

21.3.3.3 Maintenance

Annual maintenance spares and consumables costs were estimated at 3% of the total supplied assets, which includes mechanical equipment, civil works for heap pads, plate work, electrical and instrumentation equipment cost. Sustaining costs contribute to a higher maintenance basis for the second phase of the mine plan, since additional assets are now considered. Initial maintenance is lower due to a lower installed base during phase 1 of the mine plan, relative to the second phase of the mine plan with higher tonnage. Table 21-13 shows the total cost for maintenance in phase 1 and phase 2.

Maintenance spares and consumables include:

 Mechanical equipment replacement parts

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 Pipes, valves and fittings  Electrical, instrumentation and control equipment, cable and replacement parts  Bulk materials, e.g. steel plate and general liners, miscellaneous structural steel, etc.

The plant maintenance spares and consumables exclude:

 Maintenance labour, which is included under labour costs.  Special wear parts and liners for the crushers and mills, which are included in consumable unit costs.

Building maintenance and power supply maintenance costs are included.

Table 21-13: Operating Costs - Maintenance

Annual LOM Average Maintenance Area Description ($M)

Phase 1 Initial Mineral Processing Plant (MPP) 3.7

Phase 2 Phase 2 MMP 4.6

21.3.3.4 Labour

Labour costs include all processing and maintenance costs for the mineral processing plant and G&A.

Labour costs were based on salaries and labour rosters appropriate for the scale and complexity of the process plant design. Overall value has been benchmarked against similar heap leach projects of equivalent scale, based on a factored approach relative to total plant operating costs.

A listing of crew and positions has been compiled based on Marimaca Copper’s salary basis and standard postings and annual labour cost was verified to be equivalent with factored estimate. Basis for roster and crew positions assumed a LOM average framework, however operating costs labour values were preserved from the factored approach to reflects variation in labour costs as production levels and tonnage vary from year to year.

Transportation, recruitment and training costs are considered included in the G&A costs.

Yearly labour cost has been estimated at $4.67M.

A breakdown of processing labour schedules and costs are summarised in Table 21-14.

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Table 21-14: Operating Costs - Labour

Annual LOM Average Cost Centre Number of People Cost ($M)

General & Management 29 1.3

Crushing 19 0.4

Leaching 17 0.4

SX / EW 23 0.5

Maintenance 35 0.8

Services 18 0.7

Labour Estimate 141 4.2

Total (includes 15% overall factor 162 4.7 to cover vacations & absenteeism)

21.3.3.5 Site G&A

Operating cost estimates for G&A were estimated on a per total tonne basis (crush heap leach and ROM leach). Benchmarks indicate $0.54/t (including ROM ore) is sufficient to cover general and administration costs, equivalent to $0.8/t based on crush heap leach material.

The G&A costs include camp operations, G&A personnel, in-plant transportation vehicles. An annual G&A operating cost of $5.9M was estimated (Table 21-15).

Table 21-15: G&A Cost Summary

Annual LOM Average Cost Annual Annual LOM Average Cost ($ /t, ($ /t, per heap leach & ROM Cost ($M) per heap leach processed) processed)

Total 5.9 0.54 0.80

G&A costs are based on benchmarked data from similar projects in South America.

21.3.3.6 Contracts

The most relevant project contracts to consider from a cost perspective is the ripios removal contract. Marimaca Copper has provided a basis of estimate using on local contractor quotations. The removal of ripios and its transport to the ripios facility is presented on a per dry tonne basis. Contractor prices do not consider diesel costs, and an allowance of 20% relative to base cost was included as allowance for diesel.

Miscellaneous contracts for security, cleaning service, garbage removal and basic personal protection elements supply are covered by an allowance, based on a factored approach, and benchmarked on similar projects.

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Table 21-16: G&A Costs – Contracts

2020 PEA Cost Basis & Cost Centre Annual Cost ($M) Assumptions

$0.7/t (per HL ore) + 20% as Ripios removal contract 6.2 diesel allowance

Other Contracts 1.2

Total 7.4

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22 Economic Analyses

22.1 Cautionary Statement

Additional risks to the forward-looking information include:

 Changes to costs of production from what is assumed  Unrecognised environmental, permitting or social risks  Unanticipated reclamation expenses  Unexpected variations in quantity of mineralised material, grade or recovery rates  Geotechnical considerations during mining being different from what was assumed  Failure of mining methods to operate as anticipated  Failure of plant, equipment or processes to operate as anticipated  Changes to assumptions as to the availability of electrical power, and the power rates used in the operating cost estimates and financial analysis  Ability to maintain the social licence to operate  Accidents, labour disputes and other risks of the mining industry  Changes to interest rates  Changes to tax rates

Calendar years used in the financial analysis are provided for conceptual purposes only. Permits still have to be obtained in support of operations; and approval to proceed is still required from Marimaca Copper’s Board of Directors.

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22.2 Methodology Used

The capital and operating cost estimates developed specifically for this project are presented in Section 21 of this report in 2020 United States of America dollars. The economic analysis was run on a constant dollar basis with no inflation.

22.3 Financial Model Parameters

A base case copper price of $3.15/lb is based on consensus analyst estimates and recently published economic studies. The forecasts are meant to reflect the average metal price expectation over the life of the project. No price inflation or escalation factors were considered. Commodity prices can be volatile, and there is the potential for deviation from the forecast.

The economic analysis was performed using the following assumptions:

 Construction starting January 1, 2023  Construction costs capitalised by 30% and 70% in Year -2 and Year -1 respectively  Commercial production starting (effectively) on January 1st, 2025, with first revenue and expensed costs in Year +1  Mine life (LOM) of 12 years  Cathode premium of $100/t of copper  Cost estimates in constant 2020 United States dollars with no inflation or escalation  100% ownership with 0.5% royalty over mineralized material mined from the Marimaca 1-23 claims material and 1% royalty over mineralized material mined from the La Atomica claims   Capital costs funded with 100% equity (no financing costs assumed)  Copper is assumed to be sold in the same year it is produced  No contractual arrangements for refining currently exist

22.4 Taxes

The Project was evaluated on an after-tax basis to provide an approximate value of the potential economics. The tax model was compiled by Marimaca Copper with assistance from third-party taxation professionals. The calculations are based on the tax regime as of the date of the 2020 PEA and include estimates for Marimaca Copper’s expenditures, and related impacts to various tax pool balances, between the 2020 PEA study and the assumed construction start date.

At the effective date of this Report, the project was assumed to be subject to the following tax regime:

 The Chilean corporate income tax system consists of 27% income tax.  Total undiscounted tax payments are estimated to be $430 M over the life of mine.

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22.5 Working Capital

Working capital was estimated as 25% of change in operating expenses as per Marimaca Copper’s experience. The effective sum of working capital over the life of mine is zero.

22.6 Royalty

A 0.5% royalty over mineralized material mined from the Marimaca 1-23 claims and 1% royalty over mineralized material mined from the La Atomica claims were assumed for the Project, resulting in approximately $13.3 M in undiscounted royalty payments over the LOM.

22.7 Economic Analysis

The economic analysis was performed assuming an 8% discount rate. The pre-tax NPV discounted at 8% is $757 M; the internal rate of return IRR is 39.9%; and payback period is 2.4 years.

On an after-tax basis, the NPV discounted at 8% is $524 M; the IRR is 33.5%; and the payback period is 2.6. years. A summary of project economics is shown graphically in Figure 22-1 and listed in Table 22-1. Table 22-2 is the cashflow presented on an annualized basis.

Figure 22-1: Projected LOM Cash Flows.

Projected LOM Cash Flow $210 $1,200

$140 $800

$70 $400

$- $- -2 -1 1 2 3 4 5 6 7 8 9 10111213 $(70) $(400) Cash Flow Cash $(140) $(800)

$(210) $(1,200)

Post-Tax Unlevered Free Cash Flow Post-Tax Unlevered Free Cash Flow Cash Free Unlevered Post-Tax Post-Tax Cumulative Unlevered Free Cash Flow Free Unlevered CumulativePost-Tax

Note: Figure prepared by Ausenco, 2020.

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Table 22-1: Summary of Project Economics

General LOM Total / Avg. Copper Price ($/lb) 3.15 Mine Life (years) 12 Total Waste Tonnes Mined (kt) 109,462 Total Mineralized Material Tonnes (kt) 130,875 Strip Ratio (w:mineralization) 0.84x Production LOM Total / Avg. Heap Leach Tonnes (kt) 88,586 Heap Leach Cu Grade (%) 0.58% Heap Leach Cu Recovery (%) 75.7% ROM Tonnes (kt) 42,289 ROM Cu Grade (%) 0.23% ROM Cu Recovery (%) 40.0% Total Copper Ounces Recovered (Mlb) 945 Average Annual Production Years 2-11 (Mlb) 83 Average Annual Production LOM (Mlb) 79 Operating Costs LOM Total / Avg. Mining Cost ($/t Mined) 1.74 Mining Cost ($/t Material processed) 3.19 Processing Cost ($/t Material processed) 4.95 G&A Cost ($/t Material processed) 0.54 Total Operating Costs ($/t Material processed) 8.68 Refining & Transport Cost ($/t Cu) 2.5 Cash Costs ($/lb Cu) 1.22 AISC ($/lb Cu) 1.29 Capital Costs LOM Total / Avg. Initial Capital ($M) 285 Sustaining Capital ($M) 66 Pre-Tax Financials LOM Total / Avg. NPV (8%) ($M) 757 IRR (%) 39.9% Payback (years) 2.4 Post-Tax Financials LOM Total / Avg. NPV (8%) ($M) 524 IRR (%) 33.5% Payback (years) 2.6

Notes: * Cash costs consist of mining costs, processing costs, mine-level G&A and refining charges and royalties. ** AISC includes cash costs plus sustaining capital costs. AISC is at a project-level and does not include an estimate of corporate G&A

Page | 22-223

Table 22-2: Project Cash Flow on an Annualised Basis

Units Total / Avg. -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 Dollar figures in Real 2020 US$m unless otherwise noted Input1 Input2 Input3 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Gross Revenue US$mm $3,018 -- -- $144 $282 $282 $281 $255 $282 $278 $262 $257 $238 $234 $211 $10 Transport Costs Charges US$mm ($1) -- -- ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.1) ($0.0) Site Royalties US$mm ($13) -- -- ($0.7) ($1.4) ($1.4) ($1.1) ($1.2) ($1.5) ($1.6) ($1.2) ($1.0) ($0.8) ($0.8) ($0.7) ($0.0) Operating Expenses US$mm ($1,136) -- -- ($80) ($93) ($92) ($89) ($80) ($108) ($104) ($102) ($100) ($99) ($100) ($88) -- EBITDA US$mm $1,868 -- -- $63 $187 $188 $191 $174 $172 $172 $159 $157 $138 $133 $123 $10 Initial Capex US$mm ($285) ($85) ($199) ------Sustaining Capex US$mm ($66) -- -- ($12) ($9) ($9) ($31) ($4) -- ($1) -- -- ($0) ------Change in Working Capital US$mm ------($20) ($3) $0 $1 $2 ($7) $1 $1 $1 $0 ($0) $3 $22 Pre-Tax Unlevered Free Cash Flow US$mm $1,517 ($85) ($199) $31 $175 $179 $161 $172 $165 $172 $160 $157 $138 $133 $126 $32 Pre-Tax Cumulative Unlevered Free Cash Flow US$mm $1,517 ($85) ($285) ($253) ($78) $101 $262 $435 $599 $771 $931 $1,088 $1,226 $1,359 $1,485 $1,517 Pre-Tax Payback Flag ------2.4 ------

Tax Payable US$mm ($430) -- -- ($1) ($9) ($35) ($51) ($44) ($42) ($46) ($45) ($44) ($39) ($37) ($35) ($3) Post-Tax Unlevered Free Cash Flow US$mm $1,087 ($85) ($199) $31 $166 $144 $110 $129 $123 $126 $115 $113 $99 $96 $91 $30 Post-Tax Cumulative Unlevered Free Cash Flow US$mm $1,087 ($85) ($285) ($254) ($88) $56 $166 $295 $418 $545 $659 $772 $871 $967 $1,058 $1,087 Post-Tax Payback Flag ------2.6 ------

Resource and Production

Mineral Resource

Classification Measured Indicated M&I Inferred Cut-off Grade CuT (%) 0.22 0.22 0.22 0.22 Mineral (kt) 20,721 49,666 70,387 43,015 Grade CuT (t) 0.66 0.57 0.6 0.52 Grade CuS (t) 0.44 0.37 0.39 0.31 Contained Metal CuT (%) 136,283 283,654 419,937 224,471 Contained Metal Cus (%) 91,772 183,741 275,513 131,746

Production Summary

Mining Heap Leach Tonnes kt 88,586 -- 171 3,909 5,535 5,401 5,428 6,212 9,006 9,018 9,035 9,034 9,002 9,056 7,779 -- Heap Leach Cu Grade % 0.58% -- 0.64% 0.57% 0.83% 0.83% 0.84% 0.69% 0.59% 0.49% 0.51% 0.47% 0.50% 0.47% 0.43% -- ROM Tonnes kt 42,289 -- 1,657 3,693 2,434 3,678 4,666 508 6,036 2,493 4,562 3,032 2,264 5,342 1,924 -- ROM Cu Grade % 0.23% -- 0.27% 0.26% 0.40% 0.25% 0.29% 0.33% 0.22% 0.18% 0.20% 0.16% 0.16% 0.20% 0.19% -- Waste kt 109,462 -- 2,148 6,759 6,531 5,421 8,446 11,820 8,458 11,988 9,903 11,434 12,234 9,103 5,216 -- Waste + Mineralization kt 240,337 -- 3,977 14,361 14,500 14,500 18,540 18,540 23,500 23,500 23,500 23,500 23,500 23,500 14,919 --

Processing Heap Leach Tonnes kt 88,586 -- -- 4,048 5,400 5,400 5,400 5,400 9,000 9,000 9,000 9,000 9,000 9,000 8,939 -- Heap Leach Cu Grade 0% % 0.58% -- -- 0.58% 0.84% 0.83% 0.84% 0.74% 0.59% 0.49% 0.51% 0.47% 0.50% 0.47% 0.43% -- Heap Leach Recovery % 75.68% -- -- 79.61% 79.85% 80.49% 79.56% 77.02% 74.30% 76.95% 76.84% 78.30% 70.74% 74.70% 67.60% -- ROM Tonnes kt 42,289 -- 1,657 3,693 2,434 3,678 4,666 508 6,036 2,493 4,562 3,032 2,264 5,342 1,924 -- ROM Cu Grade 0% % 0.23% -- 0.27% 0.26% 0.40% 0.25% 0.29% 0.33% 0.22% 0.18% 0.20% 0.16% 0.16% 0.20% 0.19% -- ROM Recovery 40% % 40.00% -- 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% --

Total Tonnes Processed kt 130,875 -- 1,657 7,741 7,834 9,078 10,066 5,908 15,036 11,493 13,562 12,032 11,264 14,342 10,862 --

Operation Life Flag yrs 12 -- -- 1 1 1 1 1 1 1 1 1 1 1 1 --

Cathode Production

Heap Leach Recovered Cu ROM Recovery Delay kt Cu 389 -- -- 19 36 36 36 31 39 34 35 33 32 32 26 -- ROM Recovered Cu 1 Year kt Cu 39 -- -- 2 4 4 4 5 1 5 2 4 2 1 4 1 Total kt Cu 428 -- -- 20 40 40 40 36 40 40 37 37 34 33 30 1

Total Recovered Copper Mlb 945 -- -- 45 88 88 88 80 88 87 82 81 75 73 66 3 No Royalty Mlb 283 -- -- 0 0 6 32 16 21 19 28 46 39 31 42 3 Marimaca Mlb 492 -- -- 44 87 78 44 51 43 37 35 7 23 35 7 0 La Atomica Mlb 169 -- -- 1 1 3 13 13 24 31 19 27 13 7 17 0 Total Payable Copper 100% Mlb 945 -- -- 45 88 88 88 80 88 87 82 81 75 73 66 3

Macro Assumptions

Copper Price $100/t $3.15/lb US$/lb. $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 $3.20 Total Gross Revenue US$mm $3,018 -- -- $144 $282 $282 $281 $255 $282 $278 $262 $257 $238 $234 $211 $10

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Net Return

Total Recovered Copper kt Cu 428 -- -- 20 40 40 40 36 40 40 37 37 34 33 30 1 Total Payable Copper Mlb 945 -- -- 45 88 88 88 80 88 87 82 81 75 73 66 3

Total Gross Revenue US$mm $3,018 -- -- $144 $282 $282 $281 $255 $282 $278 $262 $257 $238 $234 $211 $10 Offtake Charges $0.0/lb US$mm ------Transport Costs $2.5/t Cu US$mm $1 -- -- $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.0 Revenue Less Offsite Costs US$mm $3,017 -- -- $144 $282 $282 $281 $255 $282 $278 $262 $257 $238 $234 $211 $10

Marimaca Royalty 0.5% US$mm $8 -- -- $0.7 $1.4 $1.3 $0.7 $0.8 $0.7 $0.6 $0.6 $0.1 $0.4 $0.6 $0.1 $0.0 La Atomica Royalty 1.0% US$mm $5 -- -- $0.0 $0.0 $0.1 $0.4 $0.4 $0.8 $1.0 $0.6 $0.9 $0.4 $0.2 $0.5 $0.0 Total Royalty US$mm $13.3 -- -- $0.7 $1.4 $1.4 $1.1 $1.2 $1.5 $1.6 $1.2 $1.0 $0.8 $0.8 $0.7 $0.0

Total Net Revenue US$mm $3,004 -- -- $143 $280 $280 $280 $254 $280 $277 $261 $256 $237 $233 $211 $10

Operating Costs

Mining Cost US$mm $418 – – $32 $37 $34 $39 $37 $38 $39 $34 $34 $35 $32 $26 – Processing Cost US$mm $648 – – $43 $52 $53 $44 $40 $62 $59 $60 $59 $58 $60 $56 – G&A $0.54/t US$mm $71 – – $5.1 $4.2 $4.9 $5.4 $3.2 $8.1 $6.2 $7.3 $6.5 $6.1 $7.7 $5.9 – Sensitivity Total Operating Costs – US$mm $1,136 -- -- $80 $93 $92 $89 $80 $108 $104 $102 $100 $99 $100 $88 --

Operating Costs per Tonne Processed US$/t Processed $8.68 -- -- $10.35 $11.86 $10.17 $8.84 $13.51 $7.21 $9.09 $7.52 $8.29 $8.80 $6.98 $8.11 --

Cash Costs

Cash Cost * US$/lb Cu $1.22 -- -- $1.80 $1.07 $1.06 $1.02 $1.01 $1.25 $1.22 $1.26 $1.25 $1.34 $1.38 $1.34 $0.00 All-in Sustaining Cost (AISC) ** US$/lb Cu $1.29 -- -- $2.05 $1.18 $1.16 $1.37 $1.07 $1.25 $1.23 $1.26 $1.25 $1.34 $1.38 $1.34 $0.00

* Cash costs consist of mining costs, processing costs, mine-level G&A, transpo rt cost, refining charges and royalties ** AISC includes cash costs plus sustaining capital

Capital Expenditures Sensitivity Total Initial Capital – US$mm $285 $85 $199 ------

Total Sustaining Capital US$mm $66 -- -- $12 $9 $9 $31 $4 -- $1 -- -- $0 ------

Change in Working Capital

Operating Expenses US$mm -- -- $80 $93 $92 $89 $80 $108 $104 $102 $100 $99 $100 $88 --

Change in Working Capital 25% -- -- $20 $3 ($0) ($1) ($2) $7 ($1) ($1) ($1) ($0) $0 ($3) ($22)

Cash Taxes

Inflation 2.0% 1.00x 1.02x 1.04x 1.06x 1.08x 1.10x 1.13x 1.15x 1.17x 1.20x 1.22x 1.24x 1.27x 1.29x 1.32x

Taxes

Taxable Income US$mm nom $1,766 – – ($53.5) $100.9 $127.3 $193.4 $168.6 $164.5 $185.2 $186.9 $188.3 $170.0 $165.5 $156.4 $12.9 Tax Losses used US$mm nom $143 – – – $97.3 $5.5 $5.7 $5.0 $4.7 $4.8 $4.5 $4.5 $3.5 $3.9 $3.7 – Taxable Profit US$mm nom $1,623 – – ($53.5) $3.6 $121.8 $187.8 $163.7 $159.8 $180.4 $182.4 $183.8 $166.5 $161.6 $152.7 $12.9

Mining Tax Rate % -- -- 1.5% 4.5% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 2.5% 2.5% 2.5% -- Mining Tax US$mm nom $54 – – $0.6 $8.1 $5.5 $5.7 $5.0 $4.7 $4.8 $4.5 $4.5 $3.5 $3.9 $3.7 –

Corporate Tax Net Mining Tax 27.0% US$mm nom $453 – – – $1.0 $32.9 $50.7 $44.2 $43.2 $48.7 $49.2 $49.6 $44.9 $43.6 $41.2 $3.5

Cash Taxes US$mm nom $507 – – $0.6 $9.1 $38.4 $56.3 $49.2 $47.9 $53.5 $53.7 $54.1 $48.5 $47.5 $44.9 $3.5 Total Cash Taxes Real $ US$mm $430 -- -- $0.6 $8.6 $35.4 $51.0 $43.7 $41.7 $45.7 $45.0 $44.4 $39.0 $37.5 $34.7 $2.6

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22.8 Sensitivity Analysis

Table 22-4: shows the project’s pre-tax sensitivity, and Table 22-5 shows the project’s post- tax sensitivity results. The analysis revealed that the project is most sensitive to revenue attributes such as copper price and head grade followed by operating cost and capital cost.

Table 22-3 Sensitivity Summary

Post- Copper Post-Tax Post-Tax Post-Tax Post-Tax Tax IRR Price NPV8% NPV8% NPV8% NPV8% NPV8% Operation Operation Capital Capital Base al al Base $/Lb cost (- cost Case cost (- cost Case 10%) (+10%) 10%) (+10%) $2.85 $407 $434 $380 $455 $359 28.6% $3.00 $465 $492 $438 $513 $417 31.1% $3.15 $524 $551 $497 $571 $476 33.5% $3.30 $582 $609 $555 $629 $534 35.7% $3.45 $640 $667 $613 $687 $592 37.9%

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Table 22-4: Pre-tax sensitivity Pre-Tax NPV Sensitivity To Discount Rate Pre-Tax IRR Sensitivity To Discount Rate

Copper Price (US$/oz) Copper Price (US$/oz) $757 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 39.9% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 1.0% $1,125 $1,256 $1,387 $1,518 $1,649 $1,780 1.0% 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% 3.0% $935 $1,049 $1,162 $1,276 $1,389 $1,503 3.0% 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% 8.0% $593 $675 $757 $838 $920 $1,002 8.0% 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% 10.0% $494 $567 $639 $711 $784 $856 10.0% 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% Discount Rate 12.0% $411 $475 $540 $604 $669 $733 Discount Rate 12.0% 34.2% 37.1% 39.9% 42.7% 45.4% 48.0%

Pre-Tax NPV Sensitivity To Opex Pre-Tax IRR Sensitivity To Opex

Copper Price (US$/oz) Copper Price (US$/oz) $757 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 39.9% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (20.0%) $726 $808 $889 $971 $1,053 $1,134 (20.0%) 39.2% 42.0% 44.7% 47.4% 50.0% 52.5% (10.0%) $660 $741 $823 $905 $986 $1,068 (10.0%) 36.7% 39.5% 42.3% 45.0% 47.7% 50.3% -- $593 $675 $757 $838 $920 $1,002 -- 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% Opex Opex 10.0% $527 $608 $690 $772 $853 $935 10.0% 31.6% 34.6% 37.5% 40.3% 43.0% 45.7% 20.0% $460 $542 $624 $705 $787 $869 20.0% 29.0% 32.0% 35.0% 37.9% 40.7% 43.4%

Pre-Tax NPV Sensitivity To Initial Capex Pre-Tax IRR Sensitivity To Initial Capex

Copper Price (US$/oz) Copper Price (US$/oz) $757 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 39.9% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (20.0%) $647 $729 $810 $892 $974 $1,055 (20.0%) 41.1% 44.4% 47.7% 50.8% 53.9% 56.9% (10.0%) $620 $702 $784 $865 $947 $1,029 (10.0%) 37.3% 40.4% 43.5% 46.4% 49.3% 52.0% -- $593 $675 $757 $838 $920 $1,002 -- 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% 10.0% $566 $648 $730 $811 $893 $975 10.0% 31.4% 34.2% 36.9% 39.5% 42.0% 44.5% Initial Capex Initial Capex 20.0% $539 $621 $703 $784 $866 $948 20.0% 29.1% 31.7% 34.2% 36.7% 39.1% 41.5%

Pre-Tax NPV Sensitivity To Head Grade Pre-Tax IRR Sensitivity To Head Grade

Copper Price (US$/oz) Copper Price (US$/oz) $757 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 39.9% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (5.0%) $514 $592 $670 $747 $825 $902 (5.0%) 31.2% 34.1% 36.9% 39.6% 42.2% 44.8% (2.5%) $554 $633 $713 $793 $872 $952 (2.5%) 32.7% 35.6% 38.4% 41.1% 43.8% 46.4% -- $593 $675 $757 $838 $920 $1,002 -- 34.2% 37.1% 39.9% 42.7% 45.4% 48.0% 2.5% $633 $716 $800 $884 $967 $1,051 2.5% 35.6% 38.5% 41.4% 44.2% 46.9% 49.5% Head Grade Head Head Grade Head 5.0% $672 $758 $843 $929 $1,015 $1,101 5.0% 37.0% 40.0% 42.8% 45.7% 48.4% 51.1% Source: Ausenco

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Table 22-5 Post-tax sensitivity Post-Tax NPV Sensitivity To Discount Rate Post-Tax IRR Sensitivity To Discount Rate

Copper Price (US$/oz) Copper Price (US$/oz) $524 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 33.5% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 1.0% $805 $898 $991 $1,084 $1,177 $1,270 1.0% 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% 3.0% $663 $744 $825 $905 $986 $1,066 3.0% 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% 8.0% $407 $465 $524 $582 $640 $698 8.0% 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% 10.0% $333 $385 $436 $488 $539 $591 10.0% 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% DiscountRate 12.0% $270 $317 $363 $409 $454 $500 DiscountRate 12.0% 28.6% 31.1% 33.5% 35.7% 37.9% 40.1%

Post-Tax NPV Sensitivity To Opex Post-Tax IRR Sensitivity To Opex

Copper Price (US$/oz) Copper Price (US$/oz) $524 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 33.5% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (20.0%) $503 $561 $619 $677 $735 $793 (20.0%) 32.9% 35.2% 37.5% 39.7% 41.8% 43.9% (10.0%) $455 $513 $571 $629 $687 $745 (10.0%) 30.8% 33.2% 35.5% 37.7% 39.9% 42.0% -- $407 $465 $524 $582 $640 $698 -- 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% Opex Opex 10.0% $359 $417 $476 $534 $592 $650 10.0% 26.4% 28.9% 31.4% 33.7% 36.0% 38.2% 20.0% $311 $370 $428 $486 $544 $602 20.0% 24.2% 26.7% 29.2% 31.7% 34.0% 36.2%

Post-Tax NPV Sensitivity To Initial Capex Post-Tax IRR Sensitivity To Initial Capex

Copper Price (US$/oz) Copper Price (US$/oz) $524 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 33.5% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (20.0%) $461 $519 $578 $636 $694 $752 (20.0%) 35.2% 38.0% 40.8% 43.4% 45.9% 48.4% (10.0%) $434 $492 $551 $609 $667 $725 (10.0%) 31.6% 34.3% 36.8% 39.2% 41.6% 43.9% -- $407 $465 $524 $582 $640 $698 -- 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% 10.0% $380 $438 $497 $555 $613 $671 10.0% 26.0% 28.3% 30.6% 32.7% 34.8% 36.9% InitialCapex InitialCapex 20.0% $353 $411 $470 $528 $586 $644 20.0% 23.7% 25.9% 28.1% 30.1% 32.1% 34.1%

Post-Tax NPV Sensitivity To Head Grade Post-Tax IRR Sensitivity To Head Grade

Copper Price (US$/oz) Copper Price (US$/oz) $524 $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 33.5% $2.85 $3.00 $3.15 $3.30 $3.45 $3.60 (5.0%) $353 $408 $464 $519 $575 $630 (5.0%) 26.2% 28.7% 31.0% 33.3% 35.5% 37.6% (2.5%) $380 $437 $494 $551 $608 $665 (2.5%) 27.5% 29.9% 32.3% 34.6% 36.8% 38.9% -- $407 $465 $524 $582 $640 $698 -- 28.6% 31.1% 33.5% 35.7% 37.9% 40.1% 2.5% $431 $491 $550 $609 $668 $727 2.5% 29.6% 32.1% 34.5% 36.8% 39.0% 41.2% Head Grade Head Grade 5.0% $459 $520 $581 $641 $701 $762 5.0% 30.8% 33.3% 35.7% 38.0% 40.2% 42.5% Source: Ausenco

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23 Adjacent Properties

This section is not relevant to this Report.

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24 Other Relevant Data and Information

This section is not relevant to this Report.

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25 Interpretation and Conclusions

25.1 Introduction

The QPs note the following interpretations and conclusions in their respective areas of expertise, based on the review of data available for this Report.

25.2 Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements

The Project is held 100% by Marimaca Copper. Marimaca Copper has four Chilean subsidiaries that have actual, or eventual, rights over various mining properties that make up the Project, including MCAL, Newco Marimaca, Compañía Ivan, and Rayrock.

Information obtained from experts retained by Marimaca Copper supports that the support that the mineral tenure held is valid and is sufficient to support a declaration of Mineral Resources. Through direct acquisition and option agreements, Marimaca Copper holds 100% of 385 granted concessions and concession applications, covering an area of 74,248 ha.

A number of agreements have been entered into, which require staged payments that must be met. As at the Report effective date, all required payments to that date had been made.

Marimaca Copper holds no water rights in the Project area.

The Project is subject to a number of NSR royalties, which range from 1–2%. Marimaca Copper has the right to buy back some of the NSR percentages for some of the royalties.

To the extent known to the QP, there are no other significant factors and risks that may affect access, title, or the right or ability to perform work on the Project that have not been discussed in this Report.

25.3 Geology and Mineralization

The Marimaca deposit appears to be a new deposit style and does not readily conform to any of the major published geological models. It has affinities with vein-style IOCG deposits and “manto-type” mineralization styles.

The geological understanding of the settings, lithologies, and structural and alteration controls on mineralization in the different zones is sufficient to support estimation of Mineral Resources. The geological knowledge of the area is also considered sufficiently acceptable to reliably inform conceptual mine planning.

The mineralization style and setting are well understood and can support declaration of Mineral Resources.

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25.4 Exploration, Drilling and Analytical Data Collection in Support of Mineral Resource Estimation

The exploration programs completed to date are appropriate for the deposit style.

Sampling methods are acceptable for Mineral Resource estimation.

Sample preparation, analysis and security are generally performed in accordance with exploration best practices and industry standards.

The quantity and quality of the lithological, geotechnical, collar and down-hole survey data collected during the exploration and delineation drilling programs are sufficient to support Mineral Resource estimation. The collected sample data adequately reflect deposit dimensions, true widths of mineralization, and the style of the deposits. Sampling is representative of the copper grades, reflecting areas of higher and lower grades.

The QA/QC programs adequately address issues of precision, accuracy, and contamination. Drilling programs typically included blanks, duplicates and SRM samples. QA/QC submission rates meet industry-accepted standards.

The data verification programs concluded that the data collected from the Project adequately support the geological interpretations and constitute a database of sufficient quality to support the use of the data in Mineral Resource estimation.

25.5 Metallurgical Test Work

Metallurgical test work and associated analytical procedures are appropriate to the mineralization type, appropriate to establish the conceptual processing routes, and were performed using samples that are typical of the mineralization styles.

Recovery factors estimated are based on appropriate metallurgical test work.

No deleterious elements are known from the processing perspective.

25.6 Mineral Resource Estimates

Mineral Resources are reported using the 2014 CIM Definition Standards and assume open pit mining methods.

Areas of uncertainty that may materially impact the Mineral Resource estimates include: changes to long-term copper price and exchange rate assumptions; changes in local interpretations of mineralization geometry and continuity of mineralized zones; changes to geological and grade shape and geological and grade continuity assumptions; changes to interpretations of the structural zones; changes to the density values applied as averages to the estimated domains; changes to metallurgical recovery assumptions; changes to the input assumptions used to derive the conceptual open pit used to constrain the estimate; changes to the cut-off grades applied to the estimates; variations in geotechnical, hydrogeological and mining assumptions; forecast dilution; and changes to environmental, permitting and social license assumptions.

25.7 Mine Plan

The 2020 PEA mine plan is based on the Mineral Resource estimate. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

Page | 25-232

A conventional open pit truck and shovel operation is planned. Pit slope angles, ranging from 42–52º are considered reasonable. Eight pit phases are planned. Ramp and haul road designs are conventional. The mine plan was tailored toward a copper cathode production rate of 40,000 t/y. Three separate mining rates will be used during commercial production. An initial three-year period will mine at a rate of 14.5 Mt/y. This will be followed by a two-year period that will mine at a rate of 18.54 Mt/y, which will meet the initial plant throughput capacity of 5.4 Mt/y. To meet the second plant throughput capacity rate of 9.0 Mt/y a total mining rate of 23.5 Mt/y is required for the remainder of the mine life.

Two waste rock storages facilities, a ROM leach pad and a low-grade stockpile will be constructed.

25.8 Recovery Plan

The recovery plan assumes a conventional crush and ROM leach operation, using conventional equipment and processes. The process will be a conventional salt acid leaching process consisting of a comminution circuit, crush leach and ROM leach facilities, SX and EW to produce Grade-A copper cathodes. All leaching will be performed using seawater-based process solutions, with sulphuric acid and salt addition to both acid-leach the copper oxide mineralization and chloride-leach the sulphide copper mineralization sent to crush leaching. Similar salt acid leach processes are operated for copper recovery at Antofagasta Minerals’ Antucoya and Encuentro mining operations

25.9 Infrastructure

Infrastructure requirements are conventional for a leach operation.

25.10 Environmental, Permitting and Social Considerations

The Project has a DIA, granted for an earlier iteration. Additional baseline testwork will be required in support of either an EIA or amended DIA, depending on which study type is requested by the Chilean regulatory authorities. The Project will also require various PAS that will have to be included in the new DIA or EIA document. The Project as described in the 2020 PEA will have to identify and classify the PSs needed along with critical path permits.

The Project will require a Closure Plan that will need to be approved before construction starts and a bond will be delivered to the Government of Chile during the first year of operation.

The area of influence of the Project the Antofagasta Region, and particularly the communities and cities of Mejillones and Antofagasta. There are no indigenous lands or territories of any kind being claimed in the Project area. To date, Marimaca Copper has not undertaken community consultations. Marimaca Copper has met regularly with authorities, regional and community services as well as with regional and national professional organizations. Marimaca Copper has contacted authorities from government, municipality, business and trade associations, and other NGOs in the Region.

25.11 Markets and Contracts

Accordingly, for the purpose of the 2020 PEA, it is appropriate to assume that the product can be sold and at standard market rates. No specific marketing study was conducted for the study.

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Additionally, despite acid deficits in Chile, there is ample supply of acid on world markets, transparently priced and widely trade with delivery to Mejillones, to sustain production at Marimaca.

25.12 Capital Cost Estimate

Initial capital costs are $284.7 M, with sustaining costs of $66 M, for a LOM total capital cost of $350.7 million.

25.13 Operating Cost Estimate

The average operating cost is $8.68/t of processed mineralized material (ROM and crush leach); offsite transport and royalties is $0.11/t of processed mineralized material. The operating costs are estimated C1 cash costs over the life of mine, at an average of $1.22/lb. C1 cash costs consist of mining costs, processing costs, site G&A and transport charges and royalties. AISC are estimated at an average of $1.29/lb. AISC includes cash costs plus sustaining capital.

25.14 Economic Analysis

The results of the 2020 PEA cash flow evaluation are:

 The pre-tax NPV discounted at 8% is $757 M; the internal rate of return IRR is 39.9%; and payback period is 2.4 years.  On an after-tax basis, the NPV discounted at 8% is $524 M; the IRR is 33.5%; and the payback period is 2.6 years. The post-tax economics have been based on a flat tax rate provided by third-party tax consultants.

25.15 Sensitivity Analysis

The Project envisaged in the 2020 PEA is most sensitive, in order, to revenue attributes such as copper price followed by operating cost, capital cost and grade.

25.16 Risks and Opportunities

The following risks were identified

Page | 25-234

 Unexpected variations in quantity of mineralised material, grade or recovery rates  Geotechnical considerations during mining being different from what was assumed  Failure of mining methods to operate as anticipated  Failure of plant, equipment, or processes to operate as anticipated  Samples analysed in the Geomet I, II and III metallurgical programs correspond to oxide minerals. There is a risk that not all of the leachable material in the deposit has been identified.   ROM leaching definition was estimated from a benchmark condition, testwork is required to confirm recoveries.  The currently proposed copper recoveries used in the 2020 PEA is based on average values for each type of mineralized zone. There is a risk of low accuracy in the copper recoveries associated to the mine plan.   Heap leach defined operating conditions (heap leach height) needs to be confirmed with additional testwork.  Changes to assumptions as to the feasibility of electrical power connection to the existing powerline, and the power rates used in the operating cost estimates and financial analysis  Changes to assumptions as to the feasibility of Seawater pipeline connection to the existing seawater pipeline, and the power rates used in the operating cost estimates and financial analysis  Unrecognised environmental, permitting, or social risks  Unanticipated reclamation expenses  Changes to interest rates  Changes to tax rates

The following opportunities were identified

 Significant increase in mineralization, as further exploration activities are conducted adjacent the current deposit and in the surrounding district.  Conduct a trade-off study for assessing a better economical option of transporting mined mineralized material by conveyor belt rather than hauling by truck from the pit.   Occurrence of positive variations in quantity of mineralised material, grade or recovery rates after an infill drilling campaign is conducted.  Geotechnical considerations during mining being better than what was assumed. This would be confirmed after geotechnical drilling is conducted.  Explore even higher leach pad heights after conducting further metalurgical testwork, which could lead to further reduction on the leaching area footprint, thus reducing capital costs.  There is a potentially additional copper leachable material like secondary copper sulphide and mixed that need to be tested and analysed in the next experimental plan, which could lead to an overall increase in average recoveries.  Investigate the potential reduction on the proposed acid consumption unit rate by adding a lower acid concentration solution to the pads.  Conduct detailed topographic survey, which will lead to a better defition of cut and fill costs, as this is a major component of the construction costs.

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 Investigate the use of alternative power sources, such as solar power, which could possibly lower the power costs.  Advance on the water contract negotiations, which could lead to a unit cost reduction once a firmer agreement is made.

25.17 Conclusions

Under the assumptions in this Report, the 2020 PEA returns a positive economic return.

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26 Recommendations

26.1 Introduction

The 2020 PEA yielded a positive result and indicates Marimaca is a project which should be advanced to the next phase of development. Given the Project is well advanced from many aspects, it is recommended that the Project progress directly to Feasibility Study, but that a detailed option trade-off study should be completed to ensure that consideration is given to alternative development strategies which may further enhance the value of the Project.

The project is well advanced from a metallurgical perspective, but it is recommended to complete an additional phase of testing to further refine and optimize design parameters for the Project.

Infill drilling will be required to move the material within the Mineral Resource Estimate, which is currently classified within the inferred category, to the higher confidence categories for the purposes of the Feasibility Study and the eventual declaration of Mineral Reserves.

To complete the recommended list of activities Marimaca Copper estimates that $10M to $12M will be required.

26.2 Geology

Marimaca Copper should consider generating a set of SRMs from local samples, matrix matched to the mineralization and reflecting deposit grades, for use in future drill campaigns.

26.3 Mining

Geotechnical investigations should be extended to the north area of the pit to validate the recommendations. Stability analysis carried out to the final designed pit suggested some opportunities.

Results of metallurgical test works for recoveries and acid consumptions for both, crush leach and ROM leach processes, may increase the mineral inventory and the pit limits.

26.4 Metallurgy

The main metallurgical recommendations from Section 13 are presented below.

METSIM modelling and metallurgical optimization planning should be conducted to evaluate combinations of operational variables in support of performance optimization. Aspects to examine include granulometry, column heights, agglomeration conditions, and irrigation rates and acidity levels. Other parameters would include review of the copper balance, sulphuric acid, water, NaCl, impurities, solids in each stage of the planned process route.

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Additional testwork should be completed to confirm that ROM leaching of the low-grade mineralization is economically feasible.

26.5 Environmental

 Seismic study  Hydrology and hydrogeology  Geomorphology and geological risk  Geotechnical studies  Condemnation drilling

Additional evaluation of the potential for PAG, ML and groundwater mobilization of contaminants should be conducted to reflect the 2020 PEA project footprint. Such samples should be taken from exploration drill holes.

Conduct an early social perception study on the local communities to determine their perception/expectations about the future project. This will help on defining any compensation plan that should be taken into account by the company to achieve in an early manner the local community full support for building the project.

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27 References

1. DIA, Declaracion de Impacto Ambiental Environmental Impact Declaration (DIA in the Spanish acronym), December 2017 2. Resoluciones de Calificación Ambiental (RCA N°0129/2018). 3. Marimaca Mining Project Legal Opinion, April 2020, Bofill Mir & Alvarez Jana 4. The Sulphuric Acid Market Chile -Perú, July 2020, Jorge Jorrat 5. Tax aspects for the financial model of the Marimaca project, July 2020, Ernst and Young 6. “Mercado chileno del ácido al 2027”, 2018, “Dirección de Estudios y Politicas Publicas”. 7. “Cyanurable Copper Estimate for the Marimaca Copper Project, Antofagasta Province, Region II, Chile” elaborated by NCL Engineering and Construction SpA in January 2020.

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