June, 2019 - Technical Report Santa Barbara Property, Colombia
GEOLOGICAL REPORT ON THE SANTA BARBARA PROPERTY
Licence IEV-16061C2
San Martin de Loba Municipality Bolivar Department (Colombia)
-Prepared for-
Malabar Gold Corp.
2001-1177 West Hastings Street Vancouver, British Columbia, V6E 2K3
-Prepared by-
T.N.J. Hughes, P. Geo., P. Geol. Antediluvial Consulting Inc.
Vancouver, British Columbia, Canada
26th June, 2019
June, 2019 - Geological Report Santa Barbara Property, Colombia
GEOLOGICAL REPORT ON THE SANTA BARBARA PROPERTY
Table of Contents
1 EXECUTIVE SUMMARY ...... 1 2. INTRODUCTION & TERMS OF REFERENCE ...... 3 3. RELIANCE ON OTHER EXPERTS ...... 6 4. PROPERTY DESCRIPTION AND LOCATION ...... 7 4.2 Legal Framework ...... 11 5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 23 6. HISTORY ...... 24 7. GEOLOGICAL SETTING & MINERALISATION ...... 25 7.2 PROPERTY GEOLOGY ...... 43 8. DEPOSIT TYPES ...... 50 9. SANTA BARBARA PROPERTY EXPLORATION ...... 51 9.2 Exploration and Prospecting Results ...... 51 10. DRILLING ...... 56 11. SAMPLE PREPARATION, ANALYSES & SECURITY ...... 56 12. DATA VERIFICATION ...... 56 13. MINERAL PROCESSING & METALLURGICAL TESTING ...... 56 14. MINERAL RESOURCE ESTIMATES ...... 57 15. MARKET STUDIES & CONTRACTS ...... 57 16. ENVIRONMENTAL STUDIES, PERMITTING, & ...... 57 SOCIAL OR COMMUNITY IMPACT ...... 57 17. ADJACENT PROPERTIES ...... 58 18. OTHER RELEVANT DATA & INFORMATION ...... 72 19. INTERPRETATION & CONCLUSIONS ...... 73 20. RECOMMENDATIONS ...... 74 21. REFERENCES ...... 75 22. DATE AND SIGNATURE PAGE...... 80 CERTIFICATE OF QUALIFIED PERSON ...... 81 ASSAY RESULTS ...... 82
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June, 2019 - Geological Report Santa Barbara Property, Colombia LIST OF FIGURES
Figure 1 Property Location Map. Property epicentre – red...... 7 Figure 2 Santa Barbara (Red), within San Martin de Loba Municipality, and Rio Viejo (Blue), Bolivar Department...... 8 Figure 3 Property Location - Red Dot. Rio Viejo - Blue ...... 9 Figure 4 Property Location, with access roads...... 10 Figure 5 Property Title Information ...... 19 Figure 6 IEV16061 Title and Santa Barbara Project area (Title IEV16061C2) locations ...... 20 Figure 7 Title Information including adjacent properties ...... 21 Figure 8 Santa Barbara Property (IEV-16061C2) ...... 21 Figure 9 Title/Holding Information ...... 22 Figure 10 Geodynamics of NW South America ...... 25 Figure 11 Tectonic Realms from Cediel et al., 2003 ...... 28 Figure 12 Northern Andean Geology and Property Location ...... 29 Figure 13 Generalised transect across Colombia ...... 30 Figure 14 San Lucas Block ...... 31 Figure 15 Colombian terranes ...... 32 Figure 16 The Chibcha Terrane ...... 33 Figure 17 Regional geology of the SLR and faulting ...... 34 Figure 18 Simplified Kinematics, NW South America ...... 36 Figure 19 Regional Faulting ...... 38 Figure 20 Santa Marta-Bucaramanga Fault system ...... 39 Figure 21 Regional Geology ...... 41 Figures 22, 23 Ingeominas geology Plancha 86. Barranco de Loba...... 44 Figure 23 Chip sample of Esperanza-Barbara Vein ...... 47 Figures 24-26, grabs of high grade sulphidic vein material ...... 47 Figure 25 a,b Property Location, with vein trends...... 53 Figures 26 Overleaf, Sampling Locations ...... 53 Figure 27 A cross-section of the workings ...... 59 Figure 28 La Esperanza mineralisation ...... 60 Figure 29 Level 1 Chip sampling ...... 61 Figure 30 Level 2 Chip sampling Looking South-West ...... 62 Figure 31 Level 2 topography & sampling ...... 62 Figure 32 Level 3 sampling ...... 63 Figure 33 La Cabana ore ...... 64 Figure 34 & Figure 35 2016 main gold vein at La Cabana Gold Mine ...... 65 Figure 36. A flow chart for mill operations (2018) ...... 68 Figure 37 Mill and Processing Plant ...... 69 Figure 38 Camp Site, Office Images from MGC files...... 70 Figure 39, Environmental License approval to operate the mill and plant. From MGC Files, March 2018 ...... 71
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June, 2019 - Geological Report Santa Barbara Property, Colombia LIST OF TABLES
1. Co-ordinates of Title ...... 18 2. Sample Location & Assays 2018 ...... 51 3. Veta Esperanza Access Tunnel Sampling ...... 60 4. Level 0 Sampling ...... 61 5. Level 1 Chip Sampling ...... 61 6. Level 2 Sampling ...... 63 7. Level 3 Sampling ...... 64 8. La Gloria Mining Area Au Results ...... 66 9. Budget ...... 74
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June, 2019 - Geological Report Santa Barbara Property, Colombia
1 EXECUTIVE SUMMARY
At the request of Malabar Gold Corporation, “hereafter ‘MGC’, T. Hughes, P. Geo, P. Geol, a professional geologist and President of Antediluvial Consulting Inc. of Vancouver, B.C., was commissioned to review the geology, mineralization, and mineral potential of Mining Title IEV- 16061C2 , also known as the Santa Barbara Property, identify its merits, propose an appropriate exploration programme and budget for gold exploration and development on the property, and to prepare this Geological Report. The information presented within the report is current to June, 2018.
Exploration, development and construction work continued after June 2018. Information on this is beyond the remit of the author.
The Santa Barbara property, totalling 110.86 ha, is located in the Municipality of San Martin de Loba (Bolivar Department, Colombia), near the town of Pueblito Mejía, some 45 km north-west of the town of Rio Viejo, and approximately 430 km North of the capital, Bogota.
The property is 100% owned by Malabar Gold Corp., (‘MGC’), a B.C. incorporated company, through its Colombian registered subsidiary, Minera La Fortuna SAS.
Information in this report is provided by the former Colombian Institute of Geology and Mining (Ingeominas), the Colombian National Mining Agency ("ANM"), and MGC reports and related geological data, including past exploration work carried out by the company, third party technical reports, and a site visit.
The principal exploration target is orogenic, vein-type gold deposits hosted in the Precambrian, Chibcha terrane gneisses, modified intrusions and younger sediments largely belonging to the San Lucas formation, and Phanerozoic age, arguably Jurassic volcanic rocks and derived sediments. The “orthogneiss” units are weakly foliated, quartzo-feldspathic, banded gneisses and variably modified intermediate intrusions. A lesser proportion of the entire unit is comprised of amphibolitic, hornblende gneissic and granodioritic gneissic rocks. The entire unit is considered to be of Precambrian age, but modification by ?-Triassic age intrusions is significant from a purely geological point of view as well as an economic one.
Gold-bearing veins are comprised mainly of variable amounts of pyrite, sphalerite, galena, chalcopyrite and gold in a gangue of quartz and carbonate. These are hosted within gneisses and intrusions and based on preliminary evidence, may continue vertically into Phanerozoic volcaniclastic sediments.
Field investigations and results from sampling of several mineralised veins on the property indicate a broad structurally defined corridor hosting significant gold mineralisation. Sampling of artisanal mining and minor development work on the main mineralized north-east trending, 70-80o sub- vertically dipping gold bearing vein, ‘Esperanza-Santa Barbara’. 2018 sampling returned grades of 17.88, 14.35 and 27.81 g/t Au.
Preliminary mapping by MGC, suggests a strike extension of the Santa Barbara vein of at least 500 metres. Vein width is variable, ranging from 10 centimetres to 1 metre (true). The vertical extent of
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June, 2019 - Geological Report Santa Barbara Property, Colombia the vein has yet to be defined, but as comparison, gold bearing veins to the north-east, in La Gloria mine area have been mined up to depths greater than 350 metres. Other gold occurrences on the property were identified by MGC and the author of this report.
These other auriferous veins form a parallel striking series with as yet poorly defined strike length and vertical extent, with all having been mined for oxide ore by artisanal mining. Primary ore was not mined due to hardness and processing difficulties.
The area comprising the San Lucas range has an extensive history of vein type and alluvial gold mining dating back to colonial times. In the early 20th century, several European mining companies were active in the district, exploiting mainly vein-type and to a lesser extent placer gold deposits. Since the 1990’s, the Southern Bolivar region of Colombia has become the largest gold producing region in the country with almost all of it coming from either small, simple artisanal underground mines, or from several larger areas of mechanized alluvial mining (backhoe-pump-classifiers), with larger, more mechanized mines such as El Avión or El Fogeo.
The level of exploration on the property is effectively early stage exploration, with good potential to host significant mineralisation. Geological investigation, preliminary sampling and previous artisanal underground work indicate the property has good potential to host economic gold mineralisation. Continued development and additional exploration are recommended.
The author recommends following exploration and development work:
Extension of the underground working on the Esperanza-Santa Barbara vein, with a new level tunnelled into primary ore. This will facilitate additional sampling of oxidised and primary ore exposed during earlier work, providing not only more efficient removal of ore but necessary emergency access and ventilation to satisfy Colombian mining regulations.
Tracing by trenching of the surface expression to the vein, downhill, north-eastwards.
Systematic surface and underground sampling of the parallel vein system. The results should provide priority targets for additional underground development, with a staged process to mine development thereon. Trenching and underground work is favoured over any drilling as this provides a more reliable, accurate gold grade, better recoveries, and in the medium-term, is more economic.
A total budget of CAN $500,000 is estimated for execution of this programme.
Reporting of post-2018 property visit is beyond the remit of this report. Information may be sourced from internal exploration, development and production reports.
This Geological Report is made pursuant to Canadian law and professional practice, and not that of any other country, is neither a NI 43-101F1 report, nor does it comply with NI 43-101. It is not to be used to satisfy or meet regulatory requirements for future filing within Canada. This report may not be relied upon for any purpose such as regulatory filings or third-party reliance, except with the author’s prior approval in writing and with such restrictions as the author considers appropriate in the circumstances.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
2. INTRODUCTION & TERMS OF REFERENCE
2.1 Issuer
This Geological Report has been prepared by T. Hughes, (Antediluvial Consulting Inc.), independent Qualified Person, at the request of Malabar Gold Corp., a company registered in British Columbia, Canada, with address at 2011-1177 West Hastings Street, Vancouver, British Columbia.
2.2 Terms of Reference
At the request of Malabar Gold Corp., hereafter ‘MGC’, the author was retained for the purposes of preparing a Geological Report on the Santa Barbara property. The report’s scope covers a compilation of previous work carried out on the property, with associated results, and includes information from other parties. Also, the project setting, historical exploration and geology are presented, with interpretations, conclusions and recommendations for future work on the Title.
T. Hughes, author of the report, is a Qualified Person, and is a member in good standing of appropriate professional institutions. The property visit, accompanied by R. Sanabria, Principal of MGC, took place from 17th-20th April, 2018.
Technical information within the report is current to June 2018. Reporting of post-2018 property visit is beyond the remit of this report. Such information may be sourced from internal exploration, development and production reports.
DISCLAIMER: This Geological Report is made pursuant to Canadian law and professional practice, and not that of any other country, is neither a NI 43-101F1 report, nor does it comply with NI 43- 101. It is not to be used to satisfy or meet regulatory requirements for future filing within Canada. This report may not be relied upon for any purpose such as regulatory filings or third-party reliance, except with the author’s prior approval in writing and with such restrictions as the author considers appropriate in the circumstances.
2.3 Sources of Information
Information has been personally obtained, with additional material provided by Malabar Gold Corp. and various government, industry, and research (‘third party’) sources. The author has relied on Malabar Gold Corp. (hereafter ‘MGC’) to provide the status of any and all related legal agreements and title, and the furnishing of Colombian legal information in general as it pertains to shareholder information, licensing, permitting, exploitation, taxation, liability, environmental concerns and all relevant legal documents.
The Metric System is the primary measurement system used in this Report and is generally expressed in kilometres, metres and centimetres; volume is expressed as cubic metres, mass expressed as metric tonnes, area as hectares, and silver gold grades are reported as either ounce per ton (“oz/ton”) or grams per metric tonne (“g/t”). Historic gold values are presented as originally reported and converted to g/t if required. A conversion factor of 34.28 is used to convert ounces per short ton (“oz/ton”) to g/t. Currency is reported as Canadian dollars unless otherwise noted. Universal Transverse Mercator (UTM) coordinates are provided in the datum of NAD 83, Zone 18N 3
June, 2019 - Geological Report Santa Barbara Property, Colombia and Sheet number 300 IV-C and 321 II-A from Instituto Geográfico Agustín Codazzi (IGAC). Conversion factors utilized in this report include: • 1 troy ounce/ton = 34.285714 grams/tonne • 1 gram/tonne = 0.029167 troy ounces/ton • 1 troy ounce = 31.103477 grams • 1 gram = 0.032151 troy ounces
Table 1. List of Abbreviations
Description Abbreviation
Atomic absorption spectrophotometer AAS Grams gold (silver) per metric tonne Au (Ag) g/t Canadian National Instrument 43‐101 NI 43‐101 Centimetre(s) cm Republic of Colombia Colombia Colombian Peso COP Certified Standard Reference Materials CSRM Degree(s) ° Degrees Celsius °C United States Dollar(s) US$ Canadian Dollar(s) CAD$ Environmental Impact Study (Estudio de Impacto Ambiental) EIA Environmental Management Plan (Plan de Manejo Ambiental) PMA Gram(s) g Grams per metric tonne g/t Greater than > Hectare(s) ha Inductively coupled plasma atomic emission spectrometer ICP‐AES Instituto Colombiano de Geología y Minería Ingeominas Instituto Geográfico Agustín Codazzi IGAC International Organization for Standardization ISO Kilogram(s) kg Kilometre(s) km 2 Square kilometre (s) km Less than < Metre(s) m Million tonnes Mt Million Troy ounces Moz Million years ago Ma Million years’ time span My Millimetre(s) mm Mine Plan PTO
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June, 2019 - Geological Report Santa Barbara Property, Colombia Mining Energy Planning Unit (Unidad de Planeacion Minero Energetica) UPME Ministry of Mines and Energy (Ministerio de Minas y Energia) MME National Mining Registry (Registro Minero Nacional) RMN Ounces (Troy) oz Parts per billion ppb Parts per million ppm Plus or minus ±
Quality Assurance/Quality Control QA‐QC Short ton (2000 pounds) st Sistema de Información Minero Colombiano SIMCO Specific Gravity SG Système International d'Unités (International System of Units) SI Tonne (metric) t Tonnes (metric) per day tpd Troy ounce per short ton oz/t Toronto Venture Stock Exchange TSX-V
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June, 2019 - Geological Report Santa Barbara Property, Colombia
3. RELIANCE ON OTHER EXPERTS
Information on title ownership and title location was provided by R. Sanabria, Principal of Malabar Gold Corp., (‘MGC’), and was in part sourced from the Agencia Nacional de Mineria (Colombian Mining Agency) and the Catastro Minero Colombiano online portal. The author has not independently reviewed the Mining Title, nor independently verified the ownership or underlying property agreements. Further, the author has fully relied upon, and disclaims responsibility for, information derived from any legal experts for this information.
Geological information was obtained from the Colombian Geological Survey (former ‘Ingeominas), the National Mining Agency (Agencia Nacional de Mineria) files, and third-party reports, both local and regional. The author has not verified the contents of these reports and presumes such information to be correct, and disclaims any responsibility for the content and accuracy of the data. Personal files on local and regional geology were used by the author, with, in all cases, caution taken in interpreting and correlating data to support observations and conclusions.
Additional information pertaining to environmental legislation and requirements is based on documents supplied by MGC. Information was received in May and June, 2018. Updated title information regarding the issuance of a Plate Number for the Santa Barbara property, was received in May, 2019.
This report relies on archival information from the former Colombian Institute of Geology and Mining (INGEOMINAS). Such information includes previous geological reports, recorded mineral occurrences in the property area, government produced maps and documents, and information provided by the website www.ingeominas.gov.co. The author has not verified the content of the previously mentioned documents, and assumes the information contained is correct and true. It is the author's opinion that the content of government produced reports is accurate. The author disclaims any responsibility for the source of the data. The regional geological context is derived from published reports by the Colombian government, research, academic and industry geologists, and wherever possible, is attributed. The author does not claim responsibility for the accuracy of information provided within these sources, as part of this report is based on them. There is no reason to believe that all or part of this information is incorrect, and discussion is included where discrepancies are found. The author has had access to third party reports on the property and there is no reason to believe the data is incorrect, but caution has been taken during its interpretation and is included only when supported by other external sources.
This Report was prepared by Antediluvial Consulting on behalf of MGC, for their ability to raise funds to further explore and develop the Property. The information, conclusions and recommendations contained herein are based largely on a review of digital and hard copy data and information previously completed by MGC. Additional information is from personal work and observations carried out on and around the Santa Barbara property.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
4. PROPERTY DESCRIPTION AND LOCATION
4.1 The 1.1086 km2 Santa Barbara property is located in the Municipality of San Martin de Loba, Bolivar Department, approximately 35 km West of the town of Rio Viejo, and 55 km from La Gloria, on the Magdalena River, East and South to the regional centre of Aguachica, Cesar Department. From Aguachica, on Hwy 45, it is 170 km South to Bucaramanga, Santander. The Latitude and Longitude of the Property is approximately 8º38'50”N and 74º 05' 25”W (Datum UTM WGS 84 Zone 18N). The Property is located in Sheet number 65IIIA, Instituto Geográfico Agustín Codazzi, or ‘IGAC’).
Figure 1 Property Location Map. Property epicentre – red.
BUCARAMANGA
BOGOTA
PROPERTY LOCATION
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June, 2019 - Geological Report Santa Barbara Property, Colombia
CARTAGENA
Figure 2 Santa Barbara (Red), within San Martin de Loba Municipality, and Rio Viejo (Blue), Bolivar Department.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
Figure 3 Property Location - Red Dot. Rio Viejo - Blue
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June, 2019 - Geological Report Santa Barbara Property, Colombia
Figure 4 Property Location, with access roads
A paved highway from Aguachica extends to the turnoff to La Gloria, on the banks of the Magdalena River, with a ferry across to Rio Viejo, on the Brazo Morales, a tributary of the Magdalena. From there, through Rio Viejo to the property, there is a network of unpaved rural roads leading to and past the property. Northwards of the property, the unpaved road continues past Pueblito Mejia, on to San Martin de Loba, and ultimately, via ferry, across the Magdalena River, to El Banco.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
4.2 Legal Framework
Mining in Colombia is governed primarily by The Constitution of Colombia, articles 330, 332, 360 and 361 concerning subsoil resources, and Mining Law 685 of 2001. The latter was modified by Mining Law 1382 of February 9th, 2010, which was annulled on the 11th May, 2011. A two-year deadline to pass a new law lapsed, resulting in expiration of the Law, and reversion to Mining Law 685 in 2013. Law 1450 of 2011, a new National Development Plan, included changes to another annulled Law, 1382, specifically article 108, dealing with extensions to exploration periods.
With no new Law passed, instead were issued several decrees and resolutions to regulate mining. These include:
Decree No. 3,573 of 2011, through which the National Environmental Licensing Authority (ANLA) was created and other provisions are issued
Decree No. 933 of 2013, by means of which provisions on formalising traditional mining are issued and mining glossary definitions are amended.
Decree 935 (9th May, 2013), regulating free areas, proposed evaluation, estimation of economical investment and rejection of proposals.
Decree 943 (14th May, 2013), regulating extensions for stages and concession contracts.
Decree 1300 (21st June, 2013), defining how to support the execution of exploration using an estimate for economical investment.
Decree No. 480 of 2014, by means of which the conditions and requirements for the conclusion and implementation of formalisation of mining subcontracts are regulated
Decree No. 2,041 of 2014, whereby Law No. 99 of 1993 regulates environmental licence
Resolution 428 (23rd June, 2013), adopting the terms of reference, mining environmental guidelines and a minimum exploration programme as elements to evaluate the technical and economic contents of the proposal.
Resolution 551 (9th August, 2013), regulating the financial capacity to explore, develop and extract minerals.
Other laws, decrees and resolutions that regulate issues parts of the mining industry, include the following:
Law No. 99 of 1993 on environmental licences on mining activities Law No. 141 of 1994, which regulates the royalties’ national system, as amended by Legislative Act No. 5 of 2011 Law No. 1,658 of 2013, regarding the use of mercury in mining activities Decree No. 2,811 of 1974 (the Code of Natural Resources)
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June, 2019 - Geological Report Santa Barbara Property, Colombia
Law No. 1,753 of 2015 (the National Development Plan), by which mining is prohibited in moorland and wetland ecosystems.
In a 2014 judgement, the Constitutional Court, declared that the regional authorities (municipalities) must be consulted before the granting of a concession agreement. Also, by means of judgments C- 273 and T-445 of 2016, the Colombian Constitutional Court declared article 37 of the Mining Code (Law 685 of 2001) unenforceable, thus granting to the regional authorities (municipalities) the power to determine whether or not mining activities are allowed in their territory.
The mining authorities in Colombia are as follows:
Ministry of Mines and Energy (Ministerio de Minas y Energia, or ‘MME’), is the highest mining authority in the country. The Mining Law is administered by this Ministry. By Decree 4134 of 2011, Ingeominas, the former mining Authority, was liquidated and divided into two entities: the Agencia Nacional de Minería (National Mining Agency), (Decree No. 4134 of 2011), which grants mining concessions and conducts follow-up and control duties on granted mining titles, and the Servicio Geológico Colombiano (Colombian Geological Survey), which is in charge of performing studies to identify the availability of natural resources in the Colombian subsoil. As this Decree has to be fully enacted, the legal status of Mining Law 685 of 2001 remains unclear.
Agencia Nacional Minera (ANM), formerly part of INGEOMINAS (Instituto Colombiano de Geología y Minería, or ‘Colombian Institute of Geology and Mining’). The MME had delegated the administration of mineral resources to the Agencia Nacional Minera from part of INGEOMINAS and several other mining departments. INGEOMINAS had two departments, the Geological Survey (Servicio Geológico), and the Mines Department (Servicio Minero) which was responsible for all mining contracts except where responsibility for the administration was transferred to the Departmental Mining Delegations. The transition from Ingeominas to the Agencia Nacional Minera (National Mining Agency, ‘ANM’), and Servicio Geologico Nacional (National Geological Services) in order to separate mining functions from the geology department remains a work in progress.
Departmental Mining Delegations (‘Gobernaciones Delegadas’). These administer mining contracts in the Departments with the most mining activity (namely Antioquia, Caldas, Bolívar, Boyacá, Norte Santander and César).
The Mining Energy Planning Unit (Unidad de Planeación Minero Energética, or ‘UPME’), provides technical advice to the MME regarding planning for the development of the mining and energy sector, and maintains the System of Colombian Mining Information (Sistema de Información Minero Colombiano, or ‘SIMCO’).
All mineral resources belong to the state and can be explored and exploited by means of concession contracts granted by it. Under Mining Law 685 of 2001, there is a single type of concession contract covering exploration, construction and mining which is valid for 30 years and can be extended for another 20 or 30 years, depending on whether the contract was signed and registered before or after the amendment of the Mining Law 1382 of February 9, 2010. Concession contract areas are defined on a map with reference to a starting point (‘punto arcifinio’) with distances and bearings, or map co- ordinates.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
The concession is divided into 3 phases: 1. Exploration, with a 3-year term, up to 5 years in a 2-year extension 2. Construction and installation, with a 2-year term which may be extended for an additional year 3. Exploitation, comprising the remainder of the 30-year term. The concession may be extended for an additional 20 years. Under the 2001 Mining Code, the extension is deemed approved whenever the mining authority fails to issue a response before the termination of the phase.
The application process for a concession contract is as follows:
1. Purchase of a PIN (one per concession application). Each PIN costs one minimum salary plus VAT.
2. Submittal of Application. The application form costs COP500,000 (about US$280). Attached to this should be all legal, economic and technical documents including the economic and financial competence of the applicant and the exploration proposal for the requested area. Applications can be made online to the ANM website, www.anm.gov.co. Paper copies must also be filed, with the addition of legal, economic and technical documents including demonstration of the economic capacity of the applicant, and an exploration proposal for the area requested.
3. Under modifications to the Mining Law of 2010, the surface tax has to be paid within three days of the notification of the technical study of free areas.
4. A technical study by the ANM to determine whether there is any overlap with other contracts or applications. The applicant is notified of the free areas. The full area may not be granted if there is overlap with existing mining rights.
5. A legal and financial study is carried out by the ANM.
6. Once the surface tax is paid, the contract is prepared and signed. A surface tax (‘canon superficial’) has to be paid for signed contracts annually, in advance during the exploration and construction phases of the concession contract. This is defined by the Mining Law of 2010 as x1 the minimum daily wage per hectare per year for years 1 to 5 (about US$10.00), and x1.25 the minimum daily wages per hectare per year for years 6 and 7 (about US$12.52). The surface tax varies with the size of the concession contract and is one minimum daily wage per hectare (ha) (about US$11) for areas up to 2,000 ha, two minimum daily wages per hectare (about US$22) for areas between 2,000 and 5,000 ha, and treble the minimum daily wages per hectare (about US$32) for areas above 5,000 ha. In 2018 the minimum daily wage is 26041.40 pesos (www.salariominimocolombia.net/en), and is adjusted annually. Pursuant to the 2010 Amendment, surface taxes are dependent upon the extension and time elapsed in the concession as follows:
Years 1 to 5, x1 daily minimum wage Years 6 and 7, x1.25 the daily minimum wage Years 8 to 11, x1.5 daily minimum wage. Titles in the exploitation phase do not require payment of surface taxes.
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June, 2019 - Geological Report Santa Barbara Property, Colombia
7. The contract is recorded in the National Mining Registry (Registro Minero Nacional, ‘RMN’). The full areas of the applications may not be granted in their entirety if there is overlap with existing mining rights.
The concession contract has three phases:
1. Exploration Phase.
Starts once the contract is registered in the National Mining Registry.
Valid for three years plus up to four extensions of two years each, for a maximum of 11 years.
Annual surface tax payments
Requires an annual Environmental Mining Insurance Policy for 5% of the value of the planned exploration expenditure for the year.
Present a mine plan (‘PTO’) and an Environmental Impact Study (Estudio de Impacto Ambiental or ‘EIA’) for the next phase.
2. Construction Phase.
Valid for three years plus a one-year extension. Annual surface tax payments continue. Requires an annual Environmental Mining Insurance Policy for 5% of the value of the planned investment as defined in the PTO for the year. Environmental License issued on approval of an Environmental Impact Study.
3. Exploitation Phase.
Valid for 30 years minus the time taken for the exploration and construction phases, and is renewable for 30 years.
An annual Environmental Mining Insurance Policy is required, equivalent to 10% of the estimated production in the PTO.
In order to initiate the construction phase, a company must file a PTO (mine plan), within the final three 3 months of the exploration phase. The PTO is a technical document that describes, among others things, the area of operation, the characteristics of reserves to be exploited, the location of facilities and mining works, the mining plan of exploitation, the scale and duration of the expected production, the physical and chemical characteristics of minerals that are going to be exploited and the closure plan of exploitation and abandonment of the assemblies and the infrastructure. During the construction phase, the concessionaire may make changes and additions that are necessary prior to filing with the environmental and mining authorities. Further, during this phase, the concessionaire 14
June, 2019 - Geological Report Santa Barbara Property, Colombia is authorized to initiate anticipated exploitation and make use of provisional equipment and civil works.
No annual surface taxes.
Pay a royalty based on regulations at time of granting of the Contract. Royalties payable to the state are 4% of gross value “at the mine gate” for gold and silver (Law141 of 1994, modified by Law 756 of 2002). For the purposes of royalties, the gold and silver price is set by the government and is typically 80% of the average of the London afternoon fix price for the previous month.
4.3 Environmental Governing Law.
The 2001 Mining Code requires an environmental mining insurance policy for each concession to ensure compliance with mining and environmental obligations as follows: 5% of the budget for the annual investments during the exploration and the construction phases, and 10% of the result of multiplying the estimate of annual production (volume) and the price of the mineral at the mine head.
Mining activities are subject to environmental regulations promulgated by government agencies. Environmental legislation generally provides for restrictions and prohibitions on spills, releases or missions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in imposition of fines and penalties. The Constitution, the National Code of Renewable Natural Resources and Protection of the Environment (Decree – Law 2811 of 1974) as well as Law 99 of 1993, form the basis of environmental regulations in Colombia.
Under the environmental legal regime, the use of water (superficial or underground), air, disturbance of flora and fauna, as well as the generation of solid and liquid discharges and waste dumps are subject to officially approved licenses, permissions and concessions. Environmental legislation in Colombia is evolving and the general trend has been towards stricter standards and enforcement, increased fines and penalties for noncompliance, more stringent environmental assessments of proposed projects and increasing liability for companies and their officers, directors and employees.
The principal environmental authority in Colombia is the Ministry of Environment and Sustainable Development. It has national jurisdiction, in charge of formulating environmental and renewable natural resources policies and defining regulations focused on reclamation, conservation, management and use of natural resources and surveillance of all activities that may have an environmental impact. Recently, all activities associated with environmental permitting and control have been delegated to the National Environmental Licensing Authority (Autoridad Nacional de Licencias Ambientales or “ANLA”). At a regional level, the Ministry of Environment and Sustainable Development and ANLA functions are executed by Regional Autonomous Corporations (‘CAR’).
Together they constitute the principal environmental authorities. The Ministry of Environment and Sustainable Development is entitled to take control over Regional Autonomous Corporations at its discretion, on a case by case basis, when circumstances require it to do so. Both authorities have the following functions: (i) prevent and/or suspend any activity it deems contrary to environmental 15
June, 2019 - Geological Report Santa Barbara Property, Colombia standards; (ii) reserve and define areas excluded from mining activities (i.e. forest reserves and the páramo ecosystem); and (iii) approve environmental instruments, such as environmental management plans (Planes de Manejo Ambiental or “PMA’s”), mining and environmental guides (Guías Minero Ambientales or “GMA’s”) and Environmental Impact Assessments (Estudios de Impacto Ambiental or “EIA’s”), environmental licences and permits. PMA’s, GMA’s and EIA’s are the principal environmental instruments that allow the Government to oversee activities that have the potential to impact the environment. These documents must be adopted by the concession owner and define detailed measures and activities to be implemented for the mitigation, compensation and prevention of adverse environmental effects of a project. They also include follow-up, monitoring, contingency, and abandonment activities. The execution of activities under the exploration, construction and exploitation phases require the approval of one of these instruments. Prospecting activities are not subject to environmental permitting, without prejudice of any permit or concession necessary for the use of natural renewable resources.
Mining operations (in their exploration, construction and exploitation phases) that started activities before Law 99, 1993 was in force, are subject to the application of a PMA previously approved by a Regional Autonomous Corporation. After Law 99, 1993 came into force, construction and exploitation operations required the approval of an environmental license and only exploration phase activities remained subject to the application of a PMA previously approved by a Regional Autonomous Corporation. After Law 685, 2001 came into force, GMAs replaced PMAs for exploration phase activities. Neither a PMA nor a GMA constitute permission to use natural resources and therefore authorization of the corresponding environmental authority is required (e.g. water concessions, dumping permits). Environmental licenses, however, include all necessary permits for the use of natural resources. The initiation of the construction and exploitation phase requires granting of the environmental license. Under the current mining regime, an environmental license for a gold project is granted by Regional Autonomous Corporations whenever total tonnage of extracted ore material and waste material is less than 2,000,000 tons per year.
An environmental license request may require public hearings at which the company presents the project and allows the community to understand its scope, as well as to express their opinion on the feasibility of the project. Public hearings have to be expressly requested by third parties. The request also requires filing of an EIA which will contain elements, information, data and recommendations as may be required to describe and characterize the physical, social and economic environment of the place or region of the works of exploitation; the impact of such works with its corresponding evaluation; plans for prevention, mitigation, correction and compensation of those impacts; specific measures to be applied to the abandonment and closure of the mining works and its management plan; and the necessary investment and monitoring required with respect to these activities. Once an environmental license has been granted, the company may initiate construction and exploitation activities.
The 2001 Mining Code, as well as the 2010 Amendment and the National Development Plan define the existence of areas that may be excluded from mining activities, such as regional parks and "páramo" ecosystems. For an area to be excluded from mining, the geographic boundary must have been determined by the relevant environmental authority and based on technical, social and environmental studies, which support the incompatibility of mining activities, or in the specific case of "páramo" ecosystems, which support the existence of said ecosystems. Currently neither the
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Ministry of Environment and Sustainable Development and CDMB are known to be working on defining a regional park where the Santa Barbara property is located.
The use of surface or underground water requires prior approval from the Regional Autonomous Corporations (CAR). For the Santa Barbara, the CAR is the Corporacion Autonoma Regional del Sur de Bolivar-Corpobolivar), Bolivar Department. Water discharge requires permitting from the same authority. Both water concessions and discharge permits require payment of fees to the Regional Autonomous Corporation.
4.4 Surface rights
Surface rights are not considered a part of the mining titles or rights and are not governed by mining laws even though the mining regime provides for expropriation of property and the imposition of easements and rights of way. Surface rights must be acquired directly from the owners of such rights but it is possible to request that judicial authorities facilitate expropriation and/or grant easements or rights of way necessary for a mining operation.
Land acquisition in Colombia is subject to the compliance of certain formalities according to the Colombian Civil Code, such as the execution of a public deed and further registry before the Public Acts Registry Office. Forms of acquisition include, amongst others, acquisition agreements, hereditary rights, foreclosures, or by way of prescriptive rights (statute of limitations on possession). Registry before the aforementioned office is required to consolidate property upon the holder.
Mining is considered a public utility and an activity of public interest, therefore the owner of a mining concession is also entitled to request from judicial authorities: (i) the imposition of easements or rights of way necessary for the operation, and (ii) request expropriation of lands needed for the project, when it is not possible to have an agreement with the land owner. In either case, Condor has the obligation of paying the affected third party all amounts determined as compensation by administrative and/or judicial authorities for this purpose.
Easement rights may be requested from the moment of the execution of the concession agreement. Actual expropriation will require prior approval of the Civil Works Program (PTO) by the mining authority in order to be enforced. The region in which the Santa Barbara Project will be developed is characterised by a low degree of informality in the holding of land. Therefore, the most common forms of acquisition are ‘acquisitions agreements’ with registered owner(s), assignment agreements covering owners´ hereditary rights from next of kin, and agreements pertaining to material possession rights when there is informality in land property. To date, Malabar Gold Corp. or its subsidiary, Sociedad Minera Malabar SAS, has not filed for an imposition of an easement or right of way.
As a consequence of these various measures, the acquisition of surface rights, easements or rights of way, is often a lengthy process. Even though material possession of lands may be easily exercised, the process of property acquisition can take several years when the owners do not have proper registered titles over land. Nevertheless, Colombian law provides for the possibility of settling land titles by the application of a statute of limitations of prescriptive right based on material possession of lands.
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4.5 Santa Barbara Property Agreement
Information was provided by R. Sanabria, Principal of MGC. The Santa Barbara Property is 100% held by Colombian Company Minera La Fortuna SAS, a 100% subsidiary of Sociedad Minera La Fortuna S.A. (Panama).
Malabar Gold Corp owns 100% of Sociedad Minera La Fortuna S.A. via its founding partners. Terms of the purchase are:
1. USD100,000 (paid)
2. An exclusive operation contract between Sociedad Minera Malabar (‘SMM’) SAS (an arm’s length company held by Malabar Gold Corp.) whereby Sociedad Minera Malabar SAS would initiate mining activities and investments in the area purchased during the term of the area to be segregated is duly registered in the name of Minera La Fortuna SAS. In the operation contract, SMM agrees to pay the vendor 20% of the net profits from gold production coming from the specific area to be segregated during that period. The operation contract automatically ends upon title transfer is duly completed and there are no further obligations, production revenues, dividends or other payments to the vendor.
Purchase and sale agreement were duly executed and fully paid on April 27th, 2017 between vendor Luis Angel Consuegra Tavera and Minera La Fortuna SAS (funds 100% provided by Malabar Gold Corp).
Table 1 Co-ordinates (Origin Datum 1975 Bogota)
Vertex Easting Northing 1 998529 1448597 2 997046 1448597 3 997347 1447989 4 999194 1447989 5 998529 1448597
The above information was provided by R. Sanabria.
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Figure 5 Property Title Information
Above information in Fig. 5 is from Colombian Government files, and was checked by the author in March, 2019.
Overleaf, Fig. 6, Title Location (IEV16061C2, the plate number assigned by the ANM on 30th October, 2018
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Figure 6 IEV16061 Title and Santa Barbara Project area (Title IEV16061C2) locations
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Figure 7 Title Information including adjacent properties
Images downloaded from Colombian Government Mining Titles website April 2018
Figure 8 Santa Barbara Property (IEV-16061C2)
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A summary of the ownership is presented below, Fig. 9 from Malabar Gold Corp., Canada. Minera La Fortuna SA/SAS. Information provided by R. Sanabria, MGC
Figure 9 Title/Holding Information
The mill and processing complex is sited on the adjacent concession 0-439, registered to LACC Minerals SAS and operates under a contract between it and Sociedad Minera Malabar SAS.
4.6 Surface Rights Santa Barbara Property
At time of writing, Malabar Gold Corp. had secured the surface rights over the known length of the Esperanza-Santa Barbara vein on the Property, and access infrastructure (road, camp, mill site) by means of mining easement rights agreements for an approximate area of >10 ha.
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5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
The 1.1086 km2 Santa Barbara property is located in the Municipality of San Martin de Loba, Bolivar Department, approximately 35 km West of the town of Rio Viejo, which is 55 km from the town of La Gloria, on the Magdalena River, south-west of the regional centre of Aguachica, Cesar Department. From Aguachica, it is 170 km South to Bucaramanga, capital of Santander Department.
The project area lies within the northern portion of the Cordillera Central and is characterised by moderately to incised relief, drained by several seasonal quebradas. The property elevation ranges from 200 to 300 m a.s.l.
Access to the project area is afforded by a paved road from Bucaramanga, North, through Aguachica, continuing to the Caribbean. A paved road West to La Gloria provides access to the nearby ferry on the banks of the Magdalena River, then across to Rio Viejo, in Bolivar Department. A series of rural unpaved roads leads West and North to the property, with continuance North to Banco de Loba and by ferry, El Banco on the North bank of the Magdalena River.
The region has a sub-tropical rainforest climate, under the Köppen climate classification (‘AW’ – winter dry season). Average daily high temperatures are close to 35o C, with an average annual temperature of 270 C. Average annual rainfall is 1046 mm, with a dry season from December to March. The property area has slightly lower precipitation and temperatures.
Over 80% of the rainforest has been replaced by cattle farming, or at lower elevations, similar and increasingly, palm oil plantations. Local farming is informal, often subsistence, typically fruit growing, with yucca and plantain.
Aguachica in neighbouring Cesar Department is a regional centre. Personnel and industrial equipment can be sourced from there, though most mine construction equipment would be sourced from Bucaramanga, Bogota or Medellin.
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6. HISTORY
Records of any recent systematic mining on the project area could not be sourced, though some artisanal work, is operating on and adjacent to the Santa Barbara Property.
LACC Minerals and Rover Metals conducted informal prospecting and sampling on southern portions of the property between 2010 and 2014. Additional information is provided in the chapter ‘Adjacent Properties’.
Between 2014 and 2017, MGC through SMM excavated a number of exploratory pits and tunnels, tracing the north-east extension of the Esperanza vein, immediately to the South for some 42 metres. There was no systematic sampling.
The author is unaware of any historical mineral resources or estimates on the property.
Aside from the historical locations mentioned previously, there is no known systematic, recorded mineral production on the property prior to 2017.
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7. GEOLOGICAL SETTING & MINERALISATION
7.1 REGIONAL GEOLOGY
The western half of Colombia is transected by the Andes Mountains, which form a continuous, over 7,000 km long chain along the western margin of South America.
In Colombia, the Andes forms three North-South trending ranges (the Western, Central, and Eastern Cordillera). From West to East, the Western Cordillera (Occidental) and Central Cordillera are separated by the Cauca-Patia Depression, the Central and Eastern Cordillera (Oriental) are separated by the Magdalena Depression, (the ‘depressions’ are expressed as two intermontane fluvial valleys), with the Precambrian Guiana Shield under and East of the Cordillera Oriental. Western and central Colombia forms part of the North Andean Block, extending from Venezuela to the North, through Colombia, into Ecuador. This block is one of three major lithospheric plates in the region, the others being the Pacific, or Nazca Plate, and the Caribbean Plate.
Figure 10 Geodynamics of NW South America Velocities and senses of motion for the different plates and blocks with respect to South America (Pennington, 1981; Kellogg et al., 1983; Freymueller et al., 1993; Trenkamp et al., 2002); tectonic data modified after Gutscher et al. (1999), Taboada et al. (2000), Cortes and Angelier (2005) DEM from USGS, (2005). From F. Suter et al (2008).
The northern part of the Colombian Andes displays a complex structural pattern, resulting from the interaction of three major converging tectonic plates (Fig. 10). With respect to the South American Plate, the Caribbean Plate moves East to south-east, whereas the Nazca Plate moves eastwards. Based on shallow to deep seismicity and seismic tomographic images, various 3-D models of the lithospheric structure in the Northern Andes have been produced (Pennington, 1981; Van der Hilst and Mann, 1994; Gutscher et al., 1999; Taboada et al., 2000; Cortes and Angelier, 2005). Although the geometry of subducted slabs is still controversial in north-western Colombia, these authors generally agree that both the Caribbean and Nazca slabs are subducting under the South American Plate, the former with a low angle in an ESE to SE direction, and the latter with a high angle in an ESE direction. Somewhere North of 5°N, these two subducting plates overlap.
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In the convergence zone between these three major plates, three distinct blocks, the Chocó-Panamá, North Andes, and Maracaibo blocks are moving and being deformed in order to accommodate the resulting stress, (Fig. 10). The Chocó-Panamá Block (‘CPB’) is a volcanic island arc with its associated oceanic crust. It collides into north-west South America in an East to ESE direction, and is limited by the transpressive, sinistral Uramita fault zone to the East and the dextral Istmina fault zone to the South. The latter lies slightly West of, and parallel to, the Garrapatas fault, which displays neo-tectonic activity. The onset of the collision is not precisely dated, but it ranges from the Early Miocene to Early Pliocene (Restrepo and Toussaint, 1988; Trenkamp et al., 2002). The CPB does not subduct below South America, therefore it is considered as a rigid indenter producing a horizontal shortening exceeding 150 km. Arguably, this collision is responsible for the latest and major phase of uplift in the Colombian Andes which corresponds to the Andean tectonic phase in part forming and modifying the three cordilleras (Taboada et al., 2000; Cortes et al., 2005).
The North Andes Block corresponds to the highly deformed portion of territory between three major tectonic plates and the CPB (Fig. 10). South of 4°N, it is limited westwards by the trench where the Nazca plate subducts beneath the South American Plate, whereas to the North, it is bounded in the West by the southern and eastern limits of the CPB. Its eastern limit corresponds to the Santa Marta- Bucaramanga Fault (‘SMBF’) and the Eastern Frontal Fault System (‘EFFS’), which borders the eastern foothills of the Eastern Cordillera. South of 3.5°N, the eastern boundary of the North Andean Block changes strike from SSW to south-west along the Algeciras transpressive dextral fault system (‘AFS’). The latter is located slightly West of the EFFS and continues south-west down to the Gulf of Guayaquil in Ecuador. To the South, this block has a triangular shape and is squeezed between the Nazca and South American plates. This implies transpressive dextral kinematics of the EFFS and AFS, however, recent studies suggest that, since the onset of the Andean tectonic phase, the part of the North Andes Block North of 4–5°N is undergoing shortening in a direction perpendicular to the main fault trends rather than through dextral transpression. Thus, although the main faults displayed transpressive dextral kinematics before Mio-Pliocene times, the latter was converted into thrusting following the onset of the convergence of North and South Americas and the subsequent indentation of the Chocó-Panamá Block (Cortes et al., 2005). This latter phenomenon can be observed on a more local, project area scale (see ff.)
“The central part of the Central Cordillera comprises igneous and metamorphic rocks affected by a NE- trending system (Palestina Fault), an ENE system (Ibagué Fault), a NW system (Arma Fault) and an arcuate fault system that bounds the cordillera to the west (Romeral Fault system)” (Fig. 11 ff). “This last system is a suture zone along which oceanic crust collided obliquely with a continental margin, 65– 49 Ma ago.” (Barrero et al. 1969).
“The Palestina Fault system is a N30oE - trending right-lateral zone that cuts through the Central Cordillera (Fig. 10) and is assumed to have developed as a result of the oblique collision of the oceanic crust during the Late Cretaceous (Feininger 1970). Strike-slip deformation along this system, (1) generated the San Lucas Serrania, a transpressive duplex located at the northern end, (2) caused an over-step where dragging and right-lateral displacement of basement faults occurred on the central part, and (3) created oblique right-lateral and normal faults that are active and control the Quaternary magmatism at the southern end of the system (Figs. 10,11). In addition, an analysis of the magmatic rocks in this region during the present study showed that it has migrated from north to south since the Eocene. Similarly, reactivation of NW-trending faults during this time has affected the horsetail structure of the Palestina Fault system and therefore migration of magmatism and reactivation of NW- 26
June, 2019 - Geological Report Santa Barbara Property, Colombia trending faults is closely related. Hence the emplacement of the volcanic bodies in this part of the Central Cordillera contrasts with that observed at the Colombia–Ecuador border.” (Acosta et al, 2007).
Cediel et al. (2003) compiled and identified more than 30 distinct litho-tectonic and morphostructural units and their bounding suture and fault systems. The Northern Andean Block is simplified into five tectonic realms that share internal genetic histories, viz., from West to East, the Western Tectonic Realm, Central Continental Subplate Realm, wherein is situated the San Lucas Serrania terrain ‘’Sl”, Maracaibo Subplate Realm, Guajira-Falcon Composite Terrane (northern Colombia), and Guiana Shield Realm (Fig. 10 ff). The Guiana Precambrian Shield forms the basement beneath most of eastern and central Colombia and is characterised by high-grade metamorphic granulites. The Maracaibo Subplate Realm is the northwesternmost portion of the Guiana Shield. The Western Tectonic Realm contains lithotectonic units with fragments of the Pacific oceanic plateaux, aseismic ridges, intraoceanic island arcs and/or ophiolite. It correlates approximately with the physiographic Western Cordillera. The Central Continental Subplate (CCSP) occupies a wedge between the Guiana Shield to the East, the oceanic Western Tectonic Realm to the West and the Maracaibo Subplate Realm to the North (Cediel et al., 2003).
The Central Continental Subplate is a compositionally heterogeneous lithotectonic realm with Precambrian and Palaeozoic components, and forms parts of the Central Cordillera, the Magdelena Depression, and the Eastern Cordillera. The Project area is located within the Central Continental Subplate Realm, in the Cajamarca-Valdivia Terrain (‘CA-VA’) of Cediel et al., 2003.
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Figure 11 Tectonic Realms from Cediel et al., 2003 Note: The project area (Red Dot), lies within the San Lucas Block, ‘Sl’ above, part of the ‘CCSP’, the Central Continental Sub-Plate Realm, comprising the CA-VA, EC, CR, sl and Ib tectonic realms.
Figure 6. Lithotectonic and morphostructural map of north-western South America. GS = Guiana Shield; GA = Garzon massif; SP = Santander massif–Serrania de Perija ; ME = Sierra de Merida; SM = Sierra Nevada de Santa Marta; EC =Eastern Cordillera; CO = Carora basin; CR = Cordillera Real; CA-VA = Cajamarca-Valdivia terrane; sl = San Lucas block; ib =Ibague block; RO = Romeral terrane; DAP = Dagua-Pinon terrane; GOR = Gorgona terrane; CG = Canas Gordas terrane; BAU = Baudo terrane; PA = Panama terrane; SJ = San Jacinto terrane; SN = Sinu terrane; GU-FA = Guajira-Falcon terrane; CAM = Caribbean Mountain terrane; Rm = Romeral melange; fab = fore arc basin; ac = accretionary prism; tf = trench fill; pd = piedmonte; 1 = Atrato (Choco) basin; 2 = Tumaco basin; 3 = Manabı basin; 4 = Cauca-Patia basin; 5 = Upper Magdalena basin; 6 = Middle Magdalena basin; 7 = Lower Magdalena basin; 8 = Cesar- Rancherıa basin; 9 = Maracaibo basin; 10 = Guajira basin; 11 = Falcon basin; 12 = Guarico basin; 13 = Barinas basin; 14 = Llanos basin; 15 = Putumayo- Napo basin; Additional Symbols: PALESTINA = fault/suture system; red dot = Pliocene- Pleistocene volcano; Bogota´ = town or city. From Cediel et al. (2003).
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Figure 12 Northern Andean Geology and Property Location Red Ellipse, within the (blue) Sierra San Lucas Terrain, from Kennan & Pindell, 2003
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In large part, the Western Cordillera is Jurassic-Late Cretaceous to Miocene in age and consists of oceanic rocks (submarine volcanic rocks and related sills of tholeiitic basaltic composition, overlain by deep-water pelagic and turbiditic sediments). The Central Cordillera is Palæozoic to Miocene in age and consists of continental and oceanic rocks. It contains widespread low-grade metamorphic rocks comprised of shelf sedimentary sequences in the East and volcanic sequences in the West. The Eastern Cordillera is Palæozoic in age and consists of continental rocks such as Jurassic red beds and Cretaceous carbonates and clastic deposits with little metamorphism.
The Cajamarca-Valdivia (‘CA-VA’) terrane is composed of an association of greenschist through lower-amphibolite metamorphic grade, pelitic and graphite-bearing schists, amphibolites, intrusive rocks and rocks of ophiolitic origin. Geochemical analyses from various external sources, indicate these rocks are of intraoceanic-arc and continental-margin affinity. The CA-VA terrane has been intruded by synkinematic granitoids that are characterised as garnet-bearing, two-mica intrusions displaying peraluminous (S-type) lithogeochemistry, dominated by composite metaluminous, calc- alkaline dioritic through granodioritic batholiths. Associated volcanic rocks were generated on a modified continental basement composed of the Chicamocha and Cajamarca-Valdivia terranes (Cediel et al., 2003).
Figure 13 Generalised transect across Colombia From Cediel et al., (2003). The property area is located in the San Lucas Block, a Jurassic arc-related phenomenon accreted during early Palæozoic times onto the Proterozoic Chicamocha (or Chibcha – see Toussaint and Restrepo, 1988) Terrane. The block is shown as ‘sl’ just East of ‘2’, the Palestina Fault System.
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The above observations and conclusions are derived from work by, amongst others, Restrepo and Toussaint. Previous regional work, dating back to the 90’s, complimented by later geochronological work, resulted in broadly similar observations and conclusions, as reported by Restrepo et al., 2011. Most relevant to the project area is the classification of the Tahami terrane which is broadly co- incident with the Cajamarca-Valdivia terrane, with slightly differently defined northern and western margins, and a Permo-Triassic age for metamorphism of the area, with associated modification of early Palæozoic rocks.
The San Lucas Block is a Jurassic arc-related feature, similar to e.g., the Ibagué block to the South. Below, Fig. 13, from Villagómez & Spikings, 2013. The San Lucas block is represented as the northerneasternmost red arc feature, with property location as white circle therein (approximate).
Figure 14 San Lucas Block Northernmost Jurassic arc in red - and property location (white circle)
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The eastern part of the Colombian Central Cordillera (Maya-Sánchez, 2001; Maya-Sánchez & Vasquez-Arroyave 2001) and most of the Ecuadorian Cordillera Real (Litherland et al. 1994) comprise para-autochthonous terranes with affinity to the basement of the Magdalena Basin. They include Neoproterozoic, Grenvillian gneisses and schists, unmetamorphosed to low-grade metamorphic Palaeozoic sedimentary rocks (Restrepo 1992; Restrepo et al. 1997) with a thin Cretaceous cover section comparable to Colombian Cordillera Oriental and to the foreland East of the Andes, intruded by plutons ranging in age from ca. 235 Ma to 160 Ma, latest Triassic to Middle Jurassic. In Colombia, these include the Segovia, San Lucas, Sonsón and Ibagué batholiths of Colombia (e.g. González 2001; Villagómez et al. 2008) and the Abitagua and Zamora plutons of Ecuador (e.g. Litherland et al. 1994)
A slightly different interpretation of the region, and with direct relevance to the project area, is provided by Cuadros et al., 2014, overleaf, fig. 16. Below, Fig. 15 from Restrepo, 2008, 2011.
Figure 15 Colombian terranes In their paper, the San Lucas Block is broadly similar to the San Lucas Range (‘SLR’) itself, wherein is located the property. They consider the SLR to form part of the Chibcha Terrane. Characterised by metamorphosed rocks of Proterozoic age (broadly corresponding with the abovementioned Chicamocha Terrane), intruded by Lower Jurassic granodiorite batholith and overlain by low metamorphic grade altered Ordo- Silurian sediments, and unmetamorphosed Devonian to Cenozoic age sediments including Early to Middle Jurassic intermediate volcaniclastic rocks. A region noted for gold and silver mineralisation, the Chibcha Terrane is interpreted to represent one of the allochthonous blocks accreted onto the Amazonian Craton. The eastern margin with the Craton is represented by the Guaicáramo system, and its western margin with the Tahami Terrane, marked by the Otú-Pericos Fault. Accretion of the terrane onto the Craton is suggested as occurring during the Late Palæozoic.
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Figure 16 The Chibcha Terrane From Cuadros et al., 2014. Red dot property epicentre
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Figure 17 Regional geology of the SLR and faulting
From Cuadros et al, 2014. Their study area is immediately West of the property. Noted are structurally controlled auriferous veining within all units (Proterozoic to Phanerozoic), with dominant NNE-SSW and ESE-WNW trends.
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Faulting in the Northern Andes is abundant and complex. Large-scale strike-slip faulting is a major element in the tectonic evolution of the region. The fault pattern in the project area and its surroundings is dominated several major regional lineaments. The Romeral Fault System (‘RFS’), which runs through the Northern Andes from Guayaquil, Ecuador to the Caribbean is a SSW-NNE trending fault system. It is considered to represent a major suture and subduction zone accreted onto the CA-VA terrane. This Late Jurassic to Early Cretaceous accretion was oblique, dextral, from the south-west to WSW. Separating the Central and Western Cordilleras, it contains several allochthonous terranes, e.g. Quebradagrande and Arquía which would represent an oceanic arc, a mid-oceanic ridge or an ensialic marginal basin (Mora-Bohórquez et al., 2017). North-South trending (parallel) lineaments are associated with this (oblique) collision and subduction. Some sections of the RFS remain active today. This melange is loosely termed the Romeral fault zone, Romeral Fault System, or Romeral terrane, (‘RFS’), and includes dismembered ophiolites and glaucophane schists. It is bounded to the West by the Cauca fault, where later oceanic and island arc terranes accreted onto the Western Cordillera during the Paleogene and Neogene periods. The eastern margin is less well defined, due to the continuation of parallel structures East to the Otú-Pericos Fault (see below). These later collisional events re-activated the Cauca and Romeral faults, with sinistral and reverse movements. See, e.g. Cediel et al., 2003.
The RFS is a regional Cretaceous anisotropy extending from Guayaquil, Ecuador up to the Caribbean Sea, whereas “non-RFS” faults are present in the Central Cordillera north of 4.5°N, at the indentation front of the CPB. At a more local, sub-Province scale, the RFS is represented by series of parallel to sub-parallel fault segments. Predominantly dextral, between latitudes 4°N and 5°N, its kinematics change from dextral in the South to sinistral in the North (Ego et al., 1995, 1996; Taboada et al., 2000).
A second major lineament is the Otú-Pericos fault, another regional anisotropy with similar strike length to the RFS. Arguably, it defines the boundary between the eastern margin of the CA- VA/Tahami terrane, and the Proterozoic Chicamocha terrane in its southern and central locations, though its trace in the project area is commonly hidden by Recent cover, in this case sediments in the Magdalena Valley. Several authors define this boundary as the Palestina Fault, which is probably correct in the North of the Andes Block (see Fig. 10), where relationships between the CA- VA/Tahami and basement are more clearly exposed. In the project area, the Palestina Fault (see ff.), cuts the terrane, with similar lithologies on both sides, and so post-dates the Otú-Pericos fault. This latter fault has been the subject of much study farther North, as it and lower order fault sets are responsible for the segmentation of gold-bearing veining, notably in the Segovia Remédios Mining District. (See, e.g. Galindez, 2013).
The third major lineament is the aforementioned Palestina Fault, located immediately West of the project area, which also has dextral strike-slip movement, evidence of extensive shearing, and mergence to the South with the RFS. It may represent a growth fault off the RFS. The gold and silver-bearing quartz-sulphide veins of the project area are geographically associated with the Palestina Fault System. A north-east to near North-trending, post-Cretaceous fault, one likely related to the collision and accretion of Chócó-Panamó Block, it displaces the Otú-Pericos fault by some 25 km. It traverses the Tahami terrane, and is very much an active feature, considered to control the ascent of magma in the Nevado del Ruiz and neighbouring volcanoes with its intersection with the
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June, 2019 - Geological Report Santa Barbara Property, Colombia lower order Villa Maria fault the probable conduit for ascending magma. (González-Garcia et al., 2015).
These estimates collectively suggest a dextral shear rate of c. 7–10 km/Ma between forearc terranes and the interior of South American during the earlier latest Cretaceous to Eocene brittle phase. Fault patterns in Colombia suggest that much of this brittle shear passed east of the Antioquia Terrane. The Cauca–Almaguer Fault between Cali and Medellín is dominated by a subduction accretion structural style reflecting east-directed underthrusting of Western Cordillera rocks beneath the Central Cordillera. In contrast, anastomosing patterns of brittle, high-angle faults characterize the Silvia– Pijao and San Jeromino Fault Zones in southern Colombia. North of Armenia (c. 4.5°N), this brittle faulting and associated pull-apart basins (the largest is near Manizales) and restraining bend pop-ups swing to the northeast and follow the Palestina and Otú-Pericos faults and other north-south-trending fault strands between Antioquia and the Serranía San Lucas. (Kennan & Pindell, 2003)
Superimposed on these regional features are the effects of the collision of the Chocó-Panamá Block and Nazca Plate during Miocene and later times. Major lineaments, including the RFS were affected, with dislocation by typically ENE trending dextral strike-slip faults.
Figure 18 Simplified Kinematics, NW South America
Following the convergence of South America and North America, which began during the Eocene, the East to ESE directed underplating of the Caribbean Plate below South America led to the collision and indentation of the CPB into the Western Cordillera (Fig. 8). The precise age of this collision is not well defined; it ranges between the Miocene and the Pliocene.
Fig. 18 is Simplified kinematic reconstruction of the north-western corner of South America from Lower Miocene to present times illustrating the collision of the Chocó-Panamá Block. Following the onset of the collision, the Chocó-Panamá Block bends up instead of subducting. This produces a left-lateral shear zone in eastern Panamá and a right-lateral distributed shear strain (DSS) in the rigid polymetamorphic Central Cordillera of Colombia at the indentation front of the CPB. The pairs of double black half arrows are oriented according to the distributed shear direction. From F. Suter et al (2008).
Suter et al’s work demonstrated fairly consistent and often active, right-stepping, en-échelon, dextral strike-slip movements affecting the RFS and localities East, with the RFS perhaps re-oriented, its strike changing from NNE to North, this North of the Ibagué strike slip shear, one of several parallel structures formed during this collisional event (and continuing, with much lower intensity, today).
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These structures are annotated in Fig.19. Locally, they form right stepping “en-échelon” systems, crosscutting the Western and Central Cordilleras and appearing to transect all pre-existing structures.
The earlier North-South dominant fault/fracture system associated with the RFS and Otú-Pericos faults and its related strain ellipse and Riedel shears, were overprinted by shears and fractures relating to the CPB-Nazca collision. “Paleostress calculations gave a WNW–ESE trending, maximum horizontal stress, and 69% of compressive tensors. The orientation of σ1 is consistent with the orientation of the right-lateral distributed shear strain and the compressive state characterizing the Romeral Fault System in the area: it bisects the synthetic and antithetic Riedels and is (sub)- perpendicular to the active Romeral Fault System.” As a result, the RFS became segmented. This shear system was active at least until the Middle Pleistocene and is still active today. Some of the older RFS fault system was in all likelihood re-activated, and as Suter et al., suggest, as normal faults.
The RFS was divided into two distinct families (Fig. 19 overleaf); the faults located South of the Ibagué Fault and West of the Quebradanueva Fault (in pink) have a S-SSW – N-NNE strike, whereas the faults located North of the Ibagué Fault (in black) have a North-South strike. The second group of dominant lineaments is a series of ENE to E-ENE striking “Ibagué type” lineaments (in red). Some of these lineaments correspond to faults described in the literature (e.g., the Garrapatas and Ibagué Faults), whereas others are only derived from a digital elevation map, (‘DEM’), and are only inferred, not observed. These represent the most dominant lineament set after the RFS, and are associated with partitioning of the Colombian Andes.
In summary, the present configuration of the North Andes is the result in large part, of several collisional and accretionary episodes dating back to Cretaceous times. “The Colombian Andes are characterized by a dominant NE structural trend, which is offset by ENE-trending right-lateral (dextral) and NW-trending left-lateral (sinistral) structures. NE-trending faults are either dip-slip or oblique thrusts, generated as a result of a transpressive regime active since at least Paleogene times. NW-trending faults are considered to be reactivated pre-Cretaceous extensional structures. Right- lateral (dextral) shear on ENE-trending faults has resulted from oblique convergence between the Nazca Plate and the Northern Andes. Major changes in the geometry of the oblique-plate convergence between the Nazca and South American plates have generated the northward ‘escape’ of the Northern Andes and stress–strain partitioning within the mountain belt. These strike-slip structures have exerted important controls on sedimentation, source-rock distribution, fluid flow and ore mineralisation during Cenozoic times.” See Acosta et al., 2007.
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Figure 19 Regional Faulting From Acosta et al., 2007 a DEM map with faults, red rectangle showing property location area.
Note the well-developed ENE trending dextral strike-slip faults and antithetic, sinistral WNW trending lineaments – the latter are normal faults, seen as right-stepping escarpments on and around the property), superimposed on an overall North-South fabric within the Cajamarca- Valdivia/Chibcha basement terrane.
These north-easterly trending lineaments would be associated with the Pericos fault ‘set’ shown previously, one contemporaneous with the Palestina (‘Plst’ or PFS). They display modification by the more northerly trending RFS (black), with dextral displacement or alignment into the RFS overall geometry. The San Lucas Block (‘SLB’), aka San Lucas Serrania of Fig. 19, above, can be viewed as an exposed basement terrane draped by Mesozoic sediments, in part exhumed by late continental strike slip along the PFS, which forms the
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June, 2019 - Geological Report Santa Barbara Property, Colombia western margin of the SLB. Re-activation of the PFS produced the generally dextral north-east trending faults transecting the Block, which continue East under Mesozoic to Recent sediments, where they appear to terminate along the still active Santa Marta-Bucaramanga Fault system, ‘SMBFS’, a regional, reverse (sinistral), high angle fault separating the CCSP and MSP (see fig. 11). Between these two major faults, oblique transpression has resulted in fold-thrust development of the crust (North-South fold axial traces), shallow ramping, and north-east trending faulting, e.g. Falla Mejia. Figure 20 Santa Marta-Bucaramanga Fault system From Cardenas et al., 2012.
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These overall trends control major vein distribution and orientation on the property (see below, ‘Property Geology’).
The geology of the San Lucas Block is understood to be underlain by metaluminous to peraluminous, calc-alkaline, dioritic to granodioritic Mesozoic batholiths partly covered by Jurassic to Recent age dacitic to andesitic volcanic derived ricks, this generated within and on the Chicamocha terrane/Chibcha basement (see, e.g., Cediel et al., 2003). The intrusions are spatially if not genetically related to larger regional plutonism, extending North and, notably South, wherein is located the Norosi Batholith (fig. 20) and the major gold mining district of Segovia-Remedios (underlain by the chemically similar and possibly age-related Segovia Batholith).
With regard to related ages of the Antioquia and Segovia batholiths, both of which are high yield gold targets, Cáceres, et. al. (2005) report that emplacement of the Antioquia and Segovia batholith began in the upper Palaeozoic (405.5 to 245 Ma). Feininger, et. al. (1972) reported a K-Ar age of 165 Ma. The more recent work suggests this age is not appropriate, and the Segovia batholith may be post- Cretaceous in age.
Based on fission track age dating of vein and wall rock samples in the Segovia-Remedios area, Echeverry (2006) reported the estimated ages of cooling below 200°C (zircon) for the Segovia batholith are late Cretaceous (68.4 ± 5.5 to 84.1 ± 5.5 Ma), and below 100°C (apatite), Paleocene (59.1 ± 4 to 64.7 ± 6.3 Ma). The estimated latest age for hydrothermal activity was reported as Eocene (47.7 ± 2.9 Ma), based on data from fission track age-dating of apatites in the wall rocks adjacent to veining. (Quia Resources Technical Report, 2010).
There are no known definitive dates for the intrusions in the area around the property, though Colombian government (Ingeominas) published map documents record them as Cretaceous to Triassic in age (see below). This includes the Triassic age Norosi Batholith to the South.
South of the San Lucas region, gold mineralization in the Segovia-Remedios district (underlain largely by the Segovia Batholith), is controlled by the Otú fault system, which is parallel to and approximately 40 km East of the Palestina fault system. At Frontino, mineralisation is contained within second-order structures associated with a 330° flexure in the Otú Fault. The Otú (underlying El Limon, La Aurora, and Frontino), Bagre (underlying La Corona at its North end), and Palestina (just West of the San Lucas Property) fault systems are visible as north-south, anatomising lineaments. The three fault systems coalesce South of the Segovia-Remedios district. (From Quia Resource Technical Report, 2010).
The North trending Palestina Fault System forms the boundary between the Cajamarca-Valdivia terrane and the San Lucas block. The Cajamarca-Valdivia/Chibcha terrane is composed of pelitic and graphite- bearing schists, amphibolites, ophiolitic related rock, and intrusions.
Metamorphic grade is greenschist to lower amphibolite. Arguably, these rocks are of intraoceanic-arc and continental-margin affinity. Others consider the terrane to be partly continental or continental margin in nature. Still others conclude the region is continental accretionary or continental arc.
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Figure 21 Regional Geology Source: Barrero and Vesga, Atlas Geológico de Colombia (Plancha 207), Ingeominas, 2010.
N
SANTA BARBARA AREA
Property area Legend for Regional Geological Setting overleaf
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GEOLOGY LEGEND SIERRA SAN LUCAS REGION
Quaternary Undifferentiated Sediments
Undifferentiated Detrital Sediments. ?Cretaceous
Jurassic Clastic Sediments, Volcanogenic Sediments, breccias, agglomerates and andesitic rocks
?-Triassic Granodiorite, Monzonite, Syenodiorite intrusions
Neoproterozoic Gneiss, granulite, amphibolite, marble
Regionally, the San Lucas gold mining area in Bolívar province is located in the Cordillera Central northern foothills, in the South of the Colombian Caribbean region, between the left bank of the Magdalena River and Cauca river right bank. The San Lucas gold district is believed to be one of the most prolific in Colombia and has been artisanally mined for over 200 years, covering an area from San Martin de Loba, Barranco de Loba and Rio Viejo to Santa Rosa del Sur and Montecristo in the Southern Bolivar. The region has significant artisanal mining, with including less than 10 km to the north-east of the property, La Gloria mine, El Fogaje mine, Guacharaco mine, Cielo mine, Romanes mine, la Azul mine, Culoalzao mine, la Nubia mine, Ancha mine, San Carlos mine, ArreteTemplado mine, El Turco mine and Buena Seña mine.
The privately owned and operated Mina La Cabaña, North adjacent to the property, has operated for at least three years, though currently, it is on care and maintenance.
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7.2 PROPERTY GEOLOGY
On a smaller scale, the area is located in the Cajamarca-Valdivia (CA-VA) Terrane (Cediel et al, 2003), or Chibcha Terrane, which consists of highly deformed gneisses and schists. It is overlain by Jurassic age Noréan Formation volcanic derived sediments, dacitic to andesitic pyroclastic rocks, breccias, agglomerates and ignimbrites intruded by penecontemporaneous to more recent plutons (Clavijo, 1996).
No systematic mapping has been conducted on the property, rather prospecting and inspection of exposures in quebradas, at road cuts or ridge tops. Information provided in this report is derived largely from the Ingeominas Plancha 86, Barranco de Loba, 2006, fig. 22, ff. Their map indicates the property to be almost solely underlain by gneisses, though the author noted intrusions and Jurassic age volcanic derived rocks cropping out on the property.
Overall, the Property is underlain by what are commonly referred to as Precambrian gneisses, often termed the San Lucas gneiss. Gneiss and intrusion-related gneisses, Phanerozoic intermediate intrusions and unconformably overlying Mesozoic volcano-sediments crop out on the property, typically within small creeks, at several roadcuts, and small-scale mining locales, (both surface and underground). The distinction between gneissic and truly intrusive lithologies is often blurred due to partial to almost complete assimilation by the Phanerozoic intrusions. A penetrative fabric may be preserved or overprinted on both major lithotypes.
Quartz-plagioclase-potassic feldspar-(biotite)-(amphibole) gneiss and intrusions are noted. Where coarser, idiomorphic, they appear in part tonalitic to quartz dioritic to quartz monzonitic. Intrusive rocks of diorite to granodiorite to monzodiorite composition, include the Norosi Batholith which some consider to be the northern extension to the Segovia Batholith, host to a large number of past and currently producing gold mines.
Mineralogically, the gneisses and intrusions are similar, characterised by varying assemblages of quartz, plagioclase, potassic feldspar, amphibole, biotite, and rarely, orthopyroxene. Opaque minerals are typically magnetite, from trace amounts to 1-3%, and rarely, ilmenite.
Some highly potassic rock alteration zones suggest concentrations of high-potassium flooding and replacement. Potassic altered ‘gneisses’ are relatively common in the property area. Very fine to fine, moderately to well-developed crystal alignment with recrystallisation can be seen along parallel threads of fractures, and is present with potassic ingress. Thus, the Precambrian gneisses are in part modified by Jurassic age plutonism. Rocks are medium grained, phaneritic, plagioclase blastic to equigranular, with weak erratic chloritic, sericite, jarosite in or adjacent to veins and in some cases, brittle faults zones or near areas with almost gouge material. More potassic rich lithologies can be seen as gneissic or banded material in a tonalite or granodiorite.
Higher elevations are in part underlain by unconformable Jurassic volcanic rocks and volcanogenic sediments that are related to a larger, regional scale volcanism that saw development of a number of eruptive centres and calderas. Property exposures of the sequence include ignimbrites, volcanic breccias, intermediate to felsic (including andesitic) lavas, and pyroclastic fall deposits. Quartz arenite was noted in several locations, and it is unclear if these are Palæozoic or Mesozoic in age. Phanerozoic cover thickness is highly variable due to uplift, erosion and the effects of the intrusions. 43
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Argillic alteration is weak, seen as threads or fracture-related material. Locally, there may be developed a crude network of argillic alteration similar to boxwork, or crudely banded parallel to veining. Figures 22, 23 Ingeominas geology Plancha 86. Barranco de Loba.
Note: The property boundary (white) is approximate relative to geology, topography and the local the UTM dataset. The adjacent processing plant location is outlined in red.
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Structural Geology
The government geology map indicates several north-east trending lineaments transecting the area and across the property, cutting all major lithologies. This orientation is broadly similar to the regional north-east trending faults. These first and second order faults include the dextral fallas de Mejia, just km to the North, plus la Nutria, La Mojana, and Quebrada Naranja (fig. 21). A younger North trending set would represent synthetic extensional brittle structures, with local examples, the fallas Nueva Delhi and Azulita. No detailed site investigations were possible during 2104 and 2018 visits, though several observations and conclusions can be made based on site-specific examinations and analysis and comparison with regional structural information, viz north-easterly faulting is related to extensional dextral displacement within the San Lucas Block, and northerly trending faults are in-part re-activated systems affected by Mesozoic to Quaternary volcanic activity, producing structurally controlled deposition of volcanogenic sediments and localisation of volcanic vents.
Poorly defined North-South trending, upright to sub-vertical, axial planar folding within Jurassic sequences indicates an early compressional phase with East-West to West north-west East south-east sigma 1. The geometry of these is partially controlled by the transcurrent, compressional events mentioned previously.
On a district scale, gold mineralised veining appears to be strongly controlled by the north-east trending faulting (see below).
North-South faulting, seen more clearly on satellite imagery rather than regional or district geology maps, would be parallel to the RFS to the West, with re-activation during Mesozoic times producing a rift-like setting culminating in Jurassic and younger volcanic depocentres and ultimately caldera formation. One major centre is located approximately eight km to the South, around Punta de Avila with the town of Norosi two km farther. Artisanal mining of Mesozoic and basement-hosted (Pre- Cambrian) auriferous quartz veining continues in this area.
Recorded information on faults, vein systems fracturing and brecciation is insufficient to provide vectors for locating additional mineralisation. This is due in part to lack of exposure, the greenfields nature of past exploration, and the as yet limited amount of information on underground geology (i.e. development).
Mineralisation
Gold mineralisation is confined to that hosted by or adjacent to quartz veining which is exposed in large part as a series of parallel generally northeast trending, steeply to vertically dipping sets. Dips are usually steep, to the East, though over short distances, minor West dips are noted. Southernmost veins trend more Northerly, and turn North-east relatively sharply. The main vein just South of Santa Barbara at the Esperanza Mine reaches 0.65 metres wide, with an average width of 0.4 metres, and trends 010o to 030o. This is the gold-bearing Esperanza vein, now, with additional exploration to the North, termed the Esperanza-Barbara vein, with the north-eastern extension trending across the property boundary.
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At least three parallel 030o to 060o trending veins were examined by the author during his second visit to the area.
Polished section studies by LACC Minerals of mineralised material underground at Esperanza indicate native gold present within microfractures inside sub- to euhedral pyrite.
Sphalerite, chalcopyrite and pyrite are present in varying amounts, and their relationship to gold mineralisation is unclear, though typically they are associated with elevated gold values. Chalcopyrite occurs as gangue in quartz veins and is anhedral, with sparse to rare covellite. Sphalerite is rare, generally anhedral. Py is noted within sphalerite, also, suggesting two phase recrystallisation. Minor thin section work was carried out by LACC Minerals and reported by Hughes (2014).
Work by Carmona et al., 2005, concludes that mineralisation likely pre-dated the Cretaceous and was synchronous or post-dated Jurassic volcanic and intrusive events, which includes the formation of the Norosi Batholith. In the La Gloria Mine region, less than 10 km to the north-east, veining is within a series of re-activated faults. Displacement has, in some instances resulted in stacking or multiplication of vein sets. The main controlling structures trend 050o to 070o. Figure 23 Chip sample of Esperanza-Barbara Vein
Overleaf: Figures 24-26, grabs of high grade sulphidic vein material These are from other veins on the property (11.6 g/t Au, 14.35 g/t Au) and 17.88 g/t Au, and 27.81 g/t Au). 47
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The vast majority of veining is hosted by gneisses or modified (intrusion modified) gneisses. Recent prospecting, especially at higher elevations suggests some gold vein mineralisation lies within a quartz arenite that could be Jurassic in age.
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8. DEPOSIT TYPES
Gold mineralisation in the district is considered to be modified intrusion-related orogenic gold type. They may be characterised by relatively low sulphide content, py, po and asp, but little or no magnetite and ilmenite, weak hydrothermal alteration, within or spatially related to pluton emplacement, and with gold typically hosted within sheeted veins, parallel, low-sulphide, and with considerable strike and vertical extent. The geological setting is usually continental, with intrusions emplaced within old continent margins behind active plate systems. In this instance, there is clear evidence of multiple stage silica ingress and sulphidation within a more active tectonic setting, viz convergent, accretionary. Pure intrusion-related gold systems have much lower gold grades with limited areal extent and are often confined to upper portions of intrusions.
Examples include the historic Segovia-Remedios gold district, north-east Antioquia District, Colombia, with gold mining by e.g. Gran Colombia Gold Corporation, the Parcoy-Pataz District, Peru, and the Bralorne Camp, BC, Canada.
In the San Lucas belt, gold-bearing veins are hosted by Mesozoic intrusions, intrusive-modified metamorphic rocks or are located near the contact of intrusions with the Precambrian and Palaeozoic metamorphic rocks (gneisses and schists). On a regional scale, the veins are associated with north- northwest trending faults and shear zones (the Palestina, Bagré and Otú Fault Systems).
Typically, vein-type gold deposits in this type of environment are localized along splays off the main fault zone, at Riedel shears and bends, tension gashes within the main fault zone, or at points where the main fault zone is intersected by oblique angled faults. The Palestina Fault system is just West of the property. Many vein-style prospects occur along the under explored Palestina trend. Based on the number of active and abandoned small to medium sized gold mines and underexplored prospects that lie along these gold mineralized systems, ACA Howe (Cinits, 1998) suggested a significant gold resource remains to be discovered in the San Lucas area. The veins in the property are 340° to 020° striking and West, East or vertical dipping pinch and swell veins. They may occur in lower order ‘splays’ off the main Palestina fault, within faults related to postulated graben development, or at fault intersections.
Generally, a main fault zone acts as the primary conduit for the auriferous fluids but the mineralized veins develop at splays or structurally complex areas that are more conducive to dilation and deposition than the large and straight major faults (Hodgson, 1993). The veins are typically several hundred metres long and ACA Howe (Cinits, 1998) interpreted the host systems to be two to five km wide based on topographic lineament analysis. Auriferous quartz veinlets also occur in stringers in the immediate footwall and hanging wall of the veins. Argillic and/or potassic alteration is associated with the veins.
Geochemical factors such as potassium alteration (i.e. K-feldspar and/or sericite) adjacent to quartz veins with >5% sulphide mineralization increase the possibilities for Au-bearing mineralization to occur.
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9. SANTA BARBARA PROPERTY EXPLORATION
9.2 Exploration and Prospecting Results
Seven gold-bearing veins were examined and sampled, and several more discovered during the property visit. Based on personal observations of mineralised exposures, cateos/pits, tunnels and adits, individual veins have estimated minimum observed lengths of 50 metres up to 400 metres. They are generally parallel, with relatively little azimuthal variation, with 030o to 060o trends and overall steep to sub-vertical, locally vertical dips. Vein widths may reach 0.5 metres, e.g. at Esperanza-Bonanza. Widths include quartz veining and associated alteration, typically characterised as chlorite+/- carbonate+/-argillic minerals+/-sulphide mineralisation. Alteration widths may range from several cm to almost a metre.
Without systematic exposure of the veins, it is difficult to determine width (and grade continuity) of any one vein. Veining does pinch and swell, which is a normal phenomenon for the area, and in some cases, splits or branchiates, though the host anisotropies are much more consistent.
Two adits/tunnels were re-sampled to provide information on vein and country rock mineralisation and gold values, notably two that were excavated as part of a series of exploration tunnels along the extension of the Esperanza vein, re-named the Esperanza-Barbara vein.
Table 2. Sample Locations and results, 2018 Property Examination
CENTRE BARBARA AREA
Veins personally examined have median ranges of 0.3 to 0.4 metres width, typically exposed from artisanal workings in oxidised or partially oxidised rock. All display at least two stage quartz/silica ingress and two phase sulphidisation, with variable replacement by both. The host is often a modified 51
June, 2019 - Geological Report Santa Barbara Property, Colombia gneiss though in upper elevation workings, there are indications that Phanerozoic sediments or volcanogenic sediments were partially mineralised and worked.
Vein dips are generally steeply south-east dipping, and form a parallel series of veins with between 50 and 250 metres strike length, this based on the large number of exposures by artisanal miners on individual veins. The strike extensions of all of these veins are open. Individual veins pinch and swell within a continuous weak zone of brittle deformation, typically seen on the south-east side. Occasionally, sub-parallel veins are noted in the hangingwall.
Sulphide mineralisation is confined to the quartz veining, with minimal ‘bleeding’ or diffusion into the country rock. Assays indicate only negligible to weakly anomalous gold in the hangingwall and footwall. Similarly, related alteration is narrow, and characterised by a cm to dm wide zone of weak hæmatite ± chlorite ± carbonate ± silica, with a broader ‘halo’ of potassic alteration (feldspar).
Vein locations and trends are shown overleaf. The Mina de Oro La Cabaña SAS gold mine to the North is also shown. Traces of the main vein, Espernza-Barbara exploited and a second previously mined vein are based on underground and surface observations from the 2014 and 2018 visits.
Typically, individual locations of mineralised veining are characterised by a single vein that can be traced along strike relatively easily by surface exposures and artisanal mining.
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Figure 25 a,b Property Location, with vein trends.
Figures 26 Overleaf, Sampling Locations
The red-dashed line indicates the trend of the Esperanza-Barbara gold-bearing vein. Yellow dashed lines represent traces of gold-bearing quartz veining, with surface exposures and artisanal workings. (All were checked and verified by the author).
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Proposed
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Figures 30-32 Artisanal Mining on the Property.
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10. DRILLING
There are no known records of any surface or underground drilling on the property.
11. SAMPLE PREPARATION, ANALYSES & SECURITY
All samples were taken under the direct supervision of the author either as systematic chip sampling along the walls, roof or floor of adits, or grabs from muck piles/dumps at old workings.
Samples were tagged, placed in sample bags and securely tied before shipment to SGS Laboratories of Medellin. Transport and delivery were by an external engineer nominated by the author.
Laboratory sample preparation and analysis is listed as relevant codes with summary notes, with the results, provided in the Appendix. For additional information on SGS QA/QC, go to: www.co.sgs.com.
12. DATA VERIFICATION
Samples taken during the property visit are essentially of an exploratory nature, and provide preliminary findings on the prospectivity of the property. Channel sampling verified the veining is host to anomalous gold previously reported by SSM. The sampling was exploratory in nature and follow-up verification of the results would form part of a recommended Phase II programme.
13. MINERAL PROCESSING & METALLURGICAL TESTING
Initial plant tests of the Esperanza-(Barbara) vein were carried out by LACC Minerals SAS with material from mineralisation recovered from crown pillars and weathered material from near surface (saprolitic zones). The work was conducted during rehabilitation of old workings that exploited the Esperanza-Barbara vein from the No. 2 level of the former Mariana Mine shaft. Results are not necessarily representative of the grades and recoveries produced. In May-June 2016, material from LACC Minerals SAS 2014 sampling of non-weathered ore was processed at the plant and yielded average recoveries of >85% (information is from unpublished LACC Minerals SAS reports).
Further processing of ore from unknown third parties achieved better particle size using standard crushing and comminution of ore with up to >60% passing 75µ (200 mesh) prior to cyanide leaching. The cyanide leaching process is monitored hourly for a 48 day period and the effectiveness of the process is considered optimal for current ore feed rates to the plant.
The above information was provided by MGC. The author cannot verify the results, and appropriate caution is advised.
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14. MINERAL RESOURCE ESTIMATES
There are no known resource estimates on the property.
15. MARKET STUDIES & CONTRACTS
None carried out.
16. ENVIRONMENTAL STUDIES, PERMITTING, & SOCIAL OR COMMUNITY IMPACT
Work on the property is covered by a valid exploration licence, see Chapter 4. No environmental studies have been undertaken, nor community studies completed.
The company is engaged in community relations participating in social events, contributions and in constant reach of local community leaders.
The company operates in a rural region with limited infrastructure and resources, hiring local labour and sourcing materials from local centres whenever possible. The nearest organised settlements are Pueblito Mejía, six km to the North, and Norosi, 10 km to the South.
Further engagement with the small local communities and landowners is planned as the project evolves and grows.
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17. ADJACENT PROPERTIES
The South adjacent ‘Uchuva’ property, Licence Plate 0-439, NMR Code HGQH-01, Concession Contract L685), held by LACC Minerals S.A.S. of Medellin, Colombia, was previously examined by the author as part of property visit and technical evaluation. The information presented below was approved by MGC under an agreement with LACC Minerals SAS.
Past exploration included surface prospecting, sampling, geochemical soil sampling & stream sediment sampling, minor trenching and underground work, this by LACC Minerals SAS. Underground exploration and exploitation were carried out by artisanal workers, LACC Minerals SAS of Colombia and Rover Metals Corp. of Vancouver, BC.
Reconnaissance level geochemical rock and soil sampling and low-level geological studies were conducted across the property and North, onto what is now the Santa Barbara property. Rover Metals Corp. prospecting included sampling of exposures and along drainages.
Sampling over the (younger) ?Jurassic J1-2n ‘tuff’ unit was not carried out. At that time, it is not known if the sequence has the potential to host gold.
Gold assays from these programmes indicated two main epicentres, La Esperanza (vein), approximately 75 metres from the southern boundary of MGC’s Santa Barbara property, and Botellos, located in the south-west of the Uchuva property.
Results from lithogeochemical sampling indicated a broad correlation between gold and silver and to some extent, copper and zinc.
The (La) Esperanza showing was considered prospective, this due in no small part to artisanal mining on it. The 0.3 to 0.65 m wide vein was exposed on surface and explored and mined on three levels northwards following the vein to at least the property boundary. The vein trends approximately 020o to 035o with sub-vertical East and West dips. Mineralisation is weakly to moderately pyritic with very weak to trace amounts of chalcopyrite and rare sphalerite and galena. Silver is likely tied up with gold within pyrite or as an amalgam with (native) gold. The host vein is predominantly quartz, banded, with minor chlorite and opaque minerals, with sulphide and opaque content generally not exceeding 5%.
Quartz/silica mineralisation is three-phase, an early barren generally massive to vaguely banded phase with at least one phase of silica-sulphide-(carbonate) ingress and replacement. A fourth phase may be present as barren white coarse drusy quartz recrystallising the sulphides.
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Mina La Esperanza/Veta Esperanza
Artisanal mining on Uchuva included the construction of at least two vertical shafts, Esperanza, and Botellos. The mine is located at GPS 998119E – 1447904N, with a vertical shaft to 22 metres depth. There is a decline for approximately 25 metres, with three levels that follow the trend of the Esperanza Vein.
Figure 27 A cross-section of the workings
The decline/access tunnel at 40o, and level one were subsequently joined with additional working up to near surface at the end of the decline. The enlarged space has since partially collapsed. The first level is 15 metres below surface, the second 19 metres, and the third 22 metres. With exploitation of the vein, and proximity to a local creek, level three has flooded, requiring pumping for access, with the second half of the level collapsed.
At time of the 2014 property visit, the decline to the first level had collapsed in the back, the second level had been closed off with imminent collapse due to workings above, and the shaft had flooded to 19 metres below surface, precluding sampling on these lower levels.
The author was able to obtain several chip samples from the decline close to the entrance. A small muck pile of discarded material was also sampled as there was significant pyrite-silica-potassic alteration noted in much of the rock.
Sampling was previously carried out by Rover Metals and its contractors in 2013-2014.
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Figure 34 La Esperanza-Barbara vein
Below, representative material from the vein is shown below (dump, and access tunnel, respectively).
Figure 28 La Esperanza mineralisation
Table 3 Access tunnel sampling
Sample Au (g/t) Width (m)
J918261 5.32 0.40
J918264 13.50 0.45
J918265 9.51 0.45
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Previous sampling of the access tunnel, ‘Level 0’, by Rover Metals included the following, Table 4: Table 4 Level 0 sampling
Sample Au (g/t) Width (m)
R0846 10.30 0.18
R0847 6.86 0.18
R0848 29.70 0.20
Previous sampling by Rover Metals contractor personnel included work on Levels 1 and 2.
Figure 29 Level 1 Chip sampling
Table 5 Level 1 Chip sampling
Sample Au (g/t) Width (m)
R0060 10.70 0.18
R0061 7.03 0.27
R0063 35.90 0.40
R0066 30.80 1.10
R0068 42.70 0.82
R0071 9.11 0.27
R0074 15.50 0.30
Level 2 chip sampling and adit are shown below, Fig. 37. This sampling pre-dates inspection by the author. Ground conditions precluded re-sampling.
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Figure 30 Level 2 Chip sampling Looking South-West Figure 31 Level 2 topography & sampling
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Table 6 Level 2 sampling
Sample Au (g/t) Width (m)
R-0685 2.31 0.16
R-0688 1.82 0.14
R-0689 11.50 0.08
R-0690 1.85 0.01
R-0691 2.28 0.25
R-0692 0.01 0.25
R-0693 11.60 0.10
R-0694 1.66 0.10
R-0695 1.50 0.08
R-0696 0.06 0.16
At time of the 2104 visit, Level 2 was sealed off. Following dewatering, there was an attempt to access the level again, but for safety reasons, there was no additional sampling.
The lowest Level, level 3, was checked by Rover Metals Corp. after dewatering. There had been some additional exploitation and partial collapse and for safety reasons, limited sampling was carried out. Fig. 32 Sample Locations, Level 3, illustrates the level profile.
Figure 32 Level 3 sampling
Samples in black are pre-property visit, those in brown, post-visit. All samples taken by Rover Metals Corp. contractor personnel.
Level 3 sampling was hampered by unsafe ground conditions (partial collapse). Channel sampling along the length of the level was planned. Four sample areas, (‘Stations’), were sampled.
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Table 7 Level 3 sampling
Sample Au (g/t) Width (m)
R0117 0.65 0.20
R0120 2.55 0.18
R0123 18.70 0.19
R0126 1.29 0.23
R0129 6.06 0.18
R0132 0.12 0.14
R0135 31.60 0.22
R0138 0.01 0.13
R0141 0.04 0.17
Less than 100 metres from the Northern boundary of Santa Barbara is the privately held La Cabaña Gold Mine (Mina de Oro La Cabaña SAS), a private enterprise mining at least one major quartz vein. Two veins were previously exploited during artisanal operations prior to official mine construction and production. Grades and overall production are unknown.
The larger exploited vein is shown left,
Figure 33 La Cabana ore
Primary ore is characterised by multi-phase silica ingress, with brecciation, recrystallisation and replacement, with two phase sulphidation, represented by an early low-grade pyritic phase superposed by secondary pyrite with weak to sparse, base metals. Chlorite and sparse to rare carbonate mineralisation are associated though the paragenesis is unclear. Image courtesy of La Cabana Gold Mine.
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Figure 34 & Figure 35 2016 main gold vein at La Cabana Gold Mine At 60 m depth, showing extensive secondary pyrite and sphalerite mineralisation. This mineralisation can be associated with higher gold grades. Images courtesy of La Cabaña Gold Mine.
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There are a number of artisanal mining centres located about 20km to the North, including the large artisanal mining community of La Gloria (Area de Reserva Especial (ARE) Pueblito Mejia). Production and grades are unknown. Assay results summary was provided to the author by a representative of LACC Minerals, and are shown below, Table 8. These results cannot be verified, and no inference is given in terms of correlation between this mining area and Santa Barbara.
La Gloria Sample Assay results Au Sample Number (g/t) MP1-001-V 23.27 MLM-001-V 40.66 MP2-002-V 15.01 MTR-001-V 12.84 MTR-002-V 60.2 MTR-003-V 144.59 MBD-001-V 6.42 MOG-001-V 141.31 MM-001-V 26.02 MM-002-V 231.69 MFJ-001-V 8.89 MF-001-V 142.01 MF-002-V 134.42 MF-002-R 32.69 MF-003-V 294.19 MCC-001-V 32.54 -SGS Laboratories Medellin, November 21, 2013
AngloGold Ashanti conducted a large exploration programme in the Norosi area, several km to the South, it targeting porphyry copper. The area was drill tested but results are unknown. The area lies within a caldera whose northern margin is South adjacent to the Santa Barbara ground.
The large artisanal complex of the Pueblito Mejia area, also known as Mine La Gloria, some 12 km to the north-east has active and inactive gold exploitation over an area exceeding 10 km2. There is relatively little information available due to its informal nature, though Carmona et al., (2005) provide some geological data. There are at least 30 operational and abandoned mines in the area.
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Exploited veins include La Gloria, El Turco, La Mariana, La Cabana, Bejuco, and Nueva Estrella. Host rocks are Pre-Cambrian basement quartz-(potassic) feldspar-biotite gneiss with minor amphibolites and migmatites, and younger volcanic rocks. Volcano-sedimentary rocks are exposed at the Aledana zone. Mining operations are loosely combined into four main areas, (though Gloria is often used as a collective name for all), La Gloria, Turco, Fogaje and Los Romanes.
O’Dowd, 2011, reports grabs from dumps and stockpiles assayed from 5.84 to 171.5 g/t gold.
The majority of the veins may be characterised as quartzose, with varying pyrite, sphalerite and subordinate galena and chalcopyrite. Some are in part brecciated and or lie within fault zones, and may post- or pre-date local and regional deformation. Vein orientations are variable, generally north north- east to east north-east trending, with steep dips East or West.
Unconfirmed and unverifiable grades can reach 50-120 g/ton (El Turco, La Gloria). Average ore grades can be variable. Widths range from several cm to nearly one metre. Extraction is limited to some extent more by economics (power, air quality, electricity costs), than grade. Shafts have been constructed to depths exceeding 40 metres with drifts of over 100 metres. There are no known accurate numbers due to the artisanal nature of the mining. There are no known technically reliable resource estimates.
Cabia Goldfields held ground totalling almost 7,000 ha, primarily North of the mining community of Gloria. This covered ground now held by Mina La Cabaña. There are extensive artisanal workings, including a number of shafts with minor to extensive underground development. There are at least four major underground mining operations exploiting a minimum 600 metre trend. Underground development is reported to be up to 300 metres below surface. (Pers. observations and from informal talks with SMM, LACC personnel and contractors). Cabia Goldfields’ Mejia property, to the north- east, partially covers an area around La Gloria. The 2011 Technical Report by O’Dowd indicated Cabia conducted regional reconnaissance exploration and sampling as an evaluation of the property. Subsequently 61 km2 of helicopter-borne magnetic and radiometric surveys were completed along 695 line km. Follow-up geological mapping, sampling, and IP/resistivity surveys and 5,000 metres of diamond drilling were recommended.
Mill & Operations
Access infrastructure, camp, mill and mine rehabilitation have been completed by Sociedad Minera Malabar SAS (an arms-length company of Malabar Gold Corp.) on the adjacent Title 0-439 (Title Owner, LACC Minerals, of Medellin, Colombia) during June-December 2015 and January-September 2016). Investment was by Malabar Gold Corp through its wholly owned subsidiary Sociedad Minera Malabar SAS. The plant equipment is wholly owned by another MGC subsidiary, Minera La Fortuna S.A.S (Colombia), and includes power plants, vehicles, tools and mining equipment.
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The Operation Contracts (‘Contrato de Operación’) provide for future milling and processing of ore from Licence 16061C2, Licence 16061, Licence, 0-439, and any other unspecified sources that have legal title or traditional mining as source for ore. Sociedad Minera Malabar SAS currently has its own 2018 license granted by the Colombian National Army to Purchase and Use explosives for its mining concession IEV16061.
SMM also has the right to sell and export gold as a mining operator (Rucom) from the properties they operate or receive ore from.
The author was given permission by R. Sanabria, MGC founding partner and President of Minera La Fortuna SAS and Sociedad Minera Malabar SAS to review the mill. At time of visit, the mill was on care and maintenance with several upgrades in process or pending, including the installation of larger cyanide tanks, ore bins and a conveyor for increasing efficiencies in the milling process.
Figure 36. A flow chart for mill operations (2018) Image provided by R. Sanabria.
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On-site inspection indicated: 1. Two precipitation tanks with a depleted pregnant solution tank with ‘exterior’ water tank containment for recirculation. 2. Two Cyanide Leaching tanks, capacity 14 m3, with two more currently being installed. 3. A five tonnes per hour crusher, with manual feed, and a pulveriser. 4. Two ball mills, a primary and a secondary, rated at, respectively, 150 mesh and 325 mesh operating at 100 tpd. 5. Two operating diesel power plants, one 75 KvA, the other, 125 KvA. The former is adequate to operate crushing and milling, or crushing and cyanidation. Ball mill operations require utilisation of the 125 KvA generator. 6. No stockpile of ore.
Plans for additional equipment include a secondary crusher (pulverizer), and a hydrocyclone for coarse reject recirculation between the two ball mills.
An unofficial recovery of 90% was verbally reported by R. Sanabria and the Plant’s technical personnel. Independent tests on the mill processing, and recovery rates are unavailable.
Figure 37 Mill and Processing Plant
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Figure 38 Camp Site, Office Images from MGC files.
The operation contract for title 0-439 is currently being disputed by the company, the details of which are confidential, and before a Colombian court.
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Figure 39, Environmental License approval to operate the mill and plant. From MGC Files, March 2018
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18. OTHER RELEVANT DATA & INFORMATION
Illegal armed groups, guerrilla operations and drug trafficking pose risks to travellers. The Property region has a large police and military presence. The author did not experience any security issues during his visits.
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19. INTERPRETATION & CONCLUSIONS
The Santa Barbara title is located West of the town of Rio Viejo, Bolivar province, northern Colombia, within a traditional mining area that has a history of over 200 years of gold mining and to this date, has an estimated 40,000 informal miners and 70 small miner associations.
The regional structural relationship between first and second order faults like Mejia, Nutria and Norosi and local, mine scale production lineaments, breaks and personally observed faults suggests the area lies within a very productive gold belt characterised by a series of often parallel, steeply dipping mineralised quartz veins. The fact that similar oriented faults are dominant at many mine sites suggests a spatial if not genetic relationship.
The author visited the property, and has confirmed a Au mineralized system, including new discoveries of adjacent or proximal, gold-bearing veins. There is more than a reasonable expectation of continuity of the veining at depth and along strike, though an increase in width and grade cannot be determined.
The property is concluded to have potential for additional gold and discoveries, and the author recommends further exploration work to produce a definable resource on the property. Recommendations are made for continued work on the property.
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June, 2019 - Geological Report Santa Barbara Property, Colombia 20. RECOMMENDATIONS
For future exploration, the following is recommended:
• Follow-up prospecting and sampling along the trends located during the recent property examination. This includes higher elevations where the volcanic sequence is better preserved. • Trenching and tunnelling along the veins. This is a cheaper, more effective option than drilling, and provides a more representative sample size. • The parallelism of the known mineralised veins could imply similar north-easterly trending structures to the West, at similar and higher elevations. Additional prospecting is certainly warranted here. • Additional prospecting is warranted along the Esperanza-Barbara vein and the underground work extended North, with a view to sampling primary mineralisation. At time of the property visit, preliminary work was being undertaken to access the Esperanza-Barbara vein via excavation of a cross-cut, and below, another adit, at or near the mineralised face seen in Fig. 24, prev. • All other veins should all be sampled then underground work prioritised, with a stepped approach to development. There are good indications of high-grade primary, unoxidized ore underground which is typically not mined artisanally due to hardness and processing difficulties. The parallel and proximal nature of the veins will improve efficiencies in development, reducing costs on cross-cuts, overall access and ventilation.
Table 9. Budget
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22. DATE AND SIGNATURE PAGE
This report titled "Geological Report on the Santa Barbara Property, (Colombia), was prepared and signed by
Toby N.J. Hughes, Hons. B.Sc., P. Geo., P. Geol. Vancouver, British Columbia.
In Vancouver, British Columbia, this 26th day of June, 2019.
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CERTIFICATE OF QUALIFIED PERSON
I, Toby N.J. Hughes, P. Geo., P.Geol., of Vancouver, BC, Canada, do hereby certify that:
I have a B.Sc. Hons. Degree, Geology, from The University, Dundee, Scotland (1980).
I am registered with the Association of Professional Geoscientists of Ontario (APGO) and the Northwest Territories and Nunavut Association of Professional Engineers and geoscientists, (NAPEG).
I have practiced my profession continuously for 38 years since graduation.
The author holds no direct interest in Malabar Gold Corp., nor SMM.
I am responsible for reviewing this report, and have visited the property in June 2014 and April 2018.
I have had no prior involvement with the property that is the subject of this report.
As of the date of the certificate, to the best of my knowledge, information and belief, the report contains all scientific information to be disclosed to make the Report not misleading.
I make this Report effective as of the 20th day of June, 2019
Toby Hughes, P. Geol., P. Geo.
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June, 2019 - Geological Report Santa Barbara Property, Colombia ASSAY RESULTS
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June, 2019 - Geological Report Santa Barbara Property, Colombia
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