Minera Tres Valles Copper Project Salamanca, Coquimbo Region, Chile
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MINERA TRES VALLES COPPER PROJECT SALAMANCA, COQUIMBO REGION, CHILE NI 43-101 F1 TECHNICAL REPORT MINERAL RESOURCE ESTIMATE, CHLORIDE LEACH PROCESSING, and DON GABRIEL MANTO PIT EXPANSION Prepared For Minera Tres Valles Sprott Resource Holdings Inc. Qualified Persons: Michael G. Hester, FAusIMM Independent Mining Consultants, Inc. Gabriel Vera President, GV Matallurgy Enrique Quiroga Q & Q Ltda. Report Date: March 29, 2018 Effective Date: March 29, 2018 Minera Tres Valles Copper Project i Salamanca, Coquimbo Region, Chile March 29, 2018 Date and Signature Page The effective date of this report is March 29, 2018. See Appendix A for certificates of the Qualified Persons. (Signed) “Michael G. Hester” March 29, 2018 Michael G. Hester, FAusIMM Date (Signed) “Gabriel Vera” March 29, 2018 Gabriel Vera, QP Date (Signed) “Enrique Quiroga” March 29, 2018 Enrique Quiroga, QP Date INDEPENDENT Technical Report / Form 43-101F1 MINING CONSULTANTS, INC. Minera Tres Valles Copper Project ii Salamanca, Coquimbo Region, Chile March 29, 2018 Table of Contents 1.0 Summary . 1 1.1 General . 1 1.2 Property Description and Ownership . 1 1.3 Geology and Mineralization . 2 1.4 Exploration Status . 3 1.5 Development and Operations . 5 1.6 Mineral Resources . 7 1.7 Mineral Reserves . 9 1.8 Conclusions and Recommendations . 10 2.0 Introduction . 12 2.1 Issuer and Terms of Reference . 12 2.2 Sources of Information . 12 2.3 Qualified Persons and Site Visits . 13 3.0 Reliance on Other Experts. 13 4.0 Property Description and Location . 14 4.1 Property Location . 14 4.2 Land Area and Mining Claim Description . 14 4.3 Agreements and Encumbrances . 15 4.4 Permit Status . 16 5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography . 18 5.1 Access . 18 5.2 Climate . 18 5.3 Local Resources and Infrastructure. 18 5.4 Physiography . 18 6.0 History . 19 7.0 Geologic Setting and Mineralization. 22 7.1 Regional Geology . 22 7.2 District Geology. 22 7.3 Deposit Geology . 27 7.3.1 Papomono . 27 7.3.2 Don Gabriel . 30 7.4 Mineralization . 32 7.4.1 Papomono . 32 7.4.2 Don Gabriel . 33 8.0 Deposit Types . 35 9.0 Exploration . 36 9.1 Initial Exploration . 36 9.2 Mine-site Exploration . 36 9.3 District Targets . 37 10.0 Drilling . 38 INDEPENDENT Technical Report / Form 43-101F1 MINING CONSULTANTS, INC. Minera Tres Valles Copper Project iii Salamanca, Coquimbo Region, Chile March 29, 2018 Table of Contents (Continued) 11.0 Sample Preparation, Analyses and Security . 42 11.1 Sample Preparation . 42 11.2 Analysis . 42 11.3 QA/QC Programs . 43 11.4 Sample Security . 43 12.0 Data Verification . 45 12.1 Don Gabriel . 45 12.2 Papomono . 45 13.0 Mineral Processing and Metallurgical Testing . 46 13.1 Acid Heap Leach Process . 46 13.1.1 Plant Operation . 46 13.1.2 Metallurgical Test Work . 48 13.1.3 Recovery Model . 53 13.1.4 Recovery Curves . 54 13.1.5 Acid Leach Recovery Summary . 57 13.2 Chloride Leach Process . 59 13.2.1 Chloride Leach Test Program . 59 13.2.2 Chloride Leach Test Results . 63 13.2.3 Column and Heap Leach Comparison . 66 13.2.4 Impact of Salt Addition in Agglomeration . 67 13.2.5 Chloride Presence in Leach Solutions . 68 13.2.6 Crushed Ore Screen Size . 68 13.2.7 Recovery Model . 68 13.3.8 Copper Recovery Curves . 70 13.3.9 Summary of Chloride Leach . 72 14.0 Mineral Resource Estimates . 74 14.1 Mineral Resource . 74 14.2 Description of the Block Models . 81 14.2.1 Don Gabriel . 81 14.2.2 Papomono . 101 15.0 Mineral Reserve Estimates . 133 16.0 Mining Methods . 134 16.1 Don Gabriel . 134 16.1.1 Dilution and Ore Loss . 134 16.1.2 Slope Angles . 134 16.1.3 Economic Parameters . 134 16.1.4 Mining Phases . 136 16.1.5 Mine Production Schedule . 145 16.1.6 Waste Storage Facilities . 154 16.1.7 Mining Equipment . 157 16.2 Papomono and Don Gabriel Veins. 157 INDEPENDENT Technical Report / Form 43-101F1 MINING CONSULTANTS, INC. Minera Tres Valles Copper Project iv Salamanca, Coquimbo Region, Chile March 29, 2018 Table of Contents (Continued) 17.0 Recovery Methods . 158 17.1 Current Process Description . 158 17.2 Historic Plant Performance . 160 17.3 Chloride Leach Process Description . 162 17.4 Upgrades to Existing Plant. 164 17.5 Power and Water Requirements . 165 18.0 Project Infrastructure . 166 18.1 Water, Power, Roads and Land . 166 18.2 Plant Infrastructure . 167 18.3 Mine Infrastructure . 168 19.0 Market Studies and Contracts . 170 20.0 Environmental Studies, Permitting and Social or Community Impact . 172 20.1 Permits and Environmental Licenses . 172 20.1.1 RCA 012 Manquehua Prospection Tunnel . 172 20.1.2 RCA 283 Manquehua Prospection Tunnel Modification . 172 20.1.3 RCA 265 MTV Project . 173 20.2 Land Easements . 173 20.3 Water Rights and Use . 173 20.4 Community Relations and Social Licenses . 175 20.5 Health and Safety Performance . 176 20.6 Mine Closure . 176 21.0 Capital and Operating Costs . 179 21.1 Capital Costs . 179 21.2 Operating Costs . 179 22.0 Economic Analysis . 179 22.1 Economic Results . 179 22.2 Sensitivity Analysis . 180 22.3 Royalties . 181 22.4 Tax Considerations . 181 23.0 Adjacent Properties . 183 24.0 Other Relevant Data and Information . 183 25.0 Interpretation and Conclusions . 184 26.0 Recommendations . 185 27.0 References . 187 Appendix A. Certificates of Qualified Persons . 189 Appendix B. Mining Claims . 194 INDEPENDENT Technical Report / Form 43-101F1 MINING CONSULTANTS, INC. Minera Tres Valles Copper Project v Salamanca, Coquimbo Region, Chile March 29, 2018 List of Tables 1-1 Mineral Resources . 7 1-2 Mineral Reserves . 9 1-3 Recommendations for Ongoing Work . 11 10-1 Summary of Drilling Data . 39 13-1 Copper Ore Crushed and Stacked in the MTV Plant since Startup . 46 13-2 Origin of Treated Copper Ore between 2010 and October 31, 2017 . 47 13-3 Copper Recovery Based on Copper Cathode Production . 47 13-4 Estimated Recoverable Copper in the Plant on October 31, 2017 . 48 13-5 Corrected Copper Recovery as of October 31, 2017 . 48 13-6 Copper Head Grades for SGS Column Tests . 49 13-7 Analysis of Impurities in PLS (September 2017 Composite) . 50 13-8 Copper Recovery for the First 3m of the SGS Column Tests (Columns 1-6) 50 13-9 Copper Recovery for the 3m SGS Column Tests (Columns 7-12) . 50 13-10 Copper Recovery in the Top Meter of the 6m SGS Column Tests (Cols 1-6) 51 13-11 Copper Recovery in the Top Meter of the 3m SGS Column Tests (Cols 7-12) 51 13-12 Head and Tailings Copper Grades for MTV Heap Tests . 52 13-13 Head Copper Grades for MTV Column Tests . 52 13-14 Copper Recovery for Heap Tests at ~130 Days of Operation . 52 13-15 Copper Recovery for Column Tests at ~130 Days of Operation . 53 13-16 Estimated Material Distribution and Grades for Recovery Model. 53 13-17 Estimated Copper Recovery for Papomono and Don Gabriel at 300 Days . 54 13-18 Estimated Combined Copper Recovery for Papomono and Don Gabriel . 54 13-19 Comparison of Copper Recovery between Test Conditions and Extrapolated to 300 Days . 56 13-20 Don Gabriel Column Leach Test Conditions – Chloride Leaching. 60 13-21 Papomono Column Leach Test Conditions – Chloride Leaching. 61 13-22 Don Gabriel and Papomono Heap Leach Test Conditions – Chloride Leaching. 62 13-23 Don Gabriel Column Test Results – Chloride Leaching. 63 13-24 Papomono Column Test Results – Chloride Leaching. 64 13-25 Average of Don Gabriel and Papomono Column Test Results – Chloride Leach. 65 13-26 Don Gabriel and Papomono Heap Test Results – Chloride Leaching. 66 13-27 Don Gabriel and Papomono Heap and Column Test Results Comparisons - Chloride Leaching . 67 13-28 Preliminary Sulfation Test Results . 68 13-29 Estimated Recovery for Papomono and Don Gabriel under Chloride Leach Conditions at 120, 140, 160, and 180 Days Leaching . 69 14-1 Mineral Resource . 74 14-2 Economic Parameters for Mineral Resource Estimates . 76 14-3 Don Gabriel Model Rock Codes . 83 14-4 Summary Statistics of Assays and Composites in DG Manto-Total Copper 88 14-5 Summary Statistics for Assays in Don Gabriel Veins . 91 INDEPENDENT Technical Report / Form 43-101F1 MINING CONSULTANTS, INC. Minera Tres Valles Copper Project vi Salamanca, Coquimbo Region, Chile March 29, 2018 List of Tables (Continued) 14-6 Summary Statistics for Composites in Don Gabriel Veins . 92 14-7 Specific Gravity and Bulk Density for Don Gabriel Units . 99 14-8 Mineral Resource for Don Gabriel Veins – 0.64% CuT . 100 14-9 Papomono Rock Types . 101 14-10 IMC Grade Shells . 102 14-11 Cap Grades for Papomono Deposits – Assays . 109 14-12 Summary Statistics of Assays in Grade Shells . 110 14-13 Summary Statistics of Composites in Grade Shells . 111 14-14 Ratio of Soluble Copper to Total Copper by Oxide vs Sulfide Dominant . 113 14-15 Grade Estimation Parameters for Copper . 122 14-16 Specific Gravity and Bulk Density for Papomono Units . 129 15-1 Don Gabriel Mineral Reserve . 133 16-1 Don Gabriel Economic Parameters for Pit Design . 135 16-2 Summary of Mining Phases – Salt Leach Case . 137 16-3 Mine Production Schedule . 146 16-4 Filling Curve for Don Gabriel Waste Storage . 154 17-1 Historic Summary of Crushing Plant Throughput . 161 17-2 Historic Cathode Production . 161 18-1 Mining Equipment Owned by MTV . 170 20-1 Land Ownership and Easements .