TECHNICAL REPORT NAMIQUIPA SILVER DEPOSIT NAMIQUIPA, CHIHUAHUA MEXICO
29 November 2012
PREPARED FOR CERRO RESOURCES NL BY
T. J. Carew M.Sc, P.Geo., Principal, Reserva International LLC
B. R. Fleshman BS Geology, FAusIMM (CP Geol) Exploration Manager Cerro Resources
T. A. Leahey BSc (Hons), MAusIMM (CP) of Computer Aided Geoscience Pty Ltd
Namiquipa Deposit Technical Report
DATE AND SIGNATURE PAGE
The effective date of this Technical Report, entitled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” is 29 November 2012. The undersigned have prepared the Technical Report in accordance with the National Instrument 43-101F1 guidelines for Technical Reports.
29 November 2012
T J Carew, P.Geo. (APEGBC)
29 November 2012
B R Fleshman, FAusIMM (CP)
29 November 2012
T A Leahey, MAusIMM (CP)
Page i Namiquipa Deposit Technical Report
CERTIFICATE OF AUTHOR
I, Timothy J Carew, do hereby certify that:
1. I reside at 12955 Fieldcreek Lane, Reno, NV 89511, USA
2. I am a graduate from the University of Rhodesia with a B.Sc. (Hons) Degree in Geology (1970), and of the University of London (RSM – 1982), with a M.Sc. Mineral Production Management degree, and I have practiced my profession continuously since that time.
3. I am a member of the Association of Professional Geoscientists and Engineers of British Columbia (Membership Number 19706).
4. I am a consulting geoscientist and the Principal of Reserva International LLC., a company incorporated in Nevada, USA.
5. I am a Qualified Person for the purposes of NI 43-101 with regard to a variety of mineral deposits and have knowledge and experience with Mineral Resource and Mineral Reserve estimation parameters and procedures and those involved in the preparation of technical studies..
6. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43- 101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101.
7. I was responsible for the overall compilation and review of all sections of the Technical Report entitled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November 2012 (the “Technical Report”) by Cerro Resources NL (“Cerro”). I visited the deposit in October 2012
8. I have no personal knowledge as of the date of this certificate of any material fact or change, which is not reflected in this report.
9. Neither I, nor any affiliated entity of mine, is at present, under an agreement, arrangement or understanding or expects to become, an insider, associate, affiliated entity or employee of Cerro Resources NL or any associated or affiliated entities.
10. Neither I, nor any affiliated entity of mine own, directly or indirectly, nor expect to receive, any interest in the properties or securities of Cerro Resources NL or any associated or affiliated companies.
Page ii Namiquipa Deposit Technical Report
11. Neither I, nor any affiliated entity of mine, have earned the majority of our income during the preceding three years from Cerro Resource NL or any associated or affiliated companies.
12. I have read NI 43-101 and Form 43-101F1 and have prepared this report in compliance with NI 43-101 and Form 43-101F1, and have prepared the above mentioned sections of the report in conformity with generally accepted Canadian mining industry practice. 13. I consent to the filing of this report with any stock exchange and other regulatory authority and any publication by them, including electronic publication in the public company files on their websites accessible by the public.
Signed by
“Timothy Carew” (Original Signed and Sealed)
Timothy J. Carew, P.Geo., B.Sc., M.Sc.
Dated this 29 November, 2012.
Page iii Namiquipa Deposit Technical Report
CONSENT OF AUTHOR
Timothy Carew
CONSENT OF QUALIFIED PERSON
I, Timothy Carew, consent to the public filing of the technical report titled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November 2012 (the “Technical Report”) by Cerro Resources NL (“Cerro”). I also consent to the publication by Cerro of any extracts from or a summary of the Technical Report for regulatory purposes, including electronic publication on Cerro’s website and news release. I certify that I have read the news release of Cerro dated October 24, 2012 that the Technical Report supports and that it fairly and accurately represents the information in the sections of the technical report.
Dated this 29th day of November 2012.
Timothy J. Carew
Page iv Namiquipa Deposit Technical Report
CERTIFICATE OF AUTHOR
Bill Fleshman 16025 Edmands Dr. Reno, NV 89511 Telephone: 775-219-5791 Email: [email protected]
I, Bill Fleshman do hereby certify that:
1. I am Exploration Manager and Senior Geologist contracted to Cerro Resources. 2. I graduated with a Bachelor of Science degree in geology from Western Washington State University in 1973. 3. I am a Chartered Professional and Fellow of the Australian Institute of Mining and Metallurgy. In addition I am a Member of the Society for Mining, Metallurgy and Exploration (SME). 4. I have worked as a geologist for a total of 37 since my graduation from university. 5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI43- 101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101. 6. I am responsible for the preparation of Sections 5 and 8 for the technical report titled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November 2012 (the “Technical Report”) by Cerro Resources NL (“Cerro”). I have spent approximately two years on the property. 7. I have had prior involvement with the property that is the subject of the Technical Report. The nature of my prior involvement is I am the exploration and resident project manager. My involvement has included managing the compilation of historic data as well as planning and implementing drill programs and coordinating geologic core logging. 8. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical Report, the omission to disclose which makes the Technical Report misleading. 9. I am not independent of the issuer applying all of the tests in section 1.4 of National Instrument 43-101. My income as a geologist is derived from payment from Cerro Resources. 10. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.
Page v Namiquipa Deposit Technical Report
11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.
Dated 29 November 2012
Signed
Bill R. Fleshman Exploration Manger
Cerro Resources Corporation
Page vi Namiquipa Deposit Technical Report
CONSENT OF AUTHOR
Bill R Fleshman
CONSENT OF QUALIFIED PERSON
I, Bill R. Fleshman, consent to the public filing of the technical report titled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November 2012 (the “Technical Report”) by Cerro Resources NL (“Cerro”). I also consent to the publication by Cerro of any extracts from or a summary of the Technical Report for regulatory purposes, including electronic publication on Cerro’s website and news release. I certify that I have read the news release of Cerro dated October 24, 2012 that the Technical Report supports and that it fairly and accurately represents the information in the sections of the technical report for which I am responsible.
Dated this 29th day of November 2012.
B R. Fleshman,
Page vii Namiquipa Deposit Technical Report
CERTIFICATE OF AUTHOR
Trevor Allen Leahey Managing Director Computer Aided Geoscience Pty Ltd Unit 4, 41 Riverview Terrace Indooroopilly QLD 4068 AUSTRALIA
I, Trevor Allen Leahey, BSc (Hons), Member AusIMM, Chartered Professional Geologist am a director of Computer Aided Geoscience Pty Ltd. I graduated with a BSc (Hons) Degree in Exploration Geology and Geophysics from University of Sydney in 1977. I am a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and a Chartered Professional Geologist. I have worked as a geologist for a total of 35 years since my graduation from university in base metal and gold exploration, mine development and mine geology. Under the auspices of Computer Aided Geoscience Pty Ltd I have worked as an independent consultant for 25 years providing geologic and data analysis services to a range of Australian, US and Canadian companies. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43- 101. I am responsible for the preparation of Sections 1-4, 6-7, 9-14, 23-27 of “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November, 2012 relating to the Property. I have worked on site during the period January to September 2012. I have had an involvement in the Property since January 2012. The nature of this involvement has been the geologic review and quality control of the exploration data and the resource calculation. As at the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading. I am not independent of the issuer in accordance with Section 1.4 of NI 43-101 as Computer Aided Geoscience holds shares in Cerro. In addition, in the last 3 years more than 50% of Computer Aided Geoscience’s consulting income has been sourced from Cerro Resources and associated companies. I have read National Instrument 43-101 and Form 43-101 F1, and the Technical Report has been prepared in compliance with that instrument and form.
Trevor A Leahey MAusIMM (CP) Dated 28 November 2012
Page viii Namiquipa Deposit Technical Report
CONSENT OF AUTHOR
Trevor Allen Leahey
Managing Director
Computer Aided Geoscience Pty Ltd
Unit 4, 41 Riverview Terrace
Indooroopilly QLD 4068
AUSTRALIA
CONSENT OF QUALIFIED PERSON
I, Trevor Allen Leahy, consent to the public filing of the technical report titled “Technical Report – Namiquipa Silver Deposit, Namiquipa, Chihuahua, Mexico” and dated 29 November 2012 (the “Technical Report”) by Cerro Resources NL (“Cerro”).
I also consent to the publication by Cerro of any extracts from or a summary of the Technical Report for regulatory purposes, including electronic publication on Cerro’s website and news release.
I certify that I have read the news release of Cerro dated October 24, 2012 that the Technical Report supports and that it fairly and accurately represents the information in the sections of the technical report for which I am responsible.
Trevor A Leahey, MAusIMM (CP) Dated 29 November 2012
Page ix Namiquipa Deposit Technical Report
TABLE OF CONTENTS
DATE AND SIGNATURE PAGE ...... i
ITEM 1: SUMMARY ...... 1
ITEM 2: INTRODUCTION ...... 3
2.1 Personnel and Responsibilities ...... 3
2.1.1 Reserva International Ltd ...... 3
2.1.2 Bill Fleshman ...... 3
2.1.3 Computer Aided Geoscience Pty Ltd ...... 3
2.2 Scope of Personal Inspections ...... 3
2.2.1 Reserva International Ltd ...... 3
2.2.2 Bill Fleshman ...... 4
2.2.3 Computer Aided Geoscience Pty Ltd ...... 4
ITEM 3: RELIANCE ON OTHER EXPERTS ...... 4
ITEM 4: PROPERTY DESCRIPTION AND LOCATION ...... 4
4.1 Location ...... 4
4.2 Tenements ...... 4
ITEM 5: ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 7
ITEM 6: HISTORY ...... 8
ITEM 7: GEOLOGICAL SETTING AND MINERALIZATION...... 9
7.1 Regional Geology ...... 9
7.1.1 Stratigraphy ...... 9
7.1.2 Structure ...... 10
7.1.3 Mineralization ...... 10
7.2 Local Geology ...... 10
7.2.1 Stratigraphy ...... 10
7.2.2 Structure ...... 11
Page x Namiquipa Deposit Technical Report
7.2.3 Alteration ...... 11
7.2.4 Mineralization ...... 12
ITEM 8: DEPOSIT TYPES ...... 18
ITEM 9: EXPLORATION ...... 20
9.1 Surface Mapping ...... 20
9.2 Soil Geochemistry ...... 20
9.3 Geophysical Surveying ...... 21
9.3.1 Magnetics ...... 21
9.3.2 Complex Resistivity Induced Polarization ...... 23
ITEM 10: DRILLING ...... 25
10.1 Cerro Resources Drilling ...... 25
10.2 Drill-hole Surveying ...... 25
10.2.1 Hole Collar Surveying ...... 25
10.2.2 Down-hole Surveying ...... 25
10.3 Data Capture ...... 27
10.4 Logging & Sampling Protocols ...... 27
10.4.1 Geological Logging ...... 27
10.4.2 Density Measurements ...... 27
10.4.3 Core Cutting ...... 29
10.4.4 Core Sampling ...... 29
10.5 Relationship of Drill Intersection to True Width ...... 29
ITEM 11: SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 30
11.1 Assaying Methods ...... 30
11.2 QAQC ...... 31
11.2.1 Duplicate Samples ...... 31
11.2.2 Standard Reference Samples ...... 33
11.2.3 Blanks ...... 48
Page xi Namiquipa Deposit Technical Report
11.5 Sample Security ...... 52
11.6 Assay Database ...... 52
11.7 Statement of Adequacy ...... 52
ITEM12: DATA VERIFICATION ...... 52
ITEM 13: MINERAL PROCESSING AND METALLURGICAL TESTING ...... 53
ITEM 14: MINERAL RESOURCE ESTIMATES ...... 53
14.1 Resource Estimation Database ...... 53
14.2 Geological Modelling ...... 53
14.2.1 Model Boundary ...... 53
14.2.2 Topography ...... 54
14.2.3 Geology ...... 54
14.3 Sample Statistics ...... 57
14.4 Compositing and Statistics ...... 59
14.5 Variography ...... 62
14.6 Grade Modelling ...... 62
14.7 Model Validation ...... 62
14.8 Resource Classification ...... 66
14.9 Resource Estimate ...... 66
14.10 Resource Estimate Risk ...... 67
ITEM 23: ADJACENT PROPERTIES ...... 68
ITEM 24: OTHER RELEVANT DATA ...... 68
ITEM 25: INTERPRETATION AND CONCLUSIONS ...... 68
ITEM 26: RECOMMENDATIONS ...... 68
ITEM 27: REFERENCES ...... 69
Page xii Namiquipa Deposit Technical Report
LIST OF FIGURES
FIGURE 1 LOCATION PLAN ...... 5 FIGURE 2 TENEMENT MAP ...... 6 FIGURE 3 SURFACE GEOLOGY MAP ...... 14 FIGURE 4 GEOLOGY CROSS SECTION ...... 15 FIGURE 5 GROUND MAGNETICS WITH VEIN OVERLAY ...... 16 FIGURE 6 S-N LONG SECTION THROUGH THE NAMIQUIPA PROSPECT SHOWING THE PRINCIPAL STRATIGRAPHIC UNITS (VIEW TO THE WEST) ...... 17 FIGURE 7 INTERPRETED VEIN MORPHOLOGY BASED ON HISTORIC RECORDS AND PLAN MAPS OF WORKINGS...... 17 FIGURE 8 FLUID FLOW PATH FOR NAMIQUIPA MINERALISATION CULMINATING IN THE UPPER LEVEL LEVEL OF 18 FIGURE 9 ZONATION WITHIN POLYMETALLIC AG STYLE EPITHERMAL MINERALISATION (COBETT, 2012)...... 20 FIGURE 11 SURFACE EXPRESSION OF RESISTIVITY AND LOCATION OF SURVEY LINES ...... 24 FIGURE 12 IP LONG SECTION OVERLYING GEOLOGY ...... 25 FIGURE 13 DRILL-HOLE LOCATION ...... 26 FIGURE 14 SUMMARY OF DRILL-HOLE COLLAR DIPS ...... 30 FIGURE 15 ELEMENTS ASSAYED UNDER METHOD ME-ICP61 ...... 31 FIGURE 16 DUPLICATE SAMPLE STATISTICS ...... 33 FIGURE 17 DISTRIBUTION OF STANDARDS BY DRILL-HOLE ...... 34 FIGURE 18 DISTRIBUTION OF STANDARDS WITHIN DRILL-HOLES ...... 34 FIGURE 19 OREAS 131A...... 37 FIGURE 20 OREAS 131A RPE PLOTS ...... 38 FIGURE 21 OREAS 133A...... 40 FIGURE 22 OREAS 133A RPE PLOTS ...... 41 FIGURE 23 OREAS 134A...... 43 FIGURE 24 OREAS 134A RPE PLOTS ...... 44 FIGURE 25 OREAS 36A...... 46 FIGURE 26 OREAS 36A RPE PLOTS ...... 47 FIGURE 27 DISTRIBUTION OF BLANKS BY DRILL-HOLE ...... 48 FIGURE 28 DISTRIBUTION OF BLANKS WITHIN DRILL-HOLES ...... 49 FIGURE 29 COMPARISON OF BLANK VS PRECEEDING SAMPLE VALUE - IN QUARTZ ...... 50 FIGURE 30 COMPARISON OF BLANK VS PRECEEDING SAMPLE VALUE IN RHYOLITE...... 51 FIGURE 31 PROPOSED PARAGENETIC SEQUENCE ...... 55 FIGURE 32 GEOLOGICAL ZONES ON THE 1800 LEVEL ...... 56 FIGURE 33 SAMPLE DATA - LOG PROBABILITY PLOTS ...... 58 FIGURE 34 BHA - CHANGE IN VARIANCE ...... 59
Page xiii Namiquipa Deposit Technical Report
FIGURE 35 COMPOSITE DATA - LOG PROBABILITY PLOTS ...... 61
LIST OF TABLES
TABLE 1 RESOURCE SUMMARY ...... 2 TABLE 2 TENEMENT INFORMATION...... 7 TABLE 3 MINERA VENTUROSA S.A. PRODUCTION 1948 TO 1955 ...... 8 TABLE 4 ANALYSIS OF SG DATA BY DEPTH ...... 28 TABLE 5 SUMMARY OF SG REGRESSION STATISTICS ...... 29 TABLE 6 DISTRIBUTION OF QAQC SAMPLES ...... 32 TABLE 7 DUPLICATE SAMPLE STATISTICS ...... 32 TABLE 8 OREAS 131A STATISTICS ...... 36 TABLE 9 OREAS 133A STATISTICS ...... 39 TABLE 10 OREAS 134A STATISTICS ...... 42 TABLE 11 OREAS 36A STATISTICS ...... 45 TABLE 12 MODEL DEFINITION ...... 54 TABLE 13 CUTOFFS FOR MINERALIZATION CODING ...... 54 TABLE 14 GEOLOGY CODES ...... 57 TABLE 15 SUMMARY STATISTICS SAMPLE DATA ...... 59 TABLE 16 BENCH HEIGHT ANALYSIS SUMMARY FOR SILVER ...... 59 TABLE 17 SUMMARY STATISTICS COMPOSITE DATA ...... 60 TABLE 18 INDICATOR VARIOGRAMS FOR HIGH GRADE / LOW GRADE PARTITIONING ...... 63 TABLE 19 LOG VARIOGRAMS FOR MINERALIZED COMPOSITES ...... 64 TABLE 20 SUMMARY OF SEARCH PARAMETERS ...... 65 TABLE 21 SUMMARY STATISTICS MODEL DATA ...... 65 TABLE 22 MINERAL RESOURCE ESTIMATE FOR THE NAMIQUIPA PROJECT ...... 67 TABLE 23 RESOURCE SUMMARY BY CUT-OFF GRADE ...... 67
LIST OF APPENDICES
APPENDIX 1 DRILL-HOLE COLLAR SUMMARY ...... 70
Page xiv Namiquipa Deposit Technical Report
TECHNICAL ABBREVIATIONS
Ag Silver ALS ALS Group (Laboratory service) Cerro Cerro Resources NL cm centimetre CRIP Complex Resistivity Induced Polarization Cu Copper DBF X-base DataBase File DDH Diamond drill-hole g gram GPS Global Positioning System g/t grams per tonne HQ drill core with a diameter of 63.5 mm HWT drill casing with a nominal hole diameter of 100mm ICP inductively coupled plasma ICP-AES inductively coupled plasma atomic emission spectrometry ID2 inverse distance squared kg kilogram km kilometre km2 square kilometre m metre m3 cubic metres mm millimetre Mt million tonnes Namiquipa Namiquipa Project NQ drill core with a diameter of 47.6 mm OK Ordinary Kriging Pb lead Project Namiquipa Project ppm parts per million QAQC Quality Assurance Quality Control RQD Rock Quality Designation RPE Relative Percentage Error SG Specific Gravity t tonne UV ultra violet UTM Universal Transverse Mercator XRF X-ray Fluorescence Zn zinc 0C degrees Celsius µm micron
P80 80%passing (a nominated mesh size) % percent
Page xv Namiquipa Silver Deposit Technical Report
ITEM 1: SUMMARY
This Technical Report was prepared to support the October 24, 2012 news release of Cerro Resources NL (Cerro), and details the resource estimation process and results by Cerro for its Namiquipa Silver Deposit (The Property), in the state of Chihuahua, Mexico.
The Namiquipa deposit is located adjacent to the village of El Terrero in Chihuahua, Mexico, 145 km west- northwest of the City of Chihuahua.
The deposit occurs as a low-sulphidation epithermal system transecting a suite of shallow dipping breccias and ignimbrites of andesitic and rhyolitic composition. Extensive silicification has occurred around a major north trending shear zone that is host to the epithermal veins.
Following acquisition of the property in 2010 a concerted exploration effort by Cerro during 2011-12 has enabled this maiden resource estimation.
A total of 86 diamond holes were drilled in 2011-12 for 32,151 meters to principally test the Princesa vein system at the historic La Venturosa Silver Mine. A small number of these holes were also drilled as initial evaluation of the sub-parallel America vein system as well as the Mexico and Esmeralda veins.
Drilling has been completed on nominal 50 meter sections transverse to the vein system with holes designed to test the target mineralization at 100 meter centers. Except for high grade veins that were stratigraphically sampled the drill-holes were generally sampled on one meter intervals. Drill samples were submitted to the ALS Group for sample preparation in Chihuahua and assayed by method code ME-ICP61 (a 33 element four acid ICP-AES procedure) in Vancouver. On-going analysis of QAQC data using ORE proprietary standards indicates no systematic variations that are outside of expected laboratory error of ± 10%.
The mineralization occurs as the superposition of three related mineralizing events that were rich in zinc, lead and silver. Interpretations of the broad mineralization boundaries, as defined by drill-hole intercepts, were interpreted in vertical cross-section and plan view to define the extent and geometry of the mineral system. Internal zonation of this mineral system into high grade and low grade zones for each of silver, lead and zinc was achieved using indicator kriging. Sample statistics indicate lognormal unimodal populations for silver, lead and zinc. Variograms are poorly defined due to the wide drill spacing but do indicate a cross-strike range of around 20-30 meters. Block grades for silver, lead and zinc were interpolated using Ordinary Kriging based on 2 meter composited assay data located within geologically defined, oriented and scaled search ellipsoids. Separate ellipsoids were used to match the structural orientations of the principle veins. The same search and interpolation parameters were used for all models.
Page 1
Namiquipa Silver Deposit Technical Report
The resource was calculated as the tonnage weighted sum of grades within the interpreted mineralized zones whose silver equivalent grade was in excess of the appropriate cutoff. Tonnages were estimated from a density database of 5,728 samples.
At a cutoff grade of 100 g/t AgEq the Namiquipa resource is 4.6 million tonnes grading 103 g/t silver, 0.9% lead and 1.7% zinc for an average silver equivalent grade of 154g/t (Table 1). Silver Equivalent grades were calculated using the 12 month average metal prices of US$31.50/oz Silver; US$0.89/lb Zinc; and US$0.92/lb Lead. Metal recoveries were not considered in the calculation.
As the drill density is sufficient to define the continuity and shape of the mineralization but insufficient to map meso scale grade variations within the mineralized zones the resource is classified as Inferred.
Table 1 Resource Summary
Resource Tonnes AgEq Ag Pb Zn Ag Pb Zn Category M g/t g/t % % Moz ‘000 t ‘000 t Inferred 4.6 154 103 0.91 1.66 15 41 76 Footnotes: 1. Mineral resource estimated according to CIM definitions. 2. Mineral resources are reported at a cut-off grade of 100 AgEq g/t. 3. The Silver equivalent grades (“AgEq”) have been calculated using the 12 month average metal prices of US$31.50/oz Silver; US$0.89/lb Zinc; and US$0.92/lb Lead. Metal recoveries are not considered in this calculation. 4. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
Page 2
Namiquipa Silver Deposit Technical Report
ITEM 2: INTRODUCTION
This Report has been prepared at the request of Cerro Resources NL. It has been prepared to provide an estimate of the currently defined resource at the Namiquipa Silver Deposit.
This technical report is based on information obtained from exploration activities undertaken at Namiquipa by Minera Tasmania SA de CV [“MT”] on behalf of Cerro Resources between 2011 and 2012. Minera Tasmania SA de CV is a wholly owned Mexican subsidiary of Cerro. The data source is an exploration database compiled by MT staff and its consultants based on geologic mapping, geochemical and geophysical sampling and drilling. Additional information on the regional geology and stratigraphy is based on literature in the public domain.
Two consulting geologists and an independent geoscience consultant have compiled the report. Each is listed below with their respective items of responsibility and sources of information.
2.1 Personnel and Responsibilities
2.1.1 Reserva International LLC
Tim Carew is the independent qualified person responsible for supervising the preparation of the technical report. Mr Carew assumes overall responsibility for all sections of this report.
2.1.2 Bill Fleshman
Bill Fleshman is the qualified person responsible for project management including the design, execution and interpretation of the exploration data. Mr Fleshman prepared Sections 5 and 8 of this Report.
2.1.3 Computer Aided Geoscience Pty Ltd
Trevor Leahey is the qualified person responsible for exploration data review and the resource estimation. Mr Leahey prepared Sections 1 to 4, 6 to 7, 9 to 14 and 23 to 27 of this Report.
2.2 Scope of Personal Inspections
2.2.1 Reserva International Ltd
Tim Carew visited the Namiquipa site on 18-19th October 2012. Mr. Carew reviewed core logging and sampling procedures, conducted data validation exercises and took an independent check sample.
Page 3
Namiquipa Silver Deposit Technical Report
2.2.2 Bill Fleshman
Bill Fleshman has spent two years in Namiquipa, from 2011 to 2012, supervising the project.
2.2.3 Computer Aided Geoscience Pty Ltd
Trevor Leahey spent a total of 5 months on site during the period January to September 2012.
ITEM 3: RELIANCE ON OTHER EXPERTS
With respect to tenure the authors have relied on copies of translated documents provided by Cerro Resources NL.
ITEM 4: PROPERTY DESCRIPTION AND LOCATION
4.1 Location
The Property is located in Chihuahua State, Northern Mexico, at latitude 29.1822°N, longitude 107.36156°W (Figure 1). The UTM coordinates (NAD27) of the Princesa Shaft are 0270342mE 3230311mN. The Property is located approximately 145 kilometres west-north-west of the city of Chihuahua within the Namiquipa Mining District at an elevation of 1,900 m. The historic workings of the underground mine, Minera Venturosa, are located adjacent to and south-east of the village of El Terrero (Figure 2).
4.2 Tenements
Minera Tasmania S.A. de C.V. holds title to the Property an area of 4,400ha through three granted mining concessions; - the Tasmania, Rolys and the America (Table 2, Figure 2). Mining Title Concessions are granted by the Secretaria de Economia Coordinacion General de Minera Direccion General de Minas (Ministry of Mines in Mexico).
Minera Rio Tinto retains a 2% NSR from which Minera Tasmania can purchase 50% of the NSR for US$1,000,000 plus 16% IVA tax before production starts. Minera Rio Tinto also owns approximately 200 hectares of private property which encompasses all of the America Concession and some area outside of the America Concession. Private property grants surface rights but not mineral rights to the owner. The Option
Page 4
Namiquipa Silver Deposit Technical Report
Agreement of 22 July 2008 allows Minera Tasmania full access to the private property to carry out exploration and other activities which may impact the said land at no additional cost to Minera Tasmania. In the event Minera Tasmania proceeds to develop a mine within the America Concession, or within the private property, Minera Tasmania will be obliged under the terms of the Option Agreement to buy the private land from Minera Rio Tinto for an amount equal to the market value of the land at the time.
Figure 1 Location Plan
Page 5
Namiquipa Silver Deposit Technical Report
Figure 2 Tenement Map
Page 6
Namiquipa Silver Deposit Technical Report
Table 2 Tenement Information.
Concession Concession Area Concession Owner Grant Date Expiry Date Name Number (Ha) Tasmania 227076 Minera Tasmania S.A. de C.V. 4,226 04 May 2006 03 May 2056 America 219975 Exploration and Option 136 15 May 2003 14 May 2053 Agreement to purchase the “America Concession” from Minera Rio Tinto S.A. de C.V. – Principal Sr. Mario Ayub of Chihuahua, Mexico, on 22 July 2008 Rolys 236046 Minera Tasmania S.A. de C.V. 37.43 04 May 2010 03 May 2060
ITEM 5: ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
The Property is located approximately 145km northwest of Chihuahua City, the capital of the State of Chihuahua. Chihuahua City has a population of 800,000 and is a major regional center served by an international airport and is the starting point for the Chihuahua-Pacific railroad. Chihuahua has a comprehensive range of goods and services plus extensive human resources with skills and experience of the mining industry.
The Property has excellent access via paved road from Chihuahua City with two main options; either via four lane Highway 45 for 60km, then to the west on two lane Highway 50 for 119km to the town of El Terrero, or alternatively travelling west from Chihuahua City to Cuauhtémoc (population approximately 100,000) for 106 km on Highway 16, then north on Highway Chihuahua 21 towards Namiquipa for 15km, then 106km on Highway 5, then north on Highway Chihuahua 15 for 18.8km, then east towards El Oso for 2km on Chihuahua 50 which is also a two lane paved road that crosses the central area of the Property.
El Terrero, with a population of 2,500 is located 2.5 km to the west of the Property. El Terrero supports the local farming community which grows apples, pears and peaches, plus livestock grazing. El Terrero has a small hospital, a medical clinic, two small dental clinics, 3 kindergartens, 3 primary schools, one high school, groceries stores, hardware stores, several restaurants, a bank, gas station and other amenities. The city is on the electrical grid and has both wired and wireless internet services. Local labor is available to help with exploration programs and mine development activities.
Page 7
Namiquipa Silver Deposit Technical Report
The climate of this part of Mexico is continental with warm to hot days and cool to cold nights. The climate is arid with annual precipitation averaging 475 mm. Warmest temperatures are approximately 40o C while the coldest is -10o C. Most rainfall occurs in late summer in July, August and September. Snowfalls are rare but there may be several each winter. Fieldwork can be carried out all year round.
One of the historic mine camp buildings located on the Property was converted to a site office and a large well equipped core shed was constructed with core cutting, core storage and logging areas. Three phase electrical lines were upgraded to supply stable power to the core shed and office during the latest round of exploration drilling. Satellite internet service is installed at the office.
Physiography of the area in the vicinity of El Terrero and the Property is dominated by a north trending valley with very gently rolling topography. El Terrero is at an elevation of 2,000 m. A north trending range of hills 5 km west of El Terrero reaches an altitude of 2,700 m.
ITEM 6: HISTORY
The district was discovered in 1811 by the Spaniard Marciano Mascareñas with the first mining claims staked in 1916. In 1929 the Japanese Mining Company Santo Domingo Mining Co. established a cyanidation plant with a capacity of 75 tons per day. This was modified to a flotation circuit with 75 tons per hour capacity in the 1930's. In 1936 the Company closed due to labour problems, low silver prices and a significant increase in water pumping costs.
During 1946-47 H.C. Dudley and W.N. Fink of Minera Venturosa S.A. undertook a vigorous exploration program, including diamond drilling, which resulted in the discovery of new mineralisation both in old workings and below the mined areas. In 1948 this company established a modern plant with a 450 tons-per-day capacity which operated until 1955 when, due to labour problems and water shortage, mining again ceased. Total production is recorded at 737Kt for 330t silver, 25Kt lead and 37Kt zinc (Table 3).
Table 3 Minera Venturosa S.A. Production 1948 to 1955
Tonnes Ag Pb Zn Ag Pb Zn
milled (g/t) (%) (%) Metal (t) metal (t) Metal (t) OXIDE 214,127 567 2.6 121 5,556 SULPHIDE 522,629 401 3.8 7.1 209 19,669 36,939
Page 8
Namiquipa Silver Deposit Technical Report
In October 1990, Compania Minera de Namiquipa completed construction of a 50 ton-per-day oxide flotation plant. This was upgraded to 120 tons per day in 1992. During the period 1990 to 2000 production was mainly from oxide ore producing silver with low grades of lead. 341,557 tons was milled for 98,791 kg of silver and 4,892 tons of lead. Average grades were 281 g/t Ag and 1.4% Pb.
From 2000 to 2002 sulphides from the 100 meter to 150 meter level of the ‘America’ area were mined. This coincided with the construction in 2001 of a sulphide flotation plant with 250 ton per day capacity. This plant produced concentrate with average grades of 1,400 g/t Ag, 18% Pb & 42% Zn that was shipped to Pasminco’s smelter in Avonmouth, England. Mill throughput in 2001 and 2002 was 80,100 tons for 17,986 kg of silver, 2,433 tons of lead and 6,591 tons of Zinc. The silver grade was 225 g/t, plus 3% Pb and 8.2% Zn. In May 2002 the plant was shut down due to falling prices of zinc and silver plus increased water in the underground workings.
ITEM 7: GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
7.1.1 Stratigraphy
Northwest Mexico consists of translated and accreted terranes along the south-western margin of the North American craton, which have been intruded and covered by coeval and younger igneous rocks since the middle Mesozoic. Mesozoic and early Tertiary compressional tectonism was followed by several styles of extensional tectonism beginning in the middle Tertiary. These events generated distinctive lithologic sequences across the region, which are divided into the Western, Central and Eastern domains. Cross- cutting the central and eastern domains, is the northwest trending Sierra Madre Occidental (‘SMO’); a Late Cretaceous to Early Tertiary Laramide mountain building Orogeny.
The geology of the SMO is divided into the Lower Volcanic Complex (‘LVC’) and the Upper Volcanic Supergroup (‘UVS’). The LVC is characterised by a series of andesitic volcanic and sedimentary rocks interlayered with felsic pyroclastic units deposited during the Eocene – Oligocene. Calc-alkaline granodioritic to granitic batholiths and stocks have intruded volcano-sedimentary rocks of the LVC. The LVC is unconformably overlain by the UVS, a large volume of caldera-related, pyroclastic rhyolite that was deposited during an episode of rift-type magmatism in the Middle to Late Oligocene (Masterman et al, 2006).
Page 9
Namiquipa Silver Deposit Technical Report
7.1.2 Structure
Namiquipa lies at the southern continuation of the Basin and Range extensional setting. A component of dextral movement on regional-scale basement NW trending faults has helped to develop extension on the NS structures at Namiquipa.
7.1.3 Mineralization
The Mexican epithermal deposits are Tertiary in age, generally ranging from Middle Eocene to Early Miocene, and their spatial distribution matches the distribution of the volcanism associated with the evolution of the Sierra Madre Occidental and the Sierra Madre del Sur. In northern Mexico the deposits are divisible into two distinct parallel but overlapping metallogenic belts containing Ag-Au and Ag-Pb-Zn ores (Figure 1). The Ag- Au ores are concentrated in the western belt commonly occurring in andesitic rocks that comprise the LVC. The Ag-Pb-Zn ores are concentrated in the eastern belt and are associated with the pyroclastic rocks of the UVS. Also situated in the east is a Pb-Zn-Ag-(Cu) metallogenic belt that is thought to have formed at higher temperatures (>300°C) usually close to intrusive centres and predominantly hosted by carbonate units.
The Namiquipa deposit is located in the eastern Ag-Pb-Zn belt and is hosted by volcanic rocks of the UVS.
7.2 Local Geology
7.2.1 Stratigraphy
The host rocks in the vicinity of the Namiquipa deposit are comprised of an interlayered sequence of Tertiary age felsic lapilli tuffs, welded tuffs, and andesite porphyry, all of which are silicified. The felsic rocks display strong illite (pyrite) alteration (Figures 3, 4).
Intruding the volcaniclastic package are numerous small (20-50meter wide) high level diorite stocks exhibiting marginal breccias.
The volcanic stratigraphy at Namiquipa, as defined by Corbett (2011, 2012) and Cummings (2012) is believed to contain three units with possibly intervening time gaps between formations. They are:
a lower tuff unit at depth in the south which thickens across a growth fault. the Namiquipa dome-breccia complex comprising overprinting andesite porphyry domes with contact breccias and cut by hydrothermal breccia pipes, all with intense silica-Kfeldspar alteration, extending in the earlier permeable tuffs.
Page 10
Namiquipa Silver Deposit Technical Report
an upper ignimbrite unit which caps the domes to the north and becomes less altered in the uppermost portion.
The Namiquipa dome-breccia complex is interpreted to locally overlie the earlier ‘lower tuff unit’ as an endogenous dome-breccia complex, which many have vented to the surface (Corbett, 2012). This principle rock type at Namiquipa is termed the coarse andesite porphyry and is rimmed by extensive andesite porphyry breccia characterised by mainly Kfeldspar altered clasts within a chlorite matrix, although Kfeldspar flooding of these breccias with chlorite altered clasts results from continued brecciation. Increased silica-Kfeldspar alteration occurs at conformable brecciated dome contacts with the underlying earlier sequence. The host permeable tuffs have undergone pervasive silica-Kfeldspar alteration in association with dome emplacement. Several different types of andesite porphyry are recognised in drill core which include a common medium grained andesite porphyry and other fine grained and flow banded styles. While it is difficult to distinguish some tuffs from hydrothermal breccias, features such as the milled breccia character, disseminated matrix and vein sulphide, the common dome clasts, along with matrix flooded Kfeldspar alteration and faulted contacts, all suggest multiple hydrothermal breccias which have erupted from deeper level porphyry intrusions.
7.2.2 Structure
Extensional settings such as Namiquipa are characterised by listric faults which generally host the best precious metal mineralisation within flat plunging ore shoots localised in steeper dipping fault portions (Corbett, 2011). The cuspate form of veins in plan view with an east dip on the main America and Princesa veins and steep west and vertical dips on the Esmeralda and Antenna veins respectively, is consistent with a listric fault extensional vein origin with associated hanging wall splay veins. The listric faults are broken into segments by NW transfer structures, presumably parallel to regional fracture systems. These structures influence changes in dip of the listric faults or otherwise limit mineralisation. Furthermore, intersections of the listric and transfer faults appear to localise steep plunging ore shoots in the America vein at the General and Americas shafts. While horizontal ore shoots of supergene Ag has been exploited in the Princesa vein at about 100m deep and locally extending to deeper levels, the additional deeper mining at the America vein might be indicative of higher Ag grades at depth.
7.2.3 Alteration
Hydrothermal alteration is classed as silica-Kfeldspar (adularia) style, typical of higher temperatures proximal to the andesite porphyry dome source rocks. Much of the Kfeldspar may occur as the low temperature form, adularia, and grades laterally to lower temperature chlorite-dominated alteration assemblages, as prograde potassic grading to marginal propylitic alteration. This alteration is best developed in the andesite domes and
Page 11
Namiquipa Silver Deposit Technical Report contact breccias, and forms laterally extensive alteration within the permeable wall rocks and also extends along faults, commonly as a precursor to mineralisation. Illite-pyrite wall rock alteration which is more typical of epithermal Au deposits is only well recognised as an overprint in faults, or in the uppermost sequence of younger ignimbrites and within the dome sequence at the southern extension of the Namiquipa structural corridor. Green-blue clays close to locally mineralised faults may comprise celadonite which is common in poly-metallic Ag epithermal deposits.
Magnetic imagery delineates a 3 km long NS structural corridor at Namiquipa limited to the east and west by the bounding faults (Figure 5). While deep oxidation commonly in the order of 200m may account for much of the magnetite destruction in the Namiquipa corridor, this is interpreted to overprint earlier magnetite destructive illite-pyrite hydrothermal alteration. Oxidation of the pyrite within this alteration would have provided acid ground waters to promote magnetite destruction.
7.2.4 Mineralization
Mineralisation transgresses the uppermost elements of the stratigraphy and so post-dates the entire volcanic succession.
Mineralisation is hosted by steeply dipping quartz veins. The favourable andesite hosting mineralisation is overlain by a more recent andesite and rhyolite and regionally dips about 20° to the southwest. At the south end of the mined zone, the dip increases to about 60° sharply and there the bed is covered by a soft, clay like andesite tuff or ash often of a marked red colour.
Mining has clearly focused upon a set of north to north westerly trending and steep east dipping veins. Vein location can be seen from collapse and open stopes at the surface. Dump material comprised quartz varying from mostly saccharoidal to comb quartz with locally colloform banded chalcedony/opal and including late stage amethyst; plus sulphides and carbonate. Early pink K-feldspar-pyrite alteration is associated with stockwork quartz veins. Sulphides are generally coarse grained and comprise pyrite, brown sphalerite and galena and are overgrown by calcite. These mineral assemblages are interpreted to be consistent with the level of Ag ore deposition in a Fresnillo style polymetallic Ag vein system which are silver rich and probably gold poor. A valuable description of the mineralisation is contained in Shafelbine, 1955. It is quoted as follows:
“The six principal veins all strike about north 20o east at the north end of the property but at the south end the veins fan out so that the eastern most veins have a strike of north 20o west. Dips near the surface are fairly constant and vary from 70º to the east for the western most vein to vertical, and 70º to west for some of the veins further to the east. Nearly everywhere the vein
Page 12
Namiquipa Silver Deposit Technical Report dip steepens with depth until they, at 250 meters below the surface, are nearly vertical. The veins are essentially quartz replacement of breccia filled fissures in the andesite. The principal vein shows evidence of several ages of mineralisation, each with its distinct type of mineral. Chief vein constituents in the sulphide or unaltered zone are quartz, sphalerite, galena, pyrite, fluorite, chalcopyrite with silver minerals and minor gold. Chalcedony is also present in many areas. The mineralisation sequence was probably as follows; evidence supports the theory that the veins were opened several times.
Quartz with finely crystalline galena, pyrite and chalcopyrite containing quantities of silver minerals. Quartz, fluorite, and sphalerite, with some galena & pyrite Chiefly fluorite with massive galena & some sphalerite, plus small quantities of gold and silver Quartz with chalcedony, marcasite, galena & manganese minerals, all probably derived from surface leaching & redeposited in vein vugs at depth.
The veins are oxidised to about 100m below the surface. In the oxidised zone the lead and zinc minerals have been leached and the vugs resulting remain open or contain limonite as a residual constituent of the marmatitic sphalerite. The lead minerals are in the form of cerussite and rarely anglesite or wulfenite. Increased quantities of barite are formed near the surface, where the silver minerals are native silver and cerargyrite. The veins show distinct zones of silver and lead enrichment at or near the base of oxidation. A second broad zone of enrichment was found about 50 meters below the surface. In general, the transition between oxides and sulphides is made in a distance of a few meters; however, the base of oxidation is very irregular with many tongues of oxide extending tens of feet into the sulphide zone. As would be expected the richer more open vein areas in general, show greater depth of oxidation. Outcrop of the veins are obscure and no gossans as such are evident. As mentioned above, a large halo of discoloured rock surrounds the veins. Several normal faults cut the veins at nearly right angles but their displacement is not great. All the faults show that the south limb has been dropped. Dykes are few in number and are small. At the south, the ore in the vein is believed to be localised by the extensive andesite tuff bed which is almost impervious to solutions and is not competent, mechanically, to support vein openings. The evidence, therefore, supports the theory that the tuff flow acted as a solution trap. Veins have nowhere been traced into the tuff more than a few feet before being lost’.
Page 13
Namiquipa Silver Deposit Technical Report
Figure 3 Surface Geology Map Page 14
Namiquipa Silver Deposit Technical Report
Figure 4 Geology Cross Section
Page 15
Namiquipa Silver Deposit Technical Report
Figure 5 Ground Magnetics with Vein overlay
Page 16
Namiquipa Silver Deposit Technical Report
A A'
Figure 6 S-N Long Section through the Namiquipa Prospect showing the principal stratigraphic units (View to the West)
Figure 7 Interpreted Vein Morphology based on Historic Records and Plan Maps of Workings. Page 17
Namiquipa Silver Deposit Technical Report
Acuna’s unpublished memo of February 1992 mentions that between the 120 and 150 meter levels in the America Vein (also known as the Venturosa Vein), there is an increase in the galena grain size, a higher sphalerite content and pyrite changes from fine to medium grained. This variation in grain size correlates with decreasing silver grades. Generally the level of oxidation at the America Vein was in the vicinity of Level 4 (approximately 100m RL), whereas in the Princesa Vein the level of oxidation (although at Level 4) is at approximately -70m RL.
ITEM 8: DEPOSIT TYPES
The Namiquipa deposit is interpreted to be consistent with the level of silver ore deposition in a Fresnillo style polymetallic vein system which is silver rich and gold poor (Fleming, 2010). Comparisons of many deposits similar to Namiquipa has facilitated the estimation of controls to Au-Ag mineralization in low sulphidation epithermal deposits, and the coincidence of several of these controls contributes towards the development of ore shoots (clavos), which host more ore, typically as wider and higher precious metal grade veins (Corbett, 2007).
Figure 8 Fluid flow path for Namiquipa mineralisation culminating in the upper level level of polymetallic Ag-Au mineralization on the mineralization classification of Corbett (2009).
Page 18
Namiquipa Silver Deposit Technical Report
G. Corbett a world renowned geologist who specializes in epithermal deposits has reviewed the drill core and geologic controls at the Namiquipa deposit and has made recommendations during the course of the project that have assisted the evaluation of the Property. Mineralization at Namiquipa is described as of the low sulphidation epithermal polymetallic Ag-Au style. Although Au is not prominent in the Namiquipa data base, the Zn equivalent is included in some resource inventories. Many polymetallic Ag-Au deposits display zonation patterns which include dominant Cu-Au at depth (typically of the initial quartz-sulphide Au + Cu style grading to higher crustal level Ag + Zn>Pb and highest level Ag-rich mineralization (Figure 8). Veins and vein- breccias commonly comprise early quartz and pyrite followed by sphalerite > galena with lesser chalcopyrite and Ag sulphosalts, and later stage carbonate. Sphalerite color provides a good indication of levels in the hydrothermal system as compositions vary from deeper level high temperature Fe-rich dark sphalerite, through brown, red and yellow, to Fe-poor white sphalerite formed under low temperature conditions at highest crustal levels. Carbonate varies with the acidity of the bicarbonate waters from which it was deposited (Corbett, 2007; Leach and Corbett, 2008), with rhodochrosite most commonly present in better mineralized systems.
Early quartz-pyrite mineralization is evident at Namiquipa commonly as fluidized fine grained silica-pyrite breccias which have penetrated to high crustal levels within the host. Many veins examined to date at Namiquipa contain red-yellow sphalerite indicative of moderate temperatures of formation. These veins contain Ag mineralization within or associated with sphalerite-galena commonly as Ag sulphosalts such as tennantite-tetrahedrite minerals such as the Ag end member, freibergite, and so there is a Zn:Ag correlation. In the northern portion of the prospect (DDH’s NAM47 & 18) the main Princesa vein displays a clear transition from initial red through to yellow sphalerite. Of greatest interest is that immediately main vein in DDH NAM47, elevated Ag (3540 g/t) is associated with the mineral assemblage pyrite-white sphalerite-argentite with local kaolin. This low temperature mineralization formed elsewhere in elevated crustal settings (Corbett, 2007), is classed as the epithermal end member of polymetallic Ag-Au veins (Figure 9), and should be targeted at Namiquipa. This low temperature mineralization overprints yellow sphalerite and barite, both typical of polymetallic Ag veins, and local kaolin. This observation has direct impact on recommendations for future exploration at the Property.
Page 19
Namiquipa Silver Deposit Technical Report
Figure 9 Zonation within polymetallic Ag Style epithermal mineralisation (Cobett, 2012).
ITEM 9: EXPLORATION
Work by Cerro has included surface mapping, geochemistry, surface geophysics and drilling
9.1 Surface Mapping
Cerro undertook confirmation mapping of the project area to validate, and locate with GPS, work completed by the previous mine operators Mina Rio Tinto SA de CV.
9.2 Soil Geochemistry
A program of soil geochemistry has been initiated to trace the known mineralization to the north and explore for unknown structures. An orientation program in the central north of the drill area was successful in identifying anomalous zones of silver and lead to the east of the Princesa Vein. Samples of sieved -80 mesh
Page 20
Namiquipa Silver Deposit Technical Report soil have been collected on a 100 x 20 metre grid and submitted to ALS for assay using method MEICP-41. The program continues to target zones east and north of the known vein systems.
9.3 Geophysical Surveying
Zonge International Inc. completed Ground Magnetics over the Project Area and a Complex Resistivity Induced Polarization survey across the central portion of the Namiquipa Prospect in May 2011. The CRIP program was extended to the north and south in June 2012.
9.3.1 Magnetics
The objective of the magnetic survey was to identify concentrations of magnetic minerals in the subsurface that could be correlated with metallic mineralization and to delineate structural trends on both a local (in the vicinity of the CRIP survey) and a regional scale. The mapped mineralized veins in the CRIP survey area are located in a broad, smoothly varying area of moderately low magnetic signature. However, there are some very subtle features in the gradients in the vicinity of and in between the mapped veins. Regional structural trends over the entire survey area indicate a dominant set of N-NE trending magnetic lineaments. Other structural trends appear as NW trending and E-NE trending lineaments. Magnetic basement appears low in the central survey area and uplifted to the north and south.
The survey consisted of 119 lines of total magnetic field data collected on east-west lines ranging from 2 to 5.3km in length, with the average line length 3.6 km. Line spacing was 100 meters over most of the survey grid except the central area (in the vicinity of the CRIP survey) where line spacing was 50 meters (Figure 10).
A total of 434 line-km of ground magnetic data were collected. Magnetic data were acquired with an optically- pumped GEM-19 Overhauser magnetometer manufactured by GEM Systems. The Overhauser magnetometer is a proton-precession magnetometer that uses radio frequency signals to achieve high sensitivity and low power consumption, making it useful for minerals mapping applications. The GEM system was integrated with a Trimble GPS accurate to about 1.5 m. A similar magnetometer was used as a base station magnetometer to monitor diurnal changes during the survey. The GEM-19 Overhauser magnetometer uses less power than proton precession magnetometers, has higher sensitivity, and can withstand high magnetic gradients.
The magnetics identifies a central zone of low frequency response which corresponds with the Namiquipa alteration and mineralization (Figure 5) surrounded by zones high tenor high frequency response. The contacts between these zones are sharp suggesting faulted boundaries. Northwest and northeast discontinuities are evident throughout the magnetic patterns.
Page 21
Namiquipa Silver Deposit Technical Report
Figure 10 Total Extent of Ground Magnetic Survey - data Reduced to Pole
Page 22
Namiquipa Silver Deposit Technical Report
9.3.2 Complex Resistivity Induced Polarization
Zonge International Inc. completed a Complex Resistivity Induced Polarization survey across the central portion of the Namiquipa Prospect in May 2011. This program was extended to the north and south in June 2012 (Figure 12).
Pole-dipole CRIP data were collected along 7 lines for a total coverage of 10.8 km using a receiver dipole “a- spacing” of 50 m. Line separation was nominally 350 meters. Data were collected for N-spacing of N= 1 to 9 with partial coverage from N = 10 to 15. The survey was performed in the frequency domain at fundamental frequency of 0.125 Hz and utilized the 3rd and 5th harmonics in order to use a 3-pt decoupling technique. The collinear pole-dipole survey electrode array consists of an asymmetrical setup of a fixed infinite remote transmitter (TX) electrode, and on-line roving TX electrode.
The results of the CRIP survey indicate a large IP anomaly in the depth range of 100-300 meters in the central survey area that is correlated with high-angle resistive features in places, and conductive features in other. The chargeability anomaly is located on the Princesa Vein and although the surface projection of the anomaly is centred on NAM-013, 039 and 061 the core of the anomaly in Long Section (Figure 11) is located close to the southern growth fault and is intersected by drill-holes NAM-003 (33 meters containing 2.2% Zn) and NAM-059 (23 meters of 1.3% Zn).
Figure 11 IP Long Section overlying Geology
Page 23
Namiquipa Silver Deposit Technical Report
Figure 12 Resistivity Model Level 1850 and Location of Survey Lines Page 24
Namiquipa Silver Deposit Technical Report
ITEM 10: DRILLING
10.1 Cerro Resources Drilling
A total of 86 diamond drill-holes for 32,507 meters have been drilled into the Namiquipa Deposit in the period March 2011 to June 2012. Drill-holes are located on a nominal 50 line meter spacing over a strike length of 1000 meters (Figure 13). Drilling has tested the down-dip extension of the historic workings from 200 to 500 meters with a nominal toe spacing of 100 meters.
Drilling at the southern end of the field has intersected quartz veining transecting clastic sediments and andesites but with alteration features more compatible with near surface meteoric fluids.
Drilling at the northern end of the field, north of the North Shaft Fault, has intersected a comparable stratigraphic sequence of ignimbrites but with little alteration and mineralization. Stratigraphic correlations suggest a 70 meter displacement, north-block down.
Drilling was completed by Major Drilling Mexico SA de CV using track mounted top drive diamond core rigs. Holes were collared in HQ, reamed to HWT for 6 to 12 meters of casing and then continued in HQ tool till drilling conditions necessitated a reduction to NQ. Generally this occurred when old stopes were intersected.
10.2 Drill-hole Surveying
10.2.1 Hole Collar Surveying
Drill-hole collars are survey using Differential GPS with an Trimble TSC2 series recorder which has centimetre accuracy. Collar coordinates are read in Zone 13 WGS 84 UTM format.
10.2.2 Down-hole Surveying
Drill-hole loci are surveyed using a Reflex single-shot electronic instrument at 50 m intervals down hole. The down-hole survey data, including magnetic field and temperature readings, are recorded by the drillers and manually entered into the drill database. More recently the survey data was extracted directly from the survey tool in CSV format. Results are plotted and visually scanned for consistency. Values may be adjusted arbitrarily to the average of adjacent readings if the magnetic field and/or temperature value(s) indicate erroneous readings.
Page 25
Namiquipa Silver Deposit Technical Report
Figure 13 Drill-hole Location
Page 26
Namiquipa Silver Deposit Technical Report
10.3 Data Capture
Drill data is stored in a series of EXCEL files containing drill-hole name, interval depths, and the parameters particular to that file. Geological logging data is recorded on paper and manually transferred to digital form Excel data files are routinely checked for data errors prior to importing into GEMS (Gemcom). GEMS is a modern comprehensive geological database and modeling software program utilizing Access as the database.
10.4 Logging & Sampling Protocols
10.4.1 Geological Logging
All core preparation is completed on-site at a purpose built facility by geologists assisted by trained technicians under the supervision of a senior geologist. The core is measured, metre marked, photographed (both wet and dry) and logged for basic geotechnical properties of recovery, RQD, fracture density and rock strength. Density determinations are made at five metre intervals down the hole.
Geological logging is then completed by geologists, prior to half core sawing and sampling for assay. The geological logs record all pertinent data related to lithology, alteration, structure and mineralization. Separate from-to intervals are recorded with each category of observation. Under lithology the rock is described and named; under alteration, superimposed mineral assemblages are recorded along with the nature of their occurrence; under structure, meso and macro scale structural features are identified are where possible their orientation measured; under mineralization, economic minerals are identified, their occurrence described, and volume estimated. Paper logs are scanned
10.4.2 Density Measurements
Density measurements are made at 5 m intervals along the core using the specific gravity principle. Half core samples of approximately 10cm length are weighed in air then coated in candle wax to seal voids. The samples are then re-weighed in air and water and the weights recorded automatically into the specific gravity (SG) database along with the drill-hole name and sample depth. The SG is calculated as:
SG = Wpw / { [Wa/(Wa/(Wa-Ww))] – [(Wa-Wpw)/Dw] }
Wpw weight in air pre waxing
Wa weight of the waxed sample in air
Ww weight of the waxed sample in water
Dw density of candle wax = 0.93
Page 27
Namiquipa Silver Deposit Technical Report
Weights are collected using an OHAUS Explorer Pro model EP 6101 scale with a load capacity of 6kg and a resolution of 0.1g. The unit is capable of weighing both on and below the stage. The scale is calibrated before each use using standardized weights supplied by Ohaus. Communication between the unit and a Foxpro database on the computer is controlled by Tec-IT TWedge version 2.4 programmable software.
A total of 5,728 determinations have been collected from the drill core for an average value of 2.43±0.17 t/m3 within a data range from 1.21 to 5.72.
Averaging the data by 50 meter elevation slices (Table 4) shows the gradual effect of reducing oxidation with depth as the average SG values increase from 2.31 to 2.51 t/m3.
Table 4 Analysis of SG data by Depth
Elevation Number Average From To SG by Depth 1900 1850 675 2.31 2.55 1850 1800 749 2.36 2.50 1800 1750 747 2.39
1750 1700 728 2.43 3 2.45 1700 1650 706 2.46
SG SG t/m 2.40 1650 1600 655 2.47
1600 1550 544 2.50 2.35 1550 1500 434 2.50 1500 1450 247 2.50 2.30 1450 1400 137 2.51 0 5 10 15 Depth 1400 1300 66 2.51
Multiple regression of the SG data against assay value (specifically silver, lead and zinc) indicates a strong correlation of SG value with grade. The accuracy of the regression function improves with grade tenor such that for samples with a lead or zinc grade in excess of 0.1% the standard deviation of the estimated value is 48% of the data standard deviation whist for samples with a lead or zinc values in excess of 1% the standard deviation of the estimated value is 60% of the data standard deviation.
The equation and statistical comparison of the regression of SG against silver, lead and zinc grades for samples with lead or zinc grades in excess of 0.5% is presented in Table 5.
Page 28
Namiquipa Silver Deposit Technical Report
Table 5 Summary of SG Regression Statistics
SG = 2.5031 + 0.0002*Ag(ppm) + 0.0199*Pb(%) + 0.0233*Zn(%) Standard Mean Minimum Maximum Deviation SG values 2.598249 2.567421E-01 1.410 4.270 Estimated SG 2.598249 1.373050E-01 2.516 3.504 Deviation 6.651878E-07 2.169470E-01 -1.108 0.804
10.4.3 Core Cutting
The core is sawn in half using a MK® water cooled manual feed core-saws with a 14” diamond tipped blade. The core is cut to optimize the primary vein orientations where applicable.
10.4.4 Core Sampling
Drill data was generally sampled on one metre intervals except for high grade veins that were stratigraphically sampled with a minimum interval of 0.2 meters (1,058 samples in a total of 23,698). For various reasons, such as poor recovery or make-up lengths to keep sampling intervals on meter marks, 4.5% of the sample lengths were greater than 1 meter.
Although 95.5% of the sampling has been completed on standardised one metre intervals there is still a component of non-uniform volume support introduced by the variation in core size from HQ to NQ. At this stage of the evaluation this error is considered small as 88% of the assay samples were drilled by HQ tool and only 12% by NQ tool. For high grade samples (those with AgEq values in excess of 100 g/t) the ratio is 89%:11%.
10.5 Relationship of Drill Intersection to True Width
The majority of drill-holes have been drilled at angles between 55 and 65° (Figure 14). As the vein systems dip at approximately 75° this gives an intersection angle of approximately 45° which equates to a true width of approximately 70% of the quoted drill intersection. True width calculations have no impact on the resource estimation as the drill-hole data is composited to standard lengths and then treated as point data for interpolation purposes.
Page 29
Namiquipa Silver Deposit Technical Report
1%1% COLLAR DIPº 9% 11% 55 60 12% 65 70 15% 51% 75 80 85
Figure 14 Summary of Drill-hole Collar Dips
ITEM 11: SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Assaying Methods
All samples were prepared and assayed by ALS Group (ALS), a wholly owned subsidiary of Campbell Brothers Ltd. Sample preparation occurred at their Sample Preparation facility in Chihuahua and assaying at the Vancouver laboratory. ALS is registered in North America under ISO 9001:2000 and ISO 17025.
At the Chihuahua facility rock samples are placed in metal trays and dried in an oven at 120ºC for 3-4 hours. The dried sample is then run through a Boyd Crusher to produce a product 70%<2mm. The sample is riffle- split to a Pulp Master (~200g) and a Coarse Reject. The Pulp Master is pulverized in a Ring Pulverizer to a product 85%<200# using a 250g bowel. A split of the pulp is dispatched to Vancouver by UPS overnight transport.
Samples are assayed using method code ME-ICP61, a four acid digest with an ICP-AES reading for 33 elements (Figure 15). Assay over-runs are repeated using method ME-OG62, an ore grade analysis using a four acid digestion and a reading using equipment suitable to the element.
Page 30
Namiquipa Silver Deposit Technical Report
Figure 15 Elements Assayed under Method ME-ICP61
11.2 QAQC
Standards and duplicate assays are routinely run by ALS as part of their internal quality control program.
In addition a structured QAQC assay program consisting of blanks, duplicates and standards is a fundamental part of the Cerro assay process. The distribution of blanks, standards and duplicates within the 2011-12 drill program is summarized in Table 6.
11.2.1 Duplicate Samples
From drill-hole NAM-061 onwards duplicate samples were routinely submitted for assay along with the standards. The duplicates are created by the laboratory at the sample preparation stage by cutting a second sample from the primary crush. This is annotated as a “D” sample and reported separately.
Four hundred and sixty nine (469) core samples were duplicated by the laboratory as a check on sample homogeneity. Summary statistics for the data are presented in Table 7. The average Relative Percentage
Error (RPE) for silver was 0.7%, 1.3% for lead and 0.6% for zinc, both with small standard deviations (Table 7). These results are well within acceptable limits for homogeneity. The data is also presented as a scatter plot with an almost perfect 45° regression line (Figure 16).
Page 31
Namiquipa Silver Deposit Technical Report
Table 6 Distribution of QAQC Samples
Number / Number of Holes Maximum Blank Hole with Zero Blanks Number per Hole Quartz 2.3 ± 2.1 9 8 Rhyolite Chip 5.3 ± 1.8 0 9 ALL 3.3 ± 2.9 9 9 Number / Holes sampled with Maximum Duplicate Hole Duplicates Number per Hole NAM-061-076; ALL 17.9 ± 4.1 26 047 & 052 in part Number / Number of Holes Maximum Standard Hole with Zero Standards Number per Hole 36 1.9 ± 1.3 10 6 131A 1.7 ± 1.1 10 5 133A 1.7 ± 1.2 12 6 134A 1.6 ± 1.2 17 4 ALL 5.6 ± 4.3 7 15
Table 7 Duplicate Sample Statistics
Standard Description Number Mean Minimum Maximum Deviation Original 469 9.6 94.8 0.2 1995 Ag Duplicate 469 9.8 97.0 0.2 2040 RPE 469 0.7 13.8 -50.0 55.6 Original 469 929 8372 1 159500 Pb Duplicate 469 929 8485 1 162500 RPE 469 1.3 12.3 -66.7 95.4 Original 469 1011 5587 4 98900 Zn Duplicate 469 1001 5473 3 97200 RPE 469 0.6 6.0 -24.0 50.9
Page 32
Namiquipa Silver Deposit Technical Report
Ag
Pb
Zn
Figure 16 Duplicate Sample Statistics
11.2.2 Standard Reference Samples
A suite of proprietary standards from ORES Pty Ltd (Melbourne, Australia) have been used throughout the drill program. These include ORE131a (low grade silver and sulphide), ORE133a (medium to high grade silver and sulphide), ORE134a (high grade silver and sulphide) and ORE36 (zinc sulphide).
Standards are submitted on a rotating basis at the rate of 1 in 40 (2.5%). Based on drill length there has been a maximum of 15 standards submitted in one drill-hole, with an average of 1 or 2 of each standard (total 4 to 8) being submitted in each hole (Figures 17, 18). Seven holes, from the first phase of drilling, did not have standards included in the submission.
Page 33
Namiquipa Silver Deposit Technical Report
As the 10g Standard sachets can be too small for routine analysis and re-analysis two sachets are generally included in the sample bag. In the case of silver 12 samples have been returned with NSS [insufficient sample], 30 for lead and 43 for zinc. There has been an increasing frequency of this happening in the latter part of the drill program.
Distribution of STANDARDS by Drillhole 16
12 ALL 8 ORE131 ORE133 4 ORE134 Number per Drillhole per Number ORE36 0 0 10 20 30 40 50 60 70 80 Drillhole Number .
Figure 17 Distribution of Standards by Drill-hole
Distribution of STANDARDS in Drillholes 30
25
20 ORE131 15 ORE133 10 ORE134 Numberof Holes 5 ORE36 0 0 1 2 3 4 5 6 7 8 Number of Standards per Hole
Figure 18 Distribution of Standards within Drill-holes
Page 34
Namiquipa Silver Deposit Technical Report
ORE131a (Table 8, Figures 19, 20)
Silver values range from 29 to 34ppm with a mean of 31.5 ± 1.01ppm. The average grade is 102% of the expected mean. Lead values range from 1.55 to 2.03% with an average grade of 1.67 ± 0.06%, equivalent to 97% of the expected mean. Similarly, zinc values range from 2.57 to 3.37% with an average grade of 2.78 ± 0.10% which is 98% of the expected mean. RPE2 statistics confirm this close association of the standards with their product specifications.
Two anomalies occur in the Pb & Zn RPE plots corresponding with samples [131680 – NAM005 141.5m] and [151680 – NAM057 245.5m] which are over-estimated by 10 and 20% respectively. Examination of the other standards that were included in these work orders shows no consistent pattern of over-estimation and suggests that these results are random. This is confirmed by the average ratio of standard value to specification being close to 100% for lead and zinc in both work orders. The slight underestimation of silver in work order CH11257676 is not consistent with general trends as ORE134A generally assays lower than ORE131A.
1 Mean ± Standard Deviation 2 The Relative Percentage Error [RPE] is used to measure the variability between samples. An unbiased comparison has an average RPE of zero with a minimal spread about this average. The RPE is calculated as :
AVERAGEVAL UE - val1 RPE = * 100% AVERAGEVAL UE which for two samples reduces to :
val - val RPE = 2 1 * 100% val2+ val 1
The RPE is equivalent to the HARD plot (Half Average Squared Deviation) of other workers. The RPE statistic provides a measure of the precision of the data and the graph over time or sample number indicates whether there are systematic trends in the data.
Page 35
Namiquipa Silver Deposit Technical Report
Table 8 OREAS 131a Statistics
Element Ag Pb Zn Number 81 81 81 Mean 31.5 16708 27838 SAMPLE StdDev 1.0 632 1027 Minimum 28.8 15550 25700 Maximum 33.9 20300 33700 Number 81 81 81 Mean 0.86 -1.48 -0.85 RPE StdDev 1.59 1.80 1.77 Minimum -3.52 -5.04 -4.81 Maximum 4.63 8.27 8.71 Mean 30.9 17200 28300 STANDARD LCI 30.2 16900 27900 UCI 31.5 17500 28800 RATIO of Sample to 102% 97% 98% Standard
Page 36
Namiquipa Silver Deposit Technical Report
Ag 35 34 33
32
Ag ppm 31 30 29 28 125000 130000 135000 140000 145000 150000 155000 Sample ID
Pb 20000
19000
18000
Pb ppm 17000
16000
15000 125000 130000 135000 140000 145000 150000 155000 Sample ID
ZN 32000 31000 30000 29000
Zn ppm 28000 27000 26000 25000 125000 130000 135000 140000 145000 150000 155000 Sample ID
Figure 19 OREAS 131a Page 37
Namiquipa Silver Deposit Technical Report
Ag RPE 25
15
5 Ag RPE RPE % -5
-15
-25 125000 130000 135000 140000 145000 150000 155000 Sample ID
Pb RPE 25
15
5 Pb RPE RPE % -5
-15
-25 125000 130000 135000 140000 145000 150000 155000 Sample ID
Zn RPE 25
15
5 Zn RPE RPE % -5
-15
-25 125000 130000 135000 140000 145000 150000 155000 Sample ID
Figure 20 OREAS 131a RPE plots
Page 38
Namiquipa Silver Deposit Technical Report
ORE133a (Table 9, Figures 21, 22)
The medium grade standard, ORE133a, averages 96ppmAg, 4.52%Pb and 9.91%Zn compared with the Standard specifications of 100ppmAg – 4.90%Pb – 10.87%Zn, which is an underestimation of 96%, 92% and 91% respectively. This association is evident on the RPE curves with the spread of data occurring dominantly on the negative side of the graph axis.
Table 9 OREAS 133a Statistics
Element Ag Pb Zn Number 127 127 127 Mean 96.0 45173 99054 SAMPLE StdDev 12.9 11927 26105 Minimum 0.0 0 0 Maximum 128.0 62800 134000 Number 127 127 127 Mean -2.87 -7.10 -7.64 RPE StdDev 12.50 24.26 24.11 Minimum -100.00 -100.00 -100.00 Maximum 12.28 12.34 10.42 Mean 100 49000 108700 STANDARD LCI 98 48100 106800 UCI 101 49900 110700 RATIO of Sample to 96% 92% 91% Standard
Page 39
Namiquipa Silver Deposit Technical Report
Ag 120 115 110
105 100
Ag ppm 95 90 85 80 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb 54000
52000
50000
Pb ppm 48000
46000
44000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
ZN
114000 112000 110000
108000
Zn ppm 106000 104000 102000 100000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 21 OREAS 133a
Page 40
Namiquipa Silver Deposit Technical Report
Ag RPE 25
15
5 Ag
RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb RPE 25 15
5 Pb
RPE RPE % -5 -15 -25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Zn RPE 25
15
5 Zn RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 22 OREAS 133a RPE plots
Page 41
Namiquipa Silver Deposit Technical Report
ORE134a (Table 10, Figures 23, 24)
The high grade standard, ORE134a, averages 181ppmAg, 11.66%Pb and 15.45%Zn compared with manufacturer’s specification of 201ppmAg, 12.79%Pb and 17.27%Zn. This represents a 10% underestimation in silver, lead and zinc.
All metals display a tight distribution around the median value. There are no temporal trends and except for 2 recent samples there are no other outliers.
Table 10 OREAS 134a Statistics
Element Ag Pb Zn Number 116 116 116 Mean 180.6 116586 154483 SAMPLE StdDev 53.3 34403 45381 Minimum 0.0 0 0 Maximum 255.0 172000 207000 Number 116 116 116 Mean -9.02 -8.35 -9.21 RPE StdDev 26.59 26.77 26.51 Minimum -100.00 -100.00 -100.00 Maximum 11.84 14.70 9.03 Mean 201 127900 172700 STANDARD LCI 196 123400 169500 UCI 205 132300 175900 RATIO of Sample to 90% 91% 89% Standard
Page 42
Namiquipa Silver Deposit Technical Report
Ag 210 205 200
195
Ag ppm 190 185 180 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb
135000
130000
Pb ppm 125000
120000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
ZN 180000
175000
170000
Zn ppm
165000
160000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 23 OREAS 134a
Page 43
Namiquipa Silver Deposit Technical Report
Ag RPE 25
15
5 Ag RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb RPE 25
15
5 Pb RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Zn RPE 25
15
5 Zn RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 24 OREAS 134a RPE plots
Page 44
Namiquipa Silver Deposit Technical Report
ORE36a (Table 11, Figures 25, 26)
The zinc standard, ORE36, averages 9.9ppmAg, 0.55%Pb and 3.80%Zn compared with manufacturer’s specification of 10.2ppmAg, 0.58%Pb and 4.19%Zn. Zinc is underestimated by 10% on average and lead by 5%. Silver is within 2% of the manufacturer’s specification.
Table 11 OREAS 36a Statistics
Element Ag Pb Zn Number 140 140 140
Mean 9.9 5512 38019
SAMPLE StdDev 0.5 191 12387
Minimum 8.8 4900 0
Maximum 11.2 6120 61900
Number 140 140 140
Mean -1.21 -2.49 -9.33
RPE StdDev 2.68 1.73 29.20
Minimum -7.22 -8.33 -100.00
Maximum 4.82 2.77 19.27
Mean 10.17 5790 41900
STANDARD LCI 9.77 5640 41100
UCI 10.58 5930 42600 RATIO of Sample to Standard 98% 95% 91%
Page 45
Namiquipa Silver Deposit Technical Report
Ag 12
11
10
Ag ppm
9
8 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb 6000 5800
5600
Pb ppm 5400 5200 5000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
ZN 44000 43000
42000
Zn ppm 41000 40000 39000 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 25 OREAS 36a
Page 46
Namiquipa Silver Deposit Technical Report
Ag RPE 25
15
5 Ag RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Pb RPE 25
15
5 Pb RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Zn RPE 25
15
5 Zn RPE RPE % -5
-15
-25 130000 135000 140000 145000 150000 155000 160000 165000 Sample ID
Figure 26 OREAS 36a RPE plots
Page 47
Namiquipa Silver Deposit Technical Report
11.2.3 Blanks
From drill-hole NAM-062 the original, finely pulverized Quartz blanks that had been used for the majority of the program were replaced by locally sourced rhyolite rock chips (Figure 27). The rhyolite provides a more realistic test of the inter sample contamination at the pulverizing stage of sample preparation by scouring the bowl and hence assimilating any contaminant material left from the previous sample. Although the quartz powder was pulverized the fineness of the material would have reduced its ability to scour and hence clean the bowl.
As blanks are generally submitted on every 40th sample (2.5%) the number of blanks per drill-hole obviously reflects the drill-hole depth. There are only 9 cases where blanks were not submitted with a drill-hole. In early sampling there was an attempt to submit blanks on an irregular basis following high grade material but this program lost momentum due to the number of inclusions. In general there are 3 to 4 blanks submitted with each drill-hole. Figures 29, 30 present comparisons of the blank value with the preceeding sample value for silver, lead and zinc in each of the Quartz and Rhyolite materials.
For silver in quartz there is one anomalous blank [150325 – NAM054 123.5m] of 2.4g/tAg following a 0.5ppm value. This sample is weakly anomalous in lead, 71 over 21ppm but not in zinc, 90 over 82ppm.
Blank sample [136025 – NAM018 112.6m] returned values of 2.7ppm Ag, 448ppm Pb and 7ppm Zn following an ore grade sample of value 428ppm Ag, 4.96% Pb and 592ppm Zn. This represents a contamination of approximately 1% (0.63% for silver, 0.90% for lead and 1.18% for zinc.
Distribution of BLANKS by Drillhole Quartz 10 Rhyolite 8
6
4
2 Numberper Drillhole 0 0 10 20 30 40 50 60 70 80 Drillhole Number
Figure 27 Distribution of Blanks by Drill-hole
Page 48
Namiquipa Silver Deposit Technical Report
Distribution of BLANKS in Drillholes Quartz 16 14
12 10 8 6 4 Numberof Holes 2 0 0 2 4 6 8 10 Number of BLANKS per drillhole
Figure 28 Distribution of Blanks within Drill-holes
The presence of lead contamination in Quartz blanks follows a regular monotonic increasing pattern when plotted in logarithmic scale (Figure 29). This represents a contamination of approximately 1% regardless of sample tenor.
A similar monotonic increasing pattern occurs in Zinc when plotted in logarithmic scale; this has a gradient of approximately 1%. The group of anomalous samples on the right of the graph with Blank values of 402ppm zinc regardless of preceeding sample values are tentatively explained as a batch of contaminated blanks.
In the Rhyolite Blanks there have been no examples of silver contamination regardless of preceding sample tenor.
Lead and zinc in the Rhyolite blanks display a similar 1% contamination trend to that seen in the Quartz blanks. The one anomalous value in this grouping is sample [158268 - NAM072 201.25m] where the assay results for the Blank value and the preceeding sample have obviously been swapped around during sampling or at the laboratory as the Blank has been returned with values of 48.3ppmAg, 1.81%Pb, 7.16%Zn following a drill sample of 0.2ppmAg, 106ppmPb and 119ppmZn.
There is some variation in the material as evidenced by:
the slight increase in tenor of copper in recent time (NAM-046 – 061),
the presence of anomalous Zn values (all at 402ppm) in drill-holes 1 to 30,
Page 49
Namiquipa Silver Deposit Technical Report
Ag QUARTZ Ag
600 500 400 300 200 100 0 0 0.5 1 1.5 2 2.5 3 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
Pb QUARTZ Pb
1000000 100000 10000 1000 100 10 1 0.1 0.1 1 10 100 1000 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
Zn QUARTZ Zn
100000
10000
1000
100
10
1 0.1 1 10 100 1000 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
Figure 29 Comparison of Blank vs Preceding Sample Value - in Quartz
Page 50
Namiquipa Silver Deposit Technical Report
RHYOLITE Ag
600 500 400 300 Ag 200 100 0 0 10 20 30 40 50 60 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
RHYOLITE Pb
1000000 100000 10000 1000 Pb 100 10 1 0.1 1 10 100 1000 10000 100000 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
RHYOLITE Zn
1000000 100000 10000 1000 Zn 100 10 1 1 10 100 1000 10000 100000 PRECEEDING PRECEEDING SAMPLE VALUE BLANK VALUE
Figure 30 Comparison of Blank vs Preceding Sample Value in Rhyolite
Page 51
Namiquipa Silver Deposit Technical Report
the presence of (relatively) high Be, Fe, K, La, Mn, Na, P, Sr, Ti and V in drill-hole NAM-061,
a U-shaped trend in lead values from early highs to lows to later highs
The tenor of these trends are not considered significant to impact on the usefulness of the Quartz Blanks. A similar analysis for the Rhyolite Blanks indicates no obvious temporal trends.
11.5 Sample Security
Drill core was collected from the drill site at the end of each 12 hour shift by Minera Tasmania staff and stacked at the Core Shed waiting processing. The Core Shed and offices are manned 24 hours per day by operating staff or night watchman. Following logging and sampling drill samples were bagged in lots of 10 with the company name and sample sequence written clearly on the bag. The bags were collected (and receipted) from site by ALS staff and driven directly to the Chihuahua facility.
11.6 Assay Database
Assay data is emailed to the project office by ALS as CSV files. These files are manually merged into a HOLEID/SN file that contains the drill-hole name, sample from-to and the unique sample number allocated to that sample. QAQC samples are also listed in the file in sample number sequence. The file is stored in EXCEL format. A check column in the worksheet contains a conditional test that the fields in the two sample number columns are identical.
11.7 Statement of Adequacy
The authors believe that all sampling, sample preparation, sample security and analytical procedures conform to industry best practice and are adequate to give a representative picture of the nature of the mineralized body and its host rocks. The QAQC program has not indicated any significant errors. The variation is random and is within laboratory error of ± 10%.
ITEM12: DATA VERIFICATION
All manual data entry is proofed on completion; where possible, conditional checks are built into the data entry spread-sheets to check for misallocation of data. Data merges are synchronized on a unique sample number and are checked with conditional codes. Drill-hole data is plotted in plan and section and viewed for spurious results. Recovery, Rock Quality Designation (RQD) and density data are plotted and viewed for internal consistency. Geological logs are printed and proof read by senior geologists. Page 52
Namiquipa Silver Deposit Technical Report
Further verification checks were conducted by T. Carew during and after a site visit in October. 2012. A field check of the collar locations of a number of randomly selected drill holes (5%) with a hand-held GPS unit was satisfactory. A randomly selected sample of nine drill holes (10%) from the database were checked against the original assay certificates and work orders for any miss-matches in assay data and drill hole intervals, and no errors were found. A check sample was selected at random from the core on site and independently submitted to ALS for assaying. The results were essentially identical to the original assay values for same interval sampled.
ITEM 13: MINERAL PROCESSING AND METALLURGICAL TESTING
No detailed metallurgical test work has been completed.
ITEM 14: MINERAL RESOURCE ESTIMATES
14.1 Resource Estimation Database
The database used for this study consists of 86 drill-holes as summarized in Appendix A and B. The drill data was collected solely by Minera Tasmania during 2011-2012 using diamond drilling techniques. Plan maps of the underground workings were scanned and digitized. 3D models of the workings and veins were created in GEMS (Figure 7). No underground assay data was used in the study.
14.2 Geological Modeling
Geological modelling and grade estimation was completed using MicroMODEL®, originally supplied by Pincock, Allen & Holt Inc. of Denver, Colorado and upgraded by Computer Aided Geoscience Pty Ltd.
14.2.1 Model Boundary
A three dimensional block model was defined over the project area with a southeast corner at 269,636 East, 3,229,628 North, 1,300 Elevation and an orientation of 025°TN. All survey data is in UTM format based on the WGS84 UTM Zone 13 Projection. The model dimensions are listed in Table 12.
Page 53
Namiquipa Silver Deposit Technical Report
Table 12 Model Definition
Origin Orientation Number Size (m) Bench 1,300 RL 70 10 Row 3,229,628 N 0250 165 10 Columns 269 636 E 300 2
14.2.2 Topography
A topographic mesh to cover the block model area was interpolated using a direchlet triangulation of hand- held GPS elevations collected during the ground magnetic survey. The accuracy of this data is generally ± 3 meters horizontal and 1 meter vertical. One meter contours generated from the triangulation compare well with the detailed surveying of the drill collars.
14.2.3 Geology
Assay data was manually coded with a three digit parameter to highlight changes in the style of mineralization that was being intersected by the drill-holes. The parameter used digit 1 to represent silver, digit 2 for lead and digit 3 for zinc. The nominal cut-offs applied to the parameter values of 0,1 and 2 are summarized in Table 13. These cut-off values were selected from an analysis of the sample statistics (see below). Under this system a code of 111 referred to high grade silver-lead-zinc whereas 221 indicated low grade silver-lead with high grade zinc. Code 000 was un-mineralized. Initial strict coding by assay value was manually overwritten in part to bulk out the mineralization zones based on geologic context.
Table 13 Cut-offs for Mineralization Coding
Metal Code 0 Code 2 Code 1 Ag Ag < 10 10 <= Ag < 40 Ag => 40 Pb Pb < 150 150 <= Pb < 1000 Pb => 1000 Zn Zn < 500 500 <= Zn < 2500 Zn => 2500
The interpretation of this data concluded:
1. The zinc mineralization had the most extensive geographic distribution, with lead occurring as discrete zones within the zinc, and silver superimposed on both but showing a greater preference for lead. Page 54
Namiquipa Silver Deposit Technical Report
2. A paragenetic sequence of zinc rich mineralization over-printed by lead and then by silver is suggested from the metal associations.
Figure 31 Proposed Paragenetic Sequence
3. High grade mineralization (code 111) was common close to the margins of the zinc distribution. 4. A sub-horizontal distribution of low grade silver with no lead or zinc (code 200) occurred over the top of the zinc distribution. 5. Internal mapping of the individual zones was not considered feasible at the current drill density.
A total mineralization boundary was mapped on each drill section that included all silver, lead and zinc mineralization (codes 1 or 2); this generally reflected the overall zinc distribution. Sectional interpretations of the total mineralization boundaries, as defined by drill-hole intercepts were cut by 10 meter bench slices and interpreted in plan view to define the extent and geometry of the mineralization. These plan interpretation was further zoned into conformable structural elements that matched the overall orientations of the America system - Zone 1, the Princesa North system - Zone 2, and the Princesa South system – Zone 5 (Figure 32). The rock model was then coded using a point in polygon routine to determine appropriate coding for each block in the model. Material outside the mineralization was coded as 999.
Within each of the zoned structural elements Indicator Kriging was used to map the distribution of high grades for each of silver, lead and zinc. Rock codes were then re-classified from 1, 3, 5 to 11, 13 or 15 where the indicator variable suggested that the probability of high grade material occurring was greater than 50% for silver, 60% for lead and 75% for zinc. The varying levels of confidence were based on visual validation of the indicator models against drill-hole plots.
The Indicator models were built using Ordinary Kriging working within geologically defined ellipsoids for each of the structural elements. Comparable search parameters were used for both the geologic definition as well as the grade interpolation.
Page 55
Namiquipa Silver Deposit Technical Report
Figure 32 Geological Zones on the 1800 Level Page 56
Namiquipa Silver Deposit Technical Report
Table 14 Geology Codes
Geology Description Grade Zone Composite Code Model Code Low 1 1 America system High 11 11 Low 3 3 Princesa North system High 13 13 Low 5 5 Princesa South system High 15 15 Other 999 999
14.3 Sample Statistics
A total of 20,319 samples have been assayed for the Namiquipa evaluation. The metal populations are generally log-normal and in the case of lead and zinc, distinctly multi-modal (Figure 33).
Silver has an average sample grade of 8 ± 56 g/t Ag within a data range from 0.2 to 2,500 g/t. The population is weakly bimodal with a threshold at around 150g/t Ag.
Lead is distinctly tri-modal with thresholds at approximately 35 and 65,000 ppm partitioning the population into waste (55% of data), mineralized (~45%) and anomalous (0.25%). The average grade is 938 ± 6459 ppm Pb.
Zinc is also tri-modal with thresholds at 100 and 10,000 ppm, partitioning the population into waste (45% of data), mineralized (~55%) and weakly anomalous (0.3%). In the mineralized sub-population zinc also displays a “break” in the distribution curve around 2500ppm.
Two silver samples were top cut to 1,770 g/t to force the resultant composite values into a standard log distribution. The samples were NAM-009 (211-212m) with a value of >10kg/t and NAM-047 (164.6-166) with value 3.54kg/t.
Lead and Zinc sample data were not cut as their cumulative frequency plot indicated a “lack” of anomalous results rather than the contrary.
Page 57
Namiquipa Silver Deposit Technical Report
Ag
Pb
Zn
Figure 33 Sample Data - Log Probability Plots
Page 58
Namiquipa Silver Deposit Technical Report
Table 15 Summary Statistics Sample Data
Rock Standard Number Mean Log Mean Minimum Maximum Type Deviation Ag 1,3,5 20,319 8.1 55.5 4.5 0.2 2,500 Pb 1,3,5 20,319 938 6,459 378 0.8 200,000 Zn 1,3,5 20,319 1,831 10,540 863 2 300,000
14.4 Compositing and Statistics
The optimal composite length for this mineralization is calculated at 1.75 meters based on a Bench Height Analysis [BHA] study. The BHA progressively increases the composite length looking for the first significant reduction in variance that does not impact on the mean grade. This reduction in variance indicates that all the micro scale grade trends are incorporated into the basic sample unit (Table 16, Figure 34).
Table 16 Bench Height Analysis Summary for Silver
Composite Mean Number Variance Minimum Maximum Length (m) Value 1 20288 7.7281 2239.304 0.2 2500.002 1.5 13522 7.7319 1726.617 0.2 1790.335 2 10127 7.7294 1638.816 0.2 1849.236 2.5 8107 7.726 1388.732 0.2 1326.801 3 6748 7.7239 1261.405 0.2 1135.024
VARIANCE 2500
)
2 2000
1500
1000
Variance (ppm 500
0 0 0.5 1 1.5 2 2.5 3 3.5 Composite Length m
Figure 34 BHA - Change in Variance Page 59
Namiquipa Silver Deposit Technical Report
Drill data was down-hole composited to 2 meter intervals. A rock code was assigned to each composite based on its geographic location in the rock model. Summary statistics were calculated for each of the major elements (Table 17, Figure 35).
Silver is essentially a uni-modal log normal population with an arithmetic mean of 18.4 ± 60 within a data range from 0.2 to 1,335 g/t Ag. The log estimate of the mean is 16.8 g/t Ag.
Lead is also essentially uni-modal log normal. Its data range is from 2.4ppm to 11.98% and has a mean of 2,380 ± 7,015 ppm Pb. The log estimate of the mean is 2,315 ppm Pb.
Similarly, zinc is also essentially uni-modal log normal. The arithmetic average is 4,764 ± 12,922 within a data range from 3ppm to 16.27%. The log estimate of the mean is 4,403.
Table 17 Summary Statistics Composite Data
Rock Standard Number Mean Log Mean Minimum Maximum Type Deviation Ag 1,3,5 2,764 18.4 60 16.8 0.2 1,335
Pb 1,3,5 2,776 2,380 7,015 2,315 2.4 119,750
Zn 1,3,5 2,776 4,764 12,922 4,403 3 162,694
Page 60
Namiquipa Silver Deposit Technical Report
Ag
Pb
Zn
Figure 35 Composite Data - Log Probability Plots
Page 61
Namiquipa Silver Deposit Technical Report
14.5 Variography
Total and down-hole log and linear variograms were calculated for mineralized composites of silver, lead and zinc. Although the linear variograms were poorly defined they were used to estimate the nugget effects and sills used in the Ordinary Kriging routines (Table 19). The log variograms were better defined and were useful for determining relative variances and ranges. The down-hole log variograms indicate an average down-hole width of the mineralization of around 30 meters. Indicator variograms suggest overall geologic continuity ranges of 75 to 100 meters (Table 18).
14.6 Grade Modeling
Block grades for silver, lead and zinc were interpolated using Ordinary Kriging acting within an oriented and scaled search ellipsoid. Grades were only interpolated within the interpreted mineralized outline.
The ellipsoids were defined with reference to geology and variography and scaled to suit the data distribution. A maximum search range of 125 meters was used (Table 20).
Composites were selected by sector search (6 sectors at 5 samples per sector) for a maximum of 30 samples. Blocks were interpolated using composites of comparable code. Point interpolations were made at the block centre using the same scaled ellipsoid to calculate the anisotropic distance weights. A minimum of four points was required for a determination.
14.7 Model Validation
The models were validated by visual comparison of model sections against drill-hole section plots. The tenor and orientation of the grade trends were considered to adequately reflect the original data.
This visual comparison is supported by statistical comparison of composite and model statistics (Tables 21) which show that the model grades are, on average, within 10-15% of the original data, that they have similar distributions and do not suffer too greatly from regression effects.
Visual checks were made of the block model at all stages of construction to verify that the appropriate flagging and domaining was undertaken. Visual checks comparing the drill-hole data to the estimated block grades was also undertaken. No obvious errors were noted.
Page 62
Namiquipa Silver Deposit Technical Report
Table 18 Indicator Variograms for High Grade / Low Grade Partitioning
Down-hole Total
Ag
Pb
Zn
Page 63
Namiquipa Silver Deposit Technical Report
Table 19 Log Variograms for Mineralized Composites
Down-hole Total
Ag
Pb
Zn
Page 64
Namiquipa Silver Deposit Technical Report
Table 20 Summary of Search Parameters
Maximum Ellipsoid Dimensions Ellipsoid Orientation Search Block Data Entity Search Type X- Strike Code Code Range Strike Dip Strike Dip Strike Plunge 1 Sector 125 125 125 20 030 0 75 1,3,5 1,3,5 11 Sector 125 125 125 20 030 0 75 11,13,15 11,13,15 3 Sector 125 125 125 20 015 0 75 1,3,5 1,3,5 13 Sector 125 125 125 20 015 0 75 11,13,15 11,13,15 5 Sector 125 125 125 20 350 0 75 1,3,5 1,3,5 15 Sector 125 125 125 20 350 0 75 11,13,15 11,13,15
Table 21 Summary Statistics Model Data
Rock Standard Number Mean Minimum Maximum Type Deviation 1, 3, 5 Ag g/t 185,417 17.32 29.95 0.001 703.9 11,13,15 1, 3, 5 Pb % 186,128 0.20 0.36 0.001 4.03 11,13,15 1, 3, 5 Zn % 183,128 0.40 0.64 0.001 7.16 11,13,15
Page 65
Namiquipa Silver Deposit Technical Report
14.8 Resource Classification
The resource is classified as Inferred. Although there is good continuity of the host geology and of the primary mineralized structures the grade variability is not well understood at the current drill spacing.
Within the CIM definitions an “Inferred Mineral Resource” is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill-holes.
At Namiquipa the current drill spacing is sufficient to define broad geological continuity but not adequately define the grade trends and variability.
14.9 Resource Estimate
Geologic and grade continuity is inferred from similarity of geology, grade tenor and intercept thicknesses in adjacent drill-holes.
The resource summary was calculated as the tonnage weighted average of block grades whose values satisfied a variety of cutoff grade determinations. The deposit is open at depth. The resource is estimated at 4.6 million tonnes grading 103 g/t silver, 0.9% lead and 1.7% zinc at a cutoff grade of 154 g/t silver equivalent (Table 22). Silver equivalent grades were calculated using the 12 month average metal prices of US$31.50/oz Silver; US$0.89/lb Zinc; and US$0.92/lb Lead. Metal recoveries are not considered in this calculation. Sensitivity of this resource to cutoff grade is listed in Table 23.
Page 66
Namiquipa Silver Deposit Technical Report
Table 22 Mineral Resource Estimate for the Namiquipa Project
Resource Tonnes AgEq Ag Pb Zn Ag Pb Zn Category M g/t g/t % % Moz ‘000 t ‘000 t Inferred 4.6 154 103 0.91 1.66 15 41 76 Footnotes: 1. Mineral resource estimated according to CIM definitions 2. Mineral resources are reported at a cut-off grade of 100 AgEq g/t. 3. The Silver equivalent grades (“AgEq”) have been calculated using the 12 month average metal prices of US$31.50/oz Silver; US$0.89/lb Zinc; and US$0.92/lb Lead. Metal recoveries are not considered in this calculation. 4. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
Table 23 Resource Summary by Cut-off Grade
Cut-off Grade Tonnes AgEq Ag Pb Zn Ag Pb Zn AgEq g/t M g/t g/t % % Moz ‘000 t ‘000 t 175 1.2 234 191 0.76 1.44 8 9 18 150 1.7 214 165 0.86 1.64 9 15 28 125 2.5 189 142 0.81 1.61 11 20 40 100 4.6 154 103 0.91 1.66 15 41 76 75 7.6 127 79 0.88 1.54 19 67 117
The Silver equivalent grades (“AgEq”) have been calculated using the 12 month average metal prices of US$31.50/oz Silver; US$0.89/lb Zinc; and US$0.92/lb Lead. Metal recoveries are not considered in this calculation
14.10 Resource Estimate Risk
Given that sample collection and assay methods have been demonstrated to satisfy “industry best practice” the estimation risk is principally a function of the drill spacing. Macro scale geology and grade continuity is considered reasonable with broad zones of alteration and mineralization appearing in similar positions on adjacent sections. Meso scale grade continuity has yet to be substantiated.
Page 67
Namiquipa Silver Deposit Technical Report
ITEM 23: ADJACENT PROPERTIES
There are no adjacent properties.
ITEM 24: OTHER RELEVANT DATA
There is no other relevant data known by the authors
ITEM 25: INTERPRETATION AND CONCLUSIONS
Exploration methodology satisfied industry best practice.
QAQC of assay data indicates no significant concerns with grade accuracy or precision.
Modelling of the current drill distribution is a realistic approximation of the known metal distribution.
The resource of 4.6 million tonnes is a realistic estimate of the currently defined resource. This resource will change as infill drilling gives better definition of volumes and grade distribution.
ITEM 26: RECOMMENDATIONS
Future exploration at the Property should be focused in two areas:
1. Continued surface exploration by reconnaissance mapping and rock-chip sampling to identify new vein structures and mineralization elsewhere in the tenement area ;
2. Expansion of soil geochemistry grids to the north and south of the drilled area. The northern area exhibits strong characteristics for a deeper low sulphidation target capped by the upper ignimbrites. The southern area has had limited drill testing.
Estimated cost for this program is US$25,000.
Page 68
Namiquipa Silver Deposit Technical Report
ITEM 27: REFERENCES
Acuna, A Carlos Jurado, 1988, Resource Estimates. Unpublished company report prepared for Minera Namiquipa, SA de CV, dated July 31, 1988
Corbett, G.J., 2007, Controls to low sulphidation epithermal Au-Ag: Talk presented at a meeting of the Sydney Mineral Exploration Discussion Group (SMEDG) with powerpoint and text on SMEDG website www.smedg.org.au
Corbett, G.J., 2011, Comments to aid exploration at Namiquipa, Northern Mexico: report to Cerro Resources July 2011.
Corbett, G.J., 2012, Further Comments to Aid Exploration at the Namiquipa Project, Chihuahua, Mexico., January 2012.
Cumming, C, Stratigraphic framework for Namiquipa Chihuahua State, Mexico : A report prepared for Cerro Resources, June 2012
Flemming, A, Technical Report on the Namiquipa Silver Property, Chihuahua State, Mexico, November 2010
Masterman G, Phillips K, Stewart H, Laurent I, Beckton J, Cordery J, Skeet J; Palmarejo silver-gold project, Chihuahua, Mexico: Discovery of a Ag-Au deposit in the Mexican Sierra, (2006)
Shafelbine RH, 1955; Company Minera Venturosa SA; Namiquipa, Chihuahua, Mexico. Confidential internal report by G H Shafelbine, Manager for Minera Venturosa
Page 69
Namiquipa Silver Deposit Technical Report
Appendix 1 DRILL-HOLE COLLAR SUMMARY
Drill Collar Collar Total Depth Hole ID Easting Northing RL Type Azimuth Dip (m) NAM-001 DDH 270422 3230235 1900 275 65 283.5 NAM-002 DDH 270494 3230656 1916 280 60 420.6 NAM-003 DDH 270429 3230160 1903 260 65 369.1 NAM-004 DDH 270464 3230040 1912 230 60 402.3 NAM-005 DDH 270492 3229889 1930 208 65 301.8 NAM-006 DDH 270490 3229891 1929 245 60 278.0 NAM-007 DDH 270296 3229826 1911 250 60 347.5 NAM-008 DDH 270404 3230428 1904 250 65 283.5 NAM-009 DDH 270439 3230111 1905 260 65 494.2 NAM-010 DDH 270246 3230344 1894 270 60 418.3 NAM-011 DDH 270017 3230306 1885 270 65 307.9 NAM-012 DDH 270106 3229929 1899 270 60 353.6 NAM-013 DDH 270250 3229671 1902 270 60 399.3 NAM-014 DDH 270464 3230201 1904 268 65 435.9 NAM-015 DDH 270497 3229764 1932 264 60 152.4 NAM-016 DDH 270497 3230290 1901 270 60 368.8 NAM-017 DDH 270500 3229761 1932 265 80 155.5 NAM-018 DDH 270518 3231014 1930 240 60 210.3 NAM-019 DDH 270241 3229577 1911 270 60 252.1 NAM-020 DDH 270519 3231015 1930 240 75 286.5 NAM-021 DDH 270312 3229923 1910 270 60 326.7 NAM-022 DDH 270520 3231021 1930 310 60 298.7 NAM-023 DDH 270467 3230166 1905 260 66 469.4 NAM-024 DDH 270502 3230200 1907 268 65 445.0 NAM-025 DDH 270529 3231213 1932 310 60 334.7 NAM-026 DDH 270286 3229670 1906 270 60 539.5 NAM-027 DDH 270671 3231275 1940 310 55 326.1 NAM-028 DDH 270672 3231274 1940 310 70 390.1 NAM-029 DDH 270461 3230546 1911 280 60 435.9 NAM-030 DDH 270284 3229671 1905 270 65 643.1
Page 70
Namiquipa Silver Deposit Technical Report
Drill Collar Collar Total Depth Hole ID Easting Northing RL Type Azimuth Dip (m) NAM-031 DDH 270275 3229506 1922 270 60 301.8 NAM-032 DDH 270322 3229505 1924 270 70 389.8 NAM-033 DDH 270459 3230450 1906 253 60 347.5 NAM-034 DDH 270460 3230450 1906 250 70 405.4 NAM-035 DDH 270323 3229505 1924 90 60 465.2 NAM-036 DDH 270459 3230491 1908 270 70 393.6 NAM-037 DDH 270444 3230113 1905 265 75 516.9 NAM-038 DDH 270663 3229488 1930 270 60 329.2 NAM-039 DDH 270497 3230290 1901 270 70 509.0 NAM-040 DDH 270662 3229488 1930 90 60 478.0 NAM-041 DDH 270511 3229745 1931 36 55 594.4 NAM-042 DDH 270768 3229493 1935 90 65 402.3 NAM-043 DDH 270498 3230362 1901 270 60 405.4 NAM-044 DDH 271029 3229493 1943 270 60 333.8 NAM-045 DDH 270594 3231049 1943 240 70 405.4 NAM-046 DDH 271009 3229494 1944 90 65 228.6 NAM-047 DDH 270570 3230881 1932 280 65 509.0 NAM-048 DDH 270318 3228868 1926 270 60 246.4 NAM-049 DDH 270454 3230776 1918 280 60 417.6 NAM-050 DDH 270339 3228677 1928 270 60 298.7 NAM-051 DDH 270410 3228678 1935 270 60 378.0 NAM-052 DDH 270502 3230766 1921 280 60 182.9 NAM-053 DDH 270503 3230766 1921 290 75 387.1 NAM-054 DDH 270616 3228405 1938 290 60 402.3 NAM-055 DDH 270572 3230881 1932 290 75 403.4 NAM-056 DDH 270254 3228510 1926 260 60 405.4 NAM-057 DDH 270460 3230546 1910 280 70 395.5 NAM-058 DDH 270494 3230656 1916 285 75 411.5 NAM-059 DDH 270463 3230040 1911 260 70 506.0 NAM-060 DDH 270481 3230596 1913 280 60 454.2 NAM-061 DDH 270452 3230286 1897 270 60 335.3 NAM-062 DDH 270585 3230935 1938 280 60 338.4
Page 71
Namiquipa Silver Deposit Technical Report
Drill Collar Collar Total Depth Hole ID Easting Northing RL Type Azimuth Dip (m) NAM-063 DDH 270585 3230935 1938 280 75 420.6 NAM-064 DDH 270553 3230821 1927 280 60 387.1 NAM-065 DDH 270631 3230794 1929 280 60 393.2 NAM-066 DDH 270631 3230794 1929 280 70 490.7 NAM-067 DDH 270635 3230792 1930 225 60 560.4 NAM-068 DDH 270481 3230596 1914 285 75 463.3 NAM-069 DDH 270552 3230646 1918 280 75 539.0 NAM-070 DDH 270438 3231094 1918 310 60 451.1 NAM-071 DDH 270478 3231056 1924 310 60 277.4 NAM-072 DDH 270503 3230703 1920 285 60 350.5 NAM-073 DDH 270452 3230713 1916 285 55 306.9 NAM-074 DDH 270669 3230857 1938 268 70 591.3 NAM-075 DDH 270479 3230895 1923 275 60 262.1 NAM-076 DDH 270176 3229925 1901 260 60 554.7 NAM-077 DDH 270024 3229798 1899 260 60 402.3 NAM-078 DDH 270173 3230211 1891 270 60 329.2 NAM-079 DDH 270404 3230728 1914 280 55 216.4 NAM-080 DDH 270383 3230618 1911 280 55 167.6 NAM-081 DDH 270451 3230835 1919 280 55 207.3 NAM-082 DDH 270332 3230739 1910 280 55 134.1 NAM-083 DDH 270405 3230489 1906 270 60 301.8 NAM-084 DDH 270431 3230331 1898 270 55 402.3 NAM-085 DDH 270236 3230449 1900 292 75 420.6 NAM-086 DDH 270237 3230449 1900 112 85 222.5 Total 32,151
Page 72