CANADIAN NATIONAL INSTRUMENT 43-101 TECHNICAL REPORT

MCEWEN MINING INC.

LOS AZULES PORPHYRY COPPER PROJECT

San Juan Province, Argentina

Effective Date:

August 1, 2013

Date of Report:

November 1, 2013

Qualified Persons:

Richard Kunter, FAusIMM, CP, QP Robert Sim, PGeo Bruce M. Davis, PhD, FAusIMM James K. Duff, PGeo William L. Rose, PE Scott C. Elfen, PE Steven A. Pozder, PE, MBA

Table of Contents

1.0 Summary ...... 16 1.1 Project Location, Access, and Climate ...... 16 1.2 History ...... 18 1.3 Property ...... 19 1.4 Geological Setting ...... 19 1.5 Mineralization ...... 21 1.6 Drilling ...... 22 1.7 Sampling and Analysis ...... 23 1.8 Mineral Resource Estimates ...... 24 1.9 Metallurgical Testwork ...... 24 1.10 Mining, Processing, and Recovery Methods ...... 25 1.11 Local Resources and Infrastructure ...... 26 1.12 Environmental and Permitting ...... 26 1.13 Project Economics ...... 26 1.14 Qualified Persons Recommendations and Conclusions ...... 28 2.0 Introduction ...... 29 2.1 Purpose of the Technical Report ...... 29 2.2 Sources of Information ...... 29 2.3 Personal Inspection of the Los Azules Property ...... 30 3.0 Reliance on Other Experts ...... 31 4.0 Property Description and Location ...... 32 4.1 Location ...... 32 4.2 Property and Title in Argentina ...... 33 4.2.1 Cateo ...... 33 4.2.2 Mina ...... 34 4.2.3 Provincial Reserve Areas ...... 35 4.3 Ownership of the Los Azules Project ...... 35 4.3.1 Los Azules Surface Rights ...... 37 4.4 Royalties and Retentions ...... 38 4.5 Back-in Rights ...... 38 4.6 Environmental Liabilities ...... 38 4.7 Permitting Requirements ...... 39

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4.7.1 Exploration and Prospecting Requirements ...... 39 4.8 Permitting Regulations ...... 39 4.8.1 Environmental Regulation ...... 39 4.8.2 Mine Regulation...... 40 4.8.3 Hazardous Waste Regulation ...... 40 4.8.4 Health and Safety Regulation ...... 40 4.8.5 Mining Investment Law ...... 40 4.9 Glacier Protection Legislation ...... 40 4.10 Environmental Baseline Studies ...... 41 5.0 Accessibility, Climate, Local Resources, Infrastructure, and Physiography ...... 42 5.1 Accessibility ...... 42 5.2 Surface Rights ...... 42 5.3 Climate and Length of Operating Season ...... 42 5.4 Local Resources and Infrastructure ...... 44 5.4.1 Available Personnel ...... 44 5.4.2 Power ...... 45 5.4.3 Water ...... 45 5.5 Topography, Elevation and Vegetation ...... 45 5.6 Availability of Area for Tailings Storage, Waste Storage, and Processing Facilities ...... 46 6.0 History ...... 48 6.1 Property History ...... 48 7.0 Geological Setting and Mineralization ...... 50 7.1 Regional Geology ...... 50 7.2 Property Geology ...... 53 7.2.1 Volcanic Country Rocks ...... 53 7.2.2 Intrusive Rocks ...... 53 7.2.3 Structural Geology ...... 59 7.2.4 Hypothermal Alteration ...... 61 7.2.5 Geochronology ...... 63 7.3 Mineralization ...... 64 7.4 Hypogene Mineralization ...... 67 7.5 Supergene Mineralization ...... 73 7.6 Other Mineralization ...... 77 8.0 Deposit Types ...... 78

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8.1 Deposit Types ...... 78 9.0 Exploration ...... 81 9.1 Exploration History ...... 81 9.2 Geological Mapping and Sampling ...... 81 9.3 Geochemistry ...... 81 9.3.1 Surface Samples ...... 81 9.4 Geophysics ...... 90 9.4.1 Battle Mountain Gold (1998-99) ...... 90 9.4.2 MIM-Xstrata (2003-2004) ...... 91 9.4.3 Minera Andes: TITAN-24 Survey (2010) ...... 92 9.4.4 McEwen Mining: Ground Magnetic Survey (2012) ...... 93 9.5 Surveys and Investigations ...... 94 10.0 Drilling ...... 95 10.1 Drilling Procedures and Conditions ...... 97 10.2 Battle Mountain Gold (1998-99) ...... 97 10.3 MIM-Xstrata (2004) ...... 97 10.4 Minera Andes / McEwen Mining (2004-2013) ...... 97 10.5 Logging ...... 97 10.6 Surveys ...... 98 10.7 Drill Hole Results ...... 98 10.8 True Thickness of Mineralization ...... 101 10.9 Orientation of Mineralization ...... 101 11.0 Sample Preparation, Analyses and Security ...... 102 11.1 Introduction ...... 102 11.2 Sampling Methods ...... 103 11.2.1 Core Sampling ...... 103 11.3 Sample Preparation ...... 104 11.3.1 QC Sample Insertion ...... 104 11.3.2 Chain of Custody ...... 104 11.4 Control Samples ...... 105 11.4.1 Standard Reference Materials (Standards) ...... 105 11.4.2 Control Sample Performance ...... 105 11.4.3 Blank Sample Performance ...... 107 11.4.4 Course Duplicate Sample Performance ...... 107

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11.4.5 Pulp Duplicate Sample Performance ...... 107 11.5 Conclusions ...... 107 12.0 Data Verification ...... 108 12.1 Verification of Geologic Data ...... 108 12.1.1 Database Verification ...... 108 12.1.2 Site Visit Validation ...... 108 12.1.3 Conclusions ...... 108 13.0 Mineral Processing and Metallurgical Testing ...... 110 13.1 Review of Metallurgical Test Work ...... 110 13.1.1 Summary ...... 110 13.1.2 Bottle Roll and Column Leaching Tests ...... 110 13.1.3 Grinding ...... 111 13.1.4 Flotation ...... 111 13.1.5 Flotation Concentrate Leach ...... 112 14.0 Mineral Resource Estimates ...... 113 14.1 Introduction ...... 113 14.2 Available Data ...... 113 14.3 Geologic Model, Domains and Coding ...... 116 14.4 Compositing ...... 118 14.5 Exploratory Data Analysis ...... 118 14.5.1 Basic Statistics by Domain ...... 119 14.5.2 Contact Profiles ...... 121 14.5.3 Conclusions and Modeling Implications ...... 122 14.6 Bulk Density Data ...... 123 14.7 Evaluation of Outlier Grades ...... 124 14.8 Variography ...... 124 14.9 Model Setup and Limits ...... 125 14.10 Interpolation Parameters ...... 126 14.11 Validation ...... 127 14.11.1 Visual Inspection ...... 127 14.11.2 Model Checks for Change Support ...... 127 14.11.3 Comparison of Interpolation Methods ...... 128 14.11.4 Swath Plots (Drift Analysis) ...... 129 14.12 Resource Classification ...... 130

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14.13 Mineral Resources ...... 131 14.14 Comparison with the Previous Resource Estimate ...... 134 15.0 Mineral Reserves Estimate ...... 136 16.0 Mining Methods ...... 137 16.1 Pit Limit Evaluations ...... 137 16.2 Mining Phase/Pit Designs ...... 139 16.3 Mine Production Schedule ...... 142 16.4 Waste Rock Storage and Heap Leach Facilities ...... 145 16.5 Hydrogeological Pit Dewatering ...... 146 16.6 Mine Equipment ...... 147 16.7 Mine Workforce ...... 148 17.0 Recovery Methods ...... 150 17.1 Process Flowsheet ...... 150 17.2 Process Plant Location ...... 151 17.3 Process Description ...... 153 17.3.1 Crushing and Coarse Ore Stockpile ...... 153 17.3.2 Grinding ...... 153 17.3.3 Flotation and Regrind ...... 153 17.3.4 Concentrate Thickening ...... 154 17.3.5 Concentrate Transportation ...... 154 17.3.6 Concentrate Filtration ...... 154 17.3.7 Concentrate Leaching ...... 154 17.3.8 Countercurrent Decantation ...... 154 17.3.9 Gold Recovery ...... 155 17.3.10 Tailings ...... 155 17.3.11 Heap Leaching ...... 155 17.3.12 Solvent Extraction (SX) ...... 155 17.3.13 Electrowinning (EW) ...... 156 18.0 Project Infrastructure ...... 157 18.1 Mine Access Road ...... 157 18.2 Waste Rock Storage Facility (WRSF) ...... 158 18.3 Tailings Storage Facility (TSF) ...... 159 18.3.1 TSF Location ...... 159 18.3.2 TSF Design ...... 161

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18.4 Heap Leach Pad and Ponds ...... 162 18.5 Man Camp Facilities ...... 164 18.6 Employee Housing and Transportation ...... 164 18.7 Power ...... 164 18.7.1 Power Supply Source and Routing ...... 164 18.7.2 Estimated Schedule ...... 164 18.7.3 Site Electrical Power Distribution ...... 165 18.8 Water Supply ...... 165 19.0 Market Studies and Contracts ...... 166 19.1 Copper Markets ...... 166 19.1.1 Cathode Markets – Domestic and International ...... 166 19.1.2 Cathode Marketability ...... 166 19.1.3 Copper Cathode Producer Premiums ...... 166 19.1.4 Port Options and Freight ...... 167 19.1.5 Doré Metal ...... 168 19.2 Contracts ...... 168 20.0 Environmental Studies, Permitting, and Social or Community Impact ...... 169 20.1 Environmental Baseline Studies ...... 169 20.2 Hydrology ...... 169 20.3 Geomorphology and Glacier Studies ...... 169 20.4 Archeology Studies ...... 170 20.5 Closure and Reclamation ...... 171 20.5.1 Introduction ...... 171 20.5.2 Reclamation and Closure by Facility ...... 171 20.5.3 Monitoring and Reporting ...... 173 21.0 Capital and Operating Costs ...... 174 21.1 Capital Costs ...... 174 21.1.1 Process Plant and Infrastructure Capital Costs ...... 174 21.2 Owner’s Costs ...... 176 21.3 Operating Costs ...... 177 21.3.1 Mine Operating Cost Estimates ...... 177 21.3.2 Process and G&A Operating Cost Estimates ...... 178 22.0 Economic Analysis ...... 179 22.1 Introduction ...... 179

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22.2 Model Inputs ...... 179 22.2.1 Capital Costs ...... 180 22.2.2 Operating Costs ...... 181 22.2.3 Royalty Tax and Export Retention Tax ...... 182 22.3 Economic Results ...... 182 22.4 Sensitivity Analysis ...... 183 22.5 Mine Life and Capital Payback ...... 185 23.0 Adjacent Properties ...... 186 24.0 Other Relevant Data and Information ...... 187 24.1 Stakeholder Mapping ...... 187 25.0 Interpretation and Conclusions ...... 188 25.1 Interpretation and Conclusions ...... 188 25.2 Risks and Opportunities...... 189 25.2.1 Overall Risks ...... 189 25.2.2 Back-In Right Risk ...... 189 25.2.3 Mining Investment Law Risk ...... 190 25.2.4 Opportunities ...... 190 26.0 Recommendations ...... 192 27.0 Date and Signature Pages ...... 193 28.0 References & Glossary of Terms ...... 208 28.1 References ...... 208 28.2 Glossary ...... 210

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List of Figures

Figure 1.1: Location Map (Minera Andes 2009) ...... 17 Figure 1.2: Geology Distribution Map (McEwen 2013) ...... 20 Figure 1.3: Mineralization Distribution (McEwen 2012) ...... 21 Figure 1.4: LOM Operating Costs per Tonne Processed Material (Samuel Engineering 2013) ...... 27 Figure 4.1: Project Location (Minera Andes 2009) ...... 32 Figure 4.2: Map of Mineral Claims and Surface Ownership (McEwen 2013) ...... 37 Figure 5.1: Monthly Temperature Data (McEwen 2013)...... 43 Figure 5.2: Monthly Total Precipitation Data (McEwen 2013) ...... 43 Figure 5.3: Monthly Wind Speed Data (McEwen 2013) ...... 44 Figure 5.4: Facility Location Map with Property Boundary (Samuel Engineering 2013) ...... 47 Figure 7.1: Physiographic Features of San Juan Province, Argentina (Rojas 2010) ...... 51 Figure 7.2: Regional Geology of the Andean Cordillera of Argentina and Chile (Rojas 2010) ...... 52 Figure 7.3: Geologic Map of Los Azules (Pratt and Bolsover 2010) ...... 54 Figure 7.4: Legend for Figure 7.3 ...... 55 Figure 7.5: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013) ...... 57 Figure 7.6: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013) ...... 58 Figure 7.7: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013) ...... 58 Figure 7.8: Kinematic Structural Interpretation of Los Azules Porphyry Copper Deposit (Pratt 2010) ...... 60 Figure 7.9: Typical Drill Core from Los Azules Indicating the Strongly Fracture Nature of the Rock (McEwen 2013) ...... 61 Figure 7.10: East-west Cross Section (6,559,800N) (McEwen 2013) ...... 63 Figure 7.11: Grade x Thickness map of Los Azules (McEwen 2013) ...... 65 Figure 7.12: Cross Section Showing the Resource Model Grades at Los Azules (McEwen 2013) ...... 66 Figure 7.13: Cross Section Showing the Resource Model Grades at Los Azules (McEwen 2013) ...... 66 Figure 7.14: Cross Section of the Enriched Zone Associated with the Main Los Azules Deposit (McEwen 2013) ...... 67 Figure 7.15: Hole AZ-10-53A; 605 meters EDM Veins (McEwen 2013) ...... 69 Figure 7.16: Hole AZ-10-53A; 605 Meters Quartz “A” Vein (McEwen 2013) ...... 70

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Figure 7.17: Hole AZ-10-53A; 123 Meters “B” Vein (McEwen 2013) ...... 70 Figure 7.18: Hole AZ-10-53A; 395 Meters Crystalline-Drusy Quartz Vein (McEwen 2013) ...... 71 Figure 7.19: Hole AZ-10-57; 219 Meters “D” Vein (McEwen 2013) ...... 72 Figure 7.20: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013) ...... 74 Figure 7.21: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013) ...... 75 Figure 7.22: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013) ...... 76 Figure 7.23: Vertical Longitudinal Section on N15°W (A-A’ in Figure 7.4) Looking NE Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013) ...... 76 Figure 7.24: Longitudinal Section (A-A’ in Figure 7.11) Resource Model Copper Grade Distribution at Los Azules. The Lower Gray Line is the Limiting Shell for the Resource Model (McEwen 2013) ...... 77 Figure 8.1: Part of the Central Chile Segment of the Miocene-early Pliocene Porphyry Copper Belt (Rojas 2008) ...... 79 Figure 8.2: Diagram Showing Spatial Relationships between a Porphyry Copper System and the Surrounding Environment (Sillitoe 2010) ...... 80 Figure 9.1: Contour Plot Showing Surface Sample Molybdenum Values at Los Azules (Rojas 2008) ...... 83 Figure 9.2: Contour Plot Showing Surface Sample Copper Values at Los Azules (Rojas 2008) ...... 84 Figure 9.3: Contour Plot Showing Surface Sample Lead Values at Los Azules (Rojas 2008) ...... 85 Figure 9.4: Contour Plot Showing Surface Sample Zinc Values at Los Azules (Rojas 2008) ...... 86 Figure 9.5: Contour Plot Showing the Spotty Distribution of Surface Sample Gold Values at Los Azules (Rojas 2008) ...... 87 Figure 9.6: Contour Plot Showing Surface Sample Silver Values at Los Azules (Rojas 2008) ...... 88 Figure 9.7: Contour Plot Showing Surface Sample Arsenic Values at Los Azules (Rojas 2008) ...... 89 Figure 9.8: Magnetic Map of Los Azules (Reduced to Pole; 1 kilometer square grid) (Rojas 2008) ...... 91 Figure 9.9: Section 58,400N Showing 2D IP Inversion Anomaly (Southwest Target) (McEwen 2012) ...... 93 Figure 9.10: Total Magnetic Field for 2012 Survey Overlain on Figure 9.8 (McEwen 2012) ...... 94 Figure 10.1: Copper Mineralization Cut-off Grade Distribution and Locations of drill holes at Los Azules (McEwen 2013) ...... 96 Figure 11.1: Example SRM Control Chart from 2010 Drilling (Sim 2013) ...... 106 Figure 14.1: Isometric View Showing Copper Grades and Location of New Drill Holes (Sim 2013) ...... 114 Figure 14.2: Distribution of MinZone Domains (Sim 2013) ...... 117 Figure 14.3: Boxplot of Copper by Lithology Type (Sim 2013) ...... 119

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Figure 14.4: Boxplot of Copper by Alteration Type (Sim 2013) ...... 120 Figure 14.5: Boxplot of Copper by MinZone Type (Sim 2013) ...... 120 Figure 14.6: Contact Profile of Copper Between Leach and Supergene Domains (Sim 2013) ...... 121 Figure 14.7: Contact Profile of Copper Between Supergene and Primary Domains (Sim 2013) ...... 122 Figure 14.8: Change of Support Curves for Copper in Supergene and Primary Zones (Sim 2013) ...... 128 Figure 14.9: Grade-Tonnage Comparison of OK, ID and NN Models (Sim 2013) ...... 129 Figure 14.10: East-West Swath Plots of Copper in Supergene and Primary Zones (Sim 2013) ...... 130 Figure 14.11: Areas of Supergene and Primary Zones Defined in the Indicated Category (Sim 2013) ... 131 Figure 14.12: Extent of Base Case Resources by Class (Sim 2013) ...... 132 Figure 16.1: Ultimate Pit Design (Rose 2013) ...... 141 Figure 16.2: Waste Rock Storage Facility and Heap Leach Pad Site Location (Ausenco 2013) ...... 146 Figure 17.1: Process Block Flow Diagram (Samuel Engineering 2013) ...... 150 Figure 17.2: Process Plant Location (Samuel Engineering 2013)...... 152 Figure 18.1: Potential Mine Access Routes (Ausenco 2011) ...... 158 Figure 18.2: WRSF Siting Map (Ausenco 2013) ...... 159 Figure 18.3: TSF Location (Ausenco 2013) ...... 161 Figure 18.4: Heap Leach Pad Layout (Ausenco 2013) ...... 163 Figure 19.1: Port Options Map (Selmar 2013) ...... 167 Figure 20.1: Los Azules Geomorphological Map (Mountain Pass 2012) ...... 170 Figure 22.1: LOM Operating Costs per Tonne Mineralized Material (Samuel Engineering 2013) ...... 181 Figure 22.2: Capital and Operating Cost Sensitivity on IRR (Pre-tax) (Samuel Engineering 2013) ...... 184 Figure 22.3: Copper Price per Pound Sensitivity on IRR (Pre-tax) (Samuel Engineering 2013) ...... 184 Figure 22.4: Copper Price per Pound Sensitivity on NPV @ 8% (Pre-tax) (Samuel Engineering 2013) ... 185

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List of Tables

Table 1.1 Exploration Drilling by Year and by Company ...... 23 Table 1.2 Estimate of Mineral Resources for Los Azules Deposit (0.35% Cu cut-off) ...... 24 Table 1.3 Life of Mine Operating Cost Summary ...... 27 Table 2.1 List of Contributing Authors ...... 29 Table 4.1 Minera Andes S.A. Mineral Claim Status ...... 35 Table 7.1 Key of Lithologies ...... 56 Table 9.1 Outcrop and Drill Hole Proxy Samples ...... 82 Table 9.2 Range of Anomalous Values in Outcrops ...... 82 Table 10.1 Exploration Drilling by Year and by Company ...... 95 Table 10.2 Significant Drilling Results ...... 99 Table 11.1 Sample Control Standards (2006-2007) ...... 105 Table 13.1 Locked-Cycle Test Work Results ...... 112 Table 14.1 Summary of Assay Data ...... 115 Table 14.2 Mineral Zone Domains and Coding ...... 116 Table 14.3 Summary of Interpolation Domains ...... 123 Table 14.4 Summary of Outlier Grade Controls ...... 124 Table 14.5 Variogram Parameters - Copper ...... 125 Table 14.6 Block Model Limits ...... 126 Table 14.7 Interpolation Parameters ...... 126 Table 14.8 Estimate of Mineral Resources for Los Azules Deposit (0.35% Cu Cut-off) ...... 132 Table 14.9 Sensitivity of Mineral Resources ...... 133 Table 14.10 Mineral Resource Including Additional Modeled Elements (0.35% Cu cut-off) ...... 134 Table 14.11 Estimate of Mineral Resources by Type (0.35% Cu cut-off) ...... 134 Table 14.12 Comparison with Previous Resource ...... 134 Table 16.1 Floating Cone Recovery and Economic Parameters ...... 137 Table 16.2 Overall Slope Angles for Floating Cone Evaluations ...... 138 Table 16.3 Floating Cone Price Sensitivity Analysis ...... 139 Table 16.4 Basic Pit Design Parameters ...... 140 Table 16.5 Production Scheduling Parameters ...... 142 Table 16.6 Geologic Zones and Bulk Densities ...... 142

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Table 16.7 Los Azules Mine Production Schedule ...... 144 Table 16.8 Resource Classification of Concentrator and Heap Leach Feeds ...... 145 Table 16.9 Primary Mine Equipment Fleet ...... 148 Table 18.1 Proposed Transmission Line Engineering and Construction Schedule ...... 165 Table 21.1 Initial Capital Cost Estimate Summary ...... 174 Table 21.2 Mine Capital Cost Summary ...... 177 Table 22.1 Production, Metal Prices, and Royalties Terms ...... 179 Table 22.2 Life of Mine Capital Cost Summary ...... 180 Table 22.3 Life of Mine Operating Cost Summary ...... 181 Table 22.4 Project Economic Summary ...... 182 Table 26.1 Estimated Cost for De-Risking Tasks ...... 192

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List of Abbreviations

Ampere ...... A Annum (year) ...... a Bank cubic meter ...... BCM Copper ...... Cu Cubic meter ...... m3 Day ...... d Days per week ...... d/wk Days per year (annum) ...... d/a Degree ...... ° Degrees ...... deg Degrees Celsius ...... °C Gold ...... Au Gram ...... g Grams per tonne ...... g/t Greater than...... > Hectare (10,000 m2) ...... ha Hour ...... h Internal Rate of Return ...... IRR Joule (Newton-meter) ...... J Kilometer ...... km Kilowatt-hour ...... kWh Lead ...... Pb Less than ...... < Life-of-Mine ...... LOM Liter ...... L Megawatt ...... MW Meter ...... m Meters above sea level ...... masl Meters per second ...... m/s Metric tonne ...... t Metric tonne ...... mt Micrometer (micron) ...... µm Million ...... M Millipascals ...... mPa Minute (plane angle) ...... ' Molybdenum ...... Mo Month ...... mo Net Present Value ...... NPV Ohm (electrical) ...... Ω Ounce (troy) ...... ozt Parts per million ...... ppm Pascal (Newtons per square meter) ...... Pa Percent ...... %

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Phase (electrical) ...... Ph Potential of Hydrogen (i.e. acidity or alkalinity level) ...... pH Pound (avoirdupois) ...... lb Preliminary Assessment ...... PA Professional Engineer ...... PE Run-of-Mine ...... ROM Second (plane angle) ...... " Second (time) ...... s Silver ...... Ag Specific gravity ...... sg Square meter ...... m2 Tailings Storage Facility ...... TSF Tonne (1,000 kg) ...... t Tonnes per day ...... t/d Volt ...... V Volt-Ampere ...... VA Waste Rock Storage Facility ...... WRSF Watt (Joules per second) ...... W Watt per Square Meter (solar radiation) ...... W/m2

Measurement Units and Symbols The units used in this report are the International System of Units (SI). All dollar figures represented throughout the report are in US Dollars. The reference conditions for gas volume are 0°C and 101.325 kPa, corresponding with a molar (ideal) gas volume of 22.414 m3/ (kg-mol). This is shown as “m3 (normal)” or abbreviated to (non-SI) “Nm3.” The unit “t” rather than Mg is used for 1,000 kilograms mass. The dimensionally independent SI base units are shown in Table x.i. The permitted base units are shown in Table x.ii.

Table x.i SI Base Units Quantity Unit Symbol Length Meter m Mass Kilogram kg Time Second s Electric Current Ampere A Thermodynamic Temperature Kelvin K Amount of Substance Mole mol Luminous Intensity candela cd

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Table x.ii Permitted Base Units Quantity Unit Symbol Definition Minute min 60 seconds Hour h 60 minutes Time Day d 24 hours Calendar Year y 365 days Mass Metric Tonne t 1,000 kg

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1.0 Summary

The Los Azules Project (the “Project”) is a porphyry copper project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. A Preliminary Economic Assessment (scoping study) was completed in 2009, updated in 2010 and expanded in July 2013 to include a larger resource, new metallurgical processes (Pressure Oxidative Leach and Heap Leach), and an increased production. Exploration drilling during 2012 and 2013 has identified important additional mineralization southwest of the main deposit, and the primary objective of drilling during the 2012-2013 exploration season was to continue to expand the resources.

Based on 59,518 meters of diamond core drilling to date, Los Azules has an indicated resource of 389 million tonnes at a grade of 0.63 percent copper containing 5.4 billion pounds of copper and an inferred resource of 1,397 million tonnes at a grade of 0.46 percent copper containing 14.3 billion pounds of copper. The resource also contains low, but recoverable, values of gold.

The mineralization is a typical porphyry copper system. The upper part of the system consists of a barren leached cap, which is underlain by a high-grade secondary enrichment blanket, and the primary mineralization below the secondary enrichment zone extends to at least 1,000 meters.

1.1 Project Location, Access, and Climate The Project is approximately 80 kilometers west of the town Calingasta, in the San Juan Province of Argentina at approximately 31° 06' 25" south latitude and 70° 13' 25" west longitude. It is located approximately 6 kilometers from the border with Chile (refer to Figure 1.1 Location Map). The Project site is accessed by 120 kilometers of unimproved dirt road with eight river crossings and two mountain passes (both above 4,100 meters elevation). Calingasta is located west of the city of San Juan along Route 12. The elevation at site ranges between 3,500 and 4,500 meters above sea level (masl).

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Figure 1.1: Location Map (Minera Andes 2009) Using weather data from the January 2012 to April 2013 period, the climate is semi-arid with moderate snowfall during winter and temperatures as low as -13°C. Average year round wind speed is approximately 13 km/h with maximum recorded wind speed at the man camp of 37 km/h.

The Project area is remote and no infrastructure is present. There are no nearby towns, indigenous residents, or settlements. Seasonal exploration work typically commences in November or December and terminates in late-April or early-May. Exploration operations are supported by means of a man camp near the Project area.

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The Project is located in a broad valley, with a central ridge called La Ballena ridge (whaleback). The property is rugged and ranges in elevation from 3,500 meters at the valley floor to nearly 4,500 meters at the ridge tops. Vegetation is sparse and is virtually absent at higher elevations. Long, narrow marshes occupy the valley floors on either side of La Ballena. The marshes are fed by snowmelt, but likely reflect the groundwater regime as well, with standing water levels at approximately 3,600 meters in elevation. Springs are noted at approximately 3,790 meters in elevation upstream of a pond along the west side of La Ballena. Groundwater-fed springs and ponds are also noted around the range to the west between 3,800 and 3,900 meters in elevation and along the eastern flank of Cordillera de la Totora. These ponds feed the westerly flowing Rio La Embarrada, which is joined by the Rio Frio to the west before turning south into the Rio de Las Salinas, a main tributary to the San Juan River.

Deposits of glacial debris (morainal materials) and scree mantle form much of the deposit and adjacent mountainsides. In the Project area, these materials locally exceed more than 60 meters in thickness, but on La Ballena the cover is often 10 meters or less. There are no covered or uncovered “white glaciers” (classic ice glaciers) in the Project, although there are several small rock glaciers near the Project area that are not impacted by exploration or development activities.

1.2 History There are no formal records of exploration in the Project area prior to 1980. The only important active project in the area prior to 1980 was the El Pachón porphyry copper project, now owned by Glencore Xstrata Plc (Glencore Xstrata), which is located approximately 90 kilometers south of Los Azules. Evidence of prospecting (small trenches or pits) exists on some of the concessions.

In the mid-1980s through the mid-1990s, Battle Mountain Gold Corporation (BMG) explored the area and discovered a large hydrothermal alteration zone associated with dacite porphyry intrusions and stockwork zones. BMG drilled 24 reverse circulation holes during 1998 and 1999 looking for a high-level gold deposit. Low-grade porphyry copper style mineralization was detected in the drilling, but BMG was focused on gold exploration. Concurrently during the mid-1990s Minera Andes acquired concessions in the area based on regional exploration and Landsat imaging. Minera Andes’ claims adjoined the BMG claims to the south.

In December 2003, Minera Andes initiated an exploration program at Los Azules, including geologic mapping and sampling, ground magnetic and induced polarization (IP) geophysical surveys and core drilling. Minera Andes’ initial core drilling intersected porphyry-style copper mineralization, and in 2006 drilling intersected high grade intervals up to 1.6 percent copper over 221 meters and one percent copper over 173 meters in separate holes. By the end of the 2012-2013 field season, 185 diamond drill holes totaling 59,518 meters have been drilled at Los Azules. In addition, 52 reverse circulation holes have been drilled by BMG, Mount Isa Mines (MIM) and Minera Andes/McEwen Mining totaling 10,146 meters.

After BMG merged with Newmont in 2000, part of the BMG properties were acquired by Solitario Resources (the “Solitario property”), a Canadian junior exploration company (now called TNR Resources), and part were acquired by an individual from San Juan named Hugo Bosque. MIM optioned the Solitario property in May 2004. Xstrata succeeded MIM, and in April 2007 it exercised its option to acquire Solitario’s concessions. In 2007, Minera Andes (as operator) and Xstrata entered into an option agreement that consolidated Minera Andes’ and Xstrata’s properties. In October 2009, Xstrata declined to continue to

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participate in the Project, and as a result Xstrata assigned its properties to Minera Andes, and the company now owns 100 percent of the Project.

In January 2012, Minera Andes Inc. was acquired by US Gold Corporation, and the combined company was subsequently renamed McEwen Mining Inc.

Certain portions of the northern part of the Project that were formerly held by Xstrata and transferred to Minera Andes following the termination of the Option Agreement were subject to an underlying option agreement between Xstrata and a subsidiary of TNR Gold Corp. This agreement was the subject of litigation in the Supreme Court of British Columbia, Canada. Pursuant to terms of a settlement agreement, TNR retains a Back-in Right for up to 25% of the equity in the Solitario Properties. The Back-in Right is only exercisable after the completion of a feasibility study. To exercise, TNR must pay two times the expenses attributable to the back-in percentage (i.e. paying 2 × 25% of all the costs attributable to the Solitario Properties). Upon backing-in, TNR may elect to continue to participate in the Project, or upon being diluted down to a 5% or less equity interest, have their interest converted to a 0.6% NSR on Solitario Properties.

1.3 Property McEwen Mining controls approximately 32,700 hectares of mining rights in the area of the Los Azules deposit. In addition, McEwen Mining owns what it believes are sufficient surface rights for the Project.

1.4 Geological Setting Regional geology is characterized by strongly-folded, faulted and elevated Paleozoic-Mesozoic sedimentary and volcanic lithologies (Gondwanide orogeny) overlain by extensive Upper Miocene ignimbrites (Andean orogeny). These lithologies have been intruded in places by Miocene-early Pliocene, hypabyssal (sub-volcanic), diorite-monzonite porphyry intrusions.

Geology at Los Azules comprises Mesozoic volcanic rocks intruded by a Miocene diorite stock, itself intruded by a sub-parallel suite of diorite-dacite dikes along a major NNW-striking fault zone. Porphyry copper style mineralization and hydrothermal alteration are spatially, temporally and genetically related to the dikes. Figure 1.2 is a plan view of the geology map at the 3,500 meter elevation (approximate elevation of valley floor). It shows the distribution of the porphyry dikes at Los Azules.

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Figure 1.2: Geology Distribution Map (McEwen 2013)

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1.5 Mineralization In many respects the Los Azules deposit is a classic Andean-style porphyry copper deposit. Mineralization consists of pyrite, chalcopyrite and bornite in the primary or hypogene zone, and secondary chalcocite with subsidiary covellite in a secondary or supergene enrichment blanket that overlies the hypogene mineralization. The supergene enrichment zone was produced by the circulation of acidic meteoric waters that were created by the breakdown of pyrite. These acidic solutions circulated through the upper oxidized portions of the original deposit leaching out the copper which was then redeposited at lower levels and superimposed on and replaced the original hypogene mineralization.

The upper leached zone (leached cap), which typically extends to approximately 70 to 170 meters below the surface, is essentially devoid of copper values. The secondary enrichment zone underlies the leached zone, and primary mineralization is present below the secondary enrichment zone. There is a transition zone of variable thickness consisting of mixed supergene and hypogene mineralization between the supergene zone and the primary mineralization. Figure 1.3 below is a longitudinal section showing the nature of distribution of the leached cap (beige), chalcocite-enriched (light blue), partially enriched (deep blue), and hypgene copper-mineralized (pink) zones at Los Azules.

Figure 1.3: Mineralization Distribution (McEwen 2012) The deposit at Los Azules is centered on the NNW-trending La Ballena ridge that is situated at the southern end of a NNW-trending hydrothermally altered system approximately eight kilometers long by five kilometers wide. The altered zone surrounds the Los Azules deposit, which is approximately four kilometers long by one kilometer wide, extends at least 1,000 meters below the surface, and corresponds spatially with porphyritic and “crowded” porphyry diorite dikes. The deposit is covered by 40 to 80 meters of gravel and does not outcrop, although some leached cap material is present at surface on the Ballena ridge.

Hydrothermal alteration is classic porphyry-style early potassic (K-feldspar and biotite), and propylitic (chlorite-epidote-albite-calcite) facies overprinted in places by sodic-calcic (albite-chlorite), chloritic, phyllic (quartz-scericite-pyrite) and argillic (supergene) alteration. The mineralization has been dated at 7.8 to 10.6 million years.

Hypogene mineralization is dominantly disseminated as stockwork copper sulfides (up to four percent) and magnetite/hematite. Vein/veinlet stockworks occur widely but are not strongly developed. Ore minerals

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include chalcopyrite and chalcocite with lesser bornite and covellite and trace molybdenite. Pyrite is low except in phyllic alteration (up to five percent). Vein/veinlet stockwork gangue minerals include quartz, anhydrite/gypsum, biotite, chlorite, sericite, pyrite and magnetite. Copper values range between 0.1 to 0.35 percent in the hypogene (potassic-altered) zone. Drilling completed since 2010 has demonstrated that hypogene mineralization is present to depths of at least 1,000 meters below the surface.

Silver (approximately one gram per tonne), traces of gold (up to 150 parts per billion) and molybdenum (up to 600 parts per million) also occur. Surface sample geochemistry results at Los Azules indicate a classic porphyry-style pattern of anomalous copper and molybdenum in the core of the system surrounded by peripheral base and precious metals anomalies.

Geophysical studies (magnetic, magneto-telluric and IP) have identified a shallow magnetic low- chargeability high anomaly corresponding with disseminated and stockwork pyrite in the phyllic alteration zone at Los Azules. In addition, the geophysical data indicate the possible presence of a deep porphyry copper system located southwest of the main deposit. Drilling in 2011, 2012, and 2013 has confirmed the presence of a mineralized system in this area.

1.6 Drilling Drilling programs have been undertaken at Los Azules between 1998 and 2013 by three different mineral exploration companies: Battle Mountain Gold (BMG), MIM Argentina (now Glencore Xstrata) and Minera Andes Inc. (now McEwen Mining Inc.). Drilling initially focused on gold exploration and subsequently on diamond drilling for porphyry style copper mineralization. Drilling conditions have been particularly difficult, especially in faulted intersections or in areas of unconsolidated surface scree/talus, which have resulted in low average drilling rates. Target depth of the drilling has typically been 400 meters and numerous holes in recent campaigns have exceeded a depth of 1,000 meters. In particular, drilling during the most recent campaign to the southwest of the main deposit has focused on deep drilling targets greater than 750 meters in depth. Table 1.1 depicts exploration drilling by year and by company.

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Table 1.1 Exploration Drilling by Year and by Company Year Company No. of Holes Meters Drilled 1998 Battle Mountain Gold 16 3,614 1999 Battle Mountain Gold 8 2,067 2004 Xstrata Copper (MIM) 4 864 2003 - 2004 Minera Andes 9 2,064 2005 - 2006 Minera Andes 11 2,602 2006 - 2007 Minera Andes 17 3,501 2007 - 2008 Minera Andes 18 5,469 2009 - 2010 Minera Andes 28 10,229 2010 - 2011 Minera Andes 44 10,405 2011 - 2012 McEwen Mining 8 2,830 2012 – 2013 McEwen Mining 22 15,873 Total 185(1) 59,518

(1) This table includes all drilling that has occurred on the property. Some holes were redrilled due to drilling difficulties and as a result, were not included in the database. Holes that were started in one season and completed the following season are counted in the year they were started, but the meters drilled in each season are shown for the respective seasons.

Diamond drilling begins with diamond core rigs using a tricone bit to pass through surface talus or gravels. Core drilling commences with PQ size drill steel, reducing to HQ and then to a minimum NQ size as necessary. Most of the drilling is HQ. Many drill holes have bottomed prematurely in good mineralization because of difficult drilling conditions. All holes are surveyed by the drilling contractors using REFLEX and/or Sperry-Sun tools. Average core recovery is 86 percent. In general, the deposit is open at depth.

1.7 Sampling and Analysis The drill core is photographed, logged and split using a pneumatic core splitter at the Project camp by geologists employed or contracted by McEwen Mining. Details are recorded for interval depth, interval width, lithology, alteration types, alteration intensities, alteration minerals, structure, percentage vein quartz, percentage total disseminated sulfides, mineralization minerals, mineral zone (hypogene/ transition/supergene) and other observations. Geotechnical parameters are recorded including percentage of core recovery, rock quality (RQD), fracture density and angle relative to the length of the hole, as well as fracture fill material. The RQD measurements and core recovery are measured at the drill rig by McEwen Mining personnel prior to the core being boxed. The information is transferred at site to a digital database.

The core is sampled at site, typically over two meter intervals, and shipped to either Alex Stewart in Mendoza or ALS Chemex or ACME in Santiago, Chile. Industry-standard QA/QC protocols are strictly adhered to. All of the laboratories are ISO 9001:2000 certified. The samples are analyzed for gold, silver, copper, molybdenum, zinc, lead and arsenic. After the core is logged and sampled it is moved to McEwen Mining’s warehouse in Calingasta where the core boxes are stored on pallets.

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As of June 2013, there are a total of 185 drill holes in the Los Azules database with a cumulative length of approximately 59,518 meters and a total of 27,688 samples analyzed for a suite of elements including total copper, gold, silver and molybdenum. A total of 120 of the drill holes have some portion of the sample intervals tested for sequential copper analysis. Density determinations have been made for 915 drill core samples.

1.8 Mineral Resource Estimates The mineral resource estimate for Los Azules was prepared utilizing three-dimensional block models based on geostatistical applications. The mineral resources are estimated using ordinary kriging with a nominal block size of 20 x 20 x 15 meters. Block grade estimates are derived from drill hole sample results and the interpretation of a geologic model which relates to the spatial distribution of copper, gold, silver and molybdenum in the deposit. To ensure the reported resource exhibits reasonable prospects for economic extraction, the mineral resource is limited within a pit shell generated around copper grades in blocks classified in the Indicated and Inferred categories. Generalized technical and economic parameters include a copper price of $2.75/lb, site operating costs of $1.00/t (mining), $4.25/t (processing, plus general and administration), a pit slope of 34°, and 100% mining and metallurgical recoveries. Some of the deeper mineralization may not be economic due to the increased waste stripping requirements. It is important to recognize that these discussions of surface mining parameters are used solely to test the “reasonable prospects for economic extraction,” and do not represent an attempt to estimate mineral reserves. There are no mineral reserves calculated for the Project. These preliminary evaluations are used to prepare a Mineral Resource Statement and to select appropriate reporting assumptions.

The estimated mineral resource for the Los Azules deposit is shown in Table 1.2. Mineral resources are determined using a base case cut-off grade of 0.35% copper which is based on assumptions from operations with similar characteristics, scale, and location.

Table 1.2 Estimate of Mineral Resources for Los Azules Deposit (0.35% Cu cut-off) Average Grade Contained Metal Cu Au Mo Ag Cu Au Mo Ag Mtonnes % g/t % g/t Blbs Moz Mlbs Moz Indicated 389 0.63 0.07 0.003 1.8 5.39 0.84 25.7 22.9 Inferred 1,397 0.46 0.06 0.004 1.9 14.30 2.58 114.0 85.8 Note: The mineral resources do not have demonstrated economic viability

1.9 Metallurgical Testwork Preliminary metallurgical test work has been conducted to determine the metallurgical response to various treatment methods. These tests have included crushing and grinding work indices, flotation tests, pressure oxidative leaching tests, and bottle roll and column tests for heap leaching. Test work to further optimize flotation for recovery and grade, to investigate pressure oxidative leaching of concentrates and to determine the suitability of leaching low grade materials which are below concentrator cut-off grade would continue in the next phase of the Project. The Bond Ball Mill Work Index values of 12 to 14 indicated a

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mineralized material of medium hardness. Locked cycle flotation tests showed copper recoveries of approximately 89-93 percent with concentrate grades of 29-32 percent copper for both enriched and primary sulfide materials. Pressure oxidative leach tests achieved 98% recovery of copper from the supergene concentrate and 99% recovery from the primary concentrate. Cyanide leaching of the supergene pressure oxidative leach residue yielded 65% recovery of gold and leaching of the primary pressure oxidative leach residue yielded 81% recovery of gold.

Gold and silver are present in low, but recoverable concentrations in the concentrate. Gold is recoverable in the concentrate leach process, but recovery of silver has not been tested. Molybdenum is present in low concentrations and is not expected to generate a by-product credit. No other metals have been identified that would yield by-product credits.

1.10 Mining, Processing, and Recovery Methods The Los Azules deposit is amenable to conventional, large-scale, open pit mining methods. Floating cone evaluations were conducted to determine potential pit limits and the mining phase (pushback) development sequence. Five mining phases were designed and used to estimate contained mineral resources, from which a mine production schedule was developed. This schedule was based on the concentrator processing a total of 120,000 t/d. Heap leach feed was also estimated from oxide and lower grade secondary sulfide materials as they were encountered in the production schedule.

Preproduction stripping is estimated at 169 Mt during a 2.25-year development period. Including a concentrator ramp-up in Year 1, total material mined each year would be just over 111 Mt through Year 6 (i.e., in excess of 300,000 t/d). The stripping ratio during this period would average approximately 1.29 (tonnes of waste and stockpiled material per tonne of mill and heap leach feed). The life-of-mine stripping ratio is estimated at 0.76. Sulfide milling operations are projected to last nearly 35 years.

The cutoffs used for the production schedule are approximately 0.07% Cu for heap leach feed and 0.12% Cu for concentrator feed at a Cu price of $2.25/lb. Mineral resources estimated at a 0.15% Cu cutoff (the nearest estimate) are: 627 Mt of indicated mineral resources grading 0.49% Cu and 4,141 Mt of inferred mineral resources grading 0.32% Cu. In the production schedule, concentrator plus heap leach feeds total 1,703 Mt grading 0.40% Cu. The production schedule is based on approximately 35% of the resource estimated at roughly comparable cutoffs. No mineral resources have been classified as measured.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves. There is no certainty that the results, projections or estimates in this PEA will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.

The processing facilities would consist of two circuits, a concentrator and a heap leach, and a solvent extraction electrowinning (SX-EW) facility. The concentrator would employ two comminution circuits each consisting of a primary crusher, stockpile feed conveyor, reclaim conveyor, one ball mill and two SAG mills. The comminution circuits would be followed by flotation, thickening and filtration circuits, a tailings storage facility (TSF), and concentrate storage. The concentrate would be processed in a pressure oxidative (POX)

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leach and electrowinning circuit to produce an average of 456 mtpd of copper cathode. The leach residue would be treated to produce an average of 88 troy ounces of gold per day.

The heap leach and SX-EW facilities would leach run-of-mine (ROM) material. The heap leach would consume excess acid generated in the POX leach of the concentrate, followed by solvent extraction and electrowinning (SX/EW) to produce an average of 20 mtpd of copper cathode.

1.11 Local Resources and Infrastructure The nearest settlement is the town of Calingasta, which is located approximately 80 kilometers east of the Project. The road from Calingasta to the Project is 120 kilometers over mostly unimproved dirt roads. Calingasta is a historic mining town that was based on exploitation of alum (aluminum sulfate) deposits. The principal current economic activity of the area is agriculture with fruit trees (apple and walnut) forming 36 percent of the activity.

According to the 2010 census the population of the department of Calingasta is 8,453 inhabitants and the town of Calingasta has 2,700 inhabitants.

Surface water is available on the property in adequate amounts for McEwen Mining’s exploration activities. Preliminary hydrological evaluations have indicated sufficient sources of water exist to operate the Los Azules mining and processing facilities and to provide the necessary fresh water needed to house employees at the mine site.

A 300 kilometer, 500 kV power transmission line would supply power to the Project. The transmission line would originate in Gran Mendoza (Mendoza, Argentina) at a newly constructed substation and terminate at the Project site where it would be split into two 500 kV feeders, one supplying power to the northern facilities and the other to the southern facilities.

1.12 Environmental and Permitting Environmental baseline studies commenced in 2007 and include the main exploration target area, the man camp area and the access road. At the present time, there are no significant environmental or reclamation issues at the Project site, as it is an exploration project. Concurrent reclamation activities consist of re- grading the drill pad sites and a limited number of access roads that are no longer used for exploration.

The main permit for the exploration phase at Los Azules is the Environmental Impact Declaration (Declaracion de Impacto Ambiental or DIA in Spanish), which must be renewed every two years with the provincial mining authority. The current permit expires in November 2014. A new Environmental Impact Assessment (EIA) will be filed with the provincial authorities of San Juan in mid-2014, after the completion of the 2013/14 exploration season, and the permit renewal is expected to be approved prior to the expiration of the current permit.

1.13 Project Economics The total life of mine (LOM) operating cost is estimated at $14.9 billion, or $8.74 per tonne of mineralized material processed, as summarized in Table 1.3 below. Figure 1.4 shows the value of each operating cost component.

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Table 1.3 Life of Mine Operating Cost Summary Description LOM Cost ($000s) LOM Cost/tonne Processed Material ($) Mining 6,471,413 3.80 Processing 6,942,990 4.08 General & Administrative 1,358,933 0.80 Mine Reclamation / Closure 110,231 0.06 LOM Operating Cost 14,883,567 8.74

Mine G&A, $0.80, 9% Reclamation/Closure, $0.06, 1%

Mining, $3.80, 43%

Processing, $4.08, 47%

Figure 1.4: LOM Operating Costs per Tonne Processed Material (Samuel Engineering 2013) The capital costs are estimated at $3.92 billion during preproduction, $65.9 million for working capital, and $1.47 billion for sustaining capital for a total capital cost of $5.46 billion over the LOM. The accuracy target for this capital cost estimate is intended to be plus or minus 35 percent. Major equipment items were quoted and in house historical data was used for the remaining items. The estimate is expressed in Q2 2013 US dollars.

The economic analysis includes deductions for the three percent royalty tax that San Juan Province charges and the five percent export retention charged by Argentina.

The Project after-tax pro forma base case cash flow, assuming a long-term copper price of $3.00 per pound of copper indicates a 14.4 percent internal rate of return (IRR) and a $1.69 billion net present value (NPV) at an eight percent discount rate. The pro forma cash flow used the following convention methodology:

 Unleveraged 100 percent equity basis (no project financing or debt);  Stand-alone project basis;

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 After-tax determination of project economics;  Annual cash flows discounted on end of year basis; and  Costs in Q2 2013 U.S. Dollars (US$).

The preproduction period is estimated at four years. The Project has an expected pre-tax payback period of 3.8 years, after start of commercial production.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves. There is no certainty that the results, projections or estimates in this PEA will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.

1.14 Qualified Persons Recommendations and Conclusions Based on the results of this Preliminary Assessment, the authors recommend that McEwen Mining complete tasks to further de-risk the Project. A list of these tasks and, summary of the interpretations, conclusions and recommendations to advance the Project are provided in Sections 25 and 26.

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2.0 Introduction

2.1 Purpose of the Technical Report This Technical Report is written to provide information related to the increased mineral resources since the previous report, Canadian National Instrument 43-101 Technical Report Los Azules Porphyry Copper Project, San Juan Province, Argentina effective August 1, 2012. This document describes a new resource estimate, property position, drilling program, metallurgical testwork, capital and operating costs, potential project economics and certain other developments that have occurred since the previous report. This Technical Report was prepared for McEwen Mining.

2.2 Sources of Information For a list of the sources of information and data contained in this technical report or used in its preparation please refer to Table 2.1 and Item 27.0.

Table 2.1 List of Contributing Authors Item No. Section Name Company Responsible Party Title Page SE Richard Kunter, FAusIMM, CP, QP Table of Contents SE Richard Kunter, FAusIMM, CP, QP 1 Summary All All 2 Introduction SE Richard Kunter, FAusIMM, CP, QP 3 Reliance on Other Experts SE Richard Kunter, FAusIMM, CP, QP 4 Property Description & Location MM Jim Duff, PGeo Jim Duff, PGeo Accessibility, Climate, Local Resources, MM/Ausenco/ 5 Scott Elfen, PE Infrastructure and Physiography SE Richard Kunter, FAusIMM, CP, QP 6 History MM Jim Duff, PGeo 7 Geological Setting and Mineralization MM Jim Duff, PGeo 8 Deposit Types MM Jim Duff, PGeo 9 Exploration MM Jim Duff, PGeo Robert Sim, P.Geo 10 Drilling SIM/MM Jim Duff, PGeo 11 Sample Preparation, Analyses, and Security BDRC Bruce Davis, PhD, FAusIMM Robert Sim, P.Geo 12 Data Verification SIM/BDRC Bruce Davis, PhD, FAusIMM 13 Mineral Processing and Metallurgical Testing SE Richard Kunter, FAusIMM, CP, QP Robert Sim, P.Geo 14 Mineral Resource Estimate SIM/BDRC Bruce Davis, PhD, FAusIMM 15 Mineral Reserve Estimate WLR William Rose, PE William Rose, PE 16 Mining Methods WLR/Ausenco Scott Elfen, PE Richard Kunter, FAusIMM, CP, QP 17 Recovery Methods SE/ Ausenco Scott Elfen, PE Richard Kunter, FAusIMM, CP, QP 18 Project Infrastructure SE/ Ausenco Scott Elfen, PE

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Table 2.1 List of Contributing Authors Item No. Section Name Company Responsible Party 19 Market Studies and Contracts SE Steven Pozder, MBA, PE Environmental Studies, Permitting and Social Jim Duff, PGeo 20 MM/Ausenco or Community Impact Scott Elfen, PE Steven Pozder, MBA, PE SE/WLR/ Richard Kunter, FAusIMM, CP, QP 21 Capital and Operating Costs Ausenco William Rose, PE Scott Elfen, PE 22 Economic Analysis SE Steven Pozder, MBA, PE 23 Adjacent Properties SE Richard Kunter, FAusIMM, CP, QP 24 Other Relevant Data and Information MM Jim Duff, PGeo 25 Interpretation and Conclusions All All 26 Recommendations All All 27 Date and Signature Pages All All 28 References All All Abbreviations: ALL – All QP Contributors; BDRC – BD Resource Consulting; SE – Samuel Engineering, Inc.; SIM – SIM Geological, Inc.; Ausenco – Ausenco; WLR – WLR Consulting, Inc.; MM – McEwen Mining Consultant

2.3 Personal Inspection of the Los Azules Property Robert Sim, P.Geo, of SIM Geological, Inc. visited the Project site from March 30 to April 1, 2008 and March 21 to 23, 2010 to observe first-hand the Project site, observe drilling/sampling/logging practices, and to examine available drill core. In addition, available reports, cross sections, geologic interpretations and other relevant geologic data were reviewed and discussed with Minera Andes geology personnel.

Bruce Davis, PhD, FAusIMM, of BD Resource Consulting, visited the Project site from January 23 to January 25, 2012. While at site, Dr. Davis presented a one-day seminar to the Project staff on QA/QC.

William Rose, P.E., of WLR Consulting, Inc., visited the Project site on March 21-23, 2010 to assess general site conditions, including surface topography, climate, local geology, surface water, and available infrastructure, for a preliminary economic assessment of the Project. Inspections of some selected drill core, geologic maps and cross sections, and the potential pit, waste rock storage, tailings storage and processing plant areas also occurred during the site visit.

Jim Duff, P.Geo, former COO of Minera Andes and a part-time consultant to McEwen Mining, visited the site once in 2009, three times in each of 2010, 2011 and 2012, and most recently March 2013. Mr. Duff was COO of Minera Andes from March 2009 through January 2012, during which time he was responsible for exploration and engineering activities at Los Azules.

Scott Elfen, PE, of Ausenco, visited the Project site on February 21, 2008 to review the siting of facilities relative to hydrology, hydraulics and geotechnical factors.

The authors consider the foregoing personal inspections to constitute a “current personal inspection” in accordance with NI 43-101.

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3.0 Reliance on Other Experts

The technical report authors have relied on the following in the preparation of this technical report:

 Opinion of Vargas Galindez Abogados (legal counsel to McEwen Mining) with respect to, among other things, the verification and legal status of mining properties pertaining to the Los Azules Project, addressed to McEwen Mining and dated April 17, 2013. The authors rely on this report with respect to any discussion contained herein dealing with the tenure and legal status of the Project, including without limitation section 4.3, and 4.4.

 Information provided by McEwen Mining, including Section 4.5, and the review conducted by its legal counsel, Zaballa Carchio Abogados, with respect to the information pertaining to Argentina law contained in sections 4.2, 4.4, 4.7-4.10 and 5.2.

A draft copy of the Report has been reviewed for factual errors by McEwen Mining. Any statements and opinions expressed in this document are given in good faith and in the belief that such statements and opinions are not false and misleading at the date of this Report.

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4.0 Property Description and Location

4.1 Location The Project is located in the Frontal Cordillera of Argentina near 31° 06' 25" south latitude and 70° 13' 25" west longitude in the western portion of San Juan Province, Calingasta Department, Argentina adjacent to the Chilean border as shown in Figure 4.1. Elevation ranges from 3,500 to 4,500 masl with moderate to high relief.

Figure 4.1: Project Location (Minera Andes 2009)

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The Project covers an area of approximately 32,700 hectares.

Aerial photography and global positioning were utilized to locate the property in the field; the coordinates of the corners of the property are established in the government documents granting the mining rights.

4.2 Property and Title in Argentina The laws, procedures and terminology regarding mineral title in Argentina differ considerably from those in the United States and in Canada. Mineral rights in Argentina are separate from surface ownership and are owned and administered by the provincial governments. The following summarizes some of the relevant provisions of the Argentine Mining Code and Argentinean mining law terminology in order to aid in understanding the McEwen Mining land holdings in Argentina.

The provinces are the owners of the natural resources located within their territories, and each province retains the power to administer and regulate mineral rights according to the federal Mining Code and supplemental provincial laws and regulations.

Surface rights are separate from mineral rights and they are treated separately under Argentine law. The Mining Code establishes that mining is in the public interest, and therefore surface owners cannot prevent the granting of mining rights and properties or commencement and/or continuity of mining activities on their property, but surface owners have a right to collect an indemnity as a consequence of the use of the land by the miner and the damages derived from mining activities. Land over which a mining concession has been granted is legally subject to different types of easements (e.g. right of way, occupation of land, use of water, etc.) provided that indemnity is paid to the owner of such land.

Mineral rights are considered forms of real property and can be sold, leased or assigned to third parties on a commercial basis. Cateos and minas can be forfeited if minimum work requirements are not performed or if annual payments are not made. Generally, notice and an opportunity to cure defaults are provided to the owner of such rights.

Grants of mining rights, including water rights, are subject to the rights of prior users. Further, the mining code contains environmental and safety provisions administered by the provinces. Prior to conducting operations, applicants must submit an environmental impact report (Declaracion de Impacto Ambiental or DIA in Spanish) to the provincial government describing the proposed operation and the methods to be used to prevent undue environmental damage. The DIA must be updated every two years, with a report on the results of the protection measures taken. If protection measures are deemed inadequate, additional environmental protection may be required. Mine operators are liable for environmental damage. Violators of environmental standards may be caused to shut down mining operations without prejudice to mining title.

4.2.1 Cateo A cateo is an exploration permit that does not allow commercial mining but gives the owner a preferential right to obtain a mining concession for the same area. Cateos are measured in 500 hectare unit areas. A cateo cannot exceed 20 units (10,000 hectares). No person may hold more than 400 units (200,000 has) in a single province. The term of a cateo is based on its area: 150 days for the first unit (500 hectares)

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and an additional 50 days for each unit thereafter. After a period of 300 days, 50 percent of the area over four units (2,000 hectares) must be dropped. At 700 days, 50 percent of the area remaining must be dropped. At each stage the land can be converted to one or more “Manifestaciones de Descubrimiento” (MD). Time extensions may be granted to allow for bad weather and difficult or seasonally restricted access. Cateos are identified by a file number or "expediente" number and are awarded by the following process:

1) Application for a cateo covering a designated area. The application describes a minimum work program for exploration; 2) Registration by the province and formal placement on the official map or Geographic Register; 3) Publication in the provincial official bulletin and notification to the surface owner; 4) A period following publication for third parties to oppose the claim; 5) Award of the cateo.

The length of this process varies depending on the province, and commonly takes up to two years. Accordingly, cateo status is divided into those that are in the application process and those that have been awarded. If two companies apply for cateos on the same land, the first to apply has the superior right unless the area was released from a prior owner, at which point the interested parties go into a blind draw period. During the application period, the first applicant has rights to any mineral discoveries made by third parties in the cateo without its prior consent.

Applicants for cateos may be allowed to explore on the land pending formal award of the cateo, with the approval of the surface owner of the land. The time period after which the owner of a cateo must reduce the quantity of land held does not begin to run until 30 days after a cateo is formally awarded.

A fee (or cannon in Spanish) of ARS$400 per unit must be paid upon application for the cateo. This is paid only once. In addition, the 2012 tax act for the province of San Juan requires that a fee of ARS$100 be paid upon application for a cateo, plus ARS$108 for the first 500 hectare unit area requested plus ARS$45 for the second and subsequent 500 hectare unit areas requested. This fee is only paid one time.

4.2.2 Mina To convert an exploration permit (cateo) to a mining concession (mina), some or all of the area of a cateo must be declared as MD (Manfestacíon de Descubrimiento) and then converted to a mina. Minas are mining concessions which permit mining on a commercial basis. The area of a mina is measured in pertenencias. Each mina may consist of one or more pertenencias. Conventional pertenencias are six hectares and pertenencias for disseminated deposits are 100 hectares. Once granted, minas have an indefinite term assuming exploration development or mining is in progress and investment conditions according to the Mining Code are met. An annual canon fee of ARS$800 per pertenencia is payable to the province.

Minas are obtained by the following process:

 Declaration of a MD, in which a point within a cateo is identified as a discovery point. The MD is used as a basis for location of pertenencias of the sizes described above. MDs do not have a definite area until pertenencias are proposed. Within a period following designation of a MD,

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the claimant may do further exploration, if necessary, to determine the size and shape of the mineralized material.  Survey (mensura) of the mina. Following a publication and opposition period and approval by the province, a formal survey of the pertenencias (together forming the mina) is completed before the granting of a mina. The status of a surveyed mina provides the highest degree of mineral land tenure and rights in Argentina.

4.2.3 Provincial Reserve Areas Provinces are allowed to withdraw areas from the normal cateo/mina process. These lands may be held directly by the province or assigned to provincial companies for study or exploration and development.

4.3 Ownership of the Los Azules Project The Project is comprised of properties (the “Properties”) owned by Andes Corporación Minera S.A. (Andes Corp.), an Argentine subsidiary of McEwen Mining.

In 1994, Minera Andes S.A. (MASA), an Argentine subsidiary of Minera Andes, was granted the Cordon de Los Azules Cateo 545.957-D-94. This cateo was divided and converted into two MDs on October 17, 1998, known as Azul 1 and Azul 2. These MDs cover part of the southern portion of the Project. In 2009 MASA transferred these two MDs to Andes Corp. The central portion of the Project is covered by MD Mirta and the northern portion by Escorpio II, all owned by Andes Corp.

McEwen Mining, through one or more subsidiaries has made application to acquire or has acquired cateos and MDs in respect of the area surrounding the Project area. A list of those land holdings is detailed in Table 4.1and shown on Figure 4.2. The size of the property covered by those tenements, once actually granted, however, may differ from that set out in Table 4.1.

Table 4.1 Minera Andes S.A. Mineral Claim Status Name File Number Hectares (ha) Claim Type Principal Mineral Holdings Azul 1 520-0279-M98 2,098 MD Azul 2 520-0280-M98 1,320 MD Mirta 1124.0141-M-09 354 MD Escorpio II 0154-C-96 1,991 MD Peripheral Mineral Holdings Azul 3 1124.121-A-06 167 MD Azul Este 1124.186-A-07 2,373 MD Azul Norte 1124.668-M-07 132 MD Azul 4 1124.473-M-08 903 MD Escorpio I 0153-C-96 169 MD Escorpio III 0155-C-96 199 MD Escorpio IV 425.213-C-03 4,412 MD Totora 414.1324-C-05 505 MD Totora II 520.496-C-99 1,561 MD Mercedes 0644-M-96 842 MD

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Table 4.1 Minera Andes S.A. Mineral Claim Status Name File Number Hectares (ha) Claim Type Sofia 1124.157-A-07 3,325 MD Azul 5 1124.119-A-09 3,001 MD Marcela 1124.495-A-09 2,953 MD Agostina 1124.108-A-10 1,184 MD Rosario 1124.169-A-10 1,768 MD Gina 1124.168-A-10 1,763 MD Cecilia 1124.035-A-12 1,702 MD

The extent of the inferred resource is indicated by the red outline in Figure 4.2.

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Figure 4.2: Map of Mineral Claims and Surface Ownership (McEwen 2013) During January 2012, the acquisition of Minera Andes Inc. by US Gold Corporation was completed. The combined business was renamed McEwen Mining Inc. All of Andes Corp.’s mining rights in the Province of San Juan are in good standing and have been duly registered or are being duly registered.

4.3.1 Los Azules Surface Rights In January 2010, Andes Corp. purchased 18,000 hectares of surface rights in the Los Azules area. The purchase of this property, located near the Argentina/Chile border region, was subject to governmental approval. Such approval was granted on August 31, 2010, by Resolution #907 of the Ministerio del Interior. Figure 4.2 shows the purchased surface rights. The surface rights currently held by Andes Corp cover the area currently being explored by McEwen Mining. The area represented by the surface rights

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are also considered to be more than adequate for potential development of the mine, associated processing facilities, and infrastructure considered in this technical report.

4.4 Royalties and Retentions There are no outstanding royalties, payments, or other agreements or encumbrances to which the property is subject other than a three percent royalty to the province, a five percent export tax on copper cathodes and gold doré charged by Argentina, and a one-time $500,000 payment to be made to Hugo Bosque upon delivery of a feasibility study. San Juan Province is one of the seven provinces in Argentina that charges royalties. The three percent royalty is based on “mine mouth value.” By definition, the three percent is charged on the value of the sale of the metal minus all costs associated with the extraction of the metals except for mining costs. In addition, the province has established an unlegislated practice of negotiating a voluntary contribution to a trust fund (“fideicomiso” in Spanish) with mining operations that primarily produce gold, as long as the price of gold remains above US$1,000 per ounce. These contributions are intended to be used to finance infrastructure projects in the province, especially in the local area impacted by the mining operation. The amount of voluntary contributions negotiated with other mines to date is 1.5 percent of gross sales for Barrick’s Veladero mine, Yamana’s Gualcamayo mine, and Troy Resources’ Casposo mine.

4.5 Back-in Rights Certain portions of the northern part of the Project that were formerly held by Xstrata and transferred to Minera Andes following the termination of the Option Agreement were subject to an underlying option agreement between Xstrata and a subsidiary of TNR Gold Corp. This agreement was the subject of litigation in the Supreme Court of British Columbia, Canada. Pursuant to terms of a settlement agreement, TNR retains a Back-in Right for up to 25% of the equity in the Solitario Properties. The Back-in Right is only exercisable after the completion of a feasibility study. To exercise, TNR must pay two times the expenses attributable to the back-in percentage (i.e. paying 2 × 25% of all the costs attributable to the Solitario Properties). Upon backing-in, TNR may elect to continue to participate in the Project or, upon being diluted down to 5% or less equity interest, have their interest converted to a 0.6% NSR on Solitario Properties.

The Solitario Properties subject to this back-in right are as follows: Escorpio I, Escorpio II, Escorpio III, Escorpio IV, Totora and Totora II.

4.6 Environmental Liabilities At the present time, there are no known environmental liabilities at the Project site, as it is an exploration project. Reclamation activities are comprised of re-grading the drill pad sites, access roads at site and some portions of the main access road to the Project site.

There are two principal activities that have environmental impacts in the Project area. One is the over- grazing of pasture lands and the second is access roads and drill platforms on the property.

Seasonal grazing by “veranadas” from Chile takes place on sparse foraging resources and wetlands in the Project area. The “veranadas” with large animal herds (primarily goats) have affected:

 Vegetation coverage on the grazing land;

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 Erosion of the borders of streams; and  The drainage capacity due to compaction.

There are numerous previously existing excavation areas for exploration roads in the Project and surrounding areas, including drilling platforms.

4.7 Permitting Requirements Argentine laws and regulations differentiate between prospecting, exploration and exploitation activities. It is understood that exploration activities include mapping, sampling (including bulk samples), geophysics, trenching and drilling, whereas prospecting activities include only mapping and sampling.

There are different sectorial permits that are required to conduct mining activities, but the most relevant ones are the ones associated with environmental permits. The provisions related to environmental protection applicable to the mining activity were established in 1995 by the General Environmental Law and have been incorporated in Title Thirteen of the Mining Code.

The federal government is empowered to issue minimum environmental protection standard laws (MEPSL), applicable in the whole country by the respective local authorities. The provinces are allowed to supplement and regulate the MEPSL with more stringent local or provincial environmental regulations.

4.7.1 Exploration and Prospecting Requirements The main permit for the exploration phase at Los Azules is the Environmental Impact Declaration (Declaracion de Impacto Ambiental or DIA in Spanish), which must be updated at least every two years with the provincial mining authority. An EIA must be presented for each phase of the project development: prospecting, exploration, exploitation (including industrialization, storage, transportation and marketing of minerals). The current permit for Los Azules will need to be updated prior to November 2014. A new Environmental Impact Assessment (EIA) will be filed with the provincial authorities of San Juan in mid-2014, after the 2013/14 exploration season.

Ancillary permits for water usage (domestic, drilling and dust mitigation), archeological research and investigation, hazardous waste, sewage and domestic waste facilities are renewed on an annual basis before the commencement of the exploration season. The permit renewals are expected to be approved on time as per prior exploration seasons.

4.8 Permitting Regulations There are five main legal requirements that impact the Project during the different stages of development: environmental regulation, mining regulation, hazardous waste regulation, health and safety regulation, and the Mining Investment Law.

4.8.1 Environmental Regulation Environmental regulations applicable to Mining have basically four sources: (i) The environmental specific regulations applicable to mining arising from the Mining Code; (ii) environmental laws issued by Federal Congress as MEPSL applicable to all activities including mining, (iii) local environmental regulations issued

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by the provinces the MEPSL and applicable to all activities including mining; (iv) additional local/provincial environmental legislation as long as this does not contradict or is less stringent than a MEPSL.

Lack of compliance or other infringement of the environmental obligation may result in penalties ranging from fines to suspension of works or closure of the mine, but without effect upon title or ownership of the mining concession.

4.8.2 Mine Regulation The acquisition, exploitation and use of minerals are regulated by the Mining Code (National Law 1919) and Provincial Law 7199. In addition, the province of San Juan has enacted National Law 24585, environmental protection for mining activities.

4.8.3 Hazardous Waste Regulation Other regulations affecting the Project are related to Hazardous Waste regulations set forth in National Law 24051, adopted by the province of San Juan. This law regulates the generation, handling, transportation, treatment and disposal of hazardous waste materials.

4.8.4 Health and Safety Regulation Health and safety regulations require that a mining company must hire an Occupational Hazard Insurer (ART, as per the acronym in Spanish) in order to identify and evaluate occupational hazards and to design preventive and emergency programs. For the mining sector, companies must give priority to riskier occupational activities and employee training.

4.8.5 Mining Investment Law Mining Investment Law 240196 includes article 23, which relates to the preservation of the environment. In order to prevent and correct any impacts to the environment due to mining activities, companies may establish a special provision for that purpose. The annual amount shall be left to the criterion of the company, but shall be considered deductible for income tax purposes up to a sum equivalent to five percent of the operational costs of material extraction.

4.9 Glacier Protection Legislation In July 2010 the Province of San Juan enacted provincial law 8144, “Glacier Protection Law”, which, among other things, restricts disturbance of glaciers by mining activities. In addition, the federal Congress issued a MESPL on the protection of glaciers and periglacial environment (Law 26639), which is different from the provincial law. San Juan province is currently challenging the constitutionality of Law 26639 with the National Supreme Court alleging that such Law was enacted in violation provincial powers not delegated to the Federal Government.

No “uncovered” or “white glaciers” (classic ice glaciers) have been identified near the Los Azules exploration area, although several small rock glaciers have been mapped on McEwen Mining’s mining properties (Meglioli 2012). None of these rock glaciers are likely to be impacted by exploration activities nor will the potential development of the currently envisioned mining project. McEwen Mining has stated that it believes the Project is in full compliance with the provisions of Law 8144.

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The provincial government implemented a glacier audit program in mid-2011 to determine compliance with all current glacier protection regulations. The Los Azules exploration area was audited by a multi- agency environmental audit team in March 2013. There were no adverse findings and the audit results indicated that McEwen Mining is in full compliance in all areas protected by the provincial law.

4.10 Environmental Baseline Studies Since 2007 Ausenco Vector has been collecting environmental baseline monitoring data on surface and underground water volumes and quality, soils, flora and fauna, archeology and weather. Ausenco Vector has also been studying the boggy wetlands which are locally referred to as “vegas”. Vegas are not protected, but Ausenco Vector has been developing a plan to relocate or compensate for vegas where they may be impacted by the development of the Project. Dr. Andres Meglioli, currently of Mountain Pass LLC, has been monitoring cryogenic landforms in the Project area since 2011.

During the last field season, collection of environmental baseline data on surface and underground water volumes and quality was conducted by the Instituto de Investigaciones Hidráulicas, a research center at the University of San Juan. In addition, there was a collection of data related to flora and fauna plus additional studies on the vegas which was performed by senior biologists Juan C. Acosta, Héctor J. Villavicencio and Juan A. Scaglia.

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5.0 Accessibility, Climate, Local Resources, Infrastructure, and Physiography

5.1 Accessibility The Los Azules porphyry copper deposit is approximately six kilometers to the east of the border between Chile and Argentina. The Project is west and slightly north of Calingasta, accessed by 120 kilometers of unimproved dirt road with eight river crossings and two mountain passes, which are both above 4,100 masl. Calingasta is located west of the city of San Juan along Route 12. The last 95 kilometers of the 120 kilometer dirt road to the Project was constructed by Battle Mountain Gold, prior to which access was by mules. The current driving time from Calingasta to the Project site is approximately five hours.

5.2 Surface Rights According to Argentine law, mineral rights supersede the overlying surface rights, and the holder of the latter is legally unable to impede access to the exploration or extraction of underlying mineralization. Fair compensation is provided to the surface rights holder for access and usage of the land in conjunction with exploration activities and mining operations. In January 2010 Minera Andes purchased 18,000 hectares of surface rights covering the Los Azules deposit and the associated surface facilities, as they are currently envisioned.

5.3 Climate and Length of Operating Season Typically the field season at Los Azules starts in December and runs through the end of April. However, in some years drilling has continued through mid-May, and depending upon the winter snow pack conditions, it is possible to access the site by October.

A weather station was installed near the camp site in mid-2010 in order to obtain local climatic information. The station is powered by a solar panel and collects meteorological parameters at 30 minute intervals. The station was manufactured by Coastal Environmental and is built around the ZENO® 3200 datalogger. Data communication is via an iridium satellite modem. Data is downloaded using a companion base station located in the United States. The weather station uses a stand-alone tower with sensors to obtain the following parameters:

 Wind direction (degrees);  Wind speed (m/s);  Wind gust (m/s);  Standard deviation of wind direction (degrees);  Air temperature (°C);  Relative humidity (%);  Barometric pressure (mPa);  SW solar radiation (W/m2);  Rain intensity (mm/minute);  Accumulative precipitation (mm) in precipitation bucket;  Contents of precipitation bucket (mm3); and

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 Snow depth (mm) (installed Q2 2013).

Considering the types of recorded parameters, the Los Azules meteorological station meets the WMO (World Meteorological Organization) standards for a Principal Climatological Station.

Figures 5.1, 5.2 and 5.3, which were obtained from the site meteorological station, present monthly weather data for temperature, total precipitation and wind speed. Snowfall accumulations are recorded by the station as snow water equivalent. Snowfall in the Project area is relatively light, although heavy winter accumulations are common on the two high passes on the access road.

Figure 5.1: Monthly Temperature Data (McEwen 2013)

Figure 5.2: Monthly Total Precipitation Data (McEwen 2013)

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Figure 5.3: Monthly Wind Speed Data (McEwen 2013)

5.4 Local Resources and Infrastructure The Project area is remote and no infrastructure is present in the Project area. There are no nearby towns and/or settlements. The exploration operations are carried out by means of a man camp near the Project area.

5.4.1 Available Personnel Historically, Villa Calingasta was a mining town whose economy was supported by the exploitation of alum deposits, which is used in water purification. The United Nations Development Program (UNDP) and other national and international agencies have established programs to help remediate certain environmental liabilities associated with this activity.

The current principal economic activity of the area is agriculture with fruit trees (apple and walnut) forming the principal activity in addition to employment in the public sector. Lesser activities include the following:

 Timber and vegetables;  Wood manufacturing activities;  Cider manufacturing;  Tourism (hotels, restaurants);  Commercial activities (shops); and  Public service (health, safety, education).

According to the INDEC 2010 census, the population of the Calingasta Department (county) was 8,453 people.

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5.4.2 Power Hugo Gil Figueroa & Asociados (Hugo Gil) of Buenos Aires completed a scoping level power supply study in July 2012 and an update to this study was prepared in July 2013 using revised estimated electrical loads and schedule need dates. The updated study addresses confirmation and updating of the below listed items, which are discussed further in Item 18 of this document:

 Power supply source;  Tap point on the existing transmission line;  Voltage of the new transmission line that will supply power to the Project;  Routing and length of the new transmission line;  Estimated capital cost to complete the new transmission line; and  Estimated energy supply and transmission cost per-kilowatt-hour (kWh).

The current Project site average power demand is estimated to be 240 MW, largely due to major process equipment such as the electrowinning circuit, grinding circuit and oxygen plant. A 300 kilometer, 500 kV transmission line from Gran Mendoza to the Los Azules site has been identified as the most cost effective, technically satisfactory source of power for Los Azules.

5.4.3 Water Surface water is available on the property in adequate amounts for McEwen Mining’s exploration activities. Preliminary hydrological evaluations have indicated sufficient sources of water to operate the Los Azules mining and processing facilities and to provide the necessary fresh water needed to house employees at the mine site.

5.5 Topography, Elevation and Vegetation The Project is centered on La Ballena ridge (English translation: the whale), a low NNW-SSE trending ridge. The Project area is rugged and ranges in elevation from 3,500 to nearly 4,500 masl. Vegetation is sparse and is virtually absent at higher elevations.

Long, narrow marshes (“vegas” in Spanish) occupy the valley floors on either side of La Ballena. These marshes are fed by snowmelt, but apparently reflect the groundwater regime as well, with standing water levels at approximately 3,600 meters in elevation. Springs are noted at approximately 3,790 meters in elevation upstream of the marsh along the west side of La Ballena. Groundwater-fed springs and marshes are also noted around the range to the west of La Ballena between 3,800 and 3,900 meters in elevation and along the eastern flank of the Cordillera de la Totora. These marshes feed the westerly flowing Rio La Embarrada, which joins the Rio Frio to the west before turning south into the Rio de las Salinas, a main tributary to the San Juan River.

Deposits of glacial debris (morainal materials) and scree account for much of the surface area covering the deposit and adjacent mountainsides. In the area of the deposit, these materials locally exceed 60 meters in thickness, but on La Ballena, the cover is typically 10 meters or less. There are no covered or uncovered “white glaciers” (classic ice glaciers) in the Project area, although there are several small rock glaciers near the Project area that are not expected to be impacted by McEwen Mining’s exploration or development activities.

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5.6 Availability of Area for Tailings Storage, Waste Storage, and Processing Facilities The area around Los Azules provides multiple options for siting the tailings storage facility (TSF), waste rock storage facility (WRSF), processing facilities and other infrastructure needed. Because the resource continues to expand, the full magnitude of the Project and the location of the surface facilities are yet to be finalized. Figure 5.4 is a general layout of the current locations for the facilities shown with the property boundary in red.

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Figure 5.4: Facility Location Map with Property Boundary (Samuel Engineering 2013)

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6.0 History

6.1 Property History In 1994, Minera Andes, through its subsidiary Minera Andes S.A. (MASA), acquired lands in the southern portion of the Los Azules area. Battle Mountain Gold Company (BMG), acquired lands immediately to the north through an option from Solitario Argentina S.A. (SASA). For the next couple of years, both companies independently explored for gold on their respective land holdings.

In 1998, a new access road was constructed by BMG while it conducted airborne geophysical surveys, mapping, trenching and drilled several reverse circulation (RC) holes. A large hydrothermal alteration zone associated with dacite porphyry intrusions and stockwork structural zones was recognized in the Project area, and Minera Andes signed a Letter of Intent with BMG to form a joint venture to explore the combined land package.

In 1999, Minera Andes and BMG signed a definitive joint venture agreement. BMG subsequently drilled additional RC holes and porphyry copper mineralization was intersected close to the property boundary; however, no drilling was done on the Minera Andes properties.

In 2000, BMG merged with Newmont Mining Corporation (NMC). No further work was done by BMG/NMC and the joint venture was allowed to dissolve without BMG earning any interest in the Minera Andes or Solitario lands. At that time, capitalizing on a surveying error, Mr. Hugo Bosque, an attorney from San Juan, acquired a small strip of land between the Minera Andes and Solitario lands.

In 2003, MIM Argentina S.A. (MIM) optioned the Bosque and Solitario lands and began exploration work. Independently Minera Andes began exploration on its own lands at Los Azules.

In 2005, a Letter of Intent was drafted between Minera Andes and Xstrata Copper (successor to MIM) for earn-in rights on the combined land package. More exploration occurred over the next couple of years.

On November 2, 2007, Minera Andes Inc. entered into an Option Agreement with Xstrata whereby the exclusive right was granted to Minera Andes to explore and evaluate the area called “Los Azules” which included several properties owned by Xstrata as defined in the Option Agreement.

On May 15, 2009, the parties to the Option Agreement, together with Andes Corp. and Los Azules Mining, Inc. (LAMI), each wholly-owned subsidiaries of Minera Andes, signed an Assignment and Amending Agreement whereby Minera Andes properties “Azul 1” and “Azul 2” were transferred to Andes Corp. together with the right to acquire from Xstrata 100 percent interest in and to the Los Azules properties (as defined in the Option Agreement). In addition, Minera Andes S.A. assigned and transferred to LAMI all of MASA’s right, title, benefit and interest in, to and under the Option Agreement (as defined in the Assignment and Amending Agreement).

On May 29, 2009, Los Azules Mining Inc. exercised the option, by delivery of an Earn-in Notice (pursuant to the Option Agreement as amended by the Assignment and Amending Agreement) to acquire 100 percent interest in Los Azules properties (as defined in the Option Agreement). As a consequence, Xstrata subsequently transferred to Andes Corp. all of its properties located in the Los Azules area.

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On September 30, 2009, Xstrata elected not to exercise its option to acquire a 51-percent interest in the Project.

In January 2012, Minera Andes Inc. was acquired by US Gold Corporation, and the combined company was subsequently renamed McEwen Mining.

Certain portions of the northern part of the Project that were formerly held by Xstrata and transferred to Minera Andes following the termination of the Option Agreement were subject to an underlying option agreement between Xstrata and a subsidiary of TNR Gold Corp. This agreement was the subject of litigation in the Supreme Court of British Columbia, Canada. Pursuant to terms of a settlement agreement, TNR retains a Back-in Right for up to 25% of the equity in the Solitario Properties. The Back-in Right is only exercisable after the completion of a feasibility study. To exercise, TNR must pay two times the expenses attributable to the back-in percentage (i.e. paying 2 × 25% of all the costs attributable to the Solitario Properties). Upon backing-in, TNR may elect to continue to participate in the Project or, upon being diluted down to 5% or less equity interest, have their interest converted to a 0.6% NSR on Solitario Properties.

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7.0 Geological Setting and Mineralization

7.1 Regional Geology Los Azules is a porphyry copper deposit located in western San Juan Province in west-central Argentina. This region is characterized by a series of north-south elongated mountain ranges that rise in altitude from east to west to form the rugged Andean Cordillera that comprises the frontier between Argentina and Chile. Los Azules lies within the highest altitude Cordillera Principal as shown in Figure 7.1. This is composed of strongly folded, faulted and elevated Paleozoic-Mesozoic sedimentary and volcanic lithologies (Gondwanide orogeny) overlain by extensive Upper Miocene ignimbrites (Andean orogeny) as shown in Figure 7.2. The Eocene to early Miocene volcaniclastic strata in the region accumulated in an extensional basin followed by plutonic intrusion and contractional deformation from 19-16 Ma. These units were overlain and intruded by 16-7 Ma volcanic flows and pyroclastic units with comagmatic 12-8 Ma plutons and porphyry systems. This was followed by a compressional event at 8-5 Ma with important crustal shortening, thickening, and regional uplift (Sillitoe and Perello, 2005). Figure 7.2 also shows the relative locations of other major mining projects in the area.

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Figure 7.1: Physiographic Features of San Juan Province, Argentina (Rojas 2010)

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Figure 7.2: Regional Geology of the Andean Cordillera of Argentina and Chile (Rojas 2010)

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7.2 Property Geology Geology of Los Azules has been geologically mapped on at least four separate occasions (Rojas, 2007; Zurcher, 2009; Almandoz, 2010b; Pratt, 2010). The resulting geological maps and interpretations are in general agreement but differ in detail. Some of the differences were reconciled by Jemielita (2010).

7.2.1 Volcanic Country Rocks Country rocks at Los Azules comprise volcanic lithologies of supposed Triassic age (Choyoi group or equivalents) including rhyolite intrusions and crudely-bedded pyroclastics (flow-domes) ranging from fine- grained tuffs to coarse breccias (Rojas, 2010; Pratt, 2010) as shown in Figure 7.3. The legend for Figure 7.3 is provided in Figure 7.4.

7.2.2 Intrusive Rocks Triassic volcanic country rocks at Los Azules are intruded by a pre-mineral age, multi-phase, hypabyssal, quartz diorite pluton several kilometers in diameter. According to Zurcher (2008a) this pluton is cut by early (syn-mineral) quartz diorite porphyry dikes, each up to 30 meters wide, and narrower “crowded” diorite porphyry dikes along a north-northwest-striking zone up to one kilometer wide. These dikes are mapped as a single unit by Pratt and Bolsover (2010) as shown in Figure 7.3. Late- to post- mineral granodiorite (rhyolite) porphyry dikes and domes cut all of the above lithologies. Up to twelve intrusive units have been identified at Los Azules but only three are common as shown in Table 7.1.

Field work by Zurcher (2009) established the sequence of intrusion based on cross-cutting relationships, and the principal intrusive types are described in the following paragraph from oldest to youngest. Figure 7.3 shows the pre-mineral diorite porphyry (Dio) pluton (emerald green) intruded by north-northwest striking diorite porphyry (PF) dike (pink). Porphyry copper-style mineralization is centered on the diorite porphyry dike.

Quartz Diorite (Dio) forms a pluton several kilometers in diameter that hosts the porphyry system at Los Azules as shown in Figure 7.3. This lithology consists of fine- to medium-grained, equigranular, holocrystalline, hornblende-biotite-magnetite quartz diorite, tonalite and granodiorite. Medium-grained granodiorite has been identified in drill core from the southern and southwestern sectors of the area and a generally finer-grained quartz diorite or tonalite phase is widespread in the east, northeast and northern sectors of the deposit. This lithology is variably altered but often exhibits moderate to strong biotite alteration of primary mafic minerals. This lithology corresponds with the diorite (Dio) of Pratt (2010) as shown on Figure 7.3.

Porphyritic Quartz Diorite (Dipf, PD, PF) occurs as dikes that intrude the quartz diorite pluton along N50- 60°W- and N20-30°W-striking structures. These dikes are numerous in the deposit area, up to approximately 35 percent of the total rock volume, and appear to decrease in thickness from the south where they are over 30 meters wide to the north where they are commonly 5 to15 meters wide. This lithology comprises greater than 50 percent feldspar phenocrysts and scarce quartz eyes (1-3 percent) in a finer-grained, holocrystalline groundmass. Grain size reportedly increases with depth (Rojas, 2010). Myrmekitic-textured feldspar-quartz occurs at the contact with younger “crowded” porphyry dikes as explained below. This unit is strongly affected by all facies of alteration and appears to be spatially

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related to the bulk of the mineralization (Zurcher, 2008a). This lithology corresponds with porphyritic dacite/fine-grained granodiorite (PF) of Pratt (2010) as shown on Figure 7.3.

Figure 7.3: Geologic Map of Los Azules (Pratt and Bolsover 2010)

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Figure 7.4: Legend for Figure 7.3

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“Crowded” Quartz Diorite or Tonalite Porphyry (PF) dikes intrude the quartz diorite pluton and the porphyritic quartz diorite dikes along N20-30oW-striking and, less commonly, N50-60oW-striking structures (Zurcher, 2008a). These younger dikes are numerous but generally less than five meters thick and make up to approximately10 percent of the total rock volume. Texture is phaneritic-aphanitic with hornblende, biotite, and abundant, typically broken, feldspar phenocrysts and uncommon resorbed and cracked quartz eyes (1-5 percent). Phenocrysts are often grain-supported or set in an aplitic groundmass. This lithology is weakly- to strongly-overprinted by all facies of alteration and corresponds with the rhyolite porphyry. Pratt (2010) does not discriminate this lithology from porphyritic dacite/fine-grained granodiorite (PF).

Intrusive (magmatic) Breccias (BxMa) occur in the north sector of Ballena Ridge where they have a dike- like or tabular geometry, ranging up to a few meters thick, and appear to preferentially occupy N75oE- and N75oW-striking structures (Zurcher, 2008a). The breccias comprise quartz diorite, porphyritic quartz diorite and, less commonly, “crowded” porphyry clasts in a porphyry matrix and are variably mineralized. Timing of the breccias is poorly constrained but most may have been emplaced contemporaneously with “crowded” porphyry. Magmatic breccias are also reported by Rojas (2010) in drill core from the western part of the Los Azules system especially in holes AZ-0620, - 0621, -0632 and - 0633. Other breccias mapped at Los Azules include hydrothermal breccia of Rojas (2010; BxH) and Pratt (2010; HYBX).

“Open” Granodiorite or Dacite Porphyry (QP) occurs as dikes containing common quartz, feldspar, and lesser hornblende and biotite phenocrysts in a very fine-grained aphanitic groundmass that appears vitreous in places (Zurcher, 2008a). These dikes occur on the eastern and western flanks of the deposit area, and also in the northernmost sector, where they expand to form larger dome-like bodies. These rocks contain pyrite but are, otherwise, relatively less affected by alteration than the older intrusive units so are probably late mineral in age (Figure 7.3). This lithology likely corresponds with the weakly porphyritic rhyolite/aplite of Pratt (2010).

Major intrusive lithologies encountered at Los Azules are listed in Table 7.1 together with less common intrusive lithologies and cover (after Rojas, 2010).

Table 7.1 Key of Lithologies Lithology Key Observations Diorite Dio Dominant, country rock Porphyritic dioríte PD Dominant-frequent, mineralizing lithology Feldespathic Porphyry (Dacite) PF Less frequent, restricted to dikes Diorite Breccia Dbx Occasional Granodiorite Grd Occasional to frequent Quartz Porphyry QP Occasional Hydrothermal Breccia BxH Occasional, locally frequent Magmatic Breccia BxMA Occasional in contacts DP and PF Rhyolite Rhyo Occasional Andesite And Occasional Dacite Dacite Occasional Pegmatite Peg Occasional Gravels-cover Cover Frequent

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Figures 7.5, 7.6 and 7.7 show lithologic interpretations for representative E-W cross sections on coordinates 6,558,600N, 6,559,200N and 6,559,800N. Except for the Ballena ridge, the deposit is covered by a thick layer of overburden, and the geology shown on the sub-surface sections is highly interpretive.

Figure 7.5: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013)

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Figure 7.6: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013)

Figure 7.7: East-West Cross Section Showing the Diorite Porphyry Pluton Intruded by Younger Dikes (McEwen 2013)

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7.2.3 Structural Geology Triassic volcanic country rocks at Los Azules are deformed into an anticline/monocline with the steep limb in west and the flat limb in the east (Pratt, 2010). The anticlinal axis strikes approximately north and probably corresponds with a north-northwest-striking “structural corridor” that reportedly controlled the locations of volcanic-intrusive centers in the region during the Upper Miocene (Rojas, 2010). In the vicinity of Los Azules this structural corridor appears to control the locations of hydrothermal alteration and mineralization zones along a seven kilometer strike length including the Los Azules porphyry system (Rojas, 2010).

The Los Azules porphyry system underlies a prominent north-northwest-trending valley that corresponds with the above-mentioned structural zone. The floor of the valley is occupied by a prominent topographic whaleback ridge, appropriately named “La Ballena” as shown in Figure 7.3. To the north-northwest this valley is abruptly diverted west into the west-flowing Quebrada Los Azules by an upfaulted block that forms Cerro Este (Zurcher, 2008a).

In detail, the porphyritic and “crowded” porphyry dikes at Los Azules were emplaced along numerous, strong, pre- and syn-ore, north-northwest and northwest striking faults with important strike-slip components (Zurcher, 2008a). Mineralization and hydrothermal alteration zones are also elongated northwest to north- northwest. Post-mineral north to northeast-striking reverse faults (“Las Lagunas” and “Diagonal” systems) juxtapose diverse structural blocks, each of which is characterized by contrasting alteration and mineralization characteristics (Zurcher, 2008a).

Pratt (2010) provided a kinematic structural interpretation of the Los Azules porphyry copper deposit. The Piuquenes Fault is part of the north-northwest striking “Vegas” fault system described by Rojas (2010). The northwest-striking faults were named Azules (Rojas, 2010). Porphyry-related quartz veins (blue) and deeper level and older than (epithermal) alunite and vuggy quartz silicified ribs (red) are shown in Figure 7.8.

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Figure 7.8: Kinematic Structural Interpretation of Los Azules Porphyry Copper Deposit (Pratt 2010) The widespread occurrence of broken drill core from Los Azules reflects the strongly fractured nature of the rock as shown below in Figure 7.9. This could be a result of fault zone fracturing except that fractures appear to be randomly oriented. Many planar fractures are coated with gypsum, probably after anhydrite, suggesting that there may have been a pervasive anhydrite stockwork throughout the porphyry system that has subsequently been hydrated, dissolved and removed.

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Figure 7.9: Typical Drill Core from Los Azules Indicating the Strongly Fracture Nature of the Rock (McEwen 2013)

7.2.4 Hypothermal Alteration Los Azules comprises an elliptical zone of hydrothermal alteration up to 5 kilometers (north-south) by 2 kilometers (east-west) that corresponds spatially with porphyritic and “crowded” porphyry diorite dikes. Hydrothermal alteration is classic porphyry-style potassic (K-feldspar and biotite) and propylitic (chlorite-epidote-albite-calcite) facies overprinted, in places, by sodic-calcic- (albite-chlorite), chlorite-, phyllic- (quartz-sericite-pyrite) and argillic- (supergene) alteration.

Potassic alteration occurs in all three structural blocks at Los Azules (Zurcher, 2008a). It is the earliest and most extensively developed alteration and comprises potassium feldspar (pink) and biotite (black) alteration types. The strongest potassic alteration appears spatially associated with porphyritic quartz diorite dikes.

Potassium feldspar alteration (FelK) is characterized by pink orthoclase in veins/veinlets/stockworks and vein envelopes and pervasive replacements of plagioclase phenocrysts and/or matrix in diorite porphyry host rocks. Biotite (BtK) alteration occurs as veins and pervasive- to selective-replacement of igneous biotite and hornblende in diorite porphyry host rocks in a zone peripheral to, and contemporary with, the main potassium feldspar alteration. The potassic-altered zone(s) are commonly associated with anhydrite/gypsum veins/veinlets and disseminated magnetite.

Propylitic alteration occurs peripheral to the other facies of alteration. It consists primarily of chlorite replacing ferromagnesian minerals, as well as minor epidote and calcite in veins, and formed during the early stage of alteration contemporaneous with potassic and biotitic alteration.

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Sodic-calcic alteration (NaCa) comprises albite and chlorite with minor epidote, actinolite and tourmaline. In drill core wide intervals of diorite porphyry appear bleached (white and green) and porous with numerous druses lined with chlorite and crystalline quartz. The porosity is likely due to removal of soluble anhydrite/gypsum but has also been attributed to dissolution and removal of iron oxide, quartz, feldspars and ferromagnesian minerals (Zurcher, 2008). A prominent vein of medium grained, crystalline, drusy quartz likely formed in space vacated by anhydrite/gypsum. Sodic-calcic alteration post-dates potassic and propytlitic alteration and overprints the flanks of the potassic core of the porphyry system in all three structural blocks. It is best developed in the north-northwest sector where it appears to be associated spatially and temporally with development of quartz-sericite alteration. Unusual concentrations of often well-crystallized chalcopyrite occur with sodic-calcic alteration likely a result of remobilization and redeposition during overprinting by late-stage, highly saline brines. Sodic- calcic alteration at Los Azules lacks minerals more characteristic of this type of alteration such as significant quantities of actinolite and scapolite and may simply be a variation of chlorite alteration.

Chlorite alteration (Cl) is frequently located around the limits of the potassic alteration zone or at its contacts with sodic-calcic, biotite and/or phyllic alteration. It is interpreted as an intermediate facies (not propylitic) where ferromagnesian minerals are altered and feldspars are weakly corroded. In some cases chloritic alteration is considered equivalent to quartz-sericite or intermediate between this and sodic- calcic alteration. Hornblende, biotite, and secondary biotite are variably replaced by chlorite, but this is more pervasive in the northernmost and southernmost fringes of the deposit. Chlorite also variably affects feldspar and sericite, suggesting that it was probably introduced at several stages during the life of the hydrothermal system.

Phyllic (quartz-sericite-pyrite) alteration (QS) is represented by moderate to intense sericitization of feldspars and primary and secondary biotite and is associated with moderately well-developed quartz stockworks. It is also associated with silica flooding as well as sericite- (tourmaline-) quartz breccias (BxH). Phyllic alteration is located vertically above, and broadly overprints potassic and calcic-sodic alteration at shallow levels as shown in Figure 7.10, but also extends down structures that host “crowded” porphyry dikes about the north-northwest axis of the potassic core. It is surrounded by biotite- and weak propylitic-alteration. In plan the most intense quartz sericite alteration surrounds and penetrates centers of potassic-, calcic-sodic, chlorite and biotite alteration. In its periphery, it diminished in intensity and passes gradually into weakly propylitic-altered and fresh rock.

Argillic alteration is generally restricted to faults and structures and to the limits of the quartz-sericite zones or alteration products of the phyllic zone. It comprises illite, kaolinite and montmorillonite clays pervasively replacing sericite at shallow levels. No primary advanced argillic alteration products have been identified to date in the deposit area. Modest sericite and strong argillic alteration also occur in association with late- stage “open” granodiorite-dacite porphyry dikes.

Silicification (S) occurs locally as massive and pervasive alteration peripheral to potassic and phyllic alteration zones. Quartz “A” vein stockworks occur in phyllic and potassic alteration zones while “D” veins are developed in the most intense phyllic-alteration zones. Silicification is associated with both potassic and sericite alteration. Silicification and tourmaline breccias occur together locally at deep levels in the northern structural block and east of the Ballena zone on the lower slopes of Filo ridge. Tourmaline also occurs in veinlets and disseminated traces in phyllic alteration.

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Advanced argillic alteration at Los Azules, including alunite, vuggy silica and kaolinite/dickite, is mainly localized along narrow, sub-vertical structures most of which strike northwest (Pratt, 2010). It occurs around the periphery of the porphyry system, particularly in the south part of the Filo ridge and at Cerro Sur. Some of the alunite is very coarse grained and clearly hypogene. Alteration of this type represents a target for gold mineralization and may have attracted Battle Mountain Gold to Los Azules in the first instance.

Advanced argillic alteration is also reported in small areas in the upper levels of the La Ballena zone normally in drill holes. It is considered to be a late, lower temperature, near-surface alteration superimposed at high levels on the phyllic zone. Figure 7.10 shows occurrences and distributions of alteration facies at the Los Azules porphyry copper deposit.

Figure 7.10: East-west Cross Section (6,559,800N) (McEwen 2013)

7.2.5 Geochronology Radiogenic ages are reported from the Los Azules property as follows (Zurcher, 2008c):

quartz diorite 10.6 Ma +/- 0.2 U-Pb zircon feldspar porphyry 10.7 Ma +/- 0.2 U-Pb zircon andesite porphyry 9.2 Ma +/- 0.2 U-Pb zircon quartz diorite 8.2 Ma +/- 0.3 U-Pb zircon mineralization 7.84 Ma +/- 0.04 Re-Os molybdenite

These data confirm the Miocene age for the porphyry intrusions and mineralization at Los Azules and, together with their spatial association, indicate a genetic connection between the quartz diorite porphyry

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in particular and hydrothermal alteration and mineralization. The radiogenic ages also confirm the existence of a sequence of pluton and dike intrusions at Los Azules as stated by Zurcher (2008a).

7.3 Mineralization Porphyry copper-style mineralization at Los Azules is spatially, temporally and genetically related to a suite of north-northwest-striking, diorite-dacite porphyry dikes that cut a diorite porphyry pluton as described in Section 7.2. Only the overlying leached zone of the porphyry copper deposit is exposed along the Ballena ridge. Copper mineralization at Los Azules is potentially economic and occurs as two main styles:

1) Early, hypogene porphyry copper mineralization, and 2) Later, supergene chalcocite blanket mineralization

Hypogene mineralization is best developed at depth below the Ballena ridge in the Piuquenes-Vegas valleys and in the upfaulted (Cerro Este) block north of the Lagunas fault system (Pratt and Bolsover, 2010, Figure 7.3).

Drilling in 2011 and subsequent campaigns has identified a significant zone of deep primary mineralization referred to as the “Southwest Zone”. Based on drilling results, the zone appears to trend north-northwest parallel to the main Los Azules deposit.

Through April 2013, the Southwest Zone has been intersected by at least 13 drill holes over a strike length of more than 1,000 meters, and it is open to the northwest and at depth. Figure 7.11 shows the zone boundaries as interpreted from drilling data. The blue line generally outlines mineralization at Los Azules above a cut-off grade of 0.35% copper. The red line outlines the general form of the main Los Azules enriched zone and also the Southwest Zone.

The Southwest Zone mineralization is relatively deep, typically starting at an elevation of approximately 3,400 meters, or approximately 300 to 400 meters or more below surface (Figures 7.12 and 7.13). The mineralization is hypogene with primary chalcocite, chalcopyrite, bornite and pyrite predominately with potassic alteration, and it is characterized by relatively high-grade intervals of hydrothermal-magmatic breccias. There is no supergene enrichment in the deep Southwest Zone. The discovery of this deep mineralization implies that additional mineralization may be present at depth below the main Los Azules deposit, which was typically only drilled to target depths of 400 meters prior to 2012.

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Figure 7.11: Grade x Thickness map of Los Azules (McEwen 2013)

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Figure 7.12: Cross Section Showing the Resource Model Grades at Los Azules (McEwen 2013)

Figure 7.13: Cross Section Showing the Resource Model Grades at Los Azules (McEwen 2013)

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Supergene chalcocite-covellite mineralization is thickest and best developed beneath the valley floor between the northern end of the Ballena ridge and the southern limit of down faulted (Cerro Oeste) block as shown in Figure 7.14. This figure represents the thickest part of the enriched zone. Small squares shown on the figure are resource model blocks. Supergene mineralization extends south-southeast along the Ballena ridge but is not so well developed here. A new zone of high grade supergene mineralization located to the west of the main Los Azules deposit was discovered in three drill holes during 2013 (“Western Supergene Zone” on Figure 7.14). This zone, which is open to the west and northwest, may be developed over a northwest extension of the deep Southwest zone.

Figure 7.14: Cross Section of the Enriched Zone Associated with the Main Los Azules Deposit (McEwen 2013) No other areas of significant mineralization are known at present at Los Azules but geophysics indicates various untested anomalies in the vicinity of the Los Azules porphyry system, and mesothermal-epithermal precious metals deposits could be concealed peripheral to the porphyry system

7.4 Hypogene Mineralization Disseminated sulfide mineralization predominates at Los Azules. Minerals include chalcopyrite, lesser bornite, chalcocite-digenite, idaite and trace molybdenite, magnetite and lesser hematite, usually deposited on igneous mafic minerals. Copper sulfides rarely exceed 2 to 3 percent (rock volume) but unusual concentrations of often well-crystallized chalcopyrite are associated locally with sodic-calcic alteration. Drill assays commonly report wide intervals of 0.1 to 0.35 percent copper in hypogene mineralization. Silver (approximately 1 gram/tonne), anomalous gold (up to approximately 150 parts per billion) and molybdenum (up to approximately 600 parts per million) are reported in some intersections. The most important volumes of primary copper mineralization correspond with potassic alteration and

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comprise magnetite-pyrite-chalcopyrite-digenite in the south, and specularite-pyrite-chalcopyrite-bornite- digenite in north sectors of the deposit (Zurcher, 2008a). Mineralization is mainly located in and around the porphyritic quartz diorite dikes and quartz diorite pluton and also in “crowded” porphyry dikes.

Hypogene sulfide paragenesis is similar in phyllic alteration but it is usually more pyrite-rich (1 to 5 percent). Pyrite occurs disseminated and in sericite-quartz (with or without tourmaline) veins. Quartz-sulfide stockworks and sericite alteration appear to be best developed in and around “crowded” porphyry dikes but significant high-grade copper intersections are less common than those in potassic alteration. Sparse molybdenite occurs in some sericite-quartz veins.

Stockwork vein/veinlet mineralization is widespread but not strongly developed at Los Azules. A range of vein/veinlet styles and mineralogies are identifiable in outcrops and drill core (Pratt, 2010; Almandoz, 2010b) and include examples characteristic of porphyry copper (molybdenum-gold) deposits (Sillitoe, 2010).

Examples of classic porphyry stockwork veins/veinlets observed by Jemielita (2010) in Los Azules drill core are listed below (earliest to latest; cross-cutting relationships noted):

GROUP 1 veins (Sillitoe, 2010) K-feldspar Alteration Zone

 Narrow magnetite veinlets (“M” veins).  Chalcopyrite-molybdenite-magnetite veinlets.  Biotite-magnetite-bornite veinlets  Biotite (chlorite-sericite)-pyrite-chalcopyrite veinlets (EDM veins shown on Figure 7.15) cut by vein types 5, 6 and 7.

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Figure 7.15: Hole AZ-10-53A; 605 meters EDM Veins (McEwen 2013) Figure 7.15 illustrates diorite porphyry cut by an early, dark micaceous (EDM) biotite-chalcopryite veinlet, itself cut by an early granular quartz-chalcopyrite “A” veinlet.

GROUP 2 veins (Sillitoe, 2010) K-feldspar Alteration Zone

 Anhydrite (gypsum veins/veinlets) chalcopyrite-molybdenite (Figures 7.16 and 7.18)  Granular quartz K-feldspar-biotite-chlorite-anhydrite-chalcopyrite-bornite-chalcocite-molybdenite (“A” veins; Figure 7.16)  Grey-pink, quartz-chalcopyrite-bornite-chalcocite+/-molybdenite+/-magnetite-hematite veins/veinlets, fine-grained, granular, homogeneous cut by Group 3 veins  Quartz-hematite (after magnetite) in central suture (“B” veins; Figure 7.17)

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Figure 7.16: Hole AZ-10-53A; 605 Meters Quartz “A” Vein (McEwen 2013) Figure 7.16 shows a quartz “A” vein with an anhydrite-chalcopyrite core and pink K-feldspar alteration halo in potassic-altered, crowded diorite porphyry.

Figure 7.17: Hole AZ-10-53A; 123 Meters “B” Vein (McEwen 2013) A compact, fine-grained, granular, quartz-hematite (after magnetite in central suture) “B” vein cutting diorite porphyry is shown in Figure 7.17.

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GROUP 3 veins (Sillitoe, 2010) Sodic-Calcic Alteration Zone

 Quartz-epidote veinlet  Chlorite-chalcopyrite fractures  Quartz-chlorite-illite-sericite-chalcopyrite-pyrite-molybdenite veinlets  Chlorite-illite/sericite-pyrite- chalcopyrite-chalcocite veinlets (5) albite selvage cut  Crystalline quartz- chalcopyrite-chalcocite pyrite-molybdenite veinlets (also in QSP zones)  Drusy quartz-chalcopyrite-chalcocite vein (Figure 7.18)  Opaline silica milky blue fracture coatings  Molybdenite veinlets

Figure 7.18: Hole AZ-10-53A; 395 Meters Crystalline-Drusy Quartz Vein (McEwen 2013) Figure 7.18 illustrates an unusually wide crystalline-drusy quartz vein cutting albite-chlorite- (sodic-calcic-) altered diorite porphyry with characteristic crystalline quartz- and chlorite-lined voids respectively replacing vein and disseminated anhydrite/gypsum.

GROUP 4 veins of Sillitoe (2010) Phyllic Alteration Zone

 Crystalline quartz-pyrite with sericite halos (“D” veins; Figure 7.19)

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Figure 7.19: Hole AZ-10-57; 219 Meters “D” Vein (McEwen 2013) Pervasive phyllic- (quartz-sericite-pyrite-) altered diorite porphyry with white sericite replacing feldspars and biotite, and fine-grained, disseminated pyrite with a stockwork of early-stage, pink, granular quartz veinlets cut by a “D” vein (left) composed of fine- to medium-grained, crystalline-drusy quartz and pyrite is illustrated in Figure 7.19.

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7.5 Supergene Mineralization Supergene mineralization at Los Azules comprises a sterile leached and oxidized cap overlying a sub- horizontal chalcocite-covellite (“enriched” zone) blanket which grades downwards through a “partially enriched” zone of incomplete replacement (mixed hypogene-supergene sulfides) into the underlying hypogene sulfide as described in Section 8 and shown in Figures 7.20 to 7.23, which show the leached cap, and Figure 7.24, which shows the copper grade distribution.

The leached cap ranges from 30 to 180 meters thick and is oxidized and argillic-altered. Limonitic boxworks and disseminated spots of jarosite, goethite, and hematite are common. Hematite is more abundant in the southern structural block; jarosite is best developed over the central block, while goethite appears relatively more widespread in the northern block (Zurcher, 2008a). A mixed oxide- hypogene pyrite zone is reported at depth. Primary magnetite is reportedly altered to hematite and ferrimolybdite also occurs (after molybdenite) but copper minerals and sulfides are mostly absent (Rojas, 2010). Copper oxides are reported from the margins of the leached zone and include brochantite, copper pitch and copper wad. Copper grades in the leached cap are reported to range between 0.01 and 0.1 percent.

Beneath the leached cap a narrow mixed sulfide-oxide zone gives way to a supergene sulfide zone where hypogene sulfides are replaced by chalcocite and minor covellite. The supergene copper blanket appears best developed in the central and central-northern structural sectors, characterized by a more jarositic oxide cap in the pyritic phyllic-altered zone located directly above the potassic alteration zone. Supergene (earthy) chalcocite and minor covellite partially or completely (rare) replace hypogene sulfides but pyrite usually survives. Traces of native copper and gypsum after anhydrite occur into the underlying potassic alteration zone. The thickness of the supergene chalcocite blanket varies between 60 and 250 meters but can penetrate to more than 400 meters down structures as shown in the figures.

Copper values in the supergene “enriched” zone vary between 0.4 to greater than one percent in the north-central part of the system and decrease to the south and the peripheries to 0.2 to 0.4 percent copper. For the purposes of resource estimation the supergene domain is based on a cyanide soluble copper to total copper ratio of 50 percent; there is no “partially enriched” zone in the resource model. For the geological interpretation, mineralization is classified as “enriched” where 100 to 70 percent of the total copper is leachable and “partially enriched” where 70 to 30 percent of total copper is leachable (Rojas, 2010). The following figures illustrate the leached, enriched (supergene), partially enriched and primary (hypogene) zones.

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Figure 7.20: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013)

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Figure 7.21: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013)

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Figure 7.22: Cross Section Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013)

Figure 7.23: Vertical Longitudinal Section on N15°W (A-A’ in Figure 7.4) Looking NE Showing the Nature and Distribution of the Leached Cap, Supergene and Hypogene zones (McEwen 2013)

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Figure 7.24: Longitudinal Section (A-A’ in Figure 7.11) Resource Model Copper Grade Distribution at Los Azules. The Lower Gray Line is the Limiting Shell for the Resource Model (McEwen 2013)

7.6 Other Mineralization Battle Mountain Gold explored Los Azules during 1998-99 for gold and drilled three holes in altered pyroclastic volcanic rocks in a strongly pyrite-mineralized zone at La Hoya in the extreme northwest of the area, apparently without significant success. The company may have been attracted by hydrothermal breccias with associated kaolinite-illite-dickite-quartz-alunite alteration that are reported in volcanic lithologies intruded by small intrusions and dikes of feldspar porphyry in the Cerros Centrales (Cerro Oeste) area.

Indications of potential gold-silver mineralization around the Los Azules porphyry copper system include late-stage, intermediate-sulfidation epithermal quartz veins described by Pratt (2010). These veins are mainly quartz (with minor sphalerite and galena). A variety of precious metals deposits are known to commonly occur peripheral to porphyry copper systems, as described in Item 8, but the district around Los Azules has not been systematically explored for indications of such mineralization.

The existence of a thick leached cap and supergene chalcocite blanket at Los Azules indicates that oxidation, dissolution, vertical transportation and redeposition of copper occurred in the system. Copper may also have been transported laterally away from the deposit and redeposited to form so-called “exotic” copper mineralization (Sillitoe, 2010). Potential for this style of mineralization in the vicinity of Los Azules has been postulated but not investigated.

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8.0 Deposit Types

8.1 Deposit Types Los Azules is located within the Central Chile segment (400 kilometers-long) of the Miocene-early Pliocene porphyry copper belt (6000 kilometers-long) of the north and Central Andes as shown in Figure 8.1. The figure also shows locations of the major porphyry copper and related epithermal deposits, limits of the porphyry copper belt and permissive northwest-trending structural corridors that influence the location of mineralization along the porphyry belt. Porphyry copper deposits in this sub-belt are 12 to 4 Ma in age and include the world-class Los Pelambres (Cu-Mo), Rio Blanco-Los Bronces (Cu-Mo) and El Teniente (Cu-Mo) porphyry deposits, the Maracunga belt porphyries (Cu-Au) in Chile and El Pachón (Cu), and Bajo de la Alumbrera (Cu-Au) in Argentina, as well as numerous other porphyry and related deposits (Sillitoe and Perello, 2005).

Mineralization at Los Azules is Andean-Cordilleran, late Miocene, (quartz-) diorite-hosted, oxidized (magnetite-anhydrite) porphyry copper style with a well-developed leached cap and supergene chalcocite-covellite blanket. Los Azules displays numerous features in common with other porphyry deposits:

Panteleyev (1995) describes the common features of porphyry deposits as large zones of hydrothermally-altered rock containing quartz veins and stockworks, sulfide-bearing veinlets, fractures and lesser disseminations in areas up to 10 square kilometers in size. These are commonly associated with hydrothermal and/or intrusion breccias and/or dike swarms. Deposit boundaries are determined by economic factors that define ore zones located within larger areas of low-grade, often concentrically zoned mineralization. Important geological controls on porphyry mineralization include igneous contacts, cupolas and the uppermost, bifurcating, parts of stocks and dike swarms. Intrusive and hydrothermal breccias and zones of intensely developed fracturing, respectively due to intersecting or parallel multiple mineralized fracture sets, commonly coincide with the highest metal concentrations.

Surface oxidation commonly modifies porphyry deposits in weathered environments. Low pH meteoric waters generated by oxidation of iron sulfides leach copper from oxide minerals such as malachite, chrysocolla, and brochantite which is then transported and redeposited as secondary chalcocite and covellite usually immediately below the water table to form sub-horizontal, tabular zones of supergene copper enrichment. This process forms a copper-poor leached cap above a relatively thin but often high-grade zone of supergene copper enrichment that itself caps a thicker zone of often moderate grade hypogene copper mineralization at depth.

Alternatively, or additionally, porphyry systems can exhibit hypogene enrichment related to the introduction of late hydrothermal, copper-enriched fluids along structurally prepared pathways, or the leaching and redeposition of hypogene copper, or a combination of the two. Hypogene copper mineralogy in this instance comprises covellite and chalcocite often with elevated hypogene copper grades.

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Figure 8.1: Part of the Central Chile Segment of the Miocene-early Pliocene Porphyry Copper Belt (Rojas 2008)

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Other deposit styles often spatially, temporally and genetically associated with porphyry deposits include exotic copper deposits, formed by the lateral migration of copper-bearing fluids away from the main body of porphyry mineralization, as well as mineralized breccia pipes, skarns, sedimentary replacements (mantos) and precious metals-bearing mesothermal-epithermal vein deposits located peripheral to, and progressively distant (laterally and vertically) from, the porphyry copper center as shown in Figure 8.2. The figure shows the spatial relationships between a porphyry copper system and its surrounding environment including host rocks and peripheral styles of mineralization such as skarns, carbonate replacement (chimney-manto), sediment-hosted disseminated sulfides, mesothermal polymetallic veins, and higher-level high/intermediate/low sulfidation epithermal gold-silver veins and disseminated deposits.

Figure 8.2: Diagram Showing Spatial Relationships between a Porphyry Copper System and the Surrounding Environment (Sillitoe 2010)

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9.0 Exploration

9.1 Exploration History Exploration at Los Azules commenced in the mid-1990’s and has included various studies of geology, geophysics, and geochemistry, as well as drilling with both reverse circulation and diamond core drills, sampling and analysis of surface and drill core samples, and road construction. Exploration was conducted successively, and sometimes in cooperation, by Battle Mountain Gold, MIM-Xstrata, and Minera Andes- McEwen Mining, principally by the latter company.

9.2 Geological Mapping and Sampling The most comprehensive and up-to-date geological map of Los Azules was produced by Pratt and Bolsover in 2010, as described in Section 7.2. An earlier detailed geological map, with cross sections, was compiled by Rojas (2007). Almandoz (2010b) produced a geological map at 1:5000 scale, and Zürcher (2008a) made a detailed map of the central portion of the north-northwest-trending Ballena ridge that focused on hydrothermal alteration and mineralization, rather than the geology. The latter map shows no lithological boundaries, reflecting the difficulty of separating igneous lithologies in the mineralized zone, a problem also reported by Pratt (2010).

Surface and drill core samples have been analyzed since 2004 as part of a mineralogical study using a portable infrared spectrometer (PIMA; Lasry, 2005). Petrographic studies were made in Argentina after the 2006 exploration campaign (Sumay and Meissi, 2006). Petrographic studies of polished sections collected by Zurcher from drill cores, and surface samples were initially studied by DePangher (2008) in Oregon, and then by GEOMAQ in Santiago de Chile (Rojas, 2010).

9.3 Geochemistry More than 27,000 samples have been taken from Los Azules by Battle Mountain Gold, Xstrata, and Minera Andes/McEwen Mining and analyzed and the information processed. Samples include surface, drill hole and control samples such as duplicate samples, blanks and standard samples. These were mostly assayed for gold, silver, copper, molybdenum, zinc, lead and arsenic. Sequential copper analysis has been done on selected drill-hole samples.

9.3.1 Surface Samples Battle Mountain Gold (1996-1998), MIM-Xstrata (2004) and Minera Andes/McEwen Mining (2004- present) together collected 912 surface samples that were analyzed for copper, molybdenum, gold, silver, lead, zinc and arsenic and, in some cases, antimony and mercury. A summary of the samples taken are provided in Table 9.1 and Figures 9.1 to 9.7. In some sectors with little geochemical data and/or recent sediment cover near surface bedrock drill hole samples substituted for outcrop samples. Analytical results were classified as not anomalous through weakly and moderately to highly anomalous as shown in Table 9.2, then contour plotted to produce geochemical anomaly maps shown in Figures 9.1 to 9.7.

The contour plots clearly show a strong positive correlation between anomalous molybdenum and copper corresponding with the Ballena ridge and the underlying porphyry copper system at Los Azules as shown in Figures 9.1 and 9.2. Other metals including gold, silver, lead, zinc and arsenic as shown in Figures 9.3 to

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9.7, are clearly concentrated in areas peripheral to, and at higher altitudes than, the molybdenum and copper anomalies in a zonation pattern typical of porphyry copper deposits.

Table 9.1 Outcrop and Drill Hole Proxy Samples Laboratory Sample Type Company Total Samples Period Employed Drill Hole Minera Andes 32 2004-2008 ALS- ACME Drill Hole BMG 24 1998-1999 ALS-GEOLAB Drill Hole Xstrata 4 2004 unknown Surface Minera Andes 216 2004 ALS CHEMEX Surface BMG 479 1996-1997 ALS GEOLAB, CIMM Talus BMG 157 1998 ALS GEOLAB, CIMM Total 912

Table 9.2 Range of Anomalous Values in Outcrops Anomalies Au ppm Ag ppm As ppm Mo ppm Pb ppm Zn ppm Cu ppm Not Anomalous 0.00-0.10 0.0-3.0 0-100 0-10 0-200 0-100 0-100 Weakly Anomalous 0.11-0.30 3.1-10.0 101-300 11-,30 201-500 101-300 101-300 Moderately Anomalous 0.31-1.00 10.1-30.0 301-1000 31-50 501-2000 301-1000 301-1000 Highly Anomalous >1.00 >30.0 >1000 >50 >2000 >1000 >1000

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Figure 9.1: Contour Plot Showing Surface Sample Molybdenum Values at Los Azules (Rojas 2008)

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Figure 9.2: Contour Plot Showing Surface Sample Copper Values at Los Azules (Rojas 2008)

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Figure 9.3: Contour Plot Showing Surface Sample Lead Values at Los Azules (Rojas 2008)

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Figure 9.4: Contour Plot Showing Surface Sample Zinc Values at Los Azules (Rojas 2008)

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Figure 9.5: Contour Plot Showing the Spotty Distribution of Surface Sample Gold Values at Los Azules (Rojas 2008)

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Figure 9.6: Contour Plot Showing Surface Sample Silver Values at Los Azules (Rojas 2008)

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Figure 9.7: Contour Plot Showing Surface Sample Arsenic Values at Los Azules (Rojas 2008)

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9.4 Geophysics Various geophysical studies were conducted at Los Azules by Battle Mountain Gold and by MIM-Xstrata respectively in 1998-1999 and 2004 and by Minera Andes (Quantec) in early 2010 and McEwen Mining (Quantec) in 2012. Work done and results for these surveys are described in the following section.

9.4.1 Battle Mountain Gold (1998-99) GEODATOS, a Chilean geophysical company, conducted an airborne geophysical survey in early 1998. The survey covered a 20 by 10 kilometer area elongated east-west including the Los Azules and Paso de la Coipa areas. Lines were flown north-south at 200 meter intervals and control lines were flown east-west at 1,000 meter intervals. Instrument altitude was maintained at 20 meters during flights.

Results suggested the existence of a structural corridor striking northwest and structures striking east- northeast associated with strong to moderate magnetic low signatures in the Los Azules mineralized body. A total field magnetic plot identified a magnetic high anomaly surrounding a central magnetic low that extended six kilometers north-northwest and three kilometers northeast as shown in Figure 9.8. Battle Mountain Gold interpreted the magnetic low as altered rocks associated with the mineralized body.

Four lines of induced polarization (IP) were oriented east-west averaging two kilometers long and spaced at 600 to 900 meters apart. The lines were positioned to cross the locations of mineralized drill holes LA- 04-98, LA-06-98 and LA-08-98. One of the lines extended north to lithocap outcrops with anomalous copper (advanced argillic alteration possibly associated with gold mineralization and underlying porphyry copper mineralization.) IP results indicated high chargeability and low resistivity corresponding with the location of the Los Azules porphyry copper deposit.

Two ground magnetic surveys totaling 103 kilometers were conducted in the area of the Los Azules mineralized porphyry and the nearby Sector Mantos, which is one kilometer west of Cerro Oeste. Lines were oriented east-west at 100 meter spacing and 10 meter stations. Results confirmed the existence of north-northwest- and north-northeast-striking structures as indicated by aeromagnetics. Results also confirmed the presence of a magnetic low anomaly in the vicinity of drill holes LA-98-04, LA-98-06 and LA-98-08 and suggested the presence of a magnetic low along the alteration system of La Ballena ridge as shown on Figure 9.8.

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Figure 9.8: Magnetic Map of Los Azules (Reduced to Pole; 1 kilometer square grid) (Rojas 2008)

9.4.2 MIM-Xstrata (2003-2004) During 2003-2004 MIM-Xstrata carried out a magnetic survey of approximately 70 line kilometers at Los Azules. Lines were oriented east-west across the area controlled by the company at that time. In addition, MIM-Xstrata ran six lines of MIMDas (MIM-Xstrata proprietary IP system) east-west totaling 11.8 kilometers. At the request of Minera Andes, MIM-Xstrata extended their geophysical lines south into Minera Andes ground completing five additional lines for a total 11.3 kilometers in 2004. Total surveying by MIMDas was 23.1 kilometers.

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Magnetrometry indicated a magnetic low beneath the Los Azules porphyry copper system and suggested that it extended north-northwest towards the La Hoya zone (Cerros Oeste and Este). The total field plot identified a magnetic high anomaly surrounding the magnetic low. The magnetic low extends 7 to 8 kilometers north-northwest and up to 2 kilometers east-northeast confirming the interpretations made by Battle Mountain Gold.

MIMDas IP surveying (2003-2004) indicated high resistivity in the north-northwest zones at Los Azules with much lower resistivity within the porphyry copper system. Chargeability is relatively low to the north but becomes much lower at the porphyry although it increases significantly at depth. These results reflects the occurrence of more superficial sulfides in the Lagunas area of the system (north of the porphyry deposit) and a thicker leached cap in the more altered part of the system.

9.4.3 Minera Andes: TITAN-24 Survey (2010) Titan-24 DC-IP-MT data were acquired at Los Azules during April and May 2010 by Quantec Geoscience Ltd., on behalf of Minera Andes Inc. The Titan-24 system acquires three types of geophysical data– magnetotelluric resistivity (MT), direct current resistivity (DC), and induced polarization (IP). The survey consisted of twelve parallel lines (L58400N to L62450N). From L58400N to L62000N the lines were 400 meters apart, L62550N was 550 meters north of L62000N and L63450N was 900 meters further north. Each line comprised one single spread of 3.6 kilometers, except for L63450N that was 3.3 kilometers long. Full MT tensor data was acquired in all the lines and DC/IP was collected in all but L59200N and L59600N. In total ten spreads of DC and IP data were acquired covering 35.7 kilometers and twelve spreads of MT covering 42.9 kilometers. Grid azimuth was 90° and the station interval was 150 meters.

Over 130 IP anomalies were identified. Of these, 20 were classed as priority 1, 20 as priority 2, and 12 as priority 3. The first priority anomalies are generally larger targets, at least 200 meters across, and described by Quantec as being consistent with the porphyry and near-porphyry mineralization model.

Two large deep resistivity anomalies, one high to the east, generally under the Los Azules mineralization, and one low to west are well defined by the MT survey. The anomalies occur at depths to center ranging from 800 meters to 1.5 kilometers. Depth to top is rarely less than 500 meters. The width of the anomalies is 800 meters to 1 kilometer for the resistivity low and 500 to 800 meters for the resistivity high. Quantec postulated that the deep anomalies are most likely related to conductive sulfides perhaps in a disseminated pyrite/sulfide shell surrounding a concealed porphyry intrusion. These anomalies, which are referred to as the “Southwest Target”, are the targets that were tested in Hole T-01B in 2011 and Hole 1279 in 2012 (Figure 9.9). Hole T-01B is located 200 meters north of section 58,400N, and Hole 1279 is located 100 meters south of the drill section. The section shows the limit of the mineralization prior to the 2010 and 2011 drilling campaigns.

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Figure 9.9: Section 58,400N Showing 2D IP Inversion Anomaly (Southwest Target) (McEwen 2012)

9.4.4 McEwen Mining: Ground Magnetic Survey (2012) During January 2012, Quantec Geoscience Argentina S.A. performed a ground magnetic survey on the southwest portion of the Project. The survey consisted of 37 lines ranging from 1.1 to 2.5 kilometers, for a total of 57.2 line-kilometers. The objective of the survey was to identify anomalous magnetic signatures that might be related to copper porphyries. The survey was acquired on a “stop-and-go” configuration, collecting data at 10 meter intervals. The data was presented as maps of the Total Magnetic Field, Reduction to the Pole transform, Analytic Signal, Tilt Derivative and First Vertical Derivative.

Figure 9.10 is the Total Magnetic Field map for the 2012 survey overlain on the image shown in Figure 9.8. The 2012 magnetic data shows a discontinuous north-northwest trending magnetic low southwest of and roughly parallel to the prominent magnetic low that corresponds to the location of the main Los Azules deposit.

Areas of high magnetic response indicate the presence of elevated levels of magnetic minerals such as magnetite, pyrrhotite and hematite, whereas areas of low magnetic response may be caused by alteration processes such as magnetite destruction or may simply indicate rock types that never had magnetic minerals. This anomaly was tested with one drill hole during the 2012 season, but the hole, which was drilled to a depth of 501 meters, intersected only traces of copper mineralization.

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Figure 9.10: Total Magnetic Field for 2012 Survey Overlain on Figure 9.8 (McEwen 2012)

9.5 Surveys and Investigations Mineral exploration at Los Azules has been carried out successively by Battle Mountain Gold, MIM-Xstrata and Minera Andes-McEwen Mining, and/or contractors and/or professional consultants employed by these companies.

Jemielita (2010) reviewed the exploration program and data and reported that “Mineral exploration at Los Azules appears to have been carried out in a competent manner and to accepted industry standards.”, although he noted that he did not conduct a rigorous confirmation of the quality of exploration work.

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10.0 Drilling

Drilling programs have been undertaken at Los Azules between 1998 and 2013 by three different mineral exploration companies including Battle Mountain Gold, MIM Argentina (now Glencore Xstrata) and Minera Andes/McEwen Mining. Drilling included reversed circulation programs mostly for gold exploration and diamond drilling focusing of supergene and hypogene porphyry-style copper mineralization. Descriptions of these programs are detailed in the following sections. Table 10.1 provides a summary of the drilling information.

Table 10.1 Exploration Drilling by Year and by Company Year Company No. of Holes Meters Drilled 1998 Battle Mountain Gold 16 3,614 1999 Battle Mountain Gold 8 2,067 2004 Glencore Xstrata (MIM) 4 864 2003 - 2004 Minera Andes 9 2,064 2005 - 2006 Minera Andes 11 2,602 2006 - 2007 Minera Andes 17 3,501 2007 - 2008 Minera Andes 18 5,469 2009 - 2010 Minera Andes 28 10,229 2010 - 2011 Minera Andes 44 10,405 2011 - 2012 McEwen Mining 8 2,830 2012 – 2013 McEwen Mining 22 15,873 Total 185(1) 59,518 (1) This table includes all drilling that has occurred on the property. Some holes were redrilled due to drilling difficulties and are not included in the database. Holes that were started in one season and completed the following season are counted in the year they were started, but the meters drilled in each season are shown for the respective seasons.

The drill plan showing collar locations and drill hole numbers and, for angled holes, azimuths is shown in Figure 10.1.

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Figure 10.1: Copper Mineralization Cut-off Grade Distribution and Locations of drill holes at Los Azules (McEwen 2013)

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10.1 Drilling Procedures and Conditions Drilling by McEwen Mining Inc. was contracted to various drilling companies including Connors Drilling, Patagonia Drill Mining Services, Adviser Drilling, Boland Minera, Major Drilling, Boart Longyear and McEwen Mining. Drilling conditions have been particularly difficult especially in faulted intersections or in areas of unconsolidated surface scree/talus.

10.2 Battle Mountain Gold (1998-99) In 1998 and 1999 Battle Mountain Gold drilled twenty-four reverse circulation (RC) holes for a total of 5,681 meters during a gold exploration program. Chalcopyrite, chalcocite, and covellite mineralization was encountered in at least three drill holes (Rojas, 2010).

10.3 MIM-Xstrata (2004) In 2004 MIM Argentina (now Glencore Xstrata) drilled four reverse circulation holes (864 meters) at Los Azules (Rojas, 2010).

10.4 Minera Andes / McEwen Mining (2004-2013) Minera Andes/McEwen Mining has drilled 157 drill holes for a total 52,973 meters in eight campaigns (2003-2004, 2005-2006, 2006-2007, 2007-2008, 2009-2010, 2010-2011, 2011-2012 and 2012- 2013). Drilling concentrated on identifying a zone of secondary enrichment in a grid with holes spaced at 200 meters along east-west lines spaced at 400 meters. Infill diamond drill holes were drilled during the 2009-10 campaign with a target depth of 400 meters achieved or exceeded in seventeen holes, four of which exceeded 600 meters in depth. During the 2009-2010 campaign three RC holes for hydrologic and geotechnical testing were completed. Drilling during the 2010-2011 campaign included 16 infill or step- out diamond drill holes, 6 diamond drill holes for hydrology and geotechnical testing, and 20 reverse circulation holes for condemnation and hydrology testing. Drilling during the 2011-2012 campaign comprised 10 infill and step-out diamond drill holes. During the 2012-2013 campaign all of the 22 diamond drill holes were for the purposes of expanding the resource either to depth or laterally. Figure 10.1 shows the location and distribution of Los Azules drill holes and the known copper mineralization for cut-off grades of 0.35 and 0.70 percent copper.

10.5 Logging Samples taken from drill holes at Los Azules are logged at the Project camp by geologists employed or contracted by McEwen Mining. Sampling procedures are described in Section 11.2. Emphasis is given to recording rock-types, alteration associations, types and distribution of mineralization, and the presence of various types of veinlets and structures. These features are logged onsite then transferred to a digital database.

Geotechnical parameters are recorded including percentage of core recovery, rock quality (RQD), fracture density and angle relative to the length of the hole, as well as fracture fill material. This information is transferred to the digital database. Geotechnical observations were made for 19,281 sample intervals.

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Log sheets are coded and details recorded for interval depth, interval width, lithology, alteration types, alteration intensities, alteration minerals, structure, percentage vein quartz, percentage total disseminated sulfides, mineralization minerals, mineral zone (hypogene or supergene), jarosite, goethite, hematite, covellite, chalcocite, pyrite, chalcopyrite, bornite and other observations.

10.6 Surveys According to McEwen Mining Inc. staff, downhole surveying is done on drill holes by the drilling contractors using REFLEX and/or Sperry-Sun tools. Density determinations were also made for 915 drill core samples.

10.7 Drill Hole Results There are a total of 185 drill holes in the Los Azules database with a cumulative length of 59,518 meters and a total of 27,688 samples analyzed for a suite of elements including total copper, gold, silver and molybdenum. A total of 120 of the drill holes have some portion of the sample intervals tested for sequential copper analysis. A summary of the significant drilling results is found in Table 10.2.

Drilling has confirmed the presence of a hypogene porphyry copper deposit in a continuous body, as well as, the presence and continuity of an overlying supergene chalcocite enrichment blanket. This body has dimensions of approximately 4 by 0.7 to 1 kilometer. Drilling during the 2012-2013 campaign extended the depth of the mineralized system to at least 1,000 meters.

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Table 10.2 Significant Drilling Results Intersection Drill Hole ID TD (m) Interval (m) Total Copper (%) From (m) To (m) AZ0401 195 130.0 195.0 65.0 0.62 Including 150.0 192.0 42.0 0.82 AZ0402 330.5 164.0 304.0 140.0 0.38 Including 164.0 190.0 26.0 0.47 Including 230.0 304.0 74.0 0.42 AZ0404 300.8 162.0 282.0 120.0 0.54 Including 162.0 202.0 40.0 0.59 Including 236.0 282.0 46.0 0.64 AZ0407 168.8 96.0 152.0 56.0 0.44 Including 126.0 152.0 26.0 0.58 AZ0610 261.35 174.0 261.35 87.35 0.83 AZ0611 270.7 112.0 270.7 158.7 0.51 AZ0614 132.0 180.0 48.0 1.13 224.55 Including 136.0 158.0 22.0 1.40 AZ0617 183.5 66.0 183.5 117.5 0.63 Including 66.0 124.0 58.0 0.84 AZ0619 299.4 78.25 299.4 221.15 1.62 Including 78.25 116.0 37.75 2.22 Including 134.0 146.0 12.0 3.94 AZ0620 253.3 80.0 226.0 146.0 1.10 Including 80.0 106.0 26.0 1.54 AZ0722 271.2 119.0 155.0 36.0 0.99 AZ0724D 278.2 124.0 160.0 36.0 0.79 AZ0729B 226.85 130.0 214.0 84.0 0.73 Including 172.0 204.0 32.0 0.94 AZ0730 342.6 123 323.8 200.8 0.89 Including 140 253 113 1.04 AZ0832 420.0 80 140 60 0.78 AZ0833 387.8 73 313 240 0.94 AZ0837A 540.95 326 516 190 0.82 AZ0841 400.15 241 285 44 1.83 AZ0843 176.0 67.0 131.0 64.0 0.69 AZ0946 469.4 110.0 469.4 360.4 0.63 Including 115.0 260.0 145.0 1.08 AZ1047 493.1 74.0 493.1 401.8 0.50 Including 102.0 182.0 76.8 0.92 AZ1048 105.0 466.1 359.1 0.77 466.1 Including 123.0 339.0 216.0 1.01

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Table 10.2 Significant Drilling Results Intersection Drill Hole ID TD (m) Interval (m) Total Copper (%) From (m) To (m) AZ1049 491.2 62.0 491.2 429.2 0.75 Including 62.0 298.0 236.0 1.05 AZ1050 408.5 94.0 408.5 238.0 0.30 Including 94.0 132.0 38.0 0.68 AZ1051 620.2 69.0 620.2 551.2 0.35 Including 363.5 426.0 62.5 1.12 AZ1052 425.0 103.0 425.0 322.0 0.42 AZ1053A 650.0 48.9 650.0 541.1 0.54 Including 122.0 230.0 101.5 1.03 AZ1055 408.5 116.0 408.5 282.5 0.55 AZ1056 295.25 70.0 295.25 226.4 0.47 Including 192.0 223.0 31.0 0.88 AZ1057 503.6 173.0 503.6 330.6 0.43 Including 173.0 225.0 52.0 0.84 Including 255.0 293.0 38.0 0.83 AZ1058 451.8 70.0 451.8 381.8 0.52 Including 96.0 181.0 84.0 0.99 AZ1059 656.4 88.0 656.4 568.4 0.47 Including 330.0 404.0 74.0 0.90 AZ1060A 402.5 116.0 402.5 285.5 0.50 Including 130.0 170.0 40.0 0.69 AZ1061A 293.4 71.0 293.4 209.0 0.90 Including 71.0 250.0 168.2 1.04 AZ1062 280.0 130.0 280.0 150.0 0.64 Including 130.0 248.0 118.0 0.70 AZ1063 427.1 94.0 427.1 333.1 0.72 Including 94.0 232.0 138.0 0.81 AZ1064 170.1 136.0 170.1 34.1 0.47 AZ1064A 404.4 120.0 248.0 128.0 0.75 And 248.0 404.4 156.4 0.39 AZ 1168 569.3 148.0 569.3 395.4 0.66 AZ 1169 315.75 86.0 315.75 229.8 0.36 AZ 1170 349.3 112.0 349.3 349.3 0.63 AZ 1175 355.2 74.0 340.0 266.0 0.22 And 340.0 355.2 15.2 0.72 AZ 1176 393.4 162.0 292.0 130.0 0.63 T-01B 656.0 80.0 192.0 112.0 0.38 And 387.0 656.0 269.0 0.50

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Table 10.2 Significant Drilling Results Intersection Drill Hole ID TD (m) Interval (m) Total Copper (%) From (m) To (m) AZ 1279 622.7 272.0 456.0 184.0 0.38 And 456.0 622.7 166.7 0.71 AZ 1282 482.1 309.5 314.0 7.5 2.60 AZ 1289 367.0 220.0 367.0 147.0 0.44 AZ 1291 890.5 72 232 160 0.61 And 562 790 228 0.40 And 790 890.5 100.5 0.71 AZ 1294 861.9 62.2 74 11.8 0.53 And 252 861.9 609.9 0.47 AZ 1295 1044.5 422 1044.5 618.5 0.51 Including 580 618 38 1.07 Including 720 744 24 1.16 Including 970 1044.5 74.5 0.61 AZ 1296 523.2 156 244 88 0.92 AZ 1297 980.8 276 690 414 0.50 Including 436 490 54 1.07 AZ 1299 1074.6 78 94 16 0.55 And 546 1074.6 528.6 0.44 AZ 12101 237 168 237 69 0.87 AZ 12114 814.5 224 374 150 0.70 Source: Minera Andes press releases dated May 5, 2004, May 31, 2007, November 14, 2007, April 16, 2008, June 6, 2008, March 8, 2010, June 21, 2010, and June 27, 2011, and McEwen Mining press releases dated May 10, 2012, January 17, 2013, and March 28, 2013.

10.8 True Thickness of Mineralization The disseminated and relatively homogeneous nature of the porphyry style mineralization in drill intersections at Los Azules means that intersections effectively represent true thicknesses of mineralization. In the case of the sub-horizontal chalcocite blanket vertical holes represent true thickness as shown previously.

10.9 Orientation of Mineralization Hypogene porphyry style mineralization at Los Azules is in an area measuring approximately 4 kilometers long by 0.7-1 kilometer wide by greater than 1,000 meters deep. The chalcocite blanket is sub-horizontal in orientation and similarly approximately four kilometers long extended north-northwest but varies in horizontal width and vertical thickness as previously shown in Figure 10.1.

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11.0 Sample Preparation, Analyses and Security

11.1 Introduction Robert Sim, of Sim Geological Inc., visited the Los Azules property during the period of March 30-31, 2008 and March 21-23, 2010, and Bruce Davis visited the property during the period of January 23-25, 2012. The results of the recent drilling program were discussed and select intervals from a series of drill holes were reviewed. A series of surface exposures were visited at the deposit site. Active drill sites were visited and a series of (completed) drill holes collars were observed.

Both Mr. Sim and Dr. Davis reviewed the sampling procedures and QA/QC practices used during the drilling program, and Dr. Davis presented a one-day QA/QC seminar to the Project staff. The sampling practices were found to adhere to accepted industry standards. Standard reference material was prepared and certified by Alex Stewart laboratory in Mendoza, Argentina from local source rocks. Blank material was initially made from “barren” quartz with a small portion of leached material “to add some color” (i.e. in an attempt to appear anonymous in the sample sequence). As discussed later in the section, this material is not completely sterile and another source of blank material was obtained for QA/QC programs after 2008. “Coarse” duplicates taken at site in 2008 were actually core duplicates obtained from quarter core splits. Coarse reject duplicates were eventually submitted for 2008 and included in the 2009 and subsequent programs.

Assay results from blank material fell within acceptable limits in all programs after 2009 when silica sand was used instead of the previous blank material.

Robert Sim also visited the old Minera Andes office and the old core storage facility in Mendoza on April 2, 2008 and again on March 24, 2010. Drill core was observed from a series of random intervals and comparisons made between the assay results and the visual presence of copper bearing minerals. The assay results were confirmed by visual observations and checking against original assay certificates. Dr. Davis visited the new core storage warehouse in Calingasta January 2012 when it was being renovated and before the entire core had been moved into the warehouse.

The samples were sent initially to the Alex Stewart lab in Mendoza, and later to the ACME lab in Mendoza, for sample preparation and assaying duplicates. The analytical lab of ACME in Chile runs total copper on all samples. Any interval that is greater than 0.20 percent total copper is analyzed using sequential copper analyses, which consists of acid soluble copper, cyanide soluble copper and residual copper.

Laboratories utilized by McEwen Mining have internal quality control samples used in each batch of sampled material provided by McEwen Mining. Each assay certificate lists the drill sample results, plus the laboratory’s internal sample control results that consist of its own duplicates, blank and reference standard pulp with each batch assayed for its internal quality control on precision, instrument drift, and accuracy in order to determine if there are any sampling issues for that particular run. Anomalously high values within batches are verified by re-assay as a matter of routine.

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Reporting of assay results from the laboratory is transferred to McEwen Mining in electronic format using both Excel files and PDF format. Complete and final assays are prepared by the labs in PDF format with the lab certification results included with each batch.

11.2 Sampling Methods The drilling programs that have occurred on the Los Azules property since 1998 have used both reverse circulation (RC) and diamond core (core) equipment. All holes drilled by Battle Mountain Gold Corporation (BMG) in 1998 and 1999 were RC type. Mount Isa Mines (MIM), now Glencore Xstrata, drilled four RC holes in 2004. Since 2004, Minera Andes/McEwen Mining has mainly used core drilling techniques. The procedure for logging the core is described in Section 10.5.

Sample preparation begins at the man camp where the core is labeled and photographed as whole core. The core is split using a pneumatic core splitter. Core that is not whole or is significantly rubblized is divided with a trowel in order to obtain a reasonable sample. One half the core of two meter sample length is placed in plastic sample bags and tagged accordingly. Both the sample bag and tag are marked with a sample number such that an inventory of samples prepared can be recorded by Minera Andes/McEwen Mining and checked against an inventory prepared by the lab receiving the samples.

11.2.1 Core Sampling RQD measurements and core recovery are measured at the drill rig by Minera Andes/McEwen Mining personnel prior to the core being boxed. The core is placed in core boxes by the drill crew and is systematically logged by the geology staff at the core shed almost as soon as it becomes available. Core boxes are marked by the geologist every two meters for sampling. Subsequently the core is photographed three boxes at a time by the sampling staff. Core is cut with a pneumatic splitter in order to minimize loss of sooty chalcocite, which could be lost by washing during cutting by diamond saw.

Alternating core halves are selected for assay. No particular scrutiny that might bias the results is applied to the alternating halves selected. The core inventory system is scrupulously maintained. The sample is bagged immediately after splitting. A lab generated sample ticket is inserted with the sample, and a second ticket is stapled into the throat of the bag. Nylon cable ties are used to seal the bags. The bags are then weighed and five to six sample bags are sealed in a larger ripstop-mesh sack. The sacks are sealed with a larger cable tie, labeled, and secured with a number attached. Samples are shipped at least once a week.

Drill core recovery is recorded at the drill site and ranges from zero to 100 percent. Drill core recovery averages 86 percent from the supergene and primary mineral zones. Even though core recovery in zones of rubble may be less than seventy percent, there is no indication sample grades are related to recovery or that there is a bias associated with core recovery.

Geology zones pertinent to the distribution of copper grades are discussed in Sections 7 and 14. A summary of significant intervals appears in Section 10.

For exploration projects, NI 43-101 requires that some core be retained for future examination and verification. All drill core from the Project is stored at a well-organized core storage warehouse owned by

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McEwen Mining in Calingasta. Sampling procedures produce samples that are appropriate for subsequent use in resource estimation.

11.3 Sample Preparation Drill hole samples are bagged and numbered when split. Subsequently five to six samples are placed in sacks containing approximately 25 kilograms. These sacks are closed with numbered bag ties. The sacks are not opened until they reach the laboratory where the bag tie number is recorded by laboratory personnel. Samples are transported by project personnel from the Project to the laboratory. Once the samples are bagged at the Project site no McEwen Mining employee is involved with any subsequent sample preparation.

During the 2004 and 2006 field season, sample pulps were prepared by Alex Stewart and shipped to the ALS Chemex laboratory in Chile for analysis. For the 2007 field season, and initially during the 2008 field season, samples were taken to the Alex Stewart Laboratory in Mendoza for sample preparation. Subsequently, field samples were taken directly to the ACME laboratory in Mendoza which only does sample preparation work. Sample pulps prepared at Alex Stewart, and later at the ACME laboratory in Mendoza, were shipped by ACME to ACME’s analytical laboratory in Santiago, Chile.

ALS Chemex, Alex Stewart, and ACME are all ISO 9001:2000 certified.

The sample preparation protocol consists of samples being dried at 60ºC until the desired moisture content is achieved. The entire sample is crushed to 85 percent passing 10 mesh (2 millimeters). The crusher is cleaned with high pressure air after every sample. The entire sample is then run through a Jones or riffle splitter to obtain 500 grams. Rejects are retained.

The 500 gram sample is pulverized in a ring-and-puck pulverizer to 95 percent passing 150 mesh (65 microns). The particle size of the samples is checked by screening random samples. The pulverizer is cleaned after every sample with high pressure air.

A 150 gram split of the pulp is placed in a pulp envelope, numbered, and sent to the assay lab. The remainder of the 500 gram pulp sample is saved as a pulp reject. These pulp rejects have been used for later check analysis at the Alex Stewart Laboratory in Mendoza.

11.3.1 QC Sample Insertion The sampling staff inserts standards as specified in McEwen Mining’s quality control sample handling procedure memo. According to Mr. Sim and Dr. Davis, there is every indication that the procedure is being strictly followed and QC sample coverage was adequate for the drilling.

Duplicate samples are taken every 40 to 45 samples by quartering the assay core splits. Blank material is inserted at the rate of one in every 40 to 45 samples.

11.3.2 Chain of Custody The chain of custody has been outlined in the previous paragraphs in this section. It appears that any tampering with individual bags or the ties would be immediately evident when the samples arrived at the

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lab. Any tampering with the larger bags would also be apparent on arrival at the lab. Documentation was provided such that it would be difficult for a mix up in the samples to occur either during shipment or at the lab.

All procedures were being carefully attended to and met or exceeded industry standards for collection, handling and transport of drill core samples.

11.4 Control Samples Control samples consist of blanks, duplicates and reference standard samples in addition to submitting an appropriate number of check samples to outside, independent laboratories to assure assaying accuracy. Blank samples test for contamination; duplicates test for contamination, precision and intra-sample grade variation; and reference standards test for assay precision and accuracy.

11.4.1 Standard Reference Materials (Standards) Control standards and blanks used during the 2007 and 2008 field season were prepared using composites of course rejects from the 2006 field season. Color was added to the blanks by adding small amounts of course reject from the leached horizon of the deposit. Six standards were prepared with distinct copper and gold contents as shown in Table 11.1.

Table 11.1 Sample Control Standards (2006-2007) Sample Total Cu% Au (ppm) STD B 0.0047 0.0500 STD 01 0.1096 0.0470 STD 03 0.3135 0.0330 STD 06 0.5300 0.0260 STD 08 0.8830 0.0680 STD 20 1.9540 0.0670 Note: Values were obtained from statistical analysis received from Alex Stewart.

For the programs after 2007, Alex Stewart prepared and certified additional standard material with the same certified values for copper. It should be noted that the lack of precision in the gold assays precluded their use as gold standard reference material. This was due to the generally low gold values and assay detection limit effects. It was not a failing of either sample preparation or assaying.

11.4.2 Control Sample Performance The performance of standard reference material (SRM or standards) is evaluated using the criterion that ninety percent of the results must fall within ±10 percent of the accepted value for the assay process to be in control. Results are presented using statistical process control charts, an example of which is provided in Figure 11.1. In the chart the average value appears as a black horizontal line (middle line) and the certified value of the standard is listed near the average value line. Control limits at ±10 percent of the

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accepted value appear as red lines above and below the black line showing the accepted value. The assay values for the standard appear on the chart as green triangles.

11.4.2.1 Copper

Results for the copper SRM fall within the control limits above the prescribed rate over the various field programs. The results shown for STD03 during the 2010-2011 field season (Figure 11.1) are typical.

Los Azules Copper Assay Quality Control

STD03

0.36

UCL = 0.345 0.34

0.32 AVG = 0.3210 Cu %

0.30 Accepted value = .3135

LCL = 0.282 0.28 0 10 20 30

Sequence Number

Figure 11.1: Example SRM Control Chart from 2010 Drilling (Sim 2013) The performance of copper standards was generally similar across the drilling from 2007 through the 2012 – 2013 field seasons with exceptions as outlined. In the 2009 – 2010 field season, hole 1049 produced significant QC errors which were addressed by remedial assaying for that hole. In the 2010 – 2011 field season standards indicated copper values were consistently higher than expected. The errors were addressed by a program of re-assaying in 2012. Original values in the database were replaced by the 2012 re-assay results which were validated by control values. The 2011 – 2012 and 2012-2013 field seasons assaying produced no significant QC errors.

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11.4.2.2 Gold and Molybdenum

Due to the generally low values of gold and molybdenum, control using standards of comparable values is not possible due to the lack of precision in the assay process; however, duplicates show no indication of systematic assay problems in either gold or molybdenum.

11.4.3 Blank Sample Performance In the field seasons prior to 2009, the blank material was discovered to be mineralized. This generated a significant number of false positive results. All out of control results during this period were subjected to remedial procedures. No evidence of contamination from sample to sample was detected by the remedial work.

In the 2009-2010 and subsequent field seasons, the blank was silica sand. There were no out of control results for the blank samples submitted during these drilling seasons.

11.4.4 Course Duplicate Sample Performance Duplicate samples of coarse reject material are assayed to check the sample preparation protocol. If the protocol is adequate, ninety percent of the duplicate pairs of assays should fall within ±30 percent of each other. During all field seasons, coarse reject copper duplicates fell within control limits. Gold duplicates fell within the control limits at above the prescribed rate.

11.4.5 Pulp Duplicate Sample Performance Duplicate samples of pulp (or the final sample product) material are assayed as another check on assay accuracy and precision. For all seasons where duplicates were taken, copper duplicates from pulp material fell within control limits above the prescribed rate of 90 percent within ±10 percent. Differences with gold duplicates in 2009 – 2010 have been addressed. There are no other outstanding issues with pulp duplicate performance.

11.5 Conclusions Results from the control sample analysis indicate that the copper, gold, and molybdenum assay processes are under sufficient control to produce reliable sample assay data for resource estimation and release of drill hole assay results. Inadequate standards from early field seasons were eliminated. Material that was assumed to be blank but contained low copper values was replaced.

All past deficiencies in the QC program have been addressed. The Los Azules sampling and assaying program appears to be producing sample information that meets industry standards for copper, gold, and molybdenum accuracy and reliability. The assay results are sufficiently accurate and precise for use in resource estimation and the release of drill hole results on a hole by hole basis.

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12.0 Data Verification

12.1 Verification of Geologic Data

12.1.1 Database Verification In 2008, eight holes were randomly selected and the data was sent to independent consultant Nivaldo Rojas of Rojas and Associates in Mendoza, Argentina. The contained information, including collar locations, down-hole survey data, geology codes and assay values were verified back to the original source. The collar location and directional data was traced back to the original survey sheets. The geology data was traced back to the original drill logs and the assay data was compared to the original assay certificates.

There were no errors found in the drill hole collar locations and survey data. Only two assay value errors were identified during this process. A series of differences were noted between geology codes and these “errors” were attributed to relogging of older drill holes. None of the errors identified are considered significant with respect to resource model development.

A similar manual validation was conducted as part of the June 2012 resource model update. The assay results from eight drill holes, randomly selected from the database, were compared to the original assay certificates.

Following the generation of the current resource model, the data from three randomly selected drill holes completed during the recent drilling campaign was verified back to the original sources. No significant errors were found.

12.1.2 Site Visit Validation Robert Sim visited the Los Azules site from March 30 - April 1, 2008 and again from March 21-23, 2010. During the period from January 23-25, 2012, Bruce Davis also visited the Project site. During each of these visits, a series of randomly selected drill hole intervals were reviewed and in all cases, the type and content of copper minerals observed support the assay results obtained. Sim and Davis also visited the McEwen Mining core storage facilities in Mendoza and Calingasta and similar comparisons between visual/assay copper grades were observed on a random series of drill holes. There were no discrepancies noted during this test.

During each site visit, Mr. Sim and Dr. Davis visited numerous drill site locations on the Los Azules property. The locations of these drill hole collars match the survey and topographic information in the database. Active drilling activities were also observed in several locations. The drill core handling and sampling procedures followed on the property were also observed and discussed with site personnel during the site visits. These practices follow accepted industry standards.

12.1.3 Conclusions Observations during the site visits confirm the physical presence of the drilling activities completed on the deposit. Sampling procedures have been followed according to accepted industry standards. Observations of the contained mineralogy in the rocks support the assay results and these, as described in Section 11, have been monitored through an appropriate QA/QC program.

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The results of the data verification indicate that the database is sound and reliable for the purposes of resource estimation.

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13.0 Mineral Processing and Metallurgical Testing

Preliminary metallurgical test work was conducted in 2008 to confirm the flotation response of samples taken from Los Azules and to provide scoping-level engineering design information for the processing facilities. Additional test work was conducted in 2010-2012 to further evaluate the flotation response of the sulfide material and acid leaching of oxide and low-grade sulfide materials. In turn, the engineering design is used to estimate capital and operating costs in order to make a preliminary assessment of the economic viability of the Project. The processing plant will consist of a flotation concentrator that produces a copper concentrate that will be treated by POX leaching and SX-EW to produce copper metal. The potential for recovery of copper by heap leaching was also tested with bottle roll and column leach tests.

The metallurgical tests were completed by C. H. Plenge Cia. S.A. (Plenge) in Lima, Peru. The results are presented in four reports:

 Metallurgical Investigation No. 6976-6991/7026-7027 Minera Andes Incorporated Los Azules Copper Project Metallurgical Scoping Study, July 21, 2008  Metallurgical Investigation No. 7028 Minera Andes Incorporated Los Azules Copper Project Composite No. 3, September 12, 2008  Metallurgical Investigation No. 7652-54 Minera Andes Incorporated Los Azules Copper Project Copper Gold Project, 31 March 2010  Metallurgical Investigation No. 9247-69 Minera Andes Incorporated Los Azules Copper Project Flotation Variability and Optimization, Copper Bioleaching HIPOX of Concentrate, November 30, 2012

13.1 Review of Metallurgical Test Work

13.1.1 Summary Two composite samples were tested by Plenge. The flotation response of both samples was very good. The concentrate leached well under typical pressure oxidation conditions. Leaching of oxide and low grade materials showed excellent recovery.

13.1.2 Bottle Roll and Column Leaching Tests The latest test work was done on two composites, one which was relatively high grade and the other which was relatively low grade. A total of 16 bottle roll tests and 11 column leach tests were run to determine copper recovery and acid consumption. The average copper recovery was 53.4 percent for the eight high grade bottle roll tests and 40.9 percent for the eight low grade bottle roll tests. There was a good correlation of copper extraction with acid and ferric iron concentrations in the leach solutions. Acid consumption was directly related to the acid concentration in the leach solution.

The five high grade column leach tests showed an average copper extraction of 81.9 percent with an average acid consumption of 36.5 kilograms per tonne. The average copper extraction for the six low grade column leach tests was 65.0 percent with an average acid consumption of 24.0 kilograms per tonne. For both sets of tests, the copper extraction was enhanced with higher acid and ferric concentrations in the leach solution. Acid consumption was again related to the acid concentration in the leach solution.

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The following is a summary of the column leach tests:

 Average copper extraction for all columns is 73.5 percent based on average grade of the heads and tails.  The average acid consumption for the eleven columns was 29.7 kg/t.  These results are typical for oxidized samples of primary and secondary sulfide leach materials.  Based on the bottle roll and column leach test results and typical industry experience, the copper extraction for ROM heap leaching of low grade material in six meter lifts would be 63 percent with a net acid consumption of 30 kg/t. This latest set of tests confirms the earlier test results and provides a better basis for copper extraction and acid consumption.

13.1.3 Grinding No additional data was developed during the most recent test work for grinding work index. From previous test work, the Bond Ball Mill Work Index (BMWi) was determined by Plenge to be 12.5 to 13.7 kilowatt hours per tonne. The values for this work index suggest a mineralized material of medium hardness.

13.1.4 Flotation

13.1.4.1 Baseline Variability

The variability testing utilized the same flow sheet as the earlier established primary and supergene flotation testing locked cycle tests. The variability testing was conducted to determine the response of metallurgical samples out of the representative range by host rock, grade, distribution and depth.

The primary variability composite average grade for the concentrate for the 10 included samples was 27.1% copper, 83 g/t silver, 3.59 g/t gold, 24.1% iron, 31.6% sulfur, and 15% insoluble. The mean copper, silver, and gold recoveries were 84%, 60% and 47% respectively. The average primary grind size was P80 =141µm and the regrind size was P80 = 29 µm. The concentrate grade was lower than that from the earlier representative primary composite as the regrind was coarser, increasing the gangue dilution.

The supergene variability composite average grade for the concentrate for the 13 included samples was 30.6% copper, 49.3 g/t silver, 1.72 g/t gold, 27% iron, 35.5% sulfur, and 5.1% insoluble. The mean copper, silver, and gold recoveries were 80%, 50%, and 40% respectively. The supergene grind size was P80 = 152 µm and the regrind was P80 = 21 µm.

13.1.4.2 Locked-Cycle Tests

During the recent test work, locked-cycle tests were performed on primary and supergene material. Locked-cycle tests were previously performed on Composites No. 1, 2, and 3. The results of the locked- cycle tests are shown in Table 13.1.

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Table 13.1 Locked-Cycle Test Work Results Concentrate Assay Metal Recoveries (%) Composite Copper (%) Silver (g/t) Gold (g/t) Copper Silver Gold Primary 32 97 3.8 93.2 69 63 Supergene 29 29 3.6 89.3 54 66 1 – Strong Enrichment 35 101 2.7 94.1 70 56 2 – Weak Enrichment 31 80 3.9 94.7 62 66 Sample 3 – High-grade Primary Sulfide 34 84 2.4 95.1 83 74

The most recent results were factored for use in the process design to relate laboratory results to expected plant performance and weighted based on the anticipated quantities of each material type. The final concentrate copper grade is estimated to be 29.5 percent copper and the copper recovery is estimated at 90.7 percent. Future test work should optimize both copper grade and recovery.

13.1.5 Flotation Concentrate Leach The copper extractions by pressure oxidation from the primary and supergene concentrates were excellent at 99% and 98% respectively. The oxidation of sulfides ranges from 60% to 97%, and its effect on copper extraction was not measurable.

The average gold extraction by cyanidation of the autoclave residue is 72% and is correlated to the amount of sulfur oxidation. The residue weight loss is correlated to the acid added to autoclave feed. The average autoclave conditions were 225°C, 75 psig oxygen overpressure, 9% solids, and 70 minute retention time.

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14.0 Mineral Resource Estimates

14.1 Introduction This mineral resource estimate was prepared under the direction of Robert Sim, PGeo, with the assistance of Bruce Davis, FAusIMM. Mr. Sim is the independent Qualified Person (QP) within the requirements of NI 43-101 for the purposes of mineral resource estimates contained in this report. Estimations are made from three-dimensional block models based on geostatistical applications using commercial mine planning software (MineSight® v7.8). The Project limits are based in the UTM coordinate system using a nominal block size of 20 x 20 x 15 meters (L x W x H). The majority of drilling was conducted using vertical holes, with the exception of a few rare-angled holes in areas where surface access wasn’t possible. Drill holes are generally spaced between 150 meter and 400 meter intervals over the main area of the resource; the resource measures approximately 4,000 meters north-south by 1,500 meters west-east. A geologic interpretation of pertinent domains was conducted using a series of vertical west-east-oriented cross sections spaced at 150 meters intervals throughout the deposit.

The resource estimate was generated using drill hole sample assay results and the interpretation of a geologic model that relates to the spatial distribution of copper in the deposit. Interpolation characteristics were defined based on the geology, drill hole spacing, and geostatistical analysis of the data. In addition to copper, a series of other elements were estimated in the resource model, these include: gold, silver, molybdenum, zinc, lead, sulfur, and arsenic. The resources were classified according to their proximity to copper sample data locations and were reported, as required by NI 43-101, according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November, 2010).

14.2 Available Data On April 15, 2013, McEwen Mining provided the drill hole database in an MS Excel® spreadsheet file that contained collar data, assay results, geologic information, and geotechnical data for the final 12 drill holes completed during the 2012-2013 program for a total of 22 holes completed during the field season. Note: Problems were encountered in two of these holes and they were re-drilled in order to reach the final planned depth. The data for these newer drill holes were formatted and appended to the previous MineSight® database. The location of the new drill holes, in relation to previous drilling, is shown in Figure 14.1. The majority of the new drill holes are located on the southwestern part of the deposit area where deep-seated mineralization has been found.

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Figure 14.1: Isometric View Showing Copper Grades and Location of New Drill Holes (Sim 2013) There are a total of 185 drill holes in the database with a total length of 59,518 meters. Twenty holes have no sample results because either problems were encountered during drilling and they had to be terminated and re-drilled, or they were drilled for geotechnical or condemnation purposes. Twenty-two holes in the database were exploratory in nature, and tested for satellite deposits. Therefore, there are a total of 143 drill holes located in the vicinity of the Los Azules deposit and the sampling results and geologic information from these holes have been used to generate the resource model. Figure 14.1 shows the distribution of these drill holes.

There are 28 rotary (RC) holes in the database that were drilled before McEwen Mining was involved in the Project. Only five of these holes are located in the main mineralized area of the deposit. The geologic and assay results from these RC holes are similar to proximal core holes and, as a result, they were included in the development of the resource model, without modifications or adjustments.

Drill holes are spaced at intervals of between 150 meter and 400 meter. Since 2009, efforts have been made to delineate the deposit on a nominal 150 meters grid. This was hampered by local topography and the presence of a series of vegas (small wetlands) in the northern area of the deposit. The majority of holes are vertically oriented, but some are inclined at angles between -82° and -50°, with various azimuths.

There are 27,688 individual samples in the database with sample intervals that range between 0.1 meters and 12.55 meters long, with an average length of 1.82 meters. Since 2010, McEwen Mining has

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standardized samples over 2-meter intervals, except where dictated by geologic contacts. A full 40 element assay suite was run during recent drilling programs, and includes: gold, silver, arsenic, molybdenum, lead, zinc, and sulfur; previous programs analyzed only select elements. Several of these elements (arsenic, lead, zinc, and sulfur) have not been verified with certified standards, but they were included in the resource model to provide additional insight into the nature of the deposit.

Portions of 120 drill holes have also been analyzed for sequential copper concentrations. The cyanide soluble copper grades provide useful information to locate the base of the supergene horizon. Acid soluble copper percent and cyanide soluble copper percent grades have not been validated with a QA/QC program.

The sample results that were originally defined as below the detection limit in the database (total copper < 0.01) were entered at one-half the detection limit value.

A basic statistical summary of assay data information is summarized in Table 14.1.

Table 14.1 Summary of Assay Data Total Element Samples Minimum Maximum Mean Std.Dev. length (m) Copper (%) 27,688 50416.1 0 12.89 0.27 0.363 Gold (g/t) 27,621 50284.1 0 9.630 0.045 0.1504 Silver (g/t) 27,544 50052.3 0.05 159.10 1.528 3.342 Molybdenum (%) 27,688 50416.1 0 0.379 0.003 0.0068 Arsenic (%) 27,545 50053.3 0 1.343 0.009 0.0273 Lead (%) 26,626 48220.2 0 7.52 0.011 0.064 Zinc (%) 26,626 48220.2 0 25.2 0.027 0.175 AS Copper (%) 16,683 33747.9 0.001 0.94 0.026 0.038 CS Copper (%) 16,683 33747.9 0 7.15 0.137 0.263 Sulfur (%) 8,715 17680.3 0.01 18.4 1.04 1.127

Locally, drill hole recoveries were poor due to blocky ground conditions that are common in the area. The average core recovery for the sample intervals in the supergene and primary zones is 88%, with only approximately 6% of sample intervals with recoveries below 50%. There is no correlation between copper grade and recovery. There have been no adjustments to or exclusions of data in relation to recoveries prior to block grade estimations.

The geologic information is derived from observations during logging and includes lithology, alteration type, and mineral zone (MinZone) type.

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14.3 Geologic Model, Domains and Coding Geology at Los Azules comprises Mesozoic volcanic rocks intruded by a Miocene diorite stock which is intruded by a sub-parallel suite of diorite-dacite dikes along a major north-northwest-striking fault zone. Porphyry copper-style mineralization and hydrothermal alteration are spatially, temporally, and genetically related to the dikes. In many respects, the Los Azules deposit is a classic, Andean-style porphyry copper deposit. Mineralization consists of pyrite, chalcopyrite, and bornite in the primary or hypogene zone, and secondary chalcocite with subsidiary covellite in the secondary or supergene enrichment blanket that overlies the hypogene mineralization.

The supergene enrichment zone was produced by the circulation of acidic, meteoric waters that were created by the breakdown of pyrite. These acidic solutions circulated through the upper oxidized portions of the original deposit leaching out the copper; the copper was re-deposited at lower levels, superimposed on, and replaced by the original hypogene mineralization. The secondary enrichment zone underlies a barren leached zone, and the primary hypogene mineralization is present below the secondary enrichment zone.

Separate domains have been interpreted for Overburden (OVB), Leach (LX), Supergene (SS) and Primary (PR) Zones using a combination of mineral zone logging (i.e., a visual observation of enrichment minerals, such as chalcocite and/or covellite), and assay grades. In many areas, the base of the SS zone is defined by intervals with greater than 50 percent cyanide soluble copper; the ratio of cyanide soluble copper (CSCu) divided by total copper (CuT) is expressed as a percentage. Soluble copper assay data are not present in all drill holes and, in these cases, visual observation information is used. Drill hole intervals below the SS domain have been coded as the PR zone. These MinZone domains are summarized in Table 14.2 and are shown in Figure 14.2.

Table 14.2 Mineral Zone Domains and Coding MinZone Code Domain Comments Number Overburden (OVB) 1 Surface soil and gravels. Rock in which the majority of sulfide mineralization has been Leach (LX) 2 leached. Zones where enrichment mineralogy is present (chalcocite Supergene (SS) 3 and/or covellite); generally > 50% cyanide soluble copper. Hypogene sulfide mineralogy (pyrite, chalcopyrite, and Primary (PR) 4 bornite).

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Figure 14.2: Distribution of MinZone Domains (Sim 2013)

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The OVB zone is thickest in the valley floor and thinnest where the slopes steepen to the west and east. The OVB zone thicknesses are variable and peak at 100 meters in some locations, with an average thickness of approximately 60 meters above the area of the deposit containing significant copper mineralization. The LX zone is also locally variable in thickness from non-existent in some drill holes to almost 200 meters in others, with an average thickness of approximately 40 meters above the deposit. The underlying SS zone is also somewhat variable in thickness from zero to over 250 meters, with an average thickness of approximately 70 meters. At the northern end of the deposit, visible chalcocite is present to depths of almost 600 meters below surface. This deeper, secondary-type mineralization is patchy in nature and may be the result of remobilization along structural features, or it may be primary in nature.

McEwen Mining recorded the distribution of alteration assemblages encountered in drilling when they logged the drill core. The distribution is somewhat erratic, but there is generally some degree of quartz- sericite alteration with lesser biotite zones.

Varying alteration facies, present in the deposit area, tend to occur as diffuse, overlapping zones which are not specifically related to the type or content of mineralization present. Interpretation of the individual (wireframe) domains that represent alteration zones was not conducted as part of the resource model development.

14.4 Compositing Compositing the drill hole samples helps standardize the database for further statistical evaluation. This step eliminates any effect that inconsistent sample lengths might have on the data.

To retain the original characteristics of the underlying data, a composite length was selected that reflects the average original sample length. The generation of longer composites can result in some degree of smoothing which could mask certain features of the data. Sample intervals are relatively small in the database. Twenty-four percent of the samples are exactly 1 meter, and 70 percent of the samples are taken at 2 meter intervals. A standard 2 meter composite sample length was generated for statistical evaluation and was used for grade estimations in the block model.

Drill hole composites are length-weighted and were generated down-the-hole; this means that composites begin at the top of each hole and are generated at 2 meters intervals down the length of the hole. The contacts of the MinZone domains were honored during compositing of drill holes. Several holes were randomly selected and the composited values were checked for accuracy. No errors were found.

14.5 Exploratory Data Analysis Exploratory data analysis (EDA) involves statistically summarizing the database to quantify the characteristics of the data. The main purpose of EDA is to determine if there is any evidence of spatial distinctions in grade; if this occurs, a separation and isolation of domains during interpolation may be necessary. An unwanted mixing of data is prevented by applying separate domains during interpolation: the result is a grade model that better reflects the unique properties of the deposit. However, applying domain boundaries in areas where the data are not statistically unique may impose a bias in the distribution of grades in the model.

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A domain boundary, which segregates the data during interpolation, is typically applied if the average grade in one domain is significantly different from that of another domain. A boundary may also be applied when there is evidence that a significant change in the grade distribution exists across the contact.

14.5.1 Basic Statistics by Domain The basic statistics for the distribution of copper were generated by lithology type, alteration type and by MinZone type.

The distribution of copper by rock type (Figure 14.3) shows similar properties in the three main rock domains (diorite, porphyry and breccia). The remaining rock types, which contain an insignificant number of samples, tend to be much lower in grade. Similarly, grade distributions are not related to the type of alteration present, as shown in Figure 14.4. Figure 14.5 shows the distribution of copper related to the MinZone type with the supergene zone showing a higher grade than the primary zone. The leach zone contains very little copper.

Figure 14.3: Boxplot of Copper by Lithology Type (Sim 2013)

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Figure 14.4: Boxplot of Copper by Alteration Type (Sim 2013)

Figure 14.5: Boxplot of Copper by MinZone Type (Sim 2013) Additional boxplots were generated for other elements and few distinct trends were apparent. The distribution of sulfur follows similar trends to those exhibited for total copper.

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14.5.2 Contact Profiles Contact profiles evaluate the nature of grade trends between two domains: they graphically display the average grades at increasing distances from the contact boundary. Those contact profiles that show a marked difference in grade across a domain boundary indicate that the two datasets should be isolated during interpolation. Conversely, if a more gradual change in grade occurs across a contact, the introduction of a hard boundary (e.g., segregation during interpolation) may result in a much different trend in the grade model; in this case, the change in grade between domains in the model is often more abrupt than the trends seen in the raw data. Finally, a flat contact profile indicates no grade changes across the boundary; in this case, hard or soft domain boundaries will produce similar results in the model.

Contact profiles were generated to evaluate the change in copper grade across the main MinZone domain boundaries. Figure 14.6 shows a distinct change in grade between the leach and supergene zone domains. There is a relatively distinct, but much less significant, drop in copper grades between the supergene and primary zone domains, as shown in Figure 14.7.

Figure 14.6: Contact Profile of Copper Between Leach and Supergene Domains (Sim 2013)

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Figure 14.7: Contact Profile of Copper Between Supergene and Primary Domains (Sim 2013)

14.5.3 Conclusions and Modeling Implications The EDA results indicate that there are no distinct properties in the distribution of copper based on the rock type or alteration facies. There are significant differences in the distribution of copper between the leach and supergene zone domains. Differences in the distribution of copper between supergene and primary zone domains are not as apparent, but are locally very apparent within the deposit; as a result, all MinZone domains are segregated during estimations of copper distribution in the block model. Similar hard boundary limitations are applied during estimations for sulfur. All other modeled elements do not show distinct distributions by domain and, as a result, limitations were not required during modeling.

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The interpolation domains for copper are summarized in Table 14.3.

Table 14.3 Summary of Interpolation Domains Element Domain Application Copper LX, SS and PR hard boundary domains Sulfur, ASCu and CSCu LX, SS and PR hard boundary domains Au, Ag, Mo, As, Pb and Zn No internal domains required

14.6 Bulk Density Data Measurements for bulk density were conducted by McEwen Mining personnel on a series of drill core samples using the water displacement method. Solid pieces of drill core, measuring 10 centimeters to 15 centimeters in length, were sealed with paraffin wax and weighed in air and then weighed again under water.

The bulk density is calculated using the following formula:

Bulk density = weight in air / (weight in air – weight in water)

Before 2012, all samples selected were coated in paraffin wax for bulk density determinations. Studies conducted at the Mining Research Institute of Argentina indicated that the rocks found at Los Azules were not porous and, therefore, they were not required to be sealed in wax during the procedure. Therefore, a wax seal was not used for any of the density measurements taken during the 2012 and 2013 field seasons. Observations during site visits confirm that the competent rocks used for bulk density measurements do not show any visual signs of porosity and, therefore, it is likely that sealed versus non- sealed measurements would produce similar results.

A total of 915 samples were tested for bulk density or specific gravity (SG) with values that ranged between 1.44 t/m3 and 3.60 t/m3, with a mean of 2.54 t/m3. Average densities were determined by the MinZone domains and the following averages were assigned to the following blocks in the model:

Overburden Zone 2.00 t/m3

Leach Zone 2.44 t/m3

Supergene Zone 2.47 t/m3

Primary Zone 2.57 t/m3

These density averages are considered to be appropriate for calculating resource tonnages for the Los Azules deposit.

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14.7 Evaluation of Outlier Grades Before modeling, histograms and probability plots were reviewed for all elements. The physical location of potential outlier values were reviewed in drilling and it was found that in most cases these anomalous grades were not extreme and they tended to occur in areas where there were reasonable sample densities, and the neighboring values also tended to be high. As a result, it was decided that the effects of these samples could be effectively controlled through the application of outlier limitations. During interpolation, those samples above the defined threshold limit would be restricted to a maximum influence distance of 75 meters.

The various threshold limits for all elements are listed in Table 14.4; this table also includes the model’s metal reduction as a result of these controls. Metal lost due to outlier limitations is estimated in blocks within the Indicated and Inferred categories in the supergene and primary zone domains.

Table 14.4 Summary of Outlier Grade Controls % metal Element / Domain Threshold lost in model (*) Copper (Total) Leach 1% Supergene 3% -0.7% Primary 2.5% Gold 2 g/t -3.8% Silver 40 g/t -3.9% Molybdenum 0.15% -3.4% Arsenic 0.4% -4.2% Lead 0.8% -5.7% Zinc 0.8% -10.8% Sulfur Leach 2% Supergene 7% -3.0% Primary 10%

*Calculated in combined SS and PR Zones. Note: Outlier limitation to maximum distance of 70 meters during interpolation.

14.8 Variography The degree of spatial variability in a mineral deposit depends on both the distance and direction between points of comparison. Typically, the variability between samples increases as the distance between those samples increases. If the degree of variability is related to the direction of comparison, then the deposit is said to exhibit anisotropic tendencies which can be summarized with the search ellipse. The semi-variogram is a common function used to measure the spatial variability within a deposit.

The components of the variogram include the nugget, the sill, and the range. Often samples compared over very short distances, even samples compared from the same location, show some degree of variability. As a result, the curve of the variogram often begins at some point on the y-axis above the origin: this point is

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called the nugget. The nugget is a measure of not only the natural variability of the data over very short distances, but also a measure of the variability which can be introduced due to errors during sample collection, preparation, and the assay process.

The amount of variability between samples typically increases as the distance between the samples increases. Eventually, the degree of variability between samples reaches a constant, maximum value; this is called the sill, and the distance between samples at which this occurs is called the range.

The spatial evaluation of the data in this report was conducted using a correlogram rather than the traditional variogram. The correlogram is normalized to the variance of the data and is less sensitive to outlier values, generally giving better results.

Variograms were generated using the commercial software package SAGE 2001© (Isaacks & Co.). Multidirectional variograms were generated for composited copper samples located within the combined supergene and primary domains. The results for copper are summarized in Table 14.5.

Table 14.5 Variogram Parameters - Copper 1st Structure 2nd Structure Range Range Domain Nugget S1 S2 Azimuth Dip Azimuth Dip (m) (m) 0.100 0.682 0.218 79 337 43 2232 200 72 Leach 77 75 77 75 8 1533 Spherical 9 173 9 173 46 338 0.250 0.446 0.304 234 35 -4 1951 337 -5 Supergene 61 124 15 412 17 83 Spherical 54 320 75 303 68 -4 0.200 0.468 0.332 241 8 343 -25 343 -25 Primary 212 59 17 464 335 65 Spherical 14 323 19 280 71 3

(Correlograms conducted on 2-meter drill hole composite data)

14.9 Model Setup and Limits A block model was initialized in MineSight® and the dimensions are defined in Table 14.6. The extents of the block model are represented by the purple rectangle shown in Figure 14.2. The selection of a nominal block size measuring 20 x 20 x 15 meters (L x W x H) is considered appropriate with respect to the current drill hole spacing, and the selective mining unit (SMU) size is typical of an operation of this type and scale.

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Table 14.6 Block Model Limits Block size Direction Minimum Maximum # Blocks (m) East 2380800 2385800 20 250 North 6556400 6562300 20 295 Elevation 2605 4390 15 119

Blocks in the model were coded on a majority basis with the MinZone domains. During this stage, blocks along a domain boundary are coded if more than 50 percent of the block occurs within the boundaries of that domain.

The proportion of blocks that occur below the topographic surface is also calculated and stored within the model as individual percentage items. These values are used as weighting factors to determine the in-situ resources for the deposit.

14.10 Interpolation Parameters The block model grades for all elements are estimated using Ordinary Kriging (OK). The results of the OK estimation are compared with the Hermitian Polynomial Change of Support method, also referred to as the Discrete Gaussian Correction. This method is described in greater detail in Section 14.11 (Validation).

The Los Azules OK model is generated with a relatively small number of samples to match the change of support, or Hermitian Correction (Herco) grade distribution. This approach reduces the amount of smoothing or averaging in the model and, while there may be some uncertainty on a localized scale, this approach produces a reliable estimate of the recoverable grades and tonnages for the overall deposit.

All grade estimates use length-weighted composite drill hole sample data. Hard boundaries are applied to the MinZone domains during the interpolation of total copper and sulfur grades. The interpolation parameters are summarized by domain in Table 14.7.

Table 14.7 Interpolation Parameters Element/ Search Ellipse Range (m) # Composites Domain Other X Y Z Min/block Max/block Max/hole Copper Leach 1000 1000 100 7 24 8 1 DH per octant Supergene 1000 1000 100 7 80 20 1 DH per octant Primary 1000 1000 100 7 60 15 1 DH per octant Gold 1000 1000 100 10 100 25 1 DH per octant Silver 1000 1000 100 10 100 25 1 DH per octant Molybdenum 1000 1000 100 8 60 15 1 DH per octant Arsenic 1000 1000 100 8 80 20 1 DH per octant Lead 1000 1000 100 10 30 10 1 DH per octant Zinc 1000 1000 100 10 40 10 1 DH per octant

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Table 14.7 Interpolation Parameters Element/ Search Ellipse Range (m) # Composites Domain Other X Y Z Min/block Max/block Max/hole Sulfur Leach 1000 1000 100 5 21 7 1 DH per octant Supergene 1000 1000 100 5 60 15 1 DH per octant Primary 1000 1000 100 5 100 25 1 DH per octant

14.11 Validation The results of the modeling process were validated through several methods. These methods included a thorough visual review of the model grades in relation to the underlying drill hole sample grades; comparisons with the change of support model; comparisons with other estimation methods; and grade distribution comparisons using swath plots.

14.11.1 Visual Inspection A detailed visual inspection of the block model was conducted in both the section and plan to ensure the desired results following interpolation. This inspection confirmed that blocks within the respective domains and below the topographic surface were properly coded. To ensure that there is proper representation in the model, the inspection also included a comparison of the distribution of block grades relative to the drill hole samples.

14.11.2 Model Checks for Change Support The relative degree of smoothing in the block model estimates was evaluated using the Discrete Gaussian Correction; it is also referred to as the Hermitian Polynomial Change of Support method. (Journel and Huijbregts, Mining Geostatistics, 1978). With this method, the distribution of the hypothetical block grades can be directly compared to the estimated OK model through the use of pseudo-grade/tonnage curves. Adjustments are made to the block model interpolation parameters until an acceptable match is made with the Herco distribution. In general, the estimated model should be slightly higher in tonnage and slightly lower in grade when compared to the Herco distribution at the projected cut-off grade. These differences account for selectivity and other potential ore-handling issues which commonly occur during mining.

The Herco distribution is derived from the declustered composite grades which were adjusted to account for the change in support, moving from smaller drill hole composite samples to the larger blocks in the model. The transformation results in a less-skewed distribution but with the same mean as the original declustered samples.

Pseudo grade/tonnage plots were generated for all models and all show the desired degree of correlation between the Herco results and the OK models. Examples for copper in the supergene and primary zones are shown in Figure 14.8.

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Figure 14.8: Change of Support Curves for Copper in Supergene and Primary Zones (Sim 2013)

14.11.3 Comparison of Interpolation Methods For comparison purposes, additional models have been generated using both the inverse distance- weighted (ID) and nearest neighbor (NN) interpolation methods; the ID estimate to the power of two (ID2) and the NN model are created using data composited to 15 meter intervals. The results of these models are compared to the OK models at a series of cut-off grades using a grade/tonnage plot (Figure 14.9). Overall, there is very good correlation between these models. Reproduction of the model using these different methods increases the overall confidence in the resource.

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Figure 14.9: Grade-Tonnage Comparison of OK, ID and NN Models (Sim 2013)

14.11.4 Swath Plots (Drift Analysis) A swath plot is a graphical display of the grade distribution derived from a series of bands, or swaths, generated in several directions throughout the deposit. Using the swath plot, grade variations from the OK model are compared to the distribution derived from the declustered NN grade model.

On a local scale, the NN model does not provide reliable estimations of grade but, on a much larger scale, it represents an unbiased estimation of the grade distribution based on the underlying data. Therefore, if the OK model is unbiased, the grade trends may show local fluctuations on a swath plot but the overall trend should be similar to the NN distribution of grade.

Swath plots have been generated in three orthogonal directions for distribution of all modeled elements. An example is shown in Figure 14.10. There is good correspondence between the models in all of these areas. The degree of smoothing in the OK model is evident in the peaks and valleys shown in the swath plots.

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Figure 14.10: East-West Swath Plots of Copper in Supergene and Primary Zones (Sim 2013)

14.12 Resource Classification The mineral resources at the Los Azules deposit have been classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (November, 2010). Based on a drill hole spacing study conducted in 2009, it was found that drilling on a nominal grid spacing of 150 meters is required to delineate resources in the Indicated category. Blocks in the model are initially defined based on this strict requirement and the results are visually reviewed. Areas that show potential for inclusion in the Indicated category must exhibit a high degree of consistency and confidence in the distribution of thickness and copper grade. Ultimately, these areas are defined using manually generated three-dimensional wireframe envelopes that are of reasonable size; are defined by sufficient drilling; and, exhibit the degree of confidence necessary to be included in the Indicated category. The extent and location of areas of the deposit considered to be in the Indicated category are shown in Figure 14.11. Note that there are additional areas where drilling is on approximately 150 meter spacing, but, at this stage, these areas are too small and isolated and require additional holes to be upgraded from an Inferred to an Indicated status. The classification parameters for Inferred resources are defined in relation to their distance to sample data and are intended to encompass zones of reasonably continuous mineralization.

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Figure 14.11: Areas of Supergene and Primary Zones Defined in the Indicated Category (Sim 2013) Mineral resources are limited to within the supergene and primary zones. The leach domain, by definition, contains little to no potentially economic copper mineralization. Resource categories are defined as follows:

Indicated Mineral Resources – Area delineated by drilling on 150 meter spacing that exhibits a relatively high degree of consistency in the nature of the mineralization.

Inferred Mineral Resources – Blocks in the supergene and primary domains which are a maximum distance of 200 meters from a drill hole.

The distance limit for Inferred resources was tested using an indicator variogram generated at a grade threshold of 0.30 percent copper (i.e. equivalent to the typical cut-off grade of a deposit of this type, size and location.) The ranges in this indicator variogram all exceed a distance of 200 meters.

14.13 Mineral Resources The estimated mineral resource for the Los Azules deposit is shown in Table 14.8. The extent and location of these resources are shown in Figure 14.12. Mineral resources are determined using a base case cut-off grade of 0.35% copper which is based on assumptions from operations with similar characteristics, scale, and location.

To ensure the reported resource exhibits reasonable prospects for economic extraction, the mineral resource is limited within a pit shell generated around copper grades in blocks classified in the Indicated and Inferred categories. Generalized technical and economic parameters include a copper price of

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$2.75/lb, site operating costs of $1.00/t (mining), $4.25/t (processing, plus general and administration), a pit slope of 34°, and 100% mining and metallurgical recoveries. This test indicates that some of the deeper mineralization may not be economic due to the increased waste stripping requirements. It is important to recognize that these discussions of surface mining parameters are used solely to test the “reasonable prospects for economic extraction,” and do not represent an attempt to estimate mineral reserves. There are no mineral reserves calculated for the Project. These preliminary evaluations are used to prepare a Mineral Resource Statement and to select appropriate reporting assumptions.

Table 14.8 Estimate of Mineral Resources for Los Azules Deposit (0.35% Cu Cut-off) Average Grade Contained Metal Cu Au Mo Ag Cu Au Mo Ag Mtonnes % g/t % g/t Blbs Moz Mlbs Moz Indicated 389 0.63 0.07 0.003 1.8 5.39 0.84 25.7 22.9 Inferred 1,397 0.46 0.06 0.004 1.9 14.30 2.58 114.0 85.8 Note: The mineral resources do not have demonstrated economic viability

Figure 14.12: Extent of Base Case Resources by Class (Sim 2013) To provide information regarding the sensitivity of this resource estimation, the mineral inventory contained within the deposits is shown at a series of copper percent cut-off thresholds in Table 14.9.

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Table 14.9 Sensitivity of Mineral Resources Average Grade Contained Metal Cut- off Cu Au Mo Ag Cu Au Mo Ag Mtonnes Grade % g/t % g/t Blbs Moz Mlbs Moz (Cu%) Indicated 0.15 627 0.49 0.06 0.003 1.7 6.74 1.13 38.7 34.9 0.2 584 0.51 0.06 0.003 1.8 6.57 1.08 36.0 32.8 0.25 523 0.54 0.06 0.003 1.8 6.27 1.02 32.3 29.7 0.3 450 0.59 0.06 0.003 1.8 5.83 0.92 28.8 25.9 0.35 389 0.63 0.07 0.003 1.8 5.39 0.84 25.7 22.9 0.4 338 0.67 0.07 0.003 1.9 4.97 0.76 22.4 20.2 0.45 293 0.70 0.07 0.003 1.9 4.55 0.68 20.0 17.7 0.5 253 0.74 0.07 0.003 1.9 4.13 0.60 17.9 15.5 0.55 217 0.78 0.07 0.003 1.9 3.72 0.52 15.3 13.4 0.6 184 0.81 0.08 0.003 1.9 3.29 0.45 13.0 11.3 0.65 151 0.85 0.08 0.003 1.9 2.84 0.38 11.0 9.2 0.7 120 0.90 0.08 0.003 1.9 2.38 0.30 8.7 7.2 Inferred 0.15 4,141 0.32 0.05 0.003 1.6 29.47 6.02 292.1 214.3 0.2 3,583 0.35 0.05 0.003 1.7 27.32 5.43 260.7 190.1 0.25 2,785 0.38 0.05 0.004 1.7 23.36 4.46 214.9 154.9 0.3 2,016 0.42 0.05 0.004 1.8 18.72 3.46 160.0 118.0 0.35 1,397 0.46 0.06 0.004 1.9 14.30 2.58 114.0 85.8 0.4 910 0.51 0.06 0.004 2.0 10.30 1.79 76.2 58.5 0.45 576 0.57 0.06 0.004 2.1 7.18 1.20 49.5 38.1 0.5 360 0.62 0.07 0.004 2.1 4.93 0.79 31.7 24.1 0.55 233 0.68 0.07 0.004 2.1 3.47 0.54 21.6 15.8 0.6 157 0.73 0.08 0.004 2.1 2.52 0.39 14.9 10.8 0.65 110 0.77 0.08 0.004 2.2 1.87 0.28 10.7 7.7 0.7 76 0.81 0.08 0.005 2.2 1.36 0.20 7.5 5.5 Note: The mineral resources do not have demonstrated economic viability. The base cut-off grade of 0.35% Cu is highlighted in this table.

The average values of the additional elements included in the resource model are shown in Table 14.10.

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Table 14.10 Mineral Resource Including Additional Modeled Elements (0.35% Cu cut-off) Cu Au Mo Ag As Pb Zn S Mtonnes % g/t % g/t % % % % Indicated 389 0.63 0.07 0.003 1.8 0.007 0.01 0.03 1.00 Inferred 1,397 0.46 0.06 0.004 1.9 0.007 0.01 0.02 1.22 Note: The mineral resources do not have demonstrated economic viability

The estimated base case mineral resource listed by material type is shown in Table 14.11.

Table 14.11 Estimate of Mineral Resources by Type (0.35% Cu cut-off) Average Grade Contained Metal Cu Au Mo Ag Cu Au Mo Ag Type Mtonnes % g/t % g/t Blbs Moz Mlbs Moz Indicated Supergene 262 0.70 0.07 0.003 1.8 4.04 0.58 24.9 14.7 Primary 128 0.48 0.06 0.003 2.0 1.35 0.26 27.4 8.1 Inferred Supergene 293 0.54 0.06 0.003 1.7 3.51 0.56 95.5 16.0 Primary 1,104 0.44 0.06 0.004 2.0 10.79 2.02 120.1 69.9 Note: The mineral resources do not have demonstrated economic viability

14.14 Comparison with the Previous Resource Estimate The previous resource model for the Los Azules deposit was produced in January 2013. Table 14.12 compares the new resource estimate with the results from January 2013 at the base case cut-off grade of 0.35% Cu.

Table 14.12 Comparison with Previous Resource Average Grade Date Cu Au Mo Ag Mtonnes % g/t % g/t Indicated April 2013 389 0.63 0.07 0.003 1.8 January 2013 310 0.65 0.07 0.003 1.8 Relative Difference +79 Mt -3% - - - Inferred April 2013 1,397 0.46 0.06 0.004 1.9 January 2013 1,302 0.49 0.06 0.004 2.0 Relative Difference +95 Mt -6% - - -5% Note: Apparent discrepancies in percentages are due to rounding in grade or tonnage figures

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Additional drilling has resulted in a minor increase in the amount of resources in both the Indicated and Inferred categories. The additional tonnage is lower grade material, reducing the overall average grade of the resource.

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15.0 Mineral Reserves Estimate

This section is not applicable. There are no mineral reserves.

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16.0 Mining Methods

The development plan for Los Azules envisions using conventional, large-scale, open pit mining methods. Floating cone evaluations were conducted to determine potential pit limits and the pushback development sequence. This work was based on the deposit block model described in Section 14. Five mining phases were designed and a mine production schedule was generated using fixed internal cut-offs and a milling rate of 120,000 t/d.

This PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the results, projections or estimates in this PEA will be realized. Mineral resources that are not mineral reserves have not demonstrated economic viability.

16.1 Pit Limit Evaluations Table 16.1 summarizes the recovery and economic parameters used in the floating cone analyses.

Table 16.1 Floating Cone Recovery and Economic Parameters Zone Leaching Secondary Primary Oxide + Secondary Sulfide Sulfide Sulfide Base case Cu price, $/lb $2.25 $2.25 $2.25

Cu recovery, % 63% 89% 93% Cu payable, % 100% 98% 98% Royalties (provincial royalty and federal export 8% 8% 8% duty):

Mineralized Material, $/t 2.20 1.90 1.90 Waste mining, $/t 2.00 2.00 2.00 Sustaining mine capital, $/t mined 0.40 0.40 0.40 Processing, $/t 1.00 3.63 3.63 Incremental pad capital, $/t 0.61 - - Pressure Ox, HL & SX/EW; $/lb Cu payable 0.199 0.199 0.199 General & administration, $/t processed 0.90 0.90 material -

Internal cut-off, Cu% 0.069 0.122 0.117 Breakeven cut-off, Cu% 0.161 0.188 0.180 Cross-over cut-off (Sec Sulf only), Cu% n/a 0.260 n/a

Secondary sulfides are amenable to both milling/flotation and heap leaching processes. At a copper price of $2.25 per pound, secondary sulfide material above a 0.260% Cu cut-off would generate more profit by milling. Secondary sulfides below 0.260%, but above 0.069% Cu, would be directed to the

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heap leach pads. Oxide material above a 0.069% Cu internal cut-off would be placed onto heap leach pads. Primary sulfides would be sent to the concentrator if above a 0.117% Cu internal cut-off.

Overall slope angles (OSAs) for the floating cone evaluations varied by azimuth and were derived from geotechnical recommendations and measurements from previous pit designs completed in 2008. Table 16.2 summarizes these overall slopes.

Table 16.2 Overall Slope Angles for Floating Cone Evaluations Azimuth (degrees) OSA (degrees) 0 34 40 38 85 35 145 33 180 36 220 34 250 31 320 33

A valuation subroutine was developed to compute net values for each block in the deposit model. For this PEA, mineral resources classified as indicated and inferred were allowed to contribute revenues to the floating cone evaluations. None of the mineral resources have been classified as measured.

In situ bulk densities range between 2.00 t/m3 for overburden/alluvium to 2.57 t/m3 for primary sulfides. Densities vary by rock type in the deposit model.

Table 16.3 summarizes the sensitivity of potentially economic pit limits to variable copper prices. The base case (shown in bold font) is defined by a copper of price of $2.25/lb. Price sensitivities were generally conducted in increments of $0.25/lb Cu, ranging from $1.50/lb to $3.00/lb Cu. Additional runs were made in $0.10/lb Cu increments below the $1.50 price to identify the location of the starter pit and second mining phase. A 2% per bench discount rate was applied to the net block values in the floating cone analyses, which is roughly equivalent to 12% per annum at a sinking rate of six benches per year. This discounting approximates the effects of time value of money; penalizing zones of marginal grade blocks and/or high incremental stripping ratios in order to maximize present values for the Project. In Table 16.3, PS refers to primary sulfides and SS to secondary sulfides.

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Table 16.3 Floating Cone Price Sensitivity Analysis Potential Heap Cu Cut-offs, Cu% Potential Mill Feed Waste Total Leach Strip Price SS PS Heap Ratio $/lb Ktonnes Cu% Ktonnes Cu% Ktonnes Ktonnes Mill Mill Leach 3.00 0.190 0.086 0.051 2,214,000 0.38 205,000 0.11 2,022,000 4,441,000 0.84 2.75 0.209 0.094 0.056 1,969,000 0.39 197,000 0.14 1,781,000 3,947,000 0.82 2.50 0.232 0.104 0.062 1,749,000 0.41 205,000 0.16 1,600,000 3,554,000 0.82 2.25 0.260 0.117 0.069 1,499,000 0.43 203,000 0.19 1,293,000 2,996,000 0.76 2.00 0.296 0.133 0.079 1,069,000 0.48 224,000 0.22 1,097,000 2,390,000 0.76 1.75 0.344 0.155 0.091 720,000 0.55 193,000 0.24 849,000 1,762,000 0.93 1.50 0.410 0.184 0.109 353,000 0.68 109,000 0.28 464,000 926,000 1.00 1.40 0.444 0.200 0.118 300,000 0.71 103,000 0.31 427,000 830,000 1.06 1.30 0.484 0.218 0.129 236,000 0.75 92,000 0.34 358,000 686,000 1.09 1.20 0.533 0.239 0.142 186,000 0.79 78,000 0.39 309,000 573,000 1.17 1.10 0.592 0.266 0.157 90,000 0.88 21,000 0.46 169,000 280,000 1.53 Includes resources classified as indicated and inferred.

16.2 Mining Phase/Pit Designs The ultimate pit and internal mining phases for Los Azules were designed to accommodate large-scale mining equipment operating on 15-meter benches. This equipment includes rotary blasthole drills capable of drilling holes up to 270 millimeters in diameter, 60 m3 electric shovels, a 42 m3 hydraulic shovel, a 40 m3 front-end loader, and off-highway haulage trucks with payload capacities of 363 tonnes.

Pit walls were smoothed from the basis $2.25/lb Cu floating cone shell to minimize or eliminate, where possible, noses and notches that could affect slope stability. Internal haulage ramps were included to allow for truck access to working faces on each level. The basic parameters used in the design of five mining phases, or pushbacks, are summarized in Table 16.4 below.

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Table 16.4 Basic Pit Design Parameters Parameter Unit Value Bench height m 15 Haul road width (including ditch & safety berm) m 44 Internal ramp gradient % 10 Minimum pushback width m 90

Inter-ramp and bench face angles were not changed from the previous pit designs developed in 2008. Overburden/alluvium material was limited to an inter-ramp angle (IRA) of 28°, while rock (oxide, secondary sulfide and primary sulfide) slopes were designed to an IRA of 40°. Bench face angles were constant for all rock types at 65°.

The designed ultimate pit is approximately 3800 meters long N-S and 2500 meters wide E-W at the crest. Elevations range from 3115 meters at the bottom to 4080 meters at the highest crest on the east wall. The maximum overall wall height is 965 meters. The surface area of the ultimate pit is approximately 970 hectares.

The ultimate pit design is shown in Figure 16.1. Dual ramp access is provided to the 3145 meter elevation. Grid lines in the figure are on 1000 meter intervals.

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Figure 16.1: Ultimate Pit Design (Rose 2013)

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The starter pit (Phase 1) would be located in the northern portion of the ultimate pit at approximately the intersection of the N-S and E-W valleys. Approximately 160 million tonnes of preproduction stripping would be required to reach the top of secondary sulfide mineralization in Phase 1. The Phase 1 pit is roughly 1400 meters N-S and 1500 meters E-W, with elevations ranging between 3370 and 3820 meters, for a total depth of 450 meters. The surface area of Phase 1 is approximately 195 hectares.

16.3 Mine Production Schedule The proposed development plan for Los Azules is based on a milling rate of 120,000 t/d. A nine-month concentrator ramp-up schedule is incorporated into the Year 1 production target. The basic parameters used to develop the mine production schedule are summarized in Table 16.5 below.

Table 16.5 Production Scheduling Parameters Parameters Unit Value Annual target concentrator production rates: Y1 Mt 33.27 Y2+ Mt 43.20 Daily milling rates: Y1-Y35 t 120,000 Operating hours per shift h 12 Operating shifts per day shifts/day 2 Operating days per week d/wk 7 Scheduled operating days per year d/a 360

Estimates of the mineral resources contained within the mining phases were based on the May 2013 deposit model, include material classified as indicated and inferred, and were based on the metallurgical recoveries and costs presented in Table 16.1. Internal and cross-over cut-off grades were based on a copper price of $2.25 per pound.

The sample compositing and block grade interpolation processes used to construct the deposit model are believed to incorporate sufficient dilution and, hence, no additional dilution factors were applied. A 100% recovery factor was used to estimate concentrator and heap leach feeds for this PEA.

Bulk densities were stored in the deposit model for each block and vary by geologic zone. Table 16.6 summarizes the zones and the corresponding in situ dry densities. Any undefined blocks were assigned a default density of 2.55 t/m3.

Table 16.6 Geologic Zones and Bulk Densities Geologic Zone Model Code Density (t/m3) Overburden/Alluvium 1 2.00 Leach Cap (oxide) 2 2.44 Secondary Sulfide (supergene) 3 2.50 Primary Sulfide (hypogene) 4 2.57

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The cutoffs used for the production schedule are approximately 0.07% Cu for heap leach feed and 0.12% Cu for concentrator feed at a Cu price of $2.25/lb. Mineral resources estimated at a 0.15% Cu cutoff (the nearest estimate) are: 627 Mt of indicated mineral resources grading 0.49% Cu and 4,141 Mt of inferred mineral resources grading 0.32% Cu. In the production schedule, concentrator plus heap leach feeds total 1,703 Mt grading 0.40% Cu. The production schedule is based on approximately 35% of the resource estimated at roughly comparable cutoffs. No mineral resources have been classified as measured.

Table 16.7 summarizes the mine production schedule based on the fixed cut-off grade policy described above. Peak material handling rates in the mine, including waste, would be approximately 309,000 tonnes per day, or 111 Mt per year. The average stripping ratio over the life of the mine is projected at 0.76 (tonnes of waste and stockpiled sulfides per tonne of concentrator plus heap leach feed).

Mine preproduction stripping would require approximately 2.25 - 2.5 years, including site preparation and a gradual build-up of equipment and trained personnel. Mine stripping targets for preproduction Years -3, -2 and -1 are 2, 52 and 115 Mt, respectively. Total preproduction stripping is estimated at 169 Mt, which includes some advanced stripping in mining Phase 2. Approximately 1.6 Mt of run-of-mine (ROM) secondary sulfides would be stockpiled during preproduction and, subsequently, fed to the concentrator in Year 1.

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Table 16.7 Los Azules Mine Production Schedule

Concentrator Feed Heap Leach Feed ROM Sulfide Stockpile Time Sec Sulf >= 0.260% Cu Pri Sulf >= 0.117% Cu Total Oxide/Lch >= 0.069% Cu 0.069% <= SS < 0.260% Cu Total Sec Sulf >= 0.260% Cu Waste Total Strip Period Ktonnes Cu %Au g/t Ag g/t S %KtonnesCu %Au g/t Ag g/t S %KtonnesCu %Au g/t Ag g/t S % Ktonnes Cu %Au g/t Ag g/t S % Ktonnes Cu %Au g/t Ag g/t S %KtonnesCu %Au g/t Ag g/t S %KtonnesCu %Au g/t Ag g/t S %KtonnesKtonnesRatio**

PP 462 0.08 0.09 2.49 0.04 30 0.26 0.03 1.30 0.71 492 0.09 0.09 2.42 0.08 1,643 0.81 0.09 1.45 0.95 166,772 168,907 342.59 1* 34,920 0.78 0.09 2.14 0.83 0 0.00 0.00 0.00 0.00 34,920 0.78 0.09 2.14 0.83 3,110 0.10 0.09 2.22 0.13 532 0.23 0.04 1.58 1.01 3,641 0.12 0.08 2.12 0.26 72,639 111,200 1.88 2 43,185 0.91 0.09 1.98 0.89 15 0.31 0.04 1.07 0.92 43,200 0.90 0.09 1.98 0.89 815 0.08 0.05 1.69 0.06 1,072 0.20 0.04 1.43 0.83 1,886 0.15 0.04 1.54 0.50 66,114 111,200 1.47 3 42,541 0.65 0.06 1.56 0.72 659 0.38 0.06 1.29 0.88 43,200 0.65 0.06 1.55 0.72 4,549 0.09 0.06 1.76 0.06 7,429 0.20 0.03 1.13 1.09 11,978 0.15 0.04 1.37 0.70 56,022 111,200 1.02 4 43,087 0.61 0.07 1.94 0.86 113 0.41 0.08 2.22 0.88 43,200 0.61 0.07 1.94 0.86 687 0.08 0.06 1.63 0.09 2,567 0.21 0.02 0.93 1.63 3,255 0.18 0.03 1.08 1.30 64,745 111,200 1.39 5 43,196 0.58 0.06 1.78 0.75 4 0.46 0.06 2.02 0.92 43,200 0.57 0.06 1.78 0.75 1,088 0.08 0.02 1.17 0.24 4,282 0.21 0.02 0.88 1.02 5,370 0.18 0.02 0.94 0.86 62,630 111,200 1.29 6 42,457 0.51 0.05 1.67 0.85 743 0.27 0.04 1.20 0.90 43,200 0.51 0.05 1.66 0.85 369 0.07 0.03 1.19 0.16 21,225 0.20 0.02 0.96 1.04 21,594 0.20 0.02 0.96 1.02 46,406 111,200 0.72 7 39,927 0.50 0.05 1.56 1.00 3,273 0.20 0.04 1.30 0.87 43,200 0.48 0.05 1.54 0.99 78 0.07 0.03 1.17 0.11 11,460 0.20 0.02 0.89 1.59 11,537 0.20 0.02 0.89 1.58 54,463 109,200 0.99 8 33,864 0.51 0.06 1.48 1.00 9,336 0.26 0.04 1.32 0.86 43,200 0.46 0.05 1.44 0.97 81 0.07 0.02 1.21 0.60 4,139 0.22 0.04 1.04 1.55 4,219 0.22 0.04 1.04 1.53 61,781 109,200 1.30 9 28,041 0.50 0.05 1.68 0.97 15,159 0.32 0.05 1.34 0.80 43,200 0.43 0.05 1.56 0.91 241 0.08 0.03 1.93 0.94 5,811 0.22 0.03 1.67 1.44 6,052 0.22 0.03 1.68 1.42 59,948 109,200 1.22 10 29,172 0.49 0.05 1.84 1.07 14,028 0.33 0.05 1.66 0.81 43,200 0.43 0.05 1.78 0.99 1,830 0.08 0.05 1.72 0.55 11,540 0.22 0.03 1.72 1.33 13,369 0.20 0.03 1.72 1.22 52,631 109,200 0.93 11 23,228 0.54 0.06 1.84 0.91 19,972 0.42 0.05 1.83 0.85 43,200 0.49 0.06 1.83 0.88 29 0.07 0.03 1.00 0.66 4,357 0.22 0.04 1.38 1.12 4,386 0.22 0.04 1.38 1.11 58,614 106,200 1.23 12 23,074 0.54 0.06 1.76 1.12 20,126 0.45 0.05 1.86 0.98 43,200 0.50 0.05 1.80 1.05 6 0.07 0.02 0.80 0.38 4,336 0.21 0.04 1.18 1.07 4,342 0.21 0.04 1.18 1.07 58,658 106,200 1.23 13 19,377 0.58 0.06 1.53 1.31 23,823 0.45 0.04 1.80 1.02 43,200 0.51 0.05 1.68 1.15 0 0.00 0.00 0.00 0.00 4,429 0.20 0.03 0.85 1.01 4,429 0.20 0.03 0.85 1.01 58,571 106,200 1.23 14 20,384 0.58 0.06 1.35 1.37 22,817 0.29 0.03 1.32 1.21 43,200 0.43 0.04 1.33 1.28 0 0.00 0.00 0.00 0.00 4,912 0.21 0.03 1.22 0.98 4,912 0.21 0.03 1.22 0.98 58,088 106,200 1.21 15 14,373 0.51 0.05 1.55 1.42 28,828 0.25 0.03 1.22 1.10 43,200 0.34 0.04 1.33 1.21 0 0.00 0.00 0.00 0.00 6,246 0.19 0.02 1.59 1.25 6,246 0.19 0.02 1.59 1.25 56,755 106,200 1.15 16 9,673 0.47 0.04 1.80 1.32 33,527 0.27 0.03 1.25 1.02 43,200 0.32 0.04 1.37 1.09 0 0.00 0.00 0.00 0.00 7,834 0.19 0.02 1.76 1.21 7,834 0.19 0.02 1.76 1.21 55,166 106,200 1.08 17 10,146 0.47 0.05 1.90 1.15 33,054 0.29 0.03 1.59 1.14 43,200 0.33 0.04 1.66 1.14 0 0.00 0.00 0.00 0.00 6,675 0.18 0.03 1.59 0.93 6,675 0.18 0.03 1.59 0.93 56,325 106,200 1.13 18 10,865 0.47 0.06 1.74 1.25 32,336 0.31 0.03 1.84 1.23 43,200 0.35 0.04 1.81 1.23 306 0.07 0.02 0.74 0.29 9,080 0.15 0.04 1.15 0.81 9,386 0.15 0.03 1.13 0.79 53,614 106,200 1.02 19 9,933 0.44 0.05 1.38 1.15 33,267 0.30 0.03 1.73 1.14 43,200 0.33 0.04 1.65 1.14 41 0.07 0.02 0.74 0.29 18,101 0.19 0.02 0.97 0.79 18,142 0.19 0.02 0.97 0.79 33,420 94,762 0.54 20 15,834 0.37 0.04 1.11 0.83 27,366 0.28 0.03 1.71 1.31 43,200 0.31 0.03 1.49 1.13 7 0.07 0.06 0.90 0.06 20,217 0.19 0.02 0.96 0.80 20,224 0.19 0.02 0.96 0.80 21,142 84,566 0.33 21 18,441 0.36 0.04 1.12 0.75 24,759 0.23 0.03 1.56 1.09 43,200 0.29 0.03 1.37 0.95 22 0.07 0.06 0.90 0.06 11,598 0.20 0.02 0.88 1.07 11,621 0.20 0.02 0.88 1.07 7,487 62,308 0.14 22 17,973 0.39 0.05 1.29 0.79 25,227 0.24 0.04 1.46 0.98 43,200 0.30 0.04 1.39 0.90 0 0.00 0.00 0.00 0.00 8,585 0.22 0.03 0.88 1.19 8,585 0.22 0.03 0.88 1.19 2,811 54,596 0.05 23 17,607 0.44 0.05 1.24 0.94 25,593 0.27 0.04 1.47 1.07 43,200 0.34 0.05 1.38 1.02 0 0.00 0.00 0.00 0.00 6,686 0.23 0.03 0.82 0.94 6,686 0.23 0.03 0.82 0.94 1,287 51,173 0.03 24 16,376 0.47 0.05 1.30 1.04 26,824 0.27 0.04 1.43 1.18 43,200 0.35 0.04 1.38 1.12 0 0.00 0.00 0.00 0.00 3,290 0.23 0.03 0.95 0.64 3,290 0.23 0.03 0.95 0.64 654 47,144 0.01 25 12,967 0.48 0.05 1.29 0.93 30,233 0.30 0.04 1.44 1.20 43,200 0.35 0.04 1.39 1.12 0 0.00 0.00 0.00 0.00 1,421 0.24 0.03 1.07 0.53 1,421 0.24 0.03 1.07 0.53 286 44,907 0.01 26 10,637 0.51 0.05 1.40 0.77 32,563 0.33 0.04 1.53 1.22 43,200 0.37 0.04 1.50 1.11 0 0.00 0.00 0.00 0.00 637 0.22 0.03 1.40 0.52 637 0.22 0.03 1.40 0.52 148 43,985 0.00 27 8,239 0.54 0.05 1.57 0.70 34,961 0.35 0.04 1.57 1.11 43,200 0.38 0.05 1.57 1.03 0 0.00 0.00 0.00 0.00 336 0.21 0.04 1.43 0.43 336 0.21 0.04 1.43 0.43 322 43,858 0.01 28 7,198 0.56 0.06 1.68 0.71 36,002 0.35 0.04 1.68 0.97 43,200 0.38 0.05 1.68 0.93 0 0.00 0.00 0.00 0.00 113 0.23 0.04 1.63 0.43 113 0.23 0.04 1.63 0.43 616 43,929 0.01 29 6,171 0.56 0.06 1.70 0.82 37,029 0.35 0.05 1.66 0.93 43,200 0.38 0.05 1.67 0.91 0 0.00 0.00 0.00 0.00 21 0.25 0.04 1.77 0.53 21 0.25 0.04 1.77 0.53 561 43,782 0.01 30 4,737 0.55 0.06 1.83 0.99 38,464 0.35 0.04 1.63 0.89 43,200 0.37 0.05 1.65 0.90 0 0.00 0.00 0.00 0.00 17 0.24 0.02 0.80 1.07 17 0.24 0.02 0.80 1.07 462 43,679 0.01 31 3,305 0.55 0.06 1.98 1.00 39,895 0.36 0.05 1.52 0.89 43,200 0.38 0.05 1.55 0.90 0 0.00 0.00 0.00 0.00 318 0.24 0.02 0.69 1.13 318 0.24 0.02 0.69 1.13 495 44,014 0.01 32 2,106 0.54 0.06 2.08 0.72 41,094 0.37 0.05 1.55 0.89 43,200 0.38 0.05 1.57 0.88 0 0.00 0.00 0.00 0.00 58 0.23 0.04 1.14 0.97 58 0.23 0.04 1.14 0.97 363 43,621 0.01 33 1,038 0.55 0.07 2.36 0.48 42,162 0.39 0.05 1.59 0.88 43,200 0.39 0.05 1.61 0.87 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 133 43,333 0.00 34 14 0.45 0.08 2.30 0.48 43,186 0.36 0.05 1.49 0.82 43,200 0.36 0.05 1.49 0.82 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 420 43,620 0.01 35 0 0.00 0.00 0.00 0.00 39,783 0.31 0.05 1.42 1.02 39,783 0.31 0.05 1.42 1.02 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 642 40,425 0.02

Total 664,083 0.56 0.06 1.65 0.94 836,220 0.32 0.04 1.55 1.02 1,500,303 0.43 0.05 1.60 0.99 13,718 0.08 0.06 1.78 0.18 189,353 0.20 0.03 1.13 1.06 203,071 0.19 0.03 1.17 1.00 1,643 0.81 0.09 1.45 0.95 1,291,189 2,996,206 0.76

* Year 1 concentrator feed includes 1643 kt of reclaimed ROM sulfide stockpile ** Tonnes of waste + stockpile per tonne of concentrator + heap leach feed

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A breakdown of the total concentrator and heap leach feeds by indicated and inferred mineral resource classifications is listed in Table 16.8 below. No mineral resources at Los Azules have been classified as measured.

Table 16.8 Resource Classification of Concentrator and Heap Leach Feeds Concentrator Feed Heap Leach Feed Classification Ktonnes Cu % Au g/t Ag g/t Ktonnes Cu % Au g/t Ag g/t Measured 0 - - - 0 - - - Indicated 576,000 0.50 0.07 1.7 30,000 0.19 0.03 1.4 Inferred 924,000 0.38 0.04 1.5 173,000 0.19 0.03 1.1 Total 1,500,000 0.43 0.05 1.6 203,000 0.19 0.03 1.2

The concentrator is expected to operate nearly 35 years based on the mine production schedule presented in Table 16.7. Sulfide mineral resources that would be processed by the concentrator are projected at 1,500 Mt grading 0.43% Cu, 0.05 Au g/t and 1.6 Ag g/t. Total contained metal that would be fed to the concentrator is estimated at just over 14 billion lb of copper, nearly 2.4 million troy ounces of gold and 77 million troy ounces of silver. Total heap leach feed is projected at 203 Mt grading 0.19% Cu, 0.03 Au g/t and 1.2 Ag g/t; with corresponding contained metal estimated at 860 million pounds of copper, 180,000 troy ounces of gold and 7.7 million troy ounces of silver.

This PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. There is no certainty that the results, projections or estimates in this PEA will be realized.

16.4 Waste Rock Storage and Heap Leach Facilities Nearly 1,300 Mt of waste rock would be stripped under the production schedule described in the previous section. Approximately 1,300 Mt of waste would be placed into a waste rock storage facility (WRSF) immediately west of the open pit as shown in Figure 16.2. As the WRSF grows, it would be accessed by a haul road located on the north side of the valley.

Material suitable for heap leaching is estimated at approximately 203 Mt. This heap leach material would be hauled by truck to a pad located on the west side of the WRSF. The associated SX-EW facility would be located to the north-northeast of the heap leach pads. These facility arrangements and construction methods are further described in Section 18.0.

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Figure 16.2: Waste Rock Storage Facility and Heap Leach Pad Site Location (Ausenco 2013)

16.5 Hydrogeological Pit Dewatering An initial hydrogeologic investigation was completed in 2010 and a more extensive hydrologic and hydrogeologic investigation of the proposed pit area was completed in 2011 (Ausenco Vector, 2011). A total of eight standpipe piezometers and six vibrating wire piezometers have been installed, sixteen in-situ permeability tests have been performed and groundwater and surface water quality samples were collected and analyzed by an off-site laboratory. These studies have led to a conceptual understanding of the hydrology and hydrogeology in the area of the proposed open pit.

During pit development saturated overburden and Tertiary volcanics including porphyritic dacite, dacite, and rhyolite tuff will be encountered. The overburden includes thick deposits of glacial outwash and alluvial materials in the quebradas and the northern sectors of the pit, where the thickness can be over 80 m. The permeability of these materials is very high, although the spatial extent, as defined by corehole drilling and a seismic investigation, are limited. Once groundwater is removed from storage the flows from the overburden would be limited to the rate from abutting materials and infiltration.

Groundwater flow in the volcanic bedrock is primarily controlled by ubiquitous fracturing of the porphyritic diorite and geologic structures in the area. The steeply dipping Piuquenes Fault and possibly the Diagonal and Lagunas Fault could be areas of higher groundwater inflow and potentially inter-basin flow. As such, these fault zones warrant further investigation as part of subsequent studies. The degree of fracturing of the porphyritic diorite and the permeability associated with the hydrothermal breccia and fault zones suggest that groundwater inflow to the pit will be high. Numerical groundwater flow modeling suggests

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that during later stages of pit development the groundwater inflow to the pit will be in excess of 600 liters per second.

Given the shallow depth to groundwater and the high permeability of the geologic units in the pit area, high capacity vertical dewatering wells both in-pit and outside the pit boundaries will be necessary. The in-pit wells will be used to remove groundwater occupying the pores and fractures in the rock mass within and surrounding the pit shell. These wells would be operated in advance of mining and are wells that would be consumed by the ultimate pit configuration. In all likelihood these wells will include both overburden and bedrock pumping wells. Overburden pumping could also be supplemented with pumping from shallow excavations (drains) in the areas where the depth to groundwater is shallow. Pit perimeter wells will also be needed to intercept water flowing to the pit from the surrounding groundwater system and to lower the water table behind the pit slopes. These wells will target primary groundwater flow paths and likely be targeted such that they intercept major fault zones (e.g. Piuquenes fault south of the pit). A sump or series of sumps will also be used to pump water out from the pit bottom accumulating from pit wall runoff and/or groundwater inflow not captured by wells.

Prior to discharge of mine water, pit water would be used in the process plant, or if not, routed either to a sediment pond or rapid infiltration basin (RIB). Additional geochemical studies are necessary to evaluate the geochemical characteristics of the pit wall rocks and the potential for acid rock drainage, which could result in the need for treatment of in-pit waters. Most groundwater will be intercepted prior to seeping into the pit using wells. Initial water quality data suggest that this approach may permit discharge of these waters without treatment (e.g. pH, metals, sediment etc.).

Additional hydrogeologic data collected outside the area of mineralization and at greater depths will refine the long-term dewatering requirements and cost estimates. Pumping tests should also be completed to determine the large scale hydraulic properties of the geologic materials in the pit area and evaluate boundary conditions in the flow system that may exert strong controls over groundwater flow in the area.

16.6 Mine Equipment Large-scale open pit mining equipment operating on 15 meter benches would be used to extract mineralized material and waste rock at Los Azules. Electric drills and shovels were chosen because of their lower operating costs and better reliability. The rest of the mining fleet would consist of diesel-powered machinery to provide maximum flexibility in pit operations.

The production schedule presented in Table 16.7 was used as the basis for equipment selection. It was assumed that the owner would be performing all mining services, including preproduction stripping, blasting, and maintenance and repair activities. Mine operations would be scheduled for 24 hours per day, 7 days per week, for a total of 360 days per year. Four crews would provide continuous operator and maintenance labor coverage for the mine.

The selected primary mining fleet would include the following:

 Rotary blasthole drills capable of 270 mm-diameter holes  60 m3 rope shovels  42 m3 hydraulic shovel

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 40 m3 front-end loader  363 tonne off-highway haul trucks  635 kW and 435 kW crawler dozers  600 kW rubber-tired dozer  370 kW rubber-tired dozers  220 kW and 190 kW motor graders  120,000 liter water trucks

A portable crushing and screening plant would produce crushed rock for blasthole stemming and road surfacing throughout the Project area. A 30 tonne vibratory compactor would be needed for haul road maintenance/construction and engineered earthworks. Other auxiliary equipment would be used for miscellaneous earthworks and construction around the mine and WRSF site, cleaning out minor ditches and sumps, equipment assembly and maintenance, fueling and lubrication services, transporting mine equipment and electric power cables, loading/unloading mining supplies and repair parts, transporting mine personnel, and other mine support duties. With the deposit centered at the valley bottom and the pit slope laybacks climbing the valley walls, a significant road building effort would be required to provide access and haulage routes to the upper benches of the mining pushbacks.

Table 16.9 presents the peak primary mine equipment fleet envisioned for Los Azules development.

Table 16.9 Primary Mine Equipment Fleet Equipment Peak Units Crawler Rotary Drills, 270 mm 8-9 Secondary Percussion Drills, 89 mm 3 Electric Shovels, 60 m3 4 Hydraulic Shovel, 42 m3 1 Loader, 40 m3 1 Loader, 12 m3 (Roads & Dumps) 1 Haul Trucks, 363 tonne 42-48 Lt. Haul Trucks, 91tonne (R&D) 3 Dozers, 635 kW 3 Dozers, 435 kW 7 R.T. Dozer, 600 kW 1 R.T. Dozers, 370 kW 4 Graders, 220 kW 7 Graders, 190 kW 3 Water Trucks, 120,000 liter 5

16.7 Mine Workforce

Mine workforce requirements were estimated on the basis of working 24 hours per day, 7 days per week, and 52 weeks per year. A standard, four-crew rotating work schedule for craft labor and front-line supervision would be used for around-the-clock coverage.

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Expatriate personnel would be hired to help establish safe and efficient mine operations and maintenance systems, and to train Argentine nationals in proper work procedures. As the skill levels of national workers increase, expatriates would be phased out with the eventual goal of minimal expatriate staffing.

Mine personnel requirements are based on the owner performing all mining functions. The use of contractors for such activities as supplemental preproduction stripping, down-hole explosives supply and shot services, and contract maintenance and repair have not been incorporated into the workforce and mining cost estimates.

The peak mining department workforce is estimated at approximately 800 people, of which approximately 420 would be in mine operations, 240 in mine maintenance, and 140 in supervision and technical services.

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17.0 Recovery Methods

17.1 Process Flowsheet The Los Azules concentrator is envisioned to be a conventional copper flotation circuit with an annual throughput of 43,200,000 tonnes, based on an average daily throughput of 120,000 tonnes and 360 operating days per annum. The concentrator would be constructed on-site and would include a comminution circuit consisting of SAG mill, ball mill, and recycle crusher (SABC) followed by a bulk flotation circuit and a copper cleaner circuit with concentrate thickener. A pipeline would deliver concentrate slurry for filtration, concentrate leach and SX-EW. Tailings thickener, tailings storage, and water reclaim are part of the tailings storage facility (TSF). Heap leaching of low grade sulfide material would generate pregnant leach solution (PLS) which would also be processed in SX-EW. The process block flow diagram is provided in Figure 17.1.

Figure 17.1: Process Block Flow Diagram (Samuel Engineering 2013)

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17.2 Process Plant Location The locations of the process plants and ancillary facilities are shown in Figure 17.2. The locations were based on the following factors:

 Preference for gravity handling of tailings between the concentrator plant and the TSF;  Favorable topography allowing gravity flow within and between process facilities and to minimize mass earthworks;  Preference for proximity of concentrate leach, heap leach and SX-EW;  Potential environmental and social impacts;  Proximity to the mine thus minimizing mineralized material transportation cost;  Proximity to reclaim water from tailings;  Preference of fresh water sources; and  Plant elevation.

Preference for gravity handling of tailings to the TSF was given primary consideration in locating the concentrator plant due to the high cost of operating a pumped system and potential environmental impact of a pressurized line. This parameter therefore dictated that the plant be at a higher elevation than the TSF for at least a majority of operational duration.

Next in importance is minimizing mineralized material transportation distance from the mine to the process plant. The primary crusher would be located as close to the mine as possible (i.e. pit rim configuration) in order to minimize truck haulage distance, thereby dictating conveyance of crushed mineralized material to the concentrator. The ancillary facilities would be located in relation to the main facilities for purposes of convenience, e.g. the truck shop adjacent to the pit and the primary crusher, or isolation, e.g. permanent camp located to minimize plant noise impact.

The concentrate filtration and POX leaching are located near the ROM heap leaching to minimize pumping of pregnant solution and raffinate to and from the SX-EW facilities.

The fresh water source is anticipated to be well water. Reclaim water would be pumped from the TSF.

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Figure 17.2: Process Plant Location (Samuel Engineering 2013)

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17.3 Process Description The process facility will treat 120,000 tonnes per day of mill feed for 360 days per annum. It will operate 24 hours per day seven days per week. The copper will be recovered in a copper flotation concentrate that is approximately 1.5 percent of the total amount of the material fed to the plant.

The concentrate will be treated on-site by POX leaching and SX-EW to produce copper metal as cathode. Solution from heap leaching of low grade material will also be processed in the SX-EW plant.

17.3.1 Crushing and Coarse Ore Stockpile Run-of-mine material will be transported via haul trucks and dumped into the primary gyratory crushers. The crushed material is conveyed to a coarse material stockpile with a live capacity of 120,000 tonnes.

17.3.2 Grinding Material from the coarse material stockpile is reclaimed via reclaim feeders and transported by conveyor to two parallel grinding lines. Each grinding line is comprised of one semi-autogenous grinding (SAG) mill and two ball mills. The two SAG mills discharge through trommel screens and the screens oversize (critical size) report to two pebble crushers before returning to the SAG mills. Cyclone classification is employed to produce the required particle size distribution of approximately 80 percent passing (P80) 139 microns.

17.3.3 Flotation and Regrind The cyclone overflow will be combined and then redistributed between two parallel rougher flotation circuits. Each rougher flotation cell bank will consist of four 500 cubic meter tank cells providing 15 minutes of residence time. The rougher flotation concentrate will report to a regrind circuit prior to entering the cleaner circuit.

Tailings from the rougher flotation circuits will be combined and sent to two scavenger flotation banks, each consisting of four 500 cubic meter tank cells with fifteen minutes residence time. Concentrate from the scavenger circuit will be combined with the rougher concentrate and will report to the regrind circuit, while the tails will report to the tailings thickener.

The combined rougher and scavenger concentrates are reduced to a nominal particle size distribution of 80 percent passing (P80) 25 microns in two tower mills before being pumped to the cleaner flotation circuit. Cyclone classification is again employed to produce desired particle size distribution to the cleaner circuit.

The first cleaner flotation circuit consists of eight 130 cubic meter tank cells which each have a ten minute residence time.

The first cleaner underflow is transferred to the cleaner/scavenger flotation circuit which consists of eight 130 cubic meter tank cells. After a 12 minute residence time in the scavenger cells, the concentrate is returned to the regrind circuit. The tailings from the cleaner/scavenger cells are then combined with the rougher/ scavenger flotation tailings and transferred to four tailings thickeners.

The concentrate from the first cleaner flotation cells transfers to the second cleaner flotation circuit which consists of four column-type cleaner cells which have a residence time of 10 minutes. Tails from the second

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cleaner flotation circuit will be sent back to the first cleaner flotation circuit. Concentrate from the second cleaner flotation circuit will advance to the third cleaner flotation circuit.

The third cleaner flotation circuit consists of two flotation columns having a residence time of 10 minutes. Tails from the third cleaner circuit report back to the second cleaner flotation. Concentrate from the third cleaner flotation circuit is the final product from the plant; it reports to the copper concentrate thickener.

17.3.4 Concentrate Thickening The final copper concentrate has a slurry density of 20 percent solids by weight when it discharges from the third cleaner flotation circuit. It will be thickened to 60 percent solids by weight in a thickener.

17.3.5 Concentrate Transportation The copper concentrate thickener underflow is pumped to the concentrate leach facilities north of the WRSF.

17.3.6 Concentrate Filtration A filter plant, containing three vertical pressure-type dewatering filters will be located at the concentrate leach facility where the copper concentrate will be dewatered and then repulped with SX raffinate. The copper concentrate filter cake can also be stored if required to meet process needs. Filtrate will be returned to the concentrator process water tank.

17.3.7 Concentrate Leaching The copper concentrate will be repulped to seven percent solids with SX raffinate. From the repulp tanks, the slurry will be split into four identical trains in the POX circuit.

Positive displacement autoclave feed pumps will feed the slurry to the autoclaves. Each autoclave will have six compartments each of which will have an agitator for slurry mixing. Oxygen and cooling water will be added to each compartment of the autoclaves. The autoclaves will provide a total retention time of 60 minutes at a design temperature of 230°C.

Slurry will discharge from the autoclave to flash vessels. Oxidized slurry will discharge from the flash vessels into the autoclave flash discharge slurry tanks. Gas and steam that will be vented from the autoclaves and flash vessels will be collected and sparged into the SX raffinate.

Oxygen for the Los Azules concentrate leach will be produced on-site.

17.3.8 Countercurrent Decantation The slurry from the flash vessels will be pumped to a tank for partial neutralization of the acid with limestone before advancing to a countercurrent decantation (CCD) circuit. The CCD circuit consists of a series of three thickeners that are provided to rinse the acidic solution that contains the copper from the oxidized leach residue that contains gold. The CCD circuit will produce two products: washed residue will discharge from CCD thickener No. 3 underflow and pumped to the gold leach circuit, and the overflow from CCD thickener No. 1 will be pumped to the copper SX feed tank. The CCD circuit will be designed to provide a wash efficiency of 99 percent.

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17.3.9 Gold Recovery The thickener underflow slurry will be pumped to the neutralization tank where the pH will be adjusted by the addition of lime. From the neutralization tank the alkaline slurry will be pumped to the carbon-in-leach circuit which will consist of a series of six leach tanks. Sodium cyanide will be added to carbon-in-leach (CIL) tank No. 1. The total retention time in the circuit will be 24 hours. Activated carbon will be added to CIL tank No. 6 and advance to CIL tank No. 1 to adsorb the gold.

Carbon will be advanced from the CIL circuit to the strip circuit where it will be acid washed and then advanced to a carbon strip vessel. First, a “cold strip” will be used to remove copper from the carbon. The gold will then be eluted from the activated carbon into pregnant solution which will be pumped to the electrowinning cells for recovery of the gold from the solution. Dewatered gold sludge will be dried in a mercury retort prior to refining in an induction furnace to produce precious metal doré bars.

17.3.10 Tailings Ausenco Vector has prepared a conceptual design for the TSF. It is estimated that over 98 percent of the material processed will be discharged into the TSF as waste. Current estimates predict the ultimate TSF capacity to be approximately 1,478 million tonnes. At an estimated average dry density of 1.3 t/m3, this is equivalent to approximately 1,137 million cubic meters of storage. The current design uses the WRSF as part of the embankment. The remainder of the embankment will consist of rock fill with a composite liner system on the upstream slope to minimize seepage from the TSF downstream. The TSF will have a series of access roads along both sides to service the TSF and other facilities.

17.3.11 Heap Leaching ROM material with a copper grade below the mill feed cut-off grade will be hauled to the lined heap leach pad. After the surface is leveled, solution distribution lines will be installed. Raffinate from SX will be used for leaching. Heap leaching will consume some of the excess acid generated in pressure oxidative leach and SX-EW.

Raffinate will be applied to the surface of the heap through drip emitters. The acid solution will percolate through the heap leach material dissolving copper and some impurities. The resulting PLS will drain from the bottom of the heap and will be collected in the PLS pond. From the PLS pond, the solution will be pumped to the feed tank for SX.

17.3.12 Solvent Extraction (SX) The PLS from the ROM heap leach and the PLS from concentrate leach will be combined as feed to the solvent extraction (SX) plant. The SX process, by use of a liquid ion-exchange reagent, extracts dissolved copper values into the organic phase, which is a copper specific extractant dissolved in a high-flash point diluent similar to kerosene. The reaction is then reversed to produce electrolyte, a concentrated, purified aqueous phase.

The SX process consists of two basic steps. In the first step, the PLS is mixed with the organic phase. Once the extractant is loaded with copper, the organic phase and PLS are separated. The organic phase has a much lower specific gravity than the PLS, which allows for gravity separation between the two immiscible phases. During the extraction of the copper, hydrogen ions will be released from the organic phase. The

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aqueous solution, after copper extraction, is now called the raffinate. The raffinate, which contains the released acid from extraction, will be recycled back to the leaching processes.

The loaded organic will be pumped to the second step of the process where the copper will be stripped from the organic and go back into another aqueous phase, which will become the feed to EW. The stripped organic will return to the extraction stage to take up copper again.

The mixing and the gravity separation of the aqueous and organic solutions are performed in mixer- settlers constructed of stainless steel. The settlers will be covered to protect the process solutions from winter weather and sunlight, and to reduce the amount of evaporation of process solutions.

The SX circuit will consist of two trains, with three extraction stages, two strip stages and a loaded organic surge tank. The total PLS flow will be 3,200 cubic meters per hour.

17.3.13 Electrowinning (EW) Electrowinning (EW) is an electrochemical process in which ionic copper in the form of aqueous copper sulfate enters the tankhouse in the rich electrolyte and is electrolytically reduced to solid metallic copper.

The Los Azules EW process facility will consist of 728 electrolytic cells in a tank house building. Each cell will contain 66 cathodes made of smooth stainless steel and 67 anodes of a lead alloy. Both types of electrode will be suspended in the cells by means of high-conductivity, rigid hanger bars. The anodes and cathodes will be electrically connected in parallel. The EW cells containing the anodes and cathodes will be electrically connected in series. Approximately two volts are required per cell to win copper from an electrolyte solution. The DC current flow will have an electric current density of 300 amps per square meter.

Copper will be plated out onto the permanent cathodes on a seven-day cycle. At the end of the plating cycle, the cathodes will be pulled from the cell and sent to the cathode washing and stripping machine where the copper will be washed and mechanically stripped from the permanent cathode. The copper deposits will be stacked, weighed and banded. The cathode mother blanks will be returned to the EW cells for another cycle of copper deposition. The active plating area of the cathode will be one square meter per side or two square meters per cathode.

During the plating of the metallic copper, the EW reaction would release oxygen at the anode. These anodic oxygen bubbles will rise to the surface of the electrolyte releasing acid mist into the tankhouse. The acid mist will be controlled and captured by use of a hood, manifold and scrubber system.

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18.0 Project Infrastructure

18.1 Mine Access Road Los Azules is located near the border of Chile in an isolated area of the Argentine Andes at an elevation ranging from 3,500 to 4,500 meters. The closest population center is Calingasta, located approximately 80 kilometers to the east. The key access issue for the Project throughout the year is road closures due to snow during the winter and high stream flows during the spring. The snowline is at an approximate elevation of 3,000 masl. Presently, McEwen Mining is able to access the property approximately six months per year by employing snow removal along the existing central road after the snow season.

San Juan is a major regional center serviced by an airport and highways. An existing highway extends from San Juan to a wide valley in which the communities of Villa Nuevo, Calingasta, Tamberías, and Barreal are located.

In addition to the main access road, shown in Figure 18.1, the Project requires the delivery of large and heavy process equipment such as autoclaves, mills and an oxygen plant, to the Project site. Due to the very steep mountain ranges and rough terrain, it was concluded that neither the central nor northern routes would be capable of handling such large and heavy equipment. As a result, a transportation study was conducted to find an alternate route that would be capable of transporting the equipment with specific attention being placed on the autoclaves which, due to their dimensions and weight, were considered to be the most challenging to transport. Some of the general improvements required along the alternate route for the transportation of the large process equipment would include widening of the road and the curves to accommodate 60-meter long, 400 tonne autoclave vessels, and improvements to the road surface and stream crossings to handle the long and heavy loads. The costs for both the necessary road improvements and the estimated cost for transporting the autoclaves from port to Los Azules have been included in the capital cost estimate.

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Figure 18.1: Potential Mine Access Routes (Ausenco 2011)

18.2 Waste Rock Storage Facility (WRSF) A single large WRSF is planned to the west of the pit. The mine production schedule presented in this study requires a facility to ultimately contain 1.3 billion tonnes of waste rock. This facility will be developed in conjunction with a TSF and leach pad, all of which are located within the general project vicinity (Figure 18.2). In addition to forming a part of the TSF embankment, the WRSF will partially buttress the TSF embankment, providing greater dam safety. The leach pad will piggy-back on top of the downstream slope of the WRSF thus providing a more cost effective leach pad.

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Figure 18.2: WRSF Siting Map (Ausenco 2013)

18.3 Tailings Storage Facility (TSF)

18.3.1 TSF Location A study was carried out to evaluate possible TSF locations based on the estimated tailings production. The TSF sites were chosen on the basis of the following factors:

 The required storage capacity could be developed in one facility for the life of the Project to facilitate management of the waste and mitigate potential environmental impact;  The TSF is within close proximity to the pit and plant without inhibiting the operation or siting of the facilities;  The TSF is located at the upstream end of a catchment area, reducing the volume of rainfall runoff reporting to the TSF compared to locations further downstream, resulting in reduced volumes of water coming into contact with the tailings that will require monitoring and potential management;  The preferred location of the TSF is in the same watershed as the pit and waste rock storage facility to minimize the environmental impacts in the area;  The topography and geology favors construction of a single, efficient embankment;

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 The TSF is not upstream of critical mining structures (other than incidental structures such as roads); and  The TSF site has the capacity to expand and accommodate additional tailings if the mineral resource body expands in the future. The TSF is designed to contain approximately 1.5 billion tonnes of tailings. Based on this volumetric requirement, and the selection criteria listed above, a single site was identified (see Figure 18.3).

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Figure 18.3: TSF Location (Ausenco 2013)

18.3.2 TSF Design Construction of the TSF embankment is planned to be continuous during the life of the Project. For the purposes of this study, several stages have been assessed, including an initial stage and ultimate stage. For

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the sustaining capital cost estimate, the facility costs were distributed in 5-year blocks over the life of the Project. Staging of the embankment will be analyzed in more detail during future studies.

The design was developed using available 1-meter contour topography. Based on the location of the TSF and the concentrator plant, the ultimate facility is shown in Figure 18.3 above.

The tailings embankment is expected to be a classical rock fill dam (constructed of waste rock from the pit). For the purposes of this study, upstream and downstream slopes of 2H:1V (minimum) have been adopted based on similar in-country projects in seismic areas. Future geotechnical studies will be required to determine the appropriate embankment geometry for site specific conditions. Tailings will be discharged around this facility in a manner to maintain ponded water away from the embankment.

Until more substantial environmental, hydrogeological, geotechnical and waste characterization assessments are completed, it has been assumed that specific engineered measures would be taken to contain the tailings. These measures and related assumptions include:

 An upstream face composite liner system will be utilized, comprised of a low permeability soil-liner (assumed to be 5-meters thick), a filter layer (assumed to be 4-meters thick), and 2.0 millimeter thick liner, a linear low density polyethylene (LLDPE), geomembrane liner;  A foundation grout curtain will be installed beneath the TSF embankment, in order to reduce seepage and potential piping in the TSF. It has also been assumed that the embankment foundation will be stripped of unsuitable materials to a level 0.5 meters below the existing ground surface along the base of the valley and that the grout curtain will extend 50 meters below this level;  Underdrain collection systems will be installed beneath the TSF embankment, reducing the potential for development of high pore pressures within the embankment that could subsequently reduce stability, and serving to monitor and, if necessary, collect TSF embankment seepage for return to the TSF or treatment facility, if post closure; and  Two small embankments will be installed in the later years at the southern end of the TSF, in conjunction with the final main embankment raise, to provide remaining required storage capacity. It is possible that future studies may show that one or more of the engineering measures listed above are not required; however, based on experience at similar sites, this is unlikely.

Even though an allowance for seismic design was included, future work should specify and design the facilities for the maximum credible earthquake (MCE).

An access road would be constructed along both sides of the TSF from the plant site to the tailings discharge points. The tailings discharge pipeline and reclaim water pipeline would be placed along the eastern access road. The tailings would be distributed along the face of the tailings dam and/or around the sides of the facility. The decant pond location would be managed by tailings discharge operation to keep it away from the embankment.

18.4 Heap Leach Pad and Ponds Based on the process requirements of the Project and additional information, a heap leach circuit has been added to the Project. The heap leach pad would accommodate approximately 200 million tonnes of ROM mineralized material. The leach pad is located west of the WRSF (refer to Figure 18.4).

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Figure 18.4: Heap Leach Pad Layout (Ausenco 2013) The leach pad will be located in a broad valley. The underlying soils are alluvial in nature with the ground water located near the surface. In addition, there is an existing perennial stream that flows through this area. A large underdrain network will be located below the leach pad and ponds to drain near surface groundwater. The base of the pad has been raised above the valley floor to accommodate settlement of the pad. The liner system will be a composite liner consisting of a low permeability soil liner or GCL (geosynthetic clay liner) and a 2.0 millimeter LLDPE geomembrane. A granular over-liner will cover the geomembrane to protect it from damage during placement of large diameter ROM material on the pad.

A solution collection system, consisting of main headers and lateral pipes, will assist in conveying PLS to ponds located west of the leach pad. The pond system includes a PLS pond, intermediate leach solution (ILS) pond, and a storm water pond. Both the PLS and ILS ponds are double lined to minimize potential leakage into the environment due to higher heads in these ponds. The ILS pond will have a pump-back system to recirculate intermediate solution to the pad.

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Similar to the WRSF, the leach pad will be stacked in 10 meter lifts using the same haul trucks delivering waste rock to the WRSF. The pad has been designed to accommodate long leach cycles typical of copper projects.

18.5 Man Camp Facilities Given the remote location of the Project, a permanent man camp facility will be provided onsite. It will provide facilities for 900 individuals at any given time. Meals, food storage, kitchen, dining, recreation, ablution, and accommodation facilities will be provided. An outside contractor will be responsible for meals, housekeeping and maintenance services.

18.6 Employee Housing and Transportation It is assumed that all employees will be housed in the man camp so transportation will be provided by bus and truck to deliver employees to the various locations of work. Supervisors and Management will have assigned vehicles, while other employees will be transported by bus or van. Transportation between site and San Juan for staff embarking on, or returning from, rest and relaxation (R&R) will be provided by company owned and operated buses and vans.

18.7 Power Hugo Gil Figueroa & Asociados of Buenos Aires completed a scoping level power supply study in July 2012 and an update to this study was prepared in July 2013 using revised estimated electrical loads and schedule dates.

The current Project site average power demand is estimated to be 240 MW, largely due to major process equipment such as the EW circuit, grinding circuit and oxygen plant.

18.7.1 Power Supply Source and Routing A 300 km, 500 kV power transmission line, which will be included in the provincial power distribution plan, would supply power to the Project. The transmission line would originate in Gran Mendoza (Mendoza, Argentina) at a newly constructed substation (important node which will tap into the national power grid) and terminate at the Project site where it would be split into two 500 kV feeders, one supplying power to the northern facilities and the other to the southern facilities.

18.7.2 Estimated Schedule The estimated timeline for the design, regulatory review and approval, procurement, and construction of the substations and transmission line is listed in Table 18.1.

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Table 18.1 Proposed Transmission Line Engineering and Construction Schedule Item Activity Duration 1. Preliminary Design (including identification of routing alternatives) 7 Months 2. Identification of land owners and right-of-way negotiations 6 Months 3. Environmental Impact Study (including regulatory review and approval) 13 Months 4. Detailed Design 6 Months 5. Procurement and Construction 30 Months Total Elapsed Time 48 Months

18.7.3 Site Electrical Power Distribution The 500 kV transmission line from Gran Mendoza will be terminated at a utility meter installed within the Los Azules main substation located on the copper concentrator process bench, directly adjacent to the concentrator building. This substation will contain a 500 kV disconnect switch and circuit breaker that will feed a 500 kV bus. Connected to the 500 kV bus will be four transfer cells each consisting of a disconnect switch, circuit breaker and a 62.5 MVA transformer. The transfer cells will feed 13.2 kV busses connected to two 15 kV rated medium voltage switchgears that will provide distribution power to mills and feeds to transformers. These transformers will supply power to two 6.6 kV medium voltage switchgears, which in turn will feed low voltage switchgears that will provide distribution power to motor control centers and other electrical equipment around the copper concentrator.

A 22 kilometer, 500 kV transmission line from the main substation will terminate at a second substation located near the SX-EW plant to the north of the WRSF. This substation will also contain a 500 kV disconnect switch and circuit breaker that will feed a 500 kV bus. Connected to the 500 kV bus are three substation cells that will provide power to the oxygen plant, rectifiers and a 6.6 kV medium voltage switchgear. This switchgear will feed low voltage switchgears that will provide power to motor control centers and other equipment around the SX-EW plant.

Electrical distribution to the Project areas such as the mine ring main, permanent camp, and water supply stations is envisioned to be on overhead transmission lines run along poles.

18.8 Water Supply Based on the evaluation of water supply/demand requirements for the Project, an annual average water supply of 1,396 cubic meters per hour (388 liters per second) will be needed. Preliminary evaluations suggest that it is possible that this demand could be met from pit dewatering and pumping of the alluvial aquifer in the river valley. A combination of these two supply sources is anticipated during the initial years due to the possibility of lower pit dewatering volumes. Further evaluation will be conducted during future studies. The future work will evaluate the supply of water that can be obtained from the two sources, support permitting of water rights, and evaluate any potential impacts on downstream users.

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19.0 Market Studies and Contracts

19.1 Copper Markets Selmar International Services LTDA (SELMAR) of Santiago, Chile, in conjunction with Neil S. Seldon & Associates Ltd of Vancouver, Canada completed a scoping level marketing study for the Project in June 2013. In the report, the following were addressed:

 Current market (domestic and international) for copper cathodes and gold doré.  Information on cathode marketability, current market pricing and producer premiums, estimated freight charges to the port, typical terms, etc.  Shipping, selling and typical payment terms for gold doré.  Investigation of port options, logistical considerations, and estimated freight charges to the port.  High-level long term overview for copper supply demand and prices.

Information from the study is summarized in the following sections.

19.1.1 Cathode Markets – Domestic and International The copper cathode market trade is worldwide and with Chile being a major supplier of cathodes to the world, distribution of Chilean refined copper provides a good indicator of expected markets for Los Azules copper cathodes.

Given the geographical location of Los Azules, the most likely international markets are in Asia with shipments into Shanghai, Keelung, Busan and Hong Kong, as well as into Europe with shipments into Rotterdam and Italy. Brazil is also a potential market with shipments into Santos, and North America with shipments into Houston, USA, and Veracruz, Mexico. Other destinations are likely.

The domestic market in Argentina is less than 30,000 tons of copper per annum and does not present itself as a major buyer for Los Azules copper cathodes. Nevertheless, Brazil could be an attractive market with consumption expected to grow from 440,000 tonnes in 2013 to over 700,000 tonnes in 2025.

In summary, potential markets will be determined by local supply and demand balance.

19.1.2 Cathode Marketability Copper cathode is the primary raw material for the production of copper rod for the wire and cable industry. Cathodes are also used to produce copper tubes, brass, copper sheet products and can be found in 450 alloys. Grade A copper cathode of 99.99% is deliverable and traded on the world’s metal exchanges in New York (COMEX), London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE).

19.1.3 Copper Cathode Producer Premiums Los Azules, as a metal producer, may charge a metal premium to the customer to cover the cost of transportation, warehousing, and financing from warehousing to the customer. In practice, the value of the premium is market-driven.

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The most important benchmarks for annual cathode contracts are the Codelco premiums announced to the market annually in the October/November timeframe for the following year. For the purposes of the Preliminary Economic Assessment for Los Azules, long term premiums of US$80 per tonne for registered LME Grade A cathodes (after first three years of production) and US$50 per tonne for non-registered cathodes (first three years of production) have been established in the economic evaluation.

19.1.4 Port Options and Freight Three ports have been identified as suitable for potential overseas shipments of copper cathodes from Los Azules. The ports are listed below and shown in Figure 19.1.

 Valparaiso Port located in Central Chile  San Antonio Port located in Central Chile, and  Buenos Aires Port located in Buenos Aires Province, Argentina

Transportation of cathode to a Chilean port would utilize the main mine access road and the existing highway access to Chile.

N

Figure 19.1: Port Options Map (Selmar 2013) Given the very significant volume of copper cathodes anticipated from the Project, if shipped via the Chilean port of Valparaiso, the assumption is that the same pool rates negotiated by Chilean copper producers with ship-owners’ consortium would apply.

Current freight rates are US$55 per tonne LCL (Less Container Loads) liner terms to main destinations in Asia and US$65 per tonne to Europe basis Rotterdam (estimated 24-25 tonne loads per container).

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19.1.5 Doré Metal The precious metals refining market is very competitive, and in many cases, payables approach 100% of the analytical metal contents and there is not a great deal of variance in terms of refineries. This situation is expected to continue in the foreseeable future. Provided there are no unexpected quality issues, it is a reasonable assumption that there will be no marketing issues for Los Azules doré.

As a general rule, payment for contained gold in doré is 99% to 100% with a refining charge of up to $2 per ounce of doré. The suggested terms for doré evaluation purposes are:

 Gold return rate: 99.7% of the analytical fine gold content  Treatment charge: US$0.50 per ounce gross weight received

An indicative example of shipment terms between an International Valuables Transport Contract and a Swiss refinery for services provided in Argentina (door to door service with pick up at the mine site) are:

 Fixed rate/shipment: US$12,180 + VAT  Per kilogram national airfreight to Ezeiza: US$3.35 +VAT  Services provided abroad: US$0.21 – 0.28 per ounce of doré

19.2 Contracts At the time of this report, McEwen Mining has not entered into any contracts.

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20.0 Environmental Studies, Permitting, and Social or Community Impact

20.1 Environmental Baseline Studies Since 2007 Ausenco Vector has been collecting environmental baseline monitoring data on surface and underground water volumes and quality, soils, flora and fauna, archeology and weather. Ausenco Vector has also been studying the boggy wetlands which are locally referred to as “vegas”. Vegas are not protected, but Ausenco Vector has been developing a plan to relocate or compensate for vegas where they will be impacted by the development of the Project. Dr. Andres Meglioli, of Mountain Pass LLC, has been monitoring cryogenic landforms in the Project area since 2011.

During the last field season, collection of environmental baseline data on surface and underground water volumes and quality was conducted by the Instituto de Investigaciones Hidráulicas, a research center at the University of San Juan. In addition, there was a collection of data related to flora and fauna plus additional studies on the vegas which was performed by senior biologists Juan C. Acosta, Héctor J. Villavicencio and Juan A. Scaglia.

20.2 Hydrology An initial hydrogeologic investigation was completed in 2010 and a more extensive hydrologic and hydrogeologic investigation of the proposed pit area was completed in 2011 (Ausenco Vector, 2011). A total of eight standpipe piezometers and six vibrating wire piezometers have been installed, sixteen in-situ permeability tests have been performed and groundwater and surface water quality samples were collected and analyzed by an off-site laboratory. These studies have led to a conceptual understanding of the hydrology and hydrogeology in the area of the proposed open pit.

20.3 Geomorphology and Glacier Studies Extensive geomorphological mapping and characterization of the Los Azules area was carried out during 2011, 2012 and 2013 by an international team under the direction of Dr. Andres Meglioli, of Mountain Pass LLC of Denver, Colorado. Dr. Meglioli and his team mapped the geomorphological features on the property and access road, analyzed satellite imagery, conducted geophysical and hydro-geochemical studies, carried out detailed topographic survey controls and installed temperature probes to evaluate possible permafrost conditions and overall distribution of periglacial land forms. The hydro-geochemical studies are focused on quantifying the contribution of rock glaciers to the overall hydrologic balance of the watersheds where the mining project might be developed. These studies are ongoing.

According to Dr. Meglioli (Meglioli 2012), no uncovered or covered “white glaciers” (classic ice glaciers) have been identified near the Los Azules exploration area, although several small rock glaciers were identified on McEwen Mining’s mining properties. None of these rock glaciers will be impacted by McEwen Mining’s exploration activities or the development of a mining project. Dr. Meglioli’s geomorphological map is shown in Figure. 20.1. A geomorphological map was also prepared for the access road to the Project.

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Figure 20.1: Los Azules Geomorphological Map (Mountain Pass 2012)

20.4 Archeology Studies The location of the Project is remote, and the climatic conditions are harsh. Consequently, the area is uninhabited except for seasonal livestock herders. Nevertheless, in order to ensure that important archeological sites are not overlooked or damaged by the exploration and development activities, Ausenco Vector was contracted to conduct a comprehensive archeological survey of the area impacted by McEwen Mining’s exploration activities and eventual mining operations. The survey performed by Ausenco Vector was initiated in 2007 and completed in 2012 including a visit of the local authorities (Direction of Heritage Protection or Dirección de Patrimonio Cultural in Spanish). There are a few very rustic structures built by the livestock grazers in historic times, but no important archeological artifacts have been discovered in the Project area.

In early 2013, Andes Corp. engaged Dr. Teresa Michieli from the University of San Juan to conduct an additional archeological survey which covered the access road up to the Project area and also a zone located NE of La Ballena ridge. One site, in proximity to the access road, must be protected and investigated further. No archeological sites and/or artifacts have been discovered in the zone located in the area that will be impacted by mining operations.

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20.5 Closure and Reclamation Following the completion of mining, closure and reclamation of the Project will occur. Preliminary concepts for both are described below.

20.5.1 Introduction A risk assessment and closure plan will be developed during future studies, in conjunction with development of post-closure sustainable land use strategies. Typical objectives of mine closure and rehabilitation activities include:

 Protection of the environment, safety and public health by rehabilitating disturbed areas, returning them to stable conditions for future land use, compatible with conditions prior to the mine development;  Re-establish drainages and water access to nearby villages and towns, while fulfilling long-term quality and quantity objectives;  Re-vegetate the land, where appropriate, until a sustainable condition is achieved, using appropriate and native-plant species;  Mitigation of air quality impacts;  Mitigation of the need for long term, active care and maintenance of the site;  Meet, or exceed, local and international closure requirements; and  Transfer of infrastructure to the benefit of local communities.

It is not possible to prescribe detailed reclamation and closure measures at this stage, however, some typical approaches adopted to mitigate environmental impacts for similar projects in the dry high Andean environment are discussed in this section.

Cover systems are generally designed to reduce the potential for oxygen, rainfall and surface runoff infiltration and to provide a physical barrier against contact with hazardous materials. The covers may include low permeability and erosion resistant protective cover systems. The detailed design will include an assessment of the potential hazards from the results of future studies and the assessment of an appropriate cover system for each facility to achieve the impact mitigation objectives for the site. The designs shall account for site and locally available materials, and if required may incorporate the use of geosynthetics. Closure planning should identify materials that should be stockpiled during construction activities, for closure and progressive closure construction of cover systems.

20.5.2 Reclamation and Closure by Facility

20.5.2.1 Open Pit Mine

Reclamation and closure activities for the open pit would include: stabilizing the walls of the open pit; developing a pit lake; providing overflow drainage; and covering any potential acid rock drainage (ARD) generating sections of the mine wall with limestone above the pit lake surface. During development of the pit lake, which may take several years, lime treatment of the pit water may be required to manage any ARD generation.

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20.5.2.2 Tailings Storage Facility (TSF)

Tailings deposition will be managed prior to closure so that the tailings surface landform will be free draining – this approach is driven by relatively low rainfall and high evaporation rates that would make long term establishment of a pond over the TSF unlikely. When tailings deposition ceases, the decant pond will be drained, the tailings liquor treated prior to discharge, the surface of tailings will be allowed to dry and gain strength, and then the surface of the tailings will be covered - the final tailings profile could be managed and shaped to promote flow paths along the southern edge of the closed TSF (without significant tailings rehandling) and downstream to the river via a post-closure spillway. The downstream face of the TSF embankment (above the WRSF) will be treated as necessary to manage stability and erosion, and inspections undertaken to monitor for any signs of instability. Both surface water and groundwater monitoring will be carried out at locations around the TSF during post-closure to demonstrate performance of the closure strategies.

20.5.2.3 Waste Rock Storage Facility (WRSF)

Final slopes of the WRSF would be shaped during operations to promote long term stability and free draining slopes to facilitate installation of a soil/gravel cover system where appropriate. Progressive rehabilitation of final surfaces would be performed during operations to the extent practicable. Surface water and groundwater monitoring would be carried out at locations around the WRSF during post-closure to demonstrate performance of the closure strategies.

20.5.2.4 Heap Leach Facility (HLF)

The HLF would be rinsed for a period of time, and then a soil cover system would be placed over the facility to reduce infiltration of stormwater and snow melt. The ponds would remain in place to capture and treat any water that migrates through the heap after closure and reports to the ponds. After closure, if the water quality discharging from the heap leach facility meets discharge standards without treatment, then the ponds would be removed, allowing the water from the heap to discharge directly into the river below.

20.5.2.5 Roads and Drainages

All haul roads would be ripped to alleviate compaction and to promote infiltration of surface water. All culverts would be removed. Any road that provides a benefit to local communities and long term access to monitoring points would be retained.

20.5.2.6 Buildings and Infrastructure

The decommissioning, demolition and removal of all plant equipment, steel, pipelines, conveyors and buildings would be performed as part of the closure process. Any bulk materials that do not pose a problem to the environment would be buried within the WRSF, such as non-contaminated concrete. All other materials would either be salvaged for resale or disposed of in a licensed disposal facility.

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20.5.3 Monitoring and Reporting Environmental and closure monitoring will be performed for a minimum of 10 years to ensure long term environmental closure compliance of the Project.

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21.0 Capital and Operating Costs

21.1 Capital Costs

21.1.1 Process Plant and Infrastructure Capital Costs Samuel Engineering, Inc. (SE) developed a scoping-level capital cost estimate for the processing and associated facilities for the Project. The cost is based on design and construction of a greenfield plant capable of processing 120,000 tonnes per day. The estimated capital cost to design, procure, construct and commission the Los Azules processing facilities is approximately $3.92 billion. The initial capital cost estimate is summarized in Table 21.1.

Table 21.1 Initial Capital Cost Estimate Summary Area Cost ($000s) Contracted Direct Costs: Truckshop and Readyline 40,645 Mine Dewatering 9,050 Crushing & Conveying 51,994 Stockpile & Reclaim 36,864 Grinding & Concentrating 283,707 Flotation 85,447 Tailings & Tailings Storage Facility 95,999 Heap Leach Pad & Ponds 37,497 Waste Rock Storage Facility 6,404 CCD & Autoclave 455,684 Copper Leach (SX-EW Plant) 252,143 Utilities & Power 79,049 Incoming Powerline 209,441 Site Development & Roads 92,093 Total Contracted Direct Costs: 1,736,016 Contracted Indirect Costs: Construction Indirects 113,845 Construction Camp 85,000 EPCM & Commissioning 281,844 Spare Parts & Initial Fills 106,211 Total Contracted Indirect Costs: 586,900 Owner’s Cost: Owner’s Direct Cost 834,516 Owner’s Indirect Cost 136,605 Total Owner’s Cost: 971,121 Additional Costs: Freight 94,030 Contingency 531,945 Total Additional Costs: 625,975 Total Preproduction Capital Cost: 3,920,012

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21.1.1.1 Accuracy

The PEA capital cost has been developed to a level sufficient to assess/evaluate the Project concept, various development options and the overall potential Project viability. After inclusion of the recommended contingency, the capital cost estimate is considered to have a level of accuracy in the range of minus 35 percent to plus 35 percent.

21.1.1.2 Currency

The estimate is expressed in Q2 2013 United States dollars. No provision is included to offset future escalation.

21.1.1.3 Scope

The Project consists of an open pit mine and associated processing, infrastructure, storage, and waste facilities. The facilities are expected to mine and process 120,000 mtpd of copper mineralized material. The current expected life of mine (LOM) is approximately 35 years. The processing facilities, as currently envisioned, would consist of a concentrator, a pressure oxidative leach plant, a heap leach, and an SE-EW plant.

The concentrator would employ two comminution circuits each consisting of a primary crusher, stockpile feed conveyor, reclaim conveyor, one ball mill and two semi-autogenous grinding (SAG) mills. The comminution circuits would be followed by two parallel flotation, thickening and filtration circuits, a TSF, and concentrate storage. The concentrate would be processed in a pressure oxidative (POX) leach circuit to produce an average of 456 mtpd of copper cathode. The leach residue would be treated to produce an average of 88 troy ounces of gold per day.

The heap leach/SX-EW facility would leach run-of-mine (ROM) material. The heap leach would consume excess acid generated in the POX leach of the concentrate, followed by SX-EW to produce an average of 20 mtpd of copper cathode.

The capital cost estimate is based on preliminary plant and facilities layout design work. The documents used to prepare the estimate include:

 Preliminary process flow diagrams  Mechanical equipment list  Preliminary site/plot plans and general arrangement drawings  Budgetary quotations from vendors  Earthwork, concrete and steel MTOs generated from preliminary layout drawings  In-house historical data and database information

Supporting data for the capital cost estimate was provided by MTB and WLR Consulting, Inc. (WLR) which provided costs for the mining equipment as well as the pre-production mining, and Ausenco, which provided costs for the tailings storage facility (TSF), waste rock storage facility (WRSF), heap leach pad and ponds, and site access roads.

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21.1.1.4 Exclusions

Items not included in the capital estimate are as follows:

 Sunk costs  Exploration cost  Permitting cost  License and royalty fees (included in cash flow)  Allowance for special incentives (schedule, safety, etc.)  Disposal / clean-up of hazardous materials  Escalation beyond Q2 2013  Value Added Tax (VAT or IGV)  Foreign currency exchange rate fluctuations  Reclamation & salvage costs (included in cash flow)  Working capital, sustaining capital and closure costs (included in cash flow)  Interest and financing cost  Force majeure occurrences, such as risks due to political upheaval, government policy changes, labor disputes, permitting delays, etc.

21.1.1.5 Estimating Methodology

Capital costs for Los Azules facilities are derived by applying stochastic estimating methods (including capacity factoring, Lang factors and parametric models).

The estimate is built up by area cost centers as defined by the Project Work Breakdown Structure (WBS) and by prime commodity accounts, which include earthwork, concrete, structural steel, mechanical equipment (including platework), piping, electrical and instrumentation.

Costs are based on the assumption that new equipment, materials and services will be purchased on a competitive basis with lump sum or unit rate contracts.

21.1.1.6 Contingency

An overall project contingency of 14 percent, or $532M, has been included in the capital cost in recognition of the degree of detail on which the estimate is based. Owner’s cost contingency is based on 5 percent and all other project costs have 20 percent contingency.

Contingency is an allowance to cover unforeseeable costs that may arise during the Project execution, which reside within the scope-of-work but cannot be explicitly defined or described at the time of the estimate due to lack of information. It is assumed that contingency will be spent; however, it is does not cover scope changes or project exclusions.

21.2 Owner’s Costs Los Azules mining costs are estimated in Q2 2013 U.S. dollars and exclude taxes and duties. No escalation factors have been applied to the cost projections beyond this time frame. All cost estimates for this PEA should be considered scoping level in accuracy.

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Mining equipment and pre-production mine development capital costs have been provided by MTB in collaboration with WLR. The costs have been built-up from pre-stripping tonnages and the equipment fleet and manpower required for the mining operations. Budgetary and historical pricing has been applied to an equipment fleet schedule as well as to a unit operations schedule to obtain total cost.

Table 21.2 summarizes the mine capital expenditures over the life of the Project, including the preproduction stripping costs for approximately 169 Mt of material.

Table 21.2 Mine Capital Cost Summary Cost Description US$000s Initial mining equipment (through preproduction) 434,640 Sustaining mining equipment (includes mine dewatering) 1,049,585 Preproduction mine development 371,694 Mine road construction and site preparation 11,317 Spares inventory 34,771 Contingency Included in Project Contingency Salvage value Included in Economic Model Total Mine Capital Costs 1,902,007

Other Owner’s Direct Capital Costs for mobile equipment and light vehicles, communications, office and shop equipment were based on a similar mining project in the area. The owner’s direct camp cost was based on an in-country camp supplier’s quote for a 900 person camp.

Owner’s Indirect Capital Costs including client management, preproduction employment and training, and owner’s camp catering were based on a similar mining Project in the area. An allowance was included for commercial power, communications expenses, and mobile equipment fuel, maintenance and tires.

McEwen Mining provided an allowance for the ROW and land acquisition cost as well as legal, permits, fees, corporate overhead, environmental, security and medical coverage, and community development.

Insurance cost was estimated based on the value of the Project during construction, common insurance coverages and historical premium quotes from an insurance provider.

21.3 Operating Costs

21.3.1 Mine Operating Cost Estimates The mine operating cost estimates cover: pit operations (i.e., drilling, blasting, loading and hauling); construction and maintenance of mine haul roads, sumps and safety berms; placement of waste rock in the WRSFs; operating and maintenance labor; mine department supervision and technical services; crushing waste rock to supply aggregate for road surfacing and blasthole stemming; and other earthworks as may be required for day to day mining operations. Exploration costs are not included in the operating cost estimates.

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Unit operating costs for major equipment incorporate labor, fuel and lubricant consumption, vendor estimates of maintenance and repair costs, and tire or undercarriage costs. These estimates were adjusted for local labor rates and supply costs, while tracking recent experience for projects with similar fleets. The mining cost estimates are based on energy prices of $0.083/kWh for electricity, $1.26/liter for diesel fuel, $0.80/kg for bulk ammonium nitrate prills, and $1.40/kg for bulk water-resistant emulsion.

Mine operating and maintenance labor rates range between $5.90 and $15.44 per hour. A fringe benefits burden of 70 percent was applied to the base labor costs; expatriate fringe burdens were capped at 40 percent. Overtime, paid at 1.5 times the base rate, was projected at 5 percent and 10 percent for craft operating and maintenance personnel, respectively.

Mine operating costs are projected at $6.47 billion over the life of the Project. This equates to an average unit cost of approximately $2.16 per tonne of material mined. Operating costs for placing material onto heap leach pads is estimated at $2.40 per tonne due to additional haulage distances. Reclamation of ROM sulfide stockpile material in Year 1 is projected at only $0.80 per tonne as drilling, blasting and long haulage distances would not be required.

21.3.2 Process and G&A Operating Cost Estimates Labor costs were estimated by first developing a manpower schedule for salaried personnel and operating and maintenance personnel in the manner of a typical South American mining operation. Current labor rates were obtained from Argentina.

Power costs were determined first by estimating the running time and power draw for equipment on the mechanical equipment list. A cost of $0.083 per kilowatt hour was then applied, which represents the cost both for the power generation and transmission. An allowance was also included for associated electrical power requirements for infrastructure and ancillary facilities.

The Plenge metallurgical test report identified the reagent consumption for the two mineralized material composites. All reagent consumptions except lime were reduced to 65 percent of the lab quantities. Grinding steel consumptions are based on historical data. Consumable costs are based on current South American information and have been fully burdened with freight, duties and taxes.

An estimate of maintenance supplies was made by adding five percent to the operating costs. Miscellaneous operating supplies (fuel, lubricants, etc.) were estimated by applying a one percent factor to the operating costs.

General and administration costs were based on a previously estimated project in northern Argentina.

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22.0 Economic Analysis

22.1 Introduction Samuel Engineering, Inc. (SE) prepared a pro forma cash flow using conventional methodology including:

 Unleveraged 100 percent equity basis (no project financing or debt);  Stand-alone project basis;  Before and after income tax determination of project economics;  Annual cash flows discounted on end of year basis; and  Costs in Q2 2013 U.S. Dollars (US$).

The Project is at the advanced exploration stage of investigation; consequently, this study is at the scoping level of accuracy, preliminary in nature, and includes inferred mineral resources in the conceptual mine plan and the mine production schedule. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under the standards set forth in NI 43-101. There is no certainty that the results, estimates or projections in this Preliminary Assessment will be realized.

22.2 Model Inputs General parameters used in the economic analysis are shown in Table 22.1. The analysis is based on Q2 2013 United States dollars. The preproduction period is estimated at four years for project development and construction.

Table 22.1 Production, Metal Prices, and Royalties Terms Parameter Data General Estimate Basis Q2 2013 US$ Preproduction Period Four years Mine Production Life 34.9 years Mineral Resources (Contained within Designed Pit) 1,703,373,000 t Annual Mineralized Material Production Capacity 43,800,000 t Market Prices Copper Price, per pound $3.00 Gold Price, per Troy ounce $1300.00 Royalties San Juan Province 3.00% Transportation and Refining Charges and Terms Inland Argentina Freight (Copper Cathode) $43.98/mt Inland Chile Freight (Copper Cathode) $26.02/mt

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Table 22.1 Production, Metal Prices, and Royalties Terms Parameter Data Ocean Shipping (Copper Cathode) $66/mt Payment for Contained Gold (99.7%) 0.3% Refining Charge $2.00/oz Au Treatment Charge $0.50/oz Doré Service Charge $0.28/lb Doré Fixed Dore Shipping Charge $12,180/1000 oz Inland Air Freight $3.35/kg Doré Air Freight to Switzerland $8.00/kg Doré Export Retentions Argentine Export Retentions 5%

22.2.1 Capital Costs The total capital cost is estimated at $5.46 billion, including $3.92 billion during preproduction, $65.9 million for working capital, and $1.47 billion in sustaining capital over the life of the mine. Table 22.2 summarizes the capital cost over the life of the mine.

Table 22.2 Life of Mine Capital Cost Summary LOM Cost Description ($000s) Truckshop and Readyline 40,645 Mine Dewatering 9,050 Crushing & Conveying 51,994 Stockpile & Reclaim 36,864 Grinding & Concentrating 283,707 Flotation 85,447 Tailings & Tailings Storage Facility 95,999 Heap Leach Pad & Ponds 37,497 Waste Rock Storage Facility 6,404 CCD & Autoclave 455,684 Copper Leach (SX-EW Plant) 252,143 Utilities & Power 79,049 Incoming Powerline 209,441 Site Development & Roads 92,093 Construction Indirects 586,900 Owner’s Costs 971,120 Freight 94,030 Contingency 531,945 Total Preproduction Capital 3,920,012

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Table 22.2 Life of Mine Capital Cost Summary LOM Cost Description ($000s) Sustaining 1,474,649 Working Capital 65,872 Total LOM Capital 5,460,533

22.2.2 Operating Costs The total LOM operating cost is estimated at $14.9 billion, or $8.74 per tonne of mineralized material processed as summarized in Table 22.3. Figure 22.1 shows the percentage of each LOM operating cost component.

Table 22.3 Life of Mine Operating Cost Summary LOM Cost/tonne Mineralized Material Description LOM Cost ($000s) ($) Mining 6,471,413 3.80 Processing 6,942,990 4.08 General & Administrative 1,358,933 0.80 Mine Reclamation / Closure 110,231 0.06 LOM Operating Cost 14,883,567 8.74

Mine G&A, $0.80, 9% Reclamation/Closure, $0.06, 1%

Mining, $3.80, 43%

Processing, $4.08, 47%

Figure 22.1: LOM Operating Costs per Tonne Mineralized Material (Samuel Engineering 2013)

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22.2.3 Royalty Tax and Export Retention Tax San Juan Province charges a three percent “mouth of mine” royalty. This royalty is calculated by deducting the costs for shipping, ocean freight, smelter treatment and refining charges, process operating costs and general and administrative costs associated with all areas of the Project except mining from the total gross revenue generated from the value of the metals to be shipped to the purchaser. The three-percent royalty is applied to the resulting profit.

In addition to the provincial royalty, Argentina imposes a five percent export retention tax on the value of the metals at the point of export. In estimating this retention tax, the amount of total gross revenue for the copper cathode and gold doré is multiplied by five percent.

22.3 Economic Results The Project’s LOM cash flow results are summarized in Table 22.4. The Project is at the exploration stage of investigation; consequently, this study is at the scoping level of accuracy, preliminary in nature, and includes inferred mineral resources in the conceptual mine plan and the mine production schedule. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under the standards set forth in Canadian National Instrument 43-101. There is no certainty that the results, projects or estimates in this PEA will be realized.

Table 22.4 Project Economic Summary Description Units Value Gross Revenue $000s 41,420,278 Less Transportation, TC and RC Costs $000s 835,048 Net Smelter Return $000s 40,585,230 Less Royalties $000s 965,192 Gross Income from Mining $000s 39,620,038 Less Operating Costs $000s 14,883,567 Less Export Retention $000s 2,071,014 Net Profit Before Depreciation/Amortization $000s 22,665,457 Less Depreciation/Amortization $000s 5,371,919 Net Profit Before Taxes $000s 17,293,537 Less Income Taxes $000s 6,052,738 Net Profit After Taxes $000s 11,240,799 Plus Add-back Non-Cash Depreciation/Amortization $000s 5,371,919 Less Sustaining Capital $000s 1,474,649 Less Capital Costs $000s 3,920,012 Less Working Capital $000s 65,872

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Table 22.4 Project Economic Summary Description Units Value Plus Recapture Working Capital/Spares/First Fills $000s 172,083 Plus Salvage Value $000s 66,601 Pre-Tax Cash Flow $000s 17,443,607 IRR (Pre-Tax) % 17.7 NPV @ 5% $000s 5,707,742 NPV @ 8% $000s 3,031,308 NPV @ 10% $000s 1,952,738 After-Tax Cash Flow $000s 11,390,869 IRR (Post-Tax) % 14.4 NPV @ 5% $000s 3,503,354 NPV @ 8% $000s 1,688,324 NPV @ 10% $000s 952,692 Pre-tax Pay Back Period Years 3.8

22.4 Sensitivity Analysis Figures 22.2 through 22.4 show the relative pre-tax NPV and IRR as capital and operating costs and copper price change.

The sensitivity shows that the Project is sensitive to production rate and metal prices. Operating and capital costs changes have a lower impact on the Project NPV than the former variables.

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35.0%

30.0%

25.0%

20.0% IRR 15.0%

10.0%

5.0%

0.0% ‐40% ‐30% ‐20% ‐10% Base +10% +20% +30% +40%

Capital ($m) 2,352 2,744 3,136 3,528 3,920 4,312 4,704 5,096 5,488 29.3% 25.4% 22.3% 19.7% 17.7% 15.8% 14.3% 12.9% 11.8% Operating ($/t process feed) 5.31 6.20 7.09 7.97 8.74 9.74 10.63 11.51 12.40 21.8% 20.8% 19.8% 18.7% 17.7% 16.5% 15.3% 14.1% 12.8% Figure 22.2: Capital and Operating Cost Sensitivity on IRR (Pre-tax) (Samuel Engineering 2013)

30.0%

25.0%

20.0%

15.0% IRR

10.0%

5.0%

0.0% 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 Copper 6.2% 9.4% 12.3% 15.0% 17.7% 20.0% 22.4% 24.6% 26.7%

Figure 22.3: Copper Price per Pound Sensitivity on IRR (Pre-tax) (Samuel Engineering 2013)

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7,000

6,000 Millions 5,000

4,000 8%

@

3,000

NPV 2,000

1,000

‐

(1,000) 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 Copper ‐474 390 1,253 2,118 3,031 3,846 4,711 5,575 6,439

Figure 22.4: Copper Price per Pound Sensitivity on NPV @ 8% (Pre-tax) (Samuel Engineering 2013)

22.5 Mine Life and Capital Payback The operating life of Los Azules is estimated at 34.9 years assuming a processing rate of 120,000 tonnes per day. This excludes a 2.5-year preproduction stripping period. At this processing rate, and at a copper price of $3.00 per pound, the initial capital pre-tax payback period is projected to be 3.8 years after the start of commercial mining.

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23.0 Adjacent Properties

Not used. There are no adjacent properties that are relevant to this report.

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24.0 Other Relevant Data and Information

24.1 Stakeholder Mapping Asesoría Ambiental of San Juan, Argentina carried out a stakeholder mapping of San Juan and Calingasta during 2011. The study was performed according to IFC and Equator Principle guidelines. The study focused on the Department of Calingasta, which would be similar to a county in North America, and the city of San Juan, which is the capital of the province of San Juan.

The three principal communities in the Department of Calingasta are Barreal, Villa Calingasta and Tamberías. According to the 2010 census, the Department of Calingasta has a population of 8,453, with approximately 4,500 located in the town of Barreal, 2,700 in Villa Calingasta and 1,300 in Tamberías. The economy of Barreal is based mainly on tourism, while Calingasta is identified with now inactive alum mining and Tamberías with farming. San Juan, with a population of 471,000 (INDEC 2010), is the provincial capital.

The province of San Juan has benefited substantially from the development of Barrick’s Veladero and Pascua Lama projects and Yamana’s Gualcamayo mine. The government of San Juan is strongly pro- mining, as is the municipal government of Calingasta, which is the home of Troy Resource’s Casposo gold mine as well as the Project, Stillwater Mining’s Altar copper project, Glencore Xstrata’s Pachón copper project and several other projects under exploration by senior and junior companies. The provincial government enjoys a very high approval level. No organized anti-mining or anti-development groups or organizations were identified by Asesoría Ambiental in the Department of Calingasta.

Asesoría Ambiental found that among the diverse individuals and groups it interviewed there was a broad appreciation that mining is the principal economic activity of the region, and it is the main lever of economic growth. Most people interviewed were supportive of mining development with favorable expectations for the future economic development of the region.

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25.0 Interpretation and Conclusions

25.1 Interpretation and Conclusions Interpretation and conclusions of the Qualified Persons of the Los Azules PEA are listed below:

 The results of the PEA indicate that the Project is favorable at this stage of development and demonstrating positive economic potential that warrants further work toward the next stage of development. The exploration program continues to demonstrate the potential for future growth of the resource.  The sample preparation, security, and procedures followed by McEwen Mining are adequate to support a mineral resource estimate.  Assay data provided by McEwen Mining were represented accurately and are suitable for use in resource estimation.  Exploration at Los Azules is relatively advanced and includes results from systematic geological mapping, geophysics (magnetic/IP), diamond core and reverse circulation drilling, geochemistry (surface and drill core) and preliminary metallurgical testing. Data obtained from Los Azules are of sufficient density and reliability to calculate resources.  There are no environmental issues existing or anticipated that could materially impact the ability to develop the Los Azules mine; however, glacier and vegas monitoring will continue as the Project advances.  There are no known factors related to metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, or political issues which could materially affect the mineral resource estimates.  The initial metallurgical testwork on the supergene and primary mineralization gave good recoveries into flotation concentrates. Autoclave leaching of the concentrates gave excellent recoveries of copper into solution. The supergene flotation concentrates were lower grade than would have been initially anticipated by the grade of the mineralization and the presence of higher grade secondary copper minerals. The lower than anticipated grade was caused by the presence of pyrite that floated along with the copper mineralization.  Pressure oxidative leach tests achieved 98% recovery of copper from the supergene concentrate and 99% recovery from the primary concentrate. Cyanide leaching of the pressure oxidative leach residue yielded 81% recovery of gold.  The cost to construct a 500 kV, 300 km transmission line has been included in the initial capital cost estimate. This power line would connect the Project to the Gran Mendoza Substation located in Mendoza, Argentina.  The Project has been designed to meet World Bank Guidelines for social and environmental management practices. Baseline studies completed to date have included surface and groundwater quality, meteorological, and social. Provisions have been made within the mine plan and operating costs to account for the environmental protection and rehabilitation of the Project once mining has been completed to meet the World Bank Guidelines.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves. There is no certainty that the results, projections or estimates in this PEA will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.

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25.2 Risks and Opportunities The following risks and opportunities associated with development of the Project have been identified by the Qualified Persons.

During the next phase of Project development, a number of risks will be investigated further and possibly reduced or eliminated. Similarly, further investigation and evaluation of some opportunities may allow them to be incorporated in the Project.

25.2.1 Overall Risks

A list of the Project’s overall risks is as follows:

 Long term depressed metals pricing, particularly for copper, together with the risks and uncertainties associated with metal price fluctuations.  Political risks and uncertainties affecting legislation, regulatory requirements or general business climate, including for example, (i) potential changes in existing laws and potential imposition of more onerous laws in the future; (ii) potential for expropriation or nationalization of the Project; (iii) potential imposition of royalty or tax regimes adversely affecting the Project; or (iv) increased costs or difficulties associated with financing the Project.  Shortage of skilled labor due to competing demands from the mining industry in general, and other mines in Argentina in particular.  High inflation, substantial price escalation of Project equipment, bulk materials, and consumables, and maintenance of existing or implementation of additional monetary controls or restrictions on import by Argentina.  Capital and operating cost escalations as Project plans and parameters change or are refined.  Failure to obtain or delay in obtaining necessary permits or approvals by government authorities.  Geotechnical risks within the pit are significant given the possible height of the pit walls, low RQDs and potential groundwater issues. The open pit plans presented in this PEA are much larger than in previous studies, resulting in pit slopes that climb the valley walls to higher levels. Flatter slopes would result in reduced mill and heap leach feeds and/or higher stripping ratios and correspondingly higher mining costs  The San Juan government energy regulation entity (EPRE) designed a master plan to connect San Juan to the national grid through a new 500 kV transmission line originating in Mendoza, Argentina. A provincial law recently ratified requires that all mining companies in the San Juan region contribute to the financing of the master plan. The amount has yet to be determined by the authorities.  Diesel fuel is a significant component of the mine operating costs. Higher fuel prices could impact project returns given the stripping ratio, pit depth, and corresponding long haulage profiles.

25.2.2 Back-In Right Risk

Certain portions of the northern part of the Project that were formerly held by Xstrata and transferred to Minera Andes were subject to an underlying option agreement between Xstrata and a subsidiary of TNR Gold Corp. This agreement was the subject of litigation in the Supreme Court of British Columbia, Canada. In November 2012, McEwen Mining and TNR Gold Corp. agreed that all claims and counterclaims would be discontinued or resolved. The material terms of the settlement included that: (i) TNR would receive 1,000,000 common shares of McEwen Mining; (ii) TNR would transfer the Escorpio IV claim to McEwen

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Mining; and (iii) the Xstrata-Solitario Agreement will be amended so TNR will retain a Back-in Right for up to 25% of the equity in the Solitario Properties. The Back-in Right is only exercisable after the completion of a feasibility study. To exercise, TNR must pay two times the expenses attributable to the back-in percentage (i.e. paying 2 × 25% of all the costs attributable to the Solitario Properties). Upon backing-in, TNR may elect to continue to participate in the Project or be diluted down to a 0.6% NSR on Solitario Properties if the equity interest reaches 5% or less. None of these possible outcomes have been considered in the cash flow included in the Technical Report.

The Solitario Properties subject to this back-in right are as follows: Escorpio I, Escorpio II. Escorpio III, Escorpio IV, Totora and Totora II.

25.2.3 Mining Investment Law Risk

Mining Investment Law 240196 includes article 23, which relates to the preservation of the environment. In order to prevent and correct any impacts to the environment due to mining activities, companies may establish a special provision for that purpose. The annual amount shall be left to the criterion of the company, but shall be considered deductible for income tax purposes up to a sum equivalent to five percent of the operational costs of material extraction. The PEA cash flow includes $110,231,000 for reclamation and closure in the last year of mine life, Year 35. No cash accrual, bond, or other such mechanism has been included. Additionally, no progressive reclamation costs have been included through mine life.

25.2.4 Opportunities

Substantial opportunities for improving the Project’s potential viability exist. They include:

 Higher metals pricing, particularly for copper, than used as a long term forecast in the financial model.  Additional metallurgical optimization test work may result in higher metallurgical recoveries and/or better concentrate grades.  More cost effective development with more detailed information.  Increased field investigation and design may improve the design concept and construction methodology.  There is some potential to expand mineral resources of the deposit. Further infill drilling, metallurgical testing, geotechnical investigations and cost estimating will be necessary to convert mineral resources to reserves.  An alternative material haulage system could offer potential mine operating cost savings given the concentrator location and pit geometry. Locating the primary crusher near the pit exit on the northwest side of the pit and transporting material by high angle conveyor above the west wall could save over 200 meters of lift and 3.2 kilometers of haulage distance for trucks in much of the deposit. In-pit or ex-pit semi-mobile crushers could also be examined as a way to reduce the number of haulage trucks. The southern crests of Phases 1 and 2 are approximately 1.5 kilometers north of the ultimate pit crest, which may allow the primary crusher to be located closer to the active pit areas, but require periodic moves as new pushbacks are developed.  There is an opportunity to complete further metallurgical testwork to improve both the recovery and grade of the supergene material. The pyrite could be suppressed to improve the grade of the supergene concentrate while decreasing both the mass and the sulfur content. This would reduce

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the size of the pressure oxidative leach circuit and oxygen plant, thus reducing capital and operating expenditures. This approach would decrease the gold recovery if there is significant gold in the pyrite.  The concentrate contains silver which may be recoverable. No test work has been performed to determine what process would be suitable for silver recovery from the autoclave residue to determine the capital and operating costs.  There is a future opportunity to optimize overall pit slopes by incorporating controlled blasting and/or single benching to steepen bench face angles as well as an opportunity to lessen the degree of pit slope depressurization required from mine dewatering.

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26.0 Recommendations

Based on the results of this Preliminary Assessment, the authors recommend that McEwen Mining complete tasks to further de-risk the Project. A description of the recommended tasks and an estimate of the costs are provided in Table 26.1.

Table 26.1 Estimated Cost for De-Risking Tasks Estimated Cost Description (US$000) 1. Complete condemnation drilling for facility siting, including 1,920 2400 meters of DD drilling ($800/m allowance) 2. Management and coordination of de-risk activities, cost and 300 schedule monitoring, contract administration 3. Additional mine geotechnical evaluation of pit slope stability which may include drilling of additional geotechnical core 1,900 holes (approx. 2000 m), structural mapping, rock strength testing and detailed stability analysis 4. Conduct metallurgical test work on expanded resource, including optimization of recovery and grade for the supergene material, confirmation of gold recovery from autoclave residue, investigation of silver recovery, and 300 variability testing on the new resource material. Conduct process mineralogy to assist in understanding the mineralization present 5. Conduct autoclave/oxygen plant capacity and sizing 50 analyses 6. Complete ultimate pit and internal mining phase designs, mine 40 production schedule trade-off and cut-off policy 7. Complete additional hydrogeological field investigations, engineering analysis, and computer modeling in support of 2,000 mine dewatering (drilling program (2400 meters) using a Barber rig) 8. Complete field geotechnical and laboratory investigations 750 including detailed seismic design work 9. Perform environmental baseline studies and permitting activities including vegas, archeological and rock glaciers 250 evaluation programs Total Estimated Cost Recommended for Future Work $7,510

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27.0 Date and Signature Pages

The effective date of this report is August 1, 2013.

Samuel Engineering, Inc. is a full-service, multi-discipline, project development and execution company based in Greenwood Village, CO, United States of America.

Qualified Persons for this report are:

 Richard Kunter, FAusIMM, CP, QP – Samuel Engineering, Inc.  Steven Pozder, PE, MBA – Samuel Engineering, Inc.  William Rose, PE – WLR Consulting, Inc.  Robert Sim, PGeo – Consulting Geologist, SIM Geological, Inc.  Bruce Davis, PhD, FAusIMM – Consulting Geostatistician, BD Resource Consulting, Inc.  Scott Elfen, PE - Ausenco  Jim Duff, PGeo – Consultant

NI 43-101 Technical Report Page 193

Richard Kunter, FAusIMM, CP, QP Samuel Engineering, Inc.

8450 E. Crescent Parkway, Suite 200, Greenwood Village, CO 80111 Telephone: 303-714-4856 Fax: 303-714-4800 Email: [email protected]

Certificate of Author I, Richard Kunter, FAusIMM, CP, QP, do hereby certify that: 1. I am the Chief Process Engineer of mining and metals for:

Samuel Engineering, Inc. 8450 E. Crescent Parkway, Suite 200, Greenwood Village, CO 80111 Telephone: 303-567-7531 Fax: 303-714-4800 Email: [email protected]

2. This certificate applies to the report entitled Canadian National Instrument 43-101 Technical Report McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective date August 1, 2013.

3. I graduated from the University of Idaho with a BS in Metallurgical Engineering in 1967 and a MS in Metallurgical Engineering in 1969.

4. I am a Chartered Professional Fellow of the Australian Institute of Mining and Metallurgy (No. 100346) and a Qualified Professional of the Mining and Metallurgical Society of America (No. 01217QP).

5. I have practiced my profession for 42 years and, during that period, have been involved in the preparation and review of technical and/or competent person’s reports, metallurgical recovery from mineral resources and other similar reports and studies on various properties domestically and internationally during the past 22 years. Prior to that I have held operating and technical positions in the mining and process industries for Western Mining Corporation in Australia as Research and Process Metallurgist, Newmont Mining as Mill Superintendent at Telfer Gold, Homestake Mining Company as Senior Corporate Metallurgist, Artech Recovery Systems as VP Technical and Advanced Science as Project Manager, in aggregate covering 20 years.

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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of the Technical Report entitled Canadian National Instrument 43-101 Technical Report McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective date 1 August 2013. I am responsible for the report preparation

NI 43-101 Technical Report Page 194

and Title Page, Table of Contents, Items 2, 3, 13, 17 (except 17.3.10 and 17.3.11), 18.5-18.7, 21.3.2, 23 and excerpts of information contained in Items 1, 5.6, 25, 26, 27, and 28.

8. I have not visited or examined Los Azules property in the field.

9. I have no prior involvement with the property that is the subject of this report and I hold no interests in, nor do I expect to receive any interests, direct or indirect from McEwen Mining, Inc. or any associated company.

10. As of 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.

11. I am independent of the issuer applying all of the tests in Section 1.5 of National Instrument 43- 101.

12. 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.

13. I consent to the public filing of this Technical Report.

Signed and dated at Greenwood Village, on this 1st day of November 2013.

/Original signature and seal on file/ ______Richard Kunter, FAusIMM, CP, QP

NI 43-101 Technical Report Page 195

STEVEN A. POZDER, P.E., MBA Samuel Engineering, Inc.

8450 E. Crescent Parkway, Suite 200, Greenwood Village, CO 80111 Telephone: 303-714.4828 Fax: 303-714-4800 Email: [email protected]

CERTIFICATE OF QUALIFIED PERSON

I, Steven A. Pozder, P.E. do hereby certify:

1. I am the Director of Engineering and Analysis – practicing at Samuel Engineering, Inc., 8450 East Crescent Parkway, Suite 200, Greenwood Village, CO 80111, U.S.A. 2. This certificate applies to the report entitled Canadian National Instrument 43-101 Technical Report McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective date August 1, 2013. 3. I am a graduate of the University of Denver with a B.S. in Mechanical Engineering in 1988. I am a graduate of the University of Denver with an M.B.A. in General Business in 1994. 4. I am registered as a Professional Engineer (P.E.) with the State of Colorado, Registration Number 29144. 5. I have practiced my profession as a Mechanical Engineer and Project Manager in mineral processing and mining for over 25 years. My relevant experience for the purpose of the Technical Report is:  I have worked as a consulting engineer on mining projects in roles such a mechanical engineer, project engineer, area manager, study manager, and project manager. Projects have included Scoping Studies, Prefeasibility Studies, Feasibility Studies, basic engineering, detailed engineering and startup and commissioning of new projects.  In engineering positions I have reviewed and estimated capital and operating costs including power requirements, reagent costs, labor requirements and costs, etc. and completed economic analyses for 18 years. 6. I have read the definition of “qualified person” set out in National Instrument (NI) 43-101, and do certify that, by reason of my education, affiliation with a professional association (as defined by NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101. 7. I have not visited the Project Site. 8. I am responsible for preparation of sections 19, 21.1, 21.2, 22, and portions of 1, 25, 26, 27, and 28. 9. I am independent of the issuer, McEwen Mining, applying the tests set out in section 1.5 of NI 43-101. 10. I have had no prior involvement with the property that is the subject of the Technical Report.

NI 43-101 Technical Report Page 196

11. I have read the National Instrument 43-101 Standards of Disclosure for Mineral Projects and the Companion Policy 43-101CP, the “Instrument.” The sections of the technical report that I am responsible for have been prepared in compliance with the Instrument. 12. As of the date of this certificate, to my knowledge, information and belief, this Report contains all the scientific and technical information that is required to be disclosed to make the technical report not misleading. 13. I consent to the public filing of this Technical Report.

Signed and dated at Greenwood Village, on this 1st day of November 2013.

/Original signature and seal on file/

Steven A. Pozder, P.E.

NI 43-101 Technical Report Page 197

Bruce M. Davis, FAusIMM BD Resource Consulting, Inc. 4253 Cheyenne Drive, Larkspur, CO 80118 USA Telephone: 303-694-6546 Fax: 303-916-5421 Email: [email protected]

Certificate of Author

I, Bruce Davis, FAusIMM, do hereby certify that:

1. I am an independent consultant of:

BD Resource Consulting, Inc. 4253 Cheyenne Drive Larkspur, CO 80118 USA

2. I graduated with a Doctor of Philosophy degree from the University of Wyoming in 1978.

3. I am a fellow of the Australasian Institute of Mining and Metallurgy, Registration Number 2111185. 4. I have practiced my profession continuously for 33 years and have been involved in geostatistical studies, mineral resource and reserve estimations and feasibility studies on numerous underground and open pit base metal and gold deposits in Canada, the United States, Central and South America, Europe, Asia, Africa and Australia.

5. 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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I am responsible for the preparation of sections 11, 12, 14, and portions of 1, 25, 26, 27, and 28 of the Technical Report titled “Canadian National Instrument 43-101 Technical Report McEwen Mining Inc., Los Azules Copper Project, San Juan Province, Argentina”, with an effective date of August 1, 2013 (the “Technical Report”).

7. I personally inspected the Los Azules property from January 23 to January 25, 2012.

8. I have had prior involvement with the property that is the subject of the Technical Report. I was a co-author of two prior NI 43-101 Technical Reports dated September 26, 2008 and December 16, 2010.

9. As of the effective date of the Technical Report, 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. 10. I am independent of the issuer applying all of the tests in Section 1.5 of NI 43-101.

NI 43-101 Technical Report Page 198

11. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form. 12. I consent to the public filing of this Technical Report.

Signed and dated on this 1st day of November 2013.

/Original signature and seal on file/ ______

Bruce M. Davis, FAusIMM

NI 43-101 Technical Report Page 199

Robert Sim, PGeo SIM Geological Inc. 6810 Cedarbrook Place, Delta, British Columbia, Canada V4E 3C5 Telephone: 604-596-6339 Fax: 604-596-6367 Email: [email protected]

Certificate of Author

I, Robert Sim, PGeo, do hereby certify that:

1. I am an independent consultant of:

SIM Geological Inc. 6810 Cedarbrook Place Delta, British Columbia, Canada V4E 3C5

2. I graduated from Lakehead University with an Honours Bachelor of Science (Geology) in 1984.

3. I am a member, in good standing, of the Association of Professional Engineers and Geoscientists of British Columbia, License Number 24076.

4. I have practiced my profession continuously for 28 years and have been involved in mineral exploration, mine site geology and operations, mineral resource and reserve estimations and feasibility studies on numerous underground and open pit base metal and gold deposits in Canada, the United States, Central and South America, Europe, Asia, Africa and Australia.

5. 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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I am responsible for the preparation of Sections 10, 12, 14, and portions of 1, 25, 26, 27, and 28 of the Technical Report titled “Canadian National Instrument 43-101 Technical Report, McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina”, with an effective date of August 1, 2013 (the “Technical Report”).

7. I personally inspected the Los Azules property from March 30 to April 1, 2008 and again March 21 23, 2010.

8. I have had prior involvement with the property that is the subject of the Technical Report. I was a co-author of prior NI 43-101 Technical Reports dated September 26, 2008, December 16, 2010, and August 1, 2012.

9. As of the effective date of the Technical Report, 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.

NI 43-101 Technical Report Page 200

10. I am independent of the issuer applying all of the tests in Section 1.5 of NI 43-101.

11. I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

12. I consent to the public filing of this Technical Report.

Signed and dated on this 1st day of November 2013.

/Original signature and seal on file/ ______

Robert Sim, PGeo

NI 43-101 Technical Report Page 201

William L. Rose, P.E. Certificate of Author

I, William L. Rose, P.E., do hereby certify that:

1. I am the Principal Mining Engineer of:

WLR Consulting, Inc. 9386 West Iowa Avenue Lakewood, CO 80232-6441 U.S.A

2. This certificate applies to the report Canadian National Instrument 43-101 Technical Report, McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective 1 August 2013.

3. I graduated with a Bachelor of Science degree in Mining Engineering from the Colorado School of Mines in 1977.

4. I am a:

 Registered Professional Engineer in the State of Colorado (No. 19296)  Registered Professional Engineer in the State of Arizona (No. 15055)  Registered Member of the Society for Mining, Metallurgy and Exploration, Inc. (No. 2762350RM)

5. I have worked as a mining engineer for a total of 36 years since my graduation from college.

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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of Sections 15, 16.1, 16.2, 16.3, 16.6, 16.7, 21.3.1, and portions of 1, 25, 26, 27, and 28.

8. I have personally inspected the subject property on March 21-23, 2010.

9. I have had prior involvement with the property that is the subject of the Technical Report. I was a co- author of two prior NI 43-101 Technical Reports dated March 19, 2009 and December 16, 2010.

10. As of 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.

11. I am independent of the issuer applying all of the tests in Section 1.5 of National Instrument 43-101.

12. 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.

NI 43-101 Technical Report Page 202

13. I consent to the public filing of this Technical Report.

Signed and dated on this 1st day of November 2013.

/Original signature and seal on file/ ______

William L. Rose, P.E.

NI 43-101 Technical Report Page 203

Scott C. Elfen, P.E.

Ausenco 855 Homer Street, Vancouver, V6B 2W2, Canada Telephone: 511-2034600 Fax: 511-2034630 Email: [email protected]

Certificate of Author

I, Scott C. Elfen, do hereby certify that:

1. I am a senior engineer with:

Ausenco 855 Homer Street Vancouver, V6B 2W2, Canada

2. This certificate applies to the report Canadian National Instrument 43-101 Technical Report, McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective 1 August 2013.

3. I graduated with a Bachelor of Science degree in Civil Engineering from the University of California, Davis in 1991.

4. I am a Registered Civil Engineer in the State of California by exam since 1996 (No. C56527). I am also a member of the American Society of Civil Engineers (ASCE).

5. I have worked as an engineer for a total of nineteen years since my graduation from university.

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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of Sections 16.4, 16.5, 17.3.10, 17.3.11, 18.1 thru 18.4, 18.8 and portions of 1, 5, 20, 21, 25, 26, 27 and 28.

8. I inspected the Los Azules property on February 21, 2008 for 2 days.

9. I have had prior involvement with the property that is the subject of the Technical Report. I was a co- author on a prior NI 43-101 Technical Report, “Canadian National Instrument 43-101 Technical Report in Support of the Preliminary Assessment on the Development of the Los Azules Project, San Juan Argentina” dated March 19, 2009.

10. As of 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.

NI 43-101 Technical Report Page 204

11. I am independent of McEwen Mining, Inc. applying all of the tests in Section 1.5 of NI 43-101.

12. 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.

13. I consent to the public filing of this Technical Report.

Signed and dated on this 1st day of November 2013.

/Original signature and seal on file/ ______

Scott C. Elfen, P.E.

NI 43-101 Technical Report Page 205

James K. Duff, PGeo

212 W Ironwood Dr., Suite 134, Coeur d’Alene, ID 83814 Telephone: 509-995-9943 Email: [email protected]

Certificate of Author

I, James K. Duff, PGeo, do hereby certify that: 1. I am a part time consultant to McEwen Mining Inc.

2. This certificate applies to the report entitled Canadian National Instrument 43-101 Technical Report McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective date of August 1, 2013.

3. I graduated with a Bachelor of Science degree in Geology from the University of Nevada (Reno) in 1968, and I received a Master’s of Science degree in Geology from the University of Idaho (Moscow) in 1978.

4. I am a:  Licensed Professional Geologist in the State of Idaho (No. PGL-1411)  Registered Member of the Society of Mining, Metallurgy and Exploration (No. 859022)

5. I have practiced my profession for 45 years since my graduation from the University of Nevada. I was employed by exploration and operating companies including Pan-Nevada Mining Co., Bear Creek Mining Co. (Kennecott Copper Co.), Idarado Mining Co. (Newmont Mining Co.), Cyprus Mining Corp., White Pine Copper Co., The Bunker Hill Co., St. Joe Minerals/St. Joe Gold, Bond International Gold, Coeur d’Alene Mines Corp. and Minera Andes Inc. (now McEwen Mining Inc.) in a series of positions with increasing levels of responsibility culminating in senior management positions. I have worked as a consultant since I retired from Minera Andes Inc. on January 31, 2012.

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 fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of portions of the Technical Report entitled Canadian National Instrument 43-101 Technical Report McEwen Mining Inc. Los Azules Porphyry Copper Project, San Juan Province, Argentina, effective date 1 August 2013. I am responsible for Items 4, 5, 6, 7, 8, 9, 10, 24 and portions of Items 1, 20, 25, 26, 27, and 28.

NI 43-101 Technical Report Page 206

8. I visited the site in December 2009, January, March and December 2010, February, April and December 2011 and January 2012 in my capacity of the former COO of Minera Andes Inc. and I visited the site as a consultant to McEwen Mining Inc. in March 2012, April 2012 and March 2013.

9. I was the Chief Operating Officer of Minera Andes Inc. from March 2009 through January 2012, during which time I was responsible for exploration and engineering activities at Los Azules.

10. I am currently employed as a part time consultant by McEwen Mining Inc. I own stock options in McEwen Mining, and I therefore do not meet the criteria in Section 1.5 of National Instrument 43- 101 as being independent of the issuer.

11. As of 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.

12. 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.

13. I consent to the public filing of this Technical Report.

Signed and dated on this 1st day of November 2013.

/Original signature and seal on file/ ______James K. Duff

NI 43-101 Technical Report Page 207

28.0 References & Glossary of Terms

28.1 References ALMANDOZ, Guillermo, (2010a), Summary Los Azules Project–– Argentina. 4 p.

ALMANDOZ, Guillermo, (2010b), Summary Los Azules Project–– Argentina. 12 p.

BATTLE MOUNTAIN GOLD, (1999), Los Azules Project, San Juan, Argentina. Informe Inédito.

CANADIAN NATIONAL INSTRUMENT 43-101 Technical Report in Support of the Preliminary Assessment on the Development of the Los Azules Project, San Juan Province Argentina prepared by Randolph P. Schneider, MAusIMM, Samuel Engineering, Inc. Greenwood Village, Colorado USA effective March 19, 2009.

CANADIAN NATIONAL INSTRUMENT 43-101 Technical Report Updated Preliminary Assessment Los Azules Project, San Juan Province, Argentina prepared by Kathleen Altman, PhD, PE, Samuel Engineering, Inc. Greenwood Village, Colorado USA effective December 16, 2010.

CANADIAN NATIONAL INSTRUMENT 43-101 Technical Report Los Azules Porphyry Copper Project, San Juan Province, Argentina prepared by D. Ernest Winkler, PE, Samuel Engineering, Inc. Greenwood Village, Colorado USA effective August 1, 2012.

CIM Definition Standards for Mineral Resources and Reserves, November 2010.

DePANGHER, M., (2008), Spectrum Petrographics, Minera Andes Petrographic Report # URC, Informe Inédito.

EMMONS, W.H., (1940), The Principles of Economic Geology. McGraw-Hill.

GONZALEZ, E., y otros, (2005), Informe de Actividades de Exploraciones, Informe Técnico. Informe Inédito.

GORDILLO, D., (2009), Minera Andes base de datos Perforaciones Los Azules. Archivo inédito.

INDEC 2010 Census, Calingasta Department

IZAP, LY, (2007), Estudio Petrográfico, Noviembre 2007.

JEMIELITA, R., (2010), Los Azules Porphyry Copper Deposit, San Juan Province, Argentina. Unpublished consultant report

JOURNEL AND Huijbregts, Mining Geostatistics, 1978.

KUTER, J., (2003), Data presentation of geophysics at Los Azules-Minera Andes: Xstrata and MIM Argentina Exploraciones S.A. Informe Inédito.

KUTER, J, (2003), Xstrata Los Azules Interpretación Geológica-Geofísica. Informe Inédito

NI 43-101 Technical Report Page 208

LASRY, A., (2005), Estudio de Alteración Hidrotermal. Rojas y Asociados-Minera Andes. Internal Report.

MEGLIOLI, A (2012), Identificación y Caracterización de Geoformas Glaciares y Peri-glaciares, Proyecto Los Azules, San Juan, Argentina. Unpublished consultant report

PANTELEYEV, A., (1995), Porphyry Cu+/-Mo+/-Au in Selected British Columbia Mineral Deposit Profiles, Volume 1 - Metallics and Coal, Lefebure, D.V. and Ray, G.E., Editors, British Columbia Ministry of Energy of Employment and Investment, Open File 1995-20, pages 87-92.

PLENGE, Metallurgical Investigation No. 6976-6991/7026-7027 Minera Andes Incorporated Los Azules Copper Project Metallurgical Scoping Study, July 21, 2008.

PLENGE, Metallurgical Investigation No. 7028 Minera Andes Incorporated Los Azules Copper Project Composite No. 3, September 12, 2008.

PLENGE, Metallurgical Investigation No. 7652-54 Minera Andes Incorporated Los Azules Copper Project Copper Gold Project, 31 March 2010.

PLENGE, Metallurgical Investigation No. 9247-69 Minera Andes Incorporated Los Azules Copper Project Flotation Variability and Optimization, Copper Bioleaching HIPOX of Concentrate, November 30, 2012.

PRATT, W., (2010), Los Azules Porphyry Cu Project, San Juan, Argentina. Unpublished company report for Minera Andes, APrimaryl, 2010. 26 p.

ROJAS, N., (2006), Los Azules Project, drilling completed in 2006: Geological report. Informe Inédito

ROJAS, N., (2007), Plan De Exploraciones en Proyecto Los Azules, Provincia de San Juan, Argentina. Período 2007-2009. Informe Inédito.

ROJAS, N, (2008),Technical Report on Los Azules Project, Andean Cordillera Region, Calingasta Department, San Juan, Province, Argentina Informe Inédito.

ROJAS, N, 2010. Informe técnico proyecto Los Azules, temporadas 2007-2008. Provincia de San Juan, Argentina. Unpublished report for Minera Andes.

ROJAS, Nivaldo (February 2008), NI 43-101 Technical Report on Los Azules Project, Andean Cordillera Region, Calingasta Department, San Juan Province, Argentina

SIEYE, Hugo Gil Figueroa & Asoc (September 2008), Preliminary Feasibility Study, Electric Energy Supply Study –– Preliminary Report #2

SILLITOE, Richard H., and PERELLO, Jose, (2005), Andean Copper Province: Tectonomagmatic Settings, Deposit types, Metallogeny, Exploration and Discovery. Economic Geology 100th Anniversary Volume. Pp. 845-890.

SUMAY, C., and Meissi, E., (2006), Estudio petro-calcográfico: Examina, Agosto 2006, San Juan, Argentina. Informe Inédito

NI 43-101 Technical Report Page 209

TSCHABRUN, D. B., Sim, R., Davis, B. (Revised January 8, 2009), NI 43-101 Technical Report, Los Azules Copper Project, San Juan Province, Argentina

ULRIKSEN, C., (2004), (2007), Los Azules drilling campaign. Geological Report, Rojas y Asociados, S.A. Informe Inédito

ULRIKSEN, C., (2007), Geological Report-Los Azules (2007 campaign). Geological report: Rojas y Asociados, S.A. Informe Inédito.

ZURCHER, L., (2008a), Geology of the Los Azules Porphyry Copper Project, San Juan, Argentina (Preliminary Progress Report): August 3 (revised August 25), 2008 internal Minera Andes, Inc. report, ESMI, Tucson, AZ, 12 pages.

ZURCHER, L., (2008b), Geochemistry of Rocks from the Los Azules Porphyry Deposit, San Juan, Argentina (Addendum to ESMI August 25, 2008 Report): October 27, 2008 internal Minera Andes, Inc. progress report, ESMI, Tucson, AZ, 14 pages.

ZURCHER, L., (2008c), U-Pb Geochronology of Rocks from the Los Azules Porphyry Deposit, San Juan, Argentina (Addendum to ESMI August 25, 2008 Report): October 30, 2008 internal Minera Andes, Inc. progress report, ESMI, Tucson, AZ, 8 pages.

ZURCHER, L., (2009), Interpretative Basement Geology (Map). Los Azules Project.

ZURCHER, L., Hall, D., Gordillo, D., and Valle, N., (2008), Geology of the Los Azules Porphyry Copper Project, San Juan, Argentina (PowerPoint Presentation): October 14, 2008, internal Minera Andes, Inc. report, ESMI, Tucson, AZ, 18 pages.

28.2 Glossary Acid-Base Accounting (ABA): Test methods and calculations that predict the balance between acid generating potential and acid neutralizing potential of materials, particularly mine waste materials.

Acid Generating Material (AGM): Materials that react with water and oxygen to form acids and to mobilize metals into the resulting solutions. An example is mine tailings containing sulfides (ex. Pyrite) that react to form sulfuric acid.

Acid Generating Potential (AGP): Test methods and calculations used to measure of the potential of material to become acid generating material.

Acid Neutralizing Potential (ANP): Test methods and calculations used to measure of the potential of material to neutralize acid generating material.

Acid Rock Drainage (ARD): A natural occurrence within some environments as part of the rock weathering process but is exacerbated by large-scale earth disturbances characteristic of mining and other large construction activities, usually within rocks containing an abundance of sulfide minerals. (See Acid Generating Material).

NI 43-101 Technical Report Page 210

Allochthonous: An adjective for rocks, deposits, etc.; that are found in a place other than where they and their constituents were formed.

Anticline: A fold of rock layers that slope downward on both sides of a common crest. Anticlines form when rocks are compressed by plate-tectonic forces. They can be as small as a hill or as large as a mountain range.

Apophysis: A branch from a dike or vein.

ASTM: American Society for Testing and Materials.

Aqua Regia: a yellow, fuming liquid composed of one part nitric acid and three to four parts hydrochloric acid: used chiefly to dissolve metals as gold, platinum, or the like.

Batholith: A large mass of igneous rock that has intruded and melted surrounding strata at great depths. Batholiths usually have a surface area of over 100 km2 (38 mi2).

BCM: Bank Cubic Meter. One cubic meter of material as it lies in the natural state.

Bornite: (a.k.a. peacock ore) An important brownish-bronze, lustrous copper ore with the composition Cu5FeS4 that tarnishes to purple when exposed to air. The mineralogical abbreviation is bn.

Breccia: A rock composed of angular fragments embedded in a fine-grained matrix. Breccias form from explosive volcanic ejections, the compaction of talus, or plate tectonic processes. Breccias are different from conglomerates in that the fragments they contain are angular instead of rounded.

Chalcopyrite: A brassy yellow, metallic, tetragonal mineral, usually occurring as shapeless masses of grains. Chalcopyrite is found in igneous rocks and copper-rich shales, and it is an important ore of copper. Because of its shiny look and often yellow colour, it is sometimes mistaken for gold, and for this reason it is also called fool's gold. Chemical formula: CuFeS2. The mineralogical abbreviation is cp.

Colluvium: Loose earth material that has accumulated at the base of a hill, through the action of gravity, as piles of talus, avalanche debris, and sheets of detritus moved by soil creep or frost action.

Comminution: To reduce to powder; pulverize.

Culvert: A drain or channel crossing under a road, sidewalk, etc.

Cyanidation: A highly controversial, though most commonly used, metallurgical technique for extracting gold from low-grade ore.

Dendrochronology: The science dealing with the study of the annual rings of trees in determining the dates and chronological order of past events.

Dip: The angle at which a stratum is inclined from the horizontal, measured perpendicular to the strike and in the vertical plane.

NI 43-101 Technical Report Page 211

Drill Hole: A circular hole made by drilling either to explore for minerals or to obtain geological information.

Epizone: The zone of metamorphism characterized by moderate temperature, low hydrostatic pressure, and powerful stress. The outer depth zone of metamorphic rocks.

En Echelon: Describing parallel or subparallel, closely-spaced, overlapping or step-like minor structural features in rock, such as faults and tension fractures, that are oblique to the overall structural trend.

Exploration: The search for economic mineral by geological surveys, prospecting or use of tunnels, drifts or drill holes.

Facies: The appearance and characteristics of a sedimentary deposit, esp. as they reflect the conditions and environment of deposition and serve to distinguish the deposit from contiguous deposits.

Fault: A fracture in the continuity of a rock formation caused by a shifting or dislodging of the earth's crust, in which adjacent surfaces are displaced relative to one another and parallel to the plane of fracture.

Fluvial: Features created by the actions of a river. Also called “glaciofluvial” when originating from the meltwater rivers of a glacier.

FOB: The acronym for “free on board”. The FOB price is the sales price of product loaded in a vessel at the port and excludes freight or shipping cost.

Freeboard: The height of the watertight portion of a structure (ex. tailings dam) above a given level of water in a river, lake, etc.

Front End Loader: A tractor or wheeled type loader having a shovel or bucket that dumps at the end of an articulated arm located at the front of the vehicle.

Geophysical Log: A graphic record of the measured or computed physical characteristics of the rock section encountered by a probe or sonde in a drill hole, plotted as a continuous function of depth. Also commonly referred to as an e-log.

Geohazards: Naturally occurring destructive forces such as volcanoes, earthquakes, landslides, and avalanches.

Geotextiles: Permeable fabrics which, when used in association with soil, have the ability to separate, filter, reinforce, protect, or drain. Applications include roads, airfields, railroads, embankments, retaining structures, reservoirs, canals, dams, bank protection and coastal engineering.

Glacial Outburst Flood: a sudden and often catastrophic flood that may occur during a volcanic eruption, or when a lake contained by a glacier or a terminal moraine dam fails. This can happen due to erosion, a buildup of water pressure, an avalanche of rock or heavy snow, an earthquake or cryoseism, or if a large enough portion of a glacier breaks off and massively displaces the waters in a glacial lake at its base.

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Gossan: An exposed, oxidized portion of a mineral vein, especially a rust-coloured deposit of mineral matter at the outcrop of a vein or orebody containing iron-bearing materials.

Graben: A depressed block of land bordered by parallel faults.

Greenfield: A project which lacks any constraints imposed by prior work, with no need to demolish or remodel any existing structures (i.e. new construction).

Highwall: The unexcavated face of exposed overburden and ore in an opencast mine or the face or bank of the uphill side of a contour strip-mine excavation.

Imbrication: A sedimentary structure in which flat pebbles are uniformly tilted in the same direction.

Isopach: A line drawn on a map connecting all points of equal thickness of a particular geologic formation.

LCM: Loose Cubic Metre. One cubic metre of material as it lies in a post-disturbed state, such as a stockpile.

Lease: A contract between a landowner and a lessee, granting the lessee the right to search for and produce ore upon payment of an agreed rental, bonus and/or royalty.

Little Ice Age (LIA): The period from about 1400-1900 a.d., characterized by expansion of mountain glaciers and cooling of global temperatures, especially in the Alps, Scandinavia, Iceland, and Alaska. The Little Ice Age followed the Medieval Warm Period.

Mass Wasting: (See Slope Creep)

Mineable: Capable of being mined profitably under current mining technology, environmental, and legal restrictions, rules and regulations.

ML: Metal Leaching.

Molybdenite: A soft, lead-gray hexagonal mineral that is the principal ore of molybdenum. It occurs as sheetlike masses in pegmatites and in areas where contact metamorphism has taken place.

Moraine: A mass of till (boulders, pebbles, sand, and mud) deposited by a glacier, often in the form of a long ridge. Moraines typically form because of the plowing effect of a moving glacier, which causes it to pick up rock fragments and sediments as it moves, and because of the periodic melting of the ice, which causes the glacier to deposit these materials during warmer intervals. A moraine deposited in front of a glacier is a terminal moraine. A moraine deposited along the side of a glacier is a lateral moraine. A moraine deposited down the middle of a glacier is a medial moraine. Medial moraines are actually the combined lateral moraines of two glaciers that have merged.

NPAG: Non-Potentially Acid Generating

Ore: A mineral, rock, or natural product serving as a source of some metallic substance (ex. copper, gold, etc.), nonmetallic substance (ex. Sulfur), or a native metal, that can be mined at a profit.

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Orography: The study of the physical geography of mountains and mountain ranges.

Outcrop: Economic mineral, which appears at or near the surface; the intersection of ore with the surface.

Overburden: Waste earth and rock covering a useful or economic mineral deposit. PAG: Potentially Acid Generating.

Permeability: The capability of a porous rock or sediment to permit the flow of fluids through its pore spaces.

Preliminary Assessment (PA): A Preliminary Assessment study that includes an economic analysis of the potential viability of mineral resources taken at an early stage of the project prior to the completion of a prefeasibility study. pH: The potential of hydrogen. Numerically, it is the logarithm of the reciprocal of hydrogen ion concentration in gram atoms per litre of solution. Qualitatively, this is a measure of the acidity or alkalinity of a solution, numerically equal to 7 for neutral solutions, increasing with increasing alkalinity and decreasing with increasing acidity. The pH scale commonly in use ranges from 0 (highly acidic) to 14 (highly alkaline, or basic).

Physiography: The study of the natural features of the earth's surface, especially in its current aspects, including land formation, climate, currents, and distribution of flora and fauna.

Porosity: The ratio, expressed as a percentage, of the volume of the pores or interstices of a substance, as a rock or rock stratum, to the total volume of the mass.

Porphyry: An igneous rock containing the large crystals known as phenocrysts embedded in a fine-grained matrix.

Pyrite: The mineral pyrite, or iron pyrite, is an iron sulfide with the formula FeS2. This mineral's metallic luster and pale-to-normal, brass-yellow hue have earned it the nickname fool's gold due to its resemblance to gold. Pyrite is the most common of the sulfide minerals. The mineralogical abbreviation is py.

Reaction Wood: Formed by a woody plant in response to mechanical stress, and helps to position newly formed parts of the plant in an optimal position. This stress may be the result of wind exposure, excess of snow, soil movement, avalanches, etc. The reaction wood appears as asymmetric growth. The cambium in the affected part of the trunk is more active on one side, leading to thicker growth rings.

Reclamation: The restoration of land at a mining site after the ore has been extracted. Reclamation operations are usually conducted as production operations are taking place elsewhere at the site. This process commonly includes re-contouring or reshaping the land to its approximate original appearance, restoring topsoil and planting native grasses, trees and ground covers.

Rotary Drill: A drill machine that rotates a rigid, tubular string of drill pipe and drill collars to which is attached a bit for cutting rock to produce boreholes.

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Royalty: A share of the product or profit reserved by the owner for permitting another to use the property. A lease by which the owner or lessor grants to the lessee the privilege of mining and operating the land in consideration of the payment of a certain stipulated royalty on the mineral produced.

Run-of-Mine (ROM): The ore produced from the mine before it is separated and any impurities removed.

Slope Creep: (a.k.a. Downhill creep, or commonly just creep) The slow downward progression of rock and soil down a low grade slope; it can also refer to slow deformation of such materials as a result of prolonged pressure and stress. Creep may appear to an observer to be continuous, but it really is the sum of numerous minute, discrete movements of slope material caused by the force of gravity. Friction being the primary force to resist gravity is produced when one body of material slides past another offering a mechanical resistance between the two which acts on holding objects (or slopes) in place. As slope on a hill increases, the gravitational force that is perpendicular to the slope decreases and results in less friction between the material that could cause the slope to slide.

Stockwork: A metalliferous deposit characterized by the impregnation of the mass of rock with many small veins or nests irregularly grouped. Such deposits are typically worked in floors or stories.

Strike: The direction of the line formed by the intersection of the bedding plane of a bed or stratum of sedimentary rock with a horizontal plane.

Strip Ratio: The overburden material (tonnes) that must be removed to provide a unit weight of ore (tonne). In general, the lower the strip ratio, the more likely an ore body is to be mined by open pit methods.

Surface Mining: Methods of mining at or near the surface. Includes mining and removing ore from open cuts with mechanical excavating and transportation equipment and the removal of capping overburden to uncover the ore.

Syncline: A fold of rock layers that slope upward on both sides of a common low point. Synclines form when rocks are compressed by plate-tectonic forces. They can be as small as the side of a cliff or as large as an entire valley.

Tailings: Waste that has been separated from the ore in the metallurgical processing plant. Tailings Impoundment: a body of tailings confined within an enclosure or behind a dam.

Talus: Sharp, irregular rock fragments that have accumulated at the base of a cliff or slope. The concave slope formed by such an accumulation of rock fragments is called a talus slope.

Thrust Fault: A fault with a dip of 45 degrees or less over much of its extent, on which the hanging wall appears to have moved upward relative to the footwall.

Till: Unconsolidated, unstratified, and heterogeneous mixture of soil deposited by a glacier; consists of sand and clay and gravel and boulders mixed together.

Vug: A small cavity in a rock or vein, often with a mineral lining of different composition from that of the surrounding rock.

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