FINAL REPORT NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) Bear Creek Mining Corporation Document No.: A668-D03-04010-RT-0001_0 - MW/mw Revision: 0 Sedgman Chile SpA NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) Revision Status Revision Number Author Description Effective Date Approved By 0 All Issued For Client Approval 13-Sep-2017 JCT Distribution Company Name Contact Name Revision Date Bear Creek Mining Corporation EAM 0 26-Oct-2017 1. Santiago Av. Apoquindo 4501, Piso 17 +56 2 2365 6100 Las Condes Santiago 7580125 [email protected] CHILE www.sedgman.com Copyright Notice Sedgman © 2017 This Document is copyright. 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NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) Table of Contents 1 Executive Summary 1 1.1 PROPERTY AND LOCATION 1 1.2 ACCESSIBILITY, CLIMATE 2 1.3 HISTORY 3 1.4 GEOLOGICAL SETTING AND MINERALIZATION 3 1.5 DEPOSIT TYPES 4 1.6 EXPLORATION 4 1.7 DRILLING 5 1.8 SAMPLE PREPARATION, ANALYSES AND SECURITY 5 1.9 DATA VERIFICATION 5 1.10 MINERAL PROCESSING AND METALLURGICAL TESTING 6 1.11 MINERAL RESOURCE ESTIMATES 7 1.12 MINERAL RESERVE ESTIMATES 8 1.13 MINING METHODS 8 1.14 RECOVERY METHODS 9 1.15 PROJECT INFRASTRUCTURE 11 1.15.1 Transportation, Access, and Site Roads 11 1.15.2 Mine Service Facilities 13 1.15.3 Administration Facilities 13 1.15.4 Project Water Management 13 1.15.5 Power Supply 14 1.15.6 Waste Rock and Tailings Management Facilities 14 1.16 MARKET STUDIES AND CONTRACT 14 1.17 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT 14 1.18 CAPITAL AND OPERATING COST 15 1.19 ECONOMIC ANALYSIS 16 1.20 ADJACENT PROPERTIES 16 1.21 OTHER RELEVANT DATA AND INFORMATION 16 1.21.1 Objectives 17 1.21.2 Project Development Schedule 17 1.21.3 Project Management 17 1.21.4 Engineering 18 1.21.5 Procurement and Contracting 18 1.21.6 Construction 18 1.21.7 Commissioning and Startup 18 1.22 RECOMMENDATIONS 19 1.22.1 Geotechnical 19 1.22.2 Process Plant Design 19 1.22.3 Environmental Studies, Permitting and Social or Community Impact 20 1.22.4 Capital and Operating Cost 20 1.23 Risks 21 1.24 Opportunities 21 2 Introduction 22 2.1 Purpose 22 2.2 Sources of Information 23 2.3 Site Visit & Personal Inspections 25 2.4 Terms of Reference 25 3 Reliance on Other Experts 30 3.1 Mining Concessions 30 Page iii NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) 3.2 Surface Rights 30 3.3 Taxation and Social Costs 30 4 Property Description and Location 31 4.1 Location 31 4.2 Mineral Tenure 32 4.2.1 Summary 32 4.2.2 Purchase Agreements 32 4.2.3 Property Identification 33 4.2.4 Maintenance Obligations 36 4.2.5 Legal Standing 37 4.3 Surface Rights 37 4.4 Environmental Liabilities 38 4.5 Permitting 38 4.6 Water Supply 39 4.7 Environmental and Permitting 39 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 40 5.1 Accessibility 40 5.2 Local Resources and Existing Infrastructure 41 5.2.1 General 41 5.2.2 Available Labor Force 41 5.2.3 Power 42 5.2.4 Water 44 5.3 Climate 44 5.4 Physiography and Vegetation 44 6 History 46 6.1 Prior Ownership and Production 46 6.2 Historical Exploration and Estimates 47 7 Geology Setting and Mineralization 51 7.1 Regional Geology 51 7.2 Local and Property Geology 52 7.2.1 Lithology 52 7.2.2 Structure 54 7.2.3 Alteration 54 7.2.4 Mineralization 55 8 Deposit Types 61 9 Exploration 62 9.1 Geophysical Exploration 62 9.2 Trenching Exploration 65 9.3 Mapping 65 10 Drilling 66 10.1 BCM Drilling Exploration 66 10.2 Drill Hole Data and General Drilling Results 68 11 Sample Preparation, Analyses and Security 70 11.1 Sample Preparation 70 11.2 Analytical Procedures 71 11.2.1 Quality Assurance/Quality Control 71 11.3 Sample Security 77 11.4 QP Opinion on Adequacy 78 12 Data Verification 80 12.1 Site Inspection 80 Page iv NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) 12.2 IMC Audit 81 12.3 GRE Audit 83 12.3.1 Digital Project Database 83 12.3.2 Density Data 83 12.4 QP Opinion on Adequacy 84 13 Mineral Processing and Metallurgical Testing 85 13.1 Introduction 85 13.2 Samples 85 13.3 Mineralogy 88 13.4 Grindability Tests 90 13.5 Sequential Flotation Tests 91 13.5.1 Effect of Particle Size 91 13.5.2 Effect of Departments 92 13.5.3 Collectors 94 13.5.4 Activators 95 13.5.5 pH Regulators 95 13.5.6 Surface Modifiers 95 13.5.7 Rougher Concentrate Regrind 96 13.5.8 Summary of Sequential Locked-Cycle Test Results 96 13.5.9 Concentrate Quality 96 13.6 Alternative Flowsheet Arrangements 98 13.6.1 Bulk Flotation 98 13.6.2 Whole Ore Cyanidation Tests 98 13.6.3 Cyanidation Leaching of Flotation Tailings 99 13.7 Previous Metallurgical Recovery Model 99 13.8 Optimized and Current Continuous Predictive Metallurgical Model 100 13.8.1 Recovery of Lead to Lead Concentrate 101 13.8.2 Silver Recovery 103 13.8.3 Zinc Recovery 104 13.8.4 Zinc Recovery to Final Zinc Concentrate 106 13.8.5 Zinc Displacement to Lead/Silver Concentrate 107 13.8.6 Silver Recovery to Zinc Concentrate 107 13.8.7 Model Output Results 107 14 Mineral Resource Estimates 109 14.1 Block Model 109 14.1.1 Rock Type Boundaries 110 14.1.2 Density Assignment 111 14.1.3 Block Grade Estimation 111 14.1.4 Classification 127 14.1.5 Metallurgical Recovery Estimate 127 14.2 Acid Rock Drainage 130 14.3 Mineral Resources 131 15 Mineral Reserve Estimates 136 15.1 Introduction 136 15.2 Pit Optimization 136 15.2.1 Block Model 136 15.2.2 Topography 137 15.2.3 Optimisation Parameters 138 15.2.4 Whittle Optimization Results 141 15.2.5 Selection of Final Pit Limit 143 15.3 Mine Design 144 15.3.1 Final Pit Design 144 15.3.2 Internal Phase Designs 147 15.3.3 Haul Road Design 147 15.3.4 Short Term Stockpile Design 148 15.4 Mineral Reserves 149 Page v NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) 16 Mining Methods 151 17 Recovery Methods 172 17.1 Site Layout Considerations 172 17.2 Process Description 172 17.2.1 Primary Crushing and Coarse Ore Stockpile 172 17.2.2 Grinding and Classification Circuit Description 173 17.2.3 Lead Flotation 173 17.2.4 Zinc Flotation 174 17.2.5 Lead Concentrate Thickening and Filtration 176 17.2.6 Zinc Concentrate Thickening and Filtration 176 17.2.7 Tailings Plant Thickening and Filtering 176 17.2.8 Tailings Disposal 177 17.3 Process Design Criteria 177 17.3.1 Metallurgical Testing 177 17.3.2 Process Design Criteria 178 17.4 Water Requirement 185 17.4.1 Water Distribution Strategy 186 17.4.2 Fresh Water 188 17.5 Power Consumption 189 17.6 Control System 190 17.6.1 Process Control Philosophy 191 18 Project Infrastructure 192 18.1 Transportation 192 18.1.1 Access Road 193 18.2 Site Buildings and Facilities 199 18.2.1 Mine Service Facilities 199 18.2.2 Administration Facilities 200 18.2.3 Process Facilities 201 18.2.4 Residential Facilities 204 18.2.5 Communications 206 18.2.6 Water Supply and Management 207 18.2.7 Power Supply and Power Distribution 212 18.2.8 Communications System 213 18.2.9 Waste Rock and Tailings Management Facilities 213 19 Market Studies and Contracts 216 19.1 Concentrate Marketing 216 19.1.1 Markets 216 19.1.2 Contracts 216 19.1.3 Concentrate Transport Logistics 216 19.1.4 Smelter Terms 216 19.1.5 Sale of Concentrates 217 20 Environmental Studies, Permitting and Social or Community Impact 220 20.1 Environmental Baseline Studies 221 20.1.1 Summary of Air, Noise, Groundwater and Surface Water Studies 221 20.1.2 Summary of Biological Studies 221 20.1.3 Summary of Geochemical Studies 221 20.2 Permitting Considerations 222 20.3 Environmental Management During Operations, Reclamation, and Closure 222 20.3.1 Environmental Management Objectives 222 20.3.2 General Site Conditions Relevant to Environmental Management 223 20.3.3 Project Components and Facilities 225 20.3.4 Open Pits 227 20.3.5 Main Dump 228 20.3.6 Plant Facilities & Related Infrastructure 228 20.3.7 Site Wide Water Balance 229 20.3.8 Closure Phase Water Management 231 20.3.9 Regrading Plan 231 Page vi NI43-101 Technical Report Corani Project Detailed Engineering Phase 1 (FEED) 20.3.10 Monitoring and Maintenance 232 20.3.11 Closure Schedule 232 20.4 Socioeconomics and Community 233 21 Capital and Operating Costs 234 21.1 Capital Cost Summary 234 21.1.1 Currency 235 21.1.2 Estimate Exclusions 235 21.2 General Capital Costs 236 21.3 Mine Capital Costs 236 21.4 Infrastructure Capital Costs 236 21.5 Process Plant Capital Costs 237 21.6 Fresh Water / Process Water Capital Costs 238 21.7 Power Supply Capital Costs 239 21.8 Ancillary Buildings Capital Costs 239 21.9 Engineering, Project Management & Supervision Capital Costs 239 21.10 Commissioning, Start Up and Vendor Representative Capital Costs 240 21.11 Owner’s Capital Costs 240 21.12 Operating Cost Summary 241 21.13 Mine Operating Costs 241 21.13.1 Mine Operating Cost Summary 241 21.14 Process Plant Operating & Maintenance Costs 241 21.14.1 Process Labor & Fringes 242 21.14.2 Power 243 21.14.3 Reagents 244 21.14.4 Maintenance, Wear Parts and Consumables 244 21.14.5 Process Supplies & Services 245 21.15 Concentrate Handling, Transportation and Storage Operating Costs 245 21.16 General Services and Administration (G&A) Operating Costs 245 21.17 Reclamation and Closure Cost 246 22 Economic Analysis 247