1. Viscachita Project (Cu-Mo)

8/11/2019 1. Viscachita Project (Cu-Mo)

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LOS ANDES COPPER LTD.

Preliminary Economic Assessment forthe Vizcachitas Copper/Molybdenum

Project

V Region, Chile

Effective Date: January 23, 2014

Report Date: February 18, 2014

Prepared by:

Coffey Consultoría y Servicios SpA

Alquimia Conceptos S.A

John Wells BSc, MBA, FSAIMM.

Manuel Hernández, BSc, FAusIMM.

Porfírio Rodriguez, BSc, MAIG.

Román Flores, BSc, Member of Chilean Mining Commission.

Prepared for:

Los Andes Copper Ltd.



i

Table of Contents

1 SUMMARY 1

1.1

Introduction 1

1.2

Project Location 1

1.3

Property Ownership 2

1.4

Property Description 3

1.5

Geology and Mineralization 3

1.6

Drilling 4

1.7

Mineral Processing and Metallurgical Testing 4

1.8

Mineral Resource Estimate 5

1.9

Mineral Reserves Estimate 6

1.10

Mining Methods 7

1.11

Process Design and Recovery 8

1.12

Project Infrastructure 9

1.13

Marketing Studies 10

1.14

Capital Cost Estimate 12

1.15

Operating Costs Estimate 13

1.16

Economic Analysis 14

1.17

Conclusions and Recommendations 16

2 INTRODUCTION AND TERMS OF REFERENCE 18

2.1

Purpose of the Technical Report 18

2.2

Frequently Used Acronyms, Abbreviations, Definitions, and Units of Measurement 18

2.3

Effective Dates 20

3

RELIANCE ON OTHER EXPERTS 22

3.1

Other Independent Expert Persons 22

4 PROPERTY DESCRIPTION AND LOCATION 23

4.1

Land Tenure 24

4.2

Title, Surface Rights and Legal Access 29

4.3

Net Smelter Return 30

4.4

Environmental Liabilities 30

4.5

Operational Permits 30

5

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 31

5.1

Country Setting 31

5.2

Access 32

5.3

Climate 32

5.4

Physiography and Vegetation 32

5.5

Local Resources 33

5.6

Infrastructure 33

6

HISTORY 35

6.1

Description 35



ii

6.2

Historic Resource Estimates 36

6.2.1

Placer Dome 37

6.2.2

General Minerals 37 6.2.3

GHG Resources Ltd. 38

6.2.4

Los Andes Copper Ltd. 38

6.3

Historic Preliminary Economic Assessment 40

7 GEOLOGY 41

7.1

Regional Geology 41

7.2

Local and Property Geology 42

7.3

Mineralization 44

8 DEPOSIT TYPES 45

9

EXPLORATION 46

9.1

Placer Dome Sudamerica S.A. 46

9.2

General Minerals Corporation 46

9.3

Global Copper Corporation 48

9.4


10 DRILLING 49

10.1

Placer Dome Sudamerica Limited 50

10.2

General Minerals Corporation 51

10.3


10.3.1

Drilling 51

10.3.2

Procedures 52

10.3.3

Surveying 52

10.3.4

Geological and Geotechnical Logging 54

10.3.5

Results 54

11

SAMPLE PREPARATION, ANALYSES AND SECURITY 57

11.1

Quality Assurance/Quality Control Definitions and Protocols 57

11.2

Historic Data 58

11.3

Los Andes Copper QA/QC Results 63

11.3.1

Duplicates 65

11.3.2

Certified Reference Materials (CRM) 68

11.3.3

Blank Samples 72

11.3.4

Samples to Check Laboratory 73

11.4

Opinion on the Adequacy of Sample Preparation and Assay Quality 74

11.5

Los Andes Copper Core Sampling 74

11.6

Specific Gravity Sampling and Determination 75

11.7

Los Andes Copper Assay Procedures 75

11.8

Opinion on the Adequacy of Sample Preparation and Assay Quality 76

12 DATA VERIFICATION 77

12.1

Summary 77

12.2

Site Visit 78



iii

12.3

Data Validation 78

12.3.1

Log Files 78

12.3.2

Drill Hole Collars 78 12.3.3

Down-Hole Survey 79

12.3.4

Database Review 79

12.4

Interpretation of Geology, Alteration and Mineralization 79

12.5

Specific Gravity 80

12.6

Opinion of Adequacy of the Database 80

13 MINERAL PROCESSING AND METALLURGICAL TESTING 81

13.1

Comminution Test Work 81

13.1.1

1998: Ball Bond Work Index 81

13.1.2

2008: SMC Test and Bond Abrasion Test 81

13.2

Flotation Test Work 82

13.2.1

1996 Test Work 83 13.2.2

1998 Test Work 87

13.2.3

2008 Test Work 92

13.3

Leach Test Work 99

13.3.1

1999 Test Work 99

13.3.2

1999-2000 Test Work 106

13.4

2001 Test Work 108

13.5

Conclusions 109

14 MINERAL RESOURCE ESTIMATE 112

14.1

Geological 3-D Model, and Domains 112

14.1.1

Available Data 117

14.1.2

Geological 3-D Model Verification 117

14.2

Mineral Resource Estimate 117

14.2.1

Method for Estimate and Tools 117

14.2.2

Specific Gravity 117

14.2.3

Assay Statistics 118

14.2.4

Composites Study 121

14.2.5

Exploratory Data Analysis 122

14.2.6

High Grade Capping 138

14.2.7

Spatial Analysis - Variography 138

14.2.8

Resource Block Model 141

14.2.9

Interpolation Plan 141

14.2.10

Block Model Validation 142

14.2.11

Global Bias Comparison 143

14.2.12

Visual Comparison 144

14.2.13

Mineral Resource Categorization 149

14.2.14

Mineral Resource 155

14.2.15

Comparison with Previous Resource Estimate 160

14.3

Conclusions 164

15

MINERAL RESERVES ESTIMATE 165

16 MINING METHODS 166

16.1

Bench Height 169



iv

16.2

Waste Dump Design Parameters 170

16.3

Hydrology and Hydrogeology 172

16.4

Treatment Capacity 173 16.5

Optimum Pit Shells 173

16.6

Mine Operations 174

16.6.1

Drill and Blast 174

16.6.2

Load and Haul 176

16.6.3

Auxiliary Equipment 176

16.7

Manpower 177

16.8

Mining Plan Options 179

16.8.1

Case 1.2: 88 ktpd 179

16.8.2

Case 1.3: 176ktpd 188

16.8.3

Case 1.5: 88 - 176 ktpd 195

16.8.4

Case 2.2: 44 ktpd 202

16.9

Summary 209

17

RECOVERY METHODS 211

17.1

Introduction 211

17.2

Process Design Basis and Design Criteria Summary 213

17.3

Crushing 214

17.4

Grinding 214

17.5

Copper-Molybdenum Flotation Circuit Design 217

17.6

Copper-Molybdenum Separation and Molybdenum Cleaner 219

17.7

PEA Options and Cases 222

18

PROJECT INFRASTRUCTURE 231

18.1

Vizcachitas Site 231

18.2

Process Water Supply 234

18.3

Rocin River Diversion Tunnel 236

18.4

Power Supply 238

18.4.1

Site Electrical Power Distribution 240

18.4.2

Rocin River Hydro Electric Generation 240

18.5

Process Plant Earthworks 241

18.6

Tailings Storage Facility 242

18.6.1

Tailings Storage Facility Design 243

18.6.2

Underdrain System 245

18.6.3

TSF Diversion Channel 246

18.6.4

Tailings Transport System 246

18.6.5

TSF Reclaim Water System 246

18.7

Roads 247

18.7.1

Access Road 247

18.7.2

Site Roads 248

18.8

Concentrate Storage, Loading and Transport 248

18.9

Ventanas Port Facilities 249

18.10

Site Accommodation 249

18.11

Fuel Storage 249

18.12

Potable Water Supply 249

18.13

Ancillary Site Buildings and Facilities 249

19 MARKETING STUDIES AND CONTRACTS 252



v

19.1

Introduction & Scope 252

19.2

Refined Copper Market 252

19.3

Copper Concentrate Market Outlook 253 19.4

Treatment and Refining Charges 255

20

ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT 256

20.1

Introduction 256

20.2

Historical Environmental Information 256

20.3

Legal Framework for Environmental Studies 257

20.4

Future Environmental Studies 258

20.4.1

Studies Required to Complete the Pre-feasibility and Feasibility Studies. 258

20.4.2

Studies Required to Construct and Operate the Mine. 258

21

CAPITAL AND OPERATING COSTS 261

21.1

Capital Cost Estimate 261

21.1.1

Indirect Costs 264

21.1.2

Contingency 264

21.1.3

Accuracy 265

21.1.4

Estimate Exclusions 265

21.2

Operating Cost Estimates 265

21.2.1

Mining Operating Cost 266

21.2.2

Process Plant Operating Cost 268

21.2.3

Infrastructure and Administration 269

21.2.4

C-1 Cash Costs (Net of credits) 270

22

ECONOMIC ANALYSIS 272

22.1

Methodology Used 272

22.2

Financial Model Parameters 273

22.3

Taxes and Royalties 274

22.3.1

Income Tax 274

22.3.2

Mining Royalty Tax 276

22.4

Production Summary 278

22.5

Residual Value In Situ 281

22.6

Economic Evaluation Results 282

22.7

Sensitivity Analysis 282

22.7.1

Copper Price Variation 283

22.7.2

Molybdenum Price Variation 286

22.7.3

CAPEX and OPEX Variation 288

22.7.4

Discount Rate Variation 292

22.8

After Income Tax Analysis 292

23 ADJACENT PROPERTIES 295

24 OTHER RELEVANT DATA 296

25

INTERPRETATION AND CONCLUSIONS 297

25.1

Interpretations and Conclusions 297

25.2

Risks and Opportunities 298



vi

25.2.1

Risks 298

25.2.2

Opportunities 299

26

RECOMMENDATIONS 300

27 REFERENCES 301

28 CERTIFICATES AND SIGNATURES 305

List of Appendices

APPENDICES 314

APPENDIX A: LEGAL OPINION 315

APPENDIX B: LOCATION, AZIMUTH AND DIP OF ALL DRILL HOLE 320



i

List of Figures

Figure 4-1: Vizcachitas Project Location (source: Los Andes Copper, June, 2013) 24

Figure 4-2: Mining Claims as of January 10, 2014 28

Figure 4-3: Exploration Claims as of January 10, 2014 29

Figure 5-1: View over the Project Area. General Site View looking East (source: Los Andes Copper, June, 2013) 33

Figure 7-1: Regional Geology 42

Figure 7-2: Local Geology (source: Los Andes Copper, June, 2013) 43

Figure 10-1: Drill Hole Location (source: Los Andes Copper, June, 2013) 50

Figure 10-2: Core Storage at the Project 52

Figure 11-1: GMC Secondary Laboratory Duplicates ACME vs. CIMM 60

Figure 11-2: GMC Secondary Laboratory Duplicates ACME vs. Lakefield 61

Figure 11-3: GMC Secondary Laboratory Duplicates ACME vs. ALS 62

Figure 11-4: ACME Reference Material STD_5 63

Figure 11-5: Los Andes Copper Coarse Duplicates Analysis 66

Figure 11-6: Statistical Diagrams for Duplicate Samples 68

Figure 11-7: Oreas 92 Assay Results 69



Figure 11-10: Oreas 43P Assay Results 71

Figure 11-11: Oreas 43P Mo Standard for Cu 71

Figure 11-12: Blank Assay Values in the Vizcachitas Project 72

Figure 11-13: Actlabs Check Samples 74

Figure 12-1: Pulp Sample storage on the Property (source: Los Andes Copper, June 2013) 77

Figure 14-1: Local geology 3-D view in Minesight® Software-Plan 1930. (Lithological codes according to Table 14-1,Coffey, June, 2013) 114

Figure 14-2: Mineral Zone view in Minesight® Software-Plan 1930. (Codes according to Table 14-2, Coffey, June, 2013) 116

Figure 14-3: Boxplot of Raw Copper Assay Values by Lithology 119

Figure 14-4: Boxplot of Raw Copper Assay Values by Mineral Zone 120

Figure 14-5: Histogram and Cumulative Plot of Length of Raw Data 122

Figure 14-6: Uncapped 2 m Composited Copper (ppm) All Data Statistics 124

Figure 14-7: Uncapped 2 m Composited Molybdenum (ppm) All Data Statistics 125

Figure 14-8: Boxplot of Composited Copper Data by Lithology 128

Figure 14-9: Boxplot of Composited Molybdenum Data by Lithology 129

Figure 14-10: Boxplot of Composited Copper Data by Mineral Zone 130

Figure 14-11: Boxplot of Composited Molybdenum Data by Mineral Zone 131

Figure 14-12: Boxplot of Composited Copper Data by Domain 132



ii

Figure 14-13: Boxplot of Composited Molybdenum Data by Domain 132

Figure 14-14: Contact Plot of Copper in Mixed and Supergene Domains 135

Figure 14-15: Contact Plot of Copper in Andesite and Diorite Domains 136

Figure 14-16: Contact Plot of Copper in Andesite and Diorite Dyke Domains 137

Figure 14-17: Contact Plot of Molybdenum in Mixed and Supergene Domains 138

Figure 14-18: Copper Variogram/Correlogram in And_dio Estimation Domain (X, Y, Z axis) 140

Figure 14-19: Mid Bench 1930 Screen-Capture Plot of Copper % (source: Coffey, June, 2013) 145

Figure 14-20: E-W Screen-Capture Plot (N-6413120) of Copper % (source: Coffey, June, 2013) 146

Figure 14-21: N-S Screen-Capture Plot (E-365960) of Copper % (source: Coffey, June, 2013) 147

Figure 14-22: Mid Bench 1930 Screen-Capture Plot of Molybdenum % (source: Coffey, June, 2013) 149

Figure 14-23: Plan View at 1930 Elevation Showing the Distribution of Indicated (green) and Inferred (yellow) Mineral

Resource Blocks (source, Coffey, June, 2013) 152

Figure 14-24: E-W Section View (N-6413120) Showing the Distribution of Indicated (green) and Inferred (yellow) MineralResource Blocks (source: Coffey, June, 2013) 153

Figure 14-25: N-S Section View (E-365960) Showing the Distribution of Indicated (green)and Inferred (yellow) MineralResource Blocks (source: Coffey, June, 2013) 154

Figure 14-26: Pit shell with Copper Grades for throughput 176 ktpd (Plan View Z=1950) source: Coffey, June, 2013 156

Figure 14-27: Pit shell with Copper Grades for throughput 176 ktpd (Cross Cut N=6.413.700) (source: Coffey, June,2013) 157

Figure 14-28: Tonnage-Cu Eq Grade Curves 159

Figure 14-29: Additional Drilling to the South of the Vizcachitas Deposit 161

Figure 16-1: Pit Outlines for each Option 16 ktpd (source: Coffey, June, 2013) 167

Figure 16-2: Pit Outline Option 176 ktpd (source: Coffey, June, 2013) 168

Figure 16-3: Mine Sectors considered by Geotechnical Behaviour 170

Figure 16-4: Location of Waste Dumps (source: Coffey June, 2013) 171

Figure 16-5: Ultimate Pit: 88 ktpd (Coffey, June, 2013) 180

Figure 16-6: Schedule Production to 88 ktpd 182

Figure 16-7: Indicated and Inferred Resources in Mine Schedule: 88 ktpd 183


Figure 16-9: Schedule Production to 176 ktpd 190


Figure 16-11: Ultimate Pit: 88-176 ktpd (Coffey, June, 2013) 195

Figure 16-12: Schedule Production: 88-176 ktpd 197

Figure 16-13: Indicated and Inferred Resources in Mine Schedule: 88-176 ktpd 198


Figure 16-15: Schedule Production: 44 ktpd 204


Figure 17-1: Simplified sketch of the Plant flow sheet. 212

Figure 17-2: SAC Circuit 215



iii

Figure 17-3: SABC-B Circuit 216

Figure 17-4: Cu - Mo Flotation Circuit 218

Figure 17-5: Molybdenum Flotation Circuit 220

Figure 17-6: General Arrangement Process Plant – Cases 1.2, 1.3 and 1.5 224

Figure 17-7: General Arrangement Process Plant – Case 2.2 226

Figure 18-1: Vizcachitas Property Location 232

Figure 18-2: Plot Plan Project Facilities 233

Figure 18-3: Water Supply Route 235

Figure 18-4: Tunnel Layout 237

Figure 18-5: 110 kV Overhead Powerline Route (source: Google Earth, June, 2013) 239

Figure 18-6: 220 kV Overhead Powerline Route (source: Google Earth, June, 2013) 240

Figure 18-7: Tailing Storage Facility Location (source: Google Earth, June, 2013) 243

Figure 18-8: Raised Embankment Location (source: Google Earth, June, 2013) 244

Figure 18-9: Water Reclaim System (source: Google Earth, June, 2013) 246

Figure 18-10: Slurry Pipeline Route (source: Google Earth, June, 2013) 246

Figure 18-11: Access Road Network (source: Google Earth, June, 2013) 248

Figure 19-1: Market Balance 2013 – 2017 (source: Codelco April 2013 update) 254

Figure 22-1: Long term Cu Price Variation – Case 1.2 284



Figure 22-4: Long term Cu Price Variation –

Case 2.2 286

Figure 22-5: Mo Price Variation – Case 1.2 287




Figure 22-9: Capex and Opex Variation – Case 1.2 290






iv

List of Tables

Table 1-1: Drilling Summary at Vizcachitas 4

Table 1-2: Estimated Resource at Selected Cut-off Grades 6

Table 1-3: Summary of Final Pit Mine Production 8

Table 1-4: Summary of Concentrates and Fine Metal produced 9

Table 1-5: Copper Price Forecast 11

Table 1-6: Molybdenum Price Forecast (Source: Bloomberg 2013) 11

Table 1-7: Capital Cost Summary (Nominal values) 13

Table 1-8: Estimation Period by Case 14

Table 1-9: Unit Operating Costs and Average Cash Cost (Nominal values) 14

Table 1-10: Main Economic Parameters 14

Table 1-11: Economic Evaluation Summary before Income Tax 16

Table 1-12: Economic Evaluation Summary after Income Tax 16

Table 2-1: Units of Measurement 19

Table 2-2: Units of Measurement (continuation) 20

Table 4-1: Exploitation Claims as of January 10, 2014 25

Table 4-2: Exploration Claims as of January 10, 2014 26

Table 6-1: AMEC 2008 Sulphide Mineral Resource Estimate 39

Table 6-2: AMEC 2008 Oxide Mineral Resource Estimate 39

Table 10-1: Drilling Summary at Vizcachitas 49

Table 10-2: Placer Dome and General Minerals drilling highlights 55

Table 10-3: Los Andes Copper drilling highlights 56

Table 11-1: GMC Secondary Laboratory Duplicates 59

Table 11-2: ACME Reference Material Results 63

Table 11-3: Number of Samples used in the Vizcachitas QA/QC program 65

Table 11-4: Statistical results of Duplicate Samples from the Vizcachitas Project. (Los Andes Copper, June, 2013) 67

Table 11-5: CRM Sample Summary 69

Table 11-6: SGS Analytical Methods 76

Table 13-1: Summary of Ball Bond Work Index (source: Lakefield Research Chile S.A., 1999a) 81

Table 13-2: Summary of SMC Test (source: SGS Minerals Services, 2009) 82

Table 13-3: Summary Abrasion Index Test (source: SGS Minerals Services, 2009) 82

Table 13-4: Chemical Analysis (source: Lakefield Research Chile S.A., 1996) 84

Table 13-5: Mineralogy (source: Lakefield Research Chile S.A., 1996) 84

Table 13-6: Summary of Rougher Flotation; time 12 min (source: Lakefield Research Chile S.A., 1996) 85

Table 13-7: Cleaner Flotation Summary (source: Lakefield Research Chile S.A., 1996) 86

Table 13-8: Sample Description and Chemical Analysis (source: Lakefield Research Chile S.A., 1999a) 87



v

Table 13-9: Summary of Cu grade (wt. %) and Percent Distribution of different Cu-bearing minerals (source: LakefieldResearch Chile S.A., 1999a) 88

Table 13-10: Summary of Rougher Flotation Test Composite A (source: Lakefield Research Chile S.A., 1999a) 89

Table 13-11: Summary of Cleaner Flotation Result – Samples J and K (source: Lakefield Research Chile S.A., 1999a) 90

Table 13-12: Composites used in Locked Cycle Test 91

Table 13-13: Summary of Locked Cycle Tests (source: Lakefield Research Chile S.A., 1999a) 91

Table 13-14: Chemical Analysis (source: SGS Minerals Services, 2009) 92

Table 13-15: Cumulative Cu Recoveries and Grades at different P80 – 12 minutes flotation residence time (source: SGSMinerals Services, 2009) 93

Table 13-16: Cumulative Mo Recoveries and Grades at different P80 – 12 minutes flotation residence time (source: SGSMinerals Services, 2009) 94

Table 13-17: Copper and Molybdenum Recovery, regrind at 35 microns – two cleaner stages (source: SGS MineralsServices, 2009) 95

Table 13-18: Copper and Molybdenum Recovery, regrind at 50 microns – two cleaner stages (source: SGS MineralsServices, 2009) 96

Table 13-19: Copper and Molybdenum Recovery, regrind at 25 microns – three cleaner stages (source: SGS MineralsServices, 2009) 97

Table 13-20: Copper and Molybdenum Recovery, regrind at 35 microns – three cleaner stages (source: SGS MineralsServices, 2009) 98

Table 13-21: Chemical Analysis Results (source: Lakefield Research Chile S.A., 1999b) 101

Table 13-22: Mineralogical Results (source: Lakefield Research Chile S.A., 1999b) 103

Table 13-23: Agitation Leach Test Results on 29 Composites Samples (source: Lakefield Research Chile S.A., 1999b)105

Table 13-24: Leach Test Summary (source: Lakefield Research, 2000) 107

Table 13-25: Bacterial Leach Test Results (source: Little Bear Laboratories, Inc., 2001) 109

Table 14-1: Vizcachitas Lithology Model Codes 113

Table 14-2: Vizcachitas Mineral Zone Codes 115

Table 14-3: Vizcachitas 3-D Model limits. 117

Table 14-4: Bulk Density by Domain (AMEC, 2008) 118

Table 14-5: Domains used in Resource Estimate 122

Table 14-6: Type of Contacts between Domains 133

Table 14-7: Capped Value for Copper by Domain. 138

Table 14-8: Capped Value for Molybdenum by Domain. 138

Table 14-9: Variography Parameters for Copper by Domain. 140

Table 14-10: Variography Parameters for Molybdenum by Domain. 141

Table 14-11: Block Model Limits and Size 141

Table 14-12: Search Parameters for Copper by Domain 142

Table 14-13: Search Parameters for Molybdenum by Domain 142

Table 14-14: Comparison between Kriged and Nearest Neighbour Copper Model Statistics 143

Table 14-15: Comparison between Kriged and Nearest Neighbour Molybdenum Model Statistics 143



vi

Table 14-16: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits forMixed Domain 150

Table 14-17: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits forSupergene Domain 150

Table 14-18: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits forAnd_Dio Domain 150

Table 14-19: Mineral Resource for Cu Eq%(1)

158

Table 14-20: Comparison between AMEC 2008 and Coffey 2013 Resource 160

Table 14-21: AMEC 2008 Oxide Resources 164

Table 16-1: Geometrical Parameters by Sector 170

Table 16-2: Geometrical Parameters for Waste Dumps 170

Table 16-3: Dump Plan (Schedule 176 ktpd) 172

Table 16-4: Plant capacity options 173

Table 16-5: Input Data for Pit Optimization 173

Table 16-6: Drilling and Blasting design parameters 175

Table 16-7: Drilling Operating Conditions 175

Table 16-8: Loading & Transport Operating Parameters 176

Table 16-9: Workforce Factors 178

Table 16-10: Production Schedule: 88 ktpd 181

Table 16-11: Operating and Primary Equipment Fleet Schedule: 88 ktpd 184

Table 16-12: Operating and Auxiliary Equipment Fleet Schedule: 88 ktpd 185

Table 16-13: Yearly Staff: 88 ktpd 187





Table 16-18: Production Schedule: 88 - 176 ktpd 196

Table 16-19: Operating and Primary Equipment Fleet Schedule: 88-176 ktpd 199

Table 16-20: Operating and Auxiliary Equipment Fleet Schedule: 88-176 ktpd 200

Table 16-21: Yearly Staff: 88-176 ktpd 201





Table 16-26: Mine Plan Summary 209

Table 16-27: Primary Equipment for each case 210

Table 17-1: Summary of Key Process Design Criteria 213

Table 17-2: Process Plant Equipment - Crushing 226



vii

Table 17-3: Process Plant Equipment – Grinding 227

Table 17-4: Process Plant Equipment – Flotation 228

Table 17-5: Process Plant Equipment – Tailing Handling / Concentrate Handling 229

Table 17-6: Process Plant Equipment – Molybdenum Flotation 230

Table 18-1: Make-up Water Demand 234

Table 18-2: Average Daily Peak Water Flow by Month (m3 /s)

* 238

Table 18-3: Electrical System Requirements 240

Table 18-4: Excavation and Fill per Case 241

Table 18-5: TSF Capacity 242

Table 19-1: Outlook for the Copper Price 253

Table 19-2: Concentrates - Commercial Terms Assumptions (Coffey, June, 2013) 255

Table 21-1: Capital Cost Estimate (Nominal values) 262

Table 21-2: Estimation Basis by Area 263

Table 21-3: Unit Construction Values 264

Table 21-4: Indirect Costs Detail (Nominal values) 264

Table 21-5: Estimation Period by Case 266

Table 21-6: Total Operating Costs (Nominal values) 266

Table 21-7: Unit Operating Costs ($/ t plant feed; nominal values) 266

Table 21-8: Mine Operating Costs by Expense Item (Nominal values) 267

Table 21-9: Mine Unit Operating Costs by Expense Item (Nominal values) 268

Table 21-10: Process Plant Operating Cost by Expense Item (Nominal values) 269

Table 21-11: Process Plant Unit Operating Cost by Expense Item (Nominal values) 269

Table 21-12: Infrastructure and Administration Operating Costs by Expense Item (Nominal values) 270

Table 21-13: Infrastructure and Administration Unit Operating Costs by Expense Item (Nominal values) 270

Table 21-14: Average Cash Costs 271

Table 22-1: Main Economic Parameters 274

Table 22-2: Mining Royalty Tax Scale for Mining Exploitation under 50,000 t of Equivalent Copper 277

Table 22-3: Mining Royalty Tax Scale for Mining Exploitation over 50,000 t of Equivalent Copper 277

Table 22-4: Production Summary 278

Table 22-5: Production Detail by Year 279

Table 22-6: Revenue by Metal (Nominal values) 281

Table 22-7: Copper Resource Residual Values 281

Table 22-8: Summary of Pre-Tax Economic Results 282

Table 22-9: NPV Sensitivity Analysis – Cu Price Variation 283

Table 22-10: IRR Sensitivity Analysis – Cu Price Variation 283

Table 22-11: NPV Sensitivity Analysis – Mo Price Variation 286

Table 22-12: NPV Sensitivity Analysis – Capex Variation 289



viii

Table 22-13: NPV Sensitivity Analysis – Opex Variation 289

Table 22-14: NPV Sensitivity Analysis – Discount Rate Variation 292

Table 22-15: Summary of Post-Tax Economic Results 294

Table 26-1: Tasks and Budget Estimate of the Costs to Pre-feasibility Study 300



1

1 SUMMARY

1.1 Introduction

Los Andes Copper Ltd. commissioned Coffey Consultoría y Servicios SpA.(Coffey) to prepare a

Technical Report for the Vizcachitas copper / molybdenum porphyry project (the Project, the

Property, Vizcachitas Deposit) to the standards required by National Instrument 43-101 (NI 43-

101) for Preliminary Economic Assessment (PEA). This is broadly in line with AACE

International recommendations for a class 5 study. The Project operating and capital costs were

developed to an accuracy of ± 35 %.

The PEA evaluated different process throughput options that maximize Net Present Value (NPV)

by increased throughput capacity or by minimized initial investment.

Of these options, 4 are presented in the PEA document, these being the options which reported

the highest NPVs.

The Vizcachitas copper-molybdenum porphyry deposit is located in Chile’s Region V, in theprovince of San Felipe and is wholly owned by Los Andes Copper Ltd. (Los Andes Copper), a

TSX listed, Vancouver based company. This Technical Report has been prepared for Los Andes

Copper by or under the supervision of Qualified Persons within the meaning of NI 43-101 in

support of Los Andes Copper’s disclosure of scientific and technical information for the Project.The principal consultants used in the preparation of this document are:

Coffey: Resource Estimate, pit design, mine planning and

geotechnical revision

Alquimia Conceptos S.A. Engineering, infrastructure, costing and cash flow.

1.2 Project Location

The Vizcachitas Property is located at 32° 24’ 27” S and 70° 25’ 30”W in the Chilean Andes (See

Figure 4-1: Vizcachitas Project Location).

The central UTM coordinates are 6,413,500N and 366,000E (Datum WGS84, Zone 19H).

The Property is situated approximately 150 km northeast of Santiago de Chile and 46 km

northeast of the town of Putaendo, in the Province of San Felipe. Of the total distance between

the Project and Santiago, approximately 120 km are paved and 30 km are gravel and

unimproved dirt roads. Total driving time from Santiago is about three hours.



2

1.3 Property Ownership

Compañía Minera Vizcachitas Holding (CMVH) and Sociedad Legal Minera San José Una de LoVicuña, El Tártaro y Piguchén de Putaendo (SLM San Jose), have good and valid title to the

mining properties listed in Table 4-1 and Table 4-2. The locations of the claims are shown in

Figure 4-2 and Figure 4-3. CMVH and SLM San Jose are wholly-owned subsidiaries of Los

Andes Copper.

Exploration claims permit the title holder to assess the land for mineral potential while in good

standing and are valid for two years, after which they must be converted to exploitation claims,

or a new application for an exploration claim must be made. Mining claims are of perpetual

duration, subject only to timely payment of the annual mining taxes payable to the Chilean

Governmental Authorities.

The Project includes 38 established mining claims covering an area of 7,000 ha and 81

established exploration claims totalling 22,500 ha. All claims are held 100 % by CMVH or wholly

owned subsidiaries of Los Andes Copper. The exploration claims overlie the mining claims, a

common practice in Chile to protect the underlying claims.

Coffey is not qualified to provide a legal opinion on the good standing of the properties and has

relied upon a letter provided by the Law Firm Domínguez, Ossa, Long & Macaya Abogados

(DOLM Abogados) who acts as CMVH’s lawyers in Chile. This letter dated January 10, 2014

states that:

“We hereby inform you that currently the mining property of Compañia Minera

Vizcachitas Holding is composed of 119 concessions, 37 of which are exploitation

concessions and 81 exploration concessions. In addition, Sociedad Legal Minera San

José is the owner of one exploitation concession.

All of these concessions were legally constituted as they were granted by the

court of Putaendo and duly registered in the Mining Registry of such city. Additionally,

as of this date these concessions do not have any outstanding taxes or permits that

need to be paid for ”.

CMVH has signed a legal agreement with the land owners giving it access to the Vizcachitas

Project. This enables the company to carry out exploration and drilling activities. This is an

annual agreement with provision for automatic annual renewals.

In accordance with the Chilean Mining Code, any titleholder of a mining concession, whether for

exploration or exploitation, has the right to establish an easement over the surface land, as

required for the appropriate exploration or exploitation of its concession. In the event that the

surface property owner does not grant the easement voluntarily, the titleholder of the mining



3

concession may request said easement before the Courts of Justice who shall grant it upon

determination of the compensation for losses as deemed fit.

1.4 Property Description

Access to the Vizcachitas Property by four-wheel drive vehicle is possible during much of the

year but is subject to some interruptions following storms or spring runoff when high water

conditions in the Rocin River prohibit stream crossings.

The Property is located in the western foothills of the Andes at an average altitude of 2,100

masl.

The climate at site is warm-temperate with six dry months in summer and winter rainfalls. The

average precipitation is approximately 300 millimeters per year. Precipitation falls as both rainand snow between April and October. The summer temperatures vary from a few degrees above

zero at night to 35° C in the day. In winter the temperatures are 10° to 15° C lower. The

relatively low elevation means that it is possible to explore all year round and to drill through the

winter months.

The Rocin River bisects the Property and deeply incises the valley across the steep mountain

slopes.

Elevations range from below 1,800 m to over 3,400 m with an average elevation of

approximately 2,100 m. The exploration camp at Vizcachitas is located at approximately 1,940m.

Vegetation, which consists of bushes and trees a few tens to hundreds of centimeters in height,

is located in the valley bottoms close to the river where water availability make plant life

possible.

Access and topography do present certain challenges to the Project and they require to be

addressed in the engineering phase. Other projects such as Andina, Los Bronces and Los

Pelambres have all been developed in similar terrain.

1.5 Geology and Mineralization

The dominant geological feature of this region is the north-south trending Neogene (23 - 2.5 Ma)

metallogenic belt that extends along the slopes of the Andean Cordillera in Chile and Argentina.

At Vizcachitas, there are at least six intrusive rock types, six porphyritic rock types and eight

distinct types of breccia, hosted by the Oligocene (23-44 Ma) andesite of the Abanico Formation

(Jara et al. 2013). Dates obtained by GMC on biotite from four intrusive rocks yielded ages

between 10.4 and 12 ± 0.3 Ma (Osterman, 1997).The deposit covers an area of approximately



4

2.6 km2 and the hydrothermal alteration system at Vizcachitas appears to affect an area of

approximately 3.5 km2. The Vizcachitas deposit shows a typical core of quartz-sericitic and

potassic alteration surrounded by propylitic alteration outside of the quartz-sericite zone.

Hypogene mineralization consists of veinlet-controlled and disseminated pyrite, chalcopyrite and

molybdenite. Primary mineralization occurs in the tonalite, diorite, granodiorite and andesite

zones. Bornite and tetrahedrite/tennantite are also present in minor quantities.

Supergene mineralization occurs in the form of sooty or massive chalcocite and covellite

completely replacing or coating pyrite and chalcopyrite. Ferrimolybdite, a secondary

molybdenum mineral, malachite, azurite and cuprite are also present in minor quantities

(Brockway, 1998).

1.6 Drilling

From 1993 three different companies have completed drilling campaigns on the Property. A total

of 146 diamond drill holes have been drilled on the Property, totalling 40,383 metres. The total

metres drilled by each company is summarised in Table 1-1.

Table 1-1: Drilling Summary at Vizcachitas

1.7 Mineral Processing and Metallurgical Testing

The Vizcachitas deposit has been subject to a number of physical characterisation and

metallurgical test programmes to determine process route and expected recoveries. Bond work

and abrasion indices have defined the mineral physical characteristics used in the development

of this Report. Both leach and flotation test work has been carried out on Vizcachitas samples to

determine likely process route and recovery estimations.

Observations and conclusions are summarized below:

Mineralogical analysis shows that the principal copper mineral was chalcopyrite.

In general, the results of the flotation tests show high grades and recoveries for both

copper and molybdenum.

Company Period Drill Hole Numbers No. of Drill Holes Total Meterage (m)

Placer Dome 1993 VP-01 to VP-06 6 1,952.95

General Minerals 1995-1998 V-01 to V-63 61 15,814.90

Los Andes Copper 2007-2008 LAV-064 to LAV-142 79 22,615.60

Total 146 40,383.45



5

The results of the cleaning flotation tests indicate that three cleaner stages must be

considered to achieve high final concentrate grade.

Based on the flotation tests, an overall recovery of 90 % Cu and 75 % Mo can be expected

▫ Copper and molybdenum rougher recovery of 94 % and 89 % respectively can be

expected.

▫ Copper and molybdenum cleaner recovery of 96 % and 95 % respectively can be

expected.

The results of the agitated leaching tests showed that the samples tested had a high

content of chalcopyrite (78 %) and a low acid soluble copper content (<10 %).These

samples generally resulted in low copper recoveries (<15 %).

The best results were obtained by bacterial leaching for samples with low chalcopyrite

content.

The best column leaching results showed copper recoveries of approximately 40 %. The

samples tested also contained high chalcopyrite content.

Further evaluation of the ‘oxide mineral’ noted that the average grade of soluble copper isapproximately 0.051 % and that actual volume of true oxide material is low.

The majority of that domain previously logged as oxide contains a large proportion of

sulphide mineralisation and metallurgical test work previously completed indicated that the

actual leach recoveries were low.

1.8 Mineral Resource Estimate

Table 1-2 shows the mineral resources estimated within the Vizcachitas deposit, with an

Effective Date of January 23, 2014. The estimate was based on the drill hole sample assays,

geological model interpretation and geostatistical analysis employing industry standard methods

and was classified in accordance to the CIM standards on Mineral Resources and Mineral

Reserves (CIM 2010).

Mineral resources are reported at Copper equivalent (Cu Eq) cut-off under prevailing conditions.

At 0.3 % Cu Eq cut-off, the Indicated Resources are 1,038 Mt @ 0.434 % Cu Eq, (0.373 % Cu

and 0.012 % Mo) and Inferred Resources are 318 Mt @ 0.405 % Cu Eq, (0.345 % Cu and 0.013

% Mo).



6

Table 1-2: Estimated Resource at Selected Cut-off Grades

Copper equivalent grade (Cu Eq) has been calculated using the following expression:

Cu Eq (%) = CuT (%) + 4.95 x Mo (%), where 4.95 reflects the Mo/Cu price ratio

The metal prices used throughout this PEA are: $2.75 /lb. Cu, $13.6 /lb. Mo, this is based on

conservative assessment of consensus opinion. The quantity and grades are estimates and are

rounded to reflect the fact that they are an approximation.

Mineral Resources are not Mineral Reserves and do not demonstrate economic viability. There

is no certainty that all or any part of the Mineral Resource will be converted to Mineral Reserves.

Coffey knows of no existing environmental, permitting, legal, socio-economic, marketing, political

or other factors that might materially affect the Mineral Resource estimate.

1.9 Mineral Reserves Estimate

The Project has no Mineral Reserves; all mineralization is considered as Mineral Resources.

INDICATED

Cut-Off Tonnage Cu Eq Cu Grade Mo Grade Cu Mo

(Cu Eq %) Mt % % % Mlb Mlb

0.20 1,317 0.396 0.341 0.011 9,913 318

0.25 1,191 0.414 0.356 0.012 9,353 305

0.30 1,038 0.434 0.373 0.012 8,539 281

0.35 824 0.462 0.396 0.013 7,201 240

0.40 566 0.501 0.431 0.014 5,374 179

0.45 368 0.543 0.467 0.015 3,788 125

0.50 244 0.588 0.509 0.016 2,515 79

INFERRED



0.20 521 0.343 0.296 0.010 3,407 111

0.25 404 0.376 0.322 0.011 2,873 101

0.30 318 0.405 0.345 0.013 2,415 88

0.35 212 0.443 0.372 0.015 1,734 70

0.40 130 0.488 0.402 0.018 1,152 51

0.45 76 0.533 0.428 0.022 714 36

0.50 40 0.584 0.466 0.024 415 22



7

1.10 Mining Methods

The Vizcachitas deposit is amenable to conventional, large-scale, open pit mining methods.

Evaluations were conducted to determine potentially economic pit limits and the mining phase

(pushback) development sequence for a number of process plant throughputs ranging from 16

ktpd to 176 ktpd. Two general options were studied, and within these options additional cases

considering different throughput capacities and growth possibilities were evaluated as follows:

Option 1: Studied in order to reach maximum throughput capacity. This option includes

five cases as follows:

▫ Case 1.1: Throughput of 32 ktpd



▫ Case 1.4: Start with a throughput of 32 ktpd and with a later expansion after 6 years

of operation, reaches a final throughput of 88 ktpd



Option 2: Studied in order to start with minimum investment. This option includes three

cases which are as follows:





This Report presents the four options which returned the highest NPVs:

Case 1.2: 88 ktpd

Case 1.3: 176 ktpd

Case 1.5: 88 ktpd with a step up in production to a final throughput of 176 ktpd

Case 2.2: 44 ktpd



8

Mining phases were designed and used to estimate contained mineral resources, from which a

mine production schedule was developed.

Slope angles were estimated for the sectors of each pit designed based on the

recommendations of the 1999 Golder Associates report, “Site Technical Evaluation ReportVizcachitas Copper/Molybdenum Project”.

Mine fleet, scheduling, manpower and costs were developed for each production scenario

evaluated and are as per the detail in the relevant sections of this Report.

Table 1-3: Summary of Final Pit Mine Production

1.11 Process Design and Recovery

The Vizcachitas concentrator operation was considered for a number of throughputs from 16

ktpd to 176ktpd. The process plant will process run-of-mine (ROM) material delivered from the

open pit. Copper and molybdenum concentrates and tailings will be produced. The proposed

process includes crushing and grinding of the ROM material, bulk copper-molybdenum rougher

and cleaner flotation, regrinding, copper-molybdenum separation, molybdenum flotation, and

dewatering of copper and molybdenum concentrates.

The flotation tailings will be thickened before placement in a tailings storage facility (TSF).

Copper and molybdenum concentrates will be shipped by road to a nearby railhead and from

there delivered to a port facility for shipment to final consumer. See Table 14-4 for additional

detail.

CaseTotal

ca acitMineral CuT Mo

CuT Metal

in situ

Mo Metal

in situStrip Ratio

Operating

Costktpd Mt % % Mlb Mlb Mt USD/t*

1.2 88 1,279 0.346 0.011 9,755 310 0.81 2.51

1.3 176 1,666 0.334 0.011 12,270 404 1.03 2.23

1.5 88 - 176 1,666 0.334 0.011 12,270 404 1.03 2.38

2.2 44 1,077 0.358 0.011 8,500 261 0.79 2.84

(*) Referred to processed tonnes of mineral



9

Table 1-4: Summary of Concentrates and Fine Metal produced

1.12 Project Infrastructure

The Project is in close proximity to extensive infrastructure, including port facilities, railway lines

and high tension substations. The Project further benefits from a low altitude location permitting

year round exploration and project development.

The Project’s location in central Chile, 150 km northeast of Santiago, means that a significant

amount of the infrastructure to support a large mine is located relatively close by. The towns of

Los Andes and San Felipe are used as a base for many employees and subcontractors who

work at the Codelco Andina mine. Anglo American ’s Chagres smelter and Codelco’s Ventanas

smelter are within 140 km of the Project. The port of Ventanas is 140 km away and currently

handles copper concentrate from other mining operations in the district. There is an operating

railway line in San Felipe with connections to the two smelters and the port of Ventanas. The

PEA envisages the shipment of copper concentrate by rail to the Ventanas port.

There are several large electrical substations near to the Project. For the PEA, the Nogales

substation for 220 kV supply and the Las Vegas substation for 110 kV supply were considered.

Los Andes Copper contemplates the construction of a 29 MW run-of-river hydro electric plant

(Hydro Electric Plant) in the Rocin River. This plant is expected to be built and in operation well

before the construction of the mine facilities.

The Rocin River flows through the project site and is a tributary of the Putaendo and the Aconcagua Rivers. Los Andes Copper currently owns consumptive water rights for a portion of

the projected water requirements with an extraction point from the Aconcagua River

approximately 80 km from the project site. For the Project to proceed, Los Andes Copper will

need to secure additional consumptive water rights and make that water available at the project

site.

Total

capacity

Operating

Cost

ktpd Cu Mo Cu Mo USD/t*

1.2 88 13,111,528 215,917 3,933,459 101,502 7.47

1.3 176 16,693,910 278,044 5,008,173 133,461 7.37

1.5 88 - 176 16,691,531 277,658 5,007,459 133,276 7.43

2.2 44 7,019,676 99,479 2,105,903 47,750 8.12

(*) Referred to tonnes of plant feed

Case

Concentrate Produced

(t)

Fine Metal Produced

(t)



10

The Project is a green field site and the local infrastructure will need to be built. Infrastructure will

include the process water supply, Rocin River diversion tunnel, power supply from the main grid

substation to the project site, access road upgrade, concentrate storage and concentrate loadingfacilities at the railhead.

1.13 Marketing Studies

The considerations used for the marketing and handling of copper and molybdenum

concentrates have been derived by using: contacts with smelters, recent data from other

projects and information in the public domain.

Supply and Demand

In the short term, existing inventories are expected to be drawn down as new projects andexpansions of existing operations are brought to completion. When complete, these operations

are expected to place downward pressure on copper pricing until later in the decade. At that

point, steadily increasing demand is expected to overtake the increases in supply.

Uncertainty in the supply and demand scenario has been experienced due to new or expanded

production facilities coming online later than originally planned; cancellation of new or expanded

production facilities due to market, general economic, or company financial conditions; and

involvement in this sector by governments of certain large consumer/producer countries.

Smelter Capacities and Utilization

For the most part, smelter capacity is fixed. The relationship between capacity and utilization

dictates a smelter’s profitability; hence it’s setting of treatment charges (TC), refining charges

(RC) and other costs.

In the long term, TCs and RCs are expected to increase to cover additional smelter costs

particularly as environmental legislation becomes more stringent on airborne discharge and

other effluents.

Ocean Freight

Currently, the availability of vessels significantly exceeds the demand. Opportunities for

reasonable freight costs are available, particularly with negotiation of long-term freight contracts.

Future Metals Pricing

General industry consensus is for copper price to stabilise as developing countries such as India

and China take up production once again. The recent correction in copper prices has seen

prices fall from over $4 a pound to approximately $3 a pound. China will keep leading copper



11

consumption demand in 2013, with an expected 7.7 % growth1, followed by India and Brazil.

European demand is expected to remain unchanged. In conjunction with continued demand

upswing, production is likely to lag for a time until new operations can be brought on line. Mineexpansions are replacing diminishing production without real significant growth. New mine

developments usually produce under 100k tons of copper per year. Capex and operational cost

escalations have challenged both current and future operations delaying start up. Conventional

merger and acquisition (M&A) activities where larger companies buy projects from smaller

companies has largely ceased as large scale miners concentrate on cost reduction exercises.

Increasing community awareness has created entry and expansion barriers thus increasing

project development time through challenges to permitting and increased community programme

requirements.

Consensus copper and molybdenum values short and long term are as shown in Table 1-5 andTable 1-6. The PEA has been carried out using metals values of USD 2.75 /lb. copper and USD

13.6 /lb. molybdenum as the base case.

Table 1-5: Copper Price Forecast

Table 1-6: Molybdenum Price Forecast (Source: Bloomberg 2013)

1 International Monetary Fund ‘ World Economic Outlook Update’ July 2013 http://www.imf.org/external/pubs/ft/weo/2013/update/02/index.htm

2013 2014 2015 2016 2017 2018

SocGen (July 2013) 337 311 295 272 295 318

TD Securities (May 2013) 343 325 - - - -

UBS (July 2013) 345 286 - - - -

World Bank (July 2013) 322 320 318 317 316 315IMF (March 2013) 354 356 358 361 363 363

EIU (July 2013) 339 348 361 370 380 -

Cochilco (July 2013) 327 315 - - - -

Average 338 323 333 330 339 332

EntitycUSD/lb

Year$ of the day

2013

$ of the day

2014

$ of the day

2015

Constant

Long-term

Molybdenum (US$/lb) 14.00 - 15.00 12.50 - 14.00 12.00 - 13.00 13.00



12

1.14 Capital Cost Estimate

As noted in Section 1.10 several cases were studied in this PEA. Capital cost estimates wereprepared for all cases, however only those four cases selected are presented in this Report.

Capital cost estimates generated are composed of the following:

Direct cost of construction and assembly: Acquisitions of equipment supply, labour,

auxiliary equipment for construction and building materials are considered.

Indirect costs of project: Transportation and insurance of equipment, general spare parts,

vendor’s representatives, detailed engineering, EPCM, start up and owner costs areconsidered.

Contingency estimation based upon direct cost plus indirect cost.

Table 1-7 summarizes initial, sustaining and deferred capital requirement.



13

Table 1-7: Capital Cost Summary (Nominal values)

1.15 Operating Costs Estimate

Operating costs have been estimated for the operating areas of Mining, Process Plant,

Infrastructure and Administration. Costs were reported under subheadings related to the function

of each of the areas identified.

The operating cost estimates were based on energy prices of 0.12 USD/kWh for electricity and

1.20 USD/l for diesel fuel. Labour costs for mine and process plant consider only up to

superintendent and all superior positions are considered as administration costs.

The operating costs are considered to have accuracy of ± 35 %, based on the assumptions

listed in this section of the report.

All estimates have been completed for Life of Mine (LOM) or a maximum of 40 years operations.

Deferred

Capital Cost

Case 1.2 Case 1.3 Case 1.5 Case 2.2 Case 1.5

88 ktpd 176 ktpd 88-176 ktpd 44 ktpd 88-176 ktpd

kUSD

Direct Cost 1,278,120 1,845,496 1,278,095 912,035 695,760

Diversion Rocin River 86,077 86,077 86,077 86,077 0

Access 16,105 19,325 16,105 14,817 9,660

Bridges 50,000 50,000 50,000 50,000 0

General Facilities 41,450 50,343 39,589 37,089 16,660

Mine 424,305 566,776 372,930 288,655 203,397

Process Plant 329,506 626,070 335,879 205,738 305,789Tailings Storage Facility 39,276 56,299 39,496 32,237 7,052

Tailings Transport System 96,192 117,815 96,192 74,311 90,370

Water Reclaim System 51,876 73,780 51,706 40,789 51,706

Water Supply System 12,956 22,351 13,461 6,374 11,125

Power Supply System 130,376 176,660 176,660 75,948 0

Indirect Costs 264,539 381,971 264,534 188,768 144,005

Contingency 462,798 668,240 462,789 330,241 251,929

Sustaining Capital 538,313 717,926 591,049 193,442 0

Tailings Storage Facility 39,276 67,654 50,034 0 0

Tailings Transport System 96,192 141,578 121,858 0 0Water Reclaim System 51,876 88,661 65,502 0 0

Mine 350,968 420,033 353,655 193,442 0

Total Capital Costs 2,543,768 3,613,633 2,596,466 1,624,486 1,091,694

Description

Initial Capital Cost

kUSD



14

Table 1-8 shows estimation period by case.

Table 1-8: Estimation Period by Case

Table 1-9 summarizes operating costs estimate and average Cu cash cost with and without Mo

credit.

Table 1-9: Unit Operating Costs and Average Cash Cost (Nominal values)

1.16 Economic Analysis

Economic parameters used for the evaluation are shown in Table 1-10.

Table 1-10: Main Economic Parameters

There is no certainty that the PEA results will be realized. Since the analysis is based on a cash

flow estimate, it should be expected that actual economic results might vary from these results.

The PEA has been completed to a level of accuracy of ± 35 %. The PEA is not a preliminary

feasibility study or feasibility study.

Case 1.2 Case 1.3 Case 1.5 Case 2.2

88 ktpd 176 ktpd 88-176 ktpd 44 ktpd

LOM

(40 years)

LOM

(28 years)

LOM

(30 years) 40 years



Mine USD/t 2.51 2.23 2.38 2.84

Plant USD/t 7.32 7.23 7.28 7.42

Infrastructure USD/t 0.48 0.39 0.43 0.35

Administration USD/t 1.07 1.01 1.03 1.14

Total USD/t 11.38 10.85 11.12 11.75

Average Cu Cash Cost w/o Mo Credit USD/lb 2.03 2.01 2.05 1.96

Average Cu Cash Cost w/ Mo Credit USD/lb 1.71 1.69 1.73 1.68

UnitDescription

Description Value Unit

Cu Price 275 cUSD/lb

Mo Price 13.6 USD/lb

Estimate Basis 3rd Qtr 2013 US$

Inflation None ---

Currency Fluctuation None ---NSR 1.87 %

IVA (VAT) Excluded ---



15

At present Chilean income tax is 20 %, however there are several factors which impact the

overall amount companies pay which may include the amount of profit retained, the profits

reinvested in the country, the capital structure of the project and others. Dividends repatriatedare subject to additional taxes which can bring the nominal income tax to 35 %. Mining

companies are also levied by a specific tax on mining operating profits (Mining Royalty Tax). A

more detailed summary of the tax regime in Chile is presented in Section 22.3 of this Report.

The model includes closure costs, committed as required by the Chilean legislation and also

where applicable includes a valuation for remaining copper in the ground of 13.75 cUS/lb. Cu

based on remaining copper for each option pit selected after 40 years operational mine life.

Closure costs for each option considered have been calculated as 5 % of the initial direct capital

costs and where an expansion has been considered a further 5 % of the direct capital assigned

to process plant capital cost. Further details of this closure cost can be found in Section 22.1and of this Report.

Coffey understands from correspondence from Los Andes Copper Corporate Secretary that

there is a Net Smelter Return (NSR) between Los Andes Copper and third parties as follows:

The San José 1:3000 concession has a NSR of 0.51 % for production from an

underground operation and 1.02 % from an open pit operation.

The remaining concessions that were held before 2010 have NSR of 1 % for production

from an underground operation and 2 % from an open pit operation.

Using these details the relative volumes of mineral from the concession areas which are subject

to the NSR was calculated to generate a weighted average NSR over the whole property of 1.87

%, this NSR has been included in the economic model. This is further discussed in Section 22.6

of this Report.

Table 1-11 The economic evaluation after income tax includes several significant assumptions

described in Section 22.8.

Table 1-12 show the estimated before and after income tax net present value (NPV), internal

rate of return (IRR) and payback periods for the cases presented. The Mining Royalty Tax is

deducted in all cases. This is further discussed in Sections 22.6, 22.7 and 22.8 of this Report.



16

Table 1-11: Economic Evaluation Summary before Income Tax

The economic evaluation after income tax includes several significant assumptions described in

Section 22.8.

Table 1-12: Economic Evaluation Summary after Income Tax

1.17 Conclusions and Recommendations

The Project is a large, medium grade copper deposit which can be exploited using conventional

open pit and concentrator technology.

No fatal flaws were identified during the course of the Vizcachitas Project study. The

recommendations are largely based on normal metallurgical and other development test work

which would be part of project development.

The financial analysis indicates that the larger alternatives studied for the Project have a netpositive cash flow and an acceptable internal rate of return and could support the progression to

mine development.


88 ktpd 176 ktpd 88 - 176 ktpd 44 ktpd

Net Present Value - 8% kUSD 421,447 745,818 411,212 2,963

IRR % 10.67% 11.43% 10.04% 8.02%

Payback Period(*) years 6.2 5.9 8.9 9.9

(*) Referred to the first operation year

Description Unit



No Leverage

Net Present Value - 8% kUSD 116,048 274,446 62,412 -154,764

IRR % 8.84% 9.45% 8.36% 6.62%


Assumed Leverage

Net Present Value - 8% kUSD 245,113 454,179 231,349 -57,108

IRR % 10.60% 11.54% 9.93% 7.29%


Description Unit



17

At the metals prices used, the option which gives the highest NPV and fastest project payback

period is that of 176,000 tonnes per day. However it should be noted that there are lower

throughput, lower cost options which also provide reasonable NPV and payback and whichreduce initial capital expenditure. The different NPV and payback periods are presented in Table

1-11.

Opex and Capex considerations used for the Project represents those expected for a project of

this type exhibiting average characteristics of ore abrasiveness and hardness; grades and rock

type characterizations as indicated in the geological section. Operating costs were generated

from first principles and bench marked against other operations. Capital costs were based on

quotations for mining equipment, database information and were also benchmarked against

similar operations

The mine plan is appropriate to the mineralization and adequately reflects the deposit type,

dimensions and host rock characterization

Additional geotechnical and hydrological studies are required particularly to model surface water

flows into the Rocin River.

Recommendations

Based on the results of the PEA, the Qualified Persons recommend that Los Andes Copper

complete a pre-feasibility study (PFS) to further define the Project alternatives in order to more

accurately assess its technical and economic viability and to support permitting activities.

When all additional metallurgical and other test work has been completed, a trade-off evaluation

should confirm that the considerations used in selecting the 176,000 t/d option as the preferred

option are still valid and that it is the option to develop to PFS level.

Further options considering transport to port and concentrate treatment should be evaluated in

trade off studies prior to initiating pre-feasibility studies.

Additional metallurgical studies regarding material characterization and metals recovery should

be completed which may provide further input into process plant design and optimization.

Mine fleet optimization studies and mine scheduling can be further developed in order to

improve mine scheduling and also plant and equipment matching.



18

2 INTRODUCTION AND TERMS OF REFERENCE

2.1 Purpose of the Technical Report

Los Andes Copper Ltd. commissioned Coffey to prepare a Technical Report for the Vizcachitas

copper / molybdenum Project to the standards required by National Instrument 43-101 for

Preliminary Economic Assessment. This is broadly in line with AACE International

recommendations for a class 5 study. The Project operating and capital costs were developed to

an accuracy of ± 35 %.

The scope of the work defined was to evaluate a range of project throughputs which were either

designed to maximise resource exploitation or minimise initial capital expenditure. Those cases

which reported the highest NPVs outcome are presented in this Report.

The Vizcachitas copper-molybdenum porphyry deposit is located in Chile’s Region V, in theprovince of San Felipe and is wholly owned by Los Andes Copper Ltd., a TSX listed, Vancouver

based company. This Technical Report has been prepared for Los Andes Copper by or under

the supervision of Qualified Persons within the meaning of NI 43-101 in support of Los Andes

Copper’s disclosure of scientific and technical information for the Project. The principal

consultants used in the preparation of this document are:

Coffey: Resource Estimate, pit design, mine planning and

geotechnical revision

Alquimia Conceptos: Engineering, infrastructure, costing and cash flow.

2.2 Frequently Used Acronyms, Abbreviations, Definitions, and Units of Measurement

All units in this report are based on the International System of Units (“SI”), except industrystandard units, such as troy ounces for the mass of precious metals. All currency values are in

United States Dollars (“USD” or “$”) unless otherwise stated.

This report uses abbreviations and acronyms common within the minerals industry. Table 2-1

identifies the terms and abbreviations used in this Report.



19

Table 2-1: Units of Measurement

UnitAbbreviation or

Symbol

Abrasion Index Ai

American Dollar USD

American Dollar Cent cUSD

Centigrade °C

Centimetre cm

Chilean Peso CLP

Copper Cu

Copper cyanide CuCN

Copper equivalent CuEq

Cubic metre m3

Cubic foot/feet ft3

Cubic metre per hour m3/h

Day d

Foot/feet ft

Gram/litre g/l

Hour h

Horse power HP

Insoluble copper ICu

Kilogram kg

Kilogram per tonne kg/tKilo tonne kt

Kilo tonne per day ktpd

Kilometre km

Kilovolt kV

Kilovolt amp kVA

Kilowatt kW

Kilowatt hour kWh

Kilowatt hour per cubic metre kWh/m3

Kilowatt hour per metric tonne kWh/t

Kilowatt hour per short tonne kWh/stLife of mine LOM

Litre l



20

Table 2-2: Units of Measurement (continuation)

2.3 Effective Dates

The Effective Date of this report is taken to be January 23, 2014, the date that Los Andes

Copper received approval from the TSXV for the acquisition from Turnbrook Mining Ltd. of the

non-consumptive water rights over a section of the Rocin River, Putaendo, Fifth Region, Chile,

together with the engineering and other studies and reports for the development of a run-of-river

hydroelectric project generation facility (collectively, the Hydro Electric Plant). The Hydro Electric

Unit

Abbreviation or

Symbol

Litre per second l/s

Maximum max

Megawatt MW

Mega Volt Ampere MVa

Metre m

Metre per hour m/h

Metre per second m/s

Metres above sea level masl

Metric tonne t

Metric tonne per day tpd

Metric tonne per hour tphMilligram per litre mg/L

Millimetre mm

Million M

Million tonnes per annum Mtpa

Minutes min

Molybdenum Mo

Part per million ppm

Percent %

Pounds lb

Run of mine ROM

Short ton st

Specific gravity SG

Square metres m2

Square metres per tonne per day m2/tpd

Tonnes per hour tph

Tonnes per day tpd

Weight (mass) wt

Weight (mass) per cent % w/w

Work Index W i

Year y



21

Plant will make a significant contribution to the cash flow of the Project. The dates for critical

information used in this report are:

The Mineral Resource estimate and block model were completed on June 1, 2013.

The current personal inspection by the Qualified Persons was on June 4, 2013.

The final PEA mine plans were issued on June 18, 2013.

PEA Mineral process engineering and capital cost estimate were completed on June 28,

2013. A review of the cost estimates has been carried out to confirm that the cost

estimates are current at the time of the PEA publication.

Completion of the review of the project infrastructure was January 23, 2014.

Acquisition of the Hydro Electric Plant was January 23, 2014.

There were no material changes to the scientific and technical information of the Project

between the Effective Date and signature date of the Report.



22

3 RELIANCE ON OTHER EXPERTS

3.1 Other Independent Expert Persons

Preparation of this Technical Report has depended on documentation generated by Los Andes

Copper, Coffey and Alquimia. It also includes a number of documents with public and private

information provided by Los Andes Copper and information provided in various previous

Technical Reports listed in Section 27 of this Report.

The authors believe that the information provided and relied upon for preparation of this

Technical Report is accurate at the time of the Report and that the interpretations and opinions

expressed in them are reasonable, based on current understanding of mining and processing

techniques and costs, economics, mineralization processes and the host geological setting. Theauthors have made reasonable efforts to verify the accuracy of the data relied upon in this

Report.

The results and opinions expressed in this Report are conditional upon the aforementioned

information being current, accurate, and complete as of the date of this Report, and the

understanding that no information has been withheld that would affect the conclusions made

herein. The authors reserve the right, but will not be obliged, to revise this Report and

conclusions if additional information becomes known to the authors subsequent to the date of

this Report.

The authors of this Technical Report are not qualified to provide extensive comment on legalissues associated with the Property. For portions of Section 4 dealing with the types and

numbers of mineral tenures and licenses, the nature and extent of Los Andes Copper’s t itle and

interest in the Property, the terms of any royalties, back-in rights, payments or other agreements

and encumbrances to which the Project is subject, Coffey has relied upon the legal opinion of

DOLM Abogados for the land tenure and Los Andes Company Secretary for information related

to the net smelter returns applicable to the Project. Copies of these opinions are included in

Appendix A



23

4 PROPERTY DESCRIPTION AND LOCATION

The Vizcachitas Property is located at 32° 24’ 27” S and 70° 25’ 30”W in the Andes Mountains ofChile (See Figure 4-1: Vizcachitas Project Location).

The central UTM coordinates are 6,413,500N and 366,000E (Datum WGS 84, Zone 19H).



24

Figure 4-1: Vizcachitas Project Location (source: Los Andes Copper, June, 2013)

4.1 Land Tenure

Exploration claims permit the title holder to assess the land for mineral potential while in good

standing and are valid for two years after which they must be converted to exploitation claims or

a new application for an exploration claim must be made. Mining claims are perpetual, subject

only to timely payment of the annual mining taxes payable to the Chilean Governmental

Authorities.

The Project includes 38 established mining claims covering an area of 7,000 ha and 81

established exploration claims totalling 22,500 ha. All claims are held 100 % by CMVH or wholly

owned subsidiaries of Los Andes Copper. The exploration claims overlie the mining claims, a

common practice in Chile to protect the underlying claims. Table 4-1 and Table 4-2 and Figure4-2 and Figure 4-3 present the exploration and exploitation concessions held.

Coffey is not qualified to provide a legal opinion on the good standing of the properties and has

relied upon a letter provide by the Law Firm Domínguez, Ossa, Long & Macaya Abogados

(DOLM Abogados) who act as CMVH’s lawyers in Chile. This letter dated January 10, 2014

states that:

“We hereby inform you that currently the mining property of Compañia Minera

Vizcachitas Holding is composed of 119 concessions, 37 of which are exploitation

concessions and 81 exploration concessions. In addition, Sociedad Legal Minera SanJosé is the owner of one exploitation concession.

All of these concessions were legally constituted as they were granted by the

court of Putaendo and duly registered in the Mining Registry of such city. Additionally,

as of this date these concessions do not have any outstanding taxes or permits that

need to be paid for.”



25

Table 4-1: Exploitation Claims as of January 10, 2014

N° Mining Claim Name Owner Rol Nacional Hectares Validity

1 Huemul 1-40 CIA. MRA Vizcachi tas Holding 05604-0336-4 200 Indefini te

2 Isidro 8 1 al 200 CIA. MRA Vizcachitas Holding 200 In Process

3 Leon II 1/30 CIA. MRA Vizcachitas Holding 05604-0289-9 20 Indefinite

4 Leon III 1/30 CIA. MRA Vizcachi tas Holding 05604-0290-2 20 Indefini te

5 Leon IV 1/30 CIA. MRA Vizcachi tas Holding 05604-0291-0 20 Indefini te

6 Leon V 1/30 CIA. MRA Vizcachitas Holding 05604-0292-9 10 Indefinite

7 Loma Catorce 1/60 CIA. MRA Vizcachitas Holding 05604-0365-8 300 Indefinite

8 Loma Cinco 1/20 CIA. MRA Vizcachitas Holding 05604-0356-9 100 Indefini te

9 Loma Cuatro 1/56 CIA. MRA Vizcachitas Holding 05604-0355-0 280 Indefini te

10 Loma Dieciocho 1/60 CIA. MRA Vizcachitas Holding 05604-0369-0 300 Indefinite

11 Loma Dieciseis 1/18 CIA. MRA Vizcachitas Holding 05604-0367-4 90 Indefinite

12 Loma Diecisiete 1/56 CIA. MRA Vizcachitas Holding 05604-0368-2 280 Indefinite

13 Loma Diez 1/60 CIA. MRA Vizcachitas Holding 05604-0361-5 300 Indefini te

14 Loma Doce 1/40 CIA. MRA Vizcachitas Holding 05604-0363-1 200 Indefini te

15 Loma Dos 1 al 60 CIA. MRA Vizcachitas Holding 05604-0337-2 250 Indefini te

16 Loma Nueve 1/60 CIA. MRA Vizcachitas Holding 05604-0360-7 300 Indefini te

17 Loma Ocho 1/60 CIA. MRA Vizcachitas Holding 05604-0359-3 300 Indefini te

18 Loma Once 1/60 CIA. MRA Vizcachitas Holding 05604-0362-3 300 Indefini te

19 Loma Quince 1/60 CIA. MRA Vizcachitas Holding 05604-0366-6 300 Indefinite

20 Loma Seis 1/60 CIA. MRA Vizcachitas Holding 05604-0357-7 300 Indefini te

21 Loma Siete 1/60 CIA. MRA Vizcachitas Holding 05604-0358-5 300 Indefini te

22 Loma Trece 1/40 CIA. MRA Vizcachitas Holding 05604-0364-K 200 Indefini te

23 Loma Tres 1 al 18 CIA. MRA Vizcachitas Holding 05604-0354-2 90 Indefini te

24 Loma Uno 1 al 31 CIA. MRA Vizcachitas Holding 05604-0352-6 155 Indefini te

25 Loma Uno 46 al 52 CIA. MRA Vizcachitas Holding 05604-0353-4 35 Indefini te26 Roma 24 1 al 100 CIA. MRA Vizcachitas Holding 05604-0580-1 100 Indefini te

27 Roma 25 1 al 300 CIA. MRA Vizcachitas Holding 05604-0532-4 300 Indefini te

28 Romina 8 1 al 300 CIA. MRA Vizcachitas Holding 300 In Process

29 Romina 9 1 al 300 CIA. MRA Vizcachitas Holding 300 In Process

30 San Cayetano 1 al 20 CIA. MRA Vizcachitas Holding 05604-0215-5 100 Indefinite

31 San Jose 1/3000 SLM SAN JOSE 05504-0138-K 70 Indefinite

32 Santa Maria 1 al 60 CIA. MRA Vizcachitas Holding 05604-0214-7 236 Indefinite

33 Santa Teresa 1 al 60 CIA. MRA Vizcachitas Holding 05604-0216-3 271 Indefinite

34 Tigre Cinco 1/60 CIA. MRA Vizcachitas Holding 05604-0287-2 104 Indefini te

35 Tigre Cuatro 1/20 (19-20) CIA. MRA Vizcachitas Holding 05604-0286-4 10 Indefinite

36 Tigre Dos 1/20 CIA. MRA Vizcachi tas Holding 05604-0285-6 10 Indefini te

37 Tigre Tres 1-30 CIA. MRA Vizcachitas Holding 05604-0301-1 300 Indefini te38 Tigre Uno 1/30 CIA. MRA Vizcachi tas Holding 05604-0284-8 20 Indefini te



26

Table 4-2: Exploration Claims as of January 10, 2014

N°Exploration

Claim NameOwner Rol Nacional Hectares Validity

1 Azul 1 C IA. MRA Vizcachitas Holding 05604-1521-4 200 2015-10-21



4 Azul 4 C IA. MRA Vizcachitas Holding 05604-1515-K 300 2015-10-21






10 Azu l 10 CIA. MRA Vizcach itas Holding 05604-1512-5 300 2015-10-21


12 Azu l 12 CIA. MRA Vizcach itas Holding 05604-1514-1 300 2015-10-2113 Azu l 13 CIA. MRA Vizcach itas Holding 05604-1505-2 300 2015-10-21








21 LLano 1 CIA. MRA Vizcach itas Holding 05604-1247-9 200 23-Apr-14

22 Llano 2 CIA. MRA Vizcach itas Holding 05604-1261-4 200 23-Apr-14






28 Llano 8 CIA. MRA Vizcach itas Holding 05604-1255-k 300 23-Apr-14






34 Manzano 1 CIA. MRA Vizcachi tas Holding 05604-1152-9 300 12-Jan-14





27

N°Exploration

Claim NameOwner Rol Nacional Hectares Validity

37 Manzano 4 CIA. MRA Vizcachitas Holding 05604-1155-3 300 12-Jan-14


39 Manzano 6 CIA. MRA Vizcachitas Holding 05604-1157-K 300 12-Jan-14



42 Manzano 9 CIA. MRA Vizcachitas Holding 05604-1160-K 300 12-Jan-14














56 Puma 1 CIA. MRA Vizcachi tas Holding 05604-1321-1 300 02-Aug-14

57 Puma 2 CIA. MRA Vizcachi tas Holding 05604-1322-k 300 02-Aug-14



60 Rio 5 C IA. MRA Vizcachitas Holding 05604-1317-3 300 02-Aug-1461 Rio 6 C IA. MRA Vizcachitas Holding 05604-1318-1 300 02-Aug-14

62 Rio 7 C IA. MRA Vizcachitas Holding 05604-1319-k 300 02-Aug-14

63 Rio 8 C IA. MRA Vizcachitas Holding 05604-1320-3 300 02-Aug-14

64 Sauce 1 CIA. MRA Vizcachi tas Holding 05604-1488-9 300 2015-10-01








72 Sauce 9 CIA. MRA Vizcachi tas Holding 05604-1496-K 300 2015-10-01

73 Sauce 10 CIA. MRA Vizcachitas Holding 05604-1497-8 300 2015-10-01




77 Sauce 14 CIA. MRA Vizcachitas Holding 05604-1501-K 300 2015-10-01



80 Sauce 17 CIA. MRA Vizcachi tas Holding 05604-1527-3 300 16-Dec-15

81 Sauce 18 CIA. MRA Vizcachi tas Holding 05604-1526-5 300 16-Dec-15



28

Figure 4-2: Mining Claims as of January 10, 2014



29

Figure 4-3: Exploration Claims as of January 10, 2014

4.2 Title, Surface Rights and Legal Access

CMVH has signed a legal agreement with the land owners giving it access to the Vizcachitas

deposit. This enables the company to carry out exploration and drilling activities. This is an

annual agreement with provision for automatic annual renewals.

In accordance with the Chilean Mining Code, any titleholder of a mining concession, whether for

exploration or exploitation, has the right to establish an easement over the surface land, as

required for the appropriate exploration or exploitation of its concession. In the event that the

surface property owner does not agree to grant the easement voluntarily, the titleholder of the



30

mining concession may request said easement before the Courts of Justice who shall grant it

upon determination of the compensation for losses as deemed fit.

4.3 Net Smelter Return

There is a Net Smelter Return (NSR) applicable to the concession areas held before December

2010. The NSR royalties applicable to the project are as follows:

The San José 1:3000 concession has a NSR of 0.51 % for production from an

underground operation and 1.02 % from an open pit operation.

The remaining concessions that were held before December 2010 have NSR of 1 % for

production from an underground operation and 2 % from an open pit operation.

Concessions that were held before December 2010 are all of the mining claims shown in Figure

4-2.

Coffey is not qualified to provide a legal opinion on NSR related to the mining properties and has

relied upon a letter provided by the Los Andes Copper Corporate Secretary confirming their

status and value.

4.4 Environmental Liabilities

Existing environmental impact are believed to be restricted to exploration-level activities, and

comprise of disturbances at the drill pads, on access roads and around the exploration camp.

No formal environmental studies to identify potential environmental impact have been

completed.

4.5 Operational Permits

CMVH may carry out geological exploration including mapping, surface sampling and

geophysics within its claims area.

CMVH has a confirmation letter from the Chilean Environmental Assessment Service (Serviciode Evaluación Ambiental (SEA) in Spanish) indicating that it may drill up to 20 diamond drill

holes within the San Jose 1:3000 claim. Figure 4-2 indicates the location of the San Jose claim.

A special permit will be needed to carry out intensive grid drilling. This drilling may be required to

convert the Inferred Resources to Indicated and Measured Resources for the feasibility studies.

An application must be made to SEA as part of the Environmental Impact Evaluation System

(Sistema de Evaluación de Impacto Ambiental (SEIA), in Spanish). This process may take

between three to nine months to complete.



31

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY

5.1 Country Setting

Chile is one of the most developed Latin American countries with a stable democratic political

system since 1990.

One third of the 17 million Chilean population lives in Santiago.

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF) described

Chile after her visit in December 2012 as:

“Chile is one the most stable and prosperous nations in South America. It has enjoyed

robust growth over the last decade. Chile’s strong economic policy framework, includinga fiscal rule, inflation targeting, and exchange rate flexibility has underpinned the

economy’s resilience in the face of the global financial crisis and the devastatingearthquake in February 2010. Growth momentum is expected to remain strong. Risks

relate mainly to the uncertain global environment. Chile remains exposed to shifts in

commodity prices and deterioration in global financial market sentiment, although its

ample policy buffers would provide protection. On the upside, continued strong

domestic demand can put upward pressure on inflation and lead to further widening of

the current account deficit.” (Lagarde 2012)

Approximately 14.4 % (The World Bank, 2012) of the population lives in poverty. Successive

governments have worked to continually reduce this figure and Chile now has the lowest poverty

rates in South America. Poverty is decreasing progressively and a middle class has emerged.

National Gross Domestic Product (GDP) is USD 268.3 billion (The World Bank, 2012)2.

Chile has very good universities and well trained engineers and administrators. The mining

industry benefits from a highly skilled workforce.

Chile has the largest copper reserves and is the largest copper producer in the world. The

country has laws favourable to mining, although environmental laws have become morestringent in recent years.

Most mining services, from engineering to procurement of equipment, can be supplied in the

country.

2 http://data.worldbank.org/country/chile



32

5.2 Access

The Project is situated approximately 150 km northeast of Santiago de Chile and 46 kmnortheast of the town of Putaendo, in the Province of San Felipe, Region V. Of the total distance

between the Property and Santiago, approximately 120 km are paved and 30 km are gravel and

unimproved dirt roads. Total driving time from Santiago is approximately three hours.

Access to the Vizcachitas property by four-wheel drive vehicle is possible during much of the

year but it is subject to some interruptions following storms or spring runoff when high water

conditions in the Rocin River prohibit stream crossings.

5.3 Climate

The Property is located in the western foothills of the Andes at an average altitude of 2,100

masl.

The climate at site is warm-temperate with six dry months in summer and winter rainfalls. The

average precipitation is approximately 300 millimeters per year. Precipitation falls as both rain

and snow between April and October. The summer temperatures vary from a few degrees above

zero at night to 35° C during the day. In winter the temperatures are 10° to 15° C lower. The

relatively low elevation means that it is possible to explore all year round and to drill through the

winter months.

5.4 Physiography and Vegetation

The Rocin River bisects the Property and deeply incises the valley across the steep mountain

slopes.

Elevations within the Property range from below 1,800 m to over 3,400 m with an average

elevation of approximately 2,100 m. The exploration camp at Vizcachitas is located at

approximately 1,940 m.

Vegetation, which consists of bushes and trees a few tens to hundreds of centimetres in height,

is located in the valley bottoms close to the river where water availability make plant life

possible.

Figure 5-1 illustrates the topography in the Project area.

Access and topography do present certain challenges to the Project and they require to be

addressed in the engineering phase. Other operations such as Andina, Los Bronces and Los

Pelambres have all been developed in similar terrain.



33

Figure 5-1: View over the Project Area. General Site View looking East (source: Los Andes Copper, June, 2013)

5.5 Local Resources

There are no significant population centres in the immediate area of the Project. The closest

village is Resguardo de Los Patos approximately 25 km away and the town of Putaendo 46 km

away. There is a significant skilled and semi-skilled workforce population in the area with Los

Andes and San Felipe within 100 kilometres of the project site and Santiago 150 km away. Chile

generally is an advanced country in terms of mining technology and infrastructure and supplies

high quality mining professionals to other countries.

The Rocin River and the Chalaco Creek join together to form the Putaendo River. The Rocin

River is in the process of being dammed to provide a constant freshwater source for agriculture

in the Putaendo valley. The Rocin River does not have any water consumers between theproject site and the dam that is being constructed near to Resguardo de Los Patos.

5.6 Infrastructure

Vizcachitas is a green field site, and thus existing site infrastructure is limited to an exploration

camp and roads. However the Project benefits from substantial regional infrastructure including



34

a nearby railhead; National grid power and extensive road network. The Project’s reasonablylow altitude will also be beneficial when site specific infrastructure is developed.

The Property is large enough to host an open pit or underground mining operation, although

optimum locations for infrastructure may overlie third party mining claims. Concession owners

have the right to establish an occupation easement over the surface as required for the

appropriate exploration or exploitation of the concession. The majority of this area is owned by a

private Chilean company. The process for obtaining permits for easements well established by

Law in Chile.

The nearby towns of Los Andes and San Felipe are used as a base for many personnel and

subcontractors who work at the Codelco Andina mine. Anglo American’s Chagres smelter and

Codelco’s Ventanas smelter are within 140 km of the Project. The port of Ventanas is 140 km

away and currently handles copper concentrate from other mining operations in the district.

There is an operating railway line in San Felipe with connections to the two smelters and the port

of Ventanas. The PEA envisages the shipment of copper concentrate by rail to the Ventanas

port.

There are several large electrical substations near to the project site. The Nogales substation is

part of the 220 kV national grid distribution system and the Las Vegas substation part of the 110

kV system.

The Rocin River flows through the project site and is a tributary of the Putaendo and the

Aconcagua Rivers. Los Andes Copper currently owns consumptive water rights for a portion ofthe projected water requirements and with an extraction point located along the Aconcagua

River approximately 80 km from the project site. For the Project to proceed, Los Andes Copper

will need to secure additional consumptive water rights and make that water available at the

Project.

The Project is a green field site and local infrastructure will need to be built. This will include the

process water supply, Rocin River diversion tunnel, power supply from the national grid

substation to the project site, access road upgrade, concentrate storage and concentrate loading

facilities at the railhead.

Power for the Project is considered as being supplied from the Hydro Electric Plant and the

National Grid (Sistema Interconectado Central (SIC) in Spanish) and will be taken from either

the Nogales or Las Vegas substations, the former 105 km and the latter 74 km away.



35

6 HISTORY

6.1 Description

The outcropping hydrothermal and tourmaline breccias in the centre of the Property have green

copper oxide staining. A lack of high grade veins probably explains why there is no evidence of

early mining activity on the Property.

The central claim, San José 1/3000 (San José) was claimed in the 1970’s. There is nodocumentary evidence showing what work was carried out on the property at that time.

Placer Dome Sudamerica Limited (Placer) reviewed the Project in 1992 and signed an option

agreement in 1993. Placer completed mapping and sampling programs followed by six diamond

drill holes totalling 1,953 m.

In 1995, General Mineral Corporation (GMC) acquired 51 % of the San José claim and entered

into an option agreement for the Santa Teresa, Santa Maria, San Cayetano, and Tigre 1 AL 3

claims. They independently claimed the León 1 AL 16 concessions. The total area of this land

package was 3,788 ha (Osterman, 1997).

In 1997 GMC entered into a joint venture agreement with Westmin Resource Limited (Westmin),

which was subsequently terminated by Boliden in 1998 (Boliden acquired Westmin during the

period of the joint venture).

Beginning in 1995, GMC conducted detailed mapping, sampling, geophysics and drilling

programs. Although there is no comprehensive written summary of this work, 61 diamond drill

holes were completed through 1998 for a total of 15,841 m. Based on this information, GMC

calculated a non NI 43-101 compliant Measured and Indicated Mineral Resource of 645 million

tonnes at an average copper grade of 0.45 % and an average molybdenum grade of 0.014 % at

a 0.3 % Cu cut-off.

In 1998, GMC commissioned Kilborn International (Kilborn) to complete an initial feasibility study

on the Vizcachitas property. Kilborn commissioned an audit of the historic GMC resource and

concluded that at a copper price of $1.00 per pound, the net present value of the project was

$201 million at a discount rate of 8 %, with 20 % Internal Rate of Return after tax (Kilborn, 1998).

Shortly after the initial feasibility study was completed, GMC put the project on a care-and-

maintenance basis, dropping most of the claims with the exception of the central core of

concessions.



36

Lumina Copper Corp. (LUM) purchased GMC’s subsidiary Vizcachitas Limited in late 2003. This

included the shares of CMVH, which in turn owned 51 % of San José 1/3000 and other

surrounding claims constituting the Vizcachitas property.

In May 2005, under a Plan of Arrangement, Vizcachitas Limited was transferred to Global

Copper Corporation (Global), one of four successor companies of Lumina Copper Corp. During

the period, CMVH completed a preliminary rehabilitation of the camp and core storage,

maintained watchmen at the site, managed the mineral rights, and conducted general project

orientation for Global management and interested parties.

In November 2006, GHG Resources Limited (GHG) entered into an agreement with Global to

acquire all Global’s interest in the Vizcachitas property. The acquisition was completed in

February 2007. GHG paid USD 10,400,000 and issued to Global 6,280,000 shares and

3,900,000 share purchase warrants in the capital of GHG. After the purchase, GHG decided to

focus exclusively on Vizcachitas. GHG was renamed Los Andes Copper Ltd. (Los Andes

Copper). No additional field exploration was conducted between 1998 and the date of

acquisition by GHG including the period of Global’s ownership of the Property.

During the period 2007 through 2008 Los Andes Copper drilled a total of 79 drill holes for a total

of 22,615 metres. The drill hole numbers run from LAV-064 to LAV-142. Towards the end of this

period a NI 43-101 Technical Report was prepared by AMEC and SIM Geological Inc. The last

drill hole included in this Report was LAV-124 and the Effective Date for the Technical Report

was June 9, 2008 (AMEC, 2008).

In December 2010, the remaining 49 % of the San José claim was brought under the control of

Los Andes Copper. As of this time, all the mining claims are held by wholly owned subsidiaries

of Los Andes Copper.

During the period 2011 to 2012, CMVH systematically compiled and documented the historical

data for the Project. The assay certificates for all the samples have been located and the pulp

samples for the GMC and Los Andes Copper assaying have been documented and are stored

at the project site.

6.2 Historic Resource Estimates

Placer and GMC estimated historic mineral resources at Vizcachitas as part of exploration work

undertaken on the Property. These estimates are not NI 43-101 compliant and are included for

historic purposes only and should not be relied upon.



37

6.2.1 Placer Dome

This estimate is based on five of the six diamond drill holes. Results are presented in Acosta(1992) and Acosta and Zapata (1993). Placer concluded that Vizcachitas contained a non NI 43-

101 compliant resource of 300 million tonnes at an average copper grade of 0.42 %. (Acosta

and Zapata, 1993).

6.2.2 General Minerals

In 1997, using a cut-off grade of 0.3 % Cu, GMC estimated a non NI 43-101 compliant

Measured plus Indicated Resource of 645 Mt with an average grade of 0.45 % Cu and 0.014 %

Mo and an Inferred Resource of 496 Mt with an average grade of 0.38 % Cu and 0.014 % Mo.

The estimate was based on 14,370 individual assays from 68 drill holes (Kilborn, 1998).

There is no report on this resource but an audit of the resource was completed in early 1998 by

Mine Reserve Associates Incorporated (MRA) as part of an initial pre-feasibility study on the

Vizcachitas Project carried out by Kilborn International Incorporated. According to MRA, all

resource estimation parameters met or exceeded normal industry standards and met the

reporting requirements for Canadian securities commissions at that time (Kilborn, 1998).

In 1998 GMC commissioned Kilborn to complete a non NI 43-101 compliant “Initial FeasibilityStudy” on the Vizcachitas Property (Kilborn, 1998). It should be noted that the Kilborn study isno longer valid. The project, as envisioned by Kilborn, included the following:

An open pit mine, and a conventional crushing, grinding, and flotation mill for the recovery

of copper and molybdenum concentrates from primary sulphide ores

A partially lined dump leach facility for storage and treatment of secondary enrichment and

oxide ore

A solvent extraction and electrowinning plant for the recovery of copper cathode from

dump leach material

A tailings dam for the storage of mill tailings and recovery of process water

Various mine dumps

A dam and a seven kilometre tunnel designed to divert water from the Rocin River around

the project area

Administration facilities including offices, change house, cafeteria, truck shop, warehouse

and laboratory



38

Electrical supply line from San Felipe, plant site substation, power distribution and access

road.

6.2.3 GHG Resources Ltd.

In 2007 GHG commissioned A.C.A. Howe International Limited (ACA) to prepare a NI 43-101

compliant Mineral Resource estimate. The resource estimate was based on 68 diamond drill

holes for a total of 18,300 metres. Using a cut-off grade of 0.3 % Cu, ACA reported 232 Mt with

an average grade of 0.46 % Cu, 0.014 % Mo and 8 ppb Au as Indicated Resource, and 619 Mt

with 0.38 % Cu, 0.013 % Mo and 7 ppb Au as Inferred Resource, (Priesmeyer and Sim, 2007).

6.2.4 Los Andes Copper Ltd.

In 2008, before the drilling programme had been completed, Los Andes Copper commissioned AMEC and SIM Geological Inc. to prepare a NI 43-101 compliant Mineral Resource estimate.

The estimate was prepared from 130 drill holes with a cumulative length of 35,255 metres.

Los Andes Copper reported an Indicated Mineral Resource of 515 Mt with an average grade of

0.39 % Cu and 0.011 % Mo and an Inferred Mineral Resource of 572 Mt with an average grade

of 0.34 % Cu and 0.012 % Mo in the sulphide zone using a cut-off grade of 0.30 % Cu Eq.

Los Andes Copper also reported an oxide zone with an Indicated Mineral Resource of 55 Mt

with an average grade of 0.38 % Cu and 0.01 % Mo, and Inferred Mineral Resource of 33 Mt

with an average grade of 0.28 % Cu and 0.007 % Mo, using a cut-off grade of 0.20 % Cu. The

sulphide and oxide resource estimates are summarized in Tables 6-1 and 6-2.

Due to changes in metal prices during this period along with the relatively high molybdenum

content in the deposit, Los Andes Copper reported the mineral resources in the sulphide zone

based on copper equivalent grades. Copper equivalent grades in the 2008 AMEC report were

calculated using the following formula:

Cu Eq (%) = Cu % + (Mo %*6.67)

The formula assumed a metal price of USD 1.50/lb. Cu and USD 10.00/lb. Mo and the formula

does not account for metallurgical recoveries.



39

Table 6-1: AMEC 2008 Sulphide Mineral Resource Estimate

(1) Cu Eq=Cu% + (Mo% * 6.67). Metal prices: $1.50/lb Cu, $10.00/lb Mo. Assumed 100% mining and metallurgical recoveries

Table 6-2: AMEC 2008 Oxide Mineral Resource Estimate

Cut-off

CuEq % (1)

Tonnage

(Mt)

Cu Grade

(%)

Mo Grade

(%)

CuEq Grade

(%) Cu (Mlb) Mo (Mlb)

Indicated

0.20 597 0.36 0.010 0.43 4,738 132

0.25 563 0.37 0.011 0.44 4,592 137

0.30 515 0.39 0.011 0.46 4,428 125

0.35 442 0.41 0.012 0.48 3,995 117

0.40 351 0.43 0.012 0.51 3,327 93

0.45 252 0.47 0.013 0.55 2,611 72

0.50 160 0.51 0.013 0.60 1,799 46

Inferred

0.20 798 0.30 0.010 0.36 5,278 176

0.25 685 0.32 0.011 0.39 4,833 1660.30 572 0.34 0.012 0.41 4,288 151

0.35 420 0.36 0.013 0.44 3,333 120

0.40 280 0.39 0.013 0.48 2,407 80

0.45 176 0.43 0.014 0.52 1,668 54

0.50 92 0.46 0.016 0.57 933 32

Cut-off

Cu %

Tonnage

(Mt)

Cu Grade

(%)

Mo Grade

(%) Cu (Mlb) Mo (Mlb)Indicated

0.10 69 0.33 0.009 502 14

0.15 63 0.35 0.010 486 14

0.20 55 0.38 0.010 461 12

0.25 47 0.4 0.010 414 10

0.30 38 0.44 0.010 369 8

0.35 29 0.47 0.010 300 6

0.40 21 0.51 0.010 236 5

Inferred

0.10 67 0.21 0.005 310 7

0.15 51 0.24 0.005 270 6

0.20 33 0.28 0.007 204 5

0.25 22 0.31 0.007 150 3

0.30 8 0.37 0.006 65 1

0.35 5 0.42 0.007 46 1

0.40 3 0.46 0.008 30 1







42

Figure 7-1: Regional Geology

In central Chile, this metallogenic belt includes world class Cu-Mo porphyries, such as: Los

Pelambres-El Pachón located 75km north of the Vizcachitas deposit, Río Blanco-Los Bronces

located 80 km to south of Vizcachitas and El Teniente located 180 km to the south. Further

north, the Neogene metallogenic belt includes world-class Miocene (23.03 to 5.332 Ma)

epithermal precious metal deposits and less important Au, Cu, and Cu-Au porphyries in the El

Indio-Maricunga belt (Davidson and Mpodozis, 1991; Sillitoe, 1991).

In central Chile, the Neogene metallogenic belt coincides with the position of Miocene volcanic

centers and associated flat-lying volcanic rocks, sills, and dikes. The Miocene volcanic

sequence, with an average thickness of 2,500 m, comprises andesite, basalt (lavas and sills),

dacite, and intercalations of rhyolitic tuff, which constitute a north-south belt approximately 20 km

wide (Farellones Formation; Thiele, 1980; Rivano et al., 1990). Eruption of these volcanic rocks

occurred at a number of volcanic centers, possibly localized by intersections of regional

structures. These volcanic rocks overlie folded Oligocene (34 – 23 Ma) to early Miocene

andesitic volcanic and continental sedimentary rocks (Abanico and Coya-Machalí Formations in

a non-conforming manner; Thiele, 1980; Charrier et al., 2002).

The Neogene porphyry Cu-Mo deposits occur within hydrothermal alteration zones related to

multiphase porphyritic stocks with compositions ranging from quartz diorite to granodiorite.

These intrusions and their country rocks host dense networks of sulphide-bearing veins and

associated hydrothermal breccia complexes. The country rocks are: late Miocene basaltic and

andesitic volcanic rocks, diabase sills, and gabbro at El Teniente; Miocene andesite and amiddle Miocene granodioritic batholith at Río Blanco-Los Bronces (San Francisco batholith;

Serrano et al., 1996); and folded Lower Cretaceous (145 - 100 Ma) volcanic and sedimentary

rocks at Los Pelambres (Atkinson et al., 1996).

7.2 Local and Property Geology

At Vizcachitas, there are at least six intrusive rock types, six porphyritic rock types and eight

distinct types of breccia, hosted by the Oligocene (23-44 Ma) andesite of the Abanico Formation

(Jara et al. 2013). Dates obtained by GMC on biotite from four intrusive rocks yielded ages

between 10.4 and 12 ± 0.3 Ma (Osterman, 1997).The deposit covers an area of approximately

2.6 km2. A simplified geological map is shown in Figure 7-2.



43

Figure 7-2: Local Geology (source: Los Andes Copper, June, 2013)

The main volcanic unit in the area is a porphyritic andesite unit of the Oligocene andesite of the

Abanico Formation. Flat-lying volcanic rocks of the Miocene-age Farellones Formation

irregularly overlie the andesite of Abanico Formation. At Vizcachitas, the Farellones Formation

forms the mountain peaks in the district and is visible on surrounding hilltops above the older

volcanic and intrusive rocks that are altered and mineralized.



44

7.3 Mineralization

The hydrothermal alteration system at Vizcachitas appears to affect an area of approximately3.5 km2. The Vizcachitas deposit exhibits a typical core of quartz-sericitic and potassic alteration

surrounded by propylitic alteration outside of the quartz-sericite zone.

Hypogene mineralization consists of veinlet-controlled and disseminated pyrite, chalcopyrite and

molybdenite. Primary mineralization occurs in the tonalite, diorite, granodiorite and andesite

zones. Bornite and tetrahedrite/tennantite are also present in minor quantities.

Supergene mineralization occurs in the form of sooty or massive chalcocite and covellite

completely replacing or coating pyrite and chalcopyrite. Ferrimolybdite, a secondary

molybdenum mineral, malachite, azurite and cuprite are also present in minor quantities

(Brockway, 1998).

The Placer, GMC and 2007/2008 Los Andes Copper logging and cross section referred to a

sequence from surface of leached, oxide and supergene mineralised zones and finally a primary

or hypogene mineralization zone. This is the normal sequence in copper porphyry ’s especially innorthern Chile. Reviewing the mineralogical reports on the Property it is clear that in the areas

identified as the leached and oxide zone there may be up to 60 % of the copper mineral present

as chalcopyrite (Brockway, 1998). Evidently the leaching process is not complete. For this

reason the zones that have previously been classified as Leached or Oxide have been re-

classified as the Mixed mineralization zone.



45

8 DEPOSIT TYPES

The Vizcachitas deposit has similar features to other Andean-style porphyry copper-molybdenum deposits. This type of deposit contains large masses of hydrothermally altered

rock, sulphide-bearing veinlets and disseminations, quartz veins and stockworks which can

cover various square kilometres. These altered zones are commonly coincident with shallow

intrusives and/or dike swarms and hydrothermal or intrusion breccias.

Intrusive and hydrothermal breccias and zones of intensely developed fracturing due to

coincident or intersecting multiple mineralized fracture sets commonly coincide with the highest

metal concentrations.

Surface oxidation commonly modifies the distribution of mineralization in weatheredenvironments. Acidic meteoric waters, generated by the oxidation of pyrite, leach copper from

soluble copper minerals and re-deposit it as secondary minerals such as chalcocite and covellite

immediately below the water table in a blanket-shaped supergene enrichment zone. The

process produces a copper-poor leached cap lying above a relatively thin higher-grade zone of

supergene enrichment. The latter overlies a thicker zone of lower-grade primary (hypogene)

mineralization at depth.

Porphyry systems may also exhibit hypogene enrichment. The process of hypogene enrichment

may relate to the introduction of late hydrothermal copper-enriched fluids along structurally

prepared pathways or the leaching and re-deposition of hypogene copper, or a combination of

the two. Such enrichment processes result in elevated hypogene grades.







48

In 1997 Kilborn prepared a report titled “Vizcachitas Copper-Molybdenum Project, Initial

Feasibility Study, August 1998” for GMC. The two-volume report had a total of 717 pages. This

study detailed all the previous work on the project describing the geology, surface sampling,drilling, resource estimate and metallurgical studies. The conclusions of the report were that

using $ 1.0 / lb. copper the project had an IRR before tax of 22 % and an NPV at 8 % discount

rate of $ 201,000,000 (Kilborn, 1998).

Having completed the report no further exploration work was carried out on the Property.

9.3 Global Copper Corporation

Global did not conduct any exploration work on the Property.

9.4 Los Andes Copper Ltd.

Los Andes Copper re-evaluated the geological model prepared by GMC, updating the cross-

sections and the surface mapping. District mapping was updated and expanded to cover the

claim area.

Between July 2007 and October 2008 Los Andes Copper completed a total of 79 diamond drill

holes, totalling 22,615.60 m. Geotechnical and geological logging was completed on all drill

holes. The drill holes were assayed systematically for copper and molybdenum. Composite

samples were sent for mineralogical and metallurgical analysis for each of the main

mineralization domains. The drilling is discussed in more detail in Chapter 10.

A NI 43-101 Technical Report was commissioned with AMEC and SIM Geological Inc. before

the drilling had been completed. This report was published with an Effective Date of June 9,

2008 and included the results from 62 diamond drill holes, totalling 17,467 m. A domain model

for mineral zone and lithology was prepared for this study.

Having completed the drilling the geological cross sections were updated. The pulp samples and

the drill core was documented and stored at site.

Los Andes Copper has not performed any geophysical surveys on the Property.

During 2012 Los Andes Copper reviewed and documented all the historical data available for

the Property.



49

10 DRILLING

A total of 146 diamond drill holes have been drilled on the Property since 1993, totalling 40,383metres. The total metres drilled by each company is summarised in Table 10-1.The drill hole

locations are shown in Figure 10-1. The detailed location, azimuth and dip of all drill holes are

shown in Appendix B.

Table 10-1: Drilling Summary at Vizcachitas

Company Period Drill Hole Numbers No. of Drill Holes Total Meterage (m)

Placer Dome 1993 VP-01 to VP-06 6 1,952.95

General Minerals 1995-1998 V-01 to V-63 61 15,814.90

Los Andes Copper 2007-2008 LAV-064 to LAV-142 79 22,615.60

Total 146 40,383.45



50

Figure 10-1: Drill Hole Location (source: Los Andes Copper, June, 2013)

10.1 Placer Dome Sudamerica Limited

In 1993, Placer completed six diamond drill holes totalling 1,953 m. The drill holes are numbered

VP-1 to VP-6.The objective of the program was to evaluate the Property for its porphyry copper

potential.



51

10.2 General Minerals Corporation

Between 1995 and 1998, GMC completed 61 diamond drill holes for a total of 15,815 m. The

GMC drill program was intended to further evaluate the mineralized area identified by Placer and

to develop a mineral resource.

The drill holes were numbered from V-1 to V-63 but drill hole V-44 and V-51 were aborted and

not sampled or logged. Drill hole V-14A was not assayed because it reached only 20.43 metres

finishing within the overburden. Drill hole V19-A was included in the AMEC 2008 Technical

Report but it was drilled to only 21.96 m and was not assayed. Drill hole V-19 was drilled to

224.05 m. These aborted or short drill holes explain the differences between the number of drill

holes and total metres reported in the AMEC 2008 report and the number of completed drill

holes that have been quoted in this Technical Report. The full list of drill holes and their total

depth is included in Appendix B.

Geotechnical and geological logs are available for both the Placer and the GMC drilling in the

original handwritten format. The header of these logs includes general information such as

location, hole orientation and depth and drilling contractor. The geological logging includes

mineralization type, lithology, alteration, type of mineralization, fracture intensity and a visual

estimate of pyrite and chalcopyrite content. GMC prepared final logs in AutoCAD® format for the

geological logs and these include the sample numbers and the assay results for copper,

molybdenum and gold values in numeric format and as histograms.

Los Andes Copper has digitised the paper geotechnical logs so that the recovery, Rock Quality

Designation (RQD) and geotechnical logging can be analysed mathematically and the

information plotted up on sections.

10.3 Los Andes Copper Ltd.

10.3.1 Drilling

Los Andes Copper completed at total of 79 diamond drill holes, totalling 22,616 m, between July

2007 and October 2008. The Los Andes Copper drilling was carried out to refine the geologicalmodel, evaluate the continuity of mineralization, evaluate possible deposit extensions and

confirm the mineralization defined by the prior drill campaigns.

No drill holes were drilled within the San José 1/3000 claim area. At the time of the drill

campaign Los Andes Copper only owned of 51 % of this claim area.

The 2008 AMEC Technical Report was prepared using the drill holes the Placer, GMC and the

Los Andes Copper drill holes LAV-64 to LAV-124, a total of 62 drill holes and 17,467 m. The drill



52

hole LAV-121 was subsequently extended from a total depth of 85.85 m to a final depth of

250.00 m

Figure 10-2: Core Storage at the Project

10.3.2 Procedures

Advisor Drilling and Leduc Drilling Chile S.A. conducted core drilling using truck-mounted

Longyear LF-90 rigs. Core diameter was usually HQ diameter (63.5 mm), but NQ diameter (47.6

mm) has been used on certain deep holes but only when strictly necessary for technical

reasons. When the initial section of the hole crossed rock fill or loose material, a 51/2" tricone bit

was used, and no material was collected. The average drill hole depth was approximately 286

m, although some drill holes have exceeded 500 m depth.

Drill runs were consistently 3 m long. The cores were placed on 1 m long metal boxes, andidentified with the hole and the box numbers. Drill runs were marked with small wooden blocks.

Core recovery was measured by drill run after being removed from the core tube. Core boxes

were collected twice a day and transported by truck to the camp for logging, sampling, and

permanent storage. The core boxes were routinely covered and secured during transportation.

There was permanent supervision by the geological subcontractor, Geologica, at the drill site.

As part of the 2008 Technical Report, AMEC observed the drilling and handling of the core and

stated in the report that the procedures in place met best practices for the mining industry.

Coffey was not able to review the drilling operation but has made a site visit and has been able

to inspect the core boxes for all of the Placer, GMC and Los Andes Copper drilling.

10.3.3 Surveying

During the 2007/2008 drilling program all surveying was carried out using the Universal

Transvers Mercator (UTM) Zone 19H and the Provisional South American Datum 1956

(PSAD56). The June 2008 magnetic declination was 2°30' E, with a western annual drift of 8'.



53

Víctor Olguín, a local contractor, surveyed the collar locations using a Total Station Geodimeter

500 prior to drilling. The collar locations were re-surveyed after drilling was completed, and the

inclination of the hole was also measured.

Topographic measurements were referenced to three triangulation points installed as part of the

procedures required when registering mining claims. In Spanish these are called Hitos de

Mensura. The triangulation points were previously surveyed with reference to the Chilean

Instituto Geográfico Militar (IGM) national grid based on PSAD56.

Servapro Limitada (Servapro) produced a high resolution 5 m contour line spaced topographic

map at a scale of 1: 5,000 by air photogrammetric restitution. Los Andes Copper has updated

the topographic data, including new roads and other features as necessary.

The drilling contractor conducted the down-hole surveying using the Flexit method, which

determines the azimuth by magnetic reading and the inclination of the hole. Readings are taken

at 24 m intervals, and measurements within casing rods are discarded. The drilling contractor

delivered digital reports for each surveyed hole. Azimuth measurements were corrected for the

local magnetic declination.

As part of the 2008 Technical Report AMEC stated that the surveying procedures carried out by

Los Andes Copper were adequate.

In 2012, Los Andes Copper contracted the survey company EVG Geomensura to connect the

Project to the World Geodetic System WGS 84 datum (WGS 84). Using double frequencyTOPCON Hiper + GPS’s the Vizcachitas Property triangulation point HM LOMA DOS y LORO

DOS was surveyed from the Instituto Geográfico Militar topographic triangulation point PNQE.

Accurate measurements have enabled the conversion of the historical UTM PSAD56

coordinates to the UTM WGS 84 coordinates.

EVG Geomensura calculated the Molodenski transformation parameters to convert PSAD56

coordinates to WGS 84. The parameters for the Property are:

WGS 84 - PSAD56

DX: -329.515 m

DY: + 346.051 m

DZ: -324.901m

The historical topographic data has been converted using these parameters in the software

ArcGIS.



54

The central triangulation point “Vizcachitas” has a difference between PSAD56 and WGS 84 of

easting -183.119 and northing of -373.427. All the geographic coordinates used in the PEA have

been converted from PSAD56 to WGS 84 by subtracting 183.0 m from the easting andsubtracting 373.0 m from the northing. Converting the data by whole metres simplifies the data.

Validation of the topographic surveying showed that historical drilling coordinates are accurate to

approximately 1 m.

10.3.4 Geological and Geotechnical Logging

Los Andes Copper geologists conducted detailed geotechnical logging, which included RQD

data and frequency of fractures usually measured at 2 m intervals. In addition, structure and rock

matrix features such as roughness, infilling and wall resistance, filling type, infilling hardness,

matrix resistance and weathering grade were recorded using codes.

Geological logging was conducted after halving the core using a diamond saw. Los Andes

Copper geologists used a Fujitsu tablet PC for logging. The logs were recorded in digital

spreadsheet format and contain data of the intervals with their geological descriptions such as

lithology, types of veinlets, details on the alteration and mineralization (including a visual

appreciation of the pyrite/chalcopyrite ratio and the presence of gypsum or anhydrite) and

mineralization zones using pre-established codes. A reference collection of representative

samples from each drill hole was maintained on site.

10.3.5 Results

A mineral resource has been developed as result of the drilling campaigns carried out by Placer,

GMC and Los Andes in a mineralized area identified initially by Placer. The highlights of the

drilling campaign are presented in Table 10-2 and Table 10-3.



55

Table 10-2: Placer Dome and General Minerals drilling highlights

Hole ID From (m) To (m) Interval (m) Cu (%) Mo (%)

VP1 21.5 75.5 52 0.82 0.07

VP3 57.9 188 130.1 0.49 0.01

VP4 112 188 76 0.63 0.01

V-2 65.2 106.8 41.7 0.83 0.01

V-3 42.8 95.6 52.9 0.93 0.007

V-4 6.2 368.1 361.9 0.66 0.018

V-5 6.2 49.9 43.7 1.06 0.01

V-6 74.3 222.7 148.4 0.72 0.01

V-7 82.7 183.1 100.4 0.53 0.01

V-13 20.4 203.4 183 0.57 0.006

V-15 54.4 212 157.6 0.59 0.007

V-16 96.7 148.5 51.9 0.93 0.009

V-18 48.7 206.5 157.7 0.76 0.019

V-20 11.3 111.9 100.7 0.68 0.007

V-23 99.7 145.5 45.8 0.87 0.014

V-26 10.2 80.4 70.2 0.6 0.002

V-32 50 358.5 308.5 0.46 0.01

V-33 21.2 337.8 316.7 0.47 0.013

V-34 89 173.8 84.8 0.56 0.009

V-47 56.7 173.9 117.2 0.41 0.012

V-58 59.2 202.3 143.1 0.56 0.022

V-61 37.2 115 77.8 0.51 0.009



56

Table 10-3: Los Andes Copper drilling highlights

Hole ID From (m) To (m) Interval (m) Cu (%) Mo (%)LAV-68 58 196 138 0.54 0.01

LAV-72 34 132 98 0.7 0.013

LAV-75 48 218 170 0.4 0.007

LAV-73 14.6 94 79.5 0.59 0.013

LAV-77 40 350 310 0.41 0.008

LAV-78 27 300 273 0.42 0.009

LAV-81 82 260 178 0.57 0.012

LAV-82 20 250 230 0.41 0.01

LAV-83 164 246 82 0.47 0.012

LAV-84 36 210 174 0.52 0.004

LAV-85 10 150 140 0.64 0.003

LAV-88 41.6 250 208.5 0.57 0.002

LAV-89 34 126 92 0.7 0.023

LAV-90 8.3 412 403.7 0.42 0.005

LAV-91 68 192 124 0.65 0.019

LAV-94 44 142 98 0.5 0.008

LAV-98 110.5 180 69.5 0.54 0.01

LAV-108 42 260 218 0.57 0.009

LAV-109 32 230 198 0.41 0.015

LAV-112 40 172 132 0.56 0.013

LAV-118 74 172 98 0.43 0.015

LAV-120 48 168 120 0.45 0.016

LAV-123 36 270 234 0.49 0.01

LAV-124 238 376 138 0.6 0.016

LAV-125 43 250 207.1 0.41 0.012

LAV-126 63.2 114 50.9 0.55 0.03

LAV-131 56.8 186 129.2 0.71 0.014

LAV-135A 28.7 54 25.3 0.46 0.005

LAV-138 94 146 52 0.44 0.01

LAV-139 246 270 24 0.53 0.017

LAV-140 228 290 62 0.46 0.006



57

11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 Quality Assurance/Quality Control Definitions and Protocols

NI 43-101 and CIM Exploration Best Practice Guidelines (2010 and 2003b and 2005) state that

a program of data verification should accompany an exploration program to confirm the validity

of exploration data. Furthermore, the CIM Estimation of Mineral Resources and Mineral

Reserves Best Practice Guidelines require that a quality assurance and quality control (QA/QC)

program be utilized to ensure that analytical accuracy and precision are adequate to support

resource estimation (CSA, 2011a and 2011 b).

There are some basic concepts related to any QA/QC program, applicable to all elements in this

program:

Precision: the ability to consistently reproduce a measurement in similar conditions;

Accuracy: the closeness of those measurements to the “true” or accepted value;

Contamination: the inadvertent transference of material from one sample to another.

As a rule, two laboratories should be used during a sampling campaign: a primary laboratory,

where all the original samples are assayed, and a secondary (or umpire) laboratory, where a

representative portion of the samples assayed at the primary laboratory are re-assayed. The

QA/QC program includes submission of original samples to the primary laboratory, accompaniedby a proportion (usually 5 % to 10 %) of blind control samples, and submission of a portion of

the original sample coarse rejects from the primary laboratory to the secondary laboratory, also

accompanied by a proportion (usually 5 % to 10 %) of blind control samples.

The purpose of the blind insertion of control samples is to prevent the laboratory from identifying

the control samples, or at least the nature and equivalency of the control samples. All accredited

laboratories have internal QA/QC procedures and usually the assay certificates include the

results of the internal QA/QC. However, some laboratories will only reveal those checks which

pass their internal controls but not the failures. For this reason, the internal laboratory QA/QC

should not replace the client’s own QA/QC program.

A QA/QC program should monitor various essential elements of the sampling-assaying

sequence in an effort to control or minimize the total possible error in the sampling, splitting and

assaying sequence:

Sample collection and splitting (sampling variance, or sampling precision);



58

Sample preparation and sub-sampling (sub-sampling variance, or sub-sampling precision;

contamination during preparation);

Analytical accuracy, analytical precision and analytical contamination;

Data transfer accuracy (from paper to digital).

The QA/QC review, observations and recommendations made by AMEC in the June, 2008

NI 43-101 Mineral Resource estimate form the basis of this QA/QC report. Since the AMEC

report was completed, approximately 5,000 m of additional drilling has subsequently been

completed by Los Andes Copper and a review of the practices used for this drilling campaign

has been completed which in Coffey’s opinion meets the required industry standard.

11.2 Historic Data

While there is little documentation for the procedures used by Placer or GMC during their drilling

programs, the original logs, assay batch forms and assay certificates are well maintained and

documented for all drill holes. The core for all drill holes is well maintained and carefully stored at

the project site. The majority of the GMC pulp samples are stored and documented at the project

site.

The average sample length for the Placer drilling is 1.1 m with numerous samples less than 1.0

m in length (Sim, 2005). This scale of sampling is small in relation to the type of mineralization

being sampled and the scale of mining typical of relatively low-grade, high-tonnage deposits ofthis type.

The original hand written laboratory despatch sheets with the drill hole numbers, sample

numbers and the sample intervals are available for all the GMC drill holes. Photocopies of the

Placer assay certificates are available for all drill holes. The original signed assay certificates are

available for all the GMC drill holes. Photographs showing the un-cut core are available for drill

holes V-47 to V-63.

All drill cores were logged and split using either a manual core splitter or a diamond saw. The

core for all drill holes is stored at the Vizcachitas project site and is in good condition.

Samples from both the Placer and GMC rock chip sampling and drilling programs were

submitted to ACME Analytical Laboratories (Chile) Limitada (ACME) in Santiago, for analysis.

During the Placer and GMC drilling campaigns QA/QC programs were implemented by

introducing duplicate samples and two different standards for analysis within each batch. These

samples were not introduced at regular intervals but appear to have been sent every 20 to 40



59

samples, no blind sample system was implemented at this time and the laboratory noted blind

samples as duplicates in the assay logs.

Los Andes Copper has compiled and documented all the available data for the sampling and

assaying carried out by Placer and GMC. The final report prepared by Placer included the hand

drawn geological logs and photocopies of the ACME assay certificates (Acosta, 1993). Los

Andes Copper has the original assay dispatch forms and assay certificates for all the surface

sampling and drill sampling.

The original assay certificates have been scanned and the data captured using Optical

Character Recognition. The assay certificate data was imported into a MICROMINE GBIS

database. The scanned certificates were compared against the values in the historical database

and any differences were checked against the original certificates and data was corrected to

match the certificates. The number of errors identified was minimal indicating that both the

original database and the Optical Character Recognition database were compiled accurately.

A significant number of duplicate samples were sent to secondary laboratories namely Lakefield

Research Chile S.A. (Lakefield), CIMM Tecnologías y Servicios S. A. (CIMM) and ALS Geolab

S. A. (ALS). These are summarized in Table 11-1.

Table 11-1: GMC Secondary Laboratory Duplicates

The samples sent to all three laboratories show good correlation and the trend line plotted

shows that there is little bias between them. Figure 11-1, Figure 11-2 and Figure 11-3 illustrate

this bias for each laboratory.

LaboratoryNo. of

SamplesTrend Line

Lakefield 957 y = 0.9275x

CIMM 497 y = 1.0237x

ALS 656 y = 0.9661x



60

Figure 11-1: GMC Secondary Laboratory Duplicates ACME vs. CIMM



61

Figure 11-2: GMC Secondary Laboratory Duplicates ACME vs. Lakefield



62

Figure 11-3: GMC Secondary Laboratory Duplicates ACME vs. ALS

Check assays for copper from drill holes V-28 through V-37 were performed by MRA as part of

the Kilborn study (Kilborn, 1998). According to MRA, the primary laboratory was ACME and

checks were performed by CIMM. Both, ACME and CIMM are commercial laboratories in Chile

and certified under ISO 9001. A total of 220 check assays were available for analysis. MRA

determined that a slight bias was present in the copper data at a 95 % confidence level. Thebias represents a difference of 0.005 % Cu.

GMC used 6 different CRM’s in a discontinuous basis and without an established procedure and

ACME added their own reference material. This data has been extracted and shows that the

results are consistent with little variance and no change of precision over time. The results of the

ACME reference material are shown in Table 11-2. The results for STD_5 are shown in Figure

11-4.



63

Table 11-2: ACME Reference Material Results

Figure 11-4: ACME Reference Material STD_5

Only part of the samples from the copper oxide zone were assayed for soluble copper and of

those only a portion were assayed with sequential analysis. This type of analysis is an important

tool to define with analytical precision the limits of oxide-secondary sulphides-primary sulphides

mineralisation.

Subsequent to AMEC’s QA/QC review as part of the 2008 resource estimate Los Andes Copperhas taken steps to improve the level and accessibility of information pertaining to sample

preparation, assay procedures and quality control protocols. Most of the information is now

within Los Andes Copper’s physical and electronic database, including 90-95 % of the assay

certificates and almost 100 % of drill logs resulting in a greatly improved level of QA/QC

standard for the Project.

11.3 Los Andes Copper QA/QC Results

Los Andes Copper implemented a quality control (QC) protocol consisting of the insertion of

seven control samples in every fifty-sample batch (14 % insertion frequency), as follows:

Coarse duplicates at a proportion of one per batch (2 %), prepared from rejects

corresponding to previously assayed batches stored at the camp facilities;

Sample Type ElementNo. of

SamplesAverage (%)

Standard

DeviationCV (%) No. Outliers

Average

less outliers

(%)

GM STD-1 Cu 149 1.066 0.050 4.7 1 1.070

GM STD_2 Cu 90 0.485 0.032 6.6 5 0.492

GM STD_3 Cu 68 0.147 0.003 2.4 3 0.147

GM STD_5 Cu 118 10.620 0.019 1.8 3 10.620





65

The total drilling programme for the Vizcachitas Project consists of 147 drill holes and a total of

24,252 samples were assayed mainly for Cu and Mo. The QA/QC program considered

duplicates, blanks and CRM’s. A total of 6,219 certified representative materials were used.These are as presented in Table 11-3.

Table 11-3: Number of Samples used in the Vizcachitas QA/QC program

Los Andes Copper submitted 2,700 blank or CRM samples which represented more than 10 %

of the total samples assayed in the Project.

Coff ey’s review of the Vizcachitas Project Mineral Resource estimate was completed based

upon information provided by Los Andes Copper. The company applied a QA/QC program

during the 2007-2008 drilling program that was later improved by AMEC. Samples, from the

entire drilling campaign were predominantly submitted to SGS, with lesser submissions to

Actlabs, largely at the beginning of the program.

11.3.1 Duplicates

During the 2007/2008 drilling campaign, a total of 159 coarse duplicates were added to the

batches. The copper failure rate was 4 % with a total of 6 failures. An acceptable level of

precision is achieved if the failure rate does not exceed 10 % of all pairs.

One coarse duplicate was inserted into each batch (2 %). Coarse duplicates are prepared from

the coarse reject sample form a previous sample batch that is inserted into a later batch.

Coarse duplicates check sample preparation and sub-sampling for variance, the sub-sampling

precision and contamination during preparation. Pulp duplicates test analytical accuracy,

analytical precision and analytical contamination.

As part the QA/QC review for the 2008 Technical Report, AMEC found that the sub-sampling

variance was within acceptable limits. However, AMEC suspected that some of the failing

duplicates may have actually been mix-ups, which should be reviewed. A detailed review and

validation of the assay database identified samples that had been mixed up has subsequently

been completed by Los Andes Copper.

Company Standards Samples % Cu Duplicates Blanks

Oreas 92 159 0.229

Oreas 93 153 0.582

Oreas 94 160 1.140

Oreas 43P 468 0.013

Los Andes

Cooper 1,291 469





67

Table 11-4: Statistical results of Duplicate Samples from the Vizcachitas Project. (Los Andes Copper, June, 2013)

ACME –GMC samples are shown to the left and the SGS - Los Andes Copper samples to the

right; all showing the original and duplicate values.

The diagrams for correlation coefficient, relative error and dispersion for the ACME and SGS

results are shown in Figure 11-6.

LABORATORYPARAMETERS Cu (%)_Rou Cu (%)_Dup Cu (%)_Rou Cu (%)_Dup

Mean 0.320 0.319 0.333 0.333

Standard error 0.006 0.006 0.007 0.007

Median 0.267 0.267 0.301 0.303

Mode 0.016 0.016 0.319 0.243

Standard deviation 0.283 0.283 0.239 0.238

Sample variance 0.080 0.080 0.057 0.057

Kurtosis 6.547 7.110 2.173 2.172

Asymmetry coefficient 1.848 1.897 1.153 1.154

Range 2.397 2.412 1.683 1.684

Minimum 0.001 0.000 0.001 0.001

Maximum 2.398 2.412 1.684 1.695

Addition 741.647 740.736 430.185 429.535

Count 2321.000 2321.000 1291.000 1291.000

Mayor (1) 2.398 2.412 1.684 1.695

Low (1) 0.001 0.000 0.001 0.001

Confidence level (95.0%) 0.012 0.012 0.013 0.013

ACME - GMC SGS - LAC





69

Table 11-5: CRM Sample Summary

Table 11-5 clearly shows that the bias detected is low for Oreas 93, 94 and 95 (Cu standards),

with an important number of check samples. Conversely, Mo standard (Oreas 43P) shows a

high bias (-18.46 %), indicating this is a point to be improved in future drilling programs.

The numbers indicate that copper values from the laboratory are slightly higher than thoserecommended but in an acceptable range. However, the molybdenum values reported by the

laboratory indicate a potential under estimation of the real Mo values in the deposit.

Figure 11-7 graphically presents the assay results and statistical parameters for Oreas 92.

Figure 11-7: Oreas 92 Assay Results

The graph shows most of the values of Oreas 92 are above the recommended value but below

the upper recommended value. Only a few samples are outside the ± 2 SD limits, mainly at the

beginning of the process. The laboratory has adjusted precision with time and the values in

general are acceptable. It is clear that the position of the assay results of this CRM above the

recommended value with a 5.46 % bias indicates that the low grade copper values could be

overestimated by this amount.

Figure 11-8 illustrates the distribution of Oreas 93, the medium copper grade standard.

Sample Type ElementNo. of

Samples

Best Value

(%)

Confidence

Interval (%) Average (%) Bias (%)

Oreas 92 Cu 159 0.229 0.0038 0.2415 5.46

Oreas 93 Cu 153 0.582 0.0072 0.5911 1.56

Oreas 94 Cu 160 1.140 0.0299 1.1527 1.11

Oreas 43P Mo 468 0.013 0.0005 0.0106 -18.46



70


This graph shows the samples are generally between the recommended limits and, as in the

case of Oreas 92, the laboratory may be reporting a slightly higher copper value in the sample

than is the case. This standard shows very a low bias (1.56 %), indicating the laboratory has a

good level of precision with acceptable values for the medium copper grades in the deposit.

Figure 11-9 presents the distribution of standard Oreas 94, the high copper grade CRM.


As in the other two standards, this figure shows that most of the values are located above the

Recommended Value limit, with many of them even above the +2 SD limit. This situation means

that it is probable that the higher grade copper values may be slightly over estimated.

The results have a low bias (1.11 %) indicating the lab has a good level of precision for the high

copper grades in the deposit.

Figure 11-10 illustrates the Mo CRM Oreas 43P.



71

Figure 11-10: Oreas 43P Assay Results

The assay results for the Mo CRM are under the -2 SD limit and, in consequence, have under

estimated Mo levels. The values indicate -18.6 % bias. AMEC detected this situation and

recommended that SGS were advised to correct the bias. However, the last assay results for

this sample are in the same position indicating the laboratory may not have taken remedial

action.

This CRM is also certified for Cu and its assay results are shown in Figure 11-11.

Figure 11-11: Oreas 43P Mo Standard for Cu

In contrast to the molybdenum values, the copper values for this sample show the values are

located with acceptable precision near or around the upper recommended limit (+ 2 SD), the

laboratory is working adequately with copper.



72

Coffey believes the assay results of the standards used in the Vizcachitas Project provide an

acceptable support to the data base at PEA level. Future drill campaigns must consider

improving the substandard situation detected for molybdenum assays.

11.3.3 Blank Samples

Los Andes Copper undertook quality assurance using many types of materials as blanks. The

statistics for 469 blank samples used by Los Andes Copper during the 2007-2008 drill campaign

are shown in Figure 11-12.

Figure 11-12: Blank Assay Values in the Vizcachitas Project

The figure illustrates that the blank samples submitted during the Los Andes Copper drilling

campaign show very low copper values, varying mainly between 0.005 and 0.020 % Cu. There

are two values with higher Cu content which may be due to the uncertified nature of these two

samples (both were taken in the area of the Vizcachitas deposit). There are some clear outliers

that are probably related to external reasons rather than to laboratory accuracy such as incorrect

numbering of samples.



73

Coffey believes the results give an acceptable level of confidence to the work completed by SGS

at this level of the Project. The results support the Vizcachitas data base to an acceptable level

of precision. It is recommended that better blank material is used for future works in the Project.

11.3.4 Samples to Check Laboratory

Los Andes Copper sent 440 check coarse rejects samples to Actlabs, a second laboratory for

independent validation. The results indicated an acceptable level of comparison between both

SGS and Actlabs and are as presented in Figure 11-13. The confirmation analyses showed

good correlation with error variations no greater than ± 20 %. This error may be explained by the

use of coarse rejects. Coffey recommends that pulp samples are used in the future.



74

Figure 11-13: Actlabs Check Samples

A small minority of samples showed over 40 % relative error; this is probably due to mix-ups.

Pulp samples would have a much better correlation.

11.4 Opinion on the Adequacy of Sample Preparation and Assay Quality

Coffey finds the sample preparation is adequate and meets the standard industry practice at this

level of the Vizcachitas Project.

Los Andes Copper has implemented a quality control programme which included the insertion of

coarse duplicates, CRMs and coarse blanks. The precision of sub-sampling is within the

acceptable limits for both copper and molybdenum. The accuracy for copper is good; however,

the accuracy for molybdenum is poorer and should be addressed in future programs.

11.5 Los Andes Copper Core Sampling

This section is adapted from the 2008 AMEC Technical Report. A site visit was made by AMEC

to review the Los Andes Copper core sampling procedures. Coffey made a recent site visit to the

project site to review the core and pulp storage but has had to rely on the previous report for

details related to the sampling procedures.

Los Andes Copper procedures ensured that core recovery was measured by drill run after being

removed from the core tube and recorded in digital format. During the site visit, AMEC observed

the drilling procedures and core, and confirmed that the core recovery was good.

Core boxes were brought to a covered site for logging and storage at the camp. The facility was

sufficiently large, clean and provided good lighting for logging and sufficient space for long term

storage of cores and samples.

The reject sample materials were stored in separate metal bins.

The core boxes were placed on wooden racks for logging. Initially, intervals were checked and

regularized at 2 m. The boxes were then photographed with a digital camera in three box sets.

Drill cores were adequately labelled and organized for efficient location and extraction of theboxes and samples.

Core samples were systematically cut on 2 m intervals, using an industry standard core saw,

regardless of rock, alteration or zone types. The geologist did not mark the cutting line on the

core. Samples were submitted to the laboratory approximately every 10 days. Samples were

placed in numbered bags, in 50-sample batches. A local contractor, Osvaldo Hurtubia, was

responsible for sample transportation. Sample submissions were accompanied by chain of



75

custody forms, which were sealed and signed by a laboratory representative on reception of the

batch.

Collar coordinates, name of the logger, orientation, start and completion dates, were not

recorded on the log sheets in most cases. The completeness and legibility varied from one drill

file to another; however, the relevant information could be recognized in all reviewed files.

During the site visit, AMEC directly observed the logging and sampling operations. Such

procedures generally conformed to industry standard practices. However, Los Andes Copper

ignored major lithological contacts when defining the sampling intervals, which is considered a

poor practice and should be addressed in future drill campaigns.

AMEC recommended that, during future drilling, the responsible geologist draws the cutting line,

to avoid any inadvertent sampling bias and that major lithological boundaries are respected

when establishing the sampling intervals. The risk of biased samples can be avoided if the

technician alternates which half of the core is sent to the lab and which half is placed in the box

for each piece he cuts.

11.6 Specific Gravity Sampling and Determination

Los Andes Copper took specific gravity (SG) measurements on drill core on site using the

common water displacement method. Trained Los Andes Copper personnel conducted SG

determinations every 40 m down-hole or more frequently if major lithological changes occurred

within that interval. The bulk density samples ranged between 5 cm and 15 cm in length.

The determination procedure consisted of drying the sample, covering it with paraffin, and

weighing it in air and under water. The method measures the volume of water displaced by the

sample.

AMEC found that the sampling and specific gravity determination were adequate.

11.7 Los Andes Copper Assay Procedures

Lakefield Research in Santiago (SGS) was the primary analytical laboratory. SGS prepared and

assayed all samples from the last drill hole campaign conducted by Los Andes Copper. SGS iscertified under ISO 9001-2000. All assays were conducted in Chile.

Coffey has not received the SGS preparation and assaying protocols, but according to Los

Andes Copper geologists, samples were prepared as follows:

Drying at 105 °C for three to four hours;

Crushing to 95 % passing 2.36 mm (8 mesh Tyler);





77

12 DATA VERIFICATION

12.1 Summary

Information and data for this Technical Report were obtained from Los Andes Copper in

Santiago and also during a site visit undertaken by Coffey personnel on June 04, 2013. During

the visit, Coffey reviewed the location of selected drill holes collars from the 1995-1998 and

2007-2008 drilling campaigns and the location of the drill collar stick-ups. Coffey also reviewed

core boxes and sample storage.

Two drill core samples from different campaigns (V-34 and LAV-88, from GMC and Los Andes

Copper, respectively) were reviewed and original logging and assay results were compared with

visual observation. Both drill cores reviewed showed a good level of comparison and Coffeyfinds this information is adequate to be used in the data base for geological and economic

modelling.

The relevant geological and metallurgical information was produced and reviewed in sufficient

detail to prepare this Technical Report.

Figure 12-1: Pulp Sample storage on the Property (source: Los Andes Copper, June 2013)





79

Coffey did not review in detail the collar positions and accepts the AMEC conclusions. Coffey

physically checked the drill collars Los Andes Copper built, confirming they are in good condition

and according to industry practices.

12.3.3 Down-Hole Survey

Approximately 90 % of the drill holes down-hole survey is included in the database.

AMEC wrote in 2008: “Almost all the drill holes were drilled inclined. Of those 130 drill holes

existing at the moment in the data base, 61 were surveyed. The average deviations of the

surveyed holes were 1.17° per 100 m in azimuth and 0.19° per 100 m in dip, which are

considered reasonable because the average depth of the drill holes is 284 m and no significant

departures of the trajectories are observed in plan. However, holes with depth greater than 100

m should be systematically surveyed down-hole”.

Coffey confirms the down-hole information in the data base is acceptable for the purposes of this

Technical Report.

12.3.4 Database Review

Geological Data

Geological data is acceptable for the deposit. All the information is physically reliable with a

good support in both paper and digital format. Coffey recommends that additional detail for

lithologies and hydrothermal alteration must be considered in future work.

Assay Data

Los Andes Copper has a complete register in paper and digital format for all drill holes and

surface sampling. This includes information from the 3 companies that have worked at the

Property: Placer, GMC and Los Andes Copper. The information incorporates more than 95 % of

the data in a complete and secure validation. Coffey considers this information as acceptable.

12.4 Interpretation of Geology, Alteration and Mineralization

Los Andes Copper has constructed a geological model of the Vizcachitas Deposit based on 16

geological sections every 100 m and drill holes also approximately every 100 m in each section,

most of them drilled inclined. Geological sections are present in paper and digital format and

were focused on lithology and mineralization. Los Andes Copper did not work in horizontal levels

to complete a 3D control for the model.

AMEC found some minor discrepancies between rock observation and the logs.



80

Los Andes Copper has a good knowledge and understanding of the factors controlling

mineralization at Vizcachitas. Coffey reviewed the geological model, and finds that it is

consistent with the available information and drill core observations.

12.5 Specific Gravity

Both GMC and Los Andes Copper tested drill cores in the field using wet methodologies that

agree with industrial procedures. They tested cores from different lithologies (andesite, diorite,

granodiorite and tonalite) in an apparent proportion according their percentage in the deposit.

Los Andes Copper has assembled a reasonably comprehensive specific gravity (SG) database,

and Coffey finds that the SG data is reliable for resource estimation.

12.6 Opinion of Adequacy of the Database

Coffey reviewed the database and found it adequate for estimation purposes. However, Coffey

recommends that Los Andes Copper improves detail in the geological data (lithology and

alteration) and the geological model in order to verify the quality of results to be used in defining

geometallurgical units.



81

13 MINERAL PROCESSING AND METALLURGICAL TESTING

The Project has been subject to a number of physical characterisation and metallurgical testprogrammes to determine process route and expected recoveries. Bond work and abrasion

indices have defined the mineral physical characteristics used in the development of the study

and both leach and flotation test work have been carried out on Vizcachitas samples to

determine likely process route and recovery estimations.

13.1 Comminution Test Work

13.1.1 1998: Ball Bond Work Index

In October 1998, Lakefield Laboratories (Lakefield Research Chile S.A., 1999a) determined

standard Bond Ball Work indices (Wi) for five of the composite samples using standard

procedures. Table 13-1 shows the results of the Bond test.

Table 13-1: Summary of Ball Bond Work Index (source: Lakefield Research Chile S.A., 1999a)

The work index values of the different composites presented rather large fluctuations ranging

from a low of 10.1 to a high of 13.5 kWh/st.

13.1.2 2008: SMC Test and Bond Abrasion Test

A total of 6 samples for comminution tests and 6 samples for abrasion tests were received at

SGS Mineral Services in August 2008 (SGS Minerals Services, 2009).

The results of the comminution tests showed that the mineral samples were rated as hard tomoderately hard. The results of the abrasion tests showed that the samples were rated as

moderately abrasive.

Table 13-2 and Table 13-3 show the results of SMC Test and abrasion index respectively.

P80

kW/t kWh/st µm

B 14.9 13.5 115

C 11.5 10.4 109

E 11.1 10.1 115

H 12.9 11.7 118

I 12.9 11.6 117

SampleWi



82

Table 13-2: Summary of SMC Test (source: SGS Minerals Services, 2009)

Where:

DWi : Drop weight index (drop weight test)

Mia: Comminution energy for coarse particles (down to 750 µm)

AxB: Parameters obtained from SMC Test

Ai: Abrasion index

Table 13-3: Summary Abrasion Index Test (source: SGS Minerals Services, 2009)

13.2 Flotation Test Work

The process route considers bulk and selective flotation of copper and molybdenum from the

mineralized rock. A series of metallurgical tests aimed at understanding the behaviour of the

Vizcachitas mineral to flotation processes were undertaken over several test work campaigns.

The database of flotation tests performed included the following programmes:

1996 Test work (Lakefield Research Chile S.A., 1996)

Dwi

[kWh/m3]

Mia

[kWh/t]AxB

43506 2.58 7.5 22.3 34.28

43507 2.69 7.8 21.9 34.89

43508 2.57 6.6 20.2 39.40

43509 2.65 8.7 24.4 30.32

43510 2.55 5.7 18.2 44.49

43511 2.58 7.0 21.1 37.14

Sample

SMC test

SG

Initial Paddle Final Paddle Abrasion Index

weight (g) weight (g) Ai

43512 94.00 93.68 0.32

43513 94.67 94.31 0.36

43514 94.31 96.91 0.41

43515 94.80 94.33 0.47

43516 94.33 93.97 0.36

43517 94.71 94.31 0.40

Sample



83

▫ Chemical analysis

▫

Mineralogical analysis

▫ Primary flotation kinetics

▫ Open cycle test

1998 Test work (Lakefield Research Chile S.A., 1999a)


▫ Mineralogical analysis


▫ Open cycle test

▫ Locked cycle test

2008 Test work (SGS Minerals Services, 2009)



▫ Open cycle test

13.2.1 1996 Test Work

Seven small samples from two drill holes were submitted to Lakefield Research, Canada in 1996

(Lakefield Research Chile S.A., 1996). These samples seemed to be coarse rejects from the

drilling campaign at the time.

Table 13-4 presents the chemical analysis of the seven samples received. The head grades of

the samples varied from 0.50 to 1.31 % Cu and 47 to 275 ppm Mo. Precious metal values werelow, but silver values were 5 g/t in one sample. Arsenic values were low at 7 to 21 ppm.



84

Table 13-4: Chemical Analysis (source: Lakefield Research Chile S.A., 1996)

Mineralogical analysis showed that the principal copper mineral was chalcopyrite, but three of

the samples had significant amount of chalcocite and very minor amounts of covellite. Pyrite

values varied between 1 and 6 % by weight.

Table 13-5 shows the mineralogical characterization aimed at identifying the species present in

the samples and completed by automated quantitative mineralogy (QEMSCAN):

Table 13-5: Mineralogy (source: Lakefield Research Chile S.A., 1996)

Flotation tests were carried out on five of the samples; rougher tests and open-circuit cleaning

tests were also completed on the five samples. Rougher copper recoveries were very good in

Cu Mo Fe S Au Ag As

[%] [ppm] [%] [%] [ppm] [ppm] [ppm]

Saco 1 1.17 121 3.08 2.42 <0.01 4.4 16

Saco 2 0.74 47 3.58 1.80 0.01 2.2 8

Saco 3 0.50 73 6.35 0.92 0.02 1.3 12

Saco 4 1.31 57 5.05 3.52 0.02 5.1 8

Saco 5 0.95 117 3.62 1.40 0.02 1.5 8

Saco 6 0.64 115 2.84 2.80 0.03 1.0 7

Saco 7 0.67 275 3.21 3.70 0.01 1.3 21

Average 0.85 115 3.96 2.37 0.02 2.4 11

Maximum 1.31 275 6.35 3.70 0.03 5.1 21

Minimum 0.50 47 2.84 0.92 0.01 1.0 7

Standard dev. 0.30 76.80 1.27 1.05 0.01 1.66 5.29

Sample

Saco 1 Saco 3 Saco 5 Saco 6 Saco 7

Chalcopyrite 2.57 0.72 1.84 1.85 1.94

Chalcocite 0.24 0.26 0.35 - -

Covellite 0.12 0.08 0.05 - -

Tetrahedrite 0.02 - - - -

Pyrite 2.66 1.06 1.22 4.02 5.65

Molibdenite 0.02 0.01 0.02 0.02 0.02

Limonite 0.09 0.22 0.04 - -

Magnetite - 0.62 0.11 - 0.04

Hematite 0.06 0.16 0.08 0.57 0.51

Rutile 0.1 0.04 0.15 - 0.03

Non-Sulphide Gangue 94.12 96.8 96.14 93.54 91.82

Species% Weight



85

the range of 91 to >98 % with good rougher grades. It should be noted that these tests were

carried out at a relatively fine grind of 100 microns.

Table 13-6 shows the results for the maximum flotation time tested (12 minutes).

Table 13-6: Summary of Rougher Flotation; time 12 min (source: Lakefield Research Chile S.A., 1996)

Molybdenum recoveries, with a few exceptions, were generally unsatisfactory; this was mainly

due to the fact that diesel which is commonly used as a promoter for molybdenite flotation was

not used during these tests.

Ten open-cycle tests were developed with three cleaning stages for different grind and regrind

product sizes.

Table 13-7 presents the results obtained. Copper recoveries on third cleaner stage of 98 % with

regrind size of 20 - 30 microns, with a final concentrate grade between 30 and 38 % were

obtained. A finer regrind product produced a lower grade copper concentrate. Recoveries are

calculated on each individual test.

MIBC Reagent-

dosage P80 Cu Mo Cu Mo Cu Mo Cu Mo

[g/t] [g/t] µm [%] [%] [%] [%] [%] [%] [%] [%]

S1-1 15.0 3477 - 40 100 8.0 1.19 0.010 1.17 0.012 10.4 0.043 97.5 49.3

S1-2 n/i SIPX - 15 100 8.0 1.15 0.009 1.17 0.012 9.3 0.050 97.6 64.1

S3-1 20.0 3477 - 40 100 9.0 0.48 0.007 0.50 0.007 4.5 0.031 94.4 44.8

S3-2 12.5 SIPX - 15 100 8.0 0.46 0.007 0.50 0.007 4.7 0.035 91.0 45.0

S5-1 17.5 3477 - 45 100 8.5 0.96 0.008 0.95 0.012 9.8 0.045 97.6 57.5

S5-2 17.5 SIPX - 25 100 8.5 0.97 0.013 0.95 0.012 8.3 0.096 97.5 87.2

S6-1 15.0 3477 - 40 100 9.2 0.67 0.010 0.64 0.012 7.0 0.074 98.8 74.2

S6-2 17.5 SIPX - 25 100 9.4 0.63 0.013 0.64 0.012 6.0 0.108 98.1 88.5

S7-1 10.0 3477 - 40 100 9.1 0.68 0.029 0.67 0.028 6.5 0.169 98.7 61.5

S7-2 10.0 SIPX - 25 100 9.4 0.65 0.032 0.67 0.028 6.3 0.225 98.3 71.2

0.78 0.014 0.79 0.014 7.29 0.087 97.0 64.3

1.19 0.032 1.17 0.028 10.4 0.225 98.8 88.5

0.46 0.007 0.50 0.007 4.51 0.031 91.0 44.8

0.26 0.01 0.25 0.01 2.09 0.06 2.4 15.9Standard deviation

Saco 1

Saco 3

Saco 5

Saco 6

Saco 7

Test

Rougher concentrate

Average

Maximum

Minimum

pH

Head, Dir.Head, Calc. Grade Recovery

HeadConditions

Sample



86

Table 13-7: Cleaner Flotation Summary (source: Lakefield Research Chile S.A., 1996)

Grinding Regrind Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo

[µm] [µm] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%]

S1-3 92 30 1.19 0.011 1.17 0.012 9.4 0.056 97.7 65.4 26.4 0.050 97.9 31.1 34.2 0.037 98.6 55.5 37.7 0.026 98.9 63.3

S1-4 92 53 1.18 0.010 1.17 0.012 9.7 0.048 89.5 57.4 17.9 0.063 98.0 69.9 21.4 0.059 98.6 77.9 23.8 0.042 98.8 62.4

S3-3 92 19 0.44 0.007 0.5 0.007 5.7 0.048 97.8 47.2 22.7 0.164 96.3 83.2 27.3 0.190 98.5 94.8 29.9 0.200 98.7 94.8

S3-4 92 19 0.43 0.007 0.5 0.007 9.3 0.179 98.7 47.3 22.6 0.150 83.7 5.2 22.6 0.140 83.7 5.2 22.6 0.121 83.7 5.2

S5-3 100 24 1.04 0.013 0.95 0.012 9.8 0.105 98.3 79.9 28.0 0.130 97.9 42.2 34.6 0.125 98.8 76.8 36.4 0.110 99.4 83.4

S5-4 100 37 0.95 0.012 0.95 0.012 9.4 0.103 97.9 86.3 21.6 0.172 97.3 70.4 26.8 0.175 98.1 80.7 28.3 0.150 98.9 80.2

S6-3 135 25 0.74 0.016 0.64 0.012 9.3 0.179 97.8 87.1 24.3 0.412 98.2 86.8 28.1 0.415 99.0 86.2 29.9 0.340 98.8 76.0

S6-4 135 39 0.67 0.014 0.64 0.012 9.5 0.169 98.2 81.7 20.8 0.314 98.4 83.8 25.4 0.340 98.8 87.9 27.9 0.290 98.3 76.1

S7-3 114 20 0.73 0.033 0.67 0.028 10.1 0.313 98.3 66.9 23.6 0.327 98.2 43.9 29.0 0.259 99.1 63.8 31.5 0.180 98.4 63.0

S7-4 114 35 0.66 0.035 0.67 0.028 8.4 0.276 98.3 61.3 21.4 0.335 98.2 47.0 25.5 0.278 99.4 69.0 27.8 0.190 99.0 62.1

0.80 0.016 0.79 0.014 9.08 0.148 97.3 68.0 22.9 0.212 96.4 56.4 27.5 0.202 97.3 69.8 29.6 0.165 97.3 66.7

1.2 0.035 1.2 0.03 10.1 0.313 98.7 87.1 28.0 0.412 98.4 86.8 34.6 0.415 99.4 94.8 37.7 0.340 99.4 94.8

0.4 0.007 0.5 0.01 5.7 0.048 89.5 47.2 17.9 0.050 83.7 5.2 21.4 0.037 83.7 5.2 22.6 0.026 83.7 5.2

0.28 0.01 0.25 0.01 1.25 0.09 2.74 15.11 2.86 0.13 4.51 26.83 4.31 0.12 4.77 25.54 4.79 0.10 4.78 24.2

Saco 5

Saco 6

Saco 7

2nd Cleaner concentrate

Grade Recovery

3rd Cleaner concentrate

Grade Recovery

1st Cleaner concentrate

P80 Head, Dir.

Head

Test Sample

Conditions

Head, Calc.

Rougher concentrate

Saco 3

Grade Recovery

Saco 1

Grade Recovery

Standard deviation

Average

Maximum

Minimum



87

13.2.2 1998 Test Work

A total of 47 coarse reject samples were delivered to Lakefield Laboratories in October 1998 and

blended into 11 composite samples (labelled A to K), largely based on lithology but also on type

of mineralization (Lakefield Research Chile S.A., 1999a). The head grade of these composite

samples varied from 0.43 to 0.94 % Cu and 0.005 to 0.0140 % Mo. Some composite samples

contained silver grades up to 6 g/t. It was noted that some composite samples had significant

values of acid soluble copper, up to 20 %, which normally adversely affects the overall recovery

of copper minerals. Table 13-8 illustrates the description and chemical analysis of the samples.

Table 13-8: Sample Description and Chemical Analysis (source: Lakefield Research Chile S.A., 1999a)

Mineralogical examination of the composite samples showed that the principal copper mineral

was chalcopyrite. A few composite samples contained large proportions of chalcocite and

covellite. Three samples contained small amounts of tennantite/tetrahedrite and one sample

contained 7 % enargite.

Table 13-9 presents the sample mineralogy.

Cu Cu (citric) Cu(sulfuric) Cu(NaCN) Mo Fe Ag Zn

[%] [%] [%] [%] [%] [%] [ppm] [ppm]

A Andesite High grade enrichment 0.94 0.09 0.1 0.52 0.008 3.38 1.60 36

B Andesite Mixed 0.54 0.08 0.09 0.24 0.014 5.07 1.24 40

C Andesite Primary mineralization 0.53 0.01 0.02 0.09 0.005 2.09 0.60 39

D Granodiorite High grade enrichment 0.85 0.07 0.06 0.49 0.012 2.37 8.00 36

E Granodiorite Mixed 0.49 0.08 0.1 0.15 0.006 2.51 0.08 62

F Granodiorite Primary mineralization 0.49 0.02 0.02 0.11 0.009 1.07 0.12 36

G Diorite High grade enrichment 0.78 0.09 0.08 0.39 0.012 4.12 5.85 42

H Diorite Mixed 0.54 0.03 0.03 0.16 0.009 3.28 2.53 40

I Diorite Primary mineralization 0.43 0.02 0.02 0.07 0.012 3.82 2.86 65

J Breccia 0.53 0.05 0.04 0.17 0.012 3.6 2.17 107

K Porphyritic Dacite 0.59 0.05 0.05 0.18 0.009 3.58 2.84 62

Average 0.61 0.05 0.06 0.23 0.010 3.17 2.54 51

Maximum 0.94 0.09 0.10 0.52 0.014 5.07 8.00 107

Minimum 0.43 0.01 0.02 0.07 0.005 1.07 0.08 36

Standard deviation 0.17 0.03 0.03 0.16 0.003 1.10 2.44 21.71

Composite Rock type Grade





89

Table 13-10: Summary of Rougher Flotation Test Composite A (source: Lakefield Research Chile S.A., 1999a)

It should be noted that this was a relatively high grade composite sample at over 0.9 % Cu.

The open cycle test was composed of rougher flotation stages, first cleaner, scavenger and

second cleaner. The grind size P80 was 100 microns.

Table 13-11 shows the results of the test for the composites J and K (two tests for each

composite). It was noted that the finer regrind product (P80 60 microns) generated a lower gradecopper concentrate at the second cleaning stage. Tests with regrind size P80 of 28 microns

obtained concentrate copper grade of 30 %. The table also incorporates an estimate of

recoveries for locked cycle test work.

Cu Mo Cu Mo Cu Mo

3477 SIPX Diesel MIBC DF-250

/MIBC [%] [%] [%] [%] [%] [%]

A1 40 - - 10 - 100 0.94 0.014 9.6 0.130 94.4 81.2

A2 40 - - 10 - 150 0.98 0.014 9.4 0.110 88.9 74.6

A3 40 - 15 10 - 100 0.97 0.014 9.6 0.140 94.2 93.7

A4 20 20 - - 10 100 0.96 0.014 9.6 0.130 94.5 87.0

0.96 0.014 9.5 0.128 93.0 84.10.98 0.014 9.6 0.140 94.5 93.7

0.94 0.014 9.4 0.110 88.9 74.6

0.02 0.00 0.13 0.01 2.74 8.15

Minimum

Standard deviation

Test

Conditions Rougher concentrate

P80

Grinding

µm

Grade Recovery

Calculated head

AverageMaximum

Reagent [g/t]

Collector Frothers



90

Table 13-11: Summary of Cleaner Flotation Result – Samples J and K (source: Lakefield Research Chile S.A., 1999a)

Regrind Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo Cu Mo[µm] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%] [%]

J5 28 0.54 0.009 6.4 0.100 93.7 89.6 21.0 0.290 88.2 75.0 29.9 0.390 85.0 67.5

J6 60 0.48 0.010 6.2 0.120 92.1 90.4 15.6 0.310 89.2 87.3 20.9 0.410 86.6 84.5

K5 28 0.58 0.007 9.3 0.100 94.5 86.2 23.7 0.230 89.5 74.1 30.4 0.280 86.3 67.1

K6 60 0.62 0.007 9.1 0.100 92.8 86.6 21.4 0.220 89.1 80.1 28.5 0.280 86.5 75.8

0.56 0.008 7.76 0.105 93.3 88.2 20.4 0.263 89.0 79.1 27.4 0.340 86.1 73.7

0.62 0.010 9.31 0.120 94.5 90.4 23.7 0.310 89.5 87.3 30.4 0.410 86.6 84.5

0.48 0.007 6.23 0.100 92.1 86.2 15.6 0.220 88.2 74.1 20.9 0.280 85.0 67.1

0.06 0.002 1.67 0.010 1.05 2.11 3.43 0.044 0.56 6.06 4.42 0.070 0.74 8.23

Cu

Mo

Calculated recovery (%)

Cleaning circuit (locked cycle)

97.3

89.4

Standard deviation

J

K

Grade

Maximum

Minimum

Average

Grade RecoveryTest Sample

Head, Calc. Rougher concentrate 2nd Cleaner concentrate

P80Cu

1st Cleaner concentrate

Grade RecoveryRecovery

Conditions

Mo





92

The results, although somewhat variable, can generally be regarded as satisfactory; apart from

composite CFI, where both the final concentrate grade and recovery are poor.

Impurity analyses of the final concentrates showed that there were some impurities which were

above the limit normally permitted without incurring penalties (0.024 % Sb, 0.24 % As). This

should be reviewed in any future test work.

NaCN addition in rougher tests for depressing pyrite may have produced the low copper

recoveries noted for the locked cycle tests.

13.2.3 2008 Test Work

The metallurgical test program conducted in 2008 was completed by SGS Minerals Services

(Santiago) for Los Andes Copper.

A total of 6 samples were received in April 2008 and a further 5 samples were received in

October 2008; all of these samples were supplied for flotation test work. These samples were

coarse rejects from drilling campaigns.

Table 13-14 presents the chemical analysis of the eleven samples received. The mineral has a

copper grade between 0.34 to 0.76 % and has a molybdenum grade between 0.008 and 0.023

%.

Table 13-14: Chemical Analysis (source: SGS Minerals Services, 2009)

Rougher flotation tests were carried out on the first set of samples delivered at three different

grind sizes with P80´s of 100, 130 and 160 microns.

Cu Mo Fe S As

[%] [ppm] [%] [%] [ppm]

32825 0.57 0.010 3.2 2.5 0.008

32826 0.37 0.021 3.0 1.0 0.005

32827 0.66 0.013 2.1 1.4 0.021

32828 0.53 0.015 3.7 1.5 0.007

32829 0.43 0.008 2.0 1.2 0.005

32830 0.76 0.011 4.8 1.3 0.006

43522 0.34 0.023 2.8 1.2 0.005

43523 0.60 0.010 1.9 1.2 0.008

43524 0.48 0.011 3.6 1.2 0.005

43525 0.41 0.010 2.1 1.5 0.005

43526 0.64 0.012 3.5 1.3 0.005

Average 0.53 0.013 3.0 1.4 0.007

Maximum 0.76 0.023 4.8 2.5 0.021

Minimum 0.34 0.008 1.9 1.0 0.005

Standard dev. 0.13 0.005 0.9 0.40 0.005

3rd

Shipment

1st

Shipment

SampleShipping



93

Table 13-15 and Table 13-16 show the summary of results obtained in the rougher kinetics

flotation test.

Very good rougher recoveries, in the range of 94 % to >98 % were achieved for all of the

composite samples. The grind had significantly less of an effect on the rougher recovery when

compared to previous test work; the recoveries were less than one percent lower for the coarser

grind than for the finer grind.

Rougher grades were lower than those from previous test work, in the range of 3 to 6 % Cu, but

still sufficiently high to allow upgrading to commercial grade concentrates.

Molybdenum rougher recoveries were also very good at up to 96 % Mo (range 88 % to 96 %),

while the rougher grades were relatively low due to the lower head grades.

Table 13-15: Cumulative Cu Recoveries and Grades at different P80 – 12 minutes flotation residence time (source: SGS

Minerals Services, 2009)

Recovery Grade Recovery Grade Recovery Grade

[%] [%] [%] [%] [%] [%]

32825 98.6 4.0 98.3 5.3 98.3 5.4

32826 98.1 3.3 98.1 2.9 97.6 3.8

32827 97.8 6.0 97.4 5.7 97.4 5.9

32828 97.1 3.9 96.8 3.6 97.1 4.1

32829 98.5 4.0 98.6 4.2 97.7 4.6

32830 94.6 6.7 94.1 6.0 94.3 6.7

Average 97.5 4.7 97.2 4.6 97.1 5.1

Maximum 98.6 6.7 98.6 6.0 98.3 6.7

Minimum 94.6 3.3 94.1 2.9 94.3 3.8

Standard dev. 1.5 1.4 1.7 1.2 1.4 1.1

Sample

100 microns 130 microns 160 microns

Copper





95

Table 13-17: Copper and Molybdenum Recovery, regrind at 35 microns – two cleaner stages (source: SGS Minerals Services, 2009)

Rougher 1st

cleaner

2nd

cleaner Rougher

1st

cleaner

2nd

cleaner Rougher

1st

cleaner

2nd

cleaner Rougher

1st

cleaner

2nd

cleaner

1 32825 97.1 97.9 91.2 7.9 16.6 19.8 89.8 96.8 86.3 0.13 0.27 0.31

2 32826 96.1 97.5 92.4 5.5 12.0 14.2 94.9 98.1 92.0 0.30 0.65 0.77

3 32827 96.3 96.2 90.2 8.4 18.4 21.2 92.7 95.7 87.9 0.16 0.36 0.40

4 32828 96.0 95.6 90.7 4.2 12.4 16.5 93.7 94.7 87.0 0.11 0.32 0.41

96.1 96.2 89.4 6.0 15.2 19.0 88.8 95.2 86.2 0.14 0.35 0.42

97.8 97.9 92.4 8.4 18.4 24.4 94.9 98.1 92.0 0.30 0.65 0.77

93.4 92.4 80.2 4.2 12.0 14.2 73.1 89.7 73.6 0.07 0.24 0.31

1.5 2.0 4.6 1.8 2.8 3.6 8.0 2.9 6.5 0.08 0.15 0.18


Cleaning circuit (locked cycle) 99.1 93.0

Minimum

Standard dev.

Average

Maximum

Mo grade [%]Test Sample

Regrind of 35 microns Regrind of 35 microns

Cu recovery [%] Cu grade [%] Mo recovery [%]



96

Table 13-18: Copper and Molybdenum Recovery, regrind at 50 microns – two cleaner stages (source: SGS Minerals Services, 2009)

The conditions for cleaner stages were changed and tested on four samples; a f iner regrind with a P80 of 25 microns and three stage

of cleaner were tested. There was generally an improvement in recovery and concentrate grade as shown in Table 13-19:

Rougher 1stcleaner

2ndcleaner

Rougher 1stcleaner

2ndcleaner

Rougher 1stcleaner

2ndcleaner

Rougher 1stcleaner

2ndcleaner

7 32825 97.1 98.0 93.0 7.8 16.1 18.8 90.1 97.1 91.6 0.13 0.27 0.31

8 32826 97.2 97.6 93.7 5.4 13.5 17.0 94.9 98.0 93.9 0.29 0.72 0.91

9 32827 96.4 93.9 83.7 8.1 19.1 21.8 92.9 93.7 83.9 0.16 0.38 0.44

10 32828 96.4 95.0 87.7 4.1 13.2 16.9 93.6 93.7 81.2 0.11 0.34 0.40

11 32829 96.4 97.8 93.6 4.8 13.3 17.0 88.5 96.2 89.8 0.09 0.24 0.29

12 32830 93.0 95.4 84.7 3.9 13.5 20.6 84.6 95.6 83.8 0.06 0.19 0.29

96.1 96.3 89.4 5.7 14.8 18.7 90.7 95.7 87.4 0.14 0.36 0.44

97.2 98.0 93.7 8.1 19.1 21.8 94.9 98.0 93.9 0.29 0.72 0.91

93.0 93.9 83.7 3.9 13.2 16.9 84.6 93.7 81.2 0.06 0.19 0.29

1.5 1.8 4.6 1.8 2.4 2.1 3.8 1.8 5.1 0.08 0.19 0.24

96.9

Average

Maximum

Minimum

Standard dev.


Cleaning circuit (locked cycle) 99.2


Cu recovery [%] Cu grade [%] Mo recovery [%] Mo grade [%]Test Sample



9

Table 13-19: Copper and Molybdenum Recovery, regrind at 25 microns – three cleaner stages (source: SGS Minerals Services, 2009)

Open-circuit cleaner tests were carried out on the five samples delivered to SGS in October 2008. These were completed at a regrin

size with a P80 of 35 microns and three stages of cleaner. The results of these tests are shown in Table 13-20:

Rougher 1st

cleaner

2nd

cleaner

3rd

cleaner

Rougher 1st

cleaner

2nd

cleaner

3rd

cleaner

Rougher 1st

cleaner

2nd

cleaner

3rd

cleaner

Rougher 1st

cleaner

2nd

cleaner

3rd

cleaner13 32825 97.4 93.2 81.1 69.2 4.7 16.6 27.1 31.6 90.8 89.9 78.2 67.4 0.09 0.30 0.47 0.54

14 32826 97.9 93.2 92.8 69.3 3.7 14.1 18.2 22.2 95.9 94.2 91.1 69.8 0.2 0.7 0.9 1.1

15 32827 95.7 91.3 89.8 82.6 9.9 27.0 32.8 34.5 92.5 88.7 85.1 81.2 0.2 0.5 0.6 0.6

16 32830 91.1 87.9 79.2 66.5 5.2 19.9 23.6 25.2 88.8 87.8 76.5 67.3 0.1 0.3 0.3 0.4

95.5 91.4 85.7 71.9 5.9 19.4 25.4 28.4 92.0 90.2 82.7 71.4 0.14 0.45 0.58 0.66

97.9 93.2 92.8 82.6 9.9 27.0 32.8 34.5 95.9 94.2 91.1 81.2 0.19 0.72 0.92 1.13

91.1 87.9 79.2 66.5 3.7 14.1 18.2 22.2 88.8 87.8 76.5 67.3 0.07 0.28 0.32 0.35

3.1 2.5 6.6 7.3 2.7 5.6 6.2 5.7 3.0 2.8 6.7 6.6 0.06 0.21 0.25 0.33



Minimum

Standard dev.

Average

Maximum

Cu recovery [%]

Regrind of 25 microns

Mo recovery [%] Mo grade [%]

Regrind of 25 microns

Cu grade [%]Test Sample



98

Table 13-20: Copper and Molybdenum Recovery, regrind at 35 microns – three cleaner stages (source: SGS Minerals Services, 2009)

Rougher 1st

cleaner

2nd

cleaner

3rd

cleaner Rougher

1st

cleaner

2nd

cleaner

3rd

cleaner Rougher

1st

cleaner

2nd

cleaner

3rd

cleaner Rougher

1st

cleaner

2nd

cleaner

3rd

cleaner

17 43522 95.4 96.8 94.7 85.6 3.7 14.7 23.6 28.5 92.1 97.0 93.2 85.3 0.2 1.0 1.5 1.8

18 43523 95.0 95.3 95.7 84.4 7.7 26.5 31.0 33.6 91.1 94.2 95.0 83.9 0.13 0.44 0.51 0.55

19 43524 96.0 95.8 92.5 87.0 3.7 17.0 26.7 30.6 90.7 93.8 88.5 81.3 0.08 0.36 0.54 0.58

20 43525 97.0 94.6 75.4 57.0 5.7 17.0 26.1 30.3 91.7 92.4 68.6 51.5 0.15 0.44 0.61 0.64

95.6 95.1 86.5 73.7 5.7 20.9 28.7 32.2 91.8 94.1 83.0 71.4 0.15 0.57 0.79 0.88

97.0 96.8 95.7 87.0 7.7 29.2 36.1 37.8 93.5 97.0 95.0 85.3 0.24 0.96 1.52 1.83

94.5 93.3 74.0 54.4 3.7 14.7 23.6 28.5 90.7 92.4 68.6 51.5 0.08 0.36 0.51 0.55

0.9 1.3 10.8 16.5 2.0 6.5 4.9 3.6 1.1 1.8 12.8 16.8 0.06 0.25 0.42 0.54



Minimum

Standard dev.

Average

Maximum

Mo grade [%]Test Sample


Cu recovery [%] Cu grade [%] Mo recovery [%]



99

13.3 Leach Test Work

The database of leach tests completed included the following programmes:

1999 Test work (Lakefield Research Chile S.A., 1999b)



▫ Acid leach tests

▫ Ferric leach tests

▫ Bacterial-assisted leach tests

1999-2000 Test work (Lakefield Research Chile S.A., 2000)



▫ Column leach test

2001 Test work (Little Bear Laboratories, Golden, Colorado, 2001)


▫ Column leach test

13.3.1 1999 Test Work

The first leach tests were carried out at Lakefield Research in Santiago in 1999. (Lakefield

Research Chile S.A., 1999b)

Approximately 515 diamond drill core rejects were received and 29 composite samples were

prepared considering different rock type, elevation and grade.

Chemical characterization of each composite and mineral characterization of selected

composites was completed prior to the leaching tests.

Three different types of agitation leach tests were carried out, as follows:





101

Table 13-21: Chemical Analysis Results (source: Lakefield Research Chile S.A., 1999b)

(*) Total sample analysis

CuT FeT CuT FeT Cu(AS) Cu(CN)

1 0.33 6.34 0.26 5.85 0.03 0.13

2 0.74 2.37 0.51 2.24 0.02 0.23

3 0.55 3.24 0.48 3.33 0.09 0.26

4 0.34 4.81 0.27 4.39 0.03 0.15

5 0.57 2.65 0.39 2.52 0.03 0.16

6 0.45 5.74 0.35 5.16 0.04 0.14

7 0.36 2.31 0.26 2.32 0.02 0.1

8 0.66 4.79 0.57 4.5 0.06 0.28

9 0.87 6.09 0.62 5.78 0.05 0.30

10 0.59 2.8 0.46 2.6 0.05 0.21

11 1.14 5.4 0.69 4.98 0.07 0.38

12 0.54 4.43 0.53 4.67 0.04 0.28

13 0.49 2.31 0.38 2.44 0.01 0.12

14 0.54 3.28 0.35 3.15 0.03 0.14

15 0.88 5.09 0.65 5.02 0.04 0.32

16 0.58 2.43 0.45 2.38 0.01 0.16

17 0.75 3.51 0.52 3.47 0.03 0.21

18 0.7 4.43 0.66 5.03 0.03 0.1519 0.38 1.81 0.27 2.14 0.01 0.08

20 0.42 3.52 0.34 3.76 0.01 0.07

21 1.37 4.65 1.25 4.35 0.03 0.94

22 0.48 1.82 0.33 1.82 0.01 0.08

23 0.5 3.34 0.34 3.18 0.01 0.06

24 0.45 4.56 0.35 4.39 0.01 0.04

25 0.37 2.14 0.28 2.33 0.01 0.04

26 0.44 3.1 0.35 2.95 <0.01 0.03

27 0.43 4.1 0.29 3.71 <0.01 0.03

28 0.31 1.89 0.21 2.14 0.01 0.02

29 0.4 2.85 0.29 3.05 <0.01 0.03

Average 0.57 3.65 0.44 3.57 0.03 0.18

Maximum 1.37 6.34 1.25 5.85 0.09 0.94

Minimum 0.31 1.81 0.21 1.82 < 0.01 0.02

Standard dev. 0.24 1.34 0.21 1.21 0.02 0.18

Sequential assay [%]

Size fraction -20 +100 mesh [%]

Head grade [%]Composite Head grade [%]

Composite (*)



102

Table 13-22 showed that the mineralogy of the samples varied as follows:

Chalcopyrite : 46.1 - 99.0 %

Chalcocite : 0.9 - 33.3 %

Covellite : 1.1 - 26.9 %

Bornite : 0.1 - 8.8 %

Grey Copper(*) : 0.5 - 8.1 %

The mineralogy indicated that the samples generally contained high sulphur mineral content,

with only small amounts of oxide minerals present.

(*) Grey Copper is a mineralogical species classification, consisting of copper sulphides in

combination with antimony or arsenic. In this case, specific species are Tennantite and

Tetrahedrite.





104

Leaching test

Acid leach tests

15 grams of -20 to +100 Mesh composite sample were agitated with 150 ml of a 50 g/l

sulphuric acid leach solution for 15 days.

The objective of this test was to dissolve the copper oxide species. Some secondary

sulphide copper minerals could also be oxidized due to oxygen dissolution from air or ferric

dissolution from the ore sample.

Ferric leach tests

15 grams of -20 to +100 Mesh composite sample were agitated with 150 ml of a 50 g/l

sulphuric acid and 10 g/l Fe3+ as Fe2(SO4)3 leach solution for 45 - 76 days.

The objective of this test was to dissolve the copper oxide species plus secondary

sulphide copper species.

Bacterial leach tests

15 grams of -20 to +100 mesh composite sample were agitated with 150 ml of a specially

prepared culture solution, typically employed for enhancing bacterial growth. The tests

were run for 60 - 70 days under a relatively constant temperature of 30°C. Initial ironconcentration was 1 g/l Fetot, as FeSO4. Inoculation was applied on day 3, and the pH

was kept constant at 1.8

The objective of this test was to dissolve the copper oxide species plus secondary sulphide

copper species, under bacterial leach conditions.

The results of all these tests are presented in Table 13-23.



105

Table 13-23: Agitation Leach Test Results on 29 Composites Samples (source: Lakefield Research Chile S.A., 1999b)

CuT Cu(AS) Cu(sulph) Acid Ferric Bacterial

1 0.26 0.03 0.23 40.0 49.7 55.3

2 0.51 0.02 0.49 33.4 45.4 49.5

3 0.48 0.09 0.39 62.0 70.6 76.1

4 0.27 0.03 0.24 46.3 60.9 59.7

5 0.39 0.03 0.36 27.3 43.6 44.7

6 0.35 0.04 0.31 36.8 46.5 42.9

7 0.26 0.02 0.24 27.2 40.6 41.5

8 0.57 0.06 0.51 43.4 55.6 58.3

9 0.62 0.05 0.57 41.1 53.6 57.5

10 0.46 0.05 0.41 36.8 48.3 57.0

11 0.69 0.07 0.62 39.9 55.5 53.8

12 0.53 0.04 0.49 47.9 48.3 57.8

13 0.38 0.01 0.37 24.0 50.3 31.1

14 0.35 0.03 0.32 34.8 56.1 47.6

15 0.65 0.04 0.61 44.5 56.3 56.8

16 0.45 0.01 0.44 30.2 35.8 37.5

17 0.52 0.03 0.49 37.0 43.7 46.5

18 0.66 0.03 0.63 17.7 24.4 28.2

19 0.27 0.01 0.28 19.0 27.1 30.120 0.34 0.01 0.33 10.4 19.1 21.7

21 1.25 0.03 1.22 24.3 35.5 35.9

22 0.33 0.01 0.32 13.6 23.8 22.3

23 0.34 0.01 0.33 7.7 19.3 16.3

24 0.35 0.01 0.34 6.5 9.6 14.9

25 0.28 0.01 0.27 7.1 13.5 11.6

26 0.35 <0.01 0.34 2.3 6.5 8.9

27 0.29 <0.01 0.29 1.7 4.3 6.1

28 0.21 0.01 0.2 2.3 6.6 6.6

29 0.29 <0.01 0.28 1.2 3.2 6.0

Average 0.44 0.03 0.41 26.4 36.3 37.3

Maximum 1.25 0.09 1.22 62.0 70.6 76.1

Minimum 0.21 0.01 0.20 1.2 3.2 6.0

Standard dev. 0.21 0.02 0.20 16.77 19.53 19.85

CompositeCopper recovery [%]Head grade [%]





107

were low grade containing approximately 0.4 % CuT, mainly present as chalcopyrite.

Preliminary acid consumption tests were carried out to determine the amount of acid to add to

agglomeration.

Five, 2 m high by 0.10 m diameter columns were charged and leached in April 1999 using an

open circuit with an irrigation rate of 6 l/h/m2. The columns were continuously inoculated with a

mixture of typical ferro-oxidising bacteria for about 180 days. After this period, air injection and

recycling of solutions and a solvent extraction (SX) operation on a weekly basis was used. The

overall leach period was 310 days.

The characterization of samples and results of the tests are shown in Table 13-24.

Table 13-24: Leach Test Summary (source: Lakefield Research, 2000)

(*)Based on head-tailings copper balance.

Better recoveries were obtained with samples with higher proportions of chalcocite.

SGS reached the conclusion that the chalcopyrite samples from Vizcachitas are not amenable to

conventional heap leach process using bacterially-assisted ferric leaching. They also

commented that secondary-enriched mineralization could be treated by this process, but further

work needed to be undertaken to improve copper dissolution kinetics and final copper extraction.

Column identification Unit Columm

1

Columm

2

Columm

3

Columm

4

Columm

5 Average Maximum Minimum

Head grade

CuT % 0.588 0.798 0.795 0.431 0.404 0.603 0.798 0.404

CuT (seq) % 0.613 0.786 0.796 0.425 0.406 0.605 0.796 0.406

Cu (AS) % 0.103 0.035 0.078 0.040 0.100 0.071 0.103 0.035

Cu (CN) % 0.259 0.353 0.205 0.056 0.066 0.188 0.353 0.056

Cu(rec) % 0.347 0.394 0.283 0.097 0.165 0.257 0.394 0.097

Mineralogy

Chalcopyrite % 52.4 58.8 80.0 99.7 82.8 74.7 99.7 52.4Chalcocite % 30.5 20.3 14.9 0.2 12.6 15.7 30.5 0.2

Bornite % 0.01 0.00 1.50 0.01 1.49 0.60 1.50 0.00

Covellite % 17.2 19.5 3.6 0.0 1.4 8.3 19.5 0.0

Column leach test results

Cu recovery (*) % 42.5 34.9 17.3 4.0 8.4 21.42 42.5 4.0

Total acid consumptions kg/t ore 74.8 40.8 69.9 61.7 51.2 59.68 74.8 40.8

Net ac id consumptions kg/kg Cu 30.6 13.9 55.6 2,021.50 259.6 476.24 2,021.50 13.9



108

13.4 2001 Test Work

The third set of leach tests was carried out at Little Bear Laboratories, Golden, Colorado, U.S.A.

(Little Bear Laboratories, Golden, Colorado, 2001). This was completed in 1999 – 2000 using

samples received from Lakefield Research in Santiago.

All the samples were blended into a single sample, with a head grade of 0.421 % Cu occurring

almost totally (97 %) as chalcopyrite. The purpose of this test was to determine if thermophilic

microorganisms and/or control of redox potential improved the rate and total extraction of copperfrom the mineral.

Small 3 kg samples were agglomerated with dilute sulphuric acid and loaded into 5 columns, 4”in diameter and 24” tall.

The columns to be operated at 50 °C and 65 °C were wrapped with heat tape; temperature was

controlled with a temperature probe and thermistor.

The columns to be operated at 35 °C were placed inside a temperature-controlled cabinet.

The initial leach solution composed of 400 ml of a modified medium (at pH 1.6 with sulphuricacid) containing 4.0 g/l of Fe2+(ferrous sulphate) plus 100 ml of a starter culture, composed of

mixed cultures of iron and sulphur oxidizing mesophilic, moderately thermophilic and extremely

thermophilic organisms.

The results of these tests are presented in Table 13-25.



109

Table 13-25: Bacterial Leach Test Results (source: Little Bear Laboratories, Inc., 2001)

13.5 Conclusions

It seems unlikely that heap leaching of Vizcachitas sulphide mineralisation will be a good

process route. The milling-flotation route for the sulphide material is a much better route,based on recoveries and economics

A review of the mineralogical analysis of the samples submitted for the leach testing and a

review of the location from where these samples were collected indicate that even the

samples collected near to surface have a high percentage of chalcopyrite. Of all the leach

samples the lowest percentage chalcopyrite is 46 % in Composite 3, See Table 13-22 for

further detail.

The mineralogical analysis indicates that there is not enough soluble copper in the domain

that was identified in 2008 as Oxide and should be renamed a Mixed mineralization zone.

These findings were confirmed as part of the current personal inspection by the Qualified

Persons.

Mineralogical analysis shows that the principal copper mineral was chalcopyrite.

ColumnOperating

temperature [°C]

Innoculation

withAeration

Days of

operation

Copperextraction

[%]

1 65

range 64 - 70

Moderate +

extreme thermophiles Yes 215 52

2 50

range 49 - 53

Moderate +

extreme thermophiles Yes 215 38

3 35

range 34 - 36 Mesophiles Argon 172 26

4 35, then to 65

after 172 days

Mesophiles, then

thermophiles at 172 d Yes 256 39

5 35

range 34 - 36 Mesophiles No 172 14







112

14 MINERAL RESOURCE ESTIMATE

Los Andes Copper published a NI 43-101 compliant resource estimate in August 2008. This

section provides an updated mineral resource and also discusses the significant differences

between the historical resource and current resource estimate.

The resource estimate forms part of the Preliminary Economic Assessment on the Vizcachitas

Property which meets the requirements of a NI 43-101 Technical Report. Los Andes Copper has

requested that Coffey prepare an updated resource estimate and a report for the development of

a project that contemplates the exploitation and processing of the Vizcachitas Deposit that

satisfies the standards of a PEA report.

The Scope of work included:

Review and validation of geological database

Verification of geological 3-D Model

Exploration Data Analysis (Statistics, Compositing, Capping, Variography)

Grade Estimation and Validation

Categorization of Resources

14.1 Geological 3-D Model, and Domains

The lithology and mineral zone models have been interpreted from drill information through a

series of vertical cross sections oriented at an azimuth of 110 degrees and spaced at 100 m

intervals throughout the Property. This interpretation has been linked to a series of three-

dimensional wireframe solids.

The copper and molybdenum mineralization in the Vizcachitas deposit is interpreted to be the

result of a series of porphyry intrusions into an andesitic host rock. An initial diorite intrusion

covers a relatively large area of the deposit but appears to be responsible for very little of thecontained mineralization in the deposit. A second granodioritic intrusive phase occurs in a

relatively small area over the south-eastern part of the deposit. The most recent tonalitic phase

covers a large area of the deposit area and appears to be the main source of the copper and

molybdenum mineralization present in the deposit.









116

Figure 14-2: Mineral Zone view in Minesight® Software-Plan 1930. (Codes according to Table 14-2, Coffey, June, 2013)



117

14.1.1 Available Data

The Vizcachitas deposit has been drilled by Placer Dome, GMC and Los Andes Copper since1993. A total of 146 drill holes and 40,383.45 metres drilled. The Vizcachitas 3-D Model limits

are summarized in Table 14-3. Drill hole spacing over the deposit is between 80 to 100 m.

Table 14-3: Vizcachitas 3-D Model limits.

The drill results were used to prepare a 3-D geological interpretation and estimation of mineral

resources.

The standard procedure for drill core data recording is that the drill core is logged for lithology,

alteration, mineralization and structure with description of alteration minerals, ore minerals,

intensity, veinlets, faults, joints and contacts. Most of sample intervals were between 1 and 2 m.

14.1.2 Geological 3-D Model Verification

The 3-D geological model was checked to complete a validation/control which consisted of

encoding drill hole intervals with the solids and encoding the blocks. The block validation wasacceptable but approximately 40 uncoded intervals were recorded due to uncertainties at the

junction between solids. These intervals were coded manually. No significant discrepancies

existed between the geological 3-D model and the database and block models. Coffey believes

the verification to be accurate and suitable for mineral resource estimation.

14.2 Mineral Resource Estimate

14.2.1 Method for Estimate and Tools

The Vizcachitas Mineral Resource estimate was completed using Minesight® 7.70-2 software.

The block model was constrained by the following: interpreted 3-D, solids, lithology and mineralzone. Copper and molybdenum were estimated for each block using Ordinary Kriging (OK).

14.2.2 Specific Gravity

Specific gravity (SG) was measured on 584 sampled assay intervals included in the resource

estimation. Coffey has summarised all the measured SG values that were used for resource

estimation and this summary is displayed in Table 14-4.

Minimum Maximum

East 364,600 367,900

North 6,412,100 6,415,000

Elevation 1,400 3,200



118

The average specific gravity values calculated by Robert Sim in the 2008 AMEC Technical

Report were used in the current resource estimate.

Table 14-4: Bulk Density by Domain (AMEC, 2008)

14.2.3 Assay Statistics

A total of 24,254 assay intervals from 146 drill holes, were selected to define the Vizcachitas

deposit Mineral Resource estimate. Samples were grouped according to their interpreted

lithology and mineral zone. Sample statistics of the assayed information are shown in Figure

14-3 and Figure 14-4 for copper. The exploration data analysis was conducted by creatingprobability and histogram plots of the data.

Domain Density (t/m3) Comments

Overburden 2.00 Based on 14 samples

LX/OX 2.54 All types of rocks included

Andesite 2.61 Rocks type restricted to Supergene and Primary domains

Dacite 2.49 Rocks type restricted to Supergene and Primary domains

Diorite 2.59 Rocks type restricted to Supergene and Primary domains

Granodiorite 2.59 Rocks type restricted to Supergene and Primary domains

Tonalite 2.56 Rocks type restricted to Supergene and Primary domains

Diorite Dykes 2.53 Rocks type restricted to Supergene and Primary domains





120

Figure 14-4: Boxplot of Raw Copper Assay Values by Mineral Zone





122

Figure 14-5: Histogram and Cumulative Plot of Length of Raw Data

Based on this analysis, assay samples were composited into 2 metre down hole lengths by

lithology. The start of the composite is the collar of the drill hole. Intervals with missing assays

were ignored. Values below assay detection limits were set to half of that detection limit.

Geological coding was assigned based on the location of the composite centroid relative to the

geological 3-D model.

14.2.5 Exploratory Data Analysis

An exploratory statistical analysis of 2 metre composite sample data was completed to

characterize the domains used for grade interpolation (boxplot, histograms, cumulativefrequency plots and contact). The purpose of this data analysis was to determine if it was

necessary to modify the domains previously used.

In general, Exploratory Data Analysis (EDA) is completed on composite-sized volumes that are

nominally of equal length. The variance of a distribution is inversely proportional to the volume of

the sample used and use of unequal length composites can distort the frequency distributions

and make variography very noisy.

The domains were created through a combination of the lithology model and mineral zones

model. Table 14-5 presents all domains evaluated.

Table 14-5: Domains used in Resource Estimate

The domains used are as follows:

1. Overburden Domain

2. Mixed Domain

Mixed Supergene Hypogene

Overburden

Andesite

Diorite

Granodiorite 5

Tonalite 6

Dio Dikes

Dac Dikes

L i t h o l o g y

1

2 3

4

7



123

3. Supergene Domain

4. Andesite and Diorite Hypogene Domain

5. Granodiorite Hypogene Domain

6. Tonalite Hypogene Domain

7. Diorite and Dacite Dikes Hypogene Domain

Histograms

Figure 14-6 and Figure 14-7 illustrate the histograms and cumulative frequency plots for

uncapped 2 metre composite data from all data used for copper and molybdenum. The boxaccompanying the histogram contains basic statistics, with the following abbreviations being

used:

N = number of samples

m = mean

σ2 = variance

σ/m = coefficient of variation

min = minimum

q0.25 = 25th percentile = 1st quartile

q0.50 = 50th percentile = median

q0.75 = 75th percentile = 3rd quartile

max = maximum

Below the histogram is a log-probability plot. The cumulative frequency is plotted on the x-axis

and the grade is plotted on the y-axis. If the points form a straight line, the distribution is

lognormal (logarithms of the data give a normal distribution). The slope of the line is proportional

to the coefficient of variation.



124

Figure 14-6: Uncapped 2 m Composited Copper (ppm) All Data Statistics







12



12

Figure 14-8: Boxplot of Composited Copper Data by Lithology



12

Figure 14-9: Boxplot of Composited Molybdenum Data by Lithology



13

Figure 14-10: Boxplot of Composited Copper Data by Mineral Zone



13

Figure 14-11: Boxplot of Composited Molybdenum Data by Mineral Zone



13

Figure 14-12: Boxplot of Composited Copper Data by Domain

Figure 14-13: Boxplot of Composited Molybdenum Data by Domain



133

Contact Plot Analysis

A contact plot is a type of comparison diagram where the element behaviour close to

contact/boundary between different domains can be illustrated. The behaviour type can be Soft

Boundaries (no contact), Hard Boundaries (strong difference in the contact) and Firm

Boundaries (gradual changes in the contact). The type of contact between domains is shown in

Table 14-6.

Table 14-6: Type of Contacts between Domains

All Contact Plots by domains for each element were carried out. The contact plot examples are

shown in Figure 14-14 to Figure 14-17.

Domain 1 2 3 4 5 6 7

1

2 Hard

3 Hard Soft

4 Hard Hard Hard

5 Hard Hard Hard Soft

6 Hard Hard Hard Hard Hard

7 Hard Hard Hard Hard Hard Hard

Number

1

2

3

4

5

6

7

Granodiorite Hypogene Domain

Tonalite Hypogene Domain

Diorite and Dacite Dikes Hypogene Domain

Domain Name

Overburden Domain

Mixed Domain

Supergene Domain

Andesite and diorite Hypogene Domain





135

Figure 14-14: Contact Plot of Copper in Mixed and Supergene Domains



136

Figure 14-15: Contact Plot of Copper in Andesite and Diorite Domains



137

Figure 14-16: Contact Plot of Copper in Andesite and Diorite Dyke Domains



138

Figure 14-17: Contact Plot of Molybdenum in Mixed and Supergene Domains

14.2.6 High Grade Capping

A review of all assay values for each domain for the resource estimation included the

preparation of histograms and cumulative probability charts. The decision to cap grades during

estimation was based principally on the interpretation of cumulative frequency plots (CFP) as

high grade outliers can lead to overestimation of a resource. Table 14-7 and Table 14-8 show

the different capped values for each element and domain.

Table 14-7: Capped Value for Copper by Domain.

Table 14-8: Capped Value for Molybdenum by Domain.

14.2.7 Spatial Analysis - Variography

Variograms/Correlograms were calculated on capped composited data using Sage 2001©

software. The estimation results are very sensitive to the variogram parameters, particularly the

range and nugget effect. Care was taken to model the short-range structures and accurately fit

the nugget effect. The search rotation (Minesight®/Meds Rotation – axis Z Left, axis X right and

axis Y Left) conforms to the interpreted mineralization trends in each domain. Figure 14-18

illustrates an example of the fitted variogram in the 3 principal axes or ranges.

Domain CodeCum. Plot

(ppm)

Hist. Plot

(ppm)

Capping

(ppm)

N° of Capped

Samples

Overburden 1 5,000 5,000 5,000 1Mixed 2 20,000 15,000 20,000 3

Supergene 3 20,000 20,000 20,000 3

Andesite_diorite 4 15,000 15,000 15,000 2

Granodiorite 5 10,000 10,000 10,000 2

Tonalite 6 10,000 10,000 10,000 4

Dykes 7 10,000 10,000 10,000 2

Domain CodeCum. Plot

(ppm)

Hist. Plot

(ppm)

Capping

(ppm)

N° of Capped

Samples

Overburden 1 500 400 400 3

Mixed 2 1,000 1,000 1,000 1

Supergene 3 1,800 1,800 1,800 4

Andesite_diorite 4 2,500 2,500 2,500 3

Granodiorite 5 1,000 1,000 1,000 2

Tonalite 6 1,500 1,500 1,500 2

Dykes 7 2,000 2,000 2,000 2



139



140

Figure 14-18: Copper Variogram/Correlogram in And_dio Estimation Domain (X, Y, Z axis)

Table 14-9 and Table 14-10 show the different Variography Parameters for each element and

domain.

Table 14-9: Variography Parameters for Copper by Domain.

Mixed Supergene And_dio Granodio Tonalite Dykes

Nugget 0.12 0.1 0.1 0.14 0.1 0.15

C1 0.25 0.4 0.47 0.86 0.9 0.85

Var type 1 SPH SPH SPH SPH SPH SPH

Range1 Y 50 100 60 180 360 60

Range1 X 20 100 100 350 120 120

Range1 Z 35 25 250 40 180 350

Rot1 Z-L -22 40 40 7 -2 -9

Rot1 X-R -2 81 -10 37 -23 19

Rot1 Y-L 91 -31 -17 39 -7 -47


C2 0.63 0.5 0.43 0 0 0

Range2 Y 500 200 350 180 360 60

Range2 X 100 500 800 350 120 120

Range2 Z 70 100 500 40 180 350

Rot2 Z-L -22 40 40 7 -2 -9

Rot2 X-R -2 81 -10 37 -23 19

Rot2 Y-L 91 -31 -17 39 -7 -47



141

Table 14-10: Variography Parameters for Molybdenum by Domain.

14.2.8 Resource Block Model

The resource block model was created using Minesight® software v.7.70-2 with an origin atUTM WGS 84 coordinates of 364,600 m east, 6,412,100 m north, and 1,400 m elevation above

sea level. Block dimensions of 20 m by 20 m by 10 m were selected based on average width of

the resource and consideration of the smallest mining unit. Block model geometry and

parameters are provided in Table 14-11.

Table 14-11: Block Model Limits and Size

Drill hole spacing in the Property is approximately 80 – 100 m between collars.

14.2.9 Interpolation Plan

The Vizcachitas resource estimation model interpolation was completed using Ordinary Kriging

(OK) and Nearest Neighbor (NN) estimation methods for validation. The OK and NN estimations


Nugget 0.3 0.35 0.45 0.4 0.4 0.33

C1 0.7 0.68 0.22 0.6 0.6 0.67


Range1 Y 150 80 25 65 400 60

Range1 X 400 150 20 200 90 100

Range1 Z 60 300 65 30 170 250

Rot1 Z-L -83 -19 -12 -38 -4 -56

Rot1 X-R 29 -33 16 -11 -25 -12

Rot1 Y-L 32 -7 -9 13 -41 5

Var type 2 SPH SPH SPH SPH SPH SPHC2 0 0 0.33 0 0 0

Range2 Y 150 80 350 65 400 60

Range2 X 400 150 150 200 90 100

Range2 Z 60 300 450 30 170 250

Rot2 Z-L -83 -19 -12 -38 -4 -56

Rot2 X-R 29 -33 16 -11 -25 -12

Rot2 Y-L 32 -7 -9 13 -41 5

Minumum MaximumBlock Size

(m)# Blocks

East 364,600 367,900 20 165

North 6,412,100 6,415,000 20 145Elevation 1,400 3,200 10 180



142

were completed in two iterations with the search parameters set by domain. The first iteration is

designed to estimate a block grade where there is a minimum of two and up to a maximum of

twenty five composites found with a limit of six composites per drill hole based on a 3D search

radius equal to 400 metres. The second iteration overwrites the first and is dependent on the

domains as shown on Table 14-12 and Table 14-13 where search parameters, minimum and

maximum composites, outliers and maximum outlier distance for each element are shown.

Table 14-12: Search Parameters for Copper by Domain

Table 14-13: Search Parameters for Molybdenum by Domain

14.2.10 Block Model Validation

The OK models were checked for global bias, local bias/swath plot, and contact plot for the level

of smoothing incorporated in the models, and changes of support. The maximum number of

samples used to krige a block was modified for wider spaced grids in order to minimize

smoothing.


Min Comp 3 3 3 3 3 2

Max Comp 30 25 25 25 25 25

Max by DH 8 7 7 7 6 7

Rot1 Z-L -22 40 40 7 -2 -9

Rot1 X-R -2 81 -10 37 -23 19

Rot1 Y-L 91 -31 -17 39 -7 -47

Range1 Y 400 200 300 180 320 120

Range1 X 200 350 700 300 220 160

Range1 Z 200 150 450 150 250 300

Outliers 1.5 1.5

Dist outlier 40 40


Min Comp 3 3 3 3 3 2

Max Comp 25 25 25 25 25 25

Max by DH 6 6 6 6 6 6

Rot1 Z-L -83 -19 -12 -38 -4 -56

Rot1 X-R 29 -33 16 -11 -25 -12

Rot1 Y-L 32 -7 -9 13 -41 5

Range1 Y 150 80 300 80 350 100

Range1 X 350 120 150 180 100 120

Range1 Z 80 250 350 50 150 200

Outliers 0.075 0.075 0.075

Dist outlier 40 40 40



143

These validation tools were applied using different sets of models, generated for sensitivity

analysis purposes. From these validation results one model was selected as the final valid

model for each individual domain.

The Vizcachitas resource estimation model was validated by the following methods:

Comparison of the global mean grades based on OK estimation against NN estimation.

Inspection of the OK block model grades in plan and section views in comparison to the

drill hole composite grades.

14.2.11 Global Bias Comparison

The models were checked for global bias by comparing a nearest neighbour model to the

models estimated by Kriging. A difference greater than 5 % is considered high. Table 14-14 and

Table 14-15 list global bias checks for all elements and domains. There are no signs of global

bias in any of the grid intervals investigated.

Table 14-14: Comparison between Kriged and Nearest Neighbour Copper Model Statistics

Table 14-15: Comparison between Kriged and Nearest Neighbour Molybdenum Model Statistics

Domain CodeSample

(N°)

OK Mean

(%)

NN Mean

(%)

(OK-NN)/OK

(%)

Overburden 1

Mixed 2 20,613 0.242 0.232 4.38%

Supergene 3 26,150 0.287 0.275 4.15% Andesite_diorite 4 712,900 0.142 0.136 3.75%

Granodiorite 5 14,171 0.294 0.283 3.71%

Tonalite 6 65,274 0.275 0.284 -3.20%

Dykes 7 4,251 0.141 0.134 4.98%

Domain CodeSample

(N°)

OK Mean

(%)

NN Mean

(%)

(OK-NN)/OK

(%)

Overburden 1Mixed 2 11,818 0.0072 0.0071 1.39%

Supergene 3 21,000 0.0066 0.0069 -4.55%

Andesite_diorite 4 138,784 0.0061 0.0058 4.92%

Granodiorite 5 7,810 0.009 0.0085 5.56%

Tonalite 6 38,061 0.0124 0.013 -4.84%

Dykes 7 1,948 0.0107 0.0112 -4.67%



144

14.2.12 Visual Comparison

A visual inspection of plans and sections confirmed that the block model conforms with the drillhole composites used in the estimation. A copper example screen-capture plot for mid bench

1930 is presented in Figure 14-19.

Figure 14-20 shows a section looking approximately E-W, and Figure 14-21shows a section

looking approximately N-S. These plots illustrate the spatial distribution of copper grades and the

good correlation between estimated block grades and composites used to estimate the blocks.

A molybdenum example screen-capture plot for mid bench 1930 is presented in Figure 14-22.

These plots illustrate the spatial distribution of molybdenum grades and the good correlation

between estimated block grades and composites used to estimate the blocks.



145

Figure 14-19: Mid Bench 1930 Screen-Capture Plot of Copper % (source: Coffey, June, 2013)



146

Figure 14-20: E-W Screen-Capture Plot (N-6413120) of Copper % (source: Coffey, June, 2013)



147

Figure 14-21: N-S Screen-Capture Plot (E-365960) of Copper % (source: Coffey, June, 2013)



148



149

Figure 14-22: Mid Bench 1930 Screen-Capture Plot of Molybdenum % (source: Coffey, June, 2013)

14.2.13 Mineral Resource Categorization

Mineral resources have been classified according to the CIM Definition Standards on Mineral

Resources and Mineral Reserves, as incorporated in the National Instrument NI 43-101.

Two criteria have been combined for mineral resource classification:

Reliability of grade and tonnage that a drill pattern or distance provides

Definition of the search distance to provide the reliability required, complementing the

criteria with the minimum number of drill holes within that distance

Tonnage and grade reliability can be defined as follows:

For indicated resources a production of one year volume size is considered targeting an

accuracy of ±10 - 15 % with 90 % confidence.

Geostatistical methodology provides a variety of tools to establish confidence levels for resource

estimates. The simplest of these methods involves evaluation of estimate variances for large

blocks (quarterly or annual production equivalent). This method provides an estimate of global

confidence or confidence over large areas and is not dependent on local data. Using this

method, 90 % confidence limits are calculated using ordinary Kriging Variances (σ2OK) and thecoefficient of variation of the composites (CV) (Davis, 1997). The following formulae illustrate the

calculation for measured and indicated resources:

CL (90 % confidence limits) = +- 1.645 x σ relative, Where σ relative = √σ2 relative (Annually or Quarterly Variance)

σ2 relative (Annually) = σ2

relative (monthly) / 12 (For Indicated Mineral Resources)

σ2relative (monthly) = σ2

OK (monthly) x CV2 (Ordinary Kriging Variance and Coefficients Variation)

In order to find the monthly ordinary Kriging variances Coffey used different drill hole spacing

and composited data variography in a monthly production block:

Monthly Production Block = 320 x 320 x 20 m = 2,048,000 m

3

x 2.4 t/m

3

(average density) =4,915,200 Tons.

Table 14-16, Table 14-17 and Table 14-18 show the comparison between different drill hole

spacing, monthly ordinary Kriging variances (OK Var) and annual confidence limits (CL

Annually).



150

Table 14-16: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits for Mixed

Domain

Table 14-17: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits for

Supergene Domain

Table 14-18: Comparison between different drill hole spacing, monthly Kriging variances and confidence limits for And_Dio

Domain

From the above results, Coffey has selected drill hole spacing of 200 metres x 200 metres to

meet the required reliability criteria accuracy within a range of 10-15 % at a 90 % confidence

limit.

Complementing the drill hole spacing distance defined, a second criterion was introduced for

resource class categorization:

Indicated Mineral Resources blocks (any domain) were defined by having a minimum of 2

drill holes at distances averaging less than 200 metres

Confidence

LimitResource

Annual Category

140 x 140 0.0473 0.8259 8.5% Indicated

160 x 160 0.0567 0.8259 9.3% Indicated

180 x 180 0.0639 0.8259 9.9% Indicated

200 x 200 0.0664 0.8259 10.1% Indicated

Drillhole Spacing OK Var CV Samples

Confidence

LimitResource

Annual Category

140 x 140 0.0569 0.7798 8.83% Indicated

160 x 160 0.0738 0.7798 10.06% Indicated

180 x 180 0.0869 0.7798 10.92% Indicated

200 x 200 0.0931 0.7798 11.30% Indicated


Confidence

LimitResource

Annual Category

140 x 140 0.0453 0.7375 7.45% Indicated

160 x 160 0.0616 0.7375 8.69% Indicated

180 x 180 0.0774 0.7375 9.74% Indicated

200 x 200 0.0884 0.7375 10.41% Indicated




151

Inferred Mineral Resources blocks were defined by having a minimum of 1 drill hole at

distances averaging less than 400 metres

The 400 metres maximum distance between drill hole collars is also in line with copper

variogram ranges for the main domains.

The location of the Inferred and Indicated Resources blocks for all domains show a reasonable

continuity of the classification as illustrated in Figure 14-23, Figure 14-24 and Figure 14-25.



152

Figure 14-23: Plan View at 1930 Elevation Showing the Distribution of Indicated (green) and Inferred (yellow) Mineral

Resource Blocks (source, Coffey, June, 2013)



153

Figure 14-24: E-W Section View (N-6413120) Showing the Distribution of Indicated (green) and Inferred (yellow) Mineral Resource Blocks (source: Coffey, June, 2013)



154

Figure 14-25: N-S Section View (E-365960) Showing the Distribution of Indicated (green)and Inferred (yellow) Mineral Resource Blocks (source: Coffey, June, 2013)



155

14.2.14 Mineral Resource

In order to ensure that the reported resource has reasonable prospects for economic extraction,

the resource estimated by ordinary Kriging method is limited within a pit shell generated about

copper equivalent grades in blocks classified in the indicated and inferred categories at a copper

price of 3.00 USD/lb. This test indicates that some of the deeper mineralization may not be

economic due to increased strip ratios resulting from local topographic configuration.

The pit shell was generated using Whittle™ with the following technical and economic

parameters:

Mine Cost: 2.25 USD/t

Process Cost: 6.94 USD/t

Copper Price: 3.00 USD/lb.

Molybdenum Price: 13.6 USD/lb.

Conc. Copper Sales Cost: 0.5537 USD/lb.

Conc. Molybdenum Sales Cost: 1.60 USD/lb.

Recovery Copper: 90 %

Recovery Molybdenum: 60 %

Slope Angles: 42° - 47° (Golder 1999)

The resultant delimitation of the resources is shown on plan and section views in Figure 14-26

and Figure 14-27.



156

Figure 14-26: Pit shell with Copper Grades for throughput 176 ktpd (Plan View Z=1950) source: Coffey, June, 2013



157

Figure 14-27: Pit shell with Copper Grades for throughput 176 ktpd (Cross Cut N=6.413.700) (source: Coffey, June, 2013)



158

Mineral resources are reported at 0.30 % copper equivalent cut-off under prevailing conditions.

At 0.3 % Cu Eq cut-off the Indicated Resources are 1,038 Mt @ 0.434 % Cu Eq, 0.373 % Cu

and 0.012 % Mo; and Inferred Resources are 318 Mt @ 0.405 % Cu Eq, 0.345 % Cu and 0.013

% Mo.

The Vizcachitas Mineral Resource using multiple Cu Eq cut-off grades is presented in Table

14-19.

Table 14-19: Mineral Resource for Cu Eq%(1)

(1) Copper equivalent grade (Cu Eq) has been calculated using the following expression:

Cu Eq (%) = CuT (%) + 4.95 x Mo (%), Using the metal prices: $ 2.75 / lb. Cu and 13.6 / lb. Mo.

A Tonnage - Grade Curve for Indicated and Inferred Resources is shown in Figure 14-28.

INDICATED


(Cu Eq %) Mt % % % Mlb Mlb0.20 1,317 0.396 0.341 0.011 9,913 318

0.25 1,191 0.414 0.356 0.012 9,353 305

0.30 1,038 0.434 0.373 0.012 8,539 281

0.35 824 0.462 0.396 0.013 7,201 240

0.40 566 0.501 0.431 0.014 5,374 179

0.45 368 0.543 0.467 0.015 3,788 125

0.50 244 0.588 0.509 0.016 2,515 79

INFERRED



0.20 521 0.343 0.296 0.010 3,407 111

0.25 404 0.376 0.322 0.011 2,873 101

0.30 318 0.405 0.345 0.013 2,415 88

0.35 212 0.443 0.372 0.015 1,734 70

0.40 130 0.488 0.402 0.018 1,152 51

0.45 76 0.533 0.428 0.022 714 36

0.50 40 0.584 0.466 0.024 415 22



159

Figure 14-28: Tonnage-Cu Eq Grade Curves

0.20 0.25 0.30 0.35 0.40 0.45 0.50

Cu Eq 0.396 0.414 0.434 0.462 0.501 0.543 0.588

Tonnage 1,317 1,191 1,038 824 566 368 224

0

200

400

600

800

1,000

1,200

1,400

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

T o n n a g e ( M t )

C u E q ( % )

Tonnage (Mt)- Cu Eq Grade Curve(%)

Indicated Resources Ratio=4.95

0.20 0.25 0.30 0.35 0.40 0.45 0.50

Cu Eq 0.396 0.414 0.434 0.462 0.501 0.543 0.588

Tonnage 521 404 318 212 130 76 40

0

100

200

300

400

500

600

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

T o n n a g e ( M t )

C u E q ( % )

Tonnage (Mt)- Cu Eq Grade Curve(%)

Inferred Resources Ratio=4.95



160

14.2.15 Comparison with Previous Resource Estimate

The most recent resource estimate prior to this one is detailed in the Technical Report titled“Mineral Resource of the Vizcachitas Project, National Instrument 43-101 Technical Report,

Effective Date June 9, 2008” (AMEC, 2008).

Due to changes in the calculation of the copper equivalent and the confining pit, it is not possible

to make a direct comparison between the two resources but it is useful to review the differences

in grade, tonnage and classification. This is presented in Table 14-20.

Table 14-20: Comparison between AMEC 2008 and Coffey 2013 Resource

(1) The AMEC 2008 resource Cu Eq % = Cu % + (Mo % * 6.67). The Coffey 2013 resource Cu Eq % =Cu % + (Mo % * 4.95). (2) The AMEC 2008 resource was confined within pit generated with Cu Eq grades in blocks at a $US 2.0/lb. copper price. The

Coffey resource was confined within a pit generated using multiple parameters as defined in Chapter 14.2.12.

The 2008 resource estimate was calculated using a total of 130 drill holes with a total length of

35,255 metres. The Coffey 2013 resource estimate included a further 16 drill holes and 5,128

metres drilling bringing the total number of completed drill holes to 146 with a total length 40,383

metres. This extra drilling is mainly in the south quadrant of the deposit extending the mineral

resource to the south. There was additional deep drilling in the center of the deposit which also

extended the resource at depth. Figure 14-29 illustrates this additional drilling. The additional

drilling has extended the resource to the south and has converted further Inferred Resources toIndicated category.

Report

Cut-off

CuEq % (1)

Tonnage

(Mt) (2)

Cu Grade

(%)

Mo Grade

(%)

CuEq

Grade (%)Cu (Mlb) Mo (Mlb)

Tonnage

(Mt)

Cu Grade

(%)

Mo Grade

(%)

CuEq

Grade (%)Cu (Mlb) Mo (Mlb)

Indicated

0,20 597 0,36 0,010 0,43 4.738 132 1.317 0,34 0,011 0,40 9.913 318

0,25 563 0,37 0,011 0,44 4.592 137 1.191 0,36 0,012 0,41 9.353 305

0,30 515 0,39 0,011 0,46 4.428 125 1.038 0,37 0,012 0,43 8.539 281

0,35 442 0,41 0,012 0,48 3.995 117 824 0,40 0,013 0,46 7.201 240

0,40 351 0,43 0,012 0,51 3.327 93 566 0,43 0,014 0,50 5.374 179

0,45 252 0,47 0,013 0,55 2.611 72 368 0,47 0,015 0,54 3.788 125

0,50 160 0,51 0,013 0,6 1.799 46 244 0,51 0,016 0,59 2.515 79

Inferred

0,20 798 0,3 0,010 0,36 5.278 176 521 0,30 0,010 0,34 3.407 111

0,25 685 0,32 0,011 0,39 4.833 166 404 0,32 0,011 0,38 2.873 101

0,30 572 0,34 0,012 0,41 4.288 151 318 0,35 0,013 0,41 2.415 88

0,35 420 0,36 0,013 0,44 3.333 120 212 0,37 0,015 0,44 1.734 70

0,40 280 0,39 0,013 0,48 2.407 80 130 0,40 0,018 0,49 1.152 51

0,45 176 0,43 0,014 0,52 1.668 54 76 0,43 0,022 0,53 714 36

0,50 92 0,46 0,016 0,57 933 32 40 0,47 0,024 0,58 415 22

AMEC 2008 Sulphide Resource Coffey 2013 Resource



161

Figure 14-29: Additional Drilling to the South of the Vizcachitas Deposit

The 2008 resource estimate divided the resource into sulphide and oxide zones. The

metallurgical review carried out as part of this Report indicates that the Oxide and Leached

domains contain significant copper sulphide minerals and have been reclassified as Mixed.

These mixed resources are now included within the main resource estimate as they will be

processed in the same flotation plant as the supergene and primary material. The AMEC 2008



162

resource estimate defined 38 Mt Indicated and 8 Mt Inferred resources at a cut-off of 0.3 % Cu

within the Oxide domain, this is illustrated in Table 14-21.

The calculation used for copper equivalent in the 2008 and 2013 resource estimate has changed

due to relative changes in copper and molybdenum prices. The AMEC 2008 resource used:

Cu Eq % = Cu % + (Mo % * 6.67). Metal prices: $ 1.50 /lb. Cu, $ 10.00 /lb. Mo.

The Coffey 2013 resource has used:

Cu Eq % =Cu % + (Mo % * 4.95). Metal prices: $ 2.75 /lb. Cu, $ 13.6 /lb. Mo.

The average molybdenum grade is 0.012 % Mo. This grade is equal to 0.080 Cu Eq % using a

ratio of 6.67 and 0.059 Cu Eq % using a ratio of 4.95.

The decrease in the Cu/Mo price ratio of 1:6.67 to 1:4.95 has the effect of:

Slightly reducing the tonnage as less blocks are above the copper equivalent cut-off

Slightly reducing the copper equivalent grade as the weighting of molybdenum is reduced

Slightly increasing the copper grade as blocks with a higher copper grade are included

above the copper equivalent cut-off

The Indicated and Inferred copper and molybdenum grades are similar between the two

resource estimates. The Indicated copper grade has reduced from 0.39 % to 0.37 % with a 0.3

% Cu Eq cut-off while the Inferred copper grades are the same. This is due to additional lower

copper grade tonnage in the area of the extra drilling to the south of the Property. The

molybdenum grades have increased slightly from 0.011 % to 0.012 % for the Indicated

Resources and from 0.012 % to 0.013 % for Inferred Resources. This is due to better

molybdenum grades in the intrusive rock in the southern part of the Property.

The geostatistical analysis as described in this chapter has shown that the continuity for the

copper and molybdenum composites is high and the variography indicates that the range for

each element is large. This is apparent when running estimation variance evaluations for largeblocks and indicates that the drill hole spacing that satisfies definition of annual production with a

relative accuracy of ± 10 % with 90 % confidence, i.e. for Indicated Resources, is 200 metres by

200 metres. This change in support results in the Indicated tonnage increasing from 515 Mt in

the 2008 estimate to 1067 Mt. As a percentage of the total tonnage the Indicated Resource

tonnage has increased from 47 % in 2008 to 76 % in 2013.



163

The AMEC 2008 estimate reported 515 Mt of Indicated Resources for a 0.30 % Cu Eq Cut-off

grade while Coffey indicates 1,081 Mt of the same category.

An analysis of the criteria used for each estimate indicates the following:

2008 Criteria

▫ Reliability for annual production set at ±15 % at 90 % confidence (90 ktpd

production) which resulted in 175 metres drill spacing

▫ Blocks estimated with a minimum of 3 drill holes within a maximum average distance

of 100 metres are classified as Indicated

▫ Blocks which do not meet the criteria for Indicated Resources but are within a

maximum distance of 200 metres from a drill hole are classified as Inferred

2013 Criteria

▫ Reliability for annual production set at ±10 – 15 % at 90 % confidence resulted in

200 metre drill collar spacing

▫ Indicated Mineral Resources blocks (any domain) defined by having a minimum 2

drill holes at distances averaging less than 200 metres

▫ Inferred Mineral Resources blocks will be defined by having a minimum of 1 drill hole

at distances averaging less than 400 metres

▫ The criteria used for categorization is the reason for the difference between the 2008

and 2013 resource classification

While both studies arrived at a similar distance based on the reliability approach, they differ

considerably in the second criteria; the 2008 resource estimate reduced the 175 metres drill

collar spacing derived to 100 metres with 3 drill holes within that distance while Coffey retained

the reliability based distance that defined the category adding the need to have 2 drill holes.

Common industry practice uses 3 drill holes to define a Measured Resource.

Regarding Inferred Resources; the 2008 resource estimate study restricted the drill hole spacing

distance to 200 metres, almost the same as that defined by the reliability approach to define

Indicated Resources.



164

Coffey opted to double the indicated reliability defined distance, in alignment with variogram

ranges, a minimum of 1 drill hole within the distance defined, this again is common industry

practice for Inferred Resource estimation.

Table 14-21: AMEC 2008 Oxide Resources

14.3 Conclusions

The data base and geological models were found to be in good order

The database (assay and geological data) has been validated and is of sufficient quality to

support this Mineral Resource estimate. The block model has been validated and is of

sufficient quality to support the Mineral Resource estimate

The Mineral Resource estimates are in line with good industry practice

Cut-off Cu

%

Tonnage

(Mt)

Cu Grade

(%)

Mo Grade

(%)Cu (Mlb) Mo (Mlb)

Indicated

0.10 69 0.33 0.009 502 14

0.15 63 0.35 0.010 486 14

0.20 55 0.38 0.010 461 12

0.25 47 0.4 0.010 414 100.30 38 0.44 0.010 369 8

0.35 29 0.47 0.010 300 6

0.40 21 0.51 0.010 236 5

Inferred

0.10 67 0.21 0.005 310 7

0.15 51 0.24 0.005 270 6

0.20 33 0.28 0.007 204 5

0.25 22 0.31 0.007 150 3

0.30 8 0.37 0.006 65 1

0.35 5 0.42 0.007 46 10.40 3 0.46 0.008 30 1



165

15 MINERAL RESERVES ESTIMATE

The Project has no mineral reserves; all mineralization is considered as resources.



166

16 MINING METHODS

Initial trade off studies discarded an underground option as no adequate high grade continuous

lenses were found in the deposit. Given the size, continuity of mineralization and copper grades,

outcroppings and near surface presentation, the Vizcachitas deposit is amenable to conventional

open pit mining methods.

The mine is scheduled to work 360 d/yr. Each day will consist of three 8-hour shifts. The mining

operations will include; drilling, blasting, loading and hauling of mineralised material and waste;

crushing, conveying and spreading of waste, grade control and equipment maintenance.

For this Report, a number of treatment capacities were tested to understand the value map of

the deposit for future definitions. The treatment capacities ranged broadly from 16ktpd to176ktpd, however, whilst all options were evaluated equally and all of those options considered

are noted in this section, only those options which provided the highest NPVs are presented in

the Report. A range of options were studied to determine whether the Project would support

lower throughput and lower initial capital investment.

Employing the block model described in Chapter 14, Whittle™ economic pit shells were

developed to determine the potentially economic pit limits for each treatment capacity.

For this PEA two options were studied, and within these options additional cases considering

different throughput capacities and growth possibilities were evaluated as follows:

Option 1: Studied in order to reach maximum throughput capacity. This option includes

five cases as follows:

▫ Case 1.1: Throughput of 32 ktpd.



▫

Case 1.4: Start with a throughput of 32 ktpd, and with a later expansion after 6 yearsof operation, reaches a final throughput of 88 ktpd.

▫ Case 1.5: Start with a throughput of 88 ktpd, and with a later expansion after 5 years

of operation, reaches a final throughput of 176 ktpd.

Option 2: Studied in order to start with minimum investment. This option includes three

cases which are as follows:



167



▫ Case 2.3: Start with a throughput of 16 ktpd, and with a later expansion after 6 years

of operation, reaches a final throughput of 76 ktpd.

Figure 16-1 and Figure 16-2 show pit shell for cases to 16 ktpd and 176 ktpd respectively.

Figure 16-1: Pit Outlines for each Option 16 ktpd (source: Coffey, June, 2013)



168

Figure 16-2: Pit Outline Option 176 ktpd (source: Coffey, June, 2013)

Optimized mine plans were then defined for each case presented above, considering a Whittle™

optimization base with the following practical aspects incorporated:

Up to 18 months of pre-production stripping work is considered to allow plant treatment in

the second year of activity. Full plant capacity to be reached from the 3rd year onwards

A maximum annual vertical advance rate of 15 benches per annum initially to liberate

mineral reducing to a maximum of 10 in the later periods of mine life

Maintaining a minimum of two active mining phases at all times. The initial Phase 1 isaimed at liberating one year of production. Thereafter the criteria is to mine a constant

volume of material to stabilize the mining fleet

Minimum phase width ranging from 60 metres to 120 metres, adequate to accommodate

the main mining equipment



169

To select the best possible mine plan, block value criteria was used rather than cut-off grades,

considering that each block has copper and molybdenum content. Block value was calculated

using both these metal contents and the mining, process and selling costs and process

recovery.

A description of the common design aspects of all options considered is presented in the

following sections and the individual results for each of the selected options are summarised by

a mine plan and capital and operating cost estimates.

16.1 Bench Height

Based on the resource block model size which defined 20 m x 20 m x 10 m blocks, the bench

height was fixed at 10 m for all options. This simplified the mining method at this stage of projectdevelopment. Seven sectors were identified as having distinct geotechnical characteristics

based on the study: “Site Technical Evaluation Report Vizcachitas Copper/Molybdenum Project”by Golder Associates in January 1999. These are illustrated in Figure 16-3.



170

Figure 16-3: Mine Sectors considered by Geotechnical Behaviour

Upper and lower sections take account of a fractured zone located between 0 to 260 m depth,below which stable massive rock is found. For the purpose of this Report the inter-ramp angle

and the berm width recommended by Golder were used. The bench face angle is the result of

the inter-ramp angle and the berm width. The parameters are shown in Table 16-1.

Table 16-1: Geometrical Parameters by Sector

16.2 Waste Dump Design Parameters

Waste dump design followed Chilean regulatory recommendations and standard practice. The

following characteristics guided the design:

Table 16-2: Geometrical Parameters for Waste Dumps

For most of the options one platform located to the north of the pit was sufficient to

accommodate the waste, however for the large tonnage options two sites were required. The

waste dumps selected are illustrated in Figure 16-4. In the case of the 176 ktpd schedule the

plan for dump fill is shown in Table 16-3.

Inter-ramp Bench face

angle (°) angle (°)

1 East 47 7 77

2 Lower North West 49 7 80

3 Upper North West 42 7 684 Lower South East 45 7 73

5 Upper South East 40 7 64

6 Lower South West 47 7 77

7 Upper South West 42 7 68

Sector LocationBerm width

(m)

Face Berm Overall

angle (°) width (m) angle (°)

37 200 100 29

Platform

height (m)



171

Figure 16-4: Location of Waste Dumps (source: Coffey June, 2013)



172

Table 16-3: Dump Plan (Schedule 176 ktpd)

16.3 Hydrology and Hydrogeology

No studies have been made at this stage. The pit sits in a “V” shape valley through which the

Rocin River flows. For this PEA a river diversion has been considered allowing for mining of the

pit and the location of waste dumps.

PeriodWaste

(Mt)

Acc. Waste

(Mt)

North Dump

(Mt)

South Dump

(Mt)

0 13.8 13.8 13.8

1 15.4 29.3 15.4

2 28.2 57.5 28.2

3 23.5 81 23.5

4 44.7 125.7 44.7

5 46.6 172.3 46.6

6 63.4 235.7 63.4

7 63.4 299 63.4

8 76.6 375.7 76.6

9 76.6 452.3 76.6

10 76.6 528.9 76.6

11 76.6 605.6 76.6

12 76.6 682.2 76.6

13 76.6 758.9 76.6

14 76.6 835.5 76.6

15 76.6 912.1 76.6

16 76.6 988.8 76.6

17 76.6 1,065.40 76.6

18 76.6 1,142.10 76.6

19 76.6 1,218.70 76.6

20 76.6 1,295.30 76.621 73.6 1,369.00 73.6

22 69.6 1,438.60 69.6

23 69.6 1,508.30 69.6

24 68.3 1,576.50 68.3

25 58.9 1,635.40 58.9

26 57.8 1,693.20 57.8

27 25.4 1,718.60 25.4

28 1.5 1,720.10 1.5

29 1.2 1,721.20 1.2

Total 1,721.20 1,721.20 988.8 732.5



173

A provision under item Other in the Operating Costs allows for water management in the pit and

dumps, among other activities.

16.4 Treatment Capacity

The options considered for the treatment plant are presented in Table 16-4.

Table 16-4: Plant capacity options

16.5 Optimum Pit Shells

In order to capture the best value from the resource, a Whittle™ pit optimization was run for all

options considered. The input data and source are presented in Table 16-5.

Table 16-5: Input Data for Pit Optimization

Capacity

Ktpd

1.2 88 Life of Mine (LoM)


1.5 88-176 Staged production increase


Case Observation

Variable Source / Comment

Price

Copper US$/lb 2.75

Molybdenum US$/lb 13.6

Selling Cost

Cu in conc. US$/lb 0.5537

Mo in conc. US$/lb 1.60

Mining Cost Benchmarking of sim ilar operations – owner’s fleet

Minimum US$/t mined 2.25 For 176 Ktpd

Maximum US$/t mined 3.42 For 16 Ktpd

Process Cost Benchmarking of similar operations

Minimum US$/t milled 6.94 For 176 Ktpd

Maximum US$/t milled 8.81 For 16 Ktpd

G & A Cos t US$/t m illed 0.00 Included in Mining and in Process cos t

Recovery Total Copper recovery testwork, ref. Chapter 13

Cu recovery % 90

Mo recovery % 75

Benchmarking

Current long term price



174

16.6 Mine Operations

The following sections describe key elements of the mining operations.

As a Base Case study an Owner Operated fleet has been considered. A first principal equipment

and cost model was used to determine equipment requirements, capital and operating costs and

direct (operators and maintenance personnel) and indirect manpower. Quotations or reference

costs were obtained for the equipment. Coffey database, suppliers and benchmarking key

consumptions were used in the estimates.

16.6.1 Drill and Blast

The “Site Technical Evaluation Report Vizcachitas Copper/Molybdenum Project” by Golder Associates in January 1999 classifies the rock mass situated from 0 to 260 m as poor and fair to

good below 260 m based on both Rock Quality Designation (RQD) and Rock Mass Rating

(RMR).

During the site visit, outcrops and overburden of the future pit and core inspections were

completed. The conclusions reached by these on-site inspections are in agreement with the

classification stated in the Golder report.

Considering this information, a powder factor of approximately 180 g/t has been used for this

Report. This value is in line with similar bulk operations in the Andes. The rock mass presents a

highly fractured matrix requiring sufficient explosive energy to generate movement to unlock thein situ pre-formed blocks. The same powder density was used for the overburden and waste in

the pit at this stage of its development. The blasting costs are a minor operational cost.

However, blast fragmentation studies should be completed to optimise this operation at a later

stage.

Rotary drill equipment has been considered for all the options. Drilling diameter ranges from

4 7/8” to 9 7/8” with equipment designed to serve each treatment capacity option. Controlled

blasting in the form of pre-splitting to provide for safe working conditions and to ensure slope

stability has been provided for.

Provisions for drilling and blasting have been made under Drilling and Blasting cost estimates in

the cost model. An example of design parameter used is shown in Table 16-6.



175

Table 16-6: Drilling and Blasting design parameters

An estimate for pre-splitting over 20 metre long holes (double benching) has been made to

maintain safer working conditions and to achieve or improve the slope angles in weaker rock

areas.

A provision of 5 % of blasting costs has been made for wet holes for mineral and waste. This

type of situation may occur in the winter season.

A provision of 2 % of blasting costs has been made for secondary blasting.

A service contract has been considered for the blasting operations, a common practice in

Chilean mining operations. A reference cost for such service was obtained and forms the basis

of the blasting costs estimates. The parameters for drilling operating conditions are shown in

Table 16-7.

Table 16-7: Drilling Operating Conditions

Item Unit Value

Bench height m 10

Burden m 6

Spacing m 7.5

Subdrill m 2

Blasthole length m 12

Stemming m 4

Explosive density - ANFO g/cm3 0.8

Material density t/m3 2.7

Blasthole diameter inches 7 7/8

Tonnes per blasthole t 1215

Explosive per blasthole kg 218.6

Powder factor g/t 180

Drilled metres per 1000 tonnes m/kt 9.9

Rotary Drilling Unit Value

Drill Unit Operating Conditions

Availability % 85

Utilization % 50

Operating Factor % 85



176

16.6.2 Load and Haul

Front-end loaders or hydraulic and rope shovels have been selected to manage loadingoperations for each option; matching trucks for each loader have also been selected.

Mining operations take place between 1,500 to approximately 3,000 masl. This is defined as low

to medium altitude for mining in the Andes. No equipment de-rating has been applied at this

stage.

The average precipitation is approximately 300 mm per year in the form of rain or snow falling

between the months of April and October. A provision for winter conditions has been made

under Support Equipment and Other in the Operating Costs estimates.

A loose density of 1.82 t/m3 was considered, taking into account a 30 % swell factor for both

waste and mineralised rock. Key operating variables for loading and transport equipment are

presented in Table 16-8.

Table 16-8: Loading & Transport Operating Parameters

Fuel consumption data was provided by equipment suppliers for medium altitude operations.

For the rope shovels a provision has been made for power supply in Mine Capital Estimates and

Mine Operating Costs.

16.6.3 Auxiliary Equipment

The support and ancillary equipment can be grouped broadly into two categories; the first is

equipment used to support mining operations and the second to service and maintain the miningequipment fleet.

The major tasks to be completed by the equipment required to support the mining operation

include the following:

Waste rock storage facility maintenance

Parameters Units Value

Availability % 85

Utilization % 85

Operation shift hr 8 * 3

Effective hours per shift hr / shift 8.7

Effective hours per year hr / yr 6,090



177

Bench and road maintenance

Ditch preparation and maintenance

Drill pattern preparation / hole stemming

Emergency stockpile loading and re-handling at primary crusher

General maintenance

Waste stripping and reclamation

The number of auxiliary equipment units is determined as a function of the number of units in the

main loading and hauling fleet, and the total rock movement in the pit. The relations applied are:

One track dozer for each 2.5 pieces of loading and waste dump equipment.

One wheel dozer for each piece of loading equipment

One motor grader for each 3 pieces of haulage equipment

One water truck for each 7 pieces of haulage equipment

Additional equipment has been considered to support opening and maintenance of roads during

winter.

Other light vehicles such as trucks for grade control, pickup trucks for supervision and control

are considered as leased. Sundry equipment such as survey instrumentation and mine control

and dispatch software is included in the capital estimate.

In addition, under Other Costs, 30 % of Direct Mine Opex has been allowed for to provide for

items such as renting of equipment for maintenance, provision of salt for icy conditions,

dewatering, mine power supply, lighting units, tools, tyre handling, computers, software

licensing, etc.

16.7 Manpower

In all of the cases evaluated, two areas will report to the Mine and Maintenance

Superintendents:

Mine Operations





179

Indirect Staff

The Operating and Maintenance Personnel are included in Direct Staff. Superintendents (Mine

and Maintenance), Supervisors, Mine Geologists, Surveyors, Technical and Administrative

Personnel are included in Indirect Staff.

16.8 Mining Plan Options

16.8.1 Case 1.2: 88 ktpd

i. Ultimate Pit 88 ktpd

Figure 16-5 shows the Ultimate Pit for 88 ktpd production.



180

Figure 16-5: Ultimate Pit: 88 ktpd (Coffey, June, 2013)

ii. Mine Production Schedule

Table 16-10 shows the production schedule for the case to Life of Mine of 88 ktpd. Up to 24

months pre-stripping is considered to permit plant operation in the third year of activity (Period

2). Full plant capacity will be reached from the 4th year (Period 3).



181

Table 16-10: Production Schedule: 88 ktpd

Yearly copper grade, mineral and waste production is shown in Figure 16-6.

Waste TotalKt % Cu % Mo Kt Kt

0 0 - - 0 0 -

1 0 - - 0 0 -

2 2,315 0.299 0.007 13,915 16,230 6.01

3 2,789 0.245 0.005 15,911 18,700 5.71

4 17,072 0.353 0.006 18,410 35,482 1.08

5 31,680 0.507 0.008 19,008 50,688 0.60

6 31,680 0.501 0.009 19,008 50,688 0.60

7 31,680 0.446 0.015 19,008 50,688 0.60

8 31,680 0.443 0.011 19,008 50,688 0.60

9 31,680 0.426 0.011 19,008 50,688 0.60

10 31,680 0.396 0.013 19,008 50,688 0.6011 31,680 0.39 0.011 22,176 53,856 0.70

12 31,680 0.349 0.008 22,176 53,856 0.70

13 31,680 0.332 0.007 22,176 53,856 0.70

14 31,680 0.331 0.009 22,176 53,856 0.70

15 31,680 0.329 0.012 22,176 53,856 0.70

16 31,680 0.329 0.012 22,176 53,856 0.70

17 31,680 0.329 0.012 26,928 58,608 0.85

18 31,680 0.325 0.014 26,928 58,608 0.85

19 31,680 0.323 0.015 28,512 60,192 0.90

20 31,680 0.339 0.006 28,512 60,192 0.90

21 31,680 0.327 0.007 28,512 60,192 0.90

22 31,680 0.357 0.007 28,512 60,192 0.9023 31,680 0.371 0.007 38,016 69,696 1.20

24 31,680 0.348 0.009 38,016 69,696 1.20

25 31,680 0.329 0.011 38,016 69,696 1.20

26 31,680 0.335 0.012 38,016 69,696 1.20

27 31,680 0.337 0.014 38,016 69,696 1.20

28 31,680 0.316 0.016 38,016 69,696 1.20

29 31,680 0.289 0.018 38,016 69,696 1.20

30 31,680 0.288 0.014 38,016 69,696 1.20

31 31,680 0.279 0.006 38,016 69,696 1.20

32 31,680 0.29 0.006 38,016 69,696 1.20

33-37 158,400 0.317 0.009 155,692 314,092 0.98

38-42 158,400 0.348 0.013 31,745 190,145 0.2043 31,680 0.276 0.022 1,310 32,990 0.04

Period Mineral Strip Ratio



182

Figure 16-6: Schedule Production to 88 ktpd

Indicated and Inferred Resource tonnage in mine plan is shown in Figure 16-7. From the total

mineable resources incorporated for Life of Mine, 81 % are Indicated and the remainder are

Inferred Resources.



183

Figure 16-7: Indicated and Inferred Resources in Mine Schedule: 88 ktpd

iii. Equipment Fleet

The primary equipment for production is presented below:

Drilling: 251 mm drill (9 7/8” type D75KS)

Loading: Hydraulic Shovel 34 m3

Haulage: 227 t off-highway haul trucks

Auxiliary equipment for services is presented below:

Bulldozers (850 HP) for Production Services and Winter Operations

Wheel dozer(801 HP) for Production Services and Winter Operations

Motor graders (533 HP) for Production Services and Winter Operations

Water trucks (75.7 m3)

The operating and primary equipment fleet is shown in Table 16-11. Auxiliary Equipment Fleet is

shown in Table 16-12.



184

Table 16-11: Operating and Primary Equipment Fleet Schedule: 88 ktpd

Fleet Operating Fleet Operating Fleet Operating

0 0 0 0 0 0 0

1 0 0 0 0 0 0

2 11 9 3 2 4 3

3 13 11 4 3 5 4

4 15 13 4 3 5 4

5 14 12 4 3 5 4

6 13 11 4 3 5 4

7 13 11 4 3 5 4

8 16 14 4 3 5 4

9 19 16 4 3 6 5

10 14 12 4 3 6 5

11 16 14 4 3 6 512 16 14 4 3 6 5

13 19 16 4 3 6 5

14 18 15 4 3 6 5

15 20 17 4 3 6 5

16 22 19 4 3 6 5

17 21 18 4 3 6 5

18 19 16 4 3 6 5

19 19 16 4 3 6 5

20 21 18 4 3 6 5

21 23 20 5 4 7 6

22 23 20 5 4 7 6

23 21 18 5 4 7 6

24 23 20 5 4 7 625 25 22 5 4 7 6

26 28 24 5 4 7 6

27 30 26 5 4 7 6

28 30 26 5 4 7 6

29 28 24 5 4 7 6

30 28 24 5 4 7 6

31 27 23 4 3 6 5

32 27 23 4 3 6 5

33 27 23 4 3 6 5

34 27 23 4 3 6 5

35 27 23 4 3 6 5

36 15 13 3 2 4 3

37 15 13 3 2 4 338 15 13 3 2 4 3

39 15 13 3 2 4 3

40 15 13 3 2 4 3

41 15 13 3 2 4 3

42 15 13 3 2 4 3

43 15 13 3 2 4 3

Period Trucks 227 t Hydraulic Shovel 34 m3 Drills



185

Table 16-12: Operating and Auxiliary Equipment Fleet Schedule: 88 ktpd

iv. Manpower

The manpower for this case in terms of direct and indirect personnel is shown in Table 16-13.

Fleet Operating Fleet Operating Fleet Operating Fleet Operating Fleet Operating Fleet Operating Fleet Operating

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 2 1 3 2 3 2 2 1 2 1 2 1 2 1

3 3 2 4 3 4 3 3 2 2 1 3 2 3 2

4 3 2 4 3 4 3 3 2 2 1 3 2 3 2

5 3 2 4 3 4 3 3 2 2 1 3 2 3 2

6 3 2 4 3 4 3 3 2 2 1 3 2 3 2

7 3 2 4 3 4 3 3 2 2 1 3 2 3 2

8 3 2 4 3 4 3 3 2 2 1 3 2 3 2

9 3 2 4 3 5 4 3 2 2 1 3 2 3 2

10 3 2 4 3 4 3 3 2 2 1 3 2 3 2

11 3 2 4 3 4 3 3 2 2 1 3 2 3 2

12 3 2 4 3 4 3 3 2 2 1 3 2 3 2

13 3 2 4 3 5 4 3 2 2 1 3 2 3 2

14 3 2 4 3 4 3 3 2 2 1 3 2 3 2

15 3 2 4 3 5 4 3 2 2 1 3 2 3 2

16 3 2 4 3 5 4 3 2 2 1 3 2 3 2

17 3 2 4 3 5 4 3 2 2 1 3 2 3 2

18 3 2 4 3 5 4 3 2 2 1 3 2 3 2

19 3 2 4 3 5 4 3 2 2 1 3 2 3 2

20 3 2 4 3 5 4 3 2 2 1 3 2 3 2

21 3 2 5 4 5 4 3 2 2 1 3 2 3 2

22 3 2 5 4 5 4 3 2 2 1 3 2 3 2

23 3 2 5 4 5 4 3 2 2 1 3 2 3 2

24 3 2 5 4 5 4 3 2 2 1 3 2 3 2

25 3 2 5 4 6 5 4 3 2 1 3 2 4 3

26 3 2 5 4 6 5 4 3 2 1 3 2 4 3

27 3 2 5 4 7 6 4 3 2 1 3 2 4 3

28 3 2 5 4 7 6 4 3 2 1 3 2 4 3

29 3 2 5 4 6 5 4 3 2 1 3 2 4 3

30 3 2 5 4 6 5 4 3 2 1 3 2 4 3

31 3 2 4 3 6 5 4 3 2 1 3 2 4 3

32 3 2 4 3 6 5 4 3 2 1 3 2 4 3

33 3 2 4 3 6 5 4 3 2 1 3 2 4 3

34 3 2 4 3 6 5 4 3 2 1 3 2 4 3

35 3 2 4 3 6 5 4 3 2 1 3 2 4 336 2 1 3 2 4 3 3 2 2 1 2 1 3 2

37 2 1 3 2 4 3 3 2 2 1 2 1 3 2

38 2 1 3 2 4 3 3 2 2 1 2 1 3 2

39 2 1 3 2 4 3 3 2 2 1 2 1 3 2

40 2 1 3 2 4 3 3 2 2 1 2 1 3 2

41 2 1 3 2 4 3 3 2 2 1 2 1 3 2

42 2 1 3 2 4 3 3 2 2 1 2 1 3 2

43 2 1 3 2 4 3 3 2 2 1 2 1 3 2

Water Truck Bull dozer W. OP Wheeldozer W. OP. Motograder W. OPPeriod Bulldozer Prod. Wheeldozer Prod. Motograder-Prod.



186



187

Table 16-13: Yearly Staff: 88 ktpd

Direct Indirect Total# # #

0 0 0 0

1 0 0 0

2 151 46 197

3 202 46 248

4 215 46 261

5 206 46 252

6 202 46 248

7 202 46 248

8 224 46 270

9 252 46 298

10 218 46 26411 236 46 282

12 236 46 282

13 252 46 298

14 241 46 287

15 256 46 302

16 269 46 315

17 265 46 311

18 252 46 298

19 252 46 298

20 265 46 311

21 300 46 346

22 300 46 346

23 286 46 332

24 300 46 346

25 320 46 366

26 334 46 380

27 348 46 394

28 348 46 394

29 334 46 380

30 334 46 380

31 302 46 348

32 302 46 348

33 302 46 348

34 302 46 348

35 302 46 34836 185 46 231

37 185 46 231

38 185 46 231

39 185 46 231

40 185 46 231

41 185 46 231

42 185 46 231

43 185 46 231

Period



188

16.8.2 Case 1.3: 176ktpd


Figure 16-8 shows the Ultimate Pit for the 176 ktpd case.



Table 16-14 shows the production schedule for the case for the Life of Mine for 176 ktpd. Up to24 months prestripping work is considered to permit plant operation in the third year of activity

(Period 2). Full plant capacity will be reached from the 4th year (Period 3).



189


Yearly copper grade, mineral and waste throughput is shown in Figure 16-9.

Waste TotalKt % Cu % Mo Kt Kt

0 0 - - 0 0 -

1 0 - - 0 0 -

2 2,403 0.295 0.007 13,827 16,230 5.75

3 3,273 0.235 0.005 15,427 18,700 4.71

4 23,766 0.348 0.006 28,234 52,000 1.19

5 44,352 0.479 0.009 23,504 67,856 0.53

6 63,360 0.472 0.011 44,715 108,075 0.71

7 63,360 0.436 0.012 46,591 109,951 0.74

8 63,360 0.369 0.010 63,360 126,720 1.00

9 63,360 0.334 0.009 63,360 126,720 1.0010 63,360 0.322 0.010 76,640 140,000 1.21

11 63,360 0.316 0.010 76,640 140,000 1.21

12 63,360 0.345 0.011 76,640 140,000 1.21

13 63,360 0.319 0.012 76,640 140,000 1.21

14 63,360 0.339 0.006 76,640 140,000 1.21

15 63,360 0.345 0.008 76,640 140,000 1.21

16 63,360 0.335 0.012 76,640 140,000 1.21

17 63,360 0.304 0.013 76,640 140,000 1.21

18 63,360 0.290 0.013 76,640 140,000 1.21

19 63,360 0.290 0.011 76,640 140,000 1.21

20 63,360 0.307 0.009 76,640 140,000 1.2121 63,360 0.309 0.008 76,640 140,000 1.21

22 63,360 0.320 0.008 76,640 140,000 1.21

23 63,360 0.323 0.007 73,640 137,000 1.16

24 63,360 0.326 0.010 69,640 133,000 1.10

25 63,360 0.312 0.016 69,640 133,000 1.10

26 63,360 0.271 0.013 68,275 131,635 1.08

27 63,360 0.308 0.012 58,908 122,268 0.93

28 63,360 0.321 0.012 57,750 121,110 0.91

29 63,360 0.316 0.007 25,369 88,729 0.40

30 44,582 0.358 0.015 1,519 46,100 0.03

31 27,325 0.261 0.026 1,161 28,486 0.04Total 1,666,342 0.334 0.011 1,721,239 3,387,581 1.03

Period Mineral Strip Ratio



190

Figure 16-9: Schedule Production to 176 ktpd

Indicated and Inferred Resources tonnage for the mine plan is shown in Figure 16-10. From the

total mineable resources incorporated for the Life of Mine, 75 % are Indicated and the remainder

are Inferred Resources.



191



In this case, the primary equipment for production is presented below:


Loading: Rope Shovel 56 m3




Wheel dozer (801 HP) for Production Services and Winter Operations





192





0 0 0 0 0 0 0

1 0 0 0 0 0 0

2 0 0 0 0 0 0

3 11 9 3 2 3 2

4 12 10 4 3 5 4

5 20 17 5 4 7 6

6 22 19 5 4 7 67 27 23 6 5 7 6

8 25 22 6 5 7 6

9 32 28 6 5 7 6

10 31 27 6 5 7 6

11 31 27 6 5 7 6

12 30 26 6 5 7 6

13 33 29 6 5 7 6

14 36 31 6 5 7 6

15 37 32 6 5 7 6

16 36 31 6 5 7 6

17 37 32 6 5 7 6

18 38 33 6 5 7 619 27 23 6 5 7 6

20 28 24 6 5 7 6

21 28 24 6 5 7 6

22 29 25 6 5 7 6

23 25 22 6 5 7 6

24 25 22 6 5 7 6

25 25 22 6 5 7 6

26 21 18 6 5 6 5

27 22 19 6 5 7 6

28 20 17 4 3 7 6

29 12 10 3 2 5 4

30 8 7 2 1 4 3

31 6 5 2 1 3 2

PeriodTrucks 363 t Electric Rope Shovel 56 m3 Drills



193


iv. Manpower



0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3 2 1 3 2 3 2 2 1 2 1 2 1 2 1

4 3 2 4 3 3 2 2 1 2 1 3 2 2 1

5 3 2 5 4 5 4 3 2 2 1 3 2 3 2

6 3 2 5 4 5 4 3 2 2 1 3 2 3 2

7 3 2 6 5 6 5 4 3 2 1 4 3 4 3

8 3 2 6 5 6 5 4 3 2 1 4 3 4 3

9 3 2 6 5 7 6 4 3 2 1 4 3 4 3

10 3 2 6 5 7 6 4 3 2 1 4 3 4 3

11 3 2 6 5 7 6 4 3 2 1 4 3 4 3

12 3 2 6 5 7 6 4 3 2 1 4 3 4 3

13 3 2 6 5 7 6 4 3 2 1 4 3 4 3

14 3 2 6 5 8 7 5 4 2 1 4 3 5 4

15 3 2 6 5 8 7 5 4 2 1 4 3 5 4

16 3 2 6 5 8 7 5 4 2 1 4 3 5 4

17 3 2 6 5 8 7 5 4 2 1 4 3 5 4

18 3 2 6 5 8 7 5 4 2 1 4 3 5 4

19 3 2 6 5 6 5 4 3 2 1 4 3 4 3

20 3 2 6 5 6 5 4 3 2 1 4 3 4 3

21 3 2 6 5 6 5 4 3 2 1 4 3 4 3

22 3 2 6 5 6 5 4 3 2 1 4 3 4 3

23 3 2 6 5 6 5 4 3 2 1 4 3 4 3

24 3 2 6 5 6 5 4 3 2 1 4 3 4 3

25 3 2 6 5 6 5 4 3 2 1 4 3 4 3

26 3 2 6 5 5 4 3 2 2 1 4 3 3 2

27 3 2 6 5 5 4 3 2 2 1 4 3 3 2

28 3 2 4 3 5 4 3 2 2 1 3 2 3 2

29 2 1 3 2 3 2 2 1 2 1 2 1 2 1

30 2 1 2 1 3 2 2 1 2 1 2 1 2 1

31 1 1 1 1 2 1 1 1 1 1 1 1 1 1

Water Truck Bull dozer W. OP Wheeldozer W. OP. Motograder W. OPPeriod

Bulldozer Prod. Wheeldozer Prod. Motograder-Prod.



194


Direct Indirect Total# # #

0 0 0 0

1 0 0 0

2 0 0 0

3 138 46 184

4 186 46 232

5 277 46 323

6 290 46 336

7 341 46 387

8 337 46 383

9 379 46 42510 375 46 421

11 375 46 421

12 365 46 411

13 388 46 434

14 408 46 454

15 412 46 458

16 408 46 454

17 412 46 458

18 422 46 468

19 341 46 387

20 351 46 397

21 351 46 397

22 359 46 405

23 337 46 383

24 337 46 383

25 337 46 383

26 288 46 334

27 306 46 352

28 270 46 316

29 169 46 215

30 127 46 173

31 76 46 122

Period



195

16.8.3 Case 1.5: 88 - 176 ktpd

i. Ultimate Pit 88 - 176 ktpd

Figure 16-11 shows the Ultimate Pit for staged production from 88-176 ktpd.

Figure 16-11: Ultimate Pit: 88-176 ktpd (Coffey, June, 2013)

Mine Production Schedule

Table 16-18 shows the production schedule for the staged production increase from 88 to 176ktpd. Up to 24 months prestripping work to permit plant operation in the second year of activity

(Period 1) is considered. Full plant capacity (Phase 1 to 88 ktpd) will be reached from the 3 rd

year. An expansion to 176 ktpd (Phase 2) will be reached in the eighth year (Period 7).



196

Table 16-18: Production Schedule: 88 - 176 ktpd

Waste Total

Kt % Cu % Mo Kt Kt

0 0 - - 0 0 -

1 0 - - 0 0 -

2 2,403 0.295 0.007 13,827 16,230 5.75

3 3,273 0.235 0.005 15,427 18,700 4.71

4 21,164 0.350 0.006 22,836 44,000 1.08

5 31,680 0.487 0.009 19,705 51,385 0.62

6 31,680 0.491 0.009 22,416 54,096 0.71

7 31,680 0.448 0.012 31,874 63,554 1.01

8 31,680 0.436 0.012 44,548 76,228 1.41

9 63,360 0.395 0.009 66,640 130,000 1.05

10 63,360 0.370 0.009 76,640 140,000 1.21

11 63,360 0.334 0.010 76,640 140,000 1.21

12 63,360 0.324 0.010 76,640 140,000 1.21

13 63,350 0.328 0.009 76,650 140,000 1.21

14 63,350 0.332 0.010 76,650 140,000 1.21

15 63,350 0.328 0.010 76,650 140,000 1.21

16 63,350 0.339 0.010 76,650 140,000 1.21

17 63,360 0.334 0.008 76,640 140,000 1.21

18 63,360 0.326 0.011 76,640 140,000 1.21

19 63,360 0.304 0.011 76,640 140,000 1.21

20 63,360 0.295 0.012 76,640 140,000 1.21

21 63,360 0.296 0.012 76,640 140,000 1.21

22 63,360 0.309 0.013 76,640 140,000 1.21

23 63,360 0.321 0.009 73,640 137,000 1.16

24 63,360 0.317 0.007 69,640 133,000 1.10

25 63,360 0.323 0.008 69,640 133,000 1.10

26 63,360 0.328 0.011 69,640 133,000 1.10

27 63,360 0.295 0.014 53,156 116,516 0.84

28 63,360 0.280 0.013 48,657 112,017 0.77

29 63,360 0.317 0.014 46,521 109,881 0.73

30 63,360 0.309 0.010 45,714 109,074 0.72

31 63,360 0.339 0.008 9,129 72,489 0.14

32 34,956 0.332 0.019 1,044 36,000 0.03

33 20,586 0.259 0.026 825 21,410 0.04

Total 1,666,341 0.334 0.011 1,721,239 3,387,580 1.03

MineralStrip RatioPeriod



197

Yearly copper grade, mineral and waste throughput is shown in Figure 16-12.

Figure 16-12: Schedule Production: 88-176 ktpd

Indicated and Inferred Resources tonnage in mine plan is shown in Figure 16-13. From the total

mineable resources incorporated for Life of Mine, 75 % are Indicated and the remainder areInferred Resources.



198

Figure 16-13: Indicated and Inferred Resources in Mine Schedule: 88-176 ktpd

ii. Equipment Fleet



Loading: Hydraulic shovel 45 m3




Wheel dozer (801 HP) for Production Services and Winter Operations







199

Table 16-19: Operating and Primary Equipment Fleet Schedule: 88-176 ktpd


0 0 0 0 0 0 0

1 0 0 0 0 0 0

2 0 0 0 0 0 0

3 10 8 3 2 5 4

4 10 8 3 2 5 4

5 11 9 3 2 6 5

6 14 12 4 3 6 5

7 16 14 4 3 7 6

8 27 23 6 5 12 10

9 31 27 6 5 13 11

10 30 26 6 5 13 11

11 30 26 6 5 13 11

12 29 25 6 5 13 11

13 29 25 6 5 13 11

14 35 30 6 5 13 11

15 37 32 6 5 13 11

16 36 31 6 5 13 11

17 36 31 6 5 13 11

18 38 33 6 5 13 11

19 35 30 6 5 13 11

20 29 25 6 5 13 11

21 29 25 6 5 13 1122 28 24 6 5 13 11

23 27 23 6 5 12 10

24 27 23 6 5 12 10

25 23 20 6 5 12 10

26 21 18 6 5 11 9

27 20 17 5 4 11 9

28 20 17 5 4 11 9

29 22 19 5 4 11 9

30 16 14 4 3 7 6

31 10 8 3 2 4 3

32 7 6 2 1 3 2

33 5 4 1 1 2 1

Period Trucks 345 t Hydraulic Shovel 45 m3 Drills



200

Table 16-20: Operating and Auxiliary Equipment Fleet Schedule: 88-176 ktpd

iii. Manpower



0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3 2 1 3 2 3 2 2 1 2 1 2 1 2 1

4 2 1 3 2 3 2 2 1 2 1 2 1 2 1

5 2 1 3 2 3 2 2 1 2 1 2 1 2 1

6 3 2 4 3 4 3 3 2 2 1 3 2 3 2

7 3 2 4 3 4 3 3 2 2 1 3 2 3 2

8 3 2 6 5 6 5 4 3 2 1 4 3 4 3

9 3 2 6 5 7 6 4 3 2 1 4 3 4 3

10 3 2 6 5 7 6 4 3 2 1 4 3 4 3

11 3 2 6 5 7 6 4 3 2 1 4 3 4 3

12 3 2 6 5 6 5 4 3 2 1 4 3 4 3

13 3 2 6 5 6 5 4 3 2 1 4 3 4 3

14 3 2 6 5 7 6 4 3 2 1 4 3 4 3

15 3 2 6 5 8 7 5 4 2 1 4 3 5 4

16 3 2 6 5 8 7 5 4 2 1 4 3 5 417 3 2 6 5 8 7 5 4 2 1 4 3 5 4

18 3 2 6 5 8 7 5 4 2 1 4 3 5 4

19 3 2 6 5 7 6 4 3 2 1 4 3 4 3

20 3 2 6 5 6 5 4 3 2 1 4 3 4 3

21 3 2 6 5 6 5 4 3 2 1 4 3 4 3

22 3 2 6 5 6 5 4 3 2 1 4 3 4 3

23 3 2 6 5 6 5 4 3 2 1 4 3 4 3

24 3 2 6 5 6 5 4 3 2 1 4 3 4 3

25 3 2 6 5 5 4 3 2 2 1 4 3 3 2

26 3 2 6 5 5 4 3 2 2 1 4 3 3 2

27 3 2 5 4 5 4 3 2 2 1 3 2 3 2

28 3 2 5 4 5 4 3 2 2 1 3 2 3 2

29 3 2 5 4 5 4 3 2 2 1 3 2 3 2

30 3 2 4 3 4 3 3 2 2 1 3 2 3 2

31 2 1 3 2 3 2 2 1 2 1 2 1 2 1

32 2 1 2 1 3 2 2 1 2 1 2 1 2 1

33 1 1 1 1 2 1 1 1 1 1 1 1 1 1

Wate r T ruck Bull doz er W. OP Whee ldoz er W. OP. Motograder W. OPPeriod Bulldozer Prod. Wheeldozer Prod. Motograder -Prod.



201

Table 16-21: Yearly Staff: 88-176 ktpd

Direct Indirect Total

# # #

0 0 0 0

1 0 0 0

2 0 0 0

3 157 46 203

4 157 46 203

5 177 46 223

6 218 46 264

7 250 46 2968 399 46 445

9 446 46 492

10 436 46 482

11 436 46 482

12 430 46 476

13 430 46 476

14 463 46 509

15 483 46 529

16 479 46 525

17 479 46 525

18 493 46 539

19 463 46 509

20 430 46 476

21 430 46 476

22 422 46 468

23 399 46 445

24 399 46 445

25 374 46 420

26 346 46 392

27 321 46 367

28 321 46 367

29 334 46 380

30 250 46 296

31 143 46 189

32 105 46 151

33 61 46 107

Period



202

16.8.4 Case 2.2: 44 ktpd


Figure 16-14 shows the Ultimate Pit for the 44 ktpd case.




203


Table 16-22 shows the production schedule for the case to Life of Mine to 44 ktpd. Up to 18

months prestripping work to permit plant operation in the second year of activity (Period 1) is

considered. Full plant capacity will be reached from the 3rd year.


Waste Total

Kt % Cu % Mo Kt Kt

0 0 - - 0 0 -

1 0 - - 0 0 -

2 1,633 0.306 0.008 22,917 24,550 14.04

3 6,065 0.276 0.006 23,935 30,000 3.954 15,840 0.484 0.009 14,160 30,000 0.89

5 15,840 0.569 0.008 14,160 30,000 0.89

6 15,840 0.446 0.009 14,160 30,000 0.89

7 15,840 0.392 0.007 14,160 30,000 0.89

8 15,840 0.403 0.008 14,160 30,000 0.89

9 15,840 0.433 0.01 14,160 30,000 0.89

10 15,840 0.439 0.011 14,160 30,000 0.89

11 15,840 0.437 0.011 14,160 30,000 0.89

12 15,840 0.432 0.01 14,160 30,000 0.89

13 15,840 0.431 0.011 14,160 30,000 0.89

14 15,840 0.429 0.012 14,160 30,000 0.89

15 15,840 0.418 0.011 14,160 30,000 0.89

16 15,840 0.392 0.011 14,160 30,000 0.89

17 15,840 0.377 0.011 14,160 30,000 0.89

18 15,840 0.371 0.011 14,160 30,000 0.89

19 15,840 0.37 0.013 14,160 30,000 0.89

20 15,840 0.372 0.014 14,160 30,000 0.89

21 15,840 0.37 0.016 14,160 30,000 0.89

22 15,840 0.352 0.017 14,160 30,000 0.89

23 15,840 0.354 0.013 14,160 30,000 0.89

24 15,840 0.358 0.008 14,160 30,000 0.89

25 15,840 0.359 0.007 14,160 30,000 0.89

26 15,840 0.362 0.008 14,160 30,000 0.89

27 15,840 0.364 0.008 14,160 30,000 0.89

28 15,840 0.361 0.009 14,160 30,000 0.89

29 15,840 0.353 0.01 14,160 30,000 0.89

30 15,840 0.338 0.011 14,160 30,000 0.89

31 15,840 0.328 0.012 14,160 30,000 0.89

32 15,840 0.321 0.013 14,160 30,000 0.89

33-37 79,200 0.318 0.011 73,800 153,000 0.93

38-42 79,200 0.326 0.007 73,800 153,000 0.93

Total 625,458 0.374 0.010 605,092 1,230,550 0.97

MineralStrip RatioPeriod



204

Yearly copper grade, mineral and waste throughput is shown in Figure 16-16

Figure 16-15: Schedule Production: 44 ktpd

Indicated and Inferred Resources tonnage from the mine plan is shown in Figure 16-16. Fromthe total mineable resources incorporated in the Life of Mine, 85 % are Indicated and the

remainder are Inferred Resources.



205




Drilling: Roc L8 111-203 mm drill

Loading: 19 m3 front end loader



Bulldozers for Production Services and Winter Operations

Wheel dozer for Production Services and Winter Operations

Motor graders for Production Services and Winter Operations

Water trucks



206





0 0 0 0 0 0 0

1 0 0 0 0 0 0

2 13 11 5 4 5 4

3 12 10 5 4 5 4

4 12 10 5 4 5 4

5 13 11 5 4 5 4

6 12 10 5 4 5 4

7 12 10 5 4 5 4

8 12 10 5 4 5 4

9 12 10 5 4 5 4

10 12 10 5 4 5 4

11 13 11 5 4 5 4

12 13 11 5 4 5 4

13 12 10 5 4 5 4

14 12 10 5 4 5 4

15 13 11 5 4 5 4

16 13 11 5 4 5 4

17 14 12 5 4 5 4

18 14 12 5 4 6 5

19 14 12 5 4 5 4

20 14 12 5 4 5 4

21 15 13 5 4 6 522 15 13 5 4 6 5

23 14 12 5 4 5 4

24 14 12 5 4 5 4

25 15 13 5 4 5 4

26 15 13 5 4 5 4

27 15 13 5 4 5 4

28 15 13 5 4 5 4

29 14 12 5 4 5 4

30 14 12 5 4 5 4

31 15 13 5 4 5 4

32 15 13 5 4 6 5

33 15 13 5 4 6 5

34 15 13 5 4 6 535 15 13 5 4 6 5

36 15 13 5 4 6 5

37 14 12 5 4 6 5

38 14 12 5 4 6 5

39 14 12 5 4 6 5

40 14 12 5 4 5 4

41 14 12 5 4 5 4

42 15 13 5 4 5 4

PeriodTrucks 136 t FEL 19 m3 Drills 111-203 mm



207


iv. Manpower



0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 3 2 5 4 4 3 3 2 2 1 3 2 3 2

3 3 2 5 4 3 2 2 1 2 1 3 2 2 1

4 3 2 5 4 3 2 2 1 2 1 3 2 2 1

5 3 2 5 4 4 3 3 2 2 1 3 2 3 2

6 3 2 5 4 3 2 2 1 2 1 3 2 2 1

7 3 2 5 4 3 2 2 1 2 1 3 2 2 1

8 3 2 5 4 3 2 2 1 2 1 3 2 2 1

9 3 2 5 4 3 2 2 1 2 1 3 2 2 1

10 3 2 5 4 3 2 2 1 2 1 3 2 2 1

11 3 2 5 4 4 3 3 2 2 1 3 2 3 2

12 3 2 5 4 4 3 3 2 2 1 3 2 3 2

13 3 2 5 4 3 2 2 1 2 1 3 2 2 1

14 3 2 5 4 3 2 2 1 2 1 3 2 2 1

15 3 2 5 4 4 3 3 2 2 1 3 2 3 2

16 3 2 5 4 4 3 3 2 2 1 3 2 3 217 3 2 5 4 4 3 3 2 2 1 3 2 3 2

18 3 2 5 4 4 3 3 2 2 1 3 2 3 2

19 3 2 5 4 4 3 3 2 2 1 3 2 3 2

20 3 2 5 4 4 3 3 2 2 1 3 2 3 2

21 3 2 5 4 4 3 3 2 2 1 3 2 3 2

22 3 2 5 4 4 3 3 2 2 1 3 2 3 2

23 3 2 5 4 4 3 3 2 2 1 3 2 3 2

24 3 2 5 4 4 3 3 2 2 1 3 2 3 2

25 3 2 5 4 4 3 3 2 2 1 3 2 3 2

26 3 2 5 4 4 3 3 2 2 1 3 2 3 2

27 3 2 5 4 4 3 3 2 2 1 3 2 3 2

28 3 2 5 4 4 3 3 2 2 1 3 2 3 2

29 3 2 5 4 4 3 3 2 2 1 3 2 3 2

30 3 2 5 4 4 3 3 2 2 1 3 2 3 2

31 3 2 5 4 4 3 3 2 2 1 3 2 3 2

32 3 2 5 4 4 3 3 2 2 1 3 2 3 2

33 3 2 5 4 4 3 3 2 2 1 3 2 3 2

34 3 2 5 4 4 3 3 2 2 1 3 2 3 235 3 2 5 4 4 3 3 2 2 1 3 2 3 2

36 3 2 5 4 4 3 3 2 2 1 3 2 3 2

37 3 2 5 4 4 3 3 2 2 1 3 2 3 2

38 3 2 5 4 4 3 3 2 2 1 3 2 3 2

39 3 2 5 4 4 3 3 2 2 1 3 2 3 2

40 3 2 5 4 4 3 3 2 2 1 3 2 3 2

41 3 2 5 4 4 3 3 2 2 1 3 2 3 2

42 3 2 5 4 4 3 3 2 2 1 3 2 3 2

Water T ruck B ull dozer W. OP Wheeldoz er W. OP. Motograder W. OPPeriod Bulldozer Prod. Wheeldozer Prod. Motograder-Prod.



208


Direct Indirect Total

# # #0 0 0 0

1 0 0 0

2 209 46 255

3 192 46 238

4 192 46 238

5 209 46 255

6 192 46 238

7 192 46 238

8 192 46 238

9 192 46 238

10 192 46 238

11 209 46 25512 209 46 255

13 192 46 238

14 192 46 238

15 209 46 255

16 209 46 255

17 213 46 259

18 225 46 271

19 213 46 259

20 213 46 259

21 234 46 280

22 234 46 280

23 213 46 25924 213 46 259

25 222 46 268

26 222 46 268

27 222 46 268

28 222 46 268

29 213 46 259

30 213 46 259

31 222 46 268

32 234 46 280

33 234 46 280

34 234 46 280

35 234 46 280

36 234 46 280

37 225 46 271

38 225 46 271

39 225 46 271

40 213 46 259

41 213 46 259

42 222 46 268

Period



209

16.9 Summary

Table 16-26 summarises the waste and mineable tonnage resources, Cu and Mo grades and

metal content for a 40 year mine life for the selected options and the residual metal in the

resource where applicable.

Table 16-26: Mine Plan Summary

The production schedules presented above were used as the basis for determining equipment

requirements. The residual mineral is that remaining after 40 years LOM and is defined as that

mineral remaining in the pit selected for each option considered.

Mine operations are scheduled for three 8-hour shifts per day, 5 days in 2 days out for a total of

360 d/y. Four crews, rotating between day and night shifts, are contemplated to provide

continuous operation and maintenance labour coverage for the mine.

Table 16-27 summarises the primary mining fleet requirement.

Total

capacityMineral CuT Mo

CuT Metal

in situ

Mo Metal in

situWaste Strip Ratio Total

ktpd Mt % % Mlb Mlb Mt Mt Mt

1.2 88 1,279 0.346 0.011 9,755 310 1033 0.81 2,312

1.3 176 1,666 0.334 0.011 12,270 404 1721 1.03 3,388

1.5 88 - 176 1,666 0.334 0.011 12,270 404 1721 1.03 3,388

2.2 44 1,077 0.358 0.011 8,500 261 850 0.79 1,927

Case



210

Table 16-27: Primary Equipment for each case

Mine personnel requirements are based on owner operations although some mining functions

such as prestripping, down-hole explosive loading, supply and shot services, and contract

maintenance by Maintenance and Repair Contracts (MARC) will be completed by contractors.

Maximum Direct and Indirect workforce requirements range between 280 and 539 per year for

the options presented.

Throughput Drilling Loading Haulage

ktpd Equipment Equipment Equipment

1.2 88 251 mm Drill (9 7/8" type D75KS) Hydraulic Shovel 34 m3 227 t off-highway haul trucks

1.3 176 251 mm Drill (9 7/8" type D75KS) Rope Shovel 56 m3 363 t off-highway haul trucks

1.5 88-176 251 mm Drill (9 7/8" type D75KS) Hydraylic Shovel 45 m3 345 t off-highway haul trucks

2.2 44 Roc L8 110-203 mm Drill 19 m3 FEL 136 t off-highway haul trucks

Case



211

17 RECOVERY METHODS

17.1 Introduction

The process for the recovery of copper and molybdenum includes:

Crushing and grinding of the ROM mineralized material

Copper-molybdenum rougher and cleaner flotation

Regrinding

Copper and molybdenum separation by selective flotation

Molybdenum cleaner flotation, and

Dewatering of copper and molybdenum concentrates.

The copper and molybdenum concentrates are envisioned to be transported by truck from the

concentrator to the rail load-out facility from where they will be transported by rail to the Port of

Ventanas or other destination for shipment. The flotation tailings are thickened before placement

in the Tailings Storage facility (TSF).



212

Figure 17-1: Simplified sketch of the Plant flow sheet.



213

17.2 Process Design Basis and Design Criteria Summary

The key process criteria for the plant design and operating costs are provided in Table 17-1.

Table 17-1: Summary of Key Process Design Criteria

Item Unit Value Source

General Parameters

Operating days d/y 365 Parameters defined by Alquimia

Operating hours h/d 24 Parameters defined by Alquimia

Utilization

Primary crushing % 70 Parameters defined by Alquimia

Grinding % 92 Parameters defined by Alquimia

Cu - Mo flotation % 92 Parameters defined by Alquimia

Mo flotation % 92 Parameters defined by Alquimia

Thickening % 98 Parameters defined by Alquimia

Filtering % 85 Parameters defined by Alquimia

Drying % 90 Parameters defined by Alquimia

Mineral Parameters

Cu head grade % 0.51 Parameters obtained from analysis of Vizcachitas testwork (Average)

Mo head grade ppm 130 Parameters obtained from analysis of Vizcachitas testwork (Average)

Work index (Wi) kWh/st 13.0 Parameters obtained from analysis of Vizcachitas testwork

Moisture % 3.0 Parameters defined by Alquimia

Specific solid gravity - 2.6 Parameters obtained from analysis of Vizcachitas testwork

Cu-Mo Flotation

Cu recovery % 90.2 Calculated

Mo recovery % 84.6 Calculated

Cu concentrate grade % 30.0 Parameters obtained from analysis of Vizcachitas testwork

Mo concentrate grade % 0.72 Parameters obtained from analysis of Vizcachitas testwork

Mo Flotation

Cu recovery % 0.04 Calculated

Mo recovery % 89.0 Calculated

Cu concentrate grade % 2.0 Benchmarking parameters and industrial practice

Mo concentrate grade % 48.0 Benchmarking parameters and industrial practice

Global Process

Cu recovery % 90.0 CalculatedMo recovery % 75.0 Calculated

Cu concentrate grade % 30.0 Benchmarking parameters and industrial practice

Mo concentrate grade % 48.0 Benchmarking parameters and industrial practice



214

17.3 Crushing

The mineralized material from the mine is transported by trucks to the primary crushing facility,

where it is discharged into the dump pocket which feeds a jaw or gyratory crusher.

The crusher discharges onto an apron feeder and the crushed material is then transported by a

belt conveyor to the covered coarse material stockpile.

17.4 Grinding

Semi-Autogenous Grinding (SAG) was selected for the milling stage. This decision relies in the

fact that in a SAG circuit the capacity can be easily doubled incrementally, by adding one or two

ball mills whilst maintaining only one grinding line. If the mineral throughput becomes too highand cannot be processed by one line, additional lines can be added to the circuit. The grinding

circuit has been designed to achieve a final product size with 80% passing size (P80) of 180 μm.

The grinding plant includes the coarse stock pile to the overflow of the cyclone cluster. The SAG

mill is fed by a conveyor belt from the coarse material stockpile. The SAG mill discharge slurry

passes through a vibratory double deck screen with 13 mm apertures to remove pebbles, while

the screen undersize flows into the cyclone feed pumpbox and combines with ball mill discharge

in a Semiautogenous-Ball Mill-Crusher-B (SABC-B) circuit. The combined product is pumped to

the cyclone cluster to classify the product. The coarse material in the underflow returns to the

SAG mill in (SAC) circuit or to the ball mills in SABC-B circuit, the fines in the overflow report by

gravity to rougher flotation.

The vibrating screen oversize (pebbles) is transported by conveyor belts to the pebble crusher

plant and then returned to the grinding circuit, either to the primary mill (SAC circuit) or the

secondary mill (SABC-B circuit).

A pebble circulating load of 30 % and 20 % of the new feed rate, for SAC circuit and SABC-B

circuit respectively, has been assumed for the design of the pebble crusher. This is based on

typical industry experience with mineralized material of similar competency.

Figure 17-2 shows an isometric view of a SAC circuit and Figure 17-3 shows an isometric viewof an SABC-B circuit.



215

Figure 17-2: SAC Circuit



216

Figure 17-3: SABC-B Circuit



217

17.5 Copper-Molybdenum Flotation Circuit Design

The flow sheet selected consists of rougher flotation, rougher concentrate regrind, two stages of

cleaner flotation, and two stages of scavenger flotation. The mineralized material will require a

fine regrind of the rougher concentrate to a P80 of 45 μm to achieve adequate recovery. After

regrinding, conventional flotation is used to enable the production of saleable grade

concentrates.

Rougher concentrate, as well as first and second cleaner concentrate, will report to the regrind

cyclone feed pumpbox. The regrind cyclones will target a cut size P80 of 45 μm which will beachieved with a cluster of cyclones operating in reverse closed circuit; the cyclones overflow will

report to the first cleaner flotation, while the underflow will feed the vertical mill and this milldischarge will recirculate back into the flotation circuit.

The first cleaner stage is composed of conventional flotation cells and is fed by the overflow of

the cyclone cluster and the tail of the second cleaner stage. The product feeds the second

cleaner, while the tail feeds the first scavenger stage.

Second cleaner flotation (column cells) concentrate, reports to the bulk flotation thickener while

the tail reports to the first cleaner stage.

First scavenger stage (conventional cells) concentrate reports to the regrind cyclone feed

pumpbox, while the tail feeds the second scavenger stage.

Second scavenger stage (conventional cells) concentrate reports to the regrind cyclone feed

pumpbox, while the tail reports to the tailings thickener.



218

Figure 17-4: Cu - Mo Flotation Circuit



219

The flotation process has been designed so that the first scavenger may be converted to a

cleaner stage if additional cleaning is required. If this modification is adopted the circuit consists

of three stages of cleaner (first cleaner in the normal circuit becomes second cleaner, while first

scavenger becomes first cleaner, and second cleaner becomes third cleaner) and one

scavenger stage. In this modified circuit, the concentrate of the first cleaner feeds the second

cleaner, the concentrate of the second cleaner feeds the third cleaner stage and the tail of the

third cleaner stage feeds the first cleaner stage (see segmented lines in Figure 17-4).

17.6 Copper-Molybdenum Separation and Molybdenum Cleaner

The flow sheet selected to separate copper and molybdenum consists of rougher flotation, four

stages of cleaner flotation in conventional cells, intermediate thickener, and a fifth cleaner

flotation in column cells. The tailings from the rougher flotation is the final copper concentrate.Concentrate from the fifth cleaner flotation cells is the final molybdenum concentrate.

The Cu-Mo concentrate thickener discharge reports to an acidification pond. The concentrate is

pumped to a conditioning pond, where it mixes with the tail of the first cleaner and dilution water;

reagents are added as necessary (collector, frother, etc.).



220

Figure 17-5: Molybdenum Flotation Circuit

From collectiveflotation

Conditionerpond

Rougherflotation

Cu concentratethickener

Cu concentrate

Recovered water

3° cleaner

2°cleaner1° cleaner

4° cleaner

Intermediatethickener

Mo concentratefilter

Bags

Recovered water

Recovered water

Mo concentrate

Recovered water

Acidificationpond

Mo concentratethickener

Conditionerpond 5° cleaner

Mo concentrateDryer



221

The product of the conditioning tank and the tail of the first cleaner feed the rougher flotation

stage. This stage is composed of conventional, sealed and self-aspirated cells. The concentrate

from this stage reports to the first cleaner stage, while the tailings, the final copper concentrate,

report to a conventional thickener and are thickened to approximately 58 % w/w solids.

Thickened copper concentrate slurry is pumped to the copper concentrate filters. The filter

presses are designed to reduce the moisture content of the concentrate prior to transport. Filter

cake is discharged through the floor of the filter building into a concrete bunker area underneath

the filter press. Filter cake is then removed from the bunker by a Front End Loader (FEL) and

stored in the covered concentrate storage shed. Concentrate will then be reclaimed by an FEL

from the stockpile and loaded into trucks for transport to the rail load-out facility.

The diluted rougher concentrate along with the tail of the second cleaner feed the first cleanerstage. First cleaner concentrate feeds the second cleaner stage, while the tail reports to the

conditioning tank along with the flow from acidification pond.

The second cleaner stage, composed of conventional, sealed and self-aspirated cells, is fed by

the concentrate of the first cleaner stage and the tail of the third cleaner stage. The second

cleaner concentrate reports to the third cleaner.

The third cleaner stage, composed of conventional, sealed and self-aspirated cells, is fed by the

concentrate of the second cleaner stage and the tail of the fourth cleaner stage. The third

cleaner concentrate reports to the fourth cleaner.

The fourth cleaner stage, composed of conventional, sealed and self-aspirated cells, is fed by

the concentrate of the third cleaner stage and the tail of the fifth cleaner stage. The fourth

cleaner concentrate reports to an intermediate thickener, where concentrate is thickened to

approximately 50 % w/w solids.

The discharge of the intermediate thickener reports to a conditioning tank, prior to a fifth cleaner

flotation stage, which is composed of flotation columns. The tail of the fifth cleaner reports to the

fourth cleaner, while the concentrate reports to the molybdenum concentrate thickener.

Molybdenum flotation concentrate from the fifth cleaner cells is then thickened to approximately58 % w/w solids. Molybdenum concentrate storage is envisioned to provide surge capacity

ahead of the molybdenum concentrate filter.

The discharge of the molybdenum thickener is filtered, dried and stored in a hopper. The

molybdenum concentrate is then packed in 1 T maxi bags for transport to final sale.



222

17.7 PEA Options and Cases

As mentioned in Chapter 16, for this PEA two options were studied, and within these options

additional cases considering different throughput capacities and growth possibilities were

evaluated as follows:

Option 1 – One or two modules with a SAG Mill of 40’ diameter x 26’ long with 30,000 HP

motor and ball mills (if included) of 27’ diameter x 45’ long with 25,000 HP motors.

Option 2 - Initial module with a SAG Mill of 34’ diameter x 17’ long with 15,000 HP motorand ball mills (if included) of 27’ diameter x 45’ long with 25,000 HP motor s and eventually

an additional module of a SAG Mill of 40’ diameter x 26’ long with 30,000 HP motor and

ball mills (if included) of 27’ diameter x 45’long with 25,000 HP motors.

A total of 8 cases were evaluated, the range of throughputs was defined to either maximise

return or minimise initial capital investment. The eight cases are noted below in this section.

Those cases that returned the highest NPVs are presented in this Report. These cases are: 1.2,

1.3, 1.5 and 2.2.

Option 1

Case 1.1: One SAC circuit with a throughput of 32 ktpd.

Case 1.2: One SABC-B circuit with two ball mills, with a throughput of 88 ktpd. Case 1.3: Two modules with SABC-B circuit with two ball mills per module, with a

throughput of 176 ktpd.

Case 1.4: Start with one SAC circuit module with a throughput of 32 ktpd. After 6 years of

operation it converts to a SABC-B circuit with two ball mills with a final throughput of 88

ktpd.

Case 1.5: Start with one module with SABC-B circuit with two ball mills, with a throughput

of 88 ktpd. After 5 years of operation this module is duplicated achieving a throughput of

176 ktpd.

Option 2

Case 2.1: One SAC circuit with a throughput of 16 ktpd.

Case 2.2: One SABC-B circuit with one ball mill, with a throughput of 44 ktpd.



223

Case 2.3: One SAC circuit module with a throughput of 16 ktpd. After 6 years of operation

it converts to a SABC-B circuit with one ball mill and an additional module with a SAC

circuit. The final throughput of this case is 76 ktpd.

The general arrangements of each option for each case within such option are the same; Figure

17-6 shows the general arrangement for Option 1 and Figure 17-7 shows the general

arrangement for Option 2.

Table 17-2 through Table 17-6 show major equipment for the selected cases.



224

Figure 17-6: General Arrangement Process Plant – Cases 1.2, 1.3 and 1.5



225



226

Figure 17-7: General Arrangement Process Plant – Case 2.2

Table 17-2: Process Plant Equipment - Crushing

Quantity Characteristics Quantity Characteristics Quantity Characteristics Phase Quantity Characteristics

1 60' x 89 ' 2 60' x 89 ' 1 60' x 89 ' Phase I 1 42' x 65 '

- - - - 1 60' x 89 ' Phase II - -

1 Length = 2000 m,

5,245 tph 2

Length = 2000 m,

3,990 tph 2

Length = 2000 m,

5,240 tph Phase I 1

Length = 2000 m,

2,621 tph

- - - - 2 Length = 2000 m,

5,240 tph Phase II - -

Coarse stockpile 1 Diameter = 110 m,

62,500 live ton 1

Diameter = 110 m,

62,000 live ton 1

Diameter = 110 m,

62,500 live ton Phase I 1

Diameter = 90 m,

31,000 live ton

Coarse stockpile extension - - 1 Diameter = 110 m,

62,000 live ton 1

Diameter = 110 m,

62,500 live ton Phase II - -

1 width 54in, 8 units 2 width 54in, 8 units 1 width 54in, 8 units Allowances 1 width 42in, 6 units

- - - - 1 width 54in, 8 units Allowances,

Phase II - -

1 width 42 in,

Total length 650 m

2 width 42 in,

Total length 650 m

1 width 42 in,

Total length 650 m

Allowances 1 width 36 in,

Total length 650 m

- - - - 1 width 42 in,

Total length 650 m

Allowances,

Phase II - -

Case 2.2Case 1.2 Case 1.3 Case 1.5

Area Equipment

Crushing

Primary gyratory crusher

Belt conveyor to coarse

stockpile

Feeder

Conveyor



227

Table 17-3: Process Plant Equipment – Grinding

Qua ntity Characteristics Quantity Charac teris tics Quantity Charac teristics Phase Quantity Charac teristics

1 40'x 26' 2 40'x 26' 1 40'x 26' Phase I 1 34'x 17'

- - - - 1 40'x 26' Phase II - -

2 8' x 20' 4 8' x 20' 2 8' x 20' Phase I 2 6' x 16'

- - - - 1 8' x 20' Phase II - -

- - - - 1 8' x 20' Phase II,

stand-by - -

3 - 6 - 3 - Phase I 2 -

- - - - 2 - Phase II - -

- - - - 1 - Phase II,

stand-by - -

2 Centrifugal,

9,175 m3/hr

4 Centrifugal,

9,175 m3/hr

2 Centrifugal,

9,175 m3/hr

Es tim ated 1 Centrifugal,

9,175 m3/hr

- - - - 2 Centrifugal,

9,175 m3/hr

Estimated,

Phase II - -

2 Cluster 10+2,

800 mm 4

Cluster 10+2,

800 mm 2

Cluster 10+2, 800

mm Phase I 1

Cluster 10+2,

800mm

- - - - 2 uster + ,

mm

Phase II - -

2 27' x 45' 4 27' x 45' 2 27' x 45' Phase I 1 27' x 45'

- - - - 2 27' x 45' Phase II - -


Grinding

SAG mill

Vibrating s creen of SAG

Pebbles crusher

Cyclone feeding pump

SAG hydrocyclone

Ball mill

Area Equipment



228

Table 17-4: Process Plant Equipment – Flotation

Quantity Characte ristics Quantity Characteristics Quantity Characte ristics Phase Quantity Characte ristics

18 300 m3 36 300 m3 18 300 m3 Phase I 10 300 m3

- - - - 18 300 m3 Phase II - -

5 160 m3 8 160 m3 4 160 m3 Phase I 4 100 m3

- - - - 4 160 m3 Phase II - -

4 160 m3 6 160 m3 3 160 m3 Phase I 3 100 m3

- - - - 3 160 m3 Phase II - -

4 250 m3 8 250 m3 4 250 m3 Phase I 4 130 m3

- - - - 4 250 m3 Phase II - -

2 13m2 3 16 m2 2 13 m2 Phase I 2 6 m2

- - - - 2 13 m2 Phase II - -

1 D=30 m 1 D=45 m 1 D=30 m Phase I 1 D=20 m

- - - - 1 D=30 m Phase II - -

2 Cluster 10+2,

400 mm 3 Cluster 6+2, 20'' 1 Cluster 10+2, 15'' Phase I 2

Cluster 6+1,

400mm

- - - - 2 Cluster 10+2, 15'' Phase II - -

Cu concentrate stockpile

extension - - - - 1 Cluster 10+2, 15'' Phase I - -

2 - 3 - 2 - Phase I 2 -

- - - - 2 - Phase II - -


Flotation

Rougher flotation cell

First cleaner flotation cell

First scavenger flotation cell

Second scavenger flotation cell

Second cleaner flotation cell

Colective concentrate

thickener

Hydrocyclone regrinding

Regrinding mill

Area Equipment



229

Table 17-5: Process Plant Equipment – Tailing Handling / Concentrate Handling

Quantity Characteristics Quantity Characteristics Quantity Characteristics Phase Quantity Characteristics

1 D=90 m 2 D=90 m 1 D=90 m Phase I 1 D=65 m

- - - - 1 D=90 m Phase II - -


extension - - - - - - - - -

1 Centrifugal,

4,840 m3/hr 2

Centrifugal,

4,840 m3/hr 1

Centrifugal,

4,840 m3/hr Phase I 1

Centrifugal,

2,419 m3/hr

- - - - 1 Centrifugal,

4,840 m3/hr Phase II - -

Cu concentrate stockpile 1

Length = 55m ,

width = 25m,

9,200 ton

1

Length = 60m ,

width = 35m,

20,000 ton

1

Length = 40m ,

width = 35m,

9,200 ton

Phase I 1

Length = 37m ,

width = 22m,

4,800 live ton


extension - - - - 1

Lenght extension 20 m

20,000 ton Phase I - -


(Train station) 1 - 1 - 1 - Phase I 1 -


Tailing

handling

Tailings thickener

Tailings pump

Concentrate

handling

Area Equipment



230

Table 17-6: Process Plant Equipment – Molybdenum Flotation

Quantity Characteristics Quantity Characte ristics Quantity Characteristics Phase Quantity Characteristics

8 14.2 m3 8 28.3 m3 8 14.2 m3 Phase I 7 8.5 m3

- - - - 8 500 ft3 Phase II - -

1 D=28 m 1 D=39 m 1 D=28 m Phase I 1 D= 20m

- - - - - - - - -

1 A= 156 m2 2 A= 156 m2 1 A= 156 m2 Phase I 1 A= 84 m2

- - - - 1 A= 156 m2 Phase II - -

6 8.5 m3 4 28.3 m3 6 8.5 m3 Phase I 6 4.25 m3

- - - - 6 8.5 m3 Phase II - -

4 8.5 m3 5 14.2 m3 4 8.5 m3 Phase I 4 4.25 m3

- - - - 4 8.5 m3 Phase II - -

5 2.8 m3 4 8.5 m33 5 2.8 m3 Phase I 3 2.8 m3

- - - - 5 2.8 m3 Phase II - -

5 1.7 m3 4 4.25 m3 4 1.7 m3 Phase I 4 1.1 m3

- - - - 4 1.7 m3 Phase II - -

1 D= 8 m 1 D= 12 m 1 D= 12 m Phase I 1 D= 6 m

- - - - - - - - -

2 D= 0.8 m 2 D= 1 m 2 D= 0.8 m Phase I 1 D= 0.7 m

- - - - 1 D= 0.8 m Phase II - -

1 D= 8 m 1 D= 11 m 1 D= 11 m Phase I 1 D= 6 m

- - - - - - - - -

1 A = 6.3 m2 1 A = 11 m2 1 A = 6.3 m2 Phase I 1 A = 3.2 m2

- - - - 1 A = 6.3 m2 Phase II - -

1 A = 8.45 m2 1 A = 16 m2 1 A = 8.45 m2 Phase I 1 A = 4 m2

- - - - 1 A = 8.45 m2 Phase II - -

Case 2.2

Mo concentrate dryer

Case 1.2 Case 1.3 Case 1.5

Third c leaner cell

Fourth cleaner cell

Intermediate thickener

Fifth cleaner cell

Mo concentrate thickener

Mo concentrate filter

Molybdemun

flotation

Rougher Flotation cell

Cu concentrate thickener

Cu concentrate filter

First Cleaner cell

Second cleaner cell

Area Equipment



231

18 PROJECT INFRASTRUCTURE

18.1 Vizcachitas Site

The Vizcachitas Property is located at approximately 32.41°S and 70.42°W in the western

foothills of the Andes at an average altitude of 2,100 masl. The central UTM coordinates are

6,413,600N and 366,200E (Datum PSAD56, Zone 19H). The Property is approximately 150 km

NE from Santiago and 46 km northeast of the town of Putaendo in the Province of San Felipe,

Valparaiso Region, Chile.



232

Figure 18-1: Vizcachitas Property Location

The Vizcachitas Project is sited close to extensive infrastructure systems such as road, rail and

port access, however as with all large projects of this type, the Project will require substantial

infrastructure which will be used to maintain operations.

Figure 18-2 shows the plot plan of the Project facilities.



233

Figure 18-2: Plot Plan Project Facilities



234

18.2 Process Water Supply

The process fresh water make-up requirements by case are presented on Table 18-1. This fresh

water is anticipated to serve the purposes of cleaner flotation, molybdenum flotation, gland seal

water, cooling, reagent mixing, and concentrate washing.

Table 18-1: Make-up Water Demand

Fresh water make-up is considered to be taken from the Rocin River as shown in Figure 18-3.

Table 18-2 shows the maximum flow rates (m3/s) for the Rocin River based on statistical

analysis in Resguardo de Los Patos approximately 25 km from the project site. Los Andes

Copper currently owns consumptive water rights for a fraction of the projected water

requirements with an extraction point located on the Aconcagua River approximately 80 km

away and will need to secure additional consumptive water rights to meet the final project option

selected and make that water available at the Project.

(m3 /d) (l/s)

1.2 57,286 663

1.3 114,572 1,326

57,286 663

114,572 1,326

2.2 28,644 332

CaseConsumption Fresh Water

1.5



235Figure 18-3: Water Supply Route



236

18.3 Rocin River Diversion Tunnel

The mine open pit and process plant location are located in the Rocin River path. It is necessary

to divert the watercourse and return it downstream of the Project installations. A tunnel of

approximately 9.5 km with a section of 5 m x 5 m and a slope of 1 % is considered for this

purpose. The tunnel design has considered a precipitation event associated with a return period

of 1 in 100 years of 200 m3/s, as shown in Table 18-2.

Figure 18-4 shows the diversion tunnel layout.



237

Figure 18-4: Tunnel Layout



238

Table 18-2: Average Daily Peak Water Flow by Month (m3 /s)

*

18.4 Power Supply

Two alternatives are envisioned for power supply depending on the power demand required.

Electrical power supply at 110 kV is feasible for cases requiring less than 100 MVA, whilst 220

kV supply is needed for cases requiring more than 100 MVA.

For 110 kV supply, the tap point would be the Las Vegas substation located south-west of the

project site. The prospective routing of the transmission line from Las Vegas to the project site is

shown in Figure 18-5. The overall transmission line length is 78.5 km. For 220 kV supply, the tap

point would be the Nogales substation located south-west of the project site. The prospective

routing of the transmission line from Nogales to the project site is shown in Figure 18-6. Theoverall transmission line length is 105 km.

Los Andes Copper contemplates the construction of a 29 MW run-of-river Hydro Electric Plant in

the Rocin River. This plant is expected to be built and in operation well before the construction of

the mine facilities.

Period

Return

(years)

APR MAY JUN JUL AGO SEP OCT NOV DIC JAN FEB MAR

2 1.6 2.0 2.4 2.4 3.2 4.1 14.7 24.4 17.3 10.0 5.7 3.9

5 2.7 3.7 5.4 6.1 7.6 7.8 25.0 45.0 41.9 23.0 11.0 6.5

10 3.6 5.3 8.6 11.1 12.9 11.0 31.8 58.7 66.6 35.5 15.6 8.6

25 4.9 8.1 15.0 23.3 24.0 15.7 40.4 75.9 109.0 56.5 22.6 11.4

50 6.0 10.9 22.0 39.8 37.1 19.9 46.7 88.7 149.9 76.2 28.8 13.8

100 7.3 14.3 31.7 67.2 56.3 24.5 53.1 101.4 199.6 99.8 35.7 16.3

Distribution LP LP LP LP LP LN Gumbel Gumbel LN LN LN LN

source: compiled from statistics fluviométrica DGA - 1950-2007



239

Figure 18-5: 110 kV Overhead Powerline Route (source: Google Earth, June, 2013)



240

Figure 18-6: 220 kV Overhead Powerline Route (source: Google Earth, June, 2013)

18.4.1 Site Electrical Power Distribution

The Vizcachitas main substation is located directly adjacent to the main process plant building.

From here medium voltage electrical power will be distributed to the concentrator and the rest of

the site at either 23 kV or 0.4 kV depending on the final user demand.

Table 18-3 summarizes the substations or transformers required for the distribution network at

220 kV (Cases 1.2, 1.3 and 1.5) and 110 kV (Case 2.2).

Table 18-3: Electrical System Requirements

The substation capacities were calculated considering 30 % extra capacity over the calculated

installed power for each case.

18.4.2 Rocin River Hydro Electric Generation

Los Andes Copper contemplate the construction of a 28.95 MW run of river Hydro Electric Plant.

The Hydro Electric Plant considers a 14-km covered canal with a design flow of 6.5 m3/sec,

leading to a 1.1 km penstock with a 510 m head. The generation unit considers 2 Pelton turbines

with capacities of 4.5 m3/sec and 2.0 m3/sec each. The total capital expenditures are estimated

at US$ 55,897,000 (net of VAT) and include a 110 kV transmission line to connect into the

national grid at the Las Vegas substation.

Case 1.2 Case 1.3 Case 1.3 Case2.2

100: MINE 6,210 42,049 42,049 3,105

200: CRUSHING 1,967 3,902 3,902 951

300: GRINDING 84,512 168,950 168,950 42,804

400: BULK FLOTATION 13,266 26,567 26,567 9,322

450: SELECTIVE FLOTATION 855 1,869 1,869 979

500: TAILING HANDLING 1135 2241 2241 594

600: CONCENTRATE HANDLING 22.2 22.2 22.2 45.1

800: WATER SUPPLY 7.4 7.4 7.4 7.4

900: POWER SUPPLY 14.8 14.8 14.8 14.81000: INFRASTRUCTURE 1,173 2,346 2,346 304

TOTAL 109,161 247,969 247,969 58,126

Installed Electric Power (kVA)AREA



241

The engineering design, layout and capital costs for the Hydro Electric Plant are taken from the

report titled Pre-feasibility Study Rio Rocin Hydro Electric Project dated April 12, 2013 (Carvallo,

2013)

The construction of the Hydro Electric Plant is expected to take place well in advance of the

development of the Vizcachitas Project. The Hydro Electric Plant is shown in figure 18-4 and will

supply power into the grid until the Vizcachitas mine and process plant is constructed.

The power line which is considered in the Hydro Electric Plant to connect to the national grid will

be upgraded to allow for the increased demand from the mine. The cost of the basic power line

has been included in the Hydro Electric Plant initial capital expenditures, and the additional

upgrade expenditures are included at the time of the mining capital expenditures. The mine

capital and technical considerations include the ability to receive power from either the HydroElectric Plant or the national grid.

The diversion channel, as shown in Figure 18-2 will run east of the mine and process plant.

Depending on the different mine development cases, the ultimate pits may interfere with the

channel. At that time, the Hydro Electric Plant would switch to process the water flows through

the river diversion tunnel that is required for the development of the mine as further described in

Section 18.3. Additionally, depending on the mine development cases considered, the location

of the waste dumps and the schedule of waste accumulation will require the reinforcement of

certain sections of the diversion channel.

18.5 Process Plant Earthworks

The cubic metres of excavation and fill vary according to phase and case. Estimated values are

presented in Table 18-4.

Table 18-4: Excavation and Fill per Case

Excavation Fill Excavation Fill

(m3) (m3) (m3) (m3)

1.2 594,000 467,000 - -1.3 989,000 778,000 - -

1.5 594,000 467,000 395,597 311,040

2.2 620,000 258,000 - -

Case

Phase I Phase II



242

18.6 Tailings Storage Facility

The mineral extraction processes are grinding and flotation; this process produces copper and

molybdenum concentrates and tailings. The flotation tailings should be chemically benign and

are anticipated to be non-acid generating.

Various disposal options and configurations were considered for the siting of the tailings storage

facility (TSF). Based on field reconnaissance, Alquimia recommended a valley located 23 km

northwest of the process plant, which has an approximate storage volume of 900 Mt. The

location is shown in Figure 18-7.

Table 18-5 shows TSF capacity in years. A secondary TSF location will be identified for any

production exceeding this TSF capacity and cost of development of the secondary TSF hasbeen included in the capital estimate. There are various possible locations within a 30 km radius

of the proposed TSF.

Table 18-5: TSF Capacity

Proyect Life TSF Life

(Years) (Years)

1.2 40 30

1.3 28 16

1.5 30 18

2.2 40 40

Case



243

Figure 18-7: Tailing Storage Facility Location (source: Google Earth, June, 2013)

18.6.1 Tailings Storage Facility Design

The impoundment volume is confined by natural hills and the raised embankment is constructed

as the southern downstream face.

The disposal operation is by means of a raised embankment built of classified tailings material.

Classification is through a cyclone cluster where material is separated into coarse material used

for embankment construction and fine material or slimes, deposited in the tailings impoundment

area.



244

Figure 18-8: Raised Embankment Location (source: Google Earth, June, 2013)

The outer face of the embankment is constructed with 4:1 (H:V) slope in order to optimize the

wall disposal distribution and at the same time meet the safety and stability requirements set byChile’s National Service of Geology and Mining or “Servicio Nacional de Geología y Minería” inSpanish (SERNAGEOMIN). The internal wall is constructed with 2:1 (H:V) slope. The

embankment crest width will be 30 m.

A rockfill starter dam is planned to ensure there is sufficient capacity for the fine fraction of the

cyclone tailings during normal operation and whole tailings overflow during construction of the

sand dam. The starter dam is anticipated to ensure a minimum deposition period of 20 days,

with a maximum total freeboard of 1.5 m. The upstream face of the starter embankment is

constructed with a 2:1 (H:V) slope, while the downstream face has a 1.75:1 (H:V) slope.

The upstream face of the starter dam is expected to be lined with a HPDE layer to ensure initial

containment of tailings and free water until the tailings beach is established and the decant pool

is pushed to the back of the impoundment.

The starter dam design must ensure embankment stability, considering that this is the point

which concentrates stresses.



245

At the end of the TSF operational life, a footwall will be constructed in order to avoid

embankment material overtopping the design level. This wall is constructed with material similar

to the starter dam, with a trapezoidal section of 45°.

18.6.2 Underdrain System

To ensure tailings storage facility stability and avoid embankment liquefaction, a drainage

system is envisioned. Water that drains from the slimes is collected and returned to the process

plant for reuse. The embankment is raised in lifts of compacted, cycloned tailings while the

tailings storage facility is filled with the fine slimes material. As the embankment height

increases, its footprint expands downstream necessitating phased expansion of the underdrain

system.



246

Figure 18-9: Water Reclaim System (source: Google Earth, June, 2013)

18.6.3 TSF Diversion Channel

The TSF is located in a valley so a water diversion channel is required in order to avoid rain and

other fresh water contact with tailings. The design of the channel considers a precipitation level

associated with a return period of 1 in 100 years.

18.6.4 Tailings Transport System

The process plant tailings flow by gravity to the TSF through a HDPE pipeline of about 24.5 km

length, following the ridge that delimits the TSF. Figure 18-10 illustrates the pipeline route

considered.

Figure 18-10: Slurry Pipeline Route (source: Google Earth, June, 2013)

18.6.5 TSF Reclaim Water System

Tailings water will be reclaimed from the TSF from a natural ponding location that is expected to

be on the north edge of the facility. Water reclamation will use a floating pump to deliver the

water to the reclaimed water tank. Drainage embankment water is also discharged to this

reclaimed water tank.



247

Figure 18-9 illustrates this installation.

All reclaimed water is pumped back to the process plant by a pipeline that follows the same

route as the slurry pipeline. This is as illustrated in Figure 18-10. Centrifugal pumps are used for

pumping the reclaimed water back to the plant.

It is anticipated that there will be a significant quantity of water lost to interstitial water retained in

the settled tailings, as well as water lost to evaporation and seepage from the TSF. This has

been accounted for in the project water balance.

18.7 Roads

18.7.1 Access Road

The project site is accessible from the village of Resguardo de Los Patos via a 24 km long and 3

m wide gravel road. This road will be improved and widened to 9 m to allow construction and

capital equipment and ongoing operations supplies to be safely delivered to site.

The road between the TSF and the process plant envisages the improvement of and extension

by 5.22 km of the current Chacrillas Reservoir road, widening it from the current 5 m to 9 m. A

new road of 6.1 km length will be built with the same characteristics to connect with the actual

acces road that also needs to be improved for another 8.4 km. This last section considers abridge to cross Rio Hidalgo for light vehicle transfer. Figure 18-11 illustrates the proposed road

access.



248

Figure 18-11: Access Road Network (source: Google Earth, June, 2013)

18.7.2 Site Roads

5,600 metres of onsite roads were considered in this PEA study.

18.8 Concentrate Storage, Loading and Transport

Copper concentrate will be stockpiled in an enclosed storage area of varying capacity for each

case. The concentrate will be loaded into trucks and then transported to a train loading facility

located 55 km to the south-west at the Ferrocarril del Pacífico S.A. railway line. Here

concentrate will be loaded into trains to be delivered to Ventanas Port.

The facility consists of an enclosed building where the copper concentrate, transported by trucks

is discharged into a hopper and then loaded directly to the train by a belt conveyor system.



249

18.9 Ventanas Port Facilities

Copper concentrate will be unloaded at Ventanas port which currently handles copper

concentrate volumes from other mining operations. In 2010, Ventanas handled a total of over

600,000 tonnes of copper concentrate for Anglo American, Codelco and others (source: CESCO

2011). Concentrate storage facilities as well as the ship loading system may need to be

upgraded or expanded. The cost for these facilities was not calculated in this PEA study.

18.10 Site Accommodation

No installation is provided for a permanent camp. Project staff will use daily trasportation from

San Felipe and Putaendo.

The following infrastructure is considered for operations staff:

Dining hall

Change house

Warehouse and laboratories.

18.11 Fuel Storage

Fuel storage consists of a horizontal cylindrical metal tank with 75,000 litre capacity, made ofcarbon steel. The storage facility will be located in a bunded area with a spillage containment

capacity of 110 % of the tank volume. The fuel storage area will be clearly marked and will have

a perimeter fence 1.8 m high, and fire extinguishers. The depot will be managed by a fuel

supplier.

18.12 Potable Water Supply

Potable water will be provided in sealed containers by a company approved by the health

authority. Potable water will meet all the requirements of Chilean standard NCh 409.

18.13 Ancillary Site Buildings and Facilities

Various ancillary facilities will be located near the process plant. The buildings and facilities

include the following:

Administration building

Assay and metallurgical laboratory facilities



250

Change house for personnel

First aid or clinic building

Gatehouse at the entrance to site

Concentrator warehouse and an attached workshop building

Potable water system

Sewage treatment plant

Mine ancillary facilities will be located near the primary crusher. These facilities include:

Warehouse with offices

Heavy vehicle workshop

Tire shop

Maintenance and welding shop

Truck wash bay

Fuel storage depot

Effluent treatment facility

Mine explosives storage facility

Various ancillary facilities will be located near the TSF. The buildings and facilities include the

following:

Administration building

Change house for personnel

Gatehouse at the entrance to site

Potable water system

Sewage treatment plant



251

Commercially available packaged sewage treatment plants will be installed at the main

concentrator facilities, the mine support facilities, and TSF. Effluent will need to meet Chilean

regulations for discharge, or undergo additional treatment until it does. Technical details will be

developed during the next phases of project development.



252

19 MARKETING STUDIES AND CONTRACTS

19.1 Introduction & Scope

For this marketing assessment, assumptions are based on metallurgical data with respect to the

copper and molybdenum characteristics of the Vizcachitas concentrates. The comment and

outlook on concentrate marketability and related smelter charges, including treatment, refining,

penalty details, payment timing, metal accountability, and other contract terms, are based on

current market understanding and use of data available in the public domain. As the Project

progresses through the next phases of development, it is recommended that further review be

made of market conditions and conclusions drawn as required.

19.2 Refined Copper Market

In forecasting refined copper supply-demand market, one must recognize the risks of long-term

projections, given the fact that projects have not been committed or are in the possible or

probable stage or at an early stage of construction. This has been particularly evident in recent

times with stalled economic growth and other turmoil, driving copper price down from highs of

close to $4.00 /lb. in 2012 to levels close to $3.1 /lb. at the time of writing this Report. Some

analysts expect that Chinese growth of approximately 7.7 % in 2013 (The World Bank, 2013),

followed by Indian and Brazilian demand will stabilise copper price and that the current decrease

in European demand will tend to reach a neutral demand point.

In recent years, the timeline for mine development has become longer due to more exhaustive

environmental and socio-economic issues and for any major project a lead development time of

8 to 10 years is not unusual. In consequence, the forecasts for the development lead time of

expected projects at various stages in the pipeline present limited potential for supply surprises

on the upside. At the beginning of the current decade, the expectation was that new mine

development would add substantial copper supply to the market, but in practice this did not

happen. Reasons included greater focus on environmental and socio-economic issues and

rising capital and operating costs, which pushed up the copper price requirement to make these

projects viable. This, coupled with the world financial crisis in 2008-2009, all contributed to

project development disruptions.

In the longer run, strong copper demand growth prospects are based on expected resource

intensive use in economies such as China, India and other developing countries, and are

associated with investment in power distribution networks and other infrastructure development.

China today consumes about 40 % of the world’s refined copper, and it is expected to con tinue

to grow and may rise to over 50 % by 2022.



253

Reflecting the market situation and escalation of production costs, copper prices are currently in

the range of $ 7,000 to 7,500 a tonne ($US 3.125 – 3.35 / lb.); about three times higher than the

average level through the 1990’s.

Prices could remain near current levels as long as production growth continues to under-perform

against the underlying demand trend creating a need to ration supplies. Based on this type of

forecast it seems logical to use a fluctuating copper price looking to the future as there is every

indication that inflation will again become a factor.

Table 19-1: Outlook for the Copper Price

19.3 Copper Concentrate Market Outlook

Global copper concentrate production in 2012 was approximately 13.8 million tonnes of

contained copper or about four fifths of total newly-mined copper production of 16.9 million

tonnes. (source: International Copper Study Group, The World Copper Factbook, 2012)

The balance of 20 % newly-mined copper comes from SX-EW electrowon copper cathode and

other copper-bearing by-products.

Concentrate supplies are expected to increase particularly over 2013 - 2018 as a result of new

projects now in the advanced feasibility and development stage and announced expansions of

operational mines. Figure 19-1 illustrates the supply / demand balance in the coming years.

2013 2014 2015 2016 2017 2018

SocGen (July 2013) 337 311 295 272 295 318TD Securities (May 2013) 343 325 - - - -

UBS (July 2013) 345 286 - - - -

World Bank (July 2013) 322 320 318 317 316 315

IMF (March 2013) 354 356 358 361 363 363

EIU (July 2013) 339 348 361 370 380 -

Cochilco (July 2013) 327 315 - - - -

Average 338 323 333 330 339 332

EntitycUSD/lb



254

Figure 19-1: Market Balance 2013 – 2017 (source: Codelco April 2013 update)

Over the next ten years further increases in mine production and developments are expected in

higher risk countries such as Kazakhstan, Afghanistan and the DRC.

The copper concentrate market has seen recent significant structural imbalances between mine

production and smelting capacities. By the middle of the decade, if all new project and

expansion plans are met, there will be a surplus of concentrates. This, in theory, could last for

several years, increasing smelter Treatment and Refining charges (TC/RC’s). Such increasing

charges will also be the result of increased costs on the smelter side.

Imbalances between concentrate supply and demand are not unusual and are heavily influenced

by different lead times to construct for instance mines outside China and smelters in China,

where the latter can be brought on line in three to four years whilst mines generally have a

longer development lead time.



255

Custom smelter capacity is expected to grow significantly in the latter part of the decade to meet

increased refined copper demand, particularly in China and India. More than fifty percent of

global custom smelting capacity is expected will be located in China in 10 years ’ time.

Domestic demand for copper in China and India as well as elsewhere in Asia is pointing towards

new smelting capacity largely being built in these areas. The effect will be that that smelter

development is market driven to meet such domestic demand.

19.4 Treatment and Refining Charges

The following long-term smelter charges have been assumed for evaluation of Vizcachitas

concentrates.

Table 19-2: Concentrates - Commercial Terms Assumptions (Coffey, June, 2013)

Notes:

1. It is often the case that where a percentage payment for payable metals is applied it is often

subject to a minimum deduction. In the case of copper a 96.5 % is applied, for concentrates

grading below 28.57 % Cu a further 1 % of concentrate grade is deducted.

It should be noted that delivery of concentrates is on the basis of CIF-FO (Cost, Insurance and

Freight, Free Out) smelter ports. Therefore the mine must bear the cost of delivering the

concentrates to the receiving smelter’s port, and the buyer is responsible for unloading the cargo

and the cost thereof.

Payable Metals Recommendation

Copper payable (%) ( min. ded. 1unit) 96.5

Commercial terms Recommendation

Concentrate TC ( US$/dmt ) 85

Copper RC ( US$/lb payable ) 0.085

Copper PP (%) 0

Ocean Freight ( US$/dmt ) 76



256

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

20.1 Introduction

The environmental studies and permitting that are necessary to advance the Project can be

divided into those studies that are required to complete the pre-feasibility and feasibility studies

and those that will be needed to construct and operate the mine.

It will be necessary to carry out further infill, metallurgical and condemnation drilling to complete

the pre-feasibility and feasibility studies. To carry out this drilling an Environmental Impact

Statement or “Declaraciones de Impacto Ambiental” in Spanish (DIA) is very likely to be

required.

For the construction and operation of the mine, further environmental studies and permissions

would be necessary. These would include an Environmental Impact Study or “Estudio de

Impacto Ambiental” in Spanish (EIA), Environmental sectorial permits and an approved mine

closure plan will also be required.

20.2 Historical Environmental Information

As part of the “Initial Feasibility Study” completed by General Minerals , an environmental

baseline was developed in 1998 by Ingeniería y Geología Dos Limitada (INGEDOS). The 169-

page report studied the vegetation, vertebrate terrestrial animals, invertebrate aquatic animals

and vertebrate aquatic animals. A total of 169 plant species were identified of which 69 % are

indigenous. Out of a possible total of 243 vertebrate species, only 56 were identified in the area

of the study. This low ratio is probably due to the pre-existing roads in the area and the fact that

the study was completed at the end of winter. Two non-indigenous fish species were identified in

the Rocin River (INGEDOS 1998).

In 2007, an environmental baseline study was carried by Jaime Illanes y Asociados to support a

DIA submitted in 2008. The study identified 49 species of flora and 2 species of reptile in the

area. Bibliographic review estimated the presence of 24 species of birds and 8 species of

mammals, 6 of which have conservation issues, including Lama Guanicoe.

A DIA was submitted by Los Andes Copper on February 22, 2008 to the environmental authority

at that time, Chile’s National Environmental Commission or “ Corporación Nacional del Medio

Ambiente” in Spanish (CONAMA). CONAMA denied the permit on October 23, 2008 based on 4

main points:

There was no adequate road between Casablanca and Resguardo de Los Patos



257

The project contingency plan was inadequate

The river crossings had been made without the correct DGA approvals

The project may unduly impact the touristic value of the area.

Los Andes Copper has indicated that the reasons given in 2008 have either been addressed or

are no longer valid. Los Andes Copper does not foresee major problems when submitting an

updated DIA.

20.3 Legal Framework for Environmental Studies

Chile has well defined processes and frameworks within which environmental impact studies

must be developed. A summarized list of the key legislation which must be considered is as

follows:

Political Constitution of the Republic

The regulations of the Environmental Evaluation Department or “Servicio de Evaluación

Ambiental ” in Spanish (SEA)

General environmental bases, including International Labour Organization 169,

participation of indigenous communities

Environmental Regulations for:

o Emissions to the atmosphere and air quality

o Liquid and solid waste

o Dangerous substances

o Cultural heritage

o Labour conditions

o Transport safety.

In addition to the Environmental Qualification Resolution or “ Resolución de Calificación

Ambiental ” in Spanish (RCA), a project must also comply with a number of environmental and

sectorial permits before it can operate.

Sectorial environmental permits are those permits or resolutions issued by a State

Administration entity, which because of their environmental content are listed in the



258

Environmental Impact Assessment System regulations. These permits must be issued for all

projects and activities submitted to the SEA.

Within the sectorial permits the key permissions are those of SERNAGEOMIN and the

Department of Water or “Dirección General de Aguas“ in Spanish (DGA). Both of these permits

can take up to 12 months or more to approve and this should be accounted for in project

planning.

DGA approvals are important when scheduling the permitting process for the Project, at least

two permits from the DGA are required: approval of the water works (tailings dam) and water

course intervention (Rocin River diversion tunnel).

SERNAGEOMIN provides the overall blanket operating permit. The sectorial permit approvalrequires the completion of a mine closure plan.

Environmental baseline studies will meet the current Chilean legislation including the

International Labour Organisation recommendation 169, which defines the rights and levels of

participation required from any indigenous stakeholders within the direct or indirect impact area

of the Project. The Chilean government has National Indigenous Development Corporation or

“Corporación Nacional de Desarrollo Indígena” in Spanish (CONADI) which works with both the

property owner and the local indigenous population to ensure that their rights and participation in

the environmental permitting process are correctly considered.

20.4 Future Environmental Studies

These studies can be subdivided up into those studies required to complete the pre-feasibility

and feasibility studies and those that will be required to construct and operate the mine.

20.4.1 Studies Required to Complete the Pre-feasibility and Feasibility Studies.

To complete a pre-feasibility or feasibility study further drilling and possible bulk sampling will be

needed. Under Chilean law to carry out intensive drilling to define projects as opposed to

exploration drilling it is necessary to submit a DIA to the SEA for approval. Los Andes Copper

will prepare and submit a DIA for the proposed drilling that needs to be carried out in the areas

of the mine, plant and infrastructure.

20.4.2 Studies Required to Construct and Operate the Mine.

Base Line Studies

The formal base line studies and environmental data compilation around the Property must be

extended or initiated in order to support an EIA application. The base line studies must be



259

carried out over at least one full year to ensure that the fauna and flora can be studied in all

seasons. For this reason, these studies would normally be completed during pre-feasibility and

feasibility phases. The studies correspond mainly to existing information review, analysis and

development of documents to comply with environmental regulations. In addition to natural

environmental data collection, the engineering completed during the pre-feasibility and feasibility

studies is used to support project robustness and detail specific engineering requirements

needed by the environmental services. Los Andes Copper will retain the services of a

recognised independent environmental consultancy to complete the baseline studies and all

associated work required to prepare the environmental impact assessment application.

Gap Analysis

Gap analysis will gather all environmental background information available for the Project. Thisidentifies the studies needed to be completed, updated or revised according to the

requirements o f t h e different governmental author ities’ regulations or requirements.

It is important that Los Andes Copper characterizes the local and regional hydrological,

hydrogeological a n d water quali ty conditions i n compliance wi th Chilean regulations. This

will involve field activities such as drilling of wells or sample taking from surface water

sources. Water supply permitting issues will require a d d i t i o na l activities related with the

review of legal information and comparing it with engineering needs.

Environmental Permitting Conceptual Requirements

Los Andes Copper will need to identify the environmental permits associated with the different

potential impacts for the whole lifecycle of the Project (design, construction, operation, closure).

Environmental Baseline Update/Completion

After carrying out the gap analysis, further studies may be identified for components of the

Environmental Baseline (including: flora, fauna, archaeology and others). Potential project

impacts will need to be evaluated to determine which studies must be completed and which

require additional information. Los Andes Copper will have to consider fieldwork gathering data

of the environmental components and some office work to develop the reports for the studieswhich will be part of the file to be presented to the SEA.

Closure and Abandonment Stage

In Chile, there are clear and precise rules regarding the closure of mining facilities (Regulation

on Mine Safety No. 72. section 5), which indicate the activities required to carry out the closure

of a mining project. The following summarises the objectives of the Regulation:



260

Ensure that the remaining facilities will not affect human health or degrade the

environment.

Ensure maintenance of physical stability and that the areas affected by mining activities

are in stable condition at mine closure.

Ensure the maintenance of stability associated with chemicals in the long term, in order to

reduce effects on biological diversity and to avoid endangering public health and safety.

Ensure environmental components, both surface and underground are not affected as a

result of the closure (water, air, soil, etc.)



261

21 CAPITAL AND OPERATING COSTS

The capital and operating cost estimates were developed in Chilean Pesos (CLP) and United

States dollars (USD) according to source currency of costs. The exchange rate (CLP/USD) used

is 480. All costs are estimated as of the Effective Date of this Technical Report. All cost

projections are presented on a nominal dollar basis.

21.1 Capital Cost Estimate

Capital cost estimates were prepared as detailed in Section 17.7 and are composed of the

following:

Direct cost of construction and assembly: Acquisitions of equipment supply, labour,auxiliary equipment for construction and building materials are considered.

Indirect project costs: Transportation and equipment insurance, general spare parts,

vendor’s representatives, detailed engineering, EPCM, start up and owner costs are

considered.

Contingency estimation based on Direct Cost plus Indirect Cost.

Sustaining capital is defined as that required to maintain operations and may include

capital spent on expansion or new infrastructure items such as tailings dam.

Deferred capital is that required to complete an expansion in the mine and process plant.

Table 21-1 summarizes initial, deferred and sustaining capital cost requirements.



262

Table 21-1: Capital Cost Estimate (Nominal values)

Direct costs were estimated using:

Material take-offs (MTOs) based on preliminary layouts, process flow diagrams, and

topographic information

Historical data

Allowances based on similar projects

The capital expenditures associated with the construction of the Hydro Electric Plant are US$

55,897,000 (net of VAT). The cash flow generated by such plant prior to and during the

construction of the mine Project - net of US$ 13,590,000 (net of VAT) of assumed redundant

investments that the mining project would have to incur - is expected to exceed the capital

DeferredCapital Cost



kUSD

Direct Cost 1,278,120 1,845,496 1,278,095 912,035 695,760

Diversion Rocin River 86,077 86,077 86,077 86,077 0

Access 16,105 19,325 16,105 14,817 9,660

Bridges 50,000 50,000 50,000 50,000 0

General Facilities 41,450 50,343 39,589 37,089 16,660

Mine 424,305 566,776 372,930 288,655 203,397

Process Plant 329,506 626,070 335,879 205,738 305,789

Tailings Storage Facility 39,276 56,299 39,496 32,237 7,052

Tailings Transport System 96,192 117,815 96,192 74,311 90,370

Water Reclaim System 51,876 73,780 51,706 40,789 51,706

Water Supply System 12,956 22,351 13,461 6,374 11,125

Power Supply System 130,376 176,660 176,660 75,948 0

Indirect Costs 264,539 381,971 264,534 188,768 144,005

Contingency 462,798 668,240 462,789 330,241 251,929

Sustaining Capital 538,313 717,926 591,049 193,442 0

Tailings Storage Facility 39,276 67,654 50,034 0 0

Tailings Transport System 96,192 141,578 121,858 0 0

Water Reclaim System 51,876 88,661 65,502 0 0

Mine 350,968 420,033 353,655 193,442 0

Total Capital Costs 2,543,768 3,613,633 2,596,466 1,624,486 1,091,694

Description

Initial Capital Cost

kUSD



263

expenditures of the Hydro Electric Plant. As a result, the capital costs associated with the Hydro

Electric Plant have not been included in the capital cost of the mine Project.Indirect Costs

Table 21-2 shows the main estimation basis by area and Table 21-3 shows unit construction

costs considered.

Table 21-2: Estimation Basis by Area

MTO PriceMine

Mine Works Calculated Calculated/Factorized

Mine Equipment Calculated Data Base

Workshops Expert Judge Data Base

Infrastructure Expert Judge Calculated/FactorizedBuilding Expert Judge Data Base

Power Supply Calculated Data Base

Process Plant

Process Equipment Calculated Data Base

Infrastructure Factorized Data Base

Building Factorized Calculated/Factorized

Civil Works Factorized Data Base

Power Supply Calculated Calculated/Factorized

Tailings Storage Facility

Civil Works Calculated Data Base

Piping Calculated Calculated/Factorized

Infrastructure Calculated Calculated/Factorized

Contour Channels Calculated Data Base

Building Factorized Data Base

Support Equipment Factorized Data Base

Power Supply Calculated Calculated/Factorized

Infrastructure

Power Supply Calculated Data Base

Mine/Plant Water Supply Calculated Calculated/Factorized

Train Loading Station Factorized Calculated/Factorized

Contour Channels Factorized Calculated/Factorized

Building Factorized Data Base

Support Equipment Factorized Data Base

Infrastructure Expert Judge Expert Judge

AreaCost Estimation



264

Table 21-3: Unit Construction Values

21.1.1 Indirect Costs

Lump sum allowances or factors have been used to calculate indirect costs as is typical for a

PEA. At this level, many of the resourcing and contract strategies are not defined, so reasonableand customary assumptions have been made based on experience on similar projects. Table

21-4 shows detailed indirect costs.

Table 21-4: Indirect Costs Detail (Nominal values)

21.1.2 Contingency

Contingency is an allowance to cover unforeseeable costs that may arise during project

execution, which are 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.

Contingency does not cover scope changes or project exclusions. After an assessment by

Coffey of project confidence versus uncertainty by area, an overall average contingency of 30 %

Area Price UnitConcrete 850 US$/m3

Metallic Structure 7,000 US$/t

Piping 6 US$/kg

Rock Excavation 15 US$/m3

Soil Excavation 5 US$/m3

Filling 10 US$/m3



kUSD

Indirect CostsFreight and Insurance 30,675 44,292 30,674 21,889 16,698

Import Duties 15,337 22,146 15,337 10,944 8,349

Spare Parts 25,562 36,910 25,562 18,241 13,915

Vendor Representatives 6,710 9,689 6,710 4,788 3,653

EPCM 132,573 191,424 132,570 94,601 72,168

Start Up 28,119 40,601 28,118 20,065 15,307

Owner Cost 25,562 36,910 25,562 18,241 13,915

Total Indirect Costs 264,539 381,971 264,534 188,768 144,005

Initial InvestmentDeferred

Investment

Description

kUSD



265

has been included in the initial capital cost. This contingency is based on the level of definition

that was used to prepare the estimate.

21.1.3 Accuracy

This estimate 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 of

+/-35 %. This is based on the level of contingency applied, the confidence levels of the authors

in their respective estimates, and an assessment comparing this estimate to standard accuracy

levels on PEA estimates.

21.1.4 Estimate Exclusions

The following items are not included in the capital estimate:

Costs incurred prior to completion of a Feasibility Study (FS)

All Owner’s taxes, including any financial transaction tax, withholding tax, or value-added

tax (VAT)

Future foreign currency exchange rate fluctuations

Interest and financing costs

Escalation beyond second-quarter 2013

Risk due to political upheaval, government policy changes, labor disputes, permitting

delays, weather delays, or any other force majeure occurrences.

21.2 Operating Cost Estimates

Operating costs have been estimated for the operating areas of Mining, Process Plant,

Infrastructure and Administration. Costs were reported under subheadings related to the function

of each of the areas identified.

The operating cost estimates were based on energy prices of 0.12USD /kWh for electricity and

1.20 USD/l for diesel fuel. Table 21-10 summarizes annual operating cost by area, as well as

average unit operating cost. Labour costs for mine and process plant consider only up to

Superintendent level and all superior positions are considered as administration costs.



266

The operating costs are considered to have accuracy of ± 35 %, based on the assumptions

listed in this section of the Report. All unitary operating costs are expressed in processed

tonnes.

All estimates have been completed for Life of Mine or a maximum of 40 years of operation.Table

21-5 shows estimation period by case.

Table 21-5: Estimation Period by Case

Table 22-6 and Table 22-7 summarize operating costs requirement.

Table 21-6: Total Operating Costs (Nominal values)

Table 21-7: Unit Operating Costs ($/ t plant feed; nominal values)

21.2.1 Mining Operating Cost

Mine operating costs are based on owner mining and cover the following:



LOM

(40 years)

LOM

(28 years)

LOM

(30 years) 40 years



Mine 3,152,883 3,701,566 3,957,754 1,774,595

Plant 9,204,176 12,052,449 12,128,101 4,642,347

Infraestructure 660,817 726,499 815,257 277,156 Administration 1,294,721 1,593,319 1,628,647 655,609

Total 14,312,598 18,073,832 18,529,761 7,349,707

Description

kUSD



Mine 2.51 2.22 2.38 2.84

Plant 7.32 7.23 7.28 7.42

Infraestructure 0.53 0.44 0.49 0.44

Administration 1.03 0.96 0.98 1.05

Total 11.38 10.85 11.12 11.75

Description

USD / tonnes



267

Pit operations: Drilling, blasting, loading, and hauling

Construction and maintenance of: mine haul roads, sumps, and safety berms

Placement of waste rock in the WRSF’s

Operating and maintenance labour

Mine department supervision and technical services

Crushing waste rock to supply aggregate for road surfacing and blast-hole stemming; and

other earthworks as may be required for day-to-day mining operations

The mine production schedule and equipment unit productivity estimates were used to calculate

operating shifts and manpower requirements, which in turn were used to derive mine operating

costs. Exploration costs are not included in the operating cost estimates.

Unit operating costs for major equipment include: labour, energy, diesel, lubricant consumption,

tyres, materials, spare parts, third party services and others. These operating costs were

adjusted for local labour rates and supply costs, while tracking recent experience for projects

with similar fleets.

Table 21-8 and Table 21-9 show mine operating costs by expense item.

Table 21-8: Mine Operating Costs by Expense Item (Nominal values)



Labour 424,720 372,220 444,540 369,415

Diesel 1,147,536 1,159,016 1,507,693 612,099

Energy 0 115,444 0 0

Lubricant 36,471 33,346 35,726 21,313

Tyres 257,252 372,891 242,702 22,830

Materials 49,333 38,361 72,370 26,610

Spare parts 216,138 221,183 233,279 165,239

Third party services 610,188 905,216 905,216 325,620

Other 411,246 483,888 516,229 231,469

Total 3,152,883 3,701,566 3,957,754 1,774,595

Description

kUSD



268

Table 21-9: Mine Unit Operating Costs by Expense Item (Nominal values)

21.2.2 Process Plant Operating Cost

Process plant operating costs were developed covering the following unitary operations:

Primary crushing and stockpile

Grinding

Copper-molybdenum bulk flotation

Molybdenum flotation

Thickening of concentrates and tails

Filtering

Concentrates handling

Unit operating costs incorporate: labour, energy, materials, spare parts, third party services and

others. These operating costs were adjusted for local labour rates and supply costs, whiletracking recent experience for projects with similar equipment. Table 21-10 and Table 21-11

show operating costs for the process plant by expense item.

Case 1.2 Case 1.3 Case 1.5 Case 2.288 ktpd 176 ktpd 88-176 ktpd 44 ktpd

Labour 0.34 0.22 0.27 0.59

Diesel 0.91 0.70 0.90 0.98

Energy 0.00 0.07 0.00 0.00

Lubricant 0.03 0.02 0.02 0.03

Tyres 0.20 0.22 0.15 0.04

Materials 0.04 0.02 0.04 0.04

Spare parts 0.17 0.13 0.14 0.26

Third party services 0.49 0.54 0.54 0.52

Other 0.33 0.29 0.31 0.37Total 2.51 2.22 2.38 2.84

Description

USD / tonnes



269

Table 21-10: Process Plant Operating Cost by Expense Item (Nominal values)

Table 21-11: Process Plant Unit Operating Cost by Expense Item (Nominal values)

21.2.3 Infrastructure and Administration

Infrastructure operating costs were developed considering the following areas:

Tailings storage facility

Tailings transport

Water supply

Power supply

Administration buildings

Others


Labour 1,187,944 1,183,633 1,225,937 701,166

Energy 2,617,144 3,776,912 3,775,570 1,185,271

Materials 2,888,904 3,818,655 3,827,540 1,429,605

Spare parts 1,067,785 1,425,282 1,435,288 566,629

Third party services 983,454 1,259,977 1,270,750 517,961

Other 458,945 587,989 593,017 241,715

Total 9,204,176 12,052,449 12,128,101 4,642,347

kUSD

Description



Labour 0.94 0.71 0.74 1.12

Energy 2.08 2.27 2.27 1.90

Materials 2.30 2.29 2.30 2.29

Spare parts 0.85 0.86 0.86 0.91


Other 0.36 0.35 0.36 0.39

Total 7.32 7.23 7.28 7.42

Description

USD / tonnes



270

Table 21-12 and Table 21-13 show infrastructure and administration costs by expense item.

Table 21-12: Infrastructure and Administration Operating Costs by Expense Item (Nominal values)

Table 21-13: Infrastructure and Administration Unit Operating Costs by Expense Item (Nominal values)

21.2.4 C-1 Cash Costs (Net of credits)

The C-1 cash costs were calculated using the economic model cash flow forecast values:

Total operating costs

Royalty costs including Mining Royalty and third party NSR



Administration 1,347,527 1,675,543 1,719,310 714,537

Infrastructure 608,011 644,275 724,595 218,228

Labour 75,109 59,341 68,193 36,486

Energy 299,014 342,033 384,652 82,106

Materials 0 0 0 0Spare parts 131,440 138,461 154,717 55,522

Third party services 69,851 71,209 79,795 30,077

Other 32,597 33,231 37,238 14,036

Total 1,955,538 2,319,817 2,443,905 932,765

Description

kUSD



Administration 1.07 1.01 1.03 1.14

Infrastructure 0.48 0.39 0.43 0.35

Labour 0.06 0.04 0.04 0.06

Energy 0.24 0.21 0.23 0.13

Materials 0.00 0.00 0.00 0.00

Spare parts 0.10 0.08 0.09 0.09


Other 0.03 0.02 0.02 0.02

Total 1.55 1.39 1.47 1.49

Description

USD / Processed tonnes



271

Treatment costs, refining costs, and transportation costs (i.e., third party rail fee, port

handling, and ocean freight)

Revenue from molybdenum

To calculate the cash cost per pound of copper, total expenses (operating, NSR / royalty, and

TCs, RCs, and transportation) less total revenue from Mo were divided by the number of pounds

of copper to be sold over life of mine. Average life of mine cash cost are shown in Table 21-14.

Table 21-14: Average Cash Costs



Operating Costs kUSD 14,312,598 18,073,832 18,529,761 7,349,707

NSR kUSD 418,023 532,994 532,835 219,906

Royalty kUSD 235,131 302,604 276,190 120,041

TC / RC kUSD 2,618,882 3,334,422 3,333,947 1,402,102

Transportation kUSD 754,446 960,579 960,442 403,917

Total Cash Cost w/o Credits kUSD 17,584,634 22,243,853 22,672,733 9,091,756

Molybdenum Credit kUSD 2,794,709 3,598,848 3,593,860 1,287,605

Total Cash Cost w/ Credits kUSD 14,789,925 18,645,004 19,078,873 7,804,152

Total Copper to be Sold Mlb 8,671,793 11,041,133 11,039,560 4,642,722

Average Cu Cash Cost w/o Mo Credit USD/lb 2.03 2.01 2.05 1.96

Average Cu Cash Cost w/ Mo Credit USD/lb 1.71 1.69 1.73 1.68

UnitDescription





273

where an expansion has been considered a further 5 % of the direct capital assigned to process

plant capital cost has been added.

Chilean legislation allows that the estimated cost for closure can be guaranteed by:

Cash lodged in a bank account

Bank guarantee or

Standby Letter of Credit issued by a Bank with a minimum of A rating

The model has assumed that one of the latter 2 mechanisms will be used and has applied the

estimated closure costs in the last year of operation and two years post closure.

22.2 Financial Model Parameters

The base-case discount rate is 8 %. Chile is a politically stable country and the Vizcachitas

Project has the same technical features as many other projects or operations in Chile. The major

sources of financial uncertainties are metal price and cost escalation.

NPV has been calculated to the annual period prior to initial mining capital expenditure,

considered as Period 1.

The exchange rate is not a direct input in the financial model since all the input costs areconverted to United States dollars. However, a significant part of the cost will actually be in

Chilean pesos (CLP) and Coffey applied an exchange rate of 480 pesos per dollar in the cost

estimation.

Since the analysis is based on a cash flow estimate, it should be expected that actual economic

results might vary from these results. The PEA has been completed to a level of accuracy of ±

35 %. The PEA is not a preliminary feasibility study or feasibility study as defined by the

NI 43-101 guidelines.

Economic parameters used for the evaluation are shown in Table 22-1.



274

Table 22-1: Main Economic Parameters

22.3 Taxes and Royalties

The financial results are presented on a pre-income tax basis throughout this document.

However, the third party NSR has been deducted as well as the Mining Royalty Tax. An after-tax

analysis of the financial results for the Project is presented in Section 22.7.4.

Following is a summarized description of the Chilean income tax code applicable to mining

companies.

22.3.1 Income Tax

The corporate income tax legislation provides for a system divided as follows:

First Category Tax

First Category Tax is due on income derived from commercial, industrial and agricultural

activities; mining, fishing and other extractive activities; investment; and real estate. The tax rate

is 20 % and affects all taxpayers which carry out these activities.

Additional Tax (Impuesto Adicional)

This tax operates as a withholding tax and affects, among others, Chilean-source income

withdrawn or remitted abroad to non-residents or non-domiciled individuals, companies or other

entities organised abroad with or without a permanent establishment in Chile in the form of

branches, offices, agencies or representatives. Dividends paid to the shareholders not domiciled

or resident in Chile are subject to an additional withholding tax on distribution at a rate of 35 %.

However, if the distributed amounts had been subject to First Category tax, a 20 % credit is

given against the additional tax. The additional tax must be withheld by the corporation. The

Description Value Unit

Cu Price 275 cUSD/lb

Mo Price 13.6 USD/lb

Estimate Basis 3rd Qtr 2013 US$

Inflation None ---

Currency Fluctuation None ---

NSR 1.87 %

IVA (VAT) Excluded ---



275

same tax procedure is applicable on remittances of profit to partners or profit withdrawn by

individuals not domiciled or resident in Chile.

Depreciation

Depreciation on fixed assets, except for land, is tax deductible by the straight-line method based

on the asset’s useful life in accordance with the guidelines of the Internal Revenue Service

(IRS), computed on the restated value of the assets. A shorter lifespan has been set by the

Internal Revenue Service to apply to fixed assets purchased after 2003. However, the taxpayer

may opt for accelerated depreciation for new assets when acquired locally, or new or used

assets when imported, with useful lives of over five years. For this purpose, the assets will be

assigned useful lives equivalent to one-third of the normal, eliminating fractions of months.

Taxpayers may discontinue the use of the accelerated method at any time but may not returnagain to the accelerated method. The difference between accelerated and straight-line method is

that the latter will not deduct the taxable profit that can be withdrawn by partners or distributed to

shareholders. Public document available from SII includes the straight-line and accelerated

depreciation schedules for different asset categories.

No allowance is made for amortisation of intangible assets such as goodwill, patents,

trademarks, etc. Depletion is not tax deductible.

Stock/Inventory

The costing of goods sold or production materials and supplies consumed are based on the first-

in, first-out (FIFO) basis, although the ‘average’ method may be elected. The method adopted

determines the basis for the valuation of the closing inventory. The valuation so determined is

however, adjusted for the manner stipulated for the annual monetary correction procedures.

Dividends

Dividends received from Chilean corporations are exempt from First Category tax. There is no

distinction in Chile between dividends and inter-company dividends. A dividend in kind as such

does not exist. Dividends are necessarily expressed in cash, notwithstanding the fact that the

company may distribute certain assets corresponding in value to the dividend amount. Stockdividends in the form of bonus shares or increases in the par value of existing shares are not

considered income for tax purposes.

Interest Deductions

Generally, interest accrued or paid in the financial year is a deductible expense, provided that it

has been incurred in connection with loans related to the business.



276

Losses

Losses incurred in the fiscal year are deductible. Furthermore, there is no limit on carry forward

of losses. If the enterprise has taxable retained profit, losses must be carried back first. There

are no loss carry-back provisions, nor is it possible to group profitable and unprofitable affiliates

for tax purposes.

Foreign Sourced Income

Non-domiciled or non-resident corporations are only subject to income taxes on their Chilean-

sourced income. If the domestic corporation receives amounts in excess of the book value of an

investment when a foreign subsidiary is liquidated, these monies are considered income subject

to regular taxes. From 2012 on, the income received or accrued from derivatives such as

forwards, futures, swaps and options, by persons or entities without domicile or residence in the

country, is not affected by income tax, except those arising from derivatives that are settled by

physical delivery of shares or rights in companies incorporated in Chile.

Interest payments financial institutions not domiciled in Chile are subject to an additional

withholding tax of 4 %.

22.3.2 Mining Royalty Tax

All properties are subject to statutory obligations to the Chilean Government in the form of a

Mining Royalty Tax or “Impuesto a la Minería” in Spanish (IEM). This tax was introduced in 2006

and amended in 2010, and is applied against the collective operating (mining) profits of all the

operating units. The tax rate is calculated on a step scale on the basis of fine copper equivalent

sales:

0 to 12,000 t copper equivalent: No tax applied

12,001 to 50,000 t copper equivalent: 0.5 % to 4.5% of the Mining Operating Income

according to the scale showed in Table 22-2

More than 50,000 t copper equivalent: A different scale applies that starts at 5% of the Mining

Operating Income for Mining Operating Margins of less than 35 % up to 34.5 % for Mining

Operating Margins in excess of 85 %. This scale is shown in Table 22-2 and Table 22-3.





278

22.4 Production Summary

Data from the mine production schedule developed was used as the basis for the process

production schedule summarized in Table 22-4 and detailed by year in Table 22-5.

Table 22-4: Production Summary

Total

capacity

ktpd Cu Mo Cu Mo

1.2 88 13,111,528 215,917 3,933,459 101,502

1.3 176 16,693,910 278,044 5,008,173 133,461

1.5 88 - 176 16,691,531 277,658 5,007,459 133,276

2.2 44 7,019,676 99,479 2,105,903 47,750

Case

Concentrate Produced

(t)

Fine Metal Produced

(t)



279

Table 22-5: Production Detail by Year


Cu

Mo

Cu

Mo

Cu

Mo

Cu 65,123

Mo 721

Cu 222,204 292,366 266,520 229,997

Mo 2,079 2,760 2,517 2,227

Cu 481,853 637,338 462,845 270,389Mo 3,960 6,238 4,454 1,979

Cu 476,150 897,178 466,646 211,939

Mo 4,454 10,890 4,454 2,227

Cu 423,878 828,749 425,779 186,278

Mo 7,425 11,879 5,940 1,733

Cu 421,027 701,395 414,374 191,506

Mo 5,446 9,900 5,940 1,979

Cu 404,870 634,867 750,816 205,762

Mo 5,446 8,910 8,910 2,475

Cu 376,358 612,058 703,296 208,613

Mo 6,435 9,900 8,910 2,723

Cu 370,656 600,653 634,867 207,662

Mo 5,446 9,900 9,900 2,723Cu 331,690 655,776 615,859 205,286

Mo 3,960 10,890 9,900 2,475

Cu 315,533 606,355 623,364 204,811

Mo 3,465 11,879 8,908 2,723

Cu 314,582 644,371 630,966 203,861

Mo 4,454 5,940 9,898 2,971

Cu 312,682 655,776 623,364 198,634

Mo 5,940 7,921 9,898 2,723

Cu 312,682 636,768 644,270 186,278

Mo 5,940 11,879 9,898 2,723

Cu 312,682 577,843 634,867 179,150

Mo 5,940 12,871 7,921 2,723

Cu 308,880 551,232 619,661 176,299Mo 6,929 12,871 10,890 2,723

Cu 306,979 551,232 577,843 175,824

Mo 7,425 10,890 10,890 3,217

Cu 322,186 583,546 560,736 176,774

Mo 2,971 8,910 11,879 3,465

Cu 310,780 587,347 562,637 175,824

Mo 3,465 7,921 11,879 3,960

Cu 339,293 608,256 587,347 167,270

Mo 3,465 7,921 12,871 4,208

1

2

3

18

19

20

21

22

12

13

14

15

16

17

6

7

8

9

10

11

Period Production

Concentrate Produced (t)

0

4

5



280

Production Summary (continuation)


Cu 352,598 613,958 610,157 168,221

Mo 3,465 6,929 8,910 3,217

Cu 330,739 619,661 602,554 170,122

Mo 4,454 9,900 6,929 1,979

Cu 312,682 593,050 613,958 170,597

Mo 5,446 15,840 7,921 1,733

Cu 318,384 515,117 623,462 172,022

Mo 5,940 12,871 10,890 1,979

Cu 320,285 585,446 560,736 172,973

Mo 6,929 11,879 13,860 1,979

Cu 300,326 610,157 532,224 171,547

Mo 7,921 11,879 12,871 2,227

Cu 274,666 600,653 602,554 167,746

Mo 8,910 6,929 13,860 2,475

Cu 273,715 478,805 587,347 160,618

Mo 6,929 10,448 9,900 2,723

Cu 265,162 213,957 644,371 155,866

Mo 2,971 11,100 7,921 2,971

Cu 275,616 348,162 152,539

Mo 2,971 10,377 3,217

Cu 301,277 159,949 151,114

Mo 4,454 8,363 2,723

Cu 301,277 151,114Mo 4,454 2,723

Cu 301,277 151,114

Mo 4,454 2,723

Cu 301,277 151,114

Mo 4,454 2,723

Cu 301,277 151,114

Mo 4,454 2,723

Cu 330,739 154,915

Mo 6,435 1,733

Cu 330,739 154,915

Mo 6,435 1,733

Cu 330,739 154,915

Mo 6,435 1,733

Cu 330,739 154,915

Mo 6,435 1,733

Cu 330,739 154,915

Mo 6,435 1,733

Cu 262,310

Mo 10,890

13,111,528 16,693,910 16,691,531 7,019,676

215,917 278,044 277,658 99,479

32

Production

Concentrate Produced (t)

23

24

25

26

Period

27

28

29

30

31

Total Mo

39

40

41

42

43

Total Cu

33

34

35

36

37

38



281

The market prices for copper and molybdenum that have been selected are $2.75 / lb. for

Copper and $13.6 / lb. for Molybdenum.

Table 22-6 shows copper and molybdenum revenues by case.

Table 22-6: Revenue by Metal (Nominal values)

22.5 Residual Value In Situ

Residual values of minerals were considered in the cases when in situ copper remained after 40

years of plant operation. In situ copper was valued at 5 % of the copper price considered (13.75

cUS/lb. = 5%*275 cUS/lb.). Table 22-7 shows the copper residual value for each case.

Table 22-7: Copper Resource Residual Values



Copper 19,591,704 24,944,624 24,941,069 10,489,045

Molybdenum 2,794,709 3,598,848 3,593,860 1,287,605

Total 22,386,413 28,543,473 28,534,929 11,776,650

Description

kUSD


88 ktpd 176 ktpd 88-176 ktpd 44 ktpdCu In situ t 0 0 0 1,513,108

Cu In situ Mlb 0 0 0 3,329

Recoverable Cu Mlb 0 0 0 2,996

Residual Value kUSD 0 0 0 411,944

Description Unit



282

22.6 Economic Evaluation Results

At the metals prices used, the option which gives the best NPV and fastest payback period is

that of 176,000 tonnes per day. Based on the projections resulting from the financial model, the

pre-tax NPV, IRR and payback periods are shown in Table 22-8

Table 22-8: Summary of Pre-Tax Economic Results

22.7 Sensitivity Analysis

NPV sensitivity analysis has been performed for changes in market price for copper and

molybdenum; changes in capital costs and changes in operating costs, and changes on discount

rate. All sensitivity analysis has been carried out on a pre-tax basis and run as if the non-

consumptive water rights and the Hydro Electric Plant are included in the Project.

Changes for metal prices are expressed in increments of 25 cUS/ lb. for copper and at $25, $28,

$30 and $35 per kilogram converted into lbs. for molybdenum, while operating and capital costsare expressed in 5 % increments of negative and positive deviation from the Base Case values.

For discount rate, sensitivity has been made by increments of 1 % between 5 % and 10 %.



Net Present Value - 8% kUSD 421,447 745,818 411,212 2,963

IRR % 10.67% 11.43% 10.04% 8.02%


(*) Referred to the first operation year

Description Unit



283

22.7.1 Copper Price Variation

Table 22-9, Table 22-10 and Figure 22-1 to Figure 22-4 show NPV and IRR sensitivity analysesfor copper price variation.

Table 22-9: NPV Sensitivity Analysis – Cu Price Variation

Table 22-10: IRR Sensitivity Analysis – Cu Price Variation



225 -605,159 -925,473 -1,079,955 -584,702

250 -91,856 -89,828 -334,371 -290,869

275 421,447 745,818 411,212 2,963300 934,750 1,581,463 1,156,795 296,795

325 1,448,054 2,417,109 1,902,379 590,628

Cu Price

Variation

cUS$/lbkUSD



225 3.02% 2.51% 1.13% 2.70%

250 7.36% 7.54% 6.16% 5.56%

275 10.67% 11.43% 10.04% 8.02%

300 13.52% 14.74% 13.33% 10.24%

325 16.08% 17.67% 16.23% 12.29%

Cu Price

Variation

cUS$/lb IRR %



284

Figure 22-1: Long term Cu Price Variation – Case 1.2



285





286


22.7.2 Molybdenum Price Variation

Table 22-11 and Figure 22-5 to Figure 22-8 show NPV sensitivity analyses for molybdenum

price variation.

Table 22-11: NPV Sensitivity Analysis – Mo Price Variation



11.4 312,769 558,529 247,573 -52,122

12.7 377,976 670,902 345,756 -19,071

13.6 421,447 745,818 411,212 2,963

14.5 464,918 820,733 476,668 24,997

15.9 530,125 933,107 574,851 58,048

Mo Price

Variation

cUS$/lbkUSD



287

Figure 22-5: Mo Price Variation – Case 1.2




288



22.7.3 CAPEX and OPEX Variation

Table 22-12 presents NPV sensitivity analyses for Capex variation,

Table 22-13 presents NPV sensitivity analyses for Opex variation and Figure 22-9 to Figure

22-12 presents the data graphically.



289

Table 22-12: NPV Sensitivity Analysis –

Capex Variation

Table 22-13: NPV Sensitivity Analysis – Opex Variation



-35% 1,044,075 1,675,124 1,271,570 455,018

-30% 955,128 1,542,366 1,148,661 390,439

-25% 866,181 1,409,608 1,025,753 325,859

-20% 777,235 1,276,850 902,845 261,280

-15% 688,288 1,144,092 779,937 196,701

-10% 599,341 1,011,334 657,028 132,122

-5% 510,394 878,576 534,120 67,542

0% 421,447 745,818 411,212 2,963

5% 332,500 613,060 288,304 -61,616

10% 243,553 480,302 165,396 -126,196

15% 154,606 347,543 42,487 -190,775

20% 65,660 214,785 -80,421 -255,354

25% -23,287 82,027 -203,329 -319,933

30% -112,234 -50,731 -326,237 -384,513

35% -201,181 -183,489 -449,146 -449,092

Capex

VariationkUSD



-35% 1,565,867 2,688,693 2,201,351 639,150

-30% 1,402,378 2,411,140 1,945,617 548,266

-25% 1,238,890 2,133,586 1,689,883 457,382

-20% 1,075,401 1,856,032 1,434,149 366,498

-15% 911,913 1,578,479 1,178,414 275,615

-10% 748,424 1,300,925 922,680 184,731

-5% 584,936 1,023,371 666,946 93,847

0% 421,447 745,818 411,212 2,9635% 257,959 468,264 155,478 -87,921

10% 94,470 190,710 -100,256 -178,805

15% -69,019 -86,843 -355,990 -269,688

20% -232,507 -364,397 -611,725 -360,572

25% -395,996 -641,951 -867,459 -451,456

30% -559,484 -919,504 -1,123,193 -542,340

35% -722,973 -1,197,058 -1,378,927 -633,224

Opex

VariationkUSD



290

Figure 22-9: Capex and Opex Variation – Case 1.2



291





292


22.7.4 Discount Rate Variation

Table 22-14 presents NPV sensitivity analyses for discount rate variation

Table 22-14: NPV Sensitivity Analysis – Discount Rate Variation

22.8 After Income Tax Analysis

Coffey is not a financial adviser, and these models are indicative only. Coffey recommends that

the Company and other readers of this report seek their own financial and tax advice before

taking action in relation to the financial matters herein.

The financial model and results have been presented on a pre- income tax basis after deductingthe Mining Royalty Tax. After-tax sensitivities have been prepared to illustrate on a pro-forma

basis the potential impact of different taxation scenarios that may be applicable.

The preparation of a comprehensive after-tax model results from proper tax planning, modelled

with the advice of taxation specialists, which rely on a number of material assumptions that

cannot be defined at this point, but can be generally grouped into:

The optimal capital structure (leverage)

The financial and commercial terms and conditions available in the markets at the time of

preparing the actual comprehensive funding package for the Project

The availability and principal characteristics of multi-jurisdictional tax planning alternatives.

These assumptions depend on multiple material variables including, but not limited to:



5% 1,256,991 1,895,243 1,435,573 544,300

6% 915,642 1,436,948 1,018,225 321,006

7% 642,937 1,059,666 683,070 144,7398% 421,447 745,818 411,212 2,963

9% 239,156 482,600 188,984 -112,736

10% 87,464 260,349 6,172 -208,269

Discount Rate

VariationkUSD



293

The financial, operational and commercial strength and the country of origin of strategic

partners, joint venture partners, or other sponsors that would be involved in the

development and operation of the Project

The conditions prevailing in the multiple debt, equity and other financial markets relevant

to the Project

The country of origin of the Project’s main equipment suppliers, and

The conditions prevailing in the main commercial markets relevant to the Project (off-take,

EPCM, power supply, etc.).

Two after income tax scenarios have been prepared:

Unlevered

Levered. The levered after income tax analysis has been prepared based on the following

main assumptions:

▫ The Project can fund a portion of its capital investments with debt:

o Funding for 50 % of the initial capital expenditures and 50% of the expansion

capital expenditures

o Debt at an interest rate of 5 %

o Initial capital expenditures loans with a total tenor of 12 years, with equal

amortizations commencing once commercial operations begin

o Expansion capital expenditures loans are amortized over 8 years with equal

amortizations commencing upon completion of the expansion expenditures

o Up-front loan costs of 2 % of total loan amount

▫ The Project elects to utilize accelerated depreciation

▫ The Project does not utilize leasing or any other tax planning alternatives





295

23 ADJACENT PROPERTIES

West Wall

West Wall is a copper porphyry exploration project of similar size and development to the

Vizcachitas Project. It is approximately 20 km south-east from the Vizcachitas Property. West

Wall has published resources according to the 2004 Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves (JORC Code) of:

Indicated resources of 495 Mt @ 0.55 % Cu, 0.047 g/t Au and 0.009 % Mo and

Inferred resources of 970 Mt @ 0.48 % Cu, 0.047 g/t Au and 0.0076 % Mo (Xstrata 2012).

GlencoreXstrata and Anglo American each have a 50 % interest in the mining company

West Wall SCM which holds the project.

The porphyry copper style hydrothermal alteration identified in the West Wall property covers a

large area of approximately 7 km by 3 km. The primary control is structural with primary NS

structures, secondary NNE structures and strong WWN shearing. The mineralization is

associated with quartz diorite porphyry intruding into an Oligocene volcanosedimentary

sequence. The mineralization is mainly chalcopyrite and bornite associate with potassic

alteration.

Exploration has focused in the south of the prospect at Lagunillas and West Wall North. During

the 2011 –12 drilling programme a total of 24,000 m of infill were completed and incorporated

into the geological models and Mineral Resource estimate.



296

24 OTHER RELEVANT DATA

The Qualified Persons are unaware of any other data or information that would be relevant to

this Technical Report which is not already contained in one of the existing sections of this

Technical Report.



297

25 INTERPRETATION AND CONCLUSIONS

This section presents the conclusions and recommendations of the Qualified Persons for the

Project and this Technical Report.

25.1 Interpretations and Conclusions

Interpretations and conclusions of the Qualified Persons of the Vizcachitas PEA are listed below:

The results of the PEA indicate that the Vizcachitas Project is robust at this stage of

development demonstrating favourable economic potential that warrants further work

toward the development of pre-feasibility studies.

The exploration programme continues to demonstrate the potential for future growth of the

resource.

The sample preparation, security, and procedures followed by Los Andes Copper are

adequate to support a Mineral Resource estimate.

Assay data provided by Los Andes Copper was represented accurately and suitable for

use in resource estimation.

There are no known environmental issues existing or anticipated that could materially

impact the ability to develop the Vizcachitas Project.

There are no known factors related to metallurgical, environmental, permitting, legal, title,taxation, socio-economic, marketing, or political issues which could materially impact the

ability to develop the Vizcachitas Project.

The recommended overall pit slope templates are more conservative by rock mass

strength because the designs are based on bench configurations controlled by structural

fabric. Consequently, there is a future opportunity to optimize overall 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.

The metallurgical test work undertaken is reasonably extensive and suitable for this level

of study. The comminution data are considered adequate for a conceptual milling circuitdesign. The design of the processing circuits is based on this test work data in conjunction

with assumptions based on typical industry values.

The Vizcachitas mineralized material is of moderate competency and hardness, and

amenable to grinding in a conventional SABC circuit. The mineralogy is fine grained and

test work indicates a requirement to re-grind to a fine particle size to achieve adequate

liberation for flotation as is common within the industry.



298

Overall recoveries are estimated as 90 % for copper and 75 % for molybdenum, which will

be contained in metals concentrates.

The Project has been designed to meet current social and environmental management

practices. 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.

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 pre-feasibility study phase, a number of risks will be investigated further and possiblyreduced or eliminated. Similarly, further investigation and evaluation of some opportunities may

allow them to be incorporated in the Project.

25.2.1 Risks

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; or (ii) increased costs or difficultiesassociated with financing the Project

Shortage of skilled labour due to competing demands from the mining industry in general,

and other mines in Chile in particular

Capital and operating cost escalations as project plans and parameters change or are

refined

Water supply cost; Los Andes Copper must secure consumptive rights to water closer to

the Project, the final cost to secure these rights has to be defined

Failure to obtain or maintain or a delay in obtaining necessary permits or approvals by

government authorities

A structural geological model has not been developed for the pit. There is risk that

unidentified structures exist which could negatively affect the pit slope stability presented

in this Technical Report



299

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

Electrical power is a significant component of the plant operating costs. Higher power

prices and overall power availability could impact project returns.

25.2.2 Opportunities

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

Higher metals pricing, particularly for copper, than those used as a long term forecast in

the financial model

Potential for expansion of mineral resources

Additional metallurgical optimization test work may result in higher metallurgical recoveries

and/or better concentrate grades

More cost effective development with more detailed information

Additional investigation of rail transport options and negotiation with interested service

providers (both rail and port) may lead to more cost effective transport of concentrates and

consumables



300

26 RECOMMENDATIONS

Based on the results of the PEA, the Qualified Persons recommend that Los Andes Copper

complete a PFS to further define the Project in order to more accurately assess its technical and

economic viability and to support permitting activities.

The tasks and estimate of the costs to complete the PFS are summarized below in Table 26-1.

Table 26-1: Tasks and Budget Estimate of the Costs to Pre-feasibility Study

Estimated cost

kUS$

1.

Explore potential extensions of pit mineralization, including 5,000 m of

DD drilling at approximately 10 locations, and necessary geologic, logistical, assaying,and administrative support ($400/m allowance; 19% IVA included).

$ 2,000,000

2. Update resource model/estimate with additional exploration drilling results, including

QA/QC. $ 200,000

3. Conduct additional conminution and flotation laboratory testwork of the new drilling

campaign is recommended. $ 200,000

$ 2,400,000

3. Complete Prefeasibility Study

a) Infill drilling to convert a percentage of the Inferred and Indicated resouce to measured

resouces. 5,000 meters of drilling. ($400/m allowance; 19% IVA inc luded). $ 2,000,000

b) Complete condemnation drilling for facility siting, including 5,000 m of drilling. $ 1,000,000

c) Additional mine geotechnical data collection and engineering analysis, including 4,200

m of DD drilling at 5-7 locations. $ 2,000,000

d)Revise mine design and production sc hedule based on updated resource model;upgrade accuracy of mining capital, operating, and sustaining capital cost estimates to

PFS level.

$ 500,000

e) Complete additional hydrogeological field investigations, engineering analysis, and

computer modeling in support of mine dewatering and project water supply. $ 1,000,000

f) Complete further evaluation of new water feed to the water treatment plant and upgrade

capital and operating costs to PFS level. $ 20,000

g)

With the new drilling campaign, complete mineral characterization consisting of spatial,

grade, and mineralogic variability testing of representative samples from across the

deposit, in numbers accepted by the industry as being statistically representative.

$ 300,000

h) Conduct additional conminution and flotation laboratory testwork of the new drilling

campaign is recommended. $ 100,000

i) Complete process and infrastructure design and associated costs to a PFS level. $ 1,000,000

j) Complete field geotechnical and laboratory investigations ; complete PFS level design

and associated costs for geotechnical infrastructure (TSF, WRSF, and roads). $ 600,000

k) Perform envi ronmental basel ine s tudies and permit ting ac tivi ties . $ 350,000

l) Complete an updated marketing study. $ 50,000

m) Complete an updated power supply study. $ 50,000

n) Update and upgrade logistics and transportation study to PFS level. $ 75,000

o) Future studies management and coordination, execution planning and scheduling. $ 500,000

$ 9,545,000

$ 11,945,000

Task

Subtotal Exploration and Resource Estimate

Subtotal PFS Estimate

Total Estimated Cost for Recommended Future Work



301

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305

28 CERTIFICATES AND SIGNATURES

The undersigned prepared this technical report titled “Preliminary Economic Assessment for

Vizcachitas Copper/Molybdenum Project, Region V, Chile”, National Instrument 43-101,

Technical Report, Effective date January 23, 2014.



306

CERTIFICATE OF QUALIFIED PERSON

7445 Fleming Road, Vermon, Canada, V1H1C1

Telephone: +1 (416) 307-7367

Fax: +1 (416) 307-7483 fax

[email protected]

I, John Wells do hereby certify that:

1. I am Principal of the firm John Wells, Minerals Processing Consultant, of Vermon, Canada.

My address is 7445 Fleming Road, Vermon, Canada, V1H1C1.

2. This certificate applies to the Technical Report titled "Preliminary Economic Assessment for

Vizcachitas Copper/Molybdenum Project, Region V, Chile, Effective Date: January 23,

2014", prepared for Los Andes Copper Ltd. (the "Technical Report").

3. I am a graduate of the University of London (Royal School of Mines) and hold a Minerals

Engineer title (1967).

4. I am a practicing metallurgical engineer and a Fellow of the Southern African Institute of

Mining and Metallurgy (FSAIMM); and a member of the Canadian Institute of Mining,

Metallurgy and Petroleum.

5. My relevant experience for the purposes of the Technical Report is:

Review and report as a consultant on numerous mining operation and projects around

the world for due diligence and regulatory requirements.

Pre-feasibility and Feasibility Study work on several copper porphyry projects.

Worked as a metallurgical engineer at several mines.

6. I have read the definition of “qualified person” set out in National Instrument 43-101 –

Standards of Disclosure for Mineral Projects (“NI 43-101”) and confirm that by reason of myeducation, 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 purposesof NI 43-101.

7. I most recently personally inspected the Vizcachitas Property on June 4th, 2013.



307

8. I am responsible for the preparation of Items: 1.7, 1.11, 13 and 17, and I am jointly

responsible for Item 25 of the Technical Report (NI 43-101) of the Preliminary Economic

Assessment for Vizcachitas Copper/Molybdenum Project, Region V, Chile, for Los Andes

Copper Ltd., effective date January 23, 2014.

9. I am independent of Los Andes Copper Ltd.

10. I have had no prior involvement with the Vizcachitas Project.

11. I have read NI 43-101 and the Technical Report has been prepared in compliance with

NI 43-101.

12. 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.

Dated this February 18, 2014.

“signed and sealed”

____________________________________

John Wells

Minerals Engineering - Business Administration

Independent Minerals Processing Consultant

Fellow Member of the Southern African Institute of Mining and Metallurgy





309

education, affiliation with a professional association (as defined in NI 43-101) and past


7. I personally visited and inspected the Vizcachitas Property on June 4th, 2013.

8. I am responsible for the preparation of Items: 1.1 to 1.4, 1.9, 1.10 1.12 to 1.17, 2 to 6, 15, 16,

18 to 24, 26 and 27, and I am jointly responsible for Items 1.5 1.6, 7, 8, 9, 10 and 25 of the

Technical Report (NI 43-101) of the Preliminary Economic Assessment for Vizcachitas

Copper/Molybdenum Project, Region V, Chile, for Los Andes Copper Ltd., effective date

January 23, 2014.




NI 43-101.

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.



___________________________Manuel HernándezCivil Mining EngineerFellow Member of the Australasian Institute of Mining and Metallurgy



310


Alonso de Córdova 5710, Office 307, Las Condes,

Santiago, Chile

Telephone: +56 (2) 2952 3977

Fax: +56 (2) 2952 3977

[email protected]

I, Porfirio Rodriguez do hereby certify that:

1. I have been retained by Coffey Consultoría y Servicios SpA, as a Mining Engineer,

Geostatistics Specialist. My address is Alonso de Córdova 5710, Office 307, Las Condes,

Santiago, Chile.




3. I graduated with a Bachelor of Science Degree in Mining Engineering from the Universidade

Federal de Minas Gerais, Brazil, in 1978.

4. I am a member of the Australian Institute of Geoscientists (MAIG).

5. I have worked as a mining engineer for a total of 34 years. My relevant experience for the

purpose of the Technical Report is:

Review and report as a consultant on numerous exploration project in Latin America

and around the world for due diligence and regulatory requirements.

I have been involved in: Resource and Reserve Estimates, Geometallurgy,

Geostatistics, Mine Planning, Economic Evaluation of Mining Projects, Systems

Analysis, Operational Research and Project Management.


Standards of Disclosure for Mineral Projects (“NI 43-101”) and confirm that by reason of myeducation, affiliation with a professional association (as defined in NI 43-101) and past


7. I am responsible for the preparation of Items: 1.8 and 14, and I am jointly responsible for

Item 25 of the Technical Report (NI 43-101) of the Preliminary Economic Assessment for

mailto:[email protected]





311

Vizcachitas Copper/Molybdenum Project, Region V, Chile, for Los Andes Copper Ltd.,

effective date January 23, 2014.




NI 43-101.






_____________________________

Porfirio Rodriguez

Mining Engineer.

Geostatistics Specialist

Member of the Australian Institute of Geoscientists



312


Alonso de Córdova 5710, Office 307, Las Condes,

Santiago, Chile

Telephone: +56 (2) 2952 3977

Fax: +56 (2) 2952 3977

[email protected]

I, Román Flores do hereby certify that:

1. I am I have been retained by Coffey Consultoría y Servicios SpA, as a Geologist. My

address is Alonso de Córdova 5710, Office 307, Las Condes, Santiago, Chile.




3. I graduated with as a Geologist from the Universidad Católica del Norte, Antofagasta, Chile,

in 1976.

4. I am a Registered Member of the Chilean Mining Commission and hold a valid Certificate of

Qualified Competency from the Chilean Mining Commission.

5. I have worked as a geologist for a total of 37 years. My relevant experience for the purposeof the Technical Report is:

Review and report as a consultant on numerous exploration project in Chile and

around the world for due diligence and regulatory requirements.

I have been involved in: mineral exploration, mine site geology and mineral resource

estimations on numerous open pit base metal and gold deposits in Chile, Columbia,

Peru, Brazil and Argentina.


Standards of Disclosure for Mineral Projects (“NI 43-101”) and confirm that by reason of my

education, affiliation with a professional association (as defined in NI 43-101) and past


7. I most recently personally inspected the Vizcachitas Property on June 4th, 2013.






313

8. I am responsible for the preparation of Items 11, and 12, and I am jointly responsible for

Items 1.5, 1.6, 7, 8, 9, 10 and 25 of the Technical Report (NI 43-101) of the Preliminary

Economic Assessment for Vizcachitas Copper/Molybdenum Project, Region V, Chile, for Los

Andes Copper Ltd., effective date January 23, 2014.




NI 43-101.




Dated this February 18, 2014


_______________________

Román FloresGeologist

Member of Chilean Mining Commission



314

APPENDICES



315

APPENDIX A: LEGAL OPINION



316



317



318



319



320

APPENDIX B: LOCATION, AZIMUTH AND DIP OF

ALL DRILL HOLE



321

Hole IDEast

WGS84

North

WGS84

Elevation

masl. (m)

Total Depth

(m)

Year

DrilledCompany

VP-1 365,859.65 6,414,169.67 2,032.91 300.25 1993 P lacer Dome

VP-2 365,647.26 6,413,393.08 2,034.88 300.2 1993 Placer Dome

VP-3 365,847.07 6,413,575.27 1,998.58 303.85 1993 P lacer Dome

VP-4 366,049.70 6,413,595.30 2,081.85 251.5 1993 Placer Dome

VP-5 366,189.74 6,413,270.68 2,040.49 300 1993 Placer Dome

VP-6 366,102.00 6,413,138.50 1,965.91 497.15 1993 P lacer Dome

V-01 365,838.18 6,414,161.03 2,023.46 307.13 1995-98 General Minerals













V-14A 365,967.00 6,413,327.00 1,980.00 20.43 1995-98 General Minerals







V-21 366,528.09 6,412,599.25 2,152.97 196.42 1995-98 General MineralsV-22 366,367.00 6,413,147.00 2,095.00 253 1995-98 General Minerals












V-34 366,267.21 6,412,746.70 1,980.10 357.9 1995-98 General MineralsV-35 366,179.05 6,412,834.44 1,965.42 248.1 1995-98 General Minerals











322

Hole IDEast

WGS84

North

WGS84

Elevation

masl. (m)

Total Depth

(m)

Year

Drilled

Company




V-48 365,897.00 6,413,094.00 2,020.00 190 1995-98 General Minerals









V-58 365,797.00 6,413,467.00 2,000.00 202.25 1995-98 General MineralsV-59 366,237.00 6,413,137.00 2,025.00 167.7 1995-98 General Minerals





LAV-064 365,973.79 6,412, 730.48 1,954.95 424 2007 Los Andes

LAV-065 365,972.80 6,412, 728.20 1,955.20 280 2007 Los Andes

LAV-066 365,859.09 6,412, 780.20 1,996.00 256 2007 Los Andes

LAV-067 365,704.94 6,413, 027.80 2,049.36 240 2007 Los Andes

LAV-068 365,941.67 6,412, 949.58 2,018.79 250 2007 Los Andes

LAV-069 366,012.22 6,413, 135.27 1,971.44 200 2007 Los Andes

LAV-070 366,424.84 6,412, 677.36 2,089.94 210 2007 Los Andes

LAV-071 365,931.55 6,412, 639.29 1,955.20 250 2007 Los Andes

LAV-072 365,922.77 6,412, 838.73 1,993.14 250 2007 Los Andes

LAV-073 366,473.65 6,412, 753.77 2,077.66 250 2007 Los Andes

LAV-074 365,934.13 6,413,255.25 1,975.76 369.3 2007 Los Andes

LAV-075 365,679.67 6,413, 257.66 2,018.80 358 2007 Los Andes

LAV-076B 365,847.89 6,412, 458.90 1,943.26 250 2007 Los Andes

LAV-077 366,330.05 6,412, 704.52 2,022.44 350 2007 Los Andes

LAV-078 366,405.66 6,412, 897.15 2,066.85 300 2007 Los Andes

LAV-079 366,288.35 6,412, 824.91 1,994.71 250 2007 Los Andes

LAV-080 366,136.86 6,412, 555.14 1,981.87 250 2007 Los Andes

LAV-081 366,103.31 6,412, 771.44 1,953.22 386 2007 Los Andes

LAV-082 365,768.76 6,412, 708.90 1,992.64 250 2007 Los Andes

LAV-083 365,698.16 6,413, 358.58 2,006.85 250 2007 Los Andes

LAV-084 365,585.39 6,412, 982.96 2,096.85 250 2007 Los Andes

LAV-085 365,577.17 6,413, 085.26 2,120.74 292 2007 Los Andes

LAV-086 366,005.21 6,412, 817.47 1,958.25 280 2007 Los Andes

LAV-087 365,762.96 6,412, 910.26 2,064.77 250 2007 Los Andes

LAV-088 366,005.08 6,412, 821.10 1,962.73 250 2007 Los Andes

LAV-089 365,842.63 6,412,881.23 2,042.80 254.05 2007 Los Andes

LAV-090 365,676.87 6,412, 946.31 2,068.88 412 2007 Los Andes

LAV-091 365,644.06 6,413, 059.90 2,081.38 362 2007 Los Andes

LAV-092 365,932.34 6,412, 641.03 1,956.25 250 2007 Los Andes

LAV-093 365,931.28 6,413, 174.45 1,977.50 478 2007 Los Andes

Documents

1. Viscachita Project (Cu-Mo)