Teaser Megalo July 2018

MEGALO PROJECT JULY - 2018
MEGALO PROJECT (Megalo and Megalo Norte Targets) – IV Region, Chile
RESUMEN
The Megalo project is located in Chile’s IV Region, 250Km north of the capital city of Santiago
and some 140km southeast of the city of La Serena and the port of Coquimbo. The closest
town is Combarbala, 11 km to the southeast of the project area.
The mining property comprises two groups of exploration tenements, duly constituted and in
good standing, namely Megalo and Megalo Norte (Fig. 1), covering part of a large porphyry
copper system in the case of Megalo (700 ha), and disseminated mineralization of a Cu-Ag
Stratabound (“Chilean Manto”} style in the case of Megalo Norte (600 ha). Both project areas
are contained within a large alteration zone covering over 50km2.Hc). Ambos proyectos están
en el borde de una gran zona de alteración de más de 50 km2.
Fig. 1: Location of the Megalo Project with layout of the mining properties shown in light green (13
km2 – 1,300ha). The green dots represent scattered artisanal mine workings developed to extract higher
grade copper oxides.
Contact: Chile (I. Collado) +56 9 9979 1340. (A. Alegria) +56 9 6589 9004 1
Australia (E. Valenzuela)+61 402 553 994
GEOLOGY OF AREA
PLUTON LA
GLORIA
BRECHA MAGMATICO
HIDROTERMAL
BRECHA HIDROTERMAL
COMBARBALITA
PLUTON QUILITAPIA – EL DURAZNO
Hydrothermal Breccia, Epithermal
Fig. 2: Local geology and mining property of the Megalo Projects, including the Megalo
Porphyry Copper target and Megalo Norte Stratabound Cu-Ag target. Source: Adapted from
the 1:10,000 scale Sernageomin’s Geological Map of Illapel (Rivano, 1991).
LITHOLOGY
VOLCANIC AND SEDIMENTARY ROCKS
The project area is located along the contact between the Quebrada Marquesa formation of
Middle Cretaceous age (Barremiano-Albiano), consisting of a sequence of volcanic rocks laying
concordant over the Arqueros formation of Lower Cretaceous age (Neocomial). Conformed in
the zone of andesitic-dacitic and pyroclastic lava flows, with some lenses of volcanic sediments.
INTRUSIVE ROCKS
Illapel Superunit
This unit intrudes the layered rocks mentioned above, it is known as Plutón Quilitapia - El
Durazno of granodioritic-tonalitic composition, and according to Rivano (1991) its approximate
age is 85 m.y in its borders.
San Lorenzo Unit
An intrusive unit located immediately to the East of of the Illapel Superunit. It appears in the
form of an intrusives complex acting as precursor and intramineral. It is referred to as the Plutón
El Sauce in the geological chart, and is linked to a strong and extensive hydrothermal alteration
named “Zona Alteración Combarbalita” in the context of this report. Rivano (1991) attributes
this unit an approximate age of 65,3 + 3,1 m.y. (K-Ar) ie between the Upper Cretaceous and
Lower Paleogene eras.
HYDROTHERMAL BRECCIAS
Outcrops showing at least 3 types of hydrothermal breccias are present in the project area as
described below.
Magmatic Hydrothermal Breccia
Located at the northern end of the Megalo Target and immediately east of the mining property.
It appears similar to the breccia pipe found at the Lana y Corina porphyry (owned by
Antofagasta Minerals), which is located some 4.5 Km south of Megalo. The magmatic
hydrothermal breccia is characterised by dioritic clasts disguised by intense phylic alteration,
generally sub-angular, with an average size of some 5cm, a matrix composed of sericite,
specularite, quartz, some tourmaline, copper oxides, and some sulphides in quartz (chalcocite,
chalcopyrite, traces of bornite, and some pyrite). Initial field sampling and assaying using XRay
equipment points to some strong copper grades (> 1% CuT on average), >10% Fe, >0.5% Zn,
> 65ppm Mo, as well as some interesting cobalt grades (of the order of 800ppm Co) in some
areas.
Hydrothermal Combarbalite Breccia (Lithocap)
This breccia rock is highly noticeable in the area due to its strong white, red, and brown colours.
In the context of this report we refer to it as “Brecha Hidrotermal Combarbalita” as it is typical
of this Combarbala region. Its origin is in part related to volcanic, volcanoclastic, and
sedimentary rocks from the Quebrada Marquesa formation, and to intrusives present in the
area which are strongly altered to a heterogeneous mixture of natroalunite, caolinite, silice,
various types of clay, hematite, limonite and calcite among others (Rivano, 1991). This
alteration is located along a corridor in a NNW-SSE direction, covering the entire length of the
Illapel chart and extending north and south. Within the breccia zone the alteration varies in
intensity and in the minerals predominant in the alteration. Regionally, this breccia is related to
the intrusives of the San Lorenzo Unit and it has been assigned an age of approx. 78,7 y 72, 9
My (K-Ar) based on samples obtained from combarbalite deposits, one in the proximity of
Combarbala and the other from the La Jarilla area to the NNE of the town of Salamanca
(Rivano, 1991).
Brecha Hidrotermal Pórfido Diorítico

Combarbalita Fino
Photo 1: Shows the Hydrothermal Combarbalite Breccia in the background, with high content of clays,
quartz, hematites and limonites, and abundant tourmaline in some areas. On flat ground outlined in red
there is an area containing outcrops of the Megalo Dioritic Porphyry with strong philic alteration, showing
some copper oxide mineralisation, relict sulphides (Cpy, Mo, some Py), and the footmarks of artisanal
mining activity (pirquenes).
EPITHERMAL BRECCIA
This breccia is located at the northern border and adjacent to the Hydrothermal
Combarbalite Breccia. It is characterised by zones of intense alteration with noticeable
coloured anomalies derived from strong acid leach, containing clays, amorphous silica,
jasperoids, and abundant hematite-limonite. The Epithermal Breccia contains several

areas with boxworks and voids, with areas of massive replacement of pre-existing
sulphides, varying in size including large pockets and lenses now filled with heamatite,
goethite, gypsum and clays. The high silica content of the rock has produced protruding
bodies due to its greater resistance to erosion, some of them of considerable size like
mountain ranges.
Terraspec analysis of samples from these breccias show high contents of clays (Illita),
smectites (beidellite, ferrosaponite, sepiolite, montmorillonite, kaolinite (dickite),
glauconite, little zeolite (clinoptilolite and cabasita), besides Goethite and hematite.
X-ray analysis shows high iron contents (> 5%), Mo up to 65 ppm, As> 50 ppm, Pb>
50 ppm, Ba> 1500 ppm, Ti> 7000 ppm, and point sample with Co> 1000 ppm, and only
one Cu reading (75 ppm).
Fig. 3: Structural interpretation of the Megalo porphyry area, similar to what exists in almost all
Cretaceous porphyries. The NS Fault System with sinistral movement is shown, according to
the major occurrences and relationships observed in the field.
GEOCHEMISTRY
7 lines of soil samples were developed on Megalo area, samples were tested by X Ray
gun.
An important Cu – Mo anomaly was detected (Fig. 4 and 5):
Fig. 6: TARGET MEGALO: Distribution of Copper contents in ppm, in porphyry copper, with
soil and rock samples, on the surface. Most of the analyzes were accomplished by portable X-
ray fluorescence (XRF).
Fig. 7: TARGET MEGALO: Distribution of molybdenum laws in ppm, porphyry copper, from
samples collected on the surface, much of them are from small mining works of pirquineros in
the area.
Fig. 8: Landsat image, with "density slice" process, with fusion of bands 742, which perfectly
shows the diverse alterations of the Megalo and Megalo Norte area.
MINERALIZATION
The extensive area of alteration that affects Megalo, presents at least 2 areas with
copper mineralization: The first and most important is that of the target that includes
the Megalo Dioritic Porphyry, which also presents subordinate molybdenum and gold
contents related to the centers of phyllic alteration (sericitic), of Porphyry Dioritic
Megalo, and the hydrothermal-magmatic breccias. And in second order, the
disseminated copper mineralization of the Stratabound type Cu-Ag, with feeders. In
both targets, there are different types of mineral bodies, where copper mineralization is
possible to observe that occurs in hypogenic sulphides, supergene sulfides, and
oxidized copper minerals.
 Mineralization type Porphyry Cu-Au (Mo). Target Megalo

In the Megalo Dioritic Porphyry, as observed in the field, the oxidized copper
mineralization is strongly disseminated in intense sericitic quartz alteration, and
in B-type quartz veinlets, with central suture. Relicts of biotite-magnetite veinlets
and possible type A veinlets are also observed. In some small mining works,
under 3 meters from the surface, the pirquineros obtained relict copper
sulphides, which are mainly chalcocite and chalcopyrite. With X-ray gun,
interesting results are observed with values between 0.6% at> 5% Cu;
molybdenum variable between 15 to 198 ppm Mo. Additionally, 117-566 ppm
Zn; 23-87 ppm Pb; 31-1668 AS; 294-2938 ppm Mn; 2493-6987 Ti.
Photo 2: Hand samples of the Megalo Dioritic Porphyry. Green and black copper oxides
are observed, with some relict sulphides in boxworks and veinlets.
In the fine Dioritic Porphyry, the mineralization consists only of copper oxides, which is
observed scattered in the rock, and with few veinlets. The results with X-ray gun were:
3799-60134 ppm Cu; 28062-62697 ppm Fe; 574-1378 ppm Zn; 545-11070 ppm Mn; 19-49
ppm Pb.
In the Hydrothermal-Magmatic Breccia, copper mineralization is associated with the matrix

of sericite, quartz, specularite hematite, and copper oxides, which can be observed from
small mining works, chalcocite and chalcopyrite. The results of analysis by means of an X-
ray gun are: 4780 to 8656 ppm Cu; 61 to 67 ppm Mo; > 10% Fe; 89-7145 ppm Zn; 49-160
ppm Pb; 50-357 ppm As; 3310 to> 10% Mn.
 Mantiform type mineralization Cu-Ag (stratabound). Target Megalo Norte
In the Target Megalo Norte, the rocks are mineralized with green copper oxides, especially
atacamite and in some places antlerite; and also black copper oxides. In the artisanal
mineral works and less than 2 meters from the surface it is possible to observe chalcocite.
Approximately under 4 meters there is much bornite and digenite, and scarce chalcopyrite.
What accounts for the scarce iron and sulfur content at the time of the sulphide copper
mineralization in this type of deposit.
The chemical analysis of samples from the area shows an average of 1.5% CuT in copper;
24 g / t Ag; 0.02 g / t Au; 28 ppm Co; 5% Faith; 1.4% K; 0.5% Ca; 15 ppm La; 20 ppm Li;
1.55% Mg; 1028 ppm Mn; 7 ppm Mo; 3.7% Na; 8.7 Ni; 880 ppm P; 70 ppm Pb; 24.3 ppm
Sc; 187 ppm Sr; 14.7 ppm Ta; 15.3 ppm Te; 6 ppm Th; 0.4% Ti; 210.3 ppm V; 15, 3 ppm
Y; 158.7 ppm Zn; 110.7 ppm Zr. The results of samples analyzed with an X-ray gun give
much better copper results.
This type of stratabound deposit in Chile is characterized by having high copper grades:
 Mantos Blancos (Anglo American): 120 Mt extracted between 1960 and 1995 1.64
Mt Cu fine; Reserves (1995) 43 Mt oxides 0.86% Cu and 62 Mt sulfides 1.18% Cu and
12 g / t Ag.
 El_Soldado (Anglo American): > 200 Mt 1.35% Cu (production + reserves).
 Mantos de la Luna: 40.5 Mt 1.39% Cu (resources) + 6 Mt 1.4% (inferred).
 Carolina de Michilla (AMSA): 17 Mt 1.76% Cu
 El_Lince (AMSA): 16 Mt 1.56% Cu
 Buena Esperanza: 5 Mt 1.6% Cu
 Lo Aguirre: 11.1 Mt 2.14% Cu
Atacamite and chalcocite
Antlerite
Bornite
Photo 3, 4, 5: Volcanic rocks of the Quebrada Marquesa Formation, with stratabound

mineralization of Cu and Ag. The minerals observed correspond to copper oxides (atacamite
and scarce antlerite). These samples come from various artisanal mining activities, from the
Megalo Norte target, in their own mining properties.
FRANJA METALOGENICA
a) b) Tipo de Deposito
MEGALO
LA VIUDA
MEGALO NORTE
Fig. 9. Lower Cretaceous Porphyry Belt (dark green) and Upper (light green). b. Belt of Fe-Cu-
Au Oxides from the Middle to Upper Jurassic (blue) and Lower Cretaceous (dark green).
Modified by Sillitoe and Perelló (2005). In the area there is a diverse set of types of metal
deposits associated with rocks of the Lower Cretaceous along the Cordillera de la Costa de
Chile. These include some porphyry copper, such as Carmen de Andacollo de Teck, which
contains higher gold grades (0.23 g / t Au) of Cu-Mo porphyries in Chile. In this belt there are
numerous epithermal gold deposits, and copper in stratified bodies, all iron deposits in Chile,
and IOCG, such as Candelaria.
DISTRICT ECONOMIC GEOLOGY
The Megalo and Megalo Norte Projects areas are located in an elongated Mining
Cluster approximately N15 ° W, following a regional structural trend, which highlights 9
porphyry copper-like mineral deposits, such as the Llahuin Porphyry System (Hudbay
Minerals) , Porfido Lana y Corina (AMSA), and La Viuda y Megalo (SCM Megalo).
Fig. 10: Distribution of the most important mineral deposits in the area of Combarbalá.
INFORMACIÓN ANEXA
GALERÍA FOTOGRÁFICA
Photo 6: Pirquineros working in the

Megalo dioritic porphyry area, choosing
copper oxides. Rock affected with intense
sericitic alteration and copper oxides
disseminated..
Photo 7: Alteration epidote,

quartz, hematite, and chlorite, in
addition to copper oxides, which
according to Terraspec analysis,
also contains epidote, halloysite,
clinosoicite, turmaline and
ferromagnesite chlorite,
stylpnomelano, PX kaolinite. The
analysis of X-ray gun shows 358-
3625 ppm Cu; 501-5075 ppm Fe;
35-45 ppm Pb; 1545-5110 ppm
Mn, a reading with the presence
of 25 ppm Hg. (Target Megalo
Norte).
Photo 8: Sample of bornite

disseminated, with chalcosine
rings and copper oxides
(atacamite), collected in
artisanal mining works in the
mining property of Megalo
Norte.
Photo 9: In the foreground epithermal hydrothermal breccia, and forward one of the many
mining works elaborated by local pirquineros, in stratabound Cu-Ag of disseminated copper
oxides, in the Target Megalo Norte.

Teaser Megalo July 2018

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MEGALO PROJECT JULY - 2018

MEGALO PROJECT (Megalo and Megalo Norte Targets) – IV Region, Chile

PLUTON QUILITAPIA – EL DURAZNO

Hydrothermal Breccia, Epithermal

VOLCANIC AND SEDIMENTARY ROCKS

San Lorenzo Unit

Magmatic Hydrothermal Breccia

Hydrothermal Combarbalite Breccia (Lithocap)

Brecha Hidrotermal Pórfido Diorítico

jasperoids, and abundant hematite-limonite. The Epithermal Breccia contains several

An important Cu – Mo anomaly was detected (Fig. 4 and 5):

 Mineralization type Porphyry Cu-Au (Mo). Target Megalo

In the Hydrothermal-Magmatic Breccia, copper mineralization is associated with the matrix

 Mantiform type mineralization Cu-Ag (stratabound). Target Megalo Norte

Atacamite and chalcocite

Photo 3, 4, 5: Volcanic rocks of the Quebrada Marquesa Formation, with stratabound

DISTRICT ECONOMIC GEOLOGY

Photo 6: Pirquineros working in the

Photo 7: Alteration epidote,

Photo 8: Sample of bornite

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